EXHIBIT 4.1
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
REFUNDING CREDIT AGREEMENT
AMONG
CORNERSTONE PROPANE, L.P.
AND
VARIOUS FINANCIAL INSTITUTIONS,
AS THE LENDERS
AND
BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION,
AS AGENT FOR THE LENDERS
NOVEMBER 20, 1998
ARRANGED BY
BANCAMERICA XXXXXXXXX XXXXXXXX
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
TABLE OF CONTENTS
PAGE
Article I........................................................DEFINITIONS AND ACCOUNTING TERMS 2
Section 1.1....................................................................Defined Terms 2
Section 1.2.............................................................Use of Defined Terms 25
Section 1.3....................................................Other Interpretive Provisions 25
Section 1.4..........................................Accounting and Financial Determinations 26
Article II............................................COMMITMENTS, BORROWING PROCEDURES AND NOTES 26
Section 2.1......................................................................Commitments 26
Section 2.1.1...........................................Working Capital Loan Commitment 26
Section 2.1.2...............................................Acquisition Loan Commitment 26
Section 2.1.3...........................Lenders Not Permitted or Required to Make Loans 27
Section 2.2..................................................Reduction of Commitment Amounts 27
Section 2.2.1..................................................................Optional 27
Section 2.2.2.................................................................Mandatory 27
Section 2.3..............................................................Borrowing Procedure 27
Section 2.4............................................Continuation and Conversion Elections 28
Section 2.5..........................................................................Funding 28
Section 2.6............................................................................Notes 28
Section 2.7.......................................................................Swing Line 29
Section 2.8....................................Increases in Working Capital Loan Commitments 31
Article III............................................REPAYMENTS, PREPAYMENTS, INTEREST AND FEES 32
Section 3.1.......................................................Repayments and Prepayments 32
Section 3.1.1............................Extensions of Loan Commitment Termination Date 34
Section 3.2..............................................................Interest Provisions 35
Section 3.2.1.....................................................................Rates 35
Section 3.2.2..............................................................Default Rate 37
Section 3.2.3.............................................................Payment Dates 37
Section 3.3.............................................................................Fees 37
Section 3.3.1............................................................Commitment Fee 37
Section 3.3.2.........................................Letter of Credit Face Amount Fees 38
Section 3.3.3..............................................Letter of Credit Issuing Fee 38
Section 3.3.4...........................................................Additional Fees 38
Article IV......................................................................LETTERS OF CREDIT 38
Section 4.1................................................................Issuance Requests 38
Section 4.2.........................................................Issuances and Extensions 39
Section 4.3.........................................................................Expenses 40
Section 4.4.....................................................Other Lenders' Participation 40
i
TABLE OF CONTENTS
(CONTINUED)
PAGE
Section 4.5....................................................................Disbursements 41
Section 4.6....................................................................Reimbursement 41
Section 4.7.............................................................Deemed Disbursements 41
Section 4.8..............................................Nature of Reimbursement Obligations 42
Section 4.9.......................................................Increased Costs; Indemnity 43
Article V............................................CERTAIN EURODOLLAR RATE AND OTHER PROVISIONS 44
Section 5.1.................................................Eurodollar Rate Lending Unlawful 44
Section 5.2.............................................................Deposits Unavailable 44
Section 5.3........................................Increased Eurodollar Rate Loan Costs, etc 45
Section 5.4...................................................................Funding Losses 45
Section 5.5..........................................................Increased Capital Costs 46
Section 5.6............................................................................Taxes 46
Section 5.7......................................................Payments, Computations, etc 47
Section 5.8..............................................................Sharing of Payments 48
Section 5.9...........................................................................Setoff 49
Section 5.10.................................................................Use of Proceeds 49
Section 5.11........................................................................Recourse 49
Section 5.12..........................................................Replacement of Lenders 49
Article VI................................................................CONDITIONS TO BORROWING 50
Section 6.1......................................................Conditions to Effectiveness 50
Section 6.1.1...................................................Resolutions; Incumbency 50
Section 6.1.2.....................................Organization Documents; Good Standing 50
Section 6.1.3.........................................................Delivery of Notes 51
Section 6.1.4.......................................................Closing Certificate 51
Section 6.1.5............................................................Note Agreement 51
Section 6.1.6...................................................Intercreditor Agreement 51
Section 6.1.7...................................................................Permits 51
Section 6.1.8........................................................Opinion of Counsel 51
Section 6.1.9..............................................Closing Fees; Expenses, etc. 52
Section 6.1.10...................................................Compliance Certificate 52
Section 6.1.11....................................................Insurance Certificate 52
Section 6.1.12.....................................................Solvency Certificate 52
Section 6.1.13.................................Payments under Existing Credit Agreement 52
Section 6.1.14.................................Termination of Existing Credit Agreement 52
Section 6.1.15.........................................................New Subsidiaries 52
Section 6.1.16..........................................................Other Documents 53
Section 6.2................................All Borrowings and Issuances of Letters of Credit 53
Section 6.2.1..............................Compliance with Warranties; No Default, etc. 53
Section 6.2.2.........................................................Borrowing Request 54
Section 6.2.3...................................................Satisfactory Legal Form 54
ii
TABLE OF CONTENTS
(CONTINUED)
PAGE
Article VII........................................................REPRESENTATIONS AND WARRANTIES 54
Section 7.1...............................................................Organization, etc. 54
Section 7.2............................................................Partnership Interests 55
Section 7.3....................................................................Qualification 55
Section 7.4.......................................Due Authorization; Non-Contravention; etc. 55
Section 7.5..........................................Government Approvals; Regulations, etc. 56
Section 7.6...................................................Business; Financial Statements 56
Section 7.7.......................................................No Material Adverse Change 56
Section 7.8............................................Litigation; Labor Controversies, etc. 56
Section 7.9..........................................................Ownership of Properties 56
Section 7.10...........................................................................Taxes 57
Section 7.11.......................................................Pension and Welfare Plans 57
Section 7.12........................................................Environmental Warranties 57
Section 7.13.............................................................Regulations U and X 59
Section 7.14.........................................................Accuracy of Information 59
Section 7.15........................................................................Solvency 60
Section 7.16..........................................Private Placement Debt Representations 60
Section 7.17............................................................Compliance with Laws 60
Section 7.18.......................................................................Year 2000 60
Article VIII............................................................................COVENANTS 60
Section 8.1............................................................Affirmative Covenants 60
Section 8.1.1.............................Financial Information, Reports, Notices, etc. 60
Section 8.1.2................................................Compliance with Laws, etc. 63
Section 8.1.3.................................................Maintenance of Properties 63
Section 8.1.4.................................................................Insurance 63
Section 8.1.5.........................................................Books and Records 63
Section 8.1.6................................................................Inspection 63
Section 8.1.7....................................................Environmental Covenant 64
Section 8.1.8..........................................................Ranking/Security 64
Section 8.1.9.........................................................Clean Down Period 64
Section 8.1.10................................................................Year 2000 64
Section 8.2...............................................................Negative Covenants 65
Section 8.2.1.......................................................Business Activities 65
Section 8.2.2..............................................................Indebtedness 65
Section 8.2.3.....................................................................Liens 68
Section 8.2.4.......................................................Financial Condition 69
Section 8.2.5...............................................................Investments 69
Section 8.2.6.................................................Restricted Payments, etc. 70
iii
TABLE OF CONTENTS
(CONTINUED)
PAGE
Section 8.2.7...............................................Consolidation, Merger, etc. 71
Section 8.2.8..................................................Asset Dispositions, etc. 72
Section 8.2.9........................................Modification of Certain Agreements 73
Section 8.2.10.............................................Transactions with Affiliates 73
Section 8.2.11...........................Negative Pledges, Restrictive Agreements, etc. 73
Section 8.2.12...............................Limitation on Issuance of Subsidiary Stock 73
Section 8.2.13.........................................................Operating Leases 74
Section 8.2.14..................Designation of Restricted and Unrestricted Subsidiaries 74
Section 8.2.15........................................................Organic Documents 75
Section 8.2.16..................................Cornerstone Sales & Service Corporation 75
Article IX......................................................................EVENTS OF DEFAULT 76
Section 9.1.....................................................Listing of Events of Default 76
Section 9.1.1................................................Non-Payment of Obligations 76
Section 9.1.2........................................................Breach of Warranty 76
Section 9.1.3........................Non-Performance of Other Covenants and Obligations 76
Section 9.1.4.............................................Default on Other Indebtedness 76
Section 9.1.5.................................................................Judgments 76
Section 9.1.6.............................................................Pension Plans 76
Section 9.1.7.........................................................Change in Control 77
Section 9.1.8..............................................Bankruptcy, Insolvency, etc. 77
Section 9.1.9..............................................Impairment of Security, etc. 78
Section 9.1.10.................................................................Split-Up 78
Section 9.1.11.........................................................General Partners 78
Section 9.2.............................................................Action if Bankruptcy 78
Section 9.3.................................................Action if Other Event of Default 79
Article X...............................................................................THE AGENT 80
Section 10.1...................................................Appointment and Authorization 80
Section 10.2............................................................Delegation of Duties 80
Section 10.3..............................................................Liability of Agent 80
Section 10.4...............................................................Reliance by Agent 81
Section 10.5...............................................................Notice of Default 81
Section 10.6.................................................................Credit Decision 81
Section 10.7........................................................Indemnification of Agent 82
Section 10.8....................................................Agent in Individual Capacity 82
Section 10.9.................................................................Successor Agent 82
Section 10.10................................................................Withholding Tax 83
Section 10.11.............................................................Collateral Matters 84
iv
TABLE OF CONTENTS
(CONTINUED)
PAGE
Article XI...............................................................MISCELLANEOUS PROVISIONS 85
Section 11.1.......................................................Waivers, Amendments, etc. 85
Section 11.2.........................................................................Notices 86
Section 11.3...................................................Payment of Costs and Expenses 86
Section 11.4.................................................................Indemnification 86
Section 11.5........................................................................Survival 87
Section 11.6....................................................................Severability 87
Section 11.7........................................................................Headings 88
Section 11.8..................................Execution in Counterparts, Effectiveness, etc. 88
Section 11.9.................................................Governing Law; Entire Agreement 88
Section 11.10.........................................................Successors and Assigns 88
Section 11.11....Sale and Transfer of Loans and Notes; Participations in its Loans and Notes 88
Section 11.11.1.............................................................Assignments 88
Section 11.11.2..........................................................Participations 89
Section 11.12.............................................................Other Transactions 90
Section 11.13....................................Forum Selection and Consent to Jurisdiction 90
Section 11.14...........................................................Waiver of Jury Trial 91
Section 11.15....................................................................Other Debt. 91
v
REFUNDING CREDIT AGREEMENT
This REFUNDING CREDIT AGREEMENT (as the same may be amended,
supplemented or otherwise modified from time to time, this "AGREEMENT"), dated
as of November 20, 1998, among CORNERSTONE PROPANE, L.P., a Delaware limited
partnership (the "BORROWER"), the various financial institutions as are or may
become parties hereto (collectively, the "LENDERS"), and BANK OF AMERICA
NATIONAL TRUST AND SAVINGS ASSOCIATION ("BOFA"), as agent (the "AGENT") for the
Lenders.
W I T N E S E T H:
WHEREAS, the Borrower is engaged in the wholesale and retail sale,
distribution, and storage of propane and natural gas and related petroleum
derivative products, leasing propane storage tanks, related retail sales of
supplies and equipment, including home appliances and other reasonably related
businesses (the "PROPANE DISTRIBUTION BUSINESS").
WHEREAS, the Borrower is a limited partnership owned by Cornerstone
Propane Partners, L.P., a Delaware limited partnership (the "PUBLIC
PARTNERSHIP"), Cornerstone Propane GP, Inc., a Delaware corporation (the
"MANAGING GENERAL PARTNER") and SYN Inc., a Delaware corporation (the "SPECIAL
GENERAL PARTNER" and collectively with the Public Partnership and the Managing
General Partner, the "PARTNERS");
WHEREAS, the Borrower, the Lenders and the Agent are parties to the
Existing Credit Agreement (as defined below), pursuant to which the Lenders and
certain other lenders have made revolving credit loans to the Borrower and have
issued or participated in letters of credit for the account of the Borrower, in
each case for working capital, acquisitions and general partnership purposes;
WHEREAS, the Borrower has requested that (i) the outstanding
Acquisition Loans and Working Capital Loans under the Existing Credit Agreement
be refunded with Acquisition Loans and Working Capital Loans, respectively,
under this Agreement, (ii) the Acquisition Loan Commitments and Working Capital
Loan Commitments under the Existing Credit Agreement be replaced by Acquisition
Loan Commitments and Working Capital Loan Commitments, respectively, under this
Agreement, the proceeds of which are to be used by the Borrower solely for
financing acquisitions and growth capital expenditures and for working capital
and general partnership purposes, (iii) the Existing Credit Agreement be
terminated in its entirety, and (iv) the Lenders make Acquisition Loans and
Working Capital Loans to the Borrower under this Agreement;
WHEREAS, the Lenders are willing, on the terms and subject to the
conditions set forth in this Agreement, to agree to the Borrower's requests.
NOW, THEREFORE, the parties hereto agree as follows:
1
Article I
DEFINITIONS AND ACCOUNTING TERMS
Section 1.1 DEFINED TERMS. The following terms (whether or not
underscored) when used in this Agreement, including its preamble and recitals,
shall, except where the context otherwise requires, have the following meanings:
"ACQUISITION LOAN" is defined in SECTION 2.1.2.
"ACQUISITION LOAN COMMITMENT" means, relative to any Lender, such
Lender's obligation to make Loans pursuant to SECTION 2.1.2.
"ACQUISITION LOAN COMMITMENT AMOUNT" means, on any date, $35,000,000 as
such amount may be reduced from time to time pursuant to SECTION 2.2.
"ACQUISITION LOAN CONVERSION DATE" means the earliest of
(a) November 30, 2001 (subject to extension as provided in
SECTION 3.1.1);
(b) the date on which the Acquisition Loan Commitment Amount
is terminated in full or reduced to zero pursuant to SECTION 2.2; and
(c) the date on which any Commitment Termination Event occurs.
Upon the occurrence of any event described in CLAUSE (b) or (c), the
Acquisition Loan Commitments shall terminate automatically and without any
further action.
"ACQUISITION NOTE" means a promissory note of the Borrower payable to
the Agent, in the form of EXHIBIT B (as such promissory note may be amended,
endorsed or otherwise modified from time to time), evidencing the aggregate
Indebtedness of the Borrower resulting from outstanding Acquisition Loans, and
also means all other promissory notes accepted from time to time in substitution
therefor or renewal thereof.
"ACQUISITION PERCENTAGE" means, relative to any Lender, the Acquisition
Percentage set forth on Schedule II, as such percentage may be adjusted from
time to time pursuant to Assignment and Acceptance Agreement(s) executed by
such Lender and its Assignee Lender(s) and delivered pursuant to SECTION
11.11.1.
"AFFILIATE" of any Person means as applied to any Person, any other
Person directly or indirectly controlling or controlled by or under common
control with such Person, PROVIDED that, for purposes, of this definition,
"control" as used with respect to any Person shall mean the possession, directly
or indirectly, of the power to direct or cause the direction of the management
and policies of such Person, whether as a general partner or through the
ownership of voting securities or by contract or otherwise. As applied to the
Borrower and the Restricted
2
Subsidiaries, "Affiliate" includes without limitation the Managing General
Partner and the Public Partnership.
"AGENT" is defined in the PREAMBLE and includes each other Person as
shall have subsequently been appointed as the successor Agent pursuant to
SECTION 10.9.
"AGENT-RELATED PERSON" means BofA in its capacity as agent and any
successor agent arising under SECTION 10.9, the Arranger and the Issuer
hereunder, together with their respective Affiliates, and the officers,
directors, employees, agents and attorneys-in-fact of such Persons and
Affiliates.
"AGREEMENT" means, on any date, this Refunding Credit Agreement as
originally in effect on the Refunding Effective Date and as thereafter from time
to time amended, restated, supplemented or otherwise modified and in effect on
such date.
"ALTERNATE BASE RATE" means, on any date and with respect to all Base
Rate Loans, a fluctuating rate of interest per annum equal to the higher of
(a) the rate of interest most recently announced by the Agent
at its principal office as its reference rate for Dollar loans; and
(b) the Federal Funds Rate most recently determined by the
Agent plus 1/2 of 1%.
The Alternate Base Rate is not necessarily intended to be the lowest
rate of interest determined by the Reference Lender in connection with
extensions of credit. Changes in the rate of interest on that portion of any
Loans maintained as Base Rate Loans will take effect simultaneously with each
change in the Alternate Base Rate. The Agent will give notice promptly to the
Borrower and the Lenders of changes in the Alternate Base Rate.
"APPLICABLE BASE RATE MARGIN" means, with respect to any Base Rate
Loan, the then applicable per annum rate set forth in the Pricing Grid.
"APPLICABLE EURODOLLAR RATE MARGIN" means, with respect to any
Eurodollar Rate Loan or any Standby Letter of Credit, the then applicable per
annum rate set forth in the Pricing Grid.
"ARRANGER" means BancAmerica Xxxxxxxxx Xxxxxxxx, in its capacity as
arranger.
"ASSET DISPOSITION" is defined in SECTION 8.2.8.
"ASSIGNEE LENDER" is defined in Section 11.11.1.
"ASSIGNMENT AND ACCEPTANCE AGREEMENT" means an Assignment and
Acceptance Agreement substantially in the form of EXHIBIT F.
"AUTHORIZED OFFICER" means, relative to any Obligor, those of its
officers (or, in the case of the Borrower, those officers of the Managing
General Partner) whose signatures and
3
incumbency shall have been certified to the Agent and the Lenders pursuant to
SECTION 6.1.1 or in a similar certificate delivered at any subsequent time
during the term of this Agreement.
"AVAILABLE CASH" shall mean with respect to any Fiscal Quarter of the
Borrower, (a) the sum of (i) all cash and cash equivalents of the Partnership
Group and the Public Partnership on hand at the end of such quarter and (ii) all
additional cash and cash equivalents of the Partnership Group and the Public
Partnership on hand on the date of determination of Available Cash with respect
to such quarter obtained through available borrowings for working capital
purposes made after the end of such quarter, LESS (b) (i) the amount of cash
reserves necessary or appropriate in the reasonable discretion of the Managing
General Partner to (A) provide for the proper conduct of the business of the
Borrower and the Restricted Subsidiaries (including, without limitation, the
reserves for future capital expenditures and for anticipated future credit needs
of the Public Partnership and Partnership Group subsequent to such Fiscal
Quarter or (B) provide funds for distributions under Sections 6.4 or 6.5 of the
partnership agreement of the Public Partnership in respect of any one or more of
next four Fiscal Quarters or (C) comply with applicable law or any loan
agreement (including this Agreement), mortgage, security agreement, debt
instrument or other agreement or obligation to which the Partnership Group or
the Public Partnership is a party or by which it or its assets are subject
(including the payment of principal, make whole amount or premium-amount, if
applicable, and interest) in respect of the Private Placement Debt, the
Obligations and the Parity Debt, (ii) all Dedicated Funds and (iii) all amounts
which a Restricted Subsidiary is prohibited from dividending or distributing to
the Borrower; PROVIDED that Available Cash shall exclude without duplication (x)
in each Fiscal Quarter a reserve equal to at least 50% of the aggregate amount
of all interest payments, in respect of all Indebtedness of the Borrower and the
Restricted Subsidiaries upon which interest is due semiannually or less
frequently to be made in the next Fiscal Quarter (assuming, in the case of
Indebtedness incurred under the Obligations and other Indebtedness bearing
interest at fluctuating interest rates which cannot be determined in advance,
that the interest rate in effect on the last Business Day of the immediately
preceding Fiscal Quarter will remain in effect until such Indebtedness is due to
be paid), (y) with respect to Parity Debt, Private Placement Debt and the
Obligations, in the third Fiscal Quarter immediately preceding each Fiscal
Quarter in which any scheduled principal payment is due with respect of such
Indebtedness (a "principal payment quarter"), a reserve equal to at least 25% of
the aggregate amount of all principal to be paid in respect of such Indebtedness
in such principal payment quarter; in the second Fiscal Quarter immediately
preceding a principal payment quarter, a reserve equal to at least 50% of the
aggregate amount of all principal to be paid in respect of such Indebtedness in
such principal payment quarter; and in the Fiscal Quarter immediately preceding
a principal payment quarter, a reserve equal to at least 75% of the aggregate
amount of all principal to be paid in respect of such Indebtedness in such
principal payment quarter, and (z) with respect to the Private Placement Debt,
the Obligations and the Parity Debt of which principal is payable semiannually,
in each Fiscal Quarter which immediately precedes a Fiscal Quarter in which
principal is payable in respect of such Indebtedness a reserve equal to at least
50% of the aggregate amount of all principal to be paid in respect of such
Indebtedness in the next Fiscal Quarter; PROVIDED FURTHER that the amount of
such reserve specified in Clauses (y) and (z) of this definition for principal
amounts to be paid shall be reduced by the aggregate principal amount of all
binding, irrevocable letters of credit established to refinance such principal
amounts.
4
"BANKRUPTCY CODE" means Title 11 of the United States Code or any
successor statute.
"BANKRUPTCY LAW" is defined in SECTION 9.1.8.
"BASE RATE LOAN" means a Loan bearing interest at a fluctuating rate
determined by reference to the Alternate Base Rate.
"BOFA" is defined in the PREAMBLE.
"BORROWER" is defined in the PREAMBLE.
"BORROWING" means the Loans of the same type and, in the case of
Eurodollar Rate Loans, having the same Interest Period made by all Lenders on
the same Business Day and pursuant to the same Borrowing Request in accordance
with SECTION 2.3.
"BORROWING REQUEST" means a loan request and certificate duly executed
by an Authorized Officer of the Borrower, substantially in the form of EXHIBIT
C.
"BUSINESS DAY" means
(a) any day which is neither a Saturday or Sunday nor a legal
holiday on which banks are authorized or required to be closed in San Francisco,
California or New York, New York; and
(b) relative to the making, continuing, prepaying or repaying
of any Eurodollar Rate Loans, any day on which dealings in Dollars are carried
on in the London interbank market.
"CAPITAL STOCK" means, with respect to any Person, any capital stock
(including preferred stock), shares, units, interests, participations or other
ownership interests (however designated, including without limitation such items
as they may apply to a partnership, limited liability company or similar Person)
of such Person and any rights, warrants or options to purchase any thereof.
"CAPITALIZED LEASE LIABILITIES" means all monetary obligations of any
Borrower or any Subsidiary under any leasing or similar arrangement which, in
accordance with GAAP, would be classified as capitalized leases, and, for
purposes of this Agreement and each other Loan Document, the amount of such
obligations shall be the capitalized amount thereof, determined in accordance
with GAAP, and the stated maturity thereof shall be the date of the last payment
of rent or any other amount due under such lease prior to the first date upon
which such lease may be terminated by the lessee without payment of a penalty.
"CERCLA" means the Comprehensive Environmental Response, Compensation
and Liability Act of 1980, as amended.
"CERCLIS" means the Comprehensive Environmental Response Compensation
Liability Information System List.
5
"CHANGE IN CONTROL" means any of the following events or circumstances:
(i) the liquidation or dissolution of the Managing
General Partner,
(ii) any merger or consolidation of the Managing
General Partner with or into any Person, other than NOR or any of its
Affiliates if the Managing General Partner is not the surviving entity
thereof, or any sale, whether direct or indirect, of substantially all
of the assets of the Managing General Partner to any person or group
(as such term is used in Section 13(d) and 14(d) of the Exchange
Act), other than NOR or any of its Affiliates,
(iii) any Person or group other than NOR or any of
its Affiliates, is or becomes the beneficial owner, directly or
indirectly, of more than 50% of the total voting power in the aggregate
then outstanding of all classes of stock of the Managing General
Partner then outstanding normally entitled to vote in elections of
directors,
(iv) during any period of 12 consecutive months after
the Refunding Effective Date, individuals who at the beginning of such
12 month period (or persons nominated by such members of the Board of
Directors of the Managing General Partner to succeed them) constitute
the Board of Directors of the Managing General Partner cease, for any
reason, to constitute a majority of the Board of Directors of the
Managing General Partner then in office, or
(v) the Managing General Partner, NOR and its
Affiliates shall cease to own directly or indirectly, in the aggregate,
an amount of the general partners interest in the Borrower equal to at
least 50% of the amount of the general partner interests in the
Borrower owned collectively, by the General Partners on the date of
Closing (as reduced to reflect the effect of the overallotment option
granted to the underwriters by the Public Partnership pursuant to its
underwriting agreement with such underwriters);
provided, that, subject to the foregoing, a transfer of a general partnership
interest shall not constitute a Change of Control; and notwithstanding the
foregoing, it shall not be a Change of Control as it relates to clause (ii),
(iii), (iv) or (v) above if the Chief Executive Officer and the Chief Financial
Officer of the Borrower following any of the events described above in clause
(ii), (iii), (iv) or (v) retain the same positions with the same levels of
authority as they previously had prior to such event.
"CODE" means the Internal Revenue Code of 1986, as amended, reformed or
otherwise modified from time to time.
"COLLATERAL" is defined in SECTION 5.11.
"COMMERCIAL LETTER OF CREDIT" is defined in SECTION 4.1.
6
"COMMERCIAL LETTER OF CREDIT RISK PARTICIPATION PERCENTAGE" means, as
of any date and based upon the Tier on such date, the percentage per annum
(expressed in basis points) set forth below opposite such Tier:
----------------------- ------------------------------------------------- ----------------------------------
Tier Total Funded Commercial Letter of
Indebtedness to Consolidated Credit Risk Participation
Cash Flow Ratio Percentage
----------------------- ------------------------------------------------- ----------------------------------
I LESS THAN OR EQUAL TO 3.25 37.5
II GREATER THAN 3.25 50.0
but LESS THAN OR EQUAL TO 3.75
III GREATER THAN 3.75 62.5
but LESS THAN OR EQUAL TO 4.25
IV GREATER THAN 4.25 75.0
but LESS THAN OR EQUAL TO 4.75
V GREATER THAN 4.75 87.5
but LESS THAN OR EQUAL TO 5.00
VI GREATER THAN 5.00 100.0
----------------------- ------------------------------------------------- ----------------------------------
"COMMITMENT" means, as the context may require, a Lender's Working
Capital Loan Commitment or Acquisition Loan Commitment, or both.
"COMMITMENT AMOUNT" means, as the context may require, either the
Working Capital Loan Commitment Amount or the Acquisition Loan Commitment
Amount.
"COMMITMENT TERMINATION DATE EXTENSION REQUEST" means an extension
request executed by an Authorized Officer of the Borrower, substantially in the
form of EXHIBIT H.
"COMMITMENT TERMINATION EVENT" means
(a) the occurrence of any Default described in clauses (a),
(b) or with respect to the Borrower or the Managing General Partner, (e) of
SECTION 9.1.8; or
(b) the occurrence and continuance of any other Event of
Default and either
(i) the declaration of the Loans to be due and
payable pursuant to SECTION 9.3, or
(ii) in the absence of such declaration, the giving
of notice by the Agent, acting at the direction of the Required
Lenders, to the Borrower that the Commitments have been terminated.
"COMMODITY HEDGING AGREEMENT" means any agreement or arrangement
designed solely to protect the Borrower against fluctuations in the price of
propane or natural gas with respect to quantities of propane or natural gas that
the Borrower reasonably expects to purchase from
7
suppliers, sell to its customers or need for its inventory during the period
covered by such agreement or arrangement.
"CONSOLIDATED" or "CONSOLIDATED," when used with reference to any
accounting term, means the amount described by such accounting term, determined
on a consolidated basis in accordance with GAAP, after elimination of
intercompany items.
"CONSOLIDATED CASH FLOW" means, with respect to the Borrower and the
Restricted Subsidiaries for any period, Consolidated Net Income for such period,
plus (a) an amount equal to any extraordinary loss realized in connection with
asset sales, to the extent such loss was deducted in computing Consolidated Net
Income, minus (b) an amount equal to any extraordinary gain realized in
connection with asset sales, to the extent such gain was added in computing
Consolidated Net Income, plus (c) provision for taxes based on income or profits
of the Borrower and the Restricted Subsidiaries for such period, to the extent
such provision for taxes was deducted in computing Consolidated Net Income, plus
(d) Consolidated Interest Expense for such period, whether paid or accrued
(including amortization of original issue discount, non-cash interest payments
and the interest component of any payments associated with Capital Lease
Obligations and net payments (if any) pursuant to Hedging Obligations), to the
extent such expense was deducted in computing Consolidated Net Income, plus (e)
depreciation and amortization (including amortization of goodwill and other
intangibles) of the Borrower and the Restricted Subsidiaries for such period, to
the extent such depreciation and amortization were deducted in computing
Consolidated Net Income, plus (f) the Synthetic Lease Principal Component of the
Borrower and the Restricted Subsidiaries for such period; in each case, for such
period without duplication on a consolidated basis and determined in accordance
with GAAP.
Consolidated Cash Flow shall be calculated after giving effect, on a
pro forma basis for the most recently ended four consecutive Fiscal Quarters,
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 the Restricted Subsidiaries
(including any Person who becomes a Restricted Subsidiary as a result of the
asset acquisition) 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 determination (the "REFERENCE PERIOD"), as if such
asset sale or asset acquisition occurred on the first day of the Reference
Period; provided, that Consolidated Cash Flow generated by an acquired business
or asset shall be determined on the basis of, without duplication, (a) the
actual gross profit (revenues minus cost of goods sold) of the acquired business
or asset during the immediately preceding four full Fiscal Quarters) MINUS (b)
the pro forma expenses that would have been incurred by the Borrower or such
Restricted Subsidiary 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 or such Restricted Subsidiary in the operation
of such acquired business or asset and non-personnel costs and expenses incurred
by the Borrower or the Managing General Partner in the operation of its business
at similarly situated facilities. Notwithstanding the foregoing, if the Borrower
acquires Propane Continental, Inc., then for the first four consecutive Fiscal
Quarters following the date of such acquisition, the calculation of
8
Consolidated Cash Flow generated by Propane Continental, Inc. shall be
adjusted for weather normalization by a heating degree day adjustment in an
amount up to but not exceeding $1,800,000, done in a manner consistent with
industry standards, which heating degree day adjustment seeks to eliminate
the effects of warmer or colder than average weather from the financial
results of Propane Continental, Inc.
"CONSOLIDATED CASH FLOW COVERAGE OF DEBT SERVICE" means, as of the date
of determination, the pro forma Consolidated Cash Flow for the period of four
Fiscal Quarters then ending divided by Consolidated Pro Forma Debt Service for
the four consecutive Fiscal Quarters next succeeding such date of determination.
"CONSOLIDATED CASH FLOW COVERAGE OF MAXIMUM DEBT SERVICE" means, as of
the date of determination, the pro forma Consolidated Cash Flow for such period
of four Fiscal Quarters then ending divided by the Maximum Consolidated Pro
Forma Debt Service.
"CONSOLIDATED INTEREST EXPENSE" means, for any period, the aggregate
consolidated interest expense of the Borrower and the Restricted Subsidiaries
determined in accordance with GAAP but including, without duplication, (a) all
commissions, discounts and other fees and charges owed with respect to letters
of credit and banker's acceptances for such period, (b) net costs under Interest
Rate Agreements for such period, (c) the Synthetic Lease Interest Component of
the Borrower and the Restricted Subsidiaries for such period, (d) the portion of
any Capitalized Lease Liabilities allocable to consolidated interest expense for
such period and (e) the product of (1) the amount of all dividends (whether in
cash or otherwise (except dividends payable solely in shares of Qualified
Capital Stock)) on all Disqualified Stock of such Person and its Subsidiaries,
times (2) a fraction, the numerator of which is one and the denominator of which
is one minus the then current effective consolidated federal, state and local
income tax rate of such Person, expressed as a decimal.
"CONSOLIDATED NET INCOME" with reference to any period, the net income
(or deficit) of the Borrower and the Restricted Subsidiaries for such period
(taken as a cumulative whole), after deducting all operating expenses,
provisions for all taxes and reserves (including reserves for deferred income
taxes) and all other proper deductions, all determined in accordance with GAAP
on a consolidated basis, after eliminating all intercompany transactions,
PROVIDED that there shall be excluded (a) the income (or deficit) of any Person
accrued prior to the date it becomes a Restricted Subsidiary or is merged into
or consolidated with the Borrower or a Restricted Subsidiary, (b) the income (or
deficit) of any Person (other than a Restricted Subsidiary) in which the
Borrower or any Restricted Subsidiary has an ownership interest, except to the
extent that any such income has been actually received by the Borrower or such
Restricted Subsidiary in the form of dividends, or similar distributions, (c)
the undistributed earnings of any Restricted Subsidiary to the extent that the
declaration or payment of dividends or similar distributions by such Restricted
Subsidiary is not at the time permitted by the terms of its charter or any
agreement, instrument, judgment, decree, order, statute, rule or governmental
regulation applicable to such Restricted Subsidiary, (d) any restoration to
income of any contingency reserve, except to the extent that provision for such
reserve was made out of income accrued during such period, (e) any aggregate net
after tax gain or net after tax loss during such period
9
arising from the sale, exchange or other disposition of capital assets (such
term to include all fixed assets, whether tangible or intangible, all
Inventory sold in conjunction with the disposition of fixed assets, and all
securities), (f) any write-up of any asset, (g) any net gain from the
collection of the proceeds of life insurance polices, (h) any gain arising
from the acquisition of any securities, or the extinguishment, under GAAP, of
any Indebtedness, of the Borrower or any Restricted Subsidiary, (i) any after
tax gain or loss during such period from any change in accounting, from any
discontinued operations or the disposition thereof, from any extraordinary
events or from any prior period adjustments, (j) any deferred credit
representing the excess of equity in any Restricted Subsidiary at the date of
acquisition over the cost of the investment in such Restricted Subsidiary,
and (k) in the case of a successor to the Borrower by consolidation or merger
or as a transferee of its assets, any earnings of the successor corporation
prior to such consolidation, merger or transfer of assets.
