Exhibit 10.05
EXECUTION COPY
================================================================================
REIMBURSEMENT AGREEMENT
among
PORT XXXXXX FINANCE CORP.,
as Borrower,
PORT XXXXXX XXXXX COMPANY L.P.,
as Partnership and Guarantor,
SABINE RIVER HOLDING CORP.,
as General Partner of the Partnership and Guarantor,
NECHES RIVER HOLDING CORP.,
as Limited Partner of the Partnership and Guarantor,
WINTERTHUR INTERNATIONAL INSURANCE COMPANY LIMITED,
as Primary Insurer,
and
WINTERTHUR INTERNATIONAL INSURANCE COMPANY LIMITED,
as Administrative Agent for and on the behalf of the Oil Payment Insurers,
Dated as of August 19, 1999
================================================================================
Table of Contents
Section Page
ARTICLE I
DEFINITIONS AND INTERPRETATION
1.01 Defined Terms........................................................ 2
1.02 Interpretation....................................................... 2
1.03 Conflict............................................................. 3
ARTICLE II
OIL PAYMENT REIMBURSEMENT OBLIGATIONS
2.01 Reimbursement by Partnership......................................... 3
2.02 Interest............................................................. 3
2.03 Notice of Payment of a Claim by the Primary Insurer.................. 4
2.04 Oil Payment Note..................................................... 4
2.05 Mandatory Prepayments................................................ 5
2.06 Insufficient Payments................................................ 5
2.07 Other Payments....................................................... 6
ARTICLE III
REPRESENTATIONS AND WARRANTIES
3.01 Incorporation by Reference........................................... 6
ARTICLE IV
COVENANTS
4.01 Incorporation by Reference........................................... 6
4.02 Defenses............................................................. 6
ARTICLE V
GUARANTY INSURANCE POLICY
5.01 Issuance of Guaranty Insurance Policy................................ 7
5.02 Coverage Period and Renewal.......................................... 7
5.03 Coverage Start Date.................................................. 7
5.04 Premium Payments..................................................... 8
5.05 Suspension and Termination........................................... 8
-i-
Section Page
ARTICLE VI
DEBT SERVICE RESERVE INSURANCE GUARANTEE
6.01 Repayment of Principal and Payment of Interest....................... 9
ARTICLE VII
CONDITIONS PRECEDENT
7.01 Obligations of the Primary Insurer................................... 10
ARTICLE VIII
GUARANTEE OF OIL PAYMENT REIMBURSEMENT OBLIGATIONS
8.01 Guarantee of the Partners............................................ 10
ARTICLE IX
GUARANTEE OF DEBT SERVICE RESERVE
INSURANCE GUARANTEE OBLIGATIONS
9.01 Guarantee of the DSRIG Guarantors.................................... 11
ARTICLE X
MISCELLANEOUS
10.01 Notices.............................................................. 12
10.02 Assignments and Participation........................................ 13
10.03 Termination.......................................................... 13
10.04 Counterparts......................................................... 14
10.05 GOVERNING LAW........................................................ 14
10.06 WAIVER OF JURY TRIAL................................................. 14
10.07 Consent to Jurisdiction.............................................. 14
10.08 Severability......................................................... 15
10.09 Waiver............................................................... 15
10.10 Expenses, etc........................................................ 15
10.11 Amendments, etc...................................................... 16
10.12 Successors and Assigns............................................... 16
10.13 Survival............................................................. 17
10.14 Covered Taxes........................................................ 17
10.15 Payments............................................................. 18
10.16 No Direct Right Against Reinsurer.................................... 18
-ii-
APPENDICES
APPENDIX A..........................................................Definitions
EXHIBIT I..............................................Form of Oil Payment Note
EXHIBIT II.................................................Reimbursement Notice
EXHIBIT III...........................................Guaranty Insurance Policy
-iii-
REIMBURSEMENT AGREEMENT
This Agreement, dated as of August 19, 1999, is made among:
PORT XXXXXX FINANCE CORP., a corporation organized under the laws of
the State of Delaware, as Borrower (the "Borrower"),
PORT XXXXXX XXXXX COMPANY L.P., a limited partnership organized under
the laws of the State of Delaware, as Partnership and Guarantor (the
"Partnership"),
SABINE RIVER HOLDING CORP., a corporation organized under the laws of
the State of Delaware (the "General Partner"),
NECHES RIVER HOLDING CORP., a corporation organized under the laws of
the State of Delaware (the "Limited Partner" and together with the General
Partner, the "Partners"),
WINTERTHUR INTERNATIONAL INSURANCE COMPANY LIMITED, a company
incorporated under the laws of England, as Primary Insurer (the "Primary
Insurer"), and
WINTERTHUR INTERNATIONAL INSURANCE COMPANY LIMITED, a company
incorporated under the laws of England, as Administrative Agent for and on
behalf of the Oil Payment Insurers (the "Administrative Agent").
WHEREAS, the Partnership desires that the Oil Payment Insurers provide
financial guarantee insurance coverage with respect to the Partnership's payment
obligations to P.M.I. Comercio Internacional, S.A. de C.V. ("PMI") under the
Long-Term Oil Supply Agreement;
WHEREAS, the Primary Insurer is willing to issue a Guaranty Insurance
Policy (the "Guaranty Insurance Policy") to provide the financial guarantee
insurance coverage referred to in the preceding recital;
WHEREAS, as a condition to its issuing the Guaranty Insurance Policy,
the Primary Insurer requires the Partners to guarantee the Oil Payment
Reimbursement Obligations and related payment obligations of the Partnership;
WHEREAS, the Primary Insurer has entered into separate reinsurance
arrangements with several reinsurers (the "Reinsurers" and together with the
Primary Insurer, the "Oil Payment Insurers") to reinsure the financial guarantee
insurance coverage provided under the Guaranty Insurance Policy;
WHEREAS, each of the Reinsurers, pursuant to its reinsurance
arrangement, has appointed Winterthur International Insurance Company Limited to
act as Administrative Agent on its behalf with respect to the Guaranty Insurance
Policy;
WHEREAS, the Borrower desires that the Oil Payment Insurers provide
financial guarantee insurance coverage with respect to the Borrower's funding
obligations in respect of the Debt Service Reserve Account, in accordance with
the terms and provisions of the Common Security Agreement;
WHEREAS, the Primary Insurer is willing to issue a Debt Service
Reserve Insurance Guarantee (the "Debt Service Reserve Insurance Guarantee") to
provide the financial guarantee insurance coverage referred to in the preceding
recital;
WHEREAS, as a condition to its issuing the Debt Service Reserve
Insurance Guarantee, the Primary Insurer requires the Partnership and the
Partner to guarantee the reimbursement obligations and related obligations of
the Borrower in respect thereof.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and undertakings contained herein, in the Guaranty Insurance Policy
and in the Debt Service Reserve Insurance Guarantee, and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto hereby agree as follows:
ARTICLE I
DEFINITIONS AND INTERPRETATION
1.01 Defined Terms. Except for terms defined in this Agreement,
the Appendix or the Exhibits hereto, defined terms in this Agreement and the
Appendix and Exhibits hereto, which may be identified by the capitalization of
the first letter of each principal word thereof, shall have the meanings
assigned to them in the Common Security Agreement (including Appendix A
thereto).
1.02 Interpretation. In this Agreement and in the Appendix and
Exhibits hereto, except to the extent that the context otherwise requires:
(a) the table of contents and headings are for convenience only and
shall not affect the interpretation of this Agreement;
(b) unless otherwise specified, references to Articles, Sections,
clauses, the Appendix and Exhibits are references to Articles, Sections and
clauses of, and the Appendix and Exhibits to, this Agreement;
(c) references to any document or agreement, including without
limitation this Agreement, shall be deemed to include references to such
document or agreement (together with all
-2-
appendices, annexes and schedules thereto) as amended, supplemented, replaced or
restated from time to time in accordance with its terms and (where applicable)
subject to compliance with the requirements set forth therein; and
(d) references to any party to this Agreement or any other document or
agreement shall include such party's successors and permitted assigns.
