<PAGE>

                                                                     Exhibit 4.5

                                                           EXECUTION COUNTERPART

________________________________________________________________________________






                               CREDIT AGREEMENT

                                  dated as of

                                 July 20, 2001

                                     among

                          LYONDELL-CITGO REFINING LP,
                        a Delaware Limited Partnership

                           The Lenders from time to
                             time parties hereto,

                                      and

                          CREDIT SUISSE FIRST BOSTON,
                            as Administrative Agent

                                 $450,000,000

                                as arranged by

        CREDIT SUISSE FIRST BOSTON and BANC OF AMERICA SECURITIES LLC,
                 as Lead Arrangers, and as Joint Book Runners

                                      and

              SUNTRUST BANK, CREDIT LYONNAIS NEW YORK BRANCH and
    THE BANK OF NOVA SCOTIA as Co-Documentation Agents and as Co-Arrangers

                                      and

                   FLEET NATIONAL BANK, MIZUHO FINANCIAL GROUP
               and THE ROYAL BANK OF SCOTLAND plc as Co-Arrangers





________________________________________________________________________________
<PAGE>

                               TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                            Page
                                                                                            ----
<S>                                                                                         <C>
ARTICLE I DEFINITIONS....................................................................     1
     1.01   Certain Defined Terms........................................................     1
     1.02   Other Definitional Provisions................................................    21
     1.03   Captions.....................................................................    21

ARTICLE II CREDIT FACILITY...............................................................    22
     2.01   The Facility.................................................................    22
     2.02   Making the Loans.............................................................    22
     2.03   Reduction of Commitments.....................................................    23
     2.04   Fees.........................................................................    23
     2.05   Interest; Determination and Protection; Illegality...........................    24
     2.06   Interest Period Conversion...................................................    26

ARTICLE III PAYMENTS, PREPAYMENTS, INCREASED COSTS AND TAXES.............................    27
     3.01   Payments and Computations....................................................    27
     3.02   Mandatory Prepayments........................................................    28
     3.03   Voluntary Prepayments........................................................    29
     3.04   Funding Losses Relating to Eurodollar Rate Loans.............................    29
     3.05   Increased Costs; Capital Adequacy............................................    30
     3.06   Taxes........................................................................    31
     3.07   Substitution of Lender.......................................................    33

ARTICLE IV CONDITIONS TO LOANS...........................................................    34
     4.01   Conditions to Loans..........................................................    34
     4.02   Further Conditions to Borrowing..............................................    36
     4.03   Deemed Fulfilled Conditions..................................................    36

ARTICLE V REPRESENTATIONS AND WARRANTIES OF THE BORROWER.................................    37
     5.01   Organization; Power; Qualification...........................................    37
     5.02   Authorization; Enforceability; Absence of Conflicts; Required Consents.......    37
     5.03   Compliance With Laws.........................................................    38
     5.04   No Defaults..................................................................    38
     5.05   Litigation...................................................................    38
     5.06   Financial Statements; Disclosure.............................................    39
     5.07   Taxes........................................................................    40
     5.08   Government Regulation........................................................    40
     5.09   Employee Benefit Plans.......................................................    40
     5.10   Title to Property; Leases....................................................    41
     5.11   Labor Matters................................................................    42
     5.12   Intellectual Property........................................................    42
     5.13   Use of Proceeds..............................................................    42
</TABLE>

                                      -i-
<PAGE>

<TABLE>
<S>                                                                                        <C>
ARTICLE VI FINANCIAL STATEMENTS AND INFORMATION.........................................   42
     6.01   Reporting Requirements......................................................   42
     6.02   Books and Records...........................................................   45
     6.03   Visits, Inspections and Discussions.........................................   45

ARTICLE VII CERTAIN COVENANTS...........................................................   45
     7.01   Maintenance of Existence and Properties.....................................   46
     7.02   Compliance With Governmental Requirements...................................   46
     7.03   Payment of Taxes and Claims.................................................   47
     7.04   Insurance; Casualty.........................................................   47
     7.05   Liens.......................................................................   47
     7.06   Restricted Payments.........................................................   48
     7.07   Limitations on Mergers, Etc.................................................   48
     7.08   Disposition of Assets.......................................................   49
     7.09   Indebtedness................................................................   49
     7.10   Transactions With Affiliates................................................   50
     7.11   Limitation on Restrictive Covenants.........................................   50
     7.12   Issuance or Disposition of Capital Securities...............................   50
     7.13   Investments.................................................................   50
     7.14   Business....................................................................   51
     7.15   Fiscal Year.................................................................   51
     7.16   Financial Covenants.........................................................   51
     7.17   Certain Material Agreements.................................................   52
     7.18   Use of Proceeds.............................................................   53

ARTICLE VIII DEFAULT....................................................................   53
     8.01   Events of Default...........................................................   53
     8.02   Remedies....................................................................   58
     8.03   Application of Proceeds.....................................................   59
     8.04   Set-Off; Suspension of Payment and Performance..............................   59
     8.05   Sharing of Recoveries.......................................................   59

ARTICLE IX THE AGENT....................................................................   60
     9.01   Appointment and Powers......................................................   60
     9.02   Limitation on Agent's Liability.............................................   60
     9.03   Defaults....................................................................   61
     9.04   Rights as a Lender..........................................................   61
     9.05   Indemnification.............................................................   61
     9.06   Non-Reliance on Agent and Other Lenders.....................................   61
     9.07   Resignation of the Agent....................................................   62
     9.08   CERTAIN INTENTIONS..........................................................   62

ARTICLE X MISCELLANEOUS.................................................................   62
    10.01   Notices and Deliveries......................................................   62
    10.02   Expenses; Indemnification...................................................   64
    10.03   Rights Cumulative...........................................................   66
    10.04   Confidentiality.............................................................   66
</TABLE>

                                     -ii-
<PAGE>

<TABLE>
<S>                                                                                        <C>
    10.05   Amendments; Waivers.........................................................   68
    10.06   Assignments and Participations..............................................   69
    10.07   GOVERNING LAW...............................................................   71
    10.08   JUDICIAL PROCEEDINGS; WAIVER OF JURY TRIAL..................................   71
    10.09   Severability of Provisions..................................................   73
    10.10   Counterparts; Integration; Binding Effect...................................   73
    10.11   Entire Agreement............................................................   73
    10.12   Successors and Assigns......................................................   73
</TABLE>

                                     -iii-
<PAGE>

<TABLE>
<CAPTION>
ANNEXES, SCHEDULES AND EXHIBITS
<S>                      <C>
Annex A             -    Lender Information

Schedule A          -    ERISA Assumptions

Exhibit A           -    Form of Note

Exhibit 1.01-A      -    Form of Qualified Subordinated Debt

Exhibit 2.02        -    Form of Notice of Borrowing

Exhibit 2.06        -    Form of Notice of Conversion

Exhibit 4.01(b)-1   -    Form of Secretary's Certificate

Exhibit 4.01(f)-1   -    Form of Opinion of New York Counsel to Borrower

Exhibit 4.01(f)-2   -    Form of Opinion of Texas Corporate Counsel to Borrower

Exhibit 4.01(f)-3   -    Form of Opinion of Outside Texas Counsel to the Borrowr

Exhibit 4.01(g)     -    Form of Officer's Certificate

Exhibit 6.01(a)     -    Form of Quarterly Compliance Certificate

Exhibit 6.01(b)     -    Form of Annual Compliance Certificate

Exhibit 10.04(c)-1  -    Form of Assignee Confidentiality Agreement

Exhibit 10.04(c)-2  -    Form of Participant Confidentiality Agreement

Exhibit 10.04(c)-3  -    Form of Outside Representative Confidentiality Agreement

Exhibit 10.06(a)    -    Form of Assignment Agreement
</TABLE>

                                     -iv-
<PAGE>

                                CREDIT AGREEMENT

                           dated as of July 20, 2001

LYONDELL-CITGO REFINING LP, a Delaware limited partnership, the LENDERS listed
on the signature pages hereof and any Lender hereafter becoming a party hereto
in accordance with the provisions hereof and CREDIT SUISSE FIRST BOSTON, as
Administrative Agent, agree as follows:

                                   ARTICLE I

                                  DEFINITIONS

1.01 Certain Defined Terms.  As used in this Credit Agreement, the following
     ---------------------
     terms have the meanings assigned to them below:

     "Accumulated Funding Deficiency" has the meaning specified in Section 302
     of ERISA.

     "Adjusted Base Rate" means, at any time, the sum of the Base Rate plus the
     Applicable Margin for Base Rate Loans, in each case, as in effect at such
     time.

     "Adjusted Eurodollar Rate" means, for any day in an Interest Period for any
     Eurodollar Rate Loan, an interest rate per annum equal to the sum of (a)
     the quotient, expressed as a percentage, resulting from the division of (i)
     the Eurodollar Rate for such Interest Period by (ii) the percentage equal
     to 100% minus the Eurodollar Rate Reserve Percentage in effect on such day,
     plus (b) the Applicable Margin in effect on such day.

     "Affiliate" means, as to any Person, any other Person that, directly or
     indirectly through one or more intermediaries or otherwise, controls, is
     controlled by, or is under common control with, such Person.  As used in
     this definition, "control" means the possession, directly or indirectly, of
     the power to direct or cause the direction of the management or policies of
     a Person (whether through ownership of securities or limited liability
     company, partnership or other ownership interests, by contract or
     otherwise).  For purposes of this Agreement, each of the Partners is an
     Affiliate of the Borrower.

     "Affiliate Indebtedness" means, as to any Person, Indebtedness of such
     Person which is owed to any Affiliate of such Person.

     "Agent" means Credit Suisse First Boston, in its capacity as agent for the
     Lenders pursuant to this Agreement, and any successor Agent appointed
     pursuant to Section 9.07.

     "Agent's Office" means the address of the Agent specified in or determined
     in accordance with the provisions of Section 10.01.

     "Agreement" means this Agreement, including all attached Schedules, Annexes
     and Exhibits, each as amended, modified and supplemented from time to time.

                               Credit Agreement
<PAGE>

                                      -2-

     "Applicable Margin" means:

     (a)  with respect to any Eurodollar Rate Loan the margin calculated as set
          out below:

          (i)   for the period from and including the Closing Date to but
                excluding the nine-month anniversary thereof, the Applicable
                Margin shall be 2.00%;

          (ii)  for the period from and including the nine-month anniversary of
                the Closing Date to but excluding the twelve-month anniversary
                of the Closing Date, the Applicable Margin shall be 2.50%;

          (iii) for the period from and including the twelve-month anniversary
                of the Closing Date to but excluding the fifteen-month
                anniversary of the Closing Date, the Applicable Margin shall be
                2.75%; and

          (iv)  for the period from and including the fifteen-month anniversary
                of the Closing Date and at all times thereafter, the Applicable
                Margin shall be increased by 0.50% on each monthly anniversary
                of the Closing Date; and

     (b)  with respect to any Base Rate Loan, the margin calculated as set out
          below:

          (i)   for the period from and including the Closing Date to but
                excluding the nine-month anniversary thereof, the Applicable
                Margin shall be zero;

          (ii)  for the period from and including the nine-month anniversary of
                the Closing Date to but excluding the twelve-month anniversary
                of the Closing Date, the Applicable Margin shall be 0.50%;

          (iii) for the period from and including the twelve-month anniversary
                of the Closing Date to but excluding the fifteen-month
                anniversary of the Closing Date, the Applicable Margin shall be
                0.75%; and

          (iv)  for the period from and including the fifteen-month anniversary
                of the Closing Date and at all times thereafter, the Applicable
                Margin shall be increased by 0.50% on each monthly anniversary
                of the Closing Date.

     "Assignment Agreement" means any agreement substantially in the form of
     Exhibit 10.06(a) with respect to an assignment in accordance with Section
     10.06.

     "Average Consolidated Indebtedness" means, as of the date of any
     determination, without duplication of amounts, the average of the aggregate
     amounts outstanding at the end of each month during the Borrower's four
     most recently ended fiscal quarters of all obligations (other than
     obligations in respect of Interest Rate Protection Agreements) of the
     Borrower and the Subsidiaries in respect of the principal amount of all
     Indebtedness, including, without limitation, the Loans, the Revolving
     Loans, the Revolving Credit Agreement Letter of Credit Obligations (if
     any), all Qualified Subordinated Debt, all Permitted Replacement Debt and
     all Distribution Debt.
<PAGE>

                                      -3-

     "Average Debt to EBITDA Ratio" means, as of the date of any determination,
     the ratio of (a) Average Consolidated Indebtedness over the Borrower's four
     most recently ended fiscal quarters (excluding from the computation thereof
     obligations of the Borrower and its Subsidiaries in respect of the
     principal amount of all Qualified Subordinated Debt that is Affiliate
     Indebtedness) to (b) Consolidated EBITDA for such fiscal quarters.

     "Bankruptcy Law" means Title 11 of the United States Code or any other
     federal or state law, or any foreign law, relating to bankruptcy,
     insolvency, reorganization, relief or protection of debtors.

     "Base Rate" means, for any day, a rate per annum equal to the higher of (a)
     the Prime Rate in effect on such day and (b) the sum of 0.5%, plus the
     Federal Funds Rate in effect on such day.

     "Base Rate Loan" means any Loan made pursuant to  Section 2.01 and Section
     2.05(b)(iii) that bears interest computed on the basis of the Adjusted Base
     Rate.

     "Benefit Plan" means, with respect to any Person at any time, any "employee
     pension benefit plan" as defined in Section 3(2) of ERISA, including any
     plan that is covered by Title IV of ERISA or subject to the minimum funding
     standards under Section 412 of the Code (excluding any Multiemployer
     Benefit Plan), the funding requirements of which (under Section 302 of
     ERISA or Section 412 of the Code) are, or at any time within six years
     preceding the time in question were, in whole or in part, the
     responsibility of such Person or with respect to which such Person or an
     ERISA Affiliate of such Person was a "contributing sponsor" or an
     "employer" as defined in Section 4001 and Section 3(5), respectively, of
     ERISA.

     "Birmingport Facility" has the meaning assigned to such term in the
     Contribution Agreement as in effect on the date of this Agreement.

     "Borrower" means LYONDELL-CITGO Refining LP, a Delaware limited
     partnership.

     "Borrowing" means the borrowing by the Borrower (consisting of Loans) under
     this Agreement.

     "Business Day" means a day of the year on which banks are not authorized or
     required to be closed in New York City and, if the applicable Business Day
     relate to an Eurodollar Rate Loan, on which dealings are carried on between
     prime banks in the London interbank market.

     "Capital Lease" means a lease of (or other agreement conveying the right to
     use) real or personal property that is required to be classified and
     accounted for as a capital lease under GAAP as in effect on the date of
     this Agreement, and, for purposes of this Agreement, the amount of any
     Capital Lease obligation at any date shall be the capitalized amount
     thereof at such date as determined in accordance with GAAP as in effect on
     the date of this Agreement.
<PAGE>

                                      -4-

     "Capital Security" means (a) any share, membership or other percentage
     interest, unit of participation or other equivalent (however designated) of
     a corporate equity security or other equity interest in a Person and (b)
     any debt security or other evidence of Indebtedness which is convertible
     into or exchangeable for, or any option, warrant or other right to acquire,
     any Capital Security of any type referred to in clause (a) of this
     definition.

     "Change of Control" means the failure of CITGO or Lyondell, individually or
     collectively, to own, legally and beneficially, directly or indirectly, at
     least 35% of the outstanding ownership and voting interests in the
     Borrower.

     "Charter Documents" means, with respect to (a) the Borrower, (i) its
     Certificate of Limited Partnership, (ii) the Partnership Agreement and
     (iii) its Certificate of Conversion, and (b) with respect to any other
     Person, (i) the articles or certificate of formation, incorporation or
     organization (or the equivalent organizational documents) of such Person,
     (ii) the bylaws, limited liability company agreement or regulations (or the
     equivalent governing documents) of such Person and (iii) each document
     setting forth the designation, amount and relative rights, limitations and
     preferences of any class or series of such Person's Capital Securities or
     of any rights in respect of such Person's Capital Securities.

     "CITGO" means CITGO Petroleum Corporation, a Delaware corporation.

     "CITGO GP" means CITGO Gulf Coast Refining, Inc., a Delaware corporation
     that is a Wholly-Owned Subsidiary of CITGO and a general partner in the
     Borrower.

     "Closing Date" means the date as of which Loans are made to the Borrower
     pursuant to this Agreement.

     "Code" means the Internal Revenue Code of 1986.

     "Commitment" means, with respect to each Lender, the amount set forth
     opposite such Lender's name under the heading "Commitment" on Annex A or,
     in the case of a Lender that becomes a Lender pursuant to an assignment,
     the amount set forth in the applicable Assignment Agreement, in either case
     as the same may be reduced from time to time pursuant to Section 2.03, 3.02
     or 3.03 or increased or reduced from time to time pursuant to assignments
     in accordance with Section 10.06.

     "Confidential Information" has the meaning specified in Section 10.04.

     "Consolidated EBIT" means, for any period, without duplication of amounts,
     the sum of (a) Net Income for such period, plus (b)(i) such amount of
     Consolidated Interest Expense for such period as was deducted in
     determining such Net Income and (ii) the amount classified as income tax
     expense and deducted in determining such Net Income.

     "Consolidated EBITDA" means, for any period, without duplication of
     amounts, the sum of (a) Consolidated EBIT for such period, plus (b) the
     amount classified as
<PAGE>

                                      -5-

     depreciation and amortization expense and deducted in determining Net
     Income for such period.

     "Consolidated Indebtedness" means, as of the date of any determination,
     without duplication of amounts, the aggregate amount of all obligations
     (other than obligations in respect of Interest Rate Protection Agreements)
     of the Borrower and the Subsidiaries in respect of the principal amount of
     all Indebtedness, including, without limitation, the Loans, the Revolving
     Loans, the Revolving Credit Agreement Letter of Credit Obligations (if
     any), all Qualified Subordinated Debt, all Permitted Replacement Debt and
     all Distribution Debt as of such date.

     "Consolidated Interest Expense" means, for any period, without duplication
     of amounts, the sum of (a) the amount classified as interest costs and
     deducted in determining Net Income for such period, plus (b) the interest
     costs of the Borrower and the Subsidiaries on a consolidated basis and
     capitalized in accordance with GAAP for such period and not deducted in
     determining Net Income for such period.

     "Consolidated Net Worth" means, as of the date of any determination,
     without duplication of amounts, (i) the aggregate amount of total assets of
     the Borrower and the Subsidiaries, minus (ii) the aggregate amount of the
     total liabilities of the Borrower and the Subsidiaries, in each case as of
     the end of the Borrower's most recently ended fiscal quarter and determined
     on a consolidated basis in accordance with GAAP as in effect on the date of
     this Agreement and as applied on a basis consistent with the basis on which
     GAAP was applied in the preparation of the Initial Financial Statements;
     provided, however, that solely for the purpose of calculating the
     --------  -------
     Borrower's compliance with the Consolidated Net Worth covenant set out in
     Section 7.16(c), 50% of the principal amount of all Qualified Subordinated
     Debt that is Affiliate Indebtedness shall be excluded from the calculation
     of the aggregate amount of the total liabilities of the Borrower.  Without
     limiting the generality of the foregoing, the liabilities of the Borrower
     at any time shall include the amount of all Distribution Debt and accrued,
     unpaid interest thereon at such time.

     "Contribution Agreement" means the Contribution Agreement, dated July 1,
     1993, between Lyondell and the Borrower, as amended, modified and
     supplemented from time to time to the extent permitted by Section 7.17,
     unless the context otherwise requires.

     "Convert", "Conversion" or "Converted" each refers (a) to a conversion of
     Eurodollar Rate Loans into Base Rate Loans, if required pursuant to Section
     2.05(b)(iii), (b) to a conversion of Base Rate Loans into Eurodollar Rate
     Loans, if required pursuant to Section 2.05(b)(v) or 2.06(b), and (c) to
     the continuation of Eurodollar Rate Loans as Eurodollar Rate Loans having a
     new Interest Period.

     "Coverage Ratio" means, as of the date of any determination, the ratio of
     (a) Consolidated EBIT for the Borrower's four most recently ended fiscal
     quarters to (b) Consolidated Interest Expense (excluding from the
     computation thereof interest costs of the Borrower and its Subsidiaries in
     respect of the principal amount of all Qualified Subordinated Debt that is
     Affiliate Indebtedness) for such fiscal quarters.
<PAGE>

                                      -6-

     "CRIC" means CITGO Refining Investment Company, an Oklahoma corporation.

     "Crude Supply Agreement" means the Crude Supply Agreement, dated as of May
     5, 1993, between the Borrower and Lagoven, S.A., a corporation organized
     under the laws of the Bolivarian Republic of Venezuela (and subsequently
     assigned to PDVSA Petroleos y Gas, S.A.), as amended, modified and
     supplemented from time to time to the extent permitted by Section 7.17,
     unless the context otherwise requires.

     "Current Date" means any day during the 20-day period ending on the Closing
     Date.

     "Custodian" means any custodian, receiver, sequestrator, trustee or similar
     official (a) under any Bankruptcy Law, (b) under any business corporation
     statute in the case of assets of any corporation or (c) under or pursuant
     to any limited liability company or limited partnership statute in the case
     of assets of any limited liability company or limited partnership.

     "Debt to Total Capitalization Ratio" means, as of the end of any fiscal
     quarter of the Borrower, the ratio of (a) Consolidated Indebtedness
     (excluding from such computation obligations of the Borrower and its
     Subsidiaries in respect of the principal amount of all Qualified
     Subordinated Debt that is Affiliate Indebtedness); to (b) the sum of (i)
     Consolidated Net Worth, plus (ii) Consolidated Indebtedness, in each case
     as of such time.

     "Default" means any condition or event that constitutes an Event of Default
     or that with the giving of notice or lapse of time or both would become an
     Event of Default.

     "Default Rate" means the rate otherwise applicable under Section 2.05(a)(i)
     or (ii), plus 2.0% or, if there is no such applicable rate in respect of
     the circumstances for which the Default Rate is used, the Base Rate, plus
     2.0%.

     "Distribution Debt" means obligations of the Borrower created under Section
     7.3.(C) of the Partnership Agreement in respect of distributions required
     to be made pursuant to Section 7.4 of the Partnership Agreement.

     "Dollars" and the sign "$" each means lawful money of the United States of
     America.

     "Domestic Lending Office" means, with respect to each Lender, (a) the
     branch or office of such Lender set forth below such Lender's name under
     the heading "Domestic Lending Office" on Annex A or, in the case of a
     Lender that becomes a Lender pursuant to an assignment, the branch or
     office of such Lender set forth under the heading "Domestic Lending Office"
     in the Assignment Agreement giving effect to such assignment, or (b) such
     other branch or office of such Lender designated by such Lender to the
     Agent and the Borrower from time to time as the branch or office at which
     its Base Rate Loans are to be made or maintained.

     "DRULPA" means the Delaware Revised Uniform Limited Partnership Act.
<PAGE>

                                      -7-

     "Eligible Assignee" means at any time any Lender, bank, finance company,
     insurance company, savings and loan association, savings bank, other
     financial institution or fund that uses as its source of funds to make and
     maintain any Loan a source satisfying the "ERISA Assumptions" set out our
     Schedule A and (a) is regularly engaged in making or purchasing loans or
     (b) if not regularly engaged in making commercial loans, is a "qualified
     institutional buyer" or an "accredited investor" (as defined in Rule 144A
     and Regulation D, respectively, under the Securities Act of 1933).

     "Environmental Laws" means any and all Governmental Requirements relating
     to the environment, including, without limitation, ambient air, surface
     water, land surface or subsurface strata, or to emissions, discharges,
     releases or threatened releases of pollutants, contaminants, chemicals or
     industrial, toxic or hazardous substances or wastes or noxious noise or
     odor into the environment, or otherwise relating to the manufacture,
     processing, distribution, use, treatment, storage, disposal, transport or
     handling of pollutants, contaminants, chemicals or industrial, toxic or
     hazardous substances or wastes (including, without limitation, petroleum,
     petroleum distillates, asbestos or asbestos-containing material or
     polychlorinated biphenyls).

     "ERISA" means the Employee Retirement Income Security Act of 1974.

     "ERISA Affiliate" means, with respect to any Person, any other Person,
     including an Affiliate of such first Person, that is a member or at any
     time within six years of the time in question has been a member of any
     group of organizations within the meaning of Section 414(b), (c), (m) or
     (o) of the Code of which such first Person is or was a member.

     "Eurocurrency Liabilities" has the meaning specified in Regulation D of the
     Board of Governors of the Federal Reserve System.

     "Eurodollar Lending Office" means, with respect to each Lender, (a) the
     branch or office of such Lender set forth below such Lender's name under
     the heading "Eurodollar Lending Office" on Annex A or, in the case of a
     Lender that becomes a Lender pursuant to an assignment, the branch or
     office of such Lender set forth under the heading "Eurodollar Lending
     Office" in the Assignment Agreement giving effect to such assignment, or
     (b) such other branch or office of such Lender designated by such Lender to
     the Agent and the Borrower from time to time as the branch or office at
     which its Eurodollar Rate Loans are to be made or maintained.

     "Eurodollar Rate" means, for any Interest Period for each Eurodollar Rate
     Loan comprising part of the same Borrowing, the per annum rate determined
     by the Agent as follows: (a) the Agent shall obtain the rate for deposits
     in Dollars for a period comparable to such Interest Period which appears on
     Page 3750 of the Bridge Information System's Telerate Service as of 11:00
     A.M. (London time) two Business Days preceding the first day of such
     Interest Period; and (b) if the Agent is not able to obtain quotations for
     the determination of the Eurodollar Rate pursuant to clause (a) above, the
     Eurodollar Rate shall be the per annum rate of interest quoted by the Agent
     at which Dollar deposits are offered by the Agent to prime banks in the
     London interbank market at approximately 11:00 A.M. (London time) two
     Business Days prior to the first day of such Interest
<PAGE>

                                      -8-

     Period, which deposits are for a period equal to such Interest Period and
     in an amount substantially equal to the Eurodollar Rate Loan that the Agent
     would make in its capacity as a Lender.

     "Eurodollar Rate Loan" means any Loan made pursuant to Section 2.01 that
     bears interest computed on the basis of the Adjusted Eurodollar Rate.

     "Eurodollar Rate Reserve Percentage" means, for any day in an Interest
     Period for any Eurodollar Rate Loan, the reserve percentage applicable on
     that day under regulations issued from time to time by the Board of
     Governors of the Federal Reserve System (or any successor) for determining
     the maximum reserve requirement (including, without limitation, any
     emergency, supplemental or other marginal reserve requirement) for the
     Agent with respect to liabilities or assets consisting of or including
     Eurocurrency Liabilities having a term equal to such Interest Period.

