FORM OF
CREDIT AGREEMENT,
dated as of December [12], 1996
among
CORNERSTONE PROPANE, L.P.,
as the Borrower,
and
VARIOUS FINANCIAL INSTITUTIONS,
as the Lenders,
and
BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION,
as Agent for the Lenders.
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS . . . . . . . . . . 1
1.1 Defined Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.2 Use of Defined Terms. . . . . . . . . . . . . . . . . . . . . . . . . . 26
1.3 Cross-References. . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
1.4 Accounting and Financial Determinations . . . . . . . . . . . . . . . . 27
ARTICLE II
COMMITMENTS, BORROWING PROCEDURES AND NOTES . . . . . . . 27
2.1 Commitments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
2.1.1 Working Capital Loan Commitment . . . . . . . . . . . . . . . . 27
2.1.2 Acquisition Loan Commitment . . . . . . . . . . . . . . . . . . 27
2.1.3 Lenders Not Permitted or Required To Make Loans . . . . . . . . 27
2.2 Reduction of Commitment Amounts . . . . . . . . . . . . . . . . . . . . 28
2.2.1 Optional. . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
2.2.2 Mandatory . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
2.3 Borrowing Procedure . . . . . . . . . . . . . . . . . . . . . . . . . . 29
2.4 Continuation and Conversion Elections . . . . . . . . . . . . . . . . . 29
2.5 Funding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
2.6 Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
2.7 Swing Line. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
ARTICLE III
REPAYMENTS, PREPAYMENTS, INTEREST AND FEES. . . . . . . . 33
3.1 Repayments and Prepayments. . . . . . . . . . . . . . . . . . . . . . . 33
3.1.1 Stated Maturity Date and Loan Commitment
Termination Date. . . . . . . . . . . . . . . . . . . . . . . 35
3.2 Interest Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . 36
3.2.1 Rates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
3.2.2 Post-Maturity Rates . . . . . . . . . . . . . . . . . . . . . . 38
3.2.3 Payment Dates . . . . . . . . . . . . . . . . . . . . . . . . . 38
i
3.3 Fees. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
3.3.1 Facility Fee. . . . . . . . . . . . . . . . . . . . . . . . . . 39
3.3.2 Letter of Credit Face Amount Fee. . . . . . . . . . . . . . . . 39
3.3.3 Letter of Credit Issuing Fee. . . . . . . . . . . . . . . . . . 39
3.3.4 Additional Fee. . . . . . . . . . . . . . . . . . . . . . . . . 39
ARTICLE IV
LETTERS OF CREDIT. . . . . . . . . . . . . . 39
4.1 Issuance Requests . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
4.2 Issuances and Extensions. . . . . . . . . . . . . . . . . . . . . . . . 40
4.3 Expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
4.4 Other Lenders' Participation. . . . . . . . . . . . . . . . . . . . . . 41
4.5 Disbursements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
4.6 Reimbursement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
4.7 Deemed Disbursements. . . . . . . . . . . . . . . . . . . . . . . . . . 43
4.8 Nature of Reimbursement Obligations . . . . . . . . . . . . . . . . . . 44
4.9 Increased Costs; Indemnity. . . . . . . . . . . . . . . . . . . . . . . 45
ARTICLE V
CERTAIN EURODOLLAR RATE AND OTHER PROVISIONS . . . . . . . 46
5.1 Eurodollar Rate Lending Unlawful. . . . . . . . . . . . . . . . . . . . 46
5.2 Deposits Unavailable. . . . . . . . . . . . . . . . . . . . . . . . . . 47
5.3 Increased Eurodollar Rate Loan Costs, etc . . . . . . . . . . . . . . . 47
5.4 Funding Losses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
5.5 Increased Capital Costs . . . . . . . . . . . . . . . . . . . . . . . . 48
5.6 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
5.7 Payments, Computations, etc . . . . . . . . . . . . . . . . . . . . . . 50
5.8 Sharing of Payments . . . . . . . . . . . . . . . . . . . . . . . . . . 51
5.9 Setoff. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
5.10 Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
5.11 Recourse. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
SECTION 5.12 Replacement of Lenders . . . . . . . . . . . . . . . . . . . . 53
ARTICLE VI
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CONDITIONS TO BORROWING . . . . . . . . . . . . 53
6.1 Initial Borrowing . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
6.1.1 Partnership Action. . . . . . . . . . . . . . . . . . . . . . . 53
6.1.2 Delivery of Notes . . . . . . . . . . . . . . . . . . . . . . . 54
6.1.3 Private Placement Debt and Public Partnership
Common Units. . . . . . . . . . . . . . . . . . . . . . . . . 54
6.1.4 Payment of Outstanding Indebtedness, etc. . . . . . . . . . . . 54
6.1.5 Transfer. . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
6.1.6 Working Capital Debt. . . . . . . . . . . . . . . . . . . . . . 54
6.1.7 Intercreditor Agreement . . . . . . . . . . . . . . . . . . . . 54
6.1.8 Security Agreement. . . . . . . . . . . . . . . . . . . . . . . 54
6.1.9 Permits . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
6.1.10 Opinion of Counsel. . . . . . . . . . . . . . . . . . . . . . . 55
6.1.11 Closing Fees, Expenses, etc . . . . . . . . . . . . . . . . . . 55
6.1.12 Compliance Certificate. . . . . . . . . . . . . . . . . . . . . 56
6.1.13 Insurance Certificate . . . . . . . . . . . . . . . . . . . . . 56
SECTION 6.1.14 Environmental Disclosure . . . . . . . . . . . . . . . . . . 56
SECTION 6.1.15 Solvency Certificate . . . . . . . . . . . . . . . . . . . . 56
6.2 All Borrowings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
6.2.1 Compliance with Warranties, No Default, etc.. . . . . . . . . . 56
6.2.2 Borrowing Request . . . . . . . . . . . . . . . . . . . . . . . 57
6.2.3 Satisfactory Legal Form . . . . . . . . . . . . . . . . . . . . 57
ARTICLE VII
REPRESENTATIONS AND WARRANTIES. . . . . . . . . . . 58
7.1 Organization, etc . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
7.2 Partnership Interests.. . . . . . . . . . . . . . . . . . . . . . . . . 58
7.3 Qualification.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
7.4 Due Authorization, Non-Contravention, etc.. . . . . . . . . . . . . . . 59
7.5 Government Approval, Regulation, etc. . . . . . . . . . . . . . . . . . 60
7.6 Business Financial Statements . . . . . . . . . . . . . . . . . . . . . 60
7.7 No Material Adverse Change. . . . . . . . . . . . . . . . . . . . . . . 62
7.8 Litigation, Labor Controversies, etc. . . . . . . . . . . . . . . . . . 62
7.9 Ownership of Properties . . . . . . . . . . . . . . . . . . . . . . . . 62
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7.10 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
7.11 Pension and Welfare Plans . . . . . . . . . . . . . . . . . . . . . . . 63
7.12 Environmental Warranties. . . . . . . . . . . . . . . . . . . . . . . . 63
7.13 Regulations G, U and X. . . . . . . . . . . . . . . . . . . . . . . . . 66
7.14 Accuracy of Information . . . . . . . . . . . . . . . . . . . . . . . . 66
7.15 Capitalization. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
7.16 Solvency. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
7.17 Private Placement Debt Representations. . . . . . . . . . . . . . . . . 67
7.18 Compliance with Laws. . . . . . . . . . . . . . . . . . . . . . . . . . 67
ARTICLE VIII
COVENANTS. . . . . . . . . . . . . . . . 67
8.1 Affirmative Covenants . . . . . . . . . . . . . . . . . . . . . . . . . 67
8.1.1 Financial Information, Reports, Notices, etc. . . . . . . . . . 67
8.1.2 Compliance with Laws, etc.. . . . . . . . . . . . . . . . . . . 71
8.1.3 Maintenance of Properties . . . . . . . . . . . . . . . . . . . 71
8.1.4 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
8.1.5 Books and Records . . . . . . . . . . . . . . . . . . . . . . . 72
8.1.6 Inspection. . . . . . . . . . . . . . . . . . . . . . . . . . . 72
8.1.7 Environmental Covenant. . . . . . . . . . . . . . . . . . . . . 72
8.1.8 Ranking/Security . . . . . . . . . . . . . . . . . . . . . . . . 73
8.1.9 Clean Down Period. . . . . . . . . . . . . . . . . . . . . . . . 73
8.2 Negative Covenants. . . . . . . . . . . . . . . . . . . . . . . . . . . 73
8.2.1 Business Activities . . . . . . . . . . . . . . . . . . . . . . 73
8.2.2 Indebtedness. . . . . . . . . . . . . . . . . . . . . . . . . . 73
8.2.3 Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
8.2.4 Financial Condition . . . . . . . . . . . . . . . . . . . . . . 79
8.2.5 Investments . . . . . . . . . . . . . . . . . . . . . . . . . . 79
8.2.7 Consolidation, Merger, etc. . . . . . . . . . . . . . . . . . . 81
8.2.8 Asset Dispositions, etc.. . . . . . . . . . . . . . . . . . . . 82
8.2.9 Modification of Certain Agreements. . . . . . . . . . . . . . . 84
8.2.10 Transactions with Affiliates. . . . . . . . . . . . . . . . . . 84
8.2.11 Negative Pledges, Restrictive Agreements, etc.. . . . . . . . . 85
8.2.12 Limitation on Issuance of Subsidiary Stock. . . . . . . . . . . 85
8.2.13 Operating Leases. . . . . . . . . . . . . . . . . . . . . . . . 85
8.2.14 Restricted Subsidiaries . . . . . . . . . . . . . . . . . . . . 85
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SECTION 8.2.15 Organic Documents. . . . . . . . . . . . . . . . . . . . . . 87
ARTICLE IX
EVENTS OF DEFAULT. . . . . . . . . . . . . . 87
9.1 Listing of Events of Default. . . . . . . . . . . . . . . . . . . . . . 87
9.1.1 Non-Payment of Obligations. . . . . . . . . . . . . . . . . . . 87
9.1.2 Breach of Warranty. . . . . . . . . . . . . . . . . . . . . . . 87
9.1.3 Non-Performance of Other Covenants and
Obligations . . . . . . . . . . . . . . . . . . . . . . . . . 87
9.1.4 Default on Other Indebtedness . . . . . . . . . . . . . . . . . 88
9.1.5 Judgments . . . . . . . . . . . . . . . . . . . . . . . . . . . 88
9.1.6 Pension Plans . . . . . . . . . . . . . . . . . . . . . . . . . 88
9.1.7 Change in Control . . . . . . . . . . . . . . . . . . . . . . . 88
9.1.8 Bankruptcy, Insolvency, etc.. . . . . . . . . . . . . . . . . . 88
9.1.9 Impairment of Security, etc.. . . . . . . . . . . . . . . . . . 90
9.1.10 Split-Up. . . . . . . . . . . . . . . . . . . . . . . . . . . . 90
SECTION 9.1.11 Partners . . . . . . . . . . . . . . . . . . . . . . . . . . 91
9.2 Action if Bankruptcy. . . . . . . . . . . . . . . . . . . . . . . . . . 91
9.3 Action if Other Event of Default. . . . . . . . . . . . . . . . . . . . 91
ARTICLE X
THE AGENT. . . . . . . . . . . . . . . . 92
10.1 Appointment and Authorization . . . . . . . . . . . . . . . . . . . . . 92
10.2 Delegation of Duties. . . . . . . . . . . . . . . . . . . . . . . . . . 92
10.3 Liability of Agent. . . . . . . . . . . . . . . . . . . . . . . . . . . 92
10.4 Reliance by Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . 93
10.5 Notice of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . 93
10.6 Credit Decision . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94
10.7 Indemnification of Agent. . . . . . . . . . . . . . . . . . . . . . . . 94
10.8 Agent in Individual Capacity. . . . . . . . . . . . . . . . . . . . . . 95
10.9 Successor Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . 95
10.10 Withholding Tax . . . . . . . . . . . . . . . . . . . . . . . . . . . 96
10.11 Collateral Matters. . . . . . . . . . . . . . . . . . . . . . . . . . 97
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ARTICLE XI
MISCELLANEOUS PROVISIONS . . . . . . . . . . . . 98
11.1 Waivers, Amendments, etc. . . . . . . . . . . . . . . . . . . . . . . . 98
11.2 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 99
11.3 Payment of Costs and Expenses . . . . . . . . . . . . . . . . . . . . . 99
11.4 Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100
11.5 Survival. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 101
11.6 Severability. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 101
11.7 Headings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 101
11.8 Execution in Counterparts, Effectiveness, etc.. . . . . . . . . . . . . 101
11.9 Governing Law; Entire Agreement . . . . . . . . . . . . . . . . . . . . 102
11.10 Successors and Assigns . . . . . . . . . . . . . . . . . . . . . . . . 102
11.11 Sale and Transfer of Loans and Notes; Participations
in Loans and Notes. . . . . . . . . . . . . . . . . . . . . . . . . . 102
11.11.1 Assignments . . . . . . . . . . . . . . . . . . . . . . . . . . 102
11.11.2 Participations. . . . . . . . . . . . . . . . . . . . . . . . . 103
11.12 Other Transactions. . . . . . . . . . . . . . . . . . . . . . . . . . 104
11.13 Forum Selection and Consent to Jurisdiction . . . . . . . . . . . . . 104
11.14 Waiver of Jury Trial. . . . . . . . . . . . . . . . . . . . . . . . . 105
vi
SCHEDULE AND EXHIBITS
SCHEDULE I - Disclosure Schedule
ITEM 7.2 - Subsidiaries
ITEM 7.3 - Jurisdictions
ITEM 7.5 - Government Approvals
ITEM 7.8 - Litigation
ITEM 7.9 - Real Property
ITEM 7.11 - Employee Benefit Plans
ITEM 7.12 - Environmental Matters
ITEM 7.15 - Capitalization
ITEM 8.2.2(a) - Indebtedness to be Paid on Effective Date
ITEM 8.2.3 - Liens
ITEM 8.2.10 - Transactions with Affiliates
EXHIBIT A - Form of Working Capital Note
EXHIBIT B - Form of Acquisition Note
EXHIBIT C - Form of Swing Note
EXHIBIT D - Form of Borrowing Request
EXHIBIT E - Form of Issuance Request
EXHIBIT F - Form of Continuation/Conversion Notice
EXHIBIT G - Form of Lender Assignment Agreement
EXHIBIT H - Form of Intercreditor Agreement
EXHIBIT I - Form of Commitment Termination Date Extension Request
EXHIBIT J - Form of Security Agreement
EXHIBIT K - Form of Opinion of Counsel to the
Borrowers
EXHIBIT L - Form of Notice of Payment of Seller Debt
EXHIBIT M - Form of Swing Loan Request
EXHIBIT N - Form of Letter of Credit
vii
CREDIT AGREEMENT
THIS CREDIT AGREEMENT, dated as of December [12], 1996 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, other business activities
described in the Registration Statement (as defined below) and any other
business reasonably related thereto.