1.03 Conflict. In the event of any conflict between this
Agreement and the Common Security Agreement, the Common Security Agreement shall
govern.
ARTICLE II
OIL PAYMENT REIMBURSEMENT OBLIGATIONS
2.01 Reimbursement by Partnership. (a) Notwithstanding any other
provision of this Agreement or the Guaranty Insurance Policy to the contrary,
the Partnership shall unconditionally reimburse the Primary Insurer in
accordance with clause (b) of this Section 2.01 in an amount equal to the
aggregate principal amount of any and all Oil Payments made by the Primary
Insurer in respect of a Claim by PMI under the Guaranty Insurance Policy (each
such obligation, an "Oil Payment Reimbursement Obligation").
(b) (i) Any and each Oil Payment made by the Primary Insurer in
respect of a Claim by PMI under the Guaranty Insurance Policy shall result
in a corresponding Oil Payment Reimbursement Obligation of the Partnership
in a principal amount equal to the amount of such Oil Payment.
(ii) The Partnership shall repay in full each Oil Payment
Reimbursement Obligation to the Primary Insurer on or prior to the date six
months after the incurrence of such obligation in accordance with subclause
(i) above, provided that any Oil Payment Reimbursement Obligation shall
become immediately due and payable if and to the extent funds are available
for paying Oil Payment Reimbursement Obligations at any time a withdrawal
of funds from Accounts is made in accordance with Section 5.05 or 5.06 of
the Common Security Agreement.
2.02 Interest. The Partnership shall pay interest to the Primary
Insurer on each Oil Payment Reimbursement Obligation at any time outstanding for
the period from and including the date such Oil Payment Reimbursement Obligation
is incurred in accordance with clause (b)(i) of Section 2.01 up to but excluding
the date such Oil Payment Reimbursement Obligation is repaid in full (the
"Interest Period"), at an interest rate per annum equal to 7-Day LIBOR (or such
other interest rate basis as may be agreed between the parties at the time),
plus the Applicable Margin, plus 2%.
-3-
2.03 Notice of Payment of a Claim by the Primary Insurer.
Promptly after the making of an Oil Payment to PMI under the Guaranty Insurance
Policy, the Primary Insurer shall deliver a notice to the Partnership,
substantially in the form of Exhibit II (a "Reimbursement Notice"), provided
that a corresponding Oil Payment Reimbursement Obligation shall be incurred by
the Partnership in accordance with clause (b)(i) of Section 2.01 irrespective of
whether and when a Reimbursement Notice is delivered by the Primary Insurer to
the Partnership.
2.04 Oil Payment Note. (a) As additional evidence of the
Partnership's obligation to repay the principal amount of each Oil Payment in
accordance with Section 2.01, the Partnership shall execute and deliver to the
Administrative Agent on behalf of each Oil Payment Insurer, on the date hereof,
a promissory note (the "Oil Payment Note"), substantially in the form set forth
in Exhibit I hereto, and otherwise duly completed, payable to the order of the
Primary Insurer and in a principal amount equal to $150,000,000. The
Partnership's signature on the Oil Payment Note shall be duly certified by a
notary public.
(b) The Oil Payment Note shall (i) represent the Partnership's
obligation to repay a principal amount equal to the amount of the relevant Oil
Payments, (ii) be payable in full as set forth in clause (b)(ii) of Section 2.01
and (iii) bear interest for the relevant Interest Period on the unpaid principal
amount thereof from time to time outstanding at the applicable interest rate per
annum provided in, and payable as specified in, Section 2.02. The Primary
Insurer is hereby authorized to record (x) the date and amount of the relevant
Oil Payment and of each repayment in respect of principal of such Oil Payment
and (y) the Interest Period and interest rate with respect thereto, on the
schedules annexed to and constituting a part of the Oil Payment Note. It is
understood, however, that any failure by the Primary Insurer to make, or any
inaccuracy or incompleteness of, any such recordation shall not affect the
obligations of the Partnership under this Agreement or the Oil Payment Note.
(c) The execution and delivery by the Partnership of the Oil Payment
Note shall not affect in any way whatsoever the rights or obligations of the
Partnership under this Agreement or any other Financing Document, and the rights
and claims of the Primary Insurer under the Oil Payment Note shall not replace
or supersede the rights and claims of the Primary Insurer under this Agreement
or the other Financing Documents, provided, however, that any repayment in
respect of principal of the Oil Payment Note in accordance with the terms and
conditions of this Agreement and the Common Security Agreement shall, to the
extent that such payment if made hereunder would discharge the Partnership's
obligations hereunder and thereunder, discharge such obligation pro tanto, and
any repayment in respect of principal of any Oil Payment in accordance with the
terms of this Agreement shall discharge the obligations of the Partnership under
the Oil Payment Note to the extent of such repayment.
(d) The Partnership shall deliver to the Administrative Agent an
irrevocable power of attorney in form and substance acceptable to the
Administrative Agent and the Primary Insurer authorizing the Administrative
Agent to execute a replacement Oil Payment Note on behalf of the Partnership
whenever requested to do so by the Primary Insurer, at which time the
Administrative
-4-
Agent shall also (and shall also be authorized by such power of attorney to)
conform the principal amount of the Oil Payment Note to the then outstanding
principal amount of the Oil Payment or Oil Payments evidenced thereby, taking
into account any repayment, Optional Prepayment or Mandatory Prepayment made by
the Partnership.
(e) Upon discharge of all obligations of the Partnership under and in
accordance with this Agreement and the Common Security Agreement, the
Administrative Agent shall cancel and return to the Partnership the Oil Payment
Note delivered to the Administrative Agent by the Partnership.
(f) The Primary Insurer agrees that, notwithstanding any provision of
the Oil Payment Note to the contrary, it shall not demand payment of any amount
evidenced by the Oil Payment Note unless such amount is then due and payable
(whether at stated maturity, by acceleration or otherwise) by the Partnership in
accordance with the terms of this Agreement or the Common Security Agreement.
2.05 Mandatory Prepayments. The Partnership shall make Mandatory
Prepayments in respect of any principal amount of Oil Payment Reimbursement
Obligations at any time or from time to time outstanding under this Agreement
pursuant to Section 2.05 of the Common Security Agreement. The Primary Insurer
may waive its right to receive all or any part of any Mandatory Prepayment
without prejudice to its right to receive any subsequent Mandatory Prepayment.
2.06 Insufficient Payments. If at any time at which any Oil
Payment Reimbursement Obligations are payable by the Partnership to the Primary
Insurer and the Primary Insurer receives insufficient funds from the Partnership
to pay in full all Oil Payment Reimbursement Obligations payable at such time
pursuant to this Agreement, the funds so received by the Primary Insurer shall
be applied to the payment of amounts owing by the Partnership as the Primary
Insurer may determine from time to time and in any order of priority, provided
that, so long as no Oil Payment has been accelerated, such funds shall be
applied in a manner that is consistent with the following order of priority:
first, to pay outstanding fees, costs, expenses, reimbursements and
indemnities then due and payable to the Collateral Trustee or the
Administrative Agent;
second, to pay interest (other than overdue interest), fees, expenses,
indemnities and breakage costs then due and payable to the Primary Insurer;
third, to pay overdue interest then due and payable to the Primary
Insurer;
fourth, to pay overdue principal to the Primary Insurer; and
fifth, to pay principal (other than overdue principal) then due and
payable to the Primary Insurer.
