<PAGE>
================================================================================
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
FORM 8-K
Current Report Pursuant
to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): October 1, 1997
CLARK REFINING & MARKETING, INC.
(Exact name of registrant as specified in its charter)
Delaware 1-11392 43-1491230
(State or other Jurisdiction (Commission File Number) (I.R.S. Employer
of incorporation) Identification NO.)
8182 Maryland Avenue 63105-3721
St. Louis, Missouri (Zip Code)
(Address of principal executive offices)
Registrant's telephone number, including area code: (314)854-9696
================================================================================
<PAGE>
Item 5. Other Events
On October 1, 1997 Clark USA, Inc., ("Clark USA"), the direct parent of
Clark Refining & Marketing, Inc. (the "Company"), completed certain transactions
related to its capital stock. Clark USA, Trizec Hahn Corporation ("TrizecHahn"),
Tiger Management Corporation ("Tiger") and certain affiliates of Tiger (the
"Tiger Funds") reclassified all of the Class A Common Stock of Clark USA (the
"Class A Common Stock") owned by the Tiger Funds (representing approximately 31%
of the total voting power of all classes of Clark USA stock) as a new class of
common stock designated Class E Common Stock (the "Class E Common Stock").
TrizecHahn then purchased all of the Class E Common Stock for $7.00 per share in
cash, resulting in a total purchase price of $63 million.
Clark USA subsequently reclassified all of the Class E Common Stock into
63,000 shares ($1,000 Liquidation Preference Per Share) of 11 1/2% Senior
Cumulative Exchangeable Preferred Stock, par value $0.01 per share (including
any additional shares paid in lieu of cash dividends, the "Exchangeable
Preferred Stock"). Dividends accrue on the Exchangeable Preferred Stock from
October 1, 1997 and are payable semi-annually commencing April 1, 1998 at a rate
per annum of 11 1/2% of the liquidation preference per share. Dividends may be
paid, at Clark USA's option, on any dividend payment date occurring prior to
October 1, 2002, either in cash or in additional shares of Exchangeable
Preferred Stock. The Exchangeable Preferred Stock is redeemable at Clark USA's
option, in whole or in part, at any time on or after October 1, 2002 at
specified redemption prices plus accrued and unpaid dividends to the date of
redemption. In addition, prior to October 1, 2000, Clark USA may, at its option,
redeem the Exchangeable Preferred Stock, in whole or in part, with the net cash
proceeds from one or more equity offerings at specified redemption prices. Clark
USA is required, subject to certain conditions, to redeem all of the
Exchangeable Preferred Stock outstanding on October 1, 2009. Subject to certain
conditions the Exchangeable Preferred Stock is exchangeable, in whole or in
part, into 11 1/2% Subordinated Exchange Debentures due October 1, 2009. On
October 1, 1997 the Exchangeable Preferred Stock was sold to qualified
institutional buyers in reliance on Rule 144A under the Securities Act.
Also on October 1, 1997, Clark USA and Occidental C.O.B. Partners ("OXY")
agreed to exchange all shares of common stock of Clark USA owned by Oxy for an
equal number of shares of a new class of convertible common stock designated as
Class F Common Stock (the "Class F Common Stock") having voting rights limited
as a class to the lesser of (a) the aggregate voting power of such shares on a
one vote per share basis and (b) 19.9% of the total voting power of all classes
of Clark USA voting stock. The Class F Common Stock will be convertible at any
time to Common Stock, on a one-for-one basis, at the option of any holder other
than Occidental Petroleum Corporation and its affiliates. Pursuant to an
existing Stockholders' Agreement between Clark USA and OXY (the "Oxy
Stockholders' Agreement"), Clark USA was obligated to issue additional shares of
common stock to Oxy if Clark USA effected an underwritten registered public
offering at less than a specified price per share. In connection with the above
transaction, Clark USA issued to Oxy an additional 545,455 shares Class F Common
Stock in full satisfaction of Clark USA's obligation to issue shares under the
Oxy Stockholders' Agreement.
As a result of the above transactions, the total economic interest in Clark
USA is held as follows: TrizecHahn 65.0%, Oxy 28.9%, Gulf Resources 5.9% and
Paul D. Melnuk 0.2%. The total voting power in Clark USA is held as follows:
TrizecHahn 73.3%, Oxy 19.9%, Gulf Resources 6.6% and Paul D. Melnuk, 0.2%
TrizecHahn has informed Clark USA that it intends to distribute to its
shareholders (the "TrizecHahn Spinoff") all of its shares of Clark USA common
stock by the end of 1997. In connection with the TrizecHahn Spinoff, it is
contemplated that Clark USA common stock would be quoted on the Nasdaq Stock
Market or on a national securities exchange. However, there can be no assurance
that the TrizecHahn Spinoff will be completed or that Clark USA common stock
will be so quoted.
Subject to certain market conditions and other factors, Clark USA also may
refinance its Senior Secured Zero Coupon Notes due 2000, Series A and the
Company may refinance its 10 1/2% Senior Notes
<PAGE>
due 2001 through the issuance of new indebtedness and with available cash. Clark
USA expects the refinancing could result in a net reduction of consolidated
long-term debt of approximately $75 million to $100 million. There can be no
assurance, however, that Clark USA will refinance or reduce such long-term
indebtedness, or what the terms of any refinancing, if effected, would be.
On September 25, 1997, the Company entered into a credit agreement (the
"Credit Agreement") which provides for borrowings and letter of credit issuances
of up to the lesser of $400 million or the amount available under a defined
borrowing base calculated with respect to the Company's cash, investments,
eligible receivables and hydrocarbon inventories, provided that borrowings are
limited to the principal amount of $50 million. Borrowings under the Credit
Agreement are secured by substantially all of the Company's cash and cash
equivalents, receivables, crude oil and refined product inventories and
trademarks.
Employment Agreements
The Company has entered into employment agreements with it five senior
executives (the "Executive Employment Agreements"). The Executive Employment
Agreements are substantially similar to the Executive Employment Agreement of
Paul D. Melnuk which is attached as an exhibit hereto. The Executive Employment
Agreements have five year terms, and provide for automatic extensions on an
annual basis unless 90 days notice of cancellation is given by either party. The
Executive Employment Agreements provide that if a Change in Control occurs
within two years prior to the scheduled expiration date, then the expiration
date will be automatically extended until the second anniversary of the Change
in Control date.
The Executive Employment Agreements provide separation benefits to the
employee if the employee's employment is terminated by the Company without
"Cause" prior to the expiration date of the agreement. "Cause" is defined to
include the employee's wilful failure to substantially perform his or her
duties, wilful misconduct that materially injures Clark USA or its affiliates,
or conviction of a criminal offense involving dishonesty or moral turpitude. The
Executive Employment Agreements also provide that if the employee resigns for
"Good Reason" prior to the expiration date of the agreement, the employee will
receive separation benefits. "Good Reason" is defined to include certain
demotions, reductions in compensation, and relocation.
The separation benefits payable under the Executive Employment Agreements
generally include a lump sum payment of three times (or in certain circumstances
two times) annual salary and bonus, acceleration of stock option exercisability,
continuation of the Company's life, medical, accident and disability
arrangements for one year after termination of employment (subject to the
employee's continuing to pay the employee share of the premiums), payment of the
cost of job relocation counseling, and payment of legal fees in connection with
termination. The Executive Employment Agreements also provide for gross-up
payments to be made to the employee to cover certain penalty taxes in connection
with a Change in Control.
As used in the Executive Employment Agreements, a "Change in Control"
includes certain mergers, changes of ownership, changes in the composition of
the board of directors and events of liquidation with respect to Clark USA, and
the disposition of the Company by Clark USA, and also includes certain change of
control events relating to TrizecHahn so long as TrizecHahn continues to own at
least 25% of Clark USA, and no other stockholder owns a greater interest in
Clark USA than TrizecHahn.
<PAGE>
EXHIBIT INDEX
10.1 Credit Agreement, dated as of September 25, 1997, among Clark Refining &
Marketing, Inc., as Borrower, Bankers Trust Company, as Administrative
Agent and Collateral Agent, The Toronto Dominion Bank, as Syndication
Agent, BankBoston, N.A., as Documentation Agent, and the other financial
institutions party thereto.
10.2 Employment Agreement of Paul D. Melnuk.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Dated: October 7, 1997 CLARK REFINING & MARKETING, INC.
By: /s/ Dennis R. Eichholz
----------------------------
Dennis R. Eichholz
Controller and Treasurer
<PAGE>
Exhibit 10.1
================================================================================
CREDIT AGREEMENT
Dated as of September 25, 1997
among
CLARK REFINING & MARKETING, INC.,
as Borrower,
BANKERS TRUST COMPANY,
as Administrative Agent and Collateral Agent,
THE TORONTO-DOMINION BANK,
as Syndication Agent,
BankBoston, N.A.,
as Documentation Agent,
and
THE OTHER FINANCIAL INSTITUTIONS PARTY TO THIS AGREEMENT
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<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Section Page
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<S> <C>
ARTICLE I. DEFINITIONS.......................................................................... 1
1.01. Certain Defined Terms................................................................ 1
1.02. Accounting Principles................................................................ 38
ARTICLE II. LOANS................................................................................ 38
2.01. Commitments.......................................................................... 38
2.02. Borrowing of Loans................................................................... 39
2.03. Settlement of Bank Advances and Repayments........................................... 41
2.04. Periodic Settlement of Agent
and Bank Advances and Repayments..................................................... 42
2.05. Defaulting Banks..................................................................... 43
2.06. Mandatory Payment; Reduction of Commitments.......................................... 44
2.07. Maintenance of Loan Account;
Statements of Account................................................................ 46
2.08. Payment Procedures................................................................... 46
2.09. Cash Management System............................................................... 46
2.10. Application of Payments.............................................................. 47
2.11. Extension of Facility Expiry Date.................................................... 47
ARTICLE III. LETTERS OF CREDIT.................................................................... 48
3.01. Issuance of Letters of Credit........................................................ 48
3.02. Terms of Letters of Credit;
Existing Letters of Credit........................................................... 49
3.03. Banks' Participation................................................................. 49
3.04. Notice of Issuance................................................................... 49
3.05. Payment of Amounts Drawn Under
Letters of Credit.................................................................... 50
3.06. Payment by Banks..................................................................... 51
3.07. Nature of Issuing Bank's Duties...................................................... 52
3.08. Obligations Absolute................................................................. 53
3.09. Uniform Customs and Practice and Uniform
Commercial Code...................................................................... 54
ARTICLE IV. INTEREST, FEES AND EXPENSES, ETC..................................................... 54
4.01. Interest on Prime Rate Loans......................................................... 54
4.02. Interest on Eurodollar Rate Loans.................................................... 54
4.03. Interest After Event of Default...................................................... 55
4.04. Reimbursement of Expenses............................................................ 55
4.05. Commitment Fees and Certain Other Fees............................................... 55
4.06. Letter of Credit Fees................................................................ 56
4.07. Special Provisions Relating to Eurodollar Rate Loans................................. 57
</TABLE>
i
<PAGE>
<TABLE>
<CAPTION>
Section Page
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<S> <C>
4.08. Indemnification in Certain Events................................................... 61
4.09. Net Payments........................................................................ 62
4.10. Affected Banks...................................................................... 65
4.11. Sharing of Payments................................................................. 66
4.12. Calculations........................................................................ 67
ARTICLE V. CONDITIONS PRECEDENT................................................................ 67
5.01. Conditions of Effectiveness......................................................... 67
5.02. Conditions to All Loans............................................................. 71
5.03. Conditions to All Letters of Credit................................................. 73
ARTICLE VI. REPRESENTATIONS AND WARRANTIES...................................................... 74
6.01. Corporate Existence and Power....................................................... 74
6.02. Corporate Authorization; No Contravention........................................... 75
6.03. Governmental Authorization.......................................................... 75
6.04. Binding Effect...................................................................... 75
6.05. Litigation.......................................................................... 75
6.06. No Default.......................................................................... 76
6.07. ERISA Compliance.................................................................... 76
6.08. Use of Proceeds; Margin Regulations................................................. 77
6.09. Title to Properties................................................................. 77
6.10. Taxes............................................................................... 77
6.11. Financial Condition................................................................. 77
6.12. Environmental Matters............................................................... 78
6.13. Collateral Documents................................................................ 80
6.14. Regulated Entities.................................................................. 80
6.15. No Burdensome Restrictions.......................................................... 80
6.16. Copyrights, Patents, Trademarks and
Licenses, etc....................................................................... 81
6.17. Subsidiaries........................................................................ 81
6.18. Insurance........................................................................... 81
6.19. Solvency............................................................................ 81
6.20. Full Disclosure..................................................................... 81
6.21. Maintenance of Accounts............................................................. 82
6.22. Receivables......................................................................... 82
6.23. Inventory........................................................................... 82
6.24. Senior Note Indentures and Holdings
Note Indentures..................................................................... 82
6.25. Material Adverse Effect............................................................. 83
ARTICLE VII. AFFIRMATIVE COVENANTS............................................................... 83
7.01. Financial Statements................................................................ 83
7.02. Certificates; Other Information..................................................... 85
7.03. Notices............................................................................. 86
7.04. Preservation of Corporate Existence, Etc............................................ 88
</TABLE>
ii
<PAGE>
<TABLE>
Section Page
- ------- ----
<S> <C>
7.05. Maintenance of Property............................................................. 88
7.06. Insurance........................................................................... 89
7.07. Payment of Obligations.............................................................. 89
7.08. Compliance with Laws................................................................ 90
7.09. Inspection of Property and Books and Records........................................ 90
7.10. Environmental Laws.................................................................. 91
7.11. Use of Proceeds..................................................................... 91
7.12. Further Assurances.................................................................. 92
7.13. Account Customers................................................................... 92
7.14. Accounts............................................................................ 93
7.15. Transfer of Funds into the Collection............................................... 93
ARTICLE VIII. NEGATIVE COVENANTS.................................................................. 94
8.01. Limitation on Liens................................................................. 94
8.02. Disposition of Assets............................................................... 96
8.03. Consolidations and Mergers.......................................................... 97
8.04. Loans and Investments............................................................... 98
8.05. Limitation on Indebtedness.......................................................... 99
8.06. Transactions with Affiliates........................................................ 99
8.07. Use of Proceeds..................................................................... 100
8.08. Contingent Obligations.............................................................. 100
8.09. Joint Ventures and Pipeline Subsidiary.............................................. 101
8.10. Lease Obligations................................................................... 101
8.11. Restricted Payments................................................................. 102
8.12. Change in Business.................................................................. 102
8.13. Accounting Changes.................................................................. 103
8.14. ERISA............................................................................... 103
8.15. Collection Banks and Concentration Banks;
Cash, Cash Equivalents and Qualifying Investments................................... 103
8.16. Financial Covenants................................................................. 104
8.17. Speculative Trading................................................................. 104
8.18. Amendments of Certain Documents..................................................... 105
ARTICLE IX. EVENTS OF DEFAULT................................................................... 105
9.01. Event of Default.................................................................... 105
9.02. Remedies............................................................................ 109
9.03. Rights Not Exclusive................................................................ 110
ARTICLE X. THE ADMINISTRATIVE AGENT AND THE COLLATERAL AGENT................................... 111
10.01. Appointment of Agent................................................................ 111
10.02. Nature of Duties of Administrative Agent............................................ 111
10.03. Lack of Reliance on Agent Related Persons........................................... 112
10.04. Certain Rights of the Administrative Agent.......................................... 113
</TABLE>
iii
<PAGE>
<TABLE>
<CAPTION>
Section Page
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<S> <C>
10.05. Reliance by Administrative Agent.................................................... 113
10.06. Indemnification of Agent-Related Persons............................................ 113
10.07. Administrative Agent in Individual Capacity......................................... 113
10.08. Holders of Notes.................................................................... 114
10.09. Successor Administrative Agent...................................................... 114
10.10. Collateral Matters.................................................................. 115
10.11. Actions with Respect to Default..................................................... 117
10.12. Delivery of Information............................................................. 117
10.13. Liability of Agent-Related Persons.................................................. 117
10.14. Agents Other Than Administrative Agent.............................................. 118
ARTICLE XI. MISCELLANEOUS....................................................................... 118
11.01. Amendments and Waivers.............................................................. 118
11.02. Notices............................................................................. 120
11.03. No Waiver: Cumulative Remedies...................................................... 121
11.04. Indemnity........................................................................... 121
11.05. Marshalling; Payments Set Aside..................................................... 123
11.06. Successors and Assigns.............................................................. 124
11.07. Assignments, Participations, etc.................................................... 124
11.08. Confidentiality..................................................................... 125
11.09. Set-off............................................................................. 126
11.10. Notification of Addresses,
Lending Offices, Etc................................................................ 126
11.11. Counterparts........................................................................ 126
11.12. Severability........................................................................ 127
11.13. No Third Parties Benefitted......................................................... 127
11.14. Governing Law and Jurisdiction...................................................... 127
11.15. Waiver of Jury Trial................................................................ 127
11.16. Entire Agreement.................................................................... 128
</TABLE>
iv
<PAGE>
SCHEDULES
Schedule 1.01(a) Commitments
Schedule 1.01(b) Eligible Carriers
Schedule 1.01(c) Reserved
Schedule 1.01(d) Major Oil Companies
Schedule 1.01(e) Pricing Grid
Schedule 1.01(f) Money Market Mutual Funds
Schedule 3.02 Existing Letters of Credit
Schedule 5.01(j) Material Contracts
Schedule 6.05 Litigation
Schedule 6.11 Permitted Liabilities
Schedule 6.12 Environmental Matters
Schedule 6.17 Subsidiaries and Minority Interests
Schedule 6.18 Insurance Matters
Schedule 6.25 Material Adverse Effect
Schedule 7.06 Insurance Policies
Schedule 8.01 Permitted Liens
Schedule 8.01(m) Counterparties Not Subject to Pledge Requirement
Schedule 8.02 Assets Sales
Schedule 8.05 Permitted Indebtedness
Schedule 8.08 Contingent Obligations
EXHIBITS
Exhibit A Form of Notice of Borrowing
Exhibit A-1 Form of Incumbency Certificate for Borrowings
Exhibit A-2 Form of L/C Request
Exhibit B Form of Notice of Conversion/ Continuation
Exhibit C Form of Compliance Certificate
Exhibit D Form of Borrowing Base Certificate
Exhibit E Form of Perfection Certificate
Exhibit F Form of Legal Opinion of Company's Counsel
Exhibit G Form of Legal Opinion of Administrative Agent's Counsel
Exhibit H Form of Assignment and Acceptance
Exhibit I Form of Note
Exhibit J-1 Form of Security Agreement
Exhibit J-2 Form of Trademark Security Agreement
Exhibit K Form of Concentration Bank Agreement
Exhibit L Form of Collection Bank Agreement
Exhibit M Form of Custodian Account Agreement
Exhibit N-1 Form of Collateral Account Agreement
Exhibit N-2 Form of Commodities Account Agreement
Exhibit O Form of Tax Sharing Agreement
v
<PAGE>
CREDIT AGREEMENT
----------------
This CREDIT AGREEMENT (the "Agreement") is entered into as of
September 25, 1997 by and among Clark Refining & Marketing, Inc., a Delaware
corporation (the "Company"), the several financial institutions from time to
-------
time party to this Agreement (collectively, the "Banks" and individually, a
-----
"Bank"), Bankers Trust Company, a New York banking corporation ("BT"), as the
- ----- --
administrative agent and collateral agent for the Banks (in such capacities,
together with its successors and assigns, the "Administrative Agent" and the
--------------------
"Collateral Agent", respectively), as an Issuing Bank, and as a Co-Arranger, The
- -----------------
Toronto-Dominion Bank, a Canadian chartered bank ("TD"), as a Co-Arranger and as
--
the syndication agent for the Banks (in such capacity, the "Syndication Agent"),
-----------------
Toronto Dominion (Texas), Inc., as an Issuing Bank and BankBoston, N.A., a
national banking association ("BKB"), as an Issuing Bank, a Co-Arranger and as
---
documentation agent (in such capacity, the "Documentation Agent").
-------------------
WHEREAS, certain of the parties to this Agreement are party to the
Amended and Restated Credit Agreement, dated as of April 19, 1995 and as further
amended or modified (the "Existing Credit Agreement"), which provides for
aggregate Commitments of $400,000,000; and
WHEREAS, the Company desires to refinance the Existing Credit
Agreement and has requested that the Banks provide the Company with a loan
facility, upon the terms and conditions set forth herein to refinance such
Existing Credit Agreement.
NOW, THEREFORE, in consideration of the mutual agreements, provisions
and covenants contained herein, the parties agree as follows:
ARTICLE I.
DEFINITIONS
-----------
1.01. Certain Defined Terms. The following terms have the following
---------------------
meanings:
"Acceptable Issuer" means a United States domestic bank or United
-----------------
States branch of a foreign bank, in each case rated "A-" or higher by S&P and
---
"A3" or higher by Moody's.
"Account" means, any "account", as such term is defined in Section 9-
-------
106 of the UCC, now owned or hereafter acquired by the Company and, in any
event, shall include, without limitation, all accounts receivable, book debts
and
<PAGE>
all other rights to receive the payment of money or other consideration now
owned or hereafter received or acquired by or owing to the Company and arising
in connection with services rendered or goods sold, leased or delivered whether
or not earned by performance and whether or not evidenced by or set forth in or
arising out of any present or future chattel paper, note, draft, lease,
acceptance, writing, bond, instrument, document or general intangible, and all
extensions and renewals thereof, and all rights in, to and under all purchase
orders or receipts now owned or hereafter acquired by the Company and arising in
connection with, services rendered or goods sold, leased or delivered, and all
of the Company's rights to any goods represented by any of the foregoing
(including, without limitation, rights of rescission, replevin, reclamation and
stoppage in transit and rights to returned, reclaimed or repossessed goods), and
all moneys due or to become due to the Company under all contracts for the sale
of goods or the performance of services or both (whether or not yet earned by
performance on the part of the Company or in connection with any other
transaction), now in existence or hereafter occurring, including, without
limitation, the right to receive the proceeds of any of the foregoing, and all
collateral security and guarantees of any kind given by any Person with respect
to any of the foregoing.
"Account Debtor" means any Person who is or who may become obligated
--------------
to the Company under, with respect to, or on account of, an Account.
"Acquisition" means any transaction or series of related transactions
-----------
for the purpose of or resulting, directly or indirectly, in (a) the acquisition
of all or substantially all of the assets of a Person, or of any business or
division of a Person, (b) the acquisition of more than 50% of the capital stock,
partnership interests or equity of any Person or otherwise causing any Person,
to become a Subsidiary, or (c) a merger or consolidation or any other
combination with another Person (other than a Person that is a Subsidiary)
provided that the Company or the Subsidiary is the surviving entity.
"Adjusted Eurodollar Rate" means, with respect to each Interest Period
------------------------
for any Eurodollar Rate Loan, the rate obtained by dividing (i) the Eurodollar
Rate for such Interest Period by (ii) a percentage equal to one (1) minus the
stated maximum rate (stated as a decimal) of all reserves, if any, required to
be maintained against "Eurocurrency Liabilities" as specified in Regulation D of
the FRB (or against any other category of liabilities which includes deposits by
reference to which the interest rate on Eurodollar Rate Loans is determined or
any category of extensions of credit or other assets which includes loans by
2
<PAGE>
a non-United States office of any Bank to United States residents).
"Administrative Agent" has the meaning specified in the introductory
--------------------
clause of this Agreement.
"Administrative Agent's Payment Office" means the address for payments
-------------------------------------
set forth on the signature pages to this Agreement in relation to the
Administrative Agent, or such other address as the Administrative Agent may from
time to time specify.
"Affiliate" means, as to any Person, any other Person which, directly
---------
or indirectly, is in control of, is controlled by, or is under common control
with, such Person. A Person shall be deemed to control another Person if the
controlling Person possesses, directly or indirectly, the power to direct or
cause the direction of the management and policies of the other Person, whether
through the ownership of voting securities, by contract, or otherwise.
"Agent Advances" has the meaning specified in Section 2.02.
--------------
"Agent-Related Persons" means BT, BKB, and TD and any successor
---------------------
Administrative Agent and Collateral Agent arising under Section 10.09 and any
successor letter of credit issuing banks hereunder, in each case together with
their respective Affiliates (including, in the case of BT, in its capacity as
Collateral Agent, an Arranger, as the Concentration Bank, as a Collection Bank
and as the holder of the Collateral Account under the Collateral Account
Agreement), and the officers, directors, employees, agents and attorneys-in-fact
of such Persons and Affiliates.
"Agreement" means this Credit Agreement.
---------
"AOC Stock Purchase and Redemption Agreement" means that certain Stock
-------------------------------------------
Purchase and Redemption Agreement, dated as of December 30, 1992, among AOC
L.P., P. Anthony Novelly, Samuel R. Goldstein, G&N Investments, Inc., TrizecHahn
(formerly known as The Horsham Corporation), Holdings and the Company, as
amended or modified and in effect on April 14, 1995, as the same may be
hereafter amended, amended and restated, supplemented or otherwise modified in
accordance with the terms thereof and of this Agreement and in effect.
"Applicable Margin" means with respect to any date of determination,
-----------------
the interest rate per annum set forth on the Pricing Grid with respect to
determinations of the rate of interest accruing on Prime Rate Loans or
Eurodollar Rate
3
<PAGE>
Loans, in each case under the applicable Level for such date of determination.
"Assignment and Assumption Agreement" has the meaning specified in
-----------------------------------
Section 11.07(b).
"Bank" has the meaning specified in the introductory clause to this
----
Agreement. References to the "Banks" shall include BT, BKB and TD, in their
respective capacities as Issuing Banks.
"Bank Advances" has the meaning specified in Section 2.02.
-------------
"Bankruptcy Code" means the Federal Bankruptcy Reform Act of 1978 (11
---------------
U.S.C. (S)101, et seq.).
-- ---
"Bank Swap Parties" means any Bank or any Affiliate of any Bank that
-----------------
has entered into a Swap Contract with the Company.
"BKB" has the meaning specified in the intro ductory clause to this
---
Agreement.
"Borrowing" means a borrowing hereunder consisting of Loans of the
---------
same Type made to the Company on the same day by the Banks under Article II,
and, other than in the case of Prime Rate Loans, having the same Interest
Period.
"Borrowing Base" means, as of any date of determination, the sum,
--------------
without duplication, of the following amounts (in the case of items (a), (b) and
(g) as reflected on the books or records of the Administrative Agent on such
date of determination and in the case of items (c), (d), (e) and (f) as set
forth in the latest Borrowing Base Certificate delivered pursuant to, and
subject to the provisions of, Section 7.02(e)):
(a) 100% of Eligible Cash and Eligible Cash Equivalents,
(b) 95% of Eligible Investments,
(c) 90% of Major Oil Company Receivables,
(d) 85% of Eligible Receivables not included in clause (c) above,
(e) 75% of Eligible Petroleum Inventory,
(f) 75% of Eligible Petroleum Inventory-Not- Received, and
4
<PAGE>
(g) 100% of Paid but Unexpired Standby Letters of Credit; less
----
(h) the greater of (i) the aggregate of all net obligations of the
Company, as of the date of determination of any Borrowing Base, to any Bank
Swap Party under any Swap Contracts and (ii) zero ($0).
"Borrowing Base Certificate" has the meaning specified in Section
--------------------------
7.02(e).
"Borrowing Date" means any date on which a Borrowing occurs under
--------------
Section 2.02 or under Section 3.05.
"BT" has the meaning specified in the introductory clause to this
--
Agreement.
"Business Day" means any day other than a Saturday, Sunday or other
------------
day on which commercial banks in New York City are authorized or required by law
to close and, if the applicable Business Day relates to any Eurodollar Rate
Loan, means such a day on which dealings are carried on in the applicable
offshore dollar interbank market.
"Capital Expenditures" means, for any period, the sum of all
--------------------
expenditures and other amounts capitalized for financial statement purposes in
accordance with GAAP (whether payable in cash or other property or accrued as a
liability), including the capitalized portion of Capitalized Leases, that
portion of Investments allocable to property, plant or equipment and "turnaround
expenditures" (as such term is customarily used in the refining industry).
"Capital Stock" of any Person means any and all shares, interests,
-------------
participations, or other equivalents (however designated) of capital stock and
any rights (other than debt securities convertible into capital stock), warrants
or options to acquire such capital stock.
"Capitalized Lease" means, as applied to any Person, any lease of
-----------------
property by such Person as lessee which would be capitalized on a balance sheet
of such Person prepared in accordance with GAAP.
"Capitalized Lease Obligations" means the capitalized amount of all
-----------------------------
obligations under Capitalized Leases.
"Cash" means, United States Dollars or a credit deposit in a deposit
----
account denominated in United States Dollars that is available for withdrawal.
5
<PAGE>
"Cash Collateralize" means to pledge and deposit with or deliver to
------------------
the Collateral Agent, for the benefit of the Banks, as additional collateral for
the L/C Obligations or Outstanding Eligible LOIs, as the case may be, cash or
deposit account balances pursuant to documentation in form and substance
satisfactory to the Administrative Agent (which documents are hereby consented
to by the Banks). Variations of such term shall have corresponding meaning.
The Company hereby grants to the Collateral Agent, for the benefit of the Banks,
a security interest in all such cash and deposit account balances.
"Cash Equivalents" means shares of the BT Institutional Cash
----------------
Management Fund, the BT Institutional Cash Reserve Fund and the BT Institutional
Treasury Money Fund and other similar funds as may be requested by the Company
and agreed to by the Administrative Agent.
"CERCLA" has the meaning specified in the definition of "Environmental
------
Laws."
"Change of Control" means any of (a) the failure of Holdings to own at
-----------------
all times 100% of the outstanding Voting Shares of the Company, (b) any Person
or "group" (as such term is defined in Section 13(d) of the Exchange Act) other
than TrizecHahn, Occidental, Tiger or the shareholders of TrizecHahn and their
families, related trusts, and controlled entities controls, directly or
indirectly, whether by ownership of Voting Shares, contract or otherwise, the
power to direct the affairs of or control the composition of at least a majority
of the board of directors or other equivalent body of Holdings or (c) the
acquisition of the beneficial ownership, whether directly or indirectly, of more
than 25% of the outstanding capital stock of Holdings (including any stock so
owned on the Effective Date) by any Person or group (as such term is defined in
Section 13(d) of the Exchange Act), other than TrizecHahn, Occidental, Tiger or
the shareholders of TrizecHahn and their families, related trusts and controlled
entities.
"Code" means the Internal Revenue Code of 1986, and regulations
----
promulgated thereunder.
"Collateral" means all property and interests in property and proceeds
----------
thereof now owned or hereafter acquired by the Company and its Restricted
Subsidiaries in or upon which a Lien now or hereafter exists in favor of the
Collateral Agent for the benefit of the Banks and the Bank Swap Parties, whether
under this Agreement, under any Collateral Document, or under any other
documents executed by any such Person and delivered to the Administrative Agent,
the Collateral Agent or the Banks.
6
<PAGE>
"Collateral Account" means those certain collateral accounts
------------------
maintained by the Collateral Agent with BT, the terms and conditions of which
are set forth in the Collateral Account Agreement.
"Collateral Account Agreement" means the Collateral Account Agreement
----------------------------
entered into by the Company and the Collateral Agent, on behalf of the Banks and
the Bank Swap Parties, in substantially the form of Exhibit N-1.
-----------
"Collateral Agent" has the meaning specified in the introductory
----------------
clause to this Agreement.
"Collateral Documents" means, collectively, (i) the Security
--------------------
Agreement, the Trademark Security Agreement, the Collection Bank Agreement, the
Concentration Bank Agreement, the Collateral Account Agreement, the Custodian
Account Agreement, and each of the Commodities Account Agreements and all other
security agreements, patent and trademark assignments, guarantees and other
similar agreements between the Company or any of its Subsidiaries and the Banks
or the Collateral Agent for the benefit of the Banks and the Bank Swap Parties
now or hereafter delivered to the Banks, the Collateral Agent or the
Administrative Agent pursuant to or in connection with the transactions
contemplated hereby, and all financing statements (or comparable documents now
or hereafter filed in accordance with the UCC or comparable law) against the
Company or any of its Subsidiaries as debtor in favor of the Collateral Agent
for the benefit of the Banks and the Bank Swap Parties as secured party, and
(ii) any amendments, supplements, modifications, renewals, replacements,
consolidations, substitutions and extensions of any of the foregoing.
"Collection Bank" means the "Collection Bank" as defined in the
---------------
Collection Bank Agreement.
"Collection Bank Agreement" means the Collection Account Agreement
-------------------------
among the Company, the Administrative Agent and the Collection Bank,
substantially in the form of Exhibit L.
---------
"Collection Deposit Account" means each Collection Deposit Account
--------------------------
established pursuant to the Collection Bank Agreement.
"Commercial L/C Risk Participation Fee Rate" means, with respect to
------------------------------------------
each day the fee rate per annum set forth on the Pricing Grid with respect to
fees accruing on Commercial Letters of Credit.
"Commercial Letter of Credit" means any Letter of Credit Issued by an
---------------------------
Issuing Bank for the account of the
7
<PAGE>
Company under which the payment for the purchase of Inventory by the Company is
made in the ordinary course of business through the presentation of applicable
documentation, such as drafts, bills of lading and/or other documents.
"Commitment", as to each Bank, shall mean the amount set forth
----------
opposite such Bank's name on Schedule 1.01(a) as such amount may be reduced from
----------------
time to time pursuant to the terms of this Agreement.
"Commitment Fee Rate" means, with respect to each day, the fee rate
-------------------
per annum set forth on the Pricing Grid with respect to fees accruing on the
Commitments.
"Commodities Account Agreement" means the Assignment of Commodities
-----------------------------
Account Security Agreement entered into by the Company and the Administrative
Agent, on behalf of the Banks and the Bank Swap Parties, in substantially the
form of Exhibit N-2.
-----------
"Company" has the meaning specified in the introductory clause to this
-------
Agreement.
"Compliance Certificate" means a certificate substantially in the form
----------------------
of Exhibit C.
---------
"Concentration Account" means the Concentration Collateral Account
---------------------
established pursuant to the Concentration Bank Agreement.
"Concentration Bank" means the "Concentration Bank" as defined in the
------------------
Concentration Bank Agreement.
"Concentration Bank Agreement" means the Concentration Bank Agreement
----------------------------
among the Company, the Concentration Bank and the Collateral Agent on behalf of
the Banks and the Bank Swap Parties, substantially in the form of Exhibit K.
---------
"Contingent Obligation" means, as to any Person, any direct or
---------------------
indirect liability of that Person, whether or not contingent, with or without
recourse, and without duplication, (a) with respect to any Indebtedness, lease,
dividend, letter of credit or other obligation (the "primary obligations") of
-------------------
another Person (the "primary obligor"), including any obligation of that Person
---------------
(i) to purchase, repurchase or otherwise acquire such primary obligations or any
security therefor, (ii) to advance or provide funds for the payment or discharge
of any such primary obligation, or to maintain working capital or equity capital
of the primary obligor or otherwise to maintain the net worth or solvency or any
balance sheet item, level of income or financial
8
<PAGE>
condition of the primary obligor, (iii) to purchase property, securities or
services primarily for the purpose of assuring the owner of any such primary
obligation of the ability of the primary obligor to make payment of such primary
obligation, or (iv) otherwise to assure or hold harmless the holder of any such
primary obligation against loss in respect thereof (each, a "Guaranty
--------
Obligation"); (b) with respect to any Surety Instrument issued for the account
- ----------
of that Person or as to which that Person is otherwise liable for reimbursement
of drawings or payments; (c) to purchase any materials, supplies or other
property from, or to obtain the services of, another Person if the relevant
contract or other related document or obligation requires that payment for such
materials, supplies or other property, or for such services, shall be made
regardless of whether delivery of such materials, supplies or other property is
ever made or tendered, or such services are ever performed or tendered; (d) in
respect of any Swap Contract; or (e) in respect of any outstanding Eligible LOI.
The amount of any Contingent Obligation shall, in the case of Guaranty
Obligations, be deemed equal to the stated or determinable amount of the primary
obligation in respect of which, such Guaranty Obligation is made or, if not
stated or if indeterminable, the maximum reasonably anticipated liability in
respect thereof, and in the case of other Contingent Obligations, shall be equal
to the maximum reasonably anticipated liability in respect thereof.
"Contractual Obligation" means, as to any Person, any provision of any
----------------------
security issued by such Person or of any agreement, undertaking, contract,
indenture, mortgage, deed of trust or other instrument, document or agreement to
which such Person is a party or by which it or any of its property is bound.
"Conversion/Continuation Date" means any date on which, under Section
----------------------------
4.07, the Company (a) converts Loans of one Type to another Type, or (b)
continues as Loans of the same Type, but with a new Interest Period, Loans
having Interest Periods expiring on such date.
"Credit Extension" means and includes (a) the making of any Loans
----------------
hereunder, and (b) the Issuance of any Letters of Credit hereunder.
"Cumulative Cash Flow" means, for the period beginning on March 31,
--------------------
1997 and ending on the applicable measurement date, (a)(i) EBITDA of the Company
and the Restricted Subsidiaries plus (ii) cumulative cash equity contributions
----
made by Holdings to the Company and the Restricted Subsidiaries plus (iii)
----
cumulative cash interest income of the Company and the Restricted Subsidiaries
plus (iv) borrowings, other than under this Agreement, that are
- ----
9
<PAGE>
permitted under Section 8.05 plus (v) net cash proceeds to the Company and the
----
Restricted Subsidiaries from asset sales plus (vi) cash dividends paid to the
----
Company and the Restricted Subsidiaries by any of the Unrestricted Subsidiaries
plus (vii) $160,000,000 minus (b)(i) cash interest expense of the Company and
- ---- -----
the Restricted Subsidiaries, (ii) cash dividends or distributions paid by the
Company and the Restricted Subsidiaries (other than to the Company or another
Restricted Subsidiary) (excluding dividends paid to Holdings for the sole
purpose of making interest payments on the 10.875% Holdings Notes), (iii) cash
taxes paid by the Company and the Restricted Subsidiaries, (iv) Capital
Expenditures made by the Company and the Restricted Subsidiaries in cash, (v)
cash payments by the Company and the Restricted Subsidiaries of principal
(including Capital Lease Obligations and any reduction of outstanding
Indebtedness as a result of refinancing the Senior Notes but excluding Loans) on
Indebtedness and (vi) Investments made by the Company and the Restricted
Subsidiaries not prohibited under Section 8.04, in each case on a cumulative
basis during such period and determined on a consolidated basis.
"Current Assets" of a Person means, as of any date of determination,
--------------
the aggregate amount of all assets of such Person that are classified as current
assets in accordance with GAAP.
"Current Liabilities" of a Person means, as of any date of
-------------------
determination, the aggregate amount of all liabilities of such Person that are
classified as current liabilities in accordance with GAAP (including, without
limitation, tax and other proper accruals) and the current portion of any
Indebtedness and, with respect to the Company, the aggregate outstanding
principal amount of the Loans.
"Default" means any event or circumstance which, with the giving of
-------
notice, the lapse of time, or both, would (if not cured or otherwise remedied
during such time) constitute an Event of Default.
"Dollars", "dollars" and "$" each mean lawful money of the United
------- ------- -
States.
"EBITDA" means, for any period, an amount equal to (a) Net Income
------
(other than extraordinary items (in accordance with GAAP)) plus (b) gross
----
accrued interest expense (other than capitalized interest) during such period,
plus (c) an amount equal to the Company's income tax expense, plus (d) charges
- ---- ----
for depreciation and amortization during such period, plus (e) the amount of
----
expense, if any, from inventory write-down-to-market, minus (f) the amount of
-----
10
<PAGE>
income, if any, from inventory write-up-to-market, plus or minus, as the case
---- -----
may be (g) any other non-cash charges and expenses which have been subtracted or
added, as the case may be, in calculating Net Income of such Person for such
period, all as determined in accordance with GAAP.
"Effective Amount" means (i) with respect to any Loans on any date,
----------------
the aggregate outstanding principal amount thereof after giving effect to any
Borrowings and prepayments or repayments of Loans occurring on such date; (ii)
with respect to any outstanding L/C Obligations on any date, the amount of such
L/C Obligations on such date after giving effect to any Issuances of Letters of
Credit occurring on such date and any other changes in the aggregate amount of
the L/C Obligations as of such date, including as a result of any reimbursements
of outstanding unpaid drawings under any Letters of Credit or any reductions in
the maximum amount available for drawing under Letters of Credit taking effect
on such date; and (iii) with respect to any Outstanding Eligible LOI, the dollar
value of the Petroleum Product in respect of which such Outstanding Eligible LOI
has been issued.
"Effective Date" means September 25, 1997.
--------------
"Eligible Carrier" means any of the carriers and pipeline companies
----------------
listed in Schedule 1.01(b) to this Agreement as revised by the Company from time
----------------
to time with the consent of the Administrative Agent acting, using reasonable
business judgment.
"Eligible Cash" means any and all Cash deposited with the Collateral
-------------
Agent or one of its Affiliates and in each case under the control of the
Collateral Agent, and which is subject to a valid, first priority perfected lien
and security interest in favor of the Collateral Agent on behalf of the Banks
and the Bank Swap Parties.
"Eligible Cash Equivalents" means any and all Cash Equivalents held by
-------------------------
the Collateral Agent in the Collateral Account and which are subject to a valid,
first priority perfected lien and security interest in favor of the Collateral
Agent on behalf of the Banks and the Bank Swap Parties.
"Eligible Investments" means any and all Qualifying Investments of the
--------------------
Company which are subject to a valid, first priority perfected lien and security
interest in favor of the Collateral Agent on behalf of the Banks and the Bank
Swap Parties and which are valued at market.
