Exhibit 10.36
THIRD AMENDED AND RESTATED
CREDIT AGREEMENT
DATED AS OF MARCH 31, 2004
BETWEEN AND AMONG
HERITAGE OPERATING, L.P.,
A DELAWARE LIMITED PARTNERSHIP
"BORROWER"
AND
THE BANKS NOW OR HEREAFTER SIGNATORY PARTIES HERETO, AS LENDERS
"BANKS"
AND
BANK OF OKLAHOMA, NATIONAL ASSOCIATION
AS "ADMINISTRATIVE AGENT" AND CO-LEAD ARRANGER FOR THE BANKS,
AND
BANK ONE, NA,
AS "CO-AGENT" AND CO-LEAD ARRANGER" FOR THE BANKS
TABLE OF CONTENTS
ARTICLE I DEFINITIONS; ACCOUNTING PRINCIPLES, TERMS AND
DEFINITIONS; CONSTRUCTION....................................................................................... 1
1.1 Definitions......................................................................................... 1
1.2 Accounting Principles, Terms and Determinations..................................................... 29
1.3 Construction........................................................................................ 29
ARTICLE II THE CREDITS................................................................................ 30
2.1 Acquisition Facility................................................................................ 30
2.1.1 Acquisition Loan.............................................................................. 30
2.1.2 Maximum Amount of Acquisition Credit.......................................................... 30
2.1.3 Acquisition Loan Borrowing Requests........................................................... 30
2.1.4 Acquisition Loan Account: Acquisition Notes.................................................. 31
2.2 Working Capital Facility............................................................................ 31
2.2.1 Working Capital Loan.......................................................................... 31
2.2.2 Maximum Amount of Working Capital Credit...................................................... 32
2.2.3 Working Capital Borrowing Requests............................................................ 32
2.2.4 Working Capital Loan Account: Working Capital Notes........................................... 32
2.2.5 Swingline Loan Requests....................................................................... 33
2.3 Letters of Credit................................................................................... 33
2.3.1 Issuance of Letters of Credit................................................................. 33
2.3.2 Requests for Letters of Credit................................................................ 33
2.3.3 Form and Expiration of Letters of Credit...................................................... 34
2.3.4 Banks' Participation in Letters of Credit..................................................... 34
2.3.5 Presentation.................................................................................. 34
2.3.6 Payment of Drafts............................................................................. 34
2.3.7 Uniform Customs and Practice.................................................................. 35
2.3.8 Subrogation................................................................................... 36
2.3.9 Modification, Consent, etc.................................................................... 36
2.4 Swingline Facility Sublimit......................................................................... 37
2.5 Additional Provisions Relating to Swingline Loans................................................... 37
2.6 Application of Proceeds............................................................................. 38
2.6.1 Acquisition Loan.............................................................................. 38
2.6.2 Working Capital Loan.......................................................................... 38
2.6.3 Letters of Credit............................................................................. 38
2.6.4 Specifically Prohibited Applications.......................................................... 38
2.7 Nature of Obligations of Banks to Make Extensions of Credit......................................... 38
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ARTICLE III INTEREST; EURODOLLAR PRICING OPTIONS; FEES................................................. 38
3.1 Interest............................................................................................ 38
3.2 Eurodollar Pricing Options.......................................................................... 39
3.2.1 Election of Eurodollar Pricing Options........................................................ 39
3.2.2 Notice to Banks and Borrower.................................................................. 39
3.2.3 Selection of Eurodollar Interest Periods...................................................... 40
3.2.4 Additional Interest........................................................................... 40
3.2.5 Violation of Bank Legal Requirements.......................................................... 40
3.2.6 Funding Procedure............................................................................. 41
3.3 Commitment Fees..................................................................................... 41
3.3.1 Acquisition Financing Facility................................................................ 41
3.3.2 Working Capital Facility...................................................................... 41
3.4 Letter of Credit Fees............................................................................... 42
3.5 Reserve Requirements................................................................................ 42
3.6 Taxes............................................................................................... 42
3.7 Capital Adequacy.................................................................................... 43
3.8 Regulatory Changes.................................................................................. 43
3.9 Computations of Interest and Fees................................................................... 44
3.10 Loan Fees........................................................................................... 44
3.11 Administrative Agent's Fees......................................................................... 44
ARTICLE IV PAYMENT.................................................................................... 44
4.1 Payment at Maturity................................................................................. 44
4.2 Contingent Required Prepayments..................................................................... 45
4.2.1 Excess Credit Exposure........................................................................ 45
4.2.2 Letter of Credit Exposure..................................................................... 45
4.2.3 Contingent Prepayments on Disposition, Loss of Assets,
Merger or Change of Control............................................................... 45
4.2.4 Prepayment Procedure for Contingent Prepayments............................................... 46
4.3 Scheduled Required Payments......................................................................... 46
4.3.1 Acquisition Loan.............................................................................. 46
4.3.2 Working Capital Loan.......................................................................... 47
4.4 Voluntary Prepayments............................................................................... 47
4.5 Letters of Credit................................................................................... 47
4.6 Reborrowing Application of Payments................................................................. 47
4.6.1 Reborrowing................................................................................... 47
4.6.2 Order of Application.......................................................................... 47
4.6.3 Payment with Accrued Interest................................................................. 48
4.6.4 Payments for Banks............................................................................ 48
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ARTICLE V SECURITY................................................................................... 48
5.1 Collateral.......................................................................................... 48
5.2 Intercreditor Agreement............................................................................. 48
ARTICLE VI CONDITIONS PRECEDENT AND SUBSEQUENT TO LOANS...................................................... 49
6.1 Conditions Precedent to Initial Working Capital Loan and Initial Acquisition Loan................... 49
(i) No Default.................................................................................... 49
(ii) Representations and Warranties................................................................ 49
(iii) Certificates.................................................................................. 49
(iv) Proceedings................................................................................... 49
(v) Notes......................................................................................... 50
(vi) Security Agreement............................................................................ 50
(vii) Opinions...................................................................................... 50
(viii) UCC Releases/Other Information................................................................ 50
(ix) Other Information and Closing Documents....................................................... 50
(x) Assignments/Replacement of Banks.................................ERROR! BOOKMARK NOT DEFINED..
(xi) Co-Agent.........................................................ERROR! BOOKMARK NOT DEFINED..
6.2 Conditions Precedent to All Loans................................................................... 50
ARTICLE VII COVENANTS............................................................................... 51
7A. Affirmative Covenants............................................................................... 51
7A.1 Financial Statements.......................................................................... 51
7A.2 Inspection of Property........................................................................ 55
7A.3 Covenant to Secure Notes Equally.............................................................. 55
7A.4 Partnership or Corporate Existence; Compliance with Laws...................................... 56
7A.5 Payment of Taxes and Claims................................................................... 56
7A.6 Compliance with ERISA......................................................................... 57
7A.7 Maintenance and Sufficiency of Properties..................................................... 57
7A.8 Insurance..................................................................................... 57
7A.9 Environmental Laws............................................................................ 58
7A.10 Operative Agreements.......................................................................... 58
7A.11 After-Acquired Property....................................................................... 58
7A.12 Further Assurances............................................................................ 59
7A.13 Books and Accounts............................................................................ 59
7A.14 Available Cash Reserves....................................................................... 59
7A.15 Parity Debt................................................................................... 60
7A.16 Maintenance of Separateness................................................................... 60
7B. Negative Covenants.................................................................................. 61
7B.1 Financial Ratios.............................................................................. 61
7B.2 Indebtedness.................................................................................. 62
7B.3 Liens......................................................................................... 65
7B.4 Priority Debt................................................................................. 68
7B.5 Loans, Advances, Investments and Contingent Liabilities....................................... 68
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7B.6 Restricted Payments........................................................................... 70
7B.7 Consolidation, Merger, Sale of Assets......................................................... 70
7B.8 Business...................................................................................... 73
7B.9 Transactions with Affiliates.................................................................. 73
7B.10 Subsidiary Stock and Indebtedness............................................................. 73
7B.11 Payment of Dividends by Subsidiaries.......................................................... 74
7B.12 Sales of Receivables.......................................................................... 74
7B.13 Material Agreements; Tax Status............................................................... 74
7B.14 Commingling of Deposit Accounts and Accounts.................................................. 75
ARTICLE VIII REPRESENTATIONS, COVENANTS AND WARRANTIES............................................... 75
8.1 Organization........................................................................................ 75
8.2 Partnership Interests............................................................................... 75
8.3 Qualification....................................................................................... 76
8.4 Financial Statements................................................................................ 76
8.5 Actions Pending..................................................................................... 76
8.6 Changes............................................................................................. 76
8.7 Outstanding Indebtedness............................................................................ 76
8.8 Transfer of Assets and Business; Title to Properties................................................ 77
8.9 Taxes............................................................................................... 78
8.10 Compliance with Other Instruments; Solvency......................................................... 78
8.11 Governmental Consent................................................................................ 79
8.12 Use of Proceeds..................................................................................... 79
8.13 ERISA............................................................................................... 79
8.14 Environmental Compliance............................................................................ 79
8.15 Pre-emptive Rights.................................................................................. 80
8.16 Disclosure.......................................................................................... 81
8.17 Federal Reserve Regulations......................................................................... 81
8.18 Investment Borrower Act............................................................................. 81
8.19 Public Utility Holding Company Act.................................................................. 81
ARTICLE IX EVENTS OF DEFAULT.......................................................................... 81
9.1 Acceleration........................................................................................ 81
9.2 Remedies............................................................................................ 85
9.3 Other Remedies...................................................................................... 86
9.4 Allocation of Payments After Event of Default....................................................... 86
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ARTICLE X LOAN OPERATIONS............................................................................ 87
10.1 Interests in Loans/Commitments...................................................................... 87
10.2 Administrative Agent's Authority to Act............................................................. 87
10.3 Borrower to Pay Administrative Agent................................................................ 88
10.4 Bank Operations for Advances, Letters of Credit..................................................... 88
10.4.1 Advances.......................................................................................... 88
10.4.2 Letters of Credit................................................................................. 88
10.4.3 Administrative Agent to Allocate Payments......................................................... 89
10.4.4 Delinquent Banks; Nonperforming Banks............................................................. 89
10.5 Sharing of Payments................................................................................. 90
10.6 Amendments, Consents, Waivers....................................................................... 90
10.7 Administrative Agent's Resignation.................................................................. 91
10.8 Concerning the Agents............................................................................... 92
10.8.1 Action in Good Faith.............................................................................. 92
10.8.2 No Implied Duties................................................................................. 92
10.8.3 Validity.......................................................................................... 93
10.8.4 Compliance........................................................................................ 93
10.8.5 Employment Agents and Counsel..................................................................... 93
10.8.6 Reliance on Documents and Counsel................................................................. 93
10.8.7 Agents' Reimbursement............................................................................. 93
10.9 Rights as a Bank.................................................................................... 93
10.10 Independent Credit Decision........................................................................... 94
10.11 Indemnification....................................................................................... 94
10.12 Procedure for Increases and Additional Banks..................................................... 94
ARTICLE XI ASSIGNMENTS/PARTICIPATIONS................................................................. 95
11 Successors and Assigns; Bank Assignment and Participations.......................................... 95
11.1 Assignments by Banks................................................................................ 95
11.1.1 Assignees and Assignment Procedures............................................................... 95
11.1.2 Terms of Assignment and Acceptance................................................................ 96
11.1.3 Register.......................................................................................... 97
11.1.4 Acceptance of Assignment and Assumption........................................................... 97
11.1.5 Federal Reserve Bank.............................................................................. 98
11.1.6 Further Assurances................................................................................ 98
11.2 Credit Participants................................................................................. 98
11.3 Replacement of Bank................................................................................. 99
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ARTICLE XII MISCELLANEOUS......................................................................... 100
12.1 Notices........................................................................................... 100
12.2 Place of Payment.................................................................................. 101
12.3 Survival of Agreements............................................................................ 101
12.4 Parties in Interest............................................................................... 101
12.5 Governing Law and Jurisdiction.................................................................... 101
12.6 Submission to Jurisdiction........................................................................ 101
12.7 Maximum Interest Rate............................................................................. 101
12.8 No Waiver; Cumulative Remedies.................................................................... 101
12.9 Costs............................................................................................. 102
12.10 Waiver of Jury................................................................................. 102
12.11 Full Agreement................................................................................. 102
12.12 Headings....................................................................................... 102
12.13 Severability................................................................................... 103
12.14 Exceptions to Covenants........................................................................ 103
12.15 Conflict with Security Documents............................................................... 103
12.16 Confidentiality................................................................................ 103
12.17 Existing Credit Agreement...................................................................... 103
12.18 USA PATRIOT Act Notice......................................................................... 103
12.19 Not a Reportable Transaction................................................................... 104
12.20 Counterparts................................................................................... 104
EXHIBITS
Exhibit 2.1.3 - Acquisition Loan Borrowing Requests
Exhibit 2.1.4 - Acquisition Notes
Exhibit 2.2.3 - Working Capital Borrowing Requests
Exhibit 2.2.4 - Working Capital Notes
Exhibit 2.3.2 - Certificate for Issuance of Letters of Credit
Exhibit 10.12 - Procedure of Increase and Additional Banks
SCHEDULES
Schedule 7B.3 - Liens
Schedule 7B.5 - Investments
Schedule 8.2 - Subsidiaries
Schedule 8.3 - List of States
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Schedule 8.7 - Indebtedness
Schedule 8.8 - Property Exceptions
vii
THIRD AMENDED AND RESTATED
CREDIT AGREEMENT
THIS THIRD AMENDED AND RESTATED CREDIT AGREEMENT, dated as of March 31,
2004 (this "Agreement"), is entered into between and among HERITAGE OPERATING,
L.P., a Delaware limited partnership (the "Borrower"), the various Persons
signatory parties hereto, as lenders, (together with each other Person that
becomes a Bank pursuant to Section 11 collectively referred to herein as the
"Banks"), and BANK OF OKLAHOMA, NATIONAL ASSOCIATION ("BOk"), as administrative
agent and co-lead arranger for the Banks (in such capacity the "Administrative
Agent"), and Bank One, NA("Bank One"), as co-agent and co-lead arranger for the
Banks (in such capacity the "Co-Agent") .
ARTICLE I
DEFINITIONS; ACCOUNTING PRINCIPLES,
TERMS AND DEFINITIONS; CONSTRUCTION
1.1 Definitions. Capitalized terms are used in this Agreement with the
specific meanings defined below in this Section 1.1.
"Acquired Debt" means with respect to any specified Person, (i)
Indebtedness of any other Person existing at the time such other Person merged
with or into or became a Subsidiary of such specified Person, including
Indebtedness incurred in connection with, or in contemplation of, such other
Person merging with or into or becoming a Subsidiary of such specified Person
and (ii) Indebtedness encumbering any asset acquired by such specified Person.
"Acquisition/Capex Due Diligence Package" is defined in Section 2.1.3.
"Acquisition Facility" means the agreement of the Banks herein to make
the Acquisition Loan.
"Acquisition Loan Account" is defined in Section 2.1.4.
"Acquisition Loan" is defined in Section 2.1.4.
"Acquisition Notes" is defined in Section 2.1.4.
"Additional Banks" shall mean any Person that hereafter becomes a
signatory Party hereto as a lender to Borrower hereunder.
"Additional Parity Debt" means Indebtedness of the Borrower that both
(a) is permitted under Section 7B.2(xiv) hereof or is incurred with the consent
of the Requisite Percentage of the Banks and (b) constitutes "Additional Parity
Debt" as defined in the Note Purchase Agreements and the Intercreditor
Agreement.
"Adjusted Consolidated EBITDA" shall mean, as of any date of
determination for any applicable period, Consolidated EBITDA calculated:
(x) with respect to the consolidated group comprised of the
General Partner, the Master Partnership and the Borrower and its
Subsidiaries (rather than with respect to the consolidated group
comprised of the Borrower and its Subsidiaries), and
(y) as if the terms "Consolidated Non-Cash Charges",
"Consolidated Net Income", "Consolidated Interest Expense",
"Consolidated Income Tax Expense", "Asset Sale", and "Asset
Acquisition", were calculated with respect to the consolidated group
comprised of the General Partner, the Master Partnership the Borrower
and their respective Subsidiaries (rather than with respect to the
consolidated group comprised of the Borrower and its Subsidiaries).
"Adjusted Consolidated Funded Indebtedness" shall mean Consolidated
Funded Indebtedness calculated with respect to the consolidated group comprised
of the General Partner, the Master Partnership, and the Borrower and their
Subsidiaries (rather than with respect to the consolidated group comprised of
the Borrower and its Subsidiaries).
"Administrative Agent" means BOk in its capacity as administrative
agent for the Banks hereunder, as well as its successors and assigns in such
capacity pursuant to Section 10.7.
"Affected Bank" is defined in Section 11.3.
"Affiliate" means, with respect to any Person any other Person directly
or indirectly controlling, controlled by, or under direct or indirect common
control with, such Person, except a Subsidiary of such Person. A Person shall be
deemed to control a corporation if such Person (i) possesses, directly or
indirectly, the power to direct or cause the direction of the management and
policies of such corporation, whether through the ownership of voting
securities, by contract or otherwise or (ii) owns at least 5% of the Voting
Stock of a corporation. As applied to the Borrower, "Affiliate" includes the
General Partner and the Master Partnership.
"Agent" means collectively the Administrative Agent and the Co-Agent.
"Agreement" means this Agreement as from time to time amended, modified
and in effect.
"Aggregate Available Cash" shall mean, with respect to any fiscal
quarter of the Borrower and of La Grange, the aggregate amount of Available Cash
of both the Borrower and its Subsidiaries and of La Grange and its Subsidiaries
(which for purposes of this Agreement insofar as La Grange is concerned, shall
be calculated using the definition of "Available Cash" set forth in this
Agreement, except that (i) all references therein to the "Borrower" shall be
deemed for purposes of this calculation only references to La Grange and (ii)
the last sentence of such definition for purposes of this calculation only shall
be modified to refer to reserves established by La Grange with respect to
indebtedness on the same bases as set forth in such definition).
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"Aggregate Partner Obligations" shall mean, with respect to any fiscal
quarter of the General Partner and the Master Partnership, the aggregate amount
of payment obligations of each of the General Partner and the Master
Partnership, including, without limitation, the Minimum Quarterly Distribution
(as defined in the Agreement of Limited Partnership of the Master Partnership)
on all Units thereof with respect to such fiscal quarter.
"Allocable Proceeds" means, with respect to Excess Sale Proceeds or
Excess Taking Proceeds, as the case may be, to be applied on any date pursuant
to Sections 4.2.3(i) and 4.2.3(ii), the principal amount thereof available to
prepay the Acquisition Notes determined by allocating such Excess Sale Proceeds
or Excess Taking Proceeds, as the case may be, pro rata among the holders of all
Acquisition Notes, the Private Placement Notes and other Parity Debt (other than
Indebtedness permitted by Section 7B.2(ii)), if any, according to the aggregate
principal amounts of the Acquisition Notes, the Private Placement Notes and such
other Parity Debt outstanding on the date the applicable prepayment is to be
made in accordance with Sections 4.2.3(i) and 4.2.3(ii).
"Annual Clean-Up" is defined in Section 2.2.2.
"Applicable Commitment Fee Percentage" means, with respect to any
Margin Period, the applicable percentage set forth below:
(i) if the Leverage Ratio on the Financial Statement Delivery
Date beginning such Margin Period was less than 3.25 to 1.0, 0.375%;
(ii) if the Leverage Ratio on the Financial Statement Delivery
Date beginning such Margin Period was equal to or greater than 3.25 to
1.0 but less than 3.75 to 1.0, 0.450%; and
(iii) if the Leverage Ratio on the Financial Statement
Delivery Date beginning such Margin Period was equal to or greater than
3.75 to 1.0, 0.50%.
Notwithstanding the foregoing, if any of the financial
statements required pursuant to Section 7A.1(i) of this Credit
Agreement are not delivered within the time periods specified in
Section 7A.1(i), the Applicable Commitment Fee Percentage shall be
0.50% until the date such financial statements are delivered.
"Applicable Margin" means with respect to any Eurodollar Loan or with
respect to any Base Rate Loan, the rate of interest per annum determined as set
forth below:
(i) if the Leverage Ratio on the Financial Statement Delivery
Date (as defined in the Credit Agreement) commencing such Margin Period
was less than 3.25 to 1.0, the Applicable Margin will be 1.625% for
Eurodollar Loans and zero for Base Rate Loans;
(ii) if the Leverage Ratio on the Financial Statement Delivery
Date commencing such Margin Period was equal to or greater than 3.25 to
1.0 but less than
3
3.75 to 1.0, the Applicable Margin will be 1.875% for Eurodollar Loans
and zero for Base Rate Loans;
(iii) if the Leverage Ratio on the Financial Statement
Delivery Date commencing such Margin Period was equal to or greater
than 3.75 to 1.0 but less than 4.25 to 1.0, the Applicable Margin will
be 2.125% for Eurodollar Loans and zero for Base Rate Loans;
(iv) if the Leverage Ratio on the Financial Statement Delivery
Date commencing such Margin Period was equal to or greater than 4.25 to
1.0 but less than 4.50 to 1.0, the Applicable Margin will be 2.250% for
Eurodollar Loans and zero for Base Rate Loans;
(v) if the Leverage Ratio on the Financial Statement Delivery
Date commencing such Margin Period was equal to or greater than 4.50 to
1.0 but less than 4.75 to 1.0, the Applicable Margin will be 2.50% for
Eurodollar Loans and 0.125% for Base Rate Loans; and
(vi) if the Leverage Ratio on the Financial Statement Delivery
Date commencing such Margin Period was equal to or greater than 4.75 to
1.0, the Applicable Margin will be 2.50% for Eurodollar Loans and
0.250% for Base Rate Loans.
Notwithstanding the foregoing, if any of the financial
statements required pursuant to Section 7A.1(i) of this Credit
Agreement are not delivered within the time periods specified in
Section 7A.1(i) thereof, the Applicable Margin shall be the Applicable
Margin set forth in clause (vi) above until the date such financial
statements are delivered.
"Applicable Rate" means, at any date:
(i) the sum of (a) with respect to each Eurodollar Loan, the
sum of the Applicable Margin in effect on such date plus the Eurodollar
Rate relating to such Eurodollar Loan; (b) with respect to each Base
Rate Loan, the sum of the Applicable Margin in effect on such date plus
the Base Rate relating to such Base Rate Loan; and
(ii) an additional two percentage points (2%) effective on the
day the Administrative Agent notifies the Borrower that the interest
rates hereunder are increasing as a result of the occurrence and
continuance of an Event of Default until such time as (A) such Event of
Default is no longer continuing or (B) such Event of Default is deemed
no longer to exist, in each case pursuant to Article IX hereof.
"Arvest" shall mean Arvest Bank, a state banking corporation.
"Asset Acquisition" means (i) an Investment by the Borrower or any
Subsidiary of the Borrower in any other Person pursuant to which such Person
shall become a Subsidiary of the Borrower or shall be merged with or into the
Borrower or any Subsidiary of the Borrower, (ii)
4
the acquisition by the Borrower or any Subsidiary of the Borrower of the assets
of any Person which constitute all or substantially all of the assets of such
Person or (iii) the acquisition by the Borrower or any Subsidiary of the
Borrower of any division or line of business of any Person (other than a
Subsidiary of the Borrower).
"Asset Sale" is defined in Section 7B.7(iii).
"Assets" is defined in the second opening paragraph of the Note
Purchase Agreements, as in effect on the date hereof.
"Assignment and Acceptance" is defined in Section 11.1.1.
"Attributable Debt" means, with respect to any Sale and Lease-Back
Transaction not involving a Capitalized Lease Obligation, as of any date of
determination, the total obligation (discounted to present value at the rate of
interest implicit in the lease included in such transaction) of the lessee for
rental payments (other than accounts required to be paid on account of property
taxes, maintenance, repairs, insurance, assessments, utilities, operating and
labor costs and other items which do not constitute payments for property
rights) during the remaining portion of the term (including extensions which are
at the sole option of the lessor) of the lease included in such transaction (in
the case of any lease which is terminable by the lessee upon the payment of a
penalty, such rental obligation shall also include the amount of such penalty,
but no rent shall be considered as required to be paid under such lease
subsequent to the first date upon which it may be so terminated).
"Available Cash" means, with respect to any fiscal quarter of the
Borrower, (i) the sum of (a) all cash and cash equivalents thereof and its
Subsidiaries on hand at the end of such quarter and (b) all additional cash and
cash equivalents thereof and its Subsidiaries on hand on the date of
determination of Available Cash with respect to such quarter resulting from
borrowings for working capital purposes made subsequent to the end of such
quarter, less (ii) the amount of any cash reserves that is necessary or
appropriate in the reasonable discretion of the General Partner thereof to (a)
provide for the proper conduct of the business thereof and its Subsidiaries
(including reserves for future capital expenditures) subsequent to such quarter,
(b) comply with applicable law or any loan agreement, security agreement,
mortgage, debt instrument or other agreement or obligation to which the Borrower
or any Subsidiary thereof is a party or by which it is bound or its assets are
subject (including the Loan Documents) and (c) provide funds for distributions
to partners of the Master Partnership and the General Partner thereof in respect
of any one or more of the next four quarters; provided that the General Partner
thereof need not establish cash reserves pursuant to clause (c) if the effect of
such reserves would be that the Master Partnership is unable to distribute the
Minimum Quarterly Distribution (as defined in the Agreement of Limited
Partnership of the Master Partnership) on all Common Units with respect to such
quarter; and provided, further, that disbursements made by the Borrower, or a
Subsidiary of the Borrower, or cash reserves established, increased or reduced
after the end of such quarter but on or before the date of determination of
Available Cash with respect to such quarter shall be deemed to have been made,
established, increased or reduced for purposes of determining Available Cash,
within such quarter if the General Partner thereof so determines. In addition,
without limiting the foregoing, Available Cash for any fiscal quarter shall
reflect reserves equal
5
to (A) 50% of the interest projected to be paid on the Private Placement Notes
in the next succeeding fiscal quarter plus (B) beginning with a date three
fiscal quarters before a scheduled principal payment date on the Private
Placement Notes, 25% of the aggregate principal amount thereof due on any such
payment date in the third succeeding fiscal quarter, 50% of the aggregate
principal amount due on any such payment date in the second succeeding fiscal
quarter and 75% of the aggregate principal amount due on any quarterly payment
date in the next succeeding fiscal quarter, plus (C) the Unused Proceeds Reserve
as of the date of determination, provided that the foregoing reserves for
amounts to be paid on the Private Placement Notes shall be reduced by the
aggregate amount of advances available to the Borrower, from responsible
financial institutions under binding irrevocable (x) credit or financing
commitments (which are subject to no conditions which the Borrower is unable to
meet) including this Agreement, and (y) letters of credit (which are subject to
no conditions which the Borrower is unable to meet), in each case, to be used to
refinance such amounts, to the extent such amounts could be borrowed and remain
outstanding under Sections 7B.1 and 7B.2 of this Agreement.
"Bank" means each of the Persons listed as Banks on the signature page
hereto, including each of BOk, Bank One, Arvest, Fifth Third, MidFirst, Local
and US Bank in its capacity as a Bank, and their respective successors and
permitted assigns and such other Persons who may from time to time own a
Percentage Interest in the Credit Obligations. The term "Bank" shall not include
any Credit Participant but shall include, unless the context otherwise expressly
requires, the Letter of Credit Issuer and the Swingline Lender.
"Bank Legal Requirement" means any present or future requirement
imposed upon any of the Banks or the Borrower and its Subsidiaries by any law,
statute, rule, regulation, directive, order, decree, guideline (or any
interpretation thereof by courts or of administrative bodies) of the United
States of America, or any jurisdiction in which any Eurodollar Office is located
or any state or political subdivision of any of the foregoing, or by any board,
governmental or administrative agency, central bank or monetary authority of the
United States of America, any jurisdiction in which any Eurodollar Office is
located, or any political subdivision of any of the foregoing. any such
requirement imposed on any of the Banks not having the force of law shall be
deemed to be a Bank Legal Requirement if such Bank reasonably believes that
compliance therewith is in the best interest of such Bank.
"Bank One" means Bank One, NA..
"Banking Day" means any day other than Saturday, Sunday or a day on
which banks in Tulsa, Oklahoma are authorized or required by law or other
governmental action to close and, if such term is used with reference to a
Eurodollar Pricing Option, any day on which dealings are effected in the
Eurodollars in question by first-class banks in the inter-bank Eurodollar
markets in New York, New York.
"Bankruptcy Law" is defined in clause (viii) of Section 9.1.
"Base Rate" means, on any date, the greater (i) the rate of interest
announced by XX Xxxxxx Xxxxx Bank, National Association, New York, New York, or
such other financial
6
institution that is the primary banking subsidiary of XX Xxxxxx Chase & Co., as
its Base Rate or (ii) the sum of 1/2% plus the Federal Funds Rate.
"Base Rate Loan" means each portion of the Loan bearing interest
determined by reference to the Base Rate.
"Bi-State" means Heritage-Bi State LLC, a Delaware limited liability
company.
"BOk" has the meaning specified in the introduction to this Agreement.
"Business" shall mean each of (i) the business of wholesale and retail
sales, storage, transportation and distribution of propane gas, providing
repair, installation and maintenance services for propane heating systems; the
sale and distribution of propane-related supplies and equipment (including
appliances); the generation, transportation, sale, distribution and marketing
relating thereto of propane-powered fuel cells, or the power generated therefrom
and equipment related thereto, and (ii) the business of purchasing, gathering,
treating, processing, marketing, sales, storage, transportation, fractionation
and distribution of natural gas and natural gas liquids and other related energy
services.
"Capital Stock" means, with respect to any Person, any and all shares,
units representing interests, participations, rights in or other equivalents
(however designated) of such Person's capital stock, including, with respect to
partnerships, partnership interests (whether general or limited) and any other
interest or participation that confers upon a Person the right to receive a
share of the profits and losses of, or distributions of assets of, such
partnership, and any rights (other than debt securities convertible into capital
stock), warrants or options exchangeable for or convertible into such capital
stock.
"Capitalized Lease Obligation" means any rental obligation which under
GAAP would be required to be capitalized on the books of the Borrower or any of
its Subsidiaries, taken at the amount thereof accounted for as indebtedness (net
of interest expense) in accordance with such principles.
"Cash Equivalents" is defined in Section 7B.5(iii).
"CERCLA" shall mean the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, 42 U.S.C. Sections. 9601 et seq., as the
same may be amended from time to time.
"Certificates and Stock Powers" is defined in Section 6.1(vi).
"Change of Control" means the acquisition by any Person or group of
related persons (as such terms are defined in the Exchange Act) (other than the
Current Management or group of related persons (as so defined) including the
Current Management) of beneficial ownership of more than 50% of the Units.
"Closing Date" means the effective date of this Agreement and each
other date on which any extension of credit is made pursuant to Section 2.1, 2.2
or 2.3.
7
"Code" means the Internal Revenue Code of 1986, as amended.
"Collateral" is defined in the Security Agreement, provided, however,
that Collateral shall not include for any purpose under this Agreement or any
other Loan Document any property subject to a Lien incurred pursuant to clause
(i), (vii) or (viii) of Section 7B.3 or any renewals of any such Lien pursuant
to clause (xiv) of Section 7B.3 unless the Indebtedness secured by such Lien
shall have been paid or discharged.
"Collateral Agent" shall mean Wilmington Trust Company, a Delaware
trust company, in its capacity as collateral agent under the Intercreditor and
Agency Agreement and its successors and assigns in such capacity under Section
11 thereof.
"Commission" means the United States Securities and Exchange
Commission.
"Commitments" means, with respect to any Bank, such Bank's obligations
to extend the credit facilities contemplated by Section 2. The original
Commitments are set forth in Section 10.1 and the current Commitments are
recorded from time to time in the Register.
"Common Units" shall mean common units representing a limited
partnership interest in the Master Partnership and the Borrower on a combined
basis.
"Consolidated Debt Service" means, as of any date of determination, the
total amount payable by the Borrower and its Subsidiaries on a consolidated
basis during the four consecutive calendar quarters next succeeding the date of
determination, in respect of scheduled principal and interest payments with
respect to Indebtedness of the Borrower and its Subsidiaries outstanding on such
date of determination, after giving effect to any Indebtedness proposed on such
date to be incurred and to the substantially concurrent repayment of any other
Indebtedness (a) including actual payments under Capitalized Lease Obligations,
(b) assuming, in the case of Indebtedness (other than Indebtedness referred to
in clause (c) below) bearing interest at fluctuating interest rates which cannot
be determined in advance, that the rate actually in effect on such date will
remain in effect throughout such period, (c) including only actual interest (but
not principal) payments associated with the Indebtedness incurred pursuant to
Section 7B.2(ii) and 7B.2(v) during the most recent four consecutive calendar
quarters and (d) treating the principal amount of all Indebtedness outstanding
as of such date of determination under a revolving credit or similar agreement
(other than the Indebtedness incurred pursuant to Section 7B.2(ii) and Section
7B.2(v)) as maturing and becoming due and payable on the scheduled maturity date
or dates thereof (including the maturity of any payment required by any
commitment reduction or similar amortization provision), without regard to any
provision permitting such maturity date to be extended (except for such
extensions as may be made in the sole discretion of the borrower thereunder and
without any conditions that remain to be fulfilled by the borrower or waived by
the lender thereunder). See Section 1.2.
"Consolidated EBITDA" means, as of any date of determination for any
applicable period, (1) the sum of, without duplication, the amounts for such
period, taken as a single accounting period, of (a) Consolidated Net Income and
(b) to the extent deducted in the
8
determination of Consolidated Net Income, after excluding amounts attributable
to minority interests in Subsidiaries and without duplication, (i) Consolidated
Non-Cash Charges, (ii) Consolidated Interest Expense and (iii) Consolidated
Income Tax Expense less (2) any non-cash items increasing Consolidated Net
Income for such period to the extent that such items constitute reversals of a
Consolidated Non-Cash Charge for a previous period and which were included in
the computation of Consolidated EBITDA for such previous period pursuant to the
provisions of the preceding clause (1). Consolidated EBITDA shall be calculated
after giving effect, on a pro forma basis and in accordance with GAAP, to,
without duplication, any Asset Sales or Asset Acquisitions (including without
limitation any Asset Acquisition giving rise to the need to make such
calculation as a result of the Borrower or one of its Subsidiaries incurring,
assuming or otherwise being liable for Acquired Debt) occurring during the
period commencing on the first day of such period to and including the date of
the transaction (the "Reference Period"), as if such Asset Sale or Asset
Acquisition occurred on the first day of the Reference Period; provided,
however, that Consolidated EBITDA generated by an acquired business or asset
shall be determined by the actual gross profit (revenues minus cost of goods
sold) of such acquired business or asset during the immediately preceding four
full fiscal quarters in the Reference Period minus the pro forma expenses that
would have been incurred by the Borrower and its Subsidiaries in the operation
of such acquired business or asset during such period computed on the basis of
personnel expenses for employees retained or to be retained by the Borrower and
its Subsidiaries in the operation of such acquired business or asset and
non-personnel costs and expenses incurred by the Borrower and its Subsidiaries
in the operation of the Borrower's business at similarly situated facilities of
the Borrower or any of its Subsidiaries (as determined in good faith by the
General Partner determined (a) on the basis of 100% that amount for the period
of upon reasonable assumptions). As used herein, but only for purposes of
Sections 7B.1(i) and (ii), Consolidated EBITDA shall be determined (a) on the
basis of 100% of that amount for the period of the four most recent fiscal
quarters ending on or prior to the date of determination or (b) 50% of that
amount for the period of the eight most recent fiscal quarters ending on or
prior to the date of determination, whichever is higher. For all other purposes
hereof, Consolidated EBITDA shall be based upon that amount determined over the
four most recent fiscal quarters ending on or prior to the date of determination
(or, as the case may be, for which financial statements have been or are
required to be delivered to the Banks pursuant to Sections. 7B.1(i) and
(ii)).See Section 1.2.
