Exhibit 10.2
SUBSIDIARY GUARANTEE AGREEMENT
This SUBSIDIARY GUARANTEE AGREEMENT (the "Agreement"), dated as of November
1, 2002, among each of the Subsidiaries listed on Schedule I hereto (each such
subsidiary individually, a "Guarantor" and collectively, the "Guarantors") of
KANEB PIPE LINE OPERATING PARTNERSHIP, L.P., a Delaware limited partnership (the
"Borrower"), and SUNTRUST BANK, a Georgia banking corporation as administrative
agent (the "Administrative Agent") for the Lenders (as defined in the Loan
Agreement referred to below).
Reference is made to the Bridge Loan Agreement, dated as of November 1,
2002 (as amended, supplemented or otherwise modified from time to time, the
"Loan Agreement"), among the Borrower, Kaneb Pipe Line Partners, L.P., the
lenders from time to time party thereto (the "Lenders") and SunTrust Bank, as
administrative agent for the Lenders (in such capacity, the "Administrative
Agent"). Capitalized terms used herein and not defined herein shall have the
meanings assigned to such terms in the Loan Agreement.
The Lenders have agreed to make Loans to the Borrower pursuant to, and upon
the terms and subject to the conditions specified in, the Loan Agreement. Each
of the Guarantors is a direct or indirect Subsidiary of the Borrower and
acknowledges that it will derive substantial benefit from the making of the
Loans by the Lenders. The obligations of the Lenders to make Loans are
conditioned on, among other things, the execution and delivery by the Guarantors
of a Subsidiary Guarantee Agreement in the form hereof. As consideration
therefor and in order to induce the Lenders to make Loans, the Guarantors are
willing to execute this Subsidiary Guarantee Agreement.
Accordingly, the parties hereto agree as follows:
SECTION 1. Guarantee.
Each Guarantor unconditionally guarantees, jointly with KPP and the other
Guarantors and severally, as a primary obligor and not merely as a surety, (i)
the due and punctual payment of (A) the principal of and premium, if any, and
interest (including interest accruing during the pendency of any bankruptcy,
insolvency, receivership or other similar proceeding, regardless of whether
allowed or allowable in such proceeding) on the Loans, when and as due, whether
at maturity, by acceleration, upon one or more dates set for prepayment or
otherwise, and (B) all other monetary obligations, including fees, costs,
expenses and indemnities, whether primary, secondary, direct, contingent, fixed
or otherwise (including monetary obligations incurred during the pendency of any
bankruptcy, insolvency, receivership or other similar proceeding, regardless of
whether allowed or allowable in such proceeding), of the Loan Parties to the
Administrative Agent and the Lenders under the Loan Agreement and the other Loan
Documents, (ii) the due and punctual performance of all covenants, agreements,
obligations and liabilities of the Loan Parties under or pursuant to the Loan
Agreement and the other Loan Documents; and (iii) the due and punctual payment
and performance of all obligations of the Borrower, monetary or otherwise, under
each Hedging Agreement entered into with a counterparty that was a Lender or an
Affiliate of a Lender at the time such Hedging Agreement was entered into (all
the monetary and other obligations referred to in the preceding clauses (i)
through (iii) being collectively called the "Obligations"). Each Guarantor
further agrees that the Obligations may be extended or renewed, in whole or in
part, without notice to or further assent from it, and that it will remain bound
upon its guarantee notwithstanding any extension or renewal of any Obligation.
SECTION 2. Obligations Not Waived.
To the fullest extent permitted by applicable law, each Guarantor waives
presentment to, demand of payment from and protest to the other Loan Parties of
any of the Obligations, and also waives notice of acceptance of its guarantee
and notice of protest for nonpayment. To the fullest extent permitted by
applicable law, the obligations of each Guarantor hereunder shall not be
affected by (i) the failure of the Administrative Agent or any Lender to assert
any claim or demand or to enforce or exercise any right or remedy against the
Borrower or any other Guarantor under the provisions of the Loan Agreement, any
other Loan Document or otherwise, (ii) any rescission, waiver, amendment or
modification of, or any release from any of the terms or provisions of, this
Agreement, any other Loan Document or any other agreement, including with
respect to any other Guarantor under this Agreement, or (iii) the failure to
perfect any security interest in, or the release of, any of the security held by
or on behalf of the Administrative Agent or any Lender.
SECTION 3. Guarantee of Payment.
Each Guarantor further agrees that its guarantee constitutes a guarantee of
payment when due and not of collection, and waives any right to require that any
resort be had by the Administrative Agent or any Lender to any of the security
held for payment of the Obligations or to any balance of any deposit account or
credit on the books of the Administrative Agent or any Lender in favor of the
Borrower or any other Person.
SECTION 4. No Discharge or Diminishment of Guarantee.