"Eligible LOI" means any LOI for which all of the following criteria
------------
have been met: (i) the Company shall
11
<PAGE>
have made a request in writing to a Bank to issue such LOI; (ii) such written
request shall state (x) the dollar value of the Petroleum Product in respect of
which such LOI is to be issued, (y) that there is no Event of Default under this
Agreement and (z) the format of such LOI; (iii) such written request shall have
attached a letter of indemnity or a copy thereof if the original is unavailable
(the "Backup LOI") (in form and substance satisfactory to such Bank) from the
----------
supplier of the Petroleum Product addressed to the Company pursuant to which the
supplier of the Petroleum Product warrants good title is held by the Company;
provided, however, if the Company is the original supplier of the Petroleum
- -------- -------
Products, this clause (iii) shall not apply; (iv) the Administrative Agent shall
have received a copy of such written request, including a copy of the Backup LOI
(if applicable), and shall have confirmed availability under this Agreement; (v)
such LOI shall include a provision stating that such LOI will be cancelled upon
the receipt by the beneficiary thereof of certain specified documents,
including, without limitation, title documents; (vi) such Bank shall have
determined, in its sole and absolute discretion, to issue such LOI; and (vii)
such LOI shall be issued pursuant to documentation negotiated between the
Company and such Bank.
"Eligible Petroleum Inventory" means Petroleum Inventory that:
----------------------------
(a)(i) is subject to a valid, first priority perfected lien and
security interest in favor of the Collateral Agent on behalf of the Banks
and the Bank Swap Parties; provided that such requirement shall not apply
to Petroleum Inventory which is in transit on the high seas and not
supported by a Commercial Letter of Credit, the inclusion of which
Inventory in the Borrowing Base shall be limited as provided in the last
proviso of this definition of Eligible Petroleum Inventory or (ii) has been
delivered to an Eligible Carrier subject to a valid, first priority
perfected lien and security interest in favor of the Collateral Agent on
behalf of the Banks and the Bank Swap Parties and UCC-1 Financing
Statements perfecting the security interest of the Collateral Agent on
behalf of the Banks and the Bank Swap Parties in such Petroleum Inventory
have been duly filed in each state and, where required, each county through
which such Petroleum Inventory is to be carried and the place of delivery
and either (x) no document of title is issued with respect to such
Petroleum Inventory by such Eligible Carrier, or (y) if a document of title
is issued with respect to such Petroleum Inventory by such Eligible
Carrier, the original of such document of title is delivered to the
Collateral Agent or its designated bailee or agent;
12
<PAGE>
provided that Eligible Petroleum Inventory shall not include any amount in
--------
excess of $125,000,000 which is attributable to Inventory described in the
immediately preceding clause (ii) of this paragraph (a),
(b) is in good saleable condition, is not deteriorating in quality
and is not obsolete, and is of a quality which (in the locations where sold
by the Company) is marketable at prevailing market prices for such products
and meets all applicable governmental regulations and standards at the
place of intended sale,
(c) is owned by the Company or its Restricted Subsidiaries (provided
all documentation necessary to provide the Collateral Agent with a first
priority, perfected Lien thereon shall be in full force and effect) or, in
the case of Inventory described in clause (ii) of paragraph (a) above, the
Company has the absolute and unconditional right to obtain such Inventory
or Inventory equivalent to such Inventory from an Eligible Carrier, in each
case, free and clear of any and all Liens, security interests and
encumbrances whatsoever, other than those in favor of the Collateral Agent
on behalf of the Banks and the Bank Swap Parties created pursuant to the
Collateral Documents and other than the Permitted Liens described in
Sections 8.01(c), 8.01(d) and 8.01(q),
(d) is located at a location owned or leased by the Company, the
Pipeline Subsidiary or Clark Pipeline Company and set forth in the
Perfection Certificates or has been delivered to an Eligible Carrier under
an arrangement described in clause (ii) of paragraph (a) above,
(e) is not commingled with Inventory of any Person other than the
Company and/or its Restricted Subsidiaries or has been delivered to an
Eligible Carrier under an arrangement described in clause (ii) of paragraph
(a) above,
(f) is not Inventory located at the Company's retail outlets or in
transit thereto from any terminal, and
(g) is otherwise satisfactory to the Administrative Agent, using
reasonable business judgment; provided that Eligible Petroleum Inventory
--------
shall not include any amount in excess of $20,000,000 which is attributable
to Petroleum Inventory in transit on the high seas and which is not
supported by a
13
<PAGE>
Commercial Letter of Credit Issued under this Agreement.
"Eligible Petroleum Inventory-Not-Received" means, at any date of
-----------------------------------------
determination, the aggregate market price of Petroleum Inventory contracted for
purchase by the Company, if
(a) such Petroleum Inventory is subject to no Liens other than those
granted pursuant to the Collateral Documents,
(b) such Petroleum Inventory has not, as of such date of
determination, been delivered to the Company,
(c) such Petroleum Inventory has not been included for the Company as
Eligible Petroleum Inventory in the then effective Borrowing Base Certificate
but will be eligible for inclusion in the Company's Borrowing Base upon delivery
of such Petroleum Inventory to the Company,
(d) is in good saleable condition, is not deteriorating in quality
and is not obsolete, and is of a quality which (in the locations where sold by
the Company) is marketable at prevailing market prices for such products and
meets all applicable governmental regulations and standards at the place of
intended sale, and
(e) the Company's obligations to pay the purchase price of such
Inventory is supported by a Commercial Letter of Credit Issued under this
Agreement which Commercial Letter of Credit requires the original bill of lading
(or other original documentation sufficient to ensure that the Collateral Agent
has a first priority perfected security interest in such Petroleum Inventory)
relating to such Petroleum Inventory to be delivered to the applicable Issuing
Bank or its designee in connection with a drawing under such Commercial Letter
of Credit; provided that, for purposes of inclusion of such Petroleum Inventory
--------
in the Borrowing Base, such Petroleum Inventory shall be valued at an amount not
to exceed the maximum drawing amount of such Commercial Letter of Credit
supporting the purchase price thereof.
"Eligible Receivables" means, at any given time, the aggregate amount
--------------------
of all Accounts (including Accounts from Account Debtors located in Canada which
are acceptable to the Administrative Agent, in its sole discretion), other than
Accounts arising out of the Company's retail service stations or convenience
stores, carried on the books of the Company in accordance with GAAP arising from
the sale or exchange of Inventory in the ordinary course of business with any
Person (other than any Affiliate of the Company),
14
<PAGE>
and which Accounts also meet all of the following requirements:
(a) are invoiced upon delivery of such Inventory (or if such delivery
is made pursuant to a contract between the Company and the Account Debtor,
the invoice is issued not later than 40 days after such delivery) and which
Accounts are originally due within thirty (30) days of the original invoice
date thereof (or with respect to Account Debtors which are railroad
companies or purchasers of asphalt within forty-five (45) days of the
original invoice date thereof) and are not more than thirty (30) days past
due;
(b) constitute the valid, binding and legally enforceable obligation
of the Account Debtor and are not subordinate to any other claim against
such Account Debtor;
(c) are not evidenced by any instrument, unless such instrument has
been pledged and delivered to the Collateral Agent on behalf of the Banks
and the Bank Swap Parties;
(d) are owned by the Company free and clear of all Liens, security
interests or encumbrances whatsoever, other than those in favor of the
Collateral Agent on behalf of the Banks and the Bank Swap Parties and other
than the Permitted Liens described in Sections 8.01(c), 8.01(d) and
8.01(q);
(e) are not the subject of a return, rejection, loss of or damage to
the goods, the sale of which gave rise to the Accounts, or any request for
credit or adjustment, or any other dispute with the Account Debtor on the
Accounts and all actions required to be performed by the Company with
respect to such Accounts have been performed (unless such return or
rejection has been made, such loss or damage has been compensated, or such
credit or adjustment has been allowed and, in each case, has been reflected
in the amount of such Eligible Receivable on the applicable Borrowing Base
Certificate);
(f) if the Account Debtor on any such Accounts is located outside the
United States or Canada, such Accounts are payable in full in Dollars and
either (i) the Account Debtor has been approved in writing by the
Administrative Agent, using reasonable business judgment or (ii) an
Acceptable Issuer has issued an irrevocable letter of credit in the amount
of such Accounts for the benefit of the Company and on which the Company
may draw in the event of a default by such
15
<PAGE>
Account Debtor in respect of such Accounts, provided that such letter of
--------
credit is subject to a valid, first priority perfected lien and security
interest in favor of the Collateral Agent on behalf of the Banks and the
Bank Swap Parties or that BT is the collecting bank for such letter of
credit and a copy of such letter of credit has been delivered to the
Collateral Agent and, provided further, that the proceeds of any drawing
-------- -------
under such letter of credit are to be deposited into the Concentration
Account;
(g) are owing by an Account Debtor which has not been determined to
be uncreditworthy in the reasonable business judgment of the Administrative
Agent and notice of such determination, identifying such Account Debtor,
shall have been sent to the Company by the Administrative Agent; provided
--------
that any Account of any Account Debtor which is so determined to be
uncreditworthy shall not be excluded from Eligible Receivables solely on
the basis of such determination if an Acceptable Issuer has issued an
irrevocable letter of credit in the amount of such Account for the benefit
of the Company and on which the Company may draw in the event of a default
by such Account Debtor in respect of such Account and (i) such letter of
credit is subject to a valid, first priority perfected lien and security
interest in favor of the Collateral Agent on behalf of the Banks and the
Bank Swap Parties or BT is the negotiating and collecting bank for such
letter of credit and a copy of such letter of credit has been delivered to
the Collateral Agent and (ii) the proceeds of any drawing under such
irrevocable letter of credit are to be deposited into the Concentration
Account;
(h) are owing by an Account Debtor which has not (i) filed or had
filed against it, any Insolvency Proceeding, (ii) failed, (iii) suspended
business operations, (iv) become insolvent, (v) called a meeting of its
creditors for the purpose of obtaining any material financial concession or
accommodation, or (vi) had or suffered a receiver or a trustee to be
appointed for all or a significant portion of its assets or affairs (this
clause (h) shall not apply if and to the extent an Acceptable Issuer has
issued an irrevocable standby letter of credit in the amount of such
Eligible Receivable for the benefit of the Company and on which the Company
may draw in the event of a default by the Account Debtor with respect to
such Eligible Receivable; provided that such letter of credit is subject to
--------
a valid, first priority perfected lien and security interest in favor of
the Collateral Agent on behalf of the Administrative Agent, the Banks
16
<PAGE>
and the Bank Swap Parties or that BT is the collecting bank for such letter
of credit and a copy of such letter of credit has been delivered to the
Collateral Agent and the Administrative Agent; and provided, further, that
-------- -------
the proceeds of any drawing under such letter of credit are to be deposited
into the Concentration Account);
(i) are subject to a valid, first priority, perfected lien and
security interest in favor of the Collateral Agent on behalf of the Banks
and the Bank Swap Parties;
(j) are due from a customer to the extent that such Accounts due from
such customer and its Affiliates do not exceed in the aggregate an amount
equal to (i) if such customer is a Person listed on Schedule 1.01(d), 20%
----------------
of the aggregate of all Accounts at such time, and (ii) otherwise, 5% of
the aggregate of all Accounts at such time; provided that notwithstanding
--------
clause (i) above, Accounts due from Chevron U.S.A. Inc. and its Affiliates
shall not have a face amount in the aggregate in excess of $50,000,000;
(k) are not denominated in any currency other than Dollars or payable
outside the United States or Canada, the Dollar equivalent of such amount
to be included in the Borrowing Base being based on the then effective
exchange rate as of the relevant date of calculation of the Borrowing Base;
and
(l) otherwise have not been determined to be unsatisfactory to the
Administrative Agent, using reasonable business judgment and notice of such
determination, identifying such Eligible Receivable, shall have been sent
to the Company by the Administrative Agent;
less (A) all reserves established in the reasonable business judgment of the
- ----
Administrative Agent with respect to such Accounts and (B) any and all offsets,
counterclaims or contracts in respect thereof, including all federal, state and
other taxes (but excluding income taxes) in respect thereof. For the purpose of
this definition, to the extent that the Company is at any time directly or
contingently indebted for any reason to any Account Debtor, the Accounts owing
to the Company by such Account Debtor shall be deemed to be subject to an
offset, counterclaim or contra in the amount of such Indebtedness; provided that
--------
to the extent that any Indebtedness of the Company to any Account Debtor is
secured by a Letter of Credit, the portion of the Indebtedness so secured (not
to exceed the lesser of (i) the face amount of the Letter of Credit and (ii) the
outstanding
17
<PAGE>
amount of such Indebtedness) shall not be deemed to be an offset, counterclaim
or contra with respect to the Accounts of such Account Debtor owing to the
Company.
"Environmental Claims" means all claims complaints, actions, suits,
--------------------
proceedings or investigations, however commenced or asserted, by any
Governmental Authority or other Person alleging potential liability or
responsibility for violation of any Environmental Law, or for release or injury
to the environment or threat to public health, personal injury (including
sickness, disease or death), property damage, natural resources damage, or
otherwise alleging liability or responsibility for damages (punitive or
otherwise), investigation, cleanup, removal, remedial or response costs,
monitoring, restitution, civil or criminal penalties, injunctive relief, or
other type of relief, resulting from or based upon the presence, placement,
discharge, emission or release (including intentional and unintentional,
negligent and non-negligent, sudden or non-sudden, accidental or non-accidental,
placement, spills, leaks, discharges, emissions or releases) of any Hazardous
Material at, in, or from any Facility, whether or not owned by the Company.
"Environmental Laws" means all federal, state or local laws, statutes,
------------------
common law duties, rules, regulations, ordinances and codes, together with all
administrative orders, directed duties, licenses, approvals, judicial judgments
or decrees, authorizations and permits of, and agreements with, any Governmental
Authorities, in each case relating to environmental, health, safety and land use
matters; including, without limitation, the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended ("CERCLA"), the
------
Clean Air Act, the Federal Clean Water Act, the Solid Waste Disposal Act, the
Federal Resource Conservation and Recovery Act, as amended, the Toxic Substances
Control Act, the Emergency Planning, Community Right-to-Know Act, the Federal
Occupational Safety and Health Act, the Hazardous Materials Transportation Act,
the National Environmental Policy Act, the Federal Oil Pollution Act of 1990 and
any similar state laws (including state laws implementing such federal laws).
"ERISA" means the Employee Retirement Income Security Act of 1974, as
-----
amended from time to time, and any successor statute thereto and all final or
temporary regulations promulgated thereunder and published, generally applicable
rulings entitled to precedential effect.
"ERISA Affiliate" means any entity required at any relevant time to be
---------------
aggregated with the Company under Sections 414(b) or (c) of the Code or Section
4001 of ERISA; provided, however, that for purposes of the provisions of
-------- -------
18
<PAGE>
this Agreement relating to Section 412 of the Code or Section 302 of ERISA, the
term ERISA Affiliate shall also mean any entity that is a member of any group of
persons, as provided in Sections 414(m) or (o) of the Code, of which the Company
is a member.
"ERISA Event" means (a) a Reportable Event with respect to a Pension
-----------
Plan; (b) a withdrawal by the Company or any ERISA Affiliate from a Pension Plan
subject to Section 4063 of ERISA during a plan year in which it was a
substantial employer (as defined in Section 4001(a)(2) of ERISA) or a cessation
of operations which is treated as such a withdrawal under Section 4062(e) of
ERISA if such withdrawal could reasonably be expected to result in a material
liability to the Company; (c) a complete or partial withdrawal by the Company or
any ERISA Affiliate from a Multiemployer Plan, notification that a Multiemployer
Plan is in reorganization, the termination of a Multiemployer Plan under Section
4041A of ERISA or the commencement of proceedings to terminate a Multiemployer
Plan, if any of the foregoing events could reasonably be expected to result in a
material liability to the Company; (d) the filing of a notice of intent to
terminate a Pension Plan under Section 4041(c) of ERISA or the treatment of a
Plan amendment as a termination under Section 4041 of ERISA, or the commencement
of proceedings by the PBGC to terminate a Pension Plan; or (e) the imposition of
any material liability under Title IV of ERISA, other than PBGC premiums due but
not delinquent under Section 4007 of ERISA, upon the Company or any ERISA
Affiliate.
"Eurodollar Rate" shall mean, with respect to the Interest Period for
---------------
each Eurodollar Rate Loan comprising part of the same Borrowing, an interest
rate per annum equal to the rate (rounded upward to the nearest whole multiple
of one-sixteenth (1/16) of one percent (1.00%) per annum, if such rate is not
such a multiple) of the offered quotation, if any, to first class banks in the
Eurodollar market by BT for U.S. dollar deposits of amounts in immediately
available funds comparable to the principal amount of the Eurodollar Rate Loan
for which the Eurodollar Rate is being determined with maturities comparable to
the Interest Period for which such Eurodollar Rate will apply as of
approximately 10:00 A.M., New York City time, two (2) Business Days prior to the
commencement of such Interest Period. If BT fails to provide its offered
quotation to the Administrative Agent, the Eurodollar Rate shall be determined
on the basis of the arithmetic average of the quotations of such other reference
banks as determined by the Administrative Agent, in its sole discretion.
"Eurodollar Rate Loan" shall mean a Loan that bears interest based on
--------------------
the Eurodollar Rate.
19
<PAGE>
"Event of Default" means any of the events or circumstances specified
----------------
in Section 9.01.
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
------------
and the rules and regulations promulgated thereunder.
"Existing Credit Agreement" has the meaning specified in the recitals
-------------------------
to this Agreement.
"Expenses" shall mean all present and future expenses incurred by or
--------
on behalf of the Administrative Agent and/or the Collateral Agent in connection
with any other Loan Document or otherwise related thereto, whether incurred
heretofore or hereafter, which expenses shall include, without being limited to,
the cost of record searches, the reasonable fees and expenses of attorneys and
paralegals, all costs and expenses incurred by the Administrative Agent and/or
the Collateral Agent in opening bank accounts and lockboxes, depositing checks,
receiving and transferring funds, and any charges imposed on the Administrative
Agent and/or the Collateral Agent due to insufficient funds of deposited checks
and the Administrative Agent's and/or the Collateral Agent's standard fee
relating thereto, reasonable fees and expenses of collateral examinations and
collateral audits, and of accountants, appraisers or other consultants, experts
or advisors employed or retained by the Administrative Agent and/or the
Collateral Agent, fees and taxes relative to the filing or recording of
financing statements and other Collateral Documents, costs of recording
Collateral Documents, all expenses, costs and fees set forth in Article 4 of
---------
this Agreement, reasonable fees and expenses incurred in connection with the
negotiation, preparation, review, execution and delivery of the Loan Documents,
irrespective of whether the transactions contemplated hereby are consummated,
including any amendments, supplements, waivers or consents executed and
delivered in connection therewith, with syndicating the credit facility
contemplated hereunder (including, without limitation, costs and expenses for
preparation of information packages for prospective Banks and arranging and
conducting "due diligence" meetings), with the administration, collection,
enforcement and termination (including termination of any Liens) of the Loan
Documents, and with the completion of the due diligence review by the
Administrative Agent and the Banks and all fees and expenses required to be paid
pursuant to the Fee Letters. In addition, Expenses shall include all costs and
expenses (including the reasonable fees and disbursements of counsel and other
professionals, including internal counsel) paid or incurred by the Agents or any
Bank in (i) enforcing or defending its rights under or in respect of any Loan
Document, the Collateral Documents or any other document or
20
<PAGE>
instrument now or hereafter executed and delivered in connection herewith, (ii)
collecting the Loans and reimbursement obligations under Letters of Credit,
(iii) foreclosing or otherwise collecting upon the Collateral or any part
thereof, and (iv) obtaining any legal, accounting or other advice in connection
with any of the foregoing, including in a "work out", restructuring or similar
scenario.
"Facilities" means any real property now, heretofore or hereafter
----------
owned or leased or used by the Company or any of its Subsidiaries, including all
real property relating to the land and improvements known as the Blue Island
Refinery, located in Blue Island, Illinois, together with the terminals, tanks,
pipelines and related facilities used or intended for use in connection
therewith, the land and improvements known as the Hartford Refinery, located in
Hartford, Illinois, together with the terminals, tanks, pipelines and related
facilities used or intended for use in connection therewith, the Port Arthur
Refinery and all terminals and retail outlets owned, leased or operated by the
Company or any of its Subsidiaries.
"Facility Expiry Date" means the earliest of (a) the occurrence of an
--------------------
Event of Default and termination of the Commitments pursuant to Section 9.02,
(b) December 31, 1999 and (c) any other termination of the commitments pursuant
to the terms of this Agreement; provided, that unless the Facility Expiry Date
--------
as described in clause (a) or (c) of this definition occurs, the "Facility
Expiry Date" may be extended pursuant to Section 2.11.
"Federal Funds Rate" means, for any day, the rate set forth in the
------------------
weekly statistical release designated as H.15(519), or any successor
publication, published by the Federal Reserve Bank of New York (including any
such successor, "H.15(519)") on the preceding Business Day opposite the caption
"Federal Funds (Effective)"; or, if such rate is not so published on any such
preceding Business Day, the rate for such day will be the arithmetic mean as
determined by the Administrative Agent of the rates for the last transaction in
overnight Federal funds arranged prior to 9:00 a.m. (New York City time) on that
day by each of three leading brokers of Federal funds transactions in New York
City selected by the Administrative Agent.
"Fee Letter" has the meaning specified in Section 4.05(a).
----------
"Fees" shall mean, collectively, fees referred to in Sections 4.05 and
----
4.06.
21
<PAGE>
"FIFO" means the first-in-first-out method of determining value of
----
Inventory in accordance with GAAP.
"FRB" means the Board of Governors of the Federal Reserve System, and
---
any successor Governmental Authority.
"GAAP", as more fully discussed in Section 1.02, means generally
----
accepted accounting principles in the United States as in effect from time to
time as set forth in the opinions and pronouncements of the Accounting
Principles Board of the American Institute of Certified Public Accountants and
statements and pronouncements of the Financial Accounting Standards Board or in
such other statements of such other entity as may be approved by a significant
segment of the accounting profession which are applicable to the circumstances.
"Governmental Authority" means any nation or government, any state or
----------------------
other political subdivision thereof, any central bank (or similar monetary or
regulatory authority) thereof, any entity exercising executive, legislative,
judicial, regulatory or administrative functions of or pertaining to government,
and any corporation or other entity owned or controlled, through stock or
capital ownership or otherwise, by any of the foregoing.
"Guaranty Obligation" has the meaning specified in the definition of
-------------------
"Contingent Obligation."
"Hazardous Materials" means any substances that are regulated by, or
-------------------
which form the basis of liability under, any Environmental Law, including all
substances identified under any Environmental Law as a pollutant, contaminant,
hazardous waste, hazardous constituent, special waste, hazardous substance,
hazardous material, or toxic substance, and petroleum or petroleum derived
substance or waste.
"Holdings" means Clark USA, Inc., a Delaware corporation.
--------
"Holdings Note Indentures" means (i) that certain Indenture, dated as
------------------------
of May 15, 1993 between Holdings and Bankers Trust Company, as trustee, relating
to the Senior Secured Zero Coupon Notes, due 2000, Series A, and (ii) that
certain Indenture, dated as of December 1, 1995 between Holdings and Chase
Manhattan Bank N.A., as trustee relating to the 10.875% Notes, due December 1,
2005 in each case, as the same may hereafter be amended, amended and restated,
supplemented or otherwise modified in accordance with the terms thereof and of
this Agreement and in effect.
22
<PAGE>
"Holdings Notes" means (i) the Senior Secured Zero Coupon Notes due
--------------
2000, Series A of Holdings issued under the Holdings Note Indenture, dated as of
May 15, 1993 and (ii) the 10.875% Notes, due December 1, 2005 of Holdings issued
under the Holdings Note Indenture, dated as of December 1, 1995.
"Indebtedness" of any Person means, without duplication, (a) all
------------
indebtedness for borrowed money; (b) all obligations issued, undertaken or
assumed as the deferred purchase price of property or services (other than trade
payables entered into in the ordinary course of business on ordinary terms); (c)
all non-contingent reimbursement or payment obligations with respect to Surety
Instruments; (d) all obligations evidenced by notes, bonds, debentures or
similar instruments, including obligations so evidenced incurred in connection
with the acquisition of property, assets or businesses; (e) all indebtedness
created or arising under any conditional sale or other title retention
agreement, or incurred as financing, in either case with respect to property
acquired by the Person (even though the rights and remedies of the seller or
bank under such agreement in the event of default are limited to repossession or
sale of such property) and all obligations under any linefill agreements; (f)
all Capitalized Lease Obligations; (g) all net obligations with respect to Swap
Contracts; (h) all indebtedness referred to in clauses (a) through (g) above
secured by (or for which the holder of such Indebtedness has an existing right,
contingent or otherwise, to be secured by) any Lien upon or in property
(including accounts and contract rights) owned by such Person, even though such
Person has not assumed or become liable for the payment of such Indebtedness;
and (i) all Guaranty Obligations in respect of indebtedness or obligations of
others of the kinds referred to in clauses (a) through (g) above.
"Indemnified Liabilities" has the meaning specified in Section 11.05.
-----------------------
"Indemnified Person" has the meaning specified in Section 11.05.
------------------
"Independent Auditor" has the meaning specified in Section 7.01(a).
-------------------
"Insolvency Proceeding" means (a) any case, action or proceeding
---------------------
before any Governmental Authority relating to bankruptcy, reorganization,
insolvency, liquidation, receivership, dissolution, winding-up or relief of
debtors, or (b) any general assignment for the benefit of creditors,
composition, marshalling of assets for creditors, or other, similar arrangement
in respect of its creditors generally or
23
<PAGE>
any substantial portion of its creditors; undertaken under U.S. Federal, state
or foreign law, including the Bankruptcy Code.
"Institutional Finance Documents" means the Senior Notes, the Senior
-------------------------------
Note Indentures, the Holdings Notes, the Holdings Note Indentures (including, in
each case, any refinancing, replacement or refunding thereof in accordance with
the terms of this Agreement) each of the exhibits and schedules thereto, and all
other agreements, instruments and documents relating thereto.
"Interest Period" means, as to any Eurodollar Rate Loan, the period
---------------
commencing on the Borrowing Date of such Loan or on the Conversion/Continuation
Date on which the Loan is converted into or continued as an Eurodollar Rate
Loan, and ending on the date one, two, three or six months thereafter as
selected by the Company in its Notice of Borrowing or Notice of
Conversion/Continuation; provided that: (i) if any Interest Period would
--------
otherwise end on a day that is not a Business Day, that Interest Period shall be
extended to the following Business Day unless the result of such extension would
be to carry such Interest Period into another calendar month, in which event
such Interest Period shall end on the preceding Business Day; (ii) any Interest
Period that begins on the last Business Day of a calendar month (or on a day for
which there is no numerically corresponding day in the calendar month at the end
of such Interest Period) shall end on the last Business Day of the calendar
month at the end of such Interest Period; and (iii) no Interest Period for any
Loan shall extend beyond the Facility Expiry Date then in effect.
"Inventory" means any "inventory" as that term is defined in Section
---------
9-109(4) of the UCC, as well as all inventory which is held for sale or which
consists of raw materials or work in process.
"Investment" means all expenditures made and all liabilities incurred
----------
(including Contingent Obligations) for or in connection with the acquisition of
stock, other equity interests or Indebtedness of another Person, loans,
advances, capital contributions or transfers of property (other than sales or
transfers permitted under Section 8.02) to another Person, acquisition of assets
of another Person (other than assets acquired as a creditor in a third party's
bankruptcy or reorganization), or any other investment whether such investment
is acquired by purchase, exchange, issuance of stock or other securities,
merger, reorganization or otherwise; provided, however, that the term
"Investment" shall not include (a) current trade and customer accounts
receivable for goods furnished or services rendered in the ordinary course of
business and payable in
24
<PAGE>
accordance with customary trade terms, (b) advances, payments and prepayments to
suppliers for goods and services in the ordinary course of business, (c)
advances to employees for travel expenses, drawing accounts and similar
expenditures, (d) stock or other securities acquired in connection with the
satisfaction or enforcement of Indebtedness or claims due or owing or as
security for any such Indebtedness or claim, (e) demand deposits in banks or
trust companies, (f) any Capital Expenditures or (g) Guaranty Obligations to the
extent included in Indebtedness. In determining the aggregate amount of
Investments outstanding at any particular time, (i) a guaranty shall be valued
at not less than the principal amount outstanding; (ii) returns of capital (but
only by repurchase, redemption, retirement, repayment, liquidating dividend or
liquidating distribution) shall be deducted; (iii) earnings, whether as
dividends, interest or otherwise, shall not be deducted; and (iv) decreases in
the market value shall not be deducted unless such decreases are computed in
accordance with GAAP.
"IRS" means the Internal Revenue Service, and any successor
---
Governmental Authority.
"Issue" means, with respect to any Letter of Credit, to issue or to
-----
extend the expiry of, or to renew or increase the amount of, such Letter of
Credit; and the terms "Issued," "Issuing" and "Issuance" have corresponding
------ ------- --------
meanings.
"Issuing Bank" means each of BT, BKB and TD in its capacity as issuer
------------
of one or more Letters of Credit.
"Issuing Bank Fees" has the meaning set forth in Section 4.06(c).
-----------------
"Joint Venture" means a partnership, joint venture or other similar
-------------
legal arrangement (whether created by contract or conducted through a separate
legal entity) now or hereafter formed by the Company or any of its Restricted
Subsidiaries with another Person in order to conduct a common venture or
enterprise with such Person.
"L/C Obligations" means, at any time, without duplication, the sum of
---------------
(i) the aggregate undrawn stated amount of all Letters of Credit outstanding at
such time, plus (ii) with respect to determinations of whether a Loan shall be
----
made or a Letter of Credit issued, the aggregate undrawn stated amount of all
Letters of Credit requested by the Company the issuance of which has been
authorized by an Issuing Bank but which have not yet been issued, plus (iii) the
----
aggregate amount of all drawings under Letters of Credit for which any Issuing
Bank has not at such time been reimbursed, plus (iv) the aggregate amount of all
----
payments
25
<PAGE>
made by each Bank to an Issuing Bank with respect to such Bank's participation
in Letters of Credit as provided in Section 3.03 for which the Company has not
at such time reimbursed the Banks, whether by way of a Loan or otherwise.
"L/C-Related Documents" means the Letters of Credit, the L/C Requests
---------------------
and any other document relating to any Letter of Credit, including any of the
applicable Issuing Bank's standard form documents for Letter of Credit
Issuances.
"L/C Request" means a notice substantially in the form of Exhibit A-2.
-----------
"Lead Bank" means each of BT, BKB and TD, in each case in its capacity
---------
as a Bank.
"Lending Office" means, as to any Bank, the office or offices of such
--------------
Bank specified as its "Lending Office" or "Domestic Lending Office" or
"Eurodollar Lending Office", as the case may be, on the signature page of such
Bank attached to this Agreement, or such other office or offices as such Bank
may from time to time notify the Company and the Administrative Agent.
"Letter of Credit" means any Letter of Credit (whether a Standby
----------------
Letter of Credit or a Commercial Letter of Credit) Issued by any Issuing Bank
pursuant to Article III (including any Letter of Credit issued and outstanding
under the Existing Credit Agreement which is deemed a Letter of Credit hereunder
pursuant to Article III).
"Level" means Level 1, Level 2, Level 3, Level 4, Level 5, Level 6 or
-----
Level 7 as the case may be, as set forth on the Pricing Grid.
"Lien" means any security interest, mortgage, deed of trust, pledge,
----
hypothecation, assignment, charge or deposit arrangement, encumbrance, lien
(statutory or other) or preferential arrangement of any kind or nature
whatsoever in respect of any property (including those created by, arising under
or evidenced by any conditional sale or other title retention agreement, the
interest of a lessor under a capital lease, any financing lease having
substantially the same economic effect as any of the foregoing, or the filing of
any financing statement naming the owner of the asset to which such lien relates
as debtor, under the UCC or any comparable law) and any contingent or other
agreement to provide any of the foregoing, but not including the interest of a
lessor under an operating lease.
26
<PAGE>
"Loan" has the meaning specified in Section 2.01 and may be a Prime
----
Rate Loan or a Eurodollar Rate Loan.
"Loan Account" has the meaning set forth in Section 2.07.
------------
"Loan Documents" means this Agreement, any Notes, the Collateral
--------------
Documents, the Fee Letters, the L/C-Related Documents, any Swap Contracts
between the Company and the Bank Swap Parties, any Eligible LOIs (and the
agreements executed and delivered in connection therewith) and all other
documents delivered to the Administrative Agent, the Collateral Agent or any
Bank in connection herewith or therewith.
"Lockbox" means a lockbox and related accounts in which wholesale
-------
customers deposit checks representing proceeds of collateral, the withdrawal of
funds therefrom being limited to withdrawals by the Collection Bank pursuant to
the direction of the Company and otherwise in accordance with the Credit
Agreement.
"LOI" means any letter of indemnity issued to enable the Company to
---
obtain payment under a letter of credit issued in favor of the Company for
payment, or to obtain payment from a purchaser, for Petroleum Product sold by
the Company despite the Company's inability to present to the issuing bank or to
the purchaser, as the case may be, certain documents including, without
limitation, title documents, required for payment under such letter of credit.
"Long Term Treasury Securities" means U.S. Treasury Notes with
-----------------------------
maturities not exceeding two years.
"Major Oil Company Receivable" means, (a) an Eligible Receivable
----------------------------
carried on the books of the Company as to which the Account Debtor thereon is
listed on Schedule 1.01(d) to this Agreement (which Schedule may be amended from
----------------
time to time by the Administrative Agent, using reasonable business judgment (by
either adding to or deleting from such Schedule the names of Account Debtors)),
or (b) any Eligible Receivable as to which an Acceptable Issuer has issued an
irrevocable standby letter of credit in the amount of such Eligible Receivable
for the benefit of the Company and on which the Company may draw in the event of
a default by the Account Debtor with respect to such Eligible Receivable;
provided that such letter of credit is subject to a valid, first priority
- --------
perfected lien and security interest in favor of the Collateral Agent on behalf
of the Administrative Agent, the Banks and the Bank Swap Parties or that BT is
the collecting bank for such letter of credit and a copy of such letter of
credit has been delivered to the Collateral Agent and the Administrative
27
<PAGE>
Agent; and provided, further, that the proceeds of any drawing under such letter
-------- -------
of credit are to be deposited into the Concentration Account.
"Majority Banks" means at any time Banks then holding at least 51% of
--------------
the then aggregate unpaid principal amount of the Loans and/or Letters of
Credits, or, if no such principal amount is then outstanding, Banks then having
at least 51% of the Commitments.
"Margin Stock" means "margin stock" as such term is defined in
------------
Regulation G, T, U or X of the FRB.
"Material Adverse Effect" means (a) a material adverse effect upon,
-----------------------
the operations, business, properties, condition (financial or otherwise) or
prospects of the Company or the Company and the Restricted Subsidiaries taken as
a whole; (b) a material impairment of the ability of the Company or any
Restricted Subsidiary to perform under any Loan Document and to avoid any Event
of Default; or (c) a material adverse effect upon the legality, validity,
binding effect or enforceability against the Company or any Restricted
Subsidiary of any Loan Document.
"Material Contracts" means each contract, agreement and commitment
------------------
(other than the other Loan Documents) to which the Company or any of the
Restricted Subsidiaries will be a party after giving effect to the transactions
contemplated by the Loan Documents, and that will be or are material to the
business, assets or operations of the Company and the Restricted Subsidiaries,
taken as a whole.
"Moody's" shall mean Moody's Investors Service, Inc. and any successor
-------
thereto.
"Multiemployer Plan" means a "multiemployer plan", within the meaning
------------------
of Section 4001(a)(3) of ERISA, to which the Company or any ERISA Affiliate
makes, is making, or is obligated to make contributions or, during the preceding
three calendar years, has made, or been obligated to make, contributions.
"Net Income" means, for any period, the net income (or net loss, as
----------
the case may be) of the Company and the Restricted Subsidiaries for such period,
determined on a consolidated basis among them in accordance with GAAP.
"Net Worth" of any Person means, as of any date of determination, the
---------
excess of the Total Assets of such Person at such date of determination over the
Total Liabilities of such Person at such date of determination.
28
<PAGE>
"New Pipeline Subsidiary" means a special purpose corporation, to be
-----------------------
formed after the date of this Agreement, which will (a) be a wholly-owned
Subsidiary of the Company, (b) be the owner of record of some or all right,
title and interest in and to some or all pipeline assets and related assets
owned or to be owned by the Company and its Subsidiaries and (c) not engage in
any other activity or business.
"9-1/2% Note Indenture" means that certain Indenture dated as of
---------------------
September 15, 1992 between the Company and Bank of New York, N.A., as trustee,
relating to the 9-1/2% Senior Notes, as the same may hereafter be amended,
amended and restated, supplemented or otherwise modified or refinanced or
replaced, in each case in accordance with the terms thereof and of this
Agreement and in effect.
"9-1/2% Notes" means the 9-1/2% Senior Notes due September 15, 2004 of
------------
the Company issued under the 9-1/2% Note Indenture.
"Note" means a promissory note executed by the Company in favor of a
----
Bank pursuant to Section 5.01(a), in substantially the form of Exhibit I.
---------
"Notice of Borrowing" means a notice in substantially the form of
-------------------
Exhibit A.
- ---------
"Notice of Conversion/Continuation" means a notice in substantially
---------------------------------
the form of Exhibit B.
---------
"Obligations" means all advances, debts, liabilities, obligations,
-----------
Fees and Expenses, covenants and duties arising under any Loan Document owing by
the Company to any Bank, the Administrative Agent, the Collateral Agent, any
Issuing Bank, any Bank Swap Party, any Indemnified Person, or any other Agent-
Related Persons whether direct or indirect (including those acquired by
assignment), absolute or contingent, due or to become due, now existing or
hereafter arising.
"Occidental" means Occidental Petroleum Corporation, a Delaware
----------
corporation.
"Organization Documents" means, for any corporation, the certificate
----------------------
or articles of incorporation, the bylaws, any certificate of designations or
instrument relating to the rights of preferred shareholders of such corporation,
any shareholder rights agreement, and all applicable resolutions of the board of
directors (or any committee thereof) of such corporation.
29
<PAGE>
"Other Taxes" means any present or future stamp or documentary taxes
-----------
or any other excise or property taxes, charges or similar levies which arise
from any payment made hereunder or from the execution, delivery or registration
of, or otherwise with respect to any Loan Document.
"Outstanding Eligible LOI" means any Eligible LOI for which the Bank
------------------------
issuing such Eligible LOI has not notified the Administrative Agent that such
Eligible LOI has been cancelled.
"Paid but Unexpired Standby Letters of Credit" means, as of any date
--------------------------------------------
of determination, the excess, if any, of (a) the outstanding amount of Standby
Letters of Credit issued to support the purchase of Inventory of the Company as
of such date of determination, over (b) the aggregate outstanding amount due and
owing as of such date of determination by the Company to the supplier(s) of such
Inventory on account of the purchase(s) of such Inventory.
"PBGC" means the Pension Benefit Guaranty Corporation, or any
----
successor Governmental Authority.
"Pension Plan" means a pension plan (as defined in Section 3(2) of
------------
ERISA) subject to Title IV of ERISA (other than a Multiemployer Plan) which the
Company sponsors, maintains, or to which it makes, is making, or is obligated to
make contributions, or in the case of a multiple employer plan (as described in
Section 4064(a) of ERISA), has made contributions at any time during the
immediately preceding five (5) plan years.
"Perfection Certificate" has the meaning specified in Section 5.01(f).
----------------------
"Permitted Liens" has the meaning specified in Section 8.01.
---------------
"Person" means an individual, partnership, corporation, business
------
trust, joint stock company, trust, unincorporated association, joint venture or
Governmental Authority.
"Petroleum Inventory" means Inventory consisting of crude oil,
-------------------
petroleum, refined petroleum products, byproducts and intermediate feedstocks,
and other energy-related commodities, including, without limitation, blend
components commonly used in the petroleum industry to improve characteristics
of, or meet governmental or customer specifications for, petroleum or refined
petroleum products, all of which Inventory shall be valued at market.
30
<PAGE>
"Petroleum Product" means crude oil, petroleum, refined petroleum
-----------------
products, byproducts and intermediate feed stocks, and other energy-related
commodities, including, without limitation, blend components commonly used in
the petroleum industry to improve characteristics of, or meet governmental or
customer specifications for, petroleum or refined petroleum products.
"Pipeline Subsidiary" means Clark Port Arthur Pipeline Company, a
-------------------
Delaware corporation and a wholly-owned subsidiary of the Company.
"Plan" means an employee benefit plan (as defined in Section 3(3) of
----
ERISA), other than a multiemployer plan (as defined in Section 3(37) of ERISA),
which the Company sponsors or maintains or to which the Company makes, is
making, or is obligated to make contributions and includes any Pension Plan.
"Port Arthur Purchase Agreement" means that certain Asset Purchase
------------------------------
Agreement by and between Chevron U.S.A. Inc. and the Company dated as of August
16, 1994, as the same may at any time be amended, amended and restated,
supplemented or otherwise modified in accordance with the terms thereof and of
this Agreement and in effect.
"Port Arthur Refinery" means the land and improvements known as the
--------------------
Port Arthur Refinery, located in Port Arthur, Texas, together with the terminals
(including the Beaumont, Texas terminal, the Fannett, Texas terminal, the Lucas,
Texas terminal and the Port Arthur product station terminal), tanks, pipelines
and related facilities used or intended for use in connection therewith.
"Pricing Grid" means the pricing grid attached as Schedule 1.01(e) to
------------
this Agreement.
"Prime Rate" means, for any day, the higher of: (a) 0.50% per annum
----------
above the latest Federal Funds Rate; and (b) the rate of interest in effect for
such day as publicly announced from time to time by BT, as its "prime lending
rate." (The "prime lending rate" is a reference rate and does not necessarily
represent the lowest or best rate actually charged to any customer of BT and BT
may make loans at rates of interest at, above or below the "prime lending
rate").
Any change in the "prime lending rate" announced by BT shall take effect at
the opening of business on the day specified in the public announcement of such
change.
"Prime Rate Loan" means a Loan that bears interest based on the Prime
---------------
Rate.