"Consolidated Funded Indebtedness" means, as of any date of
determination, the aggregate amount of Indebtedness of the Borrower and its
Subsidiaries outstanding on that date and maturing in more than 12 months,
including the Private Placement Notes and borrowings under the Acquisition
Facility (including current maturities of any such Indebtedness).
Notwithstanding anything to the contrary contained herein, Consolidated Funded
Indebtedness shall not include borrowings under the Working Capital Facility to
the extent permitted under the Note Purchase Agreements.
"Consolidated Income Tax Expense" means, with respect to the Borrower
and its Subsidiaries, for any period, the provision for federal, state, local
and foreign income taxes of the Borrower and its Subsidiaries for such period as
determined on a consolidated basis in accordance with GAAP. See Section 1.2.
9
"Consolidated Interest Expense" means as of any date of determination
for any applicable period, without duplication, the sum of (i) the interest
expense of the Borrower and its Subsidiaries for such period as determined on a
consolidated basis in accordance with GAAP, including without limitation (a) any
amortization of debt discount, (b) the net cost under Interest Rate Agreements,
(c) the interest portion of any deferred payment obligation, (d) all
commissions, discounts and other fees and charges owed with respect to letters
of credit and bankers' acceptance financing and (e) all accrued interest and
(ii) the interest component of Capitalized Lease Obligations paid, accrued or
scheduled to be paid or accrued by the Borrower and its Subsidiaries during such
period as determined on a consolidated basis in accordance with GAAP. In
computing Consolidated Interest Expense for purposes of clause (ii) of Section
7B.1, the applicable period for the determination thereof shall be the four most
recent fiscal quarters ending on or prior to the date of determination. See
Section 1.2.
"Consolidated Net Income" means the net income of the Borrower and its
Subsidiaries, as determined on a consolidated basis in accordance with GAAP and
after provision for minority interests and as adjusted to exclude (i) net
after-tax extraordinary gains or losses, (ii) net after-tax gains or losses
attributable to Asset Sales, (iii) the net income or loss of any Person which is
not a Subsidiary of the Borrower and which is accounted for by the equity method
of accounting, provided that Consolidated Net Income shall include the amount of
cash dividends or distributions actually paid to the Borrower or any Subsidiary
of the Borrower, (iv) the net income or loss prior to the date of acquisition of
any Person combined with the Borrower or any Subsidiary of the Borrower in a
pooling of interest, (v) the net income of any Subsidiary of the Borrower to the
extent that dividends or distributions of such net income are not at the date of
determination permitted by the terms of its charter or any agreement,
instrument, judgment, decree, order, statute, rule or other regulation and (vi)
the cumulative effect of any changes in accounting principles. See Section 1.2.
"Consolidated Net Worth" means, with respect to any Person, at any date
of determination, the total partners' capital (in the case of a partnership) or
stockholders' equity (in the case of a corporation) of such Person at such date,
as would be shown on a consolidated balance sheet of such Person and its
Subsidiaries, if any, prepared in accordance with GAAP. See Section 1.2.
"Consolidated Non-Cash Charges" means with respect to the Borrower and
its Subsidiaries, for any period, the aggregate depreciation and amortization,
in each case reducing Consolidated Net Income of the Borrower and its
Subsidiaries for such period, determined on a consolidated basis in accordance
with GAAP. See Section 1.2.
"Consolidated Pro Forma Maximum Debt Service" means, as of any date of
determination, the maximum amount payable by the Borrower and its Subsidiaries
on a consolidated basis during all periods of four consecutive calendar
quarters, commencing with the calendar quarter in which such date of
determination occurs and ending June 30, 2011, in respect of scheduled principal
and interest payments with respect to all Indebtedness of the Borrower and its
Subsidiaries outstanding on such date of determination, after giving effect to
any Indebtedness proposed on such date to be incurred and to the substantially
concurrent repayment of any other Indebtedness (a) including all payments under
Capitalized Lease Obligations, (b)
10
assuming, in the case of Indebtedness (other than Indebtedness referred to in
clause (c) below) bearing interest at fluctuating interest rates which cannot be
determined in advance, that the rate actually in effect on such date will remain
in effect throughout such period, (c) including only actual interest (but not
principal) payments associated with the Indebtedness incurred pursuant to
Section 7B.2 during the most recent four consecutive calendar quarters and (d)
treating the principal amount of all Indebtedness outstanding as of such date of
determination under a revolving credit or similar agreement (other than the
Indebtedness incurred pursuant to Section 7B.2 as maturing and becoming due and
payable on the scheduled maturity date or dates thereof (including the maturity
of any payment required by any commitment reduction or similar amortization
provision), without regard to any provision permitting such maturity date to be
extended (except for such extensions as may be made in the sole discretion of
the borrower thereunder and without any conditions that remain to be fulfilled
by the borrower or waived by the lender thereunder). See Section 1.2.
"Consolidated Tangible Net Worth" means, with respect to any Person, at
any date of determination, the then Consolidated Net Worth of Person minus the
net book value of all assets of such Person and its Subsidiaries, if any, (after
deducting any reserves applicable thereto), which would be shown as intangible
assets on a consolidated balance sheet of such Person and its Subsidiaries, if
any, as of such time prepared in accordance with GAAP. See Section 1.2.
"Contribution Agreement" collectively shall mean the Contribution,
Conveyance and Assumption Agreement, dated as of June 28, 1996, among the other
signatories thereto, in connection with the transactions contemplated by the
Existing Credit Agreement and the Contribution Agreement, dated as of November
6, 2003, among the signatory parties thereto in connection with the La Grange
Acquisition, as each of the same may from time to time be amended, supplemented,
restated or otherwise modified in accordance with the terms thereof and hereof.
"Control Event" means:
(i) the execution of any written agreement to which the
Borrower or any Affiliate of the Borrower is a party which could
reasonably be expected to result in a Change of Control.
(ii) the commencement (as such term is used in Rule 14d-2(a)
under the Exchange Act as in effect on the date of the Closing) of a
tender offer by any person (as such term is used in Section 13(d) and
Section 14(d)(2) of the Exchange Act as in effect on the date of the
Closing) or related person constituting a group (as such term issued in
Rule 13d-5 under the Exchange Act as in effect on the date of the
Closing) for units which would result in such person or group owning,
directly or indirectly, more than 50% of the outstanding Units.
"Conveyance Agreements" shall mean (a) the Contribution Agreement and
(b) each of the individual bills of sale and other conveyance documents
delivered to the Borrower pursuant to the Contribution Agreement in each case as
the same may from time to time be amended, supplemented or otherwise modified in
accordance with the terms thereof and hereof.
11
"Credit Obligations" means all present and future liabilities,
obligations and Indebtedness of the Borrower or any of its Subsidiaries owing to
the Administrative Agent, the Co-Agent or any Bank under or in connection with
this Agreement or any other Loan Document, including obligations in respect of
principal, interest, reimbursement obligations under Letters of Credit and
Interest Rate Agreements provided by a Bank (or an Affiliate of a Bank),
commitment fees, Letter of Credit fees, amounts provided for in Sections 3.2.4,
3.5, 3.6, 3.7, 3.8 and 3.10 and any other fees, charges, indemnities and
expenses from time to time owing hereunder or under any other Loan Documents
(whether accruing before or after the commencement of proceedings under any
Bankruptcy Law).
"Credit Participant" is defined in Section 11.2.
"Current Management" shall mean (a) either H. Xxxxxxx Xxxxxxxx or
Xxxxxxx X. Xxxxxxxxx and (b) any one (1) of the following: Xxxxx X.
Xxxxxxxxxxxx, X.X. Xxxxx, Xxxxxxx X. Xxxxxxxx, Xxx X. Xxxxx or Xxxxx X. Xxxxxx,
together with the heirs of, and trusts for the benefit of family members
controlled by, any such executive manager described in (a) or (b) hereof.
"Departing Bank" shall mean Xxxxxx Trust and Savings Bank.
"Environmental Laws" means all applicable federal, state, local and
foreign laws, rules or regulations as amended from time to time, relating to
emissions, discharges, releases, threatened releases, removal, remediation or
abatement of pollutants, contaminants, chemicals or industrial, toxic or
hazardous substances or wastes into or in the environment (including without
limitation air, surface water, ground water or land), or otherwise used in
connection with the manufacture, processing, distribution, use, treatment,
storage, disposal, transport or handling of pollutants, contaminants, toxic or
hazardous substances or wastes, as defined under such applicable laws.
"Equity Interest" means, with respect to any Person, any capital stock
issued by such Person, regardless of class or designation, or any limited or
general partnership interest in such Person, regardless of designation, and all
warrants, options, purchase rights, conversion or exchange rights, voting
rights, calls or claims of any character with respect thereto.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"ERISA Affiliate" means any trade or business (whether or not
incorporated) that, together with the Borrower, is treated as a single employer
under Section 414(b) or (c) of the Code, or, solely for purposes of Section 302
of ERISA and Section 412 of the Code, is treated as a single employer under
Section 414 of the Code.
"ERISA Event" means (i) any "reportable event", as defined in Section
4043 of ERISA or the regulations issued thereunder, with respect to a Plan; (ii)
the adoption of any amendment to a Plan that would require the provision of
security pursuant to Section 401(a)(29) of the Code or Section 307 of ERISA;
(iii) the existence with respect to any Plan of an "accumulated funding
deficiency" (as defined in Section 412 of the Code or Section 302 of ERISA),
whether or not waived; (iv) the filing pursuant to Section 412(d) of the Code or
Section 303(d) of ERISA of an
12
application for a waiver of the minimum funding standard with respect to any
Plan; (v) the incurrence of any liability under Title IV of ERISA with respect
to the termination of any Plan or the withdrawal or partial withdrawal of the
Borrower or any of its ERISA Affiliates from any Plan or Multiemployer Plan;
(vi) the receipt by the Borrower or any ERISA Affiliate from the PBGC or a plan
administrator of any notice relating to the intention to terminate any Plan or
Plans or to appoint a trustee to administer any Plan; (vii) the receipt by the
Borrower or any ERISA Affiliate of any notice concerning the imposition of
Withdrawal Liability or a determination that a Multiemployer Plan is, or is
expected to be, insolvent or in reorganization, within the meaning of Title IV
of ERISA; and (viii) the occurrence of a "prohibited transaction" with respect
to which the Borrower or any of its Subsidiaries is a "disqualified person"
(within the meaning of Section 4975 of the Code) and with respect to which the
Borrower or such Subsidiary would be liable for the payment of an excise tax.
"Eurodollars" means, with respect to any Bank, deposits of United
States Funds in a non-United States office or an international banking facility
of such Bank.
"Eurodollar Basic Rate" means, for any Eurodollar Interest Period, the
rate of interest at which Eurodollar deposits in an amount comparable to the
Percentage Interest of BOk in the portion of a Loan as to which a Eurodollar
Pricing Option has been elected and which have a term corresponding to such
Eurodollar Interest Period are offered to the Administrative Agent by first
class banks in the inter-bank Eurodollar market for delivery in immediately
available funds at a Eurodollar Office on the first day of such Eurodollar
Interest Period as determined by the Administrative Agent at approximately 10:00
a.m. (Tulsa, Oklahoma time) two Banking Days prior to the date upon which such
Eurodollar Interest Period is to commence (which determination by the
Administrative Agent shall, in the absence of manifest error, be conclusive) and
as furnished promptly thereafter by the Administrative Agent.
"Eurodollar Interest Period" means any period, selected as provided in
Section 3.2.1, of one or three months, commencing on any Banking Day and ending
on the corresponding date in the subsequent calendar month so indicated (or, if
such subsequent calendar month has no corresponding date, on the last day of
such subsequent calendar month); provided, however, that subject to Section
3.2.3, if any Eurodollar Interest Period so selected would otherwise begin or
end on a date which is not a Banking Day, such Eurodollar Interest Period shall
instead begin or end, as the case may be, on the immediately preceding or
succeeding Banking Day as determined by the Administrative Agent in accordance
with the then current banking practice in the inter-bank Eurodollar market with
respect to Eurodollar deposits at the applicable Eurodollar Office, which
determination by the Administrative Agent shall, in the absence of manifest
error, be conclusive.
"Eurodollar Loan" means each portion of the Loan bearing interest
determined by reference to the Eurodollar Rate.
"Eurodollar Office" means such non-United States office or
international banking facility of any Bank as the Administrative Agent may from
time to time select.
13
"Eurodollar Pricing Options" means the options granted pursuant to
Section 3.2.1 to have the interest on any portion of a Loan computed on the
basis of a Eurodollar Rate.
"Eurodollar Rate" for any Eurodollar Interest Period means the rate,
rounded upward to the nearest 1/100%, obtained by dividing (a) the Eurodollar
Basic Rate for such Eurodollar Interest Period by (b) an amount equal to 1 minus
the Eurodollar Reserve Rate; provided, however, that if at any time during such
Eurodollar Interest Period the Eurodollar Reserve Rate applicable to any
outstanding Eurodollar Pricing Option changes, the Eurodollar Rate for such
Eurodollar Interest Period shall automatically be adjusted to reflect such
change, effective as of the date of such change.
"Eurodollar Reserve Rate" means the stated maximum rate (expressed as a
decimal) of all reserves (including any basic, supplemental, marginal or
emergency reserve or any reserve asset), if any, as from time to time in effect,
required by any Bank Legal Requirement to be maintained by any Bank against (a)
"Eurocurrency liabilities" as specified in Regulation D of the Board of
Governors of the Federal Reserve System applicable to Eurodollar Pricing
Options, (b) any other category of liabilities that includes Eurodollar deposits
by reference to which the interest rate on portions of a Loan subject to
Eurodollar Pricing Options is determined, (c) the principal amount of or
interest on any portion of the Loan subject to a Eurodollar Pricing Option or
(d) any other category of extensions of credit, or other assets, that includes
loan subject to a Eurodollar Pricing Option by a non-United States office of any
of the Banks to United States residents, in each case without the benefits of
credits for prorations, exceptions or offsets that may be available to a Lender.
"Event of Default" means any of the events specified in Section 9.1,
provided that there has been satisfied any requirement 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 any such requirement has been satisfied.
"Excess Proceeds" is defined in Section 4.2.4.
"Excess Sale Proceeds" is defined in Section 7B.7(iii)(c)(ii).
"Excess Taking Proceeds" is defined in Section 4.2.3(ii).
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Existing Credit Agreement" means the Credit Agreement dated as of June
25, 1996, as amended by the First Amendment to Credit Agreement dated as of July
25, 1996, the Second Amendment to Credit Agreement dated as of February 28,
1997, the Third Amendment to Credit Agreement dated as of September 30, 1997,
the Fourth Amendment to Credit Agreement dated as of November 18, 1997, and the
Fifth Amendment to Credit Agreement dated as of November 13, 1998, as replaced
and restated by the First Amended and Restated Credit Agreement dated as of May
31, 1999, between and among Borrower, BOk, Firstar Bank, N.A. ("Firstar"), and
Local, and BOk, as Administrative Agent, and Firstar, as Co-Agent, as amended by
the First Amendment to First Amended and Restated Credit Agreement dated as of
October 15, 1999,
14
between and among Borrower, BOk, Firstar and Local, and BOk, as Administrative
Agent and Firstar, as Co-Agent, as amended by the Second Amendment to First
Amended and Restated Credit Agreement dated as of May 31, 2000, between and
among Borrower, BOk, Firstar and Local, and BOk, as Administrative Agent, and
Firstar, as Co-Agent, as amended by the Third Amendment to First Amended and
Restated Credit Agreement dated as of August 10, 2000, between and among
Borrower, BOk, Firstar, Local and Xxxxxx, as lenders, and BOk, as Administrative
Agent and Firstar, as Co-Agent, as further amended by the Fourth Amendment to
First Amended and Restated Credit Agreement dated as of December 28, 2000,
between and among Borrower, BOk, Firstar, Local and Xxxxxx Trust and Savings
Bank ("Xxxxxx"), as lenders, the Administrative Agent and the Co-Agent, as
further amended by the Fifth Amendment to the First Amended and Restated Credit
Agreement dated as of July 16, 2001, between and among Borrower, BOk, Firstar,
Local and Xxxxxx, as lenders, and BOk, as Administrative Agent, and Firstar, as
Co-Agent, as further amended by the Sixth Amendment to the First Amended and
Restated Credit Agreement dated as of October 1, 2003, between and among
Borrower, BOk, U.S. Bank, successor to Firstar, Local and Xxxxxx, as lenders,
and BOk, as Administrative Agent, and US Bank, as Co-Agent, and as further
amended by the Second Amended and Restated Credit Agreement dated as of December
31, 2003, between and among Borrower, BOk, U. S. Bank National Association,
Local and Xxxxxx, as lenders, and BOk, as Administrative Agent, and U. S. Bank,
as Co-Agent.
"Federal Funds Rate" means, for any day, the rate equal to the weighted
average (rounded upward to the nearest 1/8%) of the rates on overnight federal
funds transactions with members of the Federal Reserve System arranged by
federal funds brokers, (i) as such weighted average is published for such day
(or, if such day is not a Banking Day, for the immediately preceding Banking
Day) by the Federal Reserve Bank of New York or (ii) if such rate is not so
published for such Banking Day, as determined by the Administrative Agent using
any reasonable means of determination. Each determination by the Administrative
Agent of the Federal Funds Rate shall, in the absence of manifest error, be
conclusive.
"Fifth Third" shall mean Fifth Third State Bank.
"Final Maturity Date" means December 31, 2006.
"Financial Statement Delivery Date" means each date on which financial
statements are to be delivered pursuant to Section 7A.1(i) and (ii),
respectively.
"Financing Statements" shall have the meaning specified in Section
6.1(vi).
"Fixed Charges" shall mean scheduled principal and interest payments
and payments due under Capitalized Lease Obligations.
"Foreign Trade Regulations" means (i) any act that prohibits or
restricts, or empowers the President or any executive agency of the United
States of America to prohibit or restrict, exports to or financial transactions
with any foreign country or foreign national, (ii) the regulations with respect
to certain prohibited foreign trade transactions set forth at 22 C.F.R. parts
120-130 and 31
15
C.F.R. Part 500 and (iii) any order, regulation, ruling, interpretation,
direction, instruction or notice relating to any of the foregoing.
"Funding Liability" means (a) any Eurodollar deposit which was used (or
deemed by Section 3.2.6 to have been used) to fund any portion of a Loan subject
to a Eurodollar Pricing Option, and (b) any portion of a Loan subject to a
Eurodollar Pricing Option funded (or deemed by Section 3.2.6 to have been
funded) with the proceeds of any such Eurodollar deposit.
"GAAP" is defined in Section 1.2.
"General Partner" means U.S. Propane in its capacity as the general
partner of the Borrower.
"Governmental Authority" means any governmental agency, authority,
instrumentality or regulatory body, other than a court or other tribunal, in
each case whether federal, state, local or foreign.
"Guaranty" means, with respect to any Person, any direct or indirect
liability, contingent or otherwise, of such Person with respect to any
Indebtedness of another, including, without limitation, any such obligation
directly or indirectly guaranteed, endorsed (otherwise than for collection or
deposit in the ordinary course of business) or discounted or sold with recourse
by such Person, or in respect of each such Person is otherwise directly or
indirectly liable, including, without limitation, any such obligation in effect
guaranteed by such Person through any agreement (contingent or otherwise) to
purchase, repurchase or otherwise acquire such obligation or any security
therefor, or to provide funds for the payment or discharge of such obligation
(whether in the form of loans, advances, stock purchases, capital contributions
or otherwise), or to maintain the solvency or any balance sheet or other
financial condition of the obligor of such obligation, or to make payment for
any products, materials or supplies or for any transportation or services
regardless of the non-delivery or non-furnishing thereof, in any such case if
the purpose or intent of such agreement is to provide assurance that such
obligation will be paid or discharged, or that any agreements relating thereto
will be complied with, or that the holders of such obligation will be protected
against loss in respect thereof. The amount of any Guaranty shall be equal to
the outstanding principal amount of the obligation guaranteed or such lesser
amount to which the maximum exposure of the guarantor shall have been
specifically limited.
"Hazardous Substance" means any substance so designated pursuant to
CERCLA, asbestos, petroleum, urea formaldehyde insulation and petroleum
by-products (other than propane).
"Heritage Service" means Heritage Service Corp., a Delaware
corporation.
"Heritage Service Credit Agreement" means the First Amended and
Restated Revolving Credit Agreement dated as of May 31, 1999, between and among
Heritage Service, as borrower, the Banks, as lenders, the Administrative Agent
and the Co-Agent, as amended from time to time, including, without limitation,
that certain Fourth Amendment thereto dated as of July 16, 2001.
16
"Indebtedness" shall mean, with respect to any Person, without
duplication,
(a) any indebtedness for borrowed money, all obligations upon
which interest charges are customarily paid and all obligations
evidenced by any bond, note, debenture or other similar instrument
which such Person has directly or indirectly created, incurred or
assumed;
(b) all obligations of others secured by any Lien in respect
of property owned by such Person, whether or not such Person has
assumed or become liable for the payment of such indebtedness; provided
that the amount of such Indebtedness, if such Person has not assumed
the same or become liable therefor, shall in no event be deemed to be
greater than the fair market value from time to time of the property
subject to such Lien;
(c) any indebtedness, whether or not for borrowed money
(excluding trade payables and accrued expenses arising in the ordinary
course of business), with respect to which such Person has become
directly or indirectly liable and which represents the deferred
purchase price (or a portion thereof) or has been incurred to finance
the purchase price (or a portion thereof) of any property or service or
business acquired by such Person, whether by purchase, consolidation,
merger or otherwise;
(d) the principal component of any Capitalized Lease
Obligations to the extent such obligations would, in accordance with
GAAP, appear on a balance sheet of such Person;
(e) all Attributable Debt of such Person in respect of Sale
and Lease-Back Transactions not involving a Capitalized Lease
Obligation;
(f) all Redeemable Capital Stock of such Person valued at the
greater of its voluntary or involuntary maximum fixed repurchase price
plus accrued dividends;
(g) any Preferred Stock of any Subsidiary of such Person
valued at the liquidation preference thereof, or any mandatory
redemption payment obligations in respect thereof plus, in either case,
accrued dividends thereon;
(h) any indebtedness of the character referred to in clause
(a), (b), (c), (d), (e), (f) or (g) of this definition deemed to be
extinguished under GAAP but for which such Person remains legally
liable;
(i) any indebtedness of any other Person of the character
referred to in clause (a), (b), (c), (d), (e), (f), (g) or (h) of this
definition with respect to which the Person whose Indebtedness is being
determined has become liable by way of a Guaranty;
17
(j) all obligations, contingent or fixed, of such person as an
account party in respect of letters of credit (other than letters of
credit incurred in the ordinary course of business and consistent with
past practice);
(k) all liabilities of such Person in respect of unfunded
vested benefits under pension plans (determined on a net basis for all
such plans) and all asserted withdrawal liabilities of such Person or a
commonly controlled entity to a Multiemployer Plan;
(l) Swaps (other than Interest Rate Agreements);
(m) all obligations of such Person in respect of bankers'
acceptances (other than in respect of accounts payable to suppliers
incurred in the ordinary course of business consistent with past
practice); and
(n) any amendment, supplement, modification, deferral,
renewal, extension or refunding of any liability of the types referred
to in clauses (a) through (m) above.
For purposes hereof, the "maximum fixed repurchase price" of any
Redeemable Capital Stock which does not have a fixed repurchase price shall be
calculated in accordance with the terms of such Redeemable Capital Stock as if
such Redeemable Capital Stock were purchased on any date on which Indebtedness
shall be required to be determined pursuant to this Agreement and if such price
is based upon, or measured by, the fair market value of such Redeemable Capital
Stock, such fair market value shall be determined in good faith by the board of
directors or a similar governing body of the issuer of such Redeemable Capital
Stock.
"Intercreditor Agreement" means the Intercreditor and Agency Agreement
among the Purchasers of the Private Placement Notes, the initial Administrative
Agent (BankBoston) and the Collateral Agent dated as of June 25, 1996, as
amended, supplemented or modified from time to time in connection with the
transactions and modifications contemplated by this Agreement.
"Interest Coverage" means, as of any date, a ratio equal to the ratio
of (a) the Consolidated EBITDA of the Borrower for the period of four
consecutive fiscal quarters of the Borrower ending with the most recent fiscal
quarter for which the Borrower has delivered to the Banks, or is required under
Section 7A.1(i) to have delivered to the Banks, financial statements of the
Borrower to (b) the Consolidated Interest Expense of the Borrower for such
period of four consecutive fiscal quarters.
"Interest Rate Agreement" shall mean any fully matched interest rate
Swap entered into with the intent to protect the Borrower against fluctuations
in interest rates and entered into as a bona fide hedging arrangement and not
for purposes of investment or speculation.
"Investment" shall mean, as applied to any Person, any direct or
indirect purchase or other acquisition by such Person of stock or other
securities of any other Person, or any direct or indirect loan, advance or
capital contribution by such
18
Person to any other Person, and any other item which would be classified as an
"investment" on a balance sheet of such Person prepared in accordance with GAAP,
including without limitation any direct or indirect contribution by such Person
of property or assets to a joint venture, partnership or other business entity
in which such Person retains an interest (it being understood that a direct or
indirect purchase or other acquisition by such Person of assets of any other
Person (other than stock or other securities) shall not constitute an
"Investment" for purposes of this Agreement so long as such assets are all used
in the Business). For the purposes of Section 7B.5(v), the amount involved in
Investments made during any period shall be the aggregate cost to the Borrower
and its Subsidiaries of all such Investments made during such period, determined
in accordance with GAAP, but without regard to unrealized increases or decreases
in value, or write-ups, write-downs or write-offs, of such Investments and
without regard to the existence of any undistributed earnings or accrued
interest with respect thereto accrued after the respective dates on which such
Investments were made, less any net return of capital realized during such
period upon the sale, repayment or other liquidation of such Investments
(determined in accordance with GAAP, but without regard to any amounts received
during such period as earnings (in the form of dividends not constituting a
return of capital, interest or otherwise) on such Investments or as loans from
any Person in whom such Investments have been made). See Section 1.2(i).
"Investment Limit" shall have the meaning specified in Section 7B.5(v).
"La Grange" means La Grange Acquisition, L.P., a Texas limited
partnership, a subsidiary of the Master Partnership, together with all of its
existing and hereafter formed or acquired direct or indirect subsidiaries.
"La Grange Acquisition" means, collectively, (i) the acquisition by La
Grange Energy, L. P. of the equity interests of U.S. Propane, all in accordance
with the Acquisition Agreement dated as of November 6, 2003, as amended or
modified, and (ii) the acquisition by the Master Partnership of substantially
all of the assets of La Grange and its Subsidiaries and the other transactions
contemplated in connection therewith, all in accordance with the Contribution
Agreement dated as of November 6, 2003, as amended and modified.
"La Grange Credit Agreement" means the loan/credit agreement, as
amended, modified, supplemented or restated from time to time, governing the
establishment and administration of certain senior credit term loan and senior
revolving credit loan credit facilities in the maximum aggregate amount of
$450,000,000 being extended to La Grange, as borrower, by Fleet Securities, Inc.
and Wachovia Capital Markets, LLC, as joint lead arrangers, and Fleet National
and Wachovia Bank National Association and the group of additional investors to
become signatory parties thereto, as lenders.
"La Grange Partnership Agreement" means the Agreement of Limited
Partnership of La Grange as in effect on the Closing Date of the La Grange
Credit Agreement or thereafter executed by the signatory parties thereto, and as
the same may from time to time be amended, supplemented or otherwise modified in
accordance with the terms thereof.
"Legal Requirement" shall mean any law, statute, ordinance, decree,
requirement, order, judgment, rule or regulation (or published official
interpretation of any of the foregoing by any Governmental Authority) of any
Governmental Authority.
19
"Lending Officer" means each of such individuals whom the
Administrative Agent may designate by notice to the Borrower from time to time
as an officer who may receive telephone requests for borrowings under Section
2.1.3 and 2.2.3.
"Letter of Credit" is defined in Section 2.3.1.
"Letter of Credit Exposure" means, at any date, the sum of (a) the
aggregate face amount of all drafts that may then or thereafter be presented by
beneficiaries under all Letters of Credit then outstanding, plus (b) the
aggregate face amount of all drafts that the Letter of Credit Issuer has
previously accepted under Letters of Credit but has not paid.
"Letter of Credit Issuer" means, for any Letter of Credit, BOk or, in
the event BOk does not for any reason issue a requested Letter of Credit,
another Bank designated by the Administrative Agent to issue such Letter of
Credit in accordance with Section 2.3.
"Leverage Ratio" means, as of any date, a ratio equal to the ratio of
(a) the Consolidated Funded Indebtedness of the Borrower as of the last day of
the most recent fiscal quarter of the Borrower for which the Borrower has
delivered to the Banks, or is required under Section 7A.1(i) to have delivered
to the Banks, a consolidated balance sheet of the Borrower to (b) the
Consolidated EBITDA of the Borrower for the period of four consecutive fiscal
quarters ended on such last day.
"Liabilities" is defined in the second opening paragraph of the Note
Purchase Agreements in effect on the date hereof.
"Lien" means any mortgage, pledge, security interest, encumbrance,
contractual deposit arrangement, lien (statutory or otherwise) or charge of any
kind (including any agreement to give any of the foregoing, any conditional sale
or other title retention agreement, any lease in the nature thereof, and the
filing of or agreement to give any financing statement under the Uniform
Commercial Code of any jurisdiction) or any other type of preferential
arrangement for the purpose, or having the effect, of protecting a creditor
against loss or securing the payment or performance of an obligation.
"Loan" or "Loans" means each Working Capital Loan, Acquisition Loan or
Swingline Loan, and the Base Rate Loans and the Eurodollar Loans comprising such
Loans.
"Loan Documents" means this Agreement, the Intercreditor Agreement, the
Security Documents, the Service Revolver Notes and each agreement of Heritage
Service governing or securing the Service Revolver Notes.
"Local" shall mean Local Oklahoma Bank.
"Margin Period" means each period commencing on (and including) the
first day of any fiscal quarter of the Borrower and ending on (and including)
the earlier of (i) the last day of such fiscal quarter of the Borrower, or (ii)
the Final Maturity Date with respect to the Working Capital Loans.
20
"Margin Stock" means "margin stock" within the meaning of Regulation G,
T, U or X of the Board of Governors of the Federal Reserve System.
"Master Partnership" means Heritage Propane Partners, L.P., a Delaware
limited partnership.
"Material Adverse Effect" means (i) a material adverse effect on the
business, assets or financial condition of the Borrower or the Borrower and its
Subsidiaries taken as a whole after giving effect to the Transactions, (ii) a
material impairment of the ability of the Borrower or any Subsidiary of the
Borrower to perform any of its obligations under the Loan Documents to which it
is a party or (iii) a material adverse effect on the enforceability of any of
the Loan Documents.
"Maximum Amount of Acquisition Credit" is defined in Section 2.1.2.
"Maximum Amount of Working Capital Credit" is defined in Section 2.2.2.
"Memorandum" means the memorandum dated May, 1996, prepared by
Prudential Securities for use in connection with the Borrower's private
placement of the Private Placement Notes.
"MidFirst" shall mean MidFirst Bank.
"Multiemployer Plan" means a "multiemployer plan" as defined in section
4001(a)(3) of ERISA.
"Net Proceeds" means the proceeds of any sale of assets in the form of
cash or cash equivalents including payments in respect of deferred payment
obligations when received in the form of cash or cash equivalents net of (i)
brokerage commissions and other fees and expenses related to such sale, (ii)
provisions for any taxes payable as a result of such sale, (iii) amounts
required to be paid to any Person (other than the Borrower or any Subsidiary of
the Borrower) owning a beneficial interest in the assets sold, (iv) appropriate
amounts to be provided by the Borrower or any Subsidiary of the Borrower, as the
case may be, as a reserve required in accordance with GAAP against any
liabilities associated with such sale of assets and retained by the Borrower or
any Subsidiary of the Borrower, as the case may be, after such sale and (v)
amounts required to be applied to the repayment of Indebtedness (other than the
Private Placement Notes and amounts due under the Working Capital Facility or
Acquisition Facility) secured by a Lien on the assets sold.
"Non-Compete Obligations" is defined in Section 7B.3(viii).
"Noncompliance Event" means either or both of the following:
(a) failure of the Borrower to maintain a Leverage Ratio that
is (i) equal to or less than 4.75 to 1 from November 30, 2003 through
November 30, 2004, and (ii) equal to or less than 4.50 to 1 from
February 28, 2005 and thereafter; and
21
(b) failure of the Borrower to maintain Interest Coverage that
is equal to or greater than 2.25 to 1.
"Nonperforming Bank" is defined in Section 10.4.4.
"Note Purchase Agreements" means that certain (i) Note Purchase
Agreement between and among Heritage, Borrower and the Note Purchasers named in
the Purchaser Schedule annexed as Schedule I thereto dated as of June 25, 1996,
as amended, modified, supplemented or restated from time to time, (ii) Note
Purchase Agreement between and among Borrower, Heritage and the Note Purchasers
named in the Initial Purchaser Schedule annexed thereto dated as of November 19,
1997, as amended, modified, supplemented or restated from time to time, and
(iii) Note Purchase Agreement dated as of August 10, 2000, between and among
Heritage, Borrower and the Note Purchasers annexed as Scheduled I thereto, as
amended, modified, supplemented or restated from time to time.
"Note Purchasers" mean the purchasers of the Private Placement Notes.
"Notes" means the Working Capital Notes, the Acquisition Notes and each
promissory note evidencing Swingline Loans.
"Obligations" means and include any and all: (i) indebtedness,
obligations and liabilities of the Borrower to the Banks incurred or which may
be incurred or purportedly incurred hereafter pursuant to the terms of this
Agreement or any of the other Loan Documents, and any replacements, amendments,
extensions, renewals, substitutions, amendments and increases in amount thereof,
including such amounts as may be evidenced by the Notes and all lawful interest,
late charges, loan closing fees, service fees, origination/facility fees,
commitment fees, fees in lieu of balances, letter of credit processing and
issuance fees, indemnities and other charges, and all reasonable costs and
expenses incurred in connection with the preparation, filing and recording of
the Loan Documents, including reasonable attorneys fees and legal expenses; (ii)
all reasonable costs and expenses paid or incurred by the Banks and/or either
Agent or the Collateral Agent, including reasonable attorneys fees, in enforcing
or attempting to enforce collection of any Indebtedness and in enforcing or
realizing upon or attempting to enforce or realize upon any collateral or
security for any Indebtedness, including interest on all sums so expended by the
Banks and/or either Agent or the Collateral Agent accruing from the date upon
which such expenditures are made until paid, at an annual rate equal to the
Default Rate; and (iii) all sums expended by the Banks and/or either Agent or
the Collateral Agent in curing any Event of Default or Default of the Borrower
under the terms of this Agreement, the other Loan Documents or any other writing
evidencing or securing the payment of the Notes together with interest on all
sums so expended by the Banks and/or either Agent or the Collateral Agent
accruing from the date upon which such expenditures are made until paid, at an
annual rate equal to the Default Rate; and (iv) indebtedness, obligations and
liabilities of the Borrower arising out of the Note Purchase Agreements,
including, without limitation, that evidenced by the Private Placement Notes.
