GUARANTY AGREEMENT
THIS GUARANTY AGREEMENT (this "GUARANTY") is made as of May 4, 2004 by
BUCKEYE PIPE LINE SERVICES COMPANY, a Pennsylvania corporation (the
"GUARANTOR"), in favor the holders from time to time of the Notes delivered
under the Note Agreement described below (such holders are herein called the
"NOTE HOLDERS").
RECITALS
A. The Buckeye Pipe Line Services Company Employee Stock
Ownership Plan Trust (the "ESOP TRUST") has entered into a Note Agreement dated
as of May 4, 2004 (as the same may be amended, restated, supplemented or
otherwise modified from time to time, the "NOTE AGREEMENT") with the Purchasers
named therein under which the ESOP Trust has issued and sold to such Purchasers
its 3.60% Senior Secured Notes due March 28, 2011, in the aggregate principal
amount of $44,133,600 (together with any Notes issued in substitution or
exchange therefor pursuant to the Note Agreement, the "NOTES").
B. The ESOP Trust owns directly all of the outstanding capital
stock of the Guarantor.
C. It is a condition precedent to the effectiveness of the Note
Agreement that the Guarantor shall have executed and delivered this Guaranty,
and the board of directors of the Guarantor has determined that the Guarantor's
execution, delivery and performance of this Guaranty may reasonably be expected
to be in the best interests of the Guarantor.
NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, and in order to induce the Purchasers identified in the Note
Agreement to purchase the Notes, the Guarantor hereby agrees with the Note
Holders as follows:
1. DEFINITIONS
All capitalized terms used herein, unless specifically otherwise
defined, shall have the meanings ascribed to them in the Note Agreement. In
addition, the following terms shall have the meanings specified with respect
thereto below (such meanings to be equally applicable to both the singular and
plural forms of the terms defined):
"ACCOUNTS" shall have the meaning given to such term in the Collateral
Assignment of Deposit Accounts.
"AFFILIATE" shall mean any Person directly or indirectly controlling,
controlled by, or under direct or indirect common control with, the Guarantor. A
Person shall be deemed to control another Person if such Person possesses,
directly or indirectly, the power to direct or cause the direction of the
management and policies of such other Person, whether through the ownership of
voting securities, by contract or otherwise.
"BMC EXPENSE REIMBURSEMENT AGREEMENT" means that certain Expense
Reimbursement Agreement dated as of May 4, 2004 between BMC and the Manager, as
from time to time amended, supplemented, restated or otherwise modified in
accordance with the terms hereof.
"COLLATERAL COVERAGE RATIO" means, as of any date of determination, the
ratio of (i) the sum of (a) the aggregate Market Value of all LP Units owned by
the Guarantor plus (b) the aggregate market value (as determined by the Required
Holder(s) based upon the most recent monthly account statement relating to the
Accounts delivered to the Note Holders by the Depository Institution or such
other account statement as of a more recent date as may be delivered to the Note
Holders by the Depository Institution upon request) of all other Subject
Investments and cash held in the Services Company Disbursement Account and the
Services Company Reserve Account, in each case only to the extent subject to a
valid and perfected first priority pledge and security interest in favor of the
Collateral Trustee, securing payment of the Notes and payment, performance and
observance of the other obligations under the Note Documents, to (ii) the
aggregate principal amount of Notes outstanding on such date.
"DEPOSITORY INSTITUTION" shall have the meaning given to such term in
the Collateral Assignment of Deposit Accounts.
"ERISA AFFILIATE" shall mean any corporation which is a member of the
same controlled group of corporations as the Guarantor within the meaning of
section 414(b) of the Code, any member of an affiliated service group, as
determined under section 414(m) of the Code, of which the Guarantor is a member,
or any trade or business which is under common control with the Guarantor within
the meaning of section 414(c) of the Code.
"EVENT OF DEFAULT" shall mean any of the events specified in Section
6.1, provided that there has been satisfied all requirements in connection with
such event for the giving of notice, or the lapse of time, or the happening of
any further condition, event or act, and "DEFAULT" shall mean any of such
events, whether or not all such requirements have been satisfied.
"GUARANTOR SECURITY AGREEMENT" shall mean that certain Security
Agreement dated as of May 4, 2004 between the Manager and BMS, as grantors, and
the Guarantor, as secured party, as from time to time amended, supplemented,
restated or otherwise modified in accordance with the terms hereof.
"INTANGIBLE ASSETS" shall mean, as to any Person or consolidated group
of Persons, those assets of such Person or group of Persons which are (i)
deferred assets, other than prepaid insurance and prepaid taxes, (ii) goodwill,
patents, copyrights, trademarks, franchises and other similar assets which would
be classified as intangible assets on a balance sheet of such Person or group of
Persons prepared in accordance with GAAP and (iii) unamortized debt discount and
expense.
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"LP UNITS" shall mean limited partnership units of the Master
Partnership.
"MARKET VALUE" means, with respect to any LP Units owned by the
Guarantor on any date of determination, the lesser of (i) the amount per unit
equal to the last sale price of the LP Units, regular way, on such date or, if
no such sale takes place on such date, the average of the closing bid and asked
prices thereof on such date, and (ii) the amount per unit equal to the average,
over the thirty trading days immediately preceding the date of determination
thereof, of the last sale price of the LP Units, regular way, or if no such sale
takes place on any of such days, the average of the reported closing bid and
asked prices thereof on such day, in each case as officially reported on the
principal national securities exchange on which the same are then listed or
admitted to trading.
"MATERIAL ADVERSE EFFECT" shall mean a material adverse effect on (i)
the business, operations, affairs, condition (financial or otherwise), assets,
properties or prospects of the Guarantor, or (ii) the ability of the Guarantor
to perform its obligations under this Guaranty and the other Note Documents to
which it is a party or (iii) the validity or enforceability of this Guaranty,
the Note Agreement, the Notes, any of the other Note Documents or any of the
ESOP Documents.
"MATERIAL DEBT" shall mean, as to any Person, Debt of such Person in an
aggregate principal amount exceeding $250,000.
"MULTIEMPLOYER PLAN" shall mean any Plan which is a "multiemployer
plan" (as such term is defined in section 4001(a)(3) of ERISA).
"PBGC" shall mean the Pension Benefit Guaranty Corporation or any
successor entity.
"PERMITTED INVESTMENTS" shall mean (i) investments in obligations of
the United States of America maturing within one year from the date of
acquisition, (ii) certificates of deposit issued by commercial banks organized
under the laws of the United States of America or any state thereof, having a
combined capital, surplus and undivided profits of not less than $500,000,000
and with a long-term debt rating (assigned either to such banks or to such
banks' parent holding companies) of Aa2 (or its then equivalent) according to
Xxxxx'x Investors Service, Inc. ("MOODY'S"), AA (or its then equivalent)
according to Standard & Poor's Ratings Group ("S&P"), or a better rating, (iii)
investments in commercial paper, maturing not more than 90 days after the date
of issue, issued by a Person (other than an Affiliate) with a rating of "P-1"
(or its then equivalent) according to Moody's, "A-1" (or its then equivalent)
according to S&P, or a better rating, (iv) investments in securities with a
maturity of no more than 12 months from the date of acquisition issued or fully
guaranteed by any state or commonwealth of the United States, which securities
are rated at least "A-2" (or its then equivalent) by Moody's or "A" (or its
equivalent) by S&P, and (v) investments in Repurchase Agreements.
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"PLAN" shall mean any "employee pension benefit plan" (as such term is
defined in section 3 of ERISA) which is or has been established or maintained,
or to which contributions are or have been made, by the Guarantor or any ERISA
Affiliate of the Guarantor.
"REIMBURSEMENT SECURITY AGREEMENTS" shall mean (i) that certain
Security Agreement dated as of May 4, 2004 between the Manager, as grantor, and
Glenmoor, as secured party, as from time to time amended, supplemented, restated
or otherwise modified in accordance with the terms hereof, (ii) that certain
Security Agreement dated as of May 4, 2004 between the Manager, as grantor, and
BMC, as secured party, as from time to time amended, supplemented, restated or
otherwise modified in accordance with the terms hereof and (iii) the Guarantor
Security Agreement.
"REPURCHASE AGREEMENT" shall mean, with respect to any Person, (i) any
written agreement that provides for (a) the transfer of securities issued or
fully guaranteed or insured by the United States government in an aggregate
principal amount at least equal to the amount of the Transfer Price (defined
below) to such Person from any commercial bank satisfying the requirements set
forth in clause (ii) of the definition of " Permitted Investments" set forth
above against a transfer of funds (the "TRANSFER PRICE") by such Person to such
bank, and (b) a simultaneous agreement by such Person, in connection with such
transfer of funds, to transfer to such bank the same or substantially similar
securities for a price not less than the Transfer Price plus a reasonable return
thereon not later than the next Business Day following such transfer of funds,
(ii) in respect of which such Person shall have the right, whether by contract
or pursuant to applicable law, to liquidate such agreement upon the occurrence
of any default thereunder, and (iii) in connection with which all action
required by applicable law or regulations shall have been taken to perfect a
Lien in such securities in favor of such Person.
"RESTRICTED PAYMENTS" shall mean (i) all dividends or other
distributions in respect of any class of the capital stock of the Guarantor,
(ii) all redemptions, purchases or other acquisitions, directly or indirectly,
of any shares of any class of the capital stock of the Guarantor, whether now or
hereafter outstanding, and (iii) employer contributions by the Guarantor to the
ESOP on behalf of eligible employees of the Guarantor, in each case, whether in
cash or property or in obligations of the Guarantor.
"SALE AND LEASEBACK TRANSACTION" shall mean a transaction whereby the
Guarantor becomes liable with respect to any lease of any property (whether
real, personal or mixed), whether now owned or hereafter acquired, which (i) the
Guarantor has sold or transferred or is to sell or transfer to any other Person
or (ii) the Guarantor intends to use for substantially the same purposes as any
other property which has been or is to be sold or transferred by the Guarantor
to any other Person in connection with such lease.
