EXHIBIT 10.1
AMENDED AND RESTATED CREDIT AGREEMENT
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GENESIS CRUDE OIL, L.P.,
as Borrower,
GENESIS ENERGY, L.L.C.,
as Guarantor,
GENESIS ENERGY, L.P.,
as Guarantor,
CITICORP NORTH AMERICA, INC.,
as Administrative Agent and Collateral Agent,
CITICORP NORTH AMERICA, INC.,
as Arranger and Book Manager,
and CERTAIN FINANCIAL INSTITUTIONS,
as Lenders
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$80,000,000
Dated as of May 3, 2002
TABLE OF CONTENTS
Page
ARTICLE I - Definitions and References 1
Section 1.1. Defined Terms 1
Section 1.2. Exhibits and Schedules; Additional Definitions 24
Section 1.3. Amendment of Defined Instruments 24
Section 1.4. References and Titles 25
Section 1.5. Calculations and Determinations 25
Section 1.6. Joint Preparation; Construction of Indemnities and
Releases 25
ARTICLE II - The Loans and Letters of Credit 26
Section 2.1. Commitments to Lend; Notes 26
Section 2.2. Requests for New Loans 26
Section 2.3. Continuations and Conversions of Existing Loans 27
Section 2.4. Use of Proceeds 28
Section 2.5. Optional Prepayments of Loans 28
Section 2.6. Mandatory Prepayments 29
Section 2.7. Letters of Credit 29
Section 2.8. Requesting Letters of Credit 30
Section 2.9. Reimbursement and Participations 30
Section 2.10. No Duty to Inquire 31
Section 2.11. LC Collateral 32
Section 2.12. Interest Rates and Fees; Reduction in Commitment 33
Section 2.13. Borrowing Base Reporting 34
ARTICLE III - Payments to Lenders 34
Section 3.1. General Procedures 34
Section 3.2. Capital Reimbursement 35
Section 3.3. Increased Cost of LIBOR Loans or Letters of Credit 36
Section 3.4. Notice; Change of Applicable Lending Office 36
Section 3.5. Availability 37
Section 3.6. Funding Losses 37
Section 3.7. Reimbursable Taxes 37
Section 3.8. Replacement of Lenders 39
ARTICLE IV - Conditions Precedent to Credit 39
Section 4.1. Documents to Be Delivered 39
Section 4.2. Additional Conditions Precedent 40
ARTICLE V - Representations and Warranties 41
Section 5.1. No Default 42
Section 5.2. Organization and Good Standing 42
Section 5.3. Authorization 42
Section 5.4. No Conflicts or Consents 42
Section 5.5. Enforceable Obligations 42
Section 5.6. Initial Financial Statements 42
Section 5.7. Other Obligations and Restrictions 43
Section 5.8. Full Disclosure 43
Section 5.9. Litigation 43
Section 5.10. Labor Disputes and Acts of God 43
Section 5.11. ERISA Plans and Liabilities 43
Section 5.12. Compliance with Laws 44
Section 5.13. Environmental Laws 44
Section 5.14. Names and Places of Business 46
Section 5.15. Borrower's Subsidiaries 46
Section 5.16. Title to Properties; Licenses 46
Section 5.17. Government Regulation 47
Section 5.18. Insider 47
Section 5.19. Solvency 47
Section 5.20. Credit Arrangements 47
Section 5.21. Real Property 47
ARTICLE VI - Affirmative Covenants 48
Section 6.1. Payment and Performance 48
Section 6.2. Books, Financial Statements and Reports 48
Section 6.3. Other Information and Inspections 50
Section 6.4. Notice of Material Events and Change of Address 51
Section 6.5. Maintenance of Properties 51
Section 6.6. Maintenance of Existence and Qualifications 52
Section 6.7. Payment of Trade Liabilities, Taxes, Etc 52
Section 6.8. Insurance 52
Section 6.9. Performance on Borrower's Behalf 52
Section 6.10. Interest 53
Section 6.11. Compliance with Agreements and Law 53
Section 6.12. Environmental Matters; Environmental Reviews 53
Section 6.13. Evidence of Compliance 53
Section 6.14. Agreement to Deliver Security Documents 54
Section 6.15. Perfection and Protection of Security Interests
and Liens 54
Section 6.16. Bank Accounts; Offset 54
Section 6.17. Guaranties of Subsidiaries 54
Section 6.18. Compliance with Agreements 55
Section 6.19. Rents 55
Section 6.20. Operating Practices 55
ARTICLE VII - Negative Covenants 56
Section 7.1. Indebtedness 56
Section 7.2. Limitation on Liens 56
Section 7.3. Hedging Contracts 58
Section 7.4. Limitation on Mergers, Issuances of Securities 58
Section 7.5. Limitation on Sales of Property 59
Section 7.6. Limitation on Dividends and Redemptions 60
Section 7.7. Limitation on Investments and New Businesses 60
Section 7.8. Limitation on Credit Extensions 60
Section 7.9. Transactions with Affiliates 60
Section 7.10. Prohibited Contracts 60
Section 7.11. Current Ratio 61
Section 7.12. Leverage Ratio 61
Section 7.13. Interest Coverage Ratio 61
Section 7.14. Capital Expenditures 61
Section 7.15. Open Position ; Certain Permitted Financial
Instruments; NYMEX Transactions 61
Section 7.16. Redelivery of Borrowing Base Report 62
ARTICLE VIII - Events of Default and Remedies 63
Section 8.1. Events of Default 63
Section 8.2. Remedies 66
ARTICLE IX - The Agents 66
Section 9.1. Authorization and Action 66
Section 9.2. Agents' Reliance, Etc. 66
Section 9.3. Administrative Agent and Affiliates 67
Section 9.4. Lender Party Credit Decision 67
Section 9.5. Indemnification 67
Section 9.6. Successor Agents 68
ARTICLE X - Miscellaneous 69
Section 10.1. Waivers and Amendments; Acknowledgment 69
Section 10.2. Survival of Agreements; Cumulative Nature 71
Section 10.3. Notices 71
Section 10.4. Payment of Expenses; Indemnity 72
Section 10.5. Joint and Several Liability Parties in Interest
Assignments; Replacement Notes 73
Section 10.6. Confidentiality 75
Section 10.7. Governing Law; Submission to Process 76
Section 10.8. Limitation on Interest 76
Section 10.9. Termination; Limited Survival 77
Section 10.10. Severability 78
Section 10.11. Counterparts 78
Section 10.12. Waiver of Jury Trial, Punitive Damages, Etc. 78
Schedules and Exhibits:
Schedule 1 - Lender Schedule
Schedule 2 - Disclosure Schedule
Schedule 3 - Security Schedule
Schedule 4 - Insurance Schedule
Schedule 5 - Borrowing Base Procedures
Schedule 6 - Real Property
Schedule 7 - Mortgages
Exhibit A - Form of Promissory Note
Exhibit B - Form of Borrowing Notice
Exhibit C - Form of Continuation/Conversion Notice
Exhibit D - Forms of Letter of Credit
Exhibit E - Form of Letter of Credit Application and Agreement
Exhibit F - Form of Certificate Accompanying Financial Statements
Exhibit G - Form of Borrowing Base Report
Exhibit H - Form of Environmental Compliance Certificate
Exhibit I - Form of Assignment and Acceptance Agreement
Exhibit J - Form of Solvency Certificate
AMENDED AND RESTATED CREDIT AGREEMENT
THIS AMENDED AND RESTATED CREDIT AGREEMENT is made as of May 3, 2002,
by and among GENESIS CRUDE OIL, L.P. ("Borrower"), a Delaware limited
partnership, GENESIS ENERGY, L.L.C. ("General Partner"), a Delaware limited
liability company, GENESIS ENERGY, L.P. ("Genesis Energy, L.P."), a Delaware
limited partnership, and CITICORP NORTH AMERICA, INC., as administrative
agent and collateral agent (in such capacity, "Administrative Agent" and
"Collateral Agent" ), CITICORP NORTH AMERICA, INC., as arranger and book
manager (in such capacity, "Lead Arranger and Book Manager"), and the
Lenders referred to below.
W I T N E S S E T H:
WHEREAS, the Borrower, the General Partner, Genesis Energy, L.P., the
Administrative Agent, the Collateral Agent and the Lenders referred to below
entered into a Credit Agreement dated as of December 19, 2001;
WHEREAS, the parties to the Credit Agreement desire to amend and
restate the Credit Agreement;
NOW THEREFORE, in consideration of the mutual covenants and agreements
contained herein and in consideration of the loans which may hereafter be
made by Lenders to, and the Letters of Credit that may hereafter be issued
by the LC Issuer for the account of, Borrower, and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto do hereby agree to amend and restate the
Credit Agreement dated as of December 19, 2001 as follows:
ARTICLE I - Definitions and References
Section 1.1. Defined Terms. As used in this Agreement, each of the
following terms has the meaning given to such term in this Section 1.1 or in
the sections and subsections referred to below:
"Acceptable Issuer" means any national or state bank or trust company
which is organized under the laws of the United States of America or any
state thereof or any branch licensed to operate under the laws of the United
States of America or any state thereof, which is a branch of a bank
organized under any country which is a member of the Organization for
Economic Cooperation and Development, in each case which has capital,
surplus and undivided profits of at least $500,000,000 and whose commercial
paper is rated at least P-1 by Moody's or A-1 by S&P.
"Account" shall have the meaning given that term in the UCC.
"Account Debtor" means any Person who is or who may become obligated
under, with respect to, or on account of, an Account.
"Administrative Agent" means Citicorp North America, Inc., as
Administrative Agent hereunder, and its successors in such capacity.
"Affiliate" means, as to any Person, each other Person that directly or
indirectly (through one or more intermediaries or otherwise) controls, is
controlled by, or is under common control with, such Person.
Notwithstanding anything to the contrary contained herein, for the purposes
of this Agreement, none of Citicorp North America, Inc., Citibank, N.A.,
Salomon Smith Barney Holdings Inc. or Salomon Brothers Holding Company Inc.
shall be deemed to be an Affiliate of any Restricted Person. A Person shall
be deemed to be "controlled by" any other Person if such other Person
possesses, directly or indirectly, power
(a) to vote 20% or more of the securities (on a fully diluted
basis) having ordinary voting power for the election of directors or
managing general partners; or
(b) to direct or cause the direction of the management and
policies of such Person whether by contract or otherwise.
"Agent" means each of Administrative Agent and Collateral Agent.
"Agreement" means this Amended and Restated Credit Agreement, as it may
be amended in accordance with the terms hereof.
"Applicable Lending Office" means, with respect to each Lender, such
Lender's Domestic Lending Office in the case of Base Rate Loans and such
Lender's LIBOR Lending Office in the case of LIBOR Loans.
"Applicable Leverage Level" means the level set forth below that
corresponds to the ratio of (i) Consolidated Funded Indebtedness to (ii) the
Consolidated EBITDA for the applicable period of four Fiscal Quarters (the
"Leverage Ratio"):
Applicable
Leverage Level Leverage Ratio
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Level I greater than or equal to 3.50 to 1.00
Level II greater than or equal to 3.0 to 1.00
but less than 3.5 to 1.00
Level III greater than or equal to 2.50 to 1.00 but less
than 3.00 to 1.00
Level IV Less than 2.50 to 1.00
On the date hereof the Applicable Leverage Level shall be Level III. The
Leverage Ratio shall be determined quarterly after the date hereof from time
to time by Administrative Agent within two (2) Business Days after
Administrative Agent's receipt of Genesis Energy, L.P.'s Consolidated
financial statements for the immediate preceding Fiscal Quarter beginning
with its receipt of the financial statements for the quarter ended
December 31, 2001 based upon: (i) Consolidated Funded Indebtedness as of
the end of such Fiscal Quarter, and (ii) the Consolidated EBITDA for the
four Fiscal Quarters ending with such Fiscal Quarter. The Applicable
Leverage Level shall become effective upon such determination of the
Leverage Ratio by Administrative Agent and shall remain effective until the
next such determination by Administrative Agent of the Leverage Ratio.
"Approved Eligible Receivables" means each Eligible Receivable (other
than Eligible Exchange Balances) (a) from a Person whose Debt Rating is
either at least Baa3 by Moody's or at least BBB- by S&P; (b) fully and
unconditionally guaranteed as to payment by a Person whose Debt Rating is
either at least Baa3 by Moody's or at least BBB- by S&P; (c) from any other
Person Currently Approved by Majority Lenders; or (d) fully covered by a
letter of credit from an Acceptable Issuer.
"Base Rate" means a fluctuating interest rate per annum in effect from
time to time, which rate per annum shall at all times be equal to the
highest of:
(a) the rate of interest announced publicly by Citibank in
New York, New York, from time to time, as Citibank's base rate;
(b) the sum (adjusted to the nearest 1/4 of 1% or, if there is no
nearest 1/4 of 1%, to the next higher 1/4 of 1%) of (i) 1/2 of 1% per
annum, plus (ii) the rate obtained by dividing (A) the latest three-
week moving average of secondary market morning offering rates in the
United States for three-month certificates of deposit of major United
States money market banks, such three-week moving average (adjusted to
the basis of a year of 360 days) being determined weekly on each Monday
(or, if such day is not a Business Day, on the next succeeding Business
Day) for the three-week period ending on the previous Friday by
Citibank on the basis of such rates reported by certificate of deposit
dealers to and published by the Federal Reserve Purchaser of New York
or, if such publication shall be suspended or terminated, on the basis
of quotations for such rates received by Citibank from three New York
certificate of deposit dealers of recognized standing selected by
Citibank, by (B) a percentage equal to 100% minus the average of the
daily percentages specified during such three-week period by the Board
of Governors of the Federal Reserve System (or any successor) for
determining the maximum reserve requirement (including, but not limited
to, any emergency, supplemental or other marginal reserve requirement)
for Citibank with respect to liabilities consisting of or including
(among other liabilities) three-month U.S. dollar non-personal time
deposits in the United States, plus (iii) the average during such
three-week period of the annual assessment rates estimated by Citibank
for determining the then current annual assessment payable by Citibank
to the Federal Deposit Insurance Corporation (or any successor) for
insuring U.S. dollar deposits of Citibank in the United States; and
(c) 1/2 of one percent per annum above the Federal Funds Rate.
"Base Rate Loan" means a Loan which does not bear interest at the LIBOR
Rate.
"Base Rate Margin" means the percent per annum set forth below based on
the Applicable Leverage Level in effect on the date of determination.
Applicable
Leverage Level Base Rate Margin
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Level I 0.50%
Level II 0.25%
Level III 0.00%
Level IV 0.00%
Changes in the applicable Base Rate Margin will occur automatically without
prior notice as changes in the Applicable Leverage Level occur.
Administrative Agent will give notice promptly to Borrower and Lenders of
changes in the Base Rate Margin.
"Borrower" means Genesis Crude Oil, L.P., a Delaware limited
partnership.
"Borrowing" means a borrowing of new Loans of a single Type pursuant to
Section 2.2 or a Continuation or Conversion of all or a portion of an
existing Loan (whether alone or as a combination with a new Loan) into a
single Type (and, in the case of LIBOR Loans, with the same Interest Period)
pursuant to Section 2.3.
"Borrowing Base" means the remainder of (a) minus (b) below as of the
date of determination (without duplication):
(a) the sum of the following as of the date of determination:
(i) 100% of Eligible Cash Equivalents; plus
(ii) 90% of Approved Eligible Receivables; plus
(iii) the lesser of (A) 85% of Other Eligible Receivables
or (B) one third (1/3) of the sum of the amounts of clauses (a)(i)
plus (a)(ii); plus
(iv) 85% of Eligible Margin Deposits; plus
(v) 95% of Hedged Eligible Inventory plus 100% of Other
Eligible Inventory Value; plus
(vi) 80% of Eligible Exchange Balances; plus
(vii) 100% of all Paid but Unexpired Letters of Credit
MINUS
(b) the following as of the date of determination:
(i) 100% of First Purchase Crude Payables; plus
(ii) 100% of Other Priority Claims; plus
(iii) The Estimate Adjustment Amount as provided in
Section 2.13.
"Borrowing Notice" means a written or telephonic request, or a written
confirmation, made by Borrower which meets the requirements of Section 2.2.
"Business Day" means any day, other than a Saturday, Sunday or day
which shall be in New York City a legal holiday or day on which banking
institutions are required or authorized to close. Any Business Day in any
way relating to LIBOR Loans (such as the day on which an Interest Period
begins or ends) must also be a day on which commercial banks settle payments
in London.
"Capital Expenditures" means, for any Person for any period, the sum
of, without duplication, (a) all expenditures made, directly or indirectly,
by such Person or any of its Subsidiaries during such period for equipment,
fixed assets, real property or improvements, or for replacements or
substitutions therefor or additions thereto, that have been or should be, in
accordance with GAAP, reflected as additions to property, plant or equipment
on a Consolidated balance sheet of such Person or have a useful life of more
than one year plus (b) the aggregate principal amount of all Indebtedness
(including obligations under Capitalized Leases) assumed or incurred in
connection with any such expenditures. For purposes of this definition, the
purchase price of equipment that is purchased simultaneously with the trade-
in of existing equipment or with insurance proceeds shall be included in
Capital Expenditures only to the extent of the gross amount of such purchase
price less the credit granted by the seller of such equipment for the
equipment being traded in at such time or the amount of such proceeds, as
the case may be.
"Capital Lease" means a lease with respect to which the lessee is
required concurrently to recognize the acquisition of an asset and the
incurrence of a liability in accordance with GAAP.
"Capital Lease Obligation" means, with respect to any Person and a
Capital Lease, the amount of the obligation of such Person as the lessee
under such Capital Lease which would, in accordance with GAAP, appear as a
liability on a balance sheet of such Person.
"Cash Equivalents" means Investments in:
(a) marketable obligations, maturing within 12 months after
acquisition thereof, issued or unconditionally guaranteed by the United
States of America or an instrumentality or agency thereof and entitled
to the full faith and credit of the United States of America;
(b) demand deposits and time deposits (including certificates of
deposit) maturing within 12 months from the date of deposit thereof,
(i) with any office of any Lender or (ii) with a domestic office of any
national or state bank or trust company which is organized under the
Laws of the United States of America or any state therein, which has
capital, surplus and undivided profits of at least $500,000,000, and
whose long-term certificates of deposit are rated at least Aa3 by
Moody's or AA- by S&P;
(c) repurchase obligations with a term of not more than seven
days for underlying securities of the types described in subsection (a)
above entered into with (i) any Lender or (ii) any other commercial
bank meeting the specifications of subsection (b) above;
(d) open market commercial paper, maturing within 270 days after
acquisition thereof, which are rated at least P-1 by Moody's or A-l by
S&P; and
(e) money market or other mutual funds substantially all of whose
assets comprise securities of the types described in subsections (a)
through (d) above.
"Change of Control" means the occurrence of any of the following
events: (i) any Person or group of Persons acting in concert as a
partnership or other group (a "Group of Persons") other than General Partner
and the other holders of partnership interests in Genesis Energy, L.P. as of
the date hereof shall be the legal or beneficial owner (within the meaning
of Rule 13d-3 under the Securities Exchange Act of 1934, as amended) of 25%
or more of the combined voting power of the then total partnership interests
(including all securities which are convertible into partnership interests)
of Genesis Energy, L.P., or (ii) Genesis Energy, L.P. shall cease to be the
sole legal and beneficial owner (as defined above) of at least ninety
percent (90%) of the limited partnership interests of Borrower (including
all securities which are convertible into limited partner interests), or
(iii) the General Partner shall cease to be the sole general partner of
Genesis Energy, L.P., the Borrower, Genesis Pipeline Texas, L.P. and Genesis
Pipeline USA L.P. or (iv) Salomon shall own, directly or indirectly, less
than 100% of the combined voting power of the equity interests in the
General Partner, provided that it shall not be a Change of Control if
Salomon transfers 100% of its membership interest in the General Partner to
Denbury Resources, Inc. or a Subsidiary of Denbury Resources, Inc. on or
before May 20, 2002.
"Citibank" means Citibank, N.A., a national banking association.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time, together with all rules and regulations promulgated with respect
thereto.
"Collateral" means all property of any kind which is subject to a Lien
in favor of Lenders (or in favor of Collateral Agent for the benefit of
Lenders) or which, under the terms of any Security Document, is purported to
be subject to such a Lien, in each case granted or created to secure all or
part of the Obligations.
"Collateral Agent" has the meaning set forth in the Security Documents.
"Commitment Fee Rate" means, on any day, the rate per annum set forth
below based on the Applicable Leverage Level on date of determination.
Applicable Leverage Level Commitment Fee Rate
------------------------- -------------------
Level I or Level II 0.50%
Level III or Level IV 0.375%
Changes in the applicable Commitment Fee Rate will occur automatically
without prior notice as changes in the Applicable Leverage Level occur.
Administrative Agent will give notice promptly to Borrower and Lenders of
changes in the Commitment Fee Rate.
"Commitment Period" means the period from and including the date hereof
until December 31, 2003 (or, if earlier, the day on which (i) the obligation
of Lenders to make Loans hereunder and the obligations of LC Issuer to issue
Letters of Credit hereunder have terminated, (ii) the obligation of LC
Issuer to issue Letters of Credit hereunder has terminated, or (iii) the
Notes first become due and payable in full, whichever shall first occur).
"Consolidated" refers to the consolidation of any Person, in accordance
with GAAP, with its properly consolidated subsidiaries. References herein
to a Person's Consolidated financial statements, financial position,
financial condition, liabilities, etc. refer to the consolidated financial
statements, financial position, financial condition, liabilities, etc. of
such Person and its properly consolidated subsidiaries.
"Consolidated EBITDA" means, for any period, the sum of (1) the
Consolidated Net Income of Borrower and its Consolidated Subsidiaries during
such period, plus (2) all interest expense which was deducted in determining
such Consolidated Net Income for such period, plus (3) all income taxes
(including any franchise taxes to the extent based upon net income) which
were deducted in determining such Consolidated Net Income, plus (4) all
depreciation, amortization (including amortization of good will and debt
issue costs) and other non-cash charges (including any provision for the
reduction in the carrying value of assets recorded in accordance with GAAP)
which were deducted in determining such Consolidated Net Income, minus
(5) all non-cash items of income which were included in determining such
Consolidated Net Income.
"Consolidated Funded Indebtedness" means as of any date, the sum of the
following (without duplication): (i) all Indebtedness which is classified
as "long-term indebtedness" on a consolidated balance sheet of Borrower and
its Consolidated Subsidiaries prepared as of such date in accordance with
GAAP and any current maturities and other principal amount in respect of
such Indebtedness due within one year but which was classified as "long-term
indebtedness" at the creation thereof, (ii) indebtedness for borrowed money
of Borrower and its Consolidated Subsidiaries outstanding under a revolving
credit or similar agreement providing for borrowings (and renewals and
extensions thereof) over a period of more than one year, notwithstanding the
fact that any such borrowing is made within one year of the expiration of
such agreement, and (iii) Indebtedness in respect of Capital Leases of
Borrower and its Consolidated Subsidiaries. For purposes of the definition
of Consolidated Funded Indebtedness, all such Indebtedness and indebtedness
for borrowed money shall be calculated on an average daily basis for the
relevant period.
"Consolidated Net Income" means, for any period, Borrower's and its
Subsidiaries' gross revenues for such period, including any cash dividends
or distributions actually received from any other Person during such period,
minus Borrower's and its Subsidiaries' expenses and other proper charges
against income (including taxes on income to the extent imposed), determined
on a Consolidated basis after eliminating earnings or losses attributable to
outstanding minority interests (other than the minority interest in Borrower
held by the General Partner) and excluding the net earnings of any Person
other than a Subsidiary in which Borrower or any of its Subsidiaries has an
ownership interest. Consolidated Net Income shall not include (i) any gain
or loss from the sale of assets, (ii) any extraordinary gains or losses (it
being understood that (x) up to $2,000,000 of any penalty assessed by any
Tribunal in connection with the Pipeline Release, and (y) up to $800,000
incurred by Borrower in connection with employee severance costs during the
first Fiscal Quarter of 2002 shall be considered to be "extraordinary
losses" for the purposes of this clause (ii)) or (iii) any non-cash gains or
losses resulting from mark to market activity as a result of the
implementation of SFAS 133.
"Consolidated Net Worth" means the remainder of all Consolidated
assets, as determined in accordance with GAAP, of Borrower and its
Subsidiaries minus the sum of (a) Borrower's Consolidated liabilities, as
determined in accordance with GAAP, and (b) all outstanding Minority
Interests (other than the minority interest in Borrower held by the General
Partner). The effect of any increase or decrease in net worth in any
period as a result of items of income or loss not reflected in the
determination of net income but reflected in the determination of
comprehensive income (to the extent provided under GAAP as in effect on the
date hereof) shall be excluded in determining Consolidated Net Worth.
"Minority Interests" means the book value of any equity interests in any of
Borrower's Subsidiaries which equity interests are owned by a Person other
than Borrower or a Wholly Owned Subsidiary of Borrower
"Continuation/Conversion Notice" means a written or telephonic request,
or a written confirmation, made by Borrower which meets the requirements of
Section 2.3.
"Continue", "Continuation", and "Continued" shall refer to the
continuation pursuant to Section 2.3 hereof of a LIBOR Loan as a LIBOR Loan
from one Interest Period to the next Interest Period.
"Convert", "Conversion", and "Converted" shall refer to a conversion
pursuant to Section 2.3 or Article III of one Type of Loan into another Type
of Loan.
"Current Trading Month" has the meaning given that term in
Section 7.15.
"Currently Approved by Majority Lenders" means such Person (including a
limit on the maximum credit exposure to any such Person), storage location,
pipeline, form of Letter of Credit or other matter as the case may be, as
reflected in the most recent written notice given by Administrative Agent to
Borrower as being approved by Majority Lenders. Each such written notice
will supersede and revoke each prior notice.
"Debt Coverage Ratio" shall have the meaning given that term in
Section 7.12.
"Debt Rating" means with respect to a Person, the rating then in effect
by a Rating Agency for the long term senior unsecured non-credit enhanced
debt of such Person.
"Default" means any Event of Default and any default, event or
condition which would, with the giving of any requisite notices and the
passage of any requisite periods of time, constitute an Event of Default.
"Default Rate" means in the case of any Loan (i) two percent (2%) per
annum plus the applicable LIBOR Rate Margin plus the LIBOR Rate then in
effect for any LIBOR Loan (up to the end of the applicable Interest Period)
or (ii) two percent (2%) per annum plus the applicable Base Rate Margin plus
the Base Rate for each Base Rate Loan; provided, however, the Default Rate
shall never exceed the Highest Lawful Rate.
"Default Rate Period" means (i) any period during which an Event of
Default, other than pursuant to Section 8.1(a) or (b) or Section
8.1(i)(i)(ii)(iii), is continuing, provided that such period shall not begin
until notice of the commencement of the Default Rate has been given to
Borrower by Administrative Agent upon the instruction by Majority Lenders
and (ii) any period during which any other Event of Default is continuing
unless Borrower has been notified otherwise by Administrative Agent upon the
instruction by Majority Lenders.
"Disclosure Schedule" means Schedule 2 hereto.
"Dollars" and "$" means the lawful currency of the United States of
America, except where otherwise specified.
"Domestic Lending Office" means, with respect to any Lender, the office
of such Lender specified as its "Domestic Lending Office" in the Lender
Schedule hereto, or such other office as such Lender may from time to time
specify to Borrower and Administrative Agent; with respect to LC Issuer, the
office, branch, or agency through which it issues Letters of Credit; and,
with respect to Administrative Agent, the office, branch, or agency through
which it administers this Agreement.
