Document:

ex10_1.htm

Exhibit 10.1

 

 

 

 

FIRST AMENDMENT

 

TO

 

SECOND AMENDED AND RESTATED CREDIT AGREEMENT

 

dated as of

 

November 17, 2010

 

among

 

GENESIS ENERGY, L.P.,

 

as the Borrower

 

and

 

The Lenders Party Hereto

 

 

 

BNP PARIBAS,

 

as Administrative Agent,

 

BANK OF AMERICA, N.A. AND BANK OF MONTREAL,

 

as Co-Syndication Agents,

 

and

 

U.S. BANK NATIONAL ASSOCIATION,

 

as Documentation Agent

 

  

  

  

FIRST AMENDMENT TO SECOND AMENDED AND RESTATED CREDIT AGREEMENT

 

THIS FIRST AMENDMENT TO SECOND AMENDED AND RESTATED CREDIT AGREEMENT (this "First Amendment") dated as of November 17, 2010, is by and among GENESIS ENERGY, L.P., a Delaware limited partnership (the "Borrower"), BNP PARIBAS, as administrative agent (in such capacity, together with its successors in such capacity, the "Administrative Agent") for the lenders party to the Credit Agreement referred to below (collectively, the "Lenders"), and the undersigned Lenders.

 

R E C I T A L S

 

A.           The Borrower, the Lenders, the Administrative Agent and the other agents referred to therein are parties to that certain Second Amended and Restated Credit Agreement dated as of June 29, 2010 (the "Credit Agreement"), pursuant to which the Lenders have made certain Loans and provided certain Commitments (subject to the terms and conditions thereof) to the Borrower.

 

B.            The Borrower wishes, and the Lenders signatory hereto and the Administrative Agent are willing, to amend the Credit Agreement as more fully described herein.

 

NOW, THEREFORE, in consideration of the premises and the mutual covenants herein contained, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

 

Section 1.              Defined Terms.  Each capitalized term used herein but not otherwise defined herein has the meaning given such term in the Credit Agreement.  Unless otherwise indicated, all article, schedule, exhibit and section references in this First Amendment refer to articles and sections of the Credit Agreement.

 

As used in this First Amendment, the following term has the meaning specified below:

 

"First Amendment Effective Date" has the meaning assigned to such term in Section 3 hereof.

 

Section 2.               Amendments to Credit Agreement.

 

2.1           Amendments to Section 1.01 (Defined Terms).

 

(a)           The definition of "Adjusted Consolidated EBITDA" is hereby amended and restated in its entirety to read as follows:

 

"Adjusted Consolidated EBITDA" means, for any period, Consolidated EBITDA determined on a Pro Forma Basis; provided that (a) cash distributions received by the Borrower and the Restricted Subsidiaries from all Joint Ventures consummated after the Effective Date (other than the CHOPS Joint Venture) shall not account for more than 25% of Adjusted Consolidated EBITDA (as such Adjusted Consolidated EBITDA is calculated from time to time without giving effect to cash distributions from Joint Ventures consummated after the Effective Date (but giving effect to cash distributions from the CHOPS Joint Venture whether consummated before or after the Effective Date)), and any excess shall be deemed to not be Adjusted Consolidated EBITDA and (b) for any Material Project with a Commencement Date occurring on or prior to the date of determination, Adjusted Consolidated EBITDA may include, at the Borrower's option, the Material Project EBITDA Adjustments for such Material Project for such period determined as specified below.  Upon the occurrence and during the continuance of a "Cash Option Only Default" under and as defined in the NEJD Financing Lease Agreement, Adjusted Consolidated EBITDA shall be automatically reduced by an amount equal to the contributions to Adjusted Consolidated EBITDA attributable to NEJD SPE 2 for the applicable Test Period or Calculation Period.

 

  

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As used herein, "Material Project EBITDA Adjustments" means, with respect to the construction or expansion of any capital project of the Borrower or any of its Restricted Subsidiaries, the aggregate capital cost of which (inclusive of capital costs expended prior to the acquisition, construction or expansion thereof) is reasonably expected by the Borrower to exceed, or exceeds, with respect to the Borrower or any of its Restricted Subsidiaries, $10,000,000 (a "Material Project"):

(a)           for each Test Period ending prior to the date on which a Material Project has achieved commercial operation (the "Commercial Operation Date") (but including the Test Period ending with the fiscal quarter in which such Commercial Operation Date occurs), a percentage (based on the then-current completion percentage of such Material Project as of the date of determination) of an amount to be reasonably approved by a majority of the Arrangers (the "Projected Consolidated EBITDA") as the projected Consolidated EBITDA attributable to such Material Project for the first full 12-month period following the Scheduled Commercial Operation Date of such Material Project (such amount to be determined based upon projected revenues from customer contracts, projected revenues from prospective customers that are reasonably determined by a majority of the Arrangers, in their reasonable discretion, to otherwise be reasonably likely on the basis of sound financial planning practice, the creditworthiness and applicable projected production of the prospective customers, capital and other costs, operating and administrative expenses, the Scheduled Commercial Operation Date, commodity price assumptions and other factors reasonably deemed appropriate by a majority of the Arrangers), which may, at the Borrower's option, be added to actual Adjusted Consolidated EBITDA for the Test Period next preceding the fiscal quarter in which construction or expansion of such Material Project commences (the "Commencement Date") and for each Test Period thereafter until the Commercial Operation Date of such Material Project (including the Test Period ending with the fiscal quarter in which such Commercial Operation Date occurs), but net of any actual Consolidated EBITDA attributable to such Material Project for such Test Period; provided that if the actual Commercial Operation Date does not occur by the Scheduled Commercial Operation Date, then the foregoing amount shall be reduced, for Test Periods ending after the Scheduled Commercial Operation Date to (but excluding) the Test Period ending with the fiscal quarter in which such Commercial Operation Date occurs, by the following percentage amounts depending on the period of delay (based on the period of actual delay or then-estimated delay (estimated on the date of determination), whichever is longer): (i) 90 days or less, 0%, (ii) longer than 90 days, but not more than 180 days, 25%, (iii) longer than 180 days but not more than 270 days, 50%, (iv) longer than 270 days but not more than 365 days, 75%, and (v) longer than 365 days, 100%; and

 

  

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(b)           beginning with the Test Period ending with the first full fiscal quarter following the Commercial Operation Date of a Material Project and for the Test Periods ending with the two immediately succeeding fiscal quarters, an amount equal to the greater of (i) three times the actual Consolidated EBITDA attributable to such Material Project for such first full fiscal quarter (if the first full fiscal quarter), 100% of the actual Consolidated EBITDA attributable to such Material Project for such first two fiscal quarters (if the second full fiscal quarter), or one-third of the actual Consolidated EBITDA for such first three fiscal quarters (if the third full fiscal quarter) or (ii) 75% (if the first full fiscal quarter), 50% (if the second full fiscal quarter) or 25% (if the third full fiscal quarter) of the Projected Consolidated EBITDA attributable to such Material Project for the first full Test Period following such Commercial Operation Date, which may, at the Borrower's option, be added to actual Adjusted Consolidated EBITDA for such Test Periods.