"SERVICES COMPANY DISBURSEMENT ACCOUNT" shall have the meaning given to
such term in the Collateral Assignment of Deposit Accounts.
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"SERVICES COMPANY RESERVE ACCOUNT" shall have the meaning given to such
term in the Collateral Assignment of Deposit Accounts.
"SIGNIFICANT OPERATING COMPANY" shall mean (i) Buckeye Pipe Line
Company, L.P., Everglades Pipe Line Company, L.P., Laurel Pipe Line Company,
L.P., Buckeye Pipe Line Holdings, L.P., each a Delaware limited partnership, and
(ii) any other direct or indirect Subsidiary of the Master Partnership, whether
now in existence or hereafter formed or acquired, that would be a "significant
subsidiary", as defined in Article 1, Rule 1-02 (w) of Regulation S-X
promulgated under the Securities Act (as such regulation is in effect on the
Date of Closing), of the Master Partnership.
"SUBJECT INVESTMENTS" shall mean the "Investments" defined in Section
9(c) of the Collateral Assignment of Deposit Accounts.
"TANGIBLE NET WORTH" shall mean, as to any Person or consolidated group
of Persons, as of any date, the total shareholders' equity (including capital
stock, additional paid in capital and retained earnings after deducting treasury
stock) which would appear on a consolidated balance sheet of such Person or
group of Persons prepared as of such date in accordance with GAAP, less the
aggregate book value of Intangible Assets shown on such balance sheet.
2. GUARANTY
2.1 GUARANTY. The Guarantor hereby irrevocably, absolutely and
unconditionally guarantees unto the Note Holders (a) the full and prompt payment
of the principal of, Yield-Maintenance Amount, if any, interest (including,
without limitation, interest accruing after the filing of any petition in
bankruptcy, or the commencement of any insolvency, reorganization or like
proceeding, whether or not a claim for post-filing or post-petition interest is
allowed in such proceeding) and all other amounts due with respect to the Notes
from time to time outstanding, as and when such amounts shall become due and
payable, whether by lapse of time, upon redemption, prepayment or purchase, by
extension or by acceleration or declaration or otherwise (including (to the
extent legally enforceable) interest due on overdue payments of principal,
Yield-Maintenance Amount, if any, or interest at the rate set forth in the Notes
or any other amounts due thereunder) in coin or currency of the United States of
America which at the time of payment or demand therefor shall be legal tender
for the payment of public and private debts, (b) the full and prompt payment,
performance and observance by the ESOP and any other Person (other than the Note
Holders or the Collateral Trustee) of all obligations, covenants, conditions and
agreements contained in any Note Document (including, without limitation, the
payment, performance and observance by the ESOP of its obligations under
paragraph 7 of the Note Agreement), and (c) the full and prompt payment, upon
demand by any Note Holder or the Collateral Trustee of all costs and expenses
(including reasonable attorneys' fees), if any, as shall have been expended or
incurred in the protection or enforcement of any right or privilege under the
Notes, the Note Agreement or any of the other Note Documents or in the
protection or enforcement of any rights, privileges or liabilities under this
Guaranty or in any consultation or action
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in connection therewith or herewith (all such obligations, covenants, conditions
and agreements described in the foregoing clauses (a), (b) and (c) being
hereinafter collectively referred to as the "OBLIGATIONS").
The Guarantor acknowledges that (i) from and after the Date of Closing,
the ESOP will continue to own 100% of the issued and outstanding capital stock
of the Guarantor, (ii) the ESOP exists for the benefit of the employees of the
Guarantor (together with certain other Persons), and the Guarantor will receive
material direct and indirect benefits from the financing arrangements
contemplated by the Note Documents and (iii) the agreements set forth in this
Guaranty are knowingly made in contemplation of such benefits.
2.2 GUARANTY OF PAYMENT AND PERFORMANCE. This is a guaranty of
payment and performance and not a guaranty of collection, and the Guarantor
hereby waives any right to require that any action on or in respect of any Note,
the Note Agreement or any other Note Document be brought against the ESOP or any
other Person or that resort be had to any direct or indirect security for the
Notes or for this Guaranty or any other remedy. Any Note Holder may, at its
option, proceed hereunder against the Guarantor in the first instance to collect
monies when due, the payment of which is guaranteed hereby, without first
proceeding against the ESOP or any other Person and without first resorting to
any direct or indirect security for the Notes, or for this Guaranty or any other
remedy. The liability of the Guarantor hereunder shall in no way be affected or
impaired by any acceptance by any Note Holder of any direct or indirect security
for, or other guaranties of, the Obligations or by any failure, delay, neglect
or omission by any Note Holder or the Collateral Trustee to realize upon or
protect any of the Obligations or any Notes or other instruments evidencing the
same or any direct or indirect security therefor or by any approval, consent,
waiver, or other action taken or omitted to be taken by any such Note Holder.
The Guarantor (a) acknowledges that certain Obligations of the ESOP under the
Note Agreement will survive the payment or transfer of any Note and the
termination of the Note Agreement, and (b) agrees that the guaranty obligations
of the Guarantor hereunder with respect to such surviving Obligations shall also
survive the payment or transfer of any Note and the termination of the Note
Agreement.
2.3 GENERAL PROVISIONS RELATING TO THE GUARANTY.
(a) The Guarantor hereby consents and agrees that any Note Holder
or Note Holders may from time to time, with or without any further notice to or
assent from the Guarantor and without in any manner affecting the liability of
the Guarantor under this Guaranty, and upon such terms and conditions as any
such Note Holder or Note Holders may deem advisable:
(i) extend in whole or in part (by renewal or otherwise),
modify, change, compromise, release or extend the duration of the time
for the payment or performance of any of the Obligations, or waive any
default with respect thereto, or waive, modify, amend or change any
provision of any Note Document; or
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(ii) sell, release, surrender, modify, impair, exchange or
substitute any and all property, of any nature and from whomsoever
received, held by, or for the benefit of, any such Note Holder as
direct or indirect security for the payment or performance of any the
Obligations; or
(iii) settle, adjust or compromise any claim of the ESOP
against any other Person secondarily or otherwise liable for any of the
Obligations.
The Guarantor hereby ratifies and confirms any such extension, renewal, change,
sale, release, waiver, surrender, exchange, modification, amendment, impairment,
substitution, settlement, adjustment or compromise and that the same shall be
binding upon it, and hereby waives any and all defenses, counterclaims or
offsets which it might or could have by reason thereof, it being understood that
the Guarantor shall at all times be bound by this Guaranty and remain liable
hereunder.
(b) The Guarantor hereby waives: (i) notice of acceptance of this
Guaranty by the Note Holders or of the creation, renewal or accrual of any
liability of the ESOP present or future, or of the reliance of such Note Holders
upon this Guaranty (it being understood that all Obligations shall conclusively
be presumed to have been created, contracted or incurred in reliance upon the
execution of this Guaranty); (ii) demand of payment by any Note Holder from the
ESOP or any other Person indebted in any manner on or for any of the Obligations
hereby guaranteed; and (iii) presentment for the payment by any Note Holder or
any other Person of the Notes or any other instrument, protest thereof and
notice of its dishonor to any party thereto and to the Guarantor. The
obligations of the Guarantor under this Guaranty and the rights of any Note
Holder to enforce such obligations by any proceedings, whether by action at law,
suit in equity or otherwise, shall not be subject to any reduction, limitation,
impairment or termination, whether by reason of any claim of any character
whatsoever or otherwise and shall not be subject to any defense, set-off,
counterclaim (other than any compulsory counterclaim), recoupment or termination
whatsoever.