22
"Officer's Certificate" shall mean, as to any corporation, a
certificate executed on its behalf by the Chairman of the Board of Directors (if
an officer) or its President or one of its Vice Presidents, and its Treasurer,
or Controller, or one of its Assistant Treasurers or Assistant Controllers, and,
as to the Master Partnership or the Borrower, a certificate executed on behalf
of the Master Partnership or the Borrower, as the case may be, by its general
partner in a manner which would qualify such certificate (a) if such general
partner were a corporation, as an Officer's Certificate of such general partner
hereunder or (b) if such general partner were a partnership or other entity, as
a certificate executed on its behalf by Persons authorized to do so pursuant to
the constituting documents of such partnership or other entity.
"Operative Agreements" means the Contribution Agreement, the other
Conveyance Agreements, the Partnership Agreement and the La Grange Partnership
Agreement.
"Overdue Reimbursement Rate" means, at any date, the highest Applicable
Rate then in effect.
"Parity Debt" means Indebtedness of the Borrower (a) (other than the
Notes) incurred in accordance with clauses (i), (ii) and (iii) of Section 7B.2
and (b) Additional Parity Debt.
"Participation Interest" means the purchase by a Bank of a
participation interest in Letter of Credit Exposure as provided in Section
2.3.4, in Swingline Loans as provided in Section 2.5 and in Loans as provided in
Section 10.5.
"Partnership Agreement" means the Agreement of Limited Partnership of
the Borrower as in effect on the Closing Date, and as the same may from time to
time be amended, supplemented or otherwise modified in accordance with the terms
thereof.
"Partnership Documents" means the Agreement of Limited Partnership of
the Master Partnership and the Partnership Agreement, in each case as in effect
on the Closing Date and as the same may from time to time be amended,
supplemented or otherwise modified in accordance with the terms hereof and
thereof.
"Payment Date" means the last Banking Day of each March, June,
September and December occurring after the Initial Closing Date.
"PBGC" means the Pension Benefit Guaranty Corporation or any
Governmental Authority succeeding to any of its functions.
"Percentage Interest" is defined in Section 10.1.
"Percentage of Aggregate Available Cash" shall mean, with respect to
any fiscal quarter of the Borrower, the percentage determined by multiplying (i)
a fraction consisting of a numerator equal to the Borrower's Available Cash for
that period and a denominator equal to the Aggregate Available Cash by (ii) 100.
"Performing Bank" is defined in Section 10.4.4.
23
"Permits" is defined in Section 8.8.
"Permitted Banks" is defined in Section 7B.5.
"Permitted GP Entity" shall mean shall mean any one or combination of
(i) Persons or a group of unrelated persons (as such terms are defined in the
Exchange Act) who directly or indirectly beneficially own (as such term is
defined in Rule 13d-3 promulgated under the Exchange Act) the Capital Stock of
the General Partner immediately following consummation of the La Grange
Acquisition, and (ii) Current Management or group of related persons (as so
defined) including Current Management.
"Person" means and includes an individual, a partnership, a joint
venture, a corporation, a trust, an unincorporated organization and a government
or any department or agency thereof.
"Plan" means any "employee pension benefit plan" as such term is
defined in Section 3 of ERISA (other than a Multiemployer Plan) subject to the
provisions of Title IV of ERISA or Section 412 of the Code or Section 302 of
ERISA, and in respect of which the Borrower or any ERISA Affiliate is (or, if
such plan were terminated, would under Section 4069 of ERISA be deemed to be) an
"employer" as defined in Section 3(5) of ERISA.
"Preferred Stock" means, as applied to the Capital Stock of any Person,
Capital Stock of any class or classes (however designated), which is preferred
as to the payment of distributions or dividends, or upon any voluntary or
involuntary liquidation or dissolution of such Person, over shares or units of
Capital Stock of any other class of such Person.
"Priority Debt" means as of any date of determination, the sum, without
duplication, of (i) Indebtedness of the Subsidiaries of the Borrower (other than
Indebtedness owed to the Borrower or another Wholly-Owned Subsidiary), plus (ii)
Indebtedness of the Borrower and its Subsidiaries secured by Liens permitted by
clauses (i) and (vii) of Section 7B.3 and any renewals of such Liens permitted
by clause (xiv) of Section 7B.3
"Property" means any interest in any kind of property or asset whether
real, personal, or mixed, or tangible or intangible.
"PUHCA" is defined in Section 8.19.
"Private Placement Notes" means (i) the $120,000,000 senior secured
notes issued pursuant to the Memorandum, sold to the Purchasers and described
and defined in the Note Purchase Agreement dated as of June 25, 1996, as
amended, (ii) the $47,000,000 senior secured notes described and defined in the
Note Purchase Agreement dated as of November 19, 1997, as amended, and (iii) the
$250,000,000 senior secured notes described and defined in the Note Purchase
Agreement dated as of August 10, 2000, as amended.
"Redeemable Capital Stock" means, as of any date of determination, any
shares of any class or series of Capital Stock, that, either by the terms
thereof, by the terms of any security into
24
which such shares are convertible or exchangeable or by contract or otherwise,
are or upon the happening of an event or passage of time would be, required to
be redeemed prior to the stated maturity with respect to the principal of any
Loans or are redeemable at the option of the holder thereof at any time prior to
the stated maturity of any Loans, or are convertible into or exchangeable for
Indebtedness at any time prior to the stated maturity of any Loans.
"Register" is defined in Section 11.1.3.
"Replacement Bank" is defined in Section 11.3.
"Required Banks" means, with respect to any approval, consent,
modification, waiver or other action to be taken by the Administrative Agent or
the Banks under the Loan Documents which require action by the Required Banks,
such Banks that own at least 66-2/3% of the Percentage Interests; provided,
however, that with respect to any matters referred to in the proviso to Section
10.6, Required Banks means such Banks as own at least the respective portions of
the Percentage Interests required by Section 10.6.
"Responsible Officer" means the chief executive officer, chief
operating officer, chief financial officer or chief accounting officer of the
Borrower or any other officer of the Borrower involved principally in its
financial administration or its controllership function.
"Restricted Payment" means any payment or other distribution, direct or
indirect, in respect of any partnership or other equity interest in the
Borrower, except a distribution payable solely in additional partnership or
other equity interests in the Borrower, and any payment, direct or indirect on
account of the redemption, retirement, purchase or other acquisition of any
partnership or other equity interest in the Borrower.
"Sale and Lease-Back Transaction" means, with respect to any Person (a
"Transferor"), any arrangement (other than between the Borrower and a
Wholly-Owned Restricted Subsidiary or between Wholly-Owned Restricted
Subsidiaries) whereby (a) property (the "Subject Property") has been or is to be
disposed of by such Transferor to any other Person with the intention on the
part of such Transferor of taking back a lease of such Subject Property pursuant
to which the rental payments are calculated to amortize the purchase price of
such Subject Property substantially over the useful life of such Subject
Property, and (b) such Subject Property is in fact so leased by such Transferor
or an Affiliate of such Transferor.
"Securities Act" means the Securities Act of 1933, as amended.
"Security Agreement" shall mean the Security Agreement from the
Borrower and U.S. Propane (formerly Heritage), as debtors and assignors, to the
Collateral Agent, for the benefit of the Banks and the Note Purchasers, as
secured parties, encumbering the Collateral described therein and covered
thereby.
"Security Documents" shall mean the Security Agreement, the
Certificates and Stock Powers and the Financing Statements.
25
"Senior Debt" shall mean Indebtedness of the Borrower which is not
expressed to be junior or subordinate to any other Indebtedness of the Borrower.
"Service Revolver Notes" shall mean those certain promissory notes from
Heritage Service payable to the order of the Banks as more particularly
described in the Heritage Service Credit Agreement.
"Significant Subsidiary Group" shall mean any Subsidiary of the
Borrower, or any group of Subsidiaries of the Borrower, which at any time of
determination account for (or in the case of a recently formed or acquired
Subsidiary would have so accounted for on a pro forma basis) more than 5% of
consolidated operating revenues of the Borrower and its Subsidiaries for the
fiscal year most recently ended or more than 5% of consolidated total assets of
the Borrower and its Subsidiaries as of the end of the most recently ended
fiscal quarter, in each case computed in accordance with GAAP.
"Specified Entities" shall mean, (A) until such time as the La Grange
Acquisition is consummated, any one or more of the following entities: (i) Atmos
Energy Corporation, (ii) Piedmont Natural Gas Company, Inc., (iii) AGL
Resources, Inc., and (iv) TECO Energy, Inc., or a Successor to any entity
referred to in clause (i), (ii), (iii) or (iv) of this definition, and (B) from
and after the consummation of the La Grange Acquisition, any one or combination
of the following: (i) La Grange, any Wholly-Owned Subsidiary thereof, or a
Successor thereto, and (ii) any Permitted GP Entity.
"Subsidiary" shall mean, with respect to any Person, any corporation,
limited liability company, partnership, joint venture, association, trust or
other entity of which (or in which) more than 50% of (a) the issued and
outstanding Capital Stock having ordinary voting power to elect a majority of
the board of directors of such corporation (irrespective of whether at the time
Capital Stock of any other class or classes of such corporation shall or might
have voting power upon the occurrence of any contingency), (b) the interests in
the capital or profits of such partnership, limited liability company, joint
venture or association with ordinary voting power to elect a majority of the
board of directors (or Persons performing similar functions) of such
partnership, limited liability company, joint venture or association, or (c) the
beneficial interests in such trust or other entity with ordinary voting power to
elect a majority of the board of trustees (or Persons performing similar
functions) of such trust or other entity, is at the time directly or indirectly
owned or controlled by such Person, by such Person and one or more of its other
Subsidiaries, or by one or more of such Person's other Subsidiaries. For the
purposes of any computation under Section 6A or clause (xiii) of Section 6B, the
defined terms Consolidated Debt Service, Consolidated EBITDA, Consolidated
Funded Indebtedness, Consolidated Interest Expense and Consolidated Pro Forma
Maximum Debt Service shall be calculated on the basis that Bi-State is a
Subsidiary of the Borrower, but only as long as the Borrower shall own 50% or
more of the interests in the capital or profits of Bi-State with ordinary voting
power to elect a majority of the board of directors (or Persons performing
similar functions) thereof.
"Successor" shall mean, with respect to the Specified Entity, any
entity in which the holders of the Capital Stock of such Specified Entity
outstanding immediately prior to a consolidation, acquisition or merger
involving such Specified Entity hold, directly or indirectly
26
through Wholly-Owned Subsidiaries, at least a majority of the Capital Stock
immediately after such consolidation, acquisition or merger.
"Swaps" shall mean, with respect to any Person, payment obligations
(fixed or contingent) with respect to interest rate swap agreements, interest
rate cap agreements, interest rate collar agreements, currency swaps and similar
obligations obligating such Person to make payments, whether periodically or
upon the happening of a contingency. For the purposes of this Agreement, the
amount of the obligation under any Swap shall be the amount determined in
respect thereof as of the end of the then most recently ended fiscal quarter of
such Person, based on the assumption that such Swap had terminated at the end of
such fiscal quarter, and in making such determination, if any agreement relating
to such Swap provides for the netting of amounts payable by and to such Person
thereunder or if any such agreement provides for the simultaneous payment of
amounts by and to such Person, then in each such case, the amount of such
obligation shall be the net amount so determined.
"Swingline Facility" means the commitment of the Swingline Lender to
make Swingline Loans in an aggregate principal amount at any time outstanding up
to the Swingline Facility Amount and the commitment of the Banks to purchase
participating interests equal to their respective Percentage Interests in the
Swingline Loans as provided in Section 2.5, as such amounts may be reduced from
time to time in accordance with the provisions hereof.
"Swingline Facility Amount" means the remainder of (i) 10,000,000 minus
(ii) the outstanding principal balance on the Heritage Service Credit Agreement.
"Swingline Lender" means BOk and its successors and permitted assigns.
"Swingline Loan" means a swingline working capital loan made by the
Swingline Lender pursuant to the provisions of Section 2.4.
"Swingline Note" is defined in Section 2.4.
"Tax" means any present or future tax, levy, duty, impost, deduction,
withholding or other charges of whatever nature at any time required by any Bank
Legal Requirement (i) to be paid by any Bank or (ii) to be withheld or deducted
from any payment otherwise required hereby to be made to any Bank, in each case
on or with respect to its obligations hereunder, the Loan, any payment in
respect of the Credit Obligations or any Funding Liability not included in the
foregoing; provided, however, that the term "Tax" shall not include taxes
imposed upon or measured by the net income of such Bank (other than withholding
taxes) or franchise taxes.
"Total Assets" means, as of any date of determination, the consolidated
total assets of the Borrower and its Subsidiaries as would be shown on a
consolidated balance sheet of the Borrower and its Subsidiaries prepared in
accordance with GAAP as of that date. See Section 1.2(i).
"Tulsa Office" means the principal banking office of BOk in Tulsa,
Oklahoma.
27
"UCC" means the Uniform Commercial Code.
"Uniform Customs and Practice" is defined in Section 2.3.7.
"United States" or "U.S." means the United States of America.
"United States Funds" means such coin or currency of the United States
as at the time shall be legal tender therein for the payment of public and
private debts.
"Units" shall mean, collectively, the Common Units and each other
limited partnership interest which may be issued from time to time and which are
entitled by their terms to receive distributions.
"Unused Proceeds Reserve" means, as of any date of determination, all
amounts theretofore offered to prepay Parity Debt under Section 7B.7(iii)(c)(ii)
and to prepay Notes under Section 4.2, the prepayment of which was declined by
the applicable lenders, less the portion of such amounts theretofore applied by
the Borrower to operations or capital expenditures in connection with the
conduct of the Borrower's business.
"Unutilized Taking Proceeds" means, as of any date, any insurance or
condemnation proceeds (net of the reasonable costs of proceedings in connection
therewith and settlements in respect thereof) in excess of $100,000 with respect
to any single occurrence that were received by the Borrower or any of its
Subsidiaries in respect of any damage, destruction, condemnation or other taking
of all or any portion of the properties or assets of the Borrower or any of its
Subsidiaries and that have not been reinvested by the Borrower or any of its
Subsidiaries within a period of twelve months after such receipt in the
restoration, modification or replacement of the properties or assets in respect
of which such insurance or condemnation proceeds were received.
"U.S. Bank" shall mean U. S Bank National Association.
"USPLLC" shall mean U.S. Propane, LLC, a Delaware limited liability
company, the general partner of U.S. Propane.
"U.S. Propane" means U.S. Propane, L.P., a Delaware limited
partnership, and successor to Heritage Holdings, Inc., a Delaware corporation
("Heritage").
"Voting Stock" means, with respect to any corporation, any shares of
stock of such corporation the holders of which are entitled under ordinary
circumstances to vote for the election of directors of such corporation
(irrespective of whether at the time stock of any other class or classes shall
have or might have voting power by reason of the happening of any contingency).
"Wholly-Owned" means, as applied to any Subsidiary of any Person, a
Subsidiary at least 98% (by vote or value) of the outstanding Equity Interests
(other than directors' qualifying shares, if required by law) of all classes,
taken together as a whole, of which are at the time
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owned by such Person or by one or more of its Wholly-Owned Subsidiaries or by
such Person and one or more of its Wholly-Owned Subsidiaries.
"Withdrawal Liability" shall mean liability to a Multiemployer Plan as
a result of a complete or partial withdrawal from such Multiemployer Plan, as
such terms are defined in Part I of Subtitle E of Title IV of ERISA.
"Working Capital Facility" means the agreement of the Banks herein to
make Working Capital Loans, to provide for the issuance of Letters of Credit
and, insofar as the Swingline Lender is concerned, to make Swingline Loans.
"Working Capital Loan Account" is defined in Section 2.2.4.
"Working Capital Loan" is defined in Section 2.2.4.
"Working Capital Notes" is defined in Section 2.2.4.
1.2 Accounting Principles, Terms and Determinations. All references in
this Agreement to "generally accepted accounting principles" or to "GAAP" shall
be deemed to refer to generally accepted accounting principles in effect in the
United States at the time of application thereof, but subject to the provisions
of this Section 1.2. Unless otherwise specified herein, all accounting terms
used herein shall be interpreted, all determinations with respect to accounting
matters hereunder shall be made, and all unaudited financial statements and
certificates and reports as to financial matters required to be prepared
hereunder shall be prepared in accordance with generally accepted accounting
principles, applied on a basis consistent with the most recent audited
consolidated financial statements of the Borrower and its Subsidiaries delivered
pursuant to clause (ii) of Section 7A.1.
1.3 Construction. Except as otherwise explicitly specified to the
contrary or unless the context clearly requires otherwise, (i) the capitalized
term "Section" refers to sections of this Agreement, (ii) the capitalized term
"Exhibit" refers to exhibits to this Agreement, (iii) references to a particular
Article Section include all subsections thereof, (iv) the word "including" shall
be construed as "including without limitation", (v) terms defined in the UCC and
not otherwise defined herein have the meaning provided under the UCC, (vi)
references to a particular statute or regulation include all rules and
regulations thereunder and any successor statute, regulation or rules, in each
case as from time to time in effect and (vii) references to a particular Person
include such Person's successors and assigns to the extent not prohibited by
this Agreement and the other Loan Documents. References to "the date hereof"
mean the date first set forth above.
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ARTICLE II
THE CREDITS
2.1 Acquisition Facility.
2.1.1 Acquisition Loan. Subject to all the terms and conditions of this
Agreement and so long as no Default exists, from time to time on and after the
Closing Date and prior to the Final Maturity Date, the Banks will, severally in
accordance with their respective Percentage Interests, make loans to the
Borrower in such amounts as may be requested by the Borrower in accordance with
Section 2.1.3, constituting in part, a refinancing of the Acquisition Loan
previously governed by the Existing Credit Agreement. The sum of the aggregate
principal amount of loans made under this Section 2.1.1 at any one time
outstanding shall in no event exceed the Maximum Amount of Acquisition Credit.
2.1.2 Maximum Amount of Acquisition Credit. The term "Maximum Amount of
Acquisition Credit" means, on any date on or prior to the Final Maturity Date,
the remainder of (x) the lesser of (a) $75,000,000 or (b) the aggregate
Acquisition Loan Commitments described in Section 10.1, as amended from time to
time, or such lesser amount as the Borrower may specify from time to time by
written notice to the Administrative Agent.
2.1.3 Acquisition Loan Borrowing Requests. The Borrower may from time
to time request a loan under Section 2.1.1 by providing to a Lending Officer of
the Administrative Agent either a notice in writing or telephonic notice
promptly confirmed in writing. Such notice must be not later than noon (Tulsa,
Oklahoma time) three (3) Banking Days prior to the requested funding date for a
Eurodollar Loan, otherwise two (2) Banking Days prior to the requested funding
date for such loan. The notice must specify (a) the amount of the requested loan
(which shall be not less than $500,000 and in integral multiples of $100,000 in
excess thereof) and (b) the requested funding date therefor (which shall be a
Banking Day). Each such notice shall be accompanied by (i) a memorandum from the
Chief Financial Officer of Borrower's general partner summarizing the proposed
acquisition or capital expenditures to be financed by the advance, (ii) in the
case of an acquisition a complete copy of the signed letter of intent (with all
exhibits or schedules thereto to the extent available); provided, however,
Borrower shall not make a loan request under Section 2.1.1 for any acquisition
of a Business described in clause (ii) of the definition thereof for an amount
in excess of $20,000,000 without the prior written consent of the Required
Banks, (iii) a full and complete copy of the Borrower's internal acquisition or
capital expenditure model (in general form, content and detail as utilized by
the Borrower for similar acquisitions or capital expenditures prior to the
Closing Date) and, in the case of borrowings hereunder relating to acquisitions
or capital expenditures costing in excess of $1,000,000 and in each other case
in which the Required Banks shall so request, calculations demonstrating
Borrower's continued compliance with the financial ratios of Section 7B.1(i) and
(ii) hereof as of and following the closing of such proposed acquisition or
capital expenditure
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(utilizing, for the purpose of such demonstration, and subject to the
calculation of Consolidated EBITDA resulting from such proposed Asset
Acquisition, including adjustments permitted thereby, the financial statements
of the Borrower and of the acquired business or asset for the most recent period
of twelve consecutive months (as opposed to the immediately preceding four full
fiscal quarters) for which such statements are available), and (iv) a full,
completed copy of the confidential business questionnaire in the form as
utilized by Borrower prior to the Closing Date (collectively the
"Acquisition/Capex Due Diligence Packet"). Upon receipt of such notice, the
Administrative Agent will promptly inform each other Bank (by telephone or
otherwise). Each such loan will be made at the Administrative Agent's Tulsa
Office by depositing the amount thereof to the Acquisition Loan Account of the
Borrower with the Administrative Agent. In connection with each such loan, the
Borrower shall furnish to the Administrative Agent a certificate in
substantially the form of Exhibit 2.1.3.
2.1.4 Acquisition Loan Account: Acquisition Notes. The Administrative
Agent will establish on its books an internal acquisition loan account for the
Borrower (the "Acquisition Loan Account") for administrative purposes only,
which such Administrative Agent shall administer as follows: (a) the
Administrative Agent shall add to the Acquisition Loan Account, and the
Acquisition Loan Account shall evidence, the principal amount of all loans from
time to time made by the Banks to the Borrower pursuant to Section 2.1.1 and (b)
the Administrative Agent shall reduce the Acquisition Loan Account by the amount
of all payments made on account of the Obligation evidenced by the Acquisition
Loan Account. The aggregate principal amount of the Indebtedness from time to
time evidenced by the Acquisition Loan Account is referred to as the
"Acquisition Loan." The Acquisition Loan shall be deemed owed to each Bank
severally in accordance with such Bank's Percentage Interest, and all payments
credited to the Acquisition Loan Account shall be for the account of each Bank
in accordance with its Percentage Interest. The Borrower's obligations to pay
each Bank's Percentage Interest in the Acquisition Loan (i) is evidenced by a
separate note of the Borrower payable to the order of the Banks and issued
pursuant to the Existing Credit Agreement (except only for BOk) and (ii) insofar
as BOk is concerned shall be evidenced by a replacement note in substantially
the form of Exhibit 2.1.4 (such notes described in (i) and (ii) above,
collectively, the "Acquisition Notes"), payable to each Bank in maximum
principal amount equal to such Bank's Percentage Interest in the total
Commitments constituting the Acquisition Facility.
2.2 Working Capital Facility.
2.2.1 Working Capital Loan. Subject to all the terms and conditions of
this Agreement and so long as no Default exists, from time to time on and after
the Closing Date and prior to the Final Maturity Date with respect to the
Working Capital Loan the Banks will, severally in accordance with their
respective Percentage Interests, make loans to the Borrower in such amounts as
may be requested by the Borrower in accordance with Section 2.2.3, constituting
in part, a refinancing of the Working Capital Loans previously governed by the
Existing Credit Agreement. The sum of the aggregate principal amount of loans
made under this Section 2.2.1 at any one time outstanding
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(including the sum of aggregate principal amount of all (i) Swingline Loans then
outstanding plus HSC Loans issued under the Heritage Service Credit Agreement
then outstanding) plus the Letter of Credit Exposure shall in no event exceed
the Maximum Amount of Working Capital Credit.
2.2.2 Maximum Amount of Working Capital Credit. The term "Maximum
Amount of Working Capital Credit" means, on any date, the lesser of (a)
$75,000,000 minus the outstanding principal balance on the Indebtedness
permitted by Section 7B.2(v) or such lesser amounts as the Borrower may specify
from time to time by written notice to the Administrative Agent, or (b) the
aggregate Working Capital Loan Commitments described in Section 10.1, as amended
from time to time; provided that the Maximum Working Capital Loan Commitment of
BOk specified in Section 10.1 shall be deemed to include at any time the then
outstanding principal amount of such Indebtedness permitted by Section 7B.2(v)
pursuant to the Heritage Service Credit Agreement, and further provided that the
aggregate outstanding principal amount of Working Capital Loan shall be reduced
to $10,000,000 (excluding undrawn amounts on Letters of Credit issued pursuant
to Section 2.3) for a period of not less than 30 consecutive calendar days at
least one time during each fiscal year of the Borrower (the "Annual Clean-Up").
Failure by the Borrower to comply with the provisions of the Annual Clean-Up
shall constitute a failure to pay the Loans when due and an Event of Default
under Section 9.1.
2.2.3 Working Capital Borrowing Requests. The Borrower may from time to
time request a loan under Section 2.2.1 by providing to a Lending Officer of the
Administrative Agent, either a notice in writing or telephonic notice promptly
confirmed in writing. Such notice must be not later than noon (Tulsa, Oklahoma
time) three (3) Banking Days prior to the requested funding date for a
Eurodollar Loan, otherwise two (2) Banking Days prior to the requested funding
date for such loan. The notice must specify (a) the amount of the requested loan
(which shall be not less than $100,000 and in integral multiples of $50,000 in
excess thereof) and (b) the requested advance date therefor (which shall be a
Banking Day). Upon receipt of such notice, such Administrative Agent will
promptly inform each other Bank (by telephone or otherwise). Each such loan will
be made at the Administrative Agent's Tulsa Office by depositing the amount
thereof to the Borrower's Working Capital Loan Account with the Administrative
Agent. In connection with each such loan, the Borrower shall furnish to the
Administrative Agent, a certificate in substantially the form of Exhibit 2.2.3.
2.2.4 Working Capital Loan Account: Working Capital Notes. The
Administrative Agent, will establish on its books an internal working capital
loan account for the Borrower (the "Working Capital Loan Account"), for
administrative purposes only, which such Administrative Agent shall administer
as follows: (a) such Administrative Agent shall add to the Working Capital Loan
Account, and the Working Capital Loan Account shall evidence, the principal
amount of all loans made from time to time by the Banks to the Borrower pursuant
to Section 2.2.1 and (b) such Administrative Agent shall reduce the Working
Capital Loan Account by the amount of all payments made on account of the
Indebtedness evidenced by the Working Capital Loan Account.
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The aggregate principal amount of the Indebtedness evidenced by the Working
Capital Loan Account is referred to as the "Working Capital Loan." The Working
Capital Loan shall be deemed owed to each Bank severally in accordance with such
Bank's Percentage Interest, and all payments (other than Swingline Loans)
credited to the working Capital Loan Account shall be for the account of each
Bank in accordance with its Percentage Interest. The Borrower's obligations to
pay each Bank's Percentage Interest in the Working Capital Loan (other than
Swingline Loans) (i) is evidenced by a separate note of the Borrower payable to
the order of the Banks and issued pursuant to the Existing Credit Agreement
(except only for BOk) and (ii) insofar as BOk is concerned, shall be evidenced
by a replacement note in substantially the form of Exhibit 2.2.4 (such notes
described in (i) and (ii) above, collectively, the "Working Capital Notes"),
payable to each Bank in maximum principal amount equal to such Bank's Percentage
Interest in the total Commitments constituting the Working Capital Facility.
2.2.5 Swingline Loan Requests. In the case of a request for a Swingline
Loan under the Working Capital Facility, by delivering a written notice pursuant
to Section 2.2.3 hereof to the Swingline Lender not later than 12:00 noon
(Tulsa, Oklahoma time) on the Banking Day of the requested borrowing. Each such
request for borrowing shall be irrevocable and shall specify (i) that a
Swingline Loan is requested, (ii) the date of the requested borrowing (which
shall be a Banking Day), and (iii) the requested maturity. Each Swingline Loan
shall have a maturity date as the Borrower may request and the Swingline Lender
may agree, but in no event shall the term of any Swingline Loan be longer than
twenty (20) days from the date of borrowing. The principal amount of each
Swingline Loan shall be due and payable the earlier of (i) the maturity date
agreed to by the Swingline Lender and the Borrower at the time such Swingline
Loan is made, and (ii) the Final Maturity Date.
2.3 Letters of Credit.
2.3.1 Issuance of Letters of Credit. Subject to all the terms and
conditions of this Agreement and so long as no Default exists, from time to time
on and after the Closing Date and prior to 30 days prior to the Final Maturity
Date with respect to the Working Capital Loan, the Letter of Credit Issuer will
issue for the account of the Borrower one or more irrevocable documentary or
standby letters of credit (the "Letters of Credit"). Letter of Credit Exposure
plus the Working Capital Loan shall in no event exceed the Maximum Amount of
Working Capital Credit. Letter of Credit Exposure shall in no event exceed
$5,000,000.
2.3.2 Requests for Letters of Credit. The Borrower may from time to
time request a Letter of Credit to be issued by providing to the Letter of
Credit Issuer (and the Administrative Agent if the Letter of Credit Issuer is
not the Administrative Agent) a notice which is actually received not less than
one (1) Banking Day prior to the requested issuance date for such Letter of
Credit specifying (a) the amount of the requested Letter of Credit, (b) the
beneficiary thereof, (c) the requested issuance date and (d) the principal terms
of the text for such Letter of Credit. Each Letter of Credit will be issued by
forwarding it to the Borrower or to such other Person as directed in writing by
the
33
Borrower. In connection with the issuance of any Letter of Credit, the Borrower
shall furnish to the Letter of Credit Issuer (and the Administrative Agent if
the Letter of Credit Issuer is not the Administrative Agent) a certificate in
substantially the form of Exhibit 2.3.2. and any customary application forms
required by the Letter of Credit Issuer.
2.3.3 Form and Expiration of Letters of Credit. Each Letter of Credit
issued under this Section 2.3 and each draft accepted or paid under such a
Letter of Credit shall be issued, accepted or paid, as the case may be, by the
Letter of Credit Issuer at its principal office. No Letter of Credit shall
provide for the payment of drafts drawn thereunder, and no draft shall be
payable, at a date which is later than the earlier of (a) the date twelve months
after the date of issuance or (b) 15 days prior to the Final Maturity Date with
respect to the Working Capital Loans. Each Letter of Credit and each draft
accepted under a Letter of Credit shall be in such form and minimum amount, and
shall contain such terms, as the Letter of Credit Issuer and the Borrower may
agree upon at the time such Letter of Credit is issued, including a requirement
of not less than three Banking Days after presentation of a draft before payment
must be made thereunder.
2.3.4 Banks' Participation in Letters of Credit. Upon the issuance of
any Letter of Credit, a participation therein, in an amount equal to each Bank's
Percentage Interest, shall automatically be deemed granted by the Letter of
Credit Issuer to each Bank on the date of such issuance and the Banks shall
automatically be obligated, as set forth in Section 10.4, to reimburse the
Letter of Credit Issuer to the extent of their respective Percentage Interests
for all obligations incurred by the Letter of Credit Issuer to third parties in
respect of such Letter of Credit not reimbursed by the Borrower. The Letter of
Credit Issuer will send to each Bank (and the Administrative Agent if the Letter
of Credit Issuer is not the Administrative Agent) a confirmation regarding the
participations in Letters of Credit outstanding during such month.
2.3.5 Presentation. The Letter of Credit Issuer may accept or pay any
draft presented to it, regardless of when drawn and whether or not negotiated,
if such draft, the other required documents and any transmittal advice are
presented to the Letter of Credit Issuer and dated on or before the expiration
date of the Letter of Credit under which such draft is drawn. Except insofar as
instructions actually received may be given by the Borrower in writing expressly
to the contrary with regard to, and prior to, the Letter of Credit Issuer's
issuance of any Letter of Credit for the account of the Borrower and such
contrary instructions are reflected in such Letter of Credit, to the maximum
extent permitted by law the Letter of Credit Issuer may honor as complying with
the terms of the Letter of Credit and with this Agreement any drafts or other
documents otherwise in order signed or issued by an administrator, executor,
conservator, trustee in bankruptcy, debtor in possession, assignee for benefit
of creditors, liquidator, receiver or other legal representative of the party
authorized under such Letter of Credit to draw or issue such drafts or other
documents.
2.3.6 Payment of Drafts. At such time as a Letter of Credit Issuer
makes any payment on a draft presented or accepted under a Letter of Credit, the
Borrower will on demand pay to such Letter of Credit Issuer in immediately
available funds the amount of
34
such payment. Unless the Borrower shall otherwise pay to the Letter of Credit
Issuer the amount required by the foregoing sentence, such amount shall be
considered a loan under Section 2.2.1 and part of the Working Capital Loan.
2.3.7 Uniform Customs and Practice. The Uniform Customs and Practice
for Documentary Credits (1993 Revision), International Chamber of Commerce
Publication No. 500, and any subsequent revisions thereof approved by a Congress
of the International Chamber of Commerce and adhered to by the Letter of Credit
Issuer (the "Uniform Customs and Practice"), shall be binding on the Borrower
and the Letter of Credit Issuer except to the extent otherwise provided herein,
in any Letter of Credit or in any other Loan Document. Anything in the Uniform
Customs and Practice to the contrary notwithstanding:
(a) Neither the Borrower nor any beneficiary of any Letter of
Credit shall be deemed an agent of any Letter of Credit Issuer.
(b) With respect to each Letter of Credit, neither any Letter
of Credit Issuer nor its correspondents shall be responsible, except to
the extent required by law, for or shall have any duty to ascertain:
(i) the genuineness of any signature;
(ii) the validity, form, sufficiency, accuracy,
genuineness or legal effect of any endorsements;
(iii) delay in giving, or failure to give, notice of
arrival, notice of refusal of documents or of discrepancies in
respect of which any Letter of Credit Issuer refuses the
documents or any other notice, demand or protest;
(iv) the performance by any beneficiary under any
Letter of Credit of such beneficiary's obligations to the
Borrower;
(v) inaccuracy in any notice received by the Letter
of Credit Issuer;
(vi) the validity, form, sufficiency, accuracy,
genuineness or legal effect of any instrument, draft,
certificate or other document required by such Letter of
Credit to be presented before payment of a draft, or the
office held by or the authority of any Person signing any of
the same; or
(vii) failure of any instrument to bear any reference
or adequate reference to such Letter of Credit, or failure of
any Person to note the amount of any instrument on the reverse
of such Letter of Credit or to surrender such Letter of Credit
or to forward documents in the manner required by such Letter
of Credit.
35
(c) Except as otherwise required by law, the occurrence of any
of the events referred to in the Uniform Customs and Practice or in the
preceding clauses of this Section 2.3.7 shall not affect or prevent the
vesting of any of the Letter of Credit Issuer's rights or powers
hereunder or the Borrower's obligation to make reimbursement of amounts
paid under any Letter of Credit or any draft accepted thereunder.
(d) The Borrower will promptly examine (i) each Letter of
Credit (and any amendments thereof) sent to it by a Letter of Credit
Issuer and (ii) all instruments and documents delivered to it from time
to time by such Letter of Credit Issuer. The Borrower will notify the
Letter of Credit Issuer of any claim of noncompliance by notice
actually received within three Banking Days after receipt of any of the
foregoing documents, the Borrower being conclusively deemed to have
waived any such claim against such Letter of Credit Issuer and its
correspondents unless such notice is given. The Letter of Credit Issuer
shall have no obligation or responsibility to send any such Letter of
Credit or any such instrument or document to the Borrower.
(e) In the event of any conflict between the provisions of
this Agreement and the Uniform Customs and Practice and Article 5 of
the Uniform Commercial Code, the provisions of this Agreement shall
govern to the maximum extent permitted by applicable law.
