<PAGE> 1
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (D) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1994
-------------------------------------------------
--------------------
Commission file number 1-5254
----------------
MAPCO INC.
- - --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 73-0705739
- - -------------------------------------------- ---------------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1800 South Baltimore Avenue, Tulsa, Oklahoma 74119
- - -------------------------------------------- ---------------------------------
(Address of principal executive offices) (Zip Code)
(918) 581-1800
- - --------------------------------------------------------------------------------
(Registrant's telephone number, including area code)
No Changes
- - --------------------------------------------------------------------------------
(Former name, former address and former fiscal year,
if changes since last report)
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by section 13 or 15 (d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to
file such reports), and has been subject to such filing
requirements for the past 90 days. Yes X . No .
----- -----
On May 9, 1994, 29,983,635 shares of MAPCO Inc. Common Stock, $1 par
value, were outstanding.
This report contains 102 pages
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MAPCO Inc.
Index
Page Number
-----------
PART I. Financial Information:
Condensed Consolidated Statements of Income
for the three months ended March 31, 1994
and 1993 3
Condensed Consolidated Balance Sheets,
March 31, 1994 and December 31, 1993 4
Condensed Consolidated Statements of Cash
Flows for the three months ended March 31,
1994 and 1993 5
Notes to Condensed Consolidated Financial
Statements 6 - 10
Management's Discussion and Analysis of
Financial Condition and Results of Operations 11 - 15
PART II. Other Information 16
List of Exhibits 16
Signatures 17
Index to Exhibits 18
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<PAGE> 3
PART I
FINANCIAL INFORMATION
MAPCO INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
Dollars and Shares in Millions
except per share amounts
(Unaudited)
<TABLE>
<CAPTION>
Three Months
Ended March 31,
-------------------------------
1994 1993
-------- --------
<S> <C> <C>
Sales and Operating Revenues (1) $ 692.1 $ 691.7
--------- --------
Expenses:
Outside purchases and operating expenses(1) 576.5 593.1
Selling, general and administrative 16.9 16.1
Depreciation, depletion and amortization 24.4 23.6
Interest and debt expense 12.3 10.3
Other income - net (1.4) (.5)
--------- --------
628.7 642.6
--------- --------
Income Before Provision for
Income Taxes 63.4 49.1
--------- --------
Provision for Income Taxes:
Current 19.3 14.3
Deferred 2.4 .6
--------- --------
21.7 14.9
--------- --------
Income Before Minority Interest 41.7 34.2
Minority Interest in Earnings of Subsidiary (.3) (.3)
--------- --------
Net Income $ 41.4 $ 33.9
========= ========
Earnings per Common Share $ 1.38 $ 1.13
Average Common Shares Outstanding 30.0 30.0
Cash Dividends per Common Share $ .25 $ .25
- - -------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Includes consumer excise taxes of $39.0 million and $33.6 million for
the three months ended March 31, 1994 and 1993, respectively.
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MAPCO INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
Dollars in Millions
<TABLE>
<CAPTION>
March 31, 1994 December 31,
(Unaudited) 1993
-------------- ------------
<S> <C> <C>
Current Assets:
Cash and cash equivalents $ 118.4 $ 69.8
Receivables 209.7 228.8
Inventories (Note 3) 79.3 113.4
Prepaid expenses 36.3 27.3
Other current assets 21.4 16.9
--------- --------
Total current assets 465.1 456.2
--------- --------
Property, Plant and Equipment, at cost 2,355.7 2,341.8
Less - Accumulated depreciation
and depletion (993.6) (974.5)
--------- --------
1,362.1 1,367.3
--------- --------
Other Assets 134.9 117.3
--------- --------
$ 1,962.1 $1,940.8
========= ========
Current Liabilities:
Current maturities of long-term debt $ 12.8 $ 12.8
Accounts payable 206.6 247.1
Accrued taxes 65.1 47.3
Accrued payroll and related expenses 16.2 21.2
Other current liabilities 78.5 54.5
--------- --------
Total current liabilities 379.2 382.9
--------- --------
Long-Term Debt (Note 4) 565.5 585.5
--------- --------
Other Liabilities 111.7 101.6
--------- --------
Deferred Income Taxes 275.9 273.5
--------- --------
Minority Interest 23.3 23.0
--------- --------
Contingencies (Note 6)
--------- --------
Stockholders' Equity (Note 5):
Common stock 62.8 62.7
Capital in excess of par value 200.2 200.0
Retained earnings 1,340.6 1,306.7
--------- --------
1,603.6 1,569.4
Less:
-Treasury stock, at cost (928.9) (926.9)
-Loan to ESOP (68.2) (68.2)
--------- --------
606.5 574.3
--------- --------
$ 1,962.1 $1,940.8
========= ========
</TABLE>
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MAPCO INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Note 2)
Dollars in Millions
(Unaudited)
<TABLE>
<CAPTION>
Three Months
Ended March 31,
-------------------------------
1994 1993
-------- --------
<S> <C> <C>
Cash Flows from Operating Activities:
Net Income $ 41.4 $ 33.9
Reconciliation of net income to net cash
provided by operating activities:
Depreciation, depletion and amortization 24.4 23.6
Provision for deferred income taxes 2.4 .6
Other items not requiring cash (Note 2) 2.8 2.6
--------- --------
Funds provided by operations 71.0 60.7
Changes in operating assets and
liabilities (Note 2) 25.3 12.6
--------- --------
Net cash provided by operating activities 96.3 73.3
--------- --------
Cash Flows from Investing Activities:
Capital expenditures and acquisitions, net of
liabilities assumed (22.3) (59.1)
Proceeds from sales of property, plant and
equipment 4.2 3.1
Other .1 .6
--------- --------
Net cash used in investing activities (18.0) (55.4)
--------- --------
Cash Flows from Financing Activities:
Purchase of common stock (2.0) (.3)
Decrease in borrowings (20.0) (37.5)
Dividends (7.5) (7.5)
Issuance of long-term debt -- .4
Payments on long-term debt -- (.1)
Exercise of stock options -- .7
Other (.2) .2
--------- --------
Net cash used in financing activities (29.7) (44.1)
--------- --------
Increase (Decrease) in Cash and Cash Equivalents 48.6 (26.2)
Cash and Cash Equivalents, January 1 69.8 55.7
--------- --------
Cash and Cash Equivalents, March 31 $ 118.4 $ 29.5
========= ========
</TABLE>
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MAPCO INC.
Notes to Condensed Consolidated Financial Statements
Note 1 - In the opinion of Management, the accompanying condensed consolidated
financial statements of MAPCO Inc. ("MAPCO" or the "Company") contain all
adjustments necessary to present fairly the financial position as of March 31,
1994 (unaudited) and December 31, 1993, the results of operations for the three
months ended March 31, 1994 and 1993 (both unaudited) and the cash flows for
the three months ended March 31, 1994 and 1993 (both unaudited). Certain
reclassifications have been made to prior year numbers to conform to current
year presentations. All significant intercompany accounts and transactions
have been eliminated.
Note 2 - Statements of Cash Flows
Other items not requiring (providing) cash reported in cash flows from
operating activities consist of (in millions):
<TABLE>
<CAPTION>
Three Months Ended March 31, 1994 1993
- - -------------------------------------------------------------------------------------------------------
<S> <C> <C>
Net periodic pension (income) expense $ .1 $ (.3)
Gain on sales of property, plant
and equipment (.3) (.1)
Minority interest .3 .3
Refinery turnaround accrual .8 .8
Other non-cash income and expense items, net 1.9 1.9
---------- ---------
$ 2.8 $ 2.6
========== =========
</TABLE>
Changes in operating assets and liabilities consist of (in millions):
<TABLE>
<CAPTION>
Three Months Ended March 31, 1994 1993
- - -------------------------------------------------------------------------------------------------------
<S> <C> <C>
Decrease (increase) in:
Receivables $ 19.1 $ (31.4)
Inventories 34.1 3.5
Prepaid expenses and other current assets (7.5) 1.8
Other assets (6.9) (1.2)
Increase (decrease) in:
Accounts payable and accrued expenses (29.7) 31.3
Accrued taxes 19.7 10.9
Other liabilities (3.5) (2.3)
---------- ---------
$ 25.3 $ 12.6
========== =========
</TABLE>
Income taxes (refunded) paid were ($.3) million and $5.3 million for the three
months ended March 31, 1994 and 1993, respectively.
Interest paid, net of amounts capitalized, was $1.6 million and $3.8 million
for the three months ended March 31, 1994 and 1993, respectively.
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Note 3 - Inventories
Inventories consist of (in millions):
<TABLE>
<CAPTION>
March 31, December 31,
1994 1993
--------- ------------
<S> <C> <C>
Raw materials-
Crude Oil $ 10.2 $ 25.6
---------- ---------
Finished products:
Refined petroleum products 33.1 24.9
Fertilizer and natural gas liquids 14.0 46.0
Retail merchandise 12.6 12.1
Coal 9.4 4.8
---------- ---------
69.1 87.8
---------- ---------
Total Inventories $ 79.3 $ 113.4
========== =========
</TABLE>
The cost to replace crude oil, refined petroleum products and retail
merchandise inventories in excess of last-in, first-out (LIFO) carrying values
was $7.7 million at March 31, 1994 and $6.5 million at December 31, 1993.
Note 4 - Long-Term Debt
Long-term debt consists of (in millions):
<TABLE>
<CAPTION>
March 31, December 31,
1994 1993
---------- ------------
<S> <C> <C>
MAPCO Inc.
- - ----------
Commercial paper $ -- $ 20.0
8.43% ESOP Notes, payable in mortgage type
principal reductions annually through 2003 68.2 68.2
Medium Term Notes, various maturities through 2022 342.8 342.8
---------- ---------
411.0 431.0
---------- ---------
Subsidiaries
- - ------------
Senior Notes:
8.51% Notes, payable $15.0 in 2007 15.0 15.0
8.95% Notes, payable $35.5 in 2012 35.5 35.5
8.20% Notes, payable $2.5 annually 2007 through 2012 15.0 15.0
8.59% Notes, payable $14.5 in 2017 14.5 14.5
8.70% Notes, payable $2.0 annually 2018 through 2022 10.0 10.0
6.67% Notes, payable $15.0 annually 2001 through 2005 75.0 75.0
Other 2.3 2.3
---------- ---------
167.3 167.3
---------- ---------
578.3 598.3
Less - current maturities (12.8) (12.8)
---------- ---------
Long-term debt $ 565.5 $ 585.5
========== =========
</TABLE>
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<PAGE> 8
Note 4 - Long-Term Debt (continued)
Interest rates on commercial paper ranged from 3.10% to 4.27% at December 31,
1993. Commercial paper outstanding at December 31, 1993 was classified as
long-term debt. MAPCO had the ability and the intent, if necessary, under a
bank credit agreement to refinance commercial paper with long-term debt having
maturities in excess of one year.
As of March 31, 1994, MAPCO had $342.8 million of Medium Term Notes
outstanding. The Notes mature at various times through 2022 and bear interest
at rates ranging from 7.00% to 8.87%.
Various loan agreements contain restrictive covenants which, among other
things, limit the payment of advances or dividends by two Natural Gas Liquids'
subsidiaries to MAPCO. At March 31, 1994, $191 million of net assets were
restricted by such provisions.
MAPCO's bank credit agreement was renegotiated in April 1994 and is for a
committed line of credit of $300 million. The total commitment under the bank
credit agreement reduces in quarterly amounts of $25 million beginning June 30,
1998. In addition to maintaining the current commitment amount at $300
million, certain restrictive covenants were amended. As of March 31, 1994, no
borrowings were outstanding under the prior bank credit agreement.
Note 5 - Employee Benefit Plans
With respect to the ESOP, during the first quarter of 1994 and 1993, MAPCO
recognized $.6 million and $.5 million, respectively, as compensation expense
and $1.4 million and $1.5 million, respectively, as interest expense.
Dividends on the MAPCO common stock owned by the ESOP were $.6 million in the
first quarters of 1994 and 1993 and will be used for debt service.
Note 6 - Contingencies
State Royalty Oil Claim
The refining and marketing arm of the Company, MAPCO Petroleum Inc., operates a
refinery in Alaska through its subsidiary, MAPCO Alaska Petroleum Inc.
("MAPI"). Since 1978, MAPI (and/or its predecessor) has had long-term
agreements with the State of Alaska (the "State") to purchase royalty oil from
the State at prices linked to amounts payable by North Slope oil producers in
satisfaction of their royalty obligations to the State. In 1977, the State
commenced suit against the producers (in an action entitled State of Alaska v.
Amerada Hess, et al.) alleging that they incorrectly calculated their royalty
payments.
As of April 1992, the State had settled its royalty oil claims against all of
the producers. On the basis of these settlements, the State billed MAPI for
retroactive increases in the prices paid by MAPI under all four of its royalty
oil purchase agreements. The State's claim against MAPI is based upon the
difference between the volume weighted
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<PAGE> 9
Note 6 - Contingencies (continued)
average paid by the producers and the revised royalty values adopted by the
State. MAPI has been paying the State under a contractual pricing formula
which resulted in prices in excess of the volume weighted average of the
producers' past royalty reports.
On August 28, 1992, MAPI commenced suit against the State in an Anchorage State
Court seeking a declaratory judgment that MAPI is not liable to the State for
any retroactive price increase under its primary royalty oil purchase agreement
(the "1978 Agreement"). That same date, MAPI invoked the arbitration provision
of the agreement under which it had purchased the second largest amount of
State royalty oil (the "1977 Agreement"), again seeking a determination that it
is not liable for any retroactive price increase. On February 5, 1993, MAPI
filed suit in Anchorage State Court as to the remaining two agreements (the
"1984 and 1985 Agreements").
The State's claim, based upon invoices submitted to MAPI on October 1, 1992, is
comprised of claims for retroactive price adjustments (including interest
through varying dates in October 1992) of $98 million, $9.2 million, $2.9
million and $6.4 million under the 1978, 1977, and 1984 and 1985 Agreements,
respectively. In addition, MAPI could be responsible for interest subsequent
to the billing dates.
MAPI is the only royalty-in-kind purchaser that has not settled the State's
retroactive billing claims. The Company believes that it has defenses of
considerable merit as to the State's claims and is vigorously litigating all
pending disputes, but is not able to predict the ultimate outcome at this time.
The Company has accrued an estimate of certain amounts, including legal fees,
which it may incur in connection with the final resolution of these matters;
however, a resolution unfavorable to the Company could result in material
liabilities which have not been reflected in the accompanying consolidated
financial statements.
Texas Explosion Litigation
On April 7, 1992, a liquefied petroleum gas explosion occurred near an
underground salt dome storage facility located near Brenham, Texas and owned by
an affiliate of the Company, Seminole Pipeline Company ("Seminole"). The
National Transportation Safety Board and the Texas Railroad Commission
essentially determined that the probable cause of the explosion was the result
of overfilling the storage facility.
The Company, as well as Seminole, Mid-America Pipeline Company and other
non-MAPCO entities have been named as defendants in civil actions filed in
state district courts in Texas. During 1993, the Company received
reimbursements from its insurers for settlements which disposed of all the
death claims and substantially all of the serious injury claims resulting from
the incident. The Company believes that complete resolution of the remaining
actions by litigation or settlement, after reimbursement of insurance coverage,
will not have a material adverse effect on the Company's business, results of
operations or consolidated financial position.
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Note 6 - Contingencies (continued)
General Litigation
The Company and its subsidiaries are involved in various other lawsuits, claims
and regulatory proceedings incidental to their businesses. In the opinion of
management, the outcome of such matters will not have a material adverse effect
on the Company's business, consolidated financial position or results of
operations.
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<PAGE> 11
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
First quarter 1994 results were impacted by three major events:
- - - Crude prices were significantly lower than in 1993 which substantially
improved margins at the Memphis and North Pole Refineries.
- - - Producers in the Rocky Mountain area were retaining ethane in the
natural gas streams because of depressed ethane prices on the Gulf
Coast which negatively impacted transportation revenues.
- - - Transportation expenses included $7 million incurred to test and
refurbish a section of pipeline in connection with the commencement of
a new long-term contract.
<TABLE>
<CAPTION>
Sales and Operating Revenues
--------------------------------------
(in millions)
Three Months Ended March 31, 1994 1993 Variance
------ ------ --------
<S> <C> <C> <C>
Natural Gas Liquids $130.4 $ 128.7 $ 1.7
Petroleum 476.6 474.1 2.5
Coal 102.3 100.2 2.1
Eliminations (17.2) (11.3) (5.9)
------ ------- ------
$692.1 $ 691.7 $ 0.4
====== ======= ======
</TABLE>
The $1.7 million increase in Natural Gas Liquids sales and operating revenues
was due to increased heating market demand resulting from colder weather,
additional volumes from new plant connections and the completion of the
Seminole Loop project. These favorable factors were partially offset by the
negative impact of ethane rejection and lower natural gas liquids and retail
propane sales prices.
Petroleum's sales and operating revenues increased $2.5 million because higher
NGL trading activity more than offset lower sales at both the North Pole and
Memphis Refineries. NGL trading activity was significantly higher because
favorable sales prices provided improved trading opportunities. Refinery sales
decreased $16 million from the prior year because lower sales prices more than
offset a 7% increase in total sales volumes.
Coal's sales and operating revenues increased $2.1 million primarily due to
increased brokerage activity and higher sales by the Mettiki Mine, partially
offset by lower sales at the Martiki and Pontiki Coal Mines. Mettiki's sales
increase reflects higher production as a result of fewer operating problems in
1994 and the installation of new longwall shields in March 1993. The decrease
in sales at the Martiki and Pontiki Mines reflects reduced production due to
severe weather and a weak Eastern Appalachian spot market.
11 of 102
<PAGE> 12
Outside purchases and operating expenses decreased $16.6 million in the first
quarter of 1994 compared to 1993. Details by segment are as follows (in
millions):
<TABLE>
<CAPTION>
Three Months Ended March 31,
1994 1993
------------------------- -------------------------
Outside Operating Outside Operating
Purchases Expense Purchases Expense
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Natural Gas Liquids $ 32.9 $ 48.6 $ 37.9 $ 43.9
Petroleum 374.5 39.5 395.2 38.2
Coal 8.9 72.1 6.2 71.7
--------- ------- -------- ---------
$ 416.3 $ 160.2 $ 439.3 $ 153.8
========= ======= ======== =========
</TABLE>
Natural Gas Liquids' outside purchases decreased $5.0 million primarily because
of lower prices on propane purchases. Operating expenses increased $4.7
million principally as a result of testing and refurbishing pipeline in
connection with the commencement of a new long-term contract.
Petroleum's outside purchases were $20.7 million lower reflecting lower crude
and product costs at the North Pole and Memphis Refineries. Partially
offsetting the lower refinery purchases were higher NGL purchase costs for
Trading activities.
Coal's outside purchases exceeded last year by $2.7 million primarily due to
increased coal brokerage activities.
The increase in depreciation, depletion and amortization over 1993 was
primarily due to additional depreciation charges associated with the Seminole
Loop project.
Commercial paper outstanding was substantially reduced in the fourth quarter of
1993 and completely repaid in the first quarter of 1994. Although little
commercial paper was outstanding in the first quarter of 1994 compared to 1993,
interest and debt expense increased $2.0 million over the 1993 quarter because
of the issuance of $75 million of Senior Notes by Seminole Pipeline in the
fourth quarter of 1993, and because less interest was capitalized in 1994 than
in 1993 reflecting completion of the Seminole Loop project.
The effective income tax rate for the first quarter of 1994 was 34.2% compared
to 30.3% in the first quarter of 1993. The increase is primarily due to the
higher corporate income tax rate included in the Omnibus Budget Reconciliation
Act of 1993, and because the effective tax rate in 1993 was reduced 1.8% by the
adoption of Statement of Financial Accounting Standards No. 109, Accounting for
Income Taxes. The difference between the statutory Federal income tax rate of
35% and the effective income tax rate is primarily due to statutory depletion,
partially offset by state taxes.
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<PAGE> 13
Operating profit for the three months ended March 31, 1994 and 1993 is detailed
below (in millions):
<TABLE>
<CAPTION>
Operating Profit
-------------------------------
1994 1993 Variance
------ ------ --------
<S> <C> <C> <C>
Natural Gas Liquids $ 33.2 $ 37.6 $ (4.4)
Petroleum 36.4 12.9 23.5
Coal 11.4 12.5 (1.1)
------- ------ -------
$ 81.0 $ 63.0 $ 18.0
======= ====== =======
</TABLE>
Natural Gas Liquids' operating profit decrease of $4.4 million was primarily
attributable to the expenses associated with testing and refurbishing pipeline
in connection with the commencement of a new long-term contract, although
transportation revenues were higher despite the overall impact of ethane
rejection. Retail propane operating profit increased over last year by $2
million, despite fewer plants, because product costs decreased more than retail
sales prices. However, lower operating profit by the Westpan gas plants due to
lower NGL sales prices offset the increase in retail propane operating profit.
Petroleum's operating profit improved $23.5 million over 1993 because of higher
margins at both the Memphis and North Pole Refineries. The higher margins
resulted from lower crude costs.
Coal's operating profit decreased $1.1 million because higher operating profit
by the Mettiki Mine was more than offset by lower operating profit by the
Martiki and Pontiki Mines. Mettiki's higher operating profit reflects
increased production as a result of fewer operating problems in 1994 and new
longwall shields installed in March 1993. Martiki's and Pontiki's lower
operating profits are primarily attributable to lower production resulting from
severe weather in early 1994 and higher overburden stripping ratios at the
Martiki Mine in the current quarter.