(c) The obligations of the Guarantor hereunder shall be binding
upon the Guarantor and its successors and assigns, and shall remain in full
force and effect irrespective of:
(i) the genuineness, validity, regularity or
enforceability of the Notes, the Note Agreement, this Guaranty or any
of the other Note Documents, or any of the terms of any thereof, the
continuance of any obligation on the part of the ESOP, the ESOP Trustee
or any other Person on the Notes or under the Note Agreement or any
other Note Document, or the power or authority or the lack of power or
authority of the ESOP Trust to issue and sell the Notes pursuant to the
Note Agreement, to execute and deliver the Note Agreement or any other
Note Document, or to perform any of its obligations thereunder or the
existence or continuance of the ESOP Trust, the ESOP Trustee or any
other Person as a legal entity; or
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(ii) any default, failure or delay, willful or otherwise,
in the performance by the ESOP Trust, the ESOP Trustee or any other
Person of any obligations of any kind or character whatsoever of the
ESOP Trust, the ESOP Trustee or any other Person (including, without
limitation, the Obligations); or
(iii) any creditors' rights, bankruptcy, receivership or
other insolvency proceeding of the ESOP or any other Person or in
respect of the property of the ESOP, any other Person or any merger,
consolidation, reorganization, dissolution, liquidation, the sale of
all or substantially all of the assets of or winding up of the ESOP or
any other Person; or
(iv) impossibility or illegality of performance on the
part of the ESOP Trust, the ESOP Trustee or any other Person of its
obligations under the Notes, the Note Agreement, this Guaranty or any
other Note Document; or
(v) in respect of the ESOP, the ESOP Trustee or any other
Person, any change of circumstances, whether or not foreseen or
foreseeable, whether or not imputable to the ESOP, the ESOP Trustee or
any other Person, or other impossibility of performance through fire,
explosion, accident, labor disturbance, floods, droughts, embargoes,
wars (whether or not declared), civil commotion, acts of God or the
public enemy, delays or failure of suppliers or carriers, inability to
obtain materials, action of any Federal or state regulatory body or
agency, change of law or any other causes affecting performance, or any
other force majeure, whether or not beyond the control of the ESOP, the
ESOP Trustee or any other Person and whether or not of the kind
hereinbefore specified; or
(vi) any attachment, claim, demand, charge, lien, order,
process, encumbrance or any other happening or event or reason, similar
or dissimilar to the foregoing, or any withholding or diminution at the
source, by reason of any taxes, assessments, expenses, indebtedness,
obligations or liabilities of any character, foreseen or unforeseen,
and whether or not valid, incurred by or against any Person, or any
claims, demands, charges or liens of any nature, foreseen or
unforeseen, incurred by any Person, or against any sums payable under
this Guaranty, so that such sums would be rendered inadequate or would
be unavailable to make the payments herein provided; or
(vii) any order, judgment, decree, ruling or regulation
(whether or not valid) of any court of any nation or of any political
subdivision thereof or any body, agency, department, official or
administrative or regulatory agency of any thereof or any other action,
happening, event or reason whatsoever which shall delay, interfere
with, hinder or prevent, or in any way adversely affect, the payment or
performance by any party of any of the Obligations; or
(viii) any failure or lack of diligence in collection or
protection, failure in presentment or demand for payment, protest,
notice of protest, notice of default and of nonpayment, any failure to
give notice to the Guarantor of failure of the ESOP, the ESOP Trustee
or any other Person to keep and perform any of the
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Obligations, or failure to resort for payment to the ESOP or to any
other Person or to any other guaranty or to any property, security,
Liens or other rights or remedies; or
(ix) the acceptance of any additional security or other
guaranty, the advance of additional money to the ESOP or any other
Person, the renewal or extension of the Notes or amendments,
modifications, consents or waivers with respect to the Notes, the Note
Agreement or any other Note Document, or the sale, release,
substitution or exchange of any security for the Notes; or
(x) any defense whatsoever that the ESOP, the ESOP
Trustee or any other Person might have to the payment of the Notes
(principal, Yield-Maintenance Amount, if any, or interest or any other
amounts due thereunder), other than payment in cash thereof, or to the
payment, performance or observance of any of the other Obligations,
whether through the satisfaction or purported satisfaction by the ESOP,
the ESOP Trustee or any other Person of its debts due to any cause such
as bankruptcy, insolvency, receivership, merger, consolidation,
reorganization, dissolution, liquidation, winding-up or otherwise; or
(xi) any act or failure to act with regard to the Notes,
the Note Agreement, this Guaranty or any other Note Document, or
anything which might vary the risk of the Guarantor; or
(xii) any other circumstance (other than payment and
performance in full of the Obligations) which might otherwise
constitute a defense available to, or a discharge of, the Guarantor in
respect of its obligations under this Guaranty;
provided, that the specific enumeration of the above-mentioned acts, failures or
omissions shall not be deemed to exclude any other acts, failures or omissions,
though not specifically mentioned above, it being the purpose and intent of this
Guaranty that the obligations of the Guarantor shall be absolute and
unconditional and shall not be discharged, impaired or varied except by the full
and prompt payment and performance of all of the Obligations. Without limiting
the foregoing, it is understood that repeated and successive demands may be made
and recoveries may be had hereunder as and when, from time to time, the ESOP or
any other Person shall default under the terms of the Notes, the Note Agreement
or any other Note Document and that notwithstanding recovery hereunder for or in
respect of any given default or defaults by the ESOP or any other Person under
the Notes, the Note Agreement or any other Note Document, this Guaranty shall
remain in full force and effect and shall apply to each and every subsequent
default.
(d) All rights of any Note Holder may be transferred or assigned
at any time and shall be considered to be transferred or assigned at any time or
from time to time upon the transfer of such Note whether with or without the
consent of or notice to the Guarantor under this Guaranty or to the ESOP
Trustee.
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(e) The Guarantor hereby subordinates to the rights of the Note
Holders under the Notes, the Note Agreement and the other Note Documents and
agrees to defer any assertion, until such time as the Obligations have been
indefeasibly paid and performed in full, of any claim or other rights that it
may now or hereafter acquire against the ESOP or any other Person that arise
from the existence, payment, performance or enforcement of the Guarantor's
obligations under this Guaranty, including, without limitation, any right of
subrogation, reimbursement, exoneration, contribution or indemnification and any
right to participate in any claim or remedy of any Note Holder or Note Holders
against the ESOP or any other Person, whether or not such claim, remedy or right
arises in equity or under contract, statute or common law, including, without
limitation, the right to take or receive from the ESOP or any other Person,
directly or indirectly, in cash or other property or by set-off or in any other
manner, payment or security on account of such claim, remedy or right. If any
amount shall be paid to the Guarantor in violation of the preceding sentence at
any time prior to the payment and performance in full of all the Obligations,
such amount shall be held in trust for the benefit of the Note Holders and shall
forthwith be paid to the Note Holders to be credited and applied to the
Obligations, whether matured or unmatured.
(f) The Guarantor agrees that to the extent the ESOP or any other
Person makes any payment on any Note or in respect of any of the other
Obligations, which payment or any part thereof is subsequently invalidated,
voided, declared to be fraudulent or preferential, set aside, recovered,
rescinded or is required to be retained by or repaid to a trustee, receiver, or
any other Person under any bankruptcy code, common law, or equitable cause, then
and to the extent of such payment, the obligation or the part thereof intended
to be satisfied shall be revived and continued in full force and effect with
respect to the Guarantor's obligations hereunder, as if said payment had not
been made. The liability of the Guarantor hereunder shall not be reduced or
discharged, in whole or in part, by any payment to any Note Holder from any
source that is thereafter paid, returned or refunded in whole or in part by
reason of the assertion of a claim of any kind relating thereto, including, but
not limited to, any claim for breach of contract, breach of warranty,
preference, illegality, invalidity, or fraud asserted by any account debtor or
by any other Person.
(g) Neither the Note Holders nor the Collateral Trustee shall be
under any obligation (i) to xxxxxxxx any assets in favor of the Guarantor or in
payment of any or all of the Obligations or (ii) to pursue any other remedy that
the Guarantor may or may not be able to pursue itself and that may lighten the
Guarantor's burden, any right to which the Guarantor hereby expressly waives.
3. REPRESENTATIONS AND WARRANTIES
The Guarantor represents and warrants as follows:
3.1 ORGANIZATION. The Guarantor is a corporation duly organized
and validly existing in good standing under the laws of the Commonwealth of
Pennsylvania. The execution, delivery and performance by the Guarantor of this
Guaranty, the other Initial
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Note Documents to which it is a party and the ESOP Documents to which it is a
party are within the Guarantor's corporate powers and have been duly authorized
by all necessary corporate action.
3.2 CAPITALIZATION AND SHARE OWNERSHIP. The Guarantor's authorized
capital stock consists of 2,573,146 shares of common stock, par value $0.01 per
share, of which 2,412,533 shares are outstanding as of the date of this
Guaranty, which shares are owned by the ESOP. Each outstanding share of capital
stock of the Guarantor has been duly authorized and validly issued, is fully
paid and nonassessable, was not issued in violation of the terms of any contract
or agreement binding upon the Guarantor, and was issued in compliance with all
applicable charter documents of the Guarantor. No other equity securities of the
Guarantor are issued or outstanding. There are, and have been, no preemptive
rights with respect to the issuance of the capital stock of the Guarantor.
Except for the ESOP Plan, there are no existing contracts, agreements,
subscriptions, options, warrants, calls, commitments or rights of any character
to purchase or otherwise acquire from the Guarantor at any time any capital
stock or other securities of the Guarantor, whether or not presently issued or
outstanding, at any time, or upon the happening of any stated event. There are
no outstanding securities of the Guarantor that are convertible into or
exchangeable for capital shares or other securities of the Guarantor.
3.3 SUBSIDIARIES; OWNERSHIP INTERESTS. Except for its ownership of
LP Units (of which the Guarantor owns 2,412,533 as of the date of this
Guaranty), the Guarantor has and will have no subsidiaries or stock or ownership
interest (whether controlling or not) in any Person. The Guarantor owns of
record and beneficially all such LP Units free and clear of any Liens other than
Liens arising under the Security Documents.
3.4 ACTIONS PENDING. There is no action, suit, investigation or
proceeding pending or, to the knowledge of the Guarantor, threatened against the
Guarantor, the Master Partnership, any of the Operating Companies or any of the
properties or rights of any such Persons by or before any court, arbitrator or
administrative or governmental body which could reasonably be expected to have a
Material Adverse Effect. There is no action, suit, investigation or proceeding
pending or, to the knowledge of the Guarantor, threatened against the Guarantor
which purports to affect the validity or enforceability of, or seeks to enjoin
or otherwise affect the consummation of any transaction contemplated by, the
Note Agreement, any Note, any other Note Document or any ESOP Document.
3.5 OUTSTANDING DEBT. Upon the issuance of the Notes and
application of the proceeds thereof as provided in the Note Agreement, the
Guarantor will have no outstanding Debt other than its guaranty obligations
under this Guaranty.
3.6 TITLE TO PROPERTIES. The Guarantor has good title to all of
its properties and assets, subject to no Lien of any kind except Liens permitted
by Section 5.1 of this Guaranty.
3.7 TAXES. Each of the Guarantor, the Master Partnership and the
Operating Companies has filed all Federal, state and other income tax returns
which, to the
11
knowledge of the officers of the Guarantor, are required to be filed, and has
paid or caused to be paid all Taxes as shown on such returns and on all
assessments received by it to the extent that such Taxes have become due, except
such Taxes as are being contested in good faith by appropriate proceedings and
for which adequate reserves have been established in accordance with GAAP.