"Eligible Cash Equivalents" means Cash Equivalents in which Borrower
has lawful and absolute title, which are free from any express or implied at
law Lien, trust or other beneficial interest, in which Collateral Agent
holds a fully perfected first-priority security interest (subject only to
the Salomon Lien) prior to the rights of, and enforceable as such against,
any other Persons pursuant to an account agreement satisfactory to
Collateral Agent and which remain under the sole dominion and control of
Collateral Agent.
"Eligible Exchange Balances" means each Approved Eligible Receivable
(including for this purpose only either the right to receive Petroleum
Inventory in kind or to receive money) arising from the trading, lending,
borrowing or exchange of Petroleum Inventory, net of any netted obligations
or other offsets or counterclaims determined in accordance with prices set
forth in the applicable exchange contracts, based on current value at the
Market Price, in which Borrower has lawful and absolute title, which is not
subject to any Lien in favor of any Person (other than Permitted Inventory
Liens), and which is subject to a fully perfected first-priority security
interest (subject only to Permitted Inventory Liens) in favor of Collateral
Agent pursuant to the Loan Documents prior to the rights of, and enforceable
as such against, any other Persons minus without duplication the amount of
any Permitted Inventory Lien on any Petroleum Inventory receivable in kind.
"Eligible Inventory" means inventories of Petroleum Inventory in which
Borrower has lawful and absolute title (specifically excluding, however,
tank bottoms), which are not subject to any Lien in favor of any Person
(other than Permitted Inventory Liens and the Salomon Lien), which are
subject to a fully perfected first priority security interest (subject only
to Permitted Inventory Liens and the Salomon Lien) in favor of Collateral
Agent pursuant to the Loan Documents prior to the rights of, and enforceable
as such against, any other Person, which are otherwise satisfactory to
Majority Lenders in their reasonable business judgment and which are located
in storage locations (including pipelines) which are either (a) owned by a
Restricted Person or (b) Currently Approved by Majority Lenders minus
without duplication the amount of any Permitted Inventory Lien on any such
inventory. Eligible Inventory shall specifically exclude inventory to be
delivered in the current or next succeeding trading month.
"Eligible Margin Deposit" means net equity value of investments by
Borrower in margin deposit accounts with commodities brokers on nationally
recognized exchanges subject to a perfected security interest in favor of
Collateral Agent and a three-party agreement among Borrower, Administrative
Agent and the depository institution, in form and substance satisfactory to
Collateral Agent.
"Eligible Receivables" means, at the time of any determination thereof
(and without duplication), each Account and, with respect to each
determination made on or after the 20th day of each calendar month and prior
to the first day of the next calendar month, each amount which will be, in
the good faith estimate reasonably determined by Borrower, an Account of the
Borrower with respect to sales and deliveries of Petroleum Inventory during
such calendar month or deliveries of Petroleum Inventory during the next
calendar month under firm written purchase and sale agreements, in either
event as to which the following requirements have been fulfilled (or as to
future Accounts, will be fulfilled as of the date of such sales and
deliveries of Petroleum Inventory), to the reasonable satisfaction of
Administrative Agent:
(i) Borrower has lawful and absolute title to such Account;
(ii) such Account is a valid, legally enforceable obligation of an
Account Debtor payable in Dollars, arising from the sale and delivery
of Petroleum Inventory to such Person in the United States of America
in the ordinary course of business of Borrower, to the extent of the
volumes of Petroleum Inventory delivered to such Person prior to the
date of determination;
(iii) there has been excluded from such Account (A) any
portion that is subject to any dispute, rejection, loss, non-
conformance, counterclaim or other claim or defense on the part of any
Account Debtor or to any claim on the part of any Account Debtor
denying liability under such Account, and (B) the amount of any account
payable or other liability owed by Borrower to the Account Debtor on
such Account, whether or not a specific netting agreement may exist,
excluding, however, any portion of any such account payable or other
liability which is at the time in question covered by a Letter of
Credit;
(iv) Borrower has the full and unqualified right to assign and
grant a security interest in such Account to Collateral Agent as
security for the Obligation;
(v) such Account (A) is evidenced by an invoice rendered to the
Account Debtor, or (B) represents the uninvoiced amount in respect of
volumes of Petroleum Inventory scheduled to be delivered by Borrower in
the current or next-following calendar month, is governed by a purchase
and sale agreement, exchange agreement or other written agreement, and
in either event such Account is not evidenced by any promissory note or
other instrument;
(vi) such Account is not subject to any Lien in favor of any
Person and is subject to a fully perfected first priority security
interest (subject only the Salomon Lien) in favor of Collateral Agent
pursuant to the Loan Documents, prior to the rights of, and enforceable
as such against, any other Person except for a Lien in respect of First
Purchase Crude Payables;
(vii) such Account is due not more than 30 days following the
last day of the calendar month in which the Petroleum Inventory
delivery occurred and is not more than 30 days past due (except that
Accounts of a single Account Debtor in excess of $250,000 which are not
Approved Eligible Receivables shall be excluded from Eligible
Receivables if not paid on or before the third Business Day after the
due date);
(viii) such Account is not payable by an Account Debtor with
more than twenty percent (20%) of its Accounts to Borrower that are
outstanding more than 30 days from the invoice date;
(ix) the Account Debtor in respect of such Account (A) is located,
is conducting significant business or has significant assets in the
United States of America or is a Person Currently Approved by Majority
Lenders, (B) is not an Affiliate of Borrower, and (C) is not the
subject of any event of the type described in Section 8.1(i);
(x) the Account Debtor in respect of such Account is not a
governmental authority, domestic or foreign; and
(xi) such Account is not the obligation of an Account Debtor that
Administrative Agent or Majority Lenders determine in good faith that
there is a legitimate concern over the timing or collection of such
receivable.
"Eligible Transferee" means a Person which either (a) is a Lender or an
Affiliate of a Lender, or (b) is consented to as an Eligible Transferee by
Administrative Agent and, so long as no Default or Event of Default is
continuing, by Borrower, which consents in each case will not be
unreasonably withheld (provided that no Person organized outside the United
States may be an Eligible Transferee if Borrower would be required to pay
withholding taxes on interest or principal owed to such Person).
"Environmental Laws" means any and all Laws relating to the
environment, health or safety, or to emissions, discharges, releases or
threatened releases of pollutants, contaminants, chemicals, or industrial,
toxic or hazardous substances or wastes or Hazardous Materials into the
environment including ambient air, surface water, ground water, or land, or
otherwise relating to the manufacture, processing, distribution use,
treatment, storage, disposal, transport, or handling of pollutants,
contaminants, chemicals, or industrial, toxic or hazardous substances or
wastes.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, together with all rules and regulations
promulgated with respect thereto.
"ERISA Affiliate" means each Restricted Person and all members of a
controlled group of corporations and all trades or businesses (whether or
not incorporated) under common control that, together with such Restricted
Person, are treated as a single employer under Section 414 of the Code.
"ERISA Plan" means any employee pension benefit plan subject to
Title IV of ERISA maintained at any time by any ERISA Affiliate with respect
to which any Restricted Person has a fixed or contingent liability.
"Event of Default" has the meaning given to such term in Section 8.1.
"Facility Usage" means, at the time in question, the aggregate amount
of outstanding Loans and LC Obligations at such time.
"Federal Funds Rate" means, for any day, the rate per annum (rounded
upwards, if necessary, to the nearest 1/1000th of one percent) equal to the
weighted average of the rates on overnight Federal funds transactions with
members of the Federal Reserve System arranged by Federal funds brokers on
such day, as published by the Federal Reserve Bank of New York on the
Business Day next succeeding such day, provided that (i) if the day for
which such rate is to be determined is not a Business Day, the Federal Funds
Rate for such day shall be such rate on such transactions on the next
preceding Business Day as so published on the next succeeding Business Day,
and (ii) if such rate is not so published for any day, the Federal Funds
Rate for such day shall be the average rate quoted to Administrative Agent
on such day on such transactions as determined by Administrative Agent.
"First Purchase Crude Payables" means the unpaid amount of any payable
obligation related to the purchase of Petroleum Inventory by Borrower which
Administrative Agent determines will be secured by a statutory Lien,
including but not limited to the statutory Liens, if any, created under the
laws of Texas, New Mexico, Wyoming, Kansas, Oklahoma or any other state to
the extent such payable obligation is not at the time in question covered by
a Letter of Credit.
"Fiscal Quarter" means a three-month period ending on March 31,
June 30, September 30 or December 31 of any year.
"Fiscal Year" means a twelve-month period ending on December 31 of any
year.
"Fixed Charges" means, with respect to any period, the sum (without
duplication) of the following (in each case, eliminating all offsetting
debits and credits between Genesis Energy, L.P. and its Subsidiaries and all
other items required to be eliminated in the course of the preparation of
Consolidated financial statements of Genesis Energy, L.P. and its
Subsidiaries in accordance with GAAP): (a) all interest and commitment fees
in respect of Indebtedness of Genesis Energy, L.P. or any of its
Subsidiaries (including imputed interest on Capital Lease Obligations) which
are accrued during such period and whether expensed in such period or
capitalized; plus (b) all fees, expenses and charges in respect of letters
of credit issued for the account of Genesis Energy, L.P. or any of its
Subsidiaries, which are accrued during such period and whether expensed in
such period or capitalized; plus (c) payments of principal in respect of
Indebtedness of Genesis Energy, L.P. or its Subsidiaries (including the
principal component of payments under Capital Leases) paid or payable in
such period (other than payments of principal of Loans which are available
to be reborrowed hereunder).
"Floating Price Contract" has the meaning given that term in
Section 7.15.
"GAAP" means those generally accepted accounting principles and
practices which are recognized as such by the Financial Accounting Standards
Board (or any generally recognized successor) and which, in the case of
Borrower and its Consolidated Subsidiaries, are applied for all periods
after the date hereof in a manner consistent with the manner in which such
principles and practices were applied to the Initial Financial Statements.
If any change in any accounting principle or practice is required by the
Financial Accounting Standards Board (or any such successor) in order for
such principle or practice to continue as a generally accepted accounting
principle or practice, all reports and financial statements required
hereunder with respect to Borrower or with respect to Borrower and its
Consolidated Subsidiaries may be prepared in accordance with such change,
but all calculations and determinations to be made hereunder may be made in
accordance with such change only after notice of such change is given to
each Lender, and Majority Lenders agree to such change insofar as it affects
the accounting of Borrower or of Borrower and its Consolidated Subsidiaries.
"General Partner" means Genesis Energy, L.L.C., a Delaware limited
liability company.
"Genesis Energy, L.P." means Genesis Energy, L.P., a Delaware limited
partnership.
"Guarantors" means Genesis Energy, L.L.C., Genesis Energy, L.P.,
Genesis Pipeline USA, L.P., and Genesis Pipeline Texas, L.P. and any other
Person who has guaranteed some or all of the Obligations and who has been
accepted by Administrative Agent as a Guarantor or any Subsidiary of Genesis
Energy, L.L.C. which now or hereafter executes and delivers a guaranty to
Collateral Agent pursuant to Section 6.17.
"Hazardous Materials" means any substances designated, classified,
regulated or defined under any Environmental Law, whether as pollutants,
contaminants, or chemicals, or as industrial, toxic or hazardous substances
or wastes, or otherwise.
"Hedged Eligible Inventory" means Eligible Inventory with respect to
which the price risk has been (a) hedged for delivery within the next 190
days by either
(i) a contract on the NYMEX arranged through brokers approved by
Administrative Agent and with whom a three-party agreement among
Borrower, Collateral Agent and such broker has been entered in form and
substance satisfactory to Collateral Agent; or
(ii) a contract for a specified price for physical delivery of
such inventory to a counterparty whose Account would qualify as an
Approved Eligible Receivable;
or (b) otherwise hedged in a manner satisfactory to Majority Lenders. The
value of Hedged Eligible Inventory shall be the volume of the inventory
times the prices fixed in such hedge, minus all storage, transportation and
other applicable costs.
"Hedging Contract" means (a) any agreement providing for options,
swaps, floors, caps, collars, forward sales or forward purchases involving
interest rates, commodities or commodity prices, equities, currencies,
bonds, or indexes based on any of the foregoing, (b) any option, futures or
forward contract traded on an exchange, and (c) any other derivative
agreement or other similar agreement or arrangement.
"Highest Lawful Rate" means, with respect to each Lender Party to whom
Obligations are owed, the maximum nonusurious rate of interest that such
Lender Party is permitted under applicable Law to contract for, take,
charge, or receive with respect to such Obligations. All determinations
herein of the Highest Lawful Rate, or of any interest rate determined by
reference to the Highest Lawful Rate, shall be made separately for each
Lender Party as appropriate to assure that the Loan Documents are not
construed to obligate any Person to pay interest to any Lender Party at a
rate in excess of the Highest Lawful Rate applicable to such Lender Party.
"Indebtedness" of any Person means its Liabilities (without
duplication) in any of the following categories:
(a) Liabilities for borrowed money,
(b) Liabilities constituting an obligation to pay the deferred
purchase price of property or services,
(c) Liabilities evidenced by a bond, debenture, note or similar
instrument,
(d) Liabilities (other than reserves for taxes and reserves for
contingent obligations) which (i) would under GAAP be shown on such
Person's balance sheet as a liability and (ii) are payable more than
one year from the date of creation or incurrence thereof,
(e) Liabilities arising under Hedging Contracts (on a net basis
to the extent netting is provided for in the applicable Hedging
Contract),
(f) Liabilities constituting principal under Capital Leases,
(g) Liabilities arising under conditional sales or other title
retention agreements,
(h) Liabilities owing under direct or indirect guaranties of
Liabilities of any other Person or otherwise constituting obligations
to purchase or acquire or to otherwise protect or insure a creditor
against loss in respect of Liabilities of any other Person (such as
obligations under working capital maintenance agreements, agreements to
keep-well, or agreements to purchase Liabilities, assets, goods,
securities or services), but excluding endorsements in the ordinary
course of business of negotiable instruments in the course of
collection,
(i) Liabilities consisting of an obligation to purchase or redeem
securities or other property, if such Liabilities arises out of or in
connection with the sale or issuance of the same or similar securities
or property (for example, repurchase agreements, mandatorily redeemable
preferred stock and sale/leaseback agreements),
(j) Liabilities with respect to letters of credit or applications
or reimbursement agreements therefor,
(k) Liabilities with respect to banker's acceptances, or
(l) Liabilities with respect to obligations to deliver goods or
services in consideration of advance payments therefor;
provided, however, that the "Indebtedness" of any Person shall not include
Liabilities that were incurred in the ordinary course of business by such
Person on ordinary trade terms to vendors, suppliers or other Persons
providing goods and services for use by such Person in the ordinary course
of its business, unless and until such Liabilities are outstanding more than
120 days after the date the respective goods are delivered or the respective
services are rendered, other than Liabilities contested in good faith by
appropriate proceedings, if required, and for which adequate reserves are
maintained on the books of such Person in accordance with GAAP.
"Injection Station" means each injection station owned or leased by any
Restricted Person or any of its Subsidiaries as set forth on Part III of
Schedule 6.
"Initial Financial Statements" means (i) the audited Consolidated
financial statements of Borrower as of December 31, 2001, and (ii) the
unaudited balance sheet and income statement of each Subsidiary of Borrower
as of December 31, 2001.
"Insurance Schedule" means Schedule 4 attached hereto.
"Interest Coverage Ratio" means, at any date of determination, the
ratio of (c) Consolidated EBITDA to (b) interest payable on, and
amortization of debt discount in respect of, all Indebtedness, in each case,
of or by Borrower and its Subsidiaries for the then most recently ended
Measurement Period.
"Interest Payment Date" means (a) with respect to each Base Rate Loan,
the last day of each March, June, September and December, and (b) with
respect to each LIBOR Loan, the last day of the Interest Period that is
applicable thereto.
"Interest Period" means, with respect to each particular LIBOR Loan in
a Borrowing, the period specified in the Borrowing Notice or
Continuation/Conversion Notice applicable thereto, beginning on and
including the date specified in such Borrowing Notice or
Continuation/Conversion Notice (which must be a Business Day), and ending
one, two or three months thereafter, as Borrower may elect in such notice;
provided that: (a) any Interest Period which would otherwise end on a day
which is not a Business Day shall be extended to the next succeeding
Business Day unless such Business Day falls in another calendar month, in
which case such Interest Period shall end on the next preceding Business
Day; (b) any Interest Period which begins on the last Business Day in a
calendar month (or on a day for which there is no numerically corresponding
day in the calendar month at the end of such Interest Period) shall end on
the last Business Day in a calendar month; and (c) notwithstanding the
foregoing, no Interest Period may be selected that would end after the last
day of the Commitment Period.
"Investment" means any investment made, directly or indirectly in any
Person, whether by acquisition of shares of capital stock, indebtedness or
other obligations or securities or by loan, advance, capital contribution or
otherwise and whether made in cash, by the transfer of property or by any
other means.
"Law" means any statute, law, regulation, ordinance, rule, treaty,
judgment, code, order, decree, permit, policy or guidance, concession,
franchise, license, agreement or other governmental restriction of the
United States or any state or political subdivision thereof or of any
foreign country or any department, state, province or other political
subdivision thereof, in each case, now or hereafter in effect and as
amended.
"LC Application" means any application for a Letter of Credit hereafter
made by Borrower to LC Issuer.
"LC Collateral" has the meaning given to such term in Section 2.11(a).
"LC Conditions" has the meaning set forth in Section 2.7(A).
"LC Issuer" means Citicorp North America, Inc., in its capacity as the
issuer of Letters of Credit hereunder, and its successors in such capacity.
Administrative Agent may, with the consent of Borrower and the Lender in
question, appoint any Lender hereunder as an LC Issuer in place of or in
addition to Citicorp North America, Inc.
"LC Obligations" means, at the time in question, the sum of all Matured
LC Obligations plus the maximum amounts which LC Issuer might then or
thereafter be called upon to advance under all Letters of Credit then
outstanding.
"Lender Parties" means Administrative Agent, the Collateral Agent, LC
Issuer and all Lenders.
"Lender Schedule" means Schedule 1 hereto.
"Lenders" means each signatory hereto (other than Borrower and any
other Restricted Person that is a party hereto), including Citicorp North
America, Inc., in its capacity as a Lender hereunder rather than as
Administrative Agent and Collateral Agent and LC Issuer, and the successors
and each permitted assign of each such party as holder of a Note.
"Letter of Credit" means any letter of credit issued by LC Issuer
hereunder.
"Letter of Credit Fee Rate" means, on any day, the rate per annum set
forth below based on the Applicable Leverage Level on the date of
determination.
Applicable
Leverage Level LC Fee Rate
-------------- -----------
Level I 2.75%
Level II 2.25%
Level III 2.00%
Level IV 1.50%
Changes in the applicable Letter of Credit Fee Rate will occur automatically
without prior notice as changes in the Applicable Leverage Level occur.
Administrative Agent will give notice promptly to Borrower and Lenders of
changes in the Letter of Credit Fee Rate.
"Leverage Ratio" means the ratio of (i) Consolidated Funded
Indebtedness to (ii) Consolidated EBITDA for the Measurement Period most
recently ended prior to the date of determination for which financial
statements contemplated by Section 6.2(a) or (b) are available, it being
understood that, for the purposes of Section 7.12, if, since the beginning
of the Measurement Period ending on the date for which Consolidated EBITDA
is determined, any Restricted Person shall have made any asset disposition
or acquisition, shall have consolidated or merged with or into any Person
(other than another Restricted Person), or shall have made any disposition
or acquisition of a Restricted Person, Consolidated EBITDA shall be
calculated giving pro forma effect thereto as if the disposition,
acquisition, consolidation or merger had occurred on the first day of such
period. Such pro forma effect shall be determined (i) in good faith by the
chief financial officer of Borrower and (ii) without giving effect to any
anticipated or proposed change in operations, revenues, expenses or other
items included in the computation of Consolidated EBITDA, except with the
consent of Majority Lenders.
"Liabilities" means, as to any Person, all indebtedness, liabilities
and obligations of such Person, whether matured or unmatured, liquidated or
unliquidated, primary or secondary, direct or indirect, absolute, fixed or
contingent, and whether or not required to be considered pursuant to GAAP.
"LIBOR Lending Office" means, with respect to any Lender, the office of
such Lender specified as its "LIBOR Lending Office" on the Lender Schedule
hereto (or, if no such office is specified, its Domestic Lending Office), or
such other office of such Lender as such Lender may from time to time
specify to Borrower and Administrative Agent.
"LIBOR Loan" means a Loan that bears interest at a rate based upon the
LIBOR Rate.
"LIBOR Rate" means, as applicable to any LIBOR Loan within a Borrowing
and with respect to the related Interest Period therefor, the rate per annum
(rounded upwards, if necessary, to the nearest 1/16th of 1%) as determined
on the basis of offered rates for deposits in U.S. dollars, for a period of
time comparable to such Interest Period which appears on Telerate Page 3750
(or any successor page) as of 11:00 a.m. London time on the day that is two
Business Days preceding the first day of such LIBOR Loan; provided, however,
if the rate described above does not appear on the Telerate system on any
applicable interest determination date, the LIBOR Rate shall be the rate
(rounded upwards as described above, if necessary) for deposits in dollars
for a period substantially equal to such Interest Period on the Reuters Page
"LIBO" (or such other page as may replace the LIBO Page on that service for
the purpose of displaying such rates), as of 11:00 a.m. (London time), on
the date that is two Business Days prior to the beginning of such Interest
Period; provided, however, if more than one rate is specified on Reuters
Screen LIBO Page, the applicable rate shall be the arithmetic mean of all
such rates (rounded upwards, if necessary, to the nearest 1/1000 of 1%). If
both the Telerate and Reuters system are unavailable, then the LIBOR Rate
for that date will be determined on the basis of the offered rates for
deposits in U.S. dollars for a period of time comparable to such Interest
Period which are offered by four major banks in the London interbank market
at approximately 11:00 a.m. London time, on the day that is two (2) Business
Days preceding the first day of such LIBOR Loan as selected by
Administrative Agent. The principal London office of each of the four major
London banks will be requested to provide a quotation of its U.S. dollar
deposit offered rate. If at least two such quotations are provided, the
rate for that date will be the arithmetic mean of the quotations. If fewer
than two quotations are provided as requested, the rate for that date will
be determined on the basis of the rates quoted for loans in U.S. dollars to
leading European banks for a period of time comparable to such Interest
Period offered by major banks in New York City at approximately 11:00 a.m.
New York City time, on the day that is two Business Days preceding the fist
day of such LIBOR Loan. In the event that Administrative Agent is unable to
obtain any such quotation as provided above, it will be deemed that the
LIBOR Rate pursuant to such LIBOR Loan cannot be determined. In the event
that the Board of Governors of the Federal Reserve System shall impose a
Reserve Percentage with respect to LIBOR deposits of any Lender, then for
any period during which such Reserve Percentage shall apply, the LIBOR Rate
shall be equal to the amount determined above divided by an amount equal to
1 minus the Reserve Percentage. "Reserve Percentage" means the maximum
aggregate reserve requirement (including all basic, supplemental, marginal,
special, emergency and other reserves) which is imposed on member banks of
the Federal Reserve System against "Euro-currency Liabilities" as defined in
Regulation D. Without limiting the effect of the foregoing, the Reserve
Percentage shall reflect any other reserves required to be maintained by
such member banks with respect to (a) any category of liabilities which
includes deposits by reference to which the LIBOR Rate is to be determined,
or (b) any category of extensions of credit or other assets which include
LIBOR Loans. The LIBOR Rate for any LIBOR Loan shall change whenever the
Reserve Percentage changes.
"LIBOR Rate Margin" means the percent per annum set forth below based
on the Applicable Leverage Level in effect on the date of determination.
Applicable
Leverage Level LIBOR Rate Margin
-------------- -----------------
Level I 2.75%
Level II 2.25%
Level III 2.00%
Level IV 1.50%
Changes in the applicable LIBOR Rate Margin will occur automatically without
prior notice as changes in the Applicable Leverage Level occur.
Administrative Agent will give notice promptly to Borrower and Lenders of
changes in the LIBOR Rate Margin.
"Lien" means, with respect to any property or assets, any right or
interest therein of a creditor to secure Liabilities owed to it or any other
arrangement with such creditor which provides for the payment of such
Liabilities out of such property or assets or which allows such creditor to
have such Liabilities satisfied out of such property or assets prior to the
general creditors of any owner thereof, including any lien, mortgage,
security interest, pledge, deposit, production payment, rights of a vendor
under any title retention or conditional sale agreement or lease
substantially equivalent thereto, tax lien, mechanic's or materialman's
lien, or any other charge or encumbrance for security purposes, whether
arising by Law or agreement or otherwise, but excluding any right of offset
which arises without agreement in the ordinary course of business. "Lien"
also means any filed financing statement, any registration of a pledge (such
as with an issuer of uncertificated securities), or any other arrangement or
action which would serve to perfect a Lien described in the preceding
sentence, regardless of whether such financing statement is filed, such
registration is made, or such arrangement or action is undertaken before or
after such Lien exists.
"Loans" has the meaning given to such term in Section 2.1.
"Loan Documents" means this Agreement, the Notes, the Security
Documents, the Letters of Credit, the LC Applications, and all other
agreements, certificates, documents, instruments and writings at any time
delivered in connection herewith or therewith (exclusive of term sheets and
commitment letters).
"Maintenance Capital Expenditures" means, for any period, all amounts
properly classified as capital expenditures under GAAP for maintenance of or
repair or replacement of existing assets during such period or that are
incurred to maintain existing operations.
"Majority Lenders" means Lenders whose aggregate Percentage Shares
equal or exceed sixty-six and two-thirds percent (66 2/3%).
"Market Price" means on each day a spot price for the inventory of
Petroleum Inventory being valued, determined by published prices and
methodology approved by Administrative Agent from time to time, based on an
index gravity and grade of Petroleum Inventory at a delivery point
reflecting as nearly as practical the actual gravity, grade, and location of
the Petroleum Inventory being valued, adjusted to reflect any differences in
gravity and grade between the index Petroleum Inventory and the actual
inventory and to reflect transportation costs or other appropriate location
price differential from the actual location to the index location.
"Material Adverse Change" means a material and adverse change in the
business, condition (financial or otherwise), operations, performance,
properties or prospects, from the state of affairs presented in the Initial
Financial Statements or as represented or warranted in any Loan Document, to
(a) Genesis Energy, L.P., (b) Genesis Energy, L.P. and its Subsidiaries,
considered as a whole, (c) Borrower's ability to timely pay the Obligations,
or (d) the enforceability of the material terms of any Loan Document.
Notwithstanding anything to the contrary contained herein, neither (i) the
elimination by Borrower of its commodity trading operation nor (ii) any
other matter disclosed in item 5.6 of the Disclosure Schedule shall be
considered a Material Adverse Change.
"Material Market Open Position Loss" means a cumulative amount of net
losses resulting from Open Positions (other than Open Positions permitted
under Section 7.15) of all Restricted Persons on a mark to market basis
during any period of 12 consecutive months in excess of $250,000.
"Matured LC Obligations" means all amounts paid by LC Issuer on drafts
or demands for payment drawn or made under any Letter of Credit and all
other amounts due and owing to LC Issuer under any LC Application for any
Letter of Credit, to the extent the same have not been repaid to LC Issuer
(with the proceeds of Loans or otherwise) or cash collateralized pursuant to
Section 2.7(B)(iii).
"Maximum Drawing Amount" means at the time in question the sum of the
maximum amounts which LC Issuer might then or thereafter be called upon to
advance under all Letters of Credit then outstanding.
"Measurement Period" means, at any date of determination, the most
recently completed four consecutive Fiscal Quarters of Borrower ending on or
prior to such date of determination.
"Maximum Facility Amount" means the amount of $80,000,000, as such
amount may be reduced from time to time as provided in Section 2.12.
"Maximum Loan Amount" means $25,000,000, as such amount may be reduced
from time to time as provided in Section 2.6.
