EXHIBIT 10.5
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DEBTOR IN POSSESSION
TERM LOAN AGREEMENT
dated as of October 18, 2002
among
EOTT ENERGY OPERATING LIMITED PARTNERSHIP,
EOTT ENERGY CANADA LIMITED PARTNERSHIP,
EOTT ENERGY LIQUIDS, L.P.
and
EOTT ENERGY PIPELINE LIMITED PARTNERSHIP,
as debtors and debtors in possession and as joint and several Borrowers,
EOTT ENERGY PARTNERS, L.P.
and
EOTT ENERGY GENERAL PARTNER, L.L.C.
as debtors and debtors in possession and as Guarantors,
▇▇▇▇▇▇ BROTHERS INC.,
as Term Lender Agent
and
THE TERM LENDERS PARTY HERETO
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TABLE OF CONTENTS
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DEBTOR IN POSSESSION TERM LOAN AGREEMENT..........................................................................1
1. DEFINITIONS AND RULES OF INTERPRETATION..................................................................3
2. THE TERM LOANS..........................................................................................20
(a) Commitment to Lend; Notes......................................................................20
(b) Requesting Term Loans..........................................................................20
(c) Conditions Precedent to Extension of Credit....................................................20
(d) Use of Proceeds................................................................................23
(e) Mandatory Prepayments..........................................................................24
(f) Optional Prepayment of Term Loans..............................................................24
(g) Interest Rates and Fees........................................................................25
3. PAYMENTS TO TERM LENDERS................................................................................25
(a) General Procedures.............................................................................25
(b) Payment Obligations Absolute...................................................................26
(c) Application of Payments made to Term Lender Agent..............................................26
(d) Capital Reimbursement..........................................................................26
(e) Increased Cost of Term Loans...................................................................27
(f) Notice; Change of Applicable Lending Office....................................................27
(g) Reimbursable Taxes.............................................................................28
4. INTENTIONALLY OMITTED...................................................................................29
5. INTENTIONALLY OMITTED...................................................................................29
6. INTENTIONALLY OMITTED...................................................................................29
7. OTHER ACTIONS OF DEBTORS................................................................................29
8. REPRESENTATIONS AND WARRANTIES..........................................................................30
9. AFFIRMATIVE COVENANTS...................................................................................36
(a) Payment and Performance........................................................................36
(b) Payment of Expenses............................................................................36
(c) Instruments, Documents, Securities or Chattel Paper............................................36
(d) Books, Financial Statements and Reports........................................................37
(e) Other Information and Inspections..............................................................39
(f) Notice of Material Events and Change of Address................................................40
(g) Maintenance of Properties......................................................................41
(h) Discharge of Liens.............................................................................41
(i) Maintenance of Existence and Qualifications....................................................41
(j) Payment of Trade Liabilities, Taxes, etc.......................................................41
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TABLE OF CONTENTS
(Continued)
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(k) Insurance......................................................................................42
(l) Performance on Borrowers' Behalf...............................................................42
(m) Interest.......................................................................................42
(n) Compliance with Agreements and Law.............................................................43
(o) Environmental Matters; Environmental Reviews...................................................43
(p) Evidence of Compliance.........................................................................43
(q) Agreement to Deliver Security Documents........................................................43
(r) Guaranties of Newly Created or Acquired Subsidiaries...........................................44
(s) Compliance with Agreements.....................................................................44
(t) Risk Management Policies.......................................................................44
(u) Critical Vendor Program........................................................................44
10. NEGATIVE COVENANTS......................................................................................44
(a) Indebtedness...................................................................................44
(b) Accounts.......................................................................................45
(c) Limitation on Liens............................................................................45
(d) Hedging Contracts..............................................................................46
(e) Limitation on Mergers, etc. and Issuances of Securities........................................46
(f) Limitation on Asset Sales......................................................................46
(g) Limitation on Distributions, Dividends and Redemptions.........................................47
(h) Limitation on New Businesses, Investments and Capital Expenditures.............................47
(i) Limitation on Credit Extensions................................................................47
(j) Transactions with Affiliates...................................................................47
(k) Prohibited Contracts...........................................................................47
(l) Modification of Certain Agreements.............................................................48
(m) Open Positions.................................................................................48
(n) Intentionally Omitted..........................................................................48
(o) Books and Records..............................................................................48
(p) Bankruptcy Cases...............................................................................48
(q) Cash Budget....................................................................................49
(r) Minimum Crude Oil Lease Volumes................................................................49
(s) Prepetition Indebtedness.......................................................................49
11. EVENTS OF DEFAULT.......................................................................................50
12. RIGHTS AND REMEDIES.....................................................................................53
13. GUARANTY................................................................................................54
14. TERM LENDER AGENT.......................................................................................55
(a) Appointment and Authority......................................................................55
(b) Exculpation, the Term Lender Agent's Reliance, etc.............................................56
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TABLE OF CONTENTS
(Continued)
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(c) Credit Decisions...............................................................................56
(d) Indemnification................................................................................56
(e) Rights as Term Lender..........................................................................57
(f) Sharing of Set-Offs and Other Payments.........................................................57
(g) Investments....................................................................................58
(h) Benefit of this Section........................................................................58
(i) Resignation....................................................................................58
(j) Other Lender Parties...........................................................................58
15. ASSIGNMENTS AND PARTICIPATIONS..........................................................................59
16. INDEMNIFICATION.........................................................................................61
17. MISCELLANEOUS...........................................................................................62
SCHEDULES AND EXHIBITS:
SCHEDULE I DISCLOSURE SCHEDULE
SCHEDULE II TERM LENDER SCHEDULE
SCHEDULE III SECURITY SCHEDULE
EXHIBIT A-1 FORM OF TIER-A TERM NOTE
EXHIBIT A-2 FORM OF TIER-B TERM NOTE
EXHIBIT B BORROWING NOTICE
EXHIBIT C CERTIFICATE ACCOMPANYING FINANCIAL STATEMENTS
EXHIBIT D CASH FLOW REPORT
EXHIBIT E ENVIRONMENTAL COMPLIANCE CERTIFICATE
EXHIBIT F OPEN POSITION REPORT
EXHIBIT G CASH BUDGET
EXHIBIT H CRITICAL VENDOR ORDER
EXHIBIT I WEEKLY COMPLIANCE CERTIFICATE
EXHIBIT J SECOND INTERIM ORDER
EXHIBIT K LEASE VOLUME REPORT
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DEBTOR IN POSSESSION
TERM LOAN AGREEMENT
DEBTOR-IN-POSSESSION
TERM LOAN AGREEMENT, dated as of October 18, 2002
(as amended, supplemented or otherwise modified from time to time, and including
all Schedules and Exhibits attached hereto, this "AGREEMENT"), among :
o EOTT ENERGY OPERATING LIMITED PARTNERSHIP, a Delaware
limited partnership and a debtor and debtor in
possession ("EOTT OLP"),
o EOTT ENERGY CANADA LIMITED PARTNERSHIP, a Delaware
limited partnership and a debtor and debtor in
possession ("EOTT CANADA"),
o EOTT ENERGY LIQUIDS, L.P., a Delaware limited
partnership and a debtor and debtor in possession
("EOTT LIQUIDS"),
o EOTT ENERGY PIPELINE LIMITED PARTNERSHIP, a Delaware
limited partnership and a debtor and debtor in
possession ("EOTT PIPELINE" and together with EOTT
Canada and EOTT Liquids, each an "ADDITIONAL OBLIGOR"
and collectively, "ADDITIONAL OBLIGORS" and the
Additional Obligors together with EOTT OLP on a joint
and several basis, "BORROWERS"),
o EOTT ENERGY PARTNERS, L.P., a Delaware limited
partnership and a debtor and debtor in possession
("EOTT MLP"),
o EOTT ENERGY GENERAL PARTNER, L.L.C. a Delaware
limited liability company and a debtor and debtor in
possession ("EOTT GP" and together with EOTT MLP,
each a "GUARANTOR" and collectively, "GUARANTORS" and
together with EOTT OLP and each of the Additional
Obligors, each a "DEBTOR" and collectively,
"DEBTORS"),
o each of the banks or other lending institutions which
is a listed as a Term Lender on the signature pages
of this Agreement or which may from time to time
become a party hereto in such capacity or any
successor or assignee thereof (each a "TERM LENDER"
and collectively, the "TERM LENDERS"),
o and ▇▇▇▇▇▇ BROTHERS INC., as Term Lender Agent for
the Term Lenders (in such capacity, the "TERM LENDER
AGENT" and in its individual capacity, "▇▇▇▇▇▇").
WHEREAS, on October 8, 2002 (the "FILING DATE"), the Debtors filed
separate petitions under Chapter 11 in the Bankruptcy Court for the Southern
District of Texas;
WHEREAS, each of the Debtors intends to continue to operate its
business pursuant to Sections 1107 and 1108 of the Bankruptcy Code;
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WHEREAS, before the Filing Date, EOTT OLP, EOTT Canada, EOTT Liquids,
and EOTT Pipeline (collectively, the "PREPETITION BORROWERS"), EOTT MLP and EOTT
GP (collectively, the "PREPETITION GUARANTORS"), the lenders party thereto (the
"PREPETITION LENDERS"), Standard Chartered Bank as administrative agent for the
Prepetition Lenders (the "PREPETITION AGENT") and letter of credit issuer
thereunder (the "PREPETITION LC ISSUER"), entered into that certain Second
Amended and Restated Reimbursement, Loan and Security Agreement, dated as of
April 23, 2002, as amended by that certain Limited Forbearance and First
Amendment, dated as of August 27, 2002, among the Prepetition Borrowers, the
Prepetition Guarantors, the Prepetition Lenders, and the Prepetition Agent (as
so amended, the "PREPETITION CREDIT AGREEMENT"), pursuant to which the
Prepetition Lenders extended credit to the Prepetition Borrowers on the terms
set forth therein;
WHEREAS, as of the date hereof, the Prepetition Lenders under the
Prepetition Credit Agreement are owed approximately $20,000,000 in revolving
loan principal obligations incurred directly by the Prepetition Borrowers plus
interest, fees and expenses (the "PREPETITION LOANS"), and $276,205,489.48 in
reimbursement obligations relating to letters of credit issued under the
Prepetition Credit Agreement (the "PREPETITION LETTERS OF CREDIT", and together
with the Prepetition Loans, the "PREPETITION BANK DEBT"), the obligations of the
Prepetition Borrowers in respect thereof being guaranteed by the Prepetition
Guarantors;
WHEREAS, the Borrowers have requested that the Term Lenders provide
financing to the Borrowers pursuant to Sections 364(c)(1), (2) and (3) and
364(d) of the Bankruptcy Code, and enter into this Agreement pursuant to which
Term Lenders would make term loans to Borrowers in the aggregate principal
amount of $75,000,000 to be used by the Borrowers as provided in Section
2(d)(i);
WHEREAS, the Term Lenders have indicated their willingness to agree to
extend such credit to the Borrowers, all on the terms and conditions set forth
herein and in the other Credit Documents and in accordance with Sections
364(c)(1), (2) and (3) and 364(d) of the Bankruptcy Code, so long as:
(a) such postpetition credit obligations are (i) secured by Liens on
all of the property and interest, real and personal, tangible and
intangible, of the Debtors whether now owned or hereafter acquired,
subject in priority only to certain Liens and the Carve Out as
hereinafter provided and (ii) given superpriority status as provided in
the Orders; and
(b) the Prepetition Lenders receive certain adequate protection for the
Debtors' use, sale or lease of collateral, including the Borrowers' use
of cash collateral, and the priming of the prepetition Liens securing
the obligations of the Borrowers in respect of the Prepetition Credit
Agreement;
WHEREAS, the Borrowers have agreed to provide such collateral,
superpriority claims and adequate protection subject to the approval of the
Bankruptcy Court;
WHEREAS, each of the Guarantors will derive substantial direct and
indirect benefit from the credit made available by the Term Lenders to the
Borrowers; and
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WHEREAS, the Guarantors are willing to guarantee the obligations of
Borrowers hereunder;
NOW, THEREFORE, in consideration of these premises and the mutual
undertakings set forth herein, the parties hereto hereby agree as follows:
1. DEFINITIONS AND RULES OF INTERPRETATION.
As used in this Agreement, all terms used herein which are defined in
Article 1 or Article 9 of the UCC (as in effect from time to time) shall have
the meanings set forth therein unless otherwise defined in this Agreement, and
all references to the plural herein shall also mean the singular. As used in
this Agreement, each of the following terms has the meaning given to such term
in this Section 1 or in the Sections and subsections referred to below:
"ACCOUNT" has the meaning given that term in the UCC..
"ADMINISTRATIVE AGENTS" means the Term Lender Agent and the LC Agent.
"AFFILIATE" means, as to any Person, each 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. A
Person shall be deemed to be "controlled by" any other Person if such
other Person possesses, directly or indirectly, power (i) to vote 5% or
more of the securities (on a fully diluted basis) having ordinary
voting power for the election of directors or managing general partners
or (ii) to direct or cause the direction of the management and policies
of such Person whether by contract or otherwise.
"AGREED ADMINISTRATIVE EXPENSES" means (i) amounts payable pursuant to
28 U.S.C. Section 1930(a)(6) and (ii) Priority Professional Expenses.
"AGREEMENT" has the meaning set forth in the preamble.
"ALTERNATE BASE RATE" has the meaning set forth in the DIP Letter of
Credit Agreement.
"APPLICABLE LENDING OFFICE" means with respect to any Term Lender, the
office of such Term Lender specified as its "Applicable Lending Office"
in the Term Lender Schedule, or such other office as such Term Lender
may from time to time specify to the Borrower Representative and the
Term Lender Agent and, with respect to the Term Lender Agent, the
office, branch or agency through which it administers this Agreement.
"AVOIDANCE ACTIONS" means avoidance actions of the Borrowers under
Chapter 5 or Section 724(a) of the Bankruptcy Code (or proceeds
thereof).
"BANKRUPTCY CODE" means ▇▇▇▇▇ ▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇ Code.
"BANKRUPTCY COURT" means the United States Bankruptcy Court for the
Southern District of Texas, Corpus Christi Division.
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"BANKRUPTCY SCHEDULE" means the schedule of assets and liabilities and
the statement of financial affairs filed by the Debtors with the
Bankruptcy Court in connection with the Cases.
"BARREL REPORT" means a report in the form delivered to the
Administrative Agents from time to time setting forth the aggregate
crude oil purchases and cancellations from the top twenty-five (25)
leaseholders identified therein for any given week, with such
supporting information in detail as may from time to time be prescribed
by the Term Lender Agent, duly completed and certified by an authorized
officer of EOTT Energy.
"BONDHOLDERS" means those parties holding interests in the EOTT MLP
Senior Notes issued pursuant to the EOTT MLP Supplemental Indenture.
"BONDHOLDER'S COMMITTEE" means the committee of Bondholders, if any,
appointed to the Cases.
"BORROWER EXPENSES" means any and all sums, costs and expenses incurred
in connection with the preparation and negotiation of this Agreement,
the other Credit Documents and any related agreements or instruments,
together with any amendments or supplements hereto or thereto, or in
defending, protecting or enforcing the security interest granted herein
or in defending, collecting or attempting to collect the Obligations,
including, without limitation, all search, filing and recording fees,
taxes, attorneys' fees, legal expenses, all fees and expenses for the
service and filing of papers, marshals, sheriffs, custodians,
auctioneers and others and all court costs and collection charges, with
interest thereon, from the date of demand until paid at the Alternate
Base Rate.
"BORROWERS" has the meaning set forth in the preamble.
"BORROWER REPRESENTATIVE" means, for purposes of executing the
Borrowing Notice and otherwise communicating with the Term Lender Agent
on behalf of the Borrowers, and taking any action required under this
Agreement on behalf of the Borrowers (and all of the Borrowers shall be
bound thereby), including consent to and any modifications, amendments
or supplements to this Agreement or related documents, EOTT OLP.
"BORROWING BASE" means, as of any date of determination, the borrowing
base determined pursuant to the DIP Letter of Credit Agreement.
"BORROWING NOTICE" means a written request made by the Borrower
Representative that meets the requirements of Section 2(a)(ii).
"BUSINESS DAY" means any day, other than a Saturday, Sunday or day
which shall be in the State of
New York a legal holiday or day on which
banking institutions are required or authorized to close.
"CAPITAL EXPENDITURES" means for any period, Consolidated expenditures
(including the aggregate amount of Capital Lease obligations incurred
during such period) made by EOTT MLP and its Consolidated Subsidiaries
to acquire or construct fixed assets, plant or equipment (including
renewals, improvements or replacements, but excluding repairs)
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during such period and which, in accordance with GAAP, are classified
as capital expenditures.
"CAPITAL LEASE" means a lease with respect to which the lessee is
required concurrently to recognize the acquisition of an asset and the
incurrence of a liability in accordance with GAAP.
"CARVE OUT" means, at any time of determination, the sum of (i) allowed
administrative expenses payable pursuant to 28 U.S.C. Section
1930(a)(6) and (ii) Priority Professional Expenses incurred on and
after the Filing Date.
"CASES" means, collectively, the Debtors' reorganization cases under
Chapter 11 of the Bankruptcy Code, pending in the Bankruptcy Court
(Chapter 11 Case No. 02-21730.
"CASH BUDGET" has the meaning set forth in Section 8(w).
"CASH EQUIVALENTS" means Investments in:
(i) marketable obligations, maturing within 12 months
after acquisition thereof, issued or unconditionally
guaranteed by the United States of America or an
instrumentality or agency thereof and entitled to the
full faith and credit of the United States of
America;
(ii) demand deposits and time deposits (including
certificates of deposit) maturing within 12 months
from the date of deposit thereof, (A) with any office
of any LC Participant or (B) with a domestic office
of any national or state bank or trust company which
is organized under the Laws of the United States of
America or any state therein, which has capital,
surplus and undivided profits of at least
$500,000,000 and whose long-term certificates of
deposit are rated at least Aa3 by ▇▇▇▇▇'▇ or AA- by
S&P;
(iii) repurchase obligations with a term of not more than
seven days for underlying securities of the types
described in subsection (i) above entered into with
(A) LC Participant or (B) any other commercial bank
meeting the specifications of subsection (ii) above;
(iv) commercial paper, other than commercial paper issued
by any Debtor or its Affiliates, maturing within 180
days after acquisition thereof and having a rating of
at least P-1 by ▇▇▇▇▇'▇ or A-1 by S&P; and
(v) money market or other mutual funds substantially all
of whose assets comprise securities of the types
described in subsections (i) through (iv) above.
"CASH FLOW REPORT" means a report prepared each Business Day by the
Borrower Representative reflecting on such day EOTT MLP's and its
Subsidiaries' cash flows for the current month, on an actual
(historical) and projected (forecast) basis, substantially in the form
of Exhibit D hereto.
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"CASH WATERFALL" has the meaning set forth in the Intercreditor
Agreement.
"CERCLA" means the Comprehensive Environmental Response, Compensation
and Liability Act of 1980, as amended.
"CERCLIS" means the Comprehensive Environmental Response, Compensation
and Liability Information System List of the Environmental Protection
Agency.
"CHANGE IN CONTROL" means the occurrence of any of the following
events: (i) any of ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇▇ shall cease
for any reason not reasonably acceptable to the Term Lender Agent to
serve as an executive officer of EOTT MLP (unless any such officer
shall have ceased to serve as a result of death, disability,
termination for cause as determined by the EOTT MLP Board of Directors
or other reason Currently Approved by the Term Lender Agent and such
individual has not been replaced by a Person reasonably acceptable to
the Term Lender Agent within a reasonable period of time), and (ii) any
Person or Group shall be the legal and beneficial owner (within the
meaning of Rule 13d-3 under the Securities Exchange Act of 1934, as
amended) of 50% or more of the combined voting power of the then total
partnership interests (including all securities that are convertible
into partnership interests) of EOTT MLP.
"CLOSING DATE" means the date agreed to by the Borrower Representative
and the Term Lender Agent for the Extensions of Credit under this
Agreement, which date shall occur promptly after entry by the
Bankruptcy Court of the Second Interim Order and must be a Business Day
occurring no later than October 18, 2002, but not before all of the
conditions precedent in this Agreement for such Extension of Credit
have been satisfied.
"COLLATERAL" has the meaning set forth in the Intercreditor Agreement.
"COLLATERAL AGENT" means Standard Chartered Bank, acting as collateral
agent on behalf of the LC Issuer, the LC Participants, SCTSC, the Term
Lenders and the Administrative Agents in accordance with the
Intercreditor Agreement.
"COLLECTION ACCOUNT" has the meaning set forth in the Intercreditor
Agreement.
"CONSOLIDATED" means the consolidation of any Person, in accordance
with GAAP, with its properly consolidated Subsidiaries. References
herein to a Person's Consolidated financial statements, financial
position, financial condition, liabilities, etc. refer to the
consolidated financial statements, financial position, financial
condition, liabilities, etc. of such Person and its properly
consolidated Subsidiaries.
"CONTROL AGREEMENT" has the meaning set forth in the Intercreditor
Agreement.
"CREDIT DOCUMENTS" means, collectively (i) this Agreement, the Term
Notes, and each and every other agreement, document, certificate or
instrument between any Lender Party, and any Debtor or otherwise for
the benefit of any Lender Party that is entered into or delivered on or
after the date hereof, (ii) the Orders, and (iii) the Security
Documents.
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"CREDITORS' COMMITTEE" means the official unsecured creditors'
committee, if any, appointed to the Cases.
"CRITICAL VENDOR ORDER" means the Order for Authority to Pay and Honor
Prepetition Obligations to Critical Customers and Vendors including
Crude Suppliers and Purchasers entered by the Bankruptcy Court attached
hereto as Exhibit H.
"CRUDE OIL PURCHASE AGREEMENT" means, that certain Amended and Restated
Commodities Repurchase Agreement, dated as of the date hereof, by and
among SCTSC and EOTT OLP (as amended, amended and restated,
supplemented or otherwise modified from time to time).
"CURRENTLY APPROVED BY THE TERM LENDER AGENT" means such event, action,
policy, or other matter, as the case may be, as reflected in the most
recent written notice given by the Term Lender Agent to the Borrower
Representative as being approved. Each such written notice will
supersede and revoke each prior notice.
"DEBT RATING" means, with respect to a Person, the rating then in
effect by a Rating Agency for the long term senior unsecured non-credit
enhanced debt of such Person.
"DEBTOR" has the meaning set forth in the preamble.
"DEFAULT" means any Event of Default and any default, event or
condition that would, with the giving of any requisite notices and the
passage of any requisite periods of time, constitute an Event of
Default.
"DEFAULT RATE" means a rate per annum equal to twelve percent (12%).
"DESIGNATED ASSETS" means the following assets: (i) MTBE, (ii) the Mont
Belvieu Storage Facility and Grid in ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ and Galveston
Counties, Texas and (iii) the gas processing, storage and
transportation facilities at ▇▇▇▇▇▇, ▇▇▇▇ County, California.
"DIP LETTER OF CREDIT AGREEMENT" means the Debtor In Possession Letter
of Credit Agreement, dated as of the date hereof, among the Borrowers,
the Guarantors, the LC Participants, the LC Issuer, the LC Agent, and
the Collateral Agent, as amended, amended and restated, supplemented,
or otherwise modified from time to time pursuant to which the
participants thereunder will make available to the Borrowers a letter
of credit facility not to exceed at any one time outstanding
$325,000,000.
"DISCLOSURE SCHEDULE" means Schedule I hereto.
"EMPLOYEE TRANSITION AGREEMENT" means that certain employee transition
agreement, dated as of October 7, 2002, by and among the EOTT Parties
and the Enron Parties.
"ENRON" means Enron Corp., an Oregon corporation and
debtor-in-possession in the Enron Bankruptcy Proceedings.
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"ENRON BANKRUPTCY PROCEEDINGS" means the actions under the petitions
for relief filed by Enron and certain of its Affiliates under the
Bankruptcy Code in the United States Bankruptcy Court for the Southern
District of
New York, In re Enron Corp., et al, jointly administered
under Case No. 01-16034.
"ENRON PARTIES" means Enron, Enron Energy Services, Inc. a Delaware
corporation and a debtor in possession, Enron North America Corp., a
Delaware corporation and debtor in possession, Enron Pipeline Services
Company, a Delaware corporation, EGP Fuels Company, a Delaware
corporation, and Enron Gas Liquids, Inc., a Delaware corporation and a
debtor and a debtor in possession.
"ENRON SETTLEMENT AGREEMENT" means the settlement agreement, dated as
of October 7, 2002, by and among the EOTT Parties and the Enron Parties
settling, among other things, certain claims owed by each of the EOTT
Parties to the Enron Parties.
"ENVIRONMENTAL LAWS" means any and all laws relating to the environment
or to emissions, discharges, releases or threatened releases of
pollutants, contaminants, chemicals or industrial, toxic or hazardous
substances or wastes into the environment including ambient air,
surface water, ground water or land, or otherwise relating to the
manufacture, processing, distribution, use, treatment, storage,
disposal, transport or handling of pollutants, contaminants or
chemicals or industrial, toxic or hazardous substances or wastes.
"EOTT CANADA" has the meaning set forth in the preamble.
"EOTT ENERGY" means EOTT Energy Corp., a Delaware corporation.
