EXHIBIT 10.4
EXECUTION COPY
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DEBTOR IN POSSESSION
LETTER OF CREDIT AGREEMENT
dated as of October 18, 2002
among
EOTT ENERGY OPERATING LIMITED PARTNERSHIP,
EOTT ENERGY CANADA LIMITED PARTNERSHIP,
EOTT ENERGY LIQUIDS, L.P.
and
EOTT ENERGY PIPELINE LIMITED PARTNERSHIP,
as debtors and debtors in possession and as joint and several Borrowers,
EOTT ENERGY PARTNERS, L.P.
and
EOTT ENERGY GENERAL PARTNER, L.L.C.
as debtors and debtors in possession and as Guarantors,
STANDARD CHARTERED BANK,
as LC Agent, LC Issuer and Collateral Agent
and
THE LC PARTICIPANTS PARTY HERETO
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TABLE OF CONTENTS
Page
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1. DEFINITIONS AND RULES OF INTERPRETATION..................................................................2
2. THE LETTERS OF CREDIT...................................................................................29
(a) General........................................................................................29
(b) Requesting Letters of Credit...................................................................30
(c) Reimbursement and Participations...............................................................30
(d) No Duty to Inquire.............................................................................31
(e) LC Collateral..................................................................................32
(f) Conditions Precedent to Extension of Credit....................................................33
(g) Use of Proceeds................................................................................36
(h) Mandatory Prepayments..........................................................................37
(i) Application of Payments made to LC Agent.......................................................37
(j) Interest Rates and Fees; Voluntary Reduction of Maximum Facility Amount........................38
3. PAYMENTS TO LC PARTICIPANTS.............................................................................39
(a) General Procedures.............................................................................39
(b) Payment Obligations Absolute...................................................................39
(c) Capital Reimbursement..........................................................................39
(d) Increased Cost of Letters of Credit............................................................40
(e) Notice; Change of Applicable Lending Office....................................................40
(f) Availability...................................................................................40
(g) Reimbursable Taxes.............................................................................41
4. INTENTIONALLY OMITTED...................................................................................42
5. INTENTIONALLY OMITTED...................................................................................42
6. INTENTIONALLY OMITTED...................................................................................42
7. OTHER ACTIONS OF DEBTORS................................................................................42
8. REPRESENTATIONS AND WARRANTIES..........................................................................43
9. AFFIRMATIVE COVENANTS...................................................................................50
(a) Payment and Performance........................................................................50
(b) Payment of Expenses............................................................................50
(c) Instruments, Documents, Securities or Chattel Paper............................................50
(d) Books, Financial Statements and Reports........................................................50
(e) Other Information and Inspections..............................................................53
(f) Appraisals for Eligible Fixed Assets...........................................................54
(g) Notice of Material Events and Change of Address................................................54
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TABLE OF CONTENTS
(Continued)
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(h) Maintenance of Properties......................................................................55
(i) Discharge of Liens.............................................................................55
(j) Maintenance of Existence and Qualifications....................................................55
(k) Payment of Trade Liabilities, Taxes, etc.......................................................55
(l) Insurance......................................................................................56
(m) Performance on Borrowers' Behalf...............................................................56
(n) Interest.......................................................................................56
(o) Compliance with Agreements and Law.............................................................56
(p) Environmental Matters; Environmental Reviews...................................................57
(q) Evidence of Compliance.........................................................................57
(r) Agreement to Deliver Security Documents........................................................57
(s) Guaranties of Newly Created or Acquired Subsidiaries...........................................57
(t) Compliance with Agreements.....................................................................58
(u) Risk Management Policies.......................................................................58
(v) Critical Vendor Program........................................................................58
(w) Retention of Financial Advisor and Commercial Finance Audits...................................58
10. NEGATIVE COVENANTS......................................................................................59
(a) Indebtedness...................................................................................59
(b) Accounts.......................................................................................60
(c) Limitation on Liens............................................................................60
(d) Hedging Contracts..............................................................................60
(e) Limitation on Mergers, etc. and Issuances of Securities........................................60
(f) Limitation on Asset Sales......................................................................61
(g) Limitation on Distributions, Dividends and Redemptions.........................................61
(h) Limitation on New Businesses, Investments and Capital Expenditures.............................61
(i) Limitation on Credit Extensions................................................................62
(j) Transactions with Affiliates...................................................................62
(k) Prohibited Contracts...........................................................................62
(l) Modification of Certain Agreements.............................................................62
(m) Open Positions.................................................................................62
(n) Redelivery of Borrowing Base Report............................................................62
(o) Books and Records..............................................................................63
(p) Bankruptcy Cases...............................................................................63
(q) Cash Budget....................................................................................63
(r) Minimum Crude Oil Lease Volumes................................................................64
(s) Prepetition Indebtedness.......................................................................64
11. EVENTS OF DEFAULT.......................................................................................64
12. RIGHTS AND REMEDIES.....................................................................................67
13. GUARANTY ...............................................................................................68
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TABLE OF CONTENTS
(Continued)
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14. LC AGENT................................................................................................70
(a) Appointment and Authority......................................................................70
(b) Exculpation, the LC Agent's Reliance, etc......................................................70
(c) Credit Decisions...............................................................................71
(d) Indemnification................................................................................71
(e) Rights as LC Participant.......................................................................71
(f) Sharing of Set-Offs and Other Payments.........................................................71
(g) Investments....................................................................................72
(h) Benefit of this Section........................................................................72
(i) Resignation....................................................................................72
(j) Other Lender Parties...........................................................................73
15. ASSIGNMENTS AND PARTICIPATIONS..........................................................................73
16. INDEMNIFICATION.........................................................................................75
17. MISCELLANEOUS...........................................................................................76
SCHEDULES AND EXHIBITS:
SCHEDULE I DISCLOSURE SCHEDULE
SCHEDULE II LC PARTICIPANT SCHEDULE
SCHEDULE III SECURITY SCHEDULE
SCHEDULE IV DESIGNATED CUSTOMERS
EXHIBIT A LETTER OF CREDIT REQUEST
EXHIBIT B CERTIFICATE ACCOMPANYING FINANCIAL STATEMENTS
EXHIBIT C BORROWING BASE REPORT
EXHIBIT D CASH FLOW REPORT
EXHIBIT E ENVIRONMENTAL COMPLIANCE CERTIFICATE
EXHIBIT F OPEN POSITION REPORT
EXHIBIT G INITIAL CASH BUDGET
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TABLE OF CONTENTS
(Continued)
EXHIBIT H CRITICAL VENDOR ORDER
EXHIBIT I WEEKLY COMPLIANCE CERTIFICATE
EXHIBIT J SECOND INTERIM ORDER
EXHIBIT K LEASE VOLUME REPORT
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DEBTOR IN POSSESSION
LETTER OF CREDIT AGREEMENT
DEBTOR-IN-POSSESSION
LETTER OF CREDIT AGREEMENT, dated as of October
18, 2002 (as amended, supplemented or otherwise modified from time to time, and
including all Schedules and Exhibits attached hereto, this "AGREEMENT"), among
EOTT ENERGY OPERATING LIMITED PARTNERSHIP, a Delaware limited partnership and a
debtor and debtor in possession ("EOTT OLP"), EOTT ENERGY CANADA LIMITED
PARTNERSHIP, a Delaware limited partnership and a debtor and debtor in
possession ("EOTT CANADA"), EOTT ENERGY LIQUIDS, L.P., a Delaware limited
partnership and a debtor and debtor in possession ("EOTT LIQUIDS"), EOTT ENERGY
PIPELINE LIMITED PARTNERSHIP, a Delaware limited partnership and a debtor and
debtor in possession ("EOTT PIPELINE" and together with EOTT Canada and EOTT
Liquids, each an "ADDITIONAL OBLIGOR" and collectively, "ADDITIONAL OBLIGORS"
and the Additional Obligors together with EOTT OLP on a joint and several basis,
"BORROWERS"), EOTT ENERGY PARTNERS, L.P., a Delaware limited partnership and a
debtor and debtor in possession ("EOTT MLP"), EOTT ENERGY GENERAL PARTNER,
L.L.C. a Delaware limited liability company and a debtor and debtor in
possession ("EOTT GP" and together with EOTT MLP, each a "GUARANTOR" and
collectively, "GUARANTORS" and together with EOTT OLP and each of the Additional
Obligors, each a "DEBTOR" and collectively, "DEBTORS"), STANDARD CHARTERED BANK,
a banking institution organized and existing under the laws of England and
Wales, as administrative agent for the LC Participants (as defined below) (in
such capacity, the "LC AGENT" and in its individual capacity, "STANDARD
CHARTERED") and as LC Issuer and Collateral Agent hereunder, and each of the
banks or other lending institutions which is a party hereto (as evidenced by the
signature pages of this Agreement) or which may from time to time become a party
hereto or any successor or assignee thereof (each an "LC PARTICIPANT" and
collectively, the "LC PARTICIPANTS").
WHEREAS, on October 8, 2002 (the "FILING DATE"), the Debtors filed
separate petitions under Chapter 11 in the Bankruptcy Court for the Southern
District of Texas;
WHEREAS, each of the Debtors intends to continue to operate its
business pursuant to Sections 1107 and 1108 of the Bankruptcy Code;
WHEREAS, before the Filing Date, EOTT OLP, EOTT Canada, EOTT Liquids,
and EOTT Pipeline (collectively, the "PREPETITION BORROWERS"), EOTT MLP and EOTT
GP (collectively, the "PREPETITION GUARANTORS"), the lenders party thereto (the
"PREPETITION LENDERS"), Standard Chartered as administrative agent for the
Prepetition Lenders (the "PREPETITION AGENT") and letter of credit issuer
thereunder (the "PREPETITION LC ISSUER"), entered into that certain Second
Amended and Restated Reimbursement, Loan and Security Agreement, dated as of
April 23, 2002, as amended by that certain Limited Forbearance and First
Amendment, dated as of August 27, 2002 (the "FIRST AMENDMENT"), among the
Prepetition Borrowers, the Prepetition Guarantors, the Prepetition Lenders, and
the Prepetition Agent (as so amended, the "PREPETITION CREDIT AGREEMENT"),
pursuant to which the Prepetition Lenders extended credit to the Prepetition
Borrowers on the terms set forth therein;
WHEREAS, as of the date hereof, the Prepetition Lenders under the
Prepetition Credit Agreement are owed approximately $20,000,000 in revolving
loan principal obligations incurred directly by the Prepetition Borrowers plus
interest, fees and expenses (the "PREPETITION LOANS"), and $276,205,489.48 in
reimbursement obligations relating to letters of credit issued under the
Prepetition Credit Agreement (the "PREPETITION LETTERS OF CREDIT", and together
with the Prepetition Loans, the "PREPETITION BANK DEBT"), the obligations of the
Prepetition Borrowers in respect thereof being guaranteed by the Prepetition
Guarantors;
WHEREAS, the Borrowers have requested that Standard Chartered and the
other LC Participants provide financing to the Borrowers pursuant to Sections
364(c)(1), (2) and (3) and 364(d) of the Bankruptcy Code, and enter into this
Agreement pursuant to which Standard Chartered and the other LC Participants
would extend to Borrower a letter of credit facility (the "DIP FACILITY") not to
exceed at any one time outstanding $325,000,000 (as such amount may be reduced
or terminated pursuant to this Agreement and subject to availability under the
Borrowing Base), to be made available in the form of letters of credit issued
from time to time by the LC Issuer at the request and for the account of
Borrowers to issue Letters of Credit and to be used by the Borrowers as provided
in Section 2(a)(ii)(4) in which Letters of Credit and Borrowers' reimbursement
obligations thereunder the LC Participants would participate;
WHEREAS, the LC Participants have indicated their willingness to agree
to extend such credit to the Borrowers, all on the terms and conditions set
forth herein and in the other Credit Documents and in accordance with Sections
364(c)(1), (2) and (3) and 364(d) of the Bankruptcy Code, so long as:
(a) such postpetition credit obligations are (i) secured by Liens on
all of the property and interest, real and personal, tangible and
intangible, of the Debtors whether now owned or hereafter acquired,
subject in priority only to certain Liens and the Carve Out as
hereinafter provided and (ii) given superpriority status as provided in
the Orders; and
(b) the Prepetition Lenders receive certain adequate protection for the
Debtors' use, sale or lease of collateral, including the Borrowers' use
of cash collateral, and the priming of the prepetition Liens securing
the obligations of the Borrowers in respect of the Prepetition Credit
Agreement;
WHEREAS, the Borrowers have agreed to provide such collateral,
superpriority claims and adequate protection subject to the approval of the
Bankruptcy Court;
WHEREAS, each of the Guarantors will derive substantial direct and
indirect benefit from the credit made available by the LC Participants to the
Borrowers; and
WHEREAS, the Guarantors are willing to guarantee the reimbursement and
other obligations of Borrowers hereunder;
NOW, THEREFORE, in consideration of these premises and the mutual
undertakings set forth herein, the parties hereto hereby agree as follows:
1. DEFINITIONS AND RULES OF INTERPRETATION. As used in this Agreement, all terms
used herein which are defined in Article 1 or Article 9 of the UCC (as in effect
from time
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to time) shall have the meanings set forth therein unless otherwise defined in
this Agreement, and all references to the plural herein shall also mean the
singular. As used in this Agreement, each of the following terms has the meaning
given to such term in this Section 1 or in the Sections and subsections referred
to below:
"ACCEPTABLE ISSUER" means any national or state bank or trust company
which is organized under the laws of the United States of America or
any state thereof, or any branch licensed to operate under the laws of
the United States of America or any state thereof which is a branch of
a bank organized under any country which is a member of the
Organization for Economic Cooperation and Development, in each case
which has capital, surplus and undivided profits of at least
$500,000,000 and whose commercial paper is rated at least P-1 by
Xxxxx'x or A-1 by S&P.
"ACCOUNT" has the meaning given that term in the UCC.
"ACCOUNT DEBTOR" means any Person who is or who may become obligated
under, with respect to, or on account of, an Account.
"ADDITIONAL GUARANTOR" has the meaning set forth in Section 12(b).
"ADMINISTRATIVE AGENTS" means the Term Lender Agent and the LC Agent.
"AFFILIATE" means, as to any Person, each other Person that directly or
indirectly (through one or more intermediaries or otherwise) controls,
is controlled by, or is under common control with, such Person. A
Person shall be deemed to be "controlled by" any other Person if such
other Person possesses, directly or indirectly, power (i) to vote 5% or
more of the securities (on a fully diluted basis) having ordinary
voting power for the election of directors or managing general partners
or (ii) to direct or cause the direction of the management and policies
of such Person whether by contract or otherwise.
"AGREED ADMINISTRATIVE EXPENSES" means (i) amounts payable pursuant to
28 U.S.C. Section 1930(a)(6) and (ii) Priority Professional Expenses.
"AGREEMENT" has the meaning set forth in the preamble.
"ALTERNATE BASE RATE" means the higher of (A) the variable per annum
rate of interest so designated from time to time by the LC Agent as its
"base rate" and (B) the Federal Funds Rate, plus one-half percent
(0.5%) per annum, in each case, plus three percent (3%) per annum. The
"base rate" is a reference rate and does not necessarily represent the
lowest or best rate being charged to any customer of the LC Agent.
Changes in the Alternate Base Rate resulting from changes in the "base
rate" shall take place immediately without notice or demand of any
kind.
"APPLICABLE LENDING OFFICE" means with respect to any LC Participant,
the office of such LC Participant specified as its "Applicable Lending
Office" in the LC Participant Schedule, or such other office as such LC
Participant may from time to time specify to the Borrower
Representative and the LC Agent and, with respect to the LC Agent, the
office, branch or agency through which it administers this Agreement.
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"APPLICABLE MARGIN" means the applicable margin set forth below that
corresponds to the Average Daily Maximum Drawing Amount as determined
on the last business day of each month:
APPLICABLE MARGIN FOR
AVERAGE DAILY MAXIMUM LETTERS OF CREDIT
DRAWING AMOUNT (PER ANNUM)
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Less than or equal to $325,000,000 but 2.75%
greater than $250,000,000
Less than or equal to $250,000,000 but 2.50%
greater than $200,000,000
Less than or equal to $200,000,000 2.25%
"APPRAISED VALUE OF ELIGIBLE FIXED ASSETS" means the value of Eligible
Fixed Assets on an orderly liquidation basis as calculated by an
independent appraiser selected by the LC Agent utilizing methodologies
satisfactory to the LC Agent. On the Closing Date, the aggregate
Appraised Value of Eligible Fixed Assets (i.e., those assets which are
specifically identified as "Eligible Fixed Assets" in the definition
thereof) will be at least $206,000,000.
"AVERAGE DAILY MAXIMUM DRAWING AMOUNT" means, for any Letter of Credit
for any month, the quotient of (i) the sum of the Maximum Drawing
Amount for such Letter of Credit as it exists at 5:00 p.m., New York
time, for each day of such month divided by (ii) the total number of
days in such month.
"AVOIDANCE ACTIONS" means avoidance actions of the Borrowers under
Chapter 5 or Section 724(a) of the Bankruptcy Code (or proceeds
thereof).
"BANKRUPTCY CODE" means Xxxxx 00, Xxxxxx Xxxxxx Code.
"BANKRUPTCY COURT" means the United States Bankruptcy Court for the
Southern District of Texas, Corpus Christi Division.
"BARREL REPORT" means a report in the form delivered to the
Administrative Agents from time to time setting forth the aggregate
crude oil purchases and cancellations from top twenty-five (25)
leaseholders identified therein for any given week, with such
supporting information in detail as may from time to time be prescribed
by the LC Agent, duly completed and certified by an authorized officer
of EOTT Energy.
"BENEFICIARY" means any beneficiary identified in any Letter of Credit
issued hereunder.
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"BONDHOLDERS" means those parties holding interests in the EOTT MLP
Senior Notes issued pursuant to the EOTT MLP Supplemental Indenture.
"BONDHOLDER'S COMMITTEE" means a committee of Bondholders, if any,
appointed to the Cases.
"BORROWER EXPENSES" means any and all sums, costs and expenses incurred
in connection with the preparation and negotiation of this Agreement,
the other Credit Documents and any related agreements or instruments,
together with any amendments or supplements hereto or thereto, or in
defending, protecting or enforcing the security interest granted herein
or in defending, collecting or attempting to collect the Obligations,
including, without limitation, all search, filing and recording fees,
taxes, attorneys' fees, legal expenses, all expenses of KPMG, all
expenses for appraisals conducted in order to calculate the Appraised
Value of Eligible Fixed Assets, all fees and expenses for the service
and filing of papers, marshals, sheriffs, custodians, auctioneers and
others and all court costs and collection charges, with interest
thereon, from the date of demand until paid at the Alternate Base Rate.
"BORROWERS" has the meaning set forth in the preamble.
"BORROWER REPRESENTATIVE" means, for purposes of making Letter of
Credit Requests to the LC Agent, receiving Letters of Credit from the
LC Issuer, and otherwise communicating with the LC Agent on behalf of
the Borrowers, and taking any action required under this Agreement on
behalf of the Borrowers (and all of the Borrowers shall be bound
thereby), including consent to and any modifications, amendments or
supplements to this Agreement or related documents, EOTT OLP.
"BORROWING BASE" means the remainder of (i) minus the sum of (ii),
(iii), (iv) and (v) below as of the date of determination (without
duplication):
(i) the sum of the following as of the date of determination:
(A) 100% of Eligible Cash Equivalents; plus
(B) 90% of Tier I Eligible Receivables; plus
(C) 85% of Tier II Eligible Receivables; plus
(D) 90% of Tier I Eligible Crude/Product/Liquid
Deliveries; plus
(E) 85% of Tier II Eligible Crude/Product/Liquid
Deliveries; plus
(F) 80% of the Appraised Value of Eligible Fixed Assets,
but in no event to exceed $165,000,000; plus
(G) 90% of NYMEX Hedged Eligible Inventory; plus
(H) 80% of Other Hedged Eligible Inventory; plus
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(I) 80% of the Market Value of Unhedged Eligible
Inventory; plus
(J) 80% of Eligible Margin Deposits; plus
(K) 80% of all Undrawn Product Purchase Letters of
Credit;
(ii) minus the following as of the date of determination:
(A) 100% of First Purchase Crude Payables; plus
(B) 100% of Other Priority Claims; plus
(C) 110% of the aggregate net amounts payable by each
Borrower under all Hedging Contracts to which it is a
party; plus
(D) The amount of any setoff or contra account to any
Eligible Receivable that could arise from an
obligation of any Borrower to sell or purchase crude
oil in any future month to the extent not otherwise
reflected as a reduction of Eligible Receivables,
such amount to be determined on an early termination
or xxxx to market basis;
(iii) minus the principal amount of loans outstanding and any accrued
and unpaid fees and expenses under the Xxxxxx DIP Credit Agreement;
(iv) minus all outstanding amounts under the SCTSC Purchase Agreements,
including all accrued and unpaid fees and expenses thereunder;
(v) minus the Carve Out;
provided, however, that (a) any assets of the Borrowers that are
subject to a successful Lien challenge (with respect to any of the
Liens granted under the Prepetition Credit Agreement, this Agreement or
the SCTSC Purchase Agreements) shall be excluded from the Borrowing
Base and (b) the reference to the Receivables Purchase Agreement in
item (iv) shall not be construed as a characterization of the
transactions thereunder as loans and not true sales.
"BUSINESS DAY" means any day, other than a Saturday, Sunday or day
which shall be in the State of New York a legal holiday or day on which
banking institutions are required or authorized to close.
"CAPITAL EXPENDITURES" means for any period, Consolidated expenditures
(including the aggregate amount of Capital Lease obligations incurred
during such period) made by EOTT MLP and its Consolidated Subsidiaries
to acquire or construct fixed assets, plant or equipment (including
renewals, improvements or replacements, but excluding repairs) during
such period and which, in accordance with GAAP, are classified as
capital expenditures.
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"CAPITAL LEASE" means a lease with respect to which the lessee is
required concurrently to recognize the acquisition of an asset and the
incurrence of a liability in accordance with GAAP.
"CARVE OUT" means, at any time of determination, the sum of (i) allowed
administrative expenses payable pursuant to 28 U.S.C. Section
1930(a)(6) and (ii) Priority Professional Expenses incurred on and
after the Filing Date.
"CASES" means, collectively, the Debtors' reorganization cases under
Chapter 11 of the Bankruptcy Code, pending in the Bankruptcy Court
(Chapter 11 Case No. 02-21730.
"CASH BUDGET" has the meaning set forth in Section 8(w).
"CASH EQUIVALENTS" means Investments in:
(i) marketable obligations, maturing within 12 months
after acquisition thereof, issued or unconditionally
guaranteed by the United States of America or an
instrumentality or agency thereof and entitled to the
full faith and credit of the United States of
America;
(ii) demand deposits and time deposits (including
certificates of deposit) maturing within 12 months
from the date of deposit thereof, (A) with any office
of any LC Participant or (B) with a domestic office
of any national or state bank or trust company which
is organized under the Laws of the United States of
America or any state therein, which has capital,
surplus and undivided profits of at least
$500,000,000 and whose long-term certificates of
deposit are rated at least Aa3 by Xxxxx'x or AA- by
S&P;
(iii) repurchase obligations with a term of not more than
seven days for underlying securities of the types
described in subsection (i) above entered into with
(A) any LC Participant or (B) any other commercial
bank meeting the specifications of subsection (ii)
above;
(iv) commercial paper, other than commercial paper issued
by any Debtor or its Affiliates, maturing within 180
days after acquisition thereof and having a rating of
at least P-1 by Xxxxx'x or A-1 by S&P; and
(v) money market or other mutual funds substantially all
of whose assets comprise securities of the types
described in subsections (i) through (iv) above.
"CASH FLOW REPORT" means a report prepared each Business Day by the
Borrower Representative reflecting on such day EOTT MLP's and its
Subsidiaries' cash flows for the current month, on an actual
(historical) and projected (forecast) basis, substantially in the form
of Exhibit D hereto.
"CASH WATERFALL" has the meaning set forth in the Intercreditor
Agreement.
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"CERCLA" means the Comprehensive Environmental Response, Compensation
and Liability Act of 1980, as amended.
"CERCLIS" means the Comprehensive Environmental Response, Compensation
and Liability Information System List of the Environmental Protection
Agency.
"CHANGE IN CONTROL" means the occurrence of any of the following
events: (i) Any of Xxxxx Xxxxx, Xxxx Xxxxx and Xxxxx Xxxxx, shall cease
for any reason not reasonably acceptable to the LC Agent to serve as an
executive officer of EOTT MLP (unless any such officer shall have
ceased to serve as a result of death, disability, termination for cause
as determined by the EOTT MLP Board of Directors or other reason
Currently Approved by the LC Agent) and such individual has not been
replaced by Persons reasonably acceptable to the LC Agent within a
reasonable period of time, and (ii) any Person or Group shall be the
legal and beneficial owner (within the meaning of Rule 13d-3 under the
Securities Exchange Act of 1934, as amended) of 50% or more of the
combined voting power of the then total partnership interests
(including all securities that are convertible into partnership
interests) of EOTT MLP.
"CLOSING DATE" means the date agreed to by the Borrower Representative
and the LC Agent for the initial Extensions of Credit under this
Agreement, which date shall occur promptly after entry by the
Bankruptcy Court of the Second Interim Order and must be a Business Day
occurring no later than October 18, 2002, but not before all of the
conditions precedent in this Agreement for such Extension of Credit
have been satisfied.
"COLLATERAL" has the meaning set forth in the Intercreditor Agreement.
"COLLATERAL AGENT" means Standard Chartered, acting as collateral agent
on behalf of the LC Issuer, the LC Participants, SCTSC, the Term
Lenders and the Administrative Agents in accordance with the
Intercreditor Agreement.
"COMMITMENT FEE RATE" means one-half percent (0.5%) per annum.
"COMMITMENT PERIOD" means the period from and including the Closing
Date until the Termination Declaration Date.
"CONSOLIDATED" means the consolidation of any Person, in accordance
with GAAP, with its properly consolidated Subsidiaries. References
herein to a Person's Consolidated financial statements, financial
position, financial condition, liabilities, etc. refer to the
consolidated financial statements, financial position, financial
condition, liabilities, etc. of such Person and its properly
consolidated Subsidiaries.
"CONTROL AGREEMENT" has the meaning set forth in the Intercreditor
Agreement.
"CREDIT DOCUMENTS" means, collectively (i) the SCTSC Purchase
Agreements and each and every other agreement, document, certificate or
instrument between SCTSC and any Debtor or otherwise made, executed or
delivered by any Debtor for the benefit of SCTSC Party that is entered
into or delivered on or after the date hereof, (ii) this Agreement, the
Letters of Credit, the Letter of Credit Requests, and each and every
other agreement,
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document, certificate or instrument between any Lender Party, and any
Debtor or otherwise for the benefit of any Lender Party that is entered
into or delivered on or after the date hereof, (iii) the Orders, and
(iv) the Security Documents.
"CREDITORS' COMMITTEE" means the official unsecured creditors'
committee, if any, appointed to the Cases.
"CRITICAL VENDOR ORDER" means the Order for Authority to Pay and Honor
Prepetition Obligations to Critical Customers and Vendors including
Crude Suppliers and Purchasers entered by the Bankruptcy Court attached
hereto as Exhibit H.
"CRUDE OIL PURCHASE AGREEMENT" means, that certain Amended and Restated
Commodities Repurchase Agreement, dated as of the date hereof, by and
among SCTSC and EOTT OLP (as amended, amended and restated,
supplemented or otherwise modified from time to time).
"CURRENTLY APPROVED BY THE LC AGENT" means such Person (including a
limit on the maximum credit exposure to any such Person), storage
location, pipeline, form of letter of credit, event, action, policy, or
other matter, as the case may be, as reflected in the most recent
written notice given by the LC Agent to the Borrower Representative as
being approved. Each such written notice will supersede and revoke each
prior notice. The LC Agent will give or withhold its approval in
accordance with the same general standards it applied under the
Prepetition Credit Agreement.
"DEBT RATING" means, with respect to a Person, the rating then in
effect by a Rating Agency for the long term senior unsecured non-credit
enhanced debt of such Person.
"DEBTOR" has the meaning set forth in the preamble.
"DEFAULT" means any Event of Default and any default, event or
condition that would, with the giving of any requisite notices and the
passage of any requisite periods of time, constitute an Event of
Default.
"DEFAULT RATE" means a rate per annum equal to (a) in the case of fees
on any Letters of Credit, the rate that otherwise would be applicable
to such fees plus 2% per annum; and (b) in the case of any other
monetary Obligations, the Alternate Base Rate plus 2% per annum.
"DESIGNATED ASSETS" means the following assets: (i) MTBE, (ii) the Mont
Belvieu Storage Facility and Grid in Xxxxxxxx, Xxxxxx and Galveston
Counties, Texas and (iii) the gas processing, storage and
transportation facilities at Xxxxxx, Xxxx County, California.
"DIP FACILITY" has the meaning set forth in the fifth recital.
"DIP FACILITY USAGE" means, at the time in question, the aggregate
amount of DIP LC Obligations outstanding at such time.
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"DIP LC OBLIGATIONS" means at the time in question, the sum of all
Matured DIP LC Obligations, plus the maximum amounts LC Issuer might
then or thereafter be called upon to advance under all Letters of
Credit then outstanding.
"DIP MAXIMUM COMMITMENT" means, upon entry of the Second Interim Order,
an aggregate outstanding principal amount not to exceed $325,000,000.
"DISCLOSURE SCHEDULE" means Schedule I hereto.
"ELIGIBLE ASSIGNEE" means (i) a commercial bank organized under the
laws of the United States, or any state thereof or (ii) a commercial
bank organized under the laws of any other country which is a member of
the Organization for Economic Cooperation and Development, or a
political subdivision of any such country provided, that such bank is
acting through a branch or agency in the United States, and, in the
case of each of (i) and (ii), having combined capital, surplus and
undivided profits of at least $100,000,000; or (iii) a Person that is
primarily engaged in the business of commercial banking and that is (A)
a Subsidiary of an LC Participant, (B) a Subsidiary of a Person of
which an LC Participant is a Subsidiary, or (C) a Person of which an LC
Participant is a Subsidiary, or (iv) any other commercial bank, savings
and loan association, savings bank, finance company, insurance company,
pension fund, mutual fund or other financial institution (whether a
corporation, partnership or other entity) acceptable to the LC Agent
and, unless there shall have occurred and be continuing a Default, the
Borrower Representative, such acceptance not to be unreasonably
withheld or delayed.
"ELIGIBLE CASH EQUIVALENTS" means Cash Equivalents in which any
Borrower has lawful and absolute title, which are free from any express
or implied at law Lien, trust or other beneficial interest, in which
the Collateral Agent holds a fully perfected first-priority security
interest prior to the rights of, and enforceable as such against, any
other Persons pursuant to a Control Agreement.
"ELIGIBLE CRUDE/PRODUCT/LIQUID DELIVERIES" means at the time of any
determination thereof (and without duplication), each Account
representing an amount that will be, as reasonably determined in good
faith by the Borrower Representative, an Account of any Borrower with
respect to sales and deliveries of crude oil, refined petroleum
products or NGLs made or committed to be made in each case under a firm
written purchase and sale agreement but for which a Borrower has not
yet issued an invoice to the purchaser, and as to which the following
requirements have been fulfilled to the reasonable satisfaction of the
LC Agent:
(i) such Borrower has lawful and absolute title to such Account;
(ii) such Account is a valid, legally enforceable obligation of an
Account Debtor payable in United States or Canadian dollars,
arising from the sale and delivery of crude oil, refined
petroleum products or NGLs to such Person in the United States
of America and/or Canada in the ordinary course of business of
such Borrower, to the extent of the volumes of crude oil,
refined petroleum products or NGLs delivered to such Person
prior to the date of determination;
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(iii) there has been excluded from such Account (i) any portion that
is subject to any dispute, rejection, loss, non-conformance,
counterclaim, offset, deduction or other claim or defense on
the part of any Account Debtor or to any claim on the part of
any Account Debtor denying liability under such Account, (ii)
the amount of any account payable or other liability owed by
such Borrower to the Account Debtor on such Account, whether
or not a specific netting agreement may exist, excluding,
however, any portion of any such account payable or other
liability which is at the time in question covered by a Letter
of Credit, limited to the total amount of such Account and
(iii) the amount of any tax liability owed by such Borrower to
any governmental authority with respect to collections on such
Account;
(iv) such Borrower has the full and unqualified right to assign and
grant a security interest in such Account to the Collateral
Agent as security for the Obligations;
(v) such Account (A) represents the uninvoiced amount in respect
of volumes of crude oil, refined petroleum products or NGLs,
title to which was or will be assigned or otherwise
transferred by such Borrower during the month of determination
or the month immediately preceding or immediately following
the month of determination, (B) is governed by an enforceable
purchase and sale agreement and (C) and is not evidenced by
any promissory note or other instrument;
(vi) such Account is not subject to any Lien in favor of any Person
and is subject to a fully perfected first-priority security
interest in favor of the Collateral Agent pursuant to the
Credit Documents, prior to the rights of, and enforceable as
such against, any other Person except for a Lien in respect of
First Purchase Crude Payables;
(vii) such Account will be due not more than 30 days following the
last day of the calendar month in which such Borrower's
invoice will be submitted;
(viii) such Account is not payable by an Account Debtor with more
than twenty percent (20%) of its Accounts to the Borrowers
that are outstanding more than 60 days from the invoice date;
(ix) the Account Debtor in respect of such Account (i) is located,
is conducting significant business or has significant assets
in the United States of America and/or Canada, (ii) is a
Person Currently Approved by the LC Agent, (iii) is not an
Affiliate of Borrower, (iv) is not the subject of any event of
the type described in Section 11(h) and (v) has established a
credit limit with such Borrower in an amount Currently
Approved by the LC Agent;
(x) the Account Debtor in respect of such Account is not a
governmental authority, domestic or foreign; and
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(xi) such Account is not the obligation of an Account Debtor as to
which the LC Agent determines in its reasonable discretion
that there is a legitimate concern over the timing or
collection of such obligation.
"ELIGIBLE FIXED ASSETS" means assets of any Borrower that (i) are
included in Property, Plant and Equipment as reflected in the most
current Consolidated balance sheet of EOTT MLP and its Subsidiaries,
(ii) are subject to a fully perfected first-priority security interest
(subject only to Permitted Liens) in favor of the Collateral Agent
pursuant to the Security Documents and the Orders prior to the rights
of, and enforceable as such against, any other Person and (iii) have
been appraised by an independent appraiser selected by the LC Agent. At
the Closing Date hereof, Eligible Fixed Assets will include only the
assets known as (i) MTBE, (ii) the Mont Belvieu storage facility and
grid in Xxxxxxxx, Xxxxxx and Galveston Counties, Texas, (iii) the
Mississippi/Alabama pipeline system and related Mobile terminal, (iv)
the Kansas pipelines, (v) the Oklahoma pipelines and (vi) the Rockies
pipelines (which comprise of assets located in the states of Colorado,
North Dakota, South Dakota, Wyoming, Montana and Nebraska), to the
extent that such assets are subject to a first-priority security
interest (subject only to Permitted Liens) in favor of the Collateral
Agent, provided, that if the first priority perfected security interest
of the Collateral Agent on any asset which otherwise satisfies the
criteria of an Eligible Fixed Asset shall be successfully challenged by
any Person, such asset shall be excluded as an Eligible Fixed Asset.
"ELIGIBLE INVENTORY" means inventories of crude oil or NGLs in which
any Borrower has lawful and absolute title (or which are owned by SCTSC
pursuant to the Crude Oil Purchase Agreement), which are (i) not
subject to any Lien in favor of any Person (other than Permitted
Inventory Liens), (ii) subject to a fully perfected first-priority
security interest (subject only to Permitted Inventory Liens) in favor
of the Collateral Agent pursuant to the Credit Documents securing all
the Obligations prior to the rights of, and enforceable as such
against, any other Person, (iii) located in storage locations
(including pipelines) that are either (A) owned by a Debtor or (B)
Currently Approved by the LC Agent and (iv) otherwise satisfactory to
the LC Agent in its sole discretion in terms of quality, quantity and
such other matters as the LC Agent deems relevant, minus, the amount of
any Permitted Inventory Lien on any such inventory. For the avoidance
of doubt, inventories included in Eligible Crude/Product/Liquid
Deliveries are excluded from Eligible Inventory.
"ELIGIBLE MARGIN DEPOSIT" means the net equity value of investments by
any Borrower in margin deposit accounts with commodities brokers
Currently Approved by the LC Agent on nationally recognized exchanges
subject to a perfected first-priority security interest in favor of the
Collateral Agent and a three-party agreement among Borrower, the
Collateral Agent and the depository institution, in form and substance
satisfactory to the Collateral Agent.
"ELIGIBLE RECEIVABLES" means at the time of any determination thereof
(and without duplication), each Account with respect to sales and
deliveries by any Borrower of crude oil or NGLs, and as to which the
following requirements have been fulfilled to the reasonable
satisfaction of the LC Agent:
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(i) such Borrower, or SCTSC pursuant to the Receivables Purchase
Agreement, has lawful and absolute title to such Account;
(ii) such Account is a valid, legally enforceable obligation of an
Account Debtor payable in United States or Canadian dollars,
arising from the sale and delivery of crude oil or NGLs to
such Person in the United States of America in the ordinary
course of business of such Borrower, to the extent of the
volumes of crude oil or NGLs delivered to such Person prior to
the date of determination;
(iii) there has been excluded from such Account (i) any portion that
is subject to any dispute, rejection, loss, non-conformance,
counterclaim, offset, deduction or other claim or defense on
the part of any Account Debtor or to any claim on the part of
any Account Debtor denying liability under such Account, (ii)
the amount of any account payable or other liability owed by
such Borrower to the Account Debtor on such Account, whether
or not a specific netting agreement may exist, excluding,
however, any portion of any such account payable or other
liability which is at the time in question covered by a Letter
of Credit and (iii) the amount of any tax liability owed by
such Borrower to any governmental authority with respect to
collections on such Account;
(iv) such Borrower has the full and unqualified right to assign and
grant a security interest in such Account to the Collateral
Agent as security for the Obligations;
(v) such Account is evidenced by an invoice rendered to the
Account Debtor, is governed by a purchase and sale agreement,
exchange agreement or other written agreement and is not
evidenced by any promissory note or other instrument;
(vi) such Account is not subject to any Lien in favor of any Person
and is subject to a fully perfected first-priority security
interest in favor of the Collateral Agent pursuant to the
Credit Documents, prior to the rights of, and enforceable as
such against, any other Person except for a Lien in respect of
First Purchase Crude Payables;
(vii) such Account is due not more than 30 days following the last
day of the calendar month in which the crude oil or NGLs
delivery occurred and is not more than 30 days past due
(except that any Account or group of Accounts of a single
Account Debtor, in either case in excess of $500,000 shall be
excluded from Eligible Receivables if not paid within five
days after the original invoice due date);
(viii) such Account is not payable by an Account Debtor with more
than twenty percent (20%) of its Accounts to any Borrower that
are outstanding more than 60 days from the invoice date;
(ix) the Account Debtor in respect of such Account (i) is located,
is conducting significant business or has significant assets
in the United States of America and/or Canada, (ii) is a
Person Currently Approved by the LC Agent, (ii) is not an
Affiliate of Borrower, (iii) is not the subject of any event
of the type described in
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Section 11(h) and (iv) has established a credit limit with a
Borrower in an amount Currently Approved by the LC Agent;
(x) the Account Debtor in respect of such Account is not a
governmental authority, domestic or foreign; and
(xi) such Account is not the obligation of an Account Debtor as to
which the LC Agent determines in its reasonable discretion
that there is a legitimate concern over the timing or
collection of such obligation.
"EMPLOYEE TRANSITION AGREEMENT" means that certain employee transition
agreement, dated as of October 7, 2002, by and among the EOTT Parties
and the Enron Parties.
"ENRON" means Enron Corp., an Oregon corporation and
debtor-in-possession in the Enron Bankruptcy Proceedings.
"ENRON BANKRUPTCY PROCEEDINGS" means the actions under the petitions
for relief filed by Enron and certain of its Affiliates under the
Bankruptcy Code in the United States Bankruptcy Court for the Southern
District of New York, In re Enron Corp., et al, jointly administered
under Case No. 01-16034.
"ENRON PARTIES" means Enron, Enron Energy Services, Inc. a Delaware
corporation and a debtor in possession, Enron North America Corp., a
Delaware corporation and debtor in possession, Enron Pipeline Services
Company, a Delaware corporation, EGP Fuels Company, a Delaware
corporation, and Enron Gas Liquids, Inc., a Delaware corporation and a
debtor and a debtor in possession.
"ENRON SETTLEMENT AGREEMENT" means the settlement agreement, dated as
of October 7, 2002, by and among the EOTT Parties and the Enron Parties
settling, among other things, certain claims owed by each of the EOTT
Parties to the Enron Parties.
"ENVIRONMENTAL LAWS" means any and all laws relating to the environment
or to emissions, discharges, releases or threatened releases of
pollutants, contaminants, chemicals or industrial, toxic or hazardous
substances or wastes into the environment including ambient air,
surface water, ground water or land, or otherwise relating to the
manufacture, processing, distribution, use, treatment, storage,
disposal, transport or handling of pollutants, contaminants or
chemicals or industrial, toxic or hazardous substances or wastes.
"EOTT CANADA" has the meaning set forth in the preamble.
"EOTT ENERGY" means EOTT Energy Corp., a Delaware corporation.
"EOTT FINANCE CORP." means EOTT Energy Finance Corp., a Delaware
corporation and a debtor and a debtor in possession.
"EOTT GP" has the meaning set forth in the preamble.
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"EOTT LIQUIDS" has the meaning set forth in the preamble.
"EOTT MLP" has the meaning set forth in the preamble.
"EOTT MLP SENIOR NOTES" means EOTT MLP's $235,000,000, in original
aggregate principal amount, of 11% Senior Notes due 2009.
"EOTT MLP SENIOR NOTES INDENTURE" means the Indenture, dated October 1,
1999, among EOTT MLP, EOTT Finance Corp., a Delaware corporation ("EOTT
FINANCE CORP."), EOTT OLP, EOTT Pipeline, EOTT Canada and the Bank of
New York, as supplemented by the EOTT MLP Supplemental Indenture.
"EOTT MLP SUPPLEMENTAL INDENTURE" means the First Supplemental
Indenture, dated October 1, 1999, among EOTT MLP, EOTT Finance Corp.,
EOTT OLP, EOTT Pipeline, EOTT Canada and The Bank of New York.
"EOTT PARTIES" means the Borrowers, the Guarantors and EOTT Energy.
"EOTT TERMINAL" means any storage terminal, tankage or facility owned
by any Borrower.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, together with all rules and regulations
promulgated with respect thereto.