"Moody's" means Moody's Investor Service, Inc., or its successor.
"Net Cash Proceeds" means, with respect to any sale, lease, transfer or
other disposition of any asset or the incurrence or issuance of any
Indebtedness or the sale or issuance of any equity interests (including,
without limitation, any capital contribution) by any Person, or any
extraordinary receipt received by or paid to or for the account of any
Person, the aggregate amount of cash received from time to time (whether as
initial consideration or through payment or disposition of deferred
consideration) by or on behalf of such Person in connection with such
transaction after deducting therefrom only (without duplication)
(a) reasonable and customary brokerage commissions, underwriting fees and
discounts, legal fees, finder's fees and other similar fees and commissions,
(b) the amount of taxes payable in connection with or as a result of such
transaction and (c) the amount of any Indebtedness secured by a Lien on such
asset that, by the terms of the agreement or instrument governing such
Indebtedness, is required to be repaid upon such disposition, in each case
to the extent, but only to the extent, that the amounts so deducted are, at
the time of receipt of such cash, actually paid or payable to a Person that
is not an Affiliate of such Person or any Restricted Person or any Affiliate
of any Restricted Person and are properly attributable to such transaction
or to the asset that is the subject thereof; provided, however, that in the
case of taxes that are deductible under clause (b) above but for the fact
that, at the time of receipt of such cash, such taxes have not been actually
paid or are not then payable, such Restricted Person or such Subsidiary may
deduct an amount (the "Reserved Amount") equal to the amount reserved in
accordance with GAAP for such Restricted Person's or such Subsidiary's
reasonable estimate of such taxes, other than taxes for which such
Restricted Person or such Subsidiary is indemnified, provided further,
however, that, at the time such taxes are paid, an amount equal to the
amount, if any, by which the Reserved Amount for such taxes exceeds the
amount of such taxes actually paid shall constitute "Net Cash Proceeds" of
the type for which such taxes were reserved for all purposes hereunder.
"Note" has the meaning given to such term in Section 2.1.
"NYMEX" means the New York Mercantile Exchange.
"Obligations" means all Liabilities from time to time owing by any
Restricted Person to any Lender Party under or pursuant to any of the Loan
Documents, including all LC Obligations. "Obligation" means any part of the
Obligations.
"Offsetting Position" means any offsetting sale or purchase agreement,
an offsetting NYMEX contract, an offsetting physical inventory position
(excluding tank bottoms and pipeline linefill inventory classified as a long
term asset and working inventory not held for resale), or an offsetting
swap, collar or option contract, in each case eliminating price risk and
substantially all basis risk.
"Open Position" means (i) any physical Petroleum Inventory or (ii) any
purchase or sale contract for Petroleum Inventory that does not have an
Offsetting Position.
"Other Eligible Inventory Value" means the following amount of Eligible
Inventory, other than Hedged Eligible Inventory: (a) if the WTI Price is
less than or equal to $30 per barrel, 80% of the product of the volume of
such crude oil times the Market Price, or (b) if the WTI Price is greater
than $30 per barrel the greater of (i) 70% of the product of the volume of
such crude oil times the Market Price or (ii) 80% of the product of the
volume of such crude oil times $30 per barrel; minus, in each case, all
storage, transportation and other applicable costs. As used herein "WTI
Price" means on each day the Platt's Average Spot Price for West Texas
intermediate crude oil (Cushing, Oklahoma).
"Other Eligible Receivable" means any Eligible Receivable which is not
an Approved Eligible Receivable nor an Eligible Exchange Balance. The
portions of the aggregate of the Other Eligible Receivables owed by any
obligor and its Affiliates exceeding ten percent (10%) of the sum of
(i) Approved Eligible Receivables plus (ii) Other Eligible Receivables,
shall not be included without the prior written approval of the Majority
Lenders.
"Other Priority Claims" means any account payable, obligation or
liability which Administrative Agent has determined has or will have a Lien
upon or claim against any Cash Equivalent, account or inventory of Borrower
senior or equal in priority to the security interests in favor of Collateral
Agent for the benefit of Lenders, in each case to the extent such Cash
Equivalent, account or inventory of Borrower is otherwise included in the
determination of the Borrowing Base and the included portion thereof has not
already been reduced by such Lien or claim.
"Paid but Unexpired Letters of Credit" means, on any day, the maximum
drawing amount of Letters of Credit on such day where no underlying
obligation exists on such day, or if the amount of the Letter of Credit
exceeds the underlying obligation on such day, the amount of such excess.
As used herein, "underlying obligation" includes without limitation, all
existing and future obligations to the beneficiary of such Letter of Credit
in respect of Petroleum Inventory purchased or received on or prior to such
day or in respect of Petroleum Inventory Borrower is then obligated to
purchase or receive or has then nominated to purchase or receive.
"Percentage Share" means, with respect to any Lender (a) when used in
Sections 2.1, 2.2 or 2.12, in any Borrowing Notice or when no Loans are
outstanding hereunder, the percentage set forth opposite such Lender's name
on the Lender Schedule hereto, and (b) when used otherwise, the percentage
obtained by dividing (i) the sum of the unpaid principal balance of such
Lender's Loans at the time in question plus the Matured LC Obligations which
such Lender has funded pursuant to Section 2.9(c) plus the portion of the
Maximum Drawing Amount which such Lender might be obligated to fund under
Section 2.9(c), by (ii) the sum of the aggregate unpaid principal balance of
all Loans at such time plus the aggregate amount of LC Obligations
outstanding at such time.
"Permitted Inventory Liens" means any Lien, and the amount of any
Liability secured thereby, on Petroleum Inventory which would be a Permitted
Lien under Section 7.2(ii)(b) (so long as such Lien is inchoate) or
Section 7.2(ii)(d).
"Permitted Investments" means:
(a) Cash Equivalents,
(b) Investments described in the Disclosure Schedule, or
(c) Investments by General Partner or any of its Subsidiaries in
Borrower or any Wholly Owned Subsidiary of General Partner which is a
Guarantor.
"Permitted Lien" has the meaning given to such term in Section 7.2.
"Person" means an individual, corporation, partnership, limited
liability company, association, joint stock company, trust or trustee
thereof, estate or executor thereof, unincorporated organization or joint
venture, Tribunal, or any other legally recognizable entity.
"Petroleum Inventory" means crude oil, condensate, natural gas liquids
(N.L.'s), liquefied petroleum gases (LPG's) or any blend thereof.
"Pipeline Release" means the spill of crude oil from the Genesis
Pipeline U.S.A., L.P. Mississippi System on December 20, 1999.
"Qualified Inventory Purchases" means purchases of Petroleum Inventory
(other than to comply with linefill obligations) which is Hedged Eligible
Inventory and which does not exceed the limitation of Section 7.15(a)(i).
"Rating Agency" means either S&P or Moody's.
"Regulation D" means Regulation D of the Board of Governors of the
Federal Reserve System as from time to time in effect.
"Reimbursable Taxes" has the meaning set forth in Section 3.7(a).
"Restricted Person" means any of Genesis Energy, L.L.C. and each
Subsidiary of Genesis Energy, L.L.C., including but not limited to Genesis
Energy, L.P., Borrower and each Subsidiary of Borrower.
"S&P" means Standard & Poor's Ratings Services (a division of McGraw
Hill, Inc.) or its successor.
"Salomon" means, collectively, Salomon Smith Barney Holdings Inc. and
Salomon Brothers Holding Company, Inc.
"Salomon Facility" means the Master Credit Support Agreement dated as
of December 3, 1996 among Borrower, Salomon Smith Barney Holdings Inc.
(f/k/a Salomon Inc.) and Basis Petroleum, Inc., as amended from time to time
prior to the date hereof.
"Salomon Guaranty Exposure" means the maximum amount which might then
or thereafter be called upon to be paid under all guaranties issued pursuant
to the Salomon Facility then outstanding plus all amounts paid under
guaranties issued under the Salomon Facility, to the extent the same have
not been repaid pursuant to the Salomon Facility.
"Salomon Lien" means, collectively, all Liens placed on property or
assets of any Restricted Person arising under the Salomon Facility as in
effect on the date hereof.
"Salomon Obligations" means the obligations of any of the Restricted
Persons in respect of guaranties issued pursuant to the Salomon Facility.
"Security Documents" means the instruments listed in the Security
Schedule and all other security agreements, deeds of trust, mortgages,
chattel mortgages, pledges, guaranties, financing statements, continuation
statements, extension agreements and other agreements or instruments now,
heretofore, or hereafter delivered by any Restricted Person to Collateral
Agent in connection with this Agreement or any transaction contemplated
hereby to secure or guarantee the payment of any part of the Obligations or
the performance of any Restricted Person's other duties and obligations
under the Loan Documents.
"Security Schedule" means Schedule 3 hereto.
"Solvent" and "Solvency" mean, with respect to any Person on a
particular date, that on such date (a) the fair value of the property of
such Person is greater than the total amount of liabilities, including,
without limitation, contingent liabilities, of such Person, (b) the present
fair salable value of the assets of such Person is not less than the amount
that will be required to pay the probable liability of such Person on its
debts as they become absolute and matured, (c) such Person does not intend
to, and does not believe that it will, incur debts or liabilities beyond
such Person's ability to pay such debts and liabilities as they mature and
(d) such Person is not engaged in business or a transaction, and is not
about to engage in business or a transaction, for which such Person's
property would constitute an unreasonably small capital. The amount of
contingent liabilities at any time shall be computed as the amount that, in
the light of all the facts and circumstances existing at such time,
represents the amount that can reasonably be expected to become an actual or
matured liability.
"Subsidiary" means, with respect to any Person, any corporation,
association, partnership, limited liability company, joint venture, or other
business or corporate entity, enterprise or organization which is directly
or indirectly (through one or more intermediaries) controlled or owned more
than fifty percent by such Person, it being understood that for all purposes
of this Agreement and the other Loan Documents, (i) Borrower is a Subsidiary
of Genesis Energy, L.P. and General Partner and (ii) Genesis Energy, L.P. is
a Subsidiary of General Partner.
"Termination Event" means (a) the occurrence with respect to any ERISA
Plan of (i) a reportable event described in Sections 4043(c)(5) or (6) of
ERISA or (ii) any other reportable event described in Section 4043(c) of
ERISA other than a reportable event not subject to the provision for 30-day
notice to the Pension Benefit Guaranty Corporation pursuant to a waiver by
such corporation under Section 4043(a) of ERISA, or (b) the withdrawal of
any ERISA Affiliate from an ERISA Plan during a plan year in which it was a
"substantial employer" as defined in Section 4001(a)(2) of ERISA, or (c) the
cessation of operations at a facility of any ERISA Affiliate in the
circumstances described in Section 4062(e) of ERISA, or (d) the imposition
of a lien under Section 302(f) of ERISA with respect to any ERISA Plan, or
(e) the adoption of an amendment to an ERISA Plan requiring the provision of
security to such plan pursuant to Section 307 of ERISA, or (f) the filing of
a notice of intent to terminate any ERISA Plan or the treatment of any ERISA
Plan amendment as a termination under Section 4041 of ERISA, or (g) the
institution of proceedings to terminate any ERISA Plan by the Pension
Benefit Guaranty Corporation under Section 4042 of ERISA, or (h) any other
event or condition which might constitute grounds under Section 4042 of
ERISA for the termination of, or the appointment of a trustee to administer,
any ERISA Plan.
"Tribunal" means any government, any arbitration panel, any court or
any governmental department, commission, board, bureau, agency or
instrumentality of the United States of America or any state, province,
commonwealth, nation, territory, possession, county, parish, town, township,
village or municipality, whether now or hereafter constituted or existing.
"Type" means, with respect to any Loans, the characterization of such
Loans as either Base Rate Loans or LIBOR Loans.
"UCC" means the Uniform Commercial Code as in effect in the State of
New York.
"Wholly Owned Subsidiary" means any Subsidiary of a Person, all of the
issued and outstanding stock, limited liability company membership
interests, or partnership interests of which (including all rights or
options to acquire such stock or interests) are directly or indirectly
(through one or more Subsidiaries) owned by such Person, excluding any
general partner interests owned, directly or indirectly, by General Partner
in any such Subsidiary that is a partnership, in each case such general
partner interests not to exceed three percent (3%) of the aggregate
ownership interests of any such partnership and directors' qualifying shares
if applicable.
Section 1.2. Exhibits and Schedules; Additional Definitions. All
Exhibits and Schedules attached to this Agreement are a part hereof for all
purposes. Reference is hereby made to the Security Schedule for the meaning
of certain terms defined therein and used but not defined herein, which
definitions are incorporated herein by reference.
Section 1.3. Amendment of Defined Instruments. Unless the context
otherwise requires or unless otherwise provided herein the terms defined in
this Agreement which refer to a particular agreement, instrument or document
also refer to and include all renewals, extensions, modifications,
amendments and restatements of such agreement, instrument or document,
provided that nothing contained in this section shall be construed to
authorize any such renewal, extension, modification, amendment or
restatement.
Section 1.4. References and Titles. All references in this Agreement
to Exhibits, Schedules, articles, sections, subsections and other
subdivisions refer to the Exhibits, Schedules, articles, sections,
subsections and other subdivisions of this Agreement unless expressly
provided otherwise. Exhibits and Schedules to any Loan Document shall be
deemed incorporated by reference in such Loan Document. References to any
document, instrument, or agreement (a) shall include all exhibits,
schedules, and other attachments thereto, and (b) shall include all
documents, instruments, or agreements issued or executed in replacement
thereof. Titles appearing at the beginning of any subdivisions are for
convenience only and do not constitute any part of such subdivisions and
shall be disregarded in construing the language contained in such
subdivisions. The words "this Agreement," "this instrument," "herein,"
"hereof," "hereby," "hereunder" and words of similar import refer to this
Agreement as a whole and not to any particular subdivision unless expressly
so limited. The phrases "this section" and "this subsection" and similar
phrases refer only to the sections or subsections hereof in which such
phrases occur. The word "or" is not exclusive, and the word "including" (in
its various forms) means "including without limitation." Pronouns in
masculine, feminine and neuter genders shall be construed to include any
other gender, and words in the singular form shall be construed to include
the plural and vice versa, unless the context otherwise requires.
Accounting terms have the meanings assigned to them by GAAP, as applied the
accounting entity to which they refer. References to "days" shall mean
calendar days, unless the term "Business Day" is used. Unless otherwise
specified, references herein to any particular Person also refer to its
successors and permitted assigns.
Section 1.5. Calculations and Determinations. All calculations under
the Loan Documents of interest and of fees shall be made on the basis of
actual days elapsed (including the first day but excluding the last) and a
year of 360 days. Each determination by a Lender Party of amounts to be
paid under Article III or any other matters which are to be determined
hereunder by a Lender Party (such as any LIBOR Rate, Business Day, Interest
Period, or Reserve Percentage) shall, in the absence of manifest error, be
conclusive and binding. Unless otherwise expressly provided herein or
unless Majority Lenders otherwise consent all financial statements and
reports furnished to any Lender Party hereunder shall be prepared and all
financial computations and determinations pursuant hereto shall be made in
accordance with GAAP.
Section 1.6. Joint Preparation; Construction of Indemnities and
Releases. This Agreement and the other Loan Documents have been reviewed
and negotiated by sophisticated parties with access to legal counsel and no
rule of construction shall apply hereto or thereto which would require or
allow any Loan Document to be construed against any party because of its
role in drafting such Loan Document. All indemnification and release
provisions of this Agreement shall be construed broadly (and not narrowly)
in favor of the Persons receiving indemnification or being released.
ARTICLE II - The Loans and Letters of Credit
Section 2.1. Commitments to Lend; Notes. Subject to the terms and
conditions hereof, each Lender severally agrees to make loans to Borrower
(herein called such Lender's "Loans") upon Borrower's request from time to
time during the Commitment Period, provided that (a) subject to Sections
3.3, 3.4 and 3.6, all Lenders are requested to make Loans of the same Type
in accordance with their respective Percentage Shares and as part of the
same Borrowing, (b) after giving effect to such Loans, the aggregate
principal amount of outstanding Loans will not exceed the Maximum Loan
Amount, and (c) after giving effect to such Loans, the Facility Usage does
not exceed the lesser of (i) the Maximum Facility Amount and (ii) the
Borrowing Base determined as of the date on which the requested Loans are to
be made, provided further that, at all times prior to the termination of the
Salomon Facility and all Salomon Guaranty Exposure and the payment in full
of all Salomon Obligations, after giving effect to such Loans, the Facility
Usage plus the Salomon Guaranty Exposure does not exceed the Borrowing Base
determined as of the date on which the requested Loans are to be made. The
aggregate amount of all Loans in any Borrowing must be equal to $100,000 or
any higher integral multiple of $100,000. Borrower may have no more than
five Borrowings of LIBOR Loans outstanding at any time. The obligation of
Borrower to repay to each Lender the aggregate amount of all Loans made by
such Lender, together with interest accruing in connection therewith, shall
be evidenced by a single promissory note (herein called such Lender's
"Note") made by Borrower payable to the order of such Lender in the form of
Exhibit A with appropriate insertions. The amount of principal owing on any
Lender's Note at any given time shall be the aggregate amount of all Loans
theretofore made by such Lender minus all payments of principal theretofore
received by such Lender on such Note. Interest on each Note shall accrue
and be due and payable as provided herein and therein. Each Note shall be
due and payable as provided herein and therein, and shall be due and payable
in full on the last day of the Commitment Period. Subject to the terms and
conditions of this Agreement, Borrower may borrow, repay, and reborrow
hereunder.
Section 2.2. Requests for New Loans. Borrower must give to
Administrative Agent written notice (or telephonic notice promptly confirmed
in writing) of any requested Borrowing of Loans to be funded by Lenders.
Each such notice constitutes a "Borrowing Notice" hereunder and must:
(a) specify (i) the aggregate amount of any such Borrowing of
Base Rate Loans and the date on which such Base Rate Loans are to be
advanced, or (ii) the aggregate amount of any such Borrowing of LIBOR
Loans, the date on which such LIBOR Loans are to be advanced (which
shall be the first day of the Interest Period which is to apply
thereto), and the length of the applicable Interest Period; and
(b) be received by Administrative Agent not later than
11:00 a.m., New York City time, on (i) the day on which any such Base
Rate Loans are to be made, or (ii) the third Business Day preceding the
day on which any such LIBOR Loans are to be made.
Each such written request or confirmation must be made in the form and
substance of the "Borrowing Notice" attached hereto as Exhibit B, duly
completed. Each such telephonic request shall be deemed a representation,
warranty, acknowledgment and agreement by Borrower as to the matters which
are required to be set out in such written confirmation. Upon receipt of
any such Borrowing Notice, Administrative Agent shall give each Lender
prompt notice of the terms thereof. If all conditions precedent to such new
Loans have been met, each Lender will on the date requested promptly remit
to Administrative Agent at Administrative Agent's office in New York City
the amount of such Lender's Loan in immediately available funds, and upon
receipt of such funds, unless to its actual knowledge any conditions
precedent to such Loans have been neither met nor waived as provided herein,
Administrative Agent shall promptly make such Loans available to Borrower.
Unless Administrative Agent shall have received prompt notice from a Lender
that such Lender will not make available to Administrative Agent such
Lender's new Loan, Administrative Agent may in its discretion assume that
such Lender has made such Loan available to Administrative Agent in
accordance with this section and Administrative Agent may if it chooses, in
reliance upon such assumption, make such Loan available to Borrower. If and
to the extent such Lender shall not so make its new Loan available to
Administrative Agent, such Lender and Borrower severally agree to pay or
repay to Administrative Agent within three days after demand therefor the
amount of such Loan together with interest thereon, for each day from the
date such amount was made available to Borrower until the date such amount
is paid or repaid to Administrative Agent, with interest at (i) the Federal
Funds Rate, if such Lender is making such payment and (ii) the interest rate
applicable at the time to the other new Loans made on such date, if Borrower
is making such repayment. If neither such Lender nor Borrower pays or
repays to Administrative Agent such amount within such three-day period,
Administrative Agent shall be entitled to recover from Borrower, on demand,
in lieu of the interest provided for in the preceding sentence, interest
thereon at the Default Rate, calculated from the date such amount was made
available to Borrower. The failure of any Lender to make any new Loan to
be made by it hereunder shall not relieve any other Lender of its obligation
hereunder, if any, to make its new Loan, but no Lender shall be responsible
for the failure of any other Lender to make any new Loan to be made by such
other Lender.
Section 2.3. Continuations and Conversions of Existing Loans.
Borrower may make the following elections with respect to Loans already
outstanding: (i) to Convert, in whole or in part, Base Rate Loans to LIBOR
Loans, (ii) to Convert, in whole or in part, LIBOR Loans to Base Rate Loans
on the last day of the Interest Period applicable thereto and (iii) to
Continue, in whole or in part, LIBOR Loans beyond the expiration of such
Interest Period by designating a new Interest Period to take effect at the
time of such expiration. In making such elections, Borrower may combine
existing Loans made pursuant to separate Borrowings into one new Borrowing
or divide existing Loans made pursuant to one Borrowing into separate new
Borrowings, provided that Borrower may have no more than five Borrowings of
LIBOR Loans outstanding at any time. To make any such election, Borrower
must give to Administrative Agent written notice (or telephonic notice
promptly confirmed in writing) of any such Conversion or Continuation of
existing Loans, with a separate notice given for each new Borrowing. Each
such notice constitutes a "Continuation/Conversion Notice" hereunder and
must:
(a) specify the existing Loans which are to be Continued or
Converted;
(b) specify (i) the aggregate amount of any Borrowing of Base
Rate Loans into which such existing Loans are to be Continued or
Converted and the date on which such Continuation or Conversion is to
occur, or (ii) the aggregate amount of any Borrowing of LIBOR Loans
into which such existing Loans are to be Continued or Converted, the
date on which such Continuation or Conversion is to occur (which shall
be the first day of the Interest Period which is to apply to such LIBOR
Loans), and the length of the applicable Interest Period; and
(c) be received by Administrative Agent not later than
11:00 a.m., New York City time, on (i) the day on which any such
Continuation or Conversion to Base Rate Loans is to occur, or (ii) the
third Business Day preceding the day on which any such Continuation or
Conversion to LIBOR Loans is to occur.
Each such written request or confirmation must be made in the form and
substance of the Continuation/Conversion Notice attached hereto as
Exhibit C, duly completed. Each such telephonic request shall be deemed a
representation, warranty, acknowledgment and agreement by Borrower as to the
matters which are required to be set out in such written confirmation. Upon
receipt of any such Continuation/Conversion Notice, Administrative Agent
shall give each Lender prompt notice of the terms thereof. Each
Continuation/Conversion Notice shall be irrevocable and binding on Borrower.
During the continuance of any Default, Borrower may not make any election to
Convert existing Loans into LIBOR Loans or Continue existing Loans as LIBOR
Loans beyond the expiration of their respective and corresponding Interest
Period then in effect. If (due to the existence of a Default or for any
other reason) Borrower fails to timely and properly give any
Continuation/Conversion Notice with respect to a Borrowing of existing LIBOR
Loans at least three days prior to the end of the Interest Period applicable
thereto, such LIBOR Loans, to the extent not prepaid at the end of such
Interest Period, shall automatically be Converted into Base Rate Loans at
the end of such Interest Period. No new funds shall be repaid by Borrower
or advanced by any Lender in connection with any Continuation or Conversion
of existing Loans pursuant to this section, and no such Continuation or
Conversion shall be deemed to be a new advance of funds for any purpose;
such Continuations and Conversions merely constitute a change in the
interest rate applicable to already outstanding Loans.
Section 2.4. Use of Proceeds. Borrower shall use the proceeds of all
Loans to make Qualified Inventory Purchases, and for working capital and
general corporate purposes. Borrower shall use all Letters of Credit solely
for the purposes specified in Section 2.7(A)(iv). In no event shall any
Loan or any Letter of Credit be used (i) to fund distributions by Genesis
Energy, L.P., (ii) directly or indirectly by any Person for personal,
family, household or agricultural purposes, (iii) for the purpose, whether
immediate, incidental or ultimate, of purchasing, acquiring or carrying any
"margin stock" (as such term is defined in Regulation U promulgated by the
Board of Governors of the Federal Reserve System) or (iv) to extend credit
to others directly or indirectly for the purpose of purchasing or carrying
any such margin stock. Borrower represents and warrants that Borrower is
not engaged principally, or as one of Borrower's important activities, in
the business of extending credit to others for the purpose of purchasing or
carrying such margin stock.
Section 2.5. Optional Prepayments of Loans. Borrower may, upon three
Business Days' notice to Administrative Agent (and Administrative Agent will
promptly give notice to the other Lenders), from time to time and without
premium or penalty prepay the Loans, in whole or in part, so long as the
aggregate amounts of all partial prepayments of principal on the Loans
equals $100,000 or any higher integral multiple of $100,000. Each
prepayment of principal under this section shall be accompanied by all
interest then accrued and unpaid on the principal so prepaid. Any principal
or interest prepaid pursuant to this section shall be in addition to, and
not in lieu of, all payments otherwise required to be paid under the Loan
Documents at the time of such prepayment.
Section 2.6. Mandatory Prepayments. (a) If at any time the Facility
Usage exceeds the Borrowing Base (whether due to a reduction in the
Borrowing Base in accordance with this Agreement, or otherwise), Borrower
shall within one Business Day following demand therefor by the
Administrative Agent prepay the principal of the Loans in an amount at least
equal to such excess.
(b) If at any time prior to the termination of the Salomon Facility
and all Salomon Guaranty Exposure and the payment in full of all Salomon
Obligations, the Facility Usage plus the Salomon Guaranty Exposure exceeds
the Borrowing Base (whether due to a reduction in the Borrowing Base in
accordance with this Agreement, or otherwise), Borrower shall within one
Business Day notify the Administrative Agent and prepay the principal of the
Loans in an amount at least equal to such excess.
(c) On the date of receipt of the Net Cash Proceeds by Borrower or
any of its Subsidiaries from the sale, lease, transfer or other disposition
of any assets of Borrower or any of its Subsidiaries in excess of
$10,000,000 (other than any sale, lease, transfer or other disposition of
assets pursuant to clause (a), (b) or (c) of Section 7.5), (i) Borrower
shall prepay an aggregate principal amount of the Loans in an amount equal
to the amount of such Net Cash Proceeds in excess of $10,000,000; and (ii)
the Maximum Loan Amount shall be permanently reduced by an amount equal to
the amount of such Net Cash Proceeds in excess of $10,000,000; provided that
at no time shall the Maximum Loan Amount be reduced to less than
$15,000,000.
Section 2.7. Letters of Credit. (A) Subject to the terms and
conditions hereof, Borrower may request LC Issuer to issue, amend, or extend
the expiration date of, one or more Letters of Credit, provided that:
(i) after taking such Letter of Credit into account, the Facility
Usage does not exceed the lesser of (i) the Maximum Facility Amount at
such time or (ii) the Borrowing Base at such time, and, at all times
prior to the termination of the Salomon Facility and all Salomon
Guaranty Exposure and the payment in full of all Salomon Obligations,
after taking such Letter of Credit into account, the Facility Usage
plus the Salomon Guaranty Exposure does not exceed the Borrowing Base
at such time;
(ii) the expiration date of such Letter of Credit is prior to the
earlier of (i) (A) 365 days after date of issuance with respect to
Letters of Credits which, in the aggregate, do not result in
outstanding LC Obligations at any one time in excess of $3,000,000, or
(B) 70 days after date of issuance with respect to all other Letters of
Credit, and (ii) the end of the Commitment Period;
(iii) the issuance of such Letter of Credit will be in
compliance with all applicable governmental restrictions, policies, and
guidelines and will not subject LC Issuer to any cost which is not
reimbursable under Article III;
(iv) such Letter of Credit (A) is related to the purchase or
exchange by the Borrower of Petroleum Inventory, provided that Letters
of Credit, not to exceed in the aggregate $3,000,000, may be used for
general corporate purposes of the Borrower or any of its Subsidiaries
and (B) is in the Form of Exhibit D hereto or such other form and terms
as shall be acceptable to LC Issuer in its sole and absolute discretion
and Currently Approved by Majority Lenders; and
(v) all other conditions in this Agreement to the issuance of
such Letter of Credit have been satisfied.
