AMENDED AND RESTATED
REVOLVING CREDIT AND LETTER OF CREDIT AGREEMENT
This Agreement, dated as of June 30, 1997, is entered into
by (1) FRONTIER OIL AND REFINING COMPANY, a Delaware corporation
(the "Borrower"), (2) the banks listed on the signature pages
hereof and each other bank that becomes a party hereto pursuant
to Section 9.8 (collectively the "Banks") and (3) UNION BANK OF
CALIFORNIA, N.A., a national banking association, as agent (the
"Agent") for the Banks.
ARTICLE 1.
INTERPRETATION AND DEFINITIONS
Section 1.1 Definitions. The following terms, as used
herein, shall have the following respective meanings:
"Account Pledge Agreement" means the Account Pledge
Agreement dated as of August 10, 1992 executed by the Borrower in
favor of the Agent.
"Accounts" means the unpaid portion of the obligations to
the Borrower of customers of the Borrower to pay for (a) goods
sold and shipped (net of commissions to agents) or (b) services
rendered to Conoco Inc. pursuant to the Resid Processing
Agreement. Such obligations shall be deemed to have been paid
when the payment therefor clears the Lockbox Account or, in the
case of certain wire transfers, the Concentration Account (as
defined in the Account Pledge Agreement).
"Affiliates" means Wainoco, FHI, FOC, FRI and FPLI.
"Agent's Fee Letter" means the letter agreement dated July
1, 1996 between the Borrower and the Agent regarding fees payable
by the Borrower to the Agent for its own account with respect to
this Agreement.
"Assignment and Acceptance" means an Assignment and
Acceptance substantially in the form of Exhibit D.
"Authorized Officer" means, with respect to any action, an
officer of the Borrower authorized to take such action pursuant
to resolutions of the Borrower delivered to the Agent from time
to time.
"Borrowing" means a borrowing by the Borrower consisting of
Loans of the same Type made on the same day by the Banks.
"Borrowing Base" means, at any time of determination, the
sum of:
(a) ninety-five percent (95%) of the amount of
Eligible Accounts backed by letters of credit from banks listed
on Schedule 1, but only to the extent, with respect to any such
bank, that the aggregate face amount of all letters of credit
backing Eligible Accounts issued by such bank that are outstand-
ing at any time does not exceed the applicable amount set forth
on Schedule 1 (provided, however, that the Agent reserves the
right in its sole discretion to make exceptions to the categories
on Schedule 1 by notification of the same to the Borrower in
writing);
(b) ninety percent (90%) of the amount of Eligible
Accounts receivable from approved account debtors listed from
time to time on Schedule 2 or as to which the Majority Banks
through the Agent have given their prior written approval, which
listing or approval may be withdrawn at any time by the Majority
Banks through the Agent by written notification to the Borrower
(such Eligible Accounts to include those receivable from account
debtors that are Governmental Persons that have complied with the
granting and perfection provisions of the federal Assignment of
Claims Act of 1940);
(c) eighty-five percent (85%) of Eligible Accounts, to
the extent they do not fall within clause (a) or (b) above
(provided, however, that the aggregate amount of Eligible
Accounts consisting of Accounts receivable from Conoco Inc. for
the rendering of services pursuant to the Resid Processing
Agreement, before making the calculations set forth in claus-
es (a) and (b) above and in this clause (c) for the purpose of
determining the aggregate amount of Eligible Accounts to be
included in the Borrowing Base Certificate, shall not exceed six
hundred thousand dollars ($600,000));
(d) eighty percent (80%) of Eligible Exchange Balances
(provided, however, that the aggregate amount of Eligible
Exchange Balances, before making the calculation set forth in
this clause (d) for the purpose of determining the aggregate
amount of Eligible Exchange Balances to be included in the
Borrowing Base Certificate, shall not exceed two million five
hundred thousand dollars ($2,500,000));
(e) sixty percent (60%) of Eligible Inventory
consisting of in-process petroleum products; and
(f) seventy percent (70%) of Eligible Inventory
consisting of crude oil and finished petroleum products (provid-
ed, however, that the aggregate amount of Eligible Inventory,
before making the calculations set forth in clause (e) above and
in this clause (f) for the purpose of determining the aggregate
amount of Eligible Inventory to be included in the Borrowing Base
Certificate, shall not exceed thirty-five million dollars
($35,000,000)).
"Borrowing Base Certificate" means a certificate of the
Borrower and attached schedules substantially in the form of
Exhibit C.
"Business Day" means a day of the year on which banks are
not required or authorized to close in Los Angeles and, if the
applicable Business Day relates to any LIBOR Loans, on which
dealings are carried on in the London interbank market.
"Capitalized Leases" has the meaning set forth in clause (e)
of the definition of Debt in this Section 1.1.
"Closing Date" means August 18, 1992.
"Collateral" means, collectively, (a) the "Collateral" as
defined in the Security Agreement, (b) the "Collateral" as
defined in the Account Pledge Agreement, (c) the "Collateral"
as defined in the Note Pledge Agreement and (d) the "Collateral"
as defined in the Stock Pledge Agreement.
"Commercial Finance Audit" means an audit of the Borrower's
books, records and accounting procedures conducted by the Agent.
"Commitment" has the meaning set forth in Section 2.1.
"Commitment Termination Date" means April 2, 1999; provided,
however, that, upon (a) written request by the Borrower not later
than April 30, 1998 and (b) notice of such extension by the Agent
to the Borrower not later than June 30, 1998, the Commitment
Termination Date may be extended by the Agent and the Banks, in
their sole and absolute discretion, for up to an additional year;
and further provided, however, that the Agent's failure to notify
the Borrower of any such extension by the applicable date
referred to above shall constitute a denial of such extension.
"Convert," "Conversion" and "Converted" each refer to a
conversion of Loans of one Type into Loans of another Type
pursuant to Section 2.8, 3.2 or 3.3.
"Credit Documents" means this Agreement, the Notes, the
Security Agreement, the Account Pledge Agreement, the Guaran-
ties, the Support and Clawback Agreement, the Note Pledge
Agreement, the Wainoco Demand Note, any "Term Notes" (as defined
in the Note Pledge Agreement) that are executed by Wainoco, the
Environmental Indemnity, the Stock Pledge Agreement, any Letter
of Credit Requests that are executed by the Borrower, the
Teletransmission Agreement, the Agent's Fee Letter and the
Letters of Credit.
"Debt" of any Person means, at any date without duplication:
(a) all obligations of such Person for borrowed money;
(b) all obligations of such Person evidenced by bonds,
debentures, notes or other similar instruments;
(c) all obligations of such Person to pay the deferred
purchase price of property or services (excluding normal trade
payables not overdue that are incurred in the ordinary course of
such Person's business);
(d) all indebtedness created or arising under any
conditional-sale or other title-retention agreement with respect
to property acquired by such Person (even though the rights and
remedies of the seller or lender under such agreement in the
event of default are limited to repossession or sale of such
property);
(e) all obligations of such Person as lessee under
leases that have been or should be, in accordance with generally
accepted accounting principles, recorded as capitalized leases;
(f) all obligations, contingent or otherwise of such
Person under acceptance, letter-of-credit or similar facilities;
(g) all obligations of such Person to purchase,
redeem, retire, defease or otherwise acquire for value any
capital stock of such Person or any warrants, rights or options
to acquire such capital stock, valued, in the case of redeemable
preferred stock, at the greater of its voluntary and involuntary
liquidation preference plus accrued and unpaid dividends;
(h) all executory obligations of such Person in
respect of interest-rate swap agreements and other similar
agreements designed to hedge against fluctuations in interest
rates;
(i) all Debt referred to in any of clauses (a) through
(h) above that is guaranteed directly or indirectly by such
Person, or in effect guaranteed directly or indirectly by such
Person through an agreement (i) to pay or purchase such Debt or
to advance or supply funds for the payment or purchase of such
Debt, (ii) to purchase, sell or lease (as lessee or lessor)
property, or to purchase or sell services, primarily for the
purpose of enabling the debtor to make payment of such Debt or to
assure the holder of such Debt against loss, (iii) to advance or
supply funds to maintain working capital or equity capital of
another Person or otherwise to maintain the net worth or solvency
of such Person (including any agreement in the nature of a
support arrangement to pay for property or services irrespective
of whether such property is received or such services are
rendered) or (iv) otherwise to assure a creditor against loss;
(j) all Debt referred to in any of clauses (a) through
(h) above secured by (or for which the holder of such Debt has an
existing right, contingent or otherwise, to be secured by) any
Lien on property (including accounts receivable and contract
rights) owned by such Person, even though such Person has not
assumed or become liable for the payment of such Debt; and
(k) any accumulated funding deficiency (as defined in
Section 412(a) of the Internal Revenue Code of 1986) for a Plan
of such Person.
"Default" means any event or condition that, with the giving
of notice or the lapse of time, or both, would become an Event of
Default.
"Default Rate" has the meaning set forth in Section 2.6(b).
"Eligible Accounts" means those Accounts of the Borrower
that (a) are within sixty (60) days of the date of the related
invoice, (b) are less than thirty (30) days past-due, (c) are
(together with the relevant "Related Contracts," as defined in
the Security Agreement) covered by a perfected first-priority
security interest in favor of the Agent and (d) comply with all
of the representations, warranties and covenants of the Borrower
in the Credit Documents; provided, however, that Eligible
Accounts shall not include the following:
(i) Accounts with respect to which the account debtor
is an officer, employee or agent of the Borrower;
(ii) Accounts with respect to which goods have been
placed on consignment, guaranteed sale or other terms by reason
of which the payment by the account debtor may be conditional;
(iii) Accounts with respect to which the account debtor
is not a Person resident in the United States;
(iv) Accounts with respect to which the account debtor
is the United States or any department, agency or instrumentality
of the United States (provided, however, that an Account shall
not be deemed ineligible by reason of this clause (iv) if the
Borrower has taken the necessary steps, to the satisfaction of
the Agent evidenced in writing, to perfect a first-priority
security interest in such Account in favor of the Agent in
compliance with the Assignment of Claims Act of 1940 (31 U.S.C.
Sec. 3727));
(v) Accounts with respect to which the account debtor
is any state of the United States or any county, city, town,
municipality or other division of such state (provided, however,
that an Account shall not be deemed ineligible by reason of this
clause (v) if the Borrower has taken the necessary steps, to the
satisfaction of the Agent evidenced in writing, to perfect a
first-priority security interest in such Account in favor of the
Agent in compliance with all applicable Governmental Rules);
(vi) Accounts with respect to which the account debtor
is a Person in control of, controlled by or under common control
with the Borrower;
(vii) Accounts with respect to the account debtor of
which the Borrower is or is to become liable (but only if such
liability does not relate to any such Account), but only to the
extent of such liability;
(viii) that portion of the aggregate Accounts owed to the
Borrower by any single account debtor that exceeds ten percent
(10%) (or, in the case of Citgo Petroleum Corporation, 15%,
provided that said percentage may be reduced by the Agent at any
time by written notice of the same to the Borrower) of the amount
of all of the Accounts of the Borrower, except as approved by the
Agent in writing from time to time;
(ix) Accounts not denominated in United States dollars;
(x) Accounts with respect to which an invoice has not
been sent within two (2) Business Days after the effective date
of any Borrowing Base Certificate in which such Accounts would
otherwise be included for purposes of calculation of the
Borrowing Base;
(xi) Accounts due from a particular account debtor if
any Account due from such account debtor does not comply with the
Borrower's representations and warranties in Section 4 of the
Security Agreement and if the Agent notifies the Borrower that
such Accounts are ineligible;
(xii) Accounts with respect to which the account debtor
disputes liability or makes any claim, in whole or in part, but
only (A) to the extent that the aggregate amount in dispute
and/or as to which claim is made for all such Accounts exceeds
$250,000, (B) to the extent that the aggregate amount of all such
Accounts exceeds $500,000 or (C) if the amount in dispute or
claimed cannot be quantified reasonably accurately;
(xiii) Accounts due from a particular account debtor if
any event of the types described in Section 7.1(e) occurs with
respect to such account debtor;
(xiv) Accounts due from a particular account debtor if
such account debtor suspends normal business operations; and
(xv) Accounts that are not satisfactory to the Agent,
in its sole discretion, using reasonable business judgment.
Notwithstanding clauses (vi) and (vii) above, if (1) the
obligations of an account debtor under an Account are supported
by a letter of credit in form and substance satisfactory
(including with respect to all documentary and other requirements
of such letter of credit) to the Majority Banks in their sole
discretion, issued by a bank satisfactory to the Majority Banks
in their sole discretion, (2) the proceeds of such letter of
credit have been assigned to the Agent as collateral for the
Obligations pursuant to documentation in form and substance
satisfactory to the Majority Banks in their sole discretion and
(3) such letter of credit has been delivered to the Agent, then
such Account shall not be excluded from Eligible Accounts
pursuant to such clause (vi) or (vii).
"Eligible Exchange Balances" means the amount equal to the
aggregate amount of all of the Borrower's Exchange Balances in
which the Agent has a perfected first-priority security interest,
after deducting (a) the amount equal to the sum of the values of
any and all obligations of the Borrower to deliver petroleum
products, to pay money or to give other value that the Borrower
owes or incurs whenever it trades, lends, borrows or exchanges
petroleum products in the ordinary course of business with
Persons other than the Affiliates, the value thereof being the
lesser of (i) the cost to the Borrower, as set forth in the books
and records of the Borrower (valued on a first-in, first-out
basis in accordance with generally accepted accounting princi-
ples), of like petroleum products for the previous month and
(ii) the fair market value as determined in accordance with the
methods prescribed in Schedule 3, (b) the amount of all dis-
counts, allowances, rebates, credits and adjustments to such
Exchange Balances, (c) the amount billed for or representing
retainage, if any, with respect to such Exchange Balances, until
all prerequisites to the immediate payment of retainage have been
satisfied, and (d) all such Exchange Balances owing by any
Affiliate; provided, however, that the Agent may, in its sole and
absolute discretion, exclude from Eligible Exchange Balances any
Exchange Balance with respect to which:
(i) any representation or warranty contained in this
Agreement or any other Credit Document is breached;
(ii) the customer or trading partner has disputed
liability, or made any claim to the Borrower with respect to such
Exchange Balance or with respect to any other Exchange Balance
due from such customer or trading partner, other than for a
minimal adjustment in the ordinary course of business and in
accordance with regular commercial practice; or
(iii) any event of the types described in Section 7.1(e)
occurs with respect to the customer or trading partner, or the
customer or trading partner suspends normal business operations.
"Eligible Inventory" means all of the Borrower's Inventory
that (a) is covered by a perfected first-priority security
interest in favor of the Agent (subject only to storage,
transportation and other nonconsensual Liens created by operation
of law or tariff in favor of carriers, transporters and ware-
housemen, securing only amounts due to such carriers, transport-
ers and warehousemen in respect of carriage, transportation and
storage services with respect to such Inventory, in each case
securing obligations not then in default), (b) complies with all
of the Borrower's representations, warranties and covenants in
the Credit Documents, (c) is not obsolete, unsalable, damaged or
otherwise unfit for sale or further processing in the ordinary
course of business, (d) is currently salable in compliance with
all applicable Governmental Rules and without the need for any
Governmental Action, (e) is held at locations set forth on
Schedule 1 to the Security Agreement, (f) is listed on Schedule 3
attached to the most recent Borrowing Base Certificate delivered
to the Banks and (g) is otherwise satisfactory to the Agent, in
its sole discretion, using reasonable business judgment, all such
Inventory to be valued, at any time of determination, at the
lower of (i) fair market value as determined in accordance with
the methods prescribed in Schedule 3 and (ii) cost, as set forth
in the books and records of the Borrower (valued on a first-in,
first-out basis, in accordance with generally accepted accounting
principles).
"Environmental Indemnity" means the Continuing Environmental
Indemnity dated as of August 18, 1992 executed by the Borrower
and each Affiliate in favor of the Agent.
"Eurocurrency Liabilities" has the meaning set forth in
Regulation D of the Board of Governors of the Federal Reserve
System.
"Event of Default" has the meaning set forth in Section 7.1.
