EXHIBIT 10.3
CONSENT AND AGREEMENT
THIS CONSENT AND AGREEMENT (this "Consent") is entered into as of this
13th day of July 2004, by and among XXXXX CORPORATION, a Delaware corporation
("HOC"), XXXXX LOGISTIC SERVICES, L.L.C., a Delaware limited liability company
("Logistic"), HEP LOGISTICS HOLDINGS, L.P., a Delaware limited partnership
("Holdings"), NAVAJO PIPELINE CO., L.P., a Delaware limited partnership
("Navajo"), NAVAJO REFINING COMPANY, L.P., a Delaware limited partnership
("Navajo Refining"), XXXXX REFINING & MARKETING COMPANY, a Delaware corporation
("Xxxxx Refining"), XXXXX ENERGY PARTNERS, L.P., a Delaware limited partnership
("HEP"), HEP LOGISTICS GP, L.L.C., a Delaware limited liability company (the
"General Partner"), HEP OPERATING COMPANY, L.P., a Delaware limited partnership
("Borrower"), certain other subsidiaries of Borrower who have executed this
Consent (the "Borrower Subsidiaries"), and UNION BANK OF CALIFORNIA, N.A., as
administrative agent for itself and certain other Banks ( as defined below), as
more fully set forth in the Credit Agreement (as defined below) ("Administrative
Agent").
RECITALS:
A. Certain Persons in the HOC Group (as defined below) are entering into
that certain Omnibus Agreement dated as of July 13, 2004 (as amended or
otherwise modified from time to time, the "Omnibus Agreement"), and certain
Persons in the HOC Group are entering into that certain Pipelines and Terminals
Agreement to be dated as of July 13, 2004 (as amended or otherwise modified from
time to time, the "Pipelines Agreement").
B. Reference is made to that certain Credit Agreement dated as of July 7,
2004 (as amended or otherwise modified from time to time, the "Credit
Agreement"), among Borrower, the banks party thereto from time to time (the
"Banks"), the Banks issuing letters of credit thereunder from time to time (the
"Issuing Banks") and the Administrative Agent.
C. The Security Documents (as defined in the Credit Agreement) require
HEP, Borrower, and each of the Borrower Subsidiaries (collectively, the
"Assigning Parties") to assign to Administrative Agent, as security for the
payment and performance of the Obligations, for the benefit of the holders of
the Obligations (collectively, the "Secured Parties") all of the right, title,
and interest of such Persons in, under, and to the Affected Agreements (as
defined below) (collectively, the "Assigned Rights").
D. The Administrative Agent, the Issuing Banks, and the Banks, as a
condition to making the extensions of credit under the Credit Documents, have
required that each Person in the HOC Group agree to the undertakings set forth
in this Consent.
AGREEMENT:
NOW, THEREFORE, in consideration of the foregoing and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged and confessed, the parties hereto agree as follows:
1. DEFINITIONS. Certain capitalized terms used in this Consent are
specifically defined herein. Unless otherwise indicated, capitalized terms not
specifically defined in this
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Consent shall have the meanings assigned to such terms in the Credit Agreement.
As used herein, the following terms have the meanings specified below:
(a) The term "Affected Agreements" means (A) the Omnibus Agreement,
(B) the Pipelines Agreement, and (C) each New Agreement.
(b) The term "Bankruptcy Code" means the United States Bankruptcy
Code, 11 U.S.C. Sections 101, et. seq.
(c) The term "HOC Group" means, collectively, HOC, Logistic,
Holdings, Navajo, Navajo Refining, Xxxxx Refining, the General Partner,
and the Assigning Parties.
(d) The term "transfer" means any mode, direct or indirect, absolute
or conditional, voluntary or involuntary, of disposing of or parting with
property or with an interest in property.