     "Event of Default" has the meaning specified in Section 8.01.

     "Existing Revolving Credit Agreement" means the Revolving Credit Agreement
     dated as of September 13, 2000 among the Borrower, the lenders party
     thereto and Credit Suisse First Boston, as agent.

     "Existing Term Credit Agreement" means the Credit Agreement, dated
     September 13, 2000, between the Borrower, the lenders party thereto and
     Credit Suisse First Boston, as agent.

     "Federal Funds Rate" means, for each day, the rate per annum (rounded
     upwards if necessary, to the nearest 1/100th of 1%) equal to the weighted
     average of the rates on overnight federal funds transactions with members
     of the Federal Reserve System arranged by federal funds brokers, as
     published for such day (or, if such day is not a Business Day, for the next
     preceding Business Day) by the Federal Reserve Bank of New York or, if such
     rate is not so published for any day that is a Business Day, the average of
     the quotations for such day received by the Agent from three federal funds
     brokers of recognized standing selected by it.

     "Fee Letter" means that certain letter from the Agent, Banc of America
     Securities, LLC and Bank of America, N.A. to the Borrower, dated June 21,
     2001, respecting certain fees payable by the Borrower to the Agent, Banc of
     America Securities, LLC, Bank of America, N.A. and the Lenders.

     "Financial Statements" means the Initial Financial Statements and the
     financial statements of the Borrower and the Subsidiaries required to be
     delivered to the Agent by Sections 6.01(a) and (b).

     "GAAP" means generally accepted accounting principles and practices in the
     United States as in effect from time to time and concurred in by the
     independent certified public accountants certifying the Financial
     Statements required by Section 6.01(b), applied on a basis consistent
     (except for changes concurred in by such independent certified public
<PAGE>

                                      -9-

     accountants) with the most recent audited Financial Statements delivered to
     the Agent, except as otherwise specifically provided herein.

     "General Partners" means LRC and CITGO GP.

     "Governmental Approval" means any authorization, consent, approval, permit,
     franchise, certificate, license, implementing order or exemption of, or
     registration or filing with, any Governmental Authority.

     "Governmental Authority" means (a) any national, state, county, municipal
     or other government, domestic or foreign, or any agency, board, bureau,
     commission, court, department or other instrumentality of any such
     government or (b) any school district having the authority to assess and
     collect Taxes.

     "Governmental Requirement" means any law, statute, code, ordinance, order,
     rule, regulation, judgment, decree, injunction, writ, edict, award,
     authorization or other requirement of any Governmental Authority or any
     obligation included in any certificate, franchise, permit or license issued
     by any Governmental Authority or resulting from binding arbitration,
     including, without limitation, any requirement under common law.

     "Granting Lender" has the meaning specified in Section 10.06(h).

     "Gross Proceeds" means, with respect to any Permitted Replacement Debt, (a)
     if such Permitted Replacement Debt is incurred by the Borrower in a
     commercial or other loan transaction or to an Affiliate of the Borrower,
     the aggregate unpaid principal amount of such Permitted Replacement Debt
     when it is so incurred, or (b) if such Permitted Replacement Debt is
     evidenced by "securities" (as defined in the Securities Act of 1933) issued
     and sold by the Borrower to one or more underwriters for resale or one or
     more investors for investment, the aggregate gross proceeds received by the
     Borrower from such sale before the deduction of any expenses related to
     such sale, provided, that in the case of any sale to an underwriter for
     resale, if such underwriter's underwriting or similar discount or
     commission is not reflected as a reduction in the purchase price paid by
     such underwriter to the Borrower for such Permitted Replacement Debt from
     the price at which such underwriter initially offers such Permitted
     Replacement Debt for resale, it shall be deducted, without duplication of
     amounts, in determining the Gross Proceeds received by the Borrower from
     such Permitted Replacement Debt.

     "Guaranty" means, for any Person, without duplication, any liability,
     contingent or otherwise, of such Person guaranteeing or otherwise becoming
     liable for any obligation of any other Person (the "primary obligor") in
     any manner, whether directly or indirectly, and including, without
     limitation, any liability of such Person, direct or indirect, (a) to
     purchase or pay (or advance or supply funds for the purchase or payment of)
     such obligation or to purchase (or to advance or supply funds for the
     purchase of) any security for the payment of such obligation, (b) to
     purchase property, securities or services for the purpose of assuring the
     owner of such obligation of the payment of such obligation or (c) to
     maintain working capital, equity capital or other financial statement
     condition or liquidity of the primary obligor so as to enable the primary
     obligor to pay
<PAGE>

                                      -10-

     such obligation; provided, that the term "Guaranty" does not include
     endorsements for collection or deposit in the ordinary course of the
     endorser's business.

     "Houston Facility" has the meaning assigned to such term in the
     Contribution Agreement as in effect on the date of this Agreement.

     "Indebtedness" of any Person means, without duplication, (a) any liability
     of such Person (i) for borrowed money or arising out of any extension of
     credit to or for the account of such Person (including, without limitation,
     reimbursement or payment obligations with respect to surety bonds, letters
     of credit, banker's acceptances and similar instruments), for the deferred
     purchase price of property or services or arising under conditional sale or
     other title retention agreements, other than trade payables arising in the
     ordinary course of business, (ii) evidenced by notes, bonds, debentures or
     similar instruments, (iii) in respect of Capital Leases or (iv) in respect
     of Interest Rate Protection Agreements, (b) any liability secured by any
     Lien upon any property or assets of such Person (or upon any revenues,
     income or profits of such Person therefrom), whether or not such Person has
     assumed such liability or otherwise become liable for the payment thereof,
     (c) any liability of others of the type described in the preceding clause
     (a) or (b) in respect of which such Person has incurred, assumed or
     acquired a liability by means of a Guaranty or (d) with respect to the
     Borrower, Distribution Debt.

     "Indemnified Person" means, at any time, any Person that is, or at such
     time was, the Agent, a Lender, an Affiliate of the Agent or a Lender or a
     director, officer, employee or agent of any such Person.

     "Information" means written information, including, without limitation,
     data, certificates, reports, statements (excluding Financial Statements)
     and documents.

     "Initial Financial Statements" means the audited balance sheet of the
     Borrower as at December 31, 2000 and the related statements of income and
     cash flows for the Borrower's fiscal year ended on such date, copies of
     which have been made available to each Lender identified on the signature
     pages hereof prior to the date of this Agreement.

     "Intellectual Property" means (a) patents and patent rights, (b)
     trademarks, trademark rights, trade names, trade name rights, corporate
     names, business names, trade styles, service marks and logos and (c)
     copyrights, in each case whether registered, unregistered or under pending
     registration under the laws of the United States or any other country.

     "Interest Payment Date" means (a) as to Base Rate Loans, the last day of
     March, June, September and December of each year and (b) as to Eurodollar
     Rate Loans, as set forth in Section 2.05(a)(ii).

     "Interest Period" means, for each Eurodollar Rate Loan, the period (a)
     commencing (i) on the date such Loan is made, and (ii) for each such Loan
     into which any Loan has been Converted, the date of that Conversion, and
     (b) ending on the last day of the period selected by the Borrower pursuant
     to the provisions below.  In the case of all Eurodollar Rate Loans, the
     duration of each Interest Period shall be one, two, three or six months, in
     each case as the Borrower may, upon notice received by the Agent not later
     than 12:00
<PAGE>

                                      -11-

     Noon (New York City time) on the third Business day prior to the first day
     of such Interest Period, select; provided, however, that: (a) Interest
                                      --------  -------
     Periods commencing on the same date for Eurodollar Rate Loans comprising
     part of the same Borrowing shall be of the same duration; (b) whenever the
     last day of any Interest Period would otherwise occur on a day other than a
     Business Day, the last day of such Interest Period shall be extended to
     occur on the next succeeding Business Day, provided, that if such extension
                                                --------
     would cause the last day of such Interest Period to occur in the next
     succeeding calendar month, the last day of such Interest Period shall occur
     on the next preceding Business Day; and (c) no more than one Interest
     Period may be outstanding at any time.

     "Interest Rate Protection Agreement" means, for any Person, an interest
     rate swap, cap or collar agreement or similar arrangement providing for the
     transfer or mitigation of interest risks of such Person either generally or
     under specific contingencies between such Person and any other Person.

     "Issuance Expenses" means, with respect to any Permitted Replacement Debt,
     without duplication of amounts, the expenses incurred by the Borrower in
     connection with its issuance or sale of such Permitted Replacement Debt
     which would be capitalized and classified as debt issuance costs on a
     balance sheet of the Borrower prepared in accordance with GAAP as in effect
     on the date of this Agreement; provided, however, that "Issuance Expenses"
                                    --------  -------
     do not include (a) any amount paid or payable by the Borrower to any
     Affiliate of the Borrower (other than, if the Affiliate retains a law firm
     as its counsel in connection with such issuance or sale, the reasonable
     fees and disbursements of such firm in that connection), (b) any
     underwriting or other similar discount or commission or (c) any unamortized
     debt discount.

     "Lender" means at any time any Person then having any or all of the rights
     or obligations of a Lender and which (a) is identified as a Lender on the
     signature pages hereof or (b) has been assigned such rights or obligations
     pursuant to an Assignment Agreement.

     "Lending Office" means, with respect to each Lender, such Lender's Domestic
     Lending Office in the case of Base Rate Loans or such Lender's Eurodollar
     Lending Office in the case of Eurodollar Rate Loans.

     "Lien" means, with respect to any property or asset of any Person (or any
     revenues, income or profits of such Person therefrom) (in each case whether
     the same is consensual or nonconsensual or arises by contract, operation of
     law, legal process or otherwise), (a) any mortgage, lien, security
     interest, pledge, attachment, levy or other charge or encumbrance of any
     kind thereupon or in respect thereof or (b) any other arrangement under
     which the same is transferred, sequestered or otherwise identified with the
     intention of subjecting the same to, or making the same available for, the
     payment or performance of any liability in priority to the payment of the
     ordinary, unsecured creditors of such Person.  For purposes of this
     Agreement, a Person shall be deemed to own subject to a Lien any asset that
     it has acquired or holds subject to the interest of a vendor or lessor
     under any conditional sale agreement, Capital Lease or other title
     retention agreement relating to such asset.
<PAGE>

                                      -12-

     "Limited Partners" means Lyondell LP and CRIC.

     "Litigation" means any case, proceeding, claim, grievance, lawsuit or
     investigation conducted by or pending before any Governmental Authority or
     any arbitration proceeding.

     "Loan" means a loan by a Lender to the Borrower pursuant to Section 2.01 or
     2.05(b)(iii).

     "Loan Document Claim" means any claim in connection with, arising out of or
     relating to any Loan Document or any transaction with any Lender or the
     Agent contemplated thereby, whether direct or indirect, whether based on
     any federal, state or local law or regulation, securities or commercial law
     or regulation, under common law or in equity, or on contract, tort or
     otherwise, regardless of whether the transactions contemplated hereby are
     ever consummated and regardless of when any such claim arises.

     "Loan Documents" means this Agreement, the Notes, the Fee Letter and all
     other agreements between the Borrower or any Subsidiary and any one or more
     of the Lenders and the Agent respecting fees payable in connection with
     this Agreement or any other Loan Document and all other written agreements,
     documents, instruments and certificates now or hereafter executed or
     delivered by the Borrower or any Subsidiary to or for the benefit of the
     Agent or any Lender pursuant to or in connection with any of the foregoing,
     and any and all amendments, modifications, supplements, renewals,
     extensions, increases, restatements, rearrangements or substitutions from
     time to time of all or any part of the foregoing.

     "LRC" means Lyondell Refining Company, a Delaware corporation.

     "Lyondell" means Lyondell Chemical Company, a Delaware corporation formerly
     known as Lyondell Petrochemical Company.

     "Lyondell LP" means Lyondell Refining LP, LLC, a Delaware limited liability
     company that is a Wholly-Owned Subsidiary of Lyondell and a limited partner
     in the Borrower.

     "Lyondell Obligations" means the obligations of Lyondell to the Borrower on
     the date of this Agreement under Section 5.2.(A) of the Contribution
     Agreement with respect to "Pre-Closing Environmental Liabilities and Costs"
     that are included in "Retained Liabilities" as provided in Section 2.3.(D)
     of the Contribution Agreement and not excluded from "Retained Liabilities"
     by Schedule 2.3.(D) to the Contribution Agreement.  As used in this
     definition, "Contribution Agreement" means the Contribution Agreement as in
     effect on the date of this Agreement, and the quoted terms in this
     definition have the meanings ascribed to them in the Contribution Agreement
     as in effect on the date of this Agreement.

     "Material" means material to the business, operations, property or assets,
     liabilities, financial condition or results of operations of the Borrower
     and the Subsidiaries considered as a whole.
<PAGE>

                                      -13-

     "Material Adverse Effect" means, relative to the occurrence or non-
     occurrence of any event and after taking into account existing or
     reasonably anticipated insurance coverage and indemnification rights with
     respect to such occurrence or non-occurrence, (a) a material adverse effect
     on the business, operations, property or assets, liabilities, condition
     (financial or otherwise) or results of operations of the Borrower and the
     Subsidiaries considered as a whole or (b) a material adverse effect on the
     ability of the Borrower to perform its payment or other obligations under
     the Loan Documents.

     "Material Agreement" means any contract or agreement to which the Borrower
     or any Subsidiary is a party or by which the Borrower or any Subsidiary is
     bound or to which any property or assets of the Borrower or any Subsidiary
     is subject and which is Material.  Without limiting the generality of the
     foregoing, for purposes of this Agreement, the Supply or Purchase Contracts
     and the Contribution Agreement constitute Material Agreements.

     "Moody's" means Moody's Investors Service, Inc.

     "Multiemployer Benefit Plan" means a "multiemployer plan" as defined in
     Section 4001(a)(3) of ERISA, Section 414 of the Code or Section 3(37) of
     ERISA (or any similar type of plan established or regulated under the laws
     of any foreign country) to which the Borrower or any ERISA Affiliate of the
     Borrower is making or accruing or has made or accrued an obligation to make
     contributions within six years of the time in question.

     "Multiple Employer Plan" means any "employee benefit plan" as defined in
     Section 3(3) of ERISA, other than a Multiemployer Benefit Plan, that is
     subject to Title IV of ERISA and to which the Borrower or any ERISA
     Affiliate of the Borrower and an employer other than the Borrower or any
     ERISA Affiliate of the Borrower contribute or have an obligation to
     contribute.

     "Net Income" means, for any period, the aggregate net income (or net loss)
     of the Borrower and the Subsidiaries for such period determined on a
     consolidated basis in accordance with GAAP as in effect on the date of this
     Agreement and as applied on a basis consistent with the basis on which GAAP
     was applied in the preparation of the Initial Financial Statements.

     "Net Proceeds" means, with respect to any Permitted Replacement Debt, (a)
     the Gross Proceeds of such Permitted Replacement Debt, minus (b) the
     Issuance Expenses paid or payable by the Borrower in connection with the
     issuance or sale of such Permitted Replacement Debt.

     "Note" means a promissory note of the Borrower in the form of Exhibit A.

     "Notice of Borrowing" has the meaning specified in Section 2.02(a).

     "Notice of Conversion" has the meaning specified in Section 2.06.

     "Obligations" means all obligations or liabilities of any form or nature,
     whether matured or unmatured, fixed or contingent, of the Borrower to the
     Agent or any Lender in
<PAGE>

                                      -14-

     connection with, arising under or related to any Loan Document or any
     Permitted Interest Rate Protection Agreement between the Borrower and any
     Lender.

     "Outside Representatives" means, with respect to any Person, the
     Representatives of such Person other than its own directors, officers,
     employees and Affiliates.

     "Partners" means Lyondell LP, CRIC, LRC and CITGO GP and any of their
     respective successors and assigns under the Partnership Agreement.

     "Partnership Agreement" means the Limited Partnership Agreement of the
     Borrower dated as of December 31, 1998, as amended, modified and
     supplemented from time to time to the extent no Event of Default occurs
     under Section 8.01(i)(iii) as a result of such amendment, modification or
     supplement.

     "Partnership Governance Committee" means the committee of representatives
     of the General Partners through which the General Partners manage the
     Borrower in accordance with Article 3 of the Partnership Agreement.

     "Partnership Governance Committee Action" has the meaning specified in
     Section 3.6(A) of the Partnership Agreement.

     "PBGC" means the Pension Benefit Guaranty Corporation.

     "PDVSA" means Petroleos de Venezuela, S.A., a corporation organized under
     the laws of the Bolivarian Republic of Venezuela.

     "Permitted Interest Rate Protection Agreement" means an Interest Rate
     Protection Agreement between the Borrower and a Lender or other financial
     institution having combined capital and surplus of at least $500,000,000 or
     that has (or that is a subsidiary of a bank holding company that has)
     publicly traded unsecured long-term debt securities given a rating of A-
     (or the equivalent rating then in effect) or better by S&P or a rating of
     A3 (or the equivalent rating then in effect) or better by Moody's.

     "Permitted Investments" means (a) at the time of purchase or other
     acquisition by the Borrower or any Subsidiary, (i) obligations issued or
     guaranteed by the United States of America with a remaining maturity not
     exceeding one year, (ii) commercial paper with maturities of not more than
     270 days and a published rating of not less than A-1 (or the equivalent
     rating then in effect) by S&P or P-1 (or the equivalent rating then in
     effect) by Moody's, (iii) time deposits, certificates of deposit and
     bankers' acceptances having maturities of not more than one year of any
     Lender or any commercial bank or trust company if (A) such bank or trust
     company has a combined capital and surplus of at least $500,000,000 and (B)
     its unsecured long-term debt obligations, or those of a holding company of
     which it is a subsidiary, are rated not less than A- (or the equivalent
     rating then in effect) by S&P or A3 (or the equivalent rating then in
     effect) by Moody's and (iv) money market funds organized under the laws of
     the United States of America or any state thereof which invest primarily in
     investments constituting any one or more of the types of "Permitted
     Investments" described in subclauses (i), (ii) and (iii) of this clause (a)
     without regard to the restrictions on the maturities of such Permitted
<PAGE>

                                      -15-

     Investments, (b) Capital Securities of, or loans or advances to, any
     Wholly-Owned Subsidiary, provided, that if any Person that is a Wholly-
     Owned Subsidiary ceases at any time to be a Wholly-Owned Subsidiary,
     Capital Securities of that Person remaining owned by the Borrower or any
     Subsidiary, and any loans or advances to that Person by the Borrower or any
     Subsidiary remaining outstanding, will cease being Permitted Investments at
     that time and will be deemed acquired or made at that time for purposes of
     Section 7.13 and (c) advances made by the Borrower to the Partners pursuant
     to and in accordance with Section 7.5 of the Partnership Agreement so long
     as no Event of Default exists or would exist after giving effect thereto,
     provided, that if any such advance is not repaid in the manner required by
     Section 7.5 of the Partnership Agreement within 90 days of the date of such
     advance, such advance will cease being a Permitted Investment at the close
     of business on such 90th day and will be deemed made at that time for
     purposes of Section 7.13.

     "Permitted Liens" means, as applied to the property or assets of any Person
     (or any revenues, income or profits of such Person therefrom):  (a) Liens
     for Taxes if the same are not at the time due and delinquent or (if
     foreclosure, distraint, sale or other similar proceedings have not been
     commenced or, if commenced, have been stayed) are being contested in good
     faith and by appropriate proceedings, and if such Person has set aside on
     its books such reserves (segregated to the extent required by sound
     accounting practices) as may be required by GAAP; (b) Liens of carriers,
     warehousemen, mechanics, laborers and materialmen for sums not yet due or
     (if foreclosure, distraint, sale or other similar proceedings have not been
     commenced or, if commenced, have been stayed) being contested in good faith
     and by appropriate proceedings, if such Person has set aside on its books
     such reserves (segregated to the extent required by sound accounting
     practices) as may be required by GAAP; (c) Liens incurred in the ordinary
     course of such Person's business in connection with workmen's compensation,
     unemployment insurance and other social security legislation (other than
     pursuant to ERISA or Section 412(n) of the Code); (d) Liens incurred in the
     ordinary course of such Person's business in connection with deposit
     accounts or to secure the performance of bids, tenders, trade contracts,
     statutory obligations, surety and appeal bonds, performance and return-of-
     money bonds and other obligations of like nature; (e) easements, rights-of-
     way, reservations, restrictions and other similar encumbrances incurred in
     the ordinary course of such Person's business or existing on property and
     not materially interfering with the ordinary conduct of such Person's
     business; (f) defects or irregularities in such Person's title to its real
     properties which do not materially interfere with the ordinary course of
     such Person's business (provided that, in the case of the Houston Facility
                             --------
     and the Birmingport Facility, such defects or irregularities also do not
     materially diminish the value, from the value as of May 15, 1995, of the
     surface estate (the defects or irregularities as of May 15, 1995 with
     respect to the Houston Facility being set forth in the Commitment for Title
     Insurance issued by Commonwealth Land Title Company of Houston, as agent
     for Commonwealth Land Title Insurance Company, under GF No. 9210852, dated
     effective as of April 7, 1995, and with respect to the Birmingport Facility
     being set forth in the Commitment for Title Insurance issued by Alabama
     Title Co., Inc., as agent for Commonwealth Land Title Insurance Company,
     under File No. 2571-FF, dated effective as of March 21, 1995)); (g) legal
     or equitable encumbrances deemed to exist by reason of negative pledges
     such as Section 7.05; (h) any interest or title of a
<PAGE>

                                      -16-

     lessor of assets being leased by any Person pursuant to any Capital Lease
     permitted by Section 7.09(f) or any lease that, pursuant to GAAP, would be
     accounted for as an operating lease; (i) Liens securing purchase money
     Indebtedness permitted by Section 7.09(f) so long as such Liens do not
     attach to any property or assets other than the properties or assets
     purchased with the proceeds of such Indebtedness; and (j) other Liens
     (other than pursuant to ERISA or Section 412(n) of the Code), provided that
                                                                   --------
     the obligations secured thereby do not exceed in the aggregate $1,000,000
     at any time outstanding.

     "Permitted Replacement Debt" means Indebtedness of the Borrower (a) that is
     evidenced by notes, bonds, debentures or similar instruments issued or sold
     by the Borrower for cash, (b) that is not secured, directly or indirectly,
     by any Lien upon any property or assets of the Borrower or any Subsidiary
     (or any revenues, income or profits of the Borrower or any Subsidiary
     therefrom) and (c) the Gross Proceeds from the issuance or sale of which
     are used by the Borrower until such time as all Loans and all Obligations
     then owing have been paid in full and no Lender has any Commitment
     hereunder solely (i) to prepay any then outstanding Loans pursuant to
     Section 3.02(a), (ii) to pay the Issuance Expenses, if any, incurred by the
     Borrower in connection with such issuance or sale, (iii) to pay, if all
     Loans have been paid in full, such other Obligations as have then become
     due, (iv) to prepay, if all Obligations have been paid in full, any then
     outstanding Revolving Loans and (v) to pay, if all Revolving Loans have
     been paid in full, such other Revolving Obligations; provided, however,
                                                          --------  -------
     that unless and until the Loans have been paid in full (or are paid in full
     with the proceeds thereof) and no Lender has any Commitment hereunder, any
     such Indebtedness shall constitute Permitted Replacement Debt only to the
     extent that (A) such Indebtedness does not by its terms, or by the terms of
     any agreement or contract under or pursuant to which it is issued or by
     which it is governed, provide for any of the following to occur prior to
     (X) the six-month anniversary of the Termination Date, for Indebtedness to
     any Partner or any Affiliate of a Partner or (Y) the first anniversary of
     the Termination Date, for Indebtedness to any other Person: (1) a
     scheduled payment of any portion of the principal amount or accreted value
     of any such Indebtedness, (2) a mandatory prepayment, redemption or
     repurchase of any portion of the principal amount or accreted value of any
     such Indebtedness (in the absence of an acceleration of the entire
     principal amount or accreted value of such Indebtedness by the holders
     thereof or their representative by reason of the occurrence, or the
     occurrence and continuation, of a default or an event of default with
     respect thereto) or (3) the irrevocable deposit, segregation or setting
     aside of any funds or assets by the Borrower, and (B) if such Indebtedness
     constitutes Affiliate Indebtedness of the Borrower, it is Qualified
     Subordinated Debt.

     "Person" means any individual, sole proprietorship, corporation,
     partnership, limited liability company, business trust, unincorporated
     organization, mutual company, joint stock company, estate, trust, union,
     employee organization or Governmental Authority or, for the purpose of the
     definition of "ERISA Affiliate," any trade or business.

     "Prime Rate" means the fluctuating prime commercial lending rate of Credit
     Suisse First Boston, as established by Credit Suisse First Boston from time
     to time.  The Prime Rate
<PAGE>

                                      -17-

     shall be adjusted automatically, without notice, on the effective date of
     any change in such prime commercial lending rate. The Prime Rate is not
     necessarily the lowest rate of interest of Credit Suisse First Boston.

     "Prohibited Transaction" means any transaction that is prohibited under
     Section 4975 of the Code or Section 406 of ERISA and not exempt under
     Section 4975 of the Code or Section 408 of ERISA, provided that, with
     respect to any transactions involving a Loan, the ERISA Assumptions set
     forth on Schedule A are deemed to be true.

     "Prospective Assignees" means all Eligible Assignees that are prospective
     assignees of any Lender.

     "Prospective Participants" means all Eligible Assignees that are
     prospective participants of any Lender.