The obligations of each Guarantor hereunder shall not be subject to any
reduction, limitation, impairment or termination for any reason (other than the
indefeasible payment in full in cash of the Obligations), including any claim of
waiver, release, surrender, alteration or compromise of any of the Obligations,
and shall not be subject to any defense or setoff, counterclaim, recoupment or
termination whatsoever by reason of the invalidity, illegality or
unenforceability of the Obligations or otherwise. Without limiting the
generality of the foregoing, the obligations of each Guarantor hereunder shall
not be discharged or impaired or otherwise affected by the failure of the
Administrative Agent or any Lender to assert any claim or demand or to enforce
any remedy under the Loan Agreement, any other Loan Document or any other
agreement, by any waiver or modification of any provision of any thereof, by any
default, failure or delay, willful or otherwise, in the performance of the
Obligations, or by any other act or omission that may or might in any manner or
to the extent vary the risk of any Guarantor or that would otherwise operate as
a discharge of each Guarantor as a matter of law or equity (other than the
indefeasible payment in full in cash of all the Obligations).
SECTION 5. Defenses of Borrower Waived.
To the fullest extent permitted by applicable law, each Guarantor waives
any defense based on or arising out of any defense of any Loan Party or the
unenforceability of the Obligations or any part thereof from any cause, or the
cessation from any cause of the liability of any Loan Party, other than the
final and indefeasible payment in full in cash of the Obligations. The
Administrative Agent and the Lenders may, at their election, foreclose on any
security held by one or more of them by one or more judicial or nonjudicial
sales, accept an assignment of any such security in lieu of foreclosure,
compromise or adjust any part of the Obligations, make any other accommodation
with any other Loan Party or any other guarantor, without affecting or impairing
in any way the liability of any Guarantor hereunder except to the extent the
Obligations have been fully, finally and indefeasibly paid in cash. Pursuant to
applicable law, each Guarantor waives any defense arising out of any such
election even though such election operates, pursuant to applicable law, to
impair or to extinguish any right of reimbursement or subrogation or other right
or remedy of such Guarantor against the Borrower or any other Guarantor or
guarantor, as the case may be, or any security.
SECTION 6. Agreement to Pay; Subordination.
In furtherance of the foregoing and not in limitation of any other right
that the Administrative Agent or any Lender has at law or in equity against any
Guarantor by virtue hereof, upon the failure of the Borrower or any other Loan
Party to pay any Obligation when and as the same shall become due, whether at
maturity, by acceleration, after notice of prepayment or otherwise, each
Guarantor hereby promises to and will forthwith pay, or cause to be paid, to the
Administrative Agent for the benefit of the Lenders in cash the amount of such
unpaid Obligations. Upon payment by any Guarantor of any sums to the
Administrative Agent, all rights of such Guarantor against any Loan Party
arising as a result thereof by way of right of subrogation, contribution,
reimbursement, indemnity or otherwise shall in all respects be subordinate and
junior in right of payment to the prior indefeasible payment in full in cash of
all the Obligations. In addition, any indebtedness of any Loan Party now or
hereafter held by any Guarantor is hereby subordinated in right of payment to
the prior payment in full in cash of the Obligations. If any amount shall
erroneously be paid to any Guarantor on account of (i) such subrogation,
contribution, reimbursement, indemnity or similar right or (ii) any such
indebtedness of any Loan Party, such amount shall be held in trust for the
benefit of the Administrative Agent and the Lenders and shall forthwith be paid
to the Administrative Agent to be credited against the payment of the
Obligations, whether matured or unmatured, in accordance with the terms of the
Loan Documents.
SECTION 7. Information.
Each Guarantor assumes all responsibility for being and keeping itself
informed of other Loan Parties' financial condition and assets, and of all other
circumstances bearing upon the risk of nonpayment of the Obligations and the
nature, scope and extent of the risks that such Guarantor assumes and incurs
hereunder, and agrees that none of the Administrative Agent or the Lenders will
have any duty to advise any of the Guarantors of information known to it or any
of them regarding such circumstances or risks.
SECTION 8. Representations and Warranties.
Each Guarantor represents and warrants as to itself that all
representations and warranties relating to it (as a Subsidiary of KPP) contained
in the Loan Agreement are true and correct.
SECTION 9. Termination.
The guarantees made hereunder (i) shall terminate when all the Obligations
have been paid in full in cash and the Lenders have no further commitment to
lend under the Loan Agreement and (ii) shall continue to be effective or be
reinstated, as the case may be, if at any time payment, or any part thereof, of
any Obligation is rescinded or must otherwise be restored by any Lender or any
Guarantor upon the bankruptcy or reorganization of the Borrower, any Guarantor
or otherwise. In connection with the foregoing, the Administrative Agent shall
execute and deliver to such Guarantor or Guarantor's designee, at such
Guarantor's expense, any documents or instruments which such Guarantor shall
reasonably request from time to time to evidence such termination and release.
