$175,000,000
REVOLVING CREDIT AGREEMENT
among
FRONTIER OIL AND REFINING COMPANY,
as Borrower
and
THE LENDERS NAMED HEREIN
and
UNION BANK OF CALIFORNIA, N.A.,
as Administrative Agent, Documentation Agent and Lead Arranger
and
PARIBAS,
as Syndication Agent and Lead Arranger
November 16, 1999
Table of Contents
Page
ARTICLE 1. INTERPRETATION AND DEFINITIONS. . . . . . . . . . . . . . 1
Section 1.1 Definitions . . . . . . . . . . . . . . . . . . . .1
Section 1.2 Accounting Terms. . . . . . . . . . . . . . . . . 20
Section 1.3 Interpretation. . . . . . . . . . . . . . . . . . 20
ARTICLE 2. COMMITMENTS . . . . . . . . . . . . . . . . . . . . . . .20
Section 2.1 Commitments.. . . . . . . . . . . . . . . . . . . 20
Section 2.2 Fees. . . . . . . . . . . . . . . . . . . . . . . 21
Section 2.3 Mandatory Prepayment of Advances and Pledge
of Cash Collateral . . . . . . . . . . . . . . . 21
Section 2.4 Making Advances . . . . . . . . . . . . . . . . . 21
Section 2.5 Repayment . . . . . . . . . . . . . . . . . . . . 23
Section 2.6 Interest. . . . . . . . . . . . . . . . . . . . . 23
Section 2.7 Prepayments . . . . . . . . . . . . . . . . . . . 24
Section 2.8 Voluntary Conversion of Advances. . . . . . . . . 24
Section 2.9 Issuance of Letters of Credit . . . . . . . . . . 25
Section 2.10 Drawing and Reimbursement . . . . . . . . . . . . 25
Section 2.11 Obligations Absolute. . . . . . . . . . . . . . . 26
Section 2.12 Letter of Credit Fees and Charges . . . . . . . . 26
Section 2.13 Limits of Liability of Agent and Lenders. . . . . 27
Section 2.14 Payments. . . . . . . . . . . . . . . . . . . . . 27
Section 2.15 Computation of Interest and Fees. . . . . . . . . 28
Section 2.16 Payments on Non-Business Days . . . . . . . . . . 28
Section 2.17 Sharing of Payments, Etc. . . . . . . . . . . . . 28
Section 2.18 Evidence of Debt. . . . . . . . . . . . . . . . . 29
ARTICLE 3. YIELD PROTECTION. . . . . . . . . . . . . . . . . . . . .29
Section 3.1 Increased LIBOR Advance Costs . . . . . . . . . . 29
Section 3.2 Illegality. . . . . . . . . . . . . . . . . . . . 29
Section 3.3 Inadequacy of LIBOR . . . . . . . . . . . . . . . 30
Section 3.4 Increased Letter of Credit Costs. . . . . . . . . 30
Section 3.5 Capital Adequacy. . . . . . . . . . . . . . . . . 30
Section 3.6 Funding Losses. . . . . . . . . . . . . . . . . . 31
Section 3.7 Substitution of Lender. . . . . . . . . . . . . . 31
ARTICLE 4. CONDITIONS OF LENDING . . . . . . . . . . . . . . . . . .31
Section 4.1 Initial Advance or Letter of Credit . . . . . . . 31
Section 4.2 Advances. . . . . . . . . . . . . . . . . . . . . 34
Section 4.3 Letters of Credit . . . . . . . . . . . . . . . . 35
ARTICLE 5. REPRESENTATIONS AND WARRANTIES. . . . . . . . . . . . . .36
Section 5.1 Corporate Existence and Power . . . . . . . . . . 36
Section 5.2 Authorization . . . . . . . . . . . . . . . . . . 36
Section 5.3 Governmental Action . . . . . . . . . . . . . . . 37
Section 5.4 Binding Effect. . . . . . . . . . . . . . . . . . 37
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Section 5.5 Other Information . . . . . . . . . . . . . . . . 37
Section 5.6 Litigation. . . . . . . . . . . . . . . . . . . . 37
Section 5.7 Subsidiaries. . . . . . . . . . . . . . . . . . . 37
Section 5.8 Trademarks, Etc.. . . . . . . . . . . . . . . . . 37
Section 5.9 Fire, Etc.. . . . . . . . . . . . . . . . . . . . 37
Section 5.10 Burdensome Agreements . . . . . . . . . . . . . . 37
Section 5.11 Taxes . . . . . . . . . . . . . . . . . . . . . . 38
Section 5.12 Title to Properties . . . . . . . . . . . . . . . 38
Section 5.13 Ownership . . . . . . . . . . . . . . . . . . . . 38
ARTICLE 6. COVENANTS . . . . . . . . . . . . . . . . . . . . . . . .38
Section 6.1 Information . . . . . . . . . . . . . . . . . . . 38
Section 6.2 Audits. . . . . . . . . . . . . . . . . . . . . . 39
Section 6.3 Returns and Allowances. . . . . . . . . . . . . . 40
Section 6.4 Other Covenants . . . . . . . . . . . . . . . . . 40
Section 6.5 Performance of Material Contracts . . . . . . . . 40
Section 6.6 Cleanup Period. . . . . . . . . . . . . . . . . . 40
Section 6.7 Dividends, Etc. . . . . . . . . . . . . . . . . . 40
Section 6.8 Use of Advances and Letters of Credit . . . . . . 41
Section 6.9 Amendment, Etc. of Material Contracts . . . . . . 41
ARTICLE 7. EVENTS OF DEFAULT . . . . . . . . . . . . . . . . . . . .41
Section 7.1 Events of Default . . . . . . . . . . . . . . . . 41
ARTICLE 8. THE AGENT . . . . . . . . . . . . . . . . . . . . . . . .43
Section 8.1 Authorization and Action. . . . . . . . . . . . . 43
Section 8.2 Agent's Reliance, Etc.. . . . . . . . . . . . . . 43
Section 8.3 UBOC and Affiliates . . . . . . . . . . . . . . . 44
Section 8.4 Lender Credit Decision. . . . . . . . . . . . . . 44
Section 8.5 Indemnification . . . . . . . . . . . . . . . . . 44
Section 8.6 Successor Agent . . . . . . . . . . . . . . . . . 44
Section 8.7 Agent as Collateral Holder. . . . . . . . . . . . 45
ARTICLE 9. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . .46
Section 9.1 Amendments, Etc.. . . . . . . . . . . . . . . . . 46
Section 9.2 Notices, Etc. . . . . . . . . . . . . . . . . . . 46
Section 9.3 No Waiver; Remedies . . . . . . . . . . . . . . . 46
Section 9.4 Costs and Expenses. . . . . . . . . . . . . . . . 47
Section 9.5 Indemnification . . . . . . . . . . . . . . . . . 47
Section 9.6 Right of Setoff . . . . . . . . . . . . . . . . . 48
Section 9.7 Binding Effect. . . . . . . . . . . . . . . . . . 48
Section 9.8 Assignments and Participations. . . . . . . . . . 48
Section 9.9 Governing Law . . . . . . . . . . . . . . . . . . 50
Section 9.10 Headings. . . . . . . . . . . . . . . . . . . . . 50
Section 9.11 Execution in Counterparts . . . . . . . . . . . . 50
Section 9.12 Alternative Dispute Resolution. . . . . . . . . . 51
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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: Revolving Note
Exhibit B: Security Agreement
Exhibit C: Teletransmission Agreement
Exhibit D: Guaranty
Exhibit E: Stock Pledge Agreement
Exhibit F: Clawback Agreement
Exhibit G: Application and Agreement for Irrevocable Standby
Letter of Credit
Exhibit H: Borrowing Base Certificate
Exhibit I: Assignment and Acceptance
Exhibit J: Notice of Borrowing
Exhibit K: Notice of Conversion/Continuation
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REVOLVING CREDIT AGREEMENT
This Agreement, dated as of November 16, 1999, is entered into by (1)
FRONTIER OIL AND REFINING COMPANY, a Delaware corporation (the "Borrower"), (2)
the financial institutions listed on the signature pages hereof and each other
financial institution that becomes a party hereto pursuant to Section 9.8
(collectively the "Lenders"), (3) UNION BANK OF CALIFORNIA, N.A., a national
banking association, as Administrative Agent (in such capacity, the "Agent"),
Documentation Agent and Lead Arranger, and (4) PARIBAS, a French banking
corporation, as Syndication Agent and Lead Arranger.
ARTICLE 1.
INTERPRETATION AND DEFINITIONS
Section 1.1 Definitions. The terms set forth below, as used herein, shall
have the respective meanings set forth below.
"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 Security
Agreement).
"Acquisition Agreement" means the Asset Purchase and Sale Agreement dated as
of October 19, 1999 among Equilon, FEDRC and FOC.
"Advances" has the meaning set forth in Section 2.1.
"Affiliate" means, as to any Person, any other Person that, directly or
indirectly, controls, is controlled by or is under common control with such
Person or is a director or officer of such Person. For purposes of this
definition, the term "control" (including the terms "controlling," "controlled
by" and "under common control with") of a Person means the possession, direct or
indirect, of the power to vote 10% or more of the equity interests having
ordinary voting power for the election of directors of such Person or to direct
or cause the direction of the management and policies of such Person, whether
through the ownership of equity interests, by contract or otherwise.
"Applicable Base Rate Margin" means the applicable interest-rate margin
determined pursuant to the table set forth below, in accordance with the Pricing
Level in effect from time to time.
Pricing Level Margin
--------------- ---------------
Pricing Xxxxx 0 1.50% per annum
Pricing Xxxxx 0 1.75% per annum
Pricing Xxxxx 0 2.00% per annum
Pricing Xxxxx 0 2.25% per annum
Notwithstanding the foregoing, (a) if the exclusion of Investible Cash from the
calculation done at any time to determine the effective Pricing Level would
cause the effective Pricing Level to be more than one Pricing Level less
favorable for the Borrower than the Pricing Level determined by the inclusion of
Investible Cash in such calculation, then the effective Pricing Level shall be
the Pricing Level that is only one Pricing Level more favorable for the Borrower
than the Pricing Level determined by the exclusion of Investible Cash from such
calculation, and (b) during the period from and including the Closing Date to
but excluding the first anniversary thereof, the Applicable Base Rate Margin
shall be that specified for Pricing Xxxxx 0 unless Pricing Level 4 would
otherwise be in effect, in which case that specified for Pricing Level 4.
"Applicable Commitment Fee Rate" means the applicable rate determined
pursuant to the table set forth below, in accordance with the Pricing Level in
effect from time to time.