-5-
2.07 Other Payments. The Partnership shall cause (a) any Loss
proceeds in respect of any casualty to Project Property, to the extent they
relate to any shipment of Maya for which the Oil Payment Insurer has made, or is
obligated to make, an Oil Payment to PMI and (b) any refund from PMI in respect
of any Oil Payment made by the Oil Payment Insurer to be paid directly to the
Oil Payment Insurer. If and to the extent that such Loss Proceeds or refund are
received by the Oil Payment Insurer, the corresponding Reimbursement Obligation
and obligation of the Partnership under the Oil Payment Note shall be discharged
for all purposes of this Agreement.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
3.01 Incorporation by Reference. The Partnership hereby confirms
for the benefit of the Oil Payment Insurers and for the benefit of the Primary
Insurer, in its capacity as issuer of the Debt Service Reserve Insurance
Guarantee, each of the representations and warranties made by it in Section 3.01
of the Common Security Agreement, as if made as of the date of this Agreement
and for the benefit of the Oil Payment Insurers, which representations and
warranties are incorporated herein by reference as if fully set forth in this
Agreement.
ARTICLE IV
COVENANTS
4.01 Incorporation by Reference. The Partnership hereby agrees
for the benefit of the Oil Payment Insurers that, so long as the Guaranty
Insurance Policy is in effect or any amount payable under this Agreement remains
unpaid, it shall observe and perform each of the covenants applicable to it set
forth in Article IV of the Common Security Agreement, which covenants and
agreements are incorporated by reference in this Agreement as if fully set forth
herein, in accordance with their terms.
4.02 Defenses. (a) The Partnership agrees that it shall exercise,
to the full extent permitted by law, including without limitation by means of
judicial or arbitral proceedings, any and all Defenses.
(b) If the Partnership does not pay any invoice issued by PMI under
the Long-Term Oil Supply Agreement when due because the Partnership reasonably
believes it has a Defense to making such payment, the Partnership shall promptly
notify the Primary Insurer of such Defense (a "Defense Notice").
(c) Irrespective of any Defense Notice given to the Primary Insurer
pursuant to clause (b) of this Section 4.02, if the Primary Insurer makes any
Oil Payment in respect of all or a part of the amount invoiced by PMI to which
such Defense Notice relates, a corresponding Oil Payment
-6-
Reimbursement Obligation shall be incurred and be payable by the Partnership in
accordance with Section 2.01.
ARTICLE V
GUARANTY INSURANCE POLICY
5.01 Issuance of Guaranty Insurance Policy. Concurrently with the
execution of this Agreement, the Primary Insurer is issuing the Guaranty
Insurance Policy in the form attached hereto as Exhibit III.
5.02 Coverage Period and Renewal. (a) Unless earlier terminated
in accordance with Section 5.05, and subject to the other terms and conditions
set forth in this Agreement and in the Guaranty Insurance Policy, the Guaranty
Insurance Policy will remain in effect for up to 10.5 consecutive one-year
periods (each, an "Annual Policy Period"), each beginning on the date hereof or
an anniversary thereof and ending on the calendar day immediately preceding the
first anniversary of such date (except for the last such period, which will end
on the calendar day immediately preceding the date that is six months after the
immediately preceding anniversary of the date hereof), provided that upon the
expiration of any Annual Policy Period, the Guaranty Insurance Policy shall be
automatically extended for another Annual Policy Period only if the Insurer has
received from the Partnership the Premium for such additional Annual Policy
Period.
(b) The coverage provided by the Guaranty Insurance Policy in respect
of Insured Obligations will terminate upon the earlier of (i) 10.5 years after
the date of this Agreement and (ii) the date on which all Senior Debt
Obligations have been repaid in full (such earlier date, the "Coverage End
Date").
(c) Notwithstanding anything in clause (a) or (b) of this Section 5.02
to the contrary, unless earlier terminated in accordance with Section 5.05, the
coverage provided by the Guaranty Insurance Policy in respect of Insured
Obligations shall be limited to any Shipments for which the Agreed Laydays (as
defined in the Long-Term Oil Supply Agreement) commence after the Coverage Start
Date.
5.03 Coverage Start Date. (a) In order to activate the initial
US$15 million coverage provided by the Guaranty Insurance Policy in respect of
Insured Obligations, the Partnership must: (i) give to the Primary Insurer at
least 10 days' prior written notice (the "Partial Coverage Start Notice") of the
date on which it wishes such coverage to commence (the "Coverage Start Date"),
accompanied by a certificate of a Responsible Officer of the Partnership,
certified by the Independent Engineer, to the effect that Completion can
reasonably be expected to be achieved within 15 days from the proposed Coverage
Start Date; and (ii) pay any Adjustment Amount required in connection with the
Coverage Start Date.
-7-
(b) In order to increase the initial US$15 million coverage under the
Guaranty Insurance Policy to US$ 150 million, the Partnership must give to the
Primary Insurer written notice (the "Full Coverage Start Notice"), certified by
the Independent Engineer, to the effect that Completion has been achieved. Such
increase in coverage will take effect at 12:00 noon (New York time) on the date
that is five days after the Full Coverage Start Notice has been given in
accordance with the foregoing sentence (the "Full Coverage Start Date").
5.04 Premium Payments. (a) The Partnership shall pay to the
Primary Insurer the premium for each Annual Policy Period (the "Premium") and
any adjustment amount required as a result of the occurrence of the Coverage
Start Date or the Full Coverage Start Date during any Annual Policy Period
(each, an "Adjustment Amount"). The Premium for any Annual Policy Period is due
30 calendar days prior to the expiration of the immediately preceding Annual
Policy Period (or, in the case of the first Annual Policy Period, on or prior to
the date hereof). Any Adjustment Amount is due and payable for receipt by the
Insurer ten calendar days prior to the Coverage Start Date or the Full Coverage
Start Date, as the case may be.
(b) The Premium shall be: (i) with respect to the period from and
including the date hereof to but excluding the Coverage Start Date, 50 bps. per
annum based on a Limit of Liability of $150,000,000 (or, in the case of and
following any extension of the Outside Coverage Start Date beyond October 1,
2001, 150 bps. per annum based on a Limit of Liability of $150,000,000); and
(ii) with respect to the period from and including the Coverage Start Date to
and including the Coverage End Date, 150 bps. per annum, based upon the
applicable Limit of Liability on the date the Premium is due.
5.05 Suspension and Termination. (a) Upon the occurrence of any
of the following events, the Primary Insurer may in its sole discretion suspend
the coverage provided by the Guaranty Insurance Policy in accordance with the
terms thereof:
(i) If (A) any Premium or Adjustment Amount is not paid in full when due
and (B) such Default is not cured within the 10 Business Days
immediately following the due date, then the coverage may be suspended
for the relevant year until such Premium or Adjustment Amount, as the
case may be, has been paid in full;
(ii) If Senior Lenders have notified the Administrative Agent, pursuant to
clause (c) of Section 10.04 of the Common Security Agreement, that the
second payment priority with respect to Oil Payment Reimbursement
Obligations shall terminate, then the coverage will be suspended for
the duration of the Default on which such notice is based.
(b) Upon the occurrence of any of the following events, the Primary
Insurer may in its sole discretion terminate the coverage provided by the
Guaranty Insurance Policy in accordance with the terms thereof:
-8-
(i) Any Event of Default of a type specified in clause (a) or (e)
of Section 10.01 of the Common Security Agreement shall have occurred
and shall have Continued for at least six months;
(ii) Any Event of Default of a type specified in clause (f) or (l) of
Section 10.01 of the Common Security Agreement shall have occurred and
be Continuing;
(iii) Senior Lenders shall have taken Enforcement Action under the Common
Security Agreement in respect of any other Event of Default;
(iv) The coverage provided by the Guaranty Insurance Policy in respect of
Insured Obligations shall have been suspended for at least 30
consecutive days (or, if applicable, 30 consecutive days following the
expiration of any cure period); or
(v) The Partnership shall have failed to give the Coverage Start Notice by
the Outside Coverage Start Date.
ARTICLE VI
DEBT SERVICE RESERVE INSURANCE GUARANTEE
6.01 Repayment of Principal and Payment of Interest.
Notwithstanding any other provision of this Agreement or the Debt Service
Reserve Insurance Guarantee to the contrary, any and all principal amounts paid
by the Primary Insurer to the Collateral Trustee under the Debt Service Reserve
Insurance Guarantee shall be repaid, and any interest accrued on such principal
amount in accordance with the terms of the Debt Service Reserve Insurance
Guarantee shall be paid, to the Primary Insurer on the terms and subject to the
conditions set forth in the Common Security Agreement.