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 California 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 desires to obtain Commitments from the Lenders
pursuant to which Loans, in a maximum aggregate principal amount at any one time
outstanding not to exceed $125,000,000, will be made to the Borrower from time
to time prior to the Loan Commitment Termination Date; and
WHEREAS, the Lenders are willing, on the terms and subject to the
conditions hereinafter set forth (including ARTICLE VI), to extend such
Commitments and make such Loans to the Borrower; and
WHEREAS, the proceeds of such Loans will be used for acquisitions permitted
by the terms of this Agreement and general working capital purposes of the
Borrower;
NOW, THEREFORE, the parties hereto agree as follows:
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
(such meanings to be equally applicable to the singular and plural forms
thereof):
"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, $75,000,000 as
such amount may be reduced from time to time pursuant to SECTION 2.2.
"ACQUISITION LOAN CONVERSION DATE" means the earliest of
(a) December 31, 1999;
(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 hereto (as such promissory note may be amended,
endorsed or otherwise modified from time to time), evidencing the aggregate
Indebtedness of the Borrower to such Lender resulting from outstanding
Acquisition
2
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 opposite its signature hereto or set forth in the Lender
Assignment Agreement, as such percentage may be adjusted from time to time
pursuant to Lender Assignment 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 its
Restricted 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 and any 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 Credit Agreement as originally in
effect on the Effective Date and as thereafter from time to time amended,
supplemented, amended and restated, 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
3
(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; PROVIDED, that
the Applicable Base Rate Margin for the period from the Effective Date through
(and including) the first Quarterly Payment Date of 1997 shall be determined on
the assumption that Tier ___________ is in effect until the Financial Statement
Delivery Date following March 31, 1997.
"APPLICABLE EURODOLLAR RATE MARGIN" means, with respect to any Eurodollar
Rate Loan, the then applicable per annum rate set forth in the Pricing Grid;
PROVIDED, that the Applicable Eurodollar Rate Margin for the period from the
Effective Date through (and including) the delivery of the first Quarterly
Payment Date of 1997 shall be determined on the assumption that Tier
_________________ is in effect until the Financial Statement Delivery Date
following March 31, 1997.
"ASSET DISPOSITION" is defined in SECTION 8.2.8.
"ASSETS" mean the assets conveyed to the Borrower pursuant to the
Conveyance Documents.
"ASSIGNEE LENDER" is defined in SECTION 11.11.1.
"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 incumbency
4
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" means
(a) the sum of (i) all cash and cash equivalents of the Partnership
Group on hand at the end of such Fiscal Quarter and (ii) all additional
cash and cash equivalents of the Partnership Group on hand on the date of
determination of Available Cash with respect to such Fiscal Quarter
resulting from borrowings for working capital purposes made subsequent to
the end of such Fiscal Quarter, less
(b) the amount of any cash reserves that is necessary or appropriate
in the reasonable discretion of the Managing General Partner to (i) provide
for the proper conduct of the business of the Partnership Group (including
reserves for future capital expenditures and for anticipated future credit
needs of the Partnership Group) subsequent to such Fiscal Quarter, (ii)
comply with applicable law or any loan agreement, security agreement,
mortgage, debt instrument or other agreement or obligation to which any
member of the Partnership Group is a party or by which it is bound or its
assets are subject, or (iii) provide funds for distributions to Unitholders
and the General Partners in respect of any one or more of the next four
Fiscal Quarters; provided, however, that the Managing General Partner may
not establish cash reserves pursuant to (iii) above if the effect of such
reserves would be that the Public Partnership is unable to distribute the
Minimum Quarterly Distribution on all Common Units with respect to such
Fiscal Quarter; and, provided, further, that disbursements made by a either
member of the Partnership Group or cash reserves established, increased or
reduced after the end of such Fiscal Quarter but on or before the date of
determination of Available Cash with respect to such Fiscal Quarter shall
be deemed to have been made, established, increased or reduced for purposes
of determining Available Cash within such Fiscal Quarter if the Managing
General so determines. Notwithstanding the foregoing, "Available Cash"
with respect to the Fiscal
5
Quarter in which the liquidation of the Public
Partnership occurs and any subsequent Fiscal Quarter shall equal zero.]
"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 D
hereto.
"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 Chicago,
Illinois, 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 interbank eurodollar market.
"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
6
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.
"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.
"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.
"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 NPS 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
NPS or any of its Affiliates,
(iii) any Person or group other than NPS 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
7
outstanding normally entitled to vote in elections of directors, or
(iv) during any period of 12 consecutive months after the Closing
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;
provided that 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),
or (iv) 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) or (iv) retain the same positions with the same
levels of authority as they previously had prior to such event.
"CLOSING DATE" means the date on which all conditions precedent set forth
in SECTION 6.1 are satisfied or waived by all Lenders and shall occur on or
before December 31, 1996 or such later date upon which the Borrower and the
Lenders shall mutually agree.
"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.
"COLLATERAL AGENT" means the collateral agent engaged by the Lenders and
the Private Placement Debt holders to hold and maintain perfected security
interests in the Collateral on behalf of the holders of the Obligations, the
Private Placement Debt and the Parity Debt and as more fully described in the
Intercreditor Agreement.
8
"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 I hereto.
"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 suppliers, sell to its customers or
need for its inventory during the period covered by such agreement or
arrangement.
"COMMON UNITS" means the common limited partner interests of the Public
Partnership.
9
"COMMON UNITS ISSUANCE" means issuance of Common Units by the Public
Partnership with net proceeds of at least $162,500,000 received by the Public
Partnership.
"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 at any date of
determination, for the period of four consecutive Fiscal Quarters most recently
completed at least 45 days prior to such date of determination,
(i) the sum of, without duplication, the amounts for such period, taken as
a single accounting period, of
(a) consolidated net income,
(b) consolidated non-cash items,
(c) consolidated interest expense,
(d) consolidated income tax expense, and
(e) all fees, costs and expenses with respect to the retirement or
repayment of Indebtedness existing immediately prior to the
closing, to the extent that the same were deducted from
consolidated net income LESS
(ii) the sum of, without duplication, the amounts for such period, taken on
a single accounting period, any non-cash items added in the
determination of such consolidated net income for such period.
Consolidated Cash Flow shall be calculated after giving effect, on a
pro forma basis for the four consecutive Fiscal Quarters most recently
completed, 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
10
its 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 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 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 the Borrower's business at
similarly situated facilities. If the applicable Reference Period for any
calculation of Consolidated Cash Flow shall include a partial period
occurring prior to the Closing Date, then such Consolidated Cash Flow shall
be calculated based upon the Consolidated Cash Flow on a pro forma basis
for such portion of the Reference Period prior to the Closing Date (giving
effect to the transactions occurring on the Closing Date) and the
Consolidated Cash Flow for the remaining portion of the Reference Period
occurring on and after the Closing Date, giving pro forma effect, as
described in the preceding sentences, to all applicable transactions
occurring on the Closing Date or otherwise.
"CONSOLIDATED CASH FLOW COVERAGE OF DEBT SERVICE" means pro forma
Consolidated Cash Flow for such period of four Fiscal Quarters divided by pro
forma cash interest expense and scheduled principal payments payable during the
four consecutive Fiscal Quarters following the date of determination associated
with the Private Placement Debt and other Indebtedness (other than the
Obligations, except as provided below) and including the actual interest
payments on Working Capital Loans and Acquisition Loans
11
during the most recent four Fiscal Quarters and including all principal
amounts relating to Working Capital Loans during the 12 month period
immediately prior to the termination or final maturity thereof (unless
extended, renewed or replaced), and including principal payments relating
to Acquisition Loans based on the assumption that the Acquisition Loan
Conversion Date has occurred. This calculation will be after giving
effect to any Indebtedness proposed to be incurred on such date and to
the repayment of any Indebtedness that is being refinanced and repaid
within 12 months from such date of determination.