"CONSOLIDATED NET WORTH" means, at any time of determination:
(a) the total assets of the Borrower and the Restricted
Subsidiaries which would be shown as assets on a consolidated balance sheet of
the Borrower and the Restricted Subsidiaries as of such time, prepared in
accordance with GAAP, MINUS
(b) the total liabilities of the Borrower and the Restricted
Subsidiaries which would be shown as liabilities on a consolidated balance sheet
of the Borrower and the Restricted Subsidiaries as such time, prepared in
accordance with GAAP.
"CONSOLIDATED PRO FORMA DEBT SERVICE" means, as of any date of
determination, the total amount payable by the Borrower and the Restricted
Subsidiaries on a consolidated basis, during the four consecutive calendar
quarters next succeeding the date of determination, in respect of scheduled
principal payments and all cash interest charges with respect to Indebtedness of
the Borrower and the Restricted Subsidiaries outstanding on such date of
determination, after giving effect to any Indebtedness proposed to be incurred
on such date (the "INCURRENCE DATE") and to any Indebtedness proposed to be
repaid from funds of such newly incurred Indebtedness (x) within 30 days of the
Incurrence Date, or (y) within the twelve months following such Incurrence Date
as to which funds for such payments have been within 30 days of the Incurrence
Date irrevocably placed in escrow with the Trustee with irrevocable instructions
to the Trustee to make such repayments (such funds pursuant to clauses (x) and
(y) collectively, the "DEDICATED FUNDS") and (a) including actual payments under
Capital Lease Liabilities, (b) assuming, in the case of Indebtedness (other than
the Obligations) bearing interest at fluctuating interest rates which cannot be
determined in advance, that the rate in effect on such date will remain in
effect throughout such period, (c) assuming in the case of the Obligations, that
(1) the interest payments payable during such four consecutive calendar quarters
next succeeding the date of determination will equal the actual interest
payments associated with the Obligations during the most recent four Fiscal
Quarters, (2) except for the twelve-month period immediately prior to the
termination of final maturity thereof (unless extended, renewed or refinanced),
no principal payments will be made on the Working Capital Loans and (3)
principal payments relating to the Acquisition Loans will (unless the
Acquisition Loan Conversion Date shall have already occurred), become due based
on the assumption that the Acquisition Loan Conversion Date shall occur on
November
10
30, 2001, (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 Obligations) 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 and (e) including any other designated
repayments of Indebtedness due within twelve months from such date of
determination.
"CONTINGENT LIABILITY" means any agreement, undertaking or arrangement
by which any Person guarantees, endorses or otherwise becomes or is contingently
liable upon (by direct or indirect agreement, contingent or otherwise, to
provide funds for payment, to supply funds to, or otherwise to invest in, a
debtor, or otherwise to assure a creditor against loss) the indebtedness,
obligation or any other liability of any other Person (other than by
endorsements of instruments in the course of collection), or guarantees the
payment of dividends or other distributions upon the shares of any other Person.
The amount of any Person's obligation under any Contingent Liability shall
(subject to any limitation set forth therein) be deemed to be the outstanding
principal amount of the debt, obligation or other liability guaranteed thereby.
"CONTINUATION/CONVERSION NOTICE" means a notice of continuation or
conversion and certificate duly executed by an Authorized Officer of the
Borrower, substantially in the form of EXHIBIT E.
"CONTROLLED GROUP" means all members of a controlled group of
corporations and all members of a controlled group of trades or businesses
(whether or not incorporated) under common control which, together with the
Borrower, are treated as a single employer under Section 414(b) or 414(c) of the
Code or Section 4001 of ERISA.
"CORNERSTONE HOLDING" means Cornerstone Holding Corp., a Delaware
corporation.
"CORNERSTONE SALES & SERVICE CORPORATION" means Cornerstone Sales &
Service Corporation, a Delaware corporation.
"COVERAGE TEST" means, for any period, the pro forma ratio of
Consolidated Cash Flow to Consolidated Interest Expense for such period.
"DEBT" means all Indebtedness of the type described in CLAUSES (a),
(b), and (c) of the definition of Indebtedness and all Indebtedness of the type
described in CLAUSE (i) of such definition in respect of Indebtedness described
in CLAUSES (a), (b), and (c) of such definition.
"DEDICATED FUNDS" is defined in the definition of "Consolidated Pro
Forma Debt Service."
"DEFAULT" means any Event of Default or any condition, occurrence or
event which, after notice or lapse of time or both, would constitute an Event of
Default.
"DEFAULT RATE" is defined in SECTION 3.2.2.
11
"DISBURSEMENT DATE" is defined in SECTION 4.5.
"DISCLOSURE SCHEDULE" means the Disclosure Schedule attached hereto as
Schedule I, as it may be amended, supplemented or otherwise modified from time
to time by the Borrower with the written consent of the Agent and the Required
Lenders.
"DISQUALIFIED STOCK" means, with respect to any Person, any Capital
Stock of such Person which by its terms (or by the terms of any security into
which it is convertible or for which it is exchangeable or exercisable), upon
the happening of any event or otherwise (i) matures or is mandatorily
redeemable, pursuant to a sinking fund obligation or otherwise, (ii) is
convertible into or exchangeable or exercisable for Indebtedness or Disqualified
Stock or (iii) is redeemable at the option of the holder thereof, in whole or in
part, in each case on or prior to the first anniversary of the stated maturity
of such Capital Stock.
"DOLLAR" and the sign "$" mean lawful money of the United States.
"ENVIRONMENTAL CLAIM" means any written or oral notice, claim, demand
or other communication (collectively, a "claim") for investigatory costs,
cleanup, costs, Government Authority response costs, damages to natural
resources or other property, personal injuries, fines or penalties arising out
of, based on or resulting from (a) the presence, or release into the
environment, of any Hazardous Material at any location, or (b) circumstances
forming the basis of any violation, or alleged violation, of any Environmental
Law. The term "Environmental Claim" shall include, without limitation, any claim
by any Government Authority for enforcement, cleanup, removal, response,
remedial or other actions or damages pursuant to any applicable Environmental
Law, and any claim by any third party seeking damages, contribution,
indemnification, cost recovery, compensation or injunctive relief resulting from
the presence of Hazardous Materials or arising from alleged injury or threat of
injury to health, safety or the environment.
"ENVIRONMENTAL LAW" means any law, regulation, statute, ordinance,
code, rule, regulation, order or guideline (including consent decrees or
administrative orders) relating to human health, safety or the environment or to
emissions, discharges, releases or threatened releases of Hazardous Materials
into the environment (including, without limitation, ambient air, soil, surface
water, ground water, wetlands, land or subsurface strata), or otherwise relating
to the presence, existence, manufacture, processing, distribution, use,
treatment, storage, disposal, transport or handling of Hazardous Materials.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, and any successor statute of similar import, together with the
regulations thereunder, in each case as in effect from time to time. References
to sections of ERISA also refer to any successor sections.
"EUROCURRENCY RESERVE PERCENTAGE" is defined in SECTION 3.2.1.
"EURODOLLAR OFFICE" means, relative to any Lender, the office of such
Lender designated as such below its signature hereto or designated in the
Assignment and Acceptance Agreement or such other office of a Lender (or any
successor or assign of such Lender) within the United States
12
as may be designated from time to time by notice from such Lender, as the
case may be, to each other Person party hereto. A Lender may have separate
Eurodollar Offices for purposes of making, maintaining or continuing, as the
case may be, Base Rate Loans and Eurodollar Rate Loans.
"EURODOLLAR RATE" is defined in SECTION 3.2.1.
"EURODOLLAR RATE LOAN" means a Loan bearing interest, at all times
during an Interest Period applicable to such Loan, at a fixed rate of interest
determined by reference to the Eurodollar Rate (Reserve Adjusted).
"EURODOLLAR RATE (RESERVE ADJUSTED)" is defined in SECTION 3.2.1.
"EVENT OF DEFAULT" is defined in SECTION 9.1.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.
"EXISTING CREDIT AGREEMENT" means the Credit Agreement, dated as of
December 11, 1996, as amended prior to the Refunding Effective Date, among the
Borrower, the General Partner, the several financial institutions from time to
time party thereto, Bank of America National Trust and Savings Association, as
Agent.
"EXISTING LENDERS" means, collectively, the financial institutions from
time to time party to the Existing Credit Agreement.
"EXISTING LETTERS OF CREDIT" means the letters of credit issued and
outstanding on the Refunding Effective Date which are described in Schedule III.
"FEDERAL FUNDS RATE" means, for any period, a fluctuating interest rate
per annum equal for each day during such period to
(a) the weighted average of the rates on overnight federal
funds transactions with members of the Federal Reserve System arranged by
federal funds brokers, as published for such day (or, if such day is not a
Business Day, for the next preceding Business Day) by the Federal Reserve Bank
of New York; or
(b) if such rate is not so published for any day which is a
Business Day, the average of the quotations for such day on such transactions
received by the Reference Lender from three federal funds brokers of recognized
standing selected by it.
"FINANCIAL STATEMENT DELIVERY DATE" means the earlier of each date on
which the Borrower delivers, or is required to deliver, financial statements
pursuant to SECTION 8.1.1(a) or SECTION 8.1.1(b), as the case may be.
"FISCAL QUARTER" means any quarter of a Fiscal Year.
13
"FISCAL YEAR" means any period of twelve consecutive calendar months
ending on June 30; references to a Fiscal Year with a number corresponding to
any calendar year (e.g., the "1998 FISCAL YEAR") refer to the Fiscal Year ending
on the June 30 occurring during such calendar year.
"FLAME" means Flame, Inc, an Arizona corporation.
"F.R.S. BOARD" means the Board of Governors of the Federal Reserve
System or any successor thereto.
"GAAP" is defined in SECTION 1.4.
"GENERAL COLLATERAL" is defined in SECTION 5.11.
"GENERAL PARTNERS" means the Managing General Partner and the Special
General Partner.
"GOVERNMENT AUTHORITY" means any agency, authority, board, bureau,
commission, department, office or instrumentality of any nature whatsoever of
any governmental or quasi-governmental unit, whether federal, state, county,
district, city or other political subdivision, foreign or otherwise and whether
now or hereafter in existence, or any officer or official of any thereof.
"GUARANTY" means a Guaranty of the Restricted Subsidiaries,
substantially in the form of EXHIBIT L.
"HAZARDOUS MATERIAL" means
(a) any "hazardous substance", as defined by CERCLA;
(b) any "hazardous waste", as defined by the Resource
Conservation and Recovery Act, as amended;
(c) any "pollutant" pursuant to the Clean Water Act, as
amended;
(d) any petroleum product or related compound;
(e) any polychlorinated biphenyls or asbestos;
(f) any radioactive material or substance; or
(g) any pollutant or contaminant or hazardous, dangerous or
toxic chemical, material, substance or waste within the meaning of any other
applicable federal, state or local law, regulation, statute; ordinance, order or
requirement (including consent decrees and administrative orders issued to any
Borrower or Subsidiary) relating to or imposing liability or standards of
conduct concerning any hazardous, toxic or dangerous waste, substance or
material, all as amended or hereafter amended.
14
"INCURRENCE DATE" is defined in the definition of "Consolidated Pro
Forma Debt Service."
"INDEBTEDNESS" of any Person means, without duplication:
(a) any indebtedness for borrowed money which such Person
has directly or indirectly created, incurred or assumed;
(b) any indebtedness, whether or not for borrowed money, 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;
(c) all obligations evidenced by notes, bonds, debentures or
similar instruments, including obligations so evidenced incurred in connection
with the acquisition of property, assets or businesses;
(d) all indebtedness created or arising under any conditional
sale or other title retention agreement, or incurred as financing, in either
case with respect to property acquired by the Person (even though the rights and
remedies of the seller or lender under such agreement in the event of default
are limited to repossession or sale of such property);
(e) all Capitalized Lease Liabilities;
(f) any indebtedness, whether or not for borrowed money,
secured by (or for which the holder of such Indebtedness has an existing right,
contingent or otherwise, to be 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
not so assumed shall in no event be deemed to be greater than the fair market
value from time to time (as determined in good faith, by such Person) of the
property subject to such Lien;
(g) all Capital Stock of such Person redeemable at the option
of the holder prior to the final maturity of the Private Placement Debt, valued
at the greater of its voluntary or involuntary maximum fixed repurchase price or
any mandatory redemption payment obligations in respect thereon plus, in either
case, accrued dividends thereon;
(h) any preferred stock of any Restricted Subsidiary of such
Person redeemable at the option of the holder prior to the final maturity of the
Private Placement Debt, valued at the sum of the liquidation preference thereof
or any mandatory redemption payment obligations in respect thereof plus, in
either case, accrued dividends thereon;
(i) all liabilities of such Person in respect of letters of
credit or instruments serving a similar function issued or accepted for its
account by banks and other financial institutions (whether or not representing
obligations for borrowed money);
15
(j) any indebtedness of the character referred to in clause
(a) through (i) of this definition deemed to be extinguished under GAAP but for
which such Person remains legally liable; and
(k) any indebtedness of any other Person of the character
referred to in clause (a) through (j) of this definition with respect to which
the Person whose Indebtedness is being determined has become liable by way of a
Contingent Liability.
Notwithstanding the foregoing, in determining the Indebtedness of the
Borrower and the Restricted Subsidiaries, there shall be excluded all undrawn
letters of credit (not yet due and payable), trade accounts payable, accrued
interest and other accrued expenses and customer credit balances arising in the
ordinary course of business on ordinary terms.
"INDEMNIFIED LIABILITIES" is defined in SECTION 11.4.
"INDEMNIFIED PARTIES" is defined in SECTION 11.4.
"INSOLVENCY PROCEEDING" means (a) any case, action or proceeding
before any court or other Governmental Authority relating to bankruptcy,
reorganization, insolvency, liquidation, receivership, dissolution,
winding-up or relief of debtors, or (b) any general assignment for the
benefit of creditors, composition, marshalling of assets for creditors, or
other similar arrangement in respect of a Person's creditors generally or any
substantial portion of a Person's creditors; undertaken under U.S. Federal,
state or foreign law, including the Bankruptcy Code.
"INTERCREDITOR AGREEMENT" means that certain Intercreditor and Trust
Agreement, dated as of December 11, 1996, among the Borrower and the Restricted
Subsidiaries, as Obligors, U.S. Trust Company of Texas, N.A., as Trustee, the
Note Purchasers named therein, as Note Holders, the Banks named therein, as Bank
Lenders, and the Agent, in its capacity as Agent, as the same may be amended,
supplemented, restated or otherwise modified from time to time in accordance
with the terms hereof.
"INTEREST PERIODS" means, relative to any Eurodollar Rate Loans, the
period beginning on (and including) the date on which such Eurodollar Rate Loan
is made or continued as, or converted into, a Eurodollar Rate Loan pursuant to
SECTION 2.3 or 2.4 and ending on (but excluding) the day which numerically
corresponds to such date one, two, three or six months thereafter (or, if such
month as no numerically corresponding day, on the last Business Day of such
month) or any shorter period if available to all the Lenders, in each case as
the Borrower may select in its relevant notice pursuant to SECTION 2.3 or 2.4;
PROVIDED, HOWEVER, that
(a) the Borrower shall not be permitted to select Interest
Periods to be in effect at any one time which have expiration dates occurring on
more than ten different dates;
(b) Interest Periods commencing on the same date for Loans
comprising part of the same Borrowing shall be of the same duration;
16
(c) if such Interest Period would otherwise end on a day which
is not a Business Day, such Interest Period shall end on the next following
Business Day (unless, if such Interest Period applied to Eurodollar Rate Loans,
such next following Business Day is the first Business Day of a calendar month,
in which case such Interest Period shall end on the Business Day next preceding
such numerically corresponding day); and
(d) no Interest Period may end later than the date set forth
in clause (a) of the definition "Working Capital Loan Commitment Termination
Date", in the case of Interest Periods for Working Capital Loans, or in the case
of Interest Periods for Acquisition Loans any date on which a principal payment
is due if it would be necessary to repay Acquisition Loans before the end of the
Interest Period applicable thereto.
"INTEREST RATE AGREEMENT" means any interest rate swap agreement,
interest rate cap agreement, interest rate collar agreement or arrangement
designed solely to protect the Borrower against fluctuations in interest rates
on Indebtedness outstanding under the Working Capital Loan Commitments or the
Acquisition Loan Commitments to the extent that such agreement is entered into
with, or such arrangement is provided by, a Lender or an Affiliate of a Lender.
"INVESTMENT" means, relative 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 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. For the purposes of SECTION
8.2.5, the amount involved in Investments made during any period shall be the
aggregate cost to the Borrower 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 Investment
(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 Investment or as loans from
any Person in whom such Investment has been made).
"ISSUANCE REQUEST" means a request and certificate duly executed by an
Authorized Officer of the Borrower, in substantially the form of EXHIBIT D (with
such changes thereto as may be agreed upon from time to time by the Agent and
the Borrower).
"ISSUER" means BofA, in its capacity as issuer of one or more Letters
of Credit, or any successor issuer thereto as may be reasonably agreed upon by
the Agent, the Required Lenders and the Borrower.
"LENDERS" is defined in the PREAMBLE.
17
"LETTER OF CREDIT" means, as the context may require, a Commercial
Letter of Credit or a Standby Letter of Credit, or both.
"LETTER OF CREDIT AVAILABILITY" means, at any time, the lesser of
(a) the excess of
(i) $20,000,000
OVER
(ii) the then Letter of Credit Outstandings,
OR
(b) the Working Capital Loan Commitment Amount at such time.
"LETTER OF CREDIT OUTSTANDINGS" means, at any time, an amount equal
to the sum of:
(c) the aggregate Stated Amount at such time of all Letters
of Credit then outstanding and undrawn (as such aggregate Stated Amount shall
be adjusted, from time to time, as a result of drawings, the issuance of
Letters of Credit, or otherwise),
PLUS
(d) the then aggregate amount of all unpaid and outstanding
Reimbursement Obligations.
"LIEN" shall mean as to any Person, any mortgage, lien (statutory or
otherwise), pledge, reservation, right of entry, encroachment, easement,
right of way, restrictive covenant, license, charge, security interest or
other encumbrance in or on, or any interest or title of any vendor, lessor,
lender or other secured party to or of such Person under any conditional sale
or other title retention agreement or capital lease with respect to, any
property or asset owned or held by such Person, or the signing or filing of a
financing statement with respect to any of the foregoing which names such
Person as debtor, the signing of any security agreement with respect to any
of the foregoing authorizing any other party as the secured party thereunder
to file any financing statement or any other agreement to give or grant any
of the foregoing. For the purposes of this Agreement, a Person shall be
deemed to be the owner of any asset which it has placed in trust for the
benefit of the holders of Indebtedness of such Person and such trust shall be
deemed to be a Lien if such Person remains legally liable therefor,
notwithstanding that such Indebtedness is or may be deemed to be extinguished
under GAAP.
"LOAN" means, as the context may require, a Working Capital Loan, an
Acquisition Loan or a Swing Loan.
"LOAN COMMITMENT TERMINATION DATE" means, as the context may
require, either the Working Capital Loan Commitment Termination Date or the
Acquisition Loan Conversion Date.
18
"LOAN DOCUMENT" means this Agreement, the Notes, the Security
Agreement, the Intercreditor Agreement, the Guaranty and any pledge
agreement, security agreement, guaranty, or mortgage delivered to the Agent
pursuant to this Agreement, as the same may be amended, supplemented,
restated or otherwise modified from time to time.
"MANAGING GENERAL PARTNER" is defined in the recitals and shall
include any successor thereto.
"MAXIMUM CONSOLIDATED PRO FORMA DEBT SERVICE" means as of any date
of determination, the highest total amount payable by the Borrower and the
Restricted Subsidiaries on a consolidated basis, during any period of four
consecutive Fiscal Quarters, commencing with the Fiscal Quarter in which such
date of determination occurs and ending on the maturity date of the Private
Placement Debt, in respect of scheduled principal payments and all cash
interest charges with respect to all Indebtedness of the Borrower and the
Restricted Subsidiaries outstanding or to be outstanding as a result of the
transactions occurring on such date of determination, after giving effect to
any Indebtedness to be incurred on the Incurrence Date and to any
Indebtedness proposed to be repaid from Dedicated Funds and (a) including
actual payments under Capital Lease Liabilities, (b) assuming, in the case of
Indebtedness (other than the Obligations) bearing interest at fluctuating
interest rates which cannot be determined in advance, that the rate in effect
on such date will remain in effect throughout such period, (c) assuming in
the case of the Obligations, that (1) the interest payments payable during
such four consecutive Fiscal Quarters will equal the actual interest payments
associated with the Obligations during the most recent four Fiscal Quarters,
(2) except for the twelve-month period immediately prior to the termination
or final maturity thereof (unless extended, renewed or refinanced) no
principal payments will be made on the Working Capital Loans and (3)
principal payments relating to the Loans will (unless the Acquisition Loan
Conversion Date shall have already occurred) become due based on the
assumption that the Acquisition Loan Conversion Date shall occur on November
30, 2001, (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 Obligations) 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 of similar
amortization provision), without regard to any provision permitting such
maturity date to be extended and (e) including any other designated
repayments of Indebtedness.
"MINIMUM QUARTERLY DISTRIBUTION" shall have the meaning given to it
in the Partnership Agreement.
"MULTIEMPLOYER PLAN" means a "Multiemployer Plan" as defined in
Section 4001(a) (3) of ERISA.
"NGC" means Northwestern Growth Corporation, a South Dakota
corporation and a wholly owned subsidiary of NOR.
"NEW LENDER" is defined in SECTION 2.8.
"NOR" means Northwestern Corporation, a Delaware company.
19
"NOTE" means, as the context may require, either a Working Capital
Note or an Acquisition Note, or both.
"NOTE AGREEMENT" means, collectively, the several substantially
identical note agreements dated as of December 11, 1996 pursuant to which the
Private Placement Debt was issued.
"OBLIGATIONS" means the obligations of the Borrower to the Agent and
the Lenders under this Agreement, the Notes and each other Loan Document.
"OBLIGOR" means the Borrower or any other Person (other than the
Agent, the Arranger or any Lender) obligated under any Loan Document.
"ORGANIC DOCUMENT" means, relative to any Obligor, its partnership
agreement, certificate of incorporation, its by-laws and all shareholder
agreements, voting trusts and similar arrangements applicable to any of its
authorized shares of Capital Stock or other equity interests.
"PARITY DEBT" means the obligations of the Borrower described in
clauses (c), (d), (h), and (l) of, and subsection (i) of the last paragraph
of, SECTION 8.2.2 which is secured and will rank pari passu with the
Obligations hereunder.
"PARTICIPANT" is defined in SECTION 11.11.2.
"PARTNERSHIP AGREEMENT" means the Amended and Restated Agreement of
Limited Partnership of the Borrower as in effect on the Refunding Effective
Date and as the same may be from time to time amended, supplemented or
otherwise modified subject to SECTION 8.2.15.
"PARTNERSHIP GROUP" means the Borrower and the Restricted
Subsidiaries.
"PBGC" means the Pension Benefit Guaranty Corporation and any entity
succeeding to any or all of its functions under ERISA.
"PENSION PLAN" means a "pension plan", as such term is defined in
section 3 (2) of ERISA, which is subject to Title IV of ERISA (other than a
multiemployer plan as defined in section 4001(a) (3) of ERISA), and to which
the Borrower or any corporation, trade or business that is, along with the
Borrower, a member of a Controlled Group, may have liability, including any
liability by reason of having been a substantial employer within the meaning
of section 4063 of ERISA at any time during the preceding five years, or by
reason of being deemed to be a contributing sponsor under section 4069 of
ERISA.
"PERCENTAGE" means the Working Capital Percentage or the Acquisition
Percentage, as applicable, or both.
"PERSON" means any natural person, corporation, partnership, firm,
association, trust, government, governmental agency or any other entity,
whether acting in an individual, fiduciary or other capacity.
20
"PLAN" means any Pension Plan or Welfare Plan.
"PRICING GRID" means the pricing grid (the last three columns being
a percentage per annum, expressed in basis points) as follows:
Tier Total Funded Applicable Commitment Applicable
Indebtedness to Consolidated Eurodollar Fee Base Rate Margin
Cash Flow Ratio Rate Margin
--------------------------------------------------------------------------------------------------
I LESS THAN OR EQUAL TO 3.25 75.0 25.0 0.0
II GREATER THAN 3.25 100.0 30.0 0.0
but LESS THAN OR EQUAL TO 3.75
III GREATER THAN 3.75 125.0 35.0 25.0
but LESS THAN OR EQUAL TO 4.25
IV GREATER THAN 4.25 150.0 37.5 50.0
but LESS THAN OR EQUAL TO 4.75
V GREATER THAN 4.75 175.0 37.5 75.0
but LESS THAN OR EQUAL TO 5.00
VI GREATER THAN 5.00 200.0 50.0 100.0
The applicable Tier on the Pricing Grid shall be established on each
Financial Statement Delivery Date and shall be applicable until the next
Financial Statement Delivery Date; PROVIDED, that for the period from the
Refunding Effective Date to the Financial Statement Delivery Date for the
Fiscal Quarter ending September 30, 1998 the applicable level shall be Tier
V; and provided further that if the financial statements required to be
delivered pursuant to SECTION 8.1.1(a) or SECTION 8.1.1(b) shall not be
delivered when due, the applicable level shall be Tier VI from the due date
until the date so delivered.
"PRIVATE PLACEMENT DEBT" means the $220,000,000 7.53% Senior Secured
Notes due December 30, 2010, issued by the Managing General Partner, the
Borrower and the Special General Partner pursuant to the Note Agreement.
"PROPANE DISTRIBUTION BUSINESS" is defined in the recitals hereto.
"PUBLIC PARTNERSHIP" is defined in the recitals hereto.
"QUALIFIED CAPITAL STOCK" means Capital Stock not constituting
Disqualified Stock.
"QUARTERLY PAYMENT DATE" means the last day of each March, June,
September, and December or, if any such day is not a Business Day, the next
succeeding Business Day.
"REFERENCE LENDER" shall mean BofA, so long as BofA is the Agent, or
the Lender serving for the time being as a successor Agent to BofA pursuant
to SECTION 10.9.
"REFUNDING EFFECTIVE DATE" means the date on which all conditions
precedent set forth in SECTION 6.1, SECTION 6.2 and SECTION 11.8 are
satisfied or waived by all Lenders, which date shall
21
occur on or before November 20, 1998 or such later date upon which the
Borrower and the Lenders shall mutually agree.
"REGULATORY CHANGE" means, relative to the Agent or any Lender, any
change after the date hereof in any (or the adoption after the date hereof of
any new):
(a) United States Federal or state law or foreign law
applicable to the Agent or such Lender; or
(b) regulation, interpretation, directive, or request
(whether or not having the force of law) applicable to such Agent or such
Lender or any court or government authority charged with the interpretation
or administration of any law referred to in the immediately preceding CLAUSE
(a) or of any fiscal, monetary, or other authority having jurisdiction over
the Agent or such Lender.
"REIMBURSEMENT OBLIGATIONS" is defined in SECTION 4.6.
"RELEASE" means a "release", as such term is defined in CERCLA.
"REQUIRED LENDERS" means, except as otherwise provided in the
Intercreditor Agreement, Lenders holding in excess of 50% of the Commitments
(or, if the Commitments are terminated, Lenders having in excess of 50% of
the aggregate outstanding Obligations).
"RESOURCE CONSERVATION AND RECOVERY ACT" means the Resource
Conservation and Recovery Act, 42 U.S.C. Section 690, et seq., as in effect
from time to time.
"RESPONSIBLE OFFICER" means with respect to any Person, the
President, any Vice President, the Chief Financial Officer, the Treasurer and
the Secretary of such Person and any other officer of such Person who is
responsible for compliance with or performance of any obligation under this
Agreement with respect to the Borrower, any such officer of the Managing
General Partner of the Borrower and, in any case, any employee of the
Borrower performing any of the above functions.
"RESTRICTED PAYMENT" means any payment or other distribution in
respect of any partnership interest in the Borrower, except a distribution
payable solely in additional partnership interests in the Borrower, and any
payment, by the Borrower or a Restricted Subsidiary on account of the
redemption, retirement, purchase or other acquisition of any partnership
interest in the Borrower.
"RESTRICTED SUBSIDIARY" means any wholly owned direct or indirect
Subsidiary of the Borrower organized under the laws of the United States or
any state thereof or the District of Columbia, none of the Capital Stock or
ownership interests of which is owned by Unrestricted Subsidiaries and
substantially all of the operating assets of which are located in, and
substantially all of the business of which is conducted within the United
States and is designated as a Restricted Subsidiary or which shall be
designated as a Restricted Subsidiary by the Managing General Partner at a
subsequent date; PROVIDED, HOWEVER, that (a) to the extent a newly formed or
22
acquired Subsidiary meeting the foregoing requirements is not declared either
a Restricted Subsidiary or an Unrestricted Subsidiary within 90 days of its
formation or acquisition, such Subsidiary shall be deemed a Restricted
Subsidiary and (b) a Restricted Subsidiary may be designated as an
Unrestricted Subsidiary in accordance with the provisions of SECTION 8.2.14.
"SECURITY AGREEMENT" means the Security Agreement, dated as of
December 11, 1996, as amended, supplemented, restated or otherwise modified
from time to time.
"SECURITY DOCUMENTS" means any of the documents securing the Notes.
"SPECIAL GENERAL PARTNER" is defined in the recitals and shall
include any successor thereto.
"STANDBY LETTER OF CREDIT" is defined in SECTION 4.1.
"STATED AMOUNT" of each Letter of Credit means the "Stated Amount"
as defined therein.
"STATED EXPIRY DATE" is defined in SECTION 4.1.
"STATED MATURITY DATE" means, with respect to the Working Capital
Loans, Swing Loans and Letters of Credit, November 30, 2001 subject to
extension as provided in SECTION 3.1.1 and, with respect to the Acquisition
Loans, November 30, 2003 subject to extension as provided in SECTION 3.1.1.
"SUBSIDIARY" means with respect to any Person, any corporation,
limited liability company, business trust, association, partnership, joint
venture or other business entity at least a majority (by number of votes) of
the stock of any class or classes (or equivalent interest) of which is at the
time owned by such Person or by one or more Subsidiaries of such Person or by
such Person and one or more Subsidiaries of such Person, if the holders of
the stock of such class or classes (or equivalent interests) (a) are
ordinarily, in the absence of contingencies, entitled to vote for the
election of a majority of the directors (or Persons performing similar
functions) of such business entity, even though the right so to vote has been
suspended by the happening of such a contingency, or (b) are at the time
entitled, as such holders, to vote for the election of the majority of the
directors (or Persons performing similar functions) of such business entity,
whether or not the right so to vote exists by reason of the happening of a
contingency. Unless the context otherwise requires, any reference to a
Subsidiary shall mean a Subsidiary of the Borrower.
"SWING LINE" is defined in SECTION 2.7.
"SWING LINE LENDER" is defined in SECTION 2.7.
"SWING LOAN" is defined in SECTION 2.7.
"SWING LOAN REQUEST" means a loan request and certificate duly
executed by an Authorized Officer of the Borrower on behalf of the Borrower
and substantially in the form of EXHIBIT K.
23
"SYNTHETIC LEASE" means each arrangement, however described, under
which the obligor accounts for its interest in the property covered thereby
under GAAP as lessee of a lease which is not a capital lease and accounts for
its interest in the property covered thereby for Federal income tax purposes
as the owner.
"SYNTHETIC LEASE INTEREST COMPONENT" means, with respect to any
Person for any period, the portion of rent paid or payable (without
duplication) for such period under Synthetic Leases of such Person that would
be treated as interest in accordance with Financial Accounting Standards
Board Statement No. 13 if such Synthetic Leases were treated as capital
leases under GAAP.
"SYNTHETIC LEASE OBLIGATION" means, as to any Person with respect to
any Synthetic Lease at any time of determination, the amount of the liability
of such Person in respect of such Synthetic Lease that would (if such lease
was required to be classified and accounted for as a capital lease on a
balance sheet of such Person in accordance with GAAP) be required to be
capitalized on the balance sheet of such Person at such time.
"SYNTHETIC LEASE PRINCIPAL COMPONENT" means, with respect to any
Person for any period, the portion of rent (exclusive of the Synthetic Lease
Interest Component) paid or payable (without duplication) for such period
under Synthetic Leases of such Person that was deducted in calculating
Consolidated Net Income of such Person for such period.
"TAXES" is defined in SECTION 5.6.
"TOTAL FUNDED INDEBTEDNESS TO CONSOLIDATED CASH FLOW RATIO" means,
as at any Fiscal Quarter end for the period then ending, the ratio of (a) (1)
consolidated Debt of the Borrower and the Restricted Subsidiaries PLUS (2)
all Capitalized Lease Liabilities of the Borrower and the Restricted
Subsidiaries PLUS (3) all Synthetic Lease Obligations of the Borrower and the
Restricted Subsidiaries to (b) Consolidated Cash Flow.
"TRUSTEE" means U.S. Trust Company of Texas, N.A. or any permitted
successor under the Intercreditor Agreement.
