EXHIBIT 10.2
CREDIT AGREEMENT
BETWEEN
MARKET HUB PARTNERS STORAGE, L.P.
AND
BANK ONE, TEXAS, NATIONAL ASSOCIATION
April 15, 1998
REVOLVING LINE OF CREDIT OF UP TO $50,000,000
TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS AND INTERPRETATION
1.1 Terms Defined Above...........................................1
1.2 Additional Defined Terms......................................1
1.3 Undefined Financial Accounting Terms.........................17
1.4 References...................................................17
1.5 Articles and Sections........................................17
1.6 Number and Gender............................................17
1.7 Incorporation of Exhibits....................................18
ARTICLE II TERMS OF FACILITY
2.1 Revolving Line of Credit.....................................18
2.2 Use of Loan Proceeds.........................................19
2.3 Interest.....................................................19
2.4 Repayment of Loans and Interest..............................19
2.5 Outstanding Amounts..........................................20
2.6 Time, Place, and Method of Payments..........................20
2.7 Voluntary Prepayments and Conversions of Loans...............20
2.8 Commitment Fee...............................................20
2.9 Facility Fee.................................................20
2.10 Security Interest in Accounts; Right of Offset...............21
2.11 General Provisions Relating to Interest......................21
2.12 Yield Protection.............................................22
2.13 Limitation on Types of Loans.................................23
2.14 Illegality...................................................24
2.15 Regulatory Change............................................24
2.16 Limitations on Interest Periods..............................25
ARTICLE III CONDITIONS
3.1 Receipt of Loan Documents and Other Items....................25
3.2 Each Loan....................................................27
ARTICLE IV REPRESENTATIONS AND WARRANTIES
4.1 Due Authorization............................................28
4.2 Existence....................................................28
4.3 Partnership Existence........................................28
4.4 Corporate Existence..........................................28
4.5 Valid and Binding Obligations................................29
4.6 Security Instruments.........................................29
4.7 Title to Assets..............................................29
4.8 Scope and Accuracy of Financial Statements...................29
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4.9 No Material Misstatements....................................29
4.10 Liabilities, Litigation, and Restrictions....................29
4.11 Authorizations; Consents.....................................30
4.12 ERISA........................................................30
4.13 Environmental Laws...........................................30
4.14 Compliance with Federal Reserve Regulations..................30
4.15 Investment Company Act Compliance............................31
4.16 Public Utility Holding Company Act Compliance................31
4.17 Proper Filing of Tax Returns; Payment of Taxes Due...........31
4.18 Casualties or Taking of Property.............................31
4.19 Locations of Borrower........................................31
4.20 Subsidiaries.................................................31
ARTICLE V AFFIRMATIVE COVENANTS
5.1 Maintenance and Access to Records and Inspection of
Properties.................................................31
5.2 Quarterly Financial Statements; Compliance Certificates......32
5.3 Annual Financial Statements..................................32
5.4 Title Defects................................................32
5.5 Notices of Certain Events....................................32
5.6 Additional Information.......................................33
5.7 Compliance with Laws.........................................33
5.8 Payment of Assessments and Charges...........................34
5.9 Maintenance of Corporate and Partnership Existence and Good
Standing...................................................34
5.10 Payment of Notes; Performance of Obligations.................34
5.11 Further Assurances...........................................34
5.12 Fees and Expenses of Counsel to Lender.......................34
5.13 Subsequent Fees and Expenses of Lender.......................35
5.14 Operation and Maintenance of Storage Facilities..............35
5.15 Maintenance of Insurance.....................................35
5.16 INDEMNIFICATION..............................................36
ARTICLE VI NEGATIVE COVENANTS
6.1 Indebtedness.................................................37
6.2 Contingent Obligations.......................................37
6.3 Liens........................................................37
6.4 Sales of Assets..............................................37
6.5 Loans or Advances............................................37
6.6 Investments..................................................37
6.7 Dividends and Distributions..................................38
6.8 Issuance of Stock; Changes in Corporate or Partnership
Structure..................................................38
6.9 Transactions with Affiliates.................................38
6.10 Lines of Business............................................38
6.11 Plan Obligations.............................................38
6.12 Tangible Net Worth...........................................38
6.13 Cash Flow Coverage...........................................38
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6.14 Funded Debt to Total Capitalization..........................38
ARTICLE VII EVENTS OF DEFAULT
7.1 Enumeration of Events of Default.............................39
7.2 Remedies.....................................................41
ARTICLE VIII MISCELLANEOUS
8.1 Transfers; Participations....................................42
8.2 Survival of Representations, Warranties, and Covenants.......42
8.3 Notices and Other Communications.............................42
8.4 Parties in Interest..........................................43
8.5 Rights of Third Parties......................................43
8.6 Renewals; Extensions.........................................43
8.7 No Waiver; Rights Cumulative.................................43
8.8 Survival Upon Unenforceability...............................44
8.9 Amendments; Waivers..........................................44
8.10 Controlling Agreement........................................44
8.11 Disposition of Collateral....................................44
8.12 Confidentiality..............................................44
8.13 No Recourse Against Others...................................45
8.14 GOVERNING LAW................................................45
8.15 JURISDICTION AND VENUE.......................................45
8.16 WAIVER OF RIGHTS TO JURY TRIAL...............................46
8.17 ENTIRE AGREEMENT.............................................46
8.18 Counterparts.................................................46
LIST OF EXHIBITS
Exhibit I - Form of Note
Exhibit II - Form of Borrowing Request
Exhibit III - Form of Compliance Certificate
Exhibit IV - Form of Opinion of Counsel
Exhibit V - Disclosures
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CREDIT AGREEMENT
THIS CREDIT AGREEMENT is made and entered into this 15th day of
April, 1998, by and between MARKET HUB PARTNERS STORAGE, L.P., a Delaware
limited partnership (the "BORROWER"), and BANK ONE, TEXAS, NATIONAL ASSOCIATION,
a national banking association (the "LENDER").
WITNESSETH:
In consideration of the mutual covenants and agreements herein
contained, the Borrower and the Lender hereby agree as follows:
ARTICLE I
DEFINITIONS AND INTERPRETATION
1.1 TERMS DEFINED ABOVE. As used in this Credit Agreement, the terms
"BORROWER", and "LENDER" shall have the meaning assigned to them hereinabove.
1.2 ADDITIONAL DEFINED TERMS. As used in this Credit Agreement, each
of the following terms shall have the meaning assigned thereto in this Section,
unless the context otherwise requires:
"ACCOUNTS RECEIVABLE" shall have the meaning set forth in the
Indenture.
"ACQUIRED INDEBTEDNESS" shall have the meaning set forth in the
Indenture.
"ADDITIONAL COSTS" shall mean costs which the Lender reasonably
determines are attributable to its obligation to make or its making or
maintaining any Fixed Rate Loan, or any reduction in any amount receivable
by the Lender in respect of any such obligation or any Fixed Rate Loan,
resulting from any Regulatory Change which (a) changes the basis of
taxation of any amounts payable to the Lender under this Agreement or the
Note in respect of any Fixed Rate Loan (other than franchise taxes and
taxes imposed on the overall net income or profits of the Lender), (b)
imposes or modifies any reserve, special deposit, minimum capital, capital
rates, or similar requirements relating to any extensions of credit or
other assets of, or any deposits with or other liabilities of, the Lender
(including Fixed Rate Loans and Dollar deposits in the London interbank
market in connection with LIBO Rate Loans), or any commitments of the
Lender hereunder, or (c) imposes any other condition affecting this
Agreement or any of such extensions of credit, liabilities, or
commitments.
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"ADJUSTED LIBO RATE" shall mean, for any LIBO Rate Loan, an interest
rate per annum (rounded upwards, if necessary, to the nearest 1/100 of 1%)
determined by the Lender to be equal to the sum of the LIBO Rate for such
Loan plus the Applicable Margin, but in no event exceeding the Highest
Lawful Rate.
"AFFILIATE" shall mean any Person directly or indirectly
controlling, or under common control with, the Borrower and includes any
Subsidiary of the Borrower and any "affiliate" of the Borrower within the
meaning of Reg. ss.240.12b-2 of the Securities Exchange Act of 1934, as
amended, with "control," as used in this definition, meaning possession,
directly or indirectly, of the power to direct or cause the direction of
management, policies or action through ownership of voting securities,
contract, voting trust, or membership in management or in the group
appointing or electing management or otherwise through formal or informal
arrangements or business relationships.
"AGREEMENT" shall mean this Credit Agreement, as it may be amended,
supplemented, or restated from time to time.
"APPLICABLE LENDING OFFICE" shall mean, for each type of Loan, the
lending office of the Lender (or an affiliate of the Lender) designated
for such type of Loan on the signature pages hereof or such other office
of the Lender (or an affiliate of the Lender) as the Lender may from time
to time specify to the Borrower as the office by which Loans of such type
are to be made and maintained.
"APPLICABLE MARGIN" shall mean as to each LIBO Rate Loan, two
percent (2%).
"ATTRIBUTABLE INDEBTEDNESS" means, with respect to any particular
lease under which any Person is at the time liable, whether or not
accounted for as a Capitalized Lease Obligation, and at any date as of the
which the amount thereof is to be determined, the present value of the
total net amount of lease payments required to be paid by such Person
under the lease during the primary term thereof, without giving effect to
any renewals at the option of the lessee, discounted from the respective
due dates thereof to the date of determination at a rate per annum equal
to the discount rate that would be applicable to a Capitalized Lease
Obligation with a like term in accordance with GAAP. As used in the
preceding sentence, the "net amount of lease payments" under any such
lease for any such period means the sum of lease, rental and other
payments required to be paid with respect to such period by such lessee
thereunder, excluding any amounts required to be paid by the lessee on
account of maintenance and repairs, insurance, and taxes, assessments or
similar charges. If a lessee under any lease may terminate that lease by
paying a penalty, the "net amount of lease payments" under that lease
shall include the amount of that penalty, but shall exclude all lease
payments after the first date on which that lease may be so terminated.
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"AVAILABLE COMMITMENT" shall mean, at any time, an amount equal to
the Commitment Amount.
"BASE RATE" shall mean the interest rate announced or published by
the Lender from time to time as its general reference rate of interest,
which Base Rate shall change upon any change in such announced or
published general reference interest rate and which Base Rate may not be
the lowest interest rate charged by the Lender.
"BORROWING REQUEST" shall mean each written request, in
substantially the form attached hereto as Exhibit II, by the Borrower to
the Lender for a borrowing, conversion, or prepayment pursuant to Sections
2.1 or 2.7, each of which shall:
(a) be signed by a Responsible Officer of the Borrower;
(b) when requesting a borrowing, be accompanied by a
Compliance Certificate;
(c) specify the amount and type of Loan requested, and, as
applicable, the Loan to be converted or prepaid and the date of the
borrowing, conversion, or prepayment (which shall be a Business
Day);
(d) when requesting a Floating Rate Loan, be delivered to the
Lender no later than 10:00 a.m., Central Standard or Daylight
Savings Time, as the case may be, on the Business Day of the
requested borrowing, conversion, or prepayment; and
(e) when requesting a LIBO Rate Loan, be delivered to the
Lender no later than 10:00 a.m. Central Standard or Daylight Savings
Time, as the case may be, two Business Days preceding the requested
borrowing, conversion, or prepayment and designate the Interest
Period requested with respect to such Loan.
"BUSINESS DAY" shall mean (a) for all purposes other than as covered
by clause (b) of this definition, a day other than a Saturday, Sunday,
legal holiday for commercial banks under the laws of the State of Texas,
or any other day when banking is suspended in the State of Texas, and (b)
with respect to all requests, notices, and determinations in connection
with, and payments of principal and interest on, LIBO Rate Loans, a day
which is a Business Day described in clause (a) of this definition and
which is a day for trading by and between banks for Dollar deposits in the
London interbank market.
"CAPITALIZED LEASE OBLIGATION" means, with respect to any Person,
any obligation of that Person to pay lease payments, rent or other amounts
under a
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lease of (or other similar agreement conveying the right to use) any
Property (whether real, personal or mixed) that is required to be
classified and accounted for as a capital lease obligations under GAAP
and, for purposes of this Indenture, the amount of that obligation at any
date shall be the capitalized amount thereof at that date, as determined
in accordance with GAAP.
"CASH FLOW" shall mean net income plus interest, depreciation and
other non-cash charges, less non-cash income.
"CLOSING DATE" shall mean the effective date of this Agreement.
"COLLATERAL" shall mean the Mortgaged Properties and any other
Property now or at any time pledged as security for the payment or
performance of all or any portion of the Obligations.
"COMMITMENT" shall mean the obligation of the Lender, subject to
applicable provisions of this Agreement, to make Loans to or for the
benefit of the Borrower pursuant to Section 2.1.
"COMMITMENT AMOUNT" shall, subject to the applicable provisions of
this Agreement, mean $20,000,000.
"COMMITMENT FEE" shall mean each fee payable to the Lender by the
Borrower pursuant to Section 2.8.
"COMMITMENT PERIOD" shall mean the period from and including the
Closing Date to but not including the Commitment Termination Date.
"COMMITMENT TERMINATION DATE" shall mean December 31, 2000, or the
earlier date of the termination in whole of the Commitment pursuant to
Section 2.1(d) or Section 7.2.
"COMMONLY CONTROLLED ENTITY" shall mean any Person which is under
common control with the Borrower or the Guarantors within the meaning of
Section 4001 of ERISA.
"COMPLIANCE CERTIFICATE" shall mean each certificate, substantially
in the form attached hereto as Exhibit III, executed by a Responsible
Officer of the Borrower and furnished to the Lender from time to time in
accordance with Sections 5.2 and 5.3.
"CONTINGENT OBLIGATION" shall mean, as to any Person, any obligation
of such Person guaranteeing or in effect guaranteeing any Indebtedness,
leases, dividends, or other obligations of any other Person (for purposes
of this definition, a "PRIMARY OBLIGATION") in any manner, whether
directly or indirectly, including,
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without limitation, any obligation of such Person, regardless of whether
such obligation is contingent, (a) to purchase any primary obligation or
any Property constituting direct or indirect security therefor, (b) to
advance or supply funds (i) for the purchase or payment of any primary
obligation, or (ii) to maintain working or equity capital of any other
Person in respect of any primary obligation, or otherwise to maintain the
net worth or solvency of any other Person, (c) to purchase Property,
securities or services primarily for the purpose of assuring the owner of
any primary obligation of the ability of the Person primarily liable for
such primary obligation to make payment thereof, or (d) otherwise to
assure or hold harmless the owner of any such primary obligation against
loss in respect thereof, with the amount of any Contingent Obligation
being deemed to be equal to the stated or determinable amount of the
primary obligation in respect of which such Contingent Obligation is made
or, if not stated or determinable, the maximum reasonably anticipated
liability in respect thereof as determined by such Person in good faith.
"DEBT SERVICE" shall mean an amount equal to (i) 1/12 of the sum of
the Loan Balance at the end of any fiscal quarter, plus actual interest
payments on such Loan Balance made during such quarter, plus (ii) actual
principal and interest payments on Indebtedness other than payments made
under this Agreement during such quarter.
"DEFAULT" shall mean any event or occurrence which with the lapse of
time or the giving of notice or both would become an Event of Default.
"DEFAULT RATE" shall mean a per annum interest rate equal to the
Base Rate plus five percent (5%), but in no event exceeding the Highest
Lawful Rate.
"DISQUALIFIED EQUITY INTERESTS" shall have the meaning set forth in
the Indenture.
"DOLLARS" and "$" shall mean dollars in lawful currency of the
United States of America.
"ENVIRONMENTAL COMPLAINT" shall mean any written or oral complaint,
order, directive, claim, citation, notice of environmental report or
investigation, or other notice by any Governmental Authority or any other
Person with respect to (a) air emissions, (b) spills, releases, or
discharges to soils, any improvements located thereon, surface water,
groundwater, or the sewer, septic, waste treatment, storage, or disposal
systems servicing any Property of the Borrower or the Guarantors, (c)
solid or liquid waste disposal, (d) the use, generation, storage,
transportation, or disposal of any Hazardous Substance, or (e) other
environmental, health, or safety matters affecting any Property of the
Borrower or the Guarantors or the business conducted thereon.
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"ENVIRONMENTAL LAWS" shall mean (a) the following federal laws as
they may be cited, referenced, and amended from time to time: the Clean
Air Act, the Clean Water Act, the Safe Drinking Water Act, the
Comprehensive Environmental Response, Compensation and Liability Act, the
Endangered Species Act, the Resource Conservation and Recovery Act, the
Occupational Safety and Health Act, the Hazardous Materials Transportation
Act, the Superfund Amendments and Reauthorization Act, and the Toxic
Substances Control Act; (b) any and all equivalent environmental statutes
of any state in which Property of the Borrower or the Guarantors is
situated, as they may be cited, referenced and amended from time to time;
(c) any rules or regulations promulgated under or adopted pursuant to the
above federal and state laws; and (d) any other equivalent federal, state,
or local statute or any requirement, rule, regulation, code, ordinance, or
order adopted pursuant thereto, including, without limitation, those
relating to the generation, transportation, treatment, storage, recycling,
disposal, handling, or release of Hazardous Substances.
"EQUITY INTERESTS" shall have the meaning set forth in the
Indenture.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended from time to time, and the regulations thereunder and
interpretations thereof.
"EVENT OF DEFAULT" shall mean any of the events specified in Section
7.1.
"FACILITY FEE" shall mean the fee payable to the Lender by the
Borrower pursuant to Section 2.9.
"FEDERAL FUNDS RATE" shall mean, for any day, the rate per annum
(rounded upwards, if necessary, to the nearest 1/100 of 1%) equal to the
weighted average of the rates on overnight federal funds transactions with
members of the Federal Reserve System arranged by federal funds brokers on
such day, as published by the Federal Reserve Bank of Dallas, Texas, on
the Business Day next succeeding such day, provided that (a) if the day
for which such rate is to be determined is not a Business Day, the Federal
Funds Rate for such day shall be such rate on such transactions on the
next preceding Business Day as so published on the next succeeding
Business Day, and (b) if such rate is not so published for any day, the
Federal Funds Rate for such day shall be the average rate charged to
Lender on such day on such transactions as determined by the Lender.
"FINAL MATURITY" shall mean December 31, 2000.
"FINANCIAL STATEMENTS" shall mean statements of the financial
condition of the Borrower as at the point in time and for the period
indicated and consisting of at least a balance sheet and related
statements of operations, common stock and other stockholders' equity, and
cash flows for the Borrower and, when required
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by applicable provisions of this Agreement to be audited, accompanied by
the unqualified certification of a nationally-recognized firm of
independent certified public accountants or other independent certified
public accountants acceptable to the Lender and footnotes to any of the
foregoing, all of which shall be prepared in accordance with GAAP
consistently applied and in comparative form with respect to the
corresponding period of the preceding fiscal period.
"FIXED RATE LOAN" shall mean any LIBO Rate Loan.
"FLOATING RATE" shall mean an interest rate per annum equal to the
Base Rate from time to time in effect.
"FLOATING RATE LOAN" shall mean any Loan and any portion of the Loan
Balance which the Borrower has requested, in the initial Borrowing Request
for such Loan or a subsequent Borrowing Request for such portion of the
Loan Balance, which bears interest at the Floating Rate, or which pursuant
to the terms hereof is otherwise required to bear interest at the Floating
Rate.