"ERISA AFFILIATE" means each Debtor and all members of a controlled
group of corporations and all trades or businesses (whether or not
incorporated) under common control that, together with such Debtor, are
treated as a single employer under Section 414 of the Tax Code.
"ERISA PLAN" means any employee pension benefit plan subject to Title
IV of ERISA maintained by any ERISA Affiliate with respect to which any
Debtor has a fixed or contingent Liability.
"EVENT OF DEFAULT" shall mean the occurrence of any event described in
Section 11 of this Agreement.
"EXTENSION OF CREDIT" means (i) the issuance of a Letter of Credit or
the amendment of any Letter of Credit having the effect of extending
the stated termination date thereof or increasing the maximum amount
available to be drawn thereunder or (ii) the funding of the
participation in an unpaid Matured DIP LC Obligation. The initial
Extensions of Credit shall occur on the Closing Date with the
conversion of the Prepetition Letters of Credit to the Letters of
Credit hereunder pursuant to Section 2(a)(i).
"FEDERAL FUNDS RATE" means, for any day, the rate per annum (rounded
upwards, if necessary, to the nearest 1/1000th of one percent) equal to
the weighted average of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged by
Federal funds brokers on such day, as published by the Federal
-15-
Reserve Bank of New York on the Business Day next succeeding such day;
provided, however, that (i) if the day for which such rate is to be
determined is not a Business Day, the Federal Funds Rate for such day
shall be such rate on such transactions on the next preceding Business
Day as so published on the next succeeding Business Day and (ii) if
such rate is not so published for any day, the Federal Funds Rate for
such day shall be the average rate quoted to the LC Agent on such day
on such transactions as determined by the LC Agent.
"FINAL ORDER" means a final order of the Bankruptcy Court in the Cases
authorizing and approving this Agreement and the other Credit Documents
under Sections 364(c) and (d) of the Bankruptcy Code and entered at a
final hearing, in form and substance satisfactory to the Administrative
Agents. The Final Order shall, among other things, provide the same
Superpriority Claims and superpriority Lien status as the Second
Interim Order.
"FIRST INTERIM ORDER" means the first interim DIP financing order of
the Bankruptcy Court in the Cases authorizing and approving this
Agreement and the other Credit Documents under Sections 364(c) and (d)
of the Bankruptcy Code and entered at the first interim hearing on
October 9, 2002.
"FIRST PURCHASE CRUDE PAYABLES" means the unpaid amount of any payable
obligation related to the purchase of crude oil by any Borrower that
the LC Agent determines will be secured by a statutory Lien, including
but not limited to the statutory Liens, if any, created under the laws
of Alabama, Arkansas, California, Colorado, Kansas, Louisiana,
Mississippi, Montana, Nebraska, New Mexico, Xxxxx Xxxxxx, Xxxxxxxx,
Xxxxx Xxxxxx, Xxxxx or any other state to the extent such payable
obligation is not at the time in question covered by a Letter of
Credit.
"FISCAL QUARTER" means a three-month period ending on March 31, June
30, September 30 or December 31 of any year.
"FISCAL YEAR" means a twelve-month period ending on December 31 of any
year.
"FIXED PRICE CONTRACT" means a purchase or sale contract for crude oil,
refined petroleum products or NGLs where the price has been fixed.
"GAAP" means those generally accepted accounting principles and
practices recognized as such by the Financial Accounting Standards
Board (or any generally recognized successor).
"GUARANTORS" has the meaning set forth in the preamble.
"HAZARDOUS MATERIALS" means any substances regulated under any
Environmental Law, whether as pollutants, contaminants or chemicals, as
industrial, toxic or hazardous substances or wastes or otherwise.
"HEDGING CONTRACT" means (i) any agreement providing for options,
swaps, floors, caps, collars, forward sales or forward purchases
involving interest rates, commodities or commodity prices, equities,
currencies, bonds or indexes based on any of the foregoing,
-16-
(ii) any option, futures or forward contract traded on an exchange and
(iii) any other derivative agreement or other similar agreement or
arrangement, excluding in the case of subsection (i), (ii) and (iii),
for purposes of Section 10(d) only, any such agreement or contract
covering crude oil, refined oil products or NGLs that is entered into
by a Borrower (A) in the ordinary course of business, (B) in accordance
with the then effective Risk Management Policies and (C) not for
speculative purposes.
"HIGHEST LAWFUL RATE" means, with respect to each Lender Party to whom
Obligations are owed, the maximum nonusurious rate of interest that
such Lender Party is permitted under applicable Law to contract for,
take, charge or receive with respect to such Obligations. All
determinations herein of the Highest Lawful Rate or of any interest
rate determined by reference to the Highest Lawful Rate shall be made
separately for each Lender Party as appropriate to assure that the
Credit Documents are not construed to obligate any Person to pay
interest to any Lender Party at a rate in excess of the Highest Lawful
Rate applicable to such Lender Party.
"INDEBTEDNESS" of any Person means its Liabilities (without
duplication) in any of the following categories:
(i) Liabilities for borrowed money,
(ii) Liabilities constituting an obligation to pay the deferred
purchase price of property or services,
(iii) Liabilities evidenced by a bond, debenture, note or similar
instrument,
(iv) Liabilities that would be required under GAAP to be shown on
such Person's balance sheet as a liability,
(v) Liabilities arising under Hedging Contracts (on a net basis to
the extent netting is provided for in the applicable Hedging
Contract),
(vi) Liabilities constituting principal under Capital Leases,
(vii) Liabilities arising under conditional sales or other title
retention agreements,
(viii) Liabilities owing under direct or indirect guaranties of
Liabilities of any other Person or otherwise constituting
obligations to purchase or acquire or to otherwise protect or
insure a creditor against loss in respect of Liabilities of
any other Person (such as obligations under working capital
maintenance agreements, agreements to keep-well or agreements
to purchase Liabilities, assets, goods, securities or
services), but excluding endorsements in the ordinary course
of business of negotiable instruments in the course of
collection,
(ix) Liabilities consisting of an obligation to purchase or redeem
commodities, securities or other property, if such Liabilities
arise out of or in connection with the sale or issuance of the
same or similar commodities, securities or property (for
-17-
example, repurchase agreements, mandatorily redeemable
preferred stock and sale/leaseback agreements),
(x) Liabilities with respect to letters of credit or applications
or reimbursement agreements therefor,
(xi) Liabilities with respect to banker's acceptances or
(xii) Liabilities with respect to obligations to deliver goods or
services in consideration of advance payments therefor;
provided, however, that the "INDEBTEDNESS" of any Person shall not
include Liabilities that were incurred in the ordinary course of
business by such Person on ordinary trade terms to vendors, suppliers
or other Persons providing goods and services for use by such Person in
the ordinary course of its business, unless and until such Liabilities
are outstanding more than 120 days after the date the respective goods
are delivered or the respective services are rendered, other than
Liabilities contested in good faith by appropriate proceedings, if
required, and for which adequate reserves are maintained on the books
of such Person in accordance with GAAP.
"INELIGIBLE PROFESSIONAL EXPENSES" means fees or expenses incurred by
any Person, including professionals retained by the Borrowers, the
Guarantors, the Creditors' Committee or any Bondholder's Committee, in
(A) preventing, hindering or delaying the LC Participants', the LC
Agent's or the Collateral Agent's enforcement or realization upon any
of the Collateral once the Termination Declaration Date has occurred,
(B) using cash collateral or selling any other Collateral without the
consent of the Administrative Agents (except to the extent permitted by
this Agreement), (C) incurring Indebtedness without the consent of the
Administrative Agents (except to the extent permitted by this
Agreement) and (D) objecting to or contesting in any manner, or in
raising any defenses to, the validity, extent, perfection, priority or
enforceability of the Prepetition Bank Debt or the Obligations or any
mortgages, liens or security interests with respect thereto or any
other rights or interests of the LC Issuer, the LC Participants, SCTSC,
the Term Lenders, the Administrative Agents or the Collateral Agent, or
in asserting any claims or causes of action, including, without
limitation, Avoidance Actions or equitable subordination claims against
the LC Issuer, the LC Participants, SCTSC, the Term Lenders, the
Administrative Agents or the Collateral Agent. The term does not
include fees or expenses incurred for investigation by the Borrowers or
the Guarantors (or an authorized substitute for the Borrowers or the
Guarantors if the Borrowers or the Guarantors are for some reason
unable to conduct an investigation) of claims, causes of action or
theories for litigation regarding (a) the validity, enforceability,
perfection or priority of the prepetition liens in the prepetition
collateral, (b) the validity, allowability, priority, status or amount
of the prepetition indebtedness, within 30 days following the Filing
Date or (c) the validity and enforceability of the SCTSC Purchase
Agreements (provided, that the expenses incurred for such investigation
shall not exceed $75,000).
"INITIAL CASH BUDGET" has the meaning set forth in Section 8(w).
-18-
"INITIAL FINANCIAL STATEMENTS" means the unaudited Consolidated balance
sheet of EOTT MLP and its Subsidiaries as of August 31, 2002 and the
related Consolidated statement of operations, cash flows and partners'
capital for the month ended August 31, 2002.
"INTERCREDITOR AGREEMENT" means the Intercreditor and Security
Agreement, dated as of the date hereof, among the Borrowers, the
Guarantors, the LC Agent, the LC Participants, SCTSC, the Term Lender
Agent, the Term Lenders and the Collateral Agent, as amended, amended
and restated, supplemented, or otherwise modified in accordance with
Section 10(l).
"INVESTMENT" means any investment made, directly or indirectly in any
Person, whether by acquisition of shares of capital stock, Indebtedness
or other obligations or securities or by loan, advance, capital
contribution or otherwise and whether made in cash, by the transfer of
property or by any other means.
"KPMG" means KPMG L.L.P., acting as financial advisor to the LC Agent's
Special Counsel.
"LAW" means any statute, law, regulation, ordinance, rule, treaty,
judgment, order, decree, permit, concession, franchise, license,
agreement or other governmental restriction of the United States or any
state or political subdivision thereof or of any foreign country or any
department, province or other political subdivision thereof.
"LC AGENT" has the meaning set forth in the preamble.
"LC AGENT'S SPECIAL COUNSEL" means Lovells and Xxxxxxx XxXxxxxxx LLP or
such other counsel as may be approved by the LC Agent.
"LC COLLATERAL" has the meaning set forth in Section 2(e)(i).
"LC CONDITIONS" has the meaning set forth in Section 2(i).
"LC ISSUER" means Standard Chartered, in its capacity as an issuer of
Letters of Credit hereunder, its successors in such capacity and any
other LC Participant appointed by the LC Agent as an LC Issuer
hereunder in place of or in addition to Standard Chartered; provided,
however, such appointment shall have been approved by the Majority LC
Participants.
"LC PARTICIPANT SCHEDULE" means Schedule II hereto.
"LC PARTICIPANTS" means each signatory hereto (other than any Debtor
that is a party hereto), including Standard Chartered, in its capacity
as an LC Participant hereunder rather than as the LC Agent, LC Issuer
or Collateral Agent, and the successors of each such party.
"XXXXXX DIP CREDIT AGREEMENT" means the Debtor In Possession Term Loan
Agreement, dated as of the date hereof, among the Borrowers, the
Guarantors, the Term
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Lenders and the Term Lender Agent, as amended, amended and restated,
supplemented, or otherwise modified from time to time pursuant to which
the lenders thereunder will make available to the Borrowers an
aggregate principal amount of $75,000,000.00.
"LENDER PARTIES" means the LC Agent, the LC Issuer, all LC Participants
and SCTSC.
"LETTER OF CREDIT" means any letter of credit issued by the LC Issuer
hereunder at the application of the Borrower Representative.
"LETTER OF CREDIT FEE" means with respect to each Letter of Credit for
each month or a portion thereof while such Letter of Credit remains
outstanding, a fee equal to the product of (i) the Applicable Margin
for Letters of Credit and (ii) the Average Daily Maximum Drawing Amount
thereof.
"LETTER OF CREDIT REQUEST" means a request in the form and substance of
Exhibit A or substantially in such form as the LC Issuer may from time
to time prescribe delivered by the Borrower Representative to the LC
Issuer in accordance with the provisions of this Agreement.
"LIABILITIES" means, as to any Person, all Indebtedness, liabilities
and obligations of such Person, whether matured or unmatured,
liquidated or unliquidated, primary or secondary, direct or indirect,
absolute, fixed or contingent, and whether or not required to be
considered pursuant to GAAP.
"LIEN" means, with respect to any property or assets, any right or
interest therein of a creditor to secure Liabilities owed to it or any
other arrangement with such creditor which provides for the payment of
such Liabilities out of such property or assets or which allows such
creditor to have such Liabilities satisfied out of such property or
assets prior to the general creditors of any owner thereof, including
any lien, mortgage, security interest, pledge, deposit, production
payment, rights of a vendor under any title retention or conditional
sale agreement or lease substantially equivalent thereto, tax lien,
mechanic's or materialman's lien or any other charge or encumbrance for
security purposes, whether arising by law or agreement or otherwise,
but excluding any right of offset that arises without agreement in the
ordinary course of business. "LIEN" also means any filed financing
statement, any registration of a pledge (such as with an issuer of
uncertificated securities) or any other arrangement or action that
would serve to perfect a Lien described in the preceding sentence,
regardless of whether such financing statement is filed, such
registration is made or such arrangement or action is undertaken before
or after such Lien exists.
"MAJORITY LC PARTICIPANTS" means LC Participants whose aggregate
Percentage Shares equal or exceed sixty-six and two-thirds percent
(66-2/3%).
"MARKET PRICE" means, on each day, a spot price for the inventory of
crude oil or NGLs being valued, determined by published prices and
methodology as Currently Approved by the LC Agent at the time of
determination.
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"MARKET VALUE OF UNHEDGED ELIGIBLE INVENTORY" means, with respect to
any volume of Unhedged Eligible Inventory, the net proceeds that would
be realized upon an immediate sale thereof for cash at the Market Price
and otherwise on an as-is/where-is basis pursuant to foreclosure of the
Liens thereon in favor of the Collateral Agent.
"MATERIAL ADVERSE CHANGE" means a material and adverse change, from the
state of affairs since the Filing Date, including any such change that
may result from the settlement, discharge, release or other resolution
of, or any change that may result from any development or event
affecting any matter disclosed in the Disclosure Schedule, or as
represented or warranted in any Credit Document, including any such
change that may result from the settlement, discharge, release or other
resolution of, or any change that may result from any development or
event affecting any matter disclosed in the Disclosure Schedule, to (i)
EOTT MLP's Consolidated financial condition as set forth in the Cash
Budget, (ii) EOTT MLP's Consolidated operations, properties or
prospects, considered as a whole, (iii) the Borrowers' ability to
timely pay the Obligations or (iv) the enforceability of any Credit
Document.
"MATURED DIP LC OBLIGATIONS" means all amounts paid by LC Issuer on
drafts or demands for payment drawn or made under or purported to be
under any Letter of Credit and all other amounts due and owing to LC
Issuer under any Letter of Credit Request.
"MATURITY DATE" means the earlier to occur of (i) March 31, 2003 and
(ii) the effective date of a Reorganization Plan of the Debtors that
has been confirmed by an order of the Bankruptcy Court.
"MAXIMUM DRAWING AMOUNT" means, at the time in question, the maximum
amounts that LC Issuer might then or thereafter be called upon to
advance under any Letter of Credit issued by LC Issuer then outstanding
(including any Letter of Credit converted from Prepetition Letters of
Credit) or, if the context requires, the sum of all such amounts under
all such Letters of Credit.
"MONTHLY PAYMENT DATE" means the first Business Day of each month.
"MOODY'S" means Xxxxx'x Investors Service, Inc., or its successor.
"MTBE" means the MTBE facility in Xxxxxx County, Texas.
"NGLS" means liquid hydrocarbon products extracted from a natural gas
stream, including ethane, propane, normal butane, isobutane and natural
gasoline.
"NYMEX" means the New York Mercantile Exchange.
"NYMEX HEDGED ELIGIBLE INVENTORY" means Eligible Inventory which has
been hedged for delivery within the next 190 days by a contract on the
NYMEX arranged through brokers approved by the LC Agent and with whom a
three-party agreement among any Borrower, the Collateral Agent and such
broker has been entered in form and substance satisfactory to the
Collateral Agent or otherwise hedged in a manner satisfactory to the LC
Agent (it being understood that any such Eligible Inventory which
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has been sold to SCTSC pursuant to the Crude Oil Purchase Agreement
shall be included in "NYMEX Hedged Eligible Inventory"). The value of
NYMEX Hedged Eligible Inventory shall be the volume of the inventory
times the Market Price.
"OBLIGATION" means any part of the Obligations.
"OBLIGATIONS" shall mean and include any and all Indebtedness,
Liabilities and obligations of every kind, nature and description of
each Debtor to any Lender Party, or any of them, however evidenced,
arising under this Agreement or the other Credit Documents, whether now
existing or hereafter arising, whether direct or indirect, absolute or
contingent, joint and/or several, due or not due, primary or secondary,
liquidated or unliquidated, secured or unsecured, or on original,
renewed or extended terms and whether arising directly or acquired by
LC Participants from any other party to the Credit Documents
(including, without limitation, participations or interests of any LC
Participant in the obligations of any Debtor to others), whether
incurred by any Debtor as principal, surety, endorser, guarantor,
accommodation party, indemnitor or otherwise.
"OFFSETTING POSITION" means any offsetting sale or SCTSC Purchase
Agreements, an offsetting NYMEX contract, an offsetting physical
inventory position (excluding tank bottoms and pipeline linefill
inventory classified as a long term asset and working inventory not
held for resale) or an offsetting swap, collar or option contract, in
each case eliminating price risk and substantially all basis risk.
"OPEN POSITION" means, with respect to crude oil inventory or crude oil
purchase or sale contracts, any position that does not have an
Offsetting Position.
"ORDERS" means, collectively, the First Interim Order, the Second
Interim Order and the Final Order.
"OTHER HEDGED ELIGIBLE INVENTORY" means Eligible Inventory (other than
NYMEX Hedged Eligible Inventory) which has been hedged with a contract
for physical delivery to a counterparty whose Account would qualify as
a Tier I Eligible Receivable or otherwise hedged in a manner
satisfactory to the LC Agent in its sole discretion (it being
understood that any such Eligible Inventory which has been sold to
SCTSC pursuant to the Crude Oil Purchase Agreement shall be included in
"Other Hedged Eligible Inventory"). The value of Other Hedged Eligible
Inventory shall be the volume of the inventory times the Market Price.
"OTHER PRIORITY CLAIMS" means any account payable, obligation or
liability that the LC Agent has determined has or will have a Lien upon
or claim against any Cash Equivalent, Account or inventory of any
Borrower senior or equal in priority to the security interests in favor
of the Collateral Agent, in each case to the extent such Cash
Equivalent, Account or inventory of any Borrower is otherwise included
in the determination of the Borrowing Base and the included portion
thereof has not already been reduced by such Lien or claim.
"PERCENTAGE SHARE" means, with respect to any LC Participant the
percentage obtained by dividing (A) the sum of the Matured DIP LC
Obligations which such LC Participant
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has funded pursuant to Section 2(c)(ii), plus the portion of the
Maximum Drawing Amount which such LC Participant might be obligated to
fund under Section 2(c)(ii) by (B) the aggregate amount of DIP LC
Obligations outstanding at such time. On the Closing Date, the
Percentage Share of each LC Participant shall be as set forth in the LC
Participant Schedule.
"PERMITTED CAPITAL EXPENDITURES" means cash Capital Expenditures made
to maintain, up to the level that exists on the Closing Date, the
operating capacity of the capital assets of Borrowers, taken as a
whole, as such assets exist on the Closing Date and not to exceed
$12,000,000 in the aggregate during the Commitment Period.
"PERMITTED INVENTORY LIENS" means any Lien and the amount of any
Liability secured thereby, on crude oil or NGLs inventory that would be
a Permitted Lien under Section 10(a)(ii) (so long as such Lien is
inchoate) or Section 10(a)(iv).
"PERMITTED INVESTMENTS" means (i) Cash Equivalents, (ii) Investments
described in the Disclosure Schedule, and (iii) Investments by EOTT MLP
or any of its Subsidiaries in any Wholly Owned Subsidiary of EOTT MLP
that is a Borrower or a Guarantor.
"PERMITTED LIEN" shall mean any of the following:
(i) Liens in favor of the Prepetition Agent and the Prepetition
Lenders securing the Prepetition Bank Debt;
(ii) Permitted Prior Liens;
(iii) pledges or deposits of cash or securities under worker's
compensation, unemployment insurance or other social security
legislation or deposits with insurers to cover self-retention
obligations under employee life or medical insurance programs;
(iv) carriers', warehousemen's, mechanics', materialmen's,
repairmen's, landlord's or other like Liens (including,
without limitation, Liens on property of any Debtor in the
possession of storage facilities, pipelines or barges) arising
in the ordinary course of business for amounts that are not
more than 60 days past due or the validity of which is being
contested in good faith and by appropriate proceedings, if
necessary, and for which adequate reserves are maintained on
the books of any Debtor in accordance with GAAP;
(v) Liens under or with respect to accounts with brokers or
counterparties with respect to the following commodity
accounts maintained by EOTT OLP with Refco, L.L.C.: Account
Nos. 1725 43979; 1725 65803; 1725 67320; 1725 67543; 1725
72336; 1725 72611; 1725 67544 and 67544M; and L610 54999 (for
transactions effected with or through United Energy, Inc.),
consisting of cash, commodities or futures contracts, options,
securities, instruments and other like assets;
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(vi) deposits of cash or securities to secure the performance of
bids, trade contracts (other than for borrowed money), leases,
statutory or regulatory obligations, surety and appeal bonds,
performance bonds and other obligations of a like nature
incurred in the ordinary course of business;
(vii) Liens in respect of existing Capital Leases but encumbering
only the property under lease;
(viii) statutory Liens related to the purchase of crude oil by a
Borrower;
(x) Liens permitted by the Security Documents and the Orders;
(xi) Liens for taxes, assessments or governmental charges or claims
that are not yet delinquent or that are being contested in
good faith and by appropriate proceedings, if necessary, and
for which adequate reserves are maintained on the books of any
Debtor in accordance with GAAP; and
(xii) easements, rights-of-way, restrictions, minor defects and
irregularities in title and other similar charges or
encumbrances not interfering in any material respect with the
business of any Debtor.
"PERMITTED PRIOR LIENS" means valid, perfected and otherwise
unavoidable Liens existing as of the Filing Date, senior to the
prepetition Liens in respect of the Prepetition Credit Agreement, and
Liens otherwise approved in writing by the Administrative Agents. The
term includes the priming Lien granted to the Collateral Agent pursuant
to the terms of this Credit Agreement and the Orders and securing the
Obligations.
"PERSON" means an individual, corporation, partnership, limited
liability company, association, joint stock company, trust or trustee
thereof, estate or executor thereof, unincorporated organization or
joint venture, Tribunal or any other legally recognizable entity.
"PREPETITION BANK DEBT" has the meaning set forth in the fourth
recital.
"PREPETITION CREDIT AGREEMENT" has the meaning set forth in the third
recital.
"PREPETITION LENDERS" has the meaning set forth in the third recital.
"PREPETITION LETTERS OF CREDIT" means each of the letters of credit
issued, extended or renewed by the Prepetition LC Issuer under the
Prepetition Credit Agreement.
"PREPETITION LOANS" means each of the loans made by the Prepetition
Lenders under the Prepetition Credit Agreement.
"PRESCRIBED FORMS" has the meaning set forth in Section 3(g)(iv).
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"PRIORITY CLAIMS" means any Liabilities that will give rise to claims
against the Debtors that are senior or equal in priority to the
Superpriority Claims in favor of the Lender Parties, the Term Lender
Agent and the Term Lenders.
"PRIORITY PROFESSIONAL EXPENSES" means allowed and unpaid fees, costs
and reasonable expenses of professionals retained in the Cases pursuant
to Sections 327 and 1103 of the Bankruptcy Code consisting of
attorneys, accountants, financial advisors, and consultants retained by
the Borrowers, the Guarantors, the Creditors' Committee or any
Bondholder's Committee; provided, however, that (i) Ineligible
Professional Expenses and the fees, costs and expenses of third-party
professionals employed by the members of the Creditors' Committee or
any Bondholder's Committee shall not be included, and (ii) the amount
of Priority Professional Expenses shall not exceed the applicable
Professional Expense Cap if in effect at the time of reference thereto.
"PROFESSIONAL EXPENSE CAP" If, at the time of reference thereto, the
Termination Declaration Date has not occurred, there is no Professional
Expense Cap. If, at the time of reference thereto, the Termination
Declaration Date has occurred, the Professional Expense Cap is the
aggregate sum of $2,000,000, whether the fees and expenses are allowed
and unpaid at the time of the Termination Declaration Date or are
incurred before or after the Termination Declaration Date. The term
includes any holdbacks required by the Bankruptcy Court. All payments
of Priority Professional Expenses made on and after the Termination
Declaration Date shall reduce the Professional Expense Cap dollar for
dollar.
"RATING AGENCY" means either S&P or Moody's.
"RECEIVABLES PURCHASE AGREEMENT" means that certain Amended and
Restated Receivables Purchase Agreement, dated as of the date hereof,
by and among SCTSC and EOTT OLP (as amended, amended and restated,
supplemented or otherwise modified from time to time).
"REGISTER" has the meaning set forth in Section 15(e).
"REGULATION D" means Regulation D of the Board of Governors of the
Federal Reserve System as from time to time in effect.
"REIMBURSABLE TAXES" has the meaning set forth in Section 3(g)(i).
"RELEASE" has the meaning given such term in 42 U.S.C. Section
9601(22).
"REORGANIZATION PLAN" means a plan or plans of reorganization in the
Cases.
"RISK MANAGEMENT POLICIES" means, with respect to any Borrower, such
risk management procedures and internal controls and such trading
policies with such Open Position limits, with such changes thereto in
effect at any time after the Closing Date, as are then currently
approved by the EOTT Energy board of directors.
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"S&P" means Standard & Poor's Ratings Group (a division of McGraw Hill,
Inc.) or its successor.
"SCTSC" means, Standard Chartered Trade Services Corporation, a
Delaware corporation, as purchaser under the SCTSC Purchase Agreements.
"SCTSC PURCHASE AGREEMENTS" means, collectively, the Crude Oil Purchase
Agreement and the Receivables Purchase Agreement.
"SECOND INTERIM ORDER" means a second interim DIP financing order of
the Bankruptcy Court in the Cases authorizing and approving this
Agreement and the other Credit Documents under Sections 364(c) and (d)
of the Bankruptcy Code and entered at the second interim hearing, in
form and substance satisfactory to the Administrative Agents and
attached hereto as Exhibit J.
"SECURITY" means any rights, properties or interests of any Lender
Party and the Collateral Agent under the Credit Documents, which
provide recourse or other benefits to any Lender Party or the
Collateral Agent in connection with the Obligations or the non-payment
or non-performance thereof, including any Collateral, guaranties of the
payment of any Obligation, bonds, surety agreements, keep-well
agreements, letters of credit, rights of subrogation, rights of offset
and other rights provided for thereunder.
"SECURITY DOCUMENTS" means the Intercreditor Agreement, the instruments
listed in the Security Schedule and all other security agreements,
deeds of trust, mortgages, chattel mortgages, pledges, guaranties,
financing statements, continuation statements, extension agreements,
Control Agreements and other agreements or instruments now, heretofore
or hereafter delivered by any Debtor to the Collateral Agent in
connection with this Agreement or any transaction contemplated hereby
to secure or guarantee the payment of any part of the Obligations or
the performance of any Debtor's other duties and obligations under the
Credit Documents.
"SECURITY SCHEDULE" means Schedule III hereto.
"STANDARD CHARTERED" has the meaning set forth in the preamble.
"SUBSIDIARY" means, with respect to any Person, any corporation,
association, partnership, limited liability company, joint venture or
other business or corporate entity, enterprise or organization which is
directly or indirectly (through one or more intermediaries) controlled
or owned more than 50% by such Person.
"SUPERPRIORITY CLAIM" means a claim against a Borrower or its estate in
its Case which is an administrative claim having priority over (i) any
and all allowed administrative expenses and (ii) unsecured claims now
existing or hereafter arising, including, without limitation,
administrative expenses of the kind specified in Section 503(b),
506(c), or 507(b) of the Bankruptcy Code.
"TAX CODE" means the Internal Revenue Code of 1986, as amended from
time to time, together with all rules and regulations promulgated with
respect thereto.
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"TEN-DAY WAITING PERIOD" means the period of time beginning on the date
that the aggregate amount of drawings on Letters of Credit during a
calendar month exceeds $15,000,000 and ending on the date which is the
earlier of (a) ten days from such date or (b) the date that the Term
Lender Agent, as directed by the Majority Term Lenders (as defined in
the Xxxxxx DIP Credit Agreement), gives notice to the Collateral Agent
that they do or do not elect to designate such drawings in excess of
$15,000,000 as a Triggering Event (as defined in the Intercreditor
Agreement).
"TERM LENDER AGENT" means Xxxxxx Brothers Inc., as agent for the Term
Lenders under the Xxxxxx DIP Credit Agreement.
"TERM LENDERS" means the lenders under the Xxxxxx DIP Credit Agreement.
"TERMINATION DECLARATION DATE" means the earliest to occur of (i) the
date on which the LC Agent declares all Obligations to be due and
payable on account of an Event of Default, (ii) the date on which the
LC Agent declares a termination, reduction or restriction of any
further commitment to extend credit to the Borrowers on account of an
Event of Default, and (iii) the Maturity Date.
"TERMINATION EVENT" means (i) the occurrence with respect to any ERISA
Plan of (A) a reportable event described in Sections 4043(c)(5) or (6)
of ERISA or (B) any other reportable event described in Section 4043(c)
of ERISA other than a reportable event not subject to the provision for
30-day notice to the Pension Benefit Guaranty Corporation pursuant to a
waiver by such corporation under Section 4043(a) of ERISA, (ii) the
withdrawal of any ERISA Affiliate from an ERISA Plan during a plan year
in which it was a "substantial employer" as defined in Section
4001(a)(2) of ERISA, (iii) the filing of a notice of intent to
terminate any ERISA Plan or the treatment of any ERISA Plan amendment
as a termination under Section 4041 of ERISA, (iv) the institution of
proceedings to terminate any ERISA Plan by the Pension Benefit Guaranty
Corporation under Section 4042 of ERISA or (v) any other event or
condition that might constitute grounds under Section 4042 of ERISA for
the termination of, or the appointment of a trustee to administer, any
ERISA Plan.
"TIER I ACCOUNT DEBTOR" means a Person (i) whose Debt Rating is either
at least Baa3 by Xxxxx'x or at least BBB- by S&P, (ii) whose commercial
paper is rated A-1 by S&P or P-1 by Xxxxx'x or (iii) which is Currently
Approved by the LC Agent as a Tier I Account Debtor.
"TIER I ELIGIBLE CRUDE/PRODUCT/LIQUID DELIVERIES" means each Eligible
Crude/Product/Liquid Delivery (i) to a Tier I Account Debtor; (ii)
fully and unconditionally guaranteed as to payment by a Person whose
Debt Rating is either at least Baa3 by Xxxxx'x or at least BBB- by S&P;
or (iii) fully covered by a letter of credit from an Acceptable Issuer,
in form Currently Approved by the LC Agent (it being understood that
any Account which has been sold to SCTSC pursuant to the Receivables
Purchase Agreement shall be included in "Tier I Eligible
Crude/Product/Liquid Deliveries") .
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"TIER I ELIGIBLE RECEIVABLES" means each Eligible Receivable (i) from a
Tier I Account Debtor; (ii) fully and unconditionally guaranteed as to
payment by a Person whose Debt Rating is either at least Baa3 by
Xxxxx'x or at least BBB- by S&P or whose commercial paper is rated A-1
by S&P or P-1 by Xxxxx'x; or (iii) fully covered by a letter of credit
from an Acceptable Issuer, in form Currently Approved by the LC Agent.
"TIER II ACCOUNT DEBTOR" means a Person Currently Approved by the LC
Agent as a Tier II Account Debtor.
"TIER II ELIGIBLE CRUDE/PRODUCT/LIQUID DELIVERIES" means each Eligible
Crude/Product/Liquid Delivery to a Tier II Account Debtor.
"TIER II ELIGIBLE RECEIVABLES" means each Eligible Receivable from a
Tier II Account Debtor.
"TRIBUNAL" means any government, any arbitration panel, any court or
any governmental department, commission, board, bureau, agency or
instrumentality of the United States of America or any state, province,
commonwealth, nation, territory, possession, county, parish, town,
township, village or municipality, whether now or hereafter constituted
or existing.
"UCC" means the Uniform Commercial Code as in effect in the State of
New York.
"U.C.P." means the Uniform Customs and Practice for Documentary Credits
(1993 revision), International Chamber of Commerce Publication No. 500,
or any subsequent revision thereof.
"UNDRAWN PRODUCT PURCHASE LETTERS OF CREDIT" means, on any day, the
aggregate amount of all underlying product purchase obligations
supported by one or more Letters of Credit. As used herein, "underlying
product purchase obligation" means all existing unpaid obligations of a
Borrower to the beneficiary of such Letter of Credit in respect of
crude oil, refined petroleum products or NGLs that such Borrower is
obligated to purchase or receive or has then nominated to purchase or
receive and such beneficiary is obligated to sell or deliver, in each
case pursuant to an enforceable purchase and sale or exchange
agreement. For the avoidance of doubt, any such crude oil, refined
petroleum products or NGLs are excluded from Eligible Inventory and
Eligible Crude/Product/Liquid Deliveries.
"UNHEDGED ELIGIBLE INVENTORY" means Eligible Inventory other than NYMEX
Hedged Eligible Inventory and Other Hedged Eligible Inventory (it being
understood that any such Eligible Inventory which has been sold to
SCTSC pursuant to the Crude Oil Purchase Agreement shall be included in
"Unhedged Eligible Inventory").
"WEEKLY COMPLIANCE CERTIFICATE" means a certificate in the form of
Exhibit I duly completed and certified by an authorized officer of EOTT
Energy.
"WHOLLY OWNED SUBSIDIARY" means any Subsidiary of a Person, all of the
issued and outstanding stock, limited liability company membership
interests or partnership interests
-28-
of which (including all rights or options to acquire such stock or
interests) are directly or indirectly (through one or more
Subsidiaries) owned by such Person, excluding any general partner
interests owned by EOTT GP in any such Subsidiary that is a
partnership, such general partner interests not to exceed two percent
(2%) of the aggregate ownership interests of any such partnership and
directors' qualifying shares if applicable.
2. THE LETTERS OF CREDIT
(a) General.
(i) From and after the entry of the Second Interim Order, all
reimbursement obligations in respect of the Prepetition Letters of Credit issued
pursuant to the Prepetition Credit Agreement shall constitute reimbursement
obligations hereunder and the Prepetition Letters of Credit shall be treated as
Letters of Credit issued hereunder.
(ii) Subject to the terms and conditions hereof, the Borrowers
may request LC Issuer to issue, amend or extend the expiration date of, one or
more Letters of Credit; provided, however, that:
(1) after taking any Letter of Credit into account,
the DIP Facility Usage does not at such time exceed the lesser
of (A) the DIP Maximum Commitment and (B) Borrowing Base,
minus the sum of the (x) aggregate outstanding amount of
undrawn and drawn and unreimbursed Prepetition Letters of
Credit and (y) the aggregate outstanding principal amount on
all Prepetition Loans;
(2) the expiration date of such Letter of Credit is
prior to the earlier of (A) 70 days after the date such Letter
of Credit is to be issued, or such longer period (not to
exceed 365 days) as may be approved by the Majority LC
Participants and (B) the Stated Maturity Date;
(3) the issuance of any Letter of Credit will be in
compliance with all applicable governmental restrictions,
policies and guidelines and will not subject LC Issuer to any
cost that is not reimbursable under Section 3;
(4) such Letter of Credit is (A) issued at the
Borrowers' application for the benefit of (i) their critical
crude oil suppliers and other vendors related to the purchase
or exchange by any Borrower of crude oil or NGLs or other
business purposes (ii) Enron Corp., in the amount and as
required pursuant to the terms of the Enron Settlement
Agreement, (iii) SCTSC or (iv) any other party as otherwise
agreed to by the LC Agent, and (B) is in a form and with terms
as is usual and customary for letters of credit issued by LC
Issuer and shall be acceptable to LC Issuer in its sole and
absolute discretion and Currently Approved by the LC Agent;
and
(5) all other conditions in this Agreement to the
issuance of such Letter of Credit have been satisfied.
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LC Issuer will honor any such request if the foregoing conditions (1)
through (5) (in the following Section (b) referred to as the "LC
CONDITIONS") have been met as of the date of issuance, amendment or
extension of such Letter of Credit.
(b) Requesting Letters of Credit. The Borrower Representative
must make written request for any Letter of Credit at least one
Business Day before the date on which any of the Borrowers desire for
LC Issuer to issue such Letter of Credit. By making any such written
request, unless otherwise expressly stated therein, the Borrowers shall
be deemed to have represented and warranted that the LC Conditions
described in Section (a) will be met as of the date of issuance of such
Letter of Credit. Each such written request for a Letter of Credit must
be made in writing in the form and substance of Exhibit A, the terms
and provisions of which are hereby incorporated herein by reference (or
in such other form as may mutually be agreed upon by LC Issuer and the
Borrower Representative). If all LC Conditions for a Letter of Credit
have been met as described in Section (a) on any Business Day before
11:00 a.m., New York, New York time, LC Issuer will issue such Letter
of Credit on the same Business Day at LC Issuer's Applicable Lending
Office. If the LC Conditions are met as described in Section (a) on any
Business Day on or after 11:00 a.m., New York, New York time, LC Issuer
will issue such Letter of Credit on the next succeeding Business Day at
LC Issuer's Applicable Lending Office. If any provisions of any Letter
of Credit Request conflict with any provisions of this Agreement, the
provisions of this Agreement shall govern and control.
(c) Reimbursement and Participations
(i) Each Matured DIP LC Obligation shall constitute a loan by
LC Issuer to Borrowers. Borrowers promise to pay to the Collateral
Agent, for the benefit of the LC Issuer, on demand but subject to a
deferral of such payment as required by Section 3.2(d) of the
Intercreditor Agreement, the full amount of each Matured DIP LC
Obligation, together with interest thereon (A) at the Alternate Base
Rate to and including the second Business Day after the Matured DIP LC
Obligation is incurred and (B) at the Default Rate on each day
thereafter. All such funds received by the Collateral Agent from the
Borrowers shall be applied in accordance with the Cash Waterfall.
(ii) LC Issuer irrevocably agrees to grant and hereby grants
to each LC Participant, and, to induce LC Issuer to issue Letters of
Credit hereunder, each LC Participant irrevocably agrees to accept and
purchase and hereby accepts and purchases from LC Issuer, on the terms
and conditions hereinafter stated and for such LC Participant's own
account and risk an undivided interest equal to such LC Participant's
Percentage Share of LC Issuer's obligations and rights under each
Letter of Credit issued hereunder and the amount of each Matured DIP LC
Obligation paid by LC Issuer thereunder. Each LC Participant
unconditionally and irrevocably agrees with LC Issuer that, if a
Matured DIP LC Obligation is paid under any Letter of Credit for which
LC Issuer is not reimbursed in full by Borrowers in accordance with the
terms of this Agreement and the related Letter of Credit Request
(including by the application of LC Collateral), such LC Participant
shall (in all circumstances and without set-off or counterclaim) pay to
LC Issuer on demand, in immediately available funds at LC Issuer's
address for notices hereunder, such LC Participant's Percentage Share
of such Matured
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DIP LC Obligation (or any portion thereof that has not been reimbursed
by Borrowers). Each LC Participant's obligation to pay LC Issuer
pursuant to the terms of this subsection is irrevocable and
unconditional. If any amount required to be paid by any LC Participant
to an LC Issuer pursuant to this subsection is paid by such LC
Participant to LC Issuer within three Business Days after the date such
payment is due, LC Issuer shall in addition to such amount be entitled
to recover from such LC Participant, on demand, interest thereon
calculated from such due date at the Federal Funds Rate. If any amount
required to be paid by any LC Participant to an LC Issuer pursuant to
this subsection is not paid by such LC Participant to LC Issuer within
three Business Days after the date such payment is due, LC Issuer shall
in addition to such amount be entitled to recover from such LC
Participant, on demand, interest thereon calculated from such due date
at the Alternate Base Rate.
(iii) Whenever an LC Issuer has in accordance with subsection
(ii) above received from any LC Participant payment of such LC
Participant's Percentage Share of any Matured DIP LC Obligation, if LC
Issuer thereafter receives any payment of such Matured DIP LC
Obligation, or any payment of interest thereon (whether directly from
the Borrowers or by application of LC Collateral or otherwise, and
excluding only interest for any period prior to LC Issuer's demand that
such LC Participant make such payment of its Percentage Share), LC
Issuer will distribute to such LC Participant its Percentage Share of
the amounts so received by LC Issuer; provided, however, that if any
such payment received by LC Issuer must thereafter be returned by LC
Issuer, such LC Participant shall return to LC Issuer the portion
thereof that LC Issuer has previously distributed to it.
(iv) A written advice setting forth in reasonable detail the
amounts owing under this Section, submitted by the LC Issuer to any
Borrower or any LC Participant from time to time, shall be conclusive,
absent manifest error, as to the amounts thereof.
(d) No Duty to Inquire
(i) LC Issuer is authorized and instructed to accept and pay
drafts and demands for payment under any Letter of Credit without requiring, and
without responsibility for, any determination as to the existence of any event
giving rise to such draft, either at the time of acceptance or payment or
thereafter. LC Issuer is under no duty to determine the proper identity of
anyone presenting such a draft or making such a demand (whether by tested telex
or otherwise) as the officer, representative or agent of any beneficiary under
any Letter of Credit, and payment by LC Issuer to any such beneficiary when
requested by any such purported officer, representative or agent is hereby
authorized and approved. Each Borrower releases each LC Participant from, and
agrees to hold each LC Participant harmless and indemnified against, any
liability or claim in connection with or arising out of the subject matter of
this Section, WHICH INDEMNITY SHALL APPLY WHETHER OR NOT ANY SUCH LIABILITY OR
CLAIM IS IN ANY WAY OR TO ANY EXTENT CAUSED, IN WHOLE OR IN PART, BY ANY
NEGLIGENT ACT OR OMISSION OF ANY KIND BY SUCH LENDER PARTY; provided, however,
only that no LC Participant shall be entitled to indemnification for that
portion, if any, of any liability or claim which is proximately caused by its
own individual gross negligence or willful misconduct, as determined in a final
judgment.