"TYPE" means, relative to any Loan, the portion thereof, if any,
being maintained as a Base Rate Loan or a Eurodollar Rate Loan.
"UNITED STATES" or "U.S." means the United States of America, its
fifty States and the District of Columbia.
"UNRESTRICTED SUBSIDIARY" means any Subsidiary of the Borrower other
than a Restricted Subsidiary.
"WELFARE PLAN" means a "WELFARE PLAN", as such term is defined in
section 3(1) of ERISA.
"WORKING CAPITAL LENDER" means a Lender with a Working Capital Loan
Commitment or with outstanding Working Capital Loans.
"WORKING CAPITAL LOAN" is defined in SECTION 2.1.1.
24
"WORKING CAPITAL LOAN COMMITMENT" means, relative to any Lender,
such Lender's obligation to make Working Capital Loans pursuant to SECTION
2.1.1.
"WORKING CAPITAL LOAN COMMITMENT AMOUNT" means, on any date,
$75,000,000, as such amount may be reduced from time to time pursuant to
SECTION 2.2 and may be increased from time to time pursuant to SECTION 2.8.
"WORKING CAPITAL LOAN COMMITMENT TERMINATION DATE" means the
earliest of
(a) November 30, 2001, subject to extension as provided in
SECTION 3.1.1;
(b) the date on which the Working Capital Loan Commitment
Amount is terminated in full or reduced to zero pursuant to SECTION 2.2; and
(c) the date on which any Commitment Termination Event
occurs.
Upon the occurrence of any event described above, the Working
Capital Loan Commitments shall terminate automatically and without any
further action.
"WORKING CAPITAL NOTE" means a promissory note of the Borrower
payable to the Agent, in the form of EXHIBIT A (as such promissory note may
be amended, endorsed or otherwise modified from time to time), evidencing,
the aggregate Indebtedness of the Borrower resulting from outstanding Working
Capital Loans, and also means all other promissory notes accepted from time
to time in substitution therefor or renewal thereof.
"WORKING CAPITAL PERCENTAGE" means, relative to any Lender, the
Working Capital Percentage set forth on SCHEDULE II, as such percentage may
be adjusted from time to time pursuant to Assignment and Acceptance
Agreement(s) executed by such Lender and its Assignee Lender(s) and delivered
pursuant to SECTION 11.11.1.
"YEAR 2000 COMPLIANT" shall mean that neither performance nor
functionality of any of the Borrower's or its Subsidiaries' computer hardware
or software is materially affected by dates prior to, on, or after December
31, 1999. In particular: (a) no value for any current date will cause any
material interruption in operation; (b) date based functionality must behave
consistently for dates prior to, on and after December 31, 1999 in all
material respects; and (c) Year 2000 must be recognized as a leap year.
"YEAR 2000 PROBLEM" means the risk that computer applications used
by the Borrower and its Subsidiaries may be unable to recognize and perform
properly date-sensitive functions involving any date prior to, on or after
December 31, 1999 (including the fact that the Year 2000 is a leap year).
Section 1.2 USE OF DEFINED TERMS. Unless otherwise defined or the
context otherwise requires, terms for which meanings are provided in this
Agreement shall have such meanings when used in the Disclosure Schedule and
in each Note, Borrowing Request,
25
Continuation/Conversion Notice, Loan Document, notice and other communication
delivered from time to time in connection with this Agreement or any other
Loan Document.
Section 1.3 OTHER INTERPRETIVE PROVISIONS.
(a) The meanings of defined terms are equally applicable to
the singular and plural forms of the terms.
(b) The words "hereof", "herein", "hereunder" and similar
words refer to this Agreement as a whole and not to any particular provision
of this Agreement; and subsection, Section, Schedule and Exhibit references
are to this Agreement unless otherwise specified.
(c) ERROR! BOOKMARK NOT DEFINED. The term "documents" includes
any and all instruments, documents, agreements, certificates,
indentures, notices and other writings, however evidenced.
ERROR! BOOKMARK NOT DEFINED. The term "including"
is not limiting and means "including without limitation."
ERROR! BOOKMARK NOT DEFINED. In the computation
of periods of time from a specified date to a later specified date,
the word "from" means "from and including"; the words "to" and "until"
each mean "to but excluding", and the word "through" means "to and
including."
(d) Unless otherwise expressly provided herein, (i)
references to agreements (including this Agreement) and other contractual
instruments shall be deemed to include all subsequent amendments and other
modifications thereto, but only to the extent such amendments and other
modifications are not prohibited by the terms of any Loan Document, and (ii)
references to any statute or regulation are to be construed as including all
statutory and regulatory provisions consolidating, amending, replacing,
supplementing or interpreting the statute or regulation.
(e) The captions and headings of this Agreement are for
convenience of reference only and shall not affect the interpretation of this
Agreement.
(f) This Agreement and other Loan Documents may use several
different limitations, tests or measurements to regulate the same or similar
matters. All such limitations, tests and measurements are cumulative and
shall each be performed in accordance with their terms.
(g) Unless otherwise expressly provided herein, financial
calculations applicable to the Borrower shall be made on a consolidated basis.
Section 1.4 ACCOUNTING AND FINANCIAL DETERMINATIONS. Unless
otherwise specified, all accounting terms used herein or in any other Loan
Document shall be interpreted,
26
all accounting determinations and computations hereunder or thereunder
(including under SECTION 8.2.4) shall be made, and all financial statements
required to be delivered hereunder or thereunder shall be prepared in
accordance with, those generally accepted accounting principles in effect in
the United States of America from time to time ("GAAP"). Notwithstanding the
foregoing, if the Borrower, the Required Lenders or the Agent determines that
a change in GAAP from that in effect on the date hereof, has altered the
treatment of certain financial data to its detriment under this Agreement,
such party may seek of the others a renegotiations of any financial covenant
affected thereby. If the Borrower, the Required Lenders and Agent cannot
agree on renegotiated covenants, then, for the purposes of this Agreement,
GAAP will refer to generally accepted accounting principles on the date just
prior to the date on which the change that gave rise to the renegotiation
occurred.
ARTICLE II
COMMITMENTS, BORROWING PROCEDURES AND NOTES
Section 2.1 COMMITMENTS. On the terms and subject to the conditions
of this Agreement (including ARTICLE IV), each Lender severally agrees to
make Loans pursuant to the Commitments described in this SECTION 2.1.
Section 2.1.1 WORKING CAPITAL LOAN COMMITMENT. On the terms
and subject to the conditions of this Agreement, from time to time on any
Business Day occurring prior to the Working Capital Loan Commitment
Termination Date, each Lender will make Loans (relative to such Lender, its
"WORKING CAPITAL LOANS") to the Borrower equal to such Lender's Working
Capital Percentage of the aggregate amount of the Borrowing of Working
Capital Loans requested by the Borrower to be made on such day. The
Commitment of each Lender described in this SECTION 2.1.1 is herein referred
to as its "WORKING CAPITAL LOAN COMMITMENT". On the terms and subject to the
conditions hereof, the Borrower may from time to time borrow, prepay and
reborrow Working Capital Loans. On the Refunding Effective Date, (a) all
Existing Letters of Credit shall be Letters of Credit hereunder and shall
constitute usage of the Working Capital Loan Commitment under this Agreement
and each Lender hereby agrees to participate in such Letters of Credit in
accordance with SECTION 4.4 hereof and (b) the Agent and the Issuer shall
inform the Existing Lenders that the obligations of the Existing Lenders to
participate in the Existing Letters of Credit under the Existing Credit
Agreement have been terminated.
Section 2.1.2 ACQUISITION LOAN COMMITMENT. On the terms and
subject to the conditions of this Agreement, from time to time on any
Business Day occurring prior to the Acquisition Loan Conversion Date, each
Lender will make Loans (relative to such Lender, its "ACQUISITION LOANS") to
the Borrower equal to such Lender's Percentage of the aggregate amount of the
Borrowing of Acquisition Loans requested by the Borrower to be made on such
day. The Commitment of each Lender described in this SECTION 2.1.2 is herein
referred to as its "ACQUISITION LOAN COMMITMENT". On the terms and subject to
the conditions hereof, the Borrower may from time to time borrow, prepay and
reborrow Acquisition Loans at any time prior to the Acquisition Loan
Conversion Date.
27
Section 2.1.3 LENDERS NOT PERMITTED OR REQUIRED TO MAKE
LOANS. No Lender shall be permitted or required to
(a) make any Working Capital Loan if, after giving effect
thereto, the aggregate outstanding principal amount of all Working Capital
Loans of all Lenders, together with all Letters of Credit Outstandings and
the aggregate outstanding amount of all Swing Loans, would exceed the Working
Capital Loan Commitment Amount, or
(b) make any Acquisition Loan if, after giving effect
thereto, the aggregate outstanding principal amount of all Acquisition Loans
of all Lenders would exceed the Acquisition Loan Commitment Amount, or
(c) issue (in the case of the Issuer) or participate in (in
the case of each Lender other than the Lender that is the Issuer) any Letter
of Credit if, after giving effect thereto all Letter of Credit Outstandings
and all Swing Loans together with the aggregate outstanding principal amount
of all Working Capital Loans of all Lenders would exceed the Working Capital
Loan Commitment Amount.
Section 2.2 REDUCTION OF COMMITMENT AMOUNTS. The Commitment Amounts
are subject to reduction from time to time pursuant to this SECTION 2.2.
Section 2.2.1 OPTIONAL. The Borrower may, from time to time
on any Business Day occurring after the Refunding Effective Date, voluntarily
reduce the unused amount of either Commitment Amount; provided, however, that
all such reductions shall require at least three Business Days' prior notice
to the Agent and be permanent, and any partial reduction of either Commitment
Amount shall be in an integral multiple of $1,000,000.
Section 2.2.2 MANDATORY. The applicable Commitment Amount
shall be reduced by an amount equal to any amount required as a mandatory
prepayment of the Working Capital Loans or Acquisition Loans as applicable
pursuant to SECTION 3.1 (whether or not any loans shall then be outstanding
under the applicable Loan).
Section 2.3 BORROWING PROCEDURE. By delivering a Borrowing Request
to the Agent on or before 11:00 a.m., San Francisco time, on a Business Day,
the Borrower may from time to time irrevocably request, on not less than
three nor more than five Business Days' notice in the case of Eurodollar Rate
Loans, and on not less than one nor more than five Business Days' notice in
the case of Base Rate Loans, that a Borrowing be made in a minimum amount of
$3,000,000 in the case of Eurodollar Rate Loans, and in a minimum amount of
$1,000,000 in the case of Base Rate Loans, and in both instances in an
integral multiple of $100,000, or in the unused amount of the applicable
Commitment. On the terms and subject to the conditions of this Agreement,
each Borrowing shall be comprised of the type of Loans, and shall be made on
the Business Day, specified in such Borrowing Request. Each Borrowing Request
must be signed by an Authorized Officer of the Borrower. On or before 12:00
noon, San Francisco time, on such Business Day each Lender shall deposit with
the Agent same day funds in an amount equal to such Lender's Percentage of
the requested Borrowing. Such deposit will be made to an account which the
Agent shall specify from time to time by notice to the Lenders. To the extent
28
funds are received from the Lenders, the Agent shall make such funds
available to the Borrower by wire transfer to the accounts specified in the
applicable Borrowing Request. No Lender's obligation to make any Loan shall
be affected by any other Lender's failure to make any Loan. Swing Loans shall
not be subject to this SECTION 2.3.
Section 2.4 CONTINUATION AND CONVERSION ELECTIONS. By delivering a
Continuation/Conversion Notice to the Agent on or before 11:00 a.m., San
Francisco time, on a Business Day, the Borrower may from time to time
irrevocably elect, on not less than three nor more than five Business Days'
notice that all, or any portion in a minimum amount of $3,000,000, in the
case of Eurodollar Rate Loans, and in a minimum amount of $1,000,000 in the
case of Base Rate Loans, and in both instances an integral multiple of
$100,000, of any Loans be, in the case of Base Rate Loans, converted into
Eurodollar Rate Loans or, in the case of Eurodollar Rate Loans, be converted
into a Base Rate Loan or a Eurodollar Rate Loan or continued as a Eurodollar
Rate Loan (in the absence of delivery of a Continuation/Conversion Notice
with respect to any Eurodollar Rate Loan at least three Business Days before
the last day of the then current Interest Period with respect thereto, such
Eurodollar Rate Loan shall, on such last day, automatically convert to a Base
Rate Loan); PROVIDED, HOWEVER, that (i) each such conversion or continuation
shall be pro rated among the applicable outstanding Loans of all Lenders, and
(ii) no portion of the outstanding principal amount of any Loans may be
continued as, or be converted into, Eurodollar Rate Loans when any Default or
Event of Default has occurred and is continuing. Each Continuation/Conversion
Notice must be signed by an Authorized Officer of the Borrower.
Section 2.5 FUNDING. Each Lender may, if it so elects, fulfill its
obligation to make, continue or convert Eurodollar Rate Loans hereunder by
causing one of its foreign branches or Affiliates (or an international
banking facility created by such Lender) to make or maintain such Eurodollar
Rate Loan; PROVIDED, HOWEVER, that such Eurodollar Rate Loan shall
nonetheless be deemed to have been made and to be held by such Lender, and
the obligation of the Borrower to repay such Eurodollar Rate Loan shall
nevertheless be to such Lender for the account of such foreign branch,
Affiliate or international banking facility. In addition, the Borrower hereby
consents and agrees that, for purposes of any determination to be made for
purposes of SECTION 5.1, 5.2, 5.3 or 5.4, it shall be conclusively assumed
that each Lender elected to fund all Eurodollar Rate Loans by purchasing, as
the case may be, Dollar certificates of deposit in the U.S. or Dollar
deposits in its Eurodollar Office's London interbank market.
Section 2.6 NOTES. The Loans under the Commitments shall be
evidenced by two Notes of the Borrower payable to the Agent, for the account
of the Lenders, in a maximum principal amount equal to the original
applicable Commitment Amount. The Borrower hereby irrevocably authorizes the
Agent to make (or cause to be made) appropriate notations on the grid
attached to the Notes (or on any continuation of such grid), which notations,
if made, shall evidence, INTER ALIA, the date of, the outstanding principal
of, and the interest rate and Interest Period applicable to the Loans
evidenced thereby. Such notations shall be conclusive and binding on the
Borrower absent manifest error; PROVIDED, HOWEVER, that the failure of the
Agent to make any such notations shall not limit or otherwise affect any
Obligations of the Borrower.
29
Section 2.7 SWING LINE.
(a) Upon the Borrower's request, and on the terms and
subject to the conditions of this Agreement, BofA (in such capacity, the
"SWING LINE LENDER") may, in its sole discretion, on and after the Refunding
Effective Date and prior to the Working Capital Loan Commitment Termination
Date, make swing line loans (each, a "SWING LOAN") available to the Borrower
under a swing line credit facility (the "SWING LINE") in an aggregate amount
of up to $5,000,000 at any one time outstanding; provided that the Swing Line
Lender shall not in any event be permitted to make any Swing Loan under the
Swing Line if, after giving effect thereto, (i) the sum of the then aggregate
outstanding principal amount of all Working Capital Loans and Swing Loans
plus the then aggregate amount of all Letter of Credit Outstandings would
exceed the Working Capital Loan Commitment Amount, or (ii) the then aggregate
outstanding principal amount of all Swing Loans made by the Swing Line Lender
would exceed $5,000,000. The Swing Line Lender shall not be at any time
obligated to make any Swing Loan.
(b) Each request for Swing Loans shall be made from time to
time by the Borrower delivering a Swing Loan Request therefor to the Agent
and the Swing Line Lender at or before 11:00 a.m., San Francisco time, on any
Business Day. On the terms and subject to the conditions of this Agreement,
each Swing Loan shall be disbursed on the Business Day on which the request
therefor was timely made, in same day funds by wire transfer to such
transferee(s), or to such account(s) of the Borrower, as the Borrower shall
have specified in the request therefor. Swing Loans shall be in an aggregate
minimum principal amount of $100,000 and an integral multiple of $50,000.
(c) Each Swing Loan outstanding under the Swing Line shall
accrue interest at a rate per annum equal to the interest accrued on a Base
Rate Loan which interest shall be payable quarterly in arrears on each
Quarterly Payment Date and on the Stated Maturity Date for Swing Loans, and
shall be payable to the Swing Line Lender; provided that, notwithstanding any
other provision of this Agreement, each Swing Loan shall bear interest for a
minimum of one day.
(d) Each Swing Loan under the Swing Line shall be due and
payable on the earlier of:
(i) at or before 11:00 a.m., San Francisco time, on
the seventh Business Day immediately following the date such Swing Loan
was made pursuant to the Swing Line; and
(ii) in any event on the Working Capital Loan
Commitment Termination Date;
provided that, if no Event of Default shall have occurred and be continuing,
then unless the Borrower notifies the Swing Line Lender that it will repay
such Swing Loan, on the due date of such Swing Loan, if and to the extent
that the Borrower is permitted to borrow Working Capital Loans under the
terms of this Agreement (the Working Capital Loan Commitment being determined
for such purpose without giving effect to any reduction thereof occasioned by
such
30
Swing Loans due and payable) at the time such Swing Loans are due,
the Borrower shall be deemed to have submitted a Borrowing Request
for Working Capital Loans at the Base Rate in an amount necessary to
repay the amount demanded, and the provisions of SECTION 2.3
concerning the minimum principal amounts and integral multiples
thereof required for Borrowings of Working Capital Loans shall apply
to Working Capital Loans made pursuant to this SECTION 2.7(d).
(e) The Borrower may, from time to time on any Business
Day, make a voluntary prepayment, in whole or in part, of the outstanding
principal amount of any Swing Loans, without incurring any premium or
penalty; provided that
(i) each such voluntary prepayment shall require
prior written notice given to the Agent and Swing Line Lender no later
than 11:00 a.m., San Francisco time, on the day on which the Borrower
intends to make a voluntary prepayment, and
(ii) each such voluntary prepayment shall be in a
minimum amount of $100,000 and in an integral multiple of $50,000 (or,
if less, the aggregate outstanding principal amount of all Swing Loans
then outstanding).
(f) Each Lender shall be deemed to have unconditionally and
irrevocably purchased a pro rata risk participation from the Swing Line
Lender in such Swing Line Lender's Swing Loans, without recourse,
representation or warranty in an amount equal to such Lender's Working
Capital Percentage of such Swing Loans. In addition, from and after the date
that any Lender funds such participation pursuant to SECTION 2.7(g) below,
such Lender shall, to the extent of its Working Capital Percentage, be
entitled to receive a ratable portion of any payment of principal and
interest received by the Swing Line Lender on account of such Swing Loans,
payable promptly to such Lender upon such receipt.
(g) The Swing Line Lender may, in its sole and absolute
discretion at any time during the continuance of an Event of Default, upon
notice to the Borrower and the Lenders, terminate the Swing Line and cause
all outstanding Swing Loans automatically upon the giving of such notice to
be repaid from the proceeds of Working Capital Loans made by the Lenders in
accordance with their respective Working Capital Percentages (which Working
Capital Loans shall be Base Rate Loans bearing interest at the Default Rate)
in an aggregate amount sufficient to repay all outstanding Swing Loans, and
the provisions of Section 2.3 concerning the minimum principal amounts and
integral multiples thereof required for Borrowings of Working Capital Loans
shall not apply to Working Capital Loans made pursuant to this Section
2.7(g); PROVIDED, that if any Insolvency Proceeding has been commenced with
respect to the Borrower on or prior to the date on which any Swing Loan is
due, and in lieu of funding its Working Capital Percentage of Working Capital
Loans as provided above, each Lender shall immediately fund its risk
participation in such Swing Loan by funding to the Agent, for the account of
the Swing Line Lender, such Lender's pro rata share of such Swing Loan, based
on such Lender's Working Capital Percentage. None of the conditions precedent
set forth in SECTION 2.3 and SECTION 6.2 shall apply to any funding by a
Lender of its Working Capital
31
Percentage of Working Capital Loans or its risk participation in a Swing
Loan, in each case pursuant to this SECTION 2.7(g).
(h) The Swing Line Lender shall not, without the approval
of all Lenders, make a Swing Loan if the Swing Line Lender then has received
a written notice of default from the Borrower, any Lender or the Agent of the
type referred to in the first sentence of SECTION 10.5.
(i) Each Lender's obligation in accordance with this
Agreement to make Working Capital Loans upon the failure of a Swing Loan to
be repaid in full when due, or to fund its participation in such Swing Loans,
shall, in each case, be absolute and unconditional and without recourse to
the Swing Line Lender and shall not be affected by any circumstance,
including (i) any set-off, counterclaim, recoupment, defense or other right
which such Lender may have against the Swing Line Lender, the Borrower or any
other Person for any reason whatsoever; (ii) the occurrence or continuance of
a Default, an Event of Default or a material adverse effect on the condition
(financial or otherwise), business, operations, assets or properties of the
Borrower and the Restricted Subsidiaries; (iii) the receipt by the Swing Line
Lender of a written notice of default from the Borrower, any Lender or the
Agent of the type referred to in the first sentence of SECTION 10.5 after a
Swing Loan was made by the Swing Line Lender or (iv) any other circumstance,
happening or event whatsoever, whether or not similar to any of the foregoing.
Section 2.8 INCREASES IN WORKING CAPITAL LOAN COMMITMENTS.
(a) Provided that no Default or Event of Default then
exists, the Borrower may at any time request in writing that the then
existing Working Capital Loan Commitments be increased by an amount which is
not less than $10,000,000 and not greater than $25,000,000 in the aggregate
since the Refunding Effective Date in accordance with the provisions of this
Section. Any request under this Section shall be submitted by the Borrower to
the Lenders through the Agent not less than sixty (60) days prior to the
proposed increase and shall specify the proposed effective date and amount of
such increase and be accompanied by a certificate of an Authorized Officer of
the Borrower, stating that no Default or Event of Default exists as of the
date of the request or will result from the requested increase. The Borrower
may also specify any fees offered to those Lenders which agree to an increase
in its Working Capital Loan Commitment (which fees may be variable based upon
the amount which any such Lender is willing to assume as an increase to the
amount of its Working Capital Loan Commitment). Any fees payable in
connection with any increase in the Working Capital Loan Commitments need not
be offered to any Lenders which do not agree to an increase in the Working
Capital Loan Commitment. The consent of the Lenders, as a group, shall not be
required for an increase in the amount of the Working Capital Loan
Commitments pursuant to this Section.
(b) Each Lender may approve or reject the Borrower's
request in its sole and absolute discretion and, absent an affirmative
written response within thirty (30) days after receipt of the Borrower's
request, shall be deemed to have rejected the Borrower's request. The
rejection of the Borrower's request by any number of Lenders shall not affect
the Borrower's
32
right to increase the Working Capital Loan Commitments pursuant to this
Section. No Lender which rejects the Borrower's request for an increase in
the Working Capital Loan Commitments shall be subject to removal as a Lender.
(c) In responding to the Borrowers' request, each Lender
which is willing to increase the amount of its Working Capital Loan
Commitment shall specify the amount of the proposed increase which it is
willing to commit to. Unless otherwise agreed to by such Lender, each
increasing Lender shall be entitled to participate ratably (based on its
Working Capital Percentage before such increase) in any resulting increase in
the Working Capital Loan Commitments.
(d) If the aggregate principal amount offered to be
committed to by the consenting Lenders is less than the amount requested by
the Borrower, the Borrower may (i) reject the proposed increase in its
entirety, (ii) accept the offered amounts or (iii) designate new lenders who
are reasonably acceptable to the Agent as additional Lenders hereunder in
accordance with clause (e) of this Section (each, a "NEW LENDER"), which New
Lenders may commit to the amount of the increase in the Working Capital Loan
Commitments that has not been committed to by the increasing Lenders;
PROVIDED, that the amount of the increase in the Working Capital Loan
Commitments committed to by the increasing Lenders and the New Lenders shall
be not less than $10,000,000 and not greater than $25,000,000 in the
aggregate since the Refunding Effective Date.
(e) Each New Lender designated by the Borrower and
reasonably acceptable to the Agent shall become an additional party hereto as
a New Lender concurrently with the effectiveness of the proposed increase in
the Working Capital Loan Commitments upon its execution of an instrument of
joinder to this Agreement which is in form and substance reasonably
acceptable to the Agent and which, in any event, contains the
representations, warranties, indemnities and other protections afforded to
the Agent and the other Lenders by an Assignment and Acceptance Agreement.
(f) Subject to the foregoing, any increase requested by the
Borrower shall be effective as of the date agreed to by the Borrower, the
Agent, the increasing Lenders and the New Lenders (if any) and shall be in
the principal amount equal to (i) the amount which increasing Lenders are
willing to commit to as increases to the amount of their Working Capital Loan
Commitments PLUS (ii) the amount offered by any New Lenders. Upon the
effectiveness of any such increase, the Borrower shall issue replacement
Notes to each affected Lender and new Notes to each New Lender, and the
Working Capital Loan Commitments of each Lender will be adjusted to give
effect to the increase in the Working Capital Loan Commitments and set forth
in a new Schedule II issued by the Agent.
33
ARTICLE III
REPAYMENTS, PREPAYMENTS, INTEREST AND FEES
Section 3.1 REPAYMENTS AND PREPAYMENTS. The Borrower shall repay in
full the unpaid principal amount of each Loan upon the Stated Maturity Date
applicable to such Loan. Prior thereto, the Borrower
(a) may, from time to time on any Business Day, make a
voluntary prepayment, in whole or in part, of the outstanding principal
amount of any Loans; provided, however, that
(i) any such prepayment shall be made pro rata among
Loans of the same type and, if applicable, having the same Interest
Period of all Lenders;
(ii) all such voluntary prepayments of Eurodollar
Rate Loans, and all Acquisition Loans that shall be subsequent to the
Acquisition Loan Conversion Date, shall require at least three but no
more than five Business Days' prior written notice to the Agent and all
such voluntary prepayments of Base Rate Loans, that are not Acquisition
Loans subsequent to the Acquisition Loan Conversion Date, shall require
prior written notice to the Agent at least by 1:00 p.m. at least one
Business Day prior to such repayment but no more than five Business
Days prior to such repayment;
(iii) all such voluntary prepayments of Eurodollar
Rate Loans or Acquisition Loans shall be made in a minimum amount of
$3,000,000 and an integral multiple of $100,000, or in the whole
outstanding principal amount of such Loans, and all such voluntary
prepayments of Working Capital Loans maintained as Base Rate Loans
shall be made in a minimum amount of $1,000,000 and an integral
multiple of $100,000, or in the whole outstanding principal amount of
such Loan; and
(b) shall, on each date when any reduction in the
applicable Commitment Amount shall become effective, including pursuant to
SECTION 2.2, make a mandatory prepayment of all applicable Loans equal to the
excess, if any, of the aggregate outstanding principal amount of all
applicable Loans over the applicable Commitment Amount as so reduced;
(c) shall, subject to the provisions of SECTION 8.2.8(b),
within five Business Days after receipt by the Borrower or any Subsidiary of
the net proceeds of any Asset Dispositions (or if committed to be expended
within 365 days, after such 365 days if not so expended), make a mandatory
prepayment of the Loans, the Private Placement Debt and the Parity Debt pro
rata in an amount equal to the net proceeds of such Asset Disposition not so
expended;
(d) shall, within five Business Days of receipt, apply 100%
of the net proceeds of insurance and condemnation awards after payment of
costs and expense and associated taxes (not applied to the restoration or
replacement of like kind assets within 365
34
days) over an aggregate of $2,500,000 in any Fiscal Year to prepay the Loans,
and if required by the express terms thereof the Private Placement Debt and
the Parity Debt pro rata (taking into account any premiums that may be due);
(e) shall, immediately upon any acceleration of the Stated
Maturity Date of any Loans pursuant to SECTION 9.2 or SECTION 9.3, repay all
Loans; and
(f) shall, on each Quarterly Payment Date immediately
following the Acquisition Loan Conversion Date, make a scheduled repayment of
the aggregate principal amount, if any, of all Acquisition Loans equal to 1/8
of the principal amount of the Acquisition Loans outstanding on the
Acquisition Loan Conversion Date, with final payment of any remaining
Acquisition Loan due on the Stated Maturity Date applicable to Acquisition
Loans. No prepayment of any Acquisition Loan pursuant to this paragraph shall
cause an increase in the Acquisition Loan Commitment Amount.
Subsequent to the Acquisition Loan Conversion Date, each voluntary prepayment
of Acquisition Loans made pursuant to CLAUSE (a) and each mandatory
prepayment of Acquisition Loans made pursuant to CLAUSE (b), (c), (d) and (e)
shall be applied, to the extent of such prepayment, to the scheduled
repayments of the Acquisition Loans installments pro rata. Mandatory
prepayments shall be applied first to the Acquisition Loans, then the Working
Capital Loans, then to the payment of the then outstanding Swing Loans and
then to the outstanding aggregate amount of all Letter of Credit
Outstandings, such mandatory prepayment that is applied to the Letters of
Credit Outstanding to be held as cash collateral therefor pursuant to the
terms of SECTION 4.7 hereof. Each prepayment of any Loans made pursuant to
this Section shall be without premium or penalty, except as may be required
by SECTION 5.4. No voluntary prepayment of principal of any Working Capital
Loan or Acquisition Loan prior to the applicable Loan Commitment Termination
Date, shall cause a reduction in the Working Capital Loan Commitment Amount
or Acquisition Loan Commitment Amount, as applicable.
Section 3.1.1 EXTENSIONS OF LOAN COMMITMENT TERMINATION
DATE.
(a) Each Lender shall be relieved of its obligations to
make (1) any Acquisition Loans on the Acquisition Loan Conversion Date and
(2) any Working Capital Loans on the Working Capital Loan Commitment
Termination Date. The Borrower may from time to time request an extension of
the Acquisition Loan Conversion Date, the Working Capital Loan Commitment
Termination Date and the Stated Maturity Date with respect to Acquisition
Loans and Working Capital Loans for an additional one-year period by
executing and delivering to the Agent a Commitment Termination Date Extension
Request at least sixty but not more than ninety days prior to the then
scheduled Acquisition Loan Conversion Date and Working Capital Loan
Commitment Termination Date. The Acquisition Loan Conversion Date, Working
Capital Loan Commitment Termination Date and the Stated Maturity Date with
respect to Acquisition Loans and Working Capital Loans shall each be so
extended if the Agent shall have received from each Lender on or prior to the
thirtieth day preceding the then scheduled Acquisition Loan Conversion Date
and Working Capital Loan Commitment Termination Date a duly executed
counterpart of such Commitment Termination Date Extension Request. Each
Lender may in its
35
sole and absolute discretion withhold its consent to any such Commitment
Termination Date Extension Request.
(b) Notwithstanding the foregoing, if the Agent shall have
received duly executed counterparts of a Commitment Termination Date
Extension Request from Lenders representing, in the aggregate, 85% or more of
the Commitments, but less than 100% of the Commitments, on or prior to the
thirtieth day preceding the then scheduled Acquisition Loan Conversion Date
and Working Capital Commitment Termination Date, the Agent shall so notify
the Borrower (the date of such notice being the "NOTICE DATE") and the
Borrower shall have the right to seek a substitute lender or lenders (the
"NEW LENDERS") which New Lenders would meet the requirements to be Assignee
Lenders as defined in SECTION 11.11.1, acceptable to the Agent and the
Borrower (which may be one or more of the Lenders) to replace the Lender or
Lenders which have not delivered a counterpart of such Commitment Termination
Date Extension Request by such time; PROVIDED that such New Lenders shall
replace such nonrenewing Lenders on all such nonrenewing Lenders' Acquisition
Loan Commitments, Acquisition Loans, Working Capital Loan Commitments,
Working Capital Loans and participation in outstanding Swing Loans and Letter
of Credit Outstandings, so the pro rata share of any New Lender of the
Acquisition Loan Commitments, Working Capital Loan Commitments, outstanding
Swing Loans and Letter of Credit Outstandings shall be the same. If the
Acquisition Loan Conversion Date, Working Capital Loan Commitment Termination
Date and the Stated Maturity Date with respect to Acquisition Loans and
Working Capital Loans shall not have been extended pursuant to CLAUSE (a)
above, the Borrower shall elect, by delivering to the Agent at least four
Business Days prior to the then scheduled Acquisition Loan Conversion Date
and Working Capital Loan Commitment Termination Date a written notice of
election, either (i) not to extend such Acquisition Loan Conversion Date and
Working Capital Loan Commitment Termination Date, in which case such
Acquisition Loan Conversion Date and Working Capital Loan Commitment
Termination Date shall not be so extended for any Lender irrespective of
whether such Lender has or has not sent its duly executed counterpart of the
Commitment Termination Date Extension Request or (ii) if the aggregate
Commitments of the Lenders who have delivered duly executed counterparts of a
Commitment Termination Date Extension Request represent at least 85% of the
Commitments, to extend such current Acquisition Loan Conversion Date and
Working Capital Loan Commitment Termination Date, in which case (x) the
Acquisition Loan Conversion Date, the Working Capital Loan Commitment
Termination Date and the Stated Maturity Date with respect to Acquisition
Loans and Working Capital Loans shall be extended for an additional period of
one year from the then scheduled Acquisition Loan Conversion Date and Working
Capital Loan Commitment Termination Date and (y) the Acquisition Loan
Commitments and Working Capital Loan Commitments shall be reduced on the then
scheduled Acquisition Loan Conversion Date and Working Capital Loan
Commitment Termination Date to an amount equal to (1) the aggregate of the
Acquisition Loan Commitments and the Working Capital Loan Commitments,
respectively, of the Lenders who have delivered executed counterparts of a
Commitment Termination Date Extension Request on or prior to the thirtieth
day preceding the then scheduled Acquisition Loan Conversion Date and Working
Capital Loan Commitment Termination Date plus (2) the aggregate Acquisition
Loan Commitments and Working Capital Loan Commitments, respectively, of the
New Lenders, and the Borrower shall pay (such payment to be made on such
Acquisition Loan Conversion Date and Working Capital Loan
36
Commitment Termination Date) in full all Acquisition Loans Working Capital
Loans plus all accrued interest and fees (including any amounts owed under
SECTION 5.4) owing to each such non-renewing Lender and each such
non-renewing Lender (to the extent that such Loans have not been acquired by
the New Lenders) shall no longer have any Acquisition Loan Commitment or
Working Capital Loan Commitment for purposes of this Agreement and each other
Loan Document. If the Borrower shall not have delivered such a written notice
of election to the Agent on or prior to the then scheduled Acquisition Loan
Conversion Date and Working Capital Loan Commitment Termination Date, such
Acquisition Loan Conversion Date and Working Capital Loan Termination Date
shall not be extended.