"GAAP" shall mean generally accepted accounting principles
established by the Financial Accounting Standards Board or the American
Institute of Certified Public Accountants and in effect in the United
States from time to time.
"GOVERNMENTAL AUTHORITY" shall mean any nation, country,
commonwealth, territory, government, state, county, parish, municipality,
or other political subdivision and any entity exercising executive,
legislative, judicial, regulatory, or administrative functions of or
pertaining to government.
"GUARANTORS" shall mean Xxxx Bluff Hub Partners, L.P., a Delaware
limited partnership, Xxxx Bluff Hub Partners, L.L.C., a Delaware limited
liability company, Xxxx Hub Partners, L.P., a Delaware limited partnership
and Xxxx Hub Partners, L.L.C., a Delaware limited liability company.
"GUARANTEES" shall have the meaning set forth in the Indenture.
"GUARANTIES" shall mean the Guaranties dated the Closing Date
executed by the Guarantors in favor of the Lender, guaranteeing the
payment and performance of the Obligations, as it may be ratified,
amended, restated, or supplemented from time to time.
"HAZARDOUS SUBSTANCES" shall mean flammables, explosives,
radioactive materials, hazardous wastes, asbestos, or any material
containing asbestos, polychlorinated biphenyls (PCBs), toxic substances or
related materials, petroleum, petroleum products, associated oil or
natural gas exploration, production, and development wastes, or any
substances defined as "hazardous substances," "hazardous materials,"
"hazardous wastes," or "toxic substances" under the
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Comprehensive Environmental Response, Compensation and Liability Act, as
amended, the Superfund Amendments and Reauthorization Act, as amended, the
Hazardous Materials Transportation Act, as amended, the Resource
Conservation and Recovery Act, as amended, the Toxic Substances Control
Act, as amended, or any other law or regulation now or hereafter enacted
or promulgated by any
Governmental Authority.
"HEDGING OBLIGATIONS" means, at any time as to any Person, any
obligation of that Person at that time that is incurred (i) in the
ordinary course of its business pursuant to any exchange agreement, swap,
option, forward sales contract, future contracts or other similar
agreement or arrangement designed to protect against or manage the
exposure of that Person or any of its Subsidiaries to fluctuations in
foreign currency exchange rates or in the price of energy related
commodities, and (ii) pursuant to any arrangement with any other Person
whereby, directly or indirectly, the specified Person is entitled to
receive periodic payments calculated by applying either a floating or a
fixed rate of interest on a stated notional amount in exchange for
periodic payments made by the specified Person calculated by applying a
fixed or floating rate of interest on the same national amount and
includes, without limitation, interest rate swaps, caps, floors, collars
and other similar agreements or arrangements designed to protect against
or manage the exposure of the specified Person or any of its Subsidiaries
to fluctuations in interest rates.
"HIGHEST LAWFUL RATE" shall mean the maximum non-usurious interest
rate, if any (or, if the context so requires, an amount calculated at such
rate), that at any time or from time to time may be contracted for, taken,
reserved, charged, or received under applicable laws of the State of Texas
or the United States of America, whichever authorizes the greater rate, as
such laws are presently in effect or, to the extent allowed by applicable
law, as such laws may hereafter be in effect and which allow a higher
maximum non-usurious interest rate than such laws now allow.
"INDEBTEDNESS" means, with respect to any Person, without
duplication, (i) all liabilities of that Person, contingent or otherwise,
for borrowed money or for the deferred purchase price of Property or
service (excluding any trade accounts payable and other accrued current
liabilities incurred in the ordinary course of business of that Person)
and all liabilities of that Person incurred in connection with any letters
of credit, bankers' acceptances or other similar credit transactions or
any agreement to purchase, redeem, exchange, convert or otherwise acquire
for value any Equity Interests of that Person, or any warrants, rights or
options to acquire that Equity Interest, outstanding on the Closing Date
or thereafter, or any obligations arising out of the sale of Accounts
Receivable of that Person if, and to the extent, any of the foregoing
would appear as a liability on a balance sheet of that Person prepared in
accordance with GAAP, (ii) all obligations of that Person evidence by
bonds, notes, debentures or other similar instruments, if, and to the
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extent, any of the foregoing would appear as a liability on a balance
sheet of that Person prepared in accordance with GAAP, (iii) all
obligations of that Person created or arising under any conditional sale
or other title retention agreement with respect to Property acquired by
that Person (even if the rights and remedies of the seller or lender under
such agreement in the event of a default are limited to repossession or
sale of such Property), (iv) the Attributable Indebtedness of any
Capitalized Lease Obligation of that Person, (v) all obligations of the
types described in eh preceding clauses of this definition and all
dividends and other distributions, the payment of which is secured by (or
for which the holder of such obligations has an existing right, contingent
or otherwise, to be secured by) any Lien upon Property (including, without
limitation, accounts and contract rights) owned by that Person, even
though that Person has not assumed or become liable for the payment of
such Indebtedness (the amount of such obligation so secured), (vi) the
maximum fixed redemption or repurchase price, if any, of all Disqualified
Equity Interests of that Person, (vii) all obligations of that Person
under or in respect Hedging Obligations, and (viii) all Guarantees by that
Person of obligations of the types referred to in clauses (i) through
(vii) of this definition.
"INDENTURE" shall mean the Indenture dated as of March 1, 1998, by
and between Borrower, Guarantors and IBJ Xxxxxxxx Bank & Trust Company,
Trustee, in regard to $115,000,000 of 8 1/4% Senior Notes due 2008.
"INTEREST PERIOD" shall mean, subject to the limitations set forth
in Section 2.16, with respect to any LIBO Rate Loan, a period commencing
on the date such Loan is made or converted from a Loan of another type
pursuant to this Agreement or the last day of the next preceding Interest
Period with respect to such Loan and ending on the numerically
corresponding day in the calendar month that is one, two, three, or,
subject to availability, six months thereafter, as the Borrower may
request in the Borrowing Request for such Loan.
"INVESTMENT" in any Person shall mean any stock, bond, note, or
other evidence of Indebtedness, or any other security (other than current
trade and customer accounts) of, investment or partnership interest in or
loan to, such Person.
"LIBO RATE" shall mean, with respect to any Interest Period for any
LIBO Rate Loan, the lesser of (a) the rate per annum (rounded upwards, if
necessary, to the nearest 1/16 of 1%) equal to the average of the offered
quotations appearing on Telerate Page 3750 (or if such Telerate Page shall
not be available, any successor or similar service selected by the Lender
and the Borrower) as of approximately 11:00 a.m., Central Standard or
Daylight Savings Time, as the case may be, on the day two Business Days
prior to the first day of such Interest Period for Dollar deposits in an
amount comparable to the principal amount of such LIBO Rate Loan and
having a term comparable to the Interest Period for such LIBO Rate Loan,
or (b) the Highest Lawful Rate. If neither such Telerate Page 3750 nor any
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successor or similar service is available, the term "LIBO Rate" shall
mean, with respect to any Interest Period for any LIBO Rate Loan, the
lesser of (a) the rate per annum (rounded upwards if necessary, to the
nearest 1/16 of 1%) quoted by the Lender at approximately 11:00 a.m.,
London time (or as soon thereafter as practicable) two Business Days prior
to the first day of the Interest Period for such LIBO Rate Loan for the
offering by the Lender to leading banks in the London interbank market of
Dollar deposits in an amount comparable to the principal amount of such
LIBO Rate Loan and having a term comparable to the Interest Period for
such LIBO Rate Loan, or (b) the Highest Lawful Rate.
"LIBO RATE LOAN" shall mean any Loan and any portion of the Loan
Balance which the Borrower has requested, in the initial Borrowing Request
for such Loan or a subsequent Borrowing Request for such portion of the
Loan Balance, which shall bear interest at the Adjusted LIBO Rate and
which is permitted by the terms hereof to bear interest at the Adjusted
LIBO Rate.
"LIEN" shall mean any interest in Property securing an obligation
owed to, or a claim by, a Person other than the owner of such Property,
whether such interest is based on common law, statute, or contract, and
including, but not limited to, the lien or security interest arising from
a mortgage, ship mortgage, encumbrance, pledge, security agreement,
conditional sale or trust receipt, or a lease, consignment, or bailment
for security purposes (other than true leases or true consignments), liens
of mechanics, materialmen, and artisans, maritime liens and reservations,
exceptions, encroachments, easements, rights of way, covenants,
conditions, restrictions, leases, and other title exceptions and
encumbrances affecting Property which secure an obligation owed to, or a
claim by, a Person other than the owner of such Property (for the purpose
of this Agreement, the Borrower shall be deemed to be the owner of any
Property which it has acquired or holds subject to a conditional sale
agreement, financing lease, or other arrangement pursuant to which title
to the Property has been retained by or vested in some other Person for
security purposes), and the filing or recording of any financing statement
or other security instrument in any public office.
"LIMITATION PERIOD" shall mean any period while any amount remains
owing on the Note and interest on such amount, calculated at the
applicable interest rate, plus any fees or other sums payable under any
Loan Document and deemed to be interest under applicable law, would exceed
the amount of interest which would accrue at the Highest Lawful Rate.
"LOAN" shall mean any loan made by the Lender to or for the benefit
of the Borrower pursuant to this Agreement.
"LOAN BALANCE" shall mean, at any time, the outstanding principal
balance of the Note at such time.
10
"LOAN DOCUMENTS" shall mean this Agreement, the Note, the
Guaranties, the Security Instruments, and all other documents and
instruments now or hereafter delivered by the Borrower or the Guarantors
pursuant to the terms of or in connection with this Agreement, the Note,
the Guaranties, or the Security Instruments, and all renewals and
extensions of, amendments and supplements to, and restatements of, any or
all of the foregoing from time to time in effect.
"MATERIAL" shall mean material in relation to the business,
operations, affairs, financial condition, assets, Properties, or prospects
of the Borrower and the Guarantors taken as a whole.
"MATERIAL ADVERSE EFFECT" shall mean a material adverse effect on
(a) the business, operations, affairs, financial condition, assets or
Properties of the Borrower and Restricted Subsidiaries taken as a whole,
or (b) the ability of any Borrower or any Guarantor to perform its
respective obligations under this Agreement or the other Loan Documents,
(c) the validity or enforceability of this Agreement or the other Loan
Documents, or (d) any adverse effect upon the Collateral.
"MORTGAGED PROPERTIES" shall mean all Properties of the Guarantors
constituting the storage facilities of Xxxx Bluff Hub Partners, L.P. and
Xxxx Hub Partners, L.P., subject to a perfected first-priority Lien in
favor of the Lender, subject only to Permitted Liens, as security for the
Obligations.
"NON-RECOURSE PURCHASE MONEY INDEBTEDNESS" means Indebtedness of any
Borrower or any Restricted Subsidiary that is incurred to finance the
purchase of any assets of any Borrower or any Restricted Subsidiary within
90 days of such purchase, as long as (i) the amount of that Indebtedness
does not exceed 100% of the purchase cost of such assets, (ii) that
purchase cost is or should be included in "additions to property, plant
and equipment" in accordance with GAAP, (iii) such Indebtedness is
non-recourse to the Borrower and the Restrict Subsidiaries and all of
their respective assets other than the assets so purchased and (iv) the
purchase of such assets is not part of an acquisition of any Person.
"NOTE" shall mean the promissory note of the Borrower, in the form
attached hereto as Exhibit I, together with all renewals, extensions for
any period, increases, and rearrangements thereof.
"OBLIGATIONS" shall mean, without duplication, (a) all Indebtedness
evidenced by the Note, (b) the obligation of the Borrower for the payment
of Commitment Fees and Facility Fees, (c) the obligations of the
Guarantors under the Guaranties, and (f) all other obligations and
liabilities of the Borrower or the Guarantors to the Lender, now existing
or hereafter incurred, under, arising out of or in connection with any
Loan Document, and to the extent that any of the foregoing includes or
refers to the payment of amounts deemed or constituting
11
interest, only so much thereof as shall have accrued, been earned and
which remains unpaid at each relevant time of determination.
"PERMITTED LIENS" shall mean the following types of Liens:
(i) Liens existing as of the Closing Date;
(ii) Liens securing the Notes or the Subsidiary Guarantees;
(iii) Liens in favor of the Borrower or, with respect to a
Restricted Subsidiary, Liens in favor of another Restricted Subsidiary;
(iv) Liens securing Permitted Indebtedness of the Borrower and the
Restricted Subsidiaries of the type described in clause (i) of the
definition of Permitted Indebtedness;
(v) Liens securing Indebtedness that constitutes Permitted
Indebtedness of the type described in clause (x) of the definition of
"Permitted Indebtedness" set forth in the Indenture incurred as a
refinancing of any Indebtedness secured by Liens described in clauses (i),
(iv), (xi), (xii) and (xiii) of this definition; provided, however, that
(a) if any Lien securing Indebtedness being refinanced is subordinated or
junior to any Lien granted for the benefit of the Lender, then the Lien
securing the new Indebtedness shall be subordinated or junior to any Lien
granted for the benefit of the Lender at least to the same extent as the
Lien securing the Indebtedness being refinanced and (b) such Liens do not
extend to or cover any Property of a Borrower or any of its Restricted
Subsidiaries not securing the Indebtedness so refinanced;
(vi) Liens for taxes, assessments or governmental charges or claims
either (a) not delinquent or (b) contested in good faith by appropriate
proceedings and as to which a Borrower or a Restricted Subsidiary, as the
case may be, has set aside on its books such reserves, or has made such
other appropriate provision, if any, as is required by GAAP;
(vii) Liens of landlords, carriers, warehousemen, mechanics,
suppliers, materialmen, repairmen and other similar Liens incurred in the
ordinary course of business for sums not delinquent or being contested in
good faith, and as to which a Borrower or a Restricted Subsidiary, as the
case may be, has set aside on its books such reserves, or has made such
other appropriate provision, if any, as is required by GAAP;
(viii) Liens incurred or deposits made in the ordinary course of
business in connection with workers' compensation, unemployment insurance
and other types of social security, or to secure the payment or
performance of tenders, statutory or regulatory obligations, surety and
appeal bonds, bids, government contracts and leases, performance and
return of money bonds and other similar obligations (exclusive of
obligations for the payment of borrowed money);
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(ix) Liens securing any judgment not giving rise to a Default or
Event of Default and so long as any appropriate legal proceedings that may
have been duly initiated for the review of the judgment has not been
finally terminated or the period within which those proceedings may be
initiated has not expired;
(x) easements, rights-of-way, reservations, zoning and other
restrictions and other similar encumbrances not interfering in any
material respect with the ordinary conduct of business of a Borrower or
any Restricted Subsidiary;
(xi) any interest or title of a lessor under any Capitalized Lease
Obligation or operating lease; provided that (a) the Attributable
Indebtedness related thereto constitutes Indebtedness permitted to be
incurred under the terms of this Indenture and (b) with respect to any
Capitalized Lease Obligation, such Liens do not extend to any Property
that is not leased Property subject to such Capitalized Lease Obligation;
(xii) Liens securing Non-Recourse Purchase Money Indebtedness;
provided, however, that (a) the Non-Recourse Purchase Money Indebtedness
shall not be secured by any Property of a Borrower or an Restricted
Subsidiary other than the Property so acquired and any proceeds therefrom
and (b) the Lien securing such Non-Recourse Purchase Money Indebtedness
shall be created within 90 days of such acquisition;
(xiii) Liens securing Acquired Indebtedness incurred in accordance
with Section 10.11(a) of the Indenture; provided that (a) such Liens
secured such Acquired Indebtedness at the time of and prior to the
incurrence of such Acquired Indebtedness by a Borrower or a Restricted
Subsidiary and were not granted in connection with, or in anticipation of,
the incurrence of such Acquired Indebtedness by a Borrower or a Restricted
Subsidiary and (b) such Liens do not extend to or cover any Property of a
Borrower or of any Restricted Subsidiary other than the Property that
secured the Acquired Indebtedness prior to the time such Indebtedness
became Acquired Indebtedness of a Borrower or a Restricted Subsidiary and
are no more favorable to the lienholder than those securing the Acquired
Indebtedness prior to the incurrence of such Acquired Indebtedness by a
Borrower or a Restricted Subsidiary;
(xiv) leases or subleases granted to others that do not interfere
with the ordinary conduct of business of a Borrower or any Restricted
Subsidiary;
(xv) rights of a common owner of any interest in Property held by a
Borrower or any Restricted Subsidiary and that common owner as tenants in
common or through other common ownership; and
(xvi) Liens or equitable encumbrances deemed to exist by reason of
(a) fraudulent conveyance or transfer laws or (b) negative pledge or other
agreements to refrain from giving Liens.
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"PERSON" shall mean an individual, corporation, partnership, trust,
unincorporated organization, government, any agency or political
subdivision of any government, or any other form of entity.
"PRINCIPAL OFFICE" shall mean the principal office of the Lender in
Houston, Texas, presently located at 000 Xxxxxx, 0xx Xxxxx, Xxxxxxx, Xxxxx
00000.
"PROPERTY" shall mean any interest in any kind of property or asset,
whether real, personal or mixed, tangible or intangible.
"REGULATION D" shall mean Regulation D of the Board of Governors of
the Federal Reserve System, as the same may be amended or supplemented
from time to time.
"REGULATORY CHANGE" shall mean the passage, adoption, institution,
or amendment of any federal, state, local, or foreign Requirement of Law
(including, without limitation, Regulation D), or any interpretation,
directive, or request (whether or not having the force of law) of any
Governmental Authority or monetary authority charged with the enforcement,
interpretation, or administration thereof, occurring after the Closing
Date and applying to a class of banks including the Lender or its
Applicable Lending Office.
"RELATED BUSINESS" means (i) the businesses of the Borrower and the
Restricted Subsidiaries on the Closing Date and any business related,
ancillary or complementary to the business of the Borrower and the
Restricted Subsidiaries on that date and (ii) any other business related
to the production, gathering, marketing, treating, storage, selling and/or
transporting of natural gas as long as the principal businesses of the
Borrower and its Restricted Subsidiaries remain the businesses described
in the preceding clause (i).
"RELEASE OF HAZARDOUS SUBSTANCES" shall mean any emission, spill,
release, disposal, or discharge, except in accordance with a valid permit,
license, certificate, or approval of the relevant Governmental Authority,
of any Hazardous Substance into or upon (a) the air, (b) soils or any
improvements located thereon, (c) surface water or groundwater, or (d) the
sewer or septic system, or the waste treatment, storage, or disposal
system servicing any Property of the Borrower or the Guarantors.
"REQUIREMENT OF LAW" shall mean, as to any Person, the certificate
or articles of incorporation and by-laws or other organizational or
governing documents of such Person, and any applicable law, treaty,
ordinance, order, judgment, rule, decree, regulation, or determination of
an arbitrator, court, or other Governmental Authority, including, without
limitation, rules, regulations, orders, and requirements for permits,
licenses, registrations, approvals, or
14
authorizations, in each case as such now exist or may be hereafter amended
and are applicable to or binding upon such Person or any of its Property
or to which such Person or any of its Property is subject.
"RESPONSIBLE OFFICER" shall mean, as to any Person, its President
Chief Executive Officer or any Vice President.
"RESTRICTED SUBSIDIARY" means any Subsidiary of a Borrower, whether
existing on or after the Closing Date, unless that Subsidiary is
designated as an Unrestricted Subsidiary in the manner described below in
this Section 1.2 in the definition of "Unrestricted Subsidiary".
