LOAN AGREEMENT
BY AND BETWEEN
GENESIS CRUDE OIL, L.P.
("Borrower")
and
BANK ONE, TEXAS, N.A.
("Lender")
Dated as of the 14th day of August, 1998
LOAN AGREEMENT
TABLE OF CONTENTS
CAPTION PAGE
Section 1. General Terms 1
1.1 Indebtedness 1
1.2 Certain Definitions; Use of Defined Terms;
Accounting Terms; Singular or Plural 1
1.3 Credit Facility 8
1.4 Repayment Schedule 12
1.5 Prepayment/ 13
1.6 Authorized Officer 13
Section 2. Representations and Warranties 13
2.1 Corporate Existence 13
2.2 Corporate Authority 13
2.3 Financial Condition 14
2.4 Investments, Loans, Advances and Guarantees 14
2.5 Liabilities and Litigation 14
2.6 Titles and Encumbrances 14
2.7 No Default 14
2.8 Subsidiaries 15
2.9 Taxes 15
2.10 Compliance 15
2.11 Pension Reform Act 15
2.12 Environmental Laws 16
2.13 Margin Securities 17
2.14 Patents, etc. 17
2.15 Full Disclosure 17
2.16 Credit Agreements 17
2.17 Investment Company Act 18
2.18 Public Utility Holding Company Act 18
Section 3. Affirmative Covenants 18
3.1 Reporting Requirements 18
3.2 Taxes and Other Liens 20
3.3 Maintenance 20
3.4 Further Assurances 20
3.5 Performance of Obligations 20
3.6 Reimbursement of Costs and Expenses 21
3.7 Insurance 21
3.8 Certificate of Compliance 22
3.9 Litigation 22
3.10 Security 22
3.11 Borrowing Base 23
3.12 Payments from Account Debtors 23
3.13 Audits 23
Section 4. Negative Covenants 24
4.1 Guarantees and Debts 24
4.2 Distribution and Redemption 24
4.3 Investments, Loans and Advances 25
4.4 Mergers, etc. 25
4.5 Encumbrances 25
4.6 Sale of Assets 26
4.7 Financial Covenants 26
4.8 Basic Line of Business 27
4.9 Transactions with Affiliates 27
4.10 Maximum Unhedged Exposure 27
Section 5. Events of Default and Remedies 27
5.1 Events of Default 27
5.2 Remedies 29
Section 6. Closing 29
6.1 Counsel to Lender 29
6.2 Required Documents 29
6.3 Other Conditions 29
6.4 Material Adverse Changes 30
Section 7. Miscellaneous 30
7.1 Survival of Various Matters 30
7.2 Notices 30
7.3 Successors and Assigns 31
7.4 Renewals 31
7.5 No Waiver 31
7.6 Governing Law 31
7.7 Non-Subordination 31
7.8 Exhibits 32
7.9 Payment on Non-Business Days 32
7.10 Severability 32
7.11 Controlling Document 32
7.12 Savings Clause 32
7.13 Investment 33
7.14 Set Off 33
7.15 INDEMNIFICATION 33
7.16 Change of Ownership or Control 33
Exhibits
"1.3.1" Borrowing Application
"1.3.2" Form of Revolving Note
"2.3" Adverse Change
"2.5" Liabilities and Litigation
"2.8" Subsidiaries
"3.8" Certificate of Compliance
"3.11" Borrowing Base Report
LOAN AGREEMENT
THIS LOAN AGREEMENT made and entered into as of the 14th day
of August, 1998, by and between Genesis Crude Oil, L.P., a
Delaware limited partnership, with offices and place of business
at ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇ (hereinafter
called "Borrower") and Bank One, Texas, N.A., a national banking
corporation, with offices at ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
(hereinafter called "Lender").
AGREEMENT
WHEREAS, Lender has agreed to lend to and/or issue letters
of credit for the account of Borrower in an aggregate of up to
$35,000,000.
WHEREAS, Lender and ▇▇▇▇▇▇▇ ▇▇▇▇▇ Barney Holdings
Inc.("Salomon") have agreed to the terms of an Intercreditor
Agreement dated as of the date hereof (the "Intercreditor
Agreement") among Lender and Salomon pursuant to which Lender and
Salomon have agreed to a certain intercreditor arrangement
respecting the Collateral.
NOW, THEREFORE, in consideration of the premises and the
mutual covenants and agreements contained herein, Borrower and
Lender agree as follows:
Section 1. General Terms
1.1 Indebtedness. Upon the terms and conditions
hereinafter set forth, the Lender agrees to lend to and/or issue
letters of credit for the account of Borrower in an aggregate of
up to $35,000,000.00, outstanding at any time as evidenced by a
Revolving Line of Credit as more specifically described in
Section 1.3(a) hereof and the Letter of Credit Facility as more
specifically described in Section 1.3(b) hereof.
1.2 Certain Definitions; Use of Defined Terms; Accounting
Terms; Singular or Plural. (a) As used herein:
(1) "Administrative Service Fees" means fees paid by
the Borrower to the General Partner for administrative and
management services and support rendered to the Borrower by
the General Partner.
(2) "Affiliate" shall mean any Person who is an
"affiliate" within the meaning of the regulations
promulgated pursuant to the Securities Act of 1933, as such
regulations are amended from time to time.
(3) "Agreement" shall mean this Loan Agreement as it
may be amended or supplemented from time to time.
(4) "Authorized Officer" shall mean the president,
executive vice president or chief financial officer of the
General Partner or any other individual designated as an
Authorized Officer by the Members or Managers of the General
Partner.
(5) "Base Rate" shall mean the variable rate of
interest announced by Lender from time to time as its base
rate of interest and, without notice to the Borrower or any
other person, such rate of interest shall change as and when
changes in that base rate of interest are announced. The
Base Rate is set by Lender as a general reference rate of
interest, taking into account such factors as Lender may
deem appropriate, it being understood that many of the
Lender's commercial or other loans are priced in relation to
such rate, that it is not necessarily the lowest or best
rate of interest actually charged on any loan, and that
Lender may make various commercial or other loans at rates
of interest having no relationship to the Base Rate. If at
any time the "Base Rate" of Lender is no longer available,
the owner of the Note ("Owner") will designate as "Base
Rate" a different variable rate of interest announced by a
national banking association of Owner's choice.
(6) "Borrowing Base" shall mean eighty percent (80%)
of Eligible Accounts.
(7) "Borrowing Base Report" shall mean the report in
the form attached as Exhibit "3.11".
(8) "Business Day" shall mean any weekday on which
Lender is open for business.
(9) "Capital Assets" shall mean tangible property,
real or personal, with a useful life of greater than one (1)
year.
(10) "Capital Expenditures" shall mean the cost paid
for the acquisition of Capital Assets.
(11) "Certificate of Compliance" shall mean the
certificate described in Section 3.8 of this Agreement.
(12) "Collateral" shall mean the property described in
Section 3.10 of this Agreement, securing payment of the
Indebtedness and performance of the obligations of the
Borrower under this Agreement and the Security Instruments.
(13) "Commitment Fee" means a fee payable by Borrower
to Lender on the average daily unused portion of the
Revolving Line of Credit (use shall include the face amount
of Credits and the principal amount of Loans outstanding)
from and including October 1998 to the end of the Credit
Facility Commitment Period, at the rate of thirty-five one
hundredths percent (0.35%) per annum based on a 365 or 366
day year as applicable and the actual number of days
elapsed, payable in arrears on the first day of each
January, April, July, and October, commencing on October 1,
1998, and payable through the end of the Credit Facility
Commitment Period, with the final payment due on the
Maturity Date.
(14) "Credit" means any irrevocable standby letter of
credit issued by Lender for Borrower's account which shall
have an expiry date of not later than 5:00 p.m. Houston,
Texas time on the LOC Expiration Date, and shall be in the
form acceptable to Lender.
(15) "Credit Facility" shall mean the credit facility
described in Section 1.3, including the Revolving Line of
Credit and the Letter of Credit Facility.
(16) "Credit Facility Commitment Period" means the
period from the date of the satisfaction of all the closing
conditions in this Agreement until the earliest to occur of
(i) a Default with respect to the provisions Section 5.1(h)
or (i), (ii) an Event of Default, or (iii) August 14, 2000.
(17) "Credit Fees" means three-fourths of one percent
(3/4%) per annum on the face amount of each Credit;
provided, however, that the minimum fee per Credit shall not
be less than $500.00; provided, further, that all Credit
Fees shall be due and payable at the time of the issuance of
each Credit and shall be fully earned and non-refundable
when paid.
(18) "Current Ratio" shall mean current assets divided
by current liabilities, excluding amounts owed pursuant to
the Revolving Line of Credit.
(19) "Debt" shall mean with respect to any Person all
items of indebtedness, obligation or liability, whether
matured or unmatured, liquidated or unliquidated, direct or
contingent, joint or several, including, but without
limitation:
(a) All indebtedness guaranteed, directly or
indirectly, in any manner, or endorsed (other than for
collection or deposit in the ordinary course of
business) or discounted with recourse;
(b) All indebtedness in effect guaranteed,
directly or indirectly, through agreements, contingent
or otherwise: (1) to purchase such indebtedness; or (2)
to purchase, sell or lease (as lessee) property,
products, materials or supplies or to purchase or sell
services, primarily for the purpose of enabling the
debtor to make payment of such indebtedness or to
assure the owner of the indebtedness against loss; or
(3) to supply funds to or in any other manner invest in
the debtor;
(c) All indebtedness secured by (or for which the
holder of such indebtedness has an existing right,
contingent or otherwise, to be secured by) any
mortgage, deed of trust, pledge, lien, security
interest or other charge or encumbrance upon property
owned or acquired subject to such mortgage, deed of
trust, pledge, lien, security interest, charge or
encumbrance, whether or not the liabilities secured
thereby have been assumed; and
(d) All indebtedness incurred as the lessee of
goods or services under leases that, in accordance with
generally accepted accounting principles, should be
reflected on the lessee's balance sheet.