2.3.8 Subrogation. Subject to the terms of the Intercreditor Agreement,
upon any payment by a Letter of Credit Issuer under any Letter of Credit and
until the reimbursement of such Letter of Credit Issuer by the Borrower with
respect to such payment, the Letter of Credit Issuer shall be entitled to be
subrogated to, and to acquire and retain, the rights which the Person to whom
such payment is made may have against the Borrower, all for the benefit of the
Banks. Subject to the terms of the Intercreditor Agreement, the Borrower will
take such action as the Letter of Credit Issuer may reasonably request,
including requiring the beneficiary of any Letter of Credit to execute such
documents as the Letter of Credit Issuer may reasonably request, to assure and
confirm to the Letter of Credit Issuer such subrogation and such rights,
including the rights, if any, of the beneficiary to whom such payment is made in
accounts receivable, inventory and other properties and assets of the Borrower.
2.3.9 Modification, Consent, etc. If the Borrower requests or consents
in writing to any modification or extension of any Letter of Credit, or waives
any failure of any draft, certificate or other document to comply with the terms
of such Letter of Credit, and if the Letter of Credit Issuer consents thereto,
the Letter of Credit Issuer shall be entitled to rely on such request, consent
or waiver. This Agreement shall be binding upon the Borrower with respect to
such Letter of Credit as so modified or extended, and with respect to any action
taken or omitted by such Letter of Credit Issuer pursuant to any such request,
consent or waiver.
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2.4 Swingline Facility Sublimit. During the period of time in which
Working Capital Loans may be requested under the Working Capital Facility, and
subject to the terms and conditions of this Agreement, the Swingline Lender
agrees to make certain revolving loans (collectively the "Swingline Loans") to
the Borrower; provided that the aggregate principal amount of Swingline Loans at
any time outstanding shall not exceed the Swingline Facility Amount. All
Swingline Loans shall be Base Rate Loans evidenced by Borrower's promissory
notes issued to the order of the Swingline Lender (collectively, the "Swingline
Notes"), and may be repaid and reborrowed in accordance with the provisions
hereof.
2.5 Additional Provisions Relating to Swingline Loans. The Swingline
Bank may, at any time, in its sole discretion, by written notice to the Borrower
and the Banks, demand repayment of its Swingline Loans by way of a Working
Capital Loan advance, in which case the Borrower shall be deemed to have
requested a Revolving Loan advance comprised solely of Bank Prime Rate Loans in
the amount of such Swingline Loans; provided, however, that any such demand
shall be deemed to have been given one Business Day prior to the Final Maturity
Date and on the date of the occurrence of any Event of Default described in
Section 9.1 and upon acceleration of the indebtedness hereunder and the exercise
of remedies in accordance with the provisions of Section 9.2. Each Bank hereby
irrevocably agrees to make its Percentage Interest of each such Working Capital
Loan in the amount, in the manner and on the date specified in the preceding
sentence notwithstanding (i) the amount of such borrowing may not comply with
the minimum amount for advances of Working Capital Loans otherwise required
hereunder, (ii) whether any conditions specified in Section 5.3 are then
satisfied, (iii) whether a Default or an Event of Default then exists, (iv)
failure of any such request or deemed request for Working Capital Loan to be
made by the time otherwise required hereunder, (v) whether the date of such
borrowing is a date on which Working Capital Loans are otherwise permitted to be
made hereunder or (vi) any termination of the Commitments relating thereto
immediately prior to or contemporaneously with such borrowing. In the event that
any Working Capital Loan cannot for any reason be made on the date otherwise
required above (including as a result of the commencement of a proceeding under
the Bankruptcy Code with respect to the Borrower), then each Bank hereby agrees
that it shall forthwith purchase (as of the date such borrowing would otherwise
have occurred, but adjusted for any payments received from the Borrower on or
after such date and prior to such purchase) from the Swingline Bank such
Participation Interests in the outstanding Swingline Loans as shall be necessary
to cause each such Bank to share in such Swingline Loans ratably based upon its
Percentage Interest of the Working Capital Committed Amount (determined before
giving effect to any termination of the Commitments pursuant to Section 9.2),
provided that (A) all interest payable on the Swingline Loans shall be for the
account of the Swingline Bank until the date as of which the respective
Participation Interest is funded and (B) at the time any purchase of
Participation Interests pursuant to this sentence is actually made, the
purchasing Bank shall be required to pay to the Swingline Bank, to the extent
not paid to the Swingline Bank by the Borrower in accordance with the terms of
Section 2.2.5, interest on the principal amount of Participation Interests
purchased for each day from and including the day upon which such borrowing
would otherwise have occurred to but excluding the date of payment for such
Participation Interests, at the rate equal to the Federal Funds Rate.
37
2.6 Application of Proceeds.
2.6.1 Acquisition Loan. The Borrower will apply the proceeds
of the Acquisition Loan solely to finance acquisitions permitted
pursuant to Section 2.1 and to finance capital expenditures for
additions or improvements to the assets of the Borrower (as
distinguished from maintenance capital expenditures).
2.6.2 Working Capital Loan. The Borrower will apply the
proceeds of the Working Capital Loan and Swingline Loans for working
capital and other lawful purposes of the Borrower and its Subsidiaries;
provided, however, that at no time shall more than $500,000 of the
outstanding principal amount of the Working Capital Loan have been
applied to the purposes of financing acquisitions permitted pursuant to
Section 2.1 and/or capital expenditures for additions or improvements
to the Assets of the Borrower (as distinguished from maintenance
capital expenditures).
2.6.3 Letters of Credit. Letters of Credit shall be issued
only for lawful purposes of the Borrower and its Subsidiaries.
2.6.4 Specifically Prohibited Applications. The Borrower will
not, directly or indirectly, apply any part of the proceeds of any
extension of credit made pursuant to the Loan Documents to purchase or
to carry Margin Stock or to any transaction prohibited by the Foreign
Trade Regulations, by other Bank Legal Requirements of applicable to
the Banks or by the Loan Documents.
2.7 Nature of Obligations of Banks to Make Extensions of Credit. The
Banks' obligations to extend credit under this Agreement, including without
limitation, to refinance the credit facilities previously governed by the
Existing Credit Agreement, are several and are not joint or joint and several.
If on the date any Loans are to be made, any Bank shall fail to perform its
obligations under this Agreement, the aggregate amount of Commitments to make
the extensions of credit under this Agreement shall be reduced by the amount of
unborrowed Commitments of the Bank so failing to perform and the Percentage
Interests shall be appropriately adjusted. Banks that have not failed to perform
their obligations to make the extensions of credit contemplated by Section 2
may, if any such Bank so desires, assume, in such proportions as such Banks may
agree, the obligations of any Bank who has so failed and the Percentage
Interests shall be appropriately adjusted. The provisions of this Section 2.7
shall not affect the rights of the Borrower against any Bank failing to perform
its obligations hereunder.
ARTICLE III
INTEREST; EURODOLLAR PRICING OPTIONS; FEES
3.1 Interest. Each Loan shall accrue and bear interest at a rate per
annum which shall at all times equal its Applicable Rate. Prior to any stated or
accelerated maturity of any Loan, the Borrower will, on the last day of each
month, commencing April 30, 2004, pay the accrued and unpaid interest on the
portion of such Loan which was not subject to a Eurodollar Pricing Option. On
the last day of each Eurodollar Interest Period or on any earlier termination of
any Eurodollar Pricing Option, the Borrower will pay the accrued and unpaid
interest on the portion of such Loan which was subject to the Eurodollar Pricing
Option which expired or terminated on
38
such date. On the Final Maturity Date or the earlier accelerated maturity of any
Loan, the Borrower will pay all accrued and unpaid interest on such Loan,
including any accrued and unpaid interest on any portion of such Loan which is
subject to a Eurodollar Pricing Option. Upon the occurrence and during the
continuance of an Event of Default, the Banks may require accrued interest to be
payable on demand or at regular intervals more frequent than each Payment Date.
All payments of interest hereunder shall be made to the Administrative Agent,
for the account of each Bank in accordance with such Bank's Percentage Interest.
3.2 Eurodollar Pricing Options.
3.2.1 Election of Eurodollar Pricing Options. Subject to all
of the terms and conditions hereof and so long as no Default exists,
the Borrower may from time to time, by irrevocable notice to the
Administrative Agent, actually received not less than two (2) Banking
Days prior to the commencement of the Eurodollar Interest Period
selected in such notice, elect to have such portion of a Loan as the
Borrower may specify in such notice accrue and bear interest during the
Eurodollar Interest Period so selected at the Applicable Rate computed
on the basis of the Eurodollar Rate. No such election shall become
effective:
(i) if, prior to the commencement of any such
Eurodollar Interest Period, the Administrative Agent
determines that (i) the electing or granting of the Eurodollar
Pricing Option in question would violate a Bank Legal
Requirement, (ii) Eurodollar deposits in an amount comparable
to the principal amount of the Loan as to which such
Eurodollar Pricing Option has been elected and which have a
term corresponding to the proposed Eurodollar Interest Period
are not readily available in the inter-bank Eurodollar market,
or (iii) by reason of circumstances affecting the inter-bank
Eurodollar market, adequate and reasonable methods do not
exist for ascertaining the interest rate applicable to such
deposits for the proposed Eurodollar Interest Period; or
(ii) if any Bank shall have advised the
Administrative Agent, by telephone or otherwise at or prior to
noon (Tulsa, Oklahoma time) on the Banking Day immediately
prior to the commencement of such proposed Eurodollar Interest
Period (and shall have subsequently confirmed in writing)
that, after reasonable efforts to determine the availability
of such Eurodollar deposits, such Bank reasonably anticipates
that Eurodollar deposits in an amount equal to the Percentage
Interest of such Bank in the portion of such Loan as to which
such Eurodollar Pricing Option has been elected and which have
a term corresponding to the Eurodollar Interest Period in
question will not be offered in the Eurodollar market to such
Bank at a rate of interest that does not exceed the
anticipated Eurodollar Basic Rate.
3.2.2 Notice to Banks and Borrower. The Administrative Agent,
will promptly inform each Bank (by telephone or otherwise) of each
notice received by it from the Borrower pursuant to Section 3.2.1 and
of the Eurodollar Interest Period specified in such notice. Upon
determination by the Administrative Agent of the Eurodollar Rate for
such
39
Eurodollar Interest Period or in the event such election shall not
become effective, the Administrative Agent, will promptly notify the
Borrower and each Bank (by telephone or otherwise) of the Eurodollar
Rate so determined or why such election did not become effective, as
the case may be.
3.2.3 Selection of Eurodollar Interest Periods. Eurodollar
Interest Periods shall be selected so that:
(i) the minimum portion of a Loan subject to any
Eurodollar Pricing Option shall be $1,000,000 and in integral
multiple of $100,000 in excess thereof;
(ii) no more than a total of fifteen (15) Eurodollar
Pricing Options shall be outstanding at any one time with
respect to the Loans;
(iii) no Eurodollar Interest Period with respect to
any part of a Loan subject to a Eurodollar Pricing Option
shall expire later than its applicable Final Maturity Date.
3.2.4 Additional Interest. If any portion of a Loan subject to
a Eurodollar Pricing Option is repaid, or any Eurodollar Pricing Option
is terminated for any reason (including acceleration of maturity), on a
date which is prior to the last Banking Day of the Eurodollar Interest
Period applicable to such Eurodollar Pricing Option, the Borrower will
pay to the Administrative Agent, for the account of each Bank in
accordance with such Bank's Percentage Interest, in addition to any
amounts of interest otherwise payable hereunder, an amount equal to the
present value (calculated in accordance with this Section 3.2.4) of
interest for the unexpired portion of such Eurodollar Interest Period
on the portion of such Loan so repaid, or as to which a Eurodollar
Pricing Option was so terminated, at a per annum rate equal to the
excess, if any, of (a) the rate applicable to such Eurodollar Pricing
Option minus, (b) the lowest rate of interest obtainable by the
Administrative Agent upon the purchase of debt securities customarily
issued by the Treasury of the United States of America which have a
maturity date approximating the last Banking Day of such Eurodollar
Interest Period. The present value of such additional interest shall be
calculated by discounting the amount of such interest for each day in
the unexpired portion of such Eurodollar Interest Period from such day
to the date of such repayment or termination at a per annum interest
rate equal to the interest rate determined pursuant to clause (b) of
the preceding sentence, and by adding all such amounts for all such
days during such period. The determination by the Administrative Agent
of such amount of interest shall, in the absence of manifest error, be
conclusive. For purposes of this Section 3.2.4, if any portion of a
Loan which was to have been subject to a Eurodollar Pricing Option is
not outstanding on the first day of the Eurodollar Interest Period
applicable to such Eurodollar Pricing Option other than for reasons
described in Section 3.2.1, the Borrower shall be deemed to have
terminated such Eurodollar Pricing Option.
3.2.5 Violation of Bank Legal Requirements. If any Bank Legal
Requirement shall prevent any Bank from funding or maintaining through
the purchase of deposits in
40
the interbank Eurodollar market any portion of a Loan subject to a
Eurodollar Pricing Option or otherwise from giving effect to such
Bank's obligations as contemplated by Section 3.2, (a) the
Administrative Agent, may by notice to the Borrower terminate all of
the affected Eurodollar Pricing Options, (b) the portion of such Loan
subject to such terminated Eurodollar Pricing Options shall immediately
bear interest thereafter at the Applicable Rate computed on the basis
of the Base Rate and (c) the Borrower shall make any payment required
by Section 3.2.4.
3.2.6 Funding Procedure. The Banks may fund any portion of a
Loan subject to a Eurodollar Pricing Option out of any funds available
to the Banks. Regardless of the source of the funds actually used by
any of the Banks to fund any portion of such Loan subject to a
Eurodollar Pricing Option, however, all amounts payable hereunder,
including the interest rate applicable to any such portion of the Loan
and the amounts payable under Sections 3.2.4, 3.5, 3.6, 3.7 and 3.8,
shall be computed as if each Bank had actually funded such Bank's
Percentage Interest in such portion of such Loan through the purchase
of deposits in such amount of the type by which the Eurodollar Basic
Rate was determined with a maturity the same as the applicable
Eurodollar Interest Period relating thereto and through the transfer of
such deposits from an office of the Bank having the same location as
the applicable Eurodollar Office to one of such Bank's offices in the
United States of America.
3.3 Commitment Fees.
3.3.1 Acquisition Financing Facility. In consideration of the
Banks' Commitments to make the extensions of credit provided for in
Section 2.1, while such commitments are outstanding, the Borrower will
pay to the Administrative Agent, for the account of the Banks in
accordance with the Banks' respective Percentage Interests, within five
(5) Banking Days following the end of each fiscal quarter of the
Borrower, an amount equal to interest computed at the rate per annum
equal to the Applicable Commitment Fee Percentage multiplied by the
amount by which (a) the average daily Maximum Amount of Acquisition
Credit during the Margin Period or portion thereof ending on the last
day of such fiscal quarter exceeded (b) the average daily Acquisition
Loan during such Margin Period or portion thereof.
3.3.2 Working Capital Facility. In consideration of the Banks'
commitments to make the extension of credit provided for in Section 2.2
while such commitments are outstanding, the Borrower will pay to the
Administrative Agent, for the account of the Banks in accordance with
the Banks' respective Percentage Interests, within five (5) Banking
Days following the end of each fiscal quarter of the Borrower and on
the Final Maturity Date with respect to the Working Capital Loan, an
amount equal to interest computed at the rate per annum equal to the
Applicable Commitment Fee Percentage multiplied by the amount by which
(a) the average daily Maximum Amount of Working Capital Credit during
the Margin Period or portion thereof ending on the last day of such
fiscal quarter or Final Maturity Date exceeded (b) the average daily
Working Capital Loan during such Margin Period or portion thereof. For
the purposes of computing the non-usage fee on the Working Capital
Facility, outstanding Letters of Credit shall be
41
considered usage of the Working Capital Credit Facility; however,
outstanding Swingline Loans shall be considered usage of the Working
Capital Facility committed amount of BOk only.
3.4 Letter of Credit Fees. The Borrower will pay to the Administrative
Agent, for the account of each of the Banks (including any Letter of Credit
Issuer), in accordance with the Banks' respective Percentage Interests, on the
last day of each Margin Period, a Letter of Credit fee equal to the Applicable
Margin for Eurodollar Loans in effect for such Margin Period on the average
daily Letter of Credit Exposure during such Margin Period; together with an
additional fee equal to 1/8% per annum on the Letter of Credit Exposure shall be
paid solely to the respective Letter of Credit Issuer. The Borrower also will
pay to each Letter of Credit Issuer customary service charges and expenses for
its services in connection with the Letters of Credit issued by it at the times
and in the amounts from time to time in effect in accordance with its general
rate structure, including fees and expenses relating to issuance, amendment,
negotiation, cancellation and similar operations.
3.5 Reserve Requirements. If any Bank Legal Requirement shall (a)
impose, modify, increase or deem applicable any insurance assessment, reserve,
special deposit or similar requirement against any Funding Liability or the
Letters of Credit, (b) impose, modify, increase or deem applicable any other
requirement or condition with respect to any Funding Liability or the Letters of
Credit, or (c) change the basis of taxation of Funding Liabilities or payments
in respect of any Letter of Credit (other than changes in the rate of taxes
measured by the overall net income of such Bank) and the effect of any of the
foregoing shall be to increase the cost to any Bank of issuing, making, funding
or maintaining its respective Percentage Interest in any portion of a Loan
subject to a Eurodollar Pricing Option or any Letter of Credit, to reduce the
amounts received or receivable by such Bank under this Agreement or to require
such Bank to make any payment or forego any amounts otherwise payable to such
Bank under this Agreement, then, within 15 days after the receipt by the
Borrower of a certificate from such Bank setting forth why it is claiming
compensation under this Section 3.5 and computations (in reasonable detail) of
the amount thereof, the Borrower shall pay to the Administrative Agent, for the
account of such Bank such additional amounts as are specified by such Bank in
such certificate as sufficient to compensate such Bank for such increased cost
or such reduction, together with interest at the Overdue Reimbursement Rate on
such amount from the 15th day after receipt of such certificate until payment in
full thereof; provided, however, that the foregoing provisions shall not apply
to any Tax or to any reserves which are included in computing the Eurodollar
Reserve Rate. The determination by such Bank of the amount of such costs shall,
in the absence of manifest error, be conclusive.
3.6 Taxes. All payments of the Credit Obligations shall be made without
set-off or counterclaim and free and clear of any deductions, including
deductions for Taxes, unless the Borrower is required by law to make such
deductions. If (a) any Bank shall be subject to any Tax with respect to any
payment of the Credit Obligations or its obligations hereunder or (b) the
Borrower shall be required to withhold or deduct any Tax on any payment on the
Credit Obligations, within 15 days after the receipt by the Borrower of a
certificate from such Bank setting forth why it is claiming compensation under
this Section 3.6 and computations (in reasonable detail) of the amount thereof,
the Borrower shall pay to the Administrative Agent, for
42
such Bank's account such additional amount as is necessary to enable such Bank
to receive the amount of Tax so imposed on the Bank's obligations hereunder or
the full amount of all payments which it would have received on the Credit
Obligations (including amounts required to be paid under Sections 3.5, 3.7, 3.8
and this Section 3.6) in the absence of such Tax, as the case may be, together
with interest at the Overdue Reimbursement Rate on such amount from the 15th day
after receipt of such certificate until payment in full thereof. Whenever Taxes
must be withheld by the Borrower with respect to any payments of the Credit
Obligations, the Borrower shall promptly furnish to the Administrative Agent for
the account of the applicable Bank official receipts (to the extent that the
relevant governmental authority delivers such receipts) evidencing payment of
any such Taxes so withheld. If the Borrower fails to pay any such Taxes when due
or fails to remit to the Administrative Agent, for the account of the applicable
Bank the required receipts evidencing payment of any such Taxes so withheld or
deducted, the Borrower shall indemnify the affected Bank for any incremental
Taxes and interest or penalties that may become payable by such Bank as a result
of any such failure. The determination by such Bank of the amount of such Tax
and the basis therefor shall, in the absence of manifest error, be conclusive.
The Borrower shall be entitled to replace any such Bank in accordance with
Section 11.3.
3.7 Capital Adequacy. If any Bank shall determine that compliance by
such Bank with any Bank Legal Requirement regarding capital adequacy of banks or
bank holding companies has or would have the effect of reducing the rate of
return on the capital of such Bank and its Affiliates as a consequence of such
Bank's commitment to make the extensions of credit contemplated hereby, or such
Bank's maintenance of the extensions of credit contemplated hereby, to a level
below that which such Bank could have achieved but for such compliance (taking
into consideration the policies of such Bank and its Affiliates with respect to
capital adequacy immediately before such compliance and assuming that the
capital of such Bank and its Affiliates was fully utilized prior to such
compliance) by an amount deemed by such Bank to be material, then, within 15
days after the receipt by the Borrower of a certificate from such Bank setting
forth why it is claiming compensation under this Section 3.7 and computations
(in reasonable detail) of the amount thereof, the Borrower shall pay to the
Administrative Agent, for the account of such Bank such additional amounts as
shall be sufficient to compensate such Bank for such reduced return, together
with interest at the Overdue Reimbursement Rate on each such amount from the
15th day after receipt of such certificate until payment in full thereof. The
determination by such Bank of the amount to be paid to it and the basis for
computation thereof shall, in the absence of manifest error, be conclusive. In
determining such amount, such Bank may use any reasonable averaging, allocation
and attribution methods. The Borrower shall be entitled to replace any such Bank
in accordance with Section 11.3.
3.8 Regulatory Changes. If any Bank shall determine that (a) any change
in any Bank Legal Requirement (including any new Bank Legal Requirement) after
the date hereof shall directly or indirectly (i) reduce the amount of any sum
received or receivable by such Bank with respect to a Loan or the Letters of
Credit or the return to be earned by such Bank on such Loan or the Letters of
Credit, (ii) impose a cost on such Bank or any Affiliate of such Bank that is
attributable to the making or maintaining of, or such Bank's commitment to make,
its portion of such Loan or the Letters of Credit, or (iii) require such Bank or
any Affiliate of such Bank to make any payment on, or calculated by reference
to, the gross amount of any amount received by such Bank under any Credit
Document, and (b) such reduction, increased cost or payment shall
43
not be fully compensated for by an adjustment in the Applicable Rate or the
Letter of Credit fees, then, within 15 days after the receipt by the Borrower of
a certificate from such Bank setting forth why it is claiming compensation under
this Section 3.8 and computations (in reasonable detail) of the amount thereof,
the Borrower shall pay to such Bank such additional amounts as such Bank
determines will, together with any adjustment in the Applicable Rate, fully
compensate for such reduction, increased cost or payment, together with interest
on such amount from the 15th day after receipt of such certificate until payment
in full thereof at the Overdue Reimbursement Rate. The determination by such
Bank of the amount to be paid to it and the basis for computation thereof
hereunder shall, in the absence of manifest error, be conclusive. In determining
such amount, such Bank may use any reasonable averaging and attribution methods.
3.9 Computations of Interest and Fees. For purposes of this Agreement,
interest, commitment fees and Letter of Credit fees (and any other amount
expressed as interest or such fees) shall be computed on the basis of a 360-day
year for actual days elapsed. If any payment required by this Agreement becomes
due on any day that is not a Banking Day, such payment shall, except as
otherwise provided in the Eurodollar Interest Period, be made on the next
succeeding Banking Day. If the due date for any payment of principal is extended
as a result of the immediately preceding sentence, interest shall be payable for
the time during which payment is extended at the Applicable Rate, and any letter
of credit fees payable pursuant to Section 3.4 shall be payable for the full
number of days such applicable Letter of Credit is outstanding.
3.10 Loan Fees. Concurrent with the Closing Date, the Borrower shall
pay to each Bank in immediately available funds a non-refundable and fully
earned loan fee in an amount equal to 0.35% (35 basis points) of the aggregate
amount of each such Bank's Commitments issued pursuant to this Agreement.
3.11 Administrative Agent's Fees. The Borrower shall pay to the
Administrative Agent, for the Administrative Agent's own account, an annual fee
in the amount of $25,000, payable quarterly (in the amount of $6,250) in arrears
following the close of each calendar quarter by the Administrative Agent's debit
to Borrower's operating account, concerning which quarterly debit therefrom
Borrower hereby authorizes the Administrative Agent to automatically effect
without the necessity of any further or other approval from the Borrower.
ARTICLE IV
PAYMENT
4.1 Payment at Maturity. On the Final Maturity Date with respect to
each tranche or any accelerated maturity of such Loan, the Borrower will pay to
the Administrative Agent, for the account of the Banks an amount equal to the
remaining aggregate principal amount of such Tranche then outstanding, together
with all accrued and unpaid interest thereon and all other Credit Obligations
then outstanding.
44
4.2 Contingent Required Prepayments.
4.2.1 Excess Credit Exposure. If at any time the Acquisition
Loan or the Working Capital Loan exceeds the limit set forth in Section
2.1.2 or 2.2.2, respectively, the Borrower shall within three Banking
Days pay the amount of such excess to the Administrative Agent, for the
account of the Banks.
4.2.2 Letter of Credit Exposure. If at any time the Letter of
Credit Exposure exceeds the limit set forth in Section 2.3.1, the
Borrower shall cash-collateralize such excess within three (3) Banking
Days by paying the amount of such excess to the Administrative Agent,
for the account of the Banks to be applied as provided in Section 4.5.
4.2.3 Contingent Prepayments on Disposition, Loss of Assets,
Merger or Change of Control.
(i) If at any time the Borrower or any of its
Subsidiaries disposes of assets or issues or sells Capital
Stock of any Subsidiary with the result that there are Excess
Sale Proceeds, and the Borrower does not apply such Excess
Sale Proceeds in the manner described in Section
7B.7(iii)(c)(ii)(x), the Borrower will prepay (at the price of
the principal amount prepaid plus accrued interest thereon and
any amount owing with respect thereto under Section 3.2.4 and
upon notice as provided in Section 4.2.4) a principal amount
of the outstanding Acquisition Notes equal to the Allocable
Proceeds.
(ii) In the event of any damage to, or destruction,
condemnation or other taking of, all or any portion of the
properties or assets of the Borrower or any of its
Subsidiaries, to the extent that the Borrower or any such
Subsidiary receives insurance or condemnation proceeds with
the result that Unutilized Taking Proceeds exceed $2,500,000
in respect of any fiscal year (such excess amount being herein
called "Excess Taking Proceeds"), the Borrower will prepay (at
the price of the principal amount prepaid plus accrued
interest thereon and any amount owing with respect thereto
under Section 3.2.4 and upon notice as provided in Section
4.2.4) a principal amount of the outstanding Acquisition Notes
equal to the Allocable Proceeds.
(iii) (a) If at any time any Responsible Officer has
knowledge of the occurrence of any Control Event, the Borrower
will give notice as provided in Section 4.4 of such Control
Event to the Administrative Agent. Upon the occurrence of a
Control Event, the Borrower will not take any voluntary action
that consummates or finalizes the Control Event resulting from
such Control Event unless contemporaneously with such action,
the Borrower prepays all Notes in accordance with this Section
4.2.3(iii) and upon notice as provided in Section 4.2.4 at the
price of the principal amount thereof plus accrued interest
thereon and any amount owing with respect thereto under
Section 3.2.4.
(b) The obligation of the Borrower to prepay
Acquisition Notes pursuant to the offer required by paragraph
(a) of this clause (iii) and accepted in
45
accordance with Section 4.2.4 is subject to the consummation
of the Control Event in respect of which any such offer and
acceptance shall have been made. In the event that such
Control Event does not occur on or before the proposed
prepayment date in respect thereof, the prepayment shall be
deferred until and shall be made on the date on which such
Control Event occurs. The Borrower shall keep the
Administrative Agent reasonably and timely informed of (i) any
such deferral of the date of prepayment, (ii) the date on
which such Control Event and the prepayment are expected to
occur, and (iii) any determination by the Borrower that
efforts to effect such resulting Control Event have ceased or
been abandoned (in which case the Borrower shall have no
further obligation hereunder to prepay the Acquisition Notes
in respect of such Control Event).
4.2.4 Prepayment Procedure for Contingent Prepayments.
(i) If at any time there are unapplied Excess Sale
Proceeds or Excess Taking Proceeds (such unapplied amounts
being "Excess Proceeds"), and the Borrower is required to
prepay the Acquisition Notes with such Excess Proceeds
pursuant to clause (i) or (ii) of Section 4.2.3, the Borrower
will give written notice as provided in Section 12.1 (which
shall be in the form of an Officers' Certificate) to the Banks
not later than twelve months after the date of the applicable
Asset Sale or the end of the twelve month period following
receipt of the applicable Unutilized Taking Proceeds, as the
case may be, and (a) setting forth in reasonable detail all
calculations required to determine the amount of Excess
Proceeds, (b) setting forth the aggregate amount of the
Allocable Proceeds and the amount of the Allocable Proceeds
which is allocable to each Acquisition Note, determined by
applying the Allocable Proceeds pro rata among all Acquisition
Notes outstanding on the date such prepayment is to be made
according to the aggregate then unpaid amounts of the
Acquisition Notes, and in reasonable detail the calculations
used in determining such amounts, and (c) stating that the
Borrower will prepay on the date specified in such notice,
which shall not be less than 25 nor more than 45 days after
the date of such notice, a principal amount of each
outstanding Acquisition Note equal to the amount of Allocable
Proceeds allocated to such Acquisition Note as described in
clause (b) above.
(ii) If at any time the Borrower is required to
prepay the Notes following the occurrence of a Control Event,
the Borrower will give written notice as provided in Section
12.1 (which shall be in the form of an Officer's Certificate)
to the Banks not later than five Business Days following such
Control Event, (a) setting forth in reasonable detail the
facts and circumstances underlying such Control Event known to
it, and (b) stating that the Borrower will prepay on the date
the Control Event occurs.
4.3 Scheduled Required Payments.
4.3.1 Acquisition Loan. On the Final Maturity Date, the
Borrower shall pay all outstanding principal of the Acquisition Loan.
46
4.3.2 Working Capital Loan. The Borrower shall (i) prepay the
Working Capital Loan when necessary to comply with the Annual Clean-Up
requirement set forth in Section 2.2.2, and (ii) on the Final Maturity
Date, pay all outstanding principal of the Working Capital Loan.
4.4 Voluntary Prepayments. In addition to the prepayments required by
Sections 4.2 and 4.3, the Borrower may from time to time prepay all or any
portion of the Loans (in a minimum amount of $50,000 and an integral multiple of
$50,000), without premium or penalty of any type (except as provided in Section
3.2.4 with respect to the early termination of Eurodollar Pricing Options) and
further provided that Swingline Loans may be prepaid in any amount. The Borrower
shall give the Administrative Agent at least one Banking Day prior notice of its
intention to prepay, specifying the date of payment, the total amount of the
Loans to be paid on such date and the amount of interest to be paid with such
prepayment.
4.5 Letters of Credit. If at the time of any Event of Default or on the
stated or any accelerated maturity of the Credit Obligations the Banks shall be
obligated in respect of a Letter of Credit or a draft accepted under a Letter of
Credit, the Borrower immediately will either:
(a) prepay such obligation by depositing with the
Administrative Agent, an amount of cash sufficient to
cash-collateralize such Letter of Credit Exposure, or
(b) deliver to the Administrative Agent, a standby letter of
credit (designating such Administrative Agent as beneficiary and issued
by a bank and on terms reasonably acceptable to such Administrative
Agent),
in each case in an amount equal to the portion of the then Letter of Credit
Exposure issued for the account of the Borrower. Any such cash so deposited and
the cash proceeds of any draw under any standby letter of credit so furnished,
including any interest thereon, shall be returned by such Administrative Agent
to the Borrower only when, and to the extent that, the amount of such cash held
by such Administrative Agent exceeds the Letter of Credit Exposure at a time
when no Default exists; provided, however, that if an Event of Default occurs
and the Credit Obligations become or are declared immediately due and payable,
such Administrative Agent may apply such cash, including any interest thereon,
to the payment of any of the Credit Obligations as provided in the Intercreditor
Agreement.
4.6 Reborrowing Application of Payments.
4.6.1 Reborrowing. The amounts of the Acquisition Loan and the
Working Capital Loan prepaid pursuant to Section 4.2.1, 4.3.2 or 4.4
may be reborrowed from time to time, in the case of the Acquisition
Loan in accordance with Section 2.1 and in the case of the Working
Capital Loan prior to its Final Maturity Date, in accordance with
Section 2.2 and subject to the limits set forth therein.
4.6.2 Order of Application. Each prepayment of the Loan made
pursuant to Section 4.2.1 shall be applied to the Working Capital Loan
or the Acquisition Loan, as
47
appropriate. Each prepayment of the Loan made pursuant to Section
4.2.3(i) or (ii) shall be applied to the Acquisition Loan. Any amounts
of the Acquisition Loan prepaid pursuant to the preceding sentence may
not be reborrowed.
4.6.3 Payment with Accrued Interest. Upon all prepayments of a
Loan, the Borrower shall pay to the Administrative Agent, the principal
amount to be prepaid, together with unpaid interest in respect thereof
accrued to the date of prepayment and any amount owing with respect
thereto under Section 3.2.4. Notice of prepayment having been given in
accordance with Section 4.4, and whether or not notice is given of
prepayments pursuant to Sections 4.2 and 4.3, the amount specified to
be prepaid shall become due and payable on the date specified for
prepayment.
4.6.4 Payments for Banks. All payments of principal hereunder
shall be made to the Administrative Agent, for the account of the Banks
in accordance with the Banks' respective Percentage Interests.
ARTICLE V
SECURITY
5.1 Collateral. The repayment of the Indebtedness shall be secured by
the Collateral as more particularly described and defined in the Security
Documents previously executed and delivered pursuant to the terms, provisions
and conditions of the Existing Credit Agreement, the Liens and priorities
thereof which shall continue in full force and effect without any interruption
thereof whatsoever subject to the Intercreditor Agreement.
The Borrower hereby acknowledges that all of the Collateral is granted
as security for the repayment of all Obligations, including as evidenced by the
Notes, the Private Placement Notes and the notes, if any, evidencing other
Parity Debt. The Liens granted, created and perfected (including the priorities
thereof subject to the Intercreditor Agreement) by virtue of the Existing Credit
Agreement and the Security Documents therein described and defined are hereby
ratified, confirmed and continued without interruption and re-granted by the
Borrower in favor of the Collateral Agent in all respects as continuing security
for the Obligations, including as evidenced by the Notes, the Private Placement
Notes and the notes, if any, evidencing other Parity Debt subject to the terms
and provisions of the Intercreditor Agreement. If one or more of such Notes,
Private Placement Notes or other Parity Debt notes are paid in full or
satisfied, but any portion of the Indebtedness evidenced by such note remains
unsatisfied, the Collateral Agent may retain its security interest in all of the
Collateral on behalf of the Secured Parties described therein until the
remaining Indebtedness secured thereby is paid in full, even if the value of the
Collateral far exceeds the amount of such outstanding Indebtedness secured
thereby.
5.2 Intercreditor Agreement. The Banks and the Co-Agent hereby
authorize the Administrative Agent to execute and deliver such supplements,
amendments or modifications to the Intercreditor Agreement to the Collateral
Agent. Borrower confirms that any setoffs shared under the terms of the
Intercreditor Agreement (including without limitation Section 13(c) thereof)
with the Note Purchaser of the Private Placement Notes or the holders of any
Additional
48
Parity Debt, to the extent of the portions so shared, will not be deemed to pay
down the Loan evidenced by the Notes.
ARTICLE VI
CONDITIONS PRECEDENT AND SUBSEQUENT TO LOANS
6.1 Conditions Precedent to Initial Working Capital Loan and Initial
Acquisition Loan. The obligation of the Banks to make the initial Working
Capital Loan and the initial Acquisition Loan is subject to the satisfaction of
all of the following conditions on or prior to the Closing Date (in addition to
the other terms and conditions set forth herein):
(i) No Default. There shall exist no Event of Default,
Noncompliance Event or Default on the Closing Date.
