EXHIBIT 4.7
________________________________________________________________________________
LYONDELL PETROCHEMICAL COMPANY
$225,000,000
CREDIT AGREEMENT
DATED AS OF DECEMBER 1, 1997
TEXAS COMMERCE BANK NATIONAL ASSOCIATION,
AS ADMINISTRATIVE AGENT,
BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION,
AS DOCUMENTATION AGENT,
THE CHASE MANHATTAN BANK,
AS AUCTION AGENT,
AND
THE BANKS FROM TIME TO TIME PARTY HERETO
________________________________________________________________________________
TABLE OF CONTENTS
ARTICLE I
DEFINITIONS
SECTION
1.01. Definitions........................................................ 1
1.02. Accounting Terms and Determinations................................18
1.03. Types of Loans and Borrowings......................................18
1.04. Terms Generally....................................................18
ARTICLE II
THE CREDITS
2.01. Commitments to Lend................................................19
2.02. Notice of Committed Borrowings.....................................21
2.03. Letters of Credit..................................................22
2.04. Notice to Banks; Funding of Committed Loans........................27
2.05. Committed Notes....................................................28
2.06. Maturity of Committed Loans........................................29
2.07. Interest Rates.....................................................29
2.08. Conversions and Continuances.......................................30
2.09. Pro Rata Committed Borrowings......................................31
2.10. Competitive Borrowings.............................................31
2.11. Optional Termination or Reduction of Commitments...................35
2.12. Mandatory Termination of Commitments...............................35
2.13. Optional Prepayments...............................................35
2.14. General Provisions as to Payments..................................36
2.15. Funding Losses.....................................................36
2.16. Fees...............................................................37
2.17. Computation of Interest and Fees...................................37
2.18. Maximum Interest Rate..............................................38
2.19. Withholding Tax Exemption..........................................40
ARTICLE III
CONDITIONS
SECTION
3.01. Effectiveness......................................................41
3.02. Credit Events......................................................43
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION
4.01. Representations and Warranties of the Borrower.....................45
ARTICLE V
COVENANTS
SECTION
5.01. Certain Information to be Furnished by the Borrower................50
5.02. Maintenance of Property; Insurance.................................54
5.03. Limitation on Liens................................................54
5.04. Consolidation, Merger, Disposition of Assets.......................57
5.05. Use of Proceeds....................................................58
5.06. Payment of Taxes...................................................58
5.07. LCR Matters........................................................58
5.08. Equistar Matters...................................................59
5.09. Financial Covenants................................................59
5.10. No Subsidiary Debt.................................................61
5.11. Disposition of Interests in Subsidiaries...........................61
ARTICLE VI
DEFAULTS AND REMEDIES
SECTION
6.01. Defaults...........................................................62
6.02. Other Remedies.....................................................64
6.03. Rights of Setoff...................................................64
ARTICLE VII
THE AGENTS
SECTION
7.01. Appointment and Authorization......................................65
7.02. Agents and Affiliates..............................................65
7.03. Action by Agents...................................................65
7.04. Consultation with Experts..........................................65
7.05. Liability of Agents................................................66
7.06. INDEMNIFICATION....................................................66
7.07. Credit Decision....................................................66
7.08. Successor Agents...................................................67
ii
ARTICLE VIII
CHANGE IN CIRCUMSTANCES
SECTION
8.01. Basis for Determining Interest Rate Inadequate or Unfair...........67
8.02. Illegality.........................................................68
8.03. Increased Cost and Reduced Return..................................68
8.04. Substitute Loans...................................................70
8.05. Regulation D Compensation..........................................71
8.06. Substitution of Bank...............................................71
ARTICLE IX
MISCELLANEOUS
SECTION
9.01. Notices............................................................72
9.02. No Waiver..........................................................72
9.03. GOVERNING LAW......................................................72
9.04. Expenses; Documentary Taxes; Indemnification.......................72
9.05. Amendments, Etc....................................................74
9.06. Counterparts; Integration..........................................74
9.07. Successors and Assigns.............................................74
9.08. Survival...........................................................76
9.09. Acknowledgment.....................................................76
9.10. Headings...........................................................76
9.11. Sharing of Setoffs.................................................76
9.12. Collateral.........................................................77
9.13. CONSENT TO JURISDICTION............................................77
9.14. FINAL AGREEMENT OF THE PARTIES.....................................78
SCHEDULE I - Commitments
SCHEDULE 5.03(c) - Existing and Contemplated Liens
EXHIBIT 2.02 - Form of Notice of Committed Borrowing
EXHIBIT 2.03 - Form of Letter of Credit Request
EXHIBIT 2.05 - Form of Committed Note
EXHIBIT 2.08 - Form of Notice of Conversion
EXHIBIT 2.10(a) - Form of Competitive Bid Request
EXHIBIT 2.10(b) - Form of Notice of Competitive Bid Request
EXHIBIT 2.10(c) - Form of Competitive Bid
EXHIBIT 2.10(d) - Form of Competitive Note
EXHIBIT 3.01(ii) - Form of Certificate of Incumbency
EXHIBIT 3.01(iv) - Form of Opinion of Counsel for the Borrower
iii
EXHIBIT 3.01(v) - Form of Opinion of Special Counsel for the Agents
iv
THIS CREDIT AGREEMENT (this"Agreement") dated as of December 1, 1997
among LYONDELL PETROCHEMICAL COMPANY, a Delaware corporation, the BANKS listed
on the signature pages hereof and/or those BANKS that hereafter become party to
this Agreement pursuant to Section 9.07(c), TEXAS COMMERCE BANK NATIONAL
ASSOCIATION, as Administrative Agent, BANK OF AMERICA NATIONAL TRUST AND SAVINGS
ASSOCIATION, as Documentation Agent, and THE CHASE MANHATTAN BANK, as Auction
Agent.
The Borrower (such term and each other capitalized term used but not
otherwise defined herein having the meaning assigned to it in Article I) has
requested the Banks to extend credit in order to enable it to borrow on a
revolving basis and obtain the issuance of Letters of Credit in an aggregate
amount not in excess of $225,000,000. The proceeds of the Loans and the Letters
of Credit are to be used to provide working capital availability and for general
corporate purposes. The Banks are willing to extend such credit to the Borrower
on the terms and subject to the conditions set forth herein.
Accordingly, in consideration of the mutual agreements herein
contained and other good and valuable consideration, the sufficiency and receipt
of which are hereby acknowledged, the parties hereto hereby agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. Definitions. In addition to terms defined elsewhere in
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this Agreement, as used in this Agreement the following terms have the following
meanings (all terms defined in this Agreement in the singular to have the same
meanings when used in the plural and vice versa):
"Administrative Questionnaire" means, with respect to each Bank, the
administrative questionnaire in the form submitted to such Bank by the
Administrative Agent and submitted to the Administrative Agent (with a copy to
the Borrower) duly completed by such Bank.
"Administrative Agent" means Texas Commerce Bank National Association in
its capacity as administrative and syndication agent for the Banks hereunder and
its successors in such capacity.
"Affiliate" means, with respect to any Person, any other Person directly or
indirectly controlling, controlled by, or under direct or indirect common
control with such Person.
1
"Agents" means the Administrative Agent, the Documentation Agent and the
Auction Agent.
"Agreement" has the meaning specified in the introduction hereto, as the
same may hereafter be amended, extended and modified from time to time.
"Alternate Competitive Loan" means any Competitive Loan bearing interest at
a fixed percentage rate per annum specified by the Bank making such Loan in its
Competitive Bid.
"Applicable Lending Office" means, with respect to any Bank, (i) in the
case of its Base Rate Loans, its Domestic Lending Office, (ii) in the case of
its Euro-Dollar Committed Loans and Euro-Dollar Competitive Loans, its Euro-
Dollar Lending Office, and (iii) with respect to the Issuing Bank, its Domestic
Lending Office.
"Applicable Margin" means (a) 0.55% with respect to the Euro-Dollar
Committed Loans and 0.20% per annum with respect to the Facility Fee, in each
case for the period from the date of this Agreement until the first
Determination Date after the date of this Agreement and (b) for any subsequent
period from and including any Determination Date, beginning with the first
Determination Date after the date of this Agreement, if the Applicable
Percentage Ratio on the first day of such period is within a range set forth in
column A below, the per annum percentage equal to the percentage set forth for
that range in the column for Euro-Dollar Committed Loans or the Facility Fee, as
the case may be:
A Euro-Dollar Committed Loans Facility Fee
-------------- --------------------------- ------------
less than or equal 0.55% 0.20%
to 1.0 to 1.0
greater than 1.0 to 1.0 0.75% 0.25%
"Applicable Percentage Ratio" means (a) as of any Determination Date as
defined in clause (a) of that definition, the ratio of (i) Consolidated Debt as
of the end of the Borrower's most recently ended fiscal quarter or fiscal year,
as the case may be, to (ii) Consolidated Cash Flow for the Borrower's four most
recently ended fiscal quarters and (b) as of any other Determination Date, a
ratio greater than 1.0 to 1.0 until such time as the Administrative Agent
receives the requisite financial statements referred to in clause (b) or (c) of
the definition of Determination Date, as the case may be.
"Assignee" has the meaning set forth in Section 9.07(c).
2
"Auction Agent" means The Chase Manhattan Bank in its capacity as auction
agent for the Banks hereunder and its successors in such capacity.
"Authorized Officer" and "Authorized Representative" of the Borrower shall
mean an officer or other representative of the Borrower designated as such in
the latest Certificate of Incumbency of the Borrower. The Agents and the Banks
shall be conclusively entitled to rely on the latest such Certificate of
Incumbency of the Borrower delivered to the Administrative Agent.
"Bank" means each financial institution which is listed on the signature
pages hereof as being a "Bank" and which has executed and delivered this
Agreement and/or each Assignee which becomes a "Bank" pursuant to Section
9.07(c), and their respective successors.
"Base Rate" means, for any day, a rate per annum equal to the lesser of (i)
the higher of (x) the Prime Rate for such day, or (y) the Federal Funds Rate for
such day, plus 1/2 of 1 percent, or (ii) the Highest Lawful Rate.
"Base Rate Loan" means a Committed Loan to be made by a Bank as a Base Rate
Loan in accordance with the applicable Notice of Committed Borrowing or pursuant
to Article VIII.
"Borrower" means Lyondell Petrochemical Company, a Delaware corporation,
and its successors.
"Borrowing" has the meaning set forth in Section 1.03.
"Borrowing Date" means, with respect to each Borrowing, the Domestic
Business Day or Euro-Dollar Business Day upon which the proceeds of such
Borrowing are to be made available to the Borrower.
"Certificate of Incumbency" shall mean a Certificate of Incumbency
described in clause (ii) of Section 3.01 and any successor or replacement
Certificate of Incumbency delivered hereunder.
"CITGO" means CITGO Petroleum Corporation, a Delaware corporation, and its
successors and assigns.
"CITGO Refining" means CITGO Refining Investment Company, an Oklahoma
corporation, and its successors (including any entity that assumes Citgo
Refining's obligations under the Company Regulations).
3
"Code" means the Internal Revenue Code of 1986, as amended, or any
successor statute.
"Commitment" means, as to each Bank, the amount set forth opposite its name
on Schedule I under the heading "Commitment" or as set forth in an instrument
signed by all appropriate parties in accordance with Section 9.07(c) (as such
amount may be increased from time to time pursuant to Section 2.01(b) or reduced
from time to time as provided in Section 2.10 or 2.11).
"Commitment Percentage" of any Bank means, at any time, the ratio which its
Commitment bears to the aggregate of all the Banks' Commitments or, if the
Commitments have been terminated, the ratio which the aggregate outstanding
principal amount of the Committed Loans made by such Bank bears to the aggregate
outstanding principal amount of all Committed Loans made by the Banks.
"Committed Amount" means, at any time, the aggregate principal amount of
the Commitments at such time.
"Committed Borrowing" is a Borrowing under Sections 2.01 and 2.02.
"Committed Loan" means a Loan made pursuant to Section 2.01.
"Competitive Bid" means an offer by a Bank to the Borrower to make a
Competitive Loan in the form of Exhibit 2.10(c).
"Competitive Bid Request" has the meaning set forth in Section 2.10(a).
"Competitive Borrowing" is a Borrowing under Section 2.10.
"Competitive Loan" means a Loan made pursuant to Section 2.10.
"Consolidated Capital Expenditures" means, for any period with respect to
any Person, the gross additions to fixed assets attributable to cash flows from
investing activities as reflected on the consolidated statement of cash flows of
that Person and its Consolidated Subsidiaries for such period.
"Consolidated Cash Flow" means, for any period with respect to the Borrower
and its Consolidated Subsidiaries, without duplication, (a) EBITDA of the
Borrower as of the end of that period, plus (b) all distributions to the
Borrower from earnings and all distributions to the Borrower in excess of
earnings from LCR, Equistar, Methanol and each Other Equity Person, in each
case, as reflected on the consolidated statement of cash flows of the Borrower
and its Consolidated Subsidiaries as of the end of that period, minus (c) an
amount equal to the sum of (i) the amount of all distributions to
4
the Borrower derived from financing activities of LCR, Equistar, Methanol and
each Other Equity Person, plus (ii) the amount of all capital contributions by
the Borrower to LCR, Equistar, Methanol and each Other Equity Person.
"Consolidated Debt" means, as of the date of any determination thereof with
respect to any Person, all Debt of that Person and its Consolidated
Subsidiaries.
"Consolidated Interest Expense" means, for any period with respect to any
Person, the Interest Expense reflected on the consolidated statement of income
of that Person and its Consolidated Subsidiaries for such period.
"Consolidated Net Income or Loss" means, for any period with respect to any
Person, the net income (loss) reflected on the consolidated statement of income
of that Person and its Consolidated Subsidiaries for such period.
"Consolidated Net Tangible Assets" means, with respect to any Person, the
total amount of assets (less applicable reserves and other properly deductible
items) after deducting therefrom (i) all current liabilities (excluding any
liabilities that are by their terms extendible or renewable at the option of the
obligor thereon to a time more than 12 months after the time as of which the
amount thereof is being computed), and (ii) all goodwill, trade names,
trademarks, patents, purchased technology, unamortized debt discount and other
like intangible assets, all as set forth on the most recent quarterly
consolidated balance sheet of that Person and its Consolidated Subsidiaries.
"Consolidated Subsidiary" means at any date with respect to any Person any
Subsidiary of that Person or other entity the accounts of which are consolidated
with those of that Person in that Person's consolidated financial statements as
of such date.
"Controlled Group" means all members of a controlled group of corporations
and all trades or businesses (whether or not incorporated) under common control
which, together with the Borrower, are treated as a single employer under
Section 414(b) or 414(c) of the Code.
"Credit Event" means the making of a Loan or the occasion of any other
Borrowing hereunder or the issuance, renewal or extension of any Letter of
Credit hereunder.
"Debt" of any Person means without duplication, as of the date of any
determination thereof (i) the aggregate outstanding principal amount of all
indebtedness for borrowed money of such Person, (ii) all obligations of such
Person evidenced by bonds, debentures, notes or other similar instruments
(including letters of credit), (iii) all obligations of such Person to pay the
deferred purchase price of
5
property or services, except trade accounts payable incurred in the ordinary
course of business, (iv) the capitalized amount of all obligations of such
Person as lessee under capital leases, (v) all obligations of others of the type
described in clauses (i) through (iv) of this definition to the extent secured
by a Lien on any asset of such Person, whether or not such obligations are
assumed by such Person and (vi) all obligations of others of the type described
in clauses (i) through (iv) of this definition to the extent Guaranteed by such
Person.
"Default" means any condition or event which constitutes an Event of
Default or which with the giving of notice or lapse of time or both would,
unless cured or waived, become an Event of Default.
"Determination Date" means, for purposes of determining the Applicable
Margin or the Letter of Credit Percentage from time to time, (a) the first date
after the end of a fiscal quarter or fiscal year, as the case may be, of the
Borrower on which the Administrative Agent receives the financial statements as
of the end of that fiscal quarter or fiscal year required by Section 5.01(a) or
Section 5.01(b), as the case may be, (b) the 61st day after the end of any
fiscal quarter of the Borrower if the Administrative Agent has not received the
financial statements as of the end of that fiscal quarter required by Section
5.01(b) and (c) the 121st day after the end of any fiscal year of the Borrower
if the Administrative Agent has not received the financial statements required
by Section 5.01(a).
"Dividend" means any cash dividend paid or declared by the board of
directors of the Borrower in respect of the Borrower's stock now or hereafter
outstanding.
"Documentation Agent" means Bank of America National Trust and Savings
Association in its capacity as documentation agent for the Banks hereunder and
its successors in such capacity.
"Domestic Business Day" means any day except a Saturday, Sunday or other
day on which commercial banks in Houston or New York City are authorized by law
to close.
"Domestic Lending Office" means, as to each Bank, including the Issuing
Bank, its office, branch or Affiliate located at its address set forth in its
Administrative Questionnaire (or identified in its Administrative Questionnaire
as its Domestic Lending Office) or such other office, branch or Affiliate as
such Bank may from time to time specify to the Administrative Agent and the
Borrower as its Domestic Lending Office.
"Drawing" means any drawing under a Letter of Credit.
6
"EBITDA" means, for any period with respect to any Person, the sum of (a)
Consolidated Net Income or Loss of that Person for such period, minus (b)
interest income of that Person and its Consolidated Subsidiaries for such
period, plus (c) Consolidated Interest Expense of that Person for such period,
plus (d) depreciation, amortization and provisions for deferred taxes of that
Person and its Consolidated Subsidiaries for such period, and plus or minus (e)
any Non-Operating Special Items.
"EBITDA Adjustment" means, for any fiscal quarter in which the Borrower,
LCR, Equistar, Methanol or any Other Equity Person or any of their respective
Consolidated Subsidiaries shall incur downtime at or with respect to any plant
or manufacturing or processing unit (as determined by the Borrower in its sole
discretion), an amount equal to the lesser of (i) the estimated amount by which
the combined EBITDA of all such Persons is impacted by such downtime or (ii)
$20,000,000, which amount may be included in the calculation of Global EBITDA
for that fiscal quarter; provided, that such adjustment of up to $20,000,000 for
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all such Persons may only be made for one fiscal quarter during the term of this
Agreement.
"Effective Date" means December 1, 1997, on satisfaction of the conditions
set forth in clauses (a) and (b) of Section 3.01.
"Environmental Laws" means federal, state or local laws, rules or
regulations, including any administrative order, permit or approval pertaining
to health, safety or the environment in effect in the applicable jurisdiction at
the time in question, including the Clean Air Act, as amended, the Comprehensive
Environmental Response, Compensation and Liability Act, as amended ("CERCLA"),
------
the Federal Water Pollution Control Act, as amended, the Occupational Safety and
Health Act, as amended, the Resource Conservation and Recovery Act, as amended,
the Safe Drinking Water Act, as amended, the Toxic Substances Control Act, as
amended, the Superfund Amendment and Reauthorization Act of 1986, as amended,
the Hazardous Materials Transportation Act, as amended, comparable state and
local laws, and other environmental conservation and protection laws.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"Equistar" means Equistar Chemicals, LP, a Delaware limited partnership,
the general partners of which on the date hereof are Lyondell Equistar G.P. and
Millennium Equistar GP and the limited partners of which on the date hereof are
Lyondell Equistar LP and Millennium Equistar LP, and its successors.
"Equistar Debt" means the Debt of Lyondell Equistar LP evidenced by its
promissory note dated December 1, 1997 in the principal face amount of
$345,000,000 payable to Equistar on the terms provided for therein.
7
"Equistar Partnership Agreement" means the limited partnership agreement of
Equistar dated October 10, 1997, as amended from time to time, subject, however,
to Section 5.08.
"Euro-Dollar Business Day" means any Domestic Business Day on which
commercial banks are open for international business (including dealings in
dollar deposits) in London.
"Euro-Dollar Committed Loan" means a Committed Loan to be made by a Bank as
a Euro-Dollar Committed Loan in accordance with the applicable Notice of
Committed Borrowing.
"Euro-Dollar Competitive Loan" means a Competitive Loan to be made by a
Bank as a Euro-Dollar Competitive Loan in accordance with the applicable
Competitive Bid.
"Euro-Dollar Lending Office" means, as to each Bank, its office, branch or
Affiliate located at its address set forth in its Administrative Questionnaire
(or identified in its Administrative Questionnaire as its Euro-Dollar Lending
Office) or such other office, branch or Affiliate of such Bank as it may from
time to time specify to the Administrative Agent and the Borrower as its Euro-
Dollar Lending Office.
"Euro-Dollar Margin" has the meaning set forth in Section 2.07(b).
"Euro-Dollar Rate" has the meaning set forth in Section 2.07(b).
"Euro-Dollar Reserve Percentage" means with respect to any Bank for any day
that percentage (expressed as a decimal) which is in effect on such day as
prescribed by the Board of Governors of the Federal Reserve System (or any
successor) for determining the reserve requirement (including without limitation
any basic, supplemental or emergency reserves) imposed on such Bank in respect
of "Euro-currency liabilities" (or in respect of any other category of
liabilities which includes deposits by reference to which the interest rate on
Euro-Dollar Committed Loans is determined or in respect of any category of
extensions of credit or other assets which includes loans by a non-United States
office of such Bank to United States residents).
"Event of Default" has the meaning set forth in Section 6.01.
"Facility Fee" has the meaning specified in Section 2.16(a).
"Federal Funds Rate" means, for any day, the rate per annum (rounded
upwards, if necessary, to the nearest 1/1OOth of 1 percent) equal to the
weighted average of the rates on overnight Federal funds transactions with
members of the Federal Reserve System arranged by Federal funds brokers on such
day, as published by the Federal
8
Reserve Bank of Dallas on the Domestic Business Day next succeeding such day;
provided, however, that (i) if such day is not a Domestic Business Day, the
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Federal Funds Rate for such day shall be such rate on such transactions on the
next preceding Domestic Business Day as so published on the next succeeding
Domestic Business Day, and (ii) if no such rate is so published on such next
succeeding Domestic Business Day, the Federal Funds Rate for such day shall be
the average rate quoted to Texas Commerce Bank National Association on such day
for such transactions as determined by the Administrative Agent.
"Global Debt" means the sum of (a) the Borrower's Consolidated Debt, plus
(b) the amount equal to the Ownership Percentage in LCR of LCR's Consolidated
Debt, plus (c) the amount equal to the Ownership Percentage in Equistar of
Equistar's Consolidated Debt, plus (d) the amount equal to the Ownership
Percentage in Methanol of Methanol's Consolidated Debt, plus (e) the amount
equal to the Ownership Percentage in each Other Equity Person of such Other
Equity Person's Consolidated Debt; provided, however, Global Debt shall not
include any Debt of LCR, Equistar, Methanol or any Other Equity Person owing to
the Borrower.
"Global EBITDA" means (a) the Borrower's EBITDA, plus (b) the amount equal
to the Ownership Percentage in LCR of LCR's EBITDA, plus (c) the amount equal to
the Ownership Percentage in Equistar of Equistar's EBITDA, plus (d) the amount
equal to the Ownership Interest in Methanol of Methanol's EBITDA, plus (e) the
amount equal to the Ownership Percentage in each Other Equity Person of such
Other Equity Person's EBITDA, plus (e) any EBITDA Adjustment.
"Guarantee"means, in respect of any Person, for that Person to guarantee or
act, directly or indirectly, as a surety for any Debt of any other Person and,
without limiting the generality of the foregoing, to (i) incur or assume any
such Debt, direct or indirect, contingent or otherwise, (ii) purchase or pay (or
advance or supply funds for the purchase or payment of) such Debt (whether
arising by virtue of partnership arrangements, by binding agreement to keep-
well, to purchase assets, goods, securities or services, to take-or-pay or to
maintain financial statement conditions or otherwise) or (iii) assure in any
other manner the obligee of such Debt of the payment thereof or to protect such
obligee against loss in respect thereof (in whole or in part); provided,
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however, in no event shall the term "Guarantee"mean to endorse for collection or
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deposit in the ordinary course of business.
"Hazardous Materials" means any pollutant, contaminant, solid waste,
asbestos, petroleum product, crude oil or a fraction thereof, any toxic or
hazardous substance, material or waste, any flammable, explosive or radioactive
material or any other material or substance not mentioned above which is
regulated under any Environmental Law.
9
"Highest Lawful Rate" has the meaning set forth in Section 2.18.
