EXHIBIT 10.31
* Certain portions of this exhibit have been omitted pursuant to a request for
confidential treatment which has been filed separately with the SEC.
================================================================================
SECOND AMENDED AND RESTATED REIMBURSEMENT, LOAN AND SECURITY
AGREEMENT
$300,000,000 Letter of Credit and Revolving Credit Facility
-------------------------------------------------------
EOTT ENERGY OPERATING LIMITED PARTNERSHIP,
EOTT ENERGY CANADA LIMITED PARTNERSHIP,
EOTT ENERGY LIQUIDS, L.P.,
EOTT ENERGY PIPELINE LIMITED PARTNERSHIP,
jointly and severally as Borrower,
EOTT ENERGY PARTNERS, L.P.
and
EOTT ENERGY GENERAL PARTNER, L.L.C.
as Guarantors,
EOTT ENERGY CORP.,
as an Original Credit Party,
STANDARD CHARTERED BANK,
as the Administrative Agent and L/C Issuer,
and
THE LENDERS PARTY HERETO
-------------------------------------------------------
April 23, 2002
================================================================================
TABLE OF CONTENTS
1. DEFINITIONS.............................................................4
2. THE LOANS AND LETTERS OF CREDIT........................................32
3. PAYMENTS TO LENDERS....................................................43
4. GRANT OF SECURITY INTEREST.............................................48
5. AUTHORIZATION TO FILE FINANCING STATEMENTS.............................50
6. OTHER ACTIONS OF CREDIT PARTIES........................................50
7. REPRESENTATIONS AND WARRANTIES.........................................51
8. AFFIRMATIVE COVENANTS..................................................58
9. NEGATIVE COVENANTS.....................................................68
10. EVENTS OF DEFAULT......................................................73
11. RIGHTS AND REMEDIES....................................................76
12. GUARANTY...............................................................77
13. ADMINISTRATIVE AGENT...................................................79
14. ASSIGNMENTS AND PARTICIPATIONS.........................................83
15. INDEMNIFICATION........................................................85
16. MISCELLANEOUS..........................................................86
Schedules and Exhibits:
Schedule I - L/C Agreement Letters of Credit
Schedule II - Cash Collateralized Letters of Credit
Schedule III - Original EOTT OLP Reimbursement Agreement Letters of Credit
Schedule IV - Existing Letters of Credit
Schedule V - Disclosure Schedule
Schedule VI - Lender Schedule
Schedule VII - Security Schedule
Exhibit A - Form of Note
Exhibit B - Borrowing Notice
Exhibit C - Continuation/Conversion Notice
Exhibit D - Letter of Credit Request
Exhibit E - Certificate Accompanying Financial Statements
Exhibit F - Borrowing Base Report
Exhibit G - Cash Flow Report
Exhibit H - Environmental Compliance Certificate
Exhibit I - Open Position Report
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TABLE OF DELETED SECTIONS
Schedule I - L/C Agreement Letters of Credit
62 lines
Schedule II - Cash Collateralized Letters of Credit
6 lines
Schedule III - Original OLP Reimbursement Agreement Letters of Credit
126 lines
Schedule IV - Existing Letters of Credit
7 pages omitted
Schedule V - Disclosure Schedule
Section 7(d) - 133 lines
Section 7(h) - 1 line
Section 7(i) - 6 lines
Section 7(j) - 24 lines
Section 7(k) - 140 lines
Section 7(l) - 128 lines
Section 7(t) - 38 lines
Section 7(x)(2) - 2 lines
Section 7(x)(7) - 2 lines
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SECOND AMENDED AND RESTATED
REIMBURSEMENT, LOAN AND SECURITY AGREEMENT
SECOND AMENDED AND RESTATED
REIMBURSEMENT, LOAN AND SECURITY AGREEMENT,
dated as of April 23, 2002 (as amended, supplemented or otherwise modified from
time to time, and including all Schedules and Exhibits attached hereto, this
"AGREEMENT"), among EOTT ENERGY OPERATING LIMITED PARTNERSHIP, a Delaware
limited partnership ("EOTT OLP"), EOTT ENERGY CANADA LIMITED PARTNERSHIP, a
Delaware limited partnership ("EOTT CANADA"), EOTT ENERGY LIQUIDS, L.P., a
Delaware limited partnership ("EOTT LIQUIDS"), EOTT ENERGY PIPELINE LIMITED
PARTNERSHIP, a Delaware limited partnership ("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, "BORROWER"), EOTT ENERGY PARTNERS, L.P., a Delaware
limited partnership ("EOTT MLP"), EOTT ENERGY GENERAL PARTNER, L.L.C. a Delaware
limited liability company ("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 "CREDIT PARTY" and collectively, "CREDIT
PARTIES"), EOTT ENERGY CORP., a Delaware corporation ("EOTT CORP." and together
with the Credit Parties, the "ORIGINAL CREDIT PARTIES"), each of the banks or
other lending institutions which is a party hereto (as evidenced by the
signature pages of this Agreement) or which may from time to time become a party
hereto or any successor or assignee thereof (each a "LENDER" and collectively,
the "LENDERS") and STANDARD CHARTERED BANK, a banking institution organized and
existing under the laws of England and Wales, as administrative agent for the
Lenders (in such capacity, the "ADMINISTRATIVE AGENT" and in its individual
capacity, "STANDARD CHARTERED"), and as L/C Issuer hereunder.
WHEREAS, pursuant to and upon the terms and conditions set forth in
that certain Master Letter of Credit and Reimbursement Agreement dated as of
August 31, 1995 (as amended, supplemented or modified from time to time, the
"L/C AGREEMENT") between Enron and Standard Chartered, at Enron's request,
Standard Chartered issued letters of credit for Enron as account party, but with
a statement to the effect that such letters of credit were issued for the
account of EOTT OLP, which letters of credit are identified on Schedule I hereto
(the "L/C AGREEMENT LETTERS OF CREDIT");
WHEREAS, Standard Chartered, at the request of Enron, as account party,
has heretofore (but after the issuance of the L/C Agreement Letters of Credit)
issued certain letters of credit identified on Schedule II hereto, which were
cash collateralized by Enron to secure its reimbursement obligations with
respect thereto (the "CASH COLLATERALIZED LETTERS OF CREDIT");
WHEREAS, EOTT OLP has previously requested that Standard Chartered (i)
add EOTT OLP as a "co-applicant" for the L/C Agreement Letters of Credit and the
Cash Collateralized Letters of Credit and (ii) permit EOTT OLP to request and
apply for, as sole account party, additional letters of credit under the L/C
Agreement, without the joinder of Enron in such request and application and
thereupon to become (A) jointly and severally liable with Enron to Standard
Chartered with regard to all such letters of credit and Cash Collateralized
Letters of Credit and
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all reimbursement obligations thereunder and (B) individually and solely liable
to Standard Chartered with regard to all such letters of credit and all
reimbursement obligations thereunder, and Standard Chartered was willing to
accept such request on the terms and conditions set forth in a Reimbursement and
Security Agreement dated as of November 30, 2001 between EOTT OLP and Standard
Chartered, for itself and for its Affiliates, including without limitation
Standard Chartered Trade Services Corporation (the "ORIGINAL EOTT OLP
REIMBURSEMENT AGREEMENT");
WHEREAS, EOTT OLP and Standard Chartered Trade Services Corporation
("SCTSC") are parties to a (i) Receivable(s) Purchase Agreement made as of
October 19, 1999 (as amended, supplemented or modified from time to time, the
"RECEIVABLES AGREEMENT") and (ii) a Commodity Repurchase Agreement dated as of
February 1998 (as amended, supplemented or modified from time to time, the
"CRUDE OIL REPO AGREEMENT" and, together with the Receivables Agreement, the
"SCTSC AGREEMENTS");
WHEREAS, in order to induce Standard Chartered to extend credit and
other financial accommodations to EOTT OLP on the terms and conditions set forth
in the Loan Documents (as defined in the Original EOTT OLP Reimbursement
Agreement) and in consideration therefor and for the benefits conferred upon
EOTT OLP under the Original EOTT OLP Reimbursement Agreement, pursuant to the
terms of the Original EOTT OLP Reimbursement Agreement, EOTT OLP granted to
Standard Chartered , for itself and for SCTSC a first, prior and perfected lien
on, and security interest in, the Collateral (as defined in the Original EOTT
OLP Reimbursement Agreement) to secure the Obligations (as defined in the
Original EOTT OLP Reimbursement Agreement and the obligations of EOTT OLP to
SCTSC under the SCTSC Agreements;
WHEREAS, pursuant to the Original EOTT OLP Reimbursement Agreement, on
or about November 30, 2001 Standard Chartered issued additional letters of
credit for Borrower's account as account party, all of which are identified on
Schedule III hereto (the "ORIGINAL EOTT OLP REIMBURSEMENT AGREEMENT LETTERS OF
CREDIT");
WHEREAS, pursuant to an Amended and Restated
Reimbursement, Loan and
Security Agreement dated as of December 21, 2001 by and among Standard
Chartered, for itself and its Affiliates, including without limitation, SCTSC,
and the Original Credit Parties (the "EXISTING AGREEMENT"), Standard Chartered
and the Original Credit Parties amended and restated the Original EOTT OLP
Reimbursement Agreement in its entirety, and Standard Chartered agreed to
consider, in the exercise of its sole discretion, requests from EOTT OLP for the
issuance of additional letters of credit and for working capital loans, payable
on demand; and in the event any such requests were granted, such letters of
credit would be issued and such loans would be made pursuant to the terms of the
Existing Agreement;
WHEREAS, pursuant to the Existing Agreement, Standard Chartered has
issued, and, at the date hereof, there are currently unexpired and undrawn, the
letters of credit identified on Schedule IV hereto (the "EXISTING LETTERS OF
CREDIT"), and such Existing Letters of Credit comprise all of the letters of
credit currently unexpired and undrawn that Standard Chartered has issued for
the account of EOTT OLP;
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WHEREAS, pursuant to the Existing Agreement, Standard Chartered has
made loans to Borrower aggregating $21,600,000 in unpaid principal amount at the
date hereof (the "EXISTING LOANS");
WHEREAS, Borrower has requested that Standard Chartered enter into this
Agreement to amend and restate the Existing Agreement in its entirety, pursuant
to which amendment and restatement the Lenders would extend to Borrower a
revolving credit facility (the "REVOLVING CREDIT FACILITY") not to exceed at any
one time outstanding $300,000,000 (as that amount may be reduced or terminated
pursuant to this Agreement and subject to availability under the Borrowing Base)
to be made available in the form of letters of credit issued from time to time
by the L/C Issuer at the request and for the account of Borrower and used by
Borrower as provided in Section 2(e)(ii), in which Letters of Credit and
Borrower's reimbursement obligations thereunder the Lenders would participate;
WHEREAS, Borrower has further requested that up to $40,000,000 of the
Revolving Credit Facility be made available as revolving credit loans to be
funded by the Lenders from time to time and used by Borrower as provided in
Section 2(e)(i);
WHEREAS, each of the Guarantors has derived and will derive substantial
direct and indirect benefit from (i) the issuance of the Existing Letters of
Credit, the continuance thereof as Letters of Credit hereunder, any extensions
or replacements thereof and any future Letters of Credit that may be issued
hereunder, including any future extension or replacements thereof, (ii) the
facilities made available by SCTSC to EOTT OLP under the SCTSC Agreements and
(iii) the loans made under the Existing Agreement, the continuance thereof as
Loans hereunder and the extension of the Revolving Credit Facility;
WHEREAS, the Guarantors are willing to guarantee the reimbursement and
other obligations of Borrower hereunder and otherwise with respect to all
Letters of Credit, all Loans and all obligations of Borrower under the SCTSC
Agreements;
WHEREAS, the Lenders are willing to extend the requested revolving
credit loans and to participate in the Letters of Credit and Borrower's
reimbursement obligations thereunder, and the L/C Issuer is willing to issue
Letters of Credit, in each case, on the terms and conditions of this Agreement;
WHEREAS, the Original Credit Parties, the Administrative Agent, the L/C
Issuer and the Lenders wish to amend and restate the Existing Agreement in its
entirety as herein provided; and
WHEREAS, concurrently with the Closing Date, (i) the Obligations under
the Existing Agreement will be renewed and extended in full, as amended and
restated pursuant to this Agreement; (ii) the Existing Letters of Credit will be
deemed to be issued and outstanding Letters of Credit hereunder; and (iii) the
Existing Loans will be deemed to be outstanding Loans hereunder, as evidenced by
the Notes and as amended, renewed and extended pursuant hereto.
NOW, THEREFORE, the parties hereto agree that Existing Agreement shall
be and hereby is amended and restated in its entirety as follows:
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1. DEFINITIONS. 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:
"ACCEPTABLE ISSUER" means any national or state bank or trust company
which is organized under the laws of the United States of America or
any state thereof, or any branch licensed to operate under the laws of
the United States of America or any state thereof which is a branch of
a bank organized under any country which is a member of the
Organization for Economic Cooperation and Development, in each case
which has capital, surplus and undivided profits of at least
$500,000,000 and whose commercial paper is rated at least P-1 by
Moody's or A-1 by S&P.
"ACCOUNT" has the meaning given that term in the UCC.
"ACCOUNT DEBTOR" means any Person who is or who may become obligated
under, with respect to, or on account of, an Account.
"ADDITIONAL GUARANTOR" has the meaning set forth in Section 11(b).
"ADDITIONAL L/C USAGE FEE" means a fee payable by Borrower to the
Administrative Agent for the account of the Lenders on the first day of
each month commencing April 1, 2002 through March 1, 2003 set forth
below based on the Applicable L/C Usage Level in effect as of the date
of determination.
APPLICABLE L/C USAGE LEVEL ADDITIONAL L/C USAGE FEE
-------------------------- ------------------------
Level I $208,333
Level II $125,000
Level III $ 72,917
Level IV $ 31,250
Level V $ 0
"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.
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"ALTERNATE BASE RATE" means the sum of (i) the higher of (A) the
variable per annum rate of interest so designated from time to time by
the Administrative Agent as its "base rate" and (B) the Federal Funds
Rate, plus one-half percent (0.5%) per annum, plus (ii) three percent
(3.0 %) per annum. The "base rate" is a reference rate and does not
necessarily represent the lowest or best rate being charged to any
customer of the Administrative Agent. Changes in the Alternative Base
Rate resulting from changes in the "base rate" shall take place
immediately without notice or demand of any kind.
"ALTERNATIVE BASE RATE LOAN" means a Loan that bears interest based
upon the Alternative Base Rate.
"APPLICABLE LENDING OFFICE" means, with respect to each Lender, such
Lender's Domestic Lending Office in the case of Alternative Base Rate
Loans and such Lender's LIBOR Lending Office in the case of LIBOR
Loans.
"APPLICABLE L/C USAGE LEVEL" means the level set forth below that
corresponds to the Maximum Outstanding L/C Amount at the date of
determination:
APPLICABLE L/C USAGE LEVEL MAXIMUM OUTSTANDING L/C AMOUNT
-------------------------- ------------------------------
Level I Greater than $250,000,000
Level II Greater than or equal to $200,000,000 but less
than $250,000,000
Level III Greater than or equal to $175,000,000 but less
than $200,000,000
Level IV Greater than or equal to $150,000,000 but less
than $175,000,000
Level V Less than $150,000,000
The Applicable L/C Usage Level shall be determined on the first day of
each month commencing April 1, 2002 through March 1, 2003 based upon
the Maximum Outstanding L/C Amount for the immediately preceding month.
"APPRAISED VALUE OF ELIGIBLE FIXED ASSETS" means the value of Eligible
Fixed Assets as calculated by an independent appraiser selected by the
Administrative Agent. At the Closing Date, the aggregate Appraised
Value of Eligible Fixed Assets (i.e., those assets which are
specifically identified as "Eligible Fixed Assets" in the definition
thereof) will be $137,500,000.
"AVERAGE DAILY MAXIMUM DRAWING AMOUNT" means, for any Letter of Credit
for any month, the quotient of (i) the sum of the Maximum Drawing
Amount for such Letter of Credit as it exists at 5:00 p.m., New York
time, for each day of such month divided by (ii) the total number of
days in such month.
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"BENEFICIARY" means any beneficiary identified in any letter of credit
issued hereunder.
"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 expenses for appraisals
conducted in order to calculate the Appraised Value of Eligible Fixed
Assets, 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. Notwithstanding the
foregoing, Borrower Expenses shall not include Lender Expenses.
"BORROWER PARTY" means any of the Additional Obligors or EOTT OLP.
"BORROWER REPRESENTATIVE" means, for purposes of making Letter of
Credit Requests to the Administrative Agent, requesting loans under the
Notes, receiving Letters of Credit from the L/C Issuer, and otherwise
communicating with the Administrative Agent on behalf of Borrower, and
taking any action required under this Agreement on behalf of Borrower
(and all of the Borrower Parties shall be bound thereby), including
consent to and any modifications, amendments or supplements to this
Agreement or related documents, EOTT OLP.
"BORROWING" means a borrowing of new Loans of a single Type pursuant to
Section 2(b) or a Continuation or Conversion of all or a portion of an
existing Loan into a single Type (and, in the case of LIBOR Loans, with
the same Interest Period) pursuant to Section 2(c).
"BORROWING BASE" means the remainder of (i), minus (ii) below as of the
date of determination (without duplication):
(i) the sum of the following as of the date of determination:
(A) 100% of Eligible Cash Equivalents; plus
(B) 90% of Tier I Eligible Receivables; plus
(C) 80% of Tier II Eligible Receivables; plus
(D) 85% of Tier I Eligible Crude/Product/Liquid Deliveries; plus
(E) 80% of Tier II Eligible Crude/Product/Liquid Deliveries; plus
(F) 70% of the Appraised Value of Eligible Fixed Assets, but in no
event to exceed $70,000,000; plus
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(G) 90% of NYMEX Hedged Eligible Inventory; plus
(H) 80% of Other Hedged Eligible Inventory; plus
(I) 75% of the Market Value of Unhedged Eligible Inventory; plus
(J) 80% of Eligible Margin Deposits; plus
(K) 80% of all Undrawn Product Purchase Letters of Credit;
(ii) minus the following as of the date of determination:
(A) 100% of First Purchase Crude Payables; plus
(B) 100% of Other Priority Claims; plus
(C) 110% of the aggregate net amounts payable by each Borrower
Party under all Hedging Contracts to which it is a party; plus
(D) The amount of any setoff or contra account to any Eligible
Receivable that could arise from an obligation of any Borrower
Party to sell or purchase crude oil in any future month to the
extent not otherwise reflected as a reduction of Eligible
Receivables, such amount to be determined on an early
termination or ▇▇▇▇ to market basis;
provided, however, the percentage amounts set forth above (the "ADVANCE
RATES") and requirements for eligibility (with its correlative meaning
in the context of applicable defined terms herein, "ELIGIBLE") may be
changed at any time and from time to time upon written notice to the
Borrower Representative from the Administrative Agent setting forth the
Advance Rates that are Currently Approved by the Administrative Agent.
"BORROWING NOTICE" means a written or telephonic request or a written
confirmation made by the Borrower Representative that meets the
requirements of Section 2(b).
"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. Any Business
Day in any way relating to LIBOR Loans (such as the day on which an
Interest Period begins or ends) must also be a day on which commercial
banks settle payments in London.
"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) during
such period and which, in accordance with GAAP, are classified as
capital expenditures.
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"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.
"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 Lender 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 Moody's 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) any Lender or (B) any other
commercial bank meeting the specifications of subsection (ii)
above;
(iv) commercial paper, other than commercial paper issued by any
Credit Party or its Affiliates, maturing within 180 days after
acquisition thereof and having a rating of at least P-1 by
Moody's 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 cash flows for
the current month, on an actual (historical) and projected (forecast)
basis, substantially in the form of Exhibit G hereto.
"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) such Persons who are independent members of the EOTT Corp. Board of
Directors (within the meaning of paragraph 303.01 of the New York Stock
Exchange Listed Company Manual, as such standard may hereafter be
amended by the New York Stock Exchange), cease for any reason to
constitute collectively a numerical majority of the EOTT Corp. Board of
Directors then in office, and if such Persons do not constitute a
numerical majority of the
8
EOTT Corp. Board of Directors at the time of determination, pursuant to
the terms of EOTT Corp.'s certificate of incorporation or bylaws as in
effect at such time, such Persons fail to constitute a majority of such
board necessary to authorize any action required to be authorized by
such board at such time, (ii) such Persons who are at the Closing Date,
Named Executive Officers of EOTT Corp. cease for any reason not
reasonably acceptable to the Administrative Agent to constitute
collectively a majority of the Named Executive Officers of EOTT Corp.
then serving (unless any such officer shall have ceased to serve as a
result of death, disability, termination for cause as determined by the
EOTT Corp. Board of Directors or other reason Currently Approved by the
Administrative Agent), (iii) Enron, either directly or through a Wholly
Owned Subsidiary of Enron, shall cease to be the legal and beneficial
owner (as defined above) of 100% of the voting power of the outstanding
voting stock of EOTT Corp., (iv) 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 or (v) EOTT MLP shall cease to be the sole legal and beneficial
owner (as defined above) of all of the general and limited partner
interests (including all securities that are convertible into general
and limited partner interests) of each Credit Party (excluding EOTT
MLP).
"CLOSING DATE" means the date agreed to by the Borrower Representative
and the Administrative Agent for the initial Extensions of Credit under
this Agreement, which must be a Business Day occurring no later than May
31, 2002, but not before all of the conditions precedent in this
Agreement for such Extension of Credit have been satisfied.
"CODE" means the Internal Revenue Code of 1986, as amended from time to
time, together with all rules and regulations promulgated with respect
thereto.
"COLLATERAL" shall mean and include all of the assets, properties and
rights of each Credit Party whether now or hereafter existing or now
owned or hereafter acquired and wherever located, of every kind and
description, tangible or intangible, real, personal or mixed, including
but not limited to: all assets included in Property, Plant and Equipment
as reflected in the Initial Financial Statements, fixtures, goods
(including inventory, equipment and any accessions thereto), instruments
(including promissory notes), documents, documents of title (as such
term is defined in the Alberta Personal Property Security Act), accounts
(including health-care-insurance receivables), chattel paper (whether
tangible or electronic), deposit accounts, money (as such term is
defined in the Alberta Personal Property Security Act), letter-of-credit
rights (whether or not the letter of credit is evidenced by a writing),
commercial tort claims, securities and all other investment property
(including without limitation, (i), in the case of EOTT MLP, its entire
limited partner interest in EOTT OLP and its entire membership interest
in EOTT GP; (ii) in the case of EOTT OLP, its entire limited partner
interest in each of EOTT Canada, EOTT Liquids and EOTT Pipeline; and
(iii) in the case of EOTT GP, its entire general partner interest in
each of EOTT OLP, EOTT Canada, EOTT Liquids and EOTT Pipeline), general
intangibles, payment intangibles, software, tax refund claims and
supporting obligations. If any Credit Party shall at any time acquire a
commercial tort claim which such Credit Party reasonably believes based
upon then-current information
9
is likely to result in a judgment in favor of such Credit Party in
excess of $25,000, such Credit Party shall promptly notify the
Administrative Agent in a writing signed by such Credit Party of the
brief details thereof and grant to the Lenders in such writing a
security interest therein and in the proceeds thereof, all upon the
terms of this Agreement, with such writing to be in form and substance
reasonably satisfactory to the Administrative Agent. Each Credit Party
hereby confirms the grant of a security interest in the Collateral
pursuant to this Agreement and each Credit Party hereby grants and
re-grants a security interest in the Collateral, as security for the
Obligations, together with the products and accessions of and to any
thereof, and all books and records pertaining to all of the foregoing.
The term "Collateral" shall exclude any property or asset (i) with
respect to which there exists, by contract or by applicable law, a
prohibition on transferring, assigning, pledging, or mortgaging such
property or asset or an obligation to obtain from a Person who is not an
Affiliate of the Credit Parties such Person's consent to or approval of
a transfer, assignment, pledge or mortgage of such property or asset;
(ii) which has been transferred or conveyed (other than for collateral
security purposes only) by a Credit Party prior to the date hereof; and
(iii) all catalysts and resins used for processing or treating,
including any precious metals contained therein.
"COMMITMENT FEE RATE" means one-half percent (0.5%) per annum.
"COMMITMENT PERIOD" means the period from and including the Closing Date
until the earlier of (i) February 28, 2003, (ii) the day on which the
obligations of the Lenders to make Loans hereunder have terminated,
(iii) the day on which the obligations of the L/C Issuer to issue
Letters of Credit hereunder have terminated and (iv) the day on which
the Notes first becomes due and payable in full, whichever shall first
occur).
"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.
"CONSOLIDATED EBITDA" means, for any period, the sum of (i) Consolidated
Net Income (Loss) during such period, plus (ii) all income taxes
(including any franchise taxes to the extent based upon net income) that
were deducted in determining such Consolidated Net Income (Loss), plus
(iii) all interest expense that was deducted in determining Consolidated
Net Income (Loss) for such period, plus (iv) all depreciation,
amortization (including amortization of good will and debt issue costs)
and other non-cash charges (excluding any non-cash charge to the extent
it represents an accrual of, or reserve for, cash disbursement for any
of the next succeeding four Fiscal Quarters) that were deducted in
determining such Consolidated Net Income (Loss), minus (v) all non-cash
items of income that were included in determining such Consolidated Net
Income (Loss) (excluding any non-cash item to the extent it represents
an accrual for cash receipt in any of the next succeeding four Fiscal
Quarters).
"CONSOLIDATED NET INCOME (LOSS)" means, for any period, EOTT MLP's
Consolidated gross revenues for such period, including any cash
dividends or distributions actually
10
received from any other Person during such period, minus EOTT MLP's
Consolidated expenses and other proper charges against income (including
taxes on income to the extent imposed), determined on a Consolidated
basis after eliminating earnings or losses attributable to outstanding
minority interests and excluding the net earnings of any Person other
than a Subsidiary in which EOTT MLP or any of its Subsidiaries has an
ownership interest. Consolidated Net Income (Loss) shall not include (i)
any gain or loss from the sale of assets that is not sold or otherwise
disposed of in the ordinary course of business; (ii) any extraordinary
gains or losses; (iii) any gain or loss from the increase or decrease of
the carrying value of assets recorded in accordance with GAAP; or (iv)
the cumulative effect of a change in accounting principles.
"CONSOLIDATED NET WORTH" means, at the time of determination thereof,
all amounts which, in conformity with GAAP, would be included in total
partners' capital (understood to include Additional Partnership
Interests) on a Consolidated balance sheet of EOTT MLP and its
Subsidiaries plus the aggregate amount of non-cash asset impairment
charges incurred since January 31, 2001.
"CONTINUATION/CONVERSION NOTICE" means a written or telephonic request
or a written confirmation made by the Borrower Representative that meets
the requirements of Section 2(c).
"CONTINUE," "CONTINUATION" and "CONTINUED" means the continuation
pursuant to Section 2(c) of a LIBOR Loan as a LIBOR Loan from one
Interest Period to the next Interest Period.
"CONVERT," "CONVERSION" and "CONVERTED" means a conversion pursuant to
Section 2(c) or Section 3 of one Type of Loan into another Type of Loan.
"CREDIT DOCUMENTS" means, collectively (i) the SCTSC Agreements and each
and every other agreement, document, certificate or instrument between
SCTSC and any Credit Party or otherwise made, executed or delivered by
any Credit Party for the benefit of SCTSC, (ii) this Agreement, the
Notes, the Letters of Credit, the Letter of Credit Requests and each and
every other agreement, document, certificate or instrument between any
Lender Party, and any Credit Party or otherwise for the benefit of any
Lender Party that is entered into or delivered at or after the date
hereof, and (iii) any mortgage, deed of trust, fixture filing, account
control agreement or other security agreement heretofore or hereafter
executed by any Credit Party in favor of any Lender Party pursuant
hereto or otherwise to secure the Obligations, including, without
limitation, the Bank Agency and Control Agreement dated December 21,
2001 among EOTT OLP, EOTT Liquids, EOTT Pipeline, Standard Chartered and
Southwest Bank of Texas, N.A.
"CREDIT PARTY" has the meaning set forth in the Preamble.
"CURRENTLY APPROVED BY THE ADMINISTRATIVE AGENT" means such Person
(including a limit on the maximum credit exposure to any such Person),
storage location, pipeline, form of letter of credit, event, action,
policy, or other matter, as the case may be, as
11
reflected in the most recent written notice given by the Administrative
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.
"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, at the time in question in respect of any
principal of any Loan, any Matured L/C Obligation or any other amount
payable by Borrower under this Agreement or any other Credit Document
that is not paid when due (whether at stated maturity, by acceleration
or otherwise), a rate per annum during the period commencing on the due
date until such amount is paid in full equal to the sum of two percent
(2%), plus the Alternative Base Rate as in effect from time to time:
provided, however, that if such amount in default is principal of a
LIBOR Loan and the due date is a day other than the last day of an
Interest Period therefor, the "Default Rate" for such principal shall
be, for the period from and including the due date and to but excluding
the last day of the Interest Period therefor, two percent (2%), plus the
interest rate for such LIBOR Loan for such Interest Period as provided
in Section 2(m)(i) and, thereafter, the rate provided for above in this
definition; and provided further, however, the Default Rate shall never
exceed the Highest Lawful Rate.