Pricing Level Rate
--------------- ----------------
Pricing Xxxxx 0 0.375% per annum
Pricing Xxxxx 0 0.375% per annum
Pricing Xxxxx 0 0.500% per annum
Pricing Xxxxx 0 0.500% per annum
Notwithstanding the foregoing, (a) if the exclusion of Investible Cash from the
calculation done at any time to determine the effective Pricing Level would
cause the effective Pricing Level to be more than one Pricing Level less
favorable for the Borrower than the Pricing Level determined by the inclusion of
Investible Cash in such calculation, then the effective Pricing Level shall be
the Pricing Level that is only one Pricing Level more favorable for the Borrower
than the Pricing Level determined by the exclusion of Investible Cash from such
calculation, and (b) during the period from and including the Closing Date to
but excluding the first anniversary thereof, the Applicable Commitment Fee Rate
shall be that specified for Pricing Xxxxx 0 unless Pricing Level 4 would
otherwise be in effect, in which case that specified for Pricing Level 4.
"Applicable LIBOR Margin" means the applicable interest-rate margin
determined pursuant to the table set forth below, in accordance with the Pricing
Level in effect from time to time.
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Pricing Level Margin
--------------- ---------------
Pricing Xxxxx 0 1.50% per annum
Pricing Xxxxx 0 1.75% per annum
Pricing Xxxxx 0 2.00% per annum
Pricing Xxxxx 0 2.25% per annum
Notwithstanding the foregoing, (a) if the exclusion of Investible Cash from the
calculation done at any time to determine the effective Pricing Level would
cause the effective Pricing Level to be more than one Pricing Level less
favorable for the Borrower than the Pricing Level determined by the inclusion of
Investible Cash in such calculation, then the effective Pricing Level shall be
the Pricing Level that is only one Pricing Level more favorable for the Borrower
than the Pricing Level determined by the exclusion of Investible Cash from such
calculation, and (b) during the period from and including the Closing Date to
but excluding the first anniversary thereof, the Applicable LIBOR Margin shall
be that specified for Pricing Xxxxx 0 unless Pricing Level 4 would otherwise be
in effect, in which case that specified for Pricing Level 4.
"Applicable LOC Fee Rate" means the applicable rate determined pursuant to
the table set forth below, in accordance with the Pricing Level in effect from
time to time.
Pricing Level Rate
--------------- ----------------
Pricing Xxxxx 0 1.125% per annum
Pricing Xxxxx 0 1.375% per annum
Pricing Xxxxx 0 1.625% per annum
Pricing Xxxxx 0 1.875% per annum
Notwithstanding the foregoing, (a) if the exclusion of Investible Cash from the
calculation done at any time to determine the effective Pricing Level would
cause the effective Pricing Level to be more than one Pricing Level less
favorable for the Borrower than the Pricing Level determined by the inclusion of
Investible Cash in such calculation, then the effective Pricing Level shall be
the Pricing Level that is only one Pricing Level more favorable for the Borrower
than the Pricing Level determined by the exclusion of Investible Cash from such
calculation, and (b) during the period from and including the Closing Date to
but excluding the first anniversary thereof, the Applicable LOC Fee Rate shall
be that specified for Pricing Xxxxx 0 unless Pricing Level 4 would otherwise be
in effect, in which case that specified for Pricing Level 4.
"Applicable Reference Rate Margin" means the applicable interest-rate margin
determined pursuant to the table set forth below, in accordance with the Pricing
Level in effect from time to time.
Pricing Level Margin
--------------- ---------------
Pricing Xxxxx 0 0.25% per annum
Pricing Xxxxx 0 0.50% per annum
Pricing Xxxxx 0 0.75% per annum
Pricing Xxxxx 0 1.00% per annum
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Notwithstanding the foregoing, (a) if the exclusion of Investible Cash from the
calculation done at any time to determine the effective Pricing Level would
cause the effective Pricing Level to be more than one Pricing Level less
favorable for the Borrower than the Pricing Level determined by the inclusion of
Investible Cash in such calculation, then the effective Pricing Level shall be
the Pricing Level that is only one Pricing Level more favorable for the Borrower
than the Pricing Level determined by the exclusion of Investible Cash from such
calculation, and (b) during the period from and including the Closing Date to
but excluding the first anniversary thereof, the Applicable Reference Rate
Margin shall be that specified for Pricing Xxxxx 0 unless Pricing Level 4 would
otherwise be in effect, in which case that specified for Pricing Level 4.
"Assignment and Acceptance" means an Assignment and Acceptance substantially
in the form of Exhibit I.
"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.
"Base Rate" means, for any Interest Period for each Base Rate Advance that is
part of the same Borrowing, the rate of interest per annum equal to the sum of
(a) the Term Federal Funds Rate for such Interest Period plus (b) 0.5% per
annum.
"Base Rate Advance" means, at any time, any Advance that bears interest as
provided in Section 2.6(a)(iii).
"Borrowing" means a borrowing by the Borrower consisting of Advances of the
same Type made by the Lenders on the same day.
"Borrowing Base" means, at any time of determination, the difference between
(a) the sum of:
(i) 95% of the amount of Eligible Accounts backed by letters of credit
issued by 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 outstanding at any time does not
exceed the applicable amount set forth for such bank on Schedule 1 (provided,
however, that the Agent reserves the right in its sole discretion to make
exceptions to the foregoing by notification of the same to the Borrower in
writing);
(ii) 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 Lenders through the Agent have otherwise given their prior written
approval, which listing or approval may be withdrawn at any time by the Majority
Lenders 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);
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(iii) 85% of Eligible Accounts that do not fall within clause (i) or (ii)
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 clauses (i) and (ii) above and in this clause (iii) for the purpose of
determining the aggregate amount of Eligible Accounts to be included in the
Borrowing Base, shall not exceed $600,000);
(iv) 80% of positive Eligible Exchange Balances (provided, however, that
the aggregate amount of Eligible Exchange Balances, before making the
calculation set forth in this clause (iv) for the purpose of determining the
aggregate amount of Eligible Exchange Balances to be included in the Borrowing
Base Certificate, shall not exceed $8,500,000);
(v) 70% of Eligible Inventory (subject to the proviso in clause (vi)
below); and
(vi) 70% of Eligible Prepaid Crude Purchases (provided, however, that (A)
the aggregate amount of Eligible Prepaid Crude Purchases, before making the
calculation described in this clause (vi) for the purpose of determining the
aggregate amount of Eligible Prepaid Crude Purchases to be included in the
Borrowing Base, shall not exceed $18,000,000 and (B) the aggregate amount of
Eligible Inventory and Eligible Prepaid Crude Purchases, before making the
calculations described in clause (v) above and in this clause (vi) for the
purpose of determining the aggregate amount of Eligible Inventory and Eligible
Prepaid Crude Purchases to be included in the Borrowing Base, shall not exceed
$125,000,000);
minus (b) the amount, if any, by which the aggregate amount charged for federal
excise taxes on motor fuels that is included in the sum of the amounts
determined pursuant to clauses (a)(i), (ii) and (iii) above exceeds the lesser
of (i) $3,000,000 and (ii) 5% of such sum.
"Borrowing Base Certificate" means a certificate of the Borrower, together
with attached schedules, substantially in the form of Exhibit H.
"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 Advances, on which dealings are carried on in the London interbank
market.
"Calculation Period" means, for purposes of calculating any financial measure
with respect to FOC and its Subsidiaries, any period of four successive fiscal
quarters of FOC ending on the last day of a fiscal quarter of FOC.
"Capitalized Leases" has the meaning set forth in clause (e) of the
definition of Debt in this Section 1.1.
"Cash Equivalents" means investments having a maturity of not greater than 3
months from the date of acquisition thereof in (a) obligations issued or
unconditionally guaranteed by the United States of America or any agency
thereof, (b) certificates of deposit of any commercial bank organized under the
laws of the United States of America or any state thereof and having combined
capital and surplus of at least $1 billion, (c) commercial paper with a rating
of at least Prime-1 by Xxxxx'x Investors Service, Inc. or A-1 by Standard &
Poor's Ratings Group or (d) other investments agreed to from time to time
between the Borrower and the Agent.
- 5 -
"Cheyenne Refinery" means FRI's crude oil refinery in Cheyenne, Wyoming.
"Claim" means any claim, cause of action, action, dispute or controversy
between any of the Credit Parties, on the one hand, and the Agent and/or the
Lenders, on the other hand, whether sounding in contract, tort or otherwise,
that arises out of or relates to (a) any of the Credit Documents, (b) any
negotiations or communications relating to any of the Credit Documents, whether
or not incorporated into the Credit Documents or any indebtedness evidenced
thereby, or (c) any alleged agreements, promises, representations or
transactions in connection with any of the foregoing.
"Clawback Agreement" means the Clawback Agreement executed by FOC in favor of
the Agent substantially in the form of Exhibit F.
"Closing Date" means the date on which the first Advance is made, or Letter
of Credit is issued, pursuant to this Agreement.
"Cogen Lease" means the Sub-Sublease Agreement (Cogeneration Facility) dated
as of October 19, 1999 between FEDRC and Equilon.
"Collateral" means, collectively, (a) the "Collateral" as defined in the
Security Agreement and (b) 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 November 16, 2002; provided, however,
that, upon (a) written request by the Borrower not later than the date that is 1
year before the Commitment Termination Date in effect from time to time and (b)
written notice of extension of the Commitment Termination Date by the Agent to
the Borrower, the Commitment Termination Date may be extended from time to time
by the Agent and the Lenders, in their sole and absolute discretion, for up to
an additional year.
"Convert," "Conversion" and "Converted" each refer to a conversion of
Advances of one Type into Advances of another Type pursuant to Section 2.8, 3.2
or 3.3.
"Credit Documents" means this Agreement, the Notes, the Security Agreement,
the Teletransmission Agreement, the Guaranty, the Stock Pledge Agreement, the
Clawback Agreement, any Letter of Credit Requests that are executed by the
Borrower from time to time, any Assignments and Acceptances that are executed
from time to time, the FOC Demand Note, any "Term Notes" (as defined in the
Security Agreement) that are executed by FOC from time to time, the Fee Letters
and the Letters of Credit.
- 6 -
"Credit Parties" means the Borrower, FOC, FHI, FRMI, FRI, FEDRC and FPI.
"Crude Supply Agreement" means the Foreign Crude Supply Agreement, ETCo
Xxxxxxxx Xx. XXX00000, dated October 19, 1999 between the Borrower and Equiva.
"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 a 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 of Default or 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).
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"El Dorado Refinery" means the crude oil refinery in El Dorado, Kansas being
acquired by FEDRC from Equilon.
"Eligible Accounts" means those Accounts of the Borrower that (a) are within
60 days of the date of the related invoice, (b) are less than 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 of America or any department, agency or instrumentality of the United
States of America; 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 a state of the
United States of America or a county, city, town, municipality or other division
of any 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 an Affiliate of
the Borrower;
(vii) Accounts to whose account debtor the Borrower is or is to become
liable, but only if such liability does not relate to any such Account and 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 10% (or, in the case of Equiva or 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;
- 8 -
(ix) Accounts not denominated in United States dollars;
(x) Accounts with respect to which an invoice has not been sent within 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 8 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 (A) 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 Lenders in their sole
discretion, issued by a bank satisfactory to the Majority Lenders in their sole
discretion, (B) 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 Lenders in their sole discretion and (C)
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).