Section 3.2 INTEREST PROVISIONS. Interest on the outstanding
principal amount of Loans shall accrue and be payable in accordance with this
SECTION 3.2.
Section 3.2.1 RATES. Pursuant to an appropriately delivered
Borrowing Request or Continuation/Conversion Notice, the Borrower may elect
that Loans comprising a Borrowing accrue interest at a rate per annum:
(a) on that portion maintained from time to time as a Base
Rate Loan, equal to the sum of the Alternate Base Rate from time to time in
effect plus the Applicable Base Rate Margin;
(b) on that portion maintained as a Eurodollar Rate Loan,
during each Interest Period applicable thereto, equal to the sum of the
Eurodollar Rate (Reserve Adjusted) for such Interest Period plus the
Applicable Eurodollar Rate Margin.
The "EURODOLLAR RATE (RESERVE ADJUSTED)" means, relative to
any Loan to be made, continued or maintained as, or converted into, a
Eurodollar Rate Loan for any Interest Period, a rate per annum (rounded
upward, if necessary, to the nearest 1/16 of 1%) determined pursuant to the
following formula:
Eurodollar Rate Eurodollar Rate
(Reserve Adjusted) = ------------------------------------
1.00 - Eurodollar Reserve Percentage
The Eurodollar Rate (Reserve Adjusted) for any Interest Period for Eurodollar
Rate Loans will be determined by the Agent on the basis of the Eurodollar
Reserve Percentage in effect on, and the applicable rates furnished to and
received by the Agent from the Reference Lender, two Business Days before the
first day of such Interest Period.
"EURODOLLAR RATE" means, for each Interest Period for each
Eurodollar Rate Loan, the interest rate per annum obtained by the Agent as
offered quotation(s) that appear on the Xxxxxx'x Screen for Dollar deposits
for a period comparable to such Interest Period two Business Days before the
first day of such Interest Period. If at least two such offered quotations
appear on the Xxxxxx'x Screen, the Eurodollar Rate shall be the arithmetic
average (rounded upwards, if necessary, to the nearest 1/16th of 1%) of such
offered quotations, as determined by the Agent; provided that if no offered
quotations appear on the Xxxxxx'x Screen or if quotations are not given on
the Xxxxxx'x Screen for periods comparable to such Interest Period, then the
Eurodollar Rate
37
shall be the rate per annum (rounded upwards, if necessary, to the nearest
1/16 of 1%) which the Agent has determined to be the arithmetic average of
quotations by leading banks in the London interbank market at approximately
11:00 a.m. London time (or as soon thereafter as practicable) on the date two
Business Days prior to the first day of such Interest Period for the offering
of Dollar deposits having a term comparable to such Interest Period and in an
amount comparable to the principal amount of the Eurodollar Rate Loan to be
made.
"EUROCURRENCY RESERVE PERCENTAGE" means, relative to any
Interest Period for Eurodollar Rate Loans, the reserve percentage (expressed
as a decimal) equal to the maximum aggregate reserve requirements (including
all basic, emergency, supplemental, marginal and other reserves and taking
into account any transitional adjustments or other scheduled changes in
reserve requirements) specified under regulations issued from time to time by
the F.R.S. Board and then applicable to assets or liabilities consisting of
and including "Eurocurrency Liabilities", as currently defined in Regulation
D of the F.R.S. Board, having a term approximately equal or comparable to
such Interest Period.
"XXXXXX'X SCREEN" shall mean the display designated at page
"LIBO" on the Xxxxxx Monitor System or such other display on the Xxxxxx
Monitor System as may replace such page displaying the London interbank bid
or offered rates, as the case may be, as of 11:00 a.m., London time, on the
day on which the relevant determination is made.
All Eurodollar Rate Loans shall bear interest from and
including the first day of the applicable Interest Period to (but not
including) the last day of such Interest Period at the rate determined as
applicable to such Eurodollar Rate Loan.
Section 3.2.2 DEFAULT RATE. During the continuance of any
Event of Default, the Borrower shall pay, but only to the extent permitted by
law, interest (after as well as before judgment) on the Loans and other
monetary Obligations at a rate per annum (the "DEFAULT RATE") equal to the
Alternate Base Rate plus the Applicable Base Rate Margin plus 2% per annum.
Section 3.2.3 PAYMENT DATES. Interest accrued on each Loan
shall be payable, without duplication:
(a) on the Stated Maturity Date applicable to such Loan;
(b) with respect to any prepayment of a Loan in connection
with a reduction in the applicable Loan Commitment Amount, on the date of any
such prepayment;
(c) with respect to Base Rate Loans, on each Quarterly
Payment Date occurring after the date of the initial Borrowing hereunder;
(d) with respect to Eurodollar Rate Loans, on the last day
of each applicable Interest Period (and, if such Interest Period shall exceed
three months, on the three month anniversary of such Interest Period); and
38
(e) on that portion of any Loans the Stated Maturity Date
of which is accelerated pursuant to SECTION 9.2 or SECTION 9.3, immediately
upon such acceleration.
Interest accruing on the Loans or other monetary Obligations arising under
this Agreement or any other Loan Document during the continuance of any Event
of Default shall be payable upon demand.
Section 3.3 FEES. The Borrower agrees to pay the fees set forth in
this SECTION 3.3. All such fees shall be non-refundable.
Section 3.3.1 COMMITMENT FEE. The Borrower agrees to pay to
the Agent for the account of each Lender (including each New Lender under
SECTION 2.8), for the period (including any portion thereof when any of its
Commitments are suspended by reason of the Borrower's inability to satisfy
any condition of ARTICLE IV) commencing on the Refunding Effective Date and
continuing through the applicable Loan Commitment Termination Date, (a) a
commitment fee with respect to such Lender's Acquisition Loan Commitment
equal to (1) the rate as established on the Pricing Grid per annum for each
day times (2) the actual daily amount by which such Lender's Acquisition Loan
Commitment exceeded the sum of its outstanding Acquisition Loans and (b) a
commitment fee with respect to such Lender's Working Capital Loan Commitment
equal to (1) the rate as established on the Pricing Grid per annum for each
day times (2) the actual daily amount by which such Lender's Working Capital
Loan Commitment exceeded the sum of (x) its outstanding Working Capital Loans
(excluding Swing Loans) plus (y) its Working Capital Percentage of the Letter
of Credit Outstandings (excluding Commercial Letters of Credit). Such
commitment fees shall be payable by the Borrower in arrears on each Quarterly
Payment Date, commencing with the first such day following the Refunding
Effective Date, and on the applicable Loan Commitment Termination Date.
Section 3.3.2 LETTER OF CREDIT FACE AMOUNT FEES.
(a) The Borrower agrees to pay to the Agent, for the
account of the Working Capital Lenders, a fee for each Standby Letter of
Credit for the period from and including the date of the issuance of such
Standby Letter of Credit to (but not including) the date upon which such
Standby Letter of Credit expires, equal to the product of, the Applicable
Eurodollar Rate Margin per annum times the face amount of such Standby Letter
of Credit. Such fee shall be payable by the Borrower in arrears on each
Quarterly Payment Date, and on the Working Capital Loan Commitment
Termination Date for any period then ending for which such fee shall not
theretofore have been paid, commencing on the first such date after the
issuance of such Standby Letter of Credit.
(b) The Borrower agrees to pay to the Agent, for the
account of the Working Capital Lenders, a fee for each Commercial Letter of
Credit equal to the product of the Commercial Letter of Credit Risk
Participation Percentage times the face amount of such Commercial Letter of
Credit. Such fee shall be payable by the Borrower in arrears on each
Quarterly Payment Date, and on the Working Capital Loan Commitment
Termination Date for any period then ending for which such fee shall not
theretofore have been paid, commencing on the first such date after the
issuance of such Commercial Letter of Credit.
39
Section 3.3.3 LETTER OF CREDIT ISSUING FEE. The Borrower
agrees to pay to the Issuer for its own account, an issuing fee for each
Letter of Credit of 1/8 of 1% of the face amount of such Letter of Credit.
Such fee shall be payable by the Borrower upon issuance of such Letter of
Credit.
Section 3.3.4 ADDITIONAL FEES. The Borrower agrees to pay
to BofA those fees specified in the letter agreement dated August 27, 1998
between the Borrower and BofA at the times specified in such letter agreement.
ARTICLE IV
LETTERS OF CREDIT
Section 4.1 ISSUANCE REQUESTS. By delivering to the Agent
and the Issuer an Issuance Request, either by facsimile, by mail or
electronically, on or before 9:00 a.m., San Francisco time, the Borrower may
request, from time to time prior to the Working Capital Loan Commitment
Termination Date and on not less than one nor more than five Business Days'
notice, that the Issuer issue an irrevocable standby letter of credit (each,
a "STANDBY LETTER OF CREDIT") or an irrevocable commercial letter of credit
(each, a "COMMERCIAL LETTER OF CREDIT"), in each case in such form as may be
requested by the Borrower and approved by the Issuer, in support of
obligations of the Borrower or any Restricted Subsidiary incurred in the
ordinary course of business of the Borrower or the Restricted Subsidiaries
and which are described in such Issuance Request. Upon receipt of an Issuance
Request, the Agent shall promptly notify the Lenders thereof. Each Letter of
Credit shall by its terms:
(a) be issued in a Stated Amount which
(i) is at least $250,000;
(ii) does not exceed (or would not exceed) the then
Letter of Credit Availability; and
(iii) in the case of a Standby Letter of Credit to be
issued in connection with surety, worker's compensation and other
financial guaranties, when aggregated with all other outstanding
Standby Letters of Credit issued in connection with surety, worker's
compensation and other financial guaranties, does not exceed (or would
not exceed) $5,000,000;
(b) be stated to expire on a date (its "STATED EXPIRY
DATE") no later than the earlier of (i) 120 days from its date of issuance
(364 days from its date of issuance in the case of Standby Letters of Credit
issued in connection with worker's compensation requirements) and (ii) 30
days prior to the Working Capital Loan Commitment Termination Date; and
(c) on or prior to its Stated Expiry Date
40
(i) terminate immediately upon notice to the Issuer
thereof from the beneficiary thereunder that all obligations covered
thereby have been terminated, paid, or otherwise satisfied in full, or
(ii) reduce in part immediately and to the extent the
beneficiary thereunder has notified the Issuer thereof that the
obligations covered thereby have been paid or otherwise satisfied in
part.
So long as no Default has occurred and is continuing, by delivery to the
Issuer and the Agent of an Issuance Request at least three but not more than
five Business Days prior to the Stated Expiry Date of any Letter of Credit,
the Borrower may request the Issuer to extend the Stated Expiry Date of such
Letter of Credit for an additional period not to exceed the earlier of (x)
120 days from its date of extension (364 days in the case of Standby Letters
of Credit issued in connection with worker's compensation requirements) and
(y) 30 days prior to the Working Capital Loan Commitment Termination Date.
Section 4.2 ISSUANCES AND EXTENSIONS. On the terms and
subject to the conditions of this Agreement (including ARTICLE IV), the
Issuer shall issue Letters of Credit, and extend the Stated Expiry Dates of
outstanding Letters of Credit, in accordance with the Issuance Requests made
therefor. The Issuer will make available the original of each Letter of
Credit which it issues in accordance with the Issuance Request therefor to
the beneficiary thereof and will notify the beneficiary under any Letter of
Credit of any extension of the Stated Expiry Date thereof. In the event of a
conflict between the provisions of an Issuance Request and this Agreement,
this Agreement will govern.
Section 4.3 EXPENSES. The Borrower agrees to pay to the
Issuer all administrative expenses of the Issuer in connection with the
issuance, maintenance, modification (if any) and administration of each
Letter of Credit issued by the Issuer upon demand from time to time.
Section 4.4 OTHER LENDERS' PARTICIPATION. ERROR! BOOKMARK
NOT DEFINED. Each Letter of Credit issued pursuant to SECTION 4.2 shall,
effective upon its issuance and without further action, be issued on behalf
of all Lenders (including the Issuer thereof) PRO RATA according to their
respective Working Capital Percentages. Each Lender shall, to the extent of
its Working Capital Percentage, be deemed irrevocably to have participated in
the issuance of such Letter of Credit and shall be responsible to reimburse
promptly the Issuer thereof for Reimbursement Obligations which have not been
reimbursed by the Borrower in accordance with SECTION 4.5, or which have been
reimbursed by the Borrower but must be returned, restored or disgorged by the
Issuer for any reason, and each Lender shall, to the extent of its Working
Capital Percentage, be entitled to receive from the Agent a ratable portion
of the letter of credit fees received by the Agent pursuant to SECTION 3.3.2,
with respect to each Letter of Credit. In the event that the Borrower shall
fail to reimburse the Issuer, or if for any reason Working Capital Loans
shall not be made to fund any Reimbursement Obligation, all as provided in
SECTION 4.5 and in an amount equal to the amount of any drawing honored by
the Issuer under a Letter of Credit issued by it, or in the event the Issuer
must for any reason return or disgorge such
41
reimbursement, the Issuer shall promptly notify each Lender of the
unreimbursed amount of such drawing and of such Lender's respective
participation therein. Each Lender shall make available to the Issuer,
whether or not any Default shall have occurred and be continuing, an amount
equal to its respective participation in immediately available funds at the
office of the Issuer specified in such notice not later than 8:00 a.m., San
Francisco time, on the Business Day after the date notified by the Issuer. In
the event that any Lender fails to make available to the Issuer the amount of
such Lender's participation in such Letter of Credit as provided herein, the
Issuer shall be entitled to recover such amount on demand from such Lender
together with interest at the daily average Federal Funds Rate for three
Business Days (together with such other compensatory amounts as may be
required to be paid by such Lender to the Agent pursuant to the Rules for
Interbank Compensation of the Council on International Banking or the
Clearinghouse Compensation Committee, as the case may be, as in effect from
time to time) and thereafter at the Alternate Base Rate plus the Applicable
Base Rate Margin plus 2%. Nothing in this Section shall be deemed to
prejudice the right of any Lender to recover from the Issuer any amounts made
available by such Lender to the Issuer pursuant to this Section in the event
that it is determined by a court of competent jurisdiction that the payment
with respect to a Letter of Credit by the Issuer in respect of which payment
was made by such Lender constituted gross negligence or willful misconduct on
the part of the Issuer. The Issuer shall distribute to each other Lender
which has paid all amounts payable by it under this Section with respect to
any Letter of Credit issued by the Issuer such other Lender's Percentage of
all payments received by the Issuer from the Borrower in reimbursement of
drawings honored by the Issuer under such Letter of Credit when such payments
are received.
(b) Each Lender's obligation in accordance with this
Agreement to fund its participation in Letters of Credit issued by the
Issuer, shall, in each case, be absolute and unconditional and without
recourse to the Issuer and shall not be affected by any circumstance,
including (i) any set-off, counterclaim, recoupment, defense or other right
which such Lender may have against the Issuer, the Borrower or any other
Person for any reason whatsoever; (ii) the occurrence or continuance of a
Default, an Event of Default or a material adverse effect on the condition
(financial or otherwise), business, operations, assets or properties of the
Borrower and the Restricted Subsidiaries; or (iii) any other circumstance,
happening or event whatsoever, whether or not similar to any of the foregoing.
Section 4.5 DISBURSEMENTS. The Issuer will notify the
Borrower and the Agent promptly of the presentment for payment of any Letter
of Credit, together with notice of the date (a "DISBURSEMENT DATE") such
payment shall be made. Subject to the terms and provisions of such Letter of
Credit, the Issuer shall make such payment to the beneficiary (or its
designee) of such Letter of Credit. Prior to 10:00 a.m., San Francisco time,
on the Disbursement Date, the Borrower will reimburse the Issuer for all
amounts which the Issuer has notified the Borrower that it has disbursed
under the Letter of Credit. To the extent the Issuer is not reimbursed in
full in accordance with the third sentence of this Section, the Borrower's
Reimbursement Obligation shall accrue interest at a fluctuating rate
determined by reference to the Alternate Base Rate plus the Applicable Base
Rate Margin plus 2% per annum, payable on demand. In the event the Issuer is
not reimbursed by the Borrower on the Disbursement Date, or if the Issuer
must for any reason return or disgorge such reimbursement, the Lenders
(including
42
the Issuer) shall, on the terms and subject to the conditions of this
Agreement, fund the Reimbursement Obligation therefor by making, on the next
Business Day, Working Capital Loans which are Base Rate Loans as provided in
SECTION 3.2.1 (the Borrower being deemed to have given a timely Borrowing
Request therefor for such amount); PROVIDED, HOWEVER, for the purpose of
determining the availability of the Commitments to make Working Capital Loans
immediately prior to giving effect to the application of the proceeds of such
Working Capital Loans, such Reimbursement Obligation shall be deemed not to
be outstanding at such time.
Section 4.6 REIMBURSEMENT. The Borrower's obligation (a
"REIMBURSEMENT OBLIGATION") under SECTION 4.5 to reimburse the Issuer with
respect to each disbursement (including interest thereon), and each Lender's
obligation to make participation payments in each drawing which has not been
reimbursed by the Borrower, shall be absolute and unconditional under any and
all circumstances and irrespective of any setoff, counterclaim, or defense to
payment which the Borrower may have or have had against any Lender or any
beneficiary of a Letter of Credit, including any defense based upon the
occurrence of any Default, any draft, demand or certificate or other document
presented under a Letter of Credit proving to be forged, fraudulent, invalid
or insufficient, the failure of any disbursement to conform to the terms of
the applicable Letter of Credit (if, in the applicable Issuer's good faith
opinion, such disbursement is determined to be appropriate) or any
non-application or misapplication by the beneficiary of the proceeds of such
disbursement, or the legality, validity, form, regularity, or enforceability
of such Letter of Credit; PROVIDED, HOWEVER, that nothing herein shall
adversely affect the right of the Borrower to commence any proceeding against
the applicable Issuer for any wrongful disbursement made by the Issuer under
a Letter of Credit as a result of acts or omissions constituting gross
negligence or willful misconduct on the part of the Issuer.
Section 4.7 DEEMED DISBURSEMENTS. Upon the occurrence and
during the continuation of any Event of Default or the occurrence of the
Working Capital Loan Commitment Termination Date, an amount equal to that
portion of Letter of Credit Outstandings attributable to outstanding and
undrawn Letters of Credit (or in the event of a mandatory prepayment of a
Letter of Credit pursuant to SECTION 3.1, an amount equal to such mandatory
prepayment) shall, at the election of the Issuer acting on instructions from
the Required Lenders, and without demand upon or notice to the Borrower, be
deemed to have been paid or disbursed by the Issuer under such Letters of
Credit (notwithstanding that such amount may not in fact have been so paid or
disbursed), and, upon notification by the Issuer to the Agent and the
Borrower of its obligations under this Section, the Borrower shall be
immediately obligated to reimburse the Agent on behalf of the Issuer the
amount deemed to have been so paid or disbursed by the Issuer. Any amounts so
received by the Agent on behalf of the Issuer from the Borrower pursuant to
this Section shall be held as collateral security for the repayment of the
Borrower's obligations in connection with the Letters of Credit issued by the
Issuer. At any time when such Letters of Credit shall terminate and all
Obligations of the Issuer are either terminated or paid or reimbursed to the
Issuer in full, the Obligations of the Borrower under this Section shall be
reduced accordingly (subject, however, to reinstatement in the event any
payment in respect of such Letters of Credit is recovered in any manner from
the Issuer), and the Agent will return to the Borrower the excess, if any, of
43
(a) the aggregate amount deposited by the Borrower with
the Issuer and not theretofore applied by the Issuer to any Reimbursement
Obligation
OVER
(b) the aggregate amount of all Reimbursement Obligations
to the Issuer pursuant to this Section, as so adjusted.
At such time when all Events of Default shall have been cured or waived, the
Agent shall return to the Borrower all amounts then on deposit (other than
amounts attributable to a mandatory prepayment) with the Agent pursuant to
this Section. All amounts on deposit pursuant to this Section shall, until
their application to any Reimbursement Obligation or their return to the
Borrower, as the case may be, bear interest at the daily average Federal
Funds Rate from time to time in effect (net of the costs of any reserve
requirements, in respect of amounts on deposit pursuant to this Section,
pursuant to F.R.S. Board Regulation D), which interest shall be held by the
Agent for the account of the Issuer as additional collateral security for the
repayment of the Borrower's Obligations in connection with the Letters of
Credit issued by the Issuer.
SECTION 4.8 NATURE OF REIMBURSEMENT OBLIGATIONS. The
Borrower shall assume all risks of the acts, omissions, or misuse of any
Letter of Credit by the beneficiary thereof. Neither the Issuer nor any
Lender (except to the extent of its own gross negligence or willful
misconduct) shall be responsible for:
(a) the form, validity, sufficiency, accuracy, genuineness,
or legal effect of any Letter of Credit or any document submitted by any
party in connection with the application for and issuance of a Letter of
Credit, even if it should in fact prove to be in any or all respects invalid,
insufficient, inaccurate, fraudulent, or forged;
(b) the form, validity, sufficiency, accuracy, genuineness,
or legal effect of any instrument transferring or assigning or purporting to
transfer or assign a Letter of Credit or the rights or benefits, thereunder
or proceeds thereof in whole or in part, which may prove to be invalid or
ineffective for any reason;
(c) failure of the beneficiary to comply fully with
conditions required in order to demand payment under a Letter of Credit;
(d) errors, omissions, interruptions, or delays in
transmission or delivery of any messages, by mail, cable, telegraph, telex,
or otherwise; or
(e) any loss or delay in the transmission or otherwise of
any document or draft required in order to make a disbursement under a Letter
of Credit or of the proceeds thereof.
None of the foregoing shall affect, impair, or prevent the vesting of any of
the rights or powers granted the Issuer or any Lender hereunder. In
furtherance and extension, and not in limitation or derogation, of any of the
foregoing, any action taken or omitted to be taken by the Issuer in
44
good faith shall be binding upon the Borrower and shall not put the Issuer
under any resulting liability to the Borrower.
SECTION 4.9 INCREASED COSTS; INDEMNITY. If by reason of
(a) any change in applicable law, regulation, rule, decree
or regulatory requirement or any change in the interpretation or application
by any judicial or regulatory authority of any law, regulation, rule, decree
or regulatory requirement occurring after the Refunding Effective Date, or
(b) compliance by the Issuer or any Lender with any
direction, request or requirement made after the Refunding Effective Date
(whether or not having the force of law) of any governmental or monetary
authority, including Regulation D of the F.R.S. Board:
(i) the Issuer or any Lender shall be subject to any
tax (other than taxes on net income including franchise taxes on income
and franchises), levy, charge or withholding of any nature or to any
variation thereof or to any penalty with respect to the maintenance or
fulfillment of its obligations under this ARTICLE IV, whether directly
or by such being imposed on or suffered by the Issuer or any Lender;
(ii) any reserve, deposit or similar requirement is
or shall be applicable, imposed or modified in respect of any Letters
of Credit issued by the Issuer or participations therein purchased by
any Lender; or
(iii) there shall be imposed on the Issuer or any
Lender any other condition regarding this ARTICLE IV, any Letter of
Credit or any participation therein;
and the result of the foregoing is directly or indirectly to increase the
cost to the Issuer or such Lender of issuing, making or maintaining any
Letter of Credit or of purchasing or maintaining any participation therein,
or to reduce any amount receivable in respect thereof by the Issuer or such
Lender, when and in any such case the Issuer or such Lender may, at any time
after the additional cost is incurred or the amount received is reduced,
notify the Borrower thereof, and the Borrower shall within five days of
receipt of such notification pay on demand such amounts as the Issuer or
Lender may specify to be necessary to compensate the Issuer or Lender for
such additional cost or reduced receipt, together with interest on such
amount from the date demanded until payment in full thereof at a rate equal
at all times to the Alternate Base Rate plus the Applicable Base Margin plus
2% per annum; PROVIDED, HOWEVER, neither the Issuer nor any Lender may make
any demand for any amounts accrued for any period commencing more than ninety
days prior to the date of demand or, should such cost have accrued
retroactively, within ninety days of the determination of such cost. The
determination by the Issuer or Lender, as the case may be, of any amount due
pursuant to this Section, as set forth in a statement setting forth the
calculation thereof in reasonable detail, shall, in the absence of manifest
error, be final and conclusive and binding on all of the parties hereto. In
addition to amounts payable as elsewhere provided in this ARTICLE IV, the
Borrower hereby agrees to protect, indemnify, pay and save the Issuer
harmless from and against any and all claims, demands, liabilities, damages,
losses, costs,
45
charges and expenses (including reasonable attorneys' fees and allocated
costs of internal counsel) which the Issuer may incur or be subject to as a
consequence, direct or indirect, of
(c) the issuance of the Letters of Credit, other than as a
result of the gross negligence or willful misconduct of the Issuer as
determined by a court of competent jurisdiction, or
(d) the failure of the Issuer to honor a drawing under any
Letter of Credit as a result of any act or omission, whether rightful or
wrongful, of any present or future de jury or de facto government or
government authority.
ARTICLE V
CERTAIN EURODOLLAR RATE AND OTHER PROVISIONS
SECTION 5.1 EURODOLLAR RATE LENDING UNLAWFUL. If any Lender shall
determine (which determination shall, upon notice thereof to the Borrower and
the Lenders, be conclusive and binding on the Borrower) that after the
Refunding Effective Date the introduction of or any change in or in the
interpretation of any law makes it unlawful, or any central bank or other
government authority asserts that it is unlawful, for such Lender to make,
continue or maintain any Loan as, or to convert any Loan into, a Eurodollar
Rate Loan of a certain type, the obligations of such Lender to make,
continue, maintain or convert any such Loans shall, upon such determination,
forthwith be suspended until such Lender shall notify the Agent that the
circumstances causing such suspension no longer exist, and all Eurodollar
Rate Loans of such type shall automatically convert into Base Rate Loans at
the end of the then current Interest Periods with respect thereto or sooner,
if required by such law or assertion.
SECTION 5.2 DEPOSITS UNAVAILABLE. If the Agent shall have determined
that
(a) Dollar deposits in the relevant amount and for the
relevant Interest Period are not available to the Reference Lender in the
London interbank market; or
(b) by reason of circumstances affecting the London
interbank market, adequate means do not exist for ascertaining the interest
rate applicable hereunder to Eurodollar Rate Loans of such type,
then, upon notice from the Agent to the Borrower and the Lenders, the
obligations of all Lenders under SECTION 2.3 and SECTION 2.4 to make or
continue any Loans as, or to convert any Loans into, Eurodollar Rate Loans of
such type shall forthwith be suspended until the Agent shall notify the
Borrower and the Lenders that the circumstances causing such suspension no
longer exist.
SECTION 5.3 INCREASED EURODOLLAR RATE LOAN COSTS, ETC. The Borrower
agrees to reimburse each Lender for any increase in the cost to such Lender
of, or any reduction in the amount of any sum receivable by such Lender in
respect of, making, continuing or maintaining (or of its obligation to make,
continue or maintain) any Loans as, or of converting (or of its
46
obligation to convert) any Loans into, Eurodollar Rate Loans, in any case
from time to time by reason of:
(a) to the extent not included in the calculation of the
Eurodollar Rate (Reserve Adjusted), any reserve, special deposit, or similar
requirement against assets of, deposits with or for the account of, or credit
extended by such Lender, under or pursuant to any change in any law, treaty,
rule, regulation (including any F.R.S. Board regulation), or requirement from
that in effect on the Refunding Effective Date, or as the result of any
Regulatory Change; or
(b) any Regulatory Change which shall subject such Lender
to any tax (other than taxes on net income including franchise taxes based on
income, and franchises), levy, impost, charge, fee, duty, deduction, or
withholding or any kind whatsoever or change the taxation of any Loan made or
maintained as a Eurodollar Rate Loan and the interest thereon (other than any
change which affects, and to the extent that it affects, the taxation of net
income including franchise taxes based on income and franchises).
Such Lender shall promptly and in no event later than 90 days after its
knowledge of the occurrence of any such event notify the Agent and the
Borrower in writing of the occurrence of any such event, such notice to
state, in reasonable detail, the reasons therefor and the additional amount
required fully to compensate such Lender for such increased cost or reduced
amount; PROVIDED, HOWEVER, no Lender may make any demand for any such amounts
accrued under this SECTION 5.3 for any period commencing more than ninety
days prior to the receipt by the Borrower of such notice or, should such cost
have accrued retroactively, within ninety days of the determination by such
Lender of such cost. Such additional amounts shall be payable by the Borrower
directly to such Lender within five days of its receipt of such notice, and
such notice shall, in the absence of manifest error, be conclusive and
binding on the Borrower.
SECTION 5.4 FUNDING LOSSES. In the event any Lender shall incur any
loss or expense (including any loss or expense incurred by reason of the
liquidation or reemployment of deposits or other funds acquired by such
Lender to make, continue or maintain any portion of the principal amount of
any Loan as, or to convert any portion of the principal amount of any Loan
into, a Eurodollar Rate Loan) as a result of
(a) any conversion or repayment or prepayment of the
principal amount of any Eurodollar Rate Loans on a date other than the
scheduled last day of the Interest Period applicable thereto, whether
pursuant to SECTION 3.1 or otherwise;
(b) any Loans not being made as Eurodollar Rate Loans in
accordance with the Borrowing Request therefor; or
(c) any Loans not being continued as, or converted into,
Eurodollar Rate Loans in accordance with the Continuation/Conversion Notice
therefor,
then, upon the written notice of such Lender to the Borrower (with a copy to
the Agent), the Borrower shall, within five days of its receipt thereof, pay
directly to such Lender such amount
47
as will (in the reasonable determination of such Lender) reimburse such
Lender for such loss or expense. Such written notice (which shall include
calculations in reasonable detail) shall, in the absence of manifest error,
be conclusive and binding on the Borrower.
SECTION 5.5 INCREASED CAPITAL COSTS. If after the Refunding
Effective Date any change in, or the introduction, adoption, effectiveness,
interpretation, reinterpretation or phase-in of, any law or regulation,
directive, guideline, decision or request (whether or not having the force of
law) of any court, central bank, regulator or other government authority
affects or would affect the amount of capital required or expected to be
maintained by any Lender or any Person controlling such Lender, and such
Lender determines (in its sole and absolute discretion) that the rate of
return on its or such controlling Person's capital as a consequence of its
Commitments or the Loans made by such Lender is reduced to a level below that
which such Lender or such controlling Person could have achieved but for the
occurrence of any such circumstance, then, in any such case upon notice from
time to time by such Lender to the Borrower, the Borrower shall within five
days of its receipt thereof pay directly to such Lender additional amounts
sufficient to compensate such Lender or such controlling Person for such
reduction in rate of return. Such Lender shall promptly and in no event later
than ninety days after its knowledge of any such event notify the Agent and
the Borrower of the occurrence of any such event; PROVIDED, HOWEVER, no
Lenders may make any demand for any such amounts accrued under this SECTION
5.5 for any period commencing more than ninety days prior to the receipt by
the Borrower of any such notice or, should such cost have accrued
retroactively, within ninety days of the determination by such Lender of such
cost. A statement of such Lender as to any such additional amount or amounts
(including calculations thereof in reasonable detail) shall, in the absence
of manifest error, be conclusive and binding on the Borrower. In determining
such amount, such Lender may use any reasonable method of averaging and
attribution that it (in its sole and absolute discretion) shall deem
applicable.
SECTION 5.6 TAXES. Without duplication of any payments made under
any other provisions of this ARTICLE V, all payments by the Borrower of
principal of, and interest on, the Loans and all other amounts payable
hereunder shall be made free and clear of and without deduction for any
present or future income, excise, stamp or franchise taxes and other taxes,
fees, duties, withholdings or other charges of any nature whatsoever imposed
by any taxing authority, but excluding franchise taxes and taxes imposed on
or measured by any Lender's net income (including franchise taxes based upon
income) or receipts (such non-excluded items being called "TAXES"). In the
event that any withholding or deduction from any payment to be made by the
Borrower hereunder is required in respect of any Taxes pursuant to any
applicable law, rule or regulation, then the Borrower will:
(a) pay directly to the relevant authority the full amount
required to be so withheld or deducted;
(b) promptly forward to the Agent an official receipt or
other documentation satisfactory to the Agent evidencing such payment to such
authority; and
48
(c) pay to the Agent for the account of the Lenders such
additional amount or amounts as is necessary to ensure that the net amount
actually received by each Lender will equal the full amount such Lender would
have received had no such withholding or deduction been required; PROVIDED
that each Lender shall promptly and in no event later than 90 days after its
knowledge that any amount is payable under this CLAUSE (C) notify the Agent
and the Borrower of the same;
PROVIDED, HOWEVER, no Lender may make any demand for any such amounts accrued
under this SECTION 5.6 for any period commencing more than ninety days prior
to the receipt by the Borrower of any such notice or, should such cost have
accrued retroactively, within ninety days of the determination by such Lender
of such cost.