MAPCO's consolidated first quarter net income in 1994 was $41.4 million or
$1.38 per share compared to $33.9 million or $1.13 per share in 1993. Average
common shares outstanding were 30.0 million in both the 1994 and 1993 quarter.
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<PAGE> 14
FINANCIAL CONDITION
Cash Generation
Cash generation was as follows (in millions):
<TABLE>
<CAPTION>
Three Months Ended March 31, 1994 1993
---------------------------- -------- --------
<S> <C> <C>
Funds provided by operations $ 71 $ 61
Changes in operating assets and liabilities 25 12
-------- --------
Net cash provided by operating activities 96 73
Net cash used in investing activities (18) (55)
Net cash used in financing activities (29) (44)
-------- --------
Cash Generation (Usage) $ 49 $ (26)
======== ========
</TABLE>
Funds provided by operations in 1994 improved as compared to 1993, primarily
due to favorable margins in the Petroleum segment. Capital expenditures in
1994 were $22 million, of which $14 million was for capital items necessary to
maintain existing operations, compared to $59 million in 1993, of which $11
million was for capital items necessary to maintain existing operations. The
1993 capital expenditures included $37 million for the expansion of Seminole
Pipeline which began deliveries to Mont Belvieu, Texas on May 1, 1993.
In 1994 cash was used in financing activities to reduce commercial paper
borrowings by $20 million, pay $8 million of dividends and repurchase 33,900
shares of MAPCO common stock.
Capitalization
Capitalization, which includes long-term debt (excluding current maturities)
and stockholders' equity, increased from $1,160 million at December 31, 1993 to
$1,172 million at March 31, 1994. MAPCO's long-term debt as a percent of
capitalization was 48% at March 31, 1994 compared to 50% at December 31, 1993.
The 1994 changes reflect the favorable impact of 1994 operating results on
stockholders' equity and the utilization of increased cash flow from operations
to reduce borrowings.
Various loan agreements contain restrictive covenants which, among other
things, limit the payment of advances or dividends by two Natural Gas Liquids'
subsidiaries to MAPCO. At March 31, 1994, $191 million of net assets were
restricted by such provisions.
Liquidity and Capital Resources
MAPCO's primary sources of liquidity are its cash and cash equivalents,
internal cash generation, and external financing. At March 31, 1994, MAPCO had
$118 million of cash and cash equivalents compared to $70 million at December
31, 1993.
MAPCO's external financing sources include its bank credit agreement, its
uncommitted bank credit lines, and its ability to issue public or
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<PAGE> 15
private debt, including commercial paper. MAPCO's bank credit agreement was
renegotiated in April 1994 and is for a committed line of credit of $300
million. The total commitment under the bank credit agreement reduces in
quarterly amounts of $25 million beginning June 30, 1998. In addition to
maintaining the current commitment amount at $300 million, certain restrictive
covenants were amended. This agreement serves as a back-up for commercial
paper and bank borrowings outstanding. As of March 31, 1994, no borrowings
were outstanding under the prior bank credit agreement.
In 1990, MAPCO filed a shelf registration statement with the Securities and
Exchange Commission providing for the issuance of up to $400 million of debt
securities. As of March 31, 1994, MAPCO had outstanding $343 million of Medium
Term Notes under this registration. MAPCO has the authorization to issue up to
an additional $47 million of Medium Term Notes. The proceeds from any debt
issued under the shelf registration statement have been and will continue to be
used for general corporate purposes, including working capital, capital
expenditures, reduction of other debt and acquisitions.
MAPCO's existing debt and credit agreements contain covenants which limit the
amount of additional indebtedness the Company can incur. Management believes,
however, that MAPCO has sufficient capacity to fund its anticipated needs.
Capital expenditures in 1994 are expected to be approximately $171 million, of
which approximately $106 million will be for expansion projects and $7 million
for environmental projects. MAPCO's long-term liquidity is expected to
increase since cash generated from operations is anticipated to exceed
currently projected capital expenditures, environmental projects, debt service
and dividends. MAPCO anticipates that future excess internal cash generation
will be used primarily to fund new capital projects.
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<PAGE> 16
PART II
OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a). Exhibits
Exhibit 4(g) - Competitive Advance and Revolving Credit Facility
Agreement dated as of April 29, 1994, among MAPCO Inc., Chemical
Bank as Agent for the Lenders and the Lenders Named Therein (Filed
Herewith.)
Exhibit 11 - Statement Regarding Computation of Per Share Earnings.
Exhibit 12 - Computation of Ratio of Earnings to Fixed Charges.
(b). The Company did not file any reports on Form 8-K during the quarter
ended March 31, 1994.
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<PAGE> 17
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.
MAPCO Inc.
Date May 10, 1994 /s/ Frank S. Dickerson, III
Frank S. Dickerson, III
Senior Vice President,
Chief Financial Officer and
Treasurer
Date May 10, 1994 /s/ Donald R. Wellendorf
Donald R. Wellendorf
Vice President and Controller
17 of 102
<PAGE> 18
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Page
Number
------
<S> <C> <C>
Exhibit 4(g) Competitive Advance and Revolving Credit Facility
Agreement dated as of April 29, 1994, among MAPCO
Inc., Chemical Bank, as Agent and the Lenders Named
Herein 19
Exhibit 11 Statement Regarding Computation of Per Share Earnings 98
Exhibit 12 Computation of Ratio of Earnings to Fixed Charges 101
</TABLE>
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EXHIBIT 4(g)
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- - --------------------------------------------------------------------------------
COMPETITIVE ADVANCE
AND REVOLVING CREDIT
FACILITY AGREEMENT
DATED AS OF APRIL 29, 1994
AMONG
MAPCO INC.,
CHEMICAL BANK, AS AGENT
AND
THE LENDERS NAMED HEREIN
- - --------------------------------------------------------------------------------
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<PAGE> 3
EXHIBITS
A-1 Form of Revolving Credit Note
A-2 Form of Competitive Note
B-1 Form of Competitive Bid Request
B-2 Form of Notice of Revolving Credit Borrowing
C Form of Notice of Competitive Bid Request
D Form of Competitive Bid
E Form of Assignment and Acceptance
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<PAGE> 4
COMPETITIVE ADVANCE AND REVOLVING
CREDIT FACILITY AGREEMENT dated as April
29, 1994, between MAPCO INC., a Delaware
corporation (hereinafter the "Borrower"),
the Lenders named in Section 2.01 hereof
(hereinafter collectively the "Lenders")
and CHEMICAL BANK, a New York banking
corporation, as agent for the Lenders
(hereinafter in such capacity the "Agent").
The Borrower has applied to the Lenders for a revolving
credit facility in the aggregate principal amount not in excess of $300,000,000
at any time outstanding to replace the Existing Credit Agreement. In addition,
the Borrower has requested that the Lenders provide a procedure pursuant to
which each Lender may bid on an uncommitted basis on borrowings by the
Borrower. The proceeds of such loans are to be employed for capital
expenditures and other general corporate purposes, including acquisitions. The
Lenders are severally, and not jointly, willing to make Loans (as hereinafter
defined) to the Borrower, subject to the terms and conditions hereinafter set
forth. Accordingly, the Borrower, the Lenders and the Agent agree as follows:
1. DEFINITIONS
For purposes hereof, the following terms shall have the
meanings specified below:
"Adjusted LIBO Rate" shall mean, with respect to any
Eurodollar Loan made as a Revolving Credit Loan, for any Interest Period, an
interest rate per annum rounded upwards, if necessary, to the next 1/16 of 1%
equal to the product of (i) the LIBO Rate in effect for such Interest Period
and (ii) Statutory Reserves.
"Administrative Fees" shall have the meaning assigned to
such term in Section 2.08(b).
"Alternate Base Loan" shall mean a Loan based on the
Alternate Base Rate in accordance with Article 2 hereof.
"Alternate Base Rate" for any day means a rate per annum
(rounded upwards, if necessary, to the next 1/16 of 1%) equal to the greatest
of (a) the Prime Rate in effect on such day, (b) the Base CD Rate in effect on
such day plus 1% and (c) the Federal Funds Effective Rate in effect on such day
plus 1/2 of 1%. "Prime Rate" shall mean the rate of interest publicly
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announced from time to time by the Agent at its principal office in New York
City as its prime rate. "Base CD Rate" shall mean the sum of (a) the product
of (i) the Three-Month Secondary CD Rate times (ii) Statutory Reserves and (b)
the Assessment Rate. "Three-Month Secondary CD Rate" shall mean, for any day,
the secondary market rate for three-month certificates of deposit reported as
being in effect on such day (or, if such day is not a Business Day, the next
preceding Business Day) by the Board through the public information telephone
line of the Federal Reserve Bank of New York (which rate will, under current
practices of the Board, be published in Federal Reserve Statistical Release
H.15(519) during the week following such day), or, if such rate shall not be so
reported on such day or such next preceding Business Day, the average of the
secondary market quotations for three-month certificates of deposit of major
money center banks in New York City received at 10:00 a.m., New York City time,
on such day (or, if such day shall not be a Business Day, on the next preceding
Business Day) by the Agent from three New York City negotiable certificate of
deposit dealers of recognized standing selected by it. "Federal Funds
Effective Rate" shall mean, for any day the weighted average of the rates on
overnight Federal funds transactions with members of the Federal Reserve System
arranged by Federal funds brokers, as published on the next succeeding Business
Day by the Federal Reserve Bank of New York, or, if such rate is not so
published for any day which is a Business Day, the average of the quotations
for the day of such transactions received by the Agent from three Federal funds
brokers of recognized standing selected by it. If for any reason the Agent
shall have determined (which determination shall be made in good faith and
conclusive absent manifest error) that it is unable to ascertain the Base CD
Rate or the Federal Funds Effective Rate for any reason, including, without
limitation, the inability or failure of the Agent to obtain sufficient bids in
accordance with the terms hereof, the Alternate Base Rate shall be determined
without regard to clause (b) or (c), or both, of the first sentence of this
definition, as appropriate, until the circumstances giving rise to such
inability no longer exist. Any change in the Alternate Base Rate due to a
change in the Prime Rate, Three-Month Secondary CD Rate or the Federal Funds
Effective Rate shall be effective on the effective date of such change in the
Prime Rate, the Secondary CD Rate or the Federal Funds Effective Rate,
respectively.
"Applicable Margin" shall mean, at any date or for any
period of determination, the Applicable Margin that would be in effect on such
date or during such period pursuant to the chart set forth in Section 2.09
based on the rating of the Borrower's senior unsecured long term debt.
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<PAGE> 6
"Assessment Rate" for any Interest Period shall mean the
annual rate (rounded upwards, if necessary, to the next higher 1/100 of 1%)
most recently estimated (such estimate to be made in good faith) by the Agent
as the then current net annual assessment rate that will be employed for
determining amounts payable by the Agent to the Federal Deposit Insurance
Corporation ("FDIC"), or any successor thereto, for insurance by the FDIC of
time deposits made in dollars at the Agent's domestic offices.
"Assignment and Acceptance" shall mean an assignment and
acceptance entered into by a Lender and an Assignee, and accepted by the Agent,
in the form of Exhibit E.
"Basis Point" shall mean 1/100th of 1%.
"Board" shall mean the Board of Governors of the Federal
Reserve System of the United States.
"Borrowing" shall mean a Revolving Credit Borrowing or a
Competitive Borrowing.
"Business Day" shall mean any day other than a Saturday,
Sunday or legal holiday in the State of New York on which banks are open for
business in New York City except that, if any determination of a "Business Day"
shall relate to a Eurodollar Loan, the term "Business Day" in addition shall
exclude any day on which banks are not open for dealings in dollar deposits in
the London Interbank Market.
"Commitment" shall mean with respect to each Lender, the
Commitment of such Lender as set forth in Section 2.01, as the same may be
reduced from time to time pursuant to Section 2.02 or Section 2.10. The
Commitment of each Lender shall be deemed permanently terminated on the
Maturity Date.
"Competitive Bid" shall mean an offer by a Lender to make a
Competitive Loan pursuant to Section 2.02(b).
"Competitive Bid Rate" shall mean, as to any Competitive Bid
made by a Lender pursuant to Section 2.02(b), (i) in the case of a Eurodollar
Loan, the Margin and (ii) in the case of a Fixed Rate Loan, the fixed rate of
interest offered by the Lender making such Competitive Bid.
"Competitive Bid Request" shall mean a request made pursuant
to Section 2.02(a) in the form of Exhibit B-1.
"Competitive Borrowing" shall mean a borrowing consisting of
concurrent Competitive Loans from each of the
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Lenders whose Competitive Bid as a part of such borrowing has been accepted by
the Borrower under the bidding procedure described in Section 2.02.
"Competitive Loan" shall mean a Loan from a Lender to the
Borrower pursuant to the bidding procedure described in Section 2.02.
"Competitive Note" shall have the meaning assigned to such
term in Section 2.05(a).
"Consolidated Capitalization" shall mean, at any time, for
the Borrower and its Subsidiaries on a consolidated basis, the sum of (i)
stockholders' equity as reflected on the most recent financial statements
delivered to the Lenders pursuant to Section 3.03 or 5.03(a) hereof and (ii)
Consolidated Funded Indebtedness.
"Consolidated-EBIT" shall mean, for any period, for the
Borrower and its Subsidiaries on a consolidated basis, without duplication, the
sum for such period of (i) Consolidated Net Income (excluding any net after-tax
gains or losses attribut- able to sales of non-current assets or assets held
for divestiture or write-downs of such assets in anticipation of losses to the
extent they have decreased Consolidated Net Income), (ii) Consolidated Interest
Expense, (iii) provision for income taxes on income or excess profits for such
period and (iv) the non-cash portion of any extraordinary after-tax losses
minus any extraordinary after-tax gains, all as determined for such period in
accordance with generally accepted accounting principles.
"Consolidated Funded Indebtedness" shall mean Consolidated
Senior Funded Indebtedness plus Subordinated Indebtedness.
"Consolidated Interest Expense" shall mean, for any period,
interest expense, whether paid or accrued, on all Indebtedness of the Borrower
and its Subsidiaries on a consolidated basis for such period, including,
without limitation or duplication, (a) interest expense in respect of the Loans
and the Subordinated Indebtedness and (b) commissions and other fees and
charges payable in connection with letters of credit, all net of consolidated
interest income paid to the Borrower and its Subsidiaries and all determined in
accordance with generally accepted accounting principles.
"Consolidated Net Assets" shall mean the sum of (i) the
consolidated assets of the Borrower and the Subsidiaries
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(excluding the Borrower's equity interest in Seminole) less, without
duplication, (a) consolidated current liabilities (excluding current maturities
of Consolidated Funded Indebtedness), (b) asset, liability, contingency and
other appropriate reserves, including reserves for depreciation and for
deferred income taxes, (c) minority interests in Subsidiaries, (d) all other
long-term liabilities other than liabilities for Consolidated Funded
Indebtedness representing obligations for borrowed money and (e) to the extent
carried as an asset, treasury stock, unamortized debt discount and expense plus
(ii) the Borrower's pro rata share, based on common equity ownership, of the
consolidated net assets (computed and determined as set forth in clause (i)) of
Seminole.
"Consolidated Net Earnings" shall mean consolidated gross
revenues of the Borrower and the Subsidiaries, less all operating and
nonoperating expenses of the Borrower and the Subsidiaries (including current
and deferred taxes on income, provision for taxes on unremitted foreign
earnings, which are included in gross revenues, and current additions to
reserves), but not including in gross revenues any gains (net of expenses and
taxes applicable thereto) in excess of losses resulting from the sale,
conversion or other disposition of capital assets (i.e., assets other than
current assets), any gains (in excess of the write-down of assets) resulting
from the write-up of assets, any earnings of any corporation acquired by the
Borrower or any Subsidiary through purchase for any year prior to the year of
acquisition, or any equity in any Subsidiary at the date of acquisition over
the cost of the investment in such Subsidiary, all determined in accordance
with generally accepted accounting principles.
"Consolidated Net Income" shall mean, for any period for
which such amount is being determined, the net income (loss) of the Borrower
and its Subsidiaries during such period determined on a consolidated basis for
such period taken as a single accounting period in accordance with generally
accepted accounting principles, provided that there shall be excluded (i)
income (or loss) of any Person (other than a Subsidiary) in which the Borrower
or any of its Subsidiaries has an equity investment or comparable interest,
except to the extent of the amount of dividends or other distributions actually
paid to the Borrower or any of its Consolidated Subsidiaries by such Person
during such period, (ii) the income (or loss) of any Person accrued prior to
the date it becomes a Subsidiary of the Borrower or is merged into or
consolidated with the Borrower or any of its Subsidiaries or the Person's
assets are acquired by the Borrower or any of its Subsidiaries and (iii) the
income of any Subsidiary to the extent that the declaration or payment of
dividends or similar
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<PAGE> 9
distributions by that Subsidiary of the income is not at the time permitted by
operation of the terms of its charter or any agreement, instrument, judgment,
decree, order, statute, rule or governmental regulation applicable to that
Subsidiary.
"Consolidated Net Worth" shall have the meaning specified
in Section 6.04 hereof.
"Consolidated Senior Funded Indebtedness" shall mean Funded
Indebtedness of the Borrower that, by its terms, is not specifically
subordinated to any other indebtedness and Funded Indebtedness of Subsidiaries
(other than to the Borrower).
"Current Indebtedness" of any Person shall mean (i) any
obligation for borrowed money (and any notes payable and trade acceptances,
bankers acceptances and other drafts accepted representing extensions of
credit, whether or not representing obligations for borrowed money) payable on
demand or within a period of one year from the date of the creation thereof;
provided, however, that any obligation shall be treated as Funded Indebtedness,
regardless of its term, if such obligation (a) shall be renewable at the option
of such Person pursuant to the terms thereof or of a revolving credit or
similar agreement effective for more than one year after the date of the
creation of such obligation or (b) may be payable out of the proceeds of a
similar obligation pursuant to the terms of such obligation or of any such
agreement or (c) is represented by commercial paper which is issued against a
revolving credit or similar agreement effective for more than one year after
the date of the issuance of such commercial paper unless such Person shall
choose, at its option, to treat such commercial paper as Current Indebtedness
and shall so account for it (such indebtedness, subject to the exclusions set
forth in the immediately preceding proviso being hereinafter called "Direct
Current Indebtedness"); and (ii) shall also include Direct Current Indebtedness
of any third party that has been guaranteed by such Person.
"Dollars" and the symbol "$" shall mean the lawful currency
of the United States of America.
"Effective Date" shall mean the date on which the Agent
shall have received counterparts of this Agreement executed by the Agent, the
Borrower and each of the Lenders and the conditions set forth in Article 4
hereof have been satisfied.
"Eligible Assignee" means (i) a commercial bank having total
assets in excess of $1,000,000,000; (ii) a savings and loan association or
savings bank organized under the laws of the United States, or any state
thereof, and having a net worth
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of at least $100,000,000 calculated in accordance with GAAP and (iii) a finance
company, insurance company or other financial institution or fund acceptable to
the Agent which in the ordinary course of business extends credit of the type
evidenced by the Notes and having total assets in excess of $500,000,000.
"ERISA" shall mean the Employee Retirement Income Security
Act of 1974, as the same may be amended from time to time.
"Eurodollar Loan" shall mean a Loan based on the LIBO Rate
or Adjusted LIBO Rate in accordance with the provisions of Article 2 hereof.
"Event of Default" shall have the meaning specified in
Article 7 hereof.
"Existing Credit Agreement" shall mean the Competitive
Advance and Revolving Credit Facility Agreement dated as of December 20, 1989,
as amended, among the Borrower, the Banks named therein and Chemical Bank, as
Agent for the Banks.
"Facility Fee" shall have the meaning specified in Section
2.08 hereof.
"Fees" shall mean the Facility Fee and the Administrative
Fees.
"Fixed Rate Loan" shall mean any Competitive Loan made by a
Lender pursuant to Section 2.02 based upon an actual percentage rate per annum
offered by such Lender and accepted by the Borrower, expressed as a decimal (to
no more than four decimal places).
"Funded Indebtedness" of any Person shall mean (i) any
obligation payable more than one year from the date of the creation thereof
that under generally accepted accounting principles is required to be shown on
the balance sheet as a liability (excluding reserves for deferred income taxes
and other reserves to the extent that such reserves do not constitute an
obligation), plus (without duplication) (a) the aggregate outstanding amount of
mineral production payments sold and (b) all amounts payable under any lease
which is a capital lease under generally accepted accounting principles (all
the foregoing being hereinafter called "Direct Funded Indebtedness"); and (ii)
shall also include Direct Funded Indebtedness of any third party that has been
guaranteed by such Person.
"Indebtedness" shall mean and include Current
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Indebtedness and Funded Indebtedness.
"Interest Payment Date" shall mean, as to any Loan, the last
day of the Interest Period applicable to such Loan (and, in the case of any
Interest Period of six months duration, the date that would be the last day of
such Interest Period if such Interest Period were comprised of two Interest
Periods of three months duration).