LC Issuer will honor any such request if the foregoing conditions (i)
through (v) (the "LC Conditions") have been met as of the date of issuance,
amendment or extension of such Letter of Credit.
Section 2.8. Requesting Letters of Credit. Borrower must make written
application for any Letter of Credit at least two Business Days before the
date on which Borrower desires for LC Issuer to issue such Letter of Credit.
By making any such written application, unless otherwise expressly stated
therein, Borrower shall be deemed to have represented and warranted that the
LC Conditions will be met as of the date of issuance of such Letter of
Credit. Each such written application for a Letter of Credit must be made
in writing in the form and substance of Exhibit E, the terms and provisions
of which are hereby incorporated herein by reference (or in such other form
as may mutually be agreed upon by LC Issuer and Borrower). If all LC
Conditions for a Letter of Credit have been met as on any Business Day
before 11:00 a.m, New York City time, LC Issuer will issue such Letter of
Credit on the same Business Day at LC Issuer's office in Tampa, Florida. If
the LC Conditions are met on any Business Day on or after 11:00 a.m, New
York City time, LC Issuer will issue such Letter of Credit on the next
succeeding Business Day at LC Issuer's office in Tampa, Florida. If any
provisions of any LC Application or agreement related to the Application
conflict with any provisions of this Agreement, the provisions of this
Agreement shall govern and control.
Section 2.9. Reimbursement and Participations.
(a) Reimbursement. Borrower promises to pay to LC Issuer, or to LC
Issuer's order, on the date that payment is made by the LC Issuer on the
Letter of Credit the full amount of each Matured LC Obligation together with
interest thereon (i) at the Base Rate plus the Base Rate Margin in effect on
such date to and including the second Business Day after the Matured LC
Obligation is incurred and (ii) at the Default Rate on each day thereafter.
(b) Participation by Lenders. LC Issuer irrevocably agrees to grant
and hereby grants to each Lender, and, to induce LC Issuer to issue Letters
of Credit hereunder, each Lender irrevocably agrees to accept and purchase
and hereby accepts and purchases from LC Issuer, on the terms and conditions
hereinafter stated and for such Lender's own account and risk an undivided
interest equal to such Lender's Percentage Share of LC Issuer's obligations
and rights under each Letter of Credit issued hereunder and the amount of
each Matured LC Obligation paid by LC Issuer thereunder. Each Lender
unconditionally and irrevocably agrees with LC Issuer that, if a Matured LC
Obligation is paid under any Letter of Credit for which LC Issuer is not
reimbursed in full by Borrower in accordance with the terms of this
Agreement and the related LC Application (including any reimbursement by
means of concurrent Loans or by the application of LC Collateral), such
Lender shall (in all circumstances and without set-off or counterclaim) pay
to LC Issuer on demand, in immediately available funds at LC Issuer's
address for notices hereunder, such Lender's Percentage Share of such
Matured LC Obligation (or any portion thereof which has not been reimbursed
by Borrower). Each Lender's obligation to pay LC Issuer pursuant to the
terms of this subsection is irrevocable and unconditional. If any amount
required to be paid by any Lender to LC Issuer pursuant to this subsection
is paid by such Lender to LC Issuer within three Business Days after the
date such payment is due, LC Issuer shall in addition to such amount be
entitled to recover from such Lender, on demand, interest thereon calculated
from such due date at the Federal Funds Rate. If any amount required to be
paid by any Lender to LC Issuer pursuant to this subsection is not paid by
such Lender to LC Issuer within three Business Days after the date such
payment is due, LC Issuer shall in addition to such amount be entitled to
recover from such Lender, on demand, interest thereon calculated from such
due date at the Base Rate.
(c) Distributions to Participants. Whenever LC Issuer has in
accordance with this section received from any Lender payment of such
Lender's Percentage Share of any Matured LC Obligation, if LC Issuer
thereafter receives any payment of such Matured LC Obligation or any payment
of interest thereon (whether directly from Borrower or by application of LC
Collateral or otherwise, and excluding only interest for any period prior to
LC Issuer's demand that such Lender make such payment of its Percentage
Share), LC Issuer will distribute to such Lender its Percentage Share of the
amounts so received by LC Issuer; provided, however, that if any such
payment received by LC Issuer must thereafter be returned by LC Issuer, such
Lender shall return to LC Issuer the portion thereof which LC Issuer has
previously distributed to it.
(d) Calculations. A written advice setting forth in reasonable
detail the amounts owing under this section, submitted by LC Issuer to
Borrower or any Lender from time to time, shall be conclusive, absent
manifest error, as to the amounts thereof.
Section 2.10. No Duty to InquireDrafts and Demands. LC Issuer is
authorized and instructed to accept and pay drafts and demands for payment
under any Letter of Credit without requiring, and without responsibility
for, any determination as to the existence of any event giving rise to said
draft, either at the time of acceptance or payment or thereafter. LC Issuer
is under no duty to determine the proper identity of anyone presenting such
a draft or making such a demand (whether by tested telex or otherwise) as
the officer, representative or agent of any beneficiary under any Letter of
Credit, and payment by LC Issuer to any such beneficiary when requested by
any such purported officer, representative or agent is hereby authorized and
approved. Borrower releases each LC Issuer from, and agrees to hold each LC
Issuer harmless and indemnified against, any liability or claim in
connection with or arising out of the subject matter of this section, which
indemnity shall apply whether or not any such liability or claim is in any
way or to any extent caused, in whole or in part, by any negligent act or
omission of any kind by any LC Issuer, provided only that no LC Issuer shall
be entitled to indemnification for that portion, if any, of any liability or
claim which is proximately caused by its own individual gross negligence or
willful misconduct, as determined in a final judgment.
(a) Extension of Maturity. If the maturity of any Letter of Credit
is extended by its terms or by Law or governmental action, if any extension
of the maturity or time for presentation of drafts or any other modification
of the terms of any Letter of Credit is made at the request of Borrower, or
if the amount of any Letter of Credit is increased at the request of
Borrower, this Agreement shall be binding upon all Restricted Persons with
respect to such Letter of Credit as so extended, increased or otherwise
modified, with respect to drafts and property covered thereby, and with
respect to any action taken by LC Issuer, LC Issuer's correspondents
(including, without limitation, Citibank), or any Lender Party in accordance
with such extension, increase or other modification.
(b) Transferees of Letters of Credit. If any Letter of Credit
provides that it is transferable, LC Issuer shall have no duty to determine
the proper identity of anyone appearing as transferee of such Letter of
Credit, nor shall LC Issuer be charged with responsibility of any nature or
character for the validity or correctness of any transfer or successive
transfers, and payment by LC Issuer to any purported transferee or
transferees as determined by LC Issuer is hereby authorized and approved,
and Borrower releases each LC Issuer from, and agrees to hold each LC Issuer
harmless and indemnified against, any liability or claim in connection with
or arising out of the foregoing, which indemnity shall apply whether or not
any such liability or claim is in any way or to any extent caused, in whole
or in part, by any negligent act or omission of any kind by any LC Issuer,
provided only that no LC Issuer shall be entitled to indemnification for
that portion, if any, of any liability or claim which is proximately caused
by its own individual gross negligence or willful misconduct, as determined
in a final judgment.
Section 2.11. LC Collateral.
(a) LC Obligations in Excess of Borrowing Base. If, after the
making of all mandatory prepayments required under Section 2.6, the
outstanding LC Obligations will exceed the Borrowing Base, then in addition
to prepayment of the entire principal balance of the Loans Borrower will
immediately pay to LC Issuer an amount equal to such excess. If at any time
prior to the termination of the Salomon Facility and all Salomon Guaranty
Exposure and the payment in full of all Salomon Obligations, after the
making of all mandatory prepayments required under Section 2.6, the
outstanding Facility Usage plus the Salomon Guaranty Exposure exceeds the
Borrowing Base, then in addition to prepayment of the entire principal
balance of the Loans Borrower will immediately pay to LC Issuer an amount
equal to such excess. LC Issuer will hold such amounts as collateral
security for the remaining LC Obligations (all such amounts held as
collateral security for LC Obligations being herein collectively called "LC
Collateral") and the other Obligations, and such collateral may be applied
from time to time to pay Matured LC Obligations or any other Obligations
which are then due and payable. Neither this subsection nor the following
subsection shall, however, limit or impair any rights which LC Issuer may
have under any other document or agreement relating to any Letter of Credit,
LC Collateral or LC Obligation, including any LC Application, or any rights
which any Lender Party may have to otherwise apply any payments by Borrower
and any LC Collateral under Section 3.1.
(b) Acceleration of LC Obligations. If the Obligations or any part
thereof become immediately due and payable pursuant to Section 8.1 then,
unless all Lenders otherwise specifically elect to the contrary (which
election may thereafter be retracted by all Lenders at any time), all LC
Obligations shall become immediately due and payable without regard to
whether or not actual drawings or payments on the Letters of Credit have
occurred, and Borrower shall be obligated to pay to LC Issuer immediately an
amount equal to the aggregate LC Obligations which are then outstanding to
be held as LC Collateral.
(c) Investment of LC Collateral. Pending application thereof, all
LC Collateral may be invested by LC Issuer in such Cash Equivalents as LC
Issuer may choose in its sole discretion. All interest on (and other
proceeds of) such Investments shall be reinvested or applied to Matured LC
Obligations or other Obligations which are due and payable. When all
Obligations have been satisfied in full, including all LC Obligations, all
Letters of Credit have expired or been terminated, and all of Borrower's
reimbursement obligations in connection therewith have been satisfied in
full, LC Issuer shall release any remaining LC Collateral. Borrower hereby
assigns and grants to LC Issuer for the benefit of Lenders a continuing
security interest in all LC Collateral paid by it to LC Issuer, all
Investments purchased with such LC Collateral, and all proceeds thereof to
secure its Matured LC Obligations and its Obligations under this Agreement,
each Note, and the other Loan Documents, and Borrower agrees that such LC
Collateral, Investments and proceeds shall be subject to all of the terms
and conditions of the Security Documents. Borrower further agrees that LC
Issuer shall have all of the rights and remedies of a secured party under
the UCC with respect to such security interest and that an Event of Default
under this Agreement shall constitute a default for purposes of such
security interest.
(d) Payment of LC Collateral. When Borrower is required to provide
LC Collateral for any reason and fails to do so on the day when required, LC
Issuer or Agents may without prior notice to Borrower or any other
Restricted Person provide such LC Collateral (whether by application of
proceeds of other Collateral, by transfers from other accounts maintained
with LC Issuer, or otherwise) using any available funds of Borrower or any
other Person also liable to make such payments, and LC Issuer or Agents will
give notice thereof to Borrower promptly after such application or transfer.
Any such amounts which are required to be provided as LC Collateral and
which are not provided on the date required shall, for purposes of each
Security Document, be considered past due Obligations owing hereunder, and
LC Issuer is hereby authorized to exercise its respective rights under each
Security Document to obtain such amounts.
Section 2.12. Interest Rates and Fees; Reduction in Commitment.
(a) Interest Rates. Unless the Default Rate shall apply, (i) each
Base Rate Loan shall bear interest on each day outstanding at the Base Rate
plus the Base Rate Margin in effect on such day; and (ii) each LIBOR Loan
shall bear interest on each day during the related Interest Period at the
related LIBOR Rate plus the LIBOR Rate Margin in effect on such day; During
a Default Rate Period, all Loans shall bear interest on each day outstanding
at the applicable Default Rate. The interest rate shall change whenever the
applicable Base Rate, Base Rate Margin, LIBOR Rate or LIBOR Rate Margin
changes. In no event shall the interest rate on any Loan exceed the Highest
Lawful Rate.
(b) Commitment Fees. In consideration of each Lender's commitment
to make Loans, Borrower will pay to Administrative Agent for the account of
each Lender a commitment fee determined on a daily basis equal to the
Commitment Fee Rate in effect on such day multiplied by such Lender's
Percentage Share of the unused portion of the Maximum Facility Amount on
each day during the Commitment Period, determined for each such day by
deducting from the Maximum Facility Amount at the end of such day the
Facility Usage. The commitment fees described in this Section 2.12(b) shall
be due and payable in arrears on the last day of each Fiscal Quarter and at
the end of the Commitment Period. Borrower shall have the right from time
to time to permanently reduce the Maximum Facility Amount, provided that
(i) notice of such reduction is given not less than two Business Days prior
to such reduction, (ii) the resulting Maximum Facility Amount is not less
than the Facility Usage, and (iii) each partial reduction shall be in
multiples of $100,000.
(c) Letter of Credit Fees. In consideration of LC Issuer's issuance
of any Letter of Credit, Borrower agrees to pay to Administrative Agent for
the account of all Lenders in accordance with their respective Percentage
Shares, a letter of credit fee equal to the Letter of Credit Fee Rate
applicable each day times the face amount of such Letter of Credit. Such
fee will be calculated on the face amount of each Letter of Credit
outstanding on each day at the above applicable rates and will be payable in
arrears on the last day of each Fiscal Quarter. In addition, Borrower will
pay to LC Issuer a minimum administrative issuance fee equal to the greater
of $150 or one-eighth percent (0.125%) of the face amount of each Letter of
Credit and such other fees and charges customarily charged by the LC Issuer
in respect of any issuance, amendment or negotiation of any Letter of Credit
in accordance with the LC Issuer's published schedule of such charges
effective as of the date of such amendment or negotiation.
(d) Administrative Agent's Fees. In addition to all other amounts
due to Administrative Agent under the Loan Documents, Borrower will pay fees
to Administrative Agent as described in a letter agreement of even date
herewith between Administrative Agent and Borrower.
Section 2.13. Borrowing Base Reporting. The Borrowing Base Reports
are subject to the procedures set forth on Schedule 5. Notwithstanding
anything to the contrary contained in this Agreement, Administrative Agent
shall have the right to conduct a field examination of the Borrower's
operations from time to time and, if it deems such action necessary, shall
have the right to adjust the Borrowing Base to reflect the result of such
field examination.
ARTICLE III - Payments to Lenders
Section 3.1. General Procedures. Borrower will make each payment
which it owes under the Loan Documents to Administrative Agent for the
account of the Lender Party to whom such payment is owed in lawful money of
the United States of America, (unless otherwise expressly provided in this
Agreement), without set-off, deduction or counterclaim, and in immediately
available funds. Each such payment must be received by Administrative Agent
not later than 12:00 noon, New York City time, on the date such payment
becomes due and payable. Any payment received by Administrative Agent after
such time will be deemed to have been made on the next following Business
Day. Should any such payment become due and payable on a day other than a
Business Day, the maturity of such payment shall be extended to the next
succeeding Business Day, and, in the case of a payment of principal or past
due interest, interest shall accrue and be payable thereon for the period of
such extension as provided in the Loan Document under which such payment is
due. Each payment under a Loan Document shall be due and payable at the
place provided therein and, if no specific place of payment is provided,
shall be due and payable at the place of payment of Administrative Agent's
Note. When Administrative Agent collects or receives money on account of
the Obligations, Administrative Agent shall distribute all money so
collected or received, and each Lender Party shall apply all such money so
distributed, as follows:
(a) first, for the payment of all Obligations which are then due
(and if such money is insufficient to pay all such Obligations, first
to any reimbursements due Agents under Section 6.9 or 10.4 and then to
the partial payment of all other Obligations then due in proportion to
the amounts thereof, or as Lender Parties shall otherwise agree);
(b) then for the prepayment of amounts owing under the Loan
Documents (other than principal on the Notes) if so specified by
Borrower;
(c) then for the prepayment of principal on the Notes, together
with accrued and unpaid interest on the principal so prepaid, and then
held as LC Collateral pursuant to Section 2.11(c); and
(d) last, for the payment or prepayment of any other Obligations.
All payments applied to principal or interest on any Note shall be applied
first to any interest then due and payable, then to principal then due and
payable, and last to any prepayment of principal and accrued interest
thereon in compliance with Sections 2.5 and 2.6, as applicable. All
distributions of amounts described in any of subsections (b), (c) or (d)
above shall be made by Administrative Agent pro rata to each Lender Patty
then owed Obligations described in such subsection in proportion to all
amounts owed to all Lender Parties which are described in such subsection;
provided that if any Lender then owes payments to LC Issuer for the purchase
of a participation under Section 2.9(c) or to Agents under Section 9.5, any
amounts otherwise distributable under this section to such Lender shall be
deemed to belong to LC Issuer or Agents, respectively, to the extent of such
unpaid payments, and Agents shall apply such amounts to make such unpaid
payments rather than distribute such amounts to such Lender.
Notwithstanding anything to the contrary contained herein, at anytime when
Borrower shall repay or prepay principal of Loans, such repayment or
prepayment shall be applied to the Loans.
Section 3.2. Capital Reimbursement. If either (a) the introduction or
implementation of or the compliance with or any change in or in the
interpretation of any Law, or (b) the introduction or implementation of or
the compliance with any request, directive or guideline from any central
bank or other governmental authority (whether or not having the force of
Law) affects or would affect the amount of capital required or expected to
be maintained by any Lender Party or any corporation controlling any Lender
Patty, then, within five Business Days after demand by such Lender Party,
Borrower will pay to Administrative Agent for the benefit of such Lender
Party, from time to time as specified by such Lender Party, such additional
amount or amounts which such Lender Party shall reasonably determine to be
appropriate to compensate such Lender Party or any corporation controlling
such Lender Party in light of such circumstances, to the extent that such
Lender Party reasonably determines that the amount of any such capital would
be increased or the rate of return on any such capital would be reduced by
or in whole or in part based on the existence of the face amount of such
Lender Party's Loans, Letters of Credit, participations in Letters of Credit
or commitments under this Agreement.
Section 3.3. Increased Cost of LIBOR Loans or Letters of Credit. If
any applicable Law (whether now in effect or hereinafter enacted or
promulgated, including, without limitation, Regulation D) or any
interpretation or administration thereof by any governmental authority
charged with the interpretation or administration thereof (whether or not
having the force of Law):
(a) shall change the basis of taxation of payments to any Lender
Party of any principal, interest, or other amounts attributable to any
LIBOR Loan or Letter of Credit or otherwise due under this Agreement in
respect of any LIBOR Loan or Letter of Credit (other than a change in
the rate of taxation); or
(b) shall change, impose, modify, apply or deem applicable any
reserve, special deposit or similar requirements in respect of any
LIBOR Loan or any Letter of Credit (excluding those for which such
Lender Party is fully compensated pursuant to adjustments made in the
definition of LIBOR Rate) or against assets of, deposits with or for
the account of, or credit extended by, such Lender Party; or
(c) shall impose on any Lender Party or the interbank
eurocurrency deposit market any other condition affecting any LIBOR
Loan or Letter of Credit, the result of which is to increase the cost
to any Lender Party of funding or maintaining any LIBOR Loan or of
issuing any Letter of Credit or to reduce the amount of any sum
receivable by any Lender Party in respect of any LIBOR Loan or Letter
of Credit by an amount deemed by such Lender Party to be material,
then such Lender Party shall promptly notify Administrative Agent and
Borrower in writing of the happening of such event and of the amount
required to compensate such Lender Party for such event (on an after-tax
basis, taking into account any taxes on such compensation), whereupon
(i) Borrower shall, within five Business Days after demand therefor by such
Lender Party, pay such amount to Administrative Agent for the account of
such Lender Party and (ii) Borrower may elect, by giving to Administrative
Agent and such Lender Party not less than three Business Days' notice, to
Convert all (but not less than all) of any such LIBOR Loans into Base Rate
Loans.
Section 3.4. Notice; Change of Applicable Lending Office. A Lender
Party shall notify Borrower of any event occurring after the date of this
Agreement that will entitle such Lender Party to compensation under
Section 3.2, 3.3 or 3.5 hereof as promptly as practicable, after such Lender
Party obtains actual knowledge thereof; provided that such Lender Party will
designate a different Applicable Lending Office for the Loans affected by
such event if such designation will avoid the need for, or reduce the amount
of, such compensation and will not, in the sole opinion of such Lender
Party, be disadvantageous to such Lender Party, except that such Lender
Party shall have no obligation to designate an Applicable Lending Office
located in the United States of America. Each Lender Party will furnish to
Borrower a certificate setting forth the basis and amount of each request by
such Lender Party for compensation under Section 3.2, 3.3 or 3.5 hereof.
Section 3.5. Availability. If (a) any change in applicable Laws, or
in the interpretation or administration thereof of or in any jurisdiction
whatsoever, domestic or foreign, shall make it unlawful or impracticable for
any Lender Patty to fund or maintain LIBOR Loans or to issue or participate
in Letters of Credit, or shall materially restrict the authority of any
Lender Party to purchase or take offshore deposits of dollars (i.e.,
"eurodollars"), or (b) any Lender Party determines that matching deposits
appropriate to fund or maintain any LIBOR Loan are not available to it, or
(c) any Lender Party determines that the formula for calculating the LIBOR
Rate does not fairly reflect the cost to such Lender Party of making or
maintaining loans based on such rate, then, upon notice by such Lender Party
to Borrower and Administrative Agent, Borrower's right to elect LIBOR Loans
from such Lender Party (or, if applicable, to obtain Letters of Credit)
shall be suspended to the extent and for the duration of such illegality,
impracticability or restriction and all LIBOR Loans of such Lender Party
which are then outstanding or are then the subject of any Borrowing Notice
and which cannot lawfully or practicably be maintained or funded shall
immediately become or remain, or shall be funded as, Base Rate Loans of such
Lender Party. Borrower agrees to indemnify each Lender Party and hold it
harmless against all costs, expenses, claims, penalties, liabilities and
damages which may result from any such change in Law, interpretation or
administration. Such indemnification shall be on an after-tax basis, taking
into account any taxes imposed on the amounts paid as indemnity.
Section 3.6. Funding Losses. In addition to its other obligations
hereunder, Borrower will indemnify each Lender Party against, and reimburse
each Lender Party on demand for, any loss or expense incurred or sustained
by such Lender Party (including any loss or expense incurred by reason of
the liquidation or reemployment of deposits or other funds acquired by a
Lender Party to fund or maintain LIBOR Loans), as a result of (a) any
payment or prepayment (whether or not authorized or required hereunder) of
all or a portion of a LIBOR Loan on a day other than the day on which the
applicable Interest Period ends, (b) any payment or prepayment, whether or
not required hereunder, of a Loan made after the delivery, but before the
effective date, of a Continuation/Conversion Notice, if such payment or
prepayment prevents such Continuation/Conversion Notice from becoming fully
effective, (c) the failure of any Loan to be made or of any
Continuation/Conversion Notice to become effective due to any condition
precedent not being satisfied or due to any other action or inaction of any
Restricted Person, or (d) any Conversion (whether or not authorized or
required hereunder) of all or any portion of any LIBOR Loan into a Base Rate
Loan or into a different LIBOR Loan on a day other than the day on which the
applicable Interest Period ends. Such indemnification shall be on an
after-tax basis, taking into account any taxes imposed on the amounts paid
as indemnity.
Section 3.7. Reimbursable Taxes. Borrower covenants and agrees that:
(a) Borrower will indemnify each Lender Party against and
reimburse each Lender Party for all present and future stamp and other
taxes, duties, levies, imposts, deductions, charges, costs, and
withholdings whatsoever imposed, assessed, levied or collected on or in
respect of this Agreement or any LIBOR Loans or Letters of Credit
(whether or not legally or correctly imposed, assessed, levied or
collected), excluding, however, any taxes imposed on or measured by the
overall net income of Administrative Agent or such Lender Party or any
Applicable Lending Office of such Lender Party (or franchise or
equivalent taxes) by any jurisdiction in which such Lender Party or any
such Applicable Lending Office is located (all such non-excluded taxes,
levies, costs and charges being collectively called "Reimbursable
Taxes" in this section). Borrower also will indemnify each Lender
Party for taxes of any kind imposed on the amounts paid pursuant to
this Section 3.7.
(b) All payments on account of the principal of, and interest on,
each Lender Party's Loans and Note, and all other amounts payable by
Borrower to any Lender Party hereunder, shall be made in full without
set-off or counterclaim and shall be made free and clear of and without
deductions or withholdings of any nature by reason of any Reimbursable
Taxes, all of which will be for the account of Borrower. In the event
of Borrower is required by Law to make any such deduction or
withholding from any payment to any Lender Party, Borrower shall pay on
the due date of such payment, by way of additional interest, such
additional amounts as are needed to cause the amount receivable by such
Lender Party after such deduction or withholding (including after
deduction or withholding on such additional amounts) to equal the
amount which would have been receivable in the absence of such
deduction or withholding. If Borrower should make any deduction or
withholding as aforesaid, Borrower shall within 60 days thereafter
forward to such Lender Party an official receipt or other official
document evidencing payment of such deduction or withholding.
(c) If Borrower is ever required to pay any Reimbursable Tax with
respect to any LIBOR Loan, Borrower may elect, by giving to
Administrative Agent and such Lender Party not less than three Business
Days' notice, to Convert all (but not less than all) of any such LIBOR
Loan into a Base Rate Loan if such conversion will reduce the amount of
taxes Borrower is required to pay, but such election shall not diminish
Borrower's obligation to pay all Reimbursable Taxes.
(d) Notwithstanding the foregoing provisions of this section, any
Lender Party organized under the laws of a jurisdiction outside of the
United States shall not be entitled to make any indemnification or
reimbursement pursuant to this Section 3.7 with respect to any taxes
imposed by the United States of America if such Lender Party does not
have the Prescribed Forms on file with Administrative Agent (with
copies provided to Borrower) for the applicable year establishing that
such Lender Party is exempt from or entitled to a reduced rate of
United States withholding tax on payments pursuant to this Agreement or
any other Loan Document (other than if such failure to have the
Prescribed Forms on file is due to a change in the applicable Law, or
in the interpretation or application thereof, occurring after the date
such Lender Party becomes a party to this Agreement); provided, that if
the Prescribed Forms provided by a Lender Party at the time such Lender
Party first becomes a party to this Agreement indicate a United States
interest withholding tax rate in excess of zero, such Lender Party
shall not be entitled to any indemnification or reimbursement for
United States withholding tax only to the extent of such rate; and
provided, further, that if Borrower shall so deduct or withhold any
such taxes, it shall provide a statement to Administrative Agent and
such Lender Party, setting forth the amount of such taxes so deducted
or withheld, the applicable rate and any other information or
documentation which such Lender Party may reasonably request for
assisting such Lender Party to obtain any allowable credits or
deductions for the taxes so deducted or withheld in the jurisdiction or
jurisdictions in which such Lender Party is subject to tax. As used in
this section, "Prescribed Forms" means Internal Revenue Service Forms
W-8BEN or W-8ECI or any successor or other form prescribed by the
Internal Revenue Service.
Section 3.8. Replacement of Lenders. If any Lender Party seeks
reimbursement for increased costs under Sections 3.2 through 3.7, then
within ninety days thereafter (provided no Event of Default then exists)
Borrower shall have the right (unless such Lender Party withdraws its
request for additional compensation) to replace such Lender Party by
requiring such Lender Party to assign its Loans and Notes and its
commitments hereunder to an Eligible Transferee reasonably acceptable to
Administrative Agent and to Borrower, provided that: (i) all Obligations of
Borrower owing to such Lender Party being replaced (including such increased
costs and any breakage costs with respect to any outstanding LIBOR Loans),
but excluding principal and accrued interest on the Notes being assigned)
shall be paid in full to such Lender Party concurrently with such
assignment, and (ii) the replacement Eligible Transferee shall purchase the
Note being assigned by paying to such Lender Party a price equal to the
principal amount thereof plus accrued and unpaid interest and accrued and
unpaid commitment fees thereon. In connection with any such assignment
Borrower, Administrative Agent, such Lender Party and the replacement
Eligible Transferee shall otherwise comply with Section 10.5.
