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Title: |
Letter of Credit Agreement |
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Entities: |
Amerada Hess Corp.; Energy Partners, Ltd.; Enron Corp.; Lehman Brothers Inc.; Bank of New York; Bingham McCutchen; Eott Energy Operating Limited Partnership; Eott Energy Canada Limited Partnership; Eott Energy Liquids, L.P.; Eott Energy Pipeline Limited Partnership; Eott Energy LLC; Eott Energy General Partner, L.L.C.; Standard Chartered Bank; Link Energy LLC |
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Date: |
2003 |
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Size: |
Preview shows 22KB of 408KB total |
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Price: |
$87 |
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ID: |
#154386 |
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Start of Preview |
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================================================================================
LETTER OF CREDIT AGREEMENT
dated as of February 11, 2003
among
EOTT ENERGY OPERATING LIMITED PARTNERSHIP,
EOTT ENERGY CANADA LIMITED PARTNERSHIP,
EOTT ENERGY LIQUIDS, L.P.
and
EOTT ENERGY PIPELINE LIMITED PARTNERSHIP,
as joint and several Borrowers,
EOTT ENERGY LLC
and
EOTT ENERGY GENERAL PARTNER, L.L.C.,
as Guarantors,
STANDARD CHARTERED BANK,
as LC Agent, LC Issuer and Collateral Agent
and
THE LC PARTICIPANTS PARTY HERETO
================================================================================
{PAGE}
TABLE OF CONTENTS
{TABLE}
{S} {C}
1. DEFINITIONS AND RULES OF INTERPRETATION................................................. 3
2. THE LETTERS OF CREDIT................................................................... 32
(a) General........................................................................ 32
(b) Requesting Letters of Credit................................................... 33
(c) Reimbursement and Participations............................................... 33
(d) No Duty to Inquire............................................................. 34
(e) LC Collateral.................................................................. 35
(f) Conditions Precedent to Extensions of Credit................................... 36
(g) Use of Proceeds................................................................ 45
(h) Mandatory Prepayments.......................................................... 45
(i) Application of Payments made to LC Agent....................................... 46
(j) Voluntary Reduction of Maximum Commitment Amount; Interest Rates and Fees...... 46
3. PAYMENTS TO LC PARTICIPANTS............................................................. 48
(a) General Procedures............................................................. 48
(b) Payment Obligations Absolute................................................... 48
(c) Capital Reimbursement.......................................................... 48
(d) Increased Cost of Letters of Credit............................................ 49
(e) Notice; Change of Applicable Lending Office.................................... 49
(f) Availability................................................................... 50
(g) Reimbursable Taxes............................................................. 50
4. OTHER ACTIONS OF CREDIT PARTIES......................................................... 51
5. REPRESENTATIONS AND WARRANTIES.......................................................... 52
6. AFFIRMATIVE COVENANTS................................................................... 59
(a) Payment and Performance........................................................ 59
(b) Payment of Expenses............................................................ 59
(c) Instruments, Documents, Securities or Chattel Paper............................ 59
(d) Books, Financial Statements and Reports........................................ 59
(e) Other Information and Inspections.............................................. 63
(f) Notice of Material Events and Change of Address................................ 64
(g) Maintenance of Properties...................................................... 64
(h) Discharge of Liens............................................................. 65
(i) Landlord's Waiver.............................................................. 65
(j) Maintenance of Existence and Qualifications.................................... 65
(k) Payment of Trade Liabilities, Taxes, etc....................................... 65
(l) Insurance...................................................................... 65
(m) Performance on Borrowers' Behalf............................................... 66
(n) Interest....................................................................... 66
(o) Compliance with Agreements and Law............................................. 66
(p) Environmental Matters; Environmental Reviews................................... 66
(q) Evidence of Compliance......................................................... 67
{/TABLE}
{PAGE}
TABLE OF CONTENTS
(C0NTINUED)
{TABLE}
{S} {C}
(r) Agreement to Deliver Security Documents........................................ 67
(s) Newly Created or Acquired Subsidiaries......................................... 67
(t) Compliance with Agreements..................................................... 67
(u) Risk Management Policies....................................................... 68