"Interest Expense" means, for any period and for any Person, without
duplication, the total interest expense of such Person as reflected on an income
statement of such Person for such period.
"Interest Period" means: (1) with respect to each Euro-Dollar Committed
Borrowing, the period commencing on the date of such Committed Borrowing and
ending one through seven days (subject to market availability), or one, two,
three or six months thereafter, as the Borrower may elect in the applicable
Notice of Committed Borrowing or Notice of Conversion; provided, however, that:
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(a) any Interest Period which would otherwise end on a day which is
not a Euro-Dollar Business Day shall be extended to the next succeeding
Euro-Dollar Business Day, unless such Euro-Dollar Business Day falls in
another calendar month, in which case such Interest Period shall end on the
next preceding Euro-Dollar Business Day;
(b) any Interest Period which begins on the last Euro-Dollar Business
Day of a calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest Period)
shall, subject to clause (c) immediately below, end on the last Euro-Dollar
Business Day of a calendar month; and
(c) any Interest Period applicable to any Euro-Dollar Committed Loan
of any Bank which begins before the Termination Date and would otherwise
end after the Termination Date shall end on the Termination Date;
(2) with respect to each Base Rate Borrowing, the period commencing on the
date of such Committed Borrowing and ending 90 days thereafter; provided,
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however, that:
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(a) any Interest Period (other than an Interest Period determined
pursuant to clause (b) immediately below) which would otherwise end on a
day which is not a Domestic Business Day shall be extended to the next
succeeding Domestic Business Day; and
(b) any Interest Period applicable to any Base Rate Loan of any Bank
which begins before the Termination Date and would otherwise end after the
Termination Date shall end on the Termination Date; and
10
(3) with respect to each Competitive Borrowing, the period commencing on
the date of such Competitive Borrowing and ending on such date as the Borrower
may elect in the applicable Competitive Bid Request, provided, however, that:
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(a) any Interest Period (other than an Interest Period determined
pursuant to clause (c) immediately below) applicable to a Alternative
Competitive Loan which would otherwise end on a day which is not a Domestic
Business Day shall be extended to the next succeeding Domestic Business
Day;
(b) any Interest Period (other than an Interest Period determined
pursuant to clause (c) immediately below) applicable to a Euro-Dollar
Competitive Loan which would otherwise end on a day which is not a Euro-
Dollar Business Day shall be extended to the next succeeding Euro-Dollar
Business Day unless such Euro-Dollar Business Day falls in another calendar
month, in which case such Interest Period shall end on the next preceding
Euro-Dollar Business Day; and
(c) any Interest Period applicable to any Competitive Borrowing which
begins before the Termination Date and would otherwise end after the
Termination Date shall end on the Termination Date.
"Issuing Bank" means Texas Commerce Bank National Association or such other
Bank as the Borrower may have requested and which has consented to serve as
Issuing Bank that issues a Letter of Credit.
"Joint Proxy Statement" shall mean the Joint Proxy Statement filed by the
Borrower and Millennium with the Securities and Exchange Commission on October
17, 1997.
"Joint Venture" shall mean the combination of certain of the Borrower's and
Millennium's respective petrochemicals businesses to form a joint venture, which
will be organized as a Delaware limited partnership named Equistar Chemicals, LP
and headquartered in Houston, Texas, all on terms and in a manner not materially
inconsistent with the Master Transaction Agreement, the Asset Contribution
Agreements, the Limited Partnership Agreement and the description thereof in the
Joint Proxy Statement.
"LCR" means LYONDELL-CITGO Refining Company Ltd., a Texas limited liability
company, and its successors.
"LCR Regulations" means the amended and restated limited liability company
regulations of LCR dated as of July 1, 1993, as further amended to the date
hereof and as hereafter amended from time to time, subject, however, to Section
5.07.
11
"Letter of Credit" has the meaning set forth in Section 2.03(a).
"Letter of Credit Application" has the meaning set forth in Section
2.03(a).
"Letter of Credit Fee" has the meaning set forth in Section 2.03(n).
"Letter of Credit Limit" means $75,000,000.
"Letter of Credit Outstandings" means, at any time, the sum of (a) the
aggregate Stated Amount of all outstanding Letters of Credit and (b) the amount
of all Unpaid Drawings in respect of all Letters of Credit.
"Letter of Credit Percentage" means (a) 0.75% for the period from the date
of this Agreement until the first Determination Date after the date of this
Agreement and (b) for any subsequent period from and including any Determination
Date, beginning with the first Determination Date after the date of this
Agreement, (i) 0.75% if the Applicable Percentage Ratio is less than or equal to
1.0 to 1.0 and (ii) 1.00% if the Applicable Percentage Ratio is greater than 1.0
to 1.0.
"Letter of Credit Request" has the meaning set forth in Section 2.03(a).
"Lien" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such asset.
For the purposes of this Agreement, any Person or any Subsidiary of that Person
shall be deemed to own subject to a Lien any asset which it has acquired or
holds subject to the interest of a vendor or lessor under any conditional sale
agreement, capital lease or other title retention agreement relating to such
asset.
"Loan" means a Committed Loan or a Competitive Loan and "Loans" means
Committed Loans or Competitive Loans or any combination of the foregoing.
"Loan Documents" means this Agreement (including all Exhibits), the Notes
and the Letter of Credit Applications.
"LRC" means Lyondell Refining Company, a Delaware corporation and a wholly-
owned Subsidiary of the Borrower, and its successors (including any entity that
assumes LRC's obligations under the LCR Regulations).
"Lyondell Equistar GP" means Lyondell Petrochemical G.P. Inc., a Delaware
corporation and wholly-owned Subsidiary of the Borrower, and its successors
(including any entity that assumes Lyondell Equistar GP's obligations under the
Equistar Partnership Agreement).
12
"Lyondell Equistar LP" means Lyondell Petrochemical L.P. Inc., a Delaware
corporation and wholly-owned Subsidiary of the Borrower, and its successors
(including any entity that assumes Lyondell Equistar LP's obligations under the
Equistar Partnership Agreement).
"Lyondell Equistar Partners" means Lyondell Equistar GP and Lyondell
Equistar LP.
"Lyondell Methanol GP" means Lyondell General Methanol Company, a Delaware
corporation and wholly-owned Subsidiary of the Borrower, and its successors
(including any entity that assumes Lyondell Methanol GP's obligations under the
Methanol Partnership Agreement).
"Lyondell Methanol LP" means Lyondell Limited Methanol Company, a Delaware
corporation and wholly-owned Subsidiary of the Borrower, and its successors
(including any entity that assumes Lyondell Methanol LP's obligations under the
Methanol Partnership Agreement).
"Lyondell Methanol Partners" means Lyondell Methanol GP and Lyondell
Methanol LP.
"Material Adverse Effect" means relative to the occurrence of any event and
after taking into account existing or reasonably anticipated insurance coverage
and indemnification rights with respect to such occurrence, a material adverse
effect (i) on the business, operations, affairs, assets, condition (financial or
otherwise) or results of operations of the Borrower and its Consolidated
Subsidiaries, considered as a whole, or (ii) on the ability of the Borrower to
perform its obligations hereunder and under the Notes.
"Material Plan" means a Plan or Plans having aggregate Unfunded Vested
Liabilities in excess of $25,000,000.
"MCNIC" means MCN Investment Corporation, a Michigan corporation, and its
successors and assigns.
"MCNIC Methanol GP" means MCNIC General Methanol Company, a Michigan
corporation and a wholly-owned Subsidiary of MCNIC, and its successors
(including any entity that assumes MCNIC Methanol GP's obligations under the
Methanol Partnership Agreement).
"MCNIC Methanol LP" means MCNIC General Methanol Company, a Michigan
corporation and a wholly-owned Subsidiary of MCNIC, and its successors
(including
13
any entity that assumes MCNIC Methanol LP's obligations under the Methanol
Partnership Agreement).
"Methanol Partnership Agreement" means the limited partnership agreement of
Methanol dated December 12, 1996, as amended from time to time.
"Methanol" means Lyondell Methanol Company, L.P., a Texas limited
partnership, the general partners of which on the date hereof are Lyondell
Methanol GP and MCNIC Methanol GP and the limited partners of which on the date
hereof are Lyondell Methanol LP and MCNIC Methanol LP, and its successors.
"Millennium" means Millennium Chemicals Inc., a Delaware corporation, and
its successors and assigns.
"Millennium Equistar GP" means Millennium Petrochemicals GP LLC, a Delaware
limited liability company and indirect, wholly-owned Subsidiary of Millennium,
and its successors (including any entity that assumes Millennium Equistar GP's
obligations under the Equistar Partnership Agreement).
"Millennium Equistar LP" means Millennium Petrochemicals LP LLC, a Delaware
limited liability company and an indirect, wholly-owned Subsidiary of
Millennium, and its successors (including any entity that assumes Millennium
Equistar LP's obligations under the Equistar Partnership Agreement).
"Millennium Equistar Partners" means Millennium Equistar GP and Millennium
Equistar LP.
"Net Interest" means the sum of (a) interest on Replacement Debt, minus (b)
any interest earned on the proceeds from Replacement Debt, plus (c) interest on
Replaced Debt.
"Non-Operating Special Item" means (a) any item resulting from a change in
one or more accounting principles, (b) any extraordinary or non-recurring item
or (c) any material operating item which is unusual in nature or infrequent in
occurrence; provided, however, that with respect to the designation of any item
-------- -------
(other than non-cash items) described in clause (c), the Borrower must obtain
the agreement of the Administrative Agent and the Documentation Agent that such
designation is appropriate, which agreement shall not be unreasonably withheld.
"Notes" means Committed Notes of the Borrower, substantially in the form of
Exhibit 2.05, and Competitive Notes of the Borrower, substantially in the form
of Exhibit 2.10(d), evidencing the obligation of the Borrower to repay the Loans
made
14
thereunder, and "Note" means any one of such Committed Notes or Competitive
Notes.
"Notice of Committed Borrowing" means a Notice of Committed Borrowing made
pursuant to Section 2.02 in the form of Exhibit 2.02.
"Notice of Competitive Bid Request" means a Notice of Competitive Bid
Request made pursuant to Section 2.10(a) in the form of Exhibit 2.10(b).
"Notice of Conversion" has the meaning set forth in Section 2.08.
"Obligations" means all the obligations of the Borrower now or hereafter
existing under the Loan Documents, whether for principal, Unpaid Drawings,
interest, fees, expenses, indemnification or otherwise.
"Other Equity Person" means any Person other than LCR, Equistar and
Methanol in which the Borrower owns investments which are accounted for on the
equity basis of accounting by the Borrower.
"Owner" has the meaning assigned to that term in the LCR Regulations.
"Ownership Percentage" means, at any time, the percentage represented by
the ratio of the equity interests owned, directly or indirectly, by the Borrower
in any Person to all equity interests of that Person issued and outstanding, at
that time.
"Parent" means, with respect to any Bank, any Person controlling such Bank.
"Participant" has the meaning set forth in Section 9.07(b).
"PBGC" means the Pension Benefit Guaranty Corporation or any entity
succeeding to any or all of its functions under ERISA.
"Person" means an individual, a corporation, a limited liability company, a
limited or general partnership, an association, a trust or any other entity or
organization, including a government or political subdivision or an agency or
instrumentality thereof.
"Plan" means at any time an employee pension benefit plan which is covered
by Title IV of ERISA or subject to the minimum funding standards under Section
412 of the Code and is either (i) maintained by a member of the Controlled Group
for employees of a member of the Controlled Group or (ii) maintained pursuant to
a collective bargaining agreement or any other arrangement under which more than
one employer makes contributions and to which a member of the Controlled Group
is then
15
making or accruing an obligation to make contributions or has within the
preceding five plan years made contributions.
"Prime Rate" means the prime rate of interest most recently determined by
Texas Commerce Bank National Association and thereafter entered in the minutes
of its Loan and Discount Committee, automatically fluctuating upward and
downward with and at the time specified in each such determination, without
notice to the Borrower or any other Person, which prime rate may not necessarily
represent the lowest or best rate actually charged to a customer.
"Reference Bank" means Texas Commerce Bank National Association.
"Refunding Borrowing" means a Committed Borrowing which, after application
of the proceeds thereof, results in no net increase in the outstanding principal
amount of Loans made by any Bank.
"Regulation G" shall mean Regulation G of the Board of Governors of the
Federal Reserve System, as in effect from time to time (including any successor
provision thereto).
"Regulation U" means Regulation U of the Board of Governors of the Federal
Reserve System, as in effect from time to time (including any successor
provision thereto).
"Regulation X" shall mean Regulation X of the Board of Governors of the
Federal Reserve System, as in effect from time to time (including any successor
provision thereto).
"Release" means any spilling, leaking, pumping, pouring, emitting,
emptying, discharging, injecting, escaping, leaching, dumping or disposing into
the environment (including the abandonment or discarding of barrels, containers
and other closed receptacles).
"Required Banks" means, at any date, Banks holding at least 66-2/3 percent
of the then aggregate unpaid principal amount of the Committed Loans and
participations in the Letter of Credit Outstandings, or, if no such principal
amount is then outstanding and no Letter of Credit Outstandings exist, then
Banks having at least 66-2/3 percent of the Commitments; if no such principal
amount is then outstanding and no Letter of Credit Outstandings exist and all
Commitments have been terminated, then Banks holding at least 66-2/3 percent of
the then aggregate unpaid principal amount of the Competitive Loans.
16
"Requirements of Environmental Laws" means, as to any Person, the
requirements of any Environmental Laws applicable to such Person or the
condition or operation of such Person's business or its properties, both real
and personal.
"Restricted Property" means:
(a) any plant (including fixtures and equipment) for the refining of
petroleum or the production of petrochemicals owned by the Borrower, or any
of its Subsidiaries, except (i) related facilities which in the opinion of
the Board of Directors of the Borrower are transportation or marketing
facilities and (ii) any plant for the refining of petroleum or the
production of petrochemicals which in the reasonable opinion of the Board
of Directors of the Borrower is not a principal plant of the Borrower and
its Subsidiaries;
(b) any inventory of the Borrower or a Subsidiary;
(c) any trade accounts receivable of the Borrower or any of its
Subsidiaries; and
(d) any shares of capital stock or indebtedness of a Restricted
Subsidiary owned by the Borrower or any of its Subsidiaries (excluding any
of such shares that constitute "margin stock" as defined in Regulation U).
"Restricted Subsidiary" shall mean any Subsidiary of the Borrower which
owns any Restricted Property.
"Stated Amount" means, with respect to each Letter of Credit, at any time,
the maximum amount then available to be drawn thereunder, assuming satisfaction
of all conditions to such drawing.
"Stub Period Global EBITDA" means the sum of (a) the Borrower's EBITDA,
plus (b) an amount equal to the Ownership Percentage in LCR of LCR's EBITDA.
"Subsidiary" means, with respect to any Person, any corporation or other
entity of which securities or other ownership interests having ordinary voting
power to elect a majority of the board of directors or other Persons performing
similar functions (whether or not any other class of securities has or might
have voting power by reason of the happening of a contingency) are at the time
owned or controlled directly or indirectly by that Person. Without in any other
way limiting the foregoing, none of LCR, Equistar, Methanol or any Other Equity
Person shall be deemed to be a Subsidiary of the Borrower.
17
"Termination Date" means for any Bank the earlier of (a) the later of (i)
the 364th day after the date of this Agreement and (ii) such later date as may
be accepted by such Bank from time to time pursuant to Section 2.01(b) and (b)
any date on which the Loans become due and payable in full, whether by
acceleration or otherwise in accordance with this Agreement.
"'34 Act Report" has the meaning set forth in Section 4.01(f).
"Total Capitalization" means at any time, with respect to the Borrower and
its Subsidiaries, the sum of (a) the Consolidated Debt of the Borrower and (b)
the shareholder's equity of the Borrower and its Subsidiaries determined on a
consolidated basis.
"Unfunded Vested Liabilities" means, with respect to any Plan at any time,
the amount (if any) by which (i) the present value of all vested nonforfeitable
benefits under such Plan exceeds (ii) the fair market value of all Plan assets
allocable to such benefits, all determined as of the then most recent valuation
date for such Plan, but only to the extent that such excess represents a
potential liability of a member of the Controlled Group to the PBGC or the Plan
under Title IV of ERISA.
"Unpaid Drawing" has the meaning specified in Section 2.03(g).
SECTION 1.02. Accounting Terms and Determinations. Unless otherwise
-----------------------------------
specified herein, with respect to any Person, all accounting terms used herein
shall be interpreted, all accounting determinations hereunder shall be made, and
all financial statements required to be delivered hereunder shall be prepared in
accordance with generally accepted accounting principles as in effect from time
to time, applied on a basis consistent (except for changes concurred in by such
Person's independent public accountants) with the most recent audited
consolidated financial statements of such Person and its Consolidated
Subsidiaries delivered to the Administrative Agent.
SECTION 1.03. Types of Loans and Borrowings. The term "Borrowing" denotes
-----------------------------
the aggregation of Loans of one or more Banks to be made to the Borrower or
converted or continued pursuant to Article II on a single date and for a single
Interest Period. Loans and Borrowings are classified for purposes of this
Agreement by reference to the Loans comprising such Borrowings and the pricing
of such Loans (e.g., a "Euro-Dollar Committed Borrowing" is a Borrowing
comprised of Committed Euro-Dollar Loans).
SECTION 1.04. Terms Generally. When used in this Agreement, (i) the words
---------------
"herein," "hereof," "hereto" and "hereunder" and words of similar import shall
refer to this Agreement as a whole unless otherwise specified, (ii) the words
"Article," "Section," "Exhibit" and "Schedule" shall refer to Articles and
Sections of, and
18
Exhibits and Schedules to, this Agreement unless otherwise specified. For
purposes of Section 2.18, the term "Bank" shall also include the Issuing Bank
and (iii) the word "including" (and with correlative meaning "include") means
including, without limiting the generality of any description preceding such
terms.
ARTICLE II
THE CREDITS
SECTION 2.01. Commitments to Lend. (a) Each Bank severally agrees, on
-------------------
the terms and conditions set forth in this Agreement, from time to time to lend
to the Borrower pursuant to this Section 2.01 in amounts such that the aggregate
outstanding principal amount of Committed Loans by such Bank, plus its
Commitment Percentage of the Letter of Credit Outstandings at any one time
outstanding shall not exceed the amount of its Commitment. Without in any way
limiting the foregoing, at no time will the sum of (A) the Letter of Credit
Outstandings, plus (B) the aggregate outstanding principal amount of the
Committed Loans, plus (c) the aggregate outstanding principal amount of the
Competitive Loans exceed the Committed Amount. Each Committed Borrowing under
this Section 2.01 shall be in an aggregate principal amount of $5,000,000 or any
larger multiple of $1,000,000 (except that any such Committed Borrowing may be
in an aggregate amount such that, immediately after giving effect to such
Borrowing, the sum of (A) the Letter of Credit Outstandings, plus (B) the
aggregate outstanding principal amount of the Committed Loans, plus (C) the
aggregate outstanding principal amount of the Competitive Loans will equal the
Committed Amount) and shall be made by the several Banks ratably in proportion
to their respective Commitments. Within the foregoing limits, prior to the
Termination Date the Borrower may borrow under this Section 2.01, repay, or to
the extent permitted by Section 2.13, prepay Committed Loans and re-borrow at
any time.
(b) At any time after the 61st day prior to the then current Termination
Date, the Borrower may request that the Termination Date be extended, effective
on the then current Termination Date, to the date which is the 364th day after
the then current Termination Date and the Banks may, at their option, accept or
reject such request. To request an extension, the Borrower shall notify the
Administrative Agent of the Borrower's request to extend the Termination Date,
and the Administrative Agent shall promptly notify the Banks of each such
request. Each Bank shall notify the Administrative Agent in writing within 30
days after receipt of such request whether it consents to such extension;
provided that no Bank shall be required to give notice of consent prior to 30
--------
days prior to the then current Termination Date (the later of such days shall be
referred to as the "Extension Response Date"). If any Bank shall fail to give
such notice to the Administrative Agent by the Extension Response Date, such
Bank shall be deemed to have rejected the requested extension. If all the Banks
consent to the requested extension by the Extension Response Date, the
Termination
19
Date shall be automatically extended to the date which is the 364th day after
the then current Termination Date. If fewer than all the Banks so consent (each
Bank rejecting the requested extension being referred to as a "Terminating
-----------
Bank"), the Borrower shall within five days after the Extension Response Date
----
notify the Administrative Agent (which shall promptly notify each Bank) whether
the Borrower elects to withdraw its request for an extension of the Termination
Date or to extend the Termination Date for all the Banks that have consented to
such extension. If the Borrower elects to so extend the Termination Date as to
fewer than all the Banks, the Administrative Agent shall promptly notify the
non-Terminating Banks of the Borrower's decision, and each Bank which is not a
Terminating Bank shall have the right, but not the obligation, to elect to
increase its Commitment by an amount not to exceed the aggregate amount of the
Commitments of the Terminating Banks, which election shall be made by notice
from each such non-Terminating Bank to the Administrative Agent and the Borrower
given not later than five Business Days after the date notified by the
Administrative Agent, specifying the amount of such proposed increase in such
non-Terminating Bank's Commitment.
(c) If the aggregate amount of the proposed increases in the respective
Commitments of all such non-Terminating Banks making such an election is in
excess of the aggregate Commitments of the Terminating Banks, (i) the respective
Commitments of the Terminating Banks shall be allocated pro rata among such non-
--------
Terminating Banks based on the respective amounts of the proposed increases to
their Commitments elected by such non-Terminating Banks and (ii) the respective
Commitments of such non-Terminating Banks shall be increased by the respective
amounts allocated pursuant to clause (i) above so that, after giving effect to
such Commitment terminations and increases, the aggregate amount of the
Commitments of the non-Terminating Banks will be the same as the Committed
Amount prior to the Extension Response Date. If the aggregate amount of the
proposed increases to the respective Commitments of all non-Terminating Banks
making such an election equals the aggregate Commitments of the Terminating
Banks, the respective Commitments of such non-Terminating Banks shall be
increased by the respective amounts of their proposed increases, so that after
giving effect to such Commitment terminations and increases, the aggregate
amount of the Commitments non-Terminating Banks will be the same as the
Committed Amount prior to the Extension Response Date. If the aggregate amount
of the proposed increases to the respective Commitments of all non-Terminating
Banks making such an election is less than the aggregate Commitments of the
Terminating Banks, (i) the respective Commitments of such non-Terminating Banks
shall be increased by the respective amounts of their proposed increases and
(ii) the Borrower shall have the right to add one or more banks and other
financial institutions as parties to this Agreement (in such capacity, each a
"Purchasing Bank") to replace such Terminating Banks, which Purchasing Banks
---------------
shall have aggregate Commitments not greater than those of the Terminating
Banks, less the amounts thereof, if any, assumed by the non-Terminating Banks,
as described
20
immediately above. The transfer of Commitments and outstanding Loans from
Terminating Banks to Purchasing Banks and non-Terminating Banks shall take place
on the effective date of, and pursuant to the execution, delivery, acceptance
and recording of, instruments of assignment and acceptance in accordance with
the procedures set forth in Section 9.07(c).
(d) To the extent that any Terminating Bank does not transfer all its
Commitment and outstanding Loans to a Purchasing Bank or a non-Terminating Bank
pursuant to subsection (c) immediately above, on the Termination Date applicable
to each such Terminating Bank, the Committed Amount shall be reduced by the
amount of the Commitment of each such Terminating Bank and, concurrently with
such reduction in the Committed Amount, the Borrower shall pay the outstanding
principal amount of the Loans of each such Terminating Bank, together with all
accrued and unpaid interest thereon, each such Terminating Bank's ratable share
of all accrued and unpaid Facility Fees and all other amounts then owing to such
Terminating Bank hereunder, in each case, to the extent not transferred pursuant
to subsection (c) immediately above.
(e) Each Terminating Bank's Commitment shall expire no later than its
Termination Date and each Terminating Bank shall have no further rights or
obligations hereunder following (i) the transfer of such Terminating Bank's
Commitment and outstanding Loans from such Terminating Bank to Purchasing Banks
or non-Terminating Banks and (ii) the payment in full of all amounts due and
owing to such Terminating Bank on its Termination Date.