(20) "Default" shall mean an event which with the
giving of notice, the lapse of time, or both, constitutes an
Event of Default.
(21) "Defined Benefit Pension Plans," "Pension Benefit
Guaranty Corporation," "Reportable Event," and "Prohibited
Transaction" shall have the same respective meanings as are
given to those terms in ERISA.
(22) "Eligible Accounts" shall mean the aggregate of
all of Borrower's accounts receivable acceptable to Lender
in Lender's sole discretion, including accounts which have
or have not yet been invoiced and which have been earned by
delivery of, or nomination of delivery of, crude oil, and,
in all events, satisfy the following conditions: (i) are
due and payable on or before the twenty-first (21st) day of
the month immediately following the creation of such
account; (ii) have arisen from Borrower's sale of goods in
which Borrower had sole ownership where such goods have been
shipped or delivered to, or nominated for shipment or
delivery to, the account debtor; (iii) represent complete
bona fide transactions which require no further act under
any circumstances on Borrower's part to make such accounts
receivable payable by the account debtor; (iv) the goods the
sale of which gave rise to such accounts receivable were
shipped or delivered to, or have been nominated for shipment
or delivery to, the account debtor on an absolute sale basis
and not on consignment, a sale or return basis, or on the
basis of any similar understanding; (v) the goods of sale
giving rise to such accounts receivable were not, at the
time of sale thereof, subject to any lien, except the
security interest in favor of Lender created by the Security
Instruments and as set forth in the Intercreditor Agreement;
(vi) are not subject to any provision prohibiting assignment
or requiring notice of or consent to such assignment, except
as may be required by the Loan Documents as that term is
defined in the Master Credit Support Agreement; (vii) are
subject to a perfected, first priority security interest in
favor of Lender (subject to liens securing the Obligations
as that term is defined in the Master Credit Support
Agreement); (viii) are not subject to setoff, counterclaim,
defense, allowance, dispute or adjustment other than normal
discounts for prompt payment and the goods of sale which
gave rise to accounts receivable have not been returned,
rejected, repossessed, lost or damaged; (ix) have arisen in
the ordinary course of Borrower's business and for which no
notice of bankruptcy, insolvency or financial difficulty of
the account debtor shall have been received or be
anticipated by Borrower or Lender; (x) are not evidenced by
chattel paper or an instrument of any kind; (xi) are owed by
the United States or any department, agency or
instrumentality thereof if the provisions of the Federal
Assignment of Claims Act have been satisfied; and (xii) are
not owed by any of Borrower's Affiliates, except as agreed
by the Lender in writing. No account receivable owed by an
account debtor to Borrower shall be included as an Eligible
Account if more than fifteen percent (15%) of the balances
then outstanding on accounts receivable owed by such account
debtor and its affiliates to Borrower have remained unpaid
for more than thirty (30) days or otherwise do not
constitute Eligible Accounts. All accounts receivable owed
by an account debtor with a debt rating of A or lower by
Standard & Poor's Corporation and its affiliates to Borrower
in excess of fifteen percent (15%) of Borrower's Eligible
Accounts (prior to making this adjustment) shall not be
included as Eligible Accounts.
(23) "ERISA" means the Employee Retirement Income
Security Act of 1974, as the same may be amended from time
to time.
(24) "Event of Default" shall mean any event specified
in Section 5 of this Agreement provided that any requirement
for the giving of notice, the lapse of time, or the
happening of any condition, event or act has been satisfied.
(25) "Facility Fee" shall mean a fee in the amount of
$105,000, $17,500 of which has been received by Lender,
$35,000 of which is payable upon execution of this
Agreement, and $52,500 of which is payable on the first
anniversary date of this Agreement.
(26) "Federal Funds Rate" shall mean at any time a
fluctuating interest rate per annum equal for each day to
the weighted average of the rates on overnight Federal funds
transactions with members of the Federal Reserve System
arranged by Federal funds brokers, as published for such day
(or, if such day is not a Banking Day, for the next
preceding Business Day) by the Federal Reserve Bank of New
York, or, if such rate is not so published for any day which
is a Business Day, the average of the quotations for such
day on such transactions received by the Lender from three
Federal funds brokers of recognized standing selected by the
Lender.
(27) "Financial Statements" shall mean the audit
report, annual financial statements, and interim statements
described or referred to in Section 3.1 of this Agreement.
(28) "General Partner" shall mean Genesis Energy,
L.L.C., a Delaware limited liability company.
(29) "Indebtedness" shall mean all sums owed or to be
owed by the Borrower to Lender whether principal or
interest, including principal and interest on the Note,
reimbursement of advances pursuant to any Credit, and
reimbursement of monies advanced by Lender pursuant to
Section 3.6 hereof.
(30) "Interest Coverage Ratio" shall mean the ratio of
(a) the sum of (i) the Borrower's net income for the
immediately previous four quarters plus (ii) the Borrower's
interest expense for such period, divided by (b) the
Borrower's interest expense for such period.
(31) "Interest Payment Date" means the last Business
Day of each month for each month during which the Loan
accrues interest at the Base Rate minus one percent (1%) per
annum or the Federal Funds Rate plus one and one-half
percent (1.5%) per annum, and the end of each Interest
Period during which the Loan accrues interest at the LIBOR
Rate plus one and one-quarter percent(1.25%) per annum.
(32) "Interest Period" means each period selected by
the Borrower for which the rate of interest on the Loan is
the LIBOR Rate plus one and one-quarter percent (1.25%) per
annum, commencing on the date selected by the Borrower for
the commencement of such interest rate and ending on the
corresponding day in the calendar month selected by the
Borrower which is one (1) month, two (2) months or three (3)
months or, if such month has no numerical corresponding day,
on the last Business Day of such month. If the last day of
any such Interest Period is not a Business Day, then such
Interest Period shall end on the next succeeding Business
Day. If any Interest Period determined hereunder would
extend beyond the Maturity Date, such Interest Period shall
end on the Maturity Date.
(33) "Investment" shall mean an equity investment
resulting in the ownership of fifty percent (50%) or less of
the securities of a corporation having ordinary voting power
for election of directors or resulting in the ownership of
any partnership interest.
(34) "Letter of Credit Facility" shall mean the Letter
of Credit facility described in Section 1.3(b).
(35) "Letter of Credit Request" means, as applicable,
either (i) a standby letter of credit application in the
form prescribed by Lender, with all the blanks appropriately
completed, and showing Borrower as the account party, or
(ii) if Borrower has executed and delivered to Lender a
Master Letter of Credit Agreement (whether prior to,
contemporaneously with, or after the date of this
Agreement), a standby letter of credit request or
application in the form prescribed in such Master Letter of
Credit Agreement with all the blanks appropriately completed
and showing Borrower as the account party, as any of the
same may be amended or modified from time to time.
(36) "LIBOR Rate" means in respect of any Interest
Period, the rate of interest per annum at which deposits in
U.S. Dollars are offered to major banks in the London
interbank market at approximately 11:00 a.m. (London time),
as reported by the Telerate System page 3750 or such other
page as may replace such page 3750 on such system (rounded
upwards, if necessary, to the nearest one-sixteenth of one
percent) for the purpose of reporting London Interbank
Offered Rates of major banks under the heading for British
Bankers Association Interest Settlement Rates in the column
designated "USD" (U. S. Dollar), two (2) Business Days
before the first day of an Interest Period. In the event
that LIBOR interest rates are not reported on the Telerate
System or such reported rates are not applicable to the
selected Interest Period, the Lender shall notify the
Borrower and upon such notification, the LIBOR Rate shall
mean in respect of any Interest Period the rate of interest
per annum (rounded upwards, if necessary, to the nearest one
sixteenth of one percent) at which the Lender is able to
acquire funds in Dollars equal to the outstanding amount of
the Loan for which the rate is to be determined for the
duration of the relevant Interest Period in the London
Interbank Eurocurrency Market at or about 11:00 a.m. London
time on the second Business Day prior to the commencement of
the relevant Interest Period for value on the first day of
such Interest Period, or at such time in any alternative
market for such funds available to the Lender, as notified
by the Lender to the Borrower, such notification, absent
manifest error, to be conclusive.
(37) "Loan" shall mean any advance pursuant to the
Revolving Line of Credit.
(38) "LOC Expiration Date" means November 14, 2000.
(39) "Master Credit Support Agreement" shall mean the
Master Credit Support Agreement dated as of December 3,
1996, as in effect on the date hereof and as amended from
time to time(without giving effect to any amendments that
are materially adverse to the Lender and are not consented
to by the Lender), between Salomon and the Borrower.
(40) "Maturity Date" shall mean the last day of the
Credit Facility Commitment Period.
(41) "Note" shall mean the promissory note or notes
delivered to Lender by Borrower pursuant to this Agreement,
including, but not limited to, the Revolving Note.
(42) "Obligation" means all present and future
obligations, duties, and liabilities, now or hereafter owed
to Lender by Borrower, arising from or pursuant to the Note,
this Agreement or any of the Security Instruments, together
with all interest accruing thereon and costs, expenses, and
attorneys' fees incurred in the enforcement thereof or
collection of amounts due thereunder.
(43) "Permitted Encumbrances" shall mean the
encumbrances and liens allowed pursuant to Section 4.5.