Notwithstanding the foregoing rights of Borrower under this section,
however, Borrower may not replace any Lender Party which seeks reimbursement
for increased costs under Section 3.2 through 3.7 unless Borrower is at the
same time replacing all Lender Parties which are then seeking such
compensation.
ARTICLE IV - Conditions Precedent to Credit
Section 4.1. Documents to Be Delivered. No Lender has any obligation
to make its first Loan, and LC Issuer has no obligation to issue the first
Letter of Credit unless the following conditions precedent have been
satisfied and, as applicable, Administrative Agent shall have received all
of the following, at Administrative Agent's office in New York City duly
executed and delivered and in form, substance and date satisfactory to
Administrative Agent:
(a) This Agreement and any other documents that Lenders are to
execute in connection herewith.
(b) Each Note.
(c) Each Security Document listed in the Security Schedule.
(d) Certain certificates including:
(i) An "Omnibus Certificate" of the secretary and of the
president of General Partner, which shall contain the names and
signatures of the officers and other approved persons of General
Partner authorized to execute Loan Documents and which shall
certify to the truth, correctness and completeness of the
following exhibits attached thereto: (1) a copy of resolutions
duly adopted by the Board of Directors of General Partner and in
full force and effect at the time this Agreement is entered into,
authorizing the execution of this Agreement and the other Loan
Documents delivered or to be delivered in connection herewith and
the consummation of the transactions contemplated herein and
therein, (2) a copy of the charter documents of each Restricted
Person and all amendments thereto, certified by the appropriate
official of such Restricted Person's jurisdiction of organization,
and (3) a copy of any bylaws or agreement of limited partnership
of each Restricted Person; and
(ii) A certificate of the president and of the chief
financial officer of General Partner, regarding satisfaction of
Section 4.2(a) through (d).
(e) A certificate (or certificates) of the due formation, valid
existence and good standing of each Restricted Person in its respective
jurisdiction of organization, issued by the appropriate authorities of
such jurisdiction, and certificates of each Restricted Person's good
standing and due qualification to do business, issued by appropriate
officials in any jurisdictions in which such Restricted Person owns
property subject to Security Documents.
(f) Documents similar to those specified in subsections (d)(i)
and (e) of this section with respect to each Guarantor and the
execution by it of its guaranty of Borrower's Obligations.
(g) A favorable opinion of Jenkens & Gilchrist, a Professional
Corporation, special Texas counsel to Restricted Persons, dated as of
the date hereof and satisfactory to Administrative Agent.
(h) The Initial Financial Statements.
(i) Copies of such permits and approvals regarding the property
and business of Restricted Persons as Administrative Agent may request.
(j) Payment of all commitment, facility, agency and other fees
required to be paid to any Lender pursuant to any Loan Documents or any
commitment agreement heretofore entered into.
(k) General Partner shall have delivered to Administrative Agent
a certificate by the chief financial officer of General Partner,
certifying the Initial Financial Statements delivered pursuant to
clause (h) above and reflecting compliance with each event specified in
Sections 7.11 through 7.14, inclusive.
(l) Certificates, in substantially the form of Exhibit J hereto,
attesting to the Solvency of each Restricted Person before and after
giving effect to the transactions contemplated by this Agreement, from
the chief financial officer of General Partner.
(m) A Consent of the Guarantor in the form approved by the Agent.
Section 4.2. Additional Conditions Precedent. No Lender has any
obligation to make any Loan (including its first), and LC Issuer has no
obligation to issue any Letter of Credit (including its first), unless the
following conditions precedent have been satisfied (and the delivery by the
Borrower of a Borrowing Notice or the election by the Borrower to make a
Conversion shall constitute a representation by the Borrower that these
conditions have been satisfied):
(a) All representations and warranties made by any Restricted
Person in any Loan Document shall be true on and as of the date of such
Loan or the date of issuance of such Letter of Credit as if such
representations and warranties had been made as of the date of such
Loan or the date of issuance of such Letter of Credit except to the
extent that such representation or warranty was made as of a specific
date or updated, modified or supplemented as of a subsequent date with
the consent of Majority Lenders.
(b) No Default shall exist at the date of such Loan or the date
of issuance of such Letter of Credit.
(c) No Material Adverse Change shall have occurred to, and no
event or circumstance shall have occurred that could reasonably be
expected to cause a Material Adverse Change to, Genesis Energy's,
General Partner's or Borrower's Consolidated financial condition or
businesses since the date of the Initial Financial Statements.
(d) Each Restricted Person shall have performed and complied with
all agreements and conditions required in the Loan Documents to be
performed or complied with by it on or prior to the date of such Loan
or the date of issuance of such Letter of Credit.
(e) The making of such Loan or the issuance of such Letter of
Credit shall not be prohibited by any Law and shall not subject any
Lender or any LC Issuer to any penalty or other onerous condition under
or pursuant to any such Law.
(f) Each Restricted Person shall be Solvent.
(g) Administrative Agent shall have received all documents and
instruments which Administrative Agent has then requested, in addition
to those described in Section 4.1 (including opinions of legal counsel
for Restricted Persons and Administrative Agent; corporate documents
and records; documents evidencing governmental authorizations,
consents, approvals, licenses and exemptions; and certificates of
public officials and of officers and representatives of Borrower and
other Persons), as to (i) the accuracy and validity of or compliance
with all representations, warranties and covenants made by any
Restricted Person in this Agreement and the other Loan Documents,
(ii) the satisfaction of all conditions contained herein or therein,
and (iii) all other matters pertaining hereto and thereto. All such
additional documents and instruments shall be satisfactory to
Administrative Agent in form, substance and date.
ARTICLE V - Representations and Warranties
To confirm each Lender's understanding concerning Restricted Persons
and Restricted Persons' businesses, properties and obligations and to induce
each Lender to enter into this Agreement and to extend credit hereunder,
General Partner, Genesis Energy, L.P. and Borrower represent and warrant to
each Lender that:
Section 5.1. No Default. No Restricted Person is in default in the
performance of any of the covenants and agreements contained in any Loan
Document. No event has occurred and is continuing which constitutes a
Default.
Section 5.2. Organization and Good Standing. Each Restricted Person
is duly organized, validly existing and in good standing under the Laws of
its jurisdiction of organization, having all powers required to carry on its
business and enter into and carry out the transactions contemplated hereby.
Each Restricted Person is duly qualified, in good standing, and authorized
to do business in all other jurisdictions wherein the character of the
properties owned or held by it or the nature of the business transacted by
it makes such qualification necessary except where the failure to so qualify
would not cause a Material Adverse Change.
Section 5.3. Authorization. Each Restricted Person has duly taken all
action necessary to authorize the execution and delivery by it of the Loan
Documents to which it is a party and to authorize the consummation of the
transactions contemplated thereby and the performance of its obligations
thereunder. Borrower is duly authorized to borrow funds hereunder.
Section 5.4. No Conflicts or Consents. The execution and delivery by
the various Restricted Persons of the Loan Documents to which each is a
party, the performance by each of its obligations under such Loan Documents,
and the consummation of the transactions contemplated by the various Loan
Documents, do not and will not (i) conflict with any provision of (1) any
Law, (2) the organizational documents of any Restricted Person or any of its
Affiliates, or (3) any agreement, judgment, license, order or permit
applicable to or binding upon any Restricted Person or any of its
Affiliates, (ii) result in the acceleration of any Indebtedness owed by any
Restricted Person or any of its Affiliates, or (iii) result in or require
the creation of any Lien upon any assets or properties of any Restricted
Person or any of its Affiliates except as expressly contemplated in the Loan
Documents. Except as expressly contemplated in the Loan Documents or
disclosed in the Disclosure Schedule, no permit, consent, approval,
authorization or order of, and no notice to or filing, registration or
qualification with, any Tribunal or third party is required in connection
with the execution, delivery or performance by any Restricted Person of any
Loan Document or to consummate any transactions contemplated by the Loan
Documents.
Section 5.5. Enforceable Obligations. This Agreement is, and the
other Loan Documents when duly executed and delivered will be, legal, valid
and binding obligations of each Restricted Person which is a party hereto or
thereto, enforceable in accordance with their terms except as such
enforcement may be limited by bankruptcy, insolvency or similar Laws of
general application relating to the enforcement of creditors' rights.
Section 5.6. Initial Financial Statements. Borrower has heretofore
delivered to each Lender true, correct and complete copies of the Initial
Financial Statements. The Initial Financial Statements fairly present
Borrower's Consolidated financial position at the date thereof and the
Consolidated results of Borrower's operations for the periods thereof, and
in the case of the annual Initial Financial Statements, Consolidated cash
flows for the period thereof. Since the date of the annual Initial
Financial Statements, no Material Adverse Change has occurred, except as
reflected in the quarterly Initial Financial Statements or in the Disclosure
Schedule. All Initial Financial Statements other than pro forma financial
statements were prepared in accordance with GAAP. All Initial Financial
Statements that are pro forma financial statements were prepared in
accordance with GAAP with such pro forma adjustments as have been disclosed
in the Disclosure Schedule.
Section 5.7. Other Obligations and Restrictions. No Restricted Person
has any outstanding Liabilities of any kind (including contingent
obligations, tax assessments, and unusual forward or long-term commitments)
which are, in the aggregate, material to Borrower or material with respect
to Borrower's Consolidated financial condition and not shown in the Initial
Financial Statements, disclosed in the Disclosure Schedule or otherwise
permitted under Section 7.1. Except as shown in the Initial Financial
Statements or disclosed in the Disclosure Schedule, no Restricted Person is
subject to or restricted by any franchise, contract, deed, charter
restriction, or other instrument or restriction which could cause a Material
Adverse Change.
Section 5.8. Full Disclosure. No certificate, statement or other
information delivered herewith or heretofore by any Restricted Person to any
Lender in connection with the negotiation of this Agreement or in connection
with any transaction contemplated hereby contains any untrue statement of a
material fact or omits to state any material fact necessary to make the
statements contained herein or therein, in light of the circumstances under
which they were made, not misleading as of the date made or deemed made.
All written information furnished after the date hereof by or on behalf of
any Restricted Person to Administrative Agent or any Lender Party in
connection with this Agreement and the other Loan Documents and the
transactions contemplated hereby and thereby will be true, complete and
accurate in every material respect in light of the circumstances in which
made, or based on reasonable estimates on the date as of which such
information is stated or certified. There is no fact known to any
Restricted Person that is not shown in the Initial Financial Statements or
disclosed in the Disclosure Schedule which could reasonably be expected to
cause a Material Adverse Change.
Section 5.9. Litigation. Except as disclosed in the Initial Financial
Statements or in the Disclosure Schedule: (i) there are no actions, suits
or legal, equitable, arbitrative or administrative proceedings pending, or
to the knowledge of any Restricted Person threatened, against any Restricted
Person or affecting any Collateral (including, without limitation, any which
challenge or otherwise pertain to any Restricted Person's title to any
Collateral) before any Tribunal which could reasonably be expected to cause
a Material Adverse Change, and (ii) there are no outstanding judgments,
injunctions, writs, rulings or orders by any such Tribunal against any
Restricted Person or any Restricted Person's stockholders, partners,
directors or officers or affecting any Collateral which could reasonably be
expected to cause a Material Adverse Change.
Section 5.10. Labor Disputes and Acts of God. Except as disclosed in
the Disclosure Schedule, neither the business nor the properties of any
Restricted Person has been affected by any fire, explosion, accident,
strike, lockout or other labor dispute, drought, storm, hail, earthquake,
embargo, act of God or of the public enemy or other casualty (whether or not
covered by insurance), which could reasonably be expected to cause a
Material Adverse Change.
Section 5.11. ERISA Plans and Liabilities. All currently existing
ERISA Plans are listed in the Disclosure Schedule. Except as disclosed in
the Initial Financial Statements or in the Disclosure Schedule, no
Termination Event has occurred with respect to any ERISA Plan and all ERISA
Affiliates are in compliance with ERISA in all material respects. No ERISA
Affiliate is required to contribute to, or has any other absolute or
contingent liability in respect of, any "multiemployer plan" as defined in
Section 4001 of ERISA. Except as set forth in the Disclosure Schedule:
(i) no "accumulated funding deficiency" (as defined in Section 412(a) of the
Code) exists with respect to any ERISA Plan, whether or not waived by the
Secretary of the Treasury or his delegate, and (ii) the amount of unfunded
benefit liabilities as defined in Section 4001(a)(18) of ERISA of each ERISA
Plan does not exceed $250,000.
Section 5.12. Compliance with Laws. Except as set forth in the
Disclosure Schedule, each Restricted Person has all permits, licenses and
authorizations required in connection with the conduct of its businesses,
except where the failure to have such permits, licenses and authorizations
would not result in a Material Adverse Change. Each Restricted Person is in
compliance with the terms and conditions of all such permits, licenses and
authorizations, and is also in compliance with all other limitations,
restrictions, conditions, standards, prohibitions, requirements,
obligations, schedules and timetables contained in any Law or in any
regulation, code, plan, order, decree, judgment, injunction, notice or
demand letter issued, entered, promulgated or approved thereunder, and no
Restricted Person is aware of any facts or circumstances that could
reasonably be expected to result in non-compliance as described in this
section 5.12, except where the failure to be in compliance would not result
in a Material Adverse Change. Without limiting the foregoing, each
Restricted Person (i) has filed and maintained all tariffs applicable to its
business with each applicable commission, (ii) and all such tariffs are in
compliance with all Laws administered or promulgated by each applicable
commission and (iii) has imposed charges on its customers in compliance with
such tariffs or otherwise in compliance with law. As used herein,
"commission" includes the Federal Energy Regulatory Commission, the Texas
Railroad Commission and each other US federal, Canadian federal, state,
provincial, or local governmental department, commission, board, bureau,
agency or instrumentality having jurisdiction over any Restricted Person or
its properties.
Section 5.13. Environmental Laws. As used in this section: "CERCLA"
means the Comprehensive Environmental Response, Compensation and Liability
Act of 1980, as amended, "CERCLIS" means the Comprehensive Environmental
Response, Compensation and Liability Information System List of the
Environmental Protection Agency, and "Release" has the meaning given such
term in 42 U.S.C. Sec. 9601(22). Without limiting the provisions of
Section 5.12 and except as set forth in the Disclosure Schedule:
(a) No notice, notification, demand, request for information,
citation, summons or order has been issued, no complaint has been filed
and, to the knowledge of any Restricted Person, none are threatened, no
penalty has been assessed and, to the knowledge of any Restricted
Person, none are threatened, and no investigation or review is pending
or threatened by any Tribunal or any other Person with respect to any
of the following (i) any alleged generation, treatment, storage,
recycling, transportation, disposal, or Release of any Hazardous
Materials, either by any Restricted Person or on any property owned or
operated by any Restricted Person, (ii) any remedial action which might
be needed to respond to any such alleged generation, treatment,
storage, recycling, transportation, disposal, or Release, (iii) any
alleged failure by any Restricted Person to have, or to be in
compliance with, any permit, license or authorization required in
connection with the conduct of its business or with respect to any such
generation, treatment, storage, recycling, transportation, disposal, or
Release, or (iv) any allegation of any non-compliance with any
Environmental Law.
(b) No Restricted Person otherwise has any known material
contingent liability in connection with any alleged generation,
treatment, storage, recycling, transportation, disposal, or Release of
any Hazardous Materials.
(c) No Restricted Person has handled any Hazardous Materials,
other than as a generator, on any properties now or previously owned or
leased by any Restricted Person to an extent that such handling has
caused, or could cause, a Material Adverse Change.
(d) Except as disclosed in the Disclosure Schedule:
(i) no PCBs are or have been present at any properties now
or previously owned, operated or leased by any Restricted Person;
(ii) no asbestos is or has been present at any properties now
or previously owned, operated or leased by any Restricted Person;
(iii) there are no underground storage tanks, active or
abandoned, at any properties now or previously owned, operated or
leased by any Restricted Person; and
(iv) no Hazardous Materials have been Released at, on or
under any properties now or previously owned, operated or leased
by any Restricted Person.
(e) No Restricted Person has transported or arranged for the
transportation or disposition of any Hazardous Material to any location
which is listed on the National Priorities List under CERCLA, any
location listed for possible inclusion on the National Priorities List
by the Environmental Protection Agency in CERCLIS, nor any location
listed on any similar state list or which is the subject of federal,
state or local enforcement actions or other investigations which may
lead to claims against any Restricted Person for clean-up costs,
remedial work, damages to natural resources or for personal injury
claims, including, but not limited to, claims under CERCLA.
(f) No property now or previously owned, operated or leased by
any Restricted Person is listed or proposed for listing on the National
Priority list promulgated pursuant to CERCLA, in CERCLIS, nor on any
similar state list of sites.
(g) There are no Liens arising under or pursuant to any
Environmental Laws on any of the real properties or properties owned,
operated or leased by any Restricted Person, and no government actions
of which Borrower is aware have been taken or are threatened which
could subject any of such properties to such Liens; nor would any
Restricted Person be required to place any notice or restriction
relating to the presence of Hazardous Materials at any properties owned
by it in any deed to such properties.
(h) There have been no environmental investigations, studies,
audits, tests, reviews or other analyses for surface water, ground
water, soil contamination or natural resource damages relating to the
Release of Hazardous Materials conducted by or which are in the
possession of any Restricted Person in relation to any properties or
facility now or previously owned, operated or leased by any Restricted
Person which have not been made available to Administrative Agent.
(i) Except as set forth on the Disclosure Schedule, (i) all
Restricted Persons are conducting their businesses in material
compliance with all applicable Environmental Laws, and all past non-
compliance with such Environmental Laws has been resolved without
ongoing obligations or costs; and (ii) no Restricted Person has filed
any notice under any Law indicating that any such Person is responsible
for the improper release into the environment, or the improper storage
or disposal, of any material amount of any Hazardous Materials or that
any Hazardous Materials have been improperly released, or are
improperly stored or disposed of, upon any property of any such Person.
(j) The Disclosure Schedule sets out (i) the amounts expended by
Restricted Persons through March 31, 2002 to pay (x) vendors, (y) spill
claimants, and (z) clean up costs incurred in connection with the
Pipeline Release (collectively, the "Spill Costs"), (ii) the estimated
amount of additional Spill Costs which will be incurred by the
Restricted Persons in the future, (iii) the amount of insurance
payments received by Restricted Persons through March 31, 2002 to pay
for Spill Costs, and (iv) the estimated amount of future insurance
payments that the Restricted Persons anticipate receiving to pay for
Spill Costs.
Section 5.14. Names and Places of Business. No Restricted Person has,
during the preceding five years, had, been known by, or used any other trade
or fictitious name, except as disclosed in the Disclosure Schedule. Except
as otherwise indicated in the Disclosure Schedule, the chief executive
office and principal place of business of each Restricted Person are (and
since the dates of initial formation of such Restricted Persons have been)
located at the address of Borrower set out in Section 10.3. Except as
indicated in the Disclosure Schedule or otherwise disclosed in writing to
the Administrative Agent, no Restricted Person has any other office or place
of business.
Section 5.15. Borrower's Subsidiaries. Borrower does not presently
have any Subsidiary or own any stock in any other corporation or association
except those listed in the Disclosure Schedule or disclosed to
Administrative Agent in writing. Neither Borrower nor any Restricted Person
is a member of any general or limited partnership, limited liability
company, joint venture or association of any type whatsoever except those
listed in the Disclosure Schedule or disclosed to Administrative Agent in
writing. Borrower owns, directly or indirectly, the equity interest in each
of its Subsidiaries which is indicated in the Disclosure Schedule or as
disclosed to Administrative Agent in writing.
Section 5.16. Title to Properties; Licenses. Each Restricted Person
has good and defensible title to all of its material properties and assets,
free and clear of all Liens other than Permitted Liens and of all material
impediments to the use of such properties and assets in such Restricted
Person's business. Each Restricted Person possesses all licenses, permits,
franchises, patents, copyrights, trademarks and trade names, and other
intellectual property (or otherwise possesses the right to use such
intellectual property without violation of the rights of any other Person)
which are necessary to carry out its business as presently conducted and as
presently proposed to be conducted hereafter, except to the extent that such
failure to possess could not reasonably be expected to cause a Material
Adverse Change, and no Restricted Person is in violation in any material
respect of the terms under which it possesses such intellectual property or
the right to use such intellectual property.
Section 5.17. Government Regulation. Neither Borrower nor any other
Restricted Person owing Obligations is subject to regulation under the
Public Utility Holding Company Act of 1935, the Federal Power Act, the
Investment Company Act of 1940 (as any of the preceding acts have been
amended) or any other Law which regulates the incurring by such Person of
Indebtedness, including Laws relating to common contract carriers or the
sale of electricity, gas, steam, water or other public utility services.
Section 5.18. Insider. No Restricted Person, nor any Person having
"control" (as that term is defined in 12 U.S.C. Sec. 375b(9) or in
regulations promulgated pursuant thereto) of any Restricted Person, is a
"director" or an "executive officer" or "principal shareholder" (as those
terms are defined in 12 U.S.C. Sec. 375b(8) or (9) or in regulations
promulgated pursuant thereto) of any Lender, of a bank holding company of
which any Lender is a Subsidiary or of any Subsidiary of a bank holding
company of which any Lender is a Subsidiary.
Section 5.19. Solvency. Upon giving effect to the issuance of the
Notes, the execution of this Agreement and the other Loan Documents by
Borrower and each Guarantor and the consummation of the transactions
contemplated hereby and thereby, (i) Borrower and each Guarantor will be
solvent (as such term is used in applicable bankruptcy, liquidation,
receivership, insolvency or similar Laws), and the sum of Borrower's and
each Guarantor's absolute and contingent liabilities, including the
Obligations or guarantees thereof, shall not exceed the fair market value of
such Restricted Person's assets, and (ii) Borrower's and each Guarantor's
capital should be adequate for the businesses in which such Restricted
Person is engaged and intends to be engaged. Neither Borrower nor any
Restricted Person has incurred (whether under the Loan Documents or
otherwise), nor does any Restricted Person intend to incur or believe that
it will incur, debts which will be beyond its ability to pay as such debts
mature.
Section 5.20. Credit Arrangements. Except as set forth on the
Disclosure Schedule, no Affiliate of any Restricted Person is party to or
subject to any credit agreement, loan agreement, indenture, purchase
agreement, guaranty or other arrangement providing for or otherwise relating
to any Indebtedness or any extension of credit (or commitment for any
extension of credit) that creates by a covenant of such Affiliate or
otherwise, any limitation or restriction any action of any Restricted Person
or any obligation that any Restricted Person be caused to take any action.
Section 5.21. Real Property. Set forth on Part I of Schedule 6 hereto
is a complete and accurate list of all real property owned by any Restricted
Person or any of its Subsidiaries (other than Injection Stations), showing
as of the date hereof the street address, county or other relevant
jurisdiction, state, record owner and book and estimated fair value thereof.
Each Restricted Person or such Subsidiary has good, marketable and insurable
fee simple title to such real property, free and clear of all Liens, other
than Permitted Liens and other Liens created or permitted by the Loan
Documents. Set forth on Part II of Schedule 6 hereto is a complete and
accurate list of all leases of real property under which any Restricted
Person or any of its Subsidiaries is the lessee(other than Injection
Stations), showing as of the date hereof the street address, county or other
relevant jurisdiction, state, lessor, lessee, expiration date and annual
rental cost thereof. Each such lease is the legal, valid and binding
obligation of the lessor thereof, enforceable in accordance with its terms.
ARTICLE VI - Affirmative Covenants
To conform with the terms and conditions under which each Lender is
willing to have credit outstanding to Borrower, and to induce each Lender to
enter into this Agreement and extend credit hereunder, General Partner,
Genesis Energy, L.P. and Borrower covenant and agree that until the full and
final payment of the Obligations and the termination of this Agreement,
unless Majority Lenders, or all Lenders as required under Section 10.1, have
previously agreed otherwise:
Section 6.1. Payment and Performance. Each Restricted Person will pay
all amounts due under the Loan Documents, to which it is a party, in
accordance with the terms thereof and will observe, perform and comply with
every covenant, term and condition expressed in the Loan Documents to which
it is a party.
Section 6.2. Books, Financial Statements and Reports. Each Restricted
Person will at all times maintain full and accurate books of account and
records. Borrower will maintain and will cause its Subsidiaries to maintain
a standard system of accounting, will maintain its Fiscal Year, and will
furnish the following statements and reports to each Lender at Restricted
Person's expense:
(a) As soon as available, and in any event within one hundred
twenty (120) days after the end of each Fiscal Year (i) complete
Consolidated financial statements of Borrower together with all notes
thereto, prepared in reasonable detail in accordance with GAAP,
together with an unqualified opinion, based on an audit using generally
accepted auditing standards, by Arthur Andersen LLP, or other
independent certified public accountants selected by General Partner
and acceptable to Majority Lenders, stating that such Consolidated
financial statements have been so prepared and (ii) supporting
unaudited balance sheets and statements of income of each other
Restricted Person. These financial statements shall contain a
Consolidated balance sheet as of the end of such Fiscal Year and
Consolidated statements of earnings for such Fiscal Year. Such
Consolidated financial statements shall set forth in comparative form
the corresponding figures for the preceding Fiscal Year. In addition,
within ninety (90) days after the end of each Fiscal Year, Borrower
will furnish a certificate signed by such accountants (i) stating that
they have read this Agreement, (ii) containing calculations showing
compliance (or non-compliance) at the end of such Fiscal Year with the
requirements of Sections 7.11 through 7.14 inclusive, and (iii) further
stating that in making their examination and reporting on the
Consolidated financial statements described above they obtained no
knowledge of any Default existing at the end of such Fiscal Year, or,
if they did so conclude that a Default existed, specifying its nature
and period of existence.
(b) As soon as available, and in any event within sixty (60) days
after the end of each Fiscal Quarter of each Fiscal Year (i) Borrower's
Consolidated balance sheet as of the end of such Fiscal Quarter and
Consolidated statements of Borrower's earnings and cash flows for such
Fiscal Quarter and for the period from the beginning of the then
current Fiscal Year to the end of such Fiscal Quarter, and
(ii) supporting balance sheets and statements of income of each other
Restricted Person, all in reasonable detail and prepared in accordance
with GAAP, subject to changes resulting from normal year-end
adjustments. In addition, Borrower will, together with each such set
of financial statements and each set of financial statements furnished
under subsection (a) of this section, furnish a certificate in the form
of Exhibit F signed by the chief financial officer, principal
accounting officer or treasurer of General Partner stating that such
financial statements are accurate and complete in all material respects
(subject to normal year-end adjustments), stating that he has reviewed
the Loan Documents, containing calculations showing compliance (or non-
compliance) at the end of such Fiscal Quarter with the requirements of
Sections 7.11 through 7.14, inclusive and stating that no Default
exists at the end of such Fiscal Quarter or at the time of such
certificate or specifying the nature and period of existence of any
such Default.
(c) Promptly upon their becoming available, copies of all
financial statements, reports, notices and proxy statements sent by
Genesis Energy, L.P. to its unit holders and all registration
statements, periodic reports and other statements and schedules filed
by Genesis Energy, L.P. with any securities exchange, the Securities
and Exchange Commission or any similar governmental authority.