31
<PAGE>
"Pro Rata Share" means, as to any Bank at any time, the percentage
--------------
equivalent (expressed as a decimal, rounded to the ninth decimal place) at such
time of such Bank's Commitment divided by the combined Commitments of all Banks.
"Qualifying Investments" means (i) readily marketable certificates of
----------------------
deposit issued by a Bank or any other bank organized under the laws of the
United States of America or any state thereof, if as of the date of purchase
thereof by the Company, such Bank or bank has a short term rating of not less
than P-1 by Moody's and A-1 by S&P and having a final maturity of not more than
360 days, (ii) commercial paper or finance company paper that is rated as of the
date of purchase thereof not less than P-1 by Moody's and A-1 by S&P and having
a final maturity of not more than 270 days, (iii) auction rate securities with
intermediate to perpetual maturities that are structured with short term holding
periods of 7-49 days and whose long-term rating as of the date of purchase
thereof is not less than A-1 by Moody's and A+ by S&P, (iv) direct obligations
of the United States of America having an average maturity of not more than one
year, (v) obligations of agencies of the United States of America including, but
not limited to, Federal Home Loan Bank, Federal National Mortgage Association,
Student Loan Marketing Association and Government National Mortgage Association
that are rated as of the date of purchase thereof not less than Aaa by Moody's
and AAA by S&P and having a final maturity of not more than 366 days, (vi)
repurchase and reverse repurchase agreements, in each case with durations of
less than 31 days that are fully secured by direct obligations of the United
States of America, (vii) a portfolio composed of any Qualifying Investments
described in (i) through (vi) above with a weighted average maturity of not more
than one year, provided that the only Qualifying Investments which may have a
longer maturity than described in the relevant sections (i) through (vi) are
those Qualifying Investments (iv) and (v), and (viii) money market mutual funds
set forth on Schedule 1.01(f) to this Agreement as it may be amended from time
to time at the request of the Company with the approval of the Administrative
Agent, provided that Qualifying Investments shall not include more than
$50,000,000 invested in any one such mutual fund.
"Reportable Event" means, any of the events set forth in Section
----------------
4043(b) of ERISA or the regulations thereunder, other than any such event for
which the 30-day notice requirement under ERISA has been waived in regulations
issued by the PBGC.
"Requirement of Law" means, as to any Person, any law (statutory or
------------------
common), treaty, rule or regulation or
32
<PAGE>
determination of an arbitrator or of a Governmental Authority, in each case
applicable to or binding upon the Person or any of its property or to which the
Person or any of its property is subject.
"Responsible Officer" means the chief executive officer, the
-------------------
president, any executive vice president, the treasurer, the controller or the
secretary of the Company, or any other officer having substantially the same
authority and responsibility designated by the Company; or, with respect to
financial statements, compliance with financial covenants, the Compliance
Certificate and the Borrowing Base Certificate, the chief executive officer, the
chief financial officer, the controller or the treasurer of the Company.
"Restricted Subsidiary" means a Subsidiary of the Company that is not
---------------------
an Unrestricted Subsidiary.
"Retail Account" means each deposit only account maintained at a
--------------
Retail Account Bank for the collection of amounts owed to the Company in respect
of its retail operations, the withdrawal of funds of which is limited to the
withdrawal by the Collection Bank pursuant to the direction of the Company and
otherwise in accordance with the Credit Agreement.
"Retail Account Bank" means each bank authorized by the Company to
-------------------
maintain a Retail Account.
"Sale-Leaseback Transaction" means any arrangement between the Company
--------------------------
or any of the Restricted Subsidiaries and any other Person providing for the
leasing by the Company or such Restricted Subsidiary of real or personal or
mixed property which has been or is to be sold or transferred by the Company or
such Restricted Subsidiary to such other Person.
"S&P" means Standard & Poor's Corporation and any successor thereto.
---
"SEC" means the Securities and Exchange Commission, or any
---
Governmental Authority succeeding to any of its principal functions.
"Security Agreement" means the Security Agreement executed by the
------------------
Company and Collateral Agent and the Administrative Agent, on behalf of the
Banks and the Bank Swap Parties, in substantially the form of Exhibit J-1.
-----------
"Senior Note Indentures" means, collectively, the 9-1/2% Note
----------------------
Indenture and the 10-1/2% Note Indenture.
33
<PAGE>
"Senior Notes" means, collectively, the 9-1/2% Notes and the 10-1/2%
------------
Notes.
"Settlement Date" has the meaning specified in Section 2.04(a).
---------------
"Significant Environmental Issue" means any event, situation or
-------------------------------
circumstance giving rise to any Environmental Claim, or requiring the incurrence
of remedial or capital expenditures, reasonably expected to equal or exceed,
$1,000,000 in relation to any retail gas station, $2,000,000 in relation to any
terminal (including related storage tanks and pipelines) other than a terminal
at a Facility or $7,500,000 in relation to any Facility (including any related
storage tanks and pipe lines).
"Solvent" means, as to any Person at any time, that (a) the fair value
-------
of the property of such Person is greater than the amount of such Person's
liabilities (including disputed, contingent and unliquidated liabilities) as
such value is established and liabilities evaluated for purposes of Section
101(31) of the Bankruptcy Code and, in the alternative, for purposes of the
applicable Uniform Fraudulent Transfer Act; (b) the present fair saleable value
of the property of such Person is not less than the amount that will be required
to pay the probable liability of such Person on its debts as they become
absolute and matured; (c) such Person is able to realize upon its property and
pay its debts and other liabilities (including disputed, contingent and
unliquidated liabilities) as they mature in the normal course of business; (d)
such Person does not intend to, and does not believe that it will, incur debts
or liabilities beyond such Person's ability to pay as such debts and liabilities
mature; and (e) such Person is not engaged in business or a transaction, and is
not about to engage in business or a transaction, for which such Person's
property would constitute unreasonably small capital.
"Standby L/C Risk Participation Fee Rate" means, with respect to each
---------------------------------------
day the fee rate per annum set forth on the Pricing Grid with respect to fees
accruing on Standby Letters of Credit.
"Standby Letter of Credit" means any Letter of Credit which is not a
------------------------
Commercial Letter of Credit.
"Subsidiary" of a Person means any corporation, association,
----------
partnership, joint venture or other business entity of which more than 50% of
the voting stock or other equity interests (in the case of Persons other than
corporations), is owned or controlled directly or indirectly
34
<PAGE>
by the Person, or one or more of the Subsidiaries of the Person, or a
combination thereof.
"Surety Instrument" means any letter of credit (including standby and
-----------------
commercial), banker's acceptance, bank guaranty, shipside bond, surety bond or
similar instrument.
"Swap Contracts" means any swap agreement (as such term is defined in
--------------
Section 101 of the Bankruptcy Code) and any other agreement or arrangement
(including forwards and futures) designed to provide protection against
fluctuations in interest or currency exchange rates or commodity prices.
"Tangible Net Worth" of any Person means, as of any date of
------------------
determination, the Net Worth of such Person, as of such date of determination,
excluding however, from the determination of the Total Assets of such Person, as
of such date of determination (i) all goodwill, organizational expenses,
research and development expenses, trademarks, trade names, copyrights, patents,
patent applications, licenses and rights in any thereof, and other similar
intangibles, (ii) securities which are not readily marketable, and (iii) any
items not included in clauses (i) and (ii) above which are treated as
intangibles in conformity with GAAP, all of the foregoing as determined for any
such date of determination as of the end of the immediately preceding fiscal
quarter in accordance with GAAP.
"Taxes" means any federal, state, local or foreign income, gross
-----
receipts, license, payroll, employment, excise, severance, stamp, occupation,
premium, windfall profits, environmental (including tax under Internal Revenue
Code Section 59A), customs duties, capital stock, franchise, profits,
withholding, social security (or similar), unemployment, disability, real
property, personal property, sales, use, transfer registration, value added,
alternative or add-on minimum, estimated, or other tax of any kind whatsoever,
including any interest, penalty, or addition thereto, whether disputed or not,
excluding in the case of each Bank, each Issuing Bank, the Collateral Agent and
- ---------
the Administrative Agent, such taxes (including income taxes or franchise taxes)
as are imposed on or measured by each Bank's, each Issuing Bank's, the
Collateral Agent's or the Administrative Agent's net income by the jurisdiction
(or any political subdivision thereof) under the laws of which such Bank, the
Issuing Bank, the Collateral Agent or the Administrative Agent, as the case may
be, is organized, maintains the lending office through which it has entered into
this agreement or its principal office.
35
<PAGE>
"Tax Sharing Agreement" means the Tax Sharing Agreement effective as
---------------------
of October 31, 1989 among Holdings and the signatories listed on the signature
pages thereto, in the form attached to this Agreement as Exhibit O, as the same
---------
may at any time be amended, amended and restated, supplemented or otherwise
modified in accordance with the terms thereof and of this Agreement and in
effect.
"10-1/2% Note Indenture" means that certain Indenture dated as of
----------------------
December 1, 1991 between the Company and Bank of New York, NA, as trustee,
relating to the 10-1/2% Notes, as the same may hereafter be amended, amended and
restated, supplemented or otherwise modified in accordance with the terms
thereof and of this Agreement and in effect.
"10-1/2% Notes" means the 10-1/2% Senior Notes due December 1, 2001 of
-------------
the Company issued under the 10-1/2% Note Indenture.
"Termination Agreements" means collectively, (i) the Loan Documents
----------------------
Termination Agreement by and among the parties to the Existing Credit Agreement,
(ii) the Wholesale Collection Account Termination Agreement by and among the
Company, Bank of America National Trust and Savings Association as
administrative agent and secured party thereunder and NationsBank, N.A., (iii)
the Collateral Documents Termination Agreement by and between Bank of America
National Trust and Savings Assocation, as administrative agent and secured party
thereunder and the Company and (iv) each of the notice of termination letters to
certain commodities brokers, each dated as of the date hereof.
"Tiger" means Tiger Management Corporation, a Delaware corporation.
-----
"TD" has the meaning specified in the introductory clause to this
--
Agreement.
"Total Assets" of any Person means, as of any date of determination,
------------
the total consolidated assets of such Person, determined in accordance with
GAAP.
"Total Liabilities" of any Person means, as of any date of
-----------------
determination, the total consolidated liabilities of such Person, determined in
accordance with GAAP.
"Trademark Security Agreement" means the Trademark Security Agreement
----------------------------
executed by the Company and the Collateral Agent and the Administrative Agent,
on behalf of the Banks and the Bank Swap Parties, in substantially the form of
Exhibit J-2.
- -----------
36
<PAGE>
"TrizecHahn" means TrizecHahn Corporation, an Ontario corporation.
----------
"Type" means either a Eurodollar Rate Loan or a Prime Rate Loan.
----
"UCC" means the Uniform Commercial Code as in effect in the State of
---
New York.
"Unfunded Pension Liability" means the excess of a Plan's benefit
--------------------------
liabilities under Section 4001(a)(16) of ERISA, over the current value of that
Plan's assets, determined in accordance with the assumptions used for funding
the Pension Plan pursuant to Section 412 of the Code for the applicable plan
year.
"United States" and "U.S." each means the United States of America.
------------- ----
"Unrestricted Subsidiary" means a Subsidiary of the Company designated
-----------------------
by the Company as an Unrestricted Subsidiary, but only if and for so long as
such Subsidiary: (i) has no Indebtedness as to which the Company or any of its
Restricted Subsidiaries (a) provides credit support of any kind other than a
non-recourse pledge of stock of an Unrestricted Subsidiary, (b) is directly or
indirectly liable (as a guarantor or otherwise), or (c) constitutes the lender,
(ii) has no Indebtedness with respect to which a default thereunder would permit
any holder of such Indebtedness or of any other Indebtedness of the Company or
any of its Subsidiaries to declare a default on any Indebtedness of the Company
or any of its Restricted Subsidiaries, or cause the payment of any Indebtedness
of the Company or any of its Restricted Subsidiaries to be accelerated or
payable prior to its stated maturity, (iii) has no Indebtedness as to which the
lenders have not been notified in writing that such lenders will not have any
recourse to the stock or assets of the Company or its Restricted Subsidiaries
other than a non-recourse pledge of stock of an Unrestricted Subsidiary, (iv) is
a Person with respect to which neither the Company nor any of its Restricted
Subsidiaries has any direct or indirect obligation to subscribe for additional
equity interest or to maintain or preserve such Subsidiary's financial condition
or to cause such Subsidiary to achieve any specified levels of operating results
and (v) has no Guaranteed Obligations with respect to the Indebtedness of the
Company or any of its Restricted Subsidiaries.
"Voting Shares" means Capital Stock of any class or classes of a
-------------
corporation the holders of which are ordinarily, in the absence of
contingencies, entitled to vote for the election of corporate directors.
37
<PAGE>
"Working Capital" means, as of any date of determination, the amount
---------------
by which Current Assets (determined on a FIFO basis) exceeds Current
Liabilities, in each case determined with respect to the Company and the
Restricted Subsidiaries on a consolidated basis among them in accordance with
GAAP.
1.02. Accounting Principles.
---------------------
Unless otherwise defined or specified herein, all accounting terms
used in this Credit Agreement shall be construed in accordance with GAAP,
applied on a basis consistent in all material respects with the audited
Financial Statements delivered to the Agent. All accounting calculations under
Sections 8.16 and 8.17 shall be made in accordance with GAAP as in effect on the
Effective Date and applied on a basis consistent in all material respects with
such audited Financial Statements. The Financial Statements required to be
delivered hereunder from and after the Effective Date, and all financial
records, shall be prepared and maintained in accordance with GAAP. If GAAP
shall change from the basis used in preparing the audited Financial Statements
referred to in Section 6.11(a) the certificates required to be delivered
pursuant to Section 7.01 demonstrating compliance with the covenants contained
herein shall, at the election of the Company or upon the request of the Majority
Banks, include calculations setting forth the adjustments necessary to
demonstrate how the Company is in compliance with the financial covenants based
upon GAAP as in effect on the Effective Date.
ARTICLE II.
LOANS
-----
2.01. Commitments.
-----------
On the terms and subject to the conditions set forth in this
Agreement, on and after the Effective Date and to and excluding the Facility
Expiry Date, each Bank severally agrees to make loans and advances to the
Company ("Loans") in an amount equal to such Bank's Pro Rata Share of the Loans
-----
requested or deemed requested by the Company. Notwithstanding the foregoing,
(a) the Effective Amount of all outstanding Loans plus the Effective Amount of
----
all L/C Obligations plus the Effective Amount of all Outstanding Eligible LOIs,
----
shall not at any time exceed the lesser of (i) the combined Commitments then in
effect and (ii) the Borrowing Base then applicable and (b) the Effective Amount
of all outstanding Loans shall not at any time exceed $50,000,000.
38
<PAGE>
The Administrative Agent may, but shall not be required to, rely on
Borrowing Base Certificates and any other schedules or reports delivered to the
Administrative Agent in connection herewith, in determining eligibility.
2.02. Borrowing of Loans. It is contemplated that Loans will be made
------------------
available to the Company directly by the Banks ("Bank Advances") and, in the
-------------
circumstances described in Section 2.02(b), from the Administrative Agent acting
---------------
on behalf of the Banks ("Agent Advances"). The Company hereby agrees to execute
--------------
and deliver to each Bank a Note in the form of Exhibit I to evidence the Loans
---------
to the Company by such Bank.
(a) Bank Advances of Loans. Subject to the determination by the
----------------------
Administrative Agent and the Banks that the conditions to Borrowing contained in
Article 5 are satisfied, upon receipt from the Company of a Notice of Borrowing,
- ---------
Bank Advances of Loans shall be made to the extent of each Bank's Pro Rata Share
of the requested Borrowing. The Notice of Borrowing shall specify whether the
requested Borrowing is of Prime Rate Loans or Eurodollar Rate Loans.
(b) Agent Advances of Loans. The Administrative Agent is authorized
-----------------------
by the Banks, but is not obligated, to make Agent Advances consisting only of
Prime Rate Loans upon a Notice of Borrowing received by the Administrative
Agent. Agent Advances shall be subject to periodic settlement with the Banks
under Section 2.04. Any Agent Advance so made by the Administrative Agent shall
constitute part of the Obligations secured by the Collateral and shall be repaid
by the Company no later than the fifteenth (15th) day after the earliest date on
which any condition precedent to the making of a Loan set forth in Section 5.02
shall fail to be satisfied. Agent Advances may be made only in the following
circumstances:
(i) For administrative convenience, the Administrative Agent
may, but is not obligated to, make Agent Advances in reliance upon the
Company's actual or deemed representations under Section 5.02 that the
conditions for borrowing are satisfied;
(ii) If the conditions for borrowing under Section 5.02 cannot
be fulfilled, the Company shall in its Notice of Borrowing or otherwise
give immediate notice thereof to the Administrative Agent, and the
Administrative Agent may, but is not obligated to, continue to make Agent
Advances for twenty (20) Business Days from the date the Administrative
Agent first receives such notice, if the Company shall at such time be in
compliance with the limitations set
39
<PAGE>
forth in Section 2.01; provided however, that the Majority Banks may sooner
-------- -------
instruct the Administrative Agent to cease making such Agent Advances at
any time.
The Administrative Agent may apply any payments or other amounts which it
receives to the repayment of the outstanding Agent Advances (beginning with the
oldest Agent Advance), prior to repayment of any other Loans, notwithstanding
any provision contained in any Loan Document or any direction of the Company or
any other Person to the contrary.
(c) Disbursement of Loans. Loans, whether made as Bank Advances or
---------------------
Agent Advances, subject to the terms and conditions of this Credit Agreement,
will be made as follows:
(i) It is contemplated that Loans be made available to
reimburse an Issuing Bank for a drawing under a Letter of Credit, as
described in Section 3.05, and such Loans may be made available by the
Administrative Agent directly to an Issuing Bank upon notice from such
Issuing Bank of such drawing.
(ii) The Administrative Agent will make requested Loans
available as instructed in a Notice of Borrowing.
(d) Notices of Borrowing; Minimum Amounts. A Notice of Borrowing
-------------------------------------
for (i) Bank Advances of Prime Rate Loans shall be given not later than 1:00
P.M., New York City time, on the same Business Day of the proposed Borrowing and
(ii) Agent Advances of Prime Rate Loans shall be given not later than 3:00 P.M.,
New York City time, on the same Business Day of the proposed Borrowing. A Notice
of Borrowing for Eurodollar Rate Loans shall be given not later than 5:00 P.M.,
New York City time, on the third Business Day prior to the proposed Borrowing.
(A) Notices of Borrowing may be given under this Section by
telephone or facsimile transmission, and, if by telephone, promptly
confirmed in writing. Once given, a Notice of Borrowing is irrevocable by
and binding on the Company.
(B) The Company shall specify in each Notice of Borrowing
whether the conditions for the requested Borrowing are satisfied and
whether the requested Borrowing is of Prime Rate Loans or Eurodollar Rate
Loans. The Company may request one or more Borrowings on the same Business
Day. Each such Borrowing shall, unless otherwise specifically provided
herein, consist entirely of Loans of the same Type and, if such
40
<PAGE>
Borrowing is to consist of Eurodollar Rate Loans, shall be in an aggregate
amount for all Banks of not less than $5,000,000 or in an integral multiple
of $1,000,000 in excess thereof. The right of the Company to choose
Eurodollar Rate Loans is subject to the provisions of Section 4.07.
(C) On or prior to the Effective Date, the Company shall have
provided to the Administrative Agent a list, with specimen signatures, of
officers authorized to request Loans, substantially in the form attached to
this Agreement as Exhibit A-1. The Administrative Agent is entitled to rely
-----------
upon such list until it is replaced by the Company. The Administrative
Agent shall have no duty to verify the authenticity of the signature
appearing on any Notice of Borrowing or other writing delivered hereunder
and, with respect to an oral request for Loans, the Administrative Agent
shall have no duty to verify the identity of any individual representing
himself as one of the officers authorized to make such request on behalf of
the Company. Neither the Administrative Agent nor any of the Banks shall
incur any liability to the Company as a result of acting upon any
telephonic notice the Administrative Agent believes in good faith to have
been given by a duly authorized officer or other individual authorized to
request Loans on behalf of the Company or for otherwise acting in good
faith with respect to any such request for Loans.
2.03. Settlement of Bank Advances and Repayments. The Administrative
------------------------------------------
Agent shall give each Bank prompt notice by telephone or facsimile transmission
of a Notice of Borrowing that requests Bank Advances of Loans and in any event
shall use its best efforts to notify each Bank on the same Business Day as
receipt of such Notice of Borrowing. No later than 2:00 P.M., New York City
time, on the date designated for the Borrowing, each Bank, for the account of
its applicable Lending Office, shall make available to the Administrative Agent
at the Administrative Agent's Payment Office its Pro Rata Share of such
Borrowing in immediately available funds. Unless the Administrative Agent
receives contrary written notice prior to the date of any such Borrowing of
Loans, it is entitled to assume that each Bank will make available its Pro Rata
Share of the Borrowing and in reliance upon that assumption, but without any
obligation to do so, may advance such Pro Rata Share on behalf of such Bank.
41
<PAGE>
2.04. Periodic Settlement of Agent and Bank Advances and Repayments.
-------------------------------------------------------------
(a) The Settlement Date. The amount of each Bank's Pro Rata Share of
-------------------
Loans shall be computed weekly (or more frequently in the Administrative Agent's
discretion) and shall be adjusted upward or downward based on all Loans
(including Agent Advances) and repayments of Loans received by the Agent as of
5:00 P.M., New York City time, on the last Business Day of the period specified
by the Administrative Agent (such date being referred to as the "Settlement
----------
Date").
(b) Summary Statements; Settlements.
-------------------------------
(i) The Administrative Agent shall deliver to each of the Banks
promptly after the Settlement Date a summary statement of the amount of
outstanding Loans (including Agent Advances) for the period and the amount
of repayments received for the period. As reflected on the summary
statement: (i) the Administrative Agent shall transfer to each Bank its
allocated share of interest, Commitment Fees, Standby L/C Risk
Participation Fees and Commercial L/C Risk Participation Fees, and its Pro
Rata Share of repayments; and (ii) each Bank shall transfer to the
Administrative Agent (as provided below), or the Administrative Agent shall
promptly transfer to each Bank, such amounts as are necessary to insure
that, after giving effect to all such transfers, the amount of Loans made
by each Bank shall be equal to such Bank's Pro Rata Share of the aggregate
amount of Loans outstanding as of such Settlement Date. If the summary
statement requires transfers to be made to the Administrative Agent by the
Banks and is received prior to 12:00 Noon, New York City time, on a
Business Day, such transfers shall be made in immediately available funds
no later than 3:00 P.M., New York City time, that day; and, if received
after 12:00 Noon, New York City time, then no later than 3:00 P.M., New
York City time on the next Business Day. The obligation of each Bank to
transfer such funds is irrevocable, unconditional and without recourse to
or warranty by the Administrative Agent. Each of the Administrative Agent
and the Banks agree to mark their respective books and records on each
Settlement Date to show at all times the Dollar amount of their respective
Pro Rata Shares of the outstanding Loans.
(ii) To the extent that the Administrative Agent has made any
such amounts available and the settlement described above shall not yet
have occurred, upon repayment of Loans by the Company, the
42
<PAGE>
Administrative Agent may apply such amounts repaid directly to the amounts
made available by the Administrative Agent pursuant to this Section
2.04(b).
(c) Distribution of Interest, Commitment Fees, Standby L/C Risk
-----------------------------------------------------------
Participation Fees and Commercial L/C Risk Participation Fees. Interest on the
- -------------------------------------------------------------
Loans (including Agent Advances) together with the amount of the Commitment
Fees, Standby L/C Risk Participation Fees and Commercial L/C Risk Participation
Fees, shall be allocated by the Agent to each Bank in accordance with the Pro
Rata Share of Loans actually funded by and repaid to each Bank or such Bank's
Pro Rata Share of Letters of Credit outstanding, as applicable, and shall accrue
from and including the date such Loans are so advanced or such Letters of Credit
are issued and to but excluding the date such Loans are either repaid by the
Company or actually settled under this Section or such Letters of Credit are
drawn upon or expire or are cancelled (undrawn). Promptly after the end of each
month (or, with respect to interest on Eurodollar Rate Loans, promptly after
such interest is received by the Agent), the Agent shall distribute to each Bank
its Pro Rata Share of the interest, Commitment Fees, Standby L/C Risk
Participation Fees and Commercial L/C Risk Participation Fees accrued during
that month.
2.05. Defaulting Banks.
----------------
(a) Bank who fails to pay the Administrative Agent its Pro Rata
Share of any Loans (including Agent Advances) made available by the
Administrative Agent on such Bank's behalf, or who fails to pay any other amount
owing by it to the Administrative Agent or any Issuing Bank (including, without
limitation, under Section 3.06), is a "Defaulting Bank." The Administrative
Agent may recover all such amounts owing by a Defaulting Bank on demand. If the
Defaulting Bank does not pay such amounts on the Administrative Agent's demand,
the Administrative Agent shall promptly notify the Company and the Company shall
pay such amounts within five Business Days. In addition, the Defaulting Bank or
the Company, as the case may be in accordance with the two immediately preceding
sentences, shall pay the Administrative Agent interest on such amount for each
day from the date it was made available by the Administrative Agent to the
Company to the date it is recovered by the Administrative Agent at a rate per
annum equal to (x) the overnight Federal Funds Rate, if paid by the Defaulting
Bank, or (y) the then applicable rate of interest calculated under Section 4.01,
if paid by the Company. Nothing herein shall be deemed to relieve any Bank from
its obligation to fulfill its commitments hereunder or to prejudice any rights
which the Company may have against any Bank as a result of any default by such
Bank hereunder,
43
<PAGE>
including, without limitation, the right of the Company to seek reimbursement
from any Defaulting Bank for any amounts paid by the Company under clause (y)
above on account of such Defaulting Bank's default.
(b) The failure of any Bank to fund its Pro Rata Share of any Loan
(including Agent Advances) shall not relieve any other Bank of its obligation to
fund its Pro Rata Share of such Loan. Conversely, no Bank shall be responsible
for the failure of another Bank to fund its Pro Rata Share of a Loan.
(c) Notwithstanding anything contained herein to the contrary, so
long as any Bank shall be in default in its obligation to fund its Pro Rata
Share of any Loan or shall have rejected its Commitment, then such Bank shall
not be entitled to receive any payments of principal of or interest on the Loans
or its share of any Commitment or other fees payable hereunder, and for purposes
of voting or consenting to matters with respect to the Loan Documents, such Bank
shall be deemed not to be a "Bank" hereunder, the combined Commitments then in
effect shall be reduced by an amount equal to such Bank's Commitment and such
Bank's Commitment shall be deemed to be zero (0), unless and until (x) (i) the
Loans and all interest thereon and all fees and other amounts owing under the
Loan Documents (other than amounts owing to such Bank) have been paid in full in
cash and (ii) the L/C Obligations shall have been repaid in full in cash and/or
collateralized in full in cash in such manner and order as shall be determined
by the Administrative Agent, (y) such failure to fulfill its obligation to fund
is cured and such Bank shall have paid, as and to the extent provided in this
Section 2.05, to the applicable party, if any, interest on the amount of funds
that such Bank failed to timely fund or (z) in respect of receiving payments but
not in respect of voting or consenting, the Obligations under this Agreement
shall have been declared or shall have become immediately due and payable. No
Commitment of any Bank shall be increased or otherwise affected by any such
failure or rejection by any other Bank. Any payments of principal or interest
which would, but for this paragraph, be paid to any Bank, and which shall have
been reimbursed by the Company to the Administrative Agent pursuant to Section
2.05(a), shall be paid to the Banks who shall not be in default under their
respective Commitments and who shall not have rejected any Commitment, for
application to the Loans or to provide cash collateral in such manner and order
as shall be determined by the Administrative Agent.
2.06. Mandatory Payment; Reduction of Commitments.
-------------------------------------------
44
<PAGE>
(a) In the event that (i) the Effective Amount of all Loans then
outstanding exceeds the lesser of (x) $50,000,000 and (y) the combined
Commitments then in effect or (ii) the Effective Amount of all Loans then
outstanding plus the Effective Amount of all L/C Obligations plus the Effective
---- ----
Amount of all Outstanding Eligible LOIs exceeds the lesser of (x) the combined
-------------
Commitments then in effect and (y) the Borrowing Base, then the Loans (subject
to the third sentence of Section 2.06(b)) shall be immediately due and payable
in the amount of such excess without the necessity of any demand, provided that
if there shall be no Loans then outstanding, the Company shall Cash
Collateralize outstanding Letters of Credit and Outstanding Eligible LOIs as
provided in Section 2.06(c) in an amount equal to such excess.
(b) On the Facility Expiry Date, the Commitment of each Bank shall
automatically reduce to zero and may not be reinstated. The Company may reduce
or terminate the Commitments at any time and from time to time in whole or in
part (a "Voluntary Reduction"). Each such Voluntary Reduction must be in an
-------------------
amount not less than $5,000,000 (and in increments of $1,000,000 in excess
thereof). If the Company seeks to implement a Voluntary Reduction of the
combined Commitments to an amount less than $25,000,000, then the combined
Commitments shall be deemed reduced to zero and, at the option of the
Administrative Agent, all amounts hereunder shall be immediately due and
payable, provided, that the amount of each such Voluntary Reduction may not
--------
reduce the combined Commitments to an amount equal to less than the sum of (i)
the Effective Amount of the Loans plus (ii) the Effective Amount of all L/C
----
Obligations plus (iii) the Effective Amount of all Outstanding Eligible LOIs
----
less, in the case of a Voluntary Reduction of the combined Commitments to zero,
- ----
the amount of Letters of Credit and Outstanding Eligible LOIs which are Cash
Collateralized in accordance with Section 2.06(c). Once reduced, no portion of
the Commitments may be reinstated.
(c) If any Letter of Credit is outstanding or there exists any
Outstanding Eligible LOIs upon the termination of the combined Commitments, or
if at any time there shall be no Loans, interest thereon or Commitment Fees,
Standby Letter of Credit fees, or Commercial Letter of Credit fees outstanding
and unpaid and the L/C Obligations shall be greater than the lesser of (i) the
Borrowing Base and (ii) the combined Commitments, the Company shall deposit with
the Administrative Agent, for the ratable benefit of the Banks, Cash in the
amount of all such Letters of Credit outstanding and Outstanding Eligible LOIs
upon such termination or the amount of such excess L/C Obligations and
Outstanding Eligible LOIs, as the case may be, which Cash
45
<PAGE>
shall be held as collateral in an interest bearing account on terms satisfactory
to the Administrative Agent.
2.07. Maintenance of Loan Account; Statements of Account. The
--------------------------------------------------
Administrative Agent shall maintain an account on its books in the name of the
Company (the "Loan Account") in which the Company will be charged with all loans
------------
and advances made by the Banks to the Company or for the Company's account,
including the Loans and all L/C Obligations, the Fees, the Expenses and any
other Obligations. The Loan Account will be credited with all amounts received
by the Administrative Agent from the Company or from others for the Company's
account, on the date received provided such amounts are received by no later
than 3:00 P.M., New York City time, and on the next Business Day if received
after such time. In no event shall prior recourse to any Collateral be a
prerequisite to the Administrative Agent's right to demand payment of any
Obligation upon its maturity. After the end of each month, the Administrative
Agent shall send the Company a statement accounting for the charges, loans,
advances and other transactions occurring among and between the Administrative
Agent, the Banks and the Company during that month. The monthly statements
shall, absent manifest error, be an account stated, which is final, conclusive
and binding on the Company; provided, however, that in respect of Expenses that
are, by the express terms of this Agreement required to be reasonable, the
Company reserves the right to assert that unreasonable Expenses should not be so
reimbursed.
2.08. Payment Procedures. Payments of interest, Fees and Expenses
------------------
shall be made not later than 2:00 P.M., New York City time, on the day when due,
in immediately available Dollars, to the Administrative Agent at its address
provided pursuant to Section 11.02 of this Agreement. The Company hereby
authorizes the Administrative Agent to charge the Loan Account or any other
deposit account of the Company with the Administrative Agent with the amount of
all payments to be made hereunder and under the other Loan Documents, including
all Fees and Expenses, as and when such payments become due. The Company's
obligations to the Banks with respect to such payments shall be discharged by
making such payments to the Administrative Agent pursuant to this Section or by
charging the Loan Account or such other deposit account.
2.09. Cash Management System.
----------------------
The Company shall during the term of this Agreement maintain the
existing cash management system including its network of Retail Accounts,
Lockbox, Collection Deposit Account and Concentration Account
46
<PAGE>
pursuant to the Collection Bank Agreement and the Concentration Bank Agreement.
2.10. Application of Payments. All amounts received shall be credited
-----------------------
to the Loan Account for application to the Obligations in the following order:
first, to the payment of any Fees, Expenses or other Obligations due and payable
- -----
to the Collateral Agent and the Administrative Agent under any of the Loan
Documents, excluding Agent Advances; second, to the payment of interest due on
------
any Agent Advances and other amounts which have not been reimbursed to the
Administrative Agent by the Banks; third, to the payment of principal of Agent
-----
Advances; fourth, to the payment of any Fees, expenses or other Obligations due
------
and payable to the Issuing Banks under any of the Loan Documents; fifth, to the
-----
ratable payment of any Fees, expenses or other Obligations due and payable to
the Banks under any of the Loan Documents other than those Obligations
specifically referred to in this Section 2.10; sixth, to the ratable payment of
-----
interest due on the Loans; seventh, to the ratable payment of principal due on
-------
the Loans; and eighth, to the Cash Collateralization of outstanding Letters of
------
Credit and Outstanding Eligible LOIs in such manner and order as shall be
determined by the Administrative Agent. Any payment received hereunder as a
distribution in any proceeding referred to in Section 9.01(g) shall, unless paid
with respect to amounts specifically owing to the Administrative Agent or any
Issuing Bank, be distributed and applied to the payment of the amounts due
hereunder and under the Notes ratably in accordance with such amounts (or, if a
court of competent jurisdiction shall otherwise specify, as specified by such
court).
2.11. Extension of Facility Expiry Date. At the request of the
---------------------------------
Company (which request shall be made not earlier than eighteen months after the
Effective Date and not later than twenty-four months after the Effective Date)
and upon the written consent (in their sole discretion) within thirty days of
receipt by the Administrative Agent of such request of the Administrative Agent,
the Collateral Agent, each Issuing Bank and each of the Banks, the Facility
Expiry Date shall be extended to December 31, 2000; provided that, if the
--------
Administrative Agent, the Collateral Agent, each Issuing Bank and the Majority
Banks (but not all the Banks) shall consent to such extension of the Facility
Expiry Date, then each Bank not consenting to such extension agrees that it will
promptly enter into an Assignment and Assumption Agreement with an assignee
identified by the Company and acceptable to the Administrative Agent, the
Collateral Agent, the Issuing Banks and each Lead Bank, pursuant to which
Assignment and Assumption Agreement such Bank shall assign all of such Bank's
Loans, Commitments, L/C
47
<PAGE>
Obligations and other rights and obligations under the Loan Documents.
ARTICLE III.
LETTERS OF CREDIT
-----------------
3.01. Issuance of Letters of Credit. Subject to the terms and
-----------------------------
conditions of this Agreement and in reliance upon the representations and
warranties of the Company set forth herein, each Issuing Bank shall issue
Letters of Credit hereunder at the request of the Company and for its account,
as more specifically described below. No Issuing Bank shall be obligated to
issue any Letter of Credit for the account of the Company if at the time of such
requested Issuance:
(a) the Effective Amount of all L/C Obligations plus the Effective
----
Amount of all Outstanding Eligible LOIs plus the Effective Amount of all Loans
----
exceeds the lesser of the combined Commitments then in effect and the Borrowing
Base then in effect, or the participation of any Bank in the Effective Amount of
all L/C Obligations plus the Effective Amount of the Loans of such Bank exceeds
such Bank's Commitment;
(b) the aggregate face amount of all Standby Letters of Credit for
the purpose of securing bonding and operating requirements is in excess of
$50,000,000;
(c) Any order, judgment or decree of any Governmental Authority or
arbitrator shall purport by its terms to enjoin or restrain such Issuing Bank
from issuing such Letter of Credit or any Requirements of Law applicable to such
Issuing Bank or any request or directive (whether or not having the force of
law) from any Governmental Authority with jurisdiction over such Issuing Bank
shall prohibit, or request that the Issuing Bank refrain from, the issuance of
letters of credit generally or such Letter of Credit in particular or shall
impose upon such Issuing Bank with respect to such Letter of Credit any
restriction or reserve or capital requirement (for which such Issuing Bank is
not otherwise compensated) not in effect as of the Effective Date, or any
unreimbursed loss, cost or expense which was not applicable, in effect or known
to such Issuing Bank as of the Effective Date and which such Issuing Bank deems
in good faith to be material to it; or
(d) A default of any Bank's obligations to fund under Section 3.05
exists, or such Bank is a Defaulting Bank under Section 2.05, unless such
Issuing Bank has entered into satisfactory arrangements with the Company to
eliminate
48
<PAGE>
such Issuing Bank's risk with respect to such Bank, including Cash
Collateralization of such Bank's Pro Rata Share of the L/C Obligations in such
manner and order as the Administrative Agent shall determine.
3.02. Terms of Letters of Credit; Existing Letters of Credit. (a)
------------------------------------------------------
The Letters of Credit shall be in a form customarily Issued by the Issuing Bank
or in such other form as has been approved by such Issuing Bank. At the time of
Issuance the terms and conditions of each Letter of Credit, and of any drafts or
acceptances thereunder, shall be subject to approval by the Administrative Agent
and the Company. In no event may the term of (i) any Standby Letter of Credit
(other than those referred to in (ii) below) issued hereunder exceed 120 days
(except that such Letters of Credit may provide for automatic renewal), (ii) any
Standby Letter of Credit securing bonding and other operating requirements
exceed 365 days or (iii) the term of any Commercial Letter of Credit exceed 90
days, and all Letters of Credit issued hereunder shall expire no later than the
date that is three (3) days prior to the Facility Expiry Date. Any Letter of
Credit containing an automatic renewal provision shall also contain a provision
pursuant to which, notwithstanding any other provisions thereof, it shall expire
no later than the date that is three (3) days prior to the Facility Expiry Date
and a provision pursuant to which the Issuing Bank may, by notice to the
beneficiary of such Letter of Credit at least sixty days (60) prior to the
expiration of its term, elect not to renew such Letter of Credit for an
additional term.
(b) All outstanding letters of credit issued under the Existing
Credit Agreement and set forth on Schedule 3.02 shall be deemed issued hereunder
and shall be, for all purposes, Letters of Credit hereunder.
3.03. Banks' Participation. Immediately upon Issuance or amendment by
--------------------
the Issuing Bank of any Letter of Credit in accordance with the procedures set
forth in Section 3.01, each Bank shall be deemed to have irrevocably and
unconditionally purchased and received from the Issuing Bank, without recourse
or warranty, an undivided interest and participation to the extent of such
Bank's Pro Rata Share (based upon its Commitment) in the liability with respect
to such Letter of Credit (including, without limitation, all obligations of the
Company with respect thereto, other than amounts owing to the Issuing Bank
consisting of Issuing Bank Fees) and any security therefor or guaranty
pertaining thereto.
3.04. Notice of Issuance. (a) Whenever the Company desires the
------------------
Issuance of a Letter of Credit, the
49
<PAGE>
Company shall deliver to Administrative Agent and to the applicable Issuing
Bank, a L/C Request no later than 2:00 P.M., New York City time, at least one
(1) Business Day (or such shorter period as may be agreed to by the Issuing
Bank) in advance of the proposed date of Issuance. The transmittal by the
Company of each L/C Request shall be deemed to be a representation and warranty
by the Company that the Letter of Credit may be Issued in accordance with and
will not violate any of the requirements of Section 3.01. Prior to the date of
Issuance of each Letter of Credit, the Company shall provide to the applicable
Issuing Bank (with a copy to the Administrative Agent) a precise description of
the documents and the text of any certificate to be presented by the beneficiary
of such Letter of Credit which, if presented by such beneficiary on or prior to
the expiration date of the Letter of Credit, would require such Issuing Bank to
make payment under the Letter of Credit. The Issuing Bank, in its reasonable
judgment, may require changes in any such documents and certificates. No
Commercial Letter of Credit shall require payment against a conforming document
to be made thereunder prior to the second Business Day (under the laws of the
jurisdiction of the Issuing Bank) after the date on which such document is
presented, together with all documents and/or certificates required to be
presented in connection therewith under the terms of the applicable Letter of
Credit. A L/C Request may be given in writing or electronically and, if
requested by the Administrative Agent or the applicable Issuing Bank, with
prompt confirmation in writing. Any electronic L/C Request shall be deemed to
have been prepared by, or under the supervision of a Responsible Officer of the
Company.
(b) When the Administrative Agent is not the Issuing Bank for all
Letters of Credit, then the other Issuing Banks are to send to the
Administrative Agent promptly on the first business day of each week, by
facsimile transmission, their daily aggregate stated amount of Standby and
Commercial Letters of Credit balances for the previous week. The Agent shall
deliver to each Bank upon each calendar month end and concurrently with each
Letter of Credit fee payment a report setting forth for such period the daily
aggregate stated amount available to be drawn under Standby and Commercial
Letters of Credit issued by all Issuing Banks during such period.