Moreover, if any Taxes are directly asserted against the Agent or
any Lender with respect to any payment received by the Agent or such Lender
hereunder, the Agent or such Lender may pay such Taxes and the Borrower will
pay on demand such additional amounts (including any penalties, interest or
expenses) as is necessary in order that the net amount received by such
person after the payment of such Taxes (including any Taxes on such
additional amount) shall equal the amount such person would have received had
not such Taxes been asserted.
If the Borrower fails to pay any Taxes when due to the appropriate
taxing authority or fails to remit to the Agent, for the account of the
respective Lenders, the required receipts or other required documentary
evidence, the Borrower shall indemnify the Lenders for any incremental Taxes,
interest or penalties that may become payable by any Lender as a result of
any such failure.
For purposes of this SECTION 5.6, a distribution hereunder by the Agent or
any Lender to or for the account of any Lender shall be deemed a payment by
the Borrower.
Each Lender that is organized under the laws of a jurisdiction other
than the United States shall, prior to the due date of any payments under the
Notes, (i) execute and deliver to the Borrower and the Agent, on or about the
first scheduled payment date in each Fiscal Year, one or more (as the
Borrower or the Agent may reasonably request) United States Internal Revenue
Service Forms 4224 or Forms 1001 or such other forms or documents (or
successor forms or documents), appropriately completed, as may be applicable
to establish the extent, if any, to which a payment to such Lender is exempt
from withholding or deduction of Taxes, and (ii) comply with the requirements
of SECTION 10.10.
SECTION 5.7 PAYMENTS, COMPUTATIONS, ETC. Unless otherwise expressly
provided, all payments by the Borrower pursuant to this Agreement, the Notes
or any other Loan Document shall be made by the Borrower to the Agent for the
pro rata account of the Lenders entitled to receive such payment. All such
payments required to be made to the Agent shall be made, without setoff,
counterclaim, recoupment or other deduction, not later than 11:00 a.m., San
Francisco time, on the date due, in immediately available funds, to such
account as the Agent shall specify from time to time by notice to the
Borrower. Funds received after that time shall be deemed to have been
received by the Agent on the next succeeding Business Day. The Agent shall
promptly remit in same day funds to each Lender its share, if any, of such
payments
49
received by the Agent for the account of such Lender. All interest (other
than interest computed at the Alternate Base Rate) and fees shall be computed
on the basis of the actual number of days (including the first day but
excluding the last day) occurring during the period for which such interest
or fee is payable over a year comprised of 360 days. Interest computed at the
Alternate Base Rate shall be computed on the basis of its actual number of
days (including the first day but excluding the last day) occurring during
the period for which such interest is payable over a year comprised of 365 or
366 days, as the case may be. Whenever any payment day which is not a
Business Day, such payment shall (except as otherwise required by CLAUSE (C)
of the definition of the term "INTEREST PERIOD" with respect to Eurodollar
Rate Loans) be made on the next succeeding Business Day and such extension of
time shall be included in computing interest and fees, if any, in connection
with such payment.
SECTION 5.8 SHARING OF PAYMENTS. If any Lender shall obtain any
payment or other recovery (whether voluntary, involuntary, by application of
setoff or otherwise) on account of any Loan (other than pursuant to the terms
of SECTION 5.3, 5.4 or 5.5) or Letter of Credit in excess of its PRO RATA
share of payments then or therewith obtained by all Lenders, such Lender
shall purchase from the other Lenders such participations in Loans made by
them and/or Letters of Credit as shall be necessary to cause such purchasing
Lender to share the excess payment or other recovery ratably with each of
them; PROVIDED, HOWEVER, that if all or any portion of the excess payment or
other recovery is thereafter recovered from such purchasing Lender, the
purchase shall be rescinded and each Lender which has sold a participation to
the purchasing Lender shall repay to the purchasing Lender the purchase price
to the ratable extent of such recovery together with an amount equal to such
selling Lender's ratable share (according to the proportion of
(a) the amount of such selling Lender's required repayment
to the purchasing Lender
TO
(b) the total amount so recovered from the purchasing
Lender)
of any interest or other amount paid or payable by the purchasing Lender in
respect of the total amount so recovered. The Borrower agrees that any Lender
so purchasing a participation from another Lender pursuant to this Section
may, to the fullest extent permitted by law, exercise all its rights of
payment (including pursuant to SECTION 5.9) with respect to such
participation as fully as if such Lender were the direct creditor of the
Borrower in the amount of such participation. If under any applicable
bankruptcy, insolvency or other similar law, any Lender receives a secured
claim in lieu of a setoff to which this Section applies, such Lender shall,
to the extent practicable, exercise its rights in respect of such secured
claim in a manner consistent with the rights of the Lenders entitled under
this Section to share in the benefits of any recovery on such secured claim.
SECTION 5.9 SETOFF. Each Lender shall, upon the occurrence of any
Default described in CLAUSES (A), (B) and, with respect to the Borrower and
Managing General Partner, (E) of SECTION 9.1.8 or any other Event of Default,
have the right to appropriate and apply to the
50
payment of the Obligations owing to it (whether or not then due), and (as
security for such Obligations) the Borrower hereby grants to each Lender a
continuing security interest in, any and all balances, credits, deposits,
accounts or moneys of the Borrower then or thereafter maintained with such
Lender; PROVIDED, HOWEVER, that any such appropriation and application shall
be subject to the provisions of SECTION 5.8. Each Lender agrees promptly to
notify the Borrower and the Agent after any such setoff and application made
by such Lender; PROVIDED, HOWEVER, that the failure to give such notice shall
not affect the validity of such setoff and application. The rights of each
Lender under this Section are in addition to other rights and remedies
(including other rights of setoff under applicable law or otherwise) which
such Lender may have.
SECTION 5.10 USE OF PROCEEDS. The Borrower shall (i) use the
proceeds of the Working Capital Loans, and request the issuance of Letters of
Credit, solely for working capital and for other general partnership purposes
and (ii) use the proceeds of the Acquisition Loans solely for purposes of
financing acquisitions by the Borrower and to finance capital expenditures
related to existing properties or future acquired businesses of the Borrower;
without limiting the foregoing, no proceeds of any Loan will be used to
acquire any equity security of a class which is registered pursuant to
Section 12 of the Exchange Act or any "margin stock", as defined in F.R.S.
Board Regulation U.
SECTION 5.11 RECOURSE. The Obligations of the Borrower to the Agent
and the Lenders are secured and rank pari passu with the Private Placement
Debt and the Parity Debt. All of the accounts receivable, inventory, customer
storage tanks (except tanks financed Pursuant to clause (e), (f) and (g) in
SECTION 8.2.2) of the Borrower and the Restricted Subsidiaries and all stock
of all Restricted Subsidiaries now or hereafter acquired by the Borrower (all
such accounts receivables, inventory, customer tanks and stock being called
the ("GENERAL COLLATERAL")) will be pledged to secure the Obligations, the
Private Placement Debt and the Parity Debt. In the event that the Borrower
obtains or creates any Restricted Subsidiaries, each such Restricted
Subsidiary must issue a guarantee of the Obligations, the Private Placement
Debt and the Parity Debt and each such guarantee will be in favor of the
Trustee and secured by a pledge of substantially all of the assets of a
similar nature to the General Collateral of such guaranteeing Restricted
Subsidiary (which together with the General Collateral may be referred to as
the "COLLATERAL").
SECTION 5.12 REPLACEMENT OF LENDERS. In the event any Lender shall
provide notice to the Agent pursuant to SECTION 4.9, 5.3, 5.5 or 5.6
hereunder, the Borrower shall be permitted to replace such Lender, PROVIDED,
HOWEVER, that such Lender's replacement shall agree to all the obligations
and conditions relating to an Assignee Lender contained in SECTION 11.11.1
hereto. Any such replacement shall be subject to the Agent's consent which
consent shall not be unreasonably withheld.
ARTICLE VI
CONDITIONS TO BORROWING
SECTION 6.1 CONDITIONS TO EFFECTIVENESS. The obligations of the
Lenders to fund the initial Borrowing and the obligation of the Issuer to
convert the Existing Letters
51
of Credit into Letters of Credit hereunder shall be subject to the prior or
concurrent satisfaction of each of the conditions precedent set forth in this
SECTION 6.1.
SECTION 6.1.1 RESOLUTIONS; INCUMBENCY. The Agent shall have
received each of the following documents:
(a) Copies of partnership authorizations for the Borrower
and resolutions of the board of directors of Cornerstone Sales & Service
Corporation, Cornerstone Holding, Flame and the Managing General Partner
authorizing the transactions contemplated hereby, certified as of the
Refunding Effective Date by the Secretary or an Assistant Secretary of
Cornerstone Sales & Service Corporation, Cornerstone Holding, Flame or the
Managing General Partner, as the case may be;
(b) A certificate of the Secretary or Assistant Secretary
of the Managing General Partner certifying the names and true signatures of
the officers of the Managing General Partner authorized to execute, deliver
and perform, as applicable, on behalf of the Borrower and the Managing
General Partner, this Agreement and all other Loan Documents to be delivered
by the Borrower and the Managing General Partner hereunder (upon which
certificate each Lender may conclusively rely until it shall have received a
further certificate of a Responsible Officer canceling or amending such prior
certificate); and
(c) A certificate of the Secretary or Assistant Secretary
of each of Cornerstone Sales & Service Corporation, Cornerstone Holding and
Flame certifying the names and true signatures of the officers of Cornerstone
Sales & Service Corporation, Cornerstone Holding or Flame, as the case may
be, authorized to execute, deliver and perform, as applicable, on behalf of
Cornerstone Sales & Service Corporation, Cornerstone Holding or Flame, as the
case may be, all Loan Documents to be delivered by Cornerstone Sales &
Service Corporation, Cornerstone Holding and Flame hereunder (upon which
certificate each Lender may conclusively rely until it shall have received a
further certificate of a Responsible Officer canceling or amending such prior
certificate).
SECTION 6.1.2 ORGANIZATION DOCUMENTS; GOOD STANDING. The
Agent shall have received each of the following documents:
(a) the articles or certificate of incorporation and the
bylaws of Cornerstone Sales & Service Corporation, Cornerstone Holding, Flame
and the Managing General Partner and the Certificate of Limited Partnership
and the Partnership Agreement of the Borrower, in each case as in effect on
the Refunding Effective Date, certified by the Secretary or Assistant
Secretary of Cornerstone Sales & Service Corporation, Cornerstone Holding,
Flame or the Managing General Partner, as the case may be, as of the
Refunding Effective Date; and
(b) a good standing and tax good standing certificate for
Cornerstone Sales & Service Corporation, Cornerstone Holding, Flame, the
Managing General Partner and the Borrower from the Secretary of State (or
similar, applicable Governmental Authority) of its state of incorporation or
organization, as applicable, and each other state designated by the Agent
52
where Cornerstone Holding, Flame, the Managing General Partner or the
Borrower conducts significant business, in each case as of a recent date.
SECTION 6.1.3 DELIVERY OF NOTES. The Agent shall have
received, for the account of each Lender, the Notes, duly executed and
delivered by an Authorized Officer of the Borrower.
SECTION 6.1.4 CLOSING CERTIFICATE. A certificate signed by
an Authorized Officer of the Borrower, dated as of the Refunding Effective
Date, stating that:
(a) the representations and warranties contained in Article
VII are true and correct on and as of such date, as though made on and as of
such date;
(b) no Default or Event of Default exists or would result
from the execution and delivery of this Agreement or the refunding of the
Existing Credit Agreement; and
(c) since June 30, 1998, there has not occurred any event
or circumstance that has resulted or could reasonably be expected to result
in a material adverse effect on the condition (financial or otherwise),
business, operations, assets or properties of the Borrower and the Restricted
Subsidiaries (taken as a whole).
SECTION 6.1.5 NOTE AGREEMENT. The Borrower and the Required
Holders (as defined in the Note Agreement) shall have amended the Note
Agreement in substantially the form of EXHIBIT I.
SECTION 6.1.6 INTERCREDITOR AGREEMENT. The Agent shall have
received a First Amendment to Intercreditor and Trust Agreement, duly
executed and delivered by the Borrower and the Required Percentage (as
defined in the Intercreditor Agreement), in substantially the form of EXHIBIT
G. All actions necessary for the Loans hereunder to constitute "Parity Debt"
under, and as defined in, the Intercreditor Agreement shall have been taken,
including (x) the delivery of an Officers' Certificate by the Borrower to the
Trustee specifying the date and principal amount of each Note issued by the
Borrower hereunder and the name, address and taxpayer identification number
of the registered holder thereof and stating that such Note is being issued
pursuant to a Parity Debt Agreement and that such Note is entitled to the
benefits of the Intercreditor Agreement and of the Security and is subject to
the terms of the Intercreditor Agreement and (y) the delivery of a duly
executed counterpart to the Intercreditor Agreement by each Lender to each of
the other parties to the Intercreditor Agreement.
SECTION 6.1.7 PERMITS. All permits, licenses and regulatory
approvals required to continue operations shall have been obtained except
those which the failure to obtain would not have a material adverse effect on
the business or operations of the Borrower.
SECTION 6.1.8 OPINION OF COUNSEL. The Agent shall have
received opinions, dated the Refunding Effective Date and addressed to the
Agent and all Lenders, from (a) McCutchen, Doyle, Xxxxx & Xxxxxxx, LLP,
special counsel to the Borrower, in substantially
53
the form of EXHIBIT J-1 and (b) Xxxxxx, Xxxxxxxxxx & Xxxxxxxxx LLP, special
counsel to the Agent, in substantially the form of EXHIBIT J-2.
SECTION 6.1.9 CLOSING FEES; EXPENSES, ETC. The Agent shall
have received for its own account, or for the account of each Lender, as the
case may be, all fees, costs and expenses due and payable pursuant to
SECTIONS 3.3.4 and 11.3, if then invoiced.
SECTION 6.1.10 COMPLIANCE CERTIFICATE. A certificate of the
chief financial Authorized Officer of the Borrower demonstrating compliance
with the covenants contained in SECTIONS 8.2.2, 8.2.4, 8.2.5 AND 8.2.6.
SECTION 6.1.11 INSURANCE CERTIFICATE. The Agent shall have
received a certificate of the Managing General Partner stating that all
required insurance policies are in full force and effect.
SECTION 6.1.12 SOLVENCY CERTIFICATE. The chief financial
Authorized Officer of either the Borrower or the Managing General Partner
shall have delivered to the Agent a solvency certificate dated the Refunding
Effective Date, substantially in the form of EXHIBIT M.
SECTION 6.1.13 PAYMENTS UNDER EXISTING CREDIT AGREEMENT.
All principal, interest, fees and other amounts payable under the Existing
Credit Agreement and the other Loan Documents (as defined in the Existing
Credit Agreement) shall have been paid in full by the Borrower.
SECTION 6.1.14 TERMINATION OF EXISTING CREDIT AGREEMENT.
The Existing Credit Agreement and all Commitments thereunder shall have been
terminated in their entirety.
SECTION 6.1.15 NEW SUBSIDIARIES. (a) The Agent shall have
received a Supplemental Agreement substantially in the form of Exhibit B to
the Intercreditor Agreement, duly executed and delivered by Flame, (b) the
Agent shall have received a Supplemental Agreement substantially in the form
of Exhibit B to the Intercreditor Agreement, duly executed and delivered by
Cornerstone Holding, (c) the Agent shall have received a Supplemental
Agreement substantially in the form of Exhibit B to the Intercreditor
Agreement, duly executed and delivered by Cornerstone Sales & Service
Corporation, (d) the Trustee shall have received all of the certificates
representing the capital stock of Flame and Cornerstone Holding, in each case
in a suitable form for transfer by delivery, duly endorsed and accompanied by
duly executed instruments of transfer or assignment in blank and by any
required transfer tax stamps, (e) the Agent shall have received a Guaranty,
duly executed and delivered by Flame, Cornerstone Holding and Cornerstone
Sales & Service Corporation and (f) the Agent shall have received Uniform
Commercial Code financing statements (Form UCC-1), duly executed by each of
Cornerstone Sales & Service Corporation, Cornerstone Holding and Flame,
naming Cornerstone Sales & Service Corporation, Cornerstone Holding or Flame,
as the case may be, as the debtor and the Trustee as the secured party, or
other similar instruments or documents, to be filed under the Uniform
Commercial Code of all jurisdictions as may be necessary or, in the opinion
of the Agent, desirable to perfect the security interest of the Trustee
pursuant to the Security Agreement.
54
Section 6.1.16 OTHER DOCUMENTS. The Agent and each Lender
shall have received such other approvals, opinions, documents or materials as
the Agent or such Lender may reasonably request.
Section 6.2 ALL BORROWINGS AND ISSUANCES OF LETTERS OF CREDIT. The
obligation of each Lender to fund any Loan on the occasion of any Borrowing
(including the initial Borrowing) and the obligation of the Issuer to issue
any Letters of Credit shall be subject to the satisfaction of each of the
conditions precedent set forth in this SECTION 6.2.
Section 6.2.1 COMPLIANCE WITH WARRANTIES; NO DEFAULT, ETC.
Both before and after giving effect to any Borrowing and the issuance of any
Letter of Credit (but, if any Default of the nature referred to in SECTION
9.1.4 shall have occurred with respect to any other Indebtedness, without
giving effect to the application, directly or indirectly, of the proceeds
thereof) the following statements shall be true and correct:
(a) the representations and warranties set forth in ARTICLE
VII (excluding, however, those contained in SECTION 7.8) and the Security
Agreement shall be true and correct with the same effect as if then made
(unless stated to relate solely to an earlier date, in which case such
representations and warranties shall be true and correct as of such earlier
date); and
(b) except as disclosed by the Borrower to the Agent and
the Lenders pursuant to SECTION 7.8
(i) no labor controversy, litigation, arbitration or
governmental investigation or proceeding shall be pending or, to the
knowledge of the Borrower, threatened against the Borrower or any
Subsidiary which is reasonably likely to materially adversely affect
the consolidated business, operations, assets, revenues, or properties
of the Borrower and the Restricted Subsidiaries (taken as a whole) or
which purports to affect the legality, validity or enforceability of
this Agreement, the Notes, the Security Agreement or any other Loan
Document;
(ii) no development shall have occurred in any labor
controversy, litigation, arbitration or governmental investigation or
proceeding disclosed pursuant to SECTION 7.8 which is reasonably likely
to have a material adverse effect on the condition (financial or
otherwise), businesses, operations, assets or properties of the
Borrower and the Restricted Subsidiaries (taken as a whole); and
(iii) since the date of the financial statements
described in SECTION 7.6, and for any determination after the delivery
of the first financial statements pursuant to SECTION 8.1.1(b), since
the date of such financial statements (if such financial statements
shall be satisfactory to the Required Lenders), there has been no
material adverse change in the condition (financial or otherwise),
business, operations, assets or properties of the Borrower and
Subsidiaries (taken as a whole);
55
(c) no Default or Event of Default shall have then occurred
and be continuing; and
(d) all Loans made by the Lenders and Letters of Credit
issued by the Issuer under this Agreement are permitted to be incurred under
Section 10.1 of the Note Agreements and constitute Parity Debt under, and as
defined in, the Intercreditor Agreement.
Section 6.2.2 BORROWING REQUEST. The Agent shall have
received a Borrowing Request, Issuance Request or request for a Swing Line
pursuant to SECTION 2.7, as the case may be, for such Borrowing or issuance
of such Letter of Credit, as the case may be. Each of the delivery of a
Borrowing Request, Issuance Request or request for a Swing Line pursuant to
SECTION 2.7 and the acceptance by the Borrower of the proceeds of such
Borrowing or the Issuance of the Letter of Credit, as applicable, shall
constitute a representation and warranty by the Borrower that on the date of
such Borrowing (both immediately before and after giving effect to such
Borrowing and the application of the proceeds thereof) or the issuance of the
Letter of Credit, as applicable, each of the statements made in SECTION 6.2.1
is true and correct.
Section 6.2.3 SATISFACTORY LEGAL FORM. All documents
executed or submitted pursuant hereto by or on behalf of the Borrower, any
other Obligor or any Subsidiary shall be satisfactory in form and substance
to the Agent and its counsel; the Agent and its counsel shall have received
all information, approvals, opinions, documents or instruments as the Agent
or its counsel may reasonably request.
ARTICLE VII
REPRESENTATIONS AND WARRANTIES
In order to induce the Lenders and the Agent to enter into this
Agreement and to make Loans hereunder, the Borrower represents and warrants
unto the Agent and each Lender as set forth in this ARTICLE VII.
Section 7.1 ORGANIZATION, ETC. ERROR! BOOKMARK NOT DEFINED. The
Borrower is a limited partnership duly organized, validly existing and in
good standing under the Delaware Revised Uniform Limited Partnership Act and
has all requisite partnership power and authority to own and operate its
properties, to conduct its business as conducted on the Refunding Effective
Date, to enter into this Agreement, the Notes and the other Loan Documents to
which it is a party, and to carry out the terms of this Agreement, the Notes
and such other Loan Documents.
(b) The Managing General Partner is a corporation duly
organized, validly existing and in good standing under the law of the State
of California and has all requisite corporate power and authority to own and
operate its properties, to conduct its business as conducted on the Refunding
Effective Date, and to execute and deliver as a general partner of the
Borrower this Agreement, the Notes and the other Loan Documents to which the
Borrower is a party.
56
(c) Each Restricted Subsidiary is duly organized, validly
existing and in good standing under the laws of the state of its organization
and has all requisite power and authority to own and operate its properties,
to conduct its business as conducted on the Refunding Effective Date or as
otherwise in compliance with SECTION 8.2.1, and to execute, deliver and
perform the Loan Documents to which it is a party.
(d) The Public Partnership is a limited partnership duly
organized, validly existing and in good standing under the Delaware Revised
Uniform Limited Partnership Act and has all requisite partnership power and
authority to own and operate its properties, to conduct its business as
conducted on the Refunding Effective Date, and to execute, deliver and carry
out the terms of the Loan Documents to which it is a party.
Section 7.2 PARTNERSHIP INTERESTS. As of the Refunding Effective
Date, the only general partners of the Borrower are the General Partners,
which own an aggregate 1.0101% general partner interest in the Borrower. As
of the Refunding Effective Date, the only limited partner of the Borrower is
the Public Partnership, which owns a 98.9899% limited partner interest in the
Borrower. The Borrower does not have any other partners as of the Refunding
Effective Date. Except as disclosed in Item 7.2 ("Subsidiaries") of the
Disclosure Schedule, the Borrower does not have any Subsidiaries or any
Investments in any Person (other than Investments of the types permitted in
SECTION 8.2.5).
Section 7.3 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 General Partner and each Restricted
Subsidiary is qualified or registered and is in good standing as a foreign
corporation for the transaction of business, in the jurisdictions set forth
in Item 7.3 ("Jurisdictions") of the Disclosure Schedule which are the only
jurisdictions, on the date hereof, 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 not be reasonably expected to have a
material adverse effect on the condition (financial or otherwise), business,
operations, assets or properties of the Borrower and the Restricted
Subsidiaries taken as a whole. Each of the General Partners, the Restricted
Subsidiaries and the Borrower has taken all necessary partnership or
corporate action to authorize the execution, delivery and performance by it
of this Agreement, the Notes and each other Loan Document to which is a
party. Each of the General Partners, and the Restricted Subsidiaries has duly
executed and delivered each of this Agreement, the Notes and the other Loan
Documents to which it is a party, and each of them constitutes its legal,
valid and binding obligation enforceable in accordance with its terms, except
as such enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium and similar laws of general application relating
to or affecting the rights and remedies of creditors and by general equitable
principles, regardless of whether such enforceability is considered in a
proceeding in equity or at law.
Section 7.4 DUE AUTHORIZATION; NON-CONTRAVENTION; ETC. The
execution, delivery and performance by the Borrower and each Restricted
Subsidiary of this Agreement, the Notes and each other Loan Document required
to be executed by it hereunder are within the
57
Borrower's and such Restricted Subsidiary's powers, have been duly authorized
by all necessary action, and do not:
(a) contravene the Borrower's or any Subsidiary's Organic
Documents;
(b) contravene any contractual restriction, law or
governmental regulation or court decree or order binding on or affecting the
Borrower or such Restricted Subsidiary; or
(c) result in, or require the creation or imposition of,
any Lien on any of the Borrower's or such Restricted Subsidiary's properties,
except as contemplated hereby.
Section 7.5 GOVERNMENT APPROVALS; REGULATIONS, ETC. Except as set
forth in Item 7.5 of the Disclosure Schedule, no authorization or approval or
other action, by, and no notice to or filing with, any government authority
or regulatory body or other Person (that has not been obtained) is required
for the due execution, delivery or performance by the Borrower or any
Subsidiary of this Agreement, the Notes or any other Loan Document to which
it is a party. All such required authorizations and approvals have been
obtained and such required notices and filings have been made. Neither the
Borrower nor any Subsidiary is an "investment company" within the meaning of
the Investment Company Act of 1940, as amended, or a "holding company", or a
"subsidiary company" of a "holding company", or an "affiliate" of a "holding
company" or of a "subsidiary company" of a "holding company", within the
meaning of the Public Utility Holding Company Act of 1935, as amended.
Section 7.6 BUSINESS; FINANCIAL STATEMENTS. The audited consolidated
financial statements of the Borrower and the Restricted Subsidiaries dated
June 30, 1998 and the unaudited consolidated financial statements of the
Borrower and the Restricted Subsidiaries dated July 31, 1998, in each case
together with the related consolidated statements of income or operations,
shareholders' equity and cash flows for the fiscal periods ended on those
respective dates:
(a) were prepared in accordance with GAAP consistently
applied throughout the period covered thereby, except as otherwise expressly
noted therein, subject to ordinary, good faith year end audit adjustments; and
(b) fairly present the financial condition of the Borrower
and its Subsidiaries as of the date thereof and results of operations for the
period covered thereby.
Section 7.7 NO MATERIAL ADVERSE CHANGE. Since the date of the
financial statements described in SECTION 7.6 or, for any determination after
the delivery of the first financial statements pursuant to SECTION 8.1.1(b),
since the date of such financial statements (if such financial statements
shall be satisfactory to the Required Lenders), there has been no material
adverse change in the condition (financial or otherwise), business,
operations, assets or properties of the Borrower and the Restricted
Subsidiaries (taken as a whole).
58
Section 7.8 LITIGATION; LABOR CONTROVERSIES, ETC. There is no
pending or, to the knowledge of the Borrower or any Subsidiary, threatened
litigation, action, proceeding, or labor controversy affecting the Borrower
or any Subsidiary, or any of their respective properties, businesses, assets
or revenues, which has, or is reasonably likely to have, a material adverse
effect on the condition (financial or otherwise), business, operations,
assets or properties of the Borrower and the Restricted Subsidiaries (taken
as a whole) or which purports to affect the legality, validity or
enforceability of this Agreement, the Notes or any other Loan Document,
except as disclosed in Item 7.8 ("Litigation") of the Disclosure Schedule.
Section 7.9 OWNERSHIP OF PROPERTIES. The Borrower and each
Restricted Subsidiary have (i) title to all of their respective assets
constituting real property owned in fee simple, (ii) good and valid leasehold
interests in their respective assets constituting leased real property,
pursuant to which they enjoy undisturbed possession thereof, except for
defects in, or lack of recorded title and exceptions to, leasehold interests
would not, in the aggregate, be reasonably expected to have a material
adverse effect on the condition (financial or otherwise), business,
operations, assets or properties of the Borrower and the Restricted
Subsidiaries (taken as a whole), and (iii) sufficient title to the portion of
their respective assets constituting personal property (including patents,
trademarks, trade names, service marks, copyrights and other intellectual
property rights) reasonably necessary for the use and operation of such
personal property as it has been used in the past and as it is proposed to be
used, in each case subject to no Liens except as permitted pursuant to
SECTION 8.2.3.
Section 7.10 TAXES. The Borrower and each Subsidiary, and any
predecessor entity thereto, have filed all tax returns and reports required
by law to have been filed by them and have paid all taxes and governmental
charges thereby shown to be owing, except (a) any such taxes or charges which
are being diligently contested in good faith by appropriate proceedings and
for which adequate reserves in accordance with GAAP shall have been set aside
on its books, and (b) where the failure to do so would not reasonably be
expected to have a material adverse effect on the condition (financial or
otherwise), business, operations, assets or properties of the Borrower and
its Subsidiaries (taken as a whole).
Section 7.11 PENSION AND WELFARE PLANS. During the
twelve-consecutive-month period prior to the date of the execution and
delivery of this Agreement and prior to the date of any Borrowing hereunder,
no steps have been taken to terminate any Pension Plan, and no contribution
failure has occurred with respect to any Pension Plan sufficient to give rise
to a Lien under section 302(f) of ERISA. No condition exists or event or
transaction has occurred with respect to any Pension Plan which has, or is
reasonably likely to have, a material adverse effect on the condition
(financial or otherwise), business, operations, assets or properties of the
Borrower and the Restricted Subsidiaries (taken as a whole). Except as
disclosed in Item 7.11 ("Employee Benefit Plans") of the Disclosure Schedule
no Borrower nor any member of the Controlled Group has any contingent
liability with respect to any post-retirement benefit under a Welfare Plan,
other than liability for continuation coverage described in Part 6 of Title I
of ERISA.
59
Section 7.12 ENVIRONMENTAL WARRANTIES. Except as set forth in Item
7.12 ("Environmental Matters") of the Disclosure Schedule:
(a) all facilities and property (including underlying
groundwater) owned, leased, used, occupied or controlled (in whole or in
part) by the Borrower or any Subsidiary have been, and continue to be, owned,
leased, used, occupied or controlled by the Borrower or such Subsidiary in
compliance with all Environmental Laws except where the failure of any of the
foregoing to be done could not reasonably be expected to have a material
adverse effect on the condition (financial or otherwise), business,
operations, assets or properties of the Borrower and the Restricted
Subsidiaries (taken as a whole);
(b) to the Borrower's and each Subsidiary's knowledge,
there have been no past, and there are no pending or threatened
(i) claims, complaints, notices or requests for
information received by the Borrower or any Subsidiary with respect to
any alleged violation of any Environmental Law, or
(ii) complaints, notices or inquiries to the Borrower
or any Subsidiary regarding potential liability under any Environmental
Law;
WHICH IN EITHER THE CASE OF CLAUSE (I) OR (II) ABOVE, COULD BE REASONABLY
EXPECTED TO HAVE A MATERIALLY ADVERSE EFFECT ON THE CONDITION (FINANCIAL OR
OTHERWISE), BUSINESS, OPERATIONS, ASSETS OR PROPERTIES OF THE BORROWER AND
THE RESTRICTED SUBSIDIARIES (TAKEN AS A WHOLE);
(c) to the Borrower's and each Subsidiary's knowledge there
have been no Releases of Hazardous Materials at, on or under any property now
or previously owned or leased by the Borrower or any Subsidiary that, singly
or in the aggregate, have, or are reasonably likely to have, a material
adverse effect on the condition (financial or otherwise), business,
operations, assets or properties of the Borrower and the Restricted
Subsidiaries (taken as a whole);
(d) the Borrower and each Subsidiary have been issued and
are in material compliance with all permits, certificates, approvals,
licenses and other authorizations relating to environmental matters and
necessary or desirable for their businesses the absence of or non compliance
with which would be materially adverse, and no order has been issued, no
Environmental Claim has been made, no penalty has been assessed and, to the
knowledge of the Borrower or any Subsidiary, no investigation or review has
occurred or is pending or threatened by any Person with respect to any
alleged failure by the Borrower or any Subsidiary to have any permit,
certificate, approval, license or other governmental authorization required
under applicable Environmental Laws in connection with the conduct of the
business or operations of any of them or to comply with any Environmental
Laws or with respect to any presence, generation, treatment, storage,
recycling, transportation, discharge, disposal or release of any hazardous
material generated by any Borrower, or any Subsidiary, and there are no facts
or circumstances in existence which could reasonably be expected to form the
basis for any such order, Environmental Claim, penalty or investigation in
each case, with respect to all of the foregoing matters, except where the
failure of any of the foregoing to be done could not
60
reasonably be expected to have a material adverse effect on the condition
(financial or otherwise), business, operations, assets or properties of the
Borrower and the Restricted Subsidiaries (taken as a whole);
(e) to the Borrower's and each Subsidiary's knowledge no
property now or previously owned or leased by the Borrower or any Subsidiary
is listed or proposed for listing (with respect to owned property only) on
the National Priorities List pursuant to CERCLA, on the CERCLIS or on any
similar state list of sites requiring investigation or clean-up where the
circumstances giving rise to such listing or proposed listing or the effect
of such listing or proposed listing has, or is reasonably likely to have, a
material adverse effect on the condition (financial or otherwise), business,
operations, assets or properties of the Borrower and the Restricted
Subsidiaries (taken as a whole);
(f) to the Borrower's and each Subsidiary's knowledge there
are no underground storage tanks, active or abandoned, including petroleum
storage tanks, on or under any property now or previously owned, leased,
used, occupied or controlled (in whole or in part) by the Borrower or any
Subsidiary that, singly or in the aggregate, have, or are reasonably likely
to have, a material adverse effect on the condition (financial or otherwise),
business, operations, assets or properties of the Borrower and the Restricted
Subsidiaries (taken as a whole);
(g) to the Borrower's and each Subsidiary's knowledge, no
Borrower nor any Subsidiary has directly transported or directly arranged for
the transportation of any Hazardous Material to any location, including
locations which are listed or proposed for listing on the National Priorities
List pursuant to CERCLA, on the CERCLIS or on any similar state list or which
is the subject of federal, state or local enforcement actions or other
investigations which, or otherwise which, is reasonably likely to have a
material adverse effect on the condition (financial or otherwise), business,
operations, assets or properties of the Borrower and the Restricted
Subsidiaries (taken as a whole);
(h) to the Borrower's and each Subsidiary's knowledge there
are no polychlorinated biphenyls or friable asbestos present at any property
now or previously owned, leased, used, occupied or controlled (in whole or in
part) by the Borrower or any Subsidiary that, singly or in the aggregate,
have, or may reasonably be expected to have, a material adverse effect on the
condition (financial or otherwise), business, operations, assets or
properties of the Borrower and the Restricted Subsidiaries (taken as a
whole); and
(i) to the Borrower's and each Subsidiary's knowledge, no
conditions exist at, on or under any property now or previously owned,
leased, used, occupied or controlled (in whole or in part) by the Borrower or
any Subsidiary which, with the passage of time, or the giving of notice or
both, would give rise to a material adverse effect on the condition
(financial or otherwise), business, operations, assets or properties of the
Borrower and the Restricted Subsidiaries (taken as a whole).