- 9 -
"Eligible Exchange Balances" means the aggregate amount of all of the
Borrower's positive Exchange Balances with other Persons, after deducting
therefrom (a) the amount equal to the sum of the values of 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
its 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
principles), of like petroleum products for the previous month and (ii) the
fair-market value of like petroleum products as determined in accordance with
the methods prescribed in Schedule 3, (b) the amount of all discounts,
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 Exchange Balances owing by any Affiliate of the
Borrower; provided, however, that Eligible Exchange Balances shall not include
any Exchange Balance with respect to which: (i) the Agent does not have a
perfected first-priority security interest; (ii) any representation, warranty or
covenant contained in this Agreement or any other Credit Document has been
breached; (iii) 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 (iv) any event of a type
described in Section 7.1(e) has occurred with respect to the customer or trading
partner, or the customer or trading partner has suspended 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
warehousemen, securing only amounts due to such carriers, transporters 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 Lenders 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).
"Eligible Prepaid Crude Purchases" means the aggregate amount of all of the
Borrower's Prepaid Crude Purchases, after deducting therefrom any amounts
payable by the Borrower to Equiva in respect of such Prepaid Crude Purchases or
otherwise; provided, however, that Eligible Prepaid Crude Purchases shall not
include any Prepaid Crude Purchase with respect to which: (a) the Agent does
not have a perfected first-priority security interest; (b) any representation,
warranty or covenant contained in this Agreement or any other Credit Document
has been breached; (c) Equiva has disputed liability or made any claim to the
Borrower, other than for a minimal adjustment in the ordinary course of business
and in accordance with regular commercial practice; (d) during the period of the
existence of such Prepaid Crude Purchase, any event of a type described in
Section 7.1(e) has occurred with respect to Equiva, or Equiva has suspended
normal business operations or (d) Equilon and Motiva Enterprises LLC, a Delaware
limited liability company ("Motiva"), are not jointly and severally liable in a
manner acceptable to the Agent (provided that the condition that Equilon and
Motiva be jointly and severally liable for such Prepaid Crude Purchase shall be
deemed to be met in any event only if and so long as both Equilon and Motiva
maintain commercial paper ratings of at least A-1 from Xxxxx'x Investors
Service, Inc. and at least P-1 from Standard & Poor's Ratings Group).
- 10 -
"ENSR" means ENSR Consulting and Engineering.
"Environmental Law" means any Governmental Rule relating to pollution or
protection of the environment or any natural resource, to any Hazardous Material
or to health or safety, including any Governmental Rule relating to the use,
handling, transportation, treatment, storage, disposal, release or discharge of
any Hazardous Material.
"Environmental Permit" means any Governmental Action required under any
Environmental Law.
"Environmental Proceeding" means any action, suit, written demand, demand
letter, claim, notice of noncompliance or violation, notice of liability or
potential liability, investigation, proceeding, consent order or consent
agreement relating in any way to any Environmental Law, any Environmental Permit
or any Hazardous Material or arising from alleged injury or threat to health,
safety or the environment, including (a) by any Governmental Person for
enforcement, cleanup, removal, response, remedial or other actions or damages
and (b) by any Person for damages, contribution, indemnification, cost recovery,
compensation or injunctive relief.
"Equilon" means Equilon Enterprises LLC, a Delaware limited liability
company.
"Equiva" means Equiva Trading Company, a Delaware general partnership.
"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 Balance" means, with respect to any Person (other than any
Affiliate of the Borrower), the amount equal to the sum of the values of 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 such Person, the value of such petroleum
products 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 of like petroleum
products as determined in accordance with the methods prescribed in Schedule 3.
- 11 -
"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.
"FEDRC" means Frontier El Dorado Refining Company, a Delaware corporation
that is wholly owned by FRMI.
"FEDRC Processing Agreement" means the Processing Agreement dated as of
November 16, 1999 between the Borrower and FEDRC.
"Fee Letters" means (a) the letter agreement dated November 16, 1999 between
the Borrower and UBOC concerning fees payable by the Borrower to UBOC for its
own account with respect to this Agreement and (b) the letter agreement dated
November 16, 1999 between the Borrower and Paribas concerning fees payable by
the Borrower to Paribas for its own account with respect to this Agreement.
"FHI" means Frontier Holdings Inc., a Delaware corporation that is wholly
owned by FOC.
"FOC" means Frontier Oil Corporation, a Wyoming corporation.
"FOC Demand Note" means (a) the Eighth Amended and Restated Demand Promissory
Note dated November 16, 1999, in the face amount of $20,000,000, issued by FOC
in favor of the Borrower and (b) all restatements, replacements and extensions
of such Note.
"FOC EBITDA" means, for FOC and its consolidated Subsidiaries with respect to
any fiscal period, net income (or net loss) plus the sum of (a) net interest
expense, (b) income tax expense, (c) depreciation expense, (d) amortization
expense and (e) noncash write-downs or write-offs of assets, less the sum of (a)
net extraordinary gains included in net income and (b) net gains on the sale of
assets other than asset sales in the ordinary course of business.
"FOC Funded Debt" means, with respect to FOC and its Subsidiaries on a
consolidated basis, (a) all Debt thereof for borrowed money, including the Debt
of the Borrower hereunder and the Debt incurred by FOC pursuant to the FOC Note
Offering, plus (b) the principal portion of all Capitalized Leases of FOC and
its Subsidiaries plus (c) all Debt of any type described in clause (a) or (b)
above that is guaranteed directly or indirectly by FOC or any Subsidiary or that
is in effect guaranteed by FOC or any Subsidiary pursuant to an agreement of any
type described in clause (i) of the definition of "Debt" in this Section 1.1.
"FOC Note Offering" means the offering by FOC pursuant to the Prospectus of
at least $190,000,000 in principal amount of its Senior Notes Due 2009.
"FPI" means Frontier Pipeline Inc., a Delaware corporation that is wholly
owned by FRMI.
- 12 -
"FRI" means Frontier Refining Inc., a Delaware corporation that is wholly
owned by FRMI.
"FRI Processing Agreement" means the Processing Agreement dated as of June
30, 1998 between the Borrower and FRI.
"FRMI" means Frontier Refining & Marketing Inc., a Delaware corporation that
is wholly owned by FHI.
"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, injunction, decree, determination,
directive, award, guideline, request, policy or similar form of decision of any
Governmental Person or arbitrator.
"Guarantors" means FHI, FRMI, FRI, FEDRC and FPI.
"Guaranty" means the Guaranty executed by the Guarantors in favor of the
Lenders and the Agent substantially in the form of Exhibit D.
"Hazardous Material" means any substance or material that is described as a
toxic or hazardous substance, waste or material or as a pollutant, contaminant
or infectious waste, or words of similar import, in any Environmental Law,
including asbestos, petroleum (including crude oil or any fraction thereof,
natural gas, natural-gas liquid, liquefied natural gas or synthetic gas usable
for fuel, or any mixture of any of the foregoing), polychlorinated biphenyls,
urea formaldehyde, radon gas, radioactive matter, and any chemical that may
cause cancer or reproductive toxicity.
"Indenture" means the Indenture dated as of November 12, 1999 between FOC and
Chase Bank of Texas, National Association, as Trustee.
"Interest Period' means, with respect to each LIBOR Advance or Base Rate
Advance making up part of the same Borrowing, the period commencing on the date
of such Advance or the date of the Conversion of any Advance into such an
Advance 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 for LIBOR Advances shall
be any number of days between 7 days and 1 month, or 2, 3 or 6 whole months, as
the Borrower may select upon notice (by means of a Notice of Borrowing or a
Notice of Conversion/Continuation) received by the Agent not later than 11:00
a.m., Los Angeles time, on the third Business Day before the first day of such
Interest Period, and the duration of each Interest Period for Base Rate Advances
shall be any number of days between 1 day and 7 days, as the Borrower may select
upon notice (by means of a Notice of Borrowing or a Notice of
Conversion/Continuation) received by the Agent not later than 1:30 p.m., Los
Angeles time, on the Business Day immediately preceding the first day of such
Interest Period; provided, however, that
- 13 -
(a) Interest Periods commencing on the same date for Advances 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, if such Interest
Period relates to LIBOR Advances, 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) not more than 5 different Interest Periods may be outstanding at any
one time; and
(d) no Interest Period may 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.
"Investible Cash" means, at any time of determination, the smallest aggregate
amount of cash and Cash Equivalents held by FOC on any day during the most
recently completed fiscal quarter with respect to which FOC has delivered
financial statements to the Lenders pursuant to Section 7(j) of the Clawback
Agreement.
"Issuing Bank" means UBOC in its capacity as issuer of Letters of Credit
hereunder. Each reference in this Agreement to a Lender or the Lenders shall be
deemed to include the Issuing Bank.
"Lead Arrangers" means UBOC and Paribas in their capacity as Lead Arrangers
of the credit facilities provided under this Agreement.
- 14 -
"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 Issuing Bank's standard form of Application and
Agreement for Irrevocable Standby Letter of Credit, the current form of which is
attached hereto as Exhibit G, and containing terms and conditions satisfactory
to the Agent in its sole discretion.
"Letter of Credit Usage" means, at any time of determination, the sum of:
(a) 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, 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, 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, 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 date of payment for
such Ratable Crude, inclusive, 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 date 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, 20% of the Letter of Credit
Amount of such Letter of Credit.
Upon not less than 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 Section 2.1.
- 15 -
"LIBOR Advance" means, at any time, any Advance that bears interest as
provided in Section 2.6(a)(ii).
"LIBOR" means, for any Interest Period for each LIBOR Advance 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 UBOC outside the United States
2 Business Days before the first day of such Interest Period, in an amount
comparable to the amount of UBOC's LIBOR Advance for such Interest Period and
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
Advance that is part of the same Borrowing, the reserve percentage applicable on
any day not more than 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, supplemental or other marginal reserve requirement)
for UBOC 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 Advances
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.
"Lockbox Account" has the meaning set forth in the Security Agreement.
"Majority Lenders" means, at any time, Lenders (one of which shall be the
Agent) owed at least 51% of the Obligations then outstanding or, if no
Obligations are then outstanding, Lenders (one of which shall be the Agent)
having at least 51% of the Commitments.
"Material Contracts" means the FRI Processing Agreement, the FEDRC Processing
Agreement, the Crude Supply Agreement, the Offtake Agreement, the Operating
Agreement and the Cogen Lease.
"Note" means a Revolving Note of the Borrower payable to the order of a
Lender, substantially in the form of Exhibit A, evidencing the indebtedness of
the Borrower to such Lender resulting from the Advances made by such Lender from
time to time.
"Notice of Borrowing" has the meaning set forth in Section 2.4(a).
"Notice of Conversion/Continuation" has the meaning set forth in Section 2.8.
- 16 -
"Obligations" means all payment obligations of the Borrower 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.
"Offtake Agreement" means the Frontier Products Offtake Agreement, El Dorado
Refinery, dated as of October 19, 1999 between the Borrower and Equiva.