"EOTT FINANCE CORP." means EOTT Energy Finance Corp., a Delaware
corporation and a debtor and a debtor in possession.
"EOTT GP" has the meaning set forth in the preamble.
"EOTT LIQUIDS" has the meaning set forth in the preamble.
"EOTT MLP" has the meaning set forth in the preamble.
"EOTT MLP SENIOR NOTES" means EOTT MLP's $235,000,000, in original
aggregate principal amount, of 11% Senior Notes due 2009.
"EOTT MLP SENIOR NOTES INDENTURE" means the Indenture, dated October 1,
1999, among EOTT MLP, EOTT Finance Corp., a Delaware corporation ("EOTT
FINANCE CORP."), EOTT OLP, EOTT Pipeline, EOTT Canada and the Bank of
New York, as supplemented by the EOTT MLP Supplemental Indenture.
"EOTT MLP SUPPLEMENTAL INDENTURE" means the First Supplemental
Indenture, dated October 1, 1999, among EOTT MLP, EOTT Finance Corp.,
EOTT OLP, EOTT Pipeline, EOTT Canada and The Bank of
New York.
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"EOTT PARTIES" means the Borrowers, the Guarantors and EOTT Energy.
"EOTT TERMINAL" means any storage terminal, tankage or facility owned
by any Borrower.
"EQUITYHOLDERS" means those parties holding equity interests in EOTT
MLP.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, together with all rules and regulations
promulgated with respect thereto.
"ERISA AFFILIATE" means each Debtor and all members of a controlled
group of corporations and all trades or businesses (whether or not
incorporated) under common control that, together with such Debtor, are
treated as a single employer under Section 414 of the Tax Code.
"ERISA PLAN" means any employee pension benefit plan subject to Title
IV of ERISA maintained by any ERISA Affiliate with respect to which any
Debtor has a fixed or contingent Liability.
"EVENT OF DEFAULT" shall mean the occurrence of any event described in
Section 11 of this Agreement.
"EXTENSION OF CREDIT" means the disbursement of proceeds of any Term
Loan.
"FILING DATE" has the meaning set forth in the preamble.
"FINAL ORDER" means a final order of the Bankruptcy Court in the Cases
authorizing and approving this Agreement and the other Credit Documents
under Sections 364(c) and (d) of the Bankruptcy Code and entered at a
final hearing, in form and substance satisfactory to the Administrative
Agents. The Final Order shall, among other things, provide the same
Superpriority Claims and superpriority Lien status as the Second
Interim Order.
"FIRST INTERIM ORDER" means the first interim DIP financing order of
the Bankruptcy Court in the Cases authorizing and approving this
Agreement and the other Credit Documents under Sections 364(c) and (d)
of the Bankruptcy Code and entered at the first interim hearing on
October 9, 2002.
"FISCAL QUARTER" means a three-month period ending on March 31, June
30, September 30 or December 31 of any year.
"FISCAL YEAR" means a twelve-month period ending on December 31 of any
year.
"FIXED PRICE CONTRACT" means a purchase or sale contract for crude oil,
refined petroleum products or NGLs where the price has been fixed.
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"GAAP" means those generally accepted accounting principles and
practices recognized as such by the Financial Accounting Standards
Board (or any generally recognized successor).
"GUARANTORS" has the meaning set forth in the preamble.
"HAZARDOUS MATERIALS" means any substances regulated under any
Environmental Law, whether as pollutants, contaminants or chemicals, as
industrial, toxic or hazardous substances or wastes or otherwise.
"HEDGING CONTRACT" means (i) any agreement providing for options,
swaps, floors, caps, collars, forward sales or forward purchases
involving interest rates, commodities or commodity prices, equities,
currencies, bonds or indexes based on any of the foregoing, (ii) any
option, futures or forward contract traded on an exchange and (iii) any
other derivative agreement or other similar agreement or arrangement,
excluding in the case of subsection (i), (ii) and (iii), for purposes
of Section 10(d) only, any such agreement or contract covering crude
oil, refined petroleum products or NGLs that is entered into by a
Borrower (A) in the ordinary course of business, (B) in accordance with
the then effective Risk Management Policies and (C) not for speculative
purposes.
"HIGHEST LAWFUL RATE" means, with respect to each Lender Party to whom
Obligations are owed, the maximum nonusurious rate of interest that
such Lender Party is permitted under applicable Law to contract for,
take, charge or receive with respect to such Obligations. All
determinations herein of the Highest Lawful Rate or of any interest
rate determined by reference to the Highest Lawful Rate shall be made
separately for each Lender Party as appropriate to assure that the
Credit Documents are not construed to obligate any Person to pay
interest to any Lender Party at a rate in excess of the Highest Lawful
Rate applicable to such Lender Party.
"INDEBTEDNESS" of any Person means its Liabilities (without
duplication) in any of the following categories:
(i) Liabilities for borrowed money,
(ii) Liabilities constituting an obligation to pay the deferred
purchase price of property or services,
(iii) Liabilities evidenced by a bond, debenture, note or similar
instrument,
(iv) Liabilities that would be required under GAAP to be shown on
such Person's balance sheet as a liability,
(v) Liabilities arising under Hedging Contracts (on a net basis to
the extent netting is provided for in the applicable Hedging
Contract),
(vi) Liabilities constituting principal under Capital Leases,
(vii) Liabilities arising under conditional sales or other title
retention agreements,
-10-
(viii) Liabilities owing under direct or indirect guaranties of
Liabilities of any other Person or otherwise constituting
obligations to purchase or acquire or to otherwise protect or
insure a creditor against loss in respect of Liabilities of
any other Person (such as obligations under working capital
maintenance agreements, agreements to keep-well or agreements
to purchase Liabilities, assets, goods, securities or
services), but excluding endorsements in the ordinary course
of business of negotiable instruments in the course of
collection,
(ix) Liabilities consisting of an obligation to purchase or redeem
commodities, securities or other property, if such Liabilities
arise out of or in connection with the sale or issuance of the
same or similar commodities, securities or property (for
example, repurchase agreements, mandatorily redeemable
preferred stock and sale/leaseback agreements),
(x) Liabilities with respect to letters of credit or applications
or reimbursement agreements therefor,
(xi) Liabilities with respect to banker's acceptances or
(xii) Liabilities with respect to obligations to deliver goods or
services in consideration of advance payments therefor;
provided, however, that the "INDEBTEDNESS" of any Person shall not
include Liabilities that were incurred in the ordinary course of
business by such Person on ordinary trade terms to vendors, suppliers
or other Persons providing goods and services for use by such Person in
the ordinary course of its business, unless and until such Liabilities
are outstanding more than 120 days after the date the respective goods
are delivered or the respective services are rendered, other than
Liabilities contested in good faith by appropriate proceedings, if
required, and for which adequate reserves are maintained on the books
of such Person in accordance with GAAP.
"INELIGIBLE PROFESSIONAL EXPENSES" means fees or expenses incurred by
any Person, including professionals retained by the Borrowers, the
Guarantors, the Creditors' Committee or the Bondholder's Committee, in
(A) preventing, hindering or delaying the Term Lenders', the Term
Lender Agent's or the Collateral Agent's enforcement or realization
upon any of the Collateral once the Termination Declaration Date has
occurred, (B) using cash collateral or selling any other Collateral
without the consent of the Administrative Agents (except to the extent
permitted by this Agreement), (C) incurring Indebtedness without the
consent of the Administrative Agents (except to the extent permitted by
this Agreement) and (D) objecting to or contesting in any manner, or in
raising any defenses to, the validity, extent, perfection, priority or
enforceability of the Prepetition Bank Debt or the Obligations or any
mortgages, liens or security interests with respect thereto or any
other rights or interests of the LC Issuer, the LC Participants, SCTSC,
the Term Lenders, the Administrative Agents or the Collateral Agent, or
in asserting any claims or causes of action, including, without
limitation, Avoidance Actions or equitable subordination claims against
the LC Issuer, the LC Participants, SCTSC, the Term Lenders, the
Administrative Agents or the Collateral Agent. The term does not
-11-
include fees or expenses incurred for investigation by the Borrowers or
the Guarantors (or an authorized substitute for the Borrowers or the
Guarantors if the Borrowers or the Guarantors are for some reason
unable to conduct an investigation) of claims, causes of action or
theories for litigation regarding (a) the validity, enforceability,
perfection or priority of the prepetition liens in the prepetition
collateral, (b) the validity, allowability, priority, status or amount
of the prepetition indebtedness, within 30 days following the Filing
Date or (c) the validity and enforceability of the SCTSC Purchase
Agreements (provided, that the expenses incurred for such investigation
shall not exceed $75,000).
"INITIAL CASH BUDGET" has the meaning set forth in Section 8(w).
"INITIAL FINANCIAL STATEMENTS" means the unaudited Consolidated balance
sheet of EOTT MLP and its Subsidiaries as of August 31, 2002 and the
related Consolidated statement of operations, cash flows and partners'
capital for the month ended August 31, 2002.
"INTERCREDITOR AGREEMENT" means the Intercreditor and Security
Agreement, dated as of the date hereof, among the Borrowers, the
Guarantors, the LC Agent, the LC Participants, SCTSC, the Term Lender
Agent, the Term Lenders and the Collateral Agent, as amended, amended
and restated, supplemented, or otherwise modified in accordance with
Section 10(l).
"INVESTMENT" means any investment made, directly or indirectly in any
Person, whether by acquisition of shares of capital stock, Indebtedness
or other obligations or securities or by loan, advance, capital
contribution or otherwise and whether made in cash, by the transfer of
property or by any other means.
"LAW" means any statute, law, regulation, ordinance, rule, treaty,
judgment, order, decree, permit, concession, franchise, license,
agreement or other governmental restriction of the United States or any
state or political subdivision thereof or of any foreign country or any
department, province or other political subdivision thereof.
"LC AGENT" means Standard Chartered Bank in its capacity as agent for
the LC Participants under the DIP Letter of Credit Agreement.
"LC ISSUER" means Standard Chartered Bank in its capacity as issuer of
letters of credit under the DIP Letter of Credit Agreement.
"LC PARTICIPANTS" means the Persons from time to time designated as
such participants under the DIP Letter of Credit Agreement.
"▇▇▇▇▇▇" has the meaning set forth in the preamble.
"LENDER PARTIES" means the Term Lender Agent and all Term Lenders.
"LIABILITIES" means, as to any Person, all Indebtedness, liabilities
and obligations of such Person, whether matured or unmatured,
liquidated or unliquidated, primary or secondary,
-12-
direct or indirect, absolute, fixed or contingent, and whether or not
required to be considered pursuant to GAAP.
"LIEN" means, with respect to any property or assets, any right or
interest therein of a creditor to secure Liabilities owed to it or any
other arrangement with such creditor which provides for the payment of
such Liabilities out of such property or assets or which allows such
creditor to have such Liabilities satisfied out of such property or
assets prior to the general creditors of any owner thereof, including
any lien, mortgage, security interest, pledge, deposit, production
payment, rights of a vendor under any title retention or conditional
sale agreement or lease substantially equivalent thereto, tax lien,
mechanic's or materialman's lien or any other charge or encumbrance for
security purposes, whether arising by law or agreement or otherwise,
but excluding any right of offset that arises without agreement in the
ordinary course of business. "LIEN" also means any filed financing
statement, any registration of a pledge (such as with an issuer of
uncertificated securities) or any other arrangement or action that
would serve to perfect a Lien described in the preceding sentence,
regardless of whether such financing statement is filed, such
registration is made or such arrangement or action is undertaken before
or after such Lien exists.
"MAJORITY TERM LENDERS" means the Term Lenders whose aggregate
Percentage Shares exceed fifty percent (50%) plus, so long as (i)
▇▇▇▇▇▇ is the Term Lender Agent and (ii) ▇▇▇▇▇▇ Commercial Paper, Inc.
or any other Affiliate of ▇▇▇▇▇▇ is the beneficial holder of at least
twenty-percent of the aggregate outstanding Term Loans, ▇▇▇▇▇▇, in its
capacity as Term Lender Agent.
"MATERIAL ADVERSE CHANGE" means a material and adverse change, from the
state of affairs since the Filing Date (including any such change that
may result from the settlement, discharge, release or other resolution
of, or any change that may result from any development or event
affecting any matter disclosed in the Disclosure Schedule, or as
represented or warranted in any Credit Document, including any such
change that may result from the settlement, discharge, release or other
resolution of, or any change that may result from any development or
event affecting any matter disclosed in the Disclosure Schedule) to (i)
EOTT MLP's Consolidated financial condition as set forth in the Cash
Budget, (ii) EOTT MLP's Consolidated operations, properties or
prospects, considered as a whole, (iii) the Borrowers' ability to
timely pay the Obligations or (iv) the enforceability of any Credit
Document.
"MATURITY DATE" means the earlier to occur of (i) March 31, 2003 and
(ii) the effective date of a Reorganization Plan of the Debtors that
has been confirmed by an order of the Bankruptcy Court.
"MONTHLY PAYMENT DATE" means the first Business Day of each month.
"MOODY'S" means ▇▇▇▇▇'▇ Investors Service, Inc., or its successor.
"MTBE" means the MTBE facility in ▇▇▇▇▇▇ County, Texas.
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"NGLS" means liquid hydrocarbon products extracted from a natural gas
stream, including ethane, propane, normal butane, isobutane and natural
gasoline.
"NYMEX" means the
New York Mercantile Exchange.
"OBLIGATION" means any part of the Obligations.
"OBLIGATIONS" shall mean and include any and all Indebtedness,
Liabilities and obligations of every kind, nature and description of
each Debtor to any Lender Party, or any of them, however evidenced,
arising under this Agreement or the other Credit Documents, whether now
existing or hereafter arising, whether direct or indirect, absolute or
contingent, joint and/or several, due or not due, primary or secondary,
liquidated or unliquidated, secured or unsecured, or on original,
renewed or extended terms and whether arising directly or acquired by
any Term Lender from any other party to the Credit Documents
(including, without limitation, participations or interests of any Term
Lender in the obligations of any Debtor to others), whether for
principal, interest, fees, expenses, indemnities or other amounts and
whether incurred by any Debtor as principal, surety, endorser,
guarantor, accommodation party, indemnitor or otherwise.
"OFFSETTING POSITION" means any offsetting sale or SCTSC Purchase
Agreements, an offsetting NYMEX contract, an offsetting physical
inventory position (excluding tank bottoms and pipeline linefill
inventory classified as a long term asset and working inventory not
held for resale) or an offsetting swap, collar or option contract, in
each case eliminating price risk and substantially all basis risk.
"OPEN POSITION" means, with respect to crude oil inventory or crude oil
purchase or sale contracts, any position that does not have an
Offsetting Position.
"ORDERS" means, collectively, the First Interim Order, the Second
Interim Order and the Final Order.
"OTHER PRIORITY CLAIMS" means any account payable, obligation or
liability that the Term Lender Agent has determined has or will have a
Lien upon or claim against any Cash Equivalent, Account or inventory of
any Borrower senior or equal in priority to the security interests in
favor of the Collateral Agent, in each case to the extent such Cash
Equivalent, Account or inventory of any Borrower is otherwise included
in the determination of the Borrowing Base and the included portion
thereof has not already been reduced by such Lien or claim.
"PERCENTAGE SHARE" means, with respect to any Term Lender (1) when used
in Section 2(a), the percentage set forth such Term Lender's name on
the Term Lender Schedule hereto and (2) when used otherwise, the
percentage obtained by dividing (A) the sum of the unpaid principal
balance of such Term Lender's Term Loans at the time in question by (B)
the sum of the aggregate unpaid principal balance of all Term Loans at
such time.
"PERMITTED CAPITAL EXPENDITURES" means cash Capital Expenditures made
to maintain, up to the level that exists on the Closing Date, the
operating capacity of the capital assets of Borrowers, taken as a
whole, as such assets exist on the Closing Date and not to
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exceed $12,000,000 in the aggregate during the period beginning on the
Closing Date and ending on the Termination Declaration Date.
"PERMITTED INVESTMENTS" means (i) Cash Equivalents, (ii) Investments
described in the Disclosure Schedule, and (iii) Investments by EOTT MLP
or any of its Subsidiaries in any Wholly Owned Subsidiary of EOTT MLP
that is a Borrower or a Guarantor.
"PERMITTED LIEN" shall mean any of the following:
(i) Liens in favor of the Prepetition Agent and the Prepetition
Lenders securing the Prepetition Bank Debt;
(ii) Permitted Prior Liens;
(iii) pledges or deposits of cash or securities under worker's
compensation, unemployment insurance or other social security
legislation or deposits with insurers to cover self-retention
obligations under employee life or medical insurance programs;
(iv) carriers', warehousemen's, mechanics', materialmen's,
repairmen's, landlord's or other like Liens (including,
without limitation, Liens on property of any Debtor in the
possession of storage facilities, pipelines or barges) arising
in the ordinary course of business for amounts that are not
more than 60 days past due or the validity of which is being
contested in good faith and by appropriate proceedings, if
necessary, and for which adequate reserves are maintained on
the books of any Debtor in accordance with GAAP;
(v) Liens under or with respect to accounts with brokers or
counterparties with respect to the following commodity
accounts maintained by EOTT OLP with Refco, L.L.C.: Account
Nos. 1725 43979; 1725 65803; 1725 67320; 1725 67543; 1725
72336; 1725 72611; 1725 67544 and 67544M; and L610 54999 (for
transactions effected with or through United Energy, Inc.),
consisting of cash, commodities or futures contracts, options,
securities, instruments and other like assets;
(vi) deposits of cash or securities to secure the performance of
bids, trade contracts (other than for borrowed money), leases,
statutory or regulatory obligations, surety and appeal bonds,
performance bonds and other obligations of a like nature
incurred in the ordinary course of business;
(vii) Liens in respect of existing Capital Leases but encumbering
only the property under lease;
(viii) statutory Liens related to the purchase of crude oil by a
Borrower;
(ix) Liens permitted by the Security Documents and the Orders;
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(x) Liens for taxes, assessments or governmental charges or claims
that are not yet delinquent or that are being contested in
good faith and by appropriate proceedings, if necessary, and
for which adequate reserves are maintained on the books of any
Debtor in accordance with GAAP; and
(xi) easements, rights-of-way, restrictions, minor defects and
irregularities in title and other similar charges or
encumbrances not interfering in any material respect with the
business of any Debtor.
"PERMITTED PRIOR LIENS" means valid, perfected and otherwise
unavoidable Liens existing as of the Filing Date, senior to the
prepetition Liens in respect of the Prepetition Credit Agreement, and
Liens otherwise approved in writing by the Administrative Agents. The
term includes the priming Lien granted to the Collateral Agent pursuant
to the terms of this Credit Agreement and the Orders and securing the
Obligations.
"PERSON" means an individual, corporation, partnership, limited
liability company, association, joint stock company, trust or trustee
thereof, estate or executor thereof, unincorporated organization or
joint venture, Tribunal or any other legally recognizable entity.
"PREPETITION BANK DEBT" has the meaning set forth in the fourth
recital.
"PREPETITION CREDIT AGREEMENT" has the meaning set forth in the third
recital.
"PREPETITION LENDERS" has the meaning set forth in the third recital.
"PREPETITION LETTERS OF CREDIT" means each of the letters of credit
issued, extended or renewed by the Prepetition LC Issuer under the
Prepetition Credit Agreement.
"PREPETITION LOANS" means each of the loans made by the Prepetition
Lenders under the Prepetition Credit Agreement.
"PRESCRIBED FORMS" has the meaning set forth in Section 3(g)(iii).
"PRIORITY CLAIMS" means any Liabilities that will give rise to claims
against the Debtors that are senior or equal in priority to the
Superpriority Claims in favor of the Lender Parties, the LC
Participants and the LC Agent.
"PRIORITY PROFESSIONAL EXPENSES" means allowed and unpaid fees, costs
and reasonable expenses of professionals retained in the Cases pursuant
to Sections 327 and 1103 of the Bankruptcy Code consisting of
attorneys, accountants, financial advisors, and consultants retained by
the Borrowers, the Guarantors, the Creditors' Committee or the
Bondholder's Committee; provided, however, that (i) Ineligible
Professional Expenses and the fees, costs and expenses of third-party
professionals employed by the members of the Creditors' Committee or
the Bondholder's Committee shall not be included, and (ii) the amount
of Priority Professional Expenses shall not exceed the applicable
Professional Expense Cap if in effect at the time of reference thereto.
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"PROFESSIONAL EXPENSE CAP" If, at the time of reference thereto, the
Termination Declaration Date has not occurred, there is no Professional
Expense Cap. If, at the time of reference thereto, the Termination
Declaration Date has occurred, the Professional Expense Cap is the
aggregate sum of $2,000,000, whether the fees and expenses are allowed
and unpaid at the time of the Termination Declaration Date or are
incurred before or after the Termination Declaration Date. The term
includes any holdbacks required by the Bankruptcy Court. All payments
of Priority Professional Expenses made on and after the Termination
Declaration Date shall reduce the Professional Expense Cap dollar for
dollar.
"RATING AGENCY" means either S&P or ▇▇▇▇▇'▇.
"RECEIVABLES PURCHASE AGREEMENT" means that certain Amended and
Restated Receivables Purchase Agreement, dated as of the date hereof,
by and among SCTSC and EOTT OLP (as amended, amended and restated,
supplemented or otherwise modified from time to time).
"REGISTER" has the meaning set forth in Section 15(e).
"REGULATION D" means Regulation D of the Board of Governors of the
Federal Reserve System as from time to time in effect.
"REIMBURSABLE TAXES" has the meaning set forth in Section 3(d)(i).
"RELEASE" has the meaning given such term in 42 U.S.C.
Section 9601(22).
"REORGANIZATION PLAN" means a plan or plans of reorganization in the
Cases.
"RISK MANAGEMENT POLICIES" means, with respect to any Borrower, such
risk management procedures and internal controls and such trading
policies with such Open Position limits, with such changes thereto in
effect at any time after the Closing Date, as are then currently
approved by the EOTT Energy board of directors.
"S&P" means Standard & Poor's Ratings Group (a division of McGraw Hill,
Inc.) or its successor.
"SCTSC" means, Standard Chartered Trade Services Corporation, a
Delaware corporation, as purchaser under the SCTSC Purchase Agreements.
"SCTSC PURCHASE AGREEMENTS" means, collectively, the Crude Oil Purchase
Agreement and the Receivables Purchase Agreement.
"SECOND INTERIM ORDER" means a second interim DIP financing order of
the Bankruptcy Court in the Cases authorizing and approving this
Agreement and the other Credit Documents under Sections 364(c) and (d)
of the Bankruptcy Code and entered at the second interim hearing, in
form and substance satisfactory to the Administrative Agents and
substantially in the form attached hereto as Exhibit J.
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"SECURITY" means any rights, properties or interests of any Lender
Party and the Collateral Agent under the Credit Documents, which
provide recourse or other benefits to any Lender Party or the
Collateral Agent in connection with the Obligations or the non-payment
or non-performance thereof, including any Collateral, guaranties of the
payment of any Obligation, bonds, surety agreements, keep-well
agreements, letters of credit, rights of subrogation, rights of offset
and other rights provided for thereunder.
"SECURITY DOCUMENTS" means the Intercreditor Agreement, the instruments
listed in the Security Schedule and all other security agreements,
deeds of trust, mortgages, chattel mortgages, pledges, guaranties,
financing statements, continuation statements, extension agreements,
Control Agreements and other agreements or instruments now, heretofore
or hereafter delivered by any Debtor to the Collateral Agent in
connection with this Agreement or any transaction contemplated hereby
to secure or guarantee the payment of any part of the Obligations or
the performance of any Debtor's other duties and obligations under the
Credit Documents.
"SECURITY SCHEDULE" means Schedule III hereto.
"SUBSIDIARY" means, with respect to any Person, any corporation,
association, partnership, limited liability company, joint venture or
other business or corporate entity, enterprise or organization which is
directly or indirectly (through one or more intermediaries) controlled
or owned more than 50% by such Person.
"SUPERPRIORITY CLAIM" means a claim against a Borrower or its estate in
its Case which is an administrative claim having priority over (i) any
and all allowed administrative expenses and (ii) unsecured claims now
existing or hereafter arising, including, without limitation,
administrative expenses of the kind specified in Section 503(b),
506(c), or 507(b) of the Bankruptcy Code.
"TAX CODE" means the Internal Revenue Code of 1986, as amended from
time to time, together with all rules and regulations promulgated with
respect thereto.
"TERM LENDER AGENT" has the meaning set forth in the preamble.
"TERM LENDERS" each signatory hereto other than any Debtor that is a
party hereto and other than ▇▇▇▇▇▇, in its capacity as Term Lender
Agent, and the successors of each such party.
"TERM LENDER SCHEDULE" means Schedule II hereto.
"TERM LOANS" has the meaning set forth in Section 2(a)(i).
"TERM LENDER AGENT'S SPECIAL COUNSEL" means ▇▇▇▇▇▇▇▇ & Knight LLP or
such other counsel as may be approved by the Term Lender Agent.
"TERM NOTES" means the promissory notes of Borrowers dated the date
hereof and made payable to the order of Term Lenders in accordance with
their respective Percentage
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Shares, all of which shall evidence the aggregate joint and several
Indebtedness of Borrowers in respect of the Term Loans.