     "Qualified Subordinated Debt" means any Indebtedness of the Borrower (a)(i)
     to any Partner or any Affiliate of any Partner having, at the option of the
     Borrower, (A) subordination terms substantially identical to those set
     forth in Exhibit 1.01-A to the Agreement or (B) such other terms of
     subordination as are satisfactory to the Required Lenders or (ii) to any
     other Person, having subordination terms reasonably satisfactory to the
     Required Lenders and (b) unless and until the Loans have been paid in full
     (or are paid in full with the proceeds thereof) and no Lender has any
     Commitment hereunder, which does not by its terms, or by the terms of any
     agreement or contract under or pursuant to which it is issued or by which
     it is governed, provide for any of the following to occur prior to (X) June
     30, 2003, for Qualified Subordinated Debt to any Partner or any Affiliate
     of a Partner existing on the Closing Date;  (Y) the six-month anniversary
     of the Termination Date, for Qualified Subordinated Debt issued after the
     Closing Date to any Partner or any Affiliate of a Partner or (Z) the first
     anniversary of the Termination Date, for Qualified Subordinated Debt to any
     other Person:  (i) a scheduled payment of any portion of the principal
     amount or accreted value of any such Indebtedness, (ii) a mandatory
     prepayment, redemption or repurchase of any portion of the principal amount
     or accreted value of any such Indebtedness (in the absence of an
     acceleration of the entire principal amount or accreted value of such
     Indebtedness by the holders thereof or their representative by reason of
     the occurrence, or the occurrence and continuation, of a default or an
     event of default with respect thereto) or (iii) the irrevocable deposit,
     segregation or setting aside of any funds or assets by the Borrower;
     provided, however, that any outstanding Qualified Subordinated Debt that is
     --------  -------
     Affiliate Indebtedness of the Borrower shall cease to be Qualified
     Subordinated Debt in the event that (i) such Affiliate Indebtedness is, in
     the good faith judgment of the Required Lenders, more favorably
     subordinated to holders of Indebtedness pari passu with the Obligations
     than such Affiliate Indebtedness is subordinated to the Obligations and
     (ii) the Borrower does not concurrently therewith cause to be effected
     either an amendment of such Affiliate Indebtedness, or a legally, valid,
     binding and enforceable agreement relating thereto, whereby such Affiliate
     Indebtedness is subordinated to the Obligations on terms substantially
     identical to the terms on which it is subordinated to such pari passu
     Indebtedness.
<PAGE>

                                      -18-

     "Ratable Portion" means, as of the date of any determination, for each
     Lender, the fraction, expressed as a percentage, the numerator of which is
     such Lender's Commitment and the denominator of which is the Total
     Commitment.

     "Receiving Party" means the Agent or any Lender.

     "Refined Products Purchase Agreement" means the Product Sales Agreement
     (Refined Products-CITGO Petroleum Corporation) dated as of July 1, 1993
     between the Borrower and CITGO, as amended, modified and supplemented from
     time to time to the extent permitted by Section 7.17.

     "Refinery" means at any time the refinery of the Borrower located in
     Houston, Texas.

     "Register" has the meaning specified in Section 10.06(b).

     "Regulations T, U and X" means Regulations T, U and X of the Board of
     Governors of the Federal Reserve System.

     "Representatives" means, with respect to any Person, the directors,
     officers, employees, Affiliates, accountants, advisors, attorneys,
     consultants or other agents of such Person, or any other representatives of
     such Person or of any of such directors, officers, employees, Affiliates,
     accountants, advisors, attorneys, consultants or other agents.

     "Reportable Event" means, with respect to any Benefit Plan of any Person,
     (i) the occurrence of any of the events set forth in Section 4043(b) or (c)
     (other than a Reportable Event as to which the provision of 30 days' notice
     to the PBGC is waived under applicable regulations), 4062(e) or 4063(a) of
     ERISA with respect to such Benefit Plan, (ii) any event requiring such
     Person or any of its ERISA Affiliates to provide security to such Benefit
     Plan under Section 401(a)(29) of the Code or (iii) any failure to make a
     payment required by Section 412(m) of the Code with respect to such Benefit
     Plan.

     "Required Lenders" means, at the time of any determination, Lenders holding
     at least 66 2/3% of the then aggregate unpaid principal amount of the Notes
     or, if no such principal amount is then outstanding, Lenders having at
     least 66 2/3% of the Total Commitment; provided, however, that for purposes
     of (a) any amendment of, any consent under, or waiver of any failure of the
     Borrower to perform or observe any term, covenant, condition or agreement
     contained in, Section 7.17(a) (other than with respect to the Refined
     Products Purchase Agreement), (b) any amendment of, or waiver of any Event
     of Default specified in, Section 8.01(i)(i) (other than with respect to the
     Refined Products Purchase Agreement) or (c) any amendment or waiver of this
     proviso, "Required Lenders" means, at the time of any determination,
     Lenders holding at least 80% of the then aggregate unpaid principal amount
     of the Notes or, if no such principal amount is then outstanding, Lenders
     having at least 80% of the Total Commitment.

     "Responsible Officer" means (a) the Vice President-General Manager of
     Operations or Vice President-General Manager  of Planning and
     Administration of the Borrower or (b) a senior management employee of the
     Borrower or an officer of any Partner, Lyondell or
<PAGE>

                                      -19-

     CITGO, in each case, who has been delegated authority by a Responsible
     Officer to take the actions required of a Responsible Officer hereunder
     pursuant to resolutions adopted by the Borrower.

     "Restricted Payment" means (a) with respect to any Person, any of the
     following effected by such Person:  (i) any declaration or payment of any
     dividend or other distribution, direct or indirect, on account of any
     Capital Securities of such Person now or hereafter outstanding, (ii) any
     direct or indirect redemption, retirement, purchase or other acquisition
     for value of or direct or indirect purchase, payment or sinking fund or
     similar deposit for the redemption, retirement, purchase or other
     acquisition for value of, or to obtain the surrender of, any Capital
     Securities of such Person now or hereafter outstanding or any warrants,
     options or other rights to acquire or subscribe for purchase of Capital
     Securities of such Person or any Subsidiary of such Person now or hereafter
     outstanding or (iii) any payment or prepayment of principal of, premium or
     interest, fees or other charges on or with respect to, and any redemption,
     purchase, retirement, defeasance, sinking fund or similar payment of, or of
     any claim to rescission with respect to, any Affiliate Indebtedness of such
     Person or any Indebtedness of such Person subordinated by the terms thereof
     to the prior payment of the Obligations and (b), with respect to the
     Borrower or any Subsidiary, any of the following effected directly or
     indirectly by such Person:  any payment or prepayment of principal of or
     premium on or with respect to, or any redemption, purchase, retirement,
     defeasance, sinking fund or similar payment of, or of any claim to
     rescission with respect to, any Permitted Replacement Debt that is not
     Affiliate Indebtedness of the Borrower.  Without limiting the generality of
     the foregoing, a "Restricted Payment" by the Borrower or any Subsidiary
     includes any distribution made by the Borrower, or any Subsidiary for the
     account of the Borrower, to a Partner pursuant to the Partnership
     Agreement, including, without limitation, Sections 7.2, 7.4 and 7.5
     thereof.

     "Revolving Credit Agreement" means the Revolving Credit Agreement, for the
     provision of $70,000,000 of indebtedness for working capital and general
     business purposes, dated as of the date of this Agreement among the
     Borrower and the lenders party thereto, as amended, modified and
     supplemented from time to time provided that, to constitute part of the
                                    --------
     "Revolving Credit Agreement" for the purpose of this definition, any such
     amendment, modification or supplement thereto, at any time in effect must
     be in form and substance reasonably satisfactory to the Lenders.

     "Revolving Credit Agreement Letter of Credit Obligations" means at any time
     the obligations of the Borrower in respect of letters of credit (if any)
     issued under the Revolving Credit Agreement at such time.

     "Revolving Loan" means any loan made to the Borrower under the Revolving
     Credit Agreement.

     "Revolving Loan Termination Date" has the meaning assigned to the term
     "Termination Date" in the Revolving Credit Agreement.
<PAGE>

                                      -20-

     "Revolving Obligations" has the meaning assigned to the term "Obligations"
     in the Revolving Credit Agreement.

     "Service Agent" has the meaning specified in Section 10.08.

     "S&P" means Standard and Poor's Rating Group.

     "SPC" has the meaning assigned to that term in Section 10.06(h).

     "Subsidiary" means any corporation or other Person of which Capital
     Securities having ordinary voting power to elect a majority of the board of
     directors or other Persons performing similar functions (whether or not any
     other class of Capital Securities of such corporation or other Person has
     or might have voting power by reason of the happening of a contingency) are
     at the time owned or controlled, directly or indirectly, by the Borrower.

     "Supplemental Supply Agreement" means the Supplemental Supply Agreement,
     dated as of May 5, 1993, between the Borrower and PDVSA, as amended,
     modified and supplemented from time to time to the extent permitted by
     Section 7.17, unless the context otherwise requires.

     "Supply or Purchase Contracts" means (a) the Crude Supply Agreement, (b)
     the Supplemental Supply Agreement and (c) the Refined Products Purchase
     Agreement.

     "Supply Termination Date" has the meaning specified in Section 8.02.

     "Taxes" means all taxes, assessments, fees, levies, imposts, duties,
     deductions, withholdings or other charges of any nature whatsoever from
     time to time or at any time imposed by any Governmental Requirement,
     excluding, in the case of each Lender and the Agent, taxes imposed on its
     income, and franchise taxes and doing business taxes imposed on it by the
     laws of any jurisdiction (or political subdivision thereof).

     "Termination Date" means the earlier of (a) the date falling 18 months
     after the Closing Date and (b) any date on which the Loans become due and
     payable in full, whether by acceleration or otherwise under this Agreement.

     "Termination Event" means, with respect to any Benefit Plan, (a) any
     Reportable Event with respect to such Benefit Plan which is likely to
     result in the termination of such Benefit Plan, (b) the termination of such
     Benefit Plan, or the filing of a notice of intent to terminate such Benefit
     Plan, or the treatment of any amendment to such Benefit Plan as a
     termination under Section 4041(c) of ERISA, (c) the institution of
     proceedings to terminate such Benefit Plan under Section 4042 of ERISA, (d)
     the appointment of a trustee to administer such Benefit Plan under Section
     4042 of ERISA or (e) any occurrence similar to any of those referred to in
     clauses (a) through (d) above under the applicable Governmental
     Requirements of a foreign country.
<PAGE>

                                      -21-

     "Total Commitment" means $450,000,000, the aggregate amount of the
     Commitments, as such amount may be reduced from time to time pursuant to
     Sections 2.03, 3.02 and 3.03.

     "Type" refers to a Base Rate Loan and Eurodollar Rate Loan.

     "United States Person" has the meaning specified in Section 3.06(d).

     "Welfare Plan" means an "employee welfare benefit plan" as defined in
     Section 3(1) of ERISA in which any personnel of the Borrower or any ERISA
     Affiliate of the Borrower participate, excluding any Multiemployer Benefit
     Plan subject to ERISA.

     "Wholly-Owned Subsidiary" means any corporation or other Person all of
     whose outstanding Capital Securities are owned and controlled, directly or
     indirectly, by the Borrower.

1.02 Other Definitional Provisions.
     -----------------------------

     (a)  Except as otherwise specified herein, all references herein to any
          Governmental Requirement defined or referred to herein, including the
          Code, ERISA and the DRULPA, shall be deemed references to such
          Governmental Requirement or any successor Governmental Requirement, as
          the same may have been or may be amended or supplemented from time to
          time, and any rules or regulations promulgated thereunder.

     (b)  When used in this Agreement, the words "herein," "hereof" and
          "hereunder" and words of similar import shall refer to this Agreement
          as a whole and not to any provision of this Agreement, and the words
          "Article," "Section," "Annex," "Schedule" and "Exhibit" shall refer to
          Articles and Sections of, and Annexes, Schedules and Exhibits to, this
          Agreement unless otherwise specified.

     (c)  Whenever the context so requires, the singular number includes the
          plural and vice versa.

     (d)  The word "including" (and, with correlative meaning, the word
          "include") means including, without limiting the generality of any
          description preceding such word.

     (e)  References in this Agreement or any other Loan Document to the
          Borrower's knowledge shall be deemed references to the actual
          knowledge of one or more of the Responsible Officers.

1.03 Captions.  Captions to Articles, Sections and subsections of, and Annexes,
     --------
     Schedules and Exhibits to, this Agreement are included for convenience of
     reference only and shall not constitute a part of this Agreement for any
     other purpose or in any way affect the meaning or construction of any
     provision of this Agreement.
<PAGE>

                                      -22-

                                  ARTICLE II

                                CREDIT FACILITY

2.01  The Facility.  Each Lender severally agrees, on the terms and conditions
      ------------
      hereinafter set forth, to make a Loan to the Borrower on any Business Day
      during the period from the date hereof through July 25, 2001, in an amount
      not to exceed such Lender's Commitment; provided, however, that the
                                              --------  -------
      Lenders shall only have an obligation to make Base Rate Loans to the
      Borrower pursuant to this Section 2.01 to the extent that the requirement
      that a Notice of Borrowing be delivered on the third Business Day prior to
      the date of Borrowing of Eurodollar Rate Loans has not been waived by all
      Lenders. The Borrower shall not be entitled to borrow more than once
      hereunder and such Borrowing shall be in an aggregate amount not less than
      $1,000,000 or an integral multiple of $100,000 in excess thereof and shall
      consist of Loans of the same Type made on the same day by the Lenders
      ratably according to their respective Commitments. The obligation of each
      Lender to make a Loan is subject to the satisfaction of the conditions
      applicable to the making of Loans which are set forth in Article IV. The
      principal amount outstanding of all Loans shall mature and be due and
      payable, together with all accrued and unpaid interest thereon, on the
      Termination Date.

2.02  Making the Loans.
      ----------------

      (a)  The Borrowing shall be made on written notice given by the Borrower
           to the Agent not later than: (i) 10:00 A.M. (New York City time) on
           the date of the Borrowing in the case of a Borrowing consisting of
           Base Rate Loans and (ii) 12:00 Noon (New York City time) on the third
           Business Day prior to the date of the Borrowing in the case of a
           Borrowing consisting of Eurodollar Rate Loans. Such notice of the
           Borrowing (the "Notice of Borrowing") shall be in the form of Exhibit
           2.02 and shall specify (A) the date of the Borrowing, (B) the Type
           and the aggregate principal amount of Loans comprising the Borrowing
           and (C) in the case of a Borrowing comprised of Eurodollar Rate
           Loans, the initial Interest Period for such Loans. The Notice of
           Borrowing shall be irrevocable and binding on the Borrower. The Agent
           shall promptly deliver a copy of the Notice of Borrowing to each
           Lender.

      (b)  Each Lender shall, before (i) 2:00 P.M. New York City time) on the
           date of a Borrowing consisting of Base Rate Loans and (ii) 12:00 Noon
           (New York City time) on the date of the Borrowing consisting of
           Eurodollar Rate Loans, make available for the account of its
           applicable Lending Office to the Agent at the Agent's Office, in
           immediately available funds, such Lender's Ratable Portion of the
           Borrowing. After the Agent's receipt of such funds and, upon
           fulfillment of the applicable conditions set forth in Article IV, the
           Agent shall make such funds available to the Borrower's account at
           the Agent's Office or as otherwise designated in the Notice of
           Borrowing. In the case of a Borrowing consisting of Base Rate Loans,
           the Agent will not be required to make funds so available until 3:00
           P.M. (New York City time) on the date of such Borrowing.
<PAGE>

                                      -23-

     (c)  Unless the Agent has received notice from a Lender prior to (i) 1:00
          P.M. (New York City time) on the date of the Borrowing consisting of
          Base Rate Loans and (ii) 11:00 A.M. (New York City time) on the date
          of the Borrowing consisting of Eurodollar Rate Loans that such Lender
          will not make available to the Agent such Lender's Ratable Portion of
          the Borrowing, the Agent may assume such Lender has made such portion
          available to the Agent on the date of the Borrowing in accordance with
          Section 2.02(b) and the Agent in its sole discretion may, in reliance
          on such assumption, make available to the Borrower on such date a
          corresponding amount on behalf of such Lender.  If and to the extent
          that such Lender shall not have so made its Ratable Portion of the
          Borrowing available to the Agent, such Lender and the Borrower
          severally agree to repay to the Agent forthwith on demand such
          corresponding amount, together with interest thereon, for each day
          from the date such amount is made available to the Borrower until the
          date such amount is repaid to the Agent, at (i) in the case of the
          Borrower, the interest rate applicable at the time to Loans comprising
          the Borrowing, and (ii) in the case of such Lender, the Federal Funds
          Rate until (and including) the third Business Day after demand is made
          and thereafter at the Base Rate.  If such Lender shall repay to the
          Agent such corresponding amount, such amount so repaid shall
          constitute such Lender's Loan as part of the Borrowing for purposes of
          this Agreement.  If the Borrower shall repay to the Agent such
          corresponding amount, the Borrower shall have no liability with
          respect to losses, costs or expenses otherwise compensable under
          Section 3.04 in connection therewith.

     (d)  The obligations of the Lenders to make Loans to the Borrower pursuant
          to this Agreement are several and not joint or joint and several, and
          the failure of any Lender to make the Loan to be made by it as part of
          the Borrowing shall not relieve any other Lender of its obligation, if
          any, hereunder to make its Loan on the date of the Borrowing, but no
          Lender shall be responsible for the failure of any other Lender to
          make the Loan to be made by such other Lender on the date of the
          Borrowing.

2.03 Reduction of Commitments.  The Borrower shall have the right, subject to
     ------------------------
     the terms and conditions set forth in Section 3.02, on at least three
     Business Days' notice to the Agent to terminate in whole or, from time to
     time, reduce ratably in part the unused portion of the Total Commitment
     without penalty or premium; provided that each partial reduction of the
                                 --------
     Total Commitment shall be in an aggregate amount equal to the lesser of (a)
     $5,000,000 or an integral multiple of $1,000,000 in excess thereof or (b)
     the entire unused portion of the Total Commitment. Upon receipt of any such
     notice, the Agent shall promptly notify each Lender of the contents thereof
     and the amount to which such Lender's Commitment is to be reduced. No
     termination or partial reduction of the Total Commitment pursuant to this
     Section 2.03 may be reinstated.

2.04 Fees.  The Borrower agrees to pay, without duplication, to the Agent, for
     ----
     its own account and for the ratable account of the Lenders, the fees
     payable in the amounts and at the times agreed upon in the Fee Letter.
<PAGE>

                                      -24-

2.05  Interest; Determination and Protection; Illegality.
      --------------------------------------------------

      (a)  Rates.  Each Loan shall bear interest at rates set forth below, and
           -----
           the Borrower shall pay interest on the unpaid principal amount of
           each Loan made by each Lender from the date of such Loan until such
           principal amount shall be paid in full at the times and at the rates
           per annum set forth below.

           (i)   Base Rate Loans. During such periods as such Loan is a Base
                 ---------------
                 Rate Loan, a rate per annum equal at all times to the Adjusted
                 Base Rate in effect from time to time and payable on (A) each
                 Interest Payment Date, commencing September 30, 2001, (B) the
                 date such Base Rate Loan shall be Converted and (C) the
                 Termination Date.


           (ii)  Eurodollar Rate Loans. During such periods as such Loan is a
                 ---------------------
                 Eurodollar Rate Loan, each such Loan shall bear interest at a
                 rate per annum equal at all times during each Interest Period
                 for such Loan to the Adjusted Eurodollar Rate for such Interest
                 Period, payable on (A) the last day of such Interest Period
                 and, in the case of a Eurodollar Rate Loan having an Interest
                 Period longer than three months, on the three-month anniversary
                 of the first day of such Interest Period and (B) the
                 Termination Date.

           (iii) After the occurrence of any Event of Default specified in
                 Section 8.01(a) and consisting of the failure of the Borrower
                 to pay any principal of any Note or interest thereon and during
                 the continuance thereof, automatically and without any action
                 by the Agent or any Lender, to the extent permitted by
                 applicable law, the outstanding Obligations shall bear interest
                 at a rate per annum equal to the Default Rate. Such interest
                 shall be payable on demand and accrue until the earliest of (A)
                 the waiver of such Event of Default by the requisite number of
                 Lenders or the cure of such Event of Default, (B) agreement by
                 the requisite number of Lenders to rescind the charging of
                 interest at the Default Rate or (C) payment in full of the
                 Obligations and termination of the Total Commitment.

      (b)  Interest Rate Determination and Protection; Illegality.
           ------------------------------------------------------

           (i)   The Adjusted Eurodollar Rate for each Eurodollar Rate Loan
                 specified in the Notice of Borrowing or a Notice of Conversion
                 shall be determined by the Agent two Business Days before the
                 first day of the Interest Period applicable for such Loan. The
                 Agent shall give prompt notice to the Borrower and the Lenders
                 of the applicable Adjusted Eurodollar Rate determined by the
                 Agent for purposes of Section 2.05(a)(ii), and each such
                 determination by the Agent shall be conclusive, absent manifest
                 error. If for any reason the Agent is unable to determine the
                 Adjusted Eurodollar Rate for any Eurodollar Rate Loan, the
                 Agent shall so notify the Borrower and the Lenders, whereupon
                 each Lender shall notify the Borrower through the Agent of the
                 cost to such Lender (as determined by it in good faith) of
                 funding and maintaining the outstanding affected Loans for such
<PAGE>

                                      -25-

                 Interest Period, and the interest payable to such Lender on
                 Eurodollar Rate Loans to which such Interest Period applies
                 shall bear the interest at a rate per annum equal to the cost
                 of funding and maintaining such Loans as so notified by such
                 Lender plus the Applicable Margin or, upon the occurrence of
                        ----
                 any Event of Default specified in Section 8.01(a) and
                 consisting of a failure of the Borrower to pay any principal on
                 any Note or interest thereon and during the continuance
                 thereof, the Default Rate.

          (ii)   If, with respect to any Eurodollar Rate Loans, any Lender
                 reasonably determines that the Adjusted Eurodollar Rate for any
                 Interest Period for such Loans will not adequately reflect the
                 cost to such Lender of making, funding or maintaining its
                 Eurodollar Rate Loans for such Interest Period, such Lender
                 shall forthwith so notify the Borrower and the Agent, whereupon
                 such Lender shall notify the Borrower through the Agent of the
                 cost to such Lender (as determined by it in good faith) of
                 funding and maintaining the outstanding affected Loans for such
                 Interest Period, and the interest payable to such Lender on
                 Eurodollar Rate Loans to which such Interest Period applies
                 shall bear the interest at a rate per annum equal to the cost
                 of funding and maintaining such Loans as so notified by such
                 Lender plus the Applicable Margin or, upon the occurrence of
                        ----
                 any Event of Default specified in Section 8.01(a) and
                 consisting of a failure of the Borrower to pay any principal on
                 any Note or interest thereon and during the continuance
                 thereof, the Default Rate.

          (iii)  Notwithstanding any other provision of this Agreement, if any
                 Lender shall notify the Agent and the Borrower that the
                 introduction of, any change in the interpretation of, or any
                 change in, any Governmental Requirement after the date hereof
                 makes it unlawful, or any central lender or comparable agency
                 or other Governmental Authority asserts after the date hereof
                 that it is unlawful, for any such Lender or its Eurodollar
                 Lending Office to perform its obligations hereunder to make
                 Eurodollar Rate Loans or to fund or maintain Eurodollar Rate
                 Loans hereunder,

                 (A)  the obligation of such Lender to make, or to Convert Loans
                      into, Eurodollar Rate Loans shall be suspended until such
                      Lender shall notify the Borrower and the Agent that the
                      circumstances causing such suspension no longer exist, and

                 (B)  (I)  if lawful, as determined by such Lender in good
                           faith, each Eurodollar Rate Loan of such Lender then
                           outstanding shall be Converted automatically into a
                           Base Rate Loan effective on the last day of the
                           Interest Period then currently applicable to such
                           Eurodollar Rate Loan (or on such earlier date as
                           shall be notified by the Lender as being the last
                           applicable date for such Conversion under applicable
                           law, rule, regulation, treaty or directive), or
<PAGE>

                                      -26-

                      (II) if (1) it is unlawful to Convert such Eurodollar Rate
                           Loans in accordance with Section 2.05(b)(iii)(I), as
                           determined by such Lender in good faith or it becomes
                           unlawful for any such Lender or US Domestic Lending
                           Office to maintain Base Rate Loans hereunder, as
                           determined by such Lender in good faith, and (2) the
                           assignment referred to in Section 3.07 cannot be
                           consummated prior to the last date permissible for
                           such assignment under the relevant law, rule,
                           regulation, treaty or directive, the Borrower shall
                           prepay such Lender's outstanding Loans in full (or
                           the amount of the affected portion thereof) together
                           with accrued interest thereon and all other amounts
                           payable to such Lender hereunder to the Agent for
                           account of such Lender, on the last day of the then
                           current Interest Period for such Loan (or on such
                           earlier date as the Borrower shall be notified by the
                           Agent at the request of such Lender as being the last
                           permissible date for such prepayment under relevant
                           law, rule, regulation, treaty or directive).

          (iv) Each Lender will promptly notify the Borrower of any event
               occurring after the date of this Agreement which will cause the
               Adjusted Eurodollar Rate not to adequately reflect such Lender's
               costs or which makes it unlawful for such Lender to make or
               maintain Eurodollar Rate Loans, and will designate a different
               Eurodollar Lending Office if such designation will avoid such
               inadequacy or unlawfulness and will not, in the judgment of such
               Lender, be otherwise disadvantageous to such Lender.

          (v)  The procedures specified in clauses (i), (ii) and (iii) above
               shall apply to each relevant period succeeding the first such
               period to which they were applied unless and until the Agent
               notifies the Borrower that the condition referred to in clause
               (i) of this Section 2.05(b) no longer exists or the Agent (at the
               request of the applicable Lender) notifies the Borrower that the
               condition referred to in clause (ii) or (iii) of this Section
               2.05(b) no longer exists (which notice the Lenders agree to give
               or cause to be given promptly following the time any such
               condition no longer exists), whereupon the Loan, if it is a Base
               Rate Loan, shall be Converted into a Eurodollar Rate Loan or
               interest on the Loans, or applicable Loan, shall again be
               determined in accordance with the provisions of Section
               2.05(a)(ii), in each case, effective commencing on the third
               Business Day after the date of such notice.

2.06  Interest Period Conversion.
      --------------------------

      (a)  The Borrower may on any Business Day, on notice ("Notice of
           Conversion") given by the Borrower to the Agent not later than 12:00
           Noon (New York City time) on the third Business Day prior to the date
           of the proposed Conversion of Eurodollar Rate Loans, Convert all
           Eurodollar Rate Loans comprising the same
<PAGE>

                                      -27-

          Borrowing into Eurodollar Rate Loans having a different Interest
          Period; provided, however, that (except as required by Section
          2.05(b)(iii)(I) any Conversion of any Eurodollar Rate Loans having a
          different Interest Period shall be made on, and only on, the last day
          Interest Period for such Eurodollar Rate Loans. Each such Notice of
          Conversion shall specify therein the request (i) date of such
          Conversion and (ii) the duration of The Interest Period. Each Notice
          of Conversion shall be irrevocable and binding on the Borrower. The
          Agent shall promptly deliver a copy of each Notice of Conversion to
          each Lender.

     (b)  If a Borrowing pursuant to Section 2.01 consists of Base Rate Loans
          then such Base Rate Loans shall be Converted, on the Business Day
          after the date of Borrowing, into Eurodollar Rate Loans having the
          Interest Period set forth on a Notice of Conversion which the Borrower
          shall deliver to the Agent not later than 12:00 Noon (New York City
          time) on the Business Day before the date of the Borrowing of such
          Base Rate Loans.

