1
Exhibit 10(c)
================================================================================
FORM OF
SECOND AMENDED AND RESTATED
GUARANTY AGREEMENT
dated as of August 17, 2000
between
THE WILLIAMS COMPANIES, INC.
and
STATE STREET BANK AND TRUST COMPANY
OF CONNECTICUT, NATIONAL ASSOCIATION,
in its individual capacity as its interests may
appear in the Operative Documents, but otherwise
not in its individual capacity
but solely as Trustee
and
STATE STREET BANK AND TRUST COMPANY,
not in its individual capacity,
but solely as Collateral Agent
and
CITIBANK, N.A.,
as Agent,
and
CITIBANK, N.A.,
as APA Agent
================================================================================
2
TABLE OF CONTENTS
Page
----
ARTICLE I DEFINITIONS; RULES OF CONSTRUCTION............................................................2
Section 1.01 Definitions.......................................................................2
Section 1.02 Computation of Time Periods......................................................10
Section 1.03 Accounting Terms.................................................................10
Section 1.04 Use of Certain Terms.............................................................10
Section 1.05 Headings and References..........................................................10
ARTICLE II GUARANTY AND PAYMENT........................................................................11
Section 2.01 Guaranty.........................................................................11
ARTICLE III REPRESENTATIONS AND WARRANTIES.............................................................12
Section 3.01 Representations and Warranties of the Guarantor..................................12
Section 3.02 Satisfaction of Conditions Under Participation Agreement.........................15
ARTICLE IV COVENANTS OF THE GUARANTOR..................................................................15
Section 4.01 Affirmative Covenants............................................................15
Section 4.02 Negative Covenants...............................................................19
ARTICLE V REMEDIES.....................................................................................22
Section 5.01 Remedies.........................................................................22
ARTICLE VI NATURE OF AGREEMENT.........................................................................22
Section 6.01 Nature of Guaranty...............................................................22
Section 6.02 Survival.........................................................................23
Section 6.03 Waivers..........................................................................23
Section 6.04 The Guarantor's Obligations Unconditional........................................23
ARTICLE VII BANKRUPTCY.................................................................................26
Section 7.01 No Subrogation...................................................................26
Section 7.02 Reinstatement....................................................................26
Section 7.03 Non-Discharged Obligations.......................................................27
ARTICLE VIII MISCELLANEOUS.............................................................................27
Section 8.01 Notices..........................................................................27
Section 8.02 Immunity.........................................................................27
Section 8.03 Non-Exclusive Remedies...........................................................27
Section 8.04 Amendments and Waivers...........................................................28
Section 8.05 Severability.....................................................................28
Section 8.06 Further Assurances...............................................................28
Section 8.07 Governing Law and Submission to Jurisdiction.....................................28
Section 8.08 Time.............................................................................29
Section 8.09 Benefit..........................................................................29
Section 8.10 Entire Agreement.................................................................29
Section 8.11 Counterparts.....................................................................30
i
3
Page
----
Section 8.12 Reliance..............................................30
Section 8.13 Survival of Indemnities...............................30
Section 8.14 APA...................................................30
Schedule I Permitted Liens
Exhibit A Existing Loans and Investments of WCG Subsidiaries
ii
4
SECOND AMENDED AND RESTATED GUARANTY AGREEMENT
SECOND AMENDED AND RESTATED GUARANTY AGREEMENT, dated as of August 17,
2000 by and between The Williams Companies, Inc., a Delaware corporation,
successor in interest by merger dated July 31, 1999 to Williams Holdings of
Delaware, Inc. (the "Guarantor"), State Street Bank and Trust Company of
Connecticut, National Association, a national banking association, in its
individual capacity as its interests may appear in the Operative Documents (as
defined below), but otherwise not in its individual capacity but solely as
Trustee (the "Trustee"), State Street Bank and Trust Company, not in its
individual capacity, but solely as collateral agent for the Purchasers (as
defined below) (the "Collateral Agent"), and Citibank, N.A., a national banking
association as agent for the Purchasers (the "Agent"), and Citibank, N.A., a
national banking association as agent for CXC (as defined below) and the APA
Purchasers (as defined below) (the "APA Agent").
Preliminary Statement
A. On the Original Initial Funding Date, as contemplated by the
Original Participation Agreement, the Guarantor executed a Guaranty in favor of
the Trustee, the Collateral Agent and the Agent for their benefit and for the
benefit of the Original Note Holders and Original Certificate Holders (the
"Original Guaranty"). In connection with amending and restating the May
Participation Agreement (as defined below), the Guarantor amended and restated
the Original Guaranty.
B. On the Initial Funding Date, as contemplated in the Participation
Agreement, the Guarantor executed the Amended and Restated Guaranty Agreement
(the "Amended Guaranty") as an inducement for (i) the Trustee, the Collateral
Agent and the Agent to enter into the transactions contemplated by the Operative
Documents, (ii) the Note Holders to purchase the Interim Notes, (iii) the
Certificate Holders to make Investments, (iv) CXC to make CXC Advances to the
SPV under the Finance Facility and (v) CXC, the SPV, the APA Agent, the APA
Purchasers and CNAI and Citicorp North America, Inc., as agent for CXC and the
APA Purchasers with respect to the Residual Credit Enhancement (as defined in
the APA) to enter into the APA, all of which the Trustee, the Collateral Agent,
the Agent, the Note Holders, the Certificate Holders, the APA Agent, CXC and the
APA Purchasers would have been unwilling to do if the Guarantor did not execute
and deliver the Amended Guaranty.
C. The Guarantor intends this Guaranty to amend and restate the Amended
Guaranty to reflect certain terms set forth in the Credit Agreement (as defined
below).
In consideration of the mutual covenants and agreements set forth
herein and intending to be legally bound by this Agreement, the Guarantor, the
Trustee, the Collateral Agent, the Agent and the APA Agent hereby agree as
follows:
5
ARTICLE I
DEFINITIONS; RULES OF CONSTRUCTION
Section 1.01 Definitions. As used in this Agreement, terms defined in
the preceding paragraphs or in other sections of this Agreement shall have the
meanings specified therein, the terms defined in Appendix A to the Participation
Agreement (as defined below), and not otherwise defined herein, shall have the
meanings set forth therein, and the following terms shall have the meanings set
forth below:
"Agreement" means this Second Amended and Restated Guaranty Agreement.
"American Soda" means American Soda, L.L.P., a Colorado limited
liability partnership.
"Bank" means the lenders listed on the signature pages of the Credit
Agreement and each other Person that becomes a Bank pursuant to the last
sentence of Section 8.06(a) of the Credit Agreement.
"Cash Holdings" of any Person means the total investment of such Person
at the time of determination in:
(a) demand deposits and time deposits maturing within one year
with a Bank (or other commercial banking institution of the stature
referred to in clause (d)(i));
(b) any note or other evidence of indebtedness, maturing not
more than one year after such time, issued or guaranteed by the United
States Government or by a government of another country which carries a
long-term rating of Aaa by Moody's or AAA by S & P;
(c) commercial paper maturing not more than nine months from
the date of issue, which is issued by:
(i) a corporation (other than an affiliate of the
Guarantor) rated (x) A-1 by S&P, P-1 by Moody's or F-1 by
Fitch or (y) lower than set forth in clause (x) above,
provided that the value of all such commercial paper shall not
exceed 10% of the total value of all commercial paper
comprising "Cash Holdings;" or
(ii) any Bank (or its holding company) with a rating
on its long-term unsecured debt of at least AA by S&P or Aa by
Moody's;
(d) any certificate of deposit or bankers acceptance, maturing
not more than three years after such time, which is issued by either:
2
6
(i) a commercial banking institution that is a member
of the Federal Reserve System and has a combined capital and
surplus and undivided profits of not less than $1,000,000,000;
or
(ii) any Bank with a rating on its long-term
unsecured debt of at least AA by S&P or Aa by Moody's;
(e) notes or other evidences of indebtedness, maturing not
more than three years after such time, issued by:
(i) a corporation (other than an affiliate of the
Guarantor) rated AA by S&P or Aa by Moody's; or
(ii) any Bank (or its holding company) with a rating
on its long-term unsecured debt of at least AA by S&P or Aa by
Moody's;
(f) any repurchase agreement entered into with any Bank (or
other commercial banking institution of the stature referred to in
clause (d)(i)) which:
(i) is secured by a fully perfected security interest
in any obligation of the type described in any of clauses (a)
through (d); and
(ii) has a market value at the time such repurchase
agreement is entered into of not less than 100% of the
repurchase obligation of such Bank (or other commercial
banking institution) thereunder; and
(g) money market preferred instruments by participation in a
Dutch auction (or the equivalent) where the investment is rated no
lower than Aa by Moody's or AA by S&P.
"Consolidated" refers to the consolidation of the accounts of any
Person and its Subsidiaries in accordance with GAAP; provided that, unless
otherwise provided, in the case of the Guarantor, "Consolidated" shall mean the
consolidation of the accounts of the Guarantor and its Subsidiaries and shall
not include any accounts of the WCG Subsidiaries; provided that for purposes of
the Consolidated financial statements required to be delivered pursuant to
Sections 3.01(e), 4.01(b)(ii) and 4.01(b)(iii) and where otherwise provided, the
consolidation of the accounts of the Guarantor and its Subsidiaries shall
include the WCG Subsidiaries.
"Consolidated Net Worth" of any Person means the Net Worth of such
Person and its Subsidiaries on a Consolidated basis plus, in the case of the
Guarantor, the Designated Minority Interests to the extent not otherwise
included; provided that, in no event shall the value ascribed to Designated
Minority Interests exceed $136,892,000 in the aggregate.
"Consolidating" refers to, with respect to the balance sheets and
statements of income and cash flows required by Sections 3.01(e), 4.01(b)(ii)
and 4.01(b)(iii), the consolidation of the accounts of the Guarantor and its
Subsidiaries in
3
7
accordance with the following format: (i) the WCG Subsidiaries, (ii) the
Guarantor and its Subsidiaries (which term does not include the WCG
Subsidiaries), (iii) consolidation adjustments, and (iv) Consolidated financial
statements of the Guarantor and each Subsidiary of the Guarantor, including the
WCG Subsidiaries.
"Credit Agreement" means the Credit Agreement dated as of July 25, 2000
among The Williams Companies, Inc., Northwest Pipeline Corporation,
Transcontinental Gas Pipe Line Corporation, Texas Gas Transmission Corporation,
as Borrowers, the Banks named therein, as Banks, and Citibank, N.A., as Agent,
as in effect on the date of this Agreement.
"Debt" means, in the case of any Person, (i) indebtedness of such
Person for borrowed money, (ii) obligations of such Person evidenced by bonds,
debentures or notes, (iii) obligations of such Person to pay the deferred
purchase price of property or services (other than trade payables not overdue by
more than 60 days incurred in the ordinary course of business), (iv) monetary
obligations of such Person as lessee under leases that are, in accordance with
GAAP, recorded as capital leases, (v) obligations of such Person under
guaranties in respect of, and obligations (contingent or otherwise) to purchase
or otherwise acquire, or otherwise to assure a creditor against loss in respect
of, indebtedness or obligations of others of the kinds referred to in clauses
(i) through (iv) of this definition, and (vi) indebtedness or obligations of
others of the kinds referred to in clauses (i) through (v) of this definition
secured by any Lien on or in respect of any property of such Person; provided,
however, that Debt shall not include any obligation under or resulting from any
agreement referred to in paragraph (y) of Schedule I or resulting from any sale
and leaseback referred to in paragraph (aa) of Schedule I; and provided further,
it is the understanding of the parties hereto that Debt shall not include any
monetary obligations of Persons as lessee under leases that are in accordance
with GAAP, recorded as operating leases.