"DEFAULT RATE PERIOD" means (i) any period during which an Event of
Default, other than pursuant to Section 10(a) or Section 10(b), is
continuing; provided, however, that such period shall not begin until
notice of the commencement of the Default Rate has been given to the
Borrower Representative by the Administrative Agent and (ii) any period
during which any Event of Default pursuant to Section 10(a) or Section
10(b) is continuing, unless the Borrower Representative has been
notified otherwise by the Administrative Agent.
"DISCLOSURE SCHEDULE" means Schedule V hereto.
"DOMESTIC LENDING OFFICE" means, with respect to any Lender, the office
of such Lender specified as its "Domestic Lending Office" in the Lender
Schedule, or such other office as such Lender may from time to time
specify to the Borrower Representative and the Administrative Agent;
with respect to an L/C Issuer, the office, branch or agency through
which it issues letters of credit; and, with respect to the
Administrative Agent, the office, branch or agency through which it
administers this Agreement.
"ELIGIBLE ASSIGNEE" means (i) a commercial bank organized under the laws
of the United States, or any state thereof or (ii) a commercial bank
organized under the laws of any other country which is a member of the
Organization for Economic Cooperation and Development, or a political
subdivision of any such country provided that such bank is acting
through a branch or agency in the United States, and, in the case of
each of (i) and
12
(ii), having combined capital, surplus and undivided profits of at least
$100,000,000; or (iii) a Person that is primarily engaged in the
business of commercial banking and that is (A) a Subsidiary of a Lender,
(B) a Subsidiary of a Person of which a Lender is a Subsidiary, or (C) a
Person of which a Lender is a Subsidiary, or (iv) any other commercial
bank, savings and loan association, savings bank, finance company,
insurance company, pension fund, mutual fund or other financial
institution (whether a corporation, partnership or other entity)
acceptable to the Administrative Agent and, unless there shall have
occurred and be continuing a Default, the Borrower Representative, such
acceptance not to be unreasonably withheld or delayed.
"ELIGIBLE CASH EQUIVALENTS" means Cash Equivalents in which any Borrower
Party has lawful and absolute title, which are free from any express or
implied at law Lien, trust or other beneficial interest, in which the
Administrative Agent holds a fully perfected first-priority security
interest prior to the rights of, and enforceable as such against, any
other Persons pursuant to an account agreement satisfactory to the
Administrative Agent and which remain under the sole dominion and
control of the Administrative Agent.
"ELIGIBLE CRUDE/PRODUCT/LIQUID DELIVERIES" means at the time of any
determination thereof (and without duplication), each Account
representing an amount that will be, as reasonably determined in good
faith by the Borrower Representative, an Account of any Borrower Party
with respect to sales and deliveries of crude oil, refined petroleum
products or NGLs made or committed to be made in each case under a firm
written purchase and sale agreement but for which a Borrower Party has
not yet issued an invoice to the purchaser, and as to which the
following requirements have been fulfilled to the reasonable
satisfaction of the Administrative Agent:
(i) such Borrower Party has lawful and absolute title to such
Account;
(ii) such Account is a valid, legally enforceable obligation of an
Account Debtor payable in United States or Canadian dollars,
arising from the sale and delivery of crude oil, refined
petroleum products or NGLs to such Person in the United States
of America and/or Canada in the ordinary course of business of
such Borrower Party, to the extent of the volumes of crude oil,
refined petroleum products or NGLs delivered to such Person
prior to the date of determination;
(iii) there has been excluded from such Account (i) any portion that
is subject to any dispute, rejection, loss, non-conformance,
counterclaim, offset, deduction or other claim or defense on the
part of any Account Debtor or to any claim on the part of any
Account Debtor denying liability under such Account, (ii) the
amount of any account payable or other liability owed by such
Borrower Party to the Account Debtor on such Account, whether or
not a specific netting agreement may exist, excluding, however,
any portion of any such account payable or other liability which
is at the time in question covered by a Letter of Credit and
(iii) the amount of any tax liability owed by such Borrower
Party to any governmental authority with respect to collections
on such Account;
13
(iv) such Borrower Party has the full and unqualified right to assign
and grant a security interest in such Account to the
Administrative Agent as security for the Obligations;
(v) such Account (A) represents the uninvoiced amount in respect of
volumes of crude oil, refined petroleum products or NGLs, title
to which was or will be assigned or otherwise transferred by
such Borrower Party during the month of determination or the
month immediately preceding or immediately following the month
of determination, (B) is governed by a firm written purchase and
sale agreement and (C) and is not evidenced by any promissory
note or other instrument;
(vi) such Account is not subject to any Lien in favor of any Person
and is subject to a fully perfected first-priority security
interest in favor of the Administrative Agent pursuant to the
Credit Documents, prior to the rights of, and enforceable as
such against, any other Person except for a Lien in respect of
First Purchase Crude Payables;
(vii) such Account will be due not more than 30 days following the
last day of the calendar month in which such Borrower Party's
invoice will be submitted;
(viii) such Account is not payable by an Account Debtor with more than
twenty percent (20%) of its Accounts to such Borrower Party that
are outstanding more than 60 days from the invoice date;
(ix) the Account Debtor in respect of such Account (i) is located, is
conducting significant business or has significant assets in the
United States of America and/or Canada, (ii) is a Person
Currently Approved by the Administrative Agent, (iii) is not an
Affiliate of Borrower, (iv) is not the subject of any event of
the type described in Section 10(h) and (v) has established a
credit limit with such Borrower Party in an amount Currently
Approved by the Administrative Agent;
(x) the Account Debtor in respect of such Account is not a
governmental authority, domestic or foreign; and
(xi) such Account is not the obligation of an Account Debtor as to
which the Administrative Agent determines in its reasonable
discretion that there is a legitimate concern over the timing or
collection of such obligation.
"ELIGIBLE FIXED ASSETS" means assets of any Borrower Party that (i) are
included in Property, Plant and Equipment as reflected in the most
current Consolidated balance sheet of EOTT MLP and its Subsidiaries,
(ii) are subject to a fully perfected first-priority security interest
(subject only to Permitted Liens) in favor of the Administrative Agent
pursuant to the Security Documents prior to the rights of, and
enforceable as such against, any other Person and (iii) have been
appraised by an independent appraiser selected by the Administrative
Agent. At the Closing Date hereof, Eligible Fixed Assets will include
only the assets known as (i) the MTBE Facility in ▇▇▇▇▇▇ County, Texas,
(ii) the Mont
14
Belvieu Storage Facility and Grid in ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ and Galveston
Counties, Texas and (iii) the Mississippi/Alabama Pipeline System and
related Mobile Terminal.
"ELIGIBLE INVENTORY" means inventories of crude oil, refined petroleum
products or NGLs in which any Borrower Party has lawful and absolute
title, which are (i) not subject to any Lien in favor of any Person
(other than Permitted Inventory Liens), (ii) subject to a fully
perfected first-priority security interest (subject only to Permitted
Inventory Liens) in favor of the Administrative Agent pursuant to the
Credit Documents prior to the rights of, and enforceable as such
against, any other Person, (iii) located in storage locations (including
pipelines) that are either (A) owned by a Credit Party or (B) Currently
Approved by the Administrative Agent and (iv) otherwise satisfactory to
the Administrative Agent in its sole discretion in terms of quality,
quantity and such other matters as the Administrative Agent deems
relevant, minus, without duplication, (A) the amount of any Permitted
Inventory Lien on any such inventory and (B) 110% of the amount financed
under the Crude Oil Repo Agreement. For the avoidance of doubt,
inventories included in Eligible Crude/Product/Liquid Deliveries are
excluded from Eligible Inventory.
"ELIGIBLE MARGIN DEPOSIT" means the net equity value of investments by
any Borrower Party in margin deposit accounts with commodities brokers
Currently Approved by the Administrative Agent on nationally recognized
exchanges subject to a perfected first-priority security interest in
favor of the Administrative Agent and a three-party agreement among
Borrower, the Administrative Agent and the depository institution, in
form and substance satisfactory to the Administrative Agent.
"ELIGIBLE RECEIVABLES" means at the time of any determination thereof
(and without duplication), each Account with respect to sales and
deliveries by any Borrower Party of crude oil, refined petroleum
products or NGLs, and as to which the following requirements have been
fulfilled to the reasonable satisfaction of the Administrative Agent:
(i) such Borrower Party has lawful and absolute title to such
Account;
(ii) such Account is a valid, legally enforceable obligation of an
Account Debtor payable in United States or Canadian dollars,
arising from the sale and delivery of crude oil, refined
petroleum products or NGLs to such Person in the United States
of America in the ordinary course of business of such Borrower
Party, to the extent of the volumes of crude oil, refined
petroleum products or NGLs delivered to such Person prior to the
date of determination;
(iii) there has been excluded from such Account (i) any portion that
is subject to any dispute, rejection, loss, non-conformance,
counterclaim, offset, deduction or other claim or defense on the
part of any Account Debtor or to any claim on the part of any
Account Debtor denying liability under such Account, (ii) the
amount of any account payable or other liability owed by such
Borrower Party to the Account Debtor on such Account, whether or
not a specific netting agreement may exist, excluding, however,
any portion of any such account payable or other liability
15
which is at the time in question covered by a Letter of Credit
and (iii) the amount of any tax liability owed by such Borrower
Party to any governmental authority with respect to collections
on such Account;
(iv) such Borrower Party has the full and unqualified right to assign
and grant a security interest in such Account to the
Administrative Agent as security for the Obligations;
(v) such Account is evidenced by an invoice rendered to the Account
Debtor, is governed by a purchase and sale agreement, exchange
agreement or other written agreement and is not evidenced by any
promissory note or other instrument;
(vi) such Account is not subject to any Lien in favor of any Person
and is subject to a fully perfected first-priority security
interest in favor of the Administrative Agent pursuant to the
Credit Documents, prior to the rights of, and enforceable as
such against, any other Person except for a Lien in respect of
First Purchase Crude Payables;
(vii) such Account is due not more than 30 days following the last day
of the calendar month in which the crude oil, refined petroleum
products or NGLs delivery occurred and is not more than 30 days
past due (except that any Account or group of Accounts of a
single Account Debtor, in either case in excess of $500,000
shall be excluded from Eligible Receivables if not paid within
five days after the original invoice due date);
(viii) such Account is not payable by an Account Debtor with more than
twenty percent (20%) of its Accounts to any Borrower Party that
are outstanding more than 60 days from the invoice date;
(ix) the Account Debtor in respect of such Account (i) is located, is
conducting significant business or has significant assets in the
United States of America and/or Canada, (ii) is a Person
Currently Approved by the Administrative Agent, (ii) is not an
Affiliate of Borrower, (iii) is not the subject of any event of
the type described in Section 10(h) and (iv) has established a
credit limit with a Borrower Party in an amount Currently
Approved by the Administrative Agent;
(x) the Account Debtor in respect of such Account is not a
governmental authority, domestic or foreign; and
(xi) such Account is not the obligation of an Account Debtor as to
which the Administrative Agent determines in its reasonable
discretion that there is a legitimate concern over the timing or
collection of such obligation.
"ENRON" means Enron Corp., an Oregon corporation and
debtor-in-possession in the Enron Bankruptcy Proceedings.
"ENRON BANKRUPTCY PROCEEDINGS" means the actions under the petitions for
relief filed by Enron and certain of its Affiliates under the Bankruptcy
Reform Act of 1978, as
16
amended, ▇▇▇▇▇ ▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇ 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.
"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" means EOTT Energy Canada Limited Partnership, a Delaware
limited partnership.
"EOTT CORP." means EOTT Energy Corp., a Delaware corporation.
"EOTT FINANCE CORP." means EOTT Energy Finance Corp., a Delaware
corporation.
"EOTT GP" means EOTT Energy General Partner, L.L.C., a Delaware limited
liability company.
"EOTT LIQUIDS" means EOTT Energy Liquids, L.P., a Delaware limited
partnership.
"EOTT MLP" means EOTT Energy Partners, L.P., a Delaware limited
partnership.
"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 Supplemental Indenture.
"EOTT OLP AVAILABLE CASH" means "Available Cash" as defined in the
Amended and Restated Agreement of Limited Partnership of EOTT OLP, as
amended.
"EOTT PIPELINE" means EOTT Energy Pipeline Limited Partnership, a
Delaware limited partnership.
"EOTT TERMINAL" means any storage terminal, tankage or facility owned by
any Borrower Party.
"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.
17
"ERISA AFFILIATE" means each Credit Party 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
Credit Party, are treated as a single employer under Section 414 of the
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
Credit Party has a fixed or contingent Liability.
"EVENT OF DEFAULT" shall mean the occurrence of any event described in
Section 10 of this Agreement.
"EXTENSION OF CREDIT" means (i) the disbursement of proceeds of any
Borrowing, (ii) the issuance of a Letter of Credit or the amendment of
any Letter of Credit having the effect of extending the stated
termination date thereof or increasing the maximum amount available to
be drawn thereunder or (iii) the funding of the participation in an
unpaid Matured L/C Obligation (excluding any Matured L/C Obligation
that has been repaid with the proceeds of any Borrowing). The initial
Extensions of Credit shall occur on the Closing Date with the deemed
conversion of each of the Existing Letters of Credit and the Existing
Loans to Letters of Credit and Loans, respectively, hereunder pursuant
to Section 16(q).
"FACILITY USAGE" means, at the time in question, the aggregate amount
of outstanding Loans and L/C Obligations at such time.
"FEDERAL FUNDS RATE" means, for any day, the rate per annum (rounded
upwards, if necessary, to the nearest 1/1000th of one percent) equal to
the weighted average of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged by
Federal funds brokers on such day, as published by the Federal Reserve
Bank of New York on the Business Day next succeeding such day;
provided, however, that (i) if the day for which such rate is to be
determined is not a Business Day, the Federal Funds Rate for such day
shall be such rate on such transactions on the next preceding Business
Day as so published on the next succeeding Business Day and (ii) if
such rate is not so published for any day, the Federal Funds Rate for
such day shall be the average rate quoted to the Administrative Agent
on such day on such transactions as determined by the Administrative
Agent.
"FIRST PURCHASE CRUDE PAYABLES" means the unpaid amount of any payable
obligation related to the purchase of crude oil by any Borrower Party
that the Administrative Agent determines will be secured by a statutory
Lien, including but not limited to the statutory Liens, if any, created
under the laws of Alabama, Arkansas, California, Colorado, Kansas,
Louisiana, Mississippi, Montana, Nebraska, New Mexico, ▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ or any other state to the extent such
payable obligation is not at the time in question covered by a Letter
of Credit.
"FISCAL QUARTER" means a three-month period ending on March 31, June
30, September 30 or December 31 of any year.
18
"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.
"GAAP" means those generally accepted accounting principles and
practices recognized as such by the Financial Accounting Standards
Board (or any generally recognized successor).
"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 9(d) only, any such agreement or contract covering crude
oil, refined petroleum products or NGLs that is entered into by a
Borrower Party (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),
19
(vi) Liabilities constituting principal under Capital Leases,
(vii) Liabilities arising under conditional sales or other title
retention agreements,
(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.
"INITIAL FINANCIAL STATEMENTS" means the unaudited Consolidated balance
sheet of EOTT MLP and its Subsidiaries as of January 31, 2002 and the
related Consolidated statement of operations, cash flows and partners'
capital for the month ended January 31, 2002.
"INTEREST PAYMENT DATE" means (i) with respect to each Alternative Base
Rate Loan, the last day of each month and (ii) with respect to each
LIBOR Loan, the last day of the Interest Period that is applicable
thereto and, in the case of an Interest Period longer than one month,
at monthly intervals after the first day of such Interest Period.
"INTEREST PERIOD" means, with respect to each particular LIBOR Loan in
a Borrowing, the period specified in the Borrowing Notice or
Continuation/Conversion Notice applicable thereto, beginning on and
including the date specified in such Borrowing
20
Notice or Continuation/Conversion Notice (which must be a Business Day)
and ending one, three, or six months thereafter, as the Borrower
Representative may elect in such notice; provided, however, that: (i)
any Interest Period which would otherwise end on a day which is not a
Business Day shall be extended to the succeeding Business Day unless
such Business Day falls in another calendar month, in which case such
Interest Period shall end on the preceding Business Day; (ii) any
Interest Period which begins on the last Business Day in a calendar
month (or on a day for which there is no numerically corresponding day
in the calendar month at the end of such Interest Period) shall end on
the last Business Day in a calendar month; and (iii) notwithstanding
the foregoing, no Interest Period may be selected that would end after
the last day of the Commitment Period.
"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.
"L/C COLLATERAL" has the meaning set forth in Section 2(l)(i).
"L/C CONDITIONS" has the meaning set forth in Section 2(h).
"L/C ISSUER" means Standard Chartered, in its capacity as an issuer of
Letters of Credit hereunder, its successors in such capacity and any
other Lender appointed by the Administrative Agent as an L/C Issuer
hereunder in place of or in addition to Standard Chartered; provided,
however, such appointment shall have been approved by each Lender.
"L/C OBLIGATIONS" means, at the time in question, the sum of all
Matured L/C Obligations, plus the maximum amounts L/C Issuer might then
or thereafter be called upon to advance under all Letters of Credit
then outstanding.
"LENDER EXPENSES" means any and all sums, costs and expenses incurred
by the Administrative Agent after April 1, 2002 in connection with the
preparation, negotiation and filing of any mortgage, deed of trust,
fixture filing, financial statement or other document or instrument
filed to perfect a Lien in favor of the Administrative Agent on assets
of any Borrower Party that are included in Property, Plant and
Equipment as reflected in a Consolidated balance sheet of EOTT MLP and
its Subsidiaries.
"LENDER PARTIES" means the Administrative Agent, the L/C Issuer and all
Lenders.
"LENDER SCHEDULE" means Schedule VI hereto.
21
"LENDERS" means each signatory hereto (other than any Credit Party that
is a party hereto), including Standard Chartered, in its capacity as a
Lender hereunder rather than as the Administrative Agent and L/C Issuer
and the successors of each such party as a holder of a Note.
"LETTER OF CREDIT" means any letter of credit issued by L/C Issuer
hereunder at the application of the Borrower Representative.
"LETTER OF CREDIT FEE" means, with respect to each Letter of Credit for
each month or a portion thereof while such Letter of Credit remains
outstanding, a fee equal to the product of (i) one and three-quarters
percent (1.75%) per annum and (ii) the Average Daily Maximum Drawing
Amount thereof.
"LETTER OF CREDIT REQUEST" means a request in the form and substance of
Exhibit D or substantially in such form as the L/C Issuer may from time
to time prescribe delivered by the Borrower Representative to the L/C
Issuer in accordance with the provisions of this Agreement and any
letter of credit request previously delivered to Standard Chartered in
connection with the Existing Letters of Credit.
"LIABILITIES" means, as to any Person, all Indebtedness, liabilities
and obligations of such Person, whether matured or unmatured,
liquidated or unliquidated, primary or secondary, direct or indirect,
absolute, fixed or contingent, and whether or not required to be
considered pursuant to GAAP.
"LIBOR LENDING OFFICE" means, with respect to a Lender, the office of
such Lender specified as its "LIBOR Lending Office" on the Lender
Schedule hereto (or, if no such office is specified, its Domestic
Lending Office), or such other office of such Lender as such Lender may
from time to time specify to the Borrower Representative and the
Administrative Agent.
"LIBOR" means, as applicable to any LIBOR Loan within a Borrowing and
with respect to the related Interest Period therefor, the rate per
annum (rounded upwards, if necessary, to the nearest 1/32 of 1%) as
determined on the basis of offered rates for deposits in U.S. dollars,
for a period of time comparable to such Interest Period which appears
on Telerate Page 3750 (or any successor page) as of 11:00 a.m. London
time on the day that is two Business Days preceding the first day of
such LIBOR Loan; provided, however, if the rate described above does
not appear on the Telerate system on any applicable interest
determination date, LIBOR shall be the rate (rounded upwards as
described above, if necessary) for deposits in dollars for a period
substantially equal to such Interest Period on the Reuters Page "LIBO"
(or such other page as may replace the LIBO Page on that service for
the purpose of displaying such rates), as of 11:00 a.m. (London time),
on the date that is two Business Days prior to the beginning of such
Interest Period; and provided further, however, if more than one rate
is specified on Reuters Screen LIBO Page, the applicable rate shall be
the arithmetic mean of all such rates (rounded upwards, if necessary,
to the nearest 1/1000 of 1%). If both the Telerate and Reuters system
are unavailable, then LIBOR for that date will be determined on the
basis of the offered rates for deposits in U.S. dollars for a period of
time comparable to such Interest Period which
22
are offered by four major banks in the London interbank market at
approximately 11:00 a.m. London time, on the day that is two (2)
Business Days preceding the first day of such LIBOR Loan as selected by
the Administrative Agent. The principal London office of each of the
four major London banks will be requested to provide a quotation of its
U.S. dollar deposit offered rate. If at least two such quotations are
provided, the rate for that date will be the arithmetic mean of the
quotations. If fewer than two quotations are provided as requested, the
rate for that date will be determined on the basis of the rates quoted
for loans in U.S. dollars to leading European banks for a period of
time comparable to such Interest Period offered by major banks in New
York City at approximately 11:00 a.m. New York City time, on the day
that is two Business Days preceding the first day of such LIBOR Loan.
In the event that the Administrative Agent is unable to obtain any such
quotation as provided above, it will be deemed that LIBOR pursuant to
such LIBOR Loan cannot be determined. In the event that the Board of
Governors of the Federal Reserve System shall impose a Reserve
Percentage with respect to LIBOR deposits of any Lender, then for any
period during which such Reserve Percentage shall apply, LIBOR shall be
equal to the amount determined above divided by an amount equal to 1,
minus the Reserve Percentage. "RESERVE PERCENTAGE" means the maximum
aggregate reserve requirement (including all basic, supplemental,
marginal, special, emergency and other reserves) which is imposed on
member banks of the Federal Reserve System against "Euro-currency
Liabilities" as defined in Regulation D. Without limiting the effect of
the foregoing, the Reserve Percentage shall reflect any other reserves
required to be maintained by such member banks with respect to (i) any
category of liabilities that includes deposits by reference to which
LIBOR is to be determined or (ii) any category of extensions of credit
or other assets that include LIBOR Loans. The interest rate for any
LIBOR Loan shall change whenever the Reserve Percentage changes.
"LIBOR LOAN" means a Loan that bears interest at a rate based upon
LIBOR.
"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.
"LOANS" has the meaning set forth in Section 2(a)(i).
23
"LOAN COMMITMENT" means $40,000,000, as such amount may be reduced from
time to time as provided in Section 2(m).
"MAJORITY LENDERS" means Lenders whose aggregate Percentage Shares
equal or exceed sixty-six and two-thirds percent (66-2/3%).
"MARKET PRICE" means, on each day, a spot price for the inventory of
crude oil, refined petroleum products or NGLs being valued, determined
by published prices and methodology as Currently Approved by the
Administrative Agent at the time of determination.
"MARKET VALUE OF UNHEDGED ELIGIBLE INVENTORY" means, with respect to
any volume of Unhedged Eligible Inventory, the net proceeds that would
be realized upon an immediate sale thereof for cash at the Market Price
and otherwise on an as-is/where-is basis pursuant to foreclosure of the
Liens thereon in favor of the Administrative Agent.
"MATERIAL ADVERSE CHANGE" means a material and adverse change, from the
state of affairs presented in the Initial Financial Statements,
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, (ii) EOTT MLP's Consolidated operations,
properties or prospects, considered as a whole, (iii) Borrower's
ability to timely pay the Obligations or (iv) the enforceability of any
Credit Document.
"MATURED L/C OBLIGATIONS" means all amounts paid by L/C Issuer on
drafts or demands for payment drawn or made under or purported to be
under any Letter of Credit and all other amounts due and owing to L/C
Issuer under any Letter of Credit Request, to the extent the same have
not been repaid to L/C Issuer (with the proceeds of Loans or
otherwise).
"MAXIMUM DRAWING AMOUNT" means, at the time in question, the maximum
amounts that L/C Issuer might then or thereafter be called upon to
advance under any Letter of Credit issued by L/C Issuer then
outstanding or, if the context requires, the sum of all such amounts
under all such Letters of Credit.
"MAXIMUM FACILITY AMOUNT" means $300,000,000, as such amount may be
reduced from time to time as provided in Section 2(m).
"MAXIMUM OUTSTANDING L/C AMOUNT" means for any month, the highest daily
total amount of the L/C Obligations.
"MINIMUM REQUIRED CONSOLIDATED NET WORTH" means, at the time of
determination thereof, the sum of (i) Consolidated Net Worth as
reflected in the Initial Financial Statements plus (ii) $10,000,000.
24
"MOODY'S" means ▇▇▇▇▇'▇ Investor Service, Inc., or its successor.
"NGLS" means liquid hydrocarbon products extracted from a natural gas
stream, including ethane, propane, normal butane, isobutane and natural
gasoline.
"NAMED EXECUTIVE OFFICERS" has the meaning given such term in Item 402
(a) and (b) of Regulation S-K promulgated by the Securities and
Exchange Commission and as in effect at the Closing Date.
"NOTES" means, whether one or more, the promissory note(s) of Borrower
dated the date hereof and made payable to the order of the Lender(s) in
accordance with their respective Percentage Shares, each in the form of
Exhibit A hereto, all of which shall evidence the aggregate joint and
several Indebtedness of Borrower in respect of the Obligations.
"NYMEX" means the New York Mercantile Exchange.
"NYMEX HEDGED ELIGIBLE INVENTORY" means Eligible Inventory which has
been hedged for delivery within the next 190 days by a contract on the
NYMEX arranged through brokers approved by the Administrative Agent and
with whom a three-party agreement among any Borrower Party, the
Administrative Agent and such broker has been entered in form and
substance satisfactory to the Administrative Agent or otherwise hedged
in a manner satisfactory to the Administrative Agent. The value of
NYMEX Hedged Eligible Inventory shall be the volume of the inventory
times the Market Price.
"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 Credit Party to any Lender Party, or any of them, however
evidenced, whether arising under this Agreement, the Notes, the other
Credit Documents or otherwise, 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 Lenders from any
other entity outright, conditionally or as collateral security, by
assignment, by merger with any other entity, by assumption, by
subrogation, by operation of law or otherwise (including, without
limitation, participations or interests of any Lender in the
obligations of any Credit Party to others), including, but without
limiting the generality of the foregoing, indebtedness, obligations or
Liabilities of any Credit Party to any Lender as a member of any
partnership, syndicate or association, whether for principal, interest,
fees, expenses, indemnities or other amounts and whether incurred by
any Credit Party as principal, surety, endorser, guarantor,
accommodation party, indemnitor or otherwise.
"OFFSETTING POSITION" means any offsetting sale or purchase agreement,
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.
25
"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.
"OTHER HEDGED ELIGIBLE INVENTORY" means Eligible Inventory which has
been hedged with a contract for physical delivery to a counterparty
whose Account would qualify as a Tier I Eligible Receivable or
otherwise hedged in a manner satisfactory to the Administrative Agent
in its sole discretion. The value of Other Hedged Eligible Inventory
shall be the volume of the inventory times the Market Price.
"OTHER PRIORITY CLAIMS" means any account payable, obligation or
liability that the Administrative Agent has determined has or will have
a Lien upon or claim against any Cash Equivalent, Account or inventory
of Borrower senior or equal in priority to the security interests in
favor of the Administrative Agent for the benefit of Lenders, in each
case to the extent such Cash Equivalent, Account or inventory of
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 Lender (i) when used in
Section 2(a), 2(b), or 2(m), in any Borrowing Notice or when no Loans
are outstanding hereunder, the percentage set forth opposite such
Lender's name on the Lender Schedule hereto and (ii) when used
otherwise, the percentage obtained by dividing (A) the sum of the
unpaid principal balance of such Lender's Loans at the time in
question, plus the Matured L/C Obligations which such Lender has funded
pursuant to Section 2(j)(iii), plus the portion of the Maximum Drawing
Amount which such Lender might be obligated to fund under Section
2(j)(iii) by (B) the sum of the aggregate unpaid principal balance of
all Loans at such time, plus the aggregate amount of L/C Obligations
outstanding at such time.
"PERMITTED ACQUISITIONS" means (i) the acquisition by a Credit Party of
all of the capital stock or other equity interests in a Person
(exclusive of general partner interests held by EOTT GP, EOTT Corp. or
another Wholly Owned Subsidiary of Enron not in excess of a 1% economic
interest and exclusive of director qualifying shares and other equity
interests required to be held by an Affiliate to comply with a
requirement of Law) or (ii) any acquisition by a Credit Party of all or
a portion of the business, assets or operations of a Person (whether in
a single transaction or a series of related transactions); provided,
however, that (A) prior to and after giving effect to such acquisition
no Default or Event of Default shall have occurred and be continuing;
(B) all representations and warranties shall be true and correct as if
restated immediately following the consummation of such acquisition;
(C) substantially all of such business, assets and operations so
acquired, or of the Person so acquired, consists of crude oil, refined
petroleum products and/or NGLs marketing, gathering, transportation,
storage, terminalling and pipeline operations; and (D) the
consideration paid or payable in connection with all such acquisitions
does not exceed $1,000,000 in the aggregate.