 

Notwithstanding the foregoing:

 

(i)            no such Material Project EBITDA Adjustment shall be allowed with respect to any Material Project unless:

 

	
  

	
(a)

	
at least 30 days (or such lesser period as is reasonably acceptable to the Administrative Agent) prior to the last day of the Test Period for which the Borrower desires to commence inclusion of such Material Project EBITDA Adjustment in Adjusted Consolidated EBITDA with respect to a Material Project (the "Initial Test Period"), the Borrower shall have delivered to Administrative Agent notice of such Material Project and the Scheduled Commercial Operation Date with respect thereto, together with written pro forma projections of Consolidated EBITDA attributable to such Material Project for the first full Test Period following the Scheduled Commercial Operation Date with respect to such Material Project, and

 

	
  

	
(b)

	
prior to the last day of the Initial Test Period, a majority of  the Arrangers shall have approved (such approval not to be unreasonably withheld or delayed) such projections and shall have received such other information and documentation as a majority of the Arrangers may reasonably request with respect to such Material Project, all in form and substance reasonably satisfactory to a majority of the Arrangers, and

 

  

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(ii)           the aggregate amount of all Material Project EBITDA Adjustments for any Test Period shall be limited to 15% of the total actual Adjusted Consolidated EBITDA for such Test Period (which total actual Adjusted Consolidated EBITDA shall be determined without including any Material Project EBITDA Adjustments).

 

For purposes of the foregoing, "commercial operation" shall be deemed achieved for any Material Project at such time, at or after the completion of construction or expansion thereof and the initial placement thereof into service, as such Material Project first realizes the long-term operating levels reasonably expected for such Material Project.

 

(b)           The definition of "Agreement" is hereby amended by adding the words ", as further amended by the First Amendment," after the words "this Second Amended and Restated Credit Agreement."

 

(c)           The definition of "Consolidated EBITDA" is hereby amended by (i) adding "(other than clause (v) or (vi) below)" after "in each case",  (ii) replacing the word "and" before clause (vi) with a comma and (iii) adding to the end of the first sentence the following words: ", (vii) up to $5,400,000 in unusual items charged as expense in the first fiscal quarter of fiscal 2010, and (viii) any Transaction Costs provided, however that Transaction Costs added back to Consolidated Net Income during the term of this Agreement pursuant to this clause (viii) shall in no event exceed 15% of Adjusted Consolidated EBITDA for the four fiscal quarter period ending September 30, 2010 (as adjusted on a Pro Forma Basis to reflect the CHOPS Joint Venture Investment)."

 

(d)           The definition of "Consolidated Leverage Ratio" is hereby amended by (i) adding "(i)" before the word "solely" in the proviso and (ii) adding to the end of the proviso the following words: "and (ii) for purposes of calculating the Consolidated Leverage Ratio as of any date of determination (other than the end of a Test Period), Consolidated Total Funded Debt shall be determined without giving effect to Indebtedness incurred after the end of the Test Period solely to finance all or a portion of any Material Project.  For avoidance of doubt, for purposes of calculating the Consolidated Leverage Ratio as of the Test Period most recently ended, all outstanding Indebtedness incurred solely to finance all or a portion of any Material Project that constitutes "Consolidated Total Funded Debt" shall be included for purposes of calculating the Consolidated Leverage Ratio as of the end of such Test Period."

 

(e)           The definition of "Consolidated Senior Secured Leverage Ratio" is hereby amended by adding to the end of the sentence the following words: "provided that, for purposes of calculating the Consolidated Senior Secured Leverage Ratio as of any date of determination (other than the end of a Test Period), Consolidated Total Senior Secured Funded Debt shall be determined without giving effect to Indebtedness incurred after the end of the Test Period solely to finance all or a portion of any Material Project.  For avoidance of doubt, for purposes of calculating the Consolidated Senior Secured Leverage Ratio as of the Test Period most recently ended, all outstanding Indebtedness incurred solely to finance all or a portion of any Material Project that constitutes "Consolidated Total Senior Secured Funded Debt" shall be included for purposes of calculating the Consolidated Senior Secured Leverage Ratio as of the end of such Test Period."

 

  

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(f)            The definition of "Material Agreement" is hereby amended by adding to the end of the sentence the following words: ", the CHOPS Purchase and Sale Agreement and, solely for the purpose of Section 6.11, the CHOPS Commitment Letter."

 

(g)           The definition of "Notes Offering" is hereby amended by (i) adding the words "or loans" after the words "unsecured notes" and (ii) adding the words "or (m)" after the words "Section 6.01(j)."

 

(h)           The definition of "Planned Reorganization" is hereby amended by (i) adding "(i)" after the words "pursuant to which" and (ii) adding to the end of the sentence the following words: "or (ii) the Borrower, directly or indirectly through its Restricted Subsidiaries, acquires and thereafter owns and holds all or any portion or combination of its general partner interest and incentive distribution rights and the Equity Interest in the General Partner (with the General Partner becoming and thereafter constituting a Restricted Subsidiary), which general partner and/or incentive distribution rights may be cancelled or replaced with other Equity Interests owned by the Borrower, directly or indirectly through its Restricted Subsidiaries."

 

(i)            The definition of "Pro Forma Basis" is hereby amended by (i) adding the words "or Material Projects for which a Material Project EBITDA Adjustment has been made with respect to such calculation" after the words "Permitted Acquisition" in the first parenthetical of clause (a) and (ii) adding the words "or Material Projects for which a Material Project EBITDA Adjustment has been made with respect to such calculation" after the word "Acquisitions" in the first parenthetical of clause (c)(i)(A).

 

(j)            The following definitions are hereby added to Section 1.01 of the Credit Agreement where alphabetically appropriate:

 

"CHOPS Commitment Letter" means the commitment letter from BNP Paribas, BNP Paribas Securities Corp., Bank of America, N.A., Banc of America Securities LLC, Bank of Montreal, and BMO Capital Markets Corp. to the Borrower dated October 25, 2010, as such agreement may be amended, modified, supplemented, or restated from time to time in accordance with this Agreement.

 

"CHOPS Joint Venture" means the Cameron Highway Oil Pipeline Company, a Delaware general partnership governed by that certain Amended and Restated Partnership Agreement, dated as of July 10, 2003 as amended by the First Amendment thereto, dated December 15, 2005, and the Second Amendment thereto, dated March 14, 2007, as may be further amended, restated or otherwise modified from time to time in accordance with this Agreement, by and among Cameron Highway Pipeline I, L.P., Valero CHOPS I, L.P. and Valero CHOPS II, L.P., each a Delaware limited partnership.

 

  

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"CHOPS Joint Venture Investment" means the indirect Acquisition by Genesis CHOPS I and Genesis CHOPS II of Equity Interests in the CHOPS Joint Venture pursuant to the CHOPS Purchase and Sale Agreement, as a result of which Genesis CHOPS I and Genesis CHOPS II, collectively, indirectly own 50% of the Equity Interests in the CHOPS Joint Venture.

 

"CHOPS Purchase and Sale Agreement" means the Purchase and Sale Agreement, dated October 22, 2010, by and among Valero Energy Corporation, Valero Services, Inc., and Valero Unit Investments, L.L.C., as the seller parties, and Genesis CHOPS I, Genesis CHOPS II, and the Borrower, as the buyer parties, as such agreement may be amended, modified, supplemented, or restated from time to time in accordance with this Agreement.