(44) "Permitted Investments" shall mean investments,
direct obligations or repurchase agreements by the United
States of America or any agency or instrumentality thereof,
investments in certificates of deposit issued by Lender, or
certificates of deposit or banker's acceptances with
maturities of less than one year, issued by other commercial
banks in the United States having capital and surplus in
excess of $500,000,000, and corporate notes rated A or
better by ▇▇▇▇▇'▇ Investor Service, Inc. or Standard &
Poor's Corporation.
(45) "Person" shall mean any individual, corporation,
partnership, association, joint-stock company, trust,
unincorporated organization, joint venture, court,
government or political subdivision or agency thereof.
(46) "Prior Financial Statements" shall mean the
audited financial statements of Borrower and the unaudited
financial statements of the General Partner, each dated
December 31, 1997, which have been delivered to Lender.
(47) "Required Report" shall mean the report of (i)
accounts receivable, unbilled accounts and nominated
accounts of the Borrower (whether invoiced or to be
invoiced) reported for Borrower in appropriate columns
headed "Current" and "Past Due", (ii) at the request of
Lender, accounts payable by Borrower reported in appropriate
columns indicating the past due status of said accounts as
of the same date on which accounts receivable are
determined, and (iii) such other information as may be
reasonably requested by Lender.
(48) "Revolving Line of Credit" shall mean the line of
credit pursuant to Section 1.3(a).
(49) "Revolving Note" shall mean the promissory note of
the Borrower in the original principal amount of
$35,000,000.00 issued pursuant to Section 1.3 of this
Agreement in the form attached as Exhibit "1.3.2" to this
Agreement.
(50) "Security Agreement" shall mean the Security
Agreement dated as of December 3, 1996, as amended by
Amendment No. 1 to Security Agreement date the date hereof
among the Borrower, Salomon, the Lender and Bank One, Texas,
N.A. as Collateral Agent, granting each of Salomon and
Lender a security interest in the Collateral described
therein.
(51) "Security Instruments" shall mean the instruments
described or referred to in Section 3.10 of this Agreement,
including but not limited to the Security Agreement and any
and all instruments now or hereafter executed in connection
with or as security for the Note.
(52) "Subsidiary" shall mean any corporation or
partnership of which more than 50% of the securities
(including partnership interests) having ordinary voting
power for the election of directors or partners is now, or
shall hereafter be, owned or controlled, directly or
indirectly, by the Borrower and/or by one or more
Subsidiaries.
(53) "Tangible Net Worth" shall mean, at a particular
date, the sum of the partners' equity of the Borrower,
including earned surplus, capital surplus and the balance of
the current profit and loss account not transferred to
surplus, excluding, however, all Affiliate transactions that
are not approved by Lender as Eligible Accounts and after
deducting therefrom the net book value of all assets (after
deducting any reserves applicable thereto) which would be
treated as intangibles under generally accepted United
States accounting principles, including, without limitation,
such items as good will, trademarks, trade names, patents
and licenses, franchises and operating rights), less, from
time to time, the aggregate amount of (a) Borrower's
accounts receivable for any month that have not been
collected by Borrower as of the date the Borrowing Base
Report is required to be provided to Lender in the
immediately following month, and (b) any of Borrower's
accounts receivable that Lender deems, in its sole
discretion, to be uncollectible.
(b) All terms defined in this Agreement shall have the
defined meanings when used in any Note, certificate, report, or
other document made or delivered pursuant to this Agreement,
unless specifically required otherwise. All accounting terms not
specifically defined herein shall be construed in accordance with
generally accepted accounting principles.
(c) Terms in the singular shall include the plural and
those in the plural shall include the singular unless the context
shall otherwise require.
1.3 Credit Facility. The Lender, during the period from
the date of this Agreement until the Maturity Date, subject to
the terms and conditions of this Agreement, and subject to the
condition that at the time of each borrowing and/or Credit
issuance hereunder no Default in respect of the provisions of
Section 5.1(h) or (i), nor Event of Default, has occurred and is
then continuing to occur and that the representations and
warranties given by the Borrower in Section 2 as of the date of
this Agreement shall remain true and correct in all respects:
(a) agrees to make loans to Borrower pursuant to
a Revolving Line of Credit up to but not in excess of
an aggregate principal amount outstanding at any time
of $35,000,000.00, provided the aggregate amount
borrowed, when combined with the amount of outstanding
Credits, shall not exceed the lesser of the Borrowing
Base and $35,000,000.00, upon receipt from Borrower of
written applications for loans hereunder in the form
attached as Exhibit "1.3.1", prior to 11:00 a.m. on or
before (1) the Business Day that is two (2) days prior
to any advance subject to the LIBOR Rate, and (2) the
same Business Day for advances subject to the Base Rate
or the Federal Funds Rate. Each advance shall be in an
amount of not less than $100,000.
(b) (1) agrees to open one or more Credits
during the Credit Facility Commitment Period for
Borrower's account for periods not to exceed one
hundred eighty (180) days. Borrower shall submit to
Lender a Letter of Credit Request with respect to each
Credit to be opened by Lender, in accordance with the
terms hereof and the other letter of credit agreements
in effect, if any. Lender at its option may accept
telecopy requests for the issuance of Credits, provided
that such acceptance shall not constitute a waiver of
Lender's right to require delivery of a written Letter
of Credit Request in connection with the issuance of a
Credit. If Lender receives a request for a Credit
issuance under the Credit Facility satisfying the
conditions thereof prior to 10:00 a.m. Houston, Texas
time on a Business Day, Lender shall use its best
efforts to issue such Credit prior to 5:00 p.m.
Houston, Texas time on such day, otherwise Lender shall
use its best efforts to issue such Credit before 5:00
p.m. on the following Business Day (provided that the
other conditions of the Credit Facility have been
satisfied). No Credit shall be issued after the
expiration of the Credit Facility Commitment Period.
Borrower will be required to pay to Lender a Credit Fee
for the issuance of each credit. Each Credit shall be
on substantially the terms as Borrower may request and
such Letter of Credit Request must be in the form and
substance satisfactory to Lender. The sum of the
outstanding face amount of all Credits when added to
the sum of the outstanding Loans shall not exceed the
lesser of the Borrowing Base or $35,000,000.00.
(2) Additional Agreements Regarding Credits:
(i) Prior to the earlier to occur of
the occurrence of a Default under the provisions
of Section 5.1(h) or (i), an Event of Default or
the end of the Credit Facility Commitment Period,
if Borrower does not provide Lender with funds, in
the amount and on the date necessary to settle
Lender's obligations under any draft drawn or
demand made under a Credit, Lender shall make, and
Borrower shall accept, a Loan under the Credit
Facility in the amount necessary to settle
Lender's obligations under any draft or demand
made under such Credit to the extent Borrower does
not otherwise provide such funds, such Loan to be
made as of the date of such settlement of the
Credit. Borrower's obligations and indebtedness
to Lender pursuant to such Loans shall be
evidenced by the Note, this Agreement, the Letter
of Credit Requests and the other letter of credit
agreements relating to the subject Credit.
Anything herein to the contrary notwithstanding,
in no event shall any Loan be made under the
Credit Facility which, together with the
outstanding principal amount thereof, would exceed
the positive difference, if any, between (1) the
lesser of the Borrowing Base or $35,000,000.00
less (2) the aggregate principal amount of the
outstanding Credits. Borrower shall pay any such
excess to Lender on demand.
(ii) At the earlier to occur of a
Default under the provisions of Section 5.1(h) or
(i), an Event of Default or the end of the Credit
Facility Commitment Period, and if a Credit is
outstanding, Borrower agrees (1) to deposit in a
trust account with the Lender an amount equal to
the aggregate undrawn amount of all Credits, and
(2) to reimburse Lender by paying to Lender in
immediately available funds (which amounts Lender
may draw from such trust account) at Lender's
principal office in Houston, Texas, upon its
demand, the amount necessary to settle Lender's
obligations under any draft drawn or demand made
under a Credit issued by Lender which has not been
paid by the proceeds of Loans made pursuant to the
immediately preceding paragraph hereof.
Borrower's obligations and indebtedness to Lender
pursuant to such draws or demands made on any
Credit shall be evidenced by this Agreement, the
Letter of Credit Requests and the other letter of
credit agreements relating to the subject Credit.
After the respective expiry dates of the Credits
and after the Obligations are paid in full, Lender
shall return the unused portion of such cash
collateral described above to Borrower, together
with accrued interest thereon.
(iii) Borrower agrees that (1) Lender
shall not be responsible or liable for, and
Borrower's obligation to reimburse Lender for any
payment made by Lender under such Credit shall not
be affected by (x) the validity, enforceability or
genuineness of any note or other document (or such
endorsement) if such is proven to be invalid,
unenforceable, fraudulent or forged, or (y) any
dispute between Borrower and the beneficiary under
such Credit, and (2) any action taken or omitted
to be taken by Lender in connection with such
Credit, if taken in good faith and with reasonable
care, shall be binding upon Borrower and shall not
create any liability for Lender to Borrower.
(iv) In case of any conflict between the
terms of any Letter of Credit Request or other
letter of credit agreement and the terms of this
Agreement, the terms of this Agreement shall
control. Such additional provisions of each
Letter of Credit Request and other letter of
credit agreement shall be cumulative and in
addition to the terms of this Agreement.