"Exchange Balances" means the amount equal to the sum of
the values of any and all rights to receive petroleum products,
to receive payment of money or to receive other value that the
Borrower generates, acquires, possesses or owns whenever the
Borrower trades, lends, borrows or exchanges petroleum products
in the ordinary course of business with Persons other than the
Affiliates, the value thereof being the lesser of (a) the cost to
the Borrower, as set forth in the books and records of the
Borrower (valued on a first-in, first-out basis in accordance
with generally accepted accounting principles), of like petroleum
products for the previous month and (b) the fair market value as
determined in accordance with the methods prescribed in Sched-
ule 3.
"Federal Funds Rate" means, for any period, a fluctuating
interest rate per annum equal for each day during such period to
the weighted average of the rates on overnight federal funds
transactions with members of the Federal Reserve System arranged
by federal funds brokers, as published for such day (or, if such
day is not a Business Day, for the next preceding Business Day)
by the Federal Reserve Bank of New York or, if such rate is not
so published for any day that is a Business Day, the average of
the quotations for such day on such transactions received by the
Agent from three federal funds brokers of recognized standing
selected by it.
"FHI" means Frontier Holdings Inc., a Delaware corporation
that is wholly owned by Wainoco.
"FHI Guaranty" means the Guaranty dated as of August 18,
1992 executed by FHI in favor of the Banks and the Agent.
"FOC" means Frontier Oil Corporation, a Delaware corporation
that is wholly owned by FHI.
"FOC Guaranty" means the Amended and Restated Guaranty
executed by FOC in favor of the Banks and the Agent substantially
in the form of Exhibit A.
"FPLI" means Frontier Pipeline Inc., a Delaware corporation
that is wholly owned by FOC.
"FPLI Guaranty" means the Guaranty dated as of August 18,
1992 executed by FPLI in favor of the Banks and the Agent.
"FRI" means Frontier Refining Inc., a Delaware corporation
that is wholly owned by FOC.
"FRI Guaranty" means the Guaranty dated as of August 18,
1992 executed by FRI in favor of the Banks and the Agent.
"Governmental Action" means any authorization, approval,
consent, waiver, exception, license, filing, registration,
permit, notarization, special lease or other requirement of any
Governmental Person.
"Governmental Person" means, whether domestic or foreign,
any national, federal, state or local government, any political
subdivision thereof, or any governmental, quasi-governmental,
judicial, public or statutory instrumentality, authority, body or
entity, including any central bank and any comparable authority.
"Governmental Rule" means any treaty, law, rule, regulation,
ordinance, order, code, interpretation, judgment, writ, injunc-
tion, decree, determination, directive, guideline, policy or
similar form of decision of any Governmental Person.
"Guaranties" means the FHI Guaranty, the FOC Guaranty, the
FRI Guaranty and the FPLI Guaranty.
"Indenture" means the Indenture dated as of August 1, 1992
between Wainoco and Bank One, Texas, N.A., as Trustee.
"Interest Period" means, with respect to each LIBOR Loan
making up part of the same Borrowing, the period commencing on
the date of such Loan or the date of the Conversion of any Loan
into such a Loan and ending on the last day of the period
selected by the Borrower pursuant to the provisions below and,
thereafter, each subsequent period commencing on the last day of
the immediately preceding Interest Period and ending on the last
day of the period selected by the Borrower pursuant to the
provisions below. The duration of each Interest Period shall be
any number of days between 7 days and one (1) month, or two (2),
three (3) or six (6) whole months, as the Borrower may, upon
notice received by the Agent not later than 11:00 a.m., Los Ange-
les time, on the third Business Day before the first day of such
Interest Period, select; provided, however, that
(a) Interest Periods commencing on the same date for
Loans making up part of the same Borrowing shall be of the same
duration;
(b) whenever the last day of an Interest Period would
otherwise occur on a day other than a Business Day, the last day
of such Interest Period shall be extended to occur on the next
succeeding Business Day, unless such extension would cause the
last day of such Interest Period to occur in the next succeeding
calendar month, in which case the last day of such Interest
Period shall occur on the next preceding Business Day;
(c) no more than five (5) different Interest Periods
shall be outstanding at any one time; and
(d) no Interest Period shall end after the Commitment
Termination Date.
"Inventory" has the meaning set forth in Section 1(a) of the
Security Agreement.
"Inventory Audit" means an audit of the physical properties
and volumes, using standard practices and standard tank-gauging
wire-line devices or another method acceptable to the Agent, of
all or a portion, as determined by the Agent from time to time,
of the Borrower's Inventory, conducted by an independent
consulting firm selected by the Agent.
"Letter of Credit Amount" means the stated maximum amount
available to be drawn under a particular Letter of Credit, as
such amount may be reduced or reinstated from time to time in
accordance with the terms of such Letter of Credit.
"Letter of Credit Request" means a request by the Borrower
for the issuance of a Letter of Credit, on the Agent's standard
form of Application for Irrevocable Standby Letter of Credit, the
current form of which is attached hereto as Exhibit B, and
containing terms and conditions satisfactory to the Agent in its
sole discretion.
"Letter of Credit Usage" means, at any time of determina-
tion, the sum of:
(a) one hundred percent (100%) of the Letter of Credit
Amount of all outstanding Letters of Credit other than those
issued to support the purchase of Ratable Crude;
(b) with respect to the period from and including the
date of issuance of any outstanding Letter of Credit issued to
support the purchase of Ratable Crude by the Borrower to and
including the last day of the month preceding the month in which
such Ratable Crude is to be delivered, zero percent (0%) of the
Letter of Credit Amount of such Letter of Credit;
(c) with respect to the first through the tenth day,
inclusive, of the month of delivery of any Ratable Crude to the
Borrower, thirty-five percent (35%) of the Letter of Credit
Amount of any outstanding Letter of Credit issued to support the
purchase of such Ratable Crude by the Borrower;
(d) with respect to the eleventh through the twentieth
day, inclusive, of the month of delivery of any Ratable Crude to
the Borrower, seventy percent (70%) of the Letter of Credit
Amount of any outstanding Letter of Credit issued to support the
purchase of such Ratable Crude by the Borrower;
(e) with respect to the period from the twenty-first
day of the month of delivery of any Ratable Crude to the Borrower
through the day of payment for such Ratable Crude, inclusive, one
hundred percent (100%) of the Letter of Credit Amount of any
outstanding Letter of Credit issued to support the purchase of
such Ratable Crude by the Borrower; and
(f) with respect to the period from the day of payment
for any Ratable Crude through the date of expiration or
cancellation (as determined by the Agent) of any outstanding
Letter of Credit issued to support the purchase of such Ratable
Crude by the Borrower, inclusive, twenty percent (20%) of the
Letter of Credit Amount of such Letter of Credit.
Upon not less than three (3) days' prior written notice from the
Agent to the Borrower, the percentages set forth above may be
adjusted by the Agent from time to time at the Agent's discretion
if at any time any Commercial Finance Audit reveals that Ratable
Crude delivery patterns are materially different from those
determined pursuant to the most recent Commercial Finance Audit
performed from time to time.
"Letters of Credit" has the meaning set forth in Sec-
tion 2.1.
"LIBOR Loan" means, at any time, any Loan that bears
interest as provided in Section 2.6(a)(ii).
"LIBOR Rate" means, for any Interest Period for each LIBOR
Loan that is part of the same Borrowing, the rate per annum
obtained by dividing (a) the rate of interest per annum (rounded
upward, if necessary, to the nearest 1/100th of 1%) at which
U.S.-dollar deposits would be offered to Union Bank outside the
United States 2 Business Days before the first day of such
Interest Period for a term coinciding with such Interest Period
by (b) a percentage equal to 100% minus the LIBOR Reserve
Percentage for such Interest Period.
"LIBOR Reserve Percentage," means, for any Interest Period
for each LIBOR Loan that is part of the same Borrowing, the
reserve percentage applicable on any day not more than two
(2) Business Days before the first day of such Interest Period
under regulations issued from time to time by the Board of
Governors of the Federal Reserve System for determining the
maximum reserve requirement (including any emergency, supplemen-
tal or other marginal reserve requirement) for the Agent with
respect to liabilities or assets consisting of or including
Eurocurrency Liabilities (or with respect to any other category
of liabilities that includes deposits by reference to which the
interest rate on LIBOR Loans is determined) having a term equal
to such Interest Period.
"Lien" means, with respect to any asset, (a) any lien,
charge, option, claim, mortgage, security interest, pledge or
other encumbrance or any other type of preferential arrangement
of any kind in respect of such asset or (b) the interest of a
vendor or lessor under any conditional-sale agreement, capital
lease or other title-retention agreement relating to such asset.
"Loans" has the meaning set forth in Section 2.1.
"Lockbox Account" has the meaning set forth in Recital B of
the Account Pledge Agreement.
"Majority Banks" means, at any time, Banks (one of which
shall be the Agent) owed at least fifty-one percent (51%) of the
Obligations then outstanding or, if no Obligations are then
outstanding, Banks (one of which shall be the Agent) having at
least fifty-one percent (51%) of the Commitments.
"Material Contracts" means the Processing Agreement and the
Resid Processing Agreement.
"Non-Ratable Crude and Product" means crude oil (other than
Ratable Crude) and refined or partially refined crude-oil
products acquired by the Borrower.
"Notes" means (a) the Revolving Loan Note dated October 16,
1992 made by the Borrower in favor of Union Bank in the face
amount of $20,000,000, (b) the Revolving Loan Note dated October
16, 1992 made by the Borrower in favor of Banque Paribas in the
face amount of $15,000,000 and (c) the Revolving Loan Note dated
October 16, 1992 made by the Borrower in favor of Den norske Bank
ASA in the face amount of $15,000,000.
"Note Pledge Agreement" means the Note Pledge Agreement
dated as of August 18, 1992 executed by the Borrower in favor of
the Agent.
"Notice of Borrowing" has the meaning set forth in Sec-
tion 2.4(a).
"Obligations" means all payment obligations of the Borrower
to the Agent or the Banks outstanding from time to time under
this Agreement and the other Credit Documents, whether for
principal, reimbursement of drawings under Letters of Credit
(including contingent reimbursement obligations under outstanding
Letters of Credit), interest, fees, expenses, indemnification or
otherwise.
"Person" means an individual, a corporation, a partnership,
an association, a business trust or any other entity or organiza-
tion, including any Governmental Person.
"Processing Agreement" means the Processing Agreement dated
as of July 1, 1988 between the Borrower and FRI.
"Prospectus" means the Prospectus dated July 8, 1992
relating to the Wainoco Note Offering, as amended to include (a)
financial information for the fiscal quarter ended June 30, 1992
and (b) pricing information with respect to the notes being
offered.
"Ratable Crude" means crude oil (a) delivered to the
Borrower at the Refinery by common-carrier pipeline or by truck
or (b) delivered to the Borrower through common-carrier pipeline,
and sold by the Borrower, at Cushing, Oklahoma, in each case
referred to in clauses (a) and (b) above on a predetermined,
prorated basis over the course of a delivery month; provided,
however, that each delivery of crude oil as described in
clause (b) above shall be treated as Ratable Crude only if in
each instance the Agent has received evidence reasonably
satisfactory thereto that such crude oil will be delivered on a
ratable basis substantially similar to that for Ratable Crude
delivered to the Borrower at the Refinery.
"Reference Rate" means the variable rate of interest per
annum established by Union Bank from time to time as its "refer-
ence rate." Such "reference rate" is set by Union Bank as a
general reference rate of interest, taking into account such
factors as Union Bank may deem appropriate, it being understood
that many of Union Bank's commercial or other loans are priced in
relation to such rate, that it is not necessarily the lowest or
best rate actually charged to any customer and that Union Bank
may make various commercial or other loans at rates of interest
having no relationship to such rate. For purposes of this
Agreement, each change in the Reference Rate shall be effective
as of the opening of business on the date announced as the
effective date of any change in such "reference rate."
"Reference Rate Loan" means, at any time, any loan that
bears interest as provided in Section 2.6(a)(i).
"Refinery" means FRI's crude-oil refinery in Cheyenne,
Wyoming.
"Register" has the meaning set forth in Section 9.8(c).
"Resid Processing Agreement" means the Resid Processing
Agreement dated June 1, 1991 among Conoco Inc., the Borrower and
FRI.
"Security Agreement" means the Security Agreement dated as
of August 18, 1992 executed by the Borrower in favor of the
Agent.
"Stock Pledge Agreement" means the Stock Pledge Agreement
dated as of August 18, 1992 executed by FOC in favor of the
Agent.
"Subsidiary" of any Person means any corporation of which
more than fifty percent (50%) of the outstanding capital stock
having ordinary voting power to elect a majority of the Board of
Directors of such corporation (irrespective of whether at the
time capital stock of any other class or classes of such
corporation has or might have voting power upon the occurrence of
any contingency) is at the time directly or indirectly owned by
such Person, by such Person and one or more of its other
Subsidiaries, or by one or more of such Person's other Subsidiar-
ies.
"Super-Majority Banks" means, at any time, Banks (one of
which shall be the Agent) owed at least eighty-five percent (85%)
of the Obligations then outstanding or, if no Obligations are
then outstanding, Banks (one of which shall be the Agent) having
at least eighty-five (85%) of the Commitments.
"Support and Clawback Agreement" means the Support and
Clawback Agreement dated as of August 18, 1992 executed by
Wainoco in favor of the Agent.
"Teletransmission Agreement" means the Teletransmission
Agreement dated as of August 18, 1992 between the Borrower and
Union Bank.
"Type" refers to the distinction between LIBOR Loans and
Reference Rate Loans.
"Union Bank" means Union Bank of California, N.A. in its
individual capacity as a Bank.
"Wainoco" means Wainoco Oil Corporation, a Wyoming corpora-
tion.
"Wainoco Demand Note" means the Demand Promissory Note
executed by Wainoco in favor of the Borrower substantially in the
form of Exhibit A to the Note Pledge Agreement.
"Wainoco Note Offering" means the offering by Wainoco
pursuant to the Prospectus of one hundred million dollars
($100,000,000) principal amount of its Senior Notes Due 2002.
Section 1.2 Accounting Terms. Unless otherwise specified
herein, all accounting terms used herein shall be interpreted,
all accounting determinations hereunder shall be made and all
financial statements required to be delivered hereunder shall be
prepared in accordance with generally accepted accounting
principles as in effect from time to time, on a basis consistent
with the audited consolidated financial statements of FOC
referred to in Section 6(e) of the FOC Guaranty.
Section 1.3 Interpretation. In this Agreement the singular
includes the plural and the plural the singular; words importing
any gender include the other genders; references to statutes are
to be construed as including all statutory provisions consolidat-
ing, amending or replacing the statute referred to; references to
"writing" include printing, typing, lithography and other means
of reproducing words in a tangible visible form; the words
"including," "includes" and "include" are deemed to be followed
by the words "without limitation"; references to articles,
sections (or subdivisions of sections), recitals, exhibits,
annexes or schedules are to those of this Agreement unless
otherwise indicated; references to agreements and other contrac-
tual instruments are deemed to include all subsequent amendments
and other modifications to such instruments, but only to the
extent such amendments and other modifications are not prohibited
by the terms of this Agreement; and references to Persons include
their respective permitted successors and assigns.
ARTICLE 2.
COMMITMENTS
Section 2.1 Commitments.
(a) Each Bank agrees severally, on the terms and
conditions contained in this Agreement, to extend credit to the
Borrower from time to time from the Closing Date to the Commit-
ment Termination Date by making loans to the Borrower (the
"Loans") pursuant to Section 2.4 and participating in letters of
credit issued for the account of the Borrower (the "Letters of
Credit") pursuant to Section 2.9, in an aggregate amount not to
exceed at any time outstanding the amount set forth opposite such
Bank's name on the signature pages hereof or, if such Bank has
entered into one or more Assignments and Acceptances, set forth
for such Bank in the Register maintained by the Agent pursuant to
Section 9.8(c); provided, however, that the sum of (i) the
aggregate principal amount of all Loans outstanding, (ii) the
aggregate Letter of Credit Amount of all Letters of Credit
outstanding and (iii) the aggregate amount of unreimbursed
drawings under all Letters of Credit shall not exceed fifty
million dollars ($50,000,000) at any time; provided further,
however, that the sum of (i) the aggregate principal amount of
all Loans outstanding, (ii) the Letter of Credit Usage and
(iii) the aggregate amount of unreimbursed drawings under all
Letters of Credit shall not exceed the Borrowing Base at any
time; and provided further, however, that the aggregate principal
amount of all Loans outstanding at any time shall not exceed
$20,000,000 (said agreement by each Bank, subject to the
foregoing provisos, herein called such Bank's "Commitment").