"Old Credit Agreement" means the Amended and Restated Revolving Credit and
Letter of Credit Agreement dated as of June 30, 1997 among the Borrower, each of
UBOC, Paribas and Bank of Scotland, and UBOC, as agent for such banks.
"Operating Agreement" means the Operating Agreement (Conoco Pipe Line Company
and Frontier Pipeline Inc. Joint Interest Pipeline System) dated September 13,
1989 between Conoco Pipe Line Company and FPI, as amended to the date hereof.
"Paribas" means Paribas, a French banking corporation, in its individual
capacity.
"Person" means an individual, a corporation, a limited liability company, a
partnership, an association, a business trust or any other entity or
organization, including any Governmental Person.
"Prepaid Crude Purchases" means the amount equal to the sum of the values of
all rights to receive crude oil that the Borrower acquires, possesses or owns
whenever the Borrower purchases crude oil in the ordinary course of business
from Equiva, the value thereof being the lesser of (a) the cost to the Borrower
for such crude oil, as set forth in the books and records of the Borrower, and
(b) the fair-market value of such crude oil, as determined in accordance with
the methods prescribed in Schedule 3.
"Pricing Level" means Pricing Xxxxx 0, Xxxxxxx Xxxxx 0, Xxxxxxx Xxxxx 3 or
Pricing Level 4.
"Pricing Level 1" means the Pricing Level that applies to each Advance
(whether then outstanding or thereafter made) on and after, to each Letter of
Credit (whether then outstanding or thereafter issued) on and after, and to each
Commitment on and after, the date of receipt by UBOC of a schedule of
computations referred to in Section 7(j)(i) or (ii) of the Clawback Agreement if
the ratio of (a) the difference between FOC Funded Debt and Investible Cash as
of the end of the fiscal quarter ended immediately before that date to (b) FOC
EBITDA for the Calculation Period ended on the last day of that fiscal quarter
was less than 2.0:1.0, as demonstrated by that schedule.
- 17 -
"Pricing Level 2" means the Pricing Level that applies to each Advance
(whether then outstanding or thereafter made) on and after, to each Letter of
Credit (whether then outstanding or thereafter issued) on and after, and to each
Commitment on and after, the date of receipt by UBOC of a schedule of
computations referred to in Section 7(j)(i) or (ii) of the Clawback Agreement if
the ratio of (a) the difference between FOC Funded Debt and Investible Cash as
of the end of the fiscal quarter ended immediately before that date to (b) FOC
EBITDA for the Calculation Period ended on the last day of that fiscal quarter
was equal to or greater than 2.0:1.0 but less than 2.5:1.0, as demonstrated by
that schedule.
"Pricing Level 3" means the Pricing Level that applies to each Advance
(whether then outstanding or thereafter made) on and after, to each Letter of
Credit (whether then outstanding or thereafter issued) on and after, and to each
Commitment on and after, the date of receipt by UBOC of a schedule of
computations referred to in Section 7(j)(i) or (ii) of the Clawback Agreement if
the ratio of (a) the difference between FOC Funded Debt and Investible Cash as
of the end of the fiscal quarter ended immediately before that date to (b) FOC
EBITDA for the Calculation Period ended on the last day of that fiscal quarter
was equal to or greater than 2.5:1.0 but less than 3.0:1.0, as demonstrated by
that schedule.
"Pricing Level 4" means the Pricing Level that applies to each Advance
(whether then outstanding or thereafter made) on and after, to each Letter of
Credit (whether then outstanding or thereafter issued) on and after, and to each
Commitment on and after, the date of receipt by UBOC of a schedule of
computations referred to in Section 7(j)(i) or (ii) of the Clawback Agreement if
the ratio of (a) the difference between FOC Funded Debt and Investible Cash as
of the end of the fiscal quarter ended immediately before that date to (b) FOC
EBITDA for the Calculation Period ended on the last day of that fiscal quarter
was equal to or greater than 3.0:1.0, as demonstrated by that schedule.
"Prospectus" means the Prospectus dated November 9, 1999 relating to the FOC
Note Offering, as amended to include pricing information with respect to the
notes being offered.
"Ratable Crude" means crude oil (a) delivered to the Borrower at either
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 one of the Refineries.
"Reference" means a judicial reference conducted pursuant to any Credit
Document in accordance with the law of the State of California, as in effect at
the time the referee is selected pursuant to the judicial reference provision
contained in such Credit Document.
"Reference Rate" means the variable rate of interest per annum established by
UBOC from time to time as its "reference rate." Such "reference rate" is set by
UBOC as a general reference rate of interest, taking into account such factors
as UBOC may deem appropriate, it being understood that many of UBOC'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 UBOC 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."
- 18 -
"Reference Rate Advance" means, at any time, any Advance that bears interest
as provided in Section 2.6(a)(i).
"Refineries" means the Cheyenne Refinery and the El Dorado Refinery.
"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 executed by the Borrower in
favor of the Agent substantially in the form of Exhibit B.
"Stock Pledge Agreement" means the Stock Pledge Agreement executed by FRMI in
favor of the Agent substantially in the form of Exhibit E.
"Subsidiary" means, as to any Person, any corporation, limited liability
company, partnership, joint venture or other entity of which (a) a majority of
the outstanding capital stock or other ownership interests having ordinary
voting power to elect a majority of the board of directors or Persons performing
similar functions (irrespective of whether at the time other such capital stock
or interests have or might have voting power upon the occurrence of a
contingency) or (b) a majority of the interests in the capital or profits of
which 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 Subsidiaries. Unless otherwise specified herein, "Subsidiary" means a
Subsidiary of FOC.
"Super-Majority Lenders" means, at any time, Lenders (one of which shall be
the Agent) owed at least 75% of the Obligations then outstanding or, if no
Obligations are then outstanding, Lenders (one of which shall be the Agent)
having at least 75% of the Commitments.
"Teletransmission Agreement" means the Teletransmission Agreement between the
Borrower and UBOC, as Issuing Bank, substantially in the form of Exhibit C.
"Term Federal Funds Rate" means, for any Interest Period for each Base Rate
Advance that is part of the same Borrowing, the rate per annum at which UBOC is
offered federal funds in the term federal funds market as of 10:00 a.m., Los
Angeles time, on the first day of such Interest Period, in an amount comparable
to the amount of UBOC's Base Rate Advance for such Interest Period and for a
term coinciding with such Interest Period.
"Type" refers to the distinction among Reference Rate Advances, LIBOR
Advances and Base Rate Advances."
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"UBOC" means Union Bank of California, N.A. in its individual capacity.
"Year 2000 Problem" means the inability of computers, as well as embedded
microchips in noncomputing devices, to properly perform date-sensitive functions
with respect to certain dates before and after December 31, 1999.
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 and FRMI referred to in Section
6(e) of the Clawback Agreement and Section 6(f) of the Guaranty, respectively.
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 consolidating, 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
provided; references to agreements and other contractual 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 Lender 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 Commitment Termination Date by making funded advances to the
Borrower (the "Advances") 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 Lender's name on the signature
pages hereof or, if such Lender has entered into one or more Assignments and
Acceptances, set forth for such Lender 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 Advances 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
$175,000,000 at any time; further provided, however, that the sum of (i) the
aggregate principal amount of all Advances 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 further
provided, however, that the aggregate principal amount of all Advances
outstanding at any time shall not exceed $100,000,000 (said agreement by each
Lender, subject to the foregoing provisos, herein called such Lender's
"Commitment"). Within the limits of each Lender'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 Advances 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.
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(b) Reduction of Commitments. The Borrower shall have the right, upon at
least 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
Lenders; provided, however, that each partial reduction shall be in the
aggregate amount of $5,000,000 or an integral multiple thereof.
Section 2.2 Fees.
(a) The Borrower will pay to the Agent for the account of the Lenders, at the
Applicable Commitment Fee Rate, a commitment fee on the actual daily amount by
which $175,000,000 exceeds the sum of (i) the aggregate face amount of all
Letters of Credit outstanding plus (ii) the aggregate amount of all Advances
outstanding, for each Lender from the date on which such Lender becomes a party
hereto until the Commitment Termination Date. The commitment fee payable
hereunder shall be payable quarterly in arrears on the last Business Day of each
March, June, September and December, commencing on December 31, 1999, and on the
Commitment Termination Date.
(b) The Borrower will pay to the Agent and Paribas, for their respective
accounts, such fees as provided in their respective Fee Letters.
Section 2.3 Mandatory Prepayment of Advances and Pledge of Cash
Collateral. If at any time (a) the sum of (i) the aggregate principal amount of
all Advances 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 (a) the sum of (i) the aggregate principal amount of all Advances
outstanding, (ii) the Letter of Credit Usage and (iii) the aggregate amount of
unreimbursed drawings under all Letters of Credit exceeds (b) the Borrowing
Base, then, in either case, the Borrower will immediately, without notice or
request by the Agent or the Lenders, prepay the Advances (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. ADVANCES
Section 2.4 Making Advances.
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(a) Each Borrowing shall be made on notice, given (i) with respect to any
Borrowing consisting of Reference Rate Advances or Base Rate Advances, 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
Advances, 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 Lender prompt notice thereof by
telecopier. Each such notice of a Borrowing shall be in writing in the form of
Exhibit J (a "Notice of Borrowing"), or by telephone confirmed promptly in
writing, by an Authorized Officer, specifying (A) the requested date of such
Borrowing (which shall be a Business Day), (B) the requested Type of Advances
making up such Borrowing, (C) the requested aggregate amount of such Borrowing,
(D) in the case of a Borrowing consisting of LIBOR Advances or Base Rate
Advances, the requested initial Interest Period for such Advances and (E) the
fact that the statements set forth in Section 4.2(b) are true as of the date of
such Borrowing. Each Lender shall, before 11:00 a.m., Los Angeles time, on the
day of such Borrowing, make available to the Agent at its address referred to in
Section 9.2, in immediately available funds, such Lender'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. Notwithstanding the
provisions of the first sentence of this Section 2.4(a), if the Borrower gives
the Agent notice, by telephone confirmed promptly by telecopier, of a Borrowing
consisting of Reference Rate Advances by 8:30 a.m., Los Angeles time, or of a
Borrowing consisting of Base Rate Advances by 7:00 a.m., Los Angeles time, in
either case on the day of the proposed Borrowing, the Agent and the Lenders will
use their best efforts (but shall not be obligated) to make such Advances
available on the day on which such notice is given; provided, however, that the
Agent and the Lenders 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 will indemnify each Lender against any loss, cost or
expense incurred by such Lender 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 Lender
to fund the Advance to be made by such Lender as part of such Borrowing when
such Advance, as a result of such failure, is not made on such date.
(c) Unless the Agent receives notice from a Lender before the date of any
Borrowing that such Lender will not make available to the Agent such Lender's
ratable portion of such Borrowing, the Agent may assume that such Lender 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 Lender has not made such ratable portion
available to the Agent, such Lender 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 Advances making
up such Borrowing and (ii) in the case of such Lender, the Federal Funds Rate.