"SECURITY INSTRUMENTS" shall mean the security instruments executed
and delivered in satisfaction of the condition set forth in Section
3.1(f), and all other documents and instruments at any time executed as
security for all or any portion of the Obligations, as such instruments
may be amended, restated, or supplemented from time to time.
"STATED MATURITY" means, when used with respect to any Indebtedness
or any installment of interest thereon, the date specified in the
instrument evidencing or governing such Indebtedness as the fixed date on
which the principal of that Indebtedness or that installment of interest
is due and payable.
"SUBSIDIARY" means, with respect to any specified Person, (i) a
corporation a majority of whose Voting Equity Interests is at the time,
directly or indirectly, owned by the specified Person, by one or more
Subsidiaries of the specified Person or by the specified Person and one or
more Subsidiaries thereof or (ii) any other Person (other than a
corporation), including, without limitation, a partnership, joint venture
or limited liability company, in which the specified Person, one or more
Subsidiaries thereof or the specified Person and one or more Subsidiaries
thereof, directly or indirectly, at the date of determination thereof, has
or have at least a majority of the Voting Equity Interests or other
ownership interests of such Person.
"SUBSIDIARY GUARANTORS" mean (i) Xxxx Bluff Hub Partners, L.P. and
Xxxx Hub Partners L.P., each a Delaware limited partnership, and their
general partners, Xxxx Bluff Hub Partners, L.L.C., and Xxxx Hub Partners,
L.L.C., respectively, each a Delaware limited liability company and (ii)
any other Subsidiary of a Borrower that executes a Subsidiary Guarantee in
accordance with the provisions of this Agreement, and their respective
successors and assigns.
"SUPERFUND SITE" shall mean those sites listed on the Environmental
Protection Agency National Priority List and eligible for remedial action
or any comparable state registries or list in any state of the United
States.
15
"TANGIBLE NET WORTH" shall mean (a) total assets, as would be
reflected on a balance sheet of the Borrower prepared on a consolidated
basis and in accordance with GAAP, exclusive of Intellectual Property,
experimental or organization expenses, franchises, licenses, permits, and
other intangible assets, treasury stock, unamortized underwriters debt
discount and expenses, and goodwill, minus (b) total liabilities, as would
be reflected on a balance sheet of the Borrower prepared on a consolidated
basis and in accordance with GAAP.
"TOTAL CAPITALIZATION" shall mean total funded debt, plus partners
capital.
"TRANSFEREE" shall mean any financial institution to which the
Lender has sold, assigned, transferred, or granted a participation in any
of the Obligations, as authorized pursuant to Section 8.1, and any
financial institution acquiring, by purchase, assignment, transfer, or
participation, from any such purchaser, assignee, transferee, or
participant, any part of such Obligations.
"UCC" shall mean the Uniform Commercial Code as from time to time in
effect in the State of Texas.
"UNRESTRICTED SUBSIDIARY" means (i) any Subsidiary of a Borrower
that at the time of determination will be designated an Unrestricted
Subsidiary by the Board of Directors as provided below and (ii) any
Subsidiary of an Unrestricted Subsidiary. The Board of Directors may
designate any Subsidiary of Market Hub Partners Storage, L.P. and the
Subsidiary Guarantors existing on the date of this Agreement, as a
Unrestricted Subsidiary so long as: (i) neither Market Hub Partners
Storage, L.P. nor any Restricted Subsidiary is directly or indirectly
liable for the payment of any Indebtedness of that Subsidiary; (ii) no
default with respect to any Indebtedness of that Subsidiary would permit
(upon notice, lapse of time or otherwise) any holder of any other
Indebtedness of Market Hub Partners Storage, L.P. or any Restricted
Subsidiary to declare a default on that other Indebtedness or cause the
payment thereof to be accelerated or payable prior to its Stated Maturity
or require Market Hub Partners Storage, L.P. or any Restricted Subsidiary
to repurchase or secure that other Indebtedness; (iii) such designation as
an Unrestricted Subsidiary would be permitted under Section 10.10 of the
Indenture; (iv) that designation would not result in the creation or
imposition of any Lien on any of the properties or assets of Market Hub
Partners Storage, L.P. or any Restricted Subsidiary (other than any
Permitted Lien); and (v) Market Hub Partners Storage, L.P. could incur at
least $1.00 of additional Indebtedness not constituting Permitted
Indebtedness in accordance with Section 10.11(a) of the Indenture;
provided, however, that with respect to clause (i) of this sentence,
Market Hub Partners Storage, L.P. or a Restricted Subsidiary may be liable
for the payment of Indebtedness of an Unrestricted Subsidiary if (x) the
liability constituted a Permitted Investment or a Restricted Payment
permitted under Section 10.10 of the Indenture, in each case at the time
of incurrence, or (y) the liability would be a Permitted Investment at the
time of designation of that Subsidiary as
16
an Unrestricted Subsidiary. Any such designation by the Board of Directors
must be evidenced to the Lender by filing a Board Resolution with the
Lender giving effect to that designation, together with an Officers'
Certificate stating that such designation complies with the requirements
of the Agreement. The Board of Directors may designate any Unrestricted
Subsidiary as a Restricted Subsidiary if, immediately after giving effect
to such designation on a pro forma basis, (i) no Default or Event of
Default has occurred and is continuing, (ii) Market Hub Partners Storage,
L.P. could incur at least $1.00 of additional Indebtedness not
constituting Permitted Indebtedness in accordance with Section 10.11(a) of
the Indenture and (iii) if any of the Properties of Market Hub Partners
Storage, L.P. or any Restricted Subsidiary would on such designation
become subject to any Lien (other than a Permitted Lien), the creation or
imposition of that Lien shall comply with Section 10.13 of the Indenture.
"VOTING EQUITY INTERESTS" shall have the meaning set forth in the
Indenture.
1.3 UNDEFINED FINANCIAL ACCOUNTING TERMS. Undefined financial
accounting terms used in this Agreement shall be defined according to GAAP at
the time in effect.
1.4 REFERENCES. References in this Agreement to Exhibit, Article, or
Section numbers shall be to Exhibits, Articles, or Sections of this Agreement,
unless expressly stated to the contrary. References in this Agreement to
"hereby," "herein," "hereinafter," "hereinabove," "hereinbelow," "hereof,"
"hereunder" and words of similar import shall be to this Agreement in its
entirety and not only to the particular Exhibit, Article, or Section in which
such reference appears.
1.5 ARTICLES AND SECTIONS. This Agreement, for convenience only, has
been divided into Articles and Sections; and it is understood that the rights
and other legal relations of the parties hereto shall be determined from this
instrument as an entirety and without regard to the aforesaid division into
Articles and Sections and without regard to headings prefixed to such Articles
or Sections.
1.6 NUMBER AND GENDER. Whenever the context requires, reference
herein made to the single number shall be understood to include the plural; and
likewise, the plural shall be understood to include the singular. Definitions of
terms defined in the singular or plural shall be equally applicable to the
plural or singular, as the case may be, unless otherwise indicated. Words
denoting sex shall be construed to include the masculine, feminine and neuter,
when such construction is appropriate; and specific enumeration shall not
exclude the general but shall be construed as cumulative.
1.7 INCORPORATION OF EXHIBITS. The Exhibits attached to this
Agreement are incorporated herein and shall be considered a part of this
Agreement for all purposes.
17
ARTICLE II
TERMS OF FACILITY
2.1 REVOLVING LINE OF CREDIT. (a) Upon the terms and conditions
(including, without limitation, the right of the Lender to decline to make any
Loan so long as any Default or Event of Default exists) and relying on the
representations and warranties contained in this Agreement, the Lender agrees,
during the Commitment Period, to make Loans, in immediately available funds at
the Applicable Lending Office or the Principal Office, to or for the benefit of
the Borrower, from time to time on any Business Day designated by the Borrower
following receipt by the Lender of a Borrowing Request; provided, however, no
Loan shall exceed the then existing Available Commitment.
(b) Subject to the terms of this Agreement, during the Commitment
Period, the Borrower may borrow, repay, and reborrow and convert Loans of one
type or with one Interest Period into Loans of another type or with a different
Interest Period. Except for prepayments made pursuant to Section 2.10, each
borrowing, conversion, and prepayment of principal of Loans shall be in an
amount at least equal to $100,000. Each borrowing, prepayment, or conversion of
or into a Loan of a different type or, in the case of a Fixed Rate Loan, having
a different Interest Period, shall be deemed a separate borrowing, conversion,
and prepayment for purposes of the foregoing, one for each type of Loan or
Interest Period. Anything in this Agreement to the contrary notwithstanding, the
aggregate principal amount of LIBO Rate Loans having the same Interest Period
shall be at least equal to $100,000; and if any LIBO Rate Loan would otherwise
be in a lesser principal amount for any period, such Loan shall be a Floating
Rate Loan during such period.
(c) The Loans shall be made and maintained at the Applicable Lending
Office or the Principal Office and shall be evidenced by the Note.
(d) The Borrower may, fully or partially, reduce the Commitment,
provided that (i) notice of such reduction must be received by the Lender by
10:00 a.m. Houston, Texas, time on the fifth Business Day preceding the
effective date of such reduction, (ii) each such reduction in the Commitment
must be in a minimum amount of $500,000.00 or any whole multiple of $100,000.00
in excess thereof, (iii) Borrower shall not be entitled to an increase in the
Commitment once it has been so reduced, and (iv) if the Loan Balance exceeds the
Commitment as so reduced, Borrower shall make a mandatory prepayment on the
principal amount of the Loan Balance in at least the amount of such excess.
2.2 USE OF LOAN PROCEEDS. Proceeds of all Loans shall be used solely
for general corporate or partnership purposes and working capital needs.
2.3 INTEREST. Subject to the terms of this Agreement (including,
without limitation, Section 2.11), interest on the Loans shall accrue and be
payable at a rate per annum equal to the Floating Rate for each Floating Rate
Loan and the Adjusted LIBO Rate for each LIBO Rate Loan. Interest on all
Floating Rate Loans shall be computed on the basis of a year of 365
18
or 366 days, as the case may be, and actual days elapsed (including the first
day but excluding the last day) during the period for which payable. Interest on
all LIBO Rate Loans shall be computed on the basis of a year of 360 days, and
actual days elapsed (including the first day but excluding the last day) during
the period for which payable. Notwithstanding the foregoing, interest on
past-due principal and, to the extent permitted by applicable law, past-due
interest, shall accrue at the Default Rate, computed on the basis of a year of
365 or 366 days, as the case may be, and actual days elapsed (including the
first day but excluding the last day) during the period for which payable, and
shall be payable upon demand by the Lender at any time as to all or any portion
of such interest. In the event that the Borrower fails to select the duration of
any Interest Period for any Fixed Rate Loan within the time period and otherwise
as provided herein, such Loan (if outstanding as a Fixed Rate Loan) will be
automatically converted into a Floating Rate Loan on the last day of the then
current Interest Period for such Loan or (if outstanding as a Floating Rate
Loan) will remain as, or (if not then outstanding) will be made as, a Floating
Rate Loan. Interest provided for herein shall be calculated on unpaid sums
actually advanced and outstanding pursuant to the terms of this Agreement and
only for the period from the date or dates of such advances until repayment.
2.4 REPAYMENT OF LOANS AND INTEREST. Accrued and unpaid interest on
each outstanding Floating Rate Loan shall be due and payable quarterly
commencing on the first day of May, 1998, and continuing on the first day of
each third calendar month thereafter while any Floating Rate Loan remains
outstanding, the payment in each instance to be the amount of interest which has
accrued and remains unpaid in respect of the relevant Loan. Accrued and unpaid
interest on each outstanding Fixed Rate Loan shall be due and payable on the
last day of the Interest Period for such Fixed Rate Loan and, in the case of any
Interest Period in excess of three months, on the day of the third calendar
month following the commencement of such Interest Period corresponding to the
day of the calendar month on which such Interest Period commenced, the payment
in each instance to be the amount of interest which has accrued and remains
unpaid in respect of the relevant Loan. The Loan Balance, together with all
accrued and unpaid interest thereon, shall be due and payable at Final Maturity.
At the time of making each payment hereunder or under the Note, the Borrower
shall specify to the Lender the Loans or other amounts payable by the Borrower
hereunder to which such payment is to be applied. In the event the Borrower
fails to so specify, or if an Event of Default has occurred and is continuing,
the Lender may apply such payment as it may elect in its sole discretion.
2.5 OUTSTANDING AMOUNTS. The outstanding principal balance of the
Note reflected by the notations by the Lender on its records shall be deemed
rebuttably presumptive evidence of the principal amount owing on the Note. The
liability for payment of principal and interest evidenced by the Note shall be
limited to principal amounts actually advanced and outstanding pursuant to this
Agreement and interest on such amounts calculated in accordance with this
Agreement.
2.6 TIME, PLACE, AND METHOD OF PAYMENTS. All payments required
pursuant to this Agreement or the Note shall be made in lawful money of the
United States of America and in immediately available funds, shall be deemed
received by the Lender on the next Business Day following receipt if such
receipt is after 2:00 p.m., Central Standard or Daylight Savings Time,
19
as the case may be, on any Business Day, and shall be made at the Principal
Office. Except as provided to the contrary herein, if the due date of any
payment hereunder or under the Note would otherwise fall on a day which is not a
Business Day, such date shall be extended to the next succeeding Business Day,
and interest shall be payable for any principal so extended for the period of
such extension.
2.7 VOLUNTARY PREPAYMENTS AND CONVERSIONS OF LOANS. Subject to
applicable provisions of this Agreement, the Borrower shall have the right at
any time or from time to time to prepay Loans and to convert Loans of one type
or with one Interest Period into Loans of another type or with a different
Interest Period; provided, however, that (a) the Borrower shall give the Lender
notice of each such prepayment or conversion of all or any portion of a Fixed
Rate Loan no less than two Business Days prior to prepayment or conversion, (b)
any Fixed Rate Loan may be prepaid or converted only on the last day of an
Interest Period for such Loan, (c) the Borrower shall pay all accrued and unpaid
interest on the amounts prepaid or converted, and (d) no such prepayment or
conversion shall serve to postpone the repayment when due of any Obligation.
2.8 COMMITMENT FEE. In addition to interest on the Note as provided
herein and all other fees payable hereunder and to compensate the Lender for
maintaining funds available, the Borrower shall pay to the Lender, in
immediately available funds, on the first day of April, 1998, and on the first
day of each third calendar month thereafter during the Commitment Period, a fee
in the amount of three-eighths percent (3/8%) per annum, calculated on the basis
of a year of 365 or 366 days, as the case may be, and actual days elapsed
(including the first day but excluding the last day), on the average daily
amount of the Available Commitment during the preceding quarterly period.
2.9 FACILITY FEE. In addition to interest on the Note as provided
herein and all other fees payable hereunder and to compensate the Lender for the
costs of the extension of credit hereunder, the Borrower shall pay to the
Lender, in immediately available funds, a facility fee in the amount of
$125,000. It is acknowledged and agreed to one-half of such fees was paid upon
the receipt of a written commitment from the Lender, and the remaining one-half
shall be payable on the Closing Date.
2.10 SECURITY INTEREST IN ACCOUNTS; RIGHT OF OFFSET. As security for
the payment and performance of the Obligations, the Borrower hereby transfers,
assigns, and pledges to the Lender and grant to the Lender a security interest
in all funds of the Borrower now or hereafter or from time to time on deposit
with the Lender, with such interest of the Lender to be retransferred,
reassigned, and/or released by the Lender, as the case may be, at the expense of
the Borrower upon payment in full and complete performance by the Borrower of
all Obligations. All remedies as secured party or assignee of such funds shall
be exercisable by the Lender upon the occurrence and during the continuance of
any Event of Default, regardless of whether the exercise of any such remedy
would result in any penalty or loss of interest or profit with respect to any
withdrawal of funds deposited in a time deposit account prior to the maturity
thereof. Furthermore, the Borrower hereby grants to the Lender the right,
exercisable upon the occurrence and during the continuance of an Event of
Default at such time as any Obligation shall mature,
20
whether by acceleration of maturity or otherwise, of offset or banker's lien
against all funds of the Borrower now or hereafter or from time to time on
deposit with the Lender, regardless of whether the exercise of any such remedy
would result in any penalty or loss of interest or profit with respect to any
withdrawal of funds deposited in a time deposit account prior to the maturity
thereof.
2.11 GENERAL PROVISIONS RELATING TO INTEREST. (a) It is the
intention of the parties hereto to comply strictly with the usury laws of the
State of Texas and the United States of America. In this connection, there shall
never be collected, charged, or received on the sums advanced hereunder interest
in excess of that which would accrue at the Highest Lawful Rate. For purposes of
Article 5069-1.04, Vernon's TEXAS CIVIL STATUTES, as amended, the Borrower
agrees that the Highest Lawful Rate shall be the "indicated (weekly) rate
ceiling" as defined in such Article, provided that the Lender may also rely, to
the extent permitted by applicable laws of the State of Texas or the United
States of America, on alternative maximum rates of interest under other laws of
the State of Texas or the United States of America applicable to the Lender, if
greater.
(b) Notwithstanding anything herein or in the Note to the contrary,
during any Limitation Period, the interest rate to be charged on amounts
evidenced by the Note shall be the Highest Lawful Rate, and the obligation, if
any, of the Borrower for the payment of fees or other charges deemed to be
interest under applicable law shall be suspended. During any period or periods
of time following a Limitation Period, to the extent permitted by applicable
laws of the State of Texas or the United States of America, the interest rate to
be charged hereunder shall remain at the Highest Lawful Rate until such time as
there has been paid to the Lender (i) the amount of interest in excess of that
accruing at the Highest Lawful Rate that the Lender would have received during
the Limitation Period had the interest rate remained at the otherwise applicable
rate, and (ii) all interest and fees otherwise payable to the Lender but for the
effect of such Limitation Period.
(c) If, under any circumstances, the aggregate amounts paid on the
Note or under this Agreement or any other Loan Document include amounts which by
law are deemed interest and which would exceed the amount permitted if the
Highest Lawful Rate were in effect, the Borrower stipulates that such payment
and collection will have been and will be deemed to have been, to the extent
permitted by applicable laws of the State of Texas or the United States of
America, the result of mathematical error on the part of the Borrower and the
Lender; and the Lender shall promptly refund the amount of such excess (to the
extent only of such interest payments in excess of that which would have accrued
and been payable on the basis of the Highest Lawful Rate) upon discovery of such
error by the Lender or notice thereof from the Borrower. In the event that the
maturity of any Obligation is accelerated, by reason of an election by the
Lender or otherwise, or in the event of any required or permitted prepayment,
then the consideration constituting interest under applicable laws may never
exceed the Highest Lawful Rate; and excess amounts paid which by law are deemed
interest, if any, shall be credited by the Lender on the principal amount of the
Obligations, or if the principal amount of the Obligations shall have been paid
in full, refunded to the Borrower.
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(d) All sums paid, or agreed to be paid, to the Lender for the use,
forbearance and detention of the proceeds of any advance hereunder shall, to the
extent permitted by applicable law, be amortized, prorated, allocated, and
spread throughout the full term hereof until paid in full so that the actual
rate of interest is uniform but does not exceed the Highest Lawful Rate
throughout the full term hereof.
2.12 YIELD PROTECTION. (a) Without limiting the effect of the other
provisions of this Section (but without duplication), the Borrower shall pay to
the Lender from time to time such amounts as the Lender may reasonably determine
are necessary to compensate it for any Additional Costs incurred by the Lender.
