EXHIBIT 10
GENESIS CRUDE OIL, L.P., AS BORROWER,
AND
CERTAIN LENDERS LISTED ON
THE SIGNATURE PAGES HEREOF,
AS LENDERS
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CREDIT AGREEMENT
DATED AS OF JUNE 6, 2000
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BNP PARIBAS
AS AGENT, COLLATERAL AGENT AND LETTER OF CREDIT ISSUER
TABLE OF CONTENTS
[to come]
Schedule 1 Material Agreements re: Indebtedness
Schedule 2 Material Liens
Schedule 3 Approved Obligors
Schedule 4 Form of Nomination Report
Schedule 5 Form of First Purchaser Liability Report
Schedule 6 Form of Inventory Report
Exhibit A Promissory Note
Exhibit B Borrowing Base Certificate
Exhibit C Security Agreement
Exhibit D Notice of Assignment
Exhibit E Guaranty Agreement
Exhibit F Form of Request For Issuance of Letter of Credit
Exhibit G Form of Borrowing Request
Exhibit H Form of Financial Statement Officer's Certificate
REVOLVING CREDIT AGREEMENT dated as of June 6, 2000, among: GENESIS
CRUDE OIL, L.P., a limited partnership duly formed and validly existing under
the laws of the State of Delaware (the "Borrower"); each of the lenders that is
a signatory hereto identified under the caption "LENDERS" on the signature pages
hereto or that, pursuant to Section 11.06(b) hereof, shall become a "Lender"
hereunder (individually, a "Lender, and collectively, the "Lenders"); BNP
PARIBAS as initial Letter of Credit Issuer, and BNP PARIBAS, as agent for the
Lenders (in such capacity, together with its successors in such capacity, the
"Agent"), and BNP PARIBAS, as collateral agent for the Lenders and certain other
Persons pursuant to the terms of the Security Agreement and the Intercreditor
Agreement (each, as hereinafter defined) (in such capacity, together with its
successors in such capacity, the "Collateral Agent").
The parties hereto agree as follows:
Section 1. Definitions and Accounting Matters.
1.01 Certain Defined Terms. As used herein, the following terms
shall have the following meanings (all terms defined in this Section 1.01 or in
other provisions of this Agreement in the singular to have the same meanings
when used in the plural and vice versa):
"Affiliate" shall mean, with respect to any Person, any other Person
that directly or indirectly controls, or is under common control with, or is
controlled by, such Person. As used in this definition, "control" (including,
with its correlative meanings, "controlled by" and "under common control with")
shall mean possession, directly or indirectly, of power to direct or cause the
direction of management or policies (whether through ownership of securities or
partnership or other ownership interests, by contract or otherwise), provided
that, in any event, any Person that owns directly or indirectly securities
having 20% or more of the voting power for the election of directors or other
governing body of a corporation or 20% or more of the partnership or other
ownership interests of any other Person (other than as a limited partner of such
other Person) will be deemed to control such corporation or other Person.
Notwithstanding the foregoing, (a) no individual shall be an Affiliate of the
Borrower solely by reason of his or her being a director, officer or employee of
the Borrower or any of its Subsidiaries and (b) neither the Agent nor any Lender
shall be an Affiliate of the Borrower or any of its Subsidiaries.
"Accounts Receivable" shall mean, as at any date, (a) the unpaid
portion of the obligation, as stated on the respective invoice, of a customer of
the Borrower, net of any credits, rebates or offsets then due and owing to such
customer (and for purposes hereof, a credit or rebate paid by check or draft of
the Borrower shall be deemed to be outstanding until such check or draft shall
have been debited to the account of the Borrower on which such check or draft
was drawn), or (b) all obligations of a customer of Borrower arising from the
purchase and sale contracts representing Following Month Nominations, which in
either case by their terms are due within 30 days from the original invoice date
provided, that the term "Accounts Receivable" as used herein shall not include
any such obligation of a Subsidiary or Affiliate of the Borrower to the
Borrower.
"Adjusted Inventory Value" shall mean Inventory value adjusted to
reflect market prices not to exceed independent prices as published by Platt's
for each respective crude type (adjusted for transportation to its respective
trading location and grade differential, if applicable).
"Applicable Lending Office" shall mean, for each Lender and for each
Type of Loan, the "Lending Office" of such Lender (or of an affiliate of such
Lender) designated for such Type of Loan on the signature pages hereof or such
other office of such Lender (or of an Affiliate of such Lender) as such Lender
may from time to time specify to the Agent and the Borrower as the office by
which its Loans of such Type are to be made and maintained.
"Applicable Margin" shall mean, with respect to: (a) Prime Rate
Loans, 1.00% per annum; and (b) LIBOR Loans, 1.40% per annum, provided that
with respect to Prime Rate Loans the Applicable Margin will be subtracted from
the Chase Prime Rate to determine the applicable interest rate and with respect
to LIBOR Loans the Applicable Margin will be added to the LIBOR Rate to
determine the applicable interest rate, as more fully provided in Section 3.02
hereof.
"Approved Obligors" shall mean, with respect to Accounts Receivable,
(a) those obligors listed on Schedule 3 hereof and (b) any other obligors
approved from time to time by the Agent in writing. The Agent also reserves the
right at any time to delete an obligor from the list of Approved Obligors with
our without cause upon 10 days prior written notice to the Borrower.
"Bankruptcy Code" shall mean the Federal Bankruptcy Code of 1978, as
amended from time to time or any similar federal, state or foreign law for the
relief of debtors.
"Basic Documents" shall mean, collectively, this Agreement, the Notes,
the Letter of Credit Documents, the Security Documents and the Guaranty
Agreements.
"Borrower Material Adverse Effect" shall mean a material adverse
effect on (a) the Property, business, operations, financial condition,
prospects, liabilities or capitalization of the Borrower, or (b) the ability of
the Borrower to perform its obligations under any of the Basic Documents to
which it is a party.
"Borrowing" shall mean Loans of the same Type borrowed simultaneously
hereunder.
"Borrowing Base" shall mean, at any time, an amount equal to the sum
of:
(a) 100% of the face value of Cash Collateral; plus
(b) 100% of the value of Cash Equivalents; plus
(c) 90% of the Net Equity Value in Futures Accounts; plus
(d) 90% of the value of Eligible Investment Grade Accounts
Receivable; plus
(e) 80% of the value of Eligible Non-Investment Grade Accounts
Receivable; plus
(f) 80% of the value of Eligible Inventory; plus
(g) 80% of the value of the unused portion of Eligible Letters of
Credit.
The value of the Borrowing Base shall be determined by reference to the most
recently dated Borrowing Base Certificate prepared by the Borrower pursuant to
Section 8.01(d), absent any error in such Borrowing Base Certificate as of the
date delivered. The value of each type of collateral set forth above shall be
computed in accordance with the provisions of the definitions of "Cash
Collateral", "Cash Equivalents", "Net Equity Value in Futures Accounts",
"Eligible Investment Grade Accounts Receivable", "Eligible Non-Investment Grade
Accounts Receivable", "Eligible Inventory", and "Eligible Letters of Credit"
respectively. Notwithstanding any other provision of the Basic Documents, no
asset shall be included in the Borrowing Base unless the Collateral Agent has
been granted a first-priority security interest (subject to the provisions of
Section 8.06) in such asset pursuant to the Security Agreement or the Agent has
been granted a first-priority security interest (subject to the provisions of
Section 8.06) in such asset pursuant to one of the security agreements
enumerated in Section 6.01(i) hereof or pursuant to other security agreement
acceptable to the Agent in its discretion and such security interest has been
perfected under applicable law.
"Borrowing Base Certificate" shall mean a certificate executed by an
authorized officer of the Borrower and substantially in the form of Exhibit B
hereto and appropriately completed.
"Business Day" shall mean any day (a) on which commercial banks are
not authorized or required to close in New York City and (b) if such day relates
to a borrowing of, a payment or prepayment of principal of or interest on, a
Conversion of or into, or an Interest Period for, a LIBOR Loan or a notice by
the Borrower with respect to any such borrowing, payment, prepayment, Conversion
or Interest Period, that is also a day on which dealings in Dollar deposits are
carried out in the London interbank market.
"Capital Expenditures" shall mean for any period, the aggregate
amount of all payments made during such period by any Person directly or
indirectly for the purpose of acquiring, constructing or maintaining fixed
assets, real property or equipment that, in accordance with GAAP, would be added
as a debit to the fixed asset account of such Person, including, without
limitation, all amounts paid or payable during such period with respect to
Capital Lease Obligations and interest that are required to be capitalized in
accordance with GAAP.
"Capital Lease Obligations" shall mean, for any Person, all
obligations of such Person to pay rent or other amounts under a lease of (or
other agreement conveying the right to use) Property to the extent such
obligations are required to be classified and accounted for as a capital lease
on a balance sheet of such Person under GAAP, and, for purposes of this
Agreement, the amount of such obligations shall be the capitalized amount
thereof, determined in accordance with GAAP.
"Cash Collateral" shall mean, at any time all, cash denominated in
U.S. dollars, held in the Cash Collateral Account or any lockbox account
identified in writing by the Borrower to the Agent and subject to the lien of
(x) one of the security agreements enumerated in Section 6.01(i) hereof, or (y)
another security agreement acceptable in form and substance to the Agent, and
which in any event is not subject to, or encumbered by, any Lien except the
lien granted to the Agent for the benefit of the Lenders pursuant to such
security agreement.
"Cash Collateral Account" means an account of the Borrower held by the
Agent for the benefit of the Lenders at its Principal Office or at another
depositary institution acceptable to the Agent, pursuant to the terms of either
(x) one of the agreements enumerated in Section 6.01(i) hereof or (y) another
security agreement acceptable in form and substance to the Agent.
"Cash Equivalents" means direct obligations of, or guaranteed as to
timely payment of principal and interest by, the United States or any agency or
instrumentality thereof, provided that such obligations (a) are backed by the
full faith and credit of the United States of America, (b) shall mature within
180 days of their date of issuance, (c) are deposited into the Collateral
Account, (d) are not subject to, or encumbered by, any Lien (except for the Lien
granted to the Collateral Agent for the benefit of the Lenders pursuant to
either (i) the Security Agreement, (ii) one of the agreements enumerated in
Section 6.01(i) hereof or (iii) another security agreement acceptable in form
and substance to the Agent), and (e) if in certificated form, are endorsed to
the order of the Collateral Agent or in blank. The aggregate value of Cash
Equivalents, for purposes of calculating the Borrowing Base hereunder, shall be
marked to market from time to time and on each date as of which a Borrowing Base
Certificate is to be delivered pursuant to Section 8.01(d) hereof, such marked
to market valuation in a manner reasonably acceptable to the Collateral Agent.
"Chase" shall mean The Chase Manhattan Bank.
"Chase Prime Rate" shall mean the rate of interest from time to time
announced by Chase at the Chase Principal Office as its prime commercial lending
rate, each change in the Chase Prime Rate shall be effective from and including
the date such change is publicly announced as being effective.
"Chase Principal Office" shall mean the principal office of Chase,
located on the date hereof at 270 Park Avenue, New York, New York 10017.
"Closing Date" shall mean the date upon which the initial extension of
credit hereunder is made.
"Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time.
"Collateral" shall have the meaning ascribed to it in the Security
Agreement.
"Collateral Account" shall mean a securities account of the Borrower
(as defined in Article 8 of the UCC) held by the Collateral Agent for the
benefit of the Lenders at its Principal Office or at another depositary
institution acceptable to the Collateral Agent, pursuant to the terms of either
(x) one of the agreements enumerated in Section 6.01(i) hereof or (y) another
security agreement acceptable in form and substance to the Collateral Agent.
"Combined Material Adverse Effect" shall mean a material adverse
effect on (a) the Property, business, operations, financial condition,
prospects, liabilities or capitalization of the Borrower, the Guarantors and
their respective Subsidiaries taken as a whole, or (b) the ability of the
Borrower and the Guarantors to perform their respective obligations under any of
the Basic Documents to which they are a party.
"Commitment" shall mean, for each Lender, the obligation of such
Lender to make Loans and incur Letter of Credit Liabilities in an aggregate
principal amount at any one time outstanding up to but not exceeding the amount
set forth opposite the name of such Lender on the signature pages hereof under
the caption "Commitment" (as the same may be reduced from time to time pursuant
to Sections 2.05 and 2.11 hereof).
"Commitment Percentage" shall mean, with respect to any Lender, the
ratio of (a) such Lender's Commitment to (b) the Total Commitment.
"Commitment Termination Date" shall mean the earlier to occur of (x)
February 28, 2003; and (y) 30 days prior to the Master Credit Support Agreement
Termination Date (as such date may be extended without interruption one or more
times subsequent to the date hereof), which, based upon The Master Credit
Support Agreement Termination Date in effect on the Closing Date, would result
in a Commitment Termination Date of November 30, 2000 unless subsequently
extended.
"Continue", "Continuation" and "Continued" shall refer to the
continuation pursuant to Section 2.10 hereof of a LIBOR Loan from one Interest
Period to the next Interest Period.
"Convert", "Conversion" and "Converted" shall refer to a conversion
pursuant to Section 2.10 hereof of one Type Loan into another Type of Loan,
which may be accompanied by the transfer by a Lender (at its sole discretion) of
a Loan from one Applicable Lending Office to another.
"Current Assets" as determined in accordance with GAAP, consistently
applied; provided, however, that there shall be excluded from Current Assets,
any of such assets that (a) are subject to a pledge, lien or security interest
held by any Person other than the Agent or the Collateral Agent to secure
payment of any Indebtedness that is not included in Current Liabilities to the
extent of such Indebtedness, or (b) represent accounts receivable due from any
Affiliate on terms that are more favorable to such Affiliate than those which
would have resulted from an arm's length negotiation.
"Current Liabilities" shall include, as determined in accordance with
GAAP, consistently applied, as of the date of determination thereof: (a) all
Indebtedness (other than the Obligations) payable on demand or maturing within
one year after such date without any option on the part of the obligor to extend
or renew beyond such year, (b) final maturities, installments and prepayments of
Indebtedness (other than the Obligations) required to be made within one year
after such date, and (c) all other items (including taxes accrued as estimated
and reserves for deferred income taxes but excluding the Obligations) that in
accordance with GAAP, would be included on a balance sheet as current
liabilities.
"Current Ratio" shall mean, with respect to any Person at any time,
the ratio of such Person's Current Assets to Current Liabilities.
"Default" shall mean an Event of Default or an event that with notice
or lapse of time or both would become an Event of Default.
"Documentary Letter of Credit" shall mean a Letter of Credit relating
to a purchase of goods or similar transaction by the Borrower which, by its
terms, requires the presentation by the beneficiary of bills of lading, invoices
or similar shipping or title documents prior to a permitted drawing thereon.
"Dollars" and "$" shall mean lawful money of the United States of
America.
"Eligible Account Receivable" shall mean an Account Receivable (a)
payable to the Borrower, (b) with respect to which the Collateral Agent has a
perfected first priority security interest, and (c) which arises in the ordinary
course of the Borrower's business and is negotiated on an arm's length basis in
accordance with industry standard terms and conditions; provided that "Eligible
Accounts Receivable" shall not include the following (determined without
duplication):
(i) any Account Receivable not payable in Dollars, provided, however,
such Account Receivable may be payable in another currency if the market risk
with respect to price fluctuations in such currency against Dollars has been
properly hedged in accordance with the Borrower's customary practices and
procedures;
(ii) any Account Receivable that, at the date of issuance of the
invoice therefor, was payable more than 30 days after shipment of the related
Inventory;
(iii) any Account Receivable owing from an account debtor whose
principal place of business is located outside of the United States of America
unless such account debtor is an Approved Obligor;
(iv) any Account Receivable that remains unpaid for more than 45
days after the payment due date stated in the original invoice therefor;
(v) all Accounts Receivable of any account debtor if the Receivables
owing from such account debtor shall at the time have remained unpaid in an
amount, singly or in the aggregate, of more than $250,000 for more than 60 days
after the payment due date stated in the original invoice therefor;
(vi) any Account Receivable (or portion of the amount thereof) as to
which there is any unresolved dispute with the respective account debtor (but
only to the extent of the amount thereof in dispute);
(vii) any Account Receivable evidenced by an instrument (as defined
in the UCC) not in the possession of the Agent;
(viii) any Account Receivable representing an obligation for goods
sold on consignment, approval or a sale-or-return basis or subject to any other
repurchase or return arrangement, except to the extent the Agent and the
Majority Lenders shall have otherwise agreed in writing;
(ix) any Account Receivable arising under a contract that is subject
to a security classification imposed by a government or a governmental
subdivision or agency or otherwise may be not be pledged or hypothecated under
applicable law;
(x) any Account Receivable (or portion of the amount thereof) that
pursuant to its terms is subject to any right of setoff or counterclaim on the
part of the related customer against the Borrower (and only to the extent of the
amount of such debt or the obligation of such customer to the Borrower);
(xi) any Account Receivable arising from the purchase and sale of
contracts representing Following Month Nominations relating to the month after
the month in which the Commitment Termination Date occurs; and
(xii) any Account Receivable, the related sales invoice with
respect to which has not been marked with a legend reasonably acceptable to the
Agent to the effect that the Account Receivable arising from such invoice has
been pledged by the Borrower to a financial institution in connection with a
credit agreement and instructing such obligor to pay the proceeds of such
Account Receivable into an account specified therein in which the Collateral
Agent shall have been granted a first-priority perfected security interest,
provided that this requirement shall not be applicable to those Accounts
Receivable included in the Borrowing Base on the Closing Date for so long as
such Accounts Receivable remain in the Borrowing Base.
The aggregate value of Eligible Accounts Receivable, for purposes of
calculating the Borrowing Base hereunder shall be the aggregate invoiced amount
due and owing to the Borrower with respect to such Eligible Accounts Receivables
less any reductions of such amount required by clauses (vi) or (x) above, such
amount to be reduced by 50% of the First Purchaser Liabilities reflected in such
Accounts Receivable at such time.
"Eligible Inventory" shall mean, as at any date, (determined without
duplication) all Inventory that:
(a) is owned solely by the Borrower as at such date;
(b) is in good salable condition, not deteriorating in quality or
obsolete and is subject to internal controls and management procedures
established by the Borrower and approved by the Agent;
(c) is subject to a first priority security interest of the
Collateral Agent and is not subject to any other Lien other than Permitted
Liens, and is (i) in transit by pipeline or tank truck to a location acceptable
to the Agent, or (ii) stored in tanks at a third-party owned location in the
United States acceptable to the Agent; provided that the Borrower retains title
to such Inventory and receives regular statements from the third-party owner of
such tanks with respect to Borrower's ownership rights with respect to such
Inventory (regardless of whether such inventory is segregated or commingled, or
(iii) in the possession of the issuer of a negotiable document therefor issued
to the order of the Collateral Agent and not covered by a non-negotiable
document of title unless the Agent is in possession of such document and named
as consignee thereon and such non-negotiable document is issued to the order of
the Collateral Agent or (iv) is in transit by ship or barge and, if such
Inventory is in transit by ship or barge to or from a foreign location, such
Inventory is covered by an ocean bill of lading issued to the order of the
Collateral Agent;
(d) is currently saleable in the normal course of the Borrower's
business without any notice to, or consent of, any governmental agency or
department or division thereof;
(e) does not consist of bill-and-hold goods (i.e., Inventory which
has been sold by the Borrower but which is being held by the Borrower pending
delivery); and
(f) does not consist of line fills, as such may be designated by
pipeline operating companies with which the Borrower does business from time to
time.
The Majority Lenders (through the Agent) may exclude from Eligible
Inventory any type of Inventory that the Majority Lenders (in their reasonable
discretion) determine to be unmarketable. The aggregate value of Eligible
Inventory, for purposes of calculating the Borrowing Base hereunder, shall be
marked to market on each date as of which a Borrowing Base Certificate is to be
delivered pursuant to Section 8.01(d) hereof or as otherwise requested by the
Agent, utilizing Platt's (or if Platt's does not publish such prices, such other
recognized publisher of such prices as shall be acceptable to the Agent),
properly adjusted for location pricing differentials and other valuation
adjustments in accordance with Borrower's customary strategies, practices and
procedures; such valuation methods, strategies, practices and procedures to be
explained by officers or employees of the Borrower to the Agent or any
requesting Lender telephonically or in the context of an audit pursuant to
Section 8.01(e) hereof or an inspection pursuant to Section 8.03(f) hereof.
"Eligible Investment Grade Account Receivable" shall mean any
Eligible Account Receivable with respect to which, either the obligor or the
bank issuing a letter of credit backing the obligation of the obligor, as the
case may be, has a long-term debt rating of BBB- or greater from S&P or its
equivalent from Moody's Investors Service, Inc.
"Eligible Letters of Credit" shall mean, at any time and from time to
time, the aggregate undrawn Face Amount of Letters of Credit issued for the
benefit of the Borrower as to which: (a) the expiry date has not occurred, (b)
such Letter of Credit is a legal, valid, binding and irrevocable obligation of
an issuing bank satisfactory to the Agent in all other respects in its
discretion; (c) the Collateral Agent has a perfected first priority assignment
and security interest in the proceeds thereof (by means of the methods provided
therefor in Section 5-116 of the UCC, Section 5.114 of the Texas UCC or other
applicable similar provision of another state's UCC), (d) the Agent shall be
named as advising bank, or the advising bank, if not the Agent, shall have
physical possession of such Letter of Credit and shall have agreed in writing in
a form reasonably acceptable to the Agent to act as its agent and bailee for
purposes of perfecting its assignment and security interest, (e) the Inventory
being financed thereby shall be Eligible Inventory which shall not have been
delivered to the account party nor shall title with respect thereto have passed,
and (f) such Letters of Credit shall not be issued in support of Following Month
Nominations otherwise included in the Borrowing Base as Eligible Investment
Grade Accounts Receivable or Eligible Non-Investment Grade Accounts Receivable.
"Eligible Non-Investment Grade Account Receivable" shall mean any
Eligible Account Receivable (a) which is not an Eligible Investment Grade
Account Receivable, and (b) with respect to which either the obligor is an
Approved Obligor or the bank issuing a letter of credit backing the obligation
of the obligor has been pre-approved by the Agent in its discretion.
"Environmental Claim" shall mean, with respect to any Person, any
written or oral notice, claim, demand or other communication (collectively, a
"claim") by any other Person alleging or asserting such Person's liability for
investigatory costs, cleanup costs, governmental response costs, damages to
natural resources or other Property, personal injuries, fines or penalties
arising out of, based on or resulting from (a) the presence, or Release into the
environment, of any Hazardous Material at any location, whether or not owned by
such Person, or (b) circumstances forming the basis of any violation, or alleged
violation, of any Environmental Law. The term "Environmental Claim" shall
include, without limitation, any claim by any governmental authority for
enforcement, cleanup, removal, response, remedial or other actions or damages
pursuant to any applicable Environmental Law, and any claim by any third party
seeking damages, contribution, indemnification, cost recovery, compensation or
injunctive relief resulting from the presence of Hazardous Materials or arising
from alleged injury or threat of injury to health, safety or the environment.
"Environmental Laws" shall mean any and all present and future
Federal, state, local and foreign laws, rules or regulations, and any orders or
decrees, in each case as now or hereafter in effect, relating to the regulation
or protection of human health, safety or the environment or to emissions,
discharges, releases or threatened releases of pollutants, contaminants,
chemicals or toxic or hazardous substances or wastes into the indoor or outdoor
environment, including, without limitation, ambient air, soil, surface water,
ground water, wetlands, land or subsurface strata, or otherwise relating to the
manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of pollutants, contaminants, chemicals or toxic or
hazardous substances or wastes.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended from time to time.