(f) Notwithstanding any other provision of this Section 2.01, the
Administrative Agent and the Borrower shall have the right, without consent of
the Required Banks, to amend the procedures for the extension of the Termination
Date set forth in this Section 2.01 to the extent the Administrative Agent shall
determine such amendment to be necessary to ensure that the Banks will not be
required to maintain capital against their Commitments under applicable rules,
regulations and interpretations of bank regulatory authorities; provided, that
--------
no such amendment shall permit the extension of any Bank's Commitment without
the consent of such Bank.
SECTION 2.02. Notice of Committed Borrowings. The Borrower shall give
------------------------------
the Administrative Agent notice (a "Notice of Committed Borrowing")
substantially in the form of Exhibit 2.02 not later than 10:00 a.m. (Houston
time) on (i) the date of each Base Rate Borrowing or each Euro-Dollar Committed
Borrowing with an Interest Period of seven days or less and (ii) the third Euro-
Dollar Business Day before each Euro-Dollar Committed Borrowing with an Interest
Period greater than seven days, specifying:
21
(a) the date of such Committed Borrowing, which shall be a Domestic
Business Day in the case of a Base Rate Borrowing or a Euro-Dollar Business
Day in the case of a Euro-Dollar Committed Borrowing;
(b) the aggregate amount of such Committed Borrowing;
(c) whether the Loans comprising such Committed Borrowing are to be
Base Rate Loans or Euro-Dollar Committed Loans;
(d) in the case of a Euro-Dollar Committed Borrowing, the duration of
the Interest Period applicable thereto, subject to the provisions of the
definition of Interest Period;
(e) the aggregate outstanding principal amount of Debt of the
Borrower and its Subsidiaries incurred after the Effective Date and, if
required, a calculation as of the date of such Notice of Committed
Borrowing pursuant to Section 5.09(a);
(f) more than one Notice of Committed Borrowing may be given on any
Domestic Business Day or any Euro-Dollar Business Day, as the case may be.
SECTION 2.03. Letters of Credit.
-----------------
(a) Subject to and upon the terms and conditions hereof and the execution
and delivery of a letter of credit application ("Letter of Credit Application"),
and a letter of credit request ("Letter of Credit Request") substantially in the
form of Exhibit 2.03(b) , the Issuing Bank agrees that it will, at any time and
from time to time on or after the Effective Date and prior to the Termination
Date, renew, extend and issue for the account of the Borrower (in support of its
obligations or the obligations of its Consolidated Subsidiaries) one or more
irrevocable standby letters of credit (each such letter of credit, a "Letter of
Credit"); provided, however, that the Issuing Bank shall not extend, renew or
-------- -------
issue any Letter of Credit if at the time of such issuance, extension or renewal
and after giving effect thereto:
(i) the sum of the Letter of Credit Outstandings at such time, plus
the aggregate principal amount of all Loans then outstanding or requested
would exceed the Commitment Amount; or
(ii) the Letter of Credit Outstandings at such time, would exceed the
Letter of Credit Limit; or
22
(iii) the expiry date or, in the case of any Letter of Credit
containing an expiry date that is extendible at the option of the Issuing
Bank, the initial expiry date of such Letter of Credit, is a date that is
later than the Termination Date; or
(iv) such issuance, renewal or extension shall be prohibited by
applicable law.
(b) The Issuing Bank shall neither renew nor permit the renewal of any
Letter of Credit if any of the conditions precedent to such renewal set forth in
Section 3.02 are not satisfied or, after giving effect to such renewal, the
expiry date of such Letter of Credit would be a date that is later than the
Termination Date.
(c) Whenever the Borrower requests that a Letter of Credit be issued or
renewed for its account or an existing expiry date be extended, it shall forward
an executed Letter of Credit Request and Letter of Credit Application to the
Issuing Bank (with copies to be sent to the Administrative Agent (if different
from the Issuing Bank)) (i) in the case of a Letter of Credit to be issued or
renewed at least four Domestic Business Days' prior to the proposed date of
issuance or renewal and (ii) in the case of the extension of the existing expiry
date of any Letter of Credit, at least five Domestic Business Days prior to the
date on which the Issuing Bank must notify the beneficiary thereof that the
Issuing Bank does not intend to extend such existing expiry date. Each Letter
of Credit shall be denominated in U.S. dollars, shall expire no later than the
date specified in paragraph (a) above, shall not be in an amount greater than is
permitted under this Section 2.03 and shall be in such form as may be approved
from time to time by the Issuing Bank and the Borrower.
(d) The making of each Letter of Credit Request shall be deemed to be a
representation and warranty by the Borrower that such Letter of Credit may be
renewed, extended or issued in accordance with, and will not violate the
requirements of this Agreement. Unless the Issuing Bank has received notice
from the Administrative Agent (if different from the Issuing Bank) before it
issues or renews the respective Letter of Credit or extends the existing expiry
date of a Letter of Credit that one or more of the conditions specified in
Article III are not then satisfied, or that the renewal, extension or issuance
of such Letter of Credit would violate any of the terms of this Agreement, then
the Issuing Bank may renew, extend or issue the requested Letter of Credit for
the account of the Borrower (in support of its obligations and the obligations
of its Consolidated Subsidiaries) in accordance with the Issuing Bank's usual
and customary practices. Upon its issuance or renewal of any Letter of Credit
or the extension of the existing expiry date of any Letter of Credit, as the
case may be, the Issuing Bank shall promptly notify the Borrower, the
Administrative Agent and each Bank of such issuance, renewal or extension, which
notice shall be accompanied by a copy of the Letter of Credit actually issued or
renewed or a copy of any
23
amendment extending the existing expiry date of any Letter of Credit, as the
case may be.
(e) Upon the renewal, extension or issuance by the Issuing Bank of each
Letter of Credit, the Issuing Bank shall be deemed to have sold and transferred
to each Bank, and each Bank shall be deemed irrevocably and unconditionally to
have purchased and received from the Issuing Bank, without recourse or warranty,
an undivided interest and participation, to the extent of such Bank's Commitment
Percentage in each such Letter of Credit (including extensions of the expiry
date thereof), each substitute letter of credit, each drawing made thereunder
and the Obligations of the Borrower under this Agreement and the other Loan
Documents with respect thereto and any security, if any, therefor.
(f) In determining whether to pay under any Letter of Credit, the Issuing
Bank shall have no obligation relative to the Banks other than to confirm that
any documents required to be delivered under such Letter of Credit appear to
have been delivered and that they appear to comply on their face with the
requirements of such Letter of Credit.
(g) Upon the receipt by the Issuing Bank of any documentation presented
for a drawing from a beneficiary under a Letter of Credit, the Issuing Bank
promptly will provide the Administrative Agent (if different from the Issuing
Bank), the Banks and the Borrower with telecopy notice thereof and the Issuing
Bank will promptly examine the documentation presented for such drawing in
accordance with its customary procedures for conformity to the requirements of
such Letter of Credit. The Borrower hereby agrees to reimburse the Issuing Bank
by making payment to the Administrative Agent in immediately available funds
(which payment may be made by application of the proceeds of Loans made to the
Borrower in accordance with this Agreement) for any payment so made by the
Issuing Bank under any Letter of Credit issued by it (each such amount so paid
until reimbursed by the Borrower, including by application of the proceeds of
Loans to the Borrower in accordance with this Agreement, an "Unpaid Drawing")
upon demand on or after the date of such payment, with interest on the amount so
paid by the Issuing Bank, to the extent not reimbursed prior to 2:00 p.m.
(Houston time) on the date of such payment, from and including the date paid to
but excluding the date reimbursement is made as provided above, at a rate per
annum equal to the lesser of (i) the sum of 2 percent, plus the Base Rate, or
(ii) the Highest Lawful Rate.
(h) In the event that the Issuing Bank makes any payment under any Letter
of Credit and the Borrower shall not have reimbursed such amount in full to the
Issuing Bank (including by any application of the proceeds of Loans) pursuant to
paragraph (g) above, the Issuing Bank shall promptly notify the Administrative
Agent (if different from the Issuing Bank) and the Administrative Agent, shall
promptly notify each Bank
24
of such failure, and each Bank shall promptly and unconditionally pay the
Administrative Agent for the account of the Issuing Bank the amount of such
Bank's Commitment Percentage of such unreimbursed payment in dollars and in
funds immediately available in Houston. If the Administrative Agent so notifies,
prior to 11:00 a.m. (Houston time) on any Domestic Business Day, any Bank
required to fund a payment under a Letter of Credit, such Bank shall make
available to the Administrative Agent for the account of the Issuing Bank such
Bank's Commitment Percentage of the amount of such payment on such Domestic
Business Day in funds immediately available in Houston. If and to the extent
such Bank shall not have so made its Commitment Percentage of the amount of such
payment available to the Administrative Agent for the account of the Issuing
Bank, such Bank agrees to pay to the Administrative Agent for the account of the
Issuing Bank, forthwith on demand such amount, together with the interest
thereon, for each day from such date until the date such amount is paid to the
Administrative Agent for the account of the Issuing Bank at the Federal Funds
Rate. The failure of any Bank to make available to the Administrative Agent for
the account of the Issuing Bank, its Commitment Percentage of any payment under
any Letter of Credit shall not relieve any other Bank of its obligation
hereunder to make available to the Administrative Agent for the account of the
Issuing Bank its Commitment Percentage of any payment under any Letter of Credit
on the date required, as specified above, but no Bank shall be responsible for
the failure of any other Bank to make available to the Administrative Agent for
the account of the Issuing Bank such other Bank's Commitment Percentage of any
such payment.
(i) Whenever the Issuing Bank receives a payment of a reimbursement
obligation as to which the Administrative Agent has received for the account of
the Issuing Bank any payments from a Bank pursuant to paragraph (h) above, the
Issuing Bank shall pay to the Administrative Agent (if different from the
Issuing Bank) and the Administrative Agent shall promptly pay to each Bank which
has paid its Commitment Percentage thereof, in dollars and in same day funds, an
amount equal to such Bank's Commitment Percentage thereof together with any
interest on such reimbursement obligation allocable to such Bank's Commitment
Percentage paid by the Borrower to the Issuing Bank and received by the
Administrative Agent pursuant to paragraph (g) above.
(j) The obligations of the Banks to make payments to the Administrative
Agent for the account of the Issuing Bank with respect to Letters of Credit
shall be irrevocable and not subject to any qualification or exception
whatsoever (except for the gross negligence or willful misconduct of the Issuing
Bank) and shall be made in accordance with the terms and conditions of this
Agreement under all circumstances, including any of the following circumstances:
25
(1) any lack of validity or enforceability of this Agreement or any
of the other Loan Documents;
(2) the existence of any claim, setoff, defense or other right which
the Borrower may have at any time against a beneficiary named in a Letter
of Credit, any transferee of Letter of Credit, any Agent, the Issuing Bank,
any other Bank, or any other Person, whether in connection with this
Agreement, any Letter of Credit, the transactions contemplated herein or
any unrelated transactions;
(3) any draft, certificate or any other document presented under the
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;
(4) the surrender or impairment of any security for the performance
or observance of any of the terms of any of the Loan Documents; or
(5) the occurrence of any Default or Event of Default.
(k) The Borrower also agrees with the Issuing Bank and the Banks that the
Issuing Bank shall not be responsible for, and the Borrower's reimbursement
obligations under paragraph (g) above are absolute and unconditional and shall
not be affected by any of the following (absent any gross negligence, willful
misconduct or violation of law on the part of any of the Issuing Bank, the
Agents and the other Banks): the validity or genuineness of documents or any
endorsements thereon, even though such documents shall in fact prove to be
invalid, fraudulent or forged, or any dispute between or among the Borrower and
the beneficiary of any letter of Credit or any other party to which such Letter
of Credit may be transferred or any claims whatsoever of the Borrower against
any beneficiary of such Letter of Credit or any such transferee or any other
matter or event similar to any of the foregoing or any setoff, counterclaim or
defense to payment which the Borrower may have.
(l) The Issuing Bank, its officers, directors, agents and employees, shall
not be liable for any error, omission, interruption or delay in transmission,
dispatch or delivery of any message or advice, however transmitted, in
connection with any Letter of Credit, except for errors, omissions,
interruptions or delays caused by the Issuing Bank's gross negligence or willful
misconduct or violation of law. IT IS THE EXPRESS INTENTION OF THE PARTIES
HERETO THAT THE ISSUING BANK SHALL BE INDEMNIFIED AND HELD HARMLESS AGAINST ANY
AND ALL LOSSES, LIABILITIES, CLAIMS, DEFICIENCIES, JUDGMENTS OR REASONABLE
EXPENSES ARISING OUT OF OR RESULTING FROM THE ORDINARY NEGLIGENCE (WHETHER SOLE
OR CONTRIBUTORY) OF THE ISSUING BANK IN CONNECTION WITH ANY SUCH ERROR,
OMISSION, INTERRUPTION OR DELAY AS AFORESAID. The Borrower agrees that
26
any action taken or omitted by the Issuing Bank under or in connection with any
Letter of Credit or the related drafts or documents if done in accordance with
the standards of care specified in the Uniform Customs and Practice for
Documentary Credits, International Chamber of Commerce, as in effect from time
to time, and, to the extent not inconsistent therewith, the Uniform Commercial
Code of the State of Texas, shall not result in any liability of the Issuing
Bank to the Borrower.
(m) To the extent that any provision of any Letter of Credit Application
related to any Letter of Credit is inconsistent with the provisions of this
Agreement, the provisions of this Agreement shall control and no Letter of
Credit Application or any other document relating to any Letter of Credit shall
give the Agents or the Banks any additional rights than they would otherwise
have under this Agreement.
(n) The Borrower shall, on the date of issuance or any extension or
renewal of any Letter of Credit and at such other time or times as such charges
are customarily made by the Issuing Bank, pay an upfront fee (in each case, a
"Letter of Credit Fee") to the Administrative Agent in respect of each Letter of
Credit so issued in an amount equal to the Letter of Credit Percentage in effect
from time to time of the face amount of such Letter of Credit, as the case may
be, plus a fronting fee for the benefit of the Issuing Bank equal to 0.125%
(computed on an annualized basis), plus the Issuing Bank's issuance, amendment
and other administrative fees and charges customarily charged to its customers
similarly situated. Such Letter of Credit Fee (but not such customary issuance,
amendment fee or other administrative fees and charges, or the fronting fee, all
of which shall be solely for the account of the Issuing Bank) shall be for the
accounts of the Banks in accordance with their respective Commitment
Percentages. Such upfront fees and fronting fees shall be based on a 360-day
year, except that if the use of a 360-day year would cause any such fees
constituting interest (within the meaning of all applicable laws) to exceed the
Highest Lawful Rate, then such interest and fees will be computed on the basis
of a year of 365 days (or 366 in a leap year).
SECTION 2.04. Notice to Banks; Funding of Committed Loans.
-------------------------------------------
(a) Upon receipt of a Notice of Committed Borrowing, the Administrative
Agent shall promptly notify each Bank of the contents thereof and of such Bank's
share (if any) of such Committed Borrowing and such Notice of Committed
Borrowing shall not thereafter be revocable by the Borrower.
(b) Not later than 12:00 noon (Houston time) on the date of each Committed
Borrowing, each Bank participating therein shall (except as provided in
subsection (c) of this Section) make available its share of such Committed
Borrowing, in funds immediately available in Houston, to the Administrative
Agent at its address specified in or pursuant to Section 9.01. Unless the
Administrative Agent determines that any
27
applicable condition specified in Article III has not been satisfied, the
Administrative Agent will make the funds so received from the Banks available to
the Borrower at the Administrative Agent's aforesaid address.
(c) If any Bank makes a new Committed Loan hereunder on a day on which the
Borrower is to repay all or any part of an outstanding Committed Loan from such
Bank, such Bank shall apply the proceeds of its new Committed Loan to make such
repayment and only an amount equal to the difference (if any) between the amount
being borrowed and the principal amount being repaid shall be made available by
such Bank to the Administrative Agent as provided in subsection (b) immediately
above, or remitted by the Borrower to the Administrative Agent as provided in
Section 2.14, as the case may be.
(d) Unless the Administrative Agent shall have received notice from a Bank
prior to or on the date of any Committed Borrowing that such Bank will not make
available to the Administrative Agent such Bank's share of such Committed
Borrowing, the Administrative Agent may assume that such Bank has made such
share available to the Administrative Agent on the date of such Committed
Borrowing in accordance with subsections (b) and (c) of this Section 2.04 and
the Administrative Agent may, in reliance upon such assumption, make available
to the Borrower on such date a corresponding amount. If and to the extent that
such Bank shall not have so made such share available to the Administrative
Agent, such Bank and the Borrower severally agree to repay to the Administrative
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 Administrative Agent, at
(i) in the case of the Borrower, a rate per annum equal to the higher of the
Federal Funds Rate and the interest rate applicable thereto pursuant to Section
2.07 and (ii) in the case of such Bank, the Federal Funds Rate. If such Bank
shall repay to the Administrative Agent such corresponding amount, such amount
so repaid shall constitute such Bank's Committed Loan included in such Committed
Borrowing for purposes of this Agreement. In no event shall any payment by the
Administrative Agent, or repayment by the Borrower, of any amount pursuant to
this subsection (d) relieve the Bank that failed to make available its share of
the related Committed Borrowing of its obligations hereunder.
SECTION 2.05. Committed Notes. (a) The Committed Loans of each Bank
---------------
shall be evidenced by a single Committed Note payable to the order of such Bank
for the account of its Applicable Lending Office in an amount equal to such
Bank's Commitment.
(b) Upon receipt of each Bank's Committed Note pursuant to Section 3.01,
the Administrative Agent shall send by overnight mail such Committed Note to
such Bank. Each Bank shall record the date, amount and maturity of each
Committed Loan
28
made by it and the date and amount of each payment of principal made by the
Borrower with respect thereto, and prior to any transfer of its Committed Note
shall endorse on the schedule forming a part thereof appropriate notations to
evidence the foregoing information with respect to each such Committed Loan then
outstanding; provided, however, that the failure of any Bank to make any such
-------- -------
recordation or endorsement shall not affect the obligations of the Borrower
hereunder or under the Committed Notes. Each Bank is hereby irrevocably
authorized by the Borrower so to endorse its Committed Note and to attach to and
make a part of its Committed Note a continuation of any such schedule as and
when required.
SECTION 2.06. Maturity of Committed Loans. Subject to any rights of the
---------------------------
Borrower under Section 2.08, each Committed Loan included in any Committed
Borrowing shall mature, and the principal amount thereof shall be due and
payable, on the last day of the Interest Period applicable to such Committed
Borrowing.
SECTION 2.07. Interest Rates. (a) Each Base Rate Loan shall bear
--------------
interest on the outstanding principal amount thereof, for each day from the date
such Committed Loan is made until it becomes due, at a rate per annum equal to
the Base Rate for such day. Such interest shall be payable for each Interest
Period on the last day thereof. Any overdue principal of and, to the extent
permitted by law, overdue interest on any Base Rate Loan shall bear interest,
payable on demand, for each day until paid at a rate per annum equal to the
lesser of (i) the sum of 2 percent, plus the rate otherwise applicable to Base
Rate Loans for such day, or (ii) the Highest Lawful Rate.
(b) Each Euro-Dollar Committed Loan shall bear interest on the outstanding
principal amount thereof, for the Interest Period applicable thereto, at a rate
per annum equal to the lesser of (i) the sum of the Euro-Dollar Margin (as in
effect on the first day of such Interest Period), plus the Euro-Dollar Rate or
(ii) the Highest Lawful Rate. Such interest shall be payable for each Interest
Period on the last day thereof and, if such Interest Period is longer than three
months, at intervals of three months after the first day thereof.
"Euro-Dollar Margin" means, for any Interest Period, the Applicable Margin
for Euro-Dollar Committed Loans.
"Euro-Dollar Rate" means, for the Interest Period for each Euro-Dollar
Committed Loan comprising part of the same Borrowing, an interest rate per annum
equal to the rate per annum at which deposits in U.S. dollars are offered by the
principal office of the Reference Bank to first class banks in the interbank
eurodollar market selected by the Reference Bank, as shown on the Dow Xxxxx
Telerate Screen (Pages 314, 872 and 4833) or, if the Dow Xxxxx Telerate Screen
is not available, as shown on the Bloomberg Screen British Banker's LIBOR
fixing, at or around 9:00 a.m. (Houston time), two (2) Business Days before the
first day of such Interest Period (except in the
29
case of a Borrowing with an Interest Period of 7 days or less, which shall be
10:30 a.m. (Houston time) on the Business Day of such Borrowing) in an amount
substantially equal to the amount of the Euro-Dollar Committed Loan of the
Reference Bank comprising part of such Borrowing to be outstanding during such
Interest Period and for a period equal to such Interest Period.
(c) Any overdue principal of and, to the extent permitted by law, overdue
interest on any Euro-Dollar Committed Loan shall bear interest, payable on
demand, for each day from and including the date payment thereof was due to but
excluding the date of actual payment, at a rate per annum equal to the lesser of
(i) the sum of 2 percent, plus the rate applicable to Base Rate Loans for such
day or (ii) the Highest Lawful Rate.
(d) The Administrative Agent shall determine each interest rate applicable
to the Committed Loans hereunder. The Administrative Agent shall give prompt
notice to the Borrower and the participating Banks by telecopy, telex or cable
of each rate of interest so determined, and its determination thereof shall be
conclusive in the absence of manifest error.
(e) The Reference Bank, if not the Administrative Agent, agrees to use its
best efforts to furnish quotations to the Administrative Agent as contemplated
by this Section. If the Reference Bank, if not the Administrative Agent, does
not furnish a timely quotation, the Administrative Agent shall determine the
relevant interest rate on the basis of the quotation or quotations furnished by
the remaining Reference Bank or, if none of such quotations is available on a
timely basis, the provisions of Section 8.01 shall apply.
(f) Competitive Loans shall bear interest as set forth in Section 2.10(i).
SECTION 2.08. Conversions and Continuances. At the end of any Interest
----------------------------
Period, the Borrower shall have the option to convert or continue all or a
portion, equal to not less than $5,000,000 ($1,000,000 in the case of
conversions or continuations into Base Rate Loans), of the outstanding principal
amount of one Type of its Committed Loans made pursuant to one or more Committed
Borrowings into a Committed Borrowing or Committed Borrowings of the other Type
or Types of Committed Loans; provided, however, that except as otherwise
-------- -------
provided in Section 8.03, no partial conversion or continuation of Euro-Dollar
Committed Loans shall reduce the outstanding principal amount of Euro-Dollar
Committed Loans made pursuant to any single Borrowing to less than $5,000,000
and (ii) Base Rate Loans may be converted into Euro-Dollar Committed Loans or
continued as Base Rate Loans, and Euro-Dollar Committed Loans may be continued
as Euro-Dollar Committed Loans or converted into Base Rate Loans for additional
Interest Periods if and only if, in either case no Default or Event of Default
is in existence on the date of the conversion or
30
continuation. Each such conversion or continuation shall be effected by the
Borrower giving the Administrative Agent notice substantially in the form of
Exhibit 2.08 (each a "Notice of Conversion") prior to 11:00 a.m. (Houston time)
at least (a) three Euro-Dollar Business Days prior to the date of such
conversion or continuation in the case of a conversion or continuation into
Euro-Dollar Committed Loans (unless such conversion or continuation of Euro-
Dollar Committed Loans is into an Interest Period of seven days or less, in
which event such notice shall be delivered no later than 10:30 a.m. (Houston
time) on the Business Day of such Borrowing) and (b) one Domestic Business Day
in the case of a conversion or continuation into Base Rate Loans, specifying
each Type of Borrowing (or portions thereof) to be so converted or continued
and, if to be converted or continued into Euro-Dollar Committed Loans, the
Interest Period to be initially applicable thereto. The Administrative Agent
shall promptly give the Banks written or telephonic notice (promptly confirmed
in writing) of any such proposed conversion or continuation affecting any of its
Loans.
SECTION 2.09. Pro Rata Committed Borrowings. All Committed Borrowings
-----------------------------
under this Agreement shall be incurred from the Banks ratably in proportion to
their respective Commitments. It is understood that no Bank shall be
responsible for any default by any other Bank in its obligation to make
Committed Loans hereunder and that each Bank shall be obligated to make the
Loans provided to be made by it hereunder, regardless of the failure of any
other Bank to fulfill its Commitment hereunder.