"PERMITTED CAPITAL EXPENDITURES" means (i) cash Capital Expenditures
made to maintain, up to the level that exists on the Closing Date, the
operating capacity of the capital assets of Borrower, taken as a whole,
as such assets exist on the Closing Date and (ii) cash Capital
Expenditures made during Fiscal Year 2002 not to exceed $27,000,000
26
in the aggregate for additions or improvements to the capital assets
owned by any Borrower Party or the acquisition (including Permitted
Acquisitions, of existing or the construction of new capital assets
that consist of pipeline systems, storage facilities or other assets
directly related to the business of crude oil, refined petroleum
products and/or NGLs, marketing, gathering, transportation, storage or
terminalling.
"PERMITTED INTERCOMPANY INDEBTEDNESS" means Indebtedness of any Credit
Party (other than EOTT MLP) to (i) EOTT MLP, (ii) Enron or any
Affiliate of Enron that is subject to the Enron Bankruptcy Proceedings,
but only to the extent described under the caption "Enron Related
Matters" in Section 7(t) of the Disclosure Schedule or (iii) any other
Affiliate of Enron (other than a Credit Party) Currently Approved by
the Administrative Agent that is subordinated to all of the Obligations
and all Indebtedness and other Liabilities incurred by any Credit Party
(other than EOTT MLP) in the ordinary course of business to vendors,
suppliers or other Persons providing goods and services to any Credit
Party on terms approved in writing by the Majority Lenders; provided,
however, that such terms shall not prohibit the regular payment of a
market rate of interest (as determined in good faith by the board of
directors of EOTT Corp.) on Permitted Intercompany Indebtedness unless
there shall have occurred and be continuing a Default or Event of
Default, or such payment would result in the occurrence of a Default or
Event of Default; and provided further, however, that such terms shall
prohibit or restrict repayments, repurchases and redemptions of
principal as the Majority Lenders shall determine in its sole
discretion.
"PERMITTED INVENTORY LIENS" means any Lien and the amount of any
Liability secured thereby, on crude oil, refined petroleum products or
NGLs inventory that would be a Permitted Lien under Section 9(a)(ii)
(so long as such Lien is inchoate) or Section 9(a)(iv).
"PERMITTED INVESTMENTS" means (i) Cash Equivalents, (ii) Investments
described in the Disclosure Schedule, (iii) Investments by EOTT MLP or
any of its Subsidiaries in any Wholly Owned Subsidiary of EOTT MLP that
is a Borrower Party or Guarantor and (iv) Permitted Acquisitions.
"PERMITTED LIEN" shall mean any of the following:
(i) Liens created pursuant to the Existing Agreement or the Credit
Documents;
(ii) 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;
(iii) carriers', warehousemen's, mechanics', materialmen's,
repairmen's, landlord's or other like Liens (including,
without limitation, Liens on property of any Credit Party 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
27
proceedings, if necessary, and for which adequate reserves are
maintained on the books of any Credit Party in accordance with
GAAP;
(iv) 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;
(v) 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;
(vi) Liens in respect of existing Capital Leases but encumbering
only the property under lease;
(vii) statutory Liens related to the purchase of crude oil by a
Borrower Party;
(viii) Liens granted by EOTT Canada in favor of Enron reflected in
the Alberta Personal Property Registry;
(ix) Liens permitted by the Security Documents;
(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
Credit Party 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 Credit Party.
"PERMITTED REFINANCING INDEBTEDNESS" means Indebtedness incurred by any
Credit Party (i) secured by any asset included in Property, Plant and
Equipment as reflected in the most current Consolidated balance sheet
of EOTT MLP and its Subsidiaries and (ii) with respect to which all of
the proceeds are applied to pay or prepay outstanding Obligations.
"PERMITTED REPURCHASE INDEBTEDNESS" means Indebtedness incurred by any
Credit Party pursuant to which the counterparty will purchase
commodities from such Credit Party under a repurchase arrangement.
"PERMITTED SUBORDINATED DEBT" means (i) Indebtedness of a Borrower
Party to EOTT MLP that is subordinated to (A) all of the Obligations or
terms approved in writing by the Majority Lenders and (B) all
Indebtedness incurred by such Borrower Party to trade
28
creditors, the terms of which do not provide for scheduled payments of
any principal of such Indebtedness (including scheduled repayments or
sinking fund payments) prior to December 31, 2003 and (ii) any and all
other current or future Indebtedness of any Credit Party that is
subordinated to all of the Obligations on terms approved in writing by
the Majority Lenders.
"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.
"PRESCRIBED FORMS" has the meaning set forth in Section 3(g)(iv).
"RATING AGENCY" means either S&P or ▇▇▇▇▇'▇.
"REGISTER" has the meaning set forth in Section 14(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(g)(i).
"RELEASE" has the meaning given such term in 42 U.S.C. Section
9601(22).
"RESTRICTED PAYMENTS" means (i) the declaration, payment or making of
any distribution or other payment on account of EOTT MLP's partnership
or other equity interests or to the direct or indirect holders of EOTT
MLP's partnership or other equity interests in their capacity as such
(other than distributions payable in partnership or other equity
interests of EOTT MLP); (ii) the purchase, redemption or other
acquisition or retirement by EOTT MLP for value of any partnership or
other equity interests of EOTT MLP; or (iii) the making of any
principal payment on, or the purchase, redemption, defeasance or other
acquisition or retirement for value of, any Indebtedness of EOTT MLP
that is subordinated to the Obligations.
"RISK MANAGEMENT POLICIES" means, with respect to any Borrower Party,
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 Corp. board of directors.
"S&P" means Standard & Poor's Ratings Group (a division of McGraw Hill,
Inc.) or its successor.
"SECURITY" means any rights, properties or interests of any Lender
Party under the Credit Documents, which provide recourse or other
benefits to any Lender Party 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.
29
"SECURITY DOCUMENTS" means 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 and other agreements or
instruments now, heretofore or hereafter delivered by any Credit Party
to the Administrative 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 Credit Party's
other duties and obligations under the Credit Documents.
"SECURITY SCHEDULE" means Schedule VII 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.
"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.
"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 I ACCOUNT DEBTOR" means a Person (i) whose Debt Rating is either
at least Baa3 by ▇▇▇▇▇'▇ or at least BBB- by S&P, (ii) whose commercial
paper is rated A-1 by S&P or P-1 by ▇▇▇▇▇'▇ or (iii) which is Currently
Approved by the Administrative Agent as a Tier I Account Debtor.
"TIER II ACCOUNT DEBTOR" means a Person Currently Approved by the
Administrative Agent as a Tier II Account Debtor.
"TIER I ELIGIBLE CRUDE/PRODUCT/LIQUID DELIVERIES" means each Eligible
Crude/Product/Liquid Delivery (i) to a Tier I Account Debtor; (ii)
fully and unconditionally guaranteed as to payment by a Person whose
Debt Rating is either at least Baa3 by ▇▇▇▇▇'▇ or at least BBB- by S&P;
or (iii) fully covered by a letter of credit from an Acceptable Issuer,
in form Currently Approved by the Administrative Agent.
30
"TIER II ELIGIBLE CRUDE/PRODUCT/LIQUID DELIVERIES" means each Eligible
Crude/Product/Liquid Delivery to a Tier II Account Debtor.
"TIER I ELIGIBLE RECEIVABLES" means each Eligible Receivable (i) from a
Tier I Account Debtor; (ii) fully and unconditionally guaranteed as to
payment by a Person whose Debt Rating is either at least Baa3 by
▇▇▇▇▇'▇ or at least BBB- by S&P or whose commercial paper is rated A-1
by S&P or P-1 by ▇▇▇▇▇'▇; or (iii) fully covered by a letter of credit
from an Acceptable Issuer, in form Currently Approved by the
Administrative Agent.
"TIER II ELIGIBLE RECEIVABLES" means each Eligible Receivable from a
Tier II Account Debtor.
"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.
"TYPE" means, with respect to any Loans, the characterization of such
Loans as either Alternate Base Rate Loans or LIBOR Loans.
"UCC" means the Uniform Commercial Code as in effect in the State of
New York.
"U.C.P." means the Uniform Customs and Practice for Documentary Credits
(1993 revision), International Chamber of Commerce Publication No. 500,
or any subsequent revision thereof.
"UNHEDGED ELIGIBLE INVENTORY" means Eligible Inventory other than NYMEX
Hedged Eligible Inventory and Other Hedged Eligible Inventory.
"UNDRAWN PRODUCT PURCHASE LETTERS OF CREDIT" means, on any day, the
aggregate amount of all underlying product purchase obligations
supported by one or more Letters of Credit. As used herein, "underlying
product purchase obligation" means all existing unpaid obligations of a
Borrower Party to the beneficiary of such Letter of Credit in respect
of crude oil, refined petroleum products or NGLs that such Borrower
Party is obligated to purchase or receive or has then nominated to
purchase or receive and such beneficiary is obligated to sell or
deliver, in each case pursuant to a firm written purchase and sale or
exchange agreement. For the avoidance of doubt, any such crude oil,
refined petroleum products or NGLs are excluded from Eligible Inventory
and Eligible Crude/Product/Liquid Deliveries.
"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.
31
2. The Loans and Letters of Credit.
(a) Commitments to Lend; Notes.
(i) Subject to the terms and conditions hereof, each Lender agrees
to make one or more revolving credit loans (collectively, the
"LOANS") to Borrower upon the Borrower Representative's
request from time to time during the Commitment Period;
provided, however, that (A) subject to Sections 3(c), 3(d) and
3(f), all Lenders are requested to make Loans of the same Type
as part of the same Borrowing, (B) after giving effect to such
Loans, the aggregate principal amount of outstanding Loans
will not exceed the Loan Commitment and (C) after giving
effect to such Loans, the Facility Usage does not exceed the
lesser of (1) the Maximum Facility Amount and (2) the
Borrowing Base determined as of the date on which the
requested Loans are to be made. Subject to the terms and
conditions of this Agreement, Borrower may borrow, repay and
reborrow hereunder Loans under the Revolving Credit Facility.
(ii) The aggregate amount of all Loans in any Borrowing must be
equal to $500,000 or any higher integral multiple of $250,000.
Borrower may have no more than five Borrowings of LIBOR Loans
outstanding at any time. The obligation of Borrower to repay
to each Lender the aggregate amount of all Loans made by such
Lender, and to reimburse such Lender for its share of all
Matured L/C Obligations, together with interest accruing in
connection therewith, shall be evidenced by a Note made by
Borrower payable to the order of such Lender in the form of
Exhibit A with appropriate insertions. The amount of
principal owing on any Note at any given time shall be the
aggregate amount of all Loans theretofore made by such Lender,
minus all payments of principal theretofore received by
such Lender on such Note. Interest on each Note shall accrue
and be due and payable as provided herein and therein. The
principal amount of each Note shall be due and payable as
provided herein and therein. Notwithstanding any other
provision hereof to the contrary each Note shall be due and
payable in full not later than the last day of the Commitment
Period.
(b) Requests for New Loans. The Borrower Representative must give to the
Administrative Agent written notice (or telephonic notice promptly
confirmed in writing) of any requested Borrowing of Loans to be funded
by the Lenders. Each such notice constitutes a "BORROWING NOTICE"
hereunder and must:
(i) specify (A) the aggregate amount of any such Borrowing of
Alternative Base Rate Loans and the date on which such
Alternative Base Rate Loans are to be advanced or (B) the
aggregate amount of any such Borrowing of LIBOR Loans, the
date on which such LIBOR Loans are to be advanced (which shall
be the first day of the Interest Period which is to apply
thereto) and the length of the applicable Interest Period; and
(ii) be received by the Administrative Agent not later than 11:00
a.m., New York, New York time, on (A) the Business Day
preceding the day on which any such
32
Alternative Base Rate Loans are to be made or (B) the third
Business Day preceding the day on which any such LIBOR Loans
are to be made.
Each such written request or confirmation must be made in the form and
substance of the Borrowing Notice attached hereto as Exhibit B, duly
completed. Each such telephonic request shall be deemed a
representation, warranty, acknowledgment and agreement by Borrower as
to the matters that are required to be set out in such written
confirmation. Upon receipt of any such Borrowing Notice, the
Administrative Agent shall give each Lender prompt notice of the terms
thereof. If all conditions precedent to such new Loans have been met,
each Lender will on the date requested promptly remit to the
Administrative Agent at the Administrative Agent's office in New York,
New York the amount of such Lender's Loan in immediately available
funds, and upon receipt of such funds, unless to its actual knowledge
any conditions precedent to such Loans have been neither met nor waived
as provided herein, the Administrative Agent shall promptly make such
Loans available to Borrower. Unless the Administrative Agent shall have
received prompt notice from a Lender that such Lender will not make
available to the Administrative Agent such Lender's new Loan, the
Administrative Agent may in its discretion assume that such Lender has
made such Loan available to the Administrative Agent in accordance with
this Section and the Administrative Agent may if it chooses, in
reliance upon such assumption, make such Loan available to Borrower. If
and to the extent such Lender shall not so make its new Loan available
to the Administrative Agent, such Lender and Borrower severally agree
to pay or repay to the Administrative Agent within three days after
demand the amount of such Loan together with interest thereon, for each
day from the date such amount was made available to Borrower until the
date such amount is paid or repaid to the Administrative Agent, with
interest at (i) the Federal Funds Rate, if such Lender is making such
payment and (ii) the interest rate applicable at the time to the other
new Loans made on such date, if Borrower is making such repayment. If
neither such Lender nor Borrower pays or repays to the Administrative
Agent such amount within such three-day period, the Administrative
Agent shall be entitled to recover from Borrower, on demand, in lieu of
the interest provided for in the preceding sentence, interest thereon
at the Default Rate, calculated from the date such amount was made
available to Borrower. The failure of any Lender to make any new Loan
to be made by it hereunder shall not relieve any other Lender of its
obligation hereunder, if any, to make its new Loan, but no Lender shall
be responsible for the failure of any other Lender to make any new Loan
to be made by such other Lender.
(c) Conditions Precedent to Extension of Credit. No Lender or LC Issuer has
any obligation to make any Extension of Credit (including its first)
unless the following conditions precedent have been satisfied:
(i) All representations and warranties as made by any Credit Party
in any Credit Document shall be true on and as of the date of
such Extension of Credit as if such representations and
warranties had been made as of the date of such Extension of
Credit, except to the extent that such representation or
warranty was made as of a specific date or updated, modified
or supplemented as of a subsequent date with the consent of
the Majority Lenders.
33
(ii) No Default shall exist at the date of such Extension of
Credit.
(iii) No Material Adverse Change shall have occurred.
(iv) The making of such Extension of Credit shall not be prohibited
by any Law and shall not subject any Lender or any LC Issuer
to any penalty or other onerous condition under or pursuant to
any such Law.
(d) Continuations and Conversions of Existing Loans. Borrower may make the
following elections with respect to Loans already outstanding: to
Convert, in whole or in part, Alternative Base Rate Loans to LIBOR
Loans, to Convert, in whole or in part, LIBOR Loans to Alternative Base
Rate Loans on the last day of the Interest Period applicable thereto
and to Continue, in whole or in part, LIBOR Loans beyond the expiration
of such Interest Period by designating a new Interest Period to take
effect at the time of such expiration. In making such elections,
Borrower may combine existing Loans made pursuant to separate
Borrowings into one new Borrowing or divide existing Loans made
pursuant to one Borrowing into separate new Borrowings. Borrower may
have no more than five Borrowings of LIBOR Loans outstanding at any
time. To make any such election, the Borrower Representative must give
to the Administrative Agent written notice (or telephonic notice
promptly confirmed in writing) of any such Conversion or Continuation
of existing Loans, with a separate notice given for each new Borrowing.
Each such notice constitutes a "CONTINUATION/CONVERSION NOTICE"
hereunder and must:
(i) specify the existing Loans which are to be Continued or
Converted;
(ii) specify (A) the aggregate amount of any Borrowing of
Alternative Base Rate Loans into which such existing Loans are
to be Continued or Converted and the date on which such
Continuation or Conversion is to occur or (B) the aggregate
amount of any Borrowing of LIBOR Loans into which such
existing Loans are to be Continued or Converted, the date on
which such Continuation or Conversion is to occur (which shall
be the first day of the Interest Period which is to apply to
such LIBOR Loans) and the length of the applicable Interest
Period; and
(iii) be received by Lender not later than 11:00 a.m., New York, New
York time, on (A) the day on which any such Continuation or
Conversion to Alternative Base Rate Loans is to occur or (B)
the third Business Day preceding the day on which any such
Continuation or Conversion to LIBOR Loans is to occur.
Each such written request or confirmation must be made in the form and
substance of the Continuation/Conversion Notice attached hereto as
Exhibit C, duly completed. Each such telephonic request shall be deemed
a representation, warranty, acknowledgment and agreement by Borrower as
to the matters that are required to be set out in such written
confirmation. Upon receipt of any such Continuation/Conversion Notice,
the Administrative Agent shall give each Lender prompt notice of the
terms thereof. Each Continuation/Conversion Notice shall be irrevocable
and binding on Borrower. During the continuance of any Default,
Borrower may not make any election to Convert existing Loans into LIBOR
Loans or Continue existing Loans as LIBOR Loans beyond the
34
expiration of their respective and corresponding Interest Period then
in effect. If, due to the existence of a Default or for any other
reason, Borrower fails to timely and properly give any
Continuation/Conversion Notice with respect to a Borrowing of existing
LIBOR Loans at least three Business Days prior to the end of the
Interest Period applicable thereto, such LIBOR Loans, to the extent not
prepaid at the end of such Interest Period, shall automatically be
Converted into Alternative Base Rate Loans at the end of such Interest
Period. No new funds shall be repaid by Borrower or advanced by any
Lender in connection with any Continuation or Conversion of existing
Loans pursuant to this Section, and no such Continuation or Conversion
shall be deemed to be a new advance of funds for any purpose; such
Continuations and Conversions merely constitute a change in the
interest rate applicable to already outstanding Loans.
(e) Use of Proceeds.
(i) Borrower shall use all proceeds of Loans solely (A) for
working capital purposes in the ordinary course of business
and (B) to refinance Matured L/C Obligations.
(ii) Borrower shall use all Letters of Credit solely for the
purposes specified in Section 2(h)(iv).
(iii) In no event shall any Loan or any Letter of Credit 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. Borrower represents and
warrants that no Borrower Party is engaged principally in, or
has as one of Borrower's important activities, the business of
extending credit to others for the purpose of purchasing or
carrying such margin stock.
(f) Optional Prepayments of Loans. Borrower may, upon five Business Days'
notice to the Administrative Agent (and the Administrative Agent will
promptly give notice to the other Lenders), from time to time and
without premium or penalty prepay the Loans, in whole or in part, so
long as the aggregate amounts of all partial prepayments of principal
on the Loans equals $2,000,000 or any higher integral multiple of
$250,000. Each prepayment of principal under this Section shall be
accompanied by all interest then accrued and unpaid on the principal so
prepaid. Any principal or interest 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, including, without limitation, pursuant to Section 3(f).
(g) Mandatory Prepayments; Automatic Reduction of Maximum Facility Amount.
(i) Borrower shall ensure that at no time will Facility Usage
exceed the Borrowing Base as calculated on any day during the
Commitment Period, which amount as so calculated may differ
from the amount of the Borrowing Base reflected in the
35
most recently delivered Borrowing Base Report. If at any time
the Facility Usage exceeds the Borrowing Base (whether due to
a reduction in the Borrowing Base in accordance with this
Agreement, or otherwise), or the Maximum Facility Amount
(whether due to a reduction thereto pursuant to Section
2(g)(ii) or Section 2(m)(iii), or otherwise), Borrower shall
immediately and without demand prepay the principal of the
Loans in an amount at least equal to such excess.
(ii) If at any time during the Commitment Period Borrower shall
receive or be entitled to receive (A) a loan or other proceeds
of any Permitted Refinancing Indebtedness or (B) any proceeds
(including insurance proceeds) with respect to any sale,
transfer, lease, exchange, alienation, disposition, loss,
destruction or condemnation of any Collateral (excluding any
sale permitted under Section 9(f)(iii) below), the Maximum
Facility Amount will be reduced automatically and permanently
on a pro tanto basis by an amount equal to (x) the total
proceeds received minus (y) any amount thereof applied to pay
or prepay Obligations outstanding under either of the SCTSC
Agreements with a concomitant permanent reduction of SCTSC's
commitment thereunder.
(iii) If at any time during the Commitment Period Borrower shall
receive or be entitled to receive proceeds of any Permitted
Repurchase Indebtedness, the Maximum Facility Amount will be
reduced automatically and permanently on a pro tanto basis by
an amount equal to the lesser of (A) the total proceeds
received minus any amount thereof applied to pay or prepay
Obligations outstanding under either of the SCTSC Agreements
and with a concomitant permanent reduction of SCTSC's
commitment thereunder and (B) $65,000,000 minus any amount of
such total proceeds received applied as described in the
foregoing subclause (A).
(iv) Each prepayment of principal under this Section shall be
accompanied by all interest then accrued and unpaid on the
principal so prepaid. Any principal or interest 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.
(h) Letters of Credit. Subject to the terms and conditions hereof, Borrower
may during the Commitment Period request L/C Issuer to issue, amend or
extend the expiration date of, one or more Letters of Credit; provided,
however, that:
(i) after taking such Letter of Credit into account, the Facility
Usage does not at such time exceed the lesser of (A) the
Maximum Facility Amount and (B) the Borrowing Base;
(ii) the expiration date of such Letter of Credit is prior to the
earlier of (A) 70 days after the date such Letter of Credit is
to be issued, or such longer period (not to exceed 365 days)
as may be Currently Approved by the Majority Lenders and (B)
prior to the end of the Commitment Period;
36
(iii) the issuance of such Letter of Credit will be in compliance
with all applicable governmental restrictions, policies and
guidelines and will not subject L/C Issuer to any cost that is
not reimbursable under Section 3;
(iv) such Letter of Credit is related to the purchase or exchange
by any Borrower Party of crude oil, refined petroleum products
or NGLs or other business purposes and is in a form and with
terms as is usual and customary for letters of credit issued
by L/C Issuer and shall be acceptable to L/C Issuer in its
sole and absolute discretion and Currently Approved by the
Administrative Agent; and
(v) all other conditions in this Agreement to the issuance of such
Letter of Credit have been satisfied.
L/C Issuer will honor any such request if the foregoing conditions (i) through
(v) (in the following Section (i) referred to as the "L/C CONDITIONS") have been
met as of the date of issuance, amendment or extension of such Letter of Credit.
(i) Requesting Letters of Credit. The Borrower Representative must make
written request for any Letter of Credit at least one Business Day
before the date on which Borrower desires for L/C Issuer to issue such
Letter of Credit. By making any such written request, unless otherwise
expressly stated therein, Borrower shall be deemed to have represented
and warranted that the L/C Conditions described in Section (h) will be
met as of the date of issuance of such Letter of Credit. Each such
written request for a Letter of Credit must be made in writing in the
form and substance of Exhibit D, the terms and provisions of which are
hereby incorporated herein by reference (or in such other form as may
mutually be agreed upon by L/C Issuer and the Borrower Representative).
If all L/C Conditions for a Letter of Credit have been met as described
in Section (h) on any Business Day before 11:00 a.m., New York, New
York time, L/C Issuer will issue such Letter of Credit on the same
Business Day at L/C Issuer's Domestic Lending Office. If the L/C
Conditions are met as described in Section (h) on any Business Day on
or after 11:00 a.m., New York, New York time, L/C Issuer will issue
such Letter of Credit on the next succeeding Business Day at L/C
Issuer's Domestic Lending Office. If any provisions of any Letter of
Credit Request conflict with any provisions of this Agreement, the
provisions of this Agreement shall govern and control.
(j) Reimbursement and Participations.
(i) Each Matured L/C Obligation shall constitute a loan by L/C
Issuer to Borrower. Borrower promises to pay to L/C Issuer, or
to L/C Issuer's order, on demand, the full amount of each
Matured L/C Obligation, together with interest thereon (A) at
the Alternative Base Rate to and including the second Business
Day after the Matured L/C Obligation is incurred and (B) at
the Default Rate on each day thereafter.
(ii) If the beneficiary of any Letter of Credit makes a draft or
other demand for payment thereunder then the Borrower
Representative may, during the interval between the making
thereof and the honoring thereof by L/C Issuer, request the
37
Lenders to make Loans to Borrower in the amount of such draft
or demand, which Loans shall be made concurrently with L/C
Issuer's payment of such draft or demand and shall be
immediately applied by L/C Issuer to repay the amount of the
resulting Matured L/C Obligation. Such a request by the
Borrower Representative shall be made in compliance with all
of the provisions hereof; provided, however, that for the
purposes of the first sentence of Section 2(a)(i), the amount
of such Loans shall be considered, but the amount of the
Matured L/C Obligation to be concurrently paid by such Loans
shall not be considered.
(iii) L/C Issuer irrevocably agrees to grant and hereby grants to
each Lender, and, to induce L/C Issuer to issue Letters of
Credit hereunder, each Lender irrevocably agrees to accept and
purchase and hereby accepts and purchases from L/C Issuer, on
the terms and conditions hereinafter stated and for such
Lender's own account and risk an undivided interest equal to
such Lender's Percentage Share of L/C Issuer's obligations and
rights under each Letter of Credit issued hereunder and the
amount of each Matured L/C Obligation paid by L/C Issuer
thereunder. Each Lender unconditionally and irrevocably agrees
with L/C Issuer that, if a Matured L/C Obligation is paid
under any Letter of Credit for which L/C Issuer is not
reimbursed in full by Borrower in accordance with the terms of
this Agreement and the related Letter of Credit Request
(including any reimbursement by means of concurrent Loans or
by the application of L/C Collateral), such Lender shall (in
all circumstances and without set-off or counterclaim) pay to
L/C Issuer on demand, in immediately available funds at L/C
Issuer's address for notices hereunder, such Lender's
Percentage Share of such Matured L/C Obligation (or any
portion thereof that has not been reimbursed by Borrower).
Each Lender's obligation to pay L/C Issuer pursuant to the
terms of this subsection is irrevocable and unconditional. If
any amount required to be paid by any Lender to an L/C Issuer
pursuant to this subsection is paid by such Lender to L/C
Issuer within three Business Days after the date such payment
is due, L/C Issuer shall in addition to such amount be
entitled to recover from such Lender, on demand, interest
thereon calculated from such due date at the Federal Funds
Rate. If any amount required to be paid by any Lender to an
L/C Issuer pursuant to this subsection is not paid by such
Lender to L/C Issuer within three Business Days after the date
such payment is due, L/C Issuer shall in addition to such
amount be entitled to recover from such Lender, on demand,
interest thereon calculated from such due date at the
Alternative Base Rate.
(iv) Whenever an L/C Issuer has in accordance with subsection (iii)
above received from any Lender payment of such Lender's
Percentage Share of any Matured L/C Obligation, if L/C Issuer
thereafter receives any payment of such Matured L/C Obligation
or any payment of interest thereon (whether directly from
Borrower or by application of L/C Collateral or otherwise, and
excluding only interest for any period prior to L/C Issuer's
demand that such Lender make such payment of its Percentage
Share), L/C Issuer will distribute to such Lender its
Percentage Share of the amounts so received by L/C Issuer;
provided, however, that if any such payment received by L/C
Issuer must thereafter be returned by L/C Issuer, such
38
Lender shall return to L/C Issuer the portion thereof that L/C
Issuer has previously distributed to it.
(v) A written advice setting forth in reasonable detail the
amounts owing under this Section, submitted by the L/C Issuer
to Borrower or any Lender from time to time, shall be
conclusive, absent manifest error, as to the amounts thereof.
(k) No Duty to Inquire.
(i) L/C Issuer is authorized and instructed to accept and pay
drafts and demands for payment under any Letter of Credit
without requiring, and without responsibility for, any
determination as to the existence of any event giving rise to
such draft, either at the time of acceptance or payment or
thereafter. L/C Issuer is under no duty to determine the
proper identity of anyone presenting such a draft or making
such a demand (whether by tested telex or otherwise) as the
officer, representative or agent of any beneficiary under any
Letter of Credit, and payment by L/C Issuer to any such
beneficiary when requested by any such purported officer,
representative or agent is hereby authorized and approved.
Each Borrower Party releases each Lender Party from, and
agrees to hold each Lender Party harmless and indemnified
against, any liability or claim in connection with or arising
out of the subject matter of this Section, WHICH INDEMNITY
SHALL APPLY WHETHER OR NOT ANY SUCH LIABILITY OR CLAIM IS IN
ANY WAY OR TO ANY EXTENT CAUSED, IN WHOLE OR IN PART, BY ANY
NEGLIGENT ACT OR OMISSION OF ANY KIND BY SUCH LENDER PARTY;
provided, however, only that no Lender Party shall be entitled
to indemnification for that portion, if any, of any liability
or claim which is proximately caused by its own individual
gross negligence or willful misconduct, as determined in a
final judgment.