"ERISA Affiliate" shall mean any corporation or trade or business that
is a member of any group of organizations (a) described in Section 414(b) or (c)
of the Code of which the Borrower is a member and (b) solely for purposes of
potential liability under Section 302(c)(11) of ERISA and Section 412(c)(11) of
the Code and the lien created under Section 302(f) of ERISA and Section 412(n)
of the Code, described in Section 414(m) or (o) of the Code of which the
Borrower is a member.
"Event of Default" shall have the meaning assigned to such term in
Section 9 hereof.
"Extended L.C. Cash Collateral Deposit" shall have the meaning
assigned to such term in Section 2.12(a) hereof.
"Extended Letter of Credit" shall have the meaning assigned to such
term in Section 2.12(a) hereof.
"Face Amount" shall mean, with respect to any Letter of Credit or any
other letter of credit referred to herein, the maximum aggregate amount the
Letter of Credit Issuer (or, with respect to any other letter of credit, the
related issuing bank) may be obligated to pay to the beneficiary pursuant to the
terms of such Letter of Credit or other letter of credit and which, with respect
to any Letter of Credit or other letter of credit issued in an "approximate"
face amount or in a face amount with a tolerance of "plus or minus 10 per cent",
shall equal the sum of such face amount plus 10 per cent of such face amount or
such amount as shall be otherwise stipulated in the Letter of Credit or other
letter of credit.
"Federal Funds Rate" shall mean, for any day, the rate per annum
(rounded upwards, if necessary, to the nearest 1/100 of 1%) equal to the
weighted average of the rates on overnight Federal funds transactions with
members of the Federal Reserve System arranged by Federal funds brokers on such
day, as published by the Federal Reserve Bank of New York on the Business Day
next succeeding such day, provided that (a) 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 (b) if such rate is not so
published for any Business Day, the Federal Funds Rate for such Business Day
shall be the average rate charged to BNP Paribas on such Business Day on such
transactions as reasonably determined by the Agent.
"First Purchaser Liabilities" shall mean payment obligations arising
from the Borrower's purchase of crude oil which shall, as determined by the
Agent in its sole discretion, be secured by a statutory "first purchaser" lien
pursuant to any applicable law, but only to the extent that payment of such
obligations is not guaranteed by Salomon Smith Barney Holdings Inc. or otherwise
supported by a letter of credit reasonably acceptable to the Agent.
"First Purchaser Liability Report" shall mean a report in the form of
Schedule 5 hereto, to be delivered by the Borrower to the Agent pursuant to
Section 8.01(d) hereof.
"Following Month Nominations" shall mean, as provided in any
Nomination Report, the transactions for the crude oil campaign in the month
succeeding the month in which the related Nomination Report is delivered
pursuant to Section 8.01(d) hereof (based on preliminary information which will
be updated with finalized information, from a nominated standpoint, no later
than three business days after crude scheduling).
"Futures Account Pledge Agreement" shall have the meaning assigned to
such term in Section 6.01(i) hereof.
"GAAP" shall mean generally accepted accounting principles applied on
a basis consistent with those that, in accordance with the last sentence of
Section 1.02 hereof, are to be used in making the calculations for purposes of
determining compliance with this Agreement.
"Genesis Energy L.P." shall mean Genesis Energy L.P. , a limited
partnership formed and existing under the laws of the State of Delaware.
"Guarantee" shall mean a guarantee, an endorsement, a contingent
agreement to purchase or to furnish funds for the payment or maintenance of, or
otherwise to be or become contingently liable under or with respect to, the
Indebtedness, other obligations, net worth, working capital or earnings of any
Person, or a guarantee of the payment of dividends or other distributions upon
the stock or equity interests of any Person, or an agreement to purchase, sell
or lease (as lessee or lessor) Property, products, materials, supplies or
services primarily for the purpose of enabling a debtor to make payment of such
debtor's obligations or an agreement to assure a creditor against loss, and
including, without limitation, causing a bank or other financial institution to
issue a letter of credit or other similar instrument for the benefit of another
Person, but excluding endorsements for collection or deposit in the ordinary
course of business. The terms "Guarantee" and "Guaranteed" used as a verb shall
have a correlative meaning.
"Guarantor(s)" shall mean each of Genesis Pipeline Texas, L. P., a
Delaware limited partnership and a Subsidiary of the Borrower and Genesis
Pipeline USA, L.P., a Delaware limited partnership and a Subsidiary of the
Borrower, each as guarantor, pursuant to the terms of the Guaranty Agreements.
"Guaranty Agreements" shall mean those certain Guaranty Agreements
executed by each of the Guarantors jointly and severally in favor of the Agent
for the benefit of the Lenders, substantially in the form of Exhibit E hereto,
as such agreements may be amended or modified pursuant to the terms thereof from
time to time.
"Hazardous Material" shall mean, collectively, (a) any petroleum or
petroleum products, flammable materials, explosives, radioactive materials,
asbestos, urea formaldehyde foam insulation, and transformers or other equipment
that contain polychlorinated biphenyls, (b) any chemicals or other materials or
substances that are now or hereafter become defined as or included in the
definition of "hazardous substances", "hazardous wastes", "hazardous materials",
"extremely hazardous wastes", "restricted hazardous wastes", "toxic substances",
"toxic pollutants", "contaminants", "pollutants" or words of similar import
under any Environmental Law and (c) any other chemical or other material or
substance, exposure to which is now or hereafter prohibited, limited or
regulated under any Environmental Law.
"Indebtedness" shall mean, for any Person: (a) obligations created,
issued or incurred by such Person for borrowed money (whether by loan, the
issuance and sale of debt securities or the sale of Property to another Person
subject to an understanding or agreement, contingent or otherwise, to repurchase
such Property from such Person); (b) obligations of such Person to pay the
deferred purchase or acquisition price of Property or services, other than trade
accounts payable (other than for borrowed money) arising, and accrued expenses
incurred, in the ordinary course of business; (c) Indebtedness of others secured
by a Lien on the Property of such Person, whether or not the respective
indebtedness so secured has been assumed by such Person; (d) obligations of such
Person in respect of letters of credit or similar instruments issued or accepted
by banks and other financial institutions for account of such Person; (e)
Capital Lease Obligations of such Person; and (f) Indebtedness of others
Guaranteed by such Person.
"Interest Period" shall mean with respect to any LIBOR Loan, each
period of no less than 7 and no greater than 30 days commencing on the date such
Loan is made or converted from a Loan or Loans of another Type, or the last day
of the next preceding Interest Period with respect to such Loan, and ending on
such day during the immediately subsequent period, in each case as the Borrower
may select as provided in Section 4.05 hereof. The foregoing notwithstanding,
each Interest Period that would otherwise end on a day that is not a LIBOR
Business Day shall end on the next succeeding LIBOR Business Day (or, if such
next succeeding LIBOR Business Day falls in the next succeeding calendar month,
on the immediately preceding LIBOR Business Day).
"Intercreditor Agreement" shall have the meaning ascribed to such term
in Section 6.01(k) of this Agreement.
"Inventory" shall mean crude oil and feedstock owned by the Borrower
and maintained as inventory (as such term is defined in the UCC) in the ordinary
course of its business.
"Investment" shall mean, for any Person: (a) the acquisition (whether
for cash, Property, services or securities or otherwise) of capital stock,
bonds, notes, debentures, partnership or other ownership interests or other
securities of any other Person or any agreement to make any such acquisition
(including, without limitation, any "short sale" or any sale of any securities
at a time when such securities are not owned by the Person entering into such
sale); (b) the making of any deposit with, or advance, loan or other extension
of credit to, any other Person (including the purchase of Property from another
Person subject to an understanding or agreement, contingent or otherwise, to
resell such Property to such Person), but excluding any such advance, loan or
extension of credit having a term not exceeding 180 days arising in connection
with the sale of inventory, services or supplies by such Person in the ordinary
course of business; or (c) the entering into of any Guarantee of, or other
contingent obligation with respect to, Indebtedness or other liability of any
other Person and (without duplication) any amount committed to be advanced, lent
or extended to such Person.
"Joint Venture" shall mean a single-purpose corporation, partnership,
joint venture or other similar legal arrangement (whether created by contract or
conducted through a separate legal entity) now or hereafter formed by the
Borrower or any of its Subsidiaries with another Person in order to conduct a
common venture or enterprise with such Person.
"Lenders" shall mean (a) on the date hereof, the Lenders having
Commitments on the signature pages hereof and (b) thereafter, the Lenders from
time to time holding Loans and Commitments after giving effect to any
assignments thereof permitted by Section 11.06(b) hereof.
"Letter of Credit" shall mean a Long-Term Letter of Credit or a
Short-Term Letter of Credit issued hereunder, and which may be a Documentary
Letter of Credit or a Stand-by Letter of Credit.
"Letter of Credit Documents" shall mean, with respect to any Letter of
Credit, collectively, any application therefor and any other agreements,
instruments, guarantees or other documents (whether general in application or
applicable only to such Letter of Credit) governing or providing for (a) the
rights and obligations of the parties concerned or at risk with respect to such
Letter of Credit or (b) any collateral security for any of such obligations,
each as the same may be modified and supplemented and in effect from time to
time.
"Letter of Credit Interest" shall mean, for each Lender, such Lender's
participation interest (or, in the case of any Letter of Credit Issuer, such
Letter of Credit Issuer's retained interest) in the Letter of Credit Issuer's
liability under Letters of Credit and such Lender's rights and interests in
Reimbursement Obligations and fees, interest and other amounts payable in
connection with Letters of Credit and Reimbursement Obligations.
"Letter of Credit Issuer" shall mean, with respect to each Letter of
Credit, BNP Paribas, together with its successors and assigns in such capacity.
"Letter of Credit Liability" shall mean, without duplication, at any
time and in respect of any Letter of Credit, the sum of (a) the undrawn Face
Amount of such Letter of Credit plus (b) the aggregate unpaid principal amount
of all Reimbursement Obligations of the Borrower at such time due and payable in
respect of all drawings made under such Letter of Credit. For purposes of this
Agreement, a Lender (other than the Letter of Credit Issuer with respect to any
Letter of Credit) shall be deemed to hold a Letter of Credit Liability in an
amount equal to its participation interest in the related Letter of Credit under
Section 2.03 hereof, and the Letter of Credit Issuer with respect to such Letter
of Credit shall be deemed to hold a Letter of Credit Liability in an amount
equal to its retained interest in the related Letter of Credit after giving
effect to the acquisition by the Lenders other than such Letter of Credit Issuer
of their participation interests under said Section 2.03.
"Leverage Ratio" shall mean, with respect to the Borrower and its
Subsidiaries the ratio of Total Liabilities to Tangible Capital Base.
"LIBOR Base Rate" shall mean, with respect to any LIBOR Loan for any
Interest Period therefor, the rate per annum which appears on the display
designated as the British Banker's Association Interest Settlement Rate which
appears on page 3750 or page 3740, as applicable, of the Dow Jones Telerate
Monitor for U.S. dollar loans of a similar amount and having a term comparable
to such Interest Period at approximately 11:00 a.m. London time (or as soon
thereafter as practicable) on the date two Business Days prior to the first day
of such Interest Period for a loan amount comparable to the principal amount of
the LIBOR Loan to be made for such Interest Period; or, if such rate is not
available or such rate does not appear on either Telerate page 3750 or 3740, as
the case may be, such rate as may appear on the "LIBO Page" on the Reuters
Monitor Money Rates Service for U.S. dollar loans of a similar amount and
having a term comparable to such Interest Period.
"LIBOR Loans" shall mean Loans that bear interest at rates based on
rates referred to in the definition of "LIBOR Rate" in this Section 1.01.
"LIBOR Rate" shall mean, for any LIBOR Loan for any Interest Period
therefor, a rate per annum (rounded upwards, if necessary, to the nearest 1/100
of 1%) determined by the Agent to be equal to the LIBOR Base Rate for such Loan
for such Interest Period divided by 1 minus the Reserve Requirement (if any) for
such Loan for such Interest Period.
"Lien" shall mean, with respect to any Property, any mortgage, lien,
pledge, charge, security interest or encumbrance of any kind in respect of such
Property. For purposes of this Agreement and the other Basic Documents, a
Person shall be deemed to own subject to a Lien any Property that it has
acquired or holds subject to the interest of a vendor or lessor under any
conditional sale agreement, capital lease or other title retention agreement
(other than an operating lease) relating to such Property.
"Loans" shall mean the loans provided for in Section 2.01 hereof,
which may be Prime Rate Loans or LIBOR Loans.
"Long Position" means the aggregate number of barrels of petroleum
products which are either held in inventory by the Borrower or which the
Borrower has contracted to purchase (whether by purchase of a contract on a
commodities exchange or otherwise), or which the Borrower will receive on
exchange or under a Swap Contract including, without limitation, all option
contracts representing the obligation of the Borrower to purchase products at
the option of a third party, and in each case, for which a fixed purchase price
has been set. Long Positions will be expressed as a positive number.
"Long-Term Letter of Credit" shall mean a Letter of Credit having a
tenor of more than 75 days but no greater than 180 days from its date of
issuance.
"Long-Term Letter of Credit Termination Date" shall mean, with respect
to any Long-Term Letter of Credit issued hereunder, a date greater than 75 days
but less than 181 days after the issue date.
"Majority Lenders" shall mean Lenders having at least 66 2/3% of the
aggregate amount of the Commitments or, if the Commitments shall have
terminated, Lenders holding at least 66 2/3% of the sum of (a) the aggregate
unpaid principal amount of the Loans plus (b) the aggregate amount of all
Letter of Credit Liabilities.
"Management Fees" shall mean, for any period, all fees, emoluments or
similar compensation paid or incurred by any Person (other than any such fees,
emoluments or similar compensation paid to or incurred and payable to the
Borrower or any of the Subsidiaries) in respect of services rendered in
connection with the management or supervision of the management of such Person,
other than salaries, bonuses and other compensation paid to any full-time
executive employee in respect of such full-time employment and other than
amounts paid to unrelated third parties (not in any event Affiliates of the
Borrower) in respect of consulting in the ordinary course of business of the
Borrower and its Subsidiaries.
"Margin Stock" shall mean "margin stock" within the meaning of
Regulations U and X.
"Master Credit Support Agreement" shall mean that certain Master
Credit Support Agreement dated as of December 3, 1996, by and among the
Borrower, Basis Petroleum, Inc. and Salomon Inc. as amended or otherwise
modified from time to time as permitted pursuant to the terms hereof.
"Master Credit Support Agreement Termination Date" shall mean the date
on which the Master Credit Support Agreement is scheduled to terminate.
"Maturity Date" shall mean, with respect to any Borrowing, the date
such Borrowing is to be repaid by the Borrower hereunder, which shall be no
greater than 30 days after the date on which the Loans comprising such Borrowing
were made.
"Minimum Quarterly Distribution" shall have the same meaning ascribed
to such term in the Amended and Restated Agreement of Limited Partnership of the
Borrower dated as of December 3, 1996 as amended or otherwise modified from time
to time in accordance therewith.
"Multiemployer Plan" shall mean a multiemployer plan defined as such
in Section 3(37) of ERISA to which contributions have been made by the Borrower
or any ERISA Affiliate and that is covered by Title IV of ERISA.
"Net Equity Value in Futures Accounts" means the net liquidating value
(as determined from time to time by Paribas Futures, Inc. or the applicable
broker in accordance with customary industry procedures) of futures accounts
held by the Borrower at Paribas Futures, Inc. or other brokers acceptable to the
Agent in its discretion and which accounts are pledged to the Agent as
collateral security for the Loans pursuant to the Futures Account Pledge
Agreement or another security agreement in form and substance acceptable to the
Agent.
"Net Position" means the sum of all Long Positions and Short Positions
of the Borrower regardless of product type
"Net Position Report" means a monthly report in form reasonably
acceptable to the Agent in its discretion which details the Borrower's Net
Position, marked to market based on the most recent daily pricing provided by
Platt's or other commodity pricing reports or other sources acceptable to the
Agent and reflecting the grade and Adjusted Inventory Value of all Inventory.
Such report shall include all Long Positions and all Short Positions for all
relevant time periods specifying exact location and grade, and cover all
instruments that create either an obligation to purchase or sell petroleum
products or that generate price exposure of any kind (including without
limitation, all current and forward fixed-price transactions). Such instruments
shall include contracts for spot and future deliveries of physical petroleum
products, inventory, exchanges, derivatives (including Swap Contracts and option
contracts) and all futures contracts.
"Nomination Report" shall mean a report in the form of Schedule 4
hereto, to be delivered by the Borrower to the Agent pursuant to Section 8.01(d)
hereof.
"Notes" shall mean the promissory notes provided for by Section
2.09(a) hereof and all promissory notes delivered in substitution or exchange
therefor, in each case as the same shall be modified and supplemented and in
effect from time to time.
"Notice of Claim" shall have the meaning assigned to such term in
Section 11.03(e)(i) hereof.
"Notice Period" shall have the meaning assigned to such term in
Section 11.03(e)(i) hereof.
"Obligations" shall mean any and all of the debts, obligations and
liabilities of the Borrower to the Lenders or the Agent provided for or arising
under the Basic Documents to which the Borrower is a party (including, without
limitation, the obligation to repay Loans and to pay interest thereon and all
fees due and owing to the Agent and the Lenders hereunder), whether now
existing, or hereafter arising, voluntary or involuntary, direct or indirect,
absolute or contingent, liquidated or unliquidated, and whether or not from time
to time decreased or extinguished and later increased, created or incurred.
"PBGC" shall mean the Pension Benefit Guaranty Corporation or any
entity succeeding to any or all of its functions under ERISA.
"Permitted Liens" shall mean:
(a) Liens imposed by any governmental authority for Taxes,
assessments or charges not yet due or that are being contested in good faith and
by appropriate proceedings if, unless the amount thereof is not material with
respect to it or its financial condition, adequate reserves with respect thereto
are maintained on the books of the affected Borrower or the affected related
Subsidiaries, as the case may be, in accordance with GAAP;
(b) carriers', warehousemen's, mechanics', materialmen's, repairmen's
or other like Liens arising in the ordinary course of business that are not
overdue for a period of more than 60 days or that are being contested in good
faith and by appropriate proceedings;
(c) pledges or deposits under worker's compensation, unemployment
insurance and other social security legislation;
(d) deposits to secure the performance of bids, trade contracts
(other than for Indebtedness), leases, statutory obligations, surety and appeal
bonds, performance bonds and other obligations of a like nature incurred in the
ordinary course of business;
(e) easements, rights-of-way, restrictions and other similar
encumbrances incurred in the ordinary course of business and encumbrances
consisting of zoning restrictions, easements, licenses, restrictions on the use
of the Collateral or minor imperfections in title thereto that, in the
aggregate, are not material in amount, and that do not in any case materially
detract from the value of the Collateral subject thereto or interfere with the
ordinary conduct of the business of the Borrower or any of its Subsidiaries; and
(f) liens granted in connection with certain leasing transactions as
set forth on Schedule 2 hereto.
"Person" shall mean any individual, corporation, company, voluntary
association, partnership, limited liability company, joint venture, trust,
unincorporated organization or government (or any agency, instrumentality or
political subdivision thereof).
"Plan" shall mean an employee benefit or other plan established or
maintained by the Borrower or any ERISA Affiliate and that is covered by Title
IV of ERISA, other than a Multiemployer Plan.
"Platt's" shall mean the daily Platt's Americas Crude Oil Assessments
published by Standard & Poor's, a division of The McGraw Hill Companies.
"Pledge of Account Agreement" shall have the meaning ascribed to such
term in Section 6.01(i) hereof.
"Post-Default Rate" shall mean, in respect of any principal of any
Loan, or any other amount under this Agreement, any Note or any other Basic
Document that is not paid when due (whether at stated maturity, by acceleration,
by optional or mandatory prepayment or otherwise), a rate per annum during the
period from and including the due date to but excluding the date on which such
amount is paid in full equal to 2.0% plus the interest rate for such Loan as
provided in Section 3.02 hereof.
"Prime Rate Loans" shall mean Loans that bear interest at rates based
upon the Chase Prime Rate.
"Principal Office" shall mean the principal office of BNP Paribas' New
York Branch, located on the date hereof at 787 Seventh Avenue, New York, New
York 10019.
"Property" shall mean any right or interest in or to property of any
kind whatsoever, whether real, personal or mixed and whether tangible or
intangible.
"Purchase Money Security Interest" shall have the meaning ascribed to
such term in Section 8.06(d) hereof.
"Regulations A, D, U and X" shall mean, respectively, Regulations A,
D, U and X of the Board of Governors of the Federal Reserve System (or any
successor), as the same may be modified and supplemented and in effect from time
to time.
"Regulatory Change" shall mean, with respect to any Lender, any change
after the date hereof in Federal, state or foreign law or regulations
(including, without limitation, Regulation D) or the adoption or making after
such date of any interpretation, directive or request applying to a class of
banks including such Lender of or under any Federal, state or foreign law or
regulations (whether or not having the force of law and whether or not failure
to comply therewith would be unlawful) by any court or governmental or monetary
authority charged with the interpretation or administration thereof.
"Reimbursement Obligations" shall mean, at any time, the obligation of
the Borrower then outstanding in respect of all Letters of Credit then
outstanding, to reimburse amounts paid by the Letter of Credit Issuer in respect
of any drawings under a Letter of Credit.
"Release" shall mean any release, spill, emission, leaking, pumping,
injection, deposit, disposal, discharge, dispersal, leaching or migration of
Hazardous Materials into the indoor or outdoor environment, including, without
limitation, the movement of Hazardous Materials through ambient air, soil,
surface water, ground water, wetlands, land or subsurface strata.
"Relevant Parties" shall have the meaning assigned to such term in
Section 9(b) hereof.
"Reserve Requirement" shall mean, for any Interest Period for any
LIBOR Loan, the average maximum rate at which reserves (including, without
limitation, any marginal, supplemental or emergency reserves) are required to be
maintained during such Interest Period under Regulation D by member banks of the
Federal Reserve System in New York City with deposits exceeding one billion
Dollars against "Eurocurrency liabilities" (as such term is used in Regulation
D). Without limiting the effect of the foregoing, the Reserve Requirement shall
include any other reserves required to be maintained by such member banks by
reason of any Regulatory Change with respect to (a) any category of liabilities
that includes deposits by reference to which the LIBOR Base Rate for LIBOR Loans
is to be determined as provided in the definition of "LIBOR Base Rate" in this
Section 1.01 or (b) any category of extensions of credit or other assets that
includes LIBOR Loans.
"Restricted Unit Plan" shall mean the Amended and Restated Restricted
Unit Plan adopted January 27, 1997 for key employees of the General Partner to
provide for the award of rights to receive common units under certain
restrictions, as amended or otherwise amended from time to time as permitted
thereby.
"Salomon Guaranties" shall mean the guaranties issued by Salomon Smith
Barney Holdings Inc. in support of certain of the Borrower's trade obligations
in accordance with the terms of the Master Credit Support Agreement.
"Security Agreement" shall mean an Amended and Restated Security
Agreement by and among the Borrower, BNP Paribas, as Collateral Agent for the
Lenders and Salomon Smith Barney Holdings Inc. substantially in the form of
Exhibit C hereto, as the same shall be modified and supplemented and in effect
from time to time.
"Security Documents" shall mean, collectively, the Security Agreement,
the Intercreditor Agreement, the Pledge of Account Agreement, the Futures
Account Pledge Agreement, all Uniform Commercial Code financing statements
required by the Security Agreement and any other security agreement entered into
by the Borrower (pursuant to Section 6.01(i) or otherwise) purporting to grant a
security interest to the Collateral Agent or the Agent as applicable, in any
item of personal property constituting Collateral from time to time.
"Short Position" means the aggregate number of barrels of petroleum
product which the Borrower has contracted to sell (whether by sale of a contract
on a commodities exchange or otherwise) or deliver on exchange or under a Swap
Contract, including, without limitation, all option contracts representing the
obligation of the Borrower to sell petroleum products at the option of a third
party and in each case for which a fixed sales price has been set. Short
Positions shall be expressed as a negative number.