SECTION 2.10. Competitive Borrowings. (a) The Borrower may, from time
----------------------
to time, request the Auction Agent to deliver to the Banks a request for
Competitive Bids, to which any one or more of the Banks may, but are not
obligated to, respond. To request a Competitive Bid, the Borrower shall hand
deliver, telex or telecopy to the Auction Agent a duly completed request for
Competitive Bid in the form of Exhibit 2.10(a) (a "Competitive Bid Request"), to
--------------- -----------------------
be received by the Auction Agent (i) in the case of: a Euro-Dollar Competitive
Loan, not later than 9:00 a.m. (Houston time), four Euro-Dollar Business Days
before the Borrowing Date specified for a proposed Competitive Borrowing and
(ii) in the case of an Alternate Competitive Loan, not later than 9:00 a.m.
(Houston time), one Domestic Business Day before the Borrowing Date specified
for a proposed Competitive Borrowing. A Competitive Bid Request that does not
conform substantially to the format of Exhibit 2.10(a) may be rejected in the
---------------
Auction Agent's sole discretion, and the Auction Agent shall promptly notify the
Borrower of such rejection by telex or telecopier. Each Competitive Bid Request
shall in each case refer to this Agreement and specify (i) whether the
Competitive Loans then being requested are to be Euro-Dollar Competitive Loans
or Alternate Competitive Loans, (ii) the Borrowing Date of such Competitive
Loans and the aggregate principal amount thereof which shall not be less than
$5,000,000 or greater than the unused Committed Amount on such Borrowing Date
and shall be in integral multiples of $1,000,000), (iii) the Interest Period
with respect thereto and (iv) the total Borrowings
31
(Committed and Competitive) outstanding hereunder. Upon receipt of a
satisfactory Competitive Bid Requests, the Auction Agent shall forward a Notice
of Competitive Bid Request on to each of the Banks by telex or telecopier on the
terms and conditions of this Agreement, to make Competitive Bids pursuant to
such Notice of Competitive Bid Request. The Notice of Competitive Bid Request
with respect to any proposed Competitive Borrowing shall be given to the Banks
promptly, and in no event later than 12:00 noon (Houston time), (i) in the case
of Euro-Dollar Competitive Loans, four Euro-Dollar Business Days before the
Borrowing Date specified for such proposed Competitive Borrowing, and (ii) in
the case of Alternate Competitive Loans, one Business Day before the Borrowing
Date specified for such Competitive Borrowing.
(b) (i) Each Bank may, in its sole discretion, make a Competitive Bid to
the Borrower responsive to each Notice of Competitive Bid Request. Each
Competitive Bid by a Bank must be submitted to the Auction Agent via telex or
telecopier, (A) in the case of Euro-Dollar Competitive Loans, not later than
8:30 a.m. (Houston time), three Euro-Dollar Business Days before the Borrowing
Date specified for a proposed Competitive Borrowing and (B) in the case of
Alternate Competitive Loans, not later than 8:30 a.m. (Houston time), on the
Borrowing Date specified for a proposed Competitive Borrowing. Each Competitive
Bid shall refer to this Agreement and (A) specify the principal amount which
shall not be less than $5,000,000 and integral multiples of $1,000,000, or (B)
specify the interest rate or rates at which the Bank is prepared to make the
Competitive Loan and (C) confirm the Borrowing Date and the Interest Period (if
any) with respect thereto specified by the Borrower. If any Bank shall elect
not to make a Competitive Bid, such Bank shall so notify the Auction Agent via
telex or telecopier (A) in the case of Euro-Dollar Competitive Loans, not later
than 8:30 a.m. (Houston time), three Euro-Dollar Business Days before the
Borrowing Date specified for a proposed Competitive Borrowing and (B) in the
case of Alternate Competitive Loans, not later than 8:30 a.m. (Houston time), on
the Borrowing Date specified for a proposed Competitive Borrowing; provided,
--------
however, that failure by any Bank to give such notice shall not cause such Bank
-------
to be obligated to make any Competitive Loan as part of such Competitive
Borrowing and shall constitute rejection. A Competitive Bid submitted by a Bank
pursuant to this paragraph shall be irrevocable;
(ii) with respect to any Competitive Bid for a Euro-Dollar Competitive
Borrowing, the interest rate shall be calculated on the basis of the LIBO Rate,
which means an interest rate per annum equal to the arithmetic average (rounded
upwards, if not already a whole multiple of 1/16 of 1%, to the next higher 1/16
of 1%) of the rate per annum at which deposits in U.S. dollars are offered in
immediately available funds to the principal office of the Reference Bank in
London, England (or if a Reference Bank does not at the time any such
determination is made maintain an office in London, England, the principal
office of any Affiliate of such Reference Bank in London, England), at 11:00
a.m., London time (or as soon thereafter as practicable),
32
two Business Days before the first day of such Interest Period with a maturity
equal to the applicable Interest Period.
(c) The Auction Agent will arrange the bids in ascending yield order. In
the case of (i) Euro-Dollar Competitive Loans, not later than 9:00 a.m. (Houston
time), three Euro-Dollar Business Days before the proposed Borrowing Date
specified for a proposed Competitive Borrowing and (ii) Alternate Competitive
Loans, not later than 9:00 a.m. (Houston time), on the Borrowing Date specified
for a proposed Competitive Borrowing, the Auction Agent shall notify the
Borrower of the terms (i) of any Competitive Bid submitted by a Bank that is in
accordance with subsection (b) of this Section and (ii) of any subsequent
Competitive Bids submitted by such Bank with respect to the same Notice of
Competitive Bid Request; provided that any such subsequent Competitive Bid shall
--------
be disregarded by the Auction Agent unless such subsequent Competitive Bid is
submitted solely to correct a manifest error in such former Competitive Bid.
The Auction Agent's notice to the Borrower shall specify (i) the aggregate
principal amount of Competitive Bids for which offers have been received for
each Interest Period specified in the related Notice of Competitive Bid Request,
(ii) the respective principal amounts and interest rates, so offered and (iii)
if applicable, limitations on the aggregate principal amount of Competitive Bids
for which offers in any single Notice of Competitive Bid Request may be
accepted.
(d) If offers are made by two or more Banks with the same interest rates
for a greater aggregate principal amount of Competitive Loans than can be
accepted for the related Interest Period (after giving effect to the acceptance
of all lower Interest Rates, as the case may be, properly offered for such
Interest Period), the principal amount of Competitive Loans which can be
accepted shall be allocated by the Borrower among such Banks as nearly as
possible (in such multiples of $1,000,000 (or the approximate equivalent amount
thereof), as the Borrower may deem appropriate) in proportion to the aggregate
principal amount of such offers. Determinations by the Borrower of the amounts
of Competitive Loans to be made by each Bank shall be conclusive in the absence
of manifest error.
(e) The Borrower may in its sole and absolute discretion, subject only to
the provisions of this paragraph, accept or reject any Competitive Bid and shall
notify Auction Agent by telex or telecopier whether and to what extent it has
decided to accept or reject the bids (i) in the case of Euro-Dollar Competitive
Loans, not later than 10:00 a.m. (Houston time), three Euro-Dollar Business Days
before the Borrowing Date specified for a proposed Competitive Borrowing and
(ii) in the case of Alternate Competitive Loans, not later than 10:00 a.m.
(Houston time), on the Borrowing Date specified for a proposed Competitive
Borrowing; provided, however, that (y) the failure of the Borrower to accept or
-------- -------
reject any bid within the time period specified shall be deemed to be a
rejection of such bid and (z) the aggregate amount of the Competitive Bids
accepted by the Borrower shall not exceed the principal amount specified in the
33
Notice of Competitive Bid Request. Failure to notify the Auction Agent of
acceptance by said time shall be deemed a rejection of a Competitive Bid.
(f) Upon receipt of a notice of the Borrower's acceptance of a Competitive
Bid, the Auction Agent shall promptly notify each Bank of the contents thereof
and of such Bank's ratable share (if any) of such Competitive Loan and such
notice of the Borrower's acceptance of a Competitive Bid shall not thereafter be
revocable by the Borrower giving such notice. The Borrower shall notify the
Auction Agent and the Auction Agent shall also notify each Bank of the aggregate
principal amount of all Competitive Bids accepted. Promptly, upon notice from
the Auction Agent of the Borrower's acceptance of a Competitive Bid, the
successful bidders will become bound, subject to the other applicable conditions
hereof, to make the Competitive Loan in respect of which its bid has been
accepted and shall forward the required funds to the Borrower on the Borrowing
Date indicated in its Competitive Bid.
(g) All Competitive Loans shall reduce the unused portion of the Committed
Amount by the total amount advanced; provided, however, that each Bank's
--------- --------
percentage of the aggregate unused Commitment shall remain unchanged, regardless
of the extent to which such Bank participates in any Competitive Borrowing.
(h) (i) The Competitive Loan of each Bank shall be evidenced by a single
Competitive Note payable to the order of such Bank for the account of its
Applicable Lending Office in an amount equal to the Committed Amount. (ii) Upon
receipt of each Bank's Competitive Note pursuant to Section 3.01, the
Administrative Agent shall send by overnight mail said Competitive Note to such
Bank. Each Bank shall record the date, amount and maturity of each Competitive
Loan made by it and the date and amount of each payment of principal made by the
Borrower with respect thereto, and prior to any transfer of its Competitive Note
shall endorse on the schedule forming a part thereof appropriate notations to
evidence the foregoing information with respect to each such Competitive Loan
then outstanding; provided, however, that the failure of any Bank to make any
-------- -------
such recordation or endorsement shall not affect the obligations of the Borrower
hereunder or under the Competitive Notes. Each Bank is hereby irrevocably
authorized by the Borrower so to endorse its Competitive Note and to attach to
and make a part of its Competitive Note a continuation of any such schedule as
and when required.
(i) Each Competitive Loan shall bear interest at the rate set forth in the
Competitive Bid by the bidding Bank which has been accepted by the Borrower.
Any overdue principal of and, to the extent permitted by law, overdue interest
on any Competitive Loan shall bear interest, payable on demand, for each day
from and including the date payment thereof was due to but excluding the date of
actual payment, at a rate per annum equal to the lesser of (i) the sum of 2
percent, plus the rate applicable to Base Rate Loans for such day or (ii) the
Highest Lawful Rate.
34
SECTION 2.11. Optional Termination or Reduction of Commitments. The
------------------------------------------------
Borrower may, upon at least three Domestic Business Days' notice to the
Administrative Agent, (i) terminate the Commitments at any time, if no Loans or
Letters of Credit are outstanding at such time or (ii) ratably reduce from time
to time by an aggregate amount of $5,000,000 or any larger multiple of
$1,000,000, the Committed Amount in excess of the sum of the aggregate
outstanding principal amount of the Loans, plus the Letter of Credit
Outstandings; provided, however, that if no Loans are then outstanding, the
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Borrower may terminate the Commitments at any time when there are outstanding
Letters of Credit by depositing with the Administrative Agent such amount of
cash as is equal to the aggregate Stated Amount of the Letters of Credit then
outstanding to be held in an interest bearing account with the Administrative
Agent, all such cash and interest to be held by the Administrative Agent as
security for the obligations of the Borrower in respect of such Letters of
Credit; provided further, that the Borrower shall remain liable for any expenses
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and other liabilities in respect of such Letters of Credit on terms consistent
with Section 9.04, but for all other purposes of this Agreement and the other
Loan Documents the Obligations will be deemed paid in full and not outstanding.
Any reduction of the Commitments shall apply proportionately to the Commitment
of each Bank in accordance with its Commitment Percentage and any such reduction
shall be permanent.
SECTION 2.12. Mandatory Termination of Commitments. The Commitment of
------------------------------------
each Bank shall terminate on the Termination Date, and all Loans then
outstanding (together with accrued interest thereon) shall be due and payable on
such date; provided, however, if there are any Letter of Credit Outstandings or
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unpaid Loans on the Termination Date, all obligations of the Borrower and all
rights and remedies of the Banks hereunder shall continue, subject to the
provisos of Section 2.10, until the full and final repayment thereof.
SECTION 2.13. Optional Prepayments. (a) The Borrower may, upon at
--------------------
least one Domestic Business Day's notice to the Administrative Agent, prepay any
Base Rate Borrowing (or any other Borrowing bearing interest at the Base Rate
pursuant to Article VIII) or, subject to Section 2.15 and upon at least three
Euro-Dollar Business Days' notice to the Administrative Agent, prepay any Euro-
Dollar Committed Borrowing, in whole at any time, or from time to time in part
in amounts aggregating $5,000,000 or any larger multiple of $1,000,000, by
paying the principal amount to be prepaid together with accrued interest thereon
to but excluding the date of prepayment. Each such optional prepayment shall be
applied to prepay ratably the Committed Loans of the several Banks included in
such Committed Borrowing. Competitive Loans may not be prepaid.
(b) Upon receipt of a notice of prepayment pursuant to this Section, the
Administrative Agent shall promptly notify each Bank of the contents thereof and
of
35
such Bank's ratable share (if any) of such prepayment and such notice shall not
there after be revocable by the Borrower.
SECTION 2.14. General Provisions as to Payments.
---------------------------------
(a) The Borrower shall make each payment of principal of, and interest on,
the Loans and of fees hereunder, not later than 12:00 noon (Houston time) on the
date when due, in Federal or other funds immediately available in Houston, to
the Administrative Agent at its address referred to in Section 9.01. The
Administrative Agent will promptly distribute to each Bank its ratable share, if
any, of each such payment received by the Administrative Agent for the account
of the Banks. Whenever any payment of principal of, or interest on, the Base
Rate Loans or Alternate Competitive Loans or of fees shall be due on a day which
is not a Domestic Business Day, the date for payment thereof shall be extended
to the next succeeding Domestic Business Day. Whenever any payment of principal
of, or interest on, the Euro-Dollar Committed Loans and the Euro-Dollar
Competitive Loans shall be due on a day which is not a Euro-Dollar Business Day,
the date for payment thereof shall be extended to the next succeeding Euro-
Dollar Business Day unless such Euro-Dollar Business Day falls in another
calendar month, in which case the date for payment thereof shall be the next
preceding Euro-Dollar Business Day. If the date for any payment of principal is
extended by operation of law or otherwise, interest thereon shall be payable for
such extended time.
(b) Unless the Administrative Agent shall have received notice from the
Borrower prior to the date on which any payment is due to the Banks hereunder
that the Borrower will not make such payment in full, the Administrative Agent
may assume that the Borrower has made such payment in full to the Administrative
Agent on such date and the Administrative Agent may, in reliance upon such
assumption, cause to be distributed to each Bank on such due date an amount
equal to the amount then due such Bank. If and to the extent that the Borrower
shall not have so made such payment, each Bank shall repay to the Administrative
Agent forthwith on demand such amount distributed to such Bank together with
interest thereon, for each day from the date such amount is distributed to such
Bank until the date such Bank repays such amount to the Administrative Agent, at
the Federal Funds Rate.
SECTION 2.15. Funding Losses. The Borrower shall pay to the
--------------
Administrative Agent for the account of each Bank, upon the request of such Bank
through the Administrative Agent, such amount or amounts as shall compensate
such Bank for any reasonable loss, cost or expense actually incurred by such
Bank (or, subject to Section 9.07(b), by any existing Participant in the related
Committed Loan or Competitive Loan) as a result of:
36
(a) any payment or prepayment of a Euro-Dollar Committed Loan or a
Competitive Loan (pursuant to Section 2.11 or Article VI or VIII or
otherwise) held by such Bank (or such Participant) on a date other than the
last day of the Interest Period applicable thereto, or
(b) any failure by the Borrower to borrow a Euro-Dollar Committed
Loan or any Competitive Loan held or to be held by such Bank (or such
Participant) on the date for such Borrowing specified in the relevant
Notice of Committed Borrowing or Request for Competitive Bid,
such compensation to include, without limitation, an amount equal to the excess,
if any, of (i) the amount of interest which would have accrued on the amount so
paid or prepaid, or not converted or borrowed, for the period from the date of
such payment or prepayment or failure to borrow or convert to the last day of
such Interest Period (or, in the case of a failure to borrow, the Interest
Period for such Euro-Dollar Committed Loan or Competitive Loan which would have
commenced on the date of such failure to convert or borrow) in each case at the
applicable rate of interest for such Euro-Dollar Committed Loan provided for
herein (excluding, however, the Euro-Dollar Margin included therein) or
Competitive Loan over (ii) the amount of interest (as reasonably determined by
such Bank or Participant) which would have accrued to such Bank or Participant
on such amount by placing such amount on deposit for a comparable period with
leading banks in the relevant interbank market; provided, however, that such
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Bank shall have delivered to the Borrower, within 60 days after the date of such
payment or prepayment or failure to borrow, a certificate as to the amount of
such actual loss or expense, which certificate shall set forth in reasonable
detail the basis for such loss or expense and shall be conclusive in the absence
of manifest error. Any payment required to be made pursuant to this Section 2.15
shall be made within 5 days after receipt of the certificate referred to above.
SECTION 2.16. Fees.
----
(a) Facility Fee. The Borrower shall pay to the Administrative Agent for
------------
the account of each Bank a facility fee (the "Facility Fee") equal to the
Applicable Margin in effect from time to time on the amount of the Commitment
(whether used or unused) of that Bank. The Facility Fee shall accrue for the
account of each Bank from and including the date of this Agreement to but
excluding the Termination Date.
(b) Payments. Accrued fees under this Section for the account of any Bank
--------
shall be payable quarterly in arrears on each March 31, June 30, September 30
and December 31 and upon the Termination Date.
SECTION 2.17. Computation of Interest and Fees. Interest based on the
--------------------------------
Prime Rate shall be computed on the basis of a year of 365 days (or 366 days in
a leap year)
37
and paid for the actual number of days elapsed (including the first day but
excluding the last day). All other interest and all fees shall be computed on
the basis of a year of 360 days and paid for the actual number of days elapsed
(including the first day but excluding the last day) except that if use of a
360-day year would cause any interest or fees constituting interest (within the
meaning of all applicable laws) to exceed the Highest Lawful Rate, then such
interest and fees will be computed on the basis of a year of 365 days (or 366 in
a leap year).
SECTION 2.18. Maximum Interest Rate. (a) It is the intention of each
---------------------
party hereto to comply strictly with all usury laws applicable to it regarding
the contracting for, and the taking, reserving, charging, collection, payment
and receipt of, interest (which, for purposes of this Section 2.18, shall be
deemed to include, without limitation, any compensation received by any Agent or
any Bank for the use, forbearance or detention of money (as such terms are used
in Tex. Rev. Civ. Stat. Xxx. Art. 5069-1.01(a), the Texas Finance Code and the
Texas Credit Title) under or in connection with this Agreement and the Notes),
whether such laws are now or hereafter in effect and whether such laws are those
of the United States of America or other applicable jurisdiction (the
"Applicable Usury Laws").
(b) With respect to any Bank, if any payment by the Borrower or any other
Person to any Agent or such Bank hereunder or in connection with any transaction
contemplated hereby (including any payment upon acceleration of the maturity of
any Note of such Bank) would produce a rate of interest in excess of the
"Highest Lawful Rate" (as defined in paragraph (e) below), or if any such
payment would result in the Borrower or any other Person paying or being deemed
to have paid to any Agent or such Bank any interest in excess of the "Maximum
Amount," (as defined in paragraph (c) below) or if any Agent or such Bank shall
for any reason receive any unearned interest in violation of any Applicable
Usury Law, or if any transaction contemplated by, or any provision of, this
Agreement, any Note, any Letter of Credit Application or any other agreement or
instrument executed and delivered pursuant to or in connection with this
Agreement or any transaction contemplated hereby (collectively, such Bank's
"Loan Documents") would otherwise be usurious under Applicable Usury Laws, then,
notwithstanding anything to the contrary in such Bank's Loan Documents, the
parties hereto agree, to the maximum extent that they may do so under applicable
law, that: (i) the provisions of this Section 2.18 shall govern and control;
(ii) the aggregate amount of all interest under Applicable Usury Laws that is
contracted for, taken, reserved, charged, collected or received pursuant to such
Bank's Loan Documents or otherwise shall be limited such that under no
circumstances shall such interest exceed the Maximum Amount; (iii) neither the
Borrower nor any other Person shall be obligated to pay any amount of interest
that exceeds the Maximum Amount; and (iv) the provisions of such Bank's Loan
Documents immediately shall be deemed reformed, without the necessity of the
execution of any new document or instrument, so as to comply with the Applicable
Usury Laws (it being the intention of the parties hereto,
38
to the fullest extent permitted by applicable law, to render inapplicable any
and all penalties of any kind provided by any Applicable Usury Law as a result
of any such excess interest).
(c) To the fullest extent permitted by Applicable Usury Laws, If any
payment by the Borrower or any other Person under any Bank's Loan Documents
(including any payment upon acceleration of the maturity of any Note) results in
the Borrower actually having paid to such Bank or any Agent any interest in
excess of the maximum amount of interest that such Bank or Agent may contract
for, take, reserve, charge, collect or receive under Applicable Usury Laws (the
"Maximum Amount"), then such excess amount shall be applied to the reduction of
the principal balance of such Bank's Loans or to other amounts (other than
interest) payable hereunder, and if no such principal is then outstanding, and
no such other amount is then payable, such excess or part thereof remaining
shall be repaid to the Borrower or such other Person.
(d) All interest paid, or agreed to be paid, pursuant to any Bank's Loan
Documents shall, to the fullest extent permitted by Applicable Usury Laws, be
amortized, prorated, allocated and spread throughout the stated term of any
indebtedness incurred under or evidenced by such Bank's Loan Documents.
(e) As used herein, the term "Highest Lawful Rate" means, with respect to
any Bank in all its various capacities hereunder, the maximum rate of interest
that may be contracted for, taken, reserved, charged, collected or received by
such Bank in respect of the extensions of credit under or evidenced by such
Bank's Loan Documents under the Applicable Usury Laws. In this connection,
insofar as Texas law is ultimately determinative of the Highest Lawful Rate, the
Highest Lawful Rate shall be computed on the basis of (i) the "indicated rate
ceiling" from time to time in effect referred to in Tex. Rev. Civ. Stat. Xxx.
Art. 5069-1.04, as modified by Section (a)(1) of such Art. 5069-1.04, and, to
the extent applicable after the date hereof, (ii) the "weekly ceiling" from time
to time in effect referred to in Section 303.21 of the Texas Finance Code and
Articles 1D.002 and 1D.003 of the Texas Credit Title; provided, however, that to
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the fullest extent permitted by Tex. Rev. Civ. Stat. Xxx. Art. 5069, the Texas
Finance Code and the Texas Credit Title, as applicable, each Agent and each Bank
reserves the right to change from time to time the ceiling on which the Highest
Lawful Rate is based under such Texas laws by giving written notice thereof to
the Borrower in the manner and to the extent required such Texas laws.
Notwithstanding the foregoing, the Highest Lawful Rate for any Bank in all of
its various capacities hereunder shall not be limited to rate ceilings permitted
under Texas law, if other Applicable Usury Laws (whether applicable federal or
state laws and whether now or hereafter in effect) shall permit a higher rate of
interest to be contracted for, taken, reserved, charged, collected and received
under such Bank's Loan Documents.
39
(f) In the event that any rate of interest set forth in Section 2.07 or
8.01 on any Loan of any Bank (a "Stated Rate"), together with any fees or other
amounts payable under such Bank's Loan Documents to any Agent or such Bank, in
any of such Bank's capacities hereunder, deemed to constitute interest under
Applicable Usury Laws ("Additional Interest"), exceeds the Highest Lawful Rate,
then, the rate at which interest will accrue pursuant to such Bank's Loan
Documents shall be limited, notwithstanding anything to the contrary in such
Bank's Loan Documents, to the Highest Lawful Rate; provided, however, that, to
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the fullest extent permitted by Applicable Usury Laws, any subsequent reductions
in any Stated Rate shall not reduce the rate at which interest will accrue
pursuant to such Bank's Loan Documents below the Highest Lawful Rate until the
aggregate amount of interest payable to such Bank actually accrued pursuant to
such Bank's Loan Documents, together with all Additional Interest payable to
such Bank, equals the amount of interest which would have accrued if the Stated
Rates had at all times been in effect and such Additional Interest, if any, had
been paid in full.
(g) In the event that, at maturity or upon payment in full of all amounts
payable under any Bank's Loan Documents, the total amount of interest (including
all Additional Interest) accrued and paid under the terms of such Bank's Loan
Documents is less than the total amount of interest (including Additional
Interest) which would have accrued and been paid under such Bank's Loan
Documents if the Stated Rates had at all times been in effect and all Additional
Interest had been paid in full, then the Borrower shall, to the extent permitted
by Applicable Usury Laws, pay to the Administrative Agent for the account of
such Bank an amount equal to the difference between (1) the lesser of (i) the
amount of interest which would have accrued and been paid if the Highest Lawful
Rate for such Bank had at all times been in effect or (ii) the amount of
interest which would have accrued and been paid if the Stated Rates had at all
times been in effect and all Additional Interest had been paid in full and (2)
the amount of interest (including all Additional Interest) actually accrued and
paid to such Bank pursuant to such Bank's Loan Documents.