"Designated Minority Interests" of the Guarantor means, as of any date
of determination, the total of the minority interests in the following
Subsidiaries of the Guarantor: (i) El Furrial, (ii) PIGAP II, (iii) Nebraska
Energy, (iv) Seminole, (v) American Soda, and (vi) other Subsidiaries of the
Guarantor, as presented in its Consolidating balance sheet, in an amount not to
exceed in the aggregate $9,000,000 for such other Subsidiaries not referred to
in clauses (i) through (v); provided that minority interests which provide for a
stated preferred cumulative return shall not be included in "Designated Minority
Interests."
"EDGAR" means "Electronic Data Gathering, Analysis and Retrieval"
system, a database maintained by the Securities and Exchange Commission
containing electronic filings of issues of certain securities.
"El Furrial" means WilPro Energy Services (El Furrial) Limited, a
Cayman Islands corporation.
"Environmental Protection Statutes" means any United States local,
state of federal or any foreign Law or agreement arising from or in connection
with or relating
4
8
to the protection or regulation of the environment (as defined in 42 U.S.C.
ss.9601(8) as of the date of the Credit Agreement), including, those Laws or
agreements relating to the disposal, cleanup, production, storing, refining,
handling, transferring, processing or transporting of Hazardous Waste, Hazardous
Substances or any pollutant or contaminant, wherever located.
"Fitch" means Fitch, Inc.
"Guaranteed Instruments" means:
(i) If the Lessee shall have delivered an Offer to Purchase
pursuant to the Lease or the Lessor shall have delivered a Termination
Notice pursuant to the Lease, then the "Guaranteed Instruments" shall
be all the Instruments;
(ii) If the Lessee has not delivered an Offer to Purchase and
the Lessor has not delivered a Termination Notice, then (A) if no Event
of Default has occurred and is continuing at such time, the "Guaranteed
Instruments" shall be the A-Notes and B-Notes, to the extent of the
Residual Value Amount; (B) if an Event of Default under Section 6.01(p)
or 6.01(q)(i) of the Participation Agreement has occurred and is
continuing at such time, the "Guaranteed Instruments" shall be the
A-Notes and B-Notes, to the extent of the Residual Value Amount; (C) on
or after the Completion Date, if an Event of Default (other than under
Section 6.01(p) or 6.01(q)(i) of the Participation Agreement or an
Event of Default relating to fraud, misapplication of funds, illegal
acts, or willful misconduct on the part of the Lessee) has occurred and
is continuing at such time, the "Guaranteed Instruments" shall be the
A-Notes and B-Notes; (D) prior to the Completion Date, if an Event of
Default (other than under Section 6.01(g) or 6.01(h) of the
Participation Agreement or an Event of Default relating to fraud,
misapplication of funds, illegal acts, or willful misconduct on the
part of the Lessee) has occurred and is continuing at such time, the
"Guaranteed Instruments" shall be the A-Notes and B-Notes, to the
extent of the Residual Value Amount; and (E) prior to the Completion
Date, if an Event of Default under Section 6.01(g) or 6.01(h) of the
Participation Agreement has occurred and is continuing at such time, or
to the extent of any claims brought by the Lessor relating to fraud,
misapplication of funds, illegal acts, or willful misconduct on the
part of the Lessee, the "Guaranteed Instruments" shall be the A-Notes
and the B-Notes.
"Guaranteed Obligations" means, collectively the obligations described
in clauses (i) through (v) of Section 2.01(a), in each case, whether arising
under the Operative Documents referred to in the May Participation Agreement or
under the Operative Documents referred to in the Participation Agreement.
"Guaranteed Parties" means each of the Agent, the Trustee, the
Collateral Agent, the APA Agent, the Purchasers, the APA Purchasers, CXC and
CXC's Credit Enhancer.
5
9
"Guaranty Default" means any one or more of the following events or
conditions occurs or exists:
(a) the Guarantor shall fail to pay, satisfy and perform the
Guaranteed Obligations pursuant to Section 2.01 (after the passage of
any applicable grace or cure period with respect thereto under the
Operative Documents); or
(b) any certification, representation or warranty made by the
Guarantor herein or by the Guarantor (or any officer of the Guarantor)
in writing under or in connection with this Agreement or under any
other Operative Document (including, without limitation,
representations and warranties made or deemed made pursuant to Section
3.01 or 3.02) shall prove to have been incorrect in any material
respect when made or deemed made; or
(c) the Guarantor shall fail to perform or observe (i) any
term, covenant or agreement contained in Section 4.01(b) on its part to
be performed or observed and such failure shall continue for ten
Business Days after the earlier of the date notice thereof shall have
been given to the Guarantor by the Agent or any Bank or the date the
Guarantor shall have knowledge of such failure, or (ii) any term,
covenant or agreement contained in this Agreement (other than a term,
covenant or agreement contained in Section 4.01(b) or 2.01) or in any
other Operative Document or on its part to be performed or observed and
such failure shall continue for five Business Days after the earlier of
the date notice thereof shall have been given to the Guarantor by the
Agent or any Purchaser or the date the Guarantor shall have knowledge
of such failure; or
(d) the Guarantor or any Subsidiary of the Guarantor shall
fail to pay any principal of or premium or interest on any Debt which
is outstanding in a principal amount of at least $60,000,000 in the
aggregate of the Guarantor or such Subsidiary (as the case may be),
when the same becomes due and payable (whether by scheduled maturity,
required prepayment, acceleration, demand or otherwise), and such
failure shall continue after the applicable grace period, if any,
specified in the agreement or instrument relating to such Debt; or any
other event shall occur or condition shall exist under any agreement or
instrument relating to any such Debt and shall continue after the
applicable grace period, if any, specified in such agreement or
instrument, if the effect of such event or condition is to accelerate,
or to permit the acceleration of, the maturity of such Debt; or any
such Debt shall be declared to be due and payable, or required to be
prepaid (other than by a regularly scheduled required prepayment or as
required pursuant to an illegality event of the type set forth in
Section 2.12 of the Credit Agreement), prior to the stated maturity
thereof; provided, however, that the provisions of this subsection (d)
shall not apply to any Non-Recourse Debt of any Non-Borrowing
Subsidiary (as defined in the Credit Agreement) of the Guarantor under
the Credit Agreement; or
(e) the Guarantor or any Material Subsidiary of the Guarantor
shall generally not pay its debts as such debts become due, or shall
admit in writing its
6
10
inability to pay its debts generally, or shall make a general
assignment for the benefit of creditors; or any proceeding shall be
instituted by or against the Guarantor or any Material Subsidiary of
the Guarantor seeking to adjudicate it a bankrupt or insolvent, or
seeking liquidation, winding up, reorganization, arrangement,
adjustment, protection, relief, or composition of it or its debts under
any law relating to bankruptcy, insolvency or reorganization or relief
of debtors, or seeking the entry of an order for relief or the
appointment of a receiver, trustee, or other similar official for it or
for any substantial part of its property and, in the case of any such
proceeding instituted against it (but not instituted by it), shall
remain undismissed or unstayed for a period of 60 days; or the
Guarantor or any Material Subsidiary of the Guarantor shall take any
action to authorize any of the actions set forth above in this
subsection (e); or
(f) any judgment or order for the payment of money in excess
of $60,000,000 shall be rendered against the Guarantor or any Material
Subsidiary of the Guarantor and remain unsatisfied and either (i)
enforcement proceedings shall have been commenced by any creditor upon
such judgment or order or (ii) there shall be any period of 30
consecutive days during which a stay of enforcement of such judgment or
order, by reason of a pending appeal or otherwise, shall not be in
effect; or
(g) any Termination Event with respect to a Plan shall have
occurred and, 30 days after notice thereof shall have been given to the
Guarantor by the Agent, (i) such Termination Event shall still exist
and (ii) the sum (determined as of the date of occurrence of such
Termination Event) of the Insufficiency of such Plan and the
Insufficiency of any and all other Plans with respect to which a
Termination Event shall have occurred and then exist (or in the case of
a Plan with respect to which a Termination Event described in clause
(ii) of the definition of Termination Event shall have occurred and
then exist, the liability related thereto) is equal to or greater than
$75,000,000; or
(h) the Guarantor or any ERISA Affiliate of the Guarantor
shall have been notified by the sponsor of a Multiemployer Plan that it
has incurred Withdrawal Liability to such Multiemployer Plan in an
amount which, when aggregated with all other amounts required to be
paid to Multiemployer Plans in connection with Withdrawal Liabilities
(determined as of the date of such notification), exceeds $75,000,000
in the aggregate or requires payments exceeding $50,000,000 per annum;
or
(i) the Guarantor or any ERISA Affiliate of the Guarantor
shall have been notified by the sponsor of a Multiemployer Plan that
such Multiemployer Plan is in reorganization or is being terminated,
within the meaning of Title IV of ERISA, if as a result of such
reorganization or termination the aggregate annual contributions of the
Guarantor and its ERISA Affiliates to all Multiemployer Plans which are
then in reorganization or being terminated have been or will be
increased over the amounts contributed to such Multiemployer Plans for
the
7
11
respective plan years which include the date hereof by an amount
exceeding $75,000,000;
(j) any Event of Default under the Credit Agreement occurs and
is continuing.
"Hazardous Substance" has the meaning set forth in 42 U.S.C.
ss.9601(14) and shall also include each other substance considered to be a
hazardous substance under any Environmental Protection Statute.
"Hazardous Waste" has the meaning set forth in 42 U.S.C.ss.6903(5) and
shall also include each other substance considered to be a hazardous waste under
any Environmental Protection Statute (including 40 C.F.R.ss.261.3)
"Material Subsidiary" means, with respect to the Guarantor, each
Relevant Subsidiary and each "significant subsidiary" of the Guarantor (or its
Subsidiaries) as such term is defined in Rule 405 under the Securities Act,
excluding the WCG Subsidiaries.
"May Participation Agreement" means the Participation Agreement dated
as of May 6, 1998, as amended, among Williams Communications, Inc., the Trustee,
Citibank N.A. as the Agent and the Collateral Agent, and the financial
institutions named therein as Purchasers, as it may be amended, modified,
restated or supplemented from time to time in accordance with the terms thereof.
"Nebraska Energy" means Nebraska Energy, L.L.C., a Kansas limited
liability company.
"Net Debt" means for any Person, as of any date of determination, the
excess of (x) the aggregate amount of all Debt of such Person and its
Subsidiaries on a Consolidated basis, excluding Non-Recourse Debt, over (y) the
sum of the Cash Holdings of such Person and its Subsidiaries on a Consolidated
basis.
"Net Worth" of any Person means, as of any date of determination, the
excess of total assets of such Person over total liabilities of such Person,
total assets and total liabilities each to be determined in accordance with
GAAP.
"Non-Recourse Debt" means Debt incurred by any non-material,
Non-Borrowing Subsidiary (as defined in the Credit Agreement) to finance the
acquisition (other than any acquisition from the Guarantor or any Subsidiary) or
construction of a project, which Debt does not permit or provide for recourse
against the Guarantor or any Subsidiary of the Guarantor (other than the
Subsidiary that is to acquire or construct such project) or any property or
asset of the Guarantor or any Subsidiary of the Guarantor (other than property
or assets of the Subsidiary that is to acquire or construct such project). For
purposes of this definition, a "non-material Subsidiary" shall mean any
Subsidiary of the Guarantor which, as of the date of the most recent
Consolidating balance sheet of the Guarantor delivered pursuant to Section 4.01
as described in clause (ii) of the definition of "Consolidating," has total
assets which account for less than five percent (5%) of the total assets of the
Guarantor and its Subsidiaries, as shown in the
8
12
column described in clause (ii) of the definition of "Consolidating" of such
Consolidating balance sheet; provided that, the total aggregate assets of
non-material Subsidiaries shall not comprise at any time more than ten percent
(10%) of the total assets of the Guarantor and its Subsidiaries, as shown in
such column of such Consolidating balance sheet.
"Participation Agreement" means the Amended and Restated Participation
Agreement dated as of the date hereof among the Company, the Trustee, the
Persons named therein as Note Holders, Certificate Holders and APA Purchasers,
the Collateral Agent and the Agent.
"Permitted Liens" means, with respect to the Guarantor or any
Subsidiary of the Guarantor, Liens specifically described on Schedule I.
"PIGAP II" means WilPro Energy Services (PIGAP II) Limited, a Cayman
Islands corporation.
"Public Filings" means the Guarantor's Annual Report on Form 10-K/A for
the year ended December 31, 1999 and Quarterly Report on Form 10-Q for the
quarter ended March 31, 2000.
"Related Party" of any Person means any corporation, partnership, joint
venture or other entity of which more than 10% of the outstanding capital stock
or other equity interests having ordinary voting power to elect a majority of
the board of directors of such corporation, partnership, joint venture or other
entity or others performing similar functions (irrespective or whether or not at
the time capital stock or other equity interests of any other class of classes
of such corporation, partnership, joint venture or other entity shall or might
have voting power upon the occurrence of any contingency) is at the time
directly or indirectly owned by such Person or which owns at the time directly
or indirectly more than 10% of the outstanding capital stock or other equity
interests having ordinary voting power to elect a majority of the board of
directors of such Person or others performing similar functions (irrespective or
whether or not at the time capital stock or other equity interests of any other
class or classes of such corporation, partnership, joint venture or other entity
shall or might have voting power upon the occurrence of any contingency);
provided, however, that neither TWC nor any Subsidiary of TWC shall be
considered to be a Related Party of TWC or any Subsidiary of TWC.
"Seminole" means Seminole Pipeline Company, a Delaware corporation.
"Subsidiary" of any Person means any corporation, partnership, joint
venture or other entity of which more than 50% of the outstanding capital stock
or other equity interests having ordinary voting power to elect a majority of
the board of directors of such corporation, partnership, joint venture or other
entity or others performing similar functions (irrespective of whether or not at
the time capital stock or other equity interests of any other class or classes
of such corporation, partnership, joint venture or other entity shall or might
have voting power upon the occurrence of any contingency) is at the time
directly or indirectly owned by such Person. Notwithstanding the above, in the
case of the Guarantor, "Subsidiary" shall not include the WCG Subsidiaries,
except that with
9
13
respect to the Consolidated balance sheet and related Consolidated statements of
income and cash flows for TWC referred to in Section 3.01(e), 4.01(b)(ii) and
4.01(b)(iii) and as otherwise specifically provided herein the term "Subsidiary"
used with respect to the Guarantor shall include the WCG Subsidiaries.
"TWC" means The Williams Companies, Inc., a Delaware corporation.
"WCG" means Williams Communications Group, Inc., a Delaware
corporation.
"WCG Subsidiaries" means, collectively, WCG and any direct or indirect
Subsidiary of WCG.
Section 1.02 Computation of Time Periods. In this Agreement in the
computation of periods of time from a specified date to a later specified date,
the word "from" means "from and including" and the words "to" and "until" means
"to but excluding."
Section 1.03 Accounting Terms. All accounting terms not specifically
defined herein shall be construed in accordance with GAAP applied consistently.
Section 1.04 Use of Certain Terms. Unless the context of this Agreement
requires otherwise, the plural includes the singular, the singular includes the
plural, the part includes the whole, and "including" has the inclusive meaning
of "including without limitation." The words "hereof," "herein," "hereby,"
"hereunder," and other similar terms of this Agreement refer to this Agreement
as a whole and not exclusively to any particular provision of this Agreement.
All pronouns and any variations thereof shall be deemed to refer to masculine,
feminine, or neuter, singular or plural, as the identity of the person or
persons may require.
Section 1.05 Headings and References. Section and other headings are
for reference only, and shall not affect the interpretation or meaning of any
provision of this Agreement. Unless otherwise provided, references to Articles,
Sections, Schedules, and Exhibits shall be deemed references to Articles,
Sections, Schedules, and Exhibits of this Agreement. References to this
Agreement include this Agreement as the same may be modified, amended, restated
or supplemented from time to time pursuant to the provisions hereof. A reference
to any law shall mean that law as it may be amended, modified or supplemented
from time to time, and any successor law and to any applicable rules,
regulations or orders as in effect from time to time. A reference to a Person
includes the successors and assigns of such Person, except to the extent that
this Agreement or any other Operative Document may restrict assignment or rights
of assignees. A reference in this Agreement to any other Operative Document
shall be deemed a reference to that Operative Document as it may be amended,
modified or supplemented from time to time. A reference in Section 2.01 to any
Operative Document (or to any Fixed Rent, Additional Rent, Additional Costs,
Residual Value Amount, Termination Value, indemnification payment or other
amounts payable under representations or warranties in, or covenants,
undertakings or other obligations under
10
14
any Operative Document) shall be deemed a reference to both the Operative
Documents (and such payment obligations, representations, warranties, covenants,
undertakings and other obligations) as defined in the Original Guaranty and to
the Operative Documents (and such payment obligations, representations,
warranties, covenants, undertakings and other obligations) as defined in this
Agreement.
ARTICLE II
GUARANTY AND PAYMENT
Section 2.01 Guaranty.
(a) Guaranteed Obligations. The Guarantor hereby unconditionally and
irrevocably guarantees to, and agrees with and for the benefit of the Guaranteed
Parties that:
(i) The Fixed Rent, Additional Rent, Additional Costs,
Residual Value Amount, Termination Value, indemnification payments and
all other amounts payable by each Relevant Subsidiary under the
Operative Documents will be promptly paid in full when due in
accordance with the provisions thereof;
(ii) Each Relevant Subsidiary will perform, comply with and
observe (or cause to be performed, complied with or observed) all
obligations, covenants, terms, conditions, indemnities and undertakings
required under the Operative Documents in accordance with the
provisions thereof;
(iii) All representations, warranties, certifications or
statements made by each Relevant Subsidiary, and their respective
officers, pursuant to each of the Operative Documents are true and
correct as of the date made (or, if made or delivered after the date
hereof, will be true and correct when made or delivered);
(iv) All amounts due in respect of the Guaranteed Instruments
(including all principal or stated amount of, and interest or yield on,
as applicable, the Guaranteed Instruments, together with any other sums
which may become due pursuant to any Operative Document with respect to
the Guaranteed Instruments) will be promptly paid in full (A) when due,
whether at stated maturity, by acceleration or otherwise, in accordance
with the provisions of such Guaranteed Instruments and of the Operative
Documents and (B) upon the occurrence of an Event of Default; and
(v) All amounts due in respect of any Guaranteed Obligations
or Guaranteed Instruments (each as defined in the Original Guaranty),
to the extent such Guaranteed Obligations arose on or prior to the date
hereof and remain unpaid or unsatisfied on or after the date hereof or
such Guaranteed Instruments remaining outstanding and unpaid on or
after the date hereof.
11
15
(b) Tax Gross-Up. Payments of Guaranteed Obligations shall be made (or
grossed-up, as applicable) free and clear of all Taxes and Other Charges (other
than Excluded Charges) in the manner set forth in Section 5.04 of the
Participation Agreement.
(c) Enforcement. Regardless of whether the Guaranteed Parties are (at
any time) precluded or stayed from enforcing or exercising any of their rights
or remedies under the Operative Documents against any Relevant Subsidiary, the
Guaranteed Obligations may be enforced directly against the Guarantor (as a
primary obligation of the Guarantor) without the joinder of, demand on, or the
taking of any other action against, any Relevant Subsidiary or any other Person.
Regardless of whether any Relevant Subsidiary is precluded or stayed from paying
or performing (or otherwise fails to pay or perform) any of the Guaranteed
Obligations (upon demand by any Guaranteed Party) the Guarantor shall pay or
perform (or cause to be paid or performed) such Guaranteed Obligations. Without
limiting the foregoing provisions of this Section 2.01(c), if enforcement of the
rights or remedies of any Guaranteed Party under the Operative Documents is
dependent upon delivering notices or taking any other Actions (such as
delivering a Termination Notice to the Lessee under the Lease), then the
Guaranteed Parties may deliver such notices to and take such other Actions with
or against the Guarantor (in lieu of a Relevant Subsidiary) for all purposes
under this Agreement and the other Operative Documents. This Section 2.01(c)
should not be construed to (i) impose any conditions whatsoever on the
obligations of the Guarantor under this Agreement or (ii) require the Guaranteed
Parties to first exercise or exhaust remedies against any Relevant Subsidiary or
any other Person before exercising remedies against the Guarantor pursuant to
this Agreement.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
Section 3.01 Representations and Warranties of the Guarantor. The
Guarantor represents and warrants as to itself and its Subsidiaries as follows:
(a) Organization; Required Consents and Permits. The Guarantor is duly
organized, validly existing and in good standing under the laws of the State of
Delaware and has all corporate powers and all governmental licenses,
authorizations, certificates, consents and approvals required to carry on its
business as now conducted in all material respects, except for those licenses,
authorizations, certificates, consents and approvals the failure to have which
could not reasonably be expected to have a Material Adverse Effect or create any
Trust Liability. Each Material Subsidiary of the Guarantor is duly organized or
validly formed, validly existing and (if applicable) in good standing under the
laws of its jurisdiction of incorporation or formation, except where the failure
to be so organized, existing and in good standing could not reasonably be
expected to have a Material Adverse Effect or create any Trust Liability. Each
Material Subsidiary of the Guarantor has all corporate or limited liability
company powers and all governmental licenses, authorizations, certificates,
consents and approvals required to carry on its
12
16
business as now conducted in all material respects, except for those licenses,
authorizations, certificates, consents and approvals the failure to have which
could not reasonably be expected to have a Material Adverse Effect or create any
Trust Liability.
(b) Authorization; No Conflict. The execution, delivery and performance
by the Guarantor of this Agreement and the other Operative Documents to which
the Guarantor is party and the consummation of the transactions contemplated by
this Agreement and the other Operative Documents are within the Guarantor's
corporate powers, have been duly authorized by all necessary corporate or other
action on the Guarantor's part, do not contravene (i) the certificate of
incorporation or by-laws of the Guarantor or any Subsidiary of the Guarantor, or
(ii) any Law, judgment, order, decree, injunction, instrument or contractual
restriction binding on or affecting the Guarantor or any of its Subsidiaries and
will not result in or require the creation or imposition of any Lien prohibited
by this Agreement or any other Operative Document.
(c) Consents; Governmental Approvals. No consent, authorization or
approval or other action by, and no notice to or filing with, any governmental
authority, regulatory body or other Person is required for the due execution,
delivery and performance by the Guarantor of this Agreement and the other
Operative Documents to which the Guarantor is party or the consummation of the
transactions contemplated by this Agreement.
(d) Binding Agreement. This Agreement and each of the other
Operative Documents to which the Guarantor is party have been duly executed and
delivered by the Guarantor. This Agreement and each of the other Operative
Documents to which the Guarantor is party are the legal, valid and binding
obligations of the Guarantor enforceable against the Guarantor in accordance
with their respective terms, except as such enforceability may be limited by any
applicable bankruptcy, insolvency, reorganization, moratorium or similar Law
affecting creditors' rights generally and by general principles of equity.
(e) Financial Statements. The Consolidated and Consolidating balance
sheets of the Guarantor and its Subsidiaries as at December 31, 1999 and at
March 31, 2000, and the related Consolidated and Consolidating statements of
income and cash flows of the Guarantor and its Subsidiaries for the fiscal year
and the fiscal quarter then ended, copies of which have been furnished to each
of the Agent and the Trustee, fairly present the Consolidated and Consolidating
financial condition of the Guarantor and its Subsidiaries as at such dates and
the Consolidated and Consolidating results of operations of the Guarantor and
its Subsidiaries for the year and quarter ended on such dates, all in accordance
with GAAP consistently applied subject, in the case of the March 31, 2000
financial statements, to normal, year-end audit adjustments. Except as set forth
in the Public Filings, since March 31, 2000, there has been no material adverse
change in the condition or operations of the Guarantor or its Subsidiaries.
(f) Litigation. Except as set forth in the Public Filings or as
otherwise disclosed in writing by the Guarantor to the Agent and the Trustee
after the date hereof and approved by the Majority Purchasers, there is no
pending or, to the knowledge of the
13
17
Guarantor, threatened action or proceeding affecting the Guarantor, any Material
Subsidiary of the Guarantor or any WCG Subsidiary before any Governmental
Authority, which could reasonably be expected to have a Material Adverse Effect
or which purports to affect the legality, validity, binding effect or
enforceability of this Agreement or any other Operative Document.
(g) Investment Company. The Guarantor 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.
(h) ERISA. No Termination Event has occurred or is reasonably expected
to occur with respect to any Plan that could reasonably be expected to have a
Material Adverse Effect on the Guarantor or any Material Subsidiary of the
Guarantor (including any material WCG Subsidiary). Neither the Guarantor nor any
ERISA Affiliate of the Guarantor has received any notification that any
Multiemployer Plan is in reorganization or has been terminated, within the
meaning of Title IV of ERISA, and the Guarantor is not aware of any reason to
expect that any Multiemployer Plan is to be in reorganization or to be
terminated within the meaning of Title IV of ERISA that could reasonably be
expected to have a Material Adverse Effect on the Guarantor or any Material
Subsidiary of the Guarantor (including any material WCG Subsidiary) or any ERISA
Affiliate of the Guarantor.
(i) Taxes. As of the date of this Agreement, the United States federal
income tax returns of the Guarantor and the Material Subsidiaries of the
Guarantor have been examined through the fiscal year ended December 31, 1995.
The Guarantor and the Subsidiaries of the Guarantor have filed all United States
Federal income tax returns and all other material domestic tax returns which are
required to be filed by them and have paid, or provided for the payment before
the same become delinquent of, all taxes due pursuant to such returns or
pursuant to any assessment received by the Guarantor or any such Subsidiary,
other than those taxes contested in good faith by appropriate proceedings. The
charges, accruals and reserves on the books of the Guarantor and the Material
Subsidiaries of the Guarantor in respect of taxes are adequate.
(j) PUHCA. The Guarantor 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" of a "holding company," or a "public utility" within the
meaning of the Public Utility Holding Company Act of 1935, as amended.
(k) Environmental Matters. Except as set forth in the Public Filings or
as otherwise disclosed in writing by the Guarantor to the Trustee and the Agent
after the date hereof and approved by the Majority Purchasers, the Guarantor and
its Material Subsidiaries are in compliance in all material respects with all
Environmental Protection Statutes to the extent material to their respective
operations or financial condition. Except as set forth in the Public Filings or
as otherwise disclosed in writing by the Guarantor to the Trustee and the Agent
after the date hereof and approved by the Majority Purchasers, the aggregate
contingent and non-contingent liabilities of the Guarantor and its Subsidiaries
(other than those reserved for in accordance with GAAP
14
18
and set forth in the financial statements regarding the Guarantor referred to in
Section 3.01(e) and delivered to the Trustee and the Agent and excluding
liabilities to the extent covered by insurance if the insurer has confirmed that
such insurance covers such liabilities or which the Guarantor reasonably expects
to recover from ratepayers) which are reasonably expected to arise in connection
with (i) the requirements of Environmental Protection Statutes or (ii) any
obligation or liability to any Person in connection with any Environmental
matters (including, without limitation, any release or threatened release (as
such terms are defined in the Comprehensive Environmental Response, Compensation
and Liability Act of 1980) of any Hazardous Waste, Hazardous Substance, other
waste, petroleum or petroleum products into the Environment) could not
reasonably be expected to have a Material Adverse Effect on the business,
assets, condition or operations of the Guarantor and any Subsidiaries of the
Guarantor, taken as a whole. For purposes of this clause (k) of Section 3.01,
Subsidiaries shall be deemed to include WCG Subsidiaries.
(l) Compliance with Law. The Guarantor is not in material violation of
any Law (other than Environmental Protection Statutes, which are the subject of
Section 3.01(k) hereof) with respect to the Property or any part thereof or with
respect to its business, if any, related to the Property. The Guarantor has not
received any notice of, or citation for, any violation of any Law which has not
been resolved, which notice or citation relates to the ownership or operation of
the Property or any part thereof.
(m) Ownership. The Guarantor owns, directly or indirectly,
approximately 85% of the Voting Stock of WCG, the Lessee and each of the other
Relevant Subsidiaries.
(n) Full Disclosure. No statement or material furnished by or on behalf
of the Guarantor or any Relevant Subsidiary to the Collateral Agent, the Agent,
the Purchasers, the Trustee, Special Counsel or Trustee's Special Counsel, in
connection with any Operative Document or any transaction contemplated thereby,
contains any untrue statement of a material fact or omits a material fact
necessary to make the statements contained therein not misleading.
Section 3.02 Satisfaction of Conditions Under Participation Agreement.
Upon the making of any Advance under the Participation Agreement, the Guarantor
shall be deemed (immediately prior to, and immediately after giving effect to,
such Advance) to have repeated and reaffirmed to the Trustee, the Collateral
Agent, the Agent, and the Purchasers on the date of such Advance each of its
representations and warranties under this Agreement as if stated on such date.
ARTICLE IV
COVENANTS OF THE GUARANTOR
Section 4.01 Affirmative Covenants. So long as any Instrument or
Guaranteed Obligation shall remain unpaid, the Guarantor will, unless the
Trustee, the
15
19
Collateral Agent, the Agent, the APA Agent and the Majority Purchasers shall
otherwise consent in writing:
(a) Compliance with Laws, Etc. Comply, and cause each of its
Subsidiaries to comply, in all material respects with all applicable Laws
(except where failure to comply could not reasonably be expected to have a
Material Adverse Effect or create any Trust Liability), such compliance to
include, without limitation, the payment and discharge before the same become
delinquent of all taxes, assessments and governmental charges or levies imposed
upon it or any of its Subsidiaries or upon any of its property or any property
of any of its Subsidiaries, and all lawful claims which, if unpaid, might become
a Lien upon any property of it or any of its Subsidiaries, provided that neither
the Guarantor nor any Subsidiary of the Guarantor shall be required to pay any
such tax, assessment, charge, levy or claim which is being contested in good
faith and by proper proceedings and with respect to which reserves in conformity
with GAAP, if required by GAAP, have been provided on the books of the Guarantor
or such Subsidiary, as the case may be.
(b) Reporting Requirements. Furnish to the Trustee, the Agent and each
of the Purchasers:
(i) as soon as possible and in any event within five days
after the occurrence of each Guaranty Default or each event which, with
the giving of notice or lapse of time or both, would constitute an
Guaranty Default, continuing on the date of such statement, a statement
of an authorized financial officer of the Guarantor setting forth the
details of such Guaranty Default or event and the actions, if any,
which the Guarantor has taken and proposes to take with respect
thereto;
(ii) as soon as available and in any event not later than 60
days after the end of each of the first three quarters of each fiscal
year of the Guarantor, the Consolidated and Consolidating balance sheet
of the Guarantor and its Subsidiaries as of the end of such quarter and
the Consolidated and Consolidating statements of income and cash flows
of the Guarantor and its Subsidiaries for the period commencing at the
end of the previous year and ending with the end of such quarter, all
in reasonable detail and duly certified (subject to year-end audit
adjustments) by an authorized financial officer of the Guarantor as
having been prepared in accordance with GAAP, provided, that, if any
financial statements referred to in this clause (ii) of Section 4.01(b)
is readily available on-line through EDGAR, the Guarantor shall not be
obligated to furnish copies of such financial statement. An authorized
financial officer of the Guarantor shall furnish a certificate (a)
stating that he has no knowledge that a Guaranty Default, or an event
which, with notice or lapse of time or both, would constitute a
Guaranty Default has occurred and is continuing or, if a Guaranty
Default or such an event has occurred and is continuing, a statement as
to the nature thereof and the action, if any, which the Guarantor
proposes to take with respect thereto, and (b) showing in detail the
calculation supporting such statement in respect of Section 4.02(b),
provided that for the purposes of clauses (b)(ii) and (b)(iii) of this
Section 4.01,
16
20
"Subsidiaries" when used in relation to a Consolidated balance sheet
and the related statements of income and cash flow shall include the
WCG Subsidiaries;
(iii) as soon as available and in any event not later than 105
days after the end of each fiscal year of the Guarantor, a copy of the
annual audit report for such year for the Guarantor and its
Subsidiaries, including therein the Consolidated and Consolidating
balance sheet of the Guarantor and its Subsidiaries as of the end of
such fiscal year and the Consolidated and Consolidating statements of
income and cash flows of the Guarantor and its Subsidiaries for such
fiscal year, in each case prepared in accordance with GAAP and
certified by Ernst & Young, LLP or other independent certified public
accountants of recognized standing acceptable to the Trustee, the Agent
and the Majority Purchasers, provided, that, if any financial statement
referred to in this clause (iii) of Section 4.02(b) is readily
available on-line through EDGAR, the Guarantor shall not be obligated
to furnish such financial statements. The Guarantor shall also deliver
in conjunction with such financial statements a certificate of such
accounting firm to the Trustee, the Agent and the Purchasers (a)
stating that, in the course of the regular audit of the business of the
Guarantor and its Subsidiaries, which audit was conducted by such
accounting firm in accordance with generally accepted auditing
standards, such accounting firm has obtained no knowledge that a
Guaranty Default or an event which, with notice or lapse of time or
both, would constitute a Guaranty Default, has occurred and is
continuing, or if, in the opinion of such accounting firm, a Guaranty
Default or such an event has occurred and is continuing, a statement as
to the nature thereof, and (b) showing in detail the calculations
supporting such statement in respect of Section 4.02(b);
(iv) such other information respecting the business or
properties, or the condition or operations, financial or otherwise, of
the Guarantor or any of its Material Subsidiaries as any Purchaser
through the Agent may from time to time reasonably request;
(v) promptly after the sending or filing thereof, copies of
all proxy material, reports and other information which the Guarantor
sends to any of its security holders, and copies of all final reports
and final registration statements which the Guarantor or any Material
Subsidiary of the Guarantor files with the Securities and Exchange
Commission or any national securities exchange, provided, that, if such
proxy materials and reports, registration statements and other
information are readily available on-line through EDGAR, the Guarantor
or Material Subsidiary shall not be obligated to furnish copies
thereof;
(vi) as soon as possible and in any event within 30 Business
Days after the Guarantor or any ERISA Affiliate of the Guarantor knows
or has reason to know (A) that any Termination Event described in
clause (i) of the definition of Termination Event with respect to any
Plan has occurred that could have a Material Adverse Effect on the
Guarantor, any Material Subsidiary of the Guarantor (including any
material WCG Subsidiary) or any ERISA Affiliate of
17
21
the Guarantor or (B) that any other Termination Event with respect to
any Plan has occurred or is reasonably expected to occur that could
have a Material Adverse Effect on the Guarantor, any Material
Subsidiary of the Guarantor (including any material WCG Subsidiary) or
any ERISA Affiliate of the Guarantor, a statement of the chief
financial officer or chief accounting officer of the Guarantor
describing such Termination Event and the action, if any, which the
Guarantor, such Subsidiary or such ERISA Affiliate of the Guarantor
proposes to take with respect thereto;
(vii) promptly and in any event within 25 Business Days after
receipt thereof by the Guarantor or any ERISA Affiliate of the
Guarantor, copies of each notice received by the Guarantor or any ERISA
Affiliate of the Guarantor from the PBGC stating its intention to
terminate any Plan or to have a trustee appointed to administer any
Plan;
(viii) within 3O days following request therefor by any
Purchaser, copies of each Schedule B (Actuarial Information) to each
annual report (Form 5500 Series) of the Guarantor or any ERISA
Affiliate of the Guarantor with respect to each Plan;
(ix) promptly and in any event within 25 Business Days after
receipt thereof by the Guarantor or any ERISA Affiliate of the
Guarantor from the sponsor of a Multiemployer Plan, a copy of each
notice received by the Guarantor or any ERISA Affiliate of the
Guarantor concerning (A) the imposition of a Withdrawal Liability by a
Multiemployer Plan, (B) the determination that a Multiemployer Plan is,
or is expected to be, in reorganization within the meaning of Title IV
of ERISA, (C) the termination of a Multiemployer Plan within the
meaning of Title IV of ERISA, or (D) the amount of liability incurred,
or expected to be incurred, by the Guarantor or any ERISA Affiliate of
the Guarantor in connection with any event described in clause (A), (B)
or (C) above that, in each case, could have a Material Adverse Effect
on the Guarantor or any ERISA Affiliate of the Guarantor;
(x) not more than 60 days (or 105 days in the case of the last
fiscal quarter of a fiscal year of the Guarantor) after the end of each
fiscal quarter of the Guarantor, a certificate of an authorized
financial officer of the Guarantor stating the respective ratings, if
any, by each of S&P and Moody's of the senior unsecured long-term debt
of the Guarantor as of the last day of such quarter;
(xi) promptly after any withdrawal or termination of or any
change in, or issuance, withdrawal or termination of, the rating of any
senior unsecured long-term debt of the Guarantor by S&P or Moody's,
written notice thereof;
(xii) as soon as available and in any event not later than 60
days after the end of each of the first three quarters of each fiscal
year of WCG, the Consolidated unaudited balance sheet of WCG and its
Subsidiaries as of the end of such quarter and the Consolidated
statements of income and cash flows of
18
22
WCG and its Subsidiaries for the period commencing at the end of the
previous year and ending with the end of such quarter, all in
reasonable detail and duly certified by an authorized financial officer
of WCG; and
(xiii) as soon as available and in any event not later than
105 days after the end of each fiscal year of WCG, the Consolidated
unaudited balance sheet of WCG and its Subsidiaries as of the end of
such fiscal year and the Consolidated statements of income and cash
flows of WCG and its Subsidiaries for such fiscal year, certified by an
authorized financial officer of WCG.
(c) Maintenance of Insurance. Maintain, and cause each of its Material
Subsidiaries to maintain, insurance with responsible and reputable insurance
companies or associations in such amounts and covering such risks as is usually
carried by companies engaged in similar businesses and owning similar properties
in the same general areas in which the Guarantor or its Subsidiaries operate,
provided that the Guarantor or any of its Subsidiaries may self-insure to the
extent and in the manner normal for companies of like size, type and financial
condition, except as otherwise provided in the Lease.
(d) Preservation of Corporate Existence, Etc. Preserve and maintain,
and cause each of its Subsidiaries to preserve and maintain, its corporate
existence, rights, franchises and privileges in the jurisdiction of its
incorporation, and qualify and remain qualified, and cause each Subsidiary to
qualify and remain qualified, as a foreign corporation in each jurisdiction in
which qualification is necessary or desirable in view of its business and
operations or the ownership of its properties, except (i) where the failure of
the Guarantor or any Subsidiary of the Guarantor to preserve and maintain such
rights, franchises and privileges and to so qualify and remain qualified could
not reasonably be expected to have a Material Adverse Effect or create any Trust
Liability, (ii) the Guarantor and its Subsidiaries may consummate any merger or
consolidation permitted pursuant to Section 4.02(c) and (iii) the Guarantor and
any Subsidiary of the Guarantor may be converted into a limited liability
company by statutory election; provided that any such conversion of the
Guarantor shall not affect its obligations to the Trustee, the Agent or the
Purchasers pursuant to this Agreement.
(e) Ranking of Obligations. Assure, and cause each Relevant Subsidiary
to assure, that their obligations under this Agreement and the other Operative
Documents to which any Relevant Subsidiary is a party, respectively, rank and
will rank at all times at least equally and ratably in all respects with all
their respective other unsecured indebtedness.
Section 4.02 Negative Covenants. So long as any Instrument or
Guaranteed Obligation shall remain unpaid, the Guarantor will not, without the
written consent of the Trustee, the Agent, the APA Agent and the Majority
Purchasers:
(a) Liens, Etc. Create, assume, incur or suffer to exist, or permit any
of its Subsidiaries to create, assume, incur or suffer to exist, any Lien on or
in respect of any of its property, whether now owned or hereafter acquired, or
assign or otherwise
19
23
convey, or permit any such Subsidiary to assign or otherwise convey, any right
to receive income, in each case to secure or provide for the payment of any Debt
of any Person, except Permitted Liens.
(b) Debt. Permit the ratio of (A) the aggregate amount of Net Debt of
the Guarantor to (B) the sum of the Consolidated Net Worth of the Guarantor plus
Net Debt of the Guarantor to exceed 0.65 to 1.0 at any time.
(c) Merger and Sale of Assets. Merge or consolidate with or into any
other Person, or sell, lease or otherwise transfer all or substantially all of
its assets, or permit any of its Material Subsidiaries to merge or consolidate
with or into any other Person, or sell, lease or otherwise transfer all or
substantially all of its assets, except that this Section 4.02(c) shall not
prohibit:
(i) the Guarantor and its Subsidiaries from selling, leasing
or otherwise transferring their respective assets in the ordinary
course of business;
(ii) any merger, consolidation or sale, lease or other
transfer of assets involving only TWC and its Subsidiaries; provided,
however, that transactions under this paragraph (ii) shall be permitted
if, and only if, (x) there shall not exist or result an Event of
Default or an event which with notice or lapse of time or both would
constitute an Event of Default and (y) in the case of each transaction
referred to in this paragraph (ii) involving the Guarantor or any of
its Subsidiaries, such transaction could not reasonably be expected to
impair materially the ability of the Guarantor or its Subsidiaries to
perform its obligations under this Agreement and the other Operative
Documents and the Guarantor and Lessee shall continue to exist;
(iii) the Guarantor and its Subsidiaries from selling, leasing
or otherwise transferring their respective gathering assets and other
production area facilities, or the stock of any Person substantially
all of the assets of which are gathering assets and other production
area facilities, to TWC or to any Subsidiary of TWC for consideration
that is not materially less than the net book value of such assets and
facilities; provided, however, that transactions under this paragraph
(iii) shall be permitted if, and only if, there shall not exist or such
transaction should not result in an Event of Default or an event which
with notice or lapse of time or both would constitute an Event of
Default;
(iv) sales of receivables of any kind by the Guarantor or any
of its Subsidiaries other than the Lessee in respect of any amounts due
under the Lease or any other Operative Documents.
(d) Agreements to Restrict Dividends and Certain Transfers. Enter into
or suffer to exist, or permit any of its Subsidiaries to enter into or suffer to
exist, any consensual encumbrance or restriction on the ability of any
Subsidiary of the Guarantor (i) to pay, directly or indirectly, dividends or
make any other distributions in respect of its capital stock or pay any Debt or
other obligation owed to the Guarantor or to any
20
24
Subsidiary of the Guarantor; or (ii) to make loans or advances to the Guarantor
or any Subsidiary of the Guarantor, except (1) those encumbrances and
restrictions existing on the date hereof, (2) other customary encumbrances and
restrictions now or hereafter existing of the Guarantor or any of its
Subsidiaries entered into in the ordinary course of business that are not more
restrictive in any material respect than the encumbrances and restrictions with
respect to the Guarantor or its Subsidiaries existing on the date hereof.
(e) Loans and Advances; Investments. Make or permit to remain
outstanding, or allow any of its Subsidiaries to make or permit to remain
outstanding, any loan or advance to, or own, purchase or acquire any obligations
or debt securities of, any WCG Subsidiary, except that the Guarantor and its
Subsidiaries may permit to remain outstanding loans and advances to a WCG
Subsidiary existing as of the date hereof and listed on Exhibit B hereof (and
such WCG Subsidiaries may permit such loans and advances on Exhibit B to remain
outstanding). Except for those investments in existence on the date hereof and
listed on Exhibit B hereof, the Guarantor shall not, and the Guarantor shall not
permit any of its Subsidiaries to, acquire or otherwise invest in any stock or
other equity or other ownership interest in a WCG Subsidiary.
(f) Maintenance of Ownership of Certain Subsidiaries. Sell, issue or
otherwise dispose of, or create, assume, incur or suffer to exist any Lien on or
in respect of, or permit any of its Subsidiaries to sell, issue or otherwise
dispose of or create, assume, incur or suffer to exist any Lien on or in respect
of, any shares of or any interest in any shares of the capital stock or other
ownership interests of (i) any Relevant Subsidiary or any of their respective
Material Subsidiaries or (ii) any Subsidiary of the Guarantor at the time it
owns any shares of or any interest in any shares of the capital stock or other
ownership interests of any Relevant Subsidiary or any of their respective
Material Subsidiaries; provided, however, that, this Section 4.02(f) shall not
prohibit the sale or other disposition of the stock of any Subsidiary of the
Guarantor to the Guarantor or any Wholly-Owned Subsidiary of the Guarantor if,
but only if, (x) there shall not exist or result an Event of Default or an event
which with notice or lapse of time or both would constitute an Event of Default
and (y) in the case of each sale or other disposition referred to in this
proviso involving the Guarantor or any of its Subsidiaries, such sale or other
disposition could not reasonably be expected to impair materially the ability of
the Guarantor or its Subsidiaries to perform its obligations under this
Agreement and the other Operative Documents and the Guarantor and the Lessee
shall continue to exist. Nothing herein shall be construed to permit the
Guarantor or any Subsidiary of the Guarantor to purchase shares, any interest in
shares or any ownership interest in a WCG Subsidiary except as permitted by
clause (e) of this Section 4.02.
(g) Compliance with ERISA. (i) Terminate, or permit any ERISA Affiliate
of the Guarantor to terminate, any Plan so as to result in any material
liability of the Guarantor or any Material Subsidiary of the Guarantor
(including any material WCG Subsidiary) or any such ERISA Affiliate to the PBGC,
or (ii) permit to exist any occurrence of any Termination Event with respect to
a Plan which would have a Material Adverse Effect on the Guarantor or any
Material Subsidiary of the Guarantor (including any material WCG Subsidiary).
21
25
(h) Transactions with Related Parties. Except as required or expressly
permitted by the Operative Documents, make any sale to, make any purchase from,
extend credit to, make payment for services rendered by, or enter into any other
transaction with, or permit any material Subsidiary of the Guarantor to make any
sale to, make any purchase from, extend credit to, make payment for services
rendered by, or enter into any other transaction with, any Related Party of the
Guarantor or of such Subsidiary unless as a whole such sales, purchases,
extensions of credit, rendition of services and other transactions are (at the
time such sale, purchase, extension of credit, rendition of services or other
transaction is entered into) on terms and conditions reasonably fair in all
material respects to the Guarantor or such Subsidiary in the good faith judgment
of the Guarantor.
(i) Guarantees. Guarantee or otherwise become contingently liable for,
or permit any of its Subsidiaries to guarantee or otherwise become contingently
liable for, Debt or any other obligation of any WCG Subsidiary or to otherwise
insure a WCG Subsidiary against loss.
(j) Sale and Lease-Back Transactions. Enter into, or permit any of its
Subsidiaries to enter into, any Sale and Lease-Back Transaction, if after giving
effect thereto the Guarantor would not be permitted to incur at least $1.00 of
additional Debt secured by a Lien permitted by paragraph (z) of Schedule 1.
ARTICLE V
REMEDIES
Section 5.01 Remedies. A Guaranty Default shall constitute an Event of
Default under the Participation Agreement and the other Operative Documents. If
a Guaranty Default or other Event of Default has occurred and is continuing, the
Trustee, the Collateral Agent, the Agent and the APA Agent may exercise any of
the rights or remedies granted to the Guaranteed Parties under the Operative
Documents. This Agreement may be enforced as to any one or more Guaranty
Defaults or other Events of Default either separately or cumulatively.
ARTICLE VI
NATURE OF AGREEMENT
Section 6.01 Nature of Guaranty. This Agreement is (a) irrevocable,
unconditional and absolute; (b) a guaranty of payment, performance and
compliance and not of collection; and (c) in no way conditioned or contingent
upon any attempt to collect from or enforce performance or compliance by any
Relevant Subsidiary or any other Subsidiary or any assignees or sublessees of
any Relevant Subsidiary or any other Subsidiary, or upon any other event,
contingency or circumstance whatsoever. This Agreement and the Guaranteed
Obligations shall be binding upon and against the Guarantor without regard to
the validity or enforceability of any of the Operative
22
26
Documents or the Securitization Documents or any provision thereof and the
Guarantor hereby waives any defense relating to the enforceability of such
documents or any provision contained therein. The Guarantor also agrees to pay
to the Guaranteed Parties such further amounts as shall be sufficient to cover
the costs of collecting or enforcing the Guaranteed Obligations or otherwise
enforcing this Agreement (including reasonable fees, expenses and disbursements
of their counsel).
Section 6.02 Survival. The obligations of the Guarantor under this
Agreement shall survive in accordance with Section 8.01 of the Participation
Agreement.
Section 6.03 Waivers. The Guarantor hereby unconditionally (a) waives
any requirement that the Guaranteed Parties or any other Person first make
demand upon, or seek to enforce remedies against, any other Person or any
collateral or property of such other Person before demanding payment from, or
seeking to enforce this Agreement against, the Guarantor; (b) covenants that
this Agreement will not be discharged and shall survive in accordance with
Section 8.01 of the Participation Agreement; (c) agrees that this Agreement
shall remain in full effect without regard to, and shall not be affected or
impaired by, any invalidity, irregularity or unenforceability in whole or in
part of, any Operative Document (or any other document executed in connection
therewith), or any limitation of the liability of any Relevant Subsidiary or any
other Person thereunder, or any limitation on the method or terms of payment
thereunder which may now or hereafter be caused or imposed in any manner
whatsoever; and (d) except for notices expressly required under the Operative
Documents, waives diligence, notice of intent to accelerate, notice of default
and notice of acceleration, presentment and protest with respect to the payment
of any amount at any time payable under or in connection with the Operative
Documents or Securitization Documents. Notice of acceptance of this Agreement
and notice of execution, delivery and acceptance of any other instrument or
agreement referred to herein, are hereby waived by the Guarantor.
Section 6.04 The Guarantor's Obligations Unconditional. The covenants,
agreements and duties of the Guarantor set forth in this Agreement shall not be
subject to any counterclaim, setoff, deduction, diminution, abatement, stay,
recoupment, suspension, deferment, reduction or defense (other than full and
strict compliance or performance by the Guarantor with its obligations
hereunder) based upon any claim that the Guarantor, or any other Person, may
have against any Relevant Subsidiary, or any other Person, and shall remain in
full force and effect without regard to, and shall not be released, discharged
or in any way affected by, any circumstance or condition whatsoever (whether or
not the Guarantor or any Relevant Subsidiary shall have knowledge or notice
thereof or shall have assented thereto and notwithstanding the fact that no
rights were reserved against the Guarantor in connection therewith) including:
(a) the validity, legality, regularity or enforceability of
the Operative Documents, or any of the Guaranteed Obligations or any
other collateral security therefor or guaranty or right of offset with
respect thereto at any time or from time to time held by the Agent, the
Trustee, the APA Agent, any Purchaser or any APA Purchaser;
23
27
(b) any amendment, modification, renewal, extension, addition,
acceleration, deletion or supplement to, or termination of (in whole or
in part) or other change in or waiver under the Operative Documents or
any of the agreements referred to therein, or any other instrument or
agreement applicable to any of the parties to such agreements or any
assignment, mortgaging or transfer of any thereof or of any interest
therein, or any furnishing or acceptance of additional security or any
release of any security; or the failure of any security or the failure
of any Person to perfect any interest in any such collateral;
(c) any failure, omission or delay on the part of any
Guaranteed Party (i) to enforce, assert or exercise any right, power or
remedy under any instrument or agreement referred to in clauses (a) or
(b) above or any assignment of any thereof or (ii) to conform with any
term of any such instrument or agreement (and notwithstanding that any
demand for payment of any of the Guaranteed Obligations made by any
Guaranteed Party shall have been rescinded by such party and any of the
Guaranteed Obligations continued);
(d) any waiver, consent, extension, indulgence, compromise,
surrender, release or other action or inaction under or in respect of
any instrument or agreement referred to in clauses (a) or (b) above or
of any agreement, covenant, term or condition contained therein or any
obligation or liability of any Guaranteed Party or any exercise or
non-exercise of any right, remedy, power or privilege under or in
respect of any such instrument or agreement or any such obligation or
liability (and notwithstanding that any collateral security, guaranty
or right of offset at any time held by any Guaranteed Party for the
payment of the Guaranteed Obligations shall have been sold, exchanged,
waived, surrendered or released);
(e) the voluntary or involuntary liquidation, dissolution,
sale of all or substantially all of the assets, marshaling of assets
and liabilities, receiver-ship, conservatorship, insolvency,
bankruptcy, assignment for the benefit of creditors, reorganization,
arrangement, composition or readjustment of, or other similar
proceeding with respect to the Guarantor, any Relevant Subsidiary or
any Guaranteed Party or any other Person or any action taken by any
trustee or receiver or by any court in any such proceeding;
(f) any defect in the title, compliance with specifications,
conditions, design, operation or fitness for use of, or any damage to
or loss or destruction of, or any interruption or cessation in the use
or operation of the Property or any portion thereof by any Relevant
Subsidiary or any other Person for any reason whatsoever (including,
any Loss Event or Environmental Event) regardless of the duration
thereof (even though such duration would otherwise constitute a
frustration of the purpose of the Operative Documents, whether or not
resulting from accident and whether or not without default on the part
of any other Person;
(g) any assignment of the Operative Documents or subletting or
sale of the Property or any part thereof;
24
28
(h) any merger or consolidation of the Guarantor or any
Relevant Subsidiary into or with any other Person or any sale, lease,
transfer, divestiture or other disposition of any or all of the assets
of the Guarantor or any Relevant Subsidiary to any other Person (and
regardless of whether such transactions are permitted under the
Operative Documents);
(i) any change in the ownership of any shares of capital stock
of the Guarantor or any Relevant Subsidiary;
(j) any attachment, claim, demand, charge, lien, levy, order,
process, encumbrance or any other happening or event or reason, similar
or dissimilar to the foregoing; or any withholding or diminution at the
source, by reason of any Charges, expenses, indebtedness, obligations
or liabilities of any character, foreseen or unforeseen, and whether or
not valid, incurred by or against any Person; or any claims, demands,
charges or liens of any nature, foreseen or unforeseen, incurred by any
Person, or against any sums payable under this Agreement, so that such
sums would be rendered inadequate or would be unavailable to make the
payments herein provided;
(k) any order, judgment, decree, ruling or regulation (whether
or not valid) of any court or any Governmental Authority or any other
action, happening, event or reason whatsoever which shall delay,
interfere with, hinder or prevent, or in any way adversely affect, the
performance by the Guarantor or any Relevant Subsidiary under the
Operative Documents or any assignments thereof;
(l) any action or inaction or election of remedies by any
Guaranteed Party, including any failure by any Guaranteed Party to
protect, secure, perfect or insure any Lien at any time held by it as
security for the Guaranteed Obligations or for this Agreement or any
property subject thereto;
(m) any release, discharge or rejection of any Relevant
Subsidiary for performance or payment of their obligations under the
Operative Documents (including any release, discharge or rejection
arising under any Bankruptcy Law or as a result of any bankruptcy or
reorganization case affecting the Guarantor or any Relevant
Subsidiary);
(n) any other occurrence or circumstance whatsoever, whether
similar or dissimilar to the foregoing and any other circumstances that
might otherwise constitute a legal or equitable defense or discharge of
a guarantor, indemnitor or surety or that might otherwise limit
recourse against the Guarantor;
(o) any change in circumstances, whether or not foreseen or
foreseeable, whether or not imputable to the Guarantor or any
Guaranteed Party and whether or not such change in circumstances shall
or might in any manner and to any extent vary the risk of the Guarantor
hereunder; or
(p) any other circumstance whatsoever (with or without notice
to or knowledge of the Guarantor, the Relevant Subsidiaries or any of
their
25
29
Subsidiaries) which constitutes, or might be construed to constitute,
an equitable or legal discharge of any of their obligations under the
Operative Documents in bankruptcy or in any other instance.
The obligations of the Guarantor set forth in this Agreement constitute the full
recourse obligations of the Guarantor enforceable against it to the full extent
of all its assets and properties, notwithstanding any provisions in any
agreements from time to time relating to the acquisition, financing and
refinancing by the Trustee of its interest in the Property which may limit the
liability of the Trustee or any other Person pursuant to such agreements.
ARTICLE VII
BANKRUPTCY
Section 7.01 No Subrogation. THE GUARANTOR HEREBY WAIVES (FOR ALL
PERIODS OF TIME THAT THE GUARANTEED OBLIGATIONS HAVE NOT BEEN IRREVOCABLY PAID
IN FULL) ANY AND ALL RIGHTS OF SUBROGATION, INDEMNITY, CONTRIBUTION OR
REIMBURSEMENT, ANY BENEFIT OF, OR RIGHT TO ENFORCE ANY REMEDY THAT THE
GUARANTEED PARTIES NOW HAVE OR MAY HEREAFTER HAVE AGAINST EACH OF THE RELEVANT
SUBSIDIARIES IN RESPECT OF THE GUARANTEED OBLIGATIONS, OR ANY PROPERTY, NOW OR
HEREAFTER HELD BY THE AGENT, THE COLLATERAL AGENT, THE TRUSTEE OR THE PURCHASERS
AS SECURITY FOR THE GUARANTEED OBLIGATIONS AND ANY AND ALL SIMILAR RIGHTS THE
GUARANTOR MAY HAVE AGAINST EACH OF THE RELEVANT SUBSIDIARIES UNDER APPLICABLE
LAW OR OTHERWISE. If, notwithstanding the foregoing, any amount shall be paid to
the Guarantor on account of any such subrogation, indemnity, contribution or
reimbursement rights at any time, such amount shall be held in trust for the
benefit of the Guaranteed Parties and shall forthwith be paid to the Trustee to
be credited and applied against the Guaranteed Obligations, whether matured,
unmatured, absolute or contingent, as the Agent and the Trustee may see fit in
their discretion.
Section 7.02 Reinstatement. Notwithstanding anything to the contrary
herein contained, this Agreement and all obligations of the Guarantor hereunder,
shall continue to be effective or be reinstated, as applicable, if at any time,
payment, or any part thereof, of any or all obligations performed by the
Guarantor or any Relevant Subsidiary are rescinded, invalidated, or otherwise
required to be restored or returned by any Guaranteed Party pursuant to any
Bankruptcy Law or upon the insolvency, bankruptcy or reorganization of the
Guarantor or any Relevant Subsidiary (or otherwise) all as though such payment
or application of proceeds had not been made. Without limiting the generality of
the foregoing, if prior to any such rescission, invalidation, declaration,
restoration or return, this Agreement or any other Operative Document shall have
been canceled or surrendered, this Agreement and the Guaranteed Obligations
shall be reinstated in full force and effect, and such prior cancellation or
surrender shall not
26
30
diminish, release, discharge, impair or otherwise affect the obligations of the
Guarantor in respect of the amount of the affected payment or application of
proceeds (or any Lien or collateral securing such obligation).
Section 7.03 Non-Discharged Obligations. Notwithstanding (a) any
modification, discharge or extension of the obligations of the Guarantor
hereunder or the obligations of any Relevant Subsidiary under the Operative
Documents, (b) any disallowance of all or any portion of any Guaranteed Party's
claim for repayment or performance of such obligations, (c) any use of cash or
other collateral pursuant to any Bankruptcy Law or in any bankruptcy or
reorganization case, (d) any agreement or stipulation as to adequate protection
pursuant to any Bankruptcy Law or in any bankruptcy or reorganization case, (e)
any failure by any Guaranteed Party to file or enforce a claim against the
Guarantor, any Relevant Subsidiary or its estate pursuant to any Bankruptcy Law
or in any bankruptcy or reorganization case, or (f) any release, discharge,
rejection, amendment, modification, stay or cure of the rights or obligations of
any Guaranteed Party, the Guarantor or any Relevant Subsidiary that may occur
pursuant to any Bankruptcy Law or in any bankruptcy or reorganization case or
proceeding affecting such parties, whether permanent or temporary, and whether
assented to by any Guaranteed Party, the Guarantor hereby agrees that the
Guarantor shall be obligated to perform hereunder.
ARTICLE VIII
MISCELLANEOUS
Section 8.01 Notices. All notices, consents, offers, directions,
approvals, instructions, requests, and other communications given to any Person
pursuant to this Agreement shall be in writing and be given in the manner set
forth in the Participation Agreement, at the address set forth on the signature
page of this Agreement or at such other address as such party shall designate by
notice to each of the other parties to the Operative Documents.
Section 8.02 Immunity. The Guarantor represents and warrants that it is
not entitled to immunity from judicial proceedings and agrees that, should the
Trustee, the Agent, the Collateral Agent, the APA Agent or other Person bring
any judicial proceedings to enforce the liability of the Guarantor under this
Agreement, no immunity from such proceedings will be claimed by or on behalf of
the Guarantor or with respect to the Guarantor's property. Nothing in this
Section 8.02 shall affect the right of the Trustee, the Agent, the Collateral
Agent, the APA Agent or any other Person to serve process in any manner
permitted by Law or to commence legal proceedings or otherwise proceed against
the Guarantor in any court in which the Guarantor is subject to suit.
Section 8.03 Non-Exclusive Remedies. No right or remedy of any
Guaranteed Party under any Operative Document shall be exclusive of any other
right, power or remedy, but shall be cumulative and in addition to any other
right, power or remedy thereunder or now or hereafter existing by Law or in
equity and the exercise by
27
31
any Guaranteed Party of any one or more of such rights, powers or remedies shall
not preclude the simultaneous or further exercise of any or all of such other
rights, powers or remedies. Any failure to insist upon the strict performance of
any provision hereof or to exercise any option, right, power or remedy contained
herein shall not constitute a waiver or relinquishment thereof for the future.
Receipt by any Guaranteed Party of any amount payable under any Operative
Document with knowledge of a Default or Event of Default shall not constitute a
waiver of such Default or Event of Default, and no waiver by any Guaranteed
Party of any provision of the Operative Documents shall be deemed to be made
unless made in writing. The Guaranteed Parties shall be entitled to injunctive
relief in case of the violation or attempted or threatened violation of any of
the provisions of the Operative Documents by any other party hereto, a decree
compelling performance of any of the provisions hereof, or any other remedy
allowed by Law or in equity.
Section 8.04 Amendments and Waivers. All amendments, waivers, consents,
or approvals arising pursuant to this Agreement shall be consummated in
accordance with Section 8.04 of the Participation Agreement. No waiver by the
Guaranteed Parties of any Default or Event of Default shall in any way be, or be
construed to be, a waiver of any further or subsequent Default or Event of
Default.
Section 8.05 Severability. If any provision of this Agreement or the
application thereof to any Person or circumstance shall be invalid or
unenforceable, then the remaining provisions or the application of such
provision to Persons or circumstances other than those as to which it is invalid
or enforceable, shall continue to be valid and enforceable. The provisions of
this Section 8.05 shall not be construed to limit the rights of the Guaranteed
Parties to exercise remedies as a consequence of an Event of Default arising
pursuant to Section 6.01(o) of the Participation Agreement.
Section 8.06 Further Assurances. The Guarantor hereby agrees to execute
and deliver all such instruments and take all such action as the Guaranteed
Parties may from time to time reasonably request in order fully to effectuate
the purposes of this Agreement.
Section 8.07 Governing Law and Submission to Jurisdiction. (a) THIS
AGREEMENT SHALL BE GOVERNED BY AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF
THE STATE OF NEW YORK.
(b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO ANY OPERATIVE
DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK OR OF THE UNITED
STATES OF AMERICA FOR THE SOUTHERN DISTRICT OF NEW YORK, AND, BY EXECUTION AND
DELIVERY OF THIS AGREEMENT, THE GUARANTOR HEREBY ACCEPTS FOR ITSELF AND IN
RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, THE JURISDICTION OF THE
AFORESAID COURTS. THE GUARANTOR HEREBY IRREVOCABLY WAIVES ANY OBJECTION,
INCLUDING ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM
NON CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY SUCH
28
32
ACTION OR PROCEEDING IN SUCH RESPECTIVE JURISDICTIONS. THIS SUBMISSION TO
JURISDICTION IS NONEXCLUSIVE AND DOES NOT PRECLUDE ANY GUARANTEED PARTY FROM
OBTAINING JURISDICTION OVER THE GUARANTOR IN ANY COURT OTHERWISE HAVING
JURISDICTION.
(c) THE GUARANTOR AND EACH GUARANTEED PARTY HEREBY (I) IRREVOCABLY AND
UNCONDITIONALLY WAIVE, TO THE FULLEST EXTENT PERMITTED BY LAW, TRIAL BY JURY IN
ANY LEGAL ACTION OR PROCEEDING RELATING TO ANY OPERATIVE DOCUMENT AND FOR ANY
COUNTERCLAIM THEREIN; (II) IRREVOCABLY WAIVE, TO THE MAXIMUM EXTENT NOT
PROHIBITED BY LAW, ANY RIGHT IT MAY HAVE TO CLAIM OR RECOVER IN ANY SUCH
LITIGATION ANY SPECIAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES, OR DAMAGES
OTHER THAN, OR IN ADDITION TO, ACTUAL DAMAGES; (III) CERTIFY THAT NO PARTY
HERETO NOR ANY REPRESENTATIVE OR COUNSEL FOR ANY PARTY HERETO HAS REPRESENTED,
EXPRESSLY OR OTHERWISE, OR IMPLIED THAT SUCH PARTY WOULD NOT, IN THE EVENT OF
LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVERS; AND (IV) ACKNOWLEDGE THAT IT
ENTERED INTO THIS AGREEMENT, AND THE TRANSACTIONS CONTEMPLATED HEREBY AND
THEREBY, BASED UPON AMONG OTHER THINGS THE MUTUAL WAIVERS AND CERTIFICATIONS
CONTAINED IN THIS SECTION.
Section 8.08 Time. Time is of the essence in this Agreement, and the
terms herein shall be so construed.
Section 8.09 Benefit. The parties hereto, the Purchasers and their
permitted successors and assigns (including participants in the Instruments
pursuant to Section 5.03 of the Participation Agreement), and any successor
Trustee or successor Collateral Agent or Agent appointed in accordance with the
provisions in the Operative Documents, or successor APA Agent appointed in
accordance with the provisions of the APA, but no others, shall be bound hereby
or entitled to the benefits hereof.
Section 8.10 Entire Agreement. The parties hereto hereby acknowledge
and agree that the Operative Documents represent all of the agreements and
understandings relating to the transactions contemplated by such documents as
between or among the Guaranteed Parties on the one hand and the Guarantor and
its Subsidiaries on the other hand and the parties hereto acknowledge and agree
that all prior written and oral agreements or understandings between or among
such Persons are hereby superseded in their entirety. Notwithstanding the
foregoing, the Guarantor agrees that the beneficiaries of the Original Guaranty
shall continue to have the benefit of the Original Guaranty (in addition to this
Agreement and any other rights they may have under the Operative Documents,
applicable Law or otherwise) and may enforce the Original Guaranty in accordance
with its terms in respect of any Guaranteed Obligations or Guaranteed
Instruments referred to therein, to the extent such Guaranteed Obligations arose
on or prior to the date hereof and remain unpaid or unsatisfied on or after the
date
29
33
hereof or such Guaranteed Instruments remaining outstanding and unpaid on or
after the date hereof.
Section 8.11 Counterparts. The parties may sign this Agreement in any
number of counterparts and on separate counterparts, each of which shall be an
original but all of which when taken together shall constitute one and the same
instrument.
Section 8.12 Reliance. The Guarantor acknowledges that it has not
relied upon any statements, representations or warranties of any of the
Guaranteed Parties or any of their agents, representatives, counsel, officers or
directors in entering into or guaranteeing any of the Operative Documents,
except for the representations and warranties of SSBTC and State Street set
forth in Sections 3.02 and 3.03, respectively, of the Participation Agreement.
Section 8.13 Survival of Indemnities. All indemnities under this
Guaranty Agreement shall survive the termination of this Agreement, the Lease
and the other Operative Documents.
Section 8.14 APA. The Guarantor acknowledges the matters set forth in
Section 1.06(d) of the Participation Agreement and confirms that the
circumstances referred to therein shall not alter, diminish or otherwise impair
or affect the obligations of the Guarantor under this Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the date first set forth above.
30
34
SIGNATURE PAGE FOR GUARANTY AGREEMENT
THE WILLIAMS COMPANIES, INC.
By:
------------------------------------------
Name: James G. Ivey
Title: Treasurer
Address for Notices:
The Williams Companies, Inc..
One Williams Center, Suite 500
Tulsa, Oklahoma 74172
Attention: Mr. James G. Ivey
Facsimile: (918) 573-2065
35
SIGNATURE PAGE FOR GUARANTY AGREEMENT
STATE STREET BANK AND TRUST COMPANY
OF CONNECTICUT, NATIONAL
ASSOCIATION, in its individual
capacity as its interests may appear
in the Operative Documents, but
otherwise not in its individual
capacity but solely as Trustee
By:
------------------------------------------
Name:
Title:
Address for Notices:
Two International Plaza
Boston, Massachusetts 02110-2804
Attention: Mr. Earl Dennison
Telephone: (617) 664-5670
Facsimile: (617) 664-5371
STATE STREET BANK AND TRUST
COMPANY, not in its individual capacity,
but solely as Collateral Agent
By:
------------------------------------------
Name:
Title:
Address for Notices:
Two International Plaza
Boston, Massachusetts 02110-2804
Attention: Mr. Earl Dennison
Telephone: (617) 664-5670
Facsimile: (617) 664-5371
36
SIGNATURE PAGE FOR GUARANTY AGREEMENT
CITIBANK N.A., as Agent
By:
------------------------------------------
Name:
Title:
Address for Notices:
Citibank, N.A.
1200 Smith Street, Suite 2000
Houston, Texas 77002
Attention: Ms. Lydia Junek
Facsimile: (713) 654-2849
with a copy to:
Citibank, N.A., as Agent
Two Penns Way, Suite 200
New Castle, Delaware 19720
Attention: Mr. Brian Maxwell
Facsimile: (302) 894-6120
CITIBANK, N.A., as APA Agent
By:
------------------------------------------
Name:
Title:
37
SCHEDULE I
PERMITTED LIENS
(a) Any purchase money Lien created by the Guarantor or any of its
Subsidiaries to secure all or part of the purchase price of any property (or to
secure a loan made to enable the Guarantor or any of its Subsidiaries to acquire
the property secured by such Lien), provided that the principal amount of the
Debt secured by any such Lien, together with all other Debt secured by a Lien on
such property, shall not exceed the purchase price of the property acquired.
(b) Any Lien existing on any property at the time of the acquisition
thereof by the Guarantor or any of its Subsidiaries, whether or not assumed by
the Guarantor or any of its Subsidiaries, and any Lien on any property acquired
or constructed by the Guarantor or any of its Subsidiaries and created not later
than 12 months after (i) such acquisition or completion of such construction or
(ii) commencement of full operation of such property, whichever is later;
provided, however, that if assumed or created by the Guarantor or any of its
Subsidiaries, the principal amount of the Debt secured by such Lien, together
with all other Debt secured by a Lien on such property, shall not exceed the
purchase price of the property acquired and/or the cost of the property
constructed.
(c) Any Lien created or assumed by the Guarantor or any of its
Subsidiaries on any contract for the sale of any product or service or any
rights thereunder or any proceeds therefrom, including accounts and other
receivables, related to the operation or use of any property acquired or
constructed by the Guarantor or any of its Subsidiaries and created not later
than 12 months after (i) such acquisition or completion of such construction or
(ii) commencement of full operation of such property, whichever is later;
provided, however, that the principal amount of the Debt secured by such
mortgage together with all other Debt secured by any such contract, rights or
property, shall not exceed the purchase price of the property acquired and/or
the cost of the property constructed.
(d) Any Lien existing on any property of a Subsidiary of the Guarantor
at the time it becomes a Subsidiary of the Guarantor.
(e) Any refunding or extension of maturity, in whole or in part, of any
Lien created or assumed in accordance with the provisions of paragraph (a), (b),
(c) or (d) above or (j) below, provided that the principal amount of the Debt
secured by such refunding Lien or extended Lien shall not exceed the principal
amount of the Debt secured by the Lien to be refunded or extended outstanding at
the time of such refunding
S-I-1
38
or extension and that such refunding Lien or extended Lien shall be limited to
the same property that secured the Lien so refunded or extended.
(f) Mechanics' or materialmen's liens arising in the ordinary course of
business which are not more than 90 days past due or are being contested in good
faith by appropriate proceedings or any Lien arising by reason of pledges or
deposits to secure payment of workmen's compensation or other insurance, good
faith deposits in connection with tenders or leases of real estate, bids or
contracts (other than contracts for the payment of money), in each case to
secure obligations of the Guarantor or any of its Subsidiaries.
(g) Deposits to secure public or statutory obligations, deposits to
secure or in lieu of surety, stay or appeal bonds and deposits as security for
the payment of taxes or assessments or other similar charges, in each case to
secure obligations of the Guarantor or any of its Subsidiaries; provided,
however, that the aggregate amount of obligations secured by Liens permitted by
this paragraph (g) shall not exceed 10% of Consolidated Tangible Net Worth of
the Guarantor.
(h) Any Lien arising by reason of deposits with or the giving of any
form of security to any governmental agency or any body created or approved by
law or governmental regulation for any purpose at any time as required by law or
governmental regulation (i) as a condition to the transaction by the Guarantor
or any of its Subsidiaries of any business or the exercise by the Guarantor or
any of its Subsidiaries of any privilege or license, (ii) to enable the
Guarantor or any of its Subsidiaries to maintain self-insurance or to
participate in any fund for liability on any insurance risks or (iii) in
connection with workmen's compensation, unemployment insurance, old age pensions
or other social security with respect to the Guarantor or any of its
Subsidiaries or to enable the Guarantor or any of its Subsidiaries to share in
the privileges or benefits required for companies participating in such
arrangements.
(i) Any Lien which is payable, both with respect to principal and
interest, solely out of the proceeds of oil, gas, coal or other minerals or
timber to be produced from the property subject thereto and to be sold or
delivered by the Guarantor or any of its Subsidiaries, including any interest of
the character commonly referred to as a "production payment".
(j) Any Lien created or assumed by a Subsidiary of the Guarantor on
oil, gas, coal or other mineral or timber property, owned or leased by such
Subsidiary to secure loans to such Subsidiary for the purposes of developing
such properties, including any interest of the character commonly referred to as
a "production payment"; provided, however, that neither the Guarantor nor any
other Subsidiary of the Guarantor shall assume or guarantee such loans or
otherwise be liable in respect thereto.
S-I-2
39
(k) Liens incurred in the ordinary course of business upon
rights-of-way.
(l) Undetermined mortgages and charges incidental to construction or
maintenance arising in the ordinary course of business which are not more than
90 days past due or are being contested in good faith by appropriate
proceedings.
(m) The right reserved to, or vested in, any municipality or
governmental or other public authority or railroad by the terms of any right,
power, franchise, grant, license, permit or by any provision of law, to
terminate or to require annual or other periodic payments as a condition to the
continuance of such right, power, franchise, grant, license or permit.
(n) The Lien of taxes and assessments which are not at the time
delinquent.
(o) The Lien of specified taxes and assessments which are delinquent
but the validity of which is being contested in good faith by the Guarantor or
any of its Subsidiaries by appropriate proceedings and with respect to which
reserves in conformity with generally accepted accounting principles, if
required by such principles, have been provided on the books of the Guarantor or
the relevant Subsidiary of the Guarantor, as the case may be.
(p) The Lien reserved in leases entered into in the ordinary course of
business for rent and for compliance with the terms of the lease in the case of
real property leasehold estates.
(q) Defects and irregularities in the titles to any property (including
rights-of-way and easements) which are not material to the business, assets,
operations or financial condition of the Guarantor and its Subsidiaries
considered as a whole.
(r) Any Liens securing Debt neither assumed nor guaranteed by the
Guarantor or any of its Subsidiaries nor on which any of them customarily pays
interest, existing upon real estate or rights in or relating to real estate
(including rights-of-way and easements) acquired by the Guarantor or any of its
Subsidiaries for pipeline, metering station or right-of-way purposes, which
Liens were not created in anticipation of such acquisition and do not materially
impair the use of such property for the purposes for which it is held by the
Guarantor or such Subsidiary.
(s) Easements, exceptions or reservations in any property of the
Guarantor or any of its Subsidiaries granted or reserved in the ordinary course
of business for the purpose of pipelines, roads, telecommunication equipment and
cable, streets, alleys, highways, railroads, the removal of oil, gas, coal or
other minerals or timber, and
S-I-3
40
other like purposes, or for the joint or common use of real property, facilities
and equipment, which do not materially impair the use of such property for the
purposes for which it is held by the Guarantor or such Subsidiary.
(t) Rights reserved to or vested in any municipality or public
authority to control or regulate any property of the Guarantor or any of its
Subsidiaries, or to use such property in any manner which does not materially
impair the use of such property for the purposes for which it is held by the
Guarantor or such Subsidiary.
(u) Any obligations or duties, affecting the property of the Guarantor
or any of its Subsidiaries, to any municipality or public authority with respect
to any franchise, grant, license or permit.
(v) (i) The Liens of any judgments in an aggregate amount for the
Guarantor and all of its Subsidiaries not in excess of $5,000,000, execution of
which has not been stayed and (ii) the Liens of any judgments in an aggregate
amount for the Guarantor and all of its Subsidiaries not in excess of
$25,000,000, the execution of which has been stayed and which have been appealed
and secured, if necessary and permitted hereby, by the filing of an appeal bond.
(w) Zoning laws and ordinances.
(x) Any Lien existing on any office equipment, data processing
equipment (including computer and computer peripheral equipment), motor
vehicles, aircraft, marine vessels or similar transportation equipment.
(y) Any Lien consisting of interests in receivables in connection with
agreements for sales of receivables of any kind by the Guarantor or any of its
Subsidiaries for cash.
(z) Any Lien not permitted by paragraphs (a) through (y) above or (aa)
below securing Debt of the Guarantor and its Subsidiaries or securing any Debt
of the Guarantor and its Subsidiaries which constitutes a refunding or extension
of any such Debt if at the time of, and after giving effect to, the creation or
assumption of any such Lien, the sum of the aggregate of all Debt of the
Guarantor and its Subsidiaries secured by all such Liens not so permitted by
paragraphs (a) through (y) above or (aa) below plus the amount of Attributable
Obligations of the Guarantor and its Subsidiaries in respect of Sale and
Lease-Back Transactions permitted by Section 5.02(j) does not exceed 5% of the
sum of (i) Consolidated Tangible Net Worth of the Guarantor plus (ii) Debt of
the Guarantor and its Subsidiaries on a Consolidated basis.
(aa) Any overriding royalties or other rights of Pacific Northwest
Pipeline Corporation, a Delaware corporation ("Pacific") and Phillips Petroleum
S-I-4
41
Company ("Phillips") or their respective successors in interest under a contract
dated January 9, 1953, as amended, between Phillips and Pacific, to which the
Guarantor is successor in interest; and the obligations of the Guarantor to
surrender, transfer, release or reassign the leases or interests or rights to
which said instruments relate under the conditions and upon the occurrence of
the events specified in said instruments.
(bb) Any Lien created by the Guarantor or any of its Subsidiaries on
any contract (or any rights thereunder or proceeds therefrom) providing for
advances by the Guarantor or any of its Subsidiaries to finance gas exploration
and development, which Lien is created to secure only indebtedness incurred to
finance such advances.
S-I-5
42
EXHIBIT A
EXISTING LOANS AND INVESTMENTS IN WCG SUBSIDIARIES
Loan Agreement dated as of September 8, 1999 between Williams Communications,
Inc., as Borrower, and TWC, as Lender, filed as Exhibit 10.57 to WCG's Form
10-K/A for the fiscal year ended December 31, 1999.
Various immaterial intercompany receivables between TWC or its Subsidiaries and
the WCG Subsidiaries for services rendered, which are settled on a reasonably
prompt basis. Services are rendered to the WCG Subsidiaries by TWC or its
Subsidiaries pursuant to certain intercompany services agreements, all of which
are filed as exhibits to WCG's Form 10-K/A for the fiscal year ended December
31, 1999.
As of July 25, 2000, TWC's investment in WCG consists of 395,434,965 shares of
Class B common stock.