3.05. Payment of Amounts Drawn Under Letters of Credit. In the event
------------------------------------------------
of any drawing under any Letter of Credit by the beneficiary thereof, the
applicable Issuing Bank shall notify the Administrative Agent, which shall
notify the Company of such draw, not later than 11:00 A.M., New York City time,
on the day on which the Issuing Bank intends to honor such drawing. Unless the
Company shall, at the time of such drawing, have posted funds with such
50
<PAGE>
Issuing Bank sufficient to reimburse such drawing in full in Cash, the Company
will be deemed to have concurrently given a Notice of Borrowing to the
Administrative Agent for Prime Rate Loans in the amount of and at the time of
such drawing. Subject to satisfaction or waiver of the conditions specified in
Article 5 and the other terms of and conditions to Borrowing contained herein,
the Banks shall be obligated, on the date of such drawing, to make Loans in the
amount of such drawing, the proceeds of which shall be applied directly by the
Agent to reimburse the applicable Issuing Bank for the amount of such drawing or
payment. If for any reason, proceeds of such Loans are not received by such
Issuing Bank on such date in an amount equal to the amount of such drawing, the
Company shall be obligated to and shall reimburse such Issuing Bank, on the
Business Day (under the laws of the jurisdiction of the Issuing Bank)
immediately following the date of such drawing, in an amount in immediately
available funds equal to the excess of the amount of such drawing over the
amount of such Loans, if any, which are so received, plus accrued interest on
such amount at the rate set forth in Section 4.01 of this Agreement.
3.06. Payment by Banks. If Loans are not made in an amount sufficient
----------------
to reimburse the applicable Issuing Bank in full for the amount of any draw, the
Administrative Agent shall promptly notify each Bank of the unreimbursed amount
of such drawing and of such Bank's respective participation therein. Each Bank
shall make available to the Administrative Agent for the benefit of the
applicable Issuing Bank an amount equal to such Bank's respective participation
in immediately available funds, not later than 1:00 P.M., New York City time, on
the Business Day (under the laws of the jurisdiction of the Issuing Bank) after
the date notified by the Administrative Agent. In addition, in the event that
any Bank fails to make available to the Administrative Agent the amount of any
such Bank's participation in such L/C Obligation as provided in this Section
3.06, the Administrative Agent may, but shall not be obligated to, fund the
amount of such Defaulting Bank's participation in such Letter of Credit and
recover such amount on demand from such Defaulting Bank in accordance with
Section 2.05 of this Agreement. In the event that any Bank fails to make
available to the Administrative Agent the amount of such Bank's participation in
such Letter of Credit as provided in this Section 3.06, and the Administrative
Agent does not elect to fund to the Issuing Bank such Defaulting Bank's
participation in such Letter of Credit, the Issuing Bank shall be entitled to
recover such amount on demand from such Bank together with interest at the
Federal Funds Rate for the first three Business Days while such amount remains
unpaid and thereafter at the Prime Rate. The Administrative Agent shall
distribute to each other Bank
51
<PAGE>
which has paid all amounts payable by it under this Section 3.06 with respect to
any Letter of Credit Issued by the applicable Issuing Bank such other Bank's Pro
Rata Share of all payments subsequently received by the Administrative Agent
from the Company in reimbursement of drawings honored by the Issuing Bank under
such Letter of Credit when such payments are received.
3.07. Nature of Issuing Bank's Duties. In determining whether to pay
-------------------------------
under any Letter of Credit, the applicable Issuing Bank shall be responsible
only to determine that the documents and certificates required to be delivered
under that Letter of Credit have been delivered and that they comply on their
face with the requirements of that Letter of Credit. As between the Company,
any Issuing Bank and each other Bank, the Company assumes all risks of the acts
and omissions of such Issuing Bank (except to the extent that it is finally
judicially determined that such acts or omissions were the result of such
Issuing Bank's gross negligence or willful misconduct) or misuse of the Letters
of Credit by the respective beneficiaries of such Letters of Credit. In
furtherance and not in limitation of the foregoing, neither the Administrative
Agent, any Issuing Bank nor any of the other Banks shall be responsible (i) for
the form, validity, sufficiency, accuracy, genuineness or legal effects of any
document submitted by any party in connection with the application for and
Issuance of or any drawing honored under such Letters of Credit even if it
should in fact prove to be in any or all respects invalid, insufficient,
inaccurate, fraudulent or forged, (ii) for the validity or sufficiency of any
instrument transferring or assigning or purporting to transfer or assign any
such Letter of Credit, or the rights or benefits thereunder or proceeds thereof,
in whole or in part, which may prove to be invalid or ineffective for any
reason, (iii) for failure of the beneficiary of any such Letter of Credit to
strictly comply with conditions required in order to draw upon such Letter of
Credit, (iv) for errors, omissions, interruptions or delays in transmission or
delivery of any messages, by mail, cable, telegraph, telex, telecopy or
otherwise, whether or not they be in cipher, (v) for errors in interpretation of
technical terms, (vi) for any loss or delay in the transmission or otherwise of
any document required in order to make a drawing under any such Letter of
Credit, or of the proceeds thereof, (vii) for the misapplication by the
beneficiary of any such Letter of Credit of the proceeds of any drawing honored
under such Letter of Credit, and (viii) for any consequences arising from causes
beyond the control of such Issuing Bank, the Administrative Agent or the other
Banks. The Issuing Bank shall not be obligated to and shall not pay against any
non-conforming documents presented to it in connection with any Letters of
Credit without the prior written consent of the
52
<PAGE>
Company. None of the above shall affect, impair, or prevent the vesting of any
of the Issuing Bank's rights or powers hereunder. Any action taken or omitted to
be taken by the Issuing Bank under or in connection with any Letter of Credit,
if taken or omitted in the absence of gross negligence or willful misconduct,
shall not create for the Issuing Bank any liability to the Company, the
Administrative Agent or any Bank.
3.08. Obligations Absolute. The obligations of the Company to
--------------------
reimburse the Issuing Bank for drawings honored under the Letters of Credit and
the obligations of the Banks under Section 3.06 shall be unconditional and
irrevocable and shall be paid strictly in accordance with the terms of this
Agreement under all circumstances including, without limitation, the following
circumstances:
(a) any lack of validity or enforceability of any Letter of Credit;
(b) the existence of any claim, setoff, defense or other right
which the Company or any Affiliate of the Company may have at any time against a
beneficiary or any transferee of any Letter of Credit (or any Persons or
entities for whom any such beneficiary or transferee may be acting), the
applicable Issuing Bank, any Bank or any other Person, whether in connection
with this Agreement, the transactions contemplated herein or any unrelated
transaction;
(c) any draft, demand, certificate or any other documents presented
under any Letter of Credit proving to be forged, fraudulent, invalid or
insufficient in any respect or any statement therein being untrue or inaccurate
in any respect;
(d) the surrender or impairment of any security for the performance
or observance of any of the terms of any of the Loan Documents;
(e) payment by the Issuing Bank under any Letter of Credit against
presentation of a demand, draft or certificate or other document which does not
comply with the terms of such Letter of Credit;
(f) failure of any drawing under a Letter of Credit or any
nonapplication or misapplication by the beneficiary of the proceeds of any
drawing; or
(g) the fact that a Default or an Event of Default shall have
occurred and be continuing;
53
<PAGE>
provided, however, that the Company shall have no obligation to reimburse any
- -------- -------
Issuing Bank, and the Banks shall have no obligation under Section 3.06, in the
event of such Issuing Bank's willful misconduct or gross negligence in
determining whether documents presented under the Letter of Credit comply with
the terms of such Letter of Credit.
3.09. Uniform Customs and Practice and Uniform Commercial Code. The
--------------------------------------------------------
Uniform Customs and Practice for Documentary Credits as published by the
International Chamber of Commerce ("UCP") most recently at the time of Issuance
---
of any Letter of Credit shall (unless otherwise expressly provided in the
Letters of Credit) apply to the Letters of Credit. Without limiting the
foregoing, to the extent not addressed in the UCP, the UCC shall (unless
otherwise expressly provided in the Letters of Credit) apply to the Letters of
Credit.
ARTICLE IV.
INTEREST, FEES AND EXPENSES, ETC.
---------------------------------
4.01. Interest on Prime Rate Loans. Subject to the provisions of
----------------------------
Section 4.03, interest on Prime Rate Loans shall be payable monthly in arrears
on the second Business Day of each month at an interest rate per annum equal to
the Prime Rate plus the Applicable Margin. In the event of any change in said
Prime Rate, the rate under this Section 4.01 shall change, effective as of the
day the Prime Rate changes. Each determination by the Agent of an interest rate
under this Section 4.01 shall be conclusive and binding for all purposes, absent
manifest error.
4.02. Interest on Eurodollar Rate Loans. Subject to the provisions
---------------------------------
of Section 4.03, interest on Eurodollar Rate Loans shall be payable (a) on the
last day of each month with respect to such Eurodollar Rate Loan, (b) at the
date of conversion of such Eurodollar Rate Loan (or a portion thereof) to a
Prime Rate Loan and (c) at maturity of such Eurodollar Rate Loan at an interest
rate per annum during the Interest Period in effect for such Eurodollar Rate
Loan equal to the Adjusted Eurodollar Rate for such Interest Period for such
Eurodollar Rate Loan plus the Applicable Margin. The Administrative Agent upon
determining the Adjusted Eurodollar Rate for any Interest Period shall promptly
notify the Company and the Banks by telephone (confirmed promptly in writing) or
in writing thereof. Each determination by the Administrative Agent of an
interest rate under this Section 4.02 shall be conclusive and binding for all
purposes, absent manifest error.
54
<PAGE>
4.03. Interest After Event of Default. Upon the occurrence and during
-------------------------------
the continuation of an Event of Default resulting from the failure of the
Company to make any payment of principal or interest as provided in Section
9.01(a), or after notice is delivered to Company of the occurrence of any other
Event of Default, and at all times thereafter until the earlier of the date upon
which (i) all Obligations have been paid and satisfied in full or (ii) such
Event of Default shall no longer be continuing, interest on overdue principal on
the Loans and to the extent permitted by law, overdue interest in respect of
such Loans, shall be payable on demand at a rate per annum equal to the rate at
which the Loans would bear interest pursuant to Sections 4.01 and 4.02 above, as
the case may be, plus two percent (2.00%). In the event of any change in said
applicable interest rate, the rate under this Section 4.03 shall change,
effective as of the day the applicable interest rate changes, so as to remain
two percent (2.00%) above the then applicable interest rate.
4.04. Reimbursement of Expenses.
-------------------------
(a) From and after the Effective Date, the Company shall reimburse BT
within five (5) Business Days after demand (subject to Section 5.01(e)) (and the
Administrative Agent is entitled to charge the Loan Account) for all reasonable
Expenses of BT incurred by BT and upon receipt of invoices therefor and, if
requested by the Company, such reasonable backup materials and information as
the Company shall reasonably request.
(b) The Company shall promptly reimburse the Agents and the Banks
(and the Administrative Agent is entitled to charge the Loan Account) upon
furnishing of an invoice for all costs and Expenses incurred by them in
connection with the enforcement, attempted enforcement or preservation of any
rights or remedies under any Loan Document and in connection with any workout,
restructuring, renegotiation or refinancing of the Loans and the other
Obligations under the Agreement and the other Loan Documents.
4.05. Commitment Fees and Certain Other Fees. () The Company shall
--------------------------------------
pay to the Administrative Agent, for distribution in accordance with the terms
thereof, all fees payable to each applicable Person as required by the letter
agreement among the Company, BT, BKB and TD dated July 29, 1997 (the "Fee
---
Letter").
- ------
(b) Commitment Fees. The Company shall pay to the Administrative
---------------
Agent for the account of each Bank a commitment fee on the average daily unused
portion (whether or not available to be used) of such Bank's Commitment set
55
<PAGE>
forth in Schedule 1.01(a) to this Agreement, as such Commitment may be reduced
----------------
hereunder, for the period commencing on the Effective Date and continuing
thereafter, and computed on a monthly basis in arrears as of the last Business
Day of each calendar month based upon the daily utilization for that month as
calculated by the Administrative Agent, in an amount equal to the average daily
unused portion of such Bank's Commitment times the applicable average rate per
-----
annum that is derived from the Commitment Fee Rate. For purposes of calculating
utilization under this Section, the Commitments shall be deemed used to the
extent of the Effective Amount of Loans then outstanding plus the Effective
Amount of L/C Obligations then outstanding. Except as set forth above, such
commitment fee shall accrue from the Effective Date to the Facility Expiry Date
and shall be due and payable monthly in arrears upon calculation by the
Administrative Agent and such fees shall be charged to the Loan Account in
accordance with Section 2.07; provided that, in connection with any termination
--------
of Commitments under Section 2.06, the accrued commitment fee calculated for the
period ending on such date shall also be paid on the date of such termination.
The commitment fees provided in this Section shall accrue at all times after the
above-mentioned Effective Date, including at any time during which one or more
conditions in Article V are not met.
---------
4.06. Letter of Credit Fees.
---------------------
(a) The Company shall pay to the Administrative Agent for the account
of each of the Banks, a Letter of Credit fee (i) with respect to Standby Letters
of Credit in an amount equal to the product of (A) the applicable rate per annum
that is derived from the Standby L/C Risk Participation Fee Rate times (B) the
-----
average daily maximum amount available to be drawn under such Standby Letters of
Credit while outstanding, and (ii) with respect to Commercial Letters of Credit
in an amount equal to the product of (A) the applicable rate per annum that is
derived from the Commercial L/C Risk Participation Fee Rate times (B) the
-----
average daily maximum amount available to be drawn under such Commercial Letters
of Credit while outstanding, in each case computed on a monthly basis in arrears
as of the last Business Day of each calendar month based upon Letters of Credit
outstanding for that month as calculated by the Administrative Agent. Such
Letter of Credit fees shall be due and payable monthly in arrears upon
calculation by the Administrative Agent and such amounts shall be charged to the
Loan Account in accordance with Section 2.07. Solely for purposes of
determining fees payable in connection with the outstanding Letters of Credit
issued under the Existing Credit Agreement, such Letters of Credit shall be
considered as if they were issued on the Effective
56
<PAGE>
Date; it being understood that issuance fees with respect to such Letters of
Credit have been paid.
(b) The Company shall pay to the Administrative Agent for the account
of each Issuing Bank a Letter of Credit fronting fee for all Letters of Credit
Issued by such Issuing Bank equal to 0.15% per annum of the average daily
maximum amount available to be drawn under all such Letters of Credit while
outstanding Issued by such Issuing Bank, computed on a monthly basis in arrears
as of the last Business Day of each calendar month based upon Letters of Credit
outstanding for that month as calculated by the Administrative Agent. Such
fronting fees shall be due and payable monthly in arrears upon calculation by
the Administrative Agent and such amounts shall be charged to the Loan Account
in accordance with Section 2.07.
(c) The Company shall pay to each Issuing Bank from time to time on
demand, upon the furnishing of an invoice therefor, the normal issuance,
presentation, amendment and other processing fees and commissions, and other
standard costs and charges, of such Issuing Bank relating to Letters of Credit
Issued by such Issuing Bank as from time to time in effect (the "Issuing Bank
Fees").
(d) Upon the occurrence and during the continuation of an Event of
Default resulting from the failure of Company to make any payment of principal
or interest as provided in Section 9.01(a), or after notice is delivered to
Company of the occurrence of any other Event of Default, and at all times
thereafter until the earlier of the date upon which (i) all Obligations have
been paid and satisfied in full in cash (including any required Cash
Collateralization) or (ii) such Event of Default shall no longer be continuing,
as the case may be, applicable Letter of Credit Fees shall be payable on demand
at a rate equal to the rate at which the applicable Letter of Credit Fees are
charged pursuant to Section 4.06(a) above, plus two percent (2.00%).
4.07. Special Provisions Relating to Eurodollar Rate Loans.
----------------------------------------------------
(a) Continuation. With respect to any Borrowing consisting of
------------
Eurodollar Rate Loans, the Company may (so long as no Default or Event of
Default has occurred and is continuing unless otherwise agreed to by the
Majority Banks), subject to the provisions of Section 4.07(c), elect to maintain
such Borrowing or any portion thereof as consisting of Eurodollar Rate Loans by
selecting a new Interest Period for such Borrowing, which new Interest Period
shall commence on the last day of the immediately preceding Interest Period.
Each selection of a new Interest
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Period shall be made by the giving of a Notice of Continuation not later than
5:00 P.M., New York City time, on the third Business Day prior to the date of
any such continuation relating to Eurodollar Rate Loans, by the Company to the
Administrative Agent. Such Notice of Continuation by the Company shall be by
telephone or facsimile transmission, and if by telephone, promptly confirmed in
writing, in each case specifying (i) the date of such continuation, (ii) the
aggregate amount of Loans subject to such continuation and (iii) the duration of
the selected Interest Period. The Company may elect to maintain more than one
Borrowing consisting of Eurodollar Rate Loans by combining such Borrowings into
one Borrowing and selecting a new Interest Period pursuant to this Section
4.07(a); provided, however, that each of the Borrowings so combined shall
-------- -------
consist of Loans having Interest Periods ending on the same date. If the Company
shall fail to select a new Interest Period for any Borrowing consisting of
Eurodollar Rate Loans in accordance with this Section 4.07(a), such Loans will
automatically on the last day of the then existing Interest Period therefor,
convert into Prime Rate Loans.
(b) Conversion. The Company may on any Business Day (so long as no
----------
Default or Event of Default has occurred and is continuing unless otherwise
agreed to by the Majority Banks), upon the giving of a Notice of Conversion
given to the Administrative Agent, and subject to the provisions of Section
4.07(c), convert the entire amount of or a portion of all Loans of one Type
comprising the same Borrowing into Loans of another Type; provided, however,
-------- -------
that any conversion of any Eurodollar Rate Loans into Prime Rate Loans shall be
made on, and only on, the last day of an Interest Period for such Eurodollar
Rate Loans and, upon conversion of any Prime Rate Loans into Eurodollar Rate
Loans, the Company shall pay accrued interest to the date of conversions on the
principal amount converted. Each such Notice of Conversion shall be given not
later than 1:00 P.M., New York City time, on the day of any proposed conversion
into Prime Rate Loans and not later than 5:00 P.M. on the third Business Day
prior to the date of any proposed conversion into Eurodollar Rate Loans.
Subject to the restrictions specified above, each Notice of Conversion shall be
by telephone or facsimile transmission and, if by telephone, promptly confirmed
in writing, in each case specifying (i) the requested date of such conversion,
(ii) the Type of Loans to be converted, (iii) the portion of such Type of Loan
to be converted, (iv) the Type of Loan such Loans are to be converted into and
(v) if such conversion is into Eurodollar Rate Loans, the duration of the
Interest Period of such Loan. Each conversion shall be in an aggregate amount
for the Loans of all Banks of not less than $5,000,000 or in an integral
multiple of
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$1,000,000 in excess thereof. The Company may elect to convert the entire amount
of or a portion of all Loans of one Type comprising more than one Borrowing into
Loans of another Type by combining such Borrowings into one Borrowing consisting
of Loans of another Type; provided, however, that if the Borrowings so combined
-------- -------
consist of Eurodollar Rate Loans, such Loans shall have Interest Periods ending
on the same date.
(c) Certain Limitations on Eurodollar Rate Loans. The right of the
--------------------------------------------
Company to maintain, select, continue or convert Eurodollar Rate Loans shall be
limited as follows:
(i) If the Administrative Agent is advised by BT that it is
not offering U.S. dollar deposits (in the applicable amounts) in the London
interbank market, or the Administrative Agent determines that adequate and
fair means do not otherwise exist for ascertaining the Eurodollar Rate for
Eurodollar Rate Loans comprising any requested Borrowing, continuation or
conversion, the right of the Company to select or maintain Eurodollar Rate
Loans for such Borrowing or any subsequent Borrowing shall be suspended
until the Administrative Agent shall notify the Company and the Banks that
the circumstances causing such suspension no longer exist, and each Loan
comprising such Borrowing shall be made as a Prime Rate Loan.
(ii) If the Majority Banks shall, at least one Business Day
before the date of any requested Borrowing of, continuation of or
conversion into a Eurodollar Rate Loan, notify the Administrative Agent
that the Eurodollar Rate for Loans comprising such Borrowing, continuation
or conversion will not adequately reflect the cost to such Banks of making
or funding their respective Loans for such Borrowing or conversion, or
maintaining such continuation, the right of the Company to select or
continue Eurodollar Rate Loans for such Borrowing, continuation or
conversion shall be suspended until the Administrative Agent shall notify
the Company and the Banks that the circumstances causing such suspension no
longer exist, and each Loan comprising such Borrowing, continuation or
conversion shall be made as a Prime Rate Loan.
(iii) If at any time any Bank determines (which determination
shall, absent manifest error, be conclusive and binding on all parties)
that the making, continuation or conversion of any Loan as a Eurodollar
Rate Loan has become unlawful or impermissible by reason of compliance by
that Bank with any law, governmental rule, regulation or order of any
Governmental Authority (whether or not having the force
59
<PAGE>
of law or would result in costs or penalties), then, and in any such event,
such Bank may give notice of that determination, in writing, to the Company
and the Administrative Agent and the Administrative Agent shall promptly
transmit the notice to each other Bank. Until such Bank gives notice
otherwise, the right of the Company to select Eurodollar Rate Loans from
that Bank shall be suspended and each Eurodollar Rate Loan outstanding from
that Bank shall automatically and immediately convert to a Prime Rate Loan.
(iv) No Agent Advance shall be made as a Eurodollar Rate Loan.
(v) The right of the Company to select, continue or convert
Eurodollar Rate Loans shall not be effective during the continuance of any
Default or Event of Default unless otherwise agreed to by the Majority
Banks.
(vi) There shall not be outstanding at any one time more than
an aggregate of three (3) Loans which consist of Eurodollar Rate Loans.
(d) Compensation.
------------
(i) Each Notice of Continuation and Notice of Conversion shall
be irrevocable by and binding on the Company. In the case of any Borrowing,
continuation or conversion that the related Notice of Borrowing, Notice of
Continuation or Notice of Conversion specifies is to be comprised of
Eurodollar Rate Loans, the Company shall indemnify each Bank against any
loss, cost or expense incurred by such Bank as a result of any failure to
fulfill, on or before the date for such Borrowing, continuation or
conversion specified in such Notice of Borrowing, Notice of Continuation or
Notice of Conversion, the applicable conditions set forth in Article 5 or,
in the event such conditions are satisfied, the failure of the Company to
make such Borrowing, including, without limitation, in each case any loss
(excluding loss of anticipated profits), cost or expense incurred by reason
of the liquidation or reemployment of deposits or other funds acquired by
such Bank to fund the Loan to be made by such Bank as part of such
Borrowing, continuation or conversion.
(ii) If any payment of principal of, or conversion or
continuation of, any Eurodollar Rate Loan is made other than on the last
day of the Interest Period for such Loan as a result of a payment,
prepayment, conversion or continuation of such Loan or
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<PAGE>
acceleration of the maturity of the Notes pursuant to Article 9 of this
Agreement or for any other reason, the Company shall, upon demand by any
Bank (with a copy of such demand to the Administrative Agent), pay to the
Administrative Agent for the account of such Bank any amounts required to
compensate such Bank for any additional losses, costs or expenses which it
may reasonably incur as a result of such payment, including, without
limitation, any loss (excluding loss of anticipated profits), cost or
expense incurred by reason of the liquidation or reemployment of deposits
or other funds acquired by any Bank to fund or maintain such Loan.
(iii) Calculation of all amounts payable to a Bank under this
Section 4.07(d) shall be made as though such Bank elected to fund all Eurodollar
Rate Loans by purchasing U.S. dollar deposits in its Eurodollar Lending Office's
interbank eurodollar market.
4.08. Indemnification in Certain Events.
---------------------------------
(a) If after the Effective Date, either (i) any change in or in the
interpretation of any law or regulation is introduced, including, without
limitation, with respect to reserve requirements, applicable to BT, any Bank or
any Affiliate controlling any Bank, or (ii) a Bank or an Affiliate controlling a
Bank complies with any future guideline or request from any central bank or
other Governmental Authority or (iii) a Bank or an Affiliate controlling a Bank
determines 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 has or would
have the effect described below, a Bank or an Affiliate controlling a Bank
complies 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, and in the case of any event set forth in this clause (iii), such
adoption, change or compliance has or would have the direct or indirect effect
of reducing the rate of return on any of the capital as a consequence of its
obligations hereunder to a level below that which a Bank or an Affiliate
controlling a Bank could have achieved but for such adoption, change or
compliance (taking into consideration such Bank's or Affiliate's policies as the
case may be with respect to capital adequacy) by an amount deemed by such Bank
or such Affiliate controlling such Bank to be material, and any of the foregoing
events described in clauses (i), (ii) or (iii) increases the cost to the any
Bank of funding or maintaining the Commitments or issuing,
61
<PAGE>
making or maintaining any Letter of Credit or of purchasing or maintaining any
participation therein, complying with its obligations under this Agreement or
reduces the amount receivable in respect thereof by the Administrative Agent, or
any Bank or any Affiliate controlling such Bank, then the Company shall, upon
demand by the Agent, pay to the Administrative Agent, for the account of each
applicable Bank, each applicable Affiliate controlling a Bank or, each
applicable Issuing Bank, additional amounts sufficient to indemnify such Bank or
the Affiliate controlling such Bank against such increase in cost or reduction
in amount receivable. A certificate as to the amount of such increased cost and
setting forth in reasonable detail the calculation thereof shall be submitted to
the Company by the Administrative Agent, or the applicable Bank or the
applicable Affiliate controlling such Bank, and shall be conclusive, absent
manifest error. Any party entitled to payment hereunder in respect of such
increased cost shall use reasonable efforts to designate a different Lending
Office to the extent such designation could reduce or eliminate such payment.
(b) It is understood that (i) Section 4.08(a) does not relate to any
changes in the rate of tax on the net income of the Issuing Bank, or any Bank,
or any Affiliate controlling such Bank imposed by the jurisdiction in which it
is organized, maintains a lending office or its principal office, or has any
other contacts or connections that would subject it to taxation therein
(excluding any connection or contact arising solely from the Issuing Bank, or
such Bank or such Affiliate having executed, delivered, performed its
obligations or received a payment under, or enforced this Agreement or any other
Loan Document) and (ii) any payment made under this Section 4.08 shall be made
without duplication for any item that is covered by Section 4.09.
4.09. Net Payments.
------------
(a) All payments by the Company hereunder or under any other Loan
Document to or for the benefit of any Bank, any Issuing Bank, the Collateral
Agent or the Administrative Agent shall be made without set-off, counterclaim or
other defense and shall be made free and clear of, and without deduction or
withholding for, any Taxes. In addition, the Company shall pay all Other Taxes.
(b) The Company agrees to indemnify and hold harmless each Bank, the
Issuing Bank, the Collateral Agent and the Administrative Agent for the full
amount of Taxes or Other Taxes (including any additional Taxes or Other Taxes
imposed by any jurisdiction on amounts payable under this Section 4.09(b)) paid
by any Bank, any Issuing Bank, the Collateral Agent or the Administrative Agent
in respect of
62
<PAGE>
any sum payable hereunder or under any other Loan Document (including penalties,
interest, additions to tax and any reasonable expenses). Payment under this
indemnification shall be made within 30 days after the date any Bank, any
Issuing Bank, the Collateral Agent or the Administrative Agent makes written
demand therefor.
(c) If the Company shall be required by law to deduct or withhold any
Taxes or Other Taxes from or in respect of any sum payable hereunder (or under
any other Loan Document) to any Bank, any Issuing Bank, the Collateral Agent or
the Administrative Agent, then:
(i) the sum payable shall be increased as necessary so that
after making all such required deductions and withholdings of Taxes or Other
Taxes (including deductions and withholdings applicable to additional sums
payable under this Section 4.09), such Bank, such Issuing Bank, the Collateral
Agent or the Administrative Agent receives an amount equal to the sum it would
have received had no such deductions or withholdings been made;
(ii) the Company shall make such deductions and withholdings; and
(iii) the Company shall pay the full amount deducted or withheld
to the relevant taxing authority or other authority in accordance with
applicable law.
(d) Within 30 days after the date of any payment by the Company of
Taxes or Other Taxes, the Company shall furnish to the Administrative Agent the
original or a certified copy of a receipt evidencing payment thereof, or other
evidence of payment satisfactory to the Administrative Agent if available from
the appropriate taxing authority.
(e) If the Company would be required to pay additional amounts to any
Bank pursuant to paragraph (b) or (c) of this Section 4.09, then such Bank shall
use reasonable efforts (consistent with legal and regulatory restrictions) to
change the jurisdiction of its lending office so as to eliminate the obligation
of the Company to pay any such additional amounts which may thereafter accrue or
to indemnify such Bank in the future, if such change in the reasonable judgment
of such Bank is not otherwise materially disadvantageous to such Bank.
(f) (i) Any Bank not organized under the laws of the United States
shall furnish to the Company or the Administrative Agent, two copies of IRS Form
1001, IRS Form 4224 or IRS Form W-8, or successor applicable form (which shall
be accurate and complete) as may be required to establish, as of the date of
this Agreement, an exemption from U.S. withholding taxes or backup withholding
taxes in respect of payments made under any Loan Document. In the event that a
Bank assigns all or a portion of its rights and obligations under this
Agreement, pursuant to Section 11.07, each assignee shall furnish to the Company
or the Administrative Agent two copies of IRS Form 1001, IRS Form 4224 or IRS
Form W-8, or successor applicable form (which shall be accurate and complete) as
may be required to
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<PAGE>
establish, as of the date of the assignment, a full exemption from U.S.
withholding taxes or back-up withholding taxes in respect of payments made under
this Agreement. The Company and the Administrative Agent shall be entitled to
rely upon the accuracy of any such forms, documents or other information
furnished to it by any Person and shall have no obligation to make any
additional payment or indemnify any Person for any taxes, interest or penalties
that would not have become payable by such Person had such documentation been
accurate.
(ii) Each Bank that is not organized under the laws of the
United States (including any assignee pursuant to Section 11.07 that is not
organized under the laws of the United States) shall also deliver to the Company
or the Administrative Agent two further copies of said Form 1001, Form 4224, or
Form W-8, or successor applicable forms, as the case may be, when requested to
do so by the Company or the Administrative Agent on or before the date that any
such form expires or becomes obsolete or otherwise is required to be resubmitted
as a condition to obtaining an exemption from a required withholding of U.S.
federal income tax or after the occurrence of any event requiring a change in
the most recent form previously delivered by it to the Administrative Agent or
the Company, and such extensions or renewals thereof as may reasonably be
requested by the Company or the Administrative Agent, certifying that such Bank
is entitled to receive payments hereunder or under any other Loan Documents
without deduction or withholding of any U.S. federal income taxes, unless in any
such case an event outside the control of such Bank (including, without
limitation, any change in treaty, law or regulation) has occurred 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 so advises the
Company or the Administrative Agent. No Bank shall be required to provide a form
described in the preceding sentence unless it is legally entitled to do so at
the time such form is requested by the Company, and the inability to provide any
such form shall not be considered a failure to comply with the provisions of
this Section 4.09(f) unless such inability results from any event that is not
outside the control of such Bank.
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<PAGE>
(iii) In the event that any Bank shall furnish a Form W-8 to the
Company or the Administrative Agent pursuant to (i) or (ii) above, such Bank
shall also certify that any payments pursuant to this Agreement are not received
by such Bank as an extension of credit entered into in the ordinary course of
its business.
(g) Notwithstanding any other provision of this Section 4.09 to the
contrary, the Company shall not be required to pay any additional amounts
pursuant to this Section 4.09 to the extent that such additional amounts relate
to Taxes or Other Taxes (including obligations to deduct or withhold amounts
with respect thereto) that result solely from a failure of any Bank, or assignee
thereof, to comply with Section 4.09(f) on or before the Effective Date or, in
the case of an assignee, the date the assignment becomes effective.
4.10. Affected Banks. If the Company is obligated to pay to any Bank
or an Issuing Bank any amount under Section 4.08 or 4.09 or if any Bank is a
Defaulting Bank, the Company may, if no Default or Event of Default then exists,
replace such Bank with another bank or may replace such Issuing Bank with
another letter of credit issuer in each case acceptable to the Administrative
Agent and the Issuing Banks (other than such Issuing Bank), and such Bank or
such Issuing Bank, as applicable, hereby agrees to be so replaced subject to the
following:
(a) The obligations of the Company hereunder to the Bank or the
Issuing Bank to be replaced (including such increased or additional costs
incurred from the date of notice to the Company of such increase or additional
costs through the date such Bank or Issuing Bank is replaced hereunder) shall be
paid in full in cash to such Bank or Issuing Bank concurrently with such
replacement;
(b) If such replacement is a result of increased costs under Section
4.08 or 4.09, the replacement Bank shall be a bank or other financial
institution acceptable to the Administrative Agent that is not subject to such
increased costs which caused the Company's election to replace any Bank
hereunder, and such replacement Bank shall execute and deliver to the
Administrative Agent such documentation satisfactory to the Administrative Agent
pursuant to which such replacement Bank is to become a party to this Agreement,
conforming to the provisions of Section 11.07, with a Commitment equal to that
of the Bank being replaced, shall make Loans in the aggregate principal amount
equal to the aggregate outstanding principal amount of the Loans of the Bank
being replaced and shall be deemed to have acquired a participation in L/C
Obligations then outstanding equal to the participation therein of the Bank
being replaced;
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<PAGE>
(c) Upon such execution and delivery of such documents referred to in
clause (b) and payment of the amounts referred to in clause (a), the replacement
bank shall be a "Bank" with a Commitment as specified hereinabove and the Bank
being replaced shall cease to be a "Bank" hereunder, except with respect to
indemnification provisions under this Credit Agreement, which shall survive as
to such replaced Bank;
(d) The Administrative Agent shall reasonably cooperate in
effectuating the replacement of any Bank or any Issuing Bank under this Section
4.10, but at no time shall the Administrative Agent be obligated to initiate any
such replacement;
(e) Any Bank or the Issuing Bank replaced under this Section 4.10
shall be replaced at the Company's sole cost and expense and at no cost or
expense to the Administrative Agent or any of the Banks or the Issuing Bank; and
(f) If the Company proposes to replace any Bank pursuant to this
Section 4.10 because the Bank seeks reimbursement under either Section 4.08 or
4.09, then it must also replace any other Bank who seeks reimbursement on a
proportionate basis (based upon such Bank's Commitment to the combined
Commitments) under such Sections.
4.11. Sharing of Payments. If any Bank shall obtain any payment
-------------------
(whether voluntary, involuntary, through the exercise of any right of set-off or
otherwise) on account of the Loans made by it or its participation in the L/C
Obligations in excess of its Pro Rata Share of payments on account of the Loans
or L/C Obligations obtained by all the Banks, such Bank shall forthwith purchase
from the other Banks such participations in the Loans made by them or in their
participation in Letters of Credit as shall be necessary to cause such
purchasing Bank to share the excess payment ratably with each of them; provided,
--------
however, that if all or any portion of such excess payment is thereafter
- -------
recovered from such purchasing Bank, such purchase (or corresponding portion
thereof) from each Bank shall be rescinded and each such Bank shall repay to the
purchasing Bank the purchase price to the extent of such recovery together with
an amount equal to such Bank's ratable share (according to the proportion of (i)
the amount of such Bank's required repayment to (ii) the total amount so
recovered from the purchasing Bank) of any interest or other amount paid or
payable by the purchasing Bank in respect to the total amount so recovered. The
Company agrees that any Bank so purchasing a participation from another Bank
pursuant to this Section 4.11 may, to the full extent permitted by law, exercise
all of its rights of payment
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(including the right of setoff) with respect to such participation as fully as
if such Bank were the direct creditor of the Company in the amount of such
participation.
4.12. Calculations. All calculations of (i) interest with respect to
------------
Eurodollar Rate Loans and per annum fees, shall be made by the Administrative
Agent, on the basis of a year of 360 days, or, if such computation would cause
the interest and fees chargeable hereunder to exceed the highest rate allowed by
applicable law, 365/366 days, and (ii) interest with respect to Prime Rate Loans
shall be made by the Administrative Agent on the basis of a year of 365/366
days, in each case to the extent applicable for the actual number of days
elapsed (including the first day but excluding the last day) occurring in the
period for which such interest or fees are payable. Each determination by the
Administrative Agent of an interest rate or payment hereunder shall be
conclusive and binding for all purposes, absent manifest error.
ARTICLE V.
CONDITIONS PRECEDENT
--------------------
5.01. Conditions of Effectiveness. The obligations of each Bank
---------------------------
hereunder and the effectiveness of this Agreement are subject to the fulfillment
of the following conditions precedent and the prior receipt by the
Administrative Agent of all of the following (and in the case of any agreements,
documents, opinions and certificates (other than those delivered pursuant to
Sections 5.01(g) and (h)), in sufficient copies for the Administrative Agent and
each Bank) dated the Effective Date or such other date as is satisfactory to the
Administrative Agent, in form and substance satisfactory to each of the Lead
Banks:
(a) Credit Agreement and Notes. This Agreement and Notes drawn to
--------------------------
the order of each requesting Bank, executed by each party thereto;
(b) Resolutions; Incumbency.
-----------------------
(i) Copies of the resolutions of the board of directors of the
Company authorizing the execution, delivery and performance of the Loan
Documents and any other documents, instruments and certificates required to
be executed by the Company in connection herewith or therewith and the
transactions contemplated hereby and thereby, certified as of the Effective
Date by the Secretary or an Assistant Secretary of the Company; and
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(ii) A certificate of the Secretary or Assistant Secretary of
the Company, certifying the names and true signatures of the officers of
the Company authorized to execute, deliver and perform the Loan Documents
to be delivered by it hereunder;
(c) Organization Documents; Good Standing. Each of the following
-------------------------------------
documents:
(i) the certificate of incorporation of the Company, certified
by the Secretary of State of the State of Delaware dated as of a recent
date prior to the Effective Date, dated the Effective Date, and the bylaws
of the Company as in effect on the Effective Date, certified by the
Secretary or an Assistant Secretary of the Company as of the Effective
Date; and
(ii) a good standing and tax good standing certificate for the
Company from the Secretary of State of the state of Delaware and each state
where the Company is qualified to do business as a foreign corporation as
of a recent date, together with a bring-down good-standing certificate for
the Company from the Secretary of State of the State of Delaware, by
facsimile, dated the Effective Date;
(d) Legal Opinions.
--------------
(i) an opinion of Mayer, Brown & Platt, counsel to the Company,
addressed to the Administrative Agent and the Banks, substantially in the
form of Exhibit F; and
---------
(ii) an opinion of Paul Hastings Janofsky & Walker LLP, special
counsel to the Administrative Agent, addressed to the Administrative Agent
and the Banks, substantially in the form of Exhibit G.
---------
(e) Payment of Fees and Expenses. Evidence of payment by the Company
----------------------------
of all accrued and unpaid Fees and Expenses to the extent then due and payable
on the Effective Date, together with any reasonable estimate of fees and
expenses of outside counsel incurred or to be incurred by it through the closing
proceedings (provided that such estimate shall not thereafter preclude final
settling of accounts between the Company and such Person); including, without
limitation, any such costs, fees, commissions and expenses arising under or
referenced in the Fee Letters, in Section 4.05 or in Section 11.04;
(f) Collateral Documents. The Collateral Documents executed by the
--------------------
Company and each other party that
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is listed as a party thereto, in appropriate form for filing or recording, where
necessary, together with:
(i) executed copies of all UCC-1 and UCC-3 financing
statements in proper form for filing to perfect the security interests of
the Collateral Agent for the benefit of the Banks and the Bank Swap Parties
and to terminate all security interest of the administrative agent under
the Existing Credit Agreement, or other evidence satisfactory to the
Collateral Agent that there has been delivered to the Collateral Agent for
filing, registration or recordation all financing statements and other
filings, registrations and recordings necessary and advisable to perfect
the Liens of the Collateral Agent for the benefit of the Banks and the Bank
Swap Parties in accordance with applicable law;
(ii) all certificates, instruments or documents representing or
evidencing any Collateral in suitable form for transfer by delivery or
accompanied by duly executed instruments of transfer or assignment in
blank, all in form and substance satisfactory to the Collateral Agent and
each Lead Bank;
(iii) written advice relating to such Lien searches as the
Collateral Agent shall have requested, and such termination statements or
other documents as may be necessary to confirm that the Collateral is
subject to no other Liens in favor of any Persons (other than Permitted
Liens);
(iv) on or before the Effective Date, a completed certificate
of the Company, substantially in the form of Exhibit E (a "Perfection
--------- ----------
Certificate") signed by a Responsible Officer of the Company;
-----------
(v) funds sufficient to pay any filing or recording tax or fee
in connection with any and all UCC financing statements;
(vi) evidence that the Collection Bank Agreement, the
Concentration Bank Agreement, the Collateral Account Agreement and each
Commodities Account Agreement are in full force and effect (including
delivery of a written notice to the Collection Bank to the effect that the
security interest described in the Collection Bank Agreement has been
granted) and that all other cash collection arrangements are in form and
substance satisfactory to the Lead Banks;
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(vii) evidence that the Company has implemented procedures to
promptly notify in writing all existing wholesale account customers and
debtors that any amounts with respect to wholesale accounts receivable
shall be paid directly into the Concentration Account or the Collection
Deposit Account, specifying in such notice the name of the Concentration
Account or the Collection Deposit Account, and the branch and account
number of such account; and
(viii) evidence that all other actions necessary or desirable to
perfect the first priority Lien created by the Collateral Documents, and to
enhance the Collateral Agent's ability to preserve its interests in and
access to the Collateral, have been taken;
(g) Certificate. A certificate signed by a Responsible Officer,
-----------
dated as of the Effective Date, stating that:
(i) the representations and warranties contained in Article VI
are true and correct on and as of such date, as though made on and as of
such date;
(ii) no Default or Event of Default exists on the Effective
Date, or would result from the execution and performance of the Loan
Documents; and
(iii) except as specifically disclosed in Schedule 6.25, there
-------------
has occurred since December 31, 1996, no event or circumstance that has
resulted or could reasonably be expected to result in a Material Adverse
Effect;
(h) Corporate Proceedings. Evidence satisfactory to each Lead Bank
---------------------
that all corporate and other proceedings taken or to be taken in connection with
the transactions contemplated by the Loan Documents and all documents incidental
to this Agreement and thereto shall be in form and substance satisfactory to
each Lead Bank, and the Administrative Agent shall have received all counterpart
originals or certified copies of such documents;
(i) Consents, Approvals, Etc. All necessary orders, permits,
-------------------------
licenses, authorizations, approvals, consents and waivers by any Governmental
Authority or other Person (including, without limitation, the consent of certain
customers, if required, under any Material Contracts) in connection with the
transactions contemplated hereby and by any of the other Loan Documents. Each
of the aforementioned orders, permits, licenses, authorizations,
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approvals, consents and waivers by Governmental Authorities or other Persons
shall be in full force and effect and shall be in form and substance
satisfactory to each Lead Bank;
(j) Material Contracts and Other Documents. Copies of all Material
--------------------------------------
Contracts in effect as of the Effective Date, which are set forth on Schedule
--------
5.01(j), copies of the Holdings Note Indentures and the Holdings Notes (in each
- -------
case including all schedules and exhibits thereto), which shall be in full force
and effect, and copies of all commodities account agreements in effect;
(k) No Litigation. A certificate signed by a Responsible Officer,
-------------
dated as of the Effective Date, satisfactory to each Lead Bank to the effect
that (i) there is no litigation, proceeding, inquiry or other action seeking an
injunction or other restraining order, damages or other relief, pending or
threatened, with respect to any Loan Document and (ii) there exists no judgment,
order, injunction, decree or other restraint or a hearing seeking injunctive
relief or other restraint pending or noticed with respect to any transaction
contemplated by any Loan Documents;
(l) Borrowing Base Certificate. A Borrowing Base Certificate, in
--------------------------
form and substance satisfactory to each Lead Bank which shall be prepared as of
August 31, 1997;
(m) Financial Statements. The financial statements referred to in
--------------------
Section 6.11, each certified by the chief financial officer (or in the case of
his or her unavailability, by the treasurer or controller) of the Company;
(n) No Material Adverse Effect. Since December 31, 1996, in the
--------------------------
opinion of each Lead Bank in its sole discretion, there shall have occurred no
event or circumstance that has resulted or could reasonably be expected to
result in a Material Adverse Effect;
(o) Other Documents. Such other approvals, opinions, documents or
---------------
materials as the Administrative Agent or any Lead Bank may request.