2. CONSENT. Each Person in the HOC Group hereby irrevocably consents:
(a) To the assignment of the Assigned Rights by the Assigning
Parties to the Administrative Agent for the benefit of the Administrative
Agent and each of the Secured Parties as set forth and subject to the
terms and provisions of the Security Documents;
(b) To the assignment of the Assigned Rights by the Administrative
Agent to any Person that may become a successor Administrative Agent under
the Credit Agreement; and
(c) To any assignment, in whole or in part, of any Assigned Rights
(including the right to become a party under the Affected Agreements in
the place and stead of the Assigning Parties) to any Person (a "Permitted
Transferee") in connection with the exercise by Administrative Agent of
its rights and remedies under, and as set forth in and subject to the
terms and provisions of, any Credit Document following the occurrence and
during the continuance of an Event of Default if, prior to or simultaneous
with any such assignment, the applicable Permitted Transferee shall have
assumed in writing all duties and obligations of the applicable Assigning
Parties under the applicable Affected Agreements and/or such Assigned
Rights, as applicable, in effect as of, and/or arising on and/or after the
date of such assumption but not before.
3. REPRESENTATIONS AND WARRANTIES. Each Person in the HOC Group hereby
represents and warrants to Administrative Agent as follows:
(a) Each of this Consent and the other Affected Agreements (to the
extent a party thereto) have been duly executed and delivered by it, and
each such instrument is its legal, valid, and binding obligation,
enforceable against it in accordance with its terms, except as such
enforceability may be limited by any applicable bankruptcy, insolvency,
reorganization, or similar law affecting creditors' rights generally and
general equitable principles.
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(b) It is not in default under any of its material obligations under
any Affected Agreement. To its knowledge, no other party to any Affected
Agreement is in default under any of such party's material obligations
thereunder.
(c) As of the date of this Consent, this Consent, the Transfer
Documents, the Omnibus Agreement, and the Pipelines Agreement constitute
and include all Material Contracts entered into by it (to the extent a
party thereto) with respect to and/or in connection with the transactions
described in the Omnibus Agreement and the Pipelines Agreement.
(d) As of the date of this Consent, HOC has procured policies of
insurance providing insurance coverage for the benefit of the Borrower and
Borrower Subsidiaries in the forms and amounts required pursuant to
Section 5.02(a) of the Credit Agreement; HOC is the "named insured" under
such insurance policies (other than the business interruption insurance
policies of the Borrower for which the Borrower is the named insured); As
such "named insured", HOC is the sole party entitled to (i) submit or make
a proof of loss, settle, and adjust any claims under such insurance
policies, and (ii) receive notices of cancellation of such policies.
Administrative Agent is named as "loss payee" and "additional insured", as
applicable, on each of such policies as well as the Borrower's business
interruption insurance policies.
4. REGARDING THE AFFECTED AGREEMENTS. Each Person in the HOC Group and the
Administrative Agent hereby agree as follows:
(a) Upon any transfer described in Section 2 of this Consent, and
subject to the terms thereof, the applicable Permitted Transferee shall
succeed to all Assigned Rights of the applicable Assigning Parties so
transferred to the same extent as if such Permitted Transferee were named
in place of such Assigning Parties in the applicable Affected Agreements.
(b) Upon prior written notice to any applicable Assigning Party,
Administrative Agent and its assignee or designee, including any Permitted
Transferee, shall have the right, but not the obligation, to pay all sums
due from any Assigning Party and to perform any other act, duty, or
obligation of the Assigning Parties pursuant to any Affected Agreement at
any time. Nothing in this Consent shall require or obligate Administrative
Agent or such assignee or designee to cure any default of any Assigning
Party under any Affected Agreement or to make any such payment or perform
any such act, duty, or obligation of the Assigning Parties thereunder.
(c) Nothing in this Consent shall be construed to relieve any
Assigning Party of any duty or obligation under any Affected Agreement.
(d) If any Person in the HOC Group (other than an Assigning Party)
delivers any written notice of default or breach (each, a "Breach") to any
Assigning Party pursuant to any Affected Agreement, such Person shall
promptly give a Notice to Administrative Agent, together with a true,
correct, and complete copy of such notice of a Breach which notice shall
identify with reasonable specificity the event, occurrence, or omission
that such Person believes constitutes such Breach. In addition, prior to
any exercise by any
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Person in the HOC Group of any remedies it may have under such Affected
Agreement, such Person shall afford the Administrative Agent a period of
twenty (20) days (after prior written notice to Borrower) to cure any such
Breaches, such period to begin simultaneously with the expiration of any
applicable cure period under the applicable Affected Agreement.