"TERMINATION DECLARATION DATE" means the earlier to occur of (i) the
date on which the Term Lender Agent declares all Obligations to be due
and payable on account of an Event of Default and (ii) the Maturity
Date.
"TERMINATION EVENT" means (i) the occurrence with respect to any ERISA
Plan of (A) a reportable event described in Sections 4043(c)(5) or (6)
of ERISA or (B) any other reportable event described in Section 4043(c)
of ERISA other than a reportable event not subject to the provision for
30-day notice to the Pension Benefit Guaranty Corporation pursuant to a
waiver by such corporation under Section 4043(a) of ERISA, (ii) the
withdrawal of any ERISA Affiliate from an ERISA Plan during a plan year
in which it was a "substantial employer" as defined in Section
4001(a)(2) of ERISA, (iii) the filing of a notice of intent to
terminate any ERISA Plan or the treatment of any ERISA Plan amendment
as a termination under Section 4041 of ERISA, (iv) the institution of
proceedings to terminate any ERISA Plan by the Pension Benefit Guaranty
Corporation under Section 4042 of ERISA or (v) any other event or
condition that might constitute grounds under Section 4042 of ERISA for
the termination of, or the appointment of a trustee to administer, any
ERISA Plan.
"TIER-A TERM LOANS" means Term Loans in the aggregate principal amount
of $50,000,000 evidenced, or to be evidenced, by Term Notes in the form
of Exhibit A-1.
"TIER-B TERM LOANS" means Term Loans in the aggregate principal amount
of $25,000,000 evidenced, or to be evidenced, by Term Notes in the form
of Exhibit A-2.
"TRIBUNAL" means any government, any arbitration panel, any court or
any governmental department, commission, board, bureau, agency or
instrumentality of the United States of America or any state, province,
commonwealth, nation, territory, possession, county, parish, town,
township, village or municipality, whether now or hereafter constituted
or existing.
"UCC" means the Uniform Commercial Code as in effect in the State of
New York.
"WEEKLY COMPLIANCE CERTIFICATE" means a certificate in the form of
Exhibit I duly completed and certified by an authorized officer of EOTT
Energy.
"WHOLLY OWNED SUBSIDIARY" means any Subsidiary of a Person, all of the
issued and outstanding stock, limited liability company membership
interests or partnership interests of which (including all rights or
options to acquire such stock or interests) are directly or indirectly
(through one or more Subsidiaries) owned by such Person, excluding any
general partner interests owned by EOTT GP in any such Subsidiary that
is a partnership, such general partner interests not to exceed two
percent (2%) of the aggregate ownership interests of any such
partnership and directors' qualifying shares if applicable.
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2. THE TERM LOANS.
(a) Commitment to Lend; Notes.
(i) Subject to the terms and conditions hereof, each Term
Lender agrees to make a single advance (collectively, the "TERM LOANS") to
Borrowers on or before October 18, 2002, in an amount equal to such Term
Lender's Percentage Share of $75,000,000.
(ii) The obligation of Borrowers to repay to each Term Lender
the amount of the Term Loans made by such Term Lender, together with interest
accruing in connection therewith, shall be evidenced by two Term Notes made by
Borrowers payable to the order of such Term Lender in the form of Exhibit A-1
and Exhibit A-2 with appropriate insertions. One such Note will evidence
two-thirds of such Term Lender's Term Loans, will be in the form of Exhibit A-1
and will state that it is a "Tier-A Term Note". The other Note will evidence
one-third of such Term Lender's Term Loans, will be in the form of Exhibit A-2
and will state that it is a "Tier-B Term Note." Interest on each Term Note shall
accrue as provided herein and therein. The Obligations shall be due and payable
as provided in the Term Notes and herein. Borrowers shall be jointly and
severally liable for the payment of the Obligations.
(b) Requesting Term Loans.
The Borrower Representative must give to each Term Lender a written
request for the Term Loans to be received by the Term Lender Agent on or before
the Closing Date. Such written request must be made in the form and substance of
the Borrowing Notice attached hereto as Exhibit B, duly completed. If all
conditions precedent to the Term Loans have been met, each Term Lender will on
the date requested promptly wire transfer its Percentage Share of $75,000,000 in
immediately available funds as provided herein.
(c) Conditions Precedent to Extension of Credit.
(i) Extensions of Credit. No Term Lender has any obligation to
make the Extension of Credit unless the following conditions precedent have been
satisfied:
(1) Restructuring Agreement. The restructuring agreement
by and among the Borrowers, the Prepetition Lenders,
SCTSC, the Bondholders, and the Enron Parties (the
"RESTRUCTURING AGREEMENT") has been executed by at
least 66% of the Bondholders and shall be in full
force and effect. No party to the Restructuring
Agreement has exercised any termination rights with
respect thereto.
(2) SCTSC Purchase Agreements. Each of the SCTSC Purchase
Agreements shall have been assumed by the Borrowers
and approved by the Bankruptcy Court pursuant to the
Second Interim Order.
(3) Enron Settlement Agreement. The Enron Settlement
Agreement, and Employee Transition Agreement and any
other documents executed in connection with the
foregoing, shall have been executed by the EOTT
Parties and the Enron Parties.
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(4) Credit Documents. Each of the Credit Documents shall
have been duly executed and delivered by the
respective parties thereto, shall be in full force
and effect and shall be in form and substance
satisfactory to the Term Lender Agent and the Term
Lenders. The Term Lender Agent shall have received a
fully executed copy of each such document.
(5) Certified Copy of Charter Documents. The Term Lender
Agent shall have received from each of the Borrowers
and the Guarantors a copy, certified by a duly
authorized officer of such Person to be true and
complete as of the Closing Date, of each of (A) its
charter or other incorporation documents as in effect
on such date of certification and (B) its by-laws as
in effect on such date.
(6) Corporate Action. All corporate action necessary for
the valid, execution, delivery and performance by
each of the Borrowers of this Agreement and the other
Credit Documents to which it is or is to become a
party shall have been duly and effectively taken, and
evidence thereof satisfactory to the Term Lender
Agent and the Term Lenders shall have been provided
to the Term Lender Agent.
(7) Incumbency Certificate. The Term Lender Agent shall
have received from each of the Borrowers an
incumbency certificate, dated as of the Closing Date,
signed by a duly authorized officer of such Borrower,
and giving the name and bearing a specimen signature
of each individual who shall be authorized: (A) to
sign, in the name and on behalf of the each such
Borrower, each of the Credit Documents to which such
Borrower is or is to become a party, (B) to request
the Term Loans, and (C) to give notices and to take
other action on its behalf under the Credit
Documents.
(8) Certificates of Insurance. The Collateral Agent shall
have received (A) a certificate of insurance form an
independent insurance broker dated as of the Closing
Date, identifying insurers, types of insurance,
insurance limits, and policy terms, and otherwise
describing the insurance obtained in accordance with
the provisions hereof and the Security Documents and
(B) certified copies of all policies evidencing such
insurance (or certificates therefor signed by the
insurer or an agent authorized to bind the insurer).
(9) Opinions of Counsel. The Term Lender Agent shall have
received a favorable opinion addressed to the Term
Lender Agent, dated as of the Closing Date, in form
and substance satisfactory to the Term Lender Agent
and the Term Lenders, from counsel to the Borrowers.
(10) Payment of Fees. The Borrowers shall have paid to the
Term Lender Agent, for the account of the Term
Lenders and the Term Lender Agent, as applicable, all
accrued and unpaid fees, costs and expenses incurred
by the Term Lenders and the Term Lender Agent to the
extent invoiced.
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(11) Validity of Liens. The Second Interim Order, upon
entry thereof, shall be effective to create in favor
of the Collateral Agent, a legal, valid, and
enforceable first priority (except for Permitted
Liens entitled to priority under applicable law) Lien
upon the Collateral. All filings, recordings,
deliveries of instruments and other actions necessary
or desirable in the opinion of the Collateral Agent
to protect and preserve such Liens shall have been
duly effected. The Collateral Agent shall have
received evidence thereof in form and substance
satisfactory to the Collateral Agent, the
Administrative Agents and the Term Lenders.
(12) Cash Budget. The Term Lender Agent and each Term
Lender shall have received (A) the Cash Budget, and
(B) rolling sixteen-week weekly projections and cash
flow forecasts for the Borrowers through February 1,
2003.
(13) First Day Orders. All cash management and other
"first day orders" submitted for entry on or about
the date of the commencement of the Cases shall be in
form and substance satisfactory to the Term Lender
Agent and the Term Lenders.
(14) DIP Letter of Credit Agreement. The DIP Letter of
Credit Agreement, satisfactory to the Term Lender
Agent and the Term Lenders shall concurrently be
executed.
(15) Funding Conditions. All the conditions precedent to
extension of credit under the DIP Letter of Credit
Agreement shall concurrently be satisfied or waived .
(ii) Extensions of Credit. In addition to the foregoing, no
Term Lender has any obligation to make the Extension of Credit unless the
following conditions precedent have been satisfied:
(1) Second Interim Order. The Bankruptcy Court shall have
entered the Second Interim Order and such Second
Interim Order shall be in full force and effect and
shall not have been amended, modified, stayed or
reversed. If the Second Interim Order is the subject
of a pending appeal in any respect, such Second
Interim Order, the Extensions of Credit and the
performance by any of the Borrowers of any of the
Obligations shall not be the subject of a presently
effective stay pending appeal. The Borrowers, the
Term Lender Agent and the Term Lenders shall be
entitled to rely in good faith upon the Second
Interim Order notwithstanding objection thereto or
appeal therefrom by any interested party. The
Borrowers, the Term Lender Agent and the Term Lenders
shall be permitted and required to perform their
respective obligations in compliance with this
Agreement, notwithstanding any such obligation or
appeal unless the Second Interim Order has been
stayed by a court of competent jurisdiction.
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(2) Representations True; No Event of Default. Each of
the representations and warranties of any of the
Borrowers contained in this Agreement, the other
Credit Documents or in any document or instrument
delivered pursuant to or in connection with this
Agreement shall be true as of which they were made
and shall also be true at and as of the time of the
making of such Extension of Credit, with the same
effect as if made at and as of that time (except to
the extent changes resulting from transactions
contemplated or permitted by this Agreement and the
other Credit Documents and the to the extent that
such representations and warranties relate expressly
to an earlier date) and no Default or Event of
Default shall have occurred and be continuing or
would result from the making of such Extension of
Credit.
(3) No Material Adverse Change. No Material Adverse
Change shall have occurred.
(4) No Legal Impediment. No change shall have occurred in
any Law or regulations thereunder or interpretations
thereof that in the reasonable opinion of any Term
Lender would make it illegal for such Term Lender to
make such Extension of Credit.
(5) Governmental Regulation. Each Term Lender shall have
received such statements in substance and form
reasonably satisfactory to such Term Lender as such
Term Lender shall require for the purpose of
compliance with any applicable regulations of the
Comptroller of the Currency or the Board of Governors
of the Federal Reserve System.
(6) Proceedings and Documents. All proceedings in
connection with the transactions contemplated by this
Agreement, the other Credit Documents and all other
documents incident thereto shall be reasonably
satisfactory in substance and in form to the Term
Lenders and to the Term Lender Agent and the Term
Lender Agent's Special Counsel, and the Term Lenders,
the Term Lender Agent and such counsel shall have
received all information and such counterpart
originals or certified or other copies of such
documents as the Term Lender Agent shall reasonably
request.
(7) No Challenge. No proceeding shall have been brought
by the Debtors to challenge (a) any of the Liens
granted pursuant to the Intercreditor Agreement or
the Orders or (b) the lien priorities set forth in
the Intercreditor Agreement.
(d) Use of Proceeds.
(i) The proceeds of the Term Loans shall be used as follows:
(i) approximately $20,000,000 shall be paid to the Prepetition Lenders
to refinance the Prepetition Loans, (ii) a portion shall be used to pay
the fees and expenses of the Term Lenders (including
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counsel fees and expenses) and the Term Lender Agent's Special Counsel,
and (iii) the balance shall be used by Borrowers as provided herein and
in the Intercreditor Agreement.
(ii) In no event shall the proceeds of any Term Loan be used
directly or indirectly by any Person for personal, family, household or
agricultural purposes, (A) for the purpose, whether immediate, incidental or
ultimate, of purchasing, acquiring or carrying any "margin stock" (as such term
is defined in Regulation U promulgated by the Board of Governors of the Federal
Reserve System) or (B) to extend credit to others directly or indirectly for the
purpose of purchasing or carrying any such margin stock. The Borrowers represent
and warrant that no Borrower is engaged principally in, or has as one of any
Borrower's important activities, the business of extending credit to others for
the purpose of purchasing or carrying such margin stock.
(e) Mandatory Prepayments.
(i) The Borrowers shall make any prepayment or other payment
required from time to time under the Intercreditor Agreement.
(ii) If at any time prior to the Termination Declaration Date,
the Borrowers shall receive or be entitled to receive any proceeds with
respect to any sale or issuance by the Borrowers of (a) any
Indebtedness not permitted by Section 10(a) or (b) any additional
equity, the Borrowers shall pay to the Collateral Agent, an amount
equal to such proceeds to be applied in accordance with the Cash
Waterfall.
(iii) If at any time prior to the Termination Declaration
Date, the Borrowers shall receive or be entitled to receive proceeds of
any Designated Assets, the Borrowers shall pay to the Collateral Agent,
an amount equal to such proceeds, to be applied by the Collateral Agent
in accordance with the Cash Waterfall.
(iv) Any amounts prepaid pursuant to this Section shall be in
addition to, and not in lieu of, all payments otherwise required to be
paid under the Credit Documents at the time of such prepayment.
(f) Optional Prepayment of Term Loans.
The Borrowers may, upon five Business Days' notice to the Term Lender
Agent (and the Term Lender Agent will promptly give notice to the other Term
Lenders), from time to time and without premium or penalty, prepay the Term
Loans in whole or in part, so long as the aggregate amount of all partial
prepayments of principal on the Term Loans equals $5,000,000 or any higher
integral multiple thereof. Any amounts prepaid pursuant to this Section shall be
in addition to, and not in lieu of, all payments otherwise required to be paid
under the Credit Documents at the time of such prepayment. Any such payment will
be paid to the Collateral Agent for application in accordance with the Cash
Waterfall and, in any event, shall be applied first to the Tier-A Term Loans and
then to the Tier-B Term Loans.
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(g) Interest Rates and Fees.
(i) The Obligations under the Term Notes shall bear interest
as provided therein.
(ii) Upon the occurrence and during the continuance of a
Default or Event of Default, all Obligations shall bear interest on
each day outstanding at the Default Rate.
(iii) Borrowers will pay to Term Lender Agent, for its own
account, an arrangement fee of $100,000, which fee shall be fully
earned and due and payable on the Closing Date. The amount of such
arrangement fee shall be reduced by the amounts received and retained
by the Term Lender Agent pursuant to that certain letter agreement
dated September 30, 2002, between the Term Lender Agent and EOTT OLP.
(iv) In consideration of each Term Lender's commitment to fund
its Percentage Share of the Term Loans, Borrowers will pay to Term
Lender Agent, for the account of each Term Lender in accordance with
such Term Lender's Percentage Share, a facility fee in the aggregate
amount of $750,000, which fee shall be fully earned and due and payable
on the Closing Date.
(v) In consideration of Term Lenders' Extension of Credit,
Borrowers will pay to Term Lender Agent, for the account of each Term
Lender in accordance with such Term Lender's Percentage Share, a
deferred financing fee in the aggregate amount of $2,000,000 on, at
Borrowers' option, either (1) the Closing Date or (2) the earlier to
occur of (A) the Maturity Date and (B) the date the Term Loans are paid
in full (whether by prepayment or upon acceleration). In the event
Borrowers prepay the Term Loans in full prior to the Maturity Date and
no Event of Default is then continuing, the aggregate amount of the
financing fee shall be reduced to $1,000,000. The deferred financing
fee shall be fully earned on the Closing Date.
3. PAYMENTS TO TERM LENDERS.
(a) General Procedures. The Debtors will make each payment
that they owe under the Credit Documents (other than fees payable to the Lender
Parties on the Closing Date) to the Collateral Agent for the account of the
Lender Party to whom such payment is owed in lawful money of the United States
of America, without set-off, deduction or counterclaim and in immediately
available funds. Each such payment must be received by the Collateral Agent not
later than noon,
New York,
New York time, on the date such payment becomes due
and payable. Any payment received by the Collateral Agent after such time will
be deemed to have been made on the next following Business Day. Should any such
payment become due and payable on a day other than a Business Day, the maturity
of such payment shall be extended to the next succeeding Business Day, and, in
the case of a payment of principal or past due interest, interest shall accrue
and be payable thereon for the period of such extension in the Credit Document
under which such payment is due. Each payment under a Credit Document shall be
due and payable at the place provided therein. When the Collateral Agent
collects or receives money on account of the Obligations, the Collateral Agent
shall distribute all money so collected or received to each Lender Party in
accordance with the Cash Waterfall.
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(b) Payment Obligations Absolute. Notwithstanding any payment
by the Debtors to the Collateral Agent pursuant to Section 3(a), nothing
contained in this Agreement is intended to or shall (a) impair, as among the
Debtors and the Lender Parties, the obligation of the Debtors, which is absolute
and unconditional, to pay to the Lender Parties any Obligations payable by the
Debtors under this Agreement or any other Credit Document as and when the same
shall become due and payable in accordance with their respective terms, or (b)
prevent the Lender Parties from exercising all remedies otherwise permitted by
applicable law upon default under this Agreement or any other Credit Document,
subject to the Intercreditor Agreement and the Orders.
(c) Application of Payments made to Term Lender Agent. Subject
to the provisions of the Intercreditor Agreement, funds received by the Term
Lender Agent in accordance with the Cash Waterfall shall be applied as follows:
(1) first, to pay expenses incurred by the Term Lender
Agent;
(2) second, for the payment of interest on the Tier-A
Term Loans which is then due;
(3) third, to the payment of required principal payments
on the Tier-A Term Loans which are then due;
(4) fourth, to the payment of interest on the Tier-B Term
Loans which is then due;
(5) fifth, to the payment of required principal payments
on the Tier-B Term Loans which are then due; and
(6) last, for the payment or prepayment of any other
Obligations.
If any Term Lender owes payments to the Term Lender Agent hereunder,
any amounts otherwise distributable under this Section to such Term
Lender shall be deemed to belong to Term Lender Agent to the extent of
such unpaid payments, and the Term Lender Agent shall apply such
amounts to make such unpaid payments rather than distribute such
amounts to such Term Lender. All distributions of amounts described in
subsections 2 through 5 shall be made by Term Lender Agent to each Term
Lender in accordance with such Term Lender's Percentage Share.
(d) Capital Reimbursement. If either (i) the introduction or
implementation of or the compliance with or any change in or in the
interpretation of any Law or (ii) the introduction or implementation of or the
compliance with any request, directive or guideline from any central bank or
other governmental authority (whether or not having the force of Law) affects or
would affect the amount of capital required or expected to be maintained by any
Lender Party or any Person controlling any Lender Party, then, within five
Business Days after demand by such Lender Party, Borrowers will pay to such
Lender Party, from time to time as specified by such Lender Party, such
additional amount or amounts as such Lender Party shall determine to be
appropriate to compensate such Lender Party or any Person controlling such
Lender Party in light of such circumstances, to the extent that such Lender
Party reasonably determines that the amount of any such capital would be
increased or the rate of return on any such capital would be
-26-
reduced by, or in whole or in part based on, the existence of the face amount of
such Lender Party's Term Loans.
(e) Increased Cost of Term Loans. If any applicable Law
(whether now in effect or hereinafter enacted or promulgated, including
Regulation D) or any interpretation or administration thereof by any
governmental authority charged with the interpretation or administration thereof
(whether or not having the force of Law):
(i) shall change the basis of taxation of payments to any
Lender Party of any principal, interest or other amounts attributable
to any Term Loan or otherwise due under this Agreement in respect of
any Term Loan (other than taxes imposed on, or measured by, the overall
net income of such Lender Party or any Applicable Lending Office of
such Lender Party by any jurisdiction in which such Lender Party or any
such Applicable Lending Office is located); or
(ii) shall change, impose, modify, apply or deem applicable
any reserve, special deposit or similar requirements in respect of any
Term Loan or against assets of, deposits with or for the account of, or
credit extended by, such Lender Party; or
(iii) shall impose on any Lender Party any other condition
affecting any Term Loan, the result of which is to increase the cost to
any Lender Party of making any Term Loan or to reduce the amount of any
sum receivable by any Lender Party in respect of any Term Loan by an
amount deemed by any Lender Party to be material,
then such Lender Party shall promptly notify the Term Lender Agent and
the Borrower Representative in writing of the happening of such event
and of the amount required to compensate such Lender Party for such
event (on an after-tax basis, taking into account any taxes on such
compensation), whereupon Borrower shall, within five Business Days
after demand therefor by such Lender Party, pay such amount to the Term
Lender Agent for the account of such Lender Party.
(f) Notice; Change of Applicable Lending Office. A Lender
Party shall notify the Borrower Representative of any event occurring after the
date of this Agreement that will entitle such Lender Party to compensation under
Section 3(d) or (e) as promptly as practicable, but in any event within 90 days
after such Lender Party obtains actual knowledge thereof; provided, however,
that (i) if such Lender Party fails to give such notice within 90 days after it
obtains actual knowledge of such an event, such Lender Party shall, with respect
to compensation payable pursuant to Section 3(d) or (e) in respect of any costs
resulting from such event, only be entitled to payment under Section 3(d) or (e)
for costs incurred from and after the date 90 days prior to the date that such
Lender Party does give such notice and (ii) such Lender Party will designate a
different Applicable Lending Office if such designation will avoid the need for,
or reduce the amount of, such compensation and will not, in the sole opinion of
such Lender Party, be disadvantageous to such Lender Party, except that such
Lender Party shall have no obligation to designate an Applicable Lending Office
located in the United States of America. Each Lender Party will furnish to the
Borrower Representative a certificate setting forth the basis and amount of each
request by such Lender Party for compensation under Section 3 (d) or (e).
-27-
(g) Reimbursable Taxes.
Borrowers covenant and agree that:
(i) Borrowers will indemnify each Lender Party against and
reimburse each Lender Party for all present and future stamp and other
taxes, levies, costs and charges whatsoever imposed, assessed, levied
or collected on or in respect of this Agreement (whether or not legally
or correctly imposed, assessed, levied or collected), excluding,
however, any taxes imposed on or measured by the overall net income of
such Lender Party or any Applicable Lending Office of such Lender Party
by any jurisdiction in which such Lender Party or any such Applicable
Lending Office is located (all such non-excluded taxes, levies, costs
and charges being collectively called "REIMBURSABLE TAXES" in this
Section). Such indemnification shall be on an after-tax basis, taking
into account any taxes imposed on the amounts paid as indemnity.
(ii) All payments on account of the principal of, and interest
on, each Lender Party's Term Loan, and all other amounts payable by
Borrowers to any Lender Party hereunder, shall be made in full without
set-off or counterclaim and shall be made free and clear of and without
deductions or withholdings of any nature by reason of any Reimbursable
Taxes, all of which will be for the account of Borrowers. In the event
of Borrowers being compelled by Law to make any such deduction or
withholding from any payment to any Lender Party, Borrowers shall pay
on the due date of such payment, by way of additional interest, such
additional amounts as are needed to cause the amount receivable by such
Lender Party after such deduction or withholding to equal the amount
which would have been receivable in the absence of such deduction or
withholding. If Borrowers shall make any deduction or withholding as
aforesaid, Borrowers shall within 60 days thereafter forward to such
Lender Party an official receipt or other official document evidencing
payment of such deduction or withholding.
(iii) Notwithstanding the foregoing provisions of this
Section, Borrowers shall be entitled, to the extent they are required
to do so by Law, to deduct or withhold (and not to make any
indemnification or reimbursement for) income or other similar taxes
imposed by the United States of America (other than any portion thereof
attributable to a change in federal income tax Laws effected after the
date hereof) from interest, fees or other amounts payable hereunder for
the account of any Lender Party, other than Lender Party (A) who is a
U.S. person for Federal income tax purposes or (B) who has the
Prescribed Forms on file with the Term Lender Agent (with copies
provided to the Borrower Representative) for the applicable year to the
extent deduction or withholding of such taxes is not required as a
result of the filing of such Prescribed Forms; provided, however, that
if Borrower shall so deduct or withhold any such taxes, it shall
provide a statement to the Term Lender Agent and such Lender Party,
setting forth the amount of such taxes so deducted or withheld, the
applicable rate and any other information or documentation which such
Lender Party may reasonably request for assisting such Lender Party to
obtain any allowable credits or deductions for the taxes so deducted or
withheld in the jurisdiction or jurisdictions in which such Lender
Party is subject to tax. As used in this Section, "PRESCRIBED FORMS"
means such duly executed forms or statements, and in such number of
copies, which may, from time to time, be prescribed
-28-
by Law and which, pursuant to applicable provisions of (i) an income
tax treaty between the United States and the country of residence of
such Lender Party providing the forms or statements, (ii) the Tax Code
or (iii) any applicable rules or regulations thereunder, permit
Borrowers to make payments hereunder for the account of such Lender
Party free of such deduction or withholding of income or similar taxes.