(ii) If the maturity of any Letter of Credit is extended by its
terms or by Law or governmental action, if any extension of
the maturity or time for presentation of drafts or any other
modification of the terms of any Letter of Credit is made at
the request of the Borrower Representative, or if the amount
of any Letter of Credit is increased at the request of the
Borrower Representative, this Agreement shall be binding upon
all Credit Parties with respect to such Letter of Credit as so
extended, increased or otherwise modified, with respect to
drafts and property covered thereby and, with respect to any
action taken by L/C Issuer, L/C Issuer's correspondents or any
Lender Party in accordance with such extension, increase or
other modification.
(iii) If any Letter of Credit provides that it is transferable, L/C
Issuer shall have no duty to determine the proper identity of
anyone appearing as transferee of such Letter of Credit, nor
shall L/C Issuer be charged with responsibility of any nature
or character for the validity or correctness of any transfer
or successive transfers, and payment by L/C Issuer to any
purported transferee or transferees as determined by L/C
Issuer is hereby authorized and approved, and Borrower
releases each Lender Party from and agrees to hold each Lender
Party harmless
39
and indemnified against, any liability or claim in connection
with or arising out of the foregoing, WHICH INDEMNITY SHALL
APPLY WHETHER OR NOT ANY SUCH LIABILITY OR CLAIM IS IN ANY WAY
OR TO ANY EXTENT CAUSED, IN WHOLE OR IN PART, BY ANY NEGLIGENT
ACT OR OMISSION OF ANY KIND BY SUCH LENDER PARTY; provided,
however, only that no Lender Party shall not be entitled to
indemnification for that portion, if any, of any liability or
claim which is proximately caused by its own individual gross
negligence or willful misconduct, as determined in a final
judgment.
(l) L/C Collateral.
(i) If, after the making of all mandatory prepayments required
under Section 2(g), the outstanding L/C Obligations to the L/C
Issuer will exceed the lesser of (i) Borrowing Base and (ii)
the Maximum Facility Amount, then in addition to prepayment of
the entire principal balance of the Loans, Borrower will
immediately pay to L/C Issuer an amount equal to such excess
attributable to the L/C Obligations held by L/C Issuer. L/C
Issuer will hold such amount as collateral security for the
remaining L/C Obligations held by it (all such amounts held as
collateral security for such L/C Obligations being herein
collectively referred to as the "L/C COLLATERAL") and the
other Obligations, and such collateral may be applied from
time to time to pay the Matured L/C Obligations of L/C Issuer.
However, neither this subsection nor the following subsection
shall limit or impair any rights which L/C Issuer may have
under any other document or agreement relating to any Letter
of Credit, L/C Collateral or L/C Obligation, including any
Letter of Credit Request or any rights that any Lender Party
may have to otherwise apply any payments by Borrower and any
L/C Collateral under Section 3(a).
(ii) If the Obligations or any part thereof become immediately due
and payable pursuant to Section 10 then, unless all Lenders
otherwise specifically elect to the contrary (which election
may thereafter be retracted by all Lenders at any time), all
L/C Obligations shall become immediately due and payable
without regard to whether or not actual drawings or payments
on the Letters of Credit have occurred, and Borrower shall be
obligated to pay to L/C Issuer immediately an amount equal to
the aggregate L/C Obligations of L/C Issuer that are then
outstanding to be held as L/C Collateral.
(iii) Pending application thereof, all L/C Collateral shall be
invested by L/C Issuer in such Cash Equivalents as L/C Issuer
may choose in its sole discretion. All interest on (and other
proceeds of) such Investments shall be reinvested or applied
to L/C Issuer's Matured L/C Obligations or other Obligations
that are due and payable. When all Obligations have been
satisfied in full, including all L/C Obligations, all Letters
of Credit have expired or been terminated, and all of
Borrower's reimbursement obligations in connection therewith
have been satisfied in full, L/C Issuer shall release any
remaining L/C Collateral held by it. Borrower hereby assigns
and grants to L/C Issuer for the benefit of Lenders a
continuing security interest in all L/C Collateral paid by it
to L/C Issuer, all Investments purchased
40
with such L/C Collateral and all proceeds thereof to secure
its Matured L/C Obligations and its Obligations under this
Agreement, each Note and the other Credit Documents, and
Borrower agrees that such L/C Collateral, Investments and
proceeds shall be subject to all of the terms and conditions
of Section 4 and Section 11 and the other provisions hereof.
Borrower further agrees that L/C Issuer shall have all of the
rights and remedies of a secured party under the UCC with
respect to such security interest and that an Event of Default
under this Agreement shall constitute a default for purposes
of such security interest.
(iv) When Borrower is required to provide L/C Collateral for any
reason and fails to do so on the day when required, L/C Issuer
or the Administrative Agent may, without prior notice to
Borrower or any other Credit Party, provide such L/C
Collateral (whether by application of proceeds of other
Collateral, by transfers from other accounts maintained with
L/C Issuer, or otherwise) using any available funds of any
Borrower Party or any other Person also liable to make such
payments, and L/C Issuer or the Administrative Agent will give
notice thereof to the Borrower Representative promptly after
such application or transfer. Any such amounts that are
required to be provided as L/C Collateral and which are not
provided on the date required shall be considered past due
Obligations owing hereunder, and L/C Issuer is hereby
authorized to exercise its respective rights hereunder to
obtain such amounts.
(m) Interest Rates and Fees; Voluntary Reduction of Maximum Facility
Amount.
(i) Unless the Default Rate shall apply, (A) each Alternative Base
Rate Loan shall bear interest on each day outstanding at the
Alternative Base Rate in effect on such day and (B) each LIBOR
Loan shall bear interest on each day during the related
Interest Period at the related LIBOR in effect during such
period, plus three percent (3.0%). During a Default Rate
Period, all Loans shall bear interest on each day outstanding
at the Default Rate. If an Event of Default based upon
Sections 10(a), 10(b) or, with respect to Borrower, based upon
Sections 10(h)(i), 10(h)(ii) or 10(h)(iii) exists and the
Loans are not bearing interest at the Default Rate, the past
due principal and past due interest shall bear interest on
each day outstanding at the Default Rate. The interest rate
for any Alternative Base Rate Loan and LIBOR Loan shall change
whenever the applicable Alternative Base Rate or the Reserve
Percentage, respectively, changes. In no event shall the
interest rate on any Loan exceed the Highest Lawful Rate.
(ii) On each applicable Interest Payment Date, the Borrower shall
pay to the Administrative Agent all unpaid interest that has
accrued on the related Loans to, but not including, such
Interest Payment Date.
(iii) In consideration of each Lender's commitment to make Loans,
Borrower will pay to the Administrative Agent for the account
of each of Lender a commitment fee determined on a daily basis
equal to the Commitment Fee Rate in effect on such day times
the unused portion of such Lender's Percentage Share of the
unused portion of the Maximum Facility Amount on each day
during the Commitment
41
Period, determined for each such day by deducting from the
amount of the Maximum Facility Amount at the end of such day
the Facility Usage. This commitment fee shall be due and
payable in arrears on the last day of each Fiscal Quarter and
at the end of the Commitment Period. Borrower shall have the
right from time to time to reduce permanently the Maximum
Facility Amount; provided, however, that (A) notice of such
reduction is given not less than two Business Days prior to
such reduction, (B) the resulting Maximum Facility Amount is
not less than the Facility Usage and (C) each partial
reduction shall be in an amount at least equal to $500,000 and
in multiples of $100,000 in excess thereof.
(iv) In consideration of L/C Issuer's issuance of any Letter of
Credit, Borrower agrees to pay to the Administrative Agent,
for the account of all Lenders in accordance with their
respective Percentage Shares:
(A) the Letter of Credit Fee, payable monthly in arrears
within 15 days after the end of each month, or
portion thereof, that any Letter of Credit is
outstanding; and
(B) an additional letter of credit fee equal to the
Additional L/C Usage Fee. Such fee will be calculated
on the face amount of each Letter of Credit
outstanding on the first day of each month and will
be payable monthly in arrears within 15 days after
the end of such month.
(v) In consideration of L/C Issuer's issuance of any Letter of
Credit, Borrower will pay to L/C Issuer for its account, (A)
upon issuance, a letter of credit fronting fee equal to the
greater of (1) a rate equal to 0.25% per annum times the face
amount of such Letter of Credit and (2) $250, and (B) a
minimum administrative issuance fee and such other fees and
charges customarily charged by L/C Issuer in respect of any
issuance, amendment or negotiation of any Letter of Credit in
accordance with L/C Issuer's published schedule of such
charges effective as of the date of such amendment or
negotiation.
(vi) In addition to all other amounts due to the Administrative
Agent under the Credit Documents, Borrower will pay to the
Administrative Agent, for its own account, an arrangement fee,
payable monthly in arrears on the first day of each month with
respect to the immediately preceding month in an amount equal
to (i) two percent (2%) per annum multiplied by (ii) the
Average Daily Maximum Facility Amount for each month. The
first installment of such fee shall be payable on May 1, 2002
with respect to each of the months of February, March and
April, 2002. For purposes of this Section 2(m)(vi), the
"AVERAGE DAILY MAXIMUM FACILITY AMOUNT" for any month shall
equal the quotient of (x) the sum of the Maximum Facility
Amount as it exists at 5:00 p.m., New York time, for each day
in the month divided by (y) the total number of days in such
month.
42
3. Payments to Lenders.
(a) General Procedures. Borrower will make each payment that it owes under
the Credit Documents to the Administrative 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
Administrative Agent not later than noon, New York, New York time, on
the date such payment becomes due and payable. Any payment received by
the Administrative 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 and, if no specific place of payment is provided,
shall be due and payable at the place of payment of the Notes. When the
Administrative Agent collects or receives money on account of the
Obligations, the Administrative Agent shall distribute all money so
collected or received and each Lender Party shall apply all such money
so distributed, as follows:
(i) first, for the payment of all Obligations which are then due
(and if such money is insufficient to pay all such
Obligations, first to any reimbursements due such Lender Party
under Section 8(b) or Section 8(l) and then to the partial
payment of all other Obligations then due in proportion to the
amounts thereof, or as the Lender Party shall otherwise
agree);
(ii) then for the prepayment of amounts owing under the Credit
Documents (other than principal on the Notes) if so specified
by the Borrower Representative;
(iii) then for the prepayment of principal on the Notes, together
with accrued and unpaid interest on the principal so prepaid
and then held as L/C Collateral pursuant to Section 2(l)(iii);
and
(iv) last, for the payment or prepayment of any other Obligations.
All payments applied to principal or interest on any Note shall be
applied first to any interest then due and payable, then to principal
then due and payable and last to any prepayment of principal and
interest in compliance with Section 2(f) and Section 2(g). All
distributions of amounts described in any of subsections (ii), (iii) or
(iv) above shall be made by the Administrative Agent pro rata to each
Lender Party then owed Obligations described in such subsection in
proportion to all amounts owed to all Lender Parties which are
described in such subsection; provided, however, that if any Lender
then owes payments to L/C Issuer for the purchase of a participation
under Section 2(j)(iii) or to the Administrative Agent hereunder, any
amounts otherwise distributable under this Section to such Lender shall
be deemed to belong to L/C Issuer or the Administrative Agent,
respectively, to the extent of such unpaid payments, and the
Administrative Agent shall apply such amounts to make such unpaid
payments rather than distribute such amounts to such Lender.
43
(b) 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, Borrower 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 reduced by, or in whole
or in part based on, the existence of the face amount of such Lender
Party's Loans, Letters of Credit, participations in Letters of Credit
or Loan Commitment under this Agreement.
(c) Increased Cost of LIBOR Loans or Letters of Credit. 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 LIBOR Loan or Letter of Credit or otherwise due under
this Agreement in respect of any LIBOR Loan or Letter of
Credit (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 LIBOR Loan or any Letter of Credit (excluding those for
which such Lender Party is fully compensated pursuant to
adjustments made in the definition of LIBOR) 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 or the interbank eurocurrency
deposit market any other condition affecting any LIBOR Loan or
Letter of Credit, the result of which is to increase the cost
to any Lender Party of funding or maintaining any LIBOR Loan
or of issuing any Letter of Credit or to reduce the amount of
any sum receivable by any Lender Party in respect of any LIBOR
Loan or Letter of Credit by an amount deemed by any Lender
Party to be material,
then such Lender Party shall promptly notify the Administrative 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 (i) Borrower shall, within five Business
Days after demand therefor by such Lender Party, pay such amount to the
Administrative
44
Agent for the account of such Lender Party and (ii) Borrower may elect,
by giving to the Administrative Agent and such Lender Party not less
than three Business Days' notice, to Convert all (but not less than
all) of any such LIBOR Loans into Alternative Base Rate Loans.
(d) 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 Sections 3(b), (c), 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 Sections 3(b), (c), or (e)
in respect of any costs resulting from such event, only be entitled to
payment under Sections 3(b), (c), 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 for the Loans affected by such event 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
Sections 3(b), (c), or (e).
(e) Availability. If (i) any change in applicable Laws, or in the
interpretation or administration thereof, of or in any jurisdiction
whatsoever, domestic or foreign, shall make it unlawful or
impracticable for such Lender Party to fund or maintain LIBOR Loans or
to issue or participate in Letters of Credit or shall materially
restrict the authority of any Lender Party to purchase or take offshore
deposits of dollars (i.e., "eurodollars"), (ii) any Lender Party
determines that matching deposits appropriate to fund or maintain any
LIBOR Loan are not available to it or (iii) any Lender Party determines
that the formula for calculating LIBOR does not fairly reflect the cost
to such Lender Party of making or maintaining loans based on such rate,
then, upon notice by such Lender Party to the Borrower Representative
and such Lender Party, Borrower's right to elect LIBOR Loans from such
Lender Party (or, if applicable, to obtain Letters of Credit) shall be
suspended to the extent and for the duration of such illegality,
impracticability or restriction and all LIBOR Loans of such Lender
Party that are then outstanding or are then the subject of any
Borrowing Notice and which cannot lawfully or practicably be maintained
or funded shall immediately become or remain, or shall be funded as,
Alternative Base Rate Loans of such Lender Party. Borrower agrees to
indemnify each Lender Party and hold it harmless against all costs,
expenses, claims, penalties, liabilities and damages that may result
from any such change in Law, interpretation or administration. Such
indemnification shall be on an after-tax basis, taking into account any
taxes imposed on the amounts paid as indemnity.
(f) Funding Losses. In addition to its other obligations hereunder,
Borrower will indemnify each Lender Party against, and reimburse each
Lender Party on demand for, any loss or expense incurred or sustained
by such Lender Party (including any loss or expense
45
incurred by reason of the liquidation or reemployment of deposits or
other funds acquired by each Lender Party to fund or maintain LIBOR
Loans), as a result of (i) any payment or prepayment (whether or not
authorized or required hereunder) of all or a portion of a LIBOR Loan
on a day other than the day on which the applicable Interest Period
ends, (ii) any payment or prepayment, whether or not required
hereunder, of a Loan made after the delivery, but before the effective
date, of a Continuation/Conversion Notice, if such payment or
prepayment prevents such Continuation/Conversion Notice from becoming
fully effective, (iii) the failure of any Loan to be made or of any
Continuation/Conversion Notice to become effective due to any condition
precedent not being satisfied or due to any other action or inaction of
any Credit Party or (iv) any Conversion (whether or not authorized or
required hereunder) of all or any portion of any LIBOR Loan into an
Alternative Base Rate Loan or into a different LIBOR Loan on a day
other than the day on which the applicable Interest Period ends. Such
indemnification shall be on an after-tax basis, taking into account any
taxes imposed on the amounts paid as indemnity.
(g) Reimbursable Taxes. Borrower covenants and agrees that:
(i) Borrower 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 or any LIBOR Loans or Letters of Credit (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 Loans and the Notes, and all other amounts
payable by Borrower 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 Borrower. In the event of Borrower
being compelled by Law to make any such deduction or
withholding from any payment to any Lender Party, Borrower
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 Borrower shall make any deduction or
withholding as aforesaid, Borrower 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) If Borrower is ever required to pay any Reimbursable Tax with
respect to any LIBOR Loan, Borrower may elect, by giving to
the Administrative Agent and such Lender Party not less than
three Business Days' notice, to Convert all (but
46
not less than all) of any such LIBOR Loan into an Alternative
Base Rate Loan, but such election shall not diminish
Borrower's obligation to pay all Reimbursable Taxes.
(iv) Notwithstanding the foregoing provisions of this Section,
Borrower shall be entitled, to the extent it is 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 a 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 Administrative 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
Administrative 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 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 Code
or (iii) any applicable rules or regulations thereunder,
permit Borrower to make payments hereunder for the account of
such Lender Party free of such deduction or withholding of
income or similar taxes.
(h) Replacement of Lender Parties. If any Lender Party seeks reimbursement
for increased costs under Sections 3(b) through 3(g), then within 90
days thereafter, provided no Default or Event of Default then exists,
Borrower shall have the right (unless such Lender Party withdraws its
request for additional compensation) to replace such Lender Party by
requiring such Lender Party to assign its Loans and the Notes and its
Loan Commitment hereunder to an Eligible Transferee reasonably
acceptable to the Administrative Agent and to Borrower; provided,
however, that: (i) all Obligations of Borrower owing to such Lender
Party being replaced (including such increased costs and any breakage
costs with respect to any outstanding LIBOR Loans, but excluding
principal and accrued interest on the Note being assigned) shall be
paid in full to such Lender Party concurrently with such assignment and
(ii) the replacement Eligible Transferee shall purchase each Note being
assigned by paying to such Lender Party a price equal to the principal
amount thereof, plus accrued and unpaid interest and accrued and unpaid
fees, including but not limited to those fees and amounts owed under
Section 2(m). In connection with any such assignment, Borrower, the
Administrative Agent, such Lender Party and the replacement Eligible
Transferee shall otherwise comply with Section 14. However,
notwithstanding the foregoing rights of Borrower under this Section,
Borrower may not replace any
47
Lender Party that seeks reimbursement for increased costs under
Sections 3(b) through 3(g) unless Borrower is at the same time
replacing all Lender Parties which are then seeking such compensation.
4. GRANT OF SECURITY INTEREST.
(a) To secure payment, performance and observance in full of all of the
Obligations, each Credit Party hereby grants to the Administrative
Agent for the benefit of all Lender Parties a continuing security
interest in, a Lien upon, and a right of set-off against, and each such
Credit Party hereby assigns, transfers, pledges and sets over to the
Administrative Agent, all of such Credit Party's Collateral. All such
Collateral shall be security for the payment, performance and
observance of all such Obligations notwithstanding the maintenance of
separate accounts by Lenders or the existence of any instruments
evidencing any of the Obligations.
(b) Upon the occurrence of an Event of Default as described herein and for
the purposes of safeguarding the Lender Parties' interests in the
Collateral, each Credit Party hereby constitutes the Administrative
Agent and any designee of the Administrative Agent as such Credit
Party's attorney-in-fact and authorizes the Administrative Agent or
such designee, at such Credit Party's sole cost and expense, to
exercise at any time or times in the Administrative Agent's discretion
all or any of the following powers, at the sole expense of such Credit
Party, which power-of-attorney being coupled with an interest shall be
irrevocable until all of the Obligations have been indefeasibly paid in
full: (i) receive, take, endorse, assign, deliver, accept, and deposit,
in the name of the Administrative Agent or such Credit Party, any and
all cash, checks, commercial paper, drafts, remittances and other
instruments and documents relating to the Collateral, (ii) receive,
open and dispose of all mail addressed to such Credit Party and notify
postal authorities to change the address for delivery thereof to such
address as the Administrative Agent may designate, (iii) transmit to
account debtors and any bailees notice of the interest of the
Administrative Agent in the Collateral or request from account debtors
or such bailees at any time, in the name of such Credit Party or the
Administrative Agent or any designee of the Administrative Agent,
information concerning the Collateral and any amount owing with respect
thereto, (iv) notify account debtors to make payment directly to the
Administrative Agent, (v) take or bring, in the name of the
Administrative Agent or such Credit Party, all steps, actions, suits or
proceedings deemed by the Administrative Agent necessary or desirable
to effect collection of the Collateral, (vi) enter such Credit Party's
premises for the purpose of inspecting, verifying, auditing,
maintaining, preserving, protecting and removing the Collateral and
(vii) obtaining, adjusting, compromising, settling and canceling
insurance policies on the Collateral and any claims thereunder. Each
Credit Party hereby releases the Administrative Agent, its officers,
employees and designees from any Liability arising from any act or acts
under the authorizations granted in Section 3, or granted below or
otherwise under this Agreement, the other Credit Documents or in
furtherance hereof or thereof, whether by omission or commission, and
whether based upon any error of judgment or mistake of law or fact.
48
(c) There is hereby established with the Administrative Agent for the
benefit of all Lender Parties a cash collateral account (the
"COLLATERAL ACCOUNT") in the name and, pursuant to the terms hereof,
under the control of the Administrative Agent into which there shall be
deposited from time to time the cash proceeds of the Collateral (and of
any other collateral under any other Credit Document) required to be
delivered to the Administrative Agent pursuant to the following clause
of this Section or pursuant to any other provision of this Agreement or
any other Credit Document. The Credit Parties and the Administrative
Agent shall deal with the Collateral Account as follows:
(i) Concurrently with the execution hereof (or promptly
thereafter), each Credit Party shall instruct all account
debtors and other persons or entities obligated to make
payments to such Credit Party on any accounts or other rights
to payment included within the Collateral to make such
payments either (A) directly to the Administrative Agent, in
which case such Credit Party shall instruct that such payments
be remitted to a post office box which shall be in the name
and under the control of the Administrative Agent or (B) if
the Administrative Agent agrees, to one or more banks
acceptable to the Administrative Agent, in which case such
Credit Party shall instruct that such payments be remitted to
a post office box in the name and under the control of such
bank that is subject to the terms of a lockbox letter
satisfactory to the Administrative Agent, duly executed by
such Credit Party and such bank, pursuant to which such Credit
Party shall have irrevocably instructed such other bank (and
such other bank shall have agreed) to remit all proceeds of
such payments directly to the Administrative Agent for deposit
into the Collateral Account or as the Administrative Agent may
otherwise instruct such bank. All such payments made to the
Administrative Agent shall be deposited in the Collateral
Account. In addition to the foregoing, each Credit Party
agrees that if the proceeds of any Collateral (including any
payments with respect to which instructions have been given as
provided above) shall be received by it, such Credit Party
shall as promptly as possible deposit such proceeds into the
Collateral Account. Until so deposited, all such proceeds
shall be held in trust by such Credit Party for the
Administrative Agent and shall not be commingled with any
other funds or property of such Credit Party, and such Credit
Party will not adjust, settle or compromise the amount or
payment of any such account or other right to payment or
release wholly or partly any account debtor or obligor thereof
or allow any credit or discount thereon.
(ii) Amounts on deposit in the Collateral Account shall either
remain on deposit therein or be invested and re-invested from
time to time in such Cash Equivalents as the Borrower
Representative (or, if a default or Event of Default has
occurred and is continuing, the Administrative Agent) shall
determine, which such Investments shall be held in the name
and be under the control of the Administrative Agent until
liquidated and applied as provided in the following subsection
(iii). Any income received by the Administrative Agent with
respect to the balance from time to time standing to the
credit of the Collateral Account, including any interest on or
proceeds of such Investments, shall also remain, or be
deposited, in the Collateral Account. All right, title and
interest in and to the amounts on deposit from time to time in
the Collateral Account, together with any
49
such Investments from time to time made pursuant to this
subsection shall vest in such Credit Party, subject in all
respects to the Liens and security interests created
hereunder, and shall constitute part of the Collateral
hereunder, and shall not constitute payment of the Obligations
until applied thereto as herein provided.
(iii) The balance from time to time standing in the Collateral
Account shall, except upon the occurrence and during the
continuation of a Default or an Event of Default, be
distributed to the applicable Credit Party upon the order of
the Borrower Representative. If immediately available cash on
deposit in the Collateral Account is not sufficient to make
any such distribution, the Administrative Agent shall, upon
the direction of the Borrower Representative, liquidate as
promptly as practicable such Cash Equivalent Investments as
may be required to obtain sufficient cash to make such
distribution; provided, however, that the portion of any such
distribution that can be made from immediately available cash
on deposit in the Collateral Account shall be made while such
liquidation is pending. Upon the occurrence and continuation
of a Default or an Event of Default, the Administrative Agent
shall, at the Administrative Agent's discretion, either (A)
continue to hold the balance of the Collateral Account and all
such Investments as Collateral or (B) apply any or all of the
balance from time to time outstanding to the credit of the
Collateral Account (subject to collection) as specified in
Section 11(a)(iii) and liquidate any or all Investments and
apply the proceeds thereof as specified in Section 11(a)(iii).
5. AUTHORIZATION TO FILE FINANCING STATEMENTS. The Administrative Agent
may at any time and from time to time file financing statements,
continuation statements and amendments thereto that describe the
Collateral as all assets of each Credit Party or words of similar
effect and which contain any other information required by applicable
law for the sufficiency or filing office acceptance of any financing
statement, continuation statement or amendment, including whether such
Credit Party is an organization, the type of organization and any
organization identification number issued to such Credit Party. Each
Credit Party agrees to furnish any such information to the
Administrative Agent promptly upon request. Any such financing
statements, continuation statements or amendments may be signed by the
Administrative Agent on behalf of any Credit Party and may be filed at
any time with or without any signature of such Credit Party or the
Administrative Agent in any jurisdiction.
6. OTHER ACTIONS OF CREDIT PARTIES.
(a) Each Credit Party shall at any time and from time to time take such
steps as the Administrative Agent may request for the Administrative
Agent to (i) obtain an acknowledgment, in form and substance
satisfactory to the Administrative Agent, of any bailee having
possession of any of the Collateral that the bailee holds such
Collateral for the Administrative 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
50
Administrative Agent, and (iii) otherwise insure the continued
perfection and priority of the Administrative Agent's security interest
in any of the Collateral and of the preservation of its rights therein.
(b) Each Credit Party shall at any time and from time to time take such
steps as the Administrative 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 Credit Party,
including, without limitation, (i) the execution, delivery,
acknowledgement, filing and recordation of such mortgages, deeds of
trust, fixture filings and similar instruments as the Administrative
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 Administrative Agent
deems necessary or desirable to better confirm the granting to the
Administrative Agent by the applicable Credit Party of such Lien on
such Credit Party's real property or fixtures included in the
Collateral owned or leased by such Credit Party.
(c) Nothing contained in this Agreement shall be construed to narrow the
scope of the Administrative 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 Administrative Agent hereunder.
7. REPRESENTATIONS AND WARRANTIES. Each Credit Party 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 Borrower by the Lenders:
(a) Such Credit Party is duly organized, formed or incorporated, validly
existing and in good standing under the Laws of its jurisdiction of
organization or incorporation, having all powers required to carry on
its business. Such Credit Party 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 Credit Party 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. Borrower is duly
authorized to borrow funds hereunder.
(b) Such Credit Party is duly qualified, in good standing and authorized to
do business in the jurisdictions within the United States identified in
Section 7(b) of the Disclosure Schedule. Such jurisdictions comprise
all jurisdictions within the United States wherein the character of the
properties owned or held by it or the nature of the business transacted
by it makes such qualification necessary, except where the failure to
so qualify would not cause a Material Adverse Change. Such Credit Party
has taken all actions and procedures customarily taken in order to
enter, for the purpose of conducting business or owning property, each
jurisdiction outside the United States wherein the character of the
properties owned or held by it or the nature of the business transacted
by it makes such
51
actions and procedures necessary, except where the failure to so
qualify would not cause a Material Adverse Change.
(c) Except as set forth in Section 7(c) of the Disclosure Schedule, this
Agreement and the other Credit Documents constitute and will constitute
legal, valid and binding obligations of such Credit Party, enforceable
in accordance with their respective terms except as such enforcement
may be limited by bankruptcy, insolvency or similar Laws of general
application relating to the enforcement of creditors' rights.
(d) Such Credit Party 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 Internal Revenue Code of 1986, as
amended (the "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 7(d) 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.
(e) No action of, or filing with, any governmental or public body or
authority (other than the filing or recording of such UCC financing
statements, mortgages, deeds of trust, fixture filings or other
documents evidencing security interests and Liens in favor of the
Administrative Agent set forth in Section 7(e) 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.
(f) The execution and delivery by such Credit Party of the Credit Documents
to which it is a party, the performance by such Credit Party 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 7(f) of the Disclosure
Schedule, conflict with any provision of (A) any law, (B) the
organizational or other charter documents of such Credit Party or any
of its Affiliates or (C) any material agreement, judgment, license,
order or permit applicable to or binding upon such Credit Party or any
of its Affiliates, (ii) result in the acceleration of any Indebtedness
owed by such Credit Party or any of its Affiliates or (iii) result in
or require the creation of any Lien upon any assets or properties of
such Credit Party 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 Credit Party 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.
52
(g) Such Credit Party'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 7(g) of the Disclosure Schedule, such Credit Party does not use
any trade styles, trade names or fictitious partnership names.
(h) Except as set forth in Section 7(h) of the Disclosure Schedule, the
security interests and/or mortgage Liens granted by such Credit Party
to the Administrative Agent or, as the case may be, executed and
delivered by such Credit Party in favor of the Administrative Agent and
included in the Credit Documents constitute valid, and upon perfection,
first priority security interests in and/or mortgage Liens upon the
applicable Collateral subject only to Permitted Liens.