(ii) Representations and Warranties. The representations,
warranties and covenants set forth in Article VIII shall be true and
correct on and as of the Closing Date, with the same effect as though
made on and as of the Closing Date unless such representation or
warranty relates only to an earlier date.
(iii) Certificates. The Borrower shall have delivered or
caused to be delivered to the Administrative Agent Certificates, dated
as of the Closing Date, and signed by the President or Vice President
and the Secretary of USPLLC and the General Partner, respectively,
certifying (a) to the matters covered by the conditions specified in
subsections (i) and (ii) of this Section 6.1, (b) that the Borrower and
the Master Partnership have performed and complied with all agreements
and conditions required to be performed or complied with by them prior
to or on the Closing Date, (c) to the name and signature of each
officer of USPLLC and the General Partner, respectively, authorized to
execute and deliver the Loan Documents for and on behalf of the
Borrower and any other documents, certificates or writings and to
borrow under this Agreement, and (iv) to such other matters in
connection with this Agreement which the Banks shall determine to be
advisable. The Banks may conclusively rely on such Certificates until
Agent receives notice in writing to the contrary.
(iv) Proceedings. On or before the Closing Date, all
partnership proceedings of the Borrower shall be taken in connection
with the transactions contemplated by the Loan Documents and shall be
satisfactory in form and substance to the Banks and Administrative
Agent's counsel; and the Agents shall have received certified copies,
in form and substance satisfactory to the Banks and Agents' counsel, of
the partnership agreements and certificates of the Borrower and the
Certificate of Limited Partnership Agreement of the General Partner and
the Articles of Organization/Certificate of Formation and Operating
Agreement of USPLLC, as adopted, authorizing the execution and delivery
of the Loan Documents, the borrowings under this Agreement, and the
ratification, confirmation and regranting of the security interests in
the Collateral pursuant to the Security Agreement, to secure the
payment of the Indebtedness.
49
(v) Notes. The Borrower shall have delivered the replacement
Notes payable to the order of BOk, to the Administrative Agent, in each
case appropriately executed.
(vi) Security Agreement. The Borrower shall have ratified and
confirmed its delivery to the Collateral Agent of such supplement,
amendment or restatement of the Security Agreement executed in
connection with the Existing Credit Agreement, appropriately executed
by the Borrower and Heritage, and dated as of the Closing Date,
together with such financing statements (UCC or otherwise)
(collectively, the "Financing Statements") and other documents, as
shall be deemed necessary and appropriate to continue the perfection of
the Collateral Agent's security interests in the Collateral covered by
said Security Agreement, including, without limitation, the Security
Agreement, and such certificates representing shares of Capital Stock
included in the Collateral and proper stock powers with respect thereto
duly endorsed in blank (collectively, the "Certificates and Stock
Powers").
(vii) Opinions. The Agents shall have received from Borrower's
counsel, Doerner, Saunders, Xxxxxx & Xxxxxxxx, L.L.P., a favorable
written closing opinion addressed to the Agents for the benefit of the
Banks with respect to this Agreement, satisfactory in form and
substance to the Administrative Agent's counsel including, without
limitation, an opinion that all notices to or consents of the
Collateral Agent or the Note Purchasers as required by the transactions
contemplated by this Agreement have been duly obtained and are in full
force and effect.
(viii) UCC Releases/Other Information. The Administrative
Agent shall have received a written payoff statement from any other
secured party of record concerning any of the Collateral together with
applicable UCC terminations of record of all such existing security
interest liens pertaining to the Collateral or any part thereof.
(ix) Other Information and Closing Documents. The
Administrative Agent shall have received such other consents,
information, documents, agreements and assurances as shall be
reasonably requested by the Banks, including, without limitation,
appropriate consents and approvals to the issuance of the Notes and the
Commitments and the Intercreditor Agreement, as amended and modified,
shall have been duly executed by all parties thereto and delivered to
the Collateral Agent.
6.2 Conditions Precedent to All Loans. The Banks shall not be obligated
to make any additional Loan advance(s) or to issue any Letters of Credit after
the Closing Date (i) if at such time any Event of Default or any Noncompliance
Event shall have occurred or any Default shall have occurred and be continuing;
or (ii) if any of the representations, warranties and covenants contained in
Article VIII of this Agreement shall be false or untrue in any material respect
on the date of such advance or issue, as if made on such date (unless such
representation or warranty relates only to an earlier date). Each request by the
Borrower for an additional Working Capital Loan or Acquisition Loan shall
constitute a representation by the Borrower that there is not at the time of
such request an Event of Default, a Noncompliance Event or a Default, and that
all representations, warranties and covenants in Article VIII of this Agreement
are true and correct on and as of the date of each such applicable Loan request
or request for a Letter of Credit.
50
ARTICLE VII
COVENANTS
The Borrower hereby covenants and agrees with the Banks that, comply
with the terms and provisions of this Article VII.
7A. Affirmative Covenants.
7A.1 Financial Statements. The Borrower will maintain, and
will cause each of its Subsidiaries to maintain, a system of accounting
established and administered in accordance with GAAP. The Borrower
covenants that it will deliver to each Bank:
(i) as soon as practicable and in any event within 50
days after the end of each quarterly period in each fiscal
year, (a) consolidated statements of income, partners' capital
and cash flows of the Borrower and its Subsidiaries for such
quarterly period and (in the case of the second, third and
fourth quarterly periods) for the period from the beginning of
the current fiscal year to the end of such quarterly period,
and consolidated balance sheets of the Borrower and its
Subsidiaries as at the end of such quarterly period, setting
forth in each case with respect to financial statements
delivered as of any date and for any period after the Closing
Date, in comparative form figures for the corresponding period
in the preceding fiscal year, all in reasonable detail and
satisfactory in form to the Required Banks and certified by an
authorized financial officer of the Borrower as presenting
fairly, in all material respects, the information contained
therein (except for the absence of footnotes and subject to
changes resulting from normal year-end adjustments), in
accordance with GAAP, and (b) a copy of the Quarterly Report
on Form 10-Q of the Master Partnership for such quarterly
period filed with the Commission;
(ii) as soon as practicable and in any event within
95 days after the end of each fiscal year, (a) consolidated
and consolidating statements of income and cash flows and a
consolidated and consolidating statement of partners' capital
(or stockholders' equity, as applicable) of the Borrower and
its Subsidiaries for such year, and consolidated and
consolidating balance sheets of the Borrower and its
Subsidiaries, as at the end of such year, setting forth in
each case with respect to financial statements delivered as of
any date and for any period after the Closing Date, in
comparative form corresponding consolidated and, where
applicable, consolidating figures from the preceding annual
audit, all in reasonable detail and, as to the consolidated
statements, reported on by Xxxxx Xxxxxxxx, LLP, or other
independent public accountants of recognized national standing
selected by the Borrower whose report shall be without
limitation as to the scope of the audit, (b) consolidating
statements of income and cash flows and a consolidating
statement of partners' capital (or stockholder equity, as
applicable) of the Master
51
Partnership and its Subsidiaries for such year and
consolidated balance sheets of the Master Partnership and its
Subsidiaries, as at the end of such year, setting forth in
each case, in comparative form corresponding consolidated
figures from the preceding annual audit, all in reasonable
detail and reported on by Xxxxx Xxxxxxxx LLP, or other
independent public accountants of recognized national standing
selected by the Master Partnership whose report shall be
without limitation as to the scope of the audit (provided that
such report shall not include within the scope of the audit
the consolidating statements required by clause (c));
provided, however, that at any time when the Master
Partnership shall be subject to the reporting requirements of
Section 13 or 15(d) of the Exchange Act, delivery within the
time period specified above of copies of the Annual Report on
Form 10-K of the Master Partnership for such fiscal year
prepared in compliance with the requirements therefor and
filed with the Commission shall be deemed to satisfy the
requirements of this clause (b) if all such statements
required to be delivered pursuant to this clause (b) with
respect to the Master Partnership and its Subsidiaries are
included in such Form 10-K, or (c) consolidating statements of
income and cash flows and a consolidating statement of
partners' capital (or stockholders' equity, as applicable) of
the Master Partnership and its Subsidiaries for such year,
certified by an authorized financial officer of the Master
Partnership as presenting fairly, in all material respects,
the information contained therein, in accordance with GAAP
(except for the absence of footnotes); provided, however, that
at any time when the Master Partnership shall be subject to
the reporting requirements of Section 13 or 15(d) of the
Exchange Act delivery within the time period specified above
of copies of the Annual Report on Form 10-K of the Master
Partnership for such fiscal year prepared in compliance with
the requirements therefor and filed with the Commission shall
be deemed to satisfy the requirements of this clause (c) if
all such statements required to be delivered pursuant to this
clause (c) with respect to the Master Partnership and its
Subsidiaries are included in such Form 10-K and such reports
are delivered separately by the Borrower together with such
Form 10-K and such reports;
(iii) promptly upon receipt thereof by the Borrower,
copies of all reports submitted to the Borrower by independent
public accountants in connection with each special, annual or
interim audit of the books of the Borrower or any Subsidiary
thereof made by such accountants, including without limitation
the comment letter submitted by each such accountant to
management in connection with their annual audit;
(iv) promptly upon transmission thereof, copies of
(a) all financial statements, proxy statements, notices and
reports as the Borrower or the Master Partnership shall send
or make available to the public Unitholders of the Master
Partnership, (b) all registration statements (without
exhibits), all prospectuses and all reports which the Borrower
or the Master Partnership files with the Commission (or any
governmental body or agency succeeding to the functions of the
Commission), (c) all press releases and other similar written
statements made available by the Borrower or the Master
Partnership to the public concerning material developments in
the business of the Borrower or the Master Partnership,
52
as the case may be, and (d) all reports, notices and other
similar written statements sent or made available by the
Borrower or the Master Partnership to any holder of its
Indebtedness pursuant to the terms of any agreement, indenture
or other instrument evidencing such Indebtedness, including
without limitation the Credit Agreement, except to the extent
the same substantive information is already being provided
pursuant to this Section 7A.1;
(v) as soon as reasonably practicable, and in any
event within 5 Business Days after a Responsible Officer
obtains knowledge that any Default or Event of Default has
occurred, a written statement of such Responsible Officer
setting forth details of such Default or Event of Default and
the action which the Borrower has taken, is taking and
proposes to take with respect thereto;
(vi) as soon as reasonably practicable, and in any
event within 5 Business Days after a Responsible Officer
obtains knowledge of (a) the occurrence of an adverse
development with respect to any litigation or proceeding
involving the Borrower or any of its Subsidiaries which in the
reasonable judgment of the Borrower could reasonably be
expected to have a Material Adverse Effect or (b) the
commencement of any litigation or proceeding involving the
Borrower or any of its Subsidiaries which in the reasonable
judgment of the Borrower could reasonably be expected to have
a Material Adverse Effect, a written notice of such
Responsible Officer describing in reasonable detail such
commencement of, or adverse development with respect to, such
litigation or proceeding;
(vii) as soon as possible after, and in any event
within 10 Business Days after any Responsible Officer of the
Borrower or any ERISA Affiliate knows or has reason to know
that, any ERISA Event has occurred or is expected to occur
that, alone or together with any other ERISA Events that have
occurred, in the opinion of the principal financial officer of
the Borrower could reasonably be expected to result in
liability of the Borrower in an aggregate amount exceeding
$2,000,000, a statement setting forth a detailed description
of such ERISA Event and the action, if any, that the Borrower
or any ERISA Affiliate has taken, is taking or proposes to
take or cause to be taken with respect thereto (together with
a copy of any notice, report or other written communication
filed with or given to or received from the PBGC, the Internal
Revenue Service or the Department of Labor with respect to
such event or condition);
(viii) as soon as reasonably practicable, and in any
event within five Business Days after a Responsible Officer
obtains knowledge of a violation or alleged violation of any
Environmental Law or the presence or release of any Hazardous
Substance within, on, from, relating to or affecting any
property, which in the reasonable judgment of the Borrower
could reasonably be expected to have a Material Adverse
Effect, notice thereof, and upon request, copies of relevant
documentation;
53
(ix) together with each delivery of financial
information pursuant to clause (i) or clause (ii) of this
Section 7A.1, a statement setting forth, together with
computations in reasonable detail, the amount of Available
Cash, Aggregate Available Cash and the Aggregate Partner
Obligations, together with a calculation of the Borrower's
Percentage of Aggregate Available Cash as of the date of the
balance sheet contained therein and the amounts of all Net
Proceeds, Excess Sale Proceeds, Unutilized Taking Proceeds and
Unused Proceeds Reserves held by the Borrower at the end of
the applicable quarterly period or fiscal year, as the case
may be;
(x) as soon as reasonably practicable, and in any
event within 5 Business Days after a Responsible Officer
obtains knowledge that the holder of any Note has given any
notice to the Borrower or any Subsidiary thereof or taken any
other action with respect to a claimed Default or Event of
Default under this Agreement or any other Loan Documents, or
that any Person has given any notice to the Borrower or any
such Subsidiary or taken any other action with respect to a
claimed default or event or condition of the type referred to
in [Section 9.1A(iii), Event of Default] a written statement
of such Responsible Officer describing such notice or other
action in reasonable detail and the action which the Borrower
has taken, is taking and proposes to take with respect
thereto;
(xi) prior to the Closing Date and within 45 days
after the end of each calendar year ending thereafter,
commencing with the year ending December 31, 2003, a report
prepared by the Borrower or its broker or agent (a) setting
forth the insurance maintained pursuant to Section 7A.8, and
including, without limitation, the amounts thereof, the names
of the insurers and the property, hazards and risks covered
thereby, and certifying that all premiums with respect to the
policies described in such report then due thereon have been
paid and that the same are in full force and effect, (b)
setting forth all self-insurance maintained by the Borrower
pursuant to Section 7A.8 and (c) certifying that such
insurance or self insurance complies with the requirements of
such Section 7A.8;
(xii) with reasonable promptness, such other
information and data (financial or other) as from time to time
may be reasonably requested by any Bank; and
(xiii) as soon as reasonably practicable, and in any
event within 5 Business Days after a Responsible Officer
obtains knowledge that the holder of any secured indebtedness
or other indebtedness has given any notice to La Grange or any
Subsidiary thereof or taken any other action with respect to a
claimed event of default or condition of the type referred to
in Section 9.1(xviii), a written statement of such Responsible
Officer describing, to the best knowledge of such Responsible
Officer, such notice or other action in reasonable detail and
the action which La Grange has taken, is taking and proposes
to take with respect thereto.
54
Together with each delivery of financial statements required by clauses
(i) and (ii) above, the Borrower will deliver to each holder of Notes
an Officers' Certificate (I) stating that the signers have reviewed the
terms of this Agreement and the other Loan Documents, and have made, or
caused to be made under their supervision, a review in reasonable
detail of the transactions and condition of the Borrower and its
Subsidiaries during the accounting period covered by such financial
statements, and that no Default or Event of Default has occurred and is
continuing, or, if any such Default or Event of Default then exists,
specifying the nature and approximate period of existence thereof and
what action the Borrower has taken or is taking or proposes to take
with respect thereto, (II) specifying the amount available at the end
of such accounting period for Restricted Payments in compliance with
Section 7B.6 and showing in reasonable detail all calculations required
in arriving at such amount, (III) demonstrating (with computations in
reasonable detail) compliance at the end of such accounting period by
the Borrower and its Subsidiaries with the provisions of Sections 4.6,
7B.1, 7B.2, 7B.3, 7B.4, 7B.5(v), 7B.7(i)(b), 7B.7(i)(c), 7B.7(iii) and
7B.12, and (IV) if not specified in the related financial statements
being delivered pursuant to clauses (i) and (ii) above, specifying the
aggregate amount of interest paid or accrued by, and aggregate rental
expenses of, the Borrower and its Subsidiaries, and the aggregate
amount of depreciation, depletion and amortization charged on the books
of the Borrower and its Subsidiaries, during the fiscal period covered
by such financial statements.
Together with each delivery of financial statements required
by clause (ii) above, the Borrower will deliver a certificate of such
accountants stating that they have reviewed the terms of this Agreement
and the other Loan Documents and 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.
7A.2 Inspection of Property. The Borrower will permit any
Person designated in writing by the Administrative Agent or the
Required Lenders, at the Borrower's expense during the continuance of a
Default or Event of Default and otherwise at such holder's expense, to
visit and inspect any of the properties of the Borrower and its
Subsidiaries, to examine the corporate books and financial records of
the Borrower and its Subsidiaries and make copies thereof or extracts
therefrom and to discuss the affairs, finances and accounts of any of
such partnerships or corporations with the principal officers of the
Borrower and its independent public accountants, all at such reasonable
times and as often as such holder may reasonably request. The Borrower
hereby authorizes, and agrees to cause each of its Subsidiaries to
authorize, its and their independent public accountants to discuss with
such Person the affairs, finances and accounts of the Borrower and its
Subsidiaries in accordance with this Section 7A.2.
7A.3 Covenant to Secure Notes Equally. If the Borrower or any
of its Subsidiaries shall create or assume any Lien upon any of its
property or assets, whether
55
now owned or hereafter acquired, other than Liens permitted by the
provisions of Sections 7B.3 and 7B.4 (unless prior written consent to
the creation or assumption thereof shall have been obtained pursuant to
Section 10.6), the Borrower will make or cause to be made effective
provision whereby the Notes will be contemporaneously secured by such
Lien equally and ratably with any and all other Indebtedness thereby
secured so long as any such other Indebtedness shall be so secured
(including, without limitation, the provision of any financial
accommodations extended to the holders of such other Indebtedness in
connection with the release of such Lien and/or the sale of any
property subject thereto), it being understood that the provision of
such equal and ratable security shall not constitute a cure or waiver
of any related Event of Default.
7A.4 Partnership or Corporate Existence; Compliance with Laws.
(i) Except as otherwise expressly permitted in
accordance with Section 7B.7 or 7B.11, (a) the Borrower will
at all times preserve and keep in full force and effect its
partnership existence and its status as a partnership not
taxable as a corporation for U.S. federal income tax purposes,
(b) the Borrower will cause each of its Subsidiaries to keep
in full force and effect its partnership or corporate
existence, as the case may be, and (c) the Borrower will, and
will cause each of its Subsidiaries to, at all times preserve
and keep in full force and effect all of its material rights
and franchises; provided, however, that the partnership or
corporate existence of any Subsidiary, and any right or
franchise of the Borrower or any Subsidiary, may be terminated
notwithstanding this Section 7A.4 if such termination (x) is
in the best interest of the Borrower and the Subsidiaries, (y)
is not disadvantageous to the holders of the Notes in any
material respect and (z) could not reasonably be expected to
have a Material Adverse Effect.
(ii) The Borrower will, and will cause each of its
Subsidiaries to, at all times comply with all laws,
regulations and statutes (including without limitation any
zoning or building ordinances or code or Environmental Laws)
applicable to it except for any failure to so comply which,
individually or in the aggregate, could not reasonably be
expected to have a Material Adverse Effect.
(iii) The Borrower will notify the Bank a reasonable
time prior to the adoption of any amendment to the Partnership
Agreement, the Partnership Documents, the Note Purchase
Agreements or any Operative Agreement and will include in that
notice a reasonably detailed description of such amendment and
the intended effects thereof.
7A.5 Payment of Taxes and Claims. The Borrower will, and will
cause each of its Subsidiaries to, pay all taxes, assessments and other
governmental charges imposed upon it or any of its Subsidiaries, or any
of its or its Subsidiaries' properties or assets or in respect of any
of its or any of its Subsidiaries' franchises, business, income or
profits when the same become due and payable, and all claims (including
without limitation claims for labor, services, materials and supplies)
for sums which have become due and payable and which by law have or
might become a Lien upon any of its or any of its
56
Subsidiaries' properties or assets; provided that no such tax,
assessment, charge or claim need be paid if it is being contested in
good faith by appropriate proceedings promptly initiated and diligently
conducted and if such reserves or other appropriate provision, if any,
as shall be required by GAAP shall have been made therefor and be
adequate in the good faith judgment of the Board of Directors of the
General Partner.
7A.6 Compliance with ERISA. The Borrower will, and will cause
its Subsidiaries to, comply in all material respects with the
provisions of ERISA and the Code applicable to the Borrower and its
Subsidiaries and their respective employee benefit programs.
7A.7 Maintenance and Sufficiency of Properties.
(i) The Borrower will maintain or cause to be
maintained in good repair, working order and condition,
ordinary wear and tear excepted, all properties used in the
business of the Borrower and its Subsidiaries and from time to
time will make or cause to be made all appropriate repairs,
renewals and replacements thereof, all to the extent necessary
to avoid a Material Adverse Effect.
(ii) The Borrower will maintain and will cause to be
maintained as employees of the Borrower and its Subsidiaries
such number of individuals, having appropriate skills, as may
be necessary from time to time to sustain continuous operation
of the Business at the time. Except as described on Schedule
8.8, the Borrower will continue and will cause its
Subsidiaries to continue to own or have valid rights to use
all of the Assets constituting personal or intellectual
property (including without limitation computer equipment,
computer software and other intellectual property) reasonably
necessary for the operation of the Business, in each case
subject to no Liens except such as are permitted by Section
7B.3.
7A.8 Insurance.
(i) The Borrower will, and will cause its
Subsidiaries to, at its or their expense, at all times
maintain, or cause to be maintained, with financially sound
and reputable insurers, insurance with respect to their
properties and business with coverages comparable to those
generally carried by companies of similar size that conduct
the same or similar business and have similar properties in
the same general areas in which the Borrower conducts its
business; provided, however, that the Borrower may maintain a
system of self-insurance in an amount not exceeding an amount
as is customary for companies with established reputations
engaged in the same or similar business and owning and
operating similar properties.
57
(ii) The Borrower will, and will cause each of its
Subsidiaries to, pay as and when the same become due and
payable the premiums for all insurance policies that the
Borrower and its Subsidiaries are required to maintain
hereunder.
7A.9 Environmental Laws. The Borrower will, and will cause
each of its Subsidiaries to:
(i) comply with all applicable Environmental Laws and
any permit, license, or approval required under any
Environmental Law, except for failures to so comply which
could not reasonably be expected to have a Material Adverse
Effect;
(ii) store, use, release, or dispose of any Hazardous
Substance at any property owned or leased by the Borrower or
any of its Subsidiaries in a manner which could not reasonably
be expected to have a Material Adverse Effect;
(iii) avoid committing any act or omission which
would cause any Lien to be asserted against any property owned
by the Borrower or any of its Subsidiaries pursuant to any
Environmental Law, except where such Lien could not reasonably
be expected to have a Material Adverse Effect;
(iv) use, handle or store any propane in compliance,
in all material respects, with all applicable laws.
7A.10 Operative Agreements. The Borrower will perform and
comply with all of its obligations under each of the Operative
Agreements to which it is a party, will enforce each such Operative
Agreement against each other party thereto and will not accept the
termination of any such Operative Agreement or any amendment or
supplement thereof or modification or waiver thereunder, unless any
such failure to perform, comply or enforce or any such acceptance could
not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect.
7A.11 After-Acquired Property. From and after the date of the
Closing, the Borrower will, and will cause each of its Subsidiaries to,
execute and deliver such amendments to the Security Agreement, execute
and deliver such instruments and agreements (including, without
limitation, such Certificates and Stock Powers) and execute and cause
to be duly recorded, published, registered or filed in the appropriate
jurisdictions such Financing Statements, as shall be necessary to grant
to the Collateral Agent a valid, perfected, first priority security
interest, subject to Liens permitted by the Security Agreement in any
asset acquired by the Borrower or any Subsidiary of the Borrower
(including, without limitation, the Capital Stock of any Subsidiary)
after the Closing, to the extent such asset would have been included in
the Collateral granted at the Closing had the Borrower or one of its
Subsidiaries owned such asset as of the Closing. The Borrower will pay
or cause to be paid all taxes, fees and other governmental charges in
connection with the execution, delivery, recording, publishing,
registration and filing of such documents and instruments in such
places.
58
7A.12 Further Assurances. At any time and from time to time
promptly, the Borrower shall, at its expense, execute and deliver to
each Bank and the Collateral Agent such instruments and documents, and
take such further action, as the holders of the Notes may from time to
time reasonably request, in order to further carry out the intent and
purpose of this Agreement and the other Loan Documents and to
establish, perfect, preserve and protect the rights, interests and
remedies created, or intended to be created, in favor of the Banks, and
including, without limitation, the execution and delivery of
Certificates and the delivery of Stock Powers and the execution,
delivery, recordation and filing of Financing Statements and
continuation statements under the Uniform Commercial Code of any
applicable jurisdiction, and the delivery of satisfactory opinions of
counsel.
7A.13 Books and Accounts. The Borrower will, and will cause
each of its Subsidiaries to, maintain proper books of record and
account in which full, true and proper entries shall be made of its
transactions and set aside on its books from its earnings for each
fiscal year all such proper reserves as in each case shall be required
in accordance with GAAP.
7A.14 Available Cash Reserves. The Borrower will maintain an
amount of cash reserves that is necessary or appropriate in the
reasonable discretion of the General Partner to (i) provide for the
proper conduct of the business of the Borrower and its Subsidiaries
(including reserves for future capital expenditures) subsequent to such
quarter, (ii) comply with applicable law or any loan agreement,
security agreement, mortgage, debt instrument or other agreement or
obligation to which the Borrower or any Subsidiary is a party or by
which it is bound or its assets are subject (including the Loan
Documents) and (iii) provide funds for distributions to partners of the
Master Partnership and the General Partner in respect of any one or
more of the next four quarters; provided that the General Partner need
not establish cash reserves pursuant to clause (iii) if the effect of
such reserves would be that the Master Partnership is unable to
distribute the Minimum Quarterly Distribution (as defined in the
Agreement of Limited Partnership of the Master Partnership) on all
Common Units with respect to such quarter; and provided, further, that
disbursements made by the Borrower or a Subsidiary of the Borrower or
cash reserves established, increased or reduced after the end of such
quarter but on or before the date of determination of Available Cash
with respect to such quarter shall be deemed to have been made,
established, increased or reduced for purposes of determining Available
Cash, within such quarter if the General Partner so determines. In
addition, without limiting the foregoing, Available Cash for any fiscal
quarter shall reflect cash reserves equal to (x) 50% of the interest
projected to be paid on the Private Placement Notes in the next
succeeding fiscal quarter, plus (y) beginning with a date three fiscal
quarters before a scheduled principal payment date on the Private
Placement Notes, 25% of the aggregate principal amount thereof due on
any such payment date in the third succeeding fiscal quarter, 50% of
the aggregate principal amount due on any such payment date in the
second succeeding fiscal quarter and 75% of the aggregate principal
amount due on any quarterly payment date in the next succeeding fiscal
quarter, plus (z) the Unused Proceeds Reserve as of the date of
determination; provided that the foregoing
59
reserves for amounts to be paid on the Private Placement Notes shall be
reduced by the aggregate amount of advances available to the Borrower
from responsible financial institutions under binding, irrevocable (a)
credit or financing commitments (which are subject to no conditions
which the Borrower is unable to meet) and (b) letters of credit (which
are subject to no conditions which the Borrower is unable to meet), in
each case to be used to refinance such amounts to the extent such
amounts could be borrowed and remain outstanding under Sections
7B.2(ii) and 7B.2(iii).
7A.15 Parity Debt.
(i) The Borrower shall ensure that the lenders from
time to time in respect of any outstanding Parity Debt shall,
in the documents governing the terms of such Indebtedness, (a)
recognize the existence and validity of the obligations
represented by the Notes and (b) agree to refrain from making
or asserting any claim that the Loan Documents or the
obligations represented by the Notes are invalid or not
enforceable in accordance with its and their terms as a result
of the circumstances surrounding the incurrence of such
obligations.
(ii) Each Bank and each other Person that becomes a
Bank, as evidenced by its acceptance of its Notes, (a)
acknowledges the existence and validity of the obligations of
the Borrower and Heritage under the Note Purchase Agreements
(and any replacement, extension, renewal, refunding or
refinancing thereof permitted by Section 7B.2, as the case may
be) and (b) agrees to refrain from making or asserting any
claim that such obligations or the instruments governing the
terms thereof are invalid or not enforceable in accordance
with its and their terms as a result of the circumstances
surrounding the incurrence of such obligations.
7A.16 Maintenance of Separateness.
(i) The Borrower will:
(a) maintain books and records separate from
those of any other Person, including any of its
partnership interest holders or any Affiliate or
Subsidiary;
(b) maintain its assets in such a manner
that it is not more costly or difficult to segregate,
identify or ascertain such assets;
(c) observe all corporate formalities;
(d) hold itself out to creditors and the
public as a legal entity separate and distinct from
any other Person, including any of its partnership
interest holders and its Affiliates and Subsidiaries;
60
(e) conduct its business in its name or in
business names or trade names of the Borrower or its
Subsidiaries and use separate stationery, invoices
and checks; and
(f) not assume, guarantee or pay the debts
or obligations of or hold itself out as being
available to satisfy the obligations of any other
Person, including any of its partnership interest
holders and its Affiliates and Subsidiaries, except
as is expressly permitted by the terms of this
Agreement.
(ii) To the extent that the Borrower shares the same
officers or other employees as any of its Affiliates, the
salaries of and the expenses relating to providing benefits to
such officers and employees shall be fairly allocated among
such entities, and each such entity shall bear its fair share
of the salary and benefit costs associated with all such
common officers and employees.
(iii) To the extent that the Borrower jointly
contracts with any of its Affiliates to do business with
vendors or service providers or to share overhead expenses,
the costs incurred in doing so shall be allocated fairly among
such entities, and each such entity shall bear its fair share
of such costs. To the extent that the Borrower contracts or
does business with vendors or service providers where the
goods and services are partially for the benefit of an
Affiliate, the costs incurred in doing so shall be fairly
allocated to or among such entities for whose benefit the
goods and services are provided, and each such entity shall
bear its fair share of such costs.
(iv) To the extent that the Borrower or its
Affiliates have offices in the same location, there shall be a
fair and appropriate allocation of overhead costs among them,
and each such entity shall bear its fair share of such
expenses.
7B. Negative Covenants.
7B.1 Financial Ratios.
(i) Ratio of Consolidated EBITDA to Consolidated
Interest Expense. The Borrower will not permit the ratio, as
of the last day of any fiscal quarter of the Borrower, of
Consolidated EBITDA to Consolidated Interest Expense to be
less than 2.25 to 1;
(ii) Ratio of Consolidated Funded Indebtedness to
Consolidated EBITDA. The Borrower will not permit the ratio,
as of the end of any fiscal quarter of Borrower, of
Consolidated Funded Indebtedness to Consolidated EBITDA to
exceed (a) 4.75 to 1 from November 30, 2003, through November
30, 2004, or (b) 4.50 to 1 from February 28, 2005, and
thereafter;
61
(iii) Ratio of Adjusted Consolidated Funded
Indebtedness to Adjusted Consolidated EBITDA. Borrower will
not permit the ratio, as of the end of any fiscal quarter of
Borrower, of Adjusted Consolidated Funded Indebtedness to
Adjusted Consolidated EBITDA to exceed (a) 5.25 to 1.00 from
November 30, 2003, through August 31, 2005, or (b) 5.00 to 1
on November 30, 2005, and thereafter.
Notwithstanding any of the provisions of this
Agreement the Borrower will not, and will not permit any
Subsidiary to, enter into any transaction pursuant to Section
7B.2, clauses (vii), (viii) and (xiv)(b) of Section 7B.3,
Section 7B.6, of clauses (i)(b), (i)(c), (ii)(b) and (iii) of
Section 7B.7, (x) if after giving effect to any such
transaction a Noncompliance Event, Default or Event of Default
exists or (y) if the consummation of any such transaction
would result in a violation of any clause of this Section 7B.1
or a Noncompliance Event, calculated for such purpose as of
the date on which such transaction were to be consummated both
immediately before and after giving effect to the consummation
thereof; provided, however, that in the case of transactions
pursuant to Section 7B.7, the calculation shall be made on a
pro forma basis in accordance with GAAP after giving effect to
any such transaction, with the ratio recomputed as at the last
day of the most recently ended fiscal quarter of the Borrower
as if such transaction had occurred on the first day of the
relevant four quarter period.