(p) The administrative agent and the lenders under the Existing
Credit Agreement, the Administrative Agent on behalf of the Banks, the Company
and any other Person party thereto shall have executed and delivered the
Termination Agreements.
5.02. Conditions to All Loans. The obligation of each Bank to make
-----------------------
any Loan to be made by it, to convert any Prime Rate Loan into a Eurodollar Rate
Loan under Section
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2.04 or to continue a Eurodollar Rate Loan under 2.04 is subject to the
satisfaction of the following conditions precedent on the relevant Borrowing
Date or Conversion/Continuation Date; provided that only the conditions set
--------
forth in Sections 5.02(a) and 5.02(c) need be satisfied in the case of a
continuation of a Eurodollar Rate Loan pursuant to Section 4.07:
(a) Notice of Borrowing or Conversion/ Continuation. The
-----------------------------------------------
Administrative Agent shall have received a Notice of Borrowing, or a Notice of
Conversion/Continuation, as applicable;
(b) Continuation of Representations and Warranties. After giving
----------------------------------------------
effect to such Borrowing, the representations and warranties in Article VI shall
be true and correct on and as of such Borrowing Date with the same effect as if
made on and as of such Borrowing Date (except to the extent such representations
and warranties expressly refer to an earlier date, in which case they shall be
true and correct as of such earlier date and except to the extent (x) the
representations and warranties set forth in Section 6.05 relate to any
litigation which has been specifically disclosed to the Banks and which has been
added to Schedule 6.05 with the written approval of the Majority Banks and (y)
-------------
the representation and warranty set forth in Section 6.25 relates to any event
or condition which has been specifically disclosed to the Banks and which has
been added to Schedule 6.25 with the written approval of the Majority Banks).
-------------
Each Notice of Borrowing and each Notice of Conversion/Continuation
relating to the conversion of any Prime Rate Loan into a Eurodollar Rate Loan
submitted by the Company hereunder shall constitute a representation and
warranty by the Company hereunder, as of the date of each such notice and as of
each Borrowing Date or Conversion/Continuation Date, as applicable, that the
conditions in this Section 5.02 are satisfied. Each Notice of
Conversion/Continuation relating to the continuation of any Eurodollar Rate Loan
submitted by the Company hereunder shall constitute a representation and
warranty by the Company hereunder, as of the date of each such notice and as of
each Conversion/Continuation Date that the conditions in Sections 5.02(a) and
(c) are satisfied;
(c) No Future Advance Notice. Neither the Administrative Agent nor
------------------------
any Bank shall have received from the Company any notice that any Collateral
Document will no longer secure on a first priority basis future advances or
future Loans to be made or extended under this Agreement;
72
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(d) Performance of Agreements. The Company shall have performed in
-------------------------
all material respects all agreements and satisfied all conditions which the Loan
Documents provide shall be performed or satisfied by it on or before the
relevant Borrowing Date or Conversion/Continuation Date;
(e) No Judgments. No order, judgment or decree of any arbitrator or
------------
Governmental Authority shall purport to enjoin or restrain any Bank from making
or converting the Loans to be made or converted by it on the relevant Borrowing
Date or Conversion/Continuation Date;
(f) Regulation G, T, U and X. The making or converting of the Loans
------------------------
requested on the relevant Borrowing Date or Conversion/Continuation Date shall
not violate any law including, without limitation, Regulation G, T, U or X of
FRB; and
(g) No Litigation. There shall not be pending or, to the knowledge
-------------
of the Company, threatened, any action, suit, proceeding, governmental
investigation or arbitration against or affecting the Company or any of its
Subsidiaries or any property of the Company or any of its Subsidiaries that has
not been disclosed by the Company in writing pursuant to Section 7.03 prior to
the making of the last preceding Loans, and there shall have occurred no
development not so disclosed in any such action, suit, proceeding, governmental
investigation or arbitration so disclosed, that, in either event, would
reasonably be expected to have a Material Adverse Effect; and no injunction or
other restraining order shall have been issued and no hearing to cause an
injunction or other restraining order to be issued shall be pending or noticed
with respect to any action, suit or proceeding seeking to enjoin or otherwise
prevent the consummation of, or to recover any damages or obtain relief as a
result of, the transactions contemplated by any Loan Document or the making of
any Loans.
5.03. Conditions to All Letters of Credit. The Issuance of any
-----------------------------------
Letter of Credit hereunder (whether or not the applicable Issuing Bank is
obligated to Issue such Letter of Credit) is subject to the following conditions
precedent:
(a) Notice of Issuance of Letter of Credit. On or before the date of
--------------------------------------
Issuance of such Letter of Credit, the applicable Issuing Bank and the
Administrative Agent shall have received from the Company, in accordance with
the provisions of Sections 3.01 and 3.02, a Letter of Credit Request, together
with all other information specified in Article III and such other documents or
information as the applicable Issuing Bank and the Administrative Agent may
73
<PAGE>
require in connection with the Issuance of such Letter of Credit.
(b) Satisfaction of Other Conditions. On the date of Issuance of
--------------------------------
such Letter of Credit, all conditions precedent described in Section 5.02 shall
be satisfied to the same extent as if the Issuance of such Letter of Credit were
the making of a Loan and the date of Issuance of such Letter of Credit were a
Borrowing Date.
Each Letter of Credit Request submitted by the Company hereunder shall
constitute a representation and warranty by the Company hereunder, as of the
date of each such Letter of Credit Request and as of the date on which the
Letter of Credit is Issued, that the conditions in this Section 5.03 are
satisfied.
ARTICLE VI.
REPRESENTATIONS AND WARRANTIES
------------------------------
The Company represents and warrants to the Administrative Agent and
each Bank that:
6.01. Corporate Existence and Power. The Company and each of its
-----------------------------
Restricted Subsidiaries (in the case of clauses (a), (b) and (c)) and its
Subsidiaries (in the case of clause (d)):
(a) is a corporation duly organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation;
(b) has the power and authority and all governmental licenses,
authorizations, consents and approvals to own its assets, carry on its business
and to execute, deliver, and perform its obligations under the Loan Documents;
(c) is duly qualified as a foreign corporation and is licensed and in
good standing under the laws of each jurisdiction where its ownership, lease or
operation of property or the conduct of its business requires such qualification
or license; and
(d) is in compliance with all Requirements of Law and has all
necessary orders, authorizations, approvals, consents and waivers by any
Governmental Authority or other Person for the Company to own and operate its
business;
74
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except, in each case referred to in clause (c) or clause (d), to the extent that
the failure to do so could not reasonably be expected to have a Material Adverse
Effect.
6.02. Corporate Authorization; No Contravention. The execution,
-----------------------------------------
delivery and performance by the Company and the Restricted Subsidiaries of each
Loan Document to which such Person is party, have been duly authorized by all
necessary corporate action, and do not and will not:
(a) contravene the terms of any of that Person's Organization
Documents;
(b) conflict with or result in any breach or contravention of, or the
creation of any Lien under, any document evidencing any Contractual Obligation
to which such Person is a party or any order, injunction, writ or decree of any
arbitrator or Governmental Authority to which such Person or its property is
subject; or
(c) violate any Requirement of Law.
6.03. Governmental Authorization. No approval, consent, exemption,
--------------------------
authorization, or other action by, or notice to, or filing with, any
Governmental Authority (except for filings in connection with the Liens granted
to the Administrative Agent under the Collateral Documents) is necessary or
required in connection with the execution, delivery or performance by, or
enforcement against, the Company or any of its Restricted Subsidiaries of any
Loan Document to which such Person is a party.
6.04. Binding Effect. Each Loan Document to which the Company or any
--------------
of its Restricted Subsidiaries is a party constitutes the legal, valid and
binding obligation of the Company and its Restricted Subsidiaries to the extent
it is a party thereto, enforceable against such Person in accordance with its
respective terms, except as enforceability may be limited by applicable
bankruptcy, insolvency, or similar laws affecting the enforcement of creditors'
rights generally or by equitable principles.
6.05. Litigation. Except as specifically disclosed in Schedule 6.05,
---------- -------------
there are no actions, suits, proceedings, claims or disputes pending, or to the
best knowledge of the Company, threatened or contemplated, at law, in equity, in
arbitration or before any Governmental Authority, against the Company, or its
Subsidiaries or any of their respective properties which:
(a) purport to affect or pertain to any Loan Document, or any of the
transactions contemplated hereby or thereby; or
75
<PAGE>
(b) if determined adversely to the Company or its Subsidiaries,
would reasonably be expected to have a Material Adverse Effect. No injunction,
writ, temporary restraining order or any order of any nature has been issued by
any arbitrator or Governmental Authority purporting to enjoin or restrain the
execution, delivery or performance of any Loan Document, or directing that the
transactions provided for herein or therein not be consummated as herein or
therein provided.
6.06. No Default. No Default or Event of Default exists or would
----------
result from the incurring of any Obligations by the Company or from the grant or
perfection or continued perfection of the Liens of the Collateral Agent, in
favor of the Administrative Agent and the Banks on the Collateral. As of the
Effective Date, neither the Company nor any of its Subsidiaries is in default
under or with respect to any Contractual Obligation in any respect which,
individually or together with all such defaults, could reasonably be expected to
have a Material Adverse Effect, or that would, if such default had occurred
after the Effective Date, create an Event of Default under Section 9.01(e).
6.07. ERISA Compliance.
----------------
(a) Each Plan is in compliance in all material respects with the
applicable provisions of ERISA, the Code and other federal or state law, except
for matters which have not resulted and would not reasonably be expected to
result in a Material Adverse Effect. Each Plan which is intended to qualify
under Section 401(a) of the Code has received, or will timely file for, a
favorable determination letter from the IRS and to the best knowledge of the
Company, nothing has occurred which would cause, or would reasonably be expected
to cause, the loss of such qualification. The Company and each ERISA Affiliate
has made all required contributions to any Plan subject to Section 412 of the
Code, and no application for a funding waiver or an extension of any
amortization period pursuant to Section 412 of the Code has been made with
respect to any Plan.
(b) There are no pending or, to the best knowledge of the Company,
threatened claims, actions or lawsuits, or action by any Governmental Authority,
with respect to any Plan which has resulted or could reasonably be expected to
result in a Material Adverse Effect. There has been no prohibited transaction or
violation of the fiduciary responsibility rules with respect to any Plan which
has resulted or could reasonably be expected to result in a Material Adverse
Effect.
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<PAGE>
(c) (i) No ERISA Event has occurred or is reasonably expected to
occur; (ii) no Pension Plan has any material Unfunded Pension Liability; (iii)
neither the Company nor any ERISA Affiliate has incurred, or reasonably expects
to incur, any material liability under Title IV of ERISA with respect to any
Pension Plan (other than premiums due and not delinquent under Section 4007 of
ERISA); (iv) neither the Company nor any ERISA Affiliate has incurred, or
reasonably expects to incur, any material liability (and no event has occurred
which, with the giving of notice under Section 4219 of ERISA, would result in
such liability) under Section 4201 or 4243 of ERISA with respect to a
Multiemployer Plan; and (v) neither the Company nor any ERISA Affiliate has
engaged in a transaction that could reasonably be expected to be subject to
Section 4069 or 4212(c) or ERISA.
6.08. Use of Proceeds; Margin Regulations. The proceeds of the Loans
-----------------------------------
are to be used solely for the purposes set forth in and permitted by Section
7.11 and Section 8.07. Neither the Company nor any Subsidiary is generally
engaged in the business of purchasing or selling Margin Stock or extending
credit for the purpose of purchasing or carrying Margin Stock.
6.09. Title to Properties. The Company and each Subsidiary have good
-------------------
record and marketable title in fee simple to, or valid leasehold interests in,
all real property necessary or used in the ordinary conduct of their respective
businesses, except for such defects in title as could not, individually or in
the aggregate, reasonably be expected to have a Material Adverse Effect. As of
the Effective Date, the property of the Company and its Subsidiaries is subject
to no Liens, other than Permitted Liens.
6.10. Taxes. The Company and its Subsidiaries have filed all Federal
-----
and other material tax returns and reports required to be filed, and have paid
all Federal and other material taxes, assessments, fees and other governmental
charges levied or imposed upon them or their properties, income or assets
otherwise due and payable, except those which are being contested in good faith
by appropriate proceedings and for which adequate reserves have been provided in
accordance with GAAP. There is no proposed tax assessment against the Company
or any of its Subsidiaries that would, if made, reasonably be expected to have a
Material Adverse Effect.
6.11. Financial Condition.
-------------------
The audited consolidated financial statements of the Company and its
Subsidiaries dated December 31, 1996 and
77
<PAGE>
the related consolidated statements of income or operations, shareholders'
equity and cash flows for the fiscal year ended on that date (including the
notes thereto) and the unaudited consolidated financial statements of the
Company and its Subsidiaries dated June 30, 1997 and the related consolidated
statements of income or operations, shareholders' equity and cash flows for the
fiscal quarter ended on that date (including the notes thereto):
(i) were prepared in accordance with GAAP consistently applied
throughout the period covered thereby, except as otherwise expressly noted
therein, subject, in the case of such unaudited financial statements, to
ordinary, good faith year end audit adjustments;
(ii) fairly present the consolidated financial condition of the
Company and its Subsidiaries as of the date thereof and the consolidated results
of operations of the Company and its Subsidiaries for the period covered
thereby; and
(iii) except as specifically disclosed in Schedule 6.11, show
-------------
all material indebtedness and other material liabilities, direct or contingent,
of the Company and its consolidated Subsidiaries as of the date thereof,
including material liabilities for taxes, material commitments and material
Contingent Obligations.
6.12. Environmental Matters.
---------------------
(a) Except as specifically disclosed in Schedule 6.12, the on-going
-------------
operations of the Company and each of its Subsidiaries comply in all respects
with all Environmental Laws, except such non-compliance which would not (if
enforced or otherwise addressed in accordance with applicable law) result in
liabilities reasonably expected to require payments by the Company and its
Subsidiaries (whether to compensate for damages, to investigate and/or remediate
contamination or hazardous conditions, to make capital improvements or
otherwise) in an aggregate amount, determined for any date upon which this
representation or warranty is made, exceeding $10,000,000 during the thirty-six
month period commencing on such date. Except as disclosed in Schedule 6.12, no
-------------
real property owned, operated, used or controlled by the Company or any of its
Subsidiaries is listed or proposed for listing on the National Priority List or
the Comprehensive Environmental Response, Compensation, and Liability
Information System, both promulgated under CERCLA, or on any comparable state or
local list, and, except as disclosed in Schedule 6.12, neither the Company nor
-------------
any of its Subsidiaries has received any notification of potential or actual
liability or request
78
<PAGE>
for information by any Governmental Authority under CERCLA or any comparable
state or local law.
(b) Except as specifically disclosed in Schedule 6.12, the Company
-------------
and each of its Subsidiaries have obtained all licenses, permits,
authorizations, approvals, consents and registrations required under any
Environmental Law ("Environmental Permits") and necessary for their respective
---------------------
ordinary course operations, except where the failure to have such licenses,
permits, authorizations, approvals, consents and registrations could not
reasonably be expected to have a Material Adverse Effect, and all such
Environmental Permits are in good standing, and the Company and each of its
Subsidiaries are in compliance with all material terms and conditions of such
Environmental Permits.
(c) Except as specifically disclosed in Schedule 6.12, none of the
-------------
Company, any of its Subsidiaries or any of their respective present property or
operations, is subject to any outstanding written order from or agreement with
any Governmental Authority, nor subject to any judicial or docketed
administrative proceeding, respecting any Environmental Law, Environmental Claim
or Hazardous Material.
(d) Except as specifically disclosed in Schedule 6.12, there are no
-------------
Hazardous Materials or other conditions or circumstances existing with respect
to any property of the Company or any of its Subsidiaries, or arising from their
operations that would reasonably be expected to give rise to Environmental
Claims requiring payments by the Company and its Subsidiaries (whether to
compensate for damages, to investigate and/or remediate contamination or
hazardous conditions, to make capital improvements or otherwise) in an aggregate
amount, determined for any date upon which this representation or warranty is
made, exceeding $10,000,000 during the thirty-six month period commencing on
such date. In addition, (i) neither the Company nor any of its Subsidiaries has
any underground storage tanks, above-ground storage tanks, storage ponds or
surface impoundments (x) that are not properly registered, permitted or
otherwise authorized under applicable Environmental Laws, or (y) that are
leaking or otherwise releasing Hazardous Materials (whether as fluids or vapors)
into the environment in a manner that may reasonably be expected to give rise to
Environmental Claims with a potential liability to the Company and its
Subsidiaries in excess of $5,000,000 in the aggregate, and (ii) the Company and
its Subsidiaries have notified all of their employees of the existence of any
health hazards arising from the conditions of their employment and have met all
notification requirements under Title III of CERCLA and all other Environmental
Laws.
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<PAGE>
(e) Except as set forth in Schedule 6.12, none of the Company or any
-------------
of its Subsidiaries has any contingent liabilities under environmental
indemnities or other agreements whereby the Company or any such Subsidiary has
agreed to indemnify others against Environmental Claims which could reasonably
be expected to expose the Company and its Subsidiaries to liabilities exceeding
$10,000,000 in the aggregate, and except as set forth in Schedule 6.12, none of
-------------
the Company or its Subsidiaries has provided any bond or other form of financial
assurance with respect to any environmental liability, risks or remediation
costs of shippers, customers or other third-parties.
6.13. Collateral Documents.
--------------------
(a) The provisions of each of the Collateral Documents are effective
to create in favor of the Collateral Agent for the benefit of the Administrative
Agent, the Banks and the Bank Swap Parties, a legal, valid and enforceable first
priority security interest in all right, title and interest of the Company and
its Restricted Subsidiaries in the Collateral described therein and upon filing
of the UCC-1 financing statements in the offices in all of the jurisdictions
listed in the schedule to the Security Agreement, the Collateral Agent shall
have a legal, valid and enforceable first priority security interest in the
Collateral subject only to Permitted Liens.
(b) All representations and warranties of the Company and any of its
Restricted Subsidiaries party thereto contained in the Collateral Documents are
true and correct in all material respects.
(c) The Company has delivered to the Collateral Agent all commodities
account agreements in effect.
6.14. Regulated Entities. None of the Company, any Person controlling
------------------
the Company, or any Restricted Subsidiary, is an "Investment Company" within the
meaning of the Investment Company Act of 1940. The Company is not subject to
regulation under the Public Utility Holding Company Act of 1935, the Federal
Power Act, the Interstate Commerce Act, any state public utilities code, or any
other Federal or state statute or regulation limiting its ability to incur
Indebtedness.
6.15. No Burdensome Restrictions. Neither the Company nor any
--------------------------
Restricted Subsidiary is a party to or bound by any Contractual Obligation, or
subject to any restriction in any Organization Document, or any Requirement of
Law, which could reasonably be expected to have a Material Adverse Effect.
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<PAGE>
6.16. Copyrights, Patents, Trademarks and Licenses, etc. The Company
-------------------------------------------------
or its Restricted Subsidiaries own or are licensed or otherwise have the right
to use all of the patents, trademarks, service marks, trade names, copyrights,
contractual franchises, authorizations and other rights that are reasonably
necessary for the operation of their respective businesses, without conflict
with the rights of any other Person. To the best knowledge of the Company, no
slogan or other advertising device, product, process, method, substance, part or
other material now employed, or now contemplated to be employed, by the Company
or any Restricted Subsidiary infringes upon any rights held by any other Person.
Except as specifically disclosed in Schedule 6.05, no claim or litigation
-------------
regarding any of the foregoing is pending or threatened, and no patent,
invention, device, application, principle or any statute, law, rule, regulation,
standard or code is pending or, to the knowledge of the Company, proposed,
which, in either case, could reasonably be expected to have a Material Adverse
Effect.
6.17. Subsidiaries. The Company has no Subsidiaries and has no equity
------------
Investments in any other corporation or entity other than (a) those specifically
disclosed in Schedule 6.17, (b) Joint Ventures permitted under Section 8.09, (c)
-------------
the Pipeline Subsidiary, (d) when formed, the New Pipeline Subsidiary, (e) when
formed or designated, any Unrestricted Subsidiary and (f) Investments permitted
under Section 8.04.
6.18. Insurance. Except as specifically disclosed in Schedule 6.18,
--------- -------------
the properties of the Company and its Restricted Subsidiaries are insured with
financially sound and reputable insurance companies not Affiliates of the
Company, in such amounts, with such deductibles and covering such risks as are
customarily carried by Persons engaged in similar businesses and owning similar
properties in localities where the Company or such Subsidiary operates.
6.19. Solvency. The Company is and each of its Restricted Subsidiaries
--------
are Solvent.
6.20. Full Disclosure. None of the representations or warranties made
---------------
by the Company or any Restricted Subsidiary in the Loan Documents as of the date
such representations and warranties are made or deemed made, and none of the
statements contained in any exhibit, report, statement or certificate furnished
by or on behalf of the Company or any Restricted Subsidiary in connection with
the Loan Documents, contains any untrue statement of a material fact or omits to
state any material fact required to be stated therein or necessary to make the
statements made
81
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therein, in light of the circumstances under which they were made, not
misleading as of the time when made or delivered.
6.21. Maintenance of Accounts. Neither the Company nor any of its
-----------------------
Subsidiaries has or maintains any bank or other account containing or receiving
proceeds of the Collateral except the Collection Deposit Account and the
Concentration Account and the Retail Accounts disclosed in the Collection Bank
Agreement and the Concentration Bank Agreement (including the schedules
thereto).
6.22. Receivables. Each Eligible Receivable pledged by the Company to
-----------
the Collateral Agent under the Collateral Documents represents a final sale and
delivery of merchandise or the rendition of services by the Company to customers
and is owned by the Company free and clear of all Liens in favor of any Person
other than the Administrative Agent on behalf of the Banks and the Bank Swap
Parties. Each such Eligible Receivable has a liquidated amount maturing on a
date specified in the duplicate invoice or other supporting data covering such
sale, and will not be subject to any deduction, offset, counterclaim, return
privilege or other condition, except in the ordinary course of business.
6.23. Inventory. The Perfection Certificates of the Company delivered
---------
to the Administrative Agent pursuant to Section 5.01(f) or Section 7.02(f),
contains a true and complete list showing all states and counties where the
Company maintains Inventory.
6.24. Senior Note Indentures and Holdings Note Indentures. The
---------------------------------------------------
Indebtedness to be incurred by the Company under this Agreement will be (i)
"Permitted Indebtedness" under the Holdings Note Indenture, dated as of May 15,
1993 pursuant to clause (ii) of the definition of such term contained therein as
this Agreement constitutes a refinancing, renewal, extension, refunding or
replacement of the Existing Credit Agreement (which constitutes the "Credit
Agreement" as defined in the Holdings Note Indenture, dated as of May 15, 1993)
and (ii) "Permitted Indebtedness" under the Senior Note Indentures pursuant to
clause (ii) of the definition of such term contained in each of the Senior Note
Indentures as this Agreement constitutes a refinancing, renewal, extension,
refunding or replacement of the Existing Credit Agreement (which constitutes the
"Credit Agreement" as defined in each of the Senior Note Indentures). The Loan
Documents, when executed and delivered by the parties thereto, are the "Credit
Agreement" as such term is used in clause (b) of Section 1016 of each of the
Senior Note Indentures. The execution, delivery and performance of the Loan
Documents and the provisions contained herein and therein do not contravene or
conflict with, result in a
82
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breach or violation of, or constitute default under any of the terms, conditions
or provisions of the Holdings Note Indentures, the Holdings Notes, the Senior
Note Indentures or the Senior Notes, including Section 1010 of the Holdings Note
Indenture, dated as of May 15, 1993.
6.25. Material Adverse Effect. Except as specifically disclosed in
-----------------------
Schedule 6.25, since December 31, 1996, there has been no Material Adverse
- -------------
Effect.
ARTICLE VII.
AFFIRMATIVE COVENANTS
---------------------
So long as any Bank shall have any Commitment hereunder, or any Loan or
other Obligation shall remain unpaid or unsatisfied, or any Letter of Credit
shall remain outstanding:
7.01. Financial Statements. The Company shall deliver to the
--------------------
Administrative Agent with sufficient copies for each Bank, in form and detail
satisfactory to the Majority Banks:
(a) as soon as available, but not later than 90 days after the end
of each fiscal year, a copy of the audited consolidated and consolidating
balance sheet of the Company and its Subsidiaries as at the end of such year and
the related consolidated and consolidating statements of income or operations,
shareholders' equity and cash flows for such year, setting forth in each case in
comparative form the figures for the previous fiscal year, and accompanied by
the opinion of Price Waterhouse LLP or another nationally-recognized independent
public accounting firm ("Independent Auditor"), which report shall state that
-------------------
such consolidated financial statements present fairly the financial condition
for the periods indicated in conformity with GAAP applied on a basis consistent
with prior years. Such opinion shall not be qualified or limited (including,
without limitation, as the scope of audit) and shall be delivered to the
Administrative Agent pursuant to a reliance agreement between the Administrative
Agent (on behalf of itself and the Banks) and such Independent Auditor in form
and substance satisfactory to the Administrative Agent;
(b) as soon as available, but not later than 45 days after the end
of each of the Company's fiscal quarters of each fiscal year, a copy of the
unaudited consolidated and consolidating balance sheet of the Company and its
Subsidiaries as of the end of such quarter and the related consolidated and
consolidating statements of income, shareholders' equity and cash flows for the
period
83
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commencing on the first day and ending on the last day of such quarter and, if
such quarter is not the first fiscal quarter of the fiscal year, then for the
period commencing on the first day of such fiscal year and ending on the last
day of such quarter, setting forth in each case in comparative form the figures
for the corresponding quarter for the previous fiscal year, and certified by a
Responsible Officer as fairly presenting, in accordance with GAAP (subject to
ordinary, good faith year-end audit adjustments), the consolidated financial
position and results of operations of the Company and its Subsidiaries;
(c) as soon as available, but not later than 30 days after the end
of each of the calendar months of each calendar year or, if the end of any such
calendar month is the last day of a fiscal quarter, then 45 days after the end
of such calendar month, a copy of the unaudited consolidated and consolidating
balance sheet of the Company and its Subsidiaries as of the end of such month
and the related consolidated and consolidating statements of income,
shareholders' equity and cash flows for the period commencing on the first day
and ending on the last day of such month and, if such month is not the first
month of the Company's fiscal year, then for the period commencing on the first
day of such fiscal year and ending on the last day of such month, setting forth
in each case in comparative form the figures for the corresponding month for the
previous fiscal year, and certified by a Responsible Officer as fairly
presenting, in accordance with GAAP (subject to ordinary, good faith year-end
audit adjustments), the consolidated financial position and results of
operations of the Company and its Subsidiaries; and
(d) as soon as available but not later than January 31 of each
fiscal year of the Company, the Company's operating budget, plans and financial
forecasts, prepared in accordance with its normal accounting procedures applied
on a consistent basis, for such fiscal year (prepared for each calendar month
and each fiscal quarter during such fiscal year) including, without limitation,
(i) forecasted consolidated statements of income, cash flows and financial
condition of the Company and its Subsidiaries for each such period and year-to-
date, (ii) the amount of forecasted Capital Expenditures, together with a
detailed description thereof, for each such period, and (iii) promptly upon
receipt thereof, copies of all reports submitted to the Company by the
Independent Auditor in connection with any annual, interim or special audit of
the books of the Company or any of its Subsidiaries made by the Independent
Auditor, including, without limitation, any so-called management letter
furnished to the Company or any of its Subsidiaries by its accountants.
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7.02. Certificates; Other Information. The Company shall furnish to
-------------------------------
the Administrative Agent and, except with respect to Sections 7.02(f) and
7.02(g), with sufficient copies for each Bank:
(a) concurrently with the delivery of the financial statements
referred to in Section 7.01(a), a certificate of the Independent Auditor stating
that in making the examination necessary therefor no knowledge was obtained of
any Default or Event of Default, except as specified in such certificate;
(b) concurrently with the delivery of the financial statements
referred to in Sections 7.01(a), (b) and (c), a Compliance Certificate executed
by a Responsible Officer;
(c) promptly, copies of all financial statements and reports that
Holdings or the Company sends to their respective public securityholders, and
copies of all financial statements and regular, periodic or special reports
(including Forms 10-K, 10-Q and 8-K) that Holdings, the Company or any of their
respective Subsidiaries may make to, or file with, the SEC;
(d) promptly upon the effectiveness thereof, copies of each
amendment, modification or restatement of or replacement or substitution for any
of the Institutional Finance Documents;
(e) prior to the close of business on the fifth Business Day after
(i) the Sunday closest to the fifteenth day of each month, and (ii) the last
Business Day of each month, including the month in which the Effective Date
occurs, a certificate (the "Borrowing Base Certificate") substantially in the
--------------------------
form of Exhibit D to this Agreement, signed by a Responsible Officer, setting
---------
forth, on an itemized basis, the Borrowing Base, as of the close of business on
such Sunday or month end and the Borrowing Base computations based thereon, as
well as certifications by a Responsible Officer of the Company that the
information set forth in such Borrowing Base Certificate is true and correct and
that from the date of the most recent Borrowing Base Certificate previously
delivered to the date of the new Borrowing Base Certificate being delivered with
such certification, no Default or Event of Default has occurred; provided, that
--------
if at any time the excess of the Borrowing Base over the sum of (A) the
Effective Amount of all Loans plus (B) the Effective Amount of all L/C
Obligations plus (C) the Effective Amount of all Outstanding Eligible LOIs, is
less than $50,000,000, the Company shall deliver a Borrowing Base Certificate
prior to the close of business on the fifth Business Day after the Sunday of
each week until
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such time as the excess of the Borrowing Base over such sum is greater or equal
to $50,000,000. Each Borrowing Base Certificate shall become effective upon the
Administrative Agent's receipt thereof and shall remain in effect until the
earlier of (A) the receipt by the Administrative Agent of the next Borrowing
Base Certificate to be delivered hereunder, and (B) the close of business on the
date on which the next Borrowing Base Certificate is required to be delivered
hereunder; provided, that during any month in which the United States
--------
Environmental Protection Agency or Department of Transportation mandates a
change in gasoline vapor pressure, the Company shall provide two Borrowing Base
Certificates in lieu of the Borrowing Base Certificate described in clause (i)
above, each dated as of one of the two Sundays during such month other than the
Sunday affected by the mandated change;
(f) no later than ten (10) days after the removal of any Inventory of
the Company from the states and counties listed on the then current Perfection
Certificates to a state or county not so listed, a revised Perfection
Certificate and UCC-1 financing statements, executed by the Company, in proper
form for filing to perfect the security interest of the Collateral Agent for the
benefit of the Administrative Agent and the Banks in such Inventory;
(g) promptly upon entering into a Swap Contract relating to interest
rates (or any amendments or modifications thereto) with any Bank Swap Party, a
copy of such Swap Contract (or such amendment or modification document); and
(h) promptly, such additional information regarding the business,
financial or corporate affairs of the Company or any of its Subsidiaries as the
Administrative Agent may from time to time request.
7.03. Notices. The Company shall promptly notify the Administrative
-------
Agent and each Bank:
(a) of the occurrence of any Default or Event of Default, and of the
occurrence or existence of any event or circumstance that will foreseeably
become a Default or Event of Default;
(b) of (i) any breach or non-performance of, or any default under,
any Contractual Obligation of the Company or any of its Subsidiaries which could
reasonably be expected to result in a Material Adverse Effect; and (ii) any
dispute, litigation, investigation, proceeding or suspension which may exist at
any time between the Company or any of its Subsidiaries and any Governmental
Authority;
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(c) of the commencement of, or any material development in, any
litigation or proceeding affecting the Company or any of its Subsidiaries (i) in
which the amount of damages claimed is $5,000,000 (or its equivalent in another
currency or currencies) or more, (ii) in which injunctive or similar relief is
sought and which, if adversely determined, would reasonably be expected to have
a Material Adverse Effect, or (iii) in which the relief sought is an injunction
or other stay of the performance of any Loan Document;
(d) upon, but in no event later than 10 days after, becoming aware
of (i) any and all enforcement, cleanup, removal or other governmental or
regulatory actions instituted, completed or threatened against the Company or
any of its Subsidiaries or any of their respective properties pursuant to any
applicable Environmental Laws that constitute Significant Environmental Issues,
(ii) all other Environmental Claims, and (iii) any changes in Environmental Laws
which will require Capital Expenditures in excess of levels assumed by the
Company in the preparation of any financial models or projections delivered to
the Banks (including forecasts required by Section 7.01(d));
(e) of any other litigation or proceeding affecting the Company or
any of its Subsidiaries which the Company would be required to report to the SEC
pursuant to the Exchange Act, within four days after reporting the same to the
SEC;
(f) of the occurrence of any of the following events affecting the
Company or any ERISA Affiliate (but in no event more than 10 days after such
event), and deliver to the Administrative Agent and each Bank a copy of any
notice with respect to such event that is filed with a Governmental Authority
and any notice delivered by a Governmental Authority to the Company or any ERISA
Affiliate with respect to such event:
(i) an ERISA Event;
(ii) a material increase in the Unfunded Pension Liability of
any Pension Plan;
(iii) the adoption of, or the commencement of contributions to,
any Plan subject to Section 412 of the Code by the Company or any ERISA
Affiliate or the adoption of any amendment to a Plan subject to Section 412 of
the Code, if such adoption or amendment results in a material increase in
contributions or Unfunded Pension Liability;
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(g) of each Retail Account Bank which becomes a Retail Account Bank
subsequent to the Effective Date. Such notification shall be deemed to be an
amendment to Schedule II to the Concentration Bank Agreement; and
-----------
(h) of any material change in accounting policies, financial
reporting practices or hedging practices by the Company or any of its
consolidated Subsidiaries.
Each notice under this Section 7.03 shall be accompanied by a written
statement by a Responsible Officer setting forth details of the occurrence
referred to therein, and stating what action the Company or any affected
Subsidiary proposes to take with respect thereto and at what time. Each notice
under Section 7.03(a) shall describe with particularity any and all clauses or
provisions of the relevant Loan Document that have been (or foreseeably will be)
breached or violated.
7.04. Preservation of Corporate Existence, Etc. The Company shall,
----------------------------------------
and shall cause each Restricted Subsidiary to:
(a) preserve and maintain in full force and effect its corporate
existence and good standing under the laws of its state or jurisdiction of
incorporation;
(b) preserve and maintain in full force and effect all governmental
rights, privileges, qualifications, permits, licenses and franchises necessary
or desirable in the normal conduct of its business except in connection with
transactions permitted by Section 8.03 and sales of assets permitted by Section
8.02;
(c) use reasonable efforts, in the ordinary course of business, to
preserve its business organization and goodwill; and
(d) preserve or renew all of its registered patents, trademarks,
trade names and service marks, the non-preservation of which could reasonably be
expected to have a Material Adverse Effect.
7.05. Maintenance of Property. The Company shall maintain, and shall
-----------------------
cause each Restricted Subsidiary to maintain, and preserve all its property
which is used or useful in its business in good working order and condition,
ordinary wear and tear excepted and make all necessary repairs thereto and
renewals and replacements thereof except where the failure to do so could not
reasonably be expected to have a Material Adverse Effect. The Company and each
Restricted Subsidiary shall use the standard of care typical
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in the industry in the operation and maintenance of its facilities.
7.06. Insurance. In addition to insurance requirements set forth in
---------
the Collateral Documents, the Company shall maintain, and shall cause each of
its Restricted Subsidiaries to maintain, with financially sound and reputable
independent insurers, insurance with respect to its properties and business
against loss or damage of the kinds customarily insured against by Persons
engaged in the same or similar business, of such types and in such amounts as
are customarily carried under similar circumstances by such other Persons;
including workers' compensation insurance, public liability and property and
casualty insurance which amount shall not be reduced by the Company in the
absence of 30 days' prior written notice to the Administrative Agent. All
insurance policies listed on Schedule 7.06 shall name the Collateral Agent as
-------------
loss payee, in each case for the benefit of itself, the Banks and the Bank Swap
Parties, as its interests may appear. Each such policy listed on Schedule 7.06
-------------
shall require, among other things, that no cancellation or material modification
of such policy shall be effective until 30 days prior written notice thereof
shall have been provided to the Administrative Agent. The Company shall furnish
the Administrative Agent, with sufficient copies for each Bank, at reasonable
intervals (and in any event at least once per calendar year) a certificate of a
Responsible Officer of the Company and each insurance broker of the Company
setting forth the nature and extent of all insurance maintained by the Company
and its Restricted Subsidiaries in accordance with this Section or any
Collateral Documents (and which, in the case of a certificate of a broker, were
placed through such broker).
7.07. Payment of Obligations. The Company shall, and shall cause each
----------------------
of its Restricted Subsidiaries to, pay and discharge as the same shall become
due and payable, all their respective obligations and liabilities, including:
(a) all tax liabilities, assessments and governmental charges or
levies upon it or its properties or assets, unless the same are being contested
in good faith by appropriate proceedings and adequate reserves in accordance
with GAAP are being maintained by the Company or such Subsidiary;
(b) all lawful claims which, if unpaid, would by law become a Lien
upon its property; and
(c) all indebtedness, as and when due and payable, but subject to
any subordination provisions
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contained in any instrument or agreement evidencing such Indebtedness.
7.08. Compliance with Laws. The Company shall comply, and shall cause
--------------------
each Subsidiary to comply, in all material respects with all Requirements of Law
of any Governmental Authority having jurisdiction over it or its business
(including the Federal Fair Labor Standards Act), except to the extent that the
failure to do so could not reasonably be expected to have a Material Adverse
Effect. The Company shall, and shall cause each of its ERISA Affiliates to:
(a) maintain each Plan in compliance in all respects with the applicable
provisions of ERISA, the Code and other federal or state law, except to the
extent that the failure to do so could not reasonably be expected to have a
Material Adverse Effect; (b) cause each Plan which is qualified under Section
401(a) of the Code to maintain such qualification, except to the extent that the
failure to do so could not reasonably be expected to have a Material Adverse
Effect; and (c) make all required contributions to any Plan subject to Section
412 of the Code.
7.09. Inspection of Property and Books and Records. The Company shall
--------------------------------------------
maintain and shall cause each Restricted Subsidiary to maintain proper books of
record and account, in which full, true and correct entries in conformity with
GAAP consistently applied shall be made of all financial transactions and
matters involving the assets and business of the Company and such Restricted
Subsidiary. The Company shall permit, and shall cause each Restricted
Subsidiary to permit, representatives and independent contractors of the
Administrative Agent or any Bank to visit and inspect any of their respective
properties, to examine their respective corporate, financial and operating
records, and make copies thereof or abstracts therefrom, and to discuss their
respective affairs, finances and accounts with their respective directors,
officers, and independent public accountants, all at the expense of the Company
and at such times during normal business hours and as often as may be reasonably
desired, upon any advance notice to the Company; provided when an Event of
--------
Default exists the Administrative Agent or any Bank may do any of the foregoing
at the expense of the Company at any time during normal business hours and
without advance notice. Without limiting the generality of the foregoing, the
Company agrees that semiannual Borrowing Base audit examinations on or about
March 31 and September 30 of each year beginning in 1997 (or more frequently, as
may be required by the Administrative Agent acting alone or at the direction of
the Lead Banks, in its or their sole discretion) shall be conducted at the
Company's cost and expense in scope and detail satisfactory to the
Administrative Agent or the Lead Banks,
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in-house personnel of the Administrative Agent or one or more Lead Banks, or one
or more outside appraisers selected by the Administrative Agent or the Lead
Banks.
7.10. Environmental Laws.
------------------
(a) The Company shall, and shall cause each of its Subsidiaries to,
conduct its operations and keep and maintain its property in compliance with all
Environmental Laws, except that it will not be a breach of this covenant if
noncompliance could not reasonably be expected to result, in the aggregate, in a
Material Adverse Effect.
(b) Upon the written request of the Administrative Agent or the
Majority Banks, the Company shall submit and cause each of its Subsidiaries to
submit, to the Administrative Agent with sufficient copies for each Bank, at the
Company's sole cost and expense, at reasonable intervals, a report prepared by
an environmental consultant approved by the Administrative Agent or the Lead
Banks, in form and substance satisfactory to the Lead Banks, providing an update
of the status of any environmental, health or safety compliance, hazard or
liability issue or matter disclosed on Schedule 6.12 or identified in any notice
-------------
or report required pursuant to Section 7.03(d), that could, individually or in
the aggregate, result in liability in excess of $10,000,000.