(v) Retention of Financial Advisor and Commercial Finance Audits................... 68
7. NEGATIVE COVENANTS...................................................................... 68
(a) Indebtedness................................................................... 68
(b) Accounts....................................................................... 70
(c) Limitation on Liens............................................................ 70
(d) Hedging Contracts.............................................................. 70
(e) Limitation on Mergers, etc. and Issuances of Securities........................ 70
(f) Limitation on Asset Sales...................................................... 70
(g) Limitation on Distributions, Dividends and Redemptions......................... 71
(h) Limitation on New Businesses, Investments and Capital Expenditures............. 71
(i) Limitation on Credit Extensions................................................ 72
(j) Transactions with Affiliates................................................... 72
(k) Prohibited Contracts........................................................... 72
(l) Modification of Certain Agreements............................................. 72
(m) Open Positions................................................................. 72
(n) Redelivery of Borrowing Base Report............................................ 72
(o) Books and Records.............................................................. 73
(p) Minimum Consolidated EBIDA..................................................... 73
(q) Minimum Consolidated Tangible Net Worth........................................ 74
(r) Interest Coverage.............................................................. 74
(s) Current Ratio.................................................................. 75
(t) Compliance with Environmental Laws............................................. 76
8. EVENTS OF DEFAULT....................................................................... 76
9. RIGHTS AND REMEDIES..................................................................... 79
10. GUARANTY................................................................................ 79
11. LC AGENT................................................................................ 81
(a) Appointment and Authority...................................................... 81
(b) Exculpation, the LC Agent's Reliance, etc...................................... 81
(c) Credit Decisions............................................................... 82
(d) Indemnification................................................................ 82
(e) Rights as LC Participant....................................................... 82
(f) Sharing of Set-Offs and Other Payments......................................... 83
(g) Investments.................................................................... 83
(h) Benefit of this Section........................................................ 83
(i) Resignation.................................................................... 84
(j) Other Lender Parties........................................................... 84
{/TABLE}
ii
{PAGE}
TABLE OF CONTENTS
(C0NTINUED)
{TABLE}
{S} {C}
12. ASSIGNMENTS AND PARTICIPATIONS.......................................................... 84
13. INDEMNIFICATION......................................................................... 86
14. MISCELLANEOUS........................................................................... 87
{/TABLE}
SCHEDULES AND EXHIBITS:
SCHEDULE I LC PARTICIPANT SCHEDULE
EXHIBIT A LETTER OF CREDIT REQUEST
EXHIBIT B CERTIFICATE ACCOMPANYING FINANCIAL STATEMENTS
EXHIBIT C BORROWING BASE REPORT
EXHIBIT D CASH FLOW REPORT
EXHIBIT E ENVIRONMENTAL COMPLIANCE CERTIFICATE
EXHIBIT F OPEN POSITION REPORT
EXHIBIT G VOLUME REPORT
iii
{PAGE}
LETTER OF CREDIT AGREEMENT
LETTER OF CREDIT AGREEMENT, dated as of February 11, 2003 (as amended,
supplemented or otherwise modified from time to time, and including all
Schedules and Exhibits attached hereto, this "AGREEMENT"), among EOTT ENERGY
OPERATING LIMITED PARTNERSHIP, a Delaware limited partnership ("EOTT OLP"), EOTT
ENERGY CANADA LIMITED PARTNERSHIP, a Delaware limited partnership ("EOTT
CANADA"), EOTT ENERGY LIQUIDS, L.P., a Delaware limited partnership ("EOTT
LIQUIDS"), EOTT ENERGY PIPELINE LIMITED PARTNERSHIP, a Delaware limited
partnership ("EOTT PIPELINE", and together with EOTT Canada and EOTT Liquids,
each an "ADDITIONAL OBLIGOR" and collectively, the "ADDITIONAL OBLIGORS", and
the Additional Obligors together with EOTT OLP, on a joint and several basis,
the "BORROWERS"), EOTT ENERGY LLC, a Delaware limited liability company ("EOTT
LLC"), EOTT ENERGY GENERAL PARTNER, L.L.C., a Delaware limited liability company
("EOTT GP", and together with EOTT LLC, each a "GUARANTOR" and collectively, the
"GUARANTORS", and together with the Borrowers, each a "CREDIT PARTY" and
collectively, the "CREDIT PARTIES"), STANDARD CHARTERED BANK, a banking
institution organized and existing under the laws of England and Wales, as
administrative agent for the LC Participants (as defined below) (in such
capacity, the "LC AGENT" and in its individual capacity, "STANDARD CHARTERED")
and as LC Issuer and Collateral Agent hereunder, and each of the banks or other
lending institutions which is a party hereto (as evidenced by the signature
pages of this Agreement) or which may from time to time become a party hereto or
any successor or assignee thereof (each an "LC PARTICIPANT" and collectively,
the "LC PARTICIPANTS").