"Short-Term Letter of Credit" shall mean a Letter of Credit having a
tenor of not more than 75 days from the date of issuance thereof.
"Short-Term Letter of Credit Termination Date" shall mean, with
respect to any Short-Term Letter of Credit issued hereunder, a date not more
than 75 days after the issue date thereof.
"Stand-By Letter of Credit" shall mean a Letter of Credit which, by
its terms, is to be drawn upon in the event that the beneficiary thereof
presents to the Letter of Credit Issuer a statement or statements signed by a
purportedly authorized officer thereof indicating the Borrower's non-performance
of certain trade payment or purchase obligations to the beneficiary as more
fully described in such statement.
"Subordinated Indebtedness" shall mean, with respect to any Person
collectively, Indebtedness (a) for which such Person is directly and primarily
liable, (b) in respect of which none of the Subsidiaries of such Person is
contingently or otherwise obligated and (c) that is subordinated to the
obligations of such Person hereunder (or, with respect to the Guarantors,
expressly subordinated to the obligations of the Guarantors pursuant to Section
2.04 of each Guaranty Agreement) on terms, and pursuant to documentation
containing other terms (including interest, amortization, covenants and events
of default), in form and substance satisfactory to the Majority Lenders.
"Subsidiary" shall mean, with respect to any Person, any corporation,
partnership or other entity of which at least a majority of the securities or
other ownership interests having by the terms thereof ordinary voting power to
elect a majority of the board of directors or other persons performing similar
functions of such corporation, partnership or other entity (irrespective of
whether or not at the time securities or other ownership interests of any other
class or classes of such corporation, partnership or other entity shall have or
might have voting power by reason of the happening of any contingency) is at the
time directly or indirectly owned or controlled by such Person or one or more
Subsidiaries of such Person or by such Person and one or more Subsidiaries of
such Person.
"Swap Contract" means any agreement (including any master agreement
and any agreement, whether or not in writing, relating to any single
transaction) that is an interest rate swap agreement, basis swap, forward rate
agreement, commodity swap, commodity option, equity or equity index swap or
option, bond option, interest rate option, forward foreign exchange agreement,
rate cap, collar or floor agreement, currency swap agreement, cross-currency
rate swap agreement, currency option or any other similar agreement (including
any option to enter into any of the foregoing).
"Tangible Capital Base" shall mean , as at any date with respect to
the Borrower and its Subsidiaries (determined on a consolidated basis without
duplication and in accordance with GAAP), (a) the sum of (i) Tangible Net Worth,
plus (ii) Subordinated Indebtedness of the Borrower, plus (iii) depreciation
expense incurred after December 31, 1999, minus (b) the amount of Capital
Expenditures incurred by the Borrower after December 31, 1999.
"Tangible Net Worth" the aggregate amount of assets (less applicable
reserves and other properly deductible items) after deducting therefrom (a) all
liabilities, and (b) all goodwill, trade names, trademarks, patents, unamortized
debt discount and expense and other like intangibles to the extent not deducted
as reserves and deductible items as set forth above, all as set forth on the
most recent consolidated balance sheet of the Borrower and its consolidated
Subsidiaries and computed in accordance with GAAP.
"Taxes" means any and all present or future taxes, levies, imposts,
duties, deductions, charges or withholdings imposed by the government of the
United States of America, any other nation or any political subdivision thereof,
whether state or local, and any agency, authority, instrumentality, regulatory
body, court, central bank or other entity exercising executive, legislative,
judicial, taxing, regulatory or administrative powers or functions of or
pertaining to government.
"Total Commitment" shall mean the aggregate amount of the Lenders'
Commitments which shall be, on the Closing Date, $35,000,000, as such amount may
thereafter be reduced pursuant to Sections 2.05 and 2.11.
"Total Liabilities" shall mean, as at any date, the sum, for any
Person and its Subsidiaries (determined on a consolidated basis without
duplication in accordance with GAAP), of the following: (a) all Indebtedness
and (b) all other liabilities that should be classified as liabilities on a
balance sheet and all deferred taxes and other deferred items.
"Trading Position Limits" shall mean a limit of 500,000 net fixed
price barrels.
"Type" shall have the meaning assigned to such term in Section 1.03
hereof.
"UCC" shall mean the Uniform Commercial Code as in effect in the State
of New York, unless the context otherwise requires.
"U.S. Person" shall mean a citizen or resident of the United States of
America, a corporation, partnership or other entity created or organized in or
under any laws of the United States of America or any State thereof, or any
estate or trust that is subject to Federal income taxation regardless of the
source of its income.
"U.S. Taxes" shall mean any present or future tax, assessment or other
charge or levy imposed by or on behalf of the United States of America or any
taxing authority thereof.
"Wholly Owned Subsidiary" shall mean, with respect to any Person, any
corporation, partnership or other entity of which all of the equity securities
or other ownership interests (other than, in the case of a corporation,
directors' qualifying shares) are directly or indirectly owned or controlled by
such Person or one or more Wholly Owned Subsidiaries of such Person or by such
Person and one or more Wholly Owned Subsidiaries of such Person.
"Working Capital" shall mean, with respect to any Person and its
Subsidiaries (determined on a consolidated basis without duplication in
accordance with GAAP) as determined from time to time, the Current Assets less
Current Liabilities of such Person and such consolidated Subsidiaries as
determined in accordance with GAAP.
1.02 Accounting Terms and Determinations. Except as otherwise
expressly provided herein, all accounting terms used herein shall be
interpreted, and all financial statements and certificates and reports as to
financial matters required to be delivered to the Lenders hereunder shall be
prepared, in accordance with GAAP applied on a basis consistent with those used
in the preparation of the latest financial statements furnished to the Lenders
hereunder (which, prior to the delivery of the first financial statements under
Section 8.01 hereof, shall mean the financial statements referred to in Section
7.02 hereof). All calculations made for the purposes of determining compliance
with this Agreement shall (except as otherwise expressly provided herein) also
be made by application of GAAP as provided for in this Section 1.02.
1.03 Types of Loans. Loans hereunder are distinguished by "Type".
The "Type" of a Loan refers to whether such Loan is a Prime Rate Loan, or a
LIBOR Loan. Loans may be identified by Type.
Section 2. Commitments, Loans, Notes and Prepayments.
2.01 Loans. Each Lender severally agrees, on the terms and
conditions of this Agreement, to make loans to the Borrower in Dollars during
the period from and including the Closing Date to but not including the
Commitment Termination Date in an aggregate principal amount at any one time
outstanding up to but not exceeding the amount of the Commitment of such Lender
as in effect from time to time provided that in no event shall the aggregate
principal amount of all Loans, together with the aggregate amount of all Letter
of Credit Liabilities, exceed the lesser of (a) the Total Commitment, and (b)
the Borrowing Base. Subject to the terms and conditions of this Agreement,
during such period the Borrower may borrow, repay and reborrow the amount of the
Commitments by means of Prime Rate Loans and LIBOR Loans and may Convert Loans
of one Type into Loans of another Type (as provided in Section 2.10 hereof) or
Continue Loans of one Type as Loans of the same Type (as provided in Section
2.10 hereof). No more than eight (8) separate Interest Periods in respect of
LIBOR Loans from each Lender may be outstanding at any one time.
2.02 Borrowings of Loans. The Borrower shall give the Agent notice
of each Borrowing hereunder as provided in Section 4.05 hereof. Not later than
1:00 p.m. New York time on the date specified for each Borrowing, each Lender
shall make available the amount of the Loan or Loans to be made by it on such
date to the Agent, at account number 04-202-195 for further credit to Genesis
Crude Oil, L.P. account number 477166, ABA number 0210-0103-3 maintained by the
Agent with BNP Paribas at Bankers' Trust Company, New York, New York, in
immediately available funds, for account of the Borrower. The amount so
received by the Agent shall, subject to the terms and conditions of this
Agreement, be made available to the Borrower by depositing the same, in
immediately available funds, in an account of the Borrower maintained with BNP
Paribas at the Principal Office designated by the Borrower.
2.03 Letters of Credit. Subject to the terms and conditions of this
Agreement, the Commitments may be utilized, upon the request of the Borrower, in
addition to the Loans provided for by Section 2.01 hereof, by the issuance by
the Letter of Credit Issuer of Stand-By Letters of Credit and Documentary
Letters of Credit for account of the Borrower, provided that in no event shall
(a) the aggregate amount of all Letter of Credit Liabilities attributable to
Long-Term Letters of Credit exceed the lesser of (i) Five Million Dollars
($5,000,000) and (ii) the Borrowing Base, or (b) the expiration date of any (x)
Short-Term Letter of Credit extend beyond the Short-Term Letter of Credit
Termination Date or (y) Long-Term Letter of Credit extend beyond the Long-Term
Letter of Credit Termination Date. The following additional provisions shall
apply to Letters of Credit:
(a) The Borrower shall give the Agent irrevocable prior notice
substantially in the form of Exhibit F hereto, not later than 3:00 p.m. (New
York time) on the proposed issue date (effective upon receipt) specifying the
Business Day each Letter of Credit is to be issued, the tenor of the proposed
Letter of Credit (which shall not extend beyond the Commitment Termination Date
except as permitted pursuant to Section 2.12 hereof), and the account party or
parties therefor and describing in reasonable detail the proposed terms of such
Letter of Credit (including the beneficiary thereof) and the nature of the
transactions or obligations proposed to be supported thereby (including whether
such Letter of Credit is to be a Documentary Letter of Credit or Stand-By
Letter of Credit).
(b) On each day during the period commencing with the issuance by the
Letter of Credit Issuer of any Letter of Credit and until such Letter of Credit
shall have expired or been terminated, the Commitment of each Lender shall be
deemed to be utilized for all purposes of this Agreement in an amount equal to
such Lender's Commitment Percentage of the then undrawn Face Amount of such
Letter of Credit. Each Lender (other than the Letter of Credit Issuer) agrees
that, upon the issuance of any Letter of Credit hereunder, it shall
automatically acquire a participation in the Letter of Credit Issuer's liability
under such Letter of Credit in an amount equal to such Lender's Commitment
Percentage of such liability, and each Lender (other than the Letter of Credit
Issuer) thereby shall absolutely, unconditionally and irrevocably assume, as
primary obligor and not as surety, and shall be unconditionally obligated to the
Letter of Credit Issuer to pay and discharge when due, such Lender's Commitment
Percentage of the Letter of Credit Issuer's liability under such Letter of
Credit.
(c) Upon receipt from the beneficiary of any Letter of Credit of any
demand for payment under such Letter of Credit, the Letter of Credit Issuer
shall promptly notify the Borrower (through the Agent) of the amount to be paid
by the Letter of Credit Issuer as a result of such demand and the date on which
payment is to be made by the Letter of Credit Issuer to such beneficiary in
respect of such demand. Notwithstanding the identity of the account party or
applicant of any Letter of Credit, the Borrower hereby unconditionally agrees to
pay and reimburse the Agent for account of the Letter of Credit Issuer for the
amount of each demand for payment under such Letter of Credit that is in
compliance (under the law applicable thereto) with the provisions of such Letter
of Credit at or prior to the date on which payment has been made by the Letter
of Credit Issuer to the beneficiary thereunder, without presentment, demand,
protest or other formalities of any kind.
(d) Forthwith upon its receipt of a notice referred to in paragraph
(c) of this Section 2.03, the Borrower shall advise the Agent, as promptly as
possible but in any event before the close of business on the same Business Day
on which such notice was received, whether or not the Borrower intends to borrow
hereunder to finance its Reimbursement Obligation to the Letter of Credit Issuer
for the amount of the related demand for payment and, if it does, submit a
notice of such borrowing as provided in Section 4.05 hereof. Notwithstanding
the foregoing, (i) in the event that the Borrower shall not have notified the
Agent that it intends to borrow hereunder for purposes of financing its
Reimbursement Obligation to the Letter of Credit Issuer for the amount of the
related demand for payment, but the Borrower shall not have reimbursed the Agent
for the account of the Letter of Credit Issuer on a timely basis as required
pursuant to said paragraph (c) of this Section 2.03, the Agent shall
automatically deem such failure of payment to constitute a notice of borrowing
as provided in Section 4.05 hereof and on such date shall be deemed to have made
a Prime Rate Loan hereunder to the Borrower in an amount sufficient to satisfy
such Reimbursement Obligation in full, and (ii) in the event that on the
Commitment Termination Date there are one or more outstanding Letters of Credit
which have been drawn upon but with respect to which any Reimbursement
Obligations of the Borrower have not been paid in full for any reason whatsoever
(and which have not previously been converted to Loans hereunder pursuant to
clause (i) of this subsection (d)), on such Commitment Termination Date the
Agent shall be deemed to have made a Prime Rate Loan hereunder to the Borrower
in an amount sufficient to satisfy all of such Reimbursement Obligations in full
and such Prime Rate Loan shall be immediately due and payable pursuant to the
terms of Section 3.01 hereof on such date.
(e) Each Lender (other than the Letter of Credit Issuer with respect
to any Letter of Credit) shall pay to the Agent for account of such Letter of
Credit Issuer at the Principal Office in Dollars and in immediately available
funds, the amount of such Lender's Commitment Percentage of any payment under a
Letter of Credit upon notice by such Letter of Credit Issuer (through the Agent)
to such Lender requesting such payment and specifying such amount. Each such
Lender's obligation to make such payment to the Agent for account of the Letter
of Credit Issuer under this paragraph (e), and the Letter of Credit Issuer's
right to receive the same, shall be absolute and unconditional and shall not be
affected by any circumstance whatsoever, including, without limitation, the
failure of any other Lender to make its payment under this paragraph (e), the
financial condition of the Borrower (or any other account party or applicant),
the existence of any Default or the termination of the Commitments. Each such
payment to the Letter of Credit Issuer shall be made without any offset,
abatement, withholding or reduction whatsoever. If any Lender shall default in
its obligation to make any such payment to the Agent for account of the Letter
of Credit Issuer by 1:00 p.m. on the date specified in the notice provided by
the Agent to the Lender pursuant to the first sentence of this paragraph (e),
for so long as such default shall continue the Agent may at the request of the
Letter of Credit Issuer withhold from any payments received by the Agent under
this Agreement or any Note for account of such Lender the amount so in default
and, to the extent so withheld, pay the same to the Letter of Credit Issuer in
satisfaction of such defaulted obligation.
(f) Upon the making of each payment by a Lender to the Letter of
Credit Issuer pursuant to paragraph (e) above in respect of any Letter of
Credit, such Lender shall, automatically and without any further action on the
part of the Agent, the Letter of Credit Issuer or such Lender, acquire (i) a
participation in an amount equal to such payment in the Reimbursement Obligation
owing to the Letter of Credit Issuer by the Borrower hereunder and under the
Letter of Credit Documents relating to such Letter of Credit and (ii) a
participation in a percentage equal to such Lender's Commitment Percentage in
any interest or other amounts payable by the Borrower hereunder and under such
Letter of Credit Documents in respect of such Reimbursement Obligation (other
than the commissions, charges, costs and expenses payable to the Letter of
Credit Issuer pursuant to paragraph (g) of this Section 2.03). Upon receipt by
the Letter of Credit Issuer from or for account of the Borrower of any payment
in respect of any Reimbursement Obligation or any such interest or other amount
(including by way of setoff or application of proceeds of any collateral
security), the Letter of Credit Issuer shall promptly pay to the Agent for
account of each Lender entitled thereto, such Lender's Commitment Percentage of
such payment, each such payment by the Letter of Credit Issuer to be made in the
same money and funds in which received by the Letter of Credit Issuer. In the
event any payment received by the Letter of Credit Issuer and so paid to the
Lenders hereunder is rescinded or must otherwise be returned by the Letter of
Credit Issuer, each Lender shall, upon the request of the Letter of Credit
Issuer (through the Agent), repay to the Letter of Credit Issuer (through the
Agent) the amount of such payment paid to such Lender, with interest at the rate
specified in paragraph (j) of this Section 2.03.
(g) The Borrower shall pay to the Agent for account of each Lender
(ratably in accordance with their respective Commitment Percentages) upon the
Issuance of each Letter of Credit a letter of credit fee in an amount equal to
the greater of (i) 0.75% per annum of the Face Amount of such Letter of Credit,
and (ii) $500 per annum for each such issued Letter of Credit for the period
from and including the date of issuance of such Letter of Credit (such fee to be
non-refundable under all circumstances). In addition, the Borrower shall pay
directly to each Letter of Credit Issuer (for its sole account) all incidental
commissions, charges, costs and expenses in the amounts customarily charged by
such Letter of Credit Issuer from time to time in like circumstances with
respect to the issuance of each Letter of Credit and drawings and other
transactions relating thereto in accordance with such Letter of Credit Issuer's
customary fee schedule.
(h) Promptly following the end of each month, the Letter of Credit
Issuer shall deliver (through the Agent) to each Lender and the Borrower a
notice describing the aggregate amount of all Letters of Credit issued by such
Letter of Credit Issuer and outstanding at the end of such month. Upon the
request of any Lender from time to time, the Letter of Credit Issuer shall
deliver any other information reasonably requested by such Lender with respect
to each Letter of Credit then outstanding.
(i) The issuance by the Letter of Credit Issuer of each Letter of
Credit shall, in addition to the conditions precedent set forth in Section 6
hereof, be subject to the conditions precedent that (i) such Letter of Credit
shall be in such form, contain such terms and support such transactions as shall
be satisfactory to the Letter of Credit Issuer in its reasonable discretion
consistent with its then current practices and procedures with respect to
letters of credit of the same type and (ii) the Borrower shall have executed and
delivered such applications, agreements and other instruments relating to such
Letter of Credit as the Letter of Credit Issuer shall have reasonably requested
consistent with its then current practices and procedures with respect to
letters of credit of the same type, provided that in the event of any conflict
between any such application, agreement or other instrument and the provisions
of this Agreement or any Security Document, the provisions of this Agreement and
the Security Documents shall control.
(j) To the extent that any Lender shall fail to pay any amount
required to be paid pursuant to paragraph (e) or (f) of this Section 2.03 on the
due date therefor, such Lender shall pay interest to the Letter of Credit Issuer
(through the Agent) on such amount from and including such due date to but
excluding the date such payment is made at a rate per annum equal to the Federal
Funds Rate, provided that if such Lender shall fail to make such payment to the
Letter of Credit Issuer within three Business Days of such due date, then,
retroactively to the due date, such Lender shall be obligated to pay interest on
such amount at the Post-Default Rate.
(k) The issuance by the Letter of Credit Issuer of any modification
or supplement to any Letter of Credit hereunder shall be subject to the same
conditions applicable under this Section 2.03 to the issuance of new Letters of
Credit, and no such modification or supplement shall be issued hereunder unless
either (i) the respective Letter of Credit affected thereby would have complied
with such conditions had it originally been issued hereunder in such modified or
supplemented form or (ii) each Lender shall have consented thereto.
2.04 Use of Proceeds. The proceeds of Short-Term Letters of Credit
shall be used by the Borrower to finance the purchase of crude oil for resale by
the Borrower. The proceeds of Loans and Long-Term Letters of Credit shall be
used by the Borrower to fund payments to suppliers and other short term working
capital requirements, including margin payments for hedging activities in
amounts acceptable to the Agent and the Lenders in their discretion. Proceeds
of the Loans may also be used to fund capital expenditures made for the
maintenance, replacement and improvement of Property, plant and equipment in the
ordinary course of the Borrower's business.
2.05 Changes of Commitments. (a )The Borrower shall have the right
at any time or from time to time to reduce the aggregate unused amount of the
Commitments (for which purpose use of the Commitments shall be deemed to include
the aggregate amount of Letter of Credit Liabilities); provided that (i) the
Borrower shall give notice of each such termination or reduction as provided in
Section 4.05 hereof and (ii) each partial reduction shall be in an aggregate
amount at least equal to $1,000,000 (or a larger multiple of $500,000). The
Commitments once terminated or reduced may not be reinstated.
(b) Notwithstanding any other provision of this Agreement, in the
event that for any reason BNP Paribas is unable to assign an amount not less
than $10,000,000 of its Commitment (calculated on the Closing Date) (such
assignment, the "BNP Paribas Assignment") in accordance with Section 11.06(b)
hereof after making its best efforts to do so on or before June 30, 2000 (or
such other date which BNP Paribas shall consent to as a further extension date
in its discretion, such date in either event to be defined herein as the "BNP
Paribas Commitment Extension Date") on substantially the same terms and
conditions as set forth herein on the date hereof, BNP Paribas's Commitment
hereunder shall be automatically reduced to $25,000,000 for the period from the
BNP Paribas Commitment Extension Date until such date as the BNP Paribas
Assignment shall have been consummated and in such event the Borrower shall
repay on the BNP Paribas Commitment Extension Date any Loans (and/or provide
cover for any Letter of Credit Liabilities) as provided pursuant to Section 2.11
hereof so that subsequent to such prepayment the aggregate outstanding amount of
Loans together with the outstanding Letter of Credit Liabilities shall not
exceed the lesser of (x) $25,000,0000 and (y) the Borrowing Base until such time
as the aggregate Commitments may be increased pursuant to, and by the amount of,
any BNP Paribas Assignment.
2.06 Fees.
(a) The Borrower shall pay to the Agent for account of each Lender a
commitment fee on the daily average unused amount of such Lender's Commitment
(for which purpose the aggregate amount of any Letter of Credit Liabilities
shall be deemed to be a pro rata (based on the Commitments) use of each Lender's
Commitment), for the period from and including the Closing Date to but not
including the earlier of the date such Commitment is terminated and the
Commitment Termination Date, at a rate per annum equal to 0.35%. Accrued
commitment fees shall be payable in arrears on the first Business Day of each
month and on the earlier of the date the relevant Commitments are terminated and
the Commitment Termination Date.
(b) The Borrower shall pay to the Agent such fees as shall be set
forth in the letter agreement with respect thereto between the Borrower and the
Agent dated the date hereof.
2.07 Lending Offices. The Loans of each Type made by each Lender
shall be made and maintained at such Lender's Applicable Lending Office for
Loans of such Type.
2.08 Several Obligations; Remedies Independent. The failure of any
Lender to make any Loan to be made by it on the date specified therefor shall
not relieve any other Lender of its obligation to make its Loan on such date,
but neither any Lender nor the Agent shall be responsible for the failure of any
other Lender to make a Loan to be made by such other Lender, and (except as
otherwise provided in Section 4.06 hereof) no Lender shall have any obligation
to the Agent or any other Lender for the failure by such Lender to make any Loan
required to be made by such Lender. The amounts payable by the Borrower at any
time hereunder and under the Note to each Lender shall be a separate and
independent debt and except as otherwise provided in any of the Basic Documents,
each Lender shall be entitled to protect and enforce its rights arising out of
this Agreement and the Notes, and it shall not be necessary for any other Lender
or the Agent to consent to, or be joined as an additional party in, any
proceedings for such purposes.
2.09 Notes.
(a) The Loans made by each Lender shall be evidenced by a single
promissory note of the Borrower substantially in the form of Exhibit A hereto,
payable to such Lender in a principal amount equal to the amount of its
Commitment as originally in effect and otherwise duly completed.
(b) The date, amount, Type, interest rate and duration of Interest
Period (if applicable) of each Loan made by each Lender to the Borrower, and
each payment made on account of the principal thereof, shall be recorded by such
Lender on its books and, prior to any transfer of any Note evidencing the Loans
held by it, endorsed by such Lender on the schedule attached to such Note or any
continuation thereof; provided that the failure of such Lender to make any such
recordation or endorsement shall not affect the obligations of the Borrower to
make a payment when due of any amount owing hereunder or under such Note in
respect of such Loans.
(c) No Lender shall be entitled to have its Notes substituted or
exchanged for any reason, or subdivided for promissory notes of lesser
denominations, except in connection with a permitted assignment of all or any
portion of such Lender's relevant Commitment, Loans, Letter of Credit
Liabilities and Notes pursuant to Section 11.06 hereof.