ARTICLE VII
CONDITIONS PRECEDENT
7.01 Obligations of the Primary Insurer. The obligations of the
Primary Insurer under the Guaranty Insurance Policy, the Debt Service Reserve
Insurance Guarantee and this Agreement shall be subject to the satisfaction of
each of the following conditions:
(a) Execution. This Agreement shall have been duly executed and
delivered by each of the parties hereto; and
(b) Satisfaction of Common Conditions Precedent. All the common
conditions precedent set forth in Sections 9.01 and 9.02 of the Common
Security Agreement shall have been satisfied (or waived as provided in
Section 1 4.13 of the Common Security Agreement).
-9-
(c) Oil Payment Notes. The Administrative Agent on behalf of the
Primary Insurer shall have received a duly completed and executed Oil
Payment Note.
ARTICLE VIII
GUARANTEE OF OIL PAYMENT REIMBURSEMENT OBLIGATIONS
8.01 Guarantee of the Partners (a) The Partners hereby jointly and
severally guarantee the performance by the Partnership of all the Partnership's
obligations under this Agreement and the Oil Payment Note, including without
limitation the Oil Payment Reimbursement Obligations. Such guarantee shall be
unconditional, irrevocable and absolute, irrespective of (i) any Insolvency
Event with respect to the Partners or the Primary Insurer and (ii) any event or
circumstance that might constitute a legal or equitable discharge or defense to
such guarantee.
(b) In case of the failure of the Partnership to fulfill any of its
obligations under this Agreement or the Oil Payment Note, the Partners agree to
fulfill such obligations when and as the same shall become due and as if such
obligations were being fulfilled by the Partnership. The Partners waive notice
of acceptance of this guarantee and notice of any liability to which it may
apply and waive diligence, presentment, demand of payment, protest, notice of
dishonor and all other notices whatsoever, filing of claims with a court in the
event of an Insolvency Event with respect to the Partnership or the Primary
Insurer, and any requirement that the Primary Insurer or the Administrative
Agent exhaust any right, power or remedy or proceed first against the
Partnership or any other Person, and agree that this guarantee shall remain in
full force and effect and will not be discharged, except by fulfilling all such
obligations. The Partners shall remain liable if any such obligation is only
fulfilled temporarily (and if the Partners' obligations under this Agreement
have terminated in accordance with this Agreement, such obligations shall be
reinstated to the extent necessary). The Partners agree that they will pay, or
reimburse the Primary Insurer and the Administrative Agent on demand for, all
costs and expenses (including without limitation fees and disbursements of
counsel) incurred by the Primary Insurer or the Administrative Agent, as the
case may be, in connection with any rescission or restoration of this guarantee,
including any such costs and expenses incurred in defending against any claim
alleging that any payment constituted a preference, fraudulent transfer or
similar payment under any bankruptcy, insolvency or similar law. The Partners
unconditionally agree not to exercise any right of subrogation or reimbursement
arising from payments made under this guarantee.
ARTICLE IX
GUARANTEE OF DEBT SERVICE RESERVE
INSURANCE GUARANTEE OBLIGATIONS
9.01 Guarantee of the DSRIG Guarantors. (a) The DSRIG Guarantors
hereby jointly and severally guarantee the performance by the Borrower of all
the Borrower's obligations
-10-
under the Debt Service Reserve Insurance Guarantee and this Agreement. Such
guarantee shall be unconditional, irrevocable and absolute, irrespective of (i)
any Insolvency Event with respect to any of the DSRIG Guarantors or the Primary
Insurer and (ii) any event or circumstance that might constitute a legal or
equitable discharge or defense to such guarantee.
(b) In case of the failure of the Borrower to fulfill any of its
obligations under the Debt Service Reserve Insurance Guarantee or this
Agreement, the DSRIG Guarantors agree to fulfill such obligations when and as
the same shall become due and as if such obligations were being fulfilled by the
Borrower. The DSRIG Guarantors waive notice of acceptance of this guarantee and
notice of any liability to which it may apply and waive diligence, presentment,
demand of payment, protest, notice of dishonor and all other notices whatsoever,
filing of claims with a court in the event of an Insolvency Event with respect
to any of the DSRIG Guarantors or the Primary Insurer, and any requirement that
the Primary Insurer or the Administrative Agent exhaust any right, power or
remedy or proceed first against the Borrower or any other Person, and agree that
this guarantee shall remain in full force and effect and will not be discharged,
except by fulfilling all such obligations. The DSRIG Guarantors shall remain
liable if any such obligation is only fulfilled temporarily (and if the DSRIG
Guarantors' obligations under this Agreement have terminated in accordance with
this Agreement, such obligations shall be reinstated to the extent necessary).
The DSRIG Guarantors agree that they will pay, or reimburse the Primary Insurer
and the Administrative Agent on demand for, all costs and expenses (including
without limitation fees and disbursements of counsel) incurred by the Primary
Insurer or the Administrative Agent, as the case may be, in connection with any
rescission or restoration of this guarantee, including any such costs and
expenses incurred in defending against any claim alleging that any payment
constituted a preference, fraudulent transfer or similar payment under any
bankruptcy, insolvency or similar law. The DSRIG Guarantors unconditionally
agree not to exercise any right of subrogation or reimbursement arising from
payments made under this guarantee.
ARTICLE X
MISCELLANEOUS
10.01 Notices. Any notice, request, demand, consent, designation,
direction, instruction, certificate, report or other communication to be given
or made under this Agreement (including without limitation any modifications of,
or waivers or consents under, this Agreement) shall be given or made in writing
and shall be deemed duly given when (i) personally delivered, (ii) sent by
facsimile transmission (but only if, immediately after the transmission, the
sender's facsimile machine records in writing the correct answerback), or (iii)
five days have elapsed after mailing by certified or registered mail, postage
pre-paid, in each case addressed to a party at the address or facsimile
transmission number specified below such party's name on the signature pages
hereof or to such other address or facsimile transmission number of which such
party has given notice. Notice of address or facsimile transmission number
change shall be effective only upon receipt. All notices, requests, demands,
consents, designations, directions, instructions, certificates, reports and
other communications under, in connection with, or with respect to, this
Agreement shall be sent to the
-11-
Partnership, the Borrower, the Primary Insurer or the Administrative Agent as
the case may be, at its address set forth below:
If to the Partnership:
---------------------
Port Xxxxxx Xxxxx Company L.P.
0000 X. Xxxxxxx Xxxxx, Xxxxxx Xx. 00
Xxxx Xxxxxx, XX 00000
Attention: Legal Department
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
If to the Borrower:
------------------
Port Xxxxxx Finance Corp.
0000 X. Xxxxxxx Xxxxx, Xxxxxx X. 00
Xxxx Xxxxxx, XX 00000
Attention: Legal Department
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
If to the Primary Insurer or the Administrative Agent:
-----------------------------------------------------
Winterthur International Insurance Company Limited
00 Xxxxxxxxxx Xxxxxx
Xxxxxx, XX0X, 0XX
Xxxxxxx
Attention: Xxxxxx XxXxxxxx
Telephone: 000-00-000-000-0000
Facsimile: 011-44-171-979-3537
or such other address, telephone number or facsimile number as the relevant
party may designate to the other parties from time to time.
10.02 Assignments and Participation. (a) The Partnership may not
assign any of its rights or obligations under this Agreement, any of the Oil
Payment Notes or the Debt Service Reserve Insurance Guarantee without the prior
written consent of the Administrative Agent, and the Primary Insurer may not
assign any of its rights under this Agreement, the Oil Payment Notes or the Debt
Service Reserve Insurance Guarantee, either in whole or in part.