SECTION 10. Binding Effect; Several Agreement; Assignments.
Whenever in this Agreement any of the parties hereto is referred to, such
reference shall be deemed to include the successors and assigns of such party;
and all covenants, promises and agreements by or on behalf of the Guarantors
that are contained in this Agreement shall bind and inure to the benefit of each
party hereto and their respective successors and assigns. This Agreement shall
become effective as to any Guarantor when a counterpart hereof executed on
behalf of such Guarantor shall have been delivered to the Administrative Agent,
and a counterpart hereof shall have been executed on behalf of the
Administrative Agent, and thereafter shall be binding upon such Guarantor and
the Administrative Agent and their respective successors and assigns, and shall
inure to the benefit of such Guarantor, the Administrative Agent and the
Lenders, and their respective successors and assigns, except that no Guarantor
shall have the right to assign its rights or obligations hereunder or any
interest herein (and any such attempted assignment shall be void). If all of the
capital stock of a Guarantor is sold, transferred or otherwise disposed of
pursuant to a transaction permitted by the Loan Agreement, such Guarantor shall
be released from its obligations under this Agreement without further action.
This Agreement shall be construed as a separate agreement with respect to each
Guarantor and may be amended, modified, supplemented, waived or released with
respect to any Guarantor without the approval of any other Guarantor and without
affecting the obligations of any other Guarantor hereunder.
SECTION 11. Waivers; Amendment.
(a) No failure or delay of the Administrative Agent of any in
exercising any power or right hereunder shall operate as a waiver thereof,
nor shall any single or partial exercise of any such right or power, or any
abandonment or discontinuance of steps to enforce such a right or power,
preclude any other or further exercise thereof or the exercise of any other
right or power. The rights and of the Administrative Agent hereunder and of
the Lenders under the other Loan Documents are cumulative and are not
exclusive of any rights or remedies that they would otherwise have. No
waiver of any provision of this Agreement or consent to any departure by
any Guarantor therefrom shall in any event be effective unless the same
shall be permitted by subsection (b) below, and then such waiver and
consent shall be effective only in the specific instance and for the
purpose for which given. No notice or demand on any Guarantor in any case
shall entitle such Guarantor to any other or further notice in similar or
other circumstances.
(b) Neither this Agreement nor any provision hereof may be waived,
amended or modified except pursuant to a written agreement entered into
between the Guarantors with respect to which such waiver, amendment or
modification relates and the Administrative Agent, with the prior written
consent of the Required Lenders (except as otherwise provided in the Loan
Agreement).
SECTION 12. Governing Law.
THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
LAWS OF THE STATE OF NEW YORK.
SECTION 13. Notices.
All communications and notices hereunder shall be in writing and given as
provided in Section 11.01 of the Loan Agreement. All communications and notices
hereunder to each Guarantor shall be given to it at its address set forth on
Schedule I attached hereto.
SECTION 14. Survival of Agreement; Severability.
(a) All covenants, agreements representations and warranties made by
the Guarantors herein and in the certificates or other instruments prepared
or delivered in connection with or pursuant to this Agreement or the other
Loan Document shall be considered to have been relied upon by the
Administrative Agent and the Lenders and shall survive the making by the
Lenders of the Loans regardless of any investigation made by any of them or
on their behalf, and shall continue in full force and effect as long as the
principal of or any accrued interest on any Loan or any other amount
payable under this Agreement or any other Loan Document is outstanding and
unpaid and as long as the Commitments have not been terminated.
(b) In the event one or more of the provisions contained in this
Agreement or in any other Loan Document should be held invalid, illegal or
unenforceable in any respect, the validity, legality and enforceability of
the remaining provisions contained herein and therein shall not in any way
be affected or impaired thereby (it being understood that the invalidity of
a particular provision in a particular jurisdiction shall not in and of
itself affect the validity of such provision in any other jurisdiction).
The parties shall endeavor in good-faith negotiations to replace the
invalid, illegal or unenforceable provisions with valid provisions the
economic effect of which comes as close as possible to that of the invalid,
illegal or unenforceable provisions.
SECTION 15. Counterparts.
This Agreement may be executed in counterparts, each of which shall
constitute an original, but all of which when taken together shall constitute a
single contract (subject to Section 10), and shall become effective as provided
in Section 10. Delivery of an executed signature page to this Agreement by
facsimile transmission shall be as effective as delivery of a manually executed
counterpart of this Agreement.
SECTION 16. Rules of Interpretation.
The rules of interpretation specified in Section 1.03 of the Loan Agreement
shall be applicable to this Agreement.
SECTION 17. Jurisdiction; Consent to Service of Process.