3.8 CONFLICTING AGREEMENTS AND OTHER MATTERS. Neither the
Guarantor, the Master Partnership nor any of the Operating Companies is a party
to any contract or agreement or subject to any charter or other corporate
restriction which could reasonably be expected to have a Material Adverse
Effect. Neither the execution nor the delivery of this Guaranty, the Note
Agreement, the Notes, the other Note Documents, nor fulfillment of nor
compliance with the terms and provisions of this Guaranty, the Note Agreement,
the Notes, the other Initial Note Documents or the ESOP Documents will conflict
with, or result in a breach of the terms, conditions or provisions of, or
constitute a default under, or result in any violation of, or result in the
creation of any Lien upon any of the properties or assets of the Guarantor, the
Master Partnership or any of the Operating Companies pursuant to, the charter or
bylaws of the Guarantor, any partnership agreement or limited liability company
operating agreement governing the Master Partnership or any Operating Company,
any award of any arbitrator or any agreement (including any partnership
agreement and any agreement with stockholders), instrument, order, judgment,
decree, statute, law, rule or regulation to which any of the Guarantor, the
Master Partnership, or any Operating Company is subject. The Guarantor is not a
party to, or otherwise subject to any provision contained in, any instrument,
contract or agreement (including its charter) which limits the amount of, or
otherwise imposes restrictions on the providing of, Guarantees. Neither the
Guarantor, the Master Partnership nor any Operating Company is in default in the
payment, performance or observance of any contract, agreement or other
instrument to which it is a party or by which it or its properties or assets may
be bound, which individually or together with all other such defaults could
reasonably be expected to have a Material Adverse Effect or materially impair
the ability of the Guarantor to perform or observe the provisions of the Note
Documents or the ESOP Documents.
3.9 ERISA. No accumulated funding deficiency (as defined in
section 302 of ERISA and section 412 of the Code), whether or not waived, exists
with respect to any Plan. No liability to the PBGC or any Plan has been or is
expected by the Guarantor or any ERISA Affiliate of the Guarantor to be incurred
with respect to any Plan by the Guarantor or any ERISA Affiliate of the
Guarantor which has or could reasonably be expected to have a Material Adverse
Effect. Neither the Guarantor nor any of its ERISA Affiliates have incurred or
presently expect to incur any withdrawal liability under Title IV of ERISA with
respect to any Multiemployer Plan which has or could reasonably be expected to
have a Material Adverse Effect. The execution and delivery of this Guaranty, the
Note Agreement and the other Note Documents and the issuance and sale of the
Notes and the other transactions contemplated hereby and thereby will be exempt
from, or will not involve any transaction which is subject to, the prohibitions
of section 406 of ERISA and will not involve any transaction in connection with
which a penalty could be imposed under section 502(i) of ERISA or a tax could be
imposed pursuant to section 4975 of the Code.
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3.10 GOVERNMENTAL CONSENT. Neither the nature of the Guarantor, nor
any of its businesses or properties, nor any relationship between the Guarantor
and any other Person, nor any circumstance in connection with the issuance and
sale of the Notes is such as to require any authorization, consent, approval,
exemption or other action by or notice to or filing with (other than those
already obtained, performed or made prior to the date hereof) any court or
administrative or governmental or regulatory body in connection with the
execution and delivery of this Guaranty and the other Initial Note Documents and
the issuance and sale of the Notes or fulfillment of or compliance with the
terms and provisions hereof or thereof, other than (a) filings to perfect the
Liens created under the Security Documents, (b) routine filings after the Date
of Closing with the Securities and Exchange Commission and/or state Blue Sky
authorities and (c) filings with the Securities and Exchange Commission to
maintain the registration of the LP Units.
3.11 DISCLOSURE. Neither this Guaranty, the other Initial Note
Documents nor any other document, certificate or statement furnished to the
Purchasers by or on behalf of the Guarantor in connection herewith or therewith
contains any untrue statement of a material fact or omits to state a material
fact necessary in order to make the statements contained herein and therein not
misleading. There is no fact peculiar to the Guarantor, the Master Partnership
or any of the Operating Companies which has or in the future may (so far as the
Guarantor can now foresee) have a Material Adverse Effect and which has not been
set forth in this Guaranty or the other Initial Note Documents.
3.12 ESOP. The ESOP Plan is an employee stock ownership plan within
the meaning of section 4975(e)(7) of the Code and is qualified under section
401(a) of the Code. The ESOP Trust has been duly constituted in accordance with
a valid and binding trust instrument, is validly existing, is qualified under
section 401(a) of the Code and is tax-exempt under section 501(a) of the Code. A
determination letter to the effect that the ESOP Plan meets the requirements for
qualification under sections 401(a) and 4975(e)(7) of the Code and that the ESOP
Trust meets the requirements for tax exemption under section 501(a) of the Code
has been received from the IRS. Prior to the date hereof, the Guarantor and the
ESOP have done or caused to be done all things necessary in order that in both
form and operation the ESOP Plan meets the requirements for qualification under
sections 401(a) and 4975(e)(7) of the Code and that the ESOP Trust meets the
requirements for tax exemption under section 501(a) of the Code. The ESOP has
the requisite power and authority to own its properties and assets. The
execution, delivery and performance of the Note Agreement, the other Note
Documents, the ESOP Documents and issuance and sale of the Notes by the parties
thereto will not constitute a violation of, or give rise to any liability under,
Title I of ERISA or section 4975 of the Code, due to the exemption applicable
under section 4975(d)(3) of the Code.
3.13 INVESTMENT COMPANY ACT. The Guarantor is not an "investment
company" or a company controlled by an "investment company" within the meaning
of the Investment Company Act of 1940, as amended.
3.14 PUBLIC UTILITY HOLDING COMPANY ACT. The Guarantor is not a
"holding company," a "subsidiary company" of a "holding company," an "affiliate"
of a "holding
13
company" or a "subsidiary company" of a "holding company," as such terms are
defined in the Public Utility Holding Company Act of 1935, as amended.
3.15 SOLVENCY. The Guarantor is Solvent, both before and after
giving effect to this Guaranty, the Note Agreement, the other Note Documents,
the ESOP Documents and the transactions contemplated hereby and thereby.
3.16 ENVIRONMENTAL COMPLIANCE. Each of the Guarantor, the Master
Partnership and the Operating Companies and all of their respective properties
and facilities have complied at all times and in all respects with all Federal,
state and local statutes, laws, ordinances and judicial or administrative
orders, judgments, rulings and regulations relating to protection of the
environment except, in any such case, where failure to comply could not
reasonably be expected to result in a Material Adverse Effect.
3.17 NO DEFAULT; ETC. There exists on the date hereof no default
under any Material Debt of the Guarantor, the Master Partnership, or any of the
Operating Companies, and each of the Guarantor, the Master Partnership and the
Operating Companies is in compliance with all of its covenants and undertakings
set forth in the documents and instruments governing or evidencing such Material
Debt. Since December 31, 2003, there has been no material adverse change in the
business or condition, financial or otherwise, of the Guarantor, the Master
Partnership, or any of the Operating Companies or any condition, event or act
which could materially adversely affect the ability of any such Person to
perform its obligations in respect of any Material Debt or any documents and
instruments governing or evidencing such Material Debt.
3.18 FOREIGN ASSETS CONTROL REGULATIONS, ETC.
(a) The execution, delivery and performance of this Guaranty will
not violate the Trading with the Enemy Act, as amended, or any of the foreign
assets control regulations of the United States Treasury Department (31 CFR,
Subtitle B, Chapter V, as amended) or any enabling legislation or executive
order relating thereto.
(b) The Guarantor is not and will not (i) become a Person
described or designated in the Specially Designated Nationals and Blocked
Persons List of the Office of Foreign Assets Control or in Section 1 of the
Anti-Terrorism Order or (ii) engage in any dealings or transactions, or
otherwise be associated, with any such Person. The Guarantor is in compliance
with the USA Patriot Act.
3.19 ESOP ANALYSIS. The written analysis captioned "Buckeye Pipe
Line Services Company Estimate of Annual Financial Implications Based on a $63
Million 15-Year Loan" furnished to the Purchasers on April 19, 2004 has not been
amended, supplemented or otherwise modified since its original date of
preparation, and there has been no change in the business of the Guarantor, the
GP Entities, the Master Partnership or the Operating Companies that materially
adversely affects the information and conclusions set forth in such written
analysis.