(v) Neither Lender nor any of Lender's
correspondents shall be responsible for: (1) the
failure of any draft to bear any reference or
adequate reference to any Credit, or the failure
of any Person to surrender or to take up any
Credit or the failure of any Person to note the
amount of any instrument on any Credit, (2)
errors, omissions, interruptions, or delays in
transmission or delivery of any messages, in
person, by mail, cable, telegraph, wireless or
otherwise whether or not they may be in cipher,
(3) any use which may be made of any Credit or any
acts or omissions of beneficiary thereof in
connection therewith, or (4) the validity,
sufficiency, or genuineness of documents, or any
endorsement(s) thereon, even if such document
should in fact prove to be in any and all respects
invalid, insufficient, fraudulent or forged;
provided that Lender shall be responsible to
examine such documents with care so as to
ascertain that on their face they appear to comply
with the terms of the relevant Credit. Lender
shall not be responsible for any act, error,
neglect, default, omission, insolvency, or failure
in business of any of its correspondents
(including without limitation negligent acts and
omissions, but expressly excluding gross
negligence and willful misconduct), and the
happening of any one or more of the contingencies
referred to in this sentence or the preceding
sentence shall not affect, impair, or prevent the
vesting of any of Lender's rights or powers under
the Note, this Agreement and the Security
Instruments. Lender and/or any of its
correspondents may receive, accept, or pay as
complying with the terms of any Credit, any drafts
or other documents, otherwise in order, which may
be signed by, or issued to, the administrator or
executor of, or the trustee in bankruptcy of, or
the receiver for any of the property of, the party
in whose name any Credit provides that any drafts
or any other documents should be drawn or issued.
It is hereby further agreed that any action,
inaction, or omission taken or suffered by Lender,
or by any of its correspondents, under or in
connection with any Credit or any drafts or
documents referenced therein, if in good faith and
in conformity with such foreign or domestic laws
and customs or other regulations as Lender or any
of Lender's correspondents may deem to be
applicable thereto, shall be binding upon Borrower
and shall not place Lender or any of Lender's
correspondents under any resulting liability to
Borrower.
(c) The Borrower's obligation to repay the Credit
Facility shall be evidenced by a promissory note of the
Borrower in substantially the form attached as Exhibit
"1.3.2" hereto, payable to the order of Lender. The
Revolving Note shall bear interest at a rate per annum
equal to, at the Borrower's option, (i) the Base Rate
minus one percent (1%)per annum, (ii) the Federal Funds
Rate plus one and one-half percent per annum (1.5%), or
(iii) the LIBOR Rate plus one and one-quarter percent
per annum (1.25%), not to exceed the maximum non-
usurious interest rate permitted by applicable law with
the balance of principal plus accrued and unpaid
interest due and payable on or before the Maturity
Date.
(d) Interest shall be paid by the Borrower on
each Interest Payment Date.
(e) At the end of any Interest Period, the
Borrower may, by irrevocable written notice to the
Lender received at least two (2) Business Days prior to
the end of such Interest Period, elect to apply any one
of the interest rates plus applicable margins set forth
in Section 1.3(c) above to each outstanding advance
under the Loan. If the Borrower elects to apply the
LIBOR Rate, the Borrower shall notify the Lenders
two(2) Business Days prior to the end of the applicable
Interest Period as to the length selected by the
Borrower for the next Interest Period. If no such
notice is given, interest on the Loan shall accrue at
the Base Rate minus one percent (1%) per annum.
(f) Borrower may, at any time, upon giving
written notice to Lender, reduce the maximum amount of
Loans and/or Credits Borrower has the right to request
hereunder. Effective upon Lender's receipt of such
notice and as of such date, the maximum amount of Loans
and/or Credits Borrower has a right to obtain shall be
so reduced and Borrower's obligation to pay the
Commitment Fee shall be calculated based upon the
reduced amount after the effective date of such notice.
1.4 Repayment Schedule. Borrower hereby agrees to pay, and
authorizes and directs Lender to collect:
(a) Credit Fees (at the time of the issuance of a
Credit), the Facility Fee upon execution of this Agreement
and the first anniversary hereof, and the Commitment Fee (on
the first day of each January, April, July, and October,
commencing October 1, 1998, and on the Maturity Date), both
payable by Borrower by debit to Borrower's Operating Account
No. 1820768198 (the "Operating Account") at Lender;
(b) the amount of any drawing under a Credit not
otherwise reimbursed to Lender by advance under the Note on
the earlier of the LOC Expiration Date by Lender by debit to
the Operating Account or any other of Borrower's accounts at
Lender; and
(c) advances under the Note (on the maturity of the
Note), and accrued interest on the advances under the Note
(monthly on the first day of each month and on maturity of
the Note); provided, that all advances under the Note to
reimburse Lender for draws under any Credit shall be due and
payable in full on the maturity of the Note; provided
further, that all outstanding principal, together with
accrued and unpaid interest, shall be due and payable in
full on or before the Maturity Date, such amounts to be paid
by debit to the Operating Account or any other of Borrower's
accounts at Lender.
1.5 Prepayment/Mandatory Prepayment. The Borrower shall
have the right to prepay without premium at any time any amount
owing on the Revolving Note.
1.6 Authorized Officer. Lender is authorized to rely on
the instructions of an Authorized Officer as to all matters
related to this Agreement and the transactions contemplated
hereby.
Section 2. Representations and Warranties
The Borrower represents and warrants to the Lender that:
2.1 Existence. The Borrower is a limited partnership duly
formed, legally existing and in good standing under the laws of
the State of Delaware and duly qualified as a foreign limited
partnership in all jurisdictions wherein the property owned or
the business transacted by it makes such qualification necessary,
except where the failure to be so qualified would not have a
material adverse effect on Borrower's basic line of business in
such jurisdiction. The General Partner is a limited liability
company duly formed, legally existing and in good standing under
the laws of the State of Delaware and duly qualified as a foreign
limited liability company in all jurisdictions wherein the
property owned or the business transacted by it makes such
qualification necessary, except where the failure to be so
qualified would not have a material adverse effect on the General
Partner's basic line of business in such jurisdiction.
2.2 Authority. The Borrower is duly authorized and
empowered to create and issue the Note, and to execute and
deliver this Agreement. The Borrower is duly authorized and
empowered to execute and deliver the Security Instruments to
which it is a party, and all other instruments referred to or
mentioned herein to which Borrower is a party, and all
partnership action requisite for the due creation, issuance and
delivery of the Note and the due execution and delivery of this
Agreement and the Security Instruments has been duly and
effectively taken. This Agreement, the Note, and the Security
Instruments to which the Borrower is a party when executed and
delivered will be valid and binding obligations of the Borrower
enforceable in accordance with their terms (subject to any
applicable bankruptcy, insolvency or other laws generally
affecting the enforcement of creditors' rights). This Agreement,
the Note, and the Security Instruments do not violate any
provisions of the Borrower's Certificate of Limited Partnership
or Limited Partnership Agreement, or any contract, agreement, law
or regulation to which the Borrower is subject, and the same do
not require the consent or approval of any regulatory authority
or governmental body of the United States or any state.
2.3 Financial Condition. The Prior Financial Statements
which have been delivered to Lender fairly present the financial
position of the Borrower and the General Partner at such date.
2.4 Investments, Loans, Advances and Guarantees. As of the
date hereof the Borrower has not made Investments in, loans or
advances to or guarantees of the obligations of any Person which
exceed, in the aggregate, $500,000.
2.5 Liabilities and Litigation. Except as set forth on
Exhibit 2.5, as of the date hereof the Borrower has no
liabilities and no litigation, legal or administrative
proceedings, investigation or other action is pending or to the
Borrower's knowledge threatened against or affecting the Borrower
which is not fully covered by insurance subject to deductible not
greater than $50,000.00 or which may materially and adversely
affect the business or the assets of the Borrower or the
Borrower's ability to carry on their business as now conducted,
except for liabilities incurred in the ordinary course of
business. No unusual or unduly burdensome restriction, restraint
or hazard exists by contract, law, governmental regulation or
otherwise relative to the business or the assets of the Borrower.
2.6 Titles and Encumbrances. The Borrower has good title
to the Collateral, free and clear of all mortgages, liens and
encumbrances, except those referred to in Section 4.5 hereof.
The Borrower has good title to its other properties and assets,
free and clear of all mortgages, liens and encumbrances, except
those referred to in Section 4.5 hereof, and except where the
failure to hold such title would not have a material adverse
effect on the Borrower's business, financial condition or ability
to perform its obligations hereunder, under the Note or under the
Security Documents.
2.7 No Default. No Default, or Event of Default exists
under this Agreement and the Borrower is not in default in any
respect under any contract, agreement or instrument to which
Borrower is a party or by which Borrower or any of its property
may be bound, and Borrower is not aware of any default under any
contract, agreement or instrument, which Default, Event of
Default, default or breach could have an adverse effect on the
ability of the Borrower to perform its obligations under the
Note, this Agreement, or any of the Security Instruments to which
it is a party or on its ability to conduct its business as now
conducted.
2.8 Subsidiaries. As of the date hereof, set forth in
Exhibit "2.8" hereof is a complete and accurate list of all the
Subsidiaries of the Borrower, showing as of the date hereof, (i)
the nature of each Subsidiary's business, (ii) the jurisdiction
of each Subsidiary's formation, (iii) the number of partnership
interests outstanding, and (iv) the percentage of the outstanding
partnership interests owned (directly or indirectly) by the
Borrower. Each Subsidiary is a limited partnership duly
organized, validly existing and in good standing under the laws
of the jurisdiction pursuant to which it was formed, and duly
qualified as a foreign limited partnership in all jurisdictions
wherein the property owned or the business transacted by it makes
such qualification necessary.
2.9 Taxes. As of the date hereof the Borrower has filed
all tax returns required to be filed (or extensions have been
granted) before delinquency, and all Federal and state income
taxes that are due and payable by Borrower has been paid or
otherwise satisfied before delinquency, except where the failure
to so file or pay would not have an adverse effect on the ability
of the Borrower to perform its obligations under the Note, this
Agreement, or any of the Security Instruments to which it is a
party, or would not have a material adverse effect on its ability
to conduct its business as now conducted.