(i) Except as set forth in Section 7(i) of the Disclosure Schedule, each
Credit Party has good and valid title to all of its Collateral subject
to no Liens of any kind, except for Permitted Liens, and has the right
to grant and convey the same to the Administrative Agent all in the
manner and form herein provided and without obtaining the waiver,
consent or approval of any Person.
(j) 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, except as set forth in Section 7(j) of the Disclosure
Schedule.
(k) Subject to the matters described in Section 7(k) of the Disclosure
Schedule, 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. 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. No "accumulated funding deficiency" (as
defined in Section 412(a) of the Code) exists with respect to any 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.
(l) Without limiting the provisions of Section 7(d):
(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 (A)
as set forth in the Section 7(l)(i) of the Disclosure Schedule
or (B) to the extent the same could not reasonably be expected
to result in a Material Adverse Change: (1) any alleged
generation, treatment, storage, recycling, transportation,
disposal or Release of
53
any Hazardous Materials, either by any Credit Party or on any
property owned by such Credit Party, (2) any remedial action
that might be needed to respond to any such alleged
generation, treatment, storage, recycling, transportation,
disposal or Release, or (3) any alleged failure by any Credit
Party 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 7(l)(ii) of the Disclosure
Schedule, no Credit Party 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 7(l)(iii) of the Disclosure
Schedule, no Credit Party has handled any Hazardous Materials,
other than as a generator, on any properties now or previously
owned or leased by any Credit Party to an extent that such
handling has caused, or could cause, a Material Adverse
Change.
(iv) Except as set forth in Section 7(l)(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:
(A) no PCBs are or have been present at any properties
now or previously owned or leased by any Credit
Party;
(B) no asbestos is or has been present at any properties
now or previously owned or leased by any Credit
Party;
(C) there are no underground storage tanks for Hazardous
Materials, active or abandoned, at any properties now
or previously owned or leased by any Credit Party;
and
(D) no Hazardous Materials have been Released at, on or
under any properties now or previously owned or
leased by any Credit Party.
(v) No Credit Party 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 7(l)(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 Credit
Party for clean-up costs, remedial work, damages to natural
resources or for personal injury claims, including, but not
limited to, claims under CERCLA.
54
(vi) Except as set forth in Section 7(l)(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 Credit Party 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 7(l)(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
Credit Party, and no governmental actions of which any Credit
Party is aware have been taken or are in process that could
subject any of such properties to such Liens; nor would any
Credit Party 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 Credit
Party in relation to any properties or facility now or
previously owned or leased by such Credit Party are available
for inspection by the Administrative Agent at the Borrower
Representative's offices or facilities.
(m) No Credit Party 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 Credit Party of indebtedness, including
laws relating to common contract carriers or the sale of electricity,
gas, steam, water or other public utility services. Such Credit Party
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.
(n) This Agreement is a "Credit Facility" and/or "Existing Indebtedness"
for purposes of the EOTT MLP Senior Notes Indenture, as defined
therein. Neither the execution of this Agreement, the execution of any
other Credit Document executed in connection therewith, nor the
issuance of Letters of Credit or extensions of Loans hereunder or the
consummation of any other of the transactions contemplated by any of
the foregoing is prohibited by, or conflicts with, the terms of the
EOTT MLP Senior Notes Indenture; and furthermore, none of such
execution, issuance, extension or consummation requires EOTT MLP to
make any provision for the granting of any Lien in favor of the holders
of the notes issued under the EOTT MLP Senior Notes Indenture.
(o) 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
55
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.
(p) No Credit Party 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.
(q) EOTT MLP has heretofore delivered to the Administrative 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. Since the date of the Initial Financial
Statements no Material Adverse Change has occurred, except to the
extent described in Section 7(q) of the Disclosure Schedule delivered
by EOTT MLP prior to the Closing Date. The Initial Financial Statements
were prepared in accordance with GAAP.
(r) No Credit Party 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
Credit Party or material with respect to EOTT MLP's Consolidated
financial condition and not shown in the Initial Financial Statements
or disclosed in Section 7(r) of the Disclosure Schedule. Except as
shown in the Initial Financial Statements or disclosed in Section 7(r)
of the Disclosure Schedule, no Credit Party is subject to or restricted
by any franchise, contract, deed, charter restriction or other
instrument or restriction that could cause a Material Adverse Change.
(s) No certificate, statement or other information delivered herewith or
heretofore by any Credit Party to Lender 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 Credit Party to
the Administrative Agent 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 Credit Party that has not been
disclosed to the Administrative Agent in writing that could cause a
Material Adverse Change.
(t) Except as disclosed in the Initial Financial Statements or in Section
7(t) of the Disclosure Schedule: (i) there are no actions, suits or
legal, equitable, arbitrative or administrative proceedings pending or,
to the knowledge of any Credit Party threatened, against any Credit
Party or affecting any Collateral (including, without limitation, any
that challenge or otherwise pertain to any Credit Party'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 Credit Party or any
56
Credit Party's stockholders, partners, directors or officers or
affecting any Collateral that could cause a Material Adverse Change.
(u) Except as disclosed in Section 7(u) of the Disclosure Schedule, neither
the business nor the properties of any Credit Party 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.
(v) Neither EOTT MLP nor any Borrower Party presently has any Subsidiary or
owns any capital stock in any other corporation or association except
those listed in Section 7(v) of the Disclosure Schedule. No Credit
Party 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 7(v) 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 7(v) of the
Disclosure Schedule.
(w) Upon giving effect to the issuance of the Notes, the execution of the
Credit Documents by Borrower and each Guarantor and the consummation of
the transactions contemplated hereby, (i) EOTT MLP and its Subsidiaries
on a Consolidated basis will be solvent (as such term is used in
applicable bankruptcy, liquidation, receivership, insolvency or similar
Laws), and the absolute and contingent Liabilities of EOTT MLP and its
Subsidiaries on a Consolidated basis, including the Obligations, shall
not exceed the fair market value of the assets of EOTT MLP and its
Subsidiaries on a Consolidated basis and (ii) the capital of EOTT MLP
and its Subsidiaries on a Consolidated basis should be adequate for the
businesses in which the Credit Parties are engaged and intend to be
engaged. No Credit Party has incurred (whether under the Credit
Documents or otherwise), nor does any Credit Party intend to incur or
believe that it will incur, debts that will be beyond its ability to
pay (on a basis Consolidated with EOTT MLP and its Subsidiaries) as
such debts mature.
(x) Section 7(x) of the Disclosure Schedule contains a complete and correct
list, as of the date of this Agreement, of each credit agreement, loan
agreement, indenture, purchase agreement, guaranty or other 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 Credit Party, or to which any Credit Party 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 7(x) of the Disclosure Schedule.
(y) The disclosures 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.
57
8. Affirmative Covenants.
To conform with the terms and conditions under which each Lender is
willing to have Extensions of Credit outstanding to Borrower, and to
induce each Lender to enter into this Agreement and to make Extensions
of Credit, the Credit Parties covenant and agree jointly and severally
that until the full and final payment of the Obligations and the
termination of this Agreement, unless the Majority Lenders have has
previously agreed otherwise:
(a) Payment and Performance. Each Credit Party 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 Credit Party
shall promptly notify the Administrative Agent of any instruments,
documents, securities or chattel paper that are owned or acquired by
such Credit Party. At any time and from time to time, upon the demand
of Lender, such Credit Party shall deliver and pledge to on behalf of
Lenders, duly endorsed and/or accompanied by such instruments of
assignment and transfer in such form and substance as the
Administrative Agent may reasonably request, any and all instruments,
documents, securities and/or chattel paper which are included in the
Collateral as the Administrative Agent may request. Such Credit Party
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 Administrative Agent
to be marked thereon.
(d) Books, Financial Statements and Reports. Each Credit Party 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 Administrative Agent at
Borrower's expense:
(i) As soon as available, and in any event within 90 days after
the Closing Date (A) complete Consolidated financial
statements of EOTT MLP as of, or for the period ending,
December 31, 2001, together with all notes thereto, prepared
in reasonable detail in accordance with GAAP, together with an
unqualified opinion, based on an audit using generally
accepted auditing standards, by PricewaterhouseCoopers LLP, or
other independent certified public accountants selected by
EOTT and acceptable to the Administrative Agent, stating that
such Consolidated financial statements have been so prepared
and (B) consolidating unaudited balance sheets and statements
of income of each Consolidated Subsidiary of EOTT MLP.
58
(ii) 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, together with an unqualified
opinion, based on an audit using generally accepted auditing
standards, by PricewaterhouseCoopers LLP, or other independent
certified public accountants selected by EOTT and acceptable
to the Administrative Agent, stating that such Consolidated
financial statements have been so prepared 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.
(iii) As soon as available, and in any event within 45 days after
the end of each of the first three Fiscal Quarters of each
Fiscal Year, commencing with Fiscal Year 2002, (A) 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, (B) consolidating balance sheets and
statements of income of each Consolidated Subsidiary as of (1)
the end of such Fiscal Quarter or (2) 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.
(iv) As soon as available, and in any event within 45 days after
the end of each calendar month, (A) 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 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 (B) a
report setting forth for such month aggregate volumes for all
marketing activities of all Credit Parties.
(v) Together with each set of financial statements furnished under
subsections (ii) (iii), and (iv) above, a certificate in the
form of Exhibit E signed by the chief
59
financial officer or treasurer of EOTT Corp. 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 Year, Fiscal Quarter or month,
respectively, or at the time of such certificate or specifying
the nature and period of existence of any such Default.
(vi) 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.
(vii) As soon as available, and in any event within 90 days of the
Closing Date, a business and financial plan for EOTT MLP (in
form reasonably satisfactory to the Administrative Agent),
prepared or caused to be prepared by a senior financial
officer thereof, setting forth for the Fiscal Year 2002,
quarterly financial projections and budgets for EOTT MLP, and
thereafter yearly financial projections during the Commitment
Period.
(viii) As soon as available, and in any event within 90 days after
the end of each Fiscal Year commencing with the end of Fiscal
Year 2002, a business and financial plan for EOTT MLP (in form
reasonably satisfactory to the Administrative Agent), prepared
or caused to be prepared by a senior financial officer
thereof, setting forth for the then existing Fiscal Year,
quarterly financial projections and budgets for EOTT MLP, and
thereafter yearly financial projections for the period
specified by the Administrative Agent.
(ix) 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 Administrative Agent a Borrowing Base Report in
the form of Exhibit F, with such supporting information in
detail as may from time to time be prescribed by the
Administrative Agent, duly completed by an authorized officer
of EOTT Corp. 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. Each such report shall include (A) a detailed
listing of each Borrower Party's Accounts and Eligible
Crude/Product/Liquid Deliveries; (B) a detailed listing of the
volumes of each such party's crude oil, refined petroleum
products and NGLs and the location of same; and (C) a listing
of each such party's crude oil, refined petroleum product or
NGL repurchase transactions in place or executed during the
period covered by such report.
(x) On each Business Day, (A) a Cash Flow Report in the form of
Exhibit G duly completed by an authorized officer of EOTT
Corp., as of the preceding Business
60
Day and (B) a statement reconciling such report with the most
recent Cash Flow Report previously delivered pursuant to this
subsection (x).
(xi) As soon as available, and in any event within 30 days after
the end of each Fiscal Year, an environmental compliance
certificate signed by the chief executive officers of EOTT GP
and EOTT Corp. in the form attached hereto as Exhibit H.
Further, if requested by the Administrative Agent, the Credit
Parties shall permit and cooperate with an environmental and
safety review made in connection with the operations of the
Credit Parties' properties one time during each Fiscal Year,
by consultants selected by the Administrative Agent which
review shall, if requested by the Administrative Agent, be
arranged and supervised by environmental legal counsel for the
Administrative Agent, all at the Credit Parties' cost and
expense. The consultant shall render an oral or written
report, as specified by the Administrative Agent, based upon
such review at the Credit Parties' cost and expense and a copy
thereof will be provided to the Credit Parties.
(xii) Concurrently with the annual renewal of the Credit Parties'
insurance policies, the Credit Parties shall at their own cost
and expense, if requested by the Administrative Agent in
writing, cause a certificate or report to be issued by the
Credit Parties' professional insurance consultants or other
insurance consultants satisfactory to the Administrative Agent
certifying that the Credit Parties' 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.
(xiii) 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 Administrative Agent an Open Position Report in
the form of Exhibit I, with such supporting information in
detail as may from time to time be prescribed by the
Administrative Agent, duly completed by an authorized officer
of EOTT Corp. 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
Administrative 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 Administrative Agent.
(xiv) On or before the tenth (10th) Business Day following receipt
by any Borrower Party or any other Credit Party, a copy of any
account statement received from any bank, securities
intermediary, commodities or futures broker or other
institution with whom such Borrower Party or such Credit Party
maintains any deposit, investment, trading or other account.
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(xv) Promptly, from time to time, such other information, documents
or reports regarding any Borrower Party or any other Credit
Party as the Administrative Agent may request, including any
regulatory filings.
(e) Other Information and Inspections. In each case, subject to the last
sentence of this Section 8(e), each Credit Party will furnish to each
Lender any information that the Administrative Agent or any Lender may
from time to time request concerning any covenant, provision or
condition of the Credit Documents or any matter in connection with the
Credit Parties' businesses and operations. In each case, subject to the
last sentence of this Section 8(e), each Credit Party will permit
representatives appointed by the Administrative Agent (including
independent accountants, auditors, agents, attorneys, appraisers and
any other Persons) to visit and inspect during normal business hours
any of such Credit Party'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 Credit Party shall permit the Administrative Agent or its
representatives to investigate and verify the accuracy of the
information furnished to the Administrative Agent or any 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, on a semi-monthly basis during the Commitment Period, if
requested by the Administrative Agent, Borrower shall permit the
Administrative Agent and its representatives to conduct an audit,
examination, test and verification of the Collateral and the other
business and assets of the Credit Parties 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 Credit Parties' records,
files, books of account and all other documents, instruments and
agreements to which any Credit Party is a party. Borrower shall pay all
reasonable costs and expenses of the Administrative Agent associated
with any such regular semi-monthly audit and, should there occur and be
continuing a Default or Event of Default, Borrower shall pay such costs
and expenses related to any additional audit. Additionally, at
Borrower's expense, from time to time the Administrative Agent may
require an inspection of the Collateral in storage at EOTT Terminals to
be conducted by an independent appraiser selected by the Administrative
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 Credit Party in respect of property
of that Credit Party on the premises of Persons other than a Credit
Party or an Affiliate of a Credit Party, 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 Credit
Party shall be subject to any applicable attorney-client privilege
exceptions that the Credit Party reasonably determines is necessary and
to compliance with conditions to disclosures under non-disclosure
agreements between any Credit Party and Persons other than a Credit
Party or an Affiliate of a Credit Party, and subject further to the
express undertaking of each Person acting at the direction of or on
behalf of the Administrative Agent to be bound by the confidentiality
provisions of Section 16(p).
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(f) Notice of Material Events and Change of Address. Each Credit Party will
notify each Lender, not later than five Business Days after any
executive officer of such Credit Party 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 Credit Party or of (A) any default by EOTT MLP under the
EOTT MLP Senior Notes Indenture or (B) any default by EOTT MLP
or any other Credit Party under any indenture (other than the
EOTT MLP Senior Notes 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 referred to in this subclause (B) could cause
a Material Adverse Change,
(iv) the occurrence of any Termination Event,
(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 Credit Party or with respect to any
Credit Party's properties taken as a whole,
(vi) (A) any material loss, damage, investigation, action, suit,
proceeding or claim relating to the Collateral or which would
result in any material adverse change in such Credit Party's
business, properties, assets, goodwill or condition, financial
or otherwise, and (B) 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 Credit Party or with respect to
any Credit Party's properties in which an adverse decision
could cause a Material Adverse Change.
Upon the occurrence of any of the foregoing, the Credit Parties 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 Credit Parties will also notify the
Administrative Agent and the Administrative Agent's counsel in writing
at least 20 Business Days prior to the date that any Credit Party
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
Administrative Agent and its counsel to prepare the same.
(g) Maintenance of Properties. Each Credit Party will maintain, preserve,
protect and keep all Collateral and all other property used or useful
in the conduct of its business in good
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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 Credit Party fail to do
so, except to the extent permitted hereunder, the Administrative Agent
may discharge 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.
Borrower agrees to reimburse the Administrative Agent on demand,
together with interest thereon at the Alternate Base Rate, for any
payment made or expense incurred by the Administrative 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 hereby.
(i) Subordination. If all or any part of the Collateral is or is about to
become affixed to realty, each Credit Party shall, at the
Administrative Agent's request, furnish the Administrative Agent on
behalf of Lenders with a writing executed by the owner and mortgagee of
the realty whereby the owner and mortgagee subordinates its rights and
priorities to Lenders' interest in the Collateral. If the Collateral is
or may become subject to a landlord's Lien, the applicable Credit Party
shall, at the Administrative Agent's request, furnish the
Administrative Agent with a landlord's waiver satisfactory in form and
substance to the Administrative Agent.
(j) Maintenance of Existence and Qualifications. Each Credit Party 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.
(k) Payment of Trade Liabilities, Taxes, etc. Each Credit Party will (i)
timely file all required tax returns including any extensions; (ii)
timely pay all taxes, assessments 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 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 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 Credit Party 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.
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(l) Insurance. Each Credit Party 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 Administrative
Agent and the Lenders named as additional insureds), all in amounts and
of the type currently carried by such Credit Party. Within ten (10)
days after the Closing Date, Borrower will provide to the
Administrative Agent a detailed schedule describing all insurance
coverages maintained by or for any Credit Party together with copies of
the underlying policies. Within 20 days after the Closing Date, all
insurance policies covering Collateral shall be endorsed (i) to provide
for payment of losses to the Administrative 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
Administrative Agent and (iii) to provide for any other matters
specified in any applicable Security Document or which the
Administrative Agent may reasonably require.
(m) Performance on Borrower's Behalf. If any Credit Party fails to pay any
taxes, insurance premiums, expenses, attorneys' fees or other amounts
it is required to pay under any Credit Document, the Administrative
Agent may pay the same after notice of such payment by the
Administrative Agent is given to the Borrower Representative. Borrower
shall immediately reimburse the Administrative Agent for any such
payments and each amount paid by the Administrative Agent shall
constitute an Obligation owed hereunder that is due and payable on the
date such amount is paid by the Administrative Agent.
(n) Interest. Borrower hereby promises to each Lender to pay interest at
the Default Rate on all Obligations (including Obligations to pay fees
or to reimburse or indemnify any Lender) that Borrower has in this
Agreement promised to pay to such Lender and that are not paid when
due. Such interest shall accrue from the date such Obligations become
due until they are paid.
(o) Compliance with Agreements and Law. Each Credit Party 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. Each Credit Party will conduct its business and
affairs in compliance with all Laws applicable thereto.
(p) Environmental Matters; Environmental Reviews.
(i) Each Credit Party will comply in all material respects with
all Environmental Laws now or hereafter applicable to such
Credit Party 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
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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 Credit Party will promptly furnish to the Administrative
Agent all written notices of violation, orders, claims,
citations, complaints, penalty assessments, suits or other
proceedings received by any such Credit Party after the date
hereof, or of which it has notice after the date hereof,
pending or threatened against such Credit Party, the potential
liability of which exceeds $1,000,000 or could cause a
Material Adverse Change if resolved adversely against such
Credit Party, 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 Credit Party will promptly furnish to the Administrative
Agent all requests for information, notices of claim, demand
letters and other notifications received after the date hereof
by such Credit Party 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
Credit Party.
(q) Evidence of Compliance. Subject to the last sentence of Section 8(e),
each Credit Party will furnish to each Lender at such Credit Party's
expense all evidence which the Administrative 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 Credit Party in the Credit Documents, the satisfaction of all
conditions contained therein and all other matters pertaining thereto.
(r) Agreement to Deliver Security Documents. To further secure the
Obligations whenever requested by the Administrative Agent in its sole
and absolute discretion, the Credit Parties will deliver chattel
mortgages, security agreements, financing statements and other Security
Documents in form and substance satisfactory to the Administrative
Agent for the purpose of 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 Credit Party.
(s) Perfection and Protection of Security Interests and Liens. Each Credit
Party will from time to time deliver to the Administrative Agent any
financing statements, continuation statements, extension agreements and
other documents, properly completed and executed (and acknowledged when
required) by such Credit Party in form and substance satisfactory to
the Administrative Agent, which the Administrative Agent requests for
the purpose of perfecting, confirming or protecting any Liens or other
rights in any Collateral securing any Obligations.
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(t) Bank Accounts; Offset. To secure the repayment of the Obligations, each
Credit Party hereby grants to each Lender a security interest, a Lien
and a right of offset, each of which shall be in addition to all other
interests, Liens and rights of any Lender at common Law, under the
Credit Documents or otherwise, and each of which shall be upon and
against (i) any and all moneys, securities or other property (and the
proceeds therefrom) of such Credit Party now or hereafter held or
received by or in transit to any Lender from or for the account of such
Credit Party, whether for safekeeping, custody, pledge, transmission,
collection or otherwise, (ii) any and all deposits (general or special,
time or demand, provisional or final) of such Credit Party with any
Lender and (iii) any other credits and claims of such Credit Party at
any time existing against any Lender, including claims under
certificates of deposit. At any time and from time to time during the
continuance of any Event of Default, each Lender is hereby authorized
to foreclose upon, or to offset against the Obligations then due and
payable (in either case without notice to any Credit Party), any and
all items herein above referred to. The remedies of foreclosure and
offset are separate and cumulative, and either may be exercised
independently of the other without regard to procedures or restrictions
applicable to the other.
(u) 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 Administrative Agent,
execute and deliver to the Administrative Agent an instrument of
joinder pursuant to which each Subsidiary adopts, ratifies, confirms
and agrees to perform and be bound by Section 12 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 Administrative Agent in form and substance. EOTT
MLP will cause each such Subsidiary to deliver to the Administrative
Agent, simultaneously with its delivery of such an instrument of
joinder, written evidence satisfactory to the Administrative 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.
(v) Compliance with Agreements. Each Credit Party 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 Credit Party 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.
(w) 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 Credit
Parties to adhere to and conduct their respective risk management
activities, in accordance with such policies. The Borrower
Representative shall provide written notice to the Administrative Agent
of any changes to the Risk Management Policies that the EOTT Corp.
board of directors adopts promptly
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upon the EOTT Corp. board of directors' action thereon, and in no event
more than 30 days after approval by the EOTT Corp. board of directors
of such changes.
9. Negative Covenants.
To conform with the terms and conditions under which each Lender is
willing to have Extensions of Credit outstanding to Borrower, and to
induce each Lender to enter into this Agreement and make the Extensions
of Credit, the Credit Parties covenant and agree jointly and severally
that until the full and final payment of the Obligations and the
termination of this Agreement, unless the Majority Lenders have
previously agreed otherwise:
(a) Indebtedness. No Credit Party will in any manner owe or be liable for
Indebtedness except:
(i) the Obligations;
(ii) Indebtedness arising under Hedging Contracts permitted under
Section 9(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 Party owing to any other Borrower
Party;
(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 Party; 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 Party of trade payables
of any Borrower Party incurred and paid in the ordinary course
of business on ordinary trade terms;
(vi) Permitted Refinancing Indebtedness;
(vii) Permitted Repurchase Indebtedness;
(viii) Permitted Subordinated Debt;
(ix) Permitted Intercompany Indebtedness; and
(x) other Indebtedness not to exceed in the aggregate in respect
of all Credit Parties the principal amount of $2,000,000 at
any one time outstanding.
(b) Accounts. No Credit Party shall, without the prior written consent of
the Majority Lenders, open or maintain any commodity, investment,
securities or deposit accounts except for those listed on the
Disclosure Schedule.
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(c) Limitation on Liens. No Credit Party 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
Credit Party 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 Credit Party; (ii) Liens in favor of the
Administrative 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, 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 Administrative Agent; (ix) Liens in favor of any Person
providing financing to any Credit Party that constitutes Permitted
Refinancing Indebtedness on the Collateral released by the
Administrative Agent from the Liens of the Security Documents in
connection therewith; and (x) Permitted Liens. No Credit Party 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. So long as no Default then exists, the
Administrative Agent shall, at the Borrower Representative's request
and expense, execute a release, satisfactory to the Borrower and the
Administrative Agent, of any Collateral (i) as to which any Credit
Party is required to ▇▇▇▇▇ ▇ ▇▇▇▇ to a Person providing financing to
such Credit Party that constitutes Permitted Refinancing Indebtedness;
provided, however, in no event shall the Administrative Agent be
required to release any Collateral to the extent that the value of the
remaining Collateral on which the Lenders have a perfected, first
priority Lien (as such value is determined by the Administrative Agent
in its sole discretion) is less than 150% of the greater of (A) the
aggregate Obligations at such time and (B) the total of (1) the Maximum
Facility Amount plus (2) the outstanding aggregate maximum facility
amounts that may be outstanding under the Crude Oil Repo Agreement and
the Receivables Agreement at such time or (ii) that is sold pursuant to
a transaction approved by the Administrative Agent.
(d) Hedging Contracts. No Credit Party will be a party to or in any manner
be liable on any Hedging Contract, except Hedging Contracts entered
into by a Credit Party with the purpose and effect of fixing interest
rates on a principal amount of Indebtedness of such Credit Party that
is accruing interest at a variable rate; provided, however, that (A)
the aggregate notional amount of such contracts never exceeds one
hundred percent (100%) of the anticipated outstanding principal balance
of the Indebtedness to be hedged by such contracts or an average of
such principal balances calculated using a generally accepted method of
matching interest swap contracts to declining principal balances, (B)
the floating rate index of each such contract generally matches the
index used to determine the floating rates of interest on the
corresponding Indebtedness to be hedged by such
69
contract and (C) each such contract is with a counterparty who has, or
has a guarantor of the obligation of the counterparty who has (unless
such counterparty is an Affiliate of any Lender at the time such
contract is entered into) at the time the contract is made a Debt
Rating of at least A by S&P or A2 by ▇▇▇▇▇'▇ or is otherwise acceptable
to the Administrative Agent.
(e) Limitation on Mergers, etc. and Issuances of Securities. Except as
expressly provided in this Section, no Credit Party 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
(A) purchases of inventory and other property to be sold or used in the
ordinary course of business, (B) Investments permitted under Section
9(h) and (C) Permitted Acquisitions 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 9(f). However, any Person, other than a Borrower
Party, that is a Subsidiary of a Credit Party may be merged into or
consolidated with (i) another Subsidiary of such Credit Party, so long
as a Guarantor is the surviving business entity or (ii) such Credit
Party, so long as such Credit Party is the surviving business entity.
EOTT MLP will not issue any securities other than (i) limited
partnership interests and any options or warrants giving the holders
thereof only the right to acquire such interests and (ii) debt
securities permitted by Section 9. 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 Credit Party may issue additional
partnership or limited liability company interests or shares or other
securities to such Credit Party 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 Party which is a partnership will
allow any diminution of such Borrower Party's interest (direct or
indirect) therein.
(f) Limitation on Asset Sales. No Credit Party 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 Repo Agreement or any
replacement thereof that constitutes Permitted Repurchase
Indebtedness; and
(iii) any other property sold for fair consideration not in the
aggregate in excess of $2,000,000 in any Fiscal Year for all
Credit Parties, the sale of which will not
70
materially impair or diminish the value of the Collateral or
any Credit Party's financial condition, business or
operations.
No Credit Party 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 Credit
Party will discount, sell, pledge or assign any notes payable to it,
Accounts or future income. So long as no Default then exists, the
Administrative Agent will, at the Borrower Representative's request and
expense, execute a release, satisfactory to the Borrower Representative
and the Administrative Agent, of any Collateral so sold, transferred,
leased, exchanged, alienated or disposed of pursuant to subsection (i)
or (iii) above.
(g) Limitation on Distributions, Dividends and Redemptions. Except, in the
case of EOTT MLP, as permitted by Section 9(h), no Credit Party 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 Credit
Party 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 Credit Party (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 Credit Party, while any Loan,
Letter of Credit or Loan Commitment hereunder is outstanding.
Notwithstanding the foregoing, (i) Subsidiaries of a Borrower Party
shall not be restricted, directly or indirectly, from declaring and
paying dividends or making any other distributions to such Borrower
Party; (ii) no Credit Party shall be restricted from making capital
contributions of any nature to a Wholly Owned Subsidiary of such Credit
Party that is a Guarantor; and (iii) so long as no Default has occurred
and is continuing or would result therefrom, EOTT OLP shall be
permitted to (A) distribute cash to EOTT MLP, limited to the aggregate
amount of payments required to be made by EOTT MLP to EOTT Corp. for
credit extended by EOTT Corp. to EOTT MLP in connection with services
rendered or goods supplied in the ordinary course of business pursuant
to Section 6.4(b) of the Amended and Restated Agreement of Limited
Partnership of EOTT MLP, as amended and (B) distribute EOTT OLP
Available Cash for each Fiscal Quarter in accordance with the EOTT OLP
Partnership Agreement, limited in the case of this subclause (B) to the
aggregate amount of Restricted Payments, if any, that EOTT MLP would be
permitted to make with respect to such Fiscal Quarter pursuant to
Section 9(h).