If such Lender repays to the Agent such corresponding amount, such amount so
repaid shall constitute such Lender's Advance as part of such Borrowing for
purposes of this Agreement.
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(d) The failure of any Lender to make the Advance to be made by it as part of
any Borrowing shall not relieve any other Lender of its obligation, if any,
hereunder to make its Advance on the date of such Borrowing, but no Lender shall
be responsible for the failure of any other Lender to make the Advance to be
made by such other Lender on the date of any Borrowing.
Section 2.5 Repayment. On the Commitment Termination Date, the Borrower
will repay to the Agent for the account of the Lenders the outstanding principal
amount of the Advances.
Section 2.6 Interest.
(a) The Borrower will pay interest on the unpaid principal amount of each
Advance, from the date of such Advance until such principal amount has been paid
in full, (i) during such periods as such Advance is a Reference Rate Advance, at
a rate per annum equal at all times to the sum of the Reference Rate in effect
from time to time plus the Applicable Reference Rate Margin, payable monthly in
arrears on the last Business Day of each calendar month during such periods and
on the Commitment Termination Date, (ii) during such periods as such Advance is
a LIBOR Advance, at a rate per annum equal at all times during each Interest
Period for such Advance to the sum of LIBOR for such Interest Period for such
Advance plus the Applicable LIBOR Margin, payable on the last day of such
Interest Period, and (iii) during such periods as such Advance is a Base Rate
Advance, at a rate per annum equal at all times during each Interest Period for
such Advance to the sum of the Base Rate for such Interest Period for such
Advance plus the Applicable Base Rate Margin, payable on the last day of such
Interest Period.
(b) Any amount of principal of any Advance that is not paid when due (whether
at stated maturity, by required prepayment, 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 otherwise applicable interest rate plus 3.00% per
annum.
(c) The Agent will give prompt notice to the Borrower and the Lenders 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 Advances or Base Rate Advances 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 Lenders, and such Advances shall
automatically, on the last day of the then existing Interest Period therefor,
Convert into Reference Rate Advances.
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Section 2.7 Prepayments.
(a) The Borrower may on any Business Day, in the case of Reference Rate
Advances or Base Rate Advances upon prior written notice not later than 9:00
a.m., Los Angeles time, on the day of any prepayment of such Advances, and in
the case of LIBOR Advances upon at least 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 will, prepay the
outstanding principal amounts of the Advances making up a Borrowing in whole or
ratably in part, together, in the case of LIBOR Advances or Base Rate Advances,
with accrued interest to the date of such prepayment on the principal amount
prepaid; provided, however, that any prepayment of LIBOR Advances or Base Rate
Advances shall be made on, and only on, the last day of an Interest Period for
such Advances; and further provided, however, that each partial prepayment shall
be in the aggregate principal amount of $300,000 or an integral multiple of
$100,000 in excess thereof.
(b) If at any time the aggregate principal amount of all Advances outstanding
exceeds $100,000,000, then the Borrower will immediately, without notice or
request by the Lenders, prepay the outstanding principal amounts of the Advances
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 Conversion of Advances.
(a) The Borrower may on any Business Day, upon prior written notice in the
form of Exhibit K (a "Notice of Conversion/Continuation") signed by an
Authorized Officer and given to the Agent (a) with respect to any Conversion to
Reference Rate Advances or Base Rate Advances, not later than 11:00 a.m., Los
Angeles time, on the Business Day immediately preceding the date of the proposed
Conversion and (b) with respect to any Conversion to LIBOR Advances, 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 Advances of one Type making up the same Borrowing into Advances
of another Type; provided, however, that any Conversion of LIBOR Advances or
Base Rate Advances into Advances of another Type shall be made on, and only on,
the last day of an Interest Period for such LIBOR Advances or Base Rate
Advances. Each Notice of Conversion shall, within the restrictions specified
above, specify (i) the date of such Conversion, (ii) the Advances to be
Converted and (iii) if such Conversion is into LIBOR Advances or Base Rate
Advances, the duration of the initial Interest Period for such Advances. Each
Notice of Conversion shall be irrevocable and binding on the Borrower. The
Agent shall give each Lender prompt notice by telecopier of each Notice of
Conversion.
(b) On any date on which the aggregate unpaid principal amount of LIBOR
Advances composing any Borrowing is reduced, by payment or prepayment or
otherwise, to less than $1,000,000, such Advances shall automatically Convert
into Reference Rate Advances. Upon the occurrence and during the continuation of
any Default, (A) each LIBOR Advance and Base Rate Advance shall automatically,
on the last day of the then existing Interest Period therefor, Convert into a
Reference Rate Advance, and (B) the obligation of the Lenders to make, or to
Convert Advances into, LIBOR Advances or Base Rate Advances shall be suspended.
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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 Issuing Bank a Letter of Credit Request at least 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 Issuing Bank
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 delivered 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 Issuing Bank. Provided that a valid
Letter of Credit Request has been received by the Issuing Bank and upon
fulfillment of the other applicable conditions set forth in Article 4, the
Issuing Bank will issue the requested Letter of Credit. If a Letter of Credit
Request is received by the Issuing Bank 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 Issuing Bank will 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 60 days after the Commitment
Termination Date.
(b) Immediately upon the issuance of each Letter of Credit, the Issuing Bank
shall be deemed to have sold and transferred to each Lender, and each Lender
shall be deemed to have purchased and received from the Issuing Bank, in each
case irrevocably and without any further action by any party, an undivided
interest and participation 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 Lender 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 Issuing Bank will promptly advise each Lender 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 Issuing Bank of
a draft drawn under any Letter of Credit shall constitute for all purposes of
this Agreement the making by UBOC of a Reference Rate Advance 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 Advance by UBOC
resulting from a drawing under a Letter of Credit is not repaid by the Borrower
by 11:00 a.m., Los Angeles time, on the day of such drawing, UBOC will promptly
so notify the Agent, and the Agent will promptly so notify each other Lender.
Each such Lender will, on the day of such notification, make a Reference Rate
Advance, which shall be used to repay the applicable portion of UBOC's Reference
Rate Advance with respect to such Letter of Credit drawing, in an amount equal
to the amount of such Lender's participation in such drawing (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 will deliver to the Agent for UBOC's account, on the day of such
notification and in immediately available funds, the amount of such Reference
Rate Advance. In the event that any Lender fails to make available to the Agent
for the account of UBOC the amount of such Reference Rate Advance, UBOC shall be
entitled to recover such amount on demand from such Lender, together with
interest thereon at the Federal Funds Rate.
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Section 2.11 Obligations Absolute. The obligations of the Borrower under
this Agreement, 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 Issuing Bank, any Lender (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 Issuing Bank 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
the Guaranty or any 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 will pay to the Agent for the account of the Lenders, from
the Closing Date to the Commitment Termination Date, a letter of credit fee at
the Applicable LOC Fee Rate on the aggregate of the actual 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 December 1, 1999, to the extent
accrued during the immediately preceding calendar month.
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(b) The Borrower will pay to the Issuing Bank 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 in effect from time to time.
Section 2.13 Limits of Liability of Agent and Lenders.
(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 inconsistency 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 Issuing Bank nor any other Lender 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 Issuing Bank 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 Issuing Bank, and the Issuing Bank 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
Issuing Bank'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 Issuing Bank's willful failure to make lawful
payment under any Letter of Credit after the presentation to the Issuing Bank by
the beneficiary or transferee of such Letter of Credit of a draft and
certificates strictly complying with the terms and conditions of such Letter of
Credit. In furtherance and not in limitation of the foregoing, the Issuing Bank
may accept any document that appears on its face to be in order, without
responsibility for further investigation, regardless of any notice or
information to the contrary.
C. PAYMENT PROVISIONS
Section 2.14 Payments.
(a) The Borrower will 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
and immediately available funds, to the Agent at its address set forth in
Section 9.2. 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 Lenders and like
funds relating to the payment of any other amount payable to any Lender to such
Lender, in each case to be applied in accordance with the terms of this
Agreement.
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(b) The Borrower hereby authorizes each Lender, if and to the extent that any
payment owed to such Lender 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 Lender any amount so due.
(c) Unless the Agent receives notice from the Borrower before the date on
which any payment is due to the Lenders 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 each Lender on such due date an
amount equal to the amount then due to such Lender. If and to the extent that
the Borrower has not so made such payment in full to the Agent, each Lender will
repay to the Agent forthwith upon demand such amount distributed to such Lender,
together with interest thereon, for each day from the date such amount was
distributed to such Lender until the date on which such Lender 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 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 Advances 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 Lender obtains any payment
(whether voluntary, involuntary, through the exercise of any right of setoff, or
otherwise) on account of the Advances 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 Advances and Letters
of Credit obtained by all of the Lenders, then such Lender will forthwith
purchase from the other Lenders such participations in the Advances made by them
and the Letters of Credit participated in by them as necessary to cause such
purchasing Lender 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 Lender, such purchase from each other
Lender shall be rescinded, and each such other Lender shall repay to the
purchasing Lender the purchase price to the extent of such recovery, together
with an amount equal to such Lender's ratable share (according to the proportion
of (a) the amount of such Lender's required repayment to (b) the total amount so
recovered from the purchasing Lender) of any interest or other amount paid or
payable by the purchasing Lender in respect of the total amount so recovered.
The Borrower agrees that any Lender so purchasing a participation from another
Lender pursuant to this section may, to the fullest extent permitted by law,
exercise all of its rights of payment (including the right of setoff) with
respect to such participation as fully as if such Lender were the direct
creditor of the Borrower in the amount of such participation.
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Section 2.18 Evidence of Debt.
(a) The indebtedness of the Borrower resulting from all Advances made by each
Lender 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
Advances, 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.
Section 2.19 Payments under Old Credit Agreement. On the Closing Date, any
"Loans" or "Letters of Credit" outstanding under the Old Credit Agreement shall
be deemed to be Advances and Letters of Credit, respectively, outstanding under
this Agreement; provided, however, that (a) the interests of the Lenders in such
Advances and Letters of Credit shall be pro rata in accordance with their
Commitments hereunder and (b) the Lenders shall make all appropriate adjustments
directly between themselves with respect to any "Loans" outstanding under, and
any payments under, the Old Credit Agreement for periods before the Closing
Date.
ARTICLE 3.
YIELD PROTECTION
Section 3.1 Increased LIBOR Advance 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 Advances, included in the
LIBOR Reserve Percentage) in or in the interpretation of any Governmental Rule
or (b) compliance with any Governmental Rule (whether or not having the force of
law), there is an increase in the cost to any Lender of agreeing to make,
making, funding or maintaining any LIBOR Advance, then the Borrower will from
time to time, upon demand by such Lender (with a copy of such demand to the
Agent), pay to the Agent for the account of such Lender additional amounts
sufficient to compensate such Lender for such increased cost. A certificate as
to the amount of such increased cost, submitted to the Borrower and the Agent by
such Lender, 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 Lender to perform its obligations hereunder to make
LIBOR Advances or to continue to fund or maintain LIBOR Advances hereunder,
then, on notice thereof and demand therefor by such Lender to the Borrower
through the Agent, (a) the obligation of such Lender to make LIBOR Advances and
to Convert Advances into LIBOR Advances shall be suspended until the Agent
notifies the Borrower that such Lender has determined that the circumstances
causing such suspension no longer exist, and (b) the Borrower will forthwith
prepay in full all LIBOR Advances of such Lender then outstanding, together with
interest accrued thereon, unless the Borrower, within 5 Business Days of such
notice and demand, Converts all LIBOR Advances of all Lenders then outstanding
into Reference Rate Advances in accordance with Section 2.8.