(d) As soon as available, and in any event within one hundred
twenty (120) days after the end of each Fiscal Year, a business and
financial plan for Borrower (in form reasonably satisfactory to
Administrative Agent), prepared or caused to be prepared by a senior
financial officer thereof, setting forth for the first year thereof,
quarterly financial projections and budgets for Genesis Energy, L.P.,
and thereafter yearly financial projections during the Commitment
Period.
(e) On or about the twenty-sixth (26th) (but no later than the
twenty-eighth (28th)) day of each calendar month a Borrowing Base
Report in the form of Exhibit G duly completed by an authorized officer
of General Partner and conforming with the requirements of
Section 2.13, and on or before the last day of each calendar month, a
statement reconciling the Borrowing Base Report delivered on or about
the 26th day of the preceding calendar month with actual results for
the preceding calendar month.
(f) As soon as available, and in any event within thirty (30)
days after the end of each calendar month, a report setting forth for
such month aggregate volumes and margins for all marketing activities
of Restricted Persons.
(g) As soon as available, and in any event within thirty (30)
days after the end of each Fiscal Year, an environmental compliance
certificate signed by the president or chief executive officer of
General Partner in the form attached hereto as Exhibit H. Further, if
requested by Administrative Agent, Restricted Persons shall permit and
cooperate with an environmental and safety review made in connection
with the operations of Restricted Persons' properties one time during
each Fiscal Year, by consultants selected by Administrative Agent which
review shall, if requested by Administrative Agent, be arranged and
supervised by environmental legal counsel for Administrative Agent, all
at Restricted Persons' cost and expense. The consultant shall render a
verbal or written report, as specified by Administrative Agent, based
upon such review at Restricted Persons' cost and expense and a copy
thereof will be provided to Restricted Persons.
(h) Concurrently with the annual renewal of Restricted Persons'
insurance policies, Restricted Persons shall at their own cost and
expense, if requested by Administrative Agent in writing, cause a
certificate or report to be issued by Administrative Agent's
professional insurance consultants or other insurance consultants
satisfactory to Administrative Agent certifying that Restricted
Persons' insurance for the next succeeding year after such renewal (or
for such longer period for which such insurance is in effect) complies
with the provisions of this Agreement and the Security Documents.
(i) As soon as available, and in any event within thirty (30)
days after the end of each calendar month, a Consolidated statement of
Borrower's earnings for such calendar month in form satisfactory to
Administrative Agent.
(j) As soon as available, and in any event within thirty (30)
days after the end of each calendar month, a report on a mark to market
basis of all Floating Price Contracts as of the close of business on
the last day of such month, and together with such report a complete
list of all net realized losses on any Floating Price Contracts for the
prior twelve months in form reasonably satisfactory to Administrative
Agent.
Section 6.3. Other Information and Inspections. Each Restricted
Person will furnish to each Lender any information which Administrative
Agent or any Lender may from time to time request concerning any covenant,
provision or condition of the Loan Documents or any matter in connection
with Restricted Persons' businesses and operations. Each Restricted Person
will permit representatives appointed by Administrative Agent (including
independent accountants, auditors, agents, attorneys, appraisers and any
other Persons) to visit and inspect during normal business hours any of such
Restricted Person's property, including its books of account, other books
and records, and any facilities or other business assets, and to make extra
copies therefrom and photocopies and photographs thereof, and to write down
and record any information such representatives obtain, and each Restricted
Person shall permit Administrative Agent or its representatives to
investigate and verify the accuracy of the information furnished to
Administrative Agent or any Lender in connection with the Loan Documents and
to discuss all such matters with its officers, employees and, upon prior
notice to Borrower, its representatives. Without limitation of the
foregoing, within one hundred twenty (120) days after the end of each Fiscal
Year, and in addition once during each Fiscal Year, if requested by
Administrative Agent at the instruction of Majority Lenders, Borrower shall
permit commercial financial examiners appointed by Administrative Agent to
conduct a commercial finance examination of the business and assets of
Restricted Persons and in connection with such examination to have full
access to and the right to examine, audit, make abstracts and copies from,
and inspect Restricted Persons' records, files, books of account and all
other documents, instruments and agreements to which a Restricted Person is
a party. Borrower shall pay all reasonable costs and expenses of
Administrative Agent associated with any such examination.
Section 6.4. Notice of Material Events and Change of Address. Each
Restricted Person will notify each Lender Party, not later than five (5)
Business Days after any executive officer of Restricted Persons has
knowledge thereof, stating that such notice is being given pursuant to this
Agreement, of:
(a) the occurrence of any Material Adverse Change;
(b) the occurrence of any Default;
(c) the acceleration of the maturity of any Indebtedness owed by
any Restricted Person or of any default by any Restricted Person under
any indenture, mortgage, agreement, contract or other instrument to
which any of them is a party or by which any of them or any of their
properties is bound, if such acceleration or default could cause a
Material Adverse Change;
(d) the occurrence of any Termination Event;
(e) Under any Environmental Law, any claim of $250,000 or more,
any notice of potential liability which might exceed such amount, or
any other material adverse claim asserted against any Restricted Person
or with respect to any Restricted Person's properties taken as a whole;
and
(f) the filing of any suit or proceeding, or the assertion in
writing of a claim against any Restricted Person or with respect to any
Restricted Person's properties in which an adverse decision could
reasonably be expected to cause a Material Adverse Change.
Upon the occurrence of any of the foregoing, Restricted Persons will take
all necessary or appropriate steps to remedy promptly any such Material
Adverse Change, Default, acceleration, default, or Termination Event to
protect against any such adverse claim, to defend any such suit or
proceeding, and to resolve all controversies on account of any of the
foregoing. Restricted Persons will also notify Administrative Agent and
Administrative Agent's counsel in writing at least twenty Business Days
prior to the date that any Restricted Person changes its name or the
location of its chief executive office or principal place of business or the
place where it keeps its books and records concerning the Collateral,
furnishing with such notice any necessary financing statement amendments or
requesting Administrative Agent and its counsel to prepare the same.
Section 6.5. Maintenance of Properties. Each Restricted Person will
maintain, preserve, protect, and keep all Collateral and all other material
property used or useful in the conduct of its business in good condition
(ordinary wear and tear excepted) and in compliance with all applicable
Laws, and will from time to time make all repairs, renewals and replacements
needed to enable the business and operations carried on in connection
therewith to be promptly and advantageously conducted at all times.
Section 6.6. Maintenance of Existence and Qualifications. Each
Restricted Person will maintain and preserve its existence and its rights
and franchises in full force and effect and will qualify to do business in
all states or jurisdictions where required by applicable Law, except where
the failure so to qualify will not cause a Material Adverse Change.
Section 6.7. Payment of Trade Liabilities, Taxes, Etc. Each
Restricted Person will (a) timely file all required tax returns including
any extensions; (b) timely pay all taxes, assessments, and other
governmental charges or levies imposed upon it or upon its income, profits
or property; (c) within one hundred twenty (120) days after the date such
goods are delivered or such services are rendered, pay all Liabilities owed
by it on ordinary trade terms to vendors, suppliers and other Persons
providing goods and services used by it in the ordinary course of its
business; (d) pay and discharge when due all other Liabilities now or
hereafter owed by it, other than royalty payments suspended in the ordinary
course of business; and (e) maintain appropriate accruals and reserves for
all of the foregoing in accordance with GAAP. Each Restricted Person may,
however, delay paying or discharging any of the foregoing so long as it is
in good faith contesting the validity thereof by appropriate proceedings, if
necessary, and has set aside on its books adequate reserves therefor which
are required by GAAP.
Section 6.8. Insurance. Each Restricted Person shall at all times
maintain insurance for its property in accordance with the Insurance
Schedule which insurance shall be by financially sound and reputable
insurers. Each Restricted Person will maintain any additional insurance
coverage as described in the respective Security Documents. If any portion
of any real estate on which a Lien is granted for purposes of securing the
Obligations is located in an area identified by the Federal Emergency
Management Agency as an area having special flood hazards and in which flood
insurance has been made available under the National Flood Insurance Act of
1968 (and any amendment or successor act thereto), then Borrower shall
maintain, or cause to be maintained, with an insurer reasonably acceptable
to Agent, flood insurance in an amount sufficient to comply with all
applicable rules and regulations promulgated pursuant to such Act. Upon
demand by Administrative Agent any insurance policies covering Collateral
shall be endorsed (a) to provide for payment of losses to Administrative
Agent as its interests may appear, (b) to provide that such policies may not
be canceled or reduced or affected in any material manner for any reason
without fifteen days prior notice to Administrative Agent, and (c) to
provide for any other matters specified in any applicable Security Document
or which Administrative Agent may reasonably require. Each Restricted
Person shall at all times maintain insurance against its liability for
injury to persons or property in accordance with the Insurance Schedule,
which insurance shall be by financially sound and reputable insurers.
Without limiting the foregoing, each Restricted Person shall at all time
maintain liability insurance in accordance with the Insurance Schedule.
Section 6.9. Performance on Borrower's Behalf. If any Restricted
Person fails to pay any taxes, insurance premiums, expenses, attorneys' fees
or other amounts it is required to pay under any Loan Document, Agents may
pay the same after notice of such payment by Administrative Agent is given
to Borrower. Borrower shall immediately reimburse Agent for any such
payments and each amount paid by Agents shall constitute an Obligation owed
hereunder which is due and payable on the date such amount is paid by
Agents.
Section 6.10. Interest. Borrower hereby promises to each Lender to
pay interest at the Default Rate on all Obligations (including Obligations
to pay fees or to reimburse or indemnify any Lender) which Borrower has in
this Agreement promised to pay to such Lender and which are not paid when
due. Such interest shall accrue from the date such Obligations become due
until they are paid.
Section 6.11. Compliance with Agreements and Law. Each Restricted
Person will perform all material obligations it is required to perform under
the terms of each indenture, mortgage, deed of trust, security agreement,
lease, and franchise, and each agreement, contract or other instrument or
obligation to which it is a party or by which it or any of its properties is
bound. Each Restricted Person will conduct its business and affairs in
compliance with all Laws applicable thereto and will maintain in good
standing all licenses that may be necessary or appropriate to carry on its
business.
Section 6.12. Environmental Matters; Environmental Reviews.
(a) Each Restricted Person will comply in all material respects with
all Environmental Laws now or hereafter applicable to such Restricted Person
as well as all contractual obligations and agreements with respect to
environmental remediation or other environmental matters and shall obtain,
at or prior to the time required by applicable Environmental Laws, all
environmental, health and safety permits, licenses and other authorizations
necessary for its operations and will maintain such authorizations in full
force and effect, conduct any investigation, study, sampling and testing,
and undertake any cleanup, removal, remedial or other action necessary to
remove and clean up all Hazardous Materials from any of its properties, in
accordance with the requirements of all Environmental Laws.
(b) Each Restricted Person will promptly furnish to Administrative
Agent all written notices of violation, orders, claims, citations,
complaints, penalty assessments, suits or other proceedings received by any
Restricted Person, or of which it has notice, pending or threatened against
any Restricted Person, the potential liability of which exceeds $250,000 or
would cause a Material Adverse Change if resolved adversely against any
Restricted Person, by any governmental authority with respect to any alleged
violation of or non-compliance with any Environmental Laws or any permits,
licenses or authorizations in connection with its ownership or use of its
properties or the operation of its business.
(c) Each Restricted Person will promptly furnish to Administrative
Agent all requests for information, notices of claim, demand letters, and
other notifications, received by any Restricted Person in connection with
its ownership or use of its properties or the conduct of its business,
relating to potential responsibility with respect to any investigation or
clean-up of Hazardous Material at any location, the potential liability of
which exceeds $250,000 or would cause a Material Adverse Change if resolved
adversely against any Restricted Person.
Section 6.13. Evidence of Compliance. Subject to the last sentence of
Section 6.3, each Restricted Person will furnish to each Lender at such
Restricted Person's expense all evidence which Administrative Agent from
time to time reasonably requests in writing as to the accuracy and validity
of or compliance with all representations, warranties and covenants made by
any Restricted Person in the Loan Documents, the satisfaction of all
conditions contained therein, and all other matters pertaining thereto.
Section 6.14. Agreement to Deliver Security Documents. Restricted
Persons will deliver to further secure the Obligations whenever requested by
Administrative Agent, in its sole and absolute discretion, deeds of trust,
mortgages, flood hazard certification, title searches, title insurance,
chattel mortgages, surveys, security agreements, financing statements and
other Security Documents in form and substance reasonably satisfactory to
Administrative Agent for the purpose of granting, confirming, and perfecting
first and prior liens or security interests in any real or personal property
now owned or hereafter acquired by any Restricted Person.
Section 6.15. Perfection and Protection of Security Interests and
Liens. Each Restricted Person will from time to time deliver to Collateral
Agent any financing statements, continuation statements, extension
agreements and other documents, properly completed and executed (and
acknowledged when required) by Restricted Persons in form and substance
reasonably satisfactory to Collateral Agent, which Collateral Agent requests
for the purpose of perfecting, confirming, or protecting any Liens or other
rights in Collateral securing any Obligations.
Section 6.16. Bank Accounts; Offset. To secure the repayment of the
Obligations, each Restricted Person hereby grants to each Lender a security
interest, a lien, and a right of offset, each of which shall be in addition
to all other interests, liens, and rights of any Lender at common Law, under
the Loan Documents, or otherwise, and each of which shall be upon and
against (a) any and all moneys, securities or other property (and the
proceeds therefrom) of such Restricted Person now or hereafter held or
received by or in transit to any Lender from or for the account of such
Restricted Person, whether for safekeeping, custody, pledge, transmission,
collection or otherwise, (b) any and all deposits (general or special, time
or demand, provisional or final) of such Restricted Person with any Lender,
and (c) any other credits and claims of such Restricted Person at any time
existing against any Lender, including claims under certificates of deposit.
At any time and from time to time during the continuance of any Event of
Default, each Lender is hereby authorized to foreclose upon, or to offset
against the Obligations then due and payable (in either case without notice
to any Restricted Person), any and all items hereinabove referred to. The
remedies of foreclosure and offset are separate and cumulative, and either
may be exercised independently of the other without regard to procedures or
restrictions applicable to the other.
Section 6.17. Guaranties of Subsidiaries. Each Subsidiary of General
Partner (other than Borrower) now existing or created, acquired or coming
into existence after the date hereof shall, promptly upon request by
Administrative Agent, execute and deliver to Administrative Agent an
absolute and unconditional guaranty of the timely repayment of the
Obligations and the due and punctual performance of the obligations of
Borrower hereunder, which guaranty shall be reasonably satisfactory to
Administrative Agent in form and substance. Each Subsidiary of General
Partner (other than Borrower) existing on the date hereof shall duly execute
and deliver such a guaranty prior to the making of any Loan hereunder.
General Partner will cause each of its Subsidiaries to deliver to
Administrative Agent, simultaneously with its delivery of such a guaranty,
written evidence satisfactory to Administrative Agent and its counsel that
such Subsidiary has taken all corporate, limited liability company or
partnership action necessary to duly approve and authorize its execution,
delivery and performance of such guaranty and any other documents which it
is required to execute.
Section 6.18. Compliance with Agreements. Each Restricted Person
shall observe, perform or comply with any agreement with any Person or any
term or condition of any instrument, if such agreement or instrument is
materially significant to such Restricted Person or to Restricted Persons on
a Consolidated basis or materially significant to any Guarantor, unless any
such failure to so observe, perform or comply is remedied within the
applicable period of grace (if any) provided in such agreement or instrument
or unless such failure to so observe, perform or comply would not reasonably
be expected to cause a Material Adverse Change.
Section 6.19. Rents. By the terms of the various Security Documents,
certain Restricted Persons are and will be assigning to Collateral Agent,
for the benefit of Lender Parties, all of the "Rents" (as defined therein)
accruing to the property covered thereby. Notwithstanding any such
assignments, so long as no Default has occurred and is continuing, (i) such
Restricted Persons may continue to receive and collect from the payors of
such Rents all such Rents, subject, however, to the Liens created under the
Security Documents, which Liens are hereby affirmed and ratified, and free
and clear of such Liens, use the proceeds of the Rents, and (ii) the
Collateral Agent will not notify the obligors of such Rents or take any
other action to cause proceeds thereof to be remitted to the Collateral
Agent. Upon the occurrence of a Default, Collateral Agent may exercise all
rights and remedies granted under the Security Documents, including the
right to obtain possession of all Rents then held by such Restricted Persons
or to receive directly from the payors of such Rents all other Rents until
such time as such Default is no longer continuing. If Collateral Agent
shall receive any Rent proceeds from any payor at any time other than during
the continuance of a Default, then it shall notify Borrower thereof and (i)
upon request and pursuant to the instructions of Borrower, it shall, if no
Default is then continuing, remit such proceeds to the Borrower and (ii) at
the request and expense of Borrower, execute and deliver a letter to such
payors confirming Restricted Persons' right to receive and collect Rents
until otherwise notified by Collateral Agent. In no case shall any failure,
whether purposed or inadvertent, by Collateral Agent to collect directly any
such Rents constitute in any way a waiver, remission or release of any of
its rights under the Security Documents, nor shall any release of any Rents
by Collateral Agent to such Restricted Persons constitute a waiver,
remission, or release of any other Rents or of any rights of Collateral
Agent to collect other Rents thereafter.
Section 6.20. Operating Practices. Each Restricted Person shall
operate its business in a manner that is consistent with the policies and
procedures approved by the board of directors of General Partner and in
effect on, and delivered to Administrative Agent and Lenders prior to, the
date hereof, and revisions thereto referred to in the following sentence.
Borrower shall review such policies and procedures at least annually, and
shall promptly recommend to the board of directors of General Partner such
revisions to such policies and procedures as may be recommended by
Restricted Persons' or, upon consultation with Borrower and its consultants
and at the request of Administrative Agent, Administrative Agent's third
party consultants, with respect to adequate internal controls, and Borrower
shall promptly provide a report to Lenders regarding such policies and
procedures, including such policies and procedures which the board of
directors of General Partner could adopt and has adopted.
ARTICLE VII - Negative Covenants
To conform with the terms and conditions under which each Lender is
willing to have credit outstanding to Borrower, and to induce each Lender to
enter into this Agreement and make the Loans, General Partner, Genesis
Energy, L.P. and Borrower covenant and agree that until the full and final
payment of the Obligations and the termination of this Agreement, unless
Majority Lenders, or all Lenders as required under Section 10.1, have
previously agreed otherwise:
Section 7.1. Indebtedness. No Restricted Person will in any manner
owe or be liable for Indebtedness except:
(a) the Obligations;
(b) Indebtedness of Borrower arising under Hedging Contracts
(i) permitted under Section 7.3 or (ii) consisting of options, swaps,
collars and similar instruments that relate to Petroleum Inventory and
are either referred to in Section 7.15(a) or permitted by
Section 7.15(b) or (c );
(c) Indebtedness of any Restricted Person owing to another
Restricted Person;
(d) guaranties by General Partner, Genesis Energy, L.P., Borrower
or any other Guarantor of trade payables of any Restricted Person
incurred and paid in the ordinary course of business on ordinary trade
terms;
(e) Indebtedness of any Restricted Person owing in connection
with deferred payments of insurance premiums, provided that all such
Indebtedness of all Restricted Persons shall not exceed $1,500,000 in
any Fiscal Year;
(f) prior to May 31, 2002, but not thereafter, outstanding
Salomon Obligations, provided that the Facility Usage plus the Salomon
Guaranty Exposure does not exceed the Borrowing Base; and
(g) other Indebtedness of Borrower not to exceed in the aggregate
principal amount of $250,000 at any one time outstanding.
Section 7.2. Limitation on Liens. No Restricted Person will create,
assume or permit to exist (i) any Lien upon any Accounts, inventory, cash or
investment securities which constitute Collateral except (A) Permitted
Inventory Liens, (B) Liens created pursuant to the Security Documents and,
prior to May 31, 2002, but not thereafter, Liens existing on the date of
this Agreement securing outstanding Salomon Obligations, (C) statutory Liens
in respect of First Purchase Crude Payables, (D) Liens of the type described
in clause (e) below in connection with any Eligible Margin Deposit to secure
Hedging Contracts permitted under Section 7.1 with the broker that is the
holder of such Eligible Margin Deposit, (E) Liens of the type described in
clauses (a), (c) and (f) below, and (F) any other Liens expressly permitted
to encumber such Collateral under any Security Document covering such
Collateral or (ii) any Lien upon any of the properties or assets other than
such Collateral which it now owns or hereafter acquires except the following
(Liens, to the extent permitted by this Section, herein called "Permitted
Liens"):
(a) Liens created pursuant to this Agreement or the Security
Documents and Liens existing on the date of this Agreement and listed
in the Disclosure Schedule.
(b) Liens imposed by any governmental authority for taxes,
assessments or charges not yet due or the validity of which is being
contested in good faith and by appropriate proceedings, if necessary,
for which adequate reserves are maintained on the books of any
Restricted Person in accordance with GAAP;
(c) pledges or deposits of cash or securities under worker's
compensation and automobile insurance policies, unemployment insurance
and employee medical insurance or other social security legislation not
to exceed for all such items in the aggregate $1,000,000;
(d) carriers', warehousemen's, mechanics', materialmen's,
repairmen's, landlord's, or other like Liens (including, without
limitation, Liens on property of any Restricted Person in the
possession of storage facilities, pipelines or barges) arising in the
ordinary course of business for amounts which are not more than 60 days
past due or the validity of which is being contested in good faith and
by appropriate proceedings, if necessary, and for which adequate
reserves are maintained on the books of any Restricted Person in
accordance with GAAP;
(e) Liens under or with respect to accounts with brokers or
counterparties with respect to Hedging Contracts consisting of cash,
commodities or futures contracts, options, securities, instruments, and
other like assets securing only Hedging Contracts permitted under
Section 7.1;
(f) deposits of cash or securities to secure the performance of
bids, trade contracts (other than for borrowed money), leases,
statutory obligations, surety and appeal bonds, performance bonds and
other obligations of a like nature incurred in the ordinary course of
business;
(g) easements, rights-of-way, restrictions and other similar
encumbrances incurred in the ordinary course of business and
encumbrances consisting of zoning restrictions, easements, licenses,
restrictions on the use of real property or minor imperfections in
title thereto which, in the aggregate, are not material in amount, and
which do not in any case materially detract from the value of the
property subject thereto or interfere with the ordinary conduct of the
business of any Restricted Person;
(h) Liens in respect of purchase money obligations and Capital
Leases relating to Indebtedness permitted under Section 7.1(g), and
Liens in respect of operating leases;
(i) rights reserved to or vested in any governmental authority by
the terms of any right, power, franchise, grant, license or permit, or
by any provision of law, to revoke or terminate any such right, power,
franchise, grant, license or permit or to condemn or acquire by eminent
domain or similar process;
(j) rights reserved to or vested by Law in any governmental
authority to in any manner, control or regulate in any manner any of
the properties of any Restricted Person or the use thereof or the
rights and interests of any Restricted Person therein, in any manner
under any and all Laws;
(k) rights reserved to the grantors of any properties of any
Restricted Person, and the restrictions, conditions, restrictive
covenants and limitations, in respect thereto, pursuant to the terms,
conditions and provisions of any rights-of-way agreements, contracts or
other agreements therewith; and
(l) inchoate Liens in respect of pending litigation or with
respect to a judgment which has not resulted in an Event of Default
under Section 8.1.
Section 7.3. Hedging Contracts. No Restricted Person will be a party
to or in any manner be liable on any Hedging Contract, except:
(a) Hedging Contracts entered into by a Restricted Person with
the purpose and effect of fixing interest rates on a principal amount
of indebtedness of such Restricted Person that is accruing interest at
a variable rate, provided that (i) the aggregate notional amount of
such contracts never exceeds one hundred percent (100%) of the
anticipated outstanding principal balance of the indebtedness to be
hedged by such contracts or an average of such principal balances
calculated using a generally accepted method of matching interest swap
contracts to declining principal balances, (ii) the floating rate index
of each such contract generally matches the index used to determine the
floating rates of interest on the corresponding indebtedness to be
hedged by such contract and (iii) each such contract is with a
counterparty or has a guarantor of the obligation of the counterparty
who (unless such counterparty is a Lender or an Affiliate of any Lender
at the time such contract is entered into) at the time the contract is
made has long-term unsecured and unenhanced debt obligations rated A or
A2 or better, respectively, by either Rating Agency or is otherwise
acceptable to Majority Lenders.
(b) Hedging Contracts relating to Petroleum Inventory which are
referred to in Section 7.15(a) or permitted by Section 7.15(b) or (c).
Section 7.4. Limitation on Mergers, Issuances of Securities. Except
as expressly provided in this section, no Restricted Person will (a) enter
into any transaction of merger or consolidation or amalgamation, or
liquidate, wind up or dissolve itself (or suffer any liquidation or
dissolution), (b) acquire any business or property from, or capital stock
of, or be a party to any acquisition of, any Person except for purchases of
inventory and other property to be sold or used in the ordinary course of
business and Investments permitted under Section 7.7 hereof or (c) sell,
transfer, lease, exchange, alienate or otherwise dispose of, in one
transaction or a series of transactions, any part of its business or
property, whether now owned or hereafter acquired, except for sales or
transfers not prohibited by under Section 7.5 hereof. No Subsidiary of
Genesis Energy, L.P. will issue any additional shares of its capital stock
or other securities or any options, warrants or other rights to acquire such
additional shares or other securities except a direct Subsidiary of a
Restricted Person may issue additional shares or other securities to such
Restricted Person, to Genesis Energy, L.P. or to General Partner so long as
(i) such Subsidiary is a Wholly Owned Subsidiary of Genesis Energy, L.P.
after giving effect thereto and (ii) such share and securities shall be
pledged to the Collateral Agent for the benefit of the Lenders pursuant to
Security Documents acceptable to the Administrative Agent. No Subsidiary of
Borrower which is a partnership will allow any diminution of Borrower's
interest (direct or indirect) therein.
Section 7.5. Limitation on Sales of Property. No Restricted Person
will sell, transfer, lease, exchange, alienate or dispose of any Collateral
or any of its material assets or properties or any material interest therein
except:
(a) equipment which is worthless or obsolete or no longer
necessary or useful to the proper conduct of its business or which is
replaced by equipment of equal suitability and value;
(b) inventory (including pipeline linefill) which is sold in the
ordinary course of business on ordinary trade terms;
(c) sales or transfers, subject to the Security Documents, by a
Person (other than Borrower) that is a Subsidiary of a Restricted
Person to such Restricted Person or to a Wholly Owned Subsidiary of
such Restricted Person that is a Guarantor;
(d) sale of the Houma facility and any or all of the pipeline and
gathering assets located in Texas so long as (A) the purchase price
paid to Borrower for such asset shall be no less than the fair market
value of such asset at the time of such sale, (B) the purchase price
for such asset shall be paid to Borrower solely in cash, and (C) the
Net Cash Proceeds from any such sale shall be applied as set forth in
Section 2.6(c), to the extent such Section requires a prepayment of the
Loan from the proceeds of such sale; and
(e) the sale of any other asset by Borrower or any Subsidiary so
long as (A) the purchase price paid to Borrower or such Subsidiary for
such asset shall be no less than the fair market value of such asset at
the time of such sale, (B) the purchase price for such asset shall be
paid to Borrower or such Subsidiary solely in cash, (C) the aggregate
purchase price paid to Borrower and all of its Subsidiaries for such
asset and all other assets sold by Borrower and its Subsidiaries during
the same Fiscal Year pursuant to this clause (e) shall not exceed
$2,000,000, (D) the consent (not to be unreasonably withheld) of the
Majority Lenders is obtained in connection with any such sale, and (E)
the Net Cash Proceeds from any such sale shall be applied as set forth
in Section 2.6(c), to the extent such Section requires a prepayment of
the Loan from the proceeds of such sale.
