EXHIBIT 10.43
SECOND AMENDED AND RESTATED CREDIT AGREEMENT
DATED AS OF JUNE 17, 2003
AMONG
TESORO PETROLEUM CORPORATION,
AS BORROWER
THE FINANCIAL INSTITUTIONS FROM TIME TO TIME PARTIES HERETO,
AS LENDERS
XXXXXXX XXXXX CREDIT PARTNERS L.P.,
AS SYNDICATION AGENT
BANK OF AMERICA, N.A.
AND
FLEET CAPITAL CORPORATION,
AS CO-DOCUMENTATION AGENTS
BANK OF AMERICA, N.A.,
AS COLLATERAL AGENT
AND
BANK ONE, NA (MAIN OFFICE CHICAGO),
AS ADMINISTRATIVE AGENT
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BANC ONE CAPITAL MARKETS, INC.,
AS SOLE LEAD ARRANGER AND SOLE BOOK RUNNER
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SIDLEY XXXXXX XXXXX & XXXX
Bank One Plaza
00 Xxxxx Xxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
TABLE OF CONTENTS
ARTICLE I DEFINITIONS............................................................................ 1
1.1. Certain Defined Terms...................................................................... 1
1.2. Plural Forms............................................................................... 28
ARTICLE II THE CREDITS............................................................................ 28
2.1. Commitments; Loans......................................................................... 28
2.2. Required Payments; Termination............................................................. 30
2.3. Ratable Loans; Types of Advances........................................................... 32
2.4. Commitment Fee; Aggregate Revolving Loan Commitment........................................ 32
2.5. Minimum Amount of Each Advance............................................................. 33
2.6. Optional Principal Payments................................................................ 33
2.7. Method of Selecting Types and Interest Periods for New Advances............................ 34
2.8. Conversion and Continuation of Outstanding Advances; No Conversion or
Continuation of Eurodollar Advances After Default.......................................... 34
2.9. Changes in Interest Rate, etc.............................................................. 35
2.10. Rates Applicable After Default............................................................. 35
2.11. Method of Payment; Settlement.............................................................. 35
2.12. Noteless Agreement; Evidence of Indebtedness............................................... 38
2.13. Telephonic Notices......................................................................... 39
2.14. Payments of Interest....................................................................... 39
2.15. Notification of Advances, Interest Rates, Prepayments and Revolving
Loan Commitment Reductions; Availability of Loans.......................................... 41
2.16. Lending Installations...................................................................... 41
2.17. Non-Receipt of Funds by the Agent.......................................................... 41
2.18. Replacement of Lender...................................................................... 42
2.19. Facility LCs............................................................................... 42
2.20. Increase of Aggregate Revolving Loan Commitment............................................ 47
ARTICLE III YIELD PROTECTION; TAXES................................................................ 48
3.1. Yield Protection........................................................................... 48
3.2. Changes in Capital Adequacy Regulations.................................................... 49
3.3. Availability of Types of Advances.......................................................... 49
3.4. Funding Indemnification.................................................................... 49
3.5. Taxes...................................................................................... 50
3.6. Lender Statements; Survival of Indemnity................................................... 52
3.7. Alternative Lending Installation........................................................... 52
ARTICLE IV CONDITIONS PRECEDENT................................................................... 52
4.1. Effectiveness of Revolving Loan Commitments................................................ 52
4.2. Each Credit Extension...................................................................... 54
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ARTICLE V REPRESENTATIONS AND WARRANTIES......................................................... 55
5.1. Existence and Standing..................................................................... 55
5.2. Authorization and Validity................................................................. 55
5.3. No Conflict; Government Consent............................................................ 55
5.4. Financial Statements....................................................................... 56
5.5. Material Adverse Change.................................................................... 56
5.6. Taxes...................................................................................... 56
5.7. Litigation and Contingent Obligations...................................................... 56
5.8. Subsidiaries............................................................................... 56
5.9. ERISA...................................................................................... 56
5.10. Accuracy of Information.................................................................... 57
5.11. Regulation U............................................................................... 57
5.12. Material Agreements........................................................................ 57
5.13. Compliance With Laws....................................................................... 57
5.14. Ownership of Properties.................................................................... 57
5.15. Plan Assets; Prohibited Transactions....................................................... 57
5.16. Environmental Matters...................................................................... 57
5.17. Investment Company Act..................................................................... 58
5.18. Public Utility Holding Company Act......................................................... 58
5.19. Insurance.................................................................................. 58
5.20. No Default or Unmatured Default............................................................ 58
5.21. Reportable Transaction..................................................................... 58
ARTICLE VI COVENANTS.............................................................................. 58
6.1. Financial Reporting........................................................................ 58
6.2. Use of Proceeds............................................................................ 61
6.3. Notice of Default.......................................................................... 61
6.4. Conduct of Business........................................................................ 61
6.5. Taxes...................................................................................... 61
6.6. Insurance.................................................................................. 61
6.7. Compliance with Laws....................................................................... 62
6.8. Maintenance of Properties.................................................................. 62
6.9. Inspection; Keeping of Books and Records................................................... 62
6.10. Restricted Payments........................................................................ 63
6.11. Merger..................................................................................... 63
6.12. Sale of Assets............................................................................. 63
6.13. Investments and Acquisitions............................................................... 64
6.14. Indebtedness............................................................................... 65
6.15. Liens; Negative Pledge..................................................................... 66
6.16. Affiliates................................................................................. 69
6.17. Financial Contracts........................................................................ 69
6.18. Subsidiary Covenants....................................................................... 69
6.19. Contingent Obligations..................................................................... 69
6.20. Amendments to Agreements................................................................... 69
6.21. Fixed Charge Coverage Ratio................................................................ 70
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6.22. Minimum Consolidated Tangible Net Worth.................................................... 70
6.23. Subsidiary Collateral Documents; Subsidiary Guarantors..................................... 70
6.24. Insurance and Condemnation Proceeds........................................................ 71
6.25. Collection Accounts........................................................................ 71
6.26. Subordinated Indebtedness.................................................................. 72
6.27. Multiemployer Plans........................................................................ 72
6.28. Consolidated Capital Expenditures.......................................................... 72
6.29. Other Permitted Availability............................................................... 72
ARTICLE VII DEFAULTS............................................................................... 73
ARTICLE VIII ACCELERATION, WAIVERS, AMENDMENTS AND REMEDIES......................................... 75
8.1. Acceleration............................................................................... 75
8.2. Amendments................................................................................. 76
8.3. Preservation of Rights..................................................................... 78
ARTICLE IX GENERAL PROVISIONS..................................................................... 78
9.1. Survival of Representations................................................................ 78
9.2. Governmental Regulation.................................................................... 78
9.3. Headings................................................................................... 78
9.4. Entire Agreement........................................................................... 78
9.5. Several Obligations; Benefits of this Agreement............................................ 79
9.6. Expenses; Indemnification.................................................................. 79
9.7. Numbers of Documents....................................................................... 80
9.8. Accounting................................................................................. 80
9.9. Severability of Provisions................................................................. 80
9.10. Nonliability of Lenders.................................................................... 80
9.11. Confidentiality............................................................................ 81
9.12. Lenders Not Utilizing Plan Assets.......................................................... 81
9.13. Nonreliance................................................................................ 81
9.14. Disclosure................................................................................. 81
9.15. Performance of Obligations................................................................. 81
9.16. Syndication Agent, Co-Documentation Agents, Co-Collateral Agents, etc...................... 82
9.17. Subordination of Intercompany Indebtedness................................................. 82
9.18. Certifications Regarding Indentures........................................................ 83
ARTICLE X THE AGENT.............................................................................. 84
10.1. Appointment; Nature of Relationship........................................................ 84
10.2. Powers..................................................................................... 84
10.3. General Immunity........................................................................... 84
10.4. No Responsibility for Loans, Recitals, etc................................................. 85
10.5. Action on Instructions of Lenders.......................................................... 85
10.6. Employment of Agents and Counsel........................................................... 85
10.7. Reliance on Documents; Counsel............................................................. 85
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10.8. Agent's Reimbursement and Indemnification.................................................. 86
10.9. Notice of Default.......................................................................... 86
10.10. Rights as a Lender......................................................................... 86
10.11. Lender Credit Decision..................................................................... 86
10.12. Successor Agent............................................................................ 87
10.13. Agent and Arranger Fees.................................................................... 87
10.14. Delegation to Affiliates................................................................... 87
10.15. Collateral Documents....................................................................... 88
10.16. Intercreditor Agreement.................................................................... 88
ARTICLE XI SETOFF; RATABLE PAYMENTS............................................................... 90
11.1. Setoff..................................................................................... 90
11.2. Ratable Payments........................................................................... 90
11.3. Application of Payments.................................................................... 90
ARTICLE XII BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS...................................... 91
12.1. Successors and Assigns; Designated Lenders................................................. 91
12.2. Participations............................................................................. 93
12.3. Assignments................................................................................ 94
12.4. Dissemination of Information............................................................... 96
12.5. Tax Certifications......................................................................... 96
ARTICLE XIII NOTICES................................................................................ 96
13.1. Notices.................................................................................... 96
13.2. Change of Address.......................................................................... 96
ARTICLE XIV COUNTERPARTS........................................................................... 97
ARTICLE XV CHOICE OF LAW; CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL........................... 97
ARTICLE XVI PRIOR CREDIT AGREEMENT................................................................. 98
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SCHEDULES
Commitment Schedule
Pricing Schedule
Schedule 1.1 - Eligible Carriers
Schedule 2.19.1 - Letters of Credit under Existing Credit Agreement
Schedule 5.8 - Subsidiaries
Schedule 6.13 - Investments
Schedule 6.14 - Indebtedness
Schedule 6.15 - Liens
EXHIBITS
Exhibit A - Form of Borrower's Counsel's Opinion
Exhibit B - Form of Compliance Certificate
Exhibit C - Form of Assignment and Assumption Agreement
Exhibit D - Form of Loan/Credit Related Money Transfer Instruction
Exhibit E-1 - Form of Revolving Note (if requested)
Exhibit E-2 - Form of Term Note (if requested)
Exhibit F - Form of Designation Agreement
Exhibit G - Form of Officer's Certificate
Exhibit H - List of Closing Documents
Exhibit I - Form of Intercreditor Agreement
Exhibit J-1 - Form of Interim Collateral Report
Exhibit J-2 - Form of Monthly Collateral Report
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SECOND AMENDED AND RESTATED CREDIT AGREEMENT
This Second Amended and Restated Credit Agreement, dated as of June 17,
2003, is entered into by and among Tesoro Petroleum Corporation, a Delaware
corporation, the Lenders, the LC Issuers and Bank One, NA, a national banking
association having its principal office in Chicago, Illinois, as Administrative
Agent. The parties hereto agree as follows:
ARTICLE I
DEFINITIONS
1.1. Certain Defined Terms. As used in this Agreement:
"Accounting Changes" is defined in Section 9.8 hereof.
"Account Debtor" means the account debtor or obligor with respect to
any of the Receivables and/or the prospective purchaser with respect to any
contract right, and/or any party who enters into or proposes to enter into any
contract or other arrangement with the Borrower or any Subsidiary.
"Acquisition" means any transaction, or any series of related
transactions, consummated on or after the Closing Date, by which the Borrower or
any of its Subsidiaries (i) acquires any going business or all or substantially
all of the assets of any firm, corporation or limited liability company, or
division thereof, whether through purchase of assets, merger or otherwise or
(ii) directly or indirectly acquires (in one transaction or as the most recent
transaction in a series of transactions) at least a majority (in number of
votes) of the securities of a corporation which have ordinary voting power for
the election of directors (other than securities having such power only by
reason of the happening of a contingency) or a majority (by percentage of voting
power) of the outstanding ownership interests of a partnership or limited
liability company of any Person.
"Advance" means a borrowing hereunder consisting of the aggregate
amount of several Loans (i) made by some or all of the Lenders on the same
Borrowing Date, or (ii) converted or continued by the Lenders on the same date
of conversion or continuation, consisting, in either case, of the aggregate
amount of the several Loans of the same Type and, in the case of Eurodollar
Loans, for the same Interest Period. The term "Advance" shall, unless otherwise
indicated, include Non-Ratable Loans and Collateral Protection Advances.
"Affiliate" of any Person means any other Person directly or indirectly
controlling, controlled by or under common control with such Person. A Person
shall be deemed to control another Person if the controlling Person is the
"beneficial owner" (as defined in Rule 13d-3 under the Securities Exchange Act
of 1934) of 10% or more of any class of voting securities (or other ownership
interests) of the controlled Person or possesses, directly or indirectly, the
power to direct or cause the direction of the management or policies of the
controlled Person, whether through ownership of voting securities, by contract
or otherwise.
"Agent" means Bank One in its capacity as contractual representative of
the Lenders pursuant to Article X, and not in its individual capacity as a
Lender, as Administrative Agent, and any successor Agent appointed pursuant to
Article X.
"Aggregate Outstanding Credit Exposure" means, at any time, the
aggregate of the Outstanding Credit Exposure of all the Lenders.
"Aggregate Outstanding Revolving Loan Credit Exposure" means, at any
time, the aggregate of the Outstanding Revolving Loan Credit Exposures of all
the Lenders.
"Aggregate Revolving Loan Commitment" means the aggregate of the
Revolving Loan Commitments of all the Lenders, as increased or reduced from time
to time pursuant to the terms hereof. The initial Aggregate Revolving Loan
Commitment is Five Hundred Million and 00/100 Dollars ($500,000,000).
"Agreement" means this Amended and Restated Credit Agreement, as it may
be amended, restated, supplemented or otherwise modified and as in effect from
time to time.
"Agreement Accounting Principles" means US GAAP, applied in a manner
consistent with that used in preparing the financial statements of the Borrower
referred to in Section 5.4; provided, however, that except as provided in
Section 9.8, with respect to the calculation of the financial covenants set
forth in Sections 6.21 and 6.22 (and the defined terms used in such Sections),
"Agreement Accounting Principles" means US GAAP as in effect in the United
States as of the Closing Date, applied in a manner consistent with that used in
preparing the financial statements of the Borrower referred to in Section 5.4
hereof.
"Alternate Base Rate" means, for any day, a fluctuating rate of
interest per annum equal to the higher of (i) the Prime Rate for such day and
(ii) the sum of (a) the Federal Funds Effective Rate for such day and (b)
one-half of one percent (0.5%) per annum.
"Applicable Fee Rate" means, with respect to the Commitment Fee at any
time, the percentage rate per annum which is applicable at such time with
respect to such fee as set forth in the Pricing Schedule.
"Applicable Margin" means, with respect to Advances of any Type at any
time, the percentage rate per annum which is applicable at such time with
respect to Advances of such Type consisting of Revolving Loans or Term Loans, as
applicable, as set forth in the Pricing Schedule.
"Approved Fund" means any Fund that is administered or managed by (a) a
Lender, (b) an Affiliate of a Lender or (c) an entity or an Affiliate of an
entity that administers or manages a Lender.
"Arranger" means Banc One Capital Markets, Inc., a Delaware
corporation, and its successors, in its capacity as Sole Lead Arranger and Sole
Book Runner.
"Article" means an article of this Agreement unless another document is
specifically referenced.
"Assignment Agreement" is defined in Section 12.3.1.
2
"Authorized Officer" means any of the chief executive officer,
president, chief operating officer, chief financial officer, treasurer, vice
president-finance or vice president-controller of the Borrower, acting singly.
"Available Aggregate Revolving Loan Commitment" means, at any time, the
lesser of (i) the Aggregate Revolving Loan Commitment and (ii) the Borrowing
Base then in effect, minus the Aggregate Outstanding Revolving Loan Credit
Exposure at such time.
"Bank One" means Bank One, NA, a national banking association having
its principal office in Chicago, Illinois, in its individual capacity, and its
successors.
"Bank Products" means, with respect to any Lender, any of the following
services provided to the Borrower or an Affiliate thereof by any Lender or the
Agent: (i) Rate Management Transactions, (ii) commercial credit card services,
(iii) cash management and other treasury management services (including, without
limitation, controlled disbursements, automated clearinghouse transactions,
return items, and interstate depository network services), and (iv) foreign
exchange related services.
"Borrower" means Tesoro Petroleum Corporation, a Delaware corporation,
and its permitted successors and assigns (including, without limitation, a
debtor in possession on its behalf).
"Borrowing Base" means, as of any date of calculation, an amount equal
to the lesser of (x) the Aggregate Revolving Loan Commitment plus the aggregate
outstanding principal amount of the Term Loans, and (y) as set forth on the most
current Interim Collateral Report or Monthly Collateral Report, as applicable,
delivered to the Agent, the aggregate of (i) 100% of Perfected Cash Interests,
plus (ii) eighty-five percent (85%) of the Gross Amount of Eligible Receivables,
plus (iii) seventy-five percent (75%) of the Gross Amount of Eligible Petroleum
Inventory, minus (iv) the Rental Reserve, minus (v) the Standard Reserve, and
minus (vi) such reserves as the Agent may from time to time reasonably deem
appropriate; provided, however, that the Agent, upon the occurrence and during
the continuance of a Default, may, in its reasonable discretion and without the
Borrower's consent, decrease the foregoing percentages.
"Borrowing Date" means a date on which an Advance is made hereunder.
"Borrowing Notice" is defined in Section 2.7.
"Business Activity Report" means (A) a Notice of Business Activities
Report filed with the State of Minnesota, Department of Revenue or (B) any
similar report required by any other State relating to the ability of the
Borrower or any Subsidiary Guarantor to enforce its Receivables claims against
Account Debtors located in any such state.
"Business Day" means (i) with respect to any borrowing, payment or rate
selection of Eurodollar Advances, a day (other than a Saturday or Sunday) on
which banks generally are open in Chicago, Illinois and New York, New York for
the conduct of substantially all of their commercial lending activities,
interbank wire transfers can be made on the Fedwire system and dealings in
Dollars are carried on in the London interbank market and (ii) for all other
purposes, a day (other than a Saturday or Sunday) on which banks generally are
open in Chicago, Illinois and New York, New York for the conduct of
3
substantially all of their commercial lending activities and interbank wire
transfers can be made on the Fedwire system.
"Capitalized Lease" of a Person means any lease of Property by such
Person as lessee which would be capitalized on a balance sheet of such Person
prepared in accordance with Agreement Accounting Principles.
"Capitalized Lease Obligations" of a Person means the amount of the
obligations of such Person under Capitalized Leases which would be shown as a
liability on a balance sheet of such Person prepared in accordance with
Agreement Accounting Principles.
"Cash Equivalent Investments" means (i) short-term obligations of, or
fully guaranteed by, the United States of America, (ii) commercial paper rated
A-1 or better by S&P or P-1 or better by Xxxxx'x, (iii) demand deposit accounts
maintained in the ordinary course of business, and (iv) certificates of deposit
issued by and time deposits with commercial banks (whether domestic or foreign)
having capital and surplus in excess of $100,000,000; provided in each case that
the same provides for payment of both principal and interest (and not principal
alone or interest alone) and is not subject to any contingency regarding the
payment of principal or interest.
"Change in Control" means the occurrence of any of the following
events: (i) there shall be consummated (A) any consolidation or merger of the
Borrower in which the Borrower is not the continuing or surviving corporation or
pursuant to which shares of the Borrower's common stock would be converted into
cash, securities or other property, other than a merger of the Borrower where a
majority of the Board of Directors of the surviving corporation are, and for a
two year period after the merger continue to be, persons who were directors of
the Borrower immediately prior to such merger or were elected as directors, or
nominated for election as directors, by a vote of at least two-thirds of the
directors then still in office who were directors of the Borrower immediately
prior to such merger, or (B) any sale, lease, exchange or transfer (in one
transaction or a series of transactions) of all or substantially all of the
assets of the Borrower, unless, immediately following such sale, lease, exchange
or transfer, such assets are owned, directly or indirectly, by the Borrower or
one or more Subsidiaries of the Borrower; (ii) the shareholders of the Borrower
shall approve any plan or proposal for the liquidation or dissolution of the
Borrower; (iii) (A) any "person" as defined in the Securities Exchange Act of
1934 (the "Exchange Act"), other than the Borrower or a Subsidiary or any
employee benefit plan sponsored by the Borrower or a Subsidiary, shall become
the beneficial owner (within the meaning of Rule 13d-3 under the Exchange Act)
of securities of the Borrower representing 50% or more of the combined voting
power of the Borrower's then outstanding securities ordinarily (and apart from
rights accruing in special circumstances) having the right to vote in the
election of directors, as a result of a tender or exchange offer, open market
purchases, privately negotiated purchases or otherwise, and (B) at any time
during a period of two consecutive years thereafter, individuals who immediately
prior to the beginning of such period constituted the Board of Directors of the
Borrower shall cease for any reason to constitute at least a majority thereof,
unless the election or the nomination by the Board of Directors for election by
the Borrower's shareholders of each new director during such period was approved
by a vote of at least two-thirds of the directors then still in office who were
directors at the beginning of such
4
period; or (iv) a "Change of Control" or like event under any agreement,
document or instrument evidencing Material Indebtedness.
"Closing Date" means June 17, 2003.
"Co-Agent" means each Co-Collateral Agent and each Documentation Agent.
"Co-Collateral Agent" means each of Bank One and Bank of America, N.A.,
in each case together with its successors and assigns.
"Code" means the Internal Revenue Code of 1986, as amended, reformed or
otherwise modified from time to time, and any rule or regulation issued
thereunder.
"Collateral" means all property and interests in property now owned or
hereafter acquired by the Borrower or any of its Subsidiary Guarantors in or
upon which a security interest or lien is granted to the Agent, for the benefit
of the Holders of Secured Obligations, or to the Agent, for the benefit of the
Lenders, whether under the Security Agreement, under any of the other Collateral
Documents or under any of the other Loan Documents.
"Collateral Documents" means all agreements, instruments and documents
executed in connection with this Agreement that are intended to create or
evidence Liens to secure the Secured Obligations, including, without limitation,
the Security Agreement and all other security agreements, loan agreements,
notes, guarantees, subordination agreements, pledges, powers of attorney,
consents, assignments, contracts, fee letters, notices, leases, financing
statements and all other written matter whether heretofore, now, or hereafter
executed by or on behalf of the Borrower or any of its Subsidiary Guarantors and
delivered to the Agent or any of the Lenders, together with all agreements and
documents referred to therein or contemplated thereby.
"Collateral Protection Advance" is defined in Section 2.1.2.
"Collateral Shortfall Amount" is defined in Section 8.1.
"Collection Account" is defined in Section 6.25.
"Commitment Fee" is defined in Section 2.4.1.
"Commitment Schedule" means the Schedule identifying each Lender's
Revolving Loan Commitment as of the Closing Date and the principal amount of
Term Loans held by each Lender, if any, as of the Closing Date, as attached
hereto and identified as such.
"Consolidated Capital Expenditures" means, for any period, with respect
to the Borrower and its Subsidiaries, the aggregate of all expenditures by the
Borrower and its Subsidiaries for the acquisition or leasing (pursuant to a
Capitalized Lease) of fixed or capital assets or additions to equipment
(including replacements, capitalized repairs, and improvements during such
period) which are capitalized under Agreement Accounting Principles on the
Borrower's or any Subsidiary's balance sheet.
5
"Consolidated EBITDA" means Consolidated Net Income plus, to the extent
deducted from revenues in determining Consolidated Net Income, (i) Consolidated
Interest Expense, (ii) income and franchise tax expense, (iii) depreciation,
(iv) amortization and (v) any other non-cash charges, minus, to the extent
included in Consolidated Net Income, (i) interest income (except to the extent
deducted in determining Consolidated Interest Expense) and (ii) any other
non-cash income, all reported for the Borrower and its Subsidiaries on a
consolidated basis.
"Consolidated Interest Expense" means, with reference to any period,
the accrued interest expense of the Borrower and its Subsidiaries reported on a
consolidated basis for such period, including, without limitation, yield or any
other financing costs resembling interest which are payable under any
Receivables Purchase Facility.
"Consolidated Net Income" means, with reference to any period, the
consolidated net earnings (or loss) of the Borrower and its Subsidiaries
reported for such period.
"Consolidated Tangible Net Worth" means at any time, with respect to
any Person, the consolidated total stockholders' equity of such Person and its
Subsidiaries reported on a consolidated basis in accordance with Agreement
Accounting Principles and as reported in such Person's most recent Form 10-K or
Form 10-Q filing, as applicable, with the U.S. Securities and Exchange
Commission, minus at all times all items that are reported in such Form 10-K or
Form 10-Q filing, as applicable, as "acquired intangibles net" and "goodwill."
"Contingent Obligation" of a Person means any agreement, undertaking or
arrangement by which such Person assumes, guarantees, endorses, contingently
agrees to purchase or provide funds for the payment of, or otherwise becomes or
is contingently liable upon, the obligation or liability of any other Person, or
agrees to maintain the net worth or working capital or other financial condition
of any other Person, or otherwise assures any creditor of such other Person
against loss; provided, however, that amounts held or allocated as reserves for
obligations arising under or in connection with (i) any Plan or other pension
fund related item, (ii) litigation, judgments and legal proceedings, and (iii)
compliance with Environmental Laws, including, without limitation, the
remediation of any environmental related issues with respect to its Property,
shall not constitute "Contingent Obligations."
"Continuing Director" means, with respect to any Person as of any date
of determination, any member of the board of directors of such Person who (i)
was a member of such board of directors on the Closing Date, or (ii) was
nominated for election or elected to such board of directors with the approval
of the required majority of the Continuing Directors who were members of such
board at the time of such nomination or election; provided that any individual
who is so elected or nominated in connection with a merger, consolidation,
acquisition or similar transaction shall not be a Continuing Director unless
such individual was a Continuing Director prior thereto.
"Controlled Group" means all members of a controlled group of
corporations or other business entities and all trades or businesses (whether or
not incorporated) under common control which, together with the Borrower or any
of its Subsidiaries, are treated as a single employer under Section 414 of the
Code.
6
"Conversion/Continuation Notice" is defined in Section 2.8.
"Credit Extension" means the making of an Advance or the issuance of a
Facility LC hereunder.
"Credit Extension Date" means the Borrowing Date for an Advance or the
issuance date for a Facility LC.
"Current Petroleum Inventory Market Price" means, with respect to any
Petroleum Inventory, the market price for such Petroleum Inventory as set forth
in a published or reported price index maintained by a third-party that is not
an Affiliate of the Borrower and that prepares such index in the ordinary course
of its business or such other price as the Agent may ascribe thereto in its
reasonable credit judgment. Current Petroleum Inventory Market Price shall be
determined using published or reported price indices created or distributed by
Oil Price Information Service, commonly known as OPIS, and/or Platts Oilgram
Price Report, commonly known as Platts. In the event OPIS or Platts no longer
provides the aforementioned price indices, or in the event the Borrower and the
Agent determine that either OPIS or Platts no longer accurately provides pricing
information for Petroleum Inventory, the Borrower and the Agent shall replace
one or both of the OPIS and Platts price indices, as applicable, with other
third-party price indices reasonably acceptable to each of the Borrower and the
Agent.
"Default" means an event described in Article VII.
"Designated Lender" means, with respect to each Designating Lender,
each Eligible Designee designated by such Designating Lender pursuant to Section
12.1.2.
"Designating Lender" means, with respect to each Designated Lender, the
Lender that designated such Designated Lender pursuant to Section 12.1.2.
"Designation Agreement" is defined in Section 12.1.2.
"Documentation Agent" means each of Bank of America, N.A. and Fleet
Capital Corporation, in each case together with its successors and assigns.
"Dollar", "dollar" and "$" means the lawful currency of the United
States of America.
"Eligible Carrier" means any of the carriers and pipeline companies
listed or described in Schedule 1.1 to this Agreement, as such Schedule 1.1 may
be revised by the Borrower from time to time with the consent of the Agent, such
consent not to be unreasonably withheld.
"Eligible Designee" means a special purpose corporation, partnership,
trust, limited partnership or limited liability company that is administered by
the respective Designating Lender or an Affiliate of such Designating Lender and
(i) is organized under the laws of the United States of America or any state
thereof, (ii) is engaged primarily in making, purchasing or otherwise investing
in commercial loans in the ordinary course of its business and (iii) issues (or
the parent of which issues) commercial paper rated at least A-1 or the
equivalent thereof by S&P or P-1 or the equivalent thereof by Xxxxx'x.
7
"Eligible Petroleum Inventory" means Petroleum Inventory of the
Borrower and the Subsidiary Guarantors which is held for sale or lease in the
ordinary course of business or furnished under any contract of service by the
Borrower or such Subsidiary Guarantors in the ordinary course of business which
is at all times and shall continue to meet standards of eligibility from time to
time established in accordance with this Agreement. Initially, standards of
eligibility will be established by the Agent in its reasonable credit judgment
(which credit judgment shall be exercised in a manner that is not arbitrary or
capricious) and may be revised from time to time by the Agent in its reasonable
credit judgment (which credit judgment shall be exercised in a manner that is
not arbitrary or capricious). In general, without limiting the foregoing, the
following Petroleum Inventory includes as Eligible Petroleum Inventory:
(a) (i) Petroleum Inventory that is subject to a valid, first
priority perfected lien and security interest in favor of the Agent on behalf of
the Holders of Secured Obligations or (ii) Petroleum Inventory that has been
delivered to an Eligible Carrier subject to a valid, first priority perfected
lien and security interest in favor of the Agent on behalf of the Holders of
Secured Obligations with UCC financing statements (or any other applicable form)
perfecting or continuing the perfection of the security interest of the Agent on
behalf of the Holders of Secured Obligations in such Petroleum Inventory having
been duly filed where necessary and either (x) no document of title is issued
with respect to such Petroleum Inventory by such Eligible Carrier, or (y) if a
document of title is issued with respect to such Petroleum Inventory by such
Eligible Carrier, the original of such document of title is delivered to the
Agent or its designated bailee or agent,
(b) Petroleum Inventory that is in good saleable condition, is not
deteriorating in quality and is not obsolete, and is of a quality which (in
locations where sold by the Borrower) is marketable at prevailing market prices
for such products and meets all applicable governmental regulations and
standards at the place of intended sale,
(c) Petroleum Inventory that is owned by the Borrower or its
Subsidiaries (provided all documentation necessary to provide the Agent with a
first priority, perfected Lien thereon shall be in full force and effect) or, in
the case of Petroleum Inventory described in clause (ii) of paragraph (a) above,
the Borrower has the absolute and unconditional right to obtain such Petroleum
Inventory or Petroleum Inventory equivalent to such Petroleum Inventory from an
Eligible Carrier, in each case, free and clear of any and all Liens whatsoever,
other than those (1) in favor of the Agent on behalf of the Holders of Secured
Obligations created pursuant to the Collateral Documents and (2) those in favor
of an Eligible Carrier that arise under applicable law and for which appropriate
amounts have been allocated under the Rental Reserve,
(d) Petroleum Inventory that is (1) located at a location owned by
the Borrower or a Subsidiary Guarantor, (2) delivered to an Eligible Carrier
under an arrangement described in clause (ii) of paragraph (a) above, or (3)
located at a location leased by the Borrower or a Subsidiary Guarantor so long
as such location is either subject to a Third Party Agreement or such location
is subject to the Rental Reserve; provided, however, that no Rental Reserve
shall be applied to and no Third Party Agreement shall be required with respect
to any property described in this clause (d)(3) during the first ninety (90)
days after the Closing Date,
8
(e) Petroleum Inventory that is not commingled with Petroleum
Inventory of any Person other than the Borrower and/or its Subsidiaries or has
been delivered to an Eligible Carrier under an arrangement described in clause
(ii) of paragraph (a) above,
(f) Petroleum Inventory that is in full conformity with the
representations and warranties made by the Borrower or a Subsidiary Guarantor to
the Agent with respect thereto whether contained in this Agreement or the
Security Agreement, and
(g) To the extent Petroleum Inventory is in transit on the high
seas to or from a non-Affiliate, (1) it does not constitute a Receivable, (2) if
purchased with a Letter of Credit, a copy of such Letter of Credit has been
delivered to the Agent, (3) it is covered by insurance in form and substance
acceptable to the Agent, and (4) all applicable documents of title have been
delivered to the Agent; provided, however, that with respect to the high seas
Petroleum Inventory described in this clause (g), the amount of such high seas
Petroleum Inventory on any date of determination in excess of 15% of the
aggregate amount of all Petroleum Inventory then owned by the Borrower and its
Subsidiary Guarantors on such date of determination shall not constitute
Eligible Petroleum Inventory.
Notwithstanding anything to the contrary set forth in this Agreement or any
other Loan Document, no Petroleum Inventory located, stored or maintained at any
retail service station or in a railroad car, or otherwise in transit upon a
railway system, shall constitute Eligible Petroleum Inventory.