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(ii) If the maturity of any Letter of Credit is extended by
its terms or by Law or governmental action, if any extension of the
maturity or time for presentation of drafts or any other modification
of the terms of any Letter of Credit is made at the request of the
Borrower Representative, or if the amount of any Letter of Credit is
increased at the request of the Borrower Representative, this Agreement
shall be binding upon all Debtors with respect to such Letter of Credit
as so extended, increased or otherwise modified, with respect to drafts
and property covered thereby and, with respect to any action taken by
LC Issuer, LC Issuer's correspondents or any LC Participant in
accordance with such extension, increase or other modification.
(iii) If any Letter of Credit provides that it is
transferable, LC Issuer shall have no duty to determine the proper
identity of anyone appearing as transferee of such Letter of Credit,
nor shall LC Issuer be charged with responsibility of any nature or
character for the validity or correctness of any transfer or successive
transfers, and payment by LC Issuer to any purported transferee or
transferees as determined by LC Issuer is hereby authorized and
approved, and Borrowers release each LC Participant from and agrees to
hold each LC Participant harmless and indemnified against, any
liability or claim in connection with or arising out of the foregoing,
WHICH INDEMNITY SHALL APPLY WHETHER OR NOT ANY SUCH LIABILITY OR CLAIM
IS IN ANY WAY OR TO ANY EXTENT CAUSED, IN WHOLE OR IN PART, BY ANY
NEGLIGENT ACT OR OMISSION OF ANY KIND BY SUCH LENDER PARTY; provided,
however, only that no LC Participant shall be entitled to
indemnification for that portion, if any, of any liability or claim
which is proximately caused by its own individual gross negligence or
willful misconduct, as determined in a final judgment.
(e) LC Collateral.
(i) If, after the making of all mandatory prepayments required
under Section 2(h), the outstanding DIP LC Obligations to the LC Issuer
will exceed (a) the lesser of (1) the Borrowing Base and (2) the DIP
Maximum Commitment, Borrowers will immediately pay to the Collateral
Agent an amount equal to such excess attributable to the DIP LC
Obligations held by LC Issuer to be applied in accordance with the Cash
Waterfall. In accordance with the Intercreditor Agreement, the
Collateral Agent will hold such amount as collateral security for the
remaining DIP LC Obligations held by the LC Issuer (all such amounts
held as collateral security for such DIP LC Obligations being herein
collectively referred to as the "LC COLLATERAL") and the other
Obligations, and such collateral may be applied from time to time in
accordance with the Cash Waterfall to pay the Matured DIP LC
Obligations of the LC Issuer.
(ii) If the Obligations or any part thereof (a) become
immediately due and payable pursuant to Section 11 and (b) remain
outstanding on the Maturity Date (unless the DIP Facility is extended
on terms acceptable to the LC Agent), then, unless all LC Participants
otherwise specifically elect to the contrary (which election may
thereafter be retracted by such LC Participants at any time), all DIP
LC Obligations shall become immediately due and payable without regard
to whether or not actual drawings or payments on the Letters of Credit
have occurred, and Borrowers shall be obligated to pay to the
Collateral Agent immediately an amount equal to the aggregate DIP LC
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Obligations of LC Issuer that are then outstanding, plus an additional
amount acceptable to the LC Agent, to be held as LC Collateral.
(f) Conditions Precedent to Extension of Credit.
(i) Initial Extensions of Credit. No LC Participant or LC
Issuer has any obligation to make the initial Extension of Credit unless the
following conditions precedent have been satisfied:
(1) Restructuring Agreement. The restructuring agreement
by and among the Borrowers, the Prepetition Lenders,
SCTSC, the Bondholders and the Enron Parties (the
"RESTRUCTURING Agreement") has been executed by at
least 66% of the Bondholders and shall be in full
force and effect. No party to the Restructuring
Agreement has exercised any termination rights with
respect thereto.
(2) SCTSC Purchase Agreements. Each of the SCTSC Purchase
Agreements shall have been assumed by the Borrowers
and approved by the Bankruptcy Court pursuant to the
Second Interim Order.
(3) Enron Settlement Agreement. The Enron Settlement
Agreement, and Employee Transition Agreement and any
other documents executed in connection with the
foregoing, shall have been executed by the EOTT
Parties and the Enron Parties.
(4) Credit Documents. Each of the Credit Documents shall
have been duly executed and delivered by the
respective parties thereto, shall be in full force
and effect and shall be in form and substance
satisfactory to the LC Participants. Each LC
Participant shall have received a fully executed copy
of each such document.
(5) Funding Conditions. All the conditions precedent to
extension of credit under the Xxxxxx DIP Credit
Agreement shall concurrently be satisfied.
(6) Certified Copy of Charter Documents. Each of the LC
Participants shall have received from each of the
Borrowers and the Guarantors a copy, certified by a
duly authorized officer of such Person to be true and
complete as of the Closing Date, of each of (A) its
charter or other incorporation documents as in effect
on such date of certification and (B) its by-laws as
in effect on such date.
(7) Corporate Action. All corporate action necessary for
the valid, execution, delivery and performance by
each of the Borrowers of this Agreement and the other
Credit Documents to which it is or is to become a
party shall have been duly and effectively taken, and
evidence thereof satisfactory to the LC Participants
shall have been provided to each of the LC
Participants.
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(8) Incumbency Certificate. The LC Agent shall have
received from each of the Borrowers an incumbency
certificate, dated as of the Closing Date, signed by
a duly authorized officer of such Borrower, and
giving the name and bearing a specimen signature of
each individual who shall be authorized: (A) to sign,
in the name and on behalf of the each such Borrower,
each of the Credit Documents to which such Borrower
is or is to become a party, (B) to apply for Letters
of Credit, and (C) to give notices and to take other
action on its behalf under the Credit Documents.
(9) Certificates of Insurance. The Collateral Agent shall
have received (A) a certificate of insurance form an
independent insurance broker dated as of the Closing
Date, identifying insurers, types of insurance,
insurance limits, and policy terms, and otherwise
describing the insurance obtained in accordance with
the provisions hereof and the Security Documents and
(B) certified copies of all policies evidencing such
insurance (or certificates therefor signed by the
insurer or an agent authorized to bind the insurer).
(10) Opinions of Counsel. Each of the LC Participants and
the LC Agent shall have received a favorable opinion
addressed to the LC Participants and the LC Agent,
dated as of the Closing Date, in form and substance
satisfactory to the LC Participants and the Agent,
from counsel to the Borrowers.
(11) Payment of Fees. The Borrowers shall have paid to the
LC Agent, for the account of the LC Participants and
the LC Agent, as applicable, all accrued and unpaid
fees, costs and expenses incurred by the LC
Participants and the LC Agent to the extent invoiced.
(12) Validity of Liens. The Second Interim Order, upon
entry thereof, be effective to create in favor of the
Collateral Agent, a legal, valid, and enforceable
first priority (except for Permitted Liens entitled
to priority under applicable law) Lien upon the
Collateral. All filings, recordings, deliveries of
instruments and other actions necessary or desirable
in the opinion of the Collateral Agent to protect and
preserve such Liens shall have been duly effected.
The Collateral Agent shall have received evidence
thereof in form and substance satisfactory to the
Collateral Agent and the Administrative Agents.
(13) Cash Budget. The LC Participants shall have received
(A) the Cash Budget, (B) rolling sixteen-week weekly
projections and cash flow forecasts for the Borrowers
through February 1, 2003.
(14) First Day Orders. All cash management and other
"first day orders" submitted for entry on or about
the date of the commencement of the Cases shall be in
form and substance satisfactory to the LC Agent.
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(15) Xxxxxx DIP Credit Documents. The Xxxxxx DIP Credit
Documents, satisfactory to the LC Agent shall
concurrently be executed.
(16) Repayment of Prepetition Loans, Etc. All outstanding
Prepetition Loans shall concurrently be repaid in
full in cash from the proceeds of the Xxxxxx DIP
Credit Agreement, and all accrued and unpaid
interest, fees, costs and expenses that are then due
and payable under the Prepetition Credit Agreement
and the SCTSC Purchase Agreements (supported by, to
the extent required by the Borrowers, invoices and
proper supporting documentation) shall concurrently
be paid in full in cash.
(ii) Extensions of Credit. In addition to the foregoing, no LC
Participant or LC Issuer has any obligation to make any Extension of Credit
(including the initial Extension of Credit on the Closing Date) unless the
following conditions precedent have been satisfied:
(1) Second Interim Order. The Bankruptcy Court shall have
entered the Second Interim Order and such Second
Interim Order shall be in full force and effect and
shall not have been amended, modified, stayed or
reversed. If the Second Interim Order is the subject
of a pending appeal in any respect, such Second
Interim Order, the issuance, extension or renewal of
any Letters of Credit, or the performance by any of
the Borrowers of any of the Obligations shall not be
the subject of a presently effective stay pending
appeal. The Borrowers, the LC Agent, the LC
Participants, the Prepetition Agent and the
Prepetition Lenders shall be entitled to rely in good
faith upon the Second Interim Order notwithstanding
objection thereto or appeal therefrom by any
interested party. The Borrowers, the LC Agent, the LC
Participants, the Prepetition Agent and the
Prepetition Lenders shall be permitted and required
to perform their respective obligations in compliance
with this Agreement, notwithstanding any such
obligation or appeal unless the Second Interim Order
has been stayed by a court of competent jurisdiction.
(2) Representations True; No Event of Default. Each of
the representations and warranties of any of the
Borrowers contained in this Agreement, the other
Credit Documents or in any document or instrument
delivered pursuant to or in connection with this
Agreement shall be true as of which they were made
and shall also be true at and as of the time of the
making of such Loan or issuance of such Letter of
Credit, with the same effect as if made at and as of
that time (except to the extent changes resulting
from transactions contemplated or permitted by this
Agreement and the other Credit Documents and the to
the extent that such representations and warranties
relate expressly to an earlier date), no Default or
Event of Default shall have occurred and be
continuing or would result from the making of such
Extension of Credit, and no Ten-Day Waiting Period
shall be continuing.
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(3) No Material Adverse Change. No Material Adverse
Change shall have occurred.
(4) No Legal Impediment. No change shall have occurred in
any Law or regulations thereunder or interpretations
thereof that in the reasonable opinion of any LC
Participant would make it illegal for such LC
Participant to participate in the issuance, extension
or renewal of such Letter of Credit or in the
reasonable opinion of the LC Issuer would make it
illegal for such LC Issuer to issue, extend of renew
such Letter of Credit.
(5) Governmental Regulation. Each LC Participant shall
have received such statements in substance and form
reasonably satisfactory to such LC Participant as
such LC Participant shall require for the purpose of
compliance with any applicable regulations of the
Comptroller of the Currency or the Board of Governors
of the Federal Reserve System.
(6) Proceedings and Documents. All proceedings in
connection with the transactions contemplated by this
Agreement, the other Credit Documents and all other
documents incident thereto shall be reasonably
satisfactory in substance and in form to the LC
Participants and to the LC Agent and the LC Agent's
Special Counsel, and the LC Participants, the LC
Agent and such counsel shall have received all
information and such counterpart originals or
certified or other copies of such documents as the LC
Agent shall reasonably request.
(7) Payment of Fees. The Borrowers shall have paid to the
LC Agent all fees, expenses and other amounts due and
owing on the date of the issuance, extension or
renewal of any Letter of Credit.
(8) No Challenge. No proceeding shall have been brought
by the Debtors to challenge (a) any of the Liens
granted pursuant to the Intercreditor Agreement or
the Orders or (b) the lien priorities set forth in
the Intercreditor Agreement.
(g) Use of Proceeds
(i) Borrowers shall use all Letters of Credit solely for the
purposes specified in Section 2(a)(ii)(4).
(ii) In no event shall any Letter of Credit be used directly
or indirectly by any Person for personal, family, household or agricultural
purposes, (A) for the purpose, whether immediate, incidental or ultimate, of
purchasing, acquiring or carrying any "margin stock" (as such term is defined in
Regulation U promulgated by the Board of Governors of the Federal Reserve
System) or (B) to extend credit to others directly or indirectly for the purpose
of purchasing or carrying any such margin stock. The Borrowers represent and
warrant that no Borrower is engaged principally in, or has as one of any
Borrower's important activities, the business of extending credit to others for
the purpose of purchasing or carrying such margin stock.
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(h) Mandatory Prepayments
(i) The Borrowers shall ensure that at no time will the DIP
Facility Usage exceed the Borrowing Base as calculated on any day
during the Commitment Period, which amount as so calculated may differ
from the amount of the Borrowing Base reflected in the most recently
delivered Borrowing Base Report. If at any time the DIP Facility Usage
exceeds the Borrowing Base (whether due to a reduction in the Borrowing
Base in accordance with this Agreement, or otherwise), or the DIP
Maximum Commitment, the Borrowers shall pay to the Collateral Agent, an
amount at least equal to such excess to be applied in accordance with
the Cash Waterfall.
(ii) If at any time prior to the Termination Declaration Date
the Borrowers shall receive or be entitled to receive any proceeds with
respect to any sale or issuance by the Borrowers of (a) any
Indebtedness not permitted by Section 10(a) or (b) any additional
equity, the Borrowers shall pay to the Collateral Agent, an amount
equal to such proceeds to be applied in accordance with the Cash
Waterfall.
(iii) If at any time prior to the Termination Declaration Date
the Borrowers shall receive or be entitled to receive proceeds of any
Designated Assets, the Borrowers shall pay to the Collateral Agent, an
amount equal to such proceeds, to be applied by the Collateral Agent in
accordance with the Cash Waterfall.
(iv) Any amounts prepaid pursuant to this Section shall be in
addition to, and not in lieu of, all payments otherwise required to be
paid under the Credit Documents at the time of such prepayment.
(i) Application of Payments made to LC Agent. Subject to the
provisions of the Intercreditor Agreement, funds received by the LC Agent in
accordance with the Cash Waterfall shall be applied as follows:
(1) first, to pay expenses incurred by the LC Agent and
the Prepetition Agent;
(2) second, to pay fees and other amounts (other than
principal) then due and payable under the DIP
Facility;
(3) third, to cash collateralize any Letters of Credit;
and
(4) fourth, unless an Event of Default under this
Agreement has occurred and is then continuing, to pay
obligations under the Prepetition Credit Agreement,
if any.
If any LC Participant owes payments to LC Issuer for the purchase of a
participation under Section 2(c) or to the LC Agent hereunder, any
amounts otherwise distributable under this Section to such LC
Participant shall be deemed to belong to LC Issuer or the LC Agent,
respectively, to the extent of such unpaid payments, and the LC Agent
shall apply such amounts to make such unpaid payments rather than
distribute such amounts to such LC Participant.
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(j) Interest Rates and Fees; Voluntary Reduction of Maximum
Facility Amount
(i) Upon the occurrence and during the continuance of a
Default or Event of Default, all Obligations shall bear interest on
each day outstanding at the Default Rate.
(ii) In consideration of each LC Participant's commitment to
participate in the LC Issuer's obligations and rights under each Letter
of Credit issued hereunder and the amount of each Matured DIP LC
Obligation paid by LC Issuer thereunder, Borrowers will pay to the LC
Agent for the account of each of LC Participant a commitment fee
determined on a daily basis equal to the Commitment Fee Rate in effect
on such day multiplied by the unused portion of such LC Participant's
Percentage Share of the unused portion of the DIP Maximum Commitment on
each day during the Commitment Period, determined for each such day by
deducting from the amount of the DIP Maximum Commitment at the end of
such day the DIP Facility Usage. This commitment fee shall be due and
payable in arrears on the Monthly Payment Date and at the end of the
Commitment Period.
(iii) In consideration of LC Issuer's issuance of any Letter
of Credit, the Borrowers agree to pay to the LC Agent, for the account
of all LC Participants under the DIP Facility in accordance with their
respective Percentage Shares, the Letter of Credit Fee, payable monthly
in arrears on the next Monthly Payment Date or portion thereof, that
any Letter of Credit is outstanding. If the LC Agent, in contravention
of the terms of this Agreement, receives any amount in excess of the
Letter of Credit Fee required to be paid by the Borrowers, the LC Agent
shall promptly deposit such excess amount into the Collection Account
(as defined in the Intercreditor Agreement). If, however, the LC Agent
receives an amount less than the Letter of Credit Fee required to be
paid by the Borrowers (the "DEFICIENCY"), the Borrowers shall promptly
pay the Deficiency to the LC Agent for the account of all LC
Participants in accordance with their respective Percentage Shares.
(iv) In consideration of LC Issuer's issuance of any Letter of
Credit, the Borrowers will pay to LC Issuer for its account, (A) upon
issuance, a letter of credit fronting fee equal to the greater of (1)
an amount equal to 0.25% per annum times the face amount of such Letter
of Credit and (2) $250, and (B) a minimum administrative issuance fee
and such other fees and charges customarily charged by LC Issuer in
respect of any issuance, amendment or negotiation of any Letter of
Credit in accordance with LC Issuer's published schedule of such
charges effective as of the date of such amendment or negotiation.
(v) In addition to all other amounts due to the LC Agent under
the Credit Documents, Borrowers will pay to the LC Agent, for its own
account, an arrangement fee, payable monthly in arrears on the first
day of each month with respect to the immediately preceding month in an
amount equal to (1) one percent (1%) per annum multiplied by (2) the
Average Daily Maximum Facility Amount for each month. The first
installment of such fee shall be payable on November 30, 2002. For
purposes of this Section 2(i), the "AVERAGE DAILY MAXIMUM FACILITY
AMOUNT" for any month shall
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equal the quotient of (A) the sum of the Maximum Facility Amount as it
exists at 5:00 p.m. New York time, for each day in the month divided by
(B) the total number of days in such month.
3. PAYMENTS TO LC PARTICIPANTS.
(a) General Procedures. The Debtors will make each payment
that they owe under the Credit Documents (other than fees payable to the Lender
Parties on the Closing Date) to the Collateral Agent for the account of the
Lender Party to whom such payment is owed in lawful money of the United States
of America, without set-off, deduction or counterclaim and in immediately
available funds. Each such payment must be received by the Collateral Agent not
later than noon, New York, New York time, on the date such payment becomes due
and payable. Any payment received by the Collateral Agent after such time will
be deemed to have been made on the next following Business Day. Should any such
payment become due and payable on a day other than a Business Day, the maturity
of such payment shall be extended to the next succeeding Business Day, and, in
the case of a payment of principal or past due interest, interest shall accrue
and be payable thereon for the period of such extension in the Credit Document
under which such payment is due. Each payment under a Credit Document shall be
due and payable at the place provided therein. When the Collateral Agent
collects or receives money on account of the Obligations, the Collateral Agent
shall distribute all money so collected or received to each Lender Party in
accordance with the Cash Waterfall.
(b) Payment Obligations Absolute. Notwithstanding any payment
by the Debtors to the Collateral Agent pursuant to Section 3(a), nothing
contained in this Agreement is intended to or shall (a) impair, as among the
Debtors and the Lender Parties, the obligation of the Debtors, which is absolute
and unconditional, to pay to the Lender Parties any Obligations payable by the
Debtors under or this Agreement or any other Credit Document as and when the
same shall become due and payable in accordance with their respective terms, or
(b) prevent the Lender Parties from exercising all remedies otherwise permitted
by applicable law upon default under this Agreement or any other Credit
Document, subject to the Intercreditor Agreement and the Orders.
(c) Capital Reimbursement. If either (i) the introduction or
implementation of or the compliance with or any change in or in the
interpretation of any Law or (ii) the introduction or implementation of or the
compliance with any request, directive or guideline from any central bank or
other governmental authority (whether or not having the force of Law) affects or
would affect the amount of capital required or expected to be maintained by any
Lender Party or any Person controlling any Lender Party, then, within five
Business Days after demand by such Lender Party, Borrowers will pay to such
Lender Party, from time to time as specified by such Lender Party, such
additional amount or amounts as such Lender Party shall determine to be
appropriate to compensate such Lender Party or any Person controlling such
Lender Party in light of such circumstances, to the extent that such Lender
Party reasonably determines that the amount of any such capital would be
increased or the rate of return on any such capital would be reduced by, or in
whole or in part based on, the existence of the face amount of such Lender
Party's Letters of Credit or participations in Letters of Credit.
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(d) Increased Cost of Letters of Credit. If any applicable Law
(whether now in effect or hereinafter enacted or promulgated, including
Regulation D) or any interpretation or administration thereof by any
governmental authority charged with the interpretation or administration thereof
(whether or not having the force of Law):
(i) shall change the basis of taxation of payments to any
Lender Party of any principal, interest or other amounts attributable
to any Letter of Credit or otherwise due under this Agreement in
respect of any Letter of Credit (other than taxes imposed on, or
measured by, the overall net income of such Lender Party or any
Applicable Lending Office of such Lender Party by any jurisdiction in
which such Lender Party or any such Applicable Lending Office is
located); or
(ii) shall change, impose, modify, apply or deem applicable
any reserve, special deposit or similar requirements in respect of any
Letter of Credit or against assets of, deposits with or for the account
of, or credit extended by, such Lender Party; or
(iii) shall impose on any Lender Party any other condition
affecting any Letter of Credit, the result of which is to increase the
cost to any Lender Party of issuing any Letter of Credit or to reduce
the amount of any sum receivable by any Lender Party in respect of any
Letter of Credit by an amount deemed by any Lender Party to be
material,
then such Lender Party shall promptly notify the LC Agent and the
Borrower Representative in writing of the happening of such event and
of the amount required to compensate such Lender Party for such event
(on an after-tax basis, taking into account any taxes on such
compensation), whereupon Borrower shall, within five Business Days
after demand therefor by such Lender Party, pay such amount to the LC
Agent for the account of such Lender Party.
(e) Notice; Change of Applicable Lending Office. A Lender
Party shall notify the Borrower Representative of any event occurring after the
date of this Agreement that will entitle such Lender Party to compensation under
Sections 3(a), (c), or (d) as promptly as practicable, but in any event within
90 days after such Lender Party obtains actual knowledge thereof; provided,
however, that (i) if such Lender Party fails to give such notice within 90 days
after it obtains actual knowledge of such an event, such Lender Party shall,
with respect to compensation payable pursuant to Sections 3(a), (c), or (d) in
respect of any costs resulting from such event, only be entitled to payment
under Sections 3(a), (c), or (d) for costs incurred from and after the date 90
days prior to the date that such Lender Party does give such notice and (ii)
such Lender Party will designate a different Applicable Lending Office if such
designation will avoid the need for, or reduce the amount of, such compensation
and will not, in the sole opinion of such Lender Party, be disadvantageous to
such Lender Party, except that such Lender Party shall have no obligation to
designate an Applicable Lending Office located in the United States of America.
Each Lender Party will furnish to the Borrower Representative a certificate
setting forth the basis and amount of each request by such Lender Party for
compensation under Sections 3(a), (c), or (e).
(f) Availability. If any change in applicable Laws, or in the
interpretation or administration thereof, of or in any jurisdiction whatsoever,
domestic or foreign, shall make it
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unlawful or impracticable for such Lender Party to issue or participate in
Letters of Credit, then, upon notice by such Lender Party to the Borrower
Representative and such Lender Party, Borrowers' right to obtain Letters of
Credit shall be suspended to the extent and for the duration of such illegality,
impracticability or restriction. Borrower agrees to indemnify each Lender Party
and hold it harmless against all costs, expenses, claims, penalties, liabilities
and damages that may result from any such change in Law, interpretation or
administration. Such indemnification shall be on an after-tax basis, taking into
account any taxes imposed on the amounts paid as indemnity.
(g) Reimbursable Taxes.
Borrowers covenant and agree that:
(i) Borrowers will indemnify each Lender Party against and
reimburse each Lender Party for all present and future stamp and other
taxes, levies, costs and charges whatsoever imposed, assessed, levied
or collected on or in respect of this Agreement or any Letters of
Credit (whether or not legally or correctly imposed, assessed, levied
or collected), excluding, however, any taxes imposed on or measured by
the overall net income of such Lender Party or any Applicable Lending
Office of such Lender Party by any jurisdiction in which such Lender
Party or any such Applicable Lending Office is located (all such
non-excluded taxes, levies, costs and charges being collectively called
"REIMBURSABLE TAXES" in this Section). Such indemnification shall be on
an after-tax basis, taking into account any taxes imposed on the
amounts paid as indemnity.
(ii) All payments on account of the principal of, and interest
on, each Lender Party's Letters of Credit, and all other amounts
payable by Borrowers to any Lender Party hereunder, shall be made in
full without set-off or counterclaim and shall be made free and clear
of and without deductions or withholdings of any nature by reason of
any Reimbursable Taxes, all of which will be for the account of
Borrowers. In the event of Borrowers being compelled by Law to make any
such deduction or withholding from any payment to any Lender Party,
Borrowers shall pay on the due date of such payment, by way of
additional interest, such additional amounts as are needed to cause the
amount receivable by such Lender Party after such deduction or
withholding to equal the amount which would have been receivable in the
absence of such deduction or withholding. If Borrowers shall make any
deduction or withholding as aforesaid, Borrowers shall within 60 days
thereafter forward to such Lender Party an official receipt or other
official document evidencing payment of such deduction or withholding.
(iii) Notwithstanding the foregoing provisions of this
Section, Borrowers shall be entitled, to the extent it is required to
do so by Law, to deduct or withhold (and not to make any
indemnification or reimbursement for) income or other similar taxes
imposed by the United States of America (other than any portion thereof
attributable to a change in federal income tax Laws effected after the
date hereof) from interest, fees or other amounts payable hereunder for
the account of any Lender Party, other than Lender Party (A) who is a
U.S. person for Federal income tax purposes or (B) who has the
Prescribed Forms on file with the LC Agent (with copies provided to the
Borrower Representative) for the applicable year to the extent
deduction or withholding of such taxes is not
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required as a result of the filing of such Prescribed Forms; provided,
however, that if Borrower shall so deduct or withhold any such taxes,
it shall provide a statement to the LC Agent and such Lender Party,
setting forth the amount of such taxes so deducted or withheld, the
applicable rate and any other information or documentation which such
Lender Party may reasonably request for assisting such Lender Party to
obtain any allowable credits or deductions for the taxes so deducted or
withheld in the jurisdiction or jurisdictions in which such Lender
Party is subject to tax. As used in this Section, "PRESCRIBED FORMS"
means such duly executed forms or statements, and in such number of
copies, which may, from time to time, be prescribed by Law and which,
pursuant to applicable provisions of (i) an income tax treaty between
the United States and the country of residence of such Lender Party
providing the forms or statements, (ii) the Tax Code or (iii) any
applicable rules or regulations thereunder, permit Borrowers to make
payments hereunder for the account of such Lender Party free of such
deduction or withholding of income or similar taxes.
4. INTENTIONALLY OMITTED.
5. INTENTIONALLY OMITTED.
6. INTENTIONALLY OMITTED.
7. OTHER ACTIONS OF DEBTORS.
(a) Each Debtor shall at any time and from time to time
take such steps as the LC Agent may request for the
Collateral Agent to (i) obtain an acknowledgment, in
form and substance satisfactory to the Collateral
Agent, of any bailee having possession of any of the
Collateral that the bailee holds such Collateral for
the Collateral Agent, (ii) obtain "control" of any
investment property, deposit accounts,
letter-of-credit rights or electronic chattel paper
(as such terms are defined in Article 9 of the UCC
with corresponding provisions in Sections 9-104,
9-105, 9-106 and 9-107, relating to what constitutes
"control" for such items of Collateral), with any
agreements establishing control to be in form and
substance satisfactory to the Collateral Agent, and
(iii) otherwise insure the continued perfection and
priority of the Collateral Agent's security interest
in any of the Collateral and of the preservation of
its rights therein.
(b) Each Debtor shall at any time and from time to time
take such steps as the Collateral Agent may request
with respect to the creation and perfection of valid,
enforceable, first priority mortgage Liens on and/or
security interests in any real property or fixtures
included in the Collateral owned or leased by such
Debtor, including, without limitation, (i) the
execution, delivery, acknowledgement, filing and
recordation of such mortgages, deeds of trust,
fixture filings and similar instruments as the
Collateral Agent deems necessary or desirable to the
granting of a valid, enforceable first priority
mortgage Lien on any such property or fixtures and
(ii) the delivery of such mortgagee's title
insurance, title opinions and other legal
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opinions as the Collateral Agent deems necessary or
desirable to better confirm the granting to the
Collateral Agent by the applicable Debtor of such
Lien on such Debtor's real property or fixtures
included in the Collateral owned or leased by such
Debtor.
(c) Nothing contained in this Agreement shall be
construed to narrow the scope of the Collateral
Agent's security interest in any of the Collateral or
the perfection or priority thereof or to impair or
otherwise limit any of the rights, powers, privileges
or remedies of the Collateral Agent hereunder.
8. REPRESENTATIONS AND WARRANTIES. Each Debtor hereby makes the following
representations and warranties, each of which is a continuing representation and
warranty, the continuing truth and accuracy of each of such representations and
warranties being a continuing condition of financing of Borrowers by the LC
Participants:
(a) Such Debtor is duly organized, formed or incorporated
and validly existing under the Laws of its
jurisdiction of organization or incorporation, having
all powers required to carry on its business. Such
Debtor has the partnership, corporate or limited
liability company, as applicable, power to execute,
deliver and perform the terms and provisions of this
Agreement and the other Credit Documents. Such Debtor
has taken or caused to be taken all necessary
partnership, corporate or limited liability company,
as applicable, action to authorize the execution,
delivery and performance of this Agreement and the
other Credit Documents. Each Borrower is duly
authorized to borrow funds hereunder.
(b) Except as set forth in Section 8(b) of the Disclosure
Schedule, upon entry of the Second Interim Order,
this Agreement and the other Credit Documents
constitute and will constitute legal, valid and
binding obligations of such Debtor, enforceable in
accordance with their respective terms.
(c) Such Debtor is in material compliance with the
requirements of all applicable laws, rules,
regulations and orders of any governmental authority
or Tribunal relating to its business as presently
conducted or contemplated, including, without
limitation, all permits, licensing and approval
requirements; ERISA; the Tax Code; all limitations,
restrictions, conditions, standards, prohibitions,
requirements, obligations, schedules and timetables
contained in any Environmental Law, or in any
regulation, code, plan, order, decree, judgment,
injunction, notice or demand letter issued, entered,
promulgated or approved thereunder, except as set
forth in Section 8(c) of the Disclosure Schedule and
to the extent that all such instances of
noncompliance (if any) in the aggregate could not
cause a Material Adverse Change.
(d) No action of, or filing with, any governmental or
public body or authority (other than as set forth in
Section 8(d) of the Disclosure Schedule) is
-43-
required in connection with the execution, delivery
and performance of this Agreement, the other Credit
Documents or any of the instruments or documents to
be delivered pursuant hereto or thereto.
(e) The execution and delivery by such Debtor of the
Credit Documents to which it is a party, the
performance by such Debtor of its obligations under
such Credit Documents and the consummation of the
transactions contemplated by the various Credit
Documents do not and will not (i) except as set forth
in Section 8(e) of the Disclosure Schedule, conflict
with any provision of (1) any law, or (2) the
organizational or other charter documents of such
Debtor, or (ii) result in or require the creation of
any Lien upon any assets or properties of such Debtor
or any of its Affiliates, except as expressly
contemplated in the Credit Documents. Except as
expressly contemplated in the Credit Documents, no
permit, consent, approval, authorization or order of
and no notice to or filing, registration or
qualification with, any Tribunal or third party is
required in connection with the execution, delivery
or performance by such Debtor of any Credit Document
or to consummate any transactions contemplated by the
Credit Documents, other than consents, approvals,
authorizations or orders that have been obtained or
notices given or filings made prior to the date
hereof.
(f) Such Debtor's place of incorporation, organization or
formation, as applicable, is the State of Delaware,
and its principal place of business and chief
executive office, where its records are maintained
are disclosed on the signature page hereto. Except as
set forth in Section 8(f) of the Disclosure Schedule,
such Debtor does not use any trade styles, trade
names or fictitious partnership names.
(g) Except as set forth in Section 8(g) of the Disclosure
Schedule, upon entry of the Second Interim Order, all
filings, assignments, pledges and deposits of
documents or instruments will have been made and all
other actions will have been taken that are necessary
or advisable, under applicable law, to establish and
perfect the Collateral Agent's security interest in
the Collateral. The Collateral and the Collateral
Agent's rights with respect to the Collateral are not
subject to any set-off, claims, withholdings or other
defenses. The Debtors are the owners of the
Collateral, free from any lien, security interest,
encumbrance or any other claim of demand except for
Permitted Liens and as otherwise set forth in the
Intercreditor Agreement.
(h) All Debtors are subject as debtor to a Case in the
Bankruptcy Court.
(i) After giving effect to the transactions contemplated
by this Agreement and the other Credit Documents,
there does not exist at the date hereof any condition
or event which constitutes a Default hereunder or
which after notice or lapse of time, or both, would
constitute such a Default hereunder.
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(j) Subject to the matters described in Section 8(j) of
the Disclosure Schedule: (a) no Termination Event has
occurred with respect to any ERISA Plan and all ERISA
Affiliates are in compliance with ERISA in all
material respects excluding any such failure that
could not reasonably be expected to result in a
Material Adverse Change, (b) no ERISA Affiliate is
required to contribute to, or has any other absolute
or contingent Liability in respect of, any
"multiemployer plan" as defined in Section 4001 of
ERISA which could reasonably be expected to result in
a Material Adverse Change, and (c) no "accumulated
funding deficiency" (as defined in Section 412(a) of
the Tax Code) exists with respect to any ERISA Plan,
whether or not waived by the Secretary of the
Treasury or his delegate and the current value of
each ERISA Plan's benefits does not exceed the
current value of such ERISA Plan's assets available
for the payment of such benefits except to the extent
such excess could not reasonably be expected to
result in a Material Adverse Change.
(k) Without limiting the provisions of Section 8(c):
(i) No notice, notification, demand, request for
information, citation, summons or order has been
issued, no complaint has been filed, no penalty has
been assessed and no investigation or review is
pending or threatened by any Tribunal or any other
Person with respect to any of the following except
(1) as set forth in the Section 8(k)(i) of the
Disclosure Schedule or (2) to the extent the same
could not reasonably be expected to result in a
Material Adverse Change: (A) any alleged generation,
treatment, storage, recycling, transportation,
disposal or Release of any Hazardous Materials,
either by any Debtor or on any property owned by such
Debtor, (B) any remedial action that might be needed
to respond to any such alleged generation, treatment,
storage, recycling, transportation, disposal or
Release, or (C) any alleged failure by any Debtor to
have any permit, license or authorization required in
connection with the conduct of its business or with
respect to any such generation, treatment, storage,
recycling, transportation, disposal or Release.
(ii) Except as set forth in Section 8(k)(ii) of the
Disclosure Schedule, no Debtor otherwise has any
known material contingent Liability in connection
with any alleged generation, treatment, storage,
recycling, transportation, disposal or Release of any
Hazardous Materials that has caused, or could
reasonably be expected to cause, a Material Adverse
Change.
(iii) Except as set forth in Section 8(k)(iii) of the
Disclosure Schedule, no Debtor has handled any
Hazardous Materials, other than as a generator, on
any properties now or previously owned or leased by
any Debtor to an extent that such handling has
caused, or could cause, a Material Adverse Change.
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(iv) Except as set forth in Section 8(k)(iv) of the
Disclosure Schedule or to the extent that the
following in the aggregate has not caused and could
not cause a Material Adverse Change:
(1) no PCBs are or have been present at
any properties now or previously
owned or leased by any Debtor;
(2) no asbestos is or has been present
at any properties now or previously
owned or leased by any Debtor;
(3) there are no underground storage
tanks for Hazardous Materials,
active or abandoned, at any
properties now or previously owned
or leased by any Debtor; and
(4) no Hazardous Materials have been
Released at, on or under any
properties now or previously owned
or leased by any Debtor.
(v) Except as set forth in Section 8(k)(v) of the
Disclosure Schedule or to the extent that the
following in the aggregate has not caused and could
not cause a Material Adverse Change, no Debtor has
transported or arranged for the transportation of any
Hazardous Material to any location listed on the
National Priorities List under CERCLA, any location
listed for possible inclusion on the National
Priorities List by the Environmental Protection
Agency in CERCLIS, nor, except as set forth in
Section 8(k)(v) of the Disclosure Schedule or to the
extent that such has not caused and could not cause a
Material Adverse Change, any location listed on any
similar state list or which is the subject of
federal, state or local enforcement actions or other
investigations that may lead to claims against such
Debtor for clean-up costs, remedial work, damages to
natural resources or for personal injury claims,
including, but not limited to, claims under CERCLA.
(vi) Except as set forth in Section 8(k)(vi) of the
Disclosure Schedule or to the extent that such has
not caused and could not cause a Material Adverse
Change, no property now or previously owned or leased
by any Debtor is listed or proposed for listing on
the National Priorities List promulgated pursuant to
CERCLA, in CERCLIS, nor on any similar state list of
sites requiring investigation or clean-up.
(vii) Except as set forth in Section 8(k)(vii) of the
Disclosure Schedule or to the extent that such has
not caused and could not cause a Material Adverse
Change, there are no Liens arising under or pursuant
to any Environmental Laws on any of the real
properties or properties owned or leased by any
Debtor, and no governmental actions of which any
Debtor is aware have been taken or are in process
that could subject any of such properties to such
Liens; nor would any Debtor be required to place any
notice or
-46-
restriction relating to the presence of Hazardous
Materials at any properties owned by it or in any
deed to such properties.
(viii) All environmental investigations, studies, audits,
tests, reviews or other analyses for ground water or
soil contamination relating to the Release of
Hazardous Materials conducted by or which are in the
possession of such Debtor in relation to any
properties or facility now or previously owned or
leased by such Debtor are available for inspection by
the LC Agent or the Collateral Agent at the Borrower
Representative's offices or facilities.
(l) No Debtor is subject to regulation under the Public
Utility Holding Company Act of 1935, the Investment
Company Act of 1940 (as any of the preceding acts
have been amended) or any other law which regulates
the incurring by such Debtor of indebtedness,
including laws relating to common contract carriers
or the sale of electricity, gas, steam, water or
other public utility services. Such Debtor is not
subject to regulation under the Federal Power Act
that would violate, result in a default under or
prohibit the effectiveness or the performance of any
of the provisions of the Credit Documents.
(m) None of the following securities is evidenced by a
certificate: (i) the limited partner interest of EOTT
MLP in EOTT OLP; (ii) the membership interest of EOTT
MLP in EOTT GP; (iii) the limited partner interest of
EOTT OLP in any of EOTT Canada, EOTT Liquids or EOTT
Pipeline; or (iv) the general partner interest of
EOTT GP in any of EOTT OLP, EOTT Canada, EOTT Liquids
or EOTT Pipelines.
(n) No Debtor is in default in the performance of any of
the covenants and agreements contained in any Credit
Document. No event has occurred and is continuing
that constitutes a Default.
(o) EOTT MLP has heretofore delivered to the LC Agent
true, correct and complete copies of the Initial
Financial Statements. The Initial Financial
Statements fairly present (subject to normal and
recurring adjustments in conformity with GAAP) EOTT
MLP's Consolidated financial position at the date
thereof, the Consolidated results of EOTT MLP's
operations for the periods thereof and Consolidated
cash flows for the periods thereof. The Initial
Financial Statements were prepared in accordance with
GAAP.
(p) Except as shown in the Initial Financial Statements
or disclosed in Section 8(p) of the Disclosure
Schedule (with respect to Liabilities described below
that will give rise to Priority Claims) or the
Bankruptcy Schedule (with respect to all other
Liabilities described below), as of the Closing Date,
no Debtor has any outstanding Liabilities of any kind
(including contingent obligations, tax assessments
and unusual forward or long-term commitments) which
are, in the aggregate, material to such
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Debtor or material with respect to EOTT MLP's
Consolidated financial condition.
(q) Except as shown in the Initial Financial Statements
or disclosed in Section 8(q) of the Disclosure
Schedule, as of the Closing Date, no Debtor is
subject to or restricted by any franchise, contract,
deed, charter restriction or other instrument or
restriction that could cause a Material Adverse
Change.
(r) No certificate, statement or other information
delivered herewith or heretofore by any Debtor to LC
Participant in connection with this Agreement or in
connection with any transaction contemplated hereby
contains any untrue statement of a material fact or
omits to state any material fact necessary to make
the statements contained herein or therein, in light
of the circumstances under which they were made, not
misleading as of the date made or deemed made. All
written information furnished after the date hereof
by or on behalf of any Debtor to the LC Agent in
connection with this Agreement and the other Credit
Documents, and the transactions contemplated hereby
and thereby will be true, complete and accurate in
every material respect in light of the circumstances
in which made, or based on reasonable estimates on
the date as of which such information is stated or
certified. There is no fact known to any Debtor that
has not been disclosed to the LC Agent that could
cause a Material Adverse Change.
(s) As of the Closing Date, except for the Cases, as
disclosed in the Initial Financial Statements or in
Section 8(s) of the Disclosure Schedule: (i) there
are no actions, suits or legal, equitable,
arbitrative or administrative proceedings pending or,
to the knowledge of any Debtor threatened, against
any Debtor or affecting any Collateral (including,
without limitation, any that challenge or otherwise
pertain to any Debtor's title to any Collateral)
before any Tribunal that could cause a Material
Adverse Change and (ii) there are no outstanding
judgments, injunctions, writs, rulings or orders by
any such Tribunal against any Debtor or any Debtor's
stockholders, partners, directors or officers or
affecting any Collateral that could cause a Material
Adverse Change.
(t) As of the Closing Date, except as disclosed in
Section 8(t) of the Disclosure Schedule, neither the
business nor the properties of any Debtor has been
affected by any fire, explosion, accident, strike,
lockout or other labor dispute, drought, storm, hail,
earthquake, embargo, act of God or of the public
enemy or other casualty (whether or not covered by
insurance), which could cause a Material Adverse
Change.
(u) Neither EOTT MLP nor any Borrower presently has any
Subsidiary or owns any capital stock in any other
corporation or association except those listed in
Section 8(u) of the Disclosure Schedule. No Debtor is
a member
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of any general or limited partnership, limited
liability company, joint venture or association of
any type whatsoever except those listed in Section
8(u) of the Disclosure Schedule. Each of EOTT MLP and
EOTT OLP owns, directly or indirectly, the entire
equity interest in each of its Subsidiaries listed in
Section 8(u) of the Disclosure Schedule.
(v) Section 8(v) of the Disclosure Schedule contains a
complete and correct list, as of the date of this
Agreement, of each credit agreement, loan agreement,
indenture, SCTSC Purchase Agreement, guaranty or
other arrangement providing for or otherwise relating
to any Indebtedness or any extension of credit (or
commitment for any extension of credit), or guaranty
by, any Debtor, or to which any Debtor is subject, in
excess of $1,000,000 with respect to any single
Person and such Person's Affiliates taken as whole,
other than the Credit Documents. The aggregate
principal or face amount outstanding or that may
become outstanding under each such arrangement is
correctly described in Section 8(v) of the Disclosure
Schedule.