-12-
(b) The Primary Insurer may sell or agree to sell to one or more other
Persons a participation in all or any part of its rights under this Agreement,
the Oil Payment Notes or the Debt Service Reserve Insurance Guarantee, provided
that no purchaser of a participation (a "Participant") shall have any rights or
benefits under this Agreement, any Oil Payment Note, the Debt Service Reserve
Insurance Guarantee or any other Financing Document. All amounts payable by the
Partnership to the Primary Insurer under (i) Article II in respect of Oil
Payment Reimbursement Obligations or (ii) Article VI in respect of payment
obligations relating to the Debt Service Reserve Insurance Guarantee shall be
determined as if the Primary Insurer had not sold or agreed to sell any
participation in such obligations.
(c) The Primary Insurer may furnish any information concerning the
Partnership or the Borrower in its possession from time to time to any
Participants (including prospective assignees and Participants), provided that
such assignees and Participants and prospective assignees and Participants shall
first execute and deliver to the Partnership or the Borrower, as the case may
be, an agreement in writing to be bound by customary confidentiality
obligations.
10.03 Termination. This Agreement shall remain in effect until the
later of (a) the termination of the Guaranty Insurance Policy in accordance with
its terms and (b) the payment in full by the Partnership of any and all amounts
payable by it under this Agreement, the Guaranty Insurance Policy or the Debt
Service Reserve Insurance Guarantee.
10.04 Counterparts. This Agreement may be executed in any number
of counterparts, all of which taken together shall constitute one and the same
instrument and any of the parties hereto may execute this Agreement by signing
any such counterpart.
10.05 GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS
OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK.
10.06 WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY
WAIVES, TO THE EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY
JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE
SENIOR NOTES OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
10.07 Consent to Jurisdiction. (a) Subject to clause (c) of this
Section 10.08, each party hereto hereby irrevocably consents and agrees, for the
benefit of each other party hereto, that any legal action, suit or proceeding
against it with respect to its obligations, liabilities or any other matter
under or arising out of or in connection with this Agreement, the Oil Payment
Notes or the Oil Payment Reimbursement Obligations may be brought in any Federal
or state court located in the Borough of Manhattan, The City of New York, and
hereby irrevocably accepts and submits to the exclusive jurisdiction of each
such court, to the exclusion of all other courts, with respect to any such
action, suit or proceeding. Each party hereto hereby waives to the fullest
extent permitted by
-13-
applicable laws any objection which it may now or hereafter have to the laying
of venue of any of the aforesaid actions, suits or proceedings, brought in any
such court and hereby further waives and agrees not to plead or claim in any
such court that any such action, suit or proceeding brought therein has been
brought in an inconvenient forum.
(b) Each of the Borrower, the Partnership and the Partners hereby
irrevocably appoints CT Corporation System, with offices at the date hereof at
0000 Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000, as its authorized agent on which any
and all legal process may be served in any such action, suit or proceeding
brought in any Federal or State court located in the Borough of Manhattan, The
City of New York. Each of the Borrower, the Partnership and the Partners agrees
that service of process in respect of it upon its respective agent, together
with written notice of such service given to it in the manner provided in
Section 10.01, shall be deemed to be effective service of process upon it in any
such action, suit or proceeding. Each of the Borrower, the Partnership and the
Partners agrees that the failure of its respective agent to give notice to it of
any such service shall not impair or affect the validity of such service or any
judgment rendered in any action, suit or proceeding based thereon. If for any
reason the Borrower's, the Partnership's or the Partners' agent shall cease to
be available to act as such, or if any party hereto that was located in New York
ceases to be so located, such party agrees to designate a new agent in the
Borough of Manhattan, The City of New York, on the terms and for the purposes of
this clause (b).
(c) Notwithstanding the provision of clause (a) of this Section 10.07,
nothing herein shall be deemed to limit the ability of either of the Primary
Insurer or the Administrative Agent to serve any such legal process in any other
manner permitted by applicable law or to obtain jurisdiction over the Borrower,
the Partnership and the Partners or bring actions, suits or proceedings against
any such parties in such other jurisdiction, including without limitation in any
Federal or state court located in the State of Texas, and in such manner, as may
be permitted by applicable law.
(d) Each party hereto agrees that a final judgment against it in any
action, suit or proceeding taken in any Federal or State Court in the Borough of
Manhattan, The City of New York in accordance with clause (a) of this Section
10.07 or, in the case of the Partnership or the Borrower, in any other court in
accordance with clause (c) of this Section 10.07, shall be conclusive and may be
enforced in any jurisdiction by suit on the judgment, a certified copy of which
judgment shall be conclusive evidence thereof, or by any other means provided by
law.
10.08 Severability. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
10.09 Waiver. Except as expressly provided in this Agreement, no
failure on the part of the Primary Insurer or the Administrative Agent to
exercise, no delay in exercising, and no course of dealing with respect to, any
right, power or privilege under this Agreement or any Oil
-14-
Payment Note shall operate as a waiver thereof, nor shall any single or partial
exercise of any right, power or privilege under this Agreement or any Oil
Payment Note preclude any other or further exercise thereof or the exercise of
any other right, power or privilege. The remedies provided in this Agreement are
cumulative and not exclusive of any remedies provided by law.
10.10 Expenses, etc. Whether or not any of the transactions
contemplated by this Agreement are consummated, each of the Partnership and the
Borrower, jointly and severally, agrees to reimburse (or cause to be reimbursed)
the Primary Insurer and the Administrative Agent on demand for all out-of-pocket
costs and expenses of each (including without limitation all commissions,
charges, costs and expenses, if any, for the conversion of currencies, fees and
expenses of legal counsel, consultants and advisors and travel-related costs and
expenses) made, paid, suffered or incurred in connection with (a) the
preparation, negotiation, execution and delivery, syndication (both before and
after the Closing Date) and, where appropriate, authentication, registration and
recordation of this Agreement, the other Financing Documents and any other
documents and instruments related hereto or thereto (including legal opinions),
(b) any amendment or modification to, or the protection or preservation of any
right or claim under, or consent or waiver in connection with, this Agreement or
any other Financing Document, any such other document or instrument related
hereto or thereto or any Collateral, (c) the authentication, registration,
translation, syndication and recordation (where appropriate) and the delivery of
the evidences of indebtedness relating to the Oil Payments and the disbursements
thereof and (d) the syndication or reinsurance (prior to or after the date
hereof), administration and enforcement (including with respect to a workout) of
this Agreement, the other Financing Documents and any other documents and
instruments referred to herein or therein.
Each of the Partnership and the Borrower hereby jointly and severally
agrees to indemnify the Primary Insurer and the Administrative Agent and their
respective directors, officers, employees, agents and Affiliates from, and hold
each of them harmless against, any and all claims or Losses incurred by it
arising out of or by reason of any investigation or litigation or other
proceedings (including without limitation any threatened investigation or
litigation or other proceedings) relating to, arising out of or resulting from
the Guaranty Insurance Policy or the Debt Service Reserve Insurance Guarantee,
including without limitation the fees and disbursements of counsel incurred in
connection with any such investigation or litigation or other proceedings.
Without limiting the generality of the foregoing, each of the Partnership and
the Borrower shall jointly and severally indemnify the Administrative Agent and
the Primary Insurer and their respective directors, officers, employees, agents
and Affiliates from, and hold each of them harmless against, any claims or
Losses, including without limitation those described in the preceding sentence
relating to any Environmental Law including without limitation those arising as
a result of the past, present or future operations of the Partnership, the
Borrower or any of their Affiliates (or any predecessor in interest to the
Partnership or any of its Affiliates) or the environmental contamination of any
site or facility owned, operated or leased at any time by the Partnership or any
of its Affiliates (or any such predecessor in interest), any Release or
threatened Release of any Hazardous Substance by the Partnership or any of its
Affiliates (or any such predecessor in interest) at or from any such site or
facility, or any claim or Loss relating to any Environmental Law in connection
with the Xxxxx Project including without
-15-
limitation any such claim or Loss, arising as a result of operations,
environmental contamination or any Release or threatened Release that shall
occur during any period when the Administrative Agent or the Primary Insurer
shall be in possession of any such site or facility following the exercise by
the Primary Insurer or the Administrative Agent of any of its rights and
remedies under this Agreement or any of the Security Documents, that is related
to the operations, compliance, environmental contamination or any Release or
threatened Release occurring prior to such period or relates to conditions
previously in existence, or of practices employed by the Partnership or any of
its Affiliates, at such site or facility and the Partnership waives any rights
it may have under any Environmental Law relating to this indemnity or the
Primary Insurer or the Administrative Agent.