4. INTENTIONALLY OMITTED.
5. INTENTIONALLY OMITTED.
6. INTENTIONALLY OMITTED.
7. OTHER ACTIONS OF DEBTORS.
(a) Each Debtor shall at any time and from time to time
take such steps as the Term Lender Agent may request
for the Collateral Agent to (i) obtain an
acknowledgment, in form and substance satisfactory to
the Collateral Agent, of any bailee having possession
of any of the Collateral that the bailee holds such
Collateral for the Collateral Agent, (ii) obtain
"control" of any investment property, deposit
accounts, letter-of-credit rights or electronic
chattel paper (as such terms are defined in Article 9
of the UCC with corresponding provisions in Sections
9-104, 9-105, 9-106 and 9-107, relating to what
constitutes "control" for such items of Collateral),
with any agreements establishing control to be in
form and substance satisfactory to the Collateral
Agent, and (iii) otherwise insure the continued
perfection and priority of the Collateral Agent's
security interest in any of the Collateral and of the
preservation of its rights therein.
(b) Each Debtor shall at any time and from time to time
take such steps as the Collateral Agent may request
with respect to the creation and perfection of valid,
enforceable, first priority mortgage Liens on and/or
security interests in any real property or fixtures
included in the Collateral owned or leased by such
Debtor, including, without limitation, (i) the
execution, delivery, acknowledgement, filing and
recordation of such mortgages, deeds of trust,
fixture filings and similar instruments as the
Collateral Agent deems necessary or desirable to the
granting of a valid, enforceable first priority
mortgage Lien on any such property or fixtures and
(ii) the delivery of such mortgagee's title
insurance, title opinions and other legal opinions as
the Collateral Agent deems necessary or desirable to
better confirm the granting to the Collateral Agent
by the applicable Debtor of such Lien on such
Debtor's real property or fixtures included in the
Collateral owned or leased by such Debtor.
(c) Nothing contained in this Agreement shall be
construed to narrow the scope of the Collateral
Agent's security interest in any of the Collateral or
the perfection or priority thereof or to impair or
otherwise limit any of the rights, powers, privileges
or remedies of the Collateral Agent hereunder.
-29-
8. REPRESENTATIONS AND WARRANTIES. Each Debtor hereby makes the following
representations and warranties, each of which is a continuing representation and
warranty, the continuing truth and accuracy of each of such representations and
warranties being a continuing condition of financing of Borrowers by the Term
Lenders:
(a) Such Debtor is duly organized, formed or incorporated
and validly existing under the Laws of its
jurisdiction of organization or incorporation, having
all powers required to carry on its business. Such
Debtor has the partnership, corporate or limited
liability company, as applicable, power to execute,
deliver and perform the terms and provisions of this
Agreement and the other Credit Documents. Such Debtor
has taken or caused to be taken all necessary
partnership, corporate or limited liability company,
as applicable, action to authorize the execution,
delivery and performance of this Agreement and the
other Credit Documents. Each Borrower is duly
authorized to borrow funds hereunder.
(b) Except as set forth in Section 8(b) of the Disclosure
Schedule, upon entry of the Second Interim Order,
this Agreement and the other Credit Documents
constitute and will constitute legal, valid and
binding obligations of such Debtor, enforceable in
accordance with their respective terms.
(c) Such Debtor is in material compliance with the
requirements of all applicable laws, rules,
regulations and orders of any governmental authority
or Tribunal relating to its business as presently
conducted or contemplated, including, without
limitation, all permits, licensing and approval
requirements; ERISA; the Tax Code; all limitations,
restrictions, conditions, standards, prohibitions,
requirements, obligations, schedules and timetables
contained in any Environmental Law, or in any
regulation, code, plan, order, decree, judgment,
injunction, notice or demand letter issued, entered,
promulgated or approved thereunder, except as set
forth in Section 8(c) of the Disclosure Schedule and
to the extent that all such instances of
noncompliance (if any) in the aggregate could not
cause a Material Adverse Change.
(d) No action of, or filing with, any governmental or
public body or authority (other than as set forth in
Section 8(d) of the Disclosure Schedule) is required
in connection with the execution, delivery and
performance of this Agreement, the other Credit
Documents or any of the instruments or documents to
be delivered pursuant hereto or thereto.
(e) The execution and delivery by such Debtor of the
Credit Documents to which it is a party, the
performance by such Debtor of its obligations under
such Credit Documents and the consummation of the
transactions contemplated by the various Credit
Documents do not and will not (i) except as set forth
in Section 8(e) of the Disclosure Schedule, conflict
with any provision of (1) any law, or (2) the
organizational or other charter
-30-
documents of such Debtor, or (ii) result in or
require the creation of any Lien upon any assets or
properties of such Debtor or any of its Affiliates,
except as expressly contemplated in the Credit
Documents. Except as expressly contemplated in the
Credit Documents, no permit, consent, approval,
authorization or order of and no notice to or filing,
registration or qualification with, any Tribunal or
third party is required in connection with the
execution, delivery or performance by such Debtor of
any Credit Document or to consummate any transactions
contemplated by the Credit Documents, other than
consents, approvals, authorizations or orders that
have been obtained or notices given or filings made
prior to the date hereof.
(f) Such Debtor's place of incorporation, organization or
formation, as applicable, is the State of Delaware,
and its principal place of business and chief
executive office, where its records are maintained
are disclosed on the signature page hereto. Except as
set forth in Section 8(f) of the Disclosure Schedule,
such Debtor does not use any trade styles, trade
names or fictitious partnership names.
(g) Except as set forth in Section 8(g) of the Disclosure
Schedule, upon entry of the Second Interim Order, all
filings, assignments, pledges and deposits of
documents or instruments will have been made and all
other actions will have been taken that are necessary
or advisable, under applicable law, to establish and
perfect the Collateral Agent's security interest in
the Collateral. The Collateral and the Collateral
Agent's rights with respect to the Collateral are not
subject to any set-off, claims, withholdings or other
defenses. The Debtors are the owners of the
Collateral, free from any lien, security interest,
encumbrance or any other claim of demand except for
Permitted Liens and as otherwise set forth in the
Intercreditor Agreement.
(h) All Debtors are subject as debtor to a Case in the
Bankruptcy Court.
(i) After giving effect to the transactions contemplated
by this Agreement and the other Credit Documents,
there does not exist at the date hereof any condition
or event which constitutes a Default hereunder or
which after notice or lapse of time, or both, would
constitute such a Default hereunder.
(j) Subject to the matters described in Section 8(j) of
the Disclosure Schedule: (a) no Termination Event has
occurred with respect to any ERISA Plan and all ERISA
Affiliates are in compliance with ERISA in all
material respects excluding any such failure that
could not reasonably be expected to result in a
Material Adverse Change, (b) no ERISA Affiliate is
required to contribute to, or has any other absolute
or contingent Liability in respect of, any
"multiemployer plan" as defined in Section 4001 of
ERISA which could reasonably be expected to result in
a Material Adverse Change, and (c) no "accumulated
funding deficiency" (as defined in Section 412(a) of
the Tax Code) exists with respect to any
-31-
ERISA Plan, whether or not waived by the Secretary of
the Treasury or his delegate and the current value of
each ERISA Plan's benefits does not exceed the
current value of such ERISA Plan's assets available
for the payment of such benefits except to the extent
such excess could not reasonably be expected to
result in a Material Adverse Change.
(k) Without limiting the provisions of Section 8(c):
(i) No notice, notification, demand, request for
information, citation, summons or order has been
issued, no complaint has been filed, no penalty has
been assessed and no investigation or review is
pending or threatened by any Tribunal or any other
Person with respect to any of the following except
(1) as set forth in the Section 8(k)(i) of the
Disclosure Schedule or (2) to the extent the same
could not reasonably be expected to result in a
Material Adverse Change: (A) any alleged generation,
treatment, storage, recycling, transportation,
disposal or Release of any Hazardous Materials,
either by any Debtor or on any property owned by such
Debtor, (B) any remedial action that might be needed
to respond to any such alleged generation, treatment,
storage, recycling, transportation, disposal or
Release, or (C) any alleged failure by any Debtor to
have any permit, license or authorization required in
connection with the conduct of its business or with
respect to any such generation, treatment, storage,
recycling, transportation, disposal or Release.
(ii) Except as set forth in Section 8(k)(ii) of the
Disclosure Schedule, no Debtor otherwise has any
known material contingent Liability in connection
with any alleged generation, treatment, storage,
recycling, transportation, disposal or Release of any
Hazardous Materials that has caused, or could
reasonably be expected to cause, a Material Adverse
Change.
(iii) Except as set forth in Section 8(k)(iii) of the
Disclosure Schedule, no Debtor has handled any
Hazardous Materials, other than as a generator, on
any properties now or previously owned or leased by
any Debtor to an extent that such handling has
caused, or could cause, a Material Adverse Change.
(iv) Except as set forth in Section 8(k)(iv) of the
Disclosure Schedule or to the extent that the
following in the aggregate has not caused and could
not cause a Material Adverse Change:
(1) no PCBs are or have been present at
any properties now or previously
owned or leased by any Debtor;
(2) no asbestos is or has been present
at any properties now or previously
owned or leased by any Debtor;
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(3) there are no underground storage
tanks for Hazardous Materials,
active or abandoned, at any
properties now or previously owned
or leased by any Debtor; and
(4) no Hazardous Materials have been
Released at, on or under any
properties now or previously owned
or leased by any Debtor.
(v) Except as set forth in Section 8(k)(v) of the
Disclosure Schedule or to the extent that the
following in the aggregate has not caused and could
not cause a Material Adverse Change, no Debtor has
transported or arranged for the transportation of any
Hazardous Material to any location listed on the
National Priorities List under CERCLA, any location
listed for possible inclusion on the National
Priorities List by the Environmental Protection
Agency in CERCLIS, nor, except as set forth in
Section 8(k)(v) of the Disclosure Schedule or to the
extent that such has not caused and could not cause a
Material Adverse Change, any location listed on any
similar state list or which is the subject of
federal, state or local enforcement actions or other
investigations that may lead to claims against such
Debtor for clean-up costs, remedial work, damages to
natural resources or for personal injury claims,
including, but not limited to, claims under CERCLA.
(vi) Except as set forth in Section 8(k)(vi) of the
Disclosure Schedule or to the extent that such has
not caused and could not cause a Material Adverse
Change, no property now or previously owned or leased
by any Debtor is listed or proposed for listing on
the National Priorities List promulgated pursuant to
CERCLA, in CERCLIS, nor on any similar state list of
sites requiring investigation or clean-up.
(vii) Except as set forth in Section 8(k)(vii) of the
Disclosure Schedule or to the extent that such has
not caused and could not cause a Material Adverse
Change, there are no Liens arising under or pursuant
to any Environmental Laws on any of the real
properties or properties owned or leased by any
Debtor, and no governmental actions of which any
Debtor is aware have been taken or are in process
that could subject any of such properties to such
Liens; nor would any Debtor be required to place any
notice or restriction relating to the presence of
Hazardous Materials at any properties owned by it or
in any deed to such properties.
(viii) All environmental investigations, studies, audits,
tests, reviews or other analyses for ground water or
soil contamination relating to the Release of
Hazardous Materials conducted by or which are in the
possession of such Debtor in relation to any
properties or facility now or previously owned or
leased by such Debtor are available for inspection by
the Term Lender Agent or the Collateral Agent at the
Borrower Representative's offices or facilities.
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(l) No Debtor is subject to regulation under the Public
Utility Holding Company Act of 1935, the Investment
Company Act of 1940 (as any of the preceding acts
have been amended) or any other law which regulates
the incurring by such Debtor of indebtedness,
including laws relating to common contract carriers
or the sale of electricity, gas, steam, water or
other public utility services. Such Debtor is not
subject to regulation under the Federal Power Act
that would violate, result in a default under or
prohibit the effectiveness or the performance of any
of the provisions of the Credit Documents.
(m) None of the following securities is evidenced by a
certificate: (i) the limited partner interest of EOTT
MLP in EOTT OLP; (ii) the membership interest of EOTT
MLP in EOTT GP; (iii) the limited partner interest of
EOTT OLP in any of EOTT Canada, EOTT Liquids or EOTT
Pipeline; or (iv) the general partner interest of
EOTT GP in any of EOTT OLP, EOTT Canada, EOTT Liquids
or EOTT Pipelines.
(n) No Debtor is in default in the performance of any of
the covenants and agreements contained in any Credit
Document. No event has occurred and is continuing
that constitutes a Default.
(o) EOTT MLP has heretofore delivered to the Term Lender
Agent true, correct and complete copies of the
Initial Financial Statements. The Initial Financial
Statements fairly present (subject to normal and
recurring adjustments in conformity with GAAP) EOTT
MLP's Consolidated financial position at the date
thereof, the Consolidated results of EOTT MLP's
operations for the periods thereof and Consolidated
cash flows for the periods thereof. The Initial
Financial Statements were prepared in accordance with
GAAP.
(p) Except as shown in the Initial Financial Statements
or disclosed in Section 8(p) of the Disclosure
Schedule (with respect to Liabilities described below
that will give rise to Priority Claims) or the
Bankruptcy Schedule (with respect to all other
Liabilities described below), as of the Closing Date,
no Debtor has any outstanding Liabilities of any kind
(including contingent obligations, tax assessments
and unusual forward or long-term commitments) which
are, in the aggregate, material to such Debtor or
material with respect to EOTT MLP's Consolidated
financial condition.
(q) Except as shown in the Initial Financial Statements
or disclosed in Section 8(q) of the Disclosure
Schedule, as of the Closing Date, no Debtor is
subject to or restricted by any franchise, contract,
deed, charter restriction or other instrument or
restriction that could cause a Material Adverse
Change.
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(r) No certificate, statement or other information
delivered herewith or heretofore by any Debtor to any
Lender Party in connection with this Agreement or in
connection with any transaction contemplated hereby
contains any untrue statement of a material fact or
omits to state any material fact necessary to make
the statements contained herein or therein, in light
of the circumstances under which they were made, not
misleading as of the date made or deemed made. All
written information furnished after the date hereof
by or on behalf of any Debtor to the Lender Parties
in connection with this Agreement and the other
Credit Documents, and the transactions contemplated
hereby and thereby will be true, complete and
accurate in every material respect in light of the
circumstances in which made, or based on reasonable
estimates on the date as of which such information is
stated or certified. There is no fact known to any
Debtor that has not been disclosed to the Term Lender
Agent that could cause a Material Adverse Change.
(s) As of the Closing Date, except for the Cases, as
disclosed in the Initial Financial Statements or in
Section 8(s) of the Disclosure Schedule: (i) there
are no actions, suits or legal, equitable,
arbitrative or administrative proceedings pending or,
to the knowledge of any Debtor threatened, against
any Debtor or affecting any Collateral (including,
without limitation, any that challenge or otherwise
pertain to any Debtor's title to any Collateral)
before any Tribunal that could cause a Material
Adverse Change and (ii) there are no outstanding
judgments, injunctions, writs, rulings or orders by
any such Tribunal against any Debtor or any Debtor's
stockholders, partners, directors or officers or
affecting any Collateral that could cause a Material
Adverse Change.
(t) As of the Closing Date, except as disclosed in
Section 8(t) of the Disclosure Schedule, neither the
business nor the properties of any Debtor has been
affected by any fire, explosion, accident, strike,
lockout or other labor dispute, drought, storm, hail,
earthquake, embargo, act of God or of the public
enemy or other casualty (whether or not covered by
insurance), which could cause a Material Adverse
Change.
(u) Neither EOTT MLP nor any Borrower presently has any
Subsidiary or owns any capital stock in any other
corporation or association except those listed in
Section 8(u) of the Disclosure Schedule. No Debtor is
a member of any general or limited partnership,
limited liability company, joint venture or
association of any type whatsoever except those
listed in Section 8(u) of the Disclosure Schedule.
Each of EOTT MLP and EOTT OLP owns, directly or
indirectly, the entire equity interest in each of its
Subsidiaries listed in Section 8(u) of the Disclosure
Schedule.
(v) Section 8(v) of the Disclosure Schedule contains a
complete and correct list, as of the date of this
Agreement, of each credit agreement, loan agreement,
indenture, SCTSC Purchase Agreement, guaranty or
other
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arrangement providing for or otherwise relating to
any Indebtedness or any extension of credit (or
commitment for any extension of credit), or guaranty
by, any Debtor, or to which any Debtor is subject, in
excess of $1,000,000 with respect to any single
Person and such Person's Affiliates taken as whole,
other than the Credit Documents. The aggregate
principal or face amount outstanding or that may
become outstanding under each such arrangement is
correctly described in Section 8(v) of the Disclosure
Schedule.
(w) The Debtors have delivered to the Term Lender Agent
and each of the Term Lenders an initial sixteen-week
weekly cash revenue and expense budget (as
supplemented from time to time on a rolling
sixteen-week basis and approved by the Term Lender
Agent as to form and substance for each subsequent
week, the "CASH BUDGET"). The Cash Budget has been
prepared in good faith based on reasonable
assumptions. The initial Cash Budget (the "INITIAL
CASH BUDGET") is attached hereto as Exhibit G. The
projections are based upon reasonable estimates and
assumptions have been prepared on the basis of
assumptions stated therein and reflect the reasonable
estimates of the Borrowers of the results of
operations and other information projected therein.
(x) The state of affairs referred to in the Disclosure
Schedule, and those in any supplement thereto, relate
only to the representations and warranties in the
Section or paragraph of the Agreement that
corresponds with the Section reference to which the
disclosures in the Disclosure Schedule expressly
refer or otherwise incorporate by express reference
and not to any other representation or warranty in
this Agreement.
9. AFFIRMATIVE COVENANTS. To conform with the terms and conditions under which
each Term Lender is willing to have Extensions of Credit outstanding to
Borrower, and to induce each Term Lender to enter into this Agreement and to
make Extensions of Credit, the Debtors covenant and agree jointly and severally
that until the full and final payment in cash of the Obligations, unless the
Majority Term Lenders have has previously agreed otherwise:
(a) Payment and Performance. Each Debtor will pay all amounts
due under the Credit Documents to which it is a party in accordance with the
terms thereof and will observe, perform and comply with every covenant, term and
condition expressed in the Credit Documents to which it is a party.
(b) Payment of Expenses. All Borrower Expenses shall be part
of the Obligations. Borrower shall pay any Lender Party, on such Lender Party's
demand, any and all Borrower Expenses which such Lender Party may pay in
connection with the provisions hereof.
(c) Instruments, Documents, Securities or Chattel Paper. Each
Debtor shall promptly notify the Collateral Agent of any instruments, documents,
securities or chattel paper that are owned or acquired by such Debtor. At any
time and from time to time, upon the demand of the Term Lender Agent, such
Debtor shall deliver and pledge to the Collateral Agent, duly
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endorsed and/or accompanied by such instruments of assignment and transfer in
such form and substance as the Term Lender Agent may reasonably request, any and
all instruments, documents, securities and/or chattel paper which are included
in the Collateral as the Term Lender Agent may request. Such Debtor shall
maintain and safeguard any and all documents, instruments and chattel paper in
its possession and its individual books and records relating to the Collateral
in a commercially reasonable manner and cause the security interest granted
herein to the Collateral Agent to be marked thereon.
(d) Books, Financial Statements and Reports. Each Debtor will
at all times maintain full and accurate books of account and records. EOTT MLP
will maintain and will cause its Subsidiaries to maintain a standard system of
accounting, will maintain its Fiscal Year and will furnish the following
statements and reports to the Term Lender Agent at Borrowers' expense:
(i) As soon as available, and in any event within 120 days
after the end of each Fiscal Year, commencing with Fiscal Year 2002 (A)
complete Consolidated financial statements of EOTT MLP as of, or for
the period ending, December 31 of the preceding year, together with all
notes thereto, prepared in reasonable detail in accordance with GAAP,
and (B) consolidating unaudited balance sheets and statements of income
of each Consolidated Subsidiary of EOTT MLP. The Consolidated financial
statements referred to in subclause (A) of the preceding sentence shall
set forth in comparative form the corresponding figures for the
preceding Fiscal Year. In addition, within 120 days after the end of
each Fiscal Year, commencing with Fiscal Year 2002 EOTT MLP will
furnish a certificate signed by such accountants (1) stating that they
have read this Agreement, and (2) further stating that in making their
examination and reporting on the Consolidated financial statements
described above they obtained no knowledge of any Default existing at
the end of such Fiscal Year, or, if they did so conclude that a Default
existed, specifying its nature and period of existence.
(ii) As soon as available, and in any event within 45 days
after the end of each of Fiscal Quarter of each Fiscal Year, (1) EOTT
MLP's Consolidated balance sheet as of the end of such Fiscal Quarter
and Consolidated statements of EOTT MLP's operations and cash flows for
such Fiscal Quarter and for the period from the beginning of the then
current Fiscal Year to the end of such Fiscal Quarter, (2)
consolidating balance sheets and statements of income of each
Consolidated Subsidiary as of (A) the end of such Fiscal Quarter or (B)
for such Fiscal Quarter and for the period from the beginning of the
then current Fiscal Year to the end of such Fiscal Quarter, all in
reasonable detail and prepared in accordance with GAAP, subject to
changes resulting from normal and recurring adjustments in conformity
with GAAP, and as soon as available, and in any event within 60 days
after the end of the last Fiscal Quarter of each Fiscal Year, EOTT
MLP's unaudited Consolidated balance sheet as of the end of such Fiscal
Quarter and Consolidated statement of operations for such Fiscal
Quarter and for the period from the beginning of the current Fiscal
Year to the end of such Fiscal Quarter.
(iii) As soon as available, and in any event within 45 days
after the end of each calendar month, (1) EOTT MLP's unaudited
Consolidated balance sheet as of the end of such month and an unaudited
Consolidated statement of EOTT MLP's earnings for such
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calendar month, all in reasonable detail and prepared in accordance
with GAAP, subject to changes resulting from normal and recurring
adjustments in conformity with GAAP and (2) a report setting forth for
such month aggregate volumes for all marketing activities of all
Debtors.
(iv) Together with each set of financial statements furnished
under subsections (i), (ii) and (iii) above, a certificate in the form
of Exhibit C signed by the chief financial officer or treasurer of EOTT
Energy stating that such financial statements are accurate and complete
in all material respects (subject to normal and recurring adjustments
in conformity with GAAP in the case of unaudited financial statements),
stating that he has reviewed the Credit Documents containing the
calculations and stating that no Default exists at the end of such
Fiscal Quarter or month, respectively, or at the time of such
certificate or specifying the nature and period of existence of any
such Default.
(v) Promptly, copies of all material pleadings, notices,
orders and other papers filed in the Cases and copies of all reports
filed with the United States Trustee in the Cases.
(vi) No later than 12:00 pm (noon) on Monday of each week, (1)
the Cash Budget, (2) a cash flow report showing actual performance for
each weekly period reflected in the Cash Budget and variance of actual
performance from projected performance in the Cash Budget, commencing
the week ended October 12, 2002, (3) a Barrel Report, (4) a Weekly
Compliance Certificate and (5) a true, correct and complete copy of the
Borrowing Base Report provided to the LC Agent with such supporting
information in detail as may from time to time be prescribed by the LC
Agent, duly completed and certified by an authorized officer of EOTT
Energy
(vii) Promptly upon their becoming available, copies of all
financial statements, reports, notices and proxy statements sent by
EOTT MLP to its unit holders and all registration statements,
prospectus supplements, periodic reports and other statements and
schedules filed by EOTT MLP with any securities exchange, the
Securities and Exchange Commission or any similar governmental
authority.
(viii) From time to time upon request, a written or oral
report, in reasonable detail, as to the status of the Reorganization
Plan.
(ix) On each Business Day, (1) a Cash Flow Report in the form
of Exhibit D duly completed by an authorized officer of EOTT Energy, as
of the preceding Business Day and (2) a statement reconciling such
report with the most recent Cash Flow Report previously delivered
pursuant to this subsection (ix).
(x) As soon as available, and in any event within 45 days
after the end of Fiscal Year 2002, an environmental compliance
certificate signed by the chief executive officers of EOTT GP and EOTT
Energy in the form attached hereto as Exhibit E. Further, if requested
by the Term Lender Agent, the Debtors shall permit and cooperate with
an environmental and safety review made in connection with the
operations of the
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Debtors' properties one time during each Fiscal Year, by consultants
selected by the Term Lender Agent which review shall, if requested by
the Term Lender Agent, be arranged and supervised by environmental
legal counsel for the Term Lender Agent, all at the Debtors' cost and
expense. The consultant shall render an oral or written report, as
specified by the Term Lender Agent, based upon such review at the
Debtors' cost and expense and a copy thereof will be provided to the
Debtors.
(xi) Concurrently with the annual renewal of the Debtors'
insurance policies, the Debtors shall at their own cost and expense, if
requested by the Term Lender Agent in writing, cause a certificate or
report to be issued by the Debtors' professional insurance consultants
or other insurance consultants satisfactory to the Term Lender Agent
certifying that the Debtors' insurance for the next succeeding year
after such renewal (or for such longer period for which such insurance
is in effect) complies with the provisions of this Agreement and the
Security Documents.