(e) In the event that either (i) any Affected Agreement is rejected,
in whole or in part, by a trustee or debtor-in-possession in any
bankruptcy or insolvency proceeding regarding any Assigning Party or (ii)
any Affected Agreement is deemed, in whole or in part, to be a contract to
extend "financial accommodations" within the meaning of Section 365 of the
Bankruptcy Code (each a "bankruptcy event"), and any order regarding such
bankruptcy event has not been stayed, then within sixty (60) days after
the occurrence of such bankruptcy event, the Administrative Agent or its
assignee or designee, including any Permitted Transferee, may give a
Notice to HOC stating that it is legally authorized to perform all of the
obligations of the applicable Assigning Party pursuant to this Consent and
that, upon execution and delivery of a New Agreement, it will assume and
perform in full all such obligations under such Affected Agreement. Within
twenty (20) Business Days of its receipt of such a Notice, HOC shall, and
shall cause each Person in the HOC Group not affected by such bankruptcy
event to, and the Administrative Agent and/or its assignee or designee
shall (unless it shall have withdrawn such Notice), execute and deliver to
the Administrative Agent or to such assignee or designee, a new agreement
(a "New Agreement") that shall replace, as nearly as possible, that
portion of the Affected Agreement as is affected by the applicable
bankruptcy event. Such New Agreement shall be for the then-remaining term
of such Affected Agreement and shall contain substantially the same terms
and conditions as such instrument, taking into account any performance by
the affected Assigning Party prior to such bankruptcy event.
(f) No Person in the HOC Group will, without the prior written
consent of the Majority Banks, amend, modify, or supplement any Affected
Agreement, provided, however, that such amendments, modifications, or
supplements may be made without the consent of the Majority Banks if such
amendments, modifications, or supplements (i) individually or in the
aggregate, are not materially adverse to the rights of the Administrative
Agent or the Banks and (ii) individually or in the aggregate, do not
materially decrease the economic benefit that the Assigning Parties would
have otherwise received pursuant such Affected Agreement.
(g) Each Person in the HOC Group hereby expressly agrees,
acknowledges, and affirms that the right of first refusal in favor of HOC
granted by the Assigning Parties pursuant to Article VI of the Omnibus
Agreement shall not apply in any respect to any transfer described in
Section 2 of this Agreement.
(h) At any time and from time to time, subject to the terms and
conditions of the Credit Documents, Administrative Agent may give a Notice
to HOC directing HOC to pay (or cause the payment of within fifteen (15)
days of receipt) any and all amounts payable by any Person in the HOC
Group to any Assigning Party pursuant to any Affected Agreement directly
to Administrative Agent or to such other Person as may be specified by
Administrative Agent, in each case in accordance with written instructions
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contained in a Notice given to HOC by Administrative Agent. Delivery of
such Notice to HOC shall constitute delivery of such Notice to all other
Persons in the HOC Group, and all such other Persons shall be bound by
such Notice.
5. INSURANCE PROVISIONS.
(a) Within ten (10) Business Days of a material loss, damage,
destruction, or other casualty affecting any Assigning Party or its
property (collectively, a "claim"), HOC shall give a Notice to
Administrative Agent describing the claim (a "Claim Notice"). As soon as
reasonably practicable after the date the Claim Notice is deemed received
pursuant to the terms hereof, HOC shall give a Notice to Administrative
Agent which shall contain a copy of a proof of loss with respect to such
claim that is addressed to the applicable insurance company, references
the applicable insurance policy, requests that any proceeds paid by such
insurance company be delivered by a check made jointly payable to HOC and
Administrative Agent, and contain such other information as is required
for such proof of loss to be properly submitted (a "Proof of Loss
Notice"). Within ten (10) Business Days from the date the Proof of Loss
Notice is deemed received by the Administrative Agent pursuant to the
terms hereof , HOC shall submit such proof of loss to the applicable
insurance company.
(b) Within ten (10) Business Days after HOC's receipt of any
insurance proceeds paid in connection with any claim, HOC shall give a
Notice to Administrative Agent stating that HOC has received such
insurance proceeds, specifying the amount of such insurance proceeds, and
identifying the proof of loss to which such insurance proceeds relate and
requesting Administrative Agent to endorse such check (the "Receipt of
Proceeds Notice"). As soon as reasonably practicable after receiving such
check, the Administrative Agent shall, in accordance with the terms of the
Credit Agreement, endorse such check and either return it to the Borrower
or apply such proceeds to the Obligations.