Within the limits of each Bank's Commitment, the Borrower may
borrow under Section 2.4, have Letters of Credit issued for the
Borrower's account under Section 2.9, prepay Loans under
Section 2.7(a), reborrow under Section 2.4, and have additional
Letters of Credit issued for the Borrower's account under
Section 2.9 after the expiration of previously issued Letters of
Credit.
(b) Reduction of Commitments. The Borrower shall have
the right, upon at least seven (7) Business Days' notice to the
Agent, to terminate in whole or reduce ratably in part the unused
portions of the respective Commitments of the Banks; provided,
however, that each partial reduction shall be in the aggregate
amount of five million dollars ($5,000,000) or an integral
multiple thereof.
Section 2.2 Fees.
(a) The Borrower shall pay to the Agent for the
account of the Banks, from June 30, 1997 to the Commitment
Termination Date, a commitment fee at the rate of .375% per annum
on the average daily amount by which fifty million dollars
($50,000,000) exceeds the sum of (i) the aggregate face amount of
all Letters of Credit outstanding plus (ii) the aggregate amount
of all Loans outstanding. Such commitment fee shall be payable
quarterly in arrears on the last Business Day of each March,
June, September and December, commencing on September 30, 1997,
and on the Commitment Termination Date.
(b) The Borrower shall pay to the Agent for its own
account such fees as provided in the Agent's Fee Letter.
Section 2.3 Mandatory Prepayment of Loans and Pledge of
Cash Collateral. If at any time (a) the sum of (i) the aggregate
principal amount of all Loans outstanding, (ii) the aggregate
Letter of Credit Amount of all Letters of Credit outstanding and
(iii) the aggregate amount of unreimbursed drawings under all
Letters of Credit exceeds (b) the aggregate Commitments, or if at
any time (y) the sum of (i) the aggregate principal amount of all
Loans outstanding, (ii) the Letter of Credit Usage and (iii) the
aggregate amount of unreimbursed drawings under all Letters of
Credit exceeds (z) the Borrowing Base, then, in either case, the
Borrower shall immediately, without notice or request by the
Agent or the Banks, prepay the Loans (together with accrued
interest to the date of prepayment on the principal amount
prepaid) and/or pledge additional cash collateral to the Agent to
secure reimbursement of amounts available to be drawn under
outstanding Letters of Credit, in an aggregate amount equal to
such excess.
A. LOANS
Section 2.4 Making Loans.
(a) Each Borrowing shall be made on notice, given
(i) with respect to any Borrowing consisting of Reference Rate
Loans, not later than 1:30 p.m., Los Angeles time, on the
Business Day before the date of the proposed Borrowing and
(ii) with respect to any Borrowing consisting of LIBOR Loans, not
later than 11:00 a.m., Los Angeles time, on the third Business
Day before the date of the proposed Borrowing, each such notice
to be given by the Borrower to the Agent, which shall give each
Bank prompt notice thereof by telecopier. Each such notice of a
Borrowing (a "Notice of Borrowing") shall be in writing, or by
telephone confirmed promptly in writing, by an Authorized
Officer, specifying (i) the requested date of such Borrowing
(which shall be a Business Day), (ii) the requested Type of Loans
making up such Borrowing, (iii) the requested aggregate amount of
such Borrowing, (iv) in the case of a Borrowing consisting of
LIBOR Loans, the requested initial Interest Period for such LIBOR
Loans and (v) the fact that the statements set forth in Sec-
tion 4.2(b) are true as of the date of such Borrowing. Each Bank
shall, before 11:00 a.m., Los Angeles time, on the date of such
Borrowing, make available to the Agent at its address referred to
in Section 9.2, in immediately available funds, such Bank's
ratable portion of such Borrowing. After the Agent's receipt of
such funds and upon fulfillment of the applicable conditions set
forth in Article 4, the Agent will make such funds available to
the Borrower by crediting the Borrower's concentration account
number 0880412175 at the Agent's aforesaid address. Notwith-
standing the provisions of the first sentence of this Section
2.4(a), if the Borrower gives the Agent notice of a Borrowing
consisting of Reference Rate Loans not later than 8:30 a.m., Los
Angeles time, on the day of the proposed Borrowing, the Agent and
the Banks will use their best efforts (but shall not be obligat-
ed) to make such Reference Rate Loans available on the day on
which such notice is given; provided, however, that the Agent and
the Banks shall no longer be required to use their best efforts
as described in this sentence if the Agent, at its sole option
exercisable at any time, gives the Borrower notice of the same.
(b) Each Notice of Borrowing shall be irrevocable and
binding on the Borrower. The Borrower shall indemnify each Bank
against any loss, cost or expense incurred by such Bank as a
result of any failure to fulfill, on or before the date specified
for such Borrowing in the related Notice of Borrowing, the
applicable conditions set forth in Article 4, including any loss
(including loss of anticipated profits), cost or expense incurred
by reason of the liquidation or reemployment of deposits or other
funds acquired by such Bank to fund the Loan to be made by such
Bank as part of such Borrowing when such Loan, as a result of
such failure, is not made on such date.
(c) Unless the Agent receives notice from a Bank
before the date of any Borrowing that such Bank will not make
available to the Agent such Bank's ratable portion of such
Borrowing, the Agent may assume that such Bank has made such
portion available to the Agent on the date of such Borrowing in
accordance with Section 2.4(a), and the Agent may, in reliance
upon such assumption, make available to the Borrower on such date
a corresponding amount. If and to the extent that such Bank has
not made such ratable portion available to the Agent, such Bank
and the Borrower severally agree to repay to the Agent forthwith
on demand such corresponding amount, together with interest
thereon, for each day from the date such amount is made available
to the Borrower until the date such amount is repaid to the
Agent, at (i) in the case of the Borrower, the interest rate
applicable at the time to the Loans making up such Borrowing and
(ii) in the case of such Bank, the Federal Funds Rate. If such
Bank repays to the Agent such corresponding amount, such amount
so repaid shall constitute such Bank's Loan as part of such
Borrowing for purposes of this Agreement.
(d) The failure of any Bank to make the Loan to be
made by it as part of any Borrowing shall not relieve any other
Bank of its obligation, if any, hereunder to make its Loan on the
date of such Borrowing, but no Bank shall be responsible for the
failure of any other Bank to make the Loan to be made by such
other Bank on the date of any Borrowing.
Section 2.5 Repayment. The Borrower shall repay to the
Agent for the account of the Banks the outstanding principal
amount of the Loans on the Commitment Termination Date.
Section 2.6 Interest.
(a) The Borrower shall pay interest on the unpaid
principal amount of each Loan made by each Bank, from the date of
such Loan until such principal amount has been paid in full,
(i) during such periods as such Loan is a Reference Rate Loan, at
a rate per annum equal at all times to the sum of the Reference
Rate in effect from time to time plus 0.5% per annum, payable
monthly in arrears on the last Business Day of each calendar
month during such periods and on the Commitment Termination Date,
and (ii) during such periods as such Loan is a LIBOR Loan, at a
rate per annum equal at all times during each Interest Period for
such Loan to the sum of the LIBOR Rate for such Interest Period
for such Loan plus 1.75% per annum, payable on the last day of
such Interest Period or, if such Interest Period is longer than
90 days, on the day that is 90 days after the first day of such
Interest Period and on the last day of such Interest Period.
(b) Any amount of principal of any Loan that is not
paid when due (whether at stated maturity, by required prepay-
ment, by acceleration or otherwise) shall bear interest, from the
date on which such amount is due until such amount is paid in
full, payable on demand, at a rate per annum (the "Default Rate")
equal at all times to the sum of the interest rate applicable to
such Loan at the time it became due plus 3.00% per annum.
(c) The Agent shall give prompt notice to the Borrower
and the Banks of each applicable interest rate determined by the
Agent for purposes of Section 2.6(a).
(d) If the Borrower fails to select the duration of
any Interest Period for any LIBOR Loans in accordance with the
provisions contained in the definition of "Interest Period" in
Section 1.1, the Agent will forthwith so notify the Borrower and
the Banks, and such Loans will automatically, on the last day of
the then existing Interest Period therefor, Convert into
Reference Rate Loans.
Section 2.7 Prepayments.
(a) The Borrower may on any Business Day, in the case
of Reference Rate Loans upon prior written notice not later than
9:00 a.m., Los Angeles time, on the day of any prepayment of such
Loans, and in the case of LIBOR Loans upon at least three
(3) Business Days' prior written notice, to the Agent stating the
proposed date and aggregate principal amount of the prepayment,
and if such notice is given the Borrower shall, prepay the
outstanding principal amounts of the Loans making up a Borrowing
in whole or ratably in part, together, in the case of LIBOR
Loans, with accrued interest to the date of such prepayment on
the principal amount prepaid; provided, however, that any
prepayment of LIBOR Loans shall be made on, and only on, the last
day of an Interest Period for such Loans; and provided further,
however, that each partial prepayment shall be in the aggregate
principal amount of one hundred thousand dollars ($100,000) or an
integral multiple thereof.
(b) If at any time the aggregate principal amount of
all Loans outstanding exceeds $20,000,000, then the Borrower
shall immediately, without notice or request by the Banks, prepay
the outstanding principal amounts of the Loans making up one or
more Borrowings in whole or ratably in part in the aggregate
amount equal to such excess, together with accrued interest to
the date of such prepayment on the principal amount prepaid.
Section 2.8 Voluntary Conversion of Loans. The Borrower
may on any Business Day, upon prior written notice (signed by an
Authorized Officer) given to the Agent (a) with respect to any
Conversion to Reference Rate Loans, not later than 11:00 a.m.,
Los Angeles time, on the second Business Day before the date of
the proposed Conversion and (b) with respect to any Conversion to
LIBOR Loans, not later than 11:00 a.m., Los Angeles time, on the
third Business Day before the date of the proposed Conversion,
subject to the provisions of Sections 3.2 and 3.3, Convert all
the Loans of one Type making up the same Borrowing into Loans of
the other Type; provided, however, that any Conversion of LIBOR
Loans into Reference Rate Loans shall be made on, and only on,
the last day of an Interest Period. Each such notice of a
Conversion shall, within the restrictions specified above,
specify (i) the date of such Conversion, (ii) the Loans to be
Converted and (iii) if such Conversion is into LIBOR Loans, the
duration of the Interest Period for such Loans. Each such notice
of a Conversion shall be irrevocable and binding on the Borrower.
The Agent shall give each Bank prompt notice by telecopier of
each such notice of a Conversion.
B. LETTERS OF CREDIT
Section 2.9 Issuance of Letters of Credit.
(a) The Borrower shall be entitled to request the
issuance of Letters of Credit by giving the Agent a Letter of
Credit Request at least one (1) Business Day before the requested
date of issuance of such Letter of Credit (which shall be a
Business Day). Any Letter of Credit Request received by the
Agent later than 3:00 p.m., Los Angeles time, shall be deemed to
have been received on the next Business Day. Each Letter of
Credit Request shall be made by telecopier (subject to the terms
and conditions of the Teletransmission Agreement), shall be
signed by an Authorized Officer, shall be irrevocable and shall
be effective upon receipt by the Agent. Provided that a valid
Letter of Credit Request has been received by the Agent and upon
fulfillment of the other applicable conditions set forth in
Article 4, the Agent will issue the requested Letter of Credit
from its office specified in Section 9.2. If a Letter of Credit
Request is received by the Agent after 3:00 p.m., Los Angeles
time, on the Business Day before the requested date of issuance
of the related Letter of Credit, then the Agent shall use its
best efforts, but shall not be obligated, to issue such Letter of
Credit on the requested date of issuance, upon fulfillment of the
applicable conditions set forth in Article 4. No Letter of
Credit shall have an expiration date later than sixty (60) days
after the Commitment Termination Date.
(b) Immediately upon the issuance of each Letter of
Credit, the Agent shall be deemed to have sold and transferred to
each Bank, and each Bank shall be deemed to have purchased and
received from the Agent, in each case irrevocably and without any
further action by any party, an undivided interest and participa-
tion in such Letter of Credit, each drawing thereunder and the
obligations of the Borrower under this Agreement in respect
thereof in an amount equal to the product of (i) a fraction the
numerator of which is the amount of the Commitment of such Bank
and the denominator of which is the aggregate amount of all of
the Commitments and (ii) the maximum amount available to be drawn
under such Letter of Credit (assuming compliance with all
conditions to drawing). The Agent shall promptly advise each
Bank of the issuance of each Letter of Credit, the Letter of
Credit Amount of such Letter of Credit, any change in the face
amount or expiration date of such Letter of Credit, the
cancellation or other termination of such Letter of Credit and
any drawing under such Letter of Credit.
Section 2.10 Drawing and Reimbursement. The payment by the
Agent of a draft drawn under any Letter of Credit shall consti-
tute for all purposes of this Agreement the making by Union Bank
of a Reference Rate Loan in the amount of such payment (without
any requirement of compliance with the conditions set forth in
Article 4 or with the limitations contained in Section 2.1(a),
but subject to Sections 2.3 and 2.7(b)). In the event that any
such Loan by Union Bank resulting from a drawing under any Letter
of Credit is not repaid by the Borrower by 11:00 a.m., Los
Angeles time, on the day of such drawing, Union Bank shall
promptly notify the Agent, and the Agent shall promptly notify
each other Bank. Each such Bank shall, on the day of such
notification, make a Reference Rate Loan, which shall be used to
repay the applicable portion of Union Bank's Reference Rate Loan
with respect to such Letter of Credit drawing, in an amount equal
to the amount of such Bank's participation in such drawing for
application to repay Union Bank (without any requirement of
compliance with the conditions set forth in Article 4 or with the
limitations contained in Section 2.1(a), but subject to Sections
2.3 and 2.7(b)) and shall deliver to the Agent for Union Bank's
account, on the day of such notification and in immediately
available funds, the amount of such Reference Rate Loan. In the
event that any Bank fails to make available to the Agent for the
account of Union Bank the amount of such Reference Rate Loan,
Union Bank shall be entitled to recover such amount on demand
from such Bank together with interest thereon at the Federal
Funds Rate.
Section 2.11 Obligations Absolute. The obligations of the
Borrower under this Agreement, any Letter of Credit, any Letter
of Credit Request and any other agreement or instrument relating
to any Letter of Credit shall be absolute, unconditional and
irrevocable and shall be paid strictly in accordance with the
terms of the aforementioned documents under all circumstances,
including the following:
(a) any lack of validity or enforceability of any
Letter of Credit, this Agreement or any other Credit Document;
(b) the existence of any claim, setoff, defense or
other right that the Borrower may have at any time against any
beneficiary or transferee of any Letter of Credit (or any Person
for whom any such beneficiary or transferee may be acting), the
Agent, any Bank (other than the defense of payment in accordance
with the terms of this Agreement) or any other Person, whether in
connection with this Agreement, any other Credit Document, the
transactions contemplated hereby or thereby or any unrelated
transaction;
(c) any statement or other document presented under
any Letter of Credit proving to be forged, fraudulent, invalid or
insufficient in any respect, or any statement therein being
untrue or inaccurate in any respect whatsoever;
(d) payment by the Agent under any Letter of Credit
against presentation of a draft or certificate that does not
comply with the terms of such Letter of Credit;
(e) any exchange, release or nonperfection of any
Collateral or other collateral, or any release, amendment or
waiver of or consent to departure from any Guaranty, other Credit
Document or other guaranty, for any of the Obligations of the
Borrower in respect of the Letters of Credit; and
(f) any other circumstance or happening whatsoever,
whether or not similar to any of the foregoing.