"Eligible Receivables" means Receivables created by the Borrower or any
Subsidiary Guarantor, in each case in the ordinary course of its business
arising out of the sale of goods or rendition of services by the Borrower or
such Subsidiary Guarantor, which Receivables are and at all times shall continue
to meet standards of eligibility from time to time reasonably established in
accordance with this Agreement. Initially, standards of eligibility will be
established by the Agent in its reasonable credit judgment (which credit
judgment shall be exercised in a manner that is not arbitrary or capricious) and
may be revised from time to time by the Agent in its reasonable credit judgment
(which credit judgment shall be exercised in a manner that is not arbitrary or
capricious). In general, without limiting the foregoing, the following
Receivables are not Eligible Receivables:
(a) Receivables which remain unpaid sixty (60) days after the date
on which payment was due or ninety (90) days after the date of the original
applicable invoice;
(b) Receivables on any date of determination which are owing by an
Account Debtor and its Affiliates to the extent that the aggregate amount of
Receivables owing by such Account Debtor and its Affiliates to the Borrower or
any Subsidiary Guarantor exceeds 15% times the aggregate amount of all Eligible
Receivables on such date;
(c) all Receivables owing by a single Account Debtor (including
Receivables which remain unpaid fewer than sixty (60) days after the date on
which payment was due or ninety (90) days after the date of the original
applicable invoice) if fifty percent (50%) of the aggregate balance owing by
such Account Debtor, calculated without taking into account any credit balances
of such Account Debtor, remains unpaid ninety (90) days after the date of the
original
9
applicable invoice or has otherwise become, or has been determined by the Agent
to be ineligible in accordance with the provisions of this definition;
(d) Receivables with respect to which the Account Debtor is a
director, officer, employee, Subsidiary or Affiliate of the Borrower or any
Subsidiary thereof;
(e) (i) Receivables with respect to which the Account Debtor is
the United States of America, any federal, state, local or other political
subdivision thereof or any department, agency or instrumentality of any of the
foregoing, unless the Borrower or applicable Subsidiary Guarantor has complied
with the provisions of the Federal Assignment of Claims Act or other applicable
statutes, including executing and delivering to the Agent all statements of
assignment and/or notification which are in form and substance acceptable to the
Agent and which are deemed necessary by the Agent to effectuate the assignment
of such Receivables to the Agent for the benefit of the Holders of Secured
Obligations; and (ii) Receivables with respect to which the Account Debtor is a
foreign government, any federal, state, local or other political subdivision
thereof, or any department, agency, or instrumentality of any of the foregoing
described in this clause (ii);
(f) Receivables not denominated in Dollars;
(g) Receivables with respect to which the Account Debtor is not a
resident of the United States (which shall not be deemed to include any
territories of the United States) or Canada unless (i) the Account Debtor has
supplied the Borrower or applicable Subsidiary Guarantor with an irrevocable
letter of credit (which letter of credit shall be delivered to the Agent and
shall be in form and substance acceptable to the Agent), or (ii) the full
payment of such Receivable shall have been insured by the Borrower or applicable
Subsidiary Guarantor pursuant to an insurance policy in form and substance
acceptable to the Agent issued by a financial institution satisfactory to the
Agent, which policy names the Agent as the loss payee or beneficiary thereof;
(h) Receivables that are subject to any dispute, contra-account,
defense, offset or counterclaim, volume rebate or advertising or other
allowance; provided that if any portion of any such Receivables is not subject
to any dispute, contra-account, defense, offset, counterclaim, volume rebate or
advertising or other allowance and the payment of such portion is not being
withheld or delayed or otherwise affected in any manner due to the portion that
is subject to such dispute, contra-account, defense, offset, counterclaim,
volume rebate or advertising or other allowance, then such portion which is not
subject to any dispute, contra-account, defense, offset, counterclaim, volume
rebate or advertising or other allowance shall not be excluded from Eligible
Receivables because of this clause (h); provided, further, that the portion of a
contra-account that arises from a claim against the Borrower or a Subsidiary
Guarantor that is supported by a letter of credit issued on behalf of the
Borrower or a Subsidiary Guarantor in favor of a customer as payment for goods
or services shall not be excluded from Eligible Receivables because of this
clause (h);
(i) Receivables with respect to which the Account Debtor is the
subject of a bankruptcy or similar insolvency proceeding or has made an
assignment for the benefit of creditors or whose assets have been conveyed to a
receiver, trustee or assignee for the benefit of creditors;
10
(j) Receivables with respect to which the Account Debtor's
obligation to pay the Receivable is conditional upon the Account Debtor's
approval or is otherwise subject to any repurchase obligation or return right,
as with sales made on a xxxx-and-hold, guaranteed sale, sale-and-return, sale on
approval (except with respect to Receivables in connection with which Account
Debtors are entitled to return Petroleum Inventory on the basis of the quality
of such Petroleum Inventory) or consignment basis, or where such Receivables
represent progress xxxxxxxx;
(k) Receivables with respect to which the Account Debtor is
located in Minnesota (or any other jurisdiction which adopts a statute or other
requirement with respect to which any Person that obtains business from within
such jurisdiction or is otherwise subject to such jurisdiction's tax law
requiring such Person to file a Business Activity Report or make any other
required filings in a timely manner in order to enforce its claims in such
jurisdiction's courts or arising under such jurisdiction's laws); provided,
however, such Receivables shall nonetheless be eligible if the Borrower or
applicable Subsidiary Guarantor has filed a Business Activity Report (or other
applicable report) with the applicable state office, or is qualified to do
business in such jurisdiction and, at the time the Receivable was created, was
qualified to do business in such jurisdiction, or had on file with the
applicable state office a current Business Activity Report (or other applicable
report), or is exempt from such filing requirement;
(l) Receivables with respect to which the Account Debtor's
obligation does not constitute its legal, valid and binding obligation,
enforceable against it in accordance with its terms;
(m) Receivables with respect to which the Borrower or applicable
Subsidiary Guarantor has not yet shipped the applicable goods or performed the
applicable service;
(n) any Receivable which is not in conformity with the
representations and warranties made by the Borrower or the applicable Subsidiary
Guarantors to the Agent with respect thereto, whether contained in this
Agreement or the Security Agreement;
(o) Receivables in connection with which the Borrower or
applicable Subsidiary Guarantor (or any other party to such Receivable) is in
default in the performance or observance of any of the terms thereof (other than
payment of such Receivable) in any material respect;
(p) Receivables that are not bona fide existing obligations
created by the sale and actual delivery of inventory, goods or other property or
the furnishing of services of other good and sufficient consideration to
customers of the Borrower or the applicable Subsidiary Guarantors in the
ordinary course of business;
(q) Receivables subject to any Lien or the Petroleum Inventory,
goods, property, services or other consideration of which any such Receivable
constitutes proceeds is subject to any such Lien, in either case other than the
Lien granted to the Agent in connection herewith for the benefit of the Holders
of Secured Obligations;
(r) Receivables that have been classified by the Borrower or any
Subsidiary Guarantor as doubtful or that have otherwise failed to meet
established or customary credit standards of the Borrower or the Subsidiary
Guarantors, to the extent of such write-down;
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(s) Receivables evidenced by a promissory note or other similar
instrument;
(t) Receivables that are subordinate or junior in right or
priority of payment to any other obligation or claim;
(u) Receivables that are consigned or otherwise assigned to any
Person for collection or otherwise; and
(v) Receivables generated by sales on a cash-on-delivery basis.
"Environmental Laws" means any and all federal, state and local
statutes, laws, judicial decisions, regulations, ordinances, rules, judgments,
orders, decrees, plans, injunctions, permits, concessions, grants, franchises,
licenses, agreements and other governmental restrictions relating to (i) the
protection of the environment, (ii) the effect of the environment on human
health, (iii) emissions, discharges or releases of pollutants, contaminants,
hazardous substances or wastes into surface water, ground water or land, or (iv)
the manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of pollutants, contaminants, hazardous substances or
wastes or the clean-up or other remediation thereof.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and any rules or regulations promulgated thereunder.
"Eurodollar Advance" means an Advance which, except as otherwise
provided in Section 2.10, bears interest at the applicable Eurodollar Rate.
"Eurodollar Base Rate" means, with respect to a Eurodollar Advance for
the relevant Interest Period, the applicable British Bankers' Association LIBOR
rate for deposits in Dollars as reported by any generally recognized financial
information service as of 11:00 a.m. (London time) two (2) Business Days prior
to the first day of such Interest Period, and having a maturity equal to such
Interest Period, provided that, if no such British Bankers' Association LIBOR
rate is available to the Agent, the applicable Eurodollar Base Rate for the
relevant Interest Period shall instead be the rate determined by the Agent to be
the rate at which Bank One or one of its affiliate banks offers to place
deposits in Dollars with first-class banks in the London interbank market at
approximately 11:00 a.m. (London time) two (2) Business Days prior to the first
day of such Interest Period, in the approximate amount of Bank One's relevant
Eurodollar Loan and having a maturity equal to such Interest Period.
"Eurodollar Loan" means a Loan which, except as otherwise provided in
Section 2.10, bears interest at the applicable Eurodollar Rate.
"Eurodollar Rate" means, with respect to a Eurodollar Advance for the
relevant Interest Period, the sum of (i) the quotient of (a) the Eurodollar Base
Rate applicable to such Interest Period, divided by (b) one minus the Reserve
Requirement (expressed as a decimal) applicable to such Interest Period, plus
(ii) the then Applicable Margin, changing as and when the Applicable Margin
changes.
"Excess Availability" means, on any date of determination, the excess
of the Borrowing Base over the Aggregate Outstanding Credit Exposure on such
date.
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"Excluded Subsidiary" means each of Tesoro Indonesia Petroleum Company,
Tesoro Equipment Company, Tesoro Crude Oil Company, Tesoro Gasoline Marketing
Company, Tesoro Pump & Valve Company, Tesoro Environmental Resources Company,
Tesoro Environmental Products Company, Tesoro Latin America Company, Tesoro High
Plains Company, Tesoro South Pacific Petroleum Company, Tesoro Building Project,
L.P., Interior Fuels Company, Coastwide Marine Services, Inc., Tesoro Petroleum
(Singapore) Pte. Ltd., the Pipeline Subsidiaries, and such other Subsidiaries
that the Borrower, with the Agent's prior written consent, may identify to the
Agent and the Lenders from time to time.
"Excluded Taxes" means, in the case of each Lender or applicable
Lending Installation and the Agent, taxes imposed on its overall net income, and
franchise taxes imposed on it, by (i) the jurisdiction under the laws of which
such Lender or the Agent is incorporated or organized or any political
combination or subdivision or taxing authority thereof or (ii) the jurisdiction
in which the Agent's or such Lender's principal executive office or such
Lender's applicable Lending Installation is located.
"Exhibit" refers to an exhibit to this Agreement, unless another
document is specifically referenced.
"Existing Credit Agreement" means the Amended and Restated Credit
Agreement, dated as of May 17, 2002, by and among the Borrower, certain
financial institutions, and Bank One, as Administrative Agent, as amended or
modified from time to time.
"Facility LC" is defined in Section 2.19.1.
"Facility LC Application" is defined in Section 2.19.3.
"Facility LC Collateral Account" is defined in Section 2.19.11.
"Federal Funds Effective Rate" means, for any day, an interest rate per
annum equal to the weighted average of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged by Federal
funds brokers on such day, as published for such day (or, if such day is not a
Business Day, for the immediately preceding Business Day) by the Federal Reserve
Bank of New York, or, if such rate is not so published for any day which is a
Business Day, the average of the quotations at approximately 10:00 a.m. (Chicago
time) on such day on such transactions received by the Agent from three Federal
funds brokers of recognized standing selected by the Agent in its sole
discretion.
"Financing" means, with respect to any Person, (i) the issuance or sale
by such Person of any equity interests in such Person, or (ii) the issuance or
sale by such Person of any Indebtedness other than Indebtedness described in
Sections 6.14.1 through 6.14.5; provided, however, that the foregoing clause
(ii) shall not permit the incurrence by the Borrower or any Subsidiary of any
Indebtedness if such incurrence is not otherwise permitted by this Agreement.
"Fixed Charges" means, for any period of determination, the sum of (i)
Consolidated Interest Expense on a cash basis, and (ii) scheduled cash payments
of the principal amount of Indebtedness, including, without limitation,
scheduled principal payments on the Term Loans;
13
provided, however, that payments of principal owing under or in connection with
the Loans other than the Term Loans shall not be included in any determination
of Fixed Charges.
"Floating Rate" means, for any day, a rate per annum equal to the sum
of (i) the Alternate Base Rate for such day, changing when and as the Alternate
Base Rate changes plus (ii) the then Applicable Margin, changing as and when the
Applicable Margin changes.
"Floating Rate Advance" means an Advance which, except as otherwise
provided in Section 2.10, bears interest at the Floating Rate.
"Floating Rate Loan" means a Revolving Loan which, except as otherwise
provided in Section 2.10, bears interest at the Floating Rate.
"Fund" means any Person (other than a natural person) that is (or will
be) engaged in making, purchasing, holding or otherwise investing in commercial
loans and similar extensions of credit in the ordinary course of its business.
"Gross Amount of Eligible Petroleum Inventory" means Eligible Petroleum
Inventory valued at market value, less (i) the value of reserves which have been
recorded by the Borrower and the Subsidiary Guarantors with respect to obsolete,
slow-moving or excess Petroleum Inventory, and (ii) such other reserves as the
Agent elects to establish in accordance with its reasonable credit judgment
(which credit judgment shall be exercised in a manner that is not arbitrary or
capricious).
"Gross Amount of Eligible Receivables" means the outstanding face
amount of Eligible Receivables, determined in accordance with Agreement
Accounting Principles, consistently applied, less (i) all financing charges,
late fees and other fees that are unearned, (ii) the value of any accrual that
has been recorded by the Borrower and the Subsidiary Guarantors with respect to
downward price adjustments, and (iii) such other reserves as the Agent elects to
establish in accordance with its reasonable credit judgment (which credit
judgment shall be exercised in a manner that is not arbitrary or capricious).
"Guaranty" means the Subsidiary Guaranty, dated as of April 17, 2003,
made by certain Subsidiaries of the Borrower in favor of the Agent for the
benefit of the Holders of Secured Obligations, as the same may be amended,
restated, supplemented or otherwise modified from time to time.
"Highest Lawful Rate" means, at any time, the maximum rate of interest
the Holders of Secured Obligations may lawfully contract for, charge, or receive
in respect of the Secured Obligations as allowed by any applicable law. For
purposes of determining the Highest Lawful Rate under applicable law of the
State of Texas, the applicable rate ceiling shall be (a) the "weekly ceiling"
described in and computed in accordance with the provisions of Section 303.003
of the Texas Finance Code, as amended, or (b) if the parties subsequently
contract as allowed by any applicable law, the "quarterly ceiling" or the
"annualized ceiling" computed pursuant to Section 303.008 of the Texas Finance
Code, as amended; provided, however, that at any time the "weekly ceiling", the
"quarterly ceiling", or the "annualized ceiling" shall be less than eighteen
percent (18.0%) per annum or more than twenty-four percent (24.0%) per annum,
14
the provisions of Section 303.009(a) and Section 300.009(b) of the Texas Finance
Code, as amended, shall control for purposes of such determination, as
applicable.
"Holders of Secured Obligations" means the holders of the Secured
Obligations from time to time and shall refer to (i) each Lender in respect of
its Loans, (ii) each LC Issuer in respect of Reimbursement Obligations, (iii)
the Agent, the Lenders and LC Issuers in respect of all other present and future
obligations and liabilities of the Borrower or any of its Subsidiary Guarantors
of every type and description arising under or in connection with this Agreement
or any other Loan Document, (iv) each Person benefiting from indemnities made by
the Borrower or any Subsidiary Guarantor hereunder or under other Loan Documents
in respect of the obligations and liabilities of the Borrower or such Subsidiary
Guarantor to such Person, (v) each Lender (or affiliate thereof), in respect of
all Rate Management Obligations of the Borrower to such Lender (or such
affiliate) as exchange party or counterparty under any Rate Management
Transaction, and (vi) their respective successors, transferees and assigns.
"Indebtedness" of a Person means, at any time, without duplication,
such Person's (i) obligations for borrowed money, (ii) obligations representing
the deferred purchase price of Property or services (other than current accounts
payable arising in the ordinary course of such Person's business payable on
terms customary in the trade), (iii) obligations, whether or not assumed,
secured by Liens or payable out of the proceeds or production from Property now
or hereafter owned or acquired by such Person, (iv) obligations which are
evidenced by notes, bonds, debentures, acceptances, or other instruments, (v)
obligations to purchase securities or other Property arising out of or in
connection with the sale of the same or substantially similar securities or
Property, (vi) Capitalized Lease Obligations, (vii) Contingent Obligations of
such Person, (viii) reimbursement obligations under Letters of Credit, bankers'
acceptances, surety bonds and similar instruments, (ix) Off-Balance Sheet
Liabilities, (x) obligations under Sale and Leaseback Transactions, (xi) Net
Xxxx-to-Market Exposure under Rate Management Transactions, (xii) all
obligations of such Person, contingent or otherwise, to purchase, redeem, retire
or otherwise acquire for value any capital stock of such Person, (xiii) the
liquidation value of any mandatorily redeemable preferred capital stock of such
Person or its Subsidiaries held by any Person other than such Person and its
wholly-owned Subsidiaries, (xiv) obligations of any partnership or
unincorporated joint venture in which such Person is a general partner or a
joint venturer, but only to the extent to which there is recourse to such Person
for the payment of such obligations, and (xv) any other obligation for borrowed
money which in accordance with Agreement Accounting Principles would be shown as
a liability on the consolidated balance sheet of such Person. Obligations of the
Borrower and its Subsidiaries to pay dues to Marine Spill Response Corporation
in an aggregate amount of up to $7,000,000 shall not be deemed to constitute
Indebtedness.
"Intercreditor Agreement" means, collectively, (x) Article XI of the
Senior Note Indenture and Article X of the Senior Term Loan Agreement, attached
hereto as Exhibit I, as in effect on the Closing Date, and (y) an intercreditor
agreement between the Agent and the Multiparty Collateral Agent, in form and
substance acceptable to each such party, entered into pursuant to Section 11.01
of the Senior Note Indenture and Section 10.01 of the Senior Term Loan
Agreement.
15
"Interest Period" means, with respect to a Eurodollar Advance, a period
of one, two, three or six months, commencing on a Business Day selected by the
Borrower pursuant to this Agreement. Such Interest Period shall end on but
exclude the day which corresponds numerically to such date one, two, three or
six months thereafter, provided, however, that if there is no such numerically
corresponding day in such next, second, third or sixth succeeding month, such
Interest Period shall end on the last Business Day of such next, second, third
or sixth succeeding month. If an Interest Period would otherwise end on a day
which is not a Business Day, such Interest Period shall end on the next
succeeding Business Day, provided, however, that if said next succeeding
Business Day falls in a new calendar month, such Interest Period shall end on
the immediately preceding Business Day. Notwithstanding the foregoing or
anything to the contrary in any Loan Document, from the Closing Date through the
date on which the Agent confirms to the Borrower that the syndication of the
Loans and Revolving Loan Commitments has been completed (the "Syndication
Period"), each Interest Period for Eurodollar Advances shall equal seven days.
"Interim Collateral Report" means a report, in form and substance
substantially similar to Exhibit J-1 hereto and acceptable to the Agent.
"Investment" of a Person means any loan, advance (other than
commission, travel and similar advances to officers and employees made in the
ordinary course of business), extension of credit (other than accounts
receivable arising in the ordinary course of business on terms customary in the
trade) or contribution of capital by such Person; stocks, bonds, mutual funds,
partnership interests, notes, debentures or other securities owned by such
Person; any deposit accounts and certificates of deposit owned by such Person;
and structured notes, derivative financial instruments and other similar
instruments or contracts owned by such Person.
"LC Fee" is defined in Section 2.19.4.
"LC Issuer" means Bank One (or any subsidiary or affiliate of Bank One
designated by Bank One) or any other Lender, subject to the Agent's prior
written consent (which consent shall not be unreasonably withheld), in its
separate capacity as an issuer of Facility LCs hereunder.
"LC Obligations" means, at any time, the sum, without duplication, of
(i) the aggregate undrawn stated amount under all Facility LCs outstanding at
such time plus (ii) the aggregate unpaid amount at such time of all
Reimbursement Obligations.
"LC Payment Date" is defined in Section 2.19.5.
"Lenders" means the lending institutions listed on the signature pages
of this Agreement or lending institutions parties to Assignment Agreements
delivered pursuant to Section 12.3, in each case together with their respective
successors and assigns. Unless otherwise specified, the term "Lenders" includes
each LC Issuer, the Non-Ratable Lender, and the Agent with respect to Collateral
Protection Advances.
"Lending Installation" means, with respect to a Lender or the Agent,
the office, branch, subsidiary or affiliate of such Lender or the Agent listed
on the signature pages hereof or on the administrative information sheets
provided to the Agent in connection herewith or on a Schedule or otherwise
selected by such Lender or the Agent pursuant to Section 2.16.
16
"Letter of Credit" of a Person means a letter of credit or similar
instrument which is issued upon the application of such Person or upon which
such Person is an account party or for which such Person is in any way liable.
"Lien" means any lien (statutory or other), mortgage, pledge,
hypothecation, assignment, deposit arrangement, encumbrance or preference,
priority or other security agreement or preferential arrangement of any kind or
nature whatsoever (including, without limitation, the interest of a vendor or
lessor under any conditional sale, Capitalized Lease or other title retention
agreement, and, in the case of stock, stockholders agreements, voting trust
agreements and all similar arrangements).
"Loan" means, with respect to a Lender, any loan of such Lender made
pursuant to Article II (or any conversion or continuation thereof), including,
without limitation, Revolving Loans, Term Loans, Collateral Protection Advances
and Non-Ratable Loans.
"Loan Documents" means this Agreement, the Facility LC Applications,
the Collateral Documents, the Guaranty, the Intercreditor Agreement, and all
other documents, instruments, notes (including any Notes issued pursuant to
Section 2.12 (if requested)) and agreements executed in connection herewith or
therewith or contemplated hereby or thereby, as the same may be amended,
restated or otherwise modified and in effect from time to time.
"Marine Services Assets" means the Property of Tesoro Marine Services,
LLC, and the equity interests of each of Tesoro Marine Services Holding Company
and Tesoro Marine Services, LLC, which equity interests are held by the Borrower
as of the Closing Date.
"Material Adverse Effect" means a material adverse effect on (i) the
business, Property, condition (financial or otherwise), operations or results of
operations or prospects of the Borrower and its Subsidiaries taken as a whole,
(ii) the ability of the Borrower or any Subsidiary Guarantor to perform its
obligations under the Loan Documents, or (iii) the validity or enforceability of
the Loan Documents or the rights or remedies of the Agent, the LC Issuers or the
Lenders thereunder or their rights with respect to the Collateral.
"Material Indebtedness" means any Indebtedness in an outstanding
principal amount of $25,000,000 or more in the aggregate (or the equivalent
thereof in any currency other than Dollars).
"Material Indebtedness Agreement" means any agreement under which any
Material Indebtedness was created or is governed or which provides for the
incurrence of Indebtedness in an amount which would constitute Material
Indebtedness (whether or not an amount of Indebtedness constituting Material
Indebtedness is outstanding thereunder).
"Modify" and "Modification" are defined in Section 2.19.1.
"Monthly Collateral Report" means a report, in form and substance
substantially similar to Exhibit J-2 hereto and acceptable to the Agent, which
shall include, among other things, the following additional information:
17
(i) a detailed aged trial balance of each Receivable of the Borrower
and its Subsidiaries in existence as of the date of such report specifying the
name and balance due for the applicable Account Debtor, as reconciled in a
manner reasonably acceptable to the Agent;
(ii) with respect to Petroleum Inventory, a detailed listing of product
type, volume on hand by location, and Current Petroleum Inventory Market Price;
(iii) a spreadsheet which identifies all Eligible Receivables and
Eligible Petroleum Inventory and all non-Eligible Receivables and non-Eligible
Petroleum Inventory; and
(iv) a schedule and aging of the Borrower's and its Subsidiaries'
accounts payable.
"Moody's" means Xxxxx'x Investors Services, Inc. and any successor
thereto.
"Multiemployer Plan" means a multiemployer plan, as defined in Section
4001(a)(3) of ERISA, which is covered by Title IV of ERISA and to which the
Borrower or any member of the Controlled Group is obligated to make
contributions.
"Multiparty Collateral Agent" means Wilmington Trust Company, together
with its successors and permitted assigns, in its capacity as "Collateral Agent"
for the Senior Noteholders and the Senior Term Loan Holders.
"Net Cash Proceeds" means, with respect to any sale of Property or any
Financing by any Person, (a) cash (freely convertible into Dollars) received by
such Person or any Subsidiary of such Person from such sale of Property
(including cash received as consideration for the assumption or incurrence of
liabilities incurred in connection with or in anticipation of such sale of
Property) or Financing, after (i) provision for all income or other taxes
measured by or resulting from such sale of Property, (ii) payment of all
reasonable brokerage commissions and other fees and expenses related to such
sale of Property or Financing, and (iii) all amounts used to repay Indebtedness
secured by a Lien on any asset disposed of in such sale of Property which is or
may be required (by the express terms of the instrument governing such
Indebtedness) to be repaid in connection with such sale of Property (including
payments made to obtain or avoid the need for the consent of any holder of such
Indebtedness) or Financing.
"Net Consolidated Capital Expenditures" means, with respect to any
fiscal quarter, Consolidated Capital Expenditures for such quarter minus Net
Cash Proceeds resulting from Asset Sales during such quarter minus the aggregate
amount of purchase money Indebtedness incurred during such quarter.
"Net Xxxx-to-Market Exposure" of a Person means, as of any date of
determination, the excess (if any) of all unrealized losses over all unrealized
profits of such Person arising from Rate Management Transactions. "Unrealized
losses" means the fair market value of the cost to such Person of replacing such
Rate Management Transaction as of the date of determination (assuming the Rate
Management Transaction were to be terminated as of that date), and "unrealized
profits" means the fair market value of the gain to such Person of replacing
such Rate Management Transaction as of the date of determination (assuming such
Rate Management Transaction were to be terminated as of that date).
18
"Non-Lender Asset Sale Proceeds" means any amount (x) that results from
a sale of the Borrower's or any Subsidiary's Property, (y) that does not
constitute Collateral, and (z) that is not required to be applied in reduction
of the principal amount of outstanding Loans under Section 2.2.2.
"Non-Ratable Lender" means Bank One or such other Lender which may
succeed to Bank One's rights and obligations as Non-Ratable Lender pursuant to
the terms of this Agreement.
"Non-Ratable Loan" has the meaning set forth in Section 2.1.3.
"Non-U.S. Lender" is defined in Section 3.5(iv).
"Note" is defined in Section 2.12.
"Obligations" means all Revolving Loans, all Term Loans, all
Non-Ratable Loans, all Reimbursement Obligations, advances, debts, liabilities,
obligations, covenants and duties owing by the Borrower to the Agent, any
Lender, the Non-Ratable Lender, any LC Issuer, the Arranger, any affiliate of
the Agent, any Lender, the Non-Ratable Lender, any LC Issuer or the Arranger, or
any indemnitee under the provisions of Section 9.6 or any other provisions of
the Loan Documents, in each case of any kind or nature, present or future,
arising under this Agreement or any other Loan Document, whether or not
evidenced by any note, guaranty or other instrument, whether or not for the
payment of money, whether arising by reason of an extension of credit, loan,
foreign exchange risk, guaranty, indemnification, or in any other manner,
whether direct or indirect (including those acquired by assignment), absolute or
contingent, due or to become due, now existing or hereafter arising and however
acquired. The term includes, without limitation, all interest, charges,
expenses, fees, attorneys' fees and disbursements, paralegals' fees (in each
case whether or not allowed), and any other sum chargeable to the Borrower or
any of its Subsidiaries under this Agreement or any other Loan Document.
"Off-Balance Sheet Liability" of a Person means the principal component
of (i) any repurchase obligation or liability of such Person with respect to
Receivables sold by such Person, (ii) any liability under any Sale and Leaseback
Transaction which is not a Capitalized Lease, (iii) any liability under any
so-called "synthetic lease" or "tax ownership operating lease" transaction
entered into by such Person, (iv) any Receivables Purchase Facility, or (v) any
obligation arising with respect to any other transaction which is the functional
equivalent of or takes the place of borrowing but which does not constitute a
liability on the consolidated balance sheets of such Person, but excluding from
this clause (v) all Operating Leases.
"Operating Lease" of a Person means any lease of Property (other than a
Capitalized Lease) by such Person as lessee which has an original term
(including any required renewals and any renewals effective at the option of the
lessor) of one year or more.
"Operating Lease Obligations" means, as of any date of determination,
the amount obtained by aggregating the present values, determined in the case of
each particular Operating Lease by applying a discount rate (which discount rate
shall equal the discount rate which would be applied under Agreement Accounting
Principles if such Operating Lease were a Capitalized Lease) from the date on
which each fixed lease payment is due under such Operating Lease to
19
such date of determination, of all fixed lease payments due under all Operating
Leases of the Borrower and its Subsidiaries.
"Other Senior Secured Debt" means the Senior Term Loans and the Senior
Notes.
"Other Senior Secured Debt Collateral Proceeds" means any amount
constituting the Borrower's or any Subsidiary's Property (including proceeds
thereof) that secures obligations owing by the Borrower or its Subsidiaries to
the Senior Noteholders under the Senior Notes or the Senior Term Loan Holders
under the Senior Term Loan Agreement.
"Other Taxes" is defined in Section 3.5(ii).
"Outstanding Credit Exposure" means, as to any Lender at any time, the
sum of (i) the aggregate principal amount of its Revolving Loans outstanding at
such time (which shall include, without limitation, the amount of its ratable
obligation to purchase participations in (a) the aggregate principal amount of
Non-Ratable Loans outstanding at such time, (b) the LC Obligations at such time,
and (c) Collateral Protection Advances outstanding at such time), and (ii) the
aggregate principal amount of its Term Loans outstanding at such time.
"Outstanding Revolving Loan Credit Exposure" means, as to any Lender at
any time, the sum of (i) the aggregate principal amount of its Revolving Loans
outstanding at such time, plus (ii) an amount equal to its Revolving Loan Pro
Rata Share of the LC Obligations at such time.
"Participants" is defined in Section 12.2.1.
"Payment Date" means April 1st, July 1st, October 1st, and January 1st
of each calendar year, the Revolving Facility Termination Date, and the Term
Loan Termination Date. Each Payment Date other than the Revolving Facility
Termination Date and the Term Loan Termination Date shall relate to the calendar
quarter immediately preceding it. For example, quarterly payments which accrue
in respect of the quarter ending March 31st shall be due and payable on April
1st.
"PBGC" means the Pension Benefit Guaranty Corporation, or any successor
thereto.
"Perfected Cash Interests" means Dollars or Cash Equivalent Investments
on deposit in collection accounts subject to control agreements in form and
substance acceptable to the Agent that grant the Agent first priority perfected
security interests in such accounts and the Dollars and Cash Equivalent
Investments (including proceeds thereof) on deposit or otherwise maintained
therein.
"Permitted Acquisition" is defined in Section 6.13.3.
"Person" means any natural person, corporation, firm, joint venture,
partnership, limited liability company, association, enterprise, trust or other
entity or organization, or any government or political subdivision or any
agency, department or instrumentality thereof.
"Petroleum Inventory" means inventory consisting of crude oil,
petroleum, refined petroleum products, byproducts and intermediate feedstocks,
and other energy-related
20
commodities, including, without limitation, blend components commonly used in
the petroleum industry to improve characteristics of, or meet governmental or
customer specifications for, petroleum or refined petroleum products, all of
which inventory shall be valued at market.
"Pipeline Subsidiaries" means each of Kenai Pipeline Company, Tesoro
Alaska Pipeline Company, Tesoro High Plains Pipeline Company, and each other
Person (i) that does not own Collateral or Property required to be Collateral
hereunder, and (ii) substantially all of the assets of which consist of one or
more pipelines comparable to the ones owned by Kenai Pipe Line Company, Tesoro
Alaska Pipeline Company, and Tesoro High Plains Pipeline Company, in each case
together with their respective permitted successors and assigns, including,
without limitation, debtors in possession on their behalf.
"Plan" means an employee pension benefit plan, excluding any
Multiemployer Plan, which is covered by Title IV of ERISA or subject to the
minimum funding standards under Section 412 of the Code as to which the Borrower
or any member of the Controlled Group, may have any liability.
"Pricing Schedule" means the Schedule identifying the Applicable Margin
and Applicable Fee Rate attached hereto and identified as such.
"Prime Rate" means a rate per annum equal to the prime rate of interest
announced from time to time by Bank One or its parent (which is not necessarily
the lowest rate charged to any customer), changing when and as said prime rate
changes.
"Property" of a Person means any and all property, whether real,
personal, tangible, intangible, or mixed, of such Person, or other assets owned,
leased or operated by such Person.
"Pro Rata Share" means, with respect to a Lender, a portion equal to a
fraction the numerator of which is the sum of such Lender's Revolving Loan
Commitment and the aggregate outstanding principal amount of such Lender's Term
Loans at such time (in each case, as adjusted from time to time in accordance
with the provisions of this Agreement), and the denominator of which is the sum
of the Aggregate Revolving Loan Commitment at such time and the aggregate
outstanding principal amount of all of the Term Loans at such time; provided,
that if the Revolving Loan Commitments have been terminated, "Pro Rata Share"
means a fraction the numerator of which is such Lender's Outstanding Credit
Exposure at such time and the denominator of which is the sum of the Aggregate
Outstanding Credit Exposure at such time.
"Purchase Price" means the total consideration and other amounts
payable in connection with any Acquisition, including, without limitation, any
portion of the consideration payable in cash, all Indebtedness, liabilities and
contingent obligations incurred or assumed in connection with such Acquisition
and all transaction costs and expenses incurred in connection with such
Acquisition, but exclusive of the value of any capital stock or other equity
interests of the Borrower or any Subsidiary issued as consideration for such
Acquisition.
"Purchasers" is defined in Section 12.3.1.
"Rate Management Obligations" of a Person means any and all obligations
of such Person, whether absolute or contingent and howsoever and whensoever
created, arising,
21
evidenced or acquired (including all renewals, extensions and modifications
thereof and substitutions therefor), under (i) any and all Rate Management
Transactions, and (ii) any and all cancellations, buy backs, reversals,
terminations or assignments of any Rate Management Transactions.
"Rate Management Transaction" means any transaction (including an
agreement with respect thereto) now existing or hereafter entered by the
Borrower or a Subsidiary which is a rate swap, basis swap, forward rate
transaction, equity or equity index swap, equity or equity index option, bond
option, interest rate option, foreign exchange transaction, cap transaction,
floor transaction, collar transaction, forward transaction, currency swap
transaction, cross-currency rate swap transaction, currency option or any other
similar transaction (including any option with respect to any of these
transactions) or any combination thereof, whether linked to one or more interest
rates, foreign currencies, or equity prices.
"Receivable(s)" means and includes any and all of the Borrower's and
its Subsidiaries' presently existing and hereafter arising or acquired accounts,
accounts receivable, and all present and future rights of the Borrower and its
Subsidiaries to payment for goods sold or leased or for services rendered
(except those evidenced by instruments or chattel paper), whether or not they
have been earned by performance, and all rights in and to any merchandise or
goods which any of the same may represent, and all rights, title, security and
guaranties with respect to each of the foregoing, including, without limitation,
any right of stoppage in transit.
"Receivables Purchase Documents" means any series of receivables
purchase or sale agreements generally consistent with terms contained in
comparable structured finance transactions pursuant to which the Borrower or any
of its Subsidiaries, in their respective capacities as sellers or transferors of
any Receivables, sell or transfer to SPVs all of their respective right, title
and interest in and to certain Receivables for further sale or transfer (or
granting of Liens to other purchasers of or investors in such assets or
interests therein (and the other documents, instruments and agreements executed
in connection therewith), as any such agreements may be amended, restated,
supplemented or otherwise modified from time to time, or any replacement or
substitution therefor.
"Receivables Purchase Facility" means any securitization facility made
available to the Borrower or any of its Subsidiaries, pursuant to which
Receivables of the Borrower or any of its Subsidiaries are transferred to one or
more SPVs, and thereafter to certain investors, pursuant to the terms and
conditions of the Receivables Purchase Documents.
"Regulation D" means Regulation D of the Board of Governors of the
Federal Reserve System as from time to time in effect and any successor thereto
or other regulation or official interpretation of said Board of Governors
relating to reserve requirements applicable to member banks of the Federal
Reserve System.
"Regulation U" means Regulation U of the Board of Governors of the
Federal Reserve System as from time to time in effect and any successor or other
regulation or official interpretation of said Board of Governors relating to the
extension of credit by banks, non-banks and non-broker lenders for the purpose
of purchasing or carrying margin stocks applicable to member banks of the
Federal Reserve System.
22
"Regulation X" means Regulation X of the Board of Governors of the
Federal Reserve System as from time to time in effect and any successor or other
regulation or official interpretation of said Board of Governors relating to the
extension of credit by foreign lenders for the purpose of purchasing or carrying
margin stock (as defined therein).
"Reimbursement Obligations" means, at any time, the aggregate of all
obligations of the Borrower then outstanding under Section 2.19 to reimburse
each LC Issuer for amounts paid by such LC Issuer in respect of any one or more
drawings under Facility LCs.
"Rental Reserve" means (i) with respect to any Eligible Carrier, such
amount as the Agent in its reasonable credit judgment shall establish from time
to time for such Eligible Carrier and (ii) with respect to any location not
owned by the Borrower or a Subsidiary Guarantor at which Petroleum Inventory is
located, stored, processed, maintained or otherwise held, until such time as
such location is subject to a Third Party Agreement, an amount equal to 1
month's rent for such location.
"Reportable Event" means a reportable event as defined in Section 4043
of ERISA and the regulations issued under such section, with respect to a Plan
subject to Title IV of ERISA, excluding, however, such events as to which the
PBGC has by regulation waived the requirement of Section 4043(a) of ERISA that
it be notified within 30 days of the occurrence of such event, provided,
however, that a failure to meet the minimum funding standard of Section 412 of
the Code and of Section 302 of ERISA shall be a Reportable Event regardless of
the issuance of any such waiver of the notice requirement in accordance with
either Section 4043(a) of ERISA or Section 412(d) of the Code.