(xii) On or about the fifth (5th) (but no later than the
eighth (8th)) and on or about the twentieth (20th) (but no later than
the twenty-third (23rd)) day of each calendar month and upon request by
the Term Lender Agent an Open Position Report in the form of Exhibit F,
with such supporting information in detail as may from time to time be
prescribed by the Term Lender Agent, duly completed by an authorized
officer of EOTT Energy as of the last day of the preceding month if
delivered on or about the fifth (5th) day of a month, as of the
fifteenth (15th) day if delivered on or about the twentieth (20th) day
of a month, or as of the date otherwise requested. Such report shall
include (A) a listing of all long and short positions; (B) crude oil,
refined petroleum product and NGL location information; (C) pricing
information published by an independent publication acceptable to the
Term Lender Agent; and (D) a report on a ▇▇▇▇ to market basis of all
Fixed Price Contracts together with a complete list of all net realized
gains and losses on any Fixed Price Contracts in form satisfactory to
the Term Lender Agent.
(xiii) On or before the tenth (10th) Business Day following
receipt by any Borrower or any other Debtor, a copy of any account
statement received from any bank, securities intermediary, commodities
or futures broker or other institution with whom such Borrower or such
Debtor maintains any deposit, investment, trading or other account.
(xiv) Within 30 days after the end of each calendar month, a
copy of the Lease Volume Report attached hereto as Exhibit K.
(xv) Promptly, from time to time, such other information,
documents or reports regarding any Borrower or any other Debtor
(including accountants' management letters and updates to the Cash
Budget) as the Term Lender Agent may request, including any regulatory
filings.
(e) Other Information and Inspections. In each case, subject
to the last sentence of this Section 9(e), each Debtor will furnish to each Term
Lender any information that the Term Lender Agent or any Term Lender may from
time to time request concerning any covenant, provision or condition of the
Credit Documents or any matter in connection with the Debtors'
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businesses and operations. In each case, subject to the last sentence of this
Section 9(e), each Debtor will permit representatives appointed by the Term
Lender Agent (including independent accountants, auditors, agents, attorneys,
appraisers and any other Persons) to visit and inspect during normal business
hours any of such Debtor's property, including its books of account, other books
and records and any facilities or other business assets, to make extra copies
therefrom and photocopies and photographs thereof and to write down and record
any information such representatives obtain, and each Debtor shall permit the
Term Lender Agent or its representatives to investigate and verify the accuracy
of the information furnished to the Term Lender Agent or any Term Lender in
connection with the Credit Documents and to discuss all such matters with its
officers, employees and, upon prior notice to the Borrower Representative, its
representatives. Without limitation of the foregoing, at such reasonable times
and intervals as the Term Lender Agent and the Term Lenders shall reasonably
request, Borrowers shall permit the Term Lender Agent and its representatives to
conduct an audit, examination, test and verification of the Collateral and the
other business and assets of the Debtors and in connection with such examination
to have full access to and the right to examine, audit, make abstracts and
copies from and inspect the Debtors' records, files, books of account and all
other documents, instruments and agreements to which any Debtor is a party.
Borrowers shall pay all reasonable costs and expenses of the Term Lender Agent
associated with any such audits. Additionally, at Borrowers' expense, from time
to time the Term Lender Agent may require an inspection of the Collateral in
storage at EOTT Terminals to be conducted by an independent appraiser selected
by the Term Lender Agent. Each of the foregoing audits, inspections and
examinations shall be made subject to compliance with applicable safety
standards and the same conditions applicable to any Debtor in respect of
property of that Debtor on the premises of Persons other than a Debtor or an
Affiliate of a Debtor, and all information, books and records furnished or
requested to be furnished, or of which copies, photocopies or photographs are
made or requested to be made, all information to be investigated or verified and
all discussions conducted with any officer, employee or representative of any
Debtor shall be subject to any applicable attorney-client privilege exceptions
that the Debtor reasonably determines is necessary and to compliance with
conditions to disclosures under non-disclosure agreements between any Debtor and
Persons other than a Debtor or an Affiliate of a Debtor, and subject further to
the express undertaking of each Person acting at the direction of or on behalf
of the Term Lender Agent to be bound by the confidentiality provisions of
Section 17(p).
(f) Notice of Material Events and Change of Address. Each
Debtor will notify each Term Lender, not later than five Business Days after any
executive officer of such Debtor has knowledge thereof, stating that such notice
is being given pursuant to this Agreement, of:
(i) the occurrence of any Material Adverse Change,
(ii) the occurrence of any Default,
(iii) the acceleration of the maturity of any Indebtedness
owed by any Debtor or any default under any post-petition indenture,
mortgage, agreement, contract or other instrument to which any of them
is a party or by which any of them or any of their properties is bound,
if such default could cause a Material Adverse Change,
(iv) the occurrence of any Termination Event,
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(v) Under any Environmental Law, any claim of $1,000,000 or
more, any notice of potential liability that might be reasonably likely
to exceed such amount or any other material adverse claim asserted
against any Debtor or with respect to any Debtor's properties taken as
a whole,
(vi) (1) any material loss, damage, investigation, action,
suit, proceeding, claims, setoff, withholding or other defenses
relating to the Collateral, and (2) the occurrence of any Event of
Default or event which, with the passing of time or giving of notice or
both, would constitute an Event of Default, and
(vii) the filing of any suit or proceeding, or the assertion
in writing of a claim against any Debtor or with respect to any
Debtor's properties.
Upon the occurrence of any of the foregoing, the Debtors will take all
necessary or appropriate steps to remedy promptly any such Material
Adverse Change, Default, acceleration, default or Termination Event to
protect against any such adverse claim, to defend any such suit or
proceeding and to resolve all controversies on account of any of the
foregoing. The Debtors will also notify the Term Lender Agent and the
Term Lender Agent's counsel in writing at least 20 Business Days prior
to the date that any Debtor changes its name or the location of its
chief executive office or principal place of business or the place
where it keeps its books and records concerning the Collateral,
furnishing with such notice any necessary financing statement
amendments or requesting the Term Lender Agent and its counsel to
prepare the same.
(g) Maintenance of Properties. Each Debtor will maintain,
preserve, protect and keep all Collateral and all other property used or useful
in the conduct of its business in good condition (ordinary wear and tear
excepted) and in material compliance with all applicable Laws and will from time
to time make all repairs, renewals and replacements reasonably needed to enable
the business and operations carried on in connection therewith to be promptly
and advantageously conducted at all times.
(h) Discharge of Liens. At its option, should any Debtor fail
to do so, except to the extent permitted hereunder, the Collateral Agent may
discharge post-petition taxes, Liens or security interests or other encumbrances
or charges at any time levied or placed on the Collateral and may pay for the
insurance, maintenance and preservation of the Collateral. The Borrowers agree
to reimburse the Collateral Agent on demand, together with interest thereon at
the Alternate Base Rate, for any payment made or expense incurred by the
Collateral Agent in connection with the foregoing or otherwise under this
Agreement, and any such payment or expense shall constitute a part of the
Obligations secured by the Collateral.
(i) Maintenance of Existence and Qualifications. Each Debtor
will maintain and preserve its existence and its rights and franchises in full
force and effect and will qualify to do business in all states or jurisdictions
where required by applicable Law, except where the failure so to qualify will
not cause a Material Adverse Change.
(j) Payment of Trade Liabilities, Taxes, etc. Each Debtor will
(i) timely file all required tax returns including any extensions; (ii) timely
pay all post-petition taxes, assessments
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and other governmental charges or levies imposed upon it or upon its income,
profits or property; (iii) within 120 days after the date such goods are
delivered or such services are rendered, pay all post-petition Liabilities owed
by it on ordinary trade terms to vendors, suppliers and other Persons providing
goods and services used by it in the ordinary course of its business; (iv) pay
and discharge when due all other post-petition Liabilities now or hereafter owed
by it, other than royalty payments suspended in the ordinary course of business;
and (v) maintain appropriate accruals and reserves for all of the foregoing in
accordance with GAAP. However, each Debtor may delay paying or discharging any
of the foregoing so long as it has set aside on its books adequate reserves
therefor in accordance with GAAP and (i) it is in good faith contesting the
validity thereof in the Enron Bankruptcy Proceedings, if applicable, or by other
appropriate proceedings, if necessary or (ii) it is in good faith contesting the
validity of such Liability, and such Liability is claimed by an Affiliate of
Enron that is not a debtor-in-possession in the Enron Bankruptcy Proceedings.
(k) Insurance. Each Debtor shall at all times carry insurance
for all of its property (irrespective of whether such property is owned or
acquired before, on or after the Closing Date) with financially sound and
reputable insurers, of a character usually carried by responsible Persons
engaged in the same business or a business similarly situated against loss or
damage, of the kinds and in the amounts customarily carried by such Persons and
carry such other insurance as is usually carried by such Persons, including,
without limitation, insurance against its liability for injury to Persons (with
the Term Lender Agent, the Term Lenders and the Collateral Agent named as
additional insureds), all in amounts and of the type currently carried by such
Debtor. Within thirty (30) days after the Closing Date, Borrower will provide to
the Term Lender Agent a detailed schedule describing all insurance coverages
maintained by or for any Debtor together with copies of the underlying policies.
Within thirty (30) days after the Closing Date, all insurance policies covering
Collateral shall be endorsed (i) to provide for payment of losses to the
Collateral Agent, (ii) to provide that such policies may not be canceled or
reduced or affected in any material manner for any reason without 15 days prior
notice to the Collateral Agent and (iii) to provide for any other matters
specified in any applicable Security Document or which the Collateral Agent may
reasonably require.
(l) Performance on Borrowers' Behalf. If any Debtor fails to
pay any post-petition taxes, insurance premiums, expenses, attorneys' fees or
other amounts it is required to pay under any Credit Document, the Term Lender
Agent may pay the same after notice of such payment by the Term Lender Agent is
given to the Borrower Representative. Borrower shall immediately reimburse the
Term Lender Agent for any such payments and each amount paid by the Term Lender
Agent shall constitute an Obligation owed hereunder that is due and payable on
the date such amount is paid by the Term Lender Agent.
(m) Interest. Borrower hereby promises to each Term Lender to
pay interest at the Default Rate on all Obligations (including Obligations to
pay fees or to reimburse or indemnify any Term Lender) that Borrower has in this
Agreement promised to pay to such Term Lender and that are not paid when due.
Such interest shall accrue from the date such Obligations become due until they
are paid.
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(n) Compliance with Agreements and Law. Subject to its rights
and duties as a debtor in a Case, each Debtor will perform all material
obligations it is required to perform under the terms of each indenture,
including in the case of EOTT MLP the EOTT MLP Senior Notes Indenture, mortgage,
deed of trust, security agreement, lease and franchise and each material
agreement, contract or other instrument or obligation to which it is a party or
by which it or any of its properties is bound, except where performance is
excused or delayed by the Bankruptcy Code. Each Debtor will conduct its business
and affairs in compliance with all Laws applicable thereto.
(o) Environmental Matters; Environmental Reviews.
(i) Each Debtor will comply in all material respects with all
Environmental Laws now or hereafter applicable to such Debtor as well
as all contractual obligations and agreements with respect to
environmental remediation or other environmental matters and will
obtain, at or prior to the time required by applicable Environmental
Laws, all environmental, health and safety permits, licenses and other
authorizations necessary for its operations and will maintain such
authorizations in full force and effect.
(ii) Each Debtor will promptly furnish to the Term Lender
Agent all written notices of violation, orders, claims, citations,
complaints, penalty assessments, suits or other proceedings received by
any such Debtor after the date hereof, or of which it has notice after
the date hereof, pending or threatened against such Debtor, the
potential liability of which exceeds $1,000,000 or could cause a
Material Adverse Change if resolved adversely against such Debtor, by
any governmental authority with respect to any alleged violation of or
non-compliance with any Environmental Laws or any permits, licenses or
authorizations in connection with its ownership or use of its
properties or the operation of its business.
(iii) Each Debtor will promptly furnish to the Term Lender
Agent all requests for information, notices of claim, demand letters
and other notifications received after the date hereof by such Debtor
in connection with its ownership or use of its properties or the
conduct of its business, relating to potential responsibility with
respect to any investigation or clean-up of Hazardous Material at any
location, the potential liability of which exceeds $1,000,000 or could
cause a Material Adverse Change if resolved adversely against such
Debtor.
(p) Evidence of Compliance. Subject to the last sentence of
Section 9(e), each Debtor will furnish to each Term Lender at such Debtor's
expense all evidence which the Term Lender Agent from time to time reasonably
requests in writing as to the accuracy and validity of or compliance with all
representations, warranties and covenants made by any Debtor in the Credit
Documents, the satisfaction of all conditions contained therein and all other
matters pertaining thereto.
(q) Agreement to Deliver Security Documents. To further secure
the Obligations whenever requested by the Term Lender Agent in its sole and
absolute discretion, the Debtors will deliver chattel mortgages, security
agreements, financing statements and other Security Documents in form and
substance satisfactory to the Term Lender Agent for the purpose of
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granting, confirming and perfecting first and prior Liens or security interests
in any personal property (tangible or intangible) now owned or hereafter
acquired by any Debtor.
(r) Guaranties of Newly Created or Acquired Subsidiaries. Each
Subsidiary of EOTT created, acquired or coming into existence after the date
hereof shall, promptly upon request by the Term Lender Agent, execute and
deliver to the Term Lender Agent an instrument of joinder pursuant to which each
Subsidiary adopts, ratifies, confirms and agrees to perform and be bound by
Section 13 hereof and the absolute and unconditional guaranty of the timely
repayment of the Obligations and the due and punctual performance of the
obligations of Borrower hereunder set forth therein, which instrument shall
otherwise be satisfactory to the Term Lender Agent in form and substance. EOTT
MLP will cause each such Subsidiary to deliver to the Term Lender Agent,
simultaneously with its delivery of such an instrument of joinder, written
evidence satisfactory to the Term Lender Agent and its counsel that such
Subsidiary has taken all corporate, limited liability company or partnership
action necessary to duly approve and authorize its execution, delivery and
performance of such instrument and any other documents that it is required to
execute.
(s) Compliance with Agreements. Each Debtor shall observe,
perform or comply with any term or condition under the Restructuring Agreement.
In addition, each Debtor shall observe, perform or comply with any agreement
with any Person or any term or condition of any instrument, if such agreement or
instrument is materially significant to such Debtor or to EOTT MLP on a
Consolidated basis or materially significant to any Guarantor, unless any such
failure to so observe, perform or comply is remedied within the applicable
period of grace (if any) provided in such agreement or instrument.
(t) Risk Management Policies. During the term of this
Agreement, EOTT MLP will maintain in effect the Risk Management Policies and
adhere to and conduct its risk management activities, and cause the other
Debtors to adhere to and conduct their respective risk management activities, in
accordance with such policies. The Borrower Representative shall provide written
notice to the Term Lender Agent of any changes to the Risk Management Policies
that the EOTT Energy board of directors adopts promptly upon the EOTT Energy
board of directors' action thereon, and in no event more than 30 days after
approval by the EOTT Energy board of directors of such changes.
(u) Critical Vendor Program. The Debtors shall have
established a critical vendor program satisfactory to the Term Lender Agent on
the date of the Second Interim Order.
10. NEGATIVE COVENANTS. To conform with the terms and conditions under which
each Term Lender is willing to have Extensions of Credit outstanding to
Borrowers, and to induce each Term Lender to enter into this Agreement and make
the Extensions of Credit, the Debtors covenant and agree jointly and severally
that until the full and final payment in cash of the Obligations , unless the
Majority Term Lenders have previously agreed otherwise:
(a) Indebtedness. No Debtor will in any manner owe or be
liable for Indebtedness except:
(i) the Obligations;
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(ii) Indebtedness arising under Hedging Contracts permitted
under Section 10(d) or consisting of options, swaps, collars and
similar instruments that relate to crude oil, refined petroleum
products or NGLs that satisfy the requirements of subclauses (A), (B)
and (C) of the proviso to the definition of "Hedging Contracts";
(iii) Indebtedness of any Borrower owing to any other
Borrower;
(iv) Liabilities with respect to obligations to deliver crude
oil, refined petroleum products or NGLs or to render terminalling or
storage services in consideration for advance payments to a Borrower;
provided, however, such delivery or rendering, as applicable, is to be
made within 60 days after such payment;
(v) guaranties by EOTT MLP or any Borrower of trade payables
of any Borrower incurred and paid in the ordinary course of business on
ordinary trade terms;
(vi) Indebtedness of the Debtors incurred prior to the Filing
Date;
(vii) any Indebtedness outstanding under the SCTSC Purchase
Agreements;
(viii) any Indebtedness existing under the note referred to in
the Enron Settlement Agreement;
(ix) any Indebtedness existing under the DIP Letter of Credit
Agreement not exceeding $325,000,000 in principal amount;
(x) any Indebtedness existing under the EOTT MLP Senior Notes;
and
(xi) Daylight Overdraft obligations to Standard Chartered
Bank, as contemplated in the Intercreditor Agreement, not to exceed
$15,000,000.
(b) Accounts. No Debtor shall, without the prior written
consent of the Majority Term Lenders, open or maintain any commodity,
investment, securities or deposit accounts except for those listed on the
Disclosure Schedule.
(c) Limitation on Liens. No Debtor will assign, sell,
mortgage, lease, transfer, set over, pledge, grant any security interest in or
Lien upon, encumber, or otherwise dispose of or abandon any Accounts, inventory,
cash, investment securities, margin deposit accounts with commodities brokers or
other rights or properties that constitute Collateral, whether now owned or
hereafter acquired, nor will any Debtor permit any such Lien, encumbrance or
disposition to exist or occur with respect to such property, except for (i) the
sale from time to time in the ordinary course of business of such property as
may constitute inventory of such Debtor; (ii) Liens in favor of the Collateral
Agent; (iii) taxes constituting a Lien but not due and payable; (iv) Liens
described in any description of property attached to any mortgage, deed of trust
or fixture filing included in the Security Documents and any renewals,
extensions or modifications (but not enlargements) thereof; (v) Liens securing
purchase money financing for any property or asset hereafter acquired; (vi)
Liens reserved in leases, or arising by operation of law, for rent and for
compliance with the terms of the lease with respect to leasehold estates; (vii)
mechanic's or materialmen's Liens or other similar Liens, whether contractual or
arising by operation of law,
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for amounts that are not more than 60 days past due or the validity of which is
being contested in good faith by appropriate proceedings; (viii) those consented
to in writing by the Term Lender Agent; and (ix) Permitted Liens. Except as
provided in the Intercreditor Agreement, no Debtor shall abandon, forfeit,
surrender, or release any rights in the Collateral or enter into any operating,
joint venture or similar agreement with respect to the Collateral.
(d) Hedging Contracts. No Debtor will be a party to or in any
manner be liable on any Hedging Contract, except Hedging Contracts to hedge the
Debtors' risk from fluctuations in commodity prices in the ordinary course of
business or pursuant to the Crude Oil Repurchase Agreement.
(e) Limitation on Mergers, etc. and Issuances of Securities.
Except as expressly provided in this Section and as contemplated by the
Reorganization Plan filed with the Bankruptcy Court, no Debtor will (i) enter
into any transaction of merger or consolidation or amalgamation, or liquidate,
wind up or dissolve itself (or suffer any liquidation or dissolution), (ii)
acquire any business or property from, or capital stock of, or be a party to any
acquisition of, any Person except for (1) purchases of inventory and other
property to be sold or used in the ordinary course of business, and (2)
Investments permitted under Section 10(h) or (iii) sell, transfer, lease,
exchange, alienate or otherwise dispose of, in one transaction or a series of
transactions, any part of its business or property, whether now owned or
hereafter acquired, except for sales or transfers not prohibited by Section
10(f). EOTT MLP will not issue any securities other than limited partnership
interests and any options or warrants giving the holders thereof only the right
to acquire such interests. No Subsidiary of EOTT MLP will issue any additional
partnership or limited liability company interests or shares of its capital
stock or other securities or any options, warrants or other rights to acquire
such additional partnership or limited liability company interests or shares or
other securities, except that a direct Subsidiary of a Debtor may issue
additional partnership or limited liability company interests or shares or other
securities to such Debtor or to EOTT MLP so long as such Subsidiary is a Wholly
Owned Subsidiary of EOTT MLP after giving effect thereto. No Subsidiary of a
Borrower which is a partnership will allow any diminution of such Borrower's
interest (direct or indirect) therein.
(f) Limitation on Asset Sales. No Debtor will sell, transfer,
lease, exchange, alienate or dispose of any Collateral or any of its material
assets or properties or any material interest therein, including pursuant to any
sale/leaseback transaction, except:
(i) equipment that is worthless or obsolete or no longer
necessary or useful to the proper conduct of its business or that is replaced by
equipment of equal suitability and value;
(ii) inventory (including pipeline linefill) sold in the
ordinary course of business on ordinary trade terms and such inventory sold
pursuant to the Crude Oil Purchase Agreement (including documents of title
delivered to SCTSC in connection therewith and all proceeds thereof;
(iii) Accounts, contract rights and any proceeds thereof sold
pursuant to the Receivables Purchase Agreement; and
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(iv) Designated Assets on terms and conditions satisfactory to
the Term Lender Agent and the Majority Term Lenders.
All proceeds of any such sales shall be paid directly to the Collateral
Agent as provided for in the Intercreditor Agreement. No Debtor will
sell, transfer or otherwise dispose of capital stock of or partnership
or other interests in any of its Subsidiaries except to EOTT MLP or a
Wholly Owned Subsidiary of EOTT MLP. No Debtor will discount, sell,
pledge or assign any notes payable to it, Accounts or future income.
The Collateral Agent will, at the Borrower Representative's request and
expense, execute a release, satisfactory to the Borrower
Representative, the Term Lender Agent and the Majority Term Lenders, of
any Collateral so sold, transferred, leased, exchanged, alienated or
disposed of pursuant to this Section 10(f).
(g) Limitation on Distributions, Dividends and Redemptions. No
Debtor will declare or pay any dividends on, or make any other distribution of
any kind in respect of, any class of its capital stock or any partnership,
limited liability company or other interest in it, nor will any Debtor directly
or indirectly make any capital contribution of any nature to, or purchase,
redeem, acquire or retire any shares of the capital stock of or partnership or
limited liability company interests in, any Debtor (whether such interests are
now or hereafter issued, outstanding or created), or cause or permit any
reduction or retirement of the capital stock of any Debtor, while any
Obligations are outstanding. Notwithstanding the foregoing, Subsidiaries of a
Borrower shall not be restricted, directly or indirectly, from declaring and
paying dividends or making any other distributions to such Borrower.
(h) Limitation on New Businesses, Investments and Capital
Expenditures. No Debtor will (i) make any expenditure or commitment or incur any
obligation or enter into or engage in any transaction except in the ordinary
course of business, (ii) engage directly or indirectly in any business or
conduct any operations except in connection with or incidental to its present
businesses and operations, (iii) make any capital contributions to or other
Investments in any Person, other than Permitted Investments, or (v) make or
incur any Capital Expenditures other than Permitted Capital Expenditures. All
transactions permitted under this Section are subject to Section 10(f).
(i) Limitation on Credit Extensions. Except for Permitted
Investments and Hedging Contracts permitted under Section 10(d), no Debtor will
extend credit, make advances or make loans other than normal and prudent
extensions of credit to customers buying goods and services in the ordinary
course of business or to another Debtor in the ordinary course of business,
which extensions shall not be for longer periods than those extended by similar
businesses operated in a normal and prudent manner.
(j) Transactions with Affiliates. No Debtor will engage in any
material transaction with Enron or any of its Affiliates, except as contemplated
in the Enron Settlement Agreement and the Employee Transition Agreement.
(k) Prohibited Contracts. Except as expressly provided for in
the Credit Documents and as described in the Disclosure Schedule, no Debtor
will, directly or indirectly, enter into, create or otherwise allow to exist any
contract or other consensual arrangement
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restricting the ability of any Subsidiary of EOTT MLP, including but not limited
to any Borrower to: (i) pay dividends or make other distributions, (ii) purchase
or redeem equity interests held in it by any Borrower or EOTT MLP, (iii) repay
loans and other Indebtedness owing by it to Borrower or EOTT MLP, (iv) transfer
any of its assets to any Borrower or EOTT MLP or (v) create, incur, assume or
suffer to exist any Lien upon its property or assets to secure the Obligations.
No Debtor will enter into any "take-or-pay" contract or other contract or
arrangement for the purchase of goods or services that obligates it to pay for
such goods or service regardless of whether they are delivered or furnished to
it other than contracts for pipeline capacity or for services in either case
reasonably anticipated to be utilized in the ordinary course of business. No
ERISA Affiliate will incur any obligation to contribute to any "multiemployer
plan" as defined in Section 4001 of ERISA that is subject to Title IV of ERISA.
No Debtor shall prepay the principal of, or purchase, redeem or otherwise
acquire or retire for value, any of the EOTT MLP Senior Notes.
(l) Modification of Certain Agreements. Except as contemplated
by the Reorganization Plan filed with the Bankruptcy Court, no Debtor will
amend, modify, or permit any amendment or modification to (i) its partnership
agreement, limited liability company agreement, certificate of formation,
certificate of incorporation or other organizational document, as applicable,
(ii) the EOTT MLP Senior Notes Indenture, or (iii) any contract or lease, that
releases, qualifies, limits, makes contingent or otherwise detrimentally affects
the rights and benefits of the Term Lender Agent or any other Lender Party under
or acquired pursuant to any Security Documents.