 

"Compliance Certificate" means a certificate substantially in the form of Exhibit J.

 

"First Amendment" means the First Amendment to Second Amended and Restated Credit Agreement, dated as of November 12, 2010, among the Borrower, the Administrative Agent and the Lenders party thereto.

 

"First Amendment Effective Date" has the meaning assigned to such term in the First Amendment.

 

"Genesis CHOPS I" means Genesis CHOPS I, LLC, a Delaware limited liability company.

 

"Genesis CHOPS II" means Genesis CHOPS II, LLC, a Delaware limited liability company.

 

"Scheduled Commercial Operation Date" means, with respect to any Material Project, the date originally scheduled as the day on which such Material Project shall achieve "commercial operation" as defined in the definition of Adjusted Consolidated EBITDA as specified in the notice to be delivered to the Administrative Agent with respect to such Material Project as specified in the third paragraph of the definition of "Adjusted Consolidated EBITDA."

 

"Transaction Costs" means any legal, professional and advisory fees or other transaction costs and expenses paid (whether or not incurred) by the Borrower or any Restricted Subsidiary in connection with (i) the CHOPS Joint Venture Investment, (ii) any incurrence of Indebtedness or Disqualified Equity or any issuance of other equity securities to finance, or to refinance Indebtedness or Disqualified Equity incurred to finance, the CHOPS Joint Venture Investment, or (iii) any Planned Reorganization, in each case permitted under this Agreement.

 

(k)           The definitions "Exempted Joint Venture" and "Material Exempted Joint Ventures" are hereby deleted from Section 1.01 of the Credit Agreement and each reference in the Credit Agreement and the other Loan Documents to Exempted Joint Ventures and Material Exempted Joint Ventures shall no longer be of any force and effect and will be disregarded for all purposes.

 

  

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2.2           Amendments to Section 5.01 (Financial Statements; Ratings Change and Other Information).

 

(a)           Section 5.01(a) is hereby amended by (i) replacing the comma before "(ii)" with the word "and" and (ii) deleting (1) the words ", and" immediately preceding clause (iii) and (2) clause (iii).

 

(b)           Section 5.01(b) is hereby amended by (i) replacing the comma before "(ii)" with the word "and" and (ii) deleting (1) the words ", and" immediately preceding clause (iii) and (2) clause (iii).

 

(c)           Section 5.01(d) is hereby amended and restated in its entirety as follows:

 

(d)           concurrently with any delivery of financial statements under clause (a), (b) or (c) above, a Compliance Certificate signed by a Financial Officer of the Borrower;

 

(d)           Section 5.01(h) is hereby amended by deleting "or any Material Exempted Joint Venture".

 

(e)           Section 5.01(n) is hereby amended by deleting "or the Material Exempted Joint Ventures".

 

(f)            Section 5.01 is hereby amended by (i) deleting the word "and" at the end of subsection (m), (ii) replacing the period at the end of subsection (n) with "; and" and (iii) adding a new subsection (o) that read as follows: "with respect to any Material Project, within five Business Days after the occurrence thereof, written notice of the Commencement Date and the Commercial Operation Date, as applicable."

 

2.3           Amendment to Section 6.01 (Indebtedness and Disqualified Equity).  Section 6.01 is hereby amended by (i) deleting the word "and" at the end of subsection (k), (ii) replacing the period at the end of subsection (l) with "; and" and (iii) adding a new subsection (m) that reads as follows: "up to $300,000,000 in aggregate principal amount of unsecured Indebtedness issued by the Borrower constituting "bridge loans" (as defined in the CHOPS Commitment Letter) the net proceeds of which are used solely to finance a portion of the purchase price of the Equity Interests in the CHOPS Joint Venture pursuant to the CHOPS Purchase and Sale Agreement and certain Transaction Costs and Guarantees thereof by any Restricted Subsidiary so long as no Default or Event of Default exists or would exist immediately after the funding thereof, and extensions, renewals, replacements and refinancings of any such Indebtedness (including any "rollover loans" or "exchange notes" (as defined in the CHOPS Commitment Letter) incurred in respect thereof), that do not increase the outstanding principal amount thereof; provided that (i) such Indebtedness shall (A) have no financial maintenance covenants that are more restrictive than those in this Agreement and (B) have no other covenants (other than mandatory prepayments as a result of (including upon the receipt of net cash proceeds from) any asset sale, debt issuance or incurrence, equity issuance, change of control or similar event) or events of default that, taken as a whole, are more restrictive than those in this Agreement and (ii) no Subsidiary that is not also a Guarantor shall guarantee such Indebtedness."

 

  

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2.4           Amendment to Section 6.02 (Liens).  Section 6.02 is hereby amended by (i) deleting the word "and" at the end of subsection (g), (ii) replacing the period at the end of subsection (h) with "; and" and (iii) adding a new subsection (i) that reads as follows: "Liens represented by the escrow of the net proceeds of Indebtedness issued pursuant to Section 6.01(j) to finance a portion of the purchase price of the Equity Interests in the CHOPS Joint Venture pursuant to the CHOPS Purchase and Sale Agreement pending consummation of the CHOPS Joint Venture Investment."

 

2.5           Amendment to Section 6.03 (Fundamental Changes; Limitations on Business).  Section 6.03 is hereby amended by replacing the word "subsidiaries" with "Unrestricted Subsidiaries" in subsection (d).

 

2.6           Amendment to Section 6.04 (Investments, Loans, Advances, and Guarantees).  Section 6.04 is hereby amended by (i) replacing the word "its" with the word "any" in subsection (b), (ii) adding the words "and the CHOPS Joint Venture Investment" after the words "Permitted Joint Ventures" in subsection (o) and (iii) adding the words "or the consummation of the CHOPS Joint Venture Investment, respectively" after the words "such Joint Venture" in subsection (o).

 

2.7           Amendment to Section 6.06 (Sale of Assets).  Section 6.06 is hereby amended by (i) adding the words "to any Unrestricted Subsidiary" after the word "transferred" in subsection (e), (ii) deleting the word "and" at the end of subsection (i), (iii) replacing the period at the end of subsection (j) with "; and" and (iv) adding a new subsection (k) that reads as follows: "dispositions of cash or other Property solely to effect (i) any Investments permitted under Section 6.04(f), (i) or (p) or (ii) the CHOPS Joint Venture Investment, in each case so long as such Investment is permitted pursuant to Section 6.04."

 

2.8           Amendment to Section 6.10 (Restrictive Agreements).  Section 6.10 is hereby amended by (i) adding "(x)" after the "ability of" in subsection (b), (ii) adding "(y)" before "it or any of its Restricted Subsidiaries to Guarantee Indebtedness of it or any other Restricted Subsidiary" in subsection (b) (before the first proviso), (iii) deleting the word "and" at the end of clause (vii), (iv) adding the words "or (m)" after the words "Section 6.01(j)" in clause (viii), and (v) adding to the end of the sentence the following words: ", and (ix) clause (b)(y) above shall not apply to such prohibitions, restrictions and conditions contained in any Material Agreements evidencing or governing, or pursuant to which there has been issued, Indebtedness or Disqualified Equity permitted by Section 6.01(g), (h), (j) or (m) so long as (A) such prohibitions, restrictions and conditions, taken as a whole, are no more restrictive on the Borrower Parties than those contained in this Agreement and (B) the Guarantees of the Secured Obligations created under the Loan Documents are not prohibited, restricted or conditioned in any manner."