Section 2.12 Letter of Credit Fees and Charges.
(a) The Borrower shall pay to the Agent for the
account of the Banks, from June 30, 1997 to the Commitment
Termination Date, a letter of credit fee at the rate of 1.25% per
annum on the aggregate of the average daily Letter of Credit
Amounts of all Letters of Credit outstanding from time to time.
Such letter of credit fee shall be payable monthly in arrears on
the first Business Day of each calendar month, commencing on July
1, 1997, to the extent accrued during the immediately preceding
calendar month.
(b) The Borrower shall pay to the Agent for its own
account such additional fees and charges (including cable
charges) as are generally associated with letters of credit, in
accordance with the Agent's standard internal charge guidelines.
Section 2.13 Limits of Liability of Agent and Banks.
(a) The Borrower agrees to the provisions in the
Letter of Credit Request form; provided, however, that the terms
of this Agreement shall take precedence if there is any inconsis-
tency between the terms of this Agreement and the terms of said
form.
(b) The Borrower assumes all risks of the acts or
omissions of any beneficiary or transferee of any Letter of
Credit with respect to its use of such Letter of Credit. Neither
the Agent nor any Bank nor any of their respective officers or
directors shall be liable or responsible for (i) the use that may
be made of any Letter of Credit or any acts or omissions of any
beneficiary or transferee in connection therewith; (ii) the
validity, sufficiency or genuineness of documents, or of any
endorsement thereof, even if such documents should prove to be in
any or all respects invalid, insufficient, fraudulent or forged;
(iii) payment by the Agent against presentation of documents that
do not comply with the terms of any Letter of Credit, including
failure of any documents to bear any reference or adequate
reference to any Letter of Credit; or (iv) any other circumstance
whatsoever in making or failing to make payment under any Letter
of Credit; provided, however, that the Borrower shall have a
claim against the Agent, and the Agent shall be liable to the
Borrower, to the extent of any direct, but not consequential,
damages suffered by the Borrower that the Borrower proves were
caused by (A) the Agent's willful misconduct or gross negligence
in determining whether documents presented under any Letter of
Credit comply with the terms of such Letter of Credit or (B) the
Agent's willful failure to make lawful payment under any Letter
of Credit after the presentation to the Agent by the beneficiary
or transferee of such Letter of Credit of a draft and certifi-
xxxxx strictly complying with the terms and conditions of such
Letter of Credit. In furtherance and not in limitation of the
foregoing, the Agent may accept any document that appears on its
face to be in order, without responsibility for further investi-
gation, regardless of any notice or information to the contrary.
C. PAYMENT PROVISIONS
Section 2.14 Payments.
(a) The Borrower shall make each payment hereunder and
under the Notes not later than 11:00 a.m., Los Angeles time, on
the day when due in U.S. dollars to the Agent at its address set
forth in Section 9.2, in immediately available funds. The Agent
will promptly thereafter cause to be distributed like funds
relating to the payment of principal, interest or fees ratably
(other than amounts payable pursuant to Section 2.2(b) or
Article 3) to the Banks and like funds relating to the payment of
any other amount payable to any Bank to such Bank, in each case
to be applied in accordance with the terms of this Agreement.
(b) The Borrower hereby authorizes each Bank, if and
to the extent that any payment owed to such Bank is not made when
due hereunder or under any other Credit Document, to charge from
time to time against any or all of the Borrower's accounts with
such Bank any amount so due.
(c) Unless the Agent receives notice from the Borrower
before the date on which any payment is due to the Banks
hereunder that the Borrower will not make such payment in full,
the Agent may assume that the Borrower has made such payment in
full to the Agent on such date, and the Agent may, in reliance
upon such assumption, cause to be distributed to any Bank on such
due date an amount equal to the amount then due to such Bank. If
and to the extent that the Borrower has not so made such payment
in full to the Agent, each Bank shall repay to the Agent
forthwith on demand such amount distributed to such Bank,
together with interest thereon, for each day from the date such
amount is distributed to such Bank until the date on which such
Bank repays such amount to the Agent, at the Federal Funds Rate.
Section 2.15 Computation of Interest and Fees. All
computations of interest and fees hereunder shall be made on the
basis of a year of three hundred sixty (360) days for the actual
number of days (including the first day but excluding the last
day) occurring in the period for which such interest or fees are
payable. Each determination by the Agent of an interest rate
hereunder shall be conclusive and binding for all purposes,
absent manifest error.
Section 2.16 Payments on Non-Business Days. Whenever any
payment hereunder or under any other Credit Document is stated to
be due on a day other than a Business Day, such payment shall be
made on the next succeeding Business Day, and such extension of
time shall in such case be included in the computation of payment
of interest or fee, as the case may be; provided, however, that,
if such extension would cause payment of interest on or principal
of LIBOR Loans to be made in the next succeeding calendar month,
such payment shall be made on the next preceding Business Day.
Section 2.17 Sharing of Payments, Etc. If any Bank obtains
any payment (whether voluntary, involuntary, through the exercise
of any right of setoff, or otherwise) on account of the Loans
made by it or the Letters of Credit participated in by it (other
than pursuant to Section 2.2(b) or Article 3) in excess of its
ratable share of payments on account of the Loans and Letters of
Credit obtained by all of the Banks, then such Bank shall
forthwith purchase from the other Banks such participations in
the Loans made by them and the Letters of Credit participated in
by them as necessary to cause such purchasing Bank to share the
excess payment ratably with each of them; provided, however,
that, if all or any portion of such excess payment is thereafter
recovered from such purchasing Bank, such purchase from any Bank
shall be rescinded, and such Bank shall repay to the purchasing
Bank the purchase price to the extent of such recovery together
with an amount equal to such Bank's ratable share (according to
the proportion of (a) the amount of such Bank's required
repayment to (b) the total amount so recovered from the purchas-
ing Bank) of any interest or other amount paid or payable by the
purchasing Bank in respect of the total amount so recovered. The
Borrower agrees that any Bank so purchasing a participation from
another Bank pursuant to this section may, to the fullest extent
permitted by law, exercise all of its rights of payment (includ-
ing the right of setoff) with respect to such participation as
fully as if such Bank were the direct creditor of the Borrower in
the amount of such participation.
Section 2.18 Evidence of Debt.
(a) The indebtedness of the Borrower resulting from
all Loans made by each Bank from time to time shall be evidenced
by the Notes.
(b) The books and accounts of the Agent shall be
conclusive evidence, absent manifest error, of all Letter of
Credit Amounts and of the amounts of all Loans, drawings under
Letters of Credit, reimbursements under Letters of Credit, fees,
interest and other charges advanced, due, outstanding or paid
pursuant to this Agreement or any other Credit Document.
ARTICLE 3.
YIELD PROTECTION
Section 3.1 Increased LIBOR Loan Costs. If, due to either
(a) the introduction of or any change (other than any change by
way of imposition or increase of reserve requirements, in the
case of LIBOR Loans, included in the LIBOR Reserve Percentage) in
or in the interpretation of any Governmental Rule or (b) compli-
ance with any Governmental Rule (whether or not having the force
of law), there is an increase in the cost to any Bank of agreeing
to make, making, funding or maintaining any LIBOR Loans, then the
Borrower shall from time to time, upon demand by such Bank (with
a copy of such demand to the Agent), pay to the Agent for the
account of such Bank additional amounts sufficient to compensate
such Bank for such increased cost. A certificate as to the
amount of such increased cost, submitted to the Borrower and the
Agent by such Bank, shall be conclusive and binding for all
purposes, absent manifest error.
Section 3.2 Illegality. Notwithstanding any other
provision of this Agreement, if the introduction of or any change
in or in the interpretation of any Governmental Rule makes it
unlawful, or any Governmental Person asserts that it is unlawful,
for any Bank to perform its obligations hereunder to make LIBOR
Loans or to continue to fund or maintain LIBOR Loans hereunder,
then, on notice thereof and demand therefor by such Bank to the
Borrower through the Agent, (a) the obligation of such Bank to
make LIBOR Loans and to Convert Loans into LIBOR Loans shall be
suspended until the Agent notifies the Borrower that such Bank
has determined that the circumstances causing such suspension no
longer exist, and (b) the Borrower shall forthwith prepay in full
all LIBOR Loans of such Bank then outstanding, together with
interest accrued thereon, unless the Borrower, within five
(5) Business Days of such notice and demand, Converts all LIBOR
Loans of all Banks then outstanding into Reference Rate Loans in
accordance with Section 2.8.
Section 3.3 Inadequacy of LIBOR. If, with respect to any
LIBOR Loan, the Majority Banks notify the Agent that the interest
rate determined pursuant to Section 2.6(a)(ii) for any Interest
Period for such Loan will not adequately reflect the cost to the
Majority Banks of making, funding or maintaining their respective
LIBOR Loans for such Interest Period, then the Agent shall
forthwith so notify the Borrower and the Banks, whereupon (a) all
LIBOR Loans will automatically, on the last day of the then
existing respective Interest Periods therefor, Convert into
Reference Rate Loans, and (b) the obligations of the Banks to
make, or to Convert Loans into, LIBOR Loans shall be suspended
until the Agent notifies the Borrower and the Banks that the
circumstances causing such suspension no longer exist.
Section 3.4 Increased Letter of Credit Costs. If, after
the date hereof, any change in any Governmental Rule or in the
interpretation thereof by any Governmental Person charged with
the administration thereof either (a) imposes, modifies or deems
applicable any reserve, special-deposit or similar requirement
against letters of credit or guaranties issued by or participated
in, or assets held by, or deposits in or for the account of, the
Agent or any Bank or (b) imposes on the Agent or any Bank any
other condition regarding this Agreement, the Agent, such Bank or
any Letter of Credit, and the result of any event referred to in
the preceding clause (a) or (b) is to increase the cost to the
Agent of issuing or maintaining any Letter of Credit or to any
Bank of purchasing or maintaining any participation therein,
then, upon demand by the Agent or by such Bank through the Agent,
the Borrower shall pay to the Agent or to such Bank through the
Agent, from time to time as specified by the Agent or by such
Bank through the Agent, additional amounts sufficient to
compensate the Agent or such Bank for such increased cost. A
certificate as to the amount of such increased cost, submitted to
the Borrower by the Agent or such Bank, shall be conclusive and
binding for all purposes, absent manifest error.
Section 3.5 Capital Adequacy. If any Bank determines that
compliance with any Governmental Rule (whether or not having the
force of law) affects or would affect the amount of capital
required or expected to be maintained by such Bank or any
corporation controlling such Bank and that the amount of such
capital is increased by or based upon the existence of such
Bank's commitment to lend hereunder and other commitments of this
type or the commitment to issue or participate in, or the
issuance of or participation in, the Letters of Credit (or
similar contingent obligations), then, upon demand by such Bank
(with a copy of such demand to the Agent), the Borrower shall pay
to the Agent for the account of such Bank, from time to time as
specified by such Bank, additional amounts sufficient to
compensate such Bank in the light of such circumstances, to the
extent that such Bank reasonably determines such increase in
capital to be allocable to the existence of such Bank's commit-
ment to lend hereunder or commitment to issue or participate in,
or the issuance of or participation in, Letters of Credit. A
certificate as to such amounts submitted to the Borrower by such
Bank shall be conclusive and binding for all purposes, absent
manifest error.
Section 3.6 Funding Losses. If any payment of principal
of, or Conversion of, any LIBOR Loan is made other than on the
last day of an Interest Period relating to such Loan, as a result
of a payment or Conversion pursuant to Section 3.2 or accelera-
tion of the maturity of the Obligations pursuant to Section 7.1
or for any other reason, the Borrower shall, upon demand by any
Bank (with a copy of such demand to the Agent), pay to the Agent
for the account of such Bank any amounts required to compensate
such Bank for any additional losses, costs or expenses that it
may reasonably incur as a result of such payment or Conversion,
including any loss (including loss of anticipated profits), cost
or expense incurred by reason of the liquidation or reemployment
of deposits or other funds acquired by such Bank to fund or
maintain such Loan.
Section 3.7 Substitution of Bank. If (a) any Bank demands
payment from the Borrower in any material amount pursuant to
Section 3.1, 3.4 or 3.5 or (b) any Bank gives notice of illegali-
ty pursuant to Section 3.2, and in either case the event or
circumstances causing such Bank to make such demand or give such
notice is not applicable to the Majority Banks, then the Borrower
shall have the right, with the assistance of the Agent, to seek
a mutually satisfactory bank or banks (which may be one or more
of the Banks) to substitute for such Bank by purchasing the
Obligations and assuming the Commitment of such Bank; provided,
however, that in any event the Borrower shall be obligated to
compensate such Bank pursuant to Section 3.1, 3.4 or 3.5 or to
prepay such Bank's LIBOR Loans pursuant to Section 3.2, as
applicable.
ARTICLE 4.
CONDITIONS OF LENDING
Section 4.1 Initial Loan or Letter of Credit. The
obligation of each Bank to make a Loan on the occasion of the
initial Borrowing hereunder, and the obligation of the Agent to
issue, and of each Bank to participate in, the first Letter of
Credit issued hereunder, is subject to the following conditions
precedent:
(a) the Agent shall have received the following, each
dated the date hereof unless otherwise specified below, in form
and substance satisfactory to the Agent and in the number of
originals required by the Agent:
(i) copies of the resolutions of the Board of
Directors of the Borrower and FOC approving this Agreement and
the FOC Guaranty, respectively, and of all documents evidencing
other necessary corporate action and Governmental Action, if any,
with respect to such Credit Documents, certified by the Secretary
or an Assistant Secretary of the Borrower or FOC, as the case may
be, to be correct and complete and in full force and effect as of
the date of execution of each such document and as of the date
hereof;
(ii) a certificate of the Secretary or an
Assistant Secretary of each of the Borrower and FOC as to the
incumbency, and setting forth a specimen signature, of each of
the persons (A) who has signed or will sign this Agreement or the
FOC Guaranty, as the case may be, and (B) who will, until
replaced by other persons duly authorized for that purpose, act
as the representatives of the Borrower or such Affiliate, as the
case may be, for the purpose of signing documents in connection
with this Agreement and the transactions contemplated hereby;
(iii) a copy of the charter document, and each
amendment thereto, of each of the Borrower and FOC certified (as
of a date reasonably near the date hereof) by the Secretary of
State of the state of incorporation of the Borrower or FOC, as
the case may be;
(iv) a certificate of each of the Borrower and
FOC, signed on behalf of the Borrower or FOC, as the case may be,
by its President or a Vice President and its Secretary or any
Assistant Secretary, certifying as to (A) the absence of any
amendments to the charter of the Borrower or such Affiliate, as
the case may be, since the date of the Secretary of State's
certificate referred to in Section 4.1(a)(iii), (B) a true and
correct copy of the bylaws of the Borrower or such Affiliate, as
the case may be, as in effect on the date hereof, (C) the due
incorporation and good standing of the Borrower and such
Affiliate as a corporation organized under the laws of its state
of incorporation, and the absence of any proceeding for the
dissolution or liquidation of the Borrower or such Affiliate, as
the case may be, (D) the truthfulness in all material respects of
the representations and warranties contained in the Credit
Documents as though made on and as of the date hereof and (E) the
absence of any event occurring and continuing, or resulting from
the effectiveness of the Credit Documents, that constitutes a
Default or an Event of Default;
(v) a copy of one or more certificates of the
Secretary of State of the state of incorporation of the Borrower
and FOC, dated reasonably near the date hereof, listing the
charter document and all amendments thereto of the Borrower or
FOC, as the case may be, on file in its office and certifying
that (A) such amendments are the only amendments to the Borrow-
er's or FOC's charter document on file in its office, (B) the
Borrower or FOC has paid all franchise taxes to the date of such
certificate and (C) the Borrower or FOC is duly incorporated and
in good standing under the laws of such state;
(vi) duly executed copies of this Agreement, the
FOC Guaranty, amendments to the other Guaranties and the Support
and Clawback Agreement, an amendment to the Environmental
Indemnity, and a consent of Wainoco, FHI, FRI and FPLI to this
Agreement;
(vii) copies of the Indenture and the Resid
Processing Agreement, together with all amendments thereto
(which, in the case of the Resid Processing Agreement, shall show
a termination date no earlier than June 30, 1999), all certified
by the Secretary or Assistant Secretary of the Borrower or
Wainoco, as applicable, as being and correct and complete and in
full force and effect;
(viii) an updated environmental report prepared by
ENSR Consulting and Engineering, dated no earlier than June 1997
and updating its environmental report dated August 1991 (as
previously updated), addressed to the Agent and bringing current
the status, and, if required by the Agent, expanding the scope,
of the environmental issues discussed in the earlier report;
(ix) favorable opinions of counsel for the
Borrower and FOC, as to such matters as any Bank through the
Agent may request; and
(x) a Borrowing Base Certificate containing
information as of Wednesday, June 25, 1997;
(b) the Borrower shall have paid (i) a renewal fee of
$100,000 to the Agent for the account of the Banks and (ii) all
other accrued interest, fees and expenses (as provided in this
Agreement and the other Credit Documents) of the Agent and the
Banks, to the extent due; and
(c) the Banks shall have received such other approv-
als, opinions, evidence and documents as the Agent may reasonably
request.