(w) The Debtors have delivered to the LC Agent and each
of the LC Participants an initial sixteen-week weekly
cash revenue and expense budget (as supplemented from
time to time on a rolling sixteen-week basis and
approved by the LC Agent as to form and substance for
each subsequent week, the "CASH BUDGET"). The Cash
Budget has been prepared in good faith based on
reasonable assumptions. The initial Cash Budget (the
"INITIAL CASH BUDGET") is attached hereto as Exhibit
G. The projections are based upon reasonable
estimates and assumptions have been prepared on the
basis of assumptions stated therein and reflect the
reasonable estimates of the Borrowers of the results
of operations and other information projected
therein.
(x) The state of affairs referred to in the Disclosure
Schedule, and those in any supplement thereto, relate
only to the representations and warranties in the
Section or paragraph of the Agreement that
corresponds with the Section reference to which the
disclosures in the Disclosure Schedule expressly
refer or otherwise incorporate by express reference
and not to any other representation or warranty in
this Agreement.
(y) Subject to the rights of the Debtors set forth in the
proviso below, the Debtors shall acknowledge and
agree that (a) they have no claims or causes of
action (including, without limitation, avoidance
actions) against the Prepetition Agent or the
Prepetition Lenders under the Prepetition Credit
Agreement (or any of their directors, officers,
employees or agents), (b) they have no offset right,
counterclaim or defense of any kind against any of
its obligations, indebtedness or liabilities to the
agent or the lenders under the Prepetition Credit
Agreement, (c) the Prepetition Agent and the
Prepetition Lenders under the Prepetition Credit
Agreement have valid perfected liens on the
prepetition collateral described in their
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mortgages and security agreements and that there have
been no past conditions, acts, omissions, events,
circumstances or matters which have impaired or
adversely affected any of the agent's or the lenders'
rights, interests and title under the Prepetition
Credit Agreement with respect to such prepetition
collateral and (d) the Prepetition Agent and the
Prepetition Lenders under the Prepetition Credit
Agreement have properly performed and satisfied in a
timely manner all of their obligations to the
Borrowers; provided, however, that the Debtors shall
retain their rights, if any, to object to or
challenge within 30 days following the Filing Date
(a) the validity, enforceability, extent, perfection
or priority of the security interests and liens
securing indebtedness under the Prepetition Credit
Agreement and the SCTSC Purchase Agreements or (b)
the validity, allowability, status or amount of the
indebtedness under the Prepetition Credit Agreement
and the SCTSC Purchase Agreements.
9. AFFIRMATIVE COVENANTS. To conform with the terms and conditions under which
each LC Participant is willing to have Extensions of Credit outstanding to
Borrowers, and to induce each LC Participant to enter into this Agreement and to
make Extensions of Credit, the Debtors covenant and agree jointly and severally
that until the full and final payment in cash of the Obligations and the
expiration or termination of all Letters of Credit, unless the Majority LC
Participants have has previously agreed otherwise:
(a) Payment and Performance. Each Debtor will pay all amounts
due under the Credit Documents to which it is a party in accordance with the
terms thereof and will observe, perform and comply with every covenant, term and
condition expressed in the Credit Documents to which it is a party.
(b) Payment of Expenses. All Borrower Expenses shall be part
of the Obligations. Borrower shall pay any Lender Party, on such Lender Party's
demand, any and all Borrower Expenses which such Lender Party may pay in
connection with the provisions hereof.
(c) Instruments, Documents, Securities or Chattel Paper. Each
Debtor shall promptly notify the Collateral Agent of any instruments, documents,
securities or chattel paper that are owned or acquired by such Debtor. At any
time and from time to time, upon the demand of the LC Agent, such Debtor shall
deliver and pledge to the Collateral Agent, duly endorsed and/or accompanied by
such instruments of assignment and transfer in such form and substance as the LC
Agent may reasonably request, any and all instruments, documents, securities
and/or chattel paper which are included in the Collateral as the LC Agent may
request. Such Debtor shall maintain and safeguard any and all documents,
instruments and chattel paper in its possession and its individual books and
records relating to the Collateral in a commercially reasonable manner and cause
the security interest granted herein to the Collateral Agent to be marked
thereon.
(d) Books, Financial Statements and Reports. Each Debtor will
at all times maintain full and accurate books of account and records. EOTT MLP
will maintain and will cause its Subsidiaries to maintain a standard system of
accounting, will maintain its Fiscal Year and will furnish the following
statements and reports to the LC Agent at Borrowers' expense:
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(i) As soon as available, and in any event within 120 days
after the end of each Fiscal Year, commencing with Fiscal Year 2002 (A)
complete Consolidated financial statements of EOTT MLP as of, or for
the period ending, December 31 of the preceding year, together with all
notes thereto, prepared in reasonable detail in accordance with GAAP,
and (B) consolidating unaudited balance sheets and statements of income
of each Consolidated Subsidiary of EOTT MLP. The Consolidated financial
statements referred to in subclause (A) of the preceding sentence shall
set forth in comparative form the corresponding figures for the
preceding Fiscal Year. In addition, within 120 days after the end of
each Fiscal Year, commencing with Fiscal Year 2002 EOTT MLP will
furnish a certificate signed by such accountants (1) stating that they
have read this Agreement, and (2) further stating that in making their
examination and reporting on the Consolidated financial statements
described above they obtained no knowledge of any Default existing at
the end of such Fiscal Year, or, if they did so conclude that a Default
existed, specifying its nature and period of existence.
(ii) As soon as available, and in any event within 45 days
after the end of each of Fiscal Quarter of each Fiscal Year, (1) EOTT
MLP's Consolidated balance sheet as of the end of such Fiscal Quarter
and Consolidated statements of EOTT MLP's operations and cash flows for
such Fiscal Quarter and for the period from the beginning of the then
current Fiscal Year to the end of such Fiscal Quarter, (2)
consolidating balance sheets and statements of income of each
Consolidated Subsidiary as of (A) the end of such Fiscal Quarter or (B)
for such Fiscal Quarter and for the period from the beginning of the
then current Fiscal Year to the end of such Fiscal Quarter, all in
reasonable detail and prepared in accordance with GAAP, subject to
changes resulting from normal and recurring adjustments in conformity
with GAAP, and as soon as available, and in any event within 60 days
after the end of the last Fiscal Quarter of each Fiscal Year, EOTT
MLP's unaudited Consolidated balance sheet as of the end of such Fiscal
Quarter and Consolidated statement of operations for such Fiscal
Quarter and for the period from the beginning of the current Fiscal
Year to the end of such Fiscal Quarter.
(iii) As soon as available, and in any event within 45 days
after the end of each calendar month, (1) EOTT MLP's unaudited
Consolidated balance sheet as of the end of such month and an unaudited
Consolidated statement of EOTT MLP's earnings for such calendar month,
all in reasonable detail and prepared in accordance with GAAP, subject
to changes resulting from normal and recurring adjustments in
conformity with GAAP and (2) a report setting forth for such month
aggregate volumes for all marketing activities of all Debtors.
(iv) Together with each set of financial statements furnished
under subsections (i), (ii) and (iii) above, a certificate in the form
of Exhibit B signed by the chief financial officer or treasurer of EOTT
Energy stating that such financial statements are accurate and complete
in all material respects (subject to normal and recurring adjustments
in conformity with GAAP in the case of unaudited financial statements),
stating that he has reviewed the Credit Documents containing the
calculations and stating that no Default exists at the end of such
Fiscal Quarter or month, respectively, or at the time of such
certificate or specifying the nature and period of existence of any
such Default.
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(v) Promptly, copies of all material pleadings, notices,
orders and other papers filed in the Cases and copies of all reports
filed with the United States Trustee in the Cases.
(vi) No later than 12:00 pm (noon) on Monday of each week, (1)
the Cash Budget, (2) a cash flow report showing actual performance for
each weekly period reflected in the Cash Budget and variance of actual
performance from projected performance in the Cash Budget, commencing
the week ended October 12, 2002, (3) a Barrel Report, (4) a Weekly
Compliance Certificate and (5) a Borrowing Base Report in the form of
Exhibit C with such supporting information in detail as may from time
to time be prescribed by the LC Agent, duly completed and certified by
an authorized officer of EOTT Energy. Each Borrowing Base Report shall
include (A) a detailed listing of each Borrower's Accounts and Eligible
Crude/Product/Liquid Deliveries; (B) a detailed listing of the volumes
of each such party's crude oil and NGLs and the location of same; and
(C) a listing of each such party's crude oil, refined petroleum product
or NGL repurchase transactions in place or executed during the period
covered by such report.
(vii) Promptly upon their becoming available, copies of all
financial statements, reports, notices and proxy statements sent by
EOTT MLP to its unit holders and all registration statements,
prospectus supplements, periodic reports and other statements and
schedules filed by EOTT MLP with any securities exchange, the
Securities and Exchange Commission or any similar governmental
authority.
(viii) From time to time upon request, a written or oral
report, in reasonable detail, as to the status of the Reorganization
Plan.
(ix) On each Business Day, (1) a Cash Flow Report in the form
of Exhibit D duly completed by an authorized officer of EOTT Energy, as
of the preceding Business Day and (2) a statement reconciling such
report with the most recent Cash Flow Report previously delivered
pursuant to this subsection (ix).
(x) As soon as available, and in any event within 45 days
after the end of Fiscal Year 2002, an environmental compliance
certificate signed by the chief executive officers of EOTT GP and EOTT
Energy in the form attached hereto as Exhibit E. Further, if requested
by the LC Agent, the Debtors shall permit and cooperate with an
environmental and safety review made in connection with the operations
of the Debtors' properties one time during each Fiscal Year, by
consultants selected by the LC Agent which review shall, if requested
by the LC Agent, be arranged and supervised by environmental legal
counsel for the LC Agent, all at the Debtors' cost and expense. The
consultant shall render an oral or written report, as specified by the
LC Agent, based upon such review at the Debtors' cost and expense and a
copy thereof will be provided to the Debtors.
(xi) Concurrently with the annual renewal of the Debtors'
insurance policies, the Debtors shall at their own cost and expense, if
requested by the LC Agent in writing, cause a certificate or report to
be issued by the Debtors' professional insurance
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consultants or other insurance consultants satisfactory to the LC Agent
certifying that the Debtors' insurance for the next succeeding year
after such renewal (or for such longer period for which such insurance
is in effect) complies with the provisions of this Agreement and the
Security Documents.
(xii) On or about the fifth (5th) (but no later than the
eighth (8th)) and on or about the twentieth (20th) (but no later than
the twenty-third (23rd)) day of each calendar month and upon request by
the LC Agent an Open Position Report in the form of Exhibit F, with
such supporting information in detail as may from time to time be
prescribed by the LC Agent, duly completed by an authorized officer of
EOTT Energy as of the last day of the preceding month if delivered on
or about the fifth (5th) day of a month, as of the fifteenth (15th) day
if delivered on or about the twentieth (20th) day of a month, or as of
the date otherwise requested. Such report shall include (A) a listing
of all long and short positions; (B) crude oil, refined petroleum
product and NGL location information; (C) pricing information published
by an independent publication acceptable to the LC Agent; and (D) a
report on a xxxx to market basis of all Fixed Price Contracts together
with a complete list of all net realized gains and losses on any Fixed
Price Contracts in form satisfactory to the LC Agent.
(xiii) On or before the tenth (10th) Business Day following
receipt by any Borrower or any other Debtor, a copy of any account
statement received from any bank, securities intermediary, commodities
or futures broker or other institution with whom such Borrower or such
Debtor maintains any deposit, investment, trading or other account.
(xiv) Within 30 days after the end of each calendar month, a
copy of the Lease Volume Report attached hereto as Exhibit K.
(xv) Promptly, from time to time, such other information,
documents or reports regarding any Borrower or any other Debtor
(including accountants' management letters and updates to the Cash
Budget) as the LC Agent may request, including any regulatory filings.
(e) Other Information and Inspections. In each case, subject
to the last sentence of this Section 9(e), each Debtor will furnish to each LC
Participant any information that the LC Agent or any LC Participant may from
time to time request concerning any covenant, provision or condition of the
Credit Documents or any matter in connection with the Debtors' businesses and
operations. In each case, subject to the last sentence of this Section 9(e),
each Debtor will permit representatives appointed by the LC Agent (including
independent accountants, auditors, agents, attorneys, appraisers and any other
Persons) to visit and inspect during normal business hours any of such Debtor's
property, including its books of account, other books and records and any
facilities or other business assets, to make extra copies therefrom and
photocopies and photographs thereof and to write down and record any information
such representatives obtain, and each Debtor shall permit the LC Agent or its
representatives to investigate and verify the accuracy of the information
furnished to the LC Agent or any LC Participant in connection with the Credit
Documents and to discuss all such matters with its officers, employees and, upon
prior notice to the Borrower Representative, its
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representatives. Without limitation of the foregoing, at such reasonable times
and intervals as the LC Agent and the LC Participants shall reasonably request,
Borrowers shall permit the LC Agent and its representatives to conduct an audit,
examination, test and verification of the Collateral and the other business and
assets of the Debtors and in connection with such examination to have full
access to and the right to examine, audit, make abstracts and copies from and
inspect the Debtors' records, files, books of account and all other documents,
instruments and agreements to which any Debtor is a party. Borrowers shall pay
all reasonable costs and expenses of the LC Agent associated with any such
audits. Additionally, at Borrowers' expense, from time to time the LC Agent may
require an inspection of the Collateral in storage at EOTT Terminals to be
conducted by an independent appraiser selected by the LC Agent. Each of the
foregoing audits, inspections and examinations shall be made subject to
compliance with applicable safety standards and the same conditions applicable
to any Debtor in respect of property of that Debtor on the premises of Persons
other than a Debtor or an Affiliate of a Debtor, and all information, books and
records furnished or requested to be furnished, or of which copies, photocopies
or photographs are made or requested to be made, all information to be
investigated or verified and all discussions conducted with any officer,
employee or representative of any Debtor shall be subject to any applicable
attorney-client privilege exceptions that the Debtor reasonably determines is
necessary and to compliance with conditions to disclosures under non-disclosure
agreements between any Debtor and Persons other than a Debtor or an Affiliate of
a Debtor, and subject further to the express undertaking of each Person acting
at the direction of or on behalf of the LC Agent to be bound by the
confidentiality provisions of Section 17(p).
(f) Appraisals for Eligible Fixed Assets. Each Debtor will,
within 45 days of the Closing Date, deliver to the LC Agent, all necessary
appraisals conducted by an appraiser selected by the LC Agent in order to
calculate the Appraised Value of Eligible Fixed Assets.
(g) Notice of Material Events and Change of Address. Each
Debtor will notify each LC Participant, not later than five Business Days after
any executive officer of such Debtor has knowledge thereof, stating that such
notice is being given pursuant to this Agreement, of:
(i) the occurrence of any Material Adverse Change,
(ii) the occurrence of any Default,
(iii) the acceleration of the maturity of any Indebtedness
owed by any Debtor or of any default under any post-petition indenture,
mortgage, agreement, contract or other instrument to which any of them
is a party or by which any of them or any of their properties is bound,
if such default could cause a Material Adverse Change,
(iv) the occurrence of any Termination Event,
(v) Under any Environmental Law, any claim of $1,000,000 or
more, any notice of potential liability that might be reasonably likely
to exceed such amount or any other material adverse claim asserted
against any Debtor or with respect to any Debtor's properties taken as
a whole,
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(vi) (1) any material loss, damage, investigation, action,
suit, proceeding, claims, setoff, withholding or other defenses
relating to the Collateral, and (2) the occurrence of any Event of
Default or event which, with the passing of time or giving of notice or
both, would constitute an Event of Default, and
(vii) the filing of any suit or proceeding, or the assertion
in writing of a claim against any Debtor or with respect to any
Debtor's properties.
Upon the occurrence of any of the foregoing, the Debtors will take all
necessary or appropriate steps to remedy promptly any such Material
Adverse Change, Default, acceleration, default or Termination Event to
protect against any such adverse claim, to defend any such suit or
proceeding and to resolve all controversies on account of any of the
foregoing. The Debtors will also notify the LC Agent and the LC Agent's
counsel in writing at least 20 Business Days prior to the date that any
Debtor changes its name or the location of its chief executive office
or principal place of business or the place where it keeps its books
and records concerning the Collateral, furnishing with such notice any
necessary financing statement amendments or requesting the LC Agent and
its counsel to prepare the same.
(h) Maintenance of Properties. Each Debtor will maintain,
preserve, protect and keep all Collateral and all other property used or useful
in the conduct of its business in good condition (ordinary wear and tear
excepted) and in material compliance with all applicable Laws and will from time
to time make all repairs, renewals and replacements reasonably needed to enable
the business and operations carried on in connection therewith to be promptly
and advantageously conducted at all times.
(i) Discharge of Liens. At its option, should any Debtor fail
to do so, except to the extent permitted hereunder, the Collateral Agent may
discharge post-petition taxes, Liens or security interests or other encumbrances
or charges at any time levied or placed on the Collateral and may pay for the
insurance, maintenance and preservation of the Collateral. The Borrowers agree
to reimburse the Collateral Agent on demand, together with interest thereon at
the Alternate Base Rate, for any payment made or expense incurred by the
Collateral Agent in connection with the foregoing or otherwise under this
Agreement, and any such payment or expense shall constitute a part of the
Obligations secured by the Collateral.
(j) Maintenance of Existence and Qualifications. Each Debtor
will maintain and preserve its existence and its rights and franchises in full
force and effect and will qualify to do business in all states or jurisdictions
where required by applicable Law, except where the failure so to qualify will
not cause a Material Adverse Change.
(k) Payment of Trade Liabilities, Taxes, etc. Each Debtor will
(i) timely file all required tax returns including any extensions; (ii) timely
pay all post-petition taxes, assessments and other governmental charges or
levies imposed upon it or upon its income, profits or property; (iii) within 120
days after the date such goods are delivered or such services are rendered, pay
all post-petition Liabilities owed by it on ordinary trade terms to vendors,
suppliers and other Persons providing goods and services used by it in the
ordinary course of its business; (iv) pay and discharge when due all other
post-petition Liabilities now or hereafter
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owed by it, other than royalty payments suspended in the ordinary course of
business; and (v) maintain appropriate accruals and reserves for all of the
foregoing in accordance with GAAP. However, each Debtor may delay paying or
discharging any of the foregoing so long as it has set aside on its books
adequate reserves therefor in accordance with GAAP and (i) it is in good faith
contesting the validity thereof in the Enron Bankruptcy Proceedings, if
applicable, or by other appropriate proceedings, if necessary or (ii) it is in
good faith contesting the validity of such Liability, and such Liability is
claimed by an Affiliate of Enron that is not a debtor-in-possession in the Enron
Bankruptcy Proceedings.
(l) Insurance. Each Debtor shall at all times carry insurance
for all of its property (irrespective of whether such property is owned or
acquired before, on or after the Closing Date) with financially sound and
reputable insurers, of a character usually carried by responsible Persons
engaged in the same business or a business similarly situated against loss or
damage, of the kinds and in the amounts customarily carried by such Persons and
carry such other insurance as is usually carried by such Persons, including,
without limitation, insurance against its liability for injury to Persons (with
the LC Agent, the LC Participants and the Collateral Agent named as additional
insureds), all in amounts and of the type currently carried by such Debtor.
Within thirty (30) days after the Closing Date, Borrower will provide to the LC
Agent a detailed schedule describing all insurance coverages maintained by or
for any Debtor together with copies of the underlying policies. Within thirty
(30) days after the Closing Date, all insurance policies covering Collateral
shall be endorsed (i) to provide for payment of losses to the Collateral Agent,
(ii) to provide that such policies may not be canceled or reduced or affected in
any material manner for any reason without 15 days prior notice to the
Collateral Agent and (iii) to provide for any other matters specified in any
applicable Security Document or which the Collateral Agent may reasonably
require.
(m) Performance on Borrowers' Behalf. If any Debtor fails to
pay any post-petition taxes, insurance premiums, expenses, attorneys' fees or
other amounts it is required to pay under any Credit Document, the LC Agent may
pay the same after notice of such payment by the LC Agent is given to the
Borrower Representative. Borrower shall immediately reimburse the LC Agent for
any such payments and each amount paid by the LC Agent shall constitute an
Obligation owed hereunder that is due and payable on the date such amount is
paid by the LC Agent.
(n) Interest. Borrower hereby promises to each LC Participant
to pay interest at the Default Rate on all Obligations (including Obligations to
pay fees or to reimburse or indemnify any LC Participant) that Borrower has in
this Agreement promised to pay to such LC Participant and that are not paid when
due. Such interest shall accrue from the date such Obligations become due until
they are paid.
(o) Compliance with Agreements and Law. Subject to its rights
and duties as a debtor in a Case, each Debtor will perform all material
obligations it is required to perform under the terms of each indenture,
including in the case of EOTT MLP, the EOTT MLP Senior Notes Indenture,
mortgage, deed of trust, security agreement, lease and franchise and each
material agreement, contract or other instrument or obligation to which it is a
party or by which it or any of its properties is bound, except where performance
is excused or delayed by the
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Bankruptcy Code. Each Debtor will conduct its business and affairs in compliance
with all Laws applicable thereto.
(p) Environmental Matters; Environmental Reviews.
(i) Each Debtor will comply in all material respects with all
Environmental Laws now or hereafter applicable to such Debtor as well
as all contractual obligations and agreements with respect to
environmental remediation or other environmental matters and will
obtain, at or prior to the time required by applicable Environmental
Laws, all environmental, health and safety permits, licenses and other
authorizations necessary for its operations and will maintain such
authorizations in full force and effect.
(ii) Each Debtor will promptly furnish to the LC Agent all
written notices of violation, orders, claims, citations, complaints,
penalty assessments, suits or other proceedings received by any such
Debtor after the date hereof, or of which it has notice after the date
hereof, pending or threatened against such Debtor, the potential
liability of which exceeds $1,000,000 or could cause a Material Adverse
Change if resolved adversely against such Debtor, by any governmental
authority with respect to any alleged violation of or non-compliance
with any Environmental Laws or any permits, licenses or authorizations
in connection with its ownership or use of its properties or the
operation of its business.
(iii) Each Debtor will promptly furnish to the LC Agent all
requests for information, notices of claim, demand letters and other
notifications received after the date hereof by such Debtor in
connection with its ownership or use of its properties or the conduct
of its business, relating to potential responsibility with respect to
any investigation or clean-up of Hazardous Material at any location,
the potential liability of which exceeds $1,000,000 or could cause a
Material Adverse Change if resolved adversely against such Debtor.
(q) Evidence of Compliance. Subject to the last sentence of
Section 9(e), each Debtor will furnish to each LC Participant at such Debtor's
expense all evidence which the LC Agent from time to time reasonably requests in
writing as to the accuracy and validity of or compliance with all
representations, warranties and covenants made by any Debtor in the Credit
Documents, the satisfaction of all conditions contained therein and all other
matters pertaining thereto.
(r) Agreement to Deliver Security Documents. To further secure
the Obligations whenever requested by the LC Agent in its sole and absolute
discretion, the Debtors will deliver chattel mortgages, security agreements,
financing statements and other Security Documents in form and substance
satisfactory to the LC Agent for the purpose of granting, confirming and
perfecting first and prior Liens or security interests in any personal property
(tangible or intangible) now owned or hereafter acquired by any Debtor.
(s) Guaranties of Newly Created or Acquired Subsidiaries. Each
Subsidiary of EOTT created, acquired or coming into existence after the date
hereof shall, promptly upon request by the LC Agent, execute and deliver to the
LC Agent an instrument of joinder pursuant
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to which each Subsidiary adopts, ratifies, confirms and agrees to perform and be
bound by Section 13 hereof and the absolute and unconditional guaranty of the
timely repayment of the Obligations and the due and punctual performance of the
obligations of Borrower hereunder set forth therein, which instrument shall
otherwise be satisfactory to the LC Agent in form and substance. EOTT MLP will
cause each such Subsidiary to deliver to the LC Agent, simultaneously with its
delivery of such an instrument of joinder, written evidence satisfactory to the
LC Agent and its counsel that such Subsidiary has taken all corporate, limited
liability company or partnership action necessary to duly approve and authorize
its execution, delivery and performance of such instrument and any other
documents that it is required to execute.
(t) Compliance with Agreements. Each Debtor shall observe,
perform or comply with any term or condition under the Restructuring Agreement.
In addition, each Debtor shall observe, perform or comply with any agreement
with any Person or any term or condition of any instrument, if such agreement or
instrument is materially significant to such Debtor or to EOTT MLP on a
Consolidated basis or materially significant to any Guarantor, unless any such
failure to so observe, perform or comply is remedied within the applicable
period of grace (if any) provided in such agreement or instrument.
(u) Risk Management Policies. During the term of this
Agreement, EOTT MLP will maintain in effect the Risk Management Policies and
adhere to and conduct its risk management activities, and cause the other
Debtors to adhere to and conduct their respective risk management activities, in
accordance with such policies. The Borrower Representative shall provide written
notice to the LC Agent of any changes to the Risk Management Policies that the
EOTT Energy board of directors adopts promptly upon the EOTT Energy board of
directors' action thereon, and in no event more than 30 days after approval by
the EOTT Energy board of directors of such changes.
(v) Critical Vendor Program. The Debtors shall have
established a critical vendor program satisfactory to the LC Agent on the date
of the Second Interim Order.
(w) Retention of Financial Advisor and Commercial Finance
Audits. The Debtors acknowledge that the LC Agent and/or the LC Agent's Special
Counsel may continue to retain KPMG to, among other things, make visits to, and
discuss financial and operational matters with, the Borrowers and to advise the
LC Agent and the LC Participants as to business, operations and financial
condition of the Debtors. Such consultant shall not be limited in the frequency
of visits to the facilities of the Debtors. The Debtors shall cooperate with
such consultant and provide such consultant with all information reasonably
requested by such consultant in connection with its engagement by the LC Agent
and/or the LC Agent's Special Counsel. Upon the reasonable request of the LC
Agent, the Borrowers will obtain and deliver to the LC Agent, or, if the LC
Agent so elects, will cooperate with the LC Agent in the LC Agent's obtaining, a
report of an independent collateral auditor satisfactory to the LC Agent (which
may be affiliated with one of the LC Participants) with respect to the accounts,
inventory and fixed assets components included in the Borrowing Base, which
report shall indicate whether or not the information set forth in the Borrowing
Base Certificate most recently delivered is accurate and complete in all
material respects based upon a review by such auditors of the accounts
receivable (including verification with respect to the amount, aging, identity
and credit of the respective Account Debtors and the billing practices of the
Borrowers) and inventory (including
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verification as to the value, location and respective types). All such
collateral value reports shall be conducted and made at the expense of the
Borrowers.
10. NEGATIVE COVENANTS. To conform with the terms and conditions under which
each LC Participant is willing to have Extensions of Credit outstanding to the
Borrowers, and to induce each LC Participant to enter into this Agreement and
make the Extensions of Credit, the Debtors covenant and agree jointly and
severally that until the full and final payment in cash of the Obligations and
the expiration or termination of all Letters of Credit, unless the Majority LC
Participants have previously agreed otherwise:
(a) Indebtedness. No Debtor will in any manner owe or be
liable for Indebtedness except:
(i) the Obligations;
(ii) Indebtedness arising under Hedging Contracts permitted
under Section 10(d) or consisting of options, swaps, collars and
similar instruments that relate to crude oil, refined petroleum
products or NGLs that satisfy the requirements of subclauses (A), (B)
and (C) of the proviso to the definition of "Hedging Contracts";
(iii) Indebtedness of any Borrower owing to any other
Borrower;
(iv) Liabilities with respect to obligations to deliver crude
oil, refined petroleum products or NGLs or to render terminalling or
storage services in consideration for advance payments to a Borrower;
provided, however, such delivery or rendering, as applicable, is to be
made within 60 days after such payment;
(v) guaranties by EOTT MLP or any Borrower of trade payables
of any Borrower incurred and paid in the ordinary course of business on
ordinary trade terms;
(vi) Indebtedness of the Debtors incurred prior to the Filing
Date;
(vii) any Indebtedness outstanding under the SCTSC Purchase
Agreements;
(viii) any Indebtedness existing under the note referred to in
the Enron Settlement Agreement;
(ix) any Indebtedness existing under the Xxxxxx DIP Credit
Agreement not exceeding $75,000,000 in principal amount, less any
optional or mandatory prepayments or repayments of principal;
(x) any Indebtedness existing under the EOTT MLP Senior Notes;
and
(xi) Daylight Overdraft obligations to Standard Chartered, as
contemplated in the Intercreditor Agreement, not to exceed $15,000,000.
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(b) Accounts. No Debtor shall, without the prior written
consent of the Majority LC Participants, open or maintain any commodity,
investment, securities or deposit accounts except for those listed on the
Disclosure Schedule.
(c) Limitation on Liens. No Debtor will assign, sell,
mortgage, lease, transfer, set over, pledge, grant any security interest in or
Lien upon, encumber, or otherwise dispose of or abandon any Accounts, inventory,
cash, investment securities, margin deposit accounts with commodities brokers or
other rights or properties that constitute Collateral, whether now owned or
hereafter acquired, nor will any Debtor permit any such Lien, encumbrance or
disposition to exist or occur with respect to such property, except for (i) the
sale from time to time in the ordinary course of business of such property as
may constitute inventory of such Debtor; (ii) Liens in favor of the Collateral
Agent; (iii) taxes constituting a Lien but not due and payable; (iv) Liens
described in any description of property attached to any mortgage, deed of trust
or fixture filing included in the Security Documents and any renewals,
extensions or modifications (but not enlargements) thereof; (v) Liens securing
purchase money financing for any property or asset hereafter acquired; (vi)
Liens reserved in leases, or arising by operation of law, for rent and for
compliance with the terms of the lease with respect to leasehold estates; (vii)
mechanic's or materialmen's Liens or other similar Liens, whether contractual or
arising by operation of law, for amounts that are not more than 60 days past due
or the validity of which is being contested in good faith by appropriate
proceedings; (viii) those consented to in writing by the LC Agent; and (ix)
Permitted Liens. Except as provided in the Intercreditor Agreement, no Debtor
shall abandon, forfeit, surrender, or release any rights in the Collateral or
enter into any operating, joint venture or similar agreement with respect to the
Collateral.
(d) Hedging Contracts. No Debtor will be a party to or in any
manner be liable on any Hedging Contract, except Hedging Contracts to hedge the
Debtors' risk from fluctuations in commodity prices in the ordinary course of
business or pursuant to the Crude Oil Repurchase Agreement.
(e) Limitation on Mergers, etc. and Issuances of Securities.
Except as expressly provided in this Section and as contemplated by the
Reorganization Plan filed with the Bankruptcy Court, no Debtor will (i) enter
into any transaction of merger or consolidation or amalgamation, or liquidate,
wind up or dissolve itself (or suffer any liquidation or dissolution), (ii)
acquire any business or property from, or capital stock of, or be a party to any
acquisition of, any Person except for (1) purchases of inventory and other
property to be sold or used in the ordinary course of business, and (2)
Investments permitted under Section 10(h) or (iii) sell, transfer, lease,
exchange, alienate or otherwise dispose of, in one transaction or a series of
transactions, any part of its business or property, whether now owned or
hereafter acquired, except for sales or transfers not prohibited by Section
10(f). EOTT MLP will not issue any securities other than limited partnership
interests and any options or warrants giving the holders thereof only the right
to acquire such interests. No Subsidiary of EOTT MLP will issue any additional
partnership or limited liability company interests or shares of its capital
stock or other securities or any options, warrants or other rights to acquire
such additional partnership or limited liability company interests or shares or
other securities, except that a direct Subsidiary of a Debtor may issue
additional partnership or limited liability company interests or shares or other
securities to such Debtor or to EOTT MLP so long as such Subsidiary is a Wholly
Owned
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Subsidiary of EOTT MLP after giving effect thereto. No Subsidiary of a Borrower
which is a partnership will allow any diminution of such Borrower's interest
(direct or indirect) therein.
(f) Limitation on Asset Sales. No Debtor will sell, transfer,
lease, exchange, alienate or dispose of any Collateral or any of its material
assets or properties or any material interest therein, including pursuant to any
sale/leaseback transaction, except:
(i) equipment that is worthless or obsolete or no longer
necessary or useful to the proper conduct of its business or that is replaced by
equipment of equal suitability and value;
(ii) (x) inventory (including pipeline linefill) sold in the
ordinary course of business on ordinary trade terms and (y) such inventory sold
pursuant to the Crude Oil Purchase Agreement (including documents of title
delivered to SCTSC in connection therewith and all proceeds thereof);
(iii) Accounts, contract rights and any proceeds thereof sold
pursuant to the Receivables Purchase Agreement; and
(iv) Designated Assets on terms and conditions satisfactory to
the LC Agent.
All proceeds of any such sales shall be paid directly to the Collateral
Agent as provided for in the Intercreditor Agreement. No Debtor will
sell, transfer or otherwise dispose of capital stock of or partnership
or other interests in any of its Subsidiaries except to EOTT MLP or a
Wholly Owned Subsidiary of EOTT MLP. No Debtor will discount, sell,
pledge or assign any notes payable to it, Accounts or future income.
The Collateral Agent will, at the Borrower Representative's request and
expense, execute a release, satisfactory to the Borrower Representative
and the LC Agent, of any Collateral so sold, transferred, leased,
exchanged, alienated or disposed of pursuant to this Section 10(f).
(g) Limitation on Distributions, Dividends and Redemptions. No
Debtor will declare or pay any dividends on, or make any other distribution of
any kind in respect of, any class of its capital stock or any partnership,
limited liability company or other interest in it, nor will any Debtor directly
or indirectly make any capital contribution of any nature to, or purchase,
redeem, acquire or retire any shares of the capital stock of or partnership or
limited liability company interests in, any Debtor (whether such interests are
now or hereafter issued, outstanding or created), or cause or permit any
reduction or retirement of the capital stock of any Debtor, while any
Obligations are outstanding. Notwithstanding the foregoing, Subsidiaries of a
Borrower shall not be restricted, directly or indirectly, from declaring and
paying dividends or making any other distributions to such Borrower.
(h) Limitation on New Businesses, Investments and Capital
Expenditures. No Debtor will (i) make any expenditure or commitment or incur any
obligation or enter into or engage in any transaction except in the ordinary
course of business, (ii) engage directly or indirectly in any business or
conduct any operations except in connection with or incidental to its present
businesses and operations, (iii) make any capital contributions to or other
Investments in any Person, other than Permitted Investments, or (v) make or
incur any Capital Expenditures other than Permitted Capital Expenditures. All
transactions permitted under this Section are subject to Section 10(f).
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(i) Limitation on Credit Extensions. Except for Permitted
Investments and Hedging Contracts permitted under Section 10(d), no Debtor will
extend credit, make advances or make loans other than normal and prudent
extensions of credit to customers buying goods and services in the ordinary
course of business or to another Debtor in the ordinary course of business,
which extensions shall not be for longer periods than those extended by similar
businesses operated in a normal and prudent manner.
(j) Transactions with Affiliates. No Debtor will engage in any
material transaction with Enron or any of its Affiliates, except as contemplated
in the Enron Settlement Agreement and the Employee Transition Agreement.
(k) Prohibited Contracts. Except as expressly provided for in
the Credit Documents and as described in the Disclosure Schedule, no Debtor
will, directly or indirectly, enter into, create or otherwise allow to exist any
contract or other consensual arrangement restricting the ability of any
Subsidiary of EOTT MLP, including but not limited to any Borrower to: (i) pay
dividends or make other distributions, (ii) purchase or redeem equity interests
held in it by any Borrower or EOTT MLP, (iii) repay loans and other Indebtedness
owing by it to Borrower or EOTT MLP, (iv) transfer any of its assets to any
Borrower or EOTT MLP or (v) create, incur, assume or suffer to exist any Lien
upon its property or assets to secure the Obligations. No Debtor will enter into
any "take-or-pay" contract or other contract or arrangement for the purchase of
goods or services that obligates it to pay for such goods or service regardless
of whether they are delivered or furnished to it other than contracts for
pipeline capacity or for services in either case reasonably anticipated to be
utilized in the ordinary course of business. No ERISA Affiliate will incur any
obligation to contribute to any "multiemployer plan" as defined in Section 4001
of ERISA that is subject to Title IV of ERISA. No Debtor shall prepay the
principal of, or purchase, redeem or otherwise acquire or retire for value, any
of the EOTT MLP Senior Notes.
(l) Modification of Certain Agreements. Except as contemplated
by the Reorganization Plan filed with the Bankruptcy Court, no Debtor will
amend, modify, or permit any amendment or modification to (i) its partnership
agreement, limited liability company agreement, certificate of formation,
certificate of incorporation or other organizational document, as applicable,
(ii) the EOTT MLP Senior Notes Indenture, or (iii) any contract or lease, that
releases, qualifies, limits, makes contingent or otherwise detrimentally affects
the rights and benefits of the LC Agent or any other Lender Party under or
acquired pursuant to any Security Documents.
(m) Open Positions. The Debtors shall at all times limit their
Open Positions in accordance with the Risk Management Policies as from time to
time in effect.
(n) Redelivery of Borrowing Base Report. If any contract gives
rise to an Eligible Receivable that is reflected in a Borrowing Base Report
representing the obligation to deliver crude oil in the month next succeeding
the month in which the Borrowing Base Report is delivered, and such contract is
modified, sold or exchanged in any way that would negatively affect the
Borrowing Base, then the Borrower Representative shall immediately (i) deliver
to the LC Agent a revised Borrowing Base Report satisfactory to the LC Agent and
(ii) make any prepayment as may be required under Section 2(g) resulting from
such reduced Borrowing Base.
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(o) Books and Records. No Debtor shall permit any material
change in the accounting treatment or reporting practices of each Debtor from
those used in preparation of the financial statements referenced in Section
9(d), except as required or permitted under GAAP.
(p) Bankruptcy Cases. No Debtor will seek, consent or suffer
to exist (i) any modification, stay, vacation or amendment to the Orders, unless
(1) the LC Participants have failed to perform their obligations hereunder in
any respect material to the business operations of the Debtors and the effect of
such modification, stay, vacation or amendment is solely to remedy such failure
or to obtain for the Debtors substitute performance or (2) the LC Agent has
consented to such modification, stay, vacation or amendment in writing, (ii) a
priority claim for administrative expense or unsecured claim against any of the
Debtors (now existing or hereafter arising of any kind or nature whatsoever,
including without limitation any administrative expense of the kind specified in
Section 503(b), 506(c) or 507(b) of the Bankruptcy Code) equal or superior to
the priority claims of the LC Agent and the LC Participants in respect of the
Obligations, except for Agreed Administrative Expenses, or (iii) any Lien on any
Collateral, having a priority equal or superior to the Liens in favor of the LC
Agent and the LC Participants or the Collateral Agent in respect of the
Obligations or securing the Prepetition Bank Debt, except for Permitted Prior
Liens.
(q) Cash Budget. No Debtor will permit the actual Cumulative
Net Cash Flow for any two consecutive Reference Periods to be less than 90% of
the amount of projected Cumulative Net Cash Flow for such Reference Periods as
specified in the Fixed Cash Budget.
As used herein:
(i) "CUMULATIVE NET CASH FLOW" has the meaning set forth
in the Initial Cash Budget;
(ii) "FIXED CASH BUDGET" means the Initial Cash Budget and
any other subsequent sixteen-week weekly cash revenue
and expense budget prepared by the Debtors and
approved by the LC Agent as to form and substance and
designated in writing by the Debtors and the LC Agent
as the "Fixed Cash Budget" for purposes of this
Agreement. In the event that the Initial Cash Budget
has not been replaced by a subsequent Fixed Cash
Budget, as provided above, then for periods between
the last period covered by the Initial Cash Budget
and the Maturity Date, and for purposes of
determining compliance with this Section 10(q), the
projected Cumulative Net Cash Flow shall be
determined by extrapolating the Cumulative Cash Flow
for the last month covered by the Initial Cash Budget
on a basis satisfactory to the LC Agent; and
(iii) "REFERENCE PERIOD" means any period described in the
Fixed Cash Budget which starts with the first week
covered by such Budget and ends with the most
recently ended week. Accordingly, the first Reference
Period will be the first week covered by the Fixed
Cash Budget, the second Reference Period will be the
first two weeks (considered as a single period)
covered by the Fixed Cash Budget, the third Reference
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Period will be the first three weeks (considered as a
single period) covered by the Fixed Cash Budget, and
so on.
(r) Minimum Crude Oil Lease Volumes. No Debtor shall permit
aggregate crude oil purchases at the lease during any month to be less than 98%
of the Minimum Lease Volumes. As used herein, "Minimum Lease Volume" means
230,000 barrels per day. In the event that the Borrowers wish to enter into a
marketing arrangement with a third party that will cause a decrease in aggregate
crude oil purchases from leaseholders, the LC Participants may amend this clause
(s) to reduce the Minimum Lease Volume in accordance with Section 17(r).
(s) Prepetition Indebtedness. The Debtors shall not pay or
discharge, or cause to be paid or discharged, any Indebtedness of any Debtor
incurred before the Filing Date other than payments:
(i) on Prepetition Bank Debt;
(ii) approved by the Bankruptcy Court on or before the date of
the Second Interim Order, including, without limitation, the Critical
Vendor Order;
(iii) required by Section 1114 of the Bankruptcy Code;
(iv) as required in the Reorganization Plan, on or about the
effective date of the Reorganization Plan; or
(v) of severance and other payments approved by the Bankruptcy
Court and to which the LC Agent consents in writing.
None of the Borrowers shall (x) file any motion with the Bankruptcy
Court in accordance with Section 546(g) of the Bankruptcy Code seeking
to return any goods shipped to any of the Borrowers prior to the Filing
Date, or (y) consent to any creditor taking a set-off against any
Prepetition Bank Debt based upon any such return pursuant to Section
553(b)(1) of the Bankruptcy Code or otherwise, in each case without the
LC Agent's consent in writing.