(h) To the extent permitted by applicable law, the Borrower, the Agents
and the Banks agree that, except for Article 15.10(b) thereof, the provisions of
Chapter 15, Subtitle 79, Revised Civil Statutes of Texas, 1925, as amended
(which regulates certain revolving credit loan accounts and revolving tri-party
accounts), do not apply to this Agreement or any of the Notes or any of the
Obligations.
SECTION 2.19. Withholding Tax Exemption. At least five Domestic
-------------------------
Business Days prior to the first date on which interest or fees are payable
hereunder for the account of any Bank, each Bank that is not incorporated under
the laws of the United States of America or a state thereof agrees that it will
deliver to each of the Borrower and the Administrative Agent two duly completed
copies of United States Internal Revenue Service Form 1001 or 4224, certifying
in either case that such Bank is
40
entitled to receive payments under this Agreement and the Notes without
deduction or withholding of any United States federal income taxes. Each Bank
which so delivers a Form 1001 or 4224 further undertakes to deliver to each of
the Borrower and the Administrative Agent two additional copies of such form (or
a successor form) on or before the date that such form expires or becomes
obsolete or after the occurrence of any event requiring a change in the most
recent form so delivered by it, and such amendments thereto or extensions or
renewals thereof as may be reasonably requested by the Borrower or the
Administrative Agent, in each case certifying that such Bank is entitled to
receive payments under this Agreement and the Notes without deduction or
withholding of any United States federal income taxes, unless an event
(including without limitation any change in treaty, law or regulation) has
occurred after the date hereof and prior to the date on which any such delivery
would otherwise be required which renders all such forms inapplicable or which
would prevent such Bank from duly completing and delivering any such form with
respect to it and such Bank advises the Borrower and the Administrative Agent
that it is not capable of receiving payments without any deduction or
withholding of United States federal income tax. Any Bank that is not capable of
receiving payments without any deduction or withholding of United States federal
income tax will promptly notify the Borrower and the Administrative Agent to
that effect and will designate a different Applicable Lending Office if such
designation will render such Bank capable of receiving payments without any such
deduction or withholding and will not, in the reasonable judgment of such Bank,
be otherwise disadvantageous. If the Borrower shall receive a certificate of
such Bank claiming the need for deductions or withholdings under this Section
2.19, the Borrower shall, subject to Section 8.06, commence making any
deductions and withholding any amounts with respect to payments for the account
of such Bank that are required by applicable law.
ARTICLE III
CONDITIONS
SECTION 3.01. Effectiveness. This Agreement shall become effective as
-------------
of December 1, 1997 on (a) execution of this Agreement by the Administrative
Agent and the Borrower and receipt by the Administrative Agent of counterparts
of this Agreement signed by the other Agents and the Banks listed on the
signature pages hereto (or, in the case of any party as to which an executed
counterpart shall not have been received, receipt by the Administrative Agent in
form reasonably satisfactory to it of telecopied, telegraphic, telex or other
written confirmation from such party of execution of a counterpart hereof by
such party) and (b) receipt by the Administrative Agent of evidence of
termination by the Borrower of the "Commitments" of the "Banks" under and as
such terms are defined in the Borrower's $400,000,000 Amended and Restated
Credit Agreement dated as of June 27, 1995, as amended, among the Borrower, the
Agents (or the predecessors thereof) and the other financial
41
institutions party thereto, and the payment of all fees and other "Obligations"
becoming due and payable thereunder as a result of such termination; provided,
--------
however, the respective obligations hereunder of the Banks to make their initial
-------
Loans and of the Issuing Bank to issue its intial Letter of Credit shall be
subject to the satisfaction of the following conditions precedent on or prior to
the date of any such Credit Event (or the waiver thereof in accordance with
Section 9.05):
(i) receipt by the Administrative Agent of (1) certified copies of
the Certificate of Incorporation and By-Laws of the Borrower and the
resolutions of the Board of Directors of the Borrower authorizing the
transactions contemplated hereby, (2) certified copies of the Equistar
Partnership Agreement and (3) such other documents as the Administrative
Agent or the Required Banks may reasonably request relating to the
existence of the Borrower, the corporate authority for and the validity of
this Agreement and the Notes, and any other matters relevant hereto, all in
form and substance satisfactory to the Administrative Agent;
(ii) receipt by the Administrative Agent of a Certificate of
Incumbency dated on or after the Effective Date executed by the Secretary
or an Assistant Secretary of the Borrower in substantially the form of
Exhibit 3.01(ii), setting forth the name, title and specimen signature of
each Authorized Officer or Authorized Representative of the Borrower (1)
who has signed this Agreement on behalf of the Borrower, (2) who will sign
the Notes on behalf of the Borrower or (3) who will, until replaced by
another officer or representative duly authorized for that purpose, act as
the representative of the Borrower for the purposes of signing documents
and giving notices and other communications by the Borrower in connection
with this Agreement and the transactions contemplated hereby;
(iii) receipt by the Administrative Agent of a certificate dated on
or after the Effective Date signed by the Chief Executive Officer or Chief
Administrative Officer of the Borrower to the effects set forth in clauses
(iii) and (iv) of Section 3.02;
(iv) receipt by the Administrative Agent of an opinion of the Chief
Corporate Counsel of the Borrower dated on or after the Effective Date in
substantially the form of Exhibit 3.01(iv) and covering such additional
matters relating to the transactions contemplated hereby as the Required
Banks may reasonably request;
(v) receipt by the Agents of an opinion of Xxxxxxx & Xxxxx L.L.P.,
counsel for the Agents, dated on or after the Effective Date in
substantially the form of Exhibit 3.01(v) and covering such additional
matters relating to the
42
transactions contemplated hereby as the Required Banks may reasonably
request;
(vi) receipt by the Administrative Agent of a certificate dated on
or after the Effective Date signed by the Chief Executive Officer or any
Vice President of LRC to the effect that LRC is not in default in its
material obligations pursuant to the LCR Regulations;
(viii) receipt by the Administrative Agent of certificates dated on
or after the Effective Date signed by the Chief Executive Officer, any Vice
President or the Treasurer of each of the Lyondell Equistar Partners,
Lyondell Methanol GP and Lyondell Methanol LP to the effect that such
Persons are not in default in their respective material obligations under
the Equistar Partnership Agreement or the Methanol Partnership Agreement,
as the case may be; and
(ix) receipt by the Administrative Agent for the account of each
Bank of a duly executed Committed Note dated the Effective Date, complying
with the provisions of Section 2.05 and a duly executed Competitive Note
dated the Effective Date, complying with the provisions of Section 2.10.
The Administrative Agent shall promptly notify the Borrower and the Banks of the
Effective Date, and such notice shall be conclusive and binding on all parties
hereto. The Administrative Agent shall, promptly after the receipt thereof,
forward to the Banks copies of the documents delivered pursuant to this Section
3.01.
SECTION 3.02. Credit Events. (a) The obligation of any Bank to make a
-------------
Committed Loan on the occasion of any Committed Borrowing hereunder and the
obligation of the Issuing Bank to issue, renew or extend any Letter of Credit
hereunder are subject to the satisfaction of the following conditions:
(i) receipt by the Administrative Agent of a Notice of Committed
Borrowing as required by Section 2.02 or receipt by the Issuing Bank of a
Letter of Credit Request as required by Section 2.03, as the case may be;
(ii) the fact that, immediately after such Credit Event, the
aggregate outstanding principal amount of the Committed Loans, plus the
Letter of Credit Outstandings, plus the aggregate outstanding principal
amount of the Competitive Loans will not exceed the Committed Amount;
(iii) the fact that, immediately before and after such Credit Event,
no Default or Event of Default shall have occurred and be continuing; and
43
(iv) the fact that the representations and warranties of the Borrower
contained in this Agreement shall be true in all material respects on and
as of the date of such Credit Event as if made on and as of such date
(except in the case of a Refunding Borrowing, the representations and
warranties set forth in paragraphs (f), (g), (m) and (n) of Section 4.01),
unless a representation and warranty expressly relates to an earlier date,
in which event such representation and warranty was true in all material
respects at such date.
(b) The obligation of each Bank bound to make a Competitive Loan pursuant to
Section 2.10 on the occasion of a Competitive Borrowing (including the initial
Competitive Borrowing) is subject to the further condition precedent that:
(i) The Auction Agent and the Administrative Agent shall have
received a Competitive Bid Request with respect thereto; and
(ii) On the Borrowing Date of such Competitive Borrowing, the
following statements shall be true (and each of the giving of the
applicable Competitive Bid Request and the acceptance by the Borrower of
the proceeds of such Competitive Borrowing shall constitute a
representation and warranty by the Borrower that on the date of such
Competitive Borrowing such statements are true):
(A) the fact that, immediately after such Credit Event, the
aggregate outstanding principal amount of the Committed Loans, plus
the Letter of Credit Outstandings, plus the aggregate outstanding
principal amount of the Competitive Loans, will not exceed the
Committed Amount;
(B) the fact that, immediately before and after such Credit
Event, no Default or Event of Default shall have occurred and be
continuing; and
(C) the fact that the representations and warranties of the
Borrower contained in this Agreement shall be true in all material
respects on and as of the date of such Credit Event as if made on and
as of such date, unless a representation and warranty expressly
relates to an earlier date, in which event such representation and
warranty was true in all material respects at such date.
Each Credit Event hereunder shall be deemed to be a representation and warranty
by the Borrower on the date of such Borrowing as to the facts specified in
clauses (ii), (iii) and (iv) of paragraph (a) or clause (ii) of paragraph (b),
as the case may be.
44
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01. Representations and Warranties of the Borrower. The
----------------------------------------------
Borrower represents and warrants to the Agents and the Banks as follows:
(a)(1) The Borrower is (i) a corporation duly incorporated, validly
existing and in good standing under the laws of the State of Delaware and
(ii) qualified to do business and in good standing in each jurisdiction
where the ownership of its properties or the conduct of its business
requires such qualification, except where the failure to be so qualified
would not have a Material Adverse Effect.
(2) The Borrower has all corporate power and authority,
governmental permits, licenses, consents, authorizations, orders and
approvals and other authorizations and powers as are necessary to carry on
its business substantially as presently conducted, except where the failure
to have such power, authority, permits, licenses, consents, authorizations,
orders and approvals would not have a Material Adverse Effect.
(3) The execution, delivery and performance by the Borrower of this
Agreement and of the Notes, and the Borrowings and other extensions of
credit hereunder, are within the Borrower's corporate power and authority
and have been duly authorized by all necessary corporate proceedings.
(4) Neither such authorization nor the execution, delivery and
performance by the Borrower of this Agreement or of the Notes, nor any
Borrowing or Letter of Credit when made or issued, as the case may be,
hereunder will conflict with, result in a breach of or constitute a default
under any of the terms, conditions or provisions of any law or any
regulation, order, writ, injunction or decree of any court or governmental
authority or of the Certificate of Incorporation or By-Laws of the Borrower
or result in the violation or contravention of, or the acceleration of any
obligation under, or cause the creation of any Lien on any of the assets of
the Borrower pursuant to the provisions of, any indenture, loan or credit
agreement or other material instrument to which it is a party or by which
it is bound.
(5) Assuming its due execution by the Banks and the Agents, this
Agreement constitutes a legal, valid and binding agreement of the Borrower
and the Notes, when duly executed on behalf of the Borrower and delivered
in accordance with this Agreement, will constitute legal, valid and binding
obligations of the Borrower.
45
(b)(1) The consolidated balance sheet of the Borrower and its
Consolidated Subsidiaries as of December 31, 1996 and the related
consolidated statements of income and cash flows for the fiscal year ended
that date, reported on by Coopers & Xxxxxxx, L.L.P., copies of which have
been delivered to the Administrative Agent, present fairly, in all material
respects, the consolidated financial position of the Borrower and its
Consolidated Subsidiaries as of such date and their consolidated results of
operations and cash flows for such fiscal year, in conformity with
generally accepted accounting principles consistently applied.
(2) The unaudited consolidated balance sheet of the Borrower and
its Consolidated Subsidiaries as of September 30, 1997 and the related
unaudited consolidated statements of income and cash flows for the nine-
month period then ended, copies of which have been delivered to the
Administrative Agent, present fairly, in all material respects, in
conformity with generally accepted accounting principles applied on a basis
consistent with the financial statements referred to in paragraph (b)(1) of
this Section, the consolidated financial position of the Borrower and its
Consolidated Subsidiaries as of such date and their consolidated results of
operations and cash flows for such nine-month period (subject to normal
year-end adjustments and not including footnotes or schedules required by
generally accepted accounting principles).
(c)(1) The balance sheet of LCR as of December 31, 1996 and the
related statements of income and cash flows for the fiscal year ended that
date, reported on by Coopers & Xxxxxxx, L.L.P., copies of which have been
delivered to the Administrative Agent, present fairly, in all material
respects, the financial position of LCR as of such date and its results of
operations and cash flows for such fiscal year, in conformity with
generally accepted accounting principles consistently applied.
(2) The unaudited balance sheet of LCR as of September 30, 1997 and
the related statements of income and cash flows for the nine-month period
then ended, copies of which have been delivered to the Administrative
Agent, present fairly, in all material respects, in conformity with
generally accepted accounting principles applied on a basis consistent with
the financial statements referred to in paragraph (c)(1) of this Section,
the financial position of LCR as of such date and its results of operations
and cash flows for such three-month period (subject to normal year-end
adjustments and not including footnotes or schedules required by generally
accepted accounting principles).
(d) The Borrower has heretofore furnished to the Administrative
Agent and the Banks the unaudited balance sheet of Equistar and its
Subsidiaries prepared on a pro forma combined basis, as of June 30, 1997
and the
46
unaudited income statement of Equistar and its Subsidiaries prepared on a
pro forma combined basis for the 12-month period ended December 31, 1996
and for the six-month period ended June 30, 1997. Such pro forma balance
sheet and income statements have been prepared in good faith based on the
assumptions used to prepare the pro forma financial information continued
in the Joint Proxy Statement (which assumptions are believed by the
Borrower on the date hereof to be reasonable), are based on the best
information available to the Borrower as of the date of the furnishing
thereof, accurately reflect all adjustments required to be made to give
effect the Joint Venture and present fairly, in all material respects, on a
pro forma basis the estimated combined financial position of Equistar and
its Subsidiaries as of June 30, 1997 and the 12-month and six-month periods
ended December 31, 1996 and June 30, 1997, respectively.
(e) The unaudited balance sheet of Methanol as of September 30, 1997
and the related statement of income for the nine-month period then ended,
copies of which have been delivered to the Administrative Agent and the
Banks, present fairly, in all material respects, in conformity with
generally accepted accounting principles, the financial position of
Methanol as of such date and its results of operations for such nine-month
period (subject to normal year-end adjustments and not including footnotes
or schedules required by generally accepted accounting principles).
(f) Except as described in the Borrower's Annual Report on Form 10-K
for the year ended December 31, 1996 ("1996 Form 10-K") or any document
filed subsequently by the Borrower pursuant to the Securities Exchange Act
of 1934 ("'34 Act Report") or as otherwise disclosed in writing to the
Administrative Agent and delivered to the Banks, there is no action, suit
or proceeding pending or, to the knowledge of the Borrower, threatened
against or affecting the Borrower or any of its Consolidated Subsidiaries
in any court or before or by any arbitrator, governmental department,
agency or instrumentality, an adverse decision in which could reasonably be
expected to have a Material Adverse Effect.
(g) Except as described in the 1996 Form 10-K or any subsequent '34
Act Report or as otherwise disclosed in writing to the Administrative Agent
and delivered to the Banks, there has been no material adverse change since
December 31, 1996 in the business, operations, affairs, assets, condition
(financial or otherwise) or results of operations of the Borrower and its
Consolidated Subsidiaries, considered as a whole.
(h) No Default or Event of Default has occurred and is continuing.
47
(i) No consent, authorization, order or approval of (or filing or
registration with) any governmental commission or board or other
governmental regulatory authority (other than routine reporting
requirements) is required for the execution, delivery and performance by
the Borrower of this Agreement or of the Notes.
(j) Each member of the Controlled Group has fulfilled its
obligations under the minimum funding standards of ERISA and the Code with
respect to each Plan and is in compliance with the presently applicable
provisions of ERISA and the Code, except to the extent that any
noncompliance would not reasonably be expected to have a Material Adverse
Effect. No member of the Controlled Group has incurred any liability to the
PBGC (other than for routine premiums due to the PBGC) or a Plan under
Title IV of ERISA that would have a Material Adverse Effect.
(k)(1) Each corporate Subsidiary is a corporation duly incorporated,
validly existing and in good standing under the laws of its jurisdiction of
incorporation, and has all corporate powers and all governmental licenses,
authorizations, consents and approvals required to carry on its business
substantially as presently conducted except for such powers, licenses,
authorizations, consents or approvals the absence of which would not
reasonably be expected to have a Material Adverse Effect.
(2) LCR is a limited liability company duly organized, validly
existing and in good standing under the laws of the State of Texas and is
registered, qualified or licensed (or has applied for such registration,
qualification or licensing) to do business and is in good standing in each
of the jurisdictions within the United States where ownership of its
properties or the conduct of its business requires such registration,
qualification or licensing, except in all cases where the failure to be so
registered, qualified or licensed would not reasonably be expected to have
a Material Adverse Effect. LCR also has all power and authority,
governmental permits, licenses, consents, authorizations, orders and
approvals and other authorizations as are necessary to carry on its
business substantially as presently conducted except in all cases where the
failure to have any of the foregoing would not reasonably be expected to
have a Material Adverse Effect.
(3) Each of Equistar and Methanol is a limited partnership duly
formed, validly existing and in good standing under the laws of the State
of Delaware and, where applicable, is registered, qualified or licensed (or
has applied for such registration, qualification or licensing) to do
business and is in good standing in each of the jurisdictions within the
United States where ownership of its properties or the conduct of its
business requires such registration, qualification
48
or licensing, except in all cases where the failure to be so registered,
qualified or licensed would not reasonably be expected to have a Material
Adverse Effect. Each of Equistar and Methanol also has all power and
authority, governmental permits, licenses, consents, authorizations, orders
and approvals and other authorizations as are necessary to carry on its
business substantially as presently conducted except in all cases where the
failure to have any of the foregoing would not reasonably be expected to
have a Material Adverse Effect.
(l) The Borrower is not an "investment company" within the meaning of
the Investment Company Act of 1940, as amended, or a "public-utility
company" or a "holding company" within the meaning of the Public Utility
Holding Company Act of 1935 or a "public utility" under the laws of the
State of Texas.
(m) Except as described in the Borrower's 1996 Form 10-K or any
subsequent '34 Act Report or as otherwise disclosed in writing to the
Administrative Agent and delivered to the Banks, to the best of its
knowledge (i) the Borrower and each of its Consolidated Subsidiaries
possess all environmental, health and safety licenses, permits,
authorizations, registrations, approvals and similar rights necessary for
the Borrower or such Consolidated Subsidiary to conduct its operations as
now being conducted, except where the failure to possess or maintain any of
the foregoing would not reasonably be expected to have a Material Adverse
Effect and (ii) the Borrower and each of its Consolidated Subsidiaries are
in compliance with all terms, conditions or other provisions of such
licenses, permits, authorizations, registrations, approvals and similar
rights, except for such failure or noncompliance that would not reasonably
be expected to have a Material Adverse Effect.
(n) Except as described in the Borrower's 1996 Form 10-K or any
subsequent '34 Act Report or as otherwise disclosed in writing to the
Administrative Agent and delivered to the Banks, to the best of its
knowledge, there does not exist any Release of a Hazardous Material or any
violation of the Requirements of Environmental Laws that reasonably would
be expected to impose a liability on the Borrower or a Consolidated
Subsidiary, or require an expenditure by the Borrower or a Consolidated
Subsidiary to cure such violation, in any case where such liability or
expenditure would reasonably be expected to have a Material Adverse Effect.
(o) Each of the Borrower and its Consolidated Subsidiaries has filed
all federal income tax returns and other material tax returns, statements
and reports (or obtained extensions with respect thereto) which are
required to be filed and have paid or deposited or made adequate provision
in accordance with generally accepted accounting standards for the payment
of all taxes (including
49
estimated taxes shown on such returns, statements and reports) which are
shown to be due pursuant to such returns.
(p) Each of the LCR Regulations, the Equistar Partnership Agreement
and the Methanol Partnership Agreement is in full force and effect.
(q) LRC is not in default of its material obligations under the LCR
Regulations; none of the Lyondell Equistar Partners is in default of its
material obligations under the Equistar Partnership Agreement; and neither
Lyondell Methanol GP nor Lyondell Methanol LP is in default of its material
obligations under the Methanol Partnership Agreement.
(r) On the date of this Agreement, the Borrower has no Restricted
Subsidiaries.