Section 4.2 Loans. The obligation of each Bank to make a
Loan on the occasion of each Borrowing is subject to the
limitations of the Commitment, to the performance by the Borrower
of all of its obligations under this Agreement and to the
satisfaction of the following further conditions:
(a) the Agent shall have received a Notice of
Borrowing with respect to such Loan;
(b) the following statements shall be true (and the
acceptance by the Borrower of the proceeds of such Borrowing
shall constitute a representation and warranty by the Borrower
that on the date of such Borrowing such statements are true):
(i) the representations and warranties contained
in each Credit Document are correct in all material respects on
and as of the date of such Borrowing, before and after giving
effect to such Borrowing and to the application of the proceeds
therefrom, as though made on and as of such date;
(ii) no event has occurred and is continuing, or
would result from such Borrowing or from the application of the
proceeds therefrom, that constitutes a Default or Event of
Default;
(iii) there are no "Short-Term Loans" (as defined
in Section 1 of the FOC Guaranty) outstanding; and
(iv) during the five (5) Business Days immediately
preceding such Borrowing, neither the Borrower nor any Affiliate
has made any "Long-Term Loan" (as defined in Section 1 of the FOC
Guaranty) or made any distribution or taken any of the other
actions described in Section 6.7 of this Agreement, Sec-
tion 7.2(h) of the FOC Guaranty or Section 7.2(h) of the
FHI Guaranty; and
(c) the Agent shall have received such other approv-
als, opinions and documents as any Bank through the Agent may
reasonably request.
Section 4.3 Letters of Credit. The obligation of the Agent
to issue, and of each Bank to participate in, any Letter of
Credit is subject to the limitations of the Commitment, to the
performance by the Borrower of all of its obligations under this
Agreement and to the satisfaction of the following further
conditions:
(a) the Agent shall have received a Letter of Credit
Request with respect to such Letter of Credit;
(b) the following statements shall be true (and each
delivery of a Letter of Credit Request shall constitute a
representation and warranty by the Borrower that on the date of
issuance of the applicable Letter of Credit such statements are
true):
(i) the representations and warranties contained
in each Credit Document are correct in all material respects on
and as of the date of issuance of such Letter of Credit, before
and after giving effect to the issuance of such Letter of Credit,
as though made on and as of such date; and
(ii) no event has occurred and is continuing, or
would result from the issuance of such Letter of Credit, that
constitutes a Default or Event of Default; and
(c) the Agent shall have received such other approv-
als, opinions and documents as any Bank through the Agent may
reasonably request.
ARTICLE 5.
REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants as set forth below.
Section 5.1 Corporate Existence and Power. The Borrower
(a) is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware, (b) is duly
qualified or licensed as a foreign corporation and is in good
standing in each jurisdiction in which it owns or leases property
or in which the conduct of its business requires it to so qualify
or be licensed (except for jurisdictions in which the failure to
so qualify or be in good standing would not have a material
adverse effect on the business, condition (financial or other-
wise), operations, performance, properties or prospects of the
Borrower) and (c) has all requisite corporate power and authority
to own or lease and operate its properties and to carry on its
business as now conducted and as proposed to be conducted.
Section 5.2 Authorization. The execution, delivery and
performance by the Borrower of this Agreement and each other
Credit Document to which the Borrower is or is to be a party, and
the consummation of the transactions contemplated hereby and
thereby, are within the Borrower's corporate powers, have been
duly authorized by all necessary corporate action and do not
(a) contravene the Borrower's charter documents or bylaws,
(b) violate any Governmental Rule, (c) conflict with or result in
the breach of, or constitute a default under, any Material
Contract, loan agreement, indenture, mortgage, deed of trust or
lease, or any other contract or instrument binding on or
affecting the Borrower or any of its properties, the conflict,
breach or default of which would be reasonably likely to have a
material adverse effect on the business condition (financial or
otherwise), operations, performance, properties or prospects of
the Borrower or the ability of the Borrower to perform its
obligations under any of the Credit Documents, or (d) result in
or require the creation or imposition of any Lien upon or with
respect to any of the properties of the Borrower, other than in
favor of the Agent. The Borrower is not in violation of any such
Governmental Rule or in breach of any such contract, loan
agreement, indenture, mortgage, deed of trust, lease or other
instrument, the violation or breach of which would be reasonably
likely to have a material adverse effect on the business,
condition (financial or otherwise), operations, performance,
properties or prospects of the Borrower.
Section 5.3 Governmental Action. No Governmental Action is
required for the due execution, delivery or performance by the
Borrower of this Agreement or any other Credit Document to which
the Borrower is or is to be a party, or for the consummation of
the transactions contemplated hereby or thereby, except for
Governmental Action that has been duly obtained, taken, given or
made and is in full force and effect. This Agreement has been,
and each other Credit Document to which the Borrower is or is to
be a party when delivered hereunder will be, duly executed and
delivered by the Borrower.
Section 5.4 Binding Effect. This Agreement is, and each
other Credit Document to which the Borrower is or is to be a
party when delivered hereunder will be, the legal, valid and
binding obligation of the Borrower, enforceable against the
Borrower in accordance with its terms, except as the enforceabil-
ity thereof may be limited to bankruptcy, insolvency, moratorium,
reorganization or other similar laws affecting creditors' rights
generally.
Section 5.5 Other Information. No information, exhibit or
report furnished by the Borrower to the Agent or any Bank in
connection with the negotiation of the Credit Documents or
pursuant to the terms of any of the Credit Documents contains any
material misstatement of fact or omits to state a material fact
or any fact necessary to make the statements contained therein,
in light of the circumstances in which made, not misleading.
Section 5.6 Litigation. There is no action, suit,
investigation, litigation or proceeding affecting the Borrower
pending or, to the best knowledge of the Borrower, threatened
before any Governmental Person or arbitrator (a) that would be
reasonably likely to have a material adverse effect on the
business, condition (financial or otherwise), operations,
performance, properties or prospects of the Borrower or (b) that
purports to affect the legality, validity or enforceability of
this Agreement or any other Credit Document or the consummation
of the transactions contemplated hereby or thereby.
Section 5.7 Subsidiaries. The Borrower has no Subsidiar-
ies.
Section 5.8 Trademarks, Etc. The Borrower possesses all
necessary trademarks, trade names, copyrights and licenses to
conduct its business as now operated, without any known conflict
with the valid trademarks, trade names, copyrights or licenses of
others.
Section 5.9 Fire, Etc. Neither the business nor the
properties of the Borrower are affected by any fire, explosion,
accident, strike, lockout or other labor dispute, or other
casualty (whether or not covered by insurance) that would be
reasonably likely to have a material adverse effect on the
business, condition (financial or otherwise), operations,
performance, properties or prospects of the Borrower.
Section 5.10 Burdensome Agreements. The Borrower is not a
party to any indenture, loan agreement, credit agreement, lease
or other agreement or instrument, or subject to any charter or
corporate restriction, that would be reasonably likely to have a
material adverse effect on the business, condition (financial or
otherwise), operations, performance, properties or prospects of
the Borrower or on the ability of the Borrower to carry out its
obligations under this Agreement or any other Credit Document.
Section 5.11 Taxes. The Borrower has filed, or there has
been filed on its behalf, all tax returns (federal, state, local
and foreign) required to be filed before the date of the making
of this representation and warranty, and the Borrower has paid
all taxes shown thereon to be due, including interest, additions
to taxes and penalties, or has provided adequate reserves for the
payment thereof.
Section 5.12 Title to Properties. The Borrower has good
and marketable title to all properties, real or personal,
purported to be owned by it.
Section 5.13 Ownership. Wainoco is the legal and benefi-
cial owner of all of the outstanding capital stock of FHI, and
such stock is not subject to any Lien. FHI is the legal and
beneficial owner of all of the outstanding capital stock of FOC,
and such stock is not subject to any Lien. FOC is the legal and
beneficial owner of all of the outstanding capital stock of FORC,
FRI and FPLI, and such stock is not subject to any Lien (other
than, in the case of the stock of FORC, in favor of the Agent).
ARTICLE 6.
COVENANTS
So long as (1) any Commitment is in effect, (2) any Letter
of Credit is outstanding or (3) any Obligation remains unpaid,
unless compliance has been waived in writing by the Majority
Banks, the Borrower will observe the covenants set forth below.
A. AFFIRMATIVE COVENANTS
Section 6.1 Information. The Borrower will deliver
directly to each Bank the following:
(a) by 2:00 p.m., Los Angeles time, on the sixth day
after (but excluding any weekday that is a federal holiday
observed in the State of Colorado) each biweekly date of calcula-
tion referred to below, an Accounts aging schedule in form
satisfactory to the Agent and a Borrowing Base Certificate, both
as of Wednesday of every other week, commencing with July 9,
1997, or, if an Inventory Audit is conducted during such week, as
of the date of such Inventory Audit, together with, in the case
of each Borrowing Base Certificate that is the first Borrowing
Base Certificate with an effective date in a calendar month
following a calendar month in which an Inventory Audit was not
performed, a certification by the Borrower's Chief Financial
Officer or President to the effect that the volume of Inventory
contained in each tank located at the Borrower's Cheyenne
refinery, as determined by the reading of tank sight gauges as of
the last day of the preceding calendar month and after any
necessary recalibration of such sight gauges, equals the volume
of Inventory (plus or minus 2%) contained in such tank that was
simultaneously determined by the Borrower's physical measurement
of such Inventory, using standard industry practices and standard
tank-gauging wire-line devices;
(b) as soon as available and in any event within
forty-five (45) days after the end of each calendar month, a
certificate of the chief financial officer or chief accounting
officer of the Borrower stating (i) whether the Borrower is in
compliance with all of its covenants and agreements contained in
the Credit Documents and (ii) whether there exists on the date of
such certificate any Default or Event of Default and, if any
Default or Event of Default exists, setting forth the details
thereof and the action that the Borrower is taking or proposes to
take with respect thereto;
(c) forthwith upon the occurrence of any Default or
Event of Default, a certificate of the chief financial officer or
chief accounting officer of the Borrower setting forth the
details thereof and the action that the Borrower is taking or
proposes to take with respect thereto;
(d) forthwith upon any return, recovery, dispute or
claim concerning Accounts or sales of Inventory and exceeding two
hundred fifty thousand dollars ($250,000) in any instance, a
certificate of the chief financial officer or chief accounting
officer of the Borrower setting forth the details thereof; and
(e) promptly upon request, such other information
respecting the business, condition (financial or otherwise),
operations, performance, properties or prospects of the Borrower
as any Bank may from time to time reasonably request.
Section 6.2 Audits. At any reasonable time and from time
to time, upon reasonable prior notice to the Borrower, the
Borrower will permit the Agent and its consultants, agents and
representatives to examine and make copies of and abstracts from
the records and books of account of, and visit the properties and
have access to the assets of, the Borrower and to discuss the
affairs, finances and accounts of the Borrower with any of its
officers, directors and employees and with its independent
certified public accountants, including for the purpose of
conducting Inventory Audits (which shall be conducted at least
once during each semiannual fiscal period of the Borrower, as of
the last day of such period) and Commercial Finance Audits (which
shall be conducted at least semiannually).
Section 6.3 Returns and Allowances. The Borrower will
treat returns and allowances, if any, between the Borrower and
its customers on the same basis and in accordance with the usual
and customary practices of the Borrower as they existed before
the date hereof, but such returns and allowances for any fiscal
year shall in no event exceed two percent (2%) of total sales for
the previous fiscal year.
Section 6.4 Other Covenants. The Borrower will do, or
refrain from doing, as applicable, all things as necessary to
permit FOC to comply with the covenants contained in Section 7 of
the FOC Guaranty.
Section 6.5 Performance of Material Contracts. The
Borrower will (a) perform and observe all of the terms and
provisions of each Material Contract to be performed or observed
by it, maintain each Material Contract in full force and effect
and enforce each Material Contract in accordance with its terms,
except in each case to the extent that the failure to do so would
not have a material adverse effect on the business, condition
(financial or otherwise), operations, performance, properties or
prospects of the Borrower, and (b) upon reasonable request by the
Agent, make to each other party to each Material Contract such
demands and requests for information, reports or action as the
Borrower is entitled to make under such Material Contract.
B. NEGATIVE COVENANTS
Section 6.6 Cleanup Period. The Borrower will not permit
any calendar quarter to pass without there being a period of at
least five (5) consecutive Business Days in such calendar quarter
during which the Borrower either (a) has no Loans outstanding or
(b) to the extent any Loans are outstanding during such period,
maintains an amount equal to the aggregate principal amount of
such Loans in the "Control Account" (as defined in the Account
Pledge Agreement).
Section 6.7 Dividends, Etc. The Borrower will not declare
or pay any dividends, purchase, redeem, retire, defease or
otherwise acquire for value any of its capital stock or any
warrants, rights or options to acquire such capital stock, now or
hereafter outstanding, return any capital to its stockholder as
such, or make any distribution of assets, capital stock,
warrants, rights, options, obligations or securities to its
stockholder as such (in this Section 6.7, all of the foregoing
actions by the Borrower collectively called "making a distribu-
tion"), if and so long as (a) any Loan is outstanding, (b) any
Default or Event of Default other than pursuant to Sec-
tion 7.1(c), or any Default or Event of Default pursuant to
Section 7.1(c) that the Majority Banks believe, in their
reasonable judgment, to be material (and a Default or Event of
Default pursuant to Section 7.1(c) shall be deemed to be material
unless the Agent notifies the Borrower in writing that the
Majority Banks believe such Default or Event of Default not to be
material), has occurred and is continuing or would result from
making a distribution or (c) there has been an acceleration of
the Obligations; provided, however, that, in any case described
in clause (b) or (c) above, the Borrower shall not be prohibited
from making a distribution if and to the extent that (i) the same
is not made from, or from cash derived from the liquidation or
conversion of, any Collateral or (ii) the same is made from, or
from cash derived from the liquidation or conversion of,
Collateral (A) that the Super-Majority Banks, in their sole and
absolute discretion, determine to be unnecessary to fully and
adequately secure the Obligations and (B) as to which the Agent
so notifies the Borrower in writing.
Section 6.8 Use of Loans and Letters of Credit. The
Borrower will not use the proceeds of any Loan other than for its
working capital purposes. The Borrower will not request the
issuance of any Letter of Credit other than to support (a) its
purchases of crude oil or petroleum products or (b) other obliga-
tions of the Borrower incurred in the ordinary course of business
and as to which the Agent and the Banks have agreed, in their
sole and absolute discretion, to support the same by issuance of
and participation in a Letter of Credit.