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Section 3.3 Inadequacy of LIBOR. If, with respect to any LIBOR Advance,
the Majority Lenders notify the Agent that the interest rate determined pursuant
to Section 2.6(a)(ii) for any Interest Period for such Advance will not
adequately reflect the cost to the Majority Lenders of making, funding or
maintaining their respective LIBOR Advances for such Interest Period, then the
Agent will forthwith so notify the Borrower and the Lenders, whereupon (a) all
LIBOR Advances shall automatically, on the last day of the then existing
respective Interest Periods therefor, Convert into Reference Rate Advances, and
(b) the obligations of the Lenders to make, or to Convert Advances into, LIBOR
Advances shall be suspended until the Agent notifies the Borrower and the
Lenders 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 Issuing Bank or any Lender or
(b) imposes on the Issuing Bank or any Lender any other condition regarding this
Agreement, the Issuing Bank, such Lender 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 Issuing Bank of issuing or maintaining any Letter of Credit or to
any Lender of purchasing or maintaining any participation therein, then, upon
demand by the Issuing Bank or such Lender through the Agent, the Borrower will
pay to the Issuing Bank or such Lender through the Agent, from time to time as
specified by the Issuing Bank or such Lender through the Agent, additional
amounts sufficient to compensate the Issuing Bank or such Lender for such
increased cost. A certificate as to the amount of such increased cost,
submitted to the Borrower by the Issuing Bank or such Lender, shall be
conclusive and binding for all purposes, absent manifest error.
Section 3.5 Capital Adequacy. If any Lender 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
Lender or any corporation controlling such Lender and that the amount of such
capital is increased by or based upon the existence of such Lender'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 Lender (with a
copy of such demand to the Agent), the Borrower will pay to the Agent for the
account of such Lender, from time to time as specified by such Lender,
additional amounts sufficient to compensate such Lender in the light of such
circumstances, to the extent that such Lender reasonably determines such
increase in capital to be allocable to the existence of such Lender's commitment
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 Lender shall be conclusive and binding for all
purposes, absent manifest error.
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Section 3.6 Funding Losses. If any payment of principal of, or any
Conversion of, any LIBOR Advance or Base Rate Advance is made other than on the
last day of an Interest Period for such Advance, as a result of a payment or
Conversion pursuant to Section 3.2 or 3.3 or acceleration of the maturity of the
Obligations pursuant to Section 7.1 or for any other reason, the Borrower will,
upon demand by any Lender (with a copy of such demand to the Agent), pay to the
Agent for the account of such Lender any amounts required to compensate such
Lender 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 Lender to fund or
maintain such Advance.
Section 3.7 Substitution of Lender. If (a) any Lender demands payment
from the Borrower in any material amount pursuant to Section 3.1, 3.4 or 3.5 or
(b) any Lender gives notice of illegality pursuant to Section 3.2, and in either
case the event or circumstances causing such Lender to make such demand or give
such notice is not applicable to the Majority Lenders, then the Borrower shall
have the right, with the assistance of the Agent, to seek a mutually
satisfactory lender or lenders (which may be one or more of the Lenders) to
substitute for such Lender by purchasing the Obligations and assuming the
Commitment of such Lender; provided, however, that in any event the Borrower
shall be obligated to compensate such Lender pursuant to Section 3.1, 3.4 or 3.5
or to prepay such Lender's LIBOR Advances pursuant to Section 3.2, as
applicable.
ARTICLE 4.
CONDITIONS OF LENDING
Section 4.1 Initial Advance or Letter of Credit. The obligation of each
Lender to make an Advance on the occasion of the initial Borrowing hereunder,
and the obligation of the Issuing Bank to issue, and of each Lender to
participate in, the first Letter of Credit issued hereunder, is subject to the
conditions precedent set forth below.
(a) The FOC Note Offering (i) has been consummated in accordance with the
terms of the Prospectus, the Indenture and the related underwriting agreement,
without any waiver or amendment not consented to by the Lead Arrangers of any
term, provision or condition set forth therein, (ii) has been consummated in
compliance with all applicable Governmental Rules and (iii) has raised a gross
amount of at least $190,000,000 (subject to original-issue discount if the notes
issued are issued at less than their face amount).
(b) FEDRC's acquisition of the El Dorado Refinery has been consummated in
accordance with the terms of the Acquisition Agreement, without any waiver or
amendment not consented to by the Lead Arrangers of any term, provision or
condition set forth therein, and in compliance with all applicable Governmental
Rules.
(c) No material adverse change in the business, condition (financial or
otherwise), operations, performance, properties or prospects of the Borrower,
any Affiliate thereof or the El Dorado Refinery has occurred since September 30,
1999 and is continuing.
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(d) No action, suit, investigation, litigation or proceeding affecting the
Borrower, any Affiliate thereof or the El Dorado Refinery is pending or
threatened before any Governmental Person or arbitrator (i) that could
reasonably be expected to have a material adverse effect on the business,
condition (financial or otherwise), operations, performance, properties or
prospects of the Borrower, any Affiliate thereof or the El Dorado Refinery or
(ii) that purports to affect the legality, validity or enforceability of the FOC
Note Offering, the Acquisition Agreement, this Agreement, any other Credit
Document or the consummation of any of the transactions contemplated hereby or
thereby.
(e) The Lenders are satisfied with the terms of the FEDRC Processing
Agreement and the FRI Processing Agreement.
(f) The Borrower has paid all accrued fees and expenses of the Lead
Arrangers, the Agent and the Lenders (as provided in Sections 2.12 and 9.4 and
in the Fee Letters and as otherwise agreed between the Borrower and either of
the Lead Arrangers, the Agent or any Lender), including the accrued fees and
disbursements of legal counsel to the Lead Arrangers, to the extent one or more
statements for such fees and expenses have been presented for payment.
(g) The Agent has received the following, each dated the Closing Date unless
otherwise specified below, in form and substance satisfactory to the Lenders and
in the number of originals required by the Agent:
(i) this Agreement, duly executed by the Borrower and the Lenders;
(ii) the Notes in favor of the respective Lenders, the Teletransmission
Agreement and the Fee Letters, duly executed by the Borrower;
(iii) the Security Agreement, duly executed by the Borrower, together
with the following:
(A) certificates of the appropriate Governmental Persons in the States
of California, Colorado, Iowa, Kansas, Minnesota, Missouri, Montana, Nebraska,
North Dakota, Oklahoma, South Dakota, Texas, Utah and Wyoming, in Boone, Greene,
Xxxxxx and Platte Counties, Missouri and in Laramie County, Wyoming, dated as of
a recent date, listing all effective financing statements filed in those
jurisdictions that name the Borrower or, in the case of the States of
California, Kansas and Texas, Equilon or Equiva as debtor, together with copies
of such financing statements;
(B) proper UCC-1 financing statements for filing in each jurisdiction
that the Agent may deem necessary or desirable in order to perfect and protect
the Liens created by the Security Agreement, covering the Collateral described
in the Security Agreement;
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(C) one or more certificates evidencing the insurance required to be
maintained pursuant to Section 7(c) of the Guaranty;
(D) the "Lockbox Agreement" required to be maintained pursuant to
Section 5 of the Security Agreement;
(E) the FOC Demand Note, duly endorsed in a manner acceptable to the
Agent; and
(F) evidence that all other action that the Agent may deem necessary
or desirable in order to perfect and protect the Liens created by the Security
Agreement has been taken;
(iv) the Guaranty, duly executed by the Guarantors;
(v) the Stock Pledge Agreement, duly executed by FRMI, together with the
following:
(A) certificates representing the "Pledged Stock" referred to
in the Stock Pledge Agreement, accompanied by undated stock powers executed
in blank; and
(B) evidence that all other action that the Agent may deem necessary
or desirable in order to perfect and protect the Liens created by the Stock
Pledge Agreement has been taken;
(vi) the Clawback Agreement, duly executed by FOC;
(vii) copies of (A) the resolutions of the Board of Directors of each
Credit Party approving the Credit Documents to which such Credit Party is
or is to be a party and (B) all documents evidencing other necessary
corporate action and Governmental Action, if any, with respect to such
Credit Documents, in each case certified by the Secretary or an Assistant
Secretary of such Credit Party 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
Closing Date;
(viii) a certificate of the Secretary or an Assistant Secretary of each
Credit Party as to the incumbency, and setting forth a specimen signature,
of each of the persons (A) who has signed or will sign any Credit Document
on behalf of such Credit Party and (B) who will, until replaced by other
persons duly authorized for that purpose, act as the representatives of
such Credit Party for the purpose of signing documents in connection with
this Agreement and the transactions contemplated hereby;
(ix) a certificate of each Credit Party, signed on behalf of such Credit
Party by its President or a Vice President and its Secretary or any
Assistant Secretary, certifying as to the following: (A) the absence of
any amendments to the charter of such Credit Party since the date of the
certification with respect thereto referred to in Section 4.1(g)(x); (B)
the correctness and completeness of the copies of the bylaws of such Credit
Party and, to the extent such Credit Party is a party thereto, of the
Prospectus, the Indenture, the Acquisition Agreement, the FRI Processing
Agreement, the FEDRC Processing Agreement, the Crude Supply Agreement, the
Offtake Agreement and the Cogen Lease attached to such certificate and that
such documents are in full force and effect; (C) the due incorporation and
good standing of such Credit Party as a corporation organized under the
laws of its state of incorporation and the absence of any proceeding for
the dissolution or liquidation of such Credit Party; (D) the truthfulness
in all material respects of the representations and warranties of such
Credit Party contained in the Credit Documents, as though made on and as of
the Closing Date; and (E) the absence of any event occurring and
continuing, or resulting from the effectiveness of the Credit Documents,
that constitutes a Default with respect to such Credit Party;
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(x) certificates of the appropriate Governmental Persons, dated reasonably
near the Closing Date, attaching the charter (or the most recent amendment
and restatement thereof) of each Credit Party and all amendments thereto
and certifying that (A) such amendments are the only amendments to such
charter on file in such Governmental Person's office, (B) such Credit Party
has paid all franchise taxes to the date of such certificate and (C) such
Credit Party is duly incorporated and in good standing under the laws of
such state;
(xi) good-standing certificates, dated reasonably near the Closing Date,
with respect to the good standing of such of the Credit Parties to do
business in such jurisdictions as the Agent may reasonably request;
(xii) a recently prepared environmental report (or a recently prepared
update of a previous environmental report) prepared by ENSR or another
environmental consultant acceptable to the Agent with respect to the El
Dorado Refinery and related facilities owned or operated by FEDRC,
addressed to the Agent and covering such matters as reasonably required by
the Agent;
(xiii) one or more favorable opinions of legal counsel for the Credit
Parties, as to such matters as any Lender through the Agent may reasonably
request;
(xiv) copies of all opinions of legal counsel for FOC delivered pursuant to
the underwriting agreement for the FOC Note Offering; and
(xv) a Borrowing Base Certificate containing information as of Thursday,
November 11, 1999, with respect to Inventory of the Borrower that is to be,
is being or has been processed through the Cheyenne Refinery, with respect
to the Accounts of the Borrower and with respect to Inventory of the
Borrower that is to be acquired from Equilon or Equiva pursuant to the
Acquisition Agreement.