7B.2 Indebtedness. The Borrower will not, and will not permit
any of its Subsidiaries to, create, incur, assume, or otherwise become
directly or indirectly liable with respect to, any Indebtedness, except
(subject to the provisions of Section 7B.4):
(i) the Borrower may become and remain liable with
respect to Indebtedness evidenced by the Notes and
Indebtedness incurred in connection with any extension,
renewal, refunding or refinancing of Indebtedness evidenced by
the Private Placement Notes, provided that the principal
amount of such Indebtedness shall not exceed the principal
amount of the Indebtedness evidenced by the Private Placement
Notes, together with any accrued interest and Yield
Maintenance Amount with respect thereto, being extended,
renewed, refunded or refinanced and (y) such Indebtedness may
not have an average life to maturity shorter than the
remaining average life to maturity of the Indebtedness being
extended, renewed, refunded or refinanced;
(ii) the Borrower may become and remain liable with
respect to Indebtedness incurred under the Working Capital
Facility and any Indebtedness incurred for such purpose which
replaces, extends, renews, refunds or refinances all of such
Indebtedness (in the case of a replacement, refunding or
refinancing, so long as the Acquisition Facility also is
replaced, refunded or refinanced in whole; provided that the
aggregate principal amount of Indebtedness permitted under
this clause (ii) shall not at any time exceed an amount equal
to (x) $20,000,000 less (y) the amount of Indebtedness, if
any, outstanding under the revolving working capital facility
permitted by clause (v) of this Section 7B.2;
62
(iii) the Borrower may become and remain liable with
respect to Indebtedness incurred by the Borrower under the
Acquisition Facility and any Indebtedness incurred for such
purpose which replaces, extends, renews, refunds or refinances
all of such Indebtedness (in the case of a replacement
refunding or refinancing, so long as the Working Capital
Facility also is replaced, refunded or refinanced in whole);
and up to $3,000,000 of Indebtedness owing from time to time
to the Seller(s) in Asset Acquisitions provided that the
aggregate principal amount of Indebtedness permitted under
this clause (iii) shall not at any time exceed the lesser of
$30,000,000 or the sum of the outstanding balance of such
Seller(s) Asset Acquisitions debt referenced above (in no
event in excess of $3,000,000) plus the aggregate Acquisition
Loan Commitments described in Section 10.1, as amended from
time to time;
(iv) any Subsidiary of the Borrower may become and
remain liable with respect to Indebtedness of such Subsidiary
owing to the Borrower or to a Wholly-Owned Subsidiary of the
Borrower;
(v) Heritage Service may remain liable with respect
to Indebtedness incurred under the Heritage Service Credit
Agreement and any Indebtedness incurred for any permitted
purpose which replaces, extends, renews, refunds or refinances
such Indebtedness evidenced by the Service Revolver Notes, in
whole or in part; provided that the aggregate principal amount
of Indebtedness permitted under this clause (v) shall not at
any time exceed $1,000,000;
(vi) the Borrower and any of its Subsidiaries may
become and remain liable with respect to Indebtedness relating
to any business, property or assets acquired by or contributed
to the Borrower or such Subsidiary or which is secured by a
loan on any property or assets acquired by or contributed to
the Borrower or such Subsidiary to the extent such
Indebtedness existed at the time such business, property or
assets were so acquired or contributed, and if such
Indebtedness is secured by such property or assets, such
security interest does not extend to or cover any other
property of the Borrower or any of its Subsidiaries; provided
that (a) immediately after giving effect to such acquisition
or contribution, the Borrower could incur at least $1.00 of
additional Indebtedness pursuant to clause (xiv) of this
Section 7B.2 and (b) such Indebtedness was not incurred in
anticipation of such acquisition or contribution;
(vii) the Company and any of its Subsidiaries may
become and remain liable with respect to Indebtedness arising
from the honoring by a bank or other financial institution of
a check, draft or similar instrument drawn against
insufficient funds in the ordinary course of business,
provided that such Indebtedness is extinguished within 2
Business Days of its incurrence;
(viii) M-P Energy Partnership may become and remain
liable with respect to Indebtedness in an aggregate principal
amount not to exceed
63
$3,000,000, and the Borrower may become and remain liable with
respect to Guarantees of such Indebtedness of M-P Energy
Partnership and of Indebtedness of Bi State Propane, provided
that the aggregate amount of all Guarantees permitted by this
clause (viii) shall not exceed $5,000,000;
(ix) [INTENTIONALLY LEFT BLANK]
(x) any Person that after the Closing Date becomes a
Subsidiary of the Borrower may become and remain liable with
respect to any Indebtedness to the extent such Indebtedness
existed at the time such Person became a Subsidiary; provided
that (a) immediately after giving effect to such Person
becoming a Subsidiary of the Borrower, the Borrower could
incur at least $1.00 of additional Indebtedness in compliance
with clause (xiv) of this Section 7B.2 and (b) such
Indebtedness was not incurred in anticipation of such Person
becoming a Subsidiary of the Borrower;
(xi) the Borrower and any of its Subsidiaries may
become and remain liable with respect to Indebtedness owed to
any person providing workers' compensation, health, disability
or other employee benefits or property, casualty or liability
insurance to the Borrower or any of its Subsidiaries, pursuant
to reimbursement or indemnification obligations to such
person;
(xii) the Borrower and any of its Subsidiaries may
become and remain liable with respect to Indebtedness in
respect of performance bonds, bid bonds, appeal bonds, surety
bonds and similar obligations, in each case provided in the
ordinary course of business, including those incurred to
secure health, safety and environmental obligations in the
ordinary course of business, and any extension, renewal or
refinancing thereof to the extent not provided to secure the
repayment of other Indebtedness and to the extent that the
amount of refinancing Indebtedness is not greater than the
amount of Indebtedness being refinanced;
(xiii) the Borrower may become and remain liable with
respect to Indebtedness incurred in respect of Capitalized
Lease Obligations and Non-Compete Obligations; provided, that
the Lien in respect thereof is permitted by clause (viii) of
Section 7B.3; and
(xiv) the Borrower and its Subsidiaries may become
and remain liable with respect to Indebtedness not exceeding
$100,000,000 in aggregate principal amount at any time
outstanding, in addition to that otherwise permitted by the
other clauses of this Section 7B.2, if (1) the stated maturity
of such Indebtedness (including all scheduled amortizations of
principal thereof) shall not be earlier than the last Final
Maturity Date in effect on the date of incurrence of such
Indebtedness and (2) on the date the Borrower or any of its
Subsidiaries becomes liable with respect to any such
additional Indebtedness and immediately after giving effect
thereto and to the substantially concurrent repayment of any
other Indebtedness (a) the ratio of Consolidated EBITDA to
Consolidated Debt Service
64
is equal to or greater than 2.50 to 1.0 and (b) the ratio of
Consolidated EBITDA to Consolidated Pro Forma Maximum Debt
Service is equal to or greater than 1.25 to 1.0 and (c) no
Default, Event of Default or Noncompliance Event shall exist.
7B.3 Liens. The Borrower will not, and will not permit any of
its Subsidiaries to, create, assume, incur or suffer to exist any Lien
upon or with respect to any of its properties or assets, whether now
owned or hereafter acquired, or any income or profits therefrom
(whether or not provision is made for the equal and ratable securing of
the Notes in accordance with the provisions of Section 7A.3), except:
(i) Liens existing on the Initial Closing Date hereof
on the property and assets of the Borrower or any of its
Subsidiaries as described in Schedule 7B.3;
(ii) Liens for taxes, assessments or other
governmental charges the payment of which is not yet due and
payable or the validity of which is being contested in good
faith in compliance with Section 7A.5;
(iii) attachment or judgment Liens not giving rise to
an Event of Default and with respect to which the underlying
action has been appealed or is being contested in good faith
in compliance with Section 7A.5;
(iv) Liens of lessors, landlords, carriers, vendors,
mechanics, materialmen, warehousemen, repairmen and other like
Liens incurred in the ordinary course of business the payment
of which is not yet due or which is being contested in good
faith in compliance with Section 7A.5, in each case not
incurred or made in connection with the borrowing of money,
the obtaining of advances or credit or the payment of the
deferred purchase price of property, provided that such Liens
do not materially interfere with the conduct of the business
of the Borrower and its Subsidiaries taken as a whole;
(v) Liens (other than any Lien imposed by ERISA)
incurred and pledges and deposits made in the ordinary course
of business (a) in connection with workers' compensation,
unemployment insurance, old age pensions, retiree health
benefits and other types of social security, or (b) to secure
(or to obtain letters of credit that do not constitute
Indebtedness and that secure) the performance of tenders,
statutory obligations, surety and appeal bonds, bids, leases,
performance bonds, contracts and other similar obligations, in
each case not incurred or made in connection with the
borrowing of money or the obtaining of advances or credit
provided that such Liens do not materially interfere with the
conduct of the business of the Borrower and its Subsidiaries
taken as a whole;
(vi) zoning restrictions, easements, licenses,
reservations, provisions, covenants, conditions, waivers,
restrictions on the use of property or irregularities of title
(and with respect to leasehold interests, mortgages,
obligations, liens and other encumbrances incurred, created,
assumed or permitted to exist and arising
65
by, through or under a landlord or owner of the leased
property, with or without consent of the lessee) which do not
in the aggregate materially detract from the value of its
property or assets or materially impair the use thereof in the
operation of its business;
(vii) Liens existing on any property of a Person at
the time such Person becomes a Subsidiary of the Borrower or
existing at the time of acquisition upon any property acquired
by the Borrower or any of its Subsidiaries at the time such
property is so acquired, through purchase, merger or
consolidation or otherwise (whether or not the Indebtedness
secured thereby shall have been assumed); provided, however,
that in the case of any such Lien (1) such Lien shall at all
times be confined solely to any such property and, if required
by the terms of the instrument creating such Lien, other
property which is an improvement to such acquired property,
(2) such Lien was not created in anticipation of such
transaction, and (3) the Indebtedness secured by such Lien
shall be permitted under Section 7B.2;
(viii) Liens created to secure all or any part of the
purchase price, or to secure Indebtedness (other than Parity
Debt) incurred or assumed to pay all or any part of the
purchase price or cost of construction, of property acquired
or constructed by the Borrower or any of its Subsidiaries
after the Closing Date or to secure obligations incurred in
consideration of non-compete agreements ("Non-Compete
Obligations") entered into in connection with any such
acquisition, including an acquisition complying with clause
(b)(y) of Section 7B.9; provided that (a) any such Lien shall
be confined solely to the item or items of such property (or
improvement thereon) so acquired or constructed and, if
required by the terms of the instrument creating such Lien,
other property (or improvement thereon) which is an
improvement to such acquired or constructed property (and, in
the case of any Lien securing Non-Compete Obligations, shall
also be limited to (x) such items of property as acquired
which are not of the character included in the definition of
Collateral and (y) such additional items of the property so
acquired, having a total fair market value (as determined in
good faith by the Board of Directors of the General Partner)
for the sum of (x) and (y) that is not more than the amount of
the Non-Compete Obligations so secured), (b) such item or
items of property so acquired and subject to such Lien are not
required to become part of the Collateral under the terms of
the Security Agreement, (c) any such Lien shall be created
contemporaneously with, or within 180 days after, the
acquisition or construction of such property, and (d) such
Lien does not exceed an amount equal to 85% of the fair market
value (100% in the case of Capitalized Lease Obligations and
35% in the case of Non-Compete Obligations) of such property
(as determined in good faith by the Board of Directors of the
General Partner) at the time of acquisition thereof and (e)
after giving effect to such Lien no Noncompliance Event,
Default or Event of Default shall exist;
66
(ix) Liens on property or assets of any Subsidiary of
the Borrower securing Indebtedness of such Subsidiary owing to
the Borrower or a Wholly-Owned Subsidiary;
(x) leases or subleases of equipment to customers
which do not materially interfere with the conduct of the
business of the Borrower and its Subsidiaries taken as a
whole;
(xi) easements, exceptions or reservations in any
property of the Borrower or any Subsidiary granted or reserved
for the purpose of pipelines, roads, the removal of oil, gas,
coal or other minerals, and other like purposes, or for the
joint or common use of real property, facilities and
equipment, which are incidental to, and do not materially
interfere with, the ordinary conduct of the business of the
Borrower or any of its Subsidiaries;
(xii) Liens (other than Liens securing Indebtedness)
on the property or assets of any Subsidiary of the Borrower in
favor of the Borrower or any other Wholly-Owned Subsidiary of
the Borrower;
(xiii) Liens on the property or assets of Heritage
Service Corp. securing the Indebtedness permitted by clause
(v) of Section 7B.2 provided that (a) any such Lien shall at
all times be contained to property or assets having an
aggregate fair market value not exceeding $2,000,000 and (b)
such indebtedness permitted by clause (v) of Section 7B.2 is
owed to one or more of the Banks;
(xiv) Liens created by any of the Security Documents
securing (a) Indebtedness evidenced by the Notes, the
Acquisition Credit or the Working Capital Credit) and (b)
Additional Parity Debt; and
(xv) any Lien renewing, extending or refunding any
Lien permitted by this Section 7B.3, provided that (a) the
principal amount of the Indebtedness secured by any such Lien
shall not exceed the principal amount of such Indebtedness
outstanding immediately prior to the renewal, extension or
refunding of such Lien and (b) no assets encumbered by any
such Lien other than the assets encumbered immediately prior
to such renewal, extension or refunding shall be encumbered
thereby.
Notwithstanding the foregoing, the Borrower will not, and will
not permit any of its Subsidiaries to, create, assume or incur any Lien
upon or with respect to (a) any Subsidiary stock held by the Borrower
or any other Subsidiary of the Borrower, or (b) any of its proprietary
software developed by or on behalf of the Borrower or its Affiliates
necessary and useful for the conduct of the Business. No Lien permitted
under this Section 7B.3 shall result in over-collateralization except
as required by conventional practice for specific types of borrowings.
67
7B.4 Priority Debt. The Borrower will not permit Priority
Debt, at any time, to exceed the sum of (i) $5,000,000 plus (ii) 10% of
the then Consolidated Tangible Net Worth of the Borrower and its
Subsidiaries(but only to the extent such Consolidated Tangible Net
Worth is positive). The provisions of this Section 7B.4 are further
limitations on Priority Debt that shall otherwise be permitted by
Section 7B.1, 7B.2 or 7B.3.
7B.5 Loans, Advances, Investments and Contingent Liabilities.
The Borrower will not, and will not permit any of its Subsidiaries to,
directly or indirectly, purchase or own any stock, obligations or
securities of, or any other interest in, or make any capital
contribution to, any Person, make or permit to remain outstanding any
loan or advance to, or guarantee, endorse or otherwise be or become
contingently liable, directly or indirectly, in connection with the
obligations of any Person, or make any other Investment, except:
(i) the Borrower or any of its Subsidiaries may make
and own Investments (w) consisting of Units issued for
purposes of making acquisitions, (x) arising out of loans and
advances to employees incurred in the ordinary course of
business, and consisting of advances to pay reimbursable
expenditures, (y) arising out of extensions of trade credit or
advances to third parties in the ordinary course of business
and (z) acquired by reason of the exercise of customary
creditors' rights upon default or pursuant to the bankruptcy,
insolvency or reorganization of a debtor;
(ii) Guarantees that constitute Indebtedness to the
extent permitted by Sections 7B.1 and 7B.2 and other
Guarantees that are not Guarantees of Indebtedness and are
undertaken in the ordinary course of business;
(iii) investment in (collectively, "Cash
Equivalents")
(a) marketable obligations issued or
unconditionally guaranteed by the United States of
America, or issued by any agency thereof and backed
by the full faith and credit of the United States of
America, in each case maturing one year or less from
the date of acquisition thereof,
(b) marketable direct obligations issued by
any state of the United States of America or any
political subdivision of any such state or any public
instrumentality thereof maturing within one year from
the date of acquisition thereof and having as at such
date the highest rating obtainable from either
Standard & Poor's Rating Group or Xxxxx'x Investors
Service, Inc.,
(c) commercial paper maturing no more than
270 days from the date of creation thereof and having
as at the date of acquisition thereof
68
one of the two highest ratings obtainable from either
Standard & Poor's Rating Group or Xxxxx'x Investors
Service, Inc.,
(d) certificates of deposit maturing one
year or less from the date of acquisition thereof (1)
issued by commercial banks incorporated under the
laws of the United States of America or any state
thereof or the District of Columbia or Canada or
issued by the United States branch of any commercial
bank organized under the laws of any country in
Western Europe or Japan, with capital and
stockholders' equity of at least $500,000,000 (or the
equivalent in the currency of such country), (A) the
commercial paper or other short term unsecured debt
obligations of which are as at such date rated either
A-2 or better (or comparably if the rating system is
changed) by Standard & Poor's Rating Group or Prime-2
or better (or comparably if the rating system is
changed) by Xxxxx'x Investors Service, Inc. or (B)
the long-term debt obligations of which are as at
such date rated either A or better (or comparably if
the rating system is changed) by Standard & Poor's
Rating Group or A2 or better (or comparably if the
rating system is changed) by Xxxxx'x Investors
Service, Inc.("Permitted Banks") or (2) issued by BOk
in an aggregate amount for all such certificates of
deposit issued by BOk not to exceed $1,000,000,
(e) Eurodollar time deposits having a
maturity of less than 270 days from the date of
acquisition thereof purchased directly from any
Permitted Bank,
(f) bankers' acceptances eligible for
rediscount under requirements of The Board of
Governors of the Federal Reserve System and accepted
by Permitted Banks, and
(g) obligations of the type described in
clause (a), (b), (c), (d) or (e) above purchased from
a securities dealer designated as a "primary dealer"
by the Federal Reserve Bank of New York or from a
Permitted Bank as counterparty to a written
repurchase agreement obligating such counterparty to
repurchase such obligations not later than 14 days
after the purchase thereof and which provides that
the obligations which are the subject thereof are
held for the benefit of the Borrower or any of its
Subsidiaries by a custodian which is a Permitted Bank
and which is not a counterparty to the repurchase
agreement in question;
(iv) the Borrower or any of its Subsidiaries may
acquire Capital Stock or other ownership interests of a Person
(i) located in the United States of America or Canada, (ii)
incorporated or otherwise formed pursuant to the laws of the
United States of America or Canada or any state or province
thereof or the District of Columbia and (iii) engaged in
substantially the same business as the Borrower which Person
at the time of such acquisition is, or as a result thereof
becomes, a Subsidiary of the Borrower;
69
(v) the Borrower or any of its Subsidiaries may make
and own Investments (in addition to Investments permitted by
clauses (i), (ii), (iii), and (iv) of this Section 7B.5) in
any Person incorporated or otherwise formed pursuant to the
laws of the United States of America or Canada or any state or
province thereof or the District of Columbia; provided,
however, that (i) the sum of (a) the aggregate amount of all
such Investments made by the Borrower and its Subsidiaries
following the Closing Date which are outstanding pursuant to
this clause (v) plus (b) all other Investments held by the
Borrower and its Subsidiaries which are outstanding as of the
Closing Date and listed on Schedule 7B.5 shall not at any date
of determination exceed $10,000,000 (the "Investment Limit");
(ii) the representation in Section 8.18 shall be true and
correct as of the date of determination; and (iii) the
aggregate amount of all such Investments made by the Borrower
and its Subsidiaries and outstanding pursuant to this clause
(v) in Persons engaged in a business which is not
substantially the same as a line of business described in
Section 7B.8 shall not at any date exceed $12,500,000,
including Investments in La Grange and its Subsidiaries which
shall not at any time exceed $1,000,000 and (iv) no Investment
pursuant to this clause (v) may be made unless if after giving
effect thereto no Default or Event of Default exists;
(vi) the Borrower may make and become liable with
respect to any Interest Rate Agreements; and
(vii) any Subsidiary of the Borrower may make
Investments in the Borrower or in a Wholly-Owned Subsidiary of
the Borrower.
7B.6 Restricted Payments. The Borrower will not directly or
indirectly declare, order, pay, make or set apart any sum for any
Restricted Payment, except that the Borrower may declare or order, and
make, pay or set apart, during each fiscal quarter a Restricted Payment
if (i) such Restricted Payment together with all other Restricted
Payments during such fiscal quarter, do not in the aggregate exceed the
amount of Available Cash with respect to the immediately preceding
quarter, and (ii) no Default, Event of Default or Noncompliance Event
exists before or immediately after any such proposed action and
Borrower shall be in pro forma compliance with the financial covenants
of Section 7B.1(i), (ii) and (iii). Notwithstanding the foregoing, the
Borrower will not directly or indirectly declare, order or pay
Restricted Payments, individually or in the aggregate, for any fiscal
quarter in an amount greater than the product of (i) the Borrower's
Percentage of Aggregate Available Cash times (ii) the Aggregate Partner
Obligations.
7B.7 Consolidation, Merger, Sale of Assets. The Borrower will
not, and will not permit any of its Subsidiaries to, directly or
indirectly,
(i) consolidate with or merge into any other Person
or permit any other Person to consolidate with or merge into
it, except that:
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(a) any Subsidiary of the Borrower may
consolidate with or merge into the Borrower or a
Wholly-Owned Subsidiary of the Borrower if the
Borrower or a Wholly-Owned Subsidiary of the
Borrower, as the case may be, shall be the surviving
Person; and
(b) any entity (other than a Subsidiary of
the Borrower) may consolidate with or merge into the
Borrower or a Subsidiary if the Borrower or a
Subsidiary of the Borrower, as the case may be, shall
be the surviving Person and if, immediately after
giving effect to such transaction, (i) the Borrower
and its Subsidiaries (x) shall not have a
Consolidated Net Worth, determined in accordance with
GAAP applied on a basis consistent with the
consolidated financial statements of the Borrower
most recently delivered pursuant to Section 7A.1, of
less than the Consolidated Net Worth of the Borrower
immediately prior to the effectiveness of such
transaction, satisfaction of this requirement to be
set forth in reasonable detail in an Officers'
Certificate delivered to each holder of a Note at the
time of such transaction, and (y) could incur at
least $1.00 of additional Indebtedness in compliance
with Section 7B.1 and clause (xiv) of Section 7B.2,
(ii) substantially all of the assets of the Borrower
and its Subsidiaries, taken as a whole, shall be
located and substantially all of their business shall
be conducted within the continental United States of
America or Canada and (iii) no Default, Event of
Default or Noncompliance Event shall exist and be
continuing;
(ii) sell, lease, abandon or otherwise dispose of all
or substantially all its assets, except that any Subsidiary of
the Borrower may sell, lease or otherwise dispose of all or
substantially all its assets to the Borrower or to a
Wholly-Owned Subsidiary of the Borrower; or
(iii) sell, lease, convey, abandon or otherwise
dispose of (including, without limitation, in connection with
a Sale and Lease-Back Transaction) any of its assets (except
in a transaction permitted by clause (i)(a), (i)(b), (i)(c),
(ii)(a) or (ii)(b) of this Section 7B.7 or sales of inventory
in the ordinary course of business consistent with past
practice) or issue or sell Capital Stock of any Subsidiary of
the Borrower, whether in a single transaction or a series of
related transactions (each of the foregoing non-excepted
transactions, an "Asset Sale"), unless:
(a) immediately after giving effect to such
proposed disposition no Default, Event of Default or
Noncompliance Event shall exist and be continuing,
satisfaction of this requirement to be set forth in
reasonable detail in an Officer's Certificate
delivered to each holder of a Note at the time of
such transaction in the case of any Asset Sale
involving assets that generates EBITDA and such Asset
Sale involves consideration of $250,000 or more;
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(b) such sale or other disposition is for
cash consideration or for consideration consisting of
not less than 75% cash and not more than 25%
interest-bearing promissory notes; provided, that the
75% limitation referred to in this clause (b) shall
not apply to any Asset Sale consisting solely of a
sale or other disposition of land and buildings for
an interest bearing promissory note as long as the
amount of such promissory note does not exceed
$250,000;
(c) one of the following two conditions must
be satisfied:
(i) (x) the aggregate Net Proceeds
of all assets so disposed of (whether or not
leased back) over the immediately preceding
12-month period does not exceed $3,000,000
and (y) the aggregate Net Proceeds of all
assets so disposed of (whether or not leased
back) from the Closing Date through the date
of such disposition does not exceed
$10,000,000; or
(ii) in the event that such Net
Proceeds (less the amount thereof previously
applied in accordance with clause (x) of
this clause (c)(ii)) exceeds the limitations
determined pursuant to clauses (x) and (y)
of clause (c)(i) of this Section 7B.7 (such
excess amount being herein called "Excess
Sale Proceeds"), the Borrower shall within
12 calendar months of the date on which such
Net Proceeds exceeded any such limitation,
cause an amount equal to such Excess Sale
Proceeds to be applied (x) to the
acquisition of assets in replacement of the
assets so disposed of or of assets which may
be productively used in the United States of
America or Canada in the conduct of the
Business, or (y) to the extent not applied
pursuant to the immediately preceding clause
(x), to offer to make prepayments on the
Notes pursuant to Section 4.2.3 hereto and,
allocated on the basis specified for such
prepayments in the definition of Allocable
Proceeds, to offer to repay other Parity
Debt (other than Indebtedness under Section
7B.2 (ii) or that by its terms does not
permit such offer to be made); and
(d) the Borrower shall have delivered to the
Noteholders a Certificate of the Board of Directors
of the General Partner, certifying that such sale or
other disposition is for fair value and is in the
best interests of the Borrower.
Notwithstanding the foregoing, Asset Sales shall not be deemed
to include (1) any transfer of assets or issuance or sale of Capital
Stock by the Borrower or any of its Subsidiaries to the Borrower or a
Wholly-Owned Subsidiary of the Borrower, (2) any transfer of assets or
issuance or sale of Capital Stock by the Borrower or any of its
Subsidiaries to any Person in exchange for, or the Net Proceeds of
which are applied
72
within 12 months to the purchase of, other assets used in a line of
business permitted under Section 7B.8 and having a fair market value
(as determined in good faith by the Board of Directors of the General
Partner) not less than that of the assets so transferred or Capital
Stock so issued or sold and (3) any transfer of assets pursuant to an
Investment permitted by Section 7B.5.
7B.8 Business. The Borrower will not and will not permit any
of its Subsidiaries to engage in any line of business if as a result
thereof the Borrower and its Subsidiaries would not be principally and
predominately engaged in the Business and related general and
administrative operations, as more fully described in the Memorandum
and subject in all respects to the provisions of clause (iii) of the
proviso to Section 7B.5(v).
7B.9 Transactions with Affiliates. The Borrower will not, and
will not permit any of its Subsidiaries to, directly or indirectly,
engage in any transaction with any Affiliate unless (i) (a) such
transaction is on fair and reasonable terms that are no less favorable
to the Borrower or such Subsidiary, as the case may be, than those
which would be obtained in an arm's-length transaction from a Person
other than an Affiliate and (b) such transaction is entered into in the
ordinary course of business and pursuant to the reasonable requirements
at the time of the Borrower's or such Subsidiary's operations, or (y)
such transaction involves the acquisition by the Borrower from the
General Partner of assets formerly owned by an entity, the Capital
Stock of which was purchased by the General Partner, which acquisition
is for a substantially equivalent value as the value of such purchase
consummated within ten days after the consummation of such purchase, as
long as such transaction otherwise would be permitted hereunder had the
Borrower acquired such assets directly from such entity (including, for
example, the acquisition by the Borrower from the General Partner of
assets formerly owned by Kingston Propane, Inc.) (ii) such transaction
is in connection with the incurrence of Indebtedness pursuant to
Section 7B.2(viii), (iii) such transaction is in connection with the
making of an Investment pursuant to Section 7B.5(i) and Section
7B.5(v)(iii) with respect to Investments in La Grange or its
Subsidiaries, (iv) such transaction is a Restricted Payment permitted
by Section 7B.6, (v) such transaction involves performance under the
Contribution Agreement (substantially in the form in effect on the
Closing Date), (vi) such transaction involves indemnification and
contribution under Section 7.7 of the Partnership Agreement (as said
section is in effect on the Closing Date), to the extent such
indemnification or contribution arises from operations or activities in
connection with the Business (including securities issuances in
connection with funding the Business) or (vii) such transaction is a
specific transaction described in the Registration Statement.
7B.10 Subsidiary Stock and Indebtedness.
(i) The Borrower will not permit any of its
Subsidiaries directly or indirectly to issue or sell any
Equity Interest of such Subsidiary of the Borrower to any
Person other than the Borrower or a Wholly-Owned Subsidiary of
the Borrower except (a) for the purpose of qualifying
directors or (b) in satisfaction of
73
pre-emptive rights of holders of minority interests which are
triggered by an issuance of Equity Interests to the Borrower
or a Subsidiary of the Borrower and permit such holders to
maintain their pro rata interests.
(ii) The Borrower will not directly or indirectly
sell, assign, pledge or otherwise dispose of any Equity
Interest in or any Indebtedness of any of its Subsidiaries,
and will not permit any of its Subsidiaries directly or
indirectly to sell, assign, pledge or otherwise dispose of any
Equity Interest in or any Indebtedness of any other Subsidiary
of the Borrower except to the Borrower or a Wholly-Owned
Subsidiary of the Borrower, unless (a) simultaneously with
such sale, transfer or disposition, all of the Equity
Interests (other than an Equity Interest representing less
than 2% of the outstanding Equity Interests of all classes of
such Subsidiary taken together, provided that such Equity
Interest is considered an Investment pursuant to Section
7B.5(v) and is permitted thereunder) or Indebtedness of such
Subsidiary owned by the Borrower and its Subsidiaries is sold,
transferred or disposed of as an entirety, (b) the Board of
Directors of the General Partner shall have determined, as
evidenced by a resolution thereof, that the proposed sale,
transfer or disposition of such Equity Interests or
Indebtedness is in the best interests of the Borrower, (c)
such Equity Interests or Indebtedness are sold, transferred or
otherwise disposed of for cash or Cash Equivalents or other
assets used in a line of business permitted by Section 7B and
having a fair market value (as determined in good faith by the
Board of Directors of the General Partner) not less than that
of the Equity Interests or Indebtedness so transferred, to a
Person upon terms deemed by the Board of Directors of the
General Partner to be acceptable, (d) the Subsidiary being
sold, transferred or otherwise disposed of shall not have any
continuing investment in the Borrower or any Subsidiary of the
Borrower not being so sold, transferred or disposed and (e)
such sale, transfer or disposition is permitted by Section
7B.7.
7B.11 Payment of Dividends by Subsidiaries. The Borrower will
not, and will not permit any of its Subsidiaries to, be subject to or
enter into any agreement which restricts the ability of any Subsidiary
of the Borrower to declare or pay any dividend to the Borrower, to make
any distribution on any Equity Interest of such Subsidiary to the
Borrower, or to lend money to the Borrower.
7B.12 Sales of Receivables. The Borrower will not, and will
not permit any of its Subsidiaries to, discount, pledge, sell (with or
without recourse), or otherwise sell for less than face value thereof
any of its accounts or notes receivable, except for sales of
receivables (i) without recourse which are seriously past due and which
have been substantially written off as uncollectible or collectible
only after extended delays, or (ii) made in connection with the sale of
a business but only with respect to the receivables directly generated
by the business so sold.
7B.13 Material Agreements; Tax Status. The Borrower will not:
74
(i) amend or directly or indirectly modify in any
manner the definitions of "Allocable Proceeds" or "Excess
Proceeds" of the Note Purchase Agreements or any similar
provisions of any agreement applicable to any extensions,
renewals or refundings thereof as Parity Debt under the
provisions of paragraph 7B.2(i);
(ii) amend or modify in any manner adverse to the
holders of the Notes, or grant any waiver or release under (if
such action shall be adverse to the holders of the Notes), any
Partnership Document, any notes evidencing Parity Debt or any
agreement relating to Parity Debt or terminate in any manner
any Partnership Document, it being understood, without
limitation, that no modification that reduces principal,
interest or fees, premiums, make-wholes or penalty charges, or
extends any scheduled or mandatory payment, prepayment or
redemption of principal or interest, or makes less restrictive
any agreement or releases away any security, or waives any
condition precedent or default shall be adverse to the holders
of the Notes for purposes of this Agreement; or
(iii) permit the Master Partnership or the Borrower
to be treated as an association taxable as a corporation or
otherwise to be taxed as an entity for federal income tax
purposes.
7B.14 Commingling of Deposit Accounts and Accounts. The
Borrower will not, nor will it permit any of its Subsidiaries to,
commingle their respective deposit accounts or accounts with the
deposit accounts of La Grange or any of its Subsidiaries.
ARTICLE VIII
REPRESENTATIONS, COVENANTS AND WARRANTIES
The Borrower represents, covenants and warrants as follows:
8.1 Organization. The Borrower is a limited partnership duly organized,
validly existing and in good standing under the laws of the State of Delaware
and has all requisite partnership power and authority to own and operate its
properties (including without limitation the assets owned and operated by it),
to conduct its business, to enter into this Agreement and the other Loan
Documents to which it is a party and the Operative Agreements and to carry out
the terms of this Agreement, the Notes, such other Loan Documents and Operative
Agreements. Each Subsidiary of the Borrower is duly organized, validly existing
and in good standing under the laws of its state of organization and has all
requisite power and authority to own and operate its properties (including
without limitation the assets owned and operated by it).
8.2 Partnership Interests. The sole general partner of the Borrower is
U.S. Propane. The sole general partner of U.S. Propane is USPLLC. At the Closing
Date, the Borrower does not have any Subsidiary other than the Subsidiaries of
the Borrower as set forth on Schedule 8.2 or any Investments in any Person
(other than as set forth on Schedules 7B.5 or 8.2 or Investments of the types
described in Section 7B.5(i), (ii), (iii) or (vi)).
75
8.3 Qualification. The Borrower is duly qualified or registered and is
in good standing as a foreign limited partnership for the transaction of
business, and each of the Subsidiaries of the Borrower is duly qualified or
registered and is in good standing as a foreign corporation or partnership, as
the case may be, for the transaction of business, in the states and to the
extent listed in Schedule 8.3, and, except as reflected on Schedule 8.3, on the
Closing Date there are no other jurisdictions in which the nature of their
respective activities or the character of the properties they own, lease or use
makes such qualification or registration necessary and in which the failure so
to qualify or to be so registered would have a Material Adverse Effect. The
Borrower has taken all necessary partnership action to authorize the execution,
delivery and performance by it of this Agreement, the other Financing Documents
to which it is a party and the Operative Agreements. The Borrower has duly
executed and delivered each of this Agreement, the other Loan Documents and the
Operative Agreements to which it is a party, and each of such documents and
agreements and the Notes and the Security Documents constitute the legal, valid
and binding obligation of the Borrower enforceable against it in accordance with
its terms, except as such enforceability may be limited by bankruptcy,
insolvency, moratorium or similar laws affecting creditors' rights generally and
general principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law).
8.4 Financial Statements. The Borrower has delivered to the
Administrative Agent complete and correct copies of the audited financial
statements of the Borrower as of August 31, 2003, together with any unaudited
financial statements available or provided to the Borrower for periods after
August 31, 2003. Such financial statements have been prepared in accordance with
GAAP and fairly present in all material respects the financial position of the
Borrower as of the close of the applicable period covered thereby.
8.5 Actions Pending. There is no action, suit, investigation or
proceeding pending or, to the knowledge of the Borrower, threatened against the
Borrower or the General Partner or any of the Subsidiaries of the Borrower, or
any properties or rights of the Borrower or the General Partner or any of the
Subsidiaries of the Borrower, by or before any court, arbitrator or
administrative or governmental body (i) which questions the validity or
enforceability of this Agreement, the Notes, any other Financing Document or any
Operative Agreement or any action to be taken pursuant to this Agreement, the
Notes, any other Loan Document or any Operative Agreement or (ii) which could
reasonably be expected to result in a Material Adverse Effect.
8.6 Changes. Except as contemplated by this Agreement, the Notes, the
other Financing Documents or the Operative Agreements or as described in the
Registration Statement or the Memorandum, (i) neither the Borrower nor any of
the Subsidiaries of the Borrower has incurred any material liabilities or
obligations, direct or contingent, nor entered into any material transaction, in
each case other than in the ordinary course of business, and (ii) there has not
been any material adverse change in or effect on the business, assets, financial
condition (including as reflected on the audited financial statements for August
31, 2003) or prospects of the Borrower or any of the Subsidiaries of the
Borrower.
8.7 Outstanding Indebtedness. Other than the Credit Obligations
represented by the Notes, neither the Borrower nor any of the Subsidiaries of
the Borrower as set forth on Schedule
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8.2 has outstanding any Indebtedness except as set forth on Schedule 8.7 and any
such Indebtedness which is indicated in Schedule 8.7 to be paid in full on the
Closing Date will be paid in full at the time of Closing. There exists no
default under the provisions of any instrument evidencing such Indebtedness or
of any agreement relating thereto. On the Closing Date, no instrument or
agreement to which the Borrower or any of the Subsidiaries of the Borrower is a
party or by which the Borrower, any such Subsidiary, or their respective
properties is bound (other than this Agreement and the Note Purchase Agreements
and other than as indicated in Schedule 8.7) will contain any restriction on the
incurrence by the Operating Partnership or any of the Subsidiaries of the
Borrower of additional Indebtedness.
8.8 Transfer of Assets and Business; Title to Properties.
(i) Except as set forth on Schedule 8.8, the Borrower and the
Subsidiaries of the Borrower will at the Closing Date be in possession
of, and operating in compliance with, all franchises, grants,
authorizations, approvals, licenses, permits, easements, rights-of-way,
consents, certificates and orders (collectively, the "Permits")
required (a) to own, lease or use its properties (including without
limitation to own, lease or use the Assets owned, leased or used by it)
and (b) considering all such Permits in the possession of, and complied
with by, the Borrower and its Subsidiaries taken together, to permit
the conduct of the Business as now conducted and proposed to be
conducted, except for those Permits (x) which are routine and
administrative in nature and are expected in the reasonable judgment of
the Borrower to be obtained or given in the ordinary course of business
from time to time after the Closing Date, and (y) which, if not
obtained or given, would not, individually or in the aggregate, present
a reasonable likelihood of having a Material Adverse Effect,
(ii) Except as set forth on Schedule 8.8, on and after the
Closing Date, the Borrower and the Subsidiaries of the Borrower will
have, (i) good and marketable title to, or valid leasehold interests
in, all of the Assets constituting real property except for defects in,
or lack of recorded, title and exceptions to leasehold interests that
either alone or in the aggregate could not reasonably be expected to
result in a Material Adverse Effect, and (ii) good and sufficient title
to, or valid rights to use, all of the Assets constituting personal
property reasonably necessary for the operation of such personal
property as it is used on the date hereof and proposed to be used in
the Business, in each case subject to no Liens except such as are
permitted by Section 7B.3. The Assets owned by the Borrower and the
Subsidiaries of the Borrower will be all of the assets and properties
reasonably necessary to enable the Borrower and its Subsidiaries to
conduct the Business on the Closing Date. Subject to such exceptions as
would not, individually or in the aggregate, present a reasonable
likelihood of having a Material Adverse Effect (A) on the date hereof
the Borrower and its Subsidiaries enjoy, peaceful and undisturbed
possession under all leases and subleases necessary in any material
respect for the conduct of the Business, and (B) all such leases and
subleases are valid and subsisting and are in full force and effect.