2.10 Optional Prepayments and Conversions or Continuations of Loans.
Subject to Section 4.04 hereof, the Borrower shall have the right to prepay
Loans or to Convert Loans of one Type into Loans of another Type or Continue
Loans of one Type as Loans of the same Type, at any time or from time to time,
provided that: (a) the Borrower shall give the Agent notice of each such
prepayment, Conversion or Continuation as provided in Section 4.05 hereof (and,
upon the date specified in any such notice of prepayment, the amount to be
prepaid shall become due and payable hereunder); and (b) LIBOR Loans may be
prepaid or Converted only on the last day of an Interest Period for such Loans.
Notwithstanding the foregoing, and without limiting the rights and remedies of
the Lenders under Section 9 hereof, in the event that any Event of Default shall
have occurred and be continuing, the Agent may (and at the request of the
Majority Lenders shall) suspend the right of the Borrower to borrow any Loans as
LIBOR Loans, to Convert any Loan into a LIBOR Loan or to Continue any Loan as a
LIBOR Loan, in which event all Loans shall be Converted (on the last day(s) of
the respective Interest Periods therefor) or Continued, as the case may be, as
Prime Rate Loans.
2.11 Mandatory Prepayments and Reductions of Commitments.
(a) Until the Commitment Termination Date, the Borrower shall from
time to time prepay the Loans (and/or provide cover for Letter of Credit
Liabilities as specified in paragraph (b) below) in such amounts as shall be
necessary so that at all times the aggregate outstanding amount of (i) the Loans
together with the outstanding Letter of Credit Liabilities shall not exceed the
lesser of (x) the Total Commitment as in effect from time to time and (y) the
Borrowing Base, and (ii) the Letter of Credit Liabilities attributable to Long-
Term Letters of Credit shall not exceed the lesser of (x) $5,000,000 and (y) the
Borrowing Base, such amount to be applied, first, to Loans outstanding and,
second, as cover for Letter of Credit Liabilities outstanding.
(b) In the event that the Borrower shall be required pursuant to
Section 2.11(a) to provide cover for Letter of Credit Liabilities, the Borrower
shall effect the same by paying to the Agent immediately available funds in an
amount equal to the amount required so that at all times the aggregate
outstanding amount of (i) the Loans together with the outstanding Letter of
Credit Liabilities shall not exceed the lesser of (x) the Total Commitment as in
effect from time to time and (y) the Borrowing Base, and (ii) the Letter of
Credit Liabilities attributable to Long-Term Letters of Credit shall not exceed
the lesser of (x) $5,000,000 and (y) the Borrowing Base, which additional funds
shall be retained by the Agent in the Cash Collateral Account (as provided
therein as collateral security in the first instance for the Letter of Credit
Liabilities) until the earlier to occur of the date on which either (i) the
aggregate outstanding amount of the Loans together with the aggregate
outstanding Letter of Credit Liabilities no longer exceeds the Borrowing Base
(at which point such additionally deposited Cash Collateral (or portion thereof)
shall be returned by the Agent to the Borrower), or (ii) all Letters of Credit
shall have been terminated and all of the Letter of Credit Liabilities paid in
full.
2.12 Extended Letters of Credit.
(a) Upon request of the Borrower, and if consented to by the Letter of
Credit Issuer and all of the Lenders party to this Agreement in their sole
discretion as of the date of issuance of the related Letter of Credit, Letters
of Credit may be issued hereunder which otherwise meet the definition of "Long-
Term Letter of Credit" or "Short-Term Letter of Credit", as the case may be, as
to tenor and comply with the provisions of Section 2.11 as to maximum face
amount, with an expiration date subsequent to the Commitment Termination Date
(the "Extended Letters of Credit"), in which event the Borrower shall, on the
Commitment Termination Date, deposit with the Agent for deposit into a Cash
Collateral Account solely for the benefit of the Agent as secured party on
behalf of the Lenders (and not for the benefit of the Collateral Agent under the
Security Agreement), cash (the "Extended L.C. Cash Collateral Deposit") in an
amount equal to the aggregate undrawn Face Amount of all outstanding Extended
Letters of Credit. The Extended L.C. Cash Collateral Deposit shall be held as
additional security for the repayment in full of all Letter of Credit
Liabilities of the Borrower to the Letter of Credit Issuer and the Lenders and
shall not constitute a portion of the Borrowing Base as calculated pursuant to
this Agreement, provided, however, that at such time as all amounts due and
owing to the Agent, the Letter of Credit Issuer and the Lenders under this
Agreement except for Letter of Credit Liabilities have been paid in full and the
Extended L.C. Cash Collateral Deposit has been funded as described in the
preceding sentence, the Agent and the Lenders shall cause the Collateral Agent
to release from the lien of the Security Agreement any "Collateral" (as such
term is defined in the Security Agreement); provided, that, notwithstanding the
foregoing, in the event that all of the Lenders holding Commitments hereunder on
such Commitment Termination Date consent in writing, no Extended L.C. Cash
Collateral Deposit shall be required hereunder and instead the Agent, for the
benefit of the Lenders shall retain its rights with respect to sufficient cash
or non-cash "Collateral" (as such term is defined in the Security Agreement)
then comprising the Borrowing Base (subject to the provisions of Section
2.11(b)) as collateral for all Letter of Credit Liabilities owed to the Agent,
the Letter of Credit Issuer and the Lenders at any subsequent time hereunder.
(b) At any time during which one or more Extended Letters of Credit
have been issued and are outstanding after the Commitment Termination Date, all
obligations of the Borrower to the Lenders relating to such extended Letters of
Credit shall remain in full force and effect notwithstanding (i) the occurrence
of the Commitment Termination Date, and (ii) any provision of this Agreement to
the contrary.
(c) The Extended L.C. Cash Collateral Deposit shall be reduced from
time to time as provided herein and in the Security Agreement, and such amounts
shall be redelivered by the Agent to the Borrower, by the amount of (i) any
payments received by the Agent from the Borrower or any Guarantor in respect of
Reimbursement Obligations with respect to drawings made subsequent to the
Commitment Termination Date related to Extended Letters of Credit, and (ii) the
undrawn Face Amount of any Letters of Credit which have expired by their terms
five (5) or more Business Days prior to such redelivery.
Section 3. Payments of Principal and Interest.
3.01 Repayment of Loans. The Borrower promises to pay to the Agent
for account of each Lender the entire outstanding principal amount of each
Borrowing on the earlier of (a) the Maturity Date for such Borrowing, and (b)
the Commitment Termination Date.
3.02 Interest. The Borrower hereby promise to pay to the Agent for
account of each Lender interest on the unpaid principal amount of each Loan made
by such Lender for the period from and including the date of such Loan to but
excluding the date such Loan shall be paid in full, at the following rates per
annum:
(a) during such periods as such Loan is a Prime Rate Loan, the Chase
Prime Rate (as in effect from time to time) minus the Applicable Margin; and
(b) during such periods as such Loan is a LIBOR Loan, for each
Interest Period relating thereto, the LIBOR Rate for such Loan for such Interest
Period plus the Applicable Margin.
Notwithstanding the foregoing, the Borrower hereby promises to pay to the Agent
for account of each Lender interest at the applicable Post-Default Rate on any
principal of any Loan made by such Lender and on any other amount payable by the
Borrower hereunder or under the Note held by such Lender to or for account of
such Lender, that shall not be paid in full when due (whether at stated
maturity, by acceleration, by mandatory prepayment or otherwise), for the period
from and including the due date thereof to but excluding the date the same is
paid in full. Accrued interest on each Loan shall be payable in the case of a
(i) Prime Rate Loan, monthly in arrears on the last Business Day of each month,
and (ii) LIBOR Loan, on the last day of each Interest Period therefor, and
(iii) in the case of any Loan, upon the payment or prepayment thereof or the
Conversion of such Loan to a Loan of another Type (but only on the principal
amount so paid, prepaid or Converted), except that interest payable at the Post-
Default Rate shall be payable from time to time on demand. Promptly after the
determination of any interest rate provided for herein or any change therein,
the Agent shall give notice thereof to the Lenders to which such interest is
payable and to the Borrower.
Section 4. Payments; Pro Rata Treatment; Computations; Etc.
4.01 Payments.
(a) Except to the extent otherwise provided herein, all payments of
principal, interest, fees, Reimbursement Obligations and other amounts to be
made by the Borrower under this Agreement and the Notes, and, except to the
extent otherwise provided therein, all payments to be made by the Borrower under
any other Basic Document, shall be made in Dollars, in immediately available
funds, without deduction, set-off or counterclaim, to the Agent at account
number 04-202-195, for further credit to Genesis Crude Oil, L.P. account number
477166, ABA number 0210-0103-3, maintained by the Agent at Bankers' Trust
Company, New York, New York, not later than 3:00 p.m. New York time on the date
on which such payment shall become due (each such payment made after such time
on such due date to be deemed to have been made on the next succeeding Business
Day).
(b) Any Lender for whose account any such payment is to be made may
(but shall not be obligated to) debit the amount of any such payment that is not
made by such time to any ordinary deposit account of the Borrower with such
Lender (with notice to the Borrower and the Agent).
(c) The Borrower shall, at the time of making each payment under this
Agreement or any Note for account of any Lender at any time when an Event of
Default has not occurred or is not continuing hereunder, specify to the Agent
(which shall so notify the intended recipient(s) thereof) the Loans,
Reimbursement Obligations or other amounts payable by the Borrower hereunder to
which such payment is to be applied (and in the event that the Borrower fails to
so specify, or if an Event of Default has occurred and is continuing, the Agent
may distribute such payment to the Lenders for application in such manner as it
or the Majority Lenders, subject to Section 4.02 hereof, may determine to be
appropriate).
(d) Except to the extent otherwise provided in the last sentence of
Section 2.03(e) hereof, each payment received by the Agent under this Agreement
or any Note for account of any Lender shall be paid by the Agent promptly to
such Lender, in immediately available funds, for account of such Lender's
Applicable Lending Office for the Loan or other obligation in respect of which
such payment is made.
(e) Subject to any contrary provisions contained in the definition of
"Interest Period", if the due date of any payment under this Agreement or any
Note would otherwise fall on a day that is not a Business Day, such date shall
be extended to the next succeeding Business Day, and interest shall be payable
for any principal so extended for the period of such extension.
4.02 Pro Rata Treatment. Except to the extent otherwise provided
herein: (a) each Borrowing Section 2.01 hereof shall be made from the Lenders,
and each termination or reduction of the amount of the Commitments under Section
2.05 hereof shall be applied to the respective Commitments of the Lenders, pro
rata according to the amounts of their respective Commitments; (b) except as
otherwise provided in Section 5.04 hereof, LIBOR shall be allocated pro rata
among the Lenders according to the amounts of their respective Commitments (in
the case of the making of Loans) or their respective Loans (in the case of
Conversions and Continuations of Loans); (c) each payment or prepayment of
principal of Loans by the Borrower shall be made for account of the Lenders pro
rata in accordance with the respective unpaid principal amounts of the Loans
held by them; and (d) each payment of interest on Loans by the shall be made for
account of the Lenders pro rata in accordance with the amounts of interest on
such Loans then due and payable to the respective Lenders.
4.03 Computations. Interest on LIBOR Loans and Letter of Credit fees
shall be computed on the basis of a year of 360 days and actual days elapsed
(including the first day but excluding the last day) occurring in the period
for which payable and interest on Prime Rate Loans and Reimbursement Obligations
shall be computed on the basis of a year of 365 or 366 days, as the case may be,
and actual days elapsed (including the first day but excluding the last day)
occurring in the period for which payable.
4.04 Minimum Amounts. Mandatory prepayments made pursuant to Section
2.11 hereof and Conversions or prepayments made pursuant to Section 5.04 hereof,
each Borrowing, Conversion and partial prepayment of principal of Loans shall be
in an aggregate amount at least equal to $100,000 or a larger multiple of
$100,000 (borrowings, Conversions or prepayments of or into Loans of different
Types or, in the case of LIBOR Loans, having different Interest Periods at the
same time hereunder to be deemed separate Borrowings, Conversions and
prepayments for purposes of the foregoing, one for each Type or Interest
Period).
4.05 Certain Notices. Notices by the Borrower to the Agent of
terminations or reductions of the Commitments, of Borrowings, Conversions,
Continuations and optional prepayments of Loans and of Types of Loans and of the
duration of Interest Periods shall be irrevocable and shall be effective only if
received by the Agent not later than 10:00 a.m. New York time (a) Five (5)
Business Days prior to any termination or reduction of the Total Commitment, (b)
on the same day as any borrowing or prepayment of or conversion into Prime Rate
Loans, and (c) 3 Business Days before the borrowing or prepayment of, Conversion
into, of Continuation as, LIBOR Loans or before the start of an Interest Period
with respect to the duration thereof. Each such notice of termination or
reduction shall specify the amount of the Commitments to be terminated or
reduced. Each such notice of borrowing shall be substantially in the form of
Exhibit G hereto and specify the amount of such Borrowing, which shall in no
event be less than $100,000, and each notice of borrowing, Conversion,
Continuation or optional prepayment shall specify the Type of each Loan to be
borrowed, Converted, Continued or prepaid and the date of borrowing, Conversion,
Continuation or optional prepayment (which shall be a Business Day). Each such
notice of the duration of an Interest Period shall specify the Loans to which
such Interest Period is to relate. The Agent shall promptly notify the Lenders
of the contents of each such notice. In the event that the Borrower fails to
select the Type of Loan, or the duration of any Interest Period for any LIBOR
Loan, within the time period and otherwise as provided in this Section 4.05,
such Loan (if outstanding as a LIBOR Loan) will be automatically Converted into
a Prime Rate Loan on the last day of the then current Interest Period for such
Loan or (if outstanding as a Prime Rate Loan) will remain as, or (if not then
outstanding) will be made as, a Prime Rate Loan.
4.06 Non-Receipt of Funds by the Agent. Unless the Agent shall have
been notified by a Lender or the Borrower (the "Payor") prior to the date on
which the Payor is to make payment to the Agent of (in the case of a Lender) the
proceeds of a Loan to be made by such Lender hereunder or (in the case of the
Borrower) a payment to the Agent for account of one or more of the Lenders
hereunder (such payment being herein called the "Required Payment"), which
notice shall be effective upon receipt, that the Payor does not intend to make
the Required Payment to the Agent, the Agent may assume that the Required
Payment has been made and may, in reliance upon such assumption (but shall not
be required to), make the amount thereof available to the intended recipient(s)
on such date; and, if the Payor has not in fact made the Required Payment to the
Agent, the recipient(s) of such payment shall, on demand, repay to the Agent the
amount so made available together with interest thereon in respect of each day
during the period commencing on the date (the "Advance Date") such amount was so
made available by the Agent until the date the Agent recovers such amount at a
rate per annum equal to the Federal Funds Rate for such day and, if such
recipient(s) shall fail promptly to make such payment, the Agent shall be
entitled to recover such amount, on demand, from the Payor, together with
interest as aforesaid, provided that if neither the recipient(s) nor the Payor
shall return the Required Payment to the Agent within three Business Days of the
Advance Date, then, retroactively to the Advance Date, the Payor and the
recipient(s) shall each be obligated to pay interest on the Required Payment as
follows:
(a) if the Required Payment shall represent a payment to be made by
the Borrower to the Lenders, the Borrower and the recipient(s) shall each be
obligated retroactively to the Advance Date to pay interest in respect of the
Required Payment at the Post-Default Rate (without duplication of the obligation
of the Borrower under Section 3.02 hereof to pay interest on the Required
Payment at the Post-Default Rate), it being understood that the return by the
recipient(s) of the Required Payment to the Agent shall not limit such
obligation of the Borrower under said Section 3.02 to pay interest at the Post-
Default Rate in respect of the Required Payment; and
(b) if the Required Payment shall represent proceeds of a Loan to be
made by the Lenders to the Borrower, the Payor and the Borrower shall each be
obligated retroactively to the Advance Date to pay interest in respect of the
Required Payment pursuant to Section 3.02 hereof, it being understood that the
return by the Borrower of the Required Payment to the Agent shall not limit any
claim the Borrower may have against the Payor in respect of such Required
Payment.
4.07 Sharing of Payments, Etc.
(a) The Borrower agrees that, in addition to (and without limitation
of) any right of set-off, banker's lien or counterclaim a Lender may otherwise
have, each Lender shall be entitled, at its option (to the fullest extent
permitted by law), to set off and apply any deposit (general or special, time or
demand, provisional or final), or other indebtedness, held by it for the credit
or account of the Borrower at any of its offices, in Dollars or in any other
currency, against any principal of or interest on any of such Lender's Loans,
Reimbursement Obligations or any other amount payable to such Lender hereunder,
that is not paid when due (regardless of whether such deposit or other
indebtedness are then due to the Borrower), in which case it shall promptly
notify the Borrower and the Agent thereof, provided that such Lender's failure
to give such notice shall not affect the validity thereof.
(b) If any Lender shall obtain from the Borrower payment of any
principal of or interest on any Loan or Letter of Credit Liability owing to it
or payment of any other amount under this Agreement or any other Basic Document
through the exercise of any right of set-off, banker's lien or counterclaim or
similar right or otherwise (other than from the Agent as provided herein), and,
as a result of such payment, such Lender shall have received a greater
percentage of the principal of or interest on the Loans or Letter of Credit
Liabilities or such other amounts then due hereunder or thereunder by the
Borrower to such Lender than the percentage received by any other Lender, it
shall promptly purchase from such other Lenders participations in (or, if and to
the extent specified by such Lender, direct interests in) the Loans or Letter of
Credit Liabilities or such other amounts, respectively, owing to such other
Lenders (or in interest due thereon, as the case may be) in such amounts, and
make such other adjustments from time to time as shall be equitable, to the end
that all the Lenders shall share the benefit of such excess payment (net of any
expenses that may be incurred by such Lender in obtaining or preserving such
excess payment) pro rata in accordance with the unpaid principal of and/or
interest on the Loans or Letter of Credit Liabilities or such other amounts,
respectively, owing to each of the Lenders. To such end all the Lenders shall
make appropriate adjustments among themselves (by the resale of participations
sold or otherwise) if such payment is rescinded or must otherwise be restored.
(c) The Borrower agrees that any Lender so purchasing such a
participation (or direct interest) may exercise all rights of set-off, banker's
lien, counterclaim or similar rights with respect to such participation as fully
as if such Lender were a direct holder of Loans or other amounts (as the case
may be) owing to such Lender in the amount of such participation.
(d) Nothing contained herein shall require any Lender to exercise any
such right or shall affect the right of any Lender to exercise, and retain the
benefits of exercising, any such right with respect to any other indebtedness or
obligation of the Borrower. If, under any applicable bankruptcy, insolvency or
other similar law, any Lender receives a secured claim in lieu of a set-off to
which this Section 4.07 applies, such Lender shall, to the extent practicable,
exercise its rights in respect of such secured claim in a manner consistent with
the rights of the Lenders entitled under this Section 4.07 to share in the
benefits of any recovery on such secured claim.
Section 5. Yield Protection, Etc.
5.01 Additional Costs.
(a) The Borrower shall pay directly to each Lender from time to time
such amounts as such Lender may reasonably determine to be necessary to
compensate such Lender for any increase in costs that are attributable to its
making or maintaining of any LIBOR Loans or its obligation to make any LIBOR
Loans hereunder, or any reduction in any amount receivable by such Lender
hereunder in respect of any of such Loans or such obligation (such increases in
costs and reductions in amounts receivable being herein called "Additional
Costs"), resulting from any Regulatory Change that:
(i) shall subject any Lender (or its Applicable Lending Office
for any of such Loans) to any tax, duty or other charge in respect of such Loans
or its Notes or changes the basis of taxation of any amounts payable to such
Lender under this Agreement or its Note in respect of any of such Loans
(excluding changes in the rate of tax on the overall net income of such Lender
or of such Applicable Lending Office by the jurisdiction in which such Lender
has its principal office or such Applicable Lending Office); or
(ii) imposes or modifies any reserve, special deposit or similar
requirements (other than the Reserve Requirement utilized in the determination
of the LIBOR Rate for such Loan) relating to any extensions of credit or other
assets of, or any deposits with or other liabilities of, such Lender (including,
without limitation, any of such Loans or any deposits referred to in the
definition of "LIBOR Base Rate" in Section 1.01 hereof), or any commitment of
such Lender (including, without limitation, the Commitment of such Lender
hereunder); or
(iii) imposes any other condition affecting this Agreement or
its Note (or any of such extensions of credit or liabilities) or its Commitment.
If any Lender requests compensation from the Borrower under this Section
5.01(a), the Borrower may, by notice to such Lender (with a copy to the Agent),
suspend the obligation of such Lender thereafter to make or Continue LIBOR or to
Convert Prime Rate Loans into LIBOR Loans, until the Regulatory Change giving
rise to such request ceases to be in effect (in which case the provisions of
Section 5.04 hereof shall be applicable), provided that such suspension shall
not affect the right of such Lender to receive the compensation so requested.
(b) Without limiting the effect of the provisions of paragraph (a) of
this Section 5.01, in the event that, by reason of any Regulatory Change, any
Lender either (i) incurs Additional Costs based on or measured by the excess
above a specified level of the amount of a category of deposits or other
liabilities of such Lender that includes deposits by reference to which the
interest rate on LIBOR Loans is determined as provided in this Agreement or a
category of extensions of credit or other assets of such Lender that includes
LIBOR Loans or (ii) becomes subject to restrictions on the amount of such a
category of liabilities or assets that it may hold, then, if such Lender so
elects by notice to the Borrower (with a copy to the Agent), the obligation of
such Lender to make or Continue, or to Convert Prime Rate Loans into, LIBOR
Loans hereunder shall be suspended until such Regulatory Change ceases to be in
effect (in which case the provisions of Section 5.04 hereof shall be
applicable).
(c) Without limiting the effect of the foregoing provisions of this
Section 5.01 (but without duplication), the Borrower shall pay directly to each
Lender from time to time on request such amounts as such Lender may reasonably
determine to be necessary to compensate such Lender (or, without duplication,
the bank holding company of which such Lender is a subsidiary) for any costs
that are attributable to the maintenance by such Lender (or any Applicable
Lending Office or such bank holding company), pursuant to any law or regulation
or any interpretation, directive or request (whether or not having the force of
law and whether or not failure to comply therewith would be unlawful) of any
court or governmental or monetary authority implemented after the date hereof
(i) following any Regulatory Change or (ii) instituting any risk-based capital
guideline or other requirement (whether or not having the force of law and
whether or not the failure to comply therewith would be unlawful) heretofore or
hereafter issued by any government or governmental or supervisory authority
implementing at the national level the Basle Accord (including, without
limitation, the Final Risk-Based Capital Guidelines of the Board of Governors of
the Federal Reserve System (12 C.F.R. Part 208, Appendix A; 12 C.F.R. Part 225,
Appendix A) and the Final Risk-Based Capital Guidelines of the Office of the
Comptroller of the Currency (12 C.F.R. Part 3, Appendix A)), of capital in
respect of its Commitment or Loans (such compensation to include, without
limitation, an amount equal to any reduction of the rate of return on assets or
equity of such Lender (or any Applicable Lending Office or such bank holding
company) to a level below that which such Lender (or any Applicable Lending
Office or such bank holding company) could have achieved but for such law,
regulation, interpretation, directive or request). For purposes of this Section
5.01(c) and Section 5.06 hereof, "Basle Accord" shall mean the proposals for
risk-based capital framework described by the Basle Committee on Banking
Regulations and Supervisory Practices in its paper entitled "International
Convergence of Capital Measurement and Capital Standards" dated July 1988, as
amended, modified and supplemented and in effect from time to time or any
replacement thereof.