4. AFFIRMATIVE COVENANTS
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So long as any Note shall remain unpaid, the Guarantor covenants that:
4.1 FINANCIAL STATEMENTS AND OTHER ITEMS TO BE DELIVERED. The
Guarantor will deliver to each Significant Holder in duplicate (except for the
financial statements specified in clause (b) below, which shall be delivered to
each Significant Holder in triplicate):
(a) as soon as practicable and in any event within 45
days after the end of each quarterly period (other than the last
quarterly period) in each fiscal year, statements of income,
stockholders' equity and cash flows of the Guarantor for the period
from the beginning of the current fiscal year to the end of such
quarterly period, and a balance sheet of the Guarantor as at the end of
such quarterly period, setting forth in each case in comparative form
figures for the corresponding period in the preceding fiscal year, all
in reasonable detail and satisfactory in form to the Required Holder(s)
and certified by an authorized financial officer of the Guarantor,
subject to changes resulting from year-end adjustments;
(b) as soon as practicable and in any event within 90
days after the end of each fiscal year, statements of income,
stockholders' equity and cash flows of the Guarantor for such year, and
a balance sheet of the Guarantor as at the end of such year, setting
forth in each case in comparative form corresponding figures from the
preceding annual audit, all in reasonable detail and satisfactory in
form to the Required Holder(s) and reported on by independent public
accountants of recognized national standing selected by the Guarantor,
whose report shall be without limitation as to the scope of the audit
and satisfactory in substance to the Required Holder(s);
(c) promptly upon receipt thereof, a copy of each other
report submitted to the Guarantor by independent accountants in
connection with any annual, interim or special audit made by them of
the books of any of such Persons; and
(d) as soon as practicable and in any event within ten
days after any Responsible Officer of the Guarantor obtains knowledge
(i) of any condition or event which, in the opinion of management of
the Guarantor, could reasonably be expected to have a Material Adverse
Effect, other than conditions or events that are not particular to the
Guarantor, such as conditions or events generally affecting the economy
or the industries in which the Guarantor is engaged (provided, that
such conditions or events do not affect the Guarantor to a materially
greater extent than others in the industries in which the Guarantor is
engaged); (ii) that any Person has given any notice to the Guarantor or
taken any other action with respect to a claimed default or event or
condition of the type referred to in Section 6.1; (iii) of the
institution of any litigation involving claims against the Guarantor
equal to or greater than $250,000 with respect to any single cause of
action or of any adverse determination in any court proceeding in any
litigation involving a potential liability to the Guarantor equal to or
greater than $250,000 with respect to any single cause of action which
makes the likelihood of
15
an adverse determination in such litigation against the Guarantor
substantially more probable; or (iv) of any regulatory proceeding in
which the Guarantor is a party or otherwise subject which could
reasonably be expected to have a Material Adverse Effect, an Officer's
Certificate specifying the nature and period of existence of any such
condition or event, or specifying the notice given or action taken by
the Guarantor and the nature of any such claimed default, event or
condition, or specifying the details of such proceeding, litigation or
dispute and what action the Guarantor has taken, is taking or proposes
to take with respect thereto;
(e) promptly after the filing or receiving thereof,
copies of all material reports and notices which the Guarantor files
under ERISA with the IRS or the PBGC or the U.S. Department of Labor or
which the Guarantor receives from any of the foregoing entities;
(f) promptly, and in any event within ten days after a
Responsible Officer of the Guarantor becomes aware of any of the
following, an Officer's Certificate setting forth the nature thereof
and the action, if any, that the Guarantor or an ERISA Affiliate
proposes to take with respect thereto: (i) with respect to any Plan,
any reportable event, as defined in section 4043 of ERISA and the
regulations thereunder, for which notice thereof has not been waived
pursuant to such regulations as in effect on the date hereof; or (ii)
the taking by the PBGC of steps to institute, or the threatening by the
PBGC of the institution of, proceedings under section 4042 of ERISA for
the termination of, or the appointment of a trustee to administer, any
Plan, or the receipt by the Guarantor or an ERISA Affiliate of a notice
from a Multiemployer Plan that such action has been taken by the PBGC
with respect to such Multiemployer Plan; or (iii) any event,
transaction or condition that could result in the incurrence of any
liability by the Guarantor or an ERISA Affiliate pursuant to Title I or
IV of ERISA or the penalty or excise tax provisions of the Code
relating to employee benefit plans, or in the imposition of any Lien on
any of the rights, properties or assets of the Guarantor or an ERISA
Affiliate pursuant to Title I or IV of ERISA or such penalty or excise
tax provisions, if such liability or Lien, taken together with any
other such liabilities or Liens then existing, could reasonably be
expected to have a Material Adverse Effect;
(g) promptly upon their becoming available, copies of all
other material reports furnished by the ESOP or the ESOP Trustee to the
Guarantor in connection with the ESOP;
(h) promptly upon renewal each year of each policy of
insurance required to be maintained pursuant to Section 4.12, a
certificate of insurance for such policy of insurance and, unless
evidenced by the terms of such certificate, separate evidence of
payment of all premiums therefor;
16
(i) promptly upon receipt thereof, copies of all
financial statements, reports and other information provided to the
Guarantor by any of the GP Entities pursuant to the Intercreditor
Agreement or the Reimbursement Security Agreements; and
(j) with reasonable promptness, such other information
respecting the condition or operations, financial or otherwise, of the
Guarantor as any Significant Holder may reasonably request.
Together with each delivery of financial statements required by clauses (a) and
(b) above, the Guarantor will deliver to each Significant Holder an Officer's
Certificate stating that there exists no Event of Default or Default, or, if any
Event of Default or Default exists, specifying the nature and period of
existence thereof and what action the Guarantor proposes to take with respect
thereto. Together with each delivery of annual financial statements required by
clause (b) above, the Guarantor will deliver to each Significant Holder a
certificate of such accountants stating that, in making the audit necessary for
their report on such financial statements, they have obtained no knowledge of
any Event of Default or Default, or, if they have obtained knowledge of any
Event of Default or Default, specifying the nature and period of existence
thereof. Such accountants, however, shall not be liable to anyone by reason of
their failure to obtain knowledge of any Event of Default or Default which would
not be disclosed in the course of an audit conducted in accordance with
generally accepted auditing standards.
The Guarantor also covenants that immediately after any Responsible
Officer of the Guarantor obtains knowledge of an Event of Default or Default, it
will deliver to each Significant Holder an Officer's Certificate specifying the
nature and period of existence thereof and what action the Guarantor proposes to
take with respect thereto.
4.2 INSPECTION OF RECORDS. The Guarantor will permit any agent of
or advisor to any Significant Holder in writing, at such Significant Holder's
expense (or, after the occurrence and during the continuance of an Event of
Default, at the Guarantor's expense), to examine the corporate books and
financial records of the Guarantor and make copies thereof or extracts therefrom
and to discuss the affairs, finances and accounts of the corporation with the
principal officers of the Guarantor and their independent public accountants,
all upon reasonable advance notice and at such reasonable times and as often as
such Significant Holder may reasonably request.
4.3 COMPLIANCE WITH LAW. The Guarantor will comply with all laws,
ordinances or governmental rules or regulations to which the Guarantor is
subject, and will obtain and maintain in effect all licenses, certificates,
permits, franchises and other governmental authorizations necessary to the
ownership of their respective properties or to the conduct of their respective
businesses, in each case to the extent necessary to ensure that noncompliance
with such laws, ordinances or governmental rules or regulations or failures to
obtain or maintain in effect such licenses, certificates, permits, franchises
and other governmental authorizations could not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect.
17
4.4 PAYMENT OF TAXES AND CLAIMS. The Guarantor will file all tax
returns required to be filed in any jurisdiction and to pay and discharge (or
cause to be paid and discharged) all Taxes shown to be due and payable on such
returns and all other Taxes imposed on the Guarantor or any of its properties,
assets, income or franchises, to the extent such Taxes have become due and
payable and before they have become delinquent and all claims for which sums
have become due and payable that have or might become a Lien on properties or
assets of the Guarantor, provided that the Guarantor need not pay any such Taxes
or claims if (a) the amount, applicability or validity thereof is contested by
the Guarantor on a timely basis in good faith and in appropriate proceedings,
and the Guarantor has established adequate reserves therefor in accordance with
GAAP on its books or (b) the nonpayment of all such Taxes and claims in the
aggregate could not reasonably be expected to have a Material Adverse Effect.
4.5 CORPORATE EXISTENCE, ETC. The Guarantor will preserve and keep
in full force and effect its corporate existence and all its rights and
franchises, except in the case of such rights and franchises where the failure
to do so could not, individually or in the aggregate, reasonably be expected to
have a Material Adverse Effect. Unless severely adverse business conditions
develop, the Guarantor will do all things necessary to ensure that the size of
its work force does not materially decrease in a manner that would inhibit the
allocation of shares of the common stock of the Guarantor to the ESOP's
participants under the ESOP Plan.
4.6 ESOP EXISTENCE. The Guarantor will do all things necessary to
maintain and keep in full force and effect the ESOP.
4.7 ACCOUNTS SUBJECT TO COLLATERAL ASSIGNMENT OF DEPOSIT ACCOUNTS.
The Guarantor shall establish and maintain at all times the "Services Company
Disbursement Account", the "Services Company Operating Account", the "Services
Company Payroll Account" and the "Services Company Reserve Account" described in
the Collateral Assignment of Deposit Accounts, each of which (other than the
"Services Company Payroll Account") shall be under the sole dominion and control
of the Collateral Trustee and each of which shall be a cash collateral account
in which the Collateral Trustee has at all times a first priority perfected
security interest under the Collateral Assignment of Deposit Accounts. Deposits
into and withdrawals from each such account shall be made in strict accordance
with the terms and conditions of the Collateral Assignment of Deposit Accounts.
4.8 COVENANT TO SECURE NOTES EQUALLY. The Guarantor will, if it
shall create or assume any Lien upon any of its property or assets, whether now
owned or hereafter acquired, other than Liens permitted by the provisions of
Section 5.1 (unless prior written consent to the creation or assumption thereof
shall have been obtained pursuant to Section 7.3), make or cause to be made
effective provision whereby the Notes will be secured by such Lien equally and
ratably with any and all other Debt thereby secured so long as any such other
Debt shall be thereby secured.
4.9 EMPLOYER CONTRIBUTIONS TO THE ESOP. The Guarantor will make or
cause to be made employer contributions to the ESOP on behalf of eligible
employees of
18
the Guarantor at such times and in such amounts as are required to assure that
such contributions, together with, as applicable, (a) dividends paid to the ESOP
by the Guarantor in respect of any common stock of the Guarantor pledged by the
ESOP to secure the Notes and (b) employer contributions made by the Guarantor to
the ESOP on behalf of eligible employees of the Guarantor will be sufficient for
the full and timely payment of (i) the principal of and interest and
Yield-Maintenance Amount, if any, on the Notes and (ii) all reasonable
administrative charges and expenses of the ESOP.
4.10 PAYMENTS UNDER COLLATERAL ASSIGNMENT OF DEPOSIT ACCOUNTS. The
Guarantor will make each of the payments required to be made by it under the
Collateral Assignment of Deposit Accounts either (a) on the date such payment is
due or (b) on the Business Day immediately preceding the date such payment is
due.
4.11 SERVICES AGREEMENT. The Guarantor shall perform or comply in
all material respects with all obligations required to be performed or complied
with by it under the Services Agreement.
4.12 INSURANCE. The Guarantor will maintain, with financially sound
and reputable insurers, insurance with respect to its properties and businesses
against such casualties and contingencies, of such types, on such terms and in
such amounts (including deductibles, coinsurance and self-insurance, if adequate
reserves are maintained with respect thereto) as is customary in the case of
entities of established reputations engaged in the same or a similar business
and similarly situated. The Collateral Trustee shall be named as an additional
insured and as loss payee on each insurance policy obtained or maintained by the
Guarantor with respect to its properties and businesses.