 

2.9           Amendment to Section 6.15 (Financial Condition Covenants).  Section 6.15 is hereby amended and restated in its entirety to read as follows:

 

  

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(a)           Leverage Ratio.  The Borrower will not permit its Consolidated Leverage Ratio to be in excess of (i) prior to the consummation of a Notes Offering, 4.50 to 1.00 at any time, or (ii) upon or after the consummation of a Notes Offering, 5.00 to 1.00 at any time; provided that after the consummation of a Notes Offering and upon the consummation of a Material Acquisition that is a Permitted Acquisition or the CHOPS Joint Venture Investment, the Borrower will not permit such ratio to exceed 5.50 to 1.00 until the end of the last day of the third full fiscal quarter of the Borrower after the consummation of such Material Acquisition or the CHOPS Joint Venture Investment, as applicable, at which time the maximum Leverage Ratio permitted to be maintained by the Borrower will automatically revert back to 5.00 to 1.00.

 

(b)           Senior Secured Leverage Ratio.  After the consummation of a Notes Offering, the Borrower will not permit its Consolidated Senior Secured Leverage Ratio to be in excess of 3.75 to 1.00 at any time; provided that upon the consummation of a Material Acquisition that is a Permitted Acquisition or the CHOPS Joint Venture Investment, the Borrower will not permit such ratio to exceed 4.25 to 1.00 until the end of the last day of the third full fiscal quarter of the Borrower after the consummation of such Material Acquisition or the CHOPS Joint Venture Investment, as applicable, at which time the maximum Senior Secured Leverage Ratio permitted to be maintained by the Borrower will automatically revert back to 3.75 to 1.00.

 

(c)           Minimum Interest Coverage.  The Borrower will not permit its Consolidated Interest Coverage Ratio to be less than 3.00 to 1.00 at any time; provided that after the consummation of a Notes Offering and upon the consummation of a Material Acquisition that is a Permitted Acquisition or the CHOPS Joint Venture Investment, the Borrower will not permit such ratio to be less than 2.75 to 1.00 until the end of the last day of the third full fiscal quarter of the Borrower after the consummation of such Material Acquisition or the CHOPS Joint Venture Investment, as applicable, at which time the lowest Consolidated Interest Coverage Ratio permitted to be maintained by the Borrower will automatically revert back to 3.00 to 1.00.

 

2.10         Amendment to Section 6.19 (Prepayments on Indebtedness or Disqualified Equity).  Section 6.19 is hereby amended by (i) inserting "of" after "net cash proceeds" in clauses (iii) and (iv) of subsection (a), (ii) deleting the word "and" at the end of clause (iii) of subsection (a) and (iii) adding to the end of subsection (a) the following words: "(v) Indebtedness issued pursuant to and in accordance with Section 6.01(b) or (m) with the net cash proceeds of, or in exchange for, other Indebtedness issued as extensions, renewals, replacements or refinancings thereof pursuant to and in accordance with Section 6.01(b) or (m), respectively, (vi) Indebtedness issued pursuant to and in accordance with Section 6.01(m) with the net cash proceeds of, or in exchange for, other Indebtedness or Disqualified Equity issued pursuant to and in accordance with Section 6.01(j), (vii) Indebtedness issued pursuant to and in accordance with Section 6.01(m) upon any mandatory prepayment, repurchase, or redemption as a result of (including upon the receipt of net cash proceeds from) any asset sale, debt issuance or incurrence, equity issuance, change of control or similar event, and (viii) Indebtedness issued pursuant to Section 6.01(j) to finance a portion of the purchase price of the Equity Interests in the CHOPS Joint Venture pursuant to the CHOPS Purchase and Sale Agreement with funds held in the escrow specified in Section 6.02(i) in the event the CHOPS Joint Venture Investment is not consummated by the deadline established with respect to such escrow".

 

  

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2.11         Exhibit J to Credit Agreement.  Exhibit J attached hereto is hereby added as Exhibit J to the Credit Agreement.

 

Section 3.               Conditions Precedent.  This First Amendment shall not become effective until the date (the "First Amendment Effective Date") on which each of the following conditions is satisfied (or waived in accordance with Section 10.02 of the Credit Agreement):

 

(a)           The Administrative Agent shall have received from the Lenders required by the Credit Agreement and the Borrower, executed counterparts (in such number as may be requested by the Administrative Agent) of this First Amendment.

 

(b)           The Administrative Agent, the Arrangers and the Lenders shall have received all fees and other amounts due and payable on or prior to the First Amendment Effective Date, including, to the extent invoiced, reimbursement or payment of all out of pocket expenses required to be reimbursed or paid by the Borrower under the Credit Agreement.

 

(c)           The Administrative Agent shall have received a certificate of a Responsible Officer of the Borrower certifying that: (i) a true, correct and complete copy of the Purchase and Sale Agreement dated October 22, 2010 by and among Valero Energy Corporation, Valero Services, Inc., and Valero Unit Investments, L.L.C., as the seller parties, and Genesis CHOPS I, Genesis CHOPS II, and the Borrower, as the buyer parties, has been delivered to the Administrative Agent and there have been no amendments, supplements or other modifications thereto as of the First Amendment Effective Date and (ii) a true, correct and complete copy of the Amended and Restated Partnership Agreement dated as of July 10, 2003 of the Cameron Highway Oil Pipeline Company, as amended by the First Amendment dated December 15, 2005 and the Second Amendment dated March 14, 2007 has been delivered to the Administrative Agent and there have been no other amendments, supplements or other modifications thereto as of the First Amendment Effective Date.

 

(d)           The Borrower shall have made and submitted to the Administrative Agent calculations in detail reasonably satisfactory to the Administrative Agent with respect to the financial covenants contained in Section 6.15 of the Credit Agreement for the four fiscal quarter period ending September 30, 2010 (the "Calculation Period") on a Pro Forma Basis as if the CHOPS Joint Venture Investment had occurred on the first day of the Calculation Period, and such calculations shall have been certified by a Financial Officer of the Borrower as being true and correct and shall demonstrate that such financial covenants would have been complied with if the CHOPS Joint Venture Investment had occurred on the first day of the Calculation Period.

 

(e)           No Default or Event of Default shall exist immediately before or after giving effect to this First Amendment, and the representations and warranties of the Borrower Parties set forth herein shall be true and correct.

 

The Administrative Agent shall notify the Borrower and the Lenders of the First Amendment Effective Date, and such notice shall be conclusive and binding.

 

Section 4.               Miscellaneous.

 

  

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4.1           Confirmation.  The provisions of the Loan Documents, as amended by this First Amendment, shall remain in full force and effect in accordance with their terms following the effectiveness of this First Amendment.