"Interest Period" shall mean: (i) as to any Eurodollar Loan,
the period commencing on the date of such Eurodollar Loan and ending on the
numerically corresponding day, or, if there is no numerically corresponding
day, on the last day in the calendar month that is 1, 2, 3 or 6 months
thereafter, as the Borrower may elect, (ii) as to any Alternate Base Loan, the
period commencing on the date of such Alternate Base Loan and ending on the
next March 31, June 30, September 30 or December 31 or, if earlier, on the
Maturity Date and (iii) as to any Fixed Rate Loan, the period commencing on the
date of such Loan and ending on the date specified in the Competitive Bid in
which the offer to make the Fixed Rate Loan was extended; provided, however,
that (i) if any Interest Period would end on a day that shall not be a Business
Day, such Interest Period shall be extended to the next succeeding Business Day
unless, with respect to Eurodollar Loans only, such next succeeding Business
Day would fall in the next calendar month, in which case such Interest Period
shall end on the next preceding Business Day, (ii) no Interest Period with
respect to any Loan shall end later than the Maturity Date, (iii) no Interest
Period may be selected with respect to a Eurodollar Loan that would end later
than a Reduction Date occurring after the making of such Loan if (A) the
aggregate outstanding principal amount of all Loans (after giving effect to all
borrowings and payments of Loans on the date of such Loan) will exceed the
amount of the Total Commitments as reduced on such Reduction Date and (B) the
aggregate outstanding amount of Eurodollar Loans with Interest Periods ending
prior to such Reduction Date and the aggregate outstanding amount of all
Alternate Base Loans is not equal to or greater than the excess amount of Loans
referred to in clause (A), and (iv) interest shall accrue from and including
the first day of an Interest Period to but excluding the last day of such
Interest Period.
"LIBO Rate" shall mean the rate (rounded to the nearest 1/16
of 1% or, if there is no nearest 1/16 of 1%, the next higher 1/16 of 1%) at
which dollar deposits approximately equal in principal amount to the Agent's
portion of the Revolving Credit Loan of which such Eurodollar Loan forms a part
(or, in the case of a Competitive Loan, a principal amount which would have
been the Agent's portion of such Loan had such Eurodollar
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Loan been a Revolving Credit Loan) and for a maturity equal to the applicable
Interest Period are offered in immediately available funds to the London branch
of the Agent by leading banks in the London Interbank Market for Eurodollars at
approximately 11:00 a.m., London time, two Business Days prior to the
commencement of such Interest Period.
"Lien" shall mean any mortgage, pledge, security interest,
encumbrance, lien or charge of any kind (including any conditional sale or
other title retention agreement, any lease in the nature thereof, and the
filing of or agreement to give any financing statement under the Uniform
Commercial Code of any jurisdiction).
"Loans" shall mean Revolving Credit Loans or Competitive
Loans.
"MAPL" shall mean Mid-America Pipeline Company, a Delaware
corporation, which is a Wholly-Owned Subsidiary.
"MAPL Consolidated Net Tangible Assets" shall mean the
consolidated assets of MAPL and its subsidiaries, excluding all intercompany
accounts with the Borrower and its Subsidiaries except those between MAPL and
its subsidiaries, and less, without duplication, (i) consolidated current
liabilities (excluding current maturities of Funded Indebtedness), (ii) asset,
liability, contingency and other appropriate reserves, including reserves for
depreciation and for deferred income taxes, (iii) minority interests in
subsidiaries, (iv) all other long-term liabilities other than liabilities for
Funded Indebtedness representing obligations for borrowed money, and (v) to the
extent carried as an asset, treasury stock, unamortized debt discount and
expense, goodwill, trademarks, brand names, patents and other intangible assets
and any write-up of the value of any assets after December 31, 1993; all as
determined in accordance with generally accepted accounting principles
consistent with those followed in the preparation of the financial statements
referred to in Section 5.03(b).
"MAPL Subsidiary" shall mean any corporation, association or
other business entity of which securities or other ownership interests
representing more than 50% of the ordinary voting power are, at the time as of
which any determination is being made, owned or controlled by MAPL or one or
more subsidiaries of MAPL.
"Margin" shall mean as to any Competitive Bid relating to a
Eurodollar Loan, the margin (expressed as a percentage rate per annum in the
form of a decimal to no more
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than four decimal places) to be added to or subtracted from the LIBO Rate in
order to determine the interest rate acceptable to such Lender with respect to
such Competitive Loan.
"Material Subsidiary" shall mean and include any Subsidiary
which shall own at least 15% of the consolidated assets of the Borrower and its
Subsidiaries or which shall have contributed at least 15% of the Consolidated
Net Income of the Borrower and its Subsidiaries during the next preceding
fiscal year and, for purposes of Sections 3.08 and 6.03, any Subsidiaries which
in the aggregate own at least 15% of the consolidated assets of the Borrower
and its Subsidiaries or which contributed at least 15% of the Consolidated Net
Income of the Borrower and its Subsidiaries during the next preceding fiscal
year.
"Maturity Date" shall mean, as to any Lender, March 31, 2001.
"Moody's" shall mean Moody's Investors Service.
"Note" or "Notes" shall mean a Competitive Note or a
Revolving Credit Note of the Borrower executed and delivered as provided in
Section 2.05.
"Person" shall mean and include any natural person, company,
partnership, joint venture, corporation, business trust, unincorporated
organization or government or any department or agency thereof.
"Plan" shall mean any employee plan which is subject to the
provisions of Title IV of ERISA and which is maintained for employees of the
Borrower or any other corporation that is a Subsidiary or an affiliate (within
the meaning of ERISA) of the Borrower.
"Reduction Date" shall have the meaning ascribed to such
term in Section 2.10(b).
"Regulation G" shall mean Regulation G of the Board, as the
same is from time to time in effect, and all official rulings and
interpretations thereunder or thereof.
"Regulation U" shall mean Regulation U of the Board, as the
same is from time to time in effect, and all official rulings and
interpretations thereunder or thereof.
"Regulation X" shall mean Regulation X of the Board, as the
same is from time to time in effect, and all official
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rulings and interpretations thereunder or thereof.
"Reportable Event" shall mean any Reportable Event within
the meaning of Section 4043(b) of Title IV of ERISA (other than paragraphs (3),
(7) and (8) thereof).
"Required Lenders" shall mean at any time Lenders having
Commitments representing 66-2/3% of the Total Commitment, except that for
purposes of determining the Lenders entitled to declare the Notes to be
forthwith due and payable pursuant to Article 7, "Required Lenders" shall mean
Lenders making 66-2/3% of the aggregate principal amount of the Loans at the
time outstanding.
"Revolving Credit Borrowing" shall mean a borrowing
consisting of simultaneous Revolving Credit Loans from each of the Lenders
distributed ratably among the Lenders in accordance with their respective
Commitments.
"Revolving Credit Loans" shall have the meaning given such
terms in Section 2.01.
"Revolving Credit Note" shall have the meaning assigned to
such terms in Section 2.05(a).
"Rolling Period" shall mean, with respect to any fiscal
quarter of the Borrower, such fiscal quarter and the three immediately
preceding fiscal quarters.
"S&P" shall mean Standard & Poor's Corporation.
"Seminole" shall mean Seminole Pipeline Company, a Delaware
corporation.
"Seminole Consolidated Net Tangible Assets" shall mean the
consolidated assets of Seminole and its subsidiaries, excluding all
intercompany accounts with the Borrower and its Subsidiaries except those
between Seminole and its subsidiaries, and less, without duplication, (i)
consolidated current liabilities (excluding current maturities of Funded
Indebtedness), (ii) asset, liability, contingency and other appropriate
reserves, including reserves for depreciation and for deferred income taxes,
(iii) minority interests in subsidiaries, (iv) all other long-term liabilities
other than liabilities for Funded Indebtedness representing obligations for
borrowed money, and (v) to the extent carried as an asset, treasury stock,
unamortized debt discount and expense, goodwill, trademarks, brand names,
patents and other intangible assets and any write-up of the value of any assets
after December 31, 1993; all as
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determined in accordance with generally accepted accounting principles
consistent with those followed in the preparation of the financial statements
referred to in Section 5.03(c).
"Statutory Reserves" shall mean a fraction (expressed as a
decimal), the numerator of which is the number one and the denominator of which
is the number one minus the aggregate of the maximum reserve percentages
(including, without limitation, any marginal, special, emergency, or
supplemental reserves) expressed as a decimal established by the Board and any
other banking authority to which the Agent is subject for Eurocurrency
Liabilities (as defined in Regulation D). Such reserve percentages shall
include, without limitation, those imposed under Regulation D. Eurodollar
Loans shall be deemed to constitute Eurocurrency Liabilities and as such shall
be deemed to be subject to such reserve requirements without benefit of or
credit for proration, exceptions or offsets which may be available from time to
time to any bank under Regulation D. Statutory Reserves shall be adjusted
automatically on and as of the effective date of any change in any reserve
percentage.
"Subordinated Indebtedness" shall mean any Funded
Indebtedness of the Borrower that is by its terms expressly subordinated to the
Notes.
"Subsidiary" shall mean any corporation organized under the
laws of any State of the United States of America, Canada or any Province of
Canada that conducts the major portion of its business in the United States of
America or Canada, and at least 80% of the Voting Stock of which, except
directors' qualifying shares, shall, at the time as of which any determination
is being made, be owned by the Borrower either directly or through Wholly Owned
Subsidiaries.
"Total Commitment" shall mean at any time the aggregate
amount of the Lenders' Commitments, as in effect at such time.
"Type" when used with respect to any Loan or Borrowing shall
refer to the Rate by reference to which interest on such Loan or on the Loans
comprising such Borrowing is determined. For purposes hereof, "Rate" shall
include the Adjusted LIBO Rate, the Alternate Base Rate and the Fixed Rate.
"Voting Stock" when used with respect to any Subsidiary
shall mean any shares of stock of such Subsidiary having general voting power
under ordinary circumstances to elect a majority of the Board of Directors of
such Subsidiary (irrespective of whether or not at the time stock of any other
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class or classes shall have or might have voting power by reason of the
happening of any contingency).
"Wholly Owned Subsidiary" shall mean any Subsidiary, all the
stock of every class of which, except directors' qualifying shares, shall at
the time as of which any determination is being made be owned by the Borrower
either directly or through other Wholly Owned Subsidiaries.
Each accounting term not defined herein shall have the
meaning given to it under generally accepted accounting principles applied on a
consistent basis.
2. THE LOANS
SECTION 2.01 Commitments.
Subject to the terms and conditions and relying upon the
representations and warranties herein set forth, each Lender, severally and not
jointly, agrees to make revolving credit loans ("Revolving Credit Loans") to
the Borrower, at any time and from time to time from the date hereof to the
Maturity Date, or until the earlier termination of the Commitments in
accordance with the terms hereof, subject, however, to the conditions that (i)
at no time shall (A) the sum of (x) the outstanding aggregate principal amount
of all Revolving Credit Loans made by all Lenders plus (y) the outstanding
aggregate principal amount of all Competitive Loans made by all Lenders exceed
(B) the Total Commitment and (ii) at all times the outstanding aggregate
principal amount of all Revolving Credit Loans made by a Lender shall equal the
product of (x) the percentage which its Commitment represents of the Total
Commitment times (y) the outstanding aggregate principal amount of all
Revolving Credit Loans made by all Lenders. Each Lender's Commitment is set
forth opposite its respective name below. Such Commitments may be adjusted
from time to time pursuant to Section 2.10.
<TABLE>
<CAPTION>
Percent of
Lender Commitment Commitments
- - ------ ---------- -----------
<S> <C> <C>
Chemical Bank $ 45,000,000 14.9999999998
Bank of America National Trust 35,000,000 11.6666666667
and Savings Association
The First National Bank 35,000,000 11.6666666667
of Chicago
</TABLE>
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<TABLE>
<S> <C> <C>
Morgan Guaranty Trust 35,000,000 11.6666666667
Company
Bank of Nova Scotia 25,000,000 8.3333333333
National Westminster Bank Plc 25,000,000 8.3333333333
ABN AMRO Bank N.V. 20,000,000 6.6666666667
Bank of Oklahoma, N.A. 20,000,000 6.6666666667
Credit Lyonnais Cayman
Island Branch 20,000,000 6.6666666667
The Fuji Bank, Limited 20,000,000 6.6666666667
The Sumitomo Bank, Limited 20,000,000 6.6666666667
------------ -------------
Total Commitment $300,000,000 100%
</TABLE>
Within the foregoing limits, the Borrower may borrow, repay
and reborrow, on or after the date hereof and prior to the Maturity Date, all
or any portion of the Commitments hereunder, subject to the terms, provisions
and limitations set forth herein.
SECTION 2.02 Competitive Bid Procedure.
(a) In order to request Competitive Bids, the Borrower
shall hand deliver, telex or telecopy to the Agent a duly completed Competitive
Bid Request in the form of Exhibit B-1 hereto, to be received by the Agent (i)
in the case of Eurodollar Loans, not later than 10:00 a.m., New York City time,
four Business Days before a proposed Competitive Borrowing and (ii) in the case
of Fixed Rate Loans, not later than 10:00 a.m., New York City time, one
Business Day before a proposed Competitive Borrowing. No Alternate Base Loan
shall be requested in, or made pursuant to, a Competitive Bid Request. A
Competitive Bid Request that does not conform substantially to the format of
Exhibit B-1 may be rejected, and the Agent shall promptly notify the Borrower
of such rejection by telex or telecopier. Such request shall in each case
refer to this Agreement and specify (x) whether the Loans then being requested
are to be Eurodollar Loans or Fixed Rate Loans, (y) the date of such Loans
(which shall be a Business Day) and the aggregate principal amount thereof
(which shall not be less than $5,000,000 or greater than the Total Commitment
and shall be an integral multiple of $1,000,000), and (z) the Interest Period
with respect thereto (which may not end after the Maturity Date). Promptly
after its receipt of a Competitive Bid Request
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<PAGE> 18
that is not rejected as aforesaid, the Agent shall invite by telex or
telecopier (in the form set forth in Exhibit C) the Lenders to bid, on the
terms and conditions of this Agreement, to make Competitive Loans pursuant to
the Competitive Bid Request.
(b) Each Lender may, in its sole discretion, make one or
more Competitive Bids to the Borrower through the Agent responsive to the
Competitive Bid Request. Each Competitive Bid by a Lender must be received by
the Agent via telex or telecopier, in the form of Exhibit D hereto, (i) in the
case of Eurodollar Loans, not later than 9:30 a.m., New York City time, three
Business Days before a proposed Competitive Borrowing and (ii) in the case of
Fixed Rate Loans, not later than 9:30 a.m., New York City time, on the day of a
proposed Competitive Borrowing. Multiple bids will be accepted by the Agent.
Competitive Bids that do not conform substantially to the format of Exhibit D
may be rejected by the Agent after conferring with, and upon the instruction
of, the Borrower, and the Agent shall notify the Lender making such
non-conforming bid of such rejection as soon as practicable. Each Competitive
Bid shall refer to this Agreement and specify (x) the maximum principal amount
(which shall be in a minimum amount of $5,000,000 and in integral multiples of
$1,000,000 thereafter and which may equal the entire aggregate principal amount
of the Competitive Borrowing requested by the Borrower) of the Competitive Loan
that the Lender is willing to make to the Borrower and (y) the Competitive Bid
Rate or Rates at which the Lender is prepared to make the Competitive Loan or
Loans. If any Lender shall elect not to make a Competitive Bid, such Lender
shall so notify the Agent via telex or telecopier (i) in the case of Eurodollar
Loans, not later than 9:30 a.m., New York City time, three Business Days before
a proposed Competitive Borrowing and (ii) in the case of Fixed Rate Loans, not
later than 9:30 a.m., New York City time, on the day of a proposed Competitive
Borrowing; provided, however, that failure by any Lender to give such notice
shall not cause such Lender to be obligated to make any Competitive Loan as
part of such Competitive Borrowing. A Competitive Bid submitted by a Lender
pursuant to this paragraph (b) shall be irrevocable.
(c) The Agent shall promptly notify the Borrower by telex
or telecopier of all the Competitive Bids made, the Competitive Bid Rate and
the maximum principal amount of each Competitive Loan in respect of which a
Competitive Bid was made and the identity of the Lender that made each bid.
The Agent shall send a copy of all Competitive Bids to the Borrower for its
records as soon as practicable after completion of the bidding process set
forth in this Section 2.02.
(d) The Borrower may in its sole and absolute
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<PAGE> 19
discretion, subject only to the provisions of this paragraph (d), accept or
reject any Competitive Bid referred to in paragraph (c) above. The Borrower
shall notify the Agent by telex or telecopier whether and to what extent it has
decided to accept or reject any of or all the bids referred to in paragraph (c)
above, (i) in the case of Eurodollar Loans, not later than 10:30 a.m., New York
City time, three Business Days before a proposed Competitive Borrowing and (ii)
in the case of Fixed Rate Loans, not later than 10:30 a.m., New York City time,
on the day of a proposed Competitive Borrowing; provided, however, that (i) the
failure by the Borrower to give such notice shall be deemed to be a rejection
of all the bids referred to in paragraph (c) above, (ii) the Borrower shall not
accept a bid made at a particular Competitive Bid Rate if the Borrower has
decided to reject a bid made at a lower Competitive Bid Rate, (iii) the
aggregate amount of the Competitive Bids accepted by the Borrower shall not
exceed the principal amount specified in the Competitive Bid Request, (iv) if
the Borrower shall accept a bid or bids made at a particular Competitive Bid
Rate but the amount of such bid or bids shall cause the total amount of bids to
be accepted by the Borrower to exceed the amount specified in the Competitive
Bid Request, then the Borrower shall accept a portion of such bid or bids in an
amount equal to the amount specified in the Competitive Bid Request less the
amount of all other Competitive Bids accepted with respect to such Competitive
Bid Request, which acceptance, in the case of multiple bids at such Competitive
Bid Rate, shall be made pro rata in accordance with the amount of each such bid
at such Competitive Bid Rate, and (v) no bid shall be accepted for a
Competitive Loan unless such Competitive Loan is in a minimum principal amount
of $5,000,000 and an integral multiple of $1,000,000; provided further,
however, that if a Competitive Loan must be in an amount less than $5,000,000
because of the provisions of clause (iv) above, such Competitive Loan may be
for a minimum of $1,000,000 or any integral multiple thereof, and in
calculation the pro rata allocation of acceptances of portions of multiple bids
at a particular Competitive Bid Rate pursuant to clause (iv) the amounts shall
be rounded to integral multiples of $1,000,000 in a manner which shall be in
the discretion of the Borrower. A notice given by the Borrower pursuant to
this paragraph (d) shall be irrevocable.
(e) The Agent shall promptly notify each bidding Lender
whether or not its Competitive Bid or Bids have been accepted (and if so, in
what amount and at what Competitive Bid Rate) by telex or telecopier sent by
the Agent, and each successful bidder will thereupon become bound, subject to
the other applicable conditions hereof, to make the Competitive Loan in respect
of which its bid has been accepted.
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(f) A Competitive Bid Request shall not be made within
three Business Days after the date of any previous Competitive Bid Request.
(g) If the Agent shall elect to submit a Competitive Bid in
its capacity as a Lender, it shall submit such bid directly to the Borrower at
least one quarter hour earlier than the latest time at which the other Lenders
are required to submit their bids to the Agent pursuant to paragraph (b) above.
(h) All notices required by this Section 2.02 shall be made
in accordance with Section 9.01.
(i) The aggregate amount of the Commitments in effect at
any time shall be temporarily decreased, pro rata in accordance with each
Lender's respective Commitment, by the aggregate amount of all Competitive
Loans then outstanding. The amount of the Commitment of each Lender in effect
at any time shall be temporarily decreased by an amount which would represent
such Lender's pro rata portion of all Competitive Loans then outstanding had
such Competitive Loans been made as Revolving Credit Loans.
(j) Notwithstanding any other provision of this Agreement,
the Borrower shall not be entitled to request any Competitive Borrowing if the
Interest Period requested with respect thereto would end after the next
Reduction Date and, after giving effect to such Competitive Borrowing, the
outstanding amount of Competitive Loans on such Reduction Date would exceed the
Total Commitments in effect on such Reduction Date after giving effect to any
reduction in the Total Commitments on such date.
SECTION 2.03. Revolving Credit Loan Procedure.
In order to effect a Revolving Credit Borrowing, the
Borrower shall give the Agent irrevocable written or telex notice, in the form
of Exhibit B-2 hereto, (i) in the case of a Eurodollar Loan, not later than
10:00 a.m., New York time, three Business Days before a proposed Revolving
Credit Borrowing and (ii) in the case of an Alternate Base Rate Loan, not later
than 10:30 a.m. New York time, on the date of a proposed Revolving Credit
Borrowing. Such notice shall be irrevocable and shall in each case refer to
this Agreement and specify whether the Loan then being requested is to be an
Alternate Base Loan or Eurodollar Loan, the date of such Revolving Credit
Borrowing (which shall be a Business Day), amount thereof and Interest Period
with respect thereto. If no election as to the Type of Loan is specified in
such notice, such loan (or portion thereof as to which no election is
specified)
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<PAGE> 21
shall be an Alternate Base Loan and, in the case of a Eurodollar Loan, if no
election as to Interest Period is specified in such notice, the Borrower shall
be deemed to have selected an Interest Period of one month's duration. The
Agent shall promptly advise the other Lenders of any notice given by the
Borrower pursuant to this Section 2.03 and of each Lender's portion of the
requested Revolving Credit Borrowing.
SECTION 2.04. Loans.
(a) Each Borrowing made by the Borrower on any date shall
be (i) in the case of Competitive Loans, in a minimum aggregate principal
amount of $5,000,000 and in an integral multiple of $1,000,000 and (ii) in the
case of Revolving Credit Loans, in an integral multiple of $2,000,000.