Section 4.2 Advances. The obligation of each Lender to make an Advance on
the occasion of each Borrowing is subject to the limitations of the Commitments,
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 has received a Notice of Borrowing with respect to such
Advance;
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(b) the following statements are 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 thereof, 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 thereof, that constitutes a
Default;
(iii) there are no "Short-Term Loans" (as defined in Section 1 of the
Guaranty) outstanding; and
(iv) during the 5 Business Days immediately preceding such Borrowing,
neither the Borrower nor any Affiliate thereof has made any "Long-Term Loan" (as
defined in Section 1 of the Guaranty) or made any distribution or taken any of
the other actions described in Section 6.7 of this Agreement or Section 8(h) of
the Guaranty; and
(c) the Agent has received such other approvals, opinions, evidence and
documents as any Lender through the Agent may reasonably request.
Section 4.3 Letters of Credit. The obligation of the Agent to issue, and
of each Lender to participate in, any Letter of Credit is subject to the
limitations of the Commitments, 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 has received a Letter of Credit Request with respect to such
Letter of Credit;
(b) the following statements are 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; and
(c) the Agent has received such other approvals, opinions, evidence and
documents as any Lender through the Agent may reasonably request.
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Section 4.4 Determinations under Section 4.1. For purposes of determining
compliance with the conditions specified in Section 4.1, each Lender shall be
deemed to have consented to, approved or accepted, or to be satisfied with, each
document or other matter required under Section 4.1 to be consented to, approved
by, accepted or satisfactory to the Lenders unless an officer of the Agent
responsible for the transactions contemplated by the Credit Documents and
holding the position of Vice President or a more senior position receives notice
from such Lender before the earlier of the initial Borrowing hereunder and the
issuance of the initial Letter of Credit hereunder specifying such Lender's
objection thereto, and such objection is not withdrawn by notice to the Agent to
that effect.
ARTICLE 5.
REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants to the Lenders and the Agent 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 Colorado and in each other 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 licensed could not reasonably be expected to have a
material adverse effect on the business, condition (financial or otherwise),
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 could reasonably be
expected 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 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 could reasonably be expected to have a material adverse effect on the
business, condition (financial or otherwise), operations, performance,
properties or prospects of the Borrower.
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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.
Section 5.4 Binding 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. 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 enforceability 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 Lender 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, arbitrator
or referee (a) that could reasonably be expected 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 Subsidiaries.
Section 5.8 Trademarks, Etc. The Borrower possesses all trademarks, trade
names, copyrights and licenses necessary 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
could reasonably be expected 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 could
reasonably be expected 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.
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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. FOC is the legal and beneficial owner of all of
the outstanding capital stock of FHI, and none of such stock is subject to any
Lien. FHI is the legal and beneficial owner of all of the outstanding capital
stock of FRMI, and none of such stock is subject to any Lien. FRMI is the legal
and beneficial owner of all of the outstanding capital stock of the Borrower,
FRI, FEDRC and FPI, and none of such stock is subject to any Lien (other than,
in the case of the stock of the Borrower, in favor of the Agent).
Section 5.14 Margin Stock. The Borrower is not engaged in the business of
extending credit for the purpose of purchasing or carrying margin stock (within
the meaning of Regulation U issued by the Board of Governors of the Federal
Reserve System), and no proceeds of any Advance will be used to purchase or
carry any margin stock or to extend credit to another for the purpose of
purchasing or carrying any margin stock.
Section 5.15 Year 2000. The Borrower has developed and budgeted for a
comprehensive program to address the Year 2000 Problem, and the Borrower has
implemented that program substantially in accordance with its timetable and
budget. The Borrower reasonably expects that it will substantially avoid the
Year 2000 Problem as to all computers, and as to all embedded microchips in
noncomputing devices, that are material to the Borrower's business, properties
or operations. The Borrower has developed a feasible contingency plan to
adequately ensure uninterrupted and unimpaired business operation in the event
of failure of its own or a third party's systems or equipment (including systems
or equipment of vendors, customers and suppliers), or a general failure of or
interruption in its communications and delivery infrastructure, due to the Year
2000 Problem.
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 Lenders, the Borrower will observe the
covenants set forth below.
A. AFFIRMATIVE COVENANTS
Section 6.1 Information. The Borrower will deliver the following directly
to each Lender:
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(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 calculation 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 November 24, 1999), 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 either of
the Refineries, 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 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 and, if any 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, 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 $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 Lender 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
Paribas and their respective 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).
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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 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 the other Credit Parties to
comply with the covenants contained in Sections 7 and 8 of the 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 could not reasonably
be expected to 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
year to pass without there being a period of at least 5 consecutive Business
Days in such calendar year during which the Borrower either (a) has no Advances
outstanding or (b) to the extent any Advances are outstanding during such
period, maintains an amount equal to the aggregate principal amount of such
Advances in the "Control Account" (as defined in the Security 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
distribution"), if and so long as (a) any Advance is outstanding, (b) any
Default other than pursuant to Section 7.1(c), or any Default pursuant to
Section 7.1(c) that the Majority Lenders believe, in their reasonable judgment,
to be material (and a Default pursuant to Section 7.1(c) shall be deemed to be
material unless the Agent notifies the Borrower in writing that the Majority
Lenders believe such 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 Lenders, 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.
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Section 6.8 Use of Advances and Letters of Credit. The Borrower will not
use the proceeds of any Advance 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
obligations of the Borrower incurred in the ordinary course of business and as
to which the Agent and the Majority Lenders 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
cancel or terminate any Material Contract to which it is a party or consent to
or accept any cancellation or termination thereof. The Borrower will not (a)
amend or otherwise modify any Material Contract to which it is a party or give
any consent, waiver or approval thereunder, (b) waive any default under, or
breach of, any such Material Contract, (c) agree in any manner to any other
amendment, modification or change of any term or condition of any such Material
Contract or (d) take any other action in connection with any such Material
Contract, except in each case described in clause (a), (b), (c) or (d) above to
the extent that doing so could not reasonably be expected to have a material
adverse effect on the business, condition (financial or otherwise), operations,
performance, properties or prospects of the Borrower.
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 any Credit Party or any Subsidiary
(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) any Credit Party fails to perform or observe any term, covenant or
agreement in Article 6.B. hereof, in Section 8 of the Guaranty or in Section
7(k), (l), (m) or (o) of the Clawback Agreement on its part to be performed or
observed; or any Credit Party 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 10 days after written notice
thereof has been given to the Borrower by the Agent;
(d) any Credit Party or any Subsidiary fails to pay any principal of any Debt
thereof outstanding in a principal amount of at least $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
otherwise), 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
prepayment, 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;
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(e) any Credit Party or any Subsidiary 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 any Credit Party or any Subsidiary
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 any Credit Party or any Subsidiary
takes any corporate action to authorize any of the actions set forth above in
this Section 7.1(e);
(f) any judgment or order for the payment of money in excess of $1,000,000 is
rendered against any Credit Party or any Subsidiary, and either (i) enforcement
proceedings are commenced by any creditor upon such judgment or order or (ii)
there is any period of 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, satisfied, 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 Lenders, any
material adverse change in the business, condition (financial or otherwise),
operations, performance, properties or prospects of the Borrower, FHI, FRMI,
FRI, FEDRC or FPI 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, any Credit Party
that is a party thereto, or such Credit Party so states in writing; or
(i) for any reason except to the extent permitted by the terms of the
Security 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 either of such agreements;
then, and in any such event, the Agent (i) shall at the request, or may with the
consent, of the Majority Lenders, by notice to the Borrower, declare the
obligation of each Lender to make Advances, 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 Lenders, by notice to the Borrower, declare the Obligations, 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
will 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
any Credit Party or any Subsidiary under the Federal Bankruptcy Code, (x) the
obligation of each Lender to make Advances and of the Agent to issue Letters of
Credit shall be terminated automatically, and (y) the Advances, 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.
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ARTICLE 8.
THE AGENT
Section 8.1 Authorization and Action. Each Lender 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 refrain from acting (and shall be fully protected in so acting or
refraining from acting) upon the instructions of the Majority Lenders, and such
instructions shall be binding upon all Lenders 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 Lender 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 Lender 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 legal counsel for any Credit Party), 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 legal counsel, accountants or experts; (c) makes no warranty or
representation to any Lender and shall not be responsible to any Lender 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 any Credit Party or to inspect the property
(including the books and records) of any Credit Party; (e) shall not be
responsible to any Lender for the due execution, legality, validity,
enforceability, genuineness, sufficiency or value of any Credit Document or any
other instrument or document furnished pursuant 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.
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Section 8.3 UBOC and Affiliates. With respect to its Commitment, the
Advances made by it, the Note issued to it and the Letters of Credit
participated in by it, UBOC shall have the same rights and powers under this
Agreement as any other Lender and may exercise the same as though it were not
the Agent; and the term "Lender" or "Lenders" shall, unless otherwise expressly
indicated, include UBOC in its individual capacity (including in its capacity as
Issuing Bank). UBOC 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, any Credit Party, any Subsidiary and any Person that may do business with
or own securities of any Credit Party or any Subsidiary, all as if UBOC were not
the Agent and without any duty to account therefor to the Lenders.
Section 8.4 Lender Credit Decision. Each Lender acknowledges that it has,
independently and without reliance on the Agent or any other Lender and based on
the financial statements referred to in Sections 6(e) and (f) of the 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 Lender also
acknowledges that it will, independently and without reliance on the Agent or
any other Lender 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 Lenders agree to indemnify the Agent (to
the extent not promptly reimbursed by the Borrower), 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 Lenders, ratably according to the respective
amounts of their Commitments), from and against 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 any of
the Credit Documents or any action taken or omitted by the Agent under any of
the Credit Documents; provided, however, that no Lender 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 Lender 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 promptly 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 Lenders and the Borrower and may be removed at any
time with or without cause with the written approval of the Majority Lenders.
Upon any such resignation or removal, the Majority Lenders shall have the right
to appoint a successor Agent. If no successor Agent has been so appointed by
the Majority Lenders, and has accepted such appointment, within 30 days after
the retiring Agent's giving of notice of resignation or the Majority Lenders'
removal of the retiring Agent, then the retiring Agent may, on behalf of the
Lenders, 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 $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.