     (c)  If the Borrower shall fail to deliver to the Agent a Notice of
          Conversion in accordance with this Section 2.06 to select the duration
          of the Interest Period for the principal amount outstanding under (i)
          any Eurodollar Rate Loan prior to the last day of the Interest Period
          applicable to such Loan, or (ii) any Base Rate Loan which is required
          to be Converted in accordance with Section 2.06(b) prior to the
          Business Day before the Borrowing of such Loans, the Interest Period
          for such Loan shall automatically have a duration of one month.

                                  ARTICLE III

               PAYMENTS, PREPAYMENTS, INCREASED COSTS AND TAXES

3.01 Payments and Computations.
     -------------------------

     (a)  The Borrower shall make each payment under this Agreement and under
          the Notes not later than 12:00 Noon (New York City time) on the day
          when due in Dollars to the Agent at the Agent's Office in immediately
          available funds.  Each payment by the Borrower shall be made without
          set-off, counterclaim or other deduction whatsoever.  The Agent will
          promptly thereafter cause to be distributed like funds relating to the
          payment of principal or interest or fees payable to the Lenders (to
          the extent received by the Agent) ratably to the Lenders for the
          account of their applicable Lending Offices and like funds relating to
          the payment of any other amount payable to any Lender (to the extent
          received by the Agent) to such Lender for the account of its Lending
          Office, in each case to be applied in accordance with the terms of
          this Agreement.  Fees payable pursuant to Section 2.04 to a Lender are
          for the account of such Lender's Lending Office as such Lender shall
          designate by notice to the Agent.
<PAGE>

                                      -28-

      (b)  Whenever any payment hereunder or under the Notes shall be stated to
           be due on a day other than a Business Day, such payment shall be made
           on the next succeeding Business Day, and such extension of time shall
           in such case be included in the computation of payment of interest or
           fees, as the case may be; provided, however, if such extension would
           cause payment of interest on or principal of Eurodollar Rate Loans to
           be made in the next succeeding calendar month, such payment shall be
           made on the next preceding Business Day.

      (c)  All computations of interest hereunder based on the Base Rate shall
           be made by the Agent on the basis of a year of 365 or 366 days, as
           the case may be, for each day that the Prime Rate is the basis for
           such computation, and on the basis of a year of 360 days for each day
           that the Federal Funds Rate is the basis for such computation, and
           all computations of interest hereunder based on the Adjusted
           Eurodollar Rate shall be made by the Agent on the basis of a year of
           360 days, in each case for the actual number of days (including the
           first day but excluding the last day) occurring in the period for
           which such interest is payable. Each determination by the Agent of an
           interest rate hereunder shall be conclusive, absent manifest error.

      (d)  Unless the Agent shall have received notice from the Borrower prior
           to the date on which any payment is due to the Lenders that the
           Borrower will not make such payment in full, the Agent may assume
           that the Borrower has made such payment in full to the Agent on such
           date and the Agent may, in reliance upon such assumption, cause to be
           distributed to each Lender on such due date an amount equal to the
           amount then due such Lender. If and to the extent the Borrower shall
           not have so made such payment in full to the Agent, each Lender shall
           repay to the Agent forthwith on demand such amount distributed to
           such Lender, together with interest thereon, for each day from the
           date such amount is distributed to such Lender until the date such
           Lender repays such amount to the Agent, at the Federal Funds Rate
           until (and including) the third Business Day after demand is made and
           thereafter at the Base Rate.

      (e)  All amounts shall be paid on the date specified therefor, whether or
           not such payment would require a payment of any Eurodollar Rate Loans
           prior to the last day of the applicable Interest Periods therefor or
           would result in losses, costs or expenses compensable under Section
           3.04.

3.02  Mandatory Prepayments.
      ---------------------

      (a)  Permitted Replacement Debt. Within one Business Day after the receipt
           --------------------------
           by the Borrower of the Net Proceeds of any Permitted Replacement
           Debt, the Borrower shall prepay the Loans in an aggregate principal
           amount equal to such Net Proceeds, together with accrued and unpaid
           interest to the date of such prepayment on the principal amount
           prepaid, whereupon the Total Commitment shall be permanently reduced
           ratably by the amount of such prepayment.
<PAGE>

                                      -29-

      (b)  Other Mandatory Prepayments. If at any time the aggregate outstanding
           ---------------------------
           principal amount of the Loans exceeds the Total Commitment then in
           effect, then the Borrower shall immediately pay to the Agent for the
           ratable account of the Lenders the amount of such excess, together
           with accrued and unpaid interest to the date of such prepayment on
           the principal amount prepaid.

3.03  Voluntary Prepayments.  The Borrower may, on at least one Business Day's
      ---------------------
      notice to the Agent stating the proposed date and aggregate principal
      amount of the prepayment (and, if relevant, whether such Loans are Base
      Rate Loans or Eurodollar Rate Loans), prepay, without premium or penalty,
      the outstanding principal amounts of such Loans in whole or ratably in
      part, together with accrued and unpaid interest to the date of such
      prepayment on the principal amount prepaid, whereupon the Total Commitment
      shall be permanently reduced ratably by the amount of such prepayment.
      Such notice shall be irrevocable and the payment amount specified in such
      notice shall be due and payable on the prepayment date described in such
      notice, together with accrued and unpaid interest on the amount prepaid.
      Partial prepayments of Loans shall be in an aggregate principal amount
      equal to the lesser of (a) $1,000,000 or an integral multiple of $100,000
      in excess thereof and (b) the aggregate outstanding principal amount of
      such Loans; provided, that these limitations do not apply to any
                  --------
      prepayment made pursuant to Section 7.04(b).

3.04  Funding Losses Relating to Eurodollar Rate Loans.
      ------------------------------------------------

      (a)  If any payment of principal or Conversion of any Eurodollar Rate Loan
           is made other than on the last day of an Interest Period relating to
           such Loan, as a result of a payment pursuant to Section 3.02 or 3.03
           or a Conversion pursuant to Section 2.05(b)(iii) an acceleration of
           the maturity of any Note in accordance with the terms hereof, or for
           any other reason, the Borrower shall, upon demand by any Lender, pay
           to such Lender at its Eurodollar Lending Office any amounts required
           to compensate such Lender for any losses or reasonable expenses which
           it may actually incur by reason of the liquidation or reemployment of
           the amounts so prepaid or of deposits or other funds acquired by such
           Lender to fund or maintain such Loan. In any such case, such loss and
           reasonable expense shall be equal to the sum, without duplication of
           amounts, of (i) the costs and expenses incurred (other than loss of
           the Applicable Margin) in connection with, or by reason of, any such
           event and (ii) an amount equal to the excess, if any, as reasonably
           determined by such Lender of (A) the amount of interest which would
           have accrued on the amount so paid or accelerated for the period from
           the date of such payment or acceleration to the last day of the
           Interest Period for such Loan at the Adjusted Eurodollar Rate (minus
           the Applicable Margin) applicable to such Loan over (B) the amount of
           interest, as reasonably determined by such Lender, which would have
           accrued to such Lender on such amount by placing such amount on
           deposit for a comparable period with prime banks in the London
           interbank market.

      (b)  The Borrower shall indemnify each Lender against any loss or
           reasonable expense incurred by such Lender as a result of (i) any
           failure by the Borrower to fulfill on the date of any proposed
           Borrowing of a Loan the applicable conditions set forth
<PAGE>

                                      -30-

           in Article IV or (ii) any failure by the Borrower to make a Borrowing
           of a Loan after the Borrower has given a notice requesting the same
           in accordance with the provisions hereof. In any such case, such loss
           and reasonable expense shall be equal to the sum, without duplication
           of amounts, of (i) the costs and expenses incurred (other than loss
           of the Applicable Margin) by such Lender by reason of the liquidation
           or reemployment of deposits or other funds acquired by such Lender to
           effect or maintain such Loan in connection with, or by reason of, any
           such event and (ii) an amount equal to the excess, if any, as
           reasonably determined by such Lender of (A) the amount of interest
           which would have accrued on the amount of the Loan that was to have
           been made for the period from the date such Borrowing was to have
           been made to the last day of the Interest Period for such Loan that
           would have commenced on such date at the Adjusted Eurodollar Rate
           (minus the Applicable Margin) applicable to such Loan over (B) the
           amount of interest, as reasonably determined by such Lender, which
           would have accrued to such Lender on such amount by placing such
           amount on deposit for a comparable period with prime banks in the
           London interbank market.

      (c)  Any Lender demanding payment pursuant to this Section 3.04 shall
           deliver to the Borrower a statement reasonably setting forth the
           amount and manner of determining the loss or expense for which such
           demand is made, which statement shall be conclusive, absent manifest
           error.

3.05  Increased Costs; Capital Adequacy.
      ---------------------------------

      (a)  If after the date of this Agreement any change in any applicable
           Governmental Requirement (including, without limitation, the adoption
           of any new Governmental Requirement) or in the interpretation or
           administration thereof by any central bank or comparable agency or
           any other Governmental Authority charged with the interpretation or
           administration thereof (whether or not having the force of law) 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 extended by any Lender (except any such reserve
           requirement that is reflected in the Eurodollar Rate Reserve
           Percentage), or shall impose on such Lender or the London interbank
           market any other condition affecting this Agreement or Eurodollar
           Rate 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 any Eurodollar Rate Loan or to reduce the amount of any
           sum received or receivable by such Lender hereunder (whether of
           principal, interest, fees or otherwise) by an amount reasonably
           determined by such Lender to be material, then the Borrower will pay
           to such Lender, following receipt of a notice from such Lender to
           such effect, such additional amount or amounts as will compensate
           such Lender for such additional costs incurred or reduction suffered.

      (b)  If any Lender shall have determined that (i) the adoption after the
           date of this Agreement of any Governmental Requirement, guideline or
           directive regarding capital adequacy, (ii) any change after the date
           of this Agreement in any such
<PAGE>

                                      -31-

          Governmental Requirement, guideline or directive or in the
          interpretation or administration thereof after the date of this
          Agreement by any central bank or comparable agency or any other
          Governmental Authority charged with the interpretation or
          administration thereof or (iii) compliance by any Lender (or any
          lending office of such Lender) or any Lender's holding company with
          any request or directive regarding capital adequacy issued after the
          date of this Agreement under any Governmental Requirement or guideline
          (whether or not having the force of law) of any Governmental Authority
          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, the Commitment of such
          Lender or the Loans made by such Lender to a level below that which
          such Lender or such Lender's holding company could have achieved but
          for such applicability, adoption, change or compliance (taking into
          consideration such Lender's policies and the policies of such Lender's
          holding company with respect to capital adequacy) by an amount
          reasonably determined by such Lender to be material, then from time to
          time the Borrower will pay to such Lender, following receipt of a
          notice from such Lender to such effect, such additional amount or
          amounts as shall compensate such Lender or such Lender's holding
          company for any such reduction suffered.

     (c)  Any Lender requiring payment under this Section 3.05 shall deliver to
          the Borrower a statement reasonably setting forth the amount and
          manner of determination thereof, which statement shall be conclusive,
          absent manifest error.

     (d)  Each Lender will promptly notify the Borrower of any event occurring
          after the date of this Agreement of which it has knowledge which will
          entitle such Lender to compensation pursuant to this Section 3.05 and
          will designate a different Lending Office if such designation will
          avoid the need for, or reduce the amount of, such compensation and
          will not, in the judgment of such Lender, be otherwise disadvantageous
          to such Lender.

3.06 Taxes.
     -----

     (a)  Any and all payments by the Borrower of the Obligations shall be made
          free and clear of and without deduction for any and all present or
          future Taxes.  If the Borrower shall be required by any Governmental
          Requirement to deduct any Taxes from or in respect of any sum payable
          hereunder to any Lender or the Agent, (i) the sum payable by the
          Borrower shall be increased by the amount necessary so that, after
          making all required deductions (including, without limitation,
          deductions applicable to additional sums payable under this Section
          3.06), such Lender or the Agent (as the case may be) receives an
          amount equal to the sum it would have received had no such deductions
          been made, (ii) the Borrower shall make such deductions and (iii) the
          Borrower shall pay the full amount deducted to the relevant taxing
          authority or other authority in accordance with applicable
          Governmental Requirements.
<PAGE>

                                      -32-

     (b)  In addition, the Borrower shall pay any and all present and future
          transfer, documentary, stamp and similar Taxes, any and all other
          excise and property Taxes, charges and similar levies and all
          recording and filing Taxes and fees which arise from any payment made
          hereunder or from the execution, delivery or registration of, or
          otherwise with respect to, this Agreement or any other Loan Document
          (hereinafter referred to as "Other Taxes").

     (c)  The Borrower shall indemnify each Lender and the Agent for the full
          amount of Taxes and Other Taxes (including, without limitation, any
          Taxes or Other Taxes imposed by any jurisdiction on amounts payable
          under this Section 3.06) paid by such Lender or the Agent (as the case
          may be) and all liabilities (including penalties, additions to tax,
          interest and expenses) arising therefrom or with respect thereto,
          whether or not such Taxes or Other Taxes were correctly or legally
          asserted, INCLUDING PENALTIES, ADDITIONS TO TAX, INTEREST AND EXPENSES
          ARISING AS A RESULT OF THE NEGLIGENCE (WHETHER SOLE, JOINT OR
          CONCURRENT, ACTIVE OR PASSIVE) ON THE PART OF SUCH LENDER OR THE
          AGENT, but excluding penalties, additions to tax, interest and
          expenses arising as a result of the gross negligence or willful
          misconduct on the part of such Lender or the Agent.  Payments in
          respect of the foregoing indemnification shall be made by the Borrower
          within five days after the date such Lender or the Agent (as the case
          may be) makes demand therefor.

     (d)  Within 30 days after the date of any payment of Taxes by the Borrower
          pursuant to this Section 3.06, the Borrower shall furnish to the
          Lenders and the Agent the original or a certified copy of a receipt
          evidencing payment thereof.  If the Borrower makes any payment in
          respect of any Obligation from any account located outside the United
          States or any such payment is made by a payor that is not a United
          States Person and if no Taxes are payable in respect of such payment,
          the Borrower shall furnish to the Lenders and the Agent a certificate
          from each appropriate taxing authority, or an opinion of counsel
          acceptable to the Agent, in either case stating that such payment is
          exempt from or not subject to Taxes.  For purposes of this Section
          3.06, the terms "United States" and "United States Person" shall have
          the meanings set forth in Section 7701 of the Code.

     (e)  Each Lender that is not a United States Person hereby agrees that:

          (i)  it shall, no later than the date of this Agreement (or, if such
               Lender becomes a party hereto pursuant to Section 3.07 or 10.06,
               the date upon which such Lender becomes a party hereto), deliver
               to the Borrower through the Agent, with a copy to the Agent (A)
               if any Lending Office is located in the United States of America,
               two accurate and complete signed originals of Internal Revenue
               Service Form W-8ECI or any successor thereto ("Form W-8ECI"), (B)
               if any Lending Office is located outside the United States of
               America, two accurate and complete signed originals of Internal
               Revenue Service Form W-8BEN or any successor thereto ("Form W-
               8BEN"), or (C) if such Lender is claiming exemption from
               withholding of United States federal income tax under Section
               871(h) or
<PAGE>

                                      -33-

                 881(c) of the Code with respect to "portfolio interest," a Form
                 W-8BEN or any successor thereto (and, if such Lender delivers a
                 Form W-8BEN, pursuant to clause (C) of this paragraph, such
                 Lender will certify that it (1) is not a bank for purposes of
                 Section 881(c) of the Code receiving interest on an extension
                 of credit made pursuant to a loan agreement entered into in the
                 ordinary course of its trade or business, (2) is not a 10-
                 percent shareholder (within the meaning of Section 871(h)(3)(B)
                 of the Code) of the Borrower and (3) is not a controlled
                 foreign corporation related to the Borrower (within the meaning
                 of Section 864(d)(4) of the Code)), in each case indicating
                 that such Lender is on the date of delivery thereof entitled to
                 receive payments of principal, interest and fees for the
                 account of such Lending Office or Lending Offices under this
                 Agreement free from withholding of United States federal income
                 tax;

          (ii)   if at any time such Lender changes any Lending Office or
                 selects an additional Lending Office, it shall, at the same
                 time or reasonably promptly thereafter but only to the extent
                 the forms previously delivered by it hereunder are no longer
                 effective, deliver to the Borrower through the Agent, with a
                 copy to the Agent, in replacement for the forms previously
                 delivered by it hereunder, two accurate and complete signed
                 originals of Form 4224 or Form 1001, as applicable, or a
                 Form W-8, in each case indicating that such Lender is on the
                 date of delivery thereof entitled to receive payments of
                 principal, interest and fees for the account of such changed or
                 additional Lending Office under this Agreement free from
                 withholding of United States federal income tax;

          (iii)  it shall, before or promptly after the occurrence of any event
                 (including the passing of time, but excluding any event
                 mentioned in clause (ii) above) requiring a change in the most
                 recent forms or form previously delivered by such Lender
                 pursuant to this Section 3.06(e) and if the delivery of the
                 same be lawful, deliver to the Borrower through the Agent, with
                 a copy to the Agent, two accurate and complete original signed
                 copies of Form 4224 or Form 1001, as applicable, or a Form W-8
                 in replacement for the forms or form previously delivered by
                 such Lender; and

          (iv)   it shall, reasonably promptly upon the reasonable request of
                 the Borrower to that effect, deliver to the Borrower through
                 the Agent such other forms or similar documentation as may be
                 required from time to time by any applicable Governmental
                 Requirement, treaty, rule or regulation in order to establish
                 such Lender's tax status for withholding purposes.

     (f)  The obligations of the Borrower contained in this Section 3.06 shall
          survive the termination of this Agreement and the payment in full of
          the Obligations.

3.07 Substitution of Lender.  If (a) the obligation of any Lender to make Loans
     ----------------------
     has been suspended pursuant to Section 2.05(b) or a Lender is unable to
     Convert Eurodollar Loans into, or maintain Base Rate Loans in accordance
     with Section 2.05(b)(iii)(B), (b) any
<PAGE>

                                      -34-

     Lender has demanded compensation under Section 3.05 or (c) any Lender has
     notified the Borrower that it is not capable of receiving payments without
     deduction or withholding pursuant to Section 3.06, the Borrower may replace
     such Lender by designating in a notice given to the Agent an Eligible
     Assignee to replace such Lender. If the Borrower so designates an Eligible
     Assignee, then the Agent shall give notice thereof to the Lender to be
     replaced, and thereupon, such Lender shall promptly consummate an
     assignment of such Lender's Commitment, Loans, Notes and other rights and
     obligations hereunder relative to the Commitment of such Lender to such
     Eligible Assignee in accordance with Section 10.06. For purposes of Section
     3.04(a), a Lender consummating an assignment pursuant to this Section 3.07
     shall be deemed to have been paid on the effective date of such assignment
     all its Loans then being assigned.

                                  ARTICLE IV

                              CONDITIONS TO LOANS

4.01 Conditions to Loans.  The obligation of each Lender to make its Loan is
     -------------------
     subject to the Agent's receipt on or prior to the Closing Date of each of
     the following, in sufficient number for each of the Lenders and in form and
     substance reasonably satisfactory to the Agent:

     (a)  a duly executed Note for each Lender, in each case dated as of the
          date of this Agreement;

     (b)  a Secretary's Certificate, dated the Closing Date, in the form of
          Exhibit 4.01(b)-1, to which shall be attached copies of the Charter
          Documents, as amended, modified and supplemented and in effect on the
          Closing Date, of the Borrower and resolutions evidencing the
          Partnership Governance Committee Action approving and authorizing the
          applicable Loan Documents and the Borrowing hereunder;

     (c)  a copy of the Certificate of Limited Partnership of the Borrower,
          certified as of a Current Date by the Secretary of State of the State
          of Delaware;

     (d)  a certificate of existence and good standing with respect to the
          Borrower, issued as of a Current Date by the Secretary of State of the
          State of Delaware;

     (e)  a certificate, issued by the Secretary of State of the State of
          Alabama to the effect that the Borrower is registered as a foreign
          limited partnership under the name "LYONDELL-CITGO Refining LP" in
          that State and a certificate issued as of a Current Date by such
          Secretary of State which certifies that the Borrower has not filed a
          certificate of cancellation of such registration;

     (f)  opinions of counsel for the Borrower, dated the Closing Date, in the
          forms of Exhibits 4.01(f)-1, 4.01(f)-2 and 4.01(f)-3;
<PAGE>

                                      -35-

     (g)  a certificate of a Responsible Officer, dated the Closing Date, in the
          form of Exhibit 4.01(g) to the effect, among others, that (i) the
          representations and warranties set forth in Article V are true and
          correct in all material respects as of the Closing Date (unless made
          as of a specific date as set forth therein) and (ii) no Default exists
          or would exist as a result of making a Loan on the Closing Date;

     (h)  evidence that, prior to or on the Closing Date:  (i) all outstanding
          Indebtedness and other amounts owing under the Existing Revolving
          Credit Agreement will have been paid and discharged in full; (ii) all
          outstanding Indebtedness and other amounts owing under the Existing
          Term Credit Agreement will be paid and discharged in full with (A) the
          proceeds of the Loans, and (B) after the proceeds of the Loans have
          been applied in full for such purpose, to the extent there remains any
          Indebtedness outstanding under the Existing Term Credit Agreement, the
          proceeds of the Revolving Loans or other available cash of the
          Borrower; (iii) all commitments to lend under each such credit
          agreement have been or will be terminated; and (iv) any Liens under
          each such credit agreement have been or will be released;

     (i)  (i) the results of a recent search of the Uniform Commercial Code and
          tax lien records in (A) the offices of the Secretary of State of the
          State of Texas, the Secretary of State of the State of Delaware and
          the Secretary of State of the State of Alabama and (B) the probate
          court in all counties in Alabama in which the Borrower's assets are
          located, which shall reveal no Liens on any of the property or assets
          of the Borrower, or any revenues, income or profits therefrom, except
          Permitted Liens, and shall otherwise be satisfactory to the Agent, and
          (ii) the results of a recent search of the real property records of
          Harris County, Texas, which shall reveal no Liens on the Houston
          Facility, except Permitted Liens, and shall otherwise be satisfactory
          to the Agent;

     (j)  an independent environmental report in form and substance satisfactory
          to the Agent from Pace Consultants, Inc.;

     (k)  receipt by the Agent and the Lenders of the (i) independent engineer's
          report by Pace Consultants, Inc. in form and substance satisfactory to
          the Agent and (ii) financial projections;

     (l)  payment of all fees and reasonable expenses of the Agent, including
          reasonable fees and expenses of common counsel to the Lenders, and
          fees of the Lenders that are due and payable on the Closing Date
          pursuant to this Agreement, any other Loan Document or the Fee Letter;

     (m)  a duly executed and delivered agreement between the Borrower and the
          Service Agent to the effect specified in Section 10.08;

     (n)  certified copies of the Contribution Agreement and the Refined
          Products Purchase Agreement and one certified copy, to be held by the
          Agent pursuant to its existing written safekeeping agreement with the
          Borrower and delivered with such copy,
<PAGE>

                                      -36-

          of each of the Crude Supply Agreement and the Supplemental Supply
          Agreement, in each case as amended, modified and supplemented and in
          effect on the Closing Date; and

     (o)  a certified copy of the executed Revolving Credit Agreement, in form
          and substance reasonably satisfactory to the Agent.

4.02 Further Conditions to Borrowing.  The obligation of any Lender to make its
     -------------------------------
     Loan on the occasion of the Borrowing is subject to the satisfaction of the
     following conditions precedent that on the date of the Borrowing:

     (a)  the Agent has received the Notice of Borrowing with respect to such
          Loan in accordance with this Agreement;

     (b)  the representations and warranties set forth in Article V (other than
          in Section 5.06(a)(ii)) are true and correct in all material respects
          (unless made as of a specific date as set forth therein);

     (c)  no Default exists or would exist as a result of making such Loan or
          the application of the proceeds thereof;

     (d)  such Loan will not contravene any Governmental Requirements applicable
          to such Lender;

     (e)  the Agent and such Lender are satisfied that the proceeds of such Loan
          will be used for purposes not inconsistent with Section 5.13;

     (f)  the Agent is satisfied that there shall not have occurred or become
          known:  (i) any material adverse condition or adverse change in or
          affecting the business, operations, property, condition (financial or
          otherwise) or prospects of the Borrower or its Subsidiaries, taken as
          a whole, or (ii) any material adverse condition or material adverse
          change in or affecting the business, operations, property or condition
          (financial or otherwise) of PDVSA or Petroleos y Gas, S.A., which
          would materially adversely change or affect the ability of such
          Person, as applicable, to perform its obligations under the
          Supplemental Supply Agreement or the Crude Supply Agreement, as
          applicable, in accordance with its terms; and

     (g)  the Agent is satisfied that as at the end of the fiscal quarter of the
          Borrower ending immediately prior to the Closing Date, the Borrower
          would have been in compliance with the applicable covenants set out in
          Section 7.16 of this Agreement if this Agreement had then been in
          effect.

4.03 Deemed Fulfilled Conditions.  Except to the extent that the Borrower has
     ---------------------------
     disclosed in the Notice of Borrowing, or in a subsequent notice given to
     the Agent prior to 5:00 P.M. (New York City time) on the Business Day
     before the requested date for the making of the Borrowing, that an
     applicable condition specified in this Article IV will not be fulfilled as
     of the requested time for the making of the Loans, the Borrower shall be
     deemed to have made a representation and warranty as of such time that the
     conditions
<PAGE>

                                      -37-

     specified in such clauses have been fulfilled, except that in no event
     shall the Borrower make or be deemed to make any representation or warranty
     as to Section 4.02(d). No such disclosure by the Borrower that a condition
     specified in this Article IV will not be fulfilled as of the requested time
     for the making of the requested Loans shall affect the right of each Lender
     not to make the Loans requested to be made by it if such condition has not
     been fulfilled at such time.

                                   ARTICLE V

                REPRESENTATIONS AND WARRANTIES OF THE BORROWER

In order to induce the Agent and each Lender to enter into this Agreement and to
make each Loan requested to be made by it, the Borrower represents and warrants
as follows (which representations and warranties will survive the delivery of
any Note and any other Loan Document and the making of any Loan).