4.13 COLLATERAL COVERAGE RATIO. If at any time the Collateral
Coverage Ratio is less than 1.25 to 1.00, the Guarantor shall within one
Business Day thereafter transfer funds to the Services Company Reserve Account
in an amount sufficient to cause the Collateral Coverage Ratio to be equal to or
greater than 1.25 to 1.00 after giving effect to such transfer.
5. NEGATIVE COVENANTS
So long as any Note shall remain unpaid, the Guarantor covenants that:
5.1 LIMITATION ON LIENS. The Guarantor will not create, assume or
suffer to exist any Lien upon any of its properties or assets, whether now owned
or hereafter acquired; provided, however, that the foregoing restriction and
limitation shall not apply to the following Liens:
(a) Liens securing the Notes and the payment, performance
and observance of the other obligations under the Note Agreement, this
Guaranty and the other Note Documents; and
(b) Liens for Taxes not yet delinquent or which are being
contested in good faith by appropriate proceedings.
19
5.2 LIMITATION ON DEBT. The Guarantor will not incur, create,
assume, guarantee or in any other manner become liable with respect to, or
become responsible for the payment of, any Debt; provided, however, that the
foregoing restriction and limitation shall not apply to the following:
(a) Debt consisting of the guaranty obligations of the
Guarantor under this Guaranty; and
(b) Debt consisting of unsecured subordinated promissory
notes, each with a term of less than five years, issued by the
Guarantor to the ESOP in the event the Guarantor, because a Default or
Event of Default has occurred and is continuing, is prohibited from
making Restricted Payments in the form described in Section 5.3(c);
provided, that (i) the aggregate principal amount of Debt evidenced by
such promissory notes shall at no time exceed $3,500,000 and (ii) the
terms and conditions of such notes shall in all respects be reasonably
satisfactory to the Required Holder(s).
5.3 LIMITATION ON RESTRICTED PAYMENTS. The Guarantor will not,
directly or indirectly, make any Restricted Payments; provided, however, that
the foregoing restriction and limitation shall not apply to the following:
(a) Restricted Payments in the form of cash dividends and
other distributions made by the Guarantor to the ESOP in respect of the
capital stock of the Guarantor; provided, that any such cash dividends
and other distributions in respect of the Services Company Stock (as
such term is defined in the Collateral Trust Agreement) shall be used
by the ESOP solely to immediately thereafter make payments of (i)
principal, interest and Yield-Maintenance Amount, if any, due to the
Note Holders and (ii) the reasonable administrative charges and
expenses of the ESOP;
(b) Restricted Payments in the form of employer
contributions to the ESOP on behalf of eligible employees of the
Guarantor; provided, that such Restricted Payments shall be used by the
ESOP solely to immediately thereafter make payments of (i) principal,
interest and Yield-Maintenance Amount, if any due to the Note Holders
and (ii) the reasonable administrative charges and expenses of the
ESOP;
(c) Restricted Payments in the form of mandatory
redemptions or repurchases by the Guarantor of the Guarantor's common
stock, as and to the extent required by the ESOP Documents, upon the
earliest of the death, disability, retirement, or resignation or
termination of employment of participants in the ESOP or, in the case
of redemptions or repurchases on or after March 22, 2006, to satisfy
the diversification requirements of ERISA.
5.4 LIMITATION ON INVESTMENTS. The Guarantor will not (x) loan,
advance or otherwise extend credit to, or contribute capital to, any Person,
including, without
20
limitation, loan, advance or otherwise extend credit to any officer, director or
employee of the Guarantor or purchase any Debt or accounts receivable from any
Person or (y) purchase or commit to purchase any stocks, bonds, notes,
debentures or other securities of, evidences of contractual obligations of, or
partnership or joint venture or any other interests in, or all or substantially
all of the assets or any assets constituting a business unit of, or make any
other investment in any Person (all of the foregoing items in clauses (x) and
(y) being collectively referred to as "INVESTMENTS"); provided, however, that
the foregoing restriction and limitation shall not apply to the following:
(a) Permitted Investments; and
(b) the Guarantor's ownership of the LP Units presently
owned by it from and after the Date of Closing.
5.5 CONSOLIDATION, MERGER, SALE OR CONVEYANCE. The Guarantor will
not, directly or indirectly, merge or consolidate with any other Person or sell,
convey or otherwise dispose of all or substantially all of its assets to any
Person.
5.6 PROHIBITION AGAINST ESOP MERGER. The Guarantor will not,
directly or indirectly, permit the ESOP to be merged with or into or
consolidated with any Plan or any Person.
5.7 LIMITATION ON SALE OR LEASE OF ASSETS. The Guarantor will not,
directly or indirectly, sell, lease, transfer or otherwise dispose of any of its
assets, except (a) sales of LP Units for fair market value in order to fund
redemptions or repurchases of common stock of the Guarantor, as and to the
extent required by the ESOP Documents, upon the earliest of the death,
disability, retirement or resignation or termination of employment of ESOP
participants or, in the case of redemptions or repurchases on or after March 22,
2006, to satisfy the diversification requirements of ERISA, provided, in either
case, that no Default or Event of Default shall have occurred and be continuing
at the time any such sale is made or proposed to be made, both before and after
giving effect to such sale; and (b) as otherwise specifically contemplated by
the Note Documents and the ESOP Documents.
5.8 PROHIBITION AGAINST SALE AND LEASEBACK TRANSACTIONS. The
Guarantor will not, directly or indirectly, enter into any Sale and Leaseback
Transaction.
5.9 LIMITATION ON TRANSACTIONS WITH AFFILIATES. Except as
specifically contemplated by the Note Documents, the ESOP Documents, the
Exchange Agreement, the Services Agreement, the Reimbursement Security
Agreements and the Intercreditor Agreement, the Guarantor will not, directly or
indirectly, enter into or suffer to exist any transaction (including, without
limitation, the lease, purchase, sale or exchange of property or the rendering
of service) with any of its Affiliates or the ESOP Trustee or with any of the GP
Entities unless the terms of such transaction are no less favorable to the
Guarantor than could be obtained in a comparable arm's length transaction with a
Person that is not an Affiliate of the Guarantor.
21
5.10 LIMITATION ON ISSUANCES OF CAPITAL STOCK. The Guarantor will
not issue any capital stock other than the common stock of the Guarantor issued
and outstanding as of the Date of Closing and common stock issued as a result of
a stock split, stock dividend or similar transaction.
5.11 LIMITATION ON MODIFICATION OR TERMINATION OF CERTAIN
DOCUMENTS. Without the express prior written consent of the Required Holder(s),
the Guarantor will not amend, modify, change or terminate, or consent or agree
to any amendment, modification, change to or termination of, any of the terms of
any of the ESOP Documents, the Services Agreement, the Reimbursement Security
Agreements or the Intercreditor Agreement. Without the express prior written
consent of the Required Holder(s), the Guarantor will not amend, modify or
change in a manner which is adverse to the interests of the holders of the Notes
or in any other material respect, or consent or agree to any material amendment,
modification or change, or any amendment, modification or change which is
adverse to the interests of the holders of the Notes, to any of the terms of the
articles of incorporation, bylaws or other corporate organizational or
governance documents of the Guarantor. Promptly after the execution and delivery
of any amendment, modification or change to any document described above, the
Guarantor will provide a copy thereof to each Significant Holder.
5.12 CHANGE OF BUSINESS. The Guarantor will not change in any
material respect the nature of its business or operations from that contemplated
by and permitted under the Note Documents and ESOP Documents.
5.13 LIMITATION ON CERTAIN RESTRICTIVE AGREEMENTS. The Guarantor
will not enter into or suffer to exist any contractual obligation, other than
this Guaranty and the other Note Documents, which in any way restricts the
ability of the Guarantor to (a) create, incur, assume or suffer to exist any
Lien upon any of its property, assets or revenues or (b) make any dividends,
distributions or other payments required under this Guaranty or any other Note
Document.