"CONSOLIDATED CASH FLOW COVERAGE OF MAXIMUM DEBT SERVICE" means pro forma
Consolidated Cash Flow for such period of four Fiscal Quarters divided by the
maximum pro forma cash interest and scheduled principal payments due during any
future period of four consecutive Fiscal Quarters (from the Closing Date through
the Stated Maturity Date) associated with the Private Placement Debt and all
other Indebtedness (other than the Obligations, except as provided below)
outstanding and including the actual interest payments associated with the
Working Capital Loans and Acquisition Loans during the most recent four Fiscal
Quarters and including all principal amounts relating to the Working Capital
Loans during the 12 month period immediately prior to the termination or final
maturity thereof (unless extended, renewed or replaced) and including principal
payments of Acquisition Loans based on the assumption that the Acquisition Loan
Conversion Date has occurred. This calculation will be after giving effect to
any Indebtedness proposed to be incurred on such date and to the repayment of
any Indebtedness that is being refinanced and repaid within 12 months from such
date of determination.
"CONSOLIDATED NET WORTH" means at any time of determination:
(a) the total assets of the Borrower and its Restricted Subsidiaries which
would be shown as assets on a consolidated balance sheet of the Borrower and its
Restricted Subsidiaries as of such time, prepared in accordance with GAAP, MINUS
(b) the total liabilities of the Borrower and its Restricted Subsidiaries
which would be shown as liabilities on a
12
consolidated balance sheet of the Borrower and, its Restricted Subsidiaries as
such time, prepared in accordance with GAAP.
"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 D hereto.
"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.
"CONVEYANCE DOCUMENTS" means (a)(i) [the Contribution and Assumption
Agreement, dated as of the Closing Date, among the Borrower and the [Managing]
General Partner and Cornerstone Service Corporation, and (ii) the Conveyance,
Contribution and Assumption Agreement, dated as of the Closing Date, among the
Public Partnership, the Borrower and the [Managing] General Partner, and (b)
each of the individual conveyances, assignments and bills of sale delivered to
the Borrower pursuant to the agreements referred to in the foregoing clause
(a)].
"COVERAGE TEST" means the pro forma ratio of Consolidated Cash Flow to
Consolidated Interest Expense.
13
"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.
"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.
"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.
"EFFECTIVE DATE" means the date this Agreement becomes effective pursuant
to SECTION 11.8.
"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
14
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 Lender
Assignment Agreement or such other office of a Lender (or any successor or
assign of such Lender) within the United States 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.
15
"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.
"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.
"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 "1996 Fiscal Year") refer to the Fiscal Year ending on
the June 30 occurring during such calendar year.
16
"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 the Guaranty executed and delivered pursuant to
SECTION 6.1.16, substantially in the form of EXHIBIT hereto, as amended,
supplemented, restated or otherwise modified from time to time.
"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
17
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.
"HEREIN", "HEREOF", "HERETO", "HEREUNDER" and similar terms contained in
this Agreement or any other Loan Document refer to this Agreement or such other
Loan Document, as the case may be, as a whole and not to any particular Section,
paragraph or provision of this Agreement or such other Loan Document.
"IMPERMISSIBLE QUALIFICATION" means, relative to the opinion or
certification of any independent public accountant as to any financial statement
of the Borrower, any qualification or exception to such opinion or certification
(a) which is of a "going concern" or similar nature;
(b) which relates to the limited scope of examination of matters
relevant to such financial statement; or
(c) which relates to the treatment or classification of any item in
such financial statement and which, as a condition to its removal, would
require an adjustment to such item the effect of which would be to cause
the Borrower to be in default of any of its obligations under
SECTION 8.2.4.
"INCLUDING" means including without limiting the generality of any
description preceding such term, and, for purposes of this Agreement and each
other Loan Document, the parties hereto agree that the rule of EJUSDEM GENERIS
shall not be applicable to limit a general statement, which is followed by or
referable to an enumeration of specific matters, to matters similar to the
matters specifically mentioned.
"INDEBTEDNESS" of any Person means, without duplication:
(a) all indebtedness for borrowed money;
18
(b) all obligations issued, undertaken or assumed as the deferred
purchase price of property or services;
(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) all indebtedness referred to in clauses (a) through (e) above
secured by (or for which the holder of such Indebtedness has an existing
right, contingent or otherwise, to be secured by) any Lien upon or in
property (including accounts and contracts rights) owned by such Person,
even though such Person has not assumed or become liable for the payment of
such Indebtedness;
(g) all capital stock of such Person that is redeemable prior to the
final maturity of the Private Placement Debt, valued at the greater of its
voluntary or involuntary maximum fixed repurchase price plus accrued
dividends;
(h) any redeemable preferred stock redeemable prior to the final
maturity of the Private Placement Debt of any Restricted Subsidiary of such
Person 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; and
(i) all guaranty obligations of such Person in respect of indebtedness
or obligations of others of the kinds referred to in clauses (a) through
(h) above. For purposes of this definition, undrawn letters of credit,
trade
19
accounts payable, accrued interest and other accrued expenses and
customer credit balances arising in the ordinary course of business on
ordinary terms shall not constitute Indebtedness.
"INDEMNIFIED LIABILITIES" is defined in SECTION 11.4.
"INDEMNIFIED PARTIES" is defined in SECTION 11.4.
"INTERCREDITOR AGREEMENT" means the Intercreditor Agreement executed and
delivered pursuant to SECTION 6.1.7, substantially in the form of EXHIBIT H
hereto, as amended, supplemented, restated or otherwise modified from time to
time.
"INTEREST EXPENSE" means, for any period, the aggregate consolidated
interest expense of the Borrower and all Subsidiaries determined in accordance
with GAAP but including, without duplication, all commissions, discounts and
other fees and charges owed with respect to letters of credit and banker's
acceptances, net costs under interest rate protection agreements and the portion
of any Capitalized Lease Liabilities allocable to consolidated interest expense
and the product of (A) 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 (B) 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.
"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), in each
case as the Borrower may select in its relevant notice pursuant to SECTION 2.3
or 2.4; PROVIDED, HOWEVER, that
20
(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;
(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 as long as it is provided by a Lender or an
Affiliate of a Lender.
"INVESTMENT" means, relative to any Person,
(a) any loan or advance made by such Person to any other Person
(excluding commission, travel and similar advances to officers and
employees made in the ordinary course of business);
21
(b) any Contingent Liability of such Person; and
(c) any ownership or similar interest held by such Person in any
other Person.
The amount of any Investment shall be the original principal or capital amount
thereof less all returns of principal or equity thereon (and without adjustment
by reason of the financial condition of such other Person) and shall, if made by
the transfer or exchange of property other than cash, be deemed to have been
made in an original principal or capital amount equal to the fair market value
of such property.
"ISSUANCE REQUEST" means a request and certificate duly executed by an
Authorized Officer of the Borrower, in substantially the form of EXHIBIT E
attached hereto (with such changes thereto as may be agreed upon from time to
time by the Agent and the Borrower).
"ISSUER" means BofA or any successor issuer thereto as may be reasonably
agreed upon by the Agent, Required Lenders and Borrower.
"LENDER ASSIGNMENT AGREEMENT" means a Lender Assignment Agreement
substantially in the form of EXHIBIT G hereto.
"LENDERS" is defined in the PREAMBLE.
"LETTER OF CREDIT" is defined in SECTION 4.1.
"LETTER OF CREDIT AVAILABILITY" means, at any time, the lesser of
(a) the excess of
(i) $30,000,000 at any time prior to March 31, 1997 or
$20,000,000 at any time thereafter
OVER
(ii) the then Letter of Credit Outstandings,
22
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
(a) 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
(b) the then aggregate amount of all unpaid and outstanding
Reimbursement Obligations.
"LIEN" shall mean any security interest, mortgage, deed of trust, pledge,
hypothecation, assignment, charge or deposit arrangement, encumbrance, lien
(statutory or other) or preferential arrangement of any kind or nature
whatsoever in respect of any property (including those created by, arising under
or evidenced by any conditional sale or other title retention agreement, the
interest of a lessor under a capital lease, any financing lease having
substantially the same economic effect as any of the foregoing, or the filing of
any financing statement naming the owner of the asset to which such lien relates
as debtor, under the Uniform Commercial Code or any comparable law) and any
contingent or other agreement to provide any of the foregoing, but not including
the interest of a lessor under an operating lease.
"LOAN" means, as the context may require, either 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.
23
"LOAN DOCUMENT" means this Agreement, the Notes, the Security Agreement and
any pledge agreement, security agreement, guaranty, or mortgage delivered to the
Agent pursuant to this Agreement.
"MANAGING GENERAL PARTNER" is defined in the recitals and shall include any
successor thereto.
"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.
"NET INCOME" means with respect to any Person or any assets the net income
(or loss) of such Person or arising from such assets; PROVIDED that there shall
be specifically excluded therefrom (a) gains or losses from the sale of capital
assets outside the ordinary course of business, (b) gains or losses arising from
extraordinary items, and (c) any net income of any Subsidiary of the referent
Person if such Subsidiary is subject to restrictions, directly or indirectly
(including, without limitation, restrictions imposed by operation of the terms
of its Organic Documents or any agreement, instrument, judgment, decree, order,
statute, rule or governmental regulation applicable to such Subsidiary), on the
payment of dividends or the making of distributions by such Subsidiary, directly
or indirectly, to the referent Person, except that (A) the referent Person's
equity in the net income of any such Subsidiary for such period shall be
included in such consolidated Net Income up to the aggregate amount of cash
actually distributed by such Subsidiary during such period to the referent
Person as a dividend or other distribution and (B) the referent Person's equity
in a net loss of any Subsidiary subject to such restrictions for such period
shall be included in determining such Net Income.
"NGC" means Northwestern Growth Corporation, a South Dakota corporation and
a wholly owned subsidiary of NPS.
"NOTE" means, as the context may require, either a Working Capital Note, an
Acquisition Note or a Swing Note.
24
"NOTE AGREEMENT" means, [collectively, the several substantially identical]
the note agreement[s] dated __________ pursuant to which the Private Placement
Debt shall be issued.
"NPS" means Northwestern Public Service Company, a Delaware company.
"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 or
any Lender) obligated under any Loan Document.
"OPERATIVE AGREEMENTS" means __________________________
"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 Closing Date and as the same may
be from time to time amended, supplemented or otherwise modified subject to
SECTION 8.2.9.
"PARTNERSHIP GROUP" means the Borrower and the Public Partnership.
"PBGC" means the Pension Benefit Guaranty Corporation and any entity
succeeding to any or all of its functions under ERISA.
25
"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.
"PLAN" means any Pension Plan or Welfare Plan.
26
"PRICING GRID" means the pricing grid (the last three columns being
expressed in hundredths of one percent) as follows:
-------------------------------------------------------------------------------
Total
Funded
Indebtedness to Applicable Applicable
Consolidated Eurodollar Facility Base Rate
Tier Cash Flow Ratio Rate Margin Fee Margin
-------------------------------------------------------------------------------
I (2.75 25.0 12.5 0.0
-------------------------------------------------------------------------------
)=2.75
II but
(3.25 32.5 17.5 0.0
-------------------------------------------------------------------------------
III )=3.25
but (3.75 47.5 22.5 0.0
-------------------------------------------------------------------------------
)=3.75
IV but (4.25 60.0 27.5 0.0
-------------------------------------------------------------------------------
V )=4.25 80.0 32.5 12.5
-------------------------------------------------------------------------------
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 Effective Date
to the Financial Statement Delivery Date for the Fiscal Quarter ending March 31,
1997 the applicable level shall be Tier [IV]; 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 V from the due date until the date so delivered.
"PRIVATE PLACEMENT DEBT" means the issuance of $220 million aggregate
principal amount of Senior Secured Notes, with net proceeds of not less than
$210 million, having a stated interest rate, prior to default, of 7.53% per
annum.
"PUBLIC PARTNERSHIP" is defined in the recitals hereto.