"Required Lenders" means Lenders in the aggregate having greater than
50% of the sum of (i) the Aggregate Revolving Loan Commitment and (ii) the
aggregate outstanding principal amount of the Term Loans; provided, that if the
Revolving Loan Commitment has been terminated, "Required Lenders" means Lenders
in the aggregate holding greater than 50% of the Aggregate Outstanding Credit
Exposure.
"Reserve Requirement" means, with respect to an Interest Period, the
maximum aggregate reserve requirement (including all basic, supplemental,
marginal and other reserves) which is imposed under Regulation D on
"Eurocurrency liabilities" (as defined in Regulation D).
"Restricted Payments" is defined in Section 6.10.
"Retail Property" means Property of the Borrower or any Subsidiary
owned in connection with the sale of motor fuels and convenience products and
services to consumers in the retail market.
"Revolver Prepayment Event" is defined in Section 2.2.6.
"Revolving Facility Termination Date" means the earlier of (a) June 30,
2006 and (b) the date of termination in whole of the Aggregate Revolving Loan
Commitment pursuant to Section 2.4 hereof or the Revolving Loan Commitments
pursuant to Section 8.1 hereof.
23
"Revolving Loan" means, with respect to a Lender, such Lender's loan
made pursuant to its commitment to lend set forth in Section 2.1 (and any
conversion or continuation thereof); provided, however, that no Term Loan shall
constitute a Revolving Loan.
"Revolving Loan Commitment" means, for each Lender, including, without
limitation, each LC Issuer, such Lender's obligation to make Revolving Loans to,
and participate in Facility LCs issued upon the application of, the Borrower in
an aggregate amount not exceeding the amount set forth for such Lender on the
Commitment Schedule or in an Assignment Agreement delivered pursuant to Section
12.3, as such amount may be modified from time to time pursuant to the terms
hereof.
"Revolving Loan Pro Rata Share" means, with respect to a Lender, a
portion equal to a fraction the numerator of which is such Lender's Revolving
Loan Commitment at such time and the denominator of which is the Aggregate
Revolving Loan Commitment at such time; provided, however, that if the Revolving
Loan Commitments have been terminated pursuant to the terms of this Agreement,
"Revolving Loan Pro Rata Share" means a portion equal to a fraction the
numerator of which is such Lender's Outstanding Revolving Loan Credit Exposure
at such time and the denominator of which is the Aggregate Outstanding Revolving
Loan Credit Exposure at such time.
"S&P" means Standard and Poor's Ratings Group, a division of The
XxXxxx-Xxxx Companies, Inc., and any successor thereto.
"Sale and Leaseback Transaction" means any sale or other transfer of
Property by any Person with the intent to lease such Property as lessee.
"Schedule" refers to a specific schedule to this Agreement, unless
another document is specifically referenced.
"Section" means a numbered section of this Agreement, unless another
document is specifically referenced.
"Secured Obligations" means, collectively, (i) the Obligations, (ii)
all Rate Management Obligations owing in connection with Rate Management
Transactions to any Lender or any affiliate of any Lender, and (iii) to the
extent not covered in clauses (i) and (ii), amounts owing to any Lender or the
Agent under or in connection with Bank Products provided by such Lender or the
Agent to the Borrower or its Affiliates.
"Security Agreement" means the Security Agreement, dated as of April
17, 2003, by and among the Borrower, certain Subsidiaries thereof and the Agent
for the benefit of the Holders of Secured Obligations, as the same may be
amended, restated, supplemented or otherwise modified from time to time.
"Senior Note Indenture" means the Indenture, dated as of April 17,
2003, by and among the Borrower, certain Subsidiaries of the Borrower, in their
capacities as "Guarantors" thereunder, and the Senior Note Trustee, together
with the agreements, documents and instruments delivered in connection therewith
or issued pursuant thereto, including, without limitation, the Senior Notes and
any guarantees, security documents, mortgages, and collateral
24
agency agreement required thereunder, in each case as the same may be amended,
restated, supplemented or otherwise modified from time to time.
"Senior Note Trustee" means The Bank of New York, together with its
successors and permitted assigns.
"Senior Noteholders" means those Persons that from time to time hold
Senior Notes.
"Senior Notes" means the Indebtedness evidenced by the promissory notes
from time to time issued by the Borrower under the Senior Note Indenture.
"Senior Term Loan Agreement" means the Credit and Guaranty Agreement,
dated as of April 17, 2003, by and among the Borrower, certain Subsidiaries of
the Borrower as "Guarantors", Xxxxxxx Sachs Credit Partners L.P., as sole lead
arranger, sole bookrunner, and syndication agent, and the Senior Term Loan
Agreement Agent, together with the agreements, documents and instruments
delivered in connection therewith or issued pursuant thereto, including, without
limitation, the promissory notes issued thereunder and any guarantees, security
documents, mortgages and collateral agency agreement required thereunder, in
each case as the same may be amended, restated, supplemented or otherwise
modified from time to time.
"Senior Term Loan Agreement Agent" means Xxxxxxx Xxxxx Credit Partners
L.P., together with its successors and permitted assigns.
"Senior Term Loan Holders" means the Persons from time to time party to
the Senior Term Loan Agreement as "Lenders" and the Senior Term Loan Agreement
Agent.
"Senior Term Loans" means the Indebtedness incurred by the Borrower
under the Senior Term Loan Agreement.
"Single Employer Plan" means a Plan maintained by the Borrower or any
member of the Controlled Group for employees of the Borrower or any member of
the Controlled Group.
"Specified Customers" means nine customers of the Borrower and the
Subsidiary Guarantors from time to time identified as "Specified Customers" to
the Agent by the Borrower. The Agent may from time to time request that the
Borrower update or revise, to the Agent's reasonable satisfaction, the list of
"Specified Customers." The Agent agrees that it has received an initial list of
"Specified Customers" as of the Closing Date.
"SPV" means any special purpose entity established for the purpose of
purchasing Receivables in connection with a Receivables securitization
transaction permitted under the terms of this Agreement.
"Standard Reserve" means (a) from the Closing Date through the date on
which the Borrower's financial information for the quarter ending June 30, 2003
is required to be delivered to the Agent under Section 6.1.3, $50,000,000, and
(b) after the date on which the aforementioned financial information for the
quarter ending June 30, 2003 is required to be delivered to the Agent:
25
(i) $50,000,000 at such time the "Fixed Charge Coverage Ratio"
is calculated pursuant to Section 6.21 and equals or exceeds
(A) 0.90 to 1.00 for the fiscal quarter ending June 30, 2003,
with the "Fixed Charge Coverage Ratio" being based upon the
two then most-recently ended fiscal quarters, (B) 0.95 to 1.00
for the fiscal quarter ending September 30, 2003, with the
"Fixed Charge Coverage Ratio" being based upon the three then
most-recently ended fiscal quarters, and (C) 1.00 to 1.00 for
each fiscal quarter thereafter, beginning with the fiscal
quarter ending December 31, 2003, with the "Fixed Charge
Coverage Ratio" being based upon the four then most-recently
ended fiscal quarters; or
(ii) the greater of $50,000,000 and 15% of the then effective
Borrowing Base (as calculated without giving effect to or
including the Standard Reserve, the first purchaser crude
liability reserve and the taxes held in trust/priming lien
reserve and as the amount of such Borrowing Base may change
from time to time upon the delivery of Interim Collateral
Reports or Monthly Collateral Reports) at such time the "Fixed
Charge Coverage Ratio" is calculated pursuant to Section 6.21
and is less than (A) 0.90 to 1.00 for the fiscal quarter
ending June 30, 2003, with the "Fixed Charge Coverage Ratio"
being based upon the two then most-recently ended fiscal
quarters, (B) 0.95 to 1.00 for the fiscal quarter ending
September 30, 2003, with the "Fixed Charge Coverage Ratio"
being based upon the three then most-recently ended fiscal
quarters, and (C) 1.00 to 1.00 for each fiscal quarter
thereafter, beginning with the fiscal quarter ending December
31, 2003, with the "Fixed Charge Coverage Ratio" being based
upon the four then most-recently ended fiscal quarters.
"Subordinated Indebtedness" means any Indebtedness the payment of which
is subordinated to the payment of the Secured Obligations to the written
satisfaction of the Agent and the Lenders.
"Subsidiary" of a Person means (i) any corporation more than 50% of the
outstanding securities having ordinary voting power of which shall at the time
be owned or controlled, directly or indirectly, by such Person or by one or more
of its Subsidiaries or by such Person and one or more of its Subsidiaries, or
(ii) any partnership, limited liability company, association, joint venture or
similar business organization more than 50% of the ownership interests having
ordinary voting power of which shall at the time be so owned or controlled.
Unless otherwise expressly provided, all references herein to a "Subsidiary"
shall mean a Subsidiary of the Borrower and no Excluded Subsidiary shall
constitute a Subsidiary of the Borrower.
"Subsidiary Guarantors" means each of the following Subsidiaries of the
Borrower subject to the Guaranty as of the Closing Date, together with those
other Persons organized under the laws of the United States or a political
subdivision thereof that become subject to the Guaranty in accordance with
Section 6.23 after the Closing Date, in each case together with its permitted
successors and assigns (including, without limitation, a debtor in possession on
its behalf): Tesoro Petroleum Companies, Inc., Tesoro Technology Company,
Digicomp, Inc., Tesoro Aviation Company, Tesoro Financial Services Holding
Company, Victory Finance Company, Tesoro Alaska Company, Tesoro Northstore
Company, Tesoro Hawaii Corporation, Smiley's Super Service, Inc., Tesoro
Refining and Marketing Company, Tesoro Vostok
26
Company, Tesoro Maritime Company, Far East Maritime Company, Gold Star Maritime
Company, Tesoro Wasatch, LLC, Tesoro Trading Company, Tesoro Marine Services
Holding Company, Tesoro Marine Services, LLC, and Tesoro Gas Resources Company,
Inc.
"Substantial Portion" means, with respect to the Property of the
Borrower and its Subsidiaries, Property which represents more than 10% of the
consolidated assets of the Borrower and its Subsidiaries or property which is
responsible for more than 10% of the consolidated net sales or of the
Consolidated Net Income of the Borrower and its Subsidiaries, in each case, as
would be shown in the consolidated financial statements of the Borrower and its
Subsidiaries, as at the end of the four fiscal quarter period ending with the
fiscal quarter immediately prior to the fiscal quarter in which such
determination is made (or if financial statements have not been delivered
hereunder for that fiscal quarter which ends the four fiscal quarter period,
then the financial statements delivered hereunder for the quarter ending
immediately prior to that quarter).
"Taxes" means any and all present or future taxes, duties, levies,
imposts, deductions, charges or withholdings, and any and all liabilities with
respect to the foregoing, but excluding Excluded Taxes.
"Term Loan" means, with respect to a Lender, such Lender's term loan
made pursuant to Section 2.1.4.
"Term Loan Prepayment Event" is defined in Section 2.2.6.
"Term Loan Termination Date" means the earlier to occur of (i) April
17, 2007 and (ii) the date of termination of the Revolving Loan Commitments
pursuant to Section 8.1 hereof.
"Third Party Agreement" means a letter agreement, in form and substance
acceptable to the Agent, pursuant to which a landlord, bailee, consignee,
processor, warehouseman, or other third party who stores, processes, maintains
or holds Collateral acknowledges, among other things, the Agent's Lien on such
Collateral, the Agent's ability to enforce its Lien on such Collateral, and the
subordination of any Lien held by such landlord, bailee, consignee, processor,
warehouseman, or other third party on such Collateral to the Agent's Lien
thereon.
"Transferee" is defined in Section 12.4.
"Type" means, with respect to any Advance, its nature as a Floating
Rate Advance or a Eurodollar Advance and with respect to any Loan, its nature as
a Floating Rate Loan or a Eurodollar Loan.
"Unencumbered Property Proceeds" means any amount constituting proceeds
from the sale of the Borrower's or any Subsidiary's Property (including proceeds
thereof) that does not constitute or qualify as Collateral or Property securing
amounts owing by the Borrower or its Subsidiaries to the Senior Noteholders
under the Senior Notes or the Senior Term Loan Holders under the Senior Term
Loan Agreement.
"Unfunded Liabilities" means the amount, if any, by which the current
liability as shown on line 1d(2)(a) of the most recently filed Schedule B of
Form 5500 under each Single Employer
27
Plan subject to Title IV of ERISA exceeds the fair market value of all such
Plan's assets allocable to such benefits, all determined as of the then most
recent valuation date for such Plan for which a Schedule B is available.
"Unmatured Default" means an event which but for the lapse of time or
the giving of notice, or both, would constitute a Default.
"US GAAP" means generally accepted accounting principles as in effect
in the United States from time to time.
"Wholly-Owned Subsidiary" of a Person means (i) any Subsidiary all of
the outstanding voting securities of which shall at the time be owned or
controlled, directly or indirectly, by such Person or one or more Wholly-Owned
Subsidiaries of such Person, or by such Person and one or more Wholly-Owned
Subsidiaries of such Person, or (ii) any partnership, limited liability company,
association, joint venture or similar business organization 100% of the
ownership interests having ordinary voting power of which shall at the time be
so owned or controlled.
1.2. Plural Forms. The foregoing definitions shall be equally
applicable to both the singular and plural forms of the defined terms.
ARTICLE II
THE CREDITS
2.1. Commitments; Loans.
2.1.1 Revolving Loans. From and including the Closing Date and
prior to the Revolving Facility Termination Date, upon the satisfaction
of the conditions precedent set forth in Sections 4.1 and 4.2, as
applicable, each Lender severally and not jointly agrees, on the terms
and conditions set forth in this Agreement, to (i) make Revolving Loans
to the Borrower from time to time and (ii) participate in Facility LCs
issued upon the request of the Borrower, in each case in an amount not
to exceed in the aggregate at any one time outstanding of its Revolving
Loan Pro Rata Share of the Available Aggregate Revolving Loan
Commitment; provided that, unless caused by a Collateral Protection
Advance, at no time shall the Aggregate Outstanding Credit Exposure
hereunder exceed the Borrowing Base and at no time shall the Aggregate
Outstanding Credit Exposure minus the portion thereof constituting Term
Loans exceed the Aggregate Revolving Loan Commitment. Subject to the
terms of this Agreement, the Borrower may borrow, repay and reborrow
Revolving Loans at any time prior to the Revolving Facility Termination
Date. The commitment of each Lender to lend hereunder shall
automatically expire on the Revolving Facility Termination Date. Each
LC Issuer will issue Facility LCs hereunder on the terms and conditions
set forth in Section 2.19.
2.1.2 Collateral Protection Advances. Subject to the
limitations set forth below, the Agent is authorized by the Borrower
and the Lenders, from time to time in the Agent's sole discretion, (i)
during the existence of a Default or an Unmatured Default, or (ii) at
any time that any of the other conditions precedent set forth in
Article IV have not been satisfied, to make Advances (each such advance
to be a Floating Rate Advance) to
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the Borrower on behalf of the Lenders in an aggregate amount outstanding at any
time not to exceed $10,000,000 which the Agent, in its reasonable
business judgment, deems necessary or desirable (A) to preserve or
protect the Collateral, or any portion thereof, (B) to enhance the
likelihood of, or maximize the amount of, repayment of the Secured
Obligations, or (C) to pay any other amount chargeable to or required
to be paid by the Borrower pursuant to the terms of this Agreement,
including costs, fees, and expenses as described in Section 9.6 (any of
such Advances are herein referred to as "Collateral Protection
Advances"); provided that the Required Lenders may at any time revoke
the Agent's authorization to make Collateral Protection Advances. Any
such revocation must be in writing and shall become effective
prospectively upon the Agent's receipt thereof. Absent such revocation,
the Agent's determination that the making of a Collateral Protection
Advance is required for any such purposes shall be conclusive. The
Collateral Protection Advances shall be secured by the Liens in favor
of the Agent in and to the Collateral and shall constitute Secured
Obligations hereunder. Each Lender shall participate in each Collateral
Protection Advance in an amount equal to its Revolving Loan Pro Rata
Share thereof.
2.1.3 Making of Non-Ratable Loans. If the Agent elects to have
the terms of this Section 2.1.3 apply to a Floating Rate Advance
requested by the Borrower in order to fund such Floating Rate Advance
pursuant to this Section 2.1.3 instead of Section 2.7, the Non-Ratable
Lender shall make a Floating Rate Advance in the amount requested
available to the Borrower on the applicable Borrowing Date by
transferring same day funds to the Borrower's funding account. Each
Advance made solely by the Non-Ratable Lender pursuant to this Section
2.1.3 is referred to in this Agreement as a "Non-Ratable Loan," and
such Advances are referred to as the "Non-Ratable Loans." Each
Non-Ratable Loan shall be subject to all the terms and conditions
applicable to other Advances funded by the Lenders, except that all
payments thereon shall be payable to the Non-Ratable Lender solely for
its own account. The Agent shall not request the Non-Ratable Lender to
make any Non-Ratable Loan if (A) the Agent has received written notice
from any Lender that one or more of the applicable conditions precedent
set forth in Article IV will not be satisfied on the requested
Borrowing Date for the applicable Non-Ratable Loan, or (B) the
requested Non-Ratable Loan exceeds the Available Aggregate Revolving
Loan Commitment (before giving effect to such Non-Ratable Loan) or
would cause the Aggregate Outstanding Credit Exposure (after giving
effect to such Non-Ratable Loan) to exceed the Borrowing Base on the
applicable Borrowing Date, or would cause the Aggregate Outstanding
Credit Exposure (after giving effect to such Non-Ratable Loan) minus
the portion thereof constituting Term Loans to exceed the Aggregate
Revolving Loan Commitment on the applicable Borrowing Date. The
Non-Ratable Loans shall be secured by the Liens granted to the Agent in
and to the Collateral and shall constitute Secured Obligations
hereunder. All Non-Ratable Loans shall be Floating Rate Advances. Each
Lender shall participate in each Non-Ratable Loan in an amount equal to
its Pro Rata Share thereof.
2.1.4 Term Loans. The Borrower, the Lenders and the Agent
agree that term loans in an aggregate principal amount of $150,000,000
were outstanding under the Prior Credit Agreement described in Article
XVI hereof. As of the Closing Date, the aggregate principal amount of
such term loans is $150,000,000. The Borrower, the Agent, and the
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Lenders agree that such term loans shall be re-evidenced as and shall
constitute Term Loans under this Agreement. Each Lender holding a Term
Loan on the Closing Date is identified, together with the principal
amount of its Term Loan, on the Commitment Schedule to this Agreement.
No Term Loan other than the aforementioned $150,000,000 of Term Loans
shall be extended under or otherwise evidenced by this Agreement
subsequent to the Closing Date.
2.2. Required Payments; Termination.
2.2.1 Generally. Any outstanding Advances and all other unpaid
Secured Obligations not constituting Term Loans or amounts owing under
or in connection with the Term Loans shall be paid in full by the
Borrower on the Revolving Facility Termination Date, and outstanding
Advances and other Secured Obligations constituting Term Loans or
amounts owing under or in connection with Term Loans shall be paid in
full by the Borrower on the Term Loan Termination Date. Notwithstanding
the termination of the Revolving Loan Commitments under this Agreement
on the Revolving Facility Termination Date, until all of the Secured
Obligations (other than contingent indemnity obligations) shall have
been fully paid and satisfied and all financing arrangements among the
Borrower and the Lenders hereunder and under the other Loan Documents
shall have been terminated, all of the rights and remedies under this
Agreement and the other Loan Documents shall survive. In addition to
the other mandatory prepayments required under this Agreement, if at
any time and for any reason, including, without limitation, as a result
of the reduction of the Aggregate Revolving Loan Commitment or a
fluctuation of the Borrowing Base, the Aggregate Outstanding Credit
Exposure exceeds the Borrowing Base, the Borrower shall immediately
make a mandatory prepayment of the Secured Obligations in an amount
equal to such excess.
2.2.2 Asset Sales; Insurance Proceeds. Upon the consummation
by the Borrower or any Subsidiary of any sale of (i) Marine Services
Assets or Retail Property, and (ii) any Property constituting
Collateral (other than sales permitted under Sections 6.12.1 and
6.12.2), in each case except to the extent that the Net Cash Proceeds
of such sale, when combined with the Net Cash Proceeds of all such
sales during the immediately preceding twelve-month period, do not
exceed $5,000,000 for any such sale or series of related sales, within
three (3) Business Days after the Borrower's or any of its
Subsidiaries' receipt of any Net Cash Proceeds from any such sale, or
upon the Borrower's receipt of Net Cash Proceeds under any insurance
policy covering Collateral as contemplated in Section 6.24, the
Borrower shall make a mandatory prepayment of the outstanding principal
amount of the Loans in the amount of such Net Cash Proceeds. Such
mandatory prepayment shall be applied in accordance with Section 2.2.5.
2.2.3 Financings. Upon the consummation of any Financing by
the Borrower or any Subsidiary of the Borrower, within three (3)
Business Days after the Borrower's or any of its Subsidiaries' receipt
of any Net Cash Proceeds from such Financing, the Borrower shall make a
mandatory prepayment of the outstanding principal amount of the Loans
in the amount of such Net Cash Proceeds. Such mandatory prepayment
shall be applied in accordance with Section 2.2.5.
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2.2.4 Effect on Aggregate Revolving Loan Commitment. No
prepayment described in Sections 2.2.2 and 2.2.3 shall result in a
reduction of the Aggregate Revolving Loan Commitment and the Borrower
may request an Advance immediately after such prepayment so long as the
terms and conditions hereunder for an Advance have been satisfied.
2.2.5 Application and Priority of Mandatory Prepayments. The
Borrower shall remit a prepayment to the Agent in the amount of any Net
Cash Proceeds described in Section 2.2.2 or 2.2.3 on the dates required
under such Sections. The Agent shall deposit such prepayment in a
Collection Account or another cash collateral account subject to the
Agent's sole control and shall apply such prepayment first to the
Revolving Loans and then to the Term Loans in accordance with the
following. On the date of any such remittance to the Agent, the Agent
shall apply such amount in reduction of the then outstanding Revolving
Loans. If any portion of a prepayment remains after repaying all of the
outstanding Revolving Loans, the Agent shall notify the Lenders holding
Term Loans in writing of the remaining amount of such prepayment and
shall communicate the Borrower's offer of a reduction of their Term
Loans in their respective allocable amounts of the remaining portion of
such prepayment. Each Term Loan Lender shall have three Business Days
from the date the Agent transmits such prepayment offer to accept or
decline such prepayment. Failure by a Lender holding Term Loans to
respond to the Agent with respect to such prepayment offer in writing
by the end of such three Business Day period shall be deemed to
constitute the acceptance thereof by such Lender. At the end of such
three Business Day period, the Agent shall remit to such accepting
Lenders their respective allocable shares of the remaining portion of
the applicable prepayment. Any portion of such prepayment remaining
thereafter shall be returned to the Borrower for general corporate
purposes. With respect to the reduction of the Loans on any date,
prepayments made under Section 2.2.2 or 2.2.3 shall first be applied to
Floating Rate Loans and to any Eurodollar Rate Loans maturing on such
date and then to subsequently maturing Eurodollar Rate Loans in order
of maturity.
2.2.6 Prepayment Fees.
(a) Aggregate Revolving Loan Commitment. If, prior to
April 17, 2005, the Borrower voluntarily reduces the Aggregate
Revolving Loan Commitment by more than the $70,000,000 permitted in
Section 2.4.2 (any such reduction, a "Revolver Prepayment Event"), then
the Borrower shall pay to the Agent for the benefit of the Lenders with
Revolving Loan Commitments in immediately available funds a prepayment
fee on the date of such Revolver Prepayment Event equal to the
Aggregate Revolving Loan Commitment in effect immediately prior to such
reduction times (i) 0.50% if the Revolver Prepayment Event occurs prior
to April 17, 2004 or (ii) 0.25% if the Revolver Prepayment Event occurs
on or subsequent to April 17, 2004 but prior to April 17, 2005.
Notwithstanding the foregoing, the Borrower shall not be required to
pay any prepayment fee upon the occurrence of a Revolver Prepayment
Event if such Revolver Prepayment Event occurs contemporaneously with a
refinancing of the aggregate outstanding Obligations pursuant to a bank
credit facility provided or arranged by Bank One or an Affiliate
thereof.
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(b) If, prior to April 17, 2005, the Borrower prepays all
or any portion of the Term Loans (any such prepayment, a "Term Loan
Prepayment Event"), then the Borrower shall pay to the Agent for the
benefit of the Lenders holding Term Loans in immediately available
funds a prepayment fee on the date of such Term Loan Prepayment Event
equal to the amount of such prepayment times (i) 0.50% if the Term Loan
Prepayment Event occurs prior to April 17, 2004 or (ii) 0.25% if the
Term Loan Prepayment Event occurs on or subsequent to April 17, 2004
but prior to April 17, 2005.
2.2.7 Term Loan Principal Payments. The Term Loans shall be
repaid in sixteen (16) consecutive quarterly installments, payable on
each Payment Date beginning on June 30, 2003, and continuing thereafter
until the Term Loan Termination Date, and the Term Loans shall be
permanently reduced by the amount of each installment on the date
payment thereof is made hereunder. Each quarterly installment, other
than the final installment, shall be in an amount equal to 0.25% of the
aggregate principal amount of the Term Loans outstanding on the
applicable Payment Date immediately prior to the remittance of such
payment, and the final installment, which shall occur no later than the
Term Loan Termination Date, shall be in an amount equal to the
remaining outstanding principal balance of the Term Loans. No
installment of any Term Loan shall be reborrowed once repaid.
2.3. Ratable Loans; Types of Advances. (a) Other than the Term
Loans outstanding on the Closing Date, each Advance hereunder (other than a
Non-Ratable Loan or a Collateral Protection Advance) shall consist of Revolving
Loans made from the several Lenders ratably in proportion to the ratio that
their respective Revolving Loan Commitments bear to the Aggregate Revolving Loan
Commitment.
(a) The Advances may be Floating Rate Advances or
Eurodollar Advances, or a combination thereof, selected by the Borrower in
accordance with Sections 2.7 and 2.8, or Non-Ratable Loans selected by the
Borrower in accordance with Section 2.1.3.
2.4. Commitment Fee; Aggregate Revolving Loan Commitment.
2.4.1 Commitment Fee. The Borrower shall pay to the Agent, for
the account of the Lenders with Revolving Loan Commitments in
accordance with their Revolving Loan Pro Rata Shares of the Aggregate
Revolving Loan Commitment, from and after the Closing Date until the
date on which the Aggregate Revolving Loan Commitment shall be
terminated in whole, a commitment fee (the "Commitment Fee") accruing
daily at the rate of the then Applicable Fee Rate on the Aggregate
Revolving Loan Commitment minus the Aggregate Outstanding Revolving
Loan Credit Exposure, each as in effect from time to time. All such
Commitment Fees payable hereunder shall be payable quarterly in arrears
on each Payment Date.
2.4.2 Reductions in Aggregate Revolving Loan Commitment. The
Borrower may permanently reduce the Aggregate Revolving Loan Commitment
to $0. Any such reduction shall require the payment of the prepayment
fee described in Section 2.2.6. The Borrower may permanently reduce the
Aggregate Revolving Loan Commitment from the initial amount of
$500,000,000 (or from such higher amount if the Aggregate
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Revolving Loan Commitment has been increased pursuant to Section 2.20)
by $70,000,000 in integral multiples of $10,000,000. No prepayment fee
under Section 2.2.6 shall be required with respect to such $70,000,000
reduction. No other optional reduction of the Aggregate Revolving Loan
Commitment by the Borrower is permitted hereunder. Any such permitted
reduction may only occur upon at least three (3) Business Days' written
notice to the Agent, which notice shall specify the amount of any such
reduction, provided, however, that the amount of the Aggregate
Revolving Loan Commitment plus the aggregate outstanding principal
amount of the Term Loans may not be reduced below the Aggregate
Outstanding Credit Exposure, and the amount of the Aggregate Revolving
Loan Commitment may not be reduced below the Aggregate Outstanding
Credit Exposure minus the portion thereof constituting Term Loans. All
accrued Commitment Fees shall be payable on the effective date of any
termination of the obligations of the Lenders to make Credit Extensions
hereunder and on the final date upon which all Loans are repaid.
2.5. Minimum Amount of Each Advance. Each Eurodollar Advance shall
be in the minimum amount of $1,000,000 (and in multiples of $500,000 if in
excess thereof), and each Floating Rate Advance (other than an Advance to repay
Non-Ratable Loans or Collateral Protection Advances) shall be in the minimum
amount of $100,000 (and in multiples of $50,000 if in excess thereof), provided,
however, that any Floating Rate Advance may be in the amount of the Available
Aggregate Revolving Loan Commitment.
2.6. Optional Principal Payments. The Borrower may from time to
time pay, without penalty or premium, all outstanding Floating Rate Advances, or
any portion of the outstanding Floating Rate Advances. Subject to Section 2.2.6
and 2.2.7, the Borrower may from time to time pay, subject to the payment of any
funding indemnification amounts required by Section 3.4 but without penalty or
premium, all outstanding Eurodollar Advances, or, in a minimum aggregate amount
of $1,000,000 or any integral multiple of $500,000 in excess thereof, any
portion of the outstanding Eurodollar Advances upon three (3) Business Days'
prior notice to the Agent. With respect to optional prepayments of the principal
portion of the Term Loans, until the date on which the Lenders holding Term
Loans receive voluntary prepayments that equal $25,000,000 in the aggregate, the
Lenders holding Term Loans shall be required to accept such prepayments. The
Agent shall receive such prepayments from the Borrower and shall ratably apply
such prepayments in reduction of the then outstanding Term Loans. Subsequent to
the date on which the Lenders holding Term Loans receive voluntary prepayments
that equal $25,000,000 in the aggregate, the Borrower shall notify the Agent in
writing of its offer to make a prepayment and the amount thereof. The Agent
shall promptly transmit such offer to each Lender holding Term Loans. Each Term
Loan Lender shall have three Business Days from the date the Agent transmits the
Borrower's prepayment offer to accept or decline such prepayment. Failure by a
Lender holding Term Loans to respond to the Agent with respect to such
prepayment offer in writing by the end of such three Business Day period shall
be deemed to constitute the acceptance thereof by such Lender. At the end of
such three Business Day period, the Agent shall notify the Borrower of those
Lenders accepting prepayment and the Borrower shall remit to the Agent, for
distribution to such accepting Lenders, their allocable shares of the applicable
prepayment. Any portion of such prepayment not accepted by one or more Lenders
holding Term Loans shall be retained by the Borrower. No such amount shall be
required to be applied to the Revolving Loans. Notwithstanding the foregoing, if
the Borrower offers to prepay all of
33
the outstanding Term Loans in their entirety, all Lenders holding Term Loans
must accept such offer. With respect to the reduction of the Loans on any date
under this Section 2.6, prepayments shall first be applied to Floating Rate
Loans and to any Eurodollar Rate Loans maturing on such date and then to
subsequently maturing Eurodollar Rate Loans in order of maturity.
2.7. Method of Selecting Types and Interest Periods for New
Advances. The Borrower shall select the Type of Advance and, in the case of each
Eurodollar Advance, the Interest Period applicable thereto from time to time;
provided that there shall be no more than 8 Interest Periods in effect with
respect to all of the Loans at any time, unless such limit has been waived by
the Agent in its sole discretion; provided, further, that no Interest Period for
Eurodollar Advances during the "Syndication Period," as defined in the
definition of Interest Period, shall exceed seven days, and the Interest Periods
with respect to such Eurodollar Advances during the Syndication Period shall be
required to expire on the same date. The Borrower shall give the Agent
irrevocable notice (a "Borrowing Notice") not later than 12:00 noon (Chicago
time) on the Borrowing Date of each Floating Rate Advance (other than a
Non-Ratable Loan) and three Business Days before the Borrowing Date for each
Eurodollar Advance, specifying:
(i) the Borrowing Date, which shall be a Business Day, of such
Advance,
(ii) the aggregate amount of such Advance,
(iii) the Type of Advance selected, and
(iv) in the case of each Eurodollar Advance, the Interest Period
applicable thereto.
Not later than 2:00 p.m. (Chicago time) on each Borrowing Date, each Lender
shall make available its Loan or Loans in Federal or other funds immediately
available in Chicago to the Agent at its address specified pursuant to Article
XIII. The Agent will promptly make the funds so received from the Lenders
available to the Borrower at the Agent's aforesaid address.
2.8. Conversion and Continuation of Outstanding Advances; No
Conversion or Continuation of Eurodollar Advances After Default. Floating Rate
Advances (other than Non-Ratable Loans) shall continue as Floating Rate Advances
unless and until such Floating Rate Advances are converted into Eurodollar
Advances pursuant to this Section 2.8 or are repaid in accordance with Section
2.6. Each Eurodollar Advance shall continue as a Eurodollar Advance until the
end of the then applicable Interest Period therefor, at which time such
Eurodollar Advance shall be automatically converted into a Floating Rate Advance
unless (x) such Eurodollar Advance is or was repaid in accordance with Section
2.6 or (y) the Borrower shall have given the Agent a Conversion/Continuation
Notice (as defined below) requesting that, at the end of such Interest Period,
such Eurodollar Advance continue as a Eurodollar Advance for the same or another
Interest Period. Subject to the terms of Section 2.5, the Borrower may elect
from time to time to convert all or any part of an Advance of any Type (other
than a Non-Ratable Loan) into any other Type or Types of Advances; provided that
any conversion of any Eurodollar Advance shall be made on, and only on, the last
day of the Interest Period applicable thereto. Notwithstanding anything to the
contrary contained in this Section 2.8, during the continuance of a Default or
an Unmatured Default, the Agent may (or shall at the direction of the
34
Required Lenders), by notice to the Borrower, declare that no Advance may be
made, converted or continued as a Eurodollar Advance. The Borrower shall give
the Agent irrevocable notice (a "Conversion/Continuation Notice") of each
conversion of an Advance or continuation of a Eurodollar Advance not later than
11:00 a.m. (Chicago time) at least one (1) Business Day, in the case of a
conversion into a Floating Rate Advance, or three (3) Business Days, in the case
of a conversion into or continuation of a Eurodollar Advance, prior to the date
of the requested conversion or continuation, specifying:
(i) the requested date, which shall be a Business Day, of such
conversion or continuation,
(ii) the aggregate amount and Type of the Advance which is to be
converted or continued, and
(iii) the amount of such Advance which is to be converted into or
continued as a Eurodollar Advance and the duration of the Interest Period
applicable thereto.
2.9. Changes in Interest Rate, etc. Each Floating Rate Advance
(other than a Non-Ratable Loan) shall bear interest on the outstanding principal
amount thereof, for each day from and including the date such Advance is made or
is automatically converted from a Eurodollar Advance into a Floating Rate
Advance pursuant to Section 2.8, to but excluding the date it is paid or is
converted into a Eurodollar Advance pursuant to Section 2.8 hereof, at a rate
per annum equal to the Floating Rate for such day. Changes in the rate of
interest on that portion of any Advance maintained as a Floating Rate Advance
will take effect simultaneously with each change in the Alternate Base Rate.