(c) The Company shall perform all environmental remediation in
respect of the "Excluded Area" (as defined in the Port Arthur Purchase
Agreement) in the manner and at such times as are contemplated in the Company's
remediation plan as evidenced by the November 9, 1994 report of Black and Veatch
Waste Science, Inc. and RTM/Jones and Neuse, Inc. and the TNRCC, and, in
addition, the Company shall comply with any further Requirement of Law which
becomes applicable to the Excluded Area. In the event the Company revises its
remediation plan in respect to the "Excluded Area" (whether by reason of a
further Requirement of Law or otherwise), the Company shall promptly notify the
Administrative Agent and the Banks of such revision, in detail satisfactory to
the Majority Banks, and shall comply with such revised remediation plan.
7.11. Use of Proceeds. The Company shall use the Letters of Credit
---------------
and the proceeds of the Loans for working capital and general corporate purposes
and not (a) in contravention of any Requirement of Law or of any Loan Document
or any Institutional Finance Document or (b) in any manner that would result in
the credit extended under this Agreement being in violation of Regulation G, T,
U or X of the FRB.
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7.12. Further Assurances.
------------------
(a) The Company shall ensure that all written information, exhibits
and reports furnished to the Administrative Agent or the Banks do not and will
not contain any untrue statement of a material fact and do not and will not omit
to state any material fact or any fact necessary to make the statements
contained therein not misleading in light of the circumstances under which they
were made, and will promptly disclose to the Administrative Agent and the Banks
and correct any defect or error that may be discovered therein or in any Loan
Document or in the execution, acknowledgment or recordation thereof.
(b) Promptly upon request by the Administrative Agent or the
Majority Banks, the Company shall (and shall cause any of the Restricted
Subsidiaries to) do, execute, acknowledge, deliver, record, re-record, file, re-
file, register and re-register, any and all such further acts, deeds,
conveyances, security agreements, mortgages, assignments, estoppel certificates,
financing statements and continuations thereof, termination statements, notices
of assignment, transfers, certificates, assurances and other instruments the
Administrative Agent or such Banks, as the case may be, may require from time to
time in order (i) to carry out more effectively the purposes of any Loan
Document, (ii) to subject to the Liens created by any of the Collateral
Documents any of the properties, rights or interests covered by any of the
Collateral Documents, (iii) to perfect and maintain the validity, effectiveness
and priority of any of the Collateral Documents and the Liens intended to be
created thereby, and (iv) to better assure, convey, grant, assign, transfer,
preserve, protect and confirm to the Administrative Agent and the Banks the
rights granted or now or hereafter intended to be granted to the Administrative
Agent or the Banks under any Loan Document or under any other document executed
in connection therewith.
7.13. Account Customers.
-----------------
(a) The Company shall, and shall cause each of the Restricted
Subsidiaries to, promptly notify in writing all future wholesale account
customers and debtors that any amounts with respect to wholesale accounts
receivable shall be paid directly into the Concentration Account specifying in
such notice the name of the Concentration Bank and the branch and account number
of such account.
(b) The Company shall, and shall cause each of the Restricted
Subsidiaries to, forward all funds received by the Company or such Restricted
Subsidiaries in respect of accounts receivable or any other Accounts (in each
case not
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otherwise deposited in a Collection Bank Account or the Concentration Account)
to the Concentration Account by wire transfer of immediately available funds.
7.14. Accounts.
--------
The Company shall:
(a) promptly upon, but in no event later than three (3) Business
Days after, the Company's learning thereof, inform the Administrative Agent and
each Bank in writing of any material delay by any Account Debtor in the
performance of any of such Account Debtor's obligations to the Company and of
any material allowance, credit or other money granted by the Company to any
Account Debtor owing more than $500,000; and
(b) promptly upon, but in no event later than three (3) Business
Days after, the Company's receipt or learning thereof, furnish to and inform the
Administrative Agent and each Bank of all material information relating to the
adverse financial condition of any Account Debtor.
7.15. Transfer of Funds into the Collection
Bank Account and Concentration Account
-----------------------------------------
(a) The Company shall monitor daily the balances of the Retail
Accounts and the Lockbox and the Company shall promptly provide written notice
to the Collection Bank instructing the Collection Bank to initiate an ACH
Transfer of the entire amount in such account or Lockbox to the Collection
Deposit Account unless the balance in any such account or Lockbox is less than
$10,000.
(b) With respect to direct transfers from any wholesale customer who
has authorized the Company to initiate ACH Transfers or other debits directly
from such customer's accounts into the Collection Deposit Account or the
Concentration Account from time to time to settle such customer's account with
the Company, the Company shall promptly initiate or direct the Collection Bank
or the Concentration Bank to initiate such ACH Transfer in the ordinary course
of the Company's business, consistent with past practice.
(c) During the continuance of an Event of Default, the Administrative
Agent shall have the right, with full power of attorney in the place and stead
of the Company to initiate ACH Transfers from all Retail Accounts with balance
in excess of $10,000 and all wholesale customer accounts that have been
authorized for ACH Transfers, to the Collection Deposit Account or the
Concentration Account, as applicable.
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ARTICLE VIII.
NEGATIVE COVENANTS
------------------
So long as any Bank shall have any Commitment hereunder, or any Loan
or other Obligation shall remain unpaid or unsatisfied, or any Letter of Credit
shall remain outstanding, unless the Majority Banks waive compliance in writing:
8.01. Limitation on Liens. The Company shall not, and shall not
-------------------
suffer or permit any Restricted Subsidiary to, directly or indirectly, make,
create, incur, assume or suffer to exist any Lien upon or with respect to any
part of its property, whether now owned or hereafter acquired, other than the
following ("Permitted Liens "):
---------------
(a) any Lien (other than a Lien on the Collateral) existing on
property of the Company or any Restricted Subsidiary on the Effective Date and
set forth in Schedule 8.01 securing Indebtedness outstanding on such date;
-------------
(b) any Lien created under any Loan Document;
(c) Liens for taxes, fees, assessments or other governmental charges
which are not delinquent or remain payable without penalty, or to the extent
that non-payment thereof is permitted by Section 7.07, provided that no notice
of lien has been filed or recorded under the Code;
(d) carriers', warehousemen's, mechanics', landlords',
materialmen's, repairmen's or other similar Liens arising in the ordinary course
of business which are not delinquent or remain payable without penalty or which
are being contested in good faith and by appropriate proceedings, which
proceedings have the effect of preventing the forfeiture or sale of the property
subject thereto;
(e) Liens (other than any Lien imposed by ERISA and other than on
the Collateral) consisting of pledges or deposits required in the ordinary
course of business in connection with workers' compensation, unemployment
insurance and other social security legislation;
(f) Liens (other than Liens on the Collateral) on the property of
the Company or its Restricted Subsidiary securing (i) the non-delinquent
performance of bids, trade contracts (other than for borrowed money), leases,
statutory obligations, (ii) contingent obligations on surety and appeal bonds,
and (iii) other non-delinquent obligations of a like nature; in each case,
incurred in the ordinary course
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of business; provided all such Liens in the aggregate would not (even if
--------
enforced) reasonably be expected to cause a Material Adverse Effect;
(g) Liens consisting of judgment or judicial attachment liens,
provided that the enforcement of such Liens is effectively stayed and all such
- --------
Liens in the aggregate at any time outstanding for the Company and the
Restricted Subsidiaries do not exceed $5,000,000;
(h) easements, rights-of-way, restrictions and other similar
encumbrances (other than Liens on the Collateral) incurred in the ordinary
course of business which, in the aggregate, are not substantial in amount, and
which do not in any case materially detract from the value of the property
subject thereto or interfere with the ordinary conduct of the businesses of the
Company and the Restricted Subsidiaries;
(i) Liens on assets (other than the Collateral) of corporations
which become Restricted Subsidiaries after the date of this Agreement; provided
--------
that such Liens existed at the time the respective corporations became
Restricted Subsidiaries and were not created in anticipation thereof;
(j) purchase money security interests on any property (other than
the Collateral) acquired or held by the Company or any Restricted Subsidiary in
the ordinary course of business, securing Indebtedness incurred or assumed for
the purpose of financing all or any part of the cost of acquiring such property;
provided that (i) any such Lien attaches to such property concurrently with or
- --------
within 60 days after the acquisition thereof, (ii) such Lien attaches solely to
the property so acquired in such transaction, (iii) the principal amount of the
debt secured thereby does not exceed 100% of the cost of such property, and (iv)
the principal amount of the Indebtedness secured by any and all such purchase
money security interests shall not at any time exceed $15,000,000;
(k) Liens (other than Liens on the Collateral) securing obligations
in respect of Capitalized Leases on assets subject to such leases; provided that
--------
such Capitalized Leases are otherwise permitted hereunder;
(l) Liens arising solely by virtue of any statutory or common law
provision relating to banker's liens, rights of setoff or similar rights and
remedies as to deposit accounts or other funds maintained with a creditor
depository institution; provided that such deposit account is not a part of the
-------- ----
Collateral and is not subject to restrictions against access by the Company or
any Restricted
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Subsidiary, as the case may be, in excess of those set forth by regulations
promulgated by the FRB;
(m) Liens consisting of pledges of Cash, Cash Equivalents,
Qualifying Investments or Long Term Treasury Securities owned by the Company to
secure, on a mark-to-market basis, obligations under Swap Contracts of the
Company or any Restricted Subsidiary relating to commodity prices entered into
in the ordinary course of business as bona fide hedging transactions or to
secure petroleum inventory delivery requirements resulting therefrom; provided
--------
that (i) the counterparty to such Swap Contract is an entity listed on Schedule
--------
8.01(m) of this Agreement or an Affiliate of such an entity, or such
- -------
counterparty is under a similar requirement to deliver similar collateral from
time to time to the Company and the Restricted Subsidiary party thereto, and
(ii) the aggregate value of such collateral so pledged by the Company and the
Restricted Subsidiaries together in favor of all counterparties does not at any
time exceed $50,000,000;
(n) Liens (other than Liens on the Collateral) (i) arising from
precautionary filings of UCC financing statements relating solely to operating
leases permitted by this Agreement and (ii) on equipment or intangible assets
purchased in connection with an operating lease permitted by this Agreement
granted to secure obligations under such operating lease;
(o) Liens on Cash or Qualifying Investments pledged in lieu of
letters of credit for bonding and performance requirements, insurance
requirements and workers' compensation requirements of the Company or any
Restricted Subsidiary so long as the aggregate amount of Cash and Qualifying
Investments so pledged does not exceed $10,000,000 at any time;
(p) Liens on Inventory under Section 9-319 of the UCC as in effect
in the State of Texas as of the Effective Date;
(q) Liens (other than Liens on the Collateral) on fixed assets of
the Company or any Restricted Subsidiary to secure tax-exempt industrial
development bonds permitted by Section 8.05(f); and
(r) Liens on stock or assets of Unrestricted Subsidiaries.
8.02. Disposition of Assets. The Company shall not, and shall not
---------------------
suffer or permit any Restricted Subsidiary to, directly or indirectly, sell,
assign, lease, convey, transfer or otherwise dispose of (whether in one or
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a series of transactions and whether or not in a Sale-Leaseback Transaction) any
property (including accounts and notes receivable, with or without recourse) or
enter into any agreement to do any of the foregoing, except:
(a) dispositions of inventory, or used, worn-out or surplus
equipment, all in the ordinary course of business;
(b) the sale of equipment to the extent that such equipment is
exchanged for credit against the purchase price of similar replacement
equipment, or the proceeds of such sale are promptly applied to the purchase
price of such replacement equipment;
(c) the sale of property pursuant to a Sale- Leaseback Transaction
if the resulting lease is permitted by Section 8.10;
(d) the sale or liquidation of Cash Equivalents or Qualifying
Investments in accordance with the terms of the Loan Documents;
(e) the sale of the assets set forth on Schedule 8.02;
----------------
(f) the sale of stock or assets of Unrestricted Subsidiaries; and
(g) the sale, assignment, lease, conveyance, transfer or other
disposition of other property not described in clauses (a)-(f), the aggregate
fair market value of which does not exceed $25,000,000 per calendar year;
provided however that to the extent any portion of such $25,000,000 basket is
- --------
not utilized in any calendar year, up to $12,500,000 of such unutilized amount
shall be added to the amount of the aggregate fair market value of the assets
which may be sold, assigned, leased, conveyed, transferred or otherwise disposed
of under this clause (g) in the following year.
8.03. Consolidations and Mergers. The Company shall not, and shall
--------------------------
not suffer or permit any Restricted Subsidiary to, merge, consolidate with or
into, or convey, transfer, lease or otherwise dispose of (whether in one
transaction or in a series of transactions) all or substantially all of its
assets (whether now owned or hereafter acquired) to or in favor of any Person,
except:
(a) any Restricted Subsidiary may merge with the Company, provided
that the Company shall be the continuing or surviving corporation, or with any
one or more Restricted Subsidiaries; provided that if any transaction shall be
--------
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between a Restricted Subsidiary and a wholly-owned Restricted Subsidiary, the
wholly-owned Restricted Subsidiary shall be the continuing or surviving
corporation; and
(b) any Restricted Subsidiary may sell all or substantially all of
its assets (upon voluntary liquidation or otherwise), to the Company or another
wholly-owned Restricted Subsidiary.
8.04. Loans and Investments. The Company shall have no direct or
---------------------
indirect Restricted Subsidiaries (other than the Pipeline Subsidiary and the New
Pipeline Subsidiary) without the prior written consent of the Majority Banks, it
being understood that reference herein to "Restricted Subsidiaries" is to the
Pipeline Subsidiary, the New Pipeline Subsidiary and any other Restricted
Subsidiary which may be formed or acquired after the date of this Agreement
after obtaining such consent. The Company shall not purchase or acquire, or
suffer or permit any Restricted Subsidiary to purchase or acquire, or make any
commitment therefor, any capital stock, equity interest, or any obligations or
other securities of, or any interest in, any Person, or make or commit to make
any Acquisitions, or make or commit to make any advance, loan, extension of
credit or capital contribution to or any other Investment in, any Person
including any Affiliate of the Company, except:
(a) Investments in Cash Equivalents and Qualifying Investments in
which the Collateral Agent has a valid, perfected first priority Lien upon under
the Collateral Account Agreement;
(b) extensions of credit in the nature of accounts receivable or
notes receivable arising from the sale or lease of goods or services in the
ordinary course of business;
(c) Investments in Joint Ventures to the extent permitted under
Section 8.09 in an aggregate amount not to exceed $20,000,000;
(d) Investments in publicly traded stocks in an aggregate amount not
exceeding at any time $100,000;
(e) promissory notes received as consideration in connection with
any sale permitted under Sections 8.02(e) and 8.02(f) or in settlement of
claims;
(f) Investments in respect of securities of another Person received
by the Company or any of its Subsidiaries in connection with a plan of
reorganization of such Person or a readjustment of its debts;
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(g) Investments in Long Term Treasury Securities, in Cash
Equivalents and Qualifying Investments pledged pursuant to Section 8.01(m) and
in Qualifying Investments pledged pursuant to Section 8.01(o);
(h) Investments in marketable securities other than those described
in clauses (a), (d), (f) and (g) in an aggregate amount not to exceed
$5,000,000; and
(i) Investments other than those described in clauses (a), (b) and
(d)-(g) in an aggregate amount not exceeding $60,000,000, less the aggregate
amount of Investments outstanding that are described in Section 8.04(c).
8.05. Limitation on Indebtedness. The Company shall not, and shall
--------------------------
not suffer or permit any Subsidiary to, create, incur, assume, suffer to exist,
or otherwise become or remain directly or indirectly liable with respect to, any
Indebtedness, except:
(a) Indebtedness incurred pursuant to this Agreement;
(b) Indebtedness consisting of Contingent Obligations permitted
pursuant to Section 8.08;
(c) Indebtedness existing on the Effective Date and set forth in
Schedule 8.05;
- -------------
(d) Indebtedness of the Company secured by Liens permitted by
Sections 8.01(i), (j) and (m);
(e) Indebtedness of the Company incurred in connection with leases
permitted pursuant to Section 8.10;
(f) Indebtedness of the Company with respect to tax-exempt
industrial development bonds in an aggregate amount not to exceed $75,000,000;
(g) Indebtedness incurred to refinance in whole or in part the
Senior Notes on terms no less favorable to the Company or the Banks than are
contained in the Senior Note Indentures;
(h) Indebtedness incurred by Unrestricted Subsidiaries to the extent
permitted under the Senior Note Indentures and the Holding Note Indentures; and
(i) additional unsecured Indebtedness incurred by the Company in a
total amount outstanding at any time not exceeding $25,000,000; provided, that
--------
the Company shall
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<PAGE>
notify the Administrative Agent of the incurrence of such unsecured Indebtedness
on or before the date it is incurred.
8.06. Transactions with Affiliates. The Company shall not, and shall
----------------------------
not suffer or permit any Restricted Subsidiary to, enter into any transaction,
or enter into or suffer to exist any agreement, with any Affiliate of the
Company, except upon fair and reasonable terms no less favorable to the Company
or such Restricted Subsidiary than the Company or such Restricted Subsidiary
would obtain in a comparable arm's-length transaction with a Person not an
Affiliate of the Company or such Restricted Subsidiary.
8.07. Use of Proceeds.
---------------
The Company shall not, and shall not suffer or permit any Subsidiary
to, use any portion of the Loan proceeds or any Letter of Credit, directly or
indirectly, (i) to purchase or carry Margin Stock, (ii) to repay or otherwise
refinance indebtedness of the Company or others incurred to purchase or carry
Margin Stock, (iii) to extend credit for the purpose of purchasing or carrying
any Margin Stock, or (iv) to acquire any security in any transaction that is
subject to Section 13 or 14 of the Exchange Act.
8.08. Contingent Obligations.
----------------------
The Company shall not, and shall not suffer or permit any Restricted
Subsidiary to, create, incur, assume or suffer to exist any Contingent
Obligations except:
(a) endorsements for collection or deposit in the ordinary course of
business;
(b) Swap Contracts of the Company relating to commodity prices
entered into in the ordinary course of business as bona fide hedging
transactions;
(c) Swap Contracts of the Company relating to interest rates entered
into in the ordinary course of business as bona fide hedging transactions with
Bank Swap Parties; provided, that the aggregate notional amount of all such Swap
--------
Contracts at any time outstanding shall not exceed $100,000,000; and provided,
--------
further that no such Swap Contract shall have a term greater than five years;
- -------
(d) Contingent Obligations of the Company and its Restricted
Subsidiaries existing as of the Effective Date and listed in Schedule 8.08;
-------------
(e) Contingent Obligations with respect to the Letters of Credit;
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(f) Contingent Obligations with respect to Outstanding Eligible LOIs
in an aggregate Effective Amount at any time not exceeding $40,000,000; and
(g) Contingent Obligations of the Company in an amount not exceeding
$300,000 with respect to the limited guaranty by the Company of a working
capital facility for Polymer Asphalt Products, L.C., a Missouri limited
liability company.
8.09. Joint Ventures and Pipeline Subsidiary.
--------------------------------------
(a) The Company shall not, and shall not suffer or permit any
Restricted Subsidiary to, enter into or at any time be a party to any Joint
Venture; provided that the Company or any Restricted Subsidiary may enter into
--------
and be a party to any Joint Venture so long as (i) such Joint Venture is engaged
in the same line of business or in a related line of business as the line of
business engaged in by the Company, (ii) the sum of (A) the aggregate amount of
all Investments made by the Company and its Restricted Subsidiaries in any Joint
Venture on a cumulative basis (other than the aggregate amount of Investments
made by the Company in the Joint Venture relating to the Port Arthur Products
Station (the "PAPS Joint Venture")), (B) the aggregate amount of all loans and
------------------
advances made by the Company and its Restricted Subsidiaries to any Joint
Venture, and (C) the aggregate amount of all Contingent Obligations incurred by
the Company and its Restricted Subsidiaries with respect to any Indebtedness of
all Joint Ventures, shall not exceed in the aggregate $20,000,000, and (iii) the
aggregate amount of all loans, advances and Investments made by the Company and
its Restricted Subsidiaries in the PAPS Joint Venture on a cumulative basis
shall not exceed the amount that is required to be made by the Company pursuant
to the Port Arthur Purchase Agreement as in effect on April 19, 1995 or which is
otherwise required in order to repair and maintain, in the ordinary course of
business, tanks and other equipment in which the Company has an interest.
(b) The Company will not permit the Pipeline Subsidiary to engage in
any business or conduct any activity other than owning and operating all or a
portion of the Port Arthur Facilities. Without limiting the foregoing, the
Company will not permit the Pipeline Subsidiary to (i) incur or remain liable
with respect to any Indebtedness or Contingent Obligation, (ii) suffer to exist
any Lien other than Permitted Liens described in Sections 8.01(c), (d), (e),
(f), (g) and (h), or (iii) make any loan, investment or capital contribution to
any Person.
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8.10. Lease Obligations. The Company shall not, and shall not suffer
-----------------
or permit any Restricted Subsidiary to, create or suffer to exist any
obligations for the payment of rent for any property under lease or agreement to
lease, except for:
(a) leases of the Company and of Restricted Subsidiaries in
existence on the Effective Date and any renewal, extension or refinancing
thereof; and
(b) Capitalized Leases and operating leases entered into by the
Company after the Effective Date in the ordinary course of business; provided
--------
that as of any date of determination the aggregate annual rental payments for
all such Capitalized Leases and operating leases together with the leases
permitted by Section 8.10(a) for the four fiscal quarters following such date of
determination (and not including the fiscal quarter in which such date of
determination occurs) shall not exceed the greater of (i) $35,000,000, and (ii)
15% of EBITDA for the four fiscal quarters immediately preceding (or ending on,
if such date of determination is the end of a fiscal quarter) such date of
determination; provided that if EBITDA decreases after one or more leases have
--------
been entered into in compliance with this Section 8.10(b) and as a result of
such decrease in EBITDA the limitations of clauses (i) and (ii) above are then
exceeded, the Company shall not be deemed to have breached this Section 8.10 by
reason of such decrease in EBITDA, provided that the Company shall not enter
--------
into any new lease until such time as such new lease is then permitted by this
Section 8.10(b).
8.11. Restricted Payments. The Company shall not, and shall not
-------------------
suffer or permit any Subsidiary to, (i) declare or make any dividend payment or
other distribution of assets, properties, cash, rights, obligations or
securities on account of any shares of any class of the Company's capital stock,
(ii) purchase, redeem or otherwise acquire for value any shares of the Company's
capital stock or any warrants, rights or options to acquire such shares, now or
hereafter outstanding or (iii) make any payment (other than a refinancing
thereof permitted under this Agreement) of principal, or interest on, the Senior
Notes prior to the applicable regularly scheduled principal and interest
payment dates; provided, that so long as no Default or Event of Default shall
--------
have occurred and be continuing or would result from such declaration or
payment, the Company may: (a) declare and simultaneously make cash payments and
distributions to Holdings and (b) prepay or redeem out of cash on hand up to
$100,000,000 in aggregate principal amount of Senior Notes prior to the
regularly scheduled payment date therefor; provided, that, in each case, the
--------
Company shall, prior to the making of any such
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<PAGE>
cash payments and distributions, deliver to the Administrative Agent a
certificate of a Responsible Officer demonstrating pro forma compliance with
Section 8.16.
8.12. Change in Business. The Company shall not, and shall not suffer
------------------
or permit any Restricted Subsidiary to, engage in any material line of business
substantially different from those lines of business carried on by the Company
and the Restricted Subsidiaries on the date of this Agreement.
8.13. Accounting Changes. The Company shall not, and shall not suffer
------------------
or permit any of its Subsidiaries to, make any significant change in accounting
treatment or reporting practices, except as required by GAAP, or change the
fiscal year of the Company or of any such Subsidiary.
8.14. ERISA. The Company shall not and shall not suffer or permit any
-----
of its ERISA Affiliates to: (a) engage in a prohibited transaction or violation
of the fiduciary responsibility rules with respect to any Plan which has
resulted or could reasonably be expected to result in liability of the Company
in an aggregate amount in excess of $2,000,000; or (b) engage in a transaction
that could reasonably be expected to be subject to Section 4069 or 4212(c) of
ERISA.
8.15. Collection Banks and Concentration Banks; Cash, Cash Equivalents
----------------------------------------------------------------
and Qualifying Investments.
- --------------------------
(a) The Company and each of its Restricted Subsidiaries will not (i)
establish or maintain any additional Collection Deposit Accounts or any banking
or other account for the deposit of proceeds of the Collateral, or close any
Collection Deposit Account, except in accordance with the terms of the
Concentration Bank Agreement, (ii) close the Concentration Account or establish
any new accounts for the transfer of funds from Collection Deposit Accounts,
except in accordance with the terms of the Concentration Bank Agreement or (iii)
without the prior written consent of the Administrative Agent, establish,
appoint, arrange for or enter into any kind of agreement or understanding with
any entity (other than BT) with respect to such entity's acting as the
Concentration Bank.
(b) The Company and each of its Restricted Subsidiaries will not at
any time have any Cash, Cash Equivalents, Qualifying Investments, proceeds of
the Collateral or any other monies, investments, instruments, securities or cash
equivalents in any banking, investment or other account or in any other place
other than in the Concentration Account, or the Collateral Account; provided
--------
that the Company may (i) have Cash and other proceeds of the
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Collateral received by the Company on any day in any Retail Account in
connection with its retail operations and in the Lockbox in connection with its
wholesale operations so long as such Cash and such other proceeds of the
Collateral in the Retail Accounts and the Lockbox are deposited into the
Collection Deposit Account in accordance with reasonable business practices and
consistent with the Company's past practices, (ii) have Cash and other proceeds
of the Collateral received by the Company on any day in the Collection Deposit
Account so long as such Cash and such other proceeds of the Collateral are
deposited into the Concentration Account on such day or the next day in
accordance with the Collection Bank Agreement, (iii) have Cash in its operating
accounts described in Section 4(a) of the Concentration Account Agreement so
long as the Company disburses such Cash from such operating accounts for valid
business purposes promptly after such Cash is deposited into such operating
accounts, and (iv) pledge Cash or Qualifying Investments to the extent permitted
by Section 8.01(m) or Section 8.01(o).
(c) The Company and each of its Restricted Subsidiaries will not at
any time establish or maintain any commodities accounts other than the
"Accounts" (as defined in the Commodities Account Agreements) in which the
Collateral Agent, on behalf of the Administrative Agent, the Banks and the Bank
Swap Parties, has a perfected security interest.
8.16. Financial Covenants.
-------------------
(a) The Company shall not permit Working Capital to be less than
$150,000,000.
(b) The Company shall not permit the aggregate amount of its Cash,
Cash Equivalents and Qualifying Investments to be less than $50,000,000. For
purposes of this Section 8.16(b), Cash, Cash Equivalents and Qualifying
Investments shall be reduced by the amount of outstanding Loans.
(c) The Company shall not permit the Tangible Net Worth of the
Company and the Restricted Subsidiaries, on a consolidated basis among them, to
be less than $300,000,000.
(d) The Company shall not permit Cumulative Cash Flow to be less
than or equal to zero .
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<PAGE>
8.17. Speculative Trading.
-------------------
The Company shall not, and shall not permit any Subsidiary to (a)
engage in transactions in futures contracts and options to purchase or sell
futures contracts for speculative purposes other than as part of normal business
operations as a risk-management strategy and/or a hedge against changes
resulting from market conditions, or (b) enter into any Swap Contract or any
other similar agreement other than to protect the Company against fluctuations
in interest rates, currency exchange rates or commodity prices.
8.18. Amendments of Certain Documents.
-------------------------------
The Company shall not, and shall not permit any of its Subsidiaries
to, amend or otherwise change the terms of, or waive any rights under, any of
the Senior Notes, any debt instrument entered into in connection with any
refinancing thereof permitted under this Agreement, the Senior Note Indentures,
the Tax Sharing Agreement, the Port Arthur Purchase Agreement or the documents
executed in connection therewith, or the AOC Stock Purchase and Redemption
Agreement if the effect of such amendment, change or waiver is to increase
materially the obligations of the Company thereunder or is otherwise materially
adverse to the Company or the Banks; provided, that the foregoing restriction
---------
shall not apply to any Unrestricted Subsidiary in respect of any debt instrument
entered into in connection with any refinancing described above.
ARTICLE IX.
EVENTS OF DEFAULT
-----------------
9.01. Event of Default.
----------------
Any of the following shall constitute an "Event of Default":
----------------
(a) Non-Payment. The Company fails to pay, (i) when and as required
-----------
to be paid herein, any amount of principal of any Loan, or (ii) within three
days after the same becomes due, any interest, fee or any other amount payable
under any Loan Document, or the Company fails to Cash Collateralize any Letter
of Credit or Outstanding Eligible LOI when and as required to be Cash
Collateralized herein; or
(b) Representation or Warranty. Any representation or warranty by
--------------------------
the Company or any of its Restricted Subsidiaries made or deemed made, in any
Loan
105
<PAGE>
Document, or which is contained in any certificate, document or financial
or other written statement by the Company, any such Restricted Subsidiary, or
any Responsible Officer or any other officer or employee, furnished at any time
under any Loan Document, is incorrect in any material respect on or as of the
date made or deemed made; or
(c) Specific Defaults. The Company fails to perform or observe any
-----------------
term, covenant or agreement contained in any of Sections 7.03(a) or 7.09 or
Article VIII; or
(d) Other Defaults. The Company or any Subsidiary party thereto
--------------
fails to perform or observe (i) any term, covenant or agreement contained in
Sections 7.01(c), 7.02 (e) or 7.03 (other than Section 7.03(a)) and such default
shall continue unremedied for a period of three (3) days or (ii) any other term
or agreement contained in this Agreement or any other Loan Document and such
default shall continue unremedied for a period of 20 days, in each case after
the earlier of (x) the date upon which a Responsible Officer knew or reasonably
should have known of such failure and (y) the date upon which written notice
thereof is given to the Company by the Administrative Agent or any Bank; or
(e) Cross-Default. Holdings, the Company or any of their respective
-------------
Subsidiaries (other than an Unrestricted Subsidiary) (i) fails to make any
payment in respect of any Indebtedness or Contingent Obligation having an
aggregate principal amount (including undrawn committed or available amounts and
including amounts owing to all creditors under any combined or syndicated credit
arrangement) of more than $5,000,000 when due (whether by scheduled maturity,
required prepayment, acceleration, demand, or otherwise) and such failure
continues after the applicable grace or notice period, if any, specified in the
relevant document on the date of such failure; or (ii) fails to perform or
observe any other condition or covenant, or any other event shall occur or
condition exist, under any agreement or instrument relating to any such
Indebtedness or Contingent Obligation, and such failure continues after the
applicable grace or notice period, if any, specified in the relevant document on
the date of such failure if the effect of such failure, event or condition is to
cause, or to permit the holder or holders of such Indebtedness or beneficiary or
beneficiaries of such Indebtedness (or a trustee or agent on behalf of such
holder or holders or beneficiary or beneficiaries) to cause such Indebtedness to
be declared to be due and payable prior to its stated maturity, or such
Contingent Obligation to become payable or cash collateral in respect thereof to
be demanded; or
(f) Insolvency; Voluntary Proceedings. Holdings, the Company or any
---------------------------------
of their respective Subsidiaries (other
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<PAGE>
than any Restricted Subsidiary with total assets of less than $1,000,000 and
other than any Unrestricted Subsidiary) (i) ceases or fails to be Solvent, or
generally fails to pay, or admits in writing its inability to pay, its debts as
they become due, subject to applicable grace periods, if any, whether at stated
maturity or otherwise; (ii) voluntarily ceases to conduct its business in the
ordinary course; (iii) commences any Insolvency Proceeding with respect to
itself; or (iv) takes any action to effectuate or authorize any of the
foregoing; or
(g) Involuntary Proceedings. (i) Any involuntary Insolvency
-----------------------
Proceeding is commenced or filed against Holdings, the Company or any of their
respective Subsidiaries (other than any Restricted Subsidiary with total assets
of less than $1,000,000 and other than any Unrestricted Subsidiary), or any
writ, judgment, warrant of attachment, execution or similar process, is issued
or levied against a substantial part of Holdings', the Company's or such
Restricted Subsidiary's properties, and any such proceeding or petition shall
not be dismissed, or such writ, judgment, warrant of attachment, execution or
similar process shall not be released, vacated or fully bonded within 60 days
after commencement, filing or levy; (ii) Holdings, the Company or any of their
respective Subsidiaries (other than any Restricted Subsidiaries with total
assets of less than $1,000,000 and other than any Unrestricted Subsidiary)
admits the material allegations of a petition against it in any Insolvency
Proceeding, or an order for relief (or similar order under non-US. law) is
ordered in any Insolvency Proceeding; or (iii) Holdings, the Company or any of
their respective Subsidiaries (other than any Restricted Subsidiaries with total
assets of less than $1,000,000 and other than any Unrestricted Subsidiary)
acquiesces in the appointment of a receiver, trustee, custodian, conservator,
liquidator, mortgagee in possession (or agent therefor), or other similar Person
for itself or a substantial portion of its property or business; or
(h) ERISA. (i) An ERISA Event shall occur with respect to a Pension
-----
Plan or Multiemployer Plan which has resulted or could reasonably be expected to
result in liability of the Company under Title IV of ERISA to the Pension Plan,
Multiemployer Plan or the PBGC in an aggregate amount in excess of $5,000,000
(or in an aggregate amount in excess of $2,000,000 if such liability is secured
by or could reasonably be expected to be secured by a Lien on the assets of the
Company); (ii) the aggregate amount of Unfunded Pension Liability among all
Pension Plans at any time exceeds $5,000,000; or (iii) the Company or any ERISA
Affiliate shall fail to pay when due, after the expiration of any applicable
grace period, any installment payment with respect to its withdrawal liability
under Section 4201 of
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ERISA under a Multiemployer Plan in an aggregate amount in excess of $1,000,000;
or
(i) Monetary Judgments. One or more non-interlocutory judgments,
------------------
non-interlocutory orders, decrees or arbitration awards is entered against the
Company or any Restricted Subsidiary involving in the aggregate a liability (to
the extent not covered by independent third-party insurance as to which the
insurer does not dispute coverage) as to any single or related series of
transactions, incidents or conditions, of $5,000,000 or more, and the same shall
remain unsatisfied, unvacated and unstayed pending appeal for a period of 10
days after the entry thereof; or
(j) Non-Monetary Judgments. Any non-monetary judgment, order or
----------------------
decree is entered against the Company or any Restricted Subsidiary which does or
would reasonably be expected to have a Material Adverse Effect, and there shall
be any period of 10 consecutive days during which a stay of enforcement of such
judgment or order, by reason of a pending appeal or otherwise, shall not be in
effect; or
(k) Change of Control. There occurs any Change of Control; or
-----------------
(l) Loss of Licenses. Any Governmental Authority revokes or fails to
----------------
renew any license, permit or franchise of the Company or any Restricted
Subsidiary, or the Company or any Restricted Subsidiary for any reason loses any
license, permit or franchise, or the Company or any Restricted Subsidiary
suffers the imposition of any restraining order, escrow, suspension or impound
of funds in connection with any proceeding (judicial or administrative) with
respect to any license, permit or franchise, in each case to the extent that
such revocation, such failure of renewal, such loss, or such imposition could
reasonably be expected to have a Material Adverse Effect; or
(m) Collateral.
----------
(i) any provision of any Collateral Document shall for any
reason cease to be valid and binding on or enforceable against the Company
or any Subsidiary party thereto and the effect thereof is to prevent the
Collateral Agent on behalf of the Administrative Agent, the Banks and the
Bank Swap Parties from realizing the practical benefits afforded by or
purported to be afforded by such Collateral Document or the Company or any
Subsidiary shall so state in writing or bring an action to limit its
obligations or liabilities thereunder; or
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<PAGE>
(ii) any Collateral Document shall for any reason (other than
pursuant to the terms thereof) cease to create a valid security interest in the
Collateral purported to be covered thereby or such security interest shall for
any reason cease to be a perfected and first priority security interest subject
only to Permitted Liens (other than solely due to the action or inaction of the
Collateral Agent with respect to matters involving priority or perfection); or
(n) Holdings amends or otherwise changes the terms of, or waives any
rights under, any of the Holdings Note Indentures or the Holdings Notes, and the
effect of such amendment, change or waiver is to increase materially the
obligations of Holdings or the Company or is otherwise materially adverse to
Holdings, the Company or the Banks; or
(o) Holdings incurs on or after the Effective Date any secured or
unsecured Indebtedness in the aggregate in excess of $25,000,000;
provided, that the incurrence of Indebtedness by Holdings of up to
--------
$150,000,000 plus any applicable premiums and expenses (or, if such Indebtedness
is incurred in the form of zero-coupon notes, Indebtedness having net proceeds
to Holdings of up to $150,000,000 plus any applicable premiums and expenses) on
terms no less favorable to Holdings or the Banks than the terms of the Holdings
Note Indenture dated as of December 1, 1995 as supplemented and the Holdings
Notes issued thereunder (collectively, the "10.875% Holdings Notes") (or, if
such Indebtedness is incurred in the form of zero-coupon notes, the terms of the
Holdings Note Indenture dated as of May 15, 1993, as supplemented and the Senior
Secured Zero Coupon Notes issued thereunder) in each case in conjunction with
the substantially concurrent repayment, repurchase or redemption in full of the
Senior Secured Zero Coupon Notes due 2000, Series A of Holdings shall not be an
Event of Default under clause (n) or (o) above; and provided further that the
incurrence of Indebtedness by Holdings of up to $225,000,000, plus any
applicable premiums and expenses, on terms no less favorable to the Company or
the Banks than the terms of the 10.875% Holdings Notes, in conjunction with the
repayment, repurchase or redemption in full (or deposit in full for such
purpose) of the 10-1/2% Notes, shall not be an Event of Default under clause (n)
or (o) above (it being understood that the Indebtedness referred to in this
provided further clause may only be incurred by Holdings to the extent the
Company has not itself refinanced the 10-1/2% Notes in accordance with Section
8.05(g) (except through borrowings from Holdings of the proceeds of such
Indebtedness)).
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9.02. Remedies.
--------
If any Event of Default occurs, the Administrative Agent shall, at the
request of, or may, with the consent of, the Majority Banks,
(a) declare the commitment of each Bank to make Loans and any
obligation of any Issuing Bank to Issue Letters of Credit to be terminated,
whereupon such commitments and such obligations shall be terminated;
(b) declare an amount equal to the maximum aggregate amount that is
or at any time thereafter may become available for drawing under any outstanding
Letters of Credit (whether or not any beneficiary shall have presented, or shall
be entitled at such time to present, the drafts or other documents required to
draw under such Letters of Credit) and any Outstanding Eligible LOIs to be
immediately due and payable, and declare the unpaid principal amount of all
outstanding Loans, all interest accrued and unpaid thereon, and all other
amounts owing or payable hereunder or under any other Loan Document to be
immediately due and payable, without presentment, demand, protest or other
notice of any kind, all of which are hereby expressly waived by the Company;
(c) require the Company to immediately deposit with the
Administrative Agent for each Letter of Credit then outstanding, Cash or Cash
Equivalents in an amount equal to 100% of the greatest amount drawable
thereunder.
(d) exercise on behalf of itself and the Banks all rights and
remedies available to it and the Banks under the Loan Documents or applicable
law;
provided, however, that upon the occurrence of any event specified in Section
- -------- -------
(f) or (g) of Section 9.01 (in the case of clause (i) of Section (g) upon the
expiration of the 60- day period mentioned therein), the obligation of each Bank
to make Loans and any obligation of any Issuing Bank to Issue Letters of Credit
shall automatically terminate and the unpaid principal amount of all outstanding
Loans and all interest and other amounts as aforesaid shall automatically become
due and payable without further act of the Administrative Agent, any Issuing
Bank or any Bank.
9.03. Rights Not Exclusive.
--------------------
The rights provided for in this Agreement and the other Loan Documents
are cumulative and are not exclusive of any other rights, powers, privileges or
remedies provided by law or in equity, or under any other instrument, document
or agreement now existing or hereafter arising.
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ARTICLE X.
THE ADMINISTRATIVE AGENT AND THE COLLATERAL AGENT
-------------------------------------------------
10.01. Appointment of Agent.
--------------------
(a) Each Bank hereby designates BT as Administrative Agent to act as
herein specified. Each Bank hereby irrevocably authorizes, and each holder of
any Note or participation in any Letter of Credit by the acceptance of a Note or
participation shall be deemed irrevocably to authorize, the Administrative Agent
to take such action on its behalf under the provisions of this Agreement and the
Notes and any other instruments and agreements referred to herein and to
exercise such powers and to perform such duties hereunder and thereunder as are
specifically delegated to or required of the Administrative Agent by the terms
of this Agreement and thereof and such other powers as are reasonably incidental
thereto. The Administrative Agent shall designate the Collateral Agent to hold
all Collateral and shall itself hold all payments of principal, interest, fees,
charges and expenses received pursuant to any Loan Document for the benefit of
itself and the Banks to be distributed as provided herein. The Administrative
Agent may perform any of its duties hereunder by or through its agents or
employees.
(b) The provisions of this Article 10 are solely for the benefit of
the Administrative Agent, the Collateral Agent and the Banks, and the Company
shall not have any rights as a third party beneficiary of any of the provisions
of this Agreement (other than Section 10.09). In performing its functions and
duties under this Agreement, the Administrative Agent and the Collateral Agent
shall act solely as agent of the Banks and do not assume and shall not be deemed
to have assumed any obligation toward or relationship of agency or trust with or
for the Company or any of its Subsidiaries.