27
""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 such
Lender which may serve as a successor Agent to BofA pursuant to SECTION 10.9.
"REFERENCE PERIOD", with respect to any incurrence of Indebtedness, or any
transaction pursuant to SECTION 8.2.10, means the period of four consecutive
Fiscal Quarters ending with the last full Fiscal Quarter for which financial
information in respect thereof is available immediately preceding the date of
such incurrence or transaction.
"REGISTRATION STATEMENT" means the registration statement originally filed
on October 10, 1996 on Form S-1 by the Public Partnership with the Securities
and Exchange Commission, as amended through Amendment Number ____ dated
_____________.
"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.
28
"REQUIRED LENDERS" means Lenders holding not less than 50% of the
Commitments (or, if the Commitments are terminated, Lenders having not less than
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
Senior 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 any 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 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 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
29
an Unrestricted Subsidiary in accordance with the provisions of SECTION 8.2.15.
"SECURITY AGREEMENT" means the Security Agreement executed and delivered
pursuant to SECTION 6.1.8, substantially in the form of EXHIBIT J hereto, as
amended, supplemented, restated or otherwise modified from time to time.
"SECURITY DOCUMENTS" means any of the documents securing the Notes.
"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, December 31, 1999 subject to SECTION 3.1.1,
and with respect to the Acquisition Loans December 31, 2003.
"SUBSIDIARY" means, with respect to any Person, any corporation, limited
liability company, partnership, joint venture, association, trust or other
entity of which (or in which) more than 50% of (a) the issued and outstanding
Capital Stock having ordinary voting power to elect a majority of the board of
directors of such corporation (irrespective of whether at the time Capital Stock
of any other class or classes of such corporation shall or might have voting
power upon the occurrence of any contingency), (b) the interests in the capital
or profits of such partnership, limited liability company, joint venture or
association with ordinary voting power to elect a majority of the board of
directors (or Persons performing similar functions) of such partnership, limited
liability company, joint venture or association, or (c) the beneficial interests
in such trust or other entity with ordinary voting power to elect a majority of
the board of trustees (or Persons performing similar functions) of such trust or
other entity, is at the time directly or indirectly owned or controlled by such
Person, by such Person and one or more of its other Subsidiaries, or by one or
more of such Person's other Subsidiaries.
30
"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 M.
"SWING NOTE" means a promissory note of the Borrower payable to the Swing
Line Lender, in the form of EXHIBIT C hereto (as such promissory note may be
amended, endorsed or otherwise modified from time to time), evidencing the
aggregate Indebtedness of such Borrower to such Swing Line Lender resulting from
outstanding Swing Loans, and also means all other promissory notes accepted from
time to time in substitution therefor or renewal thereof.
"TAXES" is defined in SECTION 5.6.
"TOTAL FUNDED INDEBTEDNESS TO CONSOLIDATED CASH FLOW RATIO" means the ratio
of consolidated Debt for the Borrower and its Subsidiaries to Consolidated Cash
Flow as at any Fiscal Quarter end for the period then ending.
"TRANSFER" means the transfer of the Assets and the assumption of the
liabilities contemplated by the Conveyance Documents.
"TYPE" means, relative to any Loan, the portion thereof, if any, being
maintained as a Base Rate Loan or a Eurodollar Rate Loan.
"UNITHOLDERS" shall have the meaning given to it in the Partnership
Agreement.
"UNITED STATES" or "U.S." means the United States of America, its fifty
States and the District of Columbia.
"UNRESTRICTED SUBSIDIARY" means any Subsidiary other than a Restricted
Subsidiary.
31
"WELFARE PLAN" means a "welfare plan", as such term is defined in section
3(1) of ERISA.
"WORKING CAPITAL LOAN" is defined in SECTION 2.1.1.
"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, $50,000,000,
as such amount may be reduced from time to time pursuant to SECTION 2.2.
"WORKING CAPITAL LOAN COMMITMENT TERMINATION DATE" means the earliest of
(a) December 31, 1999, subject to 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 in CLAUSE (b) or (c), 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 hereto (as such promissory note may be
amended, endorsed or otherwise modified from time to time), evidencing the
aggregate Indebtedness of the Borrower to such Lender 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 opposite its signature hereto or set forth in the
Lender Assignment Agreement, as such percentage may be adjusted from time to
time pursuant to Lender
32
Assignment Agreement(s) executed by such Lender and its Assignee Lender(s)
and delivered pursuant to SECTION 11.11.1.
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, 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 CROSS-REFERENCES. Unless otherwise specified, references in
this Agreement and in each other Loan Document to any Article or Section are
references to such Article or Section of this Agreement or such other Loan
Document, as the case may be, and, unless otherwise specified, references in any
Article, Section or definition to any clause are references to such clause of
such Article, Section or definition.
SECTION 1.4 ACCOUNTING AND FINANCIAL DETERMINATIONS. Unless otherwise
specified, all accounting terms used herein or in any other Loan Document shall
be interpreted, 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 ("GAAP") applied
in the preparation of the financial statements referred to in SECTION 7.5.
ARTICLE II
COMMITMENTS, BORROWING PROCEDURES AND NOTES
SECTION 2.1 COMMITMENTS. On the terms and subject to the conditions of
this Agreement (including ARTICLE VI), 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. From time to time on any
Business Day occurring prior to the Working Capital Loan Commitment Termination
Date, each Lender will make
33
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.
SECTION 2.1.2 ACQUISITION LOAN COMMITMENT. 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 prior to the Acquisition Loan Conversion Date.
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
(i) 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
(ii) of such Lender, together with its Working Capital Percentage
of all Letters of Credit Outstandings and its Percentage of the
aggregate outstanding amount of all Swing Loans (assuming conversion
of such Swing Loans to Working Capital Loans), would exceed such
Lender's Working Capital Percentage of the Working Capital Loan
Commitment Amount; or
34
(b) make any Acquisition Loan if, after giving effect thereto, the
aggregate outstanding principal amount of all Acquisition Loans
(i) of all Lenders would exceed the Acquisition Loan Commitment
Amount, or
(ii) of such Lender would exceed such Lender's Acquisition
Percentage of the Acquisition Loan Commitment Amount, or
(c) issue (in the case of any Issuer that is a Lender) or participate
in (in the case of each Lender) any Letter of Credit if, after giving
effect thereto
(i) 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, or
(ii) such Issuer's or Lender's Working Capital Percentage of all
Letter of Credit Outstandings and all Swing Loans together with the
aggregate outstanding principal amount of all Working Capital Loans of
such Issuer or Lender would exceed such Issuer's or Lender's
Percentage of 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 Closing 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.
35
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 [1:00 p.m.], Chicago 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 and
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 Managing General Partner on behalf of
or of the Borrower. On or before [2:00 p.m.] (Chicago 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 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 1:00 p.m., Chicago
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 an aggregate minimum amount of [$3,000,000] and 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
36
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 has occurred and
is continuing. Each Continuation/Conversion Notice must be signed by an
Authorized Officer of the Managing General Partner on behalf of the Borrower
or 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 SECTIONS 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 interbank eurodollar 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
37
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.
SECTION 2.7 SWING LINE.
(a) Upon the Borrower's request, and subject to the terms and
conditions of this Agreement, the Agent (in such capacity, the "Swing Line
Lender") may, in its sole discretion, on and after the Effective Date and
prior to the Working Capital Loan Commitment Termination Date, provide to
the Borrower a swing line credit facility (the "Swing Line") of up to
$5,000,000; provided that the Swing Line Lender shall not in any event be
permitted to make any Loan (each a "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 Swing Line
Lender at or before [10:00 a.m.], Chicago 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 $_________ and an integral multiple of $_________.
(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
38
and upon demand therefor, if made earlier, 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) The principal and interest outstanding under the Swing Line shall
be due and payable
(i) at or before 9:00 a.m., Chicago time, on the [seventh]
Business Day immediately following any Swing Loan 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 Loans, on the due date of any 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 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 not 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 Swing Line Lender no later than [10:00 a.m.],
Chicago time, on the day on
39
which the Borrower intends to make a voluntary prepayment, and
(ii) each such voluntary prepayment shall be in a minimum amount
of [$1,000,000] and in an integral multiple of [$100,000] (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 Agent in such
Swing Line Lender's Swing Loans, without recourse 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,
such Lender shall, to the extent of its 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 at any time during the continuance of
an Event of Default, without the consent of the Borrower, upon one Business
Day's notice to the Borrower terminate the Swing Line and cause Working
Capital Loans to be made by the Lenders in an aggregate amount equal to the
amount of principal and interest outstanding under the Swing Line, and the
conditions precedent set forth in SECTION 2.3 and SECTION 6.2 shall not
apply to such Working Capital Loans. The proceeds of such Working Capital
Loans shall be paid to the Swing Line Lender to retire the outstanding
principal and interest under the Swing Line.
(h) The Swing Line Lender shall not, without the approval of all
Lenders, make a Swing Loan if the Swing Line Lender then has actual
knowledge that a Default has occurred and is continuing.
40
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 $1,000,000 and
an integral multiple of $500,000, 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 $500,000 and an integral multiple of $100,000, or in
the whole outstanding principal amount of such Loan; and
41
(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 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 1/16
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 Acquisition Loan Stated Maturity Date. No
prepayment of any Acquisition Loan pursuant to this paragraph shall cause
an increase in the Acquisition Loan Commitment Amount.
42
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 prepayment 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 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 Loan
Commitment Amount.
SECTION 3.1.1 STATED MATURITY DATE AND LOAN COMMITMENT TERMINATION DATE.
(a) The Stated Maturity Date with respect to the Working Capital Loans shall
terminate and each Lender shall be relieved of its obligations to make any
Working Capital Loans on the Working Capital Loan Commitment Termination Date.
The Borrower may from time to time request an extension of the Working Capital
Loan Commitment Termination Date 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 Working
Capital Loan Commitment Termination Date. The Working Capital Loan Commitment
Termination Date shall be so extended if the Agent shall have received from each
Lender on or prior to the thirtieth day preceding the then scheduled Working
Capital Loan Commitment Termination Date a duly executed counterpart of such
Commitment Termination Date Extension Request. Each Lender may in its 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 Working Capital Loan
Commitments, but less than 100% of the Working Capital Loan Commitments, on or
43
prior to the thirtieth day preceding the then scheduled Working Capital
Commitment Termination Date, the Agent shall so notify (the date of such notice
being the "NOTICE DATE") the Borrower 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' Working Capital Loan Commitments, Working Capital Loans and
Letter of Credit Outstandings, so the pro rata share of any New Lender of the
Acquisition Loan Commitments, Working Capital Loan Commitments, and Letter of
Credit Outstandings shall be the same. If any Working Capital Loan Commitment
Termination Date 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 Working Capital Loan Commitment Termination Date a
written notice of election, either (i) not to extend such Working Capital Loan
Commitment Termination Date, in which case such 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 Working Capital Loan
Commitments of the Lenders who have delivered duly executed counterparts of a
Commitment Termination Date Extension Request represent at least 85% of the
Working Capital Loan Commitments, to extend such current Working Capital Loan
Commitment Termination Date, in which case (x) the Working Capital Loan
Commitment Termination Date shall be extended for an additional period of one
year from the then scheduled Working Capital Loan Commitment Termination Date,
and (y) the Working Capital Loan Commitments shall be reduced on the then
scheduled Working Capital Loan Commitment Termination Date to an amount equal to
the aggregate of the Working Capital Loan Commitments of the Lenders who had
delivered duly executed counterparts of a Commitment Termination Date Extension
Request on or prior to the thirtieth day preceding the then scheduled Working
Capital Loan Commitment Termination Date, plus the aggregate Working Capital
Loan Commitments of the New Lenders and (z) the Working Capital
44
Loan Commitments shall be reduced on the then scheduled Working Capital Loan
Commitment Termination Date to an amount equal to (1) the aggregate of the
Working Capital Loan Commitments 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 Working Capital Loan
Commitment Termination Date plus (2) the aggregate Commitments of the New
Lenders, and the Borrower shall pay (such payment to be made on such Working
Capital Loan Commitment Termination Date) in full all Working Capital Loans
and Acquisition 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 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 Working Capital Loan Commitment
Termination Date, such 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
45
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, relative to any Interest Period for Eurodollar
Rate Loans, the rate of interest per annum determined by the Agent at which
Dollar deposits are offered (i) by BofA's Grand Cayman Branch, Grand Cayman
B.W.I. (or such other office as may be designated by BofA for such purpose), or
(ii) in the event BofA is not the Reference Lender, the office as may be
designated by the Reference Lender for such purpose, in each case, to major
banks in the offshore dollar market at their request at approximately 10:00 a.m.