 

4.2           Ratification and Affirmation; Representations and Warranties.  The Borrower hereby (a) ratifies and affirms its obligations under, and acknowledges, renews and extends its continued liability under, each Loan Document to which it is a party and agrees that each Loan Document to which it is a party remains in full force and effect, except as expressly amended hereby, notwithstanding the amendments contained herein and (b) represents and warrants to the Lenders that:  (i) as of the date hereof, after giving effect to the terms of this First Amendment, all of the representations and warranties contained in each Loan Document to which it is a party are true and correct, except to the extent any such representations and warranties are expressly limited to an earlier date, in which case, such representations and warranties shall continue to be true and correct as of such specified earlier date as supplemented or subject to such qualifications as are set forth in the applicable Schedule(s) as of the Effective Date and (ii) (A) as of the date hereof, no Default has occurred and is continuing and (B) immediately after giving effect to this First Amendment, no Default will have occurred and be continuing.

 

4.3           Credit Document.  This First Amendment and each agreement, instrument, certificate or document executed by the Borrower or any of its officers in connection therewith are "Loan Documents" as defined and described in the Credit Agreement and all of the terms and provisions of the Loan Documents relating to other Loan Documents shall apply hereto and thereto.

 

4.4           Counterparts.  This First Amendment may be executed by one or more of the parties hereto in any number of separate counterparts, and all of such counterparts taken together shall be deemed to constitute one and the same instrument.  Delivery of this First Amendment by facsimile or other electronic transmission shall be effective as delivery of a manually executed counterpart hereof.

 

4.5           NO ORAL AGREEMENT.  THIS FIRST AMENDMENT, THE CREDIT AGREEMENT AND THE OTHER LOAN DOCUMENTS EXECUTED IN CONNECTION HEREWITH AND THEREWITH REPRESENT THE FINAL AGREEMENT AMONG THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR UNWRITTEN ORAL AGREEMENTS OF THE PARTIES.  THERE ARE NO SUBSEQUENT ORAL AGREEMENTS BETWEEN THE PARTIES.

 

4.6           GOVERNING LAW.  THIS FIRST AMENDMENT (INCLUDING, BUT NOT LIMITED TO, THE VALIDITY AND ENFORCEABILITY HEREOF) SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

 

 

[signature pages follow]

 

  

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IN WITNESS WHEREOF, the parties hereto have caused this First Amendment to be duly executed as of the date first written above.

 

 

	  	
BORROWER:

	  	  	  	  
	 	 	 	 
	  	
GENESIS ENERGY, L.P.

	 	 
	  	
By:  

	
GENESIS ENERGY, LLC, its general partner

	 	 	 
	  	  	
By:

	
/s/ Robert V. Deere

	  	  	
Name:  

	
Robert V. Deere

	  	  	
Title:

	
Chief Financial Officer

[Signature Page to First Amendment to Second Amended and Restated Credit Agreement]

  

 

  

 

	 	
LENDERS:

	 	  	  	  
	 	  	  	  
	 	
BNP PARIBAS, as Administrative Agent and a Lender

	 	  	  	  
	 	  	  	  
	 	
By:

	
/s/ J. Christopher Lyons

	  
	 	
Name:  

	
J. Christopher Lyons

	  
	 	
Title:

	
Managing Director

	  
	 	  	  	  
	 	  	  	  
	 	
By:

	
/s/ Andrew Ostrov

	  
	 	
Name:

	
Andrew Ostrov

	  
	 	
Title:

	
Director

	  

[Signature Page to First Amendment to Second Amended and Restated Credit Agreement]

  

 

  

 

	  	
BANK OF AMERICA, N.A. as a Lender

	  	  	  
	  	  	  
	  	
By:

	
/s/ Christopher Renyi

	  	
Name:  

	
Christopher Renyi

	  	
Title:

	
Vice President

[Signature Page to First Amendment to Second Amended and Restated Credit Agreement]

  

 

  

 

	  	
BANK OF MONTREAL, as Lender

	  	  	  
	  	  	  
	  	
By:

	
/s/ Kevin Utsey

	  	
Name:  

	
Kevin Utsey

	  	
Title:

	
Vice President

[Signature Page to First Amendment to Second Amended and Restated Credit Agreement]

  

 

  

 

	  	
DEUTSCHE BANK TRUST COMPANY AMERICAS, as Lender

	  	  
	  	  	  
	  	
By:

	
/s/ Scottye Lindsey

	  	
Name:  

	
Scottye Lidnsey

	  	
Title:

	
Director

	  	  	  
	  	  	  
	  	
By:

	
/s/ Evelyn Thierry

	  	
Name:

	
Evelyn Thierry

	  	
Title:

	
Director

[Signature Page to First Amendment to Second Amended and Restated Credit Agreement]

  

 

  

 

	  	
WELLS FARGO BANK, NATIONAL ASSOCIATION, as Lender

	  	  
	  	  	  
	  	
By:

	
/s/ Leanne S. Phillips

	  	
Name:  

	
Leanne S. Phillips

	  	
Title:

	
Director

[Signature Page to First Amendment to Second Amended and Restated Credit Agreement]

  

 

  

 

	  	
ROYAL BANK OF CANADA, as Lender

	  	  	  
	  	  	  
	  	
By:

	
/s/ Jason S. York

	  	
Name:  

	
Jason S. York

	  	
Title:

	
Authorized Signatory

[Signature Page to First Amendment to Second Amended and Restated Credit Agreement]

  

 

  

 

	  	
AMEGY BANK NATIONAL ASSOCIATION, as Lender

	  	  
	  	  	  
	  	
By:

	
/s/ Charles W. Patterson

	  	
Name:  

	
Charles W. Patterson

	  	
Title:

	
Senior Vice President

[Signature Page to First Amendment to Second Amended and Restated Credit Agreement]

  

 

  

 

	  	
COMPASS BANK, as Lender

	  	  	  
	  	  	  
	  	
By:

	
/s/ Dorothy Marchand

	  	
Name:  

	
Dorothy Marchand

	  	
Title:

	
Senior Vice President

[Signature Page to First Amendment to Second Amended and Restated Credit Agreement]

  

 

  

 

	  	
UBS LOAN FINANCE LLC, as Lender

	  	  
	  	  	  
	  	
By:

	
/s/ Irja R. Otsa

	  	
Name:  

	
Irja R. Otsa

	  	
Title:

	
Associate Director

	  	  	  
	  	  	  
	  	
By:

	
/s/ Mary E. Evans

	  	
Name:

	
Mary E. Evans

	  	
Title:

	
Associate Director

[Signature Page to First Amendment to Second Amended and Restated Credit Agreement]

  

 

  

 

	  	
REGIONS BANK, as Lender

	  	  	  
	  	  	  
	  	
By:

	
/s/ Randy Peterson

	  	
Name:  

	
Randy Peterson

	  	
Title:

	
Senior Vice President

[Signature Page to First Amendment to Second Amended and Restated Credit Agreement]

  

 

  

EXHIBIT J

 

 

FORM OF COMPLIANCE CERTIFICATE1

 

Financial Statement Date:  _____________, ______

	
To:

	
BNP Paribas, as Administrative Agent

 

Ladies and Gentlemen:

 

Reference is made to the Second Amended and Restated Credit Agreement dated as of June 29, 2010 (as amended, restated, extended, supplemented or otherwise modified in writing from time to time, the "Agreement;" the terms defined therein being used herein as therein defined), among Genesis Energy, L.P., as borrower (the "Borrower"), BNP Paribas, as administrative agent, and the lenders party thereto.