(d) Each Lender shall notify the Borrower of any event occurring
after the date hereof entitling such Lender to compensation under paragraph (a)
or (c) of this Section 5.01 as promptly as practicable, but in any event within
45 days, after such Lender obtains actual knowledge thereof; provided that (i)
if any Lender fails to give such notice within 45 days after it obtains actual
knowledge of such an event, such Lender shall, with respect to compensation
payable pursuant to this Section 5.01 in respect of any costs resulting from
such event, only be entitled to payment under this Section 5.01 for costs
incurred from and after the date 45 days prior to the date that such Lender does
give such notice and (ii) each Lender will designate a different Applicable
Lending Office for the Loans of such Lender affected by such event if such
designation will avoid the need for, or reduce the amount of, such compensation
and will not, in the opinion of such Lender, be disadvantageous to such Lender.
Each Lender will furnish to the Borrower a certificate setting forth the basis
and amount of each request by such Lender for compensation under paragraph (a)
or (c) of this Section 5.01. Determinations and allocations by any Lender for
purposes of this Section 5.01 of the effect of any Regulatory Change pursuant to
paragraph (a) or (b) of this Section 5.01, or of the effect of capital
maintained pursuant to paragraph (c) of this Section 5.01, on its costs or rate
of return of maintaining Loans or its obligation to make Loans, or on amounts
receivable by it in respect of Loans, and of the amounts required to compensate
such Lender under this Section 5.01, shall be conclusive, provided that such
determinations and allocations are made on a reasonable basis consistent with
determinations and allocations made by such Lender with respect to other
similarly situated customers.
5.02 Limitation on Types of Loans. Anything herein to the contrary
notwithstanding, if, on or prior to the determination of any LIBOR Rate for any
Interest Period, the Agent reasonably determines that quotations of interest
rates for the relevant deposits referred to in the definition of "LIBOR Rate" in
Section 1.01 hereof are not being provided in the relevant amounts or for the
relevant maturities for purposes of determining rates of interest for either
Type of LIBOR Loans as provided herein, then the Agent shall give the Borrower
and each Lender prompt notice thereof and, so long as such condition remains in
effect, the Lenders (or such quoting Lender) shall be under no obligation to
make additional LIBOR Loans, to Continue LIBOR Loans or to Convert Prime Rate
Loans into LIBOR Loans, and the Borrower shall, on the last day(s) of the then
current Interest Period(s) for the outstanding LIBOR Loans, either prepay such
Loans or Convert such Loans into Prime Rate Loans in accordance with Section
2.08 hereof.
5.03 Illegality. Notwithstanding any other provision of this
Agreement, in the event that it becomes unlawful for any Lender or its
Applicable Lending Office to honor its obligation to make or maintain LIBOR
Loans hereunder (and, in the opinion of such Lender, the designation of a
different Applicable Lending Office would either not avoid such unlawfulness or
would be disadvantageous to such Lender), then such Lender shall promptly notify
the Borrower thereof (with a copy to the Agent) and such Lender's obligation to
make or Continue, or to Convert Loans of any other Type into, LIBOR Loans shall
be suspended until such time as such Lender may again make and maintain LIBOR
Loans (in which case the provisions of Section 5.04 hereof shall be applicable);
provided, however, that in the event that one or more Lenders determine that it
is unlawful for the Applicable Lending Office of such Lender(s) to honor its
obligation to make or maintain LIBOR Loans hereunder but it is possible without
materially increasing the cost to such Lender(s) of making or maintaining LIBOR
Loans to do so through another lending office, such Lender shall do so, and
provided further that in the event that one or more Lenders (but less than all
of the Lenders) determine that it is unlawful for the Applicable Lending Office
of such Lender(s) to honor its obligation to make or maintain LIBOR Loans
hereunder and the cost of having another lending office of such Lender make or
maintain such LIBOR Loans, if any, would be materially increased, the Borrower
may designate a replacement bank or financial institution reasonably
satisfactory to the Agent which shall certify in a manner reasonably acceptable
to the Agent that it has an Applicable Lending Office which is able to legally
make and maintain LIBOR Loans hereunder and upon the Agent's receipt of such
certification the Lenders no longer lawfully able to make or maintain LIBOR
Loans hereunder shall be required to assign their Commitments hereunder in
accordance with the terms of Section 11.06(b) to such acceptable replacement
bank or financial institution for a purchase price equal to the transferring
Lender(s)' Loans and Letter of Credit Liabilities, including all accrued and
unpaid interest owing to and including the date of such assignment.
5.04 Treatment of Affected Loans. If the obligation of any Lender to
make LIBOR Loans or to Continue, or to Convert Prime Rate Loans into, LIBOR
Loans shall be suspended pursuant to Section 5.01 or 5.03 hereof, such Lender's
LIBOR shall be automatically Converted into Prime Rate Loans on the last day(s)
of the then current Interest Period(s) for LIBOR Loans (or, in the case of a
Conversion required by Section 5.01(b) or 5.03 hereof, on such earlier date as
such Lender may specify to the Borrower with a copy to the Agent) and, unless
and until such Lender gives notice as provided below that the circumstances
specified in Section 5.01 or 5.03 hereof that gave rise to such Conversion no
longer exist:
(a) to the extent that such Lender's LIBOR Loans have been so
Converted, all payments and prepayments of principal that would otherwise be
applied to such Lender's LIBOR Loans, as applicable, shall be applied instead to
its Prime Rate Loans; and
(b) all Loans that would otherwise be made or Continued by such
Lender as LIBOR Loans, shall be made or Continued instead as Prime Rate Loans,
and all Prime Rate Loans of such Lender that would otherwise be Converted into
LIBOR Loans shall remain as Prime Rate Loans.
If such Lender gives notice to the Borrower with a copy to the Agent that the
circumstances specified in Section 5.01 or 5.03 hereof that gave rise to the
Conversion of such Lender's LIBOR Loans pursuant to this Section 5.04 no longer
exist (which such Lender agrees to do promptly upon such circumstances ceasing
to exist) at a time when LIBOR Loans made by other Lenders are outstanding, such
Lender's Prime Rate Loans shall be automatically Converted, on the first day(s)
of the next succeeding Interest Period(s) for such outstanding LIBOR to the
extent necessary so that, after giving effect thereto, all Loans held by the
Lenders holding LIBOR Loans are held pro rata (as to principal amounts, Types
and Interest Periods) in accordance with their respective Commitments.
5.05 Compensation. The Borrower shall pay to the Agent for account
of each Lender, upon the request of such Lender through the Agent, such amount
or amounts as shall be sufficient (in the reasonable opinion of such Lender) to
compensate it for any loss, cost or expense that such Lender determines is
attributable to:
(a) any payment, mandatory or optional prepayment or Conversion of a
LIBOR Loan made by such Lender for any reason (including, without limitation,
the acceleration of the Loans pursuant to Section 9 hereof) on a date other than
the last day of the Interest Period for such Loan; or
(b) any failure by the Borrower for any reason (including, without
limitation, the failure of any of the conditions precedent specified in Section
6 hereof to be satisfied) to (i) borrow a LIBOR Loan from such Lender on the
date for such borrowing specified in the relevant notice of borrowing given
pursuant to Section 2.02 hereof, or (ii) prepay a LIBOR from such Lender on the
date for such prepayment specified in the relevant notice of prepayment given
pursuant to Section 2.10 hereof.
Without limiting the effect of the preceding sentence, such compensation shall
include an amount equal to the excess, if any, of (i) the amount of interest
that otherwise would have accrued on the principal amount so paid, prepaid,
Converted or not borrowed for the period from the date of such payment,
prepayment, Conversion or failure to borrow to the last day of the then current
Interest Period for such Loan (or, in the case of a failure to borrow, the
Interest Period for such Loan that would have commenced on the date specified
for such borrowing) at the applicable rate of interest for such Loan provided
for herein over (ii) the amount of interest that otherwise would have accrued on
such principal amount at a rate per annum equal to the interest component of the
amount such Lender would have bid in the London interbank market (if such Loan
is a LIBOR Loan) for Dollar deposits of leading Lenders in amounts comparable to
such principal amount and with maturities comparable to such period (as
reasonably determined by such Lender).
5.06 Additional Costs in Respect of Letters of Credit. Without
limiting the obligations of the Borrower under Section 5.01 hereof (but without
duplication), if as a result of any Regulatory Change or any risk-based capital
guideline or other requirement heretofore or hereafter issued by any government
or governmental or supervisory authority implementing at the national level the
Basle Accord, there shall be imposed, modified or deemed applicable after the
date hereof any tax, reserve, special deposit, capital adequacy or similar
requirement against or with respect to or measured by reference to Letters of
Credit issued or to be issued hereunder and the result shall be to increase the
cost to any Lender or Lenders of issuing (or purchasing participations in) or
maintaining its obligation hereunder to issue (or purchase participations in)
any Letter of Credit hereunder or reduce any amount receivable by any Lender
hereunder in respect of any Letter of Credit (which increases in cost, or
reductions in amount receivable, shall be the result of such Lender's or
Lenders' reasonable allocation of the aggregate of such increases or reductions
resulting from such event), then, upon demand by such Lender or Lenders (through
the Agent), the Borrower shall pay immediately to the Agent for account of such
Lender or Lenders, from time to time as specified by such Lender or Lenders
(through the Agent), such additional amounts as shall be sufficient to
compensate such Lender or Lenders (through the Agent) for such increased costs
or reductions in amount. All calculations of increased costs or reductions in
amount shall be consistent with determinations and calculations of similar costs
or reductions made by such Lender with respect to other similarly situated
customers. A statement as to such increased costs or reductions in amount
incurred by any such Lender or Lenders, submitted by such Lender or Lenders to
the Borrower shall be conclusive in the absence of manifest error as to the
amount thereof.
5.07 U.S. Taxes.
(a) The Borrower agrees to pay to each Lender that is not a U.S.
Person such additional amounts as are necessary in order that the net payment of
any amount due to such non-U.S. Person hereunder after deduction for or
withholding in respect of any U.S. Taxes imposed with respect to such payment
(or in lieu thereof, payment of such U.S. Taxes by such non-U.S. Person), will
not be less than the amount stated herein to be then due and payable, provided
that the foregoing obligation to pay such additional amounts shall not apply:
(i) to any payment to any Lender hereunder unless such Lender
is, on the date hereof (or on the date it becomes a Lender hereunder as provided
in Section 11.06(b) hereof) and on the date of any change in the Applicable
Lending Office of such Lender, either entitled to submit a Form 1001 (relating
to such Lender and entitling it to a complete exemption from withholding on all
interest to be received by it hereunder in respect of the Loans) or Form 4224
(relating to all interest to be received by such Lender hereunder in respect of
the Loans), or
(ii) to any U.S. Taxes imposed solely by reason of the failure
by such non-U.S. Person (or, if such non-U.S. Person is not the beneficial owner
of the relevant Loan, such beneficial owner) to comply with applicable
certification, information, documentation or other reporting requirements
concerning the nationality, residence, identity or connections with the United
States of America of such non-U.S. Person (or beneficial owner, as the case may
be) if such compliance is required by statute or regulation of the United States
of America as a precondition to relief or exemption from such U.S. Taxes.
For the purposes of this Section 5.07(a), (A) "Form 1001" shall mean Form 1001
(Ownership, Exemption, or Reduced Rate Certificate) of the Department of the
Treasury of the United States of America, (B) "Form 4224" shall mean Form 4224
(Exemption from Withholding of Tax on Income Effectively Connected with the
Conduct of a Trade or Business in the United States) of the Department of the
Treasury of the United States of America (or in relation to either such Form
such successor and related forms as may from time to time be adopted by the
relevant taxing authorities of the United States of America to document a claim
to which such Form relates) and (C) "Form W-8" shall mean Form W-8 (Certificate
of Foreign Status of the Department of Treasury of the United States of
America). Each of the Forms referred to in the foregoing clauses (A), (B) and
(C) shall include such successor and related forms as may from time to time be
adopted by the relevant taxing authorities of the United States of America to
document a claim to which such Form relates.
(b) Within 30 days after paying any amount to the Agent or any Lender
from which it is required by law to make any deduction or withholding, and
within 30 days after it is required by law to remit such deduction or
withholding to any relevant taxing or other authority, the Borrower shall
deliver to the Agent for delivery to such non-U.S. Person evidence satisfactory
to such Person of such deduction, withholding or payment (as the case may be).
(c) All calculations pursuant to this Section 5.07 shall be
consistent with calculations made by such Lender with respect to other similarly
situated customers.
5.08 Replacement of Lenders. If any Lender requests compensation
pursuant to Section 5.01, 5.06 or 5.07 hereof, or any Lender's obligation to
make or Continue, or to Convert Loans of any Type into, the other Type of Loan
shall be suspended pursuant to Section 5.01 or 5.03 hereof (any such Lender
requesting such compensation, or whose obligations are so suspended, being
herein called a "Requesting Lender"), the Borrower, upon three Business Days
notice, may require that such Requesting Lender transfer all of its right, title
and interest under this Agreement and such Requesting Lender's Note to any bank
or other financial institution identified by the Borrower that is satisfactory
to the Agent and the Letter of Credit Issuers (a) if such bank or other
financial institution (a "Proposed Lender") agrees to assume all of the
obligations of such Requesting Lender hereunder, and to purchase all of such
Requesting Lender's Loans hereunder for consideration equal to the aggregate
outstanding principal amount of such Requesting Lender's Loans, together with
interest thereon to the date of such purchase, and satisfactory arrangements are
made for payment to such Requesting Lender of all other amounts payable
hereunder to such Requesting Lender on or prior to the date of such transfer
(including any fees accrued hereunder and any amounts that would be payable
under Section 5.05 hereof as if all of such Requesting Lender's Loans were being
prepaid in full on such date) and (b) if such Requesting Lender has requested
compensation pursuant to Section 5.01, 5.06 or 5.07 hereof, such Proposed
Lender's aggregate requested compensation, if any, pursuant to said Section
5.01, 5.06 or 5.07 with respect to such Requesting Lender's Loans is lower than
that of the Requesting Lender. Subject to the provisions of Section 11.06(b)
hereof, such Proposed Lender shall be a "Lender" for all purposes hereunder.
Without prejudice to the survival of any other agreement of the Borrower
hereunder the agreements of the Borrower contained in Sections 5.01, 5.06, 5.07
and 11.03 (without duplication of any payments made to such Requesting Lender by
the Borrower or the Proposed Lender) shall survive for the benefit of such
Requesting Lender under this Section 5.08 with respect to the time prior to such
replacement.
Section 6. Conditions Precedent.
6.01 Initial Extension of Credit . The obligation of any Lender to
make its initial extension of credit hereunder (whether by making a Loan or
issuing a Letter of Credit) is subject to the conditions precedent that the
Agent shall have received the following documents (with, in the case of clauses
(a), (b), and (e) below, sufficient copies for each Lender), each of which shall
be satisfactory to the Agent (and to the extent specified below, to each Lender)
in form and substance:
(a) Partnership Documents. Certified copies of the certificate of
limited partnership and the agreement of limited partnership of the Borrower
and each of the Guarantors, including evidence of the approval by each such
Person, in accordance with its respective partnership agreement, of the
execution, delivery and performance of such of the Basic Documents to which the
Borrower and/or either of the Guarantors is intended to be a party and each
other document to be delivered by the Borrower and/or either of the Guarantors
from time to time in connection herewith and the extensions of credit hereunder
(and the Agent and each Lender may conclusively rely on such certificate until
it receives notice in writing from the Borrower to the contrary) and a short-
form existence certificate from the office of the secretary of state in which
the Borrower and each of the Guarantors is existing, as of a date no greater
than 30 days prior to the Closing Date.
(b) Officer's Certificate. A certificate of a senior officer of the
Borrower, dated the Closing Date, certifying that the conditions precedent set
forth in Section 6.02 hereof shall have been satisfied.
(c) Borrowing Base Certificate. A Borrowing Base Certificate as of
the final day of the calendar month immediately prior to the month in which the
Closing Date occurs, and a pro forma Borrowing Base Certificate as of the
Closing Date.
(d) Opinions of Counsel to the Borrower and Guarantors. Opinions,
each dated the Closing Date, of each of (i) Ross A. Benavides, internal counsel
to the Borrower and the Guarantors; (ii) Locke Liddell & Sapp LLP, Texas counsel
to the Borrower and the Guarantors, and (iii) Hodgson, Russ, Andrews, Woods &
Goodyear, LLP, New York counsel to the Borrower and the Guarantors, each in
form and substance reasonably acceptable to the Agent and covering such matters
as the Agent or any Lender may reasonably request.
(e) Evidence of Establishment of Cash Collateral Account and
Collateral Account. Evidence reasonably acceptable to the Agent that the Cash
Collateral Account and Collateral Account have been established and that sums
representing Cash and Cash Equivalents as indicated on the initial Borrowing
Base Certificate, if any, have been deposited in the Cash Collateral Account and
Collateral Account, respectively.
(f) Notes. The Notes, duly completed and executed for each Lender.
(g) Security Agreement. The Security Agreement, duly executed and
delivered by the Borrower, Salomon Smith Barney Holdings Inc. and the Collateral
Agent. In addition, the Borrower shall have taken such other action
(including, without limitation, delivering to the Agent, for filing,
appropriately completed and duly executed copies of Uniform Commercial Code
financing statements) as the Agent shall have requested in order to perfect the
security interests created pursuant to the Security Agreement.
(h) Guaranty Agreements. The Guaranty Agreements, duly executed and
delivered by the Guarantors.
(i) Pledge Agreements. (i) Each of the Borrower, Bank One Texas,
N.A. as Depository and BNP Paribas, as Collateral Agent shall have entered into
an agreement (the "Pledge of Account Agreement") in form and substance
acceptable to the Collateral Agent and the Lenders in their discretion pursuant
to which the Borrower grants to the Collateral Agent a first priority perfected
security interest in all funds at any time deposited into Borrower's cash
management accounts located at Bank One Texas, N.A. and Bank One Texas, N.A.
consents to, and acknowledges such security interest and waives any rights of
offset it may have with respect to such accounts; (ii) each of the Borrower,
Paribas Futures Inc., and BNP Paribas, as Collateral Agent shall have entered
into an agreement (the "Futures Account Pledge Agreement") in form and substance
acceptable to the Agent and the Lenders in their discretion pursuant to which
the Borrower grants to the Collateral Agent a first priority perfected security
interest in all funds at any time deposited into any futures accounts of the
Borrower held with Paribas Futures Inc. and Paribas Futures Inc. consents to,
and acknowledges such security interest and waives any rights of offset it may
have with respect to such accounts; and (iii) if applicable, the Borrower, BNP
Paribas and any other applicable Person shall have entered into an agreement in
form and substance acceptable to the Agent and the Lenders in their discretion
pursuant to which the Borrower grants to the Collateral Agent or the Agent, as
the case may be, a first priority perfected security interest in any other
property constituting the Borrowing Base as reflected in the Borrowing Base
Certificate provided pursuant to Section 6.01 (c) in which the Agent or the
Collateral Agent, as the case may be, shall not otherwise have been granted a
first priority perfected security interest pursuant to the terms of the Security
Agreement or any other agreement enumerated in this Section 6.01.
(j) Insurance. Certificates of insurance evidencing the existence of
all insurance required to be maintained by the Borrower pursuant to Section 8.04
hereof and the designation of the Collateral Agent as the loss payee or
additional named insured, as the case may be, thereunder to the extent required
by said Section 8.04, such certificates to be in such form and contain such
information as is specified in said Section 8.04. In addition, the Borrower
shall have delivered a certificate of one of its senior officers setting forth
the insurance obtained by it in accordance with the requirements of Section 8.04
and stating that such insurance is in full force and effect and that all
premiums then due and payable thereon have been paid.
(k) First Priority Security Interest. All documentation requested by
the Agent to evidence the first priority security interest of the Collateral
Agent, for the benefit of the Lenders and Salomon Smith Barney Holdings Inc., in
the "Collateral" (as such term is defined in the Security Agreement), and to
evidence the first priority security interest of the Agent, for the benefit of
the Lenders in the "BNP Paribas Collateral" (as such term is defined in the
Intercreditor Agreement) and the repayment of all Indebtedness of the Borrower
other than that specifically consented to by the Lenders pursuant to Section
8.07, including, but not limited to, (i) evidence of the payment in full and
termination of the credit facilities extended to the Borrower by Bank One Texas,
N.A., including the delivery of such appropriately executed UCC-3 termination
statements as the Agent may request; (ii) a fully executed intercreditor
agreement with Salomon Smith Barney Holdings Inc. (the "Intercreditor
Agreement") satisfactory to the Agent and the Lenders in all respects in their
discretion, and (iii) a fully executed subordination and intercreditor agreement
from each creditor of the Borrower other than the Lenders and Salomon Smith
Barney Holdings Inc, if any, subordinating the rights of such creditor(s) with
respect to any Lien on the Collateral which has not been terminated on or prior
to the Closing Date, and UCC termination statements terminating all outstanding
Liens on such Collateral to the extent that such Liens exist on the Closing Date
and are not subject to a valid subordination agreement or permitted pursuant to
Section 8.06 hereof.
(l) Master Credit Support Agreement. Delivery to the Agent of a
copy of the Master Credit Support Agreement, certified by a senior officer of
the general partner of the Borrower, such certification to indicate that the
Master Credit Support Agreement (i) remains in full force and effect as of the
Closing Date, and (ii) has not been modified or amended from the form attached
thereto.
(m) Other Indebtedness. Evidence satisfactory to the Agent that any
Indebtedness of the Borrower which shall survive the Closing Date, other than
the Obligations, is on terms and conditions satisfactory to the Lenders.
(n) Fees. Payment by the Borrower to the Agent of any fees owing
to the Agent as provided in Section 2.06 hereof.
(o) Other Documents. Such other documents as the Agent or any
Lender or counsel to the Agent may reasonably request, and counsel to the Agent
shall be satisfied with all legal matter incident to such initial extension of
credit.
The obligation of any Lender to make its initial extension of credit hereunder
is also subject to the payment or delivery by the Borrower of such fees and
other consideration as the Borrower shall have agreed in writing to pay or
deliver to the Agent in connection herewith on or before such initial extension
of credit, including, without limitation, the reasonable fees and expenses of
legal counsel to the Agent in connection with the negotiation, preparation,
execution and delivery of this Agreement and the Notes and the other Basic
Documents and the extensions of credit hereunder (to the extent that statements
for such fees and expenses have been delivered to the Borrower).
6.02 Initial and Subsequent Extensions of Credit. The obligation of
any Lender to make any Loan or issue any Letter of Credit or otherwise extend
any credit to the Borrower upon the occasion of each Borrowing or issuance of a
Letter of Credit is subject to the further conditions precedent that, both
immediately prior to the making of such Loan or issuance of such Letter of
Credit and also after giving effect thereto and to the intended use thereof:
(a) the Agent shall have received a borrowing notice in compliance
with Section 4.05 hereof;
(b) no Default or Event of Default shall have occurred and be
continuing;
(c) the Borrower shall have paid to the Agent any and all fees which
may then be due and owing hereunder;
(d) the representations and warranties made by the Borrower in
Section 7 hereof, and by each Guarantor in Section 3 of the Guaranty Agreement
executed by such Guarantor, and by the Borrower in each of the other Basic
Documents to which it is a party, shall be true and complete on and as of the
date of the making of such Loan or issuance of such Letter of Credit with the
same force and effect as if made on and as of such date (or, if any such
representation or warranty is expressly stated to have been made as of a
specific date, as of such specific date);
(e) the aggregate principal amount of the Loans together with the
aggregate amount of all Letter of Credit Liabilities shall not exceed the
Borrowing Base reflected on the most recently dated Borrowing Base Certificate
required to be delivered pursuant to Section 8.01(d) hereof;
(f) all documentation required to provide that the Agent or the
Collateral Agent, as applicable, shall have a first priority perfected security
interest in all Collateral comprising the Borrowing Base as determined pursuant
to the most recently delivered Borrowing Base Certificate shall have been
executed by the Borrower and any other necessary party thereto and such
documentation shall have been delivered to, and been found reasonably acceptable
by, the Agent or the Collateral Agent, as the case may be.