Each Eurodollar Advance shall bear interest on the outstanding principal amount
thereof from and including the first day of the Interest Period applicable
thereto to (but not including) the last day of such Interest Period at the
Eurodollar Rate determined by the Agent as applicable to such Eurodollar Advance
based upon the Borrower's selections under Sections 2.7 and 2.8 and otherwise in
accordance with the terms hereof. No Interest Period with respect to Revolving
Loans may end after the Revolving Facility Termination Date and no Interest
Period with respect to Term Loans may end after the Term Loan Termination Date.
2.10. Rates Applicable After Default. During the continuance of a
Default (including the Borrower's failure to pay any Loan at maturity), the
Agent or the Required Lenders may, at their option, by notice to the Borrower
(which notice may be revoked at the option of the Required Lenders
notwithstanding any provision of Section 8.2 requiring unanimous consent of the
Lenders to changes in interest rates), declare that (i) each Eurodollar Advance
shall bear interest at the rate otherwise applicable to such Interest Period
plus 2% per annum, (ii) each Floating Rate Advance shall bear interest at a rate
per annum equal to the Floating Rate in effect from time to time plus 2% per
annum, and (iii) the LC Fee shall be increased by 2% per annum; provided that,
during the continuance of a Default under Section 7.6 or 7.7, the interest rates
set forth in clauses (i) and (ii) above and the increase in the LC Fee set forth
in clause (iii) above shall be applicable to all Credit Extensions, Advances,
fees and other Obligations hereunder without any election or action on the part
of the Agent or any Lender.
2.11. Method of Payment; Settlement.
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2.11.1 Method of Payment. All payments of the Obligations
hereunder shall be made, without setoff, deduction, or counterclaim, in
immediately available funds to the Agent at the Agent's address
specified pursuant to Article XIII, or at any other Lending
Installation of the Agent specified in writing by the Agent to the
Borrower, by 12:00 p.m. (Chicago time) on the date when due and shall
(except in the case of Reimbursement Obligations for which the
applicable LC Issuer has not been fully indemnified by the Lenders, or
as otherwise specifically required hereunder) be applied ratably by the
Agent among the Lenders. Each payment delivered to the Agent for the
account of any Lender shall be delivered promptly by the Agent to such
Lender in the same type of funds that the Agent received at its address
specified pursuant to Article XIII or at any Lending Installation
specified in a notice received by the Agent from such Lender. The Agent
is hereby authorized to charge the account of the Borrower maintained
with Bank One for each payment of the Obligations as it becomes due
hereunder. The Agent is also hereby authorized to charge each
Collection Account into which Receivables collections and other
proceeds of Collateral are deposited. The Agent shall apply such
amounts on a daily basis to reduce outstanding Obligations.
Notwithstanding the foregoing, amounts on deposit in the Collection
Accounts shall not be applied in reduction of the Term Loans unless
applied pursuant to Section 2.2.2, 2.2.3, 2.2.7, or 6.26 (including,
without limitation, the retention thereof as cash collateral), applied
pursuant to the Borrower's instructions, or otherwise applied pursuant
to the terms of this Agreement. For purposes of computing interest,
fees and the Available Aggregate Revolving Loan Commitment as of any
date, (x) all amounts constituting immediately available goods funds
shall be deemed received by the Agent on the Business Day on which such
amounts are deposited into one of the aforementioned Collection
Accounts maintained with Bank One or an Affiliate thereof, and (y) all
amounts not constituting immediately available good funds shall be
deemed received by the Agent on the first Business Day following the
Business Day on which such amounts are deposited into one of the
aforementioned Collection Accounts maintained with Bank One or an
Affiliate thereof. In the event any such amount is applied and the
payment item evidencing such amount is subsequently dishonored,
returned for insufficient funds, required to be returned to the
applicable Account Debtor, or required to be remitted to a Person other
than the Agent or a Lender, the Obligations shall be increased by the
amount originally applied in reduction thereof and interest shall be
deemed to have accrued on such amount from the Business Day on which
such amount was originally credited as a reduction of the Obligations
through the Business Day on which such amount is repaid. The Borrower
shall also be required to pay any fees that would have accrued during
such period had such amount not been deemed paid during such period.
Each reference to the Agent in this Section 2.11 shall also be deemed
to refer, and shall apply equally, to each LC Issuer in the case of
payments required to be made by the Borrower to such LC Issuer pursuant
to Section 2.19.6.
2.11.2 Settlement. (a) Each Lender's funded portion of any
Advance is intended by the Lenders to be equal at all times to such
Lender's Pro Rata Share of such Advance; provided, however, that for
purposes of this Section 2.11.2 and all other applicable provisions of
this Agreement, only Lenders with Revolving Loan Commitments shall
participate in Collateral Protection Advances and Non-Ratable Loans in
amounts equal to their respective Revolving Loan Pro Rata Shares
thereof. Notwithstanding such agreement, the Agent, the Non-Ratable
Lender (with respect to the Non-Ratable Loans), and the Lenders agree
(which agreement shall not be for the benefit of or enforceable by the
Borrower) that in order to facilitate the administration of this
Agreement and the other Loan Documents, settlement among them as to any
Advance,
36
including the Non-Ratable Loans and the Collateral Protection Advances,
shall take place on a periodic basis in accordance with this Section
2.11.2.
(b) The Agent shall request settlement (a "Settlement")
with the Lenders on at least a weekly basis, or on a more frequent
basis at the Agent's election, (A) on behalf of the Non-Ratable Lender,
with respect to each outstanding Non-Ratable Loan, (B) for itself, with
respect to each Collateral Protection Advance, and (C) with respect to
collections received, in each case, by notifying the Lenders of such
requested Settlement by telephone or facsimile, no later than 12:30 pm
(Chicago time) on the date of such requested Settlement (the
"Settlement Date"). Each Lender (other than the Non-Ratable Lender, in
the case of the Non-Ratable Loans, and the Agent in the case of the
Collateral Protection Advances) shall transfer the amount of such
Lender's Pro Rata Share of the outstanding principal amount of the
applicable Advances with respect to which Settlement is requested to
the Agent, to such account of the Agent as the Agent may designate, not
later than 2:30 p.m. (Chicago time), on the Settlement Date applicable
thereto. Settlements may occur during the existence of a Default or an
Unmatured Default and whether or not the applicable conditions
precedent set forth in Article IV have then been satisfied. Such
amounts transferred to the Agent shall be applied against the amounts
of the applicable Non-Ratable Loan or Collateral Protection Advance
and, together with the portion of such Non-Ratable Loan or Collateral
Protection Advance representing the Non-Ratable Lenders or the Agent's
Pro Rata Share thereof, shall constitute Revolving Loans of such
Lenders, respectively. If any such amount is not transferred to the
Agent by any Lender on the Settlement Date applicable thereto, the
Agent shall be entitled to recover such amount on demand from such
Lender together with interest thereon at the Alternate Base Rate for
the first three days from and after the Settlement Date and thereafter
at the then applicable Floating Rate (1) on behalf of the Non-Ratable
Lender with respect to each outstanding Non-Ratable Loan and (2) for
itself with respect to each Collateral Protection Advance.
(c) Notwithstanding the foregoing, not more than one
Business Day after demand is made by the Agent (whether before or after
the occurrence of a Default or an Unmatured Default and regardless of
whether the Agent has requested a Settlement with respect to a
Non-Ratable Loan or Collateral Protection Advance), each other Lender
(A) shall irrevocably and unconditionally purchase and receive from the
Non-Ratable Lender or the Agent, as applicable, without recourse or
warranty, an undivided interest and participation in such Non-Ratable
Loan or Collateral Protection Advance equal to such Lender's Pro Rata
Share of such Non-Ratable Loan or Collateral Protection Advance, and
(B) if Settlement has not previously occurred with respect to such
Non-Ratable Loans or Collateral Protection Advances, upon demand by the
Agent or the Non-Ratable Lender, as applicable, shall pay to the Agent
or the Non-Ratable Lender, as applicable, as the purchase price of such
participation an amount equal to 100% of such Lender's Pro Rata Share
of such Non-Ratable Loans or Collateral Protection Advances. If such
amount is not in fact transferred to the Agent or the Non-Ratable
Lender, as applicable, by any Lender, the Agent shall be entitled to
recover such amount on demand from such Lender together with interest
thereon at the Alternate Base Rate for the first three days from and
after such demand and thereafter at the then applicable Floating Rate.
37
(d) From and after the date, if any, on which any Lender
purchases an undivided interest and participation in any Non-Ratable
Loan or Collateral Protection Advance pursuant to Section 2.11.2(c),
the Agent shall promptly distribute to such Lender such Lender's Pro
Rata Share of all payments of principal and interest and all proceeds
of Collateral received by the Agent in respect of such Non-Ratable Loan
or Collateral Protection Advance.
(e) Between Settlement Dates, to the extent no Collateral
Protection Advances are outstanding, the Agent may pay over to the
Non-Ratable Lender any payments received by the Agent, which in
accordance with the terms of this Agreement would be applied to the
reduction of the Revolving Loans, for application to the Non-Ratable
Lender's Revolving Loans including Non-Ratable Loans. If, as of any
Settlement Date, collections received since the then immediately
preceding Settlement Date have been applied to the Non-Ratable Lender's
Revolving Loans (other than to Non-Ratable Loans or Collateral
Protection Advances in which a Lender has not yet funded its purchase
of a participation pursuant to Section 2.11.2(c)), as provided for in
the previous sentence, the Non-Ratable Lender shall pay to the Agent
for the accounts of the Lenders, to be applied to the outstanding
Revolving Loans of such Lenders, an amount such that each Lender shall,
upon receipt of such amount, have, as of such Settlement Date, its Pro
Rata Share of the Revolving Loans. Subject to Section 2.11.1, during
the period between Settlement Dates, the Non-Ratable Lender with
respect to Non-Ratable Loans, the Agent with respect to Collateral
Protection Advances, and each Lender with respect to the Revolving
Loans other than Non-Ratable Loans and Collateral Protection Advances,
in each case ratably in accordance with the funds employed by each of
them, shall be entitled to interest at the applicable rate or rates
payable under this Agreement on the actual average daily amount of
funds employed by the Non-Ratable Lender, the Agent, and the other
Lenders.
2.12. Noteless Agreement; Evidence of Indebtedness. Each Lender
shall maintain in accordance with its usual practice an account or accounts
evidencing the indebtedness of the Borrower to such Lender resulting from each
Loan made by such Lender from time to time, including the amounts of principal
and interest payable and paid to such Lender from time to time hereunder.
(i) The Agent shall also maintain accounts in which it will record
(a) the date and the amount of each Loan made hereunder, the
Type thereof and the Interest Period (in the case of a
Eurodollar Advance) with respect thereto, (b) the amount of
any principal or interest due and payable or to become due and
payable from the Borrower to each Lender hereunder, (c) the
original stated amount of each Facility LC and the amount of
LC Obligations outstanding at any time, (d) the effective date
and amount of each Assignment Agreement delivered to and
accepted by it and the parties thereto pursuant to Section
12.3, (e) the amount of any sum received by the Agent
hereunder from the Borrower and each Lender's share thereof,
and (f) all other appropriate debits and credits as provided
in this Agreement, including, without limitation, all fees,
charges, expenses and interest.
(ii) The entries maintained in the accounts maintained pursuant to
paragraphs (i) and (ii) above shall be prima facie evidence of
the existence and amounts of the
38
Obligations therein recorded; provided, however, that the
failure of the Agent or any Lender to maintain such accounts
or any error therein shall not in any manner affect the
obligation of the Borrower to repay the Obligations in
accordance with their terms.
(iii) Any Lender may request that (a) its Revolving Loans be
evidenced by a promissory note in substantially the form of
Exhibit E-1 and (b) its Term Loans be evidenced by a
promissory note in substantially the form of Exhibit E-2
(each, a "Note"). In such event, the Borrower shall prepare,
execute and deliver to such Lender the appropriate Note
payable to the order of such Lender. Thereafter, the Loans
evidenced by such Note and interest thereon shall at all times
(prior to any assignment pursuant to Section 12.3) be
represented by one or more Notes payable to the order of the
payee named therein, except to the extent that any such Lender
subsequently returns any such Note for cancellation and
requests that such Loans once again be evidenced as described
in paragraphs (i) and (ii) above.
2.13. Telephonic Notices. The Borrower hereby authorizes the Lenders
and the Agent to extend, convert or continue Advances, effect selections of
Types of Advances and to transfer funds based on telephonic notices made by any
person or persons the Agent or any Lender in good faith believes to be acting on
behalf of the Borrower, it being understood that the foregoing authorization is
specifically intended to allow Borrowing Notices and Conversion/Continuation
Notices to be given telephonically. The Borrower agrees to deliver promptly to
the Agent a written confirmation, signed by an Authorized Officer, if such
confirmation is requested by the Agent or any Lender, of each telephonic notice.
If the written confirmation differs in any material respect from the action
taken by the Agent and the Lenders, the records of the Agent and the Lenders
shall govern absent manifest error.
2.14. Payments of Interest.
2.14.1 Interest Payment Dates; Interest and Fee Basis.
Interest accrued on each Floating Rate Advance shall be payable in
arrears on each Payment Date, commencing with the first such date to
occur after the Closing Date, and at maturity, whether due to
acceleration or otherwise. Interest accrued on each Eurodollar Advance
shall be payable on the last day of its applicable Interest Period, on
any date on which the Eurodollar Advance is prepaid, whether by
acceleration or otherwise, and at maturity. Interest accrued on each
Eurodollar Advance having an Interest Period longer than three months
shall also be payable on the last day of each three-month interval
during such Interest Period. Interest on Eurodollar Advances, LC Fees
and all other fees hereunder shall be calculated for actual days
elapsed on the basis of a 360-day year. Interest on Floating Rate
Advances shall be calculated for actual days elapsed on the basis of a
365/366-day year. Interest shall be payable for the day an Advance is
made but not for the day of any payment (unless payment is on the same
date as the Advance) on the amount paid if payment is received prior to
12:00 p.m. (Chicago time) at the place of payment. If any payment of
principal of or interest on an Advance, any fees or any other amounts
payable to the Agent or any Lender hereunder shall become due on a day
which is not a Business Day, such payment shall be made on the next
succeeding Business Day and, in the case of a principal payment, such
extension of time shall be included in computing interest, fees and
commissions in connection with such payment.
39
2.14.2 Limitation on Interest. The Borrower, the Agent and the
Holders of Secured Obligations intend to strictly comply with all
applicable laws, including applicable usury laws. Accordingly, the
provisions of this Section 2.14.2 shall govern and control over every
other provision of this Agreement or any other Loan Document which
conflicts or is inconsistent with this Section 2.14.2, even if such
provision declares that it controls. As used in this Section 2.14.2,
the term "interest" includes the aggregate of all charges, fees,
benefits, or other compensation which constitute interest under
applicable law, provided that, to the maximum extent permitted by
applicable law, (a) any non-principal payment shall be characterized as
an expense or as compensation for something other than the use,
forbearance, or detention of money and not as interest and (b) all
interest at any time contracted for, reserved, charged, or received
shall be amortized, prorated, allocated, and spread, in equal parts
during the full term of the Secured Obligations. In no event shall the
Borrower or any other Person be obligated to pay, or any Holder of
Secured Obligations have any right or privilege to reserve, receive, or
retain, (i) any interest in excess of the maximum amount of nonusurious
interest permitted under the laws of the State of New York or the
applicable laws (if any) of the U.S. or of any other applicable state
or (ii) total interest in excess of the amount which such Holder of
Secured Obligations could lawfully have contracted for, reserved,
received, retained, or charged had the interest been calculated for the
full term of the Secured Obligations at the Highest Lawful Rate. On
each day, if any, that the interest rate (the "Stated Rate") called for
under this Agreement or any other Loan Document exceeds the Highest
Lawful Rate, the rate at which interest shall accrue shall
automatically be fixed by operation of this sentence at the Highest
Lawful Rate for that day, and shall remain fixed at the Highest Lawful
Rate for each day thereafter until the total amount of interest accrued
equals the total amount of interest which would have accrued if there
were no such ceiling rate as is imposed by this sentence. Thereafter,
interest shall accrue at the Stated Rate unless and until the Stated
Rate again exceeds the Highest Lawful Rate when the provisions of the
immediately preceding sentence shall again automatically operate to
limit the interest accrual rate. The daily interest rates to be used in
calculating interest at the Highest Lawful Rate shall be determined by
dividing the applicable Highest Lawful Rate per annum by the number of
days in the calendar year for which such calculation is being made.
None of the terms and provisions contained in this Agreement or in any
other Loan Document which directly or indirectly relate to interest
shall ever be construed without reference to this Section 2.14.2, or be
construed to create a contract to pay for the use, forbearance, or
detention of money at an interest rate in excess of the Highest Lawful
Rate. If the term of any Secured Obligation is shortened by reason of
acceleration of maturity as a result of any Default or by any other
cause, or by reason of any required or permitted prepayment, and if for
that (or any other) reason any Holder of Secured Obligations at any
time, including but not limited to, the stated maturity, is owed or
receives (and/or has received) interest in excess of interest
calculated at the Highest Lawful Rate, then and in any such event all
of any such excess interest shall be canceled automatically as of the
date of such acceleration, prepayment, or other event which produces
the excess, and, if such excess interest has been paid to such Holder
of Secured Obligations, it shall be credited pro tanto against the then
outstanding principal balance of the Borrower's obligations to such
Holder of Secured Obligations, effective as of the date or dates when
the event occurs which causes it to be
40
excess interest, until such excess is exhausted or all of such
principal has been fully paid and satisfied, whichever occurs first,
and any remaining balance of such excess shall be promptly refunded to
its payor. Chapter 346 of the Texas Finance Code (which regulates
certain revolving credit accounts (formerly Tex. Rev. Civ. Stat. Xxx.
Art. 0000, Xx. 15)) shall not apply to this Agreement or to any Loan,
nor shall this Agreement or any Loan be governed by or be subject to
the provisions of such Chapter 346 in any manner whatsoever.
2.15. Notification of Advances, Interest Rates, Prepayments and
Revolving Loan Commitment Reductions; Availability of Loans. Promptly after
receipt thereof, the Agent will notify each Lender of the contents of each
Aggregate Revolving Loan Commitment reduction notice, Borrowing Notice,
Conversion/Continuation Notice, and repayment notice received by it hereunder.
Promptly after notice from the applicable LC Issuer, the Agent will notify each
Lender of the contents of each request for issuance of a Facility LC hereunder.
The Agent will notify the Borrower and each Lender of the interest rate
applicable to each Eurodollar Advance promptly upon determination of such
interest rate and will give the Borrower and each Lender prompt notice of each
change in the Alternate Base Rate. Not later than 2:00 p.m. (Chicago time) on
each Borrowing Date, each Lender shall make available its Loan or Revolving
Loans in funds immediately available in Chicago to the Agent at its address
specified pursuant to Article XIII. The Agent will promptly make the funds so
received from the Lenders available to the Borrower at the Agent's aforesaid
address.
2.16. Lending Installations. Each Lender may book its Loans and its
participation in any LC Obligations and each LC Issuer may book its Facility LCs
at any Lending Installation selected by such Lender or such LC Issuer, as
applicable, and may change its Lending Installation from time to time. All terms
of this Agreement shall apply to any such Lending Installation and the Loans,
Facility LCs, participations in LC Obligations and any Notes issued hereunder
shall be deemed held by each Lender or the relevant LC Issuer, as applicable,
for the benefit of any such Lending Installation. Each Lender and each LC Issuer
may, by written notice to the Agent and the Borrower in accordance with Article
XIII, designate replacement or additional Lending Installations through which
Loans will be made by it or Facility LCs will be issued by it and for whose
account Loan payments or payments with respect to Facility LCs are to be made.
2.17. Non-Receipt of Funds by the Agent. Unless the Borrower or a
Lender, as the case may be, notifies the Agent prior to the date on which it is
scheduled to make payment to the Agent of (i) in the case of a Lender, the
proceeds of a Loan or (ii) in the case of the Borrower, a payment of principal,
interest or fees to the Agent for the account of the Lenders, that it does not
intend to make such payment, the Agent may assume that such payment has been
made. The Agent may, but shall not be obligated to, make the amount of such
payment available to the intended recipient in reliance upon such assumption. If
such Lender or the Borrower, as the case may be, has not in fact made such
payment to the Agent, the recipient of such payment shall, on demand by the
Agent, repay to the Agent the amount so made available together with interest
thereon in respect of each day during the period commencing on the date such
amount was so made available by the Agent until the date the Agent recovers such
amount at a rate per annum equal to (x) in the case of payment by a Lender, the
Federal Funds Effective Rate for such day
41
for the first three days and, thereafter, the interest rate applicable to the
relevant Loan or (y) in the case of payment by the Borrower, the interest rate
applicable to the relevant Loan.
2.18. Replacement of Lender. If the Borrower is required pursuant to
Section 3.1, 3.2 or 3.5 to make any additional payment to any Lender or if any
Lender's obligation to make or continue, or to convert Floating Rate Advances
into, Eurodollar Advances shall be suspended pursuant to Section 3.3 (any Lender
so affected an "Affected Lender"), the Borrower may elect, if such amounts
continue to be charged or such suspension is still effective, to terminate or
replace the Revolving Loan Commitment and Term Loans of such Affected Lender,
provided that no Default or Unmatured Default shall have occurred and be
continuing at the time of such termination or replacement, and provided further
that, concurrently with such termination or replacement, (i) if the Affected
Lender is being replaced, another bank or other entity which is reasonably
satisfactory to the Borrower and the Agent shall agree, as of such date, to
purchase for cash the Outstanding Credit Exposure of the Affected Lender
pursuant to an Assignment Agreement substantially in the form of Exhibit C and
to become a Lender for all purposes under this Agreement and to assume all
obligations of the Affected Lender to be terminated as of such date and to
comply with the requirements of Section 12.3 applicable to assignments, and (ii)
the Borrower shall pay to such Affected Lender in immediately available funds on
the day of such replacement (A) all interest, fees and other amounts then
accrued but unpaid to such Affected Lender by the Borrower hereunder to and
including the date of termination, including without limitation payments due to
such Affected Lender under Sections 3.1, 3.2 and 3.5, and (B) an amount, if any,
equal to the payment which would have been due to such Lender on the day of such
replacement under Section 3.4 had the Loans of such Affected Lender been prepaid
on such date rather than sold to the replacement Lender, in each case to the
extent not paid by the purchasing lender and (iii) if the Affected Lender is
being terminated, the Borrower shall pay to such Affected Lender all Obligations
due to such Affected Lender (including the amounts described in the immediately
preceding clauses (i) and (ii) plus the outstanding principal balance of such
Affected Lender's Credit Extensions).
2.19. Facility LCs.
2.19.1 Issuance. Each LC Issuer hereby agrees, on the terms
and conditions set forth in this Agreement, to issue standby and
commercial letters of credit (each, a "Facility LC") and to renew,
extend, increase, decrease or otherwise modify each Facility LC
("Modify," and each such action, a "Modification"), from time to time
from and including the date of this Agreement and prior to the
Revolving Facility Termination Date upon the request of the Borrower or
any Subsidiary Guarantor; provided that immediately after each such
Facility LC is issued or Modified, (i) the aggregate amount of the
outstanding LC Obligations shall not exceed $400,000,000, (ii) the
Aggregate Outstanding Credit Exposure shall not exceed the Borrowing
Base and (iii) the Aggregate Outstanding Credit Exposure minus the
portion thereof constituting Term Loans shall not exceed the Aggregate
Revolving Loan Commitment. Any reference in this Section 2.19 to a
request for a Facility LC by the Borrower shall be deemed to include
requests by any Subsidiary Guarantor. The Borrower agrees that it is
obligated to satisfy any amount arising under or in connection with
Facility LCs issued hereunder at the request of any Subsidiary
Guarantor, including, without limitation, all Reimbursement
Obligations, and that no Facility LC requested by any such Person shall
be issued hereunder unless all
42
conditions to issuance have been satisfied. No Facility LC shall have
an expiry date later than the earlier of (x) the fifth Business Day
prior to the Revolving Facility Termination Date and (y) one year after
its issuance; provided, however, that any Facility LC with a one-year
term may provide for the renewal thereof for additional one-year
periods that do not extend beyond the date referenced in clause (x)
hereof. Schedule 2.19.1 sets forth certain letters of credit issued
under the Existing Credit Agreement. Subject to the satisfaction on the
Closing Date of the conditions precedent set forth in Sections 4.1 and
4.2, such letters of credit shall constitute, on and after the Closing
Date, Facility LCs and shall be subject to and benefit from this
Agreement. In addition to the foregoing, all Facility LCs issued or
outstanding under the Prior Credit Agreement described in Article XVI
hereof shall constitute Facility LCs under this Agreement.
2.19.2 Participations. Upon the issuance or Modification by an
LC Issuer of a Facility LC in accordance with this Section 2.19, such
LC Issuer shall be deemed, without further action by any party hereto,
to have unconditionally and irrevocably sold to each Lender, and each
Lender shall be deemed, without further action by any party hereto, to
have unconditionally and irrevocably purchased from such LC Issuer, a
participation in such Facility LC (and each Modification thereof) and
the related LC Obligations in proportion to its Revolving Loan Pro Rata
Share.
2.19.3 Notice. Subject to Section 2.19.1, the Borrower shall
give the applicable LC Issuer notice prior to 12:00 noon (Chicago time)
at least one Business Day prior to the proposed date of issuance or
Modification of the applicable Facility LC, specifying the beneficiary,
the proposed date of issuance (or Modification) and the expiry date of
such Facility LC, and describing the proposed terms of such Facility LC
and the nature of the transactions proposed to be supported thereby.
Upon receipt of such notice, the applicable LC Issuer shall promptly
notify the Agent, and the Agent shall promptly notify each Lender, of
the contents thereof and of the amount of such Lender's participation
in such proposed Facility LC. The issuance or Modification by the
applicable LC Issuer of a Facility LC shall, in addition to the
conditions precedent set forth in Article IV (the satisfaction of which
the applicable LC Issuer shall have no duty to ascertain), be subject
to the conditions precedent that such Facility LC shall be satisfactory
to the applicable LC Issuer and that the Borrower shall have executed
and delivered such application agreement and/or such other instruments
and agreements relating to such Facility LC as the applicable LC Issuer
shall have reasonably requested (each, a "Facility LC Application"). In
the event of any conflict between the terms of this Agreement and the
terms of any Facility LC Application, the terms of this Agreement shall
control.
2.19.4 LC Fees. The Borrower shall pay to the Agent, for the
account of the Lenders ratably in accordance with their respective
Revolving Loan Pro Rata Shares, with respect to each Facility LC, a
letter of credit fee at a per annum rate equal to the Applicable Margin
for Revolving Loans that are Eurodollar Loans in effect from time to
time on the maximum stated amount under such Facility LC, such fee to
be payable in arrears on each Payment Date. The Borrower shall also pay
to the applicable LC Issuer for its own account (x) on the first
Payment Date to occur after the issuance of a Facility LC issued by
such LC Issuer, a fronting fee in an amount equal to 0.125% times the
face amount of such Facility LC, and (y) documentary and processing
charges in connection
43
with the issuance, amendment, cancellation, negotiation, transfer, or
other Modification of and draws under Facility LCs in accordance with
such LC Issuer's standard schedule for such charges as in effect from
time to time. Each fee described in this Section 2.19.4 shall
constitute an "LC Fee".
2.19.5 Administration; Reimbursement by Lenders. Upon receipt
from the beneficiary of any Facility LC of any demand for payment under
such Facility LC, the applicable LC Issuer shall notify the Agent and
the Agent shall promptly notify the Borrower and each other Lender as
to the amount to be paid by such LC Issuer as a result of such demand
and the proposed payment date (the "LC Payment Date"). The
responsibility of the applicable LC Issuer to the Borrower and each
Lender shall be only to determine that the documents (including each
demand for payment) delivered under each Facility LC issued by such LC
Issuer in connection with such presentment shall be in conformity in
all material respects with such Facility LC. Each LC Issuer shall
endeavor to exercise the same care in the issuance and administration
of its Facility LCs as it does with respect to letters of credit in
which no participations are granted, it being understood that in the
absence of any gross negligence or willful misconduct by such LC
Issuer, each Lender shall be unconditionally and irrevocably liable
without regard to the occurrence of any Default or any condition
precedent whatsoever, to reimburse such LC Issuer on demand for (i)
such Lender's Revolving Loan Pro Rata Share of the amount of each
payment made by such LC Issuer under each Facility LC issued by it to
the extent such amount is not reimbursed by the Borrower pursuant to
Section 2.19.6 below, plus (ii) interest on the foregoing amount to be
reimbursed by such Lender, for each day from the date of such LC
Issuer's demand for such reimbursement (or, if such demand is made
after 11:00 a.m. (Chicago time) on such date, from the next succeeding
Business Day) to the date on which such Lender pays the amount to be
reimbursed by it, at a rate of interest per annum equal to the Federal
Funds Effective Rate for the first three days and, thereafter, at a
rate of interest equal to the rate applicable to Floating Rate
Advances.
2.19.6 Reimbursement by Borrower. The Borrower shall be
irrevocably and unconditionally obligated to reimburse each LC Issuer
on or before the applicable LC Payment Date for any amounts to be paid
by such LC Issuer upon any drawing under any Facility LC, issued by it,
without presentment, demand, protest or other formalities of any kind;
provided that neither the Borrower nor any Lender shall hereby be
precluded from asserting any claim for direct (but not consequential)
damages suffered by the Borrower or such Lender to the extent, but only
to the extent, caused by (i) the willful misconduct or gross negligence
of such LC Issuer in determining whether a request presented under any
Facility LC issued by it complied with the terms of such Facility LC or
(ii) such LC Issuer's failure to pay under any Facility LC issued by it
after the presentation to it of a request strictly complying with the
terms and conditions of such Facility LC. All such amounts paid by such
LC Issuer and remaining unpaid by the Borrower shall bear interest,
payable on demand, for each day until paid at a rate per annum equal to
(x) the rate applicable to Floating Rate Advances for such day if such
day falls on or before the applicable LC Payment Date and (y) the sum
of 2% plus the rate applicable to Floating Rate Advances for such day
if such day falls after such LC Payment Date. The Agent and each LC
Issuer will pay to each Lender ratably in accordance with its Revolving
Loan Pro Rata Share all amounts received by it from the Borrower for
application in payment, in whole
44
or in part, of the Reimbursement Obligation in respect of any Facility
LC issued by it, but only to the extent such Lender has made payment to
such LC Issuer in respect of such Facility LC pursuant to Section
2.19.5. Subject to the terms and conditions of this Agreement
(including, without limitation, the submission of a Borrowing Notice in
compliance with Section 2.7 and the satisfaction of the applicable
conditions precedent set forth in Article IV), the Borrower may request
an Advance hereunder for the purpose of satisfying any Reimbursement
Obligation.
2.19.7 Obligations Absolute. The Borrower's obligations under
this Section 2.19 shall be absolute and unconditional under any and all
circumstances and irrespective of any setoff, counterclaim or defense
to payment which the Borrower may have or have had against any LC
Issuer, any Lender or any beneficiary of a Facility LC. The Borrower
further agrees with each LC Issuer and the Lenders that the LC Issuers
and the Lenders shall not be responsible for, and the Borrower's
Reimbursement Obligation in respect of any Facility LC shall not be
affected by, among other things, the validity or genuineness of
documents or of any endorsements thereon, even if such documents should
in fact prove to be in any or all respects invalid, fraudulent or
forged, or any dispute between or among the Borrower, any of its
Affiliates, the beneficiary of any Facility LC or any financing
institution or other party to whom any Facility LC may be transferred
or any claims or defenses whatsoever of the Borrower or of any of its
Affiliates against the beneficiary of any Facility LC or any such
transferee. No LC Issuer shall be liable for any error, omission,
interruption or delay in transmission, dispatch or delivery of any
message or advice, however transmitted, in connection with any Facility
LC. The Borrower agrees that any action taken or omitted by any LC
Issuer or any Lender under or in connection with each Facility LC and
the related drafts and documents, if done without gross negligence or
willful misconduct, shall be binding upon the Borrower and shall not
put any LC Issuer or any Lender under any liability to the Borrower.
Nothing in this Section 2.19.7 is intended to limit the right of the
Borrower to make a claim against the applicable LC Issuer for damages
as contemplated by the proviso to the first sentence of Section 2.19.6.
2.19.8 Actions of LC Issuers. Each LC Issuer shall be entitled
to rely, and shall be fully protected in relying, upon any Facility LC
issued by it, draft, writing, resolution, notice, consent, certificate,
affidavit, letter, cablegram, telegram, telecopy, telex or teletype
message, statement, order or other document 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,
independent accountants and other experts selected by such LC Issuer.
Each LC Issuer shall be fully justified in failing or refusing to take
any action under this Agreement unless it shall first have received
such advice or concurrence of the Required Lenders as it reasonably
deems appropriate or it shall first be indemnified to its reasonable
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. Notwithstanding any other provision of this Section
2.19, each LC Issuer shall in all cases be fully protected in acting,
or in refraining from acting, under this Agreement in accordance with a
request of the Required Lenders, and such request and any action taken
or failure to act pursuant thereto shall be binding upon the Lenders
and any future holders of a participation in any Facility LC.
45
2.19.9 Indemnification. The Borrower hereby agrees to
indemnify and hold harmless each Lender required to participate in
Facility LCs under Section 2.19.2, each LC Issuer and the Agent, and
their respective directors, officers, agents and employees from and
against any and all claims and damages, losses, liabilities, costs or
expenses which such Lender, such LC Issuer or the Agent may incur (or
which may be claimed against such Lender, such LC Issuer or the Agent
by any Person whatsoever) by reason of or in connection with the
issuance, execution and delivery or transfer of or payment or failure
to pay under any Facility LC or any actual or proposed use of any
Facility LC, including, without limitation, any claims, damages,
losses, liabilities, costs or expenses which such LC Issuer may incur
by reason of or in connection with (i) the failure of any other Lender
to fulfill or comply with its obligations to such LC Issuer hereunder
(but nothing herein contained shall affect any rights the Borrower may
have against any defaulting Lender) or (ii) by reason of or on account
of such LC Issuer issuing any Facility LC which specifies that the term
"Beneficiary" included therein includes any successor by operation of
law of the named Beneficiary, but which Facility LC does not require
that any drawing by any such successor Beneficiary be accompanied by a
copy of a legal document, satisfactory to the applicable LC Issuer,
evidencing the appointment of such successor Beneficiary; provided that
the Borrower shall not be required to indemnify any Lender, any LC
Issuer or the Agent for any claims, damages, losses, liabilities, costs
or expenses to the extent, but only to the extent, caused by (x) the
willful misconduct or gross negligence of such LC Issuer in determining
whether a request presented under any Facility LC complied with the
terms of such Facility LC or (y) such LC Issuer's failure to pay under
any Facility LC issued by it after the presentation to it of a request
strictly complying with the terms and conditions of such Facility LC.
Nothing in this Section 2.19.9 is intended to limit the obligations of
the Borrower under any other provision of this Agreement.
2.19.10 Lenders' Indemnification. Each Lender shall, ratably
in accordance with its Revolving Loan Pro Rata Share, indemnify each LC
Issuer, its affiliates and their respective directors, officers, agents
and employees (to the extent not reimbursed by the Borrower) against
any cost, expense (including reasonable counsel fees and
disbursements), claim, demand, action, loss or liability (except such
as result from such indemnitees' gross negligence or willful misconduct
or such LC Issuer's failure to pay under any Facility LC issued by it
after the presentation to it of a request strictly complying with the
terms and conditions of such Facility LC) that such indemnitees may
suffer or incur in connection with this Section 2.19 or any action
taken or omitted by such indemnitees hereunder.