(m) Open Positions. The Debtors shall at all times limit their
Open Positions in accordance with the Risk Management Policies as from time to
time in effect.
(n) Intentionally Omitted.
(o) Books and Records. No Debtor shall permit any material
change in the accounting treatment or reporting practices of each Debtor from
those used in preparation of the financial statements referenced in Section
9(d), except as required or permitted under GAAP.
(p) Bankruptcy Cases. No Debtor will seek, consent or suffer
to exist (i) any modification, stay, vacation or amendment to the Orders, unless
(1) the Term Lenders have failed to perform their obligations hereunder in any
respect material to the business operations of the Debtors and the effect of
such modification, stay, vacation or amendment is solely to remedy such failure
or to obtain for the Debtors substitute performance or (2) the Term Lender Agent
has consented to such modification, stay, vacation or amendment in writing, (ii)
a priority claim for administrative expense or unsecured claim against any of
the Debtors (now existing or hereafter arising of any kind or nature whatsoever,
including without limitation any administrative expense of the kind specified in
Section 503(b), 506(c) or 507(b) of the Bankruptcy Code) equal or superior to
the priority claims of the Term Lender Agent and the Term Lenders in respect of
the Obligations, except for Agreed Administrative Expenses, or (iii) any Lien on
any Collateral, having a priority equal or superior to the Liens in favor of the
Term Lender Agent and the Term Lenders in respect of the Obligations or securing
the Prepetition Bank Debt, except for Permitted Prior Liens.
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(q) Cash Budget. No Debtor will permit the actual Cumulative
Net Cash Flow for two consecutive Reference Periods to be less than 90% of the
amount of projected Cumulative Net Cash Flow for such Reference Periods as
specified in the Fixed Cash Budget.
As used herein:
(i) "CUMULATIVE NET CASH FLOW" has the meaning set forth in
the Initial Cash Budget;
(ii) "FIXED CASH BUDGET" means the Initial Cash Budget and any
other subsequent sixteen-week weekly cash revenue and expense budget prepared by
the Debtors and approved by the Term Lender Agent as to form and substance and
designated in writing by the Debtors and the Term Lender Agent as the "Fixed
Cash Budget" for purposes of this Agreement. In the event that the Initial Cash
Budget has not been replaced by a subsequent Fixed Cash Budget, as provided
above, then for periods between the last period covered by the Initial Cash
Budget and the Maturity Date, and for purposes of determining compliance with
this Section 10(q), the projected Cumulative Net Cash flow shall be determined
by extrapolating the Cumulative Cash Flow for the last month covered by the
Initial Cash Budget on a basis satisfactory to the Term Lender Agent; and
(iii) "REFERENCE PERIOD" means any period described in the
Fixed Cash Budget which starts with the first week covered by such Budget and
ends with the most recently ended week. Accordingly, the first Reference Period
will be the first week covered by the Fixed Cash Budget, the second Reference
Period will be the first two weeks (considered as a single period) covered by
the Fixed Cash Budget, the third Reference Period will be the first three weeks
(considered as a single period) covered by the Fixed Cash Budget, and so on.
(r) Minimum Crude Oil Lease Volumes. The Borrowers shall not
permit aggregate crude oil purchases at the lease during any month to be less
than 98% of the Minimum Lease Volumes. As used herein, "Minimum Lease Volume"
means 230,000 barrels per day. In the event that the Borrowers wish to enter
into a marketing arrangement with a third party that will cause a decrease in
aggregate crude oil purchases from leaseholders, the Term Lenders may amend this
clause (r) to reduce the Minimum Lease Volume in accordance with Section 17(n).
(s) Prepetition Indebtedness. The Debtors shall not pay or
discharge, or cause to be paid or discharged, any Indebtedness of any Debtor
incurred before the Filing Date other than payments:
(i) on Prepetition Bank Debt;
(ii) approved by the Bankruptcy Court on or before the date of
the Second Interim Order, including without limitation, the Critical
Vendor Order;
(iii) required by Section 1114 of the Bankruptcy Code;
(iv) as required in the Reorganization Plan, on or about the
effective date of the Reorganization Plan; or
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(v) of severance and other payments approved by the Bankruptcy
Court and to which the Term Lender Agent consents in writing.
None of the Borrowers shall (x) file any motion with the Bankruptcy
Court in accordance with Section 546(g) of the Bankruptcy Code seeking
to return any goods shipped to any of the Borrowers prior to the Filing
Date, or (y) consent to any creditor taking a set-off against any
Prepetition Bank Debt based upon any such return pursuant to Section
553(b)(1) of the Bankruptcy Code or otherwise, in each case without the
Term Lender Agent's consent in writing.
11. EVENTS OF DEFAULT. Each of the following events constitutes an Event of
Default under this Agreement:
(a) Borrower fails to pay any Obligations with respect to
any Term Loan when due and payable;
(b) Any Debtor fails to pay any Obligation (other than
the Obligations in subsection (a) above) when due and
payable, whether at a date for the payment of a fixed
installment or as a contingent or other payment
becomes due and payable or as a result of
acceleration or otherwise, within three Business Days
after the same becomes due;
(c) Any event defined as a "default" or "event of
default" in any Credit Document (other than this
Agreement and such "events of default" that are
defined to have occurred upon the occurrence of
Events of Default hereunder) occurs, and the same is
not remedied within the applicable period of grace
(if any) provided in such Credit Document;
(d) Any Debtor fails to duly observe, perform or comply
with any covenant, agreement or provision of Section
2(d), Section 2(e), Section 9(f), Section 9(k), or
Section 10;
(e) Any Debtor fails (other than as referred to in
subsection (a), (b), (c) or (d) above) to duly
observe, perform or comply with any covenant,
agreement, condition or provision of any Credit
Document to which it is a party, and such failure
remains unremedied for a period of 10 days after
notice of such failure is given by the Term Lender
Agent to the Borrower Representative;
(f) Any representation or warranty previously, presently
or hereafter made or deemed made in writing by or on
behalf of any Debtor in connection with any Credit
Document shall prove to have been false or incorrect
in any material respect on any date on or as of which
made or deemed made, or any Credit Document at any
time ceases to be valid, binding and enforceable as
warranted in Section 8(b) for any reason other than
its release or subordination by all Term Lenders;
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(g) Any Debtor shall default in the payment when due of
any principal of or interest on any postpetition
Indebtedness, or any prepetition Indebtedness if, by
order of the Bankruptcy Court issued with respect to
such prepetition Indebtedness, the default thereunder
entitles the holder thereof to relief from the
automatic stay pursuant to Section 362 of the
Bankruptcy Code, in excess of $500,000 in the
aggregate of such postpetition or prepetition
Indebtedness, or any event specified in any note,
agreement, indenture, mortgage, deed of trust,
security agreement or other document evidencing or
relating to any such post-petition Indebtedness shall
occur if the effect of such event is to cause, or
(with the giving of any notice or the lapse of time
or both) to permit the holder or holders of such
post-petition Indebtedness (or a trustee or agent on
behalf of such holder or holders) to cause, such
post-petition Indebtedness to become due, or to be
prepaid in full (whether by redemption, purchase,
offer to purchase or otherwise), prior to its stated
maturity;
(h) Any Debtor has entered against it judgment or
execution action which remains undismissed for a
period of thirty (30) days, or relief from the
automatic stay under Section 362(a) of the Bankruptcy
Code shall be granted to any creditor or creditors of
any of the Debtors with respect to assets having an
aggregate value in excess of $500,000 or where the
deprivation of any of the Debtors of such assets
would reasonably be expected to have a material
adverse effect on the Debtors, considered as a whole;
(i) Any Change in Control occurs;
(j) Any Borrower (i) maintains in effect Risk Management
Policies that are not Currently Approved by the Term
Lender Agent or (ii) fails to adhere to or conduct
its risk management activities, or cause the other
Debtors to adhere to or conduct their respective risk
management activities, in accordance with the Risk
Management Policies as in effect from time to time;
(k) Any Material Adverse Change occurs;
(l) Any of the Borrowers shall be enjoined from
conducting any part of its business as a debtor in
possession;
(m) The Bankruptcy Court shall enter an order (i)
amending, supplementing, altering, staying, vacating
rescinding or otherwise modifying any Order or any
other order with respect to any of the Cases
affecting in any material respect this Agreement or
the Prepetition Credit Agreement, (ii) appointing a
chapter 11 trustee or an examiner with enlarged
powers relating to the operation of the business
(powers beyond those set forth in Section 1106(a)(3)
and (4) of the Bankruptcy Code) under Section 1106(b)
of the Bankruptcy Code in any of the
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Cases, (iii) dismissing any of the Cases or
converting any of the Cases to a chapter 7 case or
(iv) granting relief from the automatic stay to any
creditor holding or asserting a Lien or reclamation
claim on a material portion (i.e. more than $500,000
in the aggregate) of the assets of any of the
Borrowers or where the deprivation of any of the
Borrowers of such assets would reasonably be expected
to have a material adverse effect on the Borrowers,
considered as a whole, or (v) the granting of any
security interest in or any Lien on any property of
the Debtors in favor of any party (other than Liens
granted pursuant to the Second Interim Order or
otherwise permitted therein);
(n) The Bankruptcy Court shall fail to sign the Final
Order by October 25, 2002;
(o) An application shall be filed by any of the Borrowers
for the approval of any other Superpriority Claim
(exclusive of the Superpriority Claim in favor of the
Prepetition Lenders, the LC Participants, the LC
Issuer, the Term Lenders, the Administrative Agents
and the Collateral Agent) in any of the Cases which
is pari passu with or senior to the claims of the
Term Lender Agent and the Term Lenders against any of
the Borrowers unless after giving effect to the
transactions contemplated by such application all
Obligations and the Prepetition Bank Debt (whether
contingent or otherwise) shall be paid in full in
cash, or there shall arise any such Superpriority
Claim;
(p) Any of the Borrowers shall be unable to pay its
postpetition debts as they mature or shall fail to
comply with any order of the Bankruptcy Court in any
material respect;
(q) Any party to the Restructuring Agreement (other than
any of the Prepetition Lenders) shall breach any of
its obligations under the Restructuring Agreement;
(r) The occurrence of an event of default under any of
the Orders or, when it was in effect, the First
Interim Order or the Second Interim Order; or
(s) Any of the Borrowers shall file a motion in any of
the Cases (i) except as provided in the Orders, to
use cash collateral of the Term Lenders under Section
363(c) of the Bankruptcy Code without the Term
Lenders' consent, (ii) to recover from any portions
of the Collateral any costs or expenses of preserving
or disposing of such Collateral pursuant to Section
506(c) of the Bankruptcy Code, or (iii) to take any
other action or actions adverse to the Term Lenders
or their rights and remedies hereunder or any of the
other Credit Documents or any of the documents
evidencing or creating any of the Term Lenders'
interest in any of the Collateral; or
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(t) Any failure to complete the following actions within
the time periods set forth below:
(i) By the week of December 3, 2002, hearing held on the
adequacy of the disclosure statement;
(ii) By January 3, 2003, mail solicitation materials to
creditors, Bondholders and Enron Parties;
(iii) By February 4, 2003, obtain all ballot and
confirmation and objections to Reorganization Plan;
(iv) By February 11, 2003, hearing held on confirmation of
Reorganization Plan; and
(v) By March 1, 2003, Reorganization Plan to become
effective; or
(u) Any event defined as a "default" or "event of
default" in either SCTSC Purchase Agreement occurs
and the same is not remedied within the applicable
period of grace (if any) provided in such SCTSC
Purchase Agreement.
12. RIGHTS AND REMEDIES. Upon the occurrence and during the continuance of any
Event of Default, the Term Lender Agent, upon the direction of the Majority Term
Lenders, shall by notice to the Borrower Representative declare all or any
portion of the Obligations to be due and payable and/or the commitment to extend
credit to the Borrowers (if not theretofore terminated) to be terminated,
whereupon the full unpaid amount of such Obligations which shall be so declared
due and payable shall be and become immediately due and payable, without further
notice, demand or presentment, and/or, as the case may be, the commitment to
extend credit to the Borrowers shall terminate. In addition pursuant to Section
2.3(a) of the Intercreditor Agreement, if the obligations under the DIP Letter
of Credit Agreement are accelerated as a result of a continuing "Event of
Default" thereunder, the Term Lender Agent, upon the direction of the Majority
Term Lenders, shall by notice to the Borrower Representative declare all or any
portion of the Obligations to be due and payable at the same time as the
obligations under the DIP Letter of Credit Agreement, whereupon the full unpaid
amount of such Obligations which shall be so declared due and payable shall be
and become immediately due and payable, without further notice, demand or
presentment. In accordance with the Intercreditor Agreement, the Term Lender
Agent shall not exercise certain of its remedies without the consent of the
Required Secured Parties (as defined in the Intercreditor Agreement). In
addition, the Term Lender Agent will not, without the consent of Majority Term
Lenders, direct the Collateral Agent to take any "Enforcement Action" (as
defined in the Intercreditor Agreement), give any consent under Section 2.3(e)
or 7.3 of the Intercreditor Agreement, or make any election or designation under
Section 3.2(d) of the Intercreditor Agreement.
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13. GUARANTY.
(a) Each Guarantor hereby jointly and severally,
irrevocably, absolutely and unconditionally
guarantees to the Term Lenders the prompt, complete
and full payment and performance when due, no matter
how the same shall become due, of all Obligations,
including but not limited to:
(i) All obligations of Borrowers to pay the principal of
and accrued interest on the Term Notes;
(ii) All other sums payable under this Agreement and the
other Credit Documents, whether for principal,
interest, fees or otherwise; and
(iii) Any and all other Indebtedness, obligations or
Liabilities that may at any time be owed by Borrowers
to the Term Lenders, whether incurred heretofore or
hereafter or concurrently herewith, under or pursuant
to any of the Credit Documents, and including
interest, attorneys' fees and collection costs as may
be provided by law or in any instrument evidencing
any such Indebtedness or Liability.
Without limiting the generality of the foregoing, the Guarantors'
liability hereunder shall extend to and include all postpetition
interest, expenses and other Liabilities of Borrowers described above
in this subsection (a), or below in the following subsection (b), which
would be owed by Borrowers but for the fact that they are unenforceable
or not allowable due to the existence of a bankruptcy, reorganization
or similar proceeding involving a Borrower.
(b) If Borrowers shall for any reason fail to pay any
Obligation described in Section 13(a), as and when
such Obligation shall become due and payable, whether
at its stated maturity, as a result of the exercise
of any power to accelerate, or otherwise, the
Guarantors will, forthwith upon demand by the Term
Lender Agent, pay such Obligation in full to the
Collateral Agent for the account of the Term Lenders.
(c) If any Guarantor fails to pay any obligation as
described in the immediately preceding subsections
(a) or (b), each Guarantor will incur the additional
joint and several obligation to pay to the Collateral
Agent for the account of the Term Lender Agent, and
the Guarantors will forthwith upon demand by the Term
Lender Agent pay to the Collateral Agent for the
account of the Term Lender Agent, the amount of any
and all expenses, including fees and disbursements of
the Term Lender Agent's counsel and of any experts or
agents retained by the Term Lender Agent that the
Term Lender Agent may incur as a result of such
failure.
(d) As between the Guarantors and Term Lenders, this
guaranty shall be considered a primary and liquidated
Liability of the Guarantors.
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(e) Each Guarantor hereby waives all defenses based on
suretyship and agrees that its obligations shall
continue and the enforceability thereof against such
Guarantor shall not be affected by:
(i) any waiver, delay or failure of any Term Lender to
exercise or to exhaust any right or remedy or to
bring any right or remedy or action against the
Borrowers, the Collateral or any other security
available to the Term Lenders in connection with the
Obligations;
(ii) any extension, renewal, settlement, compromise,
modification, amendment, consent, waiver or release
in any respect, arising under or in connection with
any of the Obligations;
(iii) the existence of any claim, set-off, or other rights
that any Borrower may have at any time against any
Lender Party, whether in connection with the
Obligations or any unrelated transactions;
(iv) any invalidity or unenforceability relating to or
against any Borrower, for any reason, of any of the
Obligations or any agreement relating thereto;
(v) any Event of Default; or
(vi) any other act or failure to act or delay of any kind
by any Borrower or Lender Party or any other
circumstance whatsoever which might, but for the
provisions hereof, constitute a defense available to,
or a legal or equitable discharge of, the Borrowers.
(f) The obligations of each Guarantor hereunder shall
continue to be effective or be reinstated, as the
case may be, if at any time, payment, or any part
thereof, of any obligation or interest thereon is
rescinded or must otherwise be restored by any Lender
Party in connection with the bankruptcy of the
Borrowers.
(g) Each Guarantor hereby waives promptness, diligence,
presentment, demand of payment, protest, order and
receipt of any notice in connection with its
obligations hereunder.
14. TERM LENDER AGENT.
(a) Appointment and Authority. Each Lender Party hereby
irrevocably authorizes the Term Lender Agent, and the Term Lender Agent hereby
undertakes, to receive payments of principal, interest and other amounts due
hereunder as specified herein and to take all other actions and to exercise such
powers under the Credit Documents as are specifically delegated to the Term
Lender Agent by the terms hereof or thereof, together with all other powers
reasonably incidental thereto. The relationship of the Term Lender Agent to the
other Lender Parties is only that of one commercial lender acting as an agent
for others, and nothing in the Credit Documents shall be construed to constitute
the Term Lender Agent a trustee or other fiduciary for any Lender Party, nor to
impose on the Term Lender Agent duties and obligations other than those
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expressly provided for in the Credit Documents. With respect to any matters not
expressly provided for in the Credit Documents and any matters that the Credit
Documents place within the discretion of the Term Lender Agent, the Term Lender
Agent shall not be required to exercise any discretion or take any action, and
it may request instructions from the Lender Parties with respect to any such
matter, in which case it shall be required to act or to refrain from acting (and
shall be fully protected and free from liability to all Lender Parties in so
acting or refraining from acting) upon the instructions of the Majority Term
Lenders (including itself); provided, however, that the Term Lender Agent shall
not be required to take any action that exposes it to a risk of personal
liability that it considers unreasonable or which is contrary to the Credit
Documents or to applicable Law. Upon receipt by the Term Lender Agent from the
Borrower Representative of any communication calling for action on the part of
the Term Lenders or upon notice from the Borrower Representative or any Term
Lender to the Term Lender Agent of any Default or Event of Default, the Term
Lender Agent shall promptly notify each other Term Lender thereof.
(b) Exculpation, the Term Lender Agent's Reliance, etc.
Neither the Term Lender Agent nor any of its directors, officers, agents,
attorneys or employees shall be liable for any action taken or omitted to be
taken by any of them under or in connection with the Credit Documents, including
their negligence of any kind, except that each shall be liable for its own gross
negligence or willful misconduct. Without limiting the generality of the
foregoing, the Term Lender Agent (i) may consult with legal counsel (including
counsel for the Borrowers), independent public accountants and other experts
selected by it and shall not be liable for any action taken or omitted to be
taken in good faith by it in accordance with the advice of such counsel,
accountants or experts; (ii) makes no warranty or representation to any other
Lender Party and shall not be responsible to any other Lender Party for any
statements, warranties or representations made in or in connection with the
Credit Documents; (iii) shall not have any duty to ascertain or to inquire as to
the performance or observance of any of the terms, covenants or conditions of
the Credit Documents on the part of any Debtor or to inspect the property
(including the books and records) of any Debtor; (iv) shall not be responsible
to any other Lender Party for the due execution, legality, validity,
enforceability, genuineness, sufficiency or value of any Credit Document or any
instrument or document furnished in connection therewith; (v) may rely upon the
representations and warranties of each Debtor or any Lender Party in exercising
its powers hereunder; and (vi) shall incur no Liability under or in respect of
the Credit Documents by acting upon any notice, consent, certificate or other
instrument or writing (including any facsimile, telegram, cable or telex)
believed by it to be genuine and signed or sent by the proper Person or Persons.
(c) Credit Decisions. Each Lender Party acknowledges that it
has, independently and without reliance upon any other Lender Party, made its
own analysis of the Borrowers and the transactions contemplated hereby and its
own independent decision to enter into this Agreement and the other Credit
Documents. Each Lender Party also acknowledges that it will, independently and
without reliance upon any other Lender Party and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking action under the Credit Documents.
(d) Indemnification. Each Term Lender agrees to indemnify the
Term Lender Agent (to the extent not reimbursed by the Borrowers within ten (10)
days after demand) from
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and against such Term Lender's Percentage Share of any and all Liabilities and
Costs which to any extent (in whole or in part) may be imposed on, incurred by
or asserted against the Term Lender Agent growing out of, resulting from or in
any other way associated with any of the Collateral, the Credit Documents and
the transactions and events (including the enforcement thereof) at any time
associated therewith or contemplated therein (whether arising in contract or in
tort or otherwise and including any violation or noncompliance with any
Environmental Laws by any Person or any Liabilities or duties of any Person with
respect to Hazardous Materials found in or released into the environment). The
foregoing indemnification shall apply whether or not such Liabilities and Costs
are in any way or to any extent owed, in whole or in part, under any claim or
theory of strict Liability or caused, in whole or in part, by any negligent act
or omission of any kind by the Term Lender Agent; provided, however, only that
no Term Lender shall be obligated under this Section to indemnify the Term
Lender Agent for that portion, if any, of any Liabilities and Costs proximately
caused by the Term Lender Agent's own individual gross negligence or willful
misconduct, as determined in a final judgment. Cumulative of the foregoing, each
Term Lender agrees to reimburse the Term Lender Agent promptly upon demand for
such Term Lender's Percentage Share of any costs and expenses to be paid to the
Term Lender Agent by Borrower under Section 1 to the extent that the Term Lender
Agent is not timely reimbursed for such expenses by Borrower as provided in such
section. As used in this Section the term "THE TERM LENDER AGENT" shall refer
not only to the Person designated as such in Section 1 but also to each
director, officer, agent, attorney, employee, representative and Affiliate of
such Person.
(e) Rights as Term Lender. In its capacity as a Term Lender,
the Term Lender Agent shall have the same rights and obligations as any Term
Lender and may exercise such rights as though it were not the Term Lender Agent.
The Term Lender Agent may accept deposits from, lend money to, act as trustee
under indentures of and generally engage in any kind of business with any Debtor
or their Affiliates, all as if it were not the Term Lender Agent hereunder and
without any duty to account therefor to any other Term Lender.
(f) Sharing of Set-Offs and Other Payments. Each Lender Party
agrees that if it shall, whether through the exercise of rights under any
Security Document or rights of banker's Lien, set off or counterclaim against
any of the Borrowers or otherwise, obtain payment of a portion of the aggregate
Obligations owed to it which, taking into account all distributions made by the
Term Lender Agent under Section 3(b), causes such Lender Party to have received
more than it would have received had such payment been distributed by the Term
Lender Agent pursuant Section 3(b), then (i) it shall be deemed to have
simultaneously purchased and shall be obligated to purchase interests in the
Obligations as necessary to cause all Lender Parties to share all payments and
(ii) such other adjustments shall be made from time to time as shall be
equitable to ensure that the Term Lender Agent and all Lender Parties share all
payments of Obligations as provided in Section 3(b); provided, however, that
nothing herein contained shall in any way affect the right of any Lender Party
to obtain payment (whether by exercise of rights of banker's Lien, set-off or
counterclaim or otherwise) of Indebtedness other than the Obligations. The
Borrowers expressly consent to the foregoing arrangements and agree that any
holder of any such interest or other participation in the Obligations, whether
or not acquired pursuant to the foregoing arrangements, may to the fullest
extent permitted by Law and, subject to the provisions of Section 9(t), exercise
any and all rights of banker's Lien, set-off or counterclaim as fully as if such
holder were a holder of the Obligations in the amount of such
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interest or other participation. If all or any part of any funds transferred
pursuant to this Section is thereafter recovered from the seller under this
Section which received the same, the purchase provided for in this Section shall
be deemed to have been rescinded to the extent of such recovery, together with
interest, if any, if interest is required pursuant to the order of a Tribunal to
be paid on account of the possession of such funds prior to such recovery.
(g) Investments. Whenever the Term Lender Agent in good faith
determines that it is uncertain about how to distribute to the Lender Parties,
any funds that it has received, or whenever the Term Lender Agent in good faith
determines that there is any dispute among the Lender Parties about how such
funds should be distributed, the Term Lender Agent may choose to defer
distribution of the funds that are the subject of such uncertainty or dispute.
If the Term Lender Agent in good faith believes that the uncertainty or dispute
will not be promptly resolved, or if the Term Lender Agent is otherwise required
to invest funds pending distribution to the Lender Parties, the Term Lender
Agent shall invest such funds pending distribution, and all interest on any such
Investment shall be distributed upon the distribution of such Investment in the
same proportion and to the same Persons as such Investment. All moneys received
by the Term Lender Agent for distribution to the Lender Parties (other than to
the Person who is the Term Lender Agent in its separate capacity as Lender
Party) shall be held by the Term Lender Agent pending such distribution solely
as the Term Lender Agent for such Lender Parties, and the Term Lender Agent
shall have no equitable title to any portion thereof.