5.01 Organization; Power; Qualification.  The Borrower (a) is a limited
     ----------------------------------
     partnership duly organized, validly existing and in good standing under the
     DRULPA and (b) has all the requisite power and authority under the DRULPA
     and its Charter Documents to own or lease and operate its properties and to
     carry on its business as now conducted and as proposed to be conducted. The
     Borrower is, and each Subsidiary is, duly registered, qualified or licensed
     and in good standing as a foreign limited liability company, a foreign
     limited partnership or a foreign corporation, as the case may be, in good
     standing, when applicable, in each jurisdiction in which it owns or leases
     property or proposes to own or lease property or in which the carrying on
     of its business as now conducted or as proposed to be conducted so
     requires, except to the extent that failures to be so registered, qualified
     or licensed individually or in the aggregate could not reasonably be
     expected to have a Material Adverse Effect. The Borrower is, and each
     Subsidiary is, duly registered, qualified or licensed and in good standing
     as a foreign limited liability company (if it is a limited liability
     company), a foreign limited partnership (if it is a partnership) or
     corporation (if it is a corporation) in good standing in all jurisdictions
     in which it owns or leases property or proposes to own or lease property or
     in which the carrying on of its business as now conducted or as proposed to
     be conducted so requires, except to the extent that failures to be so
     registered, qualified or licensed individually or in the aggregate could
     not reasonably be expected to have a Material Adverse Effect. As of the
     date of this Agreement, (a) Lyondell and CITGO collectively own, directly
     or indirectly, 100% of the partnership interests of the Borrower and have
     the right to vote such interests and to manage the business and affairs of
     the Borrower consistent with the terms and provisions of the Partnership
     Agreement and (b) the Borrower has no Subsidiaries.

5.02 Authorization; Enforceability; Absence of Conflicts; Required Consents.
     ----------------------------------------------------------------------
     The execution, delivery and performance by the Borrower of this Agreement
     and each other Loan Document to which it is a party, and the incurrence of
     the Indebtedness and other Obligations contemplated hereby and thereby, are
     within its power and authority under its Charter Documents and the DRULPA
     and have been duly authorized by all proceedings required under its Charter
     Documents and the DRULPA. This Agreement and the Notes
<PAGE>

                                      -38-

     have been, and each of the other Loan Documents to which the Borrower is a
     party when delivered to the Agent will have been, duly executed and
     delivered by the Borrower and are, or when so delivered will be, the legal,
     valid and binding obligations of the Borrower, enforceable against the
     Borrower in accordance with their respective terms, subject to applicable
     bankruptcy, insolvency, reorganization, moratorium or similar laws
     affecting the enforcement of creditors' rights generally and general
     principles of equity (regardless of whether such enforceability is
     considered in a proceeding in equity or at law). The execution, delivery
     and performance in accordance with their respective terms by the Borrower
     of the Loan Documents to which it is a party, and the incurrence of
     Indebtedness and other Obligations pursuant thereto, do not and will not
     (a) violate, breach or constitute a default under (i) the Charter Documents
     of the Borrower or any Subsidiary, (ii) any Governmental Requirement
     applicable to the Borrower or any Subsidiary or (iii) any other Material
     Agreement of the Borrower or any Subsidiary, (b) result in the acceleration
     or mandatory prepayment of any Indebtedness of the Borrower or any
     Subsidiary or afford any holder of any such Indebtedness the right to
     require the Borrower or any Subsidiary to redeem, purchase or otherwise
     acquire, reacquire or repay any such Indebtedness or (c) cause or result in
     the imposition of or afford any Person the right to obtain any Lien upon
     any property or assets of the Borrower or any Subsidiary (or upon any
     revenues, income or profits of the Borrower or any Subsidiary therefrom).
     No Governmental Approvals are required to be obtained, and no reports or
     notices to any Governmental Authority are required to be made, by the
     Borrower for the execution, delivery or performance by the Borrower of the
     Loan Documents or the enforcement against the Borrower of its obligations
     thereunder or the incurrence of the Indebtedness and other Obligations by
     the Borrower pursuant thereto.

5.03 Compliance With Laws.  Each of the Borrower and the Subsidiaries (a)
     --------------------
     possesses, and is in compliance with the terms and conditions of, all
     Governmental Approvals necessary for the ownership or lease and operation
     of its property and the carrying on of its business as now conducted or
     proposed to be conducted, except for such failures to possess and
     noncompliances that individually or in the aggregate could not reasonably
     be expected to have a Material Adverse Effect, and (b) is in compliance
     with all Governmental Requirements applicable to it or any of its
     properties or assets, including, without limitation, all applicable
     Governmental Requirements under ERISA and Environmental Laws, except for
     such noncompliances by the Borrower and the Subsidiaries that individually
     or in the aggregate could not reasonably be expected to have a Material
     Adverse Effect.

5.04 No Defaults.  No Default has occurred and is continuing. Neither the
     -----------
     Contribution Agreement nor any Supply or Purchase Contract has been
     terminated.

5.05 Litigation.  There is no Litigation pending or, to the knowledge of the
     ----------
     Borrower, threatened to which the Borrower or any Subsidiary is or may
     become a party that (a) questions or involves the validity or
     enforceability of any of the Loan Documents, (b) could reasonably be
     expected to have a Material Adverse Effect or (c) seeks (or reasonably may
     be expected to seek) to rescind, revoke, terminate, cancel, withdraw,
     suspend, modify or change adversely or withhold any Material Governmental
     Approval or any Material Agreement and in which the remedies sought or
     expected to be sought, if
<PAGE>

                                      -39-

     obtained, could reasonably be expected, individually or in the aggregate,
     to have a Material Adverse Effect.

5.06 Financial Statements; Disclosure.
     --------------------------------

     (a)  Financial Statements.
          --------------------

          (i)  The Financial Statements (including in each case the related
               schedules and notes) delivered to the Agent present fairly, in
               all material respects, the consolidated financial position of the
               Borrower and the Subsidiaries at the respective dates of the
               balance sheets included therein and the consolidated results of
               their operations and their consolidated cash flows for the
               respective periods set forth therein and have been prepared in
               accordance with GAAP (subject, in the case of interim financial
               statements, to normal year-end adjustments).  As of the date of
               any balance sheet included in such Financial Statements, neither
               the Borrower nor any Subsidiary then had any outstanding
               Indebtedness to any Person or any Material, individually or in
               the aggregate, liabilities of any kind (including contingent
               obligations, tax assessments or unusual forward or long-term
               commitments), or any Material unrealized or anticipated loss,
               required to be reflected in such Financial Statements or in the
               notes related thereto in accordance with GAAP which were not so
               reflected.

          (ii) Since December 31, 2000, no change has occurred in the business,
               operations, properties or assets, liabilities, condition
               (financial or otherwise) or results of operations of the Borrower
               that could reasonably be expected, either alone or together with
               all other such changes, to have a Material Adverse Effect.

     (b)  Disclosure.
          ----------

          (i)  As of the date hereof, all Information that has been made
               available to the Agent or any Lender by or on behalf of the
               Borrower prior to the date of this Agreement in connection with
               the transactions contemplated by this Agreement is, taken
               together, true and correct in all material respects (other than
               financial budgets and projections) and does not contain any
               untrue statement of a material fact or omit to state a material
               fact necessary in order to make the statements contained therein
               not materially misleading in light of the circumstances under
               which such statements were made.

          (ii) All Information that is made available after the date of this
               Agreement from time to time to the Agent or any Lender by or on
               behalf of the Borrower in connection with or pursuant to this
               Agreement, any other Loan Document or the transactions
               contemplated hereby or thereby will be, when made available and
               taken together, true and correct in all material respects (other
               than financial budgets and projections) and will
<PAGE>

                                      -40-

                 not contain any untrue statement of a material fact or omit to
                 state a material fact necessary in order to make the statements
                 contained therein not materially misleading in light of the
                 circumstances under which such statements are made.

          (iii)  All financial budgets and projections that have been or are
                 hereafter from time to time prepared by or on behalf of the
                 Borrower and made available to the Agent or any Lender pursuant
                 to or in connection with this Agreement, any other Loan
                 Document or the transactions contemplated hereby or thereby
                 have been and will be prepared and furnished to the Agent in
                 good faith and were and will be based on facts and assumptions
                 that are believed by the management of the Borrower to be
                 reasonable in light of the then current and foreseeable
                 business conditions of the Borrower and the Subsidiaries and
                 represented and will represent the Borrower's management's good
                 faith estimate of the consolidated projected financial
                 performance of the Borrower and the Subsidiaries based on the
                 information available to the Responsible Officers at the time
                 so furnished.

5.07 Taxes.  Each of the Borrower and each Subsidiary have filed or caused to be
     -----
     filed all Tax returns that are required to have been filed by or with
     respect to it in every jurisdiction and have paid all Taxes shown to be due
     and payable on such returns and all other Taxes payable by them by
     assessment, to the extent such Taxes have become due and payable and before
     they have become delinquent, except for (a) any Taxes the amount,
     applicability or validity of which is currently being contested in good
     faith by appropriate proceedings and with respect to which the Borrower has
     established adequate reserves on its books in accordance with GAAP or (b)
     Taxes, other than Federal Taxes and Taxes payable to Alabama and Texas
     Governmental Authorities, to which this clause (b) does not relate, the
     nonpayment of which individually or in the aggregate could not reasonably
     be expected to have a Material Adverse Effect. Neither the Borrower nor any
     Subsidiary is a party to any Tax sharing, Tax allocation or similar
     agreement except to the extent the Partnership Agreement may be deemed to
     be such an agreement.

5.08 Government Regulation.  Neither the Borrower nor any Subsidiary is (a) an
     ---------------------
     "investment company" or a company "controlled" by an "investment company,"
     as such terms are defined in the Investment Company Act of 1940, (b) a
     "holding company" or a "subsidiary" or an "affiliate" of a "holding
     company" or a "public utility," as such terms are defined in the Public
     Utility Holding Company Act of 1935, or (c) subject to any Governmental
     Requirement that regulates or otherwise limits its ability to issue
     promissory notes or securities (other than the Securities Act of 1933, the
     Trust Indenture Act of 1939 and state "blue sky" laws) or (in the case of
     the Borrower) to perform its obligations under the Loan Documents.

5.09 Employee Benefit Plans.
     ----------------------

     (a)  Neither the Borrower nor any ERISA Affiliate of the Borrower has
          incurred or is reasonably expected to incur any withdrawal liability
          under ERISA to, or with
<PAGE>

                                      -41-


          respect to, any Multiemployer Benefit Plan; the execution and delivery
          of this Agreement, the consummation of the transactions contemplated
          by this Agreement and the lending of funds pursuant to the provisions
          of this Agreement will not involve any Prohibited Transaction; no
          Benefit Plan established or maintained by the Borrower or any ERISA
          Affiliate of the Borrower, or to which the Borrower or any ERISA
          Affiliate of the Borrower has made contributions, had an Accumulated
          Funding Deficiency, whether or not waived, as of the last day of the
          most recently ended plan year of such Benefit Plan; no liability,
          individually or in the aggregate, to the PBGC (other than required
          insurance premiums, all of which that have become due have been paid)
          has been incurred and not satisfied in full by the Borrower or any
          ERISA Affiliate of the Borrower with respect to any Benefit Plan; and
          no event or condition has occurred, or is reasonably expected to
          occur, which presents a material risk of the termination of any
          Benefit Plan under circumstances which could result in a material
          liability to the Borrower, directly or indirectly or as a result of
          the liability of a current or former ERISA Affiliate of the Borrower;
          provided, however, for purposes of this Section 5.09(a), a liability
          --------  -------
          shall be considered material at any time if it could reasonably be
          expected, individually or in the aggregate with all other such
          liabilities, to result in a Material Adverse Effect.

     (b)  No Lien in favor of a Benefit Plan, a Welfare Plan, any Multiemployer
          Benefit Plan or the PBGC exists upon any property or assets of the
          Borrower or any Subsidiary or upon any revenues, income or profits of
          the Borrower or any Subsidiary therefrom nor to the knowledge of any
          Responsible Officer has there been any occurrence with respect to any
          such plan that, with or without the passage of time, could reasonably
          be expected to have a Material Adverse Effect.

5.10 Title to Property; Leases.  In each case, free and clear of all Liens
     -------------------------
     except for Permitted Liens, the Borrower has (a) good and indefeasible fee
     simple title to the Houston Facility and the Birmingport Facility and good
     and valid title to the "Ballpark" (the preceding and following quoted terms
     having the meanings given them by the Contribution Agreement as in effect
     on the date of this Agreement) and (b) sufficient title to the "Company
     Pipelines" and the "Easements" to enable the Borrower to use the Company
     Pipelines and Easements as the same were used by Lyondell immediately prior
     to July 1, 1993, and as the same have been used by the Borrower immediately
     prior to the date of this Agreement and as they are intended as of the date
     of this Agreement to be used by the Borrower after such date in the
     operation of the Refinery in a manner consistent with the Borrower's past
     practices, and any defect in title to any portion of the Company Pipelines
     and the Easements will not or could not reasonably be expected to have a
     Material Adverse Effect. In each case, free and clear of all Liens except
     for Permitted Liens, the Borrower has good and valid title to all its other
     tangible properties and assets that individually or in the aggregate are
     Material, and each Subsidiary has good and valid title to all its tangible
     properties and assets that individually or in the aggregate with the
     tangible properties and assets purported to be owned by all Subsidiaries
     are Material. All leases of property or assets by the Borrower and the
     Subsidiaries which individually or in the aggregate are Material are valid
     and subsisting and in full force and effect, the Borrower and the
     Subsidiaries enjoy the quiet and undisturbed possession of such
<PAGE>

                                      -42-

     properties and assets and no default exists under such leases, except for
     such lack of such enjoyment and defaults that individually or in the
     aggregate could not reasonably be expected to have a Material Adverse
     Effect.

5.11 Labor Matters.  There are no strikes, work stoppages, slowdowns or lockouts
     -------------
     pending or, to the knowledge of the Borrower, threatened against or
     involving the Borrower or any Subsidiary, other than those that
     individually or in the aggregate could not reasonably be expected to have a
     Material Adverse Effect.

5.12 Intellectual Property.  The Borrower owns or possesses the right to use,
     ---------------------
     and each Subsidiary owns or possesses the right to use, all Intellectual
     Property necessary to the conduct of its business as now conducted or
     proposed to be conducted, in each case free of any claims or infringements
     known to the Borrower, except for claims and infringements that
     individually or in the aggregate could not reasonably be expected to have a
     Material Adverse Effect.

5.13 Use of Proceeds.  None of the proceeds of the Loans will be used to
     ---------------
     purchase or carry (or refinance any borrowing the proceeds of which were
     used to purchase or carry) any "margin stock" within the meaning of
     Regulation T, U or X. Neither the Borrower nor any Subsidiary owns any
     margin stock. The Borrower does not intend to apply, nor will it apply, any
     part of the proceeds of any Loan in any manner or to any purpose that is
     unlawful or would involve a violation of any Governmental Requirement
     relating to the use of funds applicable to the Borrower or the transactions
     contemplated by the Loan Documents, including, without limitation,
     Regulation T, U or X. The proceeds of the Loans will be used solely to pay
     and discharge the Indebtedness and any other amounts owing under the
     Existing Term Credit Agreement.

                                  ARTICLE VI

                     FINANCIAL STATEMENTS AND INFORMATION

So long as any of the Commitments remain in effect and until payment in full of
the Loans and all other Obligations that have become due when the Loans have
been paid in full, unless compliance with the provisions of the following
Sections shall have been waived in writing by the Required Lenders, the Borrower
agrees as follows.

6.01 Reporting Requirements.  The Borrower will furnish to the Agent:
     ----------------------

     (a)  Quarterly Financial Statements.  As soon as available and in any event
          ------------------------------
          within 60 days after the end of each of the first three fiscal
          quarters of each of its fiscal years:

          (i)  a consolidated balance sheet of the Borrower and the Subsidiaries
               as of the end of such fiscal quarter, the related consolidated
               statements of income or operations and of cash flows for such
               fiscal quarter and for the portion of the fiscal year ended with
               such quarter, setting forth in each case in
<PAGE>

                                      -43-

                 comparative form the figures for the corresponding quarter and
                 the corresponding portion of the Borrower's previous fiscal
                 year, and the notes related thereto, prepared in accordance
                 with GAAP (subject to normal year-end adjustments); and

          (ii)   a certificate with respect thereto of a Responsible Officer or
                 the Manager, Accounting Services of the Borrower in the form of
                 Exhibit 6.01(a);

     (b)  Annual Financial Statements.  As soon as available and in any event
          ---------------------------
          within 120 days after the end of each of its fiscal years, commencing
          with the fiscal year ending December 31, 2001:

          (i)    a consolidated balance sheet of the Borrower and the
                 Subsidiaries as of the end of such fiscal year, the related
                 consolidated statements of income or operations and of cash
                 flows for such fiscal year, setting forth in each case in
                 comparative form the figures for the previous fiscal year, and
                 the notes related thereto, prepared in accordance with GAAP;

          (ii)   the audit report of PriceWaterhouseCoopers, or another
                 nationally recognized firm of independent certified public
                 accountants, on such consolidated financial statements, which
                 report shall be unqualified and state that in the opinion of
                 such accountants such consolidated financial statements present
                 fairly, in all material respects, the consolidated financial
                 position and results of operations and cash flows of the
                 Borrower and the Subsidiaries at the dates and for the periods
                 covered in such financial statements and have been prepared in
                 conformity with GAAP and that the examination of such
                 accountants in connection with such financial statements has
                 been made in accordance with generally accepted auditing
                 standards, and that such audit provides a reasonable basis for
                 such opinion under the circumstances; and

          (iii)  a certificate of a Responsible Officer or the Manager,
                 Accounting Services of the Borrower in the form of Exhibit
                 6.01(b);

     (c)  Notices and Information.  Promptly and in any event:
          -----------------------

          (i)    within five Business Days after (A) the approval by the
                 Partnership Governance Committee of any budget of any type
                 contemplated by Section 9.2 of the Partnership Agreement as in
                 effect on the date of this Agreement, or any amendment of or
                 supplement to any such budget, a copy of that budget, amendment
                 or supplement, (B) the beginning of any fiscal year, if the
                 Partnership Governance Committee has not approved for such
                 fiscal year any budget of any type contemplated by Section 9.2
                 of the Partnership Agreement as in effect on the date of this
                 Agreement before the beginning of such fiscal year, a copy of
                 (1) the proposed budget in the form most recently submitted to
                 the Partnership Governance Committee for approval and (2) if
                 such budget is the operating budget, the budget or
<PAGE>

                                      -44-

                 other plan pursuant to which the Borrower is then conducting
                 operations, and (C) the sending to the Partnership Governance
                 Committee of any business plan of the type contemplated by
                 Section 9.6 of the Partnership Agreement as in effect on the
                 date of this Agreement, a copy of that plan;

          (ii)   within five Business Days after the sending or receiving
                 thereof, copies of all Material notices and communications sent
                 by the Borrower or any Subsidiary to, or received by the
                 Borrower or any Subsidiary from, any Governmental Authority,
                 which notices in each case relate to matters that have had or
                 could reasonably be expected to have a Material Adverse Effect;

          (iii)  within five Business Days after the sending or receiving
                 thereof, copies of all notices of termination or material
                 default sent by the Borrower or any Subsidiary to, or received
                 by the Borrower or any Subsidiary from, any party to any
                 Material Agreement; and

          (iv)   within five Business Days after the effective date thereof, (A)
                 copies of all amendments and supplements to and modifications
                 of the Borrower's Charter Documents and (B) copies of all
                 amendments and supplements to and modifications of any Supply
                 or Purchase Contract;

     (d)  Defaults; ERISA; Material Adverse Effect.  Promptly and in any event
          ----------------------------------------
          within (i) five Business Days after the Borrower has knowledge of a
          Default, written notice of such Default which specifies the nature and
          duration thereof and what action the Borrower has taken, is taking or
          proposes to take with respect thereto, and (ii) within ten Business
          Days after the Borrower has knowledge of (A) the occurrence of any of
          the events described in Section 8.01(g)(i)-(v) whether or not a
          Default has occurred as a result thereof, written notice of such
          occurrence, (B) any material adverse change in the business,
          operations, properties, assets or conditions of the Borrower and the
          Subsidiaries, written notice of such change which specifies the nature
          thereof, or (C) the occurrence of any Reportable Event with respect to
          a Benefit Plan of the Borrower or any ERISA Affiliate of the Borrower,
          written notice of such Reportable Event which specifies the nature
          thereof;

     (e)  Litigation.  Promptly and in any event within five Business Days after
          ----------
          the Borrower has knowledge of the commencement of any Litigation
          involving the Borrower or any of the Subsidiaries or any of their
          respective property or assets which (i) if adversely determined, could
          reasonably be expected to have a Material Adverse Effect, (ii)
          questions or involves the validity or enforceability of any of the
          Loan Documents or (iii) if adversely determined, could reasonably be
          expected to result in the rescission, revocation, termination,
          cancellation, withdrawal, suspension, adverse modification of or
          change in or withholding of a Material Governmental Approval or any
          Material Agreement and such rescission, revocation, termination,
          cancellation, withdrawal, suspension, modification,
<PAGE>

                                      -45-

          change or withholding could reasonably be expected, individually or in
          the aggregate, to have a Material Adverse Effect, notice of such
          Litigation; and

     (f)  Requested Information.  Such information regarding the Loan Documents,
          ---------------------
          the Loans, the books and records, business, affairs, operations,
          property or assets, liabilities, condition (financial or otherwise) or
          results of operations of the Borrower and the Subsidiaries and other
          information concerning the Borrower and the Subsidiaries as the Agent
          or any Lender may from time to time reasonably request.

6.02 Books and Records.  The Borrower shall and shall cause each Subsidiary to
     -----------------
     keep and maintain a system of accounting established and administered in
     accordance with sound business practices and keep and maintain proper books
     of records and account.

6.03 Visits, Inspections and Discussions.  Subject to Section 10.04, the
     -----------------------------------
     Borrower shall and shall cause each Subsidiary to permit representatives
     (whether or not officers or employees) of any Lender, from time to time
     during the Borrower's normal daytime business hours, as often as may be
     reasonably requested and upon reasonable notice, to (a) visit any of the
     premises or property of the Borrower or such Subsidiary, (b) during any
     such visit, inspect, and verify the amount, character and condition of, any
     of the properties or assets of the Borrower or such Subsidiary, (c) during
     any such visit, review and make extracts from the books and records of the
     Borrower or such Subsidiary, and (d) during any such visit, discuss the
     affairs, finances and accounts of the Borrower or such Subsidiary with its
     officers, employees or its independent public accountants (and the Borrower
     hereby authorizes such accountants to discuss the finances and affairs of
     the Borrower and the Subsidiaries); provided, that in the case of any
     discussions pursuant to clause (d), a representative of the Borrower
     designated by a Responsible Officer must be present, it being understood
     and agreed by the Borrower that it will cooperate to cause this condition
     to be satisfied. Each Lender will pay the costs incurred by such Lender in
     exercising its rights under this Section 6.03; provided, however, that if a
                                                    --------  -------
     Lender exercises its rights under this Section 6.03 after the occurrence of
     an Event of Default, then the Borrower will reimburse such Lender for the
     reasonable costs incurred by such Lender in connection therewith promptly
     after such Lender's request therefor. Nothing in this Agreement or any
     other Loan Document does, is intended to or shall be construed as
     authorizing the Agent or any Lender to conduct or have conducted for its
     account or the account of any other Person after the date of this Agreement
     any environmental inspection or audit of the Refinery or the real property
     on which the Refinery is situated or any other plant, property or equipment
     or real property owned or leased by the Borrower on the date of this
     Agreement.

                                  ARTICLE VII

                               CERTAIN COVENANTS

So long as any of the Commitments remain in effect and until payment in full of
the Loans and all other Obligations that have become due when the Loans have
been paid in full, unless
<PAGE>

                                      -46-

compliance with the provisions of the following Sections shall have been waived
in writing by the Required Lenders, the Borrower agrees as follows.

7.01 Maintenance of Existence and Properties.
     ---------------------------------------

     (a)  The Borrower shall remain a limited partnership.  The Borrower shall
          cause each Subsidiary that is a limited liability company or a limited
          partnership when it becomes a Subsidiary to maintain its existence as
          a limited liability company or limited partnership, as the case may
          be, under the appropriate act under which it was originally formed.
          The Borrower shall cause each Subsidiary that is a corporation when it
          becomes a Subsidiary to maintain its existence as a corporation.  The
          Borrower shall and shall cause each Subsidiary to (i) be in good
          standing in each jurisdiction in which its ownership or lease of
          properties or its transaction of business requires it to be
          registered, qualified or licensed, except to the extent that failures
          to be so registered, qualified or licensed individually or in the
          aggregate by the Borrower and all Subsidiaries could not reasonably be
          expected to have a Material Adverse Effect, and (ii) keep and maintain
          all rights, franchises, licenses and privileges useful or necessary in
          the conduct of its business, except to the extent that the failure to
          keep and maintain such rights, franchises, licenses and privileges
          individually or in the aggregate by the Borrower and all Subsidiaries
          could not reasonably be expected to have a Material Adverse Effect.

     (b)  The Borrower shall and shall cause each Subsidiary to maintain and
          preserve all of its properties, owned or leased, that are necessary or
          useful in the conduct of its business in good repair, working order
          and condition, ordinary wear and tear excepted; provided, however,
                                                          --------  -------
          that no item of property need be so maintained and preserved if the
          failure to so maintain and preserve such item individually or in the
          aggregate with all other items not so maintained and preserved by the
          Borrower and all Subsidiaries could not reasonably be expected to have
          a Material Adverse Effect.

     (c)  The Borrower shall and shall cause each Subsidiary to maintain and
          protect its ownership of or rights to use all Intellectual Property
          owned or used by it in the conduct of its business as now conducted
          and proposed to be conducted, in each case free of all claims and
          infringements known to the Borrower, except for such failure so to
          maintain and protect that individually or in the aggregate respecting
          all Intellectual Property owned or used by the Borrower and all
          Subsidiaries could not reasonably be expected to have a Material
          Adverse Effect.

7.02 Compliance With Governmental Requirements.
     -----------------------------------------

     (a)  The Borrower will and will cause each Subsidiary to comply with all
          applicable Governmental Requirements and Governmental Approvals,
          including, without limitation, Governmental Requirements under ERISA
          and applicable Environmental Laws and applicable Governmental
          Approvals required by applicable Environmental Laws, except for such
          noncompliances that individually
<PAGE>

                                      -47-

          or in the aggregate could not reasonably be expected to have a
          Material Adverse Effect.

     (b)  The Borrower shall and shall cause each Subsidiary to maintain a
          policy which, in the reasonable business judgment of the Borrower, is
          reasonably designed to promote and monitor continued compliance by
          their respective operations and properties with applicable
          Environmental Laws and applicable Governmental Approvals required by
          applicable Environmental Laws.

7.03 Payment of Taxes and Claims.  The Borrower shall and shall cause each
     ---------------------------
     Subsidiary to pay and discharge or cause to be paid and discharged promptly
     when due all Taxes imposed upon it or its revenues, income, profits or
     capital or in respect of any of its properties or assets before the same
     shall become delinquent or in default, as well as all lawful claims for
     labor, materials and supplies or otherwise that, if unpaid, might give rise
     to a Lien (other than a Permitted Lien) on such properties or assets or any
     part thereof; provided, however, that such payment and discharge by such
     Person shall not be required with respect to any such Tax or claim so long
     as the failure to make such payment and effect such discharge, together
     with all other failures then and theretofore permitted by this clause,
     could not reasonably be expected to have a Material Adverse Effect.