(h) Limitation on Restricted Payments. EOTT MLP will not declare, pay or
make any Restricted Payments unless each of the following conditions is
satisfied and would remain satisfied after giving pro forma effect to
such Restricted Payments: (i) there shall not have occurred or be
continuing any Default hereunder; (ii) Consolidated Net Worth shall be
not less than the Minimum Required Consolidated Net Worth; (iii) the
aggregate Obligations in existence at the Closing Date shall have been
permanently reduced to an aggregate amount not exceeding $300,000,000,
and Standard Chartered's commitments under the Credit Documents shall
have been permanently terminated to the extent of such reduction; and
(iv) the matters described under the caption "Enron Related Matters" in
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Section 7(t) of the Disclosure Schedule shall have been discharged,
released or otherwise resolved to the satisfaction of the
Administrative Agent.
(i) Limitation on New Businesses, Investments and Capital Expenditures. No
Credit Party 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
acquisitions of or capital contributions to or other Investments in any
Person, other than Permitted Investments and Permitted Acquisitions,
(iv) make any acquisitions of properties other than Permitted
Acquisitions or (v) make or incur any Capital Expenditures other than
Permitted Capital Expenditures. All transactions permitted under this
Section are subject to Section 9(f).
(j) Limitation on Credit Extensions. Except for Permitted Investments and
Hedging Contracts permitted under Section 9(d), no Credit Party 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 Credit Party 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.
(k) Transactions with Affiliates. No Credit Party will engage in any
material transaction with Enron or any of its Affiliates, except
transactions among EOTT MLP and Wholly Owned Subsidiaries of EOTT MLP
on terms that are no less favorable to such Wholly Owned Subsidiaries
thereto than those which would have been obtainable at the time in
arm's-length transactions with Persons other than EOTT MLP, subject to
the other provisions of this Agreement. Nothing in this Section 9(k)
will preclude the Credit Parties from effecting a resolution of any of
the matters described under the caption "Enron Related Matters" in
Section 7(t) of the Disclosure Schedule in the exercise of their
reasonable business judgment, it being understood that no such
resolution or the effect thereof on the Credit Parties will prejudice
or in any other way adversely affect the rights of the Lenders
hereunder.
(l) Prohibited Contracts. Except as expressly provided for in the Credit
Documents and as described in the Disclosure Schedule, no Credit Party
will, directly or indirectly, enter into, create or otherwise allow to
exist any contract or other consensual arrangement restricting the
ability of any Subsidiary of EOTT MLP, including but not limited to any
Borrower Party to: (i) pay dividends or make other distributions, (ii)
purchase or redeem equity interests held in it by any Borrower Party 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
Party or EOTT MLP or (v) create, incur, assume or suffer to exist any
Lien upon its property or assets to secure the Obligations. No Credit
Party 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 Credit Party will amend, modify, or
permit any amendment or modification to (i) its
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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 Administrative Agent or any other Lender Party under or acquired
pursuant to any Security Documents. 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 Credit
Party shall prepay the principal of, or purchase, redeem or otherwise
acquire or retire for value, any of the EOTT Senior Notes.
(m) Open Positions. The Credit Parties shall at all times limit their Open
Positions in accordance with the Risk Management Policies as from time
to time in effect.
(n) Redelivery of Borrowing Base Report. If any contract gives rise to an
Eligible Receivable that is reflected in a Borrowing Base Report
representing the obligation to deliver crude oil in the month next
succeeding the month in which the Borrowing Base Report is delivered,
and such contract is modified, sold or exchanged in any way that would
negatively affect the Borrowing Base, then the Borrower Representative
shall immediately (i) deliver to the Administrative Agent a revised
Borrowing Base Report satisfactory to the Administrative Agent and (ii)
make any prepayment as may be required under Section 2(g) resulting
from such reduced Borrowing Base.
(o) Minimum Consolidated Net Income (Loss), Minimum Consolidated EBITDA and
Minimum Consolidated Net Worth. Borrower shall not permit any of
Consolidated Net Income (Loss), Consolidated EBITDA and Consolidated
Net Worth to be less than (and in the case of Consolidated Net Income
(Loss) for the Fiscal Quarter ended March 31, 2002, for the loss to be
greater than) the following for each of the Fiscal Quarters set forth
below (dollar amounts expressed in thousands):
Minimum Consolidated Minimum Minimum Consolidated
Fiscal Quarter Ended Net Income Consolidated EBITDA Net Worth
------------------------------- -------------------- ------------------- --------------------
(in thousands)
March 31, 2002................. $ (7,650) $ 12,500 $ 33,000
June 30, 2002.................. 8,000 27,000 42,000
September 30, 2002............. 1,250 19,000 45,000
December 31, 2002.............. 650 18,000 47,500
(p) Books and Records. No Credit Party shall permit any material change in
the accounting treatment or reporting practices of each Credit Party
from those used in preparation of the financial statements referenced
in Section 8(d), except as required or permitted under GAAP.
10. 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 Borrowings or
Matured L/C Obligations when due and payable;
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(b) Any Credit Party 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 Credit Party fails to duly observe, perform or comply with any
covenant, agreement or provision of Section 2(g), Section 4(c), Section
8(f), Section 8(l) or Section 9;
(e) Any Credit Party 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 Administrative
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 Credit Party 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 7(c) for any reason
other than its release or subordination by all Lenders;
(g) Any Credit Party shall default in the payment when due of any principal
of or interest on any of its other Indebtedness in excess of $1,000,000
in the aggregate (other than Indebtedness the validity of which is
being contested in good faith by appropriate proceedings and for which
adequate reserves with respect thereto are maintained on the books of
such Credit Party in accordance with GAAP), or any event specified in
any note, agreement, indenture, mortgage, deed of trust, security
agreement or other document evidencing or relating to any such
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 Indebtedness (or a trustee or agent on
behalf of such holder or holders) to cause, such 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 Credit Party:
(i) has entered against it a judgment, decree or order for relief
by a court of competent jurisdiction in an involuntary
proceeding commenced under any applicable bankruptcy,
insolvency or other similar law of any jurisdiction now or
hereafter in effect, including the federal Bankruptcy Code, as
from time to time amended, or has any such proceeding
commenced against it, in each case, which remains undismissed
for a period of 60 days;
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(ii) commences a voluntary case under any applicable bankruptcy,
insolvency or similar law now or hereafter in effect,
including the federal Bankruptcy Code, as from time to time
amended; or applies for or consents to the entry of an order
for relief in an involuntary case under any such law; or makes
a general assignment for the benefit of creditors; or is
generally unable to pay (or admits in writing its inability to
so pay) its debts as such debts become due; or takes
corporate, partnership, limited liability company or other
action to authorize any of the foregoing;
(iii) has entered against it the appointment of or taking of
possession by a receiver, liquidator, assignee, custodian,
trustee, sequestrator or similar official of any part of the
Collateral of a value in excess of $1,000,000 in a proceeding
brought against or initiated by it, and such appointment or
taking of possession is neither made ineffective nor
discharged within 60 days after the making thereof, or such
appointment or taking possession is at any time consented to,
requested by or acquiesced to by it;
(iv) has entered against it a final judgment for the payment of
money in excess of $1,000,000 (in each case not covered by
insurance satisfactory to the Administrative Agent in its sole
discretion), unless the same is stayed or discharged within 30
days after the date of entry thereof or an appeal or
appropriate proceeding for review thereof is taken within such
period and a stay of execution pending such appeal is
obtained;
(v) suffers a writ or warrant of attachment or any similar process
to be issued by any Tribunal against all or any substantial
part of its assets or any part of the Collateral of a value in
excess of $1,000,000, and such writ or warrant of attachment
or any similar process is not stayed or released within 30
days after the entry or levy thereof or after any stay is
vacated or set aside;
(i) Any Change in Control occurs;
(j) Any Borrower Party (i) maintains in effect Risk Management Policies
that are not Currently Approved by the Administrative Agent or (ii)
fails to adhere to or conduct its risk management activities, or cause
the other Credit Parties 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; or
(l) At any time the Administrative Agent shall notify the Borrower
Representative that Lenders, in the exercise of their sole discretion,
deem themselves to be undersecured with respect to the Obligations, and
after the passage of such period (if any) as the Administrative Agent
may provide in such notice, the Credit Parties shall have failed to
provide additional Collateral sufficient, in the sole discretion of the
Administrative Agent, to adequately secure payment and performance of
all Obligations in full.
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11. RIGHTS AND REMEDIES.
(a) Upon the occurrence and during the continuance of any Event of Default
and notice thereof from the Administrative Agent and at any time
thereafter, in addition to all other rights and remedies of the
Lenders, whether provided under the UCC or other applicable law, this
Agreement, the other Credit Documents or otherwise, the Lenders shall
have the following rights and remedies which may be exercised, at the
Lenders' discretion, at any time or times with or without judicial
process, with or without the assistance of others and without notice to
or consent by any Credit Party except as such notice or consent is
expressly provided for hereunder or required by law:
(i) The Administrative Agent, at its discretion and without
limitation, may enter upon any premises on or in which the
Collateral may be located and take possession thereof and
remove all or any of the Collateral from such premises for the
purposes of effecting the sale, foreclosure or other
disposition thereof or for any other purpose. Each Credit
Party shall, at the request of the Administrative Agent,
assemble the Collateral at such place or places as the
Administrative Agent designates in its request. The
Administrative Agent shall have the right to take possession
of the Collateral or any portion thereof pursuant to the UCC
or other applicable law. In the event the Administrative Agent
institutes an action to recover any Collateral, or seeks
recovery of any Collateral by way of prejudgment remedy, each
Credit Party waives the posting of any bond which might
otherwise be required.
(ii) The Administrative Agent may, at its discretion and without
limitation, (A) collect, foreclose, receive, appropriate, set
off and realize upon any and all Collateral, or (B) sell,
lease, transfer, assign, deliver or otherwise dispose of any
and all Collateral (including, without limitation, entering
into contracts with respect thereto and by public or private
sales at any exchange, broker's board, premises of any Credit
Party, office of the Administrative Agent or elsewhere) at
such prices or terms as the Administrative Agent may deem
reasonable, for cash, upon credit or for future delivery, with
any Lender having the right to purchase the whole or any part
of the Collateral at any such public sale, all of the
foregoing being free from any right or equity of redemption of
any Credit Party, which right or equity of redemption is
hereby expressly waived and released by each Credit Party. If
any of the Collateral is sold or leased by a Lender upon
credit terms or for future delivery, the Obligations shall not
be reduced as a result thereof until indefeasible payment
therefor is finally collected by such Lender. Ten (10) days
prior notice by the Administrative Agent to the Borrower
Representative designating the time and place of any public
auction of the Collateral or the time after which any private
sale or other disposition of the Collateral may take place
shall be deemed to be reasonable notice thereof, and each
Credit Party waives any other notice.
(iii) The Administrative Agent may apply any cash held by the
Administrative Agent as Collateral (including without
limitation cash held in the Collateral Account) and the cash
proceeds of the Collateral actually received by the
Administrative Agent from any sale, lease, foreclosure or
other disposition of the Collateral to payment of (A) all
costs and expenses of every kind or nature incurred or paid by
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the Administrative Agent in connection therewith, including,
without limitation, reasonable attorneys' fees and a
reasonable estimate of the allocated cost of the
Administrative Agent's in-house counsel and legal staff, and
(B) all and any of the other Obligations, in whole or in part
and in such order as the Administrative Agent may elect,
whether then due or not due. The Credit Parties shall be
liable to all Lender Parties for the payment on demand of all
such costs and expenses and any deficiency with interest at
the Alternate Base Rate, together with any reasonable
attorneys' fees if placed with an attorney for collection or
enforcement. The costs and expenses incurred or paid by the
Administrative Agent with respect to any sale, lease,
foreclosure or other disposition of the Collateral may
include, without limitation, (A) expenses of retaking,
holding, assembling, preparing for sale or lease, advertising,
storing, repairing, completing, selling, leasing, foreclosing
or otherwise disposing of the Collateral, (B) premiums on
bonds and undertakings, (C) sales, use and other taxes, (D)
fees and expenses of custodians, warehousemen, brokers,
appraisers, auctioneers, sheriffs and others, (E) legal
expenses and attorneys' fees, (F) travel and hotel expenses,
(G) a reasonable estimate of the allocated cost of the
Administrative Agent's in-house counsel and legal staff and
(H) all other expenses which may be incurred or paid by the
Administrative Agent in attempting to collect the Obligations
and to foreclose upon the Collateral.
(b) The Administrative Agent shall have the right at its sole discretion to
determine which rights and remedies and in which order any of the same
are to be exercised, and the Administrative Agent may at any time
pursue, relinquish, subordinate, modify or take any other action with
respect thereto, without in any way modifying or affecting any of the
Obligations. The Administrative Agent may, at any time or times,
proceed directly against any or all Credit Parties or any other
guarantor or other obligor (each, an "ADDITIONAL GUARANTOR") on or in
respect of the Obligations to enforce payment of the Obligations and
shall not be required to take any action of any kind to preserve,
collect or protect the Lenders' or any Credit Party's rights in the
Collateral.
(c) All rights, remedies, powers and benefits granted to the Lenders by the
Credit Parties or any Additional Guarantor under this Agreement, the
other Credit Documents or any oral or other written agreement, or
granted by applicable law, whether expressly granted or implied in law,
are cumulative, not exclusive and enforceable alternatively,
successively, or concurrently on any one or more occasions and shall
include, without limitation, the right to apply to a court of equity
for an injunction to restrain a breach or threatened breach by any
Credit Party or any Additional Guarantor of this Agreement, the other
Credit Documents or such other agreements.
12. GUARANTY.
(a) Each Guarantor hereby jointly and severally, irrevocably, absolutely
and unconditionally guarantees to the 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:
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(i) All obligations of Borrower to make reimbursements and other
payments to Lenders in respect of Letters of Credit issued;
(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 Borrower to the 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 post-petition
interest, expenses and other Liabilities of Borrower described above in
this subsection (a), or below in the following subsection (b), which
would be owed by Borrower 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 Party.
(b) If Borrower shall for any reason fail to pay any Obligation described
in Section 12(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 Administrative Agent, pay such Obligation in full to
the Administrative Agent.
(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
Administrative Agent, and the Guarantors will forthwith upon demand by
the Administrative Agent pay to the Administrative Agent, the amount of
any and all expenses, including fees and disbursements of the
Administrative Agent's counsel and of any experts or agents retained by
the Administrative Agent that the Administrative Agent may incur as a
result of such failure.
(d) As between the Guarantors and Lenders, this guaranty shall be
considered a primary and liquidated Liability of the Guarantors.
(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 Lender to exercise or to
exhaust any right or remedy or to bring any right or remedy or
action against Borrower, the Collateral or any other security
available to the 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;
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(iii) the existence of any claim, set-off, or other rights that any
Borrower Party 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 Party, 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 Party 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, Borrower.
(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 or insolvency of any Borrower Party.
(g) Each Guarantor hereby waives promptness, diligence, presentment, demand
of payment, protest, order and receipt of any notice in connection with
its obligations hereunder.
13. ADMINISTRATIVE AGENT.
(a) Appointment and Authority. . Each Lender Party hereby irrevocably
authorizes the Administrative Agent, and the Administrative 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 Administrative Agent by the terms hereof
or thereof, together with all other powers reasonably incidental
thereto. The relationship of the Administrative Agent to the other
Lender Parties is only that of one commercial lender acting as the
Administrative Agent for others, and nothing in the Credit Documents
shall be construed to constitute the Administrative Agent a trustee or
other fiduciary for any Lender Party or any holder of any participation
in a Note nor to impose on the Administrative Agent duties and
obligations other than those 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 Administrative Agent, the Administrative
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 Lenders (including itself);
provided, however, that the Administrative 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 Administrative Agent from the
Borrower Representative of any communication calling for action on the
part of the Lenders or upon notice from the Borrower Representative or
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any Lender to the Administrative Agent of any Default or Event of
Default, the Administrative Agent shall promptly notify each other
Lender thereof.
(b) Exculpation, the Administrative Agent's Reliance, Etc. Neither the
Administrative 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 Administrative
Agent (i) may treat the payee of any Note as the holder thereof until
the Administrative Agent receives written notice of the assignment or
transfer thereof in accordance with this Agreement, signed by such
payee and in form satisfactory to the Administrative Agent; (ii) may
consult with legal counsel (including counsel for Borrower),
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; (iii) 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; (iv) 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
Credit Party or to inspect the property (including the books and
records) of any Credit Party; (v) 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; (vi) may rely
upon the representations and warranties of each Credit Party or Lender
Party in exercising its powers hereunder; and (vii) 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 Borrower 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 Lender agrees to indemnify the Administrative
Agent (to the extent not reimbursed by Borrower within ten (10) days
after demand) from and against such 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 Administrative
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
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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
Administrative Agent; provided, however, only that no Lender shall be
obligated under this Section to indemnify the Administrative Agent for
that portion, if any, of any Liabilities and Costs proximately caused
by the Administrative Agent's own individual gross negligence or
willful misconduct, as determined in a final judgment. Cumulative of
the foregoing, each Lender agrees to reimburse the Administrative Agent
promptly upon demand for such Lender's Percentage Share of any costs
and expenses to be paid to the Administrative Agent by Borrower under
Section 1 to the extent that the Administrative Agent is not timely
reimbursed for such expenses by Borrower as provided in such section.
As used in this Section the term "THE ADMINISTRATIVE 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 Lender. In its capacity as a Lender, the Administrative Agent
shall have the same rights and obligations as any Lender and may
exercise such rights as though it were not the Administrative Agent.
The Administrative Agent may accept deposits from, lend money to, act
as trustee under indentures of and generally engage in any kind of
business with any Credit Party or their Affiliates, all as if it were
not the Administrative Agent hereunder and without any duty to account
therefor to any other 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 Borrower Party or otherwise, obtain payment of a portion of the
aggregate Obligations owed to it which, taking into account all
distributions made by the Administrative Agent under Section 3(a),
causes such Lender Party to have received more than it would have
received had such payment been received by the Administrative Agent and
distributed pursuant to Section 3(a), 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 as provided for in Section 3(a) and (ii) such
other adjustments shall be made from time to time as shall be equitable
to ensure that the Administrative Agent and all Lender Parties share
all payments of Obligations as provided in Section 3(a); 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. Borrower expressly consents to
the foregoing arrangements and agrees 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 8(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 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
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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 Administrative 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 Administrative Agent in
good faith determines that there is any dispute among the Lender
Parties about how such funds should be distributed, the Administrative
Agent may choose to defer distribution of the funds that are the
subject of such uncertainty or dispute. If the Administrative Agent in
good faith believes that the uncertainty or dispute will not be
promptly resolved, or if the Administrative Agent is otherwise required
to invest funds pending distribution to the Lender Parties, the
Administrative 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 Administrative
Agent for distribution to the Lender Parties (other than to the Person
who is the Administrative Agent in its separate capacity as a Lender
Party) shall be held by the Administrative Agent pending such
distribution solely as the Administrative Agent for such Lender
Parties, and the Administrative 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 Credit Party shall
be entitled to rely on any such provision or assert any such provision
in a claim or defense against any Lender (other than in relation to the
reference to Section 8(i) contained in Section 13(f) or the right to
reasonably approve a successor the Administrative Agent under Section
13(i)). The Lender Parties may waive or amend such provisions as they
desire without any notice to or consent of Borrower or any other Credit
Party.
(i) Resignation. The Administrative Agent may resign at any time by giving
written notice thereof to the Lenders and the Borrower Representative.
Each such notice shall set forth the date of such resignation. Upon any
such resignation, the Majority Lenders shall have the right to appoint
a successor the Administrative Agent. A successor must be appointed for
any retiring the Administrative Agent, and such the Administrative
Agent's resignation shall become effective when such successor accepts
such appointment. If, within 30 days after the date of the retiring the
Administrative Agent's resignation, no successor the Administrative
Agent has been appointed and has accepted such appointment, then the
retiring the Administrative Agent may appoint a successor the
Administrative 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 Administrative Agent hereunder by a successor
the Administrative Agent, the retiring the Administrative Agent shall
be discharged from its duties and obligations under this Agreement and
the other Credit Documents. After any retiring the Administrative
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 Administrative Agent under the Credit
Documents.
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(j) Other Lender Parties. None of the Lender Parties in such capacities,
other than the Administrative 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 Lenders
or L/C Issuer, as applicable) under or in connection with this
Agreement or under any of the other Credit Documents. The relationship
between Borrower, on the one hand, and the Administrative Agent and
such other Lender Parties, on the other hand, shall be solely that of
borrower and lender. Neither the Administrative Agent nor any other of
the Lender Parties shall have any fiduciary responsibilities to
Borrower or any of its Affiliates. Neither the Administrative Agent nor
any of the other Lender Parties undertakes any responsibility to
Borrower or any of its Affiliates to review or inform any Borrower
Party of any matter in connection with any phase of any Borrower
Party's or such Affiliate's business or operations.
14. ASSIGNMENTS AND PARTICIPATIONS.
(a) None of the Credit Parties may, without the consent of the
Administrative Agent, assign or delegate any of its respective rights
or obligations under this Agreement or any other Credit Document. Each
Lender may, without the consent of any other Lender Party or any Credit
Party, assign any or all of its rights and obligations under this
Agreement to any Eligible Assignee.
(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 Lender hereunder
and (ii) the assignor 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 Lender's rights and obligations under this Agreement, such Lender
shall cease to be a party hereto).
(c) By executing and delivering an assignment, the assignor 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 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 Lender makes no representation or warranty
and assumes no responsibility with respect to the financial condition
of any Credit Party or the performance or observance by any Credit
Party of any of its obligations under 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 Lender and based on
such documents and information as it shall deem
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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 Lender.
(d) Upon its receipt of an assignment executed by a Lender and an assignee,
together with the Note of such assignor Lender, the Administrative
Agent shall give prompt notice thereof to the Borrower Representative.
Within two Business Days after its receipt of such notice, Borrower
shall execute and deliver to the assignor Lender and the assignee in
exchange for the surrendered Note, new Notes to the order of the
assignor Lender and such assignee, respectively. Such new Notes shall
be in an aggregate principal amount equal to the aggregate principal
amount of such surrendered Note. The new Notes shall be dated the
closing date of such assignment and shall otherwise be in substantially
the form of Exhibit A.
(e) The Administrative 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 Lenders, the
principal amount owing to each 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 Lender may treat each person, corporation,
partnership, limited liability company or other entity whose name is
recorded in the Register as a Lender hereunder for the purposes of this
Agreement. The Register shall be available for inspection by the
Borrower Representative or any Lender at any reasonable time and from
time to time upon reasonable prior notice.
(f) Any Lender may sell participations to one or more Assignees in or to
all or a portion of its rights and obligations under this Agreement
(including, without limitation, all or a portion of the Borrowings
owing to it under such Lender's Note); provided, however that (i) such
Lender's obligations under this Agreement shall remain unchanged, (ii)
such Lender shall remain solely responsible to the other parties hereto
for the performance of such obligations, (iii) such Lender shall remain
the holder of such Lender's Note for all purposes of this Agreement,
(iv) the Borrower Representative shall continue to deal solely and
directly with such Lender in connection with such Lender's rights and
obligations under this Agreement and (v) in any proceeding under any
bankruptcy, insolvency or similar proceeding in respect of any Borrower
Party or any other Credit Party, such 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 Lender
(whether such rights or obligations are for such Lender's own account
or for the account of any participant).
(g) Each 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 Credit Parties or their Affiliates
furnished to such Lender by or on behalf of the Credit Parties,
provided that such assignees have agreed to be bound by the
confidentiality provisions in Section 16(p).
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15. INDEMNIFICATION.
(a) Subject to Section 15(b), the Credit Parties, 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) any L/C Issuer's compliance with a completed Letter of Credit
Request that the Borrower Representative provides to any L/C
Issuer by facsimile, telecopier or similar means of electronic
transmission and that such L/C Issuer believes to be genuine;
(ii) any L/C Issuer's issuance of or performance under any Letter
of Credit;
(iii) the making of Loans hereunder by the Lenders;
(iv) any of the Collateral, the Credit Documents, the Original EOTT
OLP Reimbursement Agreement, the Existing Agreement, the L/C
Agreement, the SCTSC Agreements, the L/C Agreement Letters of
Credit, the Cash Collateralized Letters of Credit, the
Original EOTT OLP Reimbursement Agreement Letters of Credit,
the Existing Letters of Credit, the Existing Loans 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 a 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 gross negligence or willful misconduct, as
determined in a final judgment. If any Person (including any Credit
Party or any of its Affiliates) ever alleges such gross negligence or
willful misconduct by a 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 a Lender Party but also
to each director, officer, agent, attorney, employee, representative
and affiliate of such Lender Party.
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16. 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" 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 a
Lender Party of amounts to be paid under Section 3 or any other matters
that are to be determined hereunder by a Lender Party (such as LIBOR,
Business Day, Interest Period or Reserve Percentage) shall, in the
absence of manifest error, be conclusive and binding. Unless otherwise
expressly provided herein or unless the Majority 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 Lenders, whether on their own behalf and/or on
behalf of others, may continue to hold the Collateral, and regardless
of the value thereof, each Credit Party 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 Credit Party 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
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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 Credit
Parties at all times. The Credit Parties 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
Credit Parties hereby agree jointly and severally to indemnify and hold
each Lender harmless from and with respect to any and all such claims,
Liabilities, causes of action and demands by any Person.
(h) Subject to Section 13(f), upon the occurrence and during the
continuance of any Event of Default hereunder, each 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 Lender to or for the
credit or the account of any Credit Party against any and all of the
Obligations which are then liquidated and matured. Such Lender agrees
promptly to notify the Administrative Agent and the Borrower
Representative after any such set-off and application is made by such
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 Lenders under this Section are in addition to other rights and
remedies (including, without limitation, other rights of set-off) which
the Lenders may have.
(i) No Lender shall be liable to any Credit Party for (i) the performance
of any transaction between any Credit Party or one or more of its
Affiliates and a Beneficiary that underlies a Letter of Credit, (ii)
any act or omission of any Person unless due to the gross negligence or
willful misconduct of such Lender, such Lender's own branches or such
Lender's agents, (iii) 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 Lender, such Lender's
own branches or such Lender's agents, (iv) 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 Lender, such
Lender's own branches or such Lender's agents, or (v) the genuineness,
falsification, or effect of any document which appears on due
examination to be regular on its face.
(j) The Credit Parties agree that no Lender, its Affiliates or its
correspondents shall be responsible for: (i) the failure of any Letter
of Credit Request to bear any reference to any Letter of Credit, or
inadequate reference in any Letter of Credit Request to the relevant
Letter of Credit, or failure of documents (other than documents
expressly required to be presented under the relevant Letter of Credit)
to accompany any Letter of Credit Request at negotiation, or failure of
any Person to note the amount of any Letter of
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Credit Request on the reverse of the relevant Letter of Credit, or to
surrender or to take up any Letter of Credit or to forward documents
apart from Letter of Credit Requests as required by the terms of the
relevant Letter of Credit, each of which provisions, if contained in
any Letter of Credit itself, may be waived by L/C Issuer; (ii) errors,
omissions, interruptions or delays in transmissions, or delivery of any
messages, by mail, facsimile, telex, cable, telegraph, wireless or
other teletransmission or by oral instructions, whether or not they may
be in cipher; (iii) the existence, character, quality, quantity,
condition, packing, value or delivery of any property purporting to be
represented by documents; (iv) any difference in character, quality,
quantity, condition, packing, value or delivery of such property from
that expressed in documents; (v) any breach of contract between any
Credit Party and any Beneficiary or any other Person or any dispute as
to the use which may be made of any Letter of Credit or funds obtained
thereunder by any Beneficiary or other party; (vi) the validity,
sufficiency, or genuineness of any Letter of Credit Request or other
document; and (vii) the time, place, manner or order in which shipment
is made.
(k) No Lender shall be responsible for any act, error, neglect or default,
omission, insolvency or failure in business of its correspondents.
(l) The occurrence of any one or more of the contingencies or events
referred to in the U.C.P. or in the preceding clauses of Sections 16(j)
and (k) shall not affect, impair, or prevent the vesting of any
Lender's rights or powers hereunder or the enforceability of any
Obligations.
(m) Each Credit Party hereby irrevocably and unconditionally submits, for
itself and its property, to the nonexclusive jurisdiction of any 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 Credit Party
hereby irrevocably and unconditionally agrees that all claims in
respect of any such action or proceeding may be heard and determined in
any such New York State court or, to the extent permitted by law, in
such federal court and consents that any such 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 Credit Party 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 CREDIT PARTY 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.
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(n) The U.C.P. shall be binding upon Borrower and each L/C Issuer with
respect to each Letter of Credit issued by L/C Issuer except to the
extent otherwise expressly agreed, if any.