Chicago time two Business Days prior to the commencement of such Interest Period
in an amount approximately equal to the amount of the Reference Lender's
Eurodollar Rate Loan and for a period approximately equal to such Interest
Period.
"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.
46
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 POST-MATURITY RATES. After the date any principal amount of
any Loan is due and payable (whether on the Stated Maturity Date applicable to
such Loan, upon acceleration or otherwise), or after any other monetary
Obligation of the Borrower shall have become due and payable, the Borrower shall
pay, but only to the extent permitted by law, interest (after as well as before
judgment) on such amounts at a rate per annum 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 90
days, on the 90th day of such Interest Period); and
(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 accrued on Loans or other monetary Obligations arising under this
Agreement or any other Loan Document after the date such amount is due and
payable (whether on the applicable Stated
49
Maturity Date, upon acceleration or otherwise) 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 FACILITY FEE. The Borrower agrees to pay to the Agent for
the account of each Lender, 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 VI) commencing on the Effective Date and
continuing through the applicable Loan Commitment Termination Date, a facility
fee at the rate as established on the Pricing Grid per annum on such Lender's
applicable Percentage of the applicable Commitment Amount on the date hereof.
Such facility fees shall be payable by the Borrower in arrears on each Quarterly
Payment Date, commencing with the first such day following the Effective Date,
and on the applicable Loan Commitment Termination Date.
SECTION 3.3.2 LETTER OF CREDIT FACE AMOUNT FEE. The Borrower agrees to
pay to the Agent, for the account of the Lenders, a fee for each Letter of
Credit for the period from and including the date of the issuance of such Letter
of Credit to (but not including) the date upon which such Letter of Credit
expires, equal to the product of the Applicable Eurodollar Rate Margin per annum
times the face amount of such Letter of Credit. Such fee shall be payable by
the Borrower in arrears 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 Letter of Credit.
SECTION 3.3.3 LETTER OF CREDIT ISSUING FEE. The Borrower agrees to pay to
the Agent, for the account of the applicable Issuer, 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 FEE. The Borrower agrees to pay to BofA those
fees specified in the letter agreement dated
48
November 19, 1996 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
applicable Issuer an Issuance Request on or before 11:00 a.m., Chicago time, the
Borrower may request, from time to time prior to the Working Capital Loan
Commitment Termination Date and on not less than [three nor more than five]
Business Days' notice, that such Issuer issue an irrevocable standby letter of
credit in substantially the form of EXHIBIT N hereto, or in such other form as
may be requested by the Borrower and approved by such Issuer (each a "LETTER OF
CREDIT"), in support of obligations of the Borrower or any Restricted Subsidiary
incurred in the Borrower's ordinary course of business of the Borrower or its
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 $[100,000]; and
(ii) does not exceed (or would not exceed) the then Letter of
Credit Availability;
(b) be stated to expire on a date (its "STATED EXPIRY DATE") no later
than the earlier of thirteen months from its date of issuance and the
Working Capital Loan Commitment Termination Date; and
(c) on or prior to its Stated Expiry Date
(i) terminate immediately upon notice to the Issuer thereof from
the beneficiary thereunder that all
49
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
applicable 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 such Issuer to extend the Stated Expiry Date of
such Letter of Credit for an additional period not to exceed the earlier of
thirteen months from its date of extension and 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 VI), 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. Each 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.
SECTION 4.3 EXPENSES. The Borrower agrees to pay to the Agent for the
account of the applicable Issuer(s) all administrative expenses of such
Issuer(s) in connection with the issuance, maintenance, modification (if any)
and administration of each Letter of Credit issued by such Issuer(s) upon demand
from time to time.
SECTION 4.4 OTHER LENDERS' PARTICIPATION. 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 Percentage, be deemed irrevocably to have
participated in the issuance of such Letter of Credit and shall
50
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 such 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 any
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 such Issuer under a Letter of
Credit issued by it, or in the event such Issuer must for any reason return
or disgorge such reimbursement, such 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 such 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 such Issuer specified in such notice not later than 10:00 a.m.,
Chicago time, on the Business Day (under the laws of the jurisdiction of such
Issuer) after the date notified by such Issuer. In the event that any Lender
fails to make available to such Issuer the amount of such Lender's
participation in such Letter of Credit as provided herein, such 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 any Issuer any amounts made available by such Lender to such
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 such Issuer in respect of which payment was made by such Lender
constituted gross negligence or wilful misconduct on the part of such Issuer.
Each
51
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 such Issuer such other Lender's Percentage of all payments received by
such Issuer from the Borrower in reimbursement of drawings honored by such
Issuer under such Letter of Credit when such payments are received.
SECTION 4.5 DISBURSEMENTS. Each 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 applicable
Issuer shall make such payment to the beneficiary (or its designee) of such
Letter of Credit. Prior to 12:00 noon, Chicago time, on the Disbursement Date,
the Borrower will reimburse the applicable Issuer for all amounts which it has
disbursed under the Letter of Credit. To the extent the applicable 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
applicable Issuer is not reimbursed by the Borrower on the Disbursement Date, or
if such Issuer must for any reason return or disgorge such reimbursement, the
Lenders (including such 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 an 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
52
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 such Issuer under
a Letter of Credit as a result of acts or omissions constituting gross
negligence or wilful misconduct on the part of such 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 applicable 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 such Issuer under such Letters of Credit
(notwithstanding that such amount may not in fact have been so paid or
disbursed), and, upon notification by such Issuer to the Agent and the Borrower
of its obligations under this Section, the Borrower shall be immediately
obligated to reimburse such Issuer the amount deemed to have been so paid or
disbursed by such Issuer. Any amounts so received by such 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 such Issuer. At any time when such Letters of Credit shall terminate
and all Obligations of each Issuer are either terminated or paid or reimbursed
to such Issuer in full, the Obligations of the Borrower under this
53
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 such Issuer), and such Issuer will return to the Borrower the
excess, if any, of
(a) the aggregate amount deposited by the Borrower with such Issuer
and not theretofore applied by such Issuer to any Reimbursement Obligation
OVER
(b) the aggregate amount of all Reimbursement Obligations to such
Issuer pursuant to this Section, as so adjusted.
At such time when all Events of Default shall have been cured or waived, each
Issuer shall return to the Borrower all amounts then on deposit (other than
amounts attributable to a mandatory prepayment) with such Issuer 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 applicable Issuer as
additional collateral security for the repayment of the Borrower's Obligations
in connection with the Letters of Credit issued by such 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 any Issuer nor any Lender (except to the
extent of its own gross negligence or wilful 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;
54
(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 any 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 any Issuer in good faith shall be binding
upon the Borrower and shall not put such 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 Effective Date, or
(b) compliance by any Issuer or any Lender with any direction,
request or requirement made after the 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:
55
(i) any Issuer or any Lender shall be subject to any tax (other
than taxes on net 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 such 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 any Issuer or participations therein purchased by any
Lender; or
(iii) there shall be imposed on any 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 such 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 such Issuer or such Lender, then and
in any such case such 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 three days of receipt of such
notification pay on demand such amounts as such Issuer or Lender may specify to
be necessary to compensate such 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 such 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
56
elsewhere provided in this ARTICLE IV, the Borrower hereby agrees to protect,
indemnify, pay and save each Issuer harmless from and against any and all
claims, demands, liabilities, damages, losses, costs, charges and expenses
(including reasonable attorneys' fees and allocated costs of internal
counsel) which such 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 wilful misconduct of such Issuer as determined by a
court of competent jurisdiction, or
(d) the failure of such 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 jure 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 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 all Lenders 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.
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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 interbank
eurodollar market; or
(b) by reason of circumstances affecting the Reference Lender's
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 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 (a)djusted), 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 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
58
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,
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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 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 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.
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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
(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
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such Taxes and the Borrower will promptly pay 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, as
applicable.
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, deduction or
counterclaim, not later than 1:00 p.m., Chicago 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
62
day funds to each Lender its share, if any, of such payments 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 to be made shall otherwise be due on a
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
63
(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 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 apply the proceeds of
(i) the Working Capital Loans to working capital, including letters of credit,
and other general partnership
64
purposes and (ii) 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
Securities Exchange Act of 1934 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 will be secured and rank pari passu with the Private Placement Debt
and Parity Debt. All of the accounts receivable, inventory, customer storage
tanks of the Borrower and the Restricted Subsidiaries (except tanks financed
pursuant to clause (e), (f) and (g) in SECTION 8.2.2. 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 Collateral Agent 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 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 shall not be unreasonably
withheld.
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ARTICLE VI
CONDITIONS TO BORROWING
SECTION 6.1 INITIAL BORROWING. The obligations of the Lenders to fund
the initial Borrowing 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 PARTNERSHIP ACTION. The Agent shall have received from the
Borrower a certificate, dated the date of the initial Borrowing, of a
Responsible Officer of the Borrower as to
(a) the form of the Partnership Agreement;
(b) any partnership action necessary for the execution, delivery and
performance of this Agreement, the Notes, the Security Agreement and each
other Loan Document to be executed on behalf of the Borrower; and
(c) the incumbency and signatures of those of the officers authorized
to act with respect to this Agreement, the Notes, the Security Agreement
and each other Loan Document executed on behalf of the Borrower,
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 DELIVERY OF NOTES. The Agent shall have received, for the
account of each Lender, the Notes duly executed and delivered by the Managing
General Partner on behalf of the Borrower.
SECTION 6.1.3 PRIVATE PLACEMENT DEBT AND PUBLIC PARTNERSHIP COMMON UNITS.
The Borrower shall have issued the Private Placement Debt on terms acceptable to
the Agent and the Public Partnership shall have completed the Common Units
Issuance. The Private Placement Debt shall have received an investment grade
rating from Fitch Investors Service, Inc.
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SECTION 6.1.4 PAYMENT OF OUTSTANDING INDEBTEDNESS, ETC. All Indebtedness
identified in ITEM 8.2.2(a) ("Indebtedness to be Paid on Effective Date") of the
Disclosure Schedule under the heading "Payments on the Effective Date", together
with all interest, all prepayment premiums and other amounts due and payable
with respect thereto, shall have been paid in full (including, to the extent
necessary, from proceeds of the initial Borrowing); and all Liens securing
payment of any such Indebtedness have been released and the Agent shall have
received all Uniform Commercial Code Form UCC-3 termination statements or other
instruments as may be suitable or appropriate in connection therewith.
SECTION 6.1.5 TRANSFER. The Transfer shall concurrently be consummated
substantially as described in the Registration Statement.