 

The undersigned Financial Officer hereby certifies as of the date hereof that he/she is the __________________________________ of the Borrower, and that, as such, he/she is authorized to execute and deliver this Certificate to the Administrative Agent on the behalf of the Borrower, and that:

 

[Use following paragraph 1 for fiscal year-end financial statements]

1.             The Borrower has delivered the year-end audited financial statements required by Section 5.01(a) of the Agreement for the fiscal year of the Borrower ended as of the above date, together with the report and opinion of an independent certified public accountant required by such section.

 

2.             The Borrower has delivered the year-end unaudited financial statements of each of NEJD SPE 2 and FS SPE 2 required by Section 5.01(c)(i).  Such financial statements fairly present in all material respects the financial condition and results of operations of NEJD SPE 2 and FS SPE 2 in accordance with GAAP consistently applied as at such date and for such period, subject only to normal year-end audit adjustments and the absence of footnotes.

 

[Use following paragraph 1 for fiscal quarter-end financial statements]

1.             The Borrower has delivered the unaudited financial statements required by Section 5.01(b)(i) of the Agreement for the fiscal quarter of the Borrower ended as of the above date.  Such financial statements fairly present in all material respects the financial condition and results of operations of the Borrower and its consolidated Subsidiaries in accordance with GAAP consistently applied as at such date and for such period, subject only to normal year-end audit adjustments and the absence of footnotes.

1 The financial statement certifications certified herein are intended to be reflective of the certifications required under Section 5.01(a), 5.01(b) and 5.01(c) of the Credit Agreement.   The financial covenant calculations included herein are intended to reflect the components of the financial covenants set forth in Section 6.15.   In the event of any conflict or inconsistency between the applicable terms and conditions of the Credit Agreement, on the one hand, and the financial statement certifications and/or financial covenant calculations reflected in this Exhibit J, on the other hand, the terms and conditions of the Credit Agreement shall control.

  

1

  

2.             The Borrower has delivered the unaudited financial statements required by Section 5.01(b)(ii) of the Agreement for the fiscal quarter ended as of the above date.

 

3.             The Borrower has delivered the unaudited financial statements of each of NEJD SPE 2 and FS SPE 2 required by Section 5.01(c)(ii) of the Agreement for the fiscal quarter ended as of the above date.  Such financial statements fairly present in all material respects the financial condition and results of operations of NEJD SPE 2 and FS SPE 2 in accordance with GAAP consistently applied as at such date and for such period, subject only to normal year-end audit adjustments and the absence of footnotes.

 

[3/4].       The undersigned has reviewed and is familiar with the terms of the Agreement and has made, or has caused to be made under his/her supervision, a detailed review of the transactions and condition (financial or otherwise) of the Borrower during the accounting period covered by such financial statements.

 

[4/5].       A review of the activities of the Borrower during such fiscal period has been made under the supervision of the undersigned with a view to determining whether during such fiscal period the Borrower performed and observed all its obligations under the Loan Documents, and

 

[select one:]

 

[during such fiscal period, the Borrower performed and observed each covenant and condition of the Loan Documents applicable to it, and no Default has occurred and is continuing.]

 

--or--

 

[during such fiscal period the following covenants or conditions have not been performed or observed and the following is a list of each such Default and its nature and status:]

 

[5/6].       The financial covenant analyses and information set forth on Schedules 2 and 3 attached hereto are true and accurate on and as of the date of this Certificate.

 

[6/7].       [No change in GAAP or in the application thereof has occurred since the date of the audited financial statements referred to in Section 3.04 of the Agreement]

 

--or--

 

[The following changes in GAAP or in the application thereof have occurred since the date of the audited financial statements referred to in Section 3.04 of the Agreement and such changes have had the following effects on the financial statements accompanying this Compliance Certificate:]

 

Form of Compliance Certificate

  

J-2

  

IN WITNESS WHEREOF, the undersigned has executed this Compliance Certificate as of _____________________, ______.

 

	  	
GENESIS ENERGY, L.P.

	  	
By:  

	
GENESIS ENERGY, LLC, its general partner

	  	  	  	  
	  	  	  	  
	  	  	
By:    

	  
	  	  	  	
Name:

	  	  	  	
Title:

  

 

  

[Exhibit J – Form of Compliance Certificate]

For the Quarter/Year ended ___________________("Statement Date")

SCHEDULE 2

to the Compliance Certificate

($ in 000's)

	
I.

	
Interest Coverage Ratio.

	
A.

	  	
Adjusted Consolidated EBITDA (Schedule 3) for the four consecutive fiscal quarter period ending on the date hereof:

	  	
$___________

	
B.

	  	
Consolidated Interest Expense for such period:

	  	
$___________

	
C.

	  	
Consolidated Interest Coverage Ratio (Line I.A  ̧ Line I.B):

	  	
______ to 1.00

 

Minimum required:

 

	  	
Minimum Interest Coverage Ratio

	  	
3.00 to 1.002

2 After the consummation of a Notes Offering and upon the consummation of a Material Acquisition that is a Permitted Acquisition or the CHOPS Joint Venture Investment, the minimum Consolidated Interest Coverage Ratio shall be 2.75 to 1.00 until the end of the last day of the third full fiscal quarter of the Borrower after the consummation of such Material Acquisition or the CHOPS Joint Venture Investment, as applicable, at which time the minimum Consolidated Interest Coverage Ratio permitted to be maintained by the Borrower will automatically revert back to 3.00 to 1.00.

  

 

  

[Exhibit J – Form of Compliance Certificate]

	
II.

	
Leverage Ratios.

	  	  	
Consolidated Leverage Ratio

	
A.

	  	
Consolidated Total Funded Debt on such determination date:

	  	
$___________

	
B.

	  	
Adjusted Consolidated EBITDA (Schedule 3) for the four consecutive fiscal quarter period ending on the date hereof:

	  	
$___________

	
C.

	  	
Consolidated Leverage Ratio (Line II.A  ̧ Line II.B):

	  	
______ to 1.00

 

Maximum permitted:

 

	 	
Maximum Consolidated Leverage Ratio

	
Prior to the consummation of a Notes Offering:

	
 4.50 to 1.00

	
Upon or after the consummation of a Notes Offering:

	
5.00 to 1.003

	  	  	
Consolidated Senior Secured Leverage Ratio

	
A.

	  	
Consolidated Total Senior Secured Funded Debt on such determination date:

	  	
$___________

	
B.

	  	
Adjusted Consolidated EBITDA (Schedule 3) for the four consecutive fiscal quarter period ending on the date hereof:

	  	
$___________

	
C.