11. EVENTS OF DEFAULT. Each of the following events constitutes an Event of
Default under this Agreement:
(a) Borrower fails to pay any Obligations with respect to
any Matured DIP LC Obligations when due and payable;
(b) Any Debtor fails to pay any Obligation (other than
the Obligations in subsection (a) above) when due and
payable, whether at a date for the payment of a fixed
installment or as a contingent or other payment
becomes due and payable or as a result of
acceleration or otherwise, within three Business Days
after the same becomes due;
(c) Any event defined as a "default" or "event of
default" in any Credit Document (other than this
Agreement and such "events of default" that are
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defined to have occurred upon the occurrence of
Events of Default hereunder) occurs, and the same is
not remedied within the applicable period of grace
(if any) provided in such Credit Document;
(d) Any Debtor fails to duly observe, perform or comply
with any covenant, agreement or provision of Section
2(g), Section 2(h), Section 9(f), Section 9(g),
Section 9(l), or Section 10;
(e) Any Debtor fails (other than as referred to in
subsection (a), (b), (c) or (d) above) to duly
observe, perform or comply with any covenant,
agreement, condition or provision of any Credit
Document to which it is a party, and such failure
remains unremedied for a period of 10 days after
notice of such failure is given by the LC Agent to
the Borrower Representative;
(f) Any representation or warranty previously, presently
or hereafter made or deemed made in writing by or on
behalf of any Debtor in connection with any Credit
Document shall prove to have been false or incorrect
in any material respect on any date on or as of which
made or deemed made, or any Credit Document at any
time ceases to be valid, binding and enforceable as
warranted in Section 8(b) for any reason other than
its release or subordination by all LC Participants;
(g) Any Debtor shall default in the payment when due of
any principal of or interest on any postpetition
Indebtedness, or any prepetition Indebtedness if, by
order of the Bankruptcy Court issued with respect to
such prepetition Indebtedness, the default thereunder
entitles the holder thereof to relief from the
automatic stay pursuant to Section 362 of the
Bankruptcy Code, in excess of $500,000 in the
aggregate of such postpetition or prepetition
Indebtedness, or any event specified in any note,
agreement, indenture, mortgage, deed of trust,
security agreement or other document evidencing or
relating to any such Indebtedness shall occur if the
effect of such event is to cause, or (with the giving
of any notice or the lapse of time or both) to permit
the holder or holders of such post-petition
Indebtedness (or a trustee or agent on behalf of such
holder or holders) to cause, such post-petition
Indebtedness to become due, or to be prepaid in full
(whether by redemption, purchase, offer to purchase
or otherwise), prior to its stated maturity;
(h) Any Debtor has entered against it judgment or
execution action which remains undismissed for a
period of thirty (30) days, or relief from the
automatic stay under Section 362(a) of the Bankruptcy
Code shall be granted to any creditor or creditors of
any of the Debtors with respect to assets having an
aggregate value in excess of $500,000 or where the
deprivation of any of the Debtors of such assets
would reasonably be expected to have a material
adverse effect on the Debtors, considered as a whole;
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(i) Any Change in Control occurs;
(j) Any Borrower (i) maintains in effect Risk Management
Policies that are not Currently Approved by the LC
Agent or (ii) fails to adhere to or conduct its risk
management activities, or cause the other Debtors to
adhere to or conduct their respective risk management
activities, in accordance with the Risk Management
Policies as in effect from time to time;
(k) Any Material Adverse Change occurs;
(l) Any of the Borrowers shall be enjoined from
conducting any part of its business as a debtor in
possession;
(m) The Bankruptcy Court shall enter an order (i)
amending, supplementing, altering, staying, vacating
rescinding or otherwise modifying any Order or any
other order with respect to any of the Cases
affecting in any material respect this Agreement or
the Prepetition Credit Agreement, (ii) appointing a
chapter 11 trustee or an examiner with enlarged
powers relating to the operation of the business
(powers beyond those set forth in Section 1106(a)(3)
and (4) of the Bankruptcy Code) under Section 1106(b)
of the Bankruptcy Code in any of the Cases, (iii)
dismissing any of the Cases or converting any of the
Cases to a chapter 7 case, (iv) granting relief from
the automatic stay to any creditor holding or
asserting a Lien or reclamation claim on a material
portion (i.e. more than $500,000 in the aggregate) of
the assets of any of the Borrowers or where the
deprivation of any of the Borrowers of such assets
would reasonably be expected to have a material
adverse effect on the Borrowers, considered as a
whole, or (v) granting of any security interest in or
any Lien on any property of the Debtors in favor of
any party (other than liens granted pursuant to the
Second Interim Order or otherwise permitted therein);
(n) The Bankruptcy Court shall fail to sign the Final
Order by October 25, 2002;
(o) An application shall be filed by any of the Borrowers
for the approval of any other Superpriority Claim
(exclusive of the Superpriority Claim in favor of the
Prepetition Lenders, the LC Participants, the LC
Issuer, the Term Lenders, the Administrative Agents
and the Collateral Agent) in any of the Cases which
is pari passu with or senior to the claims of the LC
Agent and the LC Participants against any of the
Borrowers unless after giving effect to the
transactions contemplated by such application all
Obligations and the Prepetition Bank Debt (whether
contingent or otherwise) shall be paid in full in
cash and the DIP Maximum Commitment shall be
terminated, or there shall arise any such
Superpriority Claim;
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(p) Any of the Borrowers shall be unable to pay its
postpetition debts as they mature or shall fail to
comply with any order of the Bankruptcy Court in any
material respect;
(q) Any party to the Restructuring Agreement (other than
any of the Prepetition Lenders) shall breach any of
its obligations under the Restructuring Agreement;
(r) The occurrence of an event of default under any of
the Orders or, when it was in effect, the First
Interim Order or the Second Interim Order; or
(s) Any of the Borrowers shall file a motion in any of
the Cases (i) except as provided in the Orders, to
use cash collateral of the LC Participants or of the
Prepetition Lenders under Section 363(c) of the
Bankruptcy Code without the LC Participants' and the
Prepetition Lenders' consent, (ii) to recover from
any portions of the Collateral any costs or expenses
of preserving or disposing of such Collateral
pursuant to Section 506(c) of the Bankruptcy Code, or
(iii) to take any other action or actions adverse to
the LC Participants or the Prepetition Lenders or
their rights and remedies hereunder or any of the
other Credit Documents or any of the documents
evidencing or creating any of the Prepetition Bank
Debt or the LC Participants' or the Prepetition
Lenders' interest in any of the Collateral; or
(t) Any failure to complete the following actions within
the time periods set forth below:
(i) By the week of December 3, 2002, hearing
held on the adequacy of the disclosure
statement;
(ii) By January 3, 2003, mail solicitation
materials to creditors, Bondholders and the
Enron Parties;
(iii) By February 4, 2003, obtain all ballot and
confirmation and objections to
Reorganization Plan;
(iv) By February 11, 2003, hearing held on
confirmation of Reorganization Plan; and
(v) By March 1, 2003, Reorganization Plan to
become effective.
(u) Any event defined as a "default" or "event of
default" in either SCTSC Purchase Agreements occurs
and the same is not remedied within the applicable
period of grace (if any) provided in such SCTSC
Purchase Agreement.
12. RIGHTS AND REMEDIES. Upon the occurrence and during the continuance of any
Event of Default, the LC Agent, upon the direction of the Majority LC
Participants, shall by
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notice to the Borrower Representative declare all or any portion of the DIP LC
Obligations and other Obligations to be due and payable and/or the commitment to
extend credit to the Borrowers (if not theretofore terminated) to be terminated,
whereupon the full unpaid amount of such Obligations which shall be so declared
due and payable shall be and become immediately due and payable, without further
notice, demand or presentment, and/or, as the case may be, the commitment to
extend credit to the Borrowers shall terminate. In addition pursuant to Section
2.3(a) of the Intercreditor Agreement, if the obligations under the Xxxxxx DIP
Credit Agreement are accelerated as a result of a continuing "Event of Default"
thereunder, the LC Agent, upon the direction of the Majority LC Participants,
shall by notice to the Borrower Representative declare all or any portion of the
Obligations to be due and payable at the same time as the obligations under the
Xxxxxx DIP Credit Agreement, whereupon the full unpaid amount of such
Obligations which shall be so declared due and payable shall be and become
immediately due and payable, without further notice, demand or presentment. In
accordance with the Intercreditor Agreement, the LC Agent shall not exercise
certain of its remedies without the consent of the Required Secured Parties (as
defined in the Intercreditor Agreement).
13. GUARANTY.
(a) Each Guarantor hereby jointly and severally,
irrevocably, absolutely and unconditionally
guarantees to the LC Participants the prompt,
complete and full payment and performance when due,
no matter how the same shall become due, of all
Obligations, including but not limited to:
(i) All obligations of Borrowers to make reimbursements
and other payments to LC Participants in respect of
Letters of Credit issued;
(ii) All other sums payable under this Agreement and the
other Credit Documents, whether for principal,
interest, fees or otherwise; and
(iii) Any and all other Indebtedness, obligations or
Liabilities that may at any time be owed by Borrowers
to the LC Participants, whether incurred heretofore
or hereafter or concurrently herewith, under or
pursuant to any of the Credit Documents, and
including interest, attorneys' fees and collection
costs as may be provided by law or in any instrument
evidencing any such Indebtedness or Liability.
Without limiting the generality of the foregoing, the Guarantors'
liability hereunder shall extend to and include all postpetition
interest, expenses and other Liabilities of Borrowers described above
in this subsection (a), or below in the following subsection (b), which
would be owed by Borrowers but for the fact that they are unenforceable
or not allowable due to the existence of a bankruptcy, reorganization
or similar proceeding involving a Borrower.
(b) If Borrowers shall for any reason fail to pay any
Obligation described in Section 13(a), as and when
such Obligation shall become due and payable, whether
at its stated maturity, as a result of the exercise
of any power to accelerate, or otherwise, the
Guarantors will, forthwith upon demand by
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the LC Agent, pay such Obligation in full to the
Collateral Agent for the account of the LC
Participants.
(c) If any Guarantor fails to pay any obligation as
described in the immediately preceding subsections
(a) or (b), each Guarantor will incur the additional
joint and several obligation to pay to the Collateral
Agent for the account of the LC Agent, and the
Guarantors will forthwith upon demand by the LC Agent
pay to the Collateral Agent for the account of the LC
Agent, the amount of any and all expenses, including
fees and disbursements of the LC Agent's counsel and
of any experts or agents retained by the LC Agent
that the LC Agent may incur as a result of such
failure.
(d) As between the Guarantors and LC Participants, this
guaranty shall be considered a primary and liquidated
Liability of the Guarantors.
(e) Each Guarantor hereby waives all defenses based on
suretyship and agrees that its obligations shall
continue and the enforceability thereof against such
Guarantor shall not be affected by:
(i) any waiver, delay or failure of any LC Participant to
exercise or to exhaust any right or remedy or to
bring any right or remedy or action against the
Borrowers, the Collateral or any other security
available to the LC Participants in connection with
the Obligations;
(ii) any extension, renewal, settlement, compromise,
modification, amendment, consent, waiver or release
in any respect, arising under or in connection with
any of the Obligations;
(iii) the existence of any claim, set-off, or other rights
that any Borrower may have at any time against any
Lender Party, whether in connection with the
Obligations or any unrelated transactions;
(iv) any invalidity or unenforceability relating to or
against any Borrower, for any reason, of any of the
Obligations or any agreement relating thereto;
(v) any Event of Default; or
(vi) any other act or failure to act or delay of any kind
by any Borrower or Lender Party or any other
circumstance whatsoever which might, but for the
provisions hereof, constitute a defense available to,
or a legal or equitable discharge of, the Borrowers.
(f) The obligations of each Guarantor hereunder shall
continue to be effective or be reinstated, as the
case may be, if at any time, payment, or any part
thereof, of any obligation or interest thereon is
rescinded or must otherwise be restored by any Lender
Party in connection with the bankruptcy of the
Borrowers.
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(g) Each Guarantor hereby waives promptness, diligence,
presentment, demand of payment, protest, order and
receipt of any notice in connection with its
obligations hereunder.
14. LC AGENT.
(a) Appointment and Authority. Each Lender Party hereby
irrevocably authorizes the LC Agent, and the LC Agent hereby undertakes, to
receive payments of principal, interest and other amounts due hereunder as
specified herein and to take all other actions and to exercise such powers under
the Credit Documents as are specifically delegated to the LC Agent by the terms
hereof or thereof, together with all other powers reasonably incidental thereto.
The relationship of the LC Agent to the other Lender Parties and, in so far as
such action relates to them, the Prepetition Lenders, is only that of one
commercial lender acting as agent for others, and nothing in the Credit
Documents shall be construed to constitute the LC Agent a trustee or other
fiduciary for any Lender Party and, in so far as such action relates to them,
the Prepetition Lenders, nor to impose on the LC Agent duties and obligations
other than those expressly provided for in the Credit Documents. With respect to
any matters not expressly provided for in the Credit Documents and any matters
that the Credit Documents place within the discretion of the LC Agent, the LC
Agent shall not be required to exercise any discretion or take any action, and
it may request instructions from the Lender Parties with respect to any such
matter, in which case it shall be required to act or to refrain from acting (and
shall be fully protected and free from liability to all Lender Parties in so
acting or refraining from acting) upon the instructions of the Majority LC
Participants (including itself); provided, however, that the LC Agent shall not
be required to take any action that exposes it to a risk of personal liability
that it considers unreasonable or which is contrary to the Credit Documents or
to applicable Law. Upon receipt by the LC Agent from the Borrower Representative
of any communication calling for action on the part of the LC Participants or
upon notice from the Borrower Representative or any LC Participant to the LC
Agent of any Default or Event of Default, the LC Agent shall promptly notify
each other LC Participant thereof.
(b) Exculpation, the LC Agent's Reliance, etc. Neither the LC
Agent nor any of its directors, officers, agents, attorneys or employees shall
be liable for any action taken or omitted to be taken by any of them under or in
connection with the Credit Documents, including their negligence of any kind,
except that each shall be liable for its own gross negligence or willful
misconduct. Without limiting the generality of the foregoing, the LC Agent (i)
may consult with legal counsel (including counsel for the Borrowers),
independent public accountants and other experts selected by it and shall not be
liable for any action taken or omitted to be taken in good faith by it in
accordance with the advice of such counsel, accountants or experts; (ii) makes
no warranty or representation to any other Lender Party or any Prepetition
Lender and shall not be responsible to any other Lender Party or any Prepetition
Lender for any statements, warranties or representations made in or in
connection with the Credit Documents; (iii) shall not have any duty to ascertain
or to inquire as to the performance or observance of any of the terms, covenants
or conditions of the Credit Documents on the part of any Debtor or to inspect
the property (including the books and records) of any Debtor; (iv) shall not be
responsible to any other Lender Party, or any Prepetition Lender for the due
execution, legality, validity, enforceability, genuineness, sufficiency or value
of any Credit Document or any instrument or document furnished in connection
therewith; (v) may rely upon the representations and
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warranties of each Debtor, Lender Party or any Prepetition Lender in exercising
its powers hereunder; and (vi) shall incur no Liability under or in respect of
the Credit Documents by acting upon any notice, consent, certificate or other
instrument or writing (including any facsimile, telegram, cable or telex)
believed by it to be genuine and signed or sent by the proper Person or Persons.
(c) Credit Decisions. Each Lender Party acknowledges that it
has, independently and without reliance upon any other Lender Party, made its
own analysis of the Borrowers and the transactions contemplated hereby and its
own independent decision to enter into this Agreement and the other Credit
Documents. Each Lender Party also acknowledges that it will, independently and
without reliance upon any other Lender Party and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking action under the Credit Documents.
(d) Indemnification. Each LC Participant agrees to indemnify
the LC Agent (to the extent not reimbursed by the Borrowers within ten (10) days
after demand) from and against such LC Participant's Percentage Share of any and
all Liabilities and Costs which to any extent (in whole or in part) may be
imposed on, incurred by or asserted against the LC Agent growing out of,
resulting from or in any other way associated with any of the Collateral, the
Credit Documents and the transactions and events (including the enforcement
thereof) at any time associated therewith or contemplated therein (whether
arising in contract or in tort or otherwise and including any violation or
noncompliance with any Environmental Laws by any Person or any Liabilities or
duties of any Person with respect to Hazardous Materials found in or released
into the environment). The foregoing indemnification shall apply whether or not
such Liabilities and Costs are in any way or to any extent owed, in whole or in
part, under any claim or theory of strict Liability or caused, in whole or in
part, by any negligent act or omission of any kind by the LC Agent; provided,
however, only that no LC Participant shall be obligated under this Section to
indemnify the LC Agent for that portion, if any, of any Liabilities and Costs
proximately caused by the LC Agent's own individual gross negligence or willful
misconduct, as determined in a final judgment. Cumulative of the foregoing, each
LC Participant agrees to reimburse the LC Agent promptly upon demand for such LC
Participant's Percentage Share of any costs and expenses to be paid to the LC
Agent by Borrower under Section 1 to the extent that the LC Agent is not timely
reimbursed for such expenses by Borrower as provided in such section. As used in
this Section the term "THE LC AGENT" shall refer not only to the Person
designated as such in Section 1 but also to each director, officer, agent,
attorney, employee, representative and Affiliate of such Person.
(e) Rights as LC Participant. In its capacity as an LC
Participant, the LC Agent shall have the same rights and obligations as any LC
Participant and may exercise such rights as though it were not the LC Agent. The
LC Agent may accept deposits from, lend money to, act as trustee under
indentures of and generally engage in any kind of business with any Debtor or
their Affiliates, all as if it were not the LC Agent hereunder and without any
duty to account therefor to any other LC Participant.
(f) Sharing of Set-Offs and Other Payments. Each Lender Party
agrees that if it shall, whether through the exercise of rights under any
Security Document or rights of banker's Lien, set off or counterclaim against
any of the Borrowers or otherwise, obtain payment of a
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portion of the aggregate Obligations owed to it which, taking into account all
distributions made by the LC Agent under Section 2(i), causes such Lender Party
to have received more than it would have received had such payment been
distributed by the LC Agent pursuant to Section 2(i), then (i) it shall be
deemed to have simultaneously purchased and shall be obligated to purchase
interests in the Obligations as necessary to cause all Lender Parties to share
all payments and (ii) such other adjustments shall be made from time to time as
shall be equitable to ensure that the LC Agent and all Lender Parties share all
payments of Obligations as provided in Section 2(i); provided, however, that
nothing herein contained shall in any way affect the right of any Lender Party
to obtain payment (whether by exercise of rights of banker's Lien, set-off or
counterclaim or otherwise) of Indebtedness other than the Obligations. The
Borrowers expressly consent to the foregoing arrangements and agree that any
holder of any such interest or other participation in the Obligations, whether
or not acquired pursuant to the foregoing arrangements, may to the fullest
extent permitted by Law and, subject to the Intercreditor Agreement, exercise
any and all rights of banker's Lien, set-off or counterclaim as fully as if such
holder were a holder of the Obligations in the amount of such interest or other
participation. If all or any part of any funds transferred pursuant to this
Section is thereafter recovered from the seller under this Section which
received the same, the purchase provided for in this Section shall be deemed to
have been rescinded to the extent of such recovery, together with interest, if
any, if interest is required pursuant to the order of a Tribunal to be paid on
account of the possession of such funds prior to such recovery.
(g) Investments. Whenever the LC Agent in good faith
determines that it is uncertain about how to distribute to the Lender Parties,
any funds that it has received, or whenever the LC Agent in good faith
determines that there is any dispute among the Lender Parties about how such
funds should be distributed, the LC Agent may choose to defer distribution of
the funds that are the subject of such uncertainty or dispute. If the LC Agent
in good faith believes that the uncertainty or dispute will not be promptly
resolved, or if the LC Agent is otherwise required to invest funds pending
distribution to the Lender Parties, the LC Agent shall invest such funds pending
distribution, and all interest on any such Investment shall be distributed upon
the distribution of such Investment in the same proportion and to the same
Persons as such Investment. All moneys received by the LC Agent for distribution
to the Lender Parties (other than to the Person who is the LC Agent in its
separate capacity as Lender Party) shall be held by the LC Agent pending such
distribution solely as the LC Agent for such Lender Parties, and the LC Agent
shall have no equitable title to any portion thereof.
(h) Benefit of this Section. The provisions of this Section
are intended solely for the benefit of the Lender Parties and, in so far as such
provisions relate to them, the Prepetition Lenders, and no Debtor shall be
entitled to rely on any such provision or assert any such provision in a claim
or defense against any LC Participant (other than in relation to the reference
to the Intercreditor Agreement contained in Section 14(f)). The Lender Parties
may waive or amend such provisions as they desire without any notice to or
consent of Borrower or any other Debtor.
(i) Resignation. The LC Agent may resign at any time by giving
written notice thereof to the LC Participants and the Borrower Representative.
Each such notice shall set forth the date of such resignation. Upon any such
resignation, the Majority LC Participants shall have the right to appoint a
successor LC Agent. A successor must be appointed for any retiring
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LC Agent, and such LC Agent's resignation shall become effective when such
successor accepts such appointment. If, within 30 days after the date of the
retiring LC Agent's resignation, no successor LC Agent has been appointed and
has accepted such appointment, then the retiring LC Agent may appoint a
successor LC Agent, which shall be a commercial bank organized or licensed to
conduct a banking or trust business under the Laws of the United States of
America or of any state thereof. Upon the acceptance of any appointment as the
LC Agent hereunder by a successor LC Agent, the retiring LC Agent shall be
discharged from its duties and obligations under this Agreement and the other
Credit Documents. After any retiring LC Agent's resignation hereunder, the
provisions of this Section shall continue to inure to its benefit as to any
actions taken or omitted to be taken by it while it was the LC Agent under the
Credit Documents.
(j) Other Lender Parties. None of the Lender Parties in such
capacities, other than the LC Agent in such capacity, shall have any duties or
responsibilities or incur any liabilities in their respective agency capacities
(as opposed to their respective capacities as LC Participants or LC Issuer, as
applicable) under or in connection with this Agreement or under any of the other
Credit Documents. The relationship between the Borrowers, on the one hand, and
the LC Agent and such other Lender Parties, on the other hand, shall be solely
that of borrower and lender. The LC Agent, the Lender Parties and the
Prepetition Lenders shall not have any fiduciary responsibilities to the
Borrowers or any of their Affiliates. The LC Agent, the Lender Parties and the
Prepetition Lenders do not undertake any responsibility to the Borrowers or any
of their Affiliates to review or inform any of the Borrowers of any matter in
connection with any phase of any the Borrowers' or their Affiliate's business or
operations.
15. ASSIGNMENTS AND PARTICIPATIONS.
(a) None of the Debtors may, without the consent of the
LC Agent, assign or delegate any of its respective
rights or obligations under this Agreement or any
other Credit Document. Each LC Participant may,
without the consent of any other Lender Party or any
Debtor, assign any or all of its rights and
obligations under this Agreement to any Eligible
Assignee, provided, that such assignment include (i)
the agreement of the assignee to be bound by the
terms of the Restructuring Agreement and (ii) such
assignment shall include the assignment of the same
percentage of the Prepetition Bank Debt as the LC
Participant's Percentage Share of the DIP Maximum
Commitment.
(b) Upon execution and delivery of any assignment
permitted hereunder, from and after the closing date
specified in the assignment, (i) the assignee
thereunder shall be a party hereto and, to the extent
that rights and obligations hereunder have been
assigned to it pursuant to such assignment, have the
rights and obligations as an LC Participant hereunder
and (ii) the assignor LC Participant shall, to the
extent that rights and obligations hereunder have
been assigned by it pursuant to such assignment,
relinquish its rights and be released from its
obligations under this Agreement (and, in the case of
an assignment covering all of such LC
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Participant's rights and obligations under this
Agreement, such LC Participant shall cease to be a
party hereto).
(c) By executing and delivering an assignment, the
assignor LC Participant and the assignee thereunder
confirm to and agree with each other and the other
parties hereto as follows: (i) other than as provided
in such assignment, such LC Participant makes no
representation or warranty and assumes no
responsibility with respect to any statements,
warranties or representations made in or in
connection with this Agreement or any other Credit
Document or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of
this Agreement or any other Credit Document or any
other instrument or document furnished pursuant
hereto; (ii) such LC Participant makes no
representation or warranty and assumes no
responsibility with respect to the financial
condition of any Debtor or the performance or
observance by any Debtor of any of its obligations
under this Agreement or any other Credit Document or
any other instrument or document furnished pursuant
hereto; (iii) such assignee confirms that it has
received a copy of this Agreement, and such other
Credit Documents and other documents and information
as it has deemed appropriate to make its own credit
analysis and decision to enter into such assignment;
(iv) such assignee will, independently and without
reliance upon such LC Participant and based on such
documents and information as it shall deem
appropriate at the time, continue to make its own
credit decisions in taking or not taking action under
this Agreement; and (v) such assignee agrees that it
will perform in accordance with their terms all of
the obligations which by the terms of this Agreement
are required to be performed by it as an LC
Participant.
(d) Upon its receipt of an assignment executed by an LC
Participant and an assignee, the LC Agent shall give
prompt notice thereof to the Borrower Representative.
(e) The LC Agent shall maintain a copy of each assignment
delivered to it and a register for the recordation of
the names and addresses of each assignee and, with
respect to the LC Participants, the principal amount
owing to each LC Participant from time to time (the
"REGISTER"). The entries in the Register shall be
conclusive and binding for all purposes, absent
manifest error, and the Borrower Representative and
each LC Participant may treat each person,
corporation, partnership, limited liability company
or other entity whose name is recorded in the
Register as an LC Participant hereunder for the
purposes of this Agreement. The Register shall be
available for inspection by the Borrower
Representative or any LC Participant at any
reasonable time and from time to time upon reasonable
prior notice.
(f) Any LC Participant may sell participations to one or
more Assignees in or to all or a portion of its
rights and obligations under this Agreement;
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provided, however, that (i) such LC Participant's
obligations under this Agreement shall remain
unchanged, (ii) such LC Participant shall remain
solely responsible to the other parties hereto for
the performance of such obligations, (iii) the
Borrower Representative shall continue to deal solely
and directly with such LC Participant in connection
with such LC Participant's rights and obligations
under this Agreement and (iv) in any proceeding under
any bankruptcy, insolvency or similar proceeding in
respect of any Borrower or any other Debtor, such LC
Participant shall remain and be, to the fullest
extent permitted by law, the sole representative with
respect to the rights and obligations held in the
name of such LC Participant (whether such rights or
obligations are for such LC Participant's own account
or for the account of any participant).
(g) Each LC Participant may, in connection with any
assignment or participation or proposed assignment or
participation pursuant to this Section, disclose to
the assignee or participant or proposed assignee or
participant any information relating to the Debtors
or their Affiliates furnished to such LC Participant
by or on behalf of the Debtors, provided, that such
assignees have agreed to be bound by the
confidentiality provisions in Section 17(p).
16. INDEMNIFICATION.
(a) Subject to Section 16(b) and the prosecution of
Avoidance Actions, the Debtors, on a joint and
several basis, shall indemnify each Lender Party on
demand against any and all Liabilities, costs and
claims which to any extent (in whole or in part) may
be imposed on, incurred by or asserted against any
Lender Party growing out of, resulting from or in any
other way associated with:
(i) any LC Issuer's compliance with a completed Letter of
Credit Request that the Borrower Representative
provides to any LC Issuer by facsimile, telecopier or
similar means of electronic transmission and that
such LC Issuer believes to be genuine;
(ii) any LC Issuer's issuance of or performance under any
Letter of Credit;
(iii) any cash management arrangements with respect to
agency accounts and lockbox accounts maintained by
any of the Borrowers with any Person; and
(iv) any of the Collateral, the Credit Documents, the
Prepetition Credit Agreement, the Restructuring
Agreement, the Reorganization Plan, and the
transactions and events (including the enforcement or
defense thereof) at any time associated therewith or
contemplated therein, whether arising in contract or
in tort or otherwise and including any violation or
noncompliance with any Environmental Laws by any
Lender Party or any
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other Person or any Liabilities or duties of any
Lender Party or any other Person with respect to
Hazardous Materials found in or Released into the
environment.
(b) The foregoing indemnification shall apply whether or
not such Liabilities, costs and claims are in any way
or to any extent owed, in whole or in part, under any
claim or theory of strict liability or caused, in
whole or in part, by any negligent act or omission of
any kind by any Lender Party; provided, however, only
that Lender Party shall not be entitled under this
Section to receive indemnification for that portion,
if any, of any Liabilities, costs and claims
proximately caused by its own individual gross
negligence or willful misconduct, as determined in a
final judgment. If any Person (including any Debtor
or any of its Affiliates) ever alleges such gross
negligence or willful misconduct by Lender Party, the
indemnification provided for in this Section shall
nonetheless be paid upon demand, subject to later
adjustment or reimbursement, until such time as a
court of competent jurisdiction enters a final
judgment as to the extent and effect of the alleged
gross negligence or willful misconduct. As used in
this Section the term "Lender Party" shall refer not
only to Lender Party but also to each director,
officer, agent, attorney, employee, representative
and affiliate of such Lender Party.
(c) The Debtors further agree to indemnify on a joint and
several basis each of the LC Agent's Special Counsel
and KPMG and their respective personnel from, and to
hold each of the LC Agent's Special Counsel and KPMG
and their respective personnel harmless against, any
and all claims, liabilities, costs and expenses
relating to the services rendered by KPMG as special
financial advisor to the LC Agent's Special Counsel
in connection with the LC Agent's Special Counsel's
representation of the LC Agent on matters relating to
this Agreement and the Credit Documents and the
Cases, except to the extent finally determined to
have resulted from the willful misconduct, gross
negligence or fraudulent behavior as determined in a
final non-appealable judgment of the LC Agent's
Special Counsel or (as the case may be ) KPMG
relating to such services. Each of the LC Agent's
Special Counsel and KPMG may rely upon the provisions
contained in this Section 16(c) although such Person
is not a party to this Agreement.
17. MISCELLANEOUS.
(a) All Exhibits and Schedules attached to or referred to
in this Agreement are a part hereof for all purposes.
Reference is hereby made to the Security Schedule for
the meaning of certain terms defined therein and used
but not defined herein, which definitions are
incorporated herein by reference.
(b) Unless the context otherwise requires or unless
otherwise provided herein the terms defined in this
Agreement that refer to a particular agreement,
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instrument or document also refer to and include all
renewals, extensions, modifications, amendments and
restatements of such agreement, instrument or
document; provided, however, that nothing contained
in this Section shall be construed to authorize any
such renewal, extension, modification, amendment or
restatement.
(c) All references in this Agreement to Exhibits,
Schedules, Articles, Sections, subsections and other
subdivisions refer to the Exhibits, Schedules,
Articles, Sections, subsections and other
subdivisions of this Agreement unless expressly
provided otherwise. Titles appearing at the beginning
of any subdivisions are for convenience only and do
not constitute any part of such subdivisions and
shall be disregarded in construing the language
contained in such subdivisions. The words "this
Agreement," "this instrument," "herein," "hereof,"
"hereby," "hereunder" and words of similar import
refer to this Agreement as a whole and not to any
particular subdivision unless expressly so limited.
The phrases "this Section" and "this subsection" and
similar phrases refer only to the Sections or
subsections hereof in which such phrases occur. The
word "or" is not exclusive, and the word "including"
(in its various forms) means "including, without
limitation." Pronouns in masculine, feminine and
neuter genders shall be construed to include any
other gender, and words in the singular form shall be
construed to include the plural and vice versa,
unless the context otherwise requires.
(d) All calculations under the Credit Documents of
interest and fees shall be made on the basis of
actual days elapsed (including the first day but
excluding the last) and a year of 360 days. Each
determination by Lender Party of amounts to be paid
under Section 3 or any other matters that are to be
determined hereunder by Lender Party shall, in the
absence of manifest error, be conclusive and binding.
Unless otherwise expressly provided herein or unless
the Majority LC Participants otherwise consent, all
financial statements and reports furnished to any
Lender Party hereunder shall be prepared and all
financial computations and determinations pursuant
hereto shall be made in accordance with GAAP as in
effect at the Closing Date.
(e) Notwithstanding that the Collateral Agent, whether on
its own behalf and/or on behalf of others, may
continue to hold the Collateral, and regardless of
the value thereof, each Debtor shall be and remain
liable for the payment in full, including principal
and interest, of any balance of the Obligations and
expenses hereunder at any time unpaid.
(f) Each Debtor hereby expressly waives demand,
presentment, protest, notice of protest and notice of
dishonor with respect to any and all instruments and
commercial paper included in or evidencing any of the
Obligations or the Collateral, and any and all other
demands and notices of any kind or nature whatsoever
with respect to the Obligations, the
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Collateral, this Agreement and the other Credit
Documents, except such as are expressly provided for
herein or therein.
(g) Under no circumstances shall any Lender Party be
deemed to have assumed any responsibility for or
obligation or duty of any nature or kind with respect
to any Collateral, or any matter or proceedings
arising out of or relating thereto, but the same
shall be at the sole risk of Debtors at all times.
The Debtors hereby release each Lender Party from any
claims, causes of action and demands at any time
arising out of, relating to or with respect to this
Agreement, the other Credit Documents, the
Obligations, the Collateral and/or any actions taken
or omitted to be taken by any Lender Party with
respect thereto, and the Debtors hereby agree jointly
and severally to indemnify and hold each LC
Participant harmless from and with respect to any and
all such claims, Liabilities, causes of action and
demands by any Person.
(h) Subject to Section 14(f), upon the occurrence and
during the continuance of any Event of Default
hereunder, each LC Participant is hereby authorized
at any time and from time to time, to the fullest
extent permitted by law, to set off and apply any and
all deposits (general or special, time or demand,
provisional or final) at any time held and other
Indebtedness at any time owing by such LC Participant
to or for the credit or the account of any Debtor
against any and all of the Obligations which are then
liquidated and matured. Such LC Participant agrees
promptly to notify the LC Agent and the Borrower
Representative after any such set-off and application
is made by such LC Participant; provided, however,
that the failure to give such notice shall not affect
the validity of such set-off and application. The
rights of the LC Participants under this Section are
in addition to other rights and remedies (including,
without limitation, other rights of set-off) which
the LC Participants may have.
(i) No LC Participant shall be liable to any Debtor for
(i) the performance of any transaction between any
Debtor or one or more of its Affiliates and a
Beneficiary that underlies a Letter of Credit, (ii)
any act or omission of any Person unless due to the
gross negligence or willful misconduct of such LC
Participant, such LC Participant's own branches or
such LC Participant's agents, (iii) loss or
destruction of any draft, demand, or document in
transit or in the possession of others unless due to
the gross negligence or willful misconduct of such LC
Participant, such LC Participant's own branches or
such LC Participant's agents, (iv) lack of knowledge
of any particular trade usage (other than standard
banking usage as used in the normal course of
business) unless such lack of knowledge is due to the
gross negligence or willful misconduct of such LC
Participant, such LC Participant's own branches or
such LC Participant's agents, or (v) the genuineness,
falsification, or effect of any document which
appears on due examination to be regular on its face.
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(j) The Debtors agree that no LC Participant, its
Affiliates or its correspondents shall be responsible
for: (i) the failure of any Letter of Credit Request
to bear any reference to any Letter of Credit, or
inadequate reference in any Letter of Credit Request
to the relevant Letter of Credit, or failure of
documents (other than documents expressly required to
be presented under the relevant Letter of Credit) to
accompany any Letter of Credit Request at
negotiation, or failure of any Person to note the
amount of any Letter of Credit Request on the reverse
of the relevant Letter of Credit, or to surrender or
to take up any Letter of Credit or to forward
documents apart from Letter of Credit Requests as
required by the terms of the relevant Letter of
Credit, each of which provisions, if contained in any
Letter of Credit itself, may be waived by LC Issuer;
(ii) errors, omissions, interruptions or delays in
transmissions, or delivery of any messages, by mail,
facsimile, telex, cable, telegraph, wireless or other
teletransmission or by oral instructions, whether or
not they may be in cipher; (iii) the existence,
character, quality, quantity, condition, packing,
value or delivery of any property purporting to be
represented by documents; (iv) any difference in
character, quality, quantity, condition, packing,
value or delivery of such property from that
expressed in documents; (v) any breach of contract
between any Debtor and any Beneficiary or any other
Person or any dispute as to the use which may be made
of any Letter of Credit or funds obtained thereunder
by any Beneficiary or other party; (vi) the validity,
sufficiency, or genuineness of any Letter of Credit
Request or other document; and (vii) the time, place,
manner or order in which shipment is made.
(k) No LC Participant shall be responsible for any act,
error, neglect or default, omission, insolvency or
failure in business of its correspondents.
(l) The occurrence of any one or more of the
contingencies or events referred to in the U.C.P. or
in the preceding clauses of Sections 17(j) and (k)
shall not affect, impair, or prevent the vesting of
any LC Participant's rights or powers hereunder or
the enforceability of any Obligations.
(m) This Agreement, the Credit Documents and all the
transactions contemplated thereby shall be governed
by and construed in accordance with the laws of the
State of New York, without regard to choice of law
principles.
(n) Each Debtor hereby irrevocably and unconditionally
submits, for itself and its property, to the
nonexclusive jurisdiction of the Bankruptcy Court
and/or the courts of New York State or federal court
of the United States of America sitting in New York
City, whether trial or appellate, in any action or
proceeding arising out of, or relating to, this
Agreement, or for recognition or enforcement of any
judgment in respect thereof, and each Debtor hereby
irrevocably and unconditionally agrees that all
claims in respect of any such action or proceeding
may be heard and determined in
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the Bankruptcy Court and/or any such New York State
court or, to the extent permitted by law, in such
federal court and consents that any such action or
proceeding may be brought in such courts and waives
to the fullest extent permitted by law any objection
or claim that it may now or hereafter have to the
venue of any such action or proceeding in any such
court or that such action or proceeding was brought
in an inconvenient court and agrees not to plead or
claim the same. Each Debtor hereby agrees that a
final judgment in any such action or proceeding shall
be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other
manner provided by law. Nothing in this Agreement
shall affect any right that any party may otherwise
have to bring any action or proceeding relating to
this Agreement in the courts of any jurisdiction.
EACH DEBTOR HEREBY IRREVOCABLY WAIVES ALL RIGHT TO
TRIAL BY JURY IN ANY ACTION, PROCEEDING OR
COUNTERCLAIM ARISING OUT OF, OR RELATING TO, THIS
AGREEMENT OR ANY OTHER CREDIT DOCUMENT OR THE ACTIONS
OF ANY LENDER PARTY IN THE NEGOTIATION,
ADMINISTRATION, PERFORMANCE OR ENFORCEMENT THEREOF.
(o) The U.C.P. shall be binding upon Borrower and each LC
Issuer with respect to each Letter of Credit issued
by LC Issuer except to the extent otherwise expressly
agreed, if any.
(p) The LC Agent and each LC Issuer may rely on the
written notices, requests, waivers and consents of
the Borrower Representative, its officers and
designated agents, including, without limitation, any
Letter of Credit Requests, as the binding actions of
Borrower hereunder. Any such notices, requests,
waivers or consents received by the LC Agent and each
LC Issuer from the Borrower Representative on behalf
of Borrower hereunder shall be deemed to have been
sent by Borrower, and all notices and other
information furnished by the LC Agent or any LC
Issuer to the Borrower Representative hereunder will
be received by the Borrower Representative on behalf
of Borrower. In addition, the LC Agent and each LC
Issuer may receive from the Borrower Representative,
on behalf of Borrower, all amounts required to be
paid by Borrower and may pay to the Borrower
Representative for Borrower's account, all amounts
required to be paid by or on behalf of any LC
Participant to Borrower; provided, however, that
neither the LC Agent nor any LC Issuer shall have any
responsibility to inquire as to the application of
such amounts by the Borrower Representative and is
hereby released from any liability to Borrower or any
other Debtor arising from such application by the
Borrower Representative.
(q) Each Lender Party agrees (on behalf of itself and
each of its Affiliates, and each of its and their
directors, officers, agents, attorneys, employees and
representatives) that it (and each of them) will take
all reasonable steps to
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keep confidential any non-public information supplied
to it by or at the direction of any Debtor; provided,
however, that this restriction shall not apply to
information which (i) has at the time in question
entered the public domain, (ii) is required to be
disclosed by Law (whether valid or invalid) of any
Tribunal, (iii) is disclosed to any of its
Affiliates, auditors, attorneys or agents, (iv) is
furnished to any other Lender Party or to any
assignee or prospective assignee of, or purchaser or
prospective purchaser of participations or other
interests in, any interest under the Credit Documents
(provided each such assignee or prospective assignee
or purchaser or prospective purchaser first agrees to
hold such information in confidence on the terms
provided in this Section), or (v) is disclosed in the
course of enforcing its rights and remedies following
the occurrence of an Event of Default.
(r) Each of the Debtors acknowledges and agrees that,
upon the expiration of 30 days after the Filing Date,
(i) it has no claim or cause of action (including
without limitation, Avoidance Actions) against the
Prepetition Agent or the Prepetition Lenders (or any
of the Prepetition Agent's or the Prepetition
Lenders' directors, officers, employees or agents),
(ii) it has no offset right, counterclaim or defense
of any kind against any of its obligations,
indebtedness or liabilities to the Prepetition Agent
or the Prepetition Lenders, (iii) the Prepetition
Agent and the Prepetition Lenders have valid first
priority perfected liens on the "Collateral" under
and as defined in the Prepetition Credit Agreement
and that there have been no past conditions, acts,
omissions, events, circumstances or matters which
have impaired or adversely affected any of the
Prepetition Agent's or Prepetition Lenders' rights
interest and title with respect to such "Collateral"
under and as defined in the Prepetition Credit
Agreement, and (iv) the Prepetition Agent and the
Prepetition Lenders have properly performed and
satisfied in a timely manner all of their obligations
to the Debtors.
(s) Waivers and Amendments; Acknowledgments.
(i) No failure or delay (whether by course of conduct or
otherwise) by any LC Participant in exercising any
right, power or remedy which such Lender Party may
have under any of the Credit Documents shall operate
as a waiver thereof or of any other right, power or
remedy, nor shall any single or partial exercise by
any Lender Party of any such right, power or remedy
preclude any other or further exercise thereof or of
any other right, power or remedy. No waiver of any
provision of any Credit Document and no consent to
any departure therefrom shall ever be effective
unless it is in writing and signed as provided below
in this Section, and then such waiver or consent
shall be effective only in the specific instances and
for the purposes for which given and to the extent
specified in such writing. No notice to or demand on
any Debtor shall in any case of itself entitle any
Debtor to any other or further notice or demand in
similar or other
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circumstances. This Agreement and the other Credit
Documents set forth the entire understanding among
the parties hereto with respect to the transactions
contemplated herein and therein and supersede all
prior discussions and understandings with respect to
the subject matter hereof and thereof, and no waiver,
consent, release, modification or amendment of or
supplement to this Agreement or the other Credit
Documents shall be valid or effective against any
party hereto unless the same is in writing and signed
by (A) if such party is a Debtor, by such party, (B)
if such party is the LC Agent or an LC Issuer, by
such party and (C) if such party is an LC
Participant, by such LC Participant or by the LC
Agent with the consent of the Majority LC
Participants. Notwithstanding the foregoing or
anything to the contrary herein, the LC Agent shall
not, without the prior consent of each individual
Lender Party, execute and deliver on behalf of such
Lender Party any waiver or amendment that would: (A)
increase the Percentage Share of any LC Participant
or the maximum amount any such LC Participant is
committed to fund in respect of DIP LC Obligations or
subject such LC Participant to any additional
obligations, (B) reduce any fees payable to such LC
Participant hereunder, (C) change any date fixed for
any payment of any such fees, (D) amend the
definition herein of "Borrowing Base" or any of the
terms used in that definition, (E) amend the
definition herein of "Majority LC Participants" or
otherwise change the aggregate amount of Percentage
Shares required for the LC Agent, the LC Participants
or any of them to take any particular action under
the Credit Documents, (F) release Borrower from its
requirement to pay the Obligations or any Guarantor
from its guaranty of such payment, or (G) except as
otherwise expressly provided for in Section 10(c),
release any Collateral. In addition, the LC Agent
shall not without the "Majority LC Participants"
under and as defined in the Prepetition Credit
Agreement modify any express representation,
warranty, covenant or condition precedent in favor of
the Prepetition Lenders under this Agreement.