(g) all legal matters incident to such Borrowing shall be reasonably
satisfactory to counsel to the Agent.
Each notice of borrowing or request for the issuance of a Letter of Credit by
the Borrower hereunder shall constitute a certification by the Borrower to the
effect set forth in the preceding sentence (both as of the date of such notice
or request and, unless the Borrower otherwise notifies the Agent prior to the
date of such borrowing or issuance, as of the date of such borrowing or
issuance).
Section 7. Representations and Warranties. The Borrower represents
and warrants to the Agent and the Lenders that:
7.01 Existence. Each of the Borrower and its Subsidiaries: (a) is a
corporation, partnership or other entity duly organized, validly existing and in
good standing under the laws of the jurisdiction of its organization; (b) has
all requisite corporate or other power, and has all material governmental
licenses, authorizations, consents and approvals necessary to own its assets and
carry on its business as now being or as proposed to be conducted and where the
failure to have any such license, authorization, consent or approval could
(either individually or in the aggregate) have a Borrower Material Adverse
Effect or a Combined Material Adverse Effect; and (c) is qualified to do
business and is in good standing in all jurisdictions in which the nature of the
business conducted by it makes such qualification necessary and where failure so
to qualify could (either individually or in the aggregate) have a Borrower
Material Adverse Effect or a Combined Material Adverse Effect. The Borrower has
no Subsidiaries other than Genesis Pipeline Texas, L.P. and Genesis Pipeline
USA, L. P.
7.02 Financial Condition. (a) The Borrower has heretofore furnished
to the Agent a consolidated balance sheet as at December 31, 1999 and the
related consolidated statement of income, partners' capital and cash flows of
the Borrower and its consolidated Subsidiaries for the fiscal year ended on said
date, with the opinion thereon of Arthur Andersen LLP, and the unaudited
consolidated balance sheet of the Borrower and its consolidated Subsidiaries as
at April 30, 2000 and the related consolidated statement of income, partners'
capital and cash flows of the Borrower and its consolidated Subsidiaries for the
four-month period ended on such date.
(b) All such financial statements are complete and correct and fairly
present the consolidated financial condition of the Borrower and its
Subsidiaries as at said dates and the consolidated results of its operations for
the fiscal year and four-month period ended on said dates (subject, in the case
of such financial statements as at April 30, 2000, to normal year-end audit
adjustments), all in accordance with generally accepted accounting principles
and practices applied on a consistent basis. Neither the Borrower nor any of
its Subsidiaries has on the date hereof any material contingent liabilities,
liabilities for Taxes, unusual forward or long-term commitments or unrealized or
anticipated losses from any unfavorable commitments, except as referred to or
reflected or provided for in said balance sheets as at said dates. Since the
date of such financial statements to the date hereof, there has been no material
adverse change in the consolidated financial condition, results of operations,
business or prospects taken as a whole of the Borrower and its consolidated
Subsidiaries from that set forth in said financial statements as at said date.
7.03 Litigation. There are no legal or arbitral proceedings, or any
proceedings by or before any governmental or regulatory authority or agency, now
pending or (to the knowledge of the Borrower) threatened against the Borrower or
any of its Subsidiaries that, if adversely determined could (either individually
or in the aggregate) have a Borrower Material Adverse Effect or a Combined
Material Adverse Effect.
7.04 No Breach. None of the execution and delivery of this Agreement
and the Notes and the other Basic Documents, the consummation of the
transactions herein and therein contemplated or compliance with the terms and
provisions hereof and thereof will conflict with or result in a breach of, or
require any consent under, (a)the partnership agreement of the Borrower, (b) any
applicable law or regulation, or any order, writ, injunction or decree of any
court or governmental authority or agency, (c) any agreement or instrument to
which the Borrower or any of its consolidated Subsidiaries is a party or by
which any of them or any of their Property is bound or to which any of them is
subject (to the extent that the same would be reasonably likely to result in
liability to the Borrower or any consolidated Subsidiary of over $100,000 or
otherwise have a Borrower Material Adverse Effect or a Consolidated Material
Adverse Effect), or constitute a default under any such agreement or instrument
(to the extent that the same would be reasonably likely to result in liability
to the Borrower or any consolidated Subsidiary of over $100,000 or otherwise
have a Borrower Material Adverse Effect or a Consolidated Material Adverse
Effect),, or (d) (except for the Liens created pursuant to the Security
Documents) result in the creation or imposition of any Lien upon any Property of
the Borrower or any of its consolidated Subsidiaries pursuant to the terms of
any such agreement or instrument.
7.05 Action. The Borrower and each of its Subsidiaries has all
necessary partnership power, authority and legal right to execute, deliver and
perform its obligations under each of the Basic Documents to which it is a
party; the execution, delivery and performance by the Borrower and each of the
Subsidiaries of each of the Basic Documents to which it is a party have been
duly authorized by all necessary action on its part (including, without
limitation, any required partner approvals); and this Agreement has been duly
and validly executed and delivered by the Borrower (and by any partner in the
Borrower) and constitutes, and each of the Notes and the other Basic Documents
to which the Borrower and/or any Subsidiary is a party when executed and
delivered by the Borrower and/or such Guarantor as the case may be (in the case
of the Notes, for value) will constitute, its legal, valid and binding
obligation, enforceable against the Borrower and/or such Guarantor in accordance
with its terms, except as such enforceability may be limited by (a) bankruptcy,
insolvency, reorganization, moratorium or similar laws of general applicability
affecting the enforcement of creditors' rights and (b) the application of
general principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law).
7.06 Approvals. No authorizations, approvals or consents of, and no
filings or registrations with, any governmental or regulatory authority or
agency, or any securities exchange, are necessary for the execution, delivery or
performance by the Borrower or any Subsidiary of the Basic Documents to which it
is a party or for the legality, validity or enforceability hereof or thereof,
except for filings and recordings in respect of the Liens created pursuant to
the Security Documents.
7.07 Use of Credit. Neither the Borrower nor any of its consolidated
Subsidiaries is engaged principally, or as one of its important activities, in
the business of extending credit for the purpose, whether immediate, incidental
or ultimate, of buying or carrying Margin Stock, and no part of the proceeds of
any extension of credit hereunder will be used to buy or carry any Margin Stock.
7.08 ERISA. Each Plan, and, to the knowledge of the Borrower, each
Multiemployer Plan, is in compliance in all material respects with, and has been
administered in all material respects in compliance with, the applicable
provisions of ERISA, the Code and any other Federal or State law, and no event
or condition has occurred and is continuing as to which the Borrower would be
under an obligation to furnish a report to the Lenders under Section 8.01(c)
hereof.
7.09 Taxes. Each of the Borrower and its Subsidiaries (each partner
thereof) has timely filed or caused to be filed (either directly, or indirectly)
all Tax returns and reports required to have been filed and has paid or caused
to be paid all Taxes required to have been paid by it, except (a) Taxes that are
being contested in good faith by appropriate proceedings and for which the
Borrower or such Affiliate, as applicable, has set aside on its books adequate
reserves in accordance with GAAP or (b) to the extent that the failure to do so
could not reasonably be expected to result in a Borrower Material Adverse
Effect. The charges, accruals and reserves on the books of the Borrower and its
Subsidiaries in respect of taxes and other governmental charges are, in the
opinion of the Borrower, adequate.
7.10 Investment Company Act. The Borrower is not an "investment
company", or a company "controlled" by an "investment company", within the
meaning of the Investment Company Act of 1940, as amended.
7.11 Public Utility Holding Company Act. The Borrower is not a
"holding company", or an "affiliate" of a "holding company" or a "subsidiary
company" of a "holding company", within the meaning of the Public Utility
Holding Company Act of 1935, as amended.
7.12 Material Loan Agreements and Liens.
(a) Schedule 1 hereto is a complete and correct list of each credit
agreement, loan agreement or indenture for borrowed money or other arrangement
providing for or otherwise relating to any Indebtedness of, or any extension of
credit (or commitment for any extension of credit) to, or guarantee by, the
Borrower or any of its consolidated Subsidiaries, outstanding on the date
hereof, or that (after giving effect to the transactions contemplated to occur
on or before the Closing Date) will be outstanding on the Closing Date, the
aggregate principal or face amount of which equals or exceeds (or may equal or
exceed) $100,000, and the aggregate principal or face amount outstanding or that
may become outstanding under each such arrangement is correctly described in
said Schedule 1.
(b) Schedule 2 hereto is a complete and correct list of each Lien
securing Indebtedness of any Person outstanding on the date hereof, or that
(after giving effect to the transactions contemplated to occur on or before the
Closing Date) will be outstanding on the Closing Date, the aggregate principal
or face amount of which equals or exceeds (or may equal or exceed) $100,000 and
covering any Property of the Borrower or any of its Subsidiaries, and the
aggregate Indebtedness secured (or that may be secured) by each such Lien and
the Property covered by each such Lien is correctly described in said Schedule
2.
7.13 Environmental Matters. Each of the Borrower and its
Subsidiaries have obtained all environmental, health and safety permits,
licenses and other authorizations required under all Environmental Laws to carry
on its business as now being or as proposed to be conducted, except to the
extent failure to have any such permit, license or authorization would not
(either individually or in the aggregate) have a Borrower Material Adverse
Effect. Each of such permits, licenses and authorizations is in full force and
effect and each of the Borrower and its Subsidiaries is in compliance with the
terms and conditions thereof, and is also in compliance with all other
limitations, restrictions, conditions, standards, prohibitions, requirements,
obligations, schedules and timetables contained in any applicable Environmental
Law or in any regulation, code, plan, order, decree, judgment, injunction,
notice or demand letter issued, entered, promulgated or approved thereunder,
except to the extent failure to comply therewith would not (either individually
or in the aggregate) have a Borrower Material Adverse Effect.
7.14 True and Complete Disclosure. The information, reports,
financial statements, exhibits and schedules furnished in writing by or on
behalf of the Borrower to the Agent or any Lender in connection with the
negotiation, preparation or delivery of this Agreement and the other Basic
Documents or included herein or therein or delivered pursuant hereto or thereto,
when taken as a whole do not contain any untrue statement of material fact or
omit to state any material fact necessary to make the statements herein or
therein, in light of the circumstances under which they were made, not
misleading.
7.15 Compliance With Applicable Laws. Each of the Borrower and its
Subsidiaries have complied with the requirements of all applicable laws, rules,
regulations and orders of governmental or regulatory authorities, except to the
extent that failure to comply with such requirements would not be reasonably
likely to have (either individually or in the aggregate) a Borrower Material
Adverse Effect.
7.16 Year 2000. The Year 2000 date change has not resulted in
disruption of the Borrower's and its Subsidiaries' computer hardware,
software, databases, systems and other equipment containing embedded
microchips (including systems and equipment supplied by others or with which
the Borrower's or its Subsidiaries' systems interface), or to the Borrower's
or its Subsidiaries' operations or business systems, or to the best of the
Borrower's and its Subsidiaries' knowledge, to the operations or business
systems of the Borrower's major vendors, customers, suppliers and
counterparties. Borrower has no reason to believe that liabilities and
expenditures related to the Year 2000 date-change (including, without
limitation, costs caused by reprogramming errors, the failure of others'
systems or equipment, and the potential liability, if any, of the Borrower or
its Subsidiaries for Year 2000 related costs incurred or disruption
experienced by others) will result in a Default or a Borrower Material
Adverse Effect.
Section 8. Covenants of the Borrower. The Borrower covenants and
agrees with the Lenders and the Agent that, so long as any Commitment, Loan or
Letter of Credit Liability is outstanding and until payment in full of all
amounts payable by the Borrower hereunder:
8.01 Financial Statements, Etc. The Borrower shall deliver to the
Agent and each Lender (so long as there are no greater than 3 Lenders, in which
event it shall only deliver to the Agent):
(a) as soon as available and in any event within 45 days after the
end of each month, a consolidated statement of income, partners' capital and
cash flows of the Borrower and its Subsidiaries for such period, and the related
consolidated balance sheet of the Borrower as at the end of such period, setting
forth in each case, in comparative form the corresponding consolidated figures
for the corresponding periods in the preceding fiscal year (except that, in the
case of balance sheets, such comparison shall be to the last day of the prior
fiscal period);
(b) as soon as available and in any event within 90 days after the
end of each fiscal year of the Borrower, a consolidated statement of income,
partners' capital and cash flows of the Borrower and its Subsidiaries for such
fiscal year and the related consolidated balance sheets of the Borrower as at
the end of such fiscal year, setting forth in each case, in comparative form the
corresponding consolidated figures for the preceding fiscal year, and
accompanied by an opinion thereon of independent certified public accountants
of recognized national standing, which opinion shall state that said
consolidated financial statements fairly present the consolidated financial
condition and results of operations of the Borrower and its Subsidiaries as at
the end of, and for, such fiscal year in accordance with GAAP;
(c) as soon as possible, and in any event within ten days after the
Borrower knows or has reason to believe that any of the events or conditions
specified below with respect to any Plan or Multiemployer Plan has occurred or
exists, a statement signed by a senior financial officer of the Borrower setting
forth details respecting such event or condition and the action, if any, that
the Borrower or its ERISA Affiliate proposes to take with respect thereto (and a
copy of any report or notice required to be filed with or given to the PBGC by
the Borrower or an ERISA Affiliate with respect to such event or condition):
(i) any reportable event, as defined in Section 4043(b) of ERISA
and the regulations issued thereunder, with respect to a Plan, as to which the
PBGC has not by regulation waived the requirement of Section 4043(a) of ERISA
that it be notified within 30 days of the occurrence of such event (provided
that a failure to meet the minimum funding standard of Section 412 of the Code
or Section 302 of ERISA, including, without limitation, the failure to make on
or before its due date a required installment under Section 412(m) of the Code
or Section 302(e) of ERISA, shall be a reportable event regardless of the
issuance of any waivers in accordance with Section 412(d) of the Code); and any
request for a waiver under Section 412(d) of the Code for any Plan;
(ii) the distribution under Section 4041 of ERISA of a notice of
intent to terminate any Plan or any action taken by the Borrower or an ERISA
Affiliate to terminate any Plan;
(iii) the institution by the PBGC of proceedings under Section
4042 of ERISA for the termination of, or the appointment of a trustee to
administer, any Plan, or the receipt by the Borrower or any ERISA Affiliate of a
notice from a Multiemployer Plan that such action has been taken by the PBGC
with respect to such Multiemployer Plan;
(iv) the complete or partial withdrawal from a Multiemployer
Plan by the Borrower or any ERISA Affiliate that results in liability under
Section 4201 or 4204 of ERISA (including the obligation to satisfy secondary
liability as a result of a purchaser default) or the receipt by the Borrower or
any ERISA Affiliate of notice from a Multiemployer Plan that it is in
reorganization or insolvency pursuant to Section 4241 or 4245 of ERISA or that
it intends to terminate or has terminated under Section 4041A of ERISA;
(v) the institution of a proceeding by a fiduciary of any
Multiemployer Plan against the Borrower or any ERISA Affiliate to enforce
Section 515 of ERISA, which proceeding is not dismissed within 30 days; and
(vi) the adoption of an amendment to any Plan that, pursuant to
Section 401(a)(29) of the Code or Section 307 of ERISA, would result in the loss
of tax-exempt status of the trust of which such Plan is a part if the Borrower
or an ERISA Affiliate fails to timely provide security to the Plan in accordance
with the provisions of said Sections;
(d) no later than the tenth (10th) day after the end of each month, a
Borrowing Base Certificate, in the form of, and containing the information
required by, Exhibit B hereto, dated as of the last Business Day of such month,
prepared by the Borrower, executed by the chief financial officer or the
president, an executive vice president or the treasurer of the Borrower and
certified as true and correct by the Borrower; each Borrowing Base Certificate
delivered hereunder shall contain information as of the final Business Day of
the month immediately preceding the month in which such certificate is dated,
such information to include, whether provided therein or attached in a schedule
or exhibit thereto, (i) a "Summary of Nominations and Borrowing Base" Report
substantially in the format heretofore delivered to the Agent; (ii) a listing of
outstanding Letters of Credit issued for the account of the Borrower, (iii) all
offset reconciliations, (iv) a description of all Inventory by location,
quantity, and type of product, marked to market as of the date thereof in the
form of Schedule 6 hereto, (v) a schedule setting forth all Salomon Guaranties
then outstanding, including the gross amount of such guaranties, the expiry date
of each such guaranty, and the total amount of the liabilities due from the
Borrower to each Person for whose benefit such a guaranty was issued, (vi) a
Nomination Report, and (vii) a First Purchaser Liability Report, each certified
by a senior officer of the Borrower;
(e) at any time as shall be requested by the Agent or the Majority
Lenders upon reasonable prior notice, a report of an independent collateral
auditor (which may be, or be affiliated with, one of the Lenders) with respect
to the components included in the Borrowing Base as at the end of a date no
greater than 30 days prior to the date of such report, which report shall
indicate that, based upon a review by such auditors of the Accounts Receivable
(including, without limitation, verification with respect to the amount, aging,
identity and credit of the respective account debtors and the billing practices
of the Borrower and its Subsidiaries), Inventory (including, without limitation,
verification as to the value, location and respective types) and all other
components of the Borrowing Base, the information set forth in the most recently
dated Borrowing Base Certificate delivered by the Borrower prior to the date of
such audit is accurate and complete in all material respects. The Borrower
further covenants and agrees that it will cooperate fully in the performance of
such audit, including, but not limited to, providing access to the Agent
and/or the independent collateral auditor at reasonable hours and upon
reasonable notice to all locations where Inventory is stored and to all books
and records relating to the Receivables and the Inventory. The Borrower shall
promptly reimburse the Agent in full for all reasonable costs and expenses
associated with the performance of two such audits per fiscal year; provided
that upon and during the occurrence of an Event of Default the Agent and the
Lenders may perform such number of audits in their discretion as the need may
require and the Borrower shall be required to pay the costs of all such audits
in accordance with the provisions of this subsection;
(f) on the fifteenth Business Day of each month, as of the last day
of the preceding month, a marked to market Net Position Report certified by an
officer of the Borrower;
(g) within 3 Business Days of their receipt by Borrower, copies of
month-end statements as to all futures accounts of the Borrower in which the
Collateral Agent has been granted a security interest pursuant to the terms of
this Agreement, and upon prior request therefor by the Agent, any interim
statements with respect to such futures accounts;
(h) promptly after the Borrower knows or has reason to believe that
any Default has occurred, a notice of such Default describing the same in
reasonable detail and, together with such notice or as soon thereafter as
possible, a description of the action that the Borrower has taken or proposes to
take with respect thereto; and
(i) from time to time such other information regarding the financial
condition, operations, business or prospects of the Borrower or any of its
Subsidiaries (including, without limitation, any Plan or Multiemployer Plan and
any reports or other information required to be filed under ERISA) as any Lender
or the Agent may reasonably request.
The Borrower will furnish to the Agent and each Lender (so long as there are no
greater than 3 Lenders, in which event it shall only give to the Agent), at the
time it furnishes each set of financial statements pursuant to paragraph (a) or
(b) above and each Borrowing Base Certificate required pursuant to paragraph
(d), a certificate of a senior financial officer of the Borrower in the form of
Exhibit H hereof (i) to the effect that said consolidated financial statements
fairly present the consolidated financial condition and results of operations of
the Borrower (with respect to fiscal year-end financial statements, subject to
normal year-end adjustments), (ii) to the effect that no Default or Event of
Default has occurred and is continuing (or, if any Default or Event of Default
has occurred and is continuing, describing the same in reasonable detail and
describing the action that the Borrower has taken or proposes to take with
respect thereto) and (iii) setting forth in reasonable detail the computations
necessary to determine whether the Borrower is in compliance with Section 8.09
hereof as of the end of the respective fiscal period or fiscal year.
8.02 Litigation. The Borrower will promptly give to the Agent and
each Lender (so long as there are no greater than 3 Lenders, in which event it
shall only give to the Agent) notice of all legal or arbitral proceedings, and
of all proceedings by or before any governmental or regulatory authority or
agency, and any material development in respect of such legal or other
proceedings, affecting the Borrower or any of its consolidated Subsidiaries,
except proceedings that, if adversely determined, would not (either individually
or in the aggregate) have a Combined Material Adverse Effect. Without limiting
the generality of the foregoing, the Borrower will give to the Agent and each
Lender (so long as there are no greater than 3 Lenders, in which event it shall
only give to the Agent) notice of the assertion of any Environmental Claim by
any Person against, or with respect to the activities of, the Borrower or any of
its Subsidiaries and notice of any alleged violation of or non-compliance with
any Environmental Laws or any permits, licenses or authorizations, other than
any Environmental Claim or alleged violation that, if adversely determined,
would not (either individually or in the aggregate) have a Borrower Material
Adverse Effect.
8.03 Existence, Etc. The Borrower will (other than with respect to
paragraph (g) hereof), and will cause each of its consolidated Subsidiaries to:
(a) preserve and maintain its legal existence and all of its material
rights, privileges, licenses and franchises (provided that nothing in this
Section 8.03 shall prohibit any transaction expressly permitted under Section
8.05 hereof);
(b) comply with the requirements of all applicable laws, rules,
regulations and orders of governmental or regulatory authorities if failure to
comply with such requirements could (either individually or in the aggregate)
have a Borrower Material Adverse Effect;
(c) pay and discharge all Taxes, assessments and governmental charges
or levies imposed on it or on its income or profits or on any of its Property
prior to the date on which penalties attach thereto, except for any such tax,
assessment, charge or levy the payment of which is being contested in good faith
and by proper proceedings and against which adequate reserves are being
maintained in accordance with GAAP;
(d) maintain all of its Properties used or useful in its business and
in its custody in good working order and condition, ordinary wear and tear
excepted;
(e) maintain proper books of record and account, in which full, true
and correct entries in conformity with GAAP consistently applied shall be made
of all financial transactions and matters involving the assets and business of
the Borrower and such Subsidiary;
(f) allow, at such time as the Agent deems advisable, but in no
event less often than twice each fiscal year, the Agent or its designee to
conduct a thorough examination of the Borrower's or any Subsidiary's books and
records, and make copies thereof or abstracts therefrom, and to discuss their
respective affairs, finances and accounts with their respective directors,
officers, and independent public accountants. The Borrower shall promptly
reimburse the Agent in full for all reasonable costs and expenses associated
with the performance of two such audits each fiscal year; provided that upon
the occurrence of a Default, the Borrower shall be required to pay the costs of
any and all such audits as the Agent may deem necessary or desirable in
accordance with the provisions of this subsection; and
(g) execute and deliver to the Agent, promptly upon becoming a
Subsidiary of the Borrower hereunder, a guaranty, guarantying the due payment
and performance of all of the Obligations and otherwise in form and substance
satisfactory to the Agent.
8.04 Insurance. The Borrower will, and will cause each of its
consolidated Subsidiaries to, maintain insurance with financially sound and
reputable insurance companies, and with respect to Property and risks of a
character usually maintained by partnerships engaged in the same or similar
business similarly situated, against loss, damage and liability of the kinds and
in the amounts customarily maintained by such partnerships. Such insurance
shall be written by financially responsible companies selected by the Borrower
and acceptable to the Collateral Agent and (other than workers' compensation)
shall name the Collateral Agent as loss payee (to the extent covering risk of
loss or damage to tangible property) and as an additional named insured as its
interests may appear (to the extent covering any other risk). Each policy
referred to in this Section 8.04 shall provide that it will not be canceled or
reduced, or allowed to lapse without renewal, except after not less than 30
days' notice to the Collateral Agent and shall also provide that the interests
of the Collateral Agent and the Lenders shall not be invalidated by any act or
negligence of the Borrower. The Borrower will advise the Collateral Agent and
the Agent promptly of any policy cancellation, reduction or amendment.