SECTION 6.1.6 WORKING CAPITAL DEBT. Upon consummation of all the
conditions set forth in SECTION 6.1, no more than $15,000,000 of Working Capital
Loans shall be outstanding.
SECTION 6.1.7 INTERCREDITOR AGREEMENT. The Agent shall have received
executed counterparts of the Intercreditor Agreement, dated as of the date
hereof, duly executed by [Private Placement Trustee].
SECTION 6.1.8 SECURITY AGREEMENT. The Agent shall have received executed
counterparts of the Security Agreement, dated as of the date hereof, duly
executed by the Borrower and the Restricted Subsidiaries, together with
(a) copies of properly executed Uniform Commercial Code financing
statements (Form UCC-1), naming the Borrower as the debtor and the
Collateral Agent 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 Collateral Agent pursuant
to the Security Agreement;
67
(b) executed copies of proper Uniform Commercial Code Form UCC-3
termination statements, if any, necessary to release all Liens and other
rights of any Person
(i) in any collateral described in the Security Agreement
previously granted by any Person, and
(ii) securing any of the Indebtedness identified in ITEM 8.2.2(a)
("Indebtedness to be Paid on Effective Date") of the Disclosure
Schedule under the heading "Payments on the Effective Date",
together with such other Uniform Commercial Code Form UCC-3 termination
statements as the Agent may reasonably request from such Obligors; and
(c) certified copies of Uniform Commercial Code Requests for
Information or Copies (Form UCC-11), or a similar search report certified
by a party acceptable to the Agent, dated a date reasonably near to the
date of the initial Borrowing, listing all effective financing statements
which name the Borrower (under its present name and any previous names) as
the debtor and which are filed in the jurisdictions in which filings were
made pursuant to CLAUSE (a) above, together with copies of such financing
statements (none of which shall cover any collateral described in the
Security Agreement).
SECTION 6.1.9 PERMITS. All permits, licenses and regulatory approvals
required to continue operations shall have been obtained except those the
failure of which to obtain would not have a material adverse effect on the
business or operations of the Borrower.
SECTION 6.1.10 OPINION OF COUNSEL. The Agent shall have received opinions,
dated the date of the initial Borrowing and addressed to the Agent and all
Lenders, from [_________________________________________], counsel to the
Borrower substantially in the form of EXHIBIT[S] K hereto.
SECTION 6.1.11 CLOSING FEES, EXPENSES, ETC. The Agent shall have received
for its own account, or for the account of each
68
Lender, as the case may be, all fees, costs and expenses due and payable
pursuant to SECTIONS 3.3 and 11.3, if then invoiced.
SECTION 6.1.12 COMPLIANCE CERTIFICATE. A certificate of the chief
financial Authorized Officer of the Borrower demonstrating compliance with the
covenants contained in SECTION 8.2.4.
SECTION 6.1.13 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 6.1.14 ENVIRONMENTAL DISCLOSURE. The Agent shall have received a
copy of __________.]
SECTION 6.1.15 SOLVENCY CERTIFICATE. The chief financial officer of
either the Borrower or the Managing General Partner shall have delivered to the
Agent a solvency certificate dated the Closing Date, substantially in the form
of EXHIBIT .
SECTION 6.1.16 GUARANTY. The Agent shall have received executed
counterparts of the Guaranty, dated as of the date hereof, duly executed by the
Restricted Subsidiaries.
SECTION 6.2 ALL BORROWINGS. The obligation of each Lender to fund any
Loan on the occasion of any Borrowing (including the initial Borrowing) 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 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 7.7 and SECTION 7.8) and
the Security Agreement shall be true and correct with the same effect as if
then made
69
(unless stated to relate solely to an early date, in which case such
representations and warranties shall be true and correct as of such
earlier date);
(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 Borrower's and Subsidiaries' consolidated business, operations,
assets, revenues, properties or prospects 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
materially adversely affect the consolidated businesses, operations,
assets, revenues, properties or prospects of the Borrower and their
Subsidiaries; and
(iii) since the date of the financial statements described in
SECTION 7.6 and after giving effect to the Transfer the initial
Borrowings hereunder and the issuance of the Private Placement Debt
and the Common Units Issuance, 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), operations, assets or business properties of the
Borrower and Subsidiaries taken as a whole; and
(c) no Default shall have then occurred and be continuing.
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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. 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, the statements made in SECTION 6.2.1 are 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. (a) 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 (including,
without limitation, the Assets), to conduct its business as described in the
Registration Statement after giving effect to the Transfer, to enter into this
Agreement, the Notes, the other Loan Documents and the Private Placement Debt to
which it is a party, and to carry out the terms of this Agreement, the Notes,
such other Loan Documents and the Private Placement Debt.
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(b) The Managing General Partner is a corporation duly organized, validly
existing and in good standing under the laws of the State of California and has
all requisite corporate power and authority to own and operate its properties,
to conduct its business as described in the Registration Statement, 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.
(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 described in the Registration Statement after giving effect to the
Transfer, 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 described in the
Registration Statement, and to execute, deliver and carry out the terms of the
Loan Documents to which it is a party.
SECTION 7.2 PARTNERSHIP INTERESTS. The only general partners of the
Borrower are the General Partners, which at the Closing Date will own between a
[____]% and a [_________]% general partner interest in the Borrower. As of the
Effective Date the only limited partner of the Borrower will be the Public
Partnership, which will own between a [____]% and a [ ]% limited partner
interest in the Borrower acquired as provided in the Registration Statement.
The Borrower will not have any other partners at the Closing. Except as
disclosed in ITEM 7.2 ("Subsidiaries") of the Disclosure Schedule, the Borrower
does not have, and immediately after giving effect to the transactions
contemplated by the [Conveyance Agreements] will 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
72
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,
after giving effect to the Transfer, 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
materially adverse effect on the condition (financial or otherwise),
operations, assets, business, properties of the Borrower and its Restricted
Subsidiaries taken as a whole. Each of the General Partners, [NPS], [NGC]
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 it 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, binding and enforceable obligation in
accordance with its terms, except that 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 Subsidiary of this Agreement,
the Notes and each other Loan Document executed or to be executed by it are
within the Borrower's and each 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
any Subsidiary; or
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(c) result in, or require the creation or imposition of, any Lien on
any of the Borrower's or any Subsidiary's properties, except as
contemplated hereby.
SECTION 7.5 GOVERNMENT APPROVAL, REGULATION, 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 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, or the issuance of the Private
Placement Debt other than filings to perfect Liens and the Common Units
Issuance. 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. (a) The Borrower has not
engaged in any business or activities prior to the date of this Agreement,
except for activities related to its formation, organization and prospective
operations, and will not have any significant assets or liabilities prior to the
Transfer, as contemplated by this Agreement and the Registration Statement.
[(b) The Borrower has delivered to the Agent complete and correct copies
of (i) the Registration Statement, and (ii) a memorandum dated __________
prepared by Xxxxxx Xxxxxxx & Co. Incorporated and Xxxx Xxxxxx Xxxxxxxx, Inc. for
use in connection with the Borrower's private placement of the Private Placement
Debt (the "Memorandum"). The PRO FORMA consolidated financial statements of the
Public Partnership set forth in the Registration Statement comply in all
respects with the applicable accounting requirements of the Securities Act of
1933, as amended, and the published rules and regulations thereunder and, in the
opinion of the Borrower, the assumptions on which the pro forma adjustments to
such pro forma consolidated financial statements of the Public Partnership are
based provided a reasonable basis for presenting the significant effects of the
74
transactions contemplated by such pro forma consolidated financial statements
and such pro forma adjustments give appropriate effect to such assumptions and
are properly applied in such pro forma consolidated financial statements. The
financial statements and schedules included in the Registration Statement (other
than with respect to pro forma matters) have been prepared in accordance with
GAAP applied on a consistent basis throughout the periods specified and present
fairly the financial position of the corporation or partnership to which they
relate as of the respective dates specified and the results of their operations
and cash flows for the respective periods specified. Since _______________, __,
199_ the Closing Date, there has been no material adverse change in the
business, financial condition, or results of operations of [Northwestern], the
General Partners and their consolidated subsidiaries taken as a whole. The
financial data included under the caption "Selected Historical and Pro Forma
consolidated Financial and Operating Date" for the Managing General Partner and
for the Public Partnership in the Registration Statement present fairly, on the
basis stated in the Registration Statement, the information set forth therein
and have been compiled on a basis consistent with that of the audited financial
statements included in the Registration Statement. The historical aspects of
the financial data included under the caption "Capitalization" in the
Registration Statement present fairly, on the basis stated in the Registration
Statement, the information set forth therein and have been compiled on a basis
consistent with that of the audited financial statements included in the
Registration Statement; the pro forma aspects of such financial data included
under the caption "Capitalization" in the Registration Statement have been
prepared in all material respects in accordance with all applicable rules and
guidelines of the Securities and Exchange Commission with respect to pro forma
financial information; and the assumptions on which the pro forma adjustments to
the pro forma aspects of the financial data included under the caption
"Capitalization" in the Registration Statement are based provide a reasonable
basis for presenting all of the significant effects of the transactions
contemplated by such pro forma financial data and such pro forma adjustments
give appropriate effect to such assumptions and are properly applied in such pro
forma financial data.
75
(c) The unaudited pro forma balance sheets of the General Partner as of
____________ __, 1996 present fairly the financial condition of the General
Partner as of that date. Except as disclosed on [SCHEDULE 5.4(c)], since
____________ __, 1996 to the Closing Date, there has been no change or event
which could reasonably be expected to have a material adverse effect in the
condition (financial or otherwise), operations, assets, business, properties or
prospects of the General Partner. The financial data for the General Partner in
the Memorandum present fairly, on the basis stated in the Memorandum, the
information set forth therein and have been compiled based on the audited
financial statements included in the Registration Statement. The financial data
identified as historical included in the Memorandum present fairly, on the basis
stated in the Memorandum, the information set forth therein and have been
compiled on a basis consistent with that of the audited financial statements
included in the Memorandum represent, in all material respects and on the basis
stated in the Memorandum, the General Partner's best estimate at such time with
respect to pro forma financial information; and the assumptions on which the pro
forma adjustments to the pro forma aspects of the financial data included in the
Memorandum are based provide a reasonable basis for presenting all of the
significant effects of the transactions contemplated by such pro forma financial
data and such pro forma adjustments give appropriate effect to such assumptions
and are properly applied in such pro forma financial data.]
(d) The financial projections provided on or prior to the Closing Date
were prepared in a manner consistent with the financial statements provided in
the Registration Statement and have been prepared on a consistent basis
throughout the periods specified. Such financial projections are based on
management's best estimates of future performance in accordance with reasonable
assumptions based on historical performance. Such projections are not a
guarantee of future performance.
SECTION 7.7 NO MATERIAL ADVERSE CHANGE. Since the date of the financial
statements described in SECTION 7.6 and after giving effect to the Transfer, the
initial Borrowings hereunder and the issuance of the Private Placement Debt and
the Common Units Issuance and for any determination after the delivery of the
first financial statements pursuant to SECTION 8.1.1(b),
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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), operations, assets
or business properties of the Borrower and Restricted Subsidiaries taken as a
whole.
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), operations, assets, business or
properties of the Borrower or any 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 Subsidiary
owns good (and marketable with respect to realty) title to (or, in the case of
leased property, has a valid leasehold interest in) all of its properties and
assets, real and personal, tangible and intangible, of any nature whatsoever
(including patents, trademarks, trade names, service marks, copyrights and other
intellectual property rights as are necessary to conduct the business of the
Borrower and Subsidiaries as heretofore operated and as proposed to be operated
from the date hereof), free and clear of all Liens, charges or claims (including
infringement claims with respect to patents, trademarks, copyrights and the
like) except (a) as permitted pursuant to SECTION 8.2.3 and (b) in the case of
realty, other title exceptions which do not materially adversely affect such
Borrower's or such Subsidiary's use of its properties and assets. The Borrower
does not own any real property except as set forth in ITEM 7.9 ("Real Property")
of the Disclosure Schedule and except for real property acquired after the
Effective Date.