None of the properties or assets of the Borrower or any of the
Subsidiaries of the Borrower is subject to any Lien other than Liens
that would be permitted hereunder.
77
8.9 Taxes. On the Closing Date each of the Operating Partnership and
its Subsidiaries will have filed all federal, state and other income tax returns
which, to the knowledge of the Borrower, are required to be filed or will have
properly filed for extensions of time for the filing thereof, and has paid all
taxes, assessments and other governmental charges levied upon it or any of its
properties, assets, income or franchises as shown to be due on such returns,
except those which are not past due or are being contested in good faith in
compliance with Section 7A.5. The Borrower is a limited partnership not subject
to taxation with respect to its income or gross receipts under applicable state
laws and that is treated as a pass-through entity for U.S. federal income tax
purposes.
8.10 Compliance with Other Instruments; Solvency.
(i) On the Closing Date, immediately prior to the completion
of the transactions contemplated by this Agreement, the Notes, the
other Loan Documents and the Operative Agreements), neither the
Borrower nor any of the Subsidiaries of the Borrower will be in
violation of (a) any provision of its certificate or articles of
incorporation or other constitutive documents or its by-laws, (b) any
provision of any agreement or instrument to which it is a party or by
which any of its properties is bound or (c) any applicable law,
ordinance, rule or regulation of any Governmental Authority or any
applicable order, judgment or decree of any court, arbitrator or
Governmental Authority except (in the case of clauses (b) and (c) above
only) for such violations which would not, individually or in the
aggregate, present a reasonable likelihood of having a Material Adverse
Effect.
(ii) The execution, delivery and performance of this
Agreement, the Notes, the other Loan Documents and the Operative
Agreements, and the completion of the transactions contemplated by the
Registration Statement to occur prior to the Closing Date (including
without limitation the transactions contemplated by this Agreement, the
Notes, the other Loan Documents and the Operative Agreements) will not
violate (a) any provision of the certificate or articles of
incorporation or other constitutive documents or by-laws of the
Borrower, the General Partner or any of the Subsidiaries of the
Borrower, (b) any applicable law, ordinance, rule or regulation of any
Governmental Authority or any applicable order, judgment or decree of
any court, arbitrator or Governmental Authority, or (c) any provision
of any agreement or instrument to which the Borrower, the General
Partner or any of the Subsidiaries of the Borrower is a party or by
which any of its properties is bound.
(iii) Upon completion of the transactions contemplated by this
Agreement, the Notes, the other Loan Documents and the Operative
Agreements), none of the Borrower, the General Partner or any
Subsidiary of the Borrower shall (a) be insolvent, (b) be engaged or
about to engage in business or a transaction at a time the Borrower,
the General Partner or any Subsidiary of the Borrower could be viewed
as having unreasonably small capital, or (c) intend to incur, or
believe that it would incur, debts that would be beyond its ability to
pay as such debts matured.
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8.11 Governmental Consent. No consent, approval or authorization of, or
declaration or filing with, any Governmental Authority is required for the valid
execution, delivery and performance of this Agreement, the Notes, the other Loan
Documents or the Operative Agreements.
8.12 Use of Proceeds. None of the proceeds of the Loans will be used,
directly or indirectly, for the purpose, whether immediate, incidental or
ultimate, of purchasing or carrying any margin stock (as defined in Section 8.17
hereof) or for the purpose of maintaining, reducing or retiring any indebtedness
which was originally incurred to purchase or carry any stock that is currently a
margin stock or for any other purpose which might constitute this transaction a
"purpose credit" within the meaning of such Regulation U or X. The Borrower nor
anyone acting on their respective behalfs has taken or will take any action
which might cause this Agreement or the Notes to violate Regulation U,
Regulation T or any other regulation of the Board of Governors of the Federal
Reserve System or to violate the Exchange Act, in each case as in effect now or
as the same may hereafter be in effect.
8.13 ERISA. The Borrower and their respective ERISA Affiliates is in
compliance in all material respects with the applicable provisions of ERISA and
the Code and the regulations and published interpretations thereunder. No ERISA
Event has occurred or is reasonably expected to occur that, when taken together
with all other such ERISA Events, could reasonably be expected to result in a
Material Adverse Effect. The present value of all benefit liabilities under each
Plan (based on those assumptions used for purposes of Statement of Financial
Accounting Standards No. 87) did not, as of the last annual valuation date
applicable thereto, exceed by more than $2,000,000 the fair market value of the
assets of such Plan, and the present value of all benefit liabilities of all
underfunded Plans (based on those assumptions used for purposes of Statement of
Financial Accounting Standards No. 87) did not, as of the last annual valuation
dates applicable thereto, exceed by more than $2,000,000 the fair market value
of the assets of all such underfunded Plans.
8.14 Environmental Compliance.
(i) Except where the failure to be in compliance could not
present a reasonable likelihood of having a Material Adverse Effect, as
of the date hereof the Borrower and each Subsidiary of the Borrower is
in compliance with all Environmental Laws applicable to it and to the
Business or Assets. The Borrower and each Subsidiary of the Borrower is
in compliance with all franchises, grants, authorizations, permits,
licenses, and approvals required under Environmental Laws, except for
any non-compliance or failure to obtain such Permits which could not
reasonably be expected to have a Material Adverse Effect. The Borrower
has caused U.S. Propane or the Master Partnership to submit timely and
complete applications to renew any expired or expiring Permits required
pursuant to any Environmental Law, except for any non-compliance or
failure to obtain such permits which could not reasonably be expected
to have a Material Adverse Effect. All reports, documents, or other
submissions required by Environmental Laws to be submitted by the
Borrower to any Governmental Authority or Person have been filed by or
on behalf of the Borrower, except where the failure to do so would not
present a reasonable likelihood of having a Material Adverse Effect.
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(ii) (a) There is no Hazardous Substance present at any of the
real property currently owned or leased by the Borrower or any of the
Subsidiaries of the Borrower except to the extent that such presence
could not reasonably be expected to have a Material Adverse Effect, and
(b) to the knowledge of the Borrower, there was no Hazardous Substance
present at any of the real property formerly owned or leased by U.S.
Propane or the Master Partnership during the period of ownership or
leasing by such Person; and with respect to such real property and
subject to the same knowledge and temporal qualifiers concerning
Hazardous Substances with respect to formerly owned or leased real
properties, there has not occurred (x) any release, or to the knowledge
of the Borrower, any threatened release of a Hazardous Substance, or
(y) any discharge or, to the knowledge of the Borrower, any threatened
discharge of any Hazardous Substance into the ground, surface or
navigable waters which discharge or threatened discharge violates any
federal, state, local or foreign laws, rules or regulations concerning
water pollution.
(iii) Neither the Borrower nor any of the Subsidiaries of the
Borrower has disposed of, transported, or arranged for the
transportation or disposal of any Hazardous Substance where such
disposal, transportation, or arrangement would give rise to liability
pursuant to CERCLA or any analogous state statute other than any such
liabilities that could not reasonably be expected to have a Material
Adverse Effect.
(iv) Except as disclosed to the Banks in writing, (a) no Lien
has been asserted by any Governmental Authority or person resulting
from the use, spill, discharge, removal, or remediation of any
Hazardous Substance with respect to any real property currently owned
or leased by U.S. Propane or the Master Partnership or the Borrower,
and (b) to the knowledge of the Borrower, no such Lien was asserted
with respect to any of the real property formerly owned or leased by
Heritage during the period of ownership or leasing of the real property
by such Person.
(v) (a) There are no underground storage tanks,
asbestos-containing materials, polychlorinated biphenyls, or urea
formaldehyde insulation at any of the real property currently owned or
leased by the Borrower in violation of any Environmental Law, and (b)
to the knowledge of the Borrower, there were no underground storage
tanks, asbestos-containing materials, polychlorinated biphenyls, or
urea formaldehyde insulation at any of the real property formerly owned
or leased by U.S. Propane or the Master Partnership in violation of any
Environmental Law during the period of ownership or leasing of such
real property by such Person.
(vi) As of the date hereof, any propane is stored, used and
handled by the Borrower and the Subsidiaries of the Borrower in
compliance with all applicable Environmental Laws except for any
storage, use or handling of propane that could not reasonably be
expected to have a Material Adverse Effect.
8.15 Pre-emptive Rights. There are no pre-emptive rights to which a
holder of a minority interest in any Subsidiary of the Borrower is entitled.
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8.16 Disclosure. This Agreement, the Notes, the other Loan Documents,
the Operative Agreements, the Memorandum and any other document, certificate or
statement furnished to any Bank by or on behalf of the Borrower, the General
Partner or their respective Subsidiaries or Affiliates, in connection herewith,
taken together, do not contain any untrue statement of a material fact or omit
to state a material fact necessary in order to make the statements contained
herein and therein, in light of the circumstances under which they were made,
not misleading. There is no fact known to the Borrower which has or in the
future could reasonably be expected to have (so far as the Borrower can now
foresee) a Material Adverse Effect and which has not been set forth in this
Agreement or in the other documents, certificates and statements furnished to
each the Banks hereunder by or on behalf of the Borrower.
8.17 Federal Reserve Regulations. Neither the Borrower nor the
Subsidiary of the Borrower will, directly or indirectly, use any of the proceeds
of any Loan for the purpose, whether immediate, incidental or ultimate, of
buying a "margin stock" or of maintaining, reducing or retiring any indebtedness
originally incurred to buy a stock that is currently a "margin stock", or for
any other purpose which might constitute this transaction a "purpose credit"
which is secured "directly or indirectly by margin stock", in each case within
the meaning of Regulation U of the Board of Governors of the Federal Reserve
System (12 C.F.R. 207, as amended), or otherwise take or permit to be taken any
action which would involve a violation of such Regulation U or of Regulation X
(12 C.F.R. 224, as amended) or any other applicable regulation of such Board. No
indebtedness being retired, directly or indirectly, out of the proceeds of the
Loans will be incurred for the purpose of buying or carrying any stock which is
currently a "margin stock", and the Borrower neither owns or has any present
intention of acquiring any amount of such "margin stock".
8.18 Investment Borrower Act. None of the Borrower or any Subsidiary of
the Borrower is an "investment Borrower", or a Borrower "controlled" by an
"investment Borrower", within the meaning of the Investment Borrower Act of
1940, as amended.
8.19 Public Utility Holding Company Act. The Borrower, the General
Partner and each Subsidiary of the Borrower is exempt from all of the provisions
of the Public Utility Holding Company Act of 1935, as amended (the "PUHCA") and
the rules thereunder other than Section 9(a)(2) thereof based upon a no-action
letter from the Commission dated June 19, 1996.
ARTICLE IX
EVENTS OF DEFAULT
9.1 Acceleration. If any of the following conditions or events ("Events
of Default") shall occur and be continuing for any reason whatsoever (and
whether such occurrence shall be voluntary or involuntary or come about or be
effected by operation of law or otherwise):
(i) the Borrower defaults in the payment of any principal of
on any Note when the same becomes due and payable, either by the terms
thereof or otherwise as herein provided; or
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(ii) the Borrower defaults in the payment of any interest on
any Note for more than 5 days after the same becomes due and payable;
or
(iii) the Borrower or any Subsidiary of the Borrower (whether
as primary obligor or as guarantor or other surety) defaults in any
payment of principal of or interest on any Parity Debt or any other
Indebtedness other than the Notes (including without limitation 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 Borrower or any Subsidiary of the
Borrower fails to perform or observe any other agreement or 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 failure or other
event is to cause, or to permit the holder or holders of such
Indebtedness (or a trustee on behalf of such holder or holders) to
cause, such obligation to become due or to be repurchased prior to any
stated maturity, provided that the aggregate amount of all Indebtedness
as to which such a default (payment or other) shall occur and be
continuing or such a failure or other event causing or permitting
acceleration (or resale to the Borrower or any Subsidiary of the
Borrower) shall occur and be continuing exceeds $2,000,000; provided,
further, that no waiver, modification or amendment relating to any such
a default (payment or other) or such a failure or other event with
respect to any Parity Debt or agreement or instrument relating to any
Parity Debt shall be effective for purposes of this clause (iii) if any
consideration (other than the payment of reasonable attorney's fees) is
given, directly or indirectly, by the Borrower or any of its
Subsidiaries or Affiliates in respect thereof, unless substantially the
same consideration is given to the holders of the Notes; or
(iv) any representation or warranty made in any writing by or
on behalf of the Borrower, General Partner or the Master Partnership in
this Agreement, any other Loan Document or any instrument furnished
pursuant to this Agreement or any Loan Document shall prove to have
been false or incorrect in any material respect on the date as of which
made; or
(v) the Borrower fails to perform, observe or comply with any
agreement contained in Sections 7B.1 through 7B.14; or
(vi) the Borrower fails to perform or observe any other
agreement, term or condition contained in this Agreement or the other
Loan Documents and such failure shall not be remedied within 30 days
after any Responsible Officer obtains actual knowledge or notice
thereof; or
(vii) the General Partner, the Borrower or any Significant
Subsidiary Group makes an assignment for the benefit of creditors or is
generally not paying its debts as such debts become due; or
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(viii) any decree or order for relief in respect of the
General Partner, the Borrower or any Significant Subsidiary Group is
entered under any bankruptcy, reorganization, compromise, arrangement,
insolvency, readjustment of debt, dissolution or liquidation or similar
law, whether now or hereafter in effect (herein called the "Bankruptcy
Law"), of any jurisdiction; or
(ix) The General Partner, the Borrower or any Significant
Subsidiary Group 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 General Partner, the
Borrower or any Significant Subsidiary Group , or of any substantial
part of the assets of the General Partner, the Borrower or any
Significant Subsidiary Group, or commences a voluntary case under the
Bankruptcy Law of the United States or any proceedings (other than
proceedings for the voluntary liquidation and dissolution of the
General Partner, the Borrower or any Significant Subsidiary Group)
relating to the General Partner, the Borrower or any Significant
Subsidiary Group under the Bankruptcy Law of any other jurisdiction; or
(x) any such petition or application is filed, or any such
proceedings are commenced, against the General Partner, the Borrower or
any Significant Subsidiary Group and the General Partner, the Borrower
or any Significant Subsidiary Group by any act indicates its approval
thereof, consents thereto or acquiesces 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; or
(xi) a judgment or judgments for the payment of money in
excess of $2,000,000 in the aggregate (except to the extent covered by
insurance as to which the insurer has acknowledged in writing its
obligation to cover in full) shall be rendered against the Borrower or
any Subsidiary of the Borrower and either (i) enforcement proceedings
have been commenced by any creditor upon such judgment or order or (ii)
within 45 days after entry thereof, such judgment is not discharged or
execution thereof stayed pending appeal, or within 45 days after the
expiration of any such stay, such judgment is not discharged; or
(xii) any order, judgment or decree is entered in any
proceedings against the General Partner, the Borrower or any
Significant Subsidiary Group decreeing the dissolution of the General
Partner, the Borrower or any Significant Subsidiary Group and such
order, judgment or decree remains unstayed and in effect for more than
30 days or any other event occurs that results in the termination,
dissolution or winding up of the Borrower, subject to Section 7B.7, the
General Partner or any Significant Subsidiary Group; or
(xiii) any order, judgment or decree is entered in any
proceedings against the Borrower or any of its Subsidiaries decreeing a
split-up of the Borrower or such Subsidiary which requires the
divestiture of assets representing a substantial part, or the
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divestiture of the stock of a Subsidiary of the Borrower whose assets
represent a substantial part of the consolidated assets of the Borrower
and its Subsidiaries (determined in accordance with GAAP) or which
requires the divestiture of assets, or stock of a Subsidiary of the
Borrower, which shall have contributed a substantial part of the
Consolidated Net Income of the Borrower and its Subsidiaries for any of
the three fiscal years then most recently ended, and such order,
judgment or decree shall not be dismissed or execution thereon stayed
pending appeal or review within 45 days after entry thereof, or in the
event of such a stay, such order, judgment or decree shall not be
dismissed within 45 days after such stay expires; or
(xiv) any of the Security Documents shall at any time, for any
reason cease to be in full force and effect or shall fail to constitute
a valid, perfected first priority Lien with respect to the Collateral
subject to Liens permitted by the Security Agreement or shall be
declared to be null and void in whole or in any material respect (i.e.,
relating to the validity or priority of the Liens created by the
Security Documents or the remedies available thereunder) by the
judgment of any court or other Governmental Authority having
jurisdiction in respect thereof, or if the validity or the
enforceability of any of the Security Documents shall be contested by
or on behalf of the Borrower, or the Borrower shall renounce any of the
Security Documents, or deny that it is bound by the terms of any of the
Security Documents; or
(xv) any of the events described in clauses (a), (b), (c) or
(d) shall occur: (a) the General Partner shall be engaged in any
business or activities other than those permitted by the Partnership
Agreement as in effect from time to time and in accordance with
Section 7B.8, or (b) U.S. Propane ceases to be the sole general partner
of the Borrower or the Master Partnership, or (c) the Specified
Entities shall own, directly or indirectly through Wholly-Owned
Subsidiaries, in the aggregate less than 51% of the Capital Stock of
the General Partner; or (d) a Change of Control during not more than
any twelve (12) month consecutive period of time.
(xvi) an ERISA Event shall have occurred that, when taken
together with all other such ERISA Events that have occurred, could
reasonably be expected to result in liability of the Borrower and its
ERISA Affiliates in an aggregate amount exceeding $2,000,000; or
(xvii) an event of default under any of the Security Documents
has occurred and is continuing; or
(xviii) the occurrence of an event of default under the La
Grange Credit Agreement or any other agreement governing secured
indebtedness of La Grange relating to (a) bankruptcy, reorganization,
compromise, arrangement, insolvency, readjustment of debt, dissolution
or liquidation or similar law with respect to La Grange or any of its
Subsidiaries, beyond any period of grace provided with respect thereto
in such agreement, (b) non-payment of such secured indebtedness or any
other indebtedness of LaGrange or any of its Subsidiaries, subject to
the minimum dollar amount threshold of such indebtedness set forth in
such agreement, provided that such non-payment continues
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for a period of 3 business days beyond any period of grace provided
with respect thereto in such agreement, unless, prior to the end of the
3 business day period, the lenders party to such agreement have
accelerated the maturity of such indebtedness thereunder or blocked the
payment or otherwise limited the payment by La Grange of any scheduled
"restricted payment" distribution in respect of any partnership or
other equity interest in La Grange, in which case such 3 business-day
period shall no longer apply, or (c) any financial covenant default
with respect to La Grange which has not been cured, waived or amended
within 45 days of the date on notice of such default was given to the
lenders party to such agreement, unless, prior to the end of the 45-day
period, the lenders party to such agreement shall have blocked the
payment or otherwise limited the payment by La Grange of any scheduled
"restricted payment" distribution in respect of any partnership or
other equity interest in La Grange or shall have accelerated the
maturity of such indebtedness, in which case such 45 day period shall
no longer apply.
9.2 Remedies. Upon the occurrence of any Event of Default referred to
in (viii), (ix) or (x) of this Section 9.1 the Commitments shall immediately
terminate and the Notes and all other Indebtedness shall be immediately due and
payable, without further notice of any kind. Upon the occurrence of any other
Event of Default, and without prejudice to any right or remedy of the Banks
under this Agreement or the Loan Documents or under applicable Law of under any
other instrument or document delivered in connection herewith, the Banks may (i)
declare the Commitments terminated or (ii) declare the Commitments terminated
and declare the Notes and the other Indebtedness, or any part thereof, to be
forthwith due and payable, whereupon the Notes and the other Indebtedness, or
such portion as is designated by the Banks shall forthwith become due and
payable, without presentment, demand, notice or protest of any kind, all of
which are hereby expressly waived by the Borrower and the maturity of all of the
Loans and Obligations shall be accelerated. No delay or omission on the part of
the Banks in exercising any power or right hereunder or under the Notes, the
Loan Documents or under applicable law shall impair such right or power or be
construed to be a waiver of any default or any acquiescence therein, nor shall
any single or partial exercise by the Banks of any such power or right preclude
other or further exercise thereof or the exercise of any other such power or
right by the Banks. In the event that all or part of the Indebtedness becomes or
is declared to be forthwith due and payable as herein provided, the Banks shall
have the right to set off the amount of all the Indebtedness of the Borrower
owing to the Banks against, and shall have, and is hereby granted by the
Borrower, a lien upon and security interest in, all property of each of the
Borrower in the Banks' possession at or subsequent to such default, regardless
of the capacity in which the Banks possess such property, including but not
limited to any balance or share of any deposit, collection or agency account.
After termination of the Commitments and acceleration of the maturity of the
Loans and Obligations hereunder, all proceeds and amounts received by the Banks
shall be shared ratably among the Lenders as set forth in Section 9.4. At any
time after the occurrence of any Event of Default, the Banks may, at their
option, cause an audit of any and/or all of the books, records and documents of
the Borrower to be made by auditors satisfactory to the Banks at the expense of
the Borrower. The Banks also shall have, and may exercise, each and every right
and remedy granted to them for default under the terms of the Security Documents
and the other Loan Documents.
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9.3 Other Remedies. If any Event of Default or Default shall occur and
be continuing, the holder of any Note may proceed to protect and enforce its
rights under this Agreement and such Note by exercising such remedies as are
available to such holder in respect thereof under applicable law, either by suit
in equity or by action at law, or both, whether for specific performance of any
covenant or other agreement contained in this Agreement or in aid of the
exercise of any power granted in this Agreement. No remedy conferred in this
Agreement upon the holder of any Note is intended to be exclusive of any other
remedy, and each and every such remedy shall be cumulative and shall be in
addition to every other remedy conferred herein or now or hereafter existing at
law or in equity or by statute or otherwise.
9.4 Allocation of Payments After Event of Default. Notwithstanding any
other provisions of this Agreement to the contrary, after the occurrence and
during the continuance of an Event of Default, all amounts collected or received
on or in respect of the Obligations (or other amounts owing under the Loan
Documents in connection therewith) shall be paid over or delivered as follows:
FIRST, to the payment of all reasonable out-of-pocket costs
and expenses (including reasonable attorneys' fees) of the
Administrative Agent in connection with enforcing the rights and
remedies of the Lenders under the Loan Documents and any protective
advances made with respect thereto;
SECOND, to payment of any fees owed to the Administrative
Agent hereunder;
THIRD, to the payment of all reasonable out-of-pocket costs
and expenses (including reasonable attorneys' fees) of each of the
Banks hereunder in connection with enforcing its rights under the Loan
Documents or otherwise with respect to the Obligations owing to such
Lender;
FOURTH, to the payment of all accrued interest and fees on or
in respect of the Obligations;
FIFTH, to the payment of the outstanding principal amount of
the Obligations hereunder (including the payment or cash
collateralization of the outstanding Letter of Credit Exposure);
SIXTH, to all other Obligations hereunder and other
obligations which shall have become due and payable under the Loan
Documents otherwise and not repaid pursuant to clauses "FIRST" through
"FIFTH" above; and
SEVENTH, to the payment of the surplus, if any, to the
Borrower or such other Persons as may be lawfully entitled to receive
such surplus.
In carrying out the foregoing, (i) amounts received shall be applied in the
order provided until exhausted prior to application to the next succeeding
category; and (ii) except as otherwise provided, the Banks shall receive amounts
ratably in accordance with their respective pro rata share (based on the
proportion that the then outstanding Obligations held by such Banks bears to
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the aggregate amount of Obligations then outstanding) of amounts available to be
applied pursuant to clauses "THIRD," "FOURTH," "FIFTH" and "SIXTH"; and (iii) to
the extent that any amounts available for distribution pursuant to clause
"FIFTH" above are attributable to the issued but undrawn amount of outstanding
Letters of Credit, such amounts shall be held by the Administrative Agent in a
cash collateral account and applied (A) first, to reimburse the Issuing Lender
for any drawings under such Letters of Credit and (B) then, following the
expiration of all Letters of Credit, to all other obligations of the types
described in clauses "FOURTH" and "FIFTH" above in the manner provided in this
Section 9.4
ARTICLE X
LOAN OPERATIONS
10.1 Interests in Loans/Commitments. The percentage interest of each
Bank in the Loans and Letters of Credit, and the Commitments, shall be computed
based on the maximum principal amount for each Bank as set forth below (the
"Lenders Schedule"):
MAXIMUM MAXIMUM WORKING MAXIMUM
ACQUISITION LOAN CAPITAL LOAN COMMITMENTS PERCENTAGE
BANK COMMITMENTS COMMITMENTS AMOUNT INTEREST
---- ----------- ----------- ------ --------
BOk $ 20,000,000 $ 20,000,000 $ 40,000,000 26.667%
Bank One $ 15,000,000 $ 15,000,000 $ 30,000,000 20.000%
MidFirst $ 10,000,000 $ 10,000,000 $ 20,000,000 13.333%
Local $ 7,500,000 $ 7,500,000 $ 15,000,000 10.000%
Fifth Third $ 7,500,000 $ 7,500,000 $ 15,000,000 10.000%
Arvest $ 2,500,000 $ 2,500,000 $ 5,000,000 3.333%
US Bank $ 12,500,000 $ 12,500,000 $ 25,000,000 16.667%
TOTAL $ 75,000,000 $ 75,000,000 $150,000,000 100.000%
The Lenders Schedule percentage interests, as from time to time in effect and
reflected in the Register, are referred to as the "Percentage Interests" with
respect to all or any portion of the Loans and Letters of Credit, and the
Commitments.
10.2 Administrative Agent's Authority to Act. Each of the Banks
appoints and authorizes BOk to act for the Banks as Administrative Agent in
connection with the transactions contemplated by this Agreement and the other
Loan Documents on the terms set forth herein. In acting hereunder, such
Administrative Agent is acting for the account of BOk to the extent of its
Percentage Interest and for the account of each other Bank to the extent of such
Bank's Percentage Interest, and all action in connection with the enforcement
of, or the exercise of any remedies (other than the Banks' rights of set-off as
provided herein or in any other Loan Document) in respect of the Loans and the
Indebtedness shall be taken by such Administrative Agent.
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10.3 Borrower to Pay Administrative Agent. The Borrower shall be fully
protected in making all payments in respect of the Notes evidencing the Credit
Obligations to the Administrative Agent, in relying upon consents, modifications
and amendments executed by such Administrative Agent purportedly on the Banks'
behalf, and in dealing with such Administrative Agent as herein provided. Upon
three (3) Business Days notice, such Administrative Agent may charge the
accounts of the Borrower, on the dates when the amounts thereof become due and
payable, with the amounts of the principal of and interest on the Loans,
including any amounts paid by such Administrative Agent to third parties under
Letters of Credit or drafts presented thereunder, commitment fees, Letter of
Credit issuance fees and processing/application fees pertaining thereto and all
other fees and amounts owing under any Loan Document.
10.4 Bank Operations for Advances, Letters of Credit.
10.4.1 Advances. On the funding date for each Loan, each Bank
shall advance to the Administrative Agent in immediately available
funds such Bank's Percentage Interest in the portion of a Loan advanced
on such funding date prior to 12:00 noon (Tulsa, Oklahoma time). If
such funds are not received at such time, but all applicable conditions
set forth in Article VI have been satisfied, each Bank authorizes and
requests such Administrative Agent to advance for the Bank's account,
pursuant to the terms hereof, the Bank's respective Percentage Interest
in such portion of such Loan and agrees to reimburse such
Administrative Agent in immediately available funds for the amount
thereof prior to 3:00 p.m. (Tulsa, Oklahoma time) on the day any
portion of such Loan is advanced hereunder; provided, however, that
such Administrative Agent is not authorized to make any such advance
for the account of any Bank who has previously notified the
Administrative Agent in writing that such Bank will not be performing
its obligations to make further advances hereunder; and provided,
further, that such Administrative Agent shall be under no obligation to
make any such advance.
10.4.2 Letters of Credit. Each of the Banks authorizes and
requests each Letter of Credit Issuer to issue the Letters of Credit
provided for in Section 2.3 and agrees to purchase a participation in
each of such Letters of Credit in an amount equal to its Percentage
Interest in the amount of each such Letter of Credit. Promptly upon the
request of any Letter of Credit Issuer, each Bank shall reimburse such
Letter of Credit Issuer in immediately available funds for such Bank's
Percentage Interest in the amount of all obligations to third parties
incurred by the Letter of Credit Issuer in respect of each Letter of
Credit and each draft accepted under a Letter of Credit to the extent
not timely reimbursed by the Borrower. Each Letter of Credit Issuer
will notify each Bank (and the Administrative Agent if the
Administrative Agent is not the Letter of Credit Issuer) of the
issuance of each Letter of Credit, the amount and date of payment of
any draft drawn or accepted under a Letter of Credit and whether in
connection with the payment of any such draft the amount thereof was
added to the Working Capital Loan or was reimbursed by the Borrower.
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10.4.3 Administrative Agent to Allocate Payments. All payments
of principal and interest in respect of the extensions of credit made
pursuant to this Agreement, reimbursement of amounts paid by each
Letter of Credit Issuer to third parties under Letters of Credit or
drafts presented thereunder, commitment fees, Letter of Credit issuance
fees and other fees under this Agreement (except for the standard
Letter of Credit application/processing fees of any Letter of Credit
Issuer and any fees due to the Administrative Agent), which shall not
be shared by the Banks shall, as a matter of convenience, be made by
the Borrower to the applicable Letter of Credit Issuer or the
applicable Agent, as the case may be. The share of each Bank shall be
credited to such Bank by the Administrative Agent, in immediately
available funds in such manner that the principal amount of the Loans
constituting Credit Obligations to be paid shall be paid
proportionately in accordance with the Banks' respective Percentage
Interests in such Loans, except as otherwise provided in this
Agreement. Under no circumstances shall any Bank be required to produce
or present its Notes as evidence of its interests in the Loans
constituting Credit Obligations in any action or proceeding relating to
the Loans constituting Credit Obligations.
10.4.4 Delinquent Banks; Nonperforming Banks. In the event
that any Bank fails to reimburse the Administrative Agent, pursuant to
Section 10.4.1 for the Percentage Interest of such Bank (a "Delinquent
Bank") in any credit advanced by such Administrative Agent pursuant
hereto, overdue amounts (the "Delinquent Payment") due from the
Delinquent Bank to such Administrative Agent shall bear interest,
payable by the Delinquent Bank on demand, at a per annum rate equal to
(a) the Federal Funds Rate for the first three days overdue and (b) the
sum of two percentage points (2%) plus the Federal Funds Rate for any
longer period. Such interest shall be payable to such Administrative
Agent for its own account for the period commencing on the date of the
Delinquent Payment and ending on the date the Delinquent Bank
reimburses such Administrative Agent on account of the Delinquent
Payment (to the extent not paid by the Borrower as provided below) and
the accrued interest thereon (the "Delinquency Period"), whether
pursuant to the assignments referred to below or otherwise. Upon notice
by such Administrative Agent, the Borrower will pay to such
Administrative Agent the principal (but not the interest) portion of
the Delinquent Payment. During the Delinquency Period, in order to make
reimbursements for the Delinquent Payment and accrued interest thereon,
the Delinquent Bank shall be deemed to have assigned to such
Administrative Agent all interest, commitment fees and other payments
made by the Borrower under Articles II, III and IV hereof that would
have thereafter otherwise been payable under the Loan Documents to the
Delinquent Bank. During any other period in which any Bank is not
performing its obligations to extend credit under Article II hereof (a
"Nonperforming Bank"), the Nonperforming Bank shall be deemed to have
assigned to each Bank that is not a Nonperforming Bank (a "Performing
Bank") such Performing Banks' respective Percentage Interest in all
principal and other payments made by the Borrower that would have
thereafter otherwise been payable thereunder to the Nonperforming Bank.
Such Administrative Agent shall credit a portion of such payments to
each Performing Bank in an amount equal to the Percentage Interest of
such Performing Bank in an amount equal to the Percentage Interest of
such Performing Bank divided by one minus the Percentage Interest of
the Nonperforming Bank until the
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respective portions of the Loans owed to all the Banks are the same as
the Percentage Interests of the Banks immediately prior to the failure
of the Nonperforming Bank to perform its obligations under Article II
hereof. The foregoing provisions shall be in addition to any other
remedies the Administrative Agent, the Performing Banks or the Borrower
may have under law or equity against the Delinquent Bank as a result of
the Delinquent Payment or against the Nonperforming Bank as a result of
its failure to perform its obligations under Article II hereof.
10.5 Sharing of Payments. To the extent permitted by applicable Bank
Legal Requirements and subject to the provisions of the Intercreditor Agreement,
each Bank agrees that (i) if by exercising any right of set-off or counterclaim
or otherwise, it shall receive payment of (a) a proportion of the aggregate
amount due with respect to its Percentage Interest in the Loans and Letter of
Credit Exposure which is greater than (b) the proportion received by any other
Bank in respect of the aggregate amount due with respect to such other Bank's
Percentage Interest in the Loans and Letter of Credit Exposure and (ii) if such
inequality shall continue for more than 10 days, the Bank receiving such
proportionately greater payment shall purchase participations in the Percentage
Interests in the Loans and Letter of Credit Exposure held by the other Banks,
and such other adjustments shall be made from time to time (including rescission
of such purchases of participations in the event the unequal payment originally
received is recovered from such Bank through bankruptcy proceedings or
otherwise), as may be required so that all such payments of principal and
interest with respect to the Loans and Letter of Credit Exposure held by the
Banks shall be shared by the Banks pro rata in accordance with their respective
Percentage Interests; provided, however, that this Section 10.5 shall not impair
the right of any Bank to exercise any right of set-off or counterclaim it may
have and to apply the amount subject to such exercise to the payment of
Indebtedness of Borrower other than Borrower's Indebtedness with respect to the
Loans and Letter of Credit Exposure. Each Bank that grants a participation in
the Loans and Commitments to a Credit Participant shall require as a condition
to the granting of such participation that such Participant agree to share
payments received in respect of the Indebtedness as provided in this Section
10.5. The provisions of this Section 10.5 are for the sole and exclusive benefit
of the Banks and no failure of any Bank to comply with the terms hereof shall be
available to either Borrower as a defense to the payment of the Loans.
10.6 Amendments, Consents, Waivers. Except as otherwise set forth
herein, the Administrative Agent may (and upon the written request of the
Required Banks the Administrative Agent shall) take or refrain from taking any
action under this Agreement or any other Loan Document, including giving its
written consent to any modification of or amendment to and waiving in writing
compliance with any covenant or condition in this Agreement or any other Loan
Document or any Default or Event of Default, all of which actions shall be
binding upon all of the Banks; provided, however, that:
(i) Without the written consent of the Banks owning at least
two thirds (2/3) of the Percentage Interests (other than Delinquent
Banks during the existence of a Delinquency Period so long as such
Delinquent Bank is treated the same as the other Banks with respect to
any actions enumerated below), no written modification of, amendment
to, consent with respect to, waiver of compliance with or waiver of a
Default
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under, any of the Loan Documents shall be made, including without
limitation, Sections 7B.1 through 7B.14 of this Agreement, the related
defined terms or this Section 10.6(i) shall be made.