Section 7.13 REGULATIONS U AND X. The Borrower is not engaged in the
business of extending credit for the purpose of buying or carrying margin
stock, and no proceeds of any Loans will be used for a purpose which
violates, or would be inconsistent with, F.R.S. Board
61
Regulation U or X. Terms for which meanings are provided in F.R.S. Board
Regulation U or X or any regulations substituted therefor, as from time to
time in effect, are used in this Section with such meanings.
Section 7.14 ACCURACY OF INFORMATION. All factual information
heretofore or contemporaneously furnished by or on behalf of the Borrower in
writing to the Agent or any Lender for purposes of or in connection with this
Agreement or any transaction contemplated hereby which were furnished to the
Agent and all other such factual information hereafter furnished by or on
behalf of the Borrower or any Subsidiary to the Agent or any Lender will be
true and accurate in every material respect on the date as of which such
information is dated or certified and as of the date of execution and
delivery of this Agreement by the Agent and such Lender, and such
information, when all such information is considered as a whole, is not, or
shall not be, as the case may be, incomplete by omitting to state any
material fact necessary to make such information not misleading.
Section 7.15 SOLVENCY. The Borrower, both before and after giving
effect to any Borrowing hereunder (including the initial Borrowings), (i) is
not "insolvent" (as such term is defined in ss.101(31) (A) of the Bankruptcy
Code), (ii) is able to pay its debts and Other liabilities, contingent
obligations and commitments as they mature, and (iii) does not have
unreasonably small capital for the business in which it is engaged or for any
business or transaction in which it is about to engage.
Section 7.16 PRIVATE PLACEMENT DEBT REPRESENTATIONS. Each
representation and warranty made by the Borrower pursuant to the Note
Agreement was true and correct in all material respects when made.
Section 7.17 COMPLIANCE WITH LAWS. Neither the Borrower nor any
Restricted Subsidiary is in violation of any statute, law or governmental
rule or regulation or court or arbitrator's judgment, decree or order, in any
such case, which either individually or in the aggregate, assuming disclosure
of all known facts, would reasonably be expected to have a material adverse
effect on the condition (financial or otherwise), business, operations,
assets or properties of the Borrower and the Restricted Subsidiaries (taken
as a whole).
Section 7.18 YEAR 2000. The Borrower and its Subsidiaries have
reviewed the areas within their business and operations which could be
adversely affected by, and have developed or are developing a program to
address on a timely basis, the Year 2000 Problem. Based on such review and
program, the Borrower represents and warrants that (a) the Borrower's and its
Subsidiaries' computer based systems are Year 2000 Compliant or will be Year
2000 Compliant not later than December 30, 1999 and (b) the Year 2000 Problem
will not result in a Default or have a material adverse effect on the
condition (financial or otherwise), business, operations, assets or
properties of the Borrower and the Restricted Subsidiaries (taken as a
whole). The Borrower and its Subsidiaries, to the best of the Borrower's and
its Subsidiaries' knowledge, have worked or will work with their relevant
customers, suppliers and other service providers to seek to prevent any Year
2000 Problem in such customers', suppliers' and other
62
service providers' systems from having a material adverse effect on the
Borrower and its Subsidiaries (taken as a whole).
ARTICLE VIII
COVENANTS
Section 8.1 AFFIRMATIVE COVENANTS. The Borrower agrees with the
Agent and each Lender that, until all Commitments have terminated and all
Obligations have been paid and performed in full, the Borrower will perform
the obligations set forth in this SECTION 8.1.
Section 8.1.1 FINANCIAL INFORMATION, REPORTS, NOTICES, ETC.
The Borrower will furnish, or will cause to be furnished, to each Lender and
the Agent copies of the following financial statements, reports, notices and
information:
(a) as soon as practicable, but in any event within 60 days
after the end of each of the first three quarterly fiscal periods in each
Fiscal Year of the Borrower, consolidated (and to the extent that such are
being prepared, consolidating) balance sheets of the Borrower and the
Restricted Subsidiaries as at the end of such period and the related
consolidated (and, as to statements of income and cash flows, if applicable
and to the extent that such are being prepared, consolidating) statements of
income, surplus or partners' capital, cash flows and stockholders' equity of
the Borrower and the Restricted Subsidiaries (i) for such period and (ii) (in
the case of the second and third quarterly periods) for the period from the
beginning of the current Fiscal Year to the end of such quarterly period,
setting forth in each case in comparative form the consolidated and, where
applicable and as appropriate, consolidating figures for the corresponding
periods of the previous Fiscal Year, all in reasonable detail and certified
by an authorized financial officer of the Managing General Partner as
presenting fairly, in all material respects, the information contained
therein (subject to changes resulting from normal year-end adjustments), in
accordance with GAAP applied on a basis consistent with prior fiscal periods,
provided that delivery within the time period specified above of copies of
the Public Partnership's quarterly report on Form 10-Q prepared in compliance
with the requirements therefor and filed with the Securities and Exchange
Commission shall be deemed to satisfy the requirements hereof to the extent
such reports otherwise satisfy such requirements;
(b) as soon as practicable but in any event within 120 days
after the end of each Fiscal Year of the Borrower, consolidated (and to the
extent that such are being prepared, consolidating) balance sheets of the
Borrower and the Restricted Subsidiaries as at the end of such year and the
related consolidated (and, as to statements of income and cash flows, if
applicable and to the extent that such are being prepared, consolidating)
statements of income, partners' capital, cash flows and stockholders' equity
of the Borrower and the Restricted Subsidiaries for such Fiscal Year, setting
forth in each case in comparative form the consolidated and, where applicable
and to the extent that such are being prepared, consolidating figures for the
previous Fiscal Year, all in reasonable detail, provided that delivery within
the time period specified above of copies of the Public Partnership's annual
report on Form K prepared in compliance with the requirements therefor and
filed with the Securities and Exchange
63
Commission shall be deemed to satisfy the requirements hereof to the extent
such reports otherwise satisfy such requirements, and accompanied by a report
thereon of Xxxxxx Xxxxxxxx LLP or other independent public accountants of
recognized national standing selected by the Borrower, which report shall (1)
contain no limitation on the scope of the audit and no material qualification
or exception and (2) state that such consolidated financial statements
present fairly in all material respects the financial position of the
Borrower and the Restricted Subsidiaries as at the dates indicated and the
results of their operations and cash flows for the periods indicated in
conformity with GAAP applied on a basis consistent with prior years and that
the audit by such accountants in connection with such consolidated financial
statements has been made in accordance with GAAP;
(c) as soon as available and in any event within 60 days
after the end of each of the first three Fiscal Quarters and within 120 days
after the end of each Fiscal Year of the Borrower, a certificate, executed by
the chief financial Authorized Officer of the Borrower or Managing General
Partner, showing (in reasonable detail and with appropriate calculations and
computations in all respects satisfactory to the Agent) (1) compliance with
the financial covenants set forth in SECTION 8.2.4, (2) the pro forma
Consolidated Cash Flow Coverage of Debt Service, the Consolidated Cash Flow
Coverage of Maximum Debt Service and the consolidated Debt of the Borrower
and the Restricted Subsidiaries, in each case as set forth in SECTION
8.2.2(h) or, alternatively, a representation that the Borrower did not incur
any additional Indebtedness pursuant to SECTION 8.2.2(h) during such fiscal
period, (3) the ratio of the Coverage Test set forth in SECTION 8.2.6 and (4)
such other information as may reasonably be requested by the Agent and
stating that no Event of Default exists, or, if any Event of Default exists,
stating the nature and status thereof;
(d) promptly upon receipt thereof, copies of all reports,
management letters and other detailed information (if any) prepared with
respect to the Borrower or any Subsidiary by any independent public
accountant in connection with each annual or interim audit of such Person;
(e) as soon as possible and in any event within three
Business Days after knowledge of the occurrence of each Default, a statement
of the chief financial Authorized Officer of the Borrower setting forth
details of such Default and the action which the Borrower has taken and
propose to take with respect thereto;
(f) as soon as possible and in any event within three
Business Days after (x) the occurrence of any material adverse development
with respect to any litigation, action, proceeding, or labor controversy
described in SECTION 7.8 or (y) the commencement of any labor controversy,
litigation, action, proceeding of the type described in SECTION 7.8, notice
thereof and copies of all documentation relating thereto;
(g) within five Business Days after the sending or filing
thereof, all reports, registration statements and prospectuses which either
the Borrower, the Managing General Partner or the Public Partnership files
with the Securities and Exchange Commission or any national securities
exchange;
64
(h) immediately upon becoming, aware of the institution of
any steps by the Borrower or any other Person to terminate any Pension Plan,
or the failure to make a required contribution to any Pension Plan if such
failure is sufficient to give rise to a Lien under section 302(f) of ERISA,
or the taking of any action with respect to a Pension Plan which could result
in the requirement that the Borrower furnish a bond or other security to the
PBGC or such Pension Plan, or the occurrence of any event with respect to any
Pension Plan which could result in the incurrence by the Borrower of any
material liability, fine or penalty, or any material increase in the
contingent liability of the Borrower with respect to any post-retirement
Welfare Plan benefit, notice thereof and copies of all documentation relating
thereto or any assertion against the Borrower or any Subsidiary or any member
of the Controlled Group of withdrawal liability of any Multiemployer Plan; and
(i) within 60 Business Days after each Fiscal Quarter end,
a certificate setting forth the net proceeds from Asset Dispositions, the
application of such proceeds as permitted under SECTION 8.2.8, and the
mandatory prepayments made as required by SECTION 3.1(c); and
(j) such other information respecting the condition or
operations, financial or otherwise, of the Borrower or any Subsidiary as any
Lender through the Agent may from time to time reasonably request.
Section 8.1.2 COMPLIANCE WITH LAWS, ETC. The Borrower will,
and will cause each of the Restricted Subsidiaries to, comply in all material
respects with all applicable laws, rules, regulations and orders, such
compliance to include (without limitation):
(a) the maintenance and preservation of its existence and
qualification as a foreign corporation or partnership; PROVIDED, HOWEVER,
that nothing in this SECTION 8.1.2 shall prevent the loss of the existence of
any such Subsidiary or any such right or franchise if such loss is, in the
judgment of the Borrower, both desirable in the conduct of business of the
Borrower and its Subsidiaries, taken as a whole, and not disadvantageous in
any material respect to the Lenders individually or in the aggregate through
a series of related transactions; and
(b) the payment, before the same become delinquent, of all
material taxes, assessments and governmental charges imposed upon it or upon
its property except in each case (1) to the extent being diligently contested
in good faith by appropriate proceedings and for which adequate reserves in
accordance with GAAP shall have been set aside on its books or (2) where the
failure to do so would not reasonably be expected to have a material adverse
effect on the condition (financial or otherwise), business, operations,
assets or properties of the Borrower and the Restricted Subsidiaries (taken
as a whole).
Section 8.1.3 MAINTENANCE OF PROPERTIES. The Borrower will,
and will cause each of the Restricted Subsidiaries to, maintain, preserve,
protect and keep its properties in good repair, working order and condition,
and make necessary and proper repairs, renewals and replacements so that its
business carried on in connection therewith may be properly conducted at all
times unless the Borrower determines in good faith that the continued
maintenance of any of its properties is no longer economically desirable.
65
Section 8.1.4 INSURANCE. The Borrower will, and will cause
each of the Restricted Subsidiaries to, maintain or cause to be maintained
with responsible insurance companies, insurance, including self insurance,
with respect to its properties and business against such casualties and
contingencies and of such types and in such amounts as is financially
reasonable and customarily obtained by corporations or partnerships similarly
situated.
Section 8.1.5 BOOKS AND RECORDS. The Borrower will, and
will cause each of the Restricted Subsidiaries to, keep books and records
which accurately reflect all of its business affairs and transactions.
Section 8.1.6 INSPECTION. The Borrower shall permit the
representatives of each Lender, at the expense of the Borrower at any time
when a Default or Event of Default has occurred and is in existence and
otherwise representatives of any Lender with a Commitment of not less than
$10,000,000 with prior written notice at the expense of such Lender, to visit
and inspect during normal business hours any of the properties of the
Borrower or any Restricted Subsidiary, to examine all their respective books
of account, records, reports and other papers, to make copies and extracts
therefrom, and to discuss their respective affairs, finances and accounts
with their respective officers, employees and independent public accountants
all at such reasonable times and intervals and as often as may be reasonably
requested. The Borrower hereby authorizes the Borrower's and the Restricted
Subsidiaries' independent accountants, and shall upon such request deliver a
letter to the Borrower's and the Restricted Subsidiaries' independent public
accountants authorizing them, to reply to and comply with the provisions of
this SECTION 8.1.6.
Section 8.1.7 ENVIRONMENTAL COVENANT. The Borrower will,
and will cause each of the Restricted Subsidiaries to,
(a) use and operate all of its facilities and properties in
material compliance with all Environmental Laws, keep all material necessary
permits, approvals, certificates, licenses and other authorizations relating
to environmental matters in effect and remain in material compliance
therewith, and handle all Hazardous Materials in material compliance with all
applicable Environmental Laws;
(b) immediately notify the Agent and provide copies upon
receipt of all material written claims, complaints, notices or inquiries
relating to the condition of its facilities and properties or compliance with
Environmental Laws, and shall promptly cure and have dismissed with prejudice
to the satisfaction of the Agent any actions and proceedings relating to
compliance with Environmental Laws except to the extent being diligently
contested in good faith by appropriate proceedings and for which adequate
reserves in accordance with GAAP shall have been set aside on its books; and
(c) provide such information and certifications which the
Agent may reasonably request from time to time to evidence compliance with
this SECTION 8.1.7.
Section 8.1.8 RANKING/SECURITY. The Borrower will cause the
Obligations to be secured and rank pari passu with the Private Placement Debt
and the Parity
66
Debt. All of the accounts receivable, inventory, customer storage tanks of
the Borrower and the Restricted Subsidiaries created or acquired after the
date hereof (except tanks financed pursuant to clause (e), (f) and (g) in
SECTION 8.2.2) and the General Collateral will be pledged to secure the
Parity Debt, the Private Placement Debt and the Obligations. In the event
that the Borrower obtains or creates any Restricted Subsidiary (after the
date hereof), the Borrower shall cause each such Restricted Subsidiary to
issue a guarantee of the Obligations, the Private Placement Debt and the
Parity Debt and each such guarantee will be in favor of the Trustee and
secured by all the Collateral of such Restricted Subsidiary.
Section 8.1.9 CLEAN DOWN PERIOD. The Borrower, for a period
of thirty consecutive days during the period of February 1 to May 31 of each
calendar year, will (a) make a repayment of the aggregate outstanding
principal amount of all Working Capital Loans and all Swing Loans, if any, in
an amount sufficient so as to cause such aggregate outstanding principal
amount not to exceed $10,000,000 and (b) reduce all Letter of Credit
Outstandings, if any, in an amount sufficient so as to cause such aggregate
Letter of Credit Outstandings not to exceed $7,500,000.
Section 8.1.10 YEAR 2000. From time to time, upon the
request of any Lender, the Borrower and the Restricted Subsidiaries shall
provide to such Lender such information or documentation as is reasonably
requested regarding the status of their efforts to address the Year 2000
Problem.
Section 8.2 NEGATIVE COVENANTS. The Borrower agrees with the Agent
and each Lender that, until all Commitments have terminated and all
Obligations have been paid and performed in full, the Borrower will perform
the obligations set forth in this SECTION 8.2.
Section 8.2.1 BUSINESS ACTIVITIES. The Borrower will not,
nor will it permit any of the Restricted Subsidiaries to, engage in any
material line of business, except those described in the FIRST RECITAL and
such activities as may be incidental or related thereto.
Section 8.2.2 INDEBTEDNESS. The Borrower will not, nor will
it permit any of the Restricted Subsidiaries to, create, incur, assume or
(except with respect to CLAUSE (h) below) suffer to exist or otherwise become
or be liable in respect of any Indebtedness, other than, without duplication,
the following:
(a) Indebtedness identified on Item 8.2.2(a) of the
Disclosure Schedule and other Indebtedness existing on the Refunding
Effective Date not to exceed $15,000,000;
(b) Indebtedness evidenced by the Obligations;
(c) Indebtedness evidenced by the Private Placement Debt;
(d) additional Indebtedness of the Borrower and the
Restricted Subsidiaries which is incurred in connection with additions,
improvements or repairs (which may be capitalized on the Borrower's books in
accordance with GAAP) of or additions to the assets of the Borrower (which
may be secured equally and ratably with the Obligations), and which does
67
not, at any time, in the aggregate exceed an amount equal to the net proceeds
of any partnership interests sold by the Borrower or capital contributions
received by the Borrower designated to finance such additions, repairs or
improvements;
(e) additional secured Indebtedness incurred in connection
with capital lease obligations provided that (1) security shall extend only
to such property or asset, (2) the obligation incurred does not exceed the
fair market value of such property or asset (each as determined in good faith
by the Board of Directors of the Managing General Partner), (3) after giving
effect to such debt the Borrower could incur at least $1 of additional
Indebtedness pursuant to the incurrence test in clause (h) below and (4) the
amount of all such additional secured Indebtedness shall not exceed
$10,000,000 in the aggregate;
(f) additional secured Indebtedness incurred in connection
with purchase money obligations provided that (1) security shall extend only
to such property or asset, (2) the obligation incurred does not exceed 85% of
the fair market value of such property or asset (as determined in good faith
by the Board of Directors of the Managing General Partner), and (3) after
giving effect to such debt, the Borrower could incur at least $1 of
additional Indebtedness pursuant to the incurrence test in clause (h);
(g) additional secured Indebtedness incurred to pay all or
a portion of the purchase price of property acquired by the Borrower or to
secure obligations incurred in consideration of non-compete agreements,
provided that (1) security shall extend only to the property or assets
acquired, (2) such obligation does not exceed 85% of the fair market value of
such property or asset, or 35% in the case of non-compete obligations (each
as determined in good faith by the Board of Directors of the Managing General
Partner), and (3) after giving effect to such Indebtedness the Borrower could
incur at least $1 of additional Indebtedness pursuant to the incurrence test
in clause (h) below;
(h) additional Indebtedness of the Borrower and the
Restricted Subsidiaries in excess of Indebtedness permitted by clause (a)-(g)
above, if (a) the pro forma Consolidated Cash Flow Coverage of Debt Service
(including the Indebtedness to be incurred and the repayment of any debt
being refinanced and repaid) is greater than 2.50 (as at the end of the most
recently ended Fiscal Quarter but giving effect to such additional
Indebtedness as set forth in the definition of "Consolidated Cash Flow
Coverage of Debt Service"), (b) the Consolidated Cash Flow Coverage of
Maximum Debt Service (including the Indebtedness to be incurred and the
repayment of any debt being refinanced and repaid) is greater than 1.25 (as
at the end of the most recently ended Fiscal Quarter but giving effect to
such additional Indebtedness as set forth in the definition of "Consolidated
Cash Flow Coverage of Maximum Debt Service"), and (c) the consolidated Debt
of the Borrower and the Restricted Subsidiaries (including the Indebtedness
to be incurred) to pro forma Consolidated Cash Flow (as at the end of the
most recently ended Fiscal Quarter but giving effect to such additional
Indebtedness as set forth in the definition below) is less than 5.25:1.00 if
prior to December 31, 1999, 5.00:1.00 if thereafter but prior to December 31,
2000, 4.75:1.00 if thereafter but prior to December 31, 2001 and 4.50:1.00
thereafter. Such additional Indebtedness under this clause (h) may be secured
equally and ratably with the Obligations.
68
(i) additional unsecured Indebtedness of the Borrower or
the Restricted Subsidiaries owing to either General Partner or an Affiliate
of either General Partner, provided that such Indebtedness (a) does not
exceed $20,000,000 in the aggregate at any time outstanding, and (b) is
created under an agreement substantially in the form attached hereto as
EXHIBIT N, FORM OF INTERCOMPANY NOTE, pursuant to which such Indebtedness is
subordinated to the Obligations;
(j) any Restricted Subsidiary may become liable with
respect to Indebtedness owing to the Borrower or to another Restricted
Subsidiary; provided that such Indebtedness is created under an agreement
substantially in the form attached hereto as EXHIBIT N, pursuant to which
such Indebtedness is subordinated to the Obligations;
(k) the Borrower and any Restricted Subsidiary may become
liable with respect to certain pre-existing Indebtedness relating to any
Person (including any Restricted Subsidiary), business or assets acquired by
the Borrower and the Restricted Subsidiaries, provided that: (a) no Default
or Event of Default shall have occurred and be continuing, (b) such
Indebtedness was not incurred in anticipation of the acquisition of such
Person, business or assets, and (c) either (i) the sum of (y) such
Indebtedness and (z) the then outstanding Acquisition Loans shall not exceed
the greater of $35,000,000 or 40% of Consolidated Net Worth as of the date of
incurrence, or (ii) after giving effect to such Person becoming a Restricted
Subsidiary or the acquisition of such business or assets, the Borrower and
the Restricted Subsidiaries could incur at least $1 of additional
Indebtedness subject to the incurrence test in (h) above;
(l) Indebtedness pursuant to Interest Rate Agreements; and
(m) Indebtedness pursuant to Commodity Hedging Agreements.
NOTWITHSTANDING THE FOREGOING, THE AGGREGATE OUTSTANDING PRINCIPAL AMOUNT OF
ALL INDEBTEDNESS (OTHER THAN OBLIGATIONS UNDER GUARANTEES IN FAVOR OF HOLDERS
OF THE PARITY DEBT, THE PRIVATE PLACEMENT DEBT AND THE OBLIGATIONS) OF
RESTRICTED SUBSIDIARIES SHALL NOT EXCEED $10,000,000; PROVIDED, HOWEVER, THAT
IN CONNECTION WITH THE BORROWER'S ACQUISITION OF PROPANE CONTINENTAL, INC.,
VIA THE BORROWER'S RESTRICTED SUBSIDIARY, CORNERSTONE HOLDING, THE FOREGOING
RESTRICTION SHALL BE SUSPENDED WITH RESPECT TO INDEBTEDNESS OF CORNERSTONE
HOLDING TO THE EXTENT THAT SUCH INDEBTEDNESS IS CREATED UNDER AN AGREEMENT
SUBSTANTIALLY IN THE FORM ATTACHED HERETO AS EXHIBIT N, PURSUANT TO WHICH
SUCH INDEBTEDNESS IS SUBORDINATED TO THE OBLIGATIONS.
FURTHERMORE, IF NO DEFAULT OR EVENT OF DEFAULT SHALL HAVE OCCURRED AND BE
CONTINUING, THE PROVISIONS OF THIS SECTION WILL NOT PREVENT THE BORROWER AND
THE RESTRICTED SUBSIDIARIES FROM:
(i) becoming liable for Indebtedness secured equally
and ratably with the obligations incurred for the purpose of extending,
renewing, refunding or refinancing the Private Placement Debt or the
Parity Debt, provided that (1) the principal amount of such
Indebtedness shall not exceed the principal amount of the Private
Placement Debt or the Parity Debt being extended, renewed, refunded or
refinanced together with any accrued interest and premium with respect
thereto and any costs and
69
expenses related to such renewal, refunding or refinancing and (2)
such Indebtedness (x) shall not mature prior to the stated maturity
of the Parity Debt so exchanged or refinanced and (y) shall have an
average life equal to or greater than the remaining average life of
the Parity Debt so exchanged or refinanced;
(ii) becoming liable for unsecured Indebtedness
incurred for the purpose of extending, renewing, refunding or
refinancing, the Private Placement Debt or Parity Debt or other
Indebtedness provided that (1) the principal amount of such unsecured
Indebtedness to be incurred shall not exceed the principal amount of
the Parity Debt or other Indebtedness being extended, renewed, refunded
or refinanced together with any accrued interest and premium with
respect thereto and any costs and expenses related to such extension,
renewal, refunding or refinancing and (2) such Indebtedness (x) shall
not mature prior to the stated maturity of the Parity Debt or other
Indebtedness so exchanged or refinanced and (y) shall have an average
life equal to or greater than the remaining average life of the Parity
Debt or other Indebtedness so exchanged or refinanced; and
(iii) becoming liable for secured Indebtedness other
than the Private Placement Debt or Parity Debt incurred for the purpose
of extending, renewing, refunding or refinancing permitted secured
Indebtedness other than the Private Placement Debt or Parity Debt
provided that (1) the principal amount of such secured Indebtedness to
be incurred shall not exceed the principal amount of the secured
Indebtedness being extended, renewed, refunded or refinanced together
with any accrued interest and premium with respect thereto and any
costs and expenses related to such extension, renewal, refunding or
refinancing, (2) such Indebtedness (x) shall not mature prior to the
stated maturity of the Indebtedness so exchanged or refinanced and (y)
shall have an average life equal to or greater than the remaining
average life of the Indebtedness so exchanged or refinanced, and (3)
the security therefor shall not be increased.
Section 8.2.3 LIENS. The Borrower will not, nor will it
permit any of the Restricted Subsidiaries to, create, incur, assume or suffer
to exist any Lien upon any of its property, revenues or assets, whether now
owned or hereafter acquired, except:
(a) Liens in the Collateral created in favor of the Trustee
for the benefit of the Lenders, the Private Placement Debt holders, the
holders of Parity Debt and the counterparties to Interest Rate Agreements;
(b) Liens in favor of holders of certain specified
permitted secured Indebtedness pursuant to clauses (a), (e), (f), (g), (k)
and (m) of SECTION 8.2.2 and extensions, renewals, refundings or refinancings
thereof permitted pursuant to (i) of the last section of SECTION 8.2.2;
provided that Liens with respect to Indebtedness permitted pursuant to clause
(a) shall be in existence on the date hereof and Liens with respect to
Indebtedness pursuant to clause (m) may not attach to any property other than
commodities subject to the applicable Commodity Hedging Agreement and cash
held in margin accounts related directly thereto; and
70
(c) Liens for taxes, assessments or other governmental
charges or levies not at the time delinquent or thereafter payable without
penalty or being diligently contested in good faith by appropriate
proceedings and for which adequate reserves in accordance with GAAP shall
have been set aside on its books;
(d) Liens of carriers, warehousemen, mechanics, materialmen
and landlords incurred in the ordinary course of business for sums not
overdue or being diligently contested in good faith by appropriate
proceedings and for which adequate reserves in accordance with GAAP shall
have been set aside on its books;
(e) Liens incurred in the ordinary course of business in
connection with workmen's compensation, unemployment insurance or other forms
of governmental insurance or benefits, or to secure performance of tenders,
statutory obligations, leases and contracts (other than for borrowed money)
entered into in the ordinary course of business or to secure obligations on
surety or appeal bonds;
(f) judgment Liens (1) in existence less than 15 days after
the entry thereof or (2) with respect to which execution has been stayed or
(3) the payment of which is covered in full (subject to a customary
deductible or co-insurance amount) by insurance maintained with responsible
insurance companies not exceeding $100,000 at any time in existence.
(g) Liens on property or assets of any Restricted
Subsidiary securing indebtedness of such Restricted Subsidiary to the
Borrower or any other Restricted Subsidiary;
(h) Liens incurred in connection with self insurance
arrangements;
(i) Liens incidental to the conduct of its business or
ownership of its assets which were not incurred in connection with the
borrowing of money and which do not materially impair the use thereof by the
Borrower or any Restricted Subsidiary;
(j) leases or subleases granted to others, zoning
restrictions, easements, licenses, reservations, rights-of-way, restrictions
on the use of property or irregularities of title and other similar changes,
encumbrances and Liens which do not materially impair the use thereof by the
Borrower as any Restricted Subsidiaries;
(k) Liens securing Indebtedness described in Item 8.2.2(a)
and other Liens described on Item 8.2.3 ("Liens") to the Disclosure Schedule;
(l) Liens continued on renewals or extension of
Indebtedness previously secured so long as the principal amounts of the
Indebtedness secured thereby are not increased;
PROVIDED, HOWEVER, THAT LIENS ON REAL ESTATE SHALL BE LIMITED TO REAL ESTATE
ACQUIRED AFTER THE DATE HEREOF SECURING INDEBTEDNESS NOT IN EXCESS OF
$500,000 PER FISCAL YEAR.
71
Section 8.2.4 FINANCIAL CONDITION. The Borrower shall not
permit:
(a) the Total Funded Indebtedness to Consolidated Cash Flow
Ratio as at the end of any Fiscal Quarter to be greater than 5.25:1.00 at any
time on or before December 31, 1999; 5.00:1.00 at any time thereafter on or
before December 31, 2000; 4.75:1.00 at any time thereafter on or before
December 31, 2001; or 4.50:1.00 at any time thereafter; PROVIDED, THAT, for
purposes of this SECTION 8.2.4, if the amount of actual cash on hand of the
Borrower and the Restricted Subsidiaries is at least $1,000,000, then not
more than $10,000,000 of such actual cash on hand shall be netted against
Total Funded Indebtedness; or
(b) the ratio of Consolidated Cash Flow to Consolidated
Interest Expense as at the end of any Fiscal Quarter to be less than
2.25:1.00 any time on or prior to December 31, 1998 and 2.50:1.00 at any time
thereafter.
NOTWITHSTANDING ANY PROVISION IN THE DEFINITION OF "CONSOLIDATED CASH FLOW",
FOR THE PURPOSES OF CLAUSE (a) OF THIS SECTION 8.2.4 FOR THE FISCAL QUARTERS
ENDING AFTER JUNE 30, 1999, AND CLAUSE (b) OF THIS SECTION 8.2.4 FOR FISCAL
QUARTERS ENDING AFTER THE REFUNDING EFFECTIVE DATE, CONSOLIDATED CASH FLOW
SHALL BE CALCULATED, AT THE OPTION OF THE BORROWER AS SPECIFIED IN EACH
CERTIFICATE DELIVERED PURSUANT TO SECTION 8.1.1(c), FOR (x) THE MOST RECENTLY
ENDED FOUR CONSECUTIVE FISCAL QUARTERS OR (y) (1) THE MOST RECENTLY ENDED
EIGHT CONSECUTIVE FISCAL QUARTERS DIVIDED BY (2) TWO.
Section 8.2.5 INVESTMENTS. Neither the Borrower nor any of
the Restricted Subsidiaries will purchase or own any stock or other
securities of any other Person, make any acquisitions or make loans or
capital contributions to or guarantee the obligations of any other Person
(other than guarantees that would be permitted as Indebtedness under SECTION
8.2.2) or make any other Investments, except:
(a) investments, advances and loans by the Borrower to any
Restricted Subsidiary and investments, advances or loans to the Borrower by
any Restricted Subsidiary;
(b) extensions of trade credit and advances to third
parties in the ordinary course of business;
(c) loans and advances to officers and employees in the
ordinary course of business in amounts not in excess of $2,500,000 at any
time outstanding;
(d) investments received in connection with the exercise of
customary creditors' rights upon default;
(e) guarantees (excluding guarantees of Indebtedness)
undertaken in the ordinary course of business;
(f) investments in Interest Rate Agreements and Commodity
Hedging Agreements;
(g) investments in short-term, high quality marketable
securities;
72
(h) investments in Capital Stock or other equity interests,
but only if, upon completion of such transactions, the issuer of such equity
interests becomes a Restricted Subsidiary;
(i) investments (other than those included in (h) above) in
the Capital Stock of, or joint venture, partnership or other equity interests
in, or the contributions to capital in the ordinary course of business of,
(1) an Unrestricted Subsidiary whose primary business is the purchase and
sale of propane or other petroleum products on a wholesale basis in an
aggregate amount of up to $3,000,000 and (2) its Unrestricted Subsidiaries in
an aggregate amount of up to (x) $10,000,000 per Fiscal Year and (y) on a
cumulative basis, no more than 10% of Consolidated Net Worth, in each case,
to be increased by the net proceeds of any partnership interests sold by the
Borrower or capital contributions received by the Borrower from the Managing
General Partner designated to finance such investments, in each case, without
duplication, net of any cash distributions received from all Unrestricted
Subsidiaries for such period; PROVIDED, THAT, both immediately before and
after giving effect to each such investment, (x) no Default or Event of
Default shall have occurred and be continuing and (y) the Borrower is in
compliance with the Coverage Test set forth in SECTION 8.2.6(a); and
(j) acquisitions of Persons engaged in the Propane
Distribution Business to the extent that (1) both before and after each
acquisition, each of the statements contained in Section 6.2.1(a), (b) and
(c) shall be true and correct and (2) after each acquisition in excess of
$15,000,000, the Borrower shall deliver to the Agent a certificate
demonstrating compliance with the covenants contained in SECTION 8.2.4.