(b) Without limiting the effect of the other provisions of this
Section (but without duplication), the Borrower shall pay to the Lender from
time to time on request such amounts as the Lender may reasonably determine are
necessary to compensate the Lender for any costs attributable to the maintenance
by the Lender (or any Applicable Lending Office), pursuant to any Regulatory
Change, of capital in respect of the Commitment, such compensation to include,
without limitation, an amount equal to any reduction of the rate of return on
assets or equity of the Lender (or any Applicable Lending Office) to a level
below that which the Lender (or any Applicable Lending Office) could have
achieved but for such Regulatory Change.
(c) Without limiting the effect of the other provisions of this
Section (but without duplication), the Borrower shall pay to the Lender such
amounts as shall be sufficient in the reasonable opinion of the Lender to
compensate it for any loss, cost, or expense incurred by and as a result of:
(i) any payment, prepayment, or conversion by the Borrower of a Fixed Rate
Loan on a date other than the last day of an Interest Period for such Loan; or
(ii) any failure by the Borrower to borrow a Fixed Rate Loan from the
Lender on the date for such borrowing specified in the relevant Borrowing
Request;
such compensation to include, without limitation, with respect to any LIBO Rate
Loan, an amount equal to the excess, if any, of (A) the amount of interest which
would have accrued on the principal amount so paid, prepaid, converted, or not
borrowed for the period from the date of such payment, prepayment, conversion,
or failure to borrow to the last day of the then current Interest Period for
such Loan (or, in the case of a failure to borrow, the Interest Period for such
Loan which would have commenced on the date of such failure to borrow) at the
applicable rate of interest for such Loan provided for herein over (B) the
interest component (as reasonably deter mined by the Lender) of the amount (as
reasonably determined by the Lender) the Lender would have bid in the London
interbank market for Dollar deposits of amounts comparable to such principal
amount and maturities comparable to such period.
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(d) Determinations by the Lender for purposes of this Section of the
effect of any Regulatory Change on capital maintained, its costs or rate of
return, maintaining Loans, its obligation to make Loans, or on amounts
receivable by it in respect of Loans, or such obligations, and the additional
amounts required to compensate the Lender under this Section shall be PRIMA
FACIE evidence that such amounts are due and owing, absent manifest error,
provided that such determinations are made on a reasonable basis. The Lender
shall furnish the Borrower with a certificate setting forth in reasonable detail
the basis and amount of increased costs incurred or reduced amounts receivable
as a result of any such event, and the statements set forth therein shall be
PRIMA FACIE evidence that such amounts are due and owing, absent manifest error.
The Lender shall (i) notify the Borrower, as promptly as practicable after the
Lender obtains knowledge of any Additional Costs or other sums payable pursuant
to this Section and determines to request compensation therefor, of any event
occurring after the Closing Date which will entitle the Lender to compensation
pursuant to this Section; provided that the Borrower shall not be obligated for
the payment of any Additional Costs or other sums payable pursuant to this
Section to the extent such Additional Costs or other sums accrued more than 90
days prior to the date upon which the Borrower was given such notice; and (ii)
designate a different Applicable Lending Office for the Loans of the Lender
affected by such event if such designation will avoid the need for or reduce the
amount of such compensation and will not, in the sole opinion of the Lender, be
disadvantageous to the Lender. If the Lender requests compensation from the
Borrower under this Section, the Borrower may, by notice to the Lender, require
that the Loans by the Lender of the type with respect to which such compensation
is requested be converted into Floating Rate Loans in accordance with Section
2.7. Any compensation requested by the Lender pursuant to this Section shall be
due and payable to the Lender within fifteen days of delivery of any such notice
by the Lender to the Borrower.
(e) The Lender agrees that it shall not request, and the Borrower
shall not be obligated to pay, any Additional Costs or other sums payable
pursuant to this Section unless similar additional costs and other sums payable
are also generally assessed by the Lender against other customers of the Lender
similarly situated where such customers are subject to documents providing for
such assessment.
2.13 LIMITATION ON TYPES OF LOANS. Anything herein to the contrary
notwithstanding, no more than six separate Loans shall be outstanding at any one
time, with, for purposes of this Section, all Floating Rate Loans constituting
one Loan, and all LIBO Rate Loans for the same Interest Period constituting one
Loan. Anything herein to the contrary notwithstanding, if, on or prior to the
determination of any interest rate for any LIBO Rate Loan for any Interest
Period therefor:
(a) the Lender determines (which determination shall be conclusive)
that quotations of interest rates for the deposits referred to in the
definition of "LIBO Rate" in Section 1.2 are not being provided in the
relevant amounts or for the relevant maturities for purposes of
determining the rate of interest for such Loan as provided in this
Agreement; or
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(b) the Lender determines (which determination shall be conclusive)
that the rates of interest referred to in the definition of "LIBO Rate" in
Section 1.2 upon the basis of which the rate of interest for such Loan for
such Interest Period is to be determined do not accurately reflect the
cost to the Lender of making or maintaining such Loan for such Interest
Period,
then the Lender shall give the Borrower prompt notice thereof; and so long as
such condition remains in effect, the Lender shall be under no obligation to
make LIBO Rate Loans or to convert Loans of any other type into LIBO Rate Loans,
and the Borrower shall, on the last day of the then current Interest Period for
each outstanding LIBO Rate Loan, either prepay such LIBO Rate Loan or convert
such Loan into another type of Loan in accordance with Section 2.7. Before
giving such notice pursuant to this Section, the Lender will designate a
different available Applicable Lending Office for LIBO Rate Loans or take such
other action as the Borrower may request if such designation or action will
avoid the need to suspend the obligation of the Lender to make LIBO Rate Loans
hereunder and will not, in the reasonable opinion of the Lender, be
disadvantageous to the Lender.
2.14 ILLEGALITY. Notwithstanding any other provision of this
Agreement, in the event that it becomes unlawful for the Lender or its
Applicable Lending Office to (a) honor its obligation to make any type of Fixed
Rate Loans hereunder, or (b) maintain any type of Fixed Rate Loans hereunder,
then the Lender shall promptly notify the Borrower thereof; and the obligation
of the Lender hereunder to make such type of Fixed Rate Loans and to convert
other types of Loans into Fixed Rate Loans of such type shall be suspended until
such time as the Lender may again make and maintain Fixed Rate Loans of such
type, and the outstanding Fixed Rate Loans of such type shall be converted into
Floating Rate Loans in accordance with Section 2.7. Before giving such notice
pursuant to this Section, the Lender will designate a different available
Applicable Lending Office for Fixed Rate Loans or take such other action as the
Borrower may request if such designation or action will avoid the need to
suspend the obligation of the Lender to make Fixed Rate Loans and will not, in
the reasonable opinion of the Lender, be disadvantageous to the Lender.
2.15 REGULATORY CHANGE. In the event that by reason of any
Regulatory Change, the Lender (a) incurs Additional Costs based on or measured
by the excess above a specified level of the amount of a category of deposits or
other liabilities of the Lender which includes deposits by reference to which
the interest rate on any Fixed Rate Loan is determined as provided in this
Agreement or a category of extensions of credit or other assets of such Lender
which includes any Fixed Rate Loan, or (b) becomes subject to restrictions on
the amount of such a category of liabilities or assets which it may hold, then,
at the election of the Lender with notice to the Borrower, the obligation of the
Lender to make such Fixed Rate Loans and to convert Floating Rate Loans into
such Fixed Rate Loans shall be suspended until such time as such Regulatory
Change ceases to be in effect, and all such outstanding Fixed Rate Loans shall
be converted into Floating Rate Loans in accordance with Section 2.7.
2.16 LIMITATIONS ON INTEREST PERIODS. Each Interest Period selected
by the Borrower (a) which commences on the last Business Day of a calendar month
(or, with respect
24
to any LIBO Rate Loan, any day for which there is no numerically corresponding
day in the appropriate subsequent calendar month) shall end on the last Business
Day of the appropriate subsequent calendar month, (b) which would otherwise end
on a day which is not a Business Day shall end on the next succeeding Business
Day (or, if such next succeeding Business Day falls in the next succeeding
calendar month, on the next preceding Business Day), (c) which would otherwise
commence before and end after Final Maturity shall end on Final Maturity, and
(d) shall have a duration of not less than one month, as to any LIBO Rate Loan,
and, if any Interest Period would otherwise be a shorter period, the relevant
Loan shall be a Floating Rate Loan during such period.
ARTICLE III
CONDITIONS
The obligations of the Lender to enter into this Agreement and to
make Loans are subject to the satisfaction of the following conditions
precedent:
3.1 RECEIPT OF LOAN DOCUMENTS AND OTHER ITEMS. The Lender shall have
no obligation under this Agreement unless and until all matters incident to the
consummation of the transactions contemplated herein, including, without
limitation, the review by the Lender or its counsel of the title of the
Guarantors to their respective Properties, shall be reasonably satisfactory to
the Lender, and the Lender shall have received, reviewed, and approved the
following documents and other items, appropriately executed when necessary and,
where applicable, acknowledged by one or more authorized officers of the
Borrower or the Guarantors, as the case may be, all in form and substance
reasonably satisfactory to the Lender and dated, where applicable, of even date
herewith or a date prior thereto and reasonably acceptable to the Lender:
(a) multiple counterparts of this Agreement and the Guaranties, as
requested by the Lender;
(b) the Note;
(c) copies of the Articles of Incorporation or Certificate of
Incorporation and all amendments thereto and the bylaws and all amendments
thereto of the limited liability company Guarantors and general partner of
Borrower and the limited partner Guarantors, accompanied by a certificate
issued by the secretary or an assistant secretary of the Guarantors, as
the case may be, to the effect that each such copy is correct and
complete;
(d) certificates of incumbency and signatures of all officers of the
Guarantors and general partner of Borrower and the limited partner
Guarantors who are authorized to execute Loan Documents on behalf of such
entities, each such certificate being executed by the secretary or an
assistant secretary of the
1701059.9:WGD:003566.00097:04/30/98:2:48PM
25
Guarantors and general partner of Borrower and the limited partner
Guarantors, as the case may be;
(e) copies of corporate resolutions approving the Loan Documents and
authorizing the transactions contemplated herein and therein, duly adopted
by the boards of directors of the Guarantors and general partner of
Borrower and the limited partner Guarantors, accompanied by certificates
of the secretary or an assistant secretary of the Guarantors and general
partner of Borrower and the limited partner Guarantors, as the case may
be, to the effect that such copies are true and correct copies of
resolutions duly adopted at a meeting or by unanimous consent of the board
of directors of the Guarantors and general partner of Borrower and the
limited partner Guarantors, as the case may be, and that such resolutions
constitute all the resolutions adopted with respect to such transactions,
have not been amended, modified, or revoked in any respect, and are in
full force and effect as of the date of such certificate;
(f) copies of partnership documents authorizing and approving the
Loan Documents and authorizing the transaction contemplated herein;
(g) multiple counterparts, as requested by the Lender, of the
following Security Instruments creating, evidencing, perfecting, and
otherwise establishing Liens in favor of the Lender in and to the
Collateral:
(i) Mortgage, Deed of Trust, Indenture, Security Agreement, Assignment of
Production, and Financing Statement and Louisiana Act of Mortgage (collectively,
the "MORTGAGE") covering the Mortgaged Properties and all improvements, personal
property, and fixtures related thereto covering only three contracts and any
renewals or extensions of such contracts to wit:
a. Firm Gas Balancing Contract by and
between Xxxx Gas Storage Company, Inc. and
Northern Indiana Public Service Company
dated November 23, 1993, covering the La-1
Gas Storage Facility, Acadian Parish,
Louisiana;
b. Firm Gas Storage Contract by and between Xxxx Bluff Gas Storage
Systems and Northern Indiana Public Service Company dated effective
November 1, 1991, intrastate service for the Xxxx Bluff Gas Storage
Facility, Xxxxxxxx and Liberty Counties, Texas; and
26
c. Firm Gas Storage Contract by and between Xxxx Bluff Gas Storage
Systems and Northern Indiana Public Service Company dated effective
November 1, 1991, covering interstate service pursuant to the
provisions of 18.C.F.R. ss. 284.224 for the Xxxx Bluff Gas Storage
Facility, Xxxxxxxx and Liberty Counties, Texas;
(ii) Financing Statements from the Xxxx Hub Partners,
L.P. and Xxxx Bluff Hub Partners, L.P., as debtors, constituent to
the instrument described in clause (i) above;
(h) audited Financial Statements of the Borrower as of December 31,
1997;
(i) certificates dated as of a recent date from the Secretary of
State or other appropriate Governmental Authority evidencing the existence
or qualification and good standing of the Borrower and the Guarantors in
their respective jurisdictions of incorporation and in any other
jurisdictions where any of them do business;
(j) results of searches of the UCC Records of the Secretary of State
of the States of Texas and Louisiana from a source acceptable to the
Lender and reflecting no Liens against any of the Collateral as to which
perfection of a Lien is accomplished by the filing of a financing
statement other than in favor of the Lender;
(k) confirmation, acceptable to the Lender, of the title of the
Guarantors to the Mortgaged Properties, free and clear of Liens other than
Permitted Liens;
(l) the opinion of Xxxxx & Xxxxx, L.L.P., counsel to the Borrower
and the Guarantors, in the form attached hereto as Exhibit IV, with such
changes thereto as may be approved by the Lender;
(m) the opinion of Phelps, Dunbar, L.L.P., Louisiana Counsel,
covering the validity of the Louisiana Act of Mortgage;
(n) certificates evidencing the insurance coverage required pursuant
to Section 5.15; and
(o) such other agreements, documents, instruments, opinions,
certificates, waivers, consents, and evidence as the Lender may reasonably
request.
3.2 EACH LOAN. In addition to the conditions precedent stated
elsewhere herein, the Lender shall not be obligated to make any Loan unless:
27
(a) the Borrower shall have delivered to the Lender a Borrowing
Request at least the requisite time prior to the requested date for the
relevant Loan; and each statement or certification made in such Borrowing
Request, as the case may be, shall be true and correct in all material
respects on the requested date for such Loan;
(b) no Event of Default or Default shall exist or will occur as a
result of the making of the requested Loan;
(c) each of the representations and warranties of the Borrower and
the Guarantors contained in this Agreement shall be true and correct in
all material respects and shall be deemed to be repeated by the Borrower
as if made on the requested date for such Loan; and
(d) the Guaranties and all of the Security Instruments shall be in
full force and effect and provide to the Lender the security intended
thereby.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
To induce the Lender to enter into this Agreement and to make the
Loans, the Borrower and Guarantors represent and warrant to the Lender (which
representations and warranties shall survive the delivery of the Note) that:
4.1 DUE AUTHORIZATION. The execution and delivery by the Borrower of
this Agreement and the borrowings hereunder, the execution and delivery by the
Borrower of the Note, the repayment of the Note and interest and fees provided
for in the Note and this Agreement, the execution and delivery of the Security
Instruments by the Borrower and the performance of all obligations of the
Borrower under the Loan Documents are within the power of the Borrower, have
been duly authorized by all necessary corporate or partnership action by the
Borrower, and do not and will not (a) require the Borrower to obtain the consent
of any Governmental Authority, (b) contravene or conflict with any Requirement
of Law applicable to the Borrower, (c) contravene or conflict with any
indenture, instrument, or other agreement to which the Borrower is a party or by
which any Property of the Borrower may be presently bound or encumbered, or (d)
result in or require the creation or imposition of any Lien in, upon or of any
Property of the Borrower under any such indenture, instrument, or other
agreement, other than the Loan Documents.
4.2 EXISTENCE. As of the Closing Date, Xxxx Bluff Hub Partners,
L.L.C. and Xxxx Hub Partners, L.L.C. are limited liability companies duly
organized, legally existing, and in good standing under the laws of the State of
Delaware and are duly qualified as a foreign limited liability company and are
in good standing in all jurisdictions wherein the ownership of
28
Property or the operation of their businesses necessitates same, other than
those jurisdictions wherein the failure to so qualify will not have a Material
Adverse Effect.
4.3 PARTNERSHIP EXISTENCE. As of the Closing Date, Market Hub
Partners Storage, L.P., Xxxx Bluff Hub Partners, L.P. and Xxxx Hub Partners,
L.P. are limited partnerships duly organized, legally existing, and in good
standing under the laws of their states of formation and are duly qualified as
limited partnerships and are in good standing in all jurisdictions wherein the
ownership of Property or the operation of their businesses necessitates same,
other than those jurisdictions wherein the failure to so qualify will not have a
Material Adverse Effect.
4.4 VALID AND BINDING OBLIGATIONS. All Loan Documents, when duly
executed and delivered by the Borrower and Guarantors, will be the legal, valid,
and binding obligations of the Borrower and Guarantors, enforceable against the
Borrower and Guarantors in accordance with their respective terms.
4.5 SECURITY INSTRUMENTS. The provisions of each Security Instrument
executed by Xxxx Bluff Hub Partners, L.P. and Xxxx Hub Partners, L.P. are
effective to create in favor of the Lender, a legal, valid, and enforceable Lien
in all right, title, and interest of Xxxx Bluff Hub Partners, L.P. and Xxxx Hub
Partners, L.P. in the Collateral described therein, which Liens, assuming the
accomplishment of recording and filing in accordance with applicable laws prior
to the intervention of rights of other Persons, shall constitute fully perfected
first-priority Liens on all right, title, and interest of Xxxx Bluff Hub
Partners, L.P. and Xxxx Hub Partners, L.P. in the Collateral described therein,
subject to Permitted Liens.
4.6 TITLE TO ASSETS. Subject to Permitted Liens, Xxxx Bluff Hub
Partners, L.P. has good and sufficient title to the Xxxx Bluff Facility, (b)
Xxxx Hub Partners, L.P. has good and sufficient title to the Xxxx Facility and
(c) the Borrower and the Restricted Subsidiaries have good and sufficient title
to its respective other properties that individually or in the aggregate are
Material (except as sold or otherwise disposed of in compliance with this
Agreement).
4.7 SCOPE AND ACCURACY OF FINANCIAL STATEMENTS. The Financial
Statements of the Borrower as of December 31, 1997, present fairly the financial
position and results of operations and cash flows of the Borrower in accordance
with GAAP as at the relevant point in time or for the period indicated, as
applicable. As of the Closing Date, no event or circumstance has occurred since
December 31, 1997, which could reasonably be expected to have a Material Adverse
Effect.
4.8 NO MATERIAL MISSTATEMENTS. No written information, exhibit,
written statement, or report furnished to the Lender by or at the direction of
the Borrower and Guarantors in connection with this Agreement contains any
material misstatement of fact or omits to state a material fact or any fact
necessary to make the statements contained therein not misleading as of the date
made or deemed made; provided that, with respect to projected financial
information, the Borrower represents only that such information was prepared in
good faith based upon assumptions believed to be reasonable at the time.
29
4.9 LIABILITIES, LITIGATION, AND RESTRICTIONS. Other than as listed
under the heading "Liabilities" on Exhibit V attached hereto, the Borrower and
Guarantors have no liabilities, direct, or contingent, which may materially and
adversely affect its business or operations or their ownership of the
Collateral. Except as set forth under the heading "Litigation" on Exhibit V
hereto, no litigation or other action of any nature affecting the Borrower and
Guarantors is pending against any Borrower or any Guarantor before any
Governmental Authority or, to the best knowledge of the Borrower and Guarantors,
threatened against the Borrower and Guarantors which might reasonably be
expected to result in any impairment of its ownership of any Collateral or have
a Material Adverse Effect.