Without limiting the obligations of the Borrower under this Section
8.04, in the event the Borrower shall fail to maintain in full force and effect
insurance as required by the foregoing provisions of this Section 8.04, then the
Agent may, but shall have no obligation so to do, procure insurance covering the
interests of the Lenders and the Agent in such amounts and against such risks as
the Agent (or the Majority Lenders) shall deem appropriate, and the Borrower
shall reimburse the Agent in respect of any premiums paid by the Agent in
respect thereof.
8.05 Prohibition of Fundamental Changes. The Borrower will not, and
will not permit any of its consolidated Subsidiaries to:
(a) engage in any material line of business substantially different
from those lines of business carried on by the Borrower and its Subsidiaries on
the date hereof, or make any material change in the nature of its operations;
(b) liquidate or dissolve itself (or suffer any liquidation or
dissolution);
(c) enter into any transaction of merger or consolidation or
amalgamation or any Joint Venture;
(d) acquire any business or Property from, or capital stock of, or be
a party to any acquisition of, any Person except for purchases of Inventory and
other Property to be sold or used in the ordinary course of business; or
(e) convey, sell, lease, transfer or otherwise dispose of, in one
transaction or a series of transactions (including without limitation a sale-
leaseback transaction), all or a substantial part of its business or Property,
whether now owned or hereafter acquired, or discount, sell, pledge, hypothecate
or otherwise dispose of Accounts Receivable, except that the Borrower may (i)
sell or otherwise transfer obsolete or worn-out Property, tools or equipment no
longer used or useful in its business so long as the amount thereof sold in any
single fiscal year by the Borrower and its consolidated Subsidiaries shall not
have a fair market value in excess of $500,000, (ii) sell or transfer Inventory
or other Property (in the ordinary course of business and on ordinary business
terms), and (iii) enter into sale-leaseback transactions permitted pursuant to
Section 8.20 hereof.
Notwithstanding the foregoing provisions of this Section 8.05, and
upon prior written notice to the Agent:
(a) any Subsidiary of the Borrower may be merged or consolidated
with or into the Borrower if the Borrower shall be the continuing or surviving
entity;
(b) any Subsidiary of the Borrower may sell, lease, transfer or
otherwise dispose of any or all of its Property (upon voluntary liquidation or
otherwise) to the Borrower;
(c) the Borrower or any Subsidiary of the Borrower may merge or
consolidate with any other Person subject to the prior written consent of the
Agent and the Majority Lenders; and
(d) upon prior written notice to the Agent, the Borrower may
liquidate or dissolve any Subsidiary which is no longer conducting business and
has not conducted business of any kind (except for winding down and liquidation
of assets and steps taken in furtherance of a corporate dissolution as required
by applicable law) for a period of 180 consecutive days prior to such
dissolution.
8.06 Limitation on Liens. The Borrower will not, and will not permit
its consolidated Subsidiaries to, create, incur, assume or suffer to exist any
Lien upon any of the Collateral, whether now owned or hereafter acquired,
except:
(a) Liens created pursuant to the Security Documents;
(b) Liens in existence on the date hereof and listed in Schedule 2
hereto;
(c) Permitted Liens;
(d) Purchase money mortgages or security interests, conditional sale
arrangements and other similar security interests, on Property acquired by the
Borrower or any Subsidiary (hereinafter referred to individually as a "Purchase
Money Security Interest") with the proceeds of the Indebtedness referred to in
subsection 8.07(d) hereof; provided, however, that:
(i) The transaction in which any Purchase Money Security
Interest is proposed to be created is not then prohibited by this Agreement;
(ii) Any Purchase Money Security Interest shall attach only to
the property or asset acquired in such transaction and shall not extend to or
cover any other assets or properties of the Borrower or, as the case may be, a
Subsidiary; and
(iii) The Indebtedness secured or covered by any Purchase
Money Security Interest shall not exceed the lesser of the cost or fair market
value of the property or asset acquired and shall not be renewed, extended or
prepaid from the proceeds of any borrowing by the Borrower or any Subsidiary;
and
(e) Liens (other than those permitted under subsection (d) hereof)
upon those assets of the Borrower which constitute Collateral; provided such
Liens are subject to the terms of the Intercreditor Agreement.
8.07 Indebtedness. The Borrower will not, and will not permit its
Subsidiaries to, create, incur or suffer to exist any Indebtedness except:
(a) Indebtedness to the Lenders hereunder;
(b) Indebtedness outstanding on the date hereof and listed on
Schedule 1 hereto;
(c) Subordinated Indebtedness; and
(d) additional Indebtedness of the Borrower and its Subsidiaries
(including, without limitation, Capital Lease Obligations and other Indebtedness
secured by Liens permitted under subsections 8.06(d) and (f) hereof) which,
after giving effect thereto, shall not cause the Borrower to be in breach of the
covenants contained in Section 8.09 hereof.
8.08 Modification of Master Credit Support Agreement. The Borrower
shall not amend, supplement or otherwise modify the Master Credit Support
Agreement in a manner that would, or could be reasonably anticipated at the time
of such amendments, supplements or modifications to, materially adversely effect
the likelihood that the Borrower would be able to perform all of its obligations
hereunder (including, without limitation, its ability to repay principal and
interest on the Loans made hereunder on a timely basis) without the prior
written consent of the Majority Lenders.
8.09 Certain Financial Covenants.
(a) Minimum Tangible Capital Base. The Borrower will not permit its
Tangible Capital Base at the end of any calendar month to be less than
$65,000,000.
(b) Minimum Current Ratio. The Borrower will maintain at the end of
each calendar month a minimum Current Ratio of at least 1.0:1.0.
(c) Maximum Leverage Ratio. The Borrower will maintain at the end of
each calendar month a ratio of Total Liabilities to Tangible Capital Base of not
more than 5.0:1.0.
8.10 Transactions with Affiliates. Except as expressly permitted by
this Agreement, the Borrower will not, nor will it permit any of its
Subsidiaries to directly or indirectly: (a) make any Investment in an
Affiliate; (b) transfer, sell, lease, assign or otherwise dispose of any
Property to an Affiliate; (c) merge into or consolidate with or purchase or
acquire Property from an Affiliate; or (d) enter into any other transaction
directly or indirectly with or for the benefit of an Affiliate (including,
without limitation, Guarantees and assumptions of obligations of an Affiliate);
provided that (i) any Affiliate who is an individual may serve as a director,
officer or employee of any of the Borrower or any of its Subsidiaries and
receive reasonable compensation for his or her services in such capacity, (ii)
the Borrower and its Subsidiaries may enter into transactions with any Affiliate
(other than extensions of credit by the Borrower or any of its Subsidiaries to
an Affiliate) providing for the leasing of Property, the rendering or receipt of
services or the purchase or sale of inventory and other Property in the ordinary
course of business, and (iii) the Borrower and the Guarantors may enter into,
make payments with respect to, and otherwise engage in, "ordinary course of
business" transactions but only if, and to the extent that, the monetary or
business consideration arising therefrom would be substantially as advantageous
to the Borrower and its Subsidiaries as the monetary or business consideration
that would obtain in a comparable transaction with a Person not an Affiliate.
8.11 Use of Proceeds. The Borrower will use the proceeds of the
Loans hereunder in compliance with all applicable legal and regulatory
requirements, including, without limitation, Regulations U and X and the
Securities Act of 1933 and the Securities Act of 1934 and the regulations
thereunder; provided that neither the Agent nor any Lender shall have any
responsibility as to the use of any of such proceeds.
8.12 Guaranties. The Borrower will not and will not permit any of
its Subsidiaries to Guarantee the obligations of any Person other than each
other and Genesis Energy L.P.
8.13 Redemptions; Distributions. The Borrower will not and will not
permit any Subsidiary to:
(a) purchase, redeem, retire or otherwise acquire, directly or
indirectly, or make any sinking fund payments with respect to, any Indebtedness
or any partnership units of the Borrower or any Subsidiary now or hereafter
outstanding or set apart any sum for any such purpose; provided however, that
the Borrower shall be permitted to repurchase up to 100,000 of its partnership
units in any fiscal year in satisfaction of its obligations under its Restricted
Unit Plan; or
(b) declare or pay any distribution of any kind on the Borrower's or
any Subsidiary's partnership units, or set aside any sum for any such purpose,
except that (i) the Borrower and each of the Guarantors may declare or pay
distributions to its unitholders as provided in its respective partnership
agreement, and (ii) the Borrower and its Subsidiaries may make those
distributions and redemptions specifically contemplated in the Proxy Statement
of the Borrower filed with the Securities and Exchange Commission on May 30,
2000.
8.14 Prepayments. The Borrower will not make any voluntary or
optional prepayment of any Indebtedness for borrowed money incurred or permitted
to exist under the terms of this Agreement, other than Indebtedness evidenced by
the Notes and prepayments in connection with the sale of Property subject to a
Purchase Money Security Interest.
8.15 Investments. The Borrower will not and will not permit any of
its Subsidiaries to make, or suffer to exist, any Investment in any Person,
including, without limitation, any shareholder, unitholder, director, officer or
employee of the Borrower or any of the Subsidiaries, except:
(a) Investments in:
(i) obligations issued or guaranteed by the United States of
America;
(ii) certificates of deposit, bankers acceptances and other
"money market instruments" issued by any bank or trust company organized under
the laws of the United States of America or any State thereof and having capital
and surplus in an aggregate amount of not less than $100,000,000;
(iii) open market commercial paper bearing the highest credit
rating issued by Standard & Poor's Corporation or by another nationally
recognized credit rating agency;
(iv) repurchase agreements entered into with any bank or trust
company organized under the laws of the United States of America or any State
thereof and having capital and surplus in an aggregate amount of not less than
$100,000,000 relating to United States of America government obligations; and
(v) shares of "money market funds", each having net assets of
not less than $100,000,000;
in each case maturing or being due or payable in full not more than 180 days
after the acquisition thereof;
(b) Investments by the Borrower in any Subsidiary and by any
Subsidiary in the Borrower or another Subsidiary as in effect on the date
hereof;
(c) advances to employees in the ordinary course of business not to
exceed $100,000 in the aggregate; and
(d) Investments received in satisfaction of obligations (e.g.,
securities received in connection with a distribution made pursuant to a
bankruptcy reorganization or similar proceeding).
8.16 Amendments of Documents. Other than those changes proposed in
the Proxy Statement of the Borrower filed with the Securities and Exchange
Commission on May 30, 2000, the Borrower will not and will not permit any of its
Subsidiaries to modify, amend, supplement or terminate, or agree to modify,
amend, supplement or terminate, its partnership agreement, certificate of
limited partnership and Restricted Unit Plan without the prior written consent
of the Agent and the Required Lenders.
8.17 Management Fees. The Borrower will not and will not permit any
Subsidiary to pay, or be or become obligated to pay, any Management Fees to any
Person, or any interest on any deferred obligation therefor, including, without
limitation, to any partner, director, officer or employee of the Borrower or any
Subsidiary.
8.18 Change in Accounting Practices.. The Borrower will not, and
will not suffer or permit any Subsidiary to, make any significant change in
accounting treatment or reporting practices, except as permitted or required by
GAAP, or change the fiscal year of the Borrower or of any Subsidiary.
8.19 Trading Position Limits. The Borrower will at all times
maintain its open (unhedged) positions in accordance with the Trading Position
Limits.
8.20 Lease Obligations. The Borrower will not, and shall not suffer
or permit any Subsidiary to, create or suffer to exist any obligations for the
payment of rent for any property under lease or agreement to lease, being a
lessee, except for (a) leases of the Borrower and of Subsidiaries in existence
on the Closing Date, (b) leases of fixed assets in the Borrower's ordinary
course of business, the aggregate amount of such leases not exceeding $500,000,
and (c) the sale/leaseback transaction dated as of March 13, 2000 between the
Borrower and Ryder Truck Rental, Incorporated.
8.21 Assets and Properties. The Borrower and its Subsidiaries shall
not enter into any agreement or other arrangement with any Person other than the
Agent, the Collateral Agent, and the Lenders which would limit or purport to
limit the Borrower's or any Subsidiary's ability to sell, transfer, lease,
pledge or otherwise dispose or encumber its assets and Property.
Section 9. Events of Default. If one or more of the following events
(herein called "Events of Default") shall occur and be continuing:
(a) The Borrower shall (i) fail to pay when due (whether at stated
maturity or upon mandatory or optional prepayment) any principal of any Loan, or
(ii) shall fail to pay interest hereunder within three (3) Business Days after
such interest shall become due, or, (iii) shall fail to pay any fee or other
amount payable hereunder within three (3) Business Days after such fee or other
amount becomes due; or
(b) The Borrower or any of its Subsidiaries (the Borrower and such
Subsidiaries herein collectively called the "Relevant Parties") shall default in
the payment when due of any principal of or interest on any of its other
Indebtedness aggregating $500,000 or more; or any event specified in any note,
agreement, indenture 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; or
(c) Any representation, warranty or certification made or deemed made
herein or in any other Basic Document (or in any modification or supplement
hereto or thereto) by any Relevant Party, or any certificate furnished to any
Lender or the Agent pursuant to the provisions hereof or thereof (including, but
not limited to, in any Borrowing Base Certificate), shall prove to have been
false or misleading as of the time made or furnished in any material respect; or
(d) The Borrower shall default in the performance of any of its
obligations under any of Sections 8.01(a), 8.01(b) 8.01(d), 8.01(f), 8.03, or
8.05 through and including 8.21 hereof or the Borrower shall default in the
performance of any of its obligations under Article 2 or Section 4.01 of the
Security Agreement, or the Borrower shall default in the performance of any of
its other obligations in this Agreement or any other Basic Document and such
default shall continue unremedied for a period of thirty (30) or more days after
notice thereof to the Borrower by the Agent or any Lender (through the Agent);
or
(e) Any Relevant Party shall admit in writing its inability to, or be
generally unable to, pay its debts as such debts become due; or
(f) Any Relevant Party shall (i) apply for or consent to the
appointment of, or the taking of possession by, a receiver, custodian, trustee,
examiner or liquidator of itself or of all or a substantial part of its
Property, (ii) make a general assignment for the benefit of its creditors, (iii)
commence a voluntary case under the Bankruptcy Code, (iv) file a petition
seeking to take advantage of any other law relating to bankruptcy, insolvency,
reorganization, liquidation, dissolution, arrangement or winding-up, or
composition or readjustment of debts, (v) fail to controvert in a manner, timely
and appropriate to prevent entry of an order, judgment or decree approving a
petition filed against it in an involuntary case under the Bankruptcy Code
within sixty (60) days of such filing; or to obtain a continuance of the
automatic stay in such proceedings beyond sixty (60) days from the date the
petition is filed, or (vi) acquiesce in writing to, any petition filed against
it in an involuntary case under the Bankruptcy Code or (vii) take any corporate
action for the purpose of effecting any of the foregoing; or
(g) A proceeding or case shall be commenced, without the application
or consent of the affected Relevant Party, in any court of competent
jurisdiction, seeking (i) its reorganization, liquidation, dissolution,
arrangement or winding-up, or the composition or readjustment of its debts, (ii)
the appointment of a receiver, custodian, trustee, examiner, liquidator or the
like of such Relevant Party or of all or any substantial part of its Property or
(iii) similar relief in respect of such Relevant Party under any law relating to
bankruptcy, insolvency, reorganization, winding-up, or composition or adjustment
of debts, and such proceeding or case shall continue undismissed, or an order,
judgment or decree approving or ordering any of the foregoing shall be entered
and continue unstayed and in effect, for a period of 60 or more days; or an
order for relief against any Relevant Party shall be entered in an involuntary
case under the Bankruptcy Code; or
(h) A final judgment or judgments for the payment of money in excess
of $1,000,000 in the aggregate (regardless of insurance coverage) shall be
rendered by one or more courts, administrative tribunals or other bodies having
jurisdiction against any Relevant Party and the same shall not be satisfied and
discharged (or provision shall not be made for such satisfaction and discharge),
or a stay of execution thereof shall not be procured, within 30 days from the
date of entry thereof and such Relevant Party, as the case may be) shall not,
within said period of 30 days, or such longer period during which execution of
the same shall have been stayed, appeal therefrom and cause the execution
thereof to be stayed during such appeal; or
(i) An event or condition specified in Section 8.01(c) hereof shall
occur or exist with respect to any Plan or Multiemployer Plan and, as a result
of such event or condition, together with all other such events or conditions,
the Borrower or any ERISA Affiliate shall incur or in the opinion of the
Majority Lenders shall be reasonably likely to incur a liability to a Plan, a
Multiemployer Plan or the PBGC (or any combination of the foregoing) that, in
the determination of the Majority Lenders, would (either individually or in the
aggregate) have a Combined Material Adverse Effect; or
(j) A claim shall have been asserted against the Borrower or any of
its Subsidiaries, or any predecessor in interest of the Borrower or any of its
Subsidiaries, of an Environmental Claim that, in the judgment of the Majority
Lenders is reasonably likely to be determined adversely to the Borrower or any
of its Subsidiaries, and the amount thereof (either individually or in the
aggregate) is reasonably likely to have a Borrower Material Adverse Effect
(insofar as such amount is payable by the Borrower or any of its Subsidiaries
but after deducting any portion thereof that is reasonably expected to be paid
by other creditworthy Persons jointly and severally liable therefor); or
(k) Any material noncompliance by any Guarantor with the terms and
conditions of its related Guaranty Agreement, or the occurrence of any event
which would have a material adverse effect upon the consolidated financial
condition, operations, business or prospects taken as a whole of any Guarantor
or any Relevant Party from that set forth in those certain financial statements
delivered to the Lenders by the Guarantors and all Relevant Parties dated April
30, 2000; or
(l) The Liens created by the Security Documents shall at any time not
constitute a valid and perfected first priority Lien on the collateral intended
to be covered thereby in favor of the Collateral Agent or the Agent, as
applicable, free and clear of all other Liens (other than Liens permitted under
Section 8.06 hereof or under the respective Security Documents), or any of the
Security Documents shall for whatever reason be terminated or cease to be in
full force and effect, or the enforceability thereof shall be contested by the
Borrower; or
(m) any Guaranty Agreement shall for whatever reason be terminated or
cease to be in full force and effect, or the enforceability of any provision
thereof shall be contested by the Borrower or any Guarantor; or
(n) (i) Genesis Energy, L.L.C. shall cease at anytime to be the
general partner of the Borrower, or (ii) Genesis Energy, L.P. shall at any time
own, beneficially and of record, less than 75% of all of the partnership units
of the Borrower, or (iii) Salomon Smith Barney Holdings Inc. shall at any time
own, beneficially and of record, less than 54% of all of the membership
interests of Genesis Energy L.L.C., provided however, that with respect to
clause (iii) hereof, such event shall not be deemed to be an Event of Default
hereunder until 30 days after the sooner to occur of the date on which (x)
Salomon Smith Barney Holdings Inc. shall have ceased to hold the required
percentage of membership units, and (y) the Borrower shall have actual knowledge
that Salomon Smith Barney Holdings Inc. shall have ceased to hold the required
percentage of membership units; or
(o). Any event or series of event shall occur (or fail to occur)
which shall cause a Borrower Material Adverse Effect or a Combined Material
Adverse Effect; or
(p) The amount of Collateral, as shown on the most recent Borrowing
Base Report (without regard to the advance rate), shall be less than the
aggregate amount of (i) the Obligations then outstanding plus (ii) the net
amount of the Salomon Guaranties then outstanding as shown on the most recent
schedule delivered by the Borrower to the Agent pursuant to Section 8.01(d), and
such deficiency shall remain outstanding for two (2) consecutive Business Days.
THEREUPON: (1) in the case of an Event of Default other than one referred to
in clause (f) or (g) of this Section 9 with respect to the Borrower, the Agent
shall, upon request of the Majority Lenders, (A) by notice to the Borrower,
terminate the Commitments and they shall thereupon terminate, and/or (B)
declare the principal amount then outstanding of, and the accrued interest on,
the Loans and all other amounts payable by the Borrower hereunder and under the
Notes (including, without limitation, any amounts payable under Section 5.05 or
5.06 hereof) to be forthwith due and payable, whereupon such amounts shall be
immediately due and payable without presentment, demand, protest or other
formalities of any kind, all of which are hereby expressly waived by the
Borrower; and (2) in the case of the occurrence of an Event of Default referred
to in clause (f) or (g) of this Section 9 with respect to the Borrower or any
Guarantor, the Commitments shall automatically be terminated and the principal
amount then outstanding of, and the accrued interest on, the Loans, the
Reimbursement Obligations, and all other amounts payable by the Borrower
hereunder and under the Notes (including, without limitation, any amounts
payable under Section 5.05 or 5.06 hereof) shall automatically become
immediately due and payable without presentment, demand, protest or other
formalities of any kind, all of which are hereby expressly waived by the
Borrower.
In addition, upon the occurrence and during the continuance of any
Event of Default (if the Agent has declared the principal amount then
outstanding of, and accrued interest on, the Loans and all other amounts payable
by the Borrower hereunder and under the Notes to be due and payable), the
Borrower agrees that it shall, if requested by the Agent or the Majority Lenders
through the Agent (and, in the case of any Event of Default referred to in
clause (f) or (g) of this Section 9 with respect to the Borrower or any
Guarantor, forthwith, without any demand or the taking of any other action by
the Agent or such Lenders) provide cover for the Letter of Credit Liabilities by
paying to the Agent immediately available funds in an amount equal to (a) the
then aggregate undrawn Face Amount of all Letters of Credit and (b) the then
aggregate Face Amount of all Letters of Credit which have been drawn upon but
with respect to which the Reimbursement Obligations of the Borrower have not
been paid in full, which funds shall be held by the Agent in the Collateral
Account as collateral security in the first instance for the Letter of Credit
Liabilities and be subject to withdrawal only as provided in the Security
Agreement.
Section 10. The Agent.
10.01 Appointment, Powers and Immunities. Each Lender hereby
appoints and authorizes the Agent to act as its agent hereunder and under the
other Basic Documents with such powers as are specifically delegated to the
Agent by the terms of this Agreement and of the other Basic Documents, together
with such other powers as are reasonably incidental thereto. The Agent (which
term as used in this sentence and in Section 10.05 and the first sentence of
Section 10.06 hereof shall include reference to its affiliates and its own and
its affiliates' officers, directors, employees and agents):
(a) shall have no duties or responsibilities except those expressly
set forth in this Agreement and in the other Basic Documents, and shall not by
reason of this Agreement or any other Basic Document be a trustee for any
Lender;
(b) shall not be responsible to the Lenders for any recitals,
statements, representations or warranties contained in this Agreement or in any
other Basic Document, or in any certificate or other document referred to or
provided for in, or received by any of them under, this Agreement or any other
Basic Document (including, but not limited to, any audit conducted pursuant to
Section 8.01(e) hereof), or for the value, validity, effectiveness, genuineness,
enforceability or sufficiency of this Agreement, any Note or any other Basic
Document or any other document referred to or provided for herein or therein or
for any failure by the Borrower or any other Person to perform any of its
obligations hereunder or thereunder;
(c) shall not, except to the extent expressly instructed by the
Majority Lenders with respect to collateral security under the Security
Documents, be required to initiate or conduct any litigation or collection
proceedings hereunder or under any other Basic Document; and
(d) shall not be responsible for any action taken or omitted to be
taken by it hereunder or under any other Basic Document or under any other
document or instrument referred to or provided for herein or therein or in
connection herewith or therewith, except for its own gross negligence or willful
misconduct.
The Agent may employ agents and attorneys-in-fact and shall not be responsible
for the negligence or misconduct of any such agents or attorneys-in-fact
selected by it in good faith. The Agent may deem and treat the payee of a Note
as the holder thereof for all purposes hereof unless and until a notice of the
assignment or transfer thereof shall have been filed with the Agent, together
with the consent of the Borrower to such assignment or transfer (to the extent
provided in Section 11.06(b) hereof).