6. EVENTS OF DEFAULT; REMEDIES
6.1 EVENTS OF DEFAULT. The occurrence of any of the following
events shall constitute an "EVENT OF DEFAULT" under this Guaranty:
(a) the Guarantor fails to pay to the Note Holders as and
when due any and all amounts payable by the Guarantor to the Note
Holders under this Guaranty or any other Note Document to which the
Guarantor is a party;
(b) any representation or warranty made by the Guarantor
herein or by the Guarantor or any of its officers in any writing
furnished in connection with or pursuant to this Guaranty, the Note
Agreement, the other Note Documents or the ESOP Documents shall be
false in any material respect on the date as of which made;
22
(c) the Guarantor fails to perform or observe any term,
covenant or agreement contained in Section 4.2, 4.6, 4.7, 4.8, 4.9,
4.10, 4.11, 4.13 or 5;
(d) the Guarantor fails to perform or observe any other
agreement, covenant, term or condition contained herein or in any of
the other Note Documents to which it is a party and such failure shall
not be remedied within 30 days after any Responsible Officer obtains
actual knowledge thereof;
(e) an "Event of Default," as such term is defined in the
Note Agreement, shall occur and be continuing under the Note Agreement;
(f) the Guarantor, any of the GP Entities, the Master
Partnership or any Significant Operating Company makes an assignment
for the benefit of creditors or is generally not paying its debts as
such debts become due;
(g) any decree or order for relief in respect of the
Guarantor, any of the GP Entities, the Master Partnership or any
Significant Operating Company is entered under any bankruptcy,
reorganization, compromise, arrangement, insolvency, readjustment of
debt, dissolution or liquidation or similar law, whether now or
hereafter in effect (the "BANKRUPTCY LAW"), of any jurisdiction;
(h) the Guarantor, any of the GP Entities, the Master
Partnership or any Significant Operating Company petitions or applies
to any tribunal for, or consents to, the appointment of, or taking
possession by, a trustee, receiver, custodian, liquidator or similar
official of the Guarantor, any of the GP Entities, the Master
Partnership or any Significant Operating Company or of any substantial
part of the assets of the Guarantor, any of the GP Entities, the Master
Partnership or any Significant Operating Company, or commences a
voluntary case under the Bankruptcy Law of the United States or any
proceedings relating to the Guarantor, any of the GP Entities, the
Master Partnership or any Significant Operating Company under the
Bankruptcy Law of any other jurisdiction;
(i) any such petition or application is filed, or any
such proceedings are commenced, against the Guarantor, any of the GP
Entities, the Master Partnership or any Significant Operating Company
and such Person by any act indicates its approval thereof, consent
thereto or acquiescence therein, or an order, judgment or decree is
entered appointing any such trustee, receiver, custodian, liquidator or
similar official, or approving the petition in any such proceedings,
and such order, judgment or decree remains unstayed and in effect for
more than 30 days;
(j) any order, judgment or decree is entered in any
proceedings against the Guarantor, the Manager, the Master Partnership
or any Significant Operating Company decreeing the dissolution of such
Person and such order, judgment or decree remains unstayed and in
effect for more than 60 days;
(k) any judgment or order, or series of judgments or
orders, in an amount in excess of $250,000 is rendered against the
Guarantor, or any judgment
23
or order, or series of judgments or orders, is rendered against the
Guarantor, the Master Partnership or any Operating Company which could
reasonably be expected to have a Material Adverse Effect, and either
(i) enforcement proceedings have been commenced by any creditor upon
such judgment or order or (ii) within 60 days after entry thereof, such
judgment is not discharged or execution thereof stayed pending appeal,
or within 60 days after the expiration of any such stay, such judgment
is not discharged;
(l) (i) any Plan shall fail to satisfy the minimum
funding standards of ERISA or the Code for any plan year or part
thereof or a waiver of such standards or extension of any amortization
period is sought or granted under section 412 of the Code, (ii) a
notice of intent to terminate any Plan shall have been or is reasonably
expected to be filed with the PBGC or the PBGC shall have instituted
proceedings under ERISA section 4042 to terminate or appoint a trustee
to administer any Plan or the PBGC shall have notified the Guarantor or
any ERISA Affiliate that a Plan may become a subject of any such
proceedings, (iii) the aggregate "amount of unfunded benefit
liabilities" (within the meaning of section 4001(a)(18) of ERISA) under
all Plans, determined in accordance with Title IV of ERISA, shall
exceed $250,000, (iv) the Guarantor or any ERISA Affiliate shall have
incurred or is reasonably expected to incur any liability pursuant to
Title I or IV of ERISA or the penalty or excise tax provisions of the
Code relating to employee benefit plans, (v) the Guarantor or any ERISA
Affiliate withdraws from any Multiemployer Plan, or (vi) the Guarantor
or any ERISA Affiliate establishes or amends any employee welfare
benefit plan that provides postemployment welfare benefits in a manner
that would increase the liability of the Guarantor thereunder; and any
such event or events described in clauses (i) through (vi) above,
either individually or together with any other such event or events,
could reasonably be expected to have a Material Adverse Effect (as used
in this clause (l), the terms "EMPLOYEE BENEFIT PLAN" and "EMPLOYEE
WELFARE BENEFIT PLAN" shall have the respective meanings assigned to
such terms in section 3 of ERISA);
(m) the Master Partnership shall fail to maintain the
effectiveness of the registration statement filed with the Securities
and Exchange Commission with respect to the LP Units owned by the
Guarantor for as long as such LP Units are not freely tradeable
(without volume or other limitations) in the absence of such
registration statement;
(n) (i) any Person that is or becomes a party to the
Services Agreement shall fail to make any payment required thereunder
as and when due or shall otherwise fail to perform or comply in all
material respects with all obligations required to be performed or
complied with by it thereunder, (ii) any Person that is or becomes a
party to the Guarantor Security Agreement, the Intercreditor Agreement
or the Exchange Agreement shall fail to make any payment to, or for the
benefit of, the Guarantor required thereunder as and when due or (iii)
any Person that is or becomes a party to the Intercreditor Agreement
shall fail to comply with the provisions of Section 3(b) thereof;
24
(o) the Master Partnership and/or any of the Operating
Companies shall fail to pay to the Manager as and when due any and all
amounts requested by the Manager (whether pursuant to the Exchange
Agreement or any partnership agreement, limited liability company
operating agreement, management agreement or any other agreement
providing for reimbursement of expenses of, or compensation to, the
Manager in respect of its duties as general partner of the Master
Partnership and of the Operating Companies of which it is the general
partner) to enable the Manager to pay amounts owed by the Manager to
the Guarantor under the Services Agreement, the Guarantor Security
Agreement and the Intercreditor Agreement as and when due to the extent
that any such amounts are intended to be used by either the Guarantor
or the ESOP Trust, including, without limitation, in respect of the
Notes and the other Note Documents;
(p) without the express prior written consent of the
Required Holder(s), any Person shall amend, modify, change or terminate
in a manner which is adverse to the interests of the holders of the
Notes, or consent or agree to any amendment, modification, change to or
termination in a manner which is adverse to the interests of the
holders of the Notes of, any of the terms of (i) any of the ESOP
Documents, (ii) the Exchange Agreement, (iii) the Glenmoor Management
Agreement, (iv) the BMC Expense Reimbursement Agreement, (v) any
management agreement between the Manager and the Master Partnership or
any of the Operating Companies or (vi) any other agreement providing
for compensation to the Manager in respect of its duties as general
partner of the Master Partnership and of the Operating Companies of
which it is the general partner;
(q) without the express prior written consent of the
Required Holder(s), any Person shall amend, modify or change in a
manner which is adverse to the interests of the holders of the Notes,
or consent or agree to any material amendment, modification or change
to, or any amendment, modification or change which is adverse to the
interests of the holders of the Notes to, any of the terms of (i) the
partnership agreement governing the Master Partnership, as amended
prior to the Date of Closing or (ii) any of the partnership agreements
or limited liability company operating agreements governing any of the
Operating Companies, each as amended prior to the Date of Closing;
(r) the Guarantor, the Master Partnership or any
Significant Operating Company defaults (whether as primary obligor or
as guarantor or other surety) in any payment of principal of or
interest on any other obligation for money borrowed (or any Capitalized
Lease Obligation, any obligation under a conditional sale or other
title retention agreement, any obligation issued or assumed as full or
partial payment for property whether or not secured by a purchase money
mortgage or any obligation under notes payable or drafts accepted
representing extensions of credit) beyond any period of grace provided
with respect thereto, or the Guarantor, the Master Partnership or any
Significant Operating Company fails to perform or observe any other
agreement, term or
25
condition contained in any agreement under which any such obligation is
created (or if any other event thereunder or under any such agreement
shall occur and be continuing) and the effect of such failure or other
event is to cause, or to permit the holder or holders of such
obligation (or a trustee on behalf of such holder or holders) to cause,
such obligation to become due (or to be repurchased by the Guarantor,
the Master Partnership or any Significant Operating Company) prior to
any stated maturity, provided that the aggregate amount of all
obligations as to which such a payment default shall occur and be
continuing or such a failure or other event causing or permitting
acceleration (or resale to the Guarantor, the Master Partnership or any
Significant Operating Company) shall occur and be continuing exceeds
$5,000,000;
(s) any of the GP Entities defaults (whether as primary
obligor or as guarantor or other surety) in any payment of principal of
or interest on any other obligation for money borrowed (or any
Capitalized Lease Obligation, any obligation under a conditional sale
or other title retention agreement, any obligation issued or assumed as
full or partial payment for property whether or not secured by a
purchase money mortgage or any obligation under notes payable or drafts
accepted representing extensions of credit) beyond any period of grace
provided with respect thereto, or any of the GP Entities fails to
perform or observe any other agreement, term or condition contained in
any agreement under which any such obligation is created (or if any
other event thereunder or under any such agreement shall occur and be
continuing) and the effect of such default, failure or other event is
to cause such obligation to become due (or to be repurchased by such GP
Entity) prior to any stated maturity, provided that the aggregate
amount of all obligations as to which such default, failure or other
event causing acceleration (or resale to any of the GP Entities) shall
occur and be continuing exceeds $5,000,000; or
(t) any order, judgment or decree is entered in any
proceedings against the Guarantor, the Master Partnership or any
Significant Operating Company decreeing a split-up of such Person which
requires the divestiture of assets representing 10% or more of the
Tangible Net Worth (as of the end of the fiscal quarter immediately
preceding such determination), or the divestiture of the stock of a
Subsidiary whose assets represent 10% or more of the Tangible Net Worth
(as of the end of the fiscal quarter immediately preceding such
determination) of the consolidated assets, of such Person (determined
in accordance with GAAP) and such order, judgment or decree remains
unstayed and in effect for more than 60 days.
6.2 REMEDIES. Upon the occurrence of an Event of Default under
this Guaranty, the Required Holder(s) may, at its or their option, exercise any
and all remedies available to it or them, whether under the Note Agreement, any
of the other Note Documents or otherwise at law or in equity.
26
7. MISCELLANEOUS
7.1 TRANSACTION EXPENSES. The Guarantor agrees to pay all costs
and expenses (including reasonable attorneys' fees of a special counsel and, if
reasonably required, local or other counsel) incurred by each Note Holder and
the Collateral Trustee in connection with this Guaranty, the Note Agreement, the
other Note Documents or any transaction contemplated by any of the foregoing,
and in connection with any amendments, waivers or consents under or in respect
of this Guaranty, the Note Agreement or the other Note Documents (whether or not
such amendment, waiver or consent becomes effective), including, without
limitation: (i) the costs and expenses incurred in enforcing or defending (or
determining whether or how to enforce or defend) any rights under, or in
responding to any subpoena or other legal process or informal investigative
demand issued in connection with, this Guaranty, the Note Agreement or the other
Note Documents or any transaction contemplated by any of the foregoing, or by
reason of being a Note Holder, and (ii) the costs and expenses, including
financial advisors' fees, incurred in connection with the insolvency or
bankruptcy of the Guarantor or any other Person party to any of the Note
Documents or in connection with any workout or restructuring of the transactions
contemplated by this Guaranty, the Note Agreement and the other Note Documents.