4.10 AUTHORIZATIONS; CONSENTS. Except as expressly contemplated by
this Agreement, and except as has been obtained or which will be obtained when
required, no authorization, consent, approval, exemption, franchise, permit, or
license of, or filing with, any Governmental Authority or any other Person is
required to authorize or is otherwise required to be obtained by any Borrower or
any Guarantor in connection with the valid execution and delivery by the
Borrower and Guarantors of the Loan Documents or any instrument contemplated
hereby, the repayment by the Borrower and Guarantors of the Note and interest
and fees provided in the Note and this Agreement, or except where failure would
not have a Material Adverse Effect, the performance by the Borrower and
Guarantors of the Obligations.
4.11 ENVIRONMENTAL LAWS. To the best knowledge and belief of the
Borrower and Guarantors, except as would not have a Material Adverse Effect, or
as described on Exhibit V under the heading "Environmental Matters:"
(a) no Property of the Borrower and Guarantors is currently on or
has ever been on, or is adjacent to any Property which is on or has ever
been on, any federal or state list of Superfund Sites;
(b) no Hazardous Substances have been generated, transported, and/or
disposed of by the Borrower and Guarantors at a site which was, at the
time of such generation, transportation, and/or disposal, or has since
become, a Superfund Site;
(c) except in accordance with applicable Requirements of Law or the
terms of a valid permit, license, certificate, or approval of the relevant
Governmental Authority, no Release of Hazardous Substances by the Borrower
and Guarantors or from, affecting, or related to any Property of the
Borrower and Guarantors or adjacent to any Property of the Borrower and
Guarantors has occurred; and
(d) no Environmental Complaint has been received by the Borrower and
Guarantors.
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4.12 COMPLIANCE WITH FEDERAL RESERVE REGULATIONS. No transaction
contemplated by the Loan Documents is in violation of any regulations
promulgated by the Board of Governors of the Federal Reserve System, including,
without limitation, Regulations G, T, U, or X.
4.13 INVESTMENT COMPANY ACT COMPLIANCE. The Borrower is not, nor is
the Borrower directly or indirectly controlled by or acting on behalf of any
Person which is, an "investment company" or an "affiliated person" of an
"investment company" within the meaning of the Investment Company Act of 1940,
as amended.
4.14 PUBLIC UTILITY HOLDING COMPANY ACT COMPLIANCE. The Borrower is
not a "holding company," or an "affiliate" of a "holding company" or of a
"subsidiary company" of a "holding company," within the meaning of the Public
Utility Holding Company Act of 1935, as amended.
4.15 PROPER FILING OF TAX RETURNS; PAYMENT OF TAXES DUE. The
Borrower has duly and properly filed its United States income tax return and all
other tax returns which are required to be filed and has paid all taxes due
except such as are being contested in good faith and as to which adequate
provisions and disclosures have been made. The respective charges and reserves
on the books of the Borrower with respect to taxes and other governmental
charges are adequate.
4.16 CASUALTIES OR TAKING OF PROPERTY. As of the Closing Date,
except as disclosed on Exhibit V under the heading "Casualties," since December
31, 1997, neither the business nor any Property of the Borrower and the
Guarantors has been materially adversely affected as a result of any fire,
explosion, earthquake, flood, drought, windstorm, accident, strike or other
labor disturbance, embargo, requisition or taking of Property, or cancellation
of contracts, permits, or concessions by any Governmental Authority, riot,
activities of armed forces, or acts of God.
4.17 LOCATIONS OF BORROWER. The principal place of business and
chief executive office of the Borrower is located at the address of the Borrower
set forth in Section 8.3 or at such other location as the Borrower may have, by
proper written notice hereunder, advised the Lender, provided that such other
location is within a state in which appropriate financing statements from the
Borrower in favor of the Lender have been filed.
4.18 SUBSIDIARIES. As of the Closing Date, the Borrower has no
Subsidiaries except those described on Exhibit V under the heading
"Subsidiaries", and the Guarantors have no Subsidiaries other than on Exhibit V.
31
ARTICLE V
AFFIRMATIVE COVENANTS
So long as any Obligation remains outstanding or unpaid or any
Commitment exists, the Borrower and Guarantors shall:
5.1 MAINTENANCE AND ACCESS TO RECORDS AND INSPECTION OF PROPERTIES.
Keep adequate records, in accordance with GAAP, of all its transactions so that
at any time, and from time to time, its true and complete financial condition
may be readily determined, and promptly following the reasonable request of the
Lender, make such records available for inspection by the Lender and, at the
expense of the Borrower, allow the Lender to make and take away copies thereof.
Permit, upon reasonable prior notice, any authorized representative of the
Lender to visit and inspect, at the expense of the Borrower and/or Guarantors,
any tangible Property of the Borrower and/or the Guarantors.
5.2 QUARTERLY FINANCIAL STATEMENTS; COMPLIANCE CERTIFICATES. Deliver
to the Lender, (a) on or before the 60th day after the close of each of the
first three quarterly periods of each fiscal year of the Borrower, a copy of the
unaudited consolidated and consolidating Financial Statements of the Borrower
and the Guarantors as at the close of such quarterly period and from the
beginning of such fiscal year to the end of such period, such Financial
Statements to be certified by Responsible Officers of the Borrower and the
Guarantors as having been prepared in accordance with GAAP consistently applied
and as a fair presentation of the condition of the Borrower and the Guarantors,
subject to changes resulting from normal year-end audit adjustments, and (b) on
or before the 60th day after the close of each fiscal quarter, with the
exception of the last fiscal quarter, a Compliance Certificate.
5.3 ANNUAL FINANCIAL STATEMENTS. Deliver to the Lender, on or before
the 120th day after the close of each fiscal year of the Borrower, a copy of the
annual audited consolidated and consolidating Financial Statements of the
Borrower and the Guarantors and a Compliance Certificate.
5.4 TITLE DEFECTS. In the event the Lender receives notice of any
defect in the title to Mortgaged Property after the Closing Date which defect
occurred after the Closing Date, which would result in a breach of Section 4.7
and which is Material in the opinion of the Lender, the Borrower or the
Mortgagors shall clear such title defects, after the Lender gives written notice
of such defect to the Borrower and, in the event any such title defects are not
cured in a timely manner, pay all related costs and fees incurred by the Lender
to do so.
5.5 NOTICES OF CERTAIN EVENTS. Deliver to the Lender, promptly upon
having knowledge of the occurrence of any of the following events or
circumstances, a written statement with respect thereto, signed by a Responsible
Officer of the Borrower and setting forth the relevant event or circumstance and
the steps being taken by the Borrower or the Guarantors with respect to such
event or circumstance:
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(a) any Default or Event of Default;
(b) any default or event of default under any contractual obligation
of the Borrower or the Guarantors, or any litigation, investigation, or
proceeding between the Borrower or the Guarantors and any Governmental
Authority which, in either case, if not cured or if adversely determined,
as the case may be, could reasonably be expected to have a Material
Adverse Effect;
(c) any litigation or proceeding involving the Borrower or the
Guarantors as a defendant or in which any Property of the Borrower or the
Guarantors is subject to a claim and in which the amount involved is
$1,000,000 or more and which is not covered by insurance or in which
injunctive or similar relief is sought;
(d) the receipt by the Borrower and/or Guarantors of any written
Environmental Complaint by a Governmental Authority regarding any
violation or alleged violation of Environmental Laws by the Borrower
and/or Guarantors which violation would have a Material Adverse Effect;
(e) any actual, proposed, or threatened testing or other
investigation by any Governmental Authority concerning the environmental
condition of, or relating to, any Property of the Borrower and/or
Guarantors following any written allegation of a violation by a Borrower
or a Guarantor of any Requirement of Law;
(f) any Release of Hazardous Substances by the Borrower and/or
Guarantors or from, affecting, or related to any Property of the Borrower
and/or Guarantors except in accordance with applicable Requirements of Law
or the terms of a valid permit, license, certificate, or approval of the
relevant Governmental Authority, or the violation of any Environmental Law
by any Borrower or any Guarantor, or the revocation, suspension, or
forfeiture of or failure to renew, any permit, license, registration,
approval, or authorization in favor of any Borrower or any Guarantor
which, in each case, could reasonably be expected to have a Material
Adverse Effect; and
(g) any change in the senior management or general partner of the
Borrower or the senior management of any general partner of the Borrower.
5.6 ADDITIONAL INFORMATION. Furnish to the Lender, within five days
after any material report (other than financial statements) or other
communication is sent by the Borrower, the Guarantors, or any Subsidiary of the
Guarantors to its stockholders or filed by the Borrower, the Guarantors, or any
Subsidiary of the Guarantors with the Securities and Exchange Commission or any
successor or analogous Governmental Authority, copies of such report or
communication and, promptly upon the request of the Lender, such additional
financial or other information concerning the assets, liabilities, operations,
and transactions of the Borrower as the Lender may from time to time reasonably
request; and notify the Lender not less than ten Business Days prior to the
occurrence of any condition or event that may change the proper location for the
filing of
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any financing statement or other public notice or recording for the purpose of
perfecting a Lien in any Collateral, including, without limitation, any change
in its name or the location of its principal place of business or chief
executive office; and upon the reasonable request of the Lender, execute such
additional Security Instruments as may be necessary or appropriate in connection
therewith.
5.7 COMPLIANCE WITH LAWS. Except as described on Exhibit V and
except to the extent the failure to comply or cause compliance would not have a
Material Adverse Effect, comply with all applicable Requirements of Law,
including, without limitation, (a) the Natural Gas Policy Act of 1978, as
amended, (b) ERISA, (c) Environmental Laws, and (d) all permits, licenses,
registrations, approvals, and authorizations (i) related to any natural or
environmental resource or media located on, above, within, in the vicinity of,
related to or affected by any Property of the Borrower and Guarantors, (ii)
required for the performance of the operations of the Borrower and Guarantors,
or (iii) applicable to the use, generation, handling, storage, treatment,
transport, or disposal of any Hazardous Substances; and cause all employees,
crew members, agents, contractors, subcontractors, and future lessees (pursuant
to appropriate lease provisions) of the Borrower and Guarantors, while such
Persons are acting within the scope of their relationship with the Borrower and
Guarantors, to comply with all such Requirements of Law as may be necessary or
appropriate to enable the Borrower and Guarantors to so comply.
5.8 PAYMENT OF ASSESSMENTS AND CHARGES. Pay all taxes, assessments,
governmental charges, Material rent, and lawful Material claims for labor,
materials and supplies which, if unpaid, might become by law a Lien against the
Property of the Borrower and Guarantors, except any of the foregoing being
contested in good faith and as to which adequate reserve in accordance with GAAP
has been established or unless failure to pay would not have a Material Adverse
Effect.
5.9 MAINTENANCE OF CORPORATE AND PARTNERSHIP EXISTENCE AND GOOD
STANDING. Except as otherwise permitted by this Agreement, Borrower and
Guarantors shall maintain their corporate or partnership existence or
qualification and good standing in its jurisdictions of incorporation or
formation and in all jurisdictions wherein the Property now owned or hereafter
acquired or business now or hereafter conducted necessitates same, provided,
however, that the Borrower shall not be required to preserve any such existence
of its Restricted Subsidiaries, rights of franchises, if the Board of Directors
of the Borrower shall determine that the preservation hereof is no longer
desirable in the conduct of the business of the Borrower and its Restricted
Subsidiaries, taken as a whole, and that the loss thereof is not disadvantageous
in any material respect to the Lender.
5.10 PAYMENT OF NOTES; PERFORMANCE OF OBLIGATIONS. Pay the Note
according to the reading, tenor, and effect thereof, as modified hereby, and do
and perform every act and discharge all of its other Obligations (after giving
effect to all applicable notice and cure periods).
5.11 FURTHER ASSURANCES. Promptly cure any defects in the execution
and delivery of any of the Loan Documents by the Borrower and/or the Guarantors
and all agreements contemplated thereby, and execute, acknowledge, and deliver
such other assurances and
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instruments as shall, in the reasonable opinion of the Lender, be necessary to
fulfill the terms of the Loan Documents.
5.12 FEES AND EXPENSES OF COUNSEL TO LENDER. Upon request by the
Lender, promptly reimburse the Lender for all reasonable fees and expenses of
Xxxxxxx Xxxxxx L.L.P., special counsel to the Lender, in connection with the
preparation of this Agreement and all documentation contemplated hereby, the
satisfaction of the conditions precedent set forth herein, the filing and
recordation of Security Instruments, and the consummation of the transactions
contemplated in this Agreement and to ratify, amend, restate, or prepare
additional Loan Documents, as the case may be and for the filing and recordation
of Security Instruments.
5.13 SUBSEQUENT FEES AND EXPENSES OF LENDER. Upon the occurrence and
during the continuance of any Event of Default, upon request by the Lender,
promptly reimburse the Lender (to the fullest extent permitted by law) for all
amounts reasonably expended, advanced, or incurred by or on behalf of the Lender
to collect the Obligations; to enforce the rights of the Lender under any of the
Loan Documents; and to protect the Properties or business of the Borrower and
the Guarantors, including, without limitation, the Collateral, which amounts
shall be deemed compensatory in nature and liquidated as to amount upon notice
to the Borrower by the Lender and which amounts shall include, but not be
limited to (a) all court costs, (b) reasonable attorneys' fees, (c) reasonable
fees and expenses of auditors and accountants incurred to protect the interests
of the Lender, (d) fees and expenses incurred in connection with the
participation by the Lender as a member of the creditors' committee in a case
commenced under any Insolvency Proceeding, (e) fees and expenses incurred in
connection with lifting the automatic stay prescribed in ss.362 Title 11 of the
United States Code, and (f) fees and expenses incurred in connection with any
action pursuant to ss.1129 Title 11 of the United States Code all reasonably
incurred by the Lender in connection with the collection of any sums due under
the Loan Documents, together with interest at the per annum interest rate equal
to the Floating Rate, calculated on a basis of a calendar year of 365 or 366
days, as the case may be, counting the actual number of days elapsed, on each
such amount from the date of notification that the same was expended, advanced,
or incurred by the Lender until the date it is repaid to the Lender, with the
obligations under this Section surviving the non-assumption of this Agreement in
a case commenced under any Insolvency Proceeding and being binding upon the
Borrower and/or a trustee, receiver, custodian, or liquidator of the Borrower
appointed in any such case.
5.14 OPERATION AND MAINTENANCE OF STORAGE FACILITIES. Develop,
maintain, and operate the Xxxx Bluff and Xxxx facilities and any other
facilities hereinafter acquired in a prudent and workmanlike manner in
accordance with industry standards.
Subject to Section 6.4, maintain all of its Material tangible
Properties in good repair and condition, ordinary wear and tear excepted; make
all necessary replacements thereof and operate such Properties in a good and
workmanlike manner.
5.15 MAINTENANCE OF INSURANCE. The Borrower shall at all times keep
all of its, and cause its Restricted Subsidiaries to keep their Properties which
are of an insurable nature insured with insurers, believed by the Borrower to be
responsible, against loss or damage to the
35
extent that property of similar character and in a similar location is usually
so insured by corporations similarly situated and owning like Properties.
The Borrower or any Restricted Subsidiary may adopt such other plan
or method of protection, in lieu of or supplemental to insurance with insurers,
whether by the establishment of an insurance fund or reserve to be held and
applied to make good losses from casualties, or otherwise, conforming to the
systems of self-insurance maintained by similarly situated companies, as may be
determined by the Board of Directors of the Borrower or such Restricted
Subsidiary.
5.16 INDEMNIFICATION. INDEMNIFY AND HOLD THE LENDER AND ITS
SHAREHOLDERS, OFFICERS, DIRECTORS, EMPLOYEES, AGENTS, ATTORNEYS-IN-FACT, AND
AFFILIATES AND EACH TRUSTEE (THE "INDEMNIFIED PARTIES") FOR THE BENEFIT OF THE
LENDER UNDER ANY SECURITY INSTRUMENT HARMLESS FROM AND AGAINST ANY AND ALL
CLAIMS, LOSSES, DAMAGES, LIABILITIES, FINES, PENALTIES, CHARGES, ADMINISTRATIVE
AND JUDICIAL PROCEEDINGS AND ORDERS, JUDGMENTS, REMEDIAL ACTIONS, REQUIREMENTS
AND ENFORCEMENT ACTIONS OF ANY KIND, AND ALL COSTS AND EXPENSES INCURRED IN
CONNECTION THEREWITH (INCLUDING, WITHOUT LIMITATION, REASONABLE ATTORNEYS' FEES
AND EXPENSES) (COLLECTIVELY, "DAMAGES"), ARISING DIRECTLY OR INDIRECTLY, IN
WHOLE OR IN PART, FROM (A) THE PRESENCE OF ANY HAZARDOUS SUBSTANCES ON, UNDER,
OR FROM ANY PROPERTY OF THE BORROWER AND GUARANTORS, OCCURRING PRIOR TO THE
RELEASE DATE, WHETHER PRIOR TO OR DURING THE TERM HEREOF, (B) ANY ACTIVITY
CARRIED ON OR UNDERTAKEN ON OR OFF ANY PROPERTY OF THE BORROWER AND GUARANTORS
OCCURRING PRIOR TO THE RELEASE DATE, WHETHER PRIOR TO OR DURING THE TERM HEREOF,
AND WHETHER BY THE BORROWER AND GUARANTORS OR ANY PREDECESSOR IN TITLE,
EMPLOYEE, AGENT, CONTRACTOR, OR SUBCONTRACTOR OF THE BORROWER AND GUARANTORS OR
ANY OTHER PERSON AT ANY TIME OCCUPYING OR PRESENT ON SUCH PROPERTY, IN
CONNECTION WITH THE HANDLING, TREATMENT, REMOVAL, STORAGE, DECONTAMINATION,
CLEANUP, TRANSPORTATION, OR DISPOSAL OF ANY HAZARDOUS SUBSTANCES AT ANY TIME
LOCATED OR PRESENT ON OR UNDER SUCH PROPERTY, (C) ANY RESIDUAL CONTAMINATION ON
OR UNDER ANY PROPERTY OF THE BORROWER AND GUARANTORS OCCURRING PRIOR TO THE
RELEASE DATE, (D) ANY CONTAMINATION OCCURRING PRIOR TO THE RELEASE DATE OF ANY
PROPERTY OR NATURAL RESOURCES ARISING IN CONNECTION WITH THE GENERATION, USE,
HANDLING, STORAGE, TRANSPORTATION OR DISPOSAL OF ANY HAZARDOUS SUBSTANCES BY THE
BORROWER AND GUARANTORS OR ANY EMPLOYEE, AGENT, CONTRACTOR, OR SUBCONTRACTOR OF
THE BORROWER AND GUARANTORS WHILE SUCH PERSONS ARE ACTING WITHIN THE SCOPE OF
THEIR RELATIONSHIP WITH THE BORROWER AND GUARANTORS, IRRESPECTIVE OF WHETHER ANY
OF SUCH ACTIVITIES WERE OR WILL BE UNDERTAKEN IN ACCORDANCE WITH APPLICABLE
REQUIREMENTS OF LAW, OR (E) THE PERFORMANCE AND ENFORCEMENT OF ANY LOAN
DOCUMENT,
36
OR ANY OTHER ACT OR OMISSION IN CONNECTION WITH OR RELATED TO ANY LOAN DOCUMENT
OR THE TRANSACTIONS CONTEMPLATED THEREBY, INCLUDING, WITHOUT LIMITATION, ANY OF
THE FOREGOING IN THIS SECTION ARISING FROM NEGLIGENCE, EXCLUDING GROSS
NEGLIGENCE AND WILFUL MISCONDUCT OF ANY INDEMNIFIED PARTY OR ANY VIOLATION OF
ANY LOAN DOCUMENT OR REQUIREMENT OF LAW BY AN INDEMNIFIED PARTY, WHETHER SOLE OR
CONCURRENT, ON THE PART OF THE LENDER OR ANY OF ITS SHAREHOLDERS, OFFICERS,
DIRECTORS, EMPLOYEES, AGENTS, ATTORNEYS-IN-FACT, OR AFFILIATES OR ANY TRUSTEE
FOR THE BENEFIT OF THE LENDER UNDER ANY SECURITY INSTRUMENT AND EXCLUDING ANY OF
THE FOREGOING ARISING FROM CLAIMS BETWEEN INDEMNIFIED PARTIES; WITH THE
FOREGOING INDEMNITY SURVIVING SATISFACTION OF ALL OBLIGATIONS AND THE
TERMINATION OF THIS AGREEMENT. "RELEASE DATE" AS USED HEREIN MEANS THE EARLIER
OF THE FOLLOWING TWO DATES: (I) THE DATE ON WHICH THE INDEBTEDNESS AND
OBLIGATIONS SECURED HEREBY HAVE BEEN PAID AND PERFORMED IN FULL, OR (II) THE
DATE ON WHICH THE LIEN OF THE SECURITY INSTRUMENTS IS FULLY AND FINALLY
FORECLOSED OR A CONVEYANCE BY DEED IN LIEU OF SUCH FORECLOSURE IS FULLY AND
FINALLY EFFECTIVE, AND POSSESSION OF THE MORTGAGED PROPERTY HAS BEEN GIVEN TO
THE PURCHASER OR GRANTEE.