10.02. Nature of Duties of Administrative Agent. The Administrative
----------------------------------------
Agent shall have no duties or responsibilities except those expressly set forth
in the Loan Documents. Neither the Administrative Agent nor any of its
officers, directors, employees or agents shall be liable for any action taken or
omitted by it as such hereunder or in connection herewith, unless caused by its
or their gross negligence or willful misconduct. The duties of the
Administrative Agent shall be mechanical and administrative in nature; the
Administrative Agent shall not have by reason of the Loan Documents a fiduciary
relationship in respect of any Bank; and nothing in the Loan Documents,
expressed or implied, is intended to or shall be so construed as to
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impose upon the Administrative Agent any obligations in respect of the Loan
Documents except as expressly set forth herein or therein.
10.03. Lack of Reliance on Agent Related Persons.
-----------------------------------------
(a) Independently and without reliance upon any Agent-Related Persons
each Bank, to the extent it deems appropriate, has made and shall continue to
make (i) its own independent investigation of the financial or other condition
and affairs of the Company and its Subsidiaries in connection with the taking or
not taking of any action in connection herewith and (ii) its own appraisal of
the creditworthiness of each of the Company and its Subsidiaries, and, except as
expressly provided in this Agreement, no Agent-Related Person shall have any
duty or responsibility, either initially or on a continuing basis, to provide
any Bank with any credit or other information with respect thereto, whether
coming into its possession before the making of the Loans or the issuance of any
Letter of Credit or at any time or times thereafter.
(b) No Agent-Related Person shall be responsible to any Bank for any
recitals, statements, information, representations or warranties herein or in
any document, certificate or other writing delivered in connection herewith or
for the execution, effectiveness, genuineness, validity, enforceability,
collectibility, priority or sufficiency of any Loan Document or the financial or
other condition of the Company or its Subsidiaries. No Agent-Related Person
shall be required to make any inquiry concerning either the performance or
observance of any of the terms, provisions or conditions of any Loan Document,
or the financial condition of the Company or any of its Subsidiaries, or the
existence or possible existence of any Default or Event of Default, unless
specifically requested to do so in writing by any Bank.
(c) For purposes of determining compliance with the conditions
specified in Section 5.01, each Bank shall be deemed to have consented to,
------------
approved or accepted or to be satisfied with each document or other matter
required thereunder to be consented to or approved by or acceptable or
satisfactory to such Bank unless an officer of the Administrative Agent
responsible for the transactions contemplated by the Loan Documents shall have
received written notice from such Bank prior to the Effective Date specifying
its objection thereto and either such objection shall not have been withdrawn by
written notice to the Administrative Agent to that effect or such Bank shall not
have made available to the Administrative Agent the Bank's ratable portion of
the outstanding Loans.
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10.04. Certain Rights of the Administrative Agent. The
------------------------------------------
Administrative Agent shall have the right to request instructions from the
Majority Banks at any time. If the Administrative Agent shall request
instructions from the Majority Banks or Banks, as applicable, with respect to
any act or action (including the failure to act) in connection with any Loan
Document, the Administrative Agent shall be entitled to refrain from such act or
taking such action unless and until the Administrative Agent shall have received
instructions from the Majority Banks, and the Administrative Agent shall not
incur liability to any Person by reason of so refraining. Without limiting the
foregoing, no Bank shall have any right of action whatsoever against the
Administrative Agent as a result of the Administrative Agent acting or
refraining from acting hereunder in accordance with the instructions of the
Majority Banks.
10.05. Reliance by Administrative Agent. The Administrative Agent
--------------------------------
shall be entitled to rely, and shall be fully protected in relying, upon any
note, writing, resolution, notice, statement, certificate, telex, teletype or
telecopier message, cablegram, radiogram, order or other documentary,
teletransmission or telephone message believed by it to be genuine and correct
and to have been signed, sent or made by the proper person. The Administrative
Agent may consult with legal counsel (including counsel for the Company with
respect to matters concerning the Company), 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.
10.06. Indemnification of Agent-Related Persons. To the extent any
----------------------------------------
Agent-Related Person is not reimbursed and indemnified by the Company, each Bank
will reimburse and indemnify such Agent-Related Person, in proportion to its
respective Commitment, for and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses
(including attorney costs) or disbursements of any kind or nature whatsoever
which may be imposed on, incurred by or asserted against such Agent-Related
Person in performing its duties hereunder, in any way relating to or arising out
of this Agreement, provided that no Bank shall be liable for any portion of such
--------
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements resulting from the gross negligence or willful
misconduct of such Agent-Related Person.
10.07. Administrative Agent in Individual Capacity. With respect to
-------------------------------------------
its obligation to lend under this Agreement, the Loans made by it and the Notes
issued to it, and its participation in Letters of Credit issued hereunder,
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BT shall have the same rights and powers hereunder as any other Bank or holder
of a Note or participation interests and may exercise the same as though it was
not performing the duties specified herein; and the terms "Banks," "Majority
Banks," "holders of Notes," or any similar terms shall, unless the context
clearly otherwise indicates, include the Administrative Agent in its individual
capacity. BT may accept deposits from, lend money to, acquire equity interests
in, and generally engage in any kind of banking, trust, financial advisory or
other business with the Company or any Affiliate of the Company as if it were
not performing the duties specified herein, and may accept fees and other
consideration from the Company for services in connection with the Loan
Documents and otherwise without having to account for the same to the Banks.
10.08. Holders of Notes. The Administrative Agent may deem and treat
----------------
the payee of any Note as the owner thereof for all purposes of the Loan
Documents unless and until a written notice of the assignment or transfer
thereof shall have been filed with the Administrative Agent. Any request,
authority or consent of any Person who, at the time of making such request or
giving such authority or consent, is the holder of any Note, shall be conclusive
and binding on any subsequent holder, transferee or assignee of such Note or of
any Note or Notes issued in exchange therefor.
10.09. Successor Administrative Agent.
------------------------------
(a) The Administrative Agent may, upon thirty (30) Business Days'
notice to the Banks and the Company, resign at any time (effective upon the
appointment of a successor Administrative Agent pursuant to the provisions of
this Section 10.09 by giving written notice thereof to the Banks and the
Company. Such resignation of the Administrative Agent shall also operate as a
resignation of BT as an Issuing Bank (in respect of any Letters of Credit to be
issued after such resignation) and as Collateral Agent. Upon any such
resignation, the Majority Banks shall have the right, upon five (5) days' notice
and approval by the Company (which approval shall not be unreasonably withheld
or delayed), to appoint a successor Administrative Agent which shall also serve
as a successor Issuing Bank and successor Collateral Agent. If no successor
Administrative Agent (i) shall have been so appointed by the Majority Banks, and
(ii) shall have accepted such appointment, within thirty (30) days after the
retiring Administrative Agent's giving of notice of resignation then, upon five
(5) days notice, the retiring Administrative Agent may, on behalf of the Banks,
appoint a successor Administrative Agent, which shall also serve as a successor
Issuing Bank and successor Collateral Agent.
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(b) Upon the acceptance of any appointment as Administrative Agent
hereunder by a successor Administrative Agent, such successor Administrative
Agent shall thereupon succeed to and become vested with all the rights, powers,
privileges and duties of the retiring Administrative Agent, and the retiring
Administrative Agent shall be discharged from its duties and obligations under
this Agreement. After any retiring Administrative Agent's resignation hereunder
as Administrative Agent, the provisions of this Article 10 shall inure to its
----------
benefit as to any actions taken or omitted to be taken by it while it was
Administrative Agent under this Agreement.
(c) In the event of a material breach by the Administrative Agent of
its duties hereunder, the Administrative Agent may be removed by the Majority
Banks (other than the Administrative Agent in its individual capacity and
without giving effect to any Loans or Commitments made by the Administrative
Agent in its individual capacity) for cause and the provisions of this Section
-------
10.09 shall apply to the appointment of a successor Administrative Agent.
- -----
Removal of BT as Administrative Agent shall also operate as a removal of BT as
an Issuing Bank and Collateral Agent.
10.10. Collateral Matters.
------------------
(a) Each Bank authorizes and directs the Collateral Agent to enter
into the Collateral Documents for the benefit of the Banks. Each Bank hereby
agrees, and each holder of any Note by the acceptance thereof will be deemed to
agree, that, except as otherwise set forth herein, any action taken by the
Majority Banks in accordance with the provisions of this Credit Agreement or the
Collateral Documents, and the exercise by the Majority Banks of the powers set
forth herein or therein, together with such other powers as are reasonably
incidental thereto, shall be authorized and binding upon all of the Banks. The
Administrative Agent and the Collateral Agent are hereby authorized on behalf of
all of the Banks, without the necessity of any notice to or further consent from
any Bank, from time to time prior to an Event of Default, to take any action
with respect to any Collateral or Collateral Documents which may be necessary to
perfect and maintain perfected the security interest in and liens upon the
Collateral granted pursuant to the Collateral Documents.
(b) The Banks hereby authorize the Administrative Agent and the
Collateral Agent, at their option and in their discretion, to release any Lien
granted to or held by the Collateral Agent upon any Collateral (i) upon
termination of the Commitments and payment in full in cash and satisfaction of
all of the Obligations at any time
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arising under or in respect of this Agreement or the Loan Documents or the
transactions contemplated hereby or thereby (including any required Cash
Collateralization), (ii) constituting property being sold or disposed of upon
receipt of the proceeds of such sale required (if applicable) to be delivered to
the Administrative Agent if the Company certifies to the Administrative Agent
that the sale or disposition is made in compliance with Section 8.02 (and the
Administrative Agent may rely conclusively on any such certificate, without
further inquiry) or (iii) if approved, authorized or ratified in writing by the
Majority Banks, unless such release is required to be approved by all of the
Banks hereunder. Upon request by the Administrative Agent at any time, the Banks
will confirm in writing the Administrative Agent's and the Collateral Agent's
authority or to release particular types or items of Collateral pursuant to this
Section 10.10.
(c) Upon any sale and transfer of Collateral which is expressly
permitted pursuant to the terms of this Agreement, or consented to in writing by
the Majority Banks or all of the Banks, as applicable and upon at least five (5)
Business Days, prior written request by the Company, the Collateral Agent shall
(and is hereby irrevocably authorized by the Banks to) execute such documents as
may be necessary to evidence the release of the Liens granted to the Collateral
Agent for the benefit of the Administrative Agent and the Banks herein or
pursuant to this Agreement upon the Collateral that was sold or transferred;
provided that (i) the Collateral Agent shall not be required to execute any such
- --------
document on terms which, in the Collateral Agent's opinion, would expose the
Collateral Agent to liability or create any obligation or entail any consequence
other than the release of such Liens without recourse or warranty and (ii) such
release shall not in any manner discharge, affect or impair the Obligations or
any Liens upon (or obligations of the Company or any of its Restricted
Subsidiaries in respect of) all interests retained by the Company or any of its
Restricted Subsidiaries, including (without limitation) the proceeds of the
sale, all of which shall continue to constitute part of the Collateral. In the
event of any sale or transfer of collateral, or any foreclosure with respect to
any of the collateral, the Administrative Agent and the Collateral Agent shall
be authorized to deduct all of the expenses reasonably incurred from the
proceeds of any such sale, transfer or foreclosure.
(d) The Administrative Agent and the Collateral Agent shall have no
obligation whatsoever to the Banks or to any other Person to assure that the
Collateral exists or is owned by the Company or any of its Subsidiaries or is
cared for, protected or insured or that the Liens granted to the Collateral
Agent herein or pursuant to this Agreement have
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been properly or sufficiently or lawfully created, perfected, protected or
enforced or are entitled to any particular priority, or to exercise or to
continue exercising at all or in any manner or under any duty of care,
disclosure or fidelity any of the rights, authorities and powers granted or
available to the Administrative Agent and the Collateral Agent in this Section
10.10 or to the Collateral Agent in any of the Collateral Documents, it being
understood and agreed that in respect of the Collateral, or any act, omission or
event related thereto, the Administrative Agent and the Collateral Agent may act
in any manner they may deem appropriate in their sole discretion, given the
Administrative Agent's and the Collateral Agent's own interest in the Collateral
as one of the Banks and that the Administrative Agent and the Collateral Agent
shall have no duty or liability whatsoever to the Banks, except for their gross
negligence or willful misconduct; provided that the Administrative Agent has
--------
prepared for the Company's execution financing statements on form UCC-1 or UCC-3
in each jurisdiction in which the Company has advised the Administrative Agent
that it has Collateral and has arranged for appropriate recordation thereof in
each such jurisdiction.
10.11. Actions with Respect to Default. In addition to the
-------------------------------
Administrative Agent's right to take actions on its own accord as permitted
under this Agreement, the Administrative Agent shall take such action with
respect to a Default or Event of Default as shall be directed by the Majority
Banks; provided that until the Administrative Agent shall have received such
--------
directions, the Administrative Agent shall (but shall not be obligated to) take
such action, or refrain from taking such action, with respect to such Default or
Event of Default as it shall deem advisable and in the best interests of the
Banks.
10.12. Delivery of Information. The Administrative Agent shall not
-----------------------
be required to deliver to any Bank originals or copies of any documents,
instruments, notices, communications or other information received by the
Administrative Agent from the Company, Holdings, any of their respective
Subsidiaries, the Majority Banks, any Bank or any other Person under or in
connection with any Loan Document except (i) as specifically provided in any
Loan Document and (ii) as specifically requested from time to time in writing by
any Bank with respect to a specific document, instrument, notice or other
written communication received by and in the possession of the Administrative
Agent at the time of receipt of such request and then only in accordance with
such specific request.
10.13. Liability of Agent-Related Persons. None of the Agent-Related
----------------------------------
Persons shall (i) be liable for any
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action taken or omitted to be taken by any of them under or in connection with
any Loan Document or the transactions contemplated thereby (except for its own
gross negligence or willful misconduct), or (ii) be responsible in any manner to
any of the Banks for any recital, statement, representation or warranty made by
the Company or any of its Subsidiaries or Affiliates, or any officer thereof,
contained in any Loan Document, or in any certificate, report, statement or
other document referred to or provided for in, or received by any Agent-Related
Person under or in connection with any Loan Document, or for the value of or
title to any Collateral, or the validity, effectiveness, genuineness,
enforceability or sufficiency of any Loan Document, or for any failure of the
Company or any other party to any Loan Document to perform its obligations
hereunder or thereunder. No Agent-Related Person shall be under any obligation
to any Bank to ascertain or to inquire as to the observance or performance of
any of the agreements contained in, or conditions of, any Loan Document, or to
inspect the properties, books or records of the Company or any of the Company's
Subsidiaries or Affiliates.
10.14. Agents Other Than Administrative Agent. None of the Banks
--------------------------------------
identified on the facing page or signature pages of this Agreement as the
Syndication Agent or as the Documentation Agent shall have any obligation,
liability, responsibility or duty under this Agreement other than, in the case
of the Documentation Agent and the Syndication Agent, those applicable to all
Banks as such. Each Bank acknowledges that it has not relied, and will not
rely, on any of the Banks so identified in deciding to enter into this Agreement
or in taking or not taking action hereunder.
ARTICLE XI.
MISCELLANEOUS
-------------
11.01. Amendments and Waivers.
----------------------
No amendment or waiver of any provision of any Loan Document, and no
consent with respect to any departure by the Company or any of its Subsidiary
therefrom, shall be effective unless the same shall be in writing and signed by
the Majority Banks (or by the Administrative Agent at the written request of the
Majority Banks) and the Company and acknowledged by the Administrative Agent,
and then any such waiver or consent shall be effective only in the specific
instance and for the specific purpose for which given; provided that no such
--------
waiver, amendment, or consent shall, unless in writing and signed by all the
Banks and the Company and acknowledged by the Administrative Agent, do any of
the following:
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(a) increase or extend the Commitment of any Bank (or reinstate any
Commitment terminated pursuant to Section 9.02(a));
(b) postpone or delay any date fixed by this Agreement or any other
Loan Document for any payment of principal, interest, fees or other amounts due
to the Banks (or any of them) hereunder or under any other Loan Document;
(c) reduce the principal of, or the rate of interest specified herein
on any Loan, or (subject to clause (ii) below) any fees or other amounts payable
hereunder or under any other Loan Document;
(d) change the percentage of the Commitments or of the aggregate
unpaid principal amount of the Loans which is required for the Banks or any of
them to take any action hereunder; or
(e) amend this Section, or Section 4.11, or any provision herein
providing for consent or other action by all Banks;
(f) release a material portion of the Collateral except as otherwise
may be provided in the Collateral Documents (it being understood that all or
substantially all of the Collateral relating to any business unit of the Company
shall be deemed to be a material portion of the Collateral);
(g) increase the percentages set forth in the definition of
"Borrowing Base" above the percentages set forth therein on the Effective Date;
and provided further, that (i) no amendment, waiver or consent shall, unless in
-------- -------
writing and signed by the applicable Issuing Bank in addition to the Majority
Banks or all the Banks, as the case may be, affect the rights or duties of the
applicable Issuing Bank under this Agreement or any L/C-Related Document
relating to any Letter of Credit Issued or to be Issued by it, (ii) no
amendment, waiver or consent shall, unless in writing and signed by the
Administrative Agent in addition to the Majority Banks or all the Banks, as the
case may be, affect the rights or duties of the Administrative Agent under any
Loan Document, (iii) the Fee Letters may be amended, or rights or privileges
thereunder waived, in a writing executed by the parties thereto and (iv) no
amendment, waiver or consent shall, unless in writing and signed by the
Administrative Agent, the Syndication Agent, the Documentation Agent and the
Majority Banks, as the case may be, have the effect of otherwise increasing the
Borrowing Base (other than any increase that is solely the result of an action
taken
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unilaterally by the Administrative Agent that reverses a prior action
unilaterally taken by the Administrative Agent (so long as the taking of such
first action was permitted under this Agreement)).
11.02. Notices.
-------
(a) All notices, requests and other communications shall be in
writing (including, unless the context expressly otherwise provides, by
facsimile transmission) or, in the case of Letters of Credit, electronically,
provided that any matter transmitted by the Company by facsimile (i) shall be
- --------
immediately confirmed by a telephone call to the recipient at the number
specified on the signature page of such Bank attached to this Agreement, and
(ii) shall be followed promptly by delivery of a hard copy original thereof) and
mailed, faxed or delivered, to the address or facsimile number specified for
notices on the signature page of such Bank attached to this Agreement; or, as
directed to the Company or the Administrative Agent, to such other address as
shall be designated by such party in a written notice to the other parties, and
as directed to any other party, at such other address as shall be designated by
such party in a written notice to the Company and the Administrative Agent.
(b) All such notices, requests and communications shall, when
transmitted by overnight delivery or electronically, or faxed, be effective when
delivered for overnight (next-day) delivery, transmitted electronically or
transmitted in legible form by facsimile machine, respectively, or if mailed,
upon the third Business Day after the date deposited into the U.S. mail, or if
delivered, upon delivery; except that notices pursuant to Article II, III or X
shall not be effective until actually received (by overnight delivery,
electronically, fax or mail) by the Administrative Agent or the Collateral
Agent, as the case may be, and notices pursuant to Article III to any Issuing
Bank shall not be effective until actually received (by overnight delivery,
electronically, fax or mail) by such Issuing Bank and the Administrative Agent
at the address specified for such "Issuing Bank" and the Administrative Agent on
the applicable signature page of this Agreement.
(c) Any agreement of the Administrative Agent, the Collateral Agent
and the Banks herein to receive certain notices by telephone or facsimile is
solely for the convenience and at the request of the Company. The
Administrative Agent, the Collateral Agent and the Banks shall be entitled to
rely on the authority of any Person purporting to be a Person authorized by the
Company to give such notice and the Administrative Agent, the Collateral
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Agent and the Banks shall not have any liability to the Company or other Person
on account of any action taken or not taken by the Administrative Agent, the
Collateral Agent or the Banks in reliance upon such telephonic or facsimile
notice. The obligation of the Company to repay the Loans and L/C Obligations
shall not be affected in any way or to any extent by any failure by the
Administrative Agent, the Collateral Agent and the Banks to receive written
confirmation of any telephonic or facsimile notice or the receipt by the
Administrative Agent, the Collateral Agent and the Banks of a confirmation which
is at variance with the terms understood by the Administrative Agent, the
Collateral Agent and the Banks to be contained in the telephonic or facsimile
notice.
11.03. No Waiver: Cumulative Remedies.
------------------------------
No failure to exercise and no delay in exercising, on the part of the
Administrative Agent, the Collateral Agent or any Bank, any right, remedy, power
or privilege hereunder, shall operate as a waiver thereof; nor shall any single
or partial exercise of any right, remedy, power or privilege hereunder preclude
any other or further exercise thereof or the exercise of any other right,
remedy, power or privilege.
11.04. Indemnity.
---------
(a) Whether or not the transactions contemplated hereby are
consummated, the Company shall indemnify, defend and hold the Agent-Related
Persons, each Issuing Bank and each Bank and each of their respective officers,
directors, employees, counsel, agents and attorneys-in-fact (each, an
"Indemnified Person") harmless from and against any and all liabilities,
- -------------------
obligations, losses, damages, penalties, actions, judgments, suits, costs,
charges, expenses and disbursements (including fees and expenses of any law firm
or external counsel) of any kind or nature whatsoever which may at any time
(including at any time following repayment of the Loans, the termination of the
Commitments and the Letters of Credit and the termination, resignation or
replacement of the Administrative Agent or replacement of any Bank) be imposed
on, incurred by or asserted against any such Person in any way relating to or
arising out of this Agreement or any document contemplated by or referred to
herein, or the transactions contemplated hereby, or any action taken or omitted
by any such Person under or in connection with any of the foregoing, including
with respect to any investigation, litigation or proceeding (including any
Insolvency Proceeding or appellate proceeding) related to or arising out of any
Loan Document or the Loans or Letters of Credit or the use of the proceeds
thereof, whether or not any Indemnified Person is a party thereto
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(all the foregoing, collectively, the "Indemnified Liabilities"); provided that
----------------------- --------
the Company shall have no obligation hereunder to any Indemnified Person with
respect to Indemnified Liabilities resulting primarily from the gross negligence
or willful misconduct of such Indemnified Person. The agreements in this Section
shall survive payment of all other Obligations.
(b) (i) The Company shall indemnify, defend and hold harmless each
Indemnified Person, from and against any and all claims, liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
charges, expenses or disbursements (including reasonable (giving due regard to
prevailing circumstances) fees and expenses of any law firm or external counsel
and the allocated cost of internal environmental audit or review services),
which may be incurred by or asserted against such Indemnified Person in
connection with or arising out of any pending or threatened investigation,
litigation or proceeding, or any action taken by any Person, with respect to any
Environmental Claim arising out of or related to any property subject to a
mortgage in favor of the Collateral Agent or any Bank. No action taken by legal
counsel chosen by the Administrative Agent, the Collateral Agent or any Bank in
defending against any such investigation, litigation or proceeding or requested
remedial, removal or response action shall vitiate or in any way impair the
Company's obligation and duty hereunder to indemnify and hold harmless the
Administrative Agent, the Collateral Agent and each Bank.
(ii) In no event shall any site visit, observation, or testing
by the Administrative Agent, the Collateral Agent or any Bank (or any contractee
of the Administrative Agent, the Collateral Agent or any Bank) be deemed a
representation or warranty by the Administrative Agent, the Collateral Agent or
any Bank that Hazardous Materials are or are not present in, on, or under, the
site, or that there has been or shall be compliance with any Environmental Law.
Neither the Company nor any other Person is entitled to rely on any site visit,
observation, or testing by the Administrative Agent, the Collateral Agent or any
Bank. Neither the Administrative Agent, the Collateral Agent nor any Bank owes
any duty of care to protect the Company or any other Person against, or to
inform the Company or any other party of, any Hazardous Materials or any other
adverse condition affecting any site or property. Neither the Administrative
Agent, the Collateral Agent nor any Bank shall be obligated to disclose to the
Company or any other Person any report or findings made as a result of, or in
connection with, any site visit, observation, or testing by the Administrative
Agent, the Collateral Agent or any Bank. The Company hereby acknowledges,
represents and
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warrants that the Company and its Subsidiaries are solely responsible for the
management and operation of the Facilities and that the financial covenants and
capital expenditure covenants set forth herein have been set, by mutual
agreement based upon financial information provided by the Company, at levels
the Company has determined, based on information known to the Company at this
time, will permit the expenditure of such amounts as are necessary to insure
that the Facilities comply with applicable Environmental Laws at all times.
Notwithstanding such covenants, but without in any way limiting the rights and
remedies of the Banks hereunder, the Company and its Subsidiaries shall have the
sole responsibility for ensuring that the Facilities comply with applicable
Environmental Laws and shall remain obligated to make all expenditures necessary
to ensure such compliance.
(c) Survival; Defense. The obligations in this Section shall survive
-----------------
payment of all other Obligations. At the election of any Indemnified Person,
the Company shall defend such Indemnified Person using legal counsel
satisfactory to such Indemnified Person in such Person's sole discretion, at the
sole cost and expense of the Company. All amounts owing under this Section
shall be paid within 30 days after demand.
11.05. Marshalling; Payments Set Aside.
-------------------------------
Neither the Administrative Agent, the Collateral Agent, nor the Banks
shall be under any obligation to marshall any assets in favor of the Company or
any other Person or against or in payment of any or all of the Obligations. To
the extent that the Company makes a payment to the Administrative Agent or the
Banks, or the Administrative Agent or the Banks exercise their right of set-off,
and such payment or the proceeds of such set-off or any part thereof are
subsequently invalidated, declared to be fraudulent or preferential, set aside
or required (including pursuant to any settlement entered into by the
Administrative Agent or such Bank in its discretion) to be repaid to a trustee,
receiver or any other party, in connection with any Insolvency Proceeding or
otherwise, then (a) to the extent of such recovery the obligation or part
thereof originally intended to be satisfied shall be revived and continued in
full force and effect as if such payment had not been made or such set-off had
not occurred, and (b) each Bank severally agrees to pay to the Administrative
Agent upon demand its pro rata share of any amount so recovered from or repaid
by the Administrative Agent.
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11.06. Successors and Assigns.
----------------------
The provisions of this Agreement shall be binding upon and inure to
the benefit of the parties to this Agreement and their respective successors and
assigns subject to Section 11.07.
11.07. Assignments, Participations, etc.
---------------------------------
(a) Company Assignment. The Company shall not assign this Agreement,
------------------
or any rights or obligations hereunder, without the prior written consent of the
Administrative Agent and the Banks; any assignment in violation of the foregoing
shall be void.
(b) Bank Assignments. Each Bank may assign to one or more banks or
----------------
other financial institutions all or a portion of its rights and obligations
under this Agreement, the Notes and the other Loan Documents, with the consent
of the Administrative Agent, the Issuing Banks, and, so long as there is no
Default or Event of Default, the Company, which consent shall not be
unreasonably withheld, and upon execution and delivery to the Administrative
Agent, for its acceptance and recording in the Register (as defined below), of
an agreement in substantially the form of Exhibit H (an "Assignment and
Assumption Agreement"), together with surrender of any Note or Notes subject to
such assignment and a processing and recordation fee of $3,000 payable to the
Administrative Agent for its account. No such assignment shall be for less than
$5,000,000 of the combined Commitments unless it is to another Bank. (This
Section does not apply to branches and Affiliates of a Bank, it being understood
that a Bank may make, carry or transfer Loans at or for the account of any of
its branch offices or Affiliates without consent of the Administrative Agent.)
Nothing in this Section 11.07 shall prevent or prohibit any Bank from pledging
its rights under this Agreement and/or its Loans, Notes and/or Letters of Credit
hereunder to a Federal Reserve Bank in support of borrowings made by such Bank
from such Federal Reserve Bank, provided that no such pledge shall at any time
release such Bank from any of its obligations under the Loan Documents.
(c) Agent's Register. The Administrative Agent shall maintain a
----------------
register of the names and addresses of the Banks, their Commitments, and the
principal amount of their Loans (the "Register"). The Agent shall also maintain
a copy of each Assignment and Assumption Agreement delivered to and accepted by
it and modify the Register to give effect to each Assignment and Assumption
Agreement. Upon its receipt of each Assignment and Assumption Agreement and
surrender of the affected Note or Notes in accordance with Section 11.07(b), the
Agent will give prompt notice thereof
124
<PAGE>
to the Company and deliver to the Company a copy of the Assignment and
Assumption Agreement and the surrendered Note or Notes. Within five (5) Business
Days after its receipt of such notice, the Company shall execute and deliver to
the Administrative Agent a new Note or Notes to the order of the assignee in the
amount of the Commitment or Commitments assumed by it and to the assignor in the
amount of the Commitment or Commitments retained by it, if any. Such new Note or
Notes shall re-evidence the Indebtedness outstanding under the surrendered Note
or Notes and shall be dated as of the Effective Date. The Administrative Agent
shall be entitled to rely upon the Register exclusively for purposes of
identifying the Banks hereunder.
(d) Bank Participations. Each Bank may sell participations (without
-------------------
the consent of the Administrative Agent, the Company or any other Bank) to one
or more parties in or to all or a portion of its rights and obligations under
this Agreement, the Notes and the other Loan Documents. Notwithstanding a
Bank's sale of a participation interest, its obligations hereunder shall remain
unchanged. The Company, the Agent, and the other Banks shall continue to deal
solely and directly with such Bank. No participant shall have rights to approve
any amendment or waiver of this Agreement except to the extent such amendment or
waiver would (i) increase the commitment of the Bank from whom the participant
purchased its participation interest, (ii) reduce the principal of, or rate or
amount of interest on the Loans subject to such participation, (iii) postpone
any date fixed for any payment of principal of, or interest on, the Loans
subject to the participation interest, and (iv) release all or a substantial
portion of the Collateral, other than, in each case, when otherwise permitted
hereunder.
(e) Disclosure of Information. In connection with their efforts to
-------------------------
assign or sell participations pursuant to Sections 11.8(b) and (d), the
Administrative Agent or the Banks may disclose any information they have, now or
in the future, with respect to the business of the Company and its Subsidiaries
to prospective assignees or purchasers, provided that such prospective assignees
or purchasers agree in writing to be bound by the provisions of Section 11.08.
11.08. Confidentiality. Except as otherwise provided in this Section
---------------
11.08, each Bank agrees that it will not disclose without the prior consent of
the Company, any information with respect to the Company or any of its
Subsidiaries which is furnished pursuant to this Agreement and which is
designated by the Company to the Banks in writing as confidential, provided,
that any Bank may disclose any such information (a) to its Affiliates,
employees, auditors or counsel, or to another Bank if the
125
<PAGE>
disclosing Bank or such disclosing Bank's holding or parent company in its
reasonable discretion determines that any such party should have access to such
information, provided that each such person will be advised of the confidential
nature of such information, (b) as has become generally available to the public,
(c) as may be required or appropriate in any report, statement or testimony
submitted to any Governmental Authority having or claiming to have jurisdiction
over such Bank, (d) as may be required or appropriate in response to any summons
or subpoena or in connection with any litigation, and (e) in order to comply
with any Requirement of Law.
11.09. Set-off.
-------
In addition to any rights and remedies of the Banks provided by law,
if an Event of Default exists or the Loans have been accelerated, each Bank is
authorized at any time and from time to time, without prior notice to the
Company, any such notice being waived by the Company to the full extent
permitted by law, to set off and apply any and all deposits (general or special,
time or demand, provisional or final) at any time held by, and other
indebtedness at any time owing by, such Bank to or for the credit or the account
of the Company against any and all Obligations owing to such Bank, now or
hereafter existing, irrespective of whether or not the Administrative Agent or
such Bank shall have made demand under this Agreement or any Loan Document and
although such Obligations may be contingent or unmatured. Each Bank agrees
promptly to notify the Company and the Administrative Agent after any such set-
off and application made by such Bank; provided, however, that the failure to
-------- -------
give such notice shall not affect the validity of such set-off and application.
11.10. Notification of Addresses, Lending Offices, Etc.
------------------------------------------------
Each Bank shall notify the Administrative Agent in writing of any
changes in the address to which notices to the Bank should be directed, of
addresses of any Lending Office, of payment instructions in respect of all
payments to be made to it hereunder and of such other administrative information
as the Administrative Agent shall reasonably request.
11.11. Counterparts.
------------
This Agreement may be executed in any number of separate counterparts,
each of which, when so executed, shall be deemed an original, and all of said
counterparts taken together shall be deemed to constitute but one and the same
instrument.
126
<PAGE>
11.12. Severability.
------------
The illegality or unenforceability of any provision of this Agreement
or any instrument or agreement required hereunder shall not in any way affect or
impair the legality or enforceability of the remaining provisions of this
Agreement or any instrument or agreement required hereunder.
11.13. No Third Parties Benefitted.
---------------------------
This Agreement is made and entered into for the sole protection and
legal benefit of the Company, the Banks, the Administrative Agent and the Agent-
Related Persons, and their permitted successors and assigns, and no other Person
shall be a direct or indirect legal beneficiary of, or have any direct or
indirect cause of action or claim in connection with, this Agreement or any of
the other Loan Documents.
11.14. Governing Law and Jurisdiction.
------------------------------
(a) THIS AGREEMENT AND THE NOTES SHALL BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK; PROVIDED THAT THE
ADMINISTRATIVE AGENT AND THE BANKS SHALL RETAIN ALL RIGHTS ARISING UNDER FEDERAL
LAW.
(b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO ANY LOAN DOCUMENT
MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK OR OF THE UNITED STATES
FOR THE SOUTHERN DISTRICT OF NEW YORK, AND BY EXECUTION AND DELIVERY OF THIS
AGREEMENT, EACH OF THE COMPANY, THE ADMINISTRATIVE AGENT, THE ISSUING BANKS AND
THE BANKS CONSENTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY, TO THE NON-
EXCLUSIVE JURISDICTION OF THOSE COURTS. EACH OF THE COMPANY, THE ADMINISTRATIVE
AGENT, THE ISSUING BANKS AND THE BANKS IRREVOCABLY WAIVES ANY OBJECTION,
INCLUDING ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM
NON CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY ACTION
OR PROCEEDING IN SUCH JURISDICTION IN RESPECT OF THIS AGREEMENT OR ANY DOCUMENT
RELATED TO THIS AGREEMENT. THE COMPANY, THE ADMINISTRATIVE AGENT, THE ISSUING
BANKS AND THE BANKS EACH WAIVE PERSONAL SERVICE OF ANY SUMMONS, COMPLAINT OR
OTHER PROCESS, WHICH MAY BE MADE BY ANY OTHER MEANS PERMITTED BY NEW YORK LAW.
11.15. Waiver of Jury Trial. THE COMPANY, THE ISSUING BANKS, THE
--------------------
BANKS AND THE ADMINISTRATIVE AGENT EACH WAIVE THEIR RESPECTIVE RIGHTS TO A TRIAL
BY JURY OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF OR RELATED
TO THE LOAN DOCUMENTS, OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY, IN
ANY ACTION, PROCEEDING OR
127
<PAGE>
OTHER LITIGATION OF ANY TYPE BROUGHT BY ANY OF THE PARTIES AGAINST ANY OTHER
PARTY OR ANY AGENT-RELATED PERSON, PARTICIPANT OR ASSIGNEE, WHETHER WITH RESPECT
TO CONTRACT CLAIMS, TORT CLAIMS, OR OTHERWISE. THE COMPANY, THE BANKS, THE
ISSUING BANKS AND THE ADMINISTRATIVE AGENT EACH AGREE THAT ANY SUCH CLAIM OR
CAUSE OF ACTION SHALL BE TRIED BY A COURT TRIAL WITHOUT A JURY. WITHOUT LIMITING
THE FOREGOING, THE PARTIES FURTHER AGREE THAT THEIR RESPECTIVE RIGHT TO A TRIAL
BY JURY IS WAIVED BY OPERATION OF THIS SECTION AS TO ANY ACTION, COUNTERCLAIM OR
OTHER PROCEEDING WHICH SEEKS, IN WHOLE OR IN PART, TO CHALLENGE THE VALIDITY OR
ENFORCEABILITY OF THE LOAN DOCUMENTS OR ANY PROVISION THEREOF. THIS WAIVER SHALL
APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO
THE LOAN DOCUMENTS.
11.16. Entire Agreement.
----------------
This Agreement, together with the other Loan Documents, embodies the
entire agreement and understanding among the Company, the Banks and the
Administrative Agent, and supersedes all prior or contemporaneous agreements and
understandings of such Persons, verbal or written, relating to the subject
matter of this Agreement and thereof.
128
<PAGE>
IN WITNESS WHEREOF, the parties to this Agreement have caused this
Agreement to be duly executed and delivered by their proper and duly authorized
officers as of the day and year first above written.
CLARK REFINING & MARKETING, INC.
By: /s/ [xxxxxx]
------------------------------------
Name: [XXXXXX]
Title: VICE PRESIDENT
Address for notices:
Clark Refining & Marketing, Inc.
8182 Maryland Avenue
St. Louis, Missouri 63105
Telephone: (314) 854-9696
Telecopy: (314) 854-1580
AGENTS
------
BANKERS TRUST COMPANY
as Administrative Agent
and Collateral Agent
By: /s/ Bruce W. Addison
------------------------------------
Name: BRUCE W. ADDISON
Title: VICE PRESIDENT
Address for notices:
Bankers Trust Company
14 Wall Street
New York, New York 10005
Telephone: (212) 618-2609
Telecopy: (212) 618-2630
129
<PAGE>
THE TORONTO DOMINION BANK
as Syndications Agent
By: /s/ David G. Parker
-----------------------------------
Name: DAVID G. PARKER
Title: MGR. CR. ADMIN.
Address for notices:
Toronto Dominion (Texas), Inc.
909 Fannin Street
Houston, TX 77010
Telephone: (713) 653-8248
Telecopy: (713) 951-9921
BANKBOSTON, N.A.
as Documentation Agent
By: /s/ Chatel Holmgren
------------------------------------
Name: HOLMGREN
Title: DIRECTOR
Address for notices:
BankBoston, N.A.
100 Federal Street
Boston, MA 02110
Telephone: (617) 434-4067
Telecopy: (617) 434-3652
130
<PAGE>
LENDERS
-------
ABN AMRO BANK
as a Bank
By: /s/ John E. Robertson
-----------------------------------
Name: JOHN E. ROBERTSON
Title: VICE PRESIDENT
By: /s/ Mary L. Honda
-----------------------------------
Name: MARY L. HONDA
Title: VICE PRESIDENT
Address for notices:
ABN AMRO Bank
135 South LaSalle Street
Chicago, IL 60674-9135
Telephone: (312) 904-5215
Telecopy: (312) 606-8425
BANKBOSTON, N.A.
as a Bank
By: /s/ Chatel Holmgren
-----------------------------------
Name: HOLMGREN
Title: DIRECTOR
Address for notices:
BankBoston, N.A.
100 Federal Street
Boston, MA 02110
Telephone: (617) 434-4067
Telecopy: (617) 434-3652
131
<PAGE>
BANKERS TRUST COMPANY
as a Bank
By: /s/ Bruce W. Addison
-----------------------------------
Name: BRUCE W.ADDISON
Title: VICE PRESIDENT
Address for notices:
Bankers Trust Company
14 Wall Street
New York, New York 10005
Telephone: (212) 618-2609
Telecopy: (212) 618-2630
BANK OF SCOTLAND
as a Bank
By: /s/ Annie Chin Tat
-----------------------------------
Name: ANNIE CHIN TAT
Title: VICE PRESIDENT
Address for notices:
Bank of Scotland
565 5/th/ Avenue
New York, NY 10017
Telephone: (212) 450-0871
Telecopy: (212) 557-9460
132
<PAGE>
COMERICA BANK
as a Bank
By: /s/ [xxxx]
-----------------------------------
Name: [xxxx]
Title: VICE PRESIDENT
Address for notices:
Comerica Bank
500 Woodward Avenue
23/rd/ Floor
Detroit, Michigan 48226-3329
Telephone: (313) 222-3002
Telecopy: (313) 222-3377
CREDIT LYONNAIS NEW YORK BRANCH
as a Bank
By: /s/ Pascal Poupelle
-----------------------------------
Name: PASCAL POUPELLE
Title: EXECUTIVE VICE PRESIDENT
Address for notices:
Credit Lyonnais, Houston Representative
Office
1000 Louisiana, Suite 5360
Houston, Texas 77002
Telephone: (713) 753-8723
Telecopy: (713) 751-0307
133
<PAGE>
FIRST CHICAGO NBD BANK
as a Bank
By: /s/ [xxxxx]
-----------------------------------
Name:
Title:
Address for notices:
First Chicago NBD BANK
One First National Plaza, Suite 0363
Chicago, Illinois 60670
Telephone: (312) 732-1446
Telecopy: (312) 732-3055
THE FUJI BANK, LIMITED
as a Bank
By: /s/ Peter L. Chinnici
-----------------------------------
Name: PETER L. CHINNICI
Title: JOINT GENERAL MANAGER
Address for notices:
The Fuji Bank, Limited
225 West Wacker Drive, Suite 2000
Chicago, Illinois 60606
Telephone: (312) 621-0397
Telecopy: (312) 621-0539
134
<PAGE>
DEN NORSKE BANK ASA
as a Bank
By: /s/ Byron L. Cooley
-------------------------------
Name: BYRON L. COOLEY
Title: SENIOR VICE PRESIDENT
By: /s/ Morten Bjornsen
-------------------------------
Name: MORTEN BJORNSEN
Title: SENIOR VICE PRESIDENT
Address for notices:
Den norske Bank ASA
Three Allen Center
333 Clay Street
Suite 4890
Houston, Texas 77002
Attention: Byron L. Cooley
Telephone: (713) 844-9258
Facsimile: (713) 757-1167
135
<PAGE>
GREEN TREE FINANCIAL SERVICING
CORPORATION
as a Bank
By: /s/ Gary Wetherholt
-----------------------------------
Name: GARY WETHERHOLT
Title: VICE PRESIDENT - CREDIT
Address for notices:
Green Tree Financial Servicing
Corporation
100 North Point Center East
Suite 200
Alpharetta, Georgia 30202
Telephone: (770) 772-3348
Telecopy: (770) 772-3786
HIBERNIA NATIONAL BANK
as a Bank
By: /s/ Colleen Smith
------------------------------------
Name: COLLEEN SMITH
Title: VICE PRESIDENT
Address for notices:
Hibernia National Bank
313 Carondolet Sreet
Energy & Maritime Department
New Orleans, Louisiana 70130
Telephone: (504) 533-3513
Telecopy: (504) 533-5434
136
<PAGE>
MERCANTILE BANK NATIONAL ASSOCIATION
as a Bank
By: /s/ [xxxxxx]
-----------------------------------
Name: [XXXXXX]
Title: VICE PRESIDENT
Address for notices:
Mercantile Bank National Association
Mercantile Tower
721 Locust Street, 12/th/ Floor
St. Louis, Missouri 63101
Telephone: (314) 425-1967
Telecopy: (314) 425-2162
MITSUBISHI TRUST & BANKING CORP.
as a Bank
By: /s/ Mr. Aaki Yamagishi
-----------------------------------
Name: MR. AAKI YAMAGISHI
Title: CHIEF MANAGER
Address for notices:
Mitsubishi Trust & Banking Corp.