SECTION 7.10 TAXES. The Borrower and each Subsidiary, and any
predecessor entity thereto, has filed all tax returns and reports required by
law to have been filed by it and has paid all
77
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) operations, assets, business 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 might result in the incurrence by the Borrower
or any member of the Controlled Group of any material liability, fine or
penalty. 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.
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 material
compliance with all Environmental Laws;
(b) to the Borrower's and each Subsidiary's knowledge, there have
been no past, and there are no pending or threatened
78
(i) material 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) material complaints, notices or inquiries to the Borrower or
any Subsidiary regarding potential liability under any Environmental
Law;
(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), operations,
assets, business, properties or prospects of the Borrower and the
Subsidiaries;
(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;
79
(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),
operations, assets, business, properties or prospects of the Borrower and
the Subsidiaries;
(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), operations, assets, business, properties or prospects of the
Borrower and the Subsidiaries;
(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
lead to material claims against the Borrower or any Subsidiary for any
remedial work, damage to natural resources or personal injury, including
claims under CERCLA;
(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,
80
have, or may reasonably be expected to have, a material adverse effect on
the condition (financial or otherwise), operations, assets, business,
properties or prospects of the Borrower and the Subsidiaries; and
(i) to the Borrower's and each Subsidiary's knowledge, there have
been no environmental investigations, studies, audits, tests, reviews or
other analyses or related correspondence or documentation conducted by, or
that are or have been in the possession, custody or control of, the
Borrower or any Subsidiary in relation to any site or facility now or
previously owned, operated, leased, used, occupied or controlled by any of
them which have not been delivered to the Agent; and
(j) 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 material liability under any Environmental Law.
SECTION 7.13 REGULATIONS G, U AND X. The Borrower is not engaged in the
business of extending credit for the purpose of purchasing 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 Regulation G, U or X. Terms for
which meanings are provided in F.R.S. Board Regulation G, 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
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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 CAPITALIZATION. ITEM 7.15 ("Capitalization") of the
Disclosure Schedule is a pro forma balance sheet of the Borrower on the
Effective Date after giving effect to the initial Borrowings hereunder, the
issuance of the Private Placement Debt, the repayment of the Indebtedness set
forth in ITEM 8.2.2(a) ("Indebtedness to be Paid on Effective Date") of the
Disclosure Schedule and the Transfer.
SECTION 7.16 SOLVENCY. The Borrower, both prior to and after giving
effect to any Borrowing hereunder (including the initial Borrowings), (i) is not
"insolvent" (as such term is defined in Section 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 7.17 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 7.18 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), operations, assets, business or
properties of the Borrower and the Restricted Subsidiaries, taken as a whole.
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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 [45
days?] after the end of each of the first three Fiscal Quarters in each
Fiscal Year of the Borrower, consolidated (and (i) if the Restricted
Subsidiaries or a Restricted Subsidiary constitutes a Substantial Portion,
then as to the Restricted Subsidiaries or (ii) if the Restricted
Subsidiaries do not or a Restricted Subsidiary does not constitute a
Substantial Portion, but one or more Restricted Subsidiaries have
outstanding Indebtedness owing to Persons other than the Borrower or any
Restricted Subsidiary and other than pursuant to any Security Document,
then as to the Restricted Subsidiaries, 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
flow, if applicable and as appropriate, 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 Fiscal Quarters) for the period
from the beginning of the current Fiscal Year to the end of such Fiscal
Quarter, setting forth in each case (except in the case of financial
statements with respect to the fiscal year of the Borrower beginning
________________, 1996 or if consolidating balance sheets of the Restricted
Subsidiaries were not required to be delivered pursuant to this subdivision
(a) for the previous corresponding period) in
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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 the
chief financial Authorized Officer of the 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 Borrower'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 that such reports otherwise satisfy such
requirements (for purposes of this Section 8.1.1(a), "Substantial
Portion" shall mean that either (x) either (A) the book value of the
assets of the Restricted Subsidiaries exceeds 10% of the book value of
the consolidated assets of the Borrower and the Restricted Subsidiaries,
or (B) the Restricted Subsidiaries account for more than 10% of the
consolidated Net Income of the Borrower and the Restricted Subsidiaries,
in each case in respect of the four Fiscal Quarters ended as of the date
of the applicable financial statement) or (y) either (A) the book value
of the assets of any Restricted Subsidiary exceeds 5% of the book value
of the consolidated assets of the Borrower and the Restricted
Subsidiaries, or (B) any Restricted Subsidiary accounts for more than 5%
of the consolidated Net Income of the Borrower and its Restricted
Subsidiaries, in each case in respect of the four Fiscal Quarters ended
as of the date of the applicable financial statement);
(b) as soon as practicable, but in any event within 120 days [90
days?] after the end of each Fiscal Year beginning June 30, 1997,
consolidated (and (i) if the Restricted Subsidiaries or a Restricted
Subsidiary constitutes a Substantial Portion, then as to the Restricted
Subsidiaries or (ii) if the Restricted Subsidiaries do not or a Restricted
Subsidiary does not constitute a Substantial Portion, but one or more
Restricted Subsidiaries have outstanding Indebtedness owing to Persons
other than the Borrower or any Restricted Subsidiary and other than
84
pursuant to any Security Document, then as to the Restricted
Subsidiaries, consolidating) balance sheets of the Borrower and any
Restricted Subsidiaries and the consolidated balance sheets of each
General Partner as at the end of such year and the related consolidated
(and, as to statements of income and cash flows, if applicable and as
appropriate, consolidating) statements of income, partners' capital,
cash flows and stockholders' equity of the Borrower and the Restricted
Subsidiaries and the consolidated statements of income, surplus, cash
flow and stockholders' equity of each General Partner for such Fiscal
Year, setting forth in each case (except in the case of the financial
statements with respect to the Fiscal Year of the Borrower beginning
__________________, 1996 or if consolidating balance sheets of the
Restricted Subsidiaries were not required to be delivered pursuant to
this subdivision (b) for the preceding corresponding period) in
comparative form the consolidated and, where applicable and as
appropriate, consolidating figures for the previous Fiscal Year, all in
reasonable detail, PROVIDED that delivery within the time periods
specified above of copies of the Borrower's Annual Report on Form 10-K
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, and (i) in the case of such consolidated financial
statements of the Borrower, accompanied by a report thereon of
____________________ or other independent public accountants of
recognized national standing selected by the Borrower, which report
shall 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 generally accepted auditing
standards in effect in the United States from time to time, and (ii) in
the case of such consolidated financial statements of each General
Partner and such consolidating financial statements of the Borrower,
85
certified by the principal financial officer of the general partner of
the Borrower, as presenting fairly in all material respects the
information contained therein, in accordance with GAAP applied on a
basis consistent with prior fiscal periods;
(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, 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) compliance with the financial covenants
set forth in SECTION 8.2.4 and 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 7.7 or (y) the commencement of any labor controversy, litigation,
action, proceeding of the type described in SECTION 7.7, notice thereof and
copies of all documentation relating thereto;
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(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;
(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 ___ 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 its Restricted Subsidiaries to, comply in all material respects
with all applicable laws, rules, regulations and orders, such compliance to
include (without limitation):
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(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) operations,
assets, business, properties of the Borrower and its Subsidiaries taken as
a whole.
SECTION 8.1.3 MAINTENANCE OF PROPERTIES. The Borrower will, and will
cause each of its 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.
SECTION 8.1.4 INSURANCE. The Borrower will, and will cause each of its
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.
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SECTION 8.1.5 BOOKS AND RECORDS. The Borrower will, and will cause each
of its 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 Restricted Subsidiaries' independent accountants,
and shall upon such request deliver a letter to the Borrower's and 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 its 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
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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
Debt. All of the accounts receivable, inventory, customer storage tanks of the
Borrower and the Restricted Subsidiaries (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 Private Placement Debt and the Obligations. In the event
that the Borrower obtains or creates any Restricted Subsidiaries, the Borrower
shall cause each such Restricted Subsidiary to issue a guarantee of the
Obligations, Private Placement Debt and Parity Debt and each such guarantee will
be in favor of the Collateral Agent 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 each Fiscal Year, will make a repayment of the aggregate
outstanding principal amount of all Working Capital Loans, if any, in an amount
sufficient so as to cause such aggregate outstanding principal amount not to
exceed $10,000,000.
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 its 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.
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SECTION 8.2.2 INDEBTEDNESS. The Borrower will not, nor will it permit any
of its Restricted Subsidiaries to, create, incur, assume or suffer to exist or
otherwise become or be liable in respect of any Indebtedness, other than,
without duplication, the following:
(a) Indebtedness existing on the date hereof 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 its 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 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), 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)
below;
(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
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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 its 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
last 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 pro forma 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 last 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 total funded Indebtedness
(including the Indebtedness to be incurred) to pro forma Consolidated Cash
Flow (as at the end of the last Fiscal Quarter but giving effect to such
additional Indebtedness as set forth in the definition below) is less than
4.75:1.00 if prior to December 31, 1997, 4.50:1.00 if thereafter but prior
to December 31, 1998, and 4.25:1.00 thereafter. Such additional
Indebtedness under this clause (h) may be secured equally and ratably with
the Obligations.
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(i) additional unsecured Indebtedness of the Borrower or its
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 pursuant to which such Indebtedness is subordinated to
the Obligations pursuant to subordination provisions in the form set forth
as EXHIBIT ;
(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 pursuant to
which such Indebtedness is subordinated to the Obligations pursuant to
subordination provisions in the form set forth as EXHIBIT ;
(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 its 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 $75,000,000 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 its Restricted Subsidiaries could incur at least $1 of
additional Indebtedness subject to the incurrence test in (h) above (it
being understood for purposes of the SECTION 8.2.2(k) [and Section ]
that any Indebtedness which, on the date of acquisition of any Person,
Business or Assets, could be incurred under either the foregoing clause (i)
or (ii) of this SECTION 8.2.2(k), shall be deemed to have been incurred
under clause (ii) of this SECTION 8.2.2(k);
(l) Indebtedness pursuant to Interest Rate Agreements; and
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(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 Parity Debt, the Private Placement Debt and the Obligations) of
Restricted Subsidiaries shall not exceed $10,000,000.
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 its 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 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
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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 its
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 Collateral Agent
for the benefit of the Lenders, the Private Placement Debt holders, the
holders of other 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;
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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
(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 or rights of any Restricted Subsidiary securing
indebtedness of such Restricted Subsidiary or to the Borrower or any other
Restricted Subsidiary;
96
(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 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 $5,000,000
per year.
SECTION 8.2.4 FINANCIAL CONDITION. The Borrower shall not permit
(a) the Total Funded Indebtedness (less the amount of cash in hand
with the Borrower and its Restricted Subsidiaries in excess of $1,000,000
but not in excess of $10,000,000) to Consolidated Cash Flow Ratio as at the
end of any Fiscal Quarter to be greater than 4.75:1 at any time on or
before December 31, 1997, 4.50:1 at any time thereafter on or before
December 31, 1998 and 4.25:1 at any time thereafter [, PROVIDED the
Borrower may take into consideration actual cash on hand in the amount of
no less than $1,000,000 nor more than $10,000,000 for purposes of
calculations pursuant to this paragraph.].