ARTICLE VI
NEGATIVE COVENANTS
So long as any Obligation remains outstanding or unpaid or any
Commitment exists, the Borrower and Guarantors will not:
6.1 INDEBTEDNESS. Create, incur, assume, or suffer to exist any
Indebtedness, whether by way of loan or otherwise; provided, however, the
foregoing restriction shall not apply to (a) the Obligations, (b) unsecured
accounts payable incurred in the ordinary course of business, which are not
unpaid in excess of 60 days beyond invoice date or are being contested in good
faith and as to which such reserve as is required by GAAP has been made or (c)
Indebtedness permitted by the Indenture.
6.2 CONTINGENT OBLIGATIONS. Create, incur, assume, or suffer to
exist any Contingent Obligation; provided, however, the foregoing restriction
shall not apply to (a) performance guarantees and performance surety or other
bonds provided in the ordinary course of business, (b) trade credit incurred or
operating leases entered into in the ordinary course of business, or (c) any
Contingent Obligation permitted by the Indenture.
6.3 LIENS. Create, incur, assume, or suffer to exist any Lien on any
of its Properties, whether now owned or hereafter acquired; provided, however,
the foregoing restrictions shall not apply to (a) Permitted Liens, or (b) Liens
permitted by the Indenture.
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6.4 SALES OF ASSETS. Without the prior written consent of the
Lender, sell, transfer, or otherwise dispose of, in one or any series of
transactions, assets, whether now owned or hereafter acquired, or enter into any
agreement to do so, provided, however, the foregoing shall not apply to sales,
transfers or dispositions permitted by the Indenture.
6.5 LOANS OR ADVANCES. Make or agree to make or allow to remain
outstanding any loans or advances to any Person; provided, however, the
foregoing restrictions shall not apply to (a) advances or extensions of credit
in the form of accounts receivable incurred in the ordinary course of business
and upon terms common in the industry for such accounts receivable, (b) advances
to employees of the Borrower for the payment of expenses in the ordinary course
of business, or (c) loans or advances permitted by the Indenture.
6.6 INVESTMENTS. Acquire Investments in, or purchase or otherwise
acquire all or substantially all of the assets of, any Person; provided,
however, the foregoing restriction shall not apply to any purchase or
acquisition permitted by the Indenture, or the purchase or acquisition of (a)
Investments in the form of (i) debt securities issued or directly and fully
guaranteed or insured by the United States Government or any agency or
instrumentality thereof, with maturities of no more than one year, (ii)
commercial paper of a domestic issuer rated at the date of acquisition at least
P-2 by Xxxxx'x Investor Service, Inc. or A-2 by Standard & Poor's Corporation
and with maturities of no more than one year from the date of acquisition, or
(iii) repurchase agreements covering debt securities or commercial paper of the
type permitted in this Section, certificates of deposit, demand deposits,
eurodollar time deposits, overnight bank deposits and bankers' acceptances, with
maturities of no more than one year from the date of acquisition, issued by or
acquired from or through the Lender or any bank or trust company organized under
the laws of the United States or any state thereof and having capital surplus
and undivided profits aggregating at least $100,000,000, (b) other short-term
Investments similar in nature and degree of risk to those described in clause
(c) of this Section, or (d) money-market funds.
6.7 DIVIDENDS AND DISTRIBUTIONS. Declare, pay, or make, whether in
cash or Property of the Borrower, any dividend or distribution on, or purchase,
redeem, or otherwise acquire for value, any share of any class of its capital
stock; declare, pay, or make any distributions or return any capital to any of
its partners, whether in cash or other Property, other than distributions
permitted by the Indenture.
6.8 ISSUANCE OF STOCK; CHANGES IN CORPORATE OR PARTNERSHIP
STRUCTURE. Except as otherwise permitted by the Indenture, issue or agree to
issue additional shares of capital stock, in one or any series of transactions;
enter into any transaction of consolidation, merger, or amalgamation; liquidate,
wind up, or dissolve (or suffer any liquidation or dissolution).
6.9 TRANSACTIONS WITH AFFILIATES. Except as among the Borrower and
the Guarantors, directly or indirectly, enter into any transaction (including
the sale, lease, or exchange of Property or the rendering of service) with any
of its Affiliates, other than upon fair and reasonable terms no less favorable
than could be obtained in an arm's length transaction with a Person which was
not an Affiliate and notwithstanding the foregoing, the Borrower and the
38
Guarantors may not, directly or indirectly, enter into any transaction
(including the sale, lease, or exchange of Property or the rendering of service)
with Market Hub Partners Finance, Inc.
6.10 LINES OF BUSINESS. Expand, on its own or through any
Subsidiary, into any line of business other than in a Related Business.
6.11 TANGIBLE NET WORTH. Permit Tangible Net Worth of Market Hub
Partners Storage, L.P. at the close of any fiscal quarter to be less than
$50,000,000.
6.12 CASH FLOW COVERAGE. Permit as of the close of any fiscal
quarter, the ratio of Cash Flow to Debt Service to be less than 1.40 to 1.00 for
Market Hub Partners Storage, L.P.
6.13 FUNDED DEBT TO TOTAL CAPITALIZATION. Permit as of the close of
any fiscal quarter, the ratio of total funded debt to Total Capitalization to be
more than sixty-five percent (65%) for Market Hub Partners Storage, L.P.
ARTICLE VII
EVENTS OF DEFAULT
7.1 ENUMERATION OF EVENTS OF DEFAULT. Any of the following events
shall constitute an Event of Default:
(a) default shall be made in the payment when due of any installment
of principal or interest under this Agreement or the Note or in the
payment when due of any fee or other sum payable under any Loan Document;
(b) default shall be made by the Borrower or the Guarantors in the
due observance or performance of any of their respective obligations under
the Loan Documents, and such default shall continue for 30 days after the
earlier of notice thereof to the Borrower by the Lender or knowledge
thereof by the Borrower, provided, however, that if with respect to a
Default under the Security Instruments, it is not reasonable to remedy
such Default within 30 days, but such Default is of a nature that can be
remedied, then such time shall be extended to a period of 60 days, if and
only if the Borrower or the Guarantors, as the case may be, promptly
commence the remedying of such Default and diligently continue such
process until the Default has been remedied;
(c) any representation or warranty made by the Borrower or the
Guarantors in any of the Loan Documents proves to have been untrue in any
Material respect;
(d) default shall be made by the Borrower or the Guarantors (as
principal or guarantor or other surety) in the payment or performance of
the Indenture or any bond, debenture, note, or other Indebtedness or under
any credit agreement,
39
loan agreement, indenture, promissory note, or similar agreement or
instrument executed in connection with any of the foregoing, provided that
the aggregate principal amount of the Indebtedness which is the subject of
such Default exceeds $2,500,000, and such default shall remain unremedied
for in excess of the period of grace, if any, with respect thereto;
(e) the entry of a decree or order by a court having jurisdiction in
the premises (a) for relief in respect of any Borrower or any Restricted
Subsidiary in an involuntary case or proceeding under the Federal
Bankruptcy Code or any other applicable federal or state bankruptcy,
insolvency, reorganization or other similar law, or (b) adjudging any
Borrower or any Restricted Subsidiary bankrupt or insolvent, or approving
a petition seeking reorganization, arrangement, adjustment or composition
of any Borrower or an Restricted Subsidiary under the Federal Bankruptcy
Code or any applicable federal or state law, or appointing under any such
law a custodian, receiver, liquidator, assignee, trustee, sequestrator or
other similar official of any Borrower or any Restricted Subsidiary or of
a substantial part of its consolidated assets, or ordering the winding up
or liquidation of its affairs, and the continuance of any such decree or
order for relief or any such other decree or order unstayed and in effect
for a period of 60 consecutive days;
(f) the commencement by any Borrower or any Restricted Subsidiary of
a voluntary case or proceeding under the Federal Bankruptcy Code or any
other applicable federal or state bankruptcy, insolvency, reorganization
or other similar law or any other case or proceeding to be adjudicated
bankrupt or insolvent, or the consent by any Borrower or any Restricted
Subsidiary to the entry of a decree or order for relief in respect thereof
in an involuntary case or proceeding under the Federal Bankruptcy Code or
any other applicable federal or state bankruptcy, insolvency,
reorganization or other similar law or to the commencement of any
bankruptcy or insolvency case or proceeding against it, or the filing by
any Borrower or any Restricted Subsidiary of a petition or consent seeking
reorganization or relief under any applicable federal or state law, or the
consent by it under any such law to the filing of any such petition or to
the appointment of or taking possession by a custodian, receiver,
liquidator, assignee, trustee or sequestrator (or other similar official)
of any Borrower or and Restricted Subsidiary or of any substantial part of
its consolidated assets, or the making by it of an assignment for the
benefit of creditors under any such law, or the admission by it in writing
of its inability to pay its debts generally as they become due or taking
of corporate action by any Borrower or any Restricted Subsidiary in
furtherance of any such action;
(g) the levy against $2,500,000 of the Property of the Borrower or
the Guarantors, or any execution, garnishment, attachment, sequestration,
or other writ or similar proceeding which is not permanently dismissed or
discharged within 30 days after the levy;
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(h) a final and non-appealable order, judgment, or decree shall be
entered against the Borrower or the Guarantors for money damages and/or
Indebtedness due in an amount in excess of $2,500,000, and such order,
judgment, or decree shall not be dismissed or stayed within 60 days;
(i) either the Borrower or the Guarantors shall have (i) concealed,
removed, or diverted, or permitted to be concealed, removed, or diverted,
any part of its Property, with intent to hinder, delay, or defraud its
creditors or any of them, (ii) made or suffered a transfer of any of its
Property which may be fraudulent under any bankruptcy, fraudulent
conveyance, or similar law, (iii) made any transfer of its Property to or
for the benefit of a creditor at a time when other creditors similarly
situated have not been paid, or (iv) shall have suffered or permitted,
while insolvent, any creditor to obtain a Lien upon any of its Property
through legal proceedings or distraint which is not vacated within 60 days
from the date thereof; or
(j) any Security Instrument shall for any reason not, or cease to,
create valid and perfected first-priority Liens against the Collateral
purportedly covered thereby (subject to Permitted Liens), except due to
the action or inaction of the Lender.
7.2 REMEDIES. (a) Upon the occurrence of an Event of Default
specified in Sections 7.1(e) or 7.1(f), immediately and without notice, (i) all
Obligations shall automatically become immediately due and payable, without
presentment, demand, protest, notice of protest, default, or dishonor, notice of
intent to accelerate maturity, notice of acceleration of maturity, or other
notice of any kind, except as may be provided to the contrary elsewhere herein,
all of which are hereby expressly waived by the Borrower; (ii) the Commitment
shall immediately cease and terminate unless and until reinstated by the Lender
in writing; and (iii) the Lender is hereby authorized at any time and from time
to time, without notice to the Borrower (any such notice being expressly waived
by the Borrower), to set-off and apply any and all deposits (general or special,
time or demand, provisional or final) held by the Lender and any and all other
indebtedness at any time owing by the Lender to or for the credit or account of
the Borrower against any and all of the Obligations although such Obligations
may be unmatured.
(b) Upon the occurrence of any Event of Default other than those
specified in Sections 7.1(e) or 7.1(f), (i) the Lender may, by notice to the
Borrower, declare all Obligations immediately due and payable, without
presentment, demand, protest, notice of protest, default, or dishonor, notice of
intent to accelerate maturity, notice of acceleration of maturity, or other
notice of any kind, except as may be provided to the contrary elsewhere herein,
all of which are hereby expressly waived by the Borrower; (ii) the Commitment
shall immediately cease and terminate unless and until reinstated by the Lender
in writing; and (iii) the Lender is hereby authorized at any time and from time
to time, without notice to the Borrower (any such notice being expressly waived
by the Borrower), to set-off and apply any and all deposits (general or special,
time or demand, provisional or final) held by the Lender and any and all other
41
indebtedness at any time owing by the Lender to or for the credit or account of
the Borrower against any and all of the Obligations although such Obligations
may be unmatured.
(c) Upon the occurrence of any Event of Default, the Lender may, in
addition to the foregoing in this Section, exercise any or all of its rights and
remedies provided by law or pursuant to the Loan Documents.
ARTICLE VIII
MISCELLANEOUS
8.1 TRANSFERS; PARTICIPATIONS. Upon the prior written consent of the
Borrower, the Lender may, at any time, sell, transfer, assign, or grant
participations in the Obligations or any portion thereof; and, subject to
Section 8.12, the Lender may forward to each Transferee and prospective
Transferee all documents and information relating to such Obligations, whether
furnished by the Borrower or otherwise obtained, as the Lender determines
necessary or desirable.
8.2 SURVIVAL OF REPRESENTATIONS, WARRANTIES, AND COVENANTS. All
representations and warranties of the Borrower and Guarantors and all covenants
and agreements herein made shall survive the execution and delivery of the Note
and the Security Instruments and shall remain in force and effect so long as any
Obligation is outstanding or any Commitment exists.
8.3 NOTICES AND OTHER COMMUNICATIONS. Except as to oral notices
expressly authorized herein, which oral notices shall be confirmed in writing,
all notices, requests, and communications hereunder shall be in writing
(including by telecopy). Unless otherwise expressly provided herein, any such
notice, request, demand, or other communication shall be deemed to have been
duly given or made when delivered by hand, or, in the case of delivery by mail,
when deposited in the mail, certified mail, return receipt requested, postage
prepaid, or, in the case of telecopy notice, when receipt thereof is
acknowledged orally or by written confirmation report, addressed as follows:
(a) if to the Lender, to:
Bank One, Texas, National Association 910 Travis, 0xx Xxxxx
Xxxxxxx, Xxxxx 00000-0000 Attention: Energy Group, 6th Floor
(or for notice by mail, to:
X.X. Xxx 0000
Xxxxxxx, Xxxxx 00000-0000
Attention: Energy Group, 6th Floor
Telecopy: (000) 000-0000
42
(b) if to the Borrower, to:
Market Hub Partners Storage, L.P.
00000 Xxxx Xxx Xxxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
Attention: Mr. Xxxx Xxxxx
Telecopy: (000) 000-0000
(c) if to the Guarantors:
Xxxx Bluff Hub Partners, X.X.
Xxxx Bluff Hub Partners, L.L.C.
Xxxx Hub Partners, X.X.
Xxxx Hub Partners, L.L.C.
00000 Xxxx Xxx Xxxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
Attention: Mr. Xxxx Xxxxx
Telecopy: (000) 000-0000
Any party may, by proper written notice hereunder to the others,
change the individuals or addresses to which such notices to it shall thereafter
be sent.
8.4 PARTIES IN INTEREST. Subject to applicable restrictions
contained herein, all covenants and agreements herein contained by or on behalf
of the Borrower or the Lender shall be binding upon and inure to the benefit of
the Borrower or the Lender, as the case may be, and their respective legal
representatives, successors, and assigns.
8.5 RIGHTS OF THIRD PARTIES. All provisions herein are imposed
solely and exclusively for the benefit of the Lender and the Borrower. No other
Person shall have any right, benefit, priority, or interest hereunder or as a
result hereof or have standing to require satisfaction of provisions hereof in
accordance with their terms, and any or all of such provisions may be freely
waived in whole or in part by the Lender at any time if in its sole discretion
it deems it advisable to do so.
8.6 RENEWALS; EXTENSIONS. All provisions of this Agreement relating
to the Note shall apply with equal force and effect to each promissory note
hereafter executed which in whole or in part represents a renewal or extension
of any part of the Indebtedness of the Borrower under this Agreement, the Note,
or any other Loan Document.
8.7 NO WAIVER; RIGHTS CUMULATIVE. No course of dealing on the part
of the Lender, its officers or employees, nor any failure or delay by the Lender
with respect to exercising any of its rights under any Loan Document shall
operate as a waiver thereof. The rights of the Lender under the Loan Documents
shall be cumulative and the exercise or partial exercise of any such right shall
not preclude the exercise of any other right. The making of any Loan shall not
constitute a waiver of any of the covenants, warranties, or conditions of the
43
Borrower contained herein. In the event the Borrower is unable to satisfy any
such covenant, warranty, or condition, the making of any Loan shall not have the
effect of precluding the Lender from thereafter declaring such inability to be
an Event of Default as hereinabove provided.
8.8 SURVIVAL UPON UNENFORCEABILITY. In the event any one or more of
the provisions contained in any of the Loan Documents or in any other instrument
referred to herein or executed in connection with the Obligations shall, for any
reason, be held to be invalid, illegal, or unenforceable in any respect, such
invalidity, illegality, or unenforceability shall not affect any other provision
of any Loan Document or of any other instrument referred to herein or executed
in connection with such Obligations.
8.9 AMENDMENTS; WAIVERS. Neither this Agreement nor any provision
hereof may be amended, waived, discharged, or terminated orally, but only by an
instrument in writing signed by the party against whom enforcement of the
amendment, waiver, discharge, or termination is sought.
8.10 CONTROLLING AGREEMENT. In the event of a conflict between the
provisions of this Agreement and those of any other Loan Document, the
provisions of this Agreement shall control.
8.11 DISPOSITION OF COLLATERAL. Notwithstanding any term or
provision, express or implied, in any of the Security Instruments, the
realization, liquidation, foreclosure, or any other disposition on or of any or
all of the Collateral shall be in the order and manner and determined in the
sole discretion of the Lender; provided, however, that in no event shall the
Lender violate applicable law or exercise rights and remedies other than those
provided in such Security Instruments or otherwise existing at law or in equity.