2.19.11 Facility LC Collateral Account. Subsequent to the
occurrence and during the continuance of a Default, or at any time the
Aggregate Outstanding Credit Exposure exceeds the Borrowing Base, or at
any time the Aggregate Outstanding Credit Exposure minus the portion
thereof constituting Term Loans exceeds the Aggregate Revolving Loan
Commitment, the Borrower agrees that it will, upon the request of the
Agent or the Required Lenders and until the final expiration date of
any Facility LC and thereafter as long as any amount is payable to any
LC Issuer or the Lenders in respect of any Facility LC, maintain a
special collateral account pursuant to arrangements satisfactory to the
Agent (the "Facility LC Collateral Account") at the Agent's office at
the address
46
specified pursuant to Article XIII, in the name of the Borrower but
under the sole dominion and control of the Agent, for the benefit of
the Lenders and in which the Borrower shall have no interest other than
as set forth in Section 8.1. The Borrower hereby pledges, assigns and
grants to the Agent, on behalf of and for the ratable benefit of the
Lenders and the LC Issuers, a security interest in all of the
Borrower's right, title and interest in and to all funds which may from
time to time be on deposit in the Facility LC Collateral Account to
secure the prompt and complete payment and performance of the Secured
Obligations. The Agent will invest any funds on deposit from time to
time in the Facility LC Collateral Account in certificates of deposit
of Bank One having a maturity not exceeding 30 days. Nothing in this
Section 2.19.11 shall either obligate the Agent to require the Borrower
to deposit any funds in the Facility LC Collateral Account or limit the
right of the Agent to release any funds held in the Facility LC
Collateral Account in each case other than as required by Section 8.1.
2.19.12 Rights as a Lender. In its capacity as a Lender, each
LC Issuer shall have the same rights and obligations as any other
Lender.
2.20. Increase of Aggregate Revolving Loan Commitment. The Borrower
may from time to time request that the Aggregate Revolving Loan Commitment be
increased to an amount which does not exceed $550,000,000 minus the aggregate
amount of all permitted partial reductions of the Aggregate Revolving Loan
Commitment under Section 2.4.2; provided, however, that (x) if such request
would cause the Aggregate Revolving Loan Commitment to exceed $500,000,000, no
such request shall be made by the Borrower until the indenture referenced in
clause (i) of Section 9.18 has been amended, to the Agent's satisfaction, to
permit a senior secured revolving credit facility in excess of $500,000,000 plus
the amount of the requested increase, (y) each requested increase shall be in an
amount equal to $10,000,000 or an incremental amount in excess thereof, and (z)
an increase in the Aggregate Revolving Loan Commitment hereunder may only be
made at a time when no Unmatured Default or Default shall have occurred and be
continuing or would result therefrom. In the event of such a requested increase
in the Aggregate Revolving Loan Commitment under this clause (ii), each of the
Lenders shall be given the opportunity to participate in the increased Aggregate
Revolving Loan Commitment, (x) initially ratably in the proportion that its
Revolving Loan Commitment bears to the Aggregate Revolving Loan Commitment and
(y) to the extent that the requested increase in the Aggregate Revolving Loan
Commitment is not fulfilled pursuant to the preceding clause, in such additional
amounts as any Lender, including any new Lender, the Agent and the Borrower
agree. No Lender shall have any obligation to increase its Revolving Loan
Commitment pursuant to a request by the Borrower under this clause (ii). No
increase hereunder shall be effective without the prior written consent of the
Agent and any two Lenders constituting "Co-Agents" (no such consent to be
unreasonably withheld), including, without limitation, the Agent's prior written
consent to the documentation evidencing such increase.
47
ARTICLE III
YIELD PROTECTION; TAXES
3.1. Yield Protection. If, on or after the Closing Date, the
adoption of any law or any governmental or quasi-governmental rule, regulation,
policy, guideline or directive (whether or not having the force of law), or any
change in any such law, rule, regulation, policy, guideline or directive or in
the interpretation or administration thereof by any governmental or
quasi-governmental authority, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by any Lender or
applicable Lending Installation or any LC Issuer with any request or directive
(whether or not having the force of law) of any such authority, central bank or
comparable agency:
(i) subjects any Lender or any applicable Lending Installation or
any LC Issuer to any Taxes, or changes the basis of taxation
of payments (other than with respect to Excluded Taxes) to any
Lender or any LC Issuer in respect of its Eurodollar Loans,
Facility LCs or participations therein, or
(ii) imposes or increases or deems applicable any reserve,
assessment, insurance charge, special deposit or similar
requirement against assets of, deposits with or for the
account of, or credit extended by, any Lender or any
applicable Lending Installation or any LC Issuer (other than
reserves and assessments taken into account in determining the
interest rate applicable to Eurodollar Advances), or
(iii) imposes any other condition the result of which is to increase
the cost to any Lender or any applicable Lending Installation
of making, funding or maintaining its Revolving Loan
Commitment or Eurodollar Loans or of issuing or participating
in Facility LCs, or reduces any amount receivable by any
Lender or any applicable Lending Installation or any LC Issuer
in connection with its Revolving Loan Commitment or Eurodollar
Loans or Facility LCs (including participations therein), or
requires any Lender or any applicable Lending Installation or
any LC Issuer to make any payment calculated by reference to
the amount of Revolving Loan Commitment or Eurodollar Loans or
Facility LCs (including participations therein) held or
interest or LC Fees received by it, by an amount deemed
material by such Lender or any LC Issuer, as applicable.
and the result of any of the foregoing is to increase the cost to such Lender or
applicable Lending Installation or such LC Issuer of making or maintaining its
Eurodollar Loans or Revolving Loan Commitment or of issuing or participating in
Facility LCs, as applicable, or to reduce the return received by such Lender or
applicable Lending Installation or such LC Issuer in connection with such
Eurodollar Loans or Revolving Loan Commitment, or Facility LCs (including
participations therein), then, within 15 days of demand, accompanied by the
written statement required by Section 3.6, by such Lender or LC Issuer, the
Borrower shall pay such Lender or LC Issuer such additional amount or amounts as
will compensate such Lender or LC Issuer for such increased cost or reduction in
amount received.
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3.2. Changes in Capital Adequacy Regulations. If a Lender or LC
Issuer determines the amount of capital required or expected to be maintained by
such Lender or LC Issuer, any Lending Installation of such Lender or LC Issuer
or any corporation controlling such Lender or LC Issuer is increased as a result
of a Change, then, within 15 days of demand, accompanied by the written
statement required by Section 3.6, by such Lender or LC Issuer, the Borrower
shall pay such Lender or LC Issuer the amount necessary to compensate for any
shortfall in the rate of return on the portion of such increased capital which
such Lender or LC Issuer determines is attributable to this Agreement, its
Outstanding Credit Exposure or its Revolving Loan Commitment to make Revolving
Loans and issue or participate in Facility LCs, as applicable, hereunder (after
taking into account such Lender's or LC Issuer's policies as to capital
adequacy). "Change" means (i) any change after the Closing Date in the
Risk-Based Capital Guidelines or (ii) any adoption of, or change in, or change
in the interpretation or administration of any other law, governmental or
quasi-governmental rule, regulation, policy, guideline, interpretation, or
directive (whether or not having the force of law) after the Closing Date which
affects the amount of capital required or expected to be maintained by any
Lender or LC Issuer or any Lending Installation or any corporation controlling
any Lender or LC Issuer. "Risk-Based Capital Guidelines" means (i) the
risk-based capital guidelines in effect in the United States on the Closing
Date, including transition rules, and (ii) the corresponding capital regulations
promulgated by regulatory authorities outside the United States implementing the
July 1988 report of the Basle Committee on Banking Regulation and Supervisory
Practices Entitled "International Convergence of Capital Measurements and
Capital Standards," including transition rules, and any amendments to such
regulations adopted prior to the Closing Date.
3.3. Availability of Types of Advances. If (x) any Lender
determines that maintenance of its Eurodollar Loans at a suitable Lending
Installation would violate any applicable law, rule, regulation, or directive,
whether or not having the force of law, or (y) the Required Lenders determine
that (i) deposits of a type and maturity appropriate to match fund Eurodollar
Advances are not available or (ii) the interest rate applicable to Eurodollar
Advances does not accurately reflect the cost of making or maintaining
Eurodollar Advances, or (iii) no reasonable basis exists for determining the
Eurodollar Base Rate, then the Agent shall suspend the availability of
Eurodollar Advances and require any affected Eurodollar Advances to be repaid or
converted to Floating Rate Advances on the respective last days of the then
current Interest Periods with respect to such Loans or within such earlier
period as required by law, subject to the payment of any funding indemnification
amounts required by Section 3.4.
3.4. Funding Indemnification. If any payment of a Eurodollar
Advance occurs on a date which is not the last day of the applicable Interest
Period, whether because of acceleration, prepayment or otherwise, or a
Eurodollar Advance is not made or continued, or a Floating Rate Advance is not
converted into a Eurodollar Advance, on the date specified by the Borrower for
any reason other than default by the Lenders, or a Eurodollar Advance is not
prepaid on the date specified by the Borrower for any reason, the Borrower will
indemnify each Lender for any loss or cost incurred by it resulting therefrom,
including, without limitation, any loss or cost in liquidating or employing
deposits acquired to fund or maintain such Eurodollar Advance.
3.4. Taxes. All payments by the Borrower to or for the account of
any Lender, any LC Issuer or the Agent hereunder or under any Note shall be made
free and clear of and without deduction for any and all Taxes. If the Borrower
shall be required by law to deduct any Taxes
49
from or in respect of any sum payable hereunder to any Lender, any LC Issuer or
the Agent, (a) the sum payable shall be increased as necessary so that after
making all required deductions (including deductions applicable to additional
sums payable under this Section 3.5) such Lender, LC Issuer or the Agent (as the
case may be) receives an amount equal to the sum it would have received had no
such deductions been made, (b) the Borrower shall make such deductions, (c) the
Borrower shall pay the full amount deducted to the relevant authority in
accordance with applicable law and (d) the Borrower shall furnish to the Agent
the original copy of a receipt evidencing payment thereof or, if a receipt
cannot be obtained with reasonable efforts, such other evidence of payment as is
reasonably acceptable to the Agent, in each case within 30 days after such
payment is made.
(i) In addition, the Borrower shall pay any present or future
stamp or documentary taxes and any other excise or property
taxes, charges or similar levies which arise from any payment
made hereunder or under any Note or Facility LC Application or
from the execution or delivery of, or otherwise with respect
to, this Agreement or any Note or Facility LC Application
("Other Taxes").
(ii) The Borrower shall indemnify the Agent, each LC Issuer and
each Lender for the full amount of Taxes or Other Taxes
(including, without limitation, any Taxes or Other Taxes
imposed on amounts payable under this Section 3.5) paid by the
Agent, such LC Issuer or such Lender as a result of its
Revolving Loan Commitment, any Credit Extensions made by it
hereunder, any Facility LC issued or participated in by it
hereunder, or otherwise in connection with its participation
in this Agreement and any liability (including penalties,
interest and expenses) arising therefrom or with respect
thereto. Payments due under this indemnification shall be made
within 30 days of the date the Agent, such LC Issuer or such
Lender makes demand therefor pursuant to Section 3.6.
(iii) Each Lender that is not incorporated under the laws of the
United States of America or a state thereof (each a "Non-U.S.
Lender") agrees that it will, not more than ten Business Days
after the date on which it becomes a party to this Agreement
(but in any event before a payment is due to it hereunder),
(i) deliver to each of the Borrower and the Agent two duly
completed copies of United States Internal Revenue Service
Form W-8BEN or W-8ECI, certifying in either case that such
Lender is entitled to receive payments under this Agreement
without deduction or withholding of any United States federal
income taxes, or (ii) in the case of a Non-U.S. Lender that is
fiscally transparent, deliver to the Agent a United States
Internal Revenue Form W-8IMY together with the applicable
accompanying forms, W-8 or W-9, as the case may be, and
certify that it is entitled to an exemption from United States
withholding tax. Each Non-U.S. Lender further undertakes to
deliver to the Borrower and the Agent (x) renewals or
additional copies of such form (or any successor form) on or
before the date that such form expires or becomes obsolete,
and (y) after the occurrence of any event requiring a change
in the most recent forms so delivered by it, such additional
forms or amendments thereto as may be reasonably requested by
the Borrower or the Agent. All forms or amendments described
in the preceding sentence shall certify that such Lender is
entitled to receive payments under this
50
Agreement without deduction or withholding of any United
States federal income taxes, unless an event (including
without limitation any change in treaty, law or regulation)
has occurred prior to the date on which any such delivery
would otherwise be required which renders all such forms
inapplicable or which would prevent such Lender from duly
completing and delivering any such form or amendment with
respect to it and such Lender advises the Borrower and the
Agent that it is not capable of receiving payments without any
deduction or withholding of United States federal income tax.
(iv) For any period during which a Non-U.S. Lender has failed to
provide the Borrower with an appropriate form pursuant to
clause (iv) above (unless such failure is due to a change in
treaty, law or regulation, or any change in the interpretation
or administration thereof by any governmental authority,
occurring subsequent to the date on which a form originally
was required to be provided), such Non-U.S. Lender shall not
be entitled to indemnification under this Section 3.5 with
respect to Taxes imposed by the United States; provided that,
should a Non-U.S. Lender which is otherwise exempt from or
subject to a reduced rate of withholding tax become subject to
Taxes because of its failure to deliver a form required under
clause (iv) above, the Borrower shall take such steps as such
Non-U.S. Lender shall reasonably request to assist such
Non-U.S. Lender to recover such Taxes.
(v) Any Lender that is entitled to an exemption from or reduction
of withholding tax with respect to payments under this
Agreement or any Note pursuant to the law of any relevant
jurisdiction or any treaty shall deliver to the Borrower (with
a copy to the Agent), at the time or times prescribed by
applicable law, such properly completed and executed
documentation prescribed by applicable law as will permit such
payments to be made without withholding or at a reduced rate.
(vi) If the U.S. Internal Revenue Service or any other governmental
authority of the United States or any other country or any
political subdivision thereof 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 or properly completed, because such Lender failed to
notify the Agent of a change in circumstances which rendered
its exemption from withholding 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,
withholding therefor, or otherwise, including penalties and
interest, and including taxes imposed by any jurisdiction on
amounts payable to the Agent under this subsection, together
with all costs and expenses related thereto (including
attorneys fees and time charges of attorneys for the Agent,
which attorneys may be employees of the Agent). The
obligations of the Lenders under this Section 3.5(vii) shall
survive the payment of the Obligations and termination of this
Agreement.
3.6. Lender Statements; Survival of Indemnity. Each Lender shall
deliver a written statement of such Lender to the Borrower (with a copy to the
Agent) as to the amount due, if any, under Section 3.1, 3.2, 3.4 or 3.5. Such
written statement shall set forth in reasonable detail
51
the calculations upon which such Lender determined such amount and shall be
final, conclusive and binding on the Borrower in the absence of manifest error.
Determination of amounts payable under such Sections in connection with a
Eurodollar Loan shall be calculated as though each Lender funded its Eurodollar
Loan through the purchase of a deposit of the type, currency and maturity
corresponding to the deposit used as a reference in determining the Eurodollar
Rate applicable to such Loan, whether in fact that is the case or not. Unless
otherwise provided herein, the amount specified in the written statement of any
Lender shall be payable on demand after receipt by the Borrower of such written
statement. The obligations of the Borrower under Sections 3.1, 3.2, 3.4 and 3.5
shall survive payment of the Obligations and termination of this Agreement.
3.7. Alternative Lending Installation. To the extent reasonably
possible, each Lender shall designate an alternate Lending Installation with
respect to its Eurodollar Loans to reduce any liability of the Borrower to such
Lender under Sections 3.1, 3.2 and 3.5 or to avoid the unavailability of
Eurodollar Advances under Section 3.3, so long as such designation is not, in
the judgment of such Lender, reasonably disadvantageous to such Lender. A
Lender's designation of an alternative Lending Installation shall not affect the
Borrower's rights under Section 2.18 to replace a Lender.
ARTICLE IV
CONDITIONS PRECEDENT
4.1. Effectiveness of Revolving Loan Commitments. The Lenders'
Revolving Loan Commitments shall not be effective hereunder and the term loans
outstanding under the Prior Credit Agreement described in Article XVI hereof
shall not constitute Term Loans hereunder until the Agent shall have received on
the Closing Date a fully executed copy of this Agreement. The following
conditions precedent were satisfied by the Borrower and copies of the following
deliveries were received by the Agent on April 17, 2003, the "Closing Date"
under the credit agreement that was amended and restated by the Prior Credit
Agreement described in Article XVI hereof:
4.1.1 Copies of the articles or certificate of incorporation
(or the equivalent thereof) of (a) the Borrower and (b) each Subsidiary
Guarantor, in each case together with all amendments thereto, and a
certificate of good standing, each certified by the appropriate
governmental officer in its jurisdiction of organization.
4.1.2 Copies, certified by the Secretary or Assistant
Secretary (or the equivalent thereof) of (a) the Borrower and (b) each
Subsidiary Guarantor, in each case, of its by-laws and of its Board of
Directors' resolutions and of resolutions or actions of any other body
authorizing the execution of the Loan Documents to which the Borrower
or such Subsidiary, as applicable, is a party.
4.1.3 An incumbency certificate, executed by the Secretary or
Assistant Secretary (or the equivalent thereof) of (a) the Borrower and
(b) each Subsidiary Guarantor, in each case which shall identify by
name and title and bear the signatures of the Authorized Officers and
any other officers of the Borrower and such Subsidiary authorized to
sign
52
the Loan Documents to which the Borrower and such Subsidiary are
parties, upon which certificate the Agent and the Lenders shall be
entitled to rely until informed of any change in writing by the
Borrower or such Subsidiary, as applicable.
4.1.4 A certificate, in substantially the form of Exhibit G,
signed by the chief financial officer of the Borrower, stating that on
the initial Credit Extension Date (a) no Default or Unmatured Default
has occurred and is then continuing, (b) all of the representations and
warranties in Article V shall be true and correct in all material
respects as of such date (or an earlier date if a representation or
warranty relates to a specified earlier date) and (c) no material
adverse change in the business, Property, condition (financial or
otherwise), operations or results of operations or prospects of the
Borrower or any of its Subsidiary Guarantors has occurred since
December 31, 2002.
4.1.5 A written opinion of the Borrower's counsel, in form and
substance satisfactory to the Agent and addressed to the Lenders, in
substantially the form of Exhibit A hereto.
4.1.6 Any Notes requested by a Lender pursuant to Section 2.12
payable to the order of each such requesting Lender.
4.1.7 Written money transfer instructions, in substantially
the form of Exhibit D, addressed to the Agent and signed by an
Authorized Officer, together with such other related money transfer
authorizations as the Agent may have reasonably requested.
4.1.8 The Agent shall have determined that the Borrower has
fully cooperated with the Agent's syndication efforts, including,
without limitation, by providing the Agent with information regarding
the Borrower's operations and prospects and such other information as
the Agent deems necessary to successfully syndicate the Loans
hereunder.
4.1.9 Evidence satisfactory to the Agent that the Existing
Credit Agreement shall have been terminated prior to the Closing Date
(except for those provisions that expressly survive the termination
thereof), all loans outstanding and other amounts owed to the lenders
or agents thereunder shall have been paid in full, and all liens and
security interests granted in connection therewith shall have been
terminated prior to the Closing Date.
4.1.10 A fully-executed copy of each of this Agreement, the
Security Agreement, the Senior Note Indenture, and the Senior Term Loan
Agreement.
4.1.11 Evidence satisfactory to the Agent that the Borrower
has received Net Cash Proceeds resulting from the issuance of Other
Senior Secured Debt in an aggregate amount equal to or greater than
$550,000,000.
4.1.12 A Monthly Collateral Report for February 2003, an
Interim Collateral Report dated as of April 17, 2003, and such other
evidence reasonably requested by the Agent to demonstrate that, among
other things, the excess of the Borrowing Base as set forth in the
above-mentioned Interim Collateral Report over the Aggregate
Outstanding
53
Credit Exposure on the Closing Date, after giving effect to all
Advances requested by the Borrower and to be made on the Closing Date,
equals or exceeds $175,000,000.
4.1.13 An initial compliance certificate dated as of April 17,
2003, in substantially the form of Exhibit B hereto, together with (i)
the Borrower's most recently completed audited financial statements for
the fiscal year ended December 31, 2002 as filed on Form 10-K with the
U.S. Securities and Exchange Commission, (ii) the Borrower's most
recently completed financial summaries, and (iii) the Borrower's
financial projections, in a format reasonably acceptable to the Agent,
for the period beginning January 1, 2003 and ending December 31, 2006.
4.1.14 All fees owing to the Agent and the Lenders on the
Closing Date, including, without limitation, those referenced in
Section 10.13, shall have been fully paid.
4.1.15 Those deliveries required in connection with the
Intercreditor Agreement.
4.1.16 Such other documents as any Lender or its counsel may
have reasonably requested, including, without limitation, those
documents set forth in Exhibit H hereto.
4.2. Each Credit Extension. The Lenders shall not be required to
make any Credit Extension (except as otherwise set forth in Section 2.1.3(d)
with respect to Revolving Loans extended for purposes of repaying Non-Ratable
Loans and other than in connection with Collateral Protection Advances) unless
on the applicable Credit Extension Date:
4.2.1 There exists no Default or Unmatured Default.
4.2.2 The representations and warranties contained in Article
V are true and correct as of such Credit Extension Date except (x) with
respect to Sections 5.4 and 5.7, the representations and warranties set
forth in such Sections shall have been true and correct on and as of
the date of the most recent Form 10-K or Form 10-Q filing, as
applicable, made by the Borrower with the U.S. Securities and Exchange
Commission, and (y) with respect to any other representation and
warranty set forth in Article V, to the extent such representation or
warranty is stated to relate solely to an earlier date, such
representation or warranty shall have been true and correct on and as
of such earlier date.
Each Borrowing Notice, or request for issuance of a Facility LC, with
respect to each such Credit Extension shall constitute a representation and
warranty by the Borrower that the conditions contained in Sections 4.2.1 and
4.2.2 have been satisfied.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants to each Lender and the Agent as of
each of (i) the Closing Date, (ii) the date of the initial Credit Extension
hereunder (if different from the Closing Date) and (iii) each date as required
by Section 4.2:
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5.1. Existence and Standing. Each of the Borrower and its
Subsidiaries is a corporation, partnership (in the case of Subsidiaries only) or
limited liability company duly incorporated or organized, as the case may be,
validly existing and (to the extent such concept applies to such entity) in good
standing under the laws of its jurisdiction of incorporation or organization and
has all requisite authority to conduct its business in each jurisdiction in
which its business is conducted, except where the failure to be so qualified
does not or could not be expected to cause or result in the occurrence of a
Material Adverse Effect.
5.2. Authorization and Validity. Each of the Borrower and each
Subsidiary Guarantor has the power and authority and legal right to execute and
deliver the Loan Documents to which the Borrower or each Subsidiary Guarantor,
as applicable, is a party and to perform its obligations thereunder. The
execution and delivery by each of the Borrower and each Subsidiary Guarantor of
the Loan Documents to which the Borrower or each Subsidiary Guarantor, as
applicable, is a party and the performance of its obligations thereunder have
been duly authorized by proper proceedings, and the Loan Documents to which the
Borrower or such Subsidiary Guarantor, as applicable, is a party constitute
legal, valid and binding obligations of the Borrower or such Subsidiary
Guarantor, as applicable, enforceable against the Borrower or such Subsidiary
Guarantor, as applicable, in accordance with their terms, except as
enforceability may be limited by (i) bankruptcy, insolvency, fraudulent
conveyances, reorganization or similar laws relating to or affecting the
enforcement of creditors' rights generally; (ii) general equitable principles
(whether considered in a proceeding in equity or at law); and (iii) requirements
of reasonableness, good faith and fair dealing.
5.3. No Conflict; Government Consent. Neither the execution and
delivery by the Borrower or the Subsidiary Guarantors, as applicable, of the
Loan Documents, nor the consummation of the transactions therein contemplated,
nor compliance with the provisions thereof will violate (i) any law, rule,
regulation, order, writ, judgment, injunction, decree or award binding on the
Borrower or any of the Subsidiary Guarantors, or (ii) the Borrower's or any
Subsidiary Guarantor's articles or certificate of incorporation, partnership
agreement, certificate of partnership, articles or certificate of organization,
by-laws, or operating agreement or other management agreement, as the case may
be, or (iii) the provisions of any indenture, instrument or agreement to which
the Borrower or any of the Subsidiary Guarantors is a party or is subject, or by
which it, or its Property, is bound, or conflict with, or constitute a default
under, or result in, or require, the creation or imposition of any Lien in, of
or on the Property of the Borrower or a Subsidiary Guarantor pursuant to the
terms of, any such indenture, instrument or agreement. No order, consent,
adjudication, approval, license, authorization, or validation of, or exemption
by, any governmental or public body or authority, or any subdivision thereof,
which has not been obtained by the Borrower or any of the Subsidiary Guarantors,
is required to be obtained by the Borrower or any of the Subsidiary Guarantors
in connection with the execution and delivery of the Loan Documents, the
borrowings under this Agreement, the payment and performance by the Borrower of
the Obligations or the legality, validity, binding effect or enforceability of
any of the Loan Documents.
5.4. Financial Statements. The December 31, 2002 consolidated
financial statements of the Borrower and its Subsidiaries heretofore delivered
to the Agent and the Lenders were prepared in accordance with US GAAP in effect
on the date such statements were prepared and fairly present the consolidated
financial condition of the Borrower and its Subsidiaries at such date.
5.5. Material Adverse Change. Since December 31, 2002, there has
been no change in the business, Property, prospects, condition (financial or
otherwise) or results of operations of the
55
Borrower and its Subsidiaries, taken together, which could reasonably be
expected to have a Material Adverse Effect.
5.6. Taxes. The Borrower and its Subsidiaries have filed all United
States federal tax returns and all other tax returns which are required to be
filed and have paid all taxes due pursuant to said returns or pursuant to any
assessment received by the Borrower or any of its Subsidiaries, except in
respect of such taxes, if any, as are being contested in good faith and as to
which adequate reserves have been provided in accordance with Agreement
Accounting Principles and as to which no Lien exists (except as permitted by
Section 6.15.1). The United States income tax returns of the Borrower and its
Subsidiaries have been audited by the Internal Revenue Service through the
fiscal year ended 1998. No liens have been filed with respect to such taxes. The
charges, accruals and reserves on the books of the Borrower and its Subsidiaries
in respect of any taxes or other governmental charges are adequate.
5.7. Litigation and Contingent Obligations. There is no litigation,
arbitration, governmental investigation, proceeding or inquiry pending or, to
the knowledge of any of their officers, threatened against or affecting the
Borrower or any of its Subsidiaries which could reasonably be expected to have a
Material Adverse Effect or which seeks to prevent, enjoin or delay the making of
any Loans. Other than any liability incident to any litigation, arbitration or
proceeding which could not reasonably be expected to have a Material Adverse
Effect, the Borrower has no material contingent obligations not provided for or
disclosed in the financial statements referred to in Section 5.4.
5.8. Subsidiaries. Schedule 5.8 contains an accurate list of all
Subsidiaries of the Borrower as of the date of this Agreement, setting forth
their respective jurisdictions of organization and the percentage of their
respective capital stock or other ownership interests owned by the Borrower or
other Subsidiaries. Schedule 5.8 also identifies those Subsidiaries that
constitute Subsidiary Guarantors. All of the issued and outstanding shares of
capital stock or other ownership interests of such Subsidiaries have been (to
the extent such concepts are relevant with respect to such ownership interests)
duly authorized and issued and are fully paid and non-assessable.
5.9. ERISA. As of the Closing Date, the Unfunded Liabilities of all
Single Employer Plans do not in the aggregate exceed $75,000,000. As of the
Closing Date, each Plan complies with all minimum funding requirements under
ERISA. As of the Closing Date, neither the Borrower nor any member of the
Controlled Group is party to a Multiemployer Plan or has, or could reasonably be
expected to have, any liability to a Multiemployer Plan.
5.10. Accuracy of Information. The information, exhibits or reports
furnished by the Borrower to the U.S. Securities and Exchange Commission on Form
10-K and Form 10-Q do not contain any material misstatement of fact or omit to
state a material fact or any fact necessary to make the statements contained
therein not misleading. The information furnished by the Borrower in each
Monthly Collateral Report and Interim Collateral Report is, to the best of the
Borrower's knowledge, accurate in all material respects.
5.11. Regulation U. Neither the Borrower nor any of its Subsidiaries
is engaged principally, or as one of its important activities, in the business
of extending credit for the
56
purpose, whether immediate, incidental or ultimate of buying or carrying margin
stock (as defined in Regulation U), and after applying the proceeds of each
Credit Extension, margin stock (as defined in Regulation U) constitutes less
than 25% of the value of those assets of the Borrower and its Subsidiaries which
are subject to any limitation on sale, pledge, or any other restriction
hereunder.
5.12. Material Agreements. Neither the Borrower nor any Subsidiary
is in default in the performance, observance or fulfillment of any of the
obligations, covenants or conditions contained in (i) any agreement or
instrument to which it is a party, which default could reasonably be expected to
have a Material Adverse Effect or (ii) any agreement or instrument evidencing or
governing Indebtedness.
5.13. Compliance With Laws. The Borrower and its Subsidiaries have
complied with all applicable statutes, rules, regulations, orders and
restrictions of any domestic or foreign government or any instrumentality or
agency thereof having jurisdiction over the conduct of their respective
businesses or the ownership of their respective Property, except where the
failure to do so has not caused or resulted in the occurrence of a Material
Adverse Effect.
5.14. Ownership of Properties. On the date of this Agreement, the
Borrower and its Subsidiaries have indefeasible title, free of all Liens other
than those permitted by Section 6.15, to all of the assets reflected in the
Borrower's most recent consolidated financial statements provided to the Agent,
as owned by the Borrower and its Subsidiaries.
5.15. Plan Assets; Prohibited Transactions. The Borrower is not an
entity deemed to hold "plan assets" within the meaning of 29 C.F.R. Section
2510.3-101 of an employee benefit plan (as defined in Section 3(3) of ERISA)
which is subject to Title I of ERISA or any plan (within the meaning of Section
4975 of the Code), and neither the execution of this Agreement nor the making of
Revolving Loans hereunder gives rise to a prohibited transaction within the
meaning of Section 406 of ERISA or Section 4975 of the Code.
5.16. Environmental Matters. In the ordinary course of its business,
the officers of the Borrower consider the effect of Environmental Laws on the
business of the Borrower and its Subsidiaries, in the course of which they
identify and evaluate potential risks and liabilities accruing to the Borrower
due to Environmental Laws. On the basis of this consideration, the Borrower has
concluded that Environmental Laws cannot reasonably be expected to have a
Material Adverse Effect. Neither the Borrower nor any Subsidiary has received
any notice to the effect that its operations are not in material compliance with
any of the requirements of applicable Environmental Laws or are the subject of
any federal or state investigation evaluating whether any remedial action is
needed to respond to a release of any toxic or hazardous waste or substance into
the environment, which non-compliance or remedial action could reasonably be
expected to have a Material Adverse Effect.
5.17. Investment Company Act. Neither the Borrower nor any
Subsidiary is an "investment company" or a company "controlled" by an
"investment company", within the meaning of the Investment Company Act of 1940,
as amended.
57
5.18. Public Utility Holding Company Act. The Borrower is not a
"holding company" as such term is defined in the Public Utility Holding Company
Act of 1935, as amended.
5.19. Insurance. The Borrower maintains, and has caused each
Subsidiary to maintain, with financially sound and reputable insurance
companies, insurance on all their Property in such amounts, subject to such
deductibles and self-insurance retentions and covering such properties and risks
as is consistent with sound business practice. The Borrower has delivered to the
Agent and the Lenders a complete and accurate list of its insurance policies and
programs and the Property subject thereto. The Borrower has caused all such
policies to be subject to provisions which prohibit the cancellation thereof by
the provider thereof without at least 30 days' prior written notice to the
Borrower and each loss payee thereof.
5.20. No Default or Unmatured Default. No Default or Unmatured
Default has occurred and is continuing.
5.21. Reportable Transaction. The Borrower does not intend to treat
the Advances and related transactions as being a "reportable transaction"
(within the meaning of Treasury Regulation Section 1.6011-4). In the event the
Borrower determines to take any action inconsistent with such intention, it will
promptly notify the Agent thereof.
ARTICLE VI
COVENANTS
During the term of this Agreement, unless the Required Lenders shall
otherwise consent in writing:
6.1. Financial Reporting. The Borrower will maintain, for itself
and each Subsidiary, a system of accounting established and administered in
accordance with US GAAP, and furnish to the Agent for the benefit of the
Lenders:
6.1.1 Within 105 days after the close of each of its fiscal
years, (a) financial statements prepared in accordance with Agreement
Accounting Principles on a consolidated basis for itself and its
Subsidiaries, as filed on Form 10-K with the U.S. Securities and
Exchange Commission, accompanied by (i) an auditor's report,
unqualified as to scope, of a nationally recognized firm of independent
public accountants or other independent public accountants reasonably
acceptable to the Required Lenders; (ii) any management letter prepared
by said accountants; and (iii) a certificate of said accountants that,
in the course of their examination necessary for their certification of
the foregoing, they have obtained no knowledge of any Default or
Unmatured Default, or if, in the opinion of such accountants, any
Default or Unmatured Default shall exist, stating the nature and status
thereof.
6.1.2 Within (x) 30 days after the end of each calendar month
other than those calendar months that end the first three fiscal
quarters of each of the Borrower's fiscal years, and (y) 45 days after
the end of each December of each calendar year, for itself and its
Subsidiaries, the Borrower's financial summaries for such month, which
shall be in form and substance substantially similar to the financial
summaries delivered on or prior
58
to the Closing Date or shall otherwise be in form and substance
reasonably acceptable to the Agent.
6.1.3 Within 45 days after the close of each of the first
three fiscal quarters of each of its fiscal years, for itself and its
Subsidiaries, consolidated unaudited financial statements for such
period as filed on Form 10-Q with the U.S. Securities and Exchange
Commission, prepared in accordance with Agreement Accounting Principles
and (except for the exclusion of any disclosure permitted by the U.S.
Securities and Exchange Commission) certified as to fairness of
presentation and consistency by its chief financial officer or
treasurer.
6.1.4 Together with the financial statements required under
Sections 6.1.1 and 6.1.3, a compliance certificate in substantially the
form of Exhibit B signed by its chief financial officer or treasurer
showing the calculations necessary to determine compliance with this
Agreement, an officer's certificate in substantially the form of
Exhibit G stating that no Default or Unmatured Default exists, or if
any Default or Unmatured Default exists, stating the nature and status
thereof, and, together with the financial statements required under
Section 6.1.1 and Section 6.1.3, a certificate executed and delivered
by the chief executive officer or chief financial officer stating that
the Borrower is in compliance with all requirements of Section 302 and
Section 906 of the Xxxxxxxx-Xxxxx Act of 2002 and all rules and
regulations related thereto.
6.1.5 Within 270 days after the close of each fiscal year of
the Borrower, a copy of the actuarial report and Form 5500 with
Schedule B showing the Unfunded Liabilities of each Single Employer
Plan as of the valuation date occurring in such fiscal year, certified
by an actuary enrolled under ERISA.