ARTICLE V
COVENANTS
The Borrower agrees that, so long as any Bank has any Commitment hereunder
or any amount payable under any Note or in respect of any Letter of Credit
remains unpaid:
SECTION 5.01. Certain Information to be Furnished by the Borrower. The
---------------------------------------------------
Borrower will deliver to the Administrative Agent and the Administrative Agent
shall promptly deliver to the Banks:
(a)(1) as soon as available and in any event within 120 days after the
end of each of its fiscal years, the consolidated balance sheet of the
Borrower and its Consolidated Subsidiaries as of the end of such fiscal
year and the related consolidated statements of income and cash flows for
such year, setting forth in each case in comparative form the figures for
the previous fiscal year, together with the audit report thereon of a
nationally recognized firm of independent certified public accountants;
(2) as soon as available and in any event within 120 days after the
end of each of its fiscal years, the balance sheet of LCR as of the end of
such fiscal year and the related statements of income and cash flows for
such year, setting forth in each case in comparative form the figures for
the previous fiscal year, together with an audit report thereon of a
nationally recognized firm of independent certified public accountants;
50
(3) as soon as available and in any event within 120 days after the
end of each of its fiscal years, the balance sheet of Equistar as of the
end of such fiscal year and the related statements of income, cash flows
and partners' equity for such year, setting forth in each case (commencing
with its fiscal year ending December 31, 1998) in comparative form the
figures for the previous fiscal year, together with an audit report thereon
of a nationally recognized firm of independent certified public
accountants;
(4) as soon as available and in any event within 120 days after the
end of each of its fiscal years, the unaudited balance sheet of Methanol as
of the end of such fiscal year and the related statement of income for such
year, setting forth in each case (commencing with its fiscal year ending
December 31, 1998) in comparative form the figures for the previous fiscal
year;
(b)(1) as soon as available and in any event within 60 days after the
end of each of the first three quarters of each of its fiscal years, (i)
the consolidated balance sheet of the Borrower and its Consolidated
Subsidiaries as of the end of such fiscal quarter, (ii) the related
consolidated statement of income for such fiscal quarter and for the
portion of the fiscal year ended with such quarter and (iii) the related
consolidated statements of income and cash flows for the portion of the
fiscal year ended with such quarter, setting forth, with respect to (iii),
in comparative form the figures for the corresponding portion of the
Borrower's previous fiscal year, all certified (subject to normal year-end
adjustments and not including footnotes or schedules required by generally
accepted accounting principles) by the chief financial officer or the chief
accounting officer of the Borrower to present fairly, in all material
respects, the financial position, results of operations and cash flows of
the Borrower and its Consolidated Subsidiaries in accordance with generally
accepted accounting principles (except as otherwise stated therein) applied
on a basis consistent with the financial statements referred to in
paragraph (a)(1) of this Section;
(2) as soon as available and in any event within 60 days after the
end of each of the first three quarters of each of its fiscal years, (i)
the balance sheet of LCR as of the end of such fiscal quarter, (ii) the
related statement of income for such fiscal quarter and for the portion of
the fiscal year ended with such quarter and (iii) the related statements of
income and cash flows for the portion of the fiscal year ended with such
quarter, setting forth, with respect to (iii), in comparative form the
figures for the corresponding portion of LCR's previous fiscal year, all
certified (subject to normal year-end adjustments and not including
footnotes or schedules required by generally accepted accounting
principles) by the chief financial officer or the chief accounting officer
of LCR to present fairly, in all material respects, the financial position,
results of operations and cash flows of LCR in accordance with generally
accepted
51
accounting principles (except as otherwise stated therein) applied on a
basis consistent with the financial statements referred to in paragraph
(a)(2) of this Section;
(3) as soon as available and in any event within 60 days after the
end of each of the first three quarters of each of its fiscal years, (i)
the balance sheet of Equistar as of the end of such fiscal quarter, (ii)
the related statement of income for such fiscal quarter and for the portion
of the fiscal year ended with such quarter and (iii) the related statements
of income and cash flows and partners' equity for the portion of the fiscal
year ended with such quarter, setting forth, with respect to (iii),
commencing with its fiscal quarter ending March 31, 1999, in comparative
form the figures for the corresponding portion of Equistar's previous
fiscal year, all certified (subject to normal year-end adjustments and not
including footnotes or schedules required by generally accepted accounting
principles) by the chief financial officer or the chief accounting officer
of Lyondell Equistar GP to present fairly, in all material respects, the
financial position, results of operations, cash flows and partners' equity
of Equistar in accordance with generally accepted accounting principles
(except as otherwise stated therein) applied on a basis consistent with the
financial statements referred to in paragraph (a)(3) of this Section;
(4) at such time as the Borrower causes to be prepared routinely on a
quarterly basis financial statements for Methanol, promptly after the
preparation thereof after the end of each of the first three quarters of
each of Methanol's fiscal years thereafter, (i) the balance sheet of
Methanol as of the end of such fiscal quarter, (ii) the related statement
of income for such fiscal quarter and for the portion of the fiscal year
ended with such quarter and (iii) the related statement of income for the
portion of the fiscal year ended with such quarter, which financial
statements shall set forth with respect to (iii) (commencing with any such
financial statements prepared after December 31, 1997), in comparative form
the figures for the corresponding portion of Methanol's previous fiscal
year, all certified (subject to normal year-end adjustments and not
including footnotes or schedules required by generally accepted accounting
principles) by the chief financial officer or the chief accounting officer
of Lyondell Methanol GP to present fairly, in all material respects, the
financial position and results of operations of Methanol in accordance with
generally accepted accounting principles (except as otherwise stated
therein) applied on a basis consistent with the financial statements
referred to in paragraph (a)(4) of this Section;
(c) promptly after the same are sent to shareholders or filed, copies
of all (i) financial statements, notices, reports and proxy materials sent
by the Borrower to shareholders of the Borrower and (ii) registration
statements (other
52
than exhibits thereto and any registration statements on Form S-8 or its
equivalent) and reports on Form 10-K, 10-Q and 8-K (or their equivalents)
filed by the Borrower with the Securities and Exchange Commission (or any
governmental agency succeeding to the functions of such Commission);
(d) simultaneously with the delivery of the financial statements
referred to in paragraphs (a) and (b) above, (i) a certificate of the
Borrower signed by the Treasurer or any Assistant Treasurer of the Borrower
stating whether there exists to the knowledge of such officer of the
Borrower on the date of such certificate any Default, and, if any such
Default then exists, specifying the nature and period of existence thereof
and the action the Borrower is taking or is causing to be taken and
proposes to take or cause to be taken with respect thereto and (ii) a
certificate of the Borrower signed by the Treasurer or any Assistant
Treasurer of the Borrower stating that the Borrower is in compliance with
the provisions of Section 5.08 and setting forth all computations relating
thereto;
(e) forthwith, if at any time any officer of the Borrower shall
obtain knowledge of any Default, a certificate of the Treasurer or any
Assistant Treasurer specifying the nature and period of existence thereof
and the action the Borrower is taking or is causing to be taken and
proposes to take or cause to be taken with respect thereto;
(f) promptly upon obtaining knowledge thereof, a copy of each of the
following notices: if and when any member of the Controlled Group (i)
gives or is required to give notice to the PBGC of any "reportable event"
(as defined in Section 4043 of ERISA) with respect to any Plan which might
reasonably be expected to constitute grounds for a termination of such Plan
under Title IV of ERISA, or knows that the plan administrator of any Plan
has given or is required to give notice of any such reportable event, a
copy of the notice of such reportable event given or required to be given
to the PBGC; (ii) receives notice of complete or partial withdrawal
liability under Title IV of ERISA, a copy of such notice; or (iii) receives
notice from the PBGC under Title IV of ERISA of an intent to terminate or
appoint a trustee to administer any Plan, a copy of such notice;
(g) in the event of any damage, loss or casualty to or destruction of
any portion of any facility of the Borrower, any of its Subsidiaries, LCR,
Equistar, Methanol or any Other Equity Person, prompt notice thereof,
specifying the nature and extent of such damage, loss, casualty or
destruction and stating whether such damage, loss, casualty or destruction,
in the reasonable judgment of the Borrower, materially adversely affects
the production capacity of such facility or the economic value of such
facility;
53
provided, however, that the Borrower shall have no obligation to deliver
-------- -------
such notice if the damage to the facility in the good faith judgment of the
Borrower will not cost in excess of $15,000,000 to rebuild, replace or
restore or if such damage does not materially adversely affect such
production capacity or the economic value of the facility;
(h) in the event of any total or partial shutdown of any production
or storage facility of the Borrower, any of its Consolidated Subsidiaries,
LCR, Equistar, Methanol or any Other Equity Person in connection with any
Release, prompt notice thereof to the Administrative Agent, specifying the
reason for such shutdown; provided, however, that the Borrower shall have
-------- -------
no obligation to deliver such notice if in the good faith judgment of the
Borrower such shutdown will not result in a reduction of the combined
Consolidated Net Income of the Borrower, LCR, Equistar, Methanol and each
Other Equity Person of $10,000,000 or more over a period of five years
beginning with the date of such shutdown;
(i) in addition to its obligations pursuant to Section 2.02, prompt
written notice of any Debt of the Borrower, other than Borrowings, incurred
subsequent to the date of this Agreement; and
(j) from time to time such further information regarding compliance
with this Agreement or the business, operations, affairs, assets, condition
(financial or otherwise) or results of operations of the Borrower and its
Consolidated Subsidiaries, LCR, Equistar, Methanol and Other Equity Persons
as the Administrative Agent, at the request of any Bank, may reasonably
request.
SECTION 5.02. Maintenance of Property; Insurance.
----------------------------------
(a) The Borrower will keep, and will cause each of its Subsidiaries to
keep, all property useful and necessary in its business in good working order
and condition, ordinary wear and tear excepted.
(b) The Borrower will, and will cause each of its Subsidiaries to,
maintain insurance consistent either with the insurance practices of the
Borrower and its Subsidiaries in effect on the date hereof, or with then
existing industry practice, in either case to the extent available to the
Borrower and its Subsidiaries on commercially reasonable terms, and will furnish
to the Administrative Agent, upon request from the Administrative Agent,
information presented in reasonable detail as to the insurance so carried.
SECTION 5.03. Limitation on Liens. Except as otherwise specifically
-------------------
provided in this Agreement, nothing contained in this Agreement shall in any way
restrict or
54
prevent the Borrower or any Subsidiary from incurring any Debt; provided,
--------
however, that neither the Borrower nor any Restricted Subsidiary will issue,
-------
assume or incur any Debt secured by any Lien upon any Restricted Property or
grant any Lien on any such Restricted Property to secure any such Debt without
effectively providing that all of the Notes and the Letter of Credit
Outstandings (together with, if the Borrower so determines, any other Debt then
existing and any other Debt thereafter created ranking equally with the Notes)
shall be secured equally and ratably with (or prior to) such Debt so long as
such Debt shall be so secured. To the extent, if any, that the following Liens
would otherwise be prohibited by the foregoing provisions, the foregoing
provisions shall not apply to:
(a) Liens on any property of a corporation or other Person existing at the
time it becomes a Subsidiary or at the time it is merged into or consolidated
with the Borrower or a Subsidiary and not created in contemplation of such
event;
(b) Liens on any assets (i) existing at the time of acquisition thereof
and not created in contemplation of such event or (ii) incurred to secure
payment of all or part of the purchase price thereof or (iii) incurred to secure
Debt incurred prior to, at the time of or within 120 days after acquisition
thereof for the purpose of financing all or part of the purchase price thereof;
(c) Liens on property of the Borrower or any of its Subsidiaries existing
or contemplated on the date hereof and listed on Schedule 5.03(c);
(d) Liens on any new plant (including any processing unit or production or
storage facility) or the real estate on which such plant is situated or is to be
constructed securing Debt incurred or assumed either (i) at the time of or
within 24 months after commencement of improvement or construction or (ii)
within 120 days after completion of improvement or construction of such plant in
a principal amount not exceeding the cost of such improvement or construction
and the cost of acquisition of such plant and such real estate;
(e) Liens which secure only Debt owing by a Subsidiary to the Borrower or
another Subsidiary;
(f) Liens in favor of the United States of America or any state thereof or
any department, agency, instrumentality or political subdivision of any such
jurisdiction to secure partial, progress, advance or other payments pursuant to
any contract or statute or to secure any Debt incurred for the purpose of
financing all or any part of the purchase price or cost of constructing or
improving the property subject to such Lien, including, without limitation,
Liens to secure Debt of the pollution control or industrial revenue bond type;
55
(g) Liens required by any contract or statute in order to permit the
Borrower or a Subsidiary to perform any contract or subcontract made by it with
or at the request of the United States of America, any state or any department,
agency or instrumentality or political subdivision of either; or
(h) Liens securing taxes, assessments, governmental charges or levies,
statutory Liens of landlords and Liens of carriers, warehousemen, materialmen,
mechanics and other like Persons not yet due or the payment of which is not then
required; provided, however, that this paragraph (h) shall not be deemed to
-------- -------
permit any Liens which may be imposed pursuant to Section 4068 of ERISA;
(i) Liens of or resulting from any judgment or award not in excess of
$25,000,000, the time for the appeal or petition for rehearing of which shall
not have expired, or in respect of which the obligor shall at any time in good
faith be prosecuting an appeal or proceeding for a review and in respect of
which a stay of execution pending such appeal or proceeding for review shall
have been secured;
(j) Liens incurred or deposits made in the ordinary course of business (i)
in connection with workers' compensation, unemployment insurance and other types
of social security, or (ii) to secure reimbursement obligations in respect of
documentary letters of credit secured by collateral customarily and normally
provided to banks issuing documentary letters of credit; provided, however, that
-------- -------
any obligation secured by any such Lien shall not be overdue or, if overdue, is
being contested in good faith by appropriate actions or proceedings during which
there is no right to exercise remedies and with respect to which adequate book
reserves are maintained to the extent required by generally accepted accounting
principles; provided further, that paragraph (j) shall not be deemed to permit
-------- -------
any Liens which may be imposed pursuant to Section 4068 of ERISA;
(k) minor survey exceptions and minor encumbrances, easements or
reservations, or rights of others for rights-of-way, utilities and other similar
purposes, or zoning or other restrictions as to the use of real properties,
which are necessary for the conduct of the activities of Borrower or any
Subsidiary or which customarily exist on properties of corporations or other
Persons engaged in similar activities and similarly situated;
(l) any extension, renewal or replacement (or successive extensions,
renewals or replacements), in whole or in part, of any Lien referred to in the
foregoing paragraphs (a) to (k) inclusive or of any Debt secured thereby,
provided that the principal amount of Debt secured thereby shall not exceed the
principal amount of Debt so secured at the time of such extension, renewal or
replacement, and that such extension, renewal or replacement Lien shall be
limited to all or part of substantially
56
the same property which secured the Lien extended, renewed or replaced, plus
improvements on such property;
provided, however, that the Borrower and any one or more Restricted Subsidiaries
-------- -------
may issue, assume or incur Debt secured by Liens which would otherwise be
subject to the foregoing restrictions or grant any such Lien to secure any such
Debt in an aggregate principal amount which, together with the aggregate
outstanding principal amount of all Debt of the Borrower and the Restricted
Subsidiaries which would otherwise be subject to the foregoing restrictions (not
including Debt permitted to be secured under paragraphs (a) to (l) inclusive
above), does not at any one time exceed the greater of $50,000,000 or 10 percent
of Consolidated Net Tangible Assets of the Borrower and its Consolidated
Subsidiaries.
SECTION 5.04. Consolidation, Merger, Disposition of Assets. (a)
--------------------------------------------
Subject to the provisions of Section 5.04(b), nothing contained in this
Agreement shall prevent any consolidation or merger of the Borrower with or into
any other entity or entities (whether or not an Affiliate of the Borrower), or
successive consolidations or mergers in which the Borrower or its successor or
successors shall be a party or parties, or shall prevent any sale or conveyance
of all the property and assets of the Borrower substantially as an entirety, to
any other Person (whether or not an Affiliate of the Borrower) authorized to
acquire and operate the same; provided, however, that upon any such
-------- -------
consolidation, merger, sale or conveyance, other than a consolidation or merger
in which the Borrower is the continuing entity, the surviving entity must be
chartered under the laws of the United States or one of its states and the due
and punctual payment of the principal of and interest on all of the Notes,
according to their tenor, and the due and punctual performance and observance of
all of the covenants and conditions of this Agreement, shall be expressly
assumed by instrument reasonably satisfactory in form to the Required Banks and
executed and delivered to the Administrative Agent by the corporation (if other
than the Borrower) formed by such consolidation or into which the Borrower shall
have been merged or by the Person which shall have acquired such property; and
provided further, that no Default or Event of Default shall exist hereunder
-------- -------
after giving effect to such consolidation, merger or sale of assets.
Notwithstanding the foregoing, the provisos of this Section 5.04(a) shall not
apply to the direct or indirect transfer by the Borrower to Equistar of the
properties and assets of the Borrower described in the Joint Proxy Statement.
(b) If, upon any consolidation or merger of the Borrower with or into any
other corporation, or upon the sale or conveyance of all the property and assets
of the Borrower substantially as an entirety to any other Person or if any of
the remaining property of the Borrower or of any Restricted Subsidiary would
thereupon become subject to any Lien, the Borrower, prior to or simultaneously
with such consolidation, merger, sale or conveyance, will secure the Notes, the
Letter of Credit Outstandings and all other obligations of the Borrower under
this Agreement equally and ratably with
57
any other obligations of the Borrower (or any Restricted Subsidiary if
applicable) then entitled thereto, by a direct Lien on all such property prior
to all Liens other than any theretofore existing thereon.
SECTION 5.05. Use of Proceeds. The proceeds of the Loans made and
---------------
Letters of Credit issued under this Agreement will be used by the Borrower and
its Subsidiaries for general business purposes; provided, however, without the
-----------------
prior consent of the Required Lenders, the Borrower and its Subsidiaries will
not acquire in one or more transactions operating assets with proceeds of Loans
aggregating more than $75,000,000. No proceeds of any Loan will be used in
violation of Regulation U, Regulation X, Regulation G or of any similar laws or
regulations relating to Debt secured directly or indirectly by equity
securities.
SECTION 5.06. Payment of Taxes. The Borrower will, and will cause each
----------------
Consolidated Subsidiary to, pay and discharge, or make adequate provision for,
all material taxes, assessments and governmental charges or levies imposed upon
it or upon its income or profits, or upon any properties belonging to it;
provided, however, that neither the Borrower nor any Consolidated Subsidiary
-------- -------
shall be required to pay or discharge or cause to be paid or discharged any such
taxes, assessments, charges or levies whose amount, applicability or validity is
being contested in good faith by appropriate actions or proceedings and as to
which reserves have been established if required by generally accepted
accounting principles.
SECTION 5.07. LCR Matters.
------------
(a) The Borrower will not permit LRC, as an Owner of LCR, to consent to
any amendment or modification to the LCR Regulations, or to take any other
action, that would in each case result in LRC's Participation Percentage (as
defined in the LCR Regulations) to be less than 50 percent, without the consent
of Banks having at least 70 percent of the aggregate Commitments.
(b) Unless the Banks having at least 70 percent of the aggregate
Commitments agree otherwise, the Borrower shall cause LRC (within the bounds of
good business judgment and its legal obligations under or in connection with the
LCR Regulations), as an Owner of LCR, to withhold its consent, which is required
under Section 3.8 of the LCR Regulations, with respect to any action that would
cause or permit LCR (or any Person acting in the name or on behalf of LCR),
directly or indirectly, to undertake any of the following:
(1) to fail to maintain insurance consistent either with the
insurance practices of the Borrower and its Subsidiaries in effect on the
date hereof or with then existing industry practice, in either case to the
extent available to LCR on commercially reasonable terms; and
58
(2) to amend, or alter the LCR Regulations in any way that would
materially adversely affect (i) the Borrower's access to its share of
distributable cash from LCR or (ii) other material rights and obligations
of the Borrower or LRC under the LCR Regulations (including without
limitation materially increasing an obligation of the Borrower or LRC to
make contributions to LCR or materially decreasing an obligation of CITGO
or CITGO Refining to make contributions to LCR), provided, however, that in
-------- -------
any event the Borrower will provide promptly thereafter to the
Administrative Agent notice and copies of all amendments to the LCR
Regulations.
SECTION 5.08 Equistar Matters. Unless the Banks having at least 70
----------------
percent of the aggregate Commitments agree otherwise, the Borrower shall cause
each of the Lyondell Equistar Partners (within the bounds of good business
judgment and its legal obligations under or in connection with the Equistar
Partnership Agreement), as partners of Equistar, to withhold its consent, which
is required under Section 6.7 or Section 13.23 of the Equistar Partnership
Agreement, with respect to any action that would cause or permit Equistar (or
any Person acting in the name or on behalf of Equistar), directly or indirectly,
to undertake any of the following:
(a) to fail to maintain insurance consistent either with the
insurance practices of the Borrower and its Subsidiaries (including such
insurance coverage for Methanol) in effect on the date hereof or with then
existing industry practice, in either case to the extent available to
Equistar on commercially reasonable terms; and
(b) to amend, or alter the Equistar Partnership Agreement in any way
that would materially adversely affect (i) the Borrower's access to its
share of distributable cash from Equistar or (ii) other material rights and
obligations of the Borrower or the Lyondell Equistar Partners under the
Equistar Partnership Agreement (including, without limitation, materially
increasing an obligation of the Borrower or the Lyondell Equistar Partners
to make contributions to Equistar or materially decreasing an obligation of
the Millennium Equistar Partners to make contributions to Equistar),
provided, however, that in any event the Borrower will provide promptly
-------- -------
thereafter to the Administrative Agent notice and copies of all amendments
to the Equistar Partnership Agreement.
SECTION 5.09. Financial Covenants. The Borrower will comply with the
--------------------
covenants described in this Section.
(a) Debt Incurrence Test. If at any time the aggregate outstanding
--------------------
principal amount of the Loans exceeds $50,000,000, then the Borrower will not be
permitted to make any additional Borrowings hereunder (other than Borrowings
constituting conversions and continuations pursuant to Article II) unless, after
giving effect to any
59
such Borrowing, (i) the ratio of Global Debt to Stub Period Global EBITDA, for
the four-fiscal-quarter period of the Borrower ended September 30, 1997, if such
Borrowing will be made at any time prior to the first Determination Date, or
(ii) the ratio of Global Debt to Global EBITDA, for the four-fiscal-quarter
Period of the Borrower most recently ended after September 30, 1997, if such
Borrowing will be made on or after the first Determination Date, in each case,
is less than or equal to 3.75 to 1.0; provided, however, that each such
-------- -------
determination shall be made by giving effect to (A) all Global Debt actually
outstanding during any portion of such four-fiscal-quarter period and by
assuming that such proposed Borrowing had been incurred on the first day of such
four-fiscal-quarter period and (B) all operating assets acquired during such
four-fiscal-quarter period and by assuming that such assets were acquired on the
first day of such four-fiscal-quarter period.
(b) Fixed Charge Coverage Ratio. The Borrower will not permit, as of the
---------------------------
end of any fiscal quarter, the ratio of (i) Consolidated Cash Flow, minus
Consolidated Capital Expenditures of the Borrower, to (ii) Consolidated Interest
Expense of the Borrower, in each case for the four-fiscal-quarter period most
recently ended, to be less than 3.0 to 1.0.
(c) Leverage. (i) The Borrower will not permit, as of the end of any
--------
fiscal quarter, the ratio of Consolidated Debt of the Borrower to Consolidated
Cash Flow, computed in each case for the four-fiscal-quarter period most
recently ended, to be greater than 2.0 to 1.0.
(ii) The Borrower will not permit, as of the end of any fiscal
quarter, the ratio of Consolidated Debt of the Borrower to Total Capitalization
to be greater than 0.5 to 1.0.
(d) Dividend Payments. The Borrower will not at any time declare, make or
-----------------
pay, or incur any liability to make or pay, or cause or permit to be declared,
made or paid any Dividend unless at the time of declaring such Dividend, and
after giving effect thereto, the aggregate amount of all such Dividends declared
or paid on or after January 1, 1998 shall not exceed an amount equal to the sum
of (i) $50,000,000, plus (ii) 75 percent of Consolidated Net Income or Loss of
the Borrower, excluding non-cash Non-Operating Special Items used in determining
Consolidated Net Income or Loss, for the period commencing January 1, 1998 and
ending with the most recently completed fiscal quarter of the Borrower (treated
as a single accounting period).
(e) Methodology for Determining Covenant Compliance. Notwithstanding any
------------------------------------------------
contrary provision of this Agreement, the Borrower's compliance with each
of the covenants described in this Section shall be determined in
accordance with the following methodology:
60
(1) In the event the Borrower, LCR, Equistar, Methanol or any Other
Equity Person issues Debt ("Replacement Debt") for the purpose of
refinancing Debt outstanding under any of such Person's public indentures
or medium-term note programs ("Replaced Debt"), the aggregate principal
amount of such Replacement Debt shall be substituted in place of the
Replaced Debt for purposes of all determinations and the calculations, in
paragraphs (a) and (c) of this Section; provided, however, that the Net
-------- -------
Interest associated with such Replacement Debt of the Borrower shall be
included in Interest Expense of the Borrower for purposes of the
calculation in paragraph (b) of this Section; and further provided, that
------- --------
the treasurer of the Borrower shall certify to the Administrative Agent
that such Replacement Debt will be used to refinance Replaced Debt.
(2) The results of operations for, and all information pertaining to,
the Borrower's most recently completed quarter or four fiscal quarter
period, as applicable, shall be determined based upon the last quarter, or
the four fiscal quarter period (the last quarter of which is the most
recent quarter), for which the Borrower made a public announcement of its
Consolidated Net Income or Loss.
Section 5.10. No Subsidiary Debt. The Borrower will not permit any of
------------------
LRC, the Lyondell Equistar Partners, Lyondell Methanol GP or Lyondell Methanol
LP to incur, issue, create, assume or permit to exist any Debt; provided,
however, the foregoing prohibition will not apply to the Equistar Debt or any
obligation of such Person in respect of LRC, Equistar or Methanol, as the case
may be, by reason of that Person's legal status as an Owner of LCR or a partner
of Equistar or Methanol, as the case may be.
Section 5.11. Disposition of Interests in Subsidiaries. The Borrower
----------------------------------------
shall not convey, sell, assign, transfer, pledge or otherwise dispose of any of
its equity interests in any of LRC, the Lyondell Equistar Partners, Lyondell
Methanol GP or Lyondell Methanol LP; provided, however, the foregoing
prohibition shall not apply if, after giving effect to any such disposition, the
aggregate amount of Net Cash Proceeds (as such term is hereinafter defined) from
all such dispositions actually received by the Borrower therefrom since the date
of this Agreement does not exceed $100,000,000 or, if the aggregate amount of
Net Cash Proceeds does exceed $100,000,000 (such excess Net Cash Proceeds being
the "Excess Proceeds"), concurrently with the receipt of those Excess Proceeds
from time to time, the Borrower reduces the Commitment Amount by an amount equal
to 80% of the Excess Proceeds so received. Any reduction of the Commitments
shall apply proportionately to the Commitment of each Bank in accordance with
its Commitment Percentage and any such reduction shall be permanent. For
purposes of this Section 5.11, "Net Cash Proceeds" means the sum of all cash
(including all installments under any note when received) received in
61
connection with any such disposition, minus all reasonable fees, expenses and
other costs incurred by the Borrower in connection with such disposition.