Section 8.2.6 RESTRICTED PAYMENTS, ETC.
(a) The Borrower will not make any Restricted Payment,
other than:
(i) dividend payments needed to pay the tax liability
and legal, accounting and other professional fees and expenses of the
Managing General Partner
(ii) provided that (i) no Default or an Event of
Default exists, both immediately before and after giving effect to such
Restricted Payment and (ii) the pro forma ratio of the Coverage Test is
greater than 2.25:1.00 prior to December 31, 1998, or 2.50:1.00
thereafter, for the period of four Fiscal Quarters immediately
preceding the date of such Restricted Payment, quarterly Restricted
Payments in an aggregate amount not to exceed Available Cash in the
preceding Fiscal Quarter. Upon satisfaction of the Coverage Test and
subsequent declaration by the Borrower, Restricted Payments must be
made within 60 days and if the Restricted Payment would have been
permitted as of the date of such declaration, such Restricted Payment
shall be permitted if made during such 60 day period.
(b) The Borrower will not, and will not cause or permit any
Restricted Subsidiary to, directly or indirectly, create or otherwise cause
or suffer to exist or become effective any consensual encumbrance or
restriction on the ability of any Restricted Subsidiary to (a) pay dividends
or make any other distributions on or in respect of its Capital Stock, or pay
any
73
indebtedness owed to the Borrower, (b) make loans or advances to the Borrower
or (c) transfer any of its properties or assets to the Borrower, except for
such encumbrances or restrictions existing under or by reason of customary
non-assignment provisions in any lease governing a leasehold interest or
other contract entered into in the ordinary course of business consistent
with past practices.
Section 8.2.7 CONSOLIDATION, MERGER, ETC. The Borrower will
not, and will not permit any of its Subsidiaries to, merge or consolidate
with any Person, and the Borrower will not, and will not permit, any
Restricted Subsidiary to, transfer all or substantially all its assets to any
Person, except:
(a) any Restricted Subsidiary may consolidate with or merge
into or transfer all or substantially all of its assets to the Borrower or
any other Restricted Subsidiary;
(b) any entity may consolidate with or merge into the
Borrower or a Restricted Subsidiary if the Borrower or a Restricted
Subsidiary is the surviving entity and after giving effect to such
transaction (a) the Borrower's Consolidated Net Worth shall not be less than
its Consolidated Net Worth immediately prior to such transaction (without
regard to purchase accounting adjustments), (b) neither the Borrower nor any
of its Subsidiaries shall be liable with respect to Indebtedness or allow its
property to be subject to any Lien which is not permitted hereby, (c) the
Borrower can incur at least $1 of additional Indebtedness pursuant to clause
(h) under Section 8.2.2; provided, however, this provision (b) (c) shall not
apply if the consolidating or merging Person has no outstanding Indebtedness,
(d) substantially all of the assets and business of the Borrower and the
Restricted Subsidiaries are located in the U.S., and (e) at the time of such
merger or consolidation, and after giving effect thereto, no Default or Event
of Default shall exist; and
(c) the Borrower may consolidate or merge with another
Person or transfer all or substantially all its assets to another entity if
(a) the surviving or transferee entity is a corporation or limited
partnership organized under U.S. law and such entity assumes all of the
obligations under the Agreement and the Security Documents and delivers a
legal opinion reasonably acceptable to Required Lenders to the effect that
the assumption agreement has been duly authorized, executed and delivered by
and is enforceable against the successor; and (b) after giving effect to such
transaction (i) such entity shall not have a consolidated net worth of less
than the Consolidated Net Worth of the Borrower immediately prior to such
transaction (without regard to purchase accounting adjustments); (ii) such
entity shall not be liable with respect to Indebtedness or allow its property
to be subject to any Lien which is not permitted hereby; (iii) such entity
can incur at least $1 of additional Indebtedness pursuant to clause (h) under
Section 8.2.2; provided, however, this provision (c)(b)(iii) shall not apply
if the consolidating or merging entity has no outstanding Indebtedness; (iv)
substantially all the assets and business of such entity are located in the
U.S.; and (v) at the time of such merger, consolidation, sale or other
transaction no Default or Event of Default shall exist.
Section 8.2.8 ASSET DISPOSITIONS, ETC. Except in connection
with a transaction permitted under Section 8.2.7, and investments in
Restricted Subsidiaries or
74
Unrestricted Subsidiaries permitted under Section 8.2.5, neither the Borrower
nor any of the Restricted Subsidiaries may sell or dispose of any portion of
its property (excepting abandonment, sale of inventory or other dispositions
in the ordinary course of business), or sell equity interests in any
Restricted Subsidiary to any third party (all of the foregoing, are herein
called "Asset Dispositions"), unless:
(a) immediately before and after giving effect to such
transaction, no Default or Event of Default shall exist or be continuing;
(b) an amount equal to the net after-tax proceeds from such
Asset Dispositions in excess of $7,500,000 per fiscal year and $30,000,000
over the life of the Agreement have been spent within 90 days before the sale
of such assets or are committed to be expended within 365 days after the sale
of such assets for assets in the United States in a line of business as
described in Section 8.2.1 and which assets, to the extent the assets so
sold, constituted a portion of the General Collateral, shall be added to the
Collateral, or for the making of (or offering to make) pro rata principal
payments on the Parity Debt, the Private Placement Debt (including any
premium that may be due thereon in connection with any such prepayment) and
the Obligations (to the extent prepayment is as a result of such Asset
Disposition as required by the terms hereof) and a certificate has been
received by the Agent attesting to the receipt of fair value for the assets,
as determined by the Board of Directors of the Managing General Partner, and
to the proper application of the proceeds, and
(c) 70% or more of the consideration received is in the
form of cash or marketable securities; provided however, that the amount of
(1) any liabilities (as shown on the Borrower's or such Restricted
Subsidiary's most recent balance sheet or in the notes thereto) of the
Borrower or any Restricted Subsidiary (other than liabilities that are by
their terms subordinated in right of payment to the Obligations) that are
assumed by the transferee of any such assets and (2) any notes or other
obligations received by the Borrower or any such Restricted Subsidiary from
such transferee that are promptly converted into cash (to the extent of the
cash received), shall be deemed to be cash for the purposes of this clause
(c) and provided further that any sale of assets not in excess of $1,000,000
may be made for a cash consideration (subject to the same assumptions) not
less than 25% of the consideration therefor.
Dispositions of Collateral made in accordance with this Section 8.2.8 shall
be made free and clear of the liens securing the Parity Debt. Notwithstanding
the foregoing, the Borrower and the Restricted Subsidiaries may sell or
dispose of (i) real property assets sold or disposed of within 12 months of
the acquisition of such assets, and (ii) all other assets sold or disposed of
within 6 months of the acquisition of such assets, in each case constituting
a portion of an acquired business, if (y) such assets are specifically
designated to the Agent in writing at the time of acquisition or within 30
business days thereafter as assets designated to be disposed of, and (z) a
certificate of the Managing General Partner has been received by the Trustee
attesting to the receipt of fair value for the assets. Such sales under this
paragraph will not be applied towards the annual or cumulative limitations in
the preceding paragraph.
Notwithstanding the foregoing, the Borrower may at any time exchange assets
for other like assets in a line of business in which the partnership or the
Restricted Subsidiaries are engaged provided the fair market values of the
assets included in such exchange are substantially equivalent and the total
book value of assets exchanged in (i) any such transaction shall not exceed
7.5% of then consolidated total assets of the Borrower, (ii) all such
transactions in any one year shall not exceed 15% of then consolidated total
assets of the Borrower or (iii) all such transactions after the date of the
Agreement shall not exceed 30% of then consolidated total assets of the
Borrower. With respect to the
75
exchange of assets in any one transaction in excess of $10,000,000, a
fairness opinion satisfactory to the Required Lenders shall be obtained.
Section 8.2.9 MODIFICATION OF CERTAIN AGREEMENTS. The
Borrower will not consent to any amendment, supplement or other modification
of any of the terms or provisions contained in, or applicable to, any
document or instrument evidencing or applicable to the Private Placement
Debt, which increases any amount payable thereunder or shortens the terms
thereof or increases any installment or required prepayment.
Section 8.2.10 TRANSACTIONS WITH AFFILIATES. Except for the
transactions or conduct listed in Item 8.2.10 ("Transactions with
Affiliates") of the Disclosure Schedule, the Borrower will not, and will not
permit any Restricted Subsidiary to, directly or indirectly, engage in any
transaction with any Affiliate, including, without limitation, the purchase,
sale or exchange of assets or the rendering of any service, to the Borrower's
or such Restricted Subsidiary's business except upon fair and reasonable
terms that are no less favorable to the Borrower or such Restricted
Subsidiary, as the case may be, than those which might be obtained in an
arm's-length transaction at the time such transaction is agreed upon from
Persons which are not such an Affiliate, provided that the foregoing
limitations and restrictions shall not apply to any transaction between the
Borrower and any Restricted Subsidiary or between Restricted Subsidiaries, or
to loans and advances to officers and employees made in the ordinary course
of business up to $2,500,000 at any time outstanding.
Section 8.2.11 NEGATIVE PLEDGES, RESTRICTIVE AGREEMENTS,
ETC. The Borrower will not, and will not permit any of its Subsidiaries to,
enter into any agreement (excluding this Agreement, any other Loan Document
and any agreement governing any Indebtedness permitted herein) prohibiting
the creation or assumption of any Lien upon its properties, revenues or
assets, whether now owned or hereafter acquired, or the ability of the
Borrower or any other Obligor to amend or otherwise modify this Agreement or
any other Loan Document.
Section 8.2.12 LIMITATION ON ISSUANCE OF SUBSIDIARY STOCK.
Except as otherwise permitted herein, the Borrower shall not permit any of
the Restricted Subsidiaries to, directly or indirectly, issue, contingently
or otherwise, any shares of any Restricted Subsidiary's Capital Stock,
warrants, rights or options to purchase or acquire shares of such Restricted
Subsidiary's Capital Stock, except to the Borrower or any of the other
Restricted Subsidiaries.
Section 8.2.13 OPERATING LEASES. The aggregate obligations
of the Borrower and the Restricted Subsidiaries for the payment of rent for
any property under lease or agreement to lease (excluding obligations of the
Borrower and the Restricted Subsidiaries under or with respect to Synthetic
Leases) for any Fiscal Year shall not exceed the greater of (a) $10,000,000
and (b) 15% of Consolidated Cash Flow of the Borrower and the Restricted
Subsidiaries for, at the option of the Borrower as specified in each
certificate delivered pursuant to Section 8.1.1(c), (i) the most recently
ended four consecutive Fiscal Quarters or (ii) (A) the most recently ended
eight consecutive Fiscal Quarters divided by (B) two; provided, however, that
any payment of rent for any property under lease or agreement to lease for a
term of less than one year (after giving effect to all automatic renewals)
shall not be subject to this Section 8.2.13.
76
Section 8.2.14 DESIGNATION OF RESTRICTED AND UNRESTRICTED
SUBSIDIARIES. The Borrower may designate any Restricted Subsidiary or newly
acquired or formed subsidiary as an Unrestricted Subsidiary or any
Unrestricted Subsidiary or newly acquired or formed subsidiary as a
Restricted Subsidiary, in each case subject to satisfaction of each of the
following conditions:
(i) immediately before and after giving effect to
such designation, no Default or Event of Default shall exist and be
continuing;
(ii) the Borrower would have been in compliance with
every provision of this Agreement as at the end of the most recently
ended Fiscal Quarter as if such designation had taken place as at the
commencement of the four Fiscal Quarter period ending at such Fiscal
Quarter end;
(iii) the designation of Unrestricted Subsidiaries
after the Refunding Effective Date shall not exceed at any time 5% of
the Borrower's consolidated assets;
(iv) after giving effect to such designation, (y) the
Borrower would be permitted to incur at least $1 of additional
Indebtedness in accordance with the provisions of clause (h) of SECTION
8.2.2, other than in the case of a designation of an Unrestricted
Subsidiary that does not have any Indebtedness as a Restricted
Subsidiary, and (z) the Borrower and the Restricted Subsidiaries would
not be liable with respect to any Indebtedness or guarantee, would not
own any Investments and their property would not be subject to any Lien
not permitted by the terms of SECTION 8.2.2, SECTION 8.2.3 and SECTION
8.2.5;
(v) in the case of a designation as an Unrestricted
Subsidiary, (x) if such designation (and all other prior designations
of Restricted Subsidiaries or newly acquired or formed Subsidiaries as
Unrestricted Subsidiaries during the then current Fiscal Year) were
deemed to constitute a sale by the Borrower of all the assets (other
than cash in the case of newly acquired or newly formed businesses) of
the Subsidiary so designated, such sale would be in compliance with
section (a) of SECTION 8.2.8 and (y) if such designation (and all other
prior designations of Restricted Subsidiaries or newly acquired or
formed Subsidiaries as Unrestricted Subsidiaries during the current
fiscal year) were deemed to constitute an Investment by the Borrower in
respect of all the assets of the Borrower so designated, such
Investment would be in compliance with clause (i) of SECTION 8.2.5, in
each case with the net proceeds of such sale or the amount of such
Investment being deemed to equal the net book value of such assets in
the case of a Restricted Subsidiary or the cost of acquisition or
formation in the case of a newly acquired or formed Subsidiary,
PROVIDED, that this subdivision (v) shall not apply to an acquisition
or formation by the Borrower or a Restricted Subsidiary of a newly
acquired or formed Unrestricted Subsidiary to the extent such
acquisition or formation (1) is funded solely by the net cash proceeds
received by the Borrower from either General Partner or the Public
Partnership as a capital contribution or as
77
consideration for the issuance by the Borrower of additional
partnership interests or (2) the assets involved in such acquisition
are acquired in exchange for additional partnership interests of the
Borrower or the Public Partnership;
(vi) in the case of a designation of a Restricted
Subsidiary as an Unrestricted Subsidiary, such Restricted Subsidiary
shall not have been an Unrestricted Subsidiary prior to being
designated a Restricted Subsidiary;
(vii) the Borrower shall deliver to each Lender,
within 20 Business Days after any such designation, an Officer's
Certificate stating the effective date of such designation and stating
that the foregoing conditions have been satisfied. Such certificate
shall be accompanied by a schedule setting forth in reasonable detail
the calculations demonstrating compliance with such conditions, where
appropriate; and
(viii) in the case of the designation of any
Unrestricted Subsidiary as a Restricted Subsidiary, such new Restricted
Subsidiary shall be deemed to have (a) made or acquired all Investments
owned by it and (b) incurred all Indebtedness owing by it and all Liens
to which it or any of its properties are subject, on the date of such
designation.
Section 8.2.15 ORGANIC DOCUMENTS. The Borrower will not,
and will not permit any Subsidiary, to alter any Organic Document of such
entity in any manner which would have a material adverse effect on the
condition (financial or otherwise), business, operations, assets or
properties of the Borrower and the Restricted Subsidiaries (taken as a whole).
Section 8.2.16 CORNERSTONE SALES & SERVICE CORPORATION. The
Borrower shall not make any Investment in nor extend any Indebtedness to
Cornerstone Sales & Service Corporation if all Investments therein (less
returns of capital thereon other than dividends and noncapital distributions)
plus all such outstanding Indebtedness, taken together, would at any time be
in the aggregate greater than $10,000,000.
ARTICLE IX
EVENTS OF DEFAULT
Section 9.1 LISTING OF EVENTS OF DEFAULT. Each of the following
events or occurrences described in this SECTION 9.1 shall constitute an
"EVENT OF DEFAULT".
Section 9.1.1 NON-PAYMENT OF OBLIGATIONS. The Borrower
shall default in the payment or prepayment when due of any principal of any
Loan, or the Borrower shall default (and such default shall continue
unremedied for a period of five Business Days) in the payment when due of any
interest, fee or other Obligation.
Section 9.1.2 BREACH OF WARRANTY. Any material
representation or warranty of the Borrower or any other Obligor made or
deemed to be made hereunder or in any other Loan Document executed by it or
any other writing or certificate furnished by or on behalf
78
of the Borrower or any other Obligor to the Agent or any Lender for the
purposes of or in connection with this Agreement or any such other Loan
Document (including any certificates delivered pursuant to ARTICLE VI) is or
shall be incorrect when made in any material respect.
Section 9.1.3 NON-PERFORMANCE OF OTHER COVENANTS AND
OBLIGATIONS. Any Obligor shall default in the due performance and observance
of any Obligation or agreement contained herein or in any other Loan
Document, and such default shall continue unremedied for a period of 30 days
after actual knowledge thereof by a Responsible Officer.
Section 9.1.4 DEFAULT ON OTHER INDEBTEDNESS. The Borrower
or any Restricted Subsidiary shall default (after notice and the expiration
of any applicable grace period) in the payment of any amount of principal,
premium or interest on any Indebtedness (other than the Notes), or any event
shall occur or condition shall exist in respect of any Indebtedness of the
Borrower or any of the Restricted Subsidiaries (other than the Notes) and the
effect of such event or condition is to cause (or to permit the holders of
such Indebtedness to cause) such Indebtedness to become due before its stated
maturity, in each case, if the outstanding principal balance of such
Indebtedness is in excess of $10,000,000 in the aggregate.
Section 9.1.5 JUDGMENTS. Any judgment or order for the
payment of money in excess of $10,000,000, net of insurance coverage, shall
be rendered against the Borrower or any Restricted Subsidiary and
(i) such judgment or order is non appealable, has not
been stayed pending appeal, or all rights to appeal such judgment have
expired or been exhausted; and
(ii) such judgment or order shall remain undischarged
for a period of sixty consecutive days after the date due.
Section 9.1.6 PENSION PLANS. Any of the following events
shall occur with respect to any Pension Plan
(a) the institution of any steps by the Borrower, any
member of its Controlled Group or any other Person to terminate a Pension
Plan if, as a result of such termination, the Borrower or any such member
could be required to make a contribution to such Pension Plan, or could
reasonably expect to incur a liability or obligation to the PBGC, in excess
of $500,000; or
(b) a contribution failure occurs with respect to any
Pension Plan sufficient to give rise to a Lien under section 302(f) of ERISA.
Section 9.1.7 CHANGE IN CONTROL. Any Change in Control
shall occur.
Section 9.1.8 BANKRUPTCY, INSOLVENCY, ETC. Any of the
following events shall occur:
79
(a) filing by or on the behalf of the Borrower or the
Managing General Partner of a voluntary petition or an answer seeking
reorganization, arrangement, readjustment of its debts or for any other
relief under any bankruptcy, reorganization, compromise, arrangement,
insolvency, readjustment of debt, dissolution or liquidation or similar act
or law, state or federal, now or hereafter existing ("BANKRUPTCY LAW"), or
any action by the Borrower or the Managing General Partner for, or consent or
acquiescence to, the appointment of a receiver, trustee or other custodian of
the Borrower or the Managing General Partner, or of all or a substantial part
of its property; or the making by the Borrower or the Managing General
Partner of any assignment for the benefit of creditors; or the admission by
the Borrower or the Managing General Partner in writing of its inability to
pay its debts as they become due; or
(b) filing of any involuntary petition against the Borrower
or the Managing General Partner in bankruptcy or seeking reorganization,
arrangement, readjustment or its debts or for any other relief under any
Bankruptcy Law and an order for relief by a court having jurisdiction in the
premises shall have been issued or entered therein; or any other similar
relief shall be granted under any applicable Federal or state law; or a
decree or order of a court having jurisdiction in the premises for the
appointment of a receiver, liquidator, sequestrator, trustee or other officer
having similar powers over the Borrower or the Managing General Partner or
over all or a part of its property shall have been entered; or the
involuntary appointment of an interim receiver, trustee or other custodian of
the Borrower or the Managing General Partner or of all or a substantial part
of its property; or the issuance of a warrant of attachment, execution or
similar process against any substantial part of the property of the Borrower
or the Managing General Partner and continuance of any such event for 60
consecutive days unless dismissed, bonded to the satisfaction of the court
having jurisdiction in the premises or discharged; or
(c) filing by or on the behalf of any Restricted Subsidiary
of a voluntary petition or an answer seeking reorganization, arrangement,
readjustment of its debts or for any other relief under any Bankruptcy Law,
or any action by any Restricted Subsidiary for, or consent or acquiescence
to, the appointment of a receiver, trustee or other custodian of such
Restricted Subsidiary or of all or a substantial part of its property; or the
making by any Restricted Subsidiary of any assignment for the benefit of
creditors; or the admission by any Restricted Subsidiary in writing of its
inability to pay its debts as they become due; or
(d) filing of any involuntary petition against any
Restricted Subsidiary in bankruptcy or seeking reorganization, arrangement,
readjustment of its debts or for any other relief under any Bankruptcy Law
and an order for relief by a court having jurisdiction in the premises shall
have been issued or entered therein; or any other similar relief shall be
granted under any applicable Federal of state law; or a decree or order of a
court having jurisdiction in the premises for the appointment of a receiver,
liquidator, sequestrator, trustee or other officer having similar powers over
any Restricted Subsidiary or over all or a part of its property shall have
been entered; or the involuntary appointment of an interim receiver, trustee
or other custodian of any Restricted Subsidiary or of all or a substantial
part of its property; or the issuance of a warrant of attachment, execution
or similar process against any substantial part of the property of any
Restricted Subsidiary; and continuance of any such event for 60 consecutive
80
days unless dismissed, bonded to the satisfaction of the court having
jurisdiction in the premises or discharged; or
(e) taking any action authorizing, or in furtherance of,
any of the foregoing by the Borrower, the Managing General Partner or any
Restricted Subsidiary.
Section 9.1.9 IMPAIRMENT OF SECURITY, ETC. Any of the
Security Documents or documents guaranteeing the Notes shall cease in any
material respect to be in full force and effect or shall be declared to be
null and void in whole or in a material part by the final judgment (which is
non-appealable or has not been stayed pending appeal or as to which all
rights to appeal have expired or have been exhausted) of a court or other
governmental or regulatory authority having jurisdiction or the validity or
enforceability thereof shall be contested by or on behalf of the Borrower or
any Restricted Subsidiary or the Borrower or any Restricted Subsidiary shall
renounce any of the same or deny that it has any or further liability
thereunder.
Section 9.1.10 SPLIT-UP. Any order, judgment or decree is
entered in any proceeding against the Borrower decreeing a split-up of the
Borrower which requires the divestiture of assets representing a substantial
part, or the divestiture of the stock of a Restricted Subsidiary whose assets
represent a substantial part, of the consolidated assets of the Borrower and
Subsidiaries (determined in accordance with GAAP) or which requires the
divestiture of assets, or stock of a Restricted Subsidiary, which shall have
contributed a substantial part of the consolidated Net Income of the Borrower
and the Restricted 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 60 days after entry
thereof, or in the event of such a stay, such order, judgment or decree or
decree shall not be dismissed within 60 days after such stay expires.
Section 9.1.11 GENERAL PARTNERS. Any change to any Organic
Document of either General Partner which would have a material adverse effect
on the condition (financial or otherwise), business, operations, assets or
properties of the Borrower and its Subsidiaries (taken as a whole).
Section 9.2 ACTION IF BANKRUPTCY. If any Event of Default described
in SECTION 9.1.8 shall occur, the Commitments and any obligation of the
Issuer to issue Letters of Credit (if not theretofore terminated) shall
automatically terminate and the outstanding principal amount of all
outstanding Loans, the maximum aggregate amount that is or at any time
thereafter may become available for drawing under any outstanding Letters of
Credit and all other Obligations shall automatically be and become
immediately due and payable, without presentment, demand, protest or other
notice of any kind, all of which are hereby expressly waived by the Borrower.
Section 9.3 ACTION IF OTHER EVENT OF DEFAULT.
(a) If any Event of Default (other than any Event of
Default described in SECTION 9.1.8) shall occur for any reason, whether
voluntary or involuntary, and be continuing, the Agent, upon the direction of
the Required Lenders, shall by notice to the Borrower:
81
(i) declare the commitment of each Lender to make
Loans and any obligation of the Issuer to issue Letters of Credit to be
terminated, whereupon such commitments and obligation shall be
terminated;
(ii) declare an amount equal to the maximum aggregate
amount that is or at any time thereafter may become available for
drawing under any outstanding Letters of Credit (whether or not any
beneficiary shall have presented, or shall be entitled at such time to
present, the drafts or other documents required to draw under such
Letters of Credit) to be immediately due and payable as cash collateral
for the obligations thereunder;
(iii) declare the unpaid principal amount of all
outstanding Loans, all interest accrued and unpaid thereon, and all
other amounts owing or payable hereunder or under any other Loan
Document to be immediately due and payable (including, without
limitation, amounts due under SECTION 5.4), without presentment,
demand, protest or other notice of any kind, all of which are hereby
expressly waived by the Borrower; and
(iv) exercise on behalf of itself and the Lenders all
rights and remedies available to it and the Lenders under the Loan
Documents or applicable law;
(b) The right of the Lenders to make any declaration or
acceleration by virtue of an Event of Default described in SECTIONS 9.1.1
-9.1.11 (excluding, however, proceedings under SECTION 9.1.8), however, is
subject to the condition that if, at, any time before such declaration, such
Event of Default is cured by or for the account of the Borrower, then in
every such case any such default and its consequences shall be deemed to be
annulled, but no such annulment shall extend to or affect any subsequent
default or impair or exhaust any right or power consequent thereon.
(c) The affirmative vote of Lenders holding at least
66-2/3% of the outstanding principal amount of the Obligations may rescind or
annul the acceleration at any time; PROVIDED, THAT, all Events of Default
have been cured or waived at such time.
(d) The rights provided for in this Agreement and the other
Loan Documents are cumulative and are not exclusive of any other rights,
powers, privileges or remedies provided by law or in equity, or under any
other instrument, document or agreement now existing or hereafter arising.
ARTICLE X
THE AGENT
Section 10.1 APPOINTMENT AND AUTHORIZATION. ERROR! BOOKMARK NOT
DEFINED. Each Lender hereby irrevocably (subject to SECTION 10.9) appoints,
designates and authorizes the Agent to take such action on its behalf under
the provisions of this Agreement and each other Loan Document and to exercise
such powers and perform such duties as are expressly delegated
82
to it by the terms of this Agreement or any other Loan Document, together
with such powers as are reasonably incidental thereto. Notwithstanding any
provision to the contrary contained elsewhere in this Agreement or in any
other Loan Document, the Agent shall not have any duties or responsibilities,
except those expressly set forth herein, nor shall the Agent have or be
deemed to have any fiduciary relationship with any Lender, and no implied
covenants, functions, responsibilities, duties, obligations or liabilities
shall be read into this Agreement or any other Loan Document or otherwise
exist against the Agent.
(b) The Issuer shall act on behalf of the Lenders with
respect to any Letters of Credit issued by it and the documents associated
therewith until such time and (except for so long as the Agent has agreed
herein or may agree at the request of the Required Lenders) to act for the
Issuer with respect thereto; PROVIDED, HOWEVER, that the Issuer shall have
all of the benefits and immunities (i) provided to the Agent in this ARTICLE
X with respect to any acts taken or omissions suffered by the Issuing Lender
in connection with Letters of Credit issued by it or proposed to be issued by
it and the application and agreements for letters of credit pertaining to the
Letters of Credit as fully as if the term "Agent", as used in this ARTICLE X,
included the Issuer with respect to such acts or omissions, and (ii) as
additionally provided in this Agreement with respect to the Issuer.
Section 10.2 DELEGATION OF DUTIES. The Agent may execute any of its
duties under this Agreement or any other Loan Document by or through agents,
employees or attorneys-in-fact and shall be entitled to advice of counsel
concerning all matters pertaining to such duties. The Agent shall not be
responsible for the negligence or misconduct of any agent or attorney-in-fact
that it selects with reasonable care.
Section 10.3 LIABILITY OF AGENT. None of the Agent-Related Persons
shall (i) be liable for any action taken or omitted to be taken by any of
them under or in connection with this Agreement or any other Loan Document or
the transactions contemplated hereby (except for its own gross negligence or
willful misconduct), or (ii) be responsible in any manner to any of the
Lenders for any recital, statement, representation or warranty made by the
Borrower or any Subsidiary or Affiliate of the Borrower, or any officer
thereof, contained in this Agreement or in any other Loan Document, or in any
certificate, report, statement or other document referred to or provided for
in, or received by the Agent under or in connection with, this Agreement or
any other Loan Document, or for the value or title to any Collateral or the
validity, effectiveness, genuineness, enforceability or sufficiency of this
Agreement or any other Loan Document, or for any failure of the Borrower or
any other party to any Loan Document to perform its obligations hereunder or
thereunder. No Agent-Related Person shall be under any obligation to any
Lender to ascertain or to inquire as to the observance or performance of any
of the agreements contained in, or conditions of, this Agreement or any other
Loan Document, or to inspect the properties, books or records of the Borrower
or any of the Borrower's Subsidiaries or Affiliates.
Section 10.4 RELIANCE BY AGENT. ERROR! BOOKMARK NOT DEFINED. The
Agent shall be entitled to rely, and shall be fully protected in relying,
upon any writing, resolution, notice, consent, certificate, affidavit,
letter, telegram, facsimile, telex or telephone message, statement or other
document or conversation believed by it to be genuine and correct and to have
83
been signed, sent or made by the proper Person or Persons, and upon advice
and statements of legal counsel (including counsel to the Borrower),
independent accountants and other experts selected by the Agent. The Agent
shall be fully justified in failing or refusing to take any action under this
Agreement or any other Loan Document unless it shall first receive such
advice or concurrence of the Required Lenders as it deems appropriate and, if
it so requests, it shall first be indemnified to its satisfaction by the
Lenders against any and all liability and expense which may be incurred by it
by reason of taking or continuing to take any such action. The Agent shall in
all cases be fully protected in acting, or in refraining from acting, under
this Agreement or any other Loan Document in accordance with a request or
consent of the Required Lenders and such request and any action taken or
failure to act pursuant thereto shall be binding upon all of the Lenders.
(b) For purposes of determining compliance with the
conditions specified in SECTION 6.1, each Lender that has executed this
Agreement shall be deemed to have consented to, approved or accepted or to be
satisfied with, each document or other matter either sent by the Agent to
such Lender for consent, approval, acceptance or satisfaction, or required
thereunder to be consented to or approved by or acceptable or satisfactory to
the Lender.
Section 10.5 NOTICE OF DEFAULT. The Agent shall not be deemed to
have knowledge or notice of the occurrence of any Default or Event of
Default, except with respect to defaults in the payment of principal,
interest and fees required to be paid to the Agent for the account of the
Lenders, unless the Agent shall have received written notice from a Lender or
the Borrower referring to this Agreement, describing such Default or Event of
Default and stating that such notice is a "notice of default". The Agent will
notify the Lenders of its receipt of any such notice. The Agent shall take
such action with respect to such Default or Event of Default as may be
requested by the Required Lenders in accordance with ARTICLE IX; PROVIDED,
HOWEVER, that unless and until the Agent has received any such request, the
Agent may (but shall not be obligated to) take such action, or refrain from
taking such action, with respect to such Default or Event of Default as it
shall deem advisable or in the best interest of the Lenders.
Section 10.6 CREDIT DECISION. Each Lender acknowledges that none of
the Agent-Related Persons has made any representation or warranty to it, and
that no act by the Agent hereinafter taken, including any review of the
affairs of the Borrower and its Subsidiaries, shall be deemed to constitute
any representation or warranty by any Agent-Related Person to any Lender.
Each Lender represents to the Agent that it has, independently and without
reliance upon any Agent-Related Person and based on such documents and
information as it has deemed appropriate, made its own appraisal of and
investigation into the business, prospects, operations, property, financial
and other condition and creditworthiness of the Borrower and its
Subsidiaries, and all applicable bank regulatory laws relating to the
transactions contemplated hereby, and made its own decision to enter into
this Agreement and to extend credit to the Borrower and its Subsidiaries
hereunder. Each Lender also represents that it will, independently and
without reliance upon any Agent-Related Person and based on such documents
and information as it shall deem appropriate at the time, continue to make
its own credit analysis, appraisals and decisions in taking or not taking
action under this Agreement and the other Loan Documents, and to make such
investigations as it deems necessary to inform itself as to the business,
prospects,
84
operations, property, financial and other condition and creditworthiness of
the Borrower. Except for notices, reports and other documents expressly
herein required to be furnished to the Lenders by the Agent, the Agent shall
not have any duty or responsibility to provide any Lender with any credit or
other information concerning the business, prospects, operations, property,
financial and other condition or creditworthiness of the Borrower which may
come into the possession of any of the Agent-Related Persons.
Section 10.7 INDEMNIFICATION OF AGENT. Whether or not the
transactions contemplated hereby are consummated, the Lenders shall indemnify
upon demand the Agent-Related Persons (to the extent not reimbursed by or on
behalf of the Borrower and without limiting the obligation of the Borrower to
do so), pro rata, from and against any and all Indemnified Liabilities;
PROVIDED, HOWEVER, that no Lender shall be liable for the payment to the
Agent-Related Persons of any portion of such Indemnified Liabilities
resulting solely from such Person's gross negligence or willful misconduct.