(ii) Each Borrower hereby represents, warrants,
acknowledges and admits that (A) it has been advised
by counsel in the negotiation, execution and delivery
of the Credit Documents to which it is a party, (B)
it has made an independent decision to enter into
this Agreement and the other Credit Documents to
which it is a party, without reliance on any
representation, warranty, covenant or undertaking by
the LC Agent, any Lender Party, the Prepetition Agent
or any Prepetition Lender (C) there are no
representations, warranties, covenants, undertakings
or agreements by any Lender Party as to the Credit
Documents, (D) no Lender Party has any fiduciary
obligation toward any Debtor with respect to any
Credit Document or the transactions contemplated
thereby, (E) the relationship pursuant to the Credit
Documents between Borrower and the other Debtors, on
one hand, and each Lender Party, on the other hand,
is and shall be solely that of debtor and creditor,
respectively, (F) no partnership or joint venture
exists with respect to the Credit Documents between
any Debtor and any Lender Party, (G) the LC Agent is
not Borrowers' agent,
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but the LC Agent for LC Participants, (H) should an
Event of Default or Default occur or exist, each
Lender Party will determine in its sole discretion
and for its own reasons what remedies and actions it
will or will not exercise or take at that time, (I)
without limiting any of the foregoing, Borrower is
not relying upon any representation or covenant by
any Lender Party, or any representative thereof, and
no such representation or covenant has been made,
that any Lender Party will, at the time of an Event
of Default or Default, or at any other time, waive,
negotiate, discuss or take or refrain from taking any
action permitted under the Credit Documents with
respect to any such Event of Default or Default or
any other provision of the Credit Documents and (J)
all Lender Parties have relied upon the truthfulness
of the acknowledgments in this Section in deciding to
execute and deliver this Agreement and to become
obligated hereunder.
(t) The Lender Parties, the Debtors and any other parties
to the Credit Documents intend to contract in strict
compliance with applicable usury Law from time to
time in effect. In furtherance thereof such Persons
stipulate and agree that none of the terms and
provisions contained in the Credit Documents shall
ever be construed to create a contract to pay, for
the use, forbearance or detention of money, interest
in excess of the maximum amount of interest permitted
to be contracted for, charged or received by
applicable Law from time to time in effect. Neither
any Debtor nor any present or future guarantors,
endorsers or other Persons hereafter becoming liable
for payment of any Obligation shall ever be liable
for unearned interest thereon or shall ever be
required to pay interest thereon in excess of the
maximum amount that may be lawfully contracted for,
charged or received under applicable Law from time to
time in effect, and the provisions of this Section
shall control over all other provisions of the Credit
Documents that may be in conflict or apparent
conflict herewith. The Lender Parties expressly
disavow any intention to contract for, charge or
receive excessive unearned interest or finance
charges in the event the maturity of any Obligation
is accelerated. If (i) the maturity of any Obligation
is accelerated for any reason, (ii) any Obligation is
prepaid and as a result any amounts held to
constitute interest are determined to be in excess of
the legal maximum or (iii) any LC Participant or any
other holder of any or all of the Obligations shall
otherwise collect moneys that are determined to
constitute interest which would otherwise increase
the interest on any or all of the Obligations to an
amount in excess of that permitted to be contracted
for, charged or received by applicable Law then in
effect, then all sums determined to constitute
interest in excess of such legal limit shall, without
penalty, be promptly applied to reduce the then
outstanding principal of the related Obligations or,
at such LC Participant's or holder's option, promptly
returned to Borrower or other payor thereof upon such
determination. In determining whether or not the
interest paid or payable, under any specific
circumstance, exceeds the maximum amount permitted
under applicable Law, the Lender Parties and
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the Debtors (and any other payors thereof) shall to
the greatest extent permitted under applicable Law,
(i) characterize any non-principal payment as an
expense, fee or premium rather than as interest, (ii)
exclude voluntary prepayments and the effects thereof
and (iii) amortize, prorate, allocate and spread the
total amount of interest throughout the entire
contemplated term of the instruments evidencing the
Obligations in accordance with the amounts
outstanding from time to time thereunder and the
maximum legal rate of interest from time to time in
effect under applicable Law in order to lawfully
charge the maximum amount of interest permitted under
applicable Law. In the event applicable Law provides
for an interest ceiling under Chapter 303 of the
Texas Finance Code (the "TEXAS FINANCE CODE") as
amended, to the extent that the Texas Finance Code is
mandatorily applicable to any LC Participant, for
that day, the ceiling shall be the "weekly ceiling"
as defined in the Texas Finance Code; provided,
however, that if any applicable Law permits greater
interest, the Law permitting the greatest interest
shall apply. In no event shall Chapter 346 of the
Texas Finance Code apply to this Agreement, any other
Credit Document or any transactions or loan
arrangement provided or contemplated hereby or
thereby.
(u) The Debtors and the Lender Parties mutually hereby
knowingly, voluntarily and intentionally waive the
right to a trial by jury in respect of any claim
based hereon, arising out of, under or in connection
with this Agreement or any other Credit Documents
contemplated to be executed in connection herewith or
any course of conduct, course of dealings, statements
(whether oral or written) or actions of any party.
This waiver constitutes a material inducement for the
Lender Parties to enter into this Agreement and the
other Credit Documents and to make Extensions of
Credit. Each Debtor and each Lender Party hereby
further (i) irrevocably waives, to the maximum extent
not prohibited by law, any right it may have to claim
or recover in any such litigation any Special
Damages, as defined below, (ii) certifies that no
party hereto nor any representative or agent or
counsel for any party hereto has represented,
expressly or otherwise, or implied that such party
would not, in the event of litigation, seek to
enforce the foregoing waivers and (iii) acknowledges
that it has been induced to enter into this
Agreement, the other Credit Documents and the
transactions contemplated hereby and thereby by,
among other things, the mutual waivers and
certifications contained in this Section. "SPECIAL
DAMAGES" includes all special, consequential,
exemplary or punitive damages (regardless of how
named), but does not include any payments of funds
that any party hereto has expressly promised to pay
or deliver to any other party hereto.
(v) All of the Debtors' various representations,
warranties, covenants and agreements in the Credit
Documents shall survive the execution and delivery of
this Agreement and the other Credit Documents and the
performance hereof and thereof, including the
delivery of the Credit
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Documents and shall further survive until all of the
Obligations are paid in full in cash to each Lender
Party and all of the Lender Parties' obligations to
Borrower are terminated. All statements and
agreements contained in any certificate or other
instrument delivered by any Debtor to any Lender
Party under any Credit Document shall be deemed
representations and warranties by Borrower or
agreements and covenants of Borrower under this
Agreement. The representations, warranties,
indemnities and covenants made by the Debtors in the
Credit Documents, and the rights, powers and
privileges granted to the Lender Parties in the
Credit Documents, are cumulative and, except for
expressly specified waivers and consents, no Credit
Document shall be construed in the context of another
to diminish, nullify or otherwise reduce the benefit
to any Lender Party of any such representation,
warranty, indemnity, covenant, right, power or
privilege. In particular and without limitation, no
exception set out in this Agreement to any
representation, warranty, indemnity or covenant
herein contained shall apply to any similar
representation, warranty, indemnity or covenant
contained in any other Credit Document, and each such
similar representation, warranty, indemnity or
covenant shall be subject only to those exceptions
that are expressly made applicable to it by the terms
of the various Credit Documents.
(w) Intercreditor Agreement. Each of the LC Issuer, LC
Participants, the LC Agent and the Collateral Agent
acknowledges and agrees that the rights and
obligations of such parties under this Agreement are
subject in all respects to the Intercreditor
Agreement.
[Remainder of page intentionally left blank.]
-85-
IN WITNESS WHEREOF, the parties hereto have executed this Debtor In
Possession Letter of Credit and Security Agreement as of the day and year first
above written.
EOTT ENERGY OPERATING LIMITED PARTNERSHIP,
as a Borrower and as the Borrower Representative
By: EOTT ENERGY GENERAL PARTNER, L.L.C., its General
Partner
By: /s/ Xxxxx Xxxxx
--------------------------------------
Name: Xxxxx Xxxxx
Title: Treasurer
EOTT ENERGY CANADA LIMITED PARTNERSHIP,
as a Borrower
By: EOTT ENERGY GENERAL PARTNER, L.L.C., its General
Partner
By: /s/ Xxxxx Xxxxx
--------------------------------------
Name: Xxxxx Xxxxx
Title: Treasurer
EOTT ENERGY LIQUIDS, L.P.,
as a Borrower
By: EOTT ENERGY GENERAL PARTNER, L.L.C., its General
Partner
By: /s/ Xxxxx Xxxxx
--------------------------------------
Name: Xxxxx Xxxxx
Title: Treasurer
-86-
EOTT ENERGY PIPELINE LIMITED PARTNERSHIP,
as a Borrower
By: EOTT ENERGY GENERAL PARTNER, L.L.C., its
General Partner
By: /s/ Xxxxx Xxxxx
--------------------------------------
Name: Xxxxx Xxxxx
Title: Treasurer
EOTT ENERGY PARTNERS, L.P.,
as a Guarantor
By: EOTT ENERGY CORP., its General Partner
By: /s/ Xxxxx Xxxxx
--------------------------------------
Name: Xxxxx Xxxxx
Title: Treasurer
EOTT ENERGY GENERAL PARTNER, L.L.C.,
as a Guarantor
By: /s/ Xxxxx Xxxxx
--------------------------------------
Name: Xxxxx Xxxxx
Title: Treasurer
Address for each Debtor:
Attention: Vice President & General Counsel
By courier: 0000 X. Xxx Xxxxxxx Xxxxxxx,
Xxxxx 000
Xxxxxxx, Xxxxx 00000
By mail: X.X. Xxx 0000
Xxxxxxx, Xxxxx 00000-0000
Phone: 000-000-0000
Fax: 000-000-0000
-87-
STANDARD CHARTERED BANK,
as LC Agent, LC Issuer, an LC Participant and as
Collateral Agent
By:
--------------------------------
Name: Xxxxx X. Xxx
Title: Senior Vice President
By:
--------------------------------
Name: Xxxx XxXxxxxx
Title: Senior Vice President
Address:
Special Assets Management
Xxx Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000-0000
-88-
SCHEDULE I
DISCLOSURE SCHEDULE
SCHEDULE II
LC PARTICIPANT SCHEDULE
SCHEDULE III
SECURITY SCHEDULE
SCHEDULE IV
DESIGNATED CUSTOMERS
EXHIBIT A
LETTER OF CREDIT REQUEST
EOTT ENERGY OPERATING LIMITED PARTNERSHIP
X.X. XXX 0000
XXXXXXX, XXXXX 00000-0000
Date: [ ]
-----------------
To: [ ]
-----------------
Standard Chartered Bank
Fax No.: 000-000-0000
000-000-0000
From: [ ]
-----------------
Phone: 713/000-0000
Fax: 713/000-0000
Subject: Letter of Credit Request
Please [issue] [amend] the following irrevocable standby Letter of Credit:
Applicant:
Beneficiary: [ ]
-----------------
Address: [ ]
-----------------
Phone: [ ]
-----------------
Fax: [ ]
-----------------
Dollar Value: $[ ] USD Maximum
-----------------
Expiration Date: [ ]
-----------------
Conditions for Drawing(s): [Insert Conditions for Drawing(s)]
Special Conditions: [Insert Special Conditions]
Special Instructions: [Insert Special Instructions]
To induce the LC Participants to issue, amend or extend the Letter of
Credit, the Borrowers hereby represent, warrant, acknowledge and agree to and
with the LC Issuer, the LC Agent and each LC Participant that:
1. The manager or officer of EOTT General Partner, L.L.C. ("EOTT GP")
signing this instrument is the duly elected, qualified and acting
manager or officer of EOTT GP as indicated below such manager's or
officer's signature hereto, having all necessary authority to act for
EOTT GP in its capacity as the sole General Partner of the Borrower
Representative in making the request on behalf of the Borrowers herein
contained.
2. The representations and warranties of the Guarantors and the Borrowers
set forth in the Debtor in Possession
Letter of Credit Agreement, dated
as of October 18, 2002 (as from time to time amended, the "AGREEMENT"),
among EOTT Energy Operating Limited Partnership ("EOTT OLP"), EOTT
Energy Canada Limited Partnership ("EOTT CANADA"), EOTT Energy Liquids,
L.P. ("EOTT LIQUIDS"), EOTT Energy Pipeline Limited Partnership ("EOTT
PIPELINE" and together with EOTT OLP, EOTT Canada and EOTT Liquids, on
a joint and several basis, the "BORROWERS"), EOTT Energy Partners,
L.P., EOTT GP, Standard Chartered Bank, as LC Agent and the other
signatories thereto, and the other Credit Documents are true and
correct on and as of the date hereof (except to the extent that the
facts on which such representations and warranties are based have been
changed by Extensions of Credit under the Agreement or to the extent
that such representation or warranty was made as of a specific date or
updated, modified or supplemented as of a subsequent date with the
consent of Majority LC Participants), with the same effect as though
such representations and warranties had been made on and as of the date
hereof.
3. There does not exist on the date hereof any condition or event that
constitutes a Default; no such Default will exist upon the Borrowers'
receipt and application of the Extension of Credit requested hereby;
and no Material Adverse Change has occurred or will occur upon the
Borrowers' receipt and application of the Extension of Credit requested
hereunder. The Borrowers will use the Letter of Credit hereby requested
in compliance with Section 2(a)(ii)(4) of the Agreement.
4. Each Debtor has performed and complied with all agreements and
conditions in the Agreement and the other Credit Documents required to
be performed or complied with by such Debtor on or prior to the date
hereof, and each of the conditions precedent to Extensions of Credit
contained in the Agreement remains satisfied.
5. After taking the issuance, amendment or extension such Letter of Credit
into account, the DIP Facility Usage does exceed the lesser of (A) the
DIP Maximum Commitment and (B) the Borrowing Base in each case on the
date requested for the Extension of Credit.
6. The Credit Documents have not been modified, amended or supplemented by
any unwritten representations or promises, by any course of dealing or
by any other means not provided for in the Agreement. The Agreement and
the other Credit Documents are hereby ratified, approved and confirmed
in all respects.
Capitalized terms used and not defined herein have the meanings given
to them in the Agreement.
The manager or officer of EOTT GP signing this instrument hereby
certifies that, to the best of his or her knowledge after due inquiry, the above
representations, warranties, acknowledgments and agreements of the Borrowers are
true, correct and complete in all material respects.
EOTT ENERGY OPERATING LIMITED PARTNERSHIP
By: EOTT ENERGY GENERAL PARTNER, L.L.C.
By:
--------------------------------------
Name:
--------------------------------
Title:
-------------------------------
EXHIBIT B
CERTIFICATE ACCOMPANYING
FINANCIAL STATEMENTS
Reference is made to the Debtor in Possession
Letter of Credit
Agreement dated as of October 18, 2002 (as from time to time amended, the
"AGREEMENT"), among EOTT Energy Operating Limited Partnership ("EOTT OLP"), EOTT
Energy Canada Limited Partnership ("EOTT CANADA"), EOTT Energy Liquids, L.P.
("EOTT LIQUIDS"), EOTT Energy Pipeline Limited Partnership ("EOTT PIPELINE" and
together with EOTT OLP, EOTT Canada and EOTT Liquids, on a joint and several
basis, the "BORROWERS"), EOTT Energy Partners, L.P. ("EOTT MLP"), EOTT Energy
General Partner, L.L.C. ("EOTT GP") and Standard Chartered Bank, as LC Agent and
the other signatories thereto. Capitalized terms used and not defined herein
have the meanings given to them in the Agreement.
This Certificate is furnished pursuant to Section 9(d) of the
Agreement. Together herewith EOTT MLP is furnishing to the LC Agent and each LC
Participant, EOTT MLP's [AUDITED/UNAUDITED] consolidated financial statements
(the "FINANCIAL STATEMENTS") and supporting consolidating financial statements,
if required, as at _____________, 200__ (the "REPORTING DATE"). EOTT MLP and the
Borrowers hereby jointly and severally represent, warrant and acknowledge to the
LC Agent and each LC Participant that:
(a) the officer of EOTT Corp. signing this instrument is a
duly elected, acting and qualified officer of EOTT Corp. as indicated
below such officer's signature hereto having all necessary authority to
act for EOTT Corp. in its capacity as the sole General Partner of EOTT
MLP in making the representations, warranties and acknowledgements set
forth herein;
(b) the manager or officer of EOTT GP signing this instrument
is the duly elected, acting and qualified manager of EOTT GP as
indicated below such manager's or officer's signature hereto having all
necessary authority to act for EOTT GP in its capacity as the sole
General Partner of each Borrower in making the representations,
warranties and acknowledgements set forth herein;
(c) the Financial Statements are accurate and complete in all
material respects (subject, in the case of such unaudited financial
statements, to normal and recurring adjustments made in conformity with
GAAP) and satisfy the requirements of the Agreement;
(d) on the Reporting Date each of EOTT MLP and the Borrowers
was, and on the date hereof is, in full compliance with the disclosure
requirements of Section 9(f) of the Agreement, and no Default otherwise
existed on the Reporting Date or otherwise exists on the date of this
instrument;
(e) The representations and warranties of EOTT MLP and the
Borrowers set forth in the Agreement and the other Credit Documents are
true and correct on and as of the date hereof (except to the extent
that the facts on which such representations and
warranties are based have been changed by Extensions of Credit under
the Agreement or to the extent that such representation or warranty was
made as of a specific date or updated, modified or supplemented as of a
subsequent date with the consent of Majority LC Participants), with the
same effect as though such representations and warranties had been made
on and as of the date hereof.
The officer of EOTT Corp. signing this instrument hereby certifies that
he/she has reviewed the Credit Documents, the Financial Statements and the
supporting consolidating financial statements and has otherwise undertaken such
inquiry as is in his/her opinion necessary to enable him/her to express an
informed opinion with respect to the above representations, warranties and
acknowledgments of EOTT MLP and, to the best of his/her knowledge, such
representations, warranties and acknowledgments are true, correct and complete
in all material respects.
The officer of EOTT GP signing this instrument hereby certifies that
he/she has reviewed the Credit Documents, the Financial Statements and the
supporting consolidating financial statements and has otherwise undertaken such
inquiry as is in his/her opinion necessary to enable him/her to express an
informed opinion with respect to the above representations, warranties and
acknowledgments of the Borrowers and, to the best of his/her knowledge, such
representations, warranties and acknowledgments are true, correct and complete
in all material respects.
IN WITNESS WHEREOF, this instrument is executed as of
__________,200___.
EOTT ENERGY PARTNERS, L.P.
By: EOTT ENERGY CORP., its General Partner
By:
---------------------------------------
Name:
---------------------------------
Title:
--------------------------------
EOTT ENERGY OPERATING LIMITED PARTNERSHIP
By: EOTT ENERGY GENERAL PARTNER, L.L.C.
By:
---------------------------------------
Name:
---------------------------------
Title:
--------------------------------
EOTT ENERGY CANADA LIMITED PARTNERSHIP
By: EOTT ENERGY GENERAL PARTNER, L.L.C., its
General Partner
By:
----------------------------------------
Name:
----------------------------------
Title:
---------------------------------
EOTT ENERGY LIQUIDS, L.P.
By: EOTT ENERGY GENERAL PARTNER, L.L.C., its
General Partner
By:
----------------------------------------
Name:
----------------------------------
Title:
---------------------------------
EOTT ENERGY PIPELINE LIMITED PARTNERSHIP
By: EOTT ENERGY GENERAL PARTNER, L.L.C., its
General Partner
By:
----------------------------------------
Name:
----------------------------------
Title:
---------------------------------
EOTT ENERGY GENERAL PARTNER, L.L.C.
By:
----------------------------------------
Name:
----------------------------------
Title:
---------------------------------
EXHIBIT C
[LETTERHEAD OF BORROWER]
BORROWING BASE REPORT
as of ___/___/___
I. COLLATERAL TYPE MARKET VALUE ADVANCE RATE BORROWING BASE
1. Eligible Cash Equivalents 100%
--------- ------------
2. Eligible Accounts Receivables
a. Tier I Eligible Receivables 90%
--------- ------------
b. Tier II Eligible Receivables 85%
--------- ------------
3. Eligible Crude/Product/Liquid Deliveries
a. Tier I Eligible Crude/Product/Liquid Deliveries 90%
--------- ------------
b. Tier II Eligible Crude/Product/Liquid Deliveries 85%
--------- ------------
4. Appraised Value of Eligible Fixed Assets 80%
--------- ------------
5. Inventory
a. (i) NYMEX Hedged Eligible Inventory 90%
--------- ------------
(ii)Other Hedged Eligible Inventory 80%
--------- ------------
b. Market Value of Unhedged Eligible Inventory 80%
--------- ------------
6. Eligible Margin Deposits 80%
--------- ------------
7. Undrawn Product Purchase Letters of Credit 80%
--------- ------------
MINUS:
8. First Purchaser Crude Payables 100%
--------- ------------
9. Other Priority Claims 100%
--------- ------------
10. The aggregate net amounts payable by each Borrower under
all Hedging Contracts to which it is a party: 110%
--------- ------------
11. The amount of any setoff or contra account to any Eligible
Receivable that could arise from an obligation of any Borrower
to sell or purchase crude oil in any future month to the extent
not otherwise reflected as a reduction of Eligible Receivables,
such amount to be determined on an early termination or xxxx to
market basis: 100%
--------- ------------
COLLATERAL TOTAL:
------------
II. OUTSTANDINGS
1. Principal amount of loans outstanding and any accrued and
unpaid fees and expenses under Xxxxxx DIP Credit Agreement:
----------
2. Outstanding amounts under SCTSC Purchase Agreements and
all accrued and unpaid fees and expenses thereunder:
----------
3. Carve Out
----------
TOTAL OUTSTANDINGS
----------
III. EXCESS / DEFICIT (I-II)
----------
I hereby certify that the information provided herein is true and correct to the
best of my knowledge and that the Borrowers have been in compliance with all
terms and conditions of all Credit Documents at all times.
BY:
---------------------------------
TITLE: (CEO, CFO or Treasurer)
------------------------------
EXHIBIT D
CASH FLOW REPORT
EXHIBIT D
CASH FLOW REPORT
EOTT Energy Beg Bal Beg Bal Beg Bal Beg Bal Beg Bal Beg Bal
[Actual] [Forecast] Cashflows
[Month Year] Actual Forecast Forecast Forecast Forecast
[date] [date] [date] [date] [date] [date]
------- ------- ------- ------- ------- -------
Operating Receipts
Crude Receipts
Crude Disbursements
Crude Lockbox
Crude/Product/NGL Payables (888802239)
Royalty Checks (888802242)
Canada Receipts/Disbursements
Pipeline Receipts
Pipeline Disbursements
Pipeline Lockbox
NGL & Product-Receipts
NGL & Product-Disbursements
NGL & Product-Lockbox
MTBE Receipts
MTBE Disbursements (Working Cap)
MTBE Deposits
Storage & Grid Receipts
Tax Disbursements
Merc
Other Miscellaneous Incoming
------- ------- ------- ------- ------- -------
Operating Receipts
OPERATING DISBURSEMENTS
Payroll
Payroll Wires (Benefits)
ETS Monthly Operating
OLP Monthly Operating (105)
Pipeline Monthly Operating (601)
MTBE/G&S Monthly Operating (609)
Field Account (444400598)
Other A/P
------- ------- ------- ------- ------- -------
Operating Disbursements
CASHFLOW - OPERATIONS
------- ------- ------- ------- ------- -------
CAPITAL & NON-OPERATING:
Miss #3 Pipeline
MTBE TurnAround
Interest/LC Cost - s/t
ETS Payable
SCB Loan Advances/Payments
Unitholder/Senior Debt/New Debt
------- ------- ------- ------- ------- -------
Capital & Non-Operating
Cash Balance (All US Bank Accts)
------- ------- ------- ------- ------- -------
LOAN BALANCE - SCB
======= ======= ======= ======= ======= =======
CHANGE IN BOOK CASH
Beginning Cash (all US bank accts)
Change in Book Cash
Change in O/S Check Float
------- ------- ------- ------- ------- -------
Ending Cash
======= ======= ======= ======= ======= =======
CHECKING ACCOUNT DATA
OUTSTANDING CHECK TOTAL @ [___]
CHECKS ISSUED
Royalty Account (888802242)
Expense (888802226)
Ad Valorem Taxes
Environmental
West Coast Capital & Other
Pipeline Account (888802320)
Ad Valorem Taxes
Environmental
Payroll Account (888802255)
Trade Payables (888802239)
Crude Payables
Product/NGL Payables
Field Account (444400598)
MTBE/G&S Monthly Oper.(888802918)
Turnaround
Annual Preventive Maintenance
------- ------- ------- ------- ------- -------
SUBTOTAL CHECKS ISSUED
CHECKS CLEARED
Royalty Account (888802242)
Expense (888802226)
Pipeline Account (888802320)
Payroll Account (888802255)
Trade Payables (888802239)
Field Account (444400598)
MTBE/G&S Monthly Oper.(888802918)
------- ------- ------- ------- ------- -------
SUBTOTAL CHECKS CLEARED
FLOAT BALANCE
Beginning O/S Check Balance
Checks Issued
Checks Cleared
------- ------- ------- ------- ------- -------
Ending Check Float
CHANGE IN CHECK FLOAT
FLOAT BALANCE-ROYALTY
Beginning O/S Check Balance
Checks Issued
Checks Cleared
------- ------- ------- ------- ------- -------
Ending Check Float
FLOAT BALANCE-OTHER
Beginning O/S Check Balance
Checks Issued
Checks Cleared
------- ------- ------- ------- ------- -------
Ending Check Float
Checks Issued
Checks Cleared
EOTT Energy Beg Bal Beg Bal Beg Bal Beg Bal Beg Bal Beg Bal
[Actual] [Forecast] Cashflows
[Month Year] Forecast Forecast Forecast Forecast Forecast Forecast
[date] [date] [date] [date] [date] [date]
------- ------- ------- ------- ------- -------
Operating Receipts
Crude Receipts
Crude Disbursements
Crude Lockbox
Crude/Product/NGL Payables (888802239)
Royalty Checks (888802242)
Canada Receipts/Disbursements
Pipeline Receipts
Pipeline Disbursements
Pipeline Lockbox
NGL & Product-Receipts
NGL & Product-Disbursements
NGL & Product-Lockbox
MTBE Receipts
MTBE Disbursements (Working Cap)
MTBE Deposits
Storage & Grid Receipts
Tax Disbursements
Merc
Other Miscellaneous Incoming
------- ------- ------- ------- ------- -------
Operating Receipts
OPERATING DISBURSEMENTS
Payroll
Payroll Wires (Benefits)
ETS Monthly Operating
OLP Monthly Operating (105)
Pipeline Monthly Operating (601)
MTBE/G&S Monthly Operating (609)
Field Account (444400598)
Other A/P
------- ------- ------- ------- ------- -------
Operating Disbursements
CASHFLOW - OPERATIONS
------- ------- ------- ------- ------- -------
CAPITAL & NON-OPERATING:
Miss #3 Pipeline
MTBE TurnAround
Interest/LC Cost - s/t
ETS Payable
SCB Loan Advances/Payments
Unitholder/Senior Debt/New Debt
------- ------- ------- ------- ------- -------
Capital & Non-Operating
Cash Balance (All US Bank Accts)
------- ------- ------- ------- ------- -------
LOAN BALANCE - SCB
======= ======= ======= ======= ======= =======
CHANGE IN BOOK CASH
Beginning Cash (all US bank accts)
Change in Book Cash
Change in O/S Check Float
------- ------- ------- ------- ------- -------
Ending Cash
======= ======= ======= ======= ======= =======
CHECKING ACCOUNT DATA
OUTSTANDING CHECK TOTAL @ [___]
CHECKS ISSUED
Royalty Account (888802242)
Expense (888802226)
Ad Valorem Taxes
Environmental
West Coast Capital & Other
Pipeline Account (888802320)
Ad Valorem Taxes
Environmental
Payroll Account (888802255)
Trade Payables (888802239)
Crude Payables
Product/NGL Payables
Field Account (444400598)
MTBE/G&S Monthly Oper.(888802918)
Turnaround
Annual Preventive Maintenance
------- ------- ------- ------- ------- -------
SUBTOTAL CHECKS ISSUED
CHECKS CLEARED
Royalty Account (888802242)
Expense (888802226)
Pipeline Account (888802320)
Payroll Account (888802255)
Trade Payables (888802239)
Field Account (444400598)
MTBE/G&S Monthly Oper.(888802918)
------- ------- ------- ------- ------- -------
SUBTOTAL CHECKS CLEARED
FLOAT BALANCE
Beginning O/S Check Balance
Checks Issued
Checks Cleared
------- ------- ------- ------- ------- -------
Ending Check Float
CHANGE IN CHECK FLOAT
FLOAT BALANCE-ROYALTY
Beginning O/S Check Balance
Checks Issued
Checks Cleared
------- ------- ------- ------- ------- -------
Ending Check Float
FLOAT BALANCE-OTHER
Beginning O/S Check Balance
Checks Issued
Checks Cleared
------- ------- ------- ------- ------- -------
Ending Check Float
Checks Issued
Checks Cleared
EOTT Energy Beg Bal Beg Bal Beg Bal Beg Bal Beg Bal Beg Bal
[Actual] [Forecast] Cashflows
[Month Year] Forecast Forecast Forecast Forecast Forecast Forecast
[date] [date] [date] [date] [date] [date]
------- ------- ------- ------- ------- -------
Operating Receipts
Crude Receipts
Crude Disbursements
Crude Lockbox
Crude/Product/NGL Payables (888802239)
Royalty Checks (888802242)
Canada Receipts/Disbursements
Pipeline Receipts
Pipeline Disbursements
Pipeline Lockbox
NGL & Product-Receipts
NGL & Product-Disbursements
NGL & Product-Lockbox
MTBE Receipts
MTBE Disbursements (Working Cap)
MTBE Deposits
Storage & Grid Receipts
Tax Disbursements
Merc
Other Miscellaneous Incoming
------- ------- ------- ------- ------- -------
Operating Receipts
OPERATING DISBURSEMENTS
Payroll
Payroll Wires (Benefits)
ETS Monthly Operating
OLP Monthly Operating (105)
Pipeline Monthly Operating (601)
MTBE/G&S Monthly Operating (609)
Field Account (444400598)
Other A/P
------- ------- ------- ------- ------- -------
Operating Disbursements
CASHFLOW - OPERATIONS
------- ------- ------- ------- ------- -------
CAPITAL & NON-OPERATING:
Miss #3 Pipeline
MTBE TurnAround
Interest/LC Cost - s/t
ETS Payable
SCB Loan Advances/Payments
Unitholder/Senior Debt/New Debt
------- ------- ------- ------- ------- -------
Capital & Non-Operating
Cash Balance (All US Bank Accts)
------- ------- ------- ------- ------- -------
LOAN BALANCE - SCB
======= ======= ======= ======= ======= =======
CHANGE IN BOOK CASH
Beginning Cash (all US bank accts)
Change in Book Cash
Change in O/S Check Float
------- ------- ------- ------- ------- -------
Ending Cash
======= ======= ======= ======= ======= =======
CHECKING ACCOUNT DATA
OUTSTANDING CHECK TOTAL @ [___]
CHECKS ISSUED
Royalty Account (888802242)
Expense (888802226)
Ad Valorem Taxes
Environmental
West Coast Capital & Other
Pipeline Account (888802320)
Ad Valorem Taxes
Environmental
Payroll Account (888802255)
Trade Payables (888802239)
Crude Payables
Product/NGL Payables
Field Account (444400598)
MTBE/G&S Monthly Oper.(888802918)
Turnaround
Annual Preventive Maintenance
------- ------- ------- ------- ------- -------
SUBTOTAL CHECKS ISSUED
CHECKS CLEARED
Royalty Account (888802242)
Expense (888802226)
Pipeline Account (888802320)
Payroll Account (888802255)
Trade Payables (888802239)
Field Account (444400598)
MTBE/G&S Monthly Oper.(888802918)
------- ------- ------- ------- ------- -------
SUBTOTAL CHECKS CLEARED
FLOAT BALANCE
Beginning O/S Check Balance
Checks Issued
Checks Cleared
------- ------- ------- ------- ------- -------
Ending Check Float
CHANGE IN CHECK FLOAT
FLOAT BALANCE-ROYALTY
Beginning O/S Check Balance
Checks Issued
Checks Cleared
------- ------- ------- ------- ------- -------
Ending Check Float
FLOAT BALANCE-OTHER
Beginning O/S Check Balance
Checks Issued
Checks Cleared
------- ------- ------- ------- ------- -------
Ending Check Float
Checks Issued
Checks Cleared
EOTT Energy Beg Bal Beg Bal Beg Bal Beg Bal
[Actual] [Forecast] Cashflows
[Month Year] Forecast Forecast Forecast Forecast Forecast
[date] [date] [date] [date] [date]
------- ------- ------- ------- -------
Operating Receipts
Crude Receipts
Crude Disbursements
Crude Lockbox
Crude/Product/NGL Payables (888802239)
Royalty Checks (888802242)
Canada Receipts/Disbursements
Pipeline Receipts
Pipeline Disbursements
Pipeline Lockbox
NGL & Product-Receipts
NGL & Product-Disbursements
NGL & Product-Lockbox
MTBE Receipts
MTBE Disbursements (Working Cap)
MTBE Deposits
Storage & Grid Receipts
Tax Disbursements
Merc
Other Miscellaneous Incoming
------- ------- ------- -------
Operating Receipts
OPERATING DISBURSEMENTS
Payroll
Payroll Wires (Benefits)
ETS Monthly Operating
OLP Monthly Operating (105)
Pipeline Monthly Operating (601)
MTBE/G&S Monthly Operating (609)
Field Account (444400598)
Other A/P
------- ------- ------- -------
Operating Disbursements
CASHFLOW - OPERATIONS
------- ------- ------- -------
CAPITAL & NON-OPERATING:
Miss #3 Pipeline
MTBE TurnAround
Interest/LC Cost - s/t
ETS Payable
SCB Loan Advances/Payments
Unitholder/Senior Debt/New Debt
------- ------- ------- -------
Capital & Non-Operating
Cash Balance (All US Bank Accts)
------- ------- ------- -------
LOAN BALANCE - SCB
======= ======= ======= =======
CHANGE IN BOOK CASH
Beginning Cash (all US bank accts)
Change in Book Cash
Change in O/S Check Float
------- ------- ------- -------
Ending Cash
======= ======= ======= =======
CHECKING ACCOUNT DATA
OUTSTANDING CHECK TOTAL @ [___] Total Checks Issued
CHECKS ISSUED Totals Breakdown
Royalty Account (888802242)
Expense (888802226)
Ad Valorem Taxes
Environmental
West Coast Capital & Other
Pipeline Account (888802320)
Ad Valorem Taxes
Environmental
Payroll Account (888802255)
Trade Payables (888802239)
Crude Payables
Product/NGL Payables
Field Account (444400598)
MTBE/G&S Monthly Oper.(888802918)
Turnaround
Annual Preventive Maintenance
------- ------- ------- -------
SUBTOTAL CHECKS ISSUED
CHECKS CLEARED
Royalty Account (888802242)
Expense (888802226)
Pipeline Account (888802320)
Payroll Account (888802255)
Trade Payables (888802239)
Field Account (444400598)
MTBE/G&S Monthly Oper.(888802918)
------- ------- ------- -------
SUBTOTAL CHECKS CLEARED
FLOAT BALANCE
Beginning O/S Check Balance
Checks Issued
Checks Cleared
------- ------- ------- -------
Ending Check Float
CHANGE IN CHECK FLOAT
FLOAT BALANCE-ROYALTY
Beginning O/S Check Balance
Checks Issued
Checks Cleared
------- ------- ------- -------
Ending Check Float
FLOAT BALANCE-OTHER
Beginning O/S Check Balance
Checks Issued
Checks Cleared
------- ------- ------- -------
Ending Check Float
Checks Issued
Checks Cleared
EXHIBIT E
ENVIRONMENTAL COMPLIANCE CERTIFICATE
Reference is made to that certain Debtor in Possession
Letter of Credit
Agreement, dated as of October 18, 2002 (as from time to time amended, the
"AGREEMENT"), among EOTT Energy Operating Limited Partnership ("EOTT OLP"), EOTT
Energy Canada Limited Partnership ("EOTT CANADA"), EOTT Energy Liquids, L.P.
("EOTT LIQUIDS"), EOTT Energy Pipeline Limited Partnership ("EOTT PIPELINE" and
together with EOTT OLP, EOTT Canada and EOTT Liquids, on a joint and several
basis, the "BORROWERS"), EOTT Energy Partners, L.P., EOTT Energy General
Partner, L.L.C. ("EOTT GP"), and Standard Chartered Bank, as LC Agent and the
other signatories thereto. Capitalized terms used and not defined herein have
the meanings given to them in the Agreement.
This Certificate is furnished pursuant to Section 9(d)(x) of the
Agreement. The Borrowers hereby represent, warrant, and acknowledge to the LC
Agent and each LC Participant that:
1. For the Fiscal Year ending immediately prior to the date
hereof, the Borrowers have complied and are complying with Section 9(o) of the
Agreement;
2. To the best knowledge of the undersigned after due inquiry,
the Borrowers are on the date hereof in compliance with all applicable
Environmental Laws, noncompliance with which could cause a Material Adverse
Change;
3. The Borrowers have taken (and continue to take) reasonable
steps to minimize the generation of potentially harmful effluents; and
4. The Borrowers have established an ongoing program of
conducting an internal audit of each operating facility of the Borrowers to
identify actual or potential environmental Liabilities that could cause a
Material Adverse Change.
The manager or officer of EOTT GP signing this instrument hereby
certifies that (i) such manager or officer is a duly elected, acting and
qualified manager or officer of EOTT GP as indicated below such manager's or
officer's signature hereto, having all necessary authority to act for EOTT GP in
its capacity as the sole General Partner of each Borrower in making the
representations, warranties and acknowledgements set forth herein and (ii) to
the best of such manager's or officer's knowledge after due inquiry and
consultation with the operating officers of each Borrower, such representations,
warranties, acknowledgments and agreements are true, correct and complete in all
material respects.
IN WITNESS WHEREOF, this instrument is executed as of __________,
200__.
EOTT ENERGY OPERATING LIMITED PARTNERSHIP
By: EOTT ENERGY GENERAL PARTNER, L.L.C., its
General Partner
By:
------------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
EOTT ENERGY CANADA LIMITED PARTNERSHIP
By: EOTT ENERGY GENERAL PARTNER, L.L.C., its
General Partner
By:
------------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
EOTT ENERGY LIQUIDS, L.P.
By: EOTT ENERGY GENERAL PARTNER, L.L.C., its
General Partner
By:
------------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
EOTT ENERGY PIPELINE LIMITED PARTNERSHIP
By: EOTT ENERGY GENERAL PARTNER, L.L.C., its
General Partner
By:
------------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
EOTT ENERGY PARTNERS, L.P.