(c) In the event that any insurance proceeds are paid to any Person
in the HOC Group in violation of the foregoing or in the event any Person
in the HOC Group takes any action with respect to such insurance proceeds
inconsistent with the foregoing, all Persons in the HOC Group holding such
proceeds shall hold such proceeds in trust for Administrative Agent,
segregate such proceeds from all other funds of such Person or Persons,
and deliver such proceeds to the Administrative Agent for further
disbursement in accordance with the requirements of the Credit Agreement.
6. NOTICES.
(a) Each party giving or making any notice, request, demand, or
other communication (each, a "Notice") pursuant to this Consent shall give
such Notice in writing and shall use one of the following methods of
delivery, each of which, for purposes of this Consent, constitutes a
writing: personal delivery, Registered or Certified Mail (in each case,
return receipt requested and postage prepaid), nationally recognized
overnight courier (with all fees prepaid), or facsimile.
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(b) Any party giving a Notice shall address such Notice to the
receiving party (the "Addressee") at the address and to the individual
listed on Schedule I attached to this Consent or at such other address
and/or to such other individual as previously designated by the Addressee
in a Notice.
(c) Except as specifically provided elsewhere in this Consent, a
Notice is effective only if the party giving or making such Notice has
complied with Sections 6(a) and 6(b) and if the Addressee has received the
Notice. A Notice is deemed to have been received as follows:
(i) If a Notice is delivered (A) in person, upon receipt as
indicated by the date on the signed receipt; (B) by Registered or
Certified Mail, upon the earlier of (1) receipt as indicated by the
date on the signed receipt or (2) five (5) days after such Notice is
deposited in the mail; (C) by nationally recognized overnight
courier, upon receipt as indicated by the date on the signed
receipt; and (D) by facsimile, upon receipt by the party giving or
making such Notice of an acknowledgment or transmission report
generated by the machine from which the facsimile was sent
indicating that the facsimile was sent in its entirety to the
Addressee's facsimile number.
(ii) If the Addressee rejects or otherwise refuses to accept a
Notice, or if the Notice cannot be delivered because of a change in
address for which no Notice was given to the party attempting to
give or make such Notice, then upon the rejection, refusal, or
inability to deliver.
(iii) Notwithstanding the foregoing, any Notice received after
5:00 P.M. (est) on a Business Day, or on a day that is not a
Business Day, is deemed received at 9:00 A.M. (est) on the next
Business Day.
7. COUNTERPARTS. The parties hereto may execute this Consent in any number
of duplicate originals, each of which constitutes an original, and all of which,
collectively, constitute only one agreement. The parties may execute this
Consent in counterparts, each of which constitutes an original, and all of
which, collectively, constitute only one agreement. Delivery of an executed
counterpart signature page by facsimile is as effective as executing and
delivering this Consent in the presence of the other parties to this Consent.
8. SUCCESSORS AND ASSIGNS. This Consent shall be binding upon each Person
in the HOC Group, and each of their respective successors, transferees, and
assigns and shall inure, together with the rights of Administrative Agent
hereunder, to the benefit of and be binding upon, Administrative Agent and its
successors, transferees, and assigns.
9. ASSIGNMENT AND DELEGATION. Except as expressly permitted herein and
except for assignments and participations by the Administrative Agent and the
Banks permitted by the terms of the Credit Agreement, no party may assign any of
its rights under this Consent, whether any such assignment is voluntary,
involuntary, by merger, consolidation, dissolution, operation of law, or any
other manner except with the prior written consent of the other parties which
consent shall not be unreasonably withheld. All assignments of rights are
expressly prohibited
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under this Section 9. Any purported assignment of rights or delegation of
performance in violation of this Section 9 is void.
10. FURTHER ASSURANCES. At any time and from time to time, the parties
hereto shall take any and all further actions as may be reasonably required to
carry out the intent of the parties under this Consent or as Administrative
Agent may reasonably request to provide Administrative Agent the full benefits
of this Consent.
11. CHOICE OF LAW. The laws of the state of Texas (without giving effect
to its conflict of laws principles) govern all matters arising out of or
relating to this Consent, including its validity, interpretation, construction,
and enforcement.