No Restricted Person will sell, transfer or otherwise dispose of capital
stock of or interest in any of its Subsidiaries except to Borrower or a
Wholly Owned Subsidiary of Borrower which shall pledge such capital stock or
interest to the Collateral Agent for the benefit of the Lenders pursuant to
Security Documents acceptable to the Collateral Agent.. No Restricted
Person will discount, sell, pledge or assign any notes payable to it,
accounts receivable or future income. So long as no Default then exists,
Collateral Agent will, at Borrower's request and expense, execute a release,
satisfactory to Borrower and Collateral Agent, of any Collateral so sold,
transferred, leased, exchanged, alienated or disposed of pursuant to this
Section.
Section 7.6. Limitation on Dividends and Redemptions. No Restricted
Person will declare or pay any dividends on, or make any other distribution
in respect of, any class of its capital stock or any partnership, limited
liability company or other interest in it, nor will any Restricted Person
directly or indirectly make any capital contribution of any nature to or
purchase, redeem, acquire or retire any shares of the capital stock of or
partnership or limited liability company interests in any Restricted Person
(whether such interests are now or hereafter issued, outstanding or
created), or cause or permit any reduction or retirement of the capital
stock of any Restricted Person, while any Loan or commitment hereunder is
outstanding; provided that Genesis Energy L.P. shall be permitted to make
distributions to its general and limited partners to the extent required, as
of the date hereof, by its agreement of limited partnership if, at the time
such distribution is made: (i) no Default exists, or would exist after
giving effect to such distribution, (ii) the Borrower is not aware of any
event or circumstance that exists, or is likely to occur in the future, that
would result in a Default, (iii) for each day of the Fiscal Quarter
immediately preceding such distribution, the Borrowing Base shall have
exceeded the Facility Usage, plus any applicable Salomon Guaranty Exposure,
by at least the sum of $20,000,000 plus the amount of the distribution. No
such distribution shall be made until 5 Business Days after the Chief
Financial Officer of the Borrower delivers to the Administrative Agent a
certificate that the above conditions have been satisfied.
Section 7.7. Limitation on Investments and New Businesses. No
Restricted Person will (a) make any expenditure or commitment or incur any
obligation or enter into or engage in any transaction except in the ordinary
course of business, (b) engage directly or indirectly in any business or
conduct any operations except in connection with or incidental to its
present businesses and operations, or (c) make any acquisitions of or
capital contributions to or other Investments in any Person, or make any
acquisitions of material properties or assets of another Person other than
Permitted Investments. All transactions permitted under the foregoing
subsections (a) through (c), inclusive, are subject to Section 7.5. General
Partner will not engage in any business other than the ownership of Genesis
Energy, L.P. and Borrower. Genesis Energy, L.P. will not engage in any
business other than the ownership of the Borrower.
Section 7.8. Limitation on Credit Extensions. Except for Permitted
Investments and Hedging Contracts permitted under Section 7.3(b) hereof, no
Restricted Person will extend credit, make advances or make loans other than
normal and prudent extensions of credit to customers buying goods and
services in the ordinary course of business or to another Restricted Person
in the ordinary course of business, which extensions shall not be for longer
periods than those extended by similar businesses operated in a normal and
prudent manner.
Section 7.9. Transactions with Affiliates. No Restricted Person will
engage in any material transaction with any of its Affiliates except:
(a) transactions among Borrower and Wholly Owned Subsidiaries of Borrower,
subject to the other provisions of this Agreement, and (b) transactions
entered into in the ordinary course of business of such Restricted Person on
terms which are no less favorable to such Restricted Person than those which
would have been obtainable at the time in arm's-length transactions with
Persons other than such Affiliates.
Section 7.10. Prohibited Contracts. Except as expressly provided for
in the Loan Documents and as described in the Disclosure Schedule, no
Restricted Person will, directly or indirectly, enter into, create, or
otherwise allow to exist any contract or other consensual restriction on the
ability of any Subsidiary of Genesis Energy, L.P., including but not limited
to Borrower and any Subsidiary of Borrower to: (a) pay dividends or make
other distributions to Borrower or Genesis Energy, L.P., (b) redeem equity
interests held in it by Borrower or Genesis Energy, L.P., (c) repay loans
and other indebtedness owing by it to Borrower or Genesis Energy, L. P., or
(d) transfer any of its assets to Borrower or Genesis Energy, L.P. No
Restricted Person will enter into any "take-or-pay" contract or other
contract or arrangement for the purchase of goods or services which
obligates it to pay for such goods or service regardless of whether they are
delivered or furnished to it other than contracts for pipeline capacity or
for services in either case reasonably anticipated to be utilized in the
ordinary course of business. No Restricted Person will amend or permit any
amendment to any contract or lease which releases, qualifies, limits, makes
contingent or otherwise detrimentally affects the rights and benefits of
Collateral Agent or any Lender under or acquired pursuant to any Security
Documents. No ERISA Affiliate will incur any obligation to contribute to
any "multiemployer plan" as defined in Section 4001 of ERISA that is subject
to Title IV of ERISA. No Restricted Person will amend or modify or permit
any amendment or modification of any of the agreements evidencing or
relating to the Salomon Facility or extend the term of the commitments
thereunder.
Section 7.11. Current Ratio. The ratio of (i) the sum of Borrower's
Consolidated current assets plus the unutilized amount available for Loans
hereunder pursuant to Section 2.1 to (ii) Borrower's Consolidated current
liabilities will never be less than 1.0 to 1.0. For purposes of this
section, Borrower's Consolidated current liabilities will be calculated
without including any payments of principal on the Notes which are required
to be repaid within one year from the time of calculation.
Section 7.12. Leverage Ratio. Borrower will not permit the Leverage
Ratio on the last day of any Fiscal Quarter to be greater than 4.00 to 1.00.
Section 7.13. Interest Coverage Ratio. Borrower will not permit the
Interest Coverage Ratio on the last day of any Fiscal Quarter to be less
than 2.00 to 1.00.
Section 7.14. Capital Expenditures. Borrower will not, and will not
permit any of its Subsidiaries to, make any Capital Expenditures in excess
of $3,000,000 per year, except for Capital Expenditures, not to exceed in
the aggregate $10,000,000, made from the Net Cash Proceeds of asset sales
permitted by Sections 7.5(d) and 7.5(e).
Section 7.15. Open Position ; Certain Permitted Financial Instruments;
NYMEX Transactions.
(a) Open Position. No Restricted Person shall at any time have any
Open Positions; provided, however, that Borrower may have:
(i) Physical inventories of Petroleum Inventory (A) consisting of
tank bottoms and pipeline linefill requirements of up to 200,000
barrels in the aggregate at any time, (B) excess inventory of up to
200,000 barrels in the aggregate at any time resulting from crude
gathering receipts in excess of scheduled quantities, provided that
Borrower shall establish an Offsetting Position with respect to such
quantities within five business days following identification of such
inventory, but in any event not later than the 20th day following the
month in which such excess volumes were received.
(ii) Floating Price Contracts to purchase or sell Petroleum
Inventory in the Current Trading Month; provided that, such Floating
Price Contracts either (A) have an Offsetting Position by the 26th day
of the month preceding the month of receipt or delivery, or (B) are
scheduled to be stored in pipelines Currently Approved by Majority
Lenders and are hedged in the delivery month with NYMEX contracts; and
further provided that such Floating Price Contracts relating to the
sale of Petroleum Inventory for the Current Trading Month do not exceed
purchases by more than 10,000 barrels per day.
(iii) Floating Price Contracts to purchase or sell Petroleum
Inventory to be received or delivered after the Current Trading Month,
but within the twelve months following the Current Trading Month
provided that (A) such contracts are at the then market price and
(B) at any point in time the sum of (x) net realized losses relating to
such contracts and (y) mark to market exposure relating to such
contracts does not, at any time, exceed $1,000,000.
As used herein, "Current Trading Month" means (i) with respect to the first
twenty-five days of any calendar month, the next following calendar month
and (ii) with respect to the period from the 26th day of a calendar month
through the last day of such month, the second calendar month next following
such month (for example, for the period from January 26th through February
25th, the Current Trading Month is March), "Floating Price Contract" means
(i) a purchase or sale contract based upon a daily index such as a posted
price or NYMEX price from time to time in effect during the delivery month
and (ii) a NYMEX spread transaction in which the length of time between the
offsetting purchase and sale obligations do not exceed twelve months,
(b) Certain Permitted Financial Instruments. No Restricted Person
will write (i.e. sell) or otherwise participate in any swap, collar or
similar agreement relating to Petroleum Inventory, or write (i.e. sell) any
option, unless, with respect thereto, (i) such Restricted Person has an
Offsetting Position in crude volumes and (ii) the counter-party (or
guarantor to the obligations of such counter-party) at the time such
financial instrument is made (A) has one or more long term unsecured and
unenhanced debt obligations rated A or A2 or better, respectively, by either
Rating Agency, or (B) is a Lender, a "Lender" as such term is defined in the
Revolver Agreement, or an Affiliate of a Lender or "Lender", or (C) is
listed in the Disclosure Schedule.
(c) NYMEX Transactions. No Restricted Person will convert a NYMEX
position to a physical position by way of an "exchange for physicals" or an
"alternative delivery procedure" unless the credit extended in connection
with such physical position would comply with the credit requirements of the
definition of "Approved Eligible Receivables"
...
Section 7.16. Redelivery of Borrowing Base Report. If, at any time,
the amount of any component of the Borrowing Base, listed in item "(a)" of
the definition thereof, shall decrease, or if any contract related to such
item is modified, sold or exchanged in any way that would negatively affect
the Borrowing Base, the Borrower shall immediately (i) notify Administrative
Agent of the occurrence of such event, (ii) deliver to Administrative Agent
a revised Borrowing Base Report satisfactory to Administrative Agent, which
Administrative Agent shall thereafter furnish to Lenders, and (iii) make any
prepayment as may be required under Section 2.6 resulting from such reduced
Borrowing Base.
ARTICLE VIII - Events of Default and Remedies
Section 8.1. Events of Default. Each of the following events
constitutes an Event of Default under this Agreement:
(a) Any Restricted Person fails to pay the principal component of
any Loan or any reimbursement obligation with respect to any Letter of
Credit when due and payable, whether at a date for the payment of a
fixed installment or as a contingent or other payment becomes due and
payable or as a result of acceleration or otherwise;
(b) Any Restricted Person fails to pay any Obligation (other than
the Obligations in subsection (a) above) when due and payable, whether
at a date for the payment of a fixed installment or as a contingent or
other payment becomes due and payable or as a result of acceleration or
otherwise, within three Business Days after the same becomes due;
(c) Any event defined as a "default" or "event of default" under,
or otherwise constituting a breach of, any Loan Document occurs, and
the same is not remedied within the applicable period of grace (if any)
provided in such Loan Document;
(d) Any Restricted Person fails to duly observe, perform or
comply with any covenant, agreement or provision of Section 6.4 or
Article VII;
(e) Any Restricted Person fails (other than as referred to in
subsections (a), (b), (c) or (d) above) to duly observe, perform or
comply with any covenant, agreement, condition or provision of any Loan
Document to which it is a party, and such failure remains unremedied
for a period of thirty (30) days after notice of such failure is given
by Administrative Agent to Borrower;
(f) Any representation or warranty previously, presently or
hereafter made in writing by or on behalf of any Restricted Person in
connection with any Loan Document shall prove to have been false or
incorrect in any material respect on any date on or as of which made,
or any Loan Document at any time ceases to be valid, binding and
enforceable as warranted in Section 5.5 for any reason other than its
release or subordination by Administrative Agent;
(g) Any Restricted Person shall default in the payment when due
of any principal of or interest on any of its other Indebtedness in
excess of $250,000 in the aggregate (other than Indebtedness the
validity of which is being contested in good faith by appropriate
proceedings and for which adequate reserves with respect thereto are
maintained on the books of such Restricted Person in accordance with
GAAP), or any event specified in any note, agreement, indenture or
other document evidencing or relating to any such Indebtedness shall
occur if the effect of such event is to cause, or (with the giving of
any notice or the lapse of time or both) to permit the holder or
holders of such Indebtedness (or a trustee or agent on behalf of such
holder or holders) to cause, such Indebtedness to become due, or to be
prepaid in full (whether by redemption, purchase, offer to purchase or
otherwise), prior to its stated maturity;
(h) Either (i) any "accumulated funding deficiency" (as defined
in Section 412(a) of the Code) in excess of $250,000 exists with
respect to any ERISA Plan, whether or not waived by the Secretary of
the Treasury or his delegate, or (ii) any Termination Event occurs with
respect to any ERISA Plan and the amount of unfunded benefit
liabilities as defined in Section 4001(a)(18) of ERISA of such ERISA
Plan exceeds $250,000 (or in the case of a Termination Event involving
the withdrawal of a substantial employer, the withdrawing employer's
proportionate share of such excess exceeds such amount);
(i) General Partner or any other Restricted Person:
(i) has entered against it of a judgment, decree or order
for relief by a Tribunal of competent jurisdiction in an
involuntary proceeding commenced under any applicable bankruptcy,
insolvency or other similar Law of any jurisdiction now or
hereafter in effect, including the federal Bankruptcy Code, as
from time to time amended, or has any such proceeding commenced
against it, in each case, which remains undismissed for a period
of sixty days; or
(ii) commences a voluntary case under any applicable
bankruptcy, insolvency or similar Law now or hereafter in effect,
including the federal Bankruptcy Code, as from time to time
amended; or applies for or consents to the entry of an order for
relief in an involuntary case under any such Law; or makes a
general assignment for the benefit of creditors; or is generally
unable to pay (or admits in writing its inability to so pay) its
debts as such debts become due; or takes corporate or other action
to authorize any of the foregoing; or
(iii) has entered against it the appointment of or taking
possession by a receiver, liquidator, assignee, custodian,
trustee, sequestrator or similar official of all or a substantial
part of its assets in a proceeding brought against or initiated by
it, and such appointment or taking possession is neither made
ineffective nor discharged within sixty days after the making
thereof, or such appointment or taking possession is at any time
consented to, requested by, or acquiesced to by it; or
(iv) has entered against it the appointment of or taking
possession by a receiver, liquidator, assignee, custodian,
trustee, sequestrator or similar official of any part of the
Collateral in a proceeding brought against or initiated by it, and
such appointment or taking possession is neither made ineffective
nor discharged within sixty days after the making thereof, or such
appointment or taking possession is at any time consented to,
requested by, or acquiesced to by it; or
(v) has entered against it a final judgment for the payment
of money in excess of $250,000 (in each case not covered by
insurance satisfactory to Administrative Agent in its discretion),
unless the same is discharged within thirty days after the date of
entry thereof or an appeal or appropriate proceeding for review
thereof is taken within such period and a stay of execution
pending such appeal is obtained; or
(vi) suffers a writ or warrant of attachment or any similar
process to be issued by any Tribunal against all or any
substantial part of its assets or any part of the Collateral, and
such writ or warrant of attachment or any similar process is not
stayed or released within thirty days after the entry or levy
thereof or after any stay is vacated or set aside;
(j) Any Change in Control occurs;
(k) Any Material Market Open Position Loss occurs;
(l) Any Security Document shall for any reason (other than
pursuant to the terms hereof and thereof) cease to create a valid and
perfected first priority Lien (subject only to the Salomon Lien) in any
asset having a value in excess of $100,000;
(m) During any twelve-month period, there shall have occurred a
default in payment (and such default remains unremedied for five
Business Days) of one or more Eligible Receivables in an amount
exceeding $500,000 individually or $750,000 in the aggregate;
(n) The beneficiary of any Letter of Credit shall make a draft or
other demand for payment thereunder;
(o) An "Event of Default" (as defined in the Salomon Facility)
shall have occurred and be continuing;
(p) Within 30 days from the date hereof, Borrower shall fail to
deliver to Administrative Agent all of the reports referred to in
Section 4.1(o);
(q) Borrower shall fail to deliver to Administrative Agent on or
prior to May 31, 2002, evidence reasonably satisfactory to it that the
obligation of Salomon to issue or substitute any Guaranty under and as
defined in the Salomon Facility has been terminated in accordance with
the terms of the Salomon Facility (including, without limitation,
Sections 2.1 and 8.6 thereof);
(r) On or prior to May 31, 2002, Borrower shall fail to cause all
Salomon Obligations to be terminated and the Salomon Guaranty Exposure
to be zero by obtaining full and complete releases of Salomon from all
outstanding Guaranties (as defined in the Salomon Facility) and all
related liabilities and obligations;
(s) A Material Adverse Change shall occur.
Upon the occurrence of an Event of Default described in
subsection (i)(i), (i)(ii) or (i)(iii) of this section with
respect to any Restricted Person, all of the Obligations shall
thereupon be immediately due and payable, without demand,
presentment, notice of demand or of dishonor and nonpayment,
protest, notice of protest, notice of intention to accelerate,
declaration or notice of acceleration, or any other notice or
declaration of any kind, all of which are hereby expressly waived
by Borrower and each other Restricted Person who at any time
ratifies or approves this Agreement. Upon any such acceleration,
any obligation of any Lender to make any further Loans and any
obligation of LC Issuer to issue Letters of Credit hereunder shall
be permanently terminated. During the continuance of any other
Event of Default, Administrative Agent at any time and from time
to time may (and upon written instructions from Majority Lenders,
Administrative Agent shall), without notice to Borrower or any
other Restricted Person, do either or both of the following:
(1) terminate any obligation of Lenders to make Loans hereunder
and any obligation of LC Issuer to issue Letters of Credit
hereunder, and (2) declare any or all of the Obligations
immediately due and payable, and all such Obligations shall
thereupon be immediately due and payable, without demand,
presentment, notice of demand or of dishonor and nonpayment,
protest, notice of protest, notice of intention to accelerate,
declaration or notice of acceleration, or any other notice or
declaration of any kind, all of which are hereby expressly waived
by Borrower and each other Restricted Person who at any time
ratifies or approves this Agreement.
Section 8.2. Remedies. If any Default shall occur and be continuing,
each Lender Party and Agents may protect and enforce their rights under the
Loan Documents by any appropriate proceedings, including proceedings for
specific performance of any covenant or agreement contained in any Loan
Document, and each Lender Party and Agents may enforce the payment of any
Obligations due it or enforce any other legal or equitable right which it
may have. All rights, remedies and powers conferred upon Lender Parties and
Agents under the Loan Documents shall be deemed cumulative and not exclusive
of any other rights, remedies or powers available under the Loan Documents
or at Law or in equity.
ARTICLE IX - The Agents
Section 9.1. Authorization and Action. Each Lender Party (in its
capacities as a Lender and the LC Issuer (if applicable)) hereby appoints
and authorizes each Agent to take such action as agent on its behalf and to
exercise such powers and discretion under this Agreement and the other Loan
Documents as are delegated to such Agent by the terms hereof and thereof,
together with such powers and discretion as are reasonably incidental
thereto. As to any matters not expressly provided for by the Loan Documents
(including, without limitation, enforcement or collection of the Notes), no
Agent shall be required to exercise any discretion or take any action, but
shall be required to act or to refrain from acting (and shall be fully
protected in so acting or refraining from acting) upon the instructions of
the Majority Lenders, and such instructions shall be binding upon all Lender
Parties and all holders of Notes; provided, however, that no Agent shall be
required to take any action that exposes such Agent to personal liability or
that is contrary to this Agreement or applicable law. Each Agent agrees to
give to each Lender Party prompt notice of each notice given to it by
Borrower pursuant to the terms of this Agreement.
Section 9.2. Agents' Reliance, Etc. Neither any Agent nor any of
their respective directors, officers, agents or employees shall be liable
for any action taken or omitted to be taken by it or them under or in
connection with the Loan Documents, except for its or their own gross
negligence or willful misconduct. Without limitation of the generality of
the foregoing, each Agent: (a) may treat the payee of any Note as the
holder thereof until, in the case of Administrative Agent, Administrative
Agent receives and accepts an Assignment and Acceptance entered into by the
Lender that is the payee of such Note, as assignor, and an Eligible
Transferee, as assignee, or, in the case of any other Agent, such Agent has
received notice from Administrative Agent that it has received and accepted
such Assignment and Acceptance, in each case as provided in Section 10.5(c);
(b) may consult with legal counsel (including counsel for any Restricted
Person), independent public accountants and other experts selected by it and
shall not be liable for any action taken or omitted to be taken in good
faith by it in accordance with the advice of such counsel, accountants or
experts; (c) makes no warranty or representation to any Lender Party and
shall not be responsible to any Lender Party for any statements, warranties
or representations (whether written or oral) made in or in connection with
the Loan Documents; (d) shall not have any duty to ascertain or to inquire
as to the performance or observance of any of the terms, covenants or
conditions of any Loan Document on the part of any Restricted Person or to
inspect the property (including the books and records) of any Restricted
Person; (e) shall not be responsible to any Lender Party for the due
execution, legality, validity, enforceability, genuineness, sufficiency or
value of, or the perfection or priority of any lien or security interest
created or purported to be created under or in connection with, any Loan
Document or any other instrument or document furnished pursuant thereto; and
(f) shall incur no liability under or in respect of any Loan Document by
acting upon any notice, consent, certificate or other instrument or writing
(which may be by telegram, telecopy or telex) believed by it to be genuine
and signed or sent by the proper party or parties.
Section 9.3. Administrative Agent and Affiliates. With respect to the
Loans made by it and the Notes issued to it, Administrative Agent shall have
the same rights and powers under the Loan Documents as any other Lender
Party and may exercise the same as though it were not an Agent; and the term
"Lender Party" or "Lender Parties" shall, unless otherwise expressly
indicated, include Administrative Agent in its individual capacity.
Administrative Agent and its Affiliates may accept deposits from, lend money
to, act as trustee under indentures of, accept investment banking
engagements from and generally engage in any kind of business with, any
Restricted Person, any of its Subsidiaries and any Person that may do
business with or own securities of any Restricted Person or any such
Subsidiary, all as if Administrative Agent were not an Agent and without any
duty to account therefor to the Lender Parties.
Section 9.4. Lender Party Credit Decision. Each Lender Party
acknowledges that it has, independently and without reliance upon any Agent
or any other Lender Party and based on the Initial Financial Statements and
the financial statements referred to in Section 6.2 and such other documents
and information as it has deemed appropriate, made its own credit analysis
and decision to enter into this Agreement. Each Lender Party also
acknowledges that it will, independently and without reliance upon any Agent
or any other Lender Party and based on such documents and information as it
shall deem appropriate at the time, continue to make its own credit
decisions in taking or not taking action under this Agreement.
Section 9.5. Indemnification. (a) Each Lender Party severally agrees
to indemnify each Agent (to the extent not promptly reimbursed by Borrower)
from and against such Lender Party's Percentage Share of any and all
liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind or nature whatsoever
that may be imposed on, incurred by, or asserted against such Agent in any
way relating to or arising out of the Loan Documents or any action taken or
omitted by such Agent under the Loan Documents (collectively, the
"Indemnified Costs"); provided, however, that no Lender Party shall be
liable for any portion of such liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements
resulting from such Agent's gross negligence or willful misconduct as found
in a final, non-appealable judgment by a court of competent jurisdiction.
Without limitation of the foregoing, each Lender Party agrees to reimburse
each Agent promptly upon demand for its Percentage Share of any costs and
expenses (including, without limitation, fees and expenses of counsel)
payable by Borrower under Section 10.4, to the extent that such Agent is
not promptly reimbursed for such costs and expenses by Borrower. In the
case of any investigation, litigation or proceeding giving rise to any
Indemnified Costs, this Section 9.5 applies whether any such investigation,
litigation or proceeding is brought by any Lender Party or any other Person.
(b) Each Lender Party severally agrees to indemnify the LC
Issuer (to the extent not promptly reimbursed by Borrower) from and against
such Lender Party's Percentage Share of any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind or nature whatsoever that may be imposed on,
incurred by, or asserted against such LC Issuer in any way relating to or
arising out of the Loan Documents or any action taken or omitted by such LC
Issuer under the Loan Documents; provided, however, that no Lender Party
shall be liable for any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or
disbursements resulting from such LC Issuer's gross negligence or willful
misconduct as found in a final, non-appealable judgment by a court of
competent jurisdiction. Without limitation of the foregoing, each Lender
Party agrees to reimburse such LC Issuer promptly upon demand for its
Percentage Share of any costs and expenses (including, without limitation,
fees and expenses of counsel) payable by Borrower under Section 10.4, to
the extent such LC Issuer is not promptly reimbursed for such costs and
expenses by Borrower.
Section 9.6. Successor Agents. Any Agent may resign at any time by
giving written notice thereof to the Lender Parties and Borrower and may be
removed at any time with or without cause by the Majority Lenders. Upon
any such resignation or removal, the Majority Lenders shall have the right
to appoint a successor Agent. If no successor Agent shall have been so
appointed by the Majority Lenders, and shall have accepted such appointment,
within 30 days after the retiring Agent's giving of notice of resignation or
the Majority Lenders' removal of the retiring Agent, then the retiring Agent
may, on behalf of the Lender Parties, appoint a successor Agent, which shall
be a commercial bank organized under the laws of the United States or of any
State thereof and having a combined capital and surplus of at least
$250,000,000. Upon the acceptance of any appointment as Agent hereunder by
a successor Agent and, in the case of a successor Collateral Agent, upon the
execution and filing or recording of such financing statements, or
amendments thereto, and such amendments or supplements to the mortgages
hereunder, and such other instruments or notices, as may be necessary or
desirable, or as the Majority Lenders may request, in order to continue the
perfection of the Liens granted or purported to be granted by the Security
Documents, such successor Agent shall succeed to and become vested with all
the rights, powers, discretion, privileges and duties of the retiring Agent,
and the retiring Agent shall be discharged from its duties and obligations
under the Loan Documents. Upon the acceptance of any appointment as Agent
hereunder by a successor Agent and, in the case of a successor Collateral
Agent, upon the execution and filing or recording of such financing
statements, or amendments thereto, and such amendments or supplements to the
mortgages hereunder, and such other instruments or notices, as may be
necessary or desirable, or as the Majority Lenders may request, in order to
continue the perfection of the Liens granted or purported to be granted by
the Security Documents, such successor Agent shall succeed to and become
vested with all the rights, powers, discretion, privileges and duties of the
retiring Agent, other than with respect to funds transfers and other similar
aspects of the administration of Borrowings, issuances of Letters of Credit
and payments by the Borrower, and the retiring Agent shall be discharged
from its duties and obligations under this Agreement other than as
aforesaid. If within 45 days after written notice is given of the retiring
Agent's resignation or removal under this Section 9.6 no successor Agent
shall have been appointed and shall have accepted such appointment, then on
such 45th day (a) the retiring Agent's resignation or removal shall become
effective, (b) the retiring Agent shall thereupon be discharged from its
duties and obligations under the Loan Documents and (c) the Majority Lenders
shall thereafter perform all duties of the retiring Agent under the Loan
Documents until such time, if any, as the Majority Lenders appoint a
successor Agent as provided above. After any retiring Agent's resignation
or removal hereunder as Agent shall have become effective, the provisions of
this Article VII shall inure to its benefit as to any actions taken or
omitted to be taken by it while it was Agent under this Agreement.
ARTICLE X - Miscellaneous
Section 10.1. Waivers and Amendments; Acknowledgment.