2.10 Compliance. As of the date hereof the Borrower has
complied with all valid and applicable statutes, rules and
regulations of each jurisdiction to which each may be subject,
except where the failure to so comply would not have an adverse
effect on the ability of the Borrower to perform its obligations
under the Note, this Agreement, or any of the Security
Instruments to which it is a party, or would not have a material
adverse effect on its ability to conduct its business as now
conducted.
2.11 Pension Reform Act. In the event the ERISA may be
applicable to any Defined Benefit Pension Plan of the Borrower
(or the General Partner), no fact exists, including but not
limited to, any Reportable Event or Prohibited Transaction which
might constitute grounds for the termination of any such Defined
Benefit Pension Plan by the Pension Benefit Guaranty Corporation
or for the appointment by the appropriate United States district
court of a trustee to administer any such Defined Benefit Pension
Plan.
2.12 Environmental Laws. To Borrower's knowledge, and
except as would not have a material adverse effect on the
operations or financial condition of Borrower or on Borrower's
ability to perform and pay its obligations hereunder and under
the Security Instruments:
(a) Borrower and all of its properties, assets, and
operations are in compliance with all Environmental Laws (as
hereinafter defined).
(b) Borrower is not aware of, nor has Borrower
received notice of, any past, present, or future conditions,
events, activities, practices, or incidents which may
interfere with or prevent the compliance or continued
compliance of Borrower with the Environmental Laws.
(c) Borrower has not (i) permitted violation of any
Environmental Laws with respect to any Hazardous Substances
(as hereinafter defined), wastes or materials which exist
on, about, or within or are used, generated, stored,
transported, disposed of on, or released or (ii) permitted
actions which would cause the incurrence of response costs
or costs of corrective action on the part of Borrower as
defined by the Environmental Laws.
(d) The use which Borrower makes and intends to make
of its properties and assets will not result in violation of
any Environmental Laws in the use, generation, storage,
transportation, accumulation, disposal, or release of any
Hazardous Substance, wastes or materials on, in, or from any
such properties or assets.
(e) There is no action, suit, proceeding,
investigation, or inquiry before any court, administrative
agency or other governmental authority pending or, to the
knowledge of Borrower, threatened against Borrower relating
in any way to any Environmental Law.
(f) Borrower (i) has no liability for remedial or
corrective action or response costs under any Environmental
Law, (ii) has not received any request for information by
any governmental authority with respect to the condition,
use, or operation of any of its properties or assets, and
(iii) has not received any notice from any governmental
authority or other person with respect to any violation of
or liability under any Environmental Law.
(g) Borrower has obtained and complied with, and is in
compliance with, all terms and conditions of all permits,
licenses and other authorizations that may be required
pursuant to Environmental Laws for the occupation of the
properties of the Borrower and the operation of the business
of the Borrower.
"Environmental Laws" means any and all federal, state and
local environmental laws, regulations, and ordinances applicable
to Borrower or Borrower's operations, including without
limitation the Resource Conservation and Recovery Act, as
amended, the Comprehensive Environmental Response, Compensation
and Liability Act, as amended, the Superfund Amendment and
Reauthorization Act of 1986, as amended, the Federal Water
Pollution Control Act and the Oil Pollution Act. "Hazardous
Substances" shall mean any item defined as hazardous under the
Environmental Laws.
2.13 Margin Securities. Except for acquisitions made in the
ordinary course of Borrower's business, the Borrower does not own
any "margin security" or "margin stock" as defined in Regulations
T, U or X of the Board of Governors of the Federal Reserve System
(12 C.F.R. Parts 207, 221 and 224, respectively).
2.14 Patents, etc. The Borrower has all patents, patent
rights or licenses, trademarks, trademark rights, trade names,
trade name rights, copyrights, permits and franchises which are
required in order for it to conduct its business as now conducted
without known conflict with the rights of others. The Borrower
is not aware of any fact or condition which might cause any of
such foregoing not to be renewed in due course.
2.15 Full Disclosure. Neither this Agreement nor any
certificate or written statement or any other factual data
furnished by the Borrower or any of the officers of its General
Partner in writing in connection with the negotiation of this
Agreement or the transactions contemplated hereby contains any
statement of a material fact which is untrue in any respect or
omits a material fact known to the Borrower to be necessary to
make the statements contained herein or therein, taken as a
whole, not misleading in any material respect. There is no fact
known to the Borrower which the Borrower has failed to disclose
to Lender in writing which could adversely affect the business,
operations, assets, prospects or condition, financial or
otherwise, of the Borrower.
2.16 Credit Agreements. Borrower has no agreements in
effect providing for or relating to extensions of credit in
respect of which Borrower is or may become directly or
contingently obligated, and has not signed any security agreement
that is currently outstanding except as disclosed in writing to
Lender contemporaneously with the execution and delivery of this
Agreement.
2.17 Investment Company Act. Borrower is not an "investment
company" or a company "controlled" by an "investment company,"
within the meaning of the Investment Company Act of 1940, as
amended.
2.18 Public Utility Holding Company Act. Borrower is not a
"holding company" or a "subsidiary company" of a "holding
company," or an "affiliate" of a "holding company" or of a
"subsidiary company" within the meaning of the Public Utility
Holding Company Act of 1935, as amended.
Section 3. Affirmative Covenants
Until the Indebtedness of the Borrower to the Lender has
been paid or while the Lender has a commitment to the Borrower
hereunder:
3.1 Reporting Requirements. The Borrower will promptly
furnish to the Lender from time to time the following information
regarding the business affairs and financial condition of the
Borrower and the General Partner.
(a) as soon as possible and in any event within five
(5) Business Days after obtaining knowledge of the
occurrence of each Default or Event of Default, the
statement of an Authorized Officer setting forth details of
such Default or Event of Default and the action which the
Borrower proposes to take with respect thereto;
(b) as soon as available and in any event within
ninety (90) days after the end of each fiscal year, annual
audited financial statements of the Borrower, including the
balance sheet as at the end of such year and the statements
of income, partners' equity and cash flow of the Borrower
for such year, together with comparative figures for the
preceding fiscal year, if applicable, the statements with
accompanying unqualified opinion of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & Co.
or other independent certified public accountants acceptable
to the Lender;
(c) as soon as available, and in any event, within
forty-five (45) days after the last day of each month the
unaudited financial statements of the Borrower, including
the balance sheet, as of the end of each such month, and the
statements of income, partners' equity and cash flow of the
Borrower for such month, certified by an Authorized Officer
of the Borrower;
(d) as soon as available, and in any event, within
twenty-five (25) days following the last day of each month
(the "Reporting Date"), the Borrowing Base Report as of the
Reporting Date, together with the Required Report as of the
Reporting Date, in the form and substance satisfactory to
Lender;
(e) as soon as available, and in any event within
forty-five (45) days following the end of each fiscal
quarter, and within ninety (90) days after the end of each
fiscal year, the certificate described in Section 3.8 of
this Agreement;
(f) Upon Lender's reasonable request:
(1) a complete customer list for Borrower with
addresses for each customer;
(2) a list of current insurance policies,
coverages, and expiration dates for Borrower; and
(3) a copy of the management letter delivered to
the Borrower by the independent public accountants.
(g) as soon as available and in any event within
ninety(90) days after the end of each fiscal year, the
annual financial statements of the General Partner,
including the balance sheets of the General Partner as at
the end of such year and statements of income and
consolidated statements of members' capital and cash flow of
the General Partner for such year, together with comparative
figures for the preceding fiscal year, certified by an
Authorized Officer of the General Partner;
(h) as soon as available, and in any event, within
forty-five (45) days after the last day of each fiscal
quarter not the end of a fiscal year, the unaudited
financial statements of the General Partner, including the
balance sheet, as of the end of each such quarter, and the
statements of income, members' capital and cash flow of the
General Partner for such quarter, certified by an Authorized
Officer of the General Partner;
(i) for any month in which the amount of Eligible
Accounts of Borrower from persons that are not citizens of
or organized under the laws of the United States or a
political subdivision thereof or are owed by any person
incorporated outside or having its principal place of
business or substantially all of its assets located outside
of the United States exceeds ten percent (10%) of Borrower's
total Eligible Accounts, notice to Lender setting forth the
name and address of each account debtor and the outstanding
amount of each such account on the applicable Reporting
Date; and
(j) such other information the Lender may reasonably
request from time to time at reasonable intervals under the
then applicable circumstances.
The Financial Statements and other reports shall fairly
present the financial position and results of operations of the
Borrower and, if applicable, the General Partner in accordance
with generally accepted accounting principles, consistently
applied.
The Borrower grants to the Lender the right to send the
Lender's own representatives and/or employees during normal
business hours to inspect, copy, and/or audit the books of the
Borrower; provided, that the reasonable costs of such inspections
or audits shall be paid by Borrower only once per calendar year.
3.2 Taxes and Other Liens. The Borrower will pay all
taxes, assessments, governmental charges, claims for labor,
supplies, rent and other obligations which if unpaid, might
become a lien against the property of the Borrower provided the
Borrower shall have the right to contest the foregoing by
appropriate proceedings diligently pursued.
3.3 Maintenance. Borrower will maintain its current basic
operations without change in line of business, its existence,
remain in or become a limited partnership in good standing in
each jurisdiction in which it is required to be qualified and in
which any account debtor owing from time to time $1,000,000 or
more to Borrower has its principal place of business, maintain
all patents, trademarks, franchises and licenses necessary in its
business, and comply in all respects with all valid and
applicable statutes, rules and regulations including without
limitation the Fair Labor Standard Act and all Environmental
Laws, and it will maintain or cause to be maintained its
properties in good and workable condition at all times. The
Borrower will maintain a minimum ownership in each Subsidiary at
the same level as at the date of this Agreement as indicated on
Exhibit "2.8".