10.11 Amendments, etc. Except as otherwise expressly provided in
this Agreement, any provision of this Agreement may be amended, modified or
supplemented only by an instrument in writing signed by each of the parties
hereto, and any provision of this Agreement may be waived by the Primary Insurer
or by the Administrative Agent, as applicable.
10.12 Successors and Assigns. This Agreement shall be binding
upon, and inure to the benefit of, the parties hereto and their respective
successors and permitted assigns.
10.13 Survival. The obligations of the Partnership and the
Borrower under Sections 10.07 and 10.10 shall survive the termination of this
Agreement in accordance with Section 10.03. This Agreement shall continue to be
effective or be reinstated, as the case may be, if at any time payment and
performance of the Partnership's or the Borrower's obligations under this
Agreement, or any part thereof, is, pursuant to applicable law, rescinded or
reduced in amount, or must otherwise be restored or returned by the
Administrative Agent or the Oil Payment Insurer. In the event that any payment
or any part thereof is so rescinded, reduced, restored or returned, such
obligations shall be reinstated and deemed reduced only by such amount paid and
not so rescinded, restored or returned.
10.14 Covered Taxes. The Partnership agrees that, whether or not
funds are paid under the Guaranty Insurance Policy or the Debt Service Reserve
Insurance Guarantee:
(a) All payments of principal of and interest on the Oil Payment
Reimbursement Payments and all other amounts payable on, under or in
respect of this Agreement, the Oil Payment Note, the Guaranty Insurance
Policy or the Debt Service Reserve Insurance Guarantee by the Partnership
or the Borrower, as the case may be, to the Administrative Agent or the
Primary Insurer, including without limitation amounts payable by the
Partnership or the Borrower under clause (b) of this Section 10.14 and
under Section 10.10, shall be made free and clear of, and without deduction
or withholding for, any and all present and future Taxes imposed, assessed,
levied or collected by any Governmental Authority, under or in respect of
this Agreement, the Oil Payment Note, the Guaranty Insurance Policy or the
Debt Service Reserve Insurance Guarantee, the execution, registration,
enforcement, notarization or other formalization of any thereof, and any
payments of principal, interest, charges, fees, commissions or other
amounts made on, under or in respect thereof ("Covered Taxes"), all of
which shall be paid by the Borrower, for its own account, prior to the date
on
-16-
which penalties attach thereto. In addition, the Partnership and Borrower
will pay any and all excise taxes related to payments under this Agreement,
the Oil Payment Note or the Debt Service Reserve Insurance Guarantee.
(b) The Partnership shall indemnify and hold harmless the
Administrative Agent and the Primary Insurer against, and promptly
reimburse the Administrative Agent and the Primary Insurer on demand for,
any Covered Taxes paid by the Administrative Agent or the Primary Insurer
and any Loss that the Administrative Agent or the Primary Insurer may incur
at any time arising out of or in connection with any failure of the
Partnership to make any payment of Covered Taxes when due, other than any
interest, penalties or legal fees arising from the failure of the Borrower
to pay such Covered Taxes due to the gross negligence or willful misconduct
of the Administrative Agent or the Primary Insurer.
(c) In the event that the Partnership is required by applicable law
to deduct or withhold Covered Taxes from any amounts payable on, under or
in respect of this Agreement, the Oil Payment Note (including without
limitation any amounts payable under clause (b) of this Section 10.14), the
Guaranty Insurance Policy or the Debt Service Reserve Insurance Guarantee,
the Partnership shall pay the Administrative Agent and the Primary Insurer
such additional amount as may be required, after the deduction or
withholding of any Covered Taxes, to enable the Person entitled to such
amount to receive from the Partnership or the Borrower an amount equal to
the full amount stated to be payable under this Agreement, the Oil Payment
Note or the Debt Service Reserve Insurance Guarantee.
(d) The Partnership shall furnish to the Administrative Agent original
or certified copies of tax receipts in respect of any withholding of
Covered Taxes required under this Section 10.14 within 30 days after the
date of each payment under this Agreement as to which such withholding is
required, and the Partnership shall promptly furnish to the Administrative
Agent any other information, documents and receipts that the Administrative
Agent or the Primary Insurer may from time to time require to establish to
its satisfaction that full and timely payment has been made of all Covered
Taxes required to be paid under this Section 10.14.
10.15 Payments. Any and all payments to be made by the Partnership
or the Borrower under this Agreement or the Debt Service Reserve Insurance
Guarantee to the Primary Insurer or the Administrative Agent shall be made by
wire transfer, in immediately available funds in Dollars, to account no. 0000000
(sort code 18-50-08, swift code CITI XX 0X) maintained by Winterthur
International Insurance Company Limited with Citibank, N.A., Xxxxxxxx Xxxxx, 000
Xxxxxx, Xxxxxx XX0X 0XX, Xxxxxxx, or to such other account as may be specified
from time to time by the Primary Insurer or the Administrative Agent, as the
case may be.
10.16 No Direct Right Against Reinsurer. Each of the Partnership
and the Borrower hereby acknowledges and agrees that it shall have no direct
right or recourse against any of the reinsurers that may from time to time
reinsure all or part of the insurance coverage provided by the
-17-
Guaranty Insurance Policy or the Debt Service Reserve Insurance Guarantee, and
that such reinsurers' rights as Secured Parties under the Financing Documents do
not expand the role and function of such reinsurers beyond their role and
function as reinsurers.
-18-
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed.
PORT XXXXXX XXXXX COMPANY L.P.
By: SABINE RIVER HOLDING CORP.,
GENERAL PARTNER
By: /s/ Xxxxx X. Xxxxx
----------------------------------------
Name: Xxxxx X. Xxxxx
Title: Executive Vice President and
Chief Financial Officer
SABINE RIVER HOLDING CORP.
By: /s/ Xxxxx X. Xxxxx
----------------------------------------
Name: Xxxxx X. Xxxxx
Title: Executive Vice President and
Chief Financial Officer
NECHES RIVER HOLDING CORP.
By: /s/ Xxxxx X. Xxxxx
----------------------------------------
Name: Xxxxx X. Xxxxx
Title: Executive Vice President and
Chief Financial Officer
PORT XXXXXX FINANCE CORP.
By: /s/ Xxxxx X. Xxxxx
----------------------------------------
Name: Xxxxx X. Xxxxx
Title: Executive Vice President and
Chief Financial Officer
-19-
WINTERTHUR INTERNATIONAL INSURANCE
COMPANY LIMITED,
as Primary Insurer
By: /s/ Xxxxxx McCusuck
----------------------------------------
Name: Xxxxxx McCusuck
Title: Property Underwriting Manager
WINTERTHUR INTERNATIONAL INSURANCE
COMPANY LIMITED,
as Administrative Agent for and on behalf of
the Oil Payment Insurers
By: /s/ Xxxxxx XxXxxxxx
----------------------------------------
Name: Xxxxxx XxXxxxxx
Title: Property Underwriting Manager
Appendix A
to Reimbursement Agreement
DEFINITIONS
In this Appendix, the Reimbursement Agreement and the Exhibits thereto and
in any other document that references this Appendix, the following terms shall
have the meanings assigned below (the singular includes the plural and vice
versa) (unless otherwise specified, section references in this Appendix are to
sections of the Reimbursement Agreement):
"Adjustment Amount" has the meaning specified in clause (a) of Section
5.04.
"Administrative Agent" means Winterthur International Insurance Company
Limited, in its capacity as Administrative Agent for the Oil Payment Insurers.
"Agreement" means this Reimbursement Agreement (including the Appendix and
Exhibits thereto), as the same may be amended or supplemented in accordance
with its terms and in effect from time to time.