7.04 Insurance; Casualty.
     -------------------

     (a)  The Borrower shall and shall cause each Subsidiary to maintain
          insurance with financially sound and reputable insurance companies or
          associations in such amounts and covering such risks as is usually
          carried by Persons engaged in similar businesses and owning similar
          properties in the same general areas in which the Borrower or such
          Subsidiary operates, including, without limitation, public liability
          insurance, casualty insurance against loss or damage to its properties
          and assets and business interruption insurance.

     (b)  In the case of any damage or casualty to any property, plant or
          equipment of the Borrower or any Subsidiary, the Borrower will and
          will cause such Subsidiary, as determined by the sound business
          judgment of the Borrower, to pursue diligently claims available to it
          under casualty or other applicable insurance policies (other than
          business interruption insurance policies) relating to such property,
          plant or equipment and shall use the proceeds of such policies to (i)
          finance or refinance (through reimbursement of such Person's treasury
          or otherwise) in whole or in part the cost of repairing or replacing
          such property, plant or equipment promptly and in a good workmanlike
          manner, (ii) otherwise reinvest the proceeds in property, plant or
          equipment for any of the lubes, aromatics or refining businesses of
          the Borrower or, in the case of proceeds received in respect of the
          property, plant or equipment of such Subsidiary, the business of the
          Borrower or such Subsidiary, or (iii) prepay Loans pursuant to Section
          3.03.

7.05 Liens.  The Borrower shall not and shall not permit any Subsidiary to
     -----
     create, assume or permit to exist any Lien on any of its properties or
     assets other than Permitted Liens.
<PAGE>

                                      -48-

7.06 Restricted Payments.  The Borrower shall not and shall not permit any
     -------------------
     Subsidiary to make any Restricted Payment, including any distribution to
     the Partners, whether pursuant to or in accordance with Section 7.2, 7.4 or
     7.5 of the Partnership Agreement or otherwise, except:

     (a)  so long as no Event of Default exists or would exist after giving
          effect thereto, the Borrower may make distributions to the Partners
          pursuant to and in accordance with Sections 7.2, 7.4 and 7.5 of the
          Partnership Agreement, including, without limitation, distributions in
          satisfaction of Distribution Debt and advances pursuant to Section 7.5
          of the Partnership Agreement;

     (b)  each Wholly-Owned Subsidiary may make Restricted Payments to the
          Borrower and other Wholly-Owned Subsidiaries;

     (c)  the Borrower may make scheduled payments of principal, fees and other
          charges to the holders of Permitted Replacement Debt when due in
          accordance with its terms (including terms of subordination);

     (d)  with respect to Qualified Subordinated Debt that is not Permitted
          Replacement Debt:

          (i)  if such Indebtedness is Affiliate Indebtedness of the Borrower,
               the Borrower may make scheduled payments of interest thereon when
               due in accordance with its terms (including terms of
               subordination); and

          (ii) if such Indebtedness is not Affiliate Indebtedness of the
               Borrower, the Borrower may make scheduled payments of principal,
               interest, fees and other charges to the holders of such Qualified
               Subordinated Debt when due in accordance with its terms
               (including terms of subordination);

     Notwithstanding the foregoing clause (d) of this Section 7.06, so long as
     no Event of Default exists or would exist after giving effect thereto, the
     Borrower may make scheduled payments of interest on Affiliated Indebtedness
     incurred prior to December 31, 1998 pursuant to Section 6.4(D) or 6.3 of
     the Amended and Restated Limited Liability Company Regulations of the
     Borrower dated July 1, 1993 as in effect on December 30, 1998.  Nothing in
     this Section 7.06 restricts the creation of Distribution Debt in accordance
     with Section 7.3.(C) of the Partnership Agreement.

7.07 Limitations on Mergers, Etc.  The Borrower shall not and shall not permit
     ---------------------------
     any Subsidiary to merge or consolidate with or into any Person or convey,
     transfer, lease or otherwise dispose of all or substantially all of its
     properties and assets in a single transaction or series of transactions;
     provided, that any Subsidiary may merge or consolidate with or into or
     --------
     transfer all or substantially all its properties and assets to the Borrower
     or any other Subsidiary so long as no Default exists or would exist after
     giving effect thereto.
<PAGE>

                                      -49-

7.08 Disposition of Assets.  The Borrower shall not and shall not permit any
     ---------------------
     Subsidiary to sell, lease, license, transfer or otherwise dispose of any of
     its properties or assets (or any right to receive revenues, proceeds,
     income or profits therefrom), except (a) asset sales or licensing of
     technology and dispositions of inventory, in each case in the ordinary
     course of business, (b) dispositions of any property not required to be
     maintained or preserved pursuant to Section 7.01(b), (c) dispositions of
     any property or assets by a Subsidiary to the Borrower or a Subsidiary or
     loans or advances of funds by the Borrower to a Subsidiary, (d) any sale or
     assignment of delinquent accounts receivable or other trade receivables (or
     notes evidencing such receivables) to a collection agency or similar
     service in the ordinary course of business as now conducted, (e) Permitted
     Liens, (f) Restricted Payments permitted by Section 7.06 and (g) in
     transactions permitted by Section 7.07.

7.09 Indebtedness.  The Borrower shall not and shall not permit any Subsidiary
     ------------
     to incur, create, assume or suffer to exist any Indebtedness, except:

     (a)  (i) the Loans and (ii) in an aggregate amount not to exceed
          $70,000,000 at any time outstanding, the Revolving Loans and (if any)
          the Revolving Credit Agreement Letter of Credit Obligations;

     (b)  Permitted Replacement Debt;

     (c)  Qualified Subordinated Debt;

     (d)  Distribution Debt;

     (e)  unsecured Indebtedness of any Subsidiary owing to the Borrower or to
          any other Subsidiary;

     (f)  obligations of the Borrower and all Subsidiaries in an aggregate
          amount, without duplication of amounts, not to exceed $10,000,000 at
          any time outstanding in respect of Capital Leases and Indebtedness
          consisting of secured purchase money Indebtedness incurred by the
          Borrower or any Subsidiary in the ordinary course of business;

     (g)  (i)  obligations in respect of Permitted Interest Rate Protection
               Agreements, other than pursuant to a Guaranty, having a
               designated notional amount not exceeding, at the time entered
               into, 100% of the Total Commitment then in effect, having a
               maturity not later than the Termination Date and providing for
               regularly scheduled net settlement payments based upon nominal
               interest amounts computed on the basis of fixed or floating rates
               of interest; and

          (ii) obligations in respect of Permitted Interest Rate Protection
               Agreements, other than pursuant to a Guaranty, having a
               designated notional amount not exceeding, at the time entered
               into, 100% of the total commitment then in effect of the lenders
               parties to the Revolving Credit Agreement to make
<PAGE>

                                      -50-

               Revolving Loans, having a maturity not later than the Revolving
               Loan Termination Date and providing for regularly scheduled net
               settlement payments based upon nominal interest amounts computed
               on the basis of fixed or floating rates of interest;

     (h)  unsecured Indebtedness of the Borrower, in an aggregate amount not to
          exceed $20,000,000 at any time outstanding, incurred to finance
          "Capital Enhancement Projects" (as defined in Section 9.2.(B) of the
          Partnership Agreement) of the Borrower in the conduct of the
          Borrower's business as permitted by Section 7.14; and

     (i)  additional unsecured Indebtedness of the Borrower, other than pursuant
          to a Guaranty, in an aggregate amount not to exceed $20,000,000 at any
          time outstanding.

7.10 Transactions With Affiliates.  The Borrower shall not and shall not permit
     ----------------------------
     any Subsidiary to effect any transaction with any Affiliate of the Borrower
     except (a) transactions contemplated by the Partnership Agreement and the
     Supply or Purchase Contracts, (b) transactions permitted by and in
     accordance with Sections 5.6 and 5.7 of the Partnership Agreement, (c)
     transactions between or among the Borrower and any one or more Subsidiaries
     or between or among Subsidiaries (except transactions not otherwise
     permitted by this Article) and (d) any transaction to the extent not
     otherwise restricted or prohibited by this Article on terms that are no
     less favorable to the Borrower or such Subsidiary, as the case may be, than
     would be available in a comparable transaction with a Person that is not an
     Affiliate of the Borrower.

7.11 Limitation on Restrictive Covenants.  The Borrower shall not and shall not
     -----------------------------------
     permit any Subsidiary to permit to exist any consensual restriction
     limiting the ability (whether by covenant, event of default, subordination
     or otherwise) of any Subsidiary to (a) pay dividends or make any other
     distributions on its Capital Securities held by the Borrower or any other
     Subsidiary, (b) pay any obligation owed to the Borrower or any other
     Subsidiary, (c) make any loans or advances to or investments in the
     Borrower or in any other Subsidiary, (d) transfer any of its property or
     assets to the Borrower or any other Subsidiary, (e) incur any Indebtedness
     to the Borrower or (f) create any Lien upon its property or assets whether
     now owned or hereafter acquired or upon any revenues, income or profits
     therefrom.

7.12 Issuance or Disposition of Capital Securities.  The Borrower shall not
     ---------------------------------------------
     permit any Subsidiary to issue any Capital Securities, and the Borrower
     shall not and shall not permit any Subsidiary to sell, transfer or
     otherwise dispose of any Capital Securities of any Subsidiary, except (a)
     any issuance by a Subsidiary of Capital Securities to the Borrower or a
     Wholly-Owned Subsidiary and (b) any disposition by the Borrower or any
     Subsidiary of any Capital Securities of a Wholly-Owned Subsidiary to the
     Borrower or another Wholly-Owned Subsidiary.

7.13 Investments.  The Borrower shall not and shall not permit any Subsidiary to
     -----------
     purchase or acquire obligations or Capital Securities of, or any other
     interest in, or make loans to, or
<PAGE>

                                      -51-

      otherwise enter into joint venture or similar arrangements with, purchase
      or acquire in a single transaction or series of transactions all or
      substantially all of the properties or assets of, or any business unit of,
      any Person, except: (a) Permitted Investments; (b) temporary loans and
      advances by the Borrower or any Subsidiary to any of its officers or other
      employees which are made in the ordinary course of business for travel,
      entertainment or other business expenses; (c) current accounts receivable
      of the Borrower or any Subsidiary which arise in the ordinary course of
      its business and adjustments offered to account debtors (other than
      Affiliates of the Borrower) with respect thereto which are made in the
      ordinary course of its business; (d) cooperative arrangements entered into
      by the Borrower in the ordinary course of its business of operating the
      Refinery with other Persons engaged in operations in the Houston Ship
      Channel area in connection with their compliance with applicable
      Governmental Requirements relating to environmental, health and safety
      matters, including loans or advances of funds or equipment to, or
      acquisitions of the Capital Securities or the funding of, Gulf Coast Waste
      Disposal Authority, Clean Channel Association, Inc. or any similar entity;
      and (e) acquisitions permitted by Section 7.07.

7.14  Business.  The Borrower shall not, directly or indirectly, make any
      --------
      material change in the nature or type of the Borrower's business as
      carried on by it as of the date of this Agreement except such changes as
      are incidental or reasonably related to such business, and the Borrower
      shall not permit any Subsidiary to engage in any business other than any
      type of business in which the Borrower is permitted to engage under this
      Section 7.14.

7.15  Fiscal Year.  The Borrower shall not and shall not permit any Subsidiary
      -----------
      to change its fiscal year from the calendar year.

7.16  Financial Covenants.
      -------------------

      (a)  Debt to Total Capitalization Ratio.  The Borrower shall not permit
           ----------------------------------
           the Debt to Total Capitalization Ratio at the end of any fiscal
           quarter of the Borrower to be greater than 0.60 to 1.00.

      (b)  Coverage Ratio.  The Borrower shall not permit the Coverage Ratio at
           --------------
           the end of any fiscal quarter of the Borrower to be less than 2.00 to
           1.00.

      (c)  Consolidated Net Worth.  The Borrower shall not permit Consolidated
           ----------------------
           Net Worth to be less than $555,000,000 at the end of any fiscal
           quarter of the Borrower.

      (d)  Average Debt to EBITDA Ratio.  The Borrower shall not permit the
           ----------------------------
           Average Debt to EBITDA Ratio at the end of any fiscal quarter of the
           Borrower to be greater than 4.0 to 1.0.
<PAGE>

                                      -52-

7.17  Certain Material Agreements.
      ---------------------------

      (a)  The Borrower shall not, and shall not permit any Subsidiary to:

           (i)   amend, modify, repudiate, supplement or terminate prior to the
                 scheduled termination date (or any effective extension of such
                 date) the Crude Supply Agreement or the Refined Products
                 Purchase Agreement, except to the extent that any such
                 amendment, modification or supplement, together with all
                 previous amendments, modifications and supplements covered by
                 this clause (i), could not reasonably be expected to have a
                 Material Adverse Effect;

           (ii)  without the prior written consent of the Required Lenders
                 (which consent shall not be unreasonably withheld), amend,
                 modify or supplement any provision of Sections 2.1, 2.3, 2.4,
                 2.12, 2.13 and 5.7 of the Crude Supply Agreement (or any
                 provision of such Sections as incorporated in the Supplemental
                 Supply Agreement) in a manner that is detrimental to the
                 Borrower or any Subsidiary, other than such amendments or
                 modifications of or supplements to such provisions concerning
                 day-to-day performance as are customarily waived or modified on
                 a temporary basis in the ordinary course of business or
                 pursuant to industry custom or practice; or

           (iii) without the prior written consent of the Required Lenders
                 (which consent shall not be unreasonably withheld), otherwise
                 amend, modify, repudiate, supplement or terminate prior to the
                 scheduled termination date (or any effective extension of such
                 date) the Supplemental Supply Agreement;

           provided that all adjustments contemplated by any Supply or Purchase
           --------
           Contract as in effect on the date hereof that are made utilizing the
           methodology, or in accordance with the parameters, set forth therein
           (including in any schedules or exhibits thereto), shall not
           constitute amendments, modifications or supplements for purposes of
           this Section 7.17(a); and provided, further, that any amendments or
                                     --------  -------
           modifications of or supplements to the Crude Supply Agreement
           permitted or consented to under this Section 7.17(a) shall be deemed
           to be permitted, and consented to, amendments, modifications or
           supplements of the Supplemental Supply Agreement.

     (b)   The Borrower shall not amend, modify or supplement its Certificate of
           Limited Partnership, except to the extent that any such amendment,
           modification or supplement, together with all previous amendments,
           modifications and supplements, could not reasonably be expected to
           have a Material Adverse Effect.

     (c)   The Borrower shall not amend, modify or supplement (i) any of
           Sections 2.3.(A), 2.3.(C), 2.3.(D), 5.2, 5.3 or 6.14 of the
           Contribution Agreement or Schedule 2.3.(D) to the Contribution
           Agreement insofar as any such Section or such Schedule relates to the
           Lyondell Obligations (it being understood that if any term defined
           elsewhere in the Contribution Agreement or the Schedules or
<PAGE>

                                      -53-

           Exhibits to the Contribution Agreement and used (directly or by
           inclusion in such a defined term used) in any of such enumerated
           Sections or Schedule is amended, modified or supplemented in a manner
           materially detrimental to the Lenders with respect to any of such
           Sections or such Schedule, such amendment, modification or supplement
           will be deemed an amendment or modification of or a supplement to
           each of the enumerated Sections or Schedule in which it is used)
           without the prior written consent of the Required Lenders (which
           consent shall not be unreasonably withheld) or (ii) any other term or
           condition of the Contribution Agreement in such a manner that the
           effect thereof, together with the effect of all previous amendments
           and modifications of and supplements to such other terms and
           conditions, could reasonably be expected to have a Material Adverse
           Effect.

7.18  Use of Proceeds.  The Borrower shall not use or permit the use of all or
      ---------------
      any portion of the proceeds of any Loan for any purpose other than as
      represented and warranted in Section 5.13.

                                 ARTICLE VIII

                                    DEFAULT

8.01  Events of Default.  Each of the following shall constitute an "Event of
      -----------------
      Default":

      (a)  The Borrower fails to pay any principal of any Note when the same
           becomes due and payable; or the Borrower fails to pay any interest on
           any Note, any fees required by Section 2.04 or any other Loan
           Document or any other Obligation when the same becomes due and
           payable and such failure continues for five days;

      (b)  Any representation or warranty made by the Borrower or any of its
           officers in any Loan Document shall prove to have been incorrect or
           misleading in any material respect when made or deemed made pursuant
           to this Agreement;

      (c)  The Borrower shall fail to perform or observe: (i) any term,
           covenant, condition or agreement contained in Section 6.01(e),
           7.01(a) (as to maintenance of existence by the Borrower), 7.02(a) (as
           to Environmental Laws), 7.05 (except as to Liens for state and local
           taxes payable to Governmental Authorities in states other than
           Alabama and Texas), 7.07, 7.08, 7.09 (other than clause (f) thereof),
           7.10, 7.11, 7.12, 7.14, 7.16, 7.17 or 7.18; (ii) any term, covenant,
           condition or agreement contained in Section 7.06 or 7.13 and such
           failure continues unremedied for a period of five Business Days after
           the earlier to occur of notice of such failure being given to the
           Borrower by the Agent or the Borrower otherwise obtaining knowledge
           of such failure; or (iii) any term, covenant, condition or agreement
           contained in this Agreement or any other Loan Document (other than a
           term, covenant, condition or agreement a failure in the performance
           or observance of which is elsewhere specifically dealt with in this
           Section 8.01) and such failure continues unremedied for a period of
           30 days after the earlier to occur of notice of
<PAGE>

                                      -54-

           such failure being given to the Borrower by the Agent or the Borrower
           otherwise obtaining knowledge of such failure;

     (d)   (i) The Borrower or any Subsidiary fails to pay when due any
           principal of or interest on any Indebtedness of such Person (other
           than the Loans) having a then outstanding principal amount in excess
           of $15,000,000, (ii) the maturity of any such Indebtedness, in whole
           or in part, is accelerated, or any such Indebtedness, in whole or in
           part, is required to be prepaid or purchased prior to the stated
           maturity thereof, in accordance with the provisions of any document,
           instrument or agreement evidencing, providing for the creation of or
           concerning such Indebtedness, or (iii) (A) any event has occurred and
           is continuing that permits (or, with the passage of time or the
           giving of notice or both, would permit) any holder or holders of such
           Indebtedness, any trustee or agent acting on behalf of such holder or
           holders or any other Person to accelerate such maturity or require
           any such prepayment or purchase and (B) if the document, instrument
           or agreement evidencing, providing for the creation of or concerning
           such Indebtedness provides for a grace period for such event, such
           event is not cured prior to the end of such grace period; provided,
                                                                     --------
           that this Section 8.01(d) does not apply to (a) Indebtedness of the
           type referred to in clause (a)(iii) or (iv) of the definition
           thereof, (b) any liability referred to in clause (b) of the
           definition thereof which does not constitute Indebtedness of the type
           referred to in clause (a)(i) or (ii) of the definition thereof or (c)
           Distribution Debt;

     (e)   (i) The Borrower or any Subsidiary (A) makes a general assignment for
           the benefit of creditors, (B) pursuant to or within the meaning of
           any Bankruptcy Law, (1) commences a voluntary case or proceeding or
           (2) consents to the appointment of, or the taking possession by, any
           Custodian of it or any substantial part of its assets, (C) takes any
           limited partnership or corporate action to authorize any of the
           actions set forth above in this Section 8.01(e) or (D) admits in
           writing its inability to pay its debts as they become due or its
           belief that it will become unable generally to pay its debts as they
           become due; or (ii) (A) an involuntary case or proceeding is
           commenced against the Borrower or any Subsidiary under and within the
           meaning of any Bankruptcy Law and such involuntary case or proceeding
           continues undismissed or unstayed for a period of 60 days after it is
           commenced, (B) a Custodian is appointed of it or any substantial part
           of its assets in any such involuntary case or proceeding or (C) an
           order for relief is entered against the Borrower or any Subsidiary in
           any such involuntary case or proceeding; or (iii) any Partner applies
           to any court of competent jurisdiction for the dissolution of the
           Borrower or an event of dissolution (within the meaning of Section 11
           of the Partnership Agreement or the DRULPA) occurs and the business
           of the Borrower is not continued pursuant to the vote of the
           requisite Partners within 90 days after such event of dissolution or
           the Borrower is not otherwise reconstituted in accordance with
           Section 11.10 of the Partnership Agreement within 90 days after such
           event of dissolution;

     (f)   Judgments, orders or decrees are entered against the Borrower or any
           one or more of the Subsidiaries by one or more courts of competent
           jurisdiction the cost of
<PAGE>

                                      -55-

           which to the Borrower and the Subsidiaries (without duplication of
           amounts and without including attorney's fees and other expenses
           incurred by the Borrower or any Subsidiary defending against or
           litigating in connection with any such judgment, order or decree)
           aggregates in excess of $15,000,000, and such judgments, orders and
           decrees continue undismissed, unbonded, undischarged or unstayed for
           a period of 30 days;

     (g)   (i) Any Termination Event occurs with respect to any Benefit Plan of
           the Borrower or any Subsidiary or any of their respective ERISA
           Affiliates, (ii) any Accumulated Funding Deficiency, whether or not
           waived, exists with respect to any such Benefit Plan, (iii) the
           Borrower, any Subsidiary or any of their respective ERISA Affiliates
           is in "default" (as defined in Section 4219(c)(5) of ERISA) with
           respect to payments owing to any Multiemployer Benefit Plan as a
           result of such Person's complete or partial withdrawal (as described
           in Section 4203 or 4205 of ERISA) therefrom, (iv) the Borrower, any
           Subsidiary or any of their respective ERISA Affiliates fails to pay
           when due an amount that is payable by it to the PBGC or to any such
           Benefit Plan under Title IV of ERISA, (v) a proceeding is instituted
           by a fiduciary of any such Benefit Plan against the Borrower, any
           Subsidiary or any of their respective ERISA Affiliates to enforce
           Section 515 of ERISA and such proceeding has not been dismissed
           within 30 days thereafter, (vi) any Multiemployer Benefit Plan to
           which the Borrower or any of its ERISA Affiliates is or has made or
           accrued an obligation to make contributions shall reorganize or
           become insolvent or (vii) any other event or condition occurs or
           exists with respect to any such Benefit Plan, except that no event or
           condition referred to in clauses (i) through (vii) above shall
           constitute an Event of Default if it, together with all other such
           events or conditions at the time existing, has not subjected and
           could not reasonably be expected to subject the Borrower or any
           Subsidiary to any liability in excess of $25,000,000 or otherwise,
           alone or in the aggregate, could not reasonably be expected to have a
           Material Adverse Effect;

     (h)   The Borrower or any Subsidiary (or any Affiliate of the Borrower)
           institutes any proceedings seeking to establish that any provision of
           any Loan Document is invalid, not binding or unenforceable;

     (i)   (i)   Any Supply or Purchase Contract is terminated for any reason by
                 any party thereto prior to its stated termination date or any
                 effective extension of such date, or any party to any Supply or
                 Purchase Contract shall fail to perform or observe any term,
                 covenant, condition or agreement contained therein to be
                 performed or observed by it and such failure, or such failure
                 together with all other failures by any party or parties to any
                 such agreements, could reasonably be expected to have a
                 Material Adverse Effect;

           (ii)  any other Material Agreement is terminated for any reason by
                 any party thereto prior to its stated termination date or any
                 effective extension of such date, or any party to any such
                 Material Agreement shall fail to
<PAGE>

                                      -56-

                 perform or observe any term, covenant, condition or agreement
                 contained therein to be performed or observed by it and such
                 termination or failure, or such termination or failure together
                 with all other such terminations and failures by any party or
                 parties to any such agreements, could reasonably be expected to
                 have a Material Adverse Effect, and such termination or failure
                 continues unremedied for a period of 30 days after the earlier
                 to occur of notice of such termination or failure being given
                 to the Borrower by the Agent or the Borrower otherwise
                 obtaining knowledge of such termination or failure;

           (iii) (A) any of Sections 3.1.(B), 5.6, 5.7, 6.2, 6.5, 6.6, 6.7, 7.2,
                 7.3, 7.4 and 7.5 of the Partnership Agreement is amended,
                 modified or supplemented (directly or indirectly by means of an
                 amendment to the Borrower's Partnership Agreement or
                 Certificate of Limited Partnership)(it being understood that if
                 any term defined elsewhere in the Partnership Agreement or the
                 Exhibits to the Partnership Agreement and used (directly or by
                 inclusion in such a defined term) in any of such enumerated
                 Sections is amended, modified or supplemented in a manner
                 materially detrimental to the Lenders with respect to any of
                 such Sections, such amendment, modification or supplement will
                 be deemed an amendment or modification of or supplement to each
                 of the enumerated Sections in which it is used) without the
                 prior written consent of the Required Lenders (which consent
                 shall not be unreasonably withheld) or (B) any other term or
                 condition of the Partnership Agreement is amended, modified or
                 supplemented (directly or indirectly as aforesaid) in such a
                 manner that the effect thereof, together with the effect of all
                 previous amendments and modifications of and supplements to
                 such other term or conditions, could reasonably be expected to
                 have a Material Adverse Effect;

           (iv)  any Partner fails to pay or make any cash contribution or loan
                 to the Borrower required by the Partnership Agreement and such
                 failure continues unremedied for a period of three days;

           (v)   any Partner materially breaches or violates any other term,
                 covenant, condition or agreement contained in the Partnership
                 Agreement to be performed or observed by it and such breach or
                 violation continues unremedied for a period of 90 days after
                 the nondefaulting Partner gives written notice thereof to the
                 defaulting Partner pursuant to Section 11.2 of the Partnership
                 Agreement; or

           (vi)  (A) Lyondell fails to perform any of the Lyondell Obligations,
                 (B) such failure continues unremedied for a period of 90 days
                 after the Borrower or CRIC gives Lyondell written notice
                 thereof and (C) such failure, if continued, together with all
                 then continuing such failures, could reasonably be expected to
                 have a Material Adverse Effect;

     (j)   A Change of Control occurs;
<PAGE>

                                      -57-

     (k)   (i)   the Borrower or any ERISA Affiliate of the Borrower does any of
                 the following if, individually or in the aggregate, any of the
                 following could reasonably be expected to have a Material
                 Adverse Effect: (A) fails to make any payments when due to any
                 Multiemployer Benefit Plan that the Borrower or such ERISA
                 Affiliate of the Borrower is required to make under any
                 agreement relating to such Multiemployer Benefit Plan or any
                 Governmental Requirement pertaining thereto; (B) incurs
                 withdrawal liability under ERISA to a Multiemployer Benefit
                 Plan; (C) voluntarily terminates or, in the case of a
                 "substantial employer" as defined in Section 4001(a)(2) of
                 ERISA, withdraws from any Benefit Plan or Multiple Employer
                 Plan if such termination or withdrawal could reasonably result
                 in the imposition of a Lien upon the properties or assets of
                 the Borrower or any Subsidiary (or upon the revenues, income or
                 profits of the Borrower or any Subsidiary therefrom) under
                 Section 4068 of ERISA; (D) fails to make any required
                 contribution when due to any Plan subject to Section 412(n) of
                 the Code that, with the passage of time, could result in a Lien
                 upon the properties or assets of the Borrower or any Subsidiary
                 (or the revenues, income or profits of the Borrower or any
                 Subsidiary therefrom); (E) adopts any amendment to a Benefit
                 Plan the effect of which is to increase the "current liability"
                 under the Benefit Plan as defined in Section 302(d)(7) of
                 ERISA; (F) incurs any liability to the PBGC or to a trustee
                 appointed under Section 4042(b) of ERISA (other than required
                 insurance premiums); or (G) acts or fails to act, and, as a
                 result thereof, an event similar to any of those referred to in
                 clauses (A) through (F) above could occur under the
                 Governmental Requirements of a foreign country;

           (ii)  the Borrower or any ERISA Affiliate of the Borrower permits the
                 present value of all benefits (irrespective of whether vested)
                 under all Benefit Plans that have assets less than benefits
                 (irrespective of whether vested) to exceed the "current value,"
                 as defined in Section 3(26) of ERISA, of the assets of such
                 Benefit Plans by an aggregate amount which could reasonably be
                 expected to have a Material Adverse Effect; or

           (iii) the Borrower or any ERISA Affiliate does any of the following
                 if, in the aggregate, the effect of such actions could
                 reasonably be expected to have a Material Adverse Effect: (A)
                 permits to exist any Accumulated Funding Deficiency, whether or
                 not waived, with respect to any Benefit Plan; (B) applies for
                 or is granted a funding waiver under Section 302 of ERISA or
                 Section 412 of the Code; (C) permits to occur any Reportable
                 Event with respect to any Benefit Plan or Multiple Employer
                 Plan, which Reportable Event is likely to result in the
                 termination of such Benefit Plan or Multiple Employer Plan for
                 purposes of Title IV of ERISA; (D) permits to be filed a notice
                 of intent to terminate a Benefit Plan or Multiple Employer Plan
                 under Section 4041(c) of ERISA; or (E) permits a complete or
                 partial withdrawal from a Multiemployer Benefit Plan;
<PAGE>

                                      -58-

      (l)  (i) either LRC or Lyondell LP shall transfer its interest as a
           Partner of the Borrower in accordance with the terms of the
           Partnership Agreement to a Person other than an "Affiliate" (as
           defined in the Crude Supply Agreement) of Lyondell or (ii) neither
           CITGO nor any of its "Affiliates" (as defined in the Crude Supply
           Agreement) is a Partner of the Borrower; or

      (m)  notwithstanding any provision of Article VII (including, without
           limitation Section 7.06) to the contrary:

           (i)  the Borrower makes any payment of interest on any Qualified
                Subordinated Debt which is Affiliate Indebtedness and which is
                not Permitted Replacement Debt (such Indebtedness, "AIQSD"); or

           (ii) the Borrower makes any distribution of Distributable Cash (as
                defined in the Partnership Agreement) to the Partners for any
                period in excess of (A) Distributable Cash for such period less
                (B) interest payable on any AIQSD during such period;

           provided that Partners may apply distributions otherwise permitted by
           --------
           the Loan Documents to payments in respect of Qualified Subordinated
           Debt to the extent that such payment would not result in any increase
           in the aggregate distribution otherwise permitted by the Loan
           Documents.