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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 Lenders, proportionately in
accordance with the Obligations then due and payable to each of them, against
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 or in any other Credit Document, 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 Lenders 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 Lender 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 Lender 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.
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ARTICLE 9.
MISCELLANEOUS
Section 9.1 Amendments, Etc. No amendment or waiver of any provision of
this Agreement, 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 Lenders 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 Lenders, do any of the following: (a) waive any of the conditions
specified in Article 4; (b) increase the Commitments of the Lenders or subject
the Lenders 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 Advances or any fees or other amounts payable hereunder; (e)
postpone any date fixed for (i) payment of principal of, or interest on, the
Advances, (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 Obligations outstanding, or the number of Lenders,
required for the Lenders or any of them to take any action hereunder; or (g)
amend this Section 9.1; further provided, however, that no amendment, waiver or
consent shall, unless in writing and signed or consented to (in writing) by the
Super-Majority Lenders, change the definition of "Borrowing Base" in Section
1.1; and further provided, however, that no amendment, waiver or consent shall,
unless in writing and signed or consented to (in writing) by the Agent in
addition to the Lenders 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 communications 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, Vice President and Chief Financial Officer; if to any Lender, 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 Lender 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.
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Section 9.4 Costs and Expenses. The Borrower agrees to pay on demand (a)
all costs and expenses of the Lead Arrangers 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 legal
counsel for the Lead Arrangers with respect thereto and with respect to advising
the Lead Arrangers as to their respective 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 7(l) and (m) of the Guaranty), and (b) all
costs and expenses of the Agent and the Lenders (including reasonable attorneys'
fees and expenses of the Agent and the Lenders) 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.
(a) The Borrower hereby agrees to indemnify and hold harmless the Agent and
each Lender and each of their respective officers, directors, employees, agents,
advisors and Affiliates (each an "Indemnified Person") from and against 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 Advance, any
Letter of Credit, the FOC Note Offering, the acquisition of the El Dorado
Refinery 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 Advance 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 jurisdiction to have
resulted from such Indemnified Person's gross negligence or willful misconduct.
(b) The Borrower hereby agrees to indemnify each Indemnified Person from and
against any and all claims, demands, actions, damages (including all foreseeable
and unforeseeable consequential damages), losses, assessments, liabilities and
expenses (including reasonable fees and expenses of counsel) that may be
incurred by or awarded against any Indemnified Person, in each case arising out
of or in connection with or by reason of, or in connection with the preparation
for a defense of, any investigation, litigation or proceeding arising out of,
related to or in connection with (i) the actual or alleged presence of any
Hazardous Material in, on or under (A) any property owned or operated by the
Borrower or any Subsidiary thereof, (B) any property to which any Hazardous
Material has migrated from any property owned or operated by the Borrower or any
Subsidiary thereof or (C) any property at which the Borrower or any Subsidiary
thereof has disposed of any Hazardous Material (whether or not legal at the time
of such disposal) or (ii) any Environmental Proceeding relating in any way to
the Borrower or any Subsidiary thereof, in any case whether or not such
investigation, litigation or proceeding is brought by the Borrower, any
Subsidiary thereof, any of their respective directors, shareholders or creditors
or an Indemnified Person, whether or not any Indemnified Person is otherwise a
party thereto and whether or not the transactions contemplated hereby are
consummated.
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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 Lender is hereby authorized at any time and from time to time, to the
fullest extent permitted by law, to set off and apply any or all deposits
(general or special, time or demand, provisional or final) at any time held and
other indebtedness at any time owing by such Lender to or for the credit or the
account of the Borrower against any or all of the obligations of the Borrower
now or hereafter existing under this Agreement and the other Credit Documents,
irrespective of whether such Lender has made any demand under this Agreement or
any such other Credit Document and although such obligations may be unmatured.
Each Lender agrees to notify the Borrower promptly after any such setoff and
application made by such Lender; provided, however, that the failure to give
such notice shall not affect the validity of such setoff and application. The
rights of each Lender under this section are in addition to other rights and
remedies (including other rights of setoff) that such Lender 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 Lenders and their
respective successors and assigns, except that (a) the Borrower shall not have
the right to assign any of its rights and obligations hereunder without the
prior written consent of the Majority Lenders and (b) the Lenders shall have the
right to assign their respective rights and obligations hereunder only in
accordance with Section 9.8.
Section 9.8 Assignments and Participations.
(a) Each Lender may assign to one or more banks or other entities acceptable
to the Agent, in the exercise of its reasonable discretion, all or a portion of
its rights and obligations under this Agreement (including all or a portion of
its Commitment, the Advances owing to it and its participations in outstanding
Letters of Credit); provided, however, that (i) except in the case of an
assignment to a Person that, immediately before such assignment, was a Lender,
the amount of the Commitment of the assigning Lender 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 the lesser of
(A) the entire Commitment of such Lender at such time and (B) $10,000,000 and
(ii) 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,
together with a processing and recording fee of $3,500. 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 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, (i) 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
Lender hereunder and (ii) the Lender 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 (and, in the case of an Assignment and
Acceptance covering all or the remaining portion of an assigning Lender's rights
and obligations under this Agreement, such Lender shall cease to be a party
hereto, except that such Lender shall continue to be an "Indemnified Person"
under Section 9.5).
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(b) By executing and delivering an Assignment and Acceptance, the Lender
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 Lender makes no representation or
warranty and assumes no responsibility with respect to any statement, warranty
or representation 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 Lender makes no representation or warranty and assumes no
responsibility with respect to the financial condition of any Credit Party or
any Subsidiary or the performance or observance by any Credit Party of any of
its obligations under any Credit Document 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 Sections 6(e) and (f) of the 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 Lender or any
other Lender 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 the Credit Documents as are delegated to the Agent by the
terms thereof, 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 the Credit Documents are
required to be performed by it as a Lender.
(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 Lenders and the Commitment
of, and the principal amount of Obligations owing to, each Lender 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 Lenders may treat each Person whose name is recorded in the Register as a
Lender hereunder for all purposes of this Agreement. The Register shall be
available for inspection by the Borrower or any Lender at any reasonable time
and from time to time upon reasonable prior notice.
- 49 -
(d) Upon its receipt of an Assignment and Acceptance executed by an assigning
Lender 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, in the exercise of its reasonable discretion, (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 Lender 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 Advances owing to
it and its participations in outstanding Letters of Credit); provided, however,
that (i) such Lender's obligations under this Agreement (including its
Commitment) shall remain unchanged, (ii) such Lender shall remain solely
responsible to the other parties hereto for the performance of such obligations,
(iii) the Borrower, the Agent and the other Lenders shall continue to deal
solely and directly with such Lender in connection with such Lender's rights and
obligations under this Agreement and (iv) no participant 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 any Credit
Party therefrom, except to the extent that such amendment, waiver or consent
would reduce the principal of, or interest on, the Advances, the amount to be
reimbursed in respect of any drawing under a Letter of Credit 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 Advances, the amount to be reimbursed in respect of any drawing
under a Letter of Credit or any fees or other amounts payable hereunder, in each
case to the extent subject to such participation, or release all or
substantially all of the Collateral, except as provided in the Credit Documents.
(f) Any Lender 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 that was furnished to such Lender by or on behalf of
the Borrower.
Section 9.9 Governing Law. THIS AGREEMENT AND THE NOTES SHALL BE GOVERNED
BY, AND CONSTRUED AND ENFORCED 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.
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Section 9.12 Alternative Dispute Resolution
(a) Claims Subject to Judicial Reference; Selection of Referee. All Claims
involving the Borrower, including any and all questions of law or fact relating
thereto, shall, at the written request of the Borrower or the Agent (together
the "Parties"), be determined by Reference. The Parties shall select a single
neutral referee, who shall be a retired state- or federal-court judge with at
least 5 years of judicial experience in civil matters. In the event that the
Parties cannot agree upon a referee, the referee shall be appointed by a court
having jurisdiction over the same. The Borrower, on the one hand, and the
Lenders, on the other hand, shall bear equally the fees and expenses of the
referee unless the referee provides otherwise in the statement of decision.
(b) Conduct of Reference. Except as otherwise provided in this Agreement,
any Reference shall be conducted pursuant to the laws of the State of
California. The referee shall determine all issues relating to the
applicability, interpretation, legality and enforceability of this Agreement and
the other Credit Documents.
(c) Provisional Remedies, Self-Help and Foreclosure. No provision of this
Agreement 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 a Reference. The exercise of, or opposition to, any such remedy
does not waive the right of any Party to Reference pursuant to this Agreement.
(d) Limitation on Damages. In the event that punitive damages are permitted
under the law of the State of California, the amount thereof shall not exceed a
sum equal to three times the amount of actual damages as determined by the
referee.
(e) Severability. In the event that any provision of any Credit Document is
found to be illegal or unenforceable, the remainder of such Credit Document
shall remain in full force and effect.
(f) Miscellaneous. In the event that multiple claims are asserted, some of
which are found not subject to the provisions of 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 resolve them in accordance with this Section 9.12. In
the event of any challenge to the legality or enforceability of this Section
9.12, the prevailing Party shall be entitled to recover the costs and expenses,
including reasonable attorneys' fees, incurred by it in connection therewith.
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(g) WAIVER OF JURY TRIAL. IN CONNECTION WITH ANY REFERENCE OR ANY OTHER
ACTION, PROCEEDING OR COUNTERCLAIM, WHETHER BROUGHT IN STATE OR FEDERAL COURT,
THE BORROWER, THE LENDERS AND THE AGENT HEREBY EXPRESSLY, INTENTIONALLY AND
IRREVOCABLY WAIVE ANY RIGHT THEY MAY OTHERWISE HAVE TO TRIAL BY JURY OF ANY
CLAIM.
FRONTIER OIL AND REFINING COMPANY
By: /s/ Xxx X. Xxxxxx
-------------------------------
Xxx X. Xxxxxx
Vice President and
Chief Financial Officer
Commitment
$100,000,000 UNION BANK OF CALIFORNIA, N.A.,
as Administrative Agent, Documentation Agent, Lead
Arranger and Lender
By: /s/ Xxxxxxx X. Xxxxxxxxx
--------------------------------
Name: Xxxxxxx X. Xxxxxxxxx
Title: Vice President
Union Bank of California, N.A.
000 Xxxxx Xxxxxxxx Xxxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Telecopier: 000-000-0000
Attention: Energy Capital Services
- S-1 -
$75,000,000 PARIBAS,
as Syndication Agent, Lead Arranger and Lender
By: /s/ Xxxxxx X. Xxxxxxxx
---------------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Managing Director
By: /s/ Xxxx X. Xxxxxxx
---------------------------------
Name: Xxxx X. Xxxxxxx
Title: Vice President
Paribas
Houston Agency
0000 Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Telecopier: 000-000-0000
Attention: Xx. Xxxxxxx Xxxxxxx or
Xx. Xxxxxx X. Xxxxxxxx
- S-2 -