Competitive Loans shall be made by the Lenders in accordance with Section
2.02(d), and Revolving Credit Loans shall be made by the Lenders ratably in
accordance with their respective Commitments on the date of the Revolving
Credit Borrowing; provided, however, that the failure of any Lender to make any
Loan shall not in itself relieve any other Lender of its obligation to lend
hereunder. The initial Competitive Loan by each Lender and the initial
Revolving Credit Loan by each Lender shall be made against delivery to such
Lender of an appropriate Competitive Note and Revolving Credit Note, respec-
tively, payable to the order of such Lender, as referred to in Section 2.05.
(b) Each Competitive Loan shall be either a Eurodollar Loan
or a Fixed Rate Loan and each Revolving Credit Loan shall be either an
Alternate Base Loan or a Eurodollar Loan as the Borrower may request subject to
and in accordance with Section 2.02 or 2.03, as applicable. Each Lender may
fulfill its Commitment with respect to any Eurodollar Loan by causing, at its
option, any domestic or foreign branch or affiliate of such Lender to make such
Loan, provided that the exercise of such option shall not affect the obligation
of the Borrower to repay such Loan in accordance with the terms of the
applicable Note. Subject to the provisions of this Section 2.04(b), Loans of
more than one Type may be outstanding at the same time. Notwithstanding any
provision to the contrary in this Agreement, the Borrower shall not in any
notice of a Revolving Credit Loan under Section 2.03 request any Eurodollar
Loan or in any notice of a Competitive Loan under Section 2.02 request any
Eurodollar Loan which, if made, would result in more than eight separate
Eurodollar Loans of each Lender (made either as a Competitive Loan or Revolving
Credit Loan) being outstanding hereunder at any one time. For purposes of the
foregoing, Loans of any single Type having different Interest Periods shall be
considered separate Loans.
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(c) Each Lender shall make its portion of each Loan
hereunder on the proposed date thereof by paying the amount required to the
Agent in New York, New York in immediately available funds not later than 11:00
a.m., New York time, and the Agent shall by 12:00 noon, New York time, credit
the amounts so received to the general deposit account of the Borrower with the
Agent.
SECTION 2.05. Notes.
(a) The Competitive Loans made by each Lender shall be
evidenced by a note duly executed on behalf of the Borrower, dated the
Effective Date, in substantially the form attached hereto as Exhibit A-2 with
the blanks appropriately filled, payable to the order of such Lender in a
principal amount equal to the Total Commitment (a "Competitive Note"). The
Revolving Credit Loans made by each Lender shall be evidenced by a note duly
executed on behalf of the Borrower, dated the Effective Date, in substantially
the form attached hereto as Exhibit A-1 with the blanks appropriately filled,
payable to the order of such Lender in a principal amount equal to its
Commitment on such date (a "Revolving Credit Note"). The outstanding principal
balance of each Competitive Loan and Revolving Credit Loan, as evidenced by the
relevant Note, shall be payable on the last day of the Interest Period of such
Loan. Each Note shall bear interest as provided in Section 2.06.
(b) Each Lender, or the Agent on its behalf, shall, and is
hereby authorized by the Borrower to, endorse on the schedule attached to the
relevant Note delivered to such Lender (or on a continuation of such schedule
attached to such Note and made a part thereof), or otherwise record in such
Lender's internal records, an appropriate notation evidencing the date and
amount of each Competitive Loan and Revolving Credit Loan from such Lender, as
well as the date and amount of each payment and prepayment with respect
thereto; provided, however, that the failure of any Lender or the Agent to make
such a rotation or any error in such a notation shall not affect the obligation
of the Borrower under such Note.
SECTION 2.06. Interest on Loans.
(a) Subject to the provisions of Sections 2.11 and 2.13,
each Alternate Base Loan shall bear interest at a rate per annum (if the
Alternate Base Rate is based on the Prime Rate, computed on the basis of the
actual number of days elapsed over a year of 365 or 366 days, as the case may
be; if the Alternate Base Rate is based on the Federal Funds Effective Rate or
the Base CD Rate, computed on the basis of the actual number of days elapsed
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<PAGE> 23
over a year of 360 days) equal to the Alternate Base Rate. Interest on each
Alternate Base Loan shall be payable on each applicable Interest Payment Date.
(b) Subject to the provisions of Sections 2.11 and 2.13,
each Eurodollar Loan made as a Revolving Credit Loan shall bear interest at a
rate per annum (computed on the basis of the actual number of days elapsed over
a year of 360 days) equal to the Adjusted LIBO Rate for the Interest Period in
effect for such Loan plus the Applicable Margin. Interest on each Eurodollar
Loan shall be payable on each applicable Interest Payment Date. The Adjusted
LIBO Rate shall be determined by the Agent in good faith, and such
determination shall be conclusive absent manifest error. The Agent shall
promptly advise the Borrower and each Lender of such determination.
(c) Subject to the provisions of Sections 2.11 and 2.13,
each Eurodollar Loan made as a Competitive Loan shall bear interest at a rate
per annum (computed on the basis of the actual number of days elapsed over a
year of 360 days) equal to the LIBO Rate for the Interest Period in effect for
such Loan plus the Margin specified by a Lender with respect to such Loan in
its Competitive Bid submitted pursuant to Section 2.02(b). Interest on each
Eurodollar Loan shall be payable on each applicable Interest Payment Date. The
LIBO Rate shall be determined by the Agent in good faith and such determination
shall be conclusive absent manifest error. The Agent shall promptly advise the
Borrower and each Lender of such determination.
(d) Subject to the provisions of Sections 2.11 and 2.13,
each Fixed Rate Loan shall bear interest at a rate per annum (computed on the
basis of the actual number of days elapsed over a year of 360 days) equal to
the fixed rate of interest offered by the Lender making such Loan and accepted
by the Borrower pursuant to Section 2.02. Interest on each Fixed Rate Loan
shall be payable on each Interest Payment Date applicable thereto.
SECTION 2.07. Refinancings.
Upon prior written notice to the Agent, the Borrower may
refinance all or any part of any Borrowing with a Borrowing of the same or a
different Type made pursuant to Section 2.02 or Section 2.03, subject to the
conditions and limitations set forth herein and elsewhere in this Agreement,
including refinancings of Competitive Borrowings with Revolving Credit
Borrowings and Revolving Credit Borrowings with Competitive Borrowings. Any
Borrowing or part thereof so refinanced shall be deemed to be repaid in
accordance with Section 2.05 with the proceeds of a new Borrowing hereunder and
the proceeds of the new Borrowing, to the
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extent they do not exceed the principal amount of the Borrowing being
refinanced, shall not be paid by the Lenders to the Agent or by the Agent to
the Borrower pursuant to Section 2.04(c); provided, however, that (i) if the
principal amount extended by a Lender in a refinancing is greater than the
principal amount extended by such Lender in the Borrowing being refinanced,
then such Lender shall pay such difference to the Agent for distribution to the
Lenders described in (ii) below, (ii) if the principal amount extended by a
Lender in the Borrowing being refinanced is greater than the principal amount
being extended by such Lender in the refinancing, the Agent shall return the
difference to such Lender out of amounts received pursuant to (i) above, and
(iii) to the extent any Lender fails to pay the Agent amounts due from it
pursuant to (i) above, any Loan or portion thereof being refinanced shall not
be deemed repaid in accordance with Section 2.05 and shall be payable by the
Borrower (without prejudice to the Borrower's rights against the defaulting
Lender).
SECTION 2.08. Fees.
(a) Subject to the provisions of Section 2.10(c), the
Borrower shall pay to each Lender, through the Agent, on the last Business Day
of each March, June, September and December and on the Maturity Date, in
immediately available funds, a facility fee (a "Facility Fee") at the rate per
annum from time to time in effect in accordance with Section 2.09 on the amount
of the Commitment of such Lender, whether used or unused, during the preceding
quarter (or shorter period commencing with the date of execution and delivery
of this Agreement and/or ending with the Maturity Date or any date on which the
Commitment of such Lender shall be terminated). All Facility Fees under this
Section 2.08 shall be computed on the basis of the actual number of days
elapsed in a year of 365 or 366 days, as the case may be. The Facility Fee due
to each Lender shall commence to accrue on the date of execution and delivery
of this Agreement and shall cease to accrue on the earlier of the Maturity Date
and the termination of the Commitment of such Lender pursuant to Section 2.10.
(b) The Borrower agrees to pay to the Agent, for its own
account, agent and administrative fees (the "Administrative Fees") at the times
and in the amounts agreed upon in the letter agreement dated April 29, 1994,
between the Borrower and the Agent.
(c) All Fees shall be paid on the dates due, in immediately
available funds, to the Agent for distribution, if and as appropriate, among
the Lenders. Once paid, none of the Fees shall be refundable under any
circumstances.
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SECTION 2.09. Certain Pricing Adjustments.
The Facility Fee and the Applicable Margin in effect from
time to time shall be determined in accordance with the following chart:
<TABLE>
<CAPTION>
Applicable
Facility Margin Applicable
Fee (in (prior to Margin on or
Moody's Basis 6/30/98) (in after 6/30/98)
S&P Rating Rating Points) Basis Points) (in Basis Points)
---------- ------- -------- ------------- -----------------
<S> <C> <C> <C> <C>
A- or better A3 or 12.50 25.00 37.50
better
BBB+, BBB Baa1,Baa2 18.75 26.25 38.75
BBB- Baa3 20.00 32.50 45.00
BB+ or below Ba1 or 31.25 56.25 68.75
below
</TABLE>
In the event the S&P rating on the Borrower's senior
unsecured long term debt is not equivalent to the Moody's rating on such debt,
the higher rating shall apply for purposes of the foregoing table. If neither
S&P or Moody's rates the Borrower's senior unsecured long term debt or the
Borrower has no senior unsecured long term debt outstanding, then a rating of
BB+/Ba1 or below shall be deemed to apply. Any increase in the Facility Fee or
the Applicable Margin determined in accordance with the foregoing table shall
become effective on the date of announcement or publication by the second of
such rating agencies of a reduction in such rating or, in the absence of such
announcement or publication, on the effective date of such decreased rating; or
on the date of any request by the Borrower to both of such rating agencies not
to rate its senior unsecured long term debt or on the date both of such rating
agencies announces it shall no longer rate the Borrower's senior unsecured long
term debt. Any decrease in the Facility Fee or Applicable Margin shall be
effective on the date of announcement or publication by either of such rating
agencies of an increase in rating or in the absence of announcement or
publication on the effective date of such increase in rating.
SECTION 2.10. Termination and Reduction of Commitments.
(a) Upon at least three Business Days' prior irrevocable
written or telex notice to the Agent, the Borrower may at any time in whole
permanently terminate, or from time to time in part permanently reduce, the
Commitments, ratably among the Lenders in accordance with their respective
Commitments; provided, however, that (i) each partial reduction of the
Commitments shall be in a minimum aggregate principal amount of $10,000,000 and
an
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<PAGE> 26
integral multiple of $1,000,000 and (ii) no termination or reduction of the
Commitment shall be made which would result in the amount of Competitive Loans
outstanding exceeding the amount of the Commitments as reduced and/or
terminated.
(b) If the Total Commitments in effect hereunder on any of
the dates set forth below (each such date being herein referred to as a
"Reduction Date") would exceed the amount set forth opposite such Reduction
Date below, then on each such Reduction Date the Total Commitments shall be
automatically reduced, ratably among the Lenders in accordance with each
Lender's percentage of the Total Commitments, to such amount set forth opposite
such Reduction Date below:
<TABLE>
<CAPTION>
Reduction Date Total Commitments
------------------ -----------------
<S> <C>
June 30, 1998 $275,000,000
September 30, 1998 250,000,000
December 31, 1998 225,000,000
March 31, 1999 200,000,000
June 30, 1999 175,000,000
September 30, 1999 150,000,000
December 31, 1999 125,000,000
March 31, 2000 100,000,000
June 30, 2000 75,000,000
September 30, 2000 50,000,000
December 31, 2000 25,000,000
March 31, 2001 - 0 -
</TABLE>
In the event that the aggregate outstanding amounts of the Loans on any
Reduction Date would exceed the Total Commitments in effect on such Reduction
Date after giving effect to any reductions in the Total Commitment on such
date, the Borrower shall, on such Reduction Date, make a mandatory prepayment
of the Revolving Credit Loans in a principal amount equal to such excess so
that, after giving effect to such prepayment, the aggregate outstanding
principal amount of all Loans does not exceed the Total Commitments.
(c) In the event the Borrower makes a permanent reduction
in the Commitments as provided for in paragraph (a) of this Section 2.10, the
amounts set forth in the Total Commitments column in paragraph (b) of this
Section 2.10 shall each be reduced by an amount equal to the dollar sum which
is the result of multiplying such amount by a fraction in which the numerator
is the amount of the optional prepayment and the denominator is the amount of
the Commitment prior to such optional reduction.
(d) Simultaneously with any termination or reduction of
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Commitments pursuant to paragraphs (a) and (b) of this Section 2.10, the
Borrower shall pay to the Agent for the account of the Lenders' Facility Fees
on the amount of the Commitments so terminated or reduced owed to the date of
such termination or reduction, if any.
SECTION 2.11. Interest on Overdue Amounts; Alternative
Rate of Interest.
(a) If the Borrower shall default in the payment of the
principal of or interest on any Loan or any other amount becoming due
hereunder, by scheduled maturity, notice of prepayment, acceleration or
otherwise, the Borrower shall on demand from time to time pay interest, to the
extent permitted by law, on such defaulted amount up to the date of actual
payment (after as well as before judgment):
(i) in the case of principal of or
interest on a Eurodollar Loan, at a rate determined by the
Agent (such determination to be conclusive and binding on
the Borrower absent manifest error) to be the higher of (a)
1% per annum above the rate that would have been payable
thereon under Section 2.06, as if such defaulted amount had
during the period of default constituted a Eurodollar Loan
made on the date of default for successive Interest Periods
(of one, two or three months duration as the Agent shall
determine) and (b) 1% per annum above the rate of interest
applicable to such Eurodollar Loan immediately payable prior
to such default; and
(ii) in the case of principal of or
interest on an Alternate Base Loan, a Fixed Rate Loan or any
other amount payable hereunder (other than principal or
interest on any Eurodollar Loan), at a rate 1% per annum
above the applicable rate that would otherwise be payable
under Section 2.06.
(b) In the event, and on each occasion, that on the day two
Business Days prior to the commencement of any Interest Period for a Eurodollar
Loan, the Agent shall have determined (which determination shall be conclusive
and binding upon the Borrower) that dollar deposits in the amount of the
requested principal amount of such Eurodollar Loan are not generally available
in the London Interbank Market, or that reasonable means do not exist for
ascertaining the Adjusted LIBO Rate or that the rate at which dollar deposits
are being offered will not adequately and fairly reflect the cost to any Lender
of making the principal amount of such Eurodollar Loan during such Interest
Period, the Agent shall,
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as soon as practicable thereafter, give written or telex notice of such
determination to the Borrower and the Lenders, and any request by the Borrower
for a Eurodollar Loan from the affected Lenders shall, until the circumstances
giving rise to such notice no longer exist, be deemed a request for an
Alternate Base Loan. Each determination by the Agent or any Lender hereunder
shall be made in good faith and shall be conclusive absent manifest error.
SECTION 2.12. Prepayment of Loans.
(a) Subject to the provisions of Section 2.15, the Borrower
shall have the right at any time and from time to time to prepay any Revolving
Credit Loan, in whole or in part, without premium or penalty, upon at least
three Business Days' prior written or telex notice to the Agent in the case of
Eurodollar Loans and at least one Business Day's prior written or telex notice
to the Agent in the case of Alternate Base Loans; provided, however, that each
such partial prepayment shall be in an integral multiple of $5,000,000. The
Borrower shall not have the right to prepay any Competitive Loan.
(b) On the date of any termination or reduction of the
Commitments pursuant to Section 2.10(a), the Borrower shall pay or prepay so
much of the Revolving Credit Loans (up to the amount by which the Commitments
are terminated or reduced) as shall be necessary in order that the aggregate
principal amount of the Loans outstanding will not exceed the Total Commitments
following such termination or reduction. All prepayments under this Section
2.12 shall be subject to Section 2.15.
(c) On any date when the aggregate outstanding Loans (after
giving effect to any Borrowings effected on such date) exceed the Total
Commitments, the Borrower shall, as required by Section 2.10(b), make a
mandatory prepayment of the Revolving Credit Loans in such amount as may be
necessary so that the aggregate amount of outstanding Loans after giving effect
to such prepayment does not exceed the Total Commitments then in effect. Any
prepayments required by this paragraph shall be applied to outstanding
Alternate Base Loans up to the full amount thereof before they are applied to
outstanding Eurodollar Loans which are made as Revolving Credit Loans.
(d) Each notice of prepayment shall specify the prepayment
date and the principal amount of each Loan (or portion thereof) to be prepaid,
shall be irrevocable and shall commit the Borrower to prepay such Loan by the
amount stated therein on the date stated therein. All prepayments shall be
accompanied by accrued interest on the principal amount being prepaid to the
date of prepayment.
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SECTION 2.13. Change in Circumstances.
(a) Notwithstanding any other provision herein, if after
the date of this Agreement the introduction of any new law or any change in
applicable law, regulation or guideline or in the interpretation or
administration thereof by any governmental authority charged with the
interpretation or administration thereof (whether or not having the force of
law) shall change the basis of taxation of payments to any Lender of the
principal of or interest on any Alternate Base Loan, Fixed Rate Loan or
Eurodollar Loan made by such Lender, its applicable lending office, or a branch
or affiliate thereof or any other fees or amounts payable hereunder (other than
withholding taxes imposed by the United States, in the event a Lender has not
provided a tax form if required pursuant to Section 2.18, and taxes imposed on
the overall net income of such Lender by any jurisdiction or by any political
subdivision or taxing authority therein by reason of any connection between the
jurisdiction imposing such tax, on the one hand, and such Lender, applicable
lending office, branch or affiliate, on the other, other than a connection
arising solely from such Person having executed, delivered or performed its
obligations or received payment under or enforced, this Agreement or the
Notes), or shall impose, modify or deem applicable any reserve, special deposit
or similar requirement against assets of, deposits with or for the account of,
or credit or credit commitments extended by, such Lender (other than any loan
loss reserve and any reserve taken into account in the computation of Statutory
Reserves) or shall impose on such Lender or the London Interbank Market any
other condition affecting this Agreement, its Commitment or the Alternate Base
Loans, Fixed Rate Loans or Eurodollar Loans made by such Lender and the result
of any of the foregoing shall be to increase the cost to such Lender of making
or maintaining its Commitment or any Alternate Base Loan, Fixed Rate Loan or
Eurodollar Loan or to reduce the amount of any sum received or receivable by
such Lender hereunder (whether of principal, interest or otherwise) in respect
thereof, by an amount deemed by such Lender to be material, then such
additional amount or amounts as will compensate such Lender for such additional
costs or reduction will be paid by the Borrower to such Lender upon demand;
provided, however, that such Lender shall use good faith reasonable efforts to
specify a new lending office with respect to such Commitments and Loans with a
view to mitigating the consequences of such an occurrence to the extent
practicable consistent with customary practices of such Lender unless in the
judgment of such Lender such specification at such time or in the future might
have an adverse effect on it.
(b) If any Lender shall have determined that the adoption
after the date hereof of any law, rule, regulation or
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guideline regarding capital adequacy, or any change in any of the foregoing or
in the interpretation or administration of any of the foregoing by any
government authority, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by any Lender (or any
lending office of such Lender) or any Lender's holding company with any request
of directive regarding capital adequacy (whether or not having the force of
law) of any such authority, central bank or comparable agency, has or would
have the effect of reducing the rate of return on such Lender's capital or on
the capital of such Lender's holding company, if any, as a consequence of this
Agreement or the Loans made, issued or participated in by such Lender pursuant
hereto to a level below that which such Lender or such Lender's holding company
could have achieved but for such adoption, change or compliance (taking into
consideration such Lender's policies on capital adequacy) by an amount deemed
by such Lender to be material, then from time to time the Borrower shall pay to
such Lender such additional amount or amounts as will compensate such Lender or
such Lender's holding company for any such reduction suffered.
(c) A certificate of each Lender setting forth such amount
or amounts as shall be necessary to compensate such Lender as specified in
paragraphs (a) or (b) above shall be delivered as soon as practicable to the
Borrower, shall be prepared in good faith and shall be conclusive absent
manifest error. At the time the certificate is submitted, each Lender shall
provide the Borrower with a statement explaining the amount of any such reduced
compensation or expense. The Borrower shall pay each Lender the amount shown
as due on any such certificate within 10 days after its receipt of the same.
In preparing such a certificate, each Lender may employ such assumptions and
allocations of costs and expenses as it shall in good faith deem reasonable.
(d) Failure on the part of any Lender to demand
compensation for any increased costs or reduction in amounts received or
receivable with respect to any Interest Period shall not constitute a waiver of
such Lender's rights to demand compen- sation for any increased costs or
reduction in amounts received or receivable in such Interest Period or in any
other Interest Period. The protection of this Section shall be available to
each Lender regardless of any possible contention of the invalidity or
inapplicability of any law, regulation or other condition which shall give rise
to any demand by such Lender for compensation; provided, however, that if any
Lender shall receive reimbursement of any such additional amount or amounts
under this Section and the reason for such reimbursement is subsequently deemed
invalid or inapplicable by a court or administrative agency
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of competent jurisdiction, then within 60 days of such determination of
invalidity or inapplicability each Lender receiving any such reimbursement
(including interest thereon at the Federal Funds Effective Rate from the date
of such determination) shall remit to Borrower the amount of such reimbursement
paid by Borrower.