8.12 CONFIDENTIALITY. For purposes of this Section 8.12,
"CONFIDENTIAL INFORMATION" means information delivered to the Lender by or on
behalf of any Borrower or any Subsidiary or Affiliate in connection with the
transaction contemplated by or otherwise pursuant to this Agreement that is
proprietary in nature and that was clearly marked or labeled or otherwise
adequately identified when received by the Lender as being confidential
information of the Borrower or such Subsidiary, provided that such term does not
include information that (a) was publicly known or otherwise known to the Lender
prior to the time of such disclosure, (b) subsequently becomes publicly known
through no act or omission by the Lender or any Person acting on the Lender's
behalf, (c) otherwise becomes known to the Lender other than through disclosure
by the Borrower or any Subsidiary, or (d) constitutes financial statements
delivered to the Lender under Section 5.2 or Section 5.3 that are otherwise
publicly available. The Lender will maintain the confidentiality of such
Confidential Information in accordance with procedures adopted by the Lender in
good faith to protect confidential information of third parties delivered to the
Lender, provided that the Lender may deliver or disclose confidential
Information to (i) the Lender's directors, officers, employees, agents,
attorneys and affiliates (to the extent such disclosure reasonably relates to
the administration of the investment represented by the Lender's Notes), (ii)
the Lender's financial advisors and other professional advisors who agree for
the benefit of the Borrower to hold confidential the Confidential Information
substantially in
44
accordance with the terms of this Section 8.12, (iii) any other holder of any
Note, (iv) any Transferee to which the Lender sells or offers to sell such Note
or any part thereof or any participation therein (if such Person has agreed in
writing for the benefit of the Borrower prior to its receipt of such
confidential Information to be bound by the provisions of this Section 8.12),
(v) any federal or state regulatory authority having jurisdiction over the
Lender, or (vi) any other Person to which such delivery and disclosure to be
necessary or appropriate (A) to effect compliance with any law, rule, regulation
or order applicable to the Lender, (B) in response to any subpoena or other
legal process, (C) in connection with any litigation to which the Lender is a
party or (D) if an Event of Default has occurred and is continuing, to the
extent the Lender may reasonably determine such delivery and disclosure to be
necessary or appropriate in the enforcement or for the protection of the rights
and remedies under the Lender's Notes, the Security Instruments or this
Agreement. Each holder of a Note, by its acceptance of a Note, will be deemed to
have agreed to be bound by and to be entitled to the benefits of this Section
8.12 as though it were a party to this Agreement. On a reasonable request by the
Borrower in connection with the delivery to any holder of a Note of information
required to be delivered to such holder under this Agreement or requested by
such holder (other than a holder that is a party to this Agreement or its
nominee), such holder will enter into an agreement with the Borrower embodying
the provisions of this Section 8.12.
8.13 NO RECOURSE AGAINST OTHERS. A director, officer, employee,
stockholder, limited partner, member, incorporator or Affiliate as such, past,
present or future, of any Borrower or any Guarantor shall not have any personal
liability under the Note or any other Loan Document by reason of his or its
status as a director, officer, employee, stockholder, limited partner, member,
incorporator or Affiliate or any liability for any obligations of any Borrower
or any Guarantor under the Note or any other Loan Document or for any claim
based on, in respect of or by reason of such obligations or their creation.
Lender, by accepting the Note, waives and releases all such liability to the
extent permitted by applicable law.
8.14 GOVERNING LAW. THIS AGREEMENT, AND THE NOTE AND THE GUARANTIES
SHALL BE DEEMED TO BE CONTRACTS MADE UNDER AND SHALL BE CONSTRUED IN ACCORDANCE
WITH AND GOVERNED BY THE LAWS OF THE STATE OF TEXAS WITHOUT GIVING EFFECT TO
PRINCIPLES THEREOF RELATING TO CONFLICTS OF LAW; PROVIDED, HOWEVER, THAT CHAPTER
345 OF THE TEXAS FINANCE CODE (WHICH REGULATES CERTAIN REVOLVING CREDIT LOAN
ACCOUNTS AND REVOLVING TRIPARTY ACCOUNTS) SHALL NOT APPLY.
8.15 JURISDICTION AND VENUE. ALL ACTIONS OR PROCEEDINGS WITH RESPECT
TO, ARISING DIRECTLY OR INDIRECTLY IN CONNECTION WITH, OUT OF, RELATED TO, OR
FROM THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT MAY BE LITIGATED, AT THE SOLE
DISCRETION AND ELECTION OF THE LENDER, IN COURTS HAVING SITUS IN HOUSTON, XXXXXX
COUNTY, TEXAS. THE BORROWER, GUARANTORS AND THE LENDER HEREBY SUBMIT TO THE
JURISDICTION OF ANY LOCAL, STATE, OR FEDERAL COURT LOCATED IN HOUSTON, XXXXXX
COUNTY, TEXAS, AND HEREBY WAIVE ANY RIGHTS THEY
45
MAY HAVE TO TRANSFER OR CHANGE THE JURISDICTION OR VENUE OF ANY LITIGATION
BROUGHT AGAINST THEM IN ACCORDANCE WITH THIS SECTION.
8.16 WAIVER OF RIGHTS TO JURY TRIAL. THE BORROWER AND GUARANTORS AND
THE LENDER HEREBY KNOWINGLY, VOLUNTARILY, INTENTIONALLY, IRREVOCABLY, AND
UNCONDITIONALLY WAIVE ALL RIGHTS TO TRIAL BY JURY IN ANY ACTION, SUIT,
PROCEEDING, COUNTERCLAIM, OR OTHER LITIGATION THAT RELATES TO OR ARISES OUT OF
ANY OF THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR THE ACTS OR OMISSIONS OF THE
LENDER IN THE ENFORCEMENT OF ANY OF THE TERMS OR PROVISIONS OF THIS AGREEMENT OR
ANY OTHER LOAN DOCUMENT OR OTHERWISE WITH RESPECT THERETO. THE PROVISIONS OF
THIS SECTION ARE A MATERIAL INDUCEMENT FOR THE LENDER ENTERING INTO THIS
AGREEMENT.
8.17 ENTIRE AGREEMENT. THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS
CONSTITUTE THE ENTIRE AGREEMENT BETWEEN THE PARTIES HERETO WITH RESPECT TO THE
SUBJECT HEREOF AND SHALL SUPERSEDE ANY PRIOR AGREEMENT BETWEEN THE PARTIES
HERETO, WHETHER WRITTEN OR ORAL, RELATING TO THE SUBJECT HEREOF, INCLUDING,
WITHOUT LIMITATION, THE CORRESPONDENCE DATED FEBRUARY 5, 1998, FROM THE LENDER
TO THE BORROWER AND THE TERM SHEET ENCLOSED THEREWITH. FURTHERMORE, IN THIS
REGARD, THIS AGREEMENT AND THE OTHER WRITTEN LOAN DOCUMENTS REPRESENT,
COLLECTIVELY, THE FINAL AGREEMENT AMONG THE PARTIES THERETO AND MAY NOT BE
CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL
AGREEMENTS OF SUCH PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS AMONG SUCH
PARTIES.
8.18 COUNTERPARTS. For the convenience of the parties, this
Agreement may be executed in multiple counterparts, each of which for all
purposes shall be deemed to be an original, and all such counterparts shall
together constitute but one and the same Agreement.
IN WITNESS WHEREOF, this Agreement is deemed executed effective as
of the date first above written.
BORROWER:
MARKET HUB PARTNERS STORAGE, L.P.
By: Market Hub Partners Storage, L.L.C.,
its general partner
By:
Xxxxxxx X. Xxxxx
Vice President and Chief Financial
Officer
46
GUARANTORS:
XXXX BLUFF HUB PARTNERS, L.P.
By: Xxxx Bluff Hub Partners, L.L.C.,
its general partner
By:
Xxxxxxx X. Xxxxx
Vice President and Chief Financial
Officer
XXXX HUB PARTNERS, L.P.
By: Xxxx Hub Partners, L.L.C.,
its general partner
By:
Xxxxxxx X. Xxxxx
Vice President and Chief Financial
Officer
XXXX BLUFF HUB PARTNERS, L.L.C.
By:
Xxxxxxx X. Xxxxx
Vice President and Chief Financial
Officer
XXXX HUB PARTNERS, L.L.C.
By:
Xxxxxxx X. Xxxxx
Vice President and Chief Financial
Officer
LENDER:
BANK ONE, TEXAS, NATIONAL
ASSOCIATION
47
By:
Xxxxxxxx X. Xxxxxxx
Vice President
48
EXHIBIT I
FORM OF NOTE
PROMISSORY NOTE
$50,000,000 Houston, Texas April 15, 1998
FOR VALUE RECEIVED and WITHOUT GRACE, the undersigned ("MAKER")
promises to pay to the order of BANK ONE, TEXAS, NATIONAL ASSOCIATION ("PAYEE"),
at its banking quarters in Houston, Xxxxxx County, Texas, the sum of FIFTY
MILLION DOLLARS ($50,000,000), (or the unpaid balance of all principal advanced
against this Note, if that amount is less) pursuant to the Credit Agreement
dated of even date herewith by and between Maker and Payee (as amended,
restated, or supplemented from time to time, the "CREDIT AGREEMENT"), together
with interest at the rates and calculated as provided in the Credit Agreement.
The unpaid principal balance of the Note at any time shall be the total of all
principal lent or advanced against this Note less the sum of all principal
payments and permitted prepayments on this Note by or for the account of the
Maker.
Reference is hereby made to the Credit Agreement for matters
governed thereby, including, without limitation, certain events which will
entitle the holder hereof to accelerate the maturity of all amounts due
hereunder. Capitalized terms used but not defined in this Note shall have the
meanings assigned to such terms in the Credit Agreement.
This Note is issued pursuant to, is the "Note" under, and is payable
as provided in the Credit Agreement. Subject to compliance with applicable
provisions of the Credit Agreement, Maker may at any time pay the full amount or
any part of this Note without the payment of any premium or fee, but such
payment shall not, until this Note is fully paid and satisfied, excuse the
payment as it becomes due of any payment on this Note provided for in the Credit
Agreement.
The principal of this Note shall be due and payable on the date of
Final Maturity. Accrued and unpaid interest shall be due and payable as provided
in the Credit Agreement and at maturity of this Note.
Without being limited thereto or thereby, this Note is secured by
the Security Instruments.
THIS NOTE SHALL BE GOVERNED AND CONTROLLED BY THE LAWS OF THE STATE
OF TEXAS WITHOUT GIVING EFFECT TO PRINCIPLES THEREOF RELATING TO CONFLICTS OF
LAW; PROVIDED, HOWEVER, THAT CHAPTER 345 OF THE TEXAS FINANCE CODE (WHICH
REGULATES CERTAIN REVOLVING CREDIT
I-i
LOAN ACCOUNTS AND REVOLVING TRIPARTY ACCOUNTS) SHALL NOT APPLY TO
THIS NOTE.
MARKET HUB PARTNERS STORAGE, L.P.
By: Market Hub Partners Storage, L.L.C.,
its general partner
By:___________________________________
Printed Name:_________________________
Title:________________________________
I-ii
EXHIBIT II
FORM OF BORROWING REQUEST
Bank One, Texas, National Association
000 Xxxxxx
Xxxxxxx, Xxxxx 00000-0000
Attention: Energy Group, 6th Floor
Re: Credit Agreement dated as of April 15, 1998, by and between Bank
One, Texas, National Association and Market Hub Partners Storage,
L.P. (as amended, restated, or supplemented from time to time, the
"CREDIT AGREEMENT")
Ladies and Gentlemen:
Pursuant to the Credit Agreement, the Borrower hereby makes the
request indicated below:
1. Loans
(a) Amount of new Loan: $
(b) Requested funding date: , 19
(c) $ of such Loan is to be a Floating Rate Loan;
----------------
$________________ of such Loan is to be a LIBO Rate Loan.
(d) Requested Interest Period for LIBO Rate Loan: ____ months.
2. Continuation or conversion of LIBO Rate Loan maturing on :
(a) Amount to be continued as a LIBO Rate Loan is $ ___________________
, with an Interest
Period of _____ months;
(b) Amount to be converted to a Floating Rate Loan is $_______________;
and
3. Conversion of Floating Rate Loan:
(a) Requested conversion date: ________, 19___.
(b) Amount to be converted to a LIBO Rate Loan is $ , with an Interest
Period of _____ months.
II-i
The undersigned certifies that he/she is the of the Borrower, has
obtained all consents necessary, and as such he/she is authorized to execute
this request on behalf of the Borrower. The undersigned further certifies,
represents, and warrants on behalf of the Borrower that the Borrower is entitled
to receive the requested borrowing, continuation, or conversion under the terms
and conditions of the Credit Agreement.
Each capitalized term used but not defined herein shall have the
meaning assigned to such term in the Credit Agreement.
Very truly yours,
MARKET HUB PARTNERS STORAGE, L.P.
By: Market Hub Partners Storage, L.L.C.,
its general partner
By:___________________________________
Printed Name:_________________________
Title:________________________________
II-ii
EXHIBIT III
FORM OF COMPLIANCE CERTIFICATE
, 19
Bank One, Texas, National Association
000 Xxxxxx
Xxxxxxx, Xxxxx 00000-0000
Attention: Energy Group, 6th Floor
Re: Credit Agreement dated as of April 15, 1998, by and between Bank
One, Texas, National Association and Market Hub Partners Storage,
L.P. (as amended, restated, or supplemented from time to time, the
"CREDIT AGREEMENT")
Ladies and Gentlemen:
Pursuant to applicable requirements of the Credit Agreement, the
undersigned, as a Responsible Officer of the Borrower, hereby certifies to you
the following information as true and correct as of the date hereof or for the
period indicated, as the case may be:
1. To the best of the knowledge of the undersigned, no Default or Event of
Default exists as of the date hereof or has occurred since the date of our
previous certification to you, if any.
1. To the best of the knowledge of the undersigned, the following Defaults
or Events of Default exist as of the date hereof or have occurred since
the date of our previous certification to you, if any, and the actions set
forth below are being taken to remedy such circumstances:
2. The compliance of the Borrower with the financial covenants of the
Credit Agreement, as of the close of business on , is evidenced by the
following:
(a) Section 6.12: TANGIBLE NET WORTH. Permit Tangible Net Worth of
Market Hub Partners Storage, L.P. at the close of any fiscal quarter
to be less than $50,000,000.
REQUIRED ACTUAL
(b) Section 6.13: CASH FLOW COVERAGE. Permit as of the close of any
fiscal quarter, the ratio of Cash Flow to Debt Service to be less
than 1.40 to 1.00 for Market Hub Partners Storage, L.P.
III-i
REQUIRED ACTUAL
(c) Section 6.14: FUNDED DEBT TO TOTAL COMPENSATION. Permit as of the
close of any fiscal quarter, the ratio of total funded debt to total
capitalization to be more than sixty percent (60%) for Market Hub
Partners Storage, L.P.
REQUIRED ACTUAL
3. No Material Adverse Effect has occurred since the date of the Financial
Statements dated as of .
Each capitalized term used but not defined herein shall have the
meaning assigned to such term in the Credit Agreement.
Very truly yours,
MARKET HUB PARTNERS STORAGE, L.P.
By: Market Hub Partners Storage, L.L.C.,
its general partner
By:___________________________________
Printed Name:_________________________
Title:________________________________
III-ii
EXHIBIT IV
FORM OF OPINION OF COUNSEL
Closing Date
Bank One, Texas, National Association
000 Xxxxxx
Xxxxxxx, Xxxxx 00000-0000
Attention: Energy Group, 6th Floor
Ladies and Gentlemen:
This opinion is being delivered to you pursuant to Section 3.1(1) of
the Credit Agreement (as such term is hereinafter defined). We have acted as
counsel to Market Hub Partners Storage L.P., a Delaware limited liability
company, (the "BORROWER") and Xxxx Bluff Hub Partners, L.P., a Delaware limited
partnership ("MBHP"), Xxxx Bluff Hub Partners, L.L.C., a Delaware limited
liability company, Xxxx Hub Partners, L.P., a Delaware limited partnership and
Xxxx Hub Partners, L.L.C., a Delaware limited liability company (collectively,
the "GUARANTORS", and together with the Borrower, the "LOAN PARTIES") in
connection with the Credit Agreement of even date (the "CREDIT AGREEMENT"),
among the Borrower and Bank One, Texas, National Association (the "LENDER").
Each capitalized term used herein and not otherwise defined herein or in any
exhibit hereto shall have the meaning assigned to such term in the Credit
Agreement. As used herein, the term "TRANSACTIONS" shall refer to the
transactions contemplated by the documents listed on EXHIBIT A hereto (the
"DOCUMENTS") by the parties thereto in accordance with the terms thereof.
In rendering the opinions expressed below, we have examined executed
counterparts (or copies thereof) of each of the Documents, the originals or
conformed copies of such partnership records, agreements and instruments of the
Loan Parties, certificates of public officials and officers of the Issuers and
such other documents and records as to factual matters, and such matters of law,
as we have deemed necessary as a basis for the opinions hereinafter expressed.
Based upon the foregoing and subject to the limitations,
qualifications, assumptions and exceptions set forth herein, we are of the
opinion that:
1. ORGANIZATION, ETC. Each of the Loan Parties has been duly
organized, is validly existing as a limited partnership or limited liability
company in good standing under the laws of its respective jurisdiction of
organization and has all requisite power and authority under its constituent
documents and applicable partnership or limited liability company laws to enter
into and perform the Documents to which it is a party.
IV-i
The Borrower, Xxxx Bluff Hub Partners, L.P. and Xxxx Bluff Hub
Partners, L.L.C. are each duly qualified and in good standing as a foreign
entity authorized to do business in the State of Texas. The Borrower, Xxxx Hub
Partners, L.P. and Xxxx Hub Partners, L.L.C. are each duly qualified and in good
standing as a foreign entity authorized to do business in the State of
Louisiana.
2. AUTHORIZATION. Each of the Loan Parties has taken all necessary
action to authorize the execution, delivery and performance of the Documents to
which it is a party. The Documents to which they are a party have been duly
executed and delivered by the Loan Parties.
3. ENFORCEABILITY. The Documents (other than the Act of Mortgage)
constitute the legal, valid and binding obligations of each Loan Party which is
party thereto, enforceable against such Loan Party in accordance with their
terms.
4. COMPLIANCE WITH LAWS, OTHER INSTRUMENTS, ETC. The execution and
delivery by the Loan Parties of the Documents to which each is a party do not
(a) violate any provision of the partnership agreement, limited liability
company agreement, charter or bylaws, as the case may be, of any Loan Party, (b)
violate any Applicable Law, (c) conflict with or result in the breach of or
constitute a default under any Document or, to our actual knowledge, any
indenture, bond, mortgage, deed of trust or loan or credit agreement or any
other similar agreement of which we have actual knowledge to which any Loan
Party is a party, or (d) to our actual knowledge, result in, or require, the
creation or imposition of any Lien (other than the security interests and liens
created by the Security Instruments executed by the Loan Parties) with respect
to any of the properties now owned by any Loan Party.
5. GOVERNMENTAL CONSENTS. No notice, consent, approval or
authorization of, or declaration or filing with, any federal or Texas
governmental authority is required on the part of any Loan Party for the valid
execution, delivery and performance of the Documents by any Loan Party which is
a party thereto except (a) those recordations and filings with respect to the
Deed of Trust and the related Financing Statements as are set forth in
Paragraphs 8 and 9 below, (b) such consents, approvals, authorizations,
declarations or filings as have been obtained, and (c) as are excepted in
Exception A below.