(h) Benefit of this Section. The provisions of this Section
are intended solely for the benefit of the Lender Parties and no Debtor shall be
entitled to rely on any such provision or assert any such provision in a claim
or defense against any Term Lender (other than in relation to the reference to
Section 9(t) contained in Section 14(f). The Lender Parties may waive or amend
such provisions as they desire without any notice to or consent of Borrower or
any other Debtor.
(i) Resignation. The Term Lender Agent may resign at any time
by giving written notice thereof to the Term Lenders and the Borrower
Representative. Each such notice shall set forth the date of such resignation.
Upon any such resignation, the Majority Term Lenders shall have the right to
appoint a successor Term Lender Agent. A successor must be appointed for any
retiring Term Lender Agent, and such Term Lender Agent's resignation shall
become effective when such successor accepts such appointment. If, within 30
days after the date of the retiring Term Lender Agent's resignation, no
successor Term Lender Agent has been appointed and has accepted such
appointment, then the retiring Term Lender Agent may appoint a successor Term
Lender Agent, which shall be a commercial bank organized or licensed to conduct
a banking or trust business under the Laws of the United States of America or of
any state thereof. Upon the acceptance of any appointment as the Term Lender
Agent hereunder by a successor Term Lender Agent, the retiring Term Lender Agent
shall be discharged from its duties and obligations under this Agreement and the
other Credit Documents. After any retiring Term Lender Agent's resignation
hereunder, the provisions of this Section shall continue to inure to its benefit
as to any actions taken or omitted to be taken by it while it was the Term
Lender Agent under the Credit Documents.
(j) Other Lender Parties. None of the Lender Parties in such
capacities, other than the Term Lender Agent in such capacity, shall have any
duties or responsibilities or incur any liabilities in their respective agency
capacities (as opposed to their respective capacities as
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Term Lenders) under or in connection with this Agreement or under any of the
other Credit Documents. The relationship between the Borrowers, on the one hand,
and the Term Lender Agent and such other Lender Parties, on the other hand,
shall be solely that of borrower and lender. The Term Lender Agent and the
Lender Parties shall not have any fiduciary responsibilities to the Borrowers or
any of their Affiliates. The Term Lender Agent and the Lender Parties do not
undertake any responsibility to the Borrowers or any of their Affiliates to
review or inform any of the Borrowers of any matter in connection with any phase
of any the Borrowers' or their Affiliate's business or operations.
15. ASSIGNMENTS AND PARTICIPATIONS.
(a) None of the Debtors may, without the consent of the
Term Lender Agent, assign or delegate any of its
respective rights or obligations under this Agreement
or any other Credit Document. Each Term Lender may,
without the consent of any other Lender Party or any
Debtor, assign any or all of its rights and
obligations under this Agreement to any Person;
provided that (i) such assignment shall include the
assignment of the same percentage of the assignor's
Tier-A Term Loans and Tier-B Term Loans and (ii) any
assignment made by ▇▇▇▇▇▇ Commercial Paper, Inc., in
its capacity as a Term Lender, during the two week
period following the Closing Date shall solely be to
Persons who are Bondholders and their Affiliates.
(b) Upon execution and delivery of any assignment
permitted hereunder, from and after the closing date
specified in the assignment, (i) the assignee
thereunder shall be a party hereto and, to the extent
that rights and obligations hereunder have been
assigned to it pursuant to such assignment, have the
rights and obligations as a Term Lender hereunder and
(ii) the assignor Term Lender shall, to the extent
that rights and obligations hereunder have been
assigned by it pursuant to such assignment,
relinquish its rights and be released from its
obligations under this Agreement (and, in the case of
an assignment covering all of such Term Lender's
rights and obligations under this Agreement, such
Term Lender shall cease to be a party hereto).
(c) By executing and delivering an assignment, the
assignor Term Lender and the assignee thereunder
confirm to and agree with each other and the other
parties hereto as follows: (i) other than as provided
in such assignment, such Term Lender makes no
representation or warranty and assumes no
responsibility with respect to any statements,
warranties or representations made in or in
connection with this Agreement or any other Credit
Document or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of
this Agreement or any other Credit Document or any
other instrument or document furnished pursuant
hereto; (ii) such Term Lender makes no representation
or warranty and assumes no responsibility with
respect to the financial condition of any Debtor or
the performance or observance by any Debtor of any of
its obligations under
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this Agreement or any other Credit Document or any
other instrument or document furnished pursuant
hereto; (iii) such assignee confirms that it has
received a copy of this Agreement, and such other
Credit Documents and other documents and information
as it has deemed appropriate to make its own credit
analysis and decision to enter into such assignment;
(iv) such assignee will, independently and without
reliance upon such Term Lender and based on such
documents and information as it shall deem
appropriate at the time, continue to make its own
credit decisions in taking or not taking action under
this Agreement; and (v) such assignee agrees that it
will perform in accordance with their terms all of
the obligations which by the terms of this Agreement
are required to be performed by it as a Term Lender.
(d) Upon its receipt of an assignment executed by a
Term Lender and an assignee, the Term Lender Agent
shall give prompt notice thereof to the Borrower
Representative. The assignor or assignee shall pay to
the Term Lender Agent a processing and recordation
fee of $3,500 for each assignment. Within two
Business Days after its receipt of such notice,
Borrowers shall execute and deliver to the assignor
Term Lender and the assignee in exchange for the
surrendered Term Note, new Term Notes to the order of
the assignor Term Lender and such assignee,
respectively. Such new Term Notes shall be in an
aggregate principal amount equal to the aggregate
principal amount of such surrendered Term Note. The
new Term Notes shall be dated the closing date of
such assignment and shall otherwise be in
substantially the form of Exhibit A-1 or Exhibit A-2,
as applicable.
(e) The Term Lender Agent shall maintain a copy of each
assignment delivered to it and a register for the
recordation of the names and addresses of each
assignee and, with respect to the Term Lenders, the
principal amount owing to each Term Lender from time
to time (the "REGISTER"). The entries in the Register
shall be conclusive and binding for all purposes,
absent manifest error, and the Borrower
Representative and each Term Lender may treat each
person, corporation, partnership, limited liability
company or other entity whose name is recorded in the
Register as a Term Lender hereunder for the purposes
of this Agreement. The Register shall be available
for inspection by the Borrower Representative or any
Term Lender at any reasonable time and from time to
time upon reasonable prior notice.
(f) Any Term Lender may sell participations to one or
more Assignees in or to all or a portion of its
rights and obligations under this Agreement;
provided, however, that (i) such Term Lender's
obligations under this Agreement shall remain
unchanged, (ii) such Term Lender shall remain solely
responsible to the other parties hereto for the
performance of such obligations, (iii) the Borrower
Representative shall continue to deal solely and
directly with such Term Lender in connection with
such Term
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Lender's rights and obligations under this Agreement
and (iv) in any proceeding under any bankruptcy,
insolvency or similar proceeding in respect of any
Borrower or any other Debtor, such Term Lender shall
remain and be, to the fullest extent permitted by
law, the sole representative with respect to the
rights and obligations held in the name of such Term
Lender (whether such rights or obligations are for
such Term Lender's own account or for the account of
any participant).
(g) Each Term Lender may, in connection with any
assignment or participation or proposed assignment or
participation pursuant to this Section, disclose to
the assignee or participant or proposed assignee or
participant any information relating to the Debtors
or their Affiliates furnished to such Term Lender by
or on behalf of the Debtors, provided, that such
assignees or participants have agreed to be bound by
the confidentiality provisions in Section 17(p).
16. INDEMNIFICATION.
(a) Subject to Section 16(b) and the prosecution of
Avoidance Actions, the Debtors, on a joint and
several basis, shall indemnify each Lender Party on
demand against any and all Liabilities, costs and
claims which to any extent (in whole or in part) may
be imposed on, incurred by or asserted against any
Lender Party growing out of, resulting from or in any
other way associated with:
(i) the Extensions of Credit;
(ii) any cash management arrangements with respect to
agency accounts and lockbox accounts maintained by
any of the Borrowers with any Person; and
(iii) any of the Collateral, the Credit Documents, the
Restructuring Agreement, the Reorganization Plan, and
the transactions and events (including the
enforcement or defense thereof) at any time
associated therewith or contemplated therein, whether
arising in contract or in tort or otherwise and
including any violation or noncompliance with any
Environmental Laws by any Lender Party or any other
Person or any Liabilities or duties of any Lender
Party or any other Person with respect to Hazardous
Materials found in or Released into the environment.
(b) The foregoing indemnification shall apply whether or
not such Liabilities, costs and claims are in any way
or to any extent owed, in whole or in part, under any
claim or theory of strict liability or caused, in
whole or in part, by any negligent act or omission of
any kind by any Lender Party; provided, however, only
that Lender Party shall not be entitled under this
Section to receive indemnification for that portion,
if any, of any Liabilities, costs and claims
proximately caused by its own individual
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gross negligence or willful misconduct, as determined
in a final judgment. If any Person (including any
Debtor or any of its Affiliates) ever alleges such
gross negligence or willful misconduct by Lender
Party, the indemnification provided for in this
Section shall nonetheless be paid upon demand,
subject to later adjustment or reimbursement, until
such time as a court of competent jurisdiction enters
a final judgment as to the extent and effect of the
alleged gross negligence or willful misconduct. As
used in this Section the term "Lender Party" shall
refer not only to Lender Party but also to each
director, officer, agent, attorney, employee,
representative and affiliate of such Lender Party.
(c) The Debtors further agree to indemnify on a joint and
several basis the Term Lender Agent's Special Counsel
from, and to hold the Term Lender Agent's Special
Counsel harmless against, any and all claims,
liabilities, costs and expenses relating to the Term
Lender Agent's Special Counsel's representation of
the Term Lender Agent on matters relating to this
Agreement and the Credit Documents and the Cases,
except to the extent finally determined to have
resulted from the willful misconduct, gross
negligence or fraudulent behavior as determined in a
final non-appealable judgment of the Term Lender
Agent's Special Counsel relating to such services.
The Term Lender Agent's Special Counsel may rely upon
the provisions contained in this Section 16(c)
although such Person is not a party to this
Agreement.
17. MISCELLANEOUS.
(a) All Exhibits and Schedules attached to or referred to
in this Agreement are a part hereof for all purposes.
Reference is hereby made to the Security Schedule for
the meaning of certain terms defined therein and used
but not defined herein, which definitions are
incorporated herein by reference.
(b) Unless the context otherwise requires or unless
otherwise provided herein the terms defined in this
Agreement that refer to a particular agreement,
instrument or document also refer to and include all
renewals, extensions, modifications, amendments and
restatements of such agreement, instrument or
document; provided, however, that nothing contained
in this Section shall be construed to authorize any
such renewal, extension, modification, amendment or
restatement.
(c) All references in this Agreement to Exhibits,
Schedules, Articles, Sections, subsections and other
subdivisions refer to the Exhibits, Schedules,
Articles, Sections, subsections and other
subdivisions of this Agreement unless expressly
provided otherwise. Titles appearing at the beginning
of any subdivisions are for convenience only and do
not constitute any part of such subdivisions and
shall be disregarded in construing the language
contained in such subdivisions. The words "this
Agreement," "this instrument," "herein," "hereof,"
"hereby," "hereunder"
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and words of similar import refer to this Agreement
as a whole and not to any particular subdivision
unless expressly so limited. The phrases "this
Section" and "this subsection" and similar phrases
refer only to the Sections or subsections hereof in
which such phrases occur. The word "or" is not
exclusive, and the word "including" (in its various
forms) means "including, without limitation."
Pronouns in masculine, feminine and neuter genders
shall be construed to include any other gender, and
words in the singular form shall be construed to
include the plural and vice versa, unless the context
otherwise requires.
(d) All calculations under the Credit Documents of
interest and fees shall be made on the basis of
actual days elapsed (including the first day but
excluding the last) and a year of 360 days. Each
determination by Lender Party of amounts to be paid
under Section 3 or any other matters that are to be
determined hereunder by Lender Party shall, in the
absence of manifest error, be conclusive and binding.
Unless otherwise expressly provided herein or unless
the Majority Term Lenders otherwise consent, all
financial statements and reports furnished to any
Lender Party hereunder shall be prepared and all
financial computations and determinations pursuant
hereto shall be made in accordance with GAAP as in
effect at the Closing Date.
(e) Notwithstanding that the Collateral Agent, whether on
its own behalf and/or on behalf of others, may
continue to hold the Collateral, and regardless of
the value thereof, each Debtor shall be and remain
liable for the payment in full, including principal
and interest, of any balance of the Obligations and
expenses hereunder at any time unpaid.
(f) Each Debtor hereby expressly waives demand,
presentment, protest, notice of protest and notice of
dishonor with respect to any and all instruments and
commercial paper included in or evidencing any of the
Obligations or the Collateral, and any and all other
demands and notices of any kind or nature whatsoever
with respect to the Obligations, the Collateral, this
Agreement and the other Credit Documents, except such
as are expressly provided for herein or therein.
(g) Under no circumstances shall any Lender Party be
deemed to have assumed any responsibility for or
obligation or duty of any nature or kind with respect
to any Collateral, or any matter or proceedings
arising out of or relating thereto, but the same
shall be at the sole risk of Debtors at all times.
The Debtors hereby release each Lender Party from any
claims, causes of action and demands at any time
arising out of, relating to or with respect to this
Agreement, the other Credit Documents, the
Obligations, the Collateral and/or any actions taken
or omitted to be taken by any Lender Party with
respect thereto, and the Debtors hereby agree jointly
and severally to indemnify and hold each Term Lender
harmless from and
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with respect to any and all such claims, Liabilities,
causes of action and demands by any Person.
(h) Subject to Section 14(f), upon the occurrence and
during the continuance of any Event of Default
hereunder, each Term Lender is hereby authorized at
any time and from time to time, to the fullest extent
permitted by law, to set off and apply any and all
deposits (general or special, time or demand,
provisional or final) at any time held and other
Indebtedness at any time owing by such Term Lender to
or for the credit or the account of any Debtor
against any and all of the Obligations which are then
liquidated and matured. Such Term Lender agrees
promptly to notify the Term Lender Agent and the
Borrower Representative after any such set-off and
application is made by such Term Lender; provided,
however, that the failure to give such notice shall
not affect the validity of such set-off and
application. The rights of the Term Lenders under
this Section are in addition to other rights and
remedies (including, without limitation, other rights
of set-off) which the Term Lenders may have.
(i) No Term Lender shall be liable to any Debtor for (i)
any act or omission of any Person unless due to the
gross negligence or willful misconduct of such Term
Lender, such Term Lender's own branches or such Term
Lender's agents, (ii) loss or destruction of any
draft, demand, or document in transit or in the
possession of others unless due to the gross
negligence or willful misconduct of such Term Lender,
such Term Lender's own branches or such Term Lender's
agents, (iii) lack of knowledge of any particular
trade usage (other than standard banking usage as
used in the normal course of business) unless such
lack of knowledge is due to the gross negligence or
willful misconduct of such Term Lender, such Term
Lender's own branches or such Term Lender's agents,
or (iv) the genuineness, falsification, or effect of
any document which appears on due examination to be
regular on its face.
(j) This Agreement, the Credit Documents and all the
transactions contemplated thereby shall be governed
by and construed in accordance with the laws of the
State of
New York, without regard to choice of law
principles.
(k) Each Debtor hereby irrevocably and unconditionally
submits, for itself and its property, to the
nonexclusive jurisdiction of the Bankruptcy Court
and/or the courts of
New York State or federal court
of the United States of America sitting in New York
City, whether trial or appellate, in any action or
proceeding arising out of, or relating to, this
Agreement, or for recognition or enforcement of any
judgment in respect thereof, and each Debtor hereby
irrevocably and unconditionally agrees that all
claims in respect of any such action or proceeding
may be heard and determined in the Bankruptcy Court
and/or any such New York State court or, to the
extent permitted by law, in such federal court and
consents that any such
-64-
action or proceeding may be brought in such courts
and waives to the fullest extent permitted by law any
objection or claim that it may now or hereafter have
to the venue of any such action or proceeding in any
such court or that such action or proceeding was
brought in an inconvenient court and agrees not to
plead or claim the same. Each Debtor hereby agrees
that a final judgment in any such action or
proceeding shall be conclusive and may be enforced in
other jurisdictions by suit on the judgment or in any
other manner provided by law. Nothing in this
Agreement shall affect any right that any party may
otherwise have to bring any action or proceeding
relating to this Agreement in the courts of any
jurisdiction. EACH DEBTOR HEREBY IRREVOCABLY WAIVES
ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING
OR COUNTERCLAIM ARISING OUT OF, OR RELATING TO, THIS
AGREEMENT OR ANY OTHER CREDIT DOCUMENT OR THE ACTIONS
OF ANY LENDER PARTY IN THE NEGOTIATION,
ADMINISTRATION, PERFORMANCE OR ENFORCEMENT THEREOF..
(l) The Term Lender Agent may rely on the written
notices, requests, waivers and consents of the
Borrower Representative, its officers and designated
agents, including, without limitation, the Borrowing
Notice, as the binding actions of Borrowers
hereunder. Any such notices, requests, waivers or
consents received by the Term Lender Agent from the
Borrower Representative on behalf of Borrower
hereunder shall be deemed to have been sent by
Borrower, and all notices and other information
furnished by the Term Lender Agent to the Borrower
Representative hereunder will be received by the
Borrower Representative on behalf of Borrower. In
addition, the Term Lender Agent may receive from the
Borrower Representative, on behalf of Borrowers, all
amounts required to be paid by Borrowers and may pay
to the Borrower Representative for Borrowers'
account, all amounts required to be paid by or on
behalf of any Term Lender to Borrowers; provided,
however, that the Term Lender Agent shall not have
any responsibility to inquire as to the application
of such amounts by the Borrower Representative and is
hereby released from any liability to Borrower or any
other Debtor arising from such application by the
Borrower Representative.
(m) Each Lender Party agrees (on behalf of itself and
each of its Affiliates, and each of its and their
directors, officers, agents, attorneys, employees and
representatives) that it (and each of them) will take
all reasonable steps to keep confidential any
non-public information supplied to it by or at the
direction of any Debtor; provided, however, that this
restriction shall not apply to information which (i)
has at the time in question entered the public
domain, (ii) is required to be disclosed by Law
(whether valid or invalid) of any Tribunal, (iii) is
disclosed to any of its Affiliates, auditors,
attorneys or agents, (iv) is furnished to any other
Lender Party or to any assignee or prospective
assignee of, or purchaser or prospective purchaser
-65-
of participations or other interests in, any interest
under the Credit Documents (provided each such
assignee or prospective assignee or purchaser or
prospective purchaser first agrees to hold such
information in confidence on the terms provided in
this Section), or (v) is disclosed in the course of
enforcing its rights and remedies following the
occurrence of an Event of Default.
(n) Each of the Debtors acknowledges and agrees that,
upon the expiration of 30 days after the Filing Date,
(i) it has no claim or cause of action (including
without limitation, Avoidance Actions) against the
Prepetition Agent or the Prepetition Lenders (or any
of the Prepetition Agent's or the Prepetition
Lenders' directors, officers, employees or agents),
(ii) it has no offset right, counterclaim or defense
of any kind against any of its obligations,
indebtedness or liabilities to the Prepetition Agent
or the Prepetition Lenders, (iii) the Prepetition
Agent and the Prepetition Lenders have valid first
priority perfected liens on the "Collateral" under
and as defined in the Prepetition Credit Agreement
and that there have been no past conditions, acts,
omissions, events, circumstances or matters which
have impaired or adversely affected any of the
Prepetition Agent's or Prepetition Lenders' rights
interest and title with respect to such "Collateral"
under and as defined in the Prepetition Credit
Agreement, and (iv) the Prepetition Agent and the
Prepetition Lenders have properly performed and
satisfied in a timely manner all of their obligations
to the Debtors.
(o) Waivers and Amendments; Acknowledgments.
(i) No failure or delay (whether by course of conduct or
otherwise) by any Lender Party in exercising any
right, power or remedy which such Lender Party may
have under any of the Credit Documents shall operate
as a waiver thereof or of any other right, power or
remedy, nor shall any single or partial exercise by
any Lender Party of any such right, power or remedy
preclude any other or further exercise thereof or of
any other right, power or remedy. No waiver of any
provision of any Credit Document and no consent to
any departure therefrom shall ever be effective
unless it is in writing and signed as provided below
in this Section, and then such waiver or consent
shall be effective only in the specific instances and
for the purposes for which given and to the extent
specified in such writing. No notice to or demand on
any Debtor shall in any case of itself entitle any
Debtor to any other or further notice or demand in
similar or other circumstances. This Agreement and
the other Credit Documents set forth the entire
understanding among the parties hereto with respect
to the transactions contemplated herein and therein
and supersede all prior discussions and
understandings with respect to the subject matter
hereof and thereof, and no waiver, consent, release,
modification or amendment of or supplement to this
Agreement or the other Credit Documents shall be
valid or effective against any party hereto unless
the same is in writing and
-66-
signed by (A) if such party is a Debtor, by such
party, (B) if such party is the Term Lender Agent, by
such party and (C) if such party is a Term Lender, by
such Term Lender or by the Term Lender Agent with the
consent of the Majority Term Lenders. Notwithstanding
the foregoing or anything to the contrary herein, the
Term Lender Agent shall not, without the prior
consent of each individual Lender Party, execute and
deliver on behalf of such Lender Party any waiver or
amendment that would: (A) increase or reduce the
Percentage Share of any Term Lender or the maximum
amount any such Term Lender is committed to fund in
respect of the Term Loans or subject such Term Lender
to any additional obligations, (B) reduce any
principal, interest or fees payable to such Term
Lender hereunder, (C) change any date fixed for any
payment of any such principal, interest or fees, (D)
amend the definition herein of "Majority Term
Lenders" or otherwise change the aggregate amount of
Percentage Shares required for the Term Lender Agent,
the Term Lenders or any of them to take any
particular action under the Credit Documents, (E)
release Borrower from its requirement to pay the
Obligations or any Guarantor from its guaranty of
such payment, or (F) except as otherwise expressly
provided for in Section 10(c), release any
Collateral.
(ii) Each Borrower hereby represents, warrants,
acknowledges and admits that (A) it has been advised
by counsel in the negotiation, execution and delivery
of the Credit Documents to which it is a party, (B)
it has made an independent decision to enter into
this Agreement and the other Credit Documents to
which it is a party, without reliance on any
representation, warranty, covenant or undertaking by
the Term Lender Agent or any Lender Party (C) there
are no representations, warranties, covenants,
undertakings or agreements by any Lender Party as to
the Credit Documents, (D) no Lender Party has any
fiduciary obligation toward any Debtor with respect
to any Credit Document or the transactions
contemplated thereby, (E) the relationship pursuant
to the Credit Documents between Borrower and the
other Debtors, on one hand, and each Lender Party, on
the other hand, is and shall be solely that of debtor
and creditor, respectively, (F) no partnership or
joint venture exists with respect to the Credit
Documents between any Debtor and any Lender Party,
(G) the Term Lender Agent is not Borrowers' agent,
but the Term Lender Agent for Term Lenders, (H)
should an Event of Default or Default occur or exist,
each Lender Party will determine in its sole
discretion and for its own reasons what remedies and
actions it will or will not exercise or take at that
time, (I) without limiting any of the foregoing,
Borrower is not relying upon any representation or
covenant by any Lender Party, or any representative
thereof, and no such representation or covenant has
been made, that any Lender Party will, at the time of
an Event of Default or Default, or at any other time,
waive, negotiate, discuss or take or refrain from
taking any action permitted under the Credit
Documents with respect to any such Event of Default
or Default or any other provision of the Credit
Documents and (J) all Lender Parties have
-67-
relied upon the truthfulness of the acknowledgments
in this Section in deciding to execute and deliver
this Agreement and to become obligated hereunder.