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(b) the ratio of Consolidated Cash Flow to consolidated Interest
Expense as at the end of any Fiscal Quarter to be less than 2.00:1 at any
time prior to December 31, 1997, 2.25:1 any time thereafter on or before
December 31, 1998 and 2.50:1 at any time thereafter.
Notwithstanding any provision in the definition of "Consolidated Cash Flow", for
the purpose clause (a) and (b)of this SECTION 8.2.4 only, Consolidated Cash Flow
shall be calculated on a rolling eight quarter basis divided by two or on a
rolling four quarter basis, whichever is greater.
SECTION 8.2.5 INVESTMENTS. Neither the Borrower nor any of its 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) certain investments in Interest Rate Agreements and Commodity
Hedging Agreements;]
(g) investments in short-term, high quality marketable securities;
98
(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,
its Unrestricted Subsidiaries up to a maximum of $20,000,000 annually and
on a cumulative basis, no more than 20% 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; and
(j) acquisitions so long as after any acquisition the Borrower shall
be in pro forma compliance with the covenants and after any acquisition in
excess of $15,000,000 the Borrower shall deliver a certificate
demonstrating such compliance and so long as the Required Lenders shall
consent (which consent shall not be unreasonably withheld) to any
acquisition in excess of $25,000,000 if the outstanding Acquisition Loans
exceed $40,000,000.
SECTION 8.2.6 RESTRICTED PAYMENTS, ETC.
(a) The Borrower will not make any Restricted Payment, other than
dividend payments needed to pay the tax liability and legal, accounting and
other professional fees and expenses of the Managing General Partner if (i)
there exists a Default or an Event of Default or if after giving effect to
such Restricted Payment a Default or an Event of Default would exist, or
(ii) the pro forma ratio of the Coverage Test is less than 2.00 if prior to
December 31, 1997, 2.25 if thereafter but prior to December 31, 1998, or
2.50 thereafter, for the period of four Fiscal Quarters immediately
preceding the date of such Restricted Payment. Other than this
restriction, the Borrower may make quarterly Restricted
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Payments in an 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 payment would have been permitted as of the date such
declaration, such payment shall be remitted if made during such 60 day
period. 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 to be made in respect of the Working Capital
Loans 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 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 in due to be paid), (y) with respect to
Acquisition Loans (as of the Acquisition Loan Conversion Date) and any
Indebtedness secured equally and ratably with the Notes of which
principal is payable annually, in the third Fiscal Quarter immediately
preceding each Fiscal Quarter in which any scheduled principal payment
is due with respect to such Acquisition Loans and other 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
Acquisition Loans and other such Indebtedness secured equally and
ratably with the Notes 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
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amount of all principal to be paid in respect of such Acquisition Loans
and other 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 Acquisition Loans and other such
Indebtedness in such principal payment quarter, and (z) with respect to
any other Indebtedness secured equally and ratably with the Notes 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. Such reserve 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.
(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 such Restricted Subsidiary to (a) pay
dividends or make any other distributions on or in respect of its capital
stock, or pay any indebtedness owed to the Borrower or any Restricted
Subsidiary, (b) make loans or advances to the Borrower or any Restricted
Subsidiary or (c) transfer any of its properties or assets to the Borrower
or any Restricted Subsidiary, 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
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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 its
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)(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 Unrestricted Subsidiaries permitted under SECTION 8.2.5 neither
the Borrower nor any of its 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
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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 which 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
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the same assumptions) not less than 25% of the consideration therefor.
Dispositions of Collateral made in accordance with this section shall be
made free and clear of the liens securing the Parity Debt.
Notwithstanding the foregoing, the Borrower and its 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 Collateral Agent 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 its
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 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 any the Private Placement Debt, other than any
amendment,
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supplement or other modification which extends the date, reduces the amount of
any required repayment or redemption or is immaterial and does not have a
material adverse effect upon the rights or interest of the Lenders.
SECTION 8.2.10 TRANSACTIONS WITH AFFILIATES. Except for the transactions
or conduct effected pursuant to the Operative Agreements as in effect on the
Closing Date or any other transactions or conduct described in or contemplated
by the Registration Statement or listed in ITEM 8.2.10 ("TRANSACTIONS WITH
AFFILIATES"), 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 either by CLAUSE (b) of
SECTION 8.2.2 as in effect on the Effective Date or by CLAUSES (d) or (f) of
SECTION 8.2.2 as to the assets financed with the proceeds of such Indebtedness)
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 its Restricted
Subsidiaries to, directly or indirectly, issue, contingently or otherwise, any
shares of such Subsidiary's
000
Xxxxxxx Xxxxx, xxxxxxxx, rights or options to purchase or acquire shares of such
Subsidiary's Capital Stock except to the Borrower or any of its Subsidiaries.
SECTION 8.2.13 OPERATING LEASES. The Borrower will not enter into, or
permit any Restricted Subsidiaries to enter into operating leases requiring
aggregate payments in excess of $15,000,000 in any Fiscal Year.
SECTION 8.2.14 RESTRICTED 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 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 as at the end of
the last 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 date
of the Agreement 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 its 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,
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(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 section (h) 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 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
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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), operations, assets, business, or properties of the Borrower and its
Subsidiaries taken as a whole.
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 of the Borrower or any other Obligor to the Agent or
any Lender for the purposes of or in connection with this Agreement or
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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
its Restricted Subsidiaries (other than the Notes) and the effect of such event
or condition is to cause (or 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,
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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 such Pension Plan, 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:
(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
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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 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 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
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60 consecutive 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 guarantying 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 its
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 its 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 PARTNERS. Any change to any Organic Document of any
Partner which would have a material adverse effect on the condition (financial
or otherwise), operations, assets, business, properties or prospects of the
Borrower and Subsidiaries.
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SECTION 9.2 ACTION IF BANKRUPTCY. If any Event of Default described in
CLAUSES (a) (b) or with respect to the Borrower and Managing General Partner,
(e) of SECTION 9.1.8) shall occur, the Commitments (if not theretofore
terminated) shall automatically terminate and the outstanding principal amount
of all outstanding Loans and all other Obligations shall automatically be and
become immediately due and payable, without notice or demand.
SECTION 9.3 ACTION IF OTHER EVENT OF DEFAULT.
(a) If any Event of Default (other than any Event of Default
described in CLAUSES (a) (b) or with respect to the Borrower and Managing
General Partner, (e) of 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 declare all or any
portion of the outstanding principal amount of the Loans and other
Obligations to be due and payable and/or the Commitments (if not
theretofore terminated) to be terminated, whereupon the full unpaid amount
of such Loans and other Obligations which shall be so declared due and
payable shall be and become immediately due and payable, without further
notice, demand or presentment, and/or, as the case may be, the Commitments
shall terminate.
(b) The right of the Lenders to make any declaration or acceleration
by virtue of an Event of Default described in SECTION 9.1.1.-9.1.11
(excluding, however, proceedings under SECTION 9.1.8. relating directly to
the Borrower), 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 any Event of Default has been
cured.
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ARTICLE X
THE AGENT
SECTION 10.1 APPOINTMENT AND AUTHORIZATION. (a) 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 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 may agree at the request of the
Required Lenders to act for such 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.
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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. (a) 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 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
115
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
116
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, 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.
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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
Issuing Lender 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 Issuing Lender.
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 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. Notwithstanding the foregoing, however, BofA
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may not be removed as the Agent at the request of the Required Lenders unless
BofA shall also simultaneously be replaced as "Issuing Lender" hereunder
pursuant to documentation in form and substance reasonably satisfactory to
BofA.
SECTION 10.10 WITHHOLDING TAX. (a) 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 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 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; 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
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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.
(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.
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SECTION 10.11 COLLATERAL MATTERS.
(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 release any Lien granted to or held by the Agent 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 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 release 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 obligation to such Lender under this Agreement and the other Loan
Documents is not and shall not be secured by any real property collateral now or
hereafter acquired by such Lender.
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ARTICLE XI
MISCELLANEOUS PROVISIONS
SECTION 11.1 WAIVERS, AMENDMENTS, ETC. 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 state
Maturity Dates 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.
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
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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 set forth in the Lender Assignment 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 reasonable all expenses of the Agent (including the reasonable fees
and out-of-pocket expenses of counsel to the Agent 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 rerecording 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 rerecorded by the terms
hereof or of the Security Agreement, and
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(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 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 and each Lender upon demand for all
reasonable out-of-pocket expenses (including reasonable attorneys' fees and
legal expenses) incurred by the Agent 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 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
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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 wilful 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
SECTIONS 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 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 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
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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.
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 ILLINOIS. This Agreement, the
Notes, the Security Agreement and the other Loan Documents 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.
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
(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
LOANS AND NOTES. Each Lender may assign, or sell
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participations in, its Loans and Commitments to one or more other Persons in
accordance with this SECTION 11.11.
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 propose 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 fraction of such Lender's total Loans and
Commitments (which assignment and delegation shall be of a constant, and not a
varying, percentage of all the assigning Lender's Loans and Commitments) 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
penultimate sentence of SECTION 5.6 and SECTION 10.10 and FURTHER, PROVIDED,
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,
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(d) such Assignee Lender shall have executed and delivered to the
Borrower and the Agent a Lender Assignment 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 Lender Assignment 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 Lender
Assignment 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 Lender Assignment Agreement, shall be
released from its obligations hereunder and under the other Loan Documents.
Such assignor Lender or such Assignee Lender must also pay a processing fee to
the Agent upon delivery of any Lender Assignment Agreement in the amount of
$2,500. Any attempted assignment and delegation not made in accordance with
this SECTION 11.11.1 shall be null and void.
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
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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 each subject to the preceding sentence
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 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 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
SHALL BE BROUGHT AND MAINTAINED EXCLUSIVELY IN THE COURTS OF THE STATE OF
ILLINOIS OR IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF
ILLINOIS; PROVIDED, HOWEVER, THAT ANY SUIT SEEKING ENFORCEMENT AGAINST ANY
COLLATERAL OR OTHER PROPERTY MAY BE BROUGHT, AT THE AGENT'S OPTION, IN THE
COURTS OF ANY 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 ILLINOIS AND OF THE UNITED STATES DISTRICT COURT FOR THE
NORTHERN DISTRICT OF ILLINOIS FOR THE PURPOSE OF ANY
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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
ILLINOIS. 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. TO THE EXTENT THAT THE BORROWER HAS OR
HEREAFTER MAY ACQUIRE ANY IMMUNITY FROM JURISDICTION OF ANY COURT OF FROM ANY
LEGAL PROCESS (WHETHER THROUGH SERVICE OR NOTICE, ATTACHMENT PRIOR TO
JUDGMENT, ATTACHMENT IN AID OF EXECUTION OR OTHERWISE) WITH RESPECT TO ITSELF
OR ITS PROPERTY, THE BORROWER HEREBY IRREVOCABLY WAIVES SUCH IMMUNITY IN
RESPECT OF ITS OBLIGATIONS UNDER THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS.
SECTION 11.14 WAIVER OF JURY TRIAL. THE AGENT, THE LENDERS AND THE
BORROWER HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE 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.
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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:
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Title:
--------------------------------------
Address:
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Facsimile No.:
---------------------------------
Attention:
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000
XXXX XX XXXXXXX NATIONAL TRUST AND SAVINGS
ASSOCIATION, as Agent
By:
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Title: Vice President
Address: 000 Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Facsimile No.:
---------------------------------
Attention:
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000
XXXX XX XXXXXXX XXXXXXXX, as lender
By:
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Title: Vice President
Address: 000 Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Facsimile No.:
---------------------------------
Attention:
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