6. REGULATIONS G, T, U AND X. The execution and delivery of the Note
under the circumstances contemplated by the Credit Agreement do not violate
Regulation G, T, U or X of the Board of Governors of the Federal Reserve System.
7. INVESTMENT COMPANY ACT; PUHCA. Neither Borrower is an "investment
company", or a company "controlled" by an "investment company", under the
Investment Company Act of 1940, as amended. Neither Borrower is a "holding
company," or a "subsidiary company" of a "holding company," or an "affiliate" of
a "holding company" or of a "subsidiary company" of a "holding company," or a
"public utility" within the meaning of the Public Utility Holding Company Act of
1935, as amended.
IV-ii
8. DEED OF TRUST.
(a) The Deed of Trust, the acknowledgments thereto, and the Texas
Financing Statement comply with the laws of the State of Texas including all
applicable recording, filing and registration laws and regulations and are
adequate and legally sufficient to provide the security intended thereby. The
property descriptions of the real property contained in the Deed of Trust, if
accurate, are legally sufficient descriptions of such properties for the
purposes of creating and maintaining the liens therein purported to be created
by the Deed of Trust and for the purposes of all applicable recording, filing
and registration laws of the State of Texas. The Texas Financing Statement is in
proper form for filing with the office of the Secretary of State of the State of
Texas. The Deed of Trust (including, without limitation, the descriptions of the
Mortgaged Property set forth therein and in the exhibits thereto) creates (i) a
deed of trust lien upon the interests of MBHP in the Mortgaged Property referred
to therein (including after acquired property) constituting real property
located in the State of Texas (such interests are referred to collectively as
the "SUBJECT REAL PROPERTY"), and (ii) a security interest in the interests of
MBHP in such Mortgaged Property (including after acquired property) constituting
"fixtures" within the meaning of Article 9 of the Uniform Commercial Code as in
effect on the date hereof in the State of Texas (the "TEXAS UCC") located in the
State of Texas (the "SUBJECT INTERESTS").
(b) The Deed of Trust creates in favor of the Lender a valid
security interest in the Personal Property (as such term is described therein)
constituting inventory and equipment located in the State of Texas (other than
equipment which is mobile goods), general intangibles and accounts (as such
terms are defined in the Texas UCC). Upon the proper filing of the Texas
Financing Statement with the Office of the Secretary of State of the State of
Texas, the Lender will have a perfected security interest (within the meaning of
Chapter 9 of the Texas UCC) on all right, title and interest of MBHP in such
Personal Property for which filing with the Office of the Secretary of State of
the State of Texas may effect perfection (the "TEXAS UCC COLLATERAL").
9. RECORDATION. The recordation of the Deed of Trust in the office
of the County Clerk of Liberty and Xxxxxxxx Counties, Texas, and the filing of
the Texas Financing Statement in the Office of the Secretary of State of the
State of Texas are the only recordation, registrations and filings required by
the laws of the State of Texas to perfect the liens and security interests
intended to be created by the Deed of Trust in the Subject Real Property and the
Subject Interests and Texas UCC Collateral.
The opinions set forth above are subject to the following
limitations, qualifications, assumptions and exceptions:
A. This opinion is limited in all respects to matters of the laws of the
State of Texas, the General Corporation Law, Limited Liability Company Act
and Revised Uniform Limited Partnership Act of the State of Delaware, and
the applicable federal laws of the United States, each as in effect on the
date hereof ("Applicable Law"); PROVIDED, HOWEVER, we express no opinion
as to the application or effect of regulations or orders by state agencies
regulating the ownership or operation of the storage facilities, the
Federal Energy Regulatory Commission or the Railroad Commission of Texas,
or with respect to compliance with, or any
IV-iii
governmental filing, approval, authorization, license or consent required
by, (i) any securities law, (ii) any Environmental Law (as defined in the
Credit Agreement), (iii) any state or federal antitrust law or (iv) any
law or regulation relating to ownership or operation of, or financial,
reporting or other legal requirements imposed on, Persons engaged in
ownership or operation of gas pipelines or gas storage facilities by
reason of such status, activities or operations.
B. As to each Person party to a Document other than the Loan Parties, we have
assumed: (a) each is duly organized, validly existing and in good standing
under the jurisdiction of its formation and has all requisite power and
authority to enter into the transactions contemplated by the Documents to
which it is a party and to execute and deliver all Documents to which it
is a party and perform its obligations thereunder, (b) all Documents to
which it is a party have been have been duly authorized, executed and
delivered by such Person, and (c) that all obligations of said Persons
under the Documents to which they are a party constitute the legal, valid
and binding obligations of such Persons enforceable against such Persons
in accordance with their respective terms.
C. Our opinion set forth in Paragraph 1 above as to the existence and good
standing of the Loan Parties is based solely on our examination of
certificates of public officials of the State of Delaware, and the State
of Texas, copies of which have been delivered to you as of the date
hereof.
D. Our opinions set forth in Paragraphs 3 and 8 above are subject to the
effect of (i) applicable bankruptcy, insolvency, reorganization,
rearrangement, fraudulent transfer or conveyance, moratorium,
conservatorship and similar laws affecting creditors' rights generally;
(ii) general principles of equity (whether considered in a proceeding in
equity or at law), including, without limitation, concepts of materiality
and commercial reasonableness; and (iii) any implied covenant of good
faith or fair dealing. We also call to your attention that the
enforceability of certain of the remedial, waiver and other provisions of
the Documents may be limited by applicable laws but such laws do not
(subject to the other qualifications and limitations set forth herein)
adversely affect the validity of the Documents or prevent the practical
realization of the benefits of the security provided for in such
Documents, except for the economic consequences of any procedural delay or
excess costs of proceedings that may result from such laws.
E. We have assumed that each Person granting a security interest has
sufficient right in the Collateral for a security interest to attach.
F. We express no opinion as to:
(1) any Person's title to, or the value or existence of, or the
accuracy or completeness of any description of, or the location or
characterization of, any property or the Storage Facilities;
IV-iv
(2) the priority or rank of any security interests and Liens created
by, or purported to be created by, the Documents; and
(3) except as set forth in Paragraphs 8 and 9 above, the creation or
perfection of any security interests and Liens created by, or purported to
be created by, the Documents under any applicable law.
Without limiting the generality of the foregoing, we express no opinion as to
title to any gas or other minerals; however, we understand that with respect to
any gas constituting Inventory (as defined in the Deed of Trust), such gas has
been and will be extracted by being produced by a third party and subsequently
reduced to possession by MBHP and injected into and stored in the Xxxx Bluff
Facility by MBHP.
G. We express no opinion with respect to any lien or security interest
created under the Security Instruments that purports to secure any present
or future obligations or liabilities of the Borrower (other than the
obligations and liabilities of the Borrower arising under the Documents)
that are determined, in the case of obligations or liabilities of any
Borrower to the Lender created in the future, not to constitute "future
advances" within the meaning of Section 9.204 of the Texas UCC, or are
determined not to have been within the contemplation of the Borrower and
the Lender at a time the Documents were executed, or are determined not to
be of the same character or class as the obligations and liabilities of
the Borrower to the Lender created or arising under the Documents.
H. We have made no examination and express no opinion with respect to the
physical condition of the Mortgaged Property (as defined in the Deed of
Trust) and do not purport to opine as to the compliance of the Mortgaged
Property with any building code or ordinance or any other law,
regulations, restriction or ordinance that is dependent or contingent upon
the physical or structural existence or condition of all or any part of
the Mortgaged Property.
I. We express no opinion as to the validity or enforceability of any of the
following provisions: (i) provisions purporting to grant self-help
remedies to the extent limited by generally applicable rules of law that
limit the rights of creditors to use force or cause a breach of the peace
in enforcing rights or relate to the sale or disposition of collateral or
the requirements of a commercially reasonable sale; (ii) relate to waivers
of rights or purport to preclude any party from asserting claims or
defenses or from obtaining certain rights or remedies (provided we do not
except from our opinion the enforceability of the waivers of notice of
intent to accelerate or notice of acceleration contained in the Note and
Credit Agreement, assuming that the Lender and the Trustee do not unduly
delay taking action to accelerate following any Event of Default that
would permit such acceleration); (iii) provisions relating to subrogation
rights, delay or omission of enforcement of rights or remedies, provisions
related to severability to the extent limited by generally applicable
rules of law that may, where less than all of the contract may be
unenforceable, limit the enforceability of the balance of the contract to
circumstances in which the unenforceable portion is not an essential part
of the agreed exchange, waivers or ratification of future acts, provisions
that purport to release, exculpate from or indemnify the parties thereto
against their own
IV-v
negligence or willful misconduct, consent judgments, marshaling of assets,
or sales in inverse order of alienation; (iv) provisions purporting to
preserve and maintain a Person's liability despite the fact the debt is
unenforceable due to its illegality; (v) provisions purporting to apply
the Uniform Commercial Code whether or not it applies; (vi) provisions
purporting to revive Documents after their termination or expiration;
(vii) provisions relating to set-offs or offsets; (viii) provisions
purporting to provide standards of care of Collateral other than as
provided in Section 9.207 of the Texas UCC; (ix) provisions purporting to
authorize conclusive or presumptive determinations; (x) provisions
purporting to establish any evidentiary standard or to waive any defense
to the performance of a contract obligation that cannot, as matter of law,
be effectively waived; (xi) provisions purporting to waive any notice that
cannot, as a matter of law, be waived; (xii) provisions that purport to
obligate parties to reach agreements in the future and (xiii) certain
other rights, remedies and waivers of rights provided for in the Documents
that may be unenforceable or unavailable in whole or in part, or may be of
limited efficacy, under the laws of the State of Texas; but the inclusion
of such provisions will not adversely affect the validity of the
Documents, and the unenforceability, unavailability or limited efficacy of
such provisions will not prevent the practical realization by the Lender
and the Trustee of the principal rights and benefits or security intended
to be afforded thereby, except for the economic consequences of any
procedural delay which may result from the application of such provisions.
J. We have not made any investigation of the location of any real property or
interest in real property, or the accuracy of the property descriptions or
recording references contained in the Deed of Trust, and express no
opinion with respect to such matters.
K. We express no opinion on the enforceability of the assignments of rents,
incomes, revenues, profits and leases contained in the Documents at any
time prior to the time when the Trustee or the Lender has obtained lawful
possession of the Collateral, or the Trustee or the Lender has taken some
action judicially deemed to be the equivalent thereof.
L. The validity, perfection and priority of the liens and security interests
in the Collateral and Mortgaged Property are subject to the following
further qualifications:
(1) we express no opinion as to the perfection of a security
interest or lien on goods which are installed in or affixed to, or become
a part of a product or mass with goods which are not items of the
Mortgaged Property as set forth in Section 9.314 and 9.315 of the Texas
UCC;
(2) recordings or filings may be necessary, to maintain perfection
within four years of the maturity of the indebtedness secured by the Deed
of Trust, if the indebtedness is extended; and rerecordings or refilings
may be necessary to maintain perfection if the Deed of Trust shall be
hereafter amended or modified at the time of such amendment or
modification;
(3) in the case of property that becomes Mortgaged Property after
the date hereof, section 552 of the Federal Bankruptcy Code limits the
extent to which property acquired by
IV-vi
a debtor after the commencement of a case under the Federal Bankruptcy
Code may be subject to a security interest arising from a security
agreement entered into by the debtor before the commencement of such case;
(4) we express no opinion with respect to the perfection of a
security interest in any collateral which is subject to a state statute or
a statute or treaty of the United States which provides for a certificate
of title or national or international registration;
(5) where perfection of the Lender's security interest in the Texas
UCC Collateral is obtained by filing the Texas Financing Statement
relating thereto in the State of Texas, changes in the name, identity or
corporate structure (including, without limitation, changes through a
merger or consolidation) of a Borrower may result in the lapse of
perfection of the security interest in such collateral acquired by such
Borrower more than four (4) months after such change, unless a new,
appropriate financing statement is properly filed in the appropriate place
within four (4) months after each such change;
(6) we express no opinion with respect to the perfection of security
interests in any collateral to the extent that Section 9.103 of the Texas
UCC provides that perfection and the effect of perfection or nonperfection
of a security interest in such collateral is governed by the laws of a
jurisdiction outside of the State of Texas;
(7) removal of the Texas UCC Collateral (other than accounts and
general intangibles) from the State of Texas may result in the lapse of
the Lender's security interest in the Texas UCC Collateral;
(8) our opinion with respect to the perfection of the Lender's
security interest in any Texas UCC Collateral (other than accounts and
general intangibles) does not relate to any of such collateral now or
hereafter located in any jurisdiction other than the State of Texas;
(9) we have assumed that there are no agreements between the Lender,
the Trustee, and any third party varying rights established by the Texas
UCC or altering the priority or perfection, or both, of any security
interest;
(10) we have further assumed that no part of the accounts included
in the Texas UCC Collateral is an account received or receivable from any
government or any agency, authority or political subdivision thereof;
(11) we express no opinion with respect to the priority of the
Lender's lien in any Texas UCC Collateral;
In connection with the foregoing qualifications, you are advised
that the Texas UCC presently requires the periodic filing of continuation
statements with the Secretary of State of the State of Texas and the appropriate
county clerk's office not more than six (6) months prior to and not later than
the expiration of the five year period from the date of filing of the UCC-1
financing
IV-vii
statements and the expiration of each subsequent five year period after the
original filing, in order to maintain the perfection and priority of security
interests and to keep the financing statements in effect.
M. All statements in this opinion which are limited to our actual knowledge
are based solely upon (i) discussion with responsible officers of the Loan
Parties, (ii) facts that are set forth in the Documents and (iii) our
actual knowledge obtained during the course of our representation of the
Loan Parties by those attorneys who have performed services for them in
connection with the transactions contemplated by the Documents.
N. Except as set forth in Paragraphs 8 and 9 as to the Subject Real Property
and the Subject Interests, we express no opinion as to the creation or
perfection of any Lien as it relates to any property granted as Collateral
to the extent that the creation or perfection of such Lien in such
Collateral is not governed by Chapter 9 of the Texas UCC.
O. We have assumed, without independent investigation, that the filing and
recording of the Financing Statements will be performed correctly by the
filing and recording officer in the jurisdictions and offices described in
Paragraph 9.
P. You should be aware that, pursuant to the provisions of Sections 9.307,
9.308 and 9.309 of the Texas UCC, qualifying purchasers of equipment,
inventory, chattel paper, instruments, negotiable documents of title and
securities take title free and clear of a security interest perfected by
filing.
Q. Any opinion as to proceeds herein is qualified by Section 9.306 of the
Texas UCC.
R. In the event foreclosure proceedings are instituted to enforce the
Documents, we advise you that Sections 51.003, 51.004 and 51.005 of the
Texas Property Code provide that enforcement of any deficiency judgment
against a borrower or enforcement of a claim against a guarantor following
a foreclosure sale must be brought within two (2) years of the sale and
may be limited to the difference between the outstanding balance of the
debt and the fair market value of the collateral sold or credited against
the debt as of the date of such foreclosure. The enforcement of
obligations under the Documents may be limited by such provisions of the
Texas Property Code if foreclosure proceedings are instituted to enforce
the Documents.
S. We express no opinion as to any financial matters relating to the Loan
Parties or the financial conditions of the Loan Parties.
T. We express no opinion as to whether the Transactions comply with any
statutory, regulatory or other laws which prescribe permissible and lawful
investments applicable to the Lender or comply with any other statutes,
laws, rules or regulations which prescribe permissible and lawful
investments for the Lender (either as to type, amount, percentage of total
investment or otherwise).
IV-viii
U. We express no opinion with respect to the enforceability of the Security
Instruments by the Trustee or the Lender, if any such Person shall fail to
comply with any state or federal law (including court decisions), rule, or
regulation applicable to the Transactions (or applicable to the
qualification or filing requirements of such Person under the laws of the
State of Texas generally) because of the nature of such Person's business.
V. We have assumed that (a) each document submitted to us for review is
accurate and complete, each such document that is an original is
authentic, each such document that is a copy conforms to an authentic
original, and all signatures other than those of any of the Issuers on
each such document are genuine, (b) each certificate from governmental
officials reviewed by us is accurate, complete and authentic and all
official public records are accurate and complete, (c) there has not been
any mutual mistake of fact or misunderstanding, fraud, duress or undue
influence, (d) the conduct of the parties has complied with any
requirement of good faith, fair dealing and conscionability, (e) there are
no agreements or understandings among the parties, written or oral, and
there is no usage of trade or course of prior dealing among the parties
that would, in either case, define, supplement or qualify the terms of any
of the agreements or documentation on which we have opined, (f) all
parties to the agreement and documents on which we have opined will act in
accordance with, and will refrain from taking any action that is forbidden
by, the terms and conditions of such agreements and documents and (g) no
party to the agreements and documents on which we have opined will in the
future take any discretionary action (including a decision not to act)
permitted under such agreements and documents that would result in a
violation of law or constitute a breach or default under any other
agreement to which such party is a party or by which it or its property is
bound or under any court or administrative order, writ, judgment, or
decree that names such party or is directed to it or its property.
W. We express no opinion as to whether the anti-fraud provisions of
applicable federal and state securities laws have been complied with in
connection with the offer, issue, sale and delivery of the Note.
This opinion is limited to matters stated herein and no opinion is
implied or may be inferred beyond the matters expressly stated. We disclaim any
obligation to up-date this opinion or to advise you of any changes in any of the
opinions or other matters set forth herein.
This opinion is being furnished only to you in connection with the
Credit Agreement and is solely for your benefit. This opinion may not be used,
circulated, quoted, relied upon or otherwise referred to by any other Person or
for any other purpose without our prior written consent.
Very truly yours,
IV-ix
EXHIBIT A
SCHEDULE OF DOCUMENTS
1. Credit Agreement between the Lender and the Borrower dated ___________,
1998. Note executed by the Borrower in favor of Lender dated
________________, 1998.
2. Guaranty executed by the Guarantors dated ______________________, 1998.
3. Mortgage, Deed of Trust, Assignment, Security Agreement and Financing
Statement between MBHP and the Collateral Agent dated ___________________,
1998.
4. Act of Mortgage, Assignment, Security Agreement and Financing Statement
between Xxxx Hub Partners, L.P. and the Collateral Agent dated
_____________________, 1998.
5. The Financing Statement attached hereto as EXHIBIT B (the "TEXAS FINANCING
STATEMENT").
Very truly yours,
IV-x
EXHIBIT V
DISCLOSURES
Section 4.9 LIABILITIES
None
LITIGATION
None
Section 4.11 ENVIRONMENTAL MATTERS
(a) None
(b) None
(c) None
(d) None
Section 4.16 CASUALTIES
None
Section 4.18 SUBSIDIARIES *
I. Market Hub Partners Storage, L.P.
Market Hub Partners Finance, Inc.
Xxxx Bluff Hub Partners, L.L.C.
99.99% interest in Xxxx Bluff Hub Partners, X.X.
Xxxx Hub Partners, L.L.C.
99.99% interest in Xxxx Hub Partners, X.X.
XX. Xxxx Bluff Hub Partners, L.L.C.
.01% interest in Xxxx Bluff Hub Partners, L.P.
III. Xxxx Bluff Hub Partners, L.P.
None
V-i
IV. Xxxx Hub Partners, L.L.C.
.01% interest in Xxxx Hub Partners, L.P.
V. Xxxx Hub Partners, L.P.
None
* Unless otherwise indicated, the Borrower or Guarantor's interest in the
listed subsidiary is a 100% interest.
V-ii