Section 6.9 Amendment, Etc. of Material Contracts. The
Borrower will not (a) cancel or terminate any Material Contract
or consent to or accept any cancellation or termination thereof,
(b) amend or otherwise modify any Material Contract or give any
consent, waiver or approval thereunder, to the extent that the
same would impair the value of the interest or rights of the
Borrower thereunder in any material respect or would impair the
interest or rights of the Agent or any Bank, (c) waive any
default under or breach of any Material Contract, (d) agree in
any manner to any other amendment, modification or change of any
term or condition of any Material Contract, to the extent that
the same would impair the value of the interest or rights of the
Borrower thereunder in any material respect or would impair the
interest or rights of the Agent or any Bank or (e) take any other
action in connection with any Material Contract that would impair
the value of the interest or rights of the Borrower thereunder in
any material respect or that would impair the interest or rights
of the Agent or any Bank.
ARTICLE 7.
EVENTS OF DEFAULT
Section 7.1 Events of Default. If any one or more of the
following events (each an "Event of Default") occurs and is
continuing:
(a) the Borrower fails to pay any Obligation when due;
(b) any representation or warranty made by the
Borrower, any Affiliate or any Subsidiary of any thereof (or any
of their respective officers) in or in connection with any Credit
Document proves to have been incorrect in any material respect
when made;
(c) the Borrower or FOC, as applicable, fails to
perform or observe any term, covenant or agreement contained in
Article 6.B. or in Section 7.2 of the FOC Guaranty; or the
Borrower or any Affiliate fails to perform or observe any other
term, covenant or agreement of any Credit Document on its part to
be performed or observed, and the same is not remedied within ten
(10) days after written notice thereof has been given to the
Borrower by the Agent;
(d) the Borrower, any Affiliate or any Subsidiary of
any thereof fails to pay any principal of any Debt thereof
outstanding in a principal amount of at least one million dollars
($1,000,000) in the aggregate (excluding the Obligations), or any
interest or premium thereon, when due (whether by scheduled
maturity, required prepayment, acceleration, demand or other-
wise), and such failure continues after the applicable grace
period, if any, specified in the agreement or instrument relating
to such Debt; any other event occurs or condition exists under
any agreement or instrument relating to any such Debt and
continues after the applicable grace period, if any, specified in
such agreement or instrument, if the effect of such event or
condition is to accelerate, or to permit the acceleration of, the
maturity of such Debt; or any such Debt is declared to be due and
payable, or is required to be prepaid, redeemed, purchased or
defeased (other than by a regularly scheduled required prepay-
ment, redemption, purchase or defeasance), or an offer to prepay,
redeem, purchase or defease such Debt is required to be made, in
each case before the stated maturity thereof;
(e) the Borrower, any Affiliate or any Subsidiary of
any thereof generally does not pay its debts as such debts become
due, admits in writing its inability to pay its debts generally
or makes a general assignment for the benefit of creditors; any
proceeding is instituted by or against the Borrower, any
Affiliate or any Subsidiary of any thereof seeking to adjudicate
it a bankrupt or insolvent, seeking liquidation, winding up,
reorganization, arrangement, adjustment, protection, relief, or
composition of it or its debts under any law relating to
bankruptcy, insolvency or reorganization or relief of debtors, or
seeking the entry of an order for relief or the appointment of a
receiver, trustee or other similar official for it or for any
substantial part of its property; or the Borrower, any Affiliate
or any Subsidiary of any thereof takes any corporate action to
authorize any of the actions set forth above in this subsec-
tion (e);
(f) any judgment or order for the payment of money in
excess of one million dollars ($1,000,000) is rendered against
the Borrower, any Affiliate or any Subsidiary of any thereof, and
either (i) enforcement proceedings are commenced by any creditor
upon such judgment or order or (ii) there is any period of ten
(10) consecutive days (or, if the entire amount is covered by
insurance (subject to applicable deductibles), 30 consecutive
days) during which a stay of enforcement of such judgment or
order, by reason of a pending appeal or otherwise, is not in
effect, unless such judgment or order has been vacated, satis-
fied, dismissed, or bonded pending appeal or, in the case of a
judgment or order the entire amount of which is covered by
insurance (subject to applicable deductibles), is the subject of
a binding agreement with the plaintiff and the insurer covering
payment therefor;
(g) there occurs, in the reasonable judgment of the
Majority Banks, any material adverse change in the business,
condition (financial or otherwise), operations, performance,
properties or prospects of the Borrower, FHI, FOC, FRI, FPLI or
any Subsidiary of any thereof;
(h) any provision of any Credit Document for any
reason ceases to be valid and binding on or enforceable against,
in any material respect, the Borrower or any Affiliate party
thereto, or the Borrower or such Affiliate so states in writing;
or
(i) for any reason except to the extent permitted by
the terms of the Security Agreement, the Account Pledge Agree-
ment, the Note Pledge Agreement or the Stock Pledge Agreement,
there ceases to be a valid and perfected first-priority security
interest in favor of the Agent in any of the Collateral purported
to be covered by any of such agreements;
then, and in any such event, the Agent (i) shall at the request,
or may with the consent, of the Majority Banks, by notice to the
Borrower, declare the obligation of each Bank to make Loans, and
the obligation of the Agent to issue Letters of Credit, to be
terminated, whereupon the same shall forthwith terminate, and
(ii) shall at the request, or may with the consent, of the
Majority Banks, by notice to the Borrower, declare the Obliga-
tions, all interest thereon and all other amounts payable under
this Agreement and the other Credit Documents to be forthwith due
and payable, whereupon (A) the Obligations, all such interest and
all such amounts shall become and be forthwith due and payable,
without presentment, demand, protest or further notice of any
kind, all of which are hereby expressly waived by the Borrower,
and (B) to the extent any Letters of Credit are then outstanding,
the Borrower shall deposit with and pledge to the Agent cash
collateral in the aggregate Letter of Credit Amount of such
Letters of Credit; provided, however, that, in the event of an
actual or deemed entry of an order for relief with respect to the
Borrower, any Affiliate or any Subsidiary of any thereof under
the Federal Bankruptcy Code, (x) the obligation of each Bank to
make Loans and of the Agent to issue Letters of Credit shall be
terminated automatically, and (y) the Loans, all such interest
and all such amounts (including such cash collateral) shall
automatically become and be due and payable, without presentment,
demand, protest or any notice of any kind, all of which are
hereby expressly waived by the Borrower.
ARTICLE 8.
THE AGENT
Section 8.1 Authorization and Action. Each Bank hereby
appoints and authorizes the Agent to take such action as agent on
its behalf and to exercise such powers under this Agreement as
are delegated to the Agent by the terms hereof, together with
such powers as are reasonably incidental thereto. As to any
matters not expressly provided for by the Credit Documents
(including enforcement of and collection under the Credit
Documents), the Agent shall not be required to exercise any
discretion or take any action, but shall be required to act or to
refrain from acting (and shall be fully protected in so acting or
refraining from acting) upon the instructions of the Majority
Banks, and such instructions shall be binding upon all Banks and
all holders of Notes; provided, however, that the Agent shall not
be required to take any action that exposes the Agent to personal
liability or that is contrary to the Credit Documents or
applicable law. The Agent agrees to give each Bank prompt notice
of each notice given to it by the Borrower pursuant to the terms
of this Agreement.
Section 8.2 Agent's Reliance, Etc. Neither the Agent nor
any of its directors, officers, agents or employees shall be
liable for any action taken or omitted to be taken by it or them
under or in connection with the Credit Documents, except for its
or their own gross negligence or willful misconduct. Without
limitation of the generality of the foregoing, the Agent (a) may
treat any Bank that has signed this Agreement or an Assignment
and Acceptance as the holder of the applicable portion of the
Obligations; (b) may consult with legal counsel (including
counsel for the Borrower or any Affiliate), independent public
accountants and other experts selected by it and shall not be
liable for any action taken or omitted to be taken in good faith
by it in accordance with the advice of such counsel, accountants
or experts; (c) makes no warranty or representation to any Bank
and shall not be responsible to any Bank for any statements,
warranties or representations made in or in connection with the
Credit Documents; (d) shall not have any duty to ascertain or to
inquire as to the performance or observance of any of the terms,
covenants or conditions of any Credit Document on the part of the
Borrower or any Affiliate or to inspect the property (including
the books and records) of the Borrower or any Affiliate;
(e) shall not be responsible to any Bank for the due execution,
legality, validity, enforceability, genuineness, sufficiency or
value of any Credit Document or any other instrument or document
furnished pursuant hereto or thereto; and (f) shall incur no
liability under or in respect of any Credit Document by acting
upon any notice, consent, certificate or other instrument or
writing (which may be by telecopier or otherwise) believed by it
to be genuine and signed or sent by the proper party or parties.
Section 8.3 Union Bank and Affiliates. With respect to
its Commitment, the Loans made by it, the Note issued to it and
the Letters of Credit participated in by it, Union Bank shall
have the same rights and powers under this Agreement as any other
Bank and may exercise the same as though it were not the Agent;
and the term "Bank" or "Banks" shall, unless otherwise expressly
indicated, include Union Bank in its individual capacity. Union
Bank and its affiliates may accept deposits from, lend money to,
act as trustee under indentures of, and generally engage in any
kind of business with, the Borrower, any Affiliate, any Subsid-
iary of any thereof and any Person that may do business with or
own securities of the Borrower, any Affiliate or any such
Subsidiary, all as if Union Bank were not the Agent and without
any duty to account therefor to the Banks.
Section 8.4 Bank Credit Decision. Each Bank acknowledges
that it has, independently and without reliance on the Agent or
any other Bank and based on the financial statements referred to
in Section 6(e) of the FOC Guaranty and such other documents and
information as it has deemed appropriate, made its own credit
analysis and decision to enter into this Agreement. Each Bank
also acknowledges that it will, independently and without
reliance on the Agent or any other Bank and based on such
documents and information as it deems appropriate at the time,
continue to make its own credit decisions in taking or not taking
action under this Agreement.
Section 8.5 Indemnification. The Banks agree to indemnify
the Agent (to the extent not promptly reimbursed by the Borrow-
er), ratably according to the respective principal amounts of the
Obligations then held by each of them (or if no Obligations are
at the time outstanding or if any Obligations are then held by
Persons that are not Banks, ratably according to the respective
amounts of their Commitments), from and against any and all
liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses and disbursements of any kind
or nature whatsoever that may be imposed on, incurred by or
asserted against the Agent in any way relating to or arising out
of the Credit Documents or any action taken or omitted by the
Agent under the Credit Documents; provided, however, that no Bank
shall be liable for any portion of such liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements resulting from the Agent's gross
negligence or willful misconduct. Without limitation of the
foregoing, each Bank agrees to reimburse the Agent promptly upon
demand for its ratable share of any costs and expenses payable by
the Borrower under Section 9.4, to the extent that the Agent is
not reimbursed for such costs and expenses by the Borrower.
Section 8.6 Successor Agent. The Agent may resign at any
time by giving written notice thereof to the Banks and the
Borrower and may be removed at any time with or without cause
with the written approval of the Majority Banks. Upon any such
resignation or removal, the Majority Banks shall have the right
to appoint a successor Agent. If no successor Agent has been so
appointed by the Majority Banks, and has accepted such appoint-
ment, within thirty (30) days after the retiring Agent's giving
of notice of resignation or the Majority Banks' removal of the
retiring Agent, then the retiring Agent may, on behalf of the
Banks, appoint a successor Agent, which shall be a commercial
bank organized under the laws of the United States of America or
of any state thereof and having a combined capital and surplus of
at least five hundred million dollars ($500,000,000). Upon the
acceptance of any appointment as Agent hereunder by a successor
Agent, such successor Agent shall thereupon succeed to and become
vested with all of the rights, powers, privileges and duties of
the retiring Agent, and the retiring Agent shall be discharged
from its duties and obligations under the Credit Documents.
After any retiring Agent's resignation or removal hereunder as
Agent, the provisions of this Article 8 shall inure to its
benefit as to any actions taken or omitted to be taken by it
while it was agent under this Agreement.
Section 8.7 Agent as Collateral Holder.
(a) Except for action expressly required of the Agent
hereunder or under any other Credit Document as holder of any
Collateral, the Agent shall in all cases be fully justified in
refusing to act hereunder and thereunder unless it is further
indemnified to its satisfaction by the Banks, proportionately in
accordance with the Obligations then due and payable to each of
them, against any and all liability and expense that may be
incurred by the Agent by reason of taking or continuing to take
any such action.
(b) Except as expressly provided herein, the Agent
shall have no duty to take any affirmative steps with respect to
the collection of amounts payable in respect of the Collateral.
The Agent shall incur no liability as a result of any private
sale of the Collateral.
(c) The Banks hereby consent, and agree upon written
request by the Agent to execute and deliver such instruments and
other documents as the Agent may deem desirable to confirm such
consent, to the release of the Liens on the Collateral, including
any release in connection with any sale, transfer or other
disposition of the Collateral or any part thereof, in accordance
with the Credit Documents.
(d) The Agent shall be deemed to have exercised
reasonable care in the custody and preservation of the Collateral
in its possession if the Collateral is accorded treatment
substantially equal to that the Agent accords its own property,
it being understood that neither the Agent nor any Bank shall
have responsibility for (i) ascertaining or taking action with
respect to calls, conversions, exchanges, maturities, tenders or
other matters relative to any Collateral, whether or not the
Agent or any Bank is deemed to have knowledge of such matters, or
(ii) taking any necessary steps to preserve rights against any
parties with respect to any Collateral.
ARTICLE 9.
MISCELLANEOUS
Section 9.1 Amendments, Etc. No amendment or waiver of any
provision of this Agreement or any Note, or consent to any
departure by the Borrower therefrom, shall be effective unless in
writing and signed or consented to (in writing) by the Majority
Banks (and, in the case of amendments, the Borrower), and then
such waiver or consent shall be effective only in the specific
instance and for the specific purpose for which given; provided,
however, that no amendment, waiver or consent shall, unless in
writing and signed or consented to (in writing) by all of the
Banks, do any of the following: (a) waive any of the conditions
specified in Article 4; (b) increase the Commitments of the Banks
or subject the Banks to any additional obligations; (c) release
any Collateral, except in accordance with the terms of the Credit
Documents; (d) reduce the principal of, or interest on, the Loans
or any fees or other amounts payable hereunder; (e) postpone any
date fixed for (i) payment of principal of, or interest on, the
Loans, (ii) reimbursement of drawings under Letters of Credit or
(iii) payment of fees or other amounts payable hereunder;
(f) change the percentage of the Commitments or of the Obliga-
tions outstanding, or the number of Banks, required for the Banks
or any of them to take any action hereunder; or (g) amend this
Section 9.1; and provided further, however, that no amendment,
waiver or consent shall, unless in writing and signed by the
Agent in addition to the Banks required above to take such
action, affect the rights or duties of the Agent under this
Agreement or any other Credit Document.
Section 9.2 Notices, Etc. All notices and other communica-
tions provided for hereunder shall be in writing (including by
telecopier) and shall be mailed, telecopied or delivered, if to
the Borrower, to it at 0000 Xxxxx Xxxxxx, Xxxxx 000X, Xxxxxxxxx,
Xxxxxxxx 00000, telecopier number (000) 000-0000, Attention:
Xx. Xxx X. Xxxxxx; if to any Bank, to it at the address or
telecopier number set forth below its name on the signature pages
hereof or in the Assignment and Acceptance by which it became a
party hereto; if to the Agent, to it at 000 Xxxxx Xxxxxxxx
Xxxxxx, Xxx Xxxxxxx, Xxxxxxxxxx 00000, telecopier number
(000) 000-0000, Attention: Energy Capital Services; or, as to
each party, to it at such other address or telecopier number as
designated by such party in a written notice to the other
parties. All such notices and communications shall be deemed
received, (a) if personally delivered, upon delivery, (b) if sent
by first-class mail, on the third Business Day following deposit
into the mails and (c) if sent by telecopier, on the Business Day
following such sending, except that notices and communications to
the Agent pursuant to Article 2 or 8 shall not be effective until
received by the Agent.
Section 9.3 No Waiver; Remedies. No failure on the part of
any Bank or the Agent to exercise, and no delay in exercising,
any right hereunder shall operate as a waiver thereof, and no
single or partial exercise of any such right shall preclude any
other or further exercise thereof or the exercise of any other
right. The remedies provided herein are cumulative and not
exclusive of any remedies provided by law.