12. EQUITABLE ENFORCEMENT. Each party hereto acknowledges and agrees that
its obligations under this Consent may be equitably enforced and that it may be
compelled to specifically perform its obligations under this Consent.
[SIGNATURE PAGES FOLLOW]
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[SIGNATURE PAGE TO CONSENT AND AGREEMENT - PAGE 1 OF 13]
IN WITNESS WHEREOF, pursuant to due authorization, each party hereto has
caused this Consent to be duly executed and delivered as of the date hereto.
HOC:
XXXXX CORPORATION,
a Delaware corporation
By: /s/ Xxxxxxx X. XxXxxxxxx
------------------------------------------
Xxxxxxx X. XxXxxxxxx,
Vice President and Chief Financial Officer
[SIGNATURE PAGE TO CONSENT AND AGREEMENT - PAGE 2 OF 13]
LOGISTIC:
XXXXX LOGISTIC SERVICES, L.L.C.,
a Delaware limited liability company
By: /s/ M. Xxxxx Xxxxxxxxx
-----------------------------------------
M. Xxxxx Xxxxxxxxx
Vice President - Treasury and
Investor Relations
[SIGNATURE PAGE TO CONSENT AND AGREEMENT - PAGE 3 OF 13]
HOLDINGS:
HEP LOGISTICS HOLDINGS, L.P.,
a Delaware limited partnership
By: Xxxxx Logistic Services, L.L.C., a Delaware
limited liability company, its General
Partner
By: /s/ M. Xxxxx Xxxxxxxxx
-------------------------------------
M. Xxxxx Xxxxxxxxx
Vice President - Treasury and
Investor Relations
[SIGNATURE PAGE TO CONSENT AND AGREEMENT - PAGE 4 OF 13]
NAVAJO:
NAVAJO PIPELINE CO., L.P.,
a Delaware limited partnership
By: Navajo Pipeline GP, L.L.C., a Delaware
limited liability company, its General
Partner
By: /s/ Xxxxxxx X. XxXxxxxxx
-------------------------------------
Xxxxxxx X. XxXxxxxxx,
Vice President and Chief Financial
Officer
[SIGNATURE PAGE TO CONSENT AND AGREEMENT - PAGE 5 OF 13]
NAVAJO REFINING:
NAVAJO REFINING COMPANY., L.P.,
a Delaware limited partnership
By: Navajo Refining GP, L.L.C., a Delaware
limited liability company, its General
Partner
By: /s/ Xxxxxxx X. XxXxxxxxx
--------------------------------------
Xxxxxxx X. XxXxxxxxx,
Vice President and Chief Financial
Officer
[SIGNATURE PAGE TO CONSENT AND AGREEMENT - PAGE 6 OF 13]
XXXXX REFINING:
XXXXX REFINING & MARKETING COMPANY,
a Delaware corporation
By: /s/ Xxxxxxx X. XxXxxxxxx
-------------------------------------------
Xxxxxxx X. XxXxxxxxx,
Vice President and Chief Financial Officer
[SIGNATURE PAGE TO CONSENT AND AGREEMENT - PAGE 7 OF 13]
HEP:
XXXXX ENERGY PARTNERS, L.P.,
a Delaware limited partnership
By: HEP Logistics Holdings, L.P., a Delaware
limited partnership, its General Partner
By: Xxxxx Logistic Services, L.L.C.,
a Delaware limited liability company,
its General Partner
By: /s/ M. Xxxxx Xxxxxxxxx
----------------------------------
M. Xxxxx Xxxxxxxxx
Vice President - Treasury and
Investor Relations
[SIGNATURE PAGE TO CONSENT AND AGREEMENT - PAGE 8 OF 13]
GENERAL PARTNER:
HEP LOGISTICS GP, L.L.C.,
a Delaware limited liability company
By: Xxxxx Energy Partners, L.P., a Delaware
limited partnership, its Managing Member
By: HEP Logistics Holdings, L.P.,
a Delaware limited partnership,
its General Partner
By: Xxxxx Logistic Services, L.L.C.,
a Delaware limited liability
company, its General Partner
By: /s/ M. Xxxxx Xxxxxxxxx
------------------------------
M. Xxxxx Xxxxxxxxx
Vice President - Treasury and
Investor Relations
[SIGNATURE PAGE TO CONSENT AND AGREEMENT - PAGE 9 OF 13]
BORROWER:
HEP OPERATING COMPANY, L.P.,