(e) Notwithstanding any other provisions of this Section
2.13, no Lender shall be entitled to compensation for any increased costs or
reduction in amounts received or receivable or reduction in return on capital
under this Section unless such Lender represents to Borrower that at the time
it is the policy or general practice of such Lender to demand such compensation
for comparable costs or reductions, if any, in similar circumstances, if any,
under comparable provisions of other credit agreements for comparable
customers.
SECTION 2.14. Change in Legality.
(a) Notwithstanding anything to the contrary herein
contained, if the adoption of or any change in any law or regulation or in the
interpretation thereof by any governmental authority charged with the
administration or interpretation thereof shall make it unlawful for any Lender
to make or maintain any Eurodollar Loan or to give effect to its obligations as
contemplated hereby, then, by written notice to the Borrower and to the Agent,
such Lender may:
(i) declare that Eurodollar Loans will not
thereafter be made by such Lender hereunder whereupon the
Borrower shall be prohibited from requesting Eurodollar
Loans from such Lender hereunder unless such declaration is
subsequently withdrawn or Eurodollar Loans are otherwise
made lawful; and
(ii) require that all outstanding
Eurodollar Loans made by it be converted to Alternate Base
Loans, in which event (A) all such Eurodollar Loans shall be
automatically converted to Alternate Base Loans as of the
effective date of such notice as provided in paragraph (b)
below, (B) all payments of principal which would otherwise
have been applied to repay the converted Eurodollar Loans
shall instead be applied to repay the Alternate Base Loans
resulting from the conversion of such Eurodollar Loans and
(C) the Alternate Base Loans resulting from the conversion
of such Eurodollar Loans shall be payable only at the times
the converted Eurodollar Loans would have been payable;
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provided, however, that such Lender shall use good faith reasonable efforts to
specify a new lending office with respect to such Eurodollar Loans with a view
to mitigating the consequences of such an occurrence to the extent practicable
and consistent with customary practices of such Lender unless in the judgment
of such Lender such specification at such time or in the future might have an
adverse effect on it.
(b) For purposes of Section 2.14(a), a notice to the Borrower by any
Lender shall be effective, if lawful, on the last day of the then current
Interest Period or, if there are then two or more current Interest Periods, on
the last day of each such Interest Period, respectively; otherwise, such notice
shall be effective on the date of receipt by the Borrower.
SECTION 2.15. Indemnity.
The Borrower shall indemnify each Lender against any loss or expense
which such Lender may sustain or incur as a consequence of (i) any failure by
the Borrower to fulfill on the date of any borrowing hereunder the applicable
conditions set forth in Article 4, (ii) any failure by the Borrower to borrow
hereunder after irrevocable notice of borrowing pursuant to Article 2 has been
given or after bids have been accepted, (iii) any payment, prepayment or
conversion of a Eurodollar Loan or Fixed Rate Loan required by any other
provision of this Agreement or otherwise made on a date other than the last day
of the applicable Interest Period, (iv) any default in payment or prepayment of
the principal amount of any Loan or any part thereof or interest accrued
thereon, as and when due and payable (at the due date thereof, by irrevocable
notice of prepayment or otherwise), or (v) the occurrence of any Event of
Default, including, but not limited to, any loss or reasonable expense
sustained or incurred or to be sustained or incurred in liquidating or
employing deposits from third parties acquired to effect or maintain such Loan
or any part thereof as a Eurodollar Loan or Fixed Rate Loan. Such loss or
reasonable expense shall include, without limitation, an amount equal to the
excess, if any, as reasonably determined by each Lender of (x) its cost of
obtaining the funds for the Loan being paid, prepaid or converted or not
borrowed (based on the Adjusted LIBO Rate, or in the case of a Fixed Rate Loan,
the fixed rate of interest applicable therein) for the period from the date of
such payment, prepayment or conversion or failure to borrow to the last day of
the Interest Period for such Loan (or, in the case of a failure to borrow, the
Interest Period for such Loan which would have commenced on the date of such
failure to borrow) over (y) the amount of interest (as reasonably determined by
such Lender) that would be realized by such Lender in reemploying the funds so
paid, prepaid or
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converted or not borrowed. Each Lender shall provide to the Borrower a
statement, supported where applicable by documentary evidence, explaining the
amount of any such loss or expense, which statement shall be prepared in good
faith and, in the absence of manifest error, shall be conclusive with respect
to the parties hereto.
SECTION 2.16. Pro Rata Treatment.
Except as permitted under Sections 2.13 or 2.14, each Revolving Credit
Borrowing, each payment or prepayment of principal of any Revolving Credit
Loan, each payment of interest with respect to any Revolving Credit Loan, each
payment of the Facility Fee, each reduction of the Commitments and each
refinancing of any Borrowing with a Revolving Credit Borrowing shall be made
pro rata among the Lenders in accordance with their respective Commitments or,
if such Commitments shall have expired or been terminated, in accordance with
the respective principal amounts of the Revolving Credit Loans extended by each
Lender. Each payment of principal of any Competitive Borrowing shall be
allocated pro rata among the Lenders participating in such Borrowing in
accordance with the respective principal amounts of their outstanding
Competitive Loans comprising such Borrowing. Each payment of interest on any
Competitive Borrowing shall be allocated pro rata among the Lenders
participating in such Borrowing in accordance with the respective amounts of
accrued and unpaid interest on their outstanding Competitive Loans comprising
such Borrowing. For purposes of determining the available Commitments of the
Lenders at any time, each outstanding Competitive Borrowing shall be deemed to
have utilized the Commitments of the Lenders (including those Lenders which
shall not have made Loans as part of such Competitive Borrowing) pro rata in
accordance with such respective Commitments. Each Lender agrees that in
computing such Lender's portion of any Borrowing to be made hereunder, the
Agent may, in its discretion, round each Lender's percentage of such Borrowing
to the next higher or lower whole dollar amount.
SECTION 2.17. Sharing of Setoffs.
Each Lender agrees that if it shall, through the exercise of a right
of banker's lien, setoff or counterclaim against the Borrower, including, but
not limited to, a secured claim under Section 506 of Title 11 of the United
States Code or other security or interest arising from, or in lieu of, such
secured claim, received by such Lender under any applicable bankruptcy,
insolvency or other similar law or otherwise, obtain payment (voluntary or
involuntary) in respect of any Loan or Loans as a result of which the unpaid
principal portion of the Loans
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held by it shall be proportionately less than the unpaid principal portion of
the Loans of any other Lender, it shall be deemed to have simultaneously
purchased from such other Lender a participation in the Loans of such other
Lender, so that the aggregate unpaid principal amount of the Loans and
participations in Loans held by each Lender shall be in the same proportion to
the aggregate unpaid principal amount of all Loans then outstanding as the
principal amount of its Loans prior to such payment or exercise of banker's
lien, setoff or counterclaim was to the principal amount of all Loans
outstanding prior to such payment or exercise of banker's lien, setoff or
counterclaim; provided, however, that if any such purchase or purchases or
adjustments shall be made pursuant to this Section 2.17 and the payment giving
rise thereto shall thereafter be recovered, such purchase or purchases or
adjustments shall be rescinded to the extent of such recovery and the purchase
price or prices or adjustment restored without interest. The Borrower
expressly consents to the foregoing arrangements and agrees that any Lender
holding a participation in a Loan deemed to have been so purchased may exercise
any and all rights of banker's lien, setoff or counterclaim with respect to any
and all moneys owing by the Borrower to such Lender as fully as if such Lender
had made a Loan directly to the Borrower in the amount of such participation.
SECTION 2.18. Tax Forms.
With respect to each Lender which is organized under the laws of a
jurisdiction outside the United States, on the date of the initial borrowing
hereunder, and from time to time thereafter if requested by the Borrower or the
Agent, each such Lender shall provide the Agent and the Borrower with the forms
prescribed by the Internal Revenue Service of the United States certifying as
to such Lender's status for purposes of determining exemption from United
States withholding taxes with respect to all payments to be made to such Lender
hereunder or other documents satisfactory to the Borrower and the Agent
indicating that all payments to be made to such Lender hereunder are subject to
such tax at a rate reduced by an applicable tax treaty. Unless the Borrower
and the Agent have received such forms or such documents indicating that
payments hereunder are not subject to United States withholding tax or are
subject to such tax at a rate reduced by an applicable tax treaty, the Borrower
or the Agent shall withhold taxes from such payments at the applicable
statutory rate in the case of payments to or for any Lender organized under the
laws of a jurisdiction outside the United States.
SECTION 2.19. Certain Lender Obligations.
(a) In the event (i) any Lender delivers a certificate
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requesting compensation pursuant to Section 2.13, (ii) any Lender delivers a
notice described in Section 2.14 or (iii) Borrower is required to pay any
additional amount to any Lender, or any Governmental Authority on account of
any Lender, pursuant to Section 2.13, Borrower may, at its sole expense and
effort, require such Lender to transfer and assign, without recourse (in
accordance with Section 9.02), all of its interests, rights and obligations
under this Agreement to an assignee which shall assume such assigned
obligations (which assignee may be another Lender, if a Lender accepts such
assignment); provided that (A) such assignment shall not conflict with any law,
rule or regulation or order of any court or other Governmental Authority having
jurisdiction, (B) Borrower shall have received the written consent of the
Agent, which consent shall not unreasonably be withheld, and (C) Borrower or
such assignee shall have paid to the assigning Lender in immediately available
funds an amount equal to the sum of the principal of and interest accrued to
the date of such payment on the outstanding Loans of such Lender, plus all Fees
and other amounts accrued for the account of such Lender hereunder; provided
further that if prior to any such transfer and assignment the circumstances or
event that resulted in such Lender's claim for compensation under Section 2.13
or notice under Section 2.14, as the case may be, cease to cause such Lender to
suffer increased costs or reductions in amounts received or receivable or
reduction in return on capital, or cease to have the consequences specified, or
cease to result in amounts being payable, as the case may be (including as a
result of any action taken by such Lender pursuant to paragraph (b) below), or
if such Lender shall waive its right to claim further compensation under
Section 2.13 in respect of such circumstances or event or shall withdraw its
notice under Section 2.14 or shall waive its right to further payments under
Section 2.13 in respect of such circumstances or event, as the case may be,
then such Lender shall not thereafter be required to make any such transfer and
assignment hereunder.
(b) If (i) any Lender shall request compensation under Section 2.13,
(ii) any Lender delivers a notice described in Section 2.14 or (iii) Borrower
is required to pay any additional amount to any Lender, or any Governmental
Authority on account of any Lender, pursuant to this Agreement, such Lender
shall exercise reasonable efforts (which shall not require such Lender to incur
an unreimbursed loss or unreimbursed cost or expense or otherwise take any
action inconsistent with its internal policies or suffer any disadvantage or
burden deemed by it to be significant) to assign its rights and delegate and
transfer its obligation hereunder to another of its offices, branches or
affiliates, if such assignment would reduce its claims for compensation under
Section 2.13 or enable it to withdraw its notice pursuant to Section 2.14 or
would reduce amounts payable pursuant to this
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Agreement, as the case may be, in the future. The Borrower hereby agrees to
pay all reasonable costs and expenses incurred by any Lender in connection with
any such assignment, delegation and transfer.
(c) If a Lender changes its applicable lending office (other than
pursuant to clause (b) above) and the effect of the change, as of the date of
the change, would be to cause the Borrower to become obligated to pay any
additional amount under this Agreement, the Borrower shall not be obligated to
pay such additional amount.
3. REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants to each of the Lenders that:
SECTION 3.01. Organization, Corporate Powers, etc.
The Borrower and each of the Subsidiaries is a corporation duly
organized and has the corporate power and authority to own its property and to
carry on its business as now conducted. The Borrower and each of the Material
Subsidiaries is validly existing and in good standing under the laws of the
jurisdiction in which it is incorporated, and is qualified to do business in
every jurisdiction where it owns or leases any material property, other than
such jurisdictions where such non-qualification will not have an adverse
material economic effect on the Borrower and its Subsidiaries taken as a whole.
The Borrower has the corporate power to execute, deliver and perform this
Agreement, to borrow hereunder and to execute and deliver the Notes.
SECTION 3.02. Authorization of Borrowing, etc.
The execution, delivery and performance of this Agreement, the
borrowings hereunder and the execution and delivery of the Notes (a) have been
duly authorized by all requisite corporate action and (b) will not violate (i)
any provision of law, any order of any court or other agency of government
applicable to the Borrower or its Subsidiaries or (ii) the Certificate of
Incorporation or By-Laws of the Borrower or any Subsidiary or any indenture,
agreement or other instrument to which the Borrower or any Subsidiary is a
party or by which it or any of the respective properties of the Borrower or any
Subsidiary is bound, or be in conflict with, result in a breach of or
constitute (with due notice or lapse of time or both) a default under any such
indenture, agreement or other instrument (except
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such conflicts, breaches, or defaults, which do not, when taken as a whole,
have an adverse material economic effect on the Borrower and its Subsidiaries
taken as a whole), or result in the creation or imposition of any Lien of any
nature whatsoever upon any of the property or assets of the Borrower or any
Subsidiary. This Agreement and the Notes are legal, valid and binding
obligations of the Borrower and are enforceable against the Borrower in
accordance with their terms.
SECTION 3.03. Financial Statements.
The Borrower has heretofore furnished to each Lender (i) the
consolidated balance sheet of the Borrower as of December 31, 1993, and the
consolidated statement of income and changes in financial position of the
Borrower for the year ended December 31, 1993, all audited by Deloitte &
Touche, independent auditors, and (ii) an unaudited consolidated balance sheet
of the Borrower as of September 30, 1993, and the related unaudited
consolidated statements of income and cash flow of the Borrower for the fiscal
quarter ended September 30, 1993, all certified by the Senior Vice President
and Chief Financial Officer or the Treasurer of the Borrower. All such balance
sheets and statements of income and cash flow present fairly the financial
condition and results of operations of the Borrower and the Subsidiaries as of
the dates and for the periods indicated (subject to normal year-end audit
adjustments in the case of such interim financial statements). Such balance
sheets disclose all known material liabilities, direct or contingent, of the
Borrower and the Subsidiaries, as of the dates thereof. The financial
statements referred to in this Section have been prepared in accordance with
generally accepted accounting principles applied on a consistent basis.
SECTION 3.04. No Material Adverse Change.
There has been no material adverse change in the condition, financial
or other, of the Borrower and the Subsidiaries taken as whole since December
31, 1993.
SECTION 3.05. Title to Properties.
The Borrower and the Subsidiaries have good and marketable title to
their respective properties and assets reflected on the balance sheets referred
to in Section 3.03 or acquired since the date thereof except for such assets
(a) as have been disposed of since the date thereof as no longer used or useful
in the conduct of their respective businesses, (b) as have been disposed of in
the ordinary course of business or (c) have title defects which do not
materially interfere with the existing use of the property and do not
materially adversely affect the
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merchantability of the title thereto (except that the inability to assign or
sublet any leasehold estate, either with or without the consent of the lessor,
shall not be deemed a title defect which materially adversely affects the
merchantability of title thereto), and all such properties are free and clear
of Liens, except such as are not prohibited by Section 6.02.
SECTION 3.06. Litigation.
Except as previously disclosed in the financial statements delivered
in accordance with Section 3.03 or otherwise disclosed in writing to the
Lenders, there is no action, suit or other proceeding (whether or not
purportedly on behalf of the Borrower) at law or in equity or by or before any
governmental instrumentality or other agency now pending or, to the knowledge
of the Borrower, threatened against or affecting the Borrower or any of the
Subsidiaries or any property or rights of the Borrower or any of the
Subsidiaries, which, if adversely determined, would materially impair the right
of the Borrower and the Subsidiaries on a combined basis to carry on business
substantially as now conducted, or would materially and adversely affect the
financial condition of the Borrower and the Subsidiaries on a combined basis.
SECTION 3.07. Tax Returns.
The Borrower and each of the Subsidiaries have filed or caused to be
filed all Federal, state and local tax returns which, to the knowledge of the
responsible officers of the Borrower, are required to be filed, and have paid
or caused to be paid all taxes as shown on such returns or on any assessment
received by it or by any of them, to the extent that such taxes have become
due, except as otherwise permitted pursuant to Section 5.02.
SECTION 3.08. Agreements.
Neither the Borrower nor any Subsidiary is a party to any agreement or
instrument or subject to any charter or other corporate restriction materially
and adversely affecting the business, properties or assets, operations or
condition (financial or other) of the Borrower and the Subsidiaries on a
combined basis. Neither the Borrower nor any of the Subsidiaries is in default
in the performance, observance or fulfillment of any of the obligations,
covenants or conditions contained in any agreement or instrument to which it is
a party, which default could materially and adversely affect the business,
properties or assets, operations or condition (financial or other) of the
Borrower and the Subsidiaries on a combined basis.
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SECTION 3.09. Subordinated Indebtedness.
There is no Subordinated Indebtedness of the Borrower outstanding as
of the date hereof.
SECTION 3.10. Federal Reserve Regulations.
(a) Neither the Borrower nor any Subsidiary is engaged principally,
or as one of its important activities, in the business of extending credit for
the purpose of purchasing or carrying any Margin Stock, as such term is defined
in Regulation U.
(b) No part of the proceeds of the Loans will be used, whether
directly or indirectly, and whether immediately, incidentally or ultimately,
(i) to purchase or carry Margin Stock (with the exception of the common stock
of the Borrower or the common stock of a publicly held company, provided that
the purchase or carrying of such stock complies with the Regulations of the
Board) or to extend credit to others for the purpose of purchasing or carrying
Margin Stock or to refund indebtedness originally incurred for such purpose, or
(ii) for any purpose which entails a violation of, or which is inconsistent
with, the provisions of the Regulations of the Board, including, without
limitation, Regulation G, U or X. If requested by any Lender, the Borrower
shall furnish to such Lender a statement on Federal Reserve Form U-1 referred
to in Regulation U.
(c) On the date of each borrowing hereunder which constitutes a
"purpose credit" within the meaning of Regulation U, and after giving effect to
the use by the Borrower of the proceeds of such borrowing, less than 25% of the
assets of the Borrower and its Subsidiaries subject to the provisions of
Section 6.02 and less than 25% of the assets of the Borrower and its
Subsidiaries subject to the provisions of Section 6.05 will consist of Margin
Stock, as such term is defined in Regulation U.
SECTION 3.11. Employee Benefit Plans.
The Borrower and each Subsidiary are in compliance in all material
respects with the applicable provisions of ERISA and the regulations and
published interpretations thereunder. No Reportable Event has occurred with
respect to any Plan administered by the Borrower, any Subsidiary or any
administrator designated by the Borrower or any Subsidiary that could
materially and adversely affect the business, properties or assets, operations
or condition (financial or other) of the Borrower and the Subsidiaries on a
combined basis. There are no material unfunded vested liabilities under any
Plan administered by the
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Borrower or any of the Subsidiaries or by any administrator designated by the
Borrower or any Subsidiary, other than those liabilities, if any, which when
taken as a whole will not have a material adverse economic effect on the
Borrower or any of its Subsidiaries taken as a whole.
4. CONDITIONS OF LENDING
The obligations of the Lenders to make Loans hereunder shall be
subject to the following conditions precedent:
SECTION 4.01. All Borrowings.
On the date of each borrowing hereunder:
(a) The Agent and the Lenders shall have received a notice of
such borrowing as required by Section 2.02 or Section 2.03, as
applicable.
(b) Except in connection with a refinancing of a Revolving
Credit Borrowing with a new Revolving Credit Borrowing which, after
giving effect to such borrowing, does not increase the aggregate
amount of the Loans of any Lender outstanding, the representations and
warranties set forth in Article 3 shall be true and correct in all
material respects with the same effect as though made on and as of
such date.
(c) The Borrower shall be in compliance with all the terms
and provisions contained herein on its part to be observed or
performed, and at the time of and immediately after such borrowing (i)
no Event of Default shall have occurred and be continuing and (ii)
unless (A) the borrowing hereunder will not have the effect of
increasing the aggregate amount of Loans of any Lender outstanding and
(B) such borrowing is Alternate Base Loans or Eurodollar Loans with an
Interest Period of 3 months or less, no event which with notice or
lapse of time or both would constitute an Event of Default shall have
occurred and be continuing.
Each borrowing hereunder shall be deemed to be a representation and warranty by
the Borrower on the date of such borrowing as to the matters specified in
paragraphs (b) and (c) of this Section 4.01; provided, however, that for the
purposes of this Section 4.01, the representations and warranties as to
Sections 3.04 and 3.06 in respect to borrowings hereunder, which, after giving
effect to the borrowing, increase the aggregate amount of
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outstanding Loans of any Lender, shall be as follows:
(x) No Material Adverse Change. Since the date of the most recent
financial statement delivered to the Lenders pursuant to Section 5.03(a)(i) or
(ii) hereof or Section 3.03 if no statement has been delivered at such time
pursuant to Section 5.03(a)(i) or (ii) hereof, there has been no material
adverse change in the condition, financial or other, of the Borrower and the
Subsidiaries taken as a whole.
(y) Litigation. Except as previously disclosed in the financial
statements delivered in accordance with Section 3.03 and 5.03 or otherwise
disclosed in writing to the Lenders, there has been no action, suit or
proceeding (whether or not purportedly on behalf of the Borrower) at law or in
equity or by or before any governmental instrumentality or other agency now
pending or, to the knowledge of the Borrower, threatened against or affecting
the Borrower or any of the Subsidiaries or any property or rights of the
Borrower or any of the Subsidiaries, which, if adversely determined, would
materially impair the right of the Borrower and the Subsidiaries on a combined
basis to carry on business substantially as now conducted, or would materially
and adversely affect the financial condition of the Borrower and the
Subsidiaries on a combined basis.