Section 9.4 Costs and Expenses. The Borrower agrees to pay
on demand (a) all costs and expenses of the Agent in connection
with the preparation, execution, delivery, administration,
modification and amendment of this Agreement, the other Credit
Documents and the other documents to be delivered hereunder,
including (i) the reasonable fees and out-of-pocket expenses of
counsel for the Agent with respect thereto and with respect to
advising the Agent as to its rights and responsibilities, or the
perfection, protection or reservation of rights or interests,
under this Agreement, the other Credit Documents and such other
documents to be delivered hereunder, and (ii) the fees and
expenses of any consultants, auditors or accountants engaged by
the Agent pursuant hereto (including for Commercial Finance
Audits (provided that the Borrower shall not be required to pay
for more than three Commercial Finance Audits conducted during
any single calendar year), Inventory Audits (provided that the
Borrower shall not be required to pay for more than three
Inventory Audits conducted during any single calendar year) and
the reports referred in Sections 4.1(a)(ix) and (x)), and (b) all
costs and expenses of the Agent and the Banks (including
reasonable counsel fees and expenses of the Agent and the Banks)
in connection with the enforcement (whether through negotiations,
legal proceedings or otherwise) of this Agreement, the other
Credit Documents and the other documents to be delivered
hereunder, whether in any action, suit or litigation, any
bankruptcy, insolvency or similar proceeding or otherwise.
Section 9.5 Indemnification. The Borrower hereby agrees to
indemnify and hold harmless the Agent and each Bank and each of
their respective officers, directors, employees, agents, advisors
and affiliates (each an "Indemnified Person") from and against
any and all claims, damages, losses, liabilities, costs and
expenses (including reasonable attorneys' fees and expenses,
whether or not such Indemnified Person is named as a party to any
proceeding or is otherwise subjected to judicial or legal process
arising from any such proceeding) that any of them may incur, or
that may be claimed, asserted or awarded against any of them by
any Person, in each case arising out of, related to or in
connection with, or in connection with the preparation for a
defense of any investigation, litigation or proceeding arising
out of, related to or in connection with, any Credit Document,
any Loan, any Letter of Credit, the Wainoco Note Offering, the
consummation of any transaction contemplated hereby or thereby,
the transfer of or payment or failure to pay under any Letter of
Credit or the use by the Borrower or the beneficiary of any
Letter of Credit of the proceeds of any Loan or of any drawing
under any Letter of Credit, except to the extent that any such
claim, damage, loss, liability, cost or expense is found in a
final, nonappealable judgment by a court of competent jurisdic-
tion to have resulted from such Indemnified Person's gross
negligence or willful misconduct.
Section 9.6 Right of Setoff. Upon (a) the occurrence and
during the continuation of any Event of Default and (b) the
making of the request or the granting of the consent specified by
Section 7.1 to authorize the Agent to declare the Obligations due
and payable pursuant to the provisions of Section 7.1, each Bank
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 indebtedness at any time owing
by such Bank to or for the credit or the account of the Borrower
against any and all of the obligations of the Borrower now or
hereafter existing under this Agreement and the other Credit
Documents, irrespective of whether such Bank has made any demand
under this Agreement or any such other Credit Document and
although such obligations may be unmatured. Each Bank agrees to
notify the Borrower promptly after any such setoff and applica-
tion made by such Bank; provided, however, that the failure to
give such notice shall not affect the validity of such setoff and
application. The rights of each Bank under this section are in
addition to other rights and remedies (including other rights of
setoff) that such Bank may have.
Section 9.7 Binding Effect. This Agreement shall be
binding upon and inure to the benefit of the Borrower, the Agent
and the Banks and their respective successors and assigns, except
that the Borrower shall not have the right to assign any of its
rights and obligations hereunder without the prior written
consent of the Majority Banks.
Section 9.8 Assignments and Participations.
(a) Union Bank may assign to one or more banks or
other entities, and any Bank may assign (i) to any other Bank,
(ii) to any bank or other entity as necessary, or as reasonably
deemed by such assigning Bank to be appropriate, in order to
comply with or implement any Governmental Rule or Governmental
Action affecting such Bank or (iii) to any Subsidiary or other
affiliate of such Bank, all of or a portion of its rights and
obligations under this Agreement (including all or a portion of
its Commitment, the Loans owing to it and its participations in
outstanding Letters of Credit); provided, however, that (A)
except in the case of an assignment to a Person that, immediately
before such assignment, was a Bank, the amount of the Commitment
of the assigning Bank being assigned pursuant to each such
assignment (determined as of the date of the Assignment and
Acceptance with respect to such assignment) shall in no event be
less than five million dollars ($5,000,000) and (B) the parties
to each such assignment shall execute and deliver to the Agent,
for its acceptance and recording in the Register, an Assignment
and Acceptance. Upon such execution, delivery, acceptance and
recording, from and after the effective date specified in each
Assignment and Acceptance, which effective date shall be at least
five (5) Business Days after the date of delivery thereof to the
Agent or, if so specified in such Assignment and Acceptance, the
date of acceptance thereof by the Agent, (1) the assignee
thereunder shall be a party hereto and, to the extent that rights
and obligations hereunder have been assigned to it pursuant to
such Assignment and Acceptance, shall have the rights and
obligations of a Bank hereunder and (2) the Bank assignor
thereunder shall, to the extent that rights and obligations
hereunder have been assigned by it pursuant to such Assignment
and Acceptance, relinquish its rights and be released from its
obligations under this Agreement.
(b) By executing and delivering an Assignment and
Acceptance, the Bank assignor thereunder and the assignee
thereunder confirm to and agree with each other and the other
parties hereto as follows: (i) other than as provided in such
Assignment and Acceptance, such assigning Bank makes no represen-
tation or warranty and assumes no responsibility with respect to
any statements, warranties or representations made in or in
connection with this Agreement or the execution, legality,
validity, enforceability, genuineness, sufficiency or value of
this Agreement or any other instrument or document furnished
pursuant hereto; (ii) such assigning Bank makes no representation
or warranty and assumes no responsibility with respect to the
financial condition of the Borrower, any Affiliate or any of
their respective Subsidiaries or the performance or observance by
the Borrower or any Affiliate of any of their respective
obligations under this Agreement or any other instrument or
document furnished pursuant hereto; (iii) such assignee confirms
that it has received a copy of this Agreement, together with
copies of the financial statements referred to in Section 6(e) of
the FOC Guaranty and such other documents and information as it
has deemed appropriate to make its own credit analysis and
decision to enter into such Assignment and Acceptance; (iv) such
assignee will, independently and without reliance upon the Agent,
such assigning Bank or any other Bank and based on such documents
and information as it may deem appropriate at the time, continue
to make its own credit decisions in taking or not taking action
under this Agreement; (v) such assignee appoints and authorizes
the Agent to take such action as agent on its behalf and to
exercise such powers under this Agreement as are delegated to the
Agent by the terms hereof, together with such powers as are
reasonably incidental thereto; and (vi) such assignee agrees that
it will perform in accordance with their terms all of the
obligations that by the terms of this Agreement are required to
be performed by it as a Bank.
(c) The Agent shall maintain at its address set forth
in Section 9.2 a copy of each Assignment and Acceptance delivered
to and accepted by it and a register for the recordation of the
names and addresses of the Banks and the Commitment of, and the
amount of Obligations owing to, each Bank from time to time (the
"Register"). The entries in the Register shall be conclusive and
binding for all purposes, absent manifest error, and the
Borrower, the Agent and the Banks may treat each Person whose
name is recorded in the Register as a Bank hereunder for all
purposes of this Agreement. The Register shall be available for
inspection by the Borrower or any Bank at any reasonable time and
from time to time upon reasonable prior notice.
(d) Upon its receipt of an Assignment and Acceptance
executed by an assigning Bank and an assignee, the Agent shall,
if such Assignment and Acceptance has been completed and is in
proper form and if such assignee is acceptable to the Agent,
(i) accept such Assignment and Acceptance, (ii) record the
information contained therein in the Register and (iii) give
prompt notice thereof to the Borrower.
(e) Each Bank may sell participations to one or more
banks or other entities in or to all or a portion of its rights
and obligations under this Agreement (including all or a portion
of its Commitments, the Loans owing to it and its participations
in outstanding Letters of Credit); provided, however, that
(i) such Bank's obligations under this Agreement (including its
Commitment to the Borrower hereunder) shall remain unchanged,
(ii) such Bank shall remain solely responsible to the other
parties hereto for the performance of such obligations, (iii) the
Borrower, the Agent and the other Banks shall continue to deal
solely and directly with such Bank in connection with such Bank's
rights and obligations under this Agreement and (iv) no partici-
pant under any such participation shall have any right to approve
any amendment or waiver of any provision of any Credit Document,
or any consent to any departure by the Borrower or any Affiliate
therefrom, except to the extent that such amendment, waiver or
consent would reduce the principal of, or interest on, the Loans
or any fees or other amounts payable hereunder, in each case to
the extent subject to such participation, postpone any date fixed
for any payment of principal of, or interest on, the Loans or any
fees or other amounts payable hereunder, in each case to the
extent subject to such participation, or release all or substan-
tially all of the Collateral, except as provided in the Credit
Documents.
(f) Any Bank may, in connection with any assignment or
participation or proposed assigned or participation pursuant to
this Section 9.8, disclose to the assignee or participant or
proposed assignee or participant any information relating to the
Borrower furnished to such Bank by or on behalf of the Borrower.
Section 9.9 Governing Law. THIS AGREEMENT AND THE NOTES
SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS
OF THE STATE OF CALIFORNIA APPLICABLE TO CONTRACTS MADE AND
PERFORMED IN THE STATE OF CALIFORNIA.
Section 9.10 Headings. The section and subsection headings
used herein have been inserted for convenience of reference only
and do not constitute matters to be considered in interpreting
this Agreement.
Section 9.11 Execution in Counterparts. This Agreement may
be executed in any number of counterparts and by different
parties hereto in separate counterparts, each of which when so
executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
Section 9.12 Arbitration.
(a) Claims or Controversies Subject to Arbitration.
Any claim or controversy between or among any of the parties to
this Agreement (the parties to this Agreement that are also
parties to such claim or controversy herein called the "Parties")
that arises out of or relates to (i) any Credit Document,
(ii) any negotiation, correspondence or communication relating to
any Credit Document, whether or not incorporated into any Credit
Document or any indebtedness evidenced thereby, (iii) the
administration or management of any Credit Document or any
indebtedness evidenced thereby or (iv) any alleged agreement,
promise, representation or transaction in connection therewith,
including any claim or controversy that arises out of or is based
upon an alleged tort, shall, at the written request of any Party,
be determined by binding arbitration. The arbitration shall be
conducted in accordance with Title 9 of the California Code of
Civil Procedure, Sections 1280 et seq. (the "California
Arbitration Act") and under the Commercial Rules of the American
Arbitration Association (the "AAA"). IN CONNECTION WITH ANY SUCH
ARBITRATION, THE PARTIES HEREBY EXPRESSLY, INTENTIONALLY AND
DELIBERATELY WAIVE ANY RIGHT THAT THEY MAY OTHERWISE HAVE TO
TRIAL BY JURY OF ANY SUCH CLAIM OR CONTROVERSY.
(b) Selection of Arbitrator. Within 30 days after
written demand, or within 30 days after commencement by any Party
of any lawsuit subject to this Section 9.12, a single neutral
arbitrator shall be selected pursuant to the Commercial Rules of
the AAA. However, the arbitrator selected must be a retired
state- or federal-court judge with at least 5 years of judicial
experience in civil matters. In the event that the selection
pursuant to the Commercial Rules of the AAA does not result in
the appointment of a single neutral arbitrator within 30 days,
any Party may petition the court to appoint a single neutral
arbitrator who is a retired state- or federal-court judge with at
least 5 years of judicial experience in civil matters. The
Parties shall bear equally the fees and expenses of the arbitra-
tor unless the arbitrator otherwise provides in any award
thereby.
(c) Powers of and Limitations on Arbitrator. The
arbitrator shall have the powers provided by the California
Arbitration Act and the Commercial Rules of the AAA, including
the powers described below, except as provided in this Section
9.12.
(i) The arbitrator shall determine all challenges
to the legality or enforceability of this Section 9.12.
(ii) The arbitrator shall apply the rules of
evidence to the same extent as they would be applied in a court
of law.
(iii) The arbitrator shall give effect to all legal
and equitable defenses in determining any claim or controversy,
including statutes of limitation, the statute of frauds, waiver
and estoppel.
(iv) A Party may not conduct discovery unless the
arbitrator grants such Party leave to do so upon a showing of
good cause. All discovery shall be completed within 90 days
after the appointment of the arbitrator. The arbitrator shall
limit discovery to nonprivileged material that is relevant to the
issues to be determined by the arbitrator.
(v) The AAA shall determine the time of the
hearing and shall designate its location from among the cities of
Los Angeles, San Diego and San Francisco, based upon the conve-
nience of the arbitrator, the Parties and any witnesses. How-
ever, such hearing shall be commenced within 30 days after
completion of discovery, unless the arbitrator grants a continu-
ance upon a showing of good cause by any Party. At least 7 days
before the date set for such hearing, the Parties shall exchange
copies of exhibits to be offered as evidence, and lists of the
witnesses who will testify, at such hearing. Once commenced, the
hearing shall proceed from day to day until completed, unless the
arbitrator grants a continuance upon a showing of good cause by
any Party. Any Party may cause to be prepared, at its expense,
a written transcription or electronic recordation of such
hearing.
(vi) Any award by the arbitrator shall be set
forth in a written decision supported by findings of fact and
conclusions of law that the arbitrator shall deliver to the
Parties concurrently with such award.
(vii) The award of the arbitrator may include
equitable relief.
(viii) The arbitrator may not award punitive damages
unless the arbitrator first makes written findings of fact that
would satisfy the requirements for recovery of punitive damages
under California law. No such award of punitive damages shall
exceed a sum equal to twice the amount of actual damages as
determined by the arbitrator.
(ix) The arbitrator shall have the power to award
reasonable attorneys' fees (including a reasonable allocation for
the costs of in-house counsel) and costs to the prevailing party.
(x) The provisions of California Civil Code
Sections 47 et seq. shall apply to the arbitration to the same
extent as they would apply to a judicial proceeding subject to
such provisions.
(xi) The laws of the State of California shall
govern the arbitration pursuant to this Section 9.12.
(d) Provisional Remedies, Self-Help and Foreclosure.
No provision of this Section 9.12 shall limit the right of any
Party (i) to exercise self-help remedies, including setoff,
(ii) to foreclose against or sell any collateral, by power of
sale or otherwise, or (iii) to obtain or oppose provisional or
ancillary remedies from a court of competent jurisdiction before,
after or during the pendency of the arbitration. The exercise
of, or opposition to, any such remedy shall not waive the right
of any Party to arbitration pursuant to this Section 9.12. If
any obligation under any Credit Document is or becomes secured by
an interest in real property, then no claim or controversy shall
be submitted to arbitration without the consent of all Parties.
If any Party does not consent to such submission, then the claim
or controversy shall be determined by a judicial action in which
all decisions of fact and law shall, at the request of any Party,
be referred to a referee in accordance with California Code of
Civil Procedure Sections 638 et seq. The referee shall be
selected pursuant to the provisions of Section 9.12(b) and shall
have the powers conferred upon an arbitrator by Section 9.12(c).
Judgment upon the award rendered by such referee shall be entered
in the court in which such judicial action was commenced, in
accordance with California Code of Civil Procedure Sections 644
et seq.
(e) Miscellaneous. Judgment upon the award of the
arbitrator may be entered in any court of competent jurisdiction.
In the event that multiple claims are asserted, some of which are
found to be not subject to this Section 9.12, the Parties agree
to stay the proceedings of the claims not subject to this Section
9.12 until all other claims are resolved in accordance with this
Section 9.12. In the event that claims are asserted against
multiple parties, some of which are not subject to this Section
9.12, the Parties agree to sever the claims subject to this
Section 9.12 and to resolve them in accordance with this Section
9.12. In the event that any provision of this Section 9.12 is
found to be illegal or unenforceable, the remainder of this
Section 9.12 shall remain in full force and effect.