ARTICLE VI
DEFAULTS AND REMEDIES
SECTION 6.01. Defaults. If one or more of the following events (herein
--------
called "Events of Default") shall occur and be continuing:
(a) the Borrower shall default in the payment when due of any
principal of any Loan or any reimbursement obligation in respect of any
Letter of Credit, or shall default in the payment within five days after
the due date thereof of any interest on any Loan or any other amount
payable hereunder;
(b) the Borrower shall fail to perform or observe any covenant or
agreement to be performed by it contained in Section 5.01(e), Section
5.02(b) or Sections 5.03 through 5.09;
(c) the Borrower shall fail to perform or observe any covenant or
agreement to be performed by it contained in this Agreement (other than
those covered by paragraphs (a) or (b) above) for 30 consecutive days after
written notice of such failure is given to the Borrower by the
Administrative Agent at the request of any Bank;
(d) the Borrower shall have made, or be deemed to have made pursuant
to Section 3.02, any representation or warranty in this Agreement or in any
certificate or other document delivered pursuant hereto or in respect of
any financial statement delivered pursuant hereto, which shall prove to
have been incorrect in any material respect when so made or deemed to have
been made;
(e) the Borrower or any of its Subsidiaries shall fail to pay any
indebtedness for borrowed money (other than the Loans or any reimbursement
obligation in respect of any Letters of Credit) payable or Guaranteed by
it, or any interest or premium thereon, when due (whether by scheduled
maturity, required prepayment, acceleration, demand or otherwise) and such
failure shall continue after the applicable grace period, if any, specified
in the agreement or instrument relating to such Debt or Guarantee;
provided, however, that the aggregate amount of such Debt or Guaranteed
-------- -------
Debt, including any accrued and unpaid interest or premium thereon, shall
exceed $15,000,000;
62
(f) LRC shall be determined (upon exhaustion of all appeals and
expiration of all cure periods as provided in the LCR Regulations) to be in
default of any of its material obligations pursuant to the LCR Regulations
or the Lyondell Equistar Partners shall be determined (upon exhaustion of
all appeals and expiration of all cure periods as provided in the Equistar
Partnership Agreement) to be in default of any of their material
obligations pursuant to the Equistar Partnership Agreement;
(g) the Borrower, any Restricted Subsidiary, LCR or Equistar shall
commence a voluntary case or other proceeding seeking liquidation,
reorganization or other relief with respect to itself or its debts under
any bankruptcy, insolvency or other similar law now or hereafter in effect
or seeking the appointment of a trustee, receiver, liquidator, custodian or
other similar official of it or any substantial part of its property, or
shall consent to any such relief or to the appointment of or taking
possession by any such official in an involuntary case or other proceeding
commenced against it, or shall make a general assignment for the benefit of
creditors, or shall take any corporate action to authorize any of the
foregoing, or shall fail generally to pay its debts as they become due, or
shall admit in writing its inability to pay its debts as they become due;
(h) an involuntary case or other proceeding shall be commenced
against the Borrower, any Restricted Subsidiary, LCR or Equistar seeking
liquidation, reorganization or other relief with respect to it or its debts
under any bankruptcy, insolvency or other similar law now or hereafter in
effect or seeking the appointment of a trustee, receiver, liquidator,
custodian or other similar official of it or any substantial part of its
property, and such involuntary case or other proceeding shall remain
undismissed and unstayed for a period of 60 days; or an order for relief
shall be entered against the Borrower, any Restricted Subsidiary, LCR or
Equistar under the federal bankruptcy laws as now or hereafter in effect;
(i) any member of the Controlled Group shall fail to pay when due an
amount or amounts aggregating in excess of $25,000,000 which it shall have
become liable to pay to the PBGC or to a Plan under Title IV of ERISA; or
the PBGC shall institute proceedings under Title IV of ERISA to terminate
or to cause a trustee to be appointed to administer any Material Plan or a
proceeding shall be instituted by a fiduciary of any Material Plan against
any member of the Controlled Group to enforce Section 515 of ERISA and such
proceeding shall not have been dismissed within 90 days thereafter;
(j) a final, non-appealable judgment or order for the payment of
money in excess of $15,000,000 shall be rendered against the Borrower, any
63
Restricted Subsidiary, LCR or Equistar and such judgment or order shall
continue unsatisfied for a period of 30 days;
then, and without notice upon the occurrence of an Event of Default
specified in Section 6.01(g) or Section 6.01(h), or, by notice to the
Borrower upon the occurrence and during the continuation of any other Event
of Default, the Administrative Agent may and, upon the written request of
the Required Banks shall, take any or all of the following actions: (i)
declare the Banks' Commitments terminated, whereupon the Commitments of the
Banks shall forthwith terminate immediately and any accrued and unpaid
Facility Fee shall forthwith become due and payable without any other
notice of any kind; (ii) declare the principal of and any accrued and
unpaid interest in respect of all Loans and all Obligations owing
hereunder, to be, whereupon the same shall become, forthwith due and
payable without further presentment, demand, notice of demand or of
dishonor and non-payment, protest, notice of protest, notice of intent to
accelerate, declaration or notice of acceleration or any other notice of
any kind, all of which are hereby waived by the Borrower; and (iii) direct
the Borrower to pay, and the Borrower agrees that upon receipt of such
notice (or upon the occurrence of an Event of Default specified in Section
6.01(g) or Section 6.01(h)), it will pay to the Administrative Agent such
additional amount of cash as is equal to the aggregate Stated Amount of all
Letters of Credit then outstanding to be held in an interest bearing
account with the Administrative Agent, all such cash and interest to be
held by the Administrative Agent as security for the Obligations of the
Borrower hereunder and under the Notes and the other Loan Documents.
SECTION 6.02. Other Remedies. Upon the occurrence and during the
--------------
continuance of any Event of Default, the Administrative Agent, acting at the
request of the Required Banks, may proceed to protect and enforce its rights,
either by suit in equity or by action at law or both, or may proceed to enforce
the payment of all amounts owing to the Agents and the Banks under the Loan
Documents and interest thereon in the manner set forth herein or therein; it
being intended by the parties hereto that, to the maximum extent permitted by
applicable law, no remedy conferred herein or in any of the other Loan Documents
is to be exclusive of any other remedy and each and every remedy contained
herein or in any other Loan Document shall be cumulative and shall be in
addition to every other remedy given hereunder and under the other Loan
Documents now or hereafter existing at law or in equity or by a statute or
otherwise.
SECTION 6.03. Rights of Setoff. If any Event of Default shall have
----------------
occurred and be continuing, each Bank is hereby authorized at any time and from
time to time, to the fullest extent permitted by law, to set off and apply any
and all deposits (general or special, time or demand, provisional or final) at
any time held and other
64
indebtedness at any time owing by such Bank, or any branch, subsidiary or
Affiliate of such Bank, to or for the credit or the account of the Borrower
against any and all the Obligations of the Borrower now or hereafter existing
under this Agreement and the other Loan Documents irrespective of whether or not
such Bank or the Administrative Agent shall have made any demand under this
Agreement, such Note, or the Obligations and although the Obligations may be
unmatured. Each Bank agrees promptly to notify the Borrower after any such
setoff and application made by such Bank, but the failure to give such notice
shall not affect the validity of such setoff and application. The rights of each
Bank under this Section are in addition to other rights and remedies (including
other rights of setoff) which such Bank may have.
ARTICLE VII
THE AGENTS
SECTION 7.01. Appointment and Authorization. Each Bank irrevocably
-----------------------------
appoints and authorizes each of the Administrative Agent, the Documentation
Agent and the Auction Agent to take such action as Administrative Agent, the
Documentation Agent or the Auction Agent, as the case may be, on its behalf and
to exercise such powers under this Agreement and the Notes as are delegated to
the Administrative Agent, the Documentation Agent or the Auction Agent, as the
case may be, by the terms hereof or thereof, together with all such powers as
are reasonably incidental thereto.
SECTION 7.02. Agents and Affiliates. Each of the Administrative Agent
---------------------
and the Documentation Agent shall have the same rights and powers under this
Agreement as any other Bank and may exercise or refrain from exercising the same
as though they were not the Agents, and its Affiliates may accept deposits from,
lend money to, and generally engage in any kind of business with the Borrower or
any Subsidiary or LCR or any Affiliate thereof as if they were not the Agents
hereunder.
SECTION 7.03. Action by Agents. The obligations of the Administrative
----------------
Agent and the Auction Agent hereunder are only those expressly set forth herein.
Without limiting the generality of the foregoing, the Agents shall not be
required to take any action with respect to any Default, except as expressly
provided in Article VI. The Documentation Agent shall have no duties or
obligations hereunder.
SECTION 7.04. Consultation with Experts. The Agents may consult with
-------------------------
legal counsel, independent public accountants and other experts selected by it
and shall not be liable for any action taken or omitted to be taken by it in
good faith in accordance with the advice of such counsel, accountants or
experts.
65
SECTION 7.05. Liability of Agents. NEITHER THE AGENTS NOR ANY OF THEIR
-------------------
RESPECTIVE DIRECTORS, OFFICERS, AGENTS OR EMPLOYEES SHALL BE LIABLE TO ANY BANK
FOR ANY ACTION TAKEN OR NOT TAKEN BY THEM IN CONNECTION HEREWITH (I) WITH THE
CONSENT OR AT THE REQUEST OF THE REQUIRED BANKS OR (II) IN THE ABSENCE OF ITS
OWN GROSS NEGLIGENCE, UNLAWFUL ACT OR WILLFUL MISCONDUCT. IT IS THE EXPRESS
INTENTION OF THE PARTIES HERETO THAT THE AGENTS, THEIR RESPECTIVE DIRECTORS,
OFFICERS, AGENTS OR EMPLOYEES SHALL BE INDEMNIFIED AND HELD HARMLESS BY THE
BANKS FROM ALL COSTS, EXPENSES (INCLUDING COUNSEL FEES AND DISBURSEMENTS)
CLAIMS, DEMANDS, ACTIONS, LOSSES OR LIABILITIES ARISING OUT OF THE NEGLIGENCE
(WHETHER SOLE OR CONTRIBUTORY) OF SUCH PERSONS. Neither the Agents nor any of
their directors, officers, agents or employees shall be responsible for or have
any duty to ascertain, inquire into or verify (i) any statement, warranty or
representation made in connection with this Agreement or any Credit Event
hereunder; (ii) the performance or observance of any of the covenants or
agreements of the Borrower; (iii) the satisfaction of any condition specified in
Article III, except receipt of items required to be delivered to the
Administrative Agent; or (iv) the validity, effectiveness or genuineness of this
Agreement, the Notes or any other instrument or writing furnished in connection
herewith. The Agents shall not incur any liability to any Bank by acting in
reliance upon any notice, consent, certificate, statement, or other writing
(which may be a bank wire, telex or similar writing) reasonably believed by it
to be genuine or to be signed by the proper party or parties.
SECTION 7.06. INDEMNIFICATION. EACH BANK SHALL RATABLY IN ACCORDANCE
---------------
WITH ITS COMMITMENT, INDEMNIFY EACH OF THE AGENTS (TO THE EXTENT NOT REIMBURSED
BY THE BORROWER) AGAINST ANY COST, EXPENSE (INCLUDING COUNSEL FEES AND
DISBURSEMENTS), CLAIM, DEMAND, ACTION, LOSS OR LIABILITY INCLUDING ANY LIABILITY
-----------------------
FOR ANY OF THE AGENTS' OWN NEGLIGENCE (EXCEPT SUCH AS RESULT FROM SUCH AGENT'S
-------------------------------------
GROSS NEGLIGENCE, UNLAWFUL ACT OR WILLFUL MISCONDUCT) THAT SUCH AGENT MAY SUFFER
OR INCUR IN CONNECTION WITH THIS AGREEMENT OR ANY ACTION TAKEN OR OMITTED BY
SUCH AGENT HEREUNDER. IT IS THE EXPRESS INTENTION OF THE PARTIES HERETO THAT
THE AGENTS, THEIR RESPECTIVE DIRECTORS, OFFICERS, AGENTS OR EMPLOYEES SHALL BE
INDEMNIFIED AND HELD HARMLESS BY THE BANKS FROM ALL COSTS, EXPENSES (INCLUDING
COUNSEL FEES AND DISBURSEMENTS) CLAIMS, DEMANDS, ACTIONS, LOSSES OR LIABILITIES
ARISING OUT OF OR RESULTING FROM THE ORDINARY NEGLIGENCE (WHETHER SOLE OR
CONTRIBUTORY) OF SUCH PERSONS.
SECTION 7.07. Credit Decision. Each Bank acknowledges that it has,
---------------
independently and without reliance upon any Agent or any other Bank, and based
on such documents and information as it has deemed appropriate, made its own
credit analysis and decision to enter into this Agreement. Each Bank also
acknowledges that
66
it will, independently and without reliance upon any Agent or any other Bank,
and based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit decisions in taking or not taking any
action under this Agreement.
SECTION 7.08. Successor Agents. Any of the Agents may resign at any
----------------
time by giving written notice thereof to the Banks and the Borrower, with such
resignation to be effective upon the acceptance by a successor Agent of its
appointment as agent hereunder, as set forth below. Further, upon vote of the
Required Banks, any of the Agents may be replaced by any other Bank consented to
by the Borrower (which consent shall not be unreasonably withheld) and which
Bank consents to assume the duties of such Agent being replaced; provided,
--------
however, that upon any such resignation or removal, a remaining Agent (at its
-------
sole discretion) may assume the role and responsibilities of the resigning
Agent, with the consent of the Borrower, which consent shall not be unreasonably
withheld. If a remaining Agent chooses not to accept such appointment following
a resignation, the Required Banks shall have the right to appoint a successor
Agent, with the consent of the Borrower, which consent shall not be unreasonably
withheld. If no successor Agent shall have been so appointed by the Required
Banks, and shall have accepted such appointment, within 30 days after the
retiring Agent's giving of notice of resignation, then the retiring Agent may,
on behalf of the Banks, appoint a successor Agent, which shall be a Bank or 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
$50,000,000. Upon the acceptance of its appointment as Agent hereunder by a
successor Agent, such successor Agent shall thereupon succeed to and become
vested with all the rights and duties of the retiring Agent, and the retiring
Agent shall be discharged from its duties and obligations hereunder. After any
retiring Agent's resignation hereunder as an Agent, the provisions of this
Article shall inure to its benefit as to any actions taken or omitted to be
taken by it while it was an Agent.
ARTICLE VIII
CHANGE IN CIRCUMSTANCES
SECTION 8.01. Basis for Determining Interest Rate Inadequate or Unfair.
--------------------------------------------------------
If on or prior to the first day of any Interest Period for any Euro-Dollar
Committed Borrowing:
(1) the Administrative Agent is advised by the Reference Banks that
deposits in dollars (in the applicable amounts) are not being offered to
the Reference Banks in the relevant market for such Interest Period, or
67
(2) the Required Banks advise the Administrative Agent that the Euro-
Dollar Rate, as determined by the Administrative Agent, will not adequately
and fairly reflect the cost to such Banks of funding their Euro-Dollar
Committed Loans for such Interest Period,
the Administrative Agent shall forthwith give notice thereof to the Borrower and
the Banks; whereupon, until the Administrative Agent notifies the Borrower that
the circumstances giving rise to such notice no longer exist, (A) the
obligations of the Banks to make Euro-Dollar Committed Loans shall be suspended
and (B) unless the Borrower notifies the Administrative Agent at least one
Domestic Business Day before the date of any Euro-Dollar Committed Borrowing for
which a Notice of Committed Borrowing has previously been given that it elects
not to borrow on such date, such Euro-Dollar Committed Borrowing shall be made
as a Base Rate Borrowing.
SECTION 8.02. Illegality. If, after the Effective Date, the adoption of
----------
any applicable law, rule or regulation, or any change therein, or any change in
the interpretation or administration thereof by any governmental authority,
central bank or comparable agency charged with the interpretation or
administration thereof, or compliance by any Bank (or its Euro-Dollar Lending
Office) with any request or directive (whether or not having the force of law)
of any such authority, central bank or comparable agency shall make it unlawful
or impossible for any Bank (or its Euro-Dollar Lending Office) to make, maintain
or fund its Euro-Dollar Committed Loans or its Euro-Dollar Competitive Loans and
such Bank shall so notify the Administrative Agent, the Administrative Agent
shall forthwith give notice thereof to the other Banks and the Borrower
whereupon until such Bank notifies the Borrower and the Administrative Agent
that the circumstances giving rise to such suspension no longer exist (which
such Bank shall do forthwith) the obligation of such Bank to make Euro-Dollar
Committed Loans or its Euro-Dollar Competitive Loans shall be suspended. Before
giving any notice to the Administrative Agent pursuant to this Section, such
Bank shall designate a different Euro-Dollar Lending Office if such designation
will avoid the need for giving such notice and will not, in the reasonable
judgment of such Bank, be otherwise disadvantageous to such Bank. If such Bank
shall determine that it may not lawfully continue to maintain and fund any of
its outstanding Euro-Dollar Committed Loans or its Euro-Dollar Competitive Loans
to maturity and shall so specify in such notice, the Borrower shall immediately
prepay in full the then outstanding principal amount of each such affected Euro-
Dollar Committed Loan or Euro-Dollar Competitive Loan, together with accrued
interest thereon. Concurrently with prepaying each such affected Euro-Dollar
Committed Loan or Euro-Dollar Competitive Loan, the Borrower shall borrow a Base
Rate Loan and such Bank shall make such Base Rate Loan.
SECTION 8.03. Increased Cost and Reduced Return. (a) If on or after
---------------------------------
the Effective Date, in the case of any Loan or any obligation to make Loans or
any
68
obligations to issue or participate in any Letters of Credit, the adoption
of any applicable law, rule or regulation, or any change therein, or any change
in the interpretation or administration thereof by any governmental authority,
central bank or comparable agency charged with the interpretation or
administration thereof, or compliance by any Bank (or its Parent or Applicable
Lending Office) with any request or directive (whether or not having the force
of law) of any such authority, central bank or comparable agency:
(i) shall subject any Bank (or its Applicable Lending Office) to any
tax, duty or other charge with respect to its Euro-Dollar Committed Loans,
its Competitive Loans or participation in Letters of Credit, its Committed
Notes, its Competitive Notes or its obligation to make Euro-Dollar
Committed Loans or issue Letters of Credit, or shall change the basis of
taxation of payments to any Bank (or its Applicable Lending Office) of the
principal of or interest on its Euro-Dollar Committed Loans, its
Competitive Loans or Letters of Credit or any other amounts due under this
Agreement in respect of its Euro-Dollar Committed Loans, its Competitive
Loans or Letters of Credit or its obligation to make Euro-Dollar Committed
Loans or issue or participate in Letters of Credit (except for changes in
the rate of tax on the income of such Bank or its Applicable Lending Office
or changes in franchise taxes imposed on it under applicable law); or
(ii) shall impose, modify or deem applicable any reserve, special
deposit, deposit insurance assessment or similar requirement (including,
without limitation, any such requirement imposed by the Board of Governors
of the Federal Reserve System, but excluding, with respect to any Euro-
Dollar Committed Loan or Euro-Dollar Competitive Loan, any such requirement
with respect to which such Bank is entitled to compensation during the
relevant Interest Period under Section 8.05) against assets of, deposits
with or for the account of, or credit extended by, any Bank (or its
Applicable Lending Office) or shall impose on any Bank (or its Applicable
Lending Office) or on the London interbank market any other condition
affecting its Euro-Dollar Committed Loans, its Competitive Loans, its
Committed Notes, its Competitive Notes or its obligation to make Euro-
Dollar Committed Loans;
and the result of any of the foregoing is to increase the actual cost to such
Bank (or its Applicable Lending Office) of making or maintaining any Euro-Dollar
Committed Loan or Competitive Loan or issuing or participating in any Letter of
Credit, or to reduce the amount of any sum received or receivable by such Bank
(or its Applicable Lending Office) under this Agreement or under its Committed
Notes or Competitive Notes with respect thereto, by an amount reasonably deemed
by such Bank to be material, then, within 15 days after demand by such Bank
(with a copy to the Administrative Agent), the Borrower shall pay to such Bank
(without duplication of amounts otherwise payable hereunder) such additional
amount or amounts as will
69
compensate such Bank for such increased cost or reduction with respect to such
affected Euro-Dollar Committed Loan, Competitive Loan or Letter of Credit or
such affected sum.
(b) If any Bank shall have reasonably determined that the adoption of any
applicable law, rule or regulation regarding capital adequacy or any change
therein, or any change in the interpretation or administration thereof by any
governmental authority, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by any Bank (or its
Parent or Applicable Lending Office) with any request or directive regarding
capital adequacy (whether or not having the force of law) of any such authority,
central bank or comparable agency, has or has had the effect of reducing the
rate of return on capital of such Bank (or its Parent) as a consequence of such
Bank's obligations hereunder to a level below that which such Bank or its Parent
could have achieved but for such adoption, change or compliance (taking into
consideration such Bank's policies with respect to capital adequacy) by an
amount deemed by such Bank to be material, then from time to time, within 15
days after demand by such Bank (with a copy to the Administrative Agent), the
Borrower shall pay to such Bank (without duplication of amounts otherwise
payable hereunder) such additional amount or amounts as will compensate such
Bank or its Parent for such reduction.
(c) Each Bank will promptly notify the Borrower and the Administrative
Agent of any event of which it has knowledge, occurring after the Effective
Date, which will entitle such Bank to compensation pursuant to this Section and
will designate a different Applicable Lending Office if such designation will
avoid the need for, or reduce the amount of, such compensation and will not, in
the reasonable judgment of such Bank, be otherwise disadvantageous to such Bank.
A certificate of any Bank claiming compensation under this Section, setting
forth the additional amount or amounts to be paid to it hereunder and setting
forth in reasonable detail the basis for such compensation shall be conclusive
in the absence of manifest error, and the amount set forth therein shall be
payable by the Borrower within five days after receipt of such certificate. In
determining such amount, such Bank may use any reasonable averaging and
attribution methods.
SECTION 8.04. Substitute Loans. If (i) the obligation of any Bank to
----------------
make Euro-Dollar Committed or Euro-Dollar Competitive Loans has been suspended
pursuant to Section 8.01 or 8.02 or (ii) any Bank has demanded compensation
under Section 8.03(a) and the Borrower shall, by at least five Euro-Dollar
Business Days' prior notice to such Bank through the Administrative Agent, have
elected that the provisions of this Section shall apply to such Bank, then,
unless and until such Bank notifies the Borrower that the circumstances giving
rise to such suspension or demand for compensation no longer apply (which such
Bank shall do forthwith):
70
(a) all Loans which would otherwise be made by such Bank as Euro-
Dollar Committed Loans or Euro-Dollar Competitive Loans, as the case may
be, shall be made instead as Base Rate Loans, and
(b) after each of its Euro-Dollar Committed Loans or Euro-Dollar
Competitive Loans, as the case may be, has been repaid, all payments of
principal which would otherwise be applied to repay such Euro-Dollar
Committed Loans or Euro-Dollar Competitive Loans, as the case may be, shall
instead be applied to repay its Loans made pursuant to Section 8.02 or
clause (a) above.
SECTION 8.05. Regulation D Compensation. Each Bank may require the
-------------------------
Borrower to pay, contemporaneously with each payment of interest on Euro-Dollar
Committed Borrowings or Euro-Dollar Competitive Borrowings, additional interest
on the related Euro-Dollar Committed Loan or Euro-Dollar Competitive Loan of
such Bank at a rate per annum equal to the excess of (i) (A) the applicable
Euro-Dollar Rate divided by (B) one minus the Euro-Dollar Reserve Percentage
over (ii) the rate specified in clause (i)(A). Any Bank electing to require
payment of such additional interest (x) shall so notify the Borrower and the
Administrative Agent, in which case such additional interest on the Euro-Dollar
Committed Loans or Euro-Dollar Competitive Loans of such Bank shall be payable
to such Bank at the place indicated in such notice with respect to each Interest
Period commencing at least five Euro-Dollar Business Days after the giving of
such notice and (y) shall notify the Borrower at least five Euro-Dollar Business
Days prior to each date on which interest is payable on the Euro-Dollar
Committed Loans of the amount then due it under this Section.
SECTION 8.06. Substitution of Bank. If (i) the obligation of any Bank
--------------------
to make Euro-Dollar Committed Loans or Euro-Dollar Competitive Loans has been
suspended pursuant to Section 8.01 or 8.02 or (ii) any Bank has demanded
compensation under Section 8.03 or 8.05, or if any Bank has notified the
Borrower that it is not capable of receiving payments without deduction or
withholding pursuant to Section 2.19 the Borrower shall have the right, with the
assistance of the Administrative Agent, to seek a mutually satisfactory
substitute bank or banks (which may be one or more of the Banks) to purchase the
Committed Notes or Competitive Notes for cash without recourse to such Bank and
assume the Commitment and participation in any Letters of Credit of such Bank.