By: EOTT ENERGY CORP., its General Partner
By:
------------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
EOTT ENERGY GENERAL PARTNER, L.L.C
By:
--------------------------------------------------
Name:
--------------------------------------------
Title:
-------------------------------------------
EXHIBIT F
OPEN POSITION REPORT
EOTT Energy Position Board Fixed-Ratable
Division 4 W/Inventory Report By Delivery Month
SUMMARY
Fixed Price
Delivery Dom-
Month DOM NUMEX Ho-NYMES SOUR SWEET WTI WTS NET ROLL NET X/X X/X X/X X/X X/X X/X
---------------------- ----- -------- -------- ------ -------- ----- ------ ----- --------- ----- ------ ----- ----- ----- -----
INVENTORY
14-West Texas
32-EOTT Terminaling -100 100
33- Offshore 1 1
4-NAT -00 -00
00-Xx XX XX
64- Rocky Mountain 000 -000 -0
00-Xxxxxxxx 00 -00 -00
Total 196 0 0 0 -283 0 0 -87
0209
14-West Texas 000 -000 00 -00
00-XXXX Xxxxxxxxxxx -000 -00 120 40 50 25
4-NAT -19 27 8
54-ArkLaTex -0 -0
00- Xxxxx Xxxxxxxx -00 270 235
74-Oklahoma -8 30 22
Total 177 252 0 120 40 -467 128 250
0210
14-West Texas 000 -000
32-EOTT Terminaling -000 -00 000 -0
Delivery
Month X/X X/X X/X X/X X/X X/X X/X X/X X/X X/X
---------------------- ----- ------ ----- ----- ----- ----- ----- ----- ----- -----
INVENTORY
14-West Texas
00-XXXX Xxxxxxxxxxx
00- Xxxxxxxx
0-XXX
00-Xx XX XX
64- Rocky Mountain
74-Oklahoma
Total
0209
14-West Texas
32-EOTT Terminaling
4-NAT
54-ArkLaTex
64- Rocky Mountain
74-Oklahoma
Total
0210
14-West Texas
32-EOTT Terminaling
EOTT Energy Position Board Fixed-Ratable
Division 4 W/Inventory Report By Delivery Month
SUMMARY
Fixed Price
Delivery Dom-
Month DOM NUMEX Ho-NYMES SOUR SWEET WTI WTS NET ROLL NET X/X X/X X/X X/X X/X X/X
---------------------- ----- -------- -------- ------ -------- ----- ------ ----- --------- ----- ------ ----- ----- ----- -----
34-Bayou 00 -00
0-XXX 000 -000 -0
00-Xx XX XX -0 -00 -00
54-ArkLaTex
64-Rocky Mountain -18 133 15 130
74-Oklahoma 50 42 92
Total 000 -00 0 000 -00 -000 2 106
0211
14-West Texas -16 -16
32-EOTT Terminaling 8 -8
34-Bayou 00 -00
0-XXX 00 00
00-Xx XX XX 0 -0 -0
00-XxxXxXxx -00 -00
00-Xxxxx Xxxxxxxx -0 -000 -000
74-Oklahoma -55 -8 -63
Total 00 -000 0 0 -00 0 0 -000
0000
00-Xxxxx 00 -00
0-XXX
00-Xxxxx Xxxxxxxx -00 -00
Total 62 -63 0 0 -62 0 0 -63
Delivery
Month N/A N/A N/A N/A X/X X/X X/X X/X X/X X/X
---------------------- ----- ------ ----- ----- ----- ----- ----- ----- ----- -----
00-Xxxxx
0-XXX
00-Xx XX XX
54-ArkLaTex
64-Rocky Mountain
74-Oklahoma
Total
0211
14-West Texas
00-XXXX Xxxxxxxxxxx
00-Xxxxx
0-XXX
00-Xx XX XX
54-ArkLaTex
64-Rocky Mountain
74-Oklahoma
Total
0212
34-Bayou
4-NAT
64-Rocky Mountain
Total
EOTT Energy Position Board Fixed-Ratable
Division 4 W/Inventory Report By Delivery Month
SUMMARY
Fixed Price
Delivery Dom-
Month DOM NUMEX Ho-NYMES SOUR SWEET WTI WTS NET ROLL NET X/X X/X X/X X/X X/X X/X
---------------------- ----- -------- -------- ------ -------- ----- ------ ----- --------- ----- ------ ----- ----- ----- -----
0301
64-Rocky Mountain 27 27
Total 0 27 0 0 0 0 0 27
0302
64-Rocky Mountain 10 10
Total 0 10 0 0 0 0 0 10
0312
4-NAT
Total 0 0 0 0 0 0 0 0
Summary
14-West Texas 981 -1103 00 -00
00-XXXX Xxxxxxxxxxx -000 -00 430 140 50 19
33-Offshore 1 1
34-Bayou 000 -000
0-XXX 000 -000 00
00-Xx XX XX -00 -00
00-XxxXxXxx -0 -00 -00
64-Rocky Mountain 281 276 -323 234
74-Oklahoma 1 34 -45 30 20
Total 1055 18 0 430 -439 -1103 130 91
Delivery
Month N/A N/A N/A N/A X/X X/X X/X X/X X/X X/X
---------------------- ----- ------ ----- ----- ----- ----- ----- ----- ----- -----
0301
64-Rocky Mountain
Total
0302
64-Rocky Mountain
Total
0312
4-NAT
Total
Summary
14-West Texas
32-EOTT Terminaling
33-Offshore
34-Bayou
4-NAT
44-Ms AF FI
54-ArkLaTex
64-Rocky Mountain
74-Oklahoma
Total
EOTT Energy Position Board Fixed-Ratable
Division 4 W/Inventory Report By Trade Group
SUMMARY
Ratable Price
Delivery dom* heavy* sour* sweet* unk* wti* net* *** conoc eott* xxxx* market MERC*
Month. o* *
-------------- ------ --------- -------- --------- ------ ------ ------- ----- ---------- -------- -------- --------- --------
4-NAT
0209 -10 -10 -10
0210 1
0211
Total -10 0 0 0 0 0 -10 0 0 0 1 0 -10
Delivery other* xxxxx* unpric* net* n/a n/a n/a n/a n/a n/a n/a n/a
Month.
-------------- --------- -------- -------- ------- ----- ------ ----- ------ ----- ------ ----- ------
4-NAT
0209 -10
0210 -1
0211
Total 0 -0 0 -00
XXXX Xxxxxx Position Board Fixed-Ratable
Division 4 W/Inventory Report By Trade Group
SUMMARY
Ratable Price
Delivery dom* heavy* sour* sweet* unk* wti* net* *** conoc eott* xxxx* market MERC*
Month. o* *
-------------- ------ --------- -------- --------- ------ ------ ------- ----- ---------- -------- -------- --------- --------
14-West Texas
0209 -5 5 5
0210 56 56 56
0211 54 54 54
Total -5 0 0 0 0 115 110 0 0 0 0 0 115
Delivery other* xxxxx* unpric* net* n/a n/a n/a n/a n/a n/a n/a n/a
Month.
-------------- --------- -------- -------- ------- ----- ------ ----- ------ ----- ------ ----- ------
14-West Texas
0209 -5
0210 56
0211 54
Total 0 -5 0 110
EOTT Energy Position Board Fixed-Ratable
Division 4 W/Inventory Report By Trade Group
SUMMARY
Ratable Price
Delivery dom* heavy* sour* sweet* unk* wti* net* *** conoc eott* xxxx* market MERC*
Month. o* *
-------------- ------ --------- -------- --------- ------ ------ ------- ----- ---------- -------- -------- --------- --------
24-South Texas
0210 0 -00 -0 -00 -0
Total 0 0 0 -00 -0 0 -00 0 0 -9 0 0 0
Delivery other* xxxxx* unpric* net* n/a n/a n/a n/a n/a n/a n/a n/a
Month.
-------------- --------- -------- -------- ------- ----- ------ ----- ------ ----- ------ ----- ------
24-South Texas
0210 -11 -20
Total 0 -11 0 -20
EOTT Energy Position Board Fixed-Ratable
Division 4 W/Inventory Report By Trade Group
SUMMARY
Ratable Price
Delivery dom* heavy* sour* sweet* unk* wti* net* *** conoc eott* xxxx* market
Month. o* *
-------------- ------ --------- -------- --------- ------ ------ ------- ----- ---------- -------- -------- ---------
32-EOTT Terminaling
0209 -20 -5 -25 -25
0210
0211
Xxxxx -00 0 0 0 0 -0 -00 0 0 -25 0 0
Delivery MERC* other* xxxxx* unpric* net* n/a n/a n/a n/a n/a n/a n/a n/a
Month.
-------------- -------- --------- -------- -------- ------- ----- ------ ----- ------ ----- ------ ----- ------
32-EOTT Terminaling
0209 -5 5 -25
0210
0211
Total -5 0 5 0 -25
EOTT Energy Position Board Fixed-Ratable
Division 4 W/Inventory Report By Trade Group
SUMMARY
Ratable Price
Delivery dom* heavy* sour* sweet* unk* wti* net* *** conoc eott* xxxx* market
Month. o* *
-------------- ------ --------- -------- --------- ------ ------ ------- ----- ---------- -------- -------- ---------
34-Bayou
0209
0210
0211 00 -000 -000 -000
Total 24 0 0 -157 0 0 -000 0 0 0 0 -000
Xxxxxxxx MERC* other* xxxxx* unpric* net* n/a n/a n/a n/a n/a n/a n/a n/a
Month.
-------------- -------- --------- -------- -------- ------- ----- ------ ----- ------ ----- ------ ----- ------
34-Bayou
0209
0210
0211 -00 -000
Xxxxx 0 0 -00 0 -000
XXXX Energy Position Board Fixed-Ratable
Division 4 W/Inventory Report By Trade Group
SUMMARY
Ratable Price
Delivery dom* heavy* sour* sweet* unk* wti* net* *** conoc eott* xxxx* market
Month. o* *
-------------- ------ --------- -------- --------- ------ ------ ------- ----- ---------- -------- -------- ---------
44-Ms Al Fl
0209 -60
0210 00 -00 -00 -00
Total 26 0 0 -80 0 0 -54 0 0 0 -60 -80
Delivery MERC* other* xxxxx* unpric* net* n/a n/a n/a n/a n/a n/a n/a n/a
Month.
-------------- -------- --------- -------- -------- ------- ----- ------ ----- ------ ----- ------ ----- ------
44-Ms Al Fl
0209 60
0210 26 -54
Total 0 0 86 0 -54
EOTT Energy Position Board Fixed-Ratable
Division 4 W/Inventory Report By Trade Group
SUMMARY
Ratable Price
Delivery dom* heavy* sour* sweet* unk* wti* net* *** conoc eott* xxxx* market
Month. o* *
-------------- ------ --------- -------- --------- ------ ------ ------- ----- ---------- -------- -------- ---------
54-ArkLaTex
0209 9 9
0210 -18 -18
0211
Total -9 0 0 0 0 0 -9 0 0 0 0 0
Delivery MERC* other* xxxxx* unpric* net* n/a n/a n/a n/a n/a n/a n/a n/a
Month.
-------------- -------- --------- -------- -------- ------- ----- ------ ----- ------ ----- ------ ----- ------
54-ArkLaTex
0209 9 9
0210 -18 -18
0211
Total 0 0 -9 0 -9
EOTT Energy Position Board Fixed-Ratable
Division 4 W/Inventory Report By Trade Group
SUMMARY
Ratable Price
Delivery dom* heavy* sour* sweet* unk* wti* net* *** conoc eott* xxxx* market
Month. o* *
-------------- ------ --------- -------- --------- ------ ------ ------- ----- ---------- -------- -------- ---------
64-Rocky Mountain
0209 150 -386 -236 -62 55
0210 353 -10 -238 105 4 50
0211 -64 117 53 4
0212 -66 120 54 4
0301 -4 4 4
Total 369 0 -10 -383 0 0 -24 0 0 -46 105 0
Delivery MERC* other* xxxxx* unpric* net* n/a n/a n/a n/a n/a n/a n/a n/a
Month.
-------------- -------- --------- -------- -------- ------- ----- ------ ----- ------ ----- ------ ----- ------
64-Rocky Mountain
0209 -8 -12 -211 0 -000
0000 -00 140 105
0211 49 53
0212 50 54
0301 -4
Total -0 -00 -000 000 -00
EOTT Energy Position Board Fixed-Ratable
Division 4 W/Inventory Report By Trade Group
SUMMARY
Ratable Price
Delivery dom* heavy* sour* sweet* unk* wti* net* *** conoc eott* xxxx* market
Month. o* *
-------------- ------ --------- -------- --------- ------ ------ ------- ----- ---------- -------- -------- ---------
73-Kansas
0000 -000 0 -0 -000 -0
0210
0211
Xxxxx -000 0 0 0 -0 -000 0 0 -5 0 0
Delivery MERC* other* xxxxx* unpric* net* n/a n/a n/a n/a n/a n/a n/a n/a
Month.
-------------- -------- --------- -------- -------- ------- ----- ------ ----- ------ ----- ------ ----- ------
73-Kansas
0209 -136 -141
0210
0211
Xxxxx 0 0 -000 0 -000
XXXX Energy Position Board Fixed-Ratable
Division 4 W/Inventory Report By Trade Group
SUMMARY
Ratable Price
Delivery dom* heavy* sour* sweet* unk* wti* net* *** conoc eott* xxxx* market
Month. o* *
-------------- ------ --------- -------- --------- ------ ------ ------- ----- ---------- -------- -------- ---------
74 Oklahoma
0209 -41 26 -15 12 30
0210 255 31 286 87
0211
Total 214 0 0 26 0 31 271 0 0 12 117 0
Delivery MERC* other* xxxxx* unpric* net* n/a n/a n/a n/a n/a n/a n/a n/a
Month.
-------------- -------- --------- -------- -------- ------- ----- ------ ----- ------ ----- ------ ----- ------
74 Oklahoma
0209 26 -83 -15
0210 199 286
0211
Total 26 0 116 0 271
EOTT Energy Position Board Fixed-Ratable
Division 4 W/Inventory Report By Trade Group
SUMMARY
Ratable Price
Delivery dom* heavy* sour* sweet* unk* wti* net* *** conoc eott* xxxx* market
Month. o* *
-------------- ------ --------- -------- --------- ------ ------ ------- ----- ---------- -------- -------- ---------
SUMMARY
0209 00 -000 -000 -00 00
0210 000 -00 -000 -00 00 00 -00 000 -000
0211 -64 117 54 107 4
0212 -66 120 54 4
0301 -4 4 4
Total 452 0 -10 -603 -15 141 -35 0 0 -00 000 -000
Delivery MERC* other* xxxxx* unpric* net* n/a n/a n/a n/a n/a n/a n/a n/a
Month.
-------------- -------- --------- -------- -------- ------- ----- ------ ----- ------ ----- ------ ----- ------
SUMMARY
0209 8 -12 -225 2 -277
0210 56 -43 140 81
0211 54 49 107
0212 50 54
0301 -4
Total 000 -00 -000 000 -00
EXHIBIT G
INITIAL CASH BUDGET
(DOLLAR AMOUNTS IN THOUSANDS) Period 1 Period 2 Period 3 Period 4 Period 5
Forecast Stub Forecast Forecast Forecast Forecast
3 Days Ending Week Ending Week Ending Week Ending Week Ending
10/12/2002 10/19/2002 10/26/2002 11/2/2002 11/9/2002
------------ ------------ ------------ ------------ ------------
SOURCES $ -- $ 3,510 $ 36,650 $ 9,390 $ 1,975
CGS USES 2,943 4,440 26,418 5,323 4,359
------------ ------------ ------------ ------------ ------------
(2,943) (930) 10,232 4,067 (2,384)
OPERATING EXPENSES 895 12,764 1,980 9,065 3,730
NON-OPERATING EXPENSES -- -- 2,500 2,650 2,490
------------ ------------ ------------ ------------ ------------
NET CASH INFLOWS/(OUTFLOWS) (3,838) (13,694) 5,752 (7,648) (8,604)
============ ============ ============ ============ ============
CUMULATIVE NET CASH FLOW BUDGET (3,838) (17,532) (11,779) (19,427) (28,031)
CUMULATIVE NET CASH FLOW ACTUAL (534) (534) (534) (534) (534)
------------ ------------ ------------ ------------ ------------
FAVORABLE (UNFAVORABLE) VARIANCE 3,304 16,997 11,245 18,893 27,496
PERCENTAGE VARIANCE 86% 97% 95% 97% 98%
(DOLLAR AMOUNTS IN THOUSANDS) Period 6 Period 7 Period 8 Period 9 Period 10
Forecast Forecast Forecast Forecast Forecast
Week Ending Week Ending Week Ending Week Ending Week Ending
11/16/2002 11/23/2002 11/30/2002 12/7/2002 12/14/2002
------------ ------------ ------------ ------------ ------------
SOURCES $ 1,920 $ 37,735 $ 13,713 $ 3,650 $ 3,650
CGS USES 3,902 24,729 6,385 6,578 3,973
------------ ------------ ------------ ------------ ------------
(1,982) 13,006 7,328 (2,928) (323)
OPERATING EXPENSES 5,151 1,465 4,165 3,650 4,565
NON-OPERATING EXPENSES 200 110 2,500 2,413 200
------------ ------------ ------------ ------------ ------------
NET CASH INFLOWS/(OUTFLOWS) (7,333) 11,431 663 (8,990) (5,088)
============ ============ ============ ============ ============
CUMULATIVE NET CASH FLOW BUDGET (35,364) (23,933) (23,269) (32,260) (37,348)
CUMULATIVE NET CASH FLOW ACTUAL (534) (534) (534) (534) (534)
------------ ------------ ------------ ------------ ------------
FAVORABLE (UNFAVORABLE) VARIANCE 34,829 23,398 22,735 31,725 36,813
PERCENTAGE VARIANCE 98% 98% 98% 98% 99%
(DOLLAR AMOUNTS IN THOUSANDS) Period 11 Period 12 Period 13 Period 14 Period 15
Forecast Forecast Forecast Forecast Forecast
Week Ending Week Ending Week Ending Week Ending Week Ending
12/21/2002 12/28/2002 1/4/2003 1/11/2003 1/18/2003
------------ ------------ ------------ ------------ ------------
SOURCES $ 37,762 $ 11,940 $ 4,603 $ 3,250 $ 3,650
CGS USES 25,764 3,810 4,446 5,474 4,087
------------ ------------ ------------ ------------ ------------
11,998 8,130 157 (2,224) (437)
OPERATING EXPENSES 1,515 1,415 5,106 1,830 3,565
NON-OPERATING EXPENSES 200 2,565 -- 2,443 190
------------ ------------ ------------ ------------ ------------
NET CASH INFLOWS/(OUTFLOWS) 10,283 4,150 (4,949) (6,497) (4,192)
============ ============ ============ ============ ============
CUMULATIVE NET CASH FLOW BUDGET (27,065) (22,915) (27,863) (34,360) (38,552)
CUMULATIVE NET CASH FLOW ACTUAL (534) (534) (534) (534) (534)
------------ ------------ ------------ ------------ ------------
FAVORABLE (UNFAVORABLE) VARIANCE 26,530 22,380 27,329 33,826 38,018
PERCENTAGE VARIANCE 98% 98% 98% 98% 99%
(DOLLAR AMOUNTS IN THOUSANDS) Period 16 Period 17
Forecast Forecast TOTAL
Week Ending Week Ending for the 17
1/25/2003 2/1/2003 Week period
------------ ------------ ------------
SOURCES $ 37,697 $ 12,075 $ 223,170
CGS USES 23,800 7,454 163,883
------------ ------------ ------------
13,897 4,621 59,287
OPERATING EXPENSES 2,270 3,033 66,163
NON-OPERATING EXPENSES 190 690 19,341
------------ ------------ ------------
NET CASH INFLOWS/(OUTFLOWS) 11,437 898 (26,217)
============ ============ ============
CUMULATIVE NET CASH FLOW BUDGET (27,115) (26,217)
CUMULATIVE NET CASH FLOW ACTUAL (534) (534)
------------ ------------
FAVORABLE (UNFAVORABLE) VARIANCE 26,581 25,682
PERCENTAGE VARIANCE 98% 98%
EXHIBIT H
CRITICAL VENDOR ORDER
IN THE UNITED STATES BANKRUPTCY COURT
FOR THE SOUTHERN DISTRICT OF TEXAS
CORPUS CHRISTI DIVISION
In re: ) (Chapter 11)
)
EOTT ENERGY PARTNERS, L.P. ) CASE NO. 02-21730
)
EOTT ENERGY FINANCE CORP. ) CASE NO. 02-21731
)
EOTT ENERGY GENERAL PARTNER, LLC ) CASE NO. 02-21732
)
EOTT ENERGY OPERATING LIMITED PARTNERSHIP ) CASE NO. 02-21733
)
)
EOTT ENERGY CANADA LIMITED PARTNERSHIP ) CASE NO. 02-21734
)
)
EOTT ENERGY PIPELINE LIMITED PARTNERSHIP ) CASE NO. 02-21735
)
)
EOTT ENERGY LIQUIDS, L.P. ) CASE NO. 02-21736
)
)
Debtors. ) (Motion for Joint
Administration pending)
ORDER AUTHORIZING PAYMENT OR HONORING OF
PREPETITION OBLIGATIONS TO CRITICAL
CUSTOMERS AND VENDORS INCLUDING CRUDE
OIL SUPPLIERS, RAW MATERIAL SUPPLIERS,
AND TRADE PARTNERS
Came on for consideration the Debtors' Emergency Motion for Authority
to Pay or Honor Prepetition Obligations to Critical Customers and Vendors
Including Crude Oil Suppliers, Raw Material Suppliers and Trade Partners (the
"Motion") filed by the above-referenced Debtors (collectively, "EOTT" or the
"Debtors"). The Motion requests entry of an order authorizing the Debtors to pay
or honor their prepetition obligations to customers and certain vendors. The
Court has considered the Motion, arguments of counsel, the evidence presented,
and finds that the relief requested in the Motion is in the best interest of the
Debtors, their estates and creditors.
The Court also finds that, given the circumstances and the nature of the relief
requested, no further notice need be given. It is therefore, hereby
ORDERED that the Motion and all relief requested therein is
GRANTED in full and in all respects;
ORDERED that the Debtors are authorized to pay the actual
prepetition claims of Suppliers including the undisputed claims of CIMA Energy,
LLC and Burlington Resources, and the Critical Vendor Claims as identified on
EXHIBIT A to the Motion, or as subsequently identified by the Debtors in their
reasonable judgment; and it is further
ORDERED that the Debtors are authorized to pay Critical Vendor
Claims and prepetition claims of Suppliers including the undisputed claims of
CIMA Energy, LLC and Burlington Resources incurred during the first week of
October, 2002 ratably whether or not such claims appear on EXHIBIT A to the
Motion.
Signed this 9th day of October, 2002.
/s/ Judge Xxxxxxx X. Xxxxxxx
----------------------------------
UNITED STATES BANKRUPTCY JUDGE
AFTER ENTRY, PLEASE RETURN COPY TO:
Xxxxxx X. Xxxxxxxxxx
Xxxx X. Xxxxxxx
Xxxxxxxx X. Xxxxx
Xxxxxx and Xxxxx, LLP
000 Xxxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
EXHIBIT I
WEEKLY COMPLIANCE CERTIFICATE
Dated _______ __, 200__
Reference is made to that certain Debtor in Possession
Letter of Credit
Agreement, dated as of October __, 2002 (as from time to time amended, the
"AGREEMENT"), among EOTT Energy Operating Limited Partnership ("EOTT OLP"), EOTT
Energy Canada Limited Partnership ("EOTT CANADA"), EOTT Energy Liquids, L.P.
("EOTT LIQUIDS"), EOTT Energy Pipeline Limited Partnership ("EOTT PIPELINE" and
together with EOTT OLP, EOTT Canada and EOTT Liquids, on a joint and several
basis, the "BORROWERS"), EOTT Energy Partners, L.P., EOTT Energy General
Partner, L.L.C. ("EOTT GP"), and Standard Chartered Bank, as LC Agent and the
other signatories thereto. Capitalized terms used and not defined herein have
the meanings given to them in the Agreement.
This Certificate is furnished pursuant to Section 9(d)(vi)(4) of the
Agreement. The Borrowers hereby represent, warrant, and acknowledge to the LC
Agent and each LC Participant that:
5. Cash Budget
(a) Current Reference Period
(i) The projected Cumulative Net Cash Flow as
reflected in the Cash Budget for the current
Reference Period ended ______ __, 200__ was
____________.
(ii) The actual Cumulative Net Cash Flow as
reflected in the Cash Budget for the current
Reference Period ended _________ __, 200__
was ____________.
(iii) Variance
(A) Item 1(a)(i) minus Item 1(a)(ii):
________ .
(B) Item 1(a)(iii)(A) divided by Item
1(a)(i), expressed as a percentage:
________.
(b) Prior Reference Period
(i) The projected Cumulative Net Cash Flow as
reflected in the Cash Budget for the prior
Reference Period ended _______ __, 200__ was
__________.
(ii) The actual Cumulative Net Cash Flow as
reflected in the Cash Budget for the prior
Reference Period ended ______ __, 200__ was
__________.
(iii) Variance
(A) Item 1(b)(i) minus Item 1(b)(ii):
_________.
(B) Item 1(b)(iii)(A) divided by Item
1(b)(i), expressed as a percentage:
___________.
(c) The actual Cumulative Net Cash Flow [was/was not]
less than ninety percent (90%) of the amount of the
projected Cumulative Net Cash Flow for the Reference
Periods included in Items 1(a) and 1(b) above.
2. Minimum Crude Oil Lease Volumes(1)
(a) The aggregate crude oil purchases at the lease at the
end of such calendar month most recently ended was
_________________.
(b) Number of days in the calendar month most recently
ended was __________.
(c) Actual daily lease volume
Item 2(a) divided by Item 2(b): ___________.
(d) Variance
Item 2(c) divided by the Minimum Lease Volume,
expressed as a percentage: ___________.
(e) The actual daily lease volume during the calendar
month most recently ended [was/was not] less than
ninety-eight percent (98%) of the required Minimum
Lease Volume.
The manager or officer of EOTT GP signing this instrument hereby
certifies that (i) such manager or officer is a duly elected, acting and
qualified manager or officer of EOTT GP as indicated below such manager's or
officer's signature hereto, having all necessary authority to act for EOTT GP in
its capacity as the sole General Partner of each Borrower in making the
representations, warranties and acknowledgements set forth herein and (ii) to
the best of such manager's or officer's knowledge after due inquiry and
consultation with the operating officers of each Borrower, such representations,
warranties, acknowledgments and agreements are true, correct and complete in all
material respects.
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(1) To be completed at the end of any week which is the end of the fourth
week of a calendar month.
IN WITNESS WHEREOF, this instrument is executed as of __________,
200__.
EOTT ENERGY OPERATING LIMITED PARTNERSHIP
By: EOTT ENERGY GENERAL PARTNER, L.L.C., its General
Partner
By:
---------------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
EOTT ENERGY CANADA LIMITED PARTNERSHIP
By: EOTT ENERGY GENERAL PARTNER, L.L.C., its General
Partner
By:
---------------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
EOTT ENERGY LIQUIDS, L.P.
By: EOTT ENERGY GENERAL PARTNER, L.L.C., its General
Partner
By:
---------------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
EOTT ENERGY PIPELINE LIMITED PARTNERSHIP
By: EOTT ENERGY GENERAL PARTNER, L.L.C., its General
Partner
By:
---------------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
EOTT ENERGY PARTNERS, L.P.
By: EOTT ENERGY CORP., its General Partner
By:
---------------------------------------------
Name:
-------------------------------------------
Title:
------------------------------------------
SCHEDULE J
SECOND INTERIM ORDER
IN THE UNITED STATES BANKRUPTCY COURT
FOR THE SOUTHERN DISTRICT OF TEXAS
CORPUS CHRISTI DIVISION
In re: ) (Chapter 11)
)
EOTT ENERGY PARTNERS, L.P., et al. ) Case Nos. 02-21730 through
) 02-21736
Debtors. )
) JOINTLY ADMINISTERED UNDER
) CASE NO. 02-21730
SECOND INTERIM ORDER (I) TERMINATING USE OF CASH
COLLATERAL (II) AUTHORIZING SECURED POSTPETITION
FINANCING ON A SUPERPRIORITY BASIS PURSUANT TO 11
U.S.C. SECTIONS 364 AND 507(b), (III) GRANTING RELIEF
FROM THE AUTOMATIC STAY PURSUANT TO 11 U.S.C. SECTION
362, AND (IV) AUTHORIZING ASSUMPTION OF RELATED
AMENDED EXECUTORY CONTRACTS PURSUANT TO 11.U.S.C. 365
Upon the motion (the "Motion") dated October 8, 2002 of EOTT Energy
Operating Limited Partnership, a Delaware limited partnership ("EOTT
OLP"), EOTT Energy Canada Limited Partnership, a Delaware limited
partnership ("EOTT Canada"), EOTT Energy Liquids, L.P., a Delaware
limited partnership ("EOTT Liquids"), EOTT Energy Pipeline Limited
Partnership, a Delaware limited partnership ("EOTT Pipeline" and
together with EOTT OLP, EOTT Canada and EOTT Liquids, as debtors and
debtors-in-possession herein (collectively, the "Borrowers"), EOTT
Energy Partners, L.P, a Delaware limited partnership ("EOTT MLP") and
EOTT Energy General Partner, L.L.C., a Delaware limited liability
company ("EOTT GP" together with EOTT MLP, the "Guarantors" and,
together with the Borrowers, the "Debtors") (A) seeking entry of first
interim order ("First Interim Order") pursuant to sections 363(c)(2)
and (e) of Title 11 of the United States Code, 11 U.S.C. Sections 101,
et seq. (as amended, the "Bankruptcy Code") and Rule 4001(b)(i) of the
Federal Rules of Bankruptcy Procedure (the "Bankruptcy Rules"), (i)
authorizing the use of cash collateral of the Prepetition Agent and
Prepetition Lenders (as defined below), (ii) granting security
interests in and replacement liens on all of the Debtors' currently
owned or after-acquired property and the proceeds thereof, as provided
herein, in favor of (x) the Prepetition Agent, for the benefit of the
Prepetition Lenders, to provide adequate protection for their interests
in the Prepetition Collateral (as defined herein) and (y) SCTSC to
provide adequate protection for its interests in the prepetition
Receivables Collateral and the prepetition Commodities Collateral (both
as defined herein), which security interests and liens will be junior
to the Postpetition Liens (as defined herein) and senior to any and all
other security interests and liens, except as provided herein, and
subject to the Carve-Out (as defined below); (iii) granting SCTSC
security interests in and liens on the Commodities Collateral and
Receivables Collateral (both as defined herein) to provide adequate
protection for its interests in the prepetition Receivables Collateral
and the prepetition Commodities Collateral (both as defined herein),
which security interests and liens will be senior to the Postpetition
Liens and (iv) granting administrative superpriority claims in favor of
SCTSC and the Prepetition Agent for the benefit of the Prepetition
Lenders which will be junior to the Superpriority Claims
(as defined herein) but will have priority over any and all other
administrative expenses, except as provided herein, and subject to the
Carve-Out; (B) pending a second interim hearing on the Motion (the
"Second Interim Hearing"), seeking entry of a second interim order (the
"Second Interim Order") requesting this Court's authorization pursuant
to sections 364(c)(1), 364(c)(2), 364(c)(3) and 364(d)(1) of the
Bankruptcy Code Rules 2002, 4001(c) and 9014 of the Bankruptcy Rules
for the Debtors, inter alia, (i) to obtain secured postpetition
financing pursuant to (u) a Debtor In Possession
Letter of Credit
Agreement (the "SCB DIP LC Agreement")(2) by and among the Borrowers,
Standard Chartered Bank ("SCB") as issuer (the "LC Issuer") of
postpetition letters of credit (the "Letters of Credit") and as
administrative agent (the "LC Agent") for itself and the participants
in such Letters of Credit (the "LC Participants"), (v) an overdraft
facility by and among the Borrowers and SCB and its affiliates (the
"Overdraft Facility"), (w) the Debtor In Possession Term Loan Agreement
(the "Xxxxxx DIP Credit Agreement") by and among the Borrowers, Xxxxxx
Brothers, Inc. ("Xxxxxx") as administrative agent (the "Term Lender
Agent") on behalf of itself and the term lenders party thereto,
including but not limited to Xxxxxx Commercial Paper, Inc. (the "Term
Lenders" together with the LC Participants and SCB and its affiliates
under the Overdraft Facility, the "Lenders"), (x) the Amended and
Restated Commodities Repurchase Agreement (the "Crude Oil Purchase
Agreement"), by and between Standard Chartered Trade Services
Corporation ("SCTSC") and EOTT OLP, (y) the Amended and Restated
Receivables Purchase Agreement (the "Receivables Purchase Agreement,"
together with the Crude Oil Purchase Agreement, the "SCTSC Purchase
Agreements," together with the SCB DIP
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(2) Capitalized terms not otherwise defined herein shall have the meaning
ascribed to them in the SCB DIP LC Agreement.
LC Agreement and the Xxxxxx DIP Credit Agreement, the "DIP
Facilities"), by and among SCTSC and EOTT OLP, and (z) the
intercreditor and security agreement (the "Intercreditor Agreement") by
and among the Debtors, SCB, the LC Agent, the Term Lender Agent, the
Lenders and SCTSC, under which SCB will act as collateral agent for
SCTSC, the LC Agent, the Term Lender Agent and the Lenders under the
DIP Facilities (the "Collateral Agent" together with the LC Agent and
the Term Lender Agent, the "DIP Agents"), with substantially final
forms of the foregoing agreements (except with respect to the Overdraft
Facility) having been filed with the Court and made available to
requesting parties on or before October 14, 2002, (the SCB DIP LC
Agreement, the Overdraft Facility, the Xxxxxx DIP Credit Agreement, the
SCTSC Purchase Agreements, the Intercreditor Agreement and the other
loan documents contemplated therein being collectively referred to
herein as the "DIP Financing Documents"), (ii) to assume the SCTSC
Purchase Agreements; (iii) to grant security interests in and liens on
all of the Debtors' currently owned or after-acquired property and the
proceeds thereof, other than Avoidance Actions, (the "DIP Collateral")
to the Collateral Agent for the benefit of the DIP Agents, the Lenders
and SCTSC, in order to secure the Debtors' obligations to them under
the DIP Financing Documents, which security interests and liens will be
senior to any and all other security interests and liens except as
provided herein and in the Intercreditor Agreement and subject to the
Carve-Out (the "Postpetition Liens"); (iv) to grant administrative
superpriority claims in favor of the DIP Agents, the Lenders and SCTSC
which will have priority over any and all administrative expenses,
except as provided herein and in the Intercreditor Agreement and
subject to the Carve-Out; and (v)
(a) to use a portion of the proceeds of the term loans provided
pursuant to the Xxxxxx DIP Credit Agreement (the "Term Loans") to repay
the Prepetition Loans (as defined below), (b) to use the proceeds of,
and the Letters of Credit issued under, the DIP Facilities to fund and
support the Debtors' operations (including in the amount and as
required pursuant to the settlement agreement between the Debtors and
Enron Corp. and certain subsidiaries thereof), (c) to repay their
reimbursement obligations under any Prepetition Letters of Credit
outstanding (as defined below) and cause new or replacement Letters of
Credit to be issued for the Debtors' account, which new or replacement
Letters of Credit shall be considered and treated as postpetition
obligations of the Debtors, and (d) to enter into the Commodities
Stipulation (as defined herein); and (C) in accordance with Bankruptcy
Rule 4001(c)(2), requesting this Court to schedule a Second Interim
Hearing and a final hearing (the "Final Hearing") to consider the entry
of a second interim order (the "Second Interim Order") and a final
order (the "Final Order") authorizing the DIP Facilities on a second
interim and final basis, and approve notice with respect thereto; and
the Court having considered the Motion and the DIP Financing Documents;
and, in accordance with Bankruptcy Rule 4001(c), requisite notice of
the Motion, the First Interim Order and the Second Interim and Final
Hearings having been provided; and a hearing to consider the interim
relief requested in the Motion having been held and concluded (the
"First Interim Hearing") on October 9, 2002; and, the First Interim
Order having been entered on this Court's electronic docket on October
11, 2002; and the Second Interim Hearing having been held before this
Court on October 17, 2002; and all objections, if any, to the interim
relief requested in the Motion having been withdrawn, resolved or
overruled by the Court; and it appearing to the Court that the interim
relief requested in the Motion is necessary to avoid immediate and
irreparable
harm to the estates pending the Final Hearing and otherwise is in the
best interests of the Debtors and their creditors and is essential for
the continued operation of the Debtors' businesses; and upon
consideration of the evidence presented or proffered at the First and
Second Interim Hearings; and after due deliberation and consideration
and good and sufficient cause appearing therefor
IT IS HEREBY FOUND that:
On October 8, 2002 (the "Petition Date"), the Debtors each filed a
voluntary petition for relief with this Court under Chapter 11 of the Bankruptcy
Code (collectively, the "Chapter 11 Cases"). The Debtors are continuing in
possession of their property, and operating and managing their businesses, as
debtors-in-possession, pursuant to sections 1107 and 1108 of the Bankruptcy
Code.
The Chapter 11 Cases have been consolidated for procedural purposes
only and are being jointly administered.
This Court has jurisdiction over the Chapter 11 Cases pursuant to 28
U.S.C. Sections 157(b) and 1334. Consideration of the Motion presents a core
proceeding as defined in 28 U.S.C. Section 157(b)(2).
Pursuant to the Second Amended and Restated Reimbursement, Loan and
Security Agreement, dated as of April 23, 2002, as amended (the "Prepetition
Credit Agreement"), among EOTT OLP, EOTT Canada, EOTT Liquids and EOTT Pipeline
(collectively, the "Prepetition Borrowers"), EOTT MLP and EOTT GP (collectively
the "Prepetition Guarantors"), the lenders party thereto (the "Prepetition
Lenders"), Standard Chartered Bank as administrative agent for the Prepetition
Lenders (in such capacity, the "Prepetition Agent") and issuer of prepetition
letters of credit thereunder (the "Prepetition LC Issuer"), the Prepetition
Lenders extended credit to the Prepetition Borrowers. (To the extent, if any,
that SCTSC is found to be a lender under
either of the predecessor agreements to the SCTSC Purchase Agreements, SCTSC
shall also be considered a "Prepetition Lender".)
As of the Petition Date, the Prepetition Lenders are owed approximately
$20,000,000 in revolving loan principal obligations incurred directly by the
Prepetition Borrowers, plus interest, fees and expenses thereon (the
"Prepetition Loans") and approximately $276,205,489.48 in reimbursement
obligations (either contingent, or fully due and payable) relating to letters of
credit issued and outstanding under the Prepetition Credit Agreement (the
"Prepetition Letters of Credit" and, together with the Prepetition Loans, the
"Prepetition Indebtedness"), the obligations of the Prepetition Borrowers in
respect thereof being guaranteed by the Prepetition Guarantors.
To secure the Prepetition Indebtedness, the Prepetition Borrowers
granted to the Prepetition Agent for the benefit of the Prepetition Lenders
security interests and liens (collectively referred to herein as the
"Prepetition Liens") as follows: (i) a first-priority security interest in and
lien on substantially all of the Prepetition Borrowers' assets including,
without limitation, a substantial majority of the Prepetition Borrowers' and
Prepetition Guarantors' real property and fixtures and all goods (including
without limitation, equipment and inventory), deposit accounts, investment
property, accounts, chattel paper, instruments, documents, letter of credit
rights, commercial tort claims, insurance claims, supporting obligations and
liens, real estate interests and general intangibles of the Prepetition
Borrowers and the Prepetition Guarantors of any nature, whether then owned or
thereafter acquired and any proceeds, products, rents and profits of all of the
foregoing (the "Prepetition Collateral"), with priority over all other liens
except as otherwise provided in the Prepetition Credit Agreement or under
applicable non-bankruptcy law. The Prepetition Collateral includes property
constituting "cash collateral" as defined in section 363(a) of the Bankruptcy
Code ("Cash Collateral").
Pursuant to the Crude Oil Purchase Agreement, EOTT OLP has obligations
to SCTSC to repurchase certain commodities purchased by SCTSC from EOTT OLP.
Pursuant to the Receivables Purchase Agreement, under certain circumstances,
EOTT OLP has obligations to sell certain receivables to SCTSC at certain prices.
Under both SCTSC Purchase Agreements, EOTT OLP is obligated to pay interest,
yield, fees and collection costs or other costs to SCTSC in connection therewith
(all of the foregoing obligations, together with EOTT OLP's repurchase
obligations under the Crude Oil Purchase Agreement, collectively, the
"Prepetition Purchase Obligations").
As a precautionary measure, the Prepetition Purchase Obligations are
secured by a perfected first-priority security interest and lien granted by EOTT
OLP to SCTSC, in and on (x) all receivables and contract rights purchased by
SCTSC under the Receivables Purchase Agreement and all proceeds related thereto
(the "Receivables Collateral") and (y) all commodities purchased by SCTSC but
not repurchased by the EOTT OLP under the Crude Oil Purchase Agreement, all
documents of title delivered to SCTSC pursuant thereto and all proceeds thereof
(the "Commodities Collateral").
The Debtors will be provided thirty (30) days from the Petition Date to
assert any claims or commence any causes of action against the Prepetition
Agent, the Prepetition Lenders (including the Prepetition Agent's or Prepetition
Lenders' directors, officers, employees or agents) or SCTSC (including SCTSC's
directors, officers, employees or agents) to object to or challenge (x) the
validity, enforceability, extent, perfection or priority of the Prepetition
Liens in the Prepetition Collateral and SCTSC's liens in the Receivables
Collateral and the Commodities Collateral; (y) the validity, allowability,
priority, status or amount of the Prepetition Indebtedness and the Prepetition
Purchase Obligations; or (z) to assert any avoidance or subordination actions
with respect to the Prepetition Indebtedness and the Prepetition Purchase
Obligations; provided,
however, that if the Debtors do not commence such an action or assert such a
claim within such 30-day period, the Prepetition Borrowers and the Prepetition
Guarantors will acknowledge and agree that (i) the Prepetition Liens and SCTSC's
liens on the Receivables Collateral and the Commodities Collateral are valid,
binding, enforceable and perfected liens with priority over all other liens
(other than the Postpetition Liens) except as otherwise provided in the
Prepetition Credit Agreement or under applicable non-bankruptcy law, and are not
subject to avoidance or subordination pursuant to the Bankruptcy Code or
applicable non-bankruptcy law; (ii) the Prepetition Indebtedness and the
Prepetition Purchase Obligations constitute legal, valid and binding obligations
of the Debtors, enforceable in accordance with the terms of the Prepetition
Credit Agreement and the SCTSC Purchase Agreements (other than in respect of the
stay of enforcement arising from section 362 of the Bankruptcy Code); (iii) no
offsets, defenses or counterclaims of any kind to the Prepetition Indebtedness
and the Prepetition Purchase Obligations exist, and no portion of the
Prepetition Indebtedness or the Prepetition Purchase Obligations is subject to
avoidance or subordination pursuant to the Bankruptcy Code or applicable
non-bankruptcy law; (iv) the Prepetition Borrowers and Prepetition Guarantors
have no claims or causes of action, including, without limitation, avoidance
actions under Chapter 5 of the Bankruptcy Code (the "Avoidance Actions") against
the Prepetition Agent or the Prepetition Lenders (including the Prepetition
Agent's or Prepetition Lenders' directors, officers, employees or agents) or
SCTSC (including SCTSC's directors, officers, employees or agents)); and (v) as
of the Petition Date, the Prepetition Indebtedness and the Prepetition Purchase
Obligations constitute allowed secured claims within the meaning of section 506
of the Bankruptcy Code in an amount that is not less than $276,205,489.48, plus
additional interest and fees, including, without limitation, attorneys' fees and
related expenses, and other charges owing in respect thereof.
Pursuant to sections 361, 362, 363 and 364 of the Bankruptcy Code, (a)
the Prepetition Agent and the Prepetition Lenders are entitled to adequate
protection of their interest in the Prepetition Collateral, including for the
Debtors' use of Cash Collateral, any diminution in the value of the Prepetition
Collateral (including Cash Collateral), resulting from the Debtors' use, sale or
lease of the Prepetition Collateral, the imposition of the automatic stay and
the priming of the Prepetition Liens as described below, and (b) SCTSC is
entitled to adequate protection of its interest in the Receivables Collateral
and the Commodities Collateral, including for the Debtors' use of Cash
Collateral, any diminution in the value of the Receivables Collateral and the
Commodities Collateral resulting from the Debtors' use, sale or lease of the
Receivables Collateral or the Commodities Collateral and the imposition of the
automatic stay. The DIP Facilities will enable the Debtors to continue operating
their businesses and thereby preserve the value of the Prepetition Collateral,
the Receivables Collateral and the Commodities Collateral.
The Debtors operate one of the largest independent crude oil gathering
and marketing operations in North America and engage in interstate and
intrastate crude oil transportation, crude oil terminalling and storage
activities and refined petroleum products marketing. Prior to the Petition Date,
the Debtors used proceeds from the Prepetition Credit Agreement to purchase
crude oil and other inventory items for their marketing and pipeline operations
and otherwise to finance their business activities.