8.02  Remedies.  During the continuance of any Event of Default (other than one
      --------
      specified in Section 8.01(e)), the Agent, on notice to the Borrower, may
      (but shall not be obligated to), and if so directed by the Required
      Lenders shall, do any or all of the following: (a) declare, in whole or,
      from time to time, in part, the Obligations to be, and the Obligations
      shall thereupon and to that extent become, due and payable; and (b)
      terminate, in whole or, from time to time, in part, the Commitments;
      provided, however, that during the continuance of an Event of Default
      --------  -------
      specified in Section 8.01(l), the Agent shall not be entitled to declare,
      in whole or in any part, the Obligations to be due and payable, or to
      exercise any of the other rights or remedies set forth in this Section
      8.02, solely by reason of such continuance, and none of the Agent or any
      Lender shall be entitled to exercise any of its rights or remedies under
      Section 8.04 or 10.02(c) or the proviso to the second sentence of Section
      6.03 solely by reason of such continuance, unless and until the date (the
      "Supply Termination Date"), if any, the Borrower receives a written notice
      of termination of the Crude Supply Agreement by the "Supplier" (as defined
      in the Crude Supply Agreement) pursuant to Section 3.2(c)(iv) or (v) of
      the Crude Supply Agreement, as applicable, by reason of the occurrence of
      such Event of Default; and provided, further, that any Event of Default
      specified in Section 8.01(l) which occurs shall be automatically cured and
      no longer continuing upon the earlier to occur prior to the Supply
      Termination Date, if any, applicable thereto of (i) receipt by the
      Borrower of written evidence reasonably satisfactory to the Required
      Lenders of such Supplier's waiver of its right to terminate the Crude
      Supply Agreement pursuant to Section 3.2(c)(iv) or (v) thereof, as
      applicable, by reason of the occurrence of such Event of Default or (ii)
      the passage of the 90-day period provided under such Section 3.2(c)(iv) or
      (v), as applicable, without such Supplier's having delivered such
      Supplier's notice of
<PAGE>

                                      -59-

      termination of the Crude Supply Agreement by reason of the occurrence of
      such Event of Default. Upon the occurrence of an Event of Default
      specified in Section 8.01(e), automatically and without any notice to the
      Borrower, (a) the principal of and accrued and unpaid interest on the
      Notes and all other Obligations then owing under the Loan Documents shall
      be due and payable and (b) the Commitments shall terminate. Presentment,
      demand, protest, notice of protest, notice of default, notice of dishonor,
      notice of intent to accelerate and all other notices of any kind (other
      than the notice provided for in the first sentence of this Section 8.02)
      are hereby expressly waived by the Borrower.

8.03  Application of Proceeds.  During the continuance of any Event of Default,
      -----------------------
      all payments in respect of the Obligations received by the Agent may, and
      shall on the acceleration of the Obligations pursuant to Section 8.01(e),
      be applied by the Agent to the Obligations, as follows: (a) first, to pay
      interest on and the principal of any portion of any Loan which the Agent
      has advanced on behalf of any Lender; (b) second, to pay Obligations in
      respect of any fees, expense reimbursements or indemnities then due to the
      Agent; (c) third, to pay Obligations in respect of any fees, expense
      reimbursements or indemnities then due to the Lenders; (d) fourth, to pay
      interest due in respect of the Loans; (e) fifth, to pay or prepay
      principal outstanding on the Loans; (f) sixth, to pay all Obligations owed
      to Lenders in respect of any Interest Rate Protection Agreements
      respecting the Loans; and (g) seventh, to pay all other Obligations, or in
      such other order and manner as the Agent shall determine, and the Borrower
      shall remain liable to the Agent and the Lenders for any deficiency. If
      the Agent has funds available to apply to a portion of, but not all of,
      one of the amounts described in clauses (a) through (g) above, then the
      Agent shall apply such funds to the applicable parties in proportion to
      the amounts to which such parties would have been entitled if the entire
      amount described in any such clause had been available.

8.04  Set-Off; Suspension of Payment and Performance.  The Agent and each Lender
      ----------------------------------------------
      is hereby authorized by the Borrower, to the extent permitted under
      Governmental Requirements, at any time and from time to time, without
      notice, during any Event of Default, to set-off against, and to
      appropriate and apply to the payment of, the Obligations owing to such
      Person (whether matured or unmatured, fixed or contingent or liquidated or
      unliquidated), any and all liabilities owing by such Person to the
      Borrower (whether payable in Dollars or any other currency, whether
      matured or unmatured and, in the case of liabilities that are deposits,
      whether general or special, time or demand and however evidenced and
      whether maintained at a branch or office located within or without the
      United States). The rights of the Agent and each Lender under this Section
      8.04 are in addition to and cumulative of all other rights and remedies
      (including, without limitation, rights pursuant to any banker's lien)
      which such Person may have.

8.05  Sharing of Recoveries.  The Agent and each Lender agrees that if, for any
      ---------------------
      reason (whether voluntary, involuntary, through the exercise of any right
      of set-off or otherwise), such Person receives payment of a proportion of
      the aggregate amount of Obligations due and payable to it hereunder that
      is greater than its allocable share thereof, then the Person receiving
      such proportionately greater payment shall purchase participations (which
      it shall be deemed to have done simultaneously upon the receipt of
<PAGE>

                                      -60-

      such payment) in the rights of the applicable Persons hereunder so that
      all such recoveries with respect to the Obligations (net of costs of
      collection) shall be properly allocated among the Persons entitled to the
      same; provided, however, that if all or part of such proportionately
      greater payment received by the purchasing Person is thereafter recovered
      by or on behalf of the Borrower from such Person, such purchases shall be
      rescinded and the purchase prices paid for such participations shall be
      returned to such Person to the extent of such recovery, but without
      interest (unless the purchasing Person is required to pay interest on the
      amount recovered to the Person recovering such amount, in which case the
      selling Lender shall be required to pay interest at a like rate). The
      Borrower expressly consents to the foregoing arrangements and agrees that
      any holder of a participation in any rights hereunder so purchased or
      acquired pursuant to this Section 8.05 shall, with respect to such
      participation, to the extent permitted under Governmental Requirements, be
      entitled to all of the rights of a Lender and may exercise any and all
      rights of set-off with respect to such participation as fully as though
      the Borrower were directly indebted to the holder of such participation
      for Obligations in the amount of such participation.

                                  ARTICLE IX

                                   THE AGENT

9.01  Appointment and Powers.  Each Lender hereby irrevocably appoints and
      ----------------------
      authorizes the Agent to act as the agent for such Lender under this
      Agreement with such powers as are delegated to the Agent by the terms
      thereof, together with such other powers as are reasonably incidental
      thereto. The Agent's duties shall be purely ministerial and the Agent
      shall have no duties or responsibilities except those expressly set forth
      herein. The Agent shall not be required under any circumstances to take
      any action that, in its judgment, (a) is contrary to any provision of the
      Loan Documents or Governmental Requirements or (b) would expose it to any
      liability or expense against which it has not been indemnified to its
      satisfaction. The Agent, by reason of its serving as an agent, shall not
      be a trustee or other fiduciary for any Lender.

9.02  Limitation on Agent's Liability.  Neither the Agent nor any of its
      -------------------------------
      directors, officers, employees or agents shall be liable or responsible to
      any Lender for any action taken or omitted to be taken by them under or in
      connection with the Loan Documents, except for its or their own gross
      negligence or willful misconduct. The Agent shall not be responsible to
      any Lender for (a) any recitals, statements, representations or warranties
      contained in the Loan Documents or in any certificate or other document
      referred to or provided for in, or received by any Lender under, the Loan
      Documents, (b) the validity, effectiveness or enforceability of the Loan
      Documents or any such certificate or other document or (c) any failure by
      the Borrower to perform any of its obligations under the Loan Documents.
      The Agent may employ agents and attorneys-in-fact and shall not be
      responsible to any Lender for the negligence or misconduct of any such
      agents or attorneys-in-fact so long as the Agent was not grossly negligent
      in selecting or directing such agents or attorneys-in-fact. The Agent
      shall be entitled to rely upon any certification, notice or other
      communication (including any thereof by telephone, telex,
<PAGE>

                                      -61-

      telecopier, telegram or cable) believed by it to be genuine and correct
      and to have been signed or given by or on behalf of the proper Person or
      Persons, and upon advice and statements of legal counsel, independent
      accountants or other experts selected in good faith by the Agent. As to
      any matters not expressly provided for by the Loan Documents, the Agent
      shall in all cases be fully protected as to the Lenders in acting, or in
      refraining from acting, under the Loan Documents in accordance with
      instructions signed by the Required Lenders, and such instructions of the
      Required Lenders and any action taken or failure to act pursuant thereto
      shall be binding on all of the Lenders.

9.03  Defaults.  The Agent shall not be deemed to have knowledge of the
      --------
      occurrence of a Default unless the Agent has received notice from a Lender
      or the Borrower specifying such Default and stating that such notice is a
      "Notice of Default." If the Agent receives such a notice of the occurrence
      of a Default, then the Agent shall give prompt notice thereof to the
      Lenders. In the event of any Default, the Agent shall take such action
      with respect to such Default as shall be directed by the Required Lenders.
      Unless and until the Agent has received such directions, in the event of
      any Default, the Agent may (but shall not be obligated to) take such
      action, or refrain from taking such action, with respect to such Default
      as it deems advisable in the best interests of the Lenders.

9.04  Rights as a Lender.  The Agent shall, in its capacity as a Lender, have
      ------------------
      the same rights and powers under the Loan Documents as any other Lender
      and may exercise the same as though it were not acting as the Agent, and
      the term "Lender" or "Lenders" shall include such Person in its individual
      capacity. Each Person acting as the Agent and its Affiliates may (without
      having to account therefor to any Lender) accept deposits from, lend money
      to and generally engage in any kind of banking, trust or other business
      with the Borrower, the Subsidiaries and the Borrower's Affiliates as if it
      were not acting as the Agent, and such Person and its Affiliates may
      accept fees and other consideration from the Borrower, the Subsidiaries
      and the Borrower's Affiliates for services in connection with the Loan
      Documents or otherwise without having to account for the same to the
      Lenders.

9.05  Indemnification.  The Lenders agree to indemnify the Agent (to the extent
      ---------------
      not reimbursed by the Borrower under the Loan Documents), ratably on the
      basis of the outstanding Loans of the Lenders (or, if no Loans are at the
      time outstanding, ratably on the basis of their respective Commitments),
      for any and all liabilities, losses, damages, penalties, actions,
      judgments, suits, costs, expenses or disbursements of any kind and nature
      whatsoever that may be imposed on, incurred by or asserted against the
      Agent in its capacity as agent (including, without limitation, the costs
      and expenses that the Borrower is obligated to pay under the Loan
      Documents) in any way connected with, relating to or arising out of the
      Loan Documents or any other documents contemplated thereby or referred to
      therein or the transactions contemplated thereby or the enforcement of any
      of the terms thereof or of any such other documents, provided that no
                                                           --------
      Lender shall be liable for any of the foregoing to the extent they arise
      from gross negligence or willful misconduct by the Agent. The obligations
      of the Lenders under this Section 9.05 shall survive the termination of
      this Agreement and the payment in full of the Obligations.

9.06  Non-Reliance on Agent and Other Lenders.  Each Lender agrees that it has
      ---------------------------------------
      made and will continue to make, independently and without reliance on the
      Agent or any other
<PAGE>

                                      -62-

      Lender, and based on such documents and information as it deems
      appropriate, its own credit analysis of the Borrower and the Subsidiaries,
      and its own decision to enter into the Loan Documents and to take or
      refrain from taking any action in connection therewith. The Agent shall
      not be required to keep itself informed as to the performance or
      observance by the Borrower of the Loan Documents or any other document
      referred to or provided for therein or to inspect the properties or books
      of the Borrower or any Subsidiary. Except for notices, reports and other
      documents and information expressly required to be furnished to the
      Lenders by the Agent under the Loan Documents, the Agent shall have no
      obligation to provide any Lender with any information concerning the
      business, status or condition of the Borrower or any Subsidiary or the
      Loan Documents which may come into the possession of the Agent or any of
      its Affiliates.

9.07  Resignation of the Agent.  Subject to the appointment and acceptance of a
      ------------------------
      successor Agent as provided below, the Agent may resign at any time by
      giving notice thereof to the Lenders and the Borrower. Upon receipt of any
      such notice of resignation, the Required Lenders may, with the consent of
      the Borrower (which consent shall not be unreasonably withheld), appoint
      any Eligible Assignee as the successor Agent. If no successor Agent is so
      appointed by the Required Lenders and accepts such appointment within 30
      days after the resigning Agent's giving of notice of resignation, then the
      resigning Agent may, on behalf of the Lenders and with the consent of the
      Borrower (which consent shall not be unreasonably withheld), appoint any
      Eligible Assignee as the successor Agent. Effective on the acceptance by
      any Person of its appointment as a successor Agent, such Person shall
      succeed to and become vested with all the rights, powers, privileges,
      duties and obligations of the resigning Agent and the resigning Agent
      shall be discharged from its duties and obligations as Agent under the
      Loan Documents. After any resigning Agent's resignation as Agent, the
      provisions of this Article IX shall continue in effect for its benefit in
      respect of any actions taken or omitted to be taken by it while it was
      acting as the Agent.

9.08  CERTAIN INTENTIONS.  THE LENDERS SEVERALLY ACKNOWLEDGE TO THE AGENT THAT
      ------------------
      THE PROVISIONS OF THIS ARTICLE IX WHICH RELEASE THE AGENT FROM LIABILITY,
      LIMIT THE AGENT'S LIABILITY, DUTIES OR RESPONSIBILITIES OR PROVIDE FOR THE
      INDEMNIFICATION OF THE AGENT BY THE LENDERS, INCLUDING, WITHOUT
      LIMITATION, SECTIONS 9.01, 9.02, 9.03, 9.05 AND 9.06, ARE INTENDED BY THEM
      TO SAVE AND HOLD THE AGENT HARMLESS FROM THE CONSEQUENCES OF ITS OWN
      NEGLIGENCE (OTHER THAN GROSS NEGLIGENCE OR WILLFUL MISCONDUCT).

                                   ARTICLE X

                                 MISCELLANEOUS

10.01 Notices and Deliveries.
      ----------------------

      (a) Manner of Delivery; Addresses.  All notices, communications and
          -----------------------------
          materials (including all Information) to be given or delivered
          pursuant to or in connection
<PAGE>

                                      -63-

          with the Loan Documents shall be given or delivered in writing (which
          shall include telecopier transmissions) and shall be delivered at the
          following respective addresses and telecopier and telephone numbers
          and to the attention of the following individuals or departments:

          (i)   if to the Borrower, to it at:

                12000 Lawndale
                Houston, Texas 77252-2451
                Telecopier No.: (713) 321-6900
                Telephone No.: (713) 321-5307
                Attention: Vice President - General Manager of Planning and
                Administration

                with a copy to:

                Lyondell Chemical Company
                One Houston Center
                1221 McKinney
                Houston, TX 77010
                Telecopier No.: (713) 652-4598
                Telephone No.: (713) 309-7688
                Attention: Assistant Treasurer
                Banking and Foreign Exchange

          (ii)  if to the Agent, to it at:

                Eleven Madison Avenue
                13/th/ Floor
                New York, NY 10010
                Telephone No.: 212-325-9935
                Telecopier No.: 212-325-8304
                Attention: Kateline Martinez

          (iii) if to any Lender, to it at the address or telecopier number and
                to the attention of the individual or department set forth below
                such Lender's name under the heading "Notice Address" on Annex A
                or, in the case of a Lender that becomes a Lender pursuant to an
                assignment, set forth under the heading "Notice Address" in the
                Assignment Agreement effecting such assignment;

          or at such other address or telecopier number or to the attention of
          such other individual or department as the party to which such
          information pertains may hereafter specify for the purpose in a notice
          specifically captioned "Notice of Change of Address" given to each of
          the other parties to this Agreement.
<PAGE>

                                      -64-

      (b) Effectiveness.  Each notice and communication and any material to be
          -------------
          given or delivered pursuant to the Loan Documents shall be deemed so
          given or delivered (i) if sent by registered or certified mail,
          postage prepaid, return receipt requested, on the third Business Day
          after such notice, communication or material, addressed as above
          provided, is delivered to a United States post office and a receipt
          therefor is issued thereby, (ii) if sent by any other means of
          physical delivery, when such notice, communication or material is
          delivered to the appropriate address as above provided, and (iii) if
          sent by telecopier, when such notice, communication or material is
          transmitted to the appropriate telecopier number as above provided and
          is received at such number.

10.02 Expenses; Indemnification.  Whether or not any Loans are made hereunder,
      -------------------------
      the Borrower shall, promptly, and in any event within 15 Business Days
      after receiving a reasonably detailed statement setting forth the amount
      and nature thereof:

      (a) to the extent not otherwise paid pursuant to Section 3.06(b), pay or
          reimburse the Agent and each Lender for all transfer, documentary,
          stamp and similar taxes, and all recording and filing taxes and fees
          payable in connection with, arising out of or in any way related to,
          the execution, delivery and performance of the Loan Documents or the
          making of the Loans, excluding any such taxes imposed as a result of
          the assignment (otherwise than pursuant to Section 3.07) of any Loan
          or portion thereof;

      (b) pay or reimburse the Agent for all reasonable out-of-pocket costs and
          expenses (including reasonable fees and disbursements of legal counsel
          collectively retained by the Agent and appraisers, accountants and
          other experts employed or retained by the Agent) incurred by the Agent
          in connection with, arising out of or in any way related to (i) the
          negotiation, preparation, execution and delivery of (A) the Loan
          Documents and (B) whether or not executed and delivered, any waiver or
          consent thereunder, amendment thereof or supplement thereto or, in the
          case of this Agreement, any assignment pursuant to Section 3.07, (ii)
          the administration of and any operations under the Loan Documents,
          (iii) consulting with respect to any matter in any way arising out of,
          related to or in connection with the Loan Documents, including (A) the
          protection, preservation, exercise or enforcement of any of the rights
          of the Agent or the Lenders in, under or related to the Loan Documents
          during a Default or (B) the performance of any of the obligations of
          the Agent or the Lenders under or related to the Loan Documents or
          (iv) protecting, preserving, exercising or enforcing any of the rights
          of the Agent or the Lenders in, under or related to the Loan Documents
          during a Default;

      (c) when an Event of Default has occurred and is occurring, pay or
          reimburse each Lender for all reasonable costs and expenses (including
          reasonable fees and disbursements of legal counsel and other experts
          employed or retained by such Lender) at such time incurred by such
          Lender in connection with, arising out of or in any way related to
          protecting, preserving, exercising or enforcing during an Event of
          Default any of its rights in, under or related to the Loan Documents;
<PAGE>

                                      -65-

      (d) (i) indemnify each Indemnified Person against, and hold each
          Indemnified Person harmless from, any and all losses, claims, damages,
          liabilities, obligations, penalties, actions, judgments, suits,
          proceedings, disbursements, costs and expenses of any kind or nature
          whatsoever which may be imposed on, incurred by or asserted against
          such Indemnified Person (including, without limitation, the reasonable
          fees charged and disbursements made by counsel to such Indemnified
          Person, whether or not suit is brought) or to which such Indemnified
          Person may become subject arising out of or in connection with or in
          any way relating to or resulting from any actual or threatened
          Litigation relating to this Agreement (including the use of the
          proceeds of the Loans), the other Loan Documents or any transaction
          contemplated by any of the foregoing, whether or not such Indemnified
          Person is a party thereto, whether direct or indirect, whether based
          on any federal, state or local law or regulation, securities or
          commercial law or regulation or under common law or in equity or on
          contract, tort or otherwise, and whether or not the transactions
          contemplated hereby are ever consummated, and (ii) reimburse each
          Indemnified Person, on demand, for all out-of-pocket costs and
          expenses (including, without limitation, the reasonable fees and
          disbursements of counsel) incurred in connection with any of the
          foregoing, including, without limitation, costs and expenses incurred
          in connection with investigating, defending or participating in any
          legal proceeding relating to any of the foregoing; provided, however,
                                                             --------  -------
          that the Borrower shall not indemnify or hold harmless any Indemnified
          Person from, or reimburse any Indemnified Person for, or waive or
          release any claim for, any losses, claims, damages, liabilities,
          obligations, penalties, actions, judgments, suits, proceedings,
          disbursements, costs or expenses arising out of the gross negligence
          or willful misconduct of such Indemnified Person; PROVIDED, FURTHER,
          THAT IT IS THE EXPRESS INTENTION OF THE BORROWER TO INDEMNIFY EACH
          INDEMNIFIED PERSON AGAINST THE CONSEQUENCES OF ITS OWN OR ANY OTHER
          INDEMNIFIED PARTY'S NEGLIGENCE (OTHER THAN GROSS NEGLIGENCE), WHETHER
          SUCH NEGLIGENCE BE SOLE, JOINT OR CONCURRENT OR ACTIVE OR PASSIVE.
          The Borrower shall not make any claim against any Indemnified Person
          for any special, indirect or consequential damages in respect of any
          breach or wrongful conduct (whether the claim therefor is based on
          contract, tort or duty imposed by law) in connection with, arising out
          of or in any way related to the transactions contemplated by, and the
          relationship established by, the Loan Documents, or any act, omission
          or event occurring in connection therewith; and the Borrower hereby
          waives, releases and agrees not to sue upon any such claim for any
          such damages, whether or not accrued and whether or not known or
          suspected to exist in its favor; and

      (e) indemnify each Indemnified Person against, and hold each Indemnified
          Person harmless from, any and all losses, claims, damages,
          liabilities, obligations, penalties, actions, judgments, suits,
          proceedings, disbursements, costs and expenses of any kind or nature
          whatsoever which may at any time be imposed on, incurred by or
          asserted against such Indemnified Person (including, without
          limitation, the reasonable fees charged and disbursements made by
          counsel to such Indemnified Person, whether or not suit is brought)
          arising out of or in
<PAGE>

                                      -66-

          connection with or in any way relating to or resulting from (A) any
          Loan Document, including, without limitation, the use of the proceeds
          of the Loans or the relationship created by any Loan Document between
          or among the Borrower and the Agent and the Lenders and (B), with
          respect to or as a direct or indirect result of any acts or omissions
          to act by the Borrower or any Subsidiary or any Affiliate of the
          Borrower under any Environmental Law or with respect to or as a direct
          or indirect result of the manufacture, processing, distribution, use,
          treatment, storage, disposal, transport, handling, release, discharge,
          emission or disposal of pollutants, contaminants, chemicals, toxic or
          hazardous substances, industrial or hazardous wastes or noxious noises
          or odors or presence of any of the foregoing on, under, from or about
          its real property; provided, however, that the Borrower shall not
                             --------  -------
          indemnify or hold harmless any Indemnified Person from, or reimburse
          any Indemnified Person for, or waive or release any claim for, any
          losses, claims, damages, liabilities, obligations, penalties, actions,
          judgments, suits, disbursements, costs or expenses arising out of the
          gross negligence or willful misconduct of such Indemnified Person;
          PROVIDED, FURTHER, THAT IT IS THE EXPRESS INTENTION OF THE BORROWER TO
          --------  -------
          INDEMNIFY EACH INDEMNIFIED PERSON AGAINST THE CONSEQUENCES OF ITS OWN
          OR ANY OTHER INDEMNIFIED PERSON'S NEGLIGENCE (OTHER THAN GROSS
          NEGLIGENCE), WHETHER SUCH NEGLIGENCE BE SOLE, JOINT OR CONCURRENT OR
          ACTIVE OR PASSIVE.