Any such purchase shall be at par, shall be subject to the provisions of Section
2.15, shall be without prejudice to the Borrower's obligations under Section
9.04 and shall release such Bank from all further obligations under this
Agreement.
71
ARTICLE IX
MISCELLANEOUS
SECTION 9.01. Notices. All notices and other communications provided
-------
for herein shall be in writing (including bank wire, telex, telegraph, telecopy,
cable or similar writing) and shall be given to the intended recipient at the
"Address for Notices" specified, if the intended recipient is the Borrower or
any of the Agents, below its name on the signature pages hereof or, if the
intended recipient is a Bank, in such Bank's Administrative Questionnaire, or,
as to any party, at such other address as shall be designated by such party in a
notice to the Borrower and the Administrative Agent. All notices and other
communications shall be effective (i) if given by telex, when such telex is
transmitted to the telex number specified in this Section and the appropriate
answerback is received, (ii) if given by mail, 72 hours after such communication
is deposited in the mails with first class postage prepaid, addressed as
aforesaid, (iii) if given by telecopier, upon telephone confirmation that the
telecopied document has been received by the individual to whom it was
addressed, or (iv) if given by any other means, when delivered at the address
specified in this Section; provided, however, that notices to the Administrative
-------- -------
Agent under Article II or VIII hereof shall not be effective until received and
notices to the Borrower under Section 6.01 shall not be effective until such
notice is received.
SECTION 9.02. No Waiver. No failure on the part of any of the Agents or
---------
any Bank to exercise and no delay in exercising, and no course of dealing with
respect to, any right, power or privilege under this Agreement or any Note shall
operate as a waiver thereof, nor shall any single or partial exercise of any
right, power or privilege under this Agreement or any Note preclude any other or
further exercise thereof or the exercise of any other right, power or privilege.
To the extent permitted by applicable law, the remedies provided herein are
cumulative and not exclusive of any remedies provided by law.
SECTION 9.03. GOVERNING LAW. THIS AGREEMENT AND THE NOTES SHALL BE
-------------
GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE
STATE OF TEXAS.
SECTION 9.04. Expenses; Documentary Taxes; Indemnification. (a) The
--------------------------------------------
Borrower shall pay, within 30 days after receipt of a reasonably detailed
statement setting forth the amount and nature thereof, (i) all out-of-pocket
expenses of the Agents, including the reasonable fees and disbursements of one
firm serving as special counsel for both Agents, in connection with the
preparation of this Agreement, any waiver or consent hereunder or any amendment
hereof or any Default or alleged Default hereunder and (ii) if an Event of
Default occurs, all out-of-pocket expenses incurred by the Agents or any Bank,
including reasonable fees and disbursements of
72
counsel (either outside counsel or in-house counsel, as the case may be), in
connection with such Event of Default and collection and other enforcement
proceedings resulting therefrom. The Borrower shall indemnify each Bank against
any transfer taxes, documentary taxes, assessments or charges made by any
governmental authority by reason of the execution and delivery of this Agreement
or the Notes.
(B) THE BORROWER AGREES TO INDEMNIFY EACH BANK (AND ITS AFFILIATES
DIRECTORS, OFFICERS, AGENTS AND EMPLOYEES) AND EACH AGENT (AND ITS AFFILIATES
DIRECTORS, OFFICERS, AGENTS AND EMPLOYEES) AND HOLD EACH BANK AND EACH AGENT
HARMLESS FROM AND AGAINST ANY AND ALL LIABILITIES, LOSSES, DAMAGES, COSTS AND
EXPENSES OF ANY KIND (INCLUDING THE REASONABLE FEES AND DISBURSEMENTS OF COUNSEL
(EITHER OUTSIDE COUNSEL OR IN-HOUSE COUNSEL, AS THE CASE MAY BE) FOR ANY BANK
AND ANY AGENT IN CONNECTION WITH ANY INVESTIGATIVE, ADMINISTRATIVE OR JUDICIAL
PROCEEDING, WHETHER OR NOT SUCH BANK OR SUCH AGENT SHALL BE DESIGNATED A PARTY
THERETO) WHICH MAY BE INCURRED BY SUCH BANK, OR BY SUCH AGENT IN CONNECTION WITH
ITS ACTIONS AS AN AGENT HEREUNDER, RELATING TO OR ARISING OUT OF ARTICLE VI OR
VII OF THIS AGREEMENT OR ANY ACTUAL OR PROPOSED USE OF PROCEEDS OF LOANS
HEREUNDER.
(C) EACH AGENT AND EACH BANK ENTITLED TO INDEMNITY FROM THE BORROWER UNDER
ANY PROVISION OF THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT SHALL BE INDEMNIFIED
AND HELD HARMLESS TO THE EXTENT PROVIDED THEREUNDER AGAINST ANY AND ALL LOSSES,
LIABILITIES, DAMAGES, CLAIMS, DEFICIENCIES, JUDGMENTS, COSTS OR REASONABLE
EXPENSES RELATING TO ENVIRONMENTAL LAWS OR RELEASES IF ANY OF SUCH LOSSES,
LIABILITIES, DAMAGES, CLAIMS, DEFICIENCIES, JUDGMENTS, COSTS OR EXPENSES RELATE
TO VIOLATIONS OF REQUIREMENTS OF ENVIRONMENTAL LAWS RESULTING FROM ANY OF THE
BORROWER'S AND ITS CONSOLIDATED SUBSIDIARIES' OPERATIONS (OTHER THAN AS A RESULT
OF SUCH INDEMNIFIED PERSON'S ACTS OR OMISSIONS IF SUCH INDEMNIFIED PERSON IS
DEEMED TO BE A "PERSON IN CONTROL" UNDER ANY STATE OR FEDERAL STATUTE OR
REGULATION).
(D) WITHOUT LIMITING ANY PROVISION OF THIS AGREEMENT OR ANY OF THE OTHER
LOAN DOCUMENTS BUT IN ALL EVENTS SUBJECT TO PARAGRAPH (E) OF THIS SECTION 9.04,
IT IS THE EXPRESS INTENTION OF THE BORROWER AND THE OTHER PARTIES HERETO THAT
EACH INDEMNIFIED PERSON ENTITLED TO INDEMNITY UNDER ANY PROVISION OF THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENT SHALL BE INDEMNIFIED AND HELD HARMLESS TO
THE EXTENT PROVIDED THEREUNDER AGAINST ANY AND ALL LOSSES, LIABILITIES, CLAIMS,
DEFICIENCIES, JUDGMENTS OR REASONABLE EXPENSES ARISING OUT OF OR RESULTING FROM
THE ORDINARY NEGLIGENCE (WHETHER SOLE OR CONTRIBUTORY) OF SUCH INDEMNIFIED
PERSON.
(E) NOTWITHSTANDING ANY OTHER PROVISION OF THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENT OR ANY OTHER DOCUMENT OR INSTRUMENT, IN NO EVENT SHALL THE BORROWER BE
LIABLE TO ANY INDEMNIFIED PERSON IN
73
ANY MANNER WITH RESPECT TO ANY LIABILITIES DAMAGES, LOSSES, CLAIMS,
DEFICIENCIES, JUDGMENTS, COSTS OR EXPENSES OF ANY KIND FOR ANY ACTS OR OMISSIONS
CONSTITUTING GROSS NEGLIGENCE, AN UNLAWFUL ACT OR WILLFUL MISCONDUCT OR
VIOLATION OF LAW ON THE PART OF SUCH INDEMNIFIED PERSON.
SECTION 9.05. Amendments, Etc. Any provision of this Agreement or the
----------------
Notes may be amended or waived if, but only if, such amendment or waiver is in
writing and is signed by the Borrower and the Required Banks (and, if the rights
or duties of any Agent are affected thereby, by such Agent); provided, however,
-------- -------
that no such amendment, waiver or modification shall, unless signed by all the
Banks, (i) increase or decrease the Commitment of any Bank (except for increases
to the Commitment of any Bank pursuant to Section 8.06 to which such Bank has
agreed in writing), (ii) reduce the principal of or rate of interest on any Loan
or any fees hereunder, (iii) postpone the date fixed for any payment of
principal of or interest on any Loan or any fees hereunder or for any
termination of any Commitment, (iv) change the percentage of the Commitments or
of the aggregate unpaid principal amount of the Notes, or the number of Banks,
which shall be required for the Banks or any of them to take any action under
this Section or any other provision of this Agreement or (v) amend or waive any
provision of Section 3.01 or this Section 9.05. Notwithstanding the foregoing,
the Administrative Agent and the Borrower shall have the right, without consent
of the Required Banks, to amend the procedures for the extension of the
Termination Date set forth in Section 2.01 to the extent the Administrative
Agent shall determine such amendment to be necessary to ensure that the Banks
will not be required to maintain capital against their Commitments under
applicable rules, regulations and interpretations of bank regulatory
authorities; provided, that no such amendment shall permit the extension of any
--------
Bank's Commitment without the consent of such Bank.
SECTION 9.06. Counterparts; Integration. This Agreement may be executed
-------------------------
in any number of counterparts, all of which taken together shall constitute one
and the same instrument, and any of the parties hereto may execute this
Agreement by signing any such counterpart. This Agreement constitutes the
entire agreement and understanding among the parties hereto and supersedes any
and all prior agreements and understandings, oral or written, relating to the
subject matter hereof.
SECTION 9.07. Successors and Assigns. (a) The provisions of this
----------------------
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns, except that the Borrower may not
assign or otherwise transfer any of its rights under this Agreement without the
prior written consent of all Banks.
74
(b) Any Bank may at any time grant to one or more banks or other
institutions (each a "Participant") participating interests in its Commitment or
any or all of its Loans or any or all of its Commitment Percentage of Letter of
Credit Outstandings. In the event of any such grant by a Bank of a participating
interest to a Participant, whether or not upon notice to the Borrower and the
Agents, such Bank shall remain responsible for the performance of its
obligations hereunder, and the Borrower and the Agents shall continue to deal
solely and directly with such Bank in connection with such Bank's rights and
obligations under this Agreement. Any agreement pursuant to which any Bank may
grant such a participating interest shall provide that such Bank shall retain
the sole right and responsibility to enforce the obligations of the Borrower
hereunder including, without limitation, the right to approve any amendment,
modification or waiver of any provision of this Agreement; provided, however,
-------- -------
that such participation agreement may provide that such Bank will not agree to
any modification, amendment or waiver of this Agreement described in clause (i),
(ii), (iii) or (iv) of Section 9.05 without the consent of the Participant. The
Borrower agrees that each Participant shall be entitled to the benefits of
Sections 2.14 and 9.04 and Article VIII with respect to its participating
interest; provided, however, that all amounts payable to a Bank for the account
-------- -------
of a Participant under Sections 2.14 and 9.04 and Article VIII shall be
determined as if such Bank had not granted such participation to the
Participant. An assignment or other transfer which is not permitted by
subsection (c) below shall be given effect for purposes of this Agreement only
to the extent of a participating interest granted in accordance with this
subsection (b).
(c) Any Bank may, upon 5 days notice to the Administrative Agent and the
Borrower, assign to one or more banks or other institutions (each an "Assignee")
all, or a proportionate part of all (in minimum amounts of $10,000,000 and in
multiples of $1,000,000), of its rights and obligations under this Agreement and
the Notes, and such Assignee shall assume such rights and obligations, pursuant
to an instrument executed by such Assignee and such transferor Bank, with (and
subject to) the written consent of the Borrower and the Administrative Agent;
which shall not be unreasonably withheld; provided, however, that if an Assignee
-------- -------
is the local Federal Reserve Bank branch for the region in which such Bank is
located and is receiving a collateral assignment or is an Affiliate of such
transferor Bank, no such consent shall be required. Upon execution by the
transferor Bank, the Borrower, the Assignee and the Agents, and delivery of,
such an instrument and payment by such Assignee to such transferor Bank of an
amount equal to the purchase price agreed between such transferor Bank and such
Assignee, such Assignee shall be a Bank party to this Agreement and shall have
all the rights and obligations of a Bank with a Commitment as set forth in such
instrument of assumption, and the transferor Bank shall be released from its
obligations hereunder to the extent of such assignment, and no further consent
or action by any party shall be required. Upon the consummation of any
assignment pursuant to this subsection (c), the transferor Bank, the Agents and
75
the Borrower shall make appropriate arrangements so that, if required, new Notes
are issued to the Assignee. Prior to the issuance of any such new Note, the
Assignee to which such Note is issued shall pay to the Administrative Agent a
fee of $2,000.00.
(d) No Assignee or other transferee of any Bank's rights shall be entitled
to receive any greater payment under Section 8.03 than such Bank would have been
entitled to receive with respect to the rights transferred, unless such transfer
is made with the Borrower's prior written consent or by reason of the provisions
of Section 8.02 or 8.03 requiring such Bank to designate a different Lending
Office under certain circumstances or at a time when the circumstances giving
rise to such greater payment did not exist.
(e) If the Reference Bank assigns its Notes to an institution that is not
an Affiliate, the Administrative Agent shall, in consultation with the Borrower
and with the consent of the Required Banks, appoint another bank to act as the
Reference Bank hereunder.
SECTION 9.08. Survival. The obligations of the Borrower under Article
--------
VIII and Section 9.04 shall survive the repayment of the Loans and the
satisfaction of the Letter of Credit Outstandings and the termination of the
Commitments.
SECTION 9.09. Acknowledgment. The Borrower acknowledges that the Banks
--------------
have entered into this Agreement in reliance on the Borrower's assurance that
the Borrower does not intend to use the proceeds of any Borrowings hereunder in
a manner which would violate any applicable law or governmental rule or
regulation.
SECTION 9.10. Headings. The Table of Contents and Article and Section
--------
headings used herein shall not affect the interpretation of any provision of
this Agreement.
SECTION 9.11. Sharing of Setoffs. Each Bank agrees that, if it shall,
------------------
by exercising any right of setoff or counterclaim or otherwise, receive payment
of a proportion of the aggregate amount of principal and interest due with
respect to any Committed Note or Competitive Note held by it or any Letter of
Credit Outstandings which is greater than the proportion received by any other
Bank in respect of the aggregate amount of principal and interest due with
respect to any Committed Note or Competitive Note held by such other Bank or any
Letter of Credit Outstandings (other than disproportionate payments to any Bank
provided for by this Agreement), the Bank receiving such proportionately greater
payment shall purchase such participation in the Committed Notes or the
Competitive Notes held by, or the rights in respect of Letter of Credit
Outstandings of, the other Banks, and such other adjustments shall be made, as
may be required so that all such payments of principal and interest with respect
to the Committed Notes or the Competitive Notes and Letter
76
of Credit Outstandings held by the Banks shall be shared by the Banks pro rata;
provided, however, that nothing in this Section shall impair the right of
-------- -------
any Bank to exercise any right of setoff or counterclaim it may have and to
apply the amount recovered thereby to the payment of indebtedness of the
Borrower other than its indebtedness under the Notes, or in respect of Letter of
Credit Outstandings. If under any applicable bankruptcy, insolvency or other
similar law, any Bank receives a secured claim in lieu of a setoff to which this
Section applies, such Bank shall, to the extent practicable, exercise its rights
in respect of such secured claim in a manner consistent with the rights of the
Banks entitled under this Section to share in the benefits of any recovery on
such secured claim.
SECTION 9.12. Collateral. Each of the Banks represents to the Agents
----------
and each of the other Banks that it in good faith is not relying upon any
"margin stock" (as defined in Regulation U) as collateral in the extension or
maintenance of the credit provided for in this Agreement.
SECTION 9.13. CONSENT TO JURISDICTION. (a) TO THE EXTENT PERMITTED BY
-----------------------
APPLICABLE LAW, THE BORROWER IRREVOCABLY SUBMITS TO THE NONEXCLUSIVE
JURISDICTION OF ANY FEDERAL OR STATE COURT SITTING IN XXXXXX COUNTY, TEXAS OVER
ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR
ANY NOTE OR ANY LETTER OF CREDIT. THE BORROWER IRREVOCABLY WAIVES ANY OBJECTION
WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF THE VENUE OF ANY SUCH SUIT,
ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT AND ANY CLAIM THAT ANY SUIT,
ACTION OR PROCEEDING BROUGHT IN ANY SUCH A COURT HAS BEEN BROUGHT IN AN
INCONVENIENT FORUM. THE BORROWER AGREES THAT A FINAL, NONAPPEALABLE JUDGMENT IN
ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH A COURT SHALL BE
CONCLUSIVE AND BINDING UPON THE BORROWER AND MAY BE ENFORCED IN ANY FEDERAL OF
STATE COURT SITTING IN THE STATE OF TEXAS (OR ANY OTHER COURTS TO THE
JURISDICTION OF WHICH THE BORROWER IS OR MAY BE SUBJECT) BY A SUIT UPON SUCH
JUDGMENT; PROVIDED, HOWEVER, THAT SERVICE OF PROCESS IS EFFECTED UPON THE
-------- -------
BORROWER IN ONE OF THE MANNERS SPECIFIED IN SUBSECTION (b) OF THIS SECTION OR AS
OTHERWISE PERMITTED BY LAW.
(b) SERVICE OF PROCESS. TO THE EXTENT PERMITTED BY APPLICABLE LAW, THE
------------------
BORROWER HEREBY CONSENTS TO PROCESS BEING SERVED IN ANY SUIT, ACTION OR
PROCEEDING REFERRED TO IN THE FIRST SENTENCE OF SUBSECTION (a) OF THIS SECTION
IN ANY FEDERAL OR STATE COURT SITTING IN XXXXXX COUNTY, TEXAS BY MAILING A COPY
THEREOF BY REGISTERED OR CERTIFIED AIR MAIL, POSTAGE PREPAID, RETURN RECEIPT
REQUESTED, TO THE BORROWER AT ITS ADDRESS FOR NOTICES DETERMINED PURSUANT TO
SECTION 9.01. THE BORROWER IRREVOCABLY WAIVES ALL CLAIM OF ERROR BY REASON
77
OF ANY SUCH SERVICE IN ANY SUIT, ACTION OR PROCEEDING BROUGHT BY ANY AGENT OR
ANY BANK. THE BORROWER AGREES THAT SUCH SERVICE SHALL BE DEEMED IN EVERY RESPECT
EFFECTIVE SERVICE OF PROCESS UPON THE BORROWER IN ANY SUCH SUIT, ACTION OR
PROCEEDING AND SHALL BE TAKEN AND HELD TO BE VALID AND PERSONAL SERVICE UPON AND
PERSONAL DELIVERY TO THE BORROWER.
(c) NO LIMITATION ON SERVICE OR SUIT. NOTHING IN THIS ARTICLE IS INTENDED
--------------------------------
TO AFFECT THE RIGHT OF ANY AGENT OR ANY BANK TO SERVE PROCESS IN ANY OTHER
MANNER PERMITTED BY LAW OR LIMIT THE RIGHT OF ANY AGENT OR ANY BANK TO BRING
PROCEEDINGS OTHERWISE PERMITTED BY LAW AGAINST THE BORROWER IN THE COURTS OF THE
JURISDICTION OF ANY BANK'S LENDING OFFICE OR THE COURTS OF ANY JURISDICTION OR
JURISDICTIONS IN WHICH THE BORROWER HAS ANY ASSETS.
SECTION 9.14. FINAL AGREEMENT OF THE PARTIES. THIS AGREEMENT (INCLUDING
------------------------------
THE SCHEDULES AND EXHIBITS HERETO), THE NOTES AND THE OTHER LOAN DOCUMENTS
CONSTITUTE A "LOAN AGREEMENT" AS DEFINED IN SECTION 26.02(A) OF THE TEXAS
BUSINESS AND COMMERCE CODE, AND REPRESENT THE FINAL AGREEMENT BETWEEN THE
PARTIES RELATING TO THE SUBJECT MATTER HEREOF AND THEREOF AND MAY NOT BE
CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS
OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
78
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
LYONDELL PETROCHEMICAL COMPANY
By:________________________________________
Name: Xxxxxxx X. Xxxxxxxxxxx
Title: Senior Vice President and
Chief Administrative Officer
Address for Notices:
One Houston Center
Suite 1600
0000 XxXxxxxx Xxxxxx
P.O. Box 3646
Houston, TX 77253-3646
Attn: Treasurer
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
TEXAS COMMERCE BANK NATIONAL
ASSOCIATION, as Administrative Agent
By:________________________________________
Name: X. X. Xxxxx
Title: Vice President
Address for Notices:
000 Xxxx Xxxxxx
Xxxxxxx, XX 00000
Attn: Syndications Department
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION, as Documentation Agent
By:________________________________________
Name: Xxxxxxx X. Xxxxxx
Title: Managing Director
Address for Notices:
000 Xxxxx XxXxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxx, XX 00000
Attn: Xxxxxx Xxxxxx
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
THE CHASE MANHATTAN BANK, as Auction Agent
By:________________________________________
Name: Xxxxxx X. Xxxxxxx
Title: Vice President
Address for Notices:
0 Xxxxx Xxxxxxxxx Xxxxx, 0xx Xxxxx
Xxx Xxxx, XX 00000
Attn: Xxxxxxxxxxx Xxxxxxxx
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
A BANK: BANK OF AMERICA NATIONAL TRUST AND
------
SAVINGS ASSOCIATION
By:________________________________________
Name:______________________________________
Title:_____________________________________
A BANK: TEXAS COMMERCE BANK NATIONAL ASSOCIATION
------
By:________________________________________
Name:______________________________________
Title:_____________________________________
A BANK: THE BANK OF NEW YORK
------
By:________________________________________
Name:______________________________________
Title:_____________________________________
A BANK: THE BANK OF NOVA SCOTIA
------
By:________________________________________
Name: F. C. H. Xxxxx
Title: Senior Manager Loan Operations
A BANK: THE BANK OF TOKYO-MITSUBISHI, LTD.,
------
HOUSTON AGENCY
By:________________________________________
Name:______________________________________
Title:_____________________________________
A BANK: CREDIT LYONNAIS NEW YORK BRANCH
------
By:________________________________________
Name:______________________________________
Title:_____________________________________
A BANK: THE FUJI BANK, LTD.
------
By:________________________________________
Name: Xxxxxxx Xxxxxxx
Title: Vice President and Manager
A BANK: NATIONSBANK OF TEXAS, N.A.
------
By:________________________________________
Name: Xxxxxxx X. Xxxxxxx
Title: Senior Vice President
A BANK: SOCIETE GENERALE, SOUTHWEST AGENCY
------
By:________________________________________
Name:______________________________________
Title:_____________________________________
A BANK: UNION BANK OF SWITZERLAND
------
By:________________________________________
Name:______________________________________
Title:_____________________________________
By:________________________________________
Name:______________________________________
Title:_____________________________________
A BANK: THE FIRST NATIONAL BANK OF CHICAGO
------
By:________________________________________
Name:______________________________________
Title:_____________________________________
A BANK: BANK OF SCOTLAND
------
By:________________________________________
Name:______________________________________
Title:_____________________________________
A BANK: THE LONG-TERM CREDIT BANK OF JAPAN, LTD.
------
By:________________________________________
Name:______________________________________
Title:_____________________________________
A BANK: PNC BANK, NATIONAL ASSOCIATION
------
By:________________________________________
Name:______________________________________
Title:_____________________________________
SCHEDULE I
COMMITMENTS
Bank Commitment
---- ----------
Bank of American National Trust and Savings Association $ 20,000,000
Texas Commerce Bank National Association $ 20,000,000
The Bank of New York $ 17,500,000
The Bank of Nova Scotia $ 17,500,000
The Bank of Tokyo-Mitsubishi, Ltd. $ 17,500,000
Credit Lyonnais New York Branch $ 17,500,000
The Fuji Bank, Ltd. $ 17,500,000
NationsBank of Texas, N.A. $ 17,500,000
Societe Generale, Southwest Agency $ 17,500,000
Union Bank of Switzerland $ 17,500,000
The First National Bank of Chicago $ 15,000,000
Bank of Scotland $ 10,000,000
The Long-Term Credit Bank of Japan, Lt.d $ 10,000,000
PNC Bank, National Association $ 10,000,000
------------
Total Commitments $225,000,000
============
SCHEDULE 5.03(C)
None