3.4 Further Assurances. Borrower will promptly, at
Lender's reasonable request cure any defects in the execution and
delivery of this Agreement, the Note, the Security Instruments
and any other instrument or instruments referred to or mentioned
herein. Borrower will promptly, and in any event within ten (10)
days of Lender's reasonable request, execute and deliver to
Lender upon request all security agreements, financing
statements, certificates of title, deeds of trust, mortgages or
any other instrument required to accomplish covenants and
agreements of Borrower under this Agreement and the Security
Instruments.
3.5 Performance of Obligations. Borrower will pay the Note
according to the reading, tenor and effect thereof and will do
and perform every act and discharge all of the obligations
provided to be performed and discharged by it under this
Agreement, the Note, the Security Instruments and any and all of
the instruments referred to or mentioned herein to which it is a
party at the time or times and in the manner therein and herein
specified subject to the other provisions hereof. The Borrower
will perform all obligations to be performed by it, pursuant to
the terms of each indenture, agreement, contract, and other
instrument by which the Borrower or its properties are bound.
3.6 Reimbursement of Costs and Expenses. The Borrower will
pay the reasonable fees and expenses of counsel for the Lender in
connection with this Agreement and all transactions pursuant
hereto. The Borrower will, upon request by Lender, within ten
(10) days from said request, reimburse the Lender for all amounts
reasonably expended, advanced or incurred by the Lender to
satisfy any obligation of the Borrower under this Agreement, or
to protect the properties, assets or business of the Borrower,
including without limitation wages paid to insure compliance with
the Fair Labor Standards Act, amounts incurred to collect the
Note or to enforce the rights of the Lender under this Agreement
or any other instrument referred to or mentioned herein or
executed or to be executed in connection herewith, which amounts
will include all court costs, attorneys' fees, fees of auditors
and accountants, and investigation expenses reasonably incurred
by the Lender in connection with any such matters, and any and
all amounts expended by Lender after the occurrence of a Default
or an Event of Default and during the continuation thereof as a
result of the provisions of all Environmental Laws, together with
interest at the greater of four percent (4%) over the Base Rate
per annum or 10% per annum, not to exceed the maximum non-
usurious interest rate permitted by applicable law, on each such
amount from the date that the same is due and payable to the
Lender until the date it is repaid to the Lender. All amounts
advanced in connection herewith shall be secured by the
Collateral more fully described in Section 3.10. Except for
expenses advanced by Lender after (i) occurrence of an Event of
Default, (ii) to maintain insurance or (iii) to protect and
preserve the Collateral, Lender shall provide Borrower not less
than five (5) days prior notice of any advance hereunder.
3.7 Insurance. The Borrower will maintain with financially
sound and reputable insurers, insurance with respect to its
properties and business against such liabilities, casualties,
risks and contingencies and in such types and amounts as is
customary in the case of corporations engaged in the same or
similar businesses and similarly situated. Upon the reasonable
written request of Lender, the Borrower will furnish Lender a
summary of the insurance coverage of the Borrower showing
compliance herewith and in form and substance reasonably
satisfactory to Lender and if requested will furnish Lender
copies of the applicable policies. Borrower will cause a
certificate to be issued by its underwriters to Lender certifying
that such underwriters shall endeavor to provide at least thirty
(30) days prior notice to Lender of cancellation of any insurance
policy issued to Borrower; provided, however, that the failure of
underwriters to provide such notice shall not constitute an Event
of Default hereunder. As soon as possible, and in any event,
within ten (10) days, Borrower will notify Lender of the
cancellation of any insurance coverage, whether or not Lender is
a loss payee under the affected policy, unless such insurance is
replaced with insurance of similar coverage in compliance with
this Section 3.7.
3.8 Certificate of Compliance. Within forty-five (45) days
after the end of each quarter, and within ninety (90) days after
the end of each fiscal year there shall be furnished to the
Lender a certificate in the form attached as Exhibit "3.8" signed
by an Authorized Officer of the General Partner (1) stating that
a review of the activities of the Borrower during such quarter or
as of the end of such quarter has been made under his supervision
with a view to determining whether the Borrower has kept,
observed, performed and fulfilled all of its obligations under
this Agreement, the Note, and Security Instruments, (2)
containing calculations to verify compliance and/or non-
compliance with financial covenants hereunder, and (3) stating
that to the best knowledge and belief of such officer of
Borrower, the Borrower has kept, observed, performed and
fulfilled each and every covenant and condition contained in the
Note, this Agreement and the Security Instruments and to the best
knowledge and belief of such officer of Borrower is not at the
time in default in the observance, performance or fulfillment of
any such covenants and conditions or if the Borrower shall be in
default, specifying any such default, the nature and status
thereof, and what action, if any, has been taken to remedy the
default or defaults.
3.9 Litigation. As soon as possible and in any event,
within ten (10) Business Days of a president or chief financial
officer of Borrower obtaining knowledge thereof, Borrower shall
give written notice to Lender of commencement of litigation
(other than litigation being defended by an insurance carrier
without reservation as to coverage claiming amounts within said
coverage) in which the Borrower is reasonably expected to have
liability in excess of $1,000,000 and of all proceedings before
any governmental or regulatory agency affecting Borrower in which
an adverse decision is reasonably expected to involve amounts in
excess of $1,000,000.
3.10 Security. The Indebtedness and Obligations of the
Borrower under this Agreement and the Security Instruments shall
be secured by the following:
(a) all Borrower's accounts, accounts receivable,
inventory and general intangibles, whether now owned or
hereafter acquired, and all products and proceeds thereof;
(b) any of the following issued by or held in the
possession of Lender: any deposit, deposit account, money
market account, cash management account, demand deposit
account, savings account, security, certificate of deposit,
cash, cash equivalent, or other sum at any time credited by
or due (including without limitation any funds on deposit)
from any depository or other person or entity to Borrower,
certificated and uncertificated securities, whether now
owned or hereinafter acquired, and all and any and all
proceeds and products thereof;
(c) all funds and securities held in the Operating
Account and in any trust account held with Lender; and
(d) all products and proceeds of (a) through (c)
above.
3.11 Borrowing Base. The aggregate indebtedness pursuant to
the Revolving Line of Credit and the amount of outstanding
Credits shall never exceed the Borrowing Base. In accordance
with Section 3.1(e), Borrower shall provide the Lender a
calculation of the Borrowing Base on the Borrowing Base Report.
In the event the aggregate unpaid principal balance of Loans plus
the outstanding Credits exceeds the Borrowing Base calculated as
described above, the Borrower will immediately, but in any event
no later than the close of business on the same Business Day,
reduce the indebtedness under the Revolving Line of Credit until
the amount owed is less than the amount permitted pursuant to the
Borrowing Base.
3.12 Payments from Account Debtors. Borrower agrees to
direct payments from its account debtors into the Operating
Account via wire transfer or such other manner approved in
writing by Lender.
3.13 Audits. At any time during the Credit Facility
Commitment Period, Lender shall have the right to cause a
designated employee or agent (the "Auditor") to be present on
Borrower's premises for the purpose of auditing the accounts
receivable, general intangibles and systems, books and records of
the Borrower and Borrower and the officers and employees of the
General Partner shall extend reasonable cooperation commensurate
with sound management of its business in permitting the Auditor
to gather and verify information about the accounts receivable
and general intangibles of the Borrower; provided, however, the
Auditor shall exercise no control over Borrower's business.
Borrower shall reimburse Lender immediately upon its demand
therefor for the reasonable costs and expenses incurred by Lender
in connection with the services of such Auditor; provided,
however, that Borrower shall be required to reimburse Lender only
once per calendar year or for any such audit during the
occurrence and continuation of an Event of Default.
Section 4. Negative Covenants
In the absence of a written consent from Lender (in the
manner hereinafter provided), so long as any part of the
Indebtedness shall remain unpaid or the Lender has a commitment
to the Borrower hereunder:
4.1 Guarantees and Debts. The Borrower will not guarantee
any contract or obligation or incur, create, permit to exist,
assume or guarantee or in any manner become or be liable in
respect of any Debt, except that the foregoing restrictions shall
not apply to:
(a) the Note, Credits, and other obligations or
liabilities pursuant to this Agreement or the Security
Instruments;
(b) indebtedness on open account in connection with
normal trade obligations in the ordinary course of business
and obligations incurred in connection with the purchase and
sale of crude oil in the ordinary course of business;
(c) lease obligations and Administrative Service Fees;
(d) liabilities of the Borrower for any unpaid taxes
not yet due or being diligently contested in good faith by
appropriate proceedings and subject to the creation of
appropriate reserves under generally accepted accounting
principles and upon stay of levy and execution thereon; and
(e) Obligations under the Loan Documents as those terms
are defined in the Master Credit Support Agreement.
4.2 [Intentionally Omitted].
4.3 Investments, Loans and Advances. The Borrower will not
make Investments in or loans or advances to any Person, except
(1) expense and salary advances made to employees of the Borrower
in the ordinary course of business not to exceed $500,000.00 in
the aggregate at any time, (2) amounts advanced under Borrower's
Restricted Unit Plan, (3) Permitted Investments, (4) securities
issued to Borrower as payment of trade debt to Borrower in the
ordinary course of Borrower's business, and (5) other investments
approved by Lender.