6.1.6 As soon as practicable and in any event within 10 days
after the Borrower knows that any Reportable Event has occurred with
respect to any Plan, a statement, signed by the chief financial officer
or treasurer of the Borrower, describing said Reportable Event and the
action which the Borrower proposes to take with respect thereto.
6.1.7 As soon as practicable and in any event within 10 days
after receipt by the Borrower, a copy of (a) any notice or claim to the
effect that the Borrower or any of its Subsidiaries is or may be liable
to any Person as a result of the release by the Borrower, any of its
Subsidiaries, or any other Person of any toxic or hazardous waste or
substance into the environment, and (b) any notice alleging any
violation of any federal, state or local environmental, health or
safety law or regulation by the Borrower or any of its Subsidiaries,
which, in either case, could reasonably be expected to have a Material
Adverse Effect.
6.1.8 Promptly upon the filing thereof, copies of all
registration statements and annual, quarterly, or other regular reports
which the Borrower or any of its Subsidiaries files with the Securities
and Exchange Commission, including, without limitation, all
certifications and other filings required by Section 302 and Section
906 of the Xxxxxxxx-Xxxxx Act of 2002 and all rules and regulations
related thereto.
59
6.1.9 On each date on which an Interim Collateral Report or a
Monthly Collateral Report is delivered, the Borrower shall provide the
Agent with all supporting documents the Agent reasonably deems
desirable, all certified as being true and correct by an Authorized
Officer of the Borrower. The Borrower may update Interim Collateral
Reports and Monthly Collateral Reports more frequently than the periods
set forth below and, so long as such Interim Collateral Reports or
Monthly Collateral Reports are delivered together with all supporting
information reasonably requested by the Agent, the most recently
delivered Interim Collateral Report or Monthly Collateral Report, as
applicable, shall be the applicable Interim Collateral Report or
Monthly Collateral Report for purposes of determining the Borrowing
Base at any time.
6.1.10 As soon as practicable, and in any event within 15
calendar days of the end of each calendar month, the Borrower shall
provide the Agent with a Monthly Collateral Report for such calendar
month certified as being true and correct in all material respects by
an Authorized Officer of the Borrower. In addition to the foregoing,
the Borrower, upon the Agent's reasonable request, shall deliver copies
of invoices, purchase orders, credit memoranda, shipping and delivery
documents and other information related to Eligible Receivables and
Eligible Petroleum Inventory identified in the applicable Monthly
Collateral Report.
6.1.11 As soon as practicable, and in any event (x) on or
prior to December 31, 2003, within 3 Business Days after the end of
each calendar week; provided, however, that if Excess Availability is
less than 15% of the Borrowing Base then in effect, Receivables will be
updated twice each calendar week, and (y) so long as Excess
Availability is equal to or greater than 25% of the Borrowing Base then
in effect, subsequent to December 31, 2003, with the Agent's prior
consent, within 3 Business Days after the end of each of the second and
fourth full calendar weeks of any calendar month, the Borrower shall
provide to the Agent an Interim Collateral Report for such one-week or
two-week period, as applicable, certified as being true and correct by
an Authorized Officer of the Borrower. Each Interim Collateral Report
shall identify, for the applicable reporting period, the aggregate
amount of all contra-accounts related to Specified Customers net of the
aggregate of the face amounts of all letters of credit issued on behalf
of the Borrower or the applicable Subsidiary Guarantor to Specified
Customers as payment for goods or services purchased by the Borrower or
the applicable Subsidiary Guarantor from the Specified Customers.
6.1.12 Within 30 days after the close of each of its fiscal
years, a copy of the plan and forecast (including a projected balance
sheet, projected income statements, and projected funds flow statement)
of the Borrower and its Subsidiaries, for the upcoming fiscal year
prepared in such detail as shall be reasonably satisfactory to the
Agent. Any plan and forecast in form and substance substantially
similar to the plan and forecast delivered on or prior to the Closing
Date shall be deemed to be reasonably satisfactory by the Agent.
6.1.13 Such other information (including non-financial
information) as the Agent or any Lender may from time to time
reasonably request.
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6.2. Use of Proceeds. The Borrower will, and will cause each
Subsidiary to, use the proceeds of the Credit Extensions for general corporate
purposes, including, without limitation, for working capital, to repay certain
Indebtedness, expenditures constituting Consolidated Capital Expenditures,
Permitted Acquisitions, and to pay fees and expenses incurred in connection with
this Agreement. The Borrower shall use the proceeds of Credit Extensions in
compliance with all applicable legal and regulatory requirements and any such
use shall not result in a violation of any such requirements, including, without
limitation, Regulation U and X, the Securities Act of 1933, as amended, and the
Securities Exchange Act of 1934, as amended, and the regulations promulgated
thereunder.
6.3. Notice of Default. Within five (5) Business Days after an
Authorized Officer becomes aware thereof, the Borrower will, and will cause each
Subsidiary Guarantor to, give notice in writing to the Lenders of the occurrence
of any Default or Unmatured Default and of any other development, financial or
otherwise, which could reasonably be expected to have a Material Adverse Effect.
6.4. Conduct of Business. The Borrower will, and will cause each
Subsidiary Guarantor to, carry on and conduct its business in substantially the
same manner and in substantially the same fields of enterprise as it is
presently conducted and do all things necessary to remain duly incorporated or
organized, validly existing and (to the extent such concept applies to such
entity) in good standing as a corporation, partnership or limited liability
company in its jurisdiction of incorporation or organization, as the case may
be, and maintain all requisite authority to conduct its business in each
jurisdiction in which its business is conducted, except where the failure to do
so could not reasonably be expected to cause or result in the occurrence of a
Material Adverse Effect.
6.5. Taxes. The Borrower will, and will cause each Subsidiary to,
timely file complete and correct United States federal and applicable foreign,
state and local tax returns required by law and pay when due all taxes,
assessments and governmental charges and levies upon it or its income, profits
or Property, except those which are being contested in good faith by appropriate
proceedings and with respect to which adequate reserves have been set aside in
accordance with Agreement Accounting Principles.
6.6. Insurance. The Borrower will, and will cause each Subsidiary
to, maintain with financially sound and reputable insurance companies insurance
on all their Property in such amounts, subject to such deductibles and
self-insurance retentions, and covering such risks as is consistent with sound
business practice and as is reasonably satisfactory to the Agent. The Agent
confirms that the Borrower's and its Subsidiaries' insurance on the Closing Date
is reasonably satisfactory to the Agent. The Borrower will furnish to the Agent
(for distribution to any Lender) upon request full information as to the
insurance carried. The Borrower shall deliver to the Agent lender's loss payable
endorsements in form and substance acceptable to the Agent to all insurance
policies providing coverage for the Collateral. In the event the Borrower or any
of its Subsidiaries at any time or times hereafter shall fail to obtain or
maintain any of the policies or insurance required herein or to pay any premium
in whole or in part relating thereto, then the Agent, without waiving or
releasing any obligations or resulting Default hereunder, may at any time or
times thereafter (but shall be under no obligation to do so) obtain and maintain
such policies of insurance and pay such premiums and take any other action with
respect thereto
61
which the Agent deems advisable. All sums so disbursed by the Agent shall
constitute part of the Obligations, payable as provided in this Agreement. Each
such policy maintained by the Borrower or a Subsidiary shall be subject to a
provision that prevents the cancellation thereof without thirty days' prior
written notice to the Borrower or the applicable Subsidiary, and the Agent.
6.7. Compliance with Laws. The Borrower will, and will cause each
Subsidiary to, comply with all laws, rules, regulations, orders, writs,
judgments, injunctions, decrees or awards to which it may be subject including,
without limitation, (i) Section 302 and Section 906 of the Xxxxxxxx-Xxxxx Act of
2002, and (ii) except where the failure to do so could not reasonably be
expected to cause or result in the occurrence of a Material Adverse Effect, all
Environmental Laws.
6.8. Maintenance of Properties. Subject to Section 6.12, the
Borrower will, and will cause each Subsidiary to, do all things necessary to
maintain, preserve, protect and keep its Property used in the operation of its
business in good repair, working order and condition, (ordinary wear and tear
excepted), and make all necessary and proper repairs, renewals and replacements
so that its business carried on in connection therewith may be properly
conducted at all times in the ordinary course; provided, however, that the
foregoing shall not prohibit, limit or impair the Borrower's or any Subsidiary's
ability to sell or discontinue the use of, in its reasonable business judgment,
any Property.
6.9. Inspection; Keeping of Books and Records. The Borrower will,
and will cause each Subsidiary to, permit the Agent, by its respective
representatives and agents, to inspect any of the Property, books and financial
records of the Borrower and each Subsidiary, to examine and make copies of the
books of accounts and other financial records of the Borrower and each
Subsidiary, and to discuss the affairs, finances and accounts of the Borrower
and each Subsidiary with, and to be advised as to the same by, their respective
officers at such reasonable times and intervals as the Agent may designate. The
Borrower shall keep and maintain, and cause each of its Subsidiaries to keep and
maintain, in all material respects, proper books of record and account in which
entries in conformity with Agreement Accounting Principles shall be made of all
dealings and transactions in relation to their respective businesses and
activities. If a Default has occurred and is continuing, the Borrower, upon the
Agent's request, shall turn over copies of any such records to the Agent or its
representatives. The Agent agrees that it shall conduct any such inspection or
examination in reasonable accordance with the Borrower's and its Subsidiaries'
safety policies and procedures and shall not materially interfere with or impair
the Borrower's or its Subsidiaries' operations. Without limiting the foregoing,
the Agent shall have the right to enter the Borrower's or any Subsidiary's
premises for any of the purposes described on the Closing Date in Section 11.04
of the Senior Note Indenture and Section 10.04 of the Senior Term Loan
Agreement.
6.10. Restricted Payments. The Borrower will not, nor will it permit
any Subsidiary to, declare or pay any dividend or make any distribution on its
capital stock (other than dividends or other distributions payable in its own
capital stock) or redeem, repurchase or otherwise acquire or retire any of its
capital stock at any time outstanding (any of the foregoing, a "Restricted
Payment"), except that (x) any Subsidiary may declare and pay dividends or make
distributions to the Borrower or any Subsidiary Guarantor, and (y) so long as,
on a pro forma basis, both
62
immediately before and immediately after the making of such Restricted Payment,
(i) no Default or Unmatured Default exists, (ii) the "Fixed Charge Coverage
Ratio" as calculated in Section 6.21 on a rolling four quarter basis equals or
exceeds 1.10 to 1.00, and (iii) in any calendar year, the aggregate amount of
such Restricted Payments does not exceed $30,000,000, then the Borrower and its
Subsidiaries may make Restricted Payments.
6.11. Merger. The Borrower will not, nor will it permit any
Subsidiary to, merge or consolidate with or into any other Person, except that a
Subsidiary may merge into the Borrower or a Wholly Owned Subsidiary that is
party to the Guaranty.
6.12. Sale of Assets. The Borrower will not, nor will it permit any
Subsidiary to, lease, sell or otherwise dispose of its Property to any other
Person, except:
6.12.1 Sales of inventory in the ordinary course of business.
6.12.2 A disposition of assets by a Subsidiary to the Borrower
or a Subsidiary Guarantor or by the Borrower to a Subsidiary Guarantor.
6.12.3 A disposition of obsolete property, property no longer
used in the business of the Borrower or its Subsidiaries or other
assets in the ordinary course of business of the Borrower or any
Subsidiary.
6.12.4 Sales of Marine Services Assets and Retail Property.
6.12.5 Leases, sales or other dispositions of its Property
that, together with all other Property of the Borrower and its
Subsidiaries previously leased, sold or disposed of (other than
dispositions otherwise permitted by this Section 6.12) as permitted by
this Section during the twelve-month period ending with the month in
which any such lease, sale or other disposition occurs, do not result
in proceeds (including non-cash proceeds, whether in the form of an
instrument or otherwise) in excess of $30,000,000; provided, however,
that the Borrower and its Subsidiaries may lease, sell, or otherwise
dispose of Property which results in proceeds (including non-cash
proceeds, whether in the form of an instrument or otherwise) in excess
of the aforementioned $30,000,000 limitation if (i) immediately before
and immediately after such lease, sale, or disposition, no Default or
Unmatured Default exists, and (ii) the Borrower or the applicable
Subsidiary demonstrates to the Agent's satisfaction, on a pro forma
basis for the four fiscal quarter period reflected in the compliance
certificate most recently delivered to the Agent pursuant to Section
6.1.4, and without giving effect to the Property to be subject to such
lease, sale or other disposition, that the Borrower's "Fixed Charge
Coverage Ratio" as calculated in Section 6.21 on a rolling four quarter
basis equals or exceeds 1.00 to 1.00.
6.13. Investments and Acquisitions. The Borrower will not, nor will
it permit any Subsidiary to, make or suffer to exist any Investments (including
without limitation, loans and advances to, and other Investments in,
Subsidiaries), or commitments therefor, or to create any Subsidiary or to become
or remain a partner in any partnership or joint venture, or to make any
Acquisition of any Person, except:
6.13.1 Cash Equivalent Investments.
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6.13.2 Existing Investments in Subsidiary Guarantors and other
Investments in existence on the date hereof and described in Schedule
6.13.
6.13.3 Acquisitions meeting the following requirements, or
otherwise approved by the Required Lenders (each such Acquisition
constituting a "Permitted Acquisition"):
(i) as of the date of the consummation of such Acquisition, no
Default or Unmatured Default shall have occurred and be
continuing or would result from such Acquisition, and the
representation and warranty contained in Section 5.11 shall be
true both before and after giving effect to such Acquisition;
(ii) such Acquisition is consummated on a non-hostile basis
pursuant to a negotiated acquisition agreement approved by the
board of directors or other applicable governing body of the
seller or entity to be acquired, and no material challenge to
such Acquisition (excluding the exercise of appraisal rights)
shall be pending or threatened by any shareholder or director
of the seller or entity to be acquired;
(iii) the business to be acquired in such Acquisition is similar or
related to one or more of the lines of business in which the
Borrower and its Subsidiaries are engaged on the Closing Date;
(iv) as of the date of the consummation of such Acquisition, all
material governmental and corporate approvals required in
connection therewith shall have been obtained;
(v) the Purchase Price for each such Acquisition together with the
Purchase Price of all other Permitted Acquisitions shall not
exceed an amount equal to (a) $50,000,000 during any period of
twelve consecutive months; and (b) $100,000,000 during the
period beginning on the Closing Date and ending on the
Revolving Facility Termination Date; provided, however, the
aggregate Purchase Price for all such Acquisitions may exceed
the aforementioned $50,000,000 and $100,000,000 limitations if
any such excess amount was paid solely with Other Senior
Secured Debt Collateral Proceeds.
(vi) with respect to each Permitted Acquisition, not less than
thirty (30) days prior to the consummation of such Permitted
Acquisition, the Borrower shall have delivered to the Agent a
pro forma consolidated balance sheet, income statement and
cash flow statement of the Borrower and its Subsidiaries (the
"Acquisition Pro Forma"), based on the Borrower's most recent
financial statements delivered pursuant to Section 6.1.1 and
using historical financial statements for the acquired entity
provided by the seller(s) or which shall be complete and shall
fairly present, in all material respects, the financial
condition and results of operations and cash flows of the
Borrower and its Subsidiaries in accordance with Agreement
Accounting Principles, but taking into account such Permitted
Acquisition and the funding of all Credit Extensions in
connection therewith, and such Acquisition Pro Forma shall
reflect that, on a pro forma basis, for the four fiscal
quarter period reflected in the compliance certificate most
recently delivered to the Agent
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pursuant to Section 6.1.4 prior to the consummation of such
Permitted Acquisition (giving effect to such Permitted
Acquisition and all Credit Extensions funded in connection
therewith as if made on the first day of such period), the
Borrower's "Fixed Charge Coverage Ratio" as calculated in
Section 6.21 on a rolling four quarter basis is equal to or
greater than 1.10 to 1.00 and that Excess Availability equals
or exceeds 25% of the Borrowing Base then in effect; and
(vii) prior to each such Permitted Acquisition, the Borrower shall
deliver to the Agent a documentation, information and
certification package in form and substance acceptable to the
Agent, including, without limitation;
(A) all of the Collateral Documents necessary for the
perfection of a first priority security interest in
all of the assets to be acquired that constitute or
qualify as Collateral, including, without limitation,
Petroleum Inventory, Receivables and related cash or
cash equivalents, instruments, general intangibles
and intercompany Indebtedness;
(B) a supplement to the Guaranty if the Permitted
Acquisition is an Acquisition of equities and the
target company will not be merged with the Borrower
or any existing Subsidiary Guarantor;
(C) financial information for the target entity in form
and substance reasonably acceptable to the Agent;
(D) a copy of the acquisition agreement for such
Acquisition, together with drafts of the material
schedules thereto;
(E) a copy of all documents, instruments and agreements
with respect to any Indebtedness to be incurred or
assumed in connection with such Acquisition; and
(F) such other documents or information as shall be
reasonably requested by any Agent or any Lender.
6.14. Indebtedness. The Borrower will not, nor will it permit any
Subsidiary to, create, incur or suffer to exist any Indebtedness, except:
6.14.1 The Obligations and the Other Senior Secured Debt so
long as the aggregate principal amount of the Other Senior Secured Debt
does not at any time exceed $575,000,000.
6.14.2 Indebtedness existing on the date hereof and described
in Schedule 6.14.
6.14.3 Indebtedness arising under Rate Management
Transactions;
6.14.4 Purchase money Indebtedness, whether secured or
unsecured (including Capitalized Leases), incurred by the Borrower or
any of its Subsidiaries after the Closing Date to finance the
acquisition of assets used in its business, if (1) at the time of such
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incurrence, no Default or Unmatured Default has occurred and is
continuing or would result from such incurrence, (2) such Indebtedness
does not exceed the lower of the fair market value or the cost of the
applicable assets on the date acquired, (3) such Indebtedness does not
exceed the lower of the fair market value or the costs of the
applicable assets on the date acquired, (4) such Indebtedness does not
exceed $100,000,000 in the aggregate outstanding at any time, and (5)
any Lien securing such Indebtedness is permitted under Section 6.15
(such Indebtedness being referred to herein as "Permitted Purchase
Money Indebtedness").
6.14.5 Indebtedness arising from intercompany loans and
advances (i) made by any Subsidiary to the Borrower or any Subsidiary
Guarantor, (ii) made by the Borrower to any Subsidiary Guarantor, or
(iii) made by the Borrower to any Excluded Subsidiary or Wholly-Owned
Subsidiary not constituting a Subsidiary Guarantor in an aggregate
principal amount in Dollars not to exceed $10,000,000 at any time for
all such Indebtedness; provided that all such Indebtedness shall be
expressly subordinated to the Secured Obligations.
6.15. Liens; Negative Pledge. The Borrower will not, nor will it
permit any Subsidiary to, create, incur, or suffer to exist any Lien in, of or
on the Property of the Borrower or any of its Subsidiaries, except for the
following, which are permitted hereunder:
6.15.1 Liens, if any, securing (x) Secured Obligations, and
(y) Other Senior Secured Debt permitted under Section 6.14.1.
6.15.2 Liens for taxes, assessments or governmental charges or
levies on its Property if the same shall not at the time be delinquent
or thereafter can be paid without penalty, or are being contested in
good faith and by appropriate proceedings and for which adequate
reserves in accordance with Agreement Accounting Principles shall have
been set aside on its books.
6.15.3 Liens for landlords', wage earners', carriers',
warehousemen's and mechanics' liens and other similar liens arising in
the ordinary course of business which secure payment of obligations not
more than 45 days past due or which are being contested in good faith
by appropriate proceedings and for which adequate reserves in
accordance with Agreement Accounting Principles shall have been set
aside on its books.
6.15.4 Liens arising out of pledges or deposits under worker's
compensation laws, unemployment insurance, old age pensions, or other
social security or retirement benefits, or similar legislation.
6.15.5 Liens existing on the date hereof and described in
Schedule 6.15.
6.15.6 Deposits securing liability to insurance carriers under
insurance or self-insurance arrangements.
6.15.7 Deposits to secure the performance of bids, trade
contracts (other than for borrowed money), leases, statutory
obligations, surety and appeal bonds, performance bonds and other
obligations of a like nature incurred in the ordinary course of
business.
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6.15.8 Easements, reservations, rights-of-way, restrictions,
survey exceptions and other similar encumbrances as to real property of
the Borrower and its Subsidiaries which customarily exist on properties
of corporations engaged in similar activities and similarly situated
and which do not materially interfere with the conduct of the business
of the Borrower or such Subsidiary conducted at the property subject
thereto.
6.15.9 Liens arising by reason of any judgment, decree or
order of any court or other governmental authority, if appropriate
legal proceedings are being diligently prosecuted and shall not have
been finally terminated or the period within which such proceedings may
be initiated shall not have expired, in an aggregate amount not to at
any time exceed $15,000,000.
6.15.10 Liens existing on any asset of any Subsidiary of the
Borrower at the time such Subsidiary becomes a Subsidiary and not
created in contemplation of such event.
6.15.11 Liens on any asset securing Indebtedness incurred or
assumed for the purpose of financing or refinancing all or any part of
the cost of acquiring or constructing such asset; provided that such
Lien attaches to such asset concurrently with or within eighteen (18)
months after the acquisition or completion or construction thereof.
6.15.12 Liens existing on any asset of any Subsidiary of the
Borrower at the time such Subsidiary is merged or consolidated with or
into the Borrower or any Subsidiary and not created in contemplation of
such event.
6.15.13 Liens existing on any asset prior to the acquisition
thereof by the Borrower or any Subsidiary and not created in
contemplation thereof; provided that such Liens do not encumber any
other property or assets.
6.15.14 Liens arising out of the refinancing, extension,
renewal or refunding of any Indebtedness secured by any Lien permitted
under Sections 6.15.11 through 6.15.14; provided that (a) such
Indebtedness is not secured by any additional assets, and (b) the
amount of such Indebtedness secured by any such Lien is not increased.
6.15.15 Purchase money Liens securing Permitted Purchase Money
Indebtedness (as defined in Section 6.14); provided, that such Liens
shall not apply to any property of the Borrower or its Subsidiaries
other than that purchased with the proceeds of such Permitted Purchase
Money Indebtedness.
6.15.16 any Lien securing Indebtedness, neither assumed nor
guaranteed by the Borrower or any of its Subsidiaries nor on which it
customarily pays interest, existing upon real estate or rights in or
relating to real estate acquired by the Borrower for substation,
metering station, pump station, storage, gathering line, transmission
line, transportation line, distribution line or for right-of-way
purposes, any Liens reserved in leases for rent and for compliance with
the terms of the leases in the case of leasehold estates, to the extent
that any such Lien referred to in this Section 6.15.16 does not
materially impair the use of the Property covered by such Lien for the
purposes of which such Property is held by the Borrower or any of its
Subsidiaries.
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6.15.17 Liens arising under ERISA provided that such Liens do
not secure liabilities which, in the aggregate, equal or exceed
$5,000,000.
6.15.18 any obligations or duties affecting any of the
Property of the Borrower or its Subsidiaries to any municipality or
public authority with respect to any franchise, grant, license or
permit which do not materially impair the use of such Property for the
purposes for which it is held.
6.15.19 defects, irregularities and deficiencies in title of
any rights of way or other Property constituting real estate of the
Borrower or any Subsidiary thereof which in the aggregate do not
materially impair the use of such rights of way or other Property
constituting real estate for the purposes for which such rights of way
and other Property constituting real estate are held by the Borrower or
any Subsidiary, and defects, irregularities and deficiencies in title
to any Property constituting real estate of the Borrower or its
Subsidiaries, which defects, irregularities or deficiencies have been
cured by possession under applicable statues of limitation.
6.15.20 any interest or title of a lessor under any lease
entered into by the Borrower or any other Subsidiary in the ordinary
course of its business and covering only the assets so leased.
6.15.21 Liens in favor of collecting or payor banks having a
right of setoff, revocation, refund or chargeback with respect to money
or instruments of the Borrower or any of its Subsidiaries on deposit
with or in possession of such bank.
6.15.22 Liens upon Marine Services Assets not constituting
Collateral and Liens upon Retail Property not constituting Collateral.
6.15.23 Liens in favor of counterparties arising in connection
with the Borrower's or any Subsidiary's commodity hedging activities,
including, without limitation, hydrocarbon hedging.
Notwithstanding the foregoing or anything to the contrary contained in any Loan
Document, neither the Borrower nor any Subsidiary shall pledge, encumber or
otherwise xxxxx x Xxxx to any Person upon any equity interest held by the
Borrower or such Subsidiary in any other Subsidiary or an Affiliate of the
Borrower or such Subsidiary, except for equity interests in the Pipeline
Subsidiaries granted by the Borrower to the Multiparty Collateral Agent in order
to secure Other Senior Secured Debt.
6.16. Affiliates. The Borrower will not, and will not permit any
Subsidiary to, enter into any transaction (including, without limitation, the
purchase or sale of any Property or service) with, or make any payment or
transfer to, any Affiliate (other than the Borrower and its Subsidiaries) except
in the ordinary course of business and pursuant to the reasonable requirements
of the Borrower's or such Subsidiary's business and upon fair and reasonable
terms no less favorable to the Borrower or such Subsidiary than the Borrower or
such Subsidiary would obtain in a comparable arm's-length transaction.
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6.17. Financial Contracts. The Borrower will not, nor will it permit
any Subsidiary to, enter into or remain liable upon any Rate Management
Transactions except for those entered into in the ordinary course of business
for bona fide hedging purposes and not for speculative purposes.
6.18. Subsidiary Covenants. The Borrower will not, and will not
permit any Subsidiary to, create or otherwise cause to become effective any
consensual encumbrance or restriction of any kind on the ability of any
Subsidiary (i) to pay dividends or make any other distribution on its stock,
(ii) to pay any Indebtedness or other obligation owed to the Borrower or any
other Subsidiary, (iii) to make loans or advances or other Investments in the
Borrower or any other Subsidiary, or (iv) to sell, transfer or otherwise convey
any of its property to the Borrower or any other Subsidiary.
6.19. Contingent Obligations. The Borrower will not, nor will it
permit any Subsidiary to, make or suffer to exist any Contingent Obligation
(including, without limitation, any Contingent Obligation with respect to the
obligations of a Subsidiary), except (i) by endorsement of instruments for
deposit or collection in the ordinary course of business, (ii) the Reimbursement
Obligations, (iii) any guaranty of the Secured Obligations, (iv) any guaranty of
Other Senior Secured Debt, and (v) Contingent Obligations arising in connection
with Indebtedness permitted under Section 6.14.
6.20. Amendments to Agreements. The Borrower will not amend, modify
or supplement, or permit any Subsidiary to amend, modify or supplement (or
consent to any amendment, modification or supplement of), any document,
agreement or instrument evidencing the Senior Notes or the Senior Term Loans (or
any replacements, substitutions or renewals thereof), or pursuant to which the
Senior Notes or the Senior Term Loans are issued or extended, where such
amendment, modification or supplement provides for the following or which has
any of the following effects:
(a) increases the overall principal amount of any such
Indebtedness or increases the amount of any single scheduled installment of
principal or interest in excess of amounts otherwise permitted under this
Agreement;
(b) shortens or accelerates the date upon which any
installment of principal or interest becomes due or adds any additional
mandatory redemption provisions;
(c) shortens the final maturity date of such Indebtedness
or otherwise accelerates the amortization schedule with respect to such
Indebtedness;
(d) increases the rate of interest accruing on such
Indebtedness;
(e) provides for the payment of additional fees or
increases existing fees;
(f) amends or modifies any financial or negative covenant
(or covenant which prohibits or restricts the Borrower or any of its
Subsidiaries from taking certain actions) in a manner which is more onerous or
more restrictive in any material respect to the Borrower or such Subsidiary or
which is otherwise materially adverse to the Borrower, its Subsidiaries and/or
the Lenders or, in the case of adding covenants, which places material
additional restrictions on
69
the Borrower or such Subsidiary or which requires the Borrower or such
Subsidiary to comply with more restrictive financial ratios or which requires
the Borrower to better its financial performance from that set forth in the
existing financial covenants (taking into account the aggregate adjustments, if
any, to the thresholds and exceptions applicable thereto on a covenant by
covenant basis);
(g) results in this Agreement, the other Loan Documents,
and the credit facilities evidenced hereby, not constituting a "Qualified Credit
Facility" under the Senior Note Indenture or the Senior Term Loan Agreement; or
(h) amends, modifies or adds any affirmative covenant in
a manner which, when taken as a whole, is materially adverse to the Borrower,
its Subsidiaries and/or the Lenders.
6.21. Fixed Charge Coverage Ratio. The Borrower, as of the end of
the following fiscal quarters, will not permit the ratio of (x) Consolidated
EBITDA, minus expenses for cash federal income taxes paid, minus Net
Consolidated Capital Expenditures, minus Restricted Payments, to (y) Fixed
Charges, all calculated for the Borrower and its Subsidiaries, on a consolidated
basis, and without duplication with respect to Capitalized Leases, to be less
than (i) for the fiscal quarter ending June 30, 2003, with compliance for such
fiscal quarter based upon the two then most-recently ended fiscal quarters, 0.90
to 1.00, (ii) for the fiscal quarter ending September 30, 2003, with compliance
for such fiscal quarter based upon the three then most-recently ended fiscal
quarters, 0.95 to 1.00, and (iii) for each fiscal quarter thereafter, beginning
with the fiscal quarter ending December 31, 2003, with compliance for each such
fiscal quarter based upon the four then most-recently ended fiscal quarters,
1.00 to 1.00; provided, however, that the aforementioned ratio may be less than
1.00 to 1.00 for any fiscal quarter referenced in clause (iii) that occurs after
the quarter ending December 31, 2003 if Excess Availability at the end of such
fiscal quarter exceeds 15% of the Borrowing Base then in effect.
6.22. Minimum Consolidated Tangible Net Worth. The Borrower will at
all times maintain Consolidated Tangible Net Worth of not less than (i)
$500,000,000, plus (ii) 75% of Consolidated Net Income (if positive) earned in
each fiscal quarter beginning with the fiscal quarter ending June 30, 2003, plus
(iii) 75% of the amount of all Net Cash Proceeds resulting from any issuance of
the Borrower's or any Subsidiary's capital stock.
6.23. Subsidiary Collateral Documents; Subsidiary Guarantors. The
Borrower shall execute or shall cause to be executed:
(i) on the date any Person that is organized under the laws of the
United States or any political subdivision thereof becomes a Subsidiary
of the Borrower, (a) a supplement to the Guaranty pursuant to which
such Person shall become a party thereto; provided, that such Person
shall not guaranty any of its own obligations owing to the Holders of
Secured Obligations or Secured Obligations that arose prior to its
becoming a party to the Guaranty, (b) a Security Agreement in
substantially the form executed on April 17, 2003 (or a supplement
thereto); and (c) a supplement to Schedule 5.8 identifying the
applicable additional new Subsidiary Guarantor;
70
(ii) in order to further effect the requirements of this Section 6.23,
the Borrower shall deliver or cause to be delivered to the Agent all
Collateral Documents, together with appropriate corporate resolutions
and other documentation (including opinions, UCC financing statements,
and such other documents as shall be reasonably requested to perfect
the Agent's Lien), in each case in form and substance reasonably
satisfactory to the Agent, necessary to reasonably satisfy the Agent
that it has a first priority perfected pledge of, security interest in
and Lien upon the Collateral owned by such new Subsidiary Guarantor.
(iii) The Borrower shall cause each Subsidiary Guarantor to acknowledge
and agree that such Subsidiary Guarantor's entry into the Guaranty is a
condition to and is given as an inducement for and in consideration of
credit accommodations extended to the Borrower under this Agreement and
the other Loan Documents and not for any credit accommodation extended
to such Subsidiary Guarantor.
(iv) This Section 6.23 shall not apply with respect to Excluded
Subsidiaries, including, without limitation, Pipeline Subsidiaries.
6.24. Insurance and Condemnation Proceeds. The Borrower directs
(and, if applicable, shall cause its Subsidiaries to direct) all insurers under
policies relating to Property constituting Collateral to pay all proceeds
payable under such policies or with respect to such claim or award for any loss
with respect to the Collateral directly to the Agent, for the benefit of the
Agent and the Holders of the Secured Obligations; provided, however, in the
event that such proceeds or awards are less than $1,000,000 ("Excluded
Proceeds"), unless a Default shall have occurred and be continuing, the Agent
shall remit such Excluded Proceeds to the Borrower. Such amounts shall reduce
outstanding principal Obligations pursuant to the mandatory prepayment provision
of Section 2.2. Each such policy shall contain a long-form loss-payable
endorsement naming the Agent as loss payee, which endorsement shall be in form
and substance acceptable to the Agent.
6.25. Collection Accounts. The Borrower and its Subsidiaries shall
cause the majority of their deposit, collection and other cash management
accounts to be maintained with Bank One, NA or an Affiliate thereof. The
Borrower and its Subsidiaries shall cause all collections of Receivables
constituting Collateral and all proceeds of Collateral to be directly deposited
into collection accounts (such accounts, "Collection Accounts") subject to
account control agreements, in form and substance acceptable to the Agent, which
grant the Agent control over and a first-priority perfected security interest in
such collection accounts, including, without limitation, amounts and other items
on deposit therein. Amounts and other items on deposit in Collection Accounts
that are not maintained with Bank One, NA or an Affiliate thereof shall be
transferred at least once a week to one or more Collection Accounts maintained
with Bank One, NA or an Affiliate thereof. If any collections are received by
the Borrower, a Subsidiary, or any other Person, such collections shall be
deemed to have been received by the Borrower, such Subsidiary or such other
Person in trust for the Agent, and, upon the Borrower's, such Subsidiary's, or
such other Person's receipt thereof, the Borrower shall (or shall cause such
Subsidiary or other Person) to immediately remit all of such collections, in
their original form, to the Agent, Bank One or an Affiliate thereof for deposit
into a Collection Account. Following the occurrence and during the continuance
of a Default, all amounts received by the Agent, all amounts on deposit in the
Collection Accounts, and all amounts constituting collections required
71
to be deposited into Collection Accounts shall be the sole property of the Agent
for the benefit of the Holders of Secured Obligations and shall be deemed
received by the Agent for application to the Secured Obligations pursuant to the
terms of this Agreement. With respect to any Collection Account described in
this Section 6.25, the Borrower and its Subsidiaries shall have 90 days from the
later of the Closing Date and the date on which such Collection Account is
opened or converted to cause such account to become subject to one of the
aforementioned account control agreements.
6.26. Subordinated Indebtedness. The Borrower will not, and will not
permit any Subsidiary to, make any amendment or modification to any indenture,
note agreement or other agreement, document or instrument evidencing or
governing Subordinated Indebtedness, or directly or indirectly voluntarily
prepay, defease, or in substance defease, purchase, redeem, retire or otherwise
acquire, any Subordinated Indebtedness; provided, however, that the Borrower or
any such Subsidiary may make a prepayment of Subordinated Indebtedness if,
immediately before and after such prepayment (i) no Default or Unmatured Default
exists, (ii) no Revolving Loans are outstanding, (iii) Excess Availability
equals or exceeds 25% of the Borrowing Base then in effect, and (iv) the "Fixed
Charge Coverage Ratio" as calculated in Section 6.21 on a rolling four quarter
basis equals or exceeds 1.10 to 1.00. Notwithstanding the foregoing, or anything
else to the contrary set forth in this Agreement, the Borrower's one-time
principal prepayment of Subordinated Indebtedness on April 17, 2003 in an amount
that did not exceed $25,000,000 was not prohibited under the Prior Credit
Agreement or the credit agreement amended and restated thereby and is therefore
not prohibited hereunder.