Section 9.13 Reference to and Effect on Credit Documents.
(a) On and after the effective date of this Agreement,
each reference in the other Credit Documents to "the Credit
Agreement," "thereunder," "thereof," "therein" or any other
expression of like import referring to the Revolving Credit and
Letter of Credit Agreement dated as of August 10, 1992 among the
parties to this Agreement shall mean and be a reference to this
Agreement.
(b) Except as amended or amended and restated as of the date
hereof, the Credit Documents shall remain in full force and effect and are
hereby ratified and confirmed. Without limiting the generality of the
foregoing, the Security Agreement, the Account Pledge Agreement, the Note
Pledge Agreement, the Stock Pledge Agreement and all of the Collateral
described therein do and shall continue to secure the payment of all
obligations stated to be secured thereby under this Agreement and the
other Credit Documents.
(c) The execution, delivery and effectiveness of this
Agreement shall not operate as a waiver of any right, power or
remedy of any Bank or the Agent under any of the Credit Documents
or constitute a waiver of any provision of any of the Credit
Documents.
FRONTIER OIL AND REFINING COMPANY
By: /s/ Xxx X. Xxxxxx
--------------------------
Xxx X. Xxxxxx
Vice President and
Chief Financial Officer
Commitment
$20,000,000 UNION BANK OF CALIFORNIA, N.A.,
as Agent and as a Bank
By: /s/ Xxxxxx X. Xxxx
-------------------------
Xxxxxx X. Xxxx
Vice President
Union Bank of California, N.A.
000 Xxxxx Xxxxxxxx Xxxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Telecopier: (000) 000-0000
Attention: Energy Capital Services
$15,000,000 BANQUE PARIBAS
By: /s/ Xxxxxxx X. Xxxxxxx
------------------------
Xxxxxxx X. Xxxxxxx
Vice President
By: /s/ Barton D. Schoest
------------------------
Barton D. Schoest
Group Vice President
Banque Paribas
Houston Agency
0000 Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Telecopier: (000) 000-0000
Attention: Xx. Xxxxxxx X. Xxxxxxx
Vice President
$15,000,000 DEN NORSKE BANK ASA
By: /s/ Xxxxxx Xxxxxxxx
------------------------
Xxxxxx Xxxxxxxx
Senior Vice President
By: /s/ J. Xxxxxx Xxxxxx
------------------------
J. Xxxxxx Xxxxxx
Vice President
Den norske Bank ASA
Houston Representative Xxxxxx
000 Xxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Telecopier: (000) 000-0000
Attention: Xx. Xxxxx X. Xxxxxx
Senior Vice President
SCHEDULE 1
LETTER OF CREDIT BANKS FOR ELIGIBLE ACCOUNTS
Maximum Aggregate
Face Amount of
Bank Letters of Credit
Union Bank of California, N.A. unlimited
The Bank of Tokyo-Mitsubishi, Ltd. unlimited
Any bank domiciled in the
United States with a credit
rating of at least:
1. AA- or Aa3 $8,000,000
2. A $3,000,000
3. BBB or Baa $2,000,000
SCHEDULE 2
APPROVED ACCOUNT DEBTORS
Amerada Xxxx Corporation
Arco Oil & Gas Company*
Ashland Oil Inc.*
Ashland Petroleum Company*
Bear Xxxxxxx & Co., Inc.
Burlington Northern Railroad Company*
Chevron USA, Inc.*
Citgo Petroleum Corporation*
Conoco, Inc.*
Diamond Shamrock, Inc.*
Enron Capital & Trade Resources Corp.*
Enron Corp.*
Enron Oil Trading and Transportation Company
Enron Products Marketing Company
Exxon Company USA*
Exxon Supply Company*
Xxxx Oil Company*
Mapco Petroleum, Inc.
Marathon Petroleum Co., Inc.*
Mobil Oil Corporation*
Xxxxxx Xxxxxxx Group, Inc.*
Xxxxxx Oil USA Inc.*
Xxxxxxxx Petroleum Corporation*
Xxxxxxxx Permian Corporation*
Shell Oil Company*
Texaco Refining and Marketing Company*
Texaco Trading and Transportation Inc.*
Union Pacific Railroad*
Unocal Corporation
Unless marked by an asterisk, each entity listed above shall be
an approved account debtor only (1) if such entity is not a
subsidiary of any other entity or (2) in any case in which such
entity is a subsidiary of some other entity, if such subsidiary's
obligations to Frontier Oil and Refining Company are fully
guaranteed by such subsidiary's ultimate parent company.
SCHEDULE 3
METHODS OF CALCULATION OF FAIR MARKET VALUE OF INVENTORY
In determining market value of Inventory, the actual
Eligible Inventory volumes shall be multiplied by the prices
determined below for each category of Inventory. Each price
derived from the independent sources described below shall be the
price for the relevant Inventory type published on the effective
date, or published most recently before the effective date, of
the Borrowing Base Certificate concerned.
Inventory Type Method of Determining Prices
Sweet Wyoming Crude Average of Texaco's and Conoco's
posted price, less gravity adjust-
ment ("ATCPPLGA"), for 40-degree
Sweet Wyoming Crude, plus $2.20/
barrel.
General Wyoming Sour Crude ATCPPLGA for 24-degree General
Wyoming Sour Crude, plus $3.30/
barrel.
Wyoming Asphaltic Sour ATCPPLGA for 21-degree Wyoming
Sour Crude Asphaltic Sour Crude, plus $2.00/
barrel.
Canadian Sour Crude New York Mercantile Exchange near month
contract closing price for West Texas Inter-
mediate Crude, less gravity adjustment if
provided for in crude purchase contract
terms ("NYMEXWTILGA"), minus $1.20/ barrel.
Bow River Sour Crude NYMEXWTILGA, minus $1.60/barrel.
Mixed Xxxxx Sour ATCPPLGA for Sweet Wyoming Crude.
Finished Gasoline 70% times Denver OPIS Low*,
less $.014/gal.
+30% times Cheyenne OPIS Low*,
less $.01/gal.
Diesel 60% times Denver OPIS Low*,
less $.015/gal.
+40% times Cheyenne OPIS Low,
less $.01/gal.
Asphalt For volumes of Asphalt that have
been committed for sale under a
binding sales contract, the con-
tract price (converted to a price
per barrel by dividing the con-
tract short-ton price by 5.6).
For all other Asphalt volumes, the
average of the high and low As-
phalt Cement dollars/ton price
(divided by 5.6 to convert the
short-ton price to a price per
barrel), as established in the
category ASPHALT SELLING PRICES
Area Barge for MID-CONTINENT/MIDW-
EST in Asphalt Weekly Monitor,
published by Poten & Partners (in
the absence of this source of
pricing information, such price as
determined by the Agent).
Gas Oil 70% times the Unleaded Regular
Gasoline Net Price
+30% times the #2 Diesel net price,
less $.10/gal.
Sulfur Frontier's net-back price, based
on Frontier's most recent sale to
an independent third party.
Coke $0.00/ton
Propane Conway, Kansas OPIS wholesale Pro-
pane price, plus $.05/gal.
Normal Butane Same methodology as Propane except
use Butane price.
Field Butane Same as Normal Butane price.
Iso Butane Same methodology as Propane except
use Iso Butane price.
Olefins Same net price used for Premium
Unleaded Gasoline, less $.156/gal.
Light Straight Run Same as net price used for Unlead-
ed Regular Gasoline.
Reformate Same as net price used for Unlead-
ed Regular Gasoline.
Cat Gas Same as net price used for Unlead-
ed Regular Gasoline.
Alkylate Same as net price used for Premium
Unleaded Gasoline
Naphtha and Raffinate Same as net price used for Unlead-
ed Regular Gasoline, less $.04/g-
al.
MTBE Most recent price the Borrower
paid to an independent third party
for MTBE.
Ethanol Most recent price the Borrower
paid to an independent third party
for Ethanol.
Natural Gasoline Conway, Kansas OPIS wholesale
price of Natural Gasoline, plus
$.05/gal.
Raw Distillate Oil If the Borrower is selling #2 Die-
sel (0.5% sulfur), then the net
price for #2 Diesel (0.5% sulfur),
less $.02/gal. If the Borrower is
selling #2 Diesel (0.05% sulfur),
then the net price for #2 Diesel
(0.05% sulfur), less $.02/gal.
Xxxxx Distillate Oil Same as Raw Distillate Oil net
price.
JP-4 Same net price used for Naphtha.
Heavy Fuel Same as Wyoming Sour Crude Oil net
price times 60%.
Cutter Stock Same price as Heavy Fuel.
Slurry Xxxxx'x Gulf Coast Resid, less
$6.00/barrel.
Vac Bottoms Same average net price used for
Asphalt.
HP Vac Bottoms Same average net price used for
Asphalt.
Unfinished Gasoline Same price as Unleaded Regular
Gasoline, less $.025/gal.
As used in this schedule, "net price" means the reference price
less the specified adjustment amount.
The Agent reserves the right to adjust any of the above methodol-
ogies for determining market value if any of the sources of price
information is no longer available or if the price derived from
any of the above methodologies is no longer representative of
market prices.
______________________________________________________________
AMENDED AND RESTATED
REVOLVING CREDIT AND LETTER OF CREDIT AGREEMENT
among
FRONTIER OIL AND REFINING COMPANY,
as Borrower
and
THE BANKS NAMED HEREIN
and
UNION BANK OF CALIFORNIA, N.A.,
as Agent
June 30, 1997
______________________________________________________________
TABLE OF CONTENTS
Page
ARTICLE 1.
INTERPRETATION AND DEFINITIONS
Section 1.1 Definitions. . . . . . . . . . . . . . . . 1
Section 1.2 Accounting Terms . . . . . . . . . . . . . 15
Section 1.3 Interpretation . . . . . . . . . . . . . . 15
ARTICLE 2.
COMMITMENTS
Section 2.1 Commitments. . . . . . . . . . . . . . . . 15
Section 2.2 Fees . . . . . . . . . . . . . . . . . . . 16
Section 2.3 Mandatory Prepayment of Loans
and
Pledge of Cash Collateral. . . . . . . . . 16
A. LOANS
Section 2.4 Making Loans . . . . . . . . . . . . . . . 17
Section 2.5 Repayment. . . . . . . . . . . . . . . . . 18
Section 2.6 Interest . . . . . . . . . . . . . . . . . 18
Section 2.7 Prepayments. . . . . . . . . . . . . . . . 19
Section 2.8 Voluntary Conversion of Loans. . . . . . . 20
B. LETTERS OF CREDIT
Section 2.9 Issuance of Letters of Credit. . . . . . . 20
Section 2.10 Drawing and Reimbursement. . . . . . . . . 21
Section 2.11 Obligations Absolute . . . . . . . . . . . 21
Section 2.12 Letter of Credit Fees and
Charges . . . . . . . . . . . . . . . . . . . . . 22
Section 2.13 Limits of Liability of Agent and
Banks . . . . . . . . . . . . . . . . . . . . . . 23
C. PAYMENT PROVISIONS
Section 2.14 Payments . . . . . . . . . . . . . . . . . 23
Section 2.15 Computation of Interest and Fees . . . . . 24
Section 2.16 Payments on Non-Business Days. . . . . . . 24
Section 2.17 Sharing of Payments, Etc.. . . . . . . . . 24
Section 2.18 Evidence of Debt . . . . . . . . . . . . . 25
ARTICLE 3.
YIELD PROTECTION
Section 3.1 Increased LIBOR Loan Costs . . . . . . . . 25
Section 3.2 Illegality . . . . . . . . . . . . . . . . 25
Section 3.3 Inadequacy of LIBOR. . . . . . . . . . . . 26
Section 3.4 Increased Letter of Credit Costs . . . . . 26
Section 3.5 Capital Adequacy . . . . . . . . . . . . . 26
Section 3.6 Funding Losses . . . . . . . . . . . . . . 27
Section 3.7 Substitution of Bank . . . . . . . . . . . 27
ARTICLE 4.
CONDITIONS OF LENDING
Section 4.1 Initial Loan or Letter of Credit . . . . . 27
Section 4.2 Loans. . . . . . . . . . . . . . . . . . . 30
Section 4.3 Letters of Credit. . . . . . . . . . . . . 30
ARTICLE 5.
REPRESENTATIONS AND WARRANTIES
Section 5.1 Corporate Existence and Power. . . . . . . 31
Section 5.2 Authorization. . . . . . . . . . . . . . . 31
Section 5.3 Governmental Action. . . . . . . . . . . . 32
Section 5.4 Binding Effect . . . . . . . . . . . . . . 32
Section 5.5 Other Information. . . . . . . . . . . . . 32
Section 5.6 Litigation . . . . . . . . . . . . . . . . 32
Section 5.7 Subsidiaries . . . . . . . . . . . . . . . 32
Section 5.8 Trademarks, Etc. . . . . . . . . . . . . . 33
Section 5.9 Fire, Etc. . . . . . . . . . . . . . . . . 33
Section 5.10 Burdensome Agreements. . . . . . . . . . . 33
Section 5.11 Taxes. . . . . . . . . . . . . . . . . . . 33
Section 5.12 Title to Properties. . . . . . . . . . . . 33
Section 5.13 Ownership. . . . . . . . . . . . . . . . . 33
ARTICLE 6.
COVENANTS
A. AFFIRMATIVE COVENANTS
Section 6.1 Information. . . . . . . . . . . . . . . . 34
Section 6.2 Audits . . . . . . . . . . . . . . . . . . 35
Section 6.3 Returns and Allowances . . . . . . . . . . 35
Section 6.4 Other Covenants. . . . . . . . . . . . . . 35
Section 6.5 Performance of Material Contracts. . . . . 35
B. NEGATIVE COVENANTS
Section 6.6 Cleanup Period . . . . . . . . . . . . . . 35
Section 6.7 Dividends, Etc.. . . . . . . . . . . . . . 36
Section 6.8 Use of Loans and Letters of
Credit. . . . . . . . . . . . . . . . . . . . . . 36
Section 6.9 Amendment, Etc. of Material
Contracts . . . . . . . . . . . . . . . . . . . . 36
ARTICLE 7.
EVENTS OF DEFAULT
Section 7.1 Events of Default. . . . . . . . . . . . . 37
ARTICLE 8.
THE AGENT
Section 8.1 Authorization and Action . . . . . . . . . 39
Section 8.2 Agent's Reliance, Etc. . . . . . . . . . . 39
Section 8.3 Union Bank and Affiliates. . . . . . . . . 40
Section 8.4 Bank Credit Decision . . . . . . . . . . . 40
Section 8.5 Indemnification. . . . . . . . . . . . . . 40
Section 8.6 Successor Agent. . . . . . . . . . . . . . 41
Section 8.7 Agent as Collateral Holder . . . . . . . . 41
ARTICLE 9.
MISCELLANEOUS
Section 9.1 Amendments, Etc. . . . . . . . . . . . . . 42
Section 9.2 Notices, Etc.. . . . . . . . . . . . . . . 43
Section 9.3 No Waiver; Remedies. . . . . . . . . . . . 43
Section 9.4 Costs and Expenses . . . . . . . . . . . . 43
Section 9.5 Indemnification. . . . . . . . . . . . . . 44
Section 9.6 Right of Setoff. . . . . . . . . . . . . . 44
Section 9.7 Binding Effect . . . . . . . . . . . . . . 45
Section 9.8 Assignments and Participations . . . . . . 45
Section 9.9 Governing Law. . . . . . . . . . . . . . . 47
Section 9.10 Headings . . . . . . . . . . . . . . . . . 47
Section 9.11 Execution in Counterparts. . . . . . . . . 47
Schedule 1: Letter of Credit Banks for Eligible
Accounts
Schedule 2: Approved Account Debtors
Schedule 3: Methods of Calculation of Fair Market Value
of Inventory
Exhibit A: Amended and Restated Guaranty
Exhibit B: Application for Irrevocable Standby
Letter of Credit
Exhibit C: Borrowing Base Certificate
Exhibit D: Assignment and Acceptance