	  	
Consolidated Senior Secured Leverage Ratio (Line II.A  ̧ Line II.B):

	  	
 ______ to 1.00

 

Maximum permitted:

 

	  	
Maximum Consolidated Senior Leverage Ratio

	
After the consummation of a Notes Offering:

	
3.75 to 1.004

3 After the consummation of a Notes Offering and upon the consummation of a Material Acquisition that is a Permitted Acquisition or the CHOPS Joint Venture Investment, the maximum Consolidated Leverage Ratio shall be 5.50 to 1.00 until the end of the last day of the third full fiscal quarter of the Borrower after the consummation of such Material Acquisition or the CHOPS Joint Venture Investment, as applicable, at which time the maximum Consolidated Leverage Ratio permitted to be maintained by the Borrower will automatically revert back to 5.00 to 1.00.

 

4 Upon the consummation of a Material Acquisition that is a Permitted Acquisition or the CHOPS Joint Venture Investment, the maximum Consolidated Senior Secured Leverage Ratio shall be 4.25 to 1.00 until the end of the last day of the third full fiscal quarter of the Borrower after the consummation of such Material Acquisition or the CHOPS Joint Venture Investment, as applicable, at which time the maximum Consolidated Senior Secured Leverage Ratio permitted to be maintained by the Borrower will automatically revert back to 3.75 to 1.00.

  

 

  

[Exhibit J – Form of Compliance Certificate]

For the Quarter/Year ended ___________________("Statement Date")

SCHEDULE 3

to the Compliance Certificate

($ in 000's)

	
 

	
 

	
Quarter Ended

	
Quarter Ended

	
Quarter Ended

	
Quarter Ended

	
Four Fiscal Quarter Period Ended

	
 

	
Consolidated Net Income of the Borrower and its Subsidiaries1

	
-

	
-

	
-

	
-

	
-

	
+

	
Interest Expense

	
-

	
-

	
-

	
-

	
-

	
+

	
Federal, state, local income and foreign withholding taxes

	
-

	
-

	
-

	
-

	
-

	
+

	
Depreciation, depletion and amortization expense

	
-

	
-

	
-

	
-

	
-

	
+

	
Deferred or non-cash equity compensation or stock option or similar compensation expense

	  	  	  	  	  
	
-

	
Actual cash payments made with respect to deferred compensation

	  	  	  	  	  
	
+

	
Cash received by the Borrower or any Restricted Subsidiary pursuant to any Direct Financing Lease

	  	  	  	  	  
	
+

	
[Up to $5,400,000 in unusual items charged as expense in the first fiscal quarter of fiscal 2010]2

	  	  	  	  	  
	
+

	
Transaction Costs3

	
-

	
-

	
-

	
-

	
-

	
=

	
Consolidated EBITDA before cash distributions

	  	  	  	  	  
	
+

	
Cash distributions from Unrestricted Subsidiaries4

	  	  	  	  	  
	
+

	
Cash distributions from Joint Ventures or the Equity Interests of other Persons

	  	  	  	  	  
	
=

	
Consolidated EBITDA

	  	  	  	  	  
	
+

	
Pro Forma Adjustments (other than Non-Historical Pro Forma Adjustments and Material Project EBITDA Adjustments)

	  	  	  	  	  
	
+

	
Non-Historical Pro Forma Adjustments, as applicable

	  	  	  	  	  
	
+

	
Material Project EBITDA Adjustments, as applicable

	  	  	  	  	  
	
=

	
(Preliminary) Adjusted Consolidated EBITDA

	  	  	  	  	  
	
-

	
Cash distributions from Joint Ventures (other than CHOPS Joint Venture) in excess of 25% of (Preliminary) Adjusted Consolidated EBITDA5

	  	  	  	  	  
	
=

	
Adjusted Consolidated EBITDA

	
-

	
-

	
-

	
-

	
-

5 Determined without giving effect to (without duplication): (a) any extraordinary income or gains, (b) any interest income, (c) any non-cash income (excluding items which represent the reversal of a non-cash charge referred to in clause (e) below of this definition), (d) any extraordinary losses, (e) any non-cash charges or losses (except to the extent that any such non-cash charge or loss would require an anticipated cash payment (or a reserve for an anticipated cash payment) in any future period), including any non-cash expenses relating to impairments and similar write-offs and stock appreciation rights, (f) any gains or losses from sales of assets other than inventory sold in the ordinary course of business, (g) income or losses attributable to Unrestricted Subsidiaries, Joint Ventures, any Person accounted for by the Borrower by the equity method of accounting, or any other Person that is not a Subsidiary or (h) income or losses attributable to Direct Financing Leases.

 

6 Added back to the 2010 first fiscal quarter.  Only applicable to the Consolidated EBITDA calculations for the four fiscal quarter periods ending September 30, 2010 and December 31, 2010.

 

7 Transaction Costs to be added back during the term of the Agreement under this line item shall not exceed 15% of Adjusted Consolidated EBITDA for the four fiscal quarter period ending September 30, 2010 (as adjusted on a Pro Forma Basis to reflect the CHOPS Joint Venture Investment).

 

8 Including loan payments under the NEJD Intercompany Note.

 

9 Cash distributions received by the Borrower and the Restricted Subsidiaries from all Joint Ventures consummated after the Effective Date (other than the CHOPS Joint Venture) shall not account for more than 25% of Adjusted Consolidated EBITDA (as such Adjusted Consolidated EBITDA is calculated from time to time without giving effect to cash distributions from Joint Ventures consummated after the Effective Date (but giving effect to cash distributions from the CHOPS Joint Venture whether consummated before or after the Effective Date)), and any excess shall be deemed to not be Adjusted Consolidated EBITDA. 

 

 

[Exhibit J – Form of Compliance Certificate]ex10_1.htm

Exhibit 10.1

 

SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN AGREEMENT

THIS AGREEMENT is made and entered into this 19th day of November, 2010, by and among Embassy Bank for the Lehigh Valley (hereinafter referred to as the "Bank"), a bank organized and existing under the laws of Pennsylvania, and David M. Lobach, Jr. (hereinafter referred to as the "Employee").

WHEREAS, the Employee has performed his duties in an efficient and capable manner; and

WHEREAS, the Bank is desirous of retaining the services of the Employee; and

WHEREAS, the Board of Directors of the Bank has approved the adoption of a Supplemental Executive Retirement Plan as described in this Agreement (the “Plan”); and

WHEREAS, the Employee has been selected to participate in the Plan; and

WHEREAS, the Bank and the Employee have been parties to a Supplemental Benefit Plan Agreement dated January 5, 2009 (the “Original Agreement”), which provides for a “Normal Retirement Age” of sixty-five (65); and

WHEREAS, the Bank desires to provide Employee with supplemental benefits in addition to those provided in the Original Agreement, on the terms and conditions set forth herein.

NOW, THEREFORE, for value received and in consideration of the mutual covenants contained herein, the parties agree as follows:

1.             Normal Retirement Supplemental Pension

a.           The Bank hereby agrees with the Employee that the Employee may retire upon attaining age seventy (70), such age hereinafter being called the “Normal Retirement Age.”

b.           Upon the Employee’s retirement on or after Normal Retirement Age, the Bank shall pay the Employee a supplemental annual pension equal to $50,000, such amount being referred to herein as the “Normal Retirement Supplemental Pension,” payable in equal monthly installments and continuing for a period of fifteen (15) years.