The Guarantor will pay, and will save each Note Holder harmless from, all claims
in respect of any fees, costs or expenses if any, of brokers and finders (other
than those retained by a Note Holder). The obligations of the Guarantor under
this Section 7.1 will survive the payment or transfer of any Note, the
enforcement, amendment or waiver of any provision of this Guaranty, the Note
Agreement, the Notes or the other Note Documents, and the termination of this
Guaranty.
7.2 SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE AGREEMENT.
All representations and warranties contained herein or made in writing by or on
behalf of the Guarantor in connection herewith shall survive the execution and
delivery of this Guaranty, the purchase or transfer by the Purchasers of any
Note or portion thereof or interest therein and the payment of any Note, and may
be relied upon by any subsequent Note Holder, regardless of any investigation
made at any time by or on behalf of the Purchasers or any other Note Holder. All
statements contained in any certificate or other instrument delivered by or on
behalf of the Guarantor pursuant to or in connection with this Guaranty shall be
deemed representations and warranties of the Guarantor under this Guaranty.
Subject to the preceding sentence, this Guaranty embodies the entire agreement
and understanding between the Purchasers and the Guarantor and supersedes all
prior agreements and understandings relating to the subject matter hereof.
7.3 AMENDMENT AND WAIVER. This Guaranty may be amended, and the
observance of any term hereof may be waived (either retroactively or
prospectively), with (and only with) the written consent of the Guarantor and
the Required Holder(s), except that (a) no amendment or waiver of any of the
provisions of Section 2 hereof or any defined term (as it is used therein) and
(b) no release of the Guarantor from this Guaranty will be effective unless
consented to by each Note Holder in writing.
7.4 BINDING EFFECT, ETC. Any amendment or waiver consented to as
provided in Section 7.3 hereof applies equally to all Note Holders and is
binding upon them and
27
upon each future holder of any Note and the Guarantor without regard to whether
such Note has been marked to indicate such amendment or waiver. No such
amendment or waiver will extend to or affect any obligation, covenant, agreement
or Event of Default not expressly amended or waived or impair any right
consequent thereon. No course of dealing between the Guarantor and any Note
Holder nor any delay in exercising any rights hereunder or under any Note shall
operate as a waiver of any rights of any holder of such Note. As used herein,
the term "this Guaranty" and references thereto shall mean this Guaranty as it
may from time to time be amended or supplemented.
7.5 NOTICES. All notices or other communications provided for
hereunder shall be in writing and sent by first class mail, nationwide overnight
delivery service (with charges prepaid) or by facsimile transmission and (a) if
to any Purchaser, addressed to such Purchaser at the address specified for such
communications in the Purchaser Schedule attached to the Note Agreement, or at
such other address as such Purchaser shall have specified to the Guarantor in
writing, (b) if to any other Note Holder, addressed to such other Note Holder at
such address as such other holder shall have specified to the Guarantor in
writing or, if any such other Note Holder shall not have so specified an address
to the Guarantor, then addressed to such other Note Holder in care of the last
holder of such Note which shall have so specified an address to the Guarantor,
and (c) if to the Guarantor, addressed to it at 5 Radnor Corporate Center, Xxxxx
000, 000 Xxxxxxxxxx Xxxx, Xxxxxx, Xxxxxxxxxxxx 00000, Telecopy No. (610)
254-4626, Attention: Senior Vice President Finance, or at such other address as
the Guarantor shall have specified to each Note Holder in writing. Notices by
first class mail shall be effective on the third Business Day following the
mailing thereof, notices by nationwide overnight delivery service shall be
effective on the Business Day following delivery thereof by the sender to such
service and notices by facsimile transmission shall be effective when sent and
receipt has been confirmed.
7.6 SEVERABILITY. Any provision of this Guaranty that is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
7.7 CONSTRUCTION. Each covenant contained herein shall be
construed (absent express provision to the contrary) as being independent of
each other covenant contained herein, so that compliance with any one covenant
shall not (absent such an express contrary provision) be deemed to excuse
compliance with any other covenant. Where any provision herein refers to action
to be taken by any Person, or which such Person is prohibited from taking, such
provision shall be applicable whether such action is taken directly or
indirectly by such Person.
7.8 COUNTERPARTS. This Guaranty may be executed in any number of
counterparts, each of which shall be an original but all of which together shall
constitute one instrument.
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7.9 WAIVER OF JURY TRIAL; CONSENT TO JURISDICTION; LIMITATION OF
REMEDIES.
(a) THE GUARANTOR AND EACH NOTE HOLDER HEREBY KNOWINGLY,
VOLUNTARILY, AND INTENTIONALLY WAIVES ANY RIGHTS IT MAY HAVE TO A TRIAL
BY JURY IN ANY LITIGATION OF ANY CLAIM WHICH IS BASED HEREON, OR ARISES
OUT OF, UNDER, OR IN CONNECTION WITH THIS GUARANTY, ANY OF THE OTHER
NOTE DOCUMENTS OR ANY TRANSACTIONS RELATING HERETO OR THERETO, OR ANY
COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR
WRITTEN), OR ACTIONS OF THE GUARANTOR, ANY NOTE HOLDER OR THE
COLLATERAL TRUSTEE. THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE
PURCHASERS TO ENTER INTO THE NOTE AGREEMENT.
(b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS
GUARANTY, ANY OF THE OTHER NOTE DOCUMENTS OR ANY TRANSACTIONS RELATING
HERETO OR THERETO, OR ANY COURSE OF CONDUCT, COURSE OF DEALING,
STATEMENTS (WHETHER VERBAL OR WRITTEN), OR ACTIONS OF THE GUARANTOR,
ANY NOTE HOLDER OR THE COLLATERAL TRUSTEE MAY BE BROUGHT IN THE COURTS
OF THE STATE OF NEW YORK OR THE UNITED STATES OF AMERICA FOR THE
SOUTHERN DISTRICT OF NEW YORK, AND THE UNDERSIGNED HEREBY ACCEPTS FOR
ITSELF AND IN RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY,
THE NONEXCLUSIVE JURISDICTION OF THE AFORESAID COURTS. THE GUARANTOR
HEREBY IRREVOCABLY WAIVES ANY OBJECTIONS, INCLUDING, WITHOUT
LIMITATION, ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE
GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO
THE BRINGING OF ANY SUCH ACTION OR PROCEEDING IN SUCH RESPECTIVE
JURISDICTIONS.
(c) In the case of the courts of the State of New York or
of the United States sitting in the City of New York, State of New
York, the Guarantor hereby irrevocably designates, appoints and
empowers CT Corporation System, Inc. (the "PROCESS AGENT") (which has
consented thereto) with offices on the date hereof at 000 Xxxxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, as agent to receive for and on behalf
of the Guarantor service of process in the State of New York. The
Guarantor further agrees that such service of process may be made on
the Process Agent by personal service of a copy of the summons and
complaint or other legal process in any such legal suit, action or
proceeding on the Process Agent, or by any other method of service
provided for under the applicable laws in effect in the County of New
York, State of New York, and the Process Agent hereby is
29
authorized and directed to accept such service for and on behalf of the
Guarantor and to admit service with respect thereto.
(d) Upon service of process being made on the Process
Agent as aforesaid, a copy of the summons and complaint or other legal
process served shall be mailed by the Process Agent to the Guarantor by
registered mail, return receipt requested, at its address referred to
in Section 7.5 hereof, or to such other address as the Guarantor may
notify the Process Agent in writing. Service upon the Process Agent as
aforesaid shall be deemed to be personal service on the Guarantor and
shall be legal and binding upon the Guarantor for all purposes,
notwithstanding any failure of the Process Agent to mail copies of such
legal process thereto, or any failure on the part of the Guarantor to
receive same.
(e) The Guarantor agrees that it will at all times
continuously maintain an agent to receive service of process in the
County of New York on its behalf. In the event that for any reason the
Process Agent or any successor thereto shall no longer serve as agent
for the Guarantor to receive service of process in the County of New
York on its behalf or the Guarantor shall have changed its address
without notification thereof to the Process Agent, the Guarantor
immediately after having knowledge thereof, will irrevocably designate
and appoint a substitute agent in the City of New York, New York and
advise the Note Holders thereof, or shall notify the Process Agent of
its then current correct address.
(f) Nothing contained in this section shall preclude the
Note Holders from bringing any legal suit, action or proceeding against
the Guarantor in the courts of any jurisdiction where the Guarantor or
any of its property or assets may be found or located. To the extent
permitted by the applicable laws of any such jurisdiction, the
Guarantor hereby irrevocably submits to the jurisdiction of any such
court and expressly waives, in respect of any such suit, action or
proceeding, the jurisdiction of any court or courts which now or
hereafter, by reason of its present or future domiciles, or otherwise,
may be available to it.
(g) The Guarantor agrees, regardless of cause, not to
assert any claim whatsoever against the Note Holders for loss of
anticipatory profits or consequential damages.
7.10 GOVERNING LAW. THIS GUARANTY SHALL BE GOVERNED BY, AND
CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW
YORK, WITHOUT GIVING EFFECT TO PRINCIPLES OF CONFLICTS OF LAWS.
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IN WITNESS WHEREOF, the Guarantor has caused this Guaranty to be
executed and delivered by its duly authorized officer as of the date first above
written to become effective as of such date.
BUCKEYE PIPE LINE SERVICES COMPANY
By: /s/ Xxxxxx X. Xxxxxx
_________________________________
Name: Xxxxxx X. Xxxxxx
Title: Senior Vice President, Finance
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