(ii) Without the written consent of such Banks as own 100% of
the Percentage Interests (other than Delinquent Banks during the
existence of a Delinquency Period so long as such Delinquent Bank is
treated the same as the other Banks with respect to any actions
enumerated below):
(a) No reduction shall be made in (A) the amount of
principal of any of the Loans or reimbursement obligations for
payments made under Letters of Credit, (B) the interest rate
on the Loans or (C) the Letter of Credit issuance fees
(excluding, however, Letter of Credit processing/application
fees, the amount of which shall be within the sole discretion
of each Letter of Credit Issuer) or commitment (non-usage)
fees.
(b) No change shall be made in the stated time of
payment of all or any portion of any of the Loans or interest
thereon or reimbursement of payments made under Letters of
Credit or fees relating to any of the foregoing payable to all
of the Banks and no waiver shall be made of any Default under
Section 9.1(i) and (ii) hereof.
(c) No increase shall be made in the amount, or
extension of the term, of either Commitment beyond that
provided for under Article II.
(d) Except as otherwise provided in the Intercreditor
Agreement, no alteration shall be made of the Banks' rights of
set-off contained herein or in the other Loan Documents.
(e) Except as otherwise provided in the Intercreditor
Agreement, no release of any Collateral shall be made (except
that the Collateral Agent may release particular items of
Collateral in dispositions permitted by the Security Documents
in accordance with the terms and provisions of the
Intercreditor Agreement and may release all Collateral upon
payment in full of the Loans evidenced by the Notes and
termination of the Commitments together with payment of all of
the Private Placement Notes and Parity Debt without the
written consent of the Banks).
(f) No amendment to or modification of this Section
10.6(ii) shall be made.
(g) Without the written consent of the Swingline
Lender, no provision of Section 2.5 may be amended.
10.7 Administrative Agent's Resignation. The Administrative Agent may
resign at any time by giving at least 30 days' prior written notice of its
intention to do so to each other of the
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Banks and the Borrower and upon the appointment by the Required Banks of a
successor Administrative Agent satisfactory to the Borrower. If no successor
Administrative Agent shall have been so appointed and shall have accepted such
appointment within 45 days after the retiring Administrative Agent's giving of
such notice of resignation, then the retiring Administrative Agent may with the
consent of the Borrower, which shall not be unreasonably withheld, appoint a
successor Administrative Agent which shall be a bank or a trust company
organized under the laws of the United States of America or any state thereof
and having a combined capital, surplus and undivided profit of at least
$50,000,000; provided, however, that any successor Administrative Agent
appointed under this sentence may be removed upon the written request of the
Required Banks, which request shall also appoint a successor Administrative
Agent satisfactory to the Borrower. Upon the appointment of a new Administrative
Agent hereunder, the term "Administrative Agent" shall for all purposes of this
Agreement thereafter mean such successor. After any retiring Administrative
Agent's resignation hereunder as an Administrative Agent, or the removal
hereunder of any successor Administrative Agent, the provisions of this
Agreement shall continue to inure to the benefit of such Administrative Agent as
to any actions taken or omitted to be taken by it while it was an Administrative
Agent under this Agreement.
10.8 Concerning the Agents.
10.8.1 Action in Good Faith. The Agents and their respective
officers, directors, employees and agents shall be under no liability
to any of the Banks or to any future holder of any interest in the
Indebtedness for any action or failure to act taken or suffered in good
faith, and any action or failure to act in accordance with an opinion
of its counsel shall conclusively be deemed to be in good faith. The
Agents shall in all cases be entitled to rely, and shall be fully
protected in relying, on instructions given to the Agents by the
Required Holders of the Notes evidencing the Indebtedness as provided
in this Agreement.
10.8.2 No Implied Duties. The Agents shall have and may
exercise such powers as are specifically delegated to the Agents under
this Agreement or any other Loan Document together with all other
powers incidental thereto. The Agents shall have no implied duties to
any Person or any obligation to take any action under this Agreement or
any other Loan Document except for action specifically provided for in
this Agreement or any other Loan Document to be taken by the Agents.
Before taking any action under this Agreement or any other Loan
Document, the Agents may request an appropriate specific indemnity
satisfactory to it from each Bank in addition to the general indemnity
provided for in Section 10.11. Until the Agents have received such
specific indemnity, the Agents shall not be obligated to take (although
such Agent may in its sole discretion take) any such action under this
Agreement or any other Loan Document. Each Bank confirms that the
Agents do not have a fiduciary relationship to them under the Loan
Documents. The Borrower and its Subsidiaries party hereto confirm that
neither the Agents nor any other Bank has a fiduciary relationship to
them under the Loan Documents.
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10.8.3 Validity. The Agents shall not be responsible to any
Bank or any future holder of any interest in the Loans and Indebtedness
(a) for the legality, validity, enforceability or effectiveness of this
Agreement or any other Loan Document, (b) for any recitals, reports,
representations, warranties or statements contained in or made in
connection with this Agreement or any other Loan Document, (c) for the
existence or value of any assets included in any security for the Loans
and Indebtedness, (d) for the effectiveness of any Lien purported to be
included in the Collateral, (e) for the specification or failure to
specify any particular assets to be included in the Collateral, or (f)
unless the Agents shall have failed to comply with Section 10.8.1, for
the perfection of the security interests in the Collateral.
10.8.4 Compliance. The Agents shall not be obligated to
ascertain or inquire as to the performance or observance of any of the
terms of this Agreement or any other Loan Document; and in connection
with any extension of credit under this Agreement or any other Loan
Document, the Agents shall be fully protected in relying on a
certificates of the Borrower as to the fulfillment by the Borrower of
any conditions to such extension of credit.
10.8.5 Employment Agents and Counsel. The Agents may execute
any of their respective duties as Agents under this Agreement or any
other Loan Document by or through employees, agents and
attorneys-in-fact and shall not be responsible to any of the Banks, the
Borrower for the default or misconduct of any such Agents or
attorneys-in-fact selected by the Agent acting in good faith. The
Agents shall be entitled to advice of counsel concerning all matters
pertaining to the agency hereby created and its duties hereunder or
under any other Loan Document.
10.8.6 Reliance on Documents and Counsel. The Agents shall be
entitled to rely, and shall be fully protected in relying, upon any
affidavit, certificate, cablegram, consent, instrument, letter, notice,
order, document, statement, telecopy, telegram, telex or teletype
message or writing reasonably believed in good faith by the Agents to
be genuine and correct and to have been signed, sent or made by the
Person in question, including any telephonic or oral statement made by
such Person, and, with respect to legal matters, upon an opinion or the
advice of counsel selected by such Agent.
10.8.7 Agents' Reimbursement. Each of the Banks severally
agrees to reimburse the Agents, in the amount of such Bank's Percentage
Interest, for any reasonable expenses not reimbursed by the Borrower
(without limiting the obligation of the Borrower to make such
reimbursement): (a) for which the Agents are entitled to reimbursement
by the Borrower under this Agreement or any other Loan Document, and
(b) after the occurrence of a Default, for any other reasonable
expenses incurred by the Agents on the Banks' behalf in connection with
the enforcement of the Banks' rights under this Agreement or any other
Loan Document.
10.9 Rights as a Bank. With respect to any Loan(s) or advance(s)
extended by it hereunder, each of the Agents shall have the same rights,
obligations and powers hereunder as any other Bank and may exercise such rights
and powers as though it were not an Agent, and
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unless the context otherwise specifies, the Agents shall be treated in their
respective individual capacities as though they were not the Agents hereunder.
Without limiting the generality of the foregoing, the Percentage Interest of
each Agent shall be included in any computations of Percentage Interests. Each
Agent and its Affiliates may accept deposits from, lend money to, act as trustee
for and generally engage in any kind of banking or trust business with the
Borrower, any of its Subsidiaries or any Affiliate of any of them and any Person
who may do business with or own an equity interest in the Borrower, any of its
Subsidiaries or any Affiliate of any of them, all as if such Agent were not one
of the Agents and without any duty to account therefor to the other Banks.
10.10 Independent Credit Decision. Each of the Banks acknowledges that
it has independently and without reliance upon either of the Agents, based on
the financial statements and other documents referred to in Section 8.4, on the
other representations and warranties contained herein and on such other
information with respect to the Borrower and its Subsidiaries as such Bank
deemed appropriate, made such Bank's own credit analysis and decision to enter
into this Agreement and to make the extensions of credit provided for hereunder.
Each Bank represents to the Agents that such Bank will continue to make its own
independent credit and other decisions in taking or not taking action under this
Agreement or any other Loan Document. Each Bank expressly acknowledges that
neither the Agents nor any of their respective officers, directors, employees,
Agents, attorneys-in-fact or Affiliates has made any representations or
warranties to such Bank, and no act by either of the Agents taken under this
Agreement or any other Loan Document, including any review of the affairs of the
Borrower and its Subsidiaries, shall be deemed to constitute any representation
or warranty by either of the Agents. Except for notices, reports and other
documents expressly required to be furnished to each Bank by the Administrative
Agent under this Agreement or any other Loan Document, the Agents shall not have
any duty or responsibility to provide any Bank with any credit or other
information concerning the business, operations, property, condition, financial
or otherwise, or creditworthiness of the Borrower or any Subsidiary which may
come into the possession of either of the Agents or any of their respective
officers, directors, employees, agents, attorneys-in-fact or Affiliates.
10.11 Indemnification. The holders of the Indebtedness shall indemnify
the Agents and their respective officers, directors, employees and Agents (to
the extent not reimbursed by the Borrower and without limiting the obligation of
the Borrower to do so), pro rata in accordance with their respective Percentage
Interests, from and against any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind whatsoever which may at any time be imposed on, incurred by or
asserted against either of the Agents or such Persons relating to or arising out
of this Agreement, any other Loan Document, the transactions contemplated hereby
or thereby, or any action taken or omitted by either of the Agents in connection
with any of the foregoing; provided, however, that the foregoing shall not
extend to actions or omissions which are taken by either or both of the Agents
with gross negligence or willful misconduct.
10.12 Procedure for Commitment Increases and Additional Banks. This
Agreement permits certain increases in a Bank's Commitments and the admission of
Additional Banks providing new Commitments, it being acknowledged that the
existing aggregate Maximum
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Commitment Amount of the Banks listed in the Lenders Schedule is $150,000,000
and that this Agreement (without further amendment or modification) contemplates
and permits Commitments in the aggregate maximum amount of $150,000,000. Any
amendment hereto for such an increase or addition shall be in the form attached
hereto as Exhibit 10.12 and shall only require the written signatures of the
Administrative Agent, the Borrower and the Bank(s) being added or increasing
their Commitments. In addition, within a reasonable time after the effective
date of any increase, the Administrative Agent shall, and is hereby authorized
and directed to, revise the Lenders Schedule reflecting such increase and shall
distribute such revised Lenders Schedule to each of the Banks and the Borrowers,
whereupon such revised Lenders Schedule shall replace the old Lenders Schedule
and become part of this Agreement. On the Business Day following any such
increase, all outstanding Base Rate Loans shall be reallocated among the Banks
(including any newly added Banks) in accordance with the Banks' respective
revised Percentage Interests. Eurodollar Loans shall not be reallocated among
the Banks prior to the expiration of the applicable Eurodollar Interest Period
in effect at the time of any such increase.
ARTICLE XI
ASSIGNMENTS/PARTICIPATIONS
11. Successors and Assigns; Bank Assignment and Participations. Any
reference in this Agreement to any party hereto shall be deemed to include the
successors and assigns of such party, and all covenants and agreements by or on
behalf of the Borrower, the Agents or the Banks that are contained in this
Agreement or any other Loan Documents shall bind and inure to the benefit of
their respective successors and assigns; provided, however, that (a) the
Borrower may not assign its rights or obligations under this Agreement except
for mergers or liquidations permitted by Section 7B.7, and (b) the Banks shall
be not entitled to assign their respective Percentage Interests in the Loans
evidenced by the Notes hereunder except as set forth below in this Section 11.
11.1 Assignments by Banks.
11.1.1 Assignees and Assignment Procedures. Each Bank may (i)
without the consent of the Agents or the Borrower if the proposed
assignee is already a Bank hereunder or a Wholly Owned Subsidiary of
the same corporate parent of which the assigning Bank is a Subsidiary,
or (ii) otherwise with the consents of the Agents and (so long as no
Event of Default exists) the Borrower (which consents will not be
unreasonably withheld), in compliance with applicable laws in
connection with such assignment, assign to one or more commercial banks
or other financial institutions (each, an "Assignee") all or a portion
of its interests, rights and obligations under this Agreement and the
other Loan Documents, including all or a portion, which need not be pro
rata among the Loans and the Letter of Credit Exposure, of its
Commitments, the portion of the Loans and Letter of Credit Exposure at
the time owing to it and the Notes held by it, but excluding its rights
and obligations as one of the Agents; provided, however, that:
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(i) the aggregate amount of the Commitments of the
assigning Bank subject to each such assignment to any Assignee
other than another Bank (determined as of the date the
Assignment and Acceptance with respect to such assignment is
delivered to the Administrative Agent) shall be not less than
$1,000,000 and in increments of $500,000; and
(ii) the parties to each such assignment shall
execute and deliver to the Administrative Agent an Assignment
and Acceptance (the "Assignment and Acceptance") in the form
satisfactory to the Administrative Agent and the Collateral
Agent, together with the Note or Notes subject to such
assignment and a processing and recordation fee of $500
payable to the Administrative Agent by the assigning Bank or
the Assignee.
Upon acceptance and recording pursuant to Section
11.1.4, from and after the effective date specified in each
Assignment and Acceptance (which effective date shall be at
least five (5) Banking Days after the execution thereof unless
waived in writing by the Administrative Agent):
(A) the Assignee shall be a party hereto
and, to the extent provided in such Assignment and
Acceptance, have the rights and obligations of a Bank
under this Agreement; and
(B) the assigning Bank shall, to the extent
provided in such assignment, be released from its
obligations under this Agreement (and, in the case of
an Assignment and Acceptance covering all or the
remaining portion of an assigning Bank's rights and
obligations under this Agreement, such Bank shall
cease to be a party hereto but shall continue to be
entitled to the benefits of the Applicable Rate
provisions hereof, as well as to any fees accrued for
its account hereunder and not yet paid).
11.1.2 Terms of Assignment and Acceptance. By executing and
delivering an Assignment and Acceptance, the assigning Bank and
Assignee shall be deemed to confirm to and agree with each other and
the other parties hereto as follows:
(a) other than the representation and warranty that
it is the legal and beneficial owner of the interest being
assigned thereby free and clear of any adverse claim, such
assigning Bank makes no representation or warranty and assumes
no responsibility with respect to any statements, warranties
or representations made in or in connection with this
Agreement or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of this
Agreement, any other Loan Document or any other instrument or
document furnished pursuant hereto;
(b) such assigning Bank makes no representation or
warranty and assumes no responsibility with respect to the
financial condition of the Borrower and its Subsidiaries or
the performance or observance by the Borrower or any of
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its Subsidiaries of any of its obligations under this
Agreement, any other Loan Document or any other instrument or
document furnished pursuant hereto;
(c) such Assignee confirms that it has received a
copy of this Agreement, together with copies of the most
recent quarterly or annual financial statements delivered
pursuant to Section 7A.1 and such other documents and
information as it has deemed appropriate to make its own
credit analysis and decision to enter into such Assignment and
Acceptance;
(d) such Assignee will independently and without
reliance upon the Administrative Agent, such assigning Bank or
any other Bank, and based on such documents and information as
it shall deem appropriate at the time, continue to make its
own credit decisions in taking or not taking action under this
Agreement;
(e) such Assignee appoints and authorizes the
Administrative Agent to take such action as the Administrative
Agent on its behalf and to exercise such powers under this
Agreement as are delegated to the Administrative Agent by the
terms hereof, together with such powers as are reasonably
incidental thereto; and
(f) such Assignee agrees that it will perform in
accordance with the terms of this Agreement all the
obligations which are required to be performed by it as a
Bank.
11.1.3 Register. The Administrative Agent, shall maintain at
its main Tulsa, Oklahoma, banking office a register (the "Register")
for the recordation of (a) the names and addresses of the Banks and the
Assignees which assume rights and obligations pursuant to an assignment
under Section 11.1.1, (b) the Percentage Interest of each such Bank as
set forth in Section 11.1 and (c) the amount of the Loans and Letter of
Credit Exposure owing to each Bank from time to time. The entries in
the Register shall be conclusive, in the absence of manifest error, and
the Borrower, BOK, as such Administrative Agent and the Banks may treat
each Person whose name is registered therein for all purposes as a
party to this Agreement. The Register shall be available for inspection
by the Borrower or any Bank at any reasonable time and from time to
time upon reasonable prior notice.
11.1.4 Acceptance of Assignment and Assumption. Upon its
receipt of a completed Assignment and Acceptance executed by an
assigning Bank and an Assignee, in exchange for the Notes subject to
such assignment, together with the Note or Notes subject to such
assignment, and the processing and recordation fee referred to in
Section 11.1.1, the Administrative Agent shall (a) accept such
Assignment and Acceptance, (b) record the information contained therein
in the Register and (c) give prompt notice thereof to the Borrower.
Within five (5) Business Days after receipt of notice, the Borrower, at
its own expense, shall execute and deliver to the Administrative Agent,
in exchange for the surrendered Note or Notes, a new Note or Notes to
the order of such Assignee in a principal amount equal to the
applicable Commitments and Loans assumed by it pursuant to such
Assignment and Acceptance and, if the assigning Bank has retained
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Commitments and Loans, a new Note or Notes to the order of such
assigning Bank in a principal amount equal to the applicable
Commitments and its Percentage Interest in the Loans retained by it.
Such new Note or Notes shall be in an aggregate principal amount equal
to the aggregate principal amount of such surrendered Note or Notes,
and shall be dated the date of the surrendered Note or Notes which it
or they replace. All such Notes so replaced shall be delivered by the
Administrative Agent to the Borrower or, alternatively, at such
Administrative Agent's election, marked appropriately to evidence the
replacement thereof by such replacement Note(s).
11.1.5 Federal Reserve Bank. Notwithstanding the foregoing
provisions of this Section 11, any Bank may at any time pledge or
assign all or any portion of such Bank's rights under this Agreement
and the other Loan Documents to a Federal Reserve Bank; provided,
however, that no such pledge or assignment shall release such Bank from
such Bank's obligations hereunder or under any other Loan Document.
11.1.6 Further Assurances. The Borrower and its Subsidiaries
shall sign such documents and take such other actions from time to time
reasonably requested by an Assignee to enable it to share in the
benefits of the rights created by the Loan Documents.
11.2 Credit Participants. Each Bank may, without the consent of the
Borrower and with the consent of the Administrative Agent, in compliance with
applicable laws in connection with such participation, sell to one or more
commercial banks or other financial institutions (each a "Credit Participant")
participations in all or a portion of its interests, rights and obligations
under this Agreement and the other Loan Documents (including all or a portion of
its Commitments, the Loans and Letter of Credit exposure owing to it and the
Notes held by it); provided, however, that:
(i) such Bank's obligations under this Agreement shall remain
unchanged;
(ii) such Bank shall remain solely responsible to the other
parties hereto for the performance of such obligations;
(iii) the Credit Participant shall be entitled to the benefit
of any cost protection provisions contained in the Credit Agreement,
but shall not be entitled to receive any greater payment thereunder
than the selling Bank would have been entitled to receive with respect
to the interest so sold if such interest had not been sold; and
(iv) the Borrower, the Administrative Agent and the other
Banks shall continue to deal solely and directly with such Bank in
connection with such Bank's rights and obligations under this
Agreement, and such Bank shall retain the sole right as one of the
Banks to vote with respect to the enforcement of the obligations of the
Borrower relating to the Loans and Letter of Credit Exposure and the
approval of any amendment, modification or waiver of any provision of
this Agreement (other than amendments, modifications, consents or
waivers described in Section 10.6(ii)).
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Borrower agrees, to the fullest extent permitted by applicable law,
that any Credit Participant and any Bank purchasing a participation
from another Bank pursuant to Section 11.1 may exercise all rights of
payment (including the right of set-off), with respect to its
participation as fully as if such Credit Participant or such Bank were
the direct creditor of the Borrower and a Bank hereunder in the amount
of such participation. Upon receipt of notice of the address of each
Credit Participant, the Borrower shall thereafter supply such Credit
Participants with the same information and reports communicated to the
Banks. The Borrower hereby acknowledges and agrees that Credit
Participants shall be deemed a holder of the applicable Notes to the
extent of their respective participation, and the Borrower hereby
waives its right, if any, to offset amounts owing to the Borrower from
the Banks against each Credit Participant's portion of the applicable
Notes.
11.3 Replacement of Bank. In the event that any Bank or, to the extent
applicable, any Credit Participant (the "Affected Bank"):
(a) fails to perform its obligations to fund any portion of
the Loans or to issue any Letter of Credit when required to do so by
the terms of the Loan Documents, or fails to provide its portion of any
Eurodollar Pricing Option pursuant to Section 3.2.1 or on account of a
Bank Legal Requirement as contemplated by Section 3.2.5;
(b) demands payment under the Reserve provisions of Section
3.5, the Tax provisions of Section 3.6, the Capital Adequacy provisions
of Section 3.7 or the Regulatory Change provisions in Section 3.8 in an
amount the Borrower deems materially in excess of the amounts with
respect thereto demanded by the other Banks; or
(c) refuses to consent to a proposed amendment, modification,
waiver or other action requiring consent of the holders of 100% of the
Percentage Interests under Section 10.6(ii) that is consented to by the
other Banks;
then, so long as no Event of Default exists, the Borrower shall have the right
to seek a replacement Bank which is reasonably satisfactory to the
Administrative Agent (the "Replacement Bank"). The Replacement Bank shall
purchase the interests of the Affected Bank in the Loans, Letters of Credit and
its Commitments and shall assume the obligations of the Affected Bank hereunder
and under the other Loan Documents upon execution by the Replacement Bank of an
Assignment and Acceptance and the tender by it to the Affected Bank of a
purchase price agreed between it and the Affected Bank (or, if they are unable
to agree, a purchase price in the amount of the Affected Bank's Percentage
Interest in the Loans and Letter of Credit Exposure, or appropriate credit
support for contingent amounts included therein, and all other outstanding
Credit Obligations then owed to the Affected Bank). Such assignment by the
Affected Bank shall be deemed an early termination of any Eurodollar Pricing
Option to the extent of the Affected Bank's portion thereof, and the Borrower
will pay to the Affected Bank any resulting amounts due under Section 3.2.4.
Upon consummation of such assignment, the Replacement Bank shall become party to
this Agreement as a signatory hereto and shall have all the rights and
obligations of the Affected Bank under this Agreement and the other Loan
Documents with a Percentage Interest equal to the Percentage Interest of the
Affected Bank, the
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Affected Bank shall be released from its obligations hereunder and under the
Loan Documents, and no further consent or action by any party shall be required.
Upon the consummation of such assignment, the Borrower, the Administrative Agent
and the Affected Bank shall make appropriate arrangements so that a new Note or
Notes are issued to the Replacement Bank. The Borrower shall sign such documents
and take such other actions reasonably requested by the Replacement Bank to
enable it to share in the benefits of the rights created by the Loan Documents.
Until the consummation of an assignment in accordance with the foregoing
provisions of this Section 11.3, the Borrower shall continue to pay the Affected
Bank any Loan Obligations as they become due and payable.
ARTICLE XII
MISCELLANEOUS
12.1 Notices. Unless otherwise provided herein, all notices, requests,
consents and demands shall be in writing and shall be either hand-delivered (by
courier or otherwise) or mailed by certified mail, postage prepaid, or sent by
facsimile transmission (confirmed as aforesaid) to the respective addresses
specified below, or, as to any party, to such other address as may be designated
by it in notice to the other parties in accordance with this Section 12.1:
If to the Borrower, to:
Heritage Operating, L.P.
0000 Xxxxx Xxxx Xxxxxx, Xxxxx 000
Xxxxx, Xxxxxxxx 00000
Attention: Vice President - Finance
FAX: (000) 000-0000
If to the Banks, to:
Bank of Oklahoma, National Association
P. O. Box 2300
Bank of Oklahoma Tower
Xxx Xxxxxxxx Xxxxxx
Xxxxx, Xxxxxxxx 00000
Attention: Energy Department - 8th Floor
FAX: (000) 000-0000
The Administrative Agent, is hereby designated and appointed and shall serve as
notice agent for all of the Banks insofar as notices hereunder are concerned and
notice to the Administrative Agent shall be deemed notice to each of the Banks
with the same force and effect as if each such Bank were individually notified
in accordance herewith. All notices, requests, consents and demands hereunder
will be effective when hand-delivered to the applicable notice address set forth
above or when mailed by certified mail, postage prepaid, addressed as aforesaid.
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12.2 Place of Payment. All sums payable hereunder shall be paid in
immediately available funds to the Administrative Agent, at its Tulsa, Oklahoma
main banking offices, or at such other place as such Administrative Agent shall
notify the Borrower in writing. If any interest, principal or other payment
falls due on a date other than a Business Day, then (unless otherwise provided
herein) such due date shall be extended to the next succeeding Business Day, and
such extension of time will in such case be included in computing interest, if
any, in connection with such payment.
12.3 Survival of Agreements. All covenants, agreements, representations
and warranties made herein shall survive the execution and the delivery of Loan
Documents. All statements contained in any certificate or other instrument
delivered by the Borrower hereunder shall be deemed to constitute
representations and warranties by the Borrower.
12.4 Parties in Interest. All covenants, agreements and obligations
contained in this Agreement shall bind and inure to the benefit of the
respective successors and assigns of the parties hereto, except that the
Borrower may not assign their rights or obligations hereunder without the prior
written consent of the Banks.
12.5 Governing Law and Jurisdiction. This Agreement and the Notes shall
be deemed to have been made or incurred and delivered under the laws of the
State of Oklahoma and shall be construed and enforced in accordance with and
governed by the Laws of Oklahoma.
12.6 SUBMISSION TO JURISDICTION. THE BORROWER HEREBY CONSENTS TO THE
JURISDICTION OF ANY OF THE LOCAL, STATE, AND FEDERAL COURTS LOCATED WITHIN TULSA
COUNTY, OKLAHOMA AND WAIVES ANY OBJECTION WHICH BORROWER MAY HAVE BASED ON
IMPROPER VENUE OR FORUM NON CONVENIENS TO THE CONDUCT OF ANY PROCEEDING IN ANY
SUCH COURT AND WAIVES PERSONAL SERVICE OF ANY AND ALL PROCESS UPON ANY OF THEM,
AND CONSENTS THAT ALL SUCH SERVICE OF PROCESS BE MADE BY MAIL OR MESSENGER
DIRECTED TO ANY OF THEM AT THE ADDRESS SET FORTH IN SUBSECTION 12.1 HEREOF AND
THAT SERVICE SO MADE SHALL BE DEEMED TO BE COMPLETED UPON THE EARLIER OF ACTUAL
RECEIPT OR THREE (3) BUSINESS DAYS AFTER MAILED OR DELIVERED BY MESSENGER.
12.7 Maximum Interest Rate. Regardless of any provision herein, the
Banks shall never be entitled to receive, collect or apply, as interest on the
Indebtedness any amount in excess of the maximum rate of interest permitted to
be charged by the Banks by applicable Law, and, in the event the Banks shall
ever receive, collect or apply, as interest, any such excess, such amount which
would be excessive interest shall be applied to other Indebtedness and then to
the reduction of principal; and, if all other Indebtedness and principal are
paid in full, then any remaining excess shall forthwith be paid to the Borrower.
12.8 No Waiver; Cumulative Remedies. No failure to exercise, and no
delay in exercising, on the part of the Banks, any right, power or privilege
hereunder or under any other Loan Document or applicable Law shall preclude any
other or further exercise thereof or the
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exercise of any other right, power or privilege of the Banks. The rights and
remedies herein provided are cumulative and not exclusive of any other rights or
remedies provided by any other instrument or by law. No amendment, modification
or waiver of any provision of this Agreement or any other Loan Document shall be
effective unless the same shall be in writing and signed by the Banks. No notice
to or demand on the Borrower in any case shall entitle the Borrower to any other
or further notice or demand in similar or other circumstances.
12.9 Costs. The Borrower agrees to pay to the Banks on demand all
reasonable costs, fees and expenses (including without limitation reasonable
attorneys fees and legal expenses) incurred or accrued by the Banks in
connection with the negotiation, preparation, execution, delivery, filing,
recording, facilitation, administration and enforcement of this Agreement, the
Notes, the Security Documents, the Intercreditor Agreement and the other Loan
Documents, or any amendment, waiver, consent, supplement, restatement or
modification hereof or hereto or thereto or thereof, or any enforcement thereof
or otherwise relating to this Agreement. The Borrower further agrees that the
fees and expenses of the Banks, including the Agents, incurred in connection
with the negotiation and preparation of this Agreement and the other Loan
Documents shall be paid regardless of whether or not the transactions provided
for in this Agreement are eventually closed and regardless of whether or not any
or all sums evidenced by the Notes are advanced to the Borrower by the Banks.
12.10 WAIVER OF JURY. BORROWER FULLY, VOLUNTARILY AND EXPRESSLY WAIVES
ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND
ANY RIGHTS UNDER THIS AGREEMENT OR UNDER ANY AMENDMENT, INSTRUMENT, DOCUMENT OR
AGREEMENT DELIVERED (OR WHICH MAY IN THE FUTURE BE DELIVERED) IN CONNECTION
HEREWITH OR ARISING FROM ANY BANKING RELATIONSHIP EXISTING IN CONNECTION WITH
THIS AGREEMENT, THE NOTES OR THE SECURITY DOCUMENTS. BORROWER AGREES THAT ANY
SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY.
Borrower acknowledges that it have been informed by the Agents that the
provisions of this Section 12.10 constitute a material inducement upon which
each of the Banks has relied and will rely in entering into this Agreement and
the other Loan Documents, and that Borrower has reviewed the provisions of this
Section 12.10 with its legal counsel. Any of the Banks, the Agents or the
Borrower may file an original counterpart or copy of this Section 12.10 with any
court or Tribunal as written evidence of the express consent of the Borrower,
the Agents and the Banks to the waiver of their rights to trial by jury.
12.11 Full Agreement. This Agreement and the other Loan Documents
contain the full agreement of the parties and supersede all negotiations and
agreements prior to the date hereof.
12.12 Headings. The article and section headings of this Agreement are
for convenience of reference only and shall not constitute a part of the text
hereof nor alter or otherwise affect the meaning hereof.
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12.13 Severability. The unenforceability or invalidity as determined by
a court of competent jurisdiction, of any provision or provisions of this
Agreement shall not render unenforceable or invalid any other provision or
provisions hereof.
12.14 Exceptions to Covenants. The Borrower shall not be deemed to be
permitted to take any action or fail to take any action which is permitted as an
exception to any of the covenants contained herein or which is within the
permissible limits of any of the covenants contained herein if such action or
omission would result in the breach of any other covenant contained herein.
12.15 Conflict with Security Documents. To the extent the terms and
provisions of any of the Security Documents are in conflict with the terms and
provisions hereof, this Agreement shall be deemed controlling.
12.16 Confidentiality. Each Bank will make no disclosure of
confidential information furnished to it by the Borrower or any of its
Subsidiaries unless such information shall have become public, except:
(i) in connection with operations under or the enforcement of
this Agreement or any other Loan Document;
(ii) pursuant to any statutory or regulatory requirement or
any mandatory court order, subpoena or other legal process;
(iii) to any parent or corporate Affiliate of such Bank or to
any Credit Participant, proposed Credit Participant or proposed
Assignee; provided, however, that any such Person shall agree to comply
with the restrictions set forth in this Section 12.16 with respect to
such information;
(iv) to its independent counsel, auditors and other
professional advisors with an instruction to such Person to keep such
information confidential; and
(v) with the prior written consent of the Borrower, to any
other Person.
12.17 Existing Credit Agreement. This Agreement amends, modifies and
replaces the Existing Credit Agreement in all respects and refinances the
Obligations defined therein; provided, however the liens and the priorities
thereof granted in the Existing Credit Agreement and the Security Documents
therein described and defined (including the Security Agreement) are hereby
ratified, confirmed and continued in full force and effect for all purposes
without any interruption whatsoever.
12.18 USA PATRIOT Act Notice. IMPORTANT INFORMATION ABOUT PROCEDURES
FOR OPENING A NEW ACCOUNT. To help the government fight the funding of terrorism
and money laundering activities, federal law requires all financial institutions
to obtain, verify, and record information that identifies each person or entity
that opens an account, including any deposit account, treasury management
account, loan, other
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extension of credit, or other financial services product. What this means for
borrowers: When a borrower opens an account, the Bank will ask for the
borrower's name, residential address, tax identification number, and other
information that will allow the Bank to identify the borrower, including the
borrower's date of birth if the borrower is an individual. The Bank may also
ask, if the borrower is an individual, to see the borrower's driver's license or
other identifying documents, and, if the borrower is not an individual, to see
the borrower's legal organizational documents or other identifying documents.
The Bank will verify and record the information the Bank obtains from the
borrower pursuant to the USA PATRIOT Act, and will maintain and retain that
record in accordance with the regulations promulgated under the USA PATRIOT Act.
12.19 Not a Reportable Transaction. The parties signatory hereto
acknowledge and stipulate and the Borrower represents to the Administrative
Agent, the Co-Agent and the Banks that the transactions contemplated by this
Agreement do not constitute a "Reportable Event" as that term is described and
defined in regulations of the Treasury Department of the United States.
12.20 Counterparts. This Agreement may be executed in any number of
counterparts, all of which taken together shall constitute one and the same
instrument. Delivery of an executed counterpart of a signature page of this
Agreement by telecopier or facsimile shall be as effective as delivery of a
manually executed counterpart hereof.
SIGNATURE PAGES TO FOLLOW
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered in Tulsa, Oklahoma, effective as of the day and year
first above written.
"Borrower"
HERITAGE OPERATING, L.P., a
Delaware limited partnership
By: U.S. Propane, L.P., a Delaware
limited partnership, its general
partner
By: U.S. Propane, L.L.C.,
a Delaware limited liability
company, its general partner
By: ________________________
Xxxxxxx X. Xxxxxxxxx
Vice President - Finance
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered in Tulsa, Oklahoma, effective as of the day and year
first above written.
"Banks"
BANK OF OKLAHOMA, NATIONAL
ASSOCIATION
By________________________________
T. Xxx Xxxxxxxx,
Senior Vice President
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered in Tulsa, Oklahoma, effective as of the day and year
first above written.
LOCAL OKLAHOMA BANK
By________________________________
Name:_____________________________
Title:____________________________
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered in Tulsa, Oklahoma, effective as of the day and year
first above written.
MIDFIRST BANK
By________________________________
Name:_____________________________
Title:____________________________
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered in Tulsa, Oklahoma, effective as of the day and year
first above written.
BANK ONE, NA
By________________________________
Name:_____________________________
Title:____________________________
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered in Tulsa, Oklahoma, effective as of the day and year
first above written.
ARVEST BANK
By________________________________
Name:_____________________________
Title:____________________________
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered in Tulsa, Oklahoma, effective as of the day and year
first above written.
U.S. BANK NATIONAL ASSOCIATION
By________________________________
Name:_____________________________
Title:____________________________
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered in Tulsa, Oklahoma, effective as of the day and year
first above written.
FIFTH THIRD BANK
By________________________________
Name:_____________________________
Title:____________________________
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered in Tulsa, Oklahoma, effective as of the day and year
first above written.
"Administrative Agent"
BANK OF OKLAHOMA, NATIONAL
ASSOCIATION
By________________________________
T. Xxx Xxxxxxxx,
Senior Vice President
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered in Tulsa, Oklahoma, effective as of the day and year
first above written.
"Co-Agent"
__________________________________
By________________________________
Name:_____________________________
Title:____________________________