4.4 Mergers, etc. The Borrower will not (a) merge or
consolidate with any entity, (b) acquire all or substantially all
the assets of any other entity, except for acquisitions of assets
that (1) are in the furtherance of Borrower's basic line of
business and (2) do not result in the assumption by Borrower of
the liabilities of such entity, whether by contract or by
operation of law; provided, however, that the assets or stock of
any Subsidiary may be purchased or otherwise acquired by the
Borrower or any other Subsidiary, nor (c) create or participate
in any partnerships or joint ventures for or in which Borrower
may be obligated to pay all or any portion of the liabilities of
the partnership, joint venture, partners or joint venturers. The
Borrower will not liquidate or dissolve.
4.5 Encumbrances. The Borrower will not create, incur,
assume or permit to exist any mortgage, pledge, lien or
encumbrance on any of its properties or assets (now owned or
hereafter acquired), nor acquire or agree to acquire property or
assets under any conditional sale agreement or title retention
contract, except that the foregoing restrictions shall not apply
to:
(a) liens of vendors, carriers, warehousemen,
mechanics, laborers and materialmen arising by law in the
ordinary course of business for sums not yet due or which
are being diligently contested in good faith;
(b) liens for taxes not yet due or which are being
diligently contested in good faith by appropriate
proceedings;
(c) pledges or deposits in connection with or to
secure workmen's compensation, unemployment insurance,
pensions or other employee benefits;
(d) liens required by this Agreement or any of the
Security Instruments;
(e) statutory liens and easements or other servitudes
arising in the ordinary course of business and minor
irregularities of title which do not materially impair the
ownership or use of the property subject thereto for the
purposes for which such property is owned and held by the
Borrower or limit or restrict Lender's remedies hereunder;
(f) liens incurred in the ordinary course of business,
not on any of the collateral, to secure performance of
tenders, statutory obligations, leases and contracts (other
than for borrowed money) entered into in the ordinary course
of business or to secure obligations on appeal bonds;
(g) judgments in existence less than 30 days after the
entry thereof or with respect to which execution has been
properly stayed; and
(h) liens securing the Obligations under the Loan
Documents as those terms are defined in the Master Credit
Support Agreement.
As to the liens and encumbrances permitted pursuant to
paragraphs (a) and (b) above, Borrower's right to contest
diligently in good faith by appropriate proceedings is
conditioned upon the Borrower setting up appropriate reserves
under generally accepted accounting principles and upon stay of
levy and execution thereon.
4.6 Sale of Assets. The Borrower will not sell, transfer
or otherwise dispose of any of its assets except in the ordinary
course of business. The Borrower will not enter into any
arrangement directly or indirectly with any person, firm, or
corporation whereby the Borrower would sell or transfer any
property, whether now owned or hereafter acquired, and then or
thereafter lease as lessee such property or any part thereof or
any other property which the Borrower would use for substantially
the same purpose or purposes as the property sold or transferred.
4.7 Financial Covenants. The Borrower will not permit, for
Section 4.7(a) below at the end of any fiscal quarter, and for
all other subparts of this Section 4.7, at any time:
(a) its Current Ratio to be less than 1.0 to 1.0;
(b) its Interest Coverage Ratio to be less than 1.2 to
1.0; or
(c) its Tangible Net Worth to be less than
$65,000,000.
All terms not expressly defined in this Agreement shall
be defined in accordance with generally accepted
accounting principles. All determinations under this
Agreement shall be made in accordance with generally
accepted accounting principles consistently applied, on
a consolidated basis, except where expressly provided
to the contrary. All references to a preceding period
shall mean the period ending as of the end of the
month, quarter or fiscal year for which the applicable
report is delivered. All references to a period
immediately following shall mean the period beginning
on the first day of the month, quarter or fiscal year
following the end of the period for which the
applicable report is delivered.
4.8 Basic Line of Business. Borrower will not change its
basic line of business from the crude oil gathering, marketing
and transportation business.
4.9 Transactions with Affiliates. Borrower will not enter
into transactions with an Affiliate which is not on an arms-
length basis comparable to the terms which would apply to a
transaction with a bona-fide third party. The obligations of
Borrower for Administrative Service Fees shall not be subject to
this limitation.
4.10 Maximum Unhedged Exposure. The Borrower will not
permit its aggregate uncovered fixed price commitments to
purchase and sell crude oil to exceed $10,000,000 at any time.
"Uncovered, fixed price commitments" means commitments to make or
take delivery of crude oil at fixed prices which are not tied to
a market index to the extent such commitments are not covered by
back-to-back, hedge, swap agreements or other offsetting
positions.
Section 5. Events of Default and Remedies
5.1 Events of Default. Any of the following events which
shall occur and be continuing shall be considered an Event of
Default as that term is used herein:
(a) Borrower does not pay any installment of interest
on the Note or a payment of fees owed to Lender within three
(3) Business Days of the due date or does not pay when due
any installment of principal of the Note;
(b) Borrower does not pay at the scheduled maturity
(but after expiration of any grace period applicable to such
maturity) or when due whether by acceleration or otherwise
(subject to applicable grace periods) all or any part of any
Debt of the Borrower to any other person or entity, except
that no indebtedness on open account shall be considered
past due (i) if paid within sixty (60) days of date when due
or (ii) is disputed in good faith;
(c) The Borrower shall fail or refuse for a period of
fifteen (15) days to furnish to the Lender any information,
data, certificate, or other document required by this
Agreement;
(d) The Borrower does not comply with or fails in the
performance of any covenant contained in Section 3 of this
Agreement (other than delivery of information which shall be
governed by Section 5.1(c) hereof) or any of the Security
Instruments to be kept or performed by the Borrower;
(e) The Borrower does not comply with or fails in the
performance of any covenant contained in Section 4.7(a) or
4.7(b) of this Agreement to be kept or performed by the
Borrower and fails to cure such default within thirty (30)
days of the occurrence thereof;
(f) The Borrower does not comply with or fails in the
performance of any covenant contained in Section 4 of this
Agreement (other than Section 4.7(a) and 4.7(b)) to be kept
or performed by the Borrower;
(g) Any representation or warranty made by the
Borrower herein or in any of the Security Instruments proves
to have been untrue in any respect, or any representation,
statement (including financial statements), certificate or
data furnished or prepared and made available by the
Borrower to Lender hereunder proves to have been untrue in
any material respect, as of the date as of which the facts
therein set forth were stated or certified;
(h) The Borrower shall discontinue business, or shall
(i) make a general assignment for the benefit of creditors,
or (ii) apply for or consent to the appointment of a
receiver, a trustee or liquidator of itself or of all or a
substantial part of its assets, or (iii) be adjudicated a
bankrupt or insolvent, or (iv) file a voluntary petition in
bankruptcy or file a petition or answer seeking
reorganization or an arrangement with creditors or seeking
to take advantage of any other law (whether federal or
state) relating to relief of debtors, or admit (by answer,
by default or otherwise) the material allegations of a
petition filed against it in any bankruptcy, reorganization,
arrangement, insolvency or other proceedings (whether
federal or state) relating to relief of debtors, or (v)
suffer or permit to continue unstayed and in effect for
sixty (60) consecutive days any judgment, decree or order,
entered by a court of competent jurisdiction, which approves
a petition seeking reorganization of the Borrower or
appoints a receiver, trustee or liquidator of the Borrower
or of all or a substantial part of its assets, or (vi) take
or omit to take any action for the purpose or with the
result of effecting or permitting any of the foregoing;
(i) A material adverse change in the financial
condition of the Borrower or in the Borrower's ability to
perform its obligations hereunder shall occur; or
(j) Less than thirty (30) days shall exist until the
maturity of the Master Credit Support Agreement and such
agreement shall not have been extended, renewed or replaced
with a substantially similar facility prior to such thirty-
day period, or an Event of Default shall have occurred and
be continuing under the Master Credit Support Agreement (as
those terms are defined therein) or its replacement.
5.2 Remedies. Upon the happening of an Event of Default
specified in Section 5.1(g), immediately and without notice, and
upon the happening of any other Default or Event of Default
specified in Section 5.l, at the option of the Lender, without
notice to Borrower, Lender may declare any commitment hereunder
cancelled and cease advances thereunder, and/or upon the
happening of an Event of Default specified in Section 5.1(g),
immediately and without notice, and otherwise, at the option of
the Lender, upon notice to Borrower, Lender may declare the
entire aggregate principal amount of the Note then outstanding
and the interest accrued thereon immediately due and payable
without further notice and without presentment, demand, protest,
notice of protest or other notice of default or dishonor of any
kind, all of which are hereby expressly waived by the Borrower.
Section 6. Closing
The closing of the loans and the commencement of advances
pursuant to the Revolving Line of Credit contemplated hereby
shall be subject to the satisfaction of the following conditions:
6.1 Counsel to Lender. All legal matters incident to the
transactions herein contemplated shall be satisfactory to Gardere
▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇, L.L.P., counsel to the Lender.
6.2 Required Documents. The Lender shall have received
executed copies of the following closing documentation:
(a) This Agreement;
(b) The Revolving Note;
(c) The Security Agreement;
(d) The Notice of Final Agreement;
(e) The Intercreditor Agreement;
(f) An opinion of counsel satisfactory to Lender; and
(g) Such other documentation as Lender may require.
6.3 Other Conditions. Other conditions and/or
documentation have been completed and/or executed in a manner
satisfactory to Lender in its sole discretion.
6.4 Material Adverse Changes. No event has occurred that
could reasonably be expected to have a material adverse effect on
Borrower's business, operations or property, Borrower's ability
to perform its obligations under this Agreement, the Note or any
of the Security Instruments, or the validity or enforceability of
this Agreement, the Note or any of the Security Instruments or
Lender's remedies and rights hereunder or thereunder.