(o) The Administrative Agent and each L/C Issuer may rely on the written
notices, requests, waivers and consents of the Borrower Representative,
its officers and designated agents, including, without limitation, any
Letter of Credit Requests or requests for Borrowings under the Notes,
as the binding actions of Borrower hereunder. Any such notices,
requests, waivers or consents received by the Administrative Agent and
each L/C Issuer 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 Administrative Agent or
any L/C Issuer to the Borrower Representative hereunder will be
received by the Borrower Representative on behalf of Borrower. In
addition, the Administrative Agent and each L/C Issuer may receive from
the Borrower Representative, on behalf of Borrower, all amounts
required to be paid by Borrower and may pay to the Borrower
Representative for Borrower's account, all amounts required to be paid
by or on behalf of any Lender to Borrower; provided, however that
neither the Administrative Agent nor any L/C Issuer shall 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 Credit Party arising from such application by the
Borrower Representative.
(p) 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 Credit Party;
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 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.
(q) Concurrently with the Closing Date, and without the necessity of any
further act or evidence, other than consummation of the transactions
contemplated hereby, (i) the Obligations under the Existing Agreement
are hereby renewed and extended in full, as amended and restated, (ii)
the Existing Letters of Credit are hereby deemed to be issued and
outstanding Letters of Credit hereunder, and (iii) the Existing Loans
are hereby deemed to be outstanding Loans hereunder, as evidenced by
the Notes and as amended, renewed and extended pursuant hereto.
(r) Waivers and Amendments; Acknowledgments.
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(i) No failure or delay (whether by course of conduct or
otherwise) by any Lender 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
Credit Party shall in any case of itself entitle any Credit
Party 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 signed by (A) if such
party is a Credit Party, by such party, (B) if such party is
the Administrative Agent or an LC Issuer, by such party and
(C) if such party is a Lender, by such Lender. Notwithstanding
the foregoing or anything to the contrary herein, the
Administrative 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 the Percentage Share of any Lender or the maximum
amount any such Lender is committed to fund in respect of LC
Obligations and Loans or subject such Lender to any additional
obligations, (B) reduce any fees payable to such Lender
hereunder, or the principal of, or interest on, such Lender's
Note, (C) change any date fixed for any payment of any such
fees, principal or interest, (D) amend the definition herein
of "Borrowing Base" or any of the terms used in that
definition, (E) amend the definition herein of "Majority
Lenders" or otherwise change the aggregate amount of
Percentage Shares required for the Administrative Agent, the
Lenders or any of them to take any particular action under the
Credit Documents, (F) release Borrower from its obligation to
pay the Notes or any Guarantor from its guaranty of such
payment, or (G) except as otherwise expressly provided for in
Section 9(c), release any Collateral.
(ii) Each Borrower Party 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 Administrative Agent
or any other 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 Credit Party with
respect to any Credit Document or the
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transactions contemplated thereby, (E) the relationship
pursuant to the Credit Documents between Borrower and the
other Credit Parties, 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 Credit
Party and any Lender Party, (G) the Administrative Agent is
not Borrower's agent, but the Administrative Agent for
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 relied upon
the truthfulness of the acknowledgments in this Section in
deciding to execute and deliver this Agreement and to become
obligated hereunder.
(iii) Each Lender Party hereby represents that it will acquire its
Note for its own account in the ordinary course of its
commercial lending business; provided, however, the
disposition of such Lender's property shall at all times be
and remain within its control and, in particular and without
limitation, such Lender may sell or otherwise transfer its
Note, any participation interest or other interest in its
Note, or any of its other rights and obligations under the
Credit Documents subject to compliance with the provisions
hereunder and applicable Law.
(s) The Lender Parties, the Credit Parties 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 Credit Party 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 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
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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 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 Credit Parties (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 Code (the "TEXAS FINANCE CODE") as
amended, to the extent that the Texas Finance Code is mandatorily
applicable to any 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. In no event shall Chapter
346 of the Texas Finance Code apply to this Agreement, any other Credit
Document or any transactions or loan arrangement provided or
contemplated hereby or thereby.
(t) The Credit Parties 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 Credit Party 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.
(u) All of the Credit Parties' 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 making or
granting of the Loans and the delivery of the Notes and the other
Credit Documents and shall further survive until all of the Obligations
are paid in full to each
92
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 Credit Party 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 Credit Parties 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 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.
[Remainder of page intentionally left blank.]
93
IN WITNESS WHEREOF, the parties hereto have executed this Second
Amended and Restated Reimbursement and Security Agreement as of the day and year
first above written.
EOTT ENERGY OPERATING LIMITED PARTNERSHIP,
as a Borrower Party 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 Party
By: EOTT ENERGY GENERAL PARTNER, L.L.C., its
General Partner
By:
-------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇
Title: Treasurer
EOTT ENERGY LIQUIDS, L.P.,
as a Borrower Party
By: EOTT ENERGY GENERAL PARTNER, L.L.C., its
General Partner
By:
-------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇
Title: Treasurer
EOTT ENERGY PIPELINE LIMITED PARTNERSHIP,
as a Borrower Party
By: EOTT ENERGY GENERAL PARTNER, L.L.C., its
General Partner
By:
-------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇
Title: Treasurer
EOTT ENERGY PARTNERS, L.P.,
as a Guarantor
By: EOTT ENERGY CORP., its General Partner
By:
-------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇
Title: Treasurer
EOTT ENERGY GENERAL PARTNER, L.L.C.,
as a Guarantor
By:
-------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇
Title: Treasurer
EOTT ENERGY CORP.,
as Original Credit Party
By:
-------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇
Title: Treasurer
Address for each Credit Party:
Attention: Vice President & General Counsel
By courier: ▇▇▇▇ ▇. ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
By mail: ▇.▇. ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Phone: ▇▇▇-▇▇▇-▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
STANDARD CHARTERED BANK,
a Administrative Agent, L/C Issuer and a Lender
By:
------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇
Title: Senior Vice President
By:
------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Senior Vice President
SCHEDULE I
L/C AGREEMENT LETTERS OF CREDIT
THIS SCHEDULE HAS BEEN OMITTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT THAT HAS BEEN FILED SEPARATELY WITH THE SEC
1 page has been omitted.
SCHEDULE II
CASH COLLATERALIZED LETTERS OF CREDIT
[* One page has been omitted]
SCHEDULE III
ORIGINAL EOTT OLP REIMBURSEMENT AGREEMENT LETTERS OF CREDIT
[* 3 pages have been omitted]
SCHEDULE IV
EXISTING LETTERS OF CREDIT
[* 7 Pages have been omitted]
SCHEDULE V
DISCLOSURE SCHEDULE
*CERTAIN PORTIONS OF THIS DISCLOSURE SCHEDULE HAVE
BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL
TREATMENT THAT HAS BEEN FILED SEPARATELY WITH THE SEC
SECTION 7(b)
QUALIFICATION, GOOD STANDING
AND AUTHORIZATION TO DO BUSINESS
Set forth below the name of each entity listed below are the
jurisdictions in which that entity is qualified to do business:
EOTT ENERGY CORP.
Alabama Nebraska
Arizona Nevada
Arkansas New Jersey
California New Mexico
Colorado New York
Connecticut North Carolina
Delaware North Dakota
Florida Ohio
Georgia Oklahoma
Illinois Oregon
Indiana Pennsylvania
Iowa Rhode Island
Kansas South Carolina
Louisiana South Dakota
Maryland Tennessee
Massachusetts Texas
Michigan Utah
Minnesota Virginia
Mississippi Washington
Missouri West Virginia
Montana Wisconsin
Wyoming
EOTT ENERGY PARTNERS, L.P.
Delaware Texas
EOTT ENERGY GENERAL PARTNER, L.L.C.
Delaware Texas
-1-
EOTT ENERGY OPERATING LIMITED PARTNERSHIP
Alabama Nebraska
Arizona Nevada
Arkansas New Jersey
California New Mexico
Colorado New York
Connecticut North Carolina
Delaware North Dakota
Florida Ohio
Georgia Oklahoma
Illinois Oregon
Indiana Pennsylvania
Iowa Rhode Island
Kansas South Carolina
Louisiana South Dakota
Maryland Tennessee
Massachusetts Texas
Michigan Utah
Minnesota Virginia
Mississippi Washington
Missouri West Virginia
Montana Wisconsin
Wyoming
EOTT ENERGY CANADA LIMITED PARTNERSHIP
PROVINCE STATE
Alberta Delaware
British Columbia Illinois
Manitoba Indiana
Ontario Louisiana
Saskatchewan Michigan
Minnesota
Mississippi
Montana
North Dakota
Oklahoma
Texas
Wisconsin
-2-
EOTT ENERGY LIQUIDS, L.P.
Delaware Texas
EOTT ENERGY PIPELINE LIMITED PARTNERSHIP
Alabama Mississippi
Arkansas Montana
California Nebraska
Colorado New Mexico
Delaware North Dakota
Kansas Oklahoma
Louisiana South Dakota
Texas
-3-
SECTION 7(c)
ENFORCEABILITY
Sections 7(i), 7(j) [*] of this Disclosure Schedule are incorporated by
reference.
-4-
SECTION 7(d)
PERMITS, LICENSES AND APPROVALS
Section 7(i) of this Disclosure Schedule is included herein by
reference.
[*]
COMPLIANCE WITH TAXES
Section 7(t) of this Disclosure Schedule is incorporated by reference.
ENVIRONMENTAL
Section [*] 7(t) of this Disclosure Schedule is incorporated herein by
reference.
[*]
-5-
SECTION 7(e)
FILINGS TO REFLECT LIENS
Mortgage Tax Affidavit Form - Kansas.
Any ad valorem tax pro-ration forms in required jurisdictions.
Section 7(h) of this Disclosure Schedule is incorporated herein by
reference.
1. Financing Statement Filings
A. Alabama
i. Central Filings (Blanket UCC-1s):
EOTT Energy Operating Limited Partnership
EOTT Energy Corp.
EOTT Energy Partners, L.P.
EOTT Energy General Partner, L.L.C.
EOTT Energy Canada Limited Partnership
EOTT Energy Liquids, L.P.
EOTT Energy Pipeline Limited Partnership
ii. Mobile County, Alabama Filings:
Fixture filing for EOTT Energy Operating Limited Partnership
Fixture filing for EOTT Energy Pipeline Limited Partnership
B. Mississippi
i. Central Filings (Blanket UCC-1s):
EOTT Energy Operating Limited Partnership
EOTT Energy Corp.
EOTT Energy Partners, L.P.
EOTT Energy General Partner, L.L.C.
EOTT Energy Canada Limited Partnership
EOTT Energy Liquids, L.P.
EOTT Energy Pipeline Limited Partnership
ii. Mississippi Local Filings (Blanket UCC-1s):
a) UCC-1 filing for EOTT Energy Operating Limited
Partnership
Amite
▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇
▇▇▇▇▇▇
▇▇▇▇▇▇
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▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇
▇▇▇▇▇
Lincoln
▇▇▇▇▇▇
▇▇▇▇▇
▇▇▇▇
▇▇▇▇▇
Stone
▇▇▇▇▇▇▇▇
▇▇▇▇▇
b) UCC-1 filing for EOTT Energy Pipeline Limited
Partnership:
Amite
▇▇▇▇▇▇▇
▇▇▇▇▇▇
▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇
▇▇▇▇▇
▇▇▇▇▇▇▇
▇▇▇▇▇▇
▇▇▇▇▇
▇▇▇▇
Stone
▇▇▇▇▇▇▇▇
▇▇▇▇▇
C. Delaware UCC Filings:
EOTT Energy Operating Limited Partnership
EOTT Energy Corp.
EOTT Energy Partners, L.P.
EOTT Energy General Partner, L.L.C.
EOTT Energy Canada Limited Partnership
EOTT Energy Liquids, L.P.
EOTT Energy Pipeline Limited Partnership
D. UCC Transmitting Utility Financing Statements for EOTT Energy Operating
Limited Partnership and EOTT Energy Pipeline Limited Partnership:
Alabama
Arkansas
Colorado
Kansas
Louisiana
Montana
-7-
Mississippi
Nebraska
New Mexico
North Dakota
Oklahoma
South Dakota
Texas
E. Deed of Trust, Mortgage, Fixture Filing, Security Agreement and
Financing Statement
1. EOTT Energy Operating Limited Partnership
a) Alabama Counties:
Mobile
b) Mississippi Counties:
Amite
▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇
▇▇▇▇▇▇
▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇
▇▇▇▇▇
Lincoln
▇▇▇▇▇▇
▇▇▇▇▇
▇▇▇▇
▇▇▇▇▇
Stone
▇▇▇▇▇▇▇▇
▇▇▇▇▇
2. EOTT Energy Pipeline
a) Alabama Counties:
Mobile
b) Mississippi Counties:
Amite
▇▇▇▇▇▇
▇▇▇▇▇▇▇
▇▇▇▇▇▇
▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
-8-
▇▇▇▇▇
▇▇▇▇▇
▇▇▇▇▇▇▇
▇▇▇▇▇▇
▇▇▇▇▇
▇▇▇▇
Stone
▇▇▇▇▇▇▇▇
▇▇▇▇▇
3. EOTT Energy Liquids, ▇.▇.
▇▇▇▇▇▇▇▇ County, Texas
Galveston County, Texas
▇▇▇▇▇▇ County, Texas
Any other mortgages and UCC-1 financing statements or their equivalents
filed by the Lender.
Any and all additional mortgages and Deeds of Trust heretofore filed by
the Lender in jurisdictions in which the Credit Parties own fixed assets.
-9-
SECTION 7(f)
CONFLICTS
Sections 7(c), 7(d), 7(e), 7(h), 7(i), 7(j), [*], 7(r), 7(s), 7(t),
7(u) and 7(x) of this Disclosure Schedule are incorporated herein by reference.
-10-
SECTION 7(g)
FICTITIOUS PARTNERSHIP NAMES
EOTT Energy
-11-
SECTION 7(h)
LIMITATION OF VALID,
PERFECTED, FIRST
PRIORITY SECURITY INTEREST
Section 7(i) of this Disclosure Schedule is hereby incorporated by
reference.
[*]
Commodity Repurchase Agreement dated February 28, 1998, by and between
Standard Chartered Trade Service Corporation and EOTT Energy Operating, L.P., as
amended.
Receivables Purchase Agreement dated October 19, 1999, by and between
EOTT Energy Operating, L.P. and Standard Chartered Trade Services Corporation,
as amended.
-12-
SECTION 7(i)
VALID TITLE
[*]
Sections 7(h) [*] and 7(x) of this Disclosure Schedule are incorporated
by reference.
-13-
SECTION 7(j)
LIST OF DEFAULTS
[*]
Each section of this Disclosure Schedule is incorporated herein by
reference.
-14-
SECTION 7(k)
ERISA PLAN AND ERISA COMPLIANCE
[*]
-15-
SECTION 7(l)
ENVIRONMENTAL MATTERS
COMPLIANCE WITH ENVIRONMENTAL LAW
[*]
-16-
SECTION 7(p)
[*]
-17-
SECTION 7(q)
INITIAL FINANCIAL STATEMENTS
The February 2002 income statement has been delivered to the
Administrative Agent.
[*]
-18-
SECTION 7(r)
LIABILITIES
1. Permitted Liens.
2. Sections 7(d), 7(f), 7(i), [*], 7(t), 7(u) and 7(x) of this
Disclosure Schedule are incorporated herein by reference.
-19-
SECTION 7(s)
MISSTATEMENTS AND OMISSIONS
PricewaterhouseCoopers LLP ("PWC") is examining the books and records
of the Credit Parties for Fiscal Year 2001 and forward and the Credit Parties
are uncertain whether, at the conclusion of its audit, PWC will propose any
adjustments to the December 31, 2001, consolidated financial statements.
-20-
SECTION 7(t)
PENDING AND THREATENED LITIGATION
1. State of Texas Royalty Suit. Certain of the Credit Parties were
served on November 9, 1995 with a petition styled The State of Texas, et al. vs.
Amerada ▇▇▇▇ Corporation, et al. The matter was filed in District Court in ▇▇▇
County, Texas and involves several major and independent oil companies and
marketers as defendants. The plaintiffs are attempting to put together a class
action lawsuit alleging that the defendants acted in concert to buy oil owned by
members of the plaintiff class in ▇▇▇ County, Texas, and elsewhere in Texas, at
"posted" prices, which the plaintiffs allege were lower than true market prices.
There is not sufficient information in the petition to fully quantify the
allegations set forth in the petition, but the Credit Parties believe that any
such claims against us will prove to be without merit. There has been no
activity on this matter for several years.
2. State of Texas, et al. vs. Amerada ▇▇▇▇ Corporation, et al., Cause
No. 97-12040; In the 53rd Judicial District Court of ▇▇▇▇▇▇ County, Texas
(Common Purchaser Act Suit). This case was filed on October 23, 1997 in Austin
by the Texas Attorney General's office and involves several major and
independent oil companies and marketers as defendants. Certain of the Credit
Parties were served on November 18, 1997. The petition states that the State of
Texas brought this action in its sovereign capacity to collect statutory
penalties recoverable under the Texas Common Purchaser Act, arising from
defendants' alleged willful breach of statutory duties owed to royalty,
overriding royalty and working interest owners of crude oil sold to defendants,
as well as alleged breach of defendants' common law and contractual duties. The
plaintiffs also allege that the defendants have engaged in discriminatory
pricing of crude oil. This case appears to be similar to the State of Texas
Royalty Suit filed by the State of Texas on November 9, 1995. The Credit
Parties, along with several of the defendants, reached a settlement with the
State in the Common Purchaser Act Suit in a Settlement Agreement dated August 5,
1999. Settlement amounts for each defendant were confidential. This settlement
disposed of any claims the State may have in the State of Texas Royalty Suit,
discussed above, but did not dismiss that case. Also, any severance tax claims
the State may have were specifically excluded from this settlement. However, no
severance tax claims were asserted in the petition filed by the plaintiffs.
3. ▇▇▇▇▇▇▇ Foundation and J. ▇▇▇ ▇▇▇▇▇▇ vs. Amerada ▇▇▇▇ Corporation,
et al. (Including EOTT Energy Operating Limited Partnership), Civil Action ▇▇.
▇-▇▇-▇▇▇▇; ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ of Texas, Houston
Division (Texas Federal Anti-Trust Suit). This suit was filed on April 10, 1996
as a class action complaint for violation of the federal antitrust laws and
involves several major and independent oil companies and marketers as
defendants. The relevant area is the entire continental United States, except
for Alaska, New York, Ohio, Pennsylvania, West Virginia and the Wilmington Field
at Long Beach, California. The plaintiffs claim that there is a combination and
conspiracy among the defendant oil companies to fix, depress, stabilize and
maintain at artificially low levels the price paid for the first purchase of
lease
-21-
production oil sold from leases in which the class members own interests. This
was allegedly accomplished by agreement of the defendants to routinely pay for
first purchases at posted prices rather than competitive market prices and
maintain them in a range below competitive market prices through an undisclosed
scheme of using posted prices in buy/sell transactions among themselves to
create the illusion that posted prices are genuine market prices. The plaintiffs
allege violations from October of 1986 forward. No money amounts were claimed.
See No. 6-Summary, for resolution of this matter.
4. ▇▇▇▇▇▇▇▇ Energy, Inc., et al. vs. Amerada ▇▇▇▇ Corporation, et al.,
Civil Action No. 2:97CV273PG; In the United States District Court for the
Southern District of Mississippi, Jackson Division (Mississippi Federal
Anti-Trust Suit). Certain of the Credit Parties received a summons in this
matter on August 18, 1997. The case was filed on August 5, 1997 and is a class
action complaint for alleged violation of the federal antitrust laws, which
involves several major and independent oil companies and marketers as
defendants. The plaintiffs claim that this litigation arises out of a
combination and conspiracy of the defendant oil companies to fix, depress,
stabilize and maintain at artificially low levels the prices paid for the first
purchase of lease production oil sold from leases in which the class members own
interests. The issues involved in this suit appear to be a duplication of the
issues in the Texas Federal Anti-Trust Suit previously discussed. No money
amounts were claimed. See No. 6-Summary, for resolution of this matter. This
suit was dismissed with prejudice on March 29, 2002.
5. Cameron Parish School Board, et al. vs. Texaco, Inc., et al.; Civil
Action No. C-98-111; In the United States District Court for the Western
District of Louisiana, Lake ▇▇▇▇▇▇▇ Division (Louisiana Federal Anti-Trust
Suit). This case was originally filed as a state law claim in Louisiana. When
the case was removed to federal court, the anti-trust claims were added, similar
to the claims made in the Texas Federal Anti-Trust Suit and the Mississippi
Federal Anti-Trust Suit. The plaintiffs claim that this litigation arises out of
a combination and conspiracy of the defendant oil companies to fix, depress,
stabilize and maintain at artificially low levels the prices paid for the first
purchase of lease production oil sold from leases in which the class members own
interests. The issues involved in this suit appear to be a duplication of the
issues in the Texas Federal Anti-Trust Suit and the Mississippi Federal
Anti-Trust Suit, both previously discussed. On October 22, 1998, the judge
granted the Plaintiffs' motion to amend the petition and add additional
defendants. Certain of the Credit Parties were added to the case as defendants
at that time. No money amounts were claimed. See No. 6-Summary, for resolution
of this matter.
6. Summary. The Texas Federal Anti-Trust Suit, the Mississippi Federal
Anti-Trust Suit and the Louisiana Federal Anti-Trust Suit, along with several
other suits to which the Credit Parties were not a party, were consolidated and
transferred to the Southern District of Texas by Transfer Order dated January
14, 1998. The Judicial Panel on Multidistrict Litigation made this
recommendation due to the similarity of issues in the cases. Certain of the
Credit Parties, and a number of other defendants, entered into a class-wide
settlement with the defendants, which was approved by the Court on April 7,
1999, with a Final Judgment entered on August 11, 1999. Several appeals were
subsequently
-22-
filed. All appeals have now been resolved. The settlement was funded on November
27, 2001. As the various cases are dismissed by each court, the relevant cases
will be removed from the Credit Parties' active litigation summary.
7. Assessment for Crude Oil Production Tax from the Comptroller of
Public Accounts, State of Texas. EOTT Energy Operating Limited Partnership
("EOTT OLP") received a letter from the Comptroller's Office dated October 9,
1998, assessing it for severance taxes the Comptroller's Office alleges are due
on a difference the Comptroller's Office believes to exist between the market
value of crude oil and the value reported on our crude oil tax report for the
period of September 1, 1994 through December 31, 1997. The letter states that
the action, based on a desk audit of EOTT OLP's crude oil production reports, is
partly to preserve the statute of limitations where crude oil severance tax may
not have been paid on the true market price of the crude oil. The letter further
states that the Comptroller's position is similar to claims made in several
lawsuits, including the Texas Federal Anti-Trust Suit, in which we are a
defendant. The amount of the assessment, including penalty and interest, is
approximately $1.1 million. While the claim is still being reviewed, EOTT OLP
believes it should be without liability in this matter. There has been no action
on this matter since early in 1999.
8. Export License with United States Department of Commerce. EOTT
Energy Operating Limited Partnership ("EOTT OLP") has applied for and maintained
Export Licenses through the U.S. Department of Commerce ("DOC") since 1994.
These licenses authorized EOTT OLP to export crude oil to Canada. Each license
provided an applicable license quantity and value of merchandise as authorized
by the DOC to be exported. The licenses generally covered either a one or
two-year period. In early 1999, as EOTT OLP was preparing a new license
application, it was discovered that EOTT OLP had exported more barrels and value
than had been authorized by the DOC under our current (and prior) license.
Pursuant to Section 764.5 of the Export Administration Regulations, EOTT OLP
filed a Voluntary Disclosure with the DOC on February 5, 1999, giving the DOC
notice of these license overruns. The next formal stage of the Voluntary
Disclosure process will be for the DOC to issue a Charging Letter regarding a
proposed fine for the export license overruns. To date, EOTT OLP does not have
any information as to when or in what amount the Charging Letter will be issued.
9. ▇▇▇▇ ▇. Roam, et al. vs. Texas-New Mexico Pipe Line Company and EOTT
Energy Pipeline Limited Partnership, Cause No. CV43296, In the District Court of
Midland County, Texas, 238th Judicial District (▇▇▇▇▇▇▇ Estates Suit). Certain
residents of the ▇▇▇▇▇▇▇ Estates, a residential subdivision located outside of
Midland, Texas, filed the ▇▇▇▇▇▇▇ Estates Suit on March 2, 2001. The allegations
in the petition state that free crude oil products were discovered in water
▇▇▇▇▇ in the ▇▇▇▇▇▇▇ Estates area, on or about October 3, 2000. The plaintiffs
claim that the crude oil products are from a 1992 release from a pipeline then
owned by the Texas-New Mexico Pipe Line Company ("Tex-New Mex"). EOTT Energy
Pipeline Limited Partnership ("EOTT PLP") purchased that pipeline from Tex-New
Mex in 1999. The plaintiffs have alleged that Tex-New Mex was negligent, grossly
negligent and malicious in failing to accurately report and remediate the spill.
With respect to EOTT PLP, the plaintiffs are seeking damages arising from any
-23-
contamination of the soil or groundwater since EOTT PLP acquired the pipeline in
question. No specific amount of money damages was claimed, and it is not
possible to determine any potential exposure at this stage of the matter. In
response to the ▇▇▇▇▇▇▇ Estates Suit, EOTT PLP filed a cross-claim against
Tex-New Mex. In the cross-claim, EOTT PLP claims that, in relation to the
matters alleged by the plaintiffs, Tex-New Mex breached the Purchase and Sale
Agreement between the parties dated May 1, 1999, by failing to disclose the 1992
release and by failing to undertake the defense and handling of the toxic tort
claims, fair market value claims, and remediation claims arising from the
release. Additionally, EOTT PLP is asserting claims of gross negligence, fraud
and specific performance. On ▇▇▇▇▇ ▇, ▇▇▇▇, ▇▇▇▇ ▇▇▇ filed an amended cross
claim which alleges that Tex-New Mex defrauded EOTT PLP as part of Tex-New Mex's
sale to EOTT PLP of the pipeline systems in 1999. The amended cross claim also
alleges that various practices employed by Tex-New Mex in the operation of its
pipelines constitute gross negligence and willful misconduct and void EOTT PLP's
obligation to indemnify Tex-New Mex for remediation of releases that occurred
prior to May 1, 1999. Due to the early stages of the proceedings, it is not
possible to speculate on the possible outcome of this matter.
10. Enron has received a request for information from EPA under Section
308 of the Clean Water Act, requesting information regarding certain releases
and discharges from oil pipelines operated by Enron for the time period July 1,
1998 to July 11, 2001. Because the Credit Parties' pipelines, which are operated
by an Enron subsidiary, are the only domestic crude oil pipelines affiliated
with Enron, Enron responded for itself and on behalf of EOTT, to EPA's request
on January 29, 2002. No assurance can be given that EPA will agree with our
interpretation of that definition. EOTT instituted a pipeline integrity
assessment program in 1999. EOTT expanded its pipeline integrity assurance
program in December 2001 to insure evaluation of the integrity of a pipeline
after a spill to avoid putting a pipeline back in service if integrity is not on
the line. (The discussion in Section 7(d) of this Disclosure Schedule regarding
Other Applicable Rules is incorporated herein by reference.) These measures are
intended to reduce the number of discharges and releases on the pipelines. At
this time, it is not possible to predict what the outcome will be of the
response made to EPA's Section 308 request. Further, no assurance can be given
as to the amount or timing of future expenditures for environmental remediation
or compliance which may be required relating to this request, and actual future
expenditures may be different from the amounts currently anticipated. In the
event of future increases in costs, EOTT may be unable to pass on those
increases to its customers.
11. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ v. EOTT Energy Pipeline
Limited Partnership and EOTT Energy Corp. The plaintiffs in this lawsuit are
landowners who are seeking damages arising from a release of crude oil from an
Oklahoma pipeline owned by EOTT Energy Pipeline Limited Partnership. EOTT
undertook extensive remediation efforts with respect to the crude oil release
that is the subject of this lawsuit. The plaintiffs allege that EOTT did not
properly remediate the crude oil release. The plaintiffs are alleging causes of
action for negligence, gross
-24-
negligence, unjust enrichment, and nuisance. Due to the early stages of the
proceedings, it is not possible to speculate on the possible outcome of this
matter.
12. Notice of Claim by Law Offices of ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇. The Credit
Parties have been contacted by ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, who claims to represent various
persons who have purchased Common Units of EOTT MLP. [*]
[*]
GENERAL
Sections 7(d), 7(j), [*] and 7(x) of this Disclosure Schedule are
incorporated herein by reference.
-25-
SECTION 7(u)
EXISTING LABOR DISPUTES,
ACTS OF GOD AND WAR, ETC.
Section [*] 7(t) of this Disclosure Schedule are incorporated herein by
reference.