6.27. Multiemployer Plans. The Borrower will not, nor will it permit
any Subsidiary to, become a party to a Multiemployer Plan.
6.28. Consolidated Capital Expenditures. At any time Non-Lender
Asset Sale Proceeds are on deposit in accounts subject to the Multiparty
Collateral Agent's control, including, without limitation, any "Asset Sale
Proceeds Account" described in the Senior Note Indenture and the Senior Term
Loan Agreement, the Borrower shall, and shall cause each Subsidiary to, fund all
Consolidated Capital Expenditures with respect to Property constituting or
required to constitute collateral securing Other Senior Secured Debt under the
Senior Note Indenture and the Senior Term Loan Agreement and otherwise permitted
hereunder with such Non-Lender Asset Sale Proceeds prior to using any other
amounts to fund such Consolidated Capital Expenditures.
6.29. Other Permitted Availability. The Borrower shall not incur
Indebtedness under clause (xii) of the definition of "Permitted Debt" set forth
in the Senior Note Indenture (or any comparable provision of the Senior Note
Indenture which from time to time may replace or modify such clause but which
has the same intended effect thereof) in an aggregate principal amount in excess
of the amount which is $10,000,000 less than the maximum amount of Indebtedness
permitted under such clause (xii) (or any replacement or modification thereof as
described above). The Borrower, subsequent to the Closing Date, also shall not
incur Indebtedness under (a) clause (xiii) of the definition of "Permitted Debt"
set forth in the indenture referred to in clause (i) of Section 9.18, (b) clause
(xii) of the definition of "Permitted Debt" set forth in the indenture referred
to in clause (ii) of Section 9.18, or (c) clause (xii) of the definition of
"Permitted Debt" set forth in the indenture referred to in clause (iii) of
Section 9.18 (in each case together with any other comparable provision of each
such indenture which from
72
time to time may replace or modify the applicable clause set forth therein but
which has the same intended effect thereof) in an aggregate principal amount in
excess of the amount which is $10,000,000 less than the maximum amount of
Indebtedness permitted under such applicable clause set forth in the applicable
definition of "Permitted Debt" (or any replacement or modification thereof as
described above).
ARTICLE VII
DEFAULTS
The occurrence of any one or more of the following events shall
constitute a Default:
7.1. Any representation or warranty made or deemed made by or on
behalf of the Borrower or any of its Subsidiaries to the Lenders or the Agent
under or in connection with this Agreement, any Credit Extension, or any
certificate or information delivered in connection with this Agreement or any
other Loan Document shall be false in any material respect on the date as of
which made or deemed made.
7.2. Nonpayment of (i) principal of any Loan when due, (ii) any
Reimbursement Obligation within one Business Day after the same becomes due, or
(iii) interest upon any Loan or any Commitment Fee, LC Fee or other Obligations
under any of the Loan Documents within one (1) Business Day after such interest,
fee or other Obligation becomes due.
7.3. The breach by the Borrower of any of the terms or provisions
of Section 6.1.9 (solely with respect to the Interim Collateral Reports
described therein), 6.1.11, 6.2, 6.3, 6.4, 6.6, 6.7, 6.9, 6.10, 6.11, 6.12,
6.13, 6.14, 6.15, 6.16, 6.17, 6.18, 6.19, 6.20, 6.21, 6.22, 6.23, 6.24, 6.25,
6.26, 6.27, 6.28, and 6.29.
7.4. The breach by the Borrower (other than a breach which
constitutes a Default under another Section of this Article VII) of (x) 6.1.1,
6.1.2, 6.1.3, 6.1.4, 6.1.6, 6.1.7, 6.1.9 (solely with respect to the Monthly
Collateral Reports described therein), 6.1.10, or 6.1.12 and such breach is not
remedied within five (5) Business Days of the earlier to occur of (i) written
notice from the Agent or any Lender to the Borrower or (ii) an Authorized
Officer otherwise becomes aware of any such breach, and (y) any of the other
terms or provisions of this Agreement or any Loan Document which is not remedied
within twenty (20) Business Days after the earlier to occur of (i) written
notice from the Agent or any Lender to the Borrower or (ii) an Authorized
Officer otherwise becomes aware of any such breach.
7.5. Failure of the Borrower or any of its Subsidiaries to pay when
due any Material Indebtedness; or the default by the Borrower or any of its
Subsidiaries in the performance (beyond the applicable grace period with respect
thereto, if any) of any term, provision or condition contained in any Material
Indebtedness Agreement, or any other event shall occur or condition exist, the
effect of which default, event or condition is to cause, or to permit the
holder(s) of such Material Indebtedness or the lender(s) under any Material
Indebtedness Agreement to cause, such Material Indebtedness to become due prior
to its stated maturity or any commitment to lend under any Material Indebtedness
Agreement to be terminated prior to its stated expiration date; or any Material
Indebtedness of the Borrower or any of its Subsidiaries
73
shall be declared to be due and payable or required to be prepaid or repurchased
(other than by a regularly scheduled payment) prior to the stated maturity
thereof; or the Borrower or any of its Subsidiaries shall not pay, or admit in
writing its inability to pay, its debts generally as they become due.
7.6. The Borrower or any of its Subsidiaries shall (i) have an
order for relief entered with respect to it under the Federal bankruptcy laws as
now or hereafter in effect, (ii) make an assignment for the benefit of
creditors, (iii) apply for, seek, consent to, or acquiesce in, the appointment
of a receiver, custodian, trustee, examiner, liquidator or similar official for
it or any Substantial Portion of its Property, (iv) institute any proceeding
seeking an order for relief under the Federal bankruptcy laws as now or
hereafter in effect or seeking to adjudicate it a bankrupt or insolvent, or
seeking dissolution, winding up, liquidation, reorganization, arrangement,
adjustment or composition of it or its debts under any law relating to
bankruptcy, insolvency or reorganization or relief of debtors or fail to file an
answer or other pleading denying the material allegations of any such proceeding
filed against it, (v) take any corporate or partnership action to authorize or
effect any of the foregoing actions set forth in this Section 7.6 or (vi) fail
to contest in good faith any appointment or proceeding described in Section 7.7.
7.7. Without the application, approval or consent of the Borrower
or any of its Subsidiaries, a receiver, trustee, examiner, liquidator or similar
official shall be appointed for the Borrower or any of its Subsidiaries or any
Substantial Portion of its Property, or a proceeding described in Section
7.6(iv) shall be instituted against the Borrower or any of its Subsidiaries and
such appointment continues undischarged or such proceeding continues undismissed
or unstayed for a period of 45 consecutive days.
7.8. Any court, government or governmental agency shall condemn,
seize or otherwise appropriate, or take custody or control of, all or any
portion of the Property of the Borrower and its Subsidiaries which, when taken
together with all other Property of the Borrower and its Subsidiaries so
condemned, seized, appropriated, or taken custody or control of, during the
twelve-month period ending with the month in which any such action occurs,
constitutes a Substantial Portion.
7.9. The Borrower or any of its Subsidiaries shall fail within 30
days to pay, bond or otherwise discharge one or more (i) judgments or orders for
the payment of money in excess of $15,000,000 (or the equivalent thereof in
currencies other than Dollars) in the aggregate, or (ii) nonmonetary judgments
or orders which, individually or in the aggregate, could reasonably be expected
to have a Material Adverse Effect, which judgment(s), in any such case, is/are
not stayed on appeal or otherwise being appropriately contested in good faith.
7.10. The Unfunded Liabilities of all Single Employer Plans shall
exceed $75,000,000 in the aggregate, or any Reportable Event shall occur in
connection with any Plan.
7.11. Any Change in Control shall occur.
7.12. The Borrower or any of its Subsidiaries shall (i) be the
subject of any proceeding or investigation pertaining to the release by the
Borrower, any of its Subsidiaries or any other Person of any toxic or hazardous
waste or substance into the environment, or (ii) violate any
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Environmental Law, which, in the case of an event described in clause (i) or
clause (ii), has resulted in liability to the Borrower or any of its
Subsidiaries in an amount equal to $30,000,000 or more, which liability is not
paid, bonded, covered in its entirety by an insurance policy provided to the
Borrower or the applicable Subsidiary by a non-Affiliate, or otherwise
discharged within 45 days or which is not stayed on appeal and being
appropriately contested in good faith.
7.13. Any Loan Document shall fail to remain in full force or effect
or any action shall be taken to discontinue or to assert the invalidity or
unenforceability of any Loan Document or any Lien in favor of the Agent under
the Loan Documents, or such Lien shall not have the priority contemplated by the
Loan Documents.
7.14. An event (such event, an "Off-Balance Sheet Trigger Event")
shall occur which (i) permits the investors or purchasers in respect of
Off-Balance Sheet Liabilities of the Borrower or any Affiliate of the Borrower
to require the amortization or liquidation of such Off-Balance Sheet Liabilities
and (x) such Off-Balance Sheet Trigger Event shall not be remedied or waived
within the later to occur of the tenth day after the occurrence thereof or the
expiry date of any grace period related thereto under the agreement evidencing
such Off-Balance Sheet Liabilities, or (y) such investors shall require the
amortization or liquidation of such Off-Balance Sheet Liabilities as a result of
such Off-Balance Sheet Trigger Event, (ii) results in the termination of
reinvestments of collections or proceeds of receivables and related assets under
the agreements evidencing such Off-Balance Sheet Liabilities, or (iii) causes or
otherwise permits the replacement or substitution of the Borrower or any
Affiliate thereof as the servicer under the agreements evidencing such
Off-Balance Sheet Liabilities; provided, however, that this Section 7.14 shall
not apply on any date with respect to any voluntary request by the Borrower or
an Affiliate thereof for an above-described amortization, liquidation, or
termination of reinvestments so long as the aforementioned investors or
purchasers cannot independently require on such date such amortization,
liquidation or termination of reinvestments.
ARTICLE VIII
ACCELERATION, WAIVERS, AMENDMENTS AND REMEDIES
8.0. Acceleration. (i) If any Default described in Section 7.6 or
7.7 occurs with respect to the Borrower, the obligations of the Lenders to make
Loans hereunder and the obligation and power of the LC Issuers to issue Facility
LCs shall automatically terminate and the Secured Obligations shall immediately
become due and payable without any election or action on the part of the Agent,
any LC Issuer or any Lender, and the Borrower will be and become thereby
unconditionally obligated, without any further notice, act or demand, to pay the
Agent an amount in immediately available funds, which funds shall be held in the
Facility LC Collateral Account, equal to the difference of (x) the amount of LC
Obligations at such time less (y) the amount or deposit in the Facility LC
Collateral Account at such time which is free and clear of all rights and claims
of third parties and has not been applied against the Obligations (the
"Collateral Shortfall Amount"). If any other Default occurs, the Required
Lenders (or the Agent with the consent of the Required Lenders) may (a)
terminate or suspend the obligations of the Lenders to make Loans hereunder and
the obligation and power of the LC Issuers to issue Facility LCs, or declare the
Secured Obligations to be due and payable, or both, whereupon the Secured
Obligations shall
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become immediately due and payable, without presentment, demand, protest or
notice of any kind, all of which the Borrower hereby expressly waives and (b)
upon notice to the Borrower and in addition to the continuing right to demand
payment of all amounts payable under this Agreement, make demand on the Borrower
to pay, and the Borrower will forthwith upon such demand and without any further
notice or act pay to the Agent the Collateral Shortfall Amount which funds shall
be deposited in the Facility LC Collateral Account.
(i) If at any time while any Default is continuing, the Agent
determines that the Collateral Shortfall Amount at such time is greater than
zero, the Agent may make demand on the Borrower to pay, and the Borrower will,
forthwith upon such demand and without any further notice or act, pay to the
Agent the Collateral Shortfall Amount, which funds shall be deposited in the
Facility LC Collateral Account.
(ii) The Agent may at any time or from time to time after funds are
deposited in the Facility LC Collateral Account, apply such funds to the payment
of the Secured Obligations and any other amounts as shall from time to time have
become due and payable by the Borrower to the Lenders or the LC Issuers under
the Loan Documents.
(iii) At any time while any Default is continuing, neither the
Borrower nor any Person claiming on behalf of or through the Borrower shall have
any right to withdraw any of the funds held in the Facility LC Collateral
Account. After all of the Secured Obligations have been indefeasibly paid in
full and the Aggregate Revolving Loan Commitment has been terminated, any funds
remaining in the Facility LC Collateral Account shall be returned by the Agent
to the Borrower or paid to whomever may be legally entitled thereto at such
time.
(iv) If, after acceleration of the maturity of the Obligations or
termination of the obligations of the Lenders to make Loans and the obligation
and power of the LC Issuers to issue Facility LCs hereunder as a result of any
Default (other than any Default as described in Section 7.6 or 7.7 with respect
to the Borrower) and before any judgment or decree for the payment of the
Obligations due shall have been obtained or entered, the Required Lenders (in
there sole discretion) shall so direct, the Agent shall, by notice to the
Borrower, rescind and annul such acceleration and/or termination.
8.2. Amendments. Subject to the provisions of this Section 8.2, the
Required Lenders (or the Agent with the consent in writing of the Required
Lenders) and the Borrower may enter into agreements supplemental hereto for the
purpose of adding or modifying any provisions to the Loan Documents, including,
without limitation, the Intercreditor Agreement, or changing in any manner the
rights of the Lenders or the Borrower hereunder or thereunder or waiving any
Default hereunder or thereunder; provided, however, that no such supplemental
agreement shall, without the consent of all of the Lenders:
8.2.1 Extend the Revolving Facility Termination Date, extend
the Term Loan Termination Date, extend the final maturity of any Loan
or extend the expiry date of any Facility LC to a date after the
Revolving Facility Termination Date, or postpone any regularly
scheduled payment of principal of any Loan or forgive all or any
portion of the principal amount thereof, or any Reimbursement
Obligation related thereto, or reduce the rate or extend the time of
payment of interest or fees thereon or Reimbursement
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Obligations related thereto (other than (x) a waiver of the application
of the default rate of interest pursuant to Section 2.10 hereof and (y)
any reduction of the amount of or any extension of the payment date for
the mandatory payments required under Section 2.2 (other than Sections
2.2.1 and 2.2.7) , in each case which shall only require the approval
of the Required Lenders).
8.2.2 Reduce the percentage specified in the definition of
Required Lenders or any other percentage of Lenders specified to be the
applicable percentage in this Agreement to act on specified matters or
amend the definitions of "Pro Rata Share" or "Revolving Loan Pro Rata
Share."
8.2.3 Increase the amount of the Revolving Loan Commitment or
the Term Loans of any Lender hereunder or the commitment to issue
Facility LCs, or permit the Borrower to assign its rights or
obligations under this Agreement.
8.2.4 Amend, modify or waive this Section 8.2.
8.2.5 Other than in connection with a transaction permitted
under this Agreement, release in any calendar year Collateral with an
aggregate value equal to or in excess of $10,000,000.
8.2.6 Other than in connection with a transaction permitted
under this Agreement, release any Subsidiary party to the Guaranty from
its obligations thereunder.
8.2.7 Increase the advance rate percentages for Perfected Cash
Interests, Eligible Receivables and Eligible Petroleum Inventory set
forth in the definition of Borrowing Base as of the Closing Date.
8.2.8 Amend, modify or waive Section 11.2, Section 11.3 or any
other provision of this Agreement requiring ratable payments to, or
distributions by, the Lenders.
No amendment of any provision of this Agreement relating to the Agent shall be
effective without the written consent of the Agent. The Agent may waive payment
of the fee required under Section 12.3.3 without obtaining the consent of any
other party to this Agreement. No amendment of any provision of this Agreement
relating to the Non-Ratable Lender or any Non-Ratable Loan shall be effective
without the written consent of the Non-Ratable Lender. No amendment of any
provision of this Agreement relating to an LC Issuer shall be effective without
the written consent of such LC Issuer. The limit set forth in Section 2.1.2 on
the aggregate amount of Collateral Protection Advances that may be outstanding
at any time shall not be increased without the written consent of the Agent and
the Lenders in the aggregate having 75% or more of the sum of (i) the Aggregate
Revolving Loan Commitment and (ii) the aggregate outstanding principal amount of
the Term Loans; provided, however, that if all of the Revolving Loan Commitments
have been terminated, the consent of Lenders holding 75% or more of the
Aggregate Outstanding Credit Exposure shall be required to approve any such
increase.
8.3. Preservation of Rights. No delay or omission of the Lenders,
the LC Issuers or the Agent to exercise any right under the Loan Documents shall
impair such right or be construed to be a waiver of any Default or an
acquiescence therein, and the making of a Credit Extension notwithstanding the
existence of a Default or Unmatured Default or the inability of the Borrower to
satisfy the conditions precedent to such Credit Extension shall not constitute
any waiver or acquiescence. Any single or partial exercise of any such right
shall not preclude other
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or further exercise thereof or the exercise of any other right, and no waiver,
amendment or other variation of the terms, conditions or provisions of the Loan
Documents whatsoever shall be valid unless in writing signed by, or by the Agent
with the consent of, the requisite number of Lenders required pursuant to
Section 8.2, and then only to the extent in such writing specifically set forth.
All remedies contained in the Loan Documents or by law afforded shall be
cumulative and all shall be available to the Agent, the LC Issuers and the
Lenders until all of the Secured Obligations have been paid in full.
ARTICLE IX
GENERAL PROVISIONS
9.1. Survival of Representations. All representations and
warranties of the Borrower contained in this Agreement shall survive the making
of the Credit Extensions herein contemplated.
9.2. Governmental Regulation. Anything contained in this Agreement
to the contrary notwithstanding, neither any LC Issuer nor any Lender shall be
obligated to extend credit to the Borrower in violation of any limitation or
prohibition provided by any applicable statute or regulation.
9.3. Headings. Section headings in the Loan Documents are for
convenience of reference only, and shall not govern the interpretation of any of
the provisions of the Loan Documents.
9.4. Entire Agreement. The Loan Documents embody the entire
agreement and understanding among the Borrower, the Agent, the LC Issuers and
the Lenders and supersede all prior agreements and understandings among the
Borrower, the Agent, the LC Issuers and the Lenders relating to the subject
matter thereof other than those contained in the fee letter described in Section
10.13 which shall survive and remain in full force and effect during the term of
this Agreement.
THIS WRITTEN AGREEMENT REPRESENTS THE FINAL AGREEMENT BETWEEN
THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.
THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
9.5. Several Obligations; Benefits of this Agreement. The
respective obligations of the Lenders hereunder are several and not joint and no
Lender shall be the partner or agent of any other (except to the extent to which
the Agent is authorized to act as such). The failure of any Lender to perform
any of its obligations hereunder shall not relieve any other Lender from any of
its obligations hereunder. This Agreement shall not be construed so as to confer
any right or benefit upon any Person other than the parties to this Agreement
and their respective successors and assigns, provided, however, that the parties
hereto expressly agree that the Arranger shall
78
enjoy the benefits of the provisions of Sections 9.6, 9.10 and 10.11 to the
extent specifically set forth therein and shall have the right to enforce such
provisions on its own behalf and in its own name to the same extent as if it
were a party to this Agreement.
9.6. Expenses; Indemnification. (i) The Borrower shall reimburse
the Agent and the Arranger for any reasonable costs, internal charges and
out-of-pocket expenses (including outside attorneys' and paralegals' fees and
time charges of attorneys for the Agent and expenses of and fees for other
advisors and professionals engaged by the Agent or the Arranger) paid or
incurred by the Agent or the Arranger in connection with the investigation,
preparation, negotiation, documentation, execution, delivery, syndication,
distribution (including, without limitation, via the internet), review,
amendment, modification and administration of the Loan Documents. The Borrower
also agrees to reimburse the Agent, the Arranger, the LC Issuers and the Lenders
for any reasonable costs, internal charges and out-of-pocket expenses (including
outside attorneys' and paralegals' fees and time charges and expenses of
attorneys and paralegals for the Agent, the Arranger, the LC Issuers and the
Lenders) paid or incurred by the Agent, the Arranger, any LC Issuer or any
Lender in connection with the collection and enforcement of the Loan Documents.
In addition to expenses set forth above, the Borrower agrees to reimburse,
without duplication, the Agent and each Co-Agent, promptly after the Agent's or
the applicable Co-Agent's request therefor, for each audit, or other business
analysis performed by or for the benefit of the Holders of Secured Obligations
in connection with this Agreement or the other Loan Documents in an amount equal
to the Agent's or the applicable Co-Agent's then customary charges for each
person employed to perform such audit or analysis (which, solely with respect to
charges for audits of Collateral, shall not exceed a rate of $750 per day for
each Agent and each applicable Co-Agent performing such audit), plus all
reasonable costs and expenses (including without limitation, travel expenses)
incurred by the Agent or the applicable Co-Agent in the performance of such
audit or analysis.
(ii) The Borrower hereby further agrees to indemnify the Agent,
the Arranger, each LC Issuer, each Lender, and their respective affiliates, and
each of their directors, officers and employees against all losses, claims,
damages, penalties, judgments, liabilities and expenses (including, without
limitation, all expenses of litigation or preparation therefor whether or not
the Agent, the Arranger, any LC Issuer, any Lender or any affiliate is a party
thereto, and all attorneys' and paralegals' fees, time charges and expenses of
attorneys and paralegals of the party seeking indemnification, which attorneys
and paralegals may or may not be employees of such party seeking
indemnification) which any of them may pay or incur arising out of or relating
to this Agreement, the other Loan Documents, the transactions contemplated
hereby or the direct or indirect application or proposed application of the
proceeds of any Credit Extension hereunder except to the extent that they have
resulted from the gross negligence or willful misconduct of the party seeking
indemnification. The obligations of the Borrower under this Section 9.6 shall
survive the termination of this Agreement.
9.7. Numbers of Documents. All statements, notices, closing
documents, and requests hereunder shall be furnished to the Agent with
sufficient counterparts so that the Agent may furnish one to each of the
Lenders, to the extent that the Agent deems necessary.
9.8. Accounting. Except as provided to the contrary herein, all
accounting terms used in the calculation of any financial covenant or test shall
be interpreted and all accounting
79
determinations hereunder in the calculation of any financial covenant or test
shall be made in accordance with Agreement Accounting Principles. If any changes
in US GAAP are hereafter required or permitted and are adopted by the Borrower
or any of its Subsidiaries with the agreement of its independent certified
public accountants and such changes result in a change in the method of
calculation of any of the financial covenants, tests, restrictions or standards
herein or in the related definitions or terms used therein ("Accounting
Changes"), the parties hereto agree, at the Borrower's request, to enter into
negotiations, in good faith, in order to amend such provisions in a credit
neutral manner so as to reflect equitably such changes with the desired result
that the criteria for evaluating the Borrower's and its Subsidiaries' financial
condition shall be the same after such changes as if such changes had not been
made; provided, however, until such provisions are amended in a manner
reasonably satisfactory to the Agent and the Required Lenders, no Accounting
Change shall be given effect in such calculations. In the event such amendment
is entered into, all references in this Agreement to Agreement Accounting
Principles shall mean US GAAP as of the date of such amendment. Notwithstanding
the foregoing, all financial statements to be delivered by the Borrower pursuant
to Section 6.1 shall be prepared in accordance with US GAAP in effect at such
time.
9.9. Severability of Provisions. Any provision in any Loan Document
that is held to be inoperative, unenforceable, or invalid in any jurisdiction
shall, as to that jurisdiction, be inoperative, unenforceable, or invalid
without affecting the remaining provisions in that jurisdiction or the
operation, enforceability, or validity of that provision in any other
jurisdiction, and to this end the provisions of all Loan Documents are declared
to be severable.
9.10. Nonliability of Lenders. The relationship between the Borrower
on the one hand and the Lenders, the LC Issuers and the Agent on the other hand
shall be solely that of borrower and lender. Neither the Agent, the Arranger,
any LC Issuer nor any Lender shall have any fiduciary responsibilities to the
Borrower. Neither the Agent, the Arranger, any LC Issuer nor any Lender
undertakes any responsibility to the Borrower to review or inform the Borrower
of any matter in connection with any phase of the Borrower's business or
operations. The Borrower agrees that neither the Agent, the Arranger, any LC
Issuer nor any Lender shall have liability to the Borrower (whether sounding in
tort, contract or otherwise) for losses suffered by the Borrower in connection
with, arising out of, or in any way related to, the transactions contemplated
and the relationship established by the Loan Documents, or any act, omission or
event occurring in connection therewith, unless it is determined in a final
non-appealable judgment by a court of competent jurisdiction that such losses
resulted from the gross negligence or willful misconduct of the party from which
recovery is sought. Neither the Agent, the Arranger, any LC Issuer nor any
Lender shall have any liability with respect to, and the Borrower hereby waives,
releases and agrees not to xxx for, any special, indirect, consequential or
punitive damages suffered by the Borrower in connection with, arising out of, or
in any way related to the Loan Documents or the transactions contemplated
thereby.
9.11. Confidentiality. Each Lender agrees to hold any confidential
information which it may receive from the Borrower pursuant to this Agreement in
confidence, except for disclosure (i) to its Affiliates and to other Lenders and
their respective Affiliates, for use solely in connection with the transactions
contemplated hereby, (ii) to legal counsel, accountants, and other professional
advisors to such Lender or to a Transferee, in each case which have been
informed as to the confidential nature of such information, (iii) to regulatory
officials having
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jurisdiction over it, (iv) to any Person as required by law, regulation, or
legal process, (v) to any Person in connection with any legal proceeding to
which such Lender is a party, (vi) to such Lender's direct or indirect
contractual counterparties in swap agreements or to legal counsel, accountants
and other professional advisors to such counterparties, in each case which have
been informed as to the confidential nature of such information, and (vii)
permitted by Section 12.4. Notwithstanding anything herein to the contrary,
confidential information shall not include, and each Lender (and each employee,
representative, or other agent of any Lender) may disclose to any and all
Persons, without limitation of any kind, the "tax treatment" and "tax structure"
(in each case, within the meaning of Treasury Regulation Section 1.6011-4) of
the transactions contemplated hereby and all materials of any kind (including
opinions or other tax analyses) that are or have been provided to such Lender
relating to such tax treatment or tax structure; provided, that with respect to
any document or similar item that in either case contains information concerning
such tax treatment or tax structure of the transactions contemplated hereby as
well as other information, this sentence shall only apply to such portions of
the document or similar item that relate to such tax treatment or tax structure.
9.12. Lenders Not Utilizing Plan Assets. Each Lender and Designated
Lender represents and warrants that none of the consideration used by such
Lender or Designated Lender to make its Loans constitutes for any purpose of
ERISA or Section 4975 of the Code assets of any "plan" as defined in Section
3(3) of ERISA or Section 4975 of the Code and the rights and interests of such
Lender or Designated Lender in and under the Loan Documents shall not constitute
such "plan assets" under ERISA.
9.13. Nonreliance. Each Lender hereby represents that it is not
relying on or looking to any margin stock (as defined in Regulation U) as
collateral in the extension or maintenance of the credit provided for herein.
9.14. Disclosure. The Borrower and each Lender, including each LC
Issuer, hereby acknowledge and agree that each Lender and/or its Affiliates from
time to time may hold investments in, make other loans to or have other
relationships with the Borrower and its Affiliates.
9.15. Performance of Obligations. The Borrower agrees that the Agent
may, but shall have no obligation to (i) at any time, pay or discharge taxes,
liens, security interests or other encumbrances levied or placed on or
threatened against any Collateral and (ii) after the occurrence and during the
continuance of a Default make any other payment or perform any act required of
the Borrower under any Loan Document or take any other action which the Agent in
its discretion deems necessary or desirable to protect or preserve the
Collateral, including, without limitation, any action to (x) effect any repairs
or obtain any insurance called for by the terms of any of the Loan Documents and
to pay all or any part of the premiums therefor and the costs thereof and (y)
pay any rents payable by the Borrower which are more than 30 days past due, or
as to which the landlord has given notice of termination, under any lease. The
Agent shall use its best efforts to give the Borrower notice of any action taken
under this Section 9.15 prior to the taking of such action or promptly
thereafter provided the failure to give such notice shall not affect the
Borrower's obligations in respect thereof. The Borrower agrees to pay the Agent,
upon demand, the principal amount of all funds advanced by the Agent under this
Section 9.15, together with interest thereon at the rate from time to time
applicable to Floating Rate
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Loans from the date of such advance until the outstanding principal balance
thereof is paid in full. If the Borrower fails to make payment in respect of any
such advance under this Section 9.15 within one (1) Business Day after the date
the Borrower receives written demand therefor from the Agent, the Agent shall
promptly notify each Lender and each Lender agrees that it shall thereupon make
available to the Agent, in Dollars in immediately available funds, the amount
equal to such Lender's Pro Rata Share of such advance. If such funds are not
made available to the Agent by such Lender within one (1) Business Day after the
Agent's demand therefor, the Agent will be entitled to recover any such amount
from such Lender together with interest thereon at the Federal Funds Effective
Rate for each day during the period commencing on the date of such demand and
ending on the date such amount is received. The failure of any Lender to make
available to the Agent its Pro Rata Share of any such unreimbursed advance under
this Section 9.15 shall neither relieve any other Lender of its obligation
hereunder to make available to the Agent such other Lender's Pro Rata Share of
such advance on the date such payment is to be made nor increase the obligation
of any other Lender to make such payment to the Agent. All outstanding principal
of, and interest on, advances made under this Section 9.15 shall constitute
Obligations secured by the Collateral until paid in full by the Borrower.
9.16. Syndication Agent, Co-Documentation Agents, Co-Collateral
Agents, etc. Other than as set forth in Section 2.20 and Section 9.6, no Lender
identified in this Agreement as the Syndication Agent, a Co-Documentation Agent,
a Co-Collateral Agent or any other "co-agent" shall have any right, power,
obligation, liability, responsibility, or duty under any Loan Document other
than those applicable to any Lender as such. Without limiting the foregoing, no
such Lender shall have or be deemed to have a fiduciary relationship with any
Lender.
9.17. Subordination of Intercompany Indebtedness. The Borrower
agrees that any and all claims of the Borrower against any of its Subsidiaries
that is a guarantor with respect to any "Intercompany Indebtedness" (as
hereinafter defined), any endorser, obligor or any other guarantor of all or any
part of the Secured Obligations, or against any of its properties shall be
subordinate and subject in right of payment to the prior payment, in full and in
cash, of all Secured Obligations; provided that, and not in contravention of the
foregoing, so long as no Default has occurred and is continuing the Borrower may
make loans to and receive payments in the ordinary course with respect to such
Intercompany Indebtedness from each such guarantor to the extent permitted by
the terms of this Agreement and the other Loan Documents. Notwithstanding any
right of the Borrower to ask, demand, xxx for, take or receive any payment from
any guarantor, all rights, liens and security interests of the Borrower, whether
now or hereafter arising and howsoever existing, in any assets of any guarantor
shall be and are subordinated to the rights of the Holders of Secured
Obligations in those assets. The Borrower shall not have any right to possession
of any such asset or to foreclose upon any such asset, whether by judicial
action or otherwise, unless and until all of the Secured Obligations (other than
contingent indemnity obligations) shall have been fully paid and satisfied (in
cash) and all financing arrangements pursuant to any Loan Document among the
Borrower and the Holders of Secured Obligations (or any affiliate thereof) have
been terminated. If all or any part of the assets of any guarantor, or the
proceeds thereof, are subject to any distribution, division or application to
the creditors of such guarantor, whether partial or complete, voluntary or
involuntary, and whether by reason of liquidation, bankruptcy, arrangement,
receivership, assignment for the benefit of creditors or any other action or
proceeding, or if the business of any such guarantor is dissolved or if
substantially all of the assets of any such guarantor are sold,
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then, and in any such event (such events being herein referred to as an
"Insolvency Event"), any payment or distribution of any kind or character,
either in cash, securities or other property, which shall be payable or
deliverable upon or with respect to any Indebtedness of any guarantor to the
Borrower ("Intercompany Indebtedness") shall be paid or delivered directly to
the Agent for application on any of the Secured Obligations, due or to become
due, until such Secured Obligations (other than contingent indemnity
obligations) shall have first been fully paid and satisfied (in cash). Should
any payment, distribution, security or instrument or proceeds thereof be
received by the Borrower upon or with respect to the Intercompany Indebtedness
after an Insolvency Event prior to the satisfaction of all of the Secured
Obligations (other than contingent indemnity obligations) and the termination of
all financing arrangements pursuant to any Loan Document among the Borrower and
the Holders of Secured Obligations (and their Affiliates), the Borrower shall
receive and hold the same in trust, as trustee, for the benefit of the Holders
of Secured Obligations and shall forthwith deliver the same to the Agent, for
the benefit of such Persons, in precisely the form received (except for the
endorsement or assignment of the Borrower where necessary), for application to
any of the Secured Obligations, due or not due, and, until so delivered, the
same shall be held in trust by the Borrower as the property of the Holder of
Secured Obligations. If the Borrower fails to make any such endorsement or
assignment to the Agent, the Agent or any of its officers or employees are
irrevocably authorized to make the same. The Borrower agrees that until the
Secured Obligations (other than the contingent indemnity obligations) have been
paid in full (in cash) and satisfied and all financing arrangements pursuant to
any Loan Document among the Borrower and the Holders of the Secured Obligations
(and their Affiliates) have been terminated, the Borrower will not assign or
transfer to any Person (other than the Agent) any claim the Borrower has or may
have against any guarantor.
9.18. Certifications Regarding Indentures. The Borrower hereby
certifies to the Agent and the Lenders that, immediately prior to the
effectiveness of the Revolving Loan Commitments, and immediately prior to the
initial Credit Extension hereunder, the Borrower's incurrence of Indebtedness
under this Agreement and the other Loan Documents does not violate (i) Section
4.09 of the Indenture, dated as of July 2, 1998, as amended or modified from
time to time, to which the Borrower and certain of its Subsidiaries are subject
and pursuant to which the Borrower issued certain 9% Senior Subordinated Notes
Due 2008, (ii) Section 4.09 of the Indenture, dated as of November 6, 2001, as
amended or modified from time to time, to which the Borrower and certain of its
Subsidiaries are subject and pursuant to which the Borrower issued certain
9-5/8% Senior Subordinated Notes Due 2008, and (iii) Section 4.09 of the
Indenture, dated as of April 9, 2002, as amended or modified from time to time,
to which the Borrower is subject and pursuant to which the Borrower issued
certain 9-5/8% Senior Subordinated Notes Due 2012. The Borrower further
certifies to the Agent and the Lenders that both the Revolving Loan Commitment
component of this Agreement and the other Loan Documents constitute a "Credit
Facility" and a "Senior Credit Facility" under each of the foregoing Indentures,
and that the Term Loans do not constitute on the Closing Date or at any other
time a "Senior Credit Facility" under the indenture referenced in clause (i)
hereof, and shall not constitute such a "Senior Credit Facility" until such
indenture is appropriately amended. The Borrower further certifies that the
Revolving Loan Commitment, the Term Loans, this Agreement, and the other Loan
Documents collectively constitute "Senior Debt" under each of the aforementioned
indentures.