"Annual Policy Period" has the meaning set forth in clause (a) of Section
5.02.
"Applicable Margin" means 475 basis points.
"Bank Senior Loan Agreement" means the Bank Senior Loan Agreement, dated as
of the date hereof, among Port Xxxxxx Finance Corp., Port Xxxxxx Xxxxx Company
L.P., Sabine River Holding Corp., Neches River Holding Corp., the Bank Senior
Lenders party thereto and Deutsche Bank AG, New York Branch, as Bank Lenders
Administrative Agent, as the same may be amended or supplemented in accordance
with its terms and in effect from time to time.
"Borrower" means Port Xxxxxx Finance Corp.
"Claim" has the meaning specified in the Guaranty Insurance Policy.
"Common Security Agreement" means the Common Security Agreement, dated as
of the date hereof, among Port Xxxxxx Finance Corp., Port Xxxxxx Xxxxx Company
L.P., Sabine River Holding Corp., Neches River Holding Corp., Winterthur
International Insurance Company Limited, as Oil Payment Insurers
Administrative Agent, Bankers Trust Company, as Collateral Trustee, Deutsche
Bank AG, New York Branch, as Bank Senior Lenders Administrative Agent, HSBC
Bank USA, as Capital Markets Trustee, and Bankers Trust Company, as Depositary
Bank, as the same may be amended or supplemented in accordance with its terms
and in effect from time to time.
A-1
"Completion", for purposes of this Agreement only, means that (a)
Mechanical Completion has been achieved and (b) construction of the Utility
Assets (as defined in the Hydrogen Supply Agreement) has been completed in
accordance with Section 1.2 of the Hydrogen Supply Agreement.
"Coverage End Date" has the meaning specified in clause (b) of Section
5.02.
"Coverage Start Date" has the meaning specified in clause (a) of Section
5.03.
"Covered Taxes" has the meaning specified in clause (a) of Section 10.14.
"Debt Service Reserve Insurance Guarantee" means the Debt Service Reserve
Insurance Guarantee, Policy No. GB 00002141 OT 99A, dated as of the date
hereof, issued by the Primary Insurer for the benefit of the Collateral
Trustee.
"Debt Service Reserve Payments" means all funds disbursed by the Primary
Insurer under the Debt Service Reserve Insurance Guarantee.
"Defense" means any and all defenses that may be available to the
Partnership under or in connection with the Long-Term Oil Supply Agreement,
including without limitation any defenses resulting from, or in connection
with, the Maya delivered under the Long-Term Oil Supply Agreement not
satisfying the characteristics set forth in Annex 3 thereto.
"Defense Notice" has the meaning set forth in clause (b) of Section 4.02.
"Demand for Payment" has the meaning set forth in the Guaranty Insurance
Policy.
"DSRIG Guarantors" means the Partnership and the Partners.
"Full Coverage Start Date" has the meaning specified in clause (b) of
Section 5.0 3.
"Full Coverage Start Notice" has the meaning specified in clause (b) of
Section 5.03.
"General Partner" means Sabine River Holding Corp.
"Guaranty Insurance Policy" means the Guaranty Insurance Policy, Policy No.
GB 00002140 OT 99A, dated as of the date hereof, issued by the Primary Insurer
for the benefit of PMI.
"Hydrogen Supply Agreement" means the Hydrogen Supply Agreement, dated
August 1, 1999, between the Hydrogen Supplier and the Partnership.
"Insured Obligation" has the meaning specified in the Guaranty Insurance
Policy.
A-2
"Interest Period" has the meaning set forth in Section 2.02.
"LIBOR" shall mean, with respect to any Oil Payment Reimbursement
Obligation or any other amount payable under this Agreement that is not paid
when due, for the Interest Period therefor, the interest rate per annum for
deposits in Dollars, if any, for a period equal to (or if there is no equal,
then most comparable to) such Interest Period which appears on the page
designated Page 3750 on the Telerate Service (or such other page as may
replace that page on that service for the purpose of displaying the British
Bankers Association Interest Settlement Rate) at or about 11:00 a.m., London
time, on the date two Eurodollar Business Days before and for value on the
first day of such Interest Period or Default Interest Period. If such a rate
does not appear on the page designated Page 3750 on the Telerate Service (or
such other page) as may replace that page on that service for the purpose of
displaying the British Bankers Association Interest Settlement Rate for any
relevant Interest Period, LIBOR for each Oil Payment Reimbursement Obligation
or other amount outstanding during such Interest Period shall mean the
interest rate per annum determined by the Administrative Agent to be equal to
the arithmetic mean (rounded upward, if necessary, to the nearest fifth
decimal place) of the rates per annum for Dollar deposits for a period equal
to (or, if there is no equal, then most comparable to) such Interest Period
which appear on the Reuters Screen LIBO Page at or about 11:00 a.m., London
time, on the date two Eurodollar Business Days prior to the first day of such
Interest Period, provided that, if no such rate appears on the Reuters Screen
LIBO Page for any relevant Interest Period or Default Interest Period, LIBOR
for each Bank Senior Loan or other amount outstanding during such Interest
Period (a) shall mean the interest rate per annum determined by the
Administrative Agent to be equal to the average (rounded upwards to the
nearest fifth decimal place, if such average is not such a decimal) of the
interest rates per annum (as provided by the Reference Banks to the
Administrative Agent) at which deposits in Dollars are offered by the
principal office of each of the Reference Banks in London, England to prime
banks in the London interbank market at or about 11:00 a.m., London time (or
as soon thereafter as practicable), on the date two Eurodollar Business Days
before the first day of such Interest Period in immediately available funds in
an amount substantially equal to the aggregate principal amount of the Bank
Senior Loans or other amounts to be outstanding during such Interest Period
and for a period equal to (or if there is no equal, then most comparable to)
such Interest Period; and (b) shall be determined by the Administrative Agent
pursuant to clause (a) above (i) on the basis of applicable rates furnished to
and received by the Administrative Agent from the Reference Banks two
Eurodollar Business Days before the first day of such Interest Period,
subject, however, to the provisions of Section 5.02, or (ii) if any of the
Reference Banks shall be unable or otherwise fails to provide a rate for the
purposes of determining LIBOR as hereinabove provided, on the basis of the
rate or rates quoted by the remaining Reference Banks.
"Limit of Liability" has the meaning specified in the Guaranty Insurance
Policy.
"Limited Partnership" means Neches River Holding Corp.
A-3
"Loss" shall mean any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses, including without
limitation interest and legal fees, or disbursements of any kind or nature
whatsoever.
"Maya" has the meaning specified in the Long-Term Oil Supply Agreement.
"Oil Payment" means any and all amounts paid by the Primary Insurer to PMI
on behalf of the Partnership under the Guaranty Insurance Policy.
"Oil Payment Insurers" means the Primary Insurer and the several
Reinsurers.
"Oil Payment Note" has the meaning set forth in clause (a) of Section 2.04.
"Oil Payment Reimbursement Obligation" has the meaning set forth in clause
(a) of Section 2.01.
"Outside Coverage Start Date" means March 1, 2001 (or October 1, 2001, if
all of the conditions for an extension to such date set forth in clause (n) of
Section 10.01 of the Common Security Agreement have been satisfied, provided
that, at the Partnership's request, such date may be further extended to a
date no later than March 1, 2002 if Majority Secured Parties so agree.
"Partial Coverage Start Notice" has the meaning specified in Section
5.03(a).
"Participant" has the meaning specified in clause (b) of Section 10.02.
"PMI" means P.M.I. Comercio Internacional, S.A. de C.V., in its capacity as
beneficiary under the Guaranty Insurance Policy.
"Partners" means the General Partner and the Limited Partner.
"Partnership" means Port Xxxxxx Xxxxx Company L.P.
"Premium" has the meaning specified in clause (a) of Section 5.04.
"Primary Insurer" means Winterthur International Insurance Company Limited,
in its capacity as Insurer under the Guaranty Insurance Policy.