SECTION 4.02. Closing.
The obligations of the Lenders to make Loans hereunder are subject to
the following additional conditions precedent on or before the Effective Date:
(a) The Lenders shall have received a favorable written opinion of
David W. Bowman, Esq., Senior Vice-President, General Counsel and Secretary for
the Borrower, dated the Effective Date, addressed to the Lenders, (i) covering
the matters set forth in Section 3.01 in respect of the Borrower, Sections 3.02
and 3.06 (which in the case of Sections 3.02(b)(i) and 3.06 may be to the best
knowledge of such counsel after due inquiry), and (ii) to the effect that (x)
this Agreement and the Notes have been duly executed and delivered by the
Borrower and constitute the legal, valid and binding obligations of the
Borrower, enforceable in accordance with their respective terms (subject, as to
enforcement of remedies, to applicable bankruptcy, reorganization, insolvency
and similar laws affecting creditors' rights generally and to moratorium laws
from time to time in effect) and (y) no consent or approval of any governmental
authority or regulatory body to the execution, delivery and performance of this
Agreement or the Notes or to the borrowings hereunder is required by law, or if
any such consent or approval is necessary it has been obtained, which
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opinion shall be satisfactory to Lord Day & Lord, Barrett Smith, special
counsel for the Lenders.
(b) All legal matters incident to this Agreement, the Notes and the
borrowings hereunder shall be satisfactory to Lord Day & Lord, Barrett Smith,
special counsel for the Lenders.
(c) The Lenders shall have received (i) a copy of the Certificate of
Incorporation, as amended, of the Borrower, certified by the Secretary of State
of the State of Delaware as of a recent date, and a certificate as to the good
standing of the Borrower from such Secretary of State, dated as of a recent
date; (ii) a certificate of the Secretary or an Assistant Secretary of the
Borrower, dated the Effective Date and certifying (A) that attached thereto is
a true and complete copy of the By-laws of the Borrower as in effect on the
date of such certificate, (B) that attached thereto is a true and complete copy
of resolutions duly adopted by the Board of Directors of the Borrower
authorizing the execution, delivery and performance of this Agreement and the
Notes and the borrowings by the Borrower hereunder and that such resolutions
have not been modified, rescinded or amended and are in full force and effect,
(C) that the Certificate of Incorporation of the Borrower has not been amended
since the date of the certification thereto furnished pursuant to (i) above,
and (D) as to the incumbency and specimen signature of each officer of the
Borrower executing this Agreement, the Notes or any other document delivered in
connection herewith or therewith; (iii) a certificate of another officer of the
Borrower as to the incumbency and specimen signature of the Secretary or such
Assistant Secretary of the Borrower; and (iv) such other documents as any
Lender or Lord Day & Lord, Barrett Smith, special counsel for the Lenders, may
reasonably request.
(d) Each Lender shall have received a Note duly executed by the
Borrower payable to its order and otherwise complying with the provisions of
Section 2.05.
5. AFFIRMATIVE COVENANTS
The Borrower covenants and agrees with each of the Lenders that, so
long as this Agreement shall remain in effect or the Notes, the Facility Fee or
any other amounts or expenses payable hereunder shall be unpaid, unless the
Required Lenders shall otherwise consent in writing, it will, and will cause
each of the Subsidiaries to:
SECTION 5.01. Corporate Existence, Properties, etc.
Do or cause to be done all things necessary to preserve
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and keep in full force and effect its corporate existence, material rights and
franchises and comply with all material laws applicable to it; continue to
conduct and operate its business substantially as conducted and operated on a
consolidated basis during the present and preceding calendar year (subject to
changes in the ordinary course of business or the provisions of Section 6.03);
at all times maintain, preserve and protect all material franchises and
tradenames and preserve all the remainder of its material property used or
useful in the conduct of its business and keep the same in good repair, working
order and condition, and from time to time make, or cause to be made, all
needful and proper repairs, renewals, replacements, betterments and
improvements thereto so that the business carried on in connection therewith
may be properly and advantageously conducted at all times; at all times keep
its insurable properties adequately insured and maintain (a) insurance or
self-insurance, to such extent and against such risks, including fire, as is
customary with companies in the same or similar business, (b) necessary
workmen's compensation insurance and (c) such other insurance as may be
required by law or as may be reasonably required in writing by the Lenders;
provided, however, that nothing contained in this Section 5.01 shall prevent
the Borrower or any Subsidiary from ceasing or omitting to exercise any rights,
licenses, permits or franchises (including, in the case of a Subsidiary, the
corporate existence thereof) which in the judgment of the Borrower can no
longer be profitably exercised or availed of or prevent the Borrower or any
Subsidiary from selling, abandoning or otherwise disposing of any property the
retention of which in the good faith judgment of the Borrower is inadvisable or
not necessary to the business of the Borrower or any Subsidiary, or prevent any
liquidation of any Subsidiary or any merger, consolidation, sale or acquisition
expressly permitted by the provisions of Section 6.03 or prevent the Borrower
or any Subsidiary from self-insuring certain properties if insurance shall not
be available at a reasonable cost in the good faith judgment of the Borrower.
SECTION 5.02. Payment of Obligations, Taxes, etc.
Pay all its obligations promptly and in accordance with normal terms
and pay and discharge or cause to be paid and discharged all taxes, assessments
and governmental charges or levies imposed upon it or upon its income and
profits, or upon any of its property, real, personal or mixed, or upon any part
thereof, before the same shall become in default, as well as all lawful claims
for labor, material and supplies or otherwise which, if unpaid, might become a
Lien or charge upon such properties or any part thereof; provided, however,
that neither the Borrower nor any of the Subsidiaries shall be required to pay
and discharge or
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to cause to be paid and discharged any such tax, assessment, charge, levy or
claim so long as the validity thereof shall be contested in good faith by
appropriate proceedings and the Borrower or such Subsidiary, as the case may
be, shall have set aside on its books reserves which are believed in good faith
by the Borrower and such Subsidiary to be adequate with respect to any such
tax, assessment, charge, levy or claim so contested.
SECTION 5.03. Financial Statements, Reports, etc.
(a) In the case of the Borrower, furnish to each Lender:
(i) within 120 days after the end of each fiscal year,
consolidated balance sheets of the Borrower and the Subsidiaries as of
the end of such fiscal year and consolidated statements of income and
retained earnings for such fiscal year, certified by Deloitte & Touche
or other independent auditors of recognized standing and acceptable to
the Lenders, such acceptance not to be unreasonably withheld (the form
of such certification to be acceptable to the Lenders);
(ii) within 60 days after the end of each of the first three
quarters in each fiscal year, consolidated financial statements
similar to those referred to in clause (i) above, unaudited but
certified by the Senior Vice President and Chief Financial Officer,
Treasurer or Controller of the Borrower, such balance sheets to be as
of the end of such quarter and such statements of income and surplus
to be for the period from the beginning of the fiscal year to the end
of such quarter, in each case subject to normal year-end audit
adjustments;
(iii) concurrently with the statements submitted under clause
(i) above, a certificate of the firm certifying such statements to the
effect that in the normal course of its examination it did not become
aware of any Event of Default specified in Article 7 or any event
which with notice or lapse of time or both would constitute such an
Event of Default, or, if it did become aware of such Event of Default
or event, specifying the nature and extent thereof;
(iv) concurrently with each delivery of financial statements
required by clauses (i) and (ii) above, a certificate signed in the
name of the Borrower by its President, one of its Senior Vice
Presidents or
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Vice Presidents or its Treasurer (a) stating that there exists no
Event of Default specified in Article 7 nor any event which upon
notice or lapse of time or both would constitute such an Event of
Default, or, if any such Event of Default or event shall have
occurred, specifying the nature and extent thereof, the period of
existence thereof and what action the Borrower proposes to take with
respect thereto and (b) demonstrating in detail satisfactory to the
Agent compliance with the provisions of Sections 6.04, 6.05 and 6.07;
and
(v) with reasonable promptness, such other information
regarding the operations, business affairs and financial condition of
the Borrower and the Subsidiaries as any of the Lenders may from time
to time reasonably request.
(b) In the case of MAPL, furnish to each Lender:
(i) within 120 days after the end of each fiscal year,
consolidated balance sheets of MAPL and the MAPL Subsidiaries as of
the end of such fiscal year, and consolidated statements of income and
retained earnings for such fiscal year, unaudited but certified by the
principal financial officer of MAPL;
(ii) within 60 days after the end of each of the first three
quarters in each fiscal year, consolidated financial statements
similar to those referred to in clause (i) above (with the exception
of financial footnotes), unaudited but certified by the principal
financial officer of MAPL, such balance sheets to be as of the end of
such quarter and such statements of income and surplus to be for the
period from the beginning of the fiscal year to the end of such
quarter, in each case subject to normal year-end audit adjustments;
and
(iii) concurrently with the statements submitted under
clauses (i) and (ii) above a certificate signed by the principal
financial officer of MAPL setting forth the amount at the end of such
fiscal period of the Funded Indebtedness of MAPL and the percentage
that such Funded Indebtedness is of the MAPL Consolidated Net Tangible
Assets at such time.
(c) In the case of Seminole, in the event any Funded Indebtedness of
Seminole is outstanding, furnish to each Lender:
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(i) within 120 days after the end of each fiscal year,
consolidated balance sheets of Seminole and its subsidiaries as of the
end of such fiscal year, and consolidated statements of income and
retained earnings for such fiscal year, unaudited but certified by the
principal financial officer of Seminole;
(ii) within 60 days after the end of each of the first three
quarters in each fiscal year, consolidated financial statements
similar to those referred to in clause (i) above (with the exception
of financial footnotes), unaudited but certified by the principal
financial officer of Seminole, such balance sheets to be as of the end
of such quarter and such statements of income and surplus to be for
the period from the beginning of the fiscal year to the end of such
quarter, in each case subject to normal year-end audit adjustments;
and
(iii) concurrently with the statements submitted under
clauses (i) and (ii) above, a certificate signed by the principal
financial officer of Seminole setting forth the amount at the end of
such fiscal period of the Funded Indebtedness of Seminole and the
percentage that such Funded Indebtedness is of the Seminole
Consolidated Net Tangible Assets at such time.
SECTION 5.04. Litigation Notice.
Give the Agent notice, promptly, of (a) entry of judgment in any
action, suit or proceedings at law or in equity or by or before any
governmental instrumentality or other agency or (b) any action, suit or
proceeding at law or in equity or by or before any governmental instrumentality
or other agency which, under either circumstance, in the judgment of Borrower's
management, if adversely determined, would materially impair the right of the
Borrower and the Subsidiaries on a combined basis to carry on business
substantially as now conducted, or would materially and adversely affect the
business, operations, properties or assets or condition (financial or other) of
the Borrower and the Subsidiaries on a combined basis.
SECTION 5.05. ERISA Reports.
Furnish to the Agent (a) as soon as possible, and in any event within
30 days after any executive officer of the Borrower knows or has reason to know
that any material Reportable Event with respect to any Plan has occurred, a
statement of the principal financial officer of the Borrower setting forth
details
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as to such Reportable Event and the action which the Borrower proposes to take
with respect thereto, together with a copy of the notice of such Reportable
Event given to the Pension Benefit Guaranty Corporation; and (b) promptly after
receipt thereof, a copy of any notice the Borrower or any Subsidiary shall have
received from the Pension Benefit Guaranty Corporation relating to the
intention of such Corporation to terminate any Plan or to appoint a trustee to
administer any Plan.
6. NEGATIVE COVENANTS
The Borrower covenants and agrees with each of the Lenders that so
long as this Agreement shall remain in effect or the Notes, the Facility Fee or
any other amounts or expenses payable hereunder shall be unpaid, unless the
Required Lenders shall otherwise consent in writing, it will not, and will not
cause or permit any of the Subsidiaries to, directly or indirectly:
SECTION 6.01. Indebtedness.
Incur, create, assume or permit to exist any Indebtedness or liability
for borrowed money, or any Indebtedness evidenced by notes, bonds, debentures
or similar obligations, or accept any deposits or advances of any kind except:
(a) the Notes;
(b) deposits or advances accepted in the ordinary course of business;
(c) Indebtedness of any Subsidiary to the Borrower or any Wholly
Owned Subsidiary;
(d) Current Indebtedness of the Borrower to any Subsidiary;
(e) Subordinated Indebtedness of the Borrower (but not any
Subsidiary);
(f) Funded Indebtedness of the Borrower (but not any Subsidiary), to
the extent permitted by Section 6.05;
(g) Current Indebtedness;
(h) Indebtedness secured by Liens referred to in Section 6.02(g);
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(i) Funded Indebtedness of MAPL (but not any MAPL Subsidiary)
provided that such Funded Indebtedness shall not at any time exceed the lesser
of 50% of the MAPL Consolidated Net Tangible Assets or $110,000,000; and
(j) Funded Indebtedness of Seminole, provided that such Funded
Indebtedness (i) is without recourse to the Borrower and its Subsidiaries
(other than Seminole) or any of their respective properties (other than the
property of Seminole) and (ii) shall not at any time exceed 40% of the Seminole
Consolidated Net Tangible Assets. For purposes of determining Funded
Indebtedness of Seminole, Indebtedness of Seminole to the Borrower shall be
excluded.
SECTION 6.02. Liens.
Create, assume or suffer to exist any Lien upon any of its property or
assets (other than Common Stock of the Borrower held in treasury), whether now
owned or hereafter acquired, except:
(a) Liens for taxes not yet due or which are being contested in good
faith by appropriate proceedings;
(b) other Liens incidental to the conduct of its business or the
ownership of its property and assets which are not incurred in connection with
the borrowing of money or the obtaining of advances or credit, and which do not
in the aggregate materially detract from the value of the property or assets of
the Borrower and the Subsidiaries or materially impair the use thereof in the
operation of the respective businesses of the Borrower and the Subsidiaries;
(c) Liens on property or assets of a Subsidiary to secure obligations
of such Subsidiary to the Borrower or any Wholly Owned Subsidiary;
(d) any Lien existing on any real or personal property of any
corporation at the time it becomes a Subsidiary, or existing prior to the time
of acquisition upon any real or personal property acquired by the Borrower or
any Subsidiary through purchase, merger or consolidation or otherwise, whether
or not assumed by the Borrower or such Subsidiary, or placed upon real property
being acquired by the Borrower or any Subsidiary to secure a portion of the
purchase price thereof; provided, however, that (i) such property shall not be
or shall not thereby become encumbered in an amount in excess of two-thirds of
the lesser of cost thereof or fair value therefor (as determined in good faith
by the Board of Directors of the Borrower or Subsidiary, where
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relevant), (ii) any such Lien shall not encumber any other property of the
Borrower or such Subsidiary, (iii) the aggregate principal amount of
Indebtedness secured by all such Liens and any Liens permitted by clause (e)
below, at any one time outstanding for the Borrower and the Subsidiaries, shall
not exceed an amount equal to 5% of Consolidated Capitalization and (iv)
immediately after giving effect to the incurrence of the Indebtedness secured
by any such Lien, the Borrower will not have outstanding Funded Indebtedness in
excess of the limitations set forth in Section 6.05;
(e) any Lien renewing, extending or refunding any Lien permitted by
clause (d) above;provided, however, that (i) the principal amount of
Indebtedness secured shall not be increased, (ii) the Lien shall not be
extended to any other property and (iii) immediately after giving effect to the
incurrence of the Indebtedness secured by any such Lien, the Borrower will not
have outstanding Funded Indebtedness in excess of the limitations set forth in
Section 6.05;
(f) Liens existing under mineral production payments;
(g) Liens placed upon personal property purchased under conditional
sale or other title retention agreements;provided, however, that the aggregate
amount secured by all such Liens shall not exceed $10,000,000 at any one time
outstanding for the Borrower and the Subsidiaries; and
(h) Liens to secure any Indebtedness; provided, however, that (i) the
aggregate principal amount of Indebtedness secured by all such Liens when added
to Liens permitted by clauses (a) through (g) above, at any one time
outstanding for the Borrower and the Subsidiaries, shall not exceed an amount
equal to 10% of Consolidated Capitalization and (ii) immediately after giving
effect to the incurrence of the Indebtedness secured by any such Lien, the
Borrower will not have outstanding Funded Indebtedness in excess of the
limitations set forth in Section 6.05.
SECTION 6.03. Sale of Stock and Debt of Subsidiaries; Merger and Sale
of Assets.
(a) Sell or otherwise dispose of any shares of stock or debt of any
Subsidiary or sell, lease, transfer or otherwise dispose of all or a
substantial part of its assets, unless the Board of Directors of the Borrower
has in its sole judgment determined that such sale is for an amount not less
than the fair market value of such assets. For purposes of this Section
6.03(a), it is agreed that 15% or less of the book value of such
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assets or 15% or less of Consolidated Net Earnings shall not, and that more
than 15% of such book value or Consolidated Net Earnings shall, be considered
"substantial" for such purposes.
(b) Merge or consolidate with any other corporation, except that
(i) (A) any Subsidiary may merge or consolidate with the
Borrower (provided that the Borrower shall be the continuing or
surviving corporation) and (B) in the case of any Subsidiary other
than MAPL, merge or consolidate with any one or more other
Subsidiaries (other than MAPL);
(ii) any Subsidiary may sell, lease, transfer or otherwise
dispose of any of its assets to the Borrower or another Subsidiary
(other than MAPL);
(iii) any Subsidiary may sell or otherwise dispose of all or
substantially all of its assets subject to the conditions specified in
paragraph (a) above with respect to a sale of the stock of such
Subsidiary;
(iv) the Borrower may merge or consolidate with any other
corporation, provided that (A) the Borrower shall be the continuing or
surviving corporation and (B) the Borrower as the continuing or
surviving corporation shall not, immediately after such merger or
consolidation, be in default under this Agreement; and
(v) any Subsidiary may merge or consolidate with any other
corporation, provided that (A) such Subsidiary shall be the continuing
or surviving corporation or the continuing or surviving corporation
shall, by virtue of such merger or consolidation, become a Subsidiary
and (B) the Borrower shall not, immediately after such merger or
consolidation, be in default under this Agreement.
SECTION 6.04. Consolidated Net Worth.
Permit Consolidated Net Worth at any time to be less than $400,000,000
plus 50% of the aggregate of Consolidated Net Income from January 1, 1994 to
the date of calculation. "Consolidated Net Worth" shall mean an amount equal
to (a) Consolidated Net Assets less (b) Consolidated Funded Indebtedness.
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SECTION 6.05. Funded Indebtedness.
Permit Consolidated Funded Indebtedness to exceed an amount equal to
the following percentage of Consolidated Capitalization: 65% from the
Effective Date through December 31, 1994; 60% thereafter through December 31,
1995 and 55% thereafter.
SECTION 6.06. Dividend Restrictions.
Permit MAPL to enter into any amendment to, or modification of, any
restriction of the payment of dividends in an existing agreement; provided,
however, that MAPL may (a) allow to exist an agreement which restricts the
declaration or payment of dividends in the event that Indebtedness of MAPL
would exceed 50% of the MAPL Consolidated Net Tangible Assets after giving
effect to such declaration or payment and (b) enter into any new agreement
which restricts the payment of dividends provided that such restriction is no
more limiting than the restriction contained in (a) above.
SECTION 6.07. Earnings Before Interest and Taxes Coverage Ratio.
Permit the ratio, determined as of the last day of each fiscal quarter
of the Borrower for the Rolling Period ending on such date, of
Consolidated-EBIT during such period to Consolidated Interest Expense during
such period to be less than 3.0:1.