      The obligations of the Borrower under this Section 10.02 shall survive the
      termination of this Agreement and the payment in full of the Obligations.

10.03 Rights Cumulative.  Each of the rights and remedies of the Agent and the
      -----------------
      Lenders under the Loan Documents shall be in addition to all of their
      other rights and remedies under the Loan Documents and Governmental
      Requirements, including, without limitation, the Fraudulent Conveyance Act
      of Delaware, and nothing in the Loan Documents shall be construed as
      limiting any such rights or remedies.

10.04 Confidentiality.
      ---------------

      (a) The Agent and each Lender each agrees that (i) it and its
          Representatives will keep confidential all non-public information
          concerning the Borrower or the Partners which is furnished to it by or
          on behalf of the Borrower, the Partners or any of their respective
          Representatives ("Confidential Information") and, except with the
          specific prior written consent of the Borrower or as otherwise
          expressly permitted by the terms of this Section 10.04, will not
          disclose any Confidential Information, (ii) it and its Representatives
          will not use Confidential Information except for the purposes of this
          Agreement and the Loans or other extensions of credit contemplated
          hereby, (iii) all recipients of Confidential Information will be
          informed of the confidential nature of the Confidential Information
          and instructed not to make use of the Confidential Information in a
          manner inconsistent herewith, (iv) it and its Representatives will not
          make available any Confidential Information to other Persons for use
          or copying and (v) prior to its disclosure of Confidential Information
          to any of its Outside Representatives, such Outside
<PAGE>

                                      -67-

          Representative shall have executed and delivered a written
          confidentiality agreement for the Borrower's benefit substantially in
          the form of Exhibit 10.04(c)-3 in respect of the Confidential
          Information, an executed original of which it will provide promptly to
          the Borrower. Each of the Agent and each Lender further agrees that in
          all events (i) the Crude Supply Agreement and the Supplemental Supply
          Agreement shall be Confidential Information, (ii) no copies may be
          made of either such agreement and (iii) any inspection of either such
          agreement will be restricted to a limited number of its
          Representatives and to the premises of the Borrower or the Agent.

     (b)  The term "Confidential Information" does not include information that
          any Receiving Party can show (i) has become generally available to the
          public other than as a result of disclosure or other fault by a
          Receiving Party or its Representatives or (ii) (A) was already in the
          possession of a Receiving Party or its Representatives prior to its
          disclosure to such Person by the Borrower, a Partner or any of their
          respective Representatives or (B) became available to the Receiving
          Party or its Representatives, in each case under this clause (ii),
          free of any restrictions as to its disclosure and from a source, other
          than the Borrower, the Partners or any of their respective
          Representatives, which to the knowledge of the Receiving Party or the
          relevant Representative was not then prohibited from transmitting the
          information to the Receiving Party or its Representatives by a
          contractual, legal, fiduciary or other obligation.

     (c)  Each of the Agent and each Lender also agrees to disclose Confidential
          Information only to (i) its Representatives requiring such material
          for the purpose of administering this Agreement and the transactions
          contemplated hereby, and (ii) all or any of the Agent, the Lenders,
          any Prospective Assignees and Prospective Participants; provided,
          however, that prior to such disclosure to any Prospective Assignee or
          Prospective Participant, a Representative of such Prospective Assignee
          or Prospective Participant shall have executed and delivered a written
          confidentiality agreement for the Borrower's benefit substantially in
          the form of Exhibit 10.04(c)-1 (in the case of any Prospective
          Assignee) or Exhibit 10.04(c)-2 (in the case of any Prospective
          Participant) in respect of the Confidential Information on behalf of
          such Eligible Assignee, and prior to such disclosure to any Outside
          Representative of such Eligible Assignee, such Outside Representative
          shall have executed and delivered a written confidentiality agreement
          for the Borrower's benefit substantially in the form of Exhibit
          10.04(c)-3 in respect of the Confidential Information, and each Lender
          agrees to provide promptly to the Borrower an executed original of
          each such confidentiality agreement entered into by its Prospective
          Assignee or Prospective Participant, as the case may be, and such
          Person's Outside Representative, if any.

     (d)  The foregoing will not prohibit the disclosure of any Confidential
          Information by the Agent or any Lender if and to the extent that (i)
          such disclosure may be required by any Governmental Authority having
          regulatory authority over it, or (ii) it or any of its Representatives
          may become legally compelled by court order, subpoena or summons, or
          by deposition, interrogatory, request for documents or
<PAGE>

                                      -68-

          otherwise in connection with Litigation, or by similar legal process,
          including, without limitation, a civil investigative demand having the
          same force and effect as a subpoena. However, in any event described
          in clause (ii) above, the Agent and each Lender each agrees that it or
          its Representatives, as the case may be, prior to such disclosure will
          endeavor in good faith (except to the extent prohibited by any
          Governmental Requirement from doing so) to provide the Borrower with
          prompt notice of such request so that the Borrower may seek an
          appropriate protective order or other appropriate remedy or waive
          compliance with the provisions of this Section 10.04(d). In the event
          that such protective order or other remedy is not obtained, or that
          the Borrower grants such a waiver hereunder, the Agent and each Lender
          or its Representatives, as the case may be, will in all events
          endeavor in good faith to obtain reliable assurance that confidential
          treatment will be accorded any Confidential Information so furnished.

      (e) The Agent and each Lender will only be responsible for any breach of
          this Agreement by it or its Representatives, other than its Outside
          Representatives who have executed and delivered a written
          confidentiality agreement in accordance with this Section 10.04.

      (f) No failure or delay by the Borrower in exercising any right, power or
          privilege under this Section 10.04 shall operate as a waiver thereof,
          nor shall any single or partial exercise thereof preclude any other or
          further exercise thereof or the exercise of any other right, power or
          privilege under this Section 10.04.

10.05 Amendments; Waivers. Any term, covenant, agreement or condition of this
      -------------------
      Agreement or the Notes may be amended, and any right thereunder may be
      waived, if, but only if, such amendment or waiver is in writing and is
      signed by the Required Lenders and, if the rights and duties of the Agent
      are affected thereby, by the Agent and by the Borrower; provided, however,
      that no such amendment or waiver shall be effective, unless in writing and
      signed by each Lender affected thereby, to the extent it (a) changes the
      several nature or the amount (except pursuant to Section 2.03) or extends
      the term of such Lender's Commitment, (b) reduces the principal of or the
      rate of interest on the Loans or Notes, or any fees payable pursuant to
      any Loan Document, (c) postpones any date fixed for, or reduces the amount
      of, any mandatory payment or prepayment of principal of or interest on the
      Loans, Notes or any fees payable pursuant to any Loan Document, (d) waives
      any condition precedent to the initial Loans, (e) waives the payment of
      any amounts payable to any Lender pursuant to Section 3.04, 3.05 or 3.06
      or (f) waives or amends Section 8.05, this Section 10.05 or Section 10.12.
      Unless otherwise specified in such waiver, a waiver of any right under any
      Loan Document shall be effective only in the specific instance and for the
      specific purpose for which it is given. No election not to exercise,
      failure to exercise or delay in exercising any right, nor any course of
      dealing or performance, shall operate as a waiver of any right of the
      Agent or any Lender under the Loan Documents or Governmental Requirements,
      nor shall any single or partial exercise of any such right preclude any
      other or further exercise thereof or the exercise of any other right of
      the Agent or any Lender under the Loan Documents or Governmental
      Requirements.
<PAGE>

                                      -69-

10.06 Assignments and Participations.
      ------------------------------

      (a) Assignments.  Each Lender may from time to time, in accordance with
          -----------
          applicable Governmental Requirements, assign any or all of its rights
          and obligations under the Loan Documents to one or more Eligible
          Assignees; provided, however, that no such assignment shall be
                     --------  -------
          effective unless and until:  (i) the Borrower shall have received
          prior notice of such assignment; (ii) except in the case of an
          assignment to a Lender or an Affiliate of a Lender, the Agent shall
          have given its written consent to such assignment (which consent shall
          not be unreasonably withheld); (iii) except in the case of an
          assignment to a Lender or an Affiliate of a Lender, the amount of the
          Commitment of the assigning Lender subject to each such assignment
          (determined as of the date the Assignment Agreement respecting such
          assignment is delivered to the Agent) shall not be less than
          $10,000,000; and (iv) the parties to each such assignment shall have
          executed and delivered to the Agent an Assignment Agreement together
          with an assignment fee of $3,000 (provided, that no such fee shall be
                                            --------
          payable if the assignment is to an Affiliate of such Lender) payable
          to the Agent.  Upon acceptance and recording pursuant to Section
          10.06(c), from and after the effective date specified in each
          Assignment Agreement, (i) the assignee thereunder shall be a party
          hereto and, to the extent of the interest assigned by such Assignment
          Agreement, have the rights and obligations of a Lender under this
          Agreement and (ii) the assigning Lender thereunder shall, to the
          extent of the interest assigned by such Assignment Agreement, be
          released from its obligations under this Agreement (and, in the case
          of an Assignment Agreement covering all or the remaining portion of an
          assigning Lender's rights and obligations under this Agreement, such
          Lender shall cease to be a party hereto, but shall continue to be
          entitled to the benefits of Sections 3.04, 3.05, 3.06 and 10.02, as
          well as to amounts accrued for its account pursuant to Section 2.04 or
          any other Loan Document and not yet paid).

      (b) Maintenance of Register.  The Agent shall maintain at one of its
          -----------------------
          offices in The City of New York a copy of each Assignment Agreement
          delivered to it and a register for the recordation of the names and
          addresses of the Lenders (including those becoming Lenders pursuant to
          an Assignment Agreement), and the Commitments of and principal amount
          of the Loans owing to each Lender pursuant to the terms hereof from
          time to time (the "Register").  The entries in the Register shall be
          conclusive and the Borrower, the Agent and the Lenders may treat each
          Person whose name is recorded in the Register pursuant to the terms
          hereof as a Lender hereunder for all purposes of this Agreement,
          notwithstanding notice to the contrary.  The Register shall be
          available for inspection by the Borrower and any Lender, at any
          reasonable time and from time to time upon reasonable prior notice.

      (c) Acceptance and Recordation of Assignments.  On its receipt of a duly
          -----------------------------------------
          completed Assignment Agreement executed by an assigning Lender and an
          assignee and, to the extent applicable, the assignment fee referred to
          in Section 10.06(a) above and the written consent of the Agent to such
          assignment, the Agent shall (i) accept such Assignment Agreement, (ii)
          record the information contained therein in the
<PAGE>

                                      -70-

          Register and (iii) give prompt notice thereof to the Lenders. No
          assignment shall be effective unless it has been recorded in the
          Register as provided in this Section 10.06(c). On acceptance and
          recording pursuant to this Section 10.06(c) of any such assignment by
          a Lender, the Borrower shall, against receipt of the existing Note of
          the assignor Lender, issue a new Note to the assignee Lender and, in
          the case of a partial assignment, to the assignor Lender,
          appropriately reflecting such assignment.

      (d) Assignments to Federal Reserve Banks.  Nothing in this Section 10.06
          ------------------------------------
          shall limit the right of any Lender to assign its interest in its
          Loans and Note to a Federal Reserve Bank as collateral security under
          Regulation A of the Board of Governors of the Federal Reserve System,
          but no such assignment shall release such Lender from its obligations
          hereunder.

      (e) Participations.  Subject to Sections 10.04 and 10.06(f), each Lender
          --------------
          may from time to time, in accordance with applicable Governmental
          Requirements, sell or otherwise grant participations in any or all of
          its rights and obligations under the Loan Documents without the
          consent of the Borrower, the Agent or any other Lender; provided,
          however, that no Lender shall, sell any such participation, or permit
          the resale or other transfer of any such participation, to any Person
          other than a financial institution meeting the requirement of Eligible
          Assignee.  No sale by a Lender of any participation shall relieve such
          Lender of any of its obligations hereunder.

      (f) Rights of Participants.  Each participation agreement shall provide
          ----------------------
          that the Lender that has sold or granted the participation shall
          retain the sole right to take or refrain from taking any action under
          the Loan Documents, except that such participation agreement may
          provide that such Lender shall not, without the consent of the
          participant, agree to any amendment or waiver that would have the
          effect of (i) increasing the Commitment of such Lender, (ii) extending
          the Termination Date, (iii) reducing the principal on the Loans, to
          the extent that the participant would be affected thereby, (iv)
          reducing the rate of interest on the Loans or Notes, to the extent
          that the participant would be affected thereby or (v) reducing the
          amount of such Lender's participation in any fees payable pursuant to
          Section 2.04, to the extent that the participant would be affected
          thereby.  All amounts payable to any Lender under Section 3.04, 3.05
          or 3.06 shall be determined as if such Lender has not sold any
          participations.

      (g) Lender Representation.  Each Lender party to this Agreement on the
          ---------------------
          Closing Date hereby represents, and each Person that becomes a Lender
          pursuant to an Assignment Agreement will represent, and shall be
          deemed to have represented on becoming a party to this Agreement, that
          it is in fact, otherwise than by reason of being a Lender, an Eligible
          Assignee and will make or acquire Loans hereunder for its own account
          in the ordinary course of its business.

      (h) Granting Lender.  Notwithstanding anything to the contrary contained
          ---------------
          herein, any Lender (a "Granting Lender") may grant to a special
          purpose funding vehicle
<PAGE>

                                      -71-

          (an "SPC"), identified as such in writing from time to time by the
          Granting Lender to the Agent and the Borrower, the right to provide to
          the Borrower all or any part of any Loan that such Granting Lender
          would otherwise be obligated to make to the Borrower pursuant to this
          Agreement; provided that such SPC uses as its funds to make and
                     --------
          maintain such Loan a source satisfying the "ERISA Assumptions" set out
          on Schedule A and provided further that (i) nothing herein shall
          constitute a commitment by any SPC to make any Loan; and (ii) if an
          SPC elects not to exercise such right or otherwise fails to provide
          all or any part of such Loan at the time required hereunder, the
          Granting Lender shall be obligated to make such Loan pursuant to the
          terms hereof. The making of a Loan by an SPC hereunder shall utilize
          the Commitment of the Granting Lender to the same extent, and as if,
          such Loan were made by such Granting Lender. Each party hereto hereby
          agrees that no SPC shall be liable for any indemnity or similar
          payment obligation under this Agreement (all liability for which shall
          remain with the Granting Lender.

          In furtherance of the foregoing, each party hereto hereby agrees
          (which agreement shall survive the termination of this Agreement)
          that, prior to the date that is one year and one day after the payment
          in full of all outstanding commercial paper or other senior
          indebtedness of any SPC, it will not institute against, or join any
          other person in instituting against, such SPC any bankruptcy,
          reorganization, arrangement, insolvency or liquidation proceedings
          under the laws of the United States or any State thereof.  In
          addition, notwithstanding anything to the contrary contained in this
          Section 10.06, any SPC may:  (A) with notice to, but without the prior
          written consent of, the Borrower and the Agent and without paying any
          processing fee therefor, assign all or a portion of its interests in
          any Loans to the Granting Lender or to any Eligible Assignee
          (consented to by the Agent) providing liquidity and/or credit support
          to or for the account of such SPC to support the funding or
          maintenance of Loans; and (B) disclose:  (I) any Confidential
          Information on the terms set out in Section 10.04; and (II) on a
          confidential basis any other non-public information relating to its
          Loans to any rating agency, commercial paper dealer or provider of any
          surety, guarantee or credit or liquidity enhancement to such SPC.

10.07 GOVERNING LAW.  THIS AGREEMENT AND THE NOTES SHALL BE GOVERNED BY AND
      -------------
      CONSTRUED IN ACCORDANCE WITH THE LAW OF THE STATE OF NEW YORK (WITHOUT
      GIVING EFFECT TO ITS CHOICE OF LAW PRINCIPLES).

10.08 JUDICIAL PROCEEDINGS; WAIVER OF JURY TRIAL.  ANY JUDICIAL PROCEEDING
      ------------------------------------------
      BROUGHT AGAINST THE BORROWER WITH RESPECT TO, OR ANY DISPUTE UNDER OR
      ARISING OUT OF OR IN CONNECTION WITH, ANY LOAN DOCUMENT CLAIM MAY BE
      BROUGHT IN ANY COURT OF COMPETENT JURISDICTION IN THE BOROUGH OF MANHATTAN
      IN THE CITY OF NEW YORK, COUNTY OF NEW YORK, AND, BY EXECUTION AND
      DELIVERY OF THIS AGREEMENT, THE BORROWER (A) ACCEPTS, GENERALLY AND
      UNCONDITIONALLY, THE NONEXCLUSIVE JURISDICTION
<PAGE>

                                      -72-

      OF EACH SUCH COURT AND ANY RELATED APPELLATE COURT AND IRREVOCABLY AGREES
      TO BE BOUND BY ANY JUDGMENT RENDERED THEREBY IN CONNECTION WITH ANY LOAN
      DOCUMENT CLAIM AND (B) TO THE FULLEST EXTENT IT MAY LEGALLY AND
      EFFECTIVELY DO SO, IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING, WITHOUT
      LIMITATION, ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS
      OF FORUM NON CONVENIENS, IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF
      ANY SUCH ACTION OR PROCEEDING IN SUCH JURISDICTION. THE BORROWER SHALL
      APPOINT AND MAINTAIN CT CORPORATION SYSTEM, THE PRENTICE-HALL CORPORATION
      SYSTEM INC. OR A SIMILAR ENTITY (THE "SERVICE AGENT") AS AGENT TO RECEIVE
      ON ITS BEHALF SERVICE OF PROCESS IN ANY PROCEEDING IN A STATE OR FEDERAL
      COURT LOCATED IN THE BOROUGH OF MANHATTAN IN THE CITY OF NEW YORK BY
      ENTERING INTO AN AGREEMENT AS OF THE DATE OF THIS AGREEMENT WITH THE
      SERVICE AGENT TO SUCH EFFECT, AND THE BORROWER SHALL MAINTAIN SUCH
      AGREEMENT (OR AN APPROPRIATE SUBSTITUTE TO THE SAME EFFECT WITH THE SAME
      OR A DIFFERENT SERVICE AGENT) FOR THE ENTIRE TERM OF THIS AGREEMENT. THE
      FOREGOING CONSENT TO JURISDICTION AND APPOINTMENT OF AGENT TO RECEIVE
      SERVICE OF PROCESS SHALL NOT CONSTITUTE A GENERAL CONSENT TO SERVICE OF
      PROCESS IN THE STATE OF NEW YORK FOR ANY PURPOSE EXCEPT AS PROVIDED ABOVE
      AND SHALL NOT BE DEEMED TO CONFER RIGHTS ON ANY PERSON OTHER THAN THE
      AGENT AND THE LENDERS. NOTHING HEREIN SHALL AFFECT THE RIGHT OF THE AGENT,
      ANY LENDER OR ANY OTHER INDEMNIFIED PERSON TO SERVE PROCESS IN ANY OTHER
      MANNER PERMITTED BY LAW OR SHALL LIMIT THE RIGHT OF THE AGENT, ANY LENDER
      OR ANY OTHER INDEMNIFIED PERSON TO BRING PROCEEDINGS AGAINST THE BORROWER
      IN THE COURTS OF ANY OTHER JURISDICTION. IN LIGHT OF THE EXPRESS AGREEMENT
      OF THE BORROWER TO SUBMIT TO THE JURISDICTION OF NEW YORK COURTS FOR THE
      RESOLUTION OF ANY AND ALL DISPUTES ARISING UNDER THIS AGREEMENT AND
      BROUGHT IN NEW YORK COURTS PURSUANT TO THIS SECTION 10.08, THE BORROWER
      FURTHER HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES, TO THE
      FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL AFFIRMATIVE
      DEFENSES IT COULD OR MIGHT OTHERWISE BE ABLE TO ASSERT BASED ON AN ALLEGED
      INCAPACITY OF THE BORROWER TO ASSERT A CLAIM OR COUNTER-CLAIM IN THE STATE
      COURTS OF THE STATE OF NEW YORK LOCATED IN THE BOROUGH OF MANHATTAN
      WHETHER ON THE GROUNDS THAT THE BORROWER HAS FAILED TO COMPLY WITH ANY OR
      ALL REGISTRATION, CERTIFICATION, NOTIFICATION, FILING OR DESIGNATION-OF-
      AGENT GOVERNMENTAL REQUIREMENTS OF THE STATE OF NEW YORK OR ON OTHER
      GROUNDS. THE BORROWER AND EACH OTHER PARTY HERETO EACH HEREBY KNOWINGLY,
      VOLUNTARILY AND INTENTIONALLY, IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO
      THE FULLEST EXTENT PERMITTED BY
<PAGE>

                                      -73-

      APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY JUDICIAL
      PROCEEDING INVOLVING ANY CLAIM ARISING OUT OF, RELATING TO OR IN
      CONNECTION WITH ANY LOAN DOCUMENT CLAIM. THE BORROWER AND EACH OTHER PARTY
      HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY
      OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY
      WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING
      WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN
      INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS, AS
      APPLICABLE, BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS
      IN THIS SECTION 10.08. THE PROVISIONS OF THIS SECTION 10.08 SHALL SURVIVE
      THE TERMINATION OF THIS AGREEMENT AND THE PAYMENT IN FULL OF THE
      OBLIGATIONS.

10.09 Severability of Provisions.  In case any provision of the Loan Documents
      --------------------------
      is invalid, illegal or unenforceable, the validity, legality and
      enforceability of the remaining provisions shall not in any way be
      affected or impaired thereby.

10.10 Counterparts; Integration; Binding Effect.  This Agreement may be executed
      -----------------------------------------
      in any number of counterparts and by different parties hereto in separate
      counterparts, each when so executed shall be deemed to be an original and
      all of which taken together shall constitute one and the same agreement.
      This Agreement shall become effective when it shall have been executed by
      the Borrower and the Agent and when the Agent shall have received an
      original signature page signed by, or a facsimile copy of an original
      signature page signed by, each Lender listed on the signature pages
      hereof.

10.11 Entire Agreement.  This Agreement, the Notes and the other Loan Documents
      ----------------
      embody the entire agreement among the Borrower, the Agent and the Lenders
      relating to the subject matter hereof and supersede all prior agreements
      and understandings, oral or written, relating to the subject matter
      hereof.

10.12 Successors and Assigns.  The provisions of this Agreement shall be binding
      ----------------------
      upon and inure to the benefit of the parties hereto and their respective
      successors and assigns in accordance with the terms hereof, except that
      the Borrower may not assign or transfer any of its rights or obligations
      under this Agreement without the prior written consent of all Lenders.
<PAGE>

                                      S-1

IN WITNESS WHEREOF,  the parties hereto have caused this Agreement to be
executed and delivered by their duly authorized officers all as of July 20,
2001.

                                        LYONDELL-CITGO REFINING LP


                                        By:_____________________________
                                           Name:
                                           Title:
<PAGE>

                                      S-2

                                        CREDIT SUISSE FIRST BOSTON,
                                          as Agent and as Lender


                                        By:_______________________________
                                           Name:
                                           Title:


                                        By:_______________________________
                                           Name:
                                           Title:
<PAGE>

                                      S-3

                                        BANK OF AMERICA, N.A.


                                        By:______________________________
                                           Name:
                                           Title:
<PAGE>

                                      S-4

                                        THE CHASE MANHATTAN BANK


                                        By:____________________________
                                           Name:
                                           Title:
<PAGE>

                                      S-5

                                        THE BANK OF NOVA SCOTIA


                                        By:____________________________
                                           Name:
                                           Title:
<PAGE>

                                      S-6

                                        CREDIT LYONNAIS NEW YORK BRANCH


                                        By:____________________________
                                           Name:
                                           Title:
<PAGE>

                                      S-7

                                        FLEET NATIONAL BANK


                                        By:______________________________
                                           Name:
                                           Title:
<PAGE>

                                      S-8

                                        THE DAI-ICHI KANGYO BANK, LTD.


                                        By:________________________________
                                           Name:
                                           Title:
<PAGE>

                                      S-9

                                        THE FUJI BANK, LIMITED


                                        By:________________________________
                                           Name:
                                           Title:
<PAGE>

                                     S-10

                                        THE INDUSTRIAL BANK OF JAPAN,
                                          LIMITED, NEW YORK BRANCH


                                        By:________________________________
                                           Name:
                                           Title:
<PAGE>

                                    S-11

                                        THE ROYAL BANK OF SCOTLAND plc


                                        By:________________________________
                                           Name:
                                           Title:
<PAGE>

                                     S-12

                                        SUNTRUST BANK


                                        By:________________________________
                                           Name:
                                           Title:
<PAGE>

                                     S-13

                                        ABB STRUCTURED FINANCE B.V.


                                        By:________________________________
                                           Name:
                                           Title:
<PAGE>

                                     S-14

                                        ARAB BANKING CORPORATION


                                        By:________________________________
                                           Name:
                                           Title:
<PAGE>

                                     S-15

                                        BANK OF OKLAHOMA N.A.


                                        By:________________________________
                                           Name:
                                           Title:
<PAGE>

                                     S-16

                                        COBANK, ACB


                                        By:________________________________
                                           Name:
                                           Title:
<PAGE>

                                     S-17

                                        BAYERISCHE HYPO-UND VEREINSBANK
                                          AG, NEW YORK BRANCH


                                        By:________________________________
                                           Name:
                                           Title:
<PAGE>

                                     S-18

                                        WESTDEUTSCHE LANDESBANK
                                          GIROZENTRALE, NEW YORK BRANCH


                                        By:___________________________
                                           Name:
                                           Title:


                                        By:___________________________
                                           Name:
                                           Title:
<PAGE>

                                     S-19

                                        BANK OF SCOTLAND


                                        By:___________________________
                                           Name:
                                           Title:
<PAGE>

                                     S-20

                                        FORTIS CAPITAL CORP


                                        By:___________________________
                                           Name:
                                           Title:
<PAGE>

                                     S-21

                                        NATEXIS BANQUES POPULAIRES


                                        By:____________________________
                                           Name:
                                           Title:
<PAGE>

                                     S-22

                                        BANK ONE, N.A.


                                        By:____________________________
                                           Name:
                                           Title: