Execution Copy
================================================================================
AMENDED AND RESTATED
CREDIT AGREEMENT
dated as of
December 1, 1998
AMONG
KINDER MORGAN ENERGY PARTNERS, L.P.,
as the Company
KINDER MORGAN OPERATING L.P. "B",
as the Subsidiary Borrower
THE SUBSIDIARY GUARANTORS,
THE LENDERS PARTY HERETO,
and
FIRST UNION NATIONAL BANK,
as the Arranger, the Syndication Agent, the Administrative Agent,
the Issuing Bank and the Swingline Lender
================================================================================
TABLE OF CONTENTS
Page
----
PRELIMINARY STATEMENTS.........................................................1
ARTICLE I. Definitions.....................................................3
Section 1.01 Defined Terms..............................................3
Section 1.02 Classification of Loans and Borrowings....................28
Section 1.03 Accounting Terms; Changes in GAAP.........................28
Section 1.04 Interpretation............................................28
ARTICLE II. The Credits....................................................29
Section 2.01 Commitments...............................................29
Section 2.02 Loans and Borrowings......................................30
Section 2.03 Requests for Revolving Borrowings.........................30
Section 2.04 Swingline Loans...........................................31
Section 2.05 Telephonic Notices........................................32
Section 2.06 Letters of Credit.........................................32
Section 2.07 Funding of Borrowings.....................................37
Section 2.08 Interest Elections........................................38
Section 2.09 Termination and Reduction of Commitments..................39
Section 2.10 Repayment of Loans; Evidence of Debt......................40
Section 2.11 Prepayment of Loans.......................................41
Section 2.12 Fees......................................................42
Section 2.13 Interest..................................................43
Section 2.14 Alternate Rate of Interest................................44
Section 2.15 Increased Costs...........................................44
Section 2.16 Break Funding Payments....................................45
Section 2.17 Taxes.....................................................46
Section 2.18 Payments Generally; Pro Rata Treatment; Sharing
of Set-offs...............................................47
Section 2.19 Mitigation Obligations; Replacement of Lenders............48
Section 2.20 Extensions of Maturity Date and Reduction Dates;
Removal of Lenders........................................49
ARTICLE III. Conditions Precedent...........................................51
Section 3.01 Conditions Precedent to the Initial Credit Event..........51
Section 3.02 Conditions Precedent to All Credit Events.................53
Section 3.03 Conditions Precedent to the Initial Credit Event
Made on or After any Increase in Availability.............53
Section 3.04 Conditions Precedent to Conversions.......................53
Section 3.05 Delivery of Documents.....................................54
-i-
ARTICLE IV. Representations and Warranties.................................54
Section 4.01 Organization and Qualification............................54
Section 4.02 Authorization, Validity, Etc..............................54
Section 4.03 Governmental Consents, Etc................................55
Section 4.04 Conflicting or Adverse Agreements or Restrictions.........55
Section 4.05 Properties................................................55
Section 4.06 Litigation and Environmental Matters......................56
Section 4.07 Financial Statements......................................56
Section 4.08 Disclosure................................................56
Section 4.09 Investment Company Act....................................57
Section 4.10 Public Utility Holding Company Act........................57
Section 4.11 ERISA.....................................................57
Section 4.12 Tax Returns and Payments..................................57
Section 4.13 Compliance with Laws and Agreements.......................58
Section 4.14 Purpose of Loans..........................................58
Section 4.15 No Intent to Hinder, Delay or Defraud.....................58
Section 4.16 Year 2000.................................................58
ARTICLE V. Affirmative Covenants..........................................59
Section 5.01 Financial Statements and Other Information................59
Section 5.02 Litigation................................................61
Section 5.03 Existence, Conduct of Business............................61
Section 5.04 Payment of Obligations....................................62
Section 5.05 Maintenance of Properties; Insurance......................62
Section 5.06 Books and Records; Inspection Rights......................62
Section 5.07 Compliance with Laws......................................62
Section 5.08 Use of Proceeds and Letters of Credit.....................62
Section 5.09 Further Assurances........................................62
Section 5.10 Performance of Obligations................................63
Section 5.11 Lines of Business.........................................63
Section 5.12 Intercompany Notes........................................63
ARTICLE VI. Negative Covenants.............................................63
Section 6.01 Indebtedness..............................................63
Section 6.02 Liens.....................................................64
Section 6.03 Fundamental Changes.......................................65
Section 6.04 Investments, Loans, Advances, Guarantees and
Acquisitions; Hedging Agreements..........................66
Section 6.05 Restricted Payments.......................................67
Section 6.06 Transactions with Affiliates..............................67
Section 6.07 Restrictive Agreements....................................68
Section 6.08 Sale of Assets............................................68
Section 6.09 Financial Covenants.......................................68
Section 6.10 Amendments to Certain Agreements..........................69
-ii-
ARTICLE VII. Events of Default..............................................69
Section 7.01 Events of Default and Remedies............................69
Section 7.02 Other Remedies............................................71
Section 7.03 Application of Moneys During Continuation of
Event of Default..........................................72
ARTICLE VIII. The Administrative Agent.......................................72
Section 8.01 Appointment, Powers and Immunities........................72
Section 8.02 Reliance by Administrative Agent..........................73
Section 8.03 Defaults; Events of Default...............................73
Section 8.04 Rights as a Lender........................................73
Section 8.05 Indemnification...........................................74
Section 8.06 Non-Reliance on Agents and other Lenders..................74
Section 8.07 Action by Administrative Agent............................75
Section 8.08 Resignation or Removal of Administrative Agent............75
Section 8.09 Duties of Syndication Agent...............................76
ARTICLE IX. Company Guaranty...............................................76
Section 9.01 Company Guaranty..........................................76
Section 9.02 Continuing Guaranty.......................................76
Section 9.03 Effect of Debtor Relief Laws..............................79
Section 9.04 Waiver....................................................80
Section 9.05 Full Force and Effect.....................................80
ARTICLE X. Subsidiary Guarantors Guaranty..............................,..80
Section 10.01 Subsidiary Guarantors Guaranty............................80
Section 10.02 Continuing Guaranty.......................................81
Section 10.03 Effect of Debtor Relief Laws..............................84
Section 10.04 General Limitation on Borrower Guaranteed Obligations.....84
Section 10.05 Rights of Contribution....................................84
Section 10.06 Subrogation...............................................85
Section 10.07 Subordination.............................................85
Section 10.08 Waiver....................................................86
Section 10.09 Full Force and Effect.....................................86
ARTICLE XI. Miscellaneous..................................................87
Section 11.01 Notices, Etc..............................................87
Section 11.02 Waivers; Amendments.......................................88
Section 11.03 Payment of Expenses, Indemnities, etc.....................89
Section 11.04 Successors and Assigns....................................92
Section 11.05 Assignments and Participations............................92
Section 11.06 Survival; Reinstatement...................................94
Section 11.07 Counterparts; Integration; Effectiveness..................95
Section 11.08 Severability..............................................95
Section 11.09 Right of Setoff...........................................95
-iii-
Section 11.10 Governing Law; Jurisdiction; Consent to Service
of Process................................................95
Section 11.11 Waiver of Jury Trial......................................97
Section 11.12 Confidentiality...........................................97
Section 11.13 Interest Rate Limitation..................................97
Section 11.14 Retiring Banks; Release...................................98
Section 11.15 Exculpation Provisions....................................98
SCHEDULES:
- ----------
Schedule 1.01A Existing Indebtedness
Schedule 4.01 Existing Subsidiaries
Schedule 4.06 Disclosed Matters
Schedule 6.02 Existing Liens
Schedule 6.07 Existing Restrictions
EXHIBITS:
- ---------
Exhibit 1.01A -- Form of Administrative Questionnaire
Exhibit 1.01B -- Form of Assignment and Acceptance
Exhibit 1.01C -- Existing Letter of Credit
Exhibit 2.03 -- Form of Borrowing Request
Exhibit 2.06 -- Form of Letter of Credit Request
Exhibit 2.07 -- Form of Notice of Account Designation
Exhibit 2.08 -- Form of Interest Election Request
Exhibit 2.10 -- Form of (Revolving/Swingline) Note
Exhibit 2.11 -- Form of Notice of Prepayment
Exhibit 5.01 -- Form of Compliance Certificate
Exhibit 6.04 -- Form of Subsidiary Guarantor Counterpart
-iv-
AMENDED AND RESTATED
CREDIT AGREEMENT
THIS AMENDED AND RESTATED CREDIT AGREEMENT, dated as of December 1,
1998 (this "Agreement") is among:
(a) Kinder Morgan Energy Partners, L.P., a Delaware limited
partnership (the "Company");
(b) Kinder Morgan Operating L.P. "B", a Delaware limited
partnership (the "Subsidiary Borrower");
(c) Kinder Morgan Operating L.P. "A", a Delaware limited partnership
("OLP `A'"); Kinder Morgan Operating L.P. "C", a Delaware limited partnership
("OLP `C'"); Kinder Morgan Operating L.P. "D", a Delaware limited partnership
("OLP `D'"); Kinder Morgan Natural Gas Liquids Corporation, a Delaware
corporation ("KMNGL"); Kinder Morgan CO2 LLC, a Delaware limited liability
company ("KMCO2"); and Kinder Morgan Bulk Terminals, Inc., a Louisiana
corporation ("KMBT", and together with OLP "A", OLP "C", OLP "D", KMNGL, KMCO2,
the Subsidiary Borrower in its capacity as a guarantor pursuant to Article X and
each other Person that becomes a Subsidiary Guarantor pursuant to Section 6.04,
collectively, the "Subsidiary Guarantors");
(d) the banks and other financial institutions listed on the
signature pages hereof under the caption "Retiring Lenders" (the "Retiring
Lenders" and together with the Continuing Lenders (defined below) collectively,
the "Existing Lenders");
(e) the banks and other financial institutions listed on the
signature pages hereof under the caption "Lenders" (the "Continuing Lenders" and
together with each other Person that becomes a Lender pursuant to Section 11.05,
collectively, the "Lenders"); and
(f) First Union National Bank, a national banking association,
individually as a Lender, as Arranger, syndication agent for the other Lenders
(in such capacity, the "Syndication Agent") and as administrative agent for the
Lenders (in such latter capacity together with any other Person that becomes
Administrative Agent pursuant to Section 8.08, the "Administrative Agent").
PRELIMINARY STATEMENTS
(A) The Company, the Subsidiary Borrower, the Subsidiary Guarantors
(other than KMBT), the Existing Lenders, The Fuji Bank, Limited, New York
Branch, (successor to The Fuji Bank, Limited (Houston Agency) ("Fuji"), Goldman
Sachs Credit Partners L.P., as the syndication agent, and the Administrative
Agent are parties to a credit agreement dated as of February 17, 1998 (the
"Existing Credit Agreement"), which is secured by the Collateral defined
therein.
(B) Fuji has assigned 100% of its Commitment and the Obligations
owing to it to First Union National Bank, and by its execution of this
Agreement, on the Effective Date Den Norske Bank ASA and The Fuji Bank, Limited
(Houston Agency) is assigning 100% of its Commitment and the Obligations owing
to it to First Union National Bank, and Bank One, Texas, NA, is assigning 100%
of its Commitment and the Obligations owing to it to The First National Bank of
Chicago.
(C) Pursuant to the Existing Credit Agreement (a) the Company
borrowed from the Existing Lenders and advanced to OLP "A" funds sufficient to
enable it to (i) repay in full the principal of and accrued interest and
make-whole premium on $110,000,000 of its 8.79% First Mortgage Notes due June
30, 2007 and issued pursuant to a Note Agreement dated as of July 30, 1992 (the
"OLP `A' First Mortgage Notes"), and (ii) repay in full the principal of and
accrued interest on all loans and other amounts outstanding under that certain
Loan Agreement dated effective May 24, 1995 by and between OLP "A" and Bank One,
Texas, NA, as amended to February 17, 1998 (the "OLP `A' Loan Agreement" and
together with the OLP "A" First Mortgage Notes collectively, the "OLP `A'
Refinancing"); (b) (i) the Company borrowed from the Existing Lenders and
advanced to the Subsidiary Borrower funds sufficient to enable it to repay in
full the principal of and accrued interest on all loans and other amounts
outstanding under that certain Credit Agreement dated as of February 14, 1997
among the Subsidiary Borrower, the lenders party thereto and First Union
National Bank, as agent for such lenders, as amended February 17, 1998 (the
"Subsidiary Borrower Credit Agreement"), and (ii) the account party's
reimbursement obligations in respect of that certain irrevocable letter of
credit No. S113181 issued by First Union National Bank for the benefit of Bank
One, Texas, NA, as trustee, for the account of the Subsidiary Borrower in the
face amount of $24,128,548 and in the form of Exhibit 1.01C hereto (the
"Existing Letter of Credit") became an obligation of the Subsidiary Borrower,
and was deemed to have been issued, under the Existing Agreement; (c) the
Company borrowed from the Existing Lenders and advanced to OLP "A" the sum of
$25,000,000 to enable it to contribute such amount together with its carbon
dioxide pipeline system located in West Texas (the "Central Basin Pipeline") to
Shell CO2 Company, Ltd., a Texas limited partnership ("Shell CO2"), in exchange
for a 20% limited partner interest in that partnership (the "Shell JV
Investment"); (d) the Company borrowed from the Existing Lenders and advanced to
OLP "D" the sum of approximately $90,000,000 to (i) enable OLP "D" to purchase
the entire general partner interest in Santa Fe Pacific Pipeline Partners, L.P.,
a Delaware limited partnership ("SFMLP"), (ii) complete the purchase from SFMLP
of its limited partner interest in SFPP, and (iii) complete the transactions
contemplated in Section 1.3(a) and (b) of the Purchase Agreement, including the
contribution to OLP "D" of 100% of the Company's partnership interest in SFPP,
L.P., a Delaware limited partnership ("SFPP") (which currently consists of a
99.5% general partner interest in SFPP) (collectively, the "Santa Fe
Acquisition"); and (e) the Company obtained working capital to be used for its
other partnership purposes.
(D) The parties hereto wish to amend and restate the Existing Credit
Agreement in its entirety, inter alia, to (1) release the Liens on the
Collateral created by the Security Documents (as defined in the Existing Credit
Agreement) and (2) add KMBT as a Subsidiary Guarantor.
-2-
NOW, THEREFORE, the parties hereto agree as follows:
ARTICLE I.
Definitions
-----------
SECTION 1.01 Defined Terms. As used in this Agreement, the
following terms have the meanings specified below:
"ABR", when used in reference to any Loan or Borrowing, refers to whether
such Loan, or the Loans comprising such Borrowing, are bearing interest at a
rate determined by reference to the Alternate Base Rate.
"Administrative Agent" has the meaning specified in the introduction to
this Agreement.
"Administrative Questionnaire" means an Administrative Questionnaire in
the form of Exhibit 1.01A.
"Affiliate" of any Person shall mean (i) any Person directly or indirectly
controlled by, controlling or under common control with such first Person, (ii)
any director or officer of such first Person or of any Person referred to in
clause (i) above and (iii) if any Person in clause (i) above is an individual,
any member of the immediate family (including parents, siblings, spouse and
children) of such individual and any trust whose principal beneficiary is such
individual or one or more members of such immediate family and any Person who is
controlled by any such member or trust. For purposes of this definition, any
Person which owns directly or indirectly 25% or more of the securities having
ordinary voting power for the election of directors or other governing body of a
corporation or 25% or more of the partnership or other ownership interests of
any other Person (other than as a limited partner of such other Person) will be
deemed to "control" (including, with its correlative meanings, "controlled by"
and "under common control with") such corporation or other Person.
"Agreement" has the meaning specified in the introduction to this
Agreement.
"Alternate Base Rate" means, for any day, a rate per annum equal to the
greater of (a) the Federal Funds Effective Rate in effect on such day plus 1/2
of 1% and (b) the Prime Rate in effect for such day. Any change in the Alternate
Base Rate due to a change in the Prime Rate or the Federal Funds Effective Rate
shall be effective from and including the effective date of such change in the
Prime Rate or the Federal Funds Effective Rate, respectively.
"Anniversary Date" means each of February 1, 1999 and February 1, 2000.
"Applicable Margin" means, for any day, with respect to any Eurodollar
Revolving Loan, or with respect to the commitment fees payable hereunder, as the
case may be, the Applicable Margin per annum set forth below under the caption
"Eurodollar Spread" or "Commitment Fee Rate", as the case may be:
-3-
(a) during the period from the Execution Date to the Financial
Statement Delivery Date for the fiscal quarter of the Company ending December
31, 1998, the Applicable Margin shall be as follows:
Eurodollar Spread Commitment Fee Rate
----------------- -------------------
.75% .25%
(b) if the Applicable Margin is to be determined with respect to the
financial statements delivered pursuant to Section 5.01(a) or Section 5.01(b) on
any Financial Statement Delivery Date for any fiscal quarter of the Company
ending on or after December 31, 1998, the Applicable Margin shall be as follows:
(i) if at the end of such fiscal quarter, the Indebtedness to Cash
Flow Ratio is less than 2.0 to 1.0:
Eurodollar Spread Commitment Fee Rate
----------------- -------------------
.75% .25%
(ii) if at the end of such fiscal quarter, the Indebtedness to Cash
Flow Ratio is equal to or greater than 2.0 to 1.0 but less than 2.5 to
1.0:
Eurodollar Spread Commitment Fee Rate
----------------- -------------------
.875% .25%
(iii)if at the end of such fiscal quarter, the Indebtedness to Cash
Flow Ratio is equal to or greater than 2.5 to 1.0 but less than 3.0 to
1.0:
Eurodollar Spread Commitment Fee Rate
----------------- -------------------
1.0% .25%
(iv) if at the end of such fiscal quarter, the Indebtedness to Cash
Flow Ratio is equal to or greater than 3.0 to 1.0 but less than 3.5 to
1.0:
Eurodollar Spread Commitment Fee Rate
----------------- -------------------
1.125% .375%
-4-
(v) if at the end of such fiscal quarter, the Indebtedness to Cash
Flow Ratio is equal to or greater than 3.5 to 1.0:
Eurodollar Spread Commitment Fee Rate
----------------- -------------------
1.25% .375%
Notwithstanding the foregoing, if on or after the Financial Statement
Delivery Date for the fiscal quarter of the Company ending on December 31, 1998
any of the financial statements required pursuant to Section 5.01(a) or Section
5.01(b), as the case may be, shall not have been timely delivered, the
Applicable Margin shall be determined pursuant to clause(b)(v) above until the
date that is five Business Days after the date such statements are delivered.
Each change in the Applicable Margin shall become effective five
Business Days after the Administrative Agent receives notification of the
financial information forming the basis of such change.
"Applicable Percentage" means, with respect to any Lender, the percentage
of the Total Commitment represented by such Lender's Commitment. If the Total
Commitment has terminated or expired, the Applicable Percentages shall be
determined based upon the Total Commitment most recently in effect, giving
effect to any assignments.
"Application" has the meaning specified in Section 2.06(c).
"Assignment and Acceptance" means an assignment and acceptance entered
into by a Lender and an assignee (with the consent of any party whose consent is
required by Section 11.05), and accepted by the Administrative Agent, in the
form of Exhibit 1.01B or any other form approved by the Administrative Agent.
"Available Cash" means, with respect to any fiscal quarter of the Company
(a "Test Quarter"), an amount equal to the algebraic sum of (a) the aggregate of
all cash distributions actually made to and received by the Company from the
Restricted Subsidiaries in respect of their Capital Stock during such fiscal
quarter minus (b) the aggregate amount of all cash disbursements, including
disbursements for operating expenses, payments of principal of and interest on
Indebtedness and taxes (net of amounts received or to be received by the Company
from the Restricted Subsidiaries as reimbursement for such amounts), and capital
expenditures (net of any borrowings to fund such capital expenditures permitted
pursuant to this Agreement), actually paid by the Company during such Test
Quarter, plus, in the case of a decrease, or minus, in the case of an increase
(c) the amount by which, as at the end of such Test Quarter, cash reserves
necessary in the reasonable discretion of the Company's management for the
proper conduct of the business of the Company and the Restricted Subsidiaries
subsequent to such Test Quarter, decreased or increased from the amount of such
reserves as at the end of the immediately preceding fiscal quarter; provided,
that "Available Cash" for any Test Quarter shall always exclude, without
duplication (i) a reserve equal to at least 50% of the aggregate amount of all
semiannual or less frequent (or 100% of all more frequent) interest payments on
-5-
Indebtedness of the Company and/or the Restricted Subsidiaries other than SFPP
payable in the fiscal quarter next succeeding such Test Quarter (assuming for
this purpose in respect of Indebtedness with a variable interest rate that the
same bears interest at the highest rate per annum applicable to such
Indebtedness during the Test Quarter), (ii) a reserve with respect to
Indebtedness of the Company and/or the Restricted Subsidiaries other than SFPP
requiring annual amortization of principal, equal to the product of (A) an
amount equal to 25% of the installment of such principal maturing next after the
end of such Test Quarter multiplied by (B) the number of full fiscal quarters
which will, as of the end of such Test Quarter, have elapsed since the date of
the next preceding such payment (but not more than 75% of the amount of such
installment), and (iii) if such Test Quarter immediately precedes a fiscal
quarter in which a principal payment is due in respect of Indebtedness of the
Company and/or the Restricted Subsidiaries other than SFPP requiring semiannual
or more frequent amortization of principal, a reserve equal to 50% (if
amortization is semiannual) or 100% (if amortization is more frequent) of the
installment of such principal maturing next after the end of such Test Quarter.
"Availability" means, at all times on and after the Effective Date,
$325,000,000.
"Availability Period" means the period from and including the Effective
Date, to but excluding the earlier of the Maturity Date and the date of
termination of the Commitments.
"Bankruptcy Code" has the meaning specified in Section 9.01(a).
"Board" means the Board of Governors of the Federal Reserve System of the
United States of America.
"Board of Directors" means, with respect to any Person, the Board of
Directors of such Person or any committee of the Board of Directors of such
Person duly authorized to act on behalf of the Board of Directors of such
Person.
"Board Resolution" means, with respect to any Person, a copy of a
resolution certified by the Secretary or an Assistant Secretary of such Person
to have been duly adopted by the Board of Directors of such Person and to be in
full force and effect on the date of such certification, and delivered to the
Administrative Agent.
"Bonds" means the Port Facility Refunding Revenue Bonds (Enron
Transportation Services, L.P. Project) Series 1994 in the aggregate principal
amount of $23,700,000, as issued by the Jackson-Union Counties Regional Port
District.
"Borrower Guaranteed Obligations" has the meaning specified in Section
10.01.
"Borrowers" means, collectively, the Company and the Subsidiary Borrower
and "Borrower" means either one of them.
"Borrowing" means (a) Revolving Loans of the same Type, made, converted or
continued on the same date and, in the case of Eurodollar Loans, as to which a
single Interest Period is in effect, or (b) a Swingline Loan.
-6-
"Borrowing Date" means the Business Day upon which any Letter of Credit is
to be issued or any Loan is to be made available to the Company.
"Borrowing Request" has the meaning specified in Section 2.03.
"Business Day" means any day that is not a Saturday, Sunday or other day
on which commercial banks in Houston, Texas, New York, New York, or Charlotte,
North Carolina are authorized or required by law to remain closed; provided
that, when used in connection with a Eurodollar Loan, the term "Business Day"
shall also exclude any day on which banks are not open for dealings in dollar
deposits in the London interbank market.
"Capital Lease Obligations" of any Person means the obligations of such
Person to pay rent or other amounts under any lease of (or other arrangement
conveying the right to use) real or personal property, or a combination thereof,
which obligations are required to be classified and accounted for as capital
leases on a balance sheet of such Person under GAAP, and the amount of such
obligations shall be the capitalized amount thereof determined in accordance
with GAAP.
"Capital Stock" means, with respect to any Person, any and all shares,
interests, rights to purchase, warrants, options, participations or other
equivalents (however designated) of such Person's equity, including all common
stock and preferred stock, any limited or general partnership interest and any
limited liability company membership.
"Central Basin Pipeline" has the meaning specified in the Preliminary
Statements.
"Change in Control" means either (a) the failure of Richard D. Kinder or
William Morgan or both such Persons to control, directly or indirectly, 51% of
the Voting Stock and 51% of the economic interest in the General Partner,
whether through the ability to exercise voting power by control or otherwise, or
(b) the General Partner shall cease to be the sole general partner of the
Company.
"Change in Law" means (a) the adoption of any law, rule or regulation
after the date of this Agreement, (b) any change in any law, rule or regulation
or in the interpretation or application thereof by any Governmental Authority
after the date of this Agreement or (c) compliance by any Lender or the Issuing
Bank (or, for purposes of Section 2.15(b), by any lending office of such Lender
or by such Lender's or the Issuing Bank's holding company, if any) with any
request, guideline or directive (whether or not having the force of law) of any
Governmental Authority made or issued after the date of this Agreement.
"Change of Control Event" means the execution of any definitive agreement
which, when fully performed by the parties thereto, would result in a Change of
Control.
"Charges" has the meaning specified in Section 11.13.
-7-
"Class", when used in reference to any Loan or Borrowing, refers to
whether such Loan, or the Loans comprising such Borrowing, are Revolving Loans
or Swingline Loans.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time.
"Commitment" means, with respect to each Lender, the commitment of such
Lender to make Revolving Loans and to acquire participations in Letters of
Credit and Swingline Loans hereunder, expressed as an amount representing the
maximum aggregate amount of such Lender's Revolving Credit Exposure hereunder,
as such commitment may be (a) reduced from time to time pursuant to Section 2.09
and (b) reduced or increased from time to time pursuant to assignments by or to
such Lender pursuant to Section 11.05. The initial amount of each Lender's
Commitment is set forth on its signature page hereto, or in the Assignment and
Acceptance pursuant to which such Lender shall have assumed its Commitment, as
applicable.
"Communications" has the meaning specified in Section 11.01.
"Company" has the meaning specified in the introduction to this
Agreement.
"Company Cash Flow" means (without duplication), for any period, the sum
of
(a) OLP "A" EBITDA for such period, plus
(b) the EBITDA of the Subsidiary Borrower for such period, plus
(c) the EBITDA of OLP "C" for such period, plus
(d) (i) if, at the end of such period, either SFPP is not a
Subsidiary Guarantor or the SFPP First Mortgage Notes are outstanding or
the SFPP Revolving Credit Facility has not been repaid in full and
terminated, the sum of
(A) cash distributions actually received by the Company from OLP
"D" for such period in respect of its Capital Stock, plus
(B) for any portion of such period prior to the acquisition of
SFPP, distributions actually paid in cash by SFPP,
but not in excess of an amount equal to the EBITDA of SFPP for such period
less the sum for such period of (x) all scheduled payments of principal in
respect of Indebtedness of SFPP not refinanced, including the principal
component of any such payments in respect of Capital Lease Obligations,
plus (y) Interest Expense of SFPP, plus (z) without duplication, the
amount of all Maintenance Capital Expenditures), plus
(C) if "Company Cash Flow" is being determined for purposes of
the Indebtedness to Cash Flow Ratio (but not otherwise), an amount
equal to 200 percent of SFPP Intracompany Refinancing Interest
Expense for such period actually paid in cash, or
-8-
(ii) if, at the end of such period, SFPP is a Subsidiary Guarantor
and no SFPP First Mortgage Notes are outstanding and the SFPP Revolving
Credit Facility has been repaid in full and terminated, the EBITDA of
SFPP, plus
(e) the EBITDA of any other Wholly-Owned Restricted Subsidiary that
is a Subsidiary Guarantor, plus
(f) cash distributions actually received by the Company from any
other Restricted Subsidiary (other than a Wholly-Owned Restricted
Subsidiary);
provided, however, if during any period the Company acquires any Person or all
or substantially all of the assets of any Person except for purposes of Sections
6.09(b) and (c) only, the EBITDA attributable to such assets or an amount equal
to the percentage ownership of the Company in such Person times the EBITDA of
such Person, for such period determined on a pro forma basis (which
determination, in each case, shall be subject to approval of the Required
Lenders, not to be unreasonably withheld) may be included as Company Cash Flow
for such period, if on the date of such acquisition no Indebtedness (other than
Indebtedness permitted pursuant to Section 6.01) is incurred by reason of and
giving effect to such acquisition and such Person or the entity acquiring such
assets, as the case may be, is a Restricted Subsidiary.
"Company Guaranty" means the guaranty of the Company contained in
Article IX.
"Company Interest Expense" means, for any period
(a) if at the end of such period SFPP shall not be a Subsidiary
Guarantor, or if at the end thereof either the SFPP First Mortgage Notes
are outstanding or the SFPP Revolving Credit Facility has not been repaid
in full and terminated, the excess of
(i) all Interest Expense of the Company and its Restricted
Subsidiaries actually paid during such period (excluding, without
duplication (i) Interest Expense so paid by any of the Company or its
Restricted Subsidiaries to any such Restricted Subsidiary or to the
Company ("Intracompany Interest Expense") and (ii) Interest Expense
in respect of Indebtedness of SFPP) over
(ii) interest income actually received during such period by the
Company and its Restricted Subsidiaries (excluding all interest
income actually received by the Company or any of its Restricted
Subsidiaries during such period from any such Restricted Subsidiary
or from the Company ("Intracompany Interest Income")), and
(b) if at the end of such period SFPP shall be a Subsidiary Guarantor
and no SFPP First Mortgage Notes are outstanding and the SFPP Revolving
Credit Facility has been repaid in full and terminated, the excess of
-9-
(i) all Interest Expense of the Company and its Restricted
Subsidiaries actually paid during such period (excluding Intracompany
Interest Expense) over
(ii) interest income actually received during such period by the
Company or any of its Restricted Subsidiaries (excluding Intracompany
Interest Income).
"Consenting Lenders" has the meaning specified in Section 2.20.
"Continuing Lenders" has the meaning specified in the introduction to
this Agreement.
"Credit Event" means the making of any Loan or the issuance or the
extension of any Letter of Credit.
"Default" means any event or condition which upon notice, lapse of time or
both would, unless cured or waived, become an Event of Default.
"Disclosed Matters" means the actions, suits and proceedings and the
environmental matters disclosed in Schedule 4.06.
"Disqualified Stock" means any Capital Stock issued by the Company that,
by its terms (or by the terms of any security into which it is convertible or
for which it is exercisable, redeemable or exchangeable), or upon the happening
of an event or with the passage of time, matures, or is mandatorily redeemable,
pursuant to a sinking fund obligation or otherwise, or is redeemable at the
option of the holder thereof, in whole or in part, in each case on, or prior to,
the Maturity Date, or which is exchangeable or convertible into debt securities
of the Company or any Restricted Subsidiary, except to the extent that such
exchange or conversion rights cannot be exercised prior to the Maturity Date.
"Distribution Date" has the meaning specified in Section 7.03.
"Dollars" or "$" refers to lawful money of the United States of America.
"EBITDA" means (without duplication), with respect to any Person for any
period, the Net Income of such Person for such period determined in accordance
with GAAP, increased (to the extent deducted in determining such earnings for
such period) by the sum of (a) all income taxes (including state franchise taxes
based upon income) of such Person paid or accrued according to GAAP for such
period; (b) Interest Expense of such Person for such period; and (c)
depreciation and amortization of such Person for such period determined in
accordance with GAAP.
"Effective Date" means the date occurring on or before December 31, 1998
on which the conditions specified in Section 3.01 are satisfied (or waived in
accordance with Section 11.02).
"Eligible Assignee" means (a) any Lender; (b) any Affiliate of any Lender;
(c) a commercial bank organized or licensed under the laws of the United States,
or a state thereof,
-10-
and having total assets in excess of $1,000,000,000; (d) a commercial bank
organized under the laws of any other country which is a member of the OECD, or
a political subdivision of any such country, and having total assets in excess
of $1,000,000,000, provided that such bank is acting through a branch or agency
located in the country in which it is organized or another country which is also
a member of the OECD; (e) a finance company, insurance company or other
financial institution or fund (whether a corporation, partnership, trust or
other entity) that is engaged in making, purchasing or otherwise investing in
commercial loans in the ordinary course of its business and having a combined
capital and surplus or total assets of at least $100,000,000; and (f) any other
entity approved by the Administrative Agent and the Company.
"Environmental Laws" means all laws, rules, regulations, codes,
ordinances, orders, decrees, judgments, injunctions, notices or binding
agreements issued, promulgated or entered into by any Governmental Authority,
relating in any way to the environment, preservation or reclamation of natural
resources, the management, release or threatened release of any Hazardous
Material or to health and safety matters.
"Environmental Liability" means any liability, contingent or otherwise
(including any liability for damages, costs of environmental remediation, fines,
penalties or indemnities), of the Company or any Subsidiary directly or
indirectly resulting from or based upon (a) violation of any Environmental Law,
(b) the generation, use, handling, transportation, storage, treatment or
disposal of any Hazardous Materials, (c) exposure to any Hazardous Materials,
(d) the release of any Hazardous Materials into the environment, or (e) any
contract, agreement or other consensual arrangement pursuant to which liability
is assumed or imposed with respect to any of the foregoing.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time.
"ERISA Affiliate" means any trade or business (whether or not
incorporated) that, together with the Company, is treated as a single employer
under Section 414(b) or (c) of the Code or, solely for purposes of Section 302
of ERISA and Section 412 of the Code, is treated as a single employer under
Section 414 of the Code.
"ERISA Event" means (a) any "reportable event", as defined in Section 4043
of ERISA or the regulations issued thereunder with respect to a Plan (other than
an event for which the 30-day notice period is waived); (b) the existence with
respect to any Plan of an "accumulated funding deficiency" (as defined in
Section 412 of the Code or Section 302 of ERISA), whether or not waived; (c) the
filing pursuant to Section 412(d) of the Code or Section 303(d) of ERISA of an
application for a waiver of the minimum funding standard with respect to any
Plan; (d) the incurrence by the Company or any of its ERISA Affiliates of any
liability under Title IV of ERISA with respect to the termination of any Plan;
(e) the receipt by the Company or any ERISA Affiliate from the PBGC or a plan
administrator of any notice relating to an intention to terminate any Plan or
Plans or to appoint a trustee to administer any Plan; (f) the incurrence by the
Company or any ERISA Affiliate of any liability with respect to the withdrawal
or partial withdrawal from any Plan or Multiemployer Plan; or (g) the receipt by
the Company or
-11-
any ERISA Affiliate of any notice, or the receipt by any Multiemployer Plan from
the Company or any ERISA Affiliate of any notice, concerning the imposition of
Withdrawal Liability or a determination that a Multiemployer Plan is, or is
expected to be, insolvent or in reorganization, within the meaning of Title IV
of ERISA.
"Eurodollar", when used in reference to any Loan or Borrowing, refers to
whether such Loan, or the Loans comprising such Borrowing, are bearing interest
at a rate determined by reference to the LIBOR Rate.
"Event of Default" has the meaning specified in Section 7.01.
"Excess Funding Obligor" has the meaning specified in Section 10.05.
"Excess Payment" has the meaning specified in Section 10.05.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Excluded Taxes" means, with respect to the Administrative Agent, any
Lender, the Issuing Bank or any other recipient of any payment to be made by or
on account of any Obligation, (a) income or franchise taxes imposed on (or
measured by) its net income by the United States of America, or by the
jurisdiction under the laws of which such recipient is organized or in which its
principal office is located or, in the case of any Lender, in which its
applicable lending office is located, (b) any branch profits taxes imposed by
the United States of America or any similar tax imposed by any other
jurisdiction in which either Borrower is located and (c) in the case of a
Foreign Lender (other than an assignee pursuant to a request by the Company
under Section 2.19(b)), any withholding tax that is imposed on amounts payable
to such Foreign Lender at the time such Foreign Lender becomes a party to this
Agreement or is attributable to such Foreign Lender's failure or inability to
comply with Section 2.17(e), except to the extent that such Foreign Lender's
assignor (if any) was entitled, at the time of assignment, to receive additional
amounts from a Borrower with respect to such withholding tax pursuant to Section
2.17(a).
"Execution Date" means the earliest date upon which all of the following
shall have occurred: counterparts of this Agreement shall have been executed by
the Loan Parties and each Lender listed on the signature pages hereof and the
Administrative Agent shall have received counterparts hereof which taken
together, bear the signature of the Loan Parties and each Lender and the
Administrative Agent.
"Existing Credit Agreement" has the meaning specified in the Preliminary
Statements.
"Existing Lenders" has the meaning specified in the introduction to this
Agreement.
"Existing Letter of Credit" has the meaning specified in the Preliminary
Statements.
"Existing Maturity Date" has the meaning specified in Section 2.20.
"Existing Reduction Date" has the meaning specified in Section 2.20.
-12-
"Federal Funds Effective Rate" means, for any day, the weighted average
(rounded upwards, if necessary, to the next 1/100 of 1%) of the rates on
overnight Federal funds transactions with members of the Federal Reserve System
arranged by Federal funds brokers, as published on the next succeeding Business
Day by the Federal Reserve Bank of New York, or, if such rate is not so
published for any day that is a Business Day, the average (rounded upwards, if
necessary, to the next 1/100 of 1%) of the quotations for such day for such
transactions received by the Administrative Agent from three Federal funds
brokers of recognized standing selected by it.
"Fee Letter" has the meaning specified in Section 2.12(c).
"Financial Statement Delivery Date" means the date on which the quarterly
or annual financial statements of the Company are to be delivered pursuant to
Section 5.01(a) or Section 5.01(b), as the case may be.
"Fixed Charges" means, at the end of any fiscal quarter of the Company,
the sum of (a) all payments of principal in respect of Indebtedness of the
Company and the Restricted Subsidiaries (other than SFPP) (including the
principal component of any payments in respect of Capital Lease Obligations)
payable during the next four consecutive fiscal quarters after eliminating all
offsetting debits and credits between the Company and such Restricted
Subsidiaries and all other items required to be eliminated in the course of the
preparation of consolidated financial statements of the Company and the
Restricted Subsidiaries in accordance with GAAP and (b) Company Interest Expense
for the four consecutive fiscal quarters then ended.
"Foreign Lender" means any Lender that is organized under the laws of a
jurisdiction other than that in which either Borrower is located. For purposes
of this definition, the United States of America, each state thereof and the
District of Columbia shall be deemed to constitute a single jurisdiction.
"Fuji" has the meaning specified in the Preliminary Statements.
"GAAP" means generally accepted accounting principles in the United States
of America from time to time, including as set forth in the opinions, statements
and pronouncements of the Accounting Principles Board of the American Institute
of Certified Public Accountants and the Financing
Accounting Standards Board.
"General Partner" means Kinder Morgan G.P., Inc., a Delaware corporation.
"Governmental Authority" means the government of the United States of
America, any other nation or any political subdivision thereof, whether state or
local, and any agency, authority, instrumentality, regulatory body, court,
central bank or other entity exercising executive, legislative, judicial,
taxing, regulatory or administrative powers or functions of or pertaining to
government.
-13-
"Guarantee" of or by any Person (the "guarantor") means any obligation,
contingent or otherwise, of the guarantor guaranteeing or having the economic
effect of guaranteeing any Indebtedness or other obligation of any other Person
(the "primary obligor") in any manner, whether directly or indirectly, and
including any obligation of the guarantor, direct or indirect, (a) to purchase
or pay (or advance or supply funds for the purchase or payment of) such
Indebtedness or other obligation or to purchase (or to advance or supply funds
for the purchase of) any security for the payment thereof, (b) to purchase or
lease property, securities or services for the purpose of assuring the owner of
such Indebtedness or other obligation of the payment thereof, (c) to maintain
working capital, equity capital or any other financial statement condition or
liquidity of the primary obligor so as to enable the primary obligor to pay such
Indebtedness or other obligation or (d) as an account party in respect of any
letter of credit or letter of guaranty issued to support such Indebtedness or
obligation; provided, that the term Guarantee shall not include endorsements for
collection or deposit in the ordinary course of business.
"Hazardous Materials" means all explosive or radioactive substances or
wastes and all hazardous or toxic substances, wastes or other pollutants,
including petroleum or petroleum distillates, asbestos or asbestos containing
materials, polychlorinated biphenyls, radon gas, infectious or medical wastes
and all other substances or wastes of any nature regulated pursuant to any
Environmental Law.
"Hedging Agreement" means any interest rate protection agreement, foreign
currency exchange agreement, commodity price protection agreement or other
interest or currency exchange rate or commodity price hedging arrangement.
"Indebtedness" of any Person means, without duplication, (a) all
obligations of such Person for borrowed money or with respect to deposits or
advances of any kind, (b) all obligations of such Person evidenced by bonds,
debentures, notes or similar instruments, (c) all obligations of such Person
under conditional sale or other title retention agreements relating to property
acquired by such Person, (d) all obligations of such Person in respect of the
deferred purchase price of property or services or any other similar obligation
upon which interest charges are customarily paid (excluding trade accounts
payable incurred in the ordinary course of business), (e) all Indebtedness of
others secured by (or for which the holder of such Indebtedness has an existing
right, contingent or otherwise, to be secured by) any Lien on property owned or
acquired by such Person, whether or not the Indebtedness secured thereby has
been assumed, (f) all Guarantees by such Person of Indebtedness of others
(provided that in the event that any Indebtedness of the Company or any
Restricted Subsidiary shall be the subject of a Guarantee by one or more
Restricted Subsidiaries or by the Company, as the case may be, the aggregate
amount of the outstanding Indebtedness of the Company and its Restricted
Subsidiaries in respect thereof shall be determined by reference to the primary
Indebtedness so guaranteed, and without duplication by reason of the existence
of any such Guarantee), (g) all Capital Lease Obligations of such Person, (h)
all obligations, contingent or otherwise, of such Person as an account party in
respect of letters of credit and letters of guaranty and (i) all obligations,
contingent or otherwise, of such Person in respect of bankers' acceptances. The
Indebtedness of any Person shall include the Indebtedness of any other Person
(including any partnership in which such Person is a general partner) to the
extent such Person is liable therefor as a result of
-14-
such Person's ownership interest in or other relationship with such entity,
except to the extent the terms of such Indebtedness provide that such Person is
not liable therefor.
"Indebtedness to Cash Flow Ratio" means, at any date, the ratio of the
then outstanding Indebtedness of the Company to Company Cash Flow for the four
full fiscal quarters then most recently ended.
"Indemnified Taxes" means Taxes other than Excluded Taxes.
"Information Memorandum" means the Confidential Information Memorandum
dated January 1998 (Kinder Morgan Energy Partners L.P. $300,000,000 Senior
Secured Credit Facility).
"Initial Reduction Date" has the meaning specified in Section 2.09(a).
"Intercompany Notes" has the meaning specified in Section 5.12.
"Interest Election Request" has the meaning specified in Section 2.08.
"Interest Expense" means (without duplication), for any Person for any
period, the aggregate amount of interest, whether expensed or capitalized, paid,
accrued or scheduled to be paid during such period in respect of the
Indebtedness of such Person including (a) the interest portion of any deferred
payment obligation; (b) the portion of any rental obligation in respect of
Capital Lease Obligations allocable to interest expenses; and (c) any non-cash
interest payments or accruals, all determined in accordance with GAAP.
"Interest Payment Date" means (a) with respect to any ABR Loan (including
a Swingline Loan), the last Business Day of each January, April, July and
October and (b) with respect to any Eurodollar Loan, the last Business Day of
the Interest Period applicable to the Borrowing of which such Loan is a part
and, in the case of a Eurodollar Borrowing with an Interest Period of more than
three months' duration, each day prior to the last day of such Interest Period
that occurs at intervals of three months' duration after the first day of such
Interest Period.
"Interest Period" means with respect to any Eurodollar Borrowing, the
period commencing on the date of such Borrowing and ending on the numerically
corresponding day in the calendar month that is one, two, three or six months
thereafter, as the Company may elect; provided, that (a) if any Interest Period
would end on a day other than a Business Day, such Interest Period shall be
extended to the next succeeding Business Day unless such next succeeding
Business Day would fall in the next calendar month, in which case such Interest
Period shall end on the next preceding Business Day and (b) any Interest Period
that commences on the last Business Day of a calendar month (or on a day for
which there is no numerically corresponding day in the last calendar month of
such Interest Period) shall end on the last Business Day of the last calendar
month of such Interest Period. For purposes hereof, the date of a Borrowing
initially shall be the date on which such Borrowing is made and, in the case of
a
-15-
Revolving Borrowing, thereafter shall be the effective date of the most recent
conversion or continuation of such Borrowing.
"Intracompany Interest Expense" has the meaning specified in the
definition of "Company Interest Expense" in this Section 1.01.
"Intracompany Interest Income" has the meaning specified in the definition
of "Company Interest Expense" in this Section 1.01.
"Issuing Bank" means First Union National Bank, in its capacity as the
issuer of Letters of Credit hereunder, and its successors in such capacity as
provided in Section 2.06(j).
"KMBT" has the meaning specified in the introduction to this Agreement.
"KMNGL" has the meaning specified in the introduction to this
Agreement.
"KMCO2" has the meaning specified in the introduction to this Agreement.
"LC Disbursement" means a payment made by the Issuing Bank pursuant to a
Letter of Credit.
"LC Exposure" means, at any time, the sum of (a) the aggregate undrawn
amount of all outstanding Letters of Credit at such time plus (b) the aggregate
amount of all LC Disbursements that have not yet been reimbursed by or on behalf
of the applicable Borrower at such time. The LC Exposure of any Lender at any
time shall be its Applicable Percentage of the total LC Exposure at such time.
"Lender" has the meaning specified in the introduction to this Agreement.
"Lenders" has the meaning specified in the introduction to this Agreement.
Unless the context otherwise requires, the term "Lenders" includes the Swingline
Lender.
"Letter of Credit" means the Existing Letter of Credit or any letter of
credit issued pursuant to this Agreement.
"Letter of Credit Request" has the meaning specified in Section 2.06.
"LIBOR" shall mean the rate of interest determined on the basis of the
rate for deposits in dollars in an amount substantially equal to the amount of
the applicable Loan for a period equal to the applicable Interest Period
commencing on the first day of such Interest Period appearing on Dow Jones
Market Service (formerly Telerate) Page 3750 as of 11:00 a.m. (London time) two
Business Days prior to the first day of the applicable Interest Period. In the
event that such rate does not appear on Telerate Page 3750, "LIBOR" shall be
determined by the Administrative Agent to be the rate per annum at which
deposits in dollars are offered by leading reference banks in the London
interbank market to First Union at approximately 11:00 a.m. (London time)
-16-
two Business Days prior to the first day of the applicable Interest Period for a
period equal to such Interest Period and in an amount substantially equal to the
amount of the applicable Loan.
"LIBOR Rate" shall mean, with respect to any LIBOR Loan for any Interest
Period for such Loan, a rate per annum (rounded upwards, if necessary, to the
nearest 1/100 of 1%) determined by the Administrative Agent to be equal to the
quotient of (i) LIBOR for such Loan for such Interest Period divided by (ii) 1
minus the Reserve Requirement for such Loan for such Interest Period.
"Lien" means, with respect to any asset, (a) any mortgage, deed of trust,
lien, pledge, hypothecation, encumbrance, charge or security interest in, on or
of such asset and (b) the interest of a vendor or a lessor under any conditional
sale agreement, capital lease or title retention agreement (or any financing
lease having substantially the same economic effect as any of the foregoing)
relating to such asset.
"Loan Documents" mean, collectively, this Agreement (including the Company
Guaranty and the Subsidiary Guarantors Guaranty), the Notes, if any, the
Intercompany Notes, the Applications, the Fee Letter and all other instruments
and documents from time to time executed and delivered by any Loan Party in
connection herewith and therewith; provided, however, for purposes of Article IX
and Article X, Loan Documents shall not include the Intercompany Notes.
"Loan Party" means the Company, the Subsidiary Borrower or any Subsidiary
Guarantor and "Loan Parties" means the Company, the Subsidiary Borrower and the
Subsidiary Guarantors.
"Loans" means advances made by the Lenders to the Company pursuant to
this Agreement.
"Maintenance Capital Expenditures" means cash capital expenditures made to
maintain, up to the level thereof that existed on the Execution Date, the
throughput, deliverable capacity, terminaling capacity, or fractionation
capacity (assuming normal operating conditions, including down-time and
maintenance) of the assets of the Company and the Restricted Subsidiaries, taken
as a whole, as such assets existed on the Execution Date and shall, therefore,
not include cash capital expenditures made in respect of capital additions and
improvements. Where cash capital expenditures are made in part to effectuate the
capacity maintenance level referred to in the immediately preceding sentence and
in part for other purposes, the General Partner's good faith allocation thereof
between the part used to maintain such capacity level and the part used for
other purposes shall be conclusive.
"Make-Whole Premium" means the make-whole premium paid by OLP "A" on its
8.79% First Mortgage Notes due June 30, 2007.
"Material Adverse Effect" means, relative to any occurrence of whatever
nature (including any adverse determination in any litigation, arbitration or
governmental investigation or proceeding) and after taking into account actual
insurance coverage and effective
-17-
indemnification with respect to such occurrence, (a) a material adverse effect
on the financial condition, business or operations of the Company and the
Restricted Subsidiaries taken as a whole, (b) the impairment of (i) the ability
of the Loan Parties to collectively perform the payment or other material
obligations hereunder or under the other Loan Documents or (ii) the ability of
the Administrative Agent or the Lenders to realize the material benefits
intended to be provided by the Loan Parties under the Loan Documents or (c) the
subjection of any of the Administrative Agent, the Issuing Bank or any Lender to
any civil or criminal liability.
"Maturity Date" means the earlier of (a) February 1, 2005, as such date
may be extended pursuant to Section 2.20, and (b) the acceleration of the
Obligations pursuant to Section 7.01.
"Maximum Rate" has the meaning specified in Section 11.13.
"Mont Belvieu" means Mont Belvieu Associates, a Texas general partnership
of which each of KMNGL and Enterprise Products Co. owns a 50% general partner
interest and in which KMNGL has assigned 99% of its profits interest to OLP "A".
"Moody's" means Moody's Investors Service, Inc.
"Multiemployer Plan" means a multiemployer plan as defined in Section
4001(a)(3) of ERISA.
"Net Income" means for any Person for any period, the net income or (net
loss) of such Person for such period (taken as a cumulative whole), as
determined in accordance with GAAP, provided that there shall be excluded,
without duplication, from such net income (to the extent otherwise included
therein):
(a) net extraordinary gains and losses (other than, in the case of
losses, losses resulting from charges against net income to establish or
increase reserves for potential environmental liabilities and reserves for
exposure of such Person under rate cases);
(b) net gains or losses in respect of dispositions of assets other
than in the ordinary course of business; and
(c) any gains or losses attributable to write-ups or write-downs of
assets; and
(d) proceeds of any key man insurance, or any insurance on property,
plant or equipment.
"New Subsidiary" has the meaning specified in Section 6.04.
"Nominee" has the meaning specified in Section 2.20.
"Non-Consenting Lenders" has the meaning specified in Section 2.20.
"Note" has the meaning specified in Section 2.10.
-18-
"Notice of Account Designation" has the meaning specified in Section
2.07.
"Notice of Default" has the meaning specified in Section 7.01.
"Notice of Extension" has the meaning specified in Section 2.20.
"Notice of Prepayment" has the meaning specified in Section 2.11.
"Obligations" means collectively:
(a) the payment of all indebtedness and liabilities by, and
performance of all other obligations of, the Company in respect of the Loans;
(b) all obligations of the Company and the Subsidiary Borrower under,
with respect to, and relating to the Letters of Credit whether contingent or
matured;
(c) all obligations of the Company or any Restricted Subsidiary
(other than SFPP) owing to any Lender under any Hedging Agreement;
(d) the payment of all other indebtedness and liabilities by and
performance of all other obligations of, the Company and the Subsidiary Borrower
to the Administrative Agent, the Issuing Bank and the Lenders under, with
respect to, and arising in connection with, the Loan Documents, and the payment
of all indebtedness and liabilities of the Company and the Subsidiary Borrower
to the Administrative Agent, the Issuing Bank and the Lenders for fees, costs,
indemnification and expenses (including reasonable attorneys' fees and expenses)
under the Loan Documents;
(e) the reimbursement of all sums advanced and costs and expenses
incurred by the Administrative Agent under any Loan Document (whether directly
or indirectly) in connection with the Obligations or any part thereof or any
renewal, extension or change of or substitution for the Obligations or, any part
thereof, whether such advances, costs and expenses were made or incurred at the
request of any Loan Party or the Administrative Agent; and
(f) all renewals, extensions, amendments and changes of, or
substitutions or replacements for, all or any part of the items described under
clauses (a) through (e) above.
"OECD" means the Organization for Economic Cooperation and Development
(or any successor).
"OLP `A'" has the meaning specified in the introduction to this
Agreement.
"OLP `A' EBITDA" means (without duplication), for any period, the sum of
(a) the EBITDA of OLP " A" for such period (not including, however, the EBITDA
of any Person in which OLP "A" owned Capital Stock at any time during such
period), plus (b) the aggregate of all distributions actually received by OLP
"A" in respect of such period from any Person in which OLP "A" owned Capital
Stock during all or any portion of such period; provided
-19-
however, that (y) the EBITDA of OLP "A" will be calculated for such period
without regard to the Make-Whole Premium and (z) notwithstanding anything to the
contrary contained in this definition, the EBITDA of OLP "A" for each of the
four quarters most recently ended preceding March 5, 1998 shall be computed on a
pro forma basis which assumes that the EBITDA from ownership and operation of
the Central Basin Pipeline for each such quarter was $3,625,000 (i.e., an amount
equal to the quarterly priority distribution to be received by KMCO2 during the
first 16 quarters ending after March 5, 1998).
"OLP `A' First Mortgage Notes" has the meaning specified in the
Preliminary Statements.
"OLP `A' Loan Agreement" has the meaning specified in the Preliminary
Statements.
"OLP `A' Refinancing" has the meaning specified in the Preliminary
Statements.
"OLP `B' Refinancing" has the meaning specified in the Preliminary
Statements.
"OLP `C'" has the meaning specified in the introduction to this
Agreement.
"OLP `D'" has the meaning specified in the introduction to this
Agreement.
"Other Taxes" means any and all present or future stamp or documentary
taxes or any other excise or property taxes, charges or similar levies arising
from any payment made hereunder or from the execution, delivery or enforcement
of, or otherwise with respect to, this Agreement.
"Participant" has the meaning specified in Section 11.05(e).
"PBGC" means the Pension Benefit Guaranty Corporation referred to and
defined in ERISA and any successor entity performing similar functions.
"Permitted Encumbrances" means:
(a) Liens imposed by law for taxes that are not yet due or are being
contested in compliance with Section 5.04;
(b) carriers', warehousemen's, mechanics', materialmen's, repairmen's
and other like Liens imposed by law, arising in the ordinary course of business
and securing obligations that are not overdue by more than 30 days or are being
contested in compliance with Section 5.04;
(c) pledges and deposits made in the ordinary course of business in
compliance with workers' compensation, unemployment insurance and other social
security laws or regulations;
-20-
(d) deposits to secure the performance of bids, trade contracts,
leases, statutory obligations, surety and appeal bonds, performance bonds and
other obligations of a like nature, in each case in the ordinary course of
business;
(e) easements, zoning restrictions, rights-of-way and similar
encumbrances on real property imposed by law or arising in the ordinary course
of business that do not secure any monetary obligations and do not materially
detract from the value of the affected property or interfere with the ordinary
conduct of business of the Company or any Subsidiary;
(f) judgment and attachment Liens not giving rise to an Event of
Default or Liens created by or existing from any litigation or legal proceeding
that are currently being contested in good faith by appropriate proceedings,
promptly instituted and diligently conducted, and for which adequate reserves
have been made to the extent required by GAAP;
(g) any interest or title of a lessor in property subject to any
Capitalized Lease Obligation or operating lease which, in each case, is
permitted under this Agreement; and
(h) Liens in favor of collecting or payor banks having a right of
setoff, revocation, refund or chargeback with respect to money or instruments of
the Company or any Restricted Subsidiary on deposit with or in possession of
such bank;
provided that the term "Permitted Encumbrances" shall not include any Lien
securing Indebtedness.
"Permitted Investments" means:
(a) direct obligations of, or obligations the principal of and
interest on which are unconditionally guaranteed by, the United States of
America (or by any agency thereof to the extent such obligations are backed by
the full faith and credit of the United States of America), in each case
maturing within one year from the date of acquisition thereof;
(b) investments in commercial paper issued by a Person that is not
the Company or an Affiliate of the Company maturing within 270 days from the
date of acquisition thereof and having, at such date of acquisition, an
investment grade rating from S&P or from Moody's;
(c) investments in certificates of deposit, banker's acceptances and
time deposits maturing within 180 days from the date of acquisition thereof
issued or guaranteed by or placed with, and money market deposit accounts issued
or offered by, any domestic office of any commercial bank organized under the
laws of the United States of America or any state thereof which has a combined
capital and surplus and undivided profits of not less than $500,000,000;
(d) fully collateralized repurchase agreements with a term of not
more than 30 days for securities described in clause (a) above and entered into
with a financial institution satisfying the criteria described in clause (c)
above; and
-21-
(e) investments in demand deposit accounts with any Lender or with a
financial institution satisfying the criteria described in clause (c) above.
"Person" means any natural person, corporation, limited liability company,
trust, joint venture, association, company, partnership, Governmental Authority
or other entity.
"Plan" means any employee pension benefit plan (other than a Multiemployer
Plan) subject to the provisions of Title IV of ERISA or Section 412 of the Code
or Section 302 of ERISA, and in respect of which the Company or any ERISA
Affiliate is (or, if such plan were terminated, would under Section 4069 of
ERISA be deemed to be) an "employer" as defined in Section 3(5) of ERISA.
"Pledged Bonds" has the meaning specified in Section 2.06.
"Prime Rate" shall mean the rate of interest from time to time announced
publicly by the Administrative Agent at the Principal Office as its prime
commercial lending rate. Such rate is set by the Administrative Agent as a
general reference rate of interest, taking into account such factors as the
Administrative Agent may deem appropriate, it being understood that many of the
Administrative Agent's commercial or other loans are priced in relation to such
rate, that it is not necessarily the lowest or best rate actually charged to any
customer and that the Administrative Agent may make various commercial or other
loans at rates of interest having no relationship to such rate.
"Principal Office" shall mean the principal office of the Administrative
Agent, presently located at 301 South College Street, TW-10, Charlotte, North
Carolina 28288-0608 or such other location as designated by the Administrative
Agent from time to time.
"Pro Rata Share" has the meaning specified in Section 10.05.
"Purchase Agreement" shall mean the Purchase Agreement dated as of the
18th day of October, 1997, by and among the Company, the General Partner, SFMLP,
Santa Fe Pacific Pipelines, Inc., a Delaware corporation, and SFP Pipelines,
Inc., a Delaware corporation, and SFP Pipeline Holdings, Inc., a Delaware
corporation, as amended.
"Qualified Stock" means any Capital Stock issued by the Company that is
not Disqualified Stock.
"Reduction Date" has the meaning specified in Section 2.09(a).
"Refinancing Indebtedness" means any Indebtedness of the Company or any
Restricted Subsidiary issued in exchange for, or the net proceeds of which are
applied entirely to substantially concurrently repay, refinance, refund or
replace, Indebtedness of the Company or any Restricted Subsidiary (a) existing
on the Execution Date and listed on Schedule 1.01A or (b) which would exist on
the Execution Date (assuming that all unfunded commitments to advance any such
Indebtedness are fully funded) (the "Refinanced Indebtedness"), to the extent
such Refinancing Indebtedness:
-22-
(a) is issued in a principal amount (or if such Indebtedness is
issued at an original issue discount, is issued at an original issue price) not
exceeding the outstanding principal amount (or, if such Refinanced Indebtedness
was issued at an original issue discount, not exceeding the outstanding accrued
principal amount) of such Refinanced Indebtedness; and
(b) if the Refinanced Indebtedness is Indebtedness of the Company and
ranks by contract, by its terms or otherwise junior in right of payment to the
Obligations, (A) is unsecured and does not have a final scheduled maturity and
is not subject to any principal payments, including payments upon mandatory or
optional redemption, prior to the dates of analogous payments under the
Refinanced Indebtedness, and (B) has subordination provisions effective to
subordinate such Indebtedness to the Obligations at least to the extent that
such Refinanced Indebtedness is subordinated to the Obligations; and
(c) if the Refinanced Indebtedness is Indebtedness of the Company
which is pari passu in right of payment with the Obligations, (A) is either pari
passu or is subordinated in right of payment to the Obligations, (B) does not
have a final scheduled maturity and is not subject to any principal payments,
including payments upon mandatory or optional redemption, prior to the final
scheduled maturity date of the Refinanced Indebtedness, and (C) if pari passu is
not secured by a Lien on any property or assets of the Company or any Restricted
Subsidiary in addition to Liens securing the Refinanced Indebtedness or if
subordinated, is unsecured.
"Register" has the meaning specified in Section 11.05.
"Regulation A" means Regulation A of the Board, as the same is from time
to time in effect, and all official rulings and interpretations thereunder or
thereof.
"Regulation D" means Regulation D of the Board, as the same is from time
to time in effect, and all official rulings and interpretations thereunder or
thereof.
"Regulation T" means Regulation T of the Board, as the same is from time
to time in effect, and all official rulings and interpretations thereunder or
thereof.
"Regulation U" means Regulation U of the Board, as the same is from time
to time in effect, and all official rulings and interpretations thereunder or
thereof.
"Regulation X" means Regulation X of the Board, as the same is from time
to time in effect, and all official rulings and interpretations thereunder or
thereof.
"Related Parties" means, with respect to any specified Person, such
Person's Affiliates and the respective directors, officers, employees, agents
and advisors of such Person and such Person's Affiliates.
"Relevant Anniversary Date" has the meaning specified in Section 2.20.
-23-
"Required Lenders" means, at any time, Lenders having Revolving Credit
Exposures and unused Commitments representing 66_% of the sum of the total
Revolving Credit Exposures and unused Commitments at such time.
"Requirement of Law" shall mean any law, statute, code, ordinance, order,
determination, rule, regulation, judgment, decree, injunction, franchise,
permit, certificate, license, authorization or other directive or requirement
(whether or not having the force of law), including Environmental Laws, energy
regulations and occupational, safety and health standards or controls, of any
Governmental Authority.
"Reserve Requirement" means, for any day as applied to a Eurodollar Loan,
the aggregate (without duplication) of the rates (expressed as a decimal
fraction) of reserve requirements in effect on such day (including basic,
supplemental, marginal and emergency reserves under any regulations of the Board
or other Governmental Authority having jurisdiction with respect thereto)
dealing with reserve requirements prescribed for eurocurrency funding (currently
referred to as "Eurocurrency Liabilities" in Regulation D) maintained by a
member bank of the Federal Reserve System. Eurodollar Loans shall be deemed to
constitute Eurocurrency Liabilities and to be subject to such reserve
requirements without benefit of or credit for proration, exceptions or offsets
which may be available from time to time to any Lender under Regulation D.
"Responsible Officer" of any Loan Party means the Chairman, Vice Chairman,
President, Chief Financial Officer or Chief Accounting Officer of (a) as to any
Loan Party that is a limited partnership, the General Partner of such Person,
(b) as to any Loan Party that is a limited liability company, the managing
member of such Person, and (c) as to any Loan Party that is a corporation, such
Person.
"Restricted Payment" means any distribution (whether in cash, securities
or other property) with respect to any partnership interest in the Company, or
any payment (whether in cash, securities or other property), including any
deposit, on account of the purchase, redemption, retirement, acquisition,
cancellation or termination of any such partnership interest or any option or
other right to acquire any such partnership interest; provided, however, that
distributions with respect to the partnership interests in the Company that do
not exceed, with respect to any fiscal quarter of the Company, the amount of
Available Cash for such quarter shall not constitute Restricted Payments so long
as in each case, both before and after the making of such distribution, no Event
of Default or Default shall have occurred and be continuing; and provided,
further, that any partnership interest split, partnership interest reverse
split, dividend of Company partnership interests or similar transaction will not
constitute a Restricted Payment.
"Restricted Subsidiary" means any Subsidiary of the Company other than an
Unrestricted Subsidiary. The Board of Directors of the general partner of the
Company, by a Board Resolution, may designate any Unrestricted Subsidiary to be
a Restricted Subsidiary; provided, that (a) before and after giving effect
thereto no Default or Event of Default shall have occurred and be continuing,
(b) the Company and the Restricted Subsidiaries shall be in compliance, on a pro
forma basis, after giving effect to such designation, with the covenants
contained in Article VI, recomputed as at the last day of the most recently
ended fiscal quarter of
-24-
the Company and the Restricted Subsidiaries as if such designation had occurred
on the first day of each relevant period for testing such compliance and (c) the
Company shall have delivered to the Administrative Agent and the Lenders a
certificate of a Responsible Officer to such effect, together with all relevant
financial information and calculations demonstrating such compliance. For
purposes of this definition and of Article VI, a newly designated or acquired
Restricted Subsidiary shall be deemed to have incurred or made on the date of
its designation or acquisition, as the case may be, all such Indebtedness, Liens
and investments then outstanding as would be reflected on its balance sheet,
prepared in accordance with GAAP, as at such date.
"Retiring Lenders" has the meaning specified in the introduction to this
Agreement.
"Revolving Borrowing" means a Borrowing comprised of Revolving Loans.
"Revolving Credit Exposure" means, with respect to any Lender at any time,
the sum of the outstanding principal amount of such Lender's Revolving Loans and
its LC Exposure and Swingline Exposure at such time.
"Revolving Loan" means a Loan made pursuant to Section 2.03.
"S&P" means Standard & Poor's Ratings Services, a division of The
McGraw-Hill Companies, Inc.
"Santa Fe Acquisition" has the meaning specified in the Preliminary
Statements.
"SFMLP" has the meaning specified in the Preliminary Statements.
"SFPP" has the meaning specified in the Preliminary Statements.
"SFPP First Mortgage Notes" means those certain First Mortgage Notes
issued by SFPP (under its prior name Southern Pacific Pipe Lines Partnership,
L.P.) pursuant to a Note Agreement dated December 8, 1988 between SFPP and the
purchasers named therein, which on the Execution Date are outstanding in the
aggregate principal amount of $279,500,000.
"SFPP Intracompany Refinancing Indebtedness" means SFPP Refinancing
Indebtedness owing to the Company in respect of loan proceeds borrowed
substantially concurrently by the Company from a third party lender and reloaned
by it to the Company.
"SFPP Intracompany Refinancing Interest Expense" means, for any period,
Interest Expense of SFPP for such period in respect of SFPP Intracompany
Refinancing Indebtedness.
"SFPP Refinancing Indebtedness" means Indebtedness of SFPP issued in
exchange for, or the net proceeds of which are applied substantially
concurrently to repay, refinance, refund or replace, the SFPP First Mortgage
Notes or the SFPP Revolving Credit Facility, or both, which Indebtedness would,
if the SFPP First Mortgage Notes or the SFPP Revolving Credit Facility, as the
case may be, constituted "Refinanced Indebtedness" (as said term is defined in
the definition of "Refinancing Indebtedness" in this Section 1.01), constitute
Refinancing Indebtedness in respect thereof.
-25-
"SFPP Revolving Credit Facility" means that certain Amended and Restated
Credit Agreement dated as of August 11, 1997 among SFPP, the lenders party
thereto, Bank of America National Trust and Savings Association, as agent, Chase
Bank of Texas, National Association (formerly Texas Commerce Bank National
Association), as syndication agent, Bank of Montreal, as documentation agent and
BancAmerica Securities, Inc., as arranger, providing for revolving loans to be
made to SFPP in an aggregate principal amount not exceeding $175,000,000 at any
time outstanding.
"Shell" means Shell Western E & P Inc., Shell Cortez Pipeline Company,
Shell Land & Energy Company and their Affiliates.
"Shell CO2" has the meaning specified in the Preliminary Statements.
"Shell JV Investment" has the meaning specified in the Preliminary
Statements.
"Subsidiary" means, with respect to any Person (the "parent") at any date,
any corporation, limited liability company, partnership, association or other
entity the accounts of which would be consolidated with those of the parent in
the parent's consolidated financial statements if such financial statements were
prepared in accordance with GAAP as of such date, as well as any other
corporation, limited liability company, partnership, association or other entity
(a) of which securities or other ownership interests representing more than 50%
of the equity or more than 50% of the ordinary voting power or, in the case of a
partnership, more than 50% of the general partnership interests are, as of such
date, owned, controlled or held, or (b) that is, as of such date, otherwise
controlled, by the parent or one or more subsidiaries of the parent or by the
parent and one or more subsidiaries of the parent. Unless the context otherwise
clearly requires, references in this Agreement to a "Subsidiary" or the
"Subsidiaries" refer to a Subsidiary or the Subsidiaries of the Company.
"Subsidiary Borrower" has the meaning specified in the introduction to
this Agreement.
"Subsidiary Borrower Credit Agreement" has the meaning specified in the
Preliminary Statements.
"Subsidiary Borrower Guaranteed Obligations" has the meaning specified
in Section 9.01.
"Subsidiary Guarantor Counterpart" has the meaning specified in
Section 6.04.
"Subsidiary Guarantors" has the meaning specified in the introduction to
this Agreement.
"Subsidiary Guarantors Guaranty" means the guaranty contained in
Article X.
"Swingline Exposure" means, at any time, the aggregate principal amount of
all Swingline Loans outstanding at such time. The Swingline Exposure of any
Lender at any time shall be its Applicable Percentage of the total Swingline
Exposure at such time.
-26-
"Swingline Lender" means First Union National Bank, in its capacity as
lender of Swingline Loans hereunder.
"Swingline Loan" means a Loan made pursuant to Section 2.04.
"Syndication Agent" has the meaning specified in the introduction to
this Agreement.
"Taxes" means any and all present or future taxes, levies, imposts,
duties, deductions, charges or withholdings imposed by any Governmental
Authority.
"Total Commitment" means the sum of the Commitments of the Lenders,
which on the Execution Date is $325,000,000.
"Transactions" means the execution, delivery and performance by the Loan
Parties of this Agreement and the other Loan Documents, the borrowing of Loans,
the use of the proceeds thereof and the Existing Letter of Credit and the
issuance of the other Letters of Credit hereunder.
"Trustee" means Bank One, Texas, NA, as the beneficiary of the Existing
Letter of Credit and any successor beneficiary.
"Type", when used in reference to any Loan or Borrowing, refers to whether
the rate of interest on such Loan, or on the Loans comprising such Borrowing, is
determined by reference to the LIBOR Rate or the Alternate Base Rate.
"United States" and "U.S."each means United States of America.
"Unrestricted Subsidiary" means (a) any Subsidiary of an Unrestricted
Subsidiary or (b) any Subsidiary of the Company or of a Restricted Subsidiary
that is designated as an Unrestricted Subsidiary by a Board Resolution of the
general partner of the Company in accordance with the requirements of the
following sentence with the consent of the Required Lenders (which consent shall
not be unreasonably withheld). The Company may hereafter designate any
Subsidiary of the Company or of a Restricted Subsidiary (other than the
Subsidiary Borrower, a Subsidiary Guarantor or SFPP) to be an Unrestricted
Subsidiary by a Board Resolution of the general partner of the Company, as
evidenced by written notice thereof delivered to the Administrative Agent, if at
the time of and after giving effect to such designation, (i) no Default or Event
of Default shall have occurred and be continuing, (ii) such Subsidiary does not
own or hold any Capital Stock of, or any Lien on any property of, the Company or
any Restricted Subsidiary and (iii) such Subsidiary does not own or hold any
Indebtedness of the Company or any Restricted Subsidiary that would not be
permitted pursuant to Section 6.01 as if incurred on the date of such
designation. As of the date hereof, the Company has no Unrestricted
Subsidiaries.
"Voting Stock" means, with respect to any Person, securities of any class
or classes of Capital Stock in such Person entitling holders thereof (whether at
all times or only so long as no senior class of stock has voting power by reason
of any contingency) to vote in the election of
-27-
members of the Board of Directors or other governing body of such Person or its
managing member or its general partner (or its managing general partner if there
is more than one general partner).
"Wholly-Owned Restricted Subsidiary" means a Restricted Subsidiary of
which all issued and outstanding Capital Stock (excluding (a) in the case of a
corporation, directors' qualifying shares, (b) in the case of a limited
partnership, a 1.5% general partner interest and (c) in the case of a limited
liability company, a 1.5% member interest) is directly or indirectly owned by
the Company.
"Withdrawal Liability" means liability to a Multiemployer Plan as a result
of a complete or partial withdrawal from such Multiemployer Plan, as such terms
are defined in Part I of Subtitle E of Title IV of ERISA.
SECTION 1.02 Classification of Loans and Borrowings. For purposes of
this Agreement, Loans may be classified and referred to by Class (e.g., a
"Revolving Loan") or by Type (e.g., a "Eurodollar Loan") or by Class and Type
(e.g., a "Eurodollar Revolving Loan"). Borrowings also may be classified and
referred to by Class (e.g., a "Revolving Borrowing") or by Type (e.g., a
"Eurodollar Borrowing") or by Class and Type (e.g., a "Eurodollar Revolving
Borrowing").
SECTION 1.03 Accounting Terms; Changes in GAAP. All accounting and
financial terms used herein and not otherwise defined herein and the compliance
with each covenant contained herein which relates to financial matters shall be
determined in accordance with GAAP applied by the Company on a consistent basis,
except to the extent that a deviation therefrom is expressly stated. Should
there be a change in GAAP from that in effect on the Execution Date, such that
the defined terms set forth in Section 1.01 or the covenants set forth in
Article VI would then be calculated in a different manner or with different
components or would render the same not meaningful criteria for evaluating the
matters contemplated to be evidenced by such covenants, (a) the Company and the
Required Lenders agree, within the 60-day period following any such change, to
negotiate in good faith and enter into an amendment to this Agreement in order
to conform the defined terms set forth in Section 1.01 or the covenants set
forth in Article VI, or both, in such respects as shall reasonably be deemed
necessary by the Required Lenders so that the criteria for evaluating the
matters contemplated to be evidenced by such covenants are substantially the
same criteria as were effective prior to any such change in GAAP, and (b) the
Company shall be deemed to be in compliance with such covenants during the
60-day period following any such change, or until the earlier date of execution
of such amendment, if and to the extent that the Company would have been in
compliance therewith under GAAP as in effect immediately prior to such change.
SECTION 1.04 Interpretation. (a) In this Agreement, unless a
clear contrary intention appears:
-28-
(i) the singular number includes the plural number and vice versa;
(ii) reference to any gender includes each other gender;
(iii) the words "herein," "hereof" and "hereunder" and other words of
similar import refer to this Agreement as a whole and not to any particular
Article, Section or other subdivision;
(iv) reference to any Person includes such Person's successors and
assigns but, if applicable, only if such successors and assigns are
permitted by this Agreement, and reference to a Person in a particular
capacity excludes such Person in any other capacity or individually;
provided that nothing in this clause (iv) is intended to authorize any
assignment not otherwise permitted by this Agreement;
(v) except as expressly provided to the contrary herein, reference
to any agreement, document or instrument (including this Agreement) means
such agreement, document or instrument as amended, supplemented or modified
and in effect from time to time in accordance with the terms thereof and,
if applicable, the terms hereof, and reference to any Note or other note
includes any note issued pursuant hereto in extension or renewal thereof
and in substitution or replacement therefor;
(vi) unless the context indicates otherwise, reference to any Article,
Section, Schedule or Exhibit means such Article or Section hereof or such
Schedule or Exhibit hereto;
(vii) the word "including" (and with correlative meaning "include")
means including, without limiting the generality of any description
preceding such term;
(viii) with respect to the determination of any period of time, except
as expressly provided to the contrary, the word "from" means "from and
including" and the word "to" means "to but excluding";
(ix) reference to any law, rule or regulation means such as amended,
modified, codified or reenacted, in whole or in part, and in effect from
time to time; and
(x) the words "asset" and "property" shall be construed to have the
same meaning and effect and refer to any and all tangible and intangible
assets and properties.
ARTICLE II.
The Credits
-----------
SECTION 2.01 Commitments. Subject to the terms and conditions set
forth herein, each Lender agrees to make Revolving Loans to the Company from
time to time during the Availability Period in an aggregate principal amount
that will not result in (a) such Lender's Revolving Credit Exposure exceeding
such Lender's Commitment or (b) the sum of the
-29-
total Revolving Credit Exposures exceeding the Availability. Within the
foregoing limits and subject to the terms and conditions set forth herein, the
Company may borrow, prepay and reborrow Revolving Loans.
SECTION 2.02 Loans and Borrowings. (a) Each Revolving Loan shall be
made as part of a Borrowing consisting of Revolving Loans made by the Lenders
ratably in accordance with their respective Commitments. The failure of any
Lender to make any Loan required to be made by it shall not relieve any other
Lender of its obligations hereunder.
(b) Subject to Section 2.14, each Revolving Borrowing shall be
comprised entirely of ABR Loans or Eurodollar Loans as the Company may request
in accordance herewith. Each Swingline Loan shall be an ABR Loan. Each Lender at
its option may make any Eurodollar Loan by causing any domestic or foreign
branch or Affiliate of such Lender to make such Loan; provided that any exercise
of such option shall not affect the obligation of the Company to repay such Loan
in accordance with the terms of this Agreement.
(c) At the commencement of each Interest Period for any Eurodollar
Revolving Borrowing, such Borrowing shall be in an aggregate amount that is an
integral multiple of $1,000,000 and not less than $3,000,000. At the time that
each ABR Revolving Borrowing is made, such Borrowing shall be in an aggregate
amount that is an integral multiple of $500,000 and not less than $1,000,000;
provided that an ABR Revolving Borrowing may be in an aggregate amount that is
equal to the entire unused balance of the Total Commitment or that is required
to finance the reimbursement of an LC Disbursement as contemplated by Section
2.06(f). Each Swingline Loan shall be in an amount that is an integral multiple
of $100,000 and not less than $500,000. Borrowings of more than one Type and
Class may be outstanding at the same time; provided that there shall not at any
time be more than a total of six Eurodollar Revolving Borrowings outstanding.
(d) Notwithstanding any other provision of this Agreement, the
Company shall not be entitled to request, or to elect to convert or continue,
any Borrowing if the Interest Period requested with respect thereto would end
after the Maturity Date.
SECTION 2.03 Requests for Revolving Borrowings. To request a
Revolving Borrowing, the Company shall notify the Administrative Agent of such
request by telephone (a) in the case of a Eurodollar Borrowing, not later than
10:00 a.m., Charlotte, North Carolina time, three Business Days before the date
of the proposed Borrowing (provided, however, no such request may be given prior
to the third Business Day after the Effective Date) and (b) in the case of an
ABR Borrowing, not later than 10:00 a.m., Charlotte, North Carolina time, on the
date of the proposed Borrowing. Each such telephonic Borrowing Request shall be
irrevocable and shall be confirmed promptly by hand delivery or telecopy to the
Administrative Agent of a written Borrowing Request in a form of Exhibit 2.03 (a
"Borrowing Request") and signed by the Company. Each such telephonic and written
Borrowing Request shall specify the following information in compliance with
Section 2.02:
-30-
(i) the aggregate amount of the requested Borrowing;
(ii) the date of such Borrowing, which shall be a Business Day;
(iii)whether such Borrowing is to be an ABR Borrowing or a
Eurodollar Borrowing;
(iv) in the case of a Eurodollar Borrowing, the initial Interest
Period to be applicable thereto, which shall be a period contemplated by
the definition of the term "Interest Period"; and
(v) the location and number of the Company's account to which funds
are to be disbursed, which shall comply with the requirements of Section
2.07.
If no election as to the Type of Revolving Borrowing is specified, then the
requested Revolving Borrowing shall be an ABR Borrowing. If no Interest Period
is specified with respect to any requested Eurodollar Revolving Borrowing, then
the Company shall be deemed to have selected an Interest Period of one month's
duration. Promptly following receipt of a Borrowing Request in accordance with
this Section 2.03, the Administrative Agent shall advise each Lender of the
details thereof and of the amount of such Lender's Loan to be made as part of
the requested Borrowing.
SECTION 2.04 Swingline Loans. (a Subject to the terms and conditions
set forth herein, the Swingline Lender agrees to make Swingline Loans to the
Company from time to time during the Availability Period, in an aggregate
principal amount at any time outstanding that will not result in (i) the
aggregate principal amount of outstanding Swingline Loans exceeding $5,000,000
or (ii) the sum of the total Revolving Credit Exposures exceeding the lesser of
the Total Commitment and the Availability; provided that the Swingline Lender
shall not be required to make a Swingline Loan to refinance an outstanding
Swingline Loan. Within the foregoing limits and subject to the terms and
conditions set forth herein, the Company may borrow, prepay and reborrow
Swingline Loans.
(b) To request a Swingline Loan, the Company shall notify the
Administrative Agent of such request by telephone (confirmed by telecopy), not
later than 12:00 noon, Charlotte, North Carolina time, on the day of a proposed
Swingline Loan. Each such notice shall be irrevocable and shall specify the
requested date (which shall be a Business Day) and amount of the requested
Swingline Loan. The Administrative Agent (if not the Swingline Lender) will
promptly advise the Swingline Lender of any such notice received from the
Company. So long as the Swingline Lender and the Administrative Agent are First
Union National Bank, the Swingline Lender shall make each Swingline Loan
available to the Company by means of a credit to the deposit account of the
Company with the Swingline Lender identified in the most recent Notice of
Account Designation by 3:00 p.m., Charlotte, North Carolina time, on the
requested date of such Swingline Loan.
(c) The Swingline Lender may by written notice given to the
Administrative Agent not later than 12:00 noon, Charlotte, North Carolina time,
on any Business Day require the Lenders to acquire participations on such
Business Day in all or a portion of the Swingline Loans
-31-
outstanding. Such notice shall specify the aggregate amount of Swingline Loans
in which Lenders will participate. Promptly upon receipt of such notice, the
Administrative Agent will give notice thereof to each Lender, specifying in such
notice such Lender's Applicable Percentage of such Swingline Loan or Loans. Each
Lender hereby absolutely and unconditionally agrees, upon receipt of notice as
provided above, to pay to the Administrative Agent, for the account of the
Swingline Lender, such Lender's Applicable Percentage of such Swingline Loan or
Loans. Each Lender acknowledges and agrees that its obligation to acquire
participations in Swingline Loans pursuant to this paragraph is absolute and
unconditional and shall not be affected by any circumstance whatsoever,
including the occurrence and continuance of a Default or Event of Default or
reduction or termination of the Total Commitment, and that each such payment
shall be made without any offset, abatement, withholding or reduction
whatsoever. Each Lender shall comply with its obligation under this paragraph by
wire transfer of immediately available funds, in the same manner as provided in
Section 2.07 with respect to Loans made by such Lender (and Section 2.07 shall
apply, mutatis mutandis, to the payment obligations of the Lenders), and the
Administrative Agent shall promptly pay to the Swingline Lender the amounts so
received by it from the Lenders. The Administrative Agent shall notify the
Company of any participations in any Swingline Loan acquired pursuant to this
paragraph, and thereafter payments in respect of such Swingline Loan shall be
made to the Administrative Agent and not to the Swingline Lender. Any amounts
received by the Swingline Lender from the Company (or other party on behalf of
the Company) in respect of a Swingline Loan after receipt by the Swingline
Lender of the proceeds of a sale of participations therein shall be promptly
remitted to the Administrative Agent; any such amounts received by the
Administrative Agent shall be promptly remitted by the Administrative Agent to
the Lenders that shall have made their payments pursuant to this paragraph and
to the Swingline Lender, as their interests may appear. The purchase of
participations in a Swingline Loan pursuant to this paragraph shall not relieve
the Company or any other Loan Party of any default in the payment thereof.
SECTION 2.05 Telephonic Notices. Without in any way limiting the
obligation of the Company or any other Loan Party to confirm in writing any
telephonic notice it is entitled to give under this Agreement or any other Loan
Document, the Administrative Agent may act without liability upon the basis of a
telephonic notice believed in good faith by the Administrative Agent to be from
the Company or such Loan Party prior to receipt of written confirmation. In each
such case, each Loan Party hereby waives the right to dispute the Administrative
Agent's record of the terms of such telephonic notice.
SECTION 2.06 Letters of Credit. (a) Existing Letter of Credit. The
parties hereto acknowledge that on and after the Effective Date the Existing
Letter of Credit shall be a Letter of Credit issued by the Issuing Bank for the
account of the Subsidiary Borrower pursuant to this Agreement. The Subsidiary
Borrower hereby pledges, assigns, transfers and delivers to the Issuing Bank all
its right, title and interest to all Bonds purchased with funds drawn under the
Existing Letter of Credit (the "Pledged Bonds"), and hereby grants to the
Issuing Bank a first lien on, and security interest in, its rights, title and
interest in and to the Pledged Bonds, the interest thereon and all proceeds
thereof or substitutions therefor, as collateral security for the prompt and
complete payment when due of the amounts payable in respect of the Existing
Letter of Credit. During such time as any Bonds are Pledged Bonds, the Issuing
Bank shall be entitled to exercise all of the rights of a holder of Bonds with
respect to voting, consenting and directing
-32-
the Trustee as if the Issuing Bank were the owner of such Bonds, and the
Subsidiary Borrower hereby grants and assigns to the Issuing Bank all such
rights.
(b) General. Subject to the terms and conditions set forth herein,
the Company may request the issuance of Letters of Credit for its own account or
for its own account and that of any Restricted Subsidiary, in a form reasonably
acceptable to the Administrative Agent and the Issuing Bank, at any time and
from time to time during the Availability Period. In the event of any
inconsistency between the terms and conditions of this Agreement and the terms
and conditions of any Application (as defined in Section 2.06(c)) or other
agreement submitted by the Company to, or entered into by the Company with, the
Issuing Bank relating to any Letter of Credit, the terms and conditions of this
Agreement shall control.
(c) Notice of Issuance, Amendment, Renewal, Extension; Certain
Conditions. To request the issuance of a Letter of Credit (or the amendment,
renewal or extension of an outstanding Letter of Credit), the Company shall hand
deliver or telecopy (or transmit by electronic communication, if arrangements
for doing so have been approved by the Issuing Bank) to the Issuing Bank and the
Administrative Agent (not less than five Business Days in advance of the
requested date of issuance, amendment, renewal or extension) a notice (a "Letter
of Credit Request") requesting the issuance of a Letter of Credit, or
identifying the Letter of Credit to be amended, renewed or extended, the date of
issuance, amendment, renewal or extension, the date on which such Letter of
Credit is to expire (which shall comply with this Section 2.06(c)), the amount
of such Letter of Credit, the name and address of the beneficiary thereof and
such other information as shall be necessary to prepare, amend, renew or extend
such Letter of Credit. If requested by the Issuing Bank, the Company also shall
submit a letter of credit application on the Issuing Bank's standard form (an
"Application") in connection with any request for a Letter of Credit. A Letter
of Credit shall be issued, amended, renewed or extended only if (and upon
issuance, amendment, renewal or extension of each Letter of Credit the Company
shall be deemed to represent and warrant that), after giving effect to such
issuance, amendment, renewal or extension (i) the LC Exposure shall not exceed
$75,000,000 and (ii) the sum of the total Revolving Credit Exposures shall not
exceed the lesser of the Total Commitment and the Availability.
(d) Expiration Date. Each Letter of Credit (other than the Existing
Letter of Credit) shall expire at or prior to the close of business on the
earlier of (i) the date one year after the date of the issuance of such Letter
of Credit (or, in the case of any renewal or extension thereof, one year after
such renewal or extension) and (ii) the date that is five Business Days prior to
the Maturity Date.
(e) Participations. On the Effective Date with respect to the
Existing Letter of Credit and by the issuance of each other Letter of Credit (or
an amendment to a Letter of Credit increasing the amount thereof) and without
any further action on the part of the Issuing Bank or the Lenders, the Issuing
Bank hereby grants to each Lender, and each Lender hereby acquires from the
Issuing Bank, a participation in such Letter of Credit equal to such Lender's
Applicable Percentage of the aggregate amount available to be drawn under such
Letter of Credit. In consideration and in furtherance of the foregoing, each
Lender hereby absolutely and unconditionally agrees to pay to the Administrative
Agent, for the account of the Issuing Bank,
-33-
such Lender's Applicable Percentage of each LC Disbursement made by the Issuing
Bank and not reimbursed by the Company on the date due as provided in Section
2.06(f), or of any reimbursement payment required to be refunded to the Company
for any reason. Each Lender acknowledges and agrees that its obligation to
acquire participations pursuant to this paragraph in respect of Letters of
Credit is absolute and unconditional and shall not be affected by any
circumstance whatsoever, including any amendment, renewal or extension of any
Letter of Credit or the occurrence and continuance of a Default or an Event of
Default or reduction or termination of the Commitments, and that each such
payment shall be made without any offset, abatement, withholding or reduction
whatsoever.
(i) Reimbursement. If the Issuing Bank shall make any LC Disbursement
in respect of a Letter of Credit, the Borrower for whose account such Letter of
Credit was issued shall reimburse such LC Disbursement by paying to the
Administrative Agent an amount equal to such LC Disbursement not later than
12:00 noon, Charlotte, North Carolina time, on the date that such LC
Disbursement is made, if such Borrower shall have received notice of such LC
Disbursement prior to 10:00 a.m., Charlotte, North Carolina time, on such date,
or, if such notice has not been received by such Borrower prior to such time on
such date, then not later than 12:00 noon, Charlotte, North Carolina time, on
(i) the Business Day that such Borrower receives such notice, if such notice is
received prior to 10:00 a.m., Charlotte, North Carolina time, on the day of
receipt, or (ii) the Business Day immediately following the day that such
Borrower receives such notice, if such notice is not received prior to such time
on the day of receipt; provided that if such Borrower fails to make such payment
when due, then, upon demand by the Issuing Bank sent to the Administrative Agent
and each Lender before 10:00 a.m., Charlotte, North Carolina time, each Lender
shall pursuant to Section 2.07 on the same day make available to the
Administrative Agent for delivery to the Issuing Bank, immediately available
funds in an amount equal to such Lender's Applicable Percentage of the amount of
such payment by the Issuing Bank, and the funding of such amount shall be
treated as the funding of an ABR Loan by such Lender to such Borrower.
Notwithstanding anything herein or in any other Loan Document to the contrary,
the funding obligations of the Lenders set forth in this Section 2.06(f) shall
be binding regardless of whether or not a Default or an Event of Default shall
exist or the other conditions precedent in Article III are satisfied at such
time. If and to the extent any Lender fails to effect any payment due from it
under this Section 2.06(f) to the Administrative Agent, then interest shall
accrue on the obligation of such Lender to make such payment from the date such
payment became due to the date such obligation is paid in full at a rate per
annum equal to the Federal Funds Effective Rate. The failure of any Lender to
pay its Applicable Percentage of any payment under any Letter of Credit shall
not relieve any other Lender of its obligation hereunder to pay to the
Administrative Agent its Applicable Percentage of any payment under any Letter
of Credit on the date required, as specified above, but no Lender shall be
responsible for the failure of any other Lender to pay to the Administrative
Agent such other Lender's Applicable Percentage of any such payment.
(g) Obligations Absolute. The Company's obligation to reimburse (or
in the case of the Existing Letter of Credit, the Subsidiary Borrower's
obligation to reimburse) LC Disbursements as provided in Section 2.06(f) shall,
to the extent permitted by law, be absolute, unconditional and irrevocable, and
shall be performed strictly in accordance with the terms of this Agreement under
any and all circumstances whatsoever and irrespective of:
-34-
(i) any lack of validity or enforceability of any Letter of Credit,
this Agreement or any other Loan Document, or any term or provision herein
or therein;
(ii) any amendment or waiver of or any consent to departure from all
or any of the provisions of any Letter of Credit, this Agreement or any
other Loan Document;
(iii) the existence of any claim, setoff, defense or other right that
either Borrower, any other Loan Party or other Affiliate thereof or any
other Person may at any time have against the beneficiary under any Letter
of Credit, the Issuing Bank, the Administrative Agent or any Lender or any
other Person, whether in connection with this Agreement or any other
related or unrelated agreement or transaction;
(iv) any draft or other document presented under a Letter of Credit
proving to be forged, fraudulent or invalid in any respect or any statement
therein being untrue or inaccurate in any respect;
(v) payment by the Issuing Bank under a Letter of Credit against
presentation of a draft or other document that does not comply with the
terms of such Letter of Credit; and
(vi) any other act or omission to act or delay of any kind of the
Issuing Bank, the Lenders, the Administrative Agent or any other Person or
any other event or circumstance whatsoever, whether or not similar to any
of the foregoing, that might, but for the provisions of this Section 2.06,
constitute a legal or equitable discharge of any Loan Party's obligations
hereunder.
Neither the Administrative Agent, the Lenders nor the Issuing Bank, nor any of
their Related Parties, shall have any liability or responsibility by reason of
or in connection with the issuance or transfer of any Letter of Credit or any
payment or failure to make any payment thereunder, including any of the
circumstances specified in clauses (i) through (vi) above, as well as any error,
omission, interruption, loss or delay in transmission or delivery of any draft,
notice or other communication under or relating to any Letter of Credit
(including any document required to make a drawing thereunder), any error in
interpretation of technical terms or any consequence arising from causes beyond
the control of the Issuing Bank; provided that the foregoing shall not be
construed to excuse the Issuing Bank from liability to the Borrower for whose
account such Letter of Credit was issued to the extent of any direct damages (as
opposed to consequential damages, claims in respect of which are hereby waived
by each Borrower to the extent permitted by applicable law) suffered by such
Borrower that are caused by the Issuing Bank's failure to exercise the agreed
standard of care (as set forth below) in determining whether drafts and other
documents presented under a Letter of Credit comply with the terms thereof. The
parties hereto expressly agree that the Issuing Bank shall have exercised the
agreed standard of care in the absence of gross negligence, willful misconduct
or unlawful conduct on the part of the Issuing Bank. Without limiting the
generality of the foregoing, it is understood that the Issuing Bank may accept
documents that appear on their face to be in substantial compliance with the
terms of a Letter of Credit, without responsibility for further investigation,
regardless of any notice or information to the contrary, and may make payment
upon presentation of documents that appear on their face to be in substantial
compliance with the terms of such Letter of Credit; provided
-35-
that the Issuing Bank shall have the right, in its sole discretion, to decline
to accept such documents and to make such payment if such documents are not in
strict compliance with the terms of such Letter of Credit.
(h) Disbursement Procedures. The Issuing Bank shall, promptly
following its receipt thereof, examine all documents purporting to represent a
demand for payment under a Letter of Credit. The Issuing Bank shall promptly
notify the Administrative Agent and the Borrower for whose account such Letter
of Credit was issued by telephone (confirmed by telecopy) of such demand for
payment and whether the Issuing Bank has made or will make an LC Disbursement
thereunder; provided that any failure to give or delay in giving such notice
shall not relieve either Borrower of its obligation to reimburse the Issuing
Bank and the Lenders with respect to any such LC Disbursement.
(i) Interim Interest. If the Issuing Bank shall make any LC
Disbursement, then, unless the Company (or, in the case of the Existing Letter
of Credit, the Subsidiary Borrower) shall reimburse such LC Disbursement in full
on the date specified in Section 2.06(f), the unpaid amount thereof shall bear
interest, for each day from the date such LC Disbursement is made to the date
that the Company (or, in the case of the Existing Letter of Credit, the
Subsidiary Borrower) reimburses such LC Disbursement (or all Lenders make the
payments to the Administrative Agent contemplated by Section 2.06(f) and treated
pursuant to said Section as constituting the funding of ABR Loans), at the rate
per annum then applicable to ABR Revolving Loans.
(j) Replacement of the Issuing Bank. The Issuing Bank may be replaced
at any time by written agreement among the Borrowers, the Administrative Agent,
the replaced Issuing Bank and the successor Issuing Bank. The Administrative
Agent shall notify the Lenders of any such replacement of the Issuing Bank. At
the time any such replacement shall become effective, the Borrowers shall pay
all unpaid fees accrued for the account of the replaced Issuing Bank pursuant to
Section 2.12(b). From and after the effective date of any such replacement, (i)
the successor Issuing Bank shall have all the rights and obligations of the
Issuing Bank under this Agreement with respect to Letters of Credit to be issued
thereafter and (ii) references herein to the term "Issuing Bank" shall be deemed
to refer to such successor or to any previous Issuing Bank, or to such successor
and all previous Issuing Banks, as the context shall require. After the
replacement of an Issuing Bank hereunder, the replaced Issuing Bank shall remain
a party hereto and shall continue to have all the rights and obligations of an
Issuing Bank under this Agreement with respect to Letters of Credit issued by it
prior to such replacement, but shall not be required to issue additional Letters
of Credit.
(k) Cash Collateralization. If (i) any Event of Default shall occur
and be continuing, on the Business Day that the Company receives notice from the
Administrative Agent or the Required Lenders (or, if the maturity of the Loans
has been accelerated, Lenders with LC Exposure representing greater than 66_% of
the total LC Exposure) demanding the deposit of cash collateral pursuant to this
paragraph or (ii) a Change in Control shall occur, the Company shall deposit in
an account with the Administrative Agent, in the name of the Administrative
Agent and for the benefit of the Lenders, an amount in cash equal to the LC
Exposure as of such date plus any accrued and unpaid interest thereon; provided
that the
-36-
obligation to deposit such cash collateral shall become effective immediately,
and such deposit shall become immediately due and payable, without demand or
notice of any kind, upon the occurrence of any Event of Default with respect to
any Loan Party described in clause (g) or (h) of Section 7.01. Such deposit
shall be held by the Administrative Agent as collateral for the payment and
performance of the obligations of the Loan Parties under this Agreement and the
other Loan Documents. The Administrative Agent shall have exclusive dominion and
control, including the exclusive right of withdrawal, over such account. Other
than any interest earned on the investment of such deposits, which investments
shall be made at the option and sole discretion of the Administrative Agent and
at the Company's risk and expense, such deposits shall not bear interest.
Interest or profits, if any, on such investments shall accumulate in such
account. Moneys in such account shall be applied by the Administrative Agent to
reimburse the Issuing Bank for LC Disbursements for which it has not been
reimbursed and, to the extent not so applied, shall be held for the satisfaction
of the reimbursement obligations of the Borrowers for the LC Exposure at such
time or, if the maturity of the Loans has been accelerated (but subject to the
consent of Lenders with LC Exposure representing greater than 66_% of the total
LC Exposure), be applied to satisfy other obligations of the Loan Parties under
this Agreement and the other Loan Documents. If the Company is required to
provide an amount of cash collateral hereunder as a result of the occurrence of
an Event of Default, such amount (to the extent not applied as aforesaid) shall
be returned to the Company within three Business Days after all Events of
Default have been cured or waived.
SECTION 2.07 Funding of Borrowings. (a) Each Lender shall make each
Loan to be made by it hereunder on the proposed date thereof by wire transfer of
immediately available funds by 2:00 p.m., Charlotte, North Carolina time, to the
account of the Administrative Agent most recently designated by it for such
purpose by notice to the Lenders; provided that Swingline Loans shall be made as
provided in Section 2.04. Not later than 2:00 p.m. (Charlotte time) on the
proposed borrowing date, each Lender will make available to the Administrative
Agent, for the account of the Borrower, at the office of the Administrative
Agent in funds immediately available to the Administrative Agent, such Lender's
Commitment Percentage of the Loans to be made on such borrowing date. The
Company hereby irrevocably authorizes the Administrative Agent to disburse the
proceeds of each borrowing requested pursuant to this Section 2.07 in
immediately available funds by crediting or wiring such proceeds to the deposit
account of the Company identified in the most recent Notice of Account
Designation substantially in the form of Exhibit 2.07 hereto (a "Notice of
Account Designation") delivered by the Company to the Administrative Agent or
may be otherwise agreed upon by the Borrower and the Administrative Agent from
time to time; provided that ABR Revolving Loans made to finance the
reimbursement of an LC Disbursement as provided in Sections 2.06(e) and (f)
shall be remitted by the Administrative Agent to the Issuing Bank.
(b) Unless the Administrative Agent shall have received notice from a
Lender prior to the proposed date of any Borrowing (or prior to 12:00 noon,
Charlotte, North Carolina time, on such date in the case of an ABR Borrowing)
that such Lender will not make available to the Administrative Agent such
Lender's share of such Borrowing, the Administrative Agent may assume that such
Lender has made such share available on such date in accordance with Section
2.07(a) and may, in reliance upon such assumption, make available to the Company
a corresponding amount. In such event, if a Lender has not in fact made its
share of the applicable
-37-
Borrowing available to the Administrative Agent, then the applicable Lender and
the Company severally agree to pay to the Administrative Agent forthwith on
demand such corresponding amount with interest thereon, for each day from the
date such amount is made available to the Company to the date of payment to the
Administrative Agent, at (i) in the case of such Lender, the Federal Funds
Effective Rate or (ii) in the case of the Company, the interest rate applicable
to ABR Loans. If such Lender pays such amount to the Administrative Agent, then
such amount shall constitute such Lender's Loan included in such Borrowing.
SECTION 2.08 Interest Elections. (a) Each Revolving Borrowing
initially shall be of the Type specified in the applicable Borrowing Request
and, in the case of a Eurodollar Revolving Borrowing, shall have an initial
Interest Period as specified in such Borrowing Request. Thereafter, the Company
may elect to convert such Borrowing to a different Type or to continue such
Borrowing and, in the case of a Eurodollar Revolving Borrowing, may elect
Interest Periods therefor, all as provided in this Section 2.08. The Company may
elect different options with respect to different portions of the affected
Borrowing, in which case each such portion shall be allocated ratably among the
Lenders holding the Loans comprising such Borrowing, and the Loans comprising
each such portion shall be considered a separate Borrowing. This Section 2.08
shall not apply to Swingline Borrowings, which may not be converted or
continued.
(b) To make an election pursuant to this Section 2.08, the Company
shall notify the Administrative Agent of such election by telephone by the time
that a Borrowing Request would be required under Section 2.03 if the Company
were requesting a Revolving Borrowing of the Type resulting from such election
to be made on the effective date of such election. Each such telephonic Interest
Election Request shall be irrevocable and shall be confirmed promptly by hand
delivery or telecopy to the Administrative Agent of a written Interest Election
Request in the form of Exhibit 2.08 (an "Interest Election Request").
(c) Each telephonic and written Interest Election Request shall
specify the following information in compliance with Section 2.02:
(i) the Borrowing to which such Interest Election Request applies and,
if different options are being elected with respect to different portions
thereof, the portions thereof to be allocated to each resulting Borrowing
(in which case the information to be specified pursuant to clauses (iii)
and (iv) below shall be specified for each resulting Borrowing);
(ii) the effective date of the election made pursuant to such Interest
Election Request, which shall be a Business Day;
(iii) whether the resulting Borrowing is to be an ABR Borrowing or a
Eurodollar Borrowing; and
(iv) if the resulting Borrowing is a Eurodollar Borrowing, the
Interest Period to be applicable thereto after giving effect to such
election, which shall be a period contemplated by the definition of the
term "Interest Period".
-38-
If any such Interest Election Request requests a Eurodollar Borrowing but does
not specify an Interest Period, then the Company shall be deemed to have
selected an Interest Period of one month's duration.
(d) Promptly following receipt of an Interest Election Request, the
Administrative Agent shall advise each Lender of the details thereof and of such
Lender's portion of each resulting Borrowing.
(e) If the Company fails to deliver a timely Interest Election
Request with respect to a Eurodollar Revolving Borrowing prior to the end of the
Interest Period applicable thereto, then, unless such Borrowing is repaid as
provided herein, at the end of such Interest Period such Borrowing shall be
converted to an ABR Borrowing. Notwithstanding any contrary provision hereof, if
and so long as an Event of Default is continuing (i) no outstanding Revolving
Borrowing may be converted to or continued as a Eurodollar Borrowing and (ii)
unless repaid, each Eurodollar Revolving Borrowing shall be converted to an ABR
Borrowing at the end of the Interest Period applicable thereto.
SECTION 2.09 Termination and Reduction of Commitments. (a) Unless
previously terminated, on May 1, 2000 (as such date may be extended pursuant to
Section 2.20, the "Initial Reduction Date") and on each of the other dates (the
Initial Reduction Date and each such other date, as such other date may be
extended pursuant to Section 2.20, being a "Reduction Date") specified below,
the Total Commitment shall reduce by an amount equal to the Total Commitment in
effect on the Initial Reduction Date multiplied by the percentage set forth
opposite such dates below:
Dates Percentage
----- ----------
May 1 and August 1, 2000 4.00%
November 1, 2000 and February 1, 2001 4.25%
May 1 and August 1, 2001 4.50%
November 1, 2001 and February 1, 2002 4.75%
May 1 and August 1, 2002 5.00%
November 1, 2002 and February 1, 2003 5.00%
May 1 and August 1, 2003 5.25%
November 1, 2003 and February 1, 2004 5.50%
May 1 and August 1, 2004 5.75%
November 1, 2004 and February 1, 2005 6.00%
Notwithstanding the foregoing, unless previously terminated, the Total
Commitment shall terminate on the Maturity Date.
(b) The Company may at any time terminate, or from time to time
reduce, the Total Commitment, in whole or in part; provided that (i) each
partial reduction of the Total Commitment shall be in an amount that is an
integral multiple of $1,000,000 and not less than $5,000,000 and (ii) the
Company shall not terminate or reduce the Commitments if, after giving effect to
any concurrent prepayment of the Loans in accordance with Section 2.11, the sum
of the
-39-
Revolving Credit Exposures would exceed the lesser of the Total Commitment and
the Availability. Each reduction of the Total Commitment pursuant to this
Section 2.09(b) made after the Initial Reduction Date shall reduce the amount
that must be reduced on each subsequent Reduction Date in the order in which
each such reduction is to occur.
(c) The Company shall notify the Administrative Agent of any election
to terminate or reduce the Total Commitment under Section 2.09(b) at least three
Business Days prior to the effective date of such termination or reduction,
specifying such election and the effective date thereof. Promptly following
receipt of any notice, the Administrative Agent shall advise the Lenders of the
contents thereof. Each notice delivered by the Company pursuant to this Section
2.09 shall be irrevocable; provided that a notice of termination of the Total
Commitment delivered by the Company may state that such notice is conditioned
upon the effectiveness of other credit facilities, in which case such notice may
be revoked by the Company (by notice to the Administrative Agent on or prior to
the specified effective date) if such condition is not satisfied. Any
termination or reduction of the Total Commitment shall be permanent. Each
reduction of the Total Commitment shall be made ratably among the Lenders in
accordance with their respective Commitments.
SECTION 2.10 Repayment of Loans; Evidence of Debt. (a) The Company
hereby unconditionally promises to pay (i) to the Administrative Agent for the
account of each Lender the then unpaid principal amount of each Revolving Loan
on the Maturity Date and (ii) to the Swingline Lender the then unpaid principal
amount of each Swingline Loan on demand thereof or by the Swingline Lender. In
addition, if after giving effect to the reduction of the Total Commitment on
each Reduction Date, the Revolving Credit Exposure exceeds the lesser of the
Total Commitment and the Availability, the Company shall pay to the
Administrative Agent for the account of each Lender an aggregate principal
amount of Revolving Loans sufficient to cause the Revolving Credit Exposure not
to exceed the lesser of the Total Commitment and the Availability; provided,
however, if the repayment of the outstanding Revolving Loans does not cause the
Revolving Credit Exposure to be equal to or less than the lesser of the Total
Commitment and the Availability, the Company shall deposit in an account with
the Administrative Agent in the name of the Administrative Agent and for the
benefit of the Lender, an amount in cash equal to the excess of the Revolving
Credit Exposure over the Total Commitment, which cash deposit shall be held by
the Administrative Agent for the payment of the obligations of the Loan Parties
under this Agreement and the other Loan Documents. The Administrative Agent
shall have exclusive dominion and control, including the exclusive right of
withdrawal, over such account other than any interest earned on the investment
of such deposit, which investments shall be made at the option and sole
discretion of the Administrative Agent and at the Company's risk and expense.
Interest or profits, if any, on such investments shall accumulate in such
account. Moneys in such account shall be applied by the Administrative Agent to
reimburse the Issuing Bank for LC Disbursements for which it has not been
reimbursed and, to the extent not so applied, shall be held for the satisfaction
of the reimbursement obligations of the Borrowers for the LC Exposure at such
time, or if the maturity of the Loans has been accelerated (but subject to the
consent of the Lenders with LC Exposure representing greater than 66_% of the
total LC Exposure), be applied to satisfy other obligations of the Loan Parties
under this Agreement and the other Loan Documents. At any time when the
Revolving Credit Exposure does not exceed the lesser of the Total Commitment and
the Availability and so
-40-
long as no Default or Event of Default shall then exist, upon the request of the
Company the amount of such deposit (to the extent not applied as aforesaid)
shall be returned to the Company within three Business Days after receipt of
such request.
(b) On the date that a Change in Control occurs, the Company shall
repay the outstanding principal amount of the Loans and all other amounts
outstanding hereunder and under the other Loan Documents and shall comply with
the provisions of Section 2.06(k); provided, however, if the Change in Control
is a result of the death or disability of Richard D. Kinder or William V. Morgan
or both, the Company shall make such repayment and comply with the provisions of
Section 2.06(k) on the date that is 180 days after such Change in Control
occurs, unless such date is not a Business Day in which event such repayment and
compliance shall be due on the next Business Day occurring after such date.
(c) Each Lender shall maintain in accordance with its usual practice
an account or accounts evidencing the indebtedness of the Company to such Lender
resulting from each Loan made by such Lender, including the amounts of principal
and interest payable and paid to such Lender from time to time hereunder.
(d) The Administrative Agent shall maintain accounts in which it
shall record (i) the amount of each Loan made hereunder, the Class and Type
thereof and the Interest Period applicable thereto, (ii) the amount of any
principal or interest due and payable or to become due and payable from the
Company to each Lender hereunder and (iii) the amount of any sum received by the
Administrative Agent hereunder for the account of the Lenders and each Lender's
share thereof.
(e) The entries made in the accounts maintained pursuant to Section
2.10(c) or (d) shall be prima facie evidence of the existence and amounts of the
obligations recorded therein; provided that the failure of any Lender or the
Administrative Agent to maintain such accounts or any error or conflict therein
shall not in any manner affect the obligation of the Company to repay the Loans
in accordance with the terms of this Agreement.
(f) Any Lender may request that Loans made by it be evidenced by a
promissory note. In such event, the Company shall prepare, execute and deliver
to such Lender a promissory note payable to the order of such Lender and in the
form attached as Exhibit 2.10 (each a "Note"). Thereafter, the Loans evidenced
by such promissory note and interest thereon shall at all times (including after
assignment pursuant to Section 11.05) be represented by one or more promissory
notes in such form payable to the order of the payee named therein.
SECTION 2.11 Prepayment of Loans. (a) The Company shall have the
right at any time and from time to time to prepay any Borrowing in whole or in
part, subject to prior notice in accordance with Section 2.11(b).
(b) The Company shall notify the Administrative Agent (and, in the
case of prepayment of a Swingline Loan, the Swingline Lender) by telephone
(confirmed by telecopy in the form of Exhibit 2.11 (a "Notice of Prepayment"))
of any prepayment hereunder (i) in the case of prepayment of a Eurodollar
Revolving Borrowing, not later than 11:00 a.m., Charlotte, North Carolina time,
three Business Days before the date of prepayment, (ii) in the case of
prepayment
-41-
of an ABR Revolving Borrowing, not later than 11:00 a.m., Charlotte, North
Carolina time, on the date of prepayment or (iii) in the case of prepayment of a
Swingline Loan, not later than 11:00 a.m., Charlotte, North Carolina time, on
the date of prepayment. Each such notice shall be irrevocable and shall specify
the prepayment date, Type and the principal amount of each Borrowing or portion
thereof to be prepaid; provided that, if a notice of prepayment is given in
connection with a conditional notice of termination of the Commitments as
contemplated by Section 2.09, then such notice of prepayment may be revoked if
such notice of termination is revoked in accordance with Section 2.09. Each
partial prepayment shall be in an aggregate amount not less than, and shall be
an integral multiple of, the amounts shown below with respect to the applicable
Type of Loan or Borrowing:
Type of Integral Minimum
Loan/Borrowing Multiple of Aggregate Amount
-------------- ----------- ----------------
Eurodollar Revolving $ 1,000,000 $ 3,000,000
Borrowing
ABR Revolving Borrowing 500,000 1,000,000
Swingline Loan 100,000 500,000
Promptly following receipt of any such notice relating to a Revolving Borrowing,
the Administrative Agent shall advise the Lenders of the contents thereof. If
the Company fails to designate the Type of Borrowings to be prepaid, partial
prepayments shall be applied first to the outstanding ABR Borrowings until all
such outstanding principal of ABR Borrowings are repaid in full, and then to the
outstanding principal amount of Eurodollar Borrowings. Each partial prepayment
of any Revolving Borrowing shall be in an amount that would be permitted in the
case of an advance of a Revolving Borrowing of the same Type as provided in
Section 2.02. Each prepayment of a Revolving Borrowing shall be applied ratably
to the Loans included in the prepaid Borrowing. Prepayments shall be accompanied
by accrued interest to the extent required by Section 2.13.
SECTION 2.12 Fees. (a) The Company agrees to pay to the
Administrative Agent for the account of each Lender a commitment fee, which
shall accrue at the Applicable Margin on the daily amount of the unused
Commitment of such Lender during the period from and including the date of this
Agreement to but excluding the date on which such Commitment terminates. Accrued
commitment fees shall be payable in arrears on the last Business Day of January,
April, July and October of each year and on the date on which the Commitments
terminate, commencing on the first such date to occur after the date hereof. All
commitment fees shall be computed on the basis of a year of 360 days and shall
be payable for the actual number of days elapsed (including the first day but
excluding the last day).
(b) The Company agrees to pay (i) to the Administrative Agent for the
account of each Lender a participation fee with respect to its participations in
Letters of Credit, which shall accrue at a rate per annum equal to the
Applicable Margin applicable to interest on Eurodollar Revolving Loans on the
average daily amount of such Lender's LC Exposure (excluding any portion thereof
attributable to unreimbursed LC Disbursements) during the period from and
including the Effective Date to but excluding the later of the date on which
such
-42-
Lender's Commitment terminates and the date on which such Lender ceases to have
any LC Exposure, and (ii) to the Issuing Bank a fronting fee, which shall accrue
at the rate of .125% per annum on the average daily amount of the LC Exposure
(excluding any portion thereof attributable to unreimbursed LC Disbursements)
during the period from and including the Effective Date to but excluding the
later of the date of termination of the Commitments and the date on which there
ceases to be any LC Exposure, as well as the Issuing Bank's standard fees with
respect to the issuance, amendment, renewal or extension of any Letter of Credit
or processing of drawings thereunder. Accrued participation fees shall be
payable in arrears on the last Business Day of January, April, July and October
of each year, commencing on the first such date to occur after the Effective
Date; provided that all such fees shall be payable on the date on which the
Commitments terminate and any such fees accruing after the date on which the
Commitments terminate shall be payable on demand. Any other fees payable to the
Issuing Bank pursuant to this paragraph shall be payable within 10 days after
demand. All participation fees and fronting fees shall be computed on the basis
of a year of 360 days and shall be payable for the actual number of days elapsed
(including the first day but excluding the last day).
(c) The Company agrees to pay to the Administrative Agent, for its
own account, fees payable in the amounts and at the times specified in that
letter agreement dated November 30, 1998 among the Company, the Administrative
Agent and First Union Capital Markets (as from time to time amended, the "Fee
Letter").
(d) All fees payable hereunder shall be paid on the dates due, in
immediately available funds, to the Administrative Agent (or to the Issuing
Bank, in the case of fees payable to it) for distribution, in the case of
commitment fees and participation fees, to the Lenders. Except as required by
law, fees paid shall not be refundable under any circumstances.
SECTION 2.13 Interest. (a) The Loans comprising each ABR Borrowing
(including each Swingline Loan) shall bear interest at a rate per annum equal to
the Alternate Base Rate.
(b) The Loans comprising each Eurodollar Borrowing shall bear
interest at a rate per annum equal to LIBOR Rate for the Interest Period in
effect for such Borrowing plus the Applicable Margin.
(c) Notwithstanding the foregoing, if any principal of or interest on
any Loan or any fee or other amount payable by the Company hereunder is not paid
when due, whether at stated maturity, upon acceleration or otherwise, such
overdue amount shall bear interest, after as well as before judgment, at a rate
per annum equal to (i) in the case of overdue principal of any Loan, 2% plus the
rate otherwise applicable to such Loan as provided above or (ii) in the case of
any other amount, 2% plus the Alternate Base Rate.
(d) Accrued interest on each Loan shall be payable in arrears on each
Interest Payment Date for such Loan; provided that (i) interest accrued pursuant
to Section 2.13(c) shall be payable on demand, (ii) in the event of any
repayment or prepayment of any Loan (other than a prepayment of an ABR Revolving
Loan prior to the end of the Availability Period), accrued interest on the
principal amount repaid or prepaid shall be payable on the date of such
repayment or prepayment, (iii) in the event of any conversion of any Eurodollar
Revolving Loan prior to the
-43-
end of the current Interest Period therefor, accrued interest on such Loan shall
be payable on the effective date of such conversion and (iv) all accrued
interest shall be payable upon termination of the Total Commitment.
(e) All interest hereunder shall be computed on the basis of a year
of 360 days, except that interest computed by reference to the Alternate Base
Rate at times when the Alternate Base Rate is based on the Prime Rate shall be
computed on the basis of a year of 365 days (or 366 days in a leap year), and in
each case shall be payable for the actual number of days elapsed (including the
first day but excluding the last day). The applicable Alternate Base Rate or
LIBOR Rate shall be determined by the Administrative Agent, and such
determination shall be conclusive absent manifest error.
SECTION 2.14 Alternate Rate of Interest. If prior to the
commencement of any Interest Period for a Eurodollar Borrowing:
(a) the Administrative Agent determines (which determination shall be
conclusive absent manifest error) that adequate and reasonable means do not
exist for ascertaining the LIBOR Rate for such Interest Period; or
(b) the Administrative Agent is advised by the Required Lenders that
the LIBOR Rate for such Interest Period will not adequately and fairly reflect
the cost to such Lenders of making or maintaining their Loans included in such
Borrowing for such Interest Period;
then the Administrative Agent shall give notice thereof to the Company and the
Lenders by telephone or telecopy as promptly as practicable thereafter and,
until the Administrative Agent notifies the Company and the Lenders that the
circumstances giving rise to such notice no longer exist, (i) any Interest
Election Request that requests the conversion of any Revolving Borrowing to, or
continuation of any Revolving Borrowing as, a Eurodollar Borrowing shall be
ineffective and (ii) if any Borrowing Request requests a Eurodollar Revolving
Borrowing, such Borrowing shall be made as an ABR Borrowing.
SECTION 2.15 Increased Costs. (a) If any Change in Law shall:
(i) impose, modify or deem applicable any reserve, special deposit or
similar requirement against assets of, deposits with or for the account
of, or credit extended by, any Lender (except any such reserve requirement
reflected in the LIBOR Rate) or the Issuing Bank; or
(ii) impose on any Lender or the Issuing Bank or the London interbank
market any other condition affecting this Agreement or Eurodollar Loans
made by such Lender or any Letter of Credit or participation therein;
and the result of any of the foregoing shall be to increase the cost to such
Lender of making or maintaining any Eurodollar Loan (or of maintaining its
obligation to make any such Loan) or to increase the cost to such Lender or the
Issuing Bank of participating in, issuing or maintaining any Letter of Credit or
to reduce the amount of any sum received or receivable by such Lender or
-44-
the Issuing Bank hereunder (whether of principal, interest or otherwise), then
the Company will pay to such Lender or the Issuing Bank, as the case may be,
such additional amount or amounts as will compensate such Lender or the Issuing
Bank, as the case may be, for such additional costs incurred or reduction
suffered.
(b) If any Lender or the Issuing Bank determines that any Change in
Law regarding capital requirements has or would have the effect of reducing the
rate of return on such Lender's or the Issuing Bank's capital or on the capital
of such Lender's or the Issuing Bank's holding company, if any, as a consequence
of this Agreement or the Loans made by, or participations in Letters of Credit
held by, such Lender, or the Letters of Credit issued by the Issuing Bank, to a
level below that which such Lender or the Issuing Bank or such Lender's or the
Issuing Bank's holding company could have achieved but for such Change in Law
(taking into consideration such Lender's or the Issuing Bank's policies and the
policies of such Lender's or the Issuing Bank's holding company with respect to
capital adequacy), then from time to time the Company will pay to such Lender or
the Issuing Bank, as the case may be, such additional amount or amounts as will
compensate such Lender or the Issuing Bank or such Lender's or the Issuing
Bank's holding company for any such reduction suffered.
(c) A certificate of a Lender or the Issuing Bank setting forth the
amount or amounts necessary to compensate such Lender or the Issuing Bank or its
holding company, as the case may be, as specified in paragraph (a) or (b) of
this Section 2.15 shall be delivered to the Company and shall be conclusive
absent manifest error. The Company shall pay such Lender or the Issuing Bank, as
the case may be, the amount shown as due on any such certificate within 10 days
after receipt thereof.
(d) Failure or delay on the part of any Lender or the Issuing Bank to
demand compensation pursuant to this Section 2.15 shall not constitute a waiver
of such Lender's or the Issuing Bank's right to demand such compensation;
provided that the Company shall not be required to compensate a Lender or the
Issuing Bank pursuant to this Section 2.15 for any increased costs or reductions
incurred more than six months prior to the date that such Lender or the Issuing
Bank, as the case may be, notifies the Company of the Change in Law giving rise
to such increased costs or reductions and of such Lender's or the Issuing Bank's
intention to claim compensation therefor; provided further that, if the Change
in Law giving rise to such increased costs or reductions is retroactive, then
the six-month period referred to above shall be extended to include the period
of retroactive effect thereof.
SECTION 2.16 Break Funding Payments. In the event of (a) the payment
of any principal of any Eurodollar Loan other than on the last day of an
Interest Period applicable thereto (including as a result of an Event of
Default), (b) the conversion of any Eurodollar Loan other than on the last day
of the Interest Period applicable thereto, (c) the failure to borrow, convert,
continue or prepay any Eurodollar Loan, or the failure to convert an ABR Loan to
a Eurodollar Loan, on the date specified in any notice delivered pursuant hereto
(regardless of whether such notice is permitted to be revocable under Section
2.09 and is revoked in accordance herewith) or (d) the assignment of any
Eurodollar Loan other than on the last day of the Interest Period applicable
thereto as a result of a request by the Company pursuant to Section 2.19, then,
in any such event, the Company shall compensate each Lender for the loss,
-45-
cost and expense attributable to such event. In the case of a Eurodollar Loan,
the loss to any Lender attributable to any such event shall be deemed to include
an amount determined by such Lender to be equal to the excess, if any, of (i)
the amount of interest that such Lender would pay for a deposit equal to the
principal amount of such Loan for the period from the date of such payment,
conversion, failure or assignment to the last day of the then current Interest
Period for such Loan (or, in the case of a failure to borrow, convert or
continue, the duration of the Interest Period that would have resulted from such
borrowing, conversion or continuation) if the interest rate payable on such
deposit were equal to the LIBOR Rate for such Interest Period, over (ii) the
amount of interest that such Lender would earn on such principal amount for such
period if such Lender were to invest such principal amount for such period at
the interest rate that would be bid by such Lender (or an affiliate of such
Lender) for dollar deposits from other banks in the Eurodollar market at the
commencement of such period. A certificate of any Lender setting forth any
amount or amounts that such Lender is entitled to receive pursuant to this
Section 2.16 shall be delivered to the Company and shall be conclusive absent
manifest error. The Company shall pay such Lender the amount shown as due on any
such certificate within 10 days after receipt thereof.
SECTION 2.17 Taxes. (a) Any and all payments by or an account of any
obligation of either Borrower hereunder shall be made free and clear of and
without deduction for any Indemnified Taxes or Other Taxes; provided that if
either Borrower shall be required to deduct any Indemnified Taxes or Other Taxes
from such payments, then (i) the sum payable shall be increased as necessary so
that after making all required deductions (including deductions applicable to
additional sums payable under this Section 2.17) the Administrative Agent,
Lender or Issuing Bank (as the case may be) receives an amount equal to the sum
it would have received had no such deductions been made, (ii) such Borrower
shall make such deductions and (iii) such Borrower shall pay the full amount
deducted to the relevant Governmental Authority in accordance with applicable
law.
(b) In addition, such Borrower shall pay any Other Taxes to the
relevant Governmental Authority in accordance with applicable law.
(c) The Company shall indemnify the Administrative Agent, each Lender
and the Issuing Bank, within 10 days after written demand therefor, for the full
amount of any Indemnified Taxes or Other Taxes (including Indemnified Taxes or
Other Taxes imposed or asserted on or attributable to amounts payable under this
Section 2.17(c)) paid by the Administrative Agent, such Lender or the Issuing
Bank, as the case may be, and any penalties, interest and reasonable expenses
arising therefrom or with respect thereto, whether or not such Indemnified Taxes
or Other Taxes were correctly or legally imposed or asserted by the relevant
Governmental Authority. A certificate as to the amount of such payment or
liability delivered to the Company by a Lender or the Issuing Bank, or by the
Administrative Agent on its own behalf or on behalf of a Lender or the Issuing
Bank, shall be conclusive absent manifest error.
(d) As soon as practicable after any payment of Indemnified Taxes or
Other Taxes by the Company to a Governmental Authority, the Company shall
deliver to the Administrative Agent the original or a certified copy of a
receipt issued by such Governmental
-46-
Authority evidencing such payment, a copy of the return reporting such payment
or other evidence of such payment reasonably satisfactory to the Administrative
Agent.
(e) Any Foreign Lender that is entitled to an exemption from or
reduction of withholding tax under the law of the jurisdiction in which the
Borrowers are located, or any treaty to which such jurisdiction is a party, with
respect to payments under this Agreement shall deliver to the Company (with a
copy to the Administrative Agent), at the time or times prescribed by applicable
law or reasonably requested by the Company, such properly completed and executed
documentation prescribed by applicable law as will permit such payments to be
made without withholding or at a reduced rate.
SECTION 2.18 Payments Generally; Pro Rata Treatment; Sharing of
Set-offs . (a) The Company shall make or, in the case of the Existing Letter of
Credit, the Subsidiary Borrower shall make, each payment required to be made by
such Borrower hereunder (whether of principal, interest, fees or reimbursement
of LC Disbursements, or under Section 2.15, 2.16 or 2.17, or otherwise) prior to
12:00 noon, Charlotte, North Carolina time, on the date when due, in immediately
available funds, without set-off or counterclaim. Any amounts received after
such time on any date may, in the discretion of the Administrative Agent, be
deemed to have been received on the next succeeding Business Day for purposes of
calculating interest thereon. All such payments shall be made to the
Administrative Agent at its Principal Office, except payments to be made
directly to the Issuing Bank or Swingline Lender as expressly provided herein
and except that payments pursuant to Sections 2.15, 2.16, 2.17 and 11.03 shall
be made directly to the Persons entitled thereto. The Administrative Agent shall
distribute any such payments received by it for the account of any other Person
to the appropriate recipient promptly following receipt thereof. If any payment
hereunder shall be due on a day that is not a Business Day, the date for payment
shall be extended to the next succeeding Business Day, and, in the case of any
payment accruing interest, interest thereon shall be payable for the period of
such extension. All payments hereunder shall be made in dollars.
(b) If at any time insufficient funds are received by and available
to the Administrative Agent to pay fully all amounts of principal, unreimbursed
LC Disbursements, interest and fees then due hereunder, such funds shall be
applied (i) first, to pay interest and fees then due hereunder, ratably among
the parties entitled thereto in accordance with the amounts of interest and fees
then due to such parties, and (ii) second, to pay principal and unreimbursed LC
Disbursements then due hereunder, ratably among the parties entitled thereto in
accordance with the amounts of principal and unreimbursed LC Disbursements then
due to such parties.
(c) If any Lender shall, by exercising any right of set-off or
counterclaim or otherwise, obtain payment in respect of any principal of or
interest on any of its Revolving Loans or participations in LC Disbursements or
Swingline Loans resulting in such Lender receiving payment of a greater
proportion of the aggregate amount of its Revolving Loans and participations in
LC Disbursements and Swingline Loans and accrued interest thereon than the
proportion received by any other Lender, then the Lender receiving such greater
proportion shall purchase (for cash at face value) participations in the
Revolving Loans and participations in LC Disbursements and Swingline Loans of
other Lenders to the extent necessary so that the benefit of all such payments
shall be shared by the Lenders ratably in accordance with the aggregate
-47-
amount of principal of and accrued interest on their respective Revolving Loans
and participations in LC Disbursements and Swingline Loans; provided that (i) if
any such participations are purchased and all or any portion of the payment
giving rise thereto is recovered, such participations shall be rescinded and the
purchase price restored to the extent of such recovery, without interest, and
(ii) the provisions of this paragraph shall not be construed to apply to any
payment made by any Loan Party pursuant to and in accordance with the express
terms of this Agreement or any payment obtained by a Lender as consideration for
the assignment of or sale of a participation in any of its Loans or
participations in LC Disbursements to any assignee or participant, other than to
a Loan Party or any subsidiary or Affiliate thereof (as to which the provisions
of this paragraph shall apply). Each Loan Party consents to the foregoing and
agrees, to the extent it may effectively do so under applicable law, that any
Lender acquiring a participation pursuant to the foregoing arrangements may
exercise against such Loan Party rights of set-off and counterclaim with respect
to such participation as fully as if such Lender were a direct creditor of the
Company in the amount of such participation.
(d) Unless the Administrative Agent shall have received notice from
the Company prior to the date on which any payment is due to the Administrative
Agent for the account of the Lenders or the Issuing Bank hereunder that the
Company will not make (or in the case of the Existing Letter of Credit, the
Subsidiary Borrower will not make) such payment, the Administrative Agent may
assume that the applicable Borrower has made such payment on such date in
accordance herewith and may, in reliance upon such assumption, distribute to the
Lenders or the Issuing Bank, as the case may be, the amount due. In such event,
if the applicable Borrower has not in fact made such payment, then each of the
Lenders or the Issuing Bank, as the case may be, severally agrees to repay to
the Administrative Agent forthwith on demand the amount so distributed to such
Lender or Issuing Bank with interest thereon, for each day from and including
the date such amount is distributed to it to but excluding the date of payment
to the Administrative Agent, at the Federal Funds Effective Rate.
(e) If any Lender shall fail to make any payment required to be made
by it pursuant to Section 2.04(c), 2.06(e), 2.07(b) or 2.18(d), then the
Administrative Agent may, in its discretion (notwithstanding any contrary
provision hereof), apply any amounts thereafter received by the Administrative
Agent for the account of such Lender to satisfy such Lender's obligations under
such Sections until all such unsatisfied obligations are fully paid.
SECTION 2.19 Mitigation Obligations; Replacement of Lenders. (a) If
any Lender requests compensation under Section 2.15, or if either Borrower is
required to pay any additional amount to any Lender or any Governmental
Authority for the account of any Lender pursuant to Section 2.17, then such
Lender shall use reasonable efforts to designate a different lending office for
funding or booking its Loans hereunder or to assign its rights and obligations
hereunder to another of its offices, branches or affiliates, if, in the judgment
of such Lender, such designation or assignment (i) would eliminate or reduce
amounts payable pursuant to Section 2.15 or 2.17, as the case may be, in the
future and (ii) would not subject such Lender to any unreimbursed cost or
expense and would not otherwise be disadvantageous to such Lender. The Company
hereby agrees to pay all reasonable costs and expenses incurred by any Lender in
connection with any such designation or assignment.
-48-
(b) If any Lender requests compensation under Section 2.15, or if
either Borrower is required to pay any additional amount to any Lender or any
Governmental Authority for the account of any Lender pursuant to Section 2.17,
or if any Lender defaults in its obligation to fund Loans hereunder, then the
Company may, at its sole expense and effort, upon notice to such Lender and the
Administrative Agent, require such Lender to assign and delegate, without
recourse (in accordance with and subject to the restrictions contained in
Section 11.05), all its interests, rights and obligations under this Agreement
to an assignee that shall assume such obligations (which assignee may be another
Lender, if a Lender accepts such assignment); provided that (i) the Company
shall have received the prior written consent of the Administrative Agent (and,
if a Commitment is being assigned, the Issuing Bank and Swingline Lender), which
consent shall not unreasonably be withheld, (ii) such Lender shall have received
payment of an amount equal to the outstanding principal of its Loans and
participations in LC Disbursements and Swingline Loans, accrued interest
thereon, accrued fees and all other amounts payable to it hereunder, from the
assignee (to the extent of such outstanding principal and accrued interest and
fees) or the Company (in the case of all other amounts) and (iii) in the case of
any such assignment resulting from a claim for compensation under Section 2.15
or payments required to be made pursuant to Section 2.17, such assignment will
result in a reduction in such compensation or payments. A Lender shall not be
required to make any such assignment and delegation if, prior thereto, as a
result of a waiver by such Lender or otherwise, the circumstances entitling the
Company to require such assignment and delegation cease to apply.
SECTION 2.20 Extensions of Maturity Date and Reduction Dates; Removal
of Lenders. (a) The Company may, by written notice to the Administrative Agent
(a "Notice of Extension") given not less than 60 nor more than 90 days prior to
each Anniversary Date, advise the Lenders that it requests an extension of the
then effective Maturity Date (the "Existing Maturity Date") and each then
effective Reduction Date (an "Existing Reduction Date") by 12 calendar months,
effective on the relevant Anniversary Date (the "Relevant Anniversary Date").
The Administrative Agent will promptly, and in any event within five Business
Days of the receipt of such Notice of Extension, notify the Lenders of the
contents of each such Notice of Extension.
(b) Each Notice of Extension shall (i) be irrevocable and (ii)
constitute a representation by the Loan Parties that (A) neither any Event of
Default nor any Default has occurred and is continuing and (B) the
representations and warranties contained in Article IV are correct on and as of
the Relevant Anniversary Date, as though made on and as of such date.
(c) In the event a Notice of Extension is given to the Administrative
Agent as provided in Section 2.20(a) and the Administrative Agent notifies a
Lender of the contents thereof, such Lender shall on or before the 30th day next
preceding the then Relevant Anniversary Date advise the Administrative Agent in
writing whether or not such Lender consents to the extension requested thereby
and if any Lender fails so to advise the Administrative Agent, such Lender shall
be deemed to have not consented to such extension. If Lenders holding 80% or
more of the Total Commitment so consent (the "Consenting Lenders") to such
extension and any and all Lenders who have not consented (the "Non-Consenting
Lenders") are replaced, the Maturity Date and each Reduction Date for the Notes
held by, and the Commitments of, the Consenting Lenders and the Nominees (as
defined below) shall be
-49-
automatically extended 12 calendar months past the Existing Maturity Date and
each corresponding Existing Reduction Date, effective on the Relevant
Anniversary Date. The Administrative Agent shall promptly notify the Borrowers
and all of the Lenders of each written notice of consent given pursuant to this
Section 2.20(c).
(d) In the event the Consenting Lenders hold less than 100% of the
Total Commitment, the Consenting Lenders, or any of them, shall have the right
(but not the obligation) to assume all or any portion of the Non-Consenting
Lenders' Commitments by giving written notice to the Company and the
Administrative Agent of their election to do so on or before the 20th day next
preceding the Relevant Anniversary Date, which notice shall be irrevocable and
shall constitute an undertaking to (i) assume, as of the close of business on
the Relevant Anniversary Date, all or such portion of the Commitments of the
Non-Consenting Lenders, as the case may be, as may be specified in such written
notice, and (ii) purchase (without recourse) from the Non-Consenting Lenders, at
the close of business on the Relevant Anniversary Date, the Revolving Credit
Exposure outstanding on the Relevant Anniversary Date that corresponds to the
portion of the Commitments to be so assumed at a price equal to the sum of (x)
the unpaid principal amount of all Loans so purchased, plus (y) the aggregate
amount, if any, previously funded by the transferor or any participations so
purchased, plus (z) all accrued and unpaid interest thereon. Such Commitments
and Revolving Credit Exposure, or portion thereof, to be assumed and purchased
by Consenting Lenders shall be allocated among those Consenting Lenders who have
so elected to assume the same pro rata in accordance with the respective
Commitments of such Consenting Lenders as of the Relevant Anniversary Date
(provided, however, in no event shall a Consenting Lender be required to assume
and purchase an amount or portion of the Commitments and Revolving Credit
Exposure of the Non-Consenting Lenders in excess of the amount which such
Consenting Lender agreed to assume and purchase pursuant to the immediately
preceding sentence) or on such other basis as such Consenting Lender shall
agree. The Administrative Agent shall promptly notify the Company and the other
Consenting Lenders in the event it receives any notice from a Consenting Lender
pursuant to this Section 2.20(d).
(e) In the event that the Consenting Lenders shall not elect as
provided in Section 2.20(d) to assume and purchase all of the Non-Consenting
Lenders' Commitments and Revolving Credit Exposure, the Company may designate,
by written notice to the Administrative Agent and the Consenting Lenders given
on or before the tenth day next preceding the Relevant Anniversary Date, one or
more Eligible Assignees not a party to this Agreement (individually, a "Nominee"
and collectively, the "Nominees") to assume all or any portion of the
Non-Consenting Lenders' Commitments not to be assumed by the Consenting Lenders
and to purchase (without recourse) from the Non-Consenting Lenders all Revolving
Credit Exposure outstanding at the close of business on the Relevant Anniversary
Date that corresponds to the portion of the Commitments so to be assumed at the
price specified in Section 2.20(d). Each assumption and purchase under this
Section 2.20(e) shall be effective as of the close of business on the Relevant
Anniversary Date when each of the following conditions has been satisfied in a
manner satisfactory to the Administrative Agent:
(i) each Nominee and the Non-Consenting Lenders have executed an
Assignment and Acceptance pursuant to which such Nominee shall (A) assume
in writing
-50-
its share of the obligations of the Non-Consenting Lenders hereunder,
including its share of the Commitments of the Non-Consenting Lenders and
(B) agree to be bound as a Lender by the terms of this Agreement; and
(ii) each Nominee shall have completed and delivered to the
Administrative Agent an Administrative Questionnaire.
(f) In the event that the Consenting Lenders shall not elect as
provided in Section 2.20(d) to assume all of the Non-Consenting Lenders'
Commitments and the Company shall not have effectively designated one or more
Nominees to assume the Commitments of and purchase the Revolving Credit Exposure
of the Non-Consenting Lenders as contemplated by Section 2.20(e), there shall be
no extension of the Existing Maturity Date nor any Existing Reduction Date.
ARTICLE III.
Conditions Precedent
--------------------
SECTION 3.01 Conditions Precedent to the Initial Credit Event. The
obligation of each Lender to make its initial Loan or the Issuing Bank to issue
the initial Letter of Credit under the Existing Credit Agreement as amended and
restated hereby is subject to the following conditions:
(a) The Administrative Agent shall have received the following, each
dated the initial Borrowing Date, except for the Loan Documents described in
clauses (i) through (v) below which shall be dated the Execution Date:
(i) this Agreement executed by each party hereto;
(ii) if requested by any Lender, a Note executed by the Company and
payable to the order of such Lender;
(iii)a certificate of an officer and of the secretary or an assistant
secretary of each Loan Party or its general partner or managing member, as
applicable, certifying, inter alia, (A) true and complete copies of each
of the certificate or articles of incorporation, partnership agreement or
articles of organization, as the case may be, as amended and in effect, of
such Loan Party and of its general partner or managing member, if any, the
bylaws, as amended and in effect, of such Loan Party and the resolutions
adopted by the Board of Directors of such Loan Party or its general
partner or managing member (1) authorizing the execution, delivery and
performance by such Loan Party of this Agreement and the other Loan
Documents to which it is or will be a party and, in the case of the
Company, the Borrowings to be made and the Letters of Credit to be issued
hereunder, (2) approving the forms of the Loan Documents to which it is a
party and which will be delivered at or prior to the initial Borrowing
Date and (3) authorizing officers of such Loan Party or its general
partner or managing member to execute and deliver the Loan Documents to
which such Loan Party is or will be a party
-51-
and any related documents, including any agreement contemplated by this
Agreement, (B) the incumbency and specimen signatures of the officers of
such Loan Party or its general partner or managing member executing any
documents on its behalf and (C) (1) that the representations and
warranties made by such Loan Party in each Loan Document to which such
Loan Party is a party and which will be delivered at or prior to the
initial Borrowing Date are true and correct in all material respects, (2)
the absence of any proceedings for the dissolution or liquidation of such
Person and (3) the absence of the occurrence and continuance of any
Default or Event of Default;
(iv) letters from CT Corporation System, Inc. in form and substance
satisfactory to the Administrative Agent evidencing the obligation of CT
Corporation System, Inc. to accept service of process in the State of New
York on behalf of each Loan Party that is not authorized to do business as
a foreign corporation in the State of New York;
(v) a favorable, signed opinion addressed to the Administrative Agent
and the Lenders from each of (A) Morrison & Hecker L.L.P., counsel to the
Loan Parties, given upon the express instruction of the Loan Parties, and
(B) Correro Fishman Haygood Phelps Walmsley & Casteix, special Louisiana
counsel to KMBT, given upon the express instruction of KMBT and the
Company; and
(vi) certificates of appropriate public officials as to the existence,
good standing and qualification to do business as a foreign corporation,
partnership or limited liability company, as applicable, of each Loan Party
in each jurisdiction in which the ownership of its properties or the
conduct of its business requires such qualification and where the failure
so to qualify would, individually or collectively, have a Material Adverse
Effect.
(b) The Administrative Agent shall be reasonably satisfied that all
required consents and approvals of any applicable Governmental Authority and any
other Person in connection with the transactions contemplated by this Section
3.01 shall have been obtained and remain in effect (except where the failure to
obtain such approvals would not have a Material Adverse Effect), and all
applicable waiting periods shall have expired (or been waived) without any
action being taken by any Governmental Authority.
(c) All agreements relating to, and the organizational structure of,
the Loan Parties, and all organic documents of the Loan Parties, shall be
reasonably satisfactory to the Administrative Agent and the Syndication Agent.
(d) The Company shall have paid to First Union Capital Markets and
First Union National Bank all fees and expenses pursuant to the Fee Letter
agreed upon by such parties to be paid on or prior to the Execution Date.
(e) The Company shall have paid to Andrews & Kurth L.L.P. pursuant to
Section 11.03 all reasonable fees and disbursements invoiced to the Company on
or prior to the Execution Date.
-52-
SECTION 3.02 Conditions Precedent to All Credit Events. Except with
respect to Revolving Credit Loans made by the Lenders pursuant to Section
2.06(f), the obligation of the Lenders to make any Loan or to issue or extend
any Letter of Credit under the Existing Credit Agreement as amended and restated
hereby (including any Loan made or Letter of Credit issued on the initial
Borrowing Date) is subject to the further conditions precedent that on the date
of such Credit Event:
(a) The conditions precedent set forth in Section 3.01 shall have
theretofore been satisfied;
(b) The representations and warranties set forth in Article IV and in
the other Loan Documents shall be true and correct in all material respects as
of, and as if such representations and warranties were made on, the date of the
proposed Loan or Letter of Credit, as the case may be (unless such
representation and warranty expressly relates to an earlier date), and the Loan
Parties shall be deemed to have certified to the Administrative Agent and the
Lenders that such representations and warranties are true and correct in all
material respects by the Company's delivery of a Borrowing Request;
(c) The Company shall have complied with the provisions of Section
2.03 or Section 2.04, as the case may be;
(d) No Default or Event of Default shall have occurred and be
continuing or would result from such Credit Event; and
(e) The Administrative Agent and the Lenders shall have received such
other approvals, opinions or documents as the Agent or the Required Lenders may
reasonably request.
The acceptance of the benefits of each Credit Event shall constitute a
representation and warranty by the Loan Parties to each of the Lenders that all
of the conditions specified in this Section 3.02 above exist as of that time.
SECTION 3.03 Conditions Precedent to the Initial Credit Event Made on
or After any Increase in Availability. The obligation of the Lenders to make the
initial Loan or the Issuing Bank to issue the initial Letter of Credit upon or
after any increase in Availability is subject to the further conditions that the
Administrative Agent shall have received a certificate of a Responsible Officer
of the Company certifying (a) the amount of such increase in Availability and a
description of the event resulting in such increase and (b) that the
representations and warranties contained in Article IV (unless any such
representation and warranty expressly relates to an earlier date) are true and
correct in all material respects as of, and as if such representations and
warranties were made on, the date of such initial Loan or such initial Letter of
Credit, as the case may be, after giving effect on a pro forma basis to the
event resulting in such increase and the use on such date of the proceeds of
such Loan or of such Letter of Credit.
SECTION 3.04 Conditions Precedent to Conversions. The obligation of
the Lenders to convert or continue any existing Borrowing as or into a
Eurodollar Borrowing is subject to the condition precedent that on the date of
such conversion or continuation no Default or Event of Default shall have
occurred and be continuing or would result from the making of
-53-
such conversion. The acceptance of the benefits of each such conversion or
continuation shall constitute a representation and warranty by the Loan Parties
to each of the Lenders that no Default or Event of Default shall have occurred
and be continuing or would result from the making of such conversion or
continuation.
SECTION 3.05 Delivery of Documents. All of the Loan Documents,
certificates, legal opinions and other documents and papers referred to in this
Article III, unless otherwise specified, shall be delivered to the
Administrative Agent for the account of each of the Lenders and, except for any
Notes, in sufficient counterparts or copies for each of the Lenders and shall be
satisfactory in form and substance to the Lenders.
ARTICLE IV.
Representations and Warranties
------------------------------
In order to induce the Lenders to enter into this Agreement and to
make the Loans provided for herein and to induce the Issuing Bank to issue
Letters of Credit and the other Lenders to participate therein and in the
Existing Letter of Credit, each Loan Party makes for itself, and the Company
makes for itself and the other Loan Parties, on or as of the Effective Date and
the occurrence of each Credit Event, the following representations and
warranties to the Administrative Agent and the Lenders:
SECTION 4.01 Organization and Qualification. The Company and each of
the Restricted Subsidiaries (a) is a corporation, partnership or limited
liability company duly organized or formed, validly existing and in good
standing under the laws of the state of its incorporation, organization or
formation, (b) has all requisite corporate, partnership, limited liability
company or other power to own its property and to carry on its business as now
conducted and (c) is duly qualified to do business and is in good standing in
every jurisdiction in which the failure to be so qualified would, individually
or together with all such other failures of the Company and the Restricted
Subsidiaries, have a Material Adverse Effect. As of the Execution Date, the
Persons and other entities named in Schedule 4.01 are all of the Subsidiaries of
the Company, and such Schedule 4.01 (x) accurately reflects (i) the direct owner
of the Capital Stock of each such Subsidiary and (ii) the percentage of the
issued and outstanding Capital Stock of each such Subsidiary owned by any Loan
Party, (y) accurately identifies such Subsidiaries and (z) accurately sets forth
the jurisdictions of their respective incorporation, organization or formation,
as the case may be, and jurisdictions in which they are qualified as foreign
corporations, foreign partnerships, foreign limited liability companies or other
foreign entities to do business.
SECTION 4.02 Authorization, Validity, Etc. Each Loan Party has all
requisite corporate, partnership, limited liability company or other power and
authority to execute, deliver and perform its obligations hereunder and under
the other Loan Documents to which it is a party and, in the case of the Company,
to make the Borrowings and in the case of each Borrower to obtain the issuance
of Letters of Credit hereunder, and all such action has been duly authorized by
all necessary corporate, partnership, limited liability company or other
proceedings on its part. This Agreement and the other Loan Documents have been
duly and validly executed and delivered by or on behalf of each Loan Party party
thereto and constitute
-54-
valid and legally binding agreements of such Loan Party enforceable against such
Loan Party in accordance with the respective terms thereof, except (a) as may be
limited by bankruptcy, insolvency, reorganization, moratorium, fraudulent
transfer, fraudulent conveyance or other similar laws relating to or affecting
the enforcement of creditors' rights generally, and by general principles of
equity (including principles of good faith, reasonableness, materiality and fair
dealing) which may, among other things, limit the right to obtain equitable
remedies (regardless of whether considered in a proceeding in equity or at law)
and (b) as to the enforceability of provisions for indemnification for violation
of applicable securities laws, limitations thereon arising as a matter of law or
public policy.
SECTION 4.03 Governmental Consents, Etc. No authorization, consent,
approval, license or exemption of or registration, declaration or filing with
any Governmental Authority, is necessary for the valid execution, delivery or
performance by any Loan Party of any Loan Document to which it is a party,
except those that have been obtained and such matters relating to performance as
would ordinarily be done in the ordinary course of business after the Execution
Date.
SECTION 4.04 Conflicting or Adverse Agreements or Restrictions.
Neither the Company nor any of the Restricted Subsidiaries is a party to any
contract or agreement or subject to any restriction that would reasonably be
expected to have a Material Adverse Effect. Neither the execution, delivery and
performance by any Loan Party of the Loan Documents to which it is a party, nor
compliance with the terms and provisions thereof, nor the extensions of credit
contemplated by the Loan Documents, (a) will breach or violate any applicable
Requirement of Law, (b) will result in any breach or violation of, any of the
terms, covenants, conditions or provisions of, or constitute a default under, or
result in the creation or imposition of (or the obligation to create or impose)
any Lien upon any of its property or assets (other than Liens created or
contemplated by this Agreement) pursuant to the terms of any indenture,
mortgage, deed of trust, agreement or other instrument to which it or any of its
Subsidiaries is party or by which any property or asset of it or any of its
Subsidiaries is bound or to which it is subject, except for breaches, violations
and defaults under clauses (a) and (b) that neither individually nor in the
aggregate for all Loan Parties could reasonably be expected to result in a
Material Adverse Effect or (c) will violate any provision of the organic
documents of any Loan Party.
SECTION 4.05 Properties. (a) Each of the Company and the Subsidiaries
has good title to, or valid leasehold or other interests in, all its real and
personal property material to its business, except for minor defects in title
that do not materially interfere with its ability to conduct its business as
currently conducted or to utilize such properties for their intended purposes.
(b) Each of the Company and the Restricted Subsidiaries owns, or is
licensed to use, all trademarks, trade names, copyrights, patents and other
intellectual property material to its business, and the use thereof by the
Company and the Restricted Subsidiaries does not infringe upon the rights of any
other Person, except for any such infringements that, neither individually nor
in the aggregate for the Company and such Subsidiaries, could reasonably be
expected to result in a Material Adverse Effect.
-55-
SECTION 4.06 Litigation and Environmental Matters. (a) There are no
actions, suits or proceedings by or before any arbitrator or Governmental
Authority pending against or, to the knowledge of the Company, threatened
against or affecting the Company or any of its Subsidiaries (i) as to which
there is a reasonable possibility of an adverse determination and that, if
adversely determined, could reasonably be expected, individually or in the
aggregate for the Company and such Subsidiaries, to result in a Material Adverse
Effect (other than the Disclosed Matters) or (ii) that involve this Agreement or
the Transactions.
(b) Except for the Disclosed Matters and except with respect to any
other matters that, individually or in the aggregate for the Company and the
Subsidiaries, could not reasonably be expected to result in a Material Adverse
Effect, neither the Company nor any of the Subsidiaries (i) has failed to comply
with any Environmental Law or to obtain, maintain or comply with any permit,
license or other approval required under any Environmental Law, (ii) has become
subject to any Environmental Liability, (iii) has received notice of any claim
with respect to any Environmental Liability or (iv) knows of any basis for any
Environmental Liability.
(c) Since the Execution Date, there has been no change in the status
of the Disclosed Matters that, individually or in the aggregate, has resulted
in, or materially increased the likelihood of, a Material Adverse Effect.
SECTION 4.07 Financial Statements. (a) The consolidated and
consolidating balance sheets of the Company and its consolidated Subsidiaries as
at December 31, 1997 and the related consolidated and consolidating statements
of income, partners', shareholders' or members' equity and cash flow of the
Company and its consolidated Subsidiaries for the fiscal year ended on said
date, with (in the case of such consolidated financial statements) the opinion
thereon of Price Waterhouse L.L.P. (currently known as PricewaterhouseCoopers
LLP) heretofore furnished to the Lenders and the unaudited consolidated and
consolidating balance sheets of the Company and its consolidated Subsidiaries as
at September 30, 1998 and their related consolidated and consolidating
statements of income, partners', shareholders' or members' equity and cash flow
of the Company and its consolidated Subsidiaries for the six-month period ended
on such date heretofore furnished to the Lenders, are complete and correct and
fairly present the consolidated financial condition of the Company and its
consolidated Subsidiaries as at said dates and the results of their operations
for the fiscal year and the six-month period ended on said dates, all in
accordance with GAAP, as applied on a consistent basis (subject, in the case of
the interim financial statements, to the absence of footnotes and to normal
year-end and audit adjustments).
(b) Since December 31, 1997, there has been no material adverse
change in the business, assets, operations or condition, financial or otherwise,
of the Company and the Restricted Subsidiaries, taken as a whole.
SECTION 4.08 Disclosure. The Company has disclosed to the Lenders all
agreements, instruments and corporate or other restrictions to which it or any
of the Restricted Subsidiaries is subject, and all other matters known to it,
that, individually or in the aggregate for the Company and such Subsidiaries,
could reasonably be expected to result in a Material
-56-
Adverse Effect. None of the reports, financial statements, certificates or other
information furnished by or on behalf of the Company to the Administrative Agent
or any Lender in connection with the syndication or negotiation of this
Agreement or delivered hereunder (as modified or supplemented by other
information so furnished) contains any material misstatement of fact or omits to
state any material fact necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading; provided that
(i) with respect to projected financial information, the Company represents only
that such information was prepared in good faith based upon assumptions believed
to be reasonable at the time and (ii) with respect to information respecting the
Santa Fe Acquisition and the Shell JV Investment, such information was provided
to the Company by SFMLP and Shell respectively and therefore the Company only
represents that to its knowledge such information is correct and complete.
SECTION 4.09 Investment Company Act. Neither the Company nor any of
its Subsidiaries is, or is regulated as, an "investment company," as such term
is defined in the Investment Company Act of 1940, as amended.
SECTION 4.10 Public Utility Holding Company Act. Neither the Company
nor any of its Subsidiaries is a non-exempt "holding company,"or subject to
regulation as such, or an "affiliate" of a "holding company" or a "subsidiary
company" of a "holding company,"within the meaning of the Public Utility Holding
Company Act of 1935, as amended.
SECTION 4.11 ERISA. No ERISA Event has occurred or is reasonably
expected to occur that, when taken together with all other such ERISA Events for
which liability is reasonably expected to occur, could reasonably be expected to
result in a Material Adverse Effect. The present value of all accumulated
benefit obligations under each Plan (based on the assumptions used for purposes
of Statement of Financial Accounting Standards No. 87) did not, as of the date
of the most recent financial statements reflecting such amounts, exceed by more
than $5,000,000 the fair market value of the assets of such Plan, and the
present value of all accumulated benefit obligations of all underfunded Plans
(based on the assumptions used for purposes of Statement of Financial Accounting
Standards No. 87) did not, as of the date of the most recent financial
statements reflecting such amounts, exceed by more than $5,000,000 the fair
market value of the assets of all such underfunded Plans.
SECTION 4.12 Tax Returns and Payments. (a) The Company and its
Subsidiaries have caused to be filed all federal income tax returns and other
material tax returns, statements and reports (or obtained extensions with
respect thereto) which are required to be filed and have paid or deposited or
made adequate provision in accordance with GAAP for the payment of all taxes
(including estimated taxes shown on such returns, statements and reports) which
are shown to be due pursuant to such returns, except where the failure to pay
such taxes (individually or in the aggregate for the Company and the Restricted
Subsidiaries) would not have a Material Adverse Effect. No material income tax
liability of the Company or the Restricted Subsidiaries has been asserted by the
Internal Revenue Service of the United States or any other Governmental
Authority for any taxes in excess of those already paid, except for taxes which
are being contested in good faith by appropriate proceedings and for which
adequate reserves in accordance with GAAP have been created on the books of the
Company and the Restricted Subsidiaries.
-57-
(b) The federal income tax liabilities, if any, of the Company and
its Subsidiaries (and of all Persons who are partners of the Company) have been
finally determined by the Internal Revenue Service and satisfied for all taxable
years through the fiscal year ending in 1994.
SECTION 4.13 Compliance with Laws and Agreements. Each of the Company
and the Restricted Subsidiaries is in compliance with all laws, regulations and
orders of any Governmental Authority applicable to it or its property and all
indentures, agreements and other instruments binding upon it or its property,
except where the failure to do so, individually or in the aggregate for the
Company and the Restricted Subsidiaries, could not reasonably be expected to
result in a Material Adverse Effect. No Default or Event of Default has occurred
and is continuing.
SECTION 4.14 Purpose of Loans. (a) All proceeds of the Loans will be
used for the purposes set forth in Section 5.08. All Letters of Credit (other
than the Existing Letter of Credit) have been or will be issued in connection
with the working capital requirements of the Company or a Restricted Subsidiary.
(b) None of the proceeds of the loans under any portion of the OLP
"A" Refinancing, the Subsidiary Borrower Credit Agreement, the Existing Letter
of Credit, the Existing Credit Agreement or this Agreement were or will be used
directly or indirectly for the purpose of buying or carrying any "margin stock"
within the meaning of Regulation U (herein called "margin stock") or for the
purpose of reducing or retiring any indebtedness (including the indebtedness
repaid with the proceeds of the loans made under the agreements constituting the
OLP "A" Refinancing or the Subsidiary Borrower Credit Agreement) which was
originally incurred to buy or carry a margin stock, or for any other purpose
which might constitute this transaction a "purpose" credit within the meaning of
Regulation T, U or X. Neither any Loan Party nor any agent acting on its behalf
has taken or will take any action which might cause this Agreement or any other
Loan Document to violate Regulation T, Regulation U, Regulation X, or any other
regulation of the Board or to violate the Securities Exchange Act of 1934.
Margin stock does not constitute more than 25% of the assets of the Company or
any Loan Party and the Company does not intend or foresee that it will ever do
so.
SECTION 4.15 No Intent to Hinder, Delay or Defraud. Each Subsidiary
Guarantor has entered into this Agreement, including the Subsidiary Guarantors
Guaranty and the other Loan Documents, with no intent to hinder, delay or
defraud any Person to whom such Subsidiary Guarantor was or becomes, on or after
the Execution Date, indebted, within the meaning of Section 548 of the
Bankruptcy Code or any similar provision of state law.
SECTION 4.16 Year 2000. The Company will use reasonable best efforts
to ensure that any reprogramming required to permit the proper functioning, in
and following the year 2000, of (a) the computer systems of the Company and the
Restricted Subsidiaries and (b) equipment of the Company and the Restricted
Subsidiaries containing embedded microchips and the testing of all such systems
and equipment, as reprogrammed, will be completed by December 31, 1999. The cost
to the Company and the Restricted Subsidiaries of such reprogramming and,
-58-
to the knowledge of the Company, of the reasonably foreseeable consequences of
year 2000 to the Company and the Restricted Subsidiaries, taken as a whole
(including, without limitation, reprogramming errors) will not result in an
Event of Default or a Material Adverse Effect.
ARTICLE V.
Affirmative Covenants
---------------------
Until the Commitments have expired or been terminated and the
principal of and interest on each Loan and all fees payable hereunder shall have
been paid in full and all Letters of Credit shall have expired or terminated and
all LC Disbursements shall have been reimbursed, the Company covenants and
agrees with the Lenders that:
SECTION 5.01 Financial Statements and Other Information. The Company
will furnish to the Administrative Agent, in each case with sufficient copies
for each Lender:
(a) As soon as available and in any event within 120 days after the
end of each fiscal year of the Company: (i) the audited consolidated statements
of income, partners' equity, changes in financial position and cash flow of the
Company for such fiscal year, and the related consolidated balance sheet of the
Company as at the end of such fiscal year, setting forth in each case in
comparative form the figures for (or in the case of the balance sheet, as of the
end of) the previous fiscal year, accompanied by the related opinion of
independent public accountants of recognized national standing acceptable to the
Administrative Agent, which opinion shall (x) state that said financial
statements of the Company fairly present the consolidated financial condition
and results of operations of the Company as at the end of, and for, such fiscal
year and that such financial statements have been prepared in accordance with
GAAP except for such changes in such principles with which the independent
public accountants shall have concurred, and (y) not contain a "going concern"
or other adverse qualification or exception unacceptable to the Required
Lenders; and (ii) a certificate of such accountants stating that, in making the
examination necessary for their opinion, they obtained no knowledge, except as
specifically stated, of any Event of Default or Default, and stating whether any
change in GAAP or in the application thereof has occurred since the date of the
audited financial statements referred to in Section 4.07(b) and, if any such
change has occurred, specifying the effect of such change on the financial
statements accompanying such certificate.
(b)(i) As soon as available and in any event within 60 days after the
end of each of the first three fiscal quarterly periods of each fiscal year of
the Company, unaudited consolidated statements of income, partners' equity,
changes in financial position and cash flow of the Company for such period and
for the period from the beginning of the respective fiscal year to the end of
such period, and the related unaudited consolidated balance sheet as at the end
of such period, setting forth in each case in comparative form the figures for
(or in the case of balance sheets, as of the end of) the corresponding periods
in the previous fiscal year, accompanied by the certificate of a Responsible
Officer of the Company, which certificate shall state that said financial
statements fairly present the consolidated financial condition and results
-59-
of operations of the Company in accordance with GAAP, as at the end of, and for,
such period (subject to the absence of footnotes and changes resulting from
normal year-end audit adjustments).
(ii) As soon as available and in any event within 60 days after the
end of each of the first three fiscal quarterly periods of each fiscal year, and
within 120 days after the end of each fiscal year of OLP "A", the Subsidiary
Borrower, OLP "C", OLP "D" and each other Restricted Subsidiary the Capital
Stock of which is owned directly by the Company, unaudited consolidated
statements of income, partners', shareholders' or members' equity, as the case
may be, changes in financial position and cash flow of such Person and its
Subsidiaries for such period and for the period from the beginning of the
respective fiscal year to the end of such period, and the related unaudited
consolidated balance sheet as at the end of such period, setting forth in each
case in comparative form the figures for (or in the case of balance sheets, as
of the end of) the corresponding periods in the previous fiscal year,
accompanied by the certificate of a Responsible Officer of such Person, which
certificate shall state that said financial statements fairly present the
consolidated and consolidating financial condition and results of operations of
such Person in accordance with GAAP, as at the end of, and for, such period
(subject to the absence of footnotes and changes resulting from normal year-end
audit adjustments).
(c) Promptly upon receipt thereof, and in the form received, all
audited and unaudited financial statements (whether quarterly or annual)
received by any Loan Party from any Person (other than an individual) whose
income is accounted for through any of the Persons referenced in Section
5.01(b)(ii) and whose EBITDA or distributions, as the case may be, exceed 15% of
the Company Cash Flow.
(d) Prompt written notice of the following:
(i) the occurrence of any Default or Event of Default or Change of
Control Event;
(ii) the occurrence of any ERISA Event that, alone or together with
any other ERISA Events that have occurred, could reasonably be expected to
result in liability of the Company and the Restricted Subsidiaries in an
aggregate amount exceeding $5,000,000; and
(iii)any other development that results in, or could reasonably be
expected to result in, a Material Adverse Effect.
Each notice delivered under this Section 5.01 shall be accompanied by a
statement of a Responsible Officer setting forth the details of the event or
development requiring such notice and any action taken or proposed to be taken
with respect thereto.
(e) Promptly upon receipt thereof, a copy of each other report or
letter submitted to the Company by independent accountants in connection with
any annual, interim or special audit made by them of the books of the Company,
and a copy of any response by the
-60-
Company, or the Board of Directors of the general partner of the Company, to
such letter or report.
(f) Promptly upon its becoming available, each financial statement,
report, notice or proxy statement sent by the Company to stockholders generally
and each regular or periodic report and any registration statement or prospectus
filed by the Company with any securities exchange or the Securities and Exchange
Commission or any successor agency.
(g) Promptly after the furnishing thereof, copies of any statement,
report or notice furnished to any Person pursuant to the terms of any indenture,
loan or credit or other similar agreement, other than this Agreement and not
otherwise required to be furnished to the Administrative Agent pursuant to any
other provision of this Section 5.01.
(h) From time to time such other information regarding the business,
affairs or financial condition of the Company or any Restricted Subsidiary
(including any Plan or Multiemployer Plan and any reports or other information
required to be filed under ERISA) as the Required Lenders or the Administrative
Agent may reasonably request.
The Company will furnish to the Administrative Agent, at the time it furnishes
each set of financial statements pursuant to paragraph (a) or (b) above, a
certificate substantially in the form of Exhibit 5.01 executed by a Responsible
Officer of the Company (i) certifying as to the matters set forth therein and
stating that no Event of Default or Default has occurred and is continuing (or,
if any Event of Default or Default has occurred and is continuing, describing
the same in reasonable detail), (ii) setting forth in reasonable detail the
computations necessary to determine whether the Company is in compliance with
Sections 6.09(a), (b) and (c) and the computations necessary to determine the
ratio referred to in the definition of "Applicable Margin" as of the end of the
respective fiscal quarter or fiscal year, and (iii) a statement, with respect to
each Intercompany Note, of (A) the actual outstanding principal amount thereof,
and the amount of any accrued and unpaid interest thereon, as at the end of the
respective quarter or fiscal year, as the case may be, and (B) the highest and
lowest principal amount thereof at any time outstanding during such quarter or
fiscal year and the periods during such quarter or fiscal year during which the
principal of such Intercompany Note was outstanding in each such amount.
SECTION 5.02 Litigation. The Company shall promptly give to the
Administrative Agent notice of all legal or arbitral proceedings, and of all
proceedings before any Governmental Authority affecting the Company or any
Restricted Subsidiary, except proceedings which, if adversely determined, would
not have a Material Adverse Effect. The Company will, and will cause each of the
Restricted Subsidiaries to, promptly notify the Administrative Agent of any
claim, judgment, Lien or other encumbrance affecting any property or assets of
the Company or any such Subsidiary if the value of the claim, judgment, Lien, or
other encumbrance affecting such property or assets shall exceed $5,000,000.
SECTION 5.03 Existence, Conduct of Business. The Company will, and
will cause each of the Restricted Subsidiaries to, do or cause to be done all
things necessary to preserve, renew and keep in full force and effect its legal
existence and the rights, licenses, permits, privileges and franchises material
to the conduct of its business; provided that the
-61-
foregoing shall not prohibit any merger, consolidation, liquidation or
dissolution permitted under Section 6.03.
SECTION 5.04 Payment of Obligations. The Company will, and will cause
each of the Subsidiaries to, pay its obligations, including tax liabilities,
that, if not paid, could result in a Material Adverse Effect before the same
shall become delinquent or in default, except where (a) the validity or amount
thereof is being contested in good faith by appropriate proceedings, (b) the
Company or such Subsidiary has set aside on its books adequate reserves with
respect thereto in accordance with GAAP and (c) the failure to make payment
pending such contest could not reasonably be expected to result in a Material
Adverse Effect.
SECTION 5.05 Maintenance of Properties; Insurance. The Company will,
and will cause each of the Restricted Subsidiaries to, (a) keep and maintain all
property material to the conduct of its business in good working order and
condition, ordinary wear and tear excepted, and (b) maintain, with financially
sound and reputable insurance companies, insurance in such amounts and against
such risks as are customarily maintained by companies engaged in the same or
similar businesses operating in the same or similar locations.
SECTION 5.06 Books and Records; Inspection Rights. The Company will,
and will cause each of the Restricted Subsidiaries to, keep proper books of
record and account in which full, true and correct entries are made of all
dealings and transactions in relation to its business and activities. The
Company will, and will cause each of the Restricted Subsidiaries to, permit any
representatives designated by the Administrative Agent or any Lender, upon
reasonable prior notice, to visit and inspect its properties, to examine and
make extracts from its books and records, and to discuss its affairs, finances
and condition with its officers and independent accountants, all at such
reasonable times and as often as reasonably requested.
SECTION 5.07 Compliance with Laws. The Company will, and will cause
each of the Subsidiaries to, comply with all Requirements of Law applicable to
it or its property, except where the failure to do so, individually or in the
aggregate, could not reasonably be expected to result in a Material Adverse
Effect.
SECTION 5.08 Use of Proceeds and Letters of Credit. The proceeds of
the Loans will be used only for working capital and other partnership purposes.
No part of the proceeds of any Loan has been or will be used, whether directly
or indirectly, for any purpose that entails a violation of any of the
Regulations of the Board, including Regulations T, U and X. The Letters of
Credit (including the Existing Letter of Credit) that have been and that are to
be issued under this Agreement shall as provided in Section 2.06(c) be subject
to an aggregate limit of $75,000,000.
SECTION 5.09 Further Assurances. The Company will cure promptly, or
cause another Loan Party to cure promptly, any defects in the creation and
issuance of any Notes and the execution and delivery of this Agreement. The
Company at its expense will promptly execute and deliver, or cause the
appropriate other Loan Party to execute and deliver, to the Administrative Agent
upon request all such other documents, agreements and instruments to
-62-
comply with or accomplish the covenants and agreements of the Loan Parties in
this Agreement and the other Loan Documents to which each such Loan Party is a
Party.
SECTION 5.10 Performance of Obligations. The Company will pay the
Loans according to the reading, tenor and effect thereof; and the Company will
do and perform or cause each other Loan Party to do and perform every act and
discharge all of the Obligations to be performed and discharged by it under this
Agreement, at the time or times and in the manner specified.
SECTION 5.11 Lines of Business. The Company will, and will cause each
Restricted Subsidiary to, be and remain engaged in only those lines of business
in which the Company and such Subsidiaries are engaged on the date of this
Agreement, any additional lines of business reasonably related thereto, and no
others.
SECTION 5.12 Intercompany Notes. The Company will cause each
Subsidiary Guarantor to execute a promissory note in favor of the Company in an
original principal amount equal to the lesser of (i) the Commitment and (ii) the
actual amount from time to time outstanding of Indebtedness of such Subsidiary
to the Company (being the sum of the amounts specified pursuant to clause (i) of
the next sentence), and dated the Execution Date in the case of the Subsidiary
Guarantors party to this Agreement on such date and in the case of any other
Subsidiary Guarantor, the date such Person becomes a Subsidiary Guarantor
pursuant to Section 6.03 (collectively, the "Intercompany Notes"). The Company
will maintain accounts in which it shall record (i) the amount of the proceeds
of each Loan, and each other amount, from time to time advanced to such
Subsidiary Guarantor and the amount of each payment made by the Company to
reimburse the Issuing Bank for any drawing made under any Letter of Credit on
which such Subsidiary Guarantor is an account party; (ii) the interest rate
applicable to such advance or payment; and (iii) each payment of principal or
interest made by such Subsidiary Guarantor.
ARTICLE VI.
Negative Covenants
------------------
Until the Commitments have expired or terminated and the principal of
and interest on each Loan and all fees payable hereunder have been paid in full
and all Letters of Credit have expired or terminated and all LC Disbursements
shall have been reimbursed, the Company covenants and agrees with the Lenders
that:
SECTION 6.01 Indebtedness. The Company will not, and will not permit
any Restricted Subsidiary to, create, incur, assume or permit to exist any
Indebtedness (including any obligation of the Company or a Restricted Subsidiary
in respect of Indebtedness of an Unrestricted Subsidiary, whether by way of
guaranty or other direct or indirect support or assurance against loss provided
to the holder of such Indebtedness) except:
(a) Indebtedness created hereunder;
-63-
(b) Refinancing Indebtedness;
(c) Indebtedness in respect of the SFPP First Mortgage Notes and
Indebtedness under the SFPP Revolving Credit Facility not in excess of
$380,000,000 aggregate principal amount for all such Indebtedness at any one
time outstanding; provided that neither the Company nor any other Restricted
Subsidiary shall be liable for any such Indebtedness except for any Indebtedness
for which OLP "D" may be liable solely as a result of its being the general
partner of SFPP.
(d) Indebtedness of the Company to any Restricted Subsidiary and of
any Restricted Subsidiary to the Company or any other Restricted Subsidiary,
provided that (i) any such borrowing Restricted Subsidiary (other than SFPP)
shall be a Subsidiary Guarantor, (ii) if such borrowing Restricted Subsidiary
shall be SFPP, unless at the time it incurs such Indebtedness it is a Subsidiary
Guarantor and no SFPP First Mortgage Notes are outstanding and the SFPP
Revolving Credit Facility has been repaid in full and terminated, such
Indebtedness of SFPP shall consist solely of SFPP Intracompany Refinancing
Indebtedness, and (iii) any such lending Restricted Subsidiary shall
subordinate, on terms (including terms as to maturity, required amortization,
and limitations on voluntary prepayments) reasonably satisfactory to the
Required Lenders, its right to repayment of the Indebtedness of the Company or
the borrowing Restricted Subsidiary, as the case may be, owing to it and
otherwise permitted by this Section 6.01(d) to the rights of the Lenders to
repayment of all Obligations of the Company or such borrowing Restricted
Subsidiary, as the case may be, from time to time outstanding and owing to them
under this Agreement;
(e) Indebtedness of the Company or a Restricted Subsidiary (including
any Indebtedness in respect of Guarantees contemplated by Section 6.04(e)) in an
aggregate principal amount for the Company and all Restricted Subsidiaries not
in excess of $75,000,000 at any one time outstanding;
(f) additional Indebtedness of the Company (which may be guaranteed
by one or more Restricted Subsidiaries), provided that no required principal
payment (whether at stated maturity, or by virtue of scheduled amortization,
required prepayment or redemption) shall be due in respect thereof prior to the
final maturity of the Indebtedness outstanding hereunder; and
(g) Indebtedness evidenced by the Bonds.
SECTION 6.02 Liens. The Company will not, and will not permit any
Restricted Subsidiary to, create, incur, assume or permit to exist any Lien on
any property or asset now owned or hereafter acquired by it, or assign or sell
any income or revenues (including accounts receivable) or rights in respect of
any thereof, except:
(a) Permitted Encumbrances;
(b) any Lien on any property or asset of the Company or any
Restricted Subsidiary existing on the date hereof and set forth in Schedule
6.02; provided that (i) such Lien shall not extend to any other property or
asset of the Company or such Subsidiary and (ii) such Lien shall secure only
those obligations which it secures on the date hereof and Refinancing
-64-
Indebtedness thereof other than such Refinancing Indebtedness owed to the
Company or any Restricted Subsidiary;
(c) Liens on properties or assets of SFPP securing the SFPP First
Mortgage Notes and the SFPP Revolving Credit Facility, and Liens on the same
properties or assets that secure the SFPP First Mortgage Notes, or the SFPP
Revolving Credit Facility, as the case may be (and that do not extend to any
other assets), securing SFPP Refinancing Indebtedness (other than SFPP
Intracompany Refinancing Indebtedness);
(d) any Lien existing on any property or asset prior to the
acquisition thereof by the Company or any Restricted Subsidiary or existing on
any property or asset of any Person that becomes a Restricted Subsidiary after
the date hereof prior to the time such Person becomes a Restricted Subsidiary;
provided that (i) such Lien is not created in contemplation of or in connection
with such acquisition or such Person becoming a Restricted Subsidiary , as the
case may be, (ii) such Lien shall not apply to any other property or assets of
the Company or any Restricted Subsidiary, (iii) such Lien shall secure only
those obligations which it secures on the date of such acquisition or the date
such Person becomes a Restricted Subsidiary, as the case may be, and (iv) after
giving effect to such acquisition or such Person becoming a Restricted
Subsidiary, the Indebtedness secured by such Lien would be permitted by Section
6.01(e), and extensions, renewals and replacements thereof that do not increase
the outstanding principal amount thereof; and
(e) Liens on fixed or capital assets acquired, constructed or
improved by the Company or any Restricted Subsidiary; provided that (i) such
security interests secure Indebtedness permitted by clause (e) of Section 6.01,
(ii) such security interests and the Indebtedness secured thereby are incurred
prior to or within 90 days after such acquisition or the completion of such
construction or improvement, (iii) the Indebtedness secured thereby does not
exceed 80% of the cost of acquiring, constructing or improving such fixed or
capital assets and (iv) such security interests shall not apply to any other
property or assets of the Company or any Restricted Subsidiary.
SECTION 6.03 Fundamental Changes. The Company will not, and will not
permit any Restricted Subsidiary to, merge into or consolidate with any other
Person, or permit any other Person to merge into or consolidate with it, or
sell, transfer, lease or otherwise dispose of (in one transaction or in a series
of transactions) all (or substantially all) of its assets, or all or
substantially all of the stock of or other equity interest in any of its
Restricted Subsidiaries (in each case, whether now owned or hereafter acquired),
or liquidate or dissolve, except that, if at the time thereof and immediately
after giving effect thereto no Event of Default or Default shall have occurred
and be continuing (a) any Person may merge into the Company in a transaction in
which the Company is the surviving entity, (b) any Person may merge into any
Restricted Subsidiary in a transaction in which the surviving entity is a
Wholly-Owned Restricted Subsidiary, (c) any Restricted Subsidiary may sell,
transfer, lease or otherwise dispose of its assets to the Company or to a
Wholly-Owned Restricted Subsidiary (other than SFPP), (d) KMNGL may dissolve and
liquidate into OLP "A", and (e) any Restricted Subsidiary (other than a
Subsidiary Guarantor) may liquidate or dissolve if the Company determines in
good faith that such liquidation or dissolution is in the best interests of the
Company and is not materially
-65-
disadvantageous to the Lenders and such liquidation or dissolution complies with
this Section 6.03.
SECTION 6.04 Investments, Loans, Advances, Guarantees and
Acquisitions; Hedging Agreements. The Company will not, and will not permit any
of its Restricted Subsidiaries to, purchase, hold or acquire (including pursuant
to any merger with any Person that was not a Wholly-Owned Restricted Subsidiary
prior to such merger) any Capital Stock, evidences of indebtedness or other
securities (including any option, warrant or other right to acquire any of the
foregoing) of, make or permit to exist any loans or advances to, Guarantee any
obligations of, or make or (in the case of investments in Shell CO2) commit to
make, or permit to exist any investment or any other interest in, any other
Person, or purchase or otherwise acquire (in one transaction or a series of
transactions) any assets of any other Person constituting a business unit,
except:
(a) the Company Guaranty and the Subsidiary Guarantors Guaranty
and Permitted Investments;
(b) investments, existing on the Execution Date, by the Company and
the Restricted Subsidiaries in the Capital Stock of their respective
Subsidiaries;
(c) investments in, loans to and Guarantees of Indebtedness or other
obligations of any Person (other than SFPP until such time as no SFPP First
Mortgage Notes are outstanding and the SFPP Revolving Credit Facility has been
repaid in full and terminated) that is a Restricted Subsidiary both before and
immediately after the making of such investment or loan, or the giving of such
Guarantee and, in the case of the Company, investments in or loans to SFPP
consisting of SFPP Intracompany Refinancing Indebtedness;
(d) investments in the Capital Stock of any other Person, if
immediately after and giving effect to the making of such investment:
(i) no Event of Default or Default shall have occurred and be
continuing or would result therefrom;
(ii) any acquired or newly-formed corporation, partnership,
association or other business entity (a "New Subsidiary") shall be a
Wholly-Owned Restricted Subsidiary whose Capital Stock is owned directly
by the Company or one or more Wholly-Owned Restricted Subsidiaries (other
than SFPP), and such New Subsidiary shall become a Restricted Subsidiary
and be engaged primarily in one or more lines of business permitted by
Section 5.11, and shall have executed a Subsidiary Guarantor Counterpart
in the form of Exhibit 6.03 (a "Subsidiary Guarantor Counterpart");
(iii)the Company and the Restricted Subsidiaries shall be in
compliance, on a pro forma basis, after giving effect to such acquisition
or formation, with the covenants contained in Article VI, recomputed as at
the last day of the most recently ended fiscal quarter of the Company and
the Restricted Subsidiaries as if such acquisition had occurred on the
first day of each relevant period for testing such compliance, and, the
Company shall have delivered to the Administrative Agent, the Issuing Bank
and the
-66-
Lenders a certificate of a Responsible Officer to such effect, together
with all relevant financial information of such New Subsidiary or assets
and calculations demonstrating such compliance;
(iv) any New Subsidiary shall not be liable for any Indebtedness
(except for Indebtedness permitted by Section 6.01);
(v) the Required Lenders shall have given their prior written consent
(which consent shall not be unreasonably withheld, taking into
consideration the merits of the acquisition) in the case of any
acquisition made, directly or indirectly, with the proceeds of
Indebtedness incurred by the Company or one or more Restricted
Subsidiaries in excess of $150,000,000; and
(vi) the Administrative Agent shall have received (A) such opinions
of counsel to such New Subsidiary as the Administrative Agent, the Issuing
Bank and the Lenders may reasonably request as to the organization, good
standing and enforceability of this Agreement and the Subsidiary Guarantor
Counterpart and such other matters as the Administrative Agent, the
Issuing Bank and the Lenders may reasonably require and (B) such other
agreements, certificates, approvals, reports, consents, waivers,
estoppels, subordination agreements, filings and other documentation as
the Administrative Agent and the Required Lenders may reasonably request;.
provided, however, that notwithstanding the foregoing, the Company will cause
SFPP at such time as no default under any of its Indebtedness would result
therefrom to execute a Subsidiary Guarantor Counterpart and comply with clause
(vi) above; and
(e) (i) investments, loans and (to the extent permitted by Section
6.01(e)) Guarantees, and (ii) mandatory contributions to Shell CO2 under the
partnership agreement of Shell CO2, in an aggregate amount at any one time
outstanding for all such investments, loans, Guarantees and contributions not
exceeding $75,000,000.
Notwithstanding the foregoing provisions of this Section 6.04, the Company may
at any time or from time to time make investments, loans and Guarantees in
amounts that, in the aggregate, when made, do not exceed the net proceeds of a
substantially concurrent sale of the Company's Qualified Stock, provided,
however, that after giving effect to such investment, loan or guarantee, the
Company and the Restricted Subsidiaries shall be in compliance with the terms of
this Agreement (other than the preceding provisions of this Section 6.04 as the
same would relate to the investment, loan or Guarantee in question).
SECTION 6.05 Restricted Payments. The Company will not, and will not
permit any of the Restricted Subsidiaries to, declare or make, or agree to pay
or make, directly or indirectly, any Restricted Payment.
SECTION 6.06 Transactions with Affiliates. The Company will not, and
will not permit any of the Restricted Subsidiaries to, sell, lease or otherwise
transfer any property or assets to, or purchase, lease or otherwise acquire any
property or assets from, or otherwise engage in any other transactions with, any
of its Affiliates, except (a) in the ordinary course of
-67-
business at prices and on terms and conditions not less favorable to the Company
or such Subsidiary than could be obtained on an arm's-length basis from
unrelated third parties, (b) transactions between or among the Company and
Guarantors not involving any other Affiliate, (c) any Restricted Payment
permitted by Section 6.05 and (d) loans and advances by the Company to the
General Partner to enable the General Partner to pay general and administrative
costs and expenses pursuant to the partnership agreement of the Company and in
accordance with past practices.
SECTION 6.07 Restrictive Agreements. The Company will not, and will
not permit any of the Restricted Subsidiaries to, directly or indirectly, enter
into, incur or permit to exist any agreement or other arrangement that
prohibits, restricts or imposes any condition upon the ability of (a) any such
Subsidiary to pay dividends or other distributions with respect to any shares of
its Capital Stock or to make or repay loans or advances to the Company or any
other such Subsidiary or to Guarantee Indebtedness of the Company or any other
such Subsidiary or (b) the Company or any such Subsidiary to grant Liens to
secure the Obligations (except for any agreement or arrangement with respect to
the assets subject to the Liens permitted by Section 6.02(d) and Section 6.02(e)
and except for Indebtedness issued by the Company pursuant to an indenture for
senior debt securities or pursuant to an indenture for subordinated debt
securities, each substantially in the form filed as an exhibit to the Company's
Registration Statement on Form S-3, (Registration No. 333-66931) originally
filed with the Securities and Exchange Commission on November 6, 1998, as from
time to time amended, so long as it shall permit the Liens to secure the
Obligations, or any of them, contemplated by this Agreement as in effect on the
Effective Date); provided that the foregoing shall not apply to (i) restrictions
and conditions imposed by law or by this Agreement, (ii) customary restrictions
and conditions contained in agreements relating to the sale of a Subsidiary
pending such sale, provided such restrictions and conditions apply only to the
Subsidiary that is to be sold and such sale is permitted hereunder, or (iii)
restrictions and conditions existing on the date hereof identified on Schedule
6.07 (but shall apply to any extension or renewal of, or any amendment or
modification expanding the scope of, any such restriction or condition) and (iv)
restrictions and conditions contained in the agreement pursuant to which the
SFPP First Mortgage Notes were issued and in the SFPP Revolving Credit Facility.
SECTION 6.08 Sale of Assets. The Company will not, and will not
permit any of the Restricted Subsidiaries to, sell, lease or otherwise dispose
of any of its properties or assets (other than sales of product in the ordinary
course of business) if, at the time of the proposed sale, lease or other
disposition, and giving effect thereto, the aggregate fair market value (as
determined in good faith by the Board of the Company's general partner) of all
properties and assets of the Company and its Restricted Subsidiaries so sold,
leased or otherwise disposed of during the then current fiscal year would exceed
$10,000,000.
SECTION 6.09 Financial Covenants. The Company will observe each
of the following requirements:
(a) Ratio of Indebtedness to Cash Flow. The Company will not at any
time permit the Indebtedness to Cash Flow Ratio to exceed 3.75 to 1.0.
-68-
(b) Ratio of Cash Flow to Interest Expense. The Company will not at
any time permit the ratio of Company Cash Flow for the four full fiscal quarters
then most recently ended to Company Interest Expense for such four full fiscal
quarters to be less than 3.50 to 1.0.
(c) Ratio of Cash Flow to Fixed Charges. The Company will not, at the
end of any fiscal quarter, permit the ratio of Company Cash Flow for the four
full fiscal quarters then ended to Fixed Charges at the end of such fiscal
quarter to be less than 1.25 to 1.0.
SECTION 6.10 Amendments to Certain Agreements. The Company will not
and will not permit any Restricted Subsidiary (including SFPP) to amend its
partnership agreement or operating agreement or in the case of SFPP, the SFPP
Revolving Credit Facility, the SFPP First Mortgage Notes or the Note Agreement
pursuant to which such First Mortgage Notes were issued, in each case, in any
manner that could be adverse to the Lenders.
ARTICLE VII.
Events of Default
-----------------
SECTION 7.01 Events of Default and Remedies. If any of the following
events ("Events of Default") shall occur and be continuing:
(a) any installment of principal of any Loan or any reimbursement
obligation in respect of any LC Disbursement shall not be paid when and as the
same shall become due and payable, whether at the due date thereof or at a date
fixed for prepayment thereof or otherwise;
(b) any interest on any Loan or any fee or any other amount (other
than an amount referred to in clause (a) of this Article) payable under this
Agreement or any other Loan Document shall not be paid, when and as the same
shall become due and payable, and such failure shall continue unremedied for a
period of three days;
(c) any representation or warranty made or, for purposes of Article
III, deemed made by or on behalf of any Loan Party herein, at the direction of
any Loan Party or by any Loan Party in any other Loan Document or in any
document, certificate or financial statement delivered in connection with this
Agreement or any other Loan Document shall prove to have been incorrect in any
material respect when made or deemed made or reaffirmed, as the case may be;
(d) any Loan Party shall fail to observe or perform any covenant,
condition or agreement contained in Section 5.01(d)(iii), 5.03 (with respect to
such Loan Party's existence) or 5.08 or in Article VI;
(e) any Loan Party shall fail to perform or observe any other term,
covenant or agreement contained in this Agreement (other than those specified in
Section 7.01(a), Section 7.01(b) or Section 7.01(d)) or any other Loan Document
to which it is a party and, in any event, such failure shall remain unremedied
for 30 calendar days after the earlier of (i) written notice of such failure
shall have been given to the Company by the Administrative Agent or any Lender
or, (ii) an officer of any Loan Party becomes aware of such failure;
-69-
(f) other than as specified in Section 7.01(a) or (b), (i) the
Company or any Restricted Subsidiary fails to make (whether as primary obligor
or as guarantor or other surety) any payment of principal of, or interest or
premium, if any, on any item or items of Indebtedness (other than as specified
in Section 7.01(a), Section 7.01(b) or Article IX or Article X) beyond any
period of grace provided with respect thereto (not to exceed 30 days); provided
that the aggregate outstanding principal amount of all Indebtedness as to which
such a payment default shall occur and be continuing is equal to or exceeds
$2,000,000, or (ii) the Company or any Restricted Subsidiary fails to duly
observe, perform or comply with any agreement with any Person or any term or
condition of any instrument, if such failure, either individually or in the
aggregate, shall have caused or shall have the ability to cause the acceleration
of the payment of Indebtedness with an aggregate face amount which is equal to
or exceeds $2,000,000; provided that this Section 7.01(f) shall not apply to
secured Indebtedness that becomes due as a result of the voluntary sale or
transfer of the property or assets securing such Indebtedness;
(g) an involuntary case shall be commenced or an involuntary petition
shall be filed seeking (i) liquidation, reorganization or other relief in
respect of the Company or any Restricted Subsidiary or its debts, or of a
substantial part of its assets, under any Federal, state or foreign bankruptcy,
insolvency, receivership or similar law now or hereafter in effect or (ii) the
appointment of a receiver, trustee, custodian, sequestrator, conservator or
similar official for the Company or any Restricted Subsidiary or for a
substantial part of its assets, and, in any such case, such proceeding or
petition shall continue undismissed for 60 days or an order or decree approving
or ordering any of the foregoing shall be entered;
(h) the Company, or any Restricted Subsidiary shall (i) voluntarily
commence any proceeding or file any petition seeking liquidation, winding-up,
reorganization or other relief under any Federal, state or foreign bankruptcy,
insolvency, receivership or similar law now or hereafter in effect, (ii) consent
to the institution of, or fail to contest in a timely and appropriate manner,
any proceeding or petition described in Section 7.01(g), (iii) apply for or
consent to the appointment of a receiver, trustee, custodian, sequestrator,
conservator or similar official for the Company or any Restricted Subsidiary or
for a substantial part of its assets, (iv) file an answer admitting the material
allegations of a petition filed against it in any such proceeding, (v) make a
general assignment for the benefit of creditors or (vi) take any action for the
purpose of effecting any of the foregoing;
(i) the Company or any Restricted Subsidiary shall become unable,
admit in writing or fail generally to pay its debts as they become due;
(j) the General Partner fails to make (whether as primary obligator
or as guarantor or other surety) any payment of principal of, or interest or
premium, if any, on any item or items of Indebtedness beyond any period of grace
provided with respect thereto (not to exceed 30 days); provided that the
aggregate outstanding principal amount of all such Indebtedness as to which such
a payment default shall occur and be continuing is equal to or exceeds
$5,000,000;
(k) one or more judgments for the payment of money in an aggregate
amount in excess of $5,000,000 shall be rendered against the Company, any
Restricted Subsidiary or any combination thereof and the same shall remain
undischarged for a period of 30 consecutive days
-70-
during which execution shall not be effectively stayed, or any action shall be
legally taken by a judgment creditor to attach or levy upon any assets of the
Company or any Restricted Subsidiary to enforce any such judgment;
(l) an ERISA Event shall have occurred that, in the opinion of the
Required Lenders, when taken together with all other ERISA Events that have
occurred, could reasonably be expected to result in liability of the Company and
the Restricted Subsidiaries in an aggregate amount exceeding (i) $5,000,000 in
any year or (ii) $10,000,000 for all periods;
(m) either Borrower or any other Person shall petition or apply for
or obtain any order restricting payment by the Issuing Bank under any Letter of
Credit or extending the Issuing Bank's liability under such Letter of Credit
beyond the expiration date stated therein or otherwise agreed to by the Issuing
Bank;
then, and in any such event, and at any time thereafter, if any Event of Default
shall then be continuing, the Administrative Agent, may, and upon the written
request of the Required Lenders shall, by written notice (including notice sent
by telecopy) to the Company (a "Notice of Default") take any or all of the
following actions, without prejudice to the rights of the Administrative Agent,
any Lender or other holder of any of the Obligations to enforce its claims
against any Loan Party (provided that, if an Event of Default specified in
Section 7.01(g) or Section 7.01(h) shall occur with respect to the Company or
any Restricted Subsidiary, the result of which would occur upon the giving of a
Notice of Default as specified in clauses (i), (ii) and (v) below, shall occur
automatically without the giving of any Notice of Default): (i) declare the
Total Commitment terminated, whereupon the Commitments of the Lenders shall
forthwith terminate immediately and any accrued commitment fees shall forthwith
become due and payable without any other notice of any kind; (ii) declare the
principal of and any accrued interest in respect of all Loans, and all the other
Obligations owing hereunder and under the other Loan Documents, to be, whereupon
the same shall become, forthwith due and payable without presentment, demand,
notice of demand or of dishonor and nonpayment, protest, notice of protest,
notice of intent to accelerate, declaration or notice of acceleration or any
other notice of any kind, all of which are hereby waived by each Loan Party;
(iii) exercise any rights or remedies under the Loan Documents; (iv) terminate
any Letter of Credit which may be terminated in accordance with its terms
(whether by the giving of written notice to the beneficiary or otherwise); and
(v) direct the Company to comply, and the Company agrees that upon receipt of
such notice (or upon the occurrence of an Event of Default specified in Section
7.01(g) or Section 7.01(h)) it will comply, with the provisions of Section
2.06(k).
SECTION 7.02 Other Remedies. Upon the occurrence and during the
continuance of any Event of Default, the Administrative Agent, acting at the
request of the Required Lenders, may proceed to protect and enforce its rights,
either by suit in equity or by action at law or both, whether for the specific
performance of any covenant or agreement contained in this Agreement or in any
other Loan Document or in aid of the exercise of any power granted in this
Agreement or in any other Loan Document; or may proceed to enforce the payment
of all amounts owing to the Administrative Agent and the Lenders under the Loan
Documents and interest thereon in the manner set forth herein or therein; it
being intended that no remedy conferred herein or in any of the other Loan
Documents is to be exclusive of any
-71-
other remedy, and each and every remedy contained herein or in any other Loan
Document shall be cumulative and shall be in addition to every other remedy
given hereunder and under the other Loan Documents now or hereafter existing at
law or in equity or by statute or otherwise.
SECTION 7.03 Application of Moneys During Continuation of Event of
Default . (a) So long as an Event of Default of which the Administrative Agent
shall have given notice to the Lenders shall continue, all moneys received by
the Administrative Agent from any Loan Party under the Loan Documents shall,
except as otherwise required by law, be distributed by the Administrative Agent
on the dates selected by the Administrative Agent (individually, a "Distribution
Date" and collectively, the "Distribution Dates") as follows:
first, to payment of the unreimbursed expenses for which the
Administrative Agent or any Lender is to be reimbursed pursuant to Section
11.03 and unpaid fees owing to the Administrative Agent pursuant to the
Fee Letter;
second, to the ratable payment of accrued but unpaid interest on the
Obligations;
third, to the ratable payment of unpaid principal of the Obligations;
fourth, to the ratable payment of all other amounts payable by the Loan
Parties hereunder;
fifth, to the ratable payment of all other Obligations, until all
Obligations shall have been paid in full; and
finally, to payment to the Loan Parties, or their respective successors or
assigns, or as a court of competent jurisdiction may direct, of any
surplus then remaining from such proceeds.
(b) The term "unpaid" as used in this Section 7.03 shall mean all
Obligations outstanding as of a Distribution Date (including any amounts unpaid
under clause (v) of the last sentence of Section 7.01) as to which prior
distributions have not been made, after giving effect to any adjustments which
are made pursuant to Section 11.09 of which the Administrative Agent shall have
been notified.
ARTICLE VIII.
The Administrative Agent
------------------------
SECTION 8.01 Appointment, Powers and Immunities. Each Lender hereby
irrevocably appoints and authorizes the Administrative Agent to act as its agent
hereunder and under the other Loan Documents with such powers as are
specifically delegated to the Administrative Agent by the terms of this
Agreement and such other Loan Documents, together with such other powers as are
reasonably incidental thereto. The Administrative Agent (which term as used in
this sentence and in Section 8.05 and the first sentence of Section 8.06 shall
include reference to its Affiliates and its Affiliates' officers, directors,
employees,
-72-
attorneys, accountants, experts and agents): (a) shall have no duties or
responsibilities except those expressly set forth in the Loan Documents, and
shall not by reason of the Loan Documents be a trustee or fiduciary for any
Lender; (b) makes no representation or warranty to any Lender and shall not be
responsible to the Lenders for any recitals, statements, representations or
warranties contained in this Agreement, or in any certificate or other document
referred to or provided for in, or received by any of them under, this
Agreement, or for the value, validity, effectiveness, genuineness, execution,
legality, enforceability or sufficiency of this Agreement, other Loan Document
or any other document referred to or provided for herein or therein or for any
failure by any Loan Party or any other Person (other than the Administrative
Agent) to perform any of its obligations hereunder or thereunder or for the
existence or value of, or the perfection or priority of any Lien upon, any
collateral security or the financial or other condition of the Company, the
Subsidiaries or any other obligor or guarantor; (c) except pursuant to Section
8.07 shall not be required to initiate or conduct any litigation or collection
proceedings hereunder; and (d) shall not be responsible for any action taken or
omitted to be taken by it hereunder or under any other document or instrument
referred to or provided for herein or in connection herewith including its own
ordinary negligence, except for its own gross negligence, willful misconduct or
unlawful conduct. The Administrative Agent may employ agents, accountants,
attorneys and experts and shall not be responsible for the negligence or
misconduct of any such agents, accountants, attorneys or experts selected by it
in good faith or any action taken or omitted to be taken in good faith by it in
accordance with the advice of such agents, accountants, attorneys or experts.
The Administrative Agent may deem and treat the payee named in any Note as the
holder thereof for all purposes hereof unless and until a written notice of the
assignment or transfer thereof permitted hereunder shall have been filed with
the Administrative Agent. The Administrative Agent is authorized to release any
cash collateral that is permitted to be released pursuant to the terms of this
Agreement.
SECTION 8.02 Reliance by Administrative Agent. The Administrative
Agent shall be entitled to rely upon any certification, notice or other
communication (including any thereof by telephone, telex, telecopier, telegram
or cable) believed by it to be genuine and correct and to have been signed or
sent by or on behalf of the proper Person or Persons, and upon advice and
statements of legal counsel, independent accountants and other experts selected
by the Administrative Agent in good faith.
SECTION 8.03 Defaults; Events of Default. The Administrative Agent
shall not be deemed to have knowledge of the occurrence of a Default or an Event
of Default (other than the non-payment of principal of or interest on Loans or
of fees or failure to reimburse LC Disbursements) unless the Administrative
Agent has received notice from a Lender or a Borrower specifying such Default or
Event of Default and stating that such notice is a "Notice of Default."In the
event that the Administrative Agent receives such a notice of the occurrence of
a Default or Event of Default, the Administrative Agent shall give prompt notice
thereof to the Lenders. In the event of a payment Default or Event of Default,
the Administrative Agent shall give each Lender prompt notice of each such
payment Default or Event of Default.
SECTION 8.04 Rights as a Lender. With respect to its Commitments and
the Loans made by it and its issuance, or its participation in the issuance, of
each Letter of Credit, First Union National Bank (and any successor acting as
Administrative Agent) in its
-73-
capacity as a Lender hereunder shall have the same rights and powers hereunder
as any other Lender and may exercise the same as though it were not acting as
the Administrative Agent, and the term "Lender" or "Lenders" shall, unless the
context otherwise indicates, include the Administrative Agent in its individual
capacity. First Union National Bank (and any successor acting as Administrative
Agent) and its Affiliates may (without having to account therefor to any Lender)
accept deposits from, lend money to and generally engage in any kind of banking,
trust or other business with any Loan Party (and any of its Affiliates) as if it
were not acting as the Administrative Agent. First Union National Bank and its
Affiliates may accept fees and other consideration from the Company or any other
Loan Party for services in connection with this Agreement or otherwise without
having to account for the same to the Lenders.
SECTION 8.05 INDEMNIFICATION. THE LENDERS AGREE TO INDEMNIFY THE
ADMINISTRATIVE AGENT AND THE SYNDICATION AGENT RATABLY IN ACCORDANCE WITH THEIR
APPLICABLE PERCENTAGES FOR THE INDEMNITY MATTERS AS DESCRIBED IN SECTION 11.03
TO THE EXTENT NOT INDEMNIFIED OR REIMBURSED BY THE COMPANY UNDER SECTION 11.03,
BUT WITHOUT LIMITING THE OBLIGATIONS OF THE COMPANY UNDER SAID SECTION 11.03 AND
FOR ANY AND ALL OTHER LIABILITIES, OBLIGATIONS, LOSSES, DAMAGES, PENALTIES,
ACTIONS, JUDGMENTS, SUITS, COSTS, EXPENSES OR DISBURSEMENTS OF ANY KIND AND
NATURE WHATSOEVER WHICH MAY BE IMPOSED ON, INCURRED BY OR ASSERTED AGAINST THE
ADMINISTRATIVE AGENT OR THE SYNDICATION AGENT IN ANY WAY RELATING TO OR ARISING
OUT OF: (A) THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT CONTEMPLATED BY OR
REFERRED TO HEREIN OR THE TRANSACTIONS CONTEMPLATED HEREBY, BUT EXCLUDING,
UNLESS A DEFAULT OR AN EVENT OF DEFAULT HAS OCCURRED AND IS CONTINUING, NORMAL
ADMINISTRATIVE COSTS AND EXPENSES INCIDENT TO THE PERFORMANCE OF ITS AGENCY
DUTIES, IF ANY, HEREUNDER OR (B) THE ENFORCEMENT OF ANY OF THE TERMS OF THIS
AGREEMENT OR OF ANY OTHER LOAN DOCUMENT; WHETHER OR NOT ANY OF THE FOREGOING
SPECIFIED IN THIS SECTION 8.05 ARISES FROM THE SOLE OR CONCURRENT NEGLIGENCE OF
THE ADMINISTRATIVE AGENT OR THE SYNDICATION AGENT, AS THE CASE MAY BE; PROVIDED
THAT NO LENDER SHALL BE LIABLE FOR ANY OF THE FOREGOING TO THE EXTENT THEY ARISE
FROM THE GROSS NEGLIGENCE, WILLFUL MISCONDUCT OR UNLAWFUL CONDUCT OF THE
ADMINISTRATIVE AGENT.
SECTION 8.06 Non-Reliance on Agents and other Lenders. Each Lender
acknowledges and agrees that it has, independently and without reliance on the
Administrative Agent, the Syndication Agent or any other Lender, and based on
such documents and information as it has deemed appropriate, made its own credit
analysis of the Company and the Subsidiaries and its decision to enter into this
Agreement, and that it will, independently and without reliance upon the
Administrative Agent, the Syndication Agent or any other Lender, and based on
such documents and information as it shall deem appropriate at the time,
continue to make its own analysis and decisions in taking or not taking action
under this Agreement. Neither the Administrative Agent nor the Syndication Agent
shall be required to keep itself informed as
-74-
to the performance or observance by any Loan Party of this Agreement, the other
Loan Documents or any other document referred to or provided for herein or to
inspect the properties or books of any Loan Party. Except for notices, reports
and other documents and information expressly required to be furnished to the
Lenders by the Administrative Agent hereunder, neither the Administrative Agent
nor the Syndication Agent shall have any duty or responsibility to provide any
Lender with any credit or other information concerning the affairs, financial
condition or business of any Loan Party (or any of its Affiliates) which may
come into the possession of the Administrative Agent, the Syndication Agent or
any of its respective Affiliates. In this regard, each Lender acknowledges that
Andrews & Kurth L.L.P. is acting in this transaction as special counsel to the
Administrative Agent and the Syndication Agent only. Each Lender will consult
with its own legal counsel to the extent that it deems necessary in connection
with this Agreement and other Loan Documents and the matters contemplated herein
and therein.
SECTION 8.07 Action by Administrative Agent. Except for action or
other matters expressly required of the Administrative Agent hereunder, the
Administrative Agent shall in all cases be fully justified in failing or
refusing to act hereunder unless it shall (a) receive written instructions from
the Required Lenders (or all of the Lenders as expressly required by Section
11.02) specifying the action to be taken, and (b) be indemnified to its
satisfaction by the Lenders against any and all liability and expenses which may
be incurred by it by reason of taking or continuing to take any such action. The
instructions of the Required Lenders (or all of the Lenders as expressly
required by Section 11.02) and any action taken or failure to act pursuant
thereto by the Administrative Agent shall be binding on all of the Lenders. If a
Default or Event of Default has occurred and is continuing, the Administrative
Agent shall take such action with respect to such Default or Event of Default as
shall be directed by the Required Lenders (or all of the Lenders as required by
Section 11.02) in the written instructions (with indemnities) described in this
Section 8.07; provided that, unless and until the Administrative Agent shall
have received such directions, the Administrative Agent may (but shall not be
obligated to) take such action, or refrain from taking such action, with respect
to such Default or Event of Default as it shall deem advisable in the best
interests of the Lenders. In no event, however, shall the Administrative Agent
be required to take any action which exposes the Administrative Agent to
personal liability or which is contrary to this Agreement or applicable law.
SECTION 8.08 Resignation or Removal of Administrative Agent. Subject
to the appointment and acceptance of a successor Administrative Agent as
provided below, the Administrative Agent may resign at any time by giving notice
thereof to the Lenders and the Company, and the Administrative Agent may be
removed at any time with or without cause by the Required Lenders. Upon any such
resignation or removal, the Required Lenders shall have the right to appoint a
successor Administrative Agent. If no successor Administrative Agent shall have
been so appointed by the Required Lenders and shall have accepted such
appointment within thirty (30) days after the retiring Administrative Agent's
giving of notice of resignation or the Required Lenders' removal of the retiring
Administrative Agent, then the retiring Administrative Agent may, on behalf of
the Lenders, appoint a successor Administrative Agent. Upon the acceptance of
such appointment hereunder by a successor Administrative Agent, such successor
Administrative Agent shall thereupon succeed to and become vested with all the
rights, powers, privileges and duties of the retiring Administrative Agent, and
the retiring
-75-
Administrative Agent shall be discharged from its duties and obligations
hereunder. After any retiring Administrative Agent's resignation or removal
hereunder as Administrative Agent, the provisions of this Article VIII and
Section 11.03 shall continue in effect for its benefit in respect of any actions
taken or omitted to be taken by it while it was acting as the Administrative
Agent.
SECTION 8.09 Duties of Syndication Agent. Notwithstanding the
indemnity of the Syndication Agent contained in Section 8.05 and in Section
11.03, the Syndication Agent shall not have any duty, responsibility or
liability in such capacity with respect to the administration or enforcement of
this Agreement or any other Loan Document.
ARTICLE IX.
Company Guaranty
----------------
SECTION 9.01 Company Guaranty. (a) In consideration of, and in order
to induce the Administrative Agent and the Lenders to enter into this Agreement
and to induce the Lenders to make the Loans and the Issuing Bank to maintain the
Existing Letter of Credit and to issue new Letters of Credit hereunder, the
Company hereby absolutely, unconditionally and irrevocably guarantees the
punctual payment and performance when due, whether at stated maturity, by
acceleration or otherwise, of the Obligations of the Subsidiary Borrower (as
such), and all covenants of the Subsidiary Borrower (as such), now or hereafter
existing under this Agreement and the other Loan Documents to which the
Subsidiary Borrower is a party, whether for principal, interest (including
interest accruing or becoming owing both prior to and subsequent to the
commencement of any proceeding against or with respect to the Subsidiary
Borrower under any chapter of Title 11 of the United States Code, as now or
hereafter in effect, or any successor thereto (the "Bankruptcy Code")), fees,
commissions, expenses (including reasonable attorneys' fees and expenses) or
otherwise (all such obligations being the "Subsidiary Borrower Guaranteed
Obligations"), it being understood, for the avoidance of doubt, that such term
shall not include any Obligations of the Person that is the Subsidiary Borrower
in any other capacity, e.g., as a Subsidiary Guarantor. The Company agrees to
pay any and all expenses incurred by each Lender and the Administrative Agent in
enforcing this Company Guaranty against the Company.
(b) This Company Guaranty is an absolute, unconditional, present and
continuing guaranty of payment and not of collectibility and is in no way
conditioned upon any attempt to collect from the Subsidiary Borrower or any
other Loan Party or any other action, occurrence or circumstance whatsoever.
SECTION 9.02 Continuing Guaranty. (a) The Company guarantees that the
Subsidiary Borrower Guaranteed Obligations will be paid strictly in accordance
with the terms of this Agreement and the other Loan Documents. The Company
agrees that, to the maximum extent permitted by applicable law, the Subsidiary
Borrower Guaranteed Obligations and Loan Documents to which the Subsidiary
Borrower is a party may be extended or renewed, and indebtedness thereunder
repaid and reborrowed in whole or in part, without notice to or assent by the
Company, and that it will remain bound upon this Company Guaranty
notwithstanding any extension, renewal or other alteration of any Subsidiary
Borrower
-76-
Guaranteed Obligations or such Loan Documents, or any repayment and reborrowing
of Loans. To the maximum extent permitted by applicable law, except as otherwise
expressly provided in this Agreement or any other Loan Document to which the
Company is a party, the obligations of the Company under this Company Guaranty
shall be absolute, unconditional and irrevocable, and shall be performed
strictly in accordance with the terms hereof under any circumstances whatsoever,
including:
(i) any modification, amendment, supplement, renewal, extension for
any period, increase, decrease, alteration or rearrangement of all or any
part of the Subsidiary Borrower Guaranteed Obligations, or of this
Agreement or any other Loan Document executed in connection herewith, or
any contract or understanding among the Company, the Subsidiary Borrower,
any Subsidiary Guarantor, the Administrative Agent and/or the Lenders, or
any other Person, pertaining to the Subsidiary Borrower Guaranteed
Obligations;
(ii) any adjustment, indulgence, forbearance or compromise that might
be granted or given by the Lenders to the Company or any Subsidiary
Guarantor or any other Person liable on the Subsidiary Borrower Guaranteed
Obligations;
(iii) the insolvency, bankruptcy, arrangement, adjustment,
composition, liquidation, disability, dissolution or lack of power of the
Company, the Subsidiary Borrower, any Subsidiary Guarantor or any other
Person at any time liable for the payment of all or part of the Subsidiary
Borrower Guaranteed Obligations; or any dissolution of the Company, the
Subsidiary Borrower, or any Subsidiary Guarantor, or any sale, lease or
transfer of any or all of the assets of the Company, the Subsidiary
Borrower, or any Subsidiary Guarantor, or any changes in the shareholders
of the Company, the Subsidiary Borrower, or any Subsidiary Guarantor; or
any reorganization of the Company, the Subsidiary Borrower, or any
Subsidiary Guarantor;
(iv) the invalidity, illegality or unenforceability of all or any part
of the Subsidiary Borrower Guaranteed Obligations, or any document or
agreement executed in connection with the Subsidiary Borrower Guaranteed
Obligations, for any reason whatsoever, including the fact that (A) the
Subsidiary Borrower Guaranteed Obligations, or any part thereof, exceeds
the amount permitted by law, (B) the act of creating the Subsidiary
Borrower Guaranteed Obligations or any part thereof is ultra vires, (C) the
officers or representatives executing the documents or otherwise creating
the Subsidiary Borrower Guaranteed Obligations acted in excess of their
authority, (D) the Subsidiary Borrower Guaranteed Obligations or any part
thereof violate applicable usury laws, (E) the Company, the Subsidiary
Borrower or any Subsidiary Guarantor has valid defenses, claims and offsets
(whether at law or in equity, by agreement or by statute) which render the
Subsidiary Borrower Guaranteed Obligations wholly or partially
uncollectible from the Company, the Subsidiary Borrower or such Subsidiary
Guarantor, (F) the creation, performance or repayment of the Subsidiary
Borrower Guaranteed Obligations (or execution, delivery and performance of
any document or instrument representing part of the Subsidiary Borrower
Guaranteed Obligations or executed in connection with the Subsidiary
Borrower Guaranteed Obligations, or given to secure the repayment of the
-77-
Subsidiary Borrower Guaranteed Obligations) is illegal, uncollectible,
legally impossible or unenforceable, or (G) this Agreement, any other Loan
Document, or any other document or instrument pertaining to the Subsidiary
Borrower Guaranteed Obligations has been forged or otherwise is irregular
or not genuine or authentic;
(v) any full or partial release of the liability of the Company, the
Subsidiary Borrower or any Subsidiary Guarantor on the Subsidiary Borrower
Guaranteed Obligations or any part thereof, or any other Person now or
hereafter liable, whether directly or indirectly, jointly, severally, or
jointly and severally, to pay, perform, guarantee or assure the payment of
the Subsidiary Borrower Guaranteed Obligations or any part thereof; it
being recognized, acknowledged and agreed by the Company that the Company
may be required to pay the Subsidiary Borrower Guaranteed Obligations in
full without assistance or support of any other Person, and the Company has
not been induced to enter into this Guaranty on the basis of a
contemplation, belief, understanding or agreement that any other Person
will be liable to perform the Subsidiary Borrower Guaranteed Obligations,
or that the Administrative Agent or any Lender will look to any other
Person to perform the Subsidiary Borrower Guaranteed Obligations;
(vi) the taking or accepting of any other security, collateral or
guaranty, or other assurance of payment, for all or any part of the
Subsidiary Borrower Guaranteed Obligations;
(vii) any release, surrender, exchange, subordination, deterioration,
waste, loss or impairment of any collateral, property or security, at any
time existing in connection with, or assuring or securing payment of, all
or any part of the Subsidiary Borrower Guaranteed Obligations;
(viii)the failure of the Administrative Agent, the Lenders or any
other Person to exercise diligence or reasonable care in the preservation,
protection, enforcement, sale or other handling or treatment of all or any
part of such collateral, property or security;
(ix) the fact that any collateral, security or Lien contemplated or
intended to be given, created or granted as security for the repayment of
the Subsidiary Borrower Guaranteed Obligations shall not be properly
perfected or created, or shall prove to be unenforceable or subordinate to
any other Lien; it being recognized and agreed by the Company that the
Company is not entering into this Company Guaranty in reliance on, or in
contemplation of the benefits of, the validity, enforceability,
collectibility or value of any of the collateral for the Subsidiary
Borrower Guaranteed Obligations;
(x) any payment by the Subsidiary Borrower or the Company to the
Administrative Agent or any Lender is held to constitute a preference under
bankruptcy laws, or for any other reason either the Administrative Agent or
any Lender is required to refund such payment or pay such amount to the
Subsidiary Borrower or any other Person; or
(xi) any other action taken or omitted to be taken with respect to
this Agreement, any other Loan Document, the Subsidiary Borrower Guaranteed
Obligations,
-78-
or any security and collateral therefor, whether or not such action or
omission prejudices the Company or increases the likelihood that the
Company will be required to pay the Subsidiary Borrower Guaranteed
Obligations pursuant to the terms hereof;
it being the unambiguous and unequivocal intention of the Company that the
Company shall be obligated to pay the Subsidiary Borrower Guaranteed Obligations
when due, notwithstanding any occurrence, circumstance, event, action, or
omission whatsoever, whether contemplated or uncontemplated, and whether or not
otherwise or particularly described herein, except for the full and final
payment and satisfaction of the Subsidiary Borrower Guaranteed Obligations after
the termination of the Commitments of all Lenders and the expiration or
termination of the Existing Letter of Credit.
(b) The Company further agrees that, to the fullest extent permitted
by law, as between the Company, on the one hand, and the Lenders and the
Administrative Agent, on the other hand, (i) the maturity of the Subsidiary
Borrower Guaranteed Obligations may be accelerated as provided in Article VII
for the purposes of this Company Guaranty, notwithstanding any stay, injunction
or other prohibition preventing such acceleration of the Subsidiary Borrower
Guaranteed Obligations, and (ii) in the event of any acceleration of the
Subsidiary Borrower Guaranteed Obligations as provided in Article VII, the
Subsidiary Borrower Guaranteed Obligations (whether or not due and payable)
shall forthwith become due and payable by the Company for the purpose of this
Company Guaranty.
SECTION 9.03 Effect of Debtor Relief Laws. If after receipt of any
payment of all or any part of the Subsidiary Borrower Guaranteed Obligations,
the Administrative Agent, the Issuing Bank or any Lender is for any reason
compelled to surrender or voluntarily surrenders, such payment to any Person (a)
because such payment is or may be avoided, invalidated, declared fraudulent, set
aside, determined to be void or voidable as a preference, fraudulent conveyance,
fraudulent transfer, impermissible set-off or a diversion of trust funds or (b)
for any other reason, including (i) any judgment, decree or order of any court
or administrative body having jurisdiction over the Administrative Agent, the
Issuing Bank, any Lender or any of their respective properties or (ii) any
settlement or compromise of any such claim effected by the Administrative Agent,
the Issuing Bank or any Lender with any such claimant (including the Subsidiary
Borrower), then the Subsidiary Borrower Guaranteed Obligations or part thereof
intended to be satisfied shall be reinstated and continue, and this Company
Guaranty shall continue in full force as if such payment have not been received,
notwithstanding any revocation thereof or the cancellation of any instrument
evidencing any of the Subsidiary Borrower Guaranteed Obligations or otherwise;
and the Company shall be liable to pay the Administrative Agent, the Issuing
Bank and the Lenders, and hereby do indemnify the Administrative Agent, the
Issuing Bank and the Lenders and hold them harmless for the amount of such
payment so surrendered and all reasonable expenses (including reasonable
attorneys' fees, court costs and expenses attributable thereto) incurred by the
Administrative Agent, the Issuing Bank or any Lender in the defense of any claim
made against it that any payment received by the Administrative Agent, the
Issuing Bank or any Lender in respect of all or part of the Subsidiary Borrower
Guaranteed Obligations must be surrendered. The provisions of this paragraph
shall survive the termination of this Company Guaranty, and any satisfaction and
-79-
discharge of the Subsidiary Borrower by virtue of any payment, court order or
any Federal or state law.
SECTION 9.04 Waiver. The Company hereby waives promptness, diligence,
notice of acceptance and any other notice with respect to any of the Subsidiary
Borrower Guaranteed Obligations and this Company Guaranty and waives
presentment, demand for payment, notice of intent to accelerate, notice of
dishonor or nonpayment and any requirement that the Administrative Agent or any
Lender institute suit, collection proceedings or take any other action to
collect the Subsidiary Borrower Guaranteed Obligations, including any
requirement that the Administrative Agent or any Lender exhaust any right or
take any action against the Subsidiary Borrower or any other Person or any
collateral (it being the intention of the Administrative Agent, the Lenders and
the Company that this Company Guaranty is to be a guaranty of payment and not of
collection). It shall not be necessary for the Administrative Agent or any
Lender, in order to enforce any payment by the Company hereunder, to institute
suit or exhaust its rights and remedies against the Subsidiary Borrower, any
Subsidiary Guarantor or any other Person, including others liable to pay any
Subsidiary Borrower Guaranteed Obligations, or to enforce its rights against any
security ever given to secure payment thereof. The Company hereby expressly
waives to the maximum extent permitted by applicable law each and every right to
which it may be entitled by virtue of the suretyship laws of the State of New
York or any other state in which it may be located, including any and all rights
it may have pursuant to Rule 31, Texas Rules of Civil Procedure, Section 17.001
of the Texas Civil Practice and Remedies Code and Chapter 34 of the Texas
Business and Commerce Code.
SECTION 9.05 Full Force and Effect. This Company Guaranty is a
continuing guaranty and shall remain in full force and effect until all of the
Subsidiary Borrower Guaranteed Obligations under this Agreement and the other
Loan Documents to which the Subsidiary Borrower is a party and all other amounts
payable under this Company Guaranty have been paid in full (after the
termination of the Commitments of the Lenders and the termination or expiration
of the Existing Letter of Credit). All rights, remedies and powers provided in
this Company Guaranty may be exercised, and all waivers contained in this
Company Guaranty may be enforced, only to the extent that the exercise or
enforcement thereof does not violate any provisions of applicable law which may
not be waived.
ARTICLE X.
Subsidiary Guarantors Guaranty
------------------------------
SECTION 10.01 Subsidiary Guarantors Guaranty. (a) In consideration
of, and in order to induce the Administrative Agent and the Lenders to enter
into this Agreement and to induce the Lenders to make the Loans and the Issuing
Bank to maintain the Existing Letter of Credit and to issue new Letters of
Credit hereunder, each Subsidiary Guarantor hereby absolutely, unconditionally
and irrevocably, jointly and severally guarantees the punctual payment and
performance when due, whether at stated maturity, by acceleration or otherwise,
of the Obligations of the Borrowers (as such), and all other obligations and
covenants of the Borrowers (as such), now or hereafter existing under this
Agreement and the other Loan
-80-
Documents to which either Borrower is a party, whether for principal, interest
(including interest accruing or becoming owing both prior to and subsequent to
the commencement of any proceeding against or with respect to such Borrower
under the Bankruptcy Code, commitment fees, commissions, expenses (including
reasonable attorneys' fees and expenses) or otherwise, subject however to the
limitation set forth in Section 10.04 (all such obligations being the "Borrower
Guaranteed Obligations", it being understood, for the avoidance of doubt, that
such term shall not include any Obligations of either Borrower in any capacity
other than as a Borrower hereunder, e.g., as the maker of the Company Guaranty
or this Subsidiary Borrower Guaranty). Moreover, the term "Borrower Guaranteed
Obligations" shall not, as to the Person that is the Subsidiary Borrower,
include its own obligations, either as such or as a Subsidiary Guarantor. Each
Subsidiary Guarantor agrees to pay any and all expenses incurred by each Lender
and the Administrative Agent in enforcing this Subsidiary Guarantors Guaranty
against such Subsidiary Guarantor.
(b) Each Subsidiary Guarantor agrees that the amount of the Borrower
Guaranteed Obligations may at any time and from time to time exceed the amount
of the maximum liability of such Subsidiary Guarantor in respect thereof under
this Subsidiary Guarantors Guaranty (by reason of the limitations set forth in
Section 10.04) without impairing this Subsidiary Guarantors Guaranty or
affecting the rights and remedies of the Administrative Agent and the Lenders
hereunder.
(c) This Subsidiary Guarantors Guaranty is an absolute,
unconditional, present and continuing guaranty of payment and not of
collectibility and is in no way conditioned upon any attempt to collect from the
Company, any other Loan Party or any other action, occurrence or circumstance
whatsoever.
SECTION 10.02 Continuing Guaranty. (a) Each Subsidiary Guarantor
guarantees that the Borrower Guaranteed Obligations will be paid strictly in
accordance with the terms of this Agreement and the other Loan Documents. Each
Subsidiary Guarantor agrees that, to the maximum extent permitted by applicable
law, the Borrower Guaranteed Obligations and the Loan Documents may be extended
or renewed, and Loans repaid and reborrowed in whole or in part, without notice
to or assent by such Subsidiary Guarantor, and that it will remain bound upon
this Subsidiary Guarantors Guaranty notwithstanding any extension, renewal or
other alteration of any of the Borrower Guaranteed Obligations or the Loan
Documents, or any repayment and reborrowing of Loans. To the maximum extent
permitted by applicable law, except as otherwise expressly provided in this
Agreement or any other Loan Document to which such Subsidiary Guarantor is a
party, the obligations of each Subsidiary Guarantor under this Subsidiary
Guarantors Guaranty shall be absolute, unconditional and irrevocable, and shall
be performed strictly in accordance with the terms hereof under any
circumstances whatsoever, including:
(i) any modification, amendment, supplement, renewal, extension for
any period, increase, decrease, alteration or rearrangement of all or any
part of the Borrower Guaranteed Obligations or this Agreement or any other
Loan Document executed in connection herewith, or any contract or
understanding among either Borrower, any
-81-
Subsidiary Guarantor, the Administrative Agent and/or the Lenders, or any
other Person, pertaining to the Borrower Guaranteed Obligations;
(ii) any adjustment, indulgence, forbearance or compromise that might
be granted or given by the Lenders to either Borrower or any Subsidiary
Guarantor or any other Person liable on the Borrower Guaranteed
Obligations;
(iii)the insolvency, bankruptcy, arrangement, adjustment,
composition, liquidation, disability, dissolution or lack of power of
either Borrower, any Subsidiary Guarantor or any other Person at any time
liable for the payment of all or part of the Borrower Guaranteed
Obligations; or any dissolution of either Borrower or any Subsidiary
Guarantor, or any sale, lease or transfer of any or all of the assets of
either Borrower or any Subsidiary Guarantor, or any changes in the holders
of the equity in either Borrower or any Subsidiary Guarantor; or any
reorganization of either Borrower or any Subsidiary Guarantor;
(iv) the invalidity, illegality or unenforceability of all or any
part of the Borrower Guaranteed Obligations, or any document or agreement
executed in connection with the Borrower Guaranteed Obligations, for any
reason whatsoever, including the fact that (A) the Borrower Guaranteed
Obligations, or any part thereof, exceeds the amount permitted by law, (B)
the act of creating the Borrower Guaranteed Obligations or any part
thereof is ultra vires, (C) the officers or representatives executing the
documents or otherwise creating the Borrower Guaranteed Obligations acted
in excess of their authority, (D) the Borrower Guaranteed Obligations or
any part thereof violate applicable usury laws, (E) either Borrower or any
Subsidiary Guarantor has valid defenses, claims and offsets (whether at
law or in equity, by agreement or by statute) which render the Borrower
Guaranteed Obligations wholly or partially uncollectible from either
Borrower or such Subsidiary Guarantor, (F) the creation, performance or
repayment of the Borrower Guaranteed Obligations (or execution, delivery
and performance of any document or instrument representing part of the
Borrower Guaranteed Obligations or executed in connection with the
Borrower Guaranteed Obligations, or given to secure the repayment of the
Borrower Guaranteed Obligations) is illegal, uncollectible, legally
impossible or unenforceable, or (G) this Agreement, any other Loan
Document, or any other document or instrument pertaining to the Borrower
Guaranteed Obligations has been forged or otherwise is irregular or not
genuine or authentic;
(v) any full or partial release of the liability of either Borrower
or any Subsidiary Guarantor on the Borrower Guaranteed Obligations or any
part thereof, or any other Person now or hereafter liable, whether
directly or indirectly, jointly, severally, or jointly and severally, to
pay, perform, guarantee or assure the payment of the Borrower Guaranteed
Obligations or any part thereof; it being recognized, acknowledged and
agreed by each Subsidiary Guarantor that such Subsidiary Guarantor may be
required to pay the Borrower Guaranteed Obligations in full without
assistance or support of any other Person, and such Subsidiary Guarantor
has not been induced to enter into this Guaranty on the basis of a
contemplation, belief, understanding or agreement that any other Person
will be liable to perform the Borrower Guaranteed Obligations, or that the
-82-
Administrative Agent or any Lender will look to any other Person to
perform the Borrower Guaranteed Obligations;
(vi) the taking or accepting of any security, collateral or guaranty,
or other assurance of payment, for all or any part of the Borrower
Guaranteed Obligations;
(vii)any release, surrender, exchange, subordination, deterioration,
waste, loss or impairment of any collateral, property or security, at any
time hereafter existing in connection with, or assuring or securing
payment of, all or any part of the Borrower Guaranteed Obligations;
(viii) the failure of the Administrative Agent, the Lenders or any
other Person to exercise diligence or reasonable care in the preservation,
protection, enforcement or other handling or treatment of all or any part
of such collateral, property or security;
(ix) the fact that any collateral, security or Lien contemplated or
intended to be given, created or granted as security for the repayment of
any of the Borrower Guaranteed Obligations shall not be properly perfected
or created, or shall prove to be unenforceable or subordinate to any other
Lien; it being recognized and agreed by each Subsidiary Guarantor that
such Subsidiary Guarantor is not entering into this Subsidiary Guarantors
Guaranty in reliance on, or in contemplation of the benefits of, the
validity, enforceability, collectibility or value of any of the collateral
for the Borrower Guaranteed Obligations;
(x) any payment by the Company or any Subsidiary Guarantor to the
Administrative Agent or any Lender is held to constitute a preference
under bankruptcy laws, or for any reason either the Administrative Agent
or any Lender is required to refund such payment or pay such amount to the
Company or any other Person; or
(xi) any other action taken or omitted to be taken with respect to
this Agreement, any other Loan Document, the Borrower Guaranteed
Obligations, or any security and collateral therefor, whether or not such
action or omission prejudices any Subsidiary Guarantor or increases the
likelihood that any Subsidiary Guarantor will be required to pay the
Borrower Guaranteed Obligations pursuant to the terms hereof;
it being the unambiguous and unequivocal intention of each Subsidiary Guarantor
that such Subsidiary Guarantor shall be obligated to pay the Borrower Guaranteed
Obligations when due, notwithstanding any occurrence, circumstance, event,
action, or omission whatsoever, whether contemplated or uncontemplated, and
whether or not otherwise or particularly described herein, except for the full
and final payment and satisfaction of the Borrower Guaranteed Obligations after
the termination of the Commitments of all Lenders and the expiration or
termination of all Letters of Credit.
(b) Each Subsidiary Guarantor further agrees that, as between such
Subsidiary Guarantor, on the one hand, and the Lenders and the Administrative
Agent, on the other hand, (i) the maturity of the Borrower Guaranteed
Obligations may be accelerated as provided in Article VII for the purposes of
this Subsidiary Guarantors Guaranty, notwithstanding any stay,
-83-
injunction or other prohibition preventing such acceleration of the Borrower
Guaranteed Obligations, and (ii) in the event of any acceleration of the
Obligations as provided in Article VII, the Borrower Guaranteed Obligations
(whether or not due and payable) shall forthwith become due and payable by each
Subsidiary Guarantor for the purpose of this Subsidiary Guarantors Guaranty.
SECTION 10.03 Effect of Debtor Relief Laws. If after receipt of any
payment of all or any part of the Borrower Guaranteed Obligations, the
Administrative Agent, the Issuing Bank or any Lender is for any reason compelled
to surrender or voluntarily surrenders, such payment to any Person (a) because
such payment is or may be avoided, invalidated, declared fraudulent, set aside,
determined to be void or voidable as a preference, fraudulent conveyance,
fraudulent transfer, impermissible set-off or a diversion of trust funds or (b)
for any other reason, including (i) any judgment, decree or order of any court
or administrative body having jurisdiction over the Administrative Agent, the
Issuing Bank, any Lender or any of their respective properties or (ii) any
settlement or compromise of any such claim effected by the Administrative Agent,
the Issuing Bank or any Lender with any such claimant (including the Company),
then the Borrower Guaranteed Obligations or part thereof intended to be
satisfied shall be reinstated and continue, and this Subsidiary Guarantors
Guaranty shall continue in full force as if such payment had not been received,
notwithstanding any revocation thereof or the cancellation of any Note or any
other instrument evidencing any of the Borrower Guaranteed Obligations or
otherwise; and the Subsidiary Guarantors, jointly and severally, shall be liable
to pay the Administrative Agent, the Issuing Bank and the Lenders, and hereby do
indemnify the Administrative Agent, the Issuing Bank and the Lenders and hold
them harmless for the amount of such payment so surrendered and all reasonable
expenses (including reasonable attorneys' fees, court costs and expenses
attributable thereto) incurred by the Administrative Agent, the Issuing Bank or
any Lender in the defense of any claim made against it that any payment received
by the Administrative Agent, the Issuing Bank or any Lender in respect of all or
part of the Borrower Guaranteed Obligations must be surrendered. The provisions
of this paragraph shall survive the termination of this Subsidiary Guarantors
Guaranty, and any satisfaction and discharge of the Company by virtue of any
payment, court order or any Federal or state law.
SECTION 10.04 General Limitation on Borrower Guaranteed Obligations.
In any action or proceeding involving any state corporate law, or any state or
Federal bankruptcy, insolvency, reorganization or other law affecting the rights
of creditors generally, if the obligations of any Subsidiary Guarantor under
Section 10.01 would otherwise, taking into account the provisions of Section
10.05, be held or determined to be void, invalid or unenforceable, or
subordinated to the claims of any other creditors, on account of the amount of
its liability under Section 10.01, then, notwithstanding any other provision
hereof to the contrary, the amount of such liability shall, without any further
action by such Subsidiary Guarantor, any Lender, the Administrative Agent or any
other Person, be automatically limited and reduced to the highest amount that is
valid and enforceable and not subordinated to the claims of other creditors as
determined in such action or proceeding.
SECTION 10.05 Rights of Contribution. The Subsidiary Guarantors
hereby agree, as between themselves, that if any Subsidiary Guarantor shall
become an Excess Funding
-84-
Obligor (as defined below) by reason of the payment by such Subsidiary Guarantor
of any of the Borrower Guaranteed Obligations, each other Subsidiary Guarantor
shall, on demand of such Excess Funding Obligor (but subject to the next
sentence), pay to such Excess Funding Obligor an amount equal to such Subsidiary
Guarantor's Pro Rata Share (as defined below and determined, for this purpose,
without reference to the properties, debts and liabilities of such Excess
Funding Obligor) of the Excess Payment (as defined below) in respect of such
Borrower Guaranteed Obligations.
For purposes of this Section 10.05, (i) "Excess Funding Obligor"
shall mean, in respect of any of the Borrower Guaranteed Obligations, a
Subsidiary Guarantor that has paid an amount in excess of its Pro Rata Share of
such Borrower Guaranteed Obligations, (ii) "Excess Payment" shall mean, in
respect of any of the Borrower Guaranteed Obligations, the amount paid by an
Excess Funding Obligor in excess of its Pro Rata Share of such Borrower
Guaranteed Obligations and (iii) "Pro Rata Share" shall mean, for any Subsidiary
Guarantor, the ratio (expressed as a percentage) of (x) the amount by which the
aggregate fair saleable value of all properties of such Subsidiary Guarantor on
the date of this Agreement exceeds the amount of all the debts and liabilities
of such Subsidiary Guarantor (including contingent, subordinated, unmatured and
unliquidated liabilities, but excluding the obligations that have been
guaranteed by such Subsidiary Guarantor in Section 10.01) to (y) the amount by
which the aggregate fair saleable value of all assets of the Borrowers and all
the Subsidiary Guarantors exceeds the amount of all the debts and liabilities
(including contingent, subordinated, unmatured and unliquidated liabilities, but
excluding the obligations of the Borrowers and the Subsidiary Guarantors
hereunder) of the Borrowers and all the Subsidiary Guarantors, all as of the
Execution Date.
SECTION 10.06 Subrogation. Notwithstanding any payment or payments
made by any Subsidiary Guarantor hereunder, or any set-off or application by the
Administrative Agent or any Lender of any security or of any credits or claims,
no Subsidiary Guarantor will assert or exercise any rights of the Administrative
Agent or any Lender or of such Subsidiary Guarantor against either Borrower to
recover the amount of any payment made by such Subsidiary Guarantor to the
Administrative Agent or any Lender hereunder by way of any claim, remedy or
subrogation, reimbursement, exoneration, contribution, indemnity, participation
or otherwise arising by contract, by statute, under common law or otherwise, and
such Subsidiary Guarantor shall not have any right of recourse to or any claim
against assets or property of either Borrower, until all of the Borrower
Guaranteed Obligations are paid in full after the termination of the Commitments
of all Lenders and the expiration or termination of all Letters of Credit. If
any amount shall nevertheless be paid to a Subsidiary Guarantor by either
Borrower or another Subsidiary Guarantor prior to payment in full of the
Borrower Guaranteed Obligations, such amount shall be held in trust for the
benefit of the Administrative Agent and the Lenders and shall forthwith be paid
to the Administrative Agent to be credited and applied to the Borrower
Guaranteed Obligations, whether matured or unmatured. The provisions of this
paragraph shall survive the termination of this Subsidiary Guarantors Guaranty,
and any satisfaction and discharge of either Borrower by virtue of any payment,
court order or any Federal or state law.
SECTION 10.07 Subordination. If any Subsidiary Guarantor becomes the
holder of any indebtedness payable by either Borrower or another Subsidiary
Guarantor, each
-85-
Subsidiary Guarantor hereby subordinates all indebtedness owing to it from such
Borrower or such other Subsidiary Guarantor to all indebtedness of such Borrower
or such other Subsidiary Guarantor to the Administrative Agent and the Lenders,
and agrees that during the continuance of any Default or Event of Default it
shall not accept any payment on the same until the first to occur of (a) the
date such Default or Event of Default no longer exists and (b) payment in full
of the Borrower Guaranteed Obligations of the Borrowers under this Agreement and
the other Loan Documents after the termination of the Commitments of the Lenders
and the termination or expiration of the Letters of Credit and all other Loan
Documents, and, while any Default or Event of Default exists, shall in no
circumstance whatsoever attempt to set-off or reduce any obligations hereunder
because of such indebtedness. If any amount shall nevertheless be paid to a
Subsidiary Guarantor by either Borrower or another Subsidiary Guarantor prior to
payment in full of the Borrower Guaranteed Obligations and, while any Default or
Event of Default exists, such amount shall be held in trust for the benefit of
the Administrative Agent and the Lenders and shall forthwith be paid to the
Administrative Agent to be credited and applied to the Borrower Guaranteed
Obligations, whether matured or unmatured.
SECTION 10.08 Waiver. Each Subsidiary Guarantor hereby waives
promptness, diligence, notice of acceptance and any other notice with respect to
any of the Borrower Guaranteed Obligations and this Subsidiary Guarantors
Guaranty and waives presentment, demand for payment, notice of intent to
accelerate, notice of dishonor or nonpayment and any requirement that the
Administrative Agent or any Lender institute suit, collection proceedings or
take any other action to collect the Borrower Guaranteed Obligations, including
any requirement that the Administrative Agent or any Lender protect, secure,
perfect or insure any Lien against any property subject thereto or exhaust any
right or take any action against the Company or any other Person or any
collateral (it being the intention of the Administrative Agent, the Lenders and
each Subsidiary Guarantor that this Subsidiary Guarantors Guaranty is to be a
guaranty of payment and not of collection). It shall not be necessary for the
Administrative Agent or any Lender, in order to enforce any payment by any
Subsidiary Guarantor hereunder, to institute suit or exhaust its rights and
remedies against either Borrower, any other Subsidiary Guarantor or any other
Person, including others liable to pay any Borrower Guaranteed Obligations, or
to enforce its rights against any security ever given to secure payment thereof.
Each Subsidiary Guarantor hereby expressly waives to the maximum extent
permitted by applicable law each and every right to which it may be entitled by
virtue of the suretyship laws of the State of New York or any other state in
which it may be located, including any and all rights it may have pursuant to
Rule 31, Texas Rules of Civil Procedure, Section 17.001 of the Texas Civil
Practice and Remedies Code and Chapter 34 of the Texas Business and Commerce
Code. Each Subsidiary Guarantor hereby waives marshaling of assets and
liabilities, notice by the Administrative Agent or any Lender of any
indebtedness or liability to which such Lender applies or may apply any amounts
received by such Lender, and of the creation, advancement, increase, existence,
extension, renewal, rearrangement or modification of the Borrower Guaranteed
Obligations. Each Subsidiary Guarantor expressly waives, to the extent permitted
by applicable law, the benefit of any and all laws providing for exemption of
property from execution or for valuation and appraisal upon foreclosure.
SECTION 10.09 Full Force and Effect. This Subsidiary Guarantors
Guaranty is a continuing guaranty and shall remain in full force and effect
until all of the
-86-
Borrower Guaranteed Obligations under this Agreement and the other Loan
Documents and all other amounts payable under this Subsidiary Guarantors
Guaranty have been paid in full (after the termination of the Commitments of the
Lenders and the termination or expiration of the Letters of Credit). All rights,
remedies and powers provided in this Subsidiary Guarantors Guaranty may be
exercised, and all waivers contained in this Subsidiary Guarantors Guaranty may
be enforced, only to the extent that the exercise or enforcement thereof does
not violate any provisions of applicable law which may not be waived.
ARTICLE XI.
Miscellaneous
-------------
SECTION 11.01 Notices, Etc. The Administrative Agent, the Issuing
Bank, any Lender or the holder of any of the Obligations, giving consent or
notice or making any request of any Loan Party provided for hereunder, shall
notify each Lender (in the case of the Administrative Agent and/or the Issuing
Bank) and the Administrative Agent (in the case of a Lender) thereof. In the
event that the holder of any Note or any of the Obligations (including any
Lender) shall transfer such Note or Obligations, it shall promptly so advise the
Administrative Agent which shall be entitled to assume conclusively that no
transfer of any Note or any of the Obligations has been made by any holder
(including any Lender) unless and until the Administrative Agent receives
written notice to the contrary. Except with respect to notices and other
communications expressly permitted to be given by telephone, all notices,
consents, requests, approvals, demands and other communications (collectively
"Communications") provided for herein shall be in writing (including facsimile
Communications) and mailed, telecopied or delivered:
(a) if to the Company, to it at 1301 McKinney Street, Suite 3450,
Houston, Texas 77010, Attention of David G. Dehaemers, Jr. (Telecopy No.
(713) 844-9570);
(b) if to any other Loan Party, to it in care of the Company;
(c) if to the Administrative Agent, to it at _ First Union Capital
Markets, 1001 Fannin Street, Suite 2255, Houston, Texas 77002, Attention of
Paul Riddle (Telecopy No. 713-650-6354);
(d) if to the Issuing Bank, to it at _ First Union Capital Markets,
1001 Fannin Street, Suite 2255, Houston, Texas 77002, Attention of
Paul Riddle (Telecopy No. 713-650-6354);
(e) if to the Swingline Lender, to it at _ First Union Capital
Markets, 1001 Fannin Street, Suite 2255, Houston, Texas 77002, Attention of Paul
Riddle (Telecopy No. 713-650-6354); and
(f) If to any other Lender, as specified on the signature page for
such Lender hereto or, in the case of any Person who becomes a Lender after the
date hereof, as specified on the Assignment and Acceptance executed by such
Person or in the Administrative Questionnaire
-87-
delivered by such Person or, in the case of any party hereto, such other address
or telecopy number as such party may hereafter specify for such purpose by
notice to the other parties.
All Communications shall, when mailed, telecopied or delivered, be
effective when mailed by certified mail, return receipt requested to any party
at its address specified above, on the signature page hereof or on the signature
page of such Assignment and Acceptance (or other address designated by such
party in a Communication to the other parties hereto), or telecopied to any
party to the telecopy number set forth above, on the signature page hereof or on
the signature page of such Assignment and Acceptance (or other telecopy number
designated by such party in a Communication to the other parties hereto), or
delivered personally to any party at its address specified above, on the
signature page hereof or on the signature page of such Assignment and Acceptance
(or other address designated by such party in a Communication to the other
parties hereto); provided, however, Communications to the Administrative Agent
pursuant to Article II or Article VIII shall not be effective until received by
the Administrative Agent and Communications to the Administrative Agent, the
Issuing Bank or the Swingline Lender pursuant to Article II shall be at the
Principal Office.
SECTION 11.02 Waivers; Amendments. (a) No failure or delay by the
Administrative Agent, the Issuing Bank or any Lender in exercising, and no
course of dealing with respect to, any right or power hereunder shall operate as
a waiver thereof, nor shall any single or partial exercise of any such right or
power, or any abandonment or discontinuance of steps to enforce such a right or
power, preclude any other or further exercise thereof or the exercise of any
other right or power. No notice to or demand on any Loan Party in any case shall
entitle such Loan Party to any other or further notice or demand in similar or
other circumstances. No waiver of any provision of this Agreement or consent to
any departure therefrom shall in any event be effective unless the same shall be
permitted by Section 11.02(b), and then such waiver or consent shall be
effective only in the specific instance and for the purpose for which given.
Without limiting the generality of the foregoing, the making of a Loan or
issuance of a Letter of Credit shall not be construed as a waiver of any Default
or Event of Default, regardless of whether the Administrative Agent, any Lender
or the Issuing Bank may have had notice or knowledge of such Default at the
time.
(b) No provision of this Agreement or any other Loan Document
provision may be waived, amended or modified except pursuant to an agreement or
agreements in writing entered into by the Loan Parties and the Required Lenders
or by the Loan Parties and the Administrative Agent with the consent of the
Required Lenders; provided that no such agreement shall (i) increase the
Commitment of any Lender without the written consent of such Lender, (ii) reduce
the principal amount of any Loan or LC Disbursement or reduce the rate of
interest thereon, or reduce any fees payable hereunder, without the written
consent of each Lender affected thereby, (iii) postpone the scheduled date of
payment of the principal amount of any Loan or LC Disbursement, or any interest
thereon, or any fees payable hereunder, or reduce the amount of, waive or excuse
any such payment, or postpone the scheduled date of expiration of any
Commitment, without the written consent of each Lender affected thereby, (iv)
change Section 2.18(b) or (c) in a manner that would alter the pro rata sharing
of payments required thereby, without the written consent of each Lender, or (v)
release the Company or any Subsidiary Guarantor from their respective guarantees
contained in Article IX or Article X,
-88-
change any of the provisions of this Section 11.02(b), Section 11.05 or the
definition of "Required Lenders" or any other provision hereof specifying the
number or percentage of Lenders required to waive, amend or modify any rights
hereunder or make any determination or grant any consent hereunder, without the
written consent of each Lender (it being understood that, with the consent of
Required Lenders, additional extensions of credit pursuant to this Agreement may
be included in the determination of "Required Lenders" and provisions relating
to the pro rata sharing of payments on substantially the same basis as the
Revolving Loans and Commitments are included on the Execution Date); provided
further that no such agreement shall amend, modify or otherwise affect the
rights or duties of the Administrative Agent or the Issuing Bank hereunder
without the prior written consent of the Administrative Agent or the Issuing
Bank, as the case may be.
SECTION 11.03 Payment of Expenses, Indemnities, etc. The Company
agrees:
(a) whether or not the transactions hereby contemplated are
consummated, pay all reasonable expenses of the Administrative Agent in the
administration (both before and after the execution hereof and including advice
of counsel as to the rights and duties of the Administrative Agent and the
Lenders with respect thereto) of, and in connection with the negotiation,
syndication, investigation, preparation, execution and delivery of, recording or
filing of, preservation of rights under, enforcement of, and refinancing,
renegotiation or restructuring of, the Loan Documents and any amendment, waiver
or consent relating thereto (including, without limitation, travel, photocopy,
mailing, courier, telephone and other similar expenses of the Administrative
Agent, the cost of environmental audits, surveys and appraisals at reasonable
intervals, the reasonable fees and disbursements of counsel and other outside
consultants for the Administrative Agent and, in the case of enforcement of this
Agreement and the other Loan Documents, the reasonable fees and disbursements of
counsel, including the allocated costs of inside counsel, for each of the
Administrative Agent and the Issuing Bank, and each Lender); and promptly
reimburse the Administrative Agent for all amounts expended, advanced or
incurred by the Administrative Agent or the Lenders to satisfy any obligation of
any Loan Party under this Agreement.
(b) TO INDEMNIFY THE ADMINISTRATIVE AGENT, THE SYNDICATION AGENT, THE
ISSUING BANK AND EACH LENDER AND EACH OF THEIR AFFILIATES AND EACH OF THEIR
OFFICERS, DIRECTORS, EMPLOYEES, REPRESENTATIVES, AGENTS, ATTORNEYS, ACCOUNTANTS
AND EXPERTS ("INDEMNIFIED PARTIES") FROM, HOLD EACH OF THEM HARMLESS AGAINST AND
PROMPTLY UPON DEMAND PAY OR REIMBURSE EACH OF THEM FOR, THE INDEMNITY MATTERS
WHICH MAY BE INCURRED BY OR ASSERTED AGAINST OR INVOLVE ANY OF THEM (WHETHER OR
NOT ANY OF THEM IS DESIGNATED A PARTY THERETO) AS A RESULT OF, ARISING OUT OF OR
IN ANY WAY RELATED TO (I) ANY ACTUAL OR PROPOSED USE BY EITHER BORROWER OF THE
PROCEEDS OF ANY OF THE LOANS OR ANY LETTER OF CREDIT, (II) THE EXECUTION,
DELIVERY AND PERFORMANCE OF THE LOAN DOCUMENTS, (III) THE OPERATIONS OF THE
BUSINESS OF THE COMPANY AND THE RESTRICTED SUBSIDIARIES, (IV) THE FAILURE OF THE
COMPANY
-89-
OR ANY RESTRICTED SUBSIDIARY TO COMPLY WITH THE TERMS OF THIS AGREEMENT, OR WITH
ANY REQUIREMENT OF LAW, (V) ANY INACCURACY OF ANY REPRESENTATION OR ANY BREACH
OF ANY WARRANTY OF ANY LOAN PARTY SET FORTH IN ANY OF THE LOAN DOCUMENTS, (VI)
THE ISSUANCE, EXECUTION AND DELIVERY OR TRANSFER OF OR PAYMENT OR FAILURE TO PAY
UNDER ANY LETTER OF CREDIT, (VII) THE PAYMENT OF A DRAWING UNDER ANY LETTER OF
CREDIT NOTWITHSTANDING THE NON-COMPLIANCE, NON-DELIVERY OR OTHER IMPROPER
PRESENTATION OF THE MANUALLY EXECUTED DRAFT(S) AND CERTIFICATION(S) OR (VIII)
ANY OTHER ASPECT OF THE LOAN DOCUMENTS, INCLUDING THE REASONABLE FEES AND
DISBURSEMENTS OF COUNSEL AND ALL OTHER EXPENSES INCURRED IN CONNECTION WITH
INVESTIGATING, DEFENDING OR PREPARING TO DEFEND ANY SUCH ACTION, SUIT,
PROCEEDING (INCLUDING ANY INVESTIGATIONS, LITIGATION OR INQUIRIES) OR CLAIM AND
INCLUDING ALL INDEMNITY MATTERS ARISING BY REASON OF THE ORDINARY NEGLIGENCE OF
ANY INDEMNIFIED PARTY, BUT EXCLUDING ALL INDEMNITY MATTERS ARISING SOLELY BY
REASON OF CLAIMS BETWEEN THE LENDERS OR ANY LENDER AND THE ADMINISTRATIVE AGENT
OR THE SYNDICATION AGENT OR A LENDER'S SHAREHOLDERS AGAINST THE ADMINISTRATIVE
AGENT OR LENDER OR BY REASON OF THE GROSS NEGLIGENCE, WILLFUL MISCONDUCT OR
UNLAWFUL CONDUCT ON THE PART OF THE INDEMNIFIED PARTY SEEKING INDEMNIFICATION.
(c) TO INDEMNIFY AND HOLD HARMLESS FROM TIME TO TIME THE INDEMNIFIED
PARTIES FROM AND AGAINST ANY AND ALL LOSSES, CLAIMS, COST RECOVERY ACTIONS,
ADMINISTRATIVE ORDERS OR PROCEEDINGS, DAMAGES AND LIABILITIES TO WHICH ANY SUCH
PERSON MAY BECOME SUBJECT (I) UNDER ANY ENVIRONMENTAL LAW APPLICABLE TO THE
COMPANY OR ANY SUBSIDIARY OR ANY OF THEIR PROPERTIES OR ASSETS, INCLUDING THE
TREATMENT OR DISPOSAL OF HAZARDOUS SUBSTANCES ON ANY OF THEIR PROPERTIES OR
ASSETS, (II) AS A RESULT OF THE BREACH OR NON-COMPLIANCE BY THE COMPANY OR ANY
SUBSIDIARY WITH ANY ENVIRONMENTAL LAW APPLICABLE TO THE COMPANY OR ANY
SUBSIDIARY, (III) DUE TO PAST OWNERSHIP BY THE COMPANY OR ANY SUBSIDIARY OF ANY
OF THEIR PROPERTIES OR ASSETS OR PAST ACTIVITY ON ANY OF THEIR PROPERTIES OR
ASSETS WHICH, THOUGH LAWFUL AND FULLY PERMISSIBLE AT THE TIME, COULD RESULT IN
PRESENT LIABILITY, (IV) THE PRESENCE, USE, RELEASE, STORAGE, TREATMENT OR
DISPOSAL OF HAZARDOUS SUBSTANCES ON OR AT ANY OF THE PROPERTIES OWNED OR
OPERATED BY THE BORROWER OR ANY SUBSIDIARY, OR (V) ANY OTHER ENVIRONMENTAL,
HEALTH OR SAFETY CONDITION IN CONNECTION WITH THE LOAN DOCUMENTS, PROVIDED,
HOWEVER, THAT NO INDEMNITY SHALL BE AFFORDED UNDER THIS SECTION 11.03(c) IN
RESPECT OF ANY PROPERTY OR ASSET FOR ANY OCCURRENCE ARISING FROM THE ACTS OR
OMISSIONS OF THE ADMINISTRATIVE AGENT OR ANY LENDER DURING THE PERIOD AFTER
WHICH SUCH PERSON, ITS SUCCESSORS OR ASSIGNS SHALL HAVE OBTAINED POSSESSION OF
SUCH
-90-
PROPERTY OR ASSET (WHETHER BY FORECLOSURE OR DEED IN LIEU OF FORECLOSURE, AS
MORTGAGEE IN POSSESSION OR OTHERWISE).
(d) No Indemnified Party may settle any claim to be indemnified
without the consent of the indemnitor, such consent not to be unreasonably
withheld; provided, that the indemnitor may not reasonably withhold consent to
any settlement that an Indemnified Party proposes, if the indemnitor does not
have the financial ability to pay all its obligations outstanding and asserted
against the indemnitor at that time, including the maximum potential claims
against the Indemnified Party to be indemnified pursuant to this Section 11.03.
(e) In the case of any indemnification hereunder, the Administrative
Agent or Lender, as appropriate shall give notice to the Company of any such
claim or demand being made against the Indemnified Party and the Company shall
have the non-exclusive right to join in the defense against any such claim or
demand; provided that if the Company provides a defense, the Indemnified Party
shall bear its own cost of defense unless there is a conflict between the
Company and such Indemnified Party.
(f) THE FOREGOING INDEMNITIES SHALL EXTEND TO THE INDEMNIFIED PARTIES
NOTWITHSTANDING THE SOLE OR CONCURRENT NEGLIGENCE OF EVERY KIND OR CHARACTER
WHATSOEVER, WHETHER ACTIVE OR PASSIVE, WHETHER AN AFFIRMATIVE ACT OR AN
OMISSION, INCLUDING, ALL TYPES OF NEGLIGENT CONDUCT IDENTIFIED IN THE
RESTATEMENT (SECOND) OF TORTS OF ONE OR MORE OF THE INDEMNIFIED PARTIES OR BY
REASON OF STRICT LIABILITY IMPOSED WITHOUT FAULT ON ANY ONE OR MORE OF THE
INDEMNIFIED PARTIES. TO THE EXTENT THAT AN INDEMNIFIED PARTY IS FOUND TO HAVE
COMMITTED AN ACT OF GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OR ENGAGED IN
UNLAWFUL CONDUCT, THIS CONTRACTUAL OBLIGATION OF INDEMNIFICATION SHALL CONTINUE
BUT SHALL ONLY EXTEND TO THE PORTION OF THE CLAIM THAT IS DEEMED TO HAVE
OCCURRED BY REASON OF EVENTS OTHER THAN THE GROSS NEGLIGENCE, WILLFUL MISCONDUCT
OR UNLAWFUL CONDUCT OF THE INDEMNIFIED PARTY.
(g) The Company's obligations under this Section 11.03 shall survive
any termination of this Agreement, the payment of the Loans and the expiration
of the Letters of Credit and shall continue thereafter in full force and effect,
for a period of six years.
(h) To the extent that the Company fails to pay any amount required
to be paid by it to the Administrative Agent or the Issuing Bank under this
Section 11.03, each Lender severally agrees to pay to the Administrative Agent
or the Issuing Bank, as the case may be, such Lender's Applicable Percentage
(determined as of the time that the applicable unreimbursed expense or indemnity
payment is sought) of such unpaid amount; provided that the unreimbursed expense
or indemnified loss, claim, damage, liability or related expense, as the case
may be, was incurred by or asserted against the Administrative Agent or the
Issuing Bank in its capacity as such.
-91-
(i) The Company shall pay any amounts due under this Section 11.03
within thirty (30) days of the receipt by the Company of notice of the amount
due.
SECTION 11.04 Successors and Assigns. The provisions of this
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns permitted hereby. Nothing in this
Agreement, expressed or implied, shall be construed to confer upon any Person
(other than the parties hereto, their respective successors and assigns
permitted hereby and, to the extent expressly contemplated hereby, the Related
Parties of each of the Administrative Agent, the Issuing Bank and the Lenders)
any legal or equitable right, remedy or claim under or by reason of this
Agreement.
SECTION 11.05 Assignments and Participations.
(a) No Loan Party may assign its rights or obligations hereunder or
under the Notes or any Letter of Credit without the prior consent of all of the
Lenders and the Administrative Agent.
(b) Any Lender may assign to one or more assignees all or a portion
of its rights and obligations under this Agreement (including all or a portion
of its Commitment and the Loans at the time owing to it); provided that (i)
except in the case of an assignment to a Lender or an Affiliate of a Lender, any
other Eligible Assignee, each of the Company and the Administrative Agent (and,
in the case of an assignment of all or a portion of a Commitment or any Lender's
obligations in respect of its LC Exposure or Swingline Exposure, the Issuing
Bank and the Swingline Lender) must give their prior written consent to such
assignment (which consent shall not be unreasonably withheld), (ii) except in
the case of an assignment to a Lender or an Affiliate of a Lender or an
assignment of the entire remaining amount of the assigning Lender's Commitment,
the amount of the Commitment of the assigning Lender subject to each such
assignment (determined as of the date the Assignment and Acceptance with respect
to such assignment is delivered to the Administrative Agent) shall not be less
than $10,000,000 unless each of the Company and the Administrative Agent
otherwise consent, (iii) each partial assignment shall be made as an assignment
of a proportionate part of all the assigning Lender's rights and obligations
under this Agreement, (iv) the parties to each assignment shall execute and
deliver to the Administrative Agent an Assignment and Acceptance, together with
a processing and recordation fee of $3,500 for each such assignment (provided
that the processing and recordation fee for each assignment made by any Lender
party to this Agreement on the Execution Date shall be $2,000), and (v) the
assignee, if it shall not be a Lender, shall deliver to the Administrative Agent
an Administrative Questionnaire; provided further that any consent of the
Company otherwise required under this Section 11.05(b) shall not be required if
an Event of Default under Section 7.01(g) or Section 7.01(h) has occurred and is
continuing. Upon acceptance and recording pursuant to Section 11.05(d), from and
after the effective date specified in each Assignment and Acceptance, the
assignee thereunder shall be a party hereto and, to the extent of the interest
assigned by such Assignment and Acceptance, have the rights and obligations of a
Lender under this Agreement, and the assigning Lender thereunder shall, to the
extent of the interest assigned by such Assignment and Acceptance, be released
from its obligations under this Agreement (and, in the case of an Assignment and
Acceptance covering all of the assigning Lender's rights and obligations under
this Agreement, such Lender shall
-92-
cease to be a party hereto but shall continue to be entitled to the benefits of
Sections 2.15, 2.16, 2.17 and 11.03). Any assignment or transfer by a Lender of
rights or obligations under this Agreement that does not comply with this
paragraph shall be treated for purposes of this Agreement as a sale by such
Lender of a participation in such rights and obligations in accordance with
Section 11.05(e).
(c) The Administrative Agent, acting for this purpose as an agent of
the Loan Parties, shall maintain at one of its offices in Charlotte, North
Carolina a copy of each Assignment and Acceptance delivered to it and a register
for the recordation of the names and addresses of the Lenders, and the
Commitment of, and principal amount of the Loans and LC Disbursements owing to,
each Lender pursuant to the terms hereof from time to time (the "Register"). The
entries in the Register shall be conclusive, and each Loan Party, the
Administrative Agent, the Issuing Bank and the Lenders may treat each Person
whose name is recorded in the Register pursuant to the terms hereof as a Lender
hereunder for all purposes of this Agreement, notwithstanding notice to the
contrary. The Register shall be available for inspection by any Loan Party, the
Issuing Bank and any Lender, at any reasonable time and from time to time upon
reasonable prior notice.
(d) Upon its receipt of a duly completed Assignment and Acceptance
executed by an assigning Lender and an assignee, the assignee's completed
Administrative Questionnaire (unless the assignee shall already be a Lender
hereunder), the processing and recordation fee referred to in Section 11.05(b)
and any written consent to such assignment required by Section 11.05(b), the
Administrative Agent shall accept such Assignment and Acceptance and record the
information contained therein in the Register. No assignment shall be effective
for purposes of this Agreement unless it has been recorded in the Register as
provided in this paragraph.
(e) Any Lender may, without the consent of any Loan Party, the
Administrative Agent or the Issuing Bank, sell participations to one or more
banks or other entities (a "Participant") in all or a portion of such Lender's
rights and obligations under this Agreement (including all or a portion of its
Commitment and the Loans owing to it); provided that (i) such Lender's
obligations under this Agreement shall remain unchanged, (ii) such Lender shall
remain solely responsible to the other parties hereto for the performance of
such obligations and (iii) the Company, the Administrative Agent, the Issuing
Bank and the other Lenders shall continue to deal solely and directly with such
Lender in connection with such Lender's rights and obligations under this
Agreement. Any agreement or instrument pursuant to which a Lender sells such a
participation shall provide that such Lender shall retain the sole right to
enforce this Agreement and to approve any amendment, modification or waiver of
any provision of this Agreement; provided that such agreement or instrument may
provide that such Lender will not, without the consent of the Participant, agree
to any amendment, modification or waiver described in the first proviso to
Section 11.02(b) that affects such Participant. Subject to Section 11.05(f),
each Loan Party agrees that each Participant shall be entitled to the benefits
of Sections 2.15, 2.16 and 2.17 to the same extent as if it were a Lender and
had acquired its interest by assignment pursuant to Section 11.05(b), and be
indemnified under Section 11.03 as if it were a Lender. In addition, each
agreement creating any participation must include an agreement by the
Participant to be bound by the provisions of Section 11.12.
-93-
(f) A Participant shall not be entitled to receive any greater
payment under Section 2.15 or 2.17 than the applicable Lender would have been
entitled to receive with respect to the participation sold to such Participant,
unless the sale of the participation to such Participant is made with the
Company's prior written consent. A Participant that would be a Foreign Lender if
it were a Lender shall not be entitled to the benefits of Section 2.17 unless
the Company is notified of the participation sold to such Participant and such
Participant agrees, for the benefit of the Company, to comply with Section
2.17(e) as though it were a Lender.
(g) The Lenders may furnish any information concerning the Borrower
in the possession of the Lenders from time to time to assignees and Participants
(including prospective assignees and participants); provided that, such Persons
agree to be bound by the provisions of Section 11.12 hereof.
(h) Notwithstanding anything in this Section 11.05 to the contrary,
any Lender may assign and pledge its Notes to any Federal Reserve Bank or the
United States Treasury as collateral security pursuant to Regulation A and any
operating circular issued by such Federal Reserve System and/or such Federal
Reserve Bank. No such assignment and/or pledge shall release the assigning
and/or pledging Lender from its obligations hereunder.
(i) Notwithstanding any other provisions of this Section 11.05, no
transfer or assignment of the interests or obligations of any Lender or any
grant of participations therein shall be permitted if such transfer, assignment
or grant would require a Borrower to file a registration statement with the SEC
or to qualify the Loans under the "Blue Sky" laws of any state.
SECTION 11.06 Survival; Reinstatement. (a) All covenants, agreements,
representations and warranties made by the Company herein and in the
certificates or other instruments delivered in connection with or pursuant to
this Agreement shall be considered to have been relied upon by the other parties
hereto and shall survive the execution and delivery of this Agreement and the
making of any Loans and issuance of any Letters of Credit, regardless of any
investigation made by any such other party or on its behalf and notwithstanding
that the Administrative Agent, the Issuing Bank or any Lender may have had
notice or knowledge of any Default or Event of Default or incorrect
representation or warranty at the time any credit is extended hereunder, and
shall continue in full force and effect as long as the principal of or any
accrued interest on any Loan or any fee or any other amount payable under this
Agreement is outstanding and unpaid or any Letter of Credit is outstanding and
so long as the Commitments have not expired or terminated. The provisions of
Sections 2.15, 2.16, 2.17 and 11.03 and Article VIII shall survive and remain in
full force and effect regardless of the consummation of the transactions
contemplated hereby, the repayment of the Loans, the expiration or termination
of the Letters of Credit and the Commitments or the termination of this
Agreement or any provision hereof.
(b) To the extent that any payments on the Obligations are
subsequently invalidated, declared to be fraudulent or preferential, set aside
or required to be repaid to a trustee, debtor in possession, receiver or other
Person under any bankruptcy law, common law or equitable cause, then to such
extent, the Obligations so satisfied shall be revived and continue as if such
payment or proceeds had not been received.
-94-
SECTION 11.07 Counterparts; Integration; Effectiveness. This
Agreement may be executed in counterparts (and by different parties hereto on
different counterparts), each of which shall constitute an original, but all of
which when taken together shall constitute a single contract. This Agreement,
the other Loan Documents and the Fee Letter constitute the entire contract among
the parties hereto relating to the subject matter hereof and supersede any and
all previous agreements and understandings, oral or written, relating to the
subject matter hereof (including the Information Memorandum). Except as provided
in Section 3.01, this Agreement shall become effective when it shall have been
executed by the Administrative Agent and when the Administrative Agent shall
have received counterparts hereof which, when taken together, bear the
signatures of each of the other parties hereto, and thereafter shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and assigns. Delivery of an executed counterpart of a signature page
of this Agreement by telecopy shall be effective as delivery of a manually
executed counterpart of this Agreement.
SECTION 11.08 Severability. Any provision of this Agreement held to
be invalid, illegal or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such invalidity, illegality or
unenforceability without affecting the validity, legality and enforceability of
the remaining provisions hereof; and the invalidity of a particular provision in
a particular jurisdiction shall not invalidate such provision in any other
jurisdiction.
SECTION 11.09 Right of Setoff. If an Event of Default shall have
occurred and be continuing, each Lender is hereby authorized at any time and
from time to time, to the fullest extent permitted by law, to set off and apply
any and all deposits (general or special, time or demand, provisional or final)
at any time held and other indebtedness at any time owing by such Lender to or
for the credit or the account of any Loan Party against any of and all the
Obligations now or hereafter existing under this Agreement and the other Loan
Documents held by such Lender, irrespective of whether or not such Lender shall
have made any demand under this Agreement and although such Obligations may be
unmatured. The rights of each Lender under this Section 11.09 are in addition to
other rights and remedies (including other rights of setoff) which such Lender
may have.
SECTION 11.10 Governing Law; Jurisdiction; Consent to Service of
Process.
(a) This Agreement and the other Loan Documents shall be construed in
accordance with and governed by the law of the State of New York.
(b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT AND
THE OTHER LOAN DOCUMENTS MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK
OR OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF NEW YORK AND, BY EXECUTION
AND DELIVERY OF THIS AGREEMENT, EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY
ACCEPTS FOR ITSELF AND IN RESPECT OF ITS PROPERTY AND ASSETS, UNCONDITIONALLY,
THE NON-EXCLUSIVE JURISDICTION OF THE AFORESAID COURTS WITH RESPECT TO ANY SUCH
ACTION OR PROCEEDING. EACH LOAN PARTY HEREBY IRREVOCABLY DESIGNATES, APPOINTS
AND
-95-
EMPOWERS CT CORPORATION SYSTEM, INC., WITH OFFICES ON THE DATE HEREOF AT 1633
BROADWAY, NEW YORK, NEW YORK 10019, AS ITS DESIGNEE, APPOINTEE AND AGENT TO
RECEIVE, ACCEPT AND ACKNOWLEDGE FOR AND ON ITS BEHALF, AND IN RESPECT OF ITS
PROPERTY, SERVICE OF ANY AND ALL LEGAL PROCESS, SUMMONS, NOTICES AND DOCUMENTS
WHICH MAY BE SERVED IN ANY SUCH ACTION OR PROCEEDING. IF FOR ANY REASON SUCH
DESIGNEE, APPOINTEE AND AGENT SHALL CEASE TO BE AVAILABLE TO ACT AS SUCH, EACH
SUCH LOAN PARTY AGREES TO DESIGNATE A NEW DESIGNEE, APPOINTEE AND AGENT IN NEW
YORK, NEW YORK ON THE TERMS AND FOR THE PURPOSES OF THIS PROVISION SATISFACTORY
TO THE ADMINISTRATIVE AGENT. EACH LOAN PARTY FURTHER IRREVOCABLY CONSENTS TO THE
SERVICE OF PROCESS OUT OF ANY OF THE AFOREMENTIONED COURTS IN ANY SUCH ACTION OR
PROCEEDING BY THE MAILING OF COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL,
POSTAGE PREPAID, TO IT AT ITS ADDRESS PROVIDED IN SECTION 11.01, SUCH SERVICE TO
BECOME EFFECTIVE THIRTY DAYS AFTER SUCH MAILING. NOTHING HEREIN SHALL AFFECT THE
RIGHT OF THE ADMINISTRATIVE AGENT OR ANY LENDER TO SERVE PROCESS IN ANY OTHER
MANNER PERMITTED BY LAW OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED
AGAINST ANY LOAN PARTY IN ANY OTHER JURISDICTION.
(c) EACH OF THE LOAN PARTIES HEREBY IRREVOCABLY WAIVES ANY OBJECTION
WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY OF THE
AFORESAID ACTIONS OR PROCEEDINGS ARISING OUT OF OR IN CONNECTION WITH THIS
AGREEMENT BROUGHT IN THE COURTS REFERRED TO IN CLAUSE (b) ABOVE AND HEREBY
FURTHER IRREVOCABLY WAIVES, TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW,
AND AGREES NOT TO PLEAD OR CLAIM IN ANY SUCH COURT THAT ANY SUCH ACTION OR
PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
(d) EACH PARTY HERETO HEREBY (I) IRREVOCABLY WAIVES, TO THE MAXIMUM
EXTENT PERMITTED 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; (II) CERTIFIES THAT NO PARTY
HERETO NOR ANY REPRESENTATIVE OR AGENT OR COUNSEL FOR ANY PARTY HERETO HAS
REPRESENTED, EXPRESSLY OR OTHERWISE, OR IMPLIED THAT SUCH PARTY WOULD NOT, IN
THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVERS, AND (III)
ACKNOWLEDGES THAT IT HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE
TRANSACTIONS CONTEMPLATED HEREBY AND THEREBY BY, AMONG OTHER THINGS, THE MUTUAL
WAIVERS AND CERTIFICATIONS CONTAINED IN THIS SECTION 11.10.
-96-
SECTION 11.11 WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES,
TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A
TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER
BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES
THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED,
EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF
LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT
AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY,
AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 11.11.
SECTION 11.12 Confidentiality. Each of the Administrative Agent, the
Issuing Bank and the Lenders agrees to maintain the confidentiality of the
Information (as defined below), except that Information may be disclosed (a) to
its Affiliates, directors, officers and employees and to its agents, including
accountants, legal counsel and other advisors who have been informed of the
confidential nature of the information provided, (b) to the extent requested by
any regulatory authority, including the National Association of Insurance
Commissioners or any similar organization, or any nationally recognized rating
agency that requires access to information about a Lender's investment
portfolio, (c) to the extent a Lender reasonably believes it is required by
applicable laws or regulations or by any subpoena or similar legal process, (d)
to any other party to this Agreement, (e) in connection with the exercise of any
remedies hereunder or any suit, action or proceeding relating to this Agreement
or any other Loan Document or the enforcement of rights hereunder or thereunder,
(f) subject to an understanding with such Person that such Person will comply
with this Section 11.12, to any assignee of or Participant in, or any
prospective assignee of or Participant in, any of its rights or obligations
under this Agreement, (g) with the consent of the Company or (h) to the extent
such Information (i) becomes publicly available other than as a result of a
breach of this Section 11.12 or (ii) becomes available to the Administrative
Agent, the Issuing Bank or any Lender from a source other than a Loan Party. For
the purposes of this Section 11.12, "Information" means all information received
from any Loan Party relating to any Loan Party or its business, other than any
such information that is known to a Lender, publicly known or otherwise
available to the Administrative Agent, the Issuing Bank or any Lender other than
through disclosure (a) by a Loan Party, or (b) from a source actually known to a
Lender to be bound by a confidentiality agreement or other legal or contractual
obligation of confidentiality with respect to such information; provided that,
in the case of information received from any Loan Party after the date hereof,
such information is clearly identified at the time of delivery as confidential.
Any Person required to maintain the confidentiality of Information as provided
in this Section 11.12 shall be considered to have complied with its obligation
to do so if such Person maintains the confidentiality of such Information in
accordance with procedures adopted in good faith to protect confidential
information of third parties delivered to a lender.
SECTION 11.13 Interest Rate Limitation. Notwithstanding anything
herein to the contrary, if at any time the interest rate applicable to any Loan,
together with all fees,
-97-
charges and other amounts which are treated as interest on such Loan under
applicable law (collectively the "Charges"), shall exceed the maximum lawful
rate (the "Maximum Rate") which may be contracted for, charged, taken, received
or reserved by the Lender holding such Loan in accordance with applicable law,
the rate of interest payable in respect of such Loan hereunder, together with
all Charges payable in respect thereof, shall be limited to the Maximum Rate
and, to the extent lawful, the interest and Charges that would have been payable
in respect of such Loan but were not payable as a result of the operation of
this Section 11.13 shall be cumulated and the interest and Charges payable to
such Lender in respect of other Loans or periods shall be increased (but not
above the Maximum Rate therefor) until such cumulated amount, together with
interest thereon at the Federal Funds Effective Rate to the date of repayment,
shall have been received by such Lender.
SECTION 11.14 RETIRING BANKS; RELEASE. (A) Each of the parties to
the Existing Agreement is either a Continuing Bank or a Retiring Bank.
(b) Each Retiring Bank is executing this Agreement solely for the
purpose of consenting to the amendment and restatement of the Existing Credit
Agreement and to the release of the Collateral (as defined therein). Upon the
effectiveness of this Agreement, no Retiring Bank shall have any commitment or
obligation to the Borrowers under the Existing Credit Agreement and, upon the
repayment of all Obligations due to the Retiring Banks, the Loan Parties shall
have no obligation to any Retiring Bank under the Existing Credit Agreement or
this Agreement.
(c) The Lenders and the Administrative Agent acknowledge and agree
upon the Effective Date (i) the Lien on the Collateral (as defined in the
Existing Credit Agreement) will be automatically released, (ii) each of the
Company, the Subsidiary Borrower and each Subsidiary Guarantor that is a party
to a Security Document (as defined in the Existing Credit Agreement) will
automatically be released and discharged from any and all obligations and
liabilities under the Security Documents and (iii) the Security Documents (as
defined in the Existing Credit Agreement) shall cease to be of any force or
effect. The Administrative Agent is hereby authorized to deliver, and on the
Effective Date the Administrative Agent shall deliver, to the Company all stock
certificates and other collateral (as defined in the Existing Credit Agreement)
in its possession.
SECTION 11.15 EXCULPATION PROVISIONS. EACH OF THE PARTIES HERETO
SPECIFICALLY AGREES THAT IT HAS A DUTY TO READ THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS AND AGREES THAT IT IS CHARGED WITH NOTICE AND KNOWLEDGE OF THE TERMS
OF THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS; THAT IT HAS IN FACT READ THIS
AGREEMENT AND IS FULLY INFORMED AND HAS FULL NOTICE AND KNOWLEDGE OF THE TERMS,
CONDITIONS AND EFFECTS OF THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS; THAT IT
HAS BEEN REPRESENTED BY INDEPENDENT LEGAL COUNSEL OF ITS CHOICE THROUGHOUT THE
NEGOTIATIONS PRECEDING ITS EXECUTION OF THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS; AND HAS RECEIVED THE ADVICE OF ITS ATTORNEY IN ENTERING INTO THIS
AGREEMENT AND THE
-98-
OTHER LOAN DOCUMENTS; AND THAT IT RECOGNIZES THAT CERTAIN OF THE TERMS OF THIS
AGREEMENT AND THE OTHER LOAN DOCUMENTS RESULT IN ONE PARTY ASSUMING THE
LIABILITY INHERENT IN SOME ASPECTS OF THE TRANSACTION AND RELIEVING THE OTHER
PARTY OF ITS RESPONSIBILITY FOR SUCH LIABILITY. EACH PARTY HERETO AGREES AND
COVENANTS THAT IT WILL NOT CONTEST THE VALIDITY OR ENFORCEABILITY OF ANY
EXCULPATORY PROVISION OF THIS AGREEMENT ON THE BASIS THAT THE PARTY HAD NO
NOTICE OR KNOWLEDGE OF SUCH PROVISION OR THAT THE PROVISION IS NOT
"CONSPICUOUS."
-99-
The parties hereto have caused this Agreement to be duly executed as
of the date and year first above written.
KINDER MORGAN ENERGY PARTNERS, L.P.,
as the Company
By: Kinder Morgan G.P., Inc.,
its General Partner
By: /s/ David G. Dehaemers
--------------------------
Name: David G. Dehaemers
Title: Chief Financial Officer
Address for Notices:
1301 McKinney Street
Suite 3450
Houston, Texas 77010
Telecopier No.: (713) 844-9570
Telephone No.: (713) 844-9500
Attention: David G. Dehaemers, Jr.
Chief Executive Office and Principal Place
of Business:
1301 McKinney Street
Suite 3450
Houston, Texas 77010
KINDER MORGAN OPERATING L.P. "B",
as the Subsidiary Borrower and as a Subsidiary
Guarantor
By: Kinder Morgan G.P., Inc.,
its General Partner
By: /s/ David G. Dehaemers
--------------------------
Name: David G. Dehaemers
Title: Chief Financial Officer
Address for Notices:
1301 McKinney Street
Suite 3450
Houston, Texas 77010
Telecopier No.: (713) 844-9570
Telephone No.: (713) 844-9500
Attention: David G. Dehaemers, Jr.
Chief Executive Office and Principal Place
of Business:
1301 McKinney Street
Suite 3450
Houston, Texas 77010
KINDER MORGAN OPERATING L.P. "A",
as a Subsidiary Guarantor
By: Kinder Morgan G.P., Inc.,
its General Partner
By: /s/ David G. Dehaemers
--------------------------
Name: David G. Dehaemers
Title: Chief Financial Officer
Address for Notices:
1301 McKinney Street
Suite 3450
Houston, Texas 77010
Telecopier No.: (713) 844-9570
Telephone No.: (713) 844-9500
Attention: David G. Dehaemers, Jr.
Chief Executive Office and Principal Place
of Business:
1301 McKinney Street
Suite 3450
Houston, Texas 77010
KINDER MORGAN OPERATING L.P. "C",
as a Subsidiary Guarantor
By: Kinder Morgan G.P., Inc.,
its General Partner
By: /s/ David G. Dehaemers
--------------------------
Name: David G. Dehaemers
Title: Chief Financial Officer
Address for Notices:
1301 McKinney Street
Suite 3450
Houston, Texas 77010
Telecopier No.: (713) 844-9570
Telephone No.: (713) 844-9500
Attention: David G. Dehaemers, Jr.
Chief Executive Office and Principal Place
of Business:
1301 McKinney Street
Suite 3450
Houston, Texas 77010
KINDER MORGAN OPERATING L.P. "D",
as a Subsidiary Guarantor
By: Kinder Morgan G.P., Inc.,
its General Partner
By: /s/ David G. Dehaemers
--------------------------
Name: David G. Dehaemers
Title: Chief Financial Officer
Address for Notices:
1301 McKinney Street
Suite 3450
Houston, Texas 77010
Telecopier No.: (713) 844-9570
Telephone No.: (713) 844-9500
Attention: David G. Dehaemers, Jr.
Chief Executive Office and Principal Place
of Business:
1301 McKinney Street
Suite 3450
Houston, Texas 77010
KINDER MORGAN NATURALGAS LIQUIDS CORPORATION,
as a Subsidiary Guarantor
By: /s/ David G. Dehaemers
--------------------------
Name: David G. Dehaemers
Title: Chief Financial Officer
Address for Notices:
1301 McKinney Street
Suite 3450
Houston, Texas 77010
Telecopier No.: (713) 844-9570
Telephone No.: (713) 844-9500
Attention: David G. Dehaemers, Jr.
Chief Executive Office and Principal Place
of Business:
1301 McKinney Street
Suite 3450
Houston, Texas 77010
KINDER MORGAN BULK TERMINALS, INC.,
as a Subsidiary Guarantor
By: /s/ David G. Dehaemers
--------------------------
Name: David G. Dehaemers
Title: Chief Financial Officer
Address for Notices:
1301 McKinney Street
Suite 3450
Houston, Texas 77010
Telecopier No.: (713) 844-9570
Telephone No.: (713) 844-9500
Attention: David G. Dehaemers, Jr.
Chief Executive Office and Principal Place
of Business:
1301 McKinney Street
Suite 3450
Houston, Texas 77010
KINDER MORGAN CO2, LLC,
as a Subsidiary Guarantor
By: Kinder Morgan Operating L.P. "A",
its Sole Member
By: Kinder Morgan G.P., Inc.,
its General Partner
By: /s/ David G. Dehaemers
--------------------------
Name: David G. Dehaemers
Title: Chief Financial Officer
Address for Notices:
1301 McKinney Street
Suite 3450
Houston, Texas 77010
Telecopier No.: (713) 844-9570
Telephone No.: (713) 844-9500
Attention: David G. Dehaemers, Jr.
Chief Executive Office and Principal Place
of Business:
1301 McKinney Street
Suite 3450
Houston, Texas 77010
CONTINUING LENDER:
Revolving Loan Commitment: FIRST UNION NATIONAL BANK, as the Arranger,
$47,000,000.00 the Syndication Agent, Administrative Agent,
the Issuing Bank, the Swingline Lender and as a
Lender
By: /s/ Paul N. Riddle
--------------------------
Name: Paul N. Riddle
Title: Senior Vice President
Address for Notices:
First Union National Bank
301 South College Street, TW-10
Charlotte, North Carolina 28288-0608
Telecopier No.: (704) 383-0288
Telephone No.: (704) 383-0281
Attention: Syndication Agency Services
With copy to:
First Union Capital Markets Corp.
1001 Fannin, Suite 2255
Houston, Texas 77002
Telecopier No.: (713) 650-6354
Telephone No.: (713) 650-3716
Attention: Paul N. Riddle
CONTINUING LENDER:
Revolving Loan Commitment: GOLDMAN SACHS CREDIT PARTNERS, L.P.
$8,000,000.00
By: /s/ Stephen B. King
--------------------------
Name: Stephen B. King
Title: Authorized Signatory
Address for Notices:
Goldman Sachs & Co.
85 Broad Street, 15th Floor
New York, New York 10004
Telecopier No.: (212) 357-0932
Telephone No.: (212) 902-8123
Attention: Stephen B. King
CONTINUING LENDER:
Revolving Loan Commitment: BANK OF AMERICA NATIONAL TRUST
$10,000,000.00 AND SAVINGS ASSOCIATION
By: /s/ Michael J. Dillon
--------------------------
Name: Michael J. Dillon
Title: Managing Director
Address for Notices:
Bank of America NT&SA
1850 Gateway Blvd.
Concord, California 94520
Telecopier No.: (510) 603-7243
Telephone No.: (510) 675-7148
Attention: Laurie Warner
With copy to:
Pamela K. Rodgers
Bank of America NT&SA
333 Clay Street, Suite 4550
Houston, Texas 77002
Telecopier No.: (713) 651-4808
Telephone No.: (713) 651-4880
CONTINUING LENDER:
Revolving Loan Commitment: BANK OF MONTREAL
$12,500,000.00
By: /s/ J.B. Whitmore
--------------------------
Name: J.B. Whitmore
Title: Director
Address for Notices:
Bank of Montreal
700 Louisiana Street
Suite 4400
Houston, Texas 77002
Telecopier No.: (713) 223-4007
Telephone No.: (713) 546-9750
Attention: Cahal B. Carmody, Director
CONTINUING LENDER:
Revolving Loan Commitment: BANK OF SCOTLAND
$20,000,000.00
By: /s/ Annie Chin Tat
--------------------------
Name: Annie Chin Tat
Title: Senior Vice President
Address for Notices:
Bank of Scotland
565 Fifth Avenue
New York, New York 10017
Telecopier No.: (212) 557-9460
Telephone No.: (212) 450-0871
Attention: Annie Chin Tat
With copy to:
Bank of Scotland
1750 Two Allen Center
1200 Smith Street
Houston, Texas 77002-4312
Telecopier No.: (713) 651-9714
Telephone No.: (713) 651-1870
Attention: Janna Blanter
CONTINUING LENDER:
Revolving Loan Commitment: PARIBAS
$12,500,000.00
By: /s/ Marian Livingston
--------------------------
Name: Marian Livingston
Title: Vice President
By: /s/ Michael H. Fiuzat
--------------------------
Name: Michael H. Fiuzat
Title: Vice President
Address for Notices:
Paribas
1200 Smith Street, Suite 3100
Houston, Texas 77002
Telecopier No.: (713) 659-6915
Telephone No.: (713) 659-4811
Attention: Marian Livingston
CONTINUING LENDER:
Revolving Loan Commitment: BARCLAYS BANK PLC
$22,000,000.00
By: /s/ J. Onischuk
--------------------------
Name: J. Onischuk
Title: Associate Director
Address for Notices:
Barclays Bank PLC
222 Broadway
New York, New York 10038
Telecopier No.: (212) 412-7585
Telephone No.: (212) 412-7584
Attention: J. Onischuk
CONTINUING LENDER:
Revolving Loan Commitment: CIBC INC.
$10,000,000.00
By: /s/ Michael A.G. Corkum
--------------------------
Name: Michael A.G. Corkum
Title: Authorized Signarory
Address for Notices:
CIBC, Inc.
Two Paces West, Suite 1200
Two Paces Ferry Road
Atlanta, Georgia 30339
Telecopier No.: (770) 319-4950
Telephone No.: (770) 319-4821
Attention: Kanthryn S. McGovern
CONTINUING LENDER:
Revolving Loan Commitment: COMMERZBANK AG, ATLANTA AGENCY
$10,000,000.00
By: /s/ W. David Suttles
--------------------------
Name: W. David Suttles
Title: Vice President
By: /s/ S.R. Viswanathan
--------------------------
Name: Subash R. Viswanathan
Title: Vice President
Address for Notices:
Commerzbank AG, Atlanta Agency
Prominade 2, Suite 3500
1230 Peachtree Street, NE
Atlanta, Georgia 30309
Telecopier No.: (404) 888-6539
Telephone No.: (404) 888-6524
Attention: David Suttles, Vice President
With a copy to:
Dempsey L. Gable, Senior Vice President
Commerzbank AG, New York Branch
2 World Financial Center
New York, New York 10281-1050
Telecopier No.: (212) 266-07530
Telephone No.: (212) 266-7560
CONTINUING LENDER:
Revolving Loan Commitment: CREDIT LYONNAIS NEW YORK BRANCH
$10,000,000.00
By: /s/ Philippe Soustra
--------------------------
Name: Philippe Soustra
Title: Senior Vice President
Address for Notices:
Credit Lyonnais Houston Representative Office
1000 Louisiana, Suite 5360
Houston, Texas 77002
Telecopier No.: (713) 751-0307
Telephone No.: (713) 753-8723
Attention: Bernadette Archie
CONTINUING LENDER:
Revolving Loan Commitment: THE FIRST NATIONAL BANK OF CHICAGO
$39,000,000.00
By: /s/ Dixon P. Schultz
--------------------------
Name: Dixon P. Schultz
Title: First Vice President
Address for Notices:
The First National Bank of Chicago
One First National Plaza
Suite 0634, I-10
Chicago, Illinois 60670
Telecopier No.: (312) 732-4840
Telephone No.: (312) 732-3659
Attention: John Beirne
CONTINUING LENDER:
Revolving Loan Commitment: NATIONSBANK, N.A., as successor by merger to
$22,000,000.00 NationsBank of Texas, N.A.
By: /s/ Michael J. Dillon
--------------------------
Name: Michael J. Dillon
Title: Managing Director
Address for Notices:
NationsBank N.A.
700 Louisiana
Houston, Texas 77002
Telecopier No.: (713) 247-6568
Telephone No.: (713) 247-6952
Attention: Paul A. Squires
CONTINUING LENDER:
Revolving Loan Commitment: THE PRUDENTIAL INSURANCE COMPANY
$50,000,000.00 OF AMERICA
By: /s/ Steven D. Arnold
--------------------------
Name: Steven D. Arnold
Title: Vice President
Address for Notices:
The Prudential Insurance Company of America
c/o Prudential Capital Group
Four Gateway Center
100 Mulberry Street
Newark, New Jersey 07102-4869
Telecopier No.: (973) 802-9425
Telephone No.: (973) 802-3141
Attention: Trade Management Manager
With copy to:
The Prudential Insurance Company of America
c/o Prudential Capital Group
2200 Ross Avenue, Suite 4200 East
Dallas, Texas 75201
Attention: Managing Director
CONTINUING LENDER:
Revolving Loan Commitment: SOCIETE GENERALE
$22,000,000.00
By: /s/ Richard A. Gould
----------------------------------
Name: Richard A. Gould
Title: Director
Address for Notices:
Societe Generale
2001 Ross Avenue, Suite 4800
Dallas, Texas 75201
Telecopier No.: (214) 979-0171
Telephone No.: (214) 979-2769
Attention: Lia Guerra
With copy to:
Societe Generale
1111 Bagby, Suite 2020
Houston, Texas 77002
Telecopier No.: (713) 650-0824
Telephone No.: (713) 759-6324
Attention: Richard Gould
CONTINUING LENDER:
Revolving Loan Commitment: PNC BANK, NATIONAL ASSOCIATION
$10,000,000.00
By: /s/ John R. Way
--------------------------
Name: John R. Way
Title: Assistant Vice President
Address for Notices:
249 5th Avenue
Pittsburgh, Pennsylvania 15222
Telecopier No.: (412) 762-2571
Telephone No.: (412) 762-5290
Attention: John R. Way
With a copy to:
Tina Lanuka
Two PNC Plaza, Third Floor
Old Liberty Avenue
Pittsburgh, Pennsylvania 15222
Telecopier: (412) 768-4586
Telephone: (412) 768-5876
CONTINUING LENDER:
Revolving Loan Commitment: UNION BANK OF CALIFORNIA
$10,000,000.00
By: /s/ Gary Shekerjian
--------------------------
Name: Gary Shekerjian
Title: Assistant Vice President
Address for Notices:
Union Bank of California, N.A.
Energy Department
500 North Akard St., Suite 4200
Dallas, Texas 75201
Attention: Gary E. Shekerjian
CONTINUING LENDER:
Revolving Loan Commitment: WELLS FARGO BANK (TEXAS), NA
$10,000,000.00
By: /s/ J. Alan Alexander
--------------------------
Name: J. Alan Alexander
Title: Vice President
Address for Notices:
Wells Fargo Bank (Texas), NA
Energy Department
1000 Louisiana, Third Floor
Houston, Texas 77002
Telecopier No.: (713) 739-1087
Telephone No.: (713) 319-1368
Attention: J. Alan Alexander
With copy to:
Oscar Enriquez
201 Third Street, 8th Floor
San Francisco, California 94103
Telecopier No.: (415) 979-0675
Telephone No.: (415) 477-5425
RETIRING LENDERS:
BANK ONE, TEXAS, NA
By: /s/ Damien G. Meiburger
--------------------------
Name: Damien G. Meiburger
Title: Senior Vice President
RETIRING BANK:
DEN NORSKE BANK ASA
By: /s/ Charles E. Hall
--------------------------
Name: Charles E. Hall
Title: Senior Vice President
By: /s/ Byron L. Cooley
--------------------------
Name: Byron L. Cooley
Title: Senior Vice President