"Reference Banks" means Citibank, N.A., X.X. Xxx 00, 000 Xxxxxx, Xxxxxx
XX0X 0XX, Xxxxxxx, and Barclays Bank Plc, 00 Xxxxxxx Xxxxxx, Xxxxxx, XX0X 0XX,
Xxxxxxx, or such substitute banks designated as such by the Administrative
Agent from time to time to provide the quotations required for the
determination of LIBOR, and being the principal London offices of each such
banks.
A-4
"Reimbursement Notice" has the meaning set forth in Section 2.03.
"Reinsurers" means the several reinsurers that may from time to time
provide reinsurance with respect to the Guaranty Insurance Policy and the Debt
Service Reserve Insurance Guarantee.
"Shipment" has the meaning specified in the Guaranty Insurance Policy.
"Taxes" has the meaning specified in clause (a) of Section 10.15.
"Termination Notice" means a notice delivered under the Guaranty Insurance
Policy, substantially in the form of Exhibit C thereto.
A-5
EXHIBIT I
to Reimbursement Agreement
Form of Oil Payment Note
OIL PAYMENT NOTE
New York, New York
U.S. Dollars $150,000,000 __________, 1999
FOR VALUE RECEIVED, PORT XXXXXX XXXXX COMPANY L.P., a limited partnership
organized under the laws of the State of Delaware (the "Partnership"), SABINE
RIVER HOLDING CORP., a corporation organized under the laws of the State of
Delaware (the "General Partner"), and NECHES RIVER HOLDING CORP., a corporation
organized under the laws of the State of Delaware (the "Limited Partner" and,
together with the General Partner, the "Partners"), hereby unconditionally
promise, in accordance with the Reimbursement Agreement, dated as of August 19,
1999 (as amended, modified or supplemented from time to time, the "Reimbursement
Agreement"), among the Partnership, Port Xxxxxx Xxxxx Company L.P., the
Partners, Winterthur International Insurance Company, as Primary Insurer (the
"Primary Insurer"), and Winterthur International Insurance Company Limited, as
Administrative Agent for and on behalf of the Oil Payment Insurers, to pay to
the order of the Primary Insurer at the principal office of
__________________________ located at ________________, _____________,
_________, in lawful money of the United States and in immediately available
funds, the principal amount of (a) one hundred-fifty million U.S. Dollars
($150,000,000) or, if less, (b) the aggregate unpaid principal amount of all Oil
Payments made by the Oil Payment Insurer to PMI pursuant to Article I of the
Guaranty Insurance Policy, dated as of August 19, 1999 (as amended, modified or
supplemented from time to time, the ("Guaranty Insurance Policy"), issued by the
Primary Insurer to PMI. The Partnership and the Partners also promise to pay
interest on the unpaid principal amount of each Oil Payment from the date such
Oil Payment is made until such Oil Payment is paid in full, in like money at
such office at the rate or rates per annum and on the date or dates specified in
the Reimbursement Agreement.
The holder of this Oil Payment Note is authorized to endorse on the
schedule annexed hereto and made a part hereof or on a continuation thereof
which shall be attached hereto and made a part hereof the date and amount of
each Oil Payment made pursuant to Article I of the Guaranty Insurance Policy,
the date and amount of each payment or prepayment of principal thereof and the
length of each Interest Period with respect thereto, which endorsement shall
constitute prima facie evidence of the accuracy of the information endorsed,
provided that any failure by the holder of this Oil Payment Note to make such an
endorsement or any error in such endorsement shall in no manner affect the
validity or enforceability of the obligations of the Partnership and the
Partners to make payments of principal and interest in accordance with the terms
of this Oil Payment Note and the Reimbursement Agreement.
I-1
All parties hereto, whether as makers, endorsers or otherwise, severally
waive diligence, presentment, demand, protest and notice of any kind whatsoever.
The failure or forbearance by the holder to exercise any of its rights under
this Oil Payment Note in any particular instance shall in no event constitute a
waiver thereof.
This Oil Payment Note is one of the Oil Payment Notes referred to in, and
is entitled to the benefits of, the Reimbursement Agreement, which, among other
things, contains provisions for the acceleration of the maturity of the Oil
Payments upon the happening of certain events, for Mandatory Prepayments of the
principal of the Oil Payments and for the amendment or waiver of certain
provisions of the Reimbursement Agreement or this Oil Payment Note, all upon the
terms and conditions therein specified. Capitalized terms used and not otherwise
defined herein shall have the meanings ascribed thereto in the Reimbursement
Agreement.
Upon the taking of an Enforcement Action (as defined in the Common Security
Agreement referred to in the Reimbursement Agreement) the principal of, and
interest on, this Oil Payment Note may be declared to be forthwith due and
payable in the manner, upon the conditions and with the effect provided in the
Reimbursement Agreement and in the Common Security Agreement.
This Oil Payment Note may be prepaid as provided in the Reimbursement
Agreement and the Common Security Agreement.
The Partnership agrees to pay, exclusively in lawful money of the United
States of America, costs of collection and attorneys' fees in case default
occurs in the payment of this Oil Payment Note.
THIS OIL PAYMENT NOTE HAS BEEN DELIVERED IN NEW YORK, NEW YORK AND SHALL BE
DEEMED TO BE A CONTRACT MADE UNDER, GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK.
This Oil Payment Note is not negotiable and interests herein may be
assigned only upon the terms and conditions specified in the Reimbursement
Agreement.
I-2
IN WITNESS WHEREOF, this Oil Payment Note has been duly executed by the
undersigned as of the date first written above.
PORT XXXXXX XXXXX COMPANY L.P.
By: SABINE RIVER HOLDING CORP.,
GENERAL PARTNER
By: _________________________________
Name:
Title:
SABINE RIVER HOLDING CORP.
By: _________________________________
Name:
Title:
NECHES RIVER HOLDING CORP.
By: _________________________________
Name:
Title:
I-3
OIL PAYMENTS AND PRINCIPAL PAYMENTS
------------------------------------------------------------------------------------------------------------------------
Amount of Oil Interest Amount of Principal Amount of Unpaid Notation
Date Payments Made Period Repaid or Prepaid Principal Balance Made By
------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------
I-4
Exhibit II
to Reimbursement Agreement
REIMBURSEMENT NOTICE
Port Xxxxxx Xxxxx Company L.P.
0000 X. Xxxxxxx Xxxxx, Xxxxxx Xx. 00
Xxxx Xxxxxx, XX 00000
Attention: Legal Department
The undersigned, Winterthur International Insurance Company Limited, as
Administrative Agent for and on behalf of the Oil Payment Insurers, hereby
certifies to Port Xxxxxx Xxxxx Company L.P. (the "Partnership"), with reference
to that certain Reimbursement Agreement, dated as of August 19, 1999 (the
"Agreement"), among the Partnership, Winterthur International Insurance Company
Limited, as Primary Insurer (the "Insurer"), and the undersigned, as follows:
1. The undersigned has made an Oil Payment to PMI in an amount of US$______
(the "Payment").
2. Annexed hereto are copies of (a) the Demand for Payment (the "Demand for
Payment") by PMI based upon which the Payment was made, (b) the xxxx[s] of
lading and invoice[s] [and the statement of PMI issued pursuant to Article 8.1
of the Long-Term Oil Supply Agreement] with respect to the Shipments to which
the Demand for Payment relates and (c) a certificate of an officer of PMI
confirming the accuracy and authenticity of the Demand for Payment and the
accompanying documents.
We request that you satisfy the Oil Payment Reimbursement Obligation
corresponding to the Payment by transferring the principal amount thereof, and
any interest payable thereon in accordance with the terms of the Reimbursement
Agreement, to [specify account details].
II-1
Capitalized terms used and not otherwise defined herein shall have the meanings
assigned to such terms in, or by reference in, the Agreement.
WINTERTHUR INTERNATIONAL
INSURANCE COMPANY LIMITED
By: _________________________
Name:
Title:
By: _________________________
Name:
Title:
II-2