(a) Each Guarantor hereby irrevocably and unconditionally submits, for
itself and its property, to the non-exclusive jurisdiction of the United
States District Court of the Southern District of New York, and of the
Supreme Court of the State of New York sitting in New York County and any
appellate court from any thereof, in any action or proceeding arising out
of or relating to this Agreement or the other Loan Documents or the
transactions contemplated hereby or thereby, or for recognition or
enforcement of any judgment, and each of the parties hereto hereby
irrevocably and unconditionally agrees that all claims in respect of any
such action or proceeding may be heard and determined in such New York
State court or, to the extent permitted by applicable law, in such Federal
court. Each of the parties hereto agrees that a final judgment in any such
action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by
law. Nothing in this Agreement shall affect any right that the
Administrative Agent or any Lender may otherwise have to bring any action
or proceeding relating to this Agreement or the other Loan Documents
against any Guarantor or its properties in the courts of any jurisdiction.
(b) Each Guarantor irrevocably and unconditionally waives any
objection which it may now or hereafter have to the laying of venue of any
such suit, action or proceeding described in subsection (a) of this Section
and brought in any court referred to in subsection (a) of this Section.
Each of the parties hereto irrevocably waives, to the fullest extent
permitted by applicable law, the defense of an inconvenient forum to the
maintenance of such action or proceeding in any such court.
(c) Each party to this Agreement irrevocably consents to the service
of process in the manner provided for notices in Section 13. Nothing in
this Agreement will affect the right of any party hereto to serve process
in any other manner permitted by law.
SECTION 18. Waiver of Jury Trial.
EACH PARTY HERETO IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING
DIRECTLY OR INDIRECTLY ARISING OUT OF THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT
OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT,
TORT OR ANY OTHER THEORY). EACH PARTY HERETO (i) CERTIFIES THAT NO
REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY
OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK
TO ENFORCE THE FOREGOING WAIVER, AND (ii) ACKNOWLEDGES THAT IT AND THE OTHER
PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS
SECTION.
SECTION 19. Additional Guarantors.
Pursuant to Section 5.10 of the Loan Agreement, each Significant Subsidiary
(other than any Foreign Subsidiary and any Excluded Subsidiary) that was not in
existence on the date of the Loan Agreement is required to enter into this
Agreement as a Guarantor. Upon execution and delivery after the date hereof by
the Administrative Agent and such Subsidiary of an instrument in the form of
Annex 1, such Subsidiary shall become a Guarantor hereunder with the same force
and effect as if originally named as a Guarantor herein. The execution and
delivery of any instrument adding an additional Guarantor as a party to this
Agreement shall not require the consent of any other Guarantor hereunder. The
rights and obligations of each Guarantor hereunder shall remain in full force
and effect notwithstanding the addition of any new Guarantor as a party to this
Agreement.
SECTION 20. Right of Setoff.
If an Event of Default shall have occurred and be continuing, each Lender
are hereby authorized at any time and from time to time, to the fullest extent
permitted by law, to set off and apply any and all deposits (general or special,
time or demand, provisional or final) at any time held and other Indebtedness at
any time owing by such Lender to or for the credit or the account of any
Guarantor against any or all the obligations of such Guarantor now or hereafter
existing under this Agreement and the other Loan Documents held by such Lender,
irrespective of whether or not such Person shall have made any demand under this
Agreement or any other Loan Document and although such obligations may be
unmatured. The rights of each Lender under this Section 20 are in addition to
other rights and remedies (including other rights of setoff) that such Lender
may have.
[SIGNATURE PAGE TO FOLLOW]
[SIGNATURE PAGE TO SUBSIDIARY GUARANTEE AGREEMENT]
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as
of the day and year first above written.
KANEB PIPE LINE OPERATING
PARTNERSHIP, L.P.
By: KANEB PIPE LINE COMPANY,
General Partner
By:
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Name:
Title:
KANEB PIPE LINE PARTNERS, L.P.
By: KANEB PIPE LINE COMPANY,
General Partner
By:
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Name:
Title:
SUPPORT TERMINALS OPERATING
PARTNERSHIP, L.P.
By: SUPPORT TERMINAL SERVICES, INC.,
General Partner
By:
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Name:
Title:
SUPPORT TERMINAL SERVICES, INC.
By:
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Name:
Title:
STANTRANS, INC.
By:
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Name:
Title:
SHORE TERMINALS, LLC
By:
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Name:
Title:
SUNTRUST BANK, as
Administrative Agent
By
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Name:
Title:
SCHEDULE I TO THE
SUBSIDIARY GUARANTEE AGREEMENT
Guarantor(s) Address
StanTrans, Inc.
Support Terminals Operating Partnership, L.P.
Support Terminal Services, Inc.
Shore Terminals LLC