WHEREAS, on or about April 23, 2002, EOTT OLP, EOTT Canada, EOTT
Liquids, and EOTT Pipeline (collectively, the "PREPETITION BORROWERS"), EOTT
Energy Partners, L.P., a Delaware limited partnership ("EOTT MLP") and EOTT GP,
as guarantors, the lenders party thereto (the "PREPETITION LENDERS"), and
Standard Chartered as administrative agent for the Prepetition Lenders (the
"PREPETITION AGENT") and letter of credit issuer thereunder (the "PREPETITION LC
ISSUER") entered into that certain Second Amended and Restated Reimbursement,
Loan and Security Agreement (the "PREPETITION CREDIT AGREEMENT"), pursuant to
which the Prepetition Lenders and the Prepetition LC Issuer provided credit
extensions to the Prepetition Borrowers on the terms and conditions set forth
therein;
WHEREAS, on October 8, 2002 (the "FILING DATE"), the Credit Parties (or
their predecessor entities, as the case may be), filed voluntary petitions for
relief under Chapter 11 of the Bankruptcy Code (as defined below) (jointly
administered under Chapter 11 Case No. 02-21730) (the "CASES") in the United
States Bankruptcy Court for the Southern District of Texas, Corpus Christi
Division (the "BANKRUPTCY COURT");
WHEREAS, in connection with the Cases, EOTT OLP, EOTT Canada, EOTT
Liquids, and EOTT Pipeline (collectively, the "DIP BORROWERS"), EOTT MLP and
EOTT GP (collectively, the "DIP GUARANTORS", and together with the DIP
Borrowers, the "DEBTORS"), the lenders party thereto (the "DIP LC
PARTICIPANTS"), and Standard Chartered as administrative agent for the DIP LC
Participants (the "DIP LC AGENT") and letter of credit issuer thereunder (the
"DIP LC ISSUER"), entered into that certain Debtor in Possession Letter of
Credit Agreement, dated as of October 18, 2002 (as amended, restated,
supplemented, amended and
{PAGE}
restated or otherwise modified from time to time, the "DIP LC AGREEMENT")
pursuant to which the DIP LC Participants and the DIP LC Issuer extended credit
to the DIP Borrowers on the terms set forth therein;
WHEREAS, pursuant to the DIP LC Agreement, the DIP LC Issuer has issued
and will issue certain DIP Letters of Credit which will be outstanding and
undrawn as of the Closing Date, together with additional amounts for certain
contingent claims for reimbursement, indemnification and the like, the
obligations of the DIP Borrowers in respect thereof being guaranteed by the DIP
Guarantors;
WHEREAS, on February 12, 2003, a hearing (the "CONFIRMATION HEARING")
is scheduled in the Bankruptcy Court with respect to confirmation of the
Reorganization Plan (as defined herein) of the Debtors;
WHEREAS, as a condition to the effectiveness of the Reorganization Plan
the Debtors shall have paid in full, in cash, all amounts due and payable on the
Closing Date under the DIP LC Agreement, and the DIP Letters of Credit and other
amounts accrued thereunder shall be provided for as set forth in this Agreement;
WHEREAS, the Borrowers have requested that Standard Chartered and the
other LC Participants provide financing to the Borrowers pursuant to this
Agreement, pursuant to which Standard Chartered and the other LC Participants
would extend to Borrowers a letter of credit facility not to exceed at any one
time outstanding $325,000,000 (as such amount may be reduced or terminated
pursuant to this Agreement and subject to availability under the Borrowing Base
(as defined herein)), to be made available in the form of letters of credit
issued from time to time by the LC Issuer at the request and for the account of
Borrowers, to be used by the Borrowers as provided in Section 2(a)(ii)(4);
WHEREAS, subject to the Intercreditor Agreement (as defined herein),
the Credit Parties desire to secure all of the Obligations hereunder and under
the Credit Documents by granting to the Collateral Agent, for the benefit of the
Secured Parties (as defined herein), a perfected first-priority Lien in the
Collateral;
WHEREAS, each of the Guarantors will derive substantial direct and
indirect benefit from the credit made available by the LC Participants and the
LC Issuer to the Borrowers; and
WHEREAS, the Guarantors are willing to guarantee the reimbursement and
other obligations of the Borrowers hereunder;
NOW, THEREFORE, in consideration of these premises and the mutual
undertakings set forth herein, the parties hereto hereby agree as follows:
2
{PAGE}
1. DEFINITIONS AND RULES OF INTERPRETATION. As used in this Agreement,
unless otherwise defined herein, all terms used herein which are defined in
Article 1 or Article 9 of the UCC (as in effect from time to time) shall have
the meanings set forth therein unless otherwise defined in this Agreement, and
all references to the plural herein shall also mean the singular. As used in
this Agreement, each of the following terms has the meaning given to such term
in this Section 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" has 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 AGENTS" means the Term Lender Agent and the LC Agent.
"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. A
Person shall be deemed to be "controlled by" any other Person if such
other Person possesses, directly or indirectly, power (i) to vote 5% or
more of the securities (on a fully diluted basis) having ordinary
voting power for the election of directors or managing general partners
or (ii) to direct or cause the direction of the management and policies
of such Person whether by contract or otherwise.
"AGREEMENT" has the meaning set forth in the preamble.
"ALTERNATE BASE RATE" means the higher of (i) the variable per annum
rate of interest so designated from time to time by the LC Agent as its
"base rate" and (ii) the Federal Funds Rate, plus one-half percent
(0.5%) per annum, in each case, plus three percent (3%) per annum. The
"base rate" is a reference rate and does not necessarily represent the
lowest or best rate being charged to any customer of the LC Agent.
Changes in the Alternate Base Rate resulting from changes in the "base
rate" shall take place immediately without notice or demand of any
kind.
"APPLICABLE LENDING OFFICE" means with respect to any LC Participant,
the office of such LC Participant specified as its "Applicable Lending
Office" in the LC Participant Schedule, or such other office as such LC
Participant may from time to time specify to the Borrower
Representative and the LC Agent and, with respect to the LC Agent, the
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