(p) The Lender Parties, the Debtors and any other parties
to the Credit Documents intend to contract in strict
compliance with applicable usury Law from time to
time in effect. In furtherance thereof such Persons
stipulate and agree that none of the terms and
provisions contained in the Credit Documents shall
ever be construed to create a contract to pay, for
the use, forbearance or detention of money, interest
in excess of the maximum amount of interest permitted
to be contracted for, charged or received by
applicable Law from time to time in effect. Neither
any Debtor nor any present or future guarantors,
endorsers or other Persons hereafter becoming liable
for payment of any Obligation shall ever be liable
for unearned interest thereon or shall ever be
required to pay interest thereon in excess of the
maximum amount that may be lawfully contracted for,
charged or received under applicable Law from time to
time in effect, and the provisions of this Section
shall control over all other provisions of the Credit
Documents that may be in conflict or apparent
conflict herewith. The Lender Parties expressly
disavow any intention to contract for, charge or
receive excessive unearned interest or finance
charges in the event the maturity of any Obligation
is accelerated. If (i) the maturity of any Obligation
is accelerated for any reason, (ii) any Obligation is
prepaid and as a result any amounts held to
constitute interest are determined to be in excess of
the legal maximum or (iii) any Term Lender or any
other holder of any or all of the Obligations shall
otherwise collect moneys that are determined to
constitute interest which would otherwise increase
the interest on any or all of the Obligations to an
amount in excess of that permitted to be contracted
for, charged or received by applicable Law then in
effect, then all sums determined to constitute
interest in excess of such legal limit shall, without
penalty, be promptly applied to reduce the then
outstanding principal of the related Obligations or,
at such Term Lender's or holder's option, promptly
returned to Borrower or other payor thereof upon such
determination. In determining whether or not the
interest paid or payable, under any specific
circumstance, exceeds the maximum amount permitted
under applicable Law, the Lender Parties and the
Debtors (and any other payors thereof) shall to the
greatest extent permitted under applicable Law, (i)
characterize any non- principal payment as an
expense, fee or premium rather than as interest, (ii)
exclude voluntary prepayments and the effects thereof
and (iii) amortize, prorate, allocate and spread the
total amount of interest throughout the entire
contemplated term of the instruments evidencing the
Obligations in accordance with the amounts
outstanding from time to time thereunder and the
maximum legal rate of interest from time to time in
effect under applicable Law in order to lawfully
charge the maximum amount of interest permitted under
applicable Law. In the event applicable Law provides
for an interest ceiling under Chapter 303 of the
Texas Finance
-68-
Code (the "TEXAS FINANCE CODE") as amended, to the
extent that the Texas Finance Code is mandatorily
applicable to any Term Lender, for that day, the
ceiling shall be the "weekly ceiling" as defined in
the Texas Finance Code; provided, however, that if
any applicable Law permits greater interest, the Law
permitting the greatest interest shall apply.
(q) The Debtors and the Lender Parties mutually hereby
knowingly, voluntarily and intentionally waive the
right to a trial by jury in respect of any claim
based hereon, arising out of, under or in connection
with this Agreement or any other Credit Documents
contemplated to be executed in connection herewith or
any course of conduct, course of dealings, statements
(whether oral or written) or actions of any party.
This waiver constitutes a material inducement for the
Lender Parties to enter into this Agreement and the
other Credit Documents and to make Extensions of
Credit. Each Debtor and each Lender Party hereby
further (i) irrevocably waives, to the maximum extent
not prohibited by law, any right it may have to claim
or recover in any such litigation any Special
Damages, as defined below, (ii) certifies that no
party hereto nor any representative or agent or
counsel for any party hereto has represented,
expressly or otherwise, or implied that such party
would not, in the event of litigation, seek to
enforce the foregoing waivers and (iii) acknowledges
that it has been induced to enter into this
Agreement, the other Credit Documents and the
transactions contemplated hereby and thereby by,
among other things, the mutual waivers and
certifications contained in this Section. "SPECIAL
DAMAGES" includes all special, consequential,
exemplary or punitive damages (regardless of how
named), but does not include any payments of funds
that any party hereto has expressly promised to pay
or deliver to any other party hereto.
(r) All of the Debtors' various representations,
warranties, covenants and agreements in the Credit
Documents shall survive the execution and delivery of
this Agreement and the other Credit Documents and the
performance hereof and thereof, including the
delivery of the Credit Documents and shall further
survive until all of the Obligations are paid in full
in cash to each Lender Party and all of the Lender
Parties' obligations to Borrower are terminated. All
statements and agreements contained in any
certificate or other instrument delivered by any
Debtor to any Lender Party under any Credit Document
shall be deemed representations and warranties by
Borrower or agreements and covenants of Borrower
under this Agreement. The representations,
warranties, indemnities and covenants made by the
Debtors in the Credit Documents, and the rights,
powers and privileges granted to the Lender Parties
in the Credit Documents, are cumulative and, except
for expressly specified waivers and consents, no
Credit Document shall be construed in the context of
another to diminish, nullify or otherwise reduce the
benefit to any Lender Party of any such
representation, warranty, indemnity, covenant, right,
power or privilege. In particular and without
limitation, no exception set
-69-
out in this Agreement to any representation,
warranty, indemnity or covenant herein contained
shall apply to any similar representation, warranty,
indemnity or covenant contained in any other Credit
Document, and each such similar representation,
warranty, indemnity or covenant shall be subject only
to those exceptions that are expressly made
applicable to it by the terms of the various Credit
Documents.
(s) Each of the Term Loan Agent and the Term Lenders
acknowledges and agrees that the rights and
obligations of such parties under this Agreement are
subject in all respects to the Intercreditor
Agreement.
[Remainder of page intentionally left blank.]
-70-
IN WITNESS WHEREOF, the parties hereto have executed this Debtor In
Possession
Term Loan Agreement as of the day and year first above written.
EOTT ENERGY OPERATING LIMITED
PARTNERSHIP,
as a Borrower and as the Borrower
Representative
By: EOTT ENERGY GENERAL PARTNER,
L.L.C., its General Partner
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇
Title: Treasurer
EOTT ENERGY CANADA LIMITED
PARTNERSHIP,
as a Borrower
By: EOTT ENERGY GENERAL PARTNER,
L.L.C., its General Partner
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇
Title: Treasurer
EOTT ENERGY LIQUIDS, L.P.,
as a Borrower
By: EOTT ENERGY GENERAL PARTNER, L.L.C.,
its General Partner
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇
Title: Treasurer
EOTT ENERGY PIPELINE LIMITED PARTNERSHIP,
as a Borrower
By: EOTT ENERGY GENERAL PARTNER, L.L.C.,
its General Partner
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇
Title: Treasurer
EOTT ENERGY PARTNERS, L.P.,
as a Guarantor
By: EOTT ENERGY CORP.,
its General Partner
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇
Title: Treasurer
EOTT ENERGY GENERAL PARTNER, L.L.C.,
as a Guarantor
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇
Title: Treasurer
Address for each Debtor:
Attention: Vice President & General
Counsel
By courier: ▇▇▇▇ ▇. ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
By mail: ▇.▇. ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Phone: ▇▇▇-▇▇▇-▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
▇▇▇▇▇▇ BROTHERS INC.
Term Lender Agent
By: /s/ J. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
----------------------------------
Name: J. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Managing Director
▇▇▇▇▇▇ COMMERCIAL PAPER, INC.
a Term Lender
By: /s/ J. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
----------------------------------
Name: J. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Authorized Signatory
FARALLON CAPITAL PARTNERS, L.P., a
California limited partnership, as
a Term Lender
By: Farallon Partners, L.L.C.,
as General Partner
By: /s/ Not Legible
----------------------------------
Managing Member
Farallon Partners, L.L.C.
FARALLON CAPITAL INSTITUTIONAL
PARTNERS, L.P., a California limited
partnership, as a Term Lender
By: Farallon Partners, L.L.C.,
as General Partner
By: /s/ Not Legible
----------------------------------
Managing Member
Farallon Partners, L.L.C.
FARALLON CAPITAL INSTITUTIONAL
PARTNERS II, L.P., a California limited
partnership, as a Term Lender
By: Farallon Partners, L.L.C.,
as General Partner
By: /s/ Not Legible
----------------------------------
Managing Member,
Farallon Partners, L.L.C.
FARALLON CAPITAL INSTITUTIONAL
PARTNERS III, L.P., a Delaware limited
partnership, as a Term Lender
By: Farallon Partners, L.L.C.,
as General Partner
By: /s/ Not Legible
----------------------------------
Managing Member,
Farallon Partners, L.L.C.
TINICUM PARTNERS, L.P., a New York
limited partnership, a Term Lender
By: Farallon Partners, L.L.C.,
as General Partner
By: /s/ Not Legible
----------------------------------
Managing Member,
Farallon Partners, L.L.C.
HIGH YIELD PORTFOLIO, a series of
Income Trust
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Assistant Vice President
Income Trust
AXP VARIABLE PORTFOLIO-EXTRA INCOME FUND,
a series of AXP Variable Portfolio
Income Series, Inc.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Assistant Vice President
AXP Variable Portfolio
Income Series, Inc.
SCHEDULE I
DISCLOSURE SCHEDULE
SCHEDULE II
TERM LENDER SCHEDULE
Percentage Share
----------------
▇▇▇▇▇▇ Commercial Paper Inc. 56.2667%
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇/▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇/(▇▇▇) ▇▇▇-▇▇▇▇
with a copy (excluding financial reports and information) to:
▇▇▇▇ ▇. Rain
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ LLP
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
High Yield Portfolio 10.6667%
AXP Variable Portfolio - Extra Income Fund 2.6667%
c/o ▇▇▇▇ ▇▇▇▇▇▇▇▇
Assistant Manager - Legal Affairs
General Counsel's Office
American Express Financial Advisors
50592 AXP Financial Center
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopy: 612) 671-3767
Farallon Capital Partners, L.P. 11.2000%
Farallon Capital Institutional Partners, L.P. 14.9333%
Farallon Capital Institutional Partners II, L.P. 2.1333%
Farallon Capital Institutional Partners III, L.P. 1.6000%
Tinicum Partners, L.P. .5333%
c/o ▇▇▇▇▇ ▇▇▇▇▇▇▇ and ▇▇▇▇ ▇. ▇▇▇▇▇▇
Farallon Capital Management, L.L.C.
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
SCHEDULE III
SECURITY SCHEDULE
EXHIBIT A-1
PROMISSORY NOTE
TIER-A TERM NOTE
$ New York, New York *[Date]
----------------
FOR VALUE RECEIVED, the undersigned, EOTT ENERGY OPERATING
LIMITED PARTNERSHIP, a Delaware limited partnership and a debtor and debtor in
possession, EOTT ENERGY CANADA LIMITED PARTNERSHIP, a Delaware limited
partnership and a debtor and debtor in possession, EOTT ENERGY LIQUIDS, L.P.,
a Delaware limited partnership and a debtor and debtor in possession,
EOTT ENERGY PIPELINE LIMITED PARTNERSHIP, a Delaware limited partnership
and a debtor and debtor in possession (herein collectively called
"BORROWERS"), hereby jointly and severally promise to pay to the order
of________________________________________________, a *[____________ ]
(herein called "TERM LENDER"), the principal sum of
_______________________________________________________ Dollars ($__________),
together with interest on the unpaid principal balance thereof at
the rate of nine percent (9%) per annum, calculated on the basis of a 360 day
year and the actual number of days elapsed. Both principal and interest shall be
payable as herein provided in lawful money of the United States of America by
payment to the Collateral Agent to be applied as set forth in the Intercreditor
Agreement.
This Note (a) is issued and delivered under that certain
Debtor In Possession
Term Loan Agreement of even date herewith among Borrowers,
EOTT Energy Partners, L.P. and EOTT Energy General Partner, L.L.C., as
guarantors, ▇▇▇▇▇▇ Brothers, Inc., as Term Loan Agent, and the term lenders
(including Term Lender) referred to therein (herein, as from time to time
supplemented, amended or restated, called the "LOAN AGREEMENT"), and is a
"TIER-A TERM NOTE" as defined therein, (b) is subject to the terms and
provisions of the Loan Agreement, which contains provisions for payments and
prepayments hereunder and acceleration of the maturity hereof upon the happening
of certain stated events, and (c) is secured by and entitled to the benefits of
certain Security Documents (as identified and defined in the Loan Agreement).
Payments on this Note shall be made and applied as provided herein and in the
Loan Agreement. Reference is hereby made to the Loan Agreement for a description
of certain rights, limitations of rights, obligations and duties of the parties
hereto and for the meanings assigned to terms used and not defined herein and to
the Security Documents for a description of the nature and extent of the
security thereby provided and the rights of the parties thereto.
The principal amount of this Note, together with all interest
accrued hereon, shall be due and payable in full on the Maturity Date. Interest
on this Note shall be due and payable
1
monthly as it accrues on each Monthly Payment Date, beginning November 1, 2002,
and continuing regularly thereafter until this Note has been paid in full.
If an Event of Default has occurred and is continuing, all
Obligations from time to time outstanding hereunder shall bear interest at the
Default Rate. Notwithstanding the foregoing provisions of this Note: (a) this
Note shall never bear interest in excess of the Highest Lawful Rate, and (b) if
at any time the rate at which interest is payable on this Note is limited by the
Highest Lawful Rate this Note shall bear interest at the Highest Lawful Rate and
shall continue to bear interest at the Highest Lawful Rate until such time as
the total amount of interest accrued hereon equals (but does not exceed) the
total amount of interest which would have accrued hereon had there been no
Highest Lawful Rate applicable hereto.
Notwithstanding the foregoing paragraph and all other
provisions of this Note, in no event shall the interest payable hereon, whether
before or after maturity, exceed the maximum amount of interest which, under
applicable Law, may be contracted for, charged, or received on this Note, and
this Note is expressly made subject to the provisions of the Loan Agreement
which more fully set out the limitations on how interest accrues hereon. In the
event applicable Law provides for an interest ceiling under Chapter 303 of the
Texas Finance Code (the "Texas Finance Code") as amended, for that day, the
ceiling shall be the "weekly ceiling" as defined in the Texas Finance Code and
shall be used in this Note for calculating the Highest Lawful Rate and for all
other purposes. The term "applicable Law" as used in this Note shall mean the
laws of the State of New York or the laws of the United States, whichever laws
allow the greater interest, as such laws now exist or may be changed or amended
or come into effect in the future.
If this Note is placed in the hands of an attorney for
collection after default, or if all or any part of the indebtedness represented
hereby is proved, established or collected in any court or in any bankruptcy,
receivership, debtor relief, probate or other court proceedings, each Borrower
and all endorsers, sureties and guarantors of this Note jointly and severally
agree to pay reasonable attorneys' fees and collection costs to the holder
hereof in addition to the principal and interest payable hereunder.
Each Borrower and all endorsers, sureties and guarantors of
this Note hereby severally waive demand, presentment, notice of demand and of
dishonor and nonpayment of this Note, protest, notice of protest, notice of
intention to accelerate the maturity of this Note, declaration or notice of
acceleration of the maturity of this Note, diligence in collecting, the bringing
of any suit against any party and any notice of or defense on account of any
extensions, renewals, partial payments or changes in any manner of or in this
Note or in any of its terms, provisions and covenants, or any releases or
substitutions of any security, or any delay, indulgence or other act of any
trustee or any holder hereof, whether before or after maturity.
2
This Note and the rights and duties of the parties hereto
shall be governed by the Laws of the State of New York (without regard to
principles of conflicts of law), except to the extent the same are governed by
applicable federal Law.
EOTT ENERGY OPERATING LIMITED
PARTNERSHIP,
as a Borrower and as the Borrower
Representative
By: EOTT ENERGY GENERAL PARTNER,
L.L.C., its General Partner
By:
---------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇
Title: Treasurer
EOTT ENERGY CANADA LIMITED
PARTNERSHIP,
as a Borrower
By: EOTT ENERGY GENERAL PARTNER,
L.L.C., its General Partner
By:
---------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇
Title: Treasurer
EOTT ENERGY LIQUIDS, L.P.,
as a Borrower
By: EOTT ENERGY GENERAL PARTNER,
L.L.C., its General Partner
By:
---------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇
Title: Treasurer
EOTT ENERGY PIPELINE LIMITED
PARTNERSHIP,
as a Borrower
By: EOTT ENERGY GENERAL PARTNER,
L.L.C., its General Partner
By:
---------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇
Title: Treasurer
EXHIBIT A-2
PROMISSORY NOTE
TIER-B TERM NOTE
$ New York, New York *[Date]
----------------
FOR VALUE RECEIVED, the undersigned, EOTT ENERGY OPERATING
LIMITED PARTNERSHIP, a Delaware limited partnership and a debtor and debtor in
possession, EOTT ENERGY CANADA LIMITED PARTNERSHIP, a Delaware limited
partnership and a debtor and debtor in possession, EOTT ENERGY LIQUIDS, L.P., a
Delaware limited partnership and a debtor and debtor in possession, EOTT ENERGY
PIPELINE LIMITED PARTNERSHIP, a Delaware limited partnership and a debtor and
debtor in possession (herein collectively called "BORROWERS"), hereby jointly
and severally promise to pay to the order of
________________________________________________, a *[____________ ] (herein
called "TERM LENDER"), the principal sum of
________________________________________________________________ Dollars ($
__________), together with interest on the unpaid principal balance thereof at
the rate of ten percent (10%) per annum, calculated on the basis of a 360 day
year and the actual number of days elapsed. Both principal and interest shall be
payable as herein provided in lawful money of the United States of America by
payment to the Collateral Agent to be applied as set forth in the Intercreditor
Agreement.
This Note (a) is issued and delivered under that certain
Debtor In Possession
Term Loan Agreement of even date herewith among Borrowers,
EOTT Energy Partners, L.P. and EOTT Energy General Partner, L.L.C., as
guarantors, ▇▇▇▇▇▇ Brothers, Inc., as Term Loan Agent, and the term lenders
(including Term Lender) referred to therein (herein, as from time to time
supplemented, amended or restated, called the "LOAN AGREEMENT"), and is a
"TIER-B TERM NOTE" as defined therein, (b) is subject to the terms and
provisions of the Loan Agreement, which contains provisions for payments and
prepayments hereunder and acceleration of the maturity hereof upon the happening
of certain stated events, and (c) is secured by and entitled to the benefits of
certain Security Documents (as identified and defined in the Loan Agreement).
Payments on this Note shall be made and applied as provided herein and in the
Loan Agreement. Reference is hereby made to the Loan Agreement for a description
of certain rights, limitations of rights, obligations and duties of the parties
hereto and for the meanings assigned to terms used and not defined herein and to
the Security Documents for a description of the nature and extent of the
security thereby provided and the rights of the parties thereto.
The principal amount of this Note, together with all interest
accrued hereon, shall be due and payable in full on the Maturity Date. Interest
on this Note shall be due and payable monthly as it accrues on each Monthly
Payment Date, beginning November 1, 2002, and continuing regularly thereafter
until this Note has been paid in full.
1
If an Event of Default has occurred and is continuing, all
Obligations from time to time outstanding hereunder shall bear interest at the
Default Rate. Notwithstanding the foregoing provisions of this Note: (a) this
Note shall never bear interest in excess of the Highest Lawful Rate, and (b) if
at any time the rate at which interest is payable on this Note is limited by the
Highest Lawful Rate this Note shall bear interest at the Highest Lawful Rate and
shall continue to bear interest at the Highest Lawful Rate until such time as
the total amount of interest accrued hereon equals (but does not exceed) the
total amount of interest which would have accrued hereon had there been no
Highest Lawful Rate applicable hereto.
Notwithstanding the foregoing paragraph and all other
provisions of this Note, in no event shall the interest payable hereon, whether
before or after maturity, exceed the maximum amount of interest which, under
applicable Law, may be contracted for, charged, or received on this Note, and
this Note is expressly made subject to the provisions of the Loan Agreement
which more fully set out the limitations on how interest accrues hereon. In the
event applicable Law provides for an interest ceiling under Chapter 303 of the
Texas Finance Code (the "Texas Finance Code") as amended, for that day, the
ceiling shall be the "weekly ceiling" as defined in the Texas Finance Code and
shall be used in this Note for calculating the Highest Lawful Rate and for all
other purposes. The term "applicable Law" as used in this Note shall mean the
laws of the State of New York or the laws of the United States, whichever laws
allow the greater interest, as such laws now exist or may be changed or amended
or come into effect in the future.
If this Note is placed in the hands of an attorney for
collection after default, or if all or any part of the indebtedness represented
hereby is proved, established or collected in any court or in any bankruptcy,
receivership, debtor relief, probate or other court proceedings, each Borrower
and all endorsers, sureties and guarantors of this Note jointly and severally
agree to pay reasonable attorneys' fees and collection costs to the holder
hereof in addition to the principal and interest payable hereunder.
Each Borrower and all endorsers, sureties and guarantors of
this Note hereby severally waive demand, presentment, notice of demand and of
dishonor and nonpayment of this Note, protest, notice of protest, notice of
intention to accelerate the maturity of this Note, declaration or notice of
acceleration of the maturity of this Note, diligence in collecting, the bringing
of any suit against any party and any notice of or defense on account of any
extensions, renewals, partial payments or changes in any manner of or in this
Note or in any of its terms, provisions and covenants, or any releases or
substitutions of any security, or any delay, indulgence or other act of any
trustee or any holder hereof, whether before or after maturity.
2
This Note and the rights and duties of the parties hereto shall be
governed by the Laws of the State of New York (without regard to principles of
conflicts of law), except to the extent the same are governed by applicable
federal Law.
EOTT ENERGY OPERATING LIMITED
PARTNERSHIP,
as a Borrower and as the Borrower
Representative
By: EOTT ENERGY GENERAL PARTNER,
L.L.C., its General Partner
By:
---------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇
Title: Treasurer
EOTT ENERGY CANADA LIMITED
PARTNERSHIP,
as a Borrower
By: EOTT ENERGY GENERAL PARTNER,
L.L.C., its General Partner
By:
---------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇
Title: Treasurer
EOTT ENERGY LIQUIDS, L.P.,
as a Borrower
By: EOTT ENERGY GENERAL PARTNER,
L.L.C., its General Partner
By:
---------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇
Title: Treasurer
EOTT ENERGY PIPELINE LIMITED
PARTNERSHIP,
as a Borrower
By: EOTT ENERGY GENERAL PARTNER,
L.L.C., its General Partner
By:
---------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇
Title: Treasurer
EXHIBIT B
BORROWING NOTICE
Reference is made to that certain Debtor In Possession
Term Loan
Agreement dated as of October 18, 2002 (as from time to time amended, the
"AGREEMENT"), by and among EOTT ENERGY OPERATING LIMITED PARTNERSHIP, a Delaware
limited partnership and a debtor and debtor in possession, EOTT ENERGY CANADA
LIMITED PARTNERSHIP, a Delaware limited partnership and a debtor and debtor in
possession, EOTT ENERGY LIQUIDS, L.P., a Delaware limited partnership and a
debtor and debtor in possession, EOTT ENERGY PIPELINE LIMITED PARTNERSHIP, a
Delaware limited partnership and a debtor and debtor in possession
(collectively, "BORROWERS"), EOTT Energy Partners, L.P. and EOTT Energy General
Partner, L.L.C., as guarantors, ▇▇▇▇▇▇ Brothers, Inc., as Term Lender Agent, and
the term lenders from time to time party thereto ("TERM LENDERS"). Terms which
are defined in the Agreement are used herein with the meanings given them in the
Agreement. Pursuant to the terms of the Agreement the Borrower Representative,
on behalf of the Borrowers, hereby requests the Term Loans to be advanced
pursuant to Section 2(b) of the Agreement on October __, 2002.
To induce Term Lenders to make the Term Loans, Borrowers hereby
represent, warrant, acknowledge, and agree to and with Term Lender Agent and
each Term Lender that:
(a) The officer of the Borrower Representative signing this
instrument is the duly elected, qualified and acting officer of the
Borrower Representative as indicated below such officer's signature
hereto having all necessary authority to act for the Borrower
Representative in making the request herein contained.
(b) The representations and warranties of Borrowers set forth
in the Agreement and the other Credit Documents are true and correct on
and as of the date hereof (except to the extent that the facts on which
such representations and warranties are based have been changed by the
Extension of Credit under the Agreement), with the same effect as
though such representations and warranties had been made on and as of
the date hereof.
(c) There does not exist on the date hereof any condition or
event which constitutes a Default or Event of Default; nor will any
such Default or Event of Default exist upon Borrowers' receipt and
application of the Term Loans. Borrowers will use the Term Loans in
compliance with Section 2(d) of the Agreement.
(d) Borrowers have performed and complied with all agreements
and conditions in the Agreement required to be performed or complied
with by Borrowers on
or prior to the date hereof, and each of the conditions precedent to
the Extension of Credit contained in the Agreement remains satisfied.
(e) The Credit Documents have not been modified, amended or
supplemented by any unwritten representations or promises, by any
course of dealing, or by any other means not provided for in Section
17(n) of the Agreement. The Agreement and the other Credit Documents
are hereby ratified, approved, and confirmed in all respects.
The officer of Borrower Representative signing this instrument hereby
certifies that, to the best of his knowledge after due inquiry, the above
representations, warranties, acknowledgments, and agreements of Borrowers are
true, correct and complete.
IN WITNESS WHEREOF, this instrument is executed as of October 17, 2002.
EOTT ENERGY OPERATING LIMITED
PARTNERSHIP
As the Borrower Representative
By: EOTT ENERGY GENERAL PARTNER,
L.L.C., its General Partner
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇
----------------------------
▇▇▇▇▇ ▇▇▇▇▇
Treasurer
EXHIBIT C
CERTIFICATE ACCOMPANYING FINANCIAL STATEMENTS
(Included as part of Exhibit 10.4)
EXHIBIT D
CASH FLOW REPORT
(Included as part of Exhibit 10.4)
EXHIBIT E
ENVIRONMENTAL COMPLIANCE CERTIFICATE
(Included as part of Exhibit 10.4)
EXHIBIT F
OPEN POSITION REPORT
(Included as part of Exhibit 10.4)
EXHIBIT G
CASH BUDGET
(Included as part of Exhibit 10.4)
EXHIBIT H
CRITICAL VENDOR ORDER
(Included as part of Exhibit 10.4)
EXHIBIT I
WEEKLY COMPLIANCE CERTIFICATE
(Included as part of Exhibit 10.4)
EXHIBIT J
SECOND INTERIM ORDER
(Included as part of Exhibit 10.4)
EXHIBIT K
LEASE VOLUME REPORT
(Included as part of Exhibit 10.4)