2.             Early Retirement or Termination

a.           If the Employee retires or his or her employment with the Bank is otherwise terminated subsequent to attaining age sixty-five (65), but prior to attaining Normal Retirement Age, then the Bank shall pay the Employee a supplemental annual pension in the amount indicated on the following schedule, payable in equal monthly installments and continuing for a period of fifteen (15) years:

  

  

  

 

	
Age of Employee on 

Effective Date of Early 

Retirement or Termination

	
% of Normal 

Retirement 

Supplemental Pension

	
65

	
50%

	
66

	
60%

	
67

	
70%

	
68

	
80%

	
69

	
90%

	
70

	
100%

 

3.             Death or Disability

a.           Upon the death of the Employee while actively employed, the Bank shall pay to the Employee’s designated beneficiary the Normal Retirement Supplemental Pension, payable in equal monthly installments commencing on the first business day of the month following the month in which the Employee dies and continuing for a period of fifteen (15) years.

b.           Upon the death of the Employee while receiving any supplemental pension benefits as provided in this Agreement, the Bank shall pay to the Employee’s designated beneficiary the remaining payments which would have otherwise been due the Employee.

c.           If the Employee becomes permanently “disabled” within the meaning of Section 409A of the Internal Revenue Code of 1986, as amended, and the regulations promulgated thereunder, and ceases employment with the Bank as a result of such disability, the Employee will be treated as actively employed, for purposes of this Agreement, while such disability continues.  In such event, the Bank shall pay to the Employee the Normal Retirement Supplemental Pension in equal monthly installments commencing upon the Employee’s attainment of Normal Retirement Age and continuing for a period of fifteen (15) years.

d.           If the Employee shall have failed to make an effective designation of beneficiary, or if the individual or individuals so designated shall die prior to receiving all payments required to made to them hereunder and there is no designated alternate beneficiary, then in such event the remaining payments shall be made first to the Employee’s surviving spouse, second the Employee’s surviving children, equally per stirpes if there is no surviving spouse, and finally to the estate of the Employee if there are neither a surviving spouse nor surviving children.

4.             Assignment

Except as otherwise provided herein, it is understood that neither the Employee, nor any person designated by him pursuant to this Agreement, shall have any right to commute, sell, assign, transfer or otherwise convey the right to receive payments to be made hereunder, which payments and the right thereto are expressly declared to be non-assignable and non-transferable.  If such assignment or transfer is attempted, the Bank may disregard it and continue to discharge its obligations hereunder as though such assignment or transfer were not attempted.

  

  

  

 

5.             Independent Arrangement

The benefits payable under this Agreement shall be independent of, and in addition to, any other agreement which may exist from time to time between the parties hereto, or any other compensation payable by the Employee’s employer.  This Agreement shall not be deemed to constitute a contract of employment between the parties hereto, nor shall any provisions hereof restrict the right of the Employee’s employer to discharge the Employee or restrict the right of the Employee to terminate his or her employment.

6.             Non-Trust or Fiduciary Obligation

a.           The rights of the Employee under this Agreement and of any beneficiary of the Employee or of any other person who may acquire such rights shall be solely those of an unsecured creditor of the Bank.  Any insurance policy on the life of the Employee or any other asset acquired by the Bank in connection with the obligations assumed by it hereunder shall not be deemed to be held under any trust for the benefit of the Employee or his or her beneficiaries or to be security for the performance of the obligations of the Bank, but shall be, and remain, a general, unpledged, unrestricted asset of the Bank.

b.           Nothing contained in the Agreement and no action taken pursuant to the provisions of the Agreement shall create or be construed to create a trust of any kind, or a fiduciary relationship between the Bank and the Employee or his or her beneficiaries.

7.             Change of Control

a.           If the Employee’s employment with the Bank is involuntarily terminated within two years after a “Change in Control” (as defined below) of the Employee’s employer, payment hereunder will commence immediately in an amount equal to the amount which would have been payable as though Employee retired from service with the Bank upon attaining Normal Retirement Age.

b.           As used herein, the term “Change of Control” shall mean a change in the ownership or effective control applicable to the Bank or Embassy Bancorp, Inc., as described in Section 409A(a)(2)(A)(v) of the Internal Revenue Code of 1986, as amended.

8.             Arbitration

a.           Any controversy or claim arising out of or relating to this Agreement shall be settled by arbitration in accordance with Rules of the American Arbitration Association, and judgment upon the award rendered by an arbitrator may be entered in any court having jurisdiction thereof.

  

  

  

 

b.           The parties hereby submit themselves and consent to the jurisdiction of the Courts of the Commonwealth of Pennsylvania and further consent that any process or notice of motion, or other application of the Court, or any Judge thereof, may be served outside the Commonwealth of Pennsylvania by certified mail or by personal service provided that a reasonable time for appearance is allowed.  The arbitrators in any such controversy shall have no authority or power to modify or alter any express condition or provision of this Agreement or to render an award which has the effect of altering or modifying any express condition or provision hereof.

9.             Miscellaneous Provisions

a.           Notwithstanding anything in this Agreement to the contrary, if Employee is determined to be a “specified employee” (as defined in Section 409A of the Internal Revenue Code of 1986, as amended), payments to such Employee pursuant to this Agreement, other than payments qualifying as short term deferrals or an exempt separation pay arrangement under Section 409A, shall not begin earlier than the first day of the seventh month after the date of termination.   The Corporation agrees to cause any and all amounts due under this Agreement, the payment or distribution of which is delayed pursuant to this Section 9(a) in accordance with Section 409A, to be paid or distributed in a single sum payment at the earliest permissible date under Section 409A.

 

For purposes of the foregoing, the date upon which a determination is made as to the Specified Employee status of the Employee, the “identification date” (as defined in Section 409A) shall be December 31.

b.           This Agreement shall be binding upon and inure to the benefit of any successor of the Bank and any such successor shall be deemed substituted for the Bank under the terms of this Agreement.

c.           This instrument contains the entire Agreement of the parties.  It may be amended only by a writing signed by both of the parties hereto.  This Agreement is not intended to terminate, amend, restate or otherwise affect, in any manner whatsoever, the Original Agreement between the parties.

d.           This Agreement shall be governed and construed in accordance with the law of the Commonwealth of Pennsylvania.

e.           The Corporation intends in good faith that this plan comply with Section 409A of the Internal Revenue Code of 1986, as amended.  To the extent any provision of this Agreement is deemed inconsistent with that section, said provision in hereby expunged and the Agreement shall be deemed amended to comply with said law and the Bank shall take such steps as to amend the Agreement so that it complies in form with Section 409A.

  

  

  

 

IN WITNESS WHEREOF, the parties have hereunto set their hands and seals, the Bank by it duly authorized officer, on the day and year first above written.               

 

	 WITNESS:   	 	EMPLOYEE:
	 	 	 
	 	 	 
	
/s/ Lynne M. Neel

	 	
/s/ David M. Lobach, Jr.

	  	 	
David M. Lobach, Jr.

	  	 	  
	  	 	  
	
ATTEST:

	 	
EMBASSY BANK FOR THE LEHIGH VALLEY

	  	 	  
	  	 	  
	
/s/ Lynne M. Neel

	 	
By: /s Judith A Hunsicker

	  	 	
Name: Judith A Hunsicker

	  	 	
Title: COO/SEVP

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