7. EVENTS OF DEFAULT
In case of the happening of any of the following events ("Events of
Default"):
(a) any representation or warranty made in connection with
this Agreement or in any report, certificate, financial statement or
other instrument furnished in connection with this Agreement or with
the execution and delivery of the Notes or the borrowings hereunder
shall prove to be false or misleading in any material respect;
(b) default shall be made in the payment of the principal of,
or any installment of principal of, or interest on, the Notes, when
and as the same shall become due and payable, whether at the due date
thereof or at a date fixed for prepayment thereof or by acceleration
thereof or otherwise and, in the case of interest, such default shall
continue unremedied for 10
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days;
(c) the Borrower shall default in any payment in excess of
$7,500,000, or any Subsidiary shall default in any payment in excess
of $3,500,000, each on account of principal of or interest on any
other obligation for borrowed money (or any similar obligation under a
conditional sale or other title retention agreement or any obligation
secured by a purchase money mortgage or any obligation under notes
payable or drafts accepted representing extensions of credit), or on
any guarantee of such an obligation of a third party, beyond any
period of grace provided with respect thereto or shall default in the
performance of any other material agreement, term or condition
contained in any agreement under which any such obligation shall have
been created if the effect of any such default shall be to cause, or
to permit the holder or holders of such obligation (or a trustee on
behalf of such holder or holders) to cause such obligation to become
due prior to its stated maturity;
(d) default shall be made in the due observance of any
covenant, condition or agreement on the part of the Borrower contained
in Article 6;
(e) default shall be made in the due observance or
performance of any other covenant, condition or agreement to be
observed or performed pursuant to the terms hereof and such default
shall continue unremedied for 30 days after written notice thereof to
the Borrower by the Agent; provided, however, that (i) if by reason of
the nature of such default the same cannot be remedied within such 30
day period, (ii) the Borrower has advised the Agent of the actions
being taken to cure such default and (iii) the Borrower proceeds with
reasonable diligence to cure such failure, such 30 day period shall be
extended to 60 days;
(f) the Borrower or any Material Subsidiary shall (i)
voluntarily commence any proceeding or file any petition seeking
relief under Title 11 of the United States Code or any other Federal
or state bankruptcy, insolvency or similar law, (ii) consent to the
institution of, or fail to controvert in a timely and appropriate
manner, any such proceeding or the filing of any such petition, (iii)
apply for or consent to the appointment of a receiver, trustee,
custodian, sequestrator or similar official for the Borrower or
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such Material Subsidiary, or for a substantial part of its property,
(iv) file an answer admitting the material allegations of a petition
filed against it in any such proceeding, (v) make a general assignment
for the benefit of creditors, (vi) become unable generally, or admit
in writing its inability, to pay its debts as they become due or (vii)
take corporate action for the purpose of effecting any of the
foregoing;
(g) an involuntary proceeding shall be commenced or an
involuntary petition shall be filed in a court of competent
jurisdiction seeking (i) relief in respect of the Borrower or any
Material Subsidiary, or of a substantial part of its property, under
Title 11 of the United States Code or any other Federal or state
bankruptcy, insolvency or similar law, (ii) the appointment of a
receiver, trustee, custodian, sequestrator or similar official for the
Borrower or such Material Subsidiary or for a substantial part of its
property or (iii) the winding-up or liquidation of the Borrower or
such Material Subsidiary; and such proceeding or petition shall
continue undismissed for 60 days or an order or decree approving or
ordering any of the foregoing shall be entered;
(h) final judgment shall be entered ordering a dissolution or
split-up of the Borrower or any Material Subsidiary and such judgment
shall continue unstayed and in effect for any period of 30 days;
(i) final judgment for the payment of an uninsured obligation
in excess of an aggregate of $5,000,000 shall be rendered against the
Borrower or any Subsidiary and the same shall remain undischarged for
a period of 60 consecutive days during which execution shall not be
effectively stayed; or
(j) a Reportable Event shall have occurred with respect to
any significant Plan which would materially and adversely affect the
business, properties or assets, operations or condition (financial or
other) of the Borrower and the Subsidiaries on a combined basis, and,
within 30 days after the reporting of such Reportable Event to the
Lenders, the Required Lenders shall have notified the Borrower in
writing that such Reportable Event shall be considered an Event of
Default;
then, and in every such event and at any time thereafter during
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the continuance of such event, the Required Lenders may, by written notice to
the Borrower, at the same or different times, (i) terminate the Commitments of
all the Lenders hereunder, whereupon such Commitments shall terminate and (ii)
declare any Notes outstanding to be forthwith due and payable, both as to
principal and interest, without presentment, demand, protest or any other
notice of any kind, all of which are hereby expressly waived by the Borrower.
Any Lender delivering such notice to the Borrower shall deliver a copy thereof
to each of the other Lenders, but failure to do so shall not affect the
validity of such notice.
8. THE AGENT
SECTION 8.01. Appointment of Agent; Powers.
For convenience of administration, the Agent is acting as agent for
the Lenders under this Agreement. Each of the Lenders acknowledges that it has
decided to enter into this Agreement and to make its Loans hereunder based on
its own analysis of the creditworthiness of the Borrower and agrees that the
Agent shall bear no responsibility for such creditworthiness. Each Lender
hereby irrevocably authorizes the Agent, at its discretion, to take such
actions as agent on its behalf and to exercise such powers under this Agreement
as are delegated to the Agent by the terms hereof, together with all powers
reasonably incidental thereto. The Agent shall have no duties or
responsibilities with respect to this Agreement except as expressly set forth
herein. The Agent, when acting on behalf of the Lenders, may execute any of
its duties hereunder by or through its officers, agents or employees, and
neither the Agent nor such officers, agents or employees shall be liable to the
Lenders or to any of them for any action taken or omitted to be taken in good
faith or be responsible to the Lenders or to any of them for the consequences
of any oversight or error or judgment, or for any loss, unless the same shall
happen through its gross negligence or wilful misconduct. The Agent and its
officers, agents and employees shall in no event be liable to the Lenders or to
any of them for any action taken or omitted to be taken by it pursuant to
instructions received by it from the Required Lenders or in reliance upon the
advice of counsel selected by it. It is understood and agreed that Chemical
Bank shall have the same rights and powers hereunder (including the right to
give such instructions) as the other Lenders and may exercise such rights and
powers, as well as its rights and powers under other agreements and instruments
to which it is or may be party, and engage in other transactions with the
Borrower as though it were not the agent of the Lenders hereunder.
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The Agent shall not be responsible to the Lenders for the due
execution (other than its own due execution), genuineness, validity,
enforceability or effectiveness of this Agreement, the Notes or any other
instruments or documents to which reference is made herein. The Agent may deem
and treat the payee of any Note as the owner thereof for all purposes hereof
until written notice of transfer shall have been filed with it. The Agent
shall, in the absence of knowledge to the contrary, be entitled to rely on any
paper or document believed by it to be genuine and correct and to have been
signed or sent by the proper person or persons.
Each Lender acknowledges that it has, independently and without
reliance upon the Agent or any other Lender and based on such documents and
information as it has deemed appropriate, made its own credit analysis and
decision to enter into this Agreement. Each Lender also acknowledges that it
will, independently and without reliance upon the Agent or any other Lender and
based on such documents and information as it shall deem appropriate at the
time, continue to make its own decisions in taking or not taking action under
or based upon this Agreement, any related agreement or any document furnished
hereunder.
SECTION 8.02. Reimbursement and Indemnification.
Each Lender agrees (a) to reimburse the Agent in the amount of such
Lender's proportionate share (based upon the amount of its Commitments or Notes
outstanding) of any expenses incurred for the benefit of the Lenders, including
counsel fees and compensation of agents paid for services rendered on behalf of
the Lenders, not reimbursed by the Borrower and (b) to indemnify and hold
harmless the Agent and any of its directors, officers, employees or agents, on
demand, in the amount of its proportionate share (based upon the amount of its
Commitments or Notes outstanding), from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind or nature which may be imposed on,
incurred by or asserted against it or any of them in any way relating to or
arising out of this Agreement or any action taken or omitted by it or any of
them under this Agreement, to the extent not reimbursed by the Borrower;
provided, however, that no Lender shall be liable of any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements resulting from the gross negligence or
wilful misconduct of the Agent.
9. MISCELLANEOUS
Section 9.01. Notices.
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Any notice shall be conclusively deemed to have been received and
shall be effective on the day on which delivered (a) in the case of the
Borrower, addressed to MAPCO Inc., 1800 South Baltimore, Tulsa, Oklahoma 74119,
Attention: Senior Vice President and Chief Financial Officer or Treasurer; (b)
in the case of the Agent, addressed to Chemical Bank as set forth below; and
(c) in the case of the Lenders, addressed as set forth on the signature pages
of this Agreement:
Chemical Bank
270 Park Avenue
New York, New York 10017-2070
Attention: Ronald Potter
Copy to:
Chemical Bank
Texas Commerce Tower
2200 Ross Avenue, 3rd Floor
Dallas, Texas 75201
Attention: W. Paschall Tosch
or, if sent by registered mail, on the third business day after the day on
which mailed (except for notices sent to the Borrower pursuant to Article 7
which shall be deemed delivered when sent), addressed to the Borrower or the
Lenders, or in the case of the Agent, when received by the Agent, at their
addresses set forth above.
Section 9.02. Successors and Assigns.
(a) Whenever in this Agreement any of the parties hereto is
referred to, such reference shall be deemed to include the successors and
assigns of such party (provided, however, that the Borrower may not assign its
rights hereunder without the prior written consent of all the Lenders), and all
covenants, promises and agreements by or on behalf of the Borrower which are
contained in this Agreement shall inure to the benefit of the successors and
assigns of the Lenders.
(b) Subject to compliance with applicable law, each of the
Lenders may with the prior written consent of the Borrower, which consent shall
not be unreasonably delayed or withheld, assign to any Eligible Assignee all or
a portion of its rights and obligations under this Agreement (including,
without limitation, all or a portion of its Commitments, and the same portion
of the Loans at the time owing to it and the Notes held by it); provided,
however, that (i) each Assignment shall be of a constant, and not a varying,
percentage of all of the assigning Lender's rights and
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obligations under this Agreement and under and in respect of the Loans and
Commitments which are the subject of such assignment, (ii) the aggregate amount
of the Loans, together with the unused Commitments of the assigning Lender
being assigned pursuant to each such assignment (in each case, determined as of
the date of the Assignment and Acceptance with respect to such assignment)
shall in no event be less than $5,000,000 in the aggregate, and (iii) the
parties to each such assignment shall execute and deliver to the Agent, for its
acceptance and recording in the Register (as defined below), an Assignment and
Acceptance, together with any Note or Notes subject to such assignment and a
processing and recordation fee of $2,500 and (iv) the assignment shall not
result in a material increase in administrative or other costs and expenses of
the Borrower. Upon such execution, delivery, acceptance and recording, from
and after the effective date specified in each Assignment and Acceptance, which
effective date shall be not earlier than five Business Days after the date of
acceptance and recording by the Agent, (x) the assignee thereunder shall be a
party hereto and, to the extent provided in such Assignment and Acceptance,
have the rights and obligations of a Lender hereunder and (y) the assigning
Lender thereunder shall, to the extent provided in such Assignment and
Acceptance, be released from its obligations under this Agreement (and, in the
case of an Assignment and Acceptance covering all or the remaining portion of
the assigning Lender's rights and obligations under this Agreement, such
assigning Lender shall cease to be a party hereto).
(c) By executing and delivering an Assignment and Ac-
ceptance, the assigning Lender thereunder and the assignee thereunder confirm
to and agree with each other and the other parties hereto as follows: (i)
other than the representation and warranty that it is the legal and beneficial
owner of the interest being assigned thereby free and clear of any adverse
claim, the assigning Lender makes no representation or warranty and assumes no
responsibility with respect to any statements, warranties or representations
made in or in connection with this Agreement or the execution, legality,
validity, enforceability, genuineness, sufficiency or value of this Agreement
or any other instrument or document furnished pursuant hereto; (ii) such
assignor makes no representation or warranty and assumes no responsibility with
respect to the financial condition of the Borrower or the performance or
observance by the Borrower of any of their obligations under this Agreement;
(iii) such assignee confirms that it has received a copy of this Agreement,
together with copies of the most recent financial statements delivered pursuant
to Sections 5.03 (or if none of such financial statements shall have then been
delivered, then copies of the financial statements referred to in Section 3.03
hereof) and such other documents and
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information as it has deemed appropriate to make its own credit analysis and
decision to enter into such Assignment and Acceptance; (iv) such assignee will,
independently and without reliance upon the assigning Lender and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own credit decisions in taking or not taking action under this
Agreement; (v) such assignee appoints and authorizes the Agent to take such
action as the Agent on its behalf and to exercise such powers under this
Agreement as are delegated to the Agent by the terms hereof, together with such
powers as are reasonably incidental thereto; and (vi) such assignee agrees that
it will perform in accordance with their terms all of the obligations which by
the terms of this Agreement are required to be performed by it as a Lender.
(d) The Agent shall maintain at its address at which
notices are to be given to it pursuant to Section 9.01 a copy of each
Assignment and Acceptance and a register for the recordation of the names and
addresses of the Lenders and the Commitments of, and principal amount of the
Loans owing to, each Lender from time to time (the "Register"). The entries in
the Register shall be conclusive, in the absence of manifest error, and the
Borrower, the Agent and the Lenders may treat each Person whose name is
recorded in the Register as a Lender hereunder for all purposes of this
Agreement. The Register shall be available for inspection by the Borrower or
any Lender at any reasonable time and from time to time upon reasonable prior
notice and upon the reasonable request of the Borrower, the Agent shall provide
copies of the Register to the Borrower.
(e) Upon its receipt of an Assignment and Acceptance
executed by an assigning Lender and an assignee together with any Notes subject
to such assignment and evidence of the Borrower's written consent to such
assignment, the Agent shall, if such Assignment and Acceptance has been
completed and is in the form of Exhibit E hereto, (i) accept such Assignment
and Acceptance, (ii) record the information contained therein in the Register
and (iii) give prompt written notice thereof to the Borrower. Within five
Business Days after receipt of the notice, the Borrower, at its own expense,
shall execute and deliver to the Lender, in exchange for the surrendered Notes,
new Notes to the order of such assignee in amounts equal to the Commitments
assumed by it pursuant to such Assignment and Acceptance and, new Notes to the
order of the assigning Lender in amounts equal to the Commitments retained by
it hereunder. Such new Notes shall be in an aggregate principal amount equal
to the aggregate principal amount of such retained Commitments, shall be dated
the date of the surrendered Notes and shall otherwise be in substantially the
forms of Exhibits A-1 and A-2 hereto, as the case may be.
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(f) Subject to compliance with applicable law, each of the
Lenders may without the consent of the Borrower or the Agent sell
participations to one or more banks or other entities in all or a portion of
its rights and obligations under this Agreement (including, without limitation,
all or a portion of its Commitments and the Loans owing to it and the Note or
Notes held by it); provided, however, that (i) any such Lender's obligations
under this Agreement shall remain unchanged, (ii) such participant shall not be
granted any voting rights or any right to control the vote of such Lender under
this Agreement, except with respect to proposed changes to interest rates,
amounts of Commitments, maturity of Loans and Fees (as applicable to such
participant), (iii) any such Lender shall remain solely responsible to the
other parties hereto for the performance of such obligations, (iv) the
participating banks or other entities shall be entitled to the cost protection
provisions contained in Sections 2.14 and 2.15 hereof but a participant shall
not be entitled to receive pursuant to such provisions an amount larger than
its share of the amount to which the Lender granting such participation is
actually entitled to receive (without giving effect to such participation) and
(v) the Borrower, the Agent and the other Lenders shall continue to deal solely
and directly with such Lender in connection with such Lender's rights and
obligations under this Agreement.
(g) The Lenders may, in connection with any assignment or
participation or proposed assignment or participation pursuant to this Section,
disclose to the assignee or participant or proposed assignee or participant,
any information relating to the Borrower or any Subsidiary furnished to the
Agent by or on behalf of the Borrower; provided that prior to any such
disclosure, each such assignee or participant or proposed assignee or
participant shall agree to preserve the confidentiality of any confidential
information relating to the Borrower received from such Lender.
SECTION 9.03. Survival of Credit Agreement.
All covenants, agreements, representations and warranties
made herein and in the certificates delivered pursuant hereto shall survive the
making by the Lenders of the Loans herein contemplated and the execution and
delivery to the Lenders of the Notes evidencing such Loans and shall continue
in full force and effect so long as any Note is outstanding and unpaid.
Whenever in this Agreement any of the parties hereto is referred to, such
reference shall be deemed to include the successors and assigns of such party,
and all covenants, promises and agreements by or on behalf of the Borrower or
any Subsidiary that are contained in this Agreement shall inure to the benefit
of the successors and assigns of the Lenders.
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SECTION 9.04. Expenses of Lenders.
The Borrower will pay all reasonable out-of-pocket expenses
incurred by the Agent on behalf of itself and the Lenders in connection with
the preparation of this Agreement and the Notes (whether or not the
transactions hereby or thereby contemplated shall be consummated), any
modification, waiver or amendment of this Agreement or the Notes, the making of
the Loans hereunder and, after an Event of Default has occurred, all reasonable
expenses (including reasonable fees and disbursements of counsel) incurred by
the Agent or any Lender in connection with the enforcement and protection of
the rights of the Lenders in connection with this Agreement or with the Loans
made or the Notes issued hereunder, and with respect to any action which may be
instituted by any person against any one or more of the Lenders or the Agent in
respect of any of the foregoing, or as a result of any transaction, action or
nonaction arising from the foregoing, including but not limited to the
reasonable fees and disbursements of Lord Day & Lord, Barrett Smith, special
counsel to the Lenders with respect to the preparation of this Agreement and
the Notes and any modification, waiver or amendment thereto.
SECTION 9.05. APPLICABLE LAW.
THIS AGREEMENT AND THE NOTES SHALL BE CONSTRUED IN
ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.
SECTION 9.06. Modification of Credit Agreement.
No modification or waiver of any provision of this Agreement
or of the Notes, nor any consent to any departure by the Borrower or any
Subsidiary therefrom, shall in any event be effective unless the same shall be
in writing and signed by the Required Lenders (provided that no such
modification, waiver or consent (a) relating to an increase in the Commitments
or a reduction or forgiveness in the Facility Fee or in the interest rate on,
the principal amount of, the Notes or other amounts due hereunder, (b)
extending the terms of payment of the Notes or (c) reducing the percentages or
number of the Lenders set forth herein as necessary for making modifications,
waivers or consents, shall be effective unless consented to by all the
Lenders), and then such waiver or consent shall be effective only in the
specific instance and for the purpose for which given. No notice to or demand
on the Borrower or any Subsidiary thereof in any case shall entitle the
Borrower or such Subsidiary to any other or further notice or demand in the
same, similar or other circumstances. Each holder of any Note outstanding
shall be bound by any modification, waiver or consent authorized by this
Section 9.06, whether or not such Note shall have been marked to indicate such
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consent.
SECTION 9.07. Waiver of Rights by Lenders.
Neither any failure nor any delay on the part of the Lenders
in exercising any right, power or privilege hereunder or under the Notes shall
operate as a waiver thereof, nor shall a single or partial exercise thereof
preclude any other or further exercise or the exercise of any other right,
power or privilege. The remedies provided for herein are cumulative and are
not exclusive of any other remedies that may be provided for by law.
SECTION 9.08. Extension of Maturity.
Except as otherwise provided in the definition of the term
Interest Period in Article 1, should the principal or any installment of the
principal of, or interest on, any Loan or any payment of the Facility Fee
become due and payable on other than a Business Day, the maturity thereof shall
be extended to the next succeeding Business Day and, in the case of principal,
or an installment of principal, interest shall be payable thereon at the rate
per annum herein specified during such extension.
SECTION 9.09. Severability.
In case any one or more of the provisions contained in this
Agreement or in the Notes should be invalid, illegal or unenforceable in any
respect, the validity, legality and enforceability of the remaining provisions
contained herein and therein shall not in any way be affected or impaired
thereby.
SECTION 9.10. Counterparts.
This Agreement may be executed in two or more counterparts,
each of which shall constitute an original, out all of which, when taken
together, shall constitute but one instrument.
SECTION 9.11 Existing Credit Agreement.
From and after the Effective Date, the Existing Credit
Agreement and the Commitments thereunder shall terminate and cease to be of any
further effect. The Borrower shall, not later than the Effective Date, repay
in full all outstanding loans, and all accrued interest, fees and other amounts
under the Existing Credit Agreement.
SECTION 9.12 Confidentiality.
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The Agent and each Lender agrees to keep confidential any
written or oral information (a) provided by or on behalf of the Borrower or any
of its Subsidiaries pursuant to or in connection with this Agreement or (b)
obtained by such Lender based on a review of the books and records of the
Borrower or any of its Subsidiaries; provided that nothing herein shall prevent
the Agent or any Lender from disclosing any such information (i) to the Agent
or any other Lender, (ii) to any Assignee which agrees to comply with the
provisions of this subsection, (iii) to its employees, directors, agents,
attorneys, accountants and other professional advisors, (iv) upon the request
or demand of any governmental authority having jurisdiction over the Agent or
such Lender or to the extent required in response to any order of any court or
other governmental authority or as shall otherwise be required pursuant to any
requirement of law, provided that the Agent or such Lender shall notify the
Borrower of any disclosure pursuant to this clause as far in advance as is
reasonably practicable under such circumstances, (v) which has been publicly
disclosed other than in breach of this Agreement, (vi) in connection with the
exercise of any remedy hereunder or (vii) to the extent required by applicable
laws and regulations or by legal process, or requested by any bank regulatory
authority or similar agency.
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IN WITNESS WHEREOF, the Borrower, the Agent and the Lenders
have caused this Agreement to be duly executed by their duly authorized
officers, all as of the day and year first above written.
(Corporate Seal) MAPCO INC.
Attest:
By /s/ Frank S. Dickerson, III
Frank S. Dickerson, III
/s/ James N. Cundiff Senior Vice President,
James N. Cundiff, Chief Financial Officer
Assistant Secretary and Treasurer
CHEMICAL BANK, for itself and
as Agent
By /s/ R. Potter
Title
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION
By /s/ John Robinson
Title
THE FIRST NATIONAL BANK
OF CHICAGO
By /s/ Dixon Schultz
Title
MORGAN GUARANTY TRUST COMPANY
By /s/ Vernon M.Ford, Jr.
Title
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THE BANK OF NOVA SCOTIA
By /s/ A. S. Norsworthy
Title
NATIONAL WESTMINSTER BANK Plc
By /s/ David L. Smith
Title
ABN AMRO BANK N.V.
By /s/ Ronald Mahle
Title
By /s/ David S. Orr
Title
BANK OF OKLAHOMA, N.A.