(a) Waivers and Amendments. No failure or delay (whether by course
of conduct or otherwise) by any Lender in exercising any right, power or
remedy which such Lender Party may have under any of the Loan Documents
shall operate as a waiver thereof or of any other right, power or remedy,
nor shall any single or partial exercise by any Lender Party of any such
right, power or remedy preclude any other or further exercise thereof or of
any other right, power or remedy. No waiver of any provision of any Loan
Document and no consent to any departure therefrom shall ever be effective
unless it is in writing and signed as provided below in this section, and
then such waiver or consent shall be effective only in the specific
instances and for the purposes for which given and to the extent specified
in such writing. No notice to or demand on any Restricted Person shall in
any case of itself entitle any Restricted Person to any other or further
notice or demand in similar or other circumstances. This Agreement and the
other Loan Documents set forth the entire understanding between the parties
hereto with respect to the transactions contemplated herein and therein and
supersede all prior discussions and understandings with respect to the
subject matter hereof and thereof, and no waiver, consent, release,
modification or amendment of or supplement to this Agreement or the other
Loan Documents shall be valid or effective against any party hereto unless
the same is in writing and signed by (i) if such party is Borrower, by
Borrower, (ii) if such party is any Agent or LC Issuer, by such party, and
(iii) if such party is a Lender, by such Lender or by Agents on behalf of
Lenders with the written consent of Majority Lenders (which consent has
already been given as to the termination of the Loan Documents as provided
in Section 10.9). Notwithstanding the foregoing or anything to the contrary
herein, Administrative Agent shall not, without the prior consent of each
individual Lender, execute and deliver on behalf of such Lender any waiver
or amendment which would: (1) waive any of the conditions specified in
Article IV (provided that Administrative Agent may in its discretion
withdraw any request it has made under Section 4.2(f)), (2) increase the
Percentage Share of any such Lender or the maximum amount any such Lender is
committed to fund in respect of Letter of Credit Obligations and Loans or
subject such Lender to any additional obligations, (3) reduce any fees
payable to such Lender hereunder, or the principal of, or interest on, such
Lender's Note, (4) change any date fixed for any payment of any such fees,
principal or interest, (5) amend the definition herein of "Borrowing Base"
or any of the terms used in that definition, (6) amend the definition herein
of "Majority Lenders" or otherwise change the aggregate amount of Percentage
Shares which is required for Administrative Agent, Lenders or any of them to
take any particular action under the Loan Documents, (7) release Borrower
from its obligation to pay such Lender's Note or any Guarantor from its
guaranty of such payment, except a release of a Guarantor that has ceased to
be a Subsidiary of Borrower or General Partner in a transaction permitted
under this Agreement, (8) release any Collateral, except such releases
relating to sales of property permitted under Section 7.5 or (9) permit a
Restricted Person to make an acquisition of or other Investments in any
Person other than Permitted Investments.
(b) Acknowledgments and Admissions. Borrower hereby represents,
warrants, acknowledges and admits that (i) it has been advised by counsel in
the negotiation, execution and delivery of the Loan Documents to which it is
a party, (ii) it has made an independent decision to enter into this
Agreement and the other Loan Documents to which it is a party, without
reliance on any representation, warranty, covenant or undertaking by Agents
or any other Lender Party, whether written, oral or implicit, other than as
expressly set out in this Agreement or in another Loan Document delivered on
or after the date hereof, (iii) there are no representations, warranties,
covenants, undertakings or agreements by any Lender Party or Agents as to
the Loan Documents except as expressly set out in this Agreement or in
another Loan Document delivered on or after the date hereof, (iv) no Lender
Party or Agents has any fiduciary obligation toward Borrower with respect to
any Loan Document or the transactions contemplated thereby, (v) the
relationship pursuant to the Loan Documents between Borrower and the other
Restricted Persons, on one hand, and each Lender Party and Agents, on the
other hand, is and shall be solely that of debtor and creditor,
respectively, (vi) no partnership or joint venture exists with respect to
the Loan Documents between any Restricted Person and any Lender Party or
Agents, (vii) Administrative Agent is not Borrower's Administrative Agent,
but Administrative Agent for Lenders, (viii) should an Event of Default or
Default occur or exist, each Lender Party will determine in its sole
discretion and for its own reasons what remedies and actions it will or will
not exercise or take at that time, (ix) without limiting any of the
foregoing, Borrower is not relying upon any representation or covenant by
any Lender Party, or any representative thereof, and no such representation
or covenant has been made, that any Lender Party will, at the time of an
Event of Default or Default, or at any other time, waive, negotiate,
discuss, or take or refrain from taking any action permitted under the Loan
Documents with respect to any such Event of Default or Default or any other
provision of the Loan Documents, and (x) all Lender Parties have relied upon
the truthfulness of the acknowledgments in this section in deciding to
execute and deliver this Agreement and to become obligated hereunder.
(c) Representation by Lenders. Each Lender hereby represents that
it will acquire its Note for its own account in the ordinary course of its
commercial lending business; however, the disposition of such Lender's
property shall at all times be and remain within its control and, in
particular and without limitation, such Lender may sell or otherwise
transfer its Note, any participation interest or other interest in its Note,
or any of its other rights and obligations under the Loan Documents subject
to compliance with Sections 10.5(b) through (f), inclusive, and applicable
Law.
(d) Joint Acknowledgment. This written Agreement and the other Loan
Documents represent the final agreement between the parties and may not be
contradicted by evidence of prior, contemporaneous, or subsequent oral
agreements of the parties.
There are no unwritten oral agreements between the parties.
Section 10.2. Survival of Agreements; Cumulative Nature. All of
Restricted Persons' various representations, warranties, covenants and
agreements in the Loan Documents shall survive the execution and delivery of
this Agreement and the other Loan Documents and the performance hereof and
thereof, including the making or granting of the Loans and the delivery of
the Notes and the other Loan Documents, and shall further survive until all
of the Obligations are paid in full to each Lender Party and all of Lender
Parties' obligations to Borrower are terminated. All statements and
agreements contained in any certificate or other instrument delivered by any
Restricted Person to any Lender Party under any Loan Document shall be
deemed representations and warranties by Borrower or agreements and
covenants of Borrower under this Agreement. The representations,
warranties, indemnities, and covenants made by Restricted Persons in the
Loan Documents, and the rights, powers, and privileges granted to Lender
Parties in the Loan Documents, are cumulative, and, except for expressly
specified waivers and consents, no Loan Document shall be construed in the
context of another to diminish, nullify, or otherwise reduce the benefit to
any Lender Party of any such representation, warranty, indemnity, covenant,
right, power or privilege. In particular and without limitation, no
exception set out in this Agreement to any representation, warranty,
indemnity, or covenant herein contained shall apply to any similar
representation, warranty, indemnity, or covenant contained in any other Loan
Document, and each such similar representation, warranty, indemnity, or
covenant shall be subject only to those exceptions which are expressly made
applicable to it by the terms of the various Loan Documents.
Section 10.3. Notices. All notices, requests, consents, demands and
other communications required or permitted under any Loan Document shall be
in writing, unless otherwise specifically provided in such Loan Document
(provided that Agents may give telephonic notices to the other Lender
Parties), and shall be deemed sufficiently given or furnished if delivered
by personal delivery, by facsimile or other electronic transmission, by
delivery service with proof of delivery, or by registered or certified
United States mail, postage prepaid, to Borrower and Restricted Persons at
the address of Borrower specified on the signature pages hereto and to each
Lender Party at its address specified on the signature pages hereto (unless
changed by similar notice in writing given by the particular Person whose
address is to be changed). Any such notice or communication shall be deemed
to have been given (a) in the case of personal delivery or delivery service,
as of the date of first attempted delivery during normal business hours at
the address provided herein, (b) in the case of facsimile or other
electronic transmission, upon receipt, or (c) in the case of registered or
certified United States mail, three days after deposit in the mail;
provided, however, that no Borrowing Notice or Continuation/Conversion
Notice shall become effective until actually received by Administrative
Agent.
Section 10.4. Payment of Expenses; Indemnity.
(a) Payment of Expenses. Whether or not the transactions
contemplated by this Agreement are consummated, Borrower will promptly (and
in any event, within 30 days after any invoice or other statement or notice)
pay: (i) all transfer, stamp, mortgage, documentary or other similar taxes,
assessments or charges levied by any governmental or revenue authority in
respect of this Agreement or any of the other Loan Documents or any other
document referred to herein or therein, (ii) all reasonable costs and
expenses incurred by or on behalf of Agents (including attorneys' fees,
consultants' fees and engineering fees, travel costs and miscellaneous
expenses) in connection with (1) the negotiation, preparation, execution and
delivery of the Loan Documents, and any and all consents, waivers or other
documents or instruments relating thereto, (2) the filing, recording,
refiling and re-recording of any Loan Documents and any other documents or
instruments or further assurances required to be filed or recorded or
refiled or re-recorded by the terms of any Loan Document, (3) the borrowings
hereunder and other action reasonably required in the course of
administration hereof, (4) monitoring or confirming (or preparation or
negotiation of any document related to) any Restricted Person's compliance
with any covenants or conditions contained in this Agreement or in any Loan
Document, and (iii) all reasonable costs and expenses incurred by or on
behalf of any Lender Party or Agent (including attorneys' fees, consultants'
fees and accounting fees) in connection with the defense or enforcement of
any of the Loan Documents (including this section), any attempt to cure any
breach thereunder by any Restricted Person or the defense of any Lender
Party or Agent's exercise of its rights thereunder. In addition to the
foregoing, until all Obligations have been paid in full, Borrower will also
pay or reimburse Agent for all reasonable out-of-pocket costs and expenses
of Agent or its agents or employees in connection with the continuing
administration of the Loans and the related due diligence of Agent,
including travel and miscellaneous expenses and fees and expenses of Agent's
outside counsel, reserve engineers and consultants engaged in connection
with the Loan Documents.
(b) Indemnity. Borrower agrees to indemnify each Lender Party and
Agent, upon demand, from and against any and all liabilities, obligations,
claims, losses, damages, penalties, fines, actions, judgments, suits,
settlements, costs, expenses or disbursements (including reasonable fees of
attorneys, accountants, experts and advisors) of any kind or nature
whatsoever (in this section collectively called "liabilities and costs")
which to any extent (in whole or in part) may be imposed on, incurred by, or
asserted against such Lender Party or Agent growing out of, resulting from
or in any other way associated with any of the Collateral, the Loan
Documents and the transactions and events (including the enforcement or
defense thereof) at any time associated therewith or contemplated therein
whether arising in contract or in tort or otherwise and including any
violation or noncompliance with any Environmental Laws by any Lender Party,
Agent or any other Person or any liabilities or duties of any Lender Party,
Agent or any other Person with respect to the actual or alleged presence of
Hazardous Materials found in or released into the environment).
The foregoing indemnification shall apply whether or not such liabilities
and costs are in any way or to any extent owed, in whole or in part, under
any claim or theory of strict liability or caused, in whole or in part, by
any negligent act or omission of any kind by any Lender Party or Agent,
provided only that no Lender Party or Agent shall be entitled under this
section to receive indemnification for that portion, if any, of any
liabilities and costs which is proximately caused by its own individual
gross negligence or willful misconduct, as determined in a final judgment.
If any Person (including Borrower or any of its Affiliates) ever alleges
such gross negligence or willful misconduct by any Lender Party or Agent,
the indemnification provided for in this section shall nonetheless be paid
upon demand, subject to later adjustment or reimbursement, until such time
as a court of competent jurisdiction enters a final judgment as to the
extent and effect of the alleged gross negligence or willful misconduct. As
used in this section the term "Lender Party" and "Agent" shall refer not
only to each Person designated as such in Section 1.1 but also to each
director, officer, agent, attorney, employee, representative and Affiliate
of such Persons.
Section 10.5. Joint and Several Liability Parties in Interest
Assignments; Replacement Notes.
(a) All Obligations which are incurred by two or more Restricted
Persons shall be their joint and several obligations and liabilities. All
grants, covenants and agreements contained in the Loan Documents shall bind
and inure to the benefit of the parties thereto and their respective
successors and permitted assigns; provided, however, that no Restricted
Person may assign or transfer any of its rights or delegate any of its
duties or obligations under any Loan Document without the prior consent of
all Lenders. Neither Borrower nor any Affiliates of Borrower shall directly
or indirectly purchase or otherwise retire any Obligations owed to any
Lender nor will any Lender accept any offer to do so, unless each Lender
shall have received substantially the same offer with respect to the same
Percentage Share of the Obligations owed to it. If Borrower or any
Affiliate of Borrower at any time purchases some but less than all of the
Obligations owed to all Lender Parties, such purchaser shall not be entitled
to any rights of any Lender under the Loan Documents unless and until
Borrower or its Affiliates have purchased all of the Obligations.
(b) No Lender shall sell any participation interest in its
commitment hereunder or any of its rights under its Loans or under the Loan
Documents to any Person unless the agreement between such Lender and such
participant at all times provides: (i) that such participation exists only
as a result of the agreement between such participant and such Lender and
that such transfer does not give such participant any right to vote as a
Lender or any other direct claims or rights against any Person other than
such Lender, (ii) that such participant is not entitled to payment from any
Restricted Person under Sections 3.2 through 3.6 of amounts in excess of
those payable to such Lender under such sections (determined without regard
to the sale of such participation), and (iii) unless such participant is an
Affiliate of such Lender, that such participant shall not be entitled to
require such Lender to take any action under any Loan Document or to obtain
the consent of such participant prior to taking any action under any Loan
Document, except for actions which would require the consent of all Lenders
under subsection (a) of Section 10.1. No Lender selling such a
participation shall, as between the other parties hereto and such Lender, be
relieved of any of its obligations hereunder as a result of the sale of such
participation. Each Lender which sells any such participation to any Person
(other than an Affiliate of such Lender) shall give prompt notice thereof to
Administrative Agent and Borrower; provided, however, that no liability
shall arise if any Lender fails to give such notice to Borrower.
(c) Except for sales of participations under the immediately
preceding subsection, no Lender shall make any assignment or transfer of any
kind of its commitments or any of its rights under its Loans or under the
Loan Documents, except for assignments to an Eligible Transferee, or,
subject to the provisions of subsection (g) below, to an Affiliate and then
only if such assignment is made in accordance with the following
requirements:
(i) Each such assignment shall apply to all Obligations owing to
the assignor Lender hereunder and to the unused portion of the assignor
Lender's commitments, so that after such assignment is made the
assignor Lender shall have a fixed (and not a varying) Percentage Share
in its Loans and Note and be committed to make that Percentage Share of
all future Loans, the assignee shall have a fixed Percentage Share in
such Loans and Note and be committed to make that Percentage Share of
all future Loans, and the Percentage Share of the Maximum Loan Amount
of each of the assignor and assignee shall equal or exceed $10,000,000.
(ii) The parties to each such assignment shall execute and deliver
to Administrative Agent, for its acceptance and recording in the
"Register" (as defined below in this section), an Assignment and
Acceptance in the form of Exhibit I, appropriately completed, together
with the Note subject to such assignment and a processing fee payable
by such assignor Lender (and not at Borrower's expense) to
Administrative Agent of $3,500. Upon such execution, delivery, and
payment and upon the satisfaction of the conditions set out in such
Assignment and Acceptance, then (i) Borrower shall issue new Notes to
such assignor and assignee upon return of the old Notes to Borrower,
and (ii) as of the "Settlement Date" specified in such Assignment and
Acceptance the assignee thereunder shall be a party hereto and a Lender
hereunder and Administrative Agent shall thereupon deliver to Borrower
and each Lender a revised Schedule 1 hereto showing the revised
Percentage Shares of such assignor Lender and such assignee Lender and
the Percentage Shares of all other Lenders.
(iii) Each assignee Lender organized under the laws of a
jurisdiction outside of the United States shall (to the extent it has
not already done so) provide Administrative Agent and Borrower with the
"Prescribed Forms" referred to in Section 3.7(d).
(d) Any Lender may at any time pledge all or any portion of its Loan
and Note (and related rights under the Loan Documents including any portion
of its Note) to any of the twelve (12) Federal Reserve Banks organized under
Section 4 of the Federal Reserve Act, 12 U.S.C. Section 341. No such pledge
or enforcement thereof shall release any such Lender from its obligations
under any of the Loan Documents; provided that all related costs, fees and
expenses in connection with any such pledge shall be for the sole account of
such Lender.
(e) By executing and delivering an Assignment and Acceptance, each
assignee Lender thereunder will be confirming to and agreeing with Borrower,
Administrative Agent and each other Lender Party that such assignee
understands and agrees to the terms hereof, including Article IX hereof.
(f) Administrative Agent shall maintain a copy of each Assignment
and Acceptance and a register for the recordation of the names and addresses
of Lenders and the Percentage Shares of, and principal amount of the Loans
owing to, each Lender from time to time (in this section called the
"Register"). The entries in the Register shall be conclusive, in the
absence of manifest error, and Borrower and each Lender Party may treat each
Person whose name is recorded in the Register as a Lender Party hereunder
for all purposes. The Register shall be available for inspection by
Borrower or any Lender Party at any reasonable time and from time to time
upon reasonable prior notice.
(g) Any Lender may assign or transfer its commitment or its rights
under its Loans or under the Loan Documents to (i) any Affiliate that is
wholly-owned direct or indirect subsidiary of such Lender or of any Person
that wholly owns, directly or indirectly, such Lender, or (ii) if such
Lender is a fund that invests in bank loans, any other fund that invests in
bank loans and is advised or managed by (A) the same investment advisor as
any Lender or (B) any Affiliate of such investment advisor that is a wholly-
owned direct or indirect subsidiary of any Person that wholly owns, directly
or indirectly, such investment advisor, subject to the following additional
conditions:
(x) any right of such Lender assignor and such assignee to vote
as a Lender, or any other direct claims or rights against any other
Persons, shall be uniformly exercised or pursued in the manner that
such Lender assignor would have so exercised such vote, claim or right
if it had not made such assignment or transfer;
(y) such assignee shall not be entitled to payment from any
Restricted Person under Sections 3.2 through 3.7 of amounts in excess
of those payable to such Lender assignor under such sections
(determined without regard to such assignment or transfer); and
(z) if such Lender assignor assigns or transfers to such assignee
any of such Lender's commitment, such assignee may become primarily
liable for such commitment, but such assignment or transfer shall not
relieve or release such Lender from such commitment.
(h) Upon receipt of an affidavit reasonably satisfactory to Borrower
of an officer of any Lender as to the loss, theft, destruction or mutilation
of its Note or any Security Document which is not of public record, and, in
the case of any such loss, theft, destruction or mutilation, upon
cancellation of such Note or such Security Document, Borrower will execute
and deliver, in lieu thereof, a replacement Note in the same principal
amount thereof and otherwise of like tenor (or each Restricted Person a
party to any such Security Document will execute and deliver a replacement
Security Document of like tenor).
Section 10.6. Confidentiality. Each Lender Party agrees (on behalf of
itself and each of its Affiliates, and each of its and their directors,
officers, agents, attorneys, employees, and representatives) that it (and
each of them) will take all reasonable steps to keep confidential any non-
public information supplied to it by or at the direction of any Restricted
Person so identified when delivered, provided, however, that this
restriction shall not apply to (a) information which has at the time in
question entered the public domain, (b) information which is required to be
disclosed by Law (whether valid or invalid) of any Tribunal, (c) any
disclosure to any Lender Party's Affiliates, auditors, attorneys, or agents,
(d) any disclosure to any other Lender Party or to any purchaser or
prospective purchaser of participations or other interests in any Loan or
Loan Document (provided each such Person first agrees to hold such
information in confidence on the terms provided in this section), or (e) any
disclosure in the course of enforcing its rights and remedies during the
existence of an Event of Default.
Section 10.7. Governing Law; Submission to Process. Except to the
extent that the Law of another jurisdiction is expressly elected in a Loan
Document, the Loan Documents shall be deemed contracts and instruments made
under the Laws of the State of New York and shall be construed and enforced
in accordance with and governed by the Laws of the State of New York and the
Laws of the United States of America, without regard to principles of
conflicts of law. Borrower hereby agrees that any legal action or
proceeding against Borrower with respect to this Agreement, the Notes or any
of the Loan Documents may be brought in the courts of the State of New York
or of the United States of America for the Southern District of New York as
Lender Parties may elect, and, by execution and delivery hereof, Borrower
accepts and consents for itself and in respect to its property, generally
and unconditionally, the non-exclusive jurisdiction of the aforesaid courts.
Borrower agrees that Section 5-1401 and 5-1402 of the General Obligations
Law of the State of New York shall apply to the Loan Documents and waives
any right to stay or to dismiss any action or proceeding brought before said
courts on the basis of forum non conveniens. In furtherance of the
foregoing, Borrower hereby irrevocably designates and appoints CT
Corporation system, 111 8th Avenue, New York, New York, 10011, as agent of
Borrower to receive service of all process brought against Borrower with
respect to any such proceeding in any such court in New York, such service
being hereby acknowledged by Borrower to be effective and binding service in
every respect. Copies of any such process so served shall also be sent by
registered mail to Borrower at its address set forth below, but the failure
of Borrower to receive such copies shall not affect in any way the service
of such process as aforesaid. Borrower shall furnish to Lender Parties a
consent of CT Corporation System agreeing to act hereunder prior to the
effective date of this agreement. Nothing herein shall affect the right of
Lender Parties to serve process in any other manner permitted by Law of
shall limit the right of Lender Parties to bring proceedings against
Borrower in the courts of any other jurisdiction. If for any reason Ct
Corporation System shall resign or otherwise cease to act as Borrower's
agent, Borrower hereby irrevocably agrees to (a) immediately designate and
appoint a new agent acceptable to Administrative Agent to serve in such
capacity and, in such event, such new agent shall be deemed to be
substituted for Ct corporation System for all purposes hereof and
(b) promptly deliver to Agent the written consent (in form and substance
satisfactory to Administrative Agent) of such new agent agreeing to serve in
such capacity.
Section 10.8. Limitation on Interest. Lender Parties, Restricted
Persons and any other parties to the Loan Documents intend to contract in
strict compliance with applicable usury Law from time to time in effect. In
furtherance thereof such Persons stipulate and agree that none of the terms
and provisions contained in the Loan Documents shall ever be construed to
create a contract to pay, for the use, forbearance or detention of money,
interest in excess of the maximum amount of interest permitted to be
contracted for, charged, or received by applicable Law from time to time in
effect. Neither any Restricted Person nor any present or future guarantors,
endorsers, or other Persons hereafter becoming liable for payment of any
Obligation shall ever be liable for unearned interest thereon or shall ever
be required to pay interest thereon in excess of the maximum amount that may
be lawfully contracted for, charged, or received under applicable Law from
time to time in effect, and the provisions of this section shall control
over all other provisions of the Loan Documents which may be in conflict or
apparent conflict herewith. Lender Parties expressly disavow any intention
to contract for, charge, or receive excessive unearned interest or finance
charges in the event the maturity of any Obligation is accelerated. If
(a) the maturity of any Obligation is accelerated for any reason, (b) any
Obligation is prepaid and as a result any amounts held to constitute
interest are determined to be in excess of the legal maximum, or (c) any
Lender or any other holder of any or all of the Obligations shall otherwise
collect moneys which are determined to constitute interest which would
otherwise increase the interest on any or all of the Obligations to an
amount in excess of that permitted to be contracted for, charged or received
by applicable Law then in effect, then all sums determined to constitute
interest in excess of such legal limit shall, without penalty, be promptly
applied to reduce the then outstanding principal of the related Obligations
or, at such Lender's or holder's option, promptly returned to Borrower or
other payor thereof upon such determination. In determining whether or not
the interest paid or payable, under any specific circumstance, exceeds the
maximum amount permitted under applicable Law, Lender Parties and Restricted
Persons (and any other payors thereof) shall to the greatest extent
permitted under applicable Law, (i) characterize any non-principal payment
as an expense, fee or premium rather than as interest, (ii) exclude
voluntary prepayments and the effects thereof, and (iii) amortize, prorate,
allocate, and spread the total amount of interest throughout the entire
contemplated term of the instruments evidencing the Obligations in
accordance with the amounts outstanding from time to time thereunder and the
maximum legal rate of interest from time to time in effect under applicable
Law in order to lawfully charge the maximum amount of interest permitted
under applicable Law.
Section 10.9. Termination; Limited Survival. In its sole and absolute
discretion Borrower may at any time that no Obligations are owing or
outstanding elect in a written notice delivered to Administrative Agent to
terminate this Agreement. Upon receipt by Administrative Agent of such a
notice, if no Obligations are then owing or outstanding this Agreement and
all other Loan Documents shall thereupon be terminated and the parties
thereto released from all prospective obligations thereunder.
Notwithstanding the foregoing or anything herein to the contrary, any
waivers or admissions made by any Restricted Person in any Loan Document,
any Obligations under Sections 3.2 through 3.6, and any obligations which
any Person may have to indemnify or compensate any Lender Party or Agent
shall survive any termination of this Agreement or any other Loan Document.
At the request and expense of Borrower, Administrative Agent shall prepare
and execute all necessary instruments to reflect and effect such termination
of the Loan Documents. Administrative Agent is hereby authorized to execute
all such instruments on behalf of all Lenders, without the Joinder of or
further action by any Lender.
Section 10.10. Severability. If any term or provision of any Loan
Document shall be determined to be illegal or unenforceable all other terms
and provisions of the Loan Documents shall nevertheless remain effective and
shall be enforced to the fullest extent permitted by applicable Law.
Section 10.11. Counterparts. This Agreement may be separately
executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed shall be deemed to
constitute one and the same Agreement.
Section 10.12. Waiver of Jury Trial, Punitive Damages, Etc.
Restricted Persons and Lender Parties mutually hereby knowingly,
voluntarily, and intentionally waive the right to a trial by jury in respect
of any claim based hereon, arising out of, under or in connection with, this
agreement or any other Loan Documents contemplated to be executed in
connection herewith or any course of conduct, course of dealings, statements
(whether verbal or written) or actions of any party. This waiver
constitutes a material inducement for Lenders to enter into this Agreement
and the other Loan Documents and make the Loans. Borrower and each Lender
Party hereby further (a) irrevocably waives, to the maximum extent not
prohibited by Law, any right it may have to claim to recover in any such
litigation any "Special Damages," as defined below, (b) certifies that no
party hereto nor any representative or agent or counsel for any party hereto
has represented, expressly or otherwise, or implied that such party would
not, in the event of litigation, seek to enforce the foregoing waivers, and
(c) acknowledges that it has been induced to enter into this Agreement, the
other Loan Documents and the transactions contemplated hereby and thereby
by, among other things, the mutual waivers and certifications contained in
this section. As used in this section, "Special Damages" includes all
special, consequential, exemplary, or punitive damages (regardless of how
named), but does not include any payments or funds which any party hereto
has expressly promised to pay or deliver to any other party hereto.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK.]
IN WITNESS WHEREOF, this Agreement is executed as of the date first
written above.
BORROWER: GENESIS CRUDE OIL, L.P.
By: GENESIS ENERGY, L.L.C.,
its general partner
By: /s/ Ross A. Benavides
-----------------------------------
Name: Ross A. Benavides
Title: Chief Financial Officer,
General Counsel and Secretary
GUARANTORS: GENESIS ENERGY, L.P.
By: GENESIS ENERGY, L.L.C.,
its general partner
By: /s/ Ross A. Benavides
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Name: Ross A. Benavides
Title: Chief Financial Officer,
General Counsel and Secretary
By: GENESIS ENERGY, L.L.C.,
its general partner
By: /s/ Ross A. Benavides
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Name: Ross A. Benavides
Title: Chief Financial Officer,
General Counsel and Secretary
Address for Borrower and Guarantors:
500 Dallas Street, Suite 2500
Houston, Texas 77002
Attention: Ross A. Benavides
Telephone: 713-860-2528
Fax: 713-860-2636
CITICORP NORTH AMERICA, INC.,
Administrative Agent, Collateral Agent, LC
Issuer and a Lender
By: /s/ John Dorans
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Name: John Dorans
Title: IRM
Address: 250 West Street/8th Fl.
Phone: (212) 723-3104
Fax: (212) 723-3899
Citicorp North America, Inc.
1200 Smith Street, Suite 2000
Houston, Texas 77002
Attention: Brian Smith
Telephone: (713) 654-2911
Fax: (713) 654-2849