a Delaware limited partnership
By: HEP Logistics GP, L.L.C., a Delaware
limited liability company, its General
Partner
By: Xxxxx Energy Partners, L.P., a Delaware
limited partnership, its Managing
Member
By: HEP Logistics Holdings, L.P.,
a Delaware limited partnership,
its General Partner
By: Xxxxx Logistic Services,
L.L.C., a Delaware limited
liability company, its General
Partner
By: /s/ M. Xxxxx Xxxxxxxxx
---------------------------
M. Xxxxx Xxxxxxxxx
Vice President - Treasury
and Investor Relations
[SIGNATURE PAGE TO CONSENT AND AGREEMENT - PAGE 10 OF 13]
HEP PIPELINE GP, L.L.C., a Delaware
limited liability company
HEP REFINING GP, L.L.C., a Delaware
limited liability company
HEP MOUNTAIN HOME, L.L.C., a Delaware
limited liability company
HEP PIPELINE, L.L.C., a Delaware
limited liability company
HEP REFINING, L.L.C., a Delaware
limited liability company
HEP XXXXX CROSS, L.L.C., a Delaware
limited liability company
Each by: HEP Operating Company, L.P., a Delaware
limited partnership and its Sole Member
By: HEP Logistics GP, L.L.C., a Delaware
limited liability company, its General
Partner
By: Xxxxx Energy Partners, L.P.,
a Delaware limited partnership,
its Managing Member
By: HEP Logistics Holdings, L.P.,
a Delaware limited partnership,
its General Partner
By: Xxxxx Logistic Services,
L.L.C., a Delaware limited
liability company, its General
Partner
By: /s/ M. Xxxxx Xxxxxxxxx
--------------------------
M. Xxxxx Xxxxxxxxx
Vice President - Treasury
and Investor Relations
[SIGNATURE PAGE TO CONSENT AND AGREEMENT - PAGE 11 OF 13]
HEP NAVAJO SOUTHERN, L.P., a Delaware limited
partnership
HEP PIPELINE ASSETS, LIMITED PARTNERSHIP,
a Delaware limited partnership
Each by: HEP Pipeline GP, L.L.C., a Delaware limited
liability company and its General Partner
By: HEP Operating Company, L.P., a Delaware
limited partnership and its Sole Member
By: HEP Logistics GP, L.L.C., a Delaware
limited liability company, its General
Partner
By: Xxxxx Energy Partners, L.P.,
a Delaware limited partnership,
its Managing Member
By: HEP Logistics Holdings, L.P.,
a Delaware limited partnership,
its General Partner
By: Xxxxx Logistic Services,
L.L.C., a Delaware limited
liability company, its General
Partner
By: /s/ M. Xxxxx Xxxxxxxxx
-----------------------------
M. Xxxxx Xxxxxxxxx
Vice President - Treasury and
Investor Relations
[SIGNATURE PAGE TO CONSENT AND AGREEMENT - PAGE 12 OF 13]
HEP REFINING ASSETS, L.P., a Delaware limited
partnership
By: HEP Refining GP, L.L.C., a Delaware limited
liability company and its General Partner
By: HEP Operating Company, L.P., a Delaware
limited partnership and its Sole Member
By: HEP Logistics GP, L.L.C., a Delaware limited
liability company, its General Partner
By: Xxxxx Energy Partners, L.P., a Delaware
limited partnership, its Managing Member
By: HEP Logistics Holdings, L.P., a Delaware
limited partnership, its General Partner
By: Xxxxx Logistic Services, L.L.C., a Delaware
limited liability company, its General
Partner
By: /s/ M. Xxxxx Xxxxxxxxx
-------------------------------------
M. Xxxxx Xxxxxxxxx
Vice President - Treasury and
Investor Relations
[SIGNATURE PAGE TO CONSENT AND AGREEMENT - PAGE 13 OF 13]
ADMINISTRATIVE AGENT:
UNION BANK OF CALIFORNIA, N.A.,
a national association, as Administrative Agent
By: /s/ Xxxx Xxxxxx
------------------------------------------
Xxxx Xxxxxx, Vice President