By /s/ Jane P. Faulkenberry
Title
CREDIT LYONNAIS CAYMAN ISLAND
BRANCH
By /s/ Xavier Ratouis
Title
By__________________________
Title
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THE FUJI BANK, LIMITED
By /s/ Soichi Yoshida
Title
THE SUMITOMO BANK, LIMITED
By /s/ Tatsuo Ueda
Title
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EXHIBIT A-1
FORM OF REVOLVING CREDIT NOTE
$_________ New York, New York
April 29, 1994
FOR VALUE RECEIVED, the undersigned, MAPCO INC., a Delaware
corporation (the "Borrower"), hereby promises to pay to the order of
(the "Lender") at the office of Chemical Bank (the "Agent"), 270 Park Avenue,
New York, New York 10017-2070, (i) on the last day of each Interest Period as
defined in the Competitive Advance and Revolving Credit Facility Agreement (the
"Agreement") dated as of April 29, 1994, among the Borrower, the lenders named
therein and the Agent, the aggregate unpaid principal amount of all Revolving
Credit Loans by the Borrower from the Lender pursuant to Section 2.03 of the
Agreement to which such Interest Period applies and (ii) on March 31, 2001, the
lesser of the principal sum of Dollars ($ )
or the aggregate unpaid principal amount of all Revolving Credit Loans by the
Borrower from the Lender pursuant to Sections 2.01 and 2.03 of the Agreement,
in lawful money of the United States of America in immediately available funds,
and to pay interest from the date hereof on the principal amount hereof from
time to time outstanding, in like funds, at said office, at a rate or rates per
annum and payable on the dates determined pursuant to the Agreement.
The Borrower promises to pay interest, on demand, on any overdue
principal and, to the extent permitted by law, overdue interest from their due
dates at a rate or rates determined as set forth in the Agreement.
The Borrower hereby waives diligence, presentment, demand, protest and
notice of any kind whatsoever. The nonexercise by the holder of any of its
rights hereunder in any particular instance shall not constitute a waiver
thereof in that or any subsequent instance.
All borrowings evidenced by this Note and all payments and prepayments
of the principal hereof and interest hereon and the respective dates thereof
shall be endorsed by the holder hereof on the schedule attached hereto and made
a part hereof, or on a continuation thereof which shall be attached hereto and
made a part hereof, or otherwise recorded by such holder in its internal
records; provided, however,
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that the failure of the holder hereof to make such a notation of any error in
such a notation shall not affect the obligations of the Borrower under this
Note.
This Note is one of the Revolving Credit Notes referred to in the
Agreement, which, among other things, contains provisions for the acceleration
of the maturity hereof upon the happening of certain events, for optional and
mandatory prepayment of the principal hereof prior to the maturity hereof and
for the amendment or waiver of certain provisions of the Agreement, all upon
the terms and conditions therein specified. This Note shall be construed in
accordance with and governed by the laws of the State of New York and any
applicable laws of the United States of America.
MAPCO INC.
By:____________________________
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Loans and Payments
<TABLE>
<CAPTION>
Payments Unpaid Name of
Amount -------------------------- Principal Person
and Type Maturity Balance Making
Date of Loan Date Principal Interest of Note Notation
- - ---- ------- ---- --------- -------- ------- --------
<S> <C> <C> <C> <C> <C> <C>
</TABLE>
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EXHIBIT A-2
FORM OF COMPETITIVE NOTE
$300,000,000 New York, New York
April 29, 1994
FOR VALUE RECEIVED, the undersigned, MAPCO INC., a Delaware
corporation (the "Borrower"), hereby promises to pay to the order of
(the "Lender") at the office of Chemical Bank (the "Agent"), 270 Park Avenue,
New York, New York 10017-2070, (i) on the last day of each Interest Period as
defined in the Competitive Advance and Revolving Credit Facility Agreement (the
"Agreement") dated as of April 29, 1994, among the Borrower, the lenders named
therein and the Agent, the aggregate unpaid principal amount of all Competitive
Loans by the Borrower from the Lender pursuant to Section 2.02 of the Agreement
to which such Interest Period applies and (ii) on March 31, 2001, the lesser of
the principal sum of Three Hundred Million Dollars ($300,000,000) or the
aggregate unpaid principal amount of all Competitive Loans by the Borrower from
the Lender pursuant to Section 2.02 of the Agreement, in lawful money of the
United States of America in immediately available funds, and to pay interest
from the date hereof on the principal amount hereof from time to time
outstanding, in like funds, at said office, at a rate or rates per annum and
payable on the dates determined pursuant to the Agreement.
The Borrower promises to pay interest, on demand, on any overdue
principal and, to the extent permitted by law, overdue interest from their due
dates at a rate or rates determined as set forth in the Agreement.
The Borrower hereby waives diligence, presentment, demand, protest and
notice of any kind whatsoever. The nonexercise by the holder of any of its
rights hereunder in any particular instance shall not constitute a waiver
thereof in that or any subsequent instance.
All borrowings evidenced by this Note and all payments of the
principal hereof and interest hereon and the respective dates thereof shall be
endorsed by the holder hereof on the schedule attached hereto and made a part
hereof, or on a continuation thereof which shall be attached hereto and made a
part hereof, or otherwise recorded by such holder in its internal records;
provided, however, that the failure of the holder hereof to make such a
notation or any
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error in such a notation shall not affect the obligations of the Borrower under
this Note.
This Note is one of the Competitive Notes referred to in the
Agreement, which, among other things, contains provisions for the acceleration
of the maturity hereof upon the happening of certain events, for prepayment of
the principal hereof prior to the maturity hereof and for the amendment or
waiver of certain provisions of the Agreement, all upon the terms and
conditions therein specified. This Note shall be construed in accordance with
and governed by the laws of the State of New York and any applicable laws of
the United States of America.
MAPCO INC.
By:____________________________
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Loans and Payments
<TABLE>
<CAPTION>
Payments Unpaid Name of
Amount -------------------------- Principal Person
and Type Maturity Balance Making
Date of Loan Date Principal Interest of Note Notation
- - ---- ------- ---- --------- -------- ------- --------
<S> <C> <C> <C> <C> <C> <C>
</TABLE>
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<PAGE> 72
EXHIBIT B-1
FORM OF COMPETITIVE BID REQUEST
(Date)
Chemical Bank, as Agent for the
Lenders parties to the Credit Agreement
referred to below
270 Park Avenue
New York, New York 10017-2070
Attention of Stephen Feeney, Vice President
Dear Sirs:
The undersigned, MAPCO INC. (the "Borrower"), refers to the
Competitive Advance and Revolving Credit Facility Agreement, dated as of April
29, 1994 (the "Credit Agreement"), among the Borrower, the Lenders named
therein and Chemical Bank, as Agent for the Lenders. Capitalized terms used
herein and not defined shall have the meanings assigned to such terms in the
Credit Agreement. The Borrower hereby gives you notice pursuant to Section
2.02 of the Credit Agreement that it requests a Competitive Borrowing under the
Credit Agreement, and in that connection sets forth below the terms of which
such Competitive Borrowing is requested to be made:
I. Date of Competitive Borrowing
--------------
II. Aggregate Principal Amount of
Competitive Borrowing(1)
--------------
III. Interest rate basis(2)
--------------
IV. Interest Period(3) and the last
day of such Interest Period
--------------
Upon acceptance of any or all of the Advances offered by Lenders in
response to this request, the Borrower shall be deemed to affirm as of such
date the representations and warranties made in the Credit Agreement to the
extent specified in Article 3 thereof.
Very truly yours,
MAPCO INC.
By___________________
____________________
(1) Not less than $5,000,000 or greater than the aggregate of the
Commitments and in integral multiples of $1,000,000.
(2) Eurodollar Loan or Fixed Rate Loan.
(3) Which shall end not later than the Maturity Date.
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EXHIBIT B-2
FORM OF NOTICE OF REVOLVING CREDIT BORROWING
(pursuant to Section 2.03)
(DATE)
To Chemical Bank as Agent for
the Lenders parties to the Credit
Agreement referred to below
Gentlemen:
The undersigned, MAPCO INC. (the "Borrower"), refers to the
Competitive Advance and Revolving Credit Facility Agreement, dated as of April
29, 1994 (the "Credit Agreement", the terms defined therein being used herein
as therein defined), among the Borrower, certain Lenders parties thereto and
Chemical Bank, as Agent for said Lenders, and hereby gives you notice pursuant
to Section 2.03 of the Credit Agreement that the undersigned hereby confirms
its request for a Borrowing under Section 2.03 of the Credit Agreement, and in
that connection sets forth below the information relating to such Borrowing as
required by Section 2.03 of the Credit Agreement:
1. The requested Business Day of the Borrowing is __________ __,
____;
2. The type of advances comprising the Borrowing is (Eurodollar
Loans) (Alternate Base Rate Loans);
3. The aggregate amount of the Borrowing is $______;
4. The Interest Period for each Loan made as part of the Borrowing
is (____ months) (____ days); and
5. Each Loan made as part of the Borrowing is to be made available
to us by depositing the amount thereof in the same day funds
into our account (no. __________) at Chemical Bank.
The Borrower hereby affirms as of the date of the Borrowing the
representations and warranties made in the Credit Agreement to the extent
specified in Article 3 thereof.
Very truly yours,
MAPCO INC.
By___________________
Title:
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<PAGE> 74
EXHIBIT C
FORM OF NOTICE OF COMPETITIVE BID REQUEST
(DATE)
(NAME OF LENDER)
(ADDRESS)
Attention:
Dear Sirs:
Reference is made to the Competitive Advance and Revolving Credit
Facility Agreement, dated as of April 29, 1994 (the "Credit Agreement"), among
MAPCO Inc. ("Borrower"), the Lenders named therein and Chemical Bank, as Agent
for the Lenders. Capitalized terms used herein and not defined shall have the
meanings assigned to such terms in the Credit Agreement. The Borrower made a
Competitive Bid Request on __________, ____ pursuant to Section 2.02(b) of the
Credit Agreement, and in that connection you are invited to submit a
Competitive Bid by (Date) (Time(1)). Your Competitive Bid must comply with
Section 2.02(c) of the Credit Agreement and the terms set forth below in which
the Competitive Bid Request was made:
I. Date of Competitive Borrowing
--------------
II. Aggregate principal amount of
Competitive Borrowing
--------------
III. Interest Rate basis
--------------
IV. Interest Period and the last
day of such Interest Period
--------------
Very truly yours,
CHEMICAL BANK, as Agent for
the Lenders
By___________________
Title:
____________________
(1) The Competitive Bid must be received by the Agent (i) in the case
of Eurodollar Loans, not later than 9:30 a.m., New York City time,
three Business Days before a proposed Competitive Borrowing
and (ii) in the case of Fixed Rate Loans, not later than 9:30 a.m.,
New York City time, on the day of a proposed Competitive
Borrowing.
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EXHIBIT D
FORM OF COMPETITIVE BID
(Date)
Chemical Bank, as Agent for the
Lenders parties to the Credit
Agreement referred to below
270 Park Avenue
New York, New York 10017-2070
Attention of Stephen Feeney, Vice President
Dear Sirs:
The undersigned, (Name of Lender), refers to the Competitive Advance
and Revolving Credit Facility Agreement, dated as of April 29, 1994 (the
"Credit Agreement"), among MAPCO Inc. ("Borrower"), the Lenders named therein
and Chemical Bank, as Agent for the Lenders. Capitalized terms used herein and
not defined shall have the meanings assigned to such terms in the Credit
Agreement. The undersigned hereby makes a Competitive Bid pursuant to Section
2.02(b) of the Credit Agreement, in response to the Competitive Bid Request
made by the Borrower on _________, ____, and in that connection sets forth
below the terms on which such Competitive Bid is made:
(A) Maximum Principal Amount(1)
--------------
(B) Competitive Bid Rate(2)
--------------
The undersigned hereby confirms that it is prepared to extend credit
to the Borrower upon acceptance by the Borrower of this bid in accordance with
Section 2.02(d) of the Credit Agreement.
Very truly yours,
(NAME OF LENDER)
By___________________
Title:
____________________
(1) Not less than $5,000,000 and in integral multiples of $1,000,000.
(2) i.e., LIBO Rate + or - ____% (Margins must include reserves and
other applicable costs) in the case of a Eurodollar Loan or ____%
in the case of a Fixed Rate Loan.
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<PAGE> 76
EXHIBIT E
FORM OF ASSIGNMENT AND ACCEPTANCE
Reference is made to the Competitive Advance and Revolving Credit
Facility Agreement dated as of April 29, 1994, as amended from time to time
(the "Credit Agreement"), among MAPCO Inc., a Delaware corporation, the Lenders
referred to therein (the "Lenders") and Chemical Bank, as agent for the Lenders
(in such capacity, the "Agent"). Terms defined in the Credit Agreement are
used herein with the same meanings. This Assignment and Acceptance, between
the Assignor (as set forth on Schedule I hereto and made a part hereof) and the
Assignee (as set forth on Schedule I hereto and made a part hereof) is dated as
of the Effective Date (as set forth on Schedule I hereto and made a part
hereof).
1. The Assignor hereby irrevocably sells and assigns to the
Assignee without recourse to the Assignor, and the Assignee hereby irrevocably
purchases and assumes from the Assignor without recourse to the Assignor, as of
the Effective Date (as defined on Schedule I hereto), an undivided interest
(the "Assigned Interest") in and to all the Assignor's rights and obligations
under the Credit Agreement respecting those credit facilities contained in the
Credit Agreement as are set forth on Schedule I (the "Assigned Facilities"), in
a principal amount for each Assigned Facility as set forth on Schedule I.
2. The Assignor makes no representation or warranty and assumes
no responsibility with respect to any statements, warranties or representations
made in or in connection with the Credit Agreement or the execution, legality,
validity, enforceability, genuineness, sufficiency or value of the Credit
Agreement or any other instrument or document furnished pursuant thereto, other
than that it is the legal and beneficial owner of the interest being assigned
by it hereunder and that such interest is free and clear of any adverse claim;
and (ii) makes no representation or warranty and assumes no responsibility with
respect to the financial condition of the Borrower or any of its Subsidiaries
or the performance or observance by the Borrower or any of its Subsidiaries of
any of their respective obligations under the Credit Agreement or any other
instrument or document furnished pursuant thereto and (iii) attaches the
Note(s) held by it and requests that the Agent exchange such Note(s) for a new
Note or Notes payable to the Assignor (if the Assignor has retained any
interest in the Assigned Facility) and a new Note or Notes payable to the
Assignee in the respective amounts which reflect the assignment being made
hereby (and after giving effect to any
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<PAGE> 77
other assignments which have become effective on the Effective Date).
3. The Assignee (i) represents and warrants that it is legally
authorized to enter into this Assignment and Acceptance; (ii) confirms that it
has received a copy of the Credit Agreement, together with copies of the
financial statements referred to in Section 3.03 or, if later, the most recent
financial statements delivered pursuant to Section 5.03 thereof and such other
documents and information as it has deemed appropriate to make its own credit
analysis and decision to enter into this Assignment and Acceptance; (iii)
agrees that it will, independently and without reliance upon the Assignor, the
Agent or any other person which has become a Lender and based on such documents
and information as it shall deem appropriate at the time, continue to make its
own credit decisions in taking or not taking action under the Credit Agreement;
(iv) appoints and authorizes the Agent to take such action as agent on its
behalf and to exercise such powers under the Credit Agreement as are delegated
to the Agent by the terms hereof, together with such powers as are reasonably
incidental thereto; (v) agrees that it will be bound by the provisions of the
Credit Agreement and will perform in accordance with their terms all the
obligations which by the terms of the Credit Agreement are required to be
performed by it as a Lender; (vi) if the Assignee is organized under the laws
of a jurisdiction outside the United States, attaches the forms prescribed by
the Internal Revenue Service exemption from United States withholding taxes
with respect to all payments to be made to the Assignee under the Credit
Agreement, or such other documents as are necessary to indicate that all such
payments are subject to such tax at a rate reduced by an applicable tax treaty;
and (vii) has supplied the information requested on the administrative
questionnaire attached hereto as Exhibit A.
4. Following the execution of this Assignment and Acceptance, it
will be delivered to the Agent and the Borrower for acceptance and recording by
the Agent pursuant to Section 9.02 of the Credit Agreement, effective as of the
Effective Date (which shall not, unless otherwise agreed to by the Agent, be
less than five Business Days after receipt by the Agent of the executed
Assignment and Acceptance).
5. Upon such acceptance and recording, from and after the
Effective Date, the Agent shall make all payments in respect of the Assigned
Interest (including payments of principal, interest, fees and other amounts) to
the Assignee whether such amounts have accrued prior to the Effective Date or
accrue subsequent to the Effective Date. The Assignor and Assignee shall make
all appropriate adjustments in payments for periods prior to the Effective Date
by the Agent or with
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<PAGE> 78
respect to the making of this assignment directly between themselves.
6. Upon such recording, from and after the Effective Date, (i)
the Assignee shall be a party to the Credit Agreement and, to the extent
provided in this Assignment and Acceptance, have the rights and obligations of
a Lender thereunder and (ii) the Assignor shall, to the extent provided in this
Assignment and Acceptance, relinquish its rights and be released from its
obligations under the Credit Agreement.
7. This Assignment and Acceptance shall be governed by and
construed in accordance with the laws of the State of New York.
IN WITNESS WHEREOF, the parties hereto have caused this Assignment and
Acceptance to be executed by their respective duly authorized officers on
Schedule I hereto.
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<PAGE> 79
Schedule I to Assignment and Acceptance Respecting
Competitive Advance and Revolving Credit Facility
Agreement dated as of April 29, 1994, as amended
from time to time, among MAPCO Inc., the Lenders referred
to therein and Chemical Bank, as agent for the Lenders
Legal Name of Assignor:
Legal Name of Assignee:
Effective Date of Assignment:
Percentage Assigned (to at
least fifteen decimals)
(Shown as a percentage of
Principal aggregate principal amount
Amount Assigned of all Lenders
--------------- --------------------------
____%
Accepted:
- - --------
CHEMICAL BANK, as Agent __________________, as Assignor
By:_________________________ By:___________________________
Name: Name:
Title: Title:
MAPCO INC. ___________________, as Assignee
By:_________________________ By:___________________________
Name: Name:
Title: Title:
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<PAGE> 1
EXHIBIT 11
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<PAGE> 2
EXHIBIT 11
MAPCO INC. AND CONSOLIDATED SUBSIDIARIES
STATEMENT RE: COMPUTATION OF PER SHARE EARNINGS
(Dollars and Shares in Millions
except per share amounts)
<TABLE>
<CAPTION>
Three Months Ended March 31,
PRIMARY EARNINGS PER COMMON SHARE 1994 1993
------------ ------------
<S> <C> <C>
Computation for Consolidated Statements of Income
- - -------------------------------------------------
Net income (a) $ 41.4 $ 33.9
============ ============
Weighted average common shares outstanding 30.0 30.0
Common stock equivalents (stock options) - -
------------ ------------
Average common shares outstanding (a) 30.0 30.0
============ ============
Primary earnings per common share (a) (c) $ 1.38 $ 1.13
============ ============
Additional Primary Computations
- - -------------------------------
Net income (a) $ 41.4 $ 33.9
============ ============
Average common shares outstanding (a) 30.0 30.0
Dilutive effect of outstanding options .2 .2
------------ ------------
Average common shares outstanding, as adjusted 30.2 30.2
============ ============
Primary earnings per common share as adjusted (b) $ 1.37 $ 1.12
============ ============
FULLY DILUTED EARNINGS PER COMMON SHARE
Additional Fully Diluted Computation
- - ------------------------------------
Net income (a) $ 41.4 $ 33.9
============ ============
Average common shares outstanding (a) 30.0 30.0
Dilutive effect of outstanding options .2 .2
------------ ------------
Assumed common shares outstanding 30.2 30.2
============ ============
Fully diluted earnings per common share (b) $ 1.37 $ 1.12
============ ============
</TABLE>
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<PAGE> 3
EXHIBIT 11
a) These figures agree with the related amounts in the Consolidated
Statements of Income.
b) This calculation is submitted in accordance with Securities Exchange
Act of 1934 Release No. 9083, although not required by footnote 2 to
paragraph 14 of APB Opinion No. 15 because it results in dilution of
less than 3%.
c) In 1994 and 1993, stock options are not included in the earnings per
share computation included in MAPCO's Condensed Consolidated
Statements of Income because the dilutive effect is less than 3%.
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<PAGE> 1
EXHIBIT 12
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<PAGE> 2
EXHIBIT 12
MAPCO INC. AND CONSOLIDATED SUBSIDIARIES
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
(Dollars in millions)
<TABLE>
<CAPTION>
Three Months Ended
March 31, 1994 1993 1992 1991 1990 1989
------------------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
Earnings as defined:
Income before provision for income taxes ........ $ 63.4 $202.9 $144.6 $182.6 $185.7 $172.2
Fixed charges.................................... 13.8 55.3 60.1 63.9 67.3 45.7
Capitalized interest included in fixed charges... - (2.8) (2.0) (1.2) (1.1) (.8)
Amortization of capitalized interest............. .9 3.5 3.5 3.3 3.6 3.1
Minority interest in earnings of subsidiary...... (.3) (2.2)
Distributed income of affiliate accounted for by
the equity method.............................. 4.5 2.1
------ ------ ------ ------ ------ ------
Total................................. $ 77.8 $256.7 $206.2 $248.6 $260.0 $222.3
====== ====== ====== ====== ====== ======
Fixed charges as defined:
Interest and debt expense (includes amortization
of debt expense and discount).................. $ 12.4 $ 46.9 $ 51.7 $ 55.5 $ 59.3 $ 37.5
Capitalized interest............................. - 2.8 2.0 1.2 1.1 .8
Interest expense on guaranteed debt of affiliate
accounted for by the equity method............. .6 2.1
Portion of rentals representative of the interest
factor......................................... 1.4 5.6 6.4 7.2 6.3 5.3
------ ------ ------ ------ ------ ------
Total................................. $ 13.8 $ 55.3 $ 60.1 $ 63.9 $ 67.3 $ 45.7
====== ====== ====== ====== ====== ======
Ratio of earnings to fixed charges................. 5.6 4.6 3.4 3.9 3.9 4.9
====== ====== ====== ====== ====== ======
</TABLE>
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