Section 7. Miscellaneous
7.1 Survival of Various Matters. All representations and
warranties of the Borrower herein shall be deemed remade as of
the date of any borrowing hereunder (except to the extent such
representation and warranty expressly provides it is as of the
date hereof), and all covenants and agreements herein not fully
performed before the date of this Agreement, shall survive such
date.
7.2 Notices. All notices, requests, demands and other
communications required or permitted hereunder shall be in
writing and may be personally served or sent by telex,
telecopier, mail or the express mail service of the United States
Postal Service, Federal Express or other equivalent overnight or
expedited delivery service and (i) if given by personal service,
telex (confirmed by telephone) or telecopier (confirmed by
telephone), it shall be deemed to have been given upon receipt,
(ii) if sent by telex or telecopier without telephone
confirmation, it shall be deemed to have been given twenty-four
(24) hours after being given, (iii) if sent by mail, it shall be
deemed to have been given upon receipt and (iv) if sent by
Federal Express, the Express Mail Service of the United States
Postal Service or other equivalent overnight or expedited
delivery service, it shall be deemed given twenty-four (24) hours
after delivery to such overnight or expedited delivery service,
delivery charges prepaid and properly addressed to Borrower or
Lender, as the case may be. For purposes hereof, the address of
Borrower and Lender shall be as follows:
Borrower:
Genesis Crude Oil, L.P.
▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇
Fax No. (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
Liddell, Sapp, Zively Hill & ▇▇▇▇▇▇, L.L.P.
▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
Lender:
Bank One, Texas, N.A.
▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
Gardere ▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇, L.L.P.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
Any party may, by proper written notice hereunder to the other
parties, change the address to which notices shall thereafter be
sent to it.
7.3 Successors and Assigns. All covenants and agreements
herein contained by or on behalf of the Borrower shall bind its
successors and assigns and shall inure to the benefit of the
Lender and its successors and assigns and all covenants and
agreements herein contained by or on behalf of the Lender shall
bind the Lender and its successors and assigns.
7.4 Renewals. All provisions of this Agreement relating to
the Note shall apply with equal force and effect to each and all
promissory notes hereafter executed which in whole or in part
represent a renewal, extension or rearrangement of any part of
the Indebtedness originally represented by the Note.
7.5 No Waiver. No course of dealing on the part of the
Lender or its officers or employees, or any failure or delay by
the Lender with respect to exercising any right, power or
privilege of the Lender under this Agreement, the Note, or
Security Instruments, shall operate as a waiver thereof. The
rights and remedies of the Lender under this Agreement, the Note,
and the Security Instruments shall be cumulative and the exercise
or partial exercise of any such right or remedy shall not
preclude the exercise of any other right or remedy.
7.6 Governing Law. This Agreement and the Note which may
be issued hereunder shall be deemed to be contracts made under
and shall be construed in accordance with and governed by the
laws of the State of Texas.
7.7 Non-Subordination. The Note shall never be in a
position subordinate to any indebtedness owing to any other
creditor of the Borrower, except to the extent that such other
creditor may hold a lien or liens on specific assets of the
Borrower pursuant to the terms hereof or with the knowledge and
written consent of the Lender.
7.8 Exhibits. The Exhibits attached to this Agreement are
incorporated herein for all purposes, and shall be considered a
part of this Agreement. Those exhibits are: Borrowing
Application - Exhibit "1.3.1"; Revolving Note - Exhibit "1.3.2";
Adverse Change - Exhibit "2.3"; Liabilities and Litigation -
Exhibit "2.5"; Subsidiaries - Exhibit "2.8"; Certificate of
Compliance - Exhibit "3.8"; and Borrowing Base Report - Exhibit
"3.11".
7.9 Payment on Non-Business Days. Whenever (i) any payment
to be made hereunder or under the Note or (ii) any certificate,
report or financial statement is due on a day that is a Saturday,
Sunday or banking holiday under the laws of the State of Texas,
such payment shall be made on the next succeeding day which is
not a Saturday, Sunday or banking holiday under the laws of the
State of Texas and such extension of time shall be included in
the computation of interest due with such payment.
7.10 Severability. In the event any one or more of the
provisions contained in this Agreement, the Note, or the Security
Instruments, or in any other instrument referred to herein or
executed in connection with or as security for the Note shall,
for any reason, be held to be invalid, illegal or unenforceable
in any respect, such invalidity, illegality or unenforceability
shall not affect any other provision of this Agreement, the Note,
or the Security Instruments, or any other instrument referred to
herein or executed in connection with or as security for the
Note. Furthermore, in lieu of such invalid, illegal or
unenforceable provision, there shall automatically be added a
provision as similar in terms to such invalid, illegal or
unenforceable provision as may be possible and as may be valid,
legal and enforceable.
7.11 Controlling Document. Should a direct conflict exist
between the specific terms of the Note, this Agreement or any of
the Security Instruments, the Note shall control over this
Agreement and the Security Instruments, and this Agreement shall
control over the Security Instruments and the exhibits attached
to this Agreement.
7.12 Savings Clause. Nothing contained in this Agreement or
in the Note or in any other agreement or undertaking relating
hereto shall be construed to obligate Borrower, under any
circumstances whatsoever, to pay interest in excess of the
maximum rate that Borrower may pay pursuant to Texas law and in
regard to which Borrower would be prohibited from successfully
raising the claim or defense of usury (the "Maximum Rate"). In
the event that any sums received from Borrower are at any time
under applicable law deemed or held to provide a rate of interest
in excess of the Maximum Rate, the effective rate of interest on
the loans hereunder shall be deemed reduced to and shall be the
Maximum Rate and the Borrower and all sureties, endorsers and
guarantors shall accept as their sole remedy under such
circumstances either the return of any sums of interest which may
have been collected and which produced a rate in excess of the
Maximum Rate, or the application of those sums as a credit
against the unpaid principal amount of the loan, whichever remedy
may be elected by Lender. In addition, in the event that the
Note is prepaid or the maturity of the Note is accelerated by
reason of election by Lender hereunder, then all unearned
interest shall either be cancelled or, if theretofore paid, shall
either be returned to Borrower or credited on the unpaid
principal amount due under the Note, whichever action may be
elected by Lender.
7.13 Investment. Lender represents that it is the present
intention of Lender to acquire the Note for its own account for
the purpose of investment and not with a view to the distribution
or sale thereof, subject, nevertheless, to the necessity that
Lender remain in control at all times of the disposition of
property held by it for its own account; it being understood that
the foregoing representation shall not affect the character of
the loans pursuant to this Agreement as commercial lending
transactions, and that Lender may grant a participation interest
in the Note in the ordinary course of business.
7.14 Set Off. Upon the occurrence and during the
continuance of any Default or Event of Default, the Lender is
hereby authorized at any time and from time to time, without
notice to the Borrower (any such notice being expressly waived by
the Borrower), to set off and apply any and all deposits (general
or special, time or demand, provisional or final) at any time
held and other indebtedness at any time owing by the Lender to or
for the credit or the account of the Borrower against any and all
of the Indebtedness, irrespective of whether or not the Lender
shall have made any demand under this Agreement and although such
obligations may be unmatured. The Lender agrees promptly to
notify the Borrower after any such set off and application made
by the Lender, provided that the failure to give such notice
shall not affect the validity of such set off and application.
The rights of the Lender under this Section are in addition to
other rights and remedies (including, without limitation, other
rights of set off) which the Lender may have.
7.15 INDEMNIFICATION. BORROWER AGREES TO INDEMNIFY AND HOLD
LENDER AND ITS OFFICERS, EMPLOYEES, DIRECTORS AND AGENTS HARMLESS
AGAINST ALL THIRD PARTY CLAIMS, DAMAGES, LIABILITIES AND EXPENSES
WHICH MAY BE ASSERTED AGAINST LENDER IN CONNECTION WITH OR
ARISING OUT OF ANY THIRD PARTY INVESTIGATION, LITIGATION OR
PROCEEDING RELATED TO THIS AGREEMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY OTHER THAN CLAIMS ARISING FROM LENDER'S BAD
FAITH, GROSS NEGLIGENCE OR WILFUL MISCONDUCT.
7.16 Change of Ownership or Control. If at any time while
any Note shall be outstanding or the Lender has a commitment
hereunder the General Partner shall cease to be the operating
general partner of the Borrower; a "Change of Ownership or
Control" shall be deemed to have occurred. The Borrower shall
promptly, but in any event within ten (10) days give written
notice to Lender upon obtaining knowledge of an event which is or
would constitute the occurrence of a Change of Ownership or
Control. Lender shall, upon the happening of a Change of
Ownership or Control, have the privilege of declaring the Note to
be due and payable on a date not earlier than ten (10) days from
the date of the exercise of said privilege. The Note then
outstanding shall thereupon become due and payable on the date
specified in the notice sent to the Borrower by Lender including
the principal amount thereof plus accrued interest thereon to the
accelerated maturity date and any amounts owed by Borrower to
Lender pursuant to this Agreement or the Security Instruments.
IN WITNESS WHEREOF, the parties hereto have caused this
instrument to be duly executed in multiple counterparts, each of
which is an original instrument for all purposes, all as of the
day and year first above written.
THE WRITTEN LOAN AGREEMENT REPRESENTS THE FINAL AGREEMENTS
BETWEEN THE BORROWER AND THE LENDER AND MAY NOT BE CONTRADICTED
BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL
AGREEMENTS OF THE BORROWER AND THE LENDER. THERE ARE NO
UNWRITTEN ORAL AGREEMENTS BETWEEN THE LENDER AND THE BORROWER.
GENESIS CRUDE OIL, L.P.
By: Genesis Energy, L.L.C.,
General Partner
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇
-------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇
Title: Chief Financial Officer
BANK ONE, TEXAS, N.A.
By: /s/ Damien Mieburger
-------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: Senior Vice President