311 South Wacker Drive, Suite 6300
Chicago, Illinois 60606-6822
Telephone: (312) 408-6015
Telecopy: (312) 663-0863
137
<PAGE>
THE SANWA BANK LIMITED
as a Bank
By: /s/ [XXXXXXXXX]
---------------------------
Name:
Title: S.V.P.
Address for notices:
The Sanwa Bank Limited
Park Avenue Plaza
52 East 52/nd/ Street
New York, NY 10055
Telephone: (212) 339-6380
Telecopy: (212) 754-2360
STANDARD CHARTERED BANK
as a Bank
By: /s/ [XXXXXXXXX]
---------------------------
Name: XXXXXXXXX
Title: A.V.P.
By: /s/ [XXXXXXXXX]
---------------------------
Name: XXXXXXXXX
Title: V.P.
Address for notices:
Standard Chartered Bank
7 World Trade Center
New York, New York 10048
Telephone: (212) 667-0223
Telecopy: (212) 667-0780
138
<PAGE>
TORONTO DOMINION(TEXAS), INC.
as a Bank
By: /s/ Neva Nesbitt
---------------------------
Name: NEVA NESBITT
Title: VICE PRESIDENT
Address for notices:
Toronto Dominion (Texas), Inc.
909 Fannin Street
Houston, Texas 77010
Telephone: (713) 653-8248
Telecopy: (713) 951-9921
UNION BANK OF CALIFORNIA, N.A.
as a Bank
By: /s/ Walter M. Roth
---------------------------
Name: WALTER M. ROTH
Title: VICE PRESIDENT
Address for notices:
Union Bank of California, N.A.
Energy Capital Services
445 South Figueroa Street
Los Angeles, CA 90071
Telephone: (213) 236-5772
Telecopy: (213) 236-4096
139
<PAGE>
WELLS FARGO BANK (TEXAS), N.A.
as a Bank
By: /s/ Charles D. Kirkham
---------------------------
Name: CHARLES D. KIRKHAM
Title: VICE PRESIDENT
Address for notices:
Wells Fargo Bank (Texas), N.A.
Energy Department
1445 Ross Avenue, LB 224
Suite 450, 4/th/ Floor
Dallas, Texas 75202-0291
Telephone: (214) 777-4026
Telecopy: (214) 777-4044
ISSUING BANKS
-------------
BANKERS TRUST COMPANY
as Issuing Bank
By: /s/ Bruce W. Addison
---------------------------
Name: Bruce Addison
Title: V.P.
Address for notices:
Bankers Trust Company
14 Wall Street
New York, New York 10005
Telephone: (212) 618-2609
Telecopy: (212) 618-2630
140
<PAGE>
TORONTO DOMINION (TEXAS), INC.
as Issuing Bank
By: /s/ Neva Nesbitt
---------------------------
Name: NEVA NESBITT
Title: VICE PRESIDENT
Address for notices:
Toronto Dominion (Texas), Inc.
909 Fannin Street
Houston, TX 77010
Telephone: (713) 653-8248
Telecopy: (713) 951-9921
BANKBOSTON, N.A.
as Issuing Bank
By: /s/ [XXXXXXXXX]
---------------------------
Name: XXXXXXXXXX
Title: DIRECTOR
Address for notices:
BankBoston, N.A.
100 Federal Street
Boston, MA 02110
Telephone: (617) 434-4067
Telecopy: (617) 434-3652
141
<PAGE>
EXHIBIT 10.2
MEMORANDUM OF AGREEMENT
made as of the ____th day of _________________, 1997
(hereinafter referred to as the "Agreement Date")
B E T W E E N:
CLARK REFINING AND MARKETING, INC.,
a corporation incorporated
under the laws of Delaware
(hereinafter referred to as the "Corporation"),
OF THE FIRST PART
- and -
Paul D. Melnuk
of St. Louis, Missouri
(hereinafter referred to as the "Executive"),
OF THE SECOND PART.
WHEREAS the Corporation is a wholly-owned subsidiary of Clark USA, Inc.
(hereinafter referred to as "Clark USA");
AND WHEREAS the Corporation recognizes the valuable services that the
Executive has provided and is continuing to provide to the Corporation, Clark
USA, and their affiliates, considers the establishment and maintenance of a
sound and vital management to be essential to protecting and enhancing the best
interests of the Corporation, Clark USA, and its shareholders, and wishes to
continue the Executive's employment in accordance with the terms of this
Agreement;
AND WHEREAS the Board has determined that it would be in the best interests
of Clark USA and the Corporation to induce the Executive to remain in the employ
of Clark USA, the Corporation and the Subsidiaries, by entering into this
Agreement relating to the terms of the Executive's continuing employment, and by
indicating that in the event of a Change in Control, the Executive would have
certain automatic and guaranteed rights;
AND WHEREAS both the Corporation and the Executive wish formally to agree
as to the terms and conditions which will
1
<PAGE>
govern the Executive's continuing employment, and the terms and conditions which
will govern the termination or modification of the employment of the Executive
following a Change in Control;
NOW THEREFORE, in consideration of the premises hereof and of the mutual
covenants and agreements hereinafter set forth and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged by
the parties, the parties agree as follows:
ARTICLE II
RECITALS
--------
II.1 The parties agree, and represent and warrant to each other, that the
above recitals are true and accurate.
ARTICLE III
INTERPRETATION
--------------
III.1 Unless elsewhere herein otherwise expressly provided or unless the
context otherwise requires, words importing the singular include the plural and
vice versa and words importing the masculine gender include the feminine and
neuter genders.
III.2 The headings of the Articles, sections, subsections, paragraphs, and
clauses herein are inserted for convenience of reference only and shall not
affect the meaning or construction hereof.
III.3 This Agreement shall be construed in accordance with the laws of the
State of Missouri, without regard to the conflict of law provisions of any
state. All disputes shall be litigated in St. Louis, Missouri.
2
<PAGE>
III.4 If any term or other provision of this Agreement is invalid, illegal
or incapable of being enforced by any rule of Law or public policy, all other
conditions and provisions of this Agreement shall nevertheless remain in full
force and effect so long as the economic or legal substance of the transactions
contemplated hereby is not affected in any manner materially adverse to any
party hereto. Upon such determination that any term or other provision is
invalid, illegal or incapable of being enforced, the parties hereto shall
negotiate in good faith to modify this Agreement so as to effect the original
intent of the parties hereto as closely as possible in an acceptable manner to
the end that transactions contemplated hereby are fulfilled to the extent
possible.
III.5 In this Agreement, unless the context otherwise requires, the
following terms shall have the following meanings, respectively:
(a) "Affiliate" means (i) any corporation, partnership, joint venture or other
entity during any period in which it beneficially owns at least thirty
percent of the voting power of all classes of stock of the Corporation
entitled to vote; and (ii) any corporation, partnership, joint venture or
other entity during any period in which at least a fifty percent voting or
profits interest is beneficially owned by the Corporation or by any entity
that is an Affiliate by reason of clause (i) next above.
(b) "Basic Compensation" means the sum of:
(i) the annual salary of the Executive based upon the greater of (A) the
salary paid by or on behalf of Clark USA and the Corporation for the
calendar year ended immediately preceding the Date of Termination
and (B) the salary which would have been payable by or on behalf of
Clark USA and the Corporation to the Executive (based upon the
salary rate in effect immediately preceding the Date of Termination)
for the 12 months immediately following the Date of Termination; and
3
<PAGE>
(ii) an amount equal to the greater of:
(A) the agreed yearly minimum bonus which is payable to the
Executive under the compensation terms in effect immediately
prior to the date of the Date of Termination; or
(B) the average of the yearly bonus amounts paid to the Executive
by Clark USA and the Corporation over the last two fiscal years
of the Corporation ended immediately preceding the date of the
Date of Termination.
(c) "beneficial ownership" shall be determined in accordance with Rule 13d-3
issued under the U.S. Securities Exchange Act of 1934.
(d) "Board" means the board of directors of the Corporation.
(e) "Cause" means a determination by the Board, after permitting the Executive
a reasonable opportunity to be heard, that any of the following has
occurred:
(i) wilful and continued failure by the Executive to substantially
perform the Executive's duties with the Corporation (other than any
such failure resulting from his incapacity due to physical or mental
illness) after a demand for substantial performance improvement has
been delivered in writing to the Executive by the Chairman of the
Corporation or the person performing the function of the Chairman of
the Corporation, which identifies the manner in which such officer
or person believes that the Executive has not substantially
performed his duties;
(ii) wilful engaging by the Executive in misconduct which is materially
injurious to Clark USA, the Corporation, or the Affiliates,
monetarily or otherwise; or
(iii) the conviction of the Executive of a criminal offense involving
dishonesty or other moral turpitude;
provided that no act, or failure to act, on the Executive's part shall be
considered "wilful" unless the Board determines that such act or failure to
act by the Executive was in bad faith and was without reasonable belief by
the Executive that such act or failure to act was in the best interests of
Clark USA, the Corporation, or the Affiliates. For purposes of paragraph
(i) above, the phrase "wilful and
4
<PAGE>
continued failure by the Executive to substantially perform the Executive's
duties with the Corporation" shall include, without limitation, any
violation of paragraph V.2(a).
(f) "Change in Control" means the first date upon which (I) a TrizecHahn
Corporation Change in Control shall have occurred, if on such date Tiger
shall beneficially own less than 20% of the number of shares of capital
stock of Clark USA held by it as of the Agreement Date; or (II) a Clark
Change in Control shall have occurred.
(g) "TrizecHahn Corporation Change in Control" means the occurrence of any of
the following events described in paragraph (i) through (vi) below:
(i) TrizecHahn Corporation - Voting/Board Control.
---------------------------------------------
The date upon which the following three conditions shall have been
satisfied:
(A) the MVS shall have been converted into SVS in accordance with
their terms (the "Conversion");
(B) a person or group (other than Mr. Peter Munk) holds shares
and/or other securities which, directly or after conversion,
exercise or exchange thereof, would entitle the holders thereof
to cast 20% or more of the votes attached to the outstanding
Voting Shares; and
(C) a change in the composition of the TrizecHahn Corporation Board
within two years after the date of Conversion such that the
directors of TrizecHahn Corporation in office immediately
before the date of Conversion and the directors recommended for
election or elected to succeed such directors by a majority of
such directors cease to constitute a majority of the TrizecHahn
Corporation Board;
provided, however, that a TrizecHahn Corporation Change in Control
will be deemed to have occurred under this paragraph (i) only if, on
the date on which such TrizecHahn Corporation Change in Control
would otherwise have occurred, TrizecHahn Corporation is a
Substantial Owner of Clark USA.
(ii) TrizecHahn Corporation - Voting.
-------------------------------
The date upon which the following two conditions shall have been
satisfied:
5
<PAGE>
(A) the Conversion shall have occurred; and
(B) a person or group (other than Mr. Peter Munk) holds shares
and/or other securities which, directly or after conversion,
exercise or exchange thereof, would entitle the holders thereof
to cast 35% or more of the votes attached to the outstanding
Voting Shares;
provided, however, that a TrizecHahn Corporation Change in Control
will be deemed to have occurred under this paragraph (ii) only if,
on the date on which such TrizecHahn Corporation Change in Control
would otherwise have occurred, TrizecHahn Corporation is a
Substantial Owner of Clark USA.
(iii) TrizecHahn Corporation - MVS/Board.
----------------------------------
The date upon which the following two conditions shall have been
satisfied:
(A) a majority of the MVS are beneficially owned, or control or
direction is exercised over a majority of the MVS, by any
person or group, other than Mr. Peter Munk or a member of his
immediate family who is a Canadian within the meaning of the
Investment Canada Act ("Change in Ownership"); and
(B) there is a change in the composition of the TrizecHahn
Corporation Board within two years after the date of the Change
in Ownership and the directors recommended for election or
elected to succeed such directors by a majority of such
directors such that the directors in office immediately before
the date of the Change in Ownership cease to constitute a
majority of the TrizecHahn Corporation Board;
provided, however, that a TrizecHahn Corporation Change in Control
will be deemed to have occurred under this paragraph (iii) only if,
on the date on which such TrizecHahn Corporation Change in Control
would otherwise have occurred, TrizecHahn Corporation is a
Substantial Owner of Clark USA.
(iv) TrizecHahn Corporation - Merger/Board.
-------------------------------------
The date upon which the following two conditions shall have been
satisfied:
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(A) the shareholders of TrizecHahn Corporation shall have approved
(I) an amalgamation, merger, or any other business combination
or consolidation of TrizecHahn Corporation with any other
corporation (other than a TrizecHahn Corporation Successor,
TrizecHahn Corporation Subsidiary, Clark USA, the Corporation,
or one or more of the Subsidiaries), (II) a plan for the
liquidation of TrizecHahn Corporation, (III) an agreement for
the sale or disposition of all or substantially all of the
assets of TrizecHahn Corporation; and
(B) within two years following a transaction referred to in
paragraph (iv)(A) above, a majority of the Board of the
amalgamated or merged entity or successor entity into which
TrizecHahn Corporation was liquidated or which acquired
substantially all of the assets of TrizecHahn Corporation is
not comprised of individuals who were directors of TrizecHahn
Corporation immediately before the event referred to in
paragraph (iv)(A) above, or directors recommended for election
or elected to succeed such directors by a majority of such
directors;
provided, however, that a TrizecHahn Corporation Change in Control
will be deemed to have occurred under this paragraph (iv) only if,
on the date on which such TrizecHahn Corporation Change in Control
would otherwise have occurred, TrizecHahn Corporation is a
Substantial Owner of Clark USA.
(v) Increase in Ownership/Board Change.
-----------------------------------
The date upon which the following two conditions have been
satisfied:
(A) any Person (excluding TrizecHahn Corporation, any TrizecHahn
Corporation Subsidiary, and any person who satisfies the
requirements set forth in Rule 13d-1(b)(i) and (ii) issued under the
U.S. Securities Exchange Act of 1934 (relating to certain persons
acquiring securities in the ordinary course of business and not with
the purpose or effect of changing or influencing the control of the
issuer)) has beneficial ownership of the Voting Power of Clark USA
that is in excess of the greater of:
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(I) 20% of the Voting Power of Clark USA; or
(II) the Voting Power of Clark USA then held by TrizecHahn
Corporation;
(B) of the Board of Directors of Clark USA is comprised of persons
who are neither executive officers of TrizecHahn Corporation or any
TrizecHahn Corporation Subsidiary, nor members of the board of
directors of TrizecHahn Corporation.
(vi) Increase in Ownership.
----------------------
The date upon which any Person (excluding TrizecHahn Corporation and
any TrizecHahn Corporation Subsidiary) has beneficial ownership of
the Voting Power of Clark USA that is in excess of the greater of:
(I) 35% of the Voting Power of Clark USA; or
(II) the Voting Power of Clark USA then held by TrizecHahn
Corporation.
(h) "Clark Change in Control" means the occurrence of any of the events
described in paragraphs (i) through (iii) below:
(i) Merger of Clark USA.
--------------------
The date of approval by the shareholders of Clark USA of a
reorganization, merger or consolidation of Clark USA, in each case,
with respect to which all or substantially all of the individuals
and entities who were the respective beneficial owners of the common
stock and voting securities of Clark USA immediately prior to such
reorganization, merger or consolidation do not, following such
reorganization, merger or consolidation (or following a series of
prearranged related transactions), beneficially own more than 50%
of, respectively, the then outstanding shares of common stock or the
combined voting power of the then outstanding voting securities
entitled to vote generally in the election of directors, as the case
may be, of the corporation resulting from such reorganization,
merger or consolidation.
(iii) Liquidation of Clark USA.
-------------------------
The date of approval by the shareholders of Clark USA of the sale or
other disposition of all or substantially all of the assets of Clark
USA; in each case, with respect to which all or substantially all
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of the individuals and entities who were the respective beneficial
owners of the common stock and voting securities of Clark USA
immediately prior to such sale or disposition do not, following such
sale or disposition (or following a series of prearranged related
transactions), beneficially own more than 50% of, respectively, the
then outstanding shares of common stock or the combined voting power
of the then outstanding voting securities entitled to vote generally
in the election of directors, as the case may be, of the entity or
entities acquiring all or substantially all of the assets of Clark
USA.
(iii) Disposition of the Corporation.
-------------------------------
The first date on which Clark USA does not beneficially own more
than 50% of the total voting power of the outstanding capital stock
of the Corporation.
(i) Clark USA" means Clark USA, Inc. and includes any corporation, partnership,
joint venture or other entity that succeeds to the interests of Clark USA,
Inc.
(j) "Corporation" means Clark Refining and Marketing, Inc. and includes any
corporation, partnership, joint venture or other entity that succeeds to
the interests of Clark Refining and Marketing, Inc.
(k) "Date of Termination" means the first date on which the Executive is
employed by neither Clark USA, the Corporation, nor any Subsidiary.
(l) "Disability" means the physical or mental illness of the Executive
resulting in the Executive's absence from his full time duties with the
Corporation for more than nine consecutive months and failure by the
Executive to return to full time performance of his duties within thirty
days after written demand by the Corporation to do so given at any time
after such nine-month period.
(m) "Good Reason" means the occurrence of any of the following events without
the Executive's written consent:
(i) the assignment to the Executive of any duties inconsistent in any
respect with the Executive's position (including substantial status,
offices, titles and reporting requirements), authority, duties or
responsibilities, or any other action by the Corporation, in each
case which results in a substantial diminution in such position,
authority,
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duties or responsibilities, in the salary amount, or in the amount
of the potential bonus opportunity,
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previously provided to the Executive;
(ii) the Corporation requiring the Executive to be based at any office or
location other than in the Greater St. Louis Area; or
(iii) any other action by the Executive's employer purporting to result in
a Date of Termination other than for Cause, Disability or death.
(h) "Greater St. Louis Area" means any location within 30 miles (traveling by
automobile) of 8182 Maryland Avenue, St. Louis, Missouri.
(i) "group" means any person or company acting jointly or in concert with any
other person or company and for such purposes "acting jointly or in
concert" shall be interpreted in accordance with subsection 91(a) of the
Securities Act (Ontario).
(j) "TrizecHahn Corporation" means TrizecHahn Corporation Corporation, a
corporation incorporated under the laws of the Province of Ontario, and any
TrizecHahn Corporation Successor.
(k) "TrizecHahn Corporation Board" means the board of directors of TrizecHahn
Corporation.
(l) "TrizecHahn Corporation Subsidiary" means any corporation, partnership,
joint venture or other entity during any period in which at least a fifty
percent voting or profits interest is beneficially owned by TrizecHahn
Corporation.
(m) "TrizecHahn Corporation Successor" means any corporation, partnership,
joint venture or other entity which satisfies either (or both of) clause
(i) and (ii):
(i) Mr. Peter Munk has beneficial ownership that is in excess of the
greater of:
(A) 40% of the total voting power of the outstanding capital stock
of the entity; or
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(B) the percentage of the total voting power of the outstanding
capital stock of the entity that is then held by any other
Person;
(ii) the entity succeeds to the interests of TrizecHahn Corporation
Corporation; but including only an entity which, immediately after
the succession: (A) is beneficially owned by all or substantially
all of the individuals and entities who were the respective
beneficial owners of TrizecHahn Corporation immediately prior to
such succession, in substantially the same proportions as the
proportions beneficially owned immediately prior to such succession;
or (B) for a period of two years following the succession, a
majority of the Board of the successor entity is comprised of
individuals who were directors of TrizecHahn Corporation immediately
before the succession.
(n) "MVS" means the outstanding Multiple Voting Shares in the capital of
TrizecHahn Corporation at any time.
(o) The term "Person", when capitalized, shall mean any person, and shall also
include two or more persons acting as a partnership, limited partnership,
syndicate, or other group for the purpose or with the effect of changing or
influencing the control of Clark USA. The provisions of this paragraph (u)
shall be interpreted based on the interpretations of the comparable
provisions of Sections 13 and 14 of the U.S. Securities Exchange Act of
1934 and the rules thereunder.
(p) "Subsidiary" means any corporation, partnership, joint venture or other
entity during any period in which at least a fifty percent voting or
profits interest is beneficially owned by the Clark USA.
(q) TrizecHahn Corporation shall be a "substantial owner" of Clark USA for the
period in which it beneficially owns at least 25% of the Voting Power of
Clark USA, and no other shareholder of Clark USA beneficially owns more
Voting Power of Clark USA than does TrizecHahn Corporation.
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(r) "SVS" means the outstanding Subordinate Voting Shares in the capital of
TrizecHahn Corporation at any time.
(s) "Tiger" shall mean, collectively, The Jaguar Fund N.V., Tiger (a limited
partnership), Puma (a limited partnership) and any other Person managed by
Tiger Management Corporation which at any time holds any shares of capital
stock of Clark USA.
(t) "Voting Power of Clark USA" shall mean the total voting power of the
outstanding capital stock of Clark USA.
(u) "Voting Shares" means any security of TrizecHahn Corporation carrying a
right to vote for the election of directors of TrizecHahn Corporation under
all circumstances or under circumstances that have occurred and are
continuing.
ARTICLE IV
AGREEMENT TERM
--------------
IV.1 Subject to the automatic extension discussed below in this Article
IV.1, the "Agreement Term" shall be the period beginning on the Agreement Date,
and ending on the fifth anniversary of the Agreement Date. On the fifth
anniversary of the Agreement Date and on each anniversary date thereafter
(including the period during which this Agreement is extended), the Agreement
Term shall automatically be extended by one additional year unless, not less
than 90 days prior to any such anniversary, either the Corporation or the
Executive shall have given written notice to the Executive or the Corporation,
as applicable, that the Agreement Term will not be extended.
IV.2 If a Change in Control occurs during the Agreement Term, and at the
time the Change in Control, less than two years remains in the Agreement Term,
the Agreement Term shall be automatically extended to the second anniversary of
the Agreement Term.
ARTICLE V
CONTINUATION OF EMPLOYMENT
--------------------------
V.1 During the Agreement Term, the Corporation agrees to continue the
Executive in its employ, in accordance with the terms and provisions of this
Agreement, in accordance with the following:
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(a) The Executive shall be employed by the Corporation as its President
and Chief Executive Officer, and shall not be assigned tasks that would be
substantially inconsistent with that position.
(b) The Executive shall receive, while employed, for each 12-consecutive
month period beginning on the Effective Date and each anniversary thereof, in
substantially equal monthly or more frequent installments, an annual base salary
of not less than $325,000.00 (the "Salary").
(c) The Executive is authorized to incur reasonable expenses for
entertainment, traveling, meals, lodging and similar items in promoting the
Corporation's business. Subject to the reimbursement applicable to the
Corporation's senior management employees as in effect from time to time, the
Corporation will reimburse the Executive for all reasonable expenses so
incurred.
(d) The Executive shall be provided with the welfare benefits and other
fringe benefits to the same extent and on the same terms as those benefits are
provided by the Corporation from time to time to the Corporation's other senior
management employees.
V.2 (a) During the Agreement Term, while the Executive is employed by the
Corporation, the Executive shall not solicit, initiate or encourage proposals or
offers from, or provide information relating to Clark USA, the Corporation or
any of the Affiliates to, any person, entity or group in connection with or
relating to any acquisition or disposition of all or any material part of Clark
USA's issued and outstanding shares, or any amalgamation, merger, sale of all or
any material part of the assets of Clark USA, the Corporation or any Subsidiary,
take-over bid, re-organization, re-capitalization, liquidation, winding-up of,
or other business combination or any similar transaction involving Clark USA,
the Corporation or any Subsidiary, without in each case the explicit approval of
the Board, the Chairman of the Board or the person performing the function of
the Chairman of the Board. The Executive shall report to the Chairman of the
Board any explicit approval that he gives to other executives of the Company
with respect to any such transaction.
(b) The provisions of paragraph V.2(a) shall not apply to the sale by the
Executive of any shares of Clark USA owned by him.
ARTICLE VI
OBLIGATIONS UPON TERMINATION
----------------------------
VI.1 If, at any time during the Agreement Term, the
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Executive's Date of Termination occurs as a result the Executive's employment
being terminated by the Executive's employer (other than for Cause, Disability,
or death), or as a result of the Executive's employment being terminated by the
Executive for Good Reason:
(a) The Corporation shall pay to or to the order of the Executive in cash or
certified cheque within ten days after the Date of Termination, the
aggregate of the following amounts (less any statutory deductions):
(i) if not theretofore paid, the amount of the Executive's unpaid Basic
Compensation for the then current fiscal year of the Corporation for
the period to and including the Date of Termination, plus any other
compensation and benefit amounts that are accrued and unpaid as of
the Date of Termination; and
(ii) as partial compensation for the Executive's loss of employment, an
amount equal to three (3) times the Basic Compensation.
(b) If the Executive holds any options, rights, warrants or other entitlements
for the purchase or acquisition of securities in the capital of Clark USA,
the Corporation or any Affiliate granted by Clark USA or the Corporation
(collectively, "Rights"), regardless of whether such Rights are then
exercisable, notwithstanding the terms and conditions of such Rights or of
any plan or other document affecting such Rights, shall be deemed to be
immediately exercisable for a term that is the lesser of five years after
the Date of Termination or the remaining term to expiry for such Rights.
(c) The Corporation, at its expense, shall provide the Executive with the
reasonable job relocation counselling services of a firm chosen from time
to time by the Executive, for a period not to exceed 18 months after the
Date of Termination.
(d) The Corporation shall maintain in full force and effect, for the
Executive's continued benefit, until the earlier of:
(i) one year after the Date of Termination; and
(ii) the Executive's commencement of full time employment with a new
employer;
all life insurance, medical, dental, health and accident and disability
plans, programs or arrangements in which the Executive was entitled to
participate immediately prior to the Date of Termination at a cost to the
Executive no
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<PAGE>
greater than the Executive paid while employed, provided that the
Executive's continued participation is possible under the general terms and
provisions of such plans and programs. In the event that the Executive's
participation is barred, the Corporation shall arrange to provide the
Executive, at the Corporation's expense, with benefits substantially
similar to those which the Executive is entitled to receive under such
plans, programs or arrangements or pay cash in an amount after tax
sufficient to enable the Executive to purchase substantially similar
coverage for a one year period on an individual basis at a cost to the
Executive no greater than the Executive paid while employed. In the case
of the Executive's commencement of full time employment with a new employer
within the one year period, the Corporation agrees to make up any
differential in benefits between what the Executive would have received
from the Corporation in the one year period and what the Executive receives
from his new employer, so that the Executive is ensured of receiving the
same benefits which he would have been entitled to receive from the
Corporation had his employment with the Corporation continued for the one
year period at a cost to the Executive no greater than the Executive paid
while employed.
(e) Except as otherwise expressly provided in this Agreement, the Executive's
entitlement to benefits under the employee benefit plans and benefit
arrangements maintained by Clark USA, the Corporation, and the Affiliates,
shall be determined under the terms of the respective plans as in effect
from time to time, with such entitlement based on the fact that the
Executive's employment with Clark USA, the Corporation and the Affiliates
ceased on the Executive's Date of Termination.
Except as may be otherwise specifically provided in an amendment of this
subsection VI.1 adopted in accordance with subsection VII.8, payments under this
subsection VI.1 shall be in lieu of all benefits that may be otherwise payable
to or on behalf of the Executive pursuant to the terms of any severance pay
arrangement of Clark USA, the Corporation or any Affiliate or any other, similar
arrangement of Clark USA, the Corporation or any Affiliate providing benefits
upon involuntary termination of employment.
VI.2 If, at any time during the Agreement Term, the Executive's Date of
Termination occurs as a result the Executive's employment being terminated by
the Executive's voluntary resignation (other than for Good Reason), or is
terminated by the employer for Cause, or if the Executive's Date of Termination
occurs as a result the Executive's employment being terminated by the
Executive's death or Disability:
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(a) The Corporation shall pay to or to the order of the Executive in cash or
certified cheque within ten days after the Date of Termination, the
aggregate of the following amounts (less any statutory deductions), if not
theretofore paid, the amount of the Executive's unpaid Basic Compensation
for the then current fiscal year of the Corporation for the period to and
including the Date of Termination; and shall provide any other compensation
and benefit amounts that are accrued and unpaid as of the Date of
Termination; provided, however, that the Executive's entitlement to the
bonus amounts for the year shall be determined in accordance with the
provisions of the applicable bonus program.
(b) Except as otherwise expressly provided in this Agreement, the Executive's
entitlement to benefits under the employee benefit plans and benefit
arrangements maintained by Clark USA and the Corporation, shall be
determined under the terms of the respective plans as in effect from time
to time, with such entitlement based on the fact that the Executive's
employment with Clark USA and the Corporation ceased on the Executive's
Date of Termination.
VI.3 The Corporation shall pay to the Executive all reasonable legal and
professional fees and expenses incurred by the Executive in seeking to obtain or
enforce any right or benefit provided by this Agreement, if the Executive is
successful in obtaining such right or benefit.
VI.4 (a) In the event it shall be determined that any payment, benefit or
distribution (or combination thereof) by the Corporation, or by any other member
of the same affiliated group with the Corporation (as determined under Code
Section 280G(d)(5)) for the benefit of the Executive (whether paid or payable or
distributed or distributable pursuant to the terms of this Agreement, or
otherwise) (a "Payment") would be subject to the excise tax imposed by Section
4999 of the Internal Revenue Code of 1986, as amended from time to time (the
"Code"), or any interest or penalties are incurred by the Executive with respect
to such excise tax (other than interest or penalties incurred as a result of the
failure of the Executive to file any tax return, or pay any tax (except any such
failure to pay tax in accordance with the terms hereof), required by applicable
law or to be filed or paid by the Executive) (such excise tax together with any
such interest and penalties, hereinafter collectively referred to as the "Excise
Tax"), the Executive shall be entitled to receive an additional payment (a
"Gross-Up Payment") in an amount such that after payment by the Executive of all
taxes (including any interest or penalties imposed with respect to such taxes,
other
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than interest or penalties imposed as a result of the failure of the Executive
to file any tax return or pay any tax (except any such failure to pay tax in
accordance with the terms hereof), required by applicable law to be filed or
paid by the Executive), including, without limitation, any income taxes (and any
interest and penalties imposed with respect thereto, other than interest or
penalties imposed as a result of the failure of the Executive to file any tax
return or pay any tax (except any such failure to pay tax in accordance with the
terms hereof), required by applicable law to be filed or paid by the Executive)
and the Excise Tax imposed upon the Gross-Up Payment, the Executive retains an
amount of the Gross-Up Payment equal to the Excise Tax imposed upon the
Payments.
(b) Subject to the provisions of subsection VI.5(c), all
determinations required to be made under this subsection VI.5, including whether
and when a Gross-Up Payment is required and the amount of such Gross-Up Payment
and the assumptions to be utilized in arriving at such determination, shall be
made by such nationally recognized certified public accounting firm as may be
designated by the Executive (the "Accounting Firm") which shall provide detailed
supporting calculations both to the Corporation and the Executive within fifteen
(15) business days of the receipt of notice from the Executive that there has
been a Payment, or such earlier time as is requested by the Corporation. All
fees and expenses of the Accounting Firm shall be borne solely by the
Corporation. Any Gross-Up Payment, as determined pursuant to this Ection VI.5,
shall be paid by the Corporation to the Executive within five (5) days after the
receipt of the Accounting Firm's determination. If the Accounting Firm
determines that no Excise Tax is payable by the Executive, it shall so indicate
to the Executive in writing. Any dtermineation by the Accounting Firm shall be
binding upon the Corporation and the Executive. As a result of the uncertainty
in the application of Section 4999 of the Code at the time of the initial
determination by the Accounting Firm hereunder, it is possible that Gross-Up
Payments which will not have been made by the Corporation should have been made
("Underpayment"), consistent with the calculations required to be made
hereunder. In the event that the Corporation exhausts its remedies pursuant to
subsection VI.5(c) and the Executive thereafter is required to make a payment of
any Excise Tax, the Accounting Firm shall determine the amount of the
Underpayment that has occurred and any such Underpayment shall be promptly paid
by the Corporation to or for the benefit of the Executive.
(c) The Executive shall notify the Corporation in writing of any claim
by the Internal Revenue Service that, if successful, would require the payment
by the Corporation of the Gross-Up Payment. Such notification shall be given as
soon as practicable but no later than ten (10) business days after the
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Executive is informed in writing of such claim and shall apprise the Corporation
of the nature of such claim and the date on which such claim is requested to be
paid. The Executive shall not pay such claim prior to the expiration of the
thirty (30) day period following the date on which it gives such notice to the
Corporation (or such shorter period ending on the date that any payment of taxes
with respect to such claim is due). If the Corporation notifies the Executive
in writing prior to the expiration of such period that it desires to contest
such claim, the Executive shall:
(1) give the Corporation any information requested by the Corporation
relating to such claim;
(2) take such action in connection with contesting such claim as the
Corporation shall reasonably request in writing from time to time,
including, without limitation, accepting legal representation with
respect to such claim by an attorney reasonably selected by the
Corporation;
(3) cooperate with the Corporation in good faith in order to effectively
contest such claim; and
(4) permit the Corporation to participate in any proceedings relating to
such claim;
provided, however, that the Corporation shall bear and pay directly all costs
- -------- -------
and expenses (including additional interest and penalties) incurred in
connection with such contest and shall indemnify and hold the Executive
harmless, on an after-tax basis, for any Excise Tax or income tax (including
interest and penalties with respect thereto, other than interest or penalties
imposed as a result of the failure of the Executive to file any tax return or
pay any tax (except any such failure to pay tax in accordance with the terms
hereof), required by applicable law to be filed or paid by the Executive)
imposed as a result of such representation and payment of costs and expenses.
Without limitation on the foregoing provisions of this subsection 5.5(c), the
Corporation shall control all proceedings taken in connection with such contest
and, at its sole option, may pursue or forego any and all administrative
appeals, proceedings, hearings and conferences with the taxing authority in
respect of such claim and may, at its sole option, either direct the Executive
to pay the tax claimed and sue for a refund or contest the claim in any
permissible manner, and the Executive agrees to prosecute such contest to a
determination before any administrative tribunal, in a court of initial
jurisdiction and in one or more appellate courts, as the Corporation shall
determine; provided, however, that if the Corporation directs the Executive to
-------- -------
pay such claim and sue for a refund, the Corporation shall advance the amount of
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such payment to the Executive, on an interest-free basis, and shall indemnify
and hold the Executive harmless, on an after-tax basis, from any Excise Tax or
income tax (including interest or penalties with respect thereto, other than
interest or penalties imposed as a result of the failure of the Executive to
file any tax return or pay any tax (except any such failure to pay tax in
accordance with the terms hereof), required by applicable law to be filed or
paid by the Executive) imposed with respect to such advance or with respect to
any imputed income with respect to such advance; and provided, further, that if
-------- -------
the Executive is required to extend the statute of limitations to enable the
Corporation to contest such claim, the Executive may limit this extension solely
to such contested amount. The Corporation's control of the contest shall be
limited to issues with respect to which a Gross-Up Payment would be payable
hereunder and the Executive shall be entitled to settle or contest, as the case
may be, any other issue raised by the Internal Revenue Service or any other
taxing authority.
(d) If, after the receipt by the Executive of an amount advanced by
the Corporation pursuant to subsection VI.5(c), the Executive becomes entitled
to receive any refund with respect to such claim, the Executive shall (subject
to the Corporation's complying with the requirements of subsection VI.5(c))
promptly pay to the Corporation the amount of such refund (together with any
interest paid or credited thereon after taxes applicable thereto). If, after
the receipt by the Executive of an amount advanced by the Corporation pursuant
to subsection VI.5(c), a determination is made that the Executive shall not be
entitled to any refund with respect to such claim and the Corporation does not
notify the Executive in writing of its intent to contest such denial of refund
prior to the expiration of thirty (30) days after such determination, then such
advance shall be forgiven and shall not be required to be repaid and the amount
of such advance shall offset, to the extent thereof, the amount of Gross-Up
Payment required to be paid.
ARTICLE VII
GENERAL
-------
VII.1 If the Executive's Date of Termination occurs for any reason,
subject to subsection VII.3 the Executive shall not be prohibited or restricted
in any manner whatsoever from obtaining employment with or otherwise forming or
participating in a business competitive to the business of Clark USA, the
Corporation or Subsidiary.
VII.2 If the Executive's Date of Termination occurs for any
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reason, the Executive shall not be subject to any duty or obligation to seek
alternate employment or other sources of income or benefits, or to mitigate his
damages, or to any similar duty or obligation, and, except as specifically
provided with respect to benefits in paragraph VI.1(d), all payment and other
obligations of the Corporation under this Agreement shall not be subject to any
rights of set-off, duty to mitigate or other reduction, and shall be paid and
performed in full notwithstanding any alternate employment or other sources of
income or benefits obtained or received or receivable by the Executive.
VII.3 The Executive agrees that he shall maintain the confidentiality of
any confidential or proprietary information concerning Clark USA, the
Corporation or any Subsidiary until the date, if any, upon which: (i) the
relevant information becomes available to the public or is made available to the
Executive from a source which is not bound by an obligation of confidentiality
to Clark USA, the Corporation or the relevant Subsidiary; or (ii) the Executive
is required to disclose such information by any court or governmental or
regulatory authority of competent jurisdiction (in which case the Executive
shall notify the Corporation and, after such notification, shall be entitled to
disclose or make use of such information only to the extent he is so required).
VII.4 Any notice required or permitted to be given under this Agreement
shall be in writing and shall be properly given if delivered by hand or mailed
by prepaid registered mail addressed as follows:
(a) in the case of the Corporation, to:
Clark Refining and Marketing, Inc.
8182 Maryland Avenue
St. Louis, Missouri 63105
Attention: Chairman of the Board of the Corporation
with a copy to:
Clark Refining and Marketing, Inc.
8182 Maryland Avenue
St. Louis, Missouri 63105
Attention: Secretary of Clark USA, Inc.
(b) in the case of the Executive, to:
PAUL D. MELNUK
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at the last address of the Executive in the records of the
Corporation
or to such other address as the parties may from time to time specify by notice
given in accordance herewith. Any notice so given shall be conclusively deemed
to have been given or made on the day of delivery, if delivered, or if mailed by
registered mail, upon the date shown on the postal return receipt as the date
upon which the envelope containing such notice was actually received by the
addressee.
VII.5 This Agreement shall enure to the benefit of and be binding upon the
Executive and his heirs, executors, administrators and other legal personal
representatives and upon the Corporation and its successors and assigns.
VII.6 As a condition of receipt of the benefits described in paragraphs
VI.1(a) through VI.1(e), the Executive will be required to enter into a full and
complete release of the Corporation from any and all claims which the Executive
may then have for whatever reason or cause in connection with the Executive's
employment and the termination of it (including, without limitation, any rights
under an employment agreement which may then be in effect), other than those
obligations specifically set out in this Agreement, and other than obligations
of Clark USA, the Corporation and the Subsidiaries to the extent that the
documents providing for such obligations specifically provide that the
obligations are in addition to obligations under this Agreement. In agreeing to
the terms set out in this Agreement, the Executive specifically agrees to
execute a formal release document to that effect and will deliver upon request
appropriate resignations from all offices and positions with Clark USA, the
Corporation and any Subsidiaries and Affiliates if, as, and when requested by
the Board upon the termination of employment within the circumstances
contemplated by this Agreement. To avoid future uncertainty as to the
interpretation of this Agreement, the parties hereto expressly agree that if
Paul Melnuk ceases to be President and Chief Executive Officer of the
Corporation, and no events constituting Good Reason have occurred, then nothing
in this Agreement shall adversely affect the rights of the Executive which may
arise by reason of such cessation under any other agreement or arrangement
between the Executive and the Corporation.
VII.7 Each of the Corporation and the Executive agrees to execute all such
documents and to do all such acts and things, in any case at the Corporation's
expense, as the other party may reasonably request and as may be lawful and
within its powers to
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do or to cause to be done in order to carry out and/or implement the provisions
of intent of this Agreement, including, without limitation, seeking all such
governmental, regulatory and other third party approvals as may be necessary or
desirable. Without limiting the generality of the foregoing, the Corporation
agrees to execute all such documents and to do all such acts and things as the
Executive may reasonably request and as may be lawful and within the power of
the Corporation to do or cause to be done in order to minimize any tax
consequences to the Executive or his legal personal representatives in respect
of the payment or performance by the Corporation of the obligations of the
Corporation upon termination arising under Article V or in respect of other
payments or actions required to be made or taken by or on behalf of the
Corporation in the event of termination of the Executive's employment hereunder;
provided that the Corporation shall in no material way be prejudiced thereby.
VII.8 This Agreement may be amended only by an instrument in writing
signed by both parties.
VII.9 Neither party may waive or shall be deemed to have waived any right
it has under this Agreement (including under this subsection VII.9) except to
the extent that such waiver is in writing.
IN WITNESS WHEREOF this Agreement has been executed by the parties hereto.
CLARK REFINING AND MARKETING, INC.
By___________________________
___________________________
SIGNED, SEALED AND DELIVERED )
in the presence of )
)
)
______________________________)
) ___________________________
______________________________) EXECUTIVE
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