10.02 Reliance by Agent. The Agent (and each Letter of Credit Issuer
with respect to instructions or other information provided to it regarding the
issuance of Letters of Credit) shall be entitled to rely upon any certification,
notice or other communication (including, without limitation, any thereof by
telephone, telecopy, telegram or cable) believed by it to be genuine and correct
and to have been signed or sent by or on behalf of the proper Person or Persons,
and upon advice and statements of legal counsel, independent accountants and
other experts selected by the Agent. As to any matters not expressly provided
for by this Agreement or any other Basic Document, the Agent shall in all cases
be fully protected in acting, or in refraining from acting, hereunder or
thereunder in accordance with instructions given by the Majority Lenders or, if
provided herein, in accordance with the instructions given by the Majority
Lenders or all of the Lenders as is required in such circumstance, and such
instructions of such Lenders and any action taken or failure to act pursuant
thereto shall be binding on all of the Lenders.
10.03 Defaults. The Agent shall not be deemed to have knowledge or
notice of the occurrence of a Default unless the Agent has received notice from
a Lender or the Borrower specifying such Default and stating that such notice is
a "Notice of Default". In the event that the Agent receives such a notice of
the occurrence of a Default, the Agent shall give prompt notice thereof to the
Lenders. The Agent shall (subject to Section 10.07 hereof) take such action
with respect to such Default as shall be directed by the Majority Lenders,
provided that, unless and until the Agent shall have received such directions,
the Agent may (but shall not be obligated to) take such action, or refrain from
taking such action, with respect to such Default as it shall deem advisable in
the best interest of the Lenders except to the extent that this Agreement
expressly requires that such action be taken, or not be taken, only with the
consent or upon the authorization of the Majority Lenders or all of the Lenders.
10.04 Rights as a Lender. With respect to its Commitments and the
Loans made by it, BNP Paribas (and any successor acting as Agent) in its
capacity as a Lender hereunder shall have the same rights and powers hereunder
as any other Lender and may exercise the same as though it were not acting as
the Agent, and the term "Lender" or "Lenders" shall, unless the context
otherwise indicates, include the Agent in its individual capacity. BNP Paribas
(and any successor acting as Agent) and its affiliates may (without having to
account therefor to any Lender) accept deposits from, lend money to, make
investments in and generally engage in any kind of banking, trust or other
business with the Borrower (and any of its Subsidiaries or Affiliates) as if it
were not acting as the Agent, and BNP Paribas (and any such successor) and its
affiliates may accept fees and other consideration from the Borrower for
services in connection with this Agreement or otherwise without having to
account for the same to the Lenders.
10.05 Indemnification. The Lenders agree to indemnify the Agent (to
the extent not reimbursed under Section 11.03 hereof, but without limiting the
obligations of the Borrower under said Section 11.03), ratably in accordance
with their respective Commitments, for any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind and nature whatsoever that may be imposed on, incurred
by or asserted against the Agent (including by any Lender) arising out of or by
reason of any investigation in or in any way relating to or arising out of this
Agreement or any other Basic Document or any other documents contemplated by or
referred to herein or therein or the transactions contemplated hereby or thereby
(including, without limitation, the costs and expenses that the Borrower is
obligated to pay under Section 11.03 hereof are to be made, but excluding,
unless a Default has occurred and is continuing, normal administrative costs and
expenses incident to the performance of its agency duties hereunder) or the
enforcement of any of the terms hereof or thereof or of any such other
documents, provided that no Lender shall be liable for any of the foregoing to
the extent they arise from the gross negligence or willful misconduct of the
party to be indemnified.
10.06 Non-Reliance on Agent and Other Lenders. Each Lender agrees
that it has, independently and without reliance on the Agent or any other
Lender, and based on such documents and information as it has deemed
appropriate, made its own credit analysis of the Borrower, its consolidated
Subsidiaries and any Guarantor, including without limitation, its own
independent review of the Collateral, and the adequacy of the Collateral to
fully secure the Obligations, and its decision to enter into this Agreement and
that it will, independently and without reliance upon the Agent or any other
Lender, and based on such documents and information as it shall deem appropriate
at the time, continue to make its own analysis and decisions in taking or not
taking action under this Agreement or under any other Basic Document. The Agent
shall not be required to keep itself informed as to the performance or
observance by the Borrower of this Agreement or any of the other Basic Documents
or any other document referred to or provided for herein or therein or to
inspect the Properties or books of the Borrower and any of its consolidated
Subsidiaries. Except for notices, reports and other documents and information
expressly required to be furnished to the Lenders by the Agent hereunder or
under the Security Documents, the Agent shall not have any duty or
responsibility to provide any Lender with any credit or other information
concerning the affairs, financial condition or business of the Borrower, any of
its consolidated Subsidiaries (or any of their Affiliates) or any Guarantor that
may come into the possession of the Agent or any of its affiliates.
10.07 Failure to Act. Except for action expressly required of the
Agent hereunder and under the other Basic Documents, the Agent shall in all
cases be fully justified in failing or refusing to act hereunder and thereunder
unless it shall receive further assurances to its satisfaction from the Lenders
of their indemnification obligations under Section 10.05 hereof against any and
all liability and expense that may be incurred by it by reason of taking or
continuing to take any such action.
10.08 Resignation of Agent. Subject to the appointment and
acceptance of a successor Agent as provided below, the Agent may resign at any
time by giving notice thereof to the Lenders and the Borrower. Upon any such
resignation, the Majority Lenders shall have the right to appoint a successor
Agent. If no successor Agent shall have been so appointed by the Majority
Lenders and shall have accepted such appointment within 30 days after the
retiring Agent's giving of notice of resignation, then the retiring Agent may,
on behalf of the Lenders, appoint a successor Agent, that shall be a bank that
has an office in New York, New York with a combined capital and surplus of at
least $500,000,000. Upon the acceptance of any appointment as Agent hereunder
by a successor Agent, such successor Agent shall thereupon succeed to and become
vested with all the rights, powers, privileges and duties of the retiring Agent,
and the retiring Agent shall be discharged from its duties and obligations
hereunder. After any retiring Agent's resignation hereunder as Agent, the
provisions of this Section 10 shall continue in effect for its benefit in
respect of any actions taken or omitted to be taken by it while it was acting as
the Agent.
10.09 Consents under Other Basic Documents. Except as otherwise
provided in Section 11.04 hereof with respect to this Agreement, the Agent may,
with the prior consent of the Majority Lenders (but not otherwise), consent to
any modification, supplement or waiver under any of the Basic Documents,
provided that, without the prior consent of each Lender, the Agent shall not
(except as expressly provided herein or in the Security Documents) release any
collateral or otherwise terminate any Lien under any Basic Document providing
for collateral security, or agree to additional obligations being secured by
such collateral security (unless the Lien for such additional obligations shall
be junior to the Lien in favor of the other obligations secured by such Basic
Document), except that no such consent shall be required (unless such consent is
required under Section 11.04), and the Agent is hereby authorized, to release
any Lien covering Property that is the subject of a disposition of Property
expressly permitted hereunder or under the Security Documents.
Section 11. Miscellaneous.
11.01 Waiver. No failure on the part of the Agent or any Lender to
exercise and no delay in exercising, and no course of dealing with respect to,
any right, power or privilege under this Agreement or any Note shall operate as
a waiver thereof, nor shall any single or partial exercise of any right, power
or privilege under this Agreement or any Note preclude any other or further
exercise thereof or the exercise of any other right, power or privilege. The
remedies provided herein are cumulative and not exclusive of any remedies
provided by law.
11.02 Notices. All notices, requests and other communications
provided for herein and under the Security Documents (including, without
limitation, any modifications of, or waivers, requests or consents under, this
Agreement) shall be given or made in writing (including, without limitation, by
telecopy), delivered (or telephoned, as the case may be) to the intended
recipient at the "Address for Notices" specified below its name on the signature
pages hereof or on any Notice of Assignment; or, as to any party, at such other
address as shall be designated by such party in a notice to each other party.
Except as otherwise provided in this Agreement, all such communications shall be
deemed to have been duly given when transmitted by telecopier or personally
delivered or, in the case of a mailed notice, upon receipt, in each case given
or addressed as aforesaid.
11.03 Expenses, Borrower's Indemnity, Letter of Credit Indemnity,
Etc. (a) The Borrower agrees to pay or reimburse each of the Lenders and the
Agent for: (i) all reasonable out-of-pocket costs and expenses of the Agent
(including, without limitation, the reasonable fees and expenses of legal
counsel to the Agent, including the reasonable allocations of internal counsel)
in connection with (A) as the Agent and the Borrower shall have previously
agreed in writing, the negotiation, preparation, execution and delivery of this
Agreement and the other Basic Documents and the extension of credit hereunder
(whether or not consummated) and (B) the negotiation or preparation of any
modification, supplement or waiver of any of the terms of this Agreement or any
of the other Basic Documents (whether or not consummated); (ii) all reasonable
out-of-pocket costs and expenses of the Lenders and the Agent (including,
without limitation, the reasonable fees and expenses of legal counsel) in
connection with (A) any Default and any enforcement or collection proceedings
resulting therefrom, including, without limitation, all manner of participation
in or other involvement with (1) bankruptcy, insolvency, receivership,
foreclosure, winding up or liquidation proceedings, (2) judicial or regulatory
proceedings and (3) workout, restructuring or other negotiations, proceedings or
transactions relating to the indebtedness of the Borrower (whether or not the
workout, restructuring or transaction contemplated thereby is consummated) and
(B) the enforcement of this Section 11.03; and (iii) all transfer, stamp,
documentary or other similar Taxes, assessments or charges levied by any
governmental or revenue authority in respect of this Agreement or any of the
other Basic Documents or any other document referred to herein or therein and
all costs, expenses, Taxes, assessments and other charges incurred in connection
with any filing, registration, recording or perfection of any security interest
contemplated by any Basic Document or any other document referred to therein.
(b) The Borrower hereby agrees to indemnify the Agent and each Lender
and their respective directors, officers, employees, attorneys and agents from,
and hold each of them harmless against, any and all losses, liabilities, claims,
damages or expenses incurred by any of them (including, without limitation, any
and all losses, liabilities, claims, damages or expenses incurred by the Agent
to any Lender, whether or not the Agent or any Lender is a party thereto)
arising out of or by reason of any investigation or litigation or other
proceedings (including any threatened investigation or litigation or other
proceedings) relating to the extensions of credit hereunder or any actual or
proposed use by the Borrower or any of its Subsidiaries of the proceeds of any
of the extensions of credit hereunder, including, without limitation, the
reasonable fees and disbursements of counsel incurred in connection with any
such investigation or litigation or other proceedings (but excluding any such
losses, liabilities, claims, damages or expenses incurred by reason of the gross
negligence or willful misconduct of the Person to be indemnified). Without
limiting the generality of the foregoing, the Borrower will indemnify the Agent
and each Lender from, and hold the Agent and each Lender harmless against, any
losses, liabilities, claims, damages or expenses (including, without limitation,
the reasonable fees and disbursements of counsel) described in the preceding
sentence arising under any Environmental Law as a result of the past, present or
future operations of the Borrower or any of its Subsidiaries (or any predecessor
in interest to the Borrower or any of its Subsidiaries), or the past, present or
future condition of any site or facility owned, operated or leased at any time
by the Borrower or any of its Subsidiaries (or any such predecessor in
interest), or any Release or threatened Release of any Hazardous Materials at or
from any such site or facility, including any such Release or threatened Release
that shall occur during any period when the Agent or any Lender shall be in
possession of any such site or facility following the exercise by the Agent or
any Lender of any of its rights and remedies hereunder or under any of the
Security Documents.
(c) The Borrower hereby agrees to indemnify and hold harmless each
Lender and the Agent from and against any and all claims and damages, losses,
liabilities, costs or expenses that such Lender or the Agent may incur (or that
may be claimed against such Lender or the Agent by any Person whatsoever)
including, without limitation, interest, penalties and all reasonable attorneys
fees and disbursements) to which each Lender and the Agent may become subject
insofar as any such liability arises out of or is based upon a claim, action,
suit or other legal proceeding brought or taken in connection with the execution
and delivery or transfer of or payment or refusal to pay by the Letter of Credit
Issuer under any Letter of Credit; provided that the Borrower shall not be
required to indemnify any Lender or the Agent for any such claims, damages,
losses, liabilities, costs or expenses to the extent, but only to the extent,
caused by (x) the willful misconduct or gross negligence of the Letter of Credit
Issuer, or (y) in the case of the Letter of Credit Issuer, such Lender's failure
to pay under any Letter of Credit after the presentation to it of a drawing
request strictly complying with the terms and conditions of such Letter of
Credit. Nothing in this Section 11.03 is intended to limit the other
obligations of the Borrower, any Lender or the Agent under this Agreement.
(d) Notwithstanding any other provision of this Agreement, neither the
Agent nor the Lenders shall be responsible or liable to the Borrower, any
Guarantor or any other person for any indirect or consequential damages which
may be alleged as a result of this Agreement or any of the Basic Documents.
11.04 Amendments, Etc. Except as otherwise expressly provided in
this Agreement, any provision of this Agreement may be modified or supplemented
only by an instrument in writing signed by the party or parties against which
enforcement is sought (which in respect of any matter involving the Lenders
shall be deemed to be the Majority Lenders), and any provision of this Agreement
may be waived by the Majority Lenders or by the Agent acting with the consent of
the Majority Lenders; provided that: (a) no modification, supplement or waiver
shall, unless by an instrument signed by all of the Lenders or by the Agent
acting with the consent of all of the Lenders: (i) increase, or extend the term
of, any of the Commitments, or extend the time or waive any requirement for the
reduction or termination of any of the Commitments, (ii) extend the date fixed
for the payment of principal of or interest on any Loan, the Reimbursement
Obligations or any fee hereunder, (iii) reduce the amount of any such payment of
principal, (iv) reduce the rate at which interest is payable thereon or any fee
is payable hereunder, (v) alter the rights or obligations of the Borrower to
prepay Loans, (vi) alter the terms of this Section 11.04, (vii) modify the
definition of the term "Majority Lenders" or modify in any other manner the
number or percentage of the Lenders required to make any determinations or waive
any rights hereunder or to modify any provision hereof, (viii) waive any of the
conditions precedent set forth in Section 6.01 hereof, (ix) materially amend or
modify or terminate the provisions of any Guaranty Agreement or (x) amend or
modify the definition of "Borrowing Base" provided herein; and (b) any
modification or supplement of Section 10 hereof shall require the consent of the
Agent.
11.05 Successors and Assigns. This Agreement shall be binding upon
and inure to the benefit of the parties hereto and their respective successors
and permitted assigns.
11.06 Assignments and Participations.
(a) The Borrower may not assign any of its rights or obligations
hereunder or under the Notes without the prior consent of all of the Lenders and
the Agent.
(b) Each Lender may assign any of its Loans, its Notes, its
Commitments, and, if such Lender is a bank, its Letter of Credit Interest (but
only with the consent of, in the case of its outstanding Commitments, the
Borrower, which consent shall not be unreasonably withheld, and the Agent and,
in the case of a Letter of Credit Interest, the Letter of Credit Issuers);
provided that
(i) no such consent by the Borrower or the Agent shall be
required at any time during which an Event of Default shall have occurred and
been continuing hereunder;
(ii) except to the extent the Borrower and the Agent shall
otherwise consent, any such partial assignment (other than to another Lender)
shall be in an amount at least equal to $5,000,000;
(iii) each such assignment by a Lender of its Loans, Note,
Commitment or Letter of Credit Interest shall be made in such manner so that the
same portion of its Loans, Note, Commitment and Letter of Credit Interest is
assigned to the respective assignee; and
(iv) upon each such assignment, the assignor and assignee shall
deliver to the Borrower, the Agent and the Letter of Credit Issuers a Notice of
Assignment in the form of Exhibit D hereto, and the assignor shall pay a
$3,000 recordation fee to the Agent.
Upon execution and delivery by the assignor and the assignee to the Borrower,
the Agent and the Letter of Credit Issuers of such Notice of Assignment, and
upon consent thereto by the Borrower, the Agent and the Letter of Credit Issuers
to the extent required above, the assignee shall have, to the extent of such
assignment (unless otherwise consented to by the Borrower, the Agent and the
Letter of Credit Issuers), the obligations, rights and benefits of a Lender
hereunder holding the Commitment(s), Loans and, if applicable, Letter of Credit
Interest (or portions thereof) assigned to it and specified in such Notice of
Assignment (in addition to the Commitment(s), Loans and Letter of Credit
Interest, if any, theretofore held by such assignee) and the assigning Lender
shall, to the extent of such assignment, be released from the Commitment(s) (or
portion(s) thereof) so assigned.
(c) Upon written notice to the Borrower, a Lender may sell or agree
to sell to one or more other Persons a participation in all or any part of any
Loans or Letter of Credit Interest held by it, or in its Commitments, in which
event each purchaser of a participation (a "Participant") shall be entitled to
the rights and benefits of the provisions of Section 8.01(i) hereof with respect
to its participation in such Loans, Letter of Credit Interest and Commitments as
if (and the Borrower shall be directly obligated to such Participant under such
provisions as if) such Participant were a "Lender" for purposes of said Section,
but, except as otherwise provided in Section 4.07(c) hereof, shall not have any
other rights or benefits under this Agreement or any Note or any other Basic
Document (the Participant's rights against such Lender in respect of such
participation to be those set forth in the agreements executed by such Lender in
favor of the Participant). All amounts payable by the Borrower to any Lender
under Section 5 hereof in respect of Loans, Letter of Credit Interest held by
it, and its Commitments, shall be determined as if such Lender had not sold or
agreed to sell any participations in such Loans, Letter of Credit Interest and
Commitments, and as if such Lender were funding each of such Loan, Letter of
Credit Interest and Commitments in the same way that it is funding the portion
of such Loan, Letter of Credit Interest and Commitments in which no
participations have been sold. In no event shall a Lender that sells a
participation agree with the Participant to take or refrain from taking any
action hereunder or under any other Basic Document except that such Lender may
agree with the Participant that it will not, without the consent of the
Participant, agree to (i) increase or extend the term, or extend the time or
waive any requirement for the reduction or termination, of such Lender's related
Commitment, (ii) extend the date fixed for the payment of principal of or
interest on the related Loan or Loans, Reimbursement Obligations or any portion
of any fee hereunder payable to the Participant, (iii) reduce the amount of any
such payment of principal, (iv) reduce the rate at which interest is payable
thereon, or any fee hereunder payable to the Participant, to a level below the
rate at which the Participant is entitled to receive such interest or fee, (v)
alter the rights or obligations of the Borrower to prepay the related Loans or
(vi) consent to any modification, supplement or waiver hereof or of any of the
other Basic Documents to the extent that the same, under Section 10.09 or 11.04
hereof, requires the consent of each Lender.
(d) In addition to the assignments and participations permitted under
the foregoing provisions of this Section 11.06, any Lender may (without notice
to the Borrower, the Agent or any other Lender and without payment of any fee)
(i) assign and pledge all or any portion of its Loans and its Notes to any
Federal Reserve Lender as collateral security pursuant to Regulation A and any
Operating Circular issued by such Federal Reserve Lender and (ii) assign all or
any portion of its rights under this Agreement and its Loans and its Notes to an
Affiliate. No such assignment shall release the assigning Lender from its
obligations hereunder.
(e) A Lender may furnish any information concerning the Borrower or
any of its Subsidiaries in the possession of such Lender from time to time to
assignees and participants (including prospective assignees and participants).
(f) Anything in this Section 11.06 to the contrary notwithstanding,
no Lender may assign or participate any interest in any Loan or Reimbursement
Obligation held by it hereunder to the Borrower or any of its Affiliates or
Subsidiaries without the prior consent of each Lender.
11.07 Survival. The obligations of the Borrower under the final
paragraph of Section 2.03 and under Sections 5.01, 5.05, 5.06, 5.07 and 11.03
hereof and the obligations of the Lenders under Section 10.05 hereof, shall
survive the repayment of the Loans and Reimbursement Obligations and the
termination of the Commitments and, in the case of any Lender that may assign
any interest in its Commitments, Loans or Letter of Credit Interest hereunder,
shall survive the making of such assignment, notwithstanding that such assigning
Lender may cease to be a "Lender" hereunder. In addition, each representation
and warranty made, or deemed to be made by a notice of any extension of credit
(whether by means of a Loan or a Letter of Credit), herein or pursuant hereto
shall survive the making of such representation and warranty, and no Lender
shall be deemed to have waived, by reason of making any extension of credit
hereunder (whether by means of a Loan or a Letter of Credit), any Default that
may arise by reason of such representation or warranty proving to have been
false or misleading, notwithstanding that such Lender or the Agent may have had
notice or knowledge or reason to believe that such representation or warranty
was false or misleading at the time such extension of credit was made.
11.08 Captions. The table of contents and captions and section
headings appearing herein are included solely for convenience of reference and
are not intended to affect the interpretation of any provision of this
Agreement.
11.09 Counterparts. This Agreement may be executed in any number of
counterparts, all of which taken together shall constitute one and the same
instrument and any of the parties hereto may execute this Agreement by signing
any such counterpart.
11.10 Governing Law; Submission to Jurisdiction. This Agreement and
the Notes shall be governed by, and construed in accordance with, the law of the
State of New York. The Borrower hereby submits, for itself and its property, to
the nonexclusive jurisdiction of the United States District Court for the
Southern District of New York (including any Federal appellate court having
jurisdiction over matters on appeal therefrom) and of the Supreme Court of the
State of New York sitting in New York County (including its Appellate Division),
and of any other appellate court in the State of New York, for the purposes of
all legal proceedings arising out of or relating to this Agreement or the
transactions contemplated hereby. The Borrower hereby irrevocably waives, to
the fullest extent permitted by applicable law, any objection that it may now or
hereafter have to the laying of the venue of any such proceeding brought in such
a court and any claim that any such proceeding brought in such a court has been
brought in an inconvenient forum.
11.11 Waiver of Jury Trial. EACH OF THE BORROWER, THE AGENT AND THE
LENDERS HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE
LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF
OR RELATING TO THIS AGREEMENT, THE NOTES, THE LETTERS OF CREDIT OR THE
TRANSACTIONS CONTEMPLATED HEREBY.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and delivered as of the day and year first above written.
GENESIS CRUDE OIL, L.P.
By: GENESIS ENERGY, L.L.C.
General Partner
By /s/ Ross A. Benavides
--------------------------
Name: Ross A. Benavides
Title: Chief Financial Officer,
General Counsel & Secretary
Address for Notices:
Genesis Crude Oil, L.P
500 Dallas, Suite 2500
Houston, Texas 77002
Attention: Chief Financial Officer
Telephone: (713) 860-2528
Facsimile: (713) 860-2636
Initial Commitment BNP PARIBAS
$35,000,000
By /s/ Zali Win
--------------------------
Name: Zali Win
Title: Director
By /s/ Marcie Weiss
--------------------------
Name: Marcie Weiss
Title: Director
Lending Office for LIBOR Rate Loans:
New York Branch (see below)
Lending Office for Prime Rate Loans:
New York Branch (see below)
Address for Notices:
BNP Paribas
787 Seventh Avenue
New York, New York 10019
Attn: Zali Win, Director
Telecopier No.: 212-841-2146
Telephone No.: 212-841-2013
BNP PARIBAS, as Agent
By /s/ Zali Win
--------------------------
Name: Zali Win
Title: Director
By /s/ Marcie Weiss
--------------------------
Name: Marcie Weiss
Title: Director
Address for Notices:
BNP Paribas
787 Seventh Avenue
New York, New York 10019
Attn: Zali Win, Director
Telecopier No.: 212-841-2146
Telephone No.: 212-841-2013