Without limitation of the foregoing, each Lender shall reimburse the Agent
upon demand for its ratable share of any costs or out-of-pocket expenses
(including attorney costs) incurred by the Agent in connection with the
preparation, execution, delivery, administration, modification, amendment or
enforcement (whether through negotiations, legal proceedings or otherwise)
of, or legal advice in respect of rights or responsibilities under, this
Agreement, any other Loan Document, or any document contemplated by or
referred to herein, to the extent that the Agent is not reimbursed for such
expenses by or on behalf of the Borrower. The undertaking in this Section
shall survive the payment of all Obligations hereunder and the resignation or
replacement of the Agent.
Section 10.8 AGENT IN INDIVIDUAL CAPACITY. BofA and each other
Lender that may become the Agent and their respective Affiliates may make
loans to, issue letters of credit for the account of, accept deposits from,
acquire equity interests in and generally engage in any kind of banking,
trust, financial advisory, underwriting or other business with the Borrower
and its Subsidiaries and Affiliates as though BofA (or such other Lender)
were not the Agent or the Issuer hereunder and without notice to or consent
of the Lenders. The Lenders acknowledge that, pursuant to such activities,
BofA (or such other Lender) or their respective Affiliates may receive
information regarding the Borrower or its Affiliates (including information
that may be subject to confidentiality obligations in favor of the Borrower
or such Subsidiary) and acknowledge that the Agent shall be under no
obligation to provide such information to them. With respect to its Loans,
BofA (or other Lender) shall have the same rights and powers under this
Agreement as any other Lender and may exercise the same as though it were not
the Agent or the Issuer.
Section 10.9 SUCCESSOR AGENT. The Agent may, and at the request of
the Required Lenders shall, resign as Agent upon 30 days' notice to the
Lenders. If the Agent resigns under this Agreement, the Required Lenders
shall appoint from among the Lenders a successor agent for the Lenders. If no
successor agent is appointed prior to the effective date of the resignation
of the Agent, the Agent may appoint, after consulting with the Lenders and
the Borrower, a successor agent from among the Lenders. Upon the acceptance
of its appointment as successor agent hereunder, such successor agent shall
succeed to all the rights, powers and duties of the retiring Agent and the
term "Agent" shall mean such successor agent and the retiring Agent's
appointment, powers and duties as Agent shall be terminated. After any
retiring Agent's
85
resignation hereunder as Agent, the provisions of this ARTICLE X and SECTIONS
11.4 and 11.5 shall inure to its benefit as to any actions taken or omitted
to be taken by it while it was Agent under this Agreement. If no successor
agent has accepted appointment as Agent by the date which is 30 days
following a retiring Agent's notice of resignation, the retiring Agent's
resignation shall nevertheless thereupon become effective and the Lenders
shall perform all of the duties of the Agent hereunder until such time, if
any, as the Required Lenders appoint a successor agent as provided for above.
Any successor agent shall have a market capitalization equal to or greater
than $500,000,000. Notwithstanding the foregoing, BofA may not be removed as
the Agent at the request of the Required Lenders unless BofA shall also
simultaneously be replaced as the Issuer hereunder pursuant to documentation
in form and substance reasonably satisfactory to BofA.
Section 10.10 WITHHOLDING TAX. ERROR! BOOKMARK NOT DEFINED. If any
Lender is a "foreign corporation, partnership or trust" within the meaning of
the Code and such Lender claims exemption from, or a reduction of, U.S.
withholding tax under Sections 1441 or 1442 of the Code, such Lender agrees
with and in favor of the Agent and the Borrower, to deliver to the Agent
(with a copy to the Borrower):
(i) if such Lender claims an exemption from, or a
reduction of, withholding tax under a United States tax treaty,
properly completed IRS Forms 1001 and W-8 (or any successor forms)
before the payment of any interest in the first calendar year and
before the payment of any interest, in each third succeeding calendar
year during which interest may be paid under this Agreement;
(ii) if such Lender claims that interest paid under
this Agreement is exempt from United States withholding tax because it
is effectively connected with a United States trade or business of such
Lender, two properly completed and executed copies of IRS Form 4224 (or
any successor form) before the payment of any interest is due in the
first taxable year of such Lender and in each succeeding taxable year
of such Lender during which interest may be paid under this Agreement,
and IRS Form W-9 (or any successor form); and
(iii) such other form or forms as may be required
under the Code or other laws of the United States as a condition to
exemption from, or reduction of, United States withholding tax.
SUCH LENDER AGREES TO PROMPTLY NOTIFY THE AGENT AND THE BORROWER OF ANY
CHANGE IN CIRCUMSTANCES WHICH WOULD MODIFY OR RENDER INVALID ANY CLAIMED
EXEMPTION OR REDUCTION.
(b) If any Lender claims exemption from, or reduction of,
withholding tax under a United States tax treaty by providing IRS Form 1001
and such Lender sells, assigns, grants a participation in, or otherwise
transfers all or part of the Obligations of the Borrower to such Lender, such
Lender agrees to notify the Agent of the percentage amount in which it is no
longer the beneficial owner of Obligations of the Borrower to such Lender. To
the extent of such percentage amount, the Agent will treat such Lender's IRS
Form 1001 as no longer valid.
86
(c) If any Lender claiming exemption from United States
withholding tax by filing IRS Form 4224 with the Agent sells, assigns, grants
a participation in, or otherwise transfers all or part of the Obligations of
the Borrower to such Lender, such Lender agrees to undertake sole
responsibility for complying with the withholding tax requirements imposed by
Sections 1441 and 1442 of the Code.
(d) If any Lender is entitled to a reduction in the
applicable withholding tax, the Agent may withhold from any interest payment
to such Lender an amount equivalent to the applicable withholding tax after
taking into account such reduction. If the forms or other documentation
required by SUBSECTION (a) of this Section are not delivered to the Agent,
then the Agent may withhold from any interest payment to such Lender not
providing such forms or other documentation an amount equivalent to the
applicable withholding tax.
(e) If the IRS or any other Government Authority of the
United States or other jurisdiction asserts a claim that the Agent did not
properly withhold tax from amounts paid to or for the account of any Lender
(because the appropriate form was not delivered, was not properly executed,
or because such Lender failed to notify the Agent of a change in
circumstances which rendered the exemption from, or reduction of, withholding
tax ineffective, or for any other reason) such Lender shall indemnify the
Agent fully for all amounts paid, directly or indirectly, by the Agent as tax
or otherwise, including penalties and interest, and including any taxes
imposed by any jurisdiction on the amounts payable to the Agent under this
Section, together with all costs and expenses (including attorney costs). The
obligation of the Lenders under this subsection shall survive the payment of
all Obligations and the resignation or replacement of the Agent.
Section 10.11 COLLATERAL MATTERS.
Except as otherwise expressly provided in the Intercreditor
Agreement:
(a) The Agent is authorized on behalf of all the Lenders,
without the necessity of any notice to or further consent from the Lenders,
from time to time to take any action with respect to any Collateral or the
Security Documents which may be necessary to perfect and maintain perfected
the security interest in and Liens upon the Collateral granted pursuant to
the Security Documents.
(b) The Lenders irrevocably authorize the Agent, at its
option and in its discretion, to authorize the release of any Lien granted
for the benefit of the Agent and the Lenders upon any Collateral (i) upon
termination of the Commitments and payment in full of all Loans and all other
Obligations known to the Agent and payable under this Agreement or any other
Loan Document; (ii) constituting property sold or to be sold or disposed of
as part of or in connection with any disposition permitted hereunder; (iii)
constituting property in which the Borrower or any Subsidiary owned no
interest at the time the Lien was granted or at any time thereafter; (iv)
constituting property leased to the Borrower or any Subsidiary under a lease
which has expired or been terminated in a transaction permitted under this
Agreement or is about to expire and which has not been, and is not intended
by the Borrower or such Subsidiary to be, renewed or extended; (v) consisting
of an instrument evidencing Indebtedness or other debt
87
instrument, if the indebtedness evidenced thereby has been paid in full; or
(vi) if approved, authorized or ratified in writing by the Required Lenders
or all the Lenders, as the case may be, as provided in SECTION 11.1. Upon
request by the Agent at any time, the Lenders will confirm in writing the
Agent's authority to authorize the release of particular types or items of
Collateral pursuant to this SECTION 10.11(b).
(c) Each Lender agrees with and in favor of each other
(which agreement shall not be for the benefit of the Borrower or any
Subsidiary) that the Borrower's and the other Obligors' obligations to such
Lender under this Agreement and the other Loan Documents is not and shall not
be secured by any Lien on real property collateral now or hereafter granted
to such Lender.
ARTICLE XI
MISCELLANEOUS PROVISIONS
Section 11.1 WAIVERS, AMENDMENTS, ETC. Except as expressly provided
in the Intercreditor Agreement, the provisions of this Agreement and of each
other Loan Document may from time to time be amended, modified or waived, if
such amendment, modification or waiver is in writing and consented to by the
Borrower and the Required Lenders; PROVIDED, HOWEVER, that no such amendment,
modification or waiver which would:
(a) modify any requirement hereunder that any particular
action be taken by all the Lenders or by the Required Lenders shall be
effective unless consented to by each Lender;
(b) modify this SECTION 11.1, change the definition of
"REQUIRED LENDERS", increase any Commitment Amount or the Percentage of any
Lender, reduce any fees described in ARTICLE III, release any substantial
portion of collateral security, except as otherwise specifically provided in
any Loan Document, extend the Loan Commitment Termination Date or Stated
Maturity Dates (other than pursuant to SECTION 3.1.1) or change the interest
provisions contained in SECTION 3.2 shall be made without the consent of each
Lender and each holder of a Note;
(c) extend the due date for, or reduce the amount of, any
scheduled repayment or prepayment of principal of or interest on any Loan (or
reduce the principal amount of or rate of interest on any Loan) shall be made
without the consent of the holder of that Note evidencing such Loan; or
(d) affect adversely the interests, rights or obligations
of the Agent shall be made without consent of the Agent.
Notwithstanding the foregoing, increases in the Working Capital Loan
Commitments in accordance with SECTION 2.8 shall not require the consent of
each Lender and each holder of a Note.
88
NO FAILURE OR DELAY ON THE PART OF THE AGENT, ANY LENDER OR THE HOLDER OF ANY
NOTE IN EXERCISING ANY POWER OR RIGHT UNDER THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENT SHALL OPERATE AS A WAIVER THEREOF, NOR SHALL ANY SINGLE OR PARTIAL
EXERCISE OF ANY SUCH POWER OR RIGHT PRECLUDE ANY OTHER OR FURTHER EXERCISE
THEREOF OR THE EXERCISE OF ANY OTHER POWER OR RIGHT. NO NOTICE TO OR DEMAND
ON THE BORROWER IN ANY CASE SHALL ENTITLE IT TO ANY NOTICE OR DEMAND IN
SIMILAR OR OTHER CIRCUMSTANCES. NO WAIVER OR APPROVAL BY THE AGENT, ANY
LENDER OR THE HOLDER OF ANY NOTE UNDER THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENT SHALL, EXCEPT AS MAY BE OTHERWISE STATED IN SUCH WAIVER OR APPROVAL,
BE APPLICABLE TO SUBSEQUENT TRANSACTIONS. NO WAIVER OR APPROVAL HEREUNDER
SHALL REQUIRE ANY SIMILAR OR DISSIMILAR WAIVER OR APPROVAL THEREAFTER TO BE
GRANTED HEREUNDER.
Section 11.2 NOTICES. All notices and other communications provided
to any party hereto under this Agreement or any other Loan Document shall be
in writing or by Telex or by facsimile and addressed, delivered or
transmitted to such party at its address, Telex or facsimile number set forth
below its signature hereto or, with respect to Persons that become Lenders
after the date hereof, set forth in the Assignment and Acceptance Agreement
or at such other address, Telex or facsimile number as may be designated by
such party in a notice to the other parties. Any notice, if mailed and
properly addressed with postage prepaid or if properly addressed and sent by
pre-paid courier service, shall be deemed given when received; any notice, if
transmitted by Telex or facsimile, shall be deemed given when transmitted
(answerback confirmed in the case of Telexes).
Section 11.3 PAYMENT OF COSTS AND EXPENSES. The Borrower agrees to
pay on demand all reasonable expenses of the Agent and the Arranger
(including the reasonable fees and out-of-pocket expenses of counsel to the
Agent and the Arranger and of local counsel, if any, who may be retained by
counsel to the Agent) in connection with
(a) the negotiation, preparation, execution, delivery and
syndication of this Agreement and of each other Loan Document, including
schedules and exhibits, and any amendments, waivers, consents, supplements or
other modifications to this Agreement or any other Loan Document as may from
time to time hereafter be required, whether or not the transactions
contemplated hereby are consummated,
(b) the filing, recording, refiling or re-recording of the
Security Agreement and/or any Uniform Commercial Code financing statements
relating thereto and all amendments, supplements and modifications to any
thereof and any and all other documents or instruments of further assurance
required to be filed or recorded or refiled or re-recorded by the terms
hereof or of the Security Agreement, and
(c) the preparation and review of the form of any document
or instrument relevant to this Agreement or any other Loan Document.
THE BORROWER FURTHER AGREES TO PAY, AND TO SAVE THE AGENT, THE ARRANGER AND
THE LENDERS HARMLESS FROM ALL LIABILITY FOR, ANY STAMP OR OTHER TAXES WHICH
MAY BE PAYABLE IN CONNECTION WITH THE EXECUTION OR DELIVERY OF THIS
AGREEMENT, THE BORROWINGS HEREUNDER, OR THE ISSUANCE OF THE NOTES OR ANY
OTHER LOAN DOCUMENTS. THE BORROWER ALSO AGREES TO REIMBURSE THE AGENT,
89
THE ARRANGER AND EACH LENDER UPON DEMAND FOR ALL REASONABLE OUT-OF-POCKET
EXPENSES (INCLUDING REASONABLE ATTORNEYS' FEES AND LEGAL EXPENSES) INCURRED
BY THE AGENT, THE ARRANGER OR SUCH LENDER IN CONNECTION WITH (x) THE
NEGOTIATION OF ANY RESTRUCTURING OR "WORK-OUT" WHETHER OR NOT CONSUMMATED, OF
ANY OBLIGATIONS AND (y) THE ENFORCEMENT OF ANY OBLIGATIONS.
Section 11.4 INDEMNIFICATION. In consideration of the execution and
delivery of this Agreement by each Lender and the extension of the
Commitments, the Borrower hereby indemnifies, exonerates and holds the Agent,
the Arranger and each Lender and each of their respective officers,
directors, employees and agents (collectively, the "INDEMNIFIED PARTIES")
free and harmless from and against any and all actions, causes of action,
suits, losses, costs, liabilities and damages, and expenses incurred in
connection therewith (irrespective of whether any such Indemnified Party is a
party to the action for which indemnification hereunder is sought), including
reasonable attorneys' fees and disbursements (collectively, the "INDEMNIFIED
LIABILITIES"), incurred by the Indemnified Parties or any of them as a result
of, or arising out of, or relating to
(a) any transaction financed or to be financed in whole or
in part, directly or indirectly, with the proceeds of any Loan or the use of
any Letter of Credit;
(b) the entering into and performance of this Agreement and
any other Loan Document by any of the Indemnified Parties;
(c) any investigation, litigation or proceeding related to
any acquisition or proposed acquisition by the Borrower or any Subsidiaries
of all or any portion of the stock or assets of any Person, whether or not
the Agent or such Lender is party thereto;
(d) any investigation, litigation or proceeding related to
any environmental cleanup, audit, compliance or other matter relating to the
protection of the environment or the Release by the Borrower or any
Subsidiary of any Hazardous Material; or
(e) the presence on or under, or the escape, seepage,
leakage, spillage, discharge, emission, discharging or releases from, any
real property owned or operated by the Borrower or any Subsidiary of any
Hazardous Material (including any losses, liabilities, damages, injuries,
costs, expenses or claims asserted or arising under any Environmental Law),
regardless of whether caused by, or within the control of, the Borrower or
such Subsidiary,
EXCEPT FOR ANY SUCH INDEMNIFIED LIABILITIES ARISING FOR THE ACCOUNT OF A
PARTICULAR INDEMNIFIED PARTY BY REASON OF THE RELEVANT INDEMNIFIED PARTY'S
GROSS NEGLIGENCE OR WILLFUL MISCONDUCT. IF AND TO THE EXTENT THAT THE
FOREGOING UNDERTAKING MAY BE UNENFORCEABLE FOR ANY REASON, THE BORROWER
HEREBY AGREES TO MAKE THE MAXIMUM CONTRIBUTION TO THE PAYMENT AND
SATISFACTION OF EACH OF THE INDEMNIFIED LIABILITIES WHICH IS PERMISSIBLE
UNDER APPLICABLE LAW.
Section 11.5 SURVIVAL. The obligations of the Borrower under SECTION
5,3, 5.4, 5.5, 5.6, 11.3 and 11.4, and the obligations of the Lenders under
SECTION 10.1, shall in each case survive until the applicable statute of
limitations has run on the bringing of any action thereon any termination of
this Agreement, the payment in full of all Obligations and the termination of
all Commitments. The representations and warranties made by each Obligor in
this Agreement
90
and in each other Loan Document shall survive the execution and delivery of
this Agreement and each such other Loan Document.
Section 11.6 SEVERABILITY. Any provision of this Agreement or any
other Loan Document which is prohibited or unenforceable in any jurisdiction
shall, as to such provision and such jurisdiction, be ineffective to the
extent of such prohibition or unenforceability without invalidating the
remaining provisions of this Agreement or such Loan Document or affecting the
validity or enforceability of such provision in any other jurisdiction.
Section 11.7 HEADINGS. The various headings of this Agreement and of
each other Loan Document are inserted for convenience only and shall not
affect the meaning or interpretation of this Agreement or such other Loan
Document or any provisions hereof or thereof.
Section 11.8 EXECUTION IN COUNTERPARTS, EFFECTIVENESS, ETC. This
Agreement may be executed by the parties hereto in several counterparts, all
of which shall constitute together but one and the same agreement. This
Agreement shall become effective when counterparts hereof executed on behalf
of the Borrower, the Agent and each Lender (or notice thereof satisfactory to
the Agent) shall have been received by the Agent and notice thereof shall
have been given by the Agent to the Borrower and each Lender. Transmission by
telecopier of an executed counterpart of this Agreement shall be deemed to
constitute due and sufficient delivery of such counterpart.
Section 11.9 GOVERNING LAW; ENTIRE AGREEMENT. THIS AGREEMENT, THE
NOTES AND EACH OTHER LOAN DOCUMENT SHALL EACH BE DEEMED TO BE A CONTRACT MADE
UNDER AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF NEW YORK. On the
Refunding Effective Date, this Agreement, the Notes, the Security Agreement
and the other Loan Documents shall constitute the entire understanding among
the parties hereto with respect to the subject matter hereof and supersede
any prior agreements, written or oral, with respect thereto (including any
commitment letters or term sheets).
Section 11.10 SUCCESSORS AND ASSIGNS. This Agreement shall be
binding upon and shall inure to the benefit of the parties hereto and their
respective successors and assigns; PROVIDED, HOWEVER, that:
(a) the Borrower may not assign or transfer its rights or
obligations hereunder without the prior written consent of the Agent and all
Lenders (and any attempted or purported assignment or transfer in
contravention of the foregoing shall be null and void); and
(b) the rights of sale, assignment and transfer of the
Lenders are subject to SECTION 11.11.
Section 11.11 SALE AND TRANSFER OF LOANS AND NOTES; PARTICIPATIONS
IN ITS LOANS AND NOTES. Each Lender may assign or sell participations in, its
Loans and Commitments to one or more other Persons in accordance with this
SECTION 11.11.
91
Section 11.11.1 ASSIGNMENTS. Any Lender,
(a) with the written consents of the Borrower and the Agent
(which consents shall not be unreasonably delayed or withheld and which
consent, in the case of the Borrower, shall be deemed to have been given in
the absence of a written notice delivered by the Borrower to the Agent, on or
before the fifth Business Day after receipt by the Borrower of such Lender's
request for consent, stating, in reasonable detail, the reasons why the
Borrower proposes to withhold such consent) may at any time assign and
delegate to one or more commercial banks or other financial institutions;
PROVIDED that such consent of the Borrower shall not be required at any time
a Default has occurred and is continuing, and
(b) with notice to the Borrower and the Agent, but without
the consent of the Borrower or the Agent, may assign and delegate to any of
its Affiliates or to any other Lender
(EACH PERSON DESCRIBED IN EITHER OF THE FOREGOING CLAUSES AS BEING THE PERSON
TO WHOM SUCH ASSIGNMENT AND DELEGATION IS TO BE MADE, BEING HEREINAFTER
REFERRED TO AS AN "ASSIGNEE LENDER"), ALL OR ANY RATABLE PART OF SUCH
LENDER'S TOTAL LOANS AND COMMITMENTS, PRO-RATED IN ACCORDANCE WITH THE
RESPECTIVE AMOUNTS OF THE ACQUISITION LOAN COMMITMENT (IF ANY) AND THE
WORKING CAPITAL LOAN COMMITMENT OF SUCH LENDER, IN A MINIMUM AGGREGATE AMOUNT
OF $5,000,000; PROVIDED, HOWEVER, THAT ANY SUCH ASSIGNEE LENDER WILL COMPLY,
IF APPLICABLE, WITH THE PROVISIONS CONTAINED IN THE LAST SENTENCE OF SECTION
5.6 AND IN SECTION 10.10 AND PROVIDED, FURTHER, HOWEVER, THAT THE BORROWER,
EACH OTHER OBLIGOR AND THE AGENT SHALL BE ENTITLED TO CONTINUE TO DEAL SOLELY
AND DIRECTLY WITH SUCH LENDER IN CONNECTION WITH THE INTERESTS SO ASSIGNED
AND DELEGATED TO AN ASSIGNEE LENDER UNTIL
(c) written notice of such assignment and delegation,
together with payment instructions, addresses and related information with
respect to such Assignee Lender, shall have been given to the Borrower and
the Agent by such Lender and such Assignee Lender,
(d) such Assignee Lender shall have executed and delivered
to the Borrower and the Agent an Assignment and Acceptance Agreement,
accepted by the Agent, and
(e) the processing fees described below shall have been
paid.
FROM AND AFTER THE DATE THAT THE AGENT ACCEPTS SUCH ASSIGNMENT AND ACCEPTANCE
AGREEMENT, (x) THE ASSIGNEE LENDER THEREUNDER SHALL BE DEEMED AUTOMATICALLY
TO HAVE BECOME A PARTY HERETO AND TO THE EXTENT THAT RIGHTS AND OBLIGATIONS
HEREUNDER HAVE BEEN ASSIGNED AND DELEGATED TO SUCH ASSIGNEE LENDER IN
CONNECTION WITH SUCH ASSIGNMENT AND ACCEPTANCE AGREEMENT, SHALL HAVE THE
RIGHTS AND OBLIGATIONS OF A LENDER HEREUNDER AND UNDER THE OTHER LOAN
DOCUMENTS, AND (y) THE ASSIGNOR LENDER, TO THE EXTENT THAT RIGHTS AND
OBLIGATIONS HEREUNDER HAVE BEEN ASSIGNED AND DELEGATED BY IT IN CONNECTION
WITH SUCH ASSIGNMENT AND ACCEPTANCE AGREEMENT, SHALL BE RELEASED FROM ITS
OBLIGATIONS HEREUNDER AND UNDER THE OTHER LOAN DOCUMENTS. SUCH ASSIGNEE
LENDER MUST ALSO PAY A PROCESSING FEE TO THE AGENT UPON DELIVERY OF ANY
ASSIGNMENT AND ACCEPTANCE AGREEMENT IN THE AMOUNT OF $3,500. ANY ATTEMPTED
ASSIGNMENT AND DELEGATION NOT MADE IN ACCORDANCE WITH THIS SECTION 11.11.1
SHALL BE NULL AND VOID.
92
Section 11.11.2 PARTICIPATIONS. Any Lender may at any time
sell to one or more commercial banks or other Persons (each of such
commercial banks and other Persons being herein called a "PARTICIPANT")
participating interests (or a subparticipating interest, in the case of a
Lender's participating interest in a Letter of Credit) in any of the Loans,
Commitments, or other interests of such Lender hereunder; PROVIDED, HOWEVER,
that
(a) no participation contemplated in this SECTION 11.11
shall relieve such Lender from its Commitments or its other obligations
hereunder or under any other Loan Document,
(b) such Lender shall remain solely responsible for the
performance of its Commitments and such other obligations,
(c) the Borrower, each other Obligor and the Agent shall
continue to deal solely and directly with such Lender in connection with such
Lender's rights and obligations under this Agreement and each of the other
Loan Documents,
(d) no Participant, unless such Participant is an Affiliate
of such Lender, or is itself a Lender, shall be entitled to require such
Lender to take or refrain from taking any action hereunder or under any other
Loan Document, except that such Lender may agree with any Participant that
such Lender will not, without such Participant's consent, take any actions of
the type described in CLAUSE (b) or (c) of SECTION 11.1, and
(e) the Borrower shall not be required to pay any amount
under SECTIONS 5.3, 5.4, 5.5 OR 5.6 that is greater than the amount which it
would have been required to pay had no participating interest been sold.
THE BORROWER ACKNOWLEDGES AND AGREES THAT, SUBJECT TO THE PRECEDING SENTENCE,
EACH PARTICIPANT, FOR PURPOSES OF SECTIONS 5.3, 5.4, 5.5, 5.6, 5.8, 5.9, 11.3
AND 11.4, SHALL BE CONSIDERED A LENDER.
Section 11.12 OTHER TRANSACTIONS. Nothing contained herein shall
preclude the Agent, the Arranger or any other Lender from engaging in any
transaction, in addition to those contemplated by this Agreement or any other
Loan document, with the Borrower or any of the Borrower's Affiliates in which
the Borrower or such Affiliate is not restricted hereby from engaging with
any other Person.
Section 11.13 FORUM SELECTION AND CONSENT TO JURISDICTION. ANY
LITIGATION BASED ON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE OF
DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF THE AGENT, THE
LENDERS OR THE BORROWER SHALL BE BROUGHT AND MAINTAINED EXCLUSIVELY IN THE
COURTS OF THE STATE OF NEW YORK OR IN THE UNITED STATES DISTRICT COURT FOR
THE SOUTHERN DISTRICT OF NEW YORK PROVIDED, HOWEVER, THAT ANY SUIT SEEKING
ENFORCEMENT AGAINST ANY COLLATERAL OR OTHER PROPERTY MAY BE BROUGHT, EXCEPT
AS OTHERWISE EXPRESSLY PROVIDED IN THE INTERCREDITOR AGREEMENT, AT
93
THE AGENT'S OPTION, IN THE COURTS OF AND JURISDICTION WHERE SUCH COLLATERAL
OR OTHER PROPERTY MAY BE FOUND. THE BORROWER HEREBY EXPRESSLY AND IRREVOCABLY
SUBMITS TO THE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK AND OF THE
UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK FOR THE
PURPOSE OF ANY SUCH LITIGATION AS SET FORTH ABOVE AND IRREVOCABLY AGREES TO
BE BOUND BY ANY JUDGMENT RENDERED THEREBY IN CONNECTION WITH SUCH LITIGATION.
THE BORROWER FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS BY
REGISTERED MAIL, POSTAGE PREPAID, OR BY PERSONAL SERVICE WITHIN OR WITHOUT
THE STATE OF NEW YORK. THE BORROWER HEREBY EXPRESSLY AND IRREVOCABLY WAIVES,
TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY HAVE OR
HEREAFTER MAY HAVE TO THE LAYING OF VENUE OF ANY SUCH LITIGATION BROUGHT IN
ANY SUCH COURT REFERRED TO ABOVE AND ANY CLAIM THAT ANY SUCH LITIGATION HAS
BEEN BROUGHT IN AN INCONVENIENT FORUM.
Section 11.14 WAIVER OF JURY TRIAL. EACH OF THE AGENT, THE LENDERS
AND THE BORROWER HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES ANY
RIGHTS IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED
HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS AGREEMENT OR
ANY OTHER LOAN DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING,
STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF THE AGENT, THE LENDERS
OR THE BORROWER. THE BORROWER ACKNOWLEDGES AND AGREES THAT IT HAS RECEIVED
FULL AND SUFFICIENT CONSIDERATION FOR THIS PROVISION (AND EACH OTHER
PROVISION OF EACH OTHER LOAN DOCUMENT TO WHICH IT IS A PARTY) AND THAT THIS
PROVISION IS A MATERIAL INDUCEMENT FOR THE AGENT AND THE LENDERS ENTERING
INTO THIS AGREEMENT AND EACH SUCH OTHER LOAN DOCUMENT.
Section 11.15 OTHER DEBT. (a) Pursuant to Section 20 of the
Intercreditor Agreement, each Lender agrees to be bound by the terms of the
Intercreditor Agreement.
(b) Each Lender (i) acknowledges the existence and validity
of the obligations represented by the Private Placement Debt and (ii) agrees
to refrain from making or asserting any claim that the Note Agreement or the
obligations represented by the Private Placement Debt are invalid or not
enforceable in accordance with its or their terms as a result of the
circumstances surrounding the incurrence of such obligations.
94
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their respective officers thereunto duly authorized as of the
day and year first above written.
CORNERSTONE PROPANE, L.P.
By: CORNERSTONE PROPANE GP, INC.
Its: Managing General Partner
By:
-------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Executive Vice President and Chief
Financial Officer
Address: c/o Cornerstone Propane Partners
000 Xxxxxxxxx Xxxxx
Xxxxxxxxxxx, XX 00000
Facsimile #: (000) 000-0000
Attention: Xxxxxx X. Xxxxxx
95
BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION, as Agent
By:
----------------------------------
Name: Xxxxx X. Xxxxxxxxx
Title: Vice President
Address: Corporate Banking - Houston
000 Xxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, XX 00000-0000
Facsimile #: (000) 000-0000
Attention: Xxxxx X. Xxxxxxxxx
96
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION
By:
-----------------------------------
Name: Xxxxx X. Xxxxxxxxx
Title: Vice President
Address: Corporate Banking - Houston
000 Xxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, XX 00000-0000
Facsimile #: (000) 000-0000
Attention: Xxxxx X. Xxxxxxxxx
97
UNION BANK OF CALIFORNIA, N.A.
By:
---------------------------------
Name:
---------------------------------
Title:
---------------------------------
Address: 000 Xxxxx Xxxxxxxx Xxxxxx
Xxx Xxxxxxx, XX 00000-0000
Facsimile #: (000) 000-0000
Attention: Xxxxxx X. Xxxx
98
BANKBOSTON, N.A.
By:
-----------------------------------
Name:
-----------------------------------
Title:
----------------------------------
Address: 000 Xxxxxxx Xxxxxx
00-00-00
Xxxxxx, XX 00000
Facsimile #: (000) 000-0000
Attention: Xxxxx Xxxxxxxx or Xxxx Xxxxxxx
99
FIRST UNION NATIONAL BANK
By:
------------------------------------------
Name:
-----------------------------------------
Title:
----------------------------------------
Address: First Union Capital Markets Group
NC0735
One First Union Center
000 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000-0000
Facsimile #: (000) 000-0000
Attention: Xxx X. Xxxxx
000
XXXX XX XXXX XXXXXX
By:
------------------------------------------
Name:
-----------------------------------------
Title:
----------------------------------------
Address: 0000 Xxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, XX 00000
Facsimile #: (000) 000-0000
Attention: Xxxxxx Xxxxxxxx
101
CREDIT AGRICOLE INDOSUEZ
By:
------------------------------------------
Name:
-----------------------------------------
Title:
----------------------------------------
Address: 000 Xxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, XX 00000
Facsimile #: (000) 000-0000
Attention: Xxxxx Xxxxxx
102
Exhibit 4-1
SCHEDULE I
DISCLOSURE SCHEDULE
See attached.
103
SCHEDULE II
ALLOCATIONS
------------------------- ----------------- --------------- ----------------- ---------------- ------------ ----------
NAME OF LENDER ACQUISITION LOAN ACQUISITION WORKING CAPITAL WORKING CAPITAL TOTAL % OF TOTAL
COMMITMENT PERCENTAGE LOAN COMMITMENT PERCENTAGE
------------------------- ----------------- --------------- ----------------- ---------------- ------------ ----------
Bank of America $6,840,909 19.5455% $14,659,091 19.5455% $21,500,000 19.5455%
National Trust and
Savings Association
------------------------- ----------------- --------------- ----------------- ---------------- --------------- ----------
BankBoston, N.A. $6,204,545 17.7273% $13,295,455 17.7273% $19,500,000 17.7273%
------------------------- ----------------- --------------- ----------------- ---------------- --------------- ----------
First Union National $6,204,545 17.7273% $13,295,455 17.7273% $19,500,000 17.7273%
Bank
------------------------- ----------------- --------------- ----------------- ---------------- --------------- ----------
Union Bank of $6,204,545 17.7273% $13,295,455 17.7273% $19,500,000 17.7273%
California, N.A.
------------------------- ----------------- --------------- ----------------- ---------------- --------------- ----------
Bank of Nova Scotia $4,772,727 13.6364% $10,227,273 13.6364% $15,000,000 13.6364%
------------------------- ----------------- --------------- ----------------- ---------------- --------------- ----------
Credit Agricole Indosuez $4,772,727 13.6364% $10,227,273 13.6364% $15,000,000 13.6364%
------------------------- ----------------- --------------- ----------------- ---------------- --------------- ----------
TOTAL $34,999,998.00 100.00% $75,000,002.00 100.00% $110,000,000.00 100.00%
------------------------- ----------------- --------------- ----------------- ---------------- --------------- ----------
104
SCHEDULE III
ISSUED AND OUTSTANDING LETTERS OF CREDIT
See attached.
105