-26-
SECTION 7(v)
SUBSIDIARIES/EQUITY INTEREST OWNERSHIP
1. EOTT ENERGY PARTNERS, L.P.
o EOTT ENERGY OPERATING LIMITED PARTNERSHIP + or -99.99% Limited Partnership Interest
(Direct) and General Partner
Interest (Indirect)
o EOTT ENERGY GENERAL PARTNER, LLC 100% Membership Interest
Stockholder Interest
o EOTT ENERGY FINANCE CORP. 100%
2. EOTT ENERGY CORP.
o EOTT ENERGY PARTNERS, L.P. 1.98% General Partnership Interest
3. EOTT ENERGY OPERATING LIMITED PARTNERSHIP
o EOTT ENERGY PIPELINE LIMITED PARTNERSHIP + or -99.99% Limited Partnership Interest
o EOTT ENERGY CANADA LIMITED PARTNERSHIP + or -99.99% Limited Partnership Interest
o EOTT ENERGY LIQUIDS, L.P. + or -99.99% Limited Partnership Interest
4. EOTT ENERGY GENERAL PARTNER, LLC
o EOTT ENERGY OPERATING LIMITED PARTNERSHIP + or -.01% Limited Partnership Interest
o EOTT ENERGY LIQUIDS, L.P. + or -.01% Limited Partnership Interest
o EOTT ENERGY CANADA LIMITED PARTNERSHIP + or -.01% Limited Partnership Interest
o EOTT ENERGY PIPELINE LIMITED PARTNERSHIP + or -.01% Limited Partnership Interest
-27-
SECTION 7(x)
PERMITTED INDEBTEDNESS
1. Indebtedness of each Credit Party incurred in the ordinary course of
business to vendors, suppliers or other persons providing goods and services,
which are outstanding for less than 120 days from the date goods are delivered
or services are rendered.
[*]
3. Indebtedness of the Credit Parties to Enron and/or its affiliates as
disclosed on Section 7(t) of this Disclosure Schedule, which is incorporated
herein by reference.
4. Amended and Restated
Reimbursement, Loan and Security Agreement
among the lender and each Credit Party dated December 21, 2001.
5. All indebtedness of each Credit Party reflected on the consolidated
balance sheet of EOTT Energy Partners, L.P. reflected on the Form 10-Q for the
quarter ended September 30, 2001 incorporated by reference hereto, as modified
or supplemented by information reflected in the Initial Financial Statements.
6. All indebtedness under the Credit Documents.
[*]
8. Indebtedness pursuant to Master Lease Agreement dated April 1, 1997,
with General Electric Capital Corporation to provide lease financing for
vehicles, together with associated schedules.
9. All indebtedness pursuant to Master Lease Agreement dated August 23,
1996 with Metlife Capital Corporation to provide lease financing for vehicles
together with associated schedules.
10. All indebtedness pursuant to Commodity Repurchase Agreement by and
between Standard Chartered Trade Service Corporation and EOTT Energy Operating,
L.P.
11. All indebtedness pursuant to Receivables Purchase Agreement by and
between EOTT Energy Operating, L.P. and Standard Chartered Trade Services
Corporation
12. Any Indebtedness secured by Permitted Liens.
-28-
13. All indebtedness under the Indenture and First Supplemental
Indenture dated October 1, 1999.
-29-
SCHEDULE VI
LENDER SCHEDULE
Name of Lender Percentage Share Domestic Lending Office LIBOR Lending Office
-------------- ---------------- ----------------------- --------------------
Standard Chartered 100% 1285 Avenue of the 1285 Avenue of the
Bank Americas, ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
SCHEDULE VII
SECURITY SCHEDULE
Alabama
[to come]
--------------------------------------------------------------------------------
California
[to come]
--------------------------------------------------------------------------------
Colorado
[to come]
--------------------------------------------------------------------------------
Kansas
(i) Mortgage; Deed of Trust; Fixture Filing; Security Agreement; and Financing
Statement made as of April 23, 2002, by EOTT Energy Pipeline Limited Partnership
to Standard Chartered Bank as collateral agent for itself and the Lenders'
parties to the Agreement and for its affiliates, including without limitation
Standard Chartered Trade Services Corporation; and (ii) UCC-1 Financing
Statement designating EOTT Energy Pipeline Limited Partnership and EOTT Energy
Operating Limited Partnership as debtors, filed in the following counties in
Kansas:
1. ▇▇▇▇▇▇ 13. Greeley
2. Chautauqua County 14. ▇▇▇▇▇▇▇
3. ▇▇▇▇▇ 15. ▇▇▇▇▇▇▇▇
4. Comanche 16. Kearny
5. ▇▇▇▇▇▇ 17. Kiowa
6. Decatur 18. Lane
7. ▇▇▇▇▇▇▇ 19. ▇▇▇▇▇
8. ▇▇▇▇▇ 20. Ness
9. ▇▇▇▇▇▇▇▇▇ 21. ▇▇▇▇▇▇▇
10. ▇▇▇▇▇▇ 22. Pawnee
11. ▇▇▇▇ 23. ▇▇▇▇▇
▇▇. ▇▇▇▇▇▇ 24. ▇▇▇▇▇▇▇
25. Rice 31. ▇▇▇▇▇▇▇▇
26. ▇▇▇▇▇ 32. ▇▇▇▇▇▇
27. Rush 33. ▇▇▇▇▇
28. ▇▇▇▇▇▇▇ 34. ▇▇▇▇▇▇▇
29. ▇▇▇▇▇ 35. Wichita
30. ▇▇▇▇▇▇▇
--------------------------------------------------------------------------------
Louisiana
1. Ascension 11. ▇▇▇▇▇▇▇▇
2. Assumption 12. Plaquemines
3. ▇▇▇▇▇▇▇▇▇▇ 13. Rapides
4. Billings 14. Richland
5. ▇▇▇▇▇▇ 15. Slope
6. ▇▇▇▇ 16. St. ▇▇▇▇▇▇
7. Fallon 17. ▇▇▇▇▇
8. Golden Valley 18. ▇▇▇▇▇▇
9. Iberville 19. Webster Parish
10. Jefferson 20. ▇▇▇▇▇▇▇▇
--------------------------------------------------------------------------------
Montana
[to come]
--------------------------------------------------------------------------------
Nebraska
1. Hichcock
2. Red Willow
--------------------------------------------------------------------------------
New Mexico
(i) Deed of Trust; Mortgage; Fixture Filing; Security Agreement; and Financing
Statement made as of April 23, 2002 by EOTT Energy Pipeline Limited Partnership
and EOTT Energy Operating limited Partnership to ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ for the
benefit of Standard Chartered Bank as collateral agent for itself and the
lenders party to the Agreement and for its affiliates, including without
limitation Standard Chartered Trade Services; and (ii) UCC-1 Financing Statement
designating EOTT Energy
2
Pipeline Limited Partnership and EOTT Energy Operating Limited Partnership as
debtors, filed in the following counties in New Mexico:
1. Eddy
2. Lea
--------------------------------------------------------------------------------
North Dakota
[to come]
--------------------------------------------------------------------------------
Oklahoma
Mortgage; Fixture Filing; Security Agreement; and Financing Statement made as of
April 23, 2002, by EOTT Energy Pipeline Limited Partnership and Energy Operating
Limited Partnership to Standard Chartered Bank as collateral agent for itself
and the other lenders party to the Agreement and for its affiliates, including
without limitation Standard Chartered Trade Services Corporation, filed in the
following counties in Oklahoma:
1. Beckham 19. Love
2. ▇▇▇▇▇▇ 20. Major
3. Caddo 21. ▇▇▇▇▇▇▇
4. Canadian 22. ▇▇▇▇▇▇
5. ▇▇▇▇▇▇ 23. Noble
6. Cleveland 24. Oklahoma
7. Creek 25. Oklahoma County
8. ▇▇▇▇▇▇ 26. Osage
9. ▇▇▇▇▇ 27. Pawnee
10. ▇▇▇▇▇ 28. ▇▇▇▇▇
11. ▇▇▇▇▇▇ 29. Pontotoc County
12. ▇▇▇▇▇ 30. Pottawatomie
13. ▇▇▇▇▇▇ 31. Seminole
14. Jefferson 32. ▇▇▇▇▇▇▇▇
15. ▇▇▇ 33. Washita
16. Kingfisher 34. ▇▇▇▇▇
17. Lincoln 35. ▇▇▇▇▇▇▇▇
18. ▇▇▇▇▇
--------------------------------------------------------------------------------
3
South Dakota
1. ▇▇▇▇▇▇▇
--------------------------------------------------------------------------------
Texas
Deed of Trust; Mortgage; Fixture Filing; Security Agreement; and Financing
statement made as of April 23, 2002, by EOTT Energy Pipeline Limited Partnership
and EOTT Energy Operating Limited Partnership to ▇▇▇▇▇ ▇. ▇▇▇▇ III for the
benefit of Standard Chartered Bank as collateral agent for itself and the
Lenders party to the Agreement and for its affiliates, including without
limitation Standard Chartered Trade Services Corporation, filed in the following
counties in Texas:
1. ▇▇▇▇▇▇ 22. Kent
2. Baylor 23. King
3. ▇▇▇▇▇▇ 24. ▇▇▇▇
4. Clay 25. ▇▇▇▇
5. ▇▇▇▇▇ 26. Maverick
6. ▇▇▇▇▇▇ 27. Midland
7. Dimmit 28. ▇▇▇▇▇▇▇▇
8. Ector 29. ▇▇▇▇▇▇
9. ▇▇▇▇▇▇ 30. Orange
10. Frio 31. ▇▇▇▇▇▇
11. ▇▇▇▇▇▇ 32. ▇▇▇▇
▇▇. ▇▇▇▇▇ 33. ▇▇▇▇▇▇
13. ▇▇▇▇▇▇▇▇▇ 34. ▇▇▇▇▇
14. ▇▇▇▇▇ 35. Stonewall
15. ▇▇▇▇▇▇ 36. ▇▇▇▇▇
16. ▇▇▇▇▇▇▇▇ 37. ▇▇▇▇▇▇▇▇▇▇▇▇
17. ▇▇▇▇▇▇▇ 38. Upshur
18. ▇▇▇▇▇▇ 39. Upton
19. Jasper 40. ▇▇▇▇
20. Jefferson 41. ▇▇▇▇▇▇▇
21. ▇▇▇▇▇ 42. ▇▇▇▇▇▇
--------------------------------------------------------------------------------
4
EXHIBIT A
PROMISSORY NOTE
$300,000,000 New York, New York April 23, 2002
FOR VALUE RECEIVED, the undersigned, EOTT Energy Operating Limited
Partnership, a Delaware limited partnership ("EOTT OLP"), EOTT Energy Canada
Limited Partnership, a Delaware limited partnership ("EOTT CANADA"), EOTT Energy
Liquids, L.P., a Delaware limited partnership ("EOTT LIQUIDS"), EOTT Energy
Pipeline Limited Partnership, a Delaware limited partnership (together with EOTT
OLP, EOTT Canada and EOTT Liquids, on a joint and several basis, "BORROWER"),
hereby promises to pay to the order of Standard Chartered Bank and the
successors in interest of such party ("LENDER"), the principal sum of THREE
HUNDRED MILLION DOLLARS ($300,000,000), or, if greater or less, the sum of (i)
the aggregate unpaid principal amount of the Loans made or deemed made by the
Lender to the Borrower pursuant to the terms of the Credit Agreement (as
hereinafter defined) and (ii) the aggregate unpaid principal amount of all
Matured L/C Obligations, in each case, together with interest on the unpaid
principal balance thereof at the rates and at the times provided in such Credit
Agreement, both principal and interest payable as herein provided in lawful
money of the United States of America at the offices of the Administrative Agent
set forth in the Credit Agreement, or at such other place as from time to time
may be designated by the holder of this Note. Payments on this Note shall be
made and applied as provided herein and in the Credit Agreement.
This Note (i) is issued and delivered under and pursuant to the Second
Amended and Restated
Reimbursement, Loan and Security Agreement, dated as of
April 23, 2002, among Borrower, EOTT Energy Partners, L.P., EOTT Energy General
Partner, L.L.C., Standard Chartered Bank, as Administrative Agent, the Lender
and the other signatories thereto (as from time to time supplemented, amended or
restated, herein called the "CREDIT AGREEMENT"), and is one of the Notes, as
referred to in the Credit Agreement, (ii) is subject to the terms and provisions
of the Credit Agreement, which contains provisions for payments and prepayments
hereunder and acceleration of the maturity hereof upon the happening of certain
stated events and (iii) is secured by and entitled to the benefits of the
Security Documents and the guaranties of the Guarantors. Reference is hereby
made to the Credit Agreement for (i) a description of certain rights,
limitations of rights, obligations and duties of the parties hereto; (ii) the
meanings assigned to terms used and not defined herein; and (iii) a description
of the nature and extent of the security thereby provided and provided by the
other Security Documents, and the rights of the parties thereto.
The 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.
THIS NOTE SHALL BE GOVERNED AND CONSTRUED IN ACCORDANCE WITH 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
By: EOTT ENERGY GENERAL PARTNER, L.L.C.
By:
-------------------------------
Name:
-------------------------
Title:
------------------------
EOTT ENERGY CANADA LIMITED PARTNERSHIP
By: EOTT ENERGY GENERAL PARTNER, L.L.C.
By:
-------------------------------
Name:
-------------------------
Title:
------------------------
EOTT ENERGY LIQUIDS, L.P.
By: EOTT ENERGY GENERAL PARTNER, L.L.C.
By:
-------------------------------
Name:
-------------------------
Title:
------------------------
EOTT ENERGY PIPELINE LIMITED PARTNERSHIP
By: EOTT ENERGY GENERAL PARTNER, L.L.C.
By:
-------------------------------
Name:
-------------------------
Title:
------------------------
EXHIBIT B
BORROWING NOTICE
Reference is made to the Second Amended and Restated
Reimbursement,
Loan and Security Agreement, dated as of April 23, 2002 (as from time to time
amended, the "AGREEMENT"), among EOTT Energy Operating Limited Partnership
("EOTT OLP"), EOTT Energy Canada Limited Partnership ("EOTT CANADA"), EOTT
Energy Liquids, L.P. ("EOTT LIQUIDS"), EOTT Energy Pipeline Limited Partnership
(together with EOTT OLP, EOTT Canada and EOTT Liquids, on a joint and several
basis, "BORROWER"), EOTT Energy Partners, L.P., EOTT Energy General Partner,
L.L.C. ("EOTT GP"), Standard Chartered Bank, as Administrative Agent and the
other signatories thereto. Capitalized terms used and not defined herein have
the meanings given to them in the Agreement.
Pursuant to the terms of the Agreement, the Borrower Representative, on
behalf of the Borrower, hereby requests the Lenders to make Loans to the
Borrower in the aggregate principal amount of $ _________ and specifies
___________, 200__, as the date the Borrower desires for the Lenders to make
such Loans and for the Administrative Agent to deliver to the Borrower the
proceeds thereof.
Type of Loans: LIBOR Loan ____ or Alternate Base Rate Loan ____
With respect to notice made in connection with a request for LIBOR
Loans, the maturity date is ________________.
To induce the Lenders to make such Loans, the Borrower hereby
represents, warrants, acknowledges and agrees to and with the Administrative
Agent and each Lender that:
(a) The manager or officer of EOTT GP signing this instrument
is the duly elected, qualified and acting manager or officer of EOTT GP
as indicated below such manager's or officer's signature hereto, having
all necessary authority to act for EOTT GP in its capacity as the sole
General Partner of the Borrower Representative in making the request on
behalf of the Borrower herein contained.
(b) The representations and warranties of the Guarantors and
the Borrower 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 Extensions of Credit under the Agreement or to the
extent that such representation or warranty was made as of a specific
date or updated, modified or supplemented as of a subsequent date with
the consent of Majority Lenders), 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 that constitutes a Default; no such Default will exist upon the
Borrower's receipt and application of the Loans requested hereby; and
no Material Adverse Change has occurred or will occur upon the
Borrower's receipt and application of the Loans requested
hereunder. The Borrower will use the Loans hereby requested in
compliance with Section 2(e) of the Agreement.
(d) Each Credit Party has performed and complied with all
agreements and conditions in the Agreement and the other Credit
Documents required to be performed or complied with by such Credit
Party on or prior to the date hereof, and each of the conditions
precedent to the making of Loans contained in the Agreement remains
satisfied.
(e) The Facility Usage, after the making of the Loans
requested hereby, will not exceed the lesser of (i) the Maximum
Facility Amount and (ii) the Borrowing Base in each case on the date
requested for the making of such Loans.
(f) 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 the
Agreement. The Agreement and the other Credit Documents are hereby
ratified, approved and confirmed in all respects.
The manager or officer of EOTT GP signing this instrument hereby
certifies that, to the best of his or her knowledge after due inquiry, the above
representations, warranties, acknowledgments and agreements of the Borrower are
true, correct and complete in all material respects.
IN WITNESS WHEREOF, this instrument is executed as of ____________,
200__.
EOTT ENERGY OPERATING LIMITED PARTNERSHIP
By: EOTT ENERGY GENERAL PARTNER, L.L.C.
By:
--------------------------------
Name:
--------------------------
Title:
-------------------------
2
EXHIBIT C
CONTINUATION/CONVERSION NOTICE
Reference is made to the Second Amended and Restated
Reimbursement,
Loan and Security Agreement, dated as of April 23, 2002 (as from time to time
amended, the "AGREEMENT"), among EOTT Energy Operating Limited Partnership
("EOTT OLP"), EOTT Energy Canada Limited Partnership ("EOTT CANADA"), EOTT
Energy Liquids, L.P. ("EOTT LIQUIDS"), EOTT Energy Pipeline Limited Partnership
(together with EOTT OLP, EOTT Canada and EOTT Liquids, on a joint and several
basis, "BORROWER"), EOTT Energy Partners, L.P., EOTT Energy General Partner,
L.L.C. ("EOTT GP"), Standard Chartered Bank, as Administrative Agent and the
other signatories thereto. Capitalized terms used and not defined herein have
the meanings given to them in the Agreement.
The Borrower Representative, on behalf of the Borrower, hereby requests
a conversion or continuation of existing Loans into a new Borrowing or
Borrowings pursuant to Section 2(c) of the Agreement as follows:
Existing Borrowing(s) of Loans to be Continued or Converted:
$ of LIBOR Loans under the Revolving Credit
-------------
Facility with [an] Interest Period[s] ending
-----------------
$ of Alternative Base Rate Loans under the
--------------
Revolving Credit Facility
Loans:
Aggregate amount of new Borrowing: $
-----------
Type of Loans in new Borrowing:
-----------
Date of Continuation or Conversion:
-----------
The length of Interest Period for LIBOR Loans
is (one, three or six):
months
-----
The Borrower hereby represents, warrants, acknowledges and agrees to
and with the Administrative Agent and each Lender that:
(a) The manager or officer of EOTT GP signing this instrument
is the duly elected, qualified and acting manager or officer of EOTT GP
as indicated below such manager's or officer's signature hereto, having
all necessary authority to act for EOTT GP in its capacity as the sole
General Partner of the Borrower Representative in making the request on
behalf of the Borrower herein contained.
(b) There does not exist on the date hereof any condition or
event that constitutes a Default; nor will any such Default exist upon
the Borrower's receipt and application of the Loans requested hereby.
(c) 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 the
Agreement. The Agreement and the other Credit Documents are hereby
ratified, approved and confirmed in all respects.
The manager or officer of EOTT GP signing this instrument hereby
certifies that, to the best of his or her knowledge after due inquiry, the above
representations, warranties, acknowledgments and agreements of EOTT GP and the
Borrower are true, correct and complete in all material respects.
IN WITNESS WHEREOF, this instrument is executed as of __________,
200__.
EOTT ENERGY OPERATING LIMITED PARTNERSHIP
By: EOTT ENERGY GENERAL PARTNER, L.L.C.
By:
--------------------------------
Name:
--------------------------
Title:
-------------------------
2
EXHIBIT E
CERTIFICATE ACCOMPANYING
FINANCIAL STATEMENTS
Reference is made to the Second Amended and Restated
Reimbursement,
Loan and Security Agreement, dated as of April 23, 2002 (as from time to time
amended, the "AGREEMENT"), among EOTT Energy Operating Limited Partnership
("EOTT OLP"), EOTT Energy Canada Limited Partnership ("EOTT CANADA"), EOTT
Energy Liquids, L.P. ("EOTT LIQUIDS"), EOTT Energy Pipeline Limited Partnership
(together with EOTT OLP, EOTT Canada and EOTT Liquids, on a joint and several
basis, "BORROWER"), EOTT Energy Partners, L.P. ("EOTT MLP"), EOTT Energy General
Partner, L.L.C. ("EOTT GP") and Standard Chartered Bank, as Administrative Agent
and the other signatories thereto. Capitalized terms used and not defined herein
have the meanings given to them in the Agreement.
This Certificate is furnished pursuant to Section 8(d) of the
Agreement. Together herewith EOTT MLP is furnishing to the Administrative Agent
and each Lender, EOTT MLP's [AUDITED/UNAUDITED] consolidated financial
statements (the "FINANCIAL STATEMENTS") and supporting consolidating financial
statements, if required, as at _____________, 200__ (the "REPORTING DATE"). EOTT
MLP and the Borrower hereby jointly and severally represent, warrant and
acknowledge to the Administrative Agent and each Lender that:
(a) the officer of EOTT Corp. signing this instrument is a
duly elected, acting and qualified officer of EOTT Corp. as indicated
below such officer's signature hereto having all necessary authority to
act for EOTT Corp. in its capacity as the sole General Partner of EOTT
MLP in making the representations, warranties and acknowledgements set
forth herein;
(b) the manager or officer of EOTT GP signing this instrument
is the duly elected, acting and qualified manager of EOTT GP as
indicated below such manager's or officer's signature hereto having all
necessary authority to act for EOTT GP in its capacity as the sole
General Partner of each Borrower Party in making the representations,
warranties and acknowledgements set forth herein;
(c) the Financial Statements are accurate and complete in all
material respects (subject, in the case of such unaudited financial
statements, to normal and recurring adjustments made in conformity with
GAAP) and satisfy the requirements of the Agreement;
(d) on the Reporting Date each of EOTT MLP and the Borrower
was, and on the date hereof is, in full compliance with the disclosure
requirements of Section 8(f) of the Agreement, and no Default otherwise
existed on the Reporting Date or otherwise exists on the date of this
instrument;
(e) The representations and warranties of EOTT MLP and the
Borrower 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 Extensions of Credit under
the Agreement or to the extent that such representation or warranty was
made as of a specific date or updated, modified or supplemented as of a
subsequent date with the consent of Majority Lenders), with the same
effect as though such representations and warranties had been made on
and as of the date hereof.
The officer of EOTT Corp. signing this instrument hereby certifies that
he/she has reviewed the Credit Documents, the Financial Statements and the
supporting consolidating financial statements and has otherwise undertaken such
inquiry as is in his/her opinion necessary to enable him/her to express an
informed opinion with respect to the above representations, warranties and
acknowledgments of EOTT MLP and, to the best of his/her knowledge, such
representations, warranties and acknowledgments are true, correct and complete
in all material respects.
The officer of EOTT GP signing this instrument hereby certifies that
he/she has reviewed the Credit Documents, the Financial Statements and the
supporting consolidating financial statements and has otherwise undertaken such
inquiry as is in his/her opinion necessary to enable him/her to express an
informed opinion with respect to the above representations, warranties and
acknowledgments of the Borrower and, to the best of his/her knowledge, such
representations, warranties and acknowledgments are true, correct and complete
in all material respects.
IN WITNESS WHEREOF, this instrument is executed as of
__________,200___.
EOTT ENERGY PARTNERS, L.P.
By: EOTT ENERGY CORP., its General Partner
By:
----------------------------------
Name:
----------------------------
Title:
---------------------------
EOTT ENERGY OPERATING LIMITED PARTNERSHIP
By: EOTT ENERGY GENERAL PARTNER, L.L.C.
By:
----------------------------------
Name:
----------------------------
Title:
---------------------------
2
EOTT ENERGY CANADA LIMITED PARTNERSHIP
By: EOTT ENERGY GENERAL PARTNER, L.L.C.,
its General Partner
By:
----------------------------------
Name:
----------------------------
Title:
---------------------------
EOTT ENERGY LIQUIDS, L.P.
By: EOTT ENERGY GENERAL PARTNER, L.L.C.,
its General Partner
By:
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Name:
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Title:
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EOTT ENERGY PIPELINE LIMITED PARTNERSHIP
By: EOTT ENERGY GENERAL PARTNER, L.L.C.,
its General Partner
By:
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Name:
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Title:
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3
EXHIBIT F
[LETTERHEAD OF BORROWER]
BORROWING BASE REPORT
as of / /
--- --- ---
MARKET VALUE ADVANCE RATE BORROWING BASE
------------ ------------ --------------
I. COLLATERAL TYPE
1. Cash & Cash Equivalents 100%
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2. Eligible Accounts Receivables
a. Tier I Eligible Receivables 90%
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b. Tier II Eligible Receivables 80%
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3. Eligible Crude/Product/Liquid Deliveries
a. Tier I Eligible Crude/Product/Liquid Deliveries 85%
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b. Tier II Eligible Crude/Product/Liquid Deliveries 80%
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4. Appraised Value of Eligible Fixed Assets 70%
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5. Exchange Balance 75%
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6. Inventory
a. (i) NYMEX Hedged Eligible Inventory 90%
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(ii) Other Hedged Eligible Inventory 80%
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b. Unhedged Eligible Inventory 75%
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7. Eligible Margin Deposits 80%
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8. Undrawn Product Purchase Letters of Credit 80%
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MINUS:
9. First Purchaser Crude Payables 100%
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10. Other Priority Claims 100%
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11. The aggregate net amounts payable by each Borrower Party
under all Hedging Contracts to which it is a party: 110%
--------- ------------
12. The amount of any setoff or contra account to any Eligible
Receivable that could arise from an obligation of any Borrower
Party to sell or purchase crude oil in any future month to the
extent not otherwise reflected as a reduction of Eligible
Receivables, such amount to be determined on an early
termination or ▇▇▇▇ to market basis: 100%
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COLLATERAL TOTAL:
II. OUTSTANDINGS
1. Aggregate Loans
----------
2. Aggregate Letters of Credit
----------
TOTAL OUTSTANDINGS
----------
III. EXCESS / DEFICIT (I-II)
----------
I hereby certify that the information provided herein is true and correct to the
best of my knowledge and that Borrower has been in compliance with all terms and
conditions of all Credit Documents at all times.
BY:
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TITLE: (CEO, CFO or Treasurer)
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EXHIBIT H
ENVIRONMENTAL COMPLIANCE CERTIFICATE
Reference is made to that certain Second Amended and Restated
Reimbursement, Loan and Security Agreement, dated as of April 23, 2002 (as from
time to time amended, the "AGREEMENT"), among EOTT Energy Operating Limited
Partnership ("EOTT OLP"), EOTT Energy Canada Limited Partnership ("EOTT
CANADA"), EOTT Energy Liquids, L.P. ("EOTT LIQUIDS"), EOTT Energy Pipeline
Limited Partnership (together with EOTT OLP, EOTT Canada and EOTT Liquids, on a
joint and several basis, "BORROWER"), EOTT Energy Partners, L.P., EOTT Energy
General Partner, L.L.C. ("EOTT GP"), and Standard Chartered Bank, as
Administrative Agent and the other signatories thereto. Capitalized terms used
and not defined herein have the meanings given to them in the Agreement.
This Certificate is furnished pursuant to Section 8(d)(xi) of the
Agreement. The Borrower hereby represents, warrants, and acknowledges to the
Administrative Agent and each Lender that:
1. For the Fiscal Year ending immediately prior to the date
hereof, the Borrower has complied and is complying with Section 8(p) of the
Agreement;
2. To the best knowledge of the undersigned after due inquiry,
the Borrower is on the date hereof in compliance with all applicable
Environmental Laws, noncompliance with which could cause a Material Adverse
Change;
3. The Borrower has taken (and continues to take) reasonable
steps to minimize the generation of potentially harmful effluents; and
4. The Borrower has established an ongoing program of
conducting an internal audit of each operating facility of the Borrower to
identify actual or potential environmental Liabilities that could cause a
Material Adverse Change.
The manager of officer of EOTT GP signing this instrument hereby
certifies that (i) such manager or officer is a duly elected, acting and
qualified manager or officer of EOTT GP as indicated below such manager's or
officer's signature hereto, having all necessary authority to act for EOTT GP in
its capacity as the sole General Partner of each Borrower Party in making the
representations, warranties and acknowledgements set forth herein and (ii) to
the best of such manager's or officer's knowledge after due inquiry and
consultation with the operating officers of each Borrower Party, such
representations, warranties, acknowledgments and agreements are true, correct
and complete in all material respects.
IN WITNESS WHEREOF, this instrument is executed as of __________,
200__.
EOTT ENERGY OPERATING LIMITED PARTNERSHIP
By: EOTT ENERGY GENERAL PARTNER, L.L.C.,
its General Partner
By:
----------------------------------
Name:
----------------------------
Title:
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EOTT ENERGY CANADA LIMITED PARTNERSHIP
By: EOTT ENERGY GENERAL PARTNER, L.L.C.,
its General Partner
By:
----------------------------------
Name:
----------------------------
Title:
---------------------------
EOTT ENERGY LIQUIDS, L.P.
By: EOTT ENERGY GENERAL PARTNER, L.L.C.,
its General Partner
By:
----------------------------------
Name:
----------------------------
Title:
---------------------------
EOTT ENERGY PIPELINE LIMITED PARTNERSHIP
By: EOTT ENERGY GENERAL PARTNER, L.L.C.,
its General Partner
By:
----------------------------------
Name:
----------------------------
Title:
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2
EOTT ENERGY PARTNERS, L.P.
By: EOTT ENERGY CORP., its General Partner
By:
----------------------------------
Name:
----------------------------
Title:
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3