An immediate need exists for the Debtors to obtain funds with which to
purchase inventory, continue their business operations, and administer and
preserve the value of their estates. Upon entry of the First Interim Order, the
Debtors were authorized to use Cash Collateral for the Specified Period as
defined in the First Interim Order up to an amount not to exceed $58,255,847.00.
Upon entry of this Second Interim Order, the Debtors' authority to use Cash
Collateral shall cease. The Debtors now seek authority to enter into the DIP
Facilities upon
this Court's signing of this Second Interim DIP Order, failing which the Debtors
would suffer immediate and irreparable harm to estates. In the absence of the
DIP Facilities, the continued operation of the Debtors' businesses would not be
possible. The Debtors do not have sufficient available sources of working
capital and financing to operate their businesses in the ordinary course of
business or maintain their property in accordance with state and federal law
without the DIP Facilities. The Debtors' ability to maintain business
relationships with their vendors, suppliers and customers, to pay their
employees and otherwise finance their operations is essential to the Debtors'
continued viability.
Given the Debtors' current financial condition, financing arrangements
and capital structure, the Debtors are unable to obtain financing from sources
other than the Lenders and SCTSC on terms more favorable than under the DIP
Facilities. The Debtors have been unable to obtain interim unsecured credit
solely under section 503(b)(1) of the Bankruptcy Code as an administrative
expense. The Debtors have been unable to obtain credit (i) having priority over
that of administrative expenses of the kind specified in sections 503(b) and
507(a) and (b) of the Bankruptcy Code, (ii) secured by a lien on property of the
estates that is not otherwise subject to a lien or (iii) secured solely by a
junior lien on property of the estates that is subject to a lien.
Financing on a postpetition basis is not otherwise available without
(i) the granting to the Collateral Agent for the benefit of DIP Agents, the
Lenders and SCTSC of superpriority claims, perfected first-priority security
interests in, priming liens and junior liens, as provided below, on all of the
Debtors' assets (except Avoidance Actions) and (ii) the granting to the
Prepetition Agent and the Prepetition Lenders of adequate protection,
replacement liens and superpriority claims, pursuant to sections 361, 362, 363
and 364 of the Bankruptcy Code and in the DIP Financing Documents.
The Debtors are seeking authority to (a) enter into the DIP Facilities;
(b) assume the SCTSC Purchase Agreements; (c) use proceeds of the Term Loans to
repay the Prepetition Loans; (d) use the proceeds of, and Letters of Credit
issued under, the DIP Facilities to fund and support the Debtors' operations in
accordance with the Budget (as defined herein), as well as in the amount and as
required pursuant to the settlement agreement between the Debtors and Enron
Corp. and certain subsidiaries thereof, and (e) satisfy their reimbursement
obligations under any Prepetition Letters of Credit outstanding and cause new
and replacement letters of credit to be issued for the Debtors' account which
letters of credit shall thereupon be considered and treated as postpetition
obligations of the Debtors up to an amount not to exceed $325,000,000, all on
the terms described herein and in the DIP Financing Documents.
In connection with the assumption of the Crude Oil Purchase Agreement,
the Debtors seek to stipulate with SCTSC that (1) all rights, title and interest
to the crude oil in the pipelines owned or used by EOTT OLP up to a maximum of
3,000,000 barrels on the date of such assumption belong to SCTSC, and (2)
notwithstanding that crude oil is injected into and released from such pipelines
from time to time after such assumption, all rights, title and interest to the
barrels of crude oil described in the preceding clause (1) shall be deemed to
belong to SCTSC, to the extent that such crude oil has not been repurchased by
EOTT OLP pursuant to the terms of the Crude Oil Purchase Agreement (the
"Commodities Stipulation").
In light of (a) the Prepetition Agent's and the Prepetition Lenders'
agreement to the priming of the Prepetition Liens as provided herein and the
Carve-Out, (b) the DIP Agents' and the Lenders' agreement to provide necessary
financing to the Debtors and their agreement to the Carve-Out, and (c) the
agreement of SCTSC to the assumption of the SCTSC Purchase Agreements, the DIP
Agents, the Lenders, SCTSC, the Prepetition Agent, and the Prepetition
Lenders are seeking a waiver of claims under section 506(c) of the Bankruptcy
Code and of any "equities of the case" claim under section 552(b) of the
Bankruptcy Code.
The Lenders and SCTSC have indicated a willingness to provide financing
to the Debtors subject to (i) the entry of this Second Interim Order (ii) the
terms and conditions of the DIP Financing Documents and (iii) findings by the
Court that such financing is essential to the Debtors' estates, that the Lenders
and SCTSC will be providing such financing in good faith, and that the
Collateral Agent's (on behalf of the DIP Agents, the Lenders and SCTSC)
mortgages, security interests, liens, claims, superpriority claims and other
protections granted pursuant to this Second Interim Order, and the DIP
Facilities will not be affected by any subsequent reversal, modification,
vacatur or amendment of this Second Interim Order or any other order, as
provided in section 364(e) of the Bankruptcy Code.
The terms of this Second Interim Order and the DIP Financing Documents
are fair and reasonable, and reflect the Debtors' exercise of prudent business
judgment consistent with their fiduciary duties. The extensions of credit
authorized herein are supported by reasonably equivalent value and fair
consideration and have been negotiated in good faith and at arm's length among
the Debtors, and the DIP Agents, the Lenders, the Prepetition Agents, the
Prepetition Lenders and SCTSC. Any credit extended, letters of credit issued or
loans made or funds advanced to pursuant to the DIP Financing Documents shall be
deemed to have been extended, issued, made, advanced or, as the case may be,
permitted to be used in good faith by the Lenders, the Prepetition Lenders and
SCTSC as required by, and within the meaning of, section 364(e) of the
Bankruptcy Code.
Notice of the Second Interim Hearing and the Final Hearing and the
entry of this Second Interim Order has been properly provided to (i) the Office
of the United States Trustee, (ii) the holders of the twenty (20) largest
prepetition unsecured claims against the Debtors' estates, (iii)
the Prepetition Agent, (iv) the DIP Agents, (v) the Collateral Agent, (vi)
counsel to the ad hoc committee of noteholders, (vii) SCTSC and (viii) those
parties that filed a request for service of documents. Notice of the Motion and
the relief requested thereby have been given in accordance with Bankruptcy Rule
4001, and is sufficient under the Bankruptcy Code, including, without
limitation, sections 102(a) and 364 of the Bankruptcy Code, and no other notice
need be given for entry of this Second Interim Order.
Based upon the foregoing findings and conclusions, and upon the record
made before this Court at the First Interim Hearing and the Second Interim
Hearing, and good and sufficient cause appearing therefor
IT IS HEREBY ORDERED that:
1. The Motion is granted, subject to the terms and conditions
set forth in this Second Interim Order.
CASH COLLATERAL TERMINATION
2. Cessation of Cash Collateral Use. As indicated in the First
Interim Order, upon entry of this Second Interim Order, the authorization of the
Debtors to use the Cash Collateral of $58,255,847.00 shall, and hereby does,
cease.
DIP FINANCING AUTHORIZATION AND ASSUMPTION OF SCTSC PURCHASE AGREEMENTS
3. Authorization of the Financing and the Documents. On or
before October 14, 2002, the Debtors filed and made available to all creditors
and parties in interest substantially final versions of the principal DIP
Financing Documents. Modifications made to the DIP
Financing Documents subsequent to their filing with the Court on October 14,
2002, were not material and did not adversely affect the rights of creditors or
other parties in interest. The Debtors and Lenders are hereby authorized to make
such additional modifications to the DIP Financing Documents without further
order of the Court, provided that any such modifications are not material. The
Debtors are hereby expressly authorized, empowered and directed to complete,
execute and deliver the DIP Financing Documents and to perform their obligations
hereunder and thereunder (the "DIP Obligations") in accordance with, and subject
to, the terms of this Second Interim Order and the DIP Financing Documents. The
Debtors are hereby authorized and directed to pay the fees and other expenses
described in the DIP Financing Documents as such become due, including, without
limitation, agents' fees, facility fees, arranger fees, commitment fees, letter
of credit fees and the reasonable fees and disbursements of the DIP Agents' and
SCTSC's attorneys, financial advisers and accountants and as provided in the DIP
Financing Documents. Upon execution and delivery of the DIP Financing Documents,
they shall represent valid and binding obligations of the Debtors, enforceable
against each of the Debtors in accordance with their terms.
4. Assumption of SCTSC Purchase Agreement. In accordance with
sections 364, 365 and 549 of the Bankruptcy Code, the Debtors are hereby
expressly authorized, empowered and directed to assume the SCTSC Purchase
Agreements and to perform their obligations hereunder and thereunder, including,
without limitation, the payment of the fees and other expenses described in the
SCTSC Purchase Agreements as they become due. The automatic stay is hereby
modified to permit SCTSC to deposit to its account such fees, other expenses and
any other payments received from the Debtors in accordance with the terms of the
SCTSC Purchase Agreements, which payments are hereby authorized.
5. Approval of Commodities Stipulation. EOTT OLP and SCTSC
hereby stipulate and agree as follows:
(a) All rights, title and interest to the crude oil in the
pipelines owned or used by EOTT OLP, in the amount to be specified in
the Crude Oil Purchase Agreement, up to a maximum of 3,000,000 barrels
on the date of assumption of the Crude Oil Purchase Agreement by SCTSC,
belong to SCTSC.
(b) Notwithstanding that crude oil is injected into and
released from such pipelines from time to time after the date of
assumption of the Crude Oil Purchase Agreement by SCTSC, all rights,
title and interest to such specified barrels of crude oil in such
pipelines shall be deemed to belong to SCTSC to the extent that such
crude oil has not been repurchased by EOTT OLP pursuant to the terms of
the Crude Oil Purchase Agreement.
(c) This Commodities Stipulation shall be binding on the
employees, agents, successors and assigns of EOTT OLP, including any
trustee appointed in any of these Chapter 11 Cases or superseding cases
under Chapter 7 of the Bankruptcy Code, and on any person or entity
appointed for purposes of implementing a plan of reorganization or
resolving claims in any of these Chapter 11 Cases.
The Court hereby approves the Commodities Stipulation as part of this Second
Interim Order.
6. Drawings under the DIP Facilities. Subject to the terms and
conditions of the DIP Financing Documents, the Debtors are hereby authorized
through the Termination Declaration Date (a) to draw the full amount of the Term
Loans in an amount not to exceed $75,000,000, (b) to use proceeds of the Term
Loans in an amount not to exceed $40,000,000 to repay the Prepetition Loans, (c)
to use proceeds of, and Letters of Credit issued under, the DIP
Facilities to fund and support the Debtors' operations in accordance with the
budget approved by this Court from time to time (the "Budget") (with any line
item variance not to exceed 10% and any total overall variance not to exceed 5%)
(including in the amount and as required pursuant to the settlement agreement
between the Debtors and Enron Corp. and certain subsidiaries thereof), (d) to
use the proceeds of the Overdraft Facility not to exceed $15,000,000 for cash
management services, and (e) to obtain Letters of Credit under the SCB DIP LC
Agreement in an amount not to exceed $325,000,000, inclusive of (i) outstanding
Prepetition Letters of Credit which upon entry of this Second Interim Order
shall be considered and treated as Letters of Credit issued under the SCB DIP LC
Agreement by SCB for the Debtors' account as postpetition obligations of the
Debtors and (ii) new Letters of Credit to be issued by SCB for the Debtors'
account as postpetition obligations of the Debtors. Clause (e)(i) of the
foregoing sentence is without prejudice to the estates' right to cause
disgorgement from the holders of the repaid Prepetition Indebtedness to the
extent, if any, that any of the Prepetition Indebtedness or any of the
Prepetition Liens is determined to be avoidable or undersecured in accordance
with and subject to paragraph 15, below.
7. DIP Obligations. The DIP Obligations include, without
limitation, all loans, advances, letter of credit reimbursement obligations,
repurchase obligations, overdraft obligations and any other indebtedness or
obligations, contingent or absolute, which may now or from time to time
hereafter be owing by the Debtors to any of the DIP Agents, the Lenders or SCTSC
under any of the DIP Financing Documents or hereunder, including, without
limitation, all principal and accrued interest, reimbursement obligations under
letters of credit, costs, and reasonable fees and expenses incurred in
connection therewith.
8. Superpriority Claims. In accordance with sections 364(c)(1)
and 507(b) of the Bankruptcy Code, subject to the Carve-Out and without
prejudice to the rights of the Debtors as
set forth in paragraph 15, the DIP Obligations will constitute claims (the
"Superpriority Claims") with priority in payment over any and all administrative
expenses of the kinds specified or ordered pursuant to any provision of the
Bankruptcy Code, including, but not limited to, sections 105, 326, 328, 330,
331, 503(b), 506(c), 507(a), 507(b), 546(c), 726 (to the extent permitted by
law), 1113 and 1114 of the Bankruptcy Code and shall at all times be senior to
the rights of the Debtors, any successor trustee to the extent permitted by law,
or any other creditor in the Chapter 11 Cases. The relative priorities of the
Superpriority Claims as among the DIP Agents, the Lenders and SCTSC are set
forth in the Intercreditor Agreement; however, the Superpriority Claims shall
have priority over the Adequate Protection Superpriority Claims provided for
below.
9. Postpetition Liens. As security for the DIP Obligations,
each of the Debtors is hereby authorized and directed to grant, and hereby
grants, to the Collateral Agent, for the benefit of the DIP Agents, the Lenders
and SCTSC, the Postpetition Liens in the nature of perfected, valid, binding and
enforceable security interests and liens, subject to the Carve-Out and without
prejudice to the rights of the Debtors pursuant to paragraph 15, below, as
follows:
(a) pursuant to section 364(c)(2) of the Bankruptcy Code, a
perfected first-priority security interest in and lien on
the DIP Collateral, owned as of the Petition Date or
thereafter acquired, that was not encumbered as of the
Petition Date; and
(b) pursuant to section 364(c)(3) of the Bankruptcy Code, a
perfected security interest in and lien on all other DIP
Collateral, owned as of the Petition Date or thereafter
acquired, which security interest and lien shall, except
as provided in clause (c) below, be junior in priority to:
(i) any other security interest in or lien on
such assets to the extent that, as of the
Petition Date, such other security interest
or lien was valid, perfected and not subject
to avoidance and senior to the Prepetition
Liens, and
(ii) any security interest in or lien on proceeds
or products of, or accessions to, assets
subject to a security interest or lien
referred to in the foregoing clause (i) and
arising or created after the Petition Date
to the extent that (A) such security
interest in or lien on the proceeds,
products or accessions would have been
valid, perfected and not subject to
avoidance if the proceeds, products or
accessions had arisen or been created
immediately prior to the commencement of
these Chapter 11 Cases and (B) such security
interest in or lien on the proceeds,
products or accessions would be entitled,
under applicable non-bankruptcy law, to
priority over any security interest in or
lien on the proceeds, products or accessions
securing the Prepetition Indebtedness; and
(c) pursuant to section 364(d)(1) of the Bankruptcy Code, the
security interest and lien referred to in clause (b) above
shall be senior in priority to the Prepetition Liens and
to any security interests and liens to which the
Prepetition Liens are senior in priority.
The Postpetition Liens will not be subject to any security interest or lien
which is avoided and preserved for the benefit of the Debtors' estates under
section 551 of the Bankruptcy Code, and the Postpetition Liens will not be
subordinated to or made pari passu with any other lien under section 364(d) of
the Bankruptcy Code or otherwise. Receiving the benefits of the Postpetition
Liens will not make the Collateral Agent, the DIP Agents, the Lenders or SCTSC
responsible for any obligations or liabilities of the Prepetition Borrowers, the
Prepetition Guarantors or the Debtors with respect to the DIP Collateral,
including without limitation any obligations or liabilities for environmental
remediation. The relative priorities of the benefits of the Postpetition Liens
as among the DIP Agents, the Lenders and SCTSC are hereby ordered to be as set
forth in the Intercreditor Agreement.
PROVISIONS APPLICABLE TO BOTH THE AUTHORIZED USE OF CASH COLLATERAL AND THE
PROPOSED FINAL DIP FINANCING AUTHORIZATION
10. Section 506(c) Waiver. The Debtors shall not assert a
claim under section 506(c) of the Bankruptcy Code for any costs and expenses
incurred in connection with the preservation, protection or enhancement of, or
realization by the DIP Agents, the Lenders,
SCTSC, the Prepetition Agents or the Prepetition Lenders upon, the DIP
Collateral, the Prepetition Collateral, the Receivables Collateral, the
Commodities Collateral or the collateral subject to the liens that secure the
Adequate Protection Obligations or for any expenses of the administration of the
estate. The DIP Agents, the Lenders and SCTSC shall not be subject to the
equitable doctrine of "marshalling" or any other similar doctrine with respect
to any DIP Collateral.
11. Priority of Superpriority Claims. No cost or expense of
administration under sections 105, 364(c)(1), 503(b), 506(c), 507(b), 726 (to
the extent permitted by law), 1113, 1114 or otherwise of the Bankruptcy Code,
shall be senior to, equal to, or pari passu with the Superpriority Claims,
subject only to the Carve-Out.
12. Carve-Out. As used in this Second Interim Order,
"Carve-Out" means, at any time of determination, the sum of (a) allowed
administrative expenses payable pursuant to 28 U.S.C. Section 1930(a)(6) and (b)
Priority Professional Expenses (as defined below), subject to the Priority
Expense Cap (as defined below). "Priority Professional Expenses" means allowed
fees, costs and reasonable expenses of professionals retained by the Debtors and
the official committee of unsecured creditors (the "Committee") or any official
committee of noteholders in the Chapter 11 Cases pursuant to sections 327 and
1103 of the Bankruptcy Code, but shall not include fees, costs and expenses of
third-party professionals employed by the members of the Committee. "Priority
Expense Cap" means upon the occurrence of the Termination Declaration Date, all
unpaid Priority Professional Expenses (including holdbacks) up to an aggregate
of $2,000,000. With respect to clause (b) above, Priority Professional Expenses
shall not include fees or expenses incurred by any Person, including the
Debtors, the Committee or any committee of noteholders, in (i) preventing,
hindering or delaying the Lenders', the DIP Agents' or SCTSC's enforcement or
realization upon any of the DIP Collateral, Receivables Collateral or
Commodities Collateral once an Event of Default has occurred, (ii) using or
seeking to use Cash Collateral or selling DIP Collateral, Receivables Collateral
or Commodities Collateral without the DIP Agents' and SCTSC's consent, except as
authorized herein, (iii) incurring indebtedness without the DIP Agents' and
SCTSC's consent, (iv) objecting to or contesting in any manner, or raising any
defenses to, the validity, extent, amount, perfection, priority or
enforceability of the Prepetition Indebtedness or the DIP Obligations or any
mortgages, liens or security interests with respect thereto or any other rights
or interests of the DIP Agents, the Lenders and SCTSC, or in asserting any
claims or causes of action, including, without limitation, any Avoidance Actions
or requests for equitable subordination, against the DIP Agents, the Lenders,
SCTSC, the Prepetition Agent or the Prepetition Lenders, (v) objecting to or
contesting in any manner, or raising any defenses to, the validity, or
enforceability of the SCTSC Purchase Agreements or the amounts due SCTSC
thereunder, or (vi) investigating the validity, enforceability, extent,
perfection and priority of the Prepetition Liens or the validity or
enforceability of the SCTSC Purchase Agreements if another Person has already
commenced or conducted an investigation of claims, causes of action and
equitable theories for relief against the Prepetition Agent, the Prepetition
Lenders of SCTSC, and claims and causes of action challenging the validity,
enforceability, extent, perfection and priority of the Prepetition Liens or the
liens on the Commodities Collateral and the Receivables Collateral. The
exclusion from Priority Professional Expenses shall not include the first
$75,000 in expenses incurred by the Debtors (or an authorized substitute for the
Debtors if the Debtors are for some reason unable to conduct an investigation)
in conducting an investigation within 30 days following the Petition Date, of
claims, causes of action or theories for litigation regarding (a) the validity,
enforceability, perfection or priority of the Prepetition Liens in the
Prepetition Collateral, (b) the validity, allowability, priority, status or
amount of the Prepetition Indebtedness or (c) the validity and
enforceability of the SCTSC Purchase Agreements; provided, however, that any
expenses in excess of $75,000, or any expenses incurred by a Person in
conducting such an investigation when one has already been conducted or is
ongoing shall be excluded from Priority Professional Expenses. The Carve-Out
shall not apply to the liens securing the SCTSC Purchase Agreements, the
Receivables Collateral and the Commodities Collateral.
13. Permission to Pay Compensation. Nothing herein shall be
construed as consent to the allowance of any Priority Professional Expenses or
shall affect the right of the DIP Agents, the Lenders, SCTSC, the Prepetition
Agent or the Prepetition Lenders to object to the allowance and payment of such
expenses. Prior to the Termination Declaration Date, the Debtors shall be
permitted to pay compensation and reimbursement of expenses (other than those
excluded from Priority Professional Expenses) authorized to be paid under
sections 330 and 331 of the Bankruptcy Code or otherwise pursuant to an order of
this Court, as the same may be due and payable, and such payments shall not
reduce the Carve-Out.
14. Adequate Protection. (A) To the extent appropriate and
necessary, as adequate protection of their interest in the Prepetition
Collateral, including for any diminution in the value of the Prepetition
Collateral resulting from the Debtors' use, sale or lease of the Prepetition
Collateral, the imposition of the automatic stay, the priming of the Prepetition
Liens and the Prepetition Agent's and the Prepetition Lenders' consent to the
Carve-Out, the Prepetition Agents and Prepetition Lenders are hereby granted (i)
monthly cash payments comprised of interest on the Prepetition Loans, advances
and letter of credit reimbursement obligations, letter of credit fees, accrued
and unpaid fees, expenses and any out-of-pocket expense reimbursements owing on
or after the Petition Date to the Prepetition Agent under the Prepetition Credit
Agreement, until such time as all Prepetition Indebtedness is indefeasibly paid
in full, provided that no Event of Default has occurred and is continuing under
the SCB DIP LC
Agreement or the Xxxxxx DIP Credit Agreement; and (ii) Adequate Protection Liens
in the form of additional and replacement security interests in and liens on the
DIP Collateral and Adequate Protection Superpriority Claims in the form of
superpriority claims equivalent in scope to those granted to the DIP Agents and
the Lenders under the DIP Facilities and this Second Interim Order, such
Adequate Protection Liens and Adequate Protection Superpriority Claims being
junior only to (x) the Postpetition Liens and Superpriority Claims granted in
this Second Interim Order with respect to the DIP Obligations, and (y) any
perfected and non-avoidable security interests and liens to which the
Postpetition Liens are junior, in all cases subject to the Carve-Out; and (B) to
the extent appropriate and necessary, as adequate protection of its interest in
the prepetition Receivables Collateral and the prepetition Commodities
Collateral, including for any diminution in the value of the prepetition
Receivables Collateral and the prepetition Commodities Collateral resulting from
the Debtors' use, sale or lease of the prepetition Receivables Collateral or the
prepetition Commodities Collateral and the imposition of the automatic stay,
SCTSC is hereby granted (i) Adequate Protection Liens in the form of additional
and replacement security interests in and liens on the DIP Collateral and
Adequate Protection Superpriority Claims in the form of superpriority claims
equivalent in scope to those granted to the DIP Agents and the Lenders under the
DIP Facilities and this Second Interim Order, such Adequate Protection Liens and
Adequate Protection Superpriority Claims being junior only to (x) the
Postpetition Liens and Superpriority Claims granted in this Second Interim Order
with respect to the DIP Obligations, and (y) any perfected and non-avoidable
security interests and liens to which the Postpetition Liens are junior; and
(ii) the Adequate Protection Receivables Lien and the Adequate Protection
Commodities Lien such Adequate Protection Receivables Lien and Adequate
Protection Commodities Lien being junior only to the Postpetition Liens and
Superpriority Claims granted in this Second Interim Order with respect to the
DIP Obligations.
15. Debtors' Right to Challenge Liens. Nothing in this Order
or the DIP Financing Documents shall prejudice the rights of the Debtors to
object to or challenge (a) the validity, enforceability, extent, perfection or
priority of the Prepetition Liens in the Prepetition Collateral and SCTSC's
prepetition liens in the Receivables Collateral and the Commodities Collateral,
or (b) the validity, allowability, priority, status or amount of the Prepetition
Indebtedness and the Prepetition Purchase Obligations; provided, however, that
unless the Debtors commence, as appropriate, a contested matter or adversary
proceeding raising such objection or challenge within 30 days after the Petition
Date, all such challenges and objections shall be forever waived, and the
Prepetition Indebtedness and the Prepetition Purchase Obligations shall be
allowed as secured claims within the meaning of section 506 of the Bankruptcy
Code for all purposes in connection with the Chapter 11 Cases and as set forth
in this Second Interim Order. No such period of limitation shall be extended
without the written consent of SCB and SCTSC. Thereafter, any and all objections
or challenges (including, but not limited to, those under sections 544, 547
and/or 548 of the Bankruptcy Code), by any party (including, without limitation,
the Committee, any committee of noteholders and any Chapter 11 or Chapter 7
trustee appointed herein) to the validity, allowability, enforceability,
sufficiency, extent, perfection, status or priority, or seeking the avoidance or
equitable subordination of the Prepetition Liens, the Prepetition Indebtedness
or any payments thereon, and the Prepetition Purchase Obligations shall be
forever barred. Notwithstanding the foregoing, for the avoidance of doubt, the
Prepetition Liens shall not have priority over other liens to the extent so
provided in the Prepetition Credit Agreement or under applicable non-bankruptcy
law.
16. Obligation to Advance Funds. The DIP Agents and Lenders
shall have no obligation to make any loan or advance or issue any Letters of
Credit or Term Loans under the
DIP Facilities unless the conditions precedent to the making of such Term Loan
or advance or issuing of such DIP LC under the DIP Financing Documents are
satisfied.
17. Use of Proceeds. From and after the Petition Date, the
Debtors shall use the proceeds of the loans and advances pursuant to the DIP
Facilities, and the Debtors shall request letters of credit to be issued,
extended or renewed, only for the purposes specifically set forth in the DIP
Financing Documents.
18. Perfection of Liens Granted by Second Interim Order. The
security interests, liens and priority granted to the Collateral Agent on behalf
of the DIP Agents, the Lenders and SCTSC, to the Prepetition Agent on behalf of
itself and the Prepetition Lenders and to SCTSC pursuant to this Second Interim
Order and the DIP Financing Documents shall be fully perfected by operation of
law upon execution of this Second Interim Order by the Court such that no
additional steps need be taken to perfect the security interests and liens or to
insure the priority thereof. None of the Collateral Agent, the Prepetition Agent
or SCTSC is required to obtain or file financing statements, mortgages, bank
account control agreements, amendments, notices of lien or similar instruments
in any jurisdiction or effect any other action to attach, perfect or establish
the priority of the Postpetition Liens and Adequate Protection Liens granted
under this Second Interim Order and the DIP Financing Documents. Notwithstanding
the foregoing, the Collateral Agent, SCTSC or the Prepetition Agent may, in its
or their sole discretion, obtain and file such financing statements, mortgages,
bank account control agreements, amendments, notices of liens and other similar
documents, and is hereby granted relief from the automatic stay contained in
section 362 of the Bankruptcy Code in order to do so. The Debtors shall execute
and deliver to the Collateral Agent, SCTSC or the Prepetition Agent all such
financing statements, mortgages, bank account control agreements, amendments,
notices and other documents as the Collateral Agent, SCTSC or the Prepetition
Agent may reasonably request to
evidence, confirm, validate or perfect, or to insure the contemplated priority
of the Postpetition Liens or the Adequate Protection Liens granted pursuant
hereto and the DIP Financing Documents.
19. Rights of Access to Information. Without limiting the
rights of access and information afforded the DIP Agents and the Lenders under
the DIP Financing Documents, the Debtors shall be and hereby are required to
afford representatives, agents and/or employees of the DIP Agents and the
Lenders access to the Debtors' premises and their personnel and records, in
whatever form maintained, in accordance with the DIP Financing Documents and
shall, and hereby are directed to, cooperate, consult with, and provide to such
persons all such non-privileged information and information not subject to a
binding confidentiality agreement.
20. "Equities of the Case". No person may assert an "equities
of the case" claim under section 552(b) of the Bankruptcy Code against the
Prepetition Agent, the Prepetition Lenders or SCTSC with respect to proceeds,
product, offspring or profits of the Prepetition Collateral.
21. Automatic Modification of Automatic Stay. The automatic
stay of section 362(a) of the Bankruptcy Code shall be, and it hereby is,
modified to the extent necessary to permit the DIP Agents for the sole benefit
of themselves, SCTSC and the Lenders, and the Prepetition Agent for the sole
benefit of the Prepetition Lenders, and SCTSC to receive, collect and apply
payments and proceeds in respect of the DIP Collateral, the Prepetition
Collateral, the Commodities Collateral and the Receivables Collateral and any
collateral subject to Adequate Protection Liens in accordance with the terms and
provisions of this Order and the DIP Financing Documents.
22. DIP Obligations Automatically Due and Payable. The DIP
Obligations shall be due and payable, without notice or demand, on the
Termination Declaration Date. Any
Letter of Credit outstanding on the Termination Declaration Date that is not
replaced shall be cash collateralized in an amount equal to a percentage of the
maximum drawing amount, which percentage shall be acceptable to the LC Agent.
23. Waiting Period. As more fully described in section 3.2(d)
of the Intercreditor Agreement, a waiting period of up to ten business days
shall occur when more than $15,000,000 in Letters of Credit are drawn during any
one month. As provided in section 3.2(d) of the Intercreditor Agreement, during
such waiting period, certain duties of the Lenders and SCTSC shall be suspended
(including, among others, the obligation of SCB to issue Letters of Credit or
otherwise extend credit under the DIP Financing Documents and the obligation of
SCTSC to make payments under the Purchase Agreements) and the Debtors' access to
cash shall be restricted.
24. Events of Default. As long as any portion of the DIP
Obligations remains unpaid or any DIP Financing Document remains in effect, in
addition to events of default which occur under the DIP Financing Documents, it
shall also constitute an event of default if (a) there shall be entered any
order dismissing any of the Chapter 11 Cases or converting any of the Chapter 11
Cases to a case under Chapter 7 of the Bankruptcy Code; (b) there shall be
entered in any of the Chapter 11 Cases or any subsequent Chapter 7 case any
order which authorizes under any section of the Bankruptcy Code, including
sections 105 or 364 of the Bankruptcy Code, (i) the granting of security
interest in or any lien and any property of the Debtors in favor of any party
(other than liens granted pursuant to this Second Interim Order or otherwise
permitted herein) or (ii) the obtaining of credit or the incurring of
indebtedness that is entitled to superpriority administrative status, in either
case equal or superior to the Superpriority Claims; (c) the appointment of a
Chapter 11 trustee or examiner with expanded powers; or (d) the Debtors seek any
of the foregoing relief unless, in connection with any transaction cited in
clause
(b) of this paragraph 24, such order requires that the DIP Obligations be
indefeasibly paid in full first (including cash collateralization of all
reimbursement obligations in respect of Letters of Credit) and, as to clauses
(a) and (c) hereof, without the prior written consent of the DIP Agents, the
requisite Lenders and SCTSC.
25. Remedies Upon Events of Default. Upon the occurrence of an
Event of Default (under any of the First Interim or Second Interim Orders or
pursuant to the DIP Facilities), each of the DIP Agents and SCTSC may (subject
to the Intercreditor Agreement) declare all DIP Obligations owing under the
applicable DIP Facilities to be immediately due and payable and may declare a
termination of any further commitment to extend credit to the Borrowers to the
extent any such commitment remains. Upon the declaration of an Event of Default
(under any of the First Interim or Second Interim Orders or pursuant to the DIP
Facilities) or termination of commitment under the SCB DIP LC Agreement and
acceleration of the DIP Obligations by any DIP Agent, the obligations of the
Debtors to SCTSC under the Purchase Agreements and the Adequate Protection
Obligations described in paragraph 14 with respect to the Prepetition Lenders
and SCTSC shall be immediately due and payable and the Debtors' right to use
cash collateral shall cease. Similarly, upon SCTSC's declaration of an event of
default and acceleration of EOTT OLP's obligations under the Purchase
Agreements, the obligations of the Debtors to the DIP Agents and the Lenders
under the DIP Loan Documents and the Adequate Protection Obligations described
in paragraph 13 with respect to SCTSC and the Prepetition Lenders shall be
immediately due and payable and the Debtors' right to use cash collateral shall
cease. Upon the occurrence of an Event of Default and following the giving of
five business days' notice to the Debtors, the Committee, and the United States
Trustee, and subject to the terms and provisions with respect to remedies
contained in the Intercreditor Agreement as between the Lenders and SCTSC, the
DIP Agents shall have immediate relief
from the automatic stay and may foreclose on all or any portion of the DIP
Collateral, as permitted by applicable non-bankruptcy law (including exercise of
rights of set-off and maintenance of cash collateral in an amount equal to a
percentage of all undrawn Letters of Credit, which percentage shall be
acceptable to the LC Agent). During such five-business-day notice period, the
Debtors shall be entitled to an emergency hearing with this Court for the sole
purposes of contesting whether an Event of Default has occurred, but the Debtors
shall have no right to seek to use cash collateral of the Lenders except for the
payment of payroll and payroll-related expenses. Unless, during such period,
this Court determines that an Event of Default has not occurred, the automatic
stay, as to the Lenders and the DIP Agents, shall automatically terminate at the
end of such notice period. In the event that during such notice period this
Court finds that an Event of Default has not in fact occurred, the rights and
obligations of the DIP Agents, Lenders, SCTSC, the Prepetition Agent and
Prepetition Lenders hereunder shall continue in full force and effect.
26. Modification of Second Interim Order. The Debtors shall
not seek or consent to, directly or indirectly, (a) any modification, stay,
vacation or amendment to this Second Interim Order; (b) any order allowing use
of cash collateral, except for the payment of payroll and payroll-related
expenses, of the Prepetition Lenders and the Lenders without the Prepetition
Agent's and DIP Agents' prior written consent; (c) a priority claim for any
administrative expense or unsecured claim against the Debtors (now existing or
hereafter arising of any kind or nature whatsoever, including without limitation
any administrative expense of the kind specified in sections 503(b), 506(c) or
507(b) of the Bankruptcy Code) equal or superior to the Superpriority Claims or
the Adequate Protection Superpriority Claims, other than the Carve-Out; or (d)
any lien on any of the DIP Collateral with priority equal or superior to the
Postpetition Liens or the Adequate Protection Liens, except as specifically
provided in the DIP Facilities.
27. Indemnification. Subject to paragraph 15, the Debtors
shall indemnify and hold harmless the DIP Agents, SCTSC, the Lenders and their
respective shareholders, directors, agents, officers, subsidiaries and
affiliates, successors and assigns from and against any and all claims, actions
and suits, whether groundless or otherwise, and from and against any and all
liabilities, losses, damages and reasonable expenses of every nature and
character arising out of the DIP Facilities or any of the other DIP Financing
Documents or the transactions contemplated thereby, pursuant to the terms of the
DIP Financing Documents and as further described therein.
28. Subject to paragraph 15, the Debtors shall indemnify and
hold harmless SCTSC and its shareholders, directors, agents, officers,
subsidiaries and affiliates, successors and assigns from and against any and all
claims, actions and suits, whether groundless or otherwise, and from and against
any and all liabilities, losses, damages and reasonable expenses of every nature
and character arising out of the assumption of the SCTSC Purchase Agreements or
the transactions contemplated thereby, pursuant to the terms of the SCTSC
Purchase Agreements and as further described therein.
29. The provisions of this Second Interim Order shall be
binding upon and inure to the benefit of the DIP Agents, the Lenders, the
Prepetition Agent, the Prepetition Lenders, SCTSC, the Debtors and their
respective successors and assigns (including any trustee or other fiduciary
hereinafter appointed as a legal representative of the Debtors or with respect
to the property of the estate of the Debtors) whether in these Chapter 11 Cases,
in any subsequent cases under Chapter 7 of the Bankruptcy Code or upon dismissal
of any such Chapter 11 or Chapter 7 cases.
30. Good Faith under Section 364(e) of the Bankruptcy Code.
Based on the findings set forth in paragraphs Q and R of this Second Interim
Order and to the extent provided under section 364(e) of the Bankruptcy Code,
which is applicable to the DIP Facilities
contemplated by this Second Interim Order, in the event any or all of the
provisions of this Second Interim Order are hereafter modified, amended or
vacated by a subsequent order of this or any other Court, no such modification,
amendment or vacation shall affect the validity and enforceability of any
advances made hereunder or lien or priority authorized or created hereby.
Notwithstanding any such modification, amendment or vacation, any (i) claim,
including without limitation Superpriority Claims and Adequate Protection
Superpriority Claims, or (ii) lien, including without limitation, Postpetition
Liens and Adequate Protection Liens hereunder arising prior to the effective
date of such modification, amendment or vacation shall be governed in all
respects by the original provisions of this Second Interim Order, and the DIP
Agents, the Lenders, SCTSC, the Prepetition Agent and the Prepetition Lenders,
as the case may be, shall be entitled to all of the rights, remedies, privileges
and benefits thereof.
31. Negative Notice for Amendments to DIP Financing Documents.
After consultation with the Committee, any amendment to the provisions of the
DIP Financing Documents which makes other substantive changes to the DIP
Financing Documents shall be made on fifteen (15) days' negative notice to all
parties which have entered notices of appearance in these Chapter 11 Cases under
Bankruptcy Rule 2002.
32. Survival of Provisions in Second Interim Order. The
provisions of this Second Interim Order and any actions taken pursuant hereto
shall survive entry of any order which may be entered (a) confirming any plan of
reorganization (a "Plan") in any of these Chapter 11 Cases, (b) converting any
of the Chapter 11 Cases to a case under Chapter 7 of the Bankruptcy Code, or (c)
dismissing any of the Chapter 11 Cases, and the terms and provisions of this
Second Interim Order as well as the Superpriority Claims and Postpetition Liens
granted pursuant to this Second Interim Order and the DIP Facilities and the
Adequate Protection Liens and Adequate Protection Superpriority Claims shall
continue in full force and effect
notwithstanding the entry of such order, and such Superpriority Claims,
Postpetition Liens, Adequate Protection Liens and Adequate Protection
Superpriority Claims shall maintain their priority as provided by this Second
Interim Order and as set forth in the Intercreditor Agreement until all the
obligations of the Debtors to the Agents, the Lenders, SCTSC, the Prepetition
Lenders and the Prepetition Agents pursuant to the DIP Financing Documents and
this Second Interim Order are indefeasibly paid in full and discharged;
provided, however, that the Superpriority Claims and Adequate Protection
Superpriority Claims shall not survive dismissal of these Chapter 11 Cases. The
DIP Obligations shall not be discharged by the entry of an order confirming a
Plan, the Debtors having waived such discharge. Without the consent of the DIP
Agents, none of the Debtors shall propose or support any Plan that is not
conditioned upon the payment in full in cash, on or prior to the earlier to
occur of (i) the effective date of such Plan and (ii) the Termination
Declaration Date, of all of the DIP Obligations, nor shall any of the Debtors
propose or support any sale under section 363 of the Bankruptcy Code without the
express consent of the Dip Agents, the Lenders and SCTSC, which is not
conditioned upon the payment in full in cash of all the DIP Obligations at
closing.
33. Joint and Several DIP Obligations. The DIP Obligations of
the Debtors hereunder and under the DIP Financing Documents shall be joint and
several, with each Debtor that is a secondary obligor waiving all suretyship
defenses.
34. Consistency of Second Interim Order with DIP Financing
Documents. The DIP Financing Documents and this Second Interim Order shall be
construed consistently with each other, but to the extent there are provisions
in the DIP Financing Documents that are irreconcilably inconsistent with this
Second Interim Order, the provisions of this Second Interim Order shall control.
35. No Waiver. Notwithstanding anything herein, the entry of
this Second Interim Order is without prejudice to, and does not constitute a
waiver of, expressly or implicitly, or otherwise impair (a) any of the rights of
the DIP Agents, the Lenders, SCTSC, the Prepetition Agent or the Prepetition
Lenders under the Bankruptcy Code or under non-bankruptcy law, including,
without limitation, the right of the DIP Agents, the Lenders, SCTSC, the
Prepetition Agent or the Prepetition Lenders to (i) request modification of the
automatic stay of section 362 of the Bankruptcy Code, (ii) request dismissal of
any of the Chapter 11 Cases, conversion of any of the Chapter 11 Cases to cases
under Chapter 7, or appointment of a Chapter 11 trustee or examiner with
expanded powers, or (iii) propose, subject to the provisions of section 1121 of
the Bankruptcy Code, a Chapter 11 plan or plans or (b) any of the rights, claims
or privileges (whether legal, equitable or otherwise) of the DIP Agents, the
Lenders, SCTSC, the Prepetition Agent or the Prepetition Lenders.
36. Notice of Final Hearing. Notice of the Final Hearing has
been given. The Final Hearing to consider the Final Order approving the DIP
Facilities is scheduled for October 24, 2002, at 2:00 p.m. at the United States
Bankruptcy Court, Corpus, Christi, Texas (the "Bankruptcy Court"). On or before
October 21, 2002, the Debtors shall serve, by United States mail, first-class
postage prepaid, notice of the entry of this Second Interim Order on: (a) the
parties having been given notice of the Second Interim Hearing; (b) any party
which has filed prior to such date a request for notices with this Court; (c)
counsel for the Committee, if any; and (d) the parties on the official service
list.
37. Nunc Pro Tunc Relief. This Second Interim Order shall
constitute findings of fact and conclusions of law pursuant to Bankruptcy Rule
7052 and shall take effect and be fully enforceable nunc pro tunc to the
Petition Date immediately upon execution thereof; provided, however, that
notwithstanding the provisions of this Second Interim Order, the Court shall not
be
precluded from entering a Final Order inconsistent with the provisions herein
subject to the protection of section 364(e) of the Bankruptcy Code in favor of
the DIP Agents, the Lenders and SCTSC with respect to monies advanced and
letters of credit issued during the Interim period.
38. Jurisdiction. The Court has and will retain jurisdiction
to enforce this Second Interim Order according to its terms.
Dated: October 17, 0000
Xxxxxxx, Xxxxx
/s/ Judge Xxxxxxx X. Xxxxxxx
--------------------------------
UNITED STATES BANKRUPTCY JUDGE
SCHEDULE K
LEASE VOLUME REPORT
CRUDE OIL LEASE VOLUMES
VOLUMES BY REGION
REGION MONTH
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MID CONTINENT
GULF COAST
ROCKIES
WEST TEXAS
CANADA
TOTAL BARRELS
TOTAL BARRELS PER DAY