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ARTICLE X
THE AGENT
10.1. Appointment; Nature of Relationship. Bank One, NA is hereby
appointed by each of the Lenders as its contractual representative (herein
referred to as the "Agent") hereunder and under each other Loan Document, and
each of the Lenders irrevocably authorizes the Agent to act as the contractual
representative of such Lender with the rights and duties expressly set forth
herein and in the other Loan Documents, including, without limitation, the
Agent's agreement to bind itself and the Lenders to the Intercreditor Agreement
and to act on its behalf and on behalf of the Lenders thereunder. The Agent
agrees to act as such contractual representative upon the express conditions
contained in this Article X. Notwithstanding the use of the defined term
"Agent," it is expressly understood and agreed that the Agent shall not have any
fiduciary responsibilities to any of the Holders of Secured Obligations by
reason of this Agreement or any other Loan Document and that the Agent is merely
acting as the contractual representative of the Lenders with only those duties
as are expressly set forth in this Agreement and the other Loan Documents. In
its capacity as the Lenders' contractual representative, the Agent (i) does not
hereby assume any fiduciary duties to any of the Holders of Secured Obligations,
(ii) is a "representative" of the Holders of Secured Obligations within the
meaning of the term "secured party" as defined in the New York Uniform
Commercial Code and (iii) is acting as an independent contractor, the rights and
duties of which are limited to those expressly set forth in this Agreement and
the other Loan Documents. Each of the Lenders, for itself and on behalf of its
Affiliates as Holders of Secured Obligations, hereby agrees to assert no claim
against the Agent on any agency theory or any other theory of liability for
breach of fiduciary duty, all of which claims each Holder of Secured Obligations
hereby waives.
10.2. Powers. The Agent shall have and may exercise such powers
under the Loan Documents as are specifically delegated to the Agent by the terms
of each thereof, together with such powers as are reasonably incidental thereto.
The Agent shall have no implied duties or fiduciary duties to the Lenders, or
any obligation to the Lenders to take any action thereunder except any action
specifically provided by the Loan Documents to be taken by the Agent.
10.3. General Immunity. Neither the Agent nor any of its directors,
officers, agents or employees shall be liable to the Borrower, or any Lender or
Holder of Secured Obligations for any action taken or omitted to be taken by it
or them hereunder or under any other Loan Document or in connection herewith or
therewith except to the extent such action or inaction is determined in a final,
non-appealable judgment by a court of competent jurisdiction to have arisen from
the gross negligence or willful misconduct of such Person.
10.4. No Responsibility for Loans, Recitals, etc. Neither the Agent
nor any of its directors, officers, agents or employees shall be responsible for
or have any duty to ascertain, inquire into, or verify (a) any statement,
warranty or representation made in connection with any Loan Document or any
borrowing hereunder; (b) the performance or observance of any of the covenants
or agreements of any obligor under any Loan Document, including, without
limitation, any agreement by an obligor to furnish information directly to each
Lender; (c) the satisfaction of any condition specified in Article IV, except
receipt of items required to be delivered solely to the Agent; (d) the existence
or possible existence of any Default or Unmatured Default; (e) the
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validity, enforceability, effectiveness, sufficiency or genuineness of any Loan
Document or any other instrument or writing furnished in connection therewith;
(f) the value, sufficiency, creation, perfection or priority of any Lien in any
Collateral; or (g) the financial condition of the Borrower or any guarantor of
any of the Obligations or of any of the Borrower's or any such guarantor's
respective Subsidiaries. The Agent shall have no duty to disclose to the Lenders
information that is not required to be furnished by the Borrower to the Agent at
such time, but is voluntarily furnished by the Borrower to the Agent (either in
its capacity as Agent or in its individual capacity).
10.5. Action on Instructions of Lenders. The Agent shall in all
cases be fully protected in acting, or in refraining from acting, hereunder and
under any other Loan Document in accordance with written instructions signed by
the Required Lenders (or all of the Lenders in the event that and to the extent
that this Agreement expressly requires such), and such instructions and any
action taken or failure to act pursuant thereto shall be binding on all of the
Lenders. The Lenders hereby acknowledge that the Agent shall be under no duty to
take any discretionary action permitted to be taken by it pursuant to the
provisions of this Agreement or any other Loan Document unless it shall be
requested in writing to do so by the Required Lenders (or all of the Lenders in
the event that and to the extent that this Agreement expressly requires such).
The Agent shall be fully justified in failing or refusing to take any action
hereunder and under any other Loan Document unless it shall first be indemnified
to its satisfaction by the Lenders pro rata against any and all liability, cost
and expense that it may incur by reason of taking or continuing to take any such
action.
10.6. Employment of Agents and Counsel. The Agent may execute any of
its duties as Agent hereunder and under any other Loan Document by or through
employees, agents, and attorneys-in-fact and shall not be answerable to the
Lenders, except as to money or securities received by it or its authorized
agents, for the default or misconduct of any such agents or attorneys-in-fact
selected by it with reasonable care. The Agent shall be entitled to advice of
counsel concerning the contractual arrangement between the Agent and the Lenders
and all matters pertaining to the Agent's duties hereunder and under any other
Loan Document.
10.7. Reliance on Documents; Counsel. The Agent shall be entitled to
rely upon any Note, notice, consent, certificate, affidavit, letter, telegram,
statement, paper or document believed by it to be genuine and correct and to
have been signed or sent by the proper person or persons, and, in respect to
legal matters, upon the opinion of counsel selected by the Agent, which counsel
may be employees of the Agent.
10.8. Agent's Reimbursement and Indemnification. The Lenders agree
to reimburse and indemnify the Agent ratably in proportion to the Lenders' Pro
Rata Shares of the Term Loans and the Aggregate Revolving Loan Commitment (or,
if the Aggregate Revolving Loan Commitment has been terminated, of the Aggregate
Outstanding Credit Exposure) (i) for any amounts not reimbursed by the Borrower
for which the Agent is entitled to reimbursement by the Borrower under the Loan
Documents, (ii) for any other expenses incurred by the Agent on behalf of the
Lenders, in connection with the preparation, execution, delivery, administration
and enforcement of the Loan Documents (including, without limitation, for any
expenses incurred by the Agent in connection with any dispute between the Agent
and any Lender or between two or more of the Lenders) and (iii) for any
liabilities, obligations, losses, damages, penalties, actions,
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judgments, suits, costs, expenses or disbursements of any kind and nature
whatsoever which may be imposed on, incurred by or asserted against the Agent in
any way relating to or arising out of the Loan Documents or any other document
delivered in connection therewith or the transactions contemplated thereby
(including, without limitation, for any such amounts incurred by or asserted
against the Agent in connection with any dispute between the Agent and any
Lender or between two or more of the Lenders), or the enforcement of any of the
terms of the Loan Documents or of any such other documents, provided that (i) no
Lender shall be liable for any of the foregoing to the extent any of the
foregoing is found in a final, non-appealable judgment by a court of competent
jurisdiction to have resulted from the gross negligence or willful misconduct of
the Agent and (ii) any indemnification required pursuant to Section 3.5(vii)
shall, notwithstanding the provisions of this Section 10.8, be paid by the
relevant Lender in accordance with the provisions thereof. The obligations of
the Lenders under this Section 10.8 shall survive payment of the Secured
Obligations and termination of this Agreement.
10.9. Notice of Default. The Agent shall not be deemed to have
knowledge or notice of the occurrence of any Default or Unmatured Default
hereunder unless the Agent has received written notice from a Lender or the
Borrower referring to this Agreement describing such Default or Unmatured
Default and stating that such notice is a "notice of default". In the event that
the Agent receives such a notice, the Agent shall give prompt notice thereof to
the Lenders.
10.10. Rights as a Lender. In the event the Agent is a Lender, the
Agent shall have the same rights and powers hereunder and under any other Loan
Document with respect to its Revolving Loan Commitment and its Credit Extensions
as any Lender and may exercise the same as though it were not the Agent, and the
term "Lender" or "Lenders" shall, at any time when the Agent is a Lender, unless
the context otherwise indicates, include the Agent in its individual capacity.
The Agent and its Affiliates may accept deposits from, lend money to, and
generally engage in any kind of trust, debt, equity or other transaction, in
addition to those contemplated by this Agreement or any other Loan Document,
with the Borrower or any of its Subsidiaries in which the Borrower or such
Subsidiary is not restricted hereby from engaging with any other Person. The
Agent, in its individual capacity, is not obligated to remain a Lender.
10.11. Lender Credit Decision. Each Lender acknowledges that it has,
independently and without reliance upon the Agent, the Arranger or any other
Lender and based on the financial statements prepared by the Borrower and such
other documents and information as it has deemed appropriate, made its own
credit analysis and decision to enter into this Agreement and the other Loan
Documents. Each Lender also acknowledges that it will, independently and without
reliance upon the Agent, the Arranger or any other Lender and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own credit decisions in taking or not taking action under this
Agreement and the other Loan Documents.
10.12. Successor Agent. The Agent may resign at any time by giving
written notice thereof to the Lenders and the Borrower, such resignation to be
effective upon the appointment of a successor Agent or, if no successor Agent
has been appointed, forty-five days after the retiring Agent gives notice of its
intention to resign. The Agent may be removed at any time with or without cause
by written notice received by the Agent from the Required Lenders, such removal
to be effective on the date specified by the Required Lenders. Upon any such
resignation or removal, the Required Lenders shall have the right to appoint, on
behalf of the
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Borrower and the Lenders, a successor Agent. If no successor Agent shall have
been so appointed by the Required Lenders within thirty days after the resigning
Agent's giving notice of its intention to resign, then the resigning Agent may
appoint, on behalf of the Borrower and the Lenders, a successor Agent.
Notwithstanding the previous sentence, the Agent may at any time without the
consent of the Borrower or any Lender, appoint any of its Affiliates which is a
commercial bank as a successor Agent hereunder. If the Agent has resigned or
been removed and no successor Agent has been appointed, the Lenders may perform
all the duties of the Agent hereunder and the Borrower shall make all payments
in respect of the Obligations to the applicable Lender and for all other
purposes shall deal directly with the Lenders. No successor Agent shall be
deemed to be appointed hereunder until such successor Agent has accepted the
appointment. Any such successor Agent shall be a commercial bank having capital
and retained earnings of at least $100,000,000. Upon the acceptance of any
appointment as Agent hereunder by a successor Agent, such successor Agent shall
thereupon succeed to and become vested with all the rights, powers, privileges
and duties of the resigning or removed Agent. Upon the effectiveness of the
resignation or removal of the Agent, the resigning or removed Agent shall be
discharged from its duties and obligations hereunder and under the Loan
Documents. After the effectiveness of the resignation or removal of an Agent,
the provisions of this Article X shall continue in effect for the benefit of
such Agent in respect of any actions taken or omitted to be taken by it while it
was acting as the Agent hereunder and under the other Loan Documents. In the
event that there is a successor to the Agent by merger, or the Agent assigns its
duties and obligations to an Affiliate pursuant to this Section 10.12, then the
term "Prime Rate" as used in this Agreement shall mean the prime rate, base rate
or other analogous rate of the new Agent.
10.13. Agent and Arranger Fees. The Borrower agrees to pay to the
Agent and the Arranger, for their respective accounts, the fees agreed to by the
Borrower, the Agent and the Arranger pursuant to that certain letter agreement
dated on or about April 1, 2003, or as otherwise agreed from time to time.
10.14. Delegation to Affiliates. The Borrower and the Lenders agree
that the Agent may delegate any of its duties under this Agreement to any of its
Affiliates. Any such Affiliate (and such Affiliate's directors, officers, agents
and employees) which performs duties in connection with this Agreement shall be
entitled to the same benefits of the indemnification, waiver and other
protective provisions to which the Agent is entitled under Articles IX and X.
10.15. Collateral Documents. Each Lender authorizes the Agent to
enter into each of the Collateral Documents to which it is a party and to take
all action contemplated by such documents. Each Lender agrees that no Holder of
Secured Obligations (other than the Agent) shall have the right individually to
seek to realize upon the security granted by any Collateral Document, it being
understood and agreed that such rights and remedies may be exercised solely by
the Agent for the benefit of the Holders of Secured Obligations upon the terms
of the Collateral Documents.
(a) In the event that any Collateral is hereafter pledged
by any Person as collateral security for the Secured Obligations, the Agent is
hereby authorized to execute and deliver on behalf of the Holders of Secured
Obligations any Loan Documents necessary or appropriate to grant and perfect a
Lien on such Collateral in favor of the Agent on behalf of the Holders of
Secured Obligations.
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(b) The Lenders hereby 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 Aggregate Revolving Loan Commitment
and payment and satisfaction of all of the Obligations (other than contingent
indemnity obligations and Rate Management Obligations) at any time arising under
or in respect of this Agreement or the Loan Documents or the transactions
contemplated hereby or thereby; (ii) as permitted by, but only in accordance
with, the terms of the applicable Loan Document; or (iii) if approved,
authorized or ratified in writing by the Required Lenders, unless such release
is required to be approved by all of the Lenders hereunder. 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 10.15.
(c) Upon any sale or transfer of assets constituting
Collateral which is permitted pursuant to the terms of any Loan Document, or
consented to in writing by the Required Lenders or all of the Lenders, as
applicable, and upon at least five Business Days' prior written request by the
Borrower to the Agent, the Agent shall (and is hereby irrevocably authorized by
the Lenders to) execute such documents as may be necessary to evidence the
release of the Liens granted to the Agent for the benefit of the Holders of
Secured Obligations herein or pursuant hereto upon the Collateral that was sold
or transferred; provided, however, that (i) the Agent shall not be required to
execute any such document on terms which, in the Agent's opinion, would expose
the Agent to liability or create any obligation or entail any consequence other
than the release of such Liens without recourse or warranty, and (ii) such
release shall not in any manner discharge, affect or impair the Secured
Obligations or any Liens upon (or obligations of the Borrower or any Subsidiary
Guarantor in respect of) all interests retained by the Borrower or any
Subsidiary Guarantor, including, without limitation, the proceeds of the sale,
all of which shall continue to constitute part of the Collateral.
10.16. Intercreditor Agreement.
10.16.1 The Intercreditor Agreement sets forth certain
relative rights, as holders of Liens, of the Agent on behalf of the
Holders of Secured Obligations and the Multiparty Collateral Agent on
behalf of the Senior Noteholders and the Senior Term Loan Holders. Each
of the Lenders has received a copy of the Intercreditor Agreement
attached hereto as Exhibit I and each such Person (including, without
limitation, those Persons that become Lenders subject hereto pursuant
to an Assignment Agreement) agrees to be bound by the terms and
conditions of such attached Intercreditor Agreement. The future consent
of the Lenders shall not be required in order for the Agent to enter
into any Intercreditor Agreement described in clause (y) of the
definition thereof, and the Lenders hereby authorize the Agent to enter
into such Intercreditor Agreement. The Lenders authorize the Agent to
deliver written notice to the Multiparty Collateral Agent, the Senior
Note Trustee, the Senior Term Loan Agreement Agent, the Senior
Noteholders and the Senior Term Loan Holders that this Agreement, the
other Loan Documents, and the credit facilities evidenced hereby,
constitute a "Qualified Credit Facility" as defined on the Closing Date
in the Senior Note Indenture and Senior Term Loan Agreement. The Agent
shall require the written agreement of the Multiparty Collateral Agent,
on behalf of itself, the Senior Note Trustee, the Senior Noteholders,
the Senior Term Loan Agreement Agent, and the Senior Term Loan Holders,
to be bound by the Intercreditor Agreement. Notwithstanding the
foregoing, nothing in the Intercreditor Agreement will:
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(a) impair, as between (1) the Borrower and the
Subsidiary Guarantors, and (2) the Agent, the Lenders and the LC
Issuers, the obligations of the Borrower or any Subsidiary Guarantor,
which are absolute and unconditional, to pay principal, interest, fees
and expenses hereunder in accordance with the terms hereof or to
perform any other obligation of the Borrower or such Subsidiary
Guarantor under the Loan Documents;
(b) affect the relative rights of the Holders of Secured
Obligations, the Senior Noteholders or the Senior Term Loan Holders and
other creditors of the Borrower or any of its Subsidiaries;
(c) restrict the right of any Holder of Secured
Obligations, Senior Noteholder or Senior Term Loan Holder to xxx for
payments that are then due and owing;
(d) prevent the Agent, the Holders of Secured
Obligations, the Multiparty Collateral Agent, the Senior Note Trustee,
the Senior Term Loan Agreement Agent, the Senior Noteholders or the
Senior Term Loan Holders, from exercising against the Borrower or any
Subsidiary Guarantor any of its other available remedies upon a Default
or Unmatured Default or a "default" or "event of default" under the
Senior Notes or the Senior Term Loan Agreement (or any comparable event
which would permit the acceleration of the repayment of the
Indebtedness held by such Persons or which would otherwise allow such
Persons to exercise rights and remedies against the Borrower or any
Subsidiary Guarantor); or
(e) restrict the right of the Agent, the Holders of
Secured Obligations, the Multiparty Collateral Agent, the Senior Note
Trustee, the Senior Term Loan Agreement Agent, the Senior Noteholders
or the Senior Term Loan Holders to file and prosecute a petition
seeking an order for relief in an involuntary bankruptcy case as to the
Borrower or any Subsidiary Guarantor or otherwise to commence, or seek
relief commencing, any insolvency or liquidation proceeding
involuntarily against the Borrower or any Subsidiary Guarantor or to
assert or enforce any claim, Lien, right or remedy in any voluntary or
involuntary bankruptcy case or insolvency or liquidation proceeding.
10.16.2 The Agent and the Lenders agree that, until the Senior
Notes and the Senior Term Loans are repaid and the Multiparty
Collateral Agent's Lien upon certain of the Borrower's and its
Subsidiaries' Property is released as a result of such repayment, the
Agent, on behalf of the Lenders, shall be bound by and shall perform
each of its obligations set forth in the Intercreditor Agreement. The
Agent and the Lenders further agree that neither the Lenders nor the
Agent shall accept, enforce, claim or retain any benefit of any
guaranty from or by any Pipeline Subsidiary, any Lien upon any Property
of any Pipeline Subsidiary as Collateral for the Secured Obligations,
or any consensual Lien upon any equities of any Subsidiary of the
Borrower. The Multiparty Collateral Agent, the Senior Note Trustee, the
Senior Term Loan Agreement Agent, the Senior Term Loan Holders, and the
Senior Noteholders shall be deemed to be third party beneficiaries of
this Section 10.16.2.
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ARTICLE XI
SETOFF; RATABLE PAYMENTS
11.1. Setoff. In addition to, and without limitation of, any rights
of the Lenders under applicable law, if the Borrower becomes insolvent, however
evidenced, or any Default occurs, any and all deposits (including all account
balances, whether provisional or final and whether or not collected or
available) and any other Indebtedness at any time held or owing by any Lender or
any Affiliate of any Lender to or for the credit or account of the Borrower may
be offset and applied toward the payment of the Secured Obligations owing to
such Lender, whether or not the Secured Obligations, or any part thereof, shall
then be due.
11.2. Ratable Payments. If any Lender, whether by setoff or
otherwise, has payment made to it upon its Outstanding Credit Exposure (other
than payments received pursuant to Section 3.1, 3.2, 3.4 or 3.5) in a greater
proportion than that received by any other Lender, such Lender agrees, promptly
upon demand, to purchase a participation in the Aggregate Outstanding Credit
Exposure held by the other Lenders so that after such purchase each Lender will
hold its Pro Rata Share of the Aggregate Outstanding Credit Exposure. If any
Lender, whether in connection with setoff or amounts which might be subject to
setoff or otherwise, receives collateral or other protection for its Obligations
or such amounts which may be subject to setoff, such Lender agrees, promptly
upon demand, to take such action necessary such that all Lenders share in the
benefits of such collateral ratably in proportion to their respective Pro Rata
Shares of the Aggregate Outstanding Credit Exposure. In case any such payment is
disturbed by legal process, or otherwise, appropriate further adjustments shall
be made.
11.3. Application of Payments. Principal and interest payments shall
be apportioned ratably among the Lenders (according to the unpaid principal
balance of the Loans to which such payments relate held by each Lender) and
payments of the fees shall, as applicable, be apportioned ratably among the
Lenders, except for fees payable solely to the Agent and the LC Issuer and
except as provided in the fee letter referenced in Section 10.13. Subject to the
provisions of Section 2.2 governing the application of mandatory prepayments,
all payments shall be remitted to the Agent and all such payments not relating
to principal or interest of specific Loans, or not constituting payment of
specific fees, and all proceeds of any Collateral received by the Agent
following acceleration of the maturity of the Obligations pursuant to Section
8.1, shall be applied, ratably, subject to the provisions of this Agreement,
first, to pay any fees, indemnities, or expense reimbursements including amounts
then due to the Agent from the Borrower, second, to pay any fees or expense
reimbursements then due to the Lenders from the Borrower, third, to pay ratably
interest due in respect of the Revolving Loans, including Non-Ratable Loans and
Collateral Protection Advances, and the Term Loans, fourth, to pay or prepay
ratably the principal amount of the Collateral Protection Advances, fifth, to
pay or prepay ratably the principal amount of the Non-Ratable Loans, the
Revolving Loans and the Term Loans and unpaid Reimbursement Obligations in
respect of Facility LCs, and an amount to the Agent equal to one hundred ten
percent (110%) of the aggregate undrawn face amount of all outstanding Facility
LCs to be held as cash collateral for such Obligations, sixth, to pay any
amounts owing with respect to Bank Products, and seventh, to the payment of any
other Secured Obligation due to the Agent or any Lender by the Borrower.
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Notwithstanding anything to the contrary contained in this Agreement,
unless so directed by the Borrower, or unless a Default is in existence, neither
the Agent nor any Lender shall apply any payment which it receives to any
Eurodollar Loan, except (a) on the expiration date of the Interest Period
applicable to any such Eurodollar Loan, or (b) in the event, and only to the
extent, that there are no outstanding Floating Rate Loans and, in any event, the
Borrower shall pay the breakage losses with respect to Eurodollar Loans in
accordance with Section 3.4. The Agent and the Required Lenders shall have the
continuing and exclusive right to apply and reverse and reapply any and all such
proceeds and payments to any portion of the Secured Obligations. Unless
otherwise required by the terms of this Agreement, all principal payments in
respect of Loans (other than Non-Ratable Loans and Collateral Protection
Advances) shall be applied first to repay outstanding Floating Rate Loans, and
then to repay outstanding Eurodollar Loans with those Eurodollar Loans which
have earlier expiring Interest Periods being repaid prior to those which have
later expiring Interest Periods.
ARTICLE XII
BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS
12.1. Successors and Assigns; Designated Lenders.
12.1.1 Successors and Assigns. The terms and provisions of the
Loan Documents shall be binding upon and inure to the benefit of the
Borrower, the Agent and the Lenders and their respective successors and
assigns permitted hereby, except that (i) the Borrower shall not have
the right to assign its rights or obligations under the Loan Documents
without the prior written consent of each Lender, (ii) any assignment
by any Lender must be made in compliance with Section 12.3, and (iii)
any transfer by Participants must be made in compliance with Section
12.2. Any attempted assignment or transfer by any party not made in
compliance with this Section 12.1 shall be null and void, unless such
attempted assignment or transfer is treated as a participation in
accordance with Section 12.3.2. The parties to this Agreement
acknowledge that clause (ii) of this Section 12.1 relates only to
absolute assignments and this Section 12.1 does not prohibit
assignments creating security interests, including, without limitation,
(x) any pledge or assignment by any Lender of all or any portion of its
rights under this Agreement and any Note to a Federal Reserve Bank, (y)
in the case of a Lender which is a Fund, any pledge or assignment of
all or any portion of its rights under this Agreement and any Note to
its trustee in support of its obligations to its trustee or (z) any
pledge or assignment by any Lender of all or any portion of its rights
under this Agreement and any Note to direct or indirect contractual
counterparties in swap agreements relating to the Loans; provided,
however, that no such pledge or assignment creating a security interest
shall release the transferor Lender from its obligations hereunder
unless and until the parties thereto have complied with the provisions
of Section 12.3. The Agent may treat the Person which made any Loan or
which holds any Note as the owner thereof for all purposes hereof
unless and until such Person complies with Section 12.3; provided,
however, that the Agent may in its discretion (but shall not be
required to) follow instructions from the Person which made any Loan or
which holds any Note to direct payments relating to such Loan or Note
to another Person. Any assignee of the rights to
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any Loan or any Note agrees by acceptance of such assignment to be
bound by all the terms and provisions of the Loan Documents. Any
request, authority or consent of any Person, who at the time of making
such request or giving such authority or consent is the owner of the
rights to any Loan (whether or not a Note has been issued in evidence
thereof), shall be conclusive and binding on any subsequent holder or
assignee of the rights to such Loan.
12.1.2 Designated Lenders.
(i) Subject to the terms and conditions set forth in this Section
12.1.2, any Lender may from time to time elect to designate an
Eligible Designee to provide all or any part of the Loans to
be made by such Lender pursuant to this Agreement; provided
that the designation of an Eligible Designee by any Lender for
purposes of this Section 12.1.2 shall be subject to the
approval of the Agent (which consent shall not be unreasonably
withheld or delayed). Upon the execution by the parties to
each such designation of an agreement in the form of Exhibit F
hereto (a "Designation Agreement") and the acceptance thereof
by the Agent, the Eligible Designee shall become a Designated
Lender for purposes of this Agreement. The Designating Lender
shall thereafter have the right to permit the Designated
Lender to provide all or a portion of the Loans to be made by
the Designating Lender pursuant to the terms of this Agreement
and the making of the Loans or portion thereof shall satisfy
the obligations of the Designating Lender to the same extent,
and as if, such Loan was made by the Designating Lender. As to
any Loan made by it, each Designated Lender shall have all the
rights a Lender making such Loan would have under this
Agreement and otherwise; provided, (x) that all voting rights
under this Agreement shall be exercised solely by the
Designating Lender, (y) each Designating Lender shall remain
solely responsible to the other parties hereto for its
obligations under this Agreement, including the obligations of
a Lender in respect of Loans made by its Designated Lender and
(z) no Designated Lender shall be entitled to reimbursement
under Article III hereof for any amount which would exceed the
amount that would have been payable by the Borrower to the
Lender from which the Designated Lender obtained any interests
hereunder. No additional Notes shall be required with respect
to Loans provided by a Designated Lender; provided, however,
to the extent any Designated Lender shall advance funds, the
Designating Lender shall be deemed to hold the Notes in its
possession as an agent for such Designated Lender to the
extent of the Loan funded by such Designated Lender. Such
Designating Lender shall act as administrative agent for its
Designated Lender and give and receive notices and
communications hereunder. Any payments for the account of any
Designated Lender shall be paid to its Designating Lender as
administrative agent for such Designated Lender and neither
the Borrower nor the Agent shall be responsible for any
Designating Lender's application of such payments. In
addition, any Designated Lender may (1) with notice to, but
without the consent of the Borrower or the Agent, assign all
or portions of its interests in any Loans to its Designating
Lender or to any financial institution consented to by the
Agent providing liquidity and/or credit facilities to or for
the account of such Designated Lender and (2) subject to
advising any such Person that such information is to be
92
treated as confidential in accordance with Section 9.11,
disclose on a confidential basis any non-public information
relating to its Loans to any rating agency, commercial paper
dealer or provider of any guarantee, surety or credit or
liquidity enhancement to such Designated Lender.
(ii) Each party to this Agreement hereby agrees that it shall not
institute against, or join any other Person in instituting
against, any Designated Lender any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceeding or other
proceedings under any federal or state bankruptcy or similar
law for one year and a day after the payment in full of all
outstanding senior indebtedness of any Designated Lender;
provided that the Designating Lender for each Designated
Lender hereby agrees to indemnify, save and hold harmless each
other party hereto for any loss, cost, damage and expense
arising out of its inability to institute any such proceeding
against such Designated Lender. This Section 12.1.2 shall
survive the termination of this Agreement.
12.2. Participations.
12.2.1 Permitted Participants; Effect. Any Lender may at any
time sell to one or more banks or other entities ("Participants")
participating interests in any Outstanding Credit Exposure of such
Lender, any Note held by such Lender, any Revolving Loan Commitment of
such Lender or any other interest of such Lender under the Loan
Documents. In the event of any such sale by a Lender of participating
interests to a Participant, such Lender's obligations under the Loan
Documents shall remain unchanged, such Lender shall remain solely
responsible to the other parties hereto for the performance of such
obligations, such Lender shall remain the owner of its Outstanding
Credit Exposure and the holder of any Note issued to it in evidence
thereof for all purposes under the Loan Documents, all amounts payable
by the Borrower under this Agreement shall be determined as if such
Lender had not sold such participating interests, and the Borrower and
the Agent shall continue to deal solely and directly with such Lender
in connection with such Lender's rights and obligations under the Loan
Documents.
12.2.2 Voting Rights. Each Lender shall retain the sole right
to approve, without the consent of any Participant, any amendment,
modification or waiver of any provision of the Loan Documents other
than any amendment, modification or waiver with respect to any Credit
Extension or Revolving Loan Commitment in which such Participant has an
interest which would require consent of all of the Lenders pursuant to
the terms of Section 8.2.
12.2.3 Benefit of Certain Provisions. The Borrower agrees that
each Participant shall be deemed to have the right of setoff provided
in Section 11.1 in respect of its participating interest in amounts
owing under the Loan Documents to the same extent as if the amount of
its participating interest were owing directly to it as a Lender under
the Loan Documents, provided that each Lender shall retain the right of
setoff provided in Section 11.1 with respect to the amount of
participating interests sold to each Participant. The Lenders agree to
share with each Participant, and each Participant, by exercising the
93
right of setoff provided in Section 11.1, agrees to share with each
Lender, any amount received pursuant to the exercise of its right of
setoff, such amounts to be shared in accordance with Section 11.2 as if
each Participant were a Lender. The Borrower further agrees that each
Participant shall be entitled to the benefits of Sections 3.1, 3.2, 3.4
and 3.5 to the same extent as if it were a Lender and had acquired its
interest by assignment pursuant to Section 12.3, provided that (i) a
Participant shall not be entitled to receive any greater payment under
Section 3.1, 3.2 or 3.5 than the Lender who sold the participating
interest to such Participant would have received had it retained such
interest for its own account, unless the sale of such interest to such
Participant is made with the prior written consent of the Borrower, and
(ii) any Participant not incorporated under the laws of the United
States of America or any State thereof agrees to comply with the
provisions of Section 3.5 to the same extent as if it were a Lender.
12.3. Assignments.
12.3.1 Permitted Assignments. Any Lender may at any time
assign to one or more banks or other entities ("Purchasers") all or any
part of its rights and obligations under the Loan Documents. Such
assignment shall be evidenced by an agreement substantially in the form
of Exhibit C or in such other form as may be agreed to by the parties
thereto (each such agreement, an "Assignment Agreement"). Each such
assignment with respect to a Purchaser which is not a Lender or an
Affiliate of a Lender or an Approved Fund shall, unless otherwise
consented to in writing by the Borrower and the Agent, either be in an
amount equal to the entire applicable Outstanding Credit Exposure of
the assigning Lender or (unless each of the Borrower and the Agent
otherwise consents) be in an aggregate amount not less than (x)
$10,000,000 with respect to Revolving Loans and (y) $1,000,000 with
respect to Term Loans. The amount of the assignment shall be based on
the Outstanding Credit Exposure subject to the assignment, determined
as of the date of such assignment or as of the "Trade Date," if the
"Trade Date" is specified in the Assignment Agreement.
12.3.2 Consents. The consent of the Borrower shall be required
prior to an assignment becoming effective unless the Purchaser is a
Lender, an Affiliate of a Lender or an Approved Fund, provided that the
consent of the Borrower shall not be required if (i) a Default has
occurred and is continuing or (ii) if such assignment is in connection
with the physical settlement of any Lender's obligations to direct or
indirect contractual counterparties in swap agreements relating to the
Loans; provided, that the assignment without the Borrower's consent
pursuant to clause (ii) shall not increase the Borrower's liability
under Section 3.5. The consent of the Agent shall be required prior to
an assignment becoming effective unless the Purchaser is a Lender, an
Affiliate of a Lender or an Approved Fund. Any consent required under
this Section 12.3.2 shall not be unreasonably withheld or delayed.
12.3.3 Effect; Effective Date. Upon (i) delivery to the Agent
of an Assignment Agreement, together with any consents required by
Sections 12.3.1 and 12.3.2, and (ii) payment of a $3,500 fee to the
Agent for processing such assignment (unless such fee is waived by the
Agent or unless such assignment is made to such assigning Lender's
Affiliate or an Approved Fund), such assignment shall become effective
on the effective date specified in such
94
assignment. The Assignment Agreement shall contain a representation and
warranty by the Purchaser to the effect that the assignment evidenced
thereby will not result in a non-exempt "prohibited transaction" under
Section 406 ERISA. On and after the effective date of such assignment,
such Purchaser shall for all purposes be a Lender party to this
Agreement and any other Loan Document executed by or on behalf of the
Lenders and shall have all the rights, benefits and obligations of a
Lender under the Loan Documents, to the same extent as if it were an
original party thereto, and the transferor Lender shall be released
with respect to the Outstanding Credit Exposure assigned to such
Purchaser without any further consent or action by the Borrower, the
Lenders or the Agent. In the case of an assignment covering all of the
assigning Lender's rights, benefits and obligations under this
Agreement, such Lender shall cease to be a Lender hereunder but shall
continue to be entitled to the benefits of, and subject to, those
provisions of this Agreement and the other Loan Documents which survive
payment of the Obligations and termination of the Loan Documents. Any
assignment or transfer by a Lender of rights or obligations under this
Agreement that does not comply with this Section 12.3 shall be treated
for purposes of this Agreement as a sale by such Lender of a
participation in such rights and obligations in accordance with Section
12.2. Upon the consummation of any assignment to a Purchaser pursuant
to this Section 12.3.3, the transferor Lender, the Agent and the
Borrower shall, if the transferor Lender or the Purchaser desires that
its Loans be evidenced by Notes, make appropriate arrangements so that,
upon cancellation and surrender to the Borrower of the Notes (if any)
held by the transferor Lender, new Notes or, as appropriate,
replacement Notes are issued to such transferor Lender, if applicable,
and new Notes or, as appropriate, replacement Notes, are issued to such
Purchaser, in each case in principal amounts reflecting their
respective Revolving Loan Commitments and Term Loans, as applicable
(or, if the Revolving Facility Termination Date has occurred, their
respective Outstanding Credit Exposure), as adjusted pursuant to such
assignment.
12.3.4 Register. The Agent, acting solely for this purpose as
an agent of the Borrower (and the Borrower hereby designates the Agent
to act in such capacity), shall maintain at one of its offices in
Chicago, Illinois a copy of each Assignment and Assumption delivered to
it and a register (the "Register") for the recordation of the names and
addresses of the Lenders, and the Revolving Loan Commitments of, and
principal amounts of and interest on the Loans owing to, each Lender
pursuant to the terms hereof from time to time and whether such Lender
is an original Lender or assignee of another Lender pursuant to an
assignment under this Section 13.3. The entries in the Register shall
be conclusive, and the Borrower, the Agent and the Lenders may treat
each Person whose name is recorded in the Register pursuant to the
terms hereof as a Lender hereunder for all purposes of this Agreement,
notwithstanding notice to the contrary. The Register shall be available
for inspection by the Borrower and any Lender, at any reasonable time
and from time to time upon reasonable prior notice.
12.4. Dissemination of Information. The Borrower authorizes each
Lender to disclose to any Participant or Purchaser or any other Person acquiring
an interest in the Loan Documents
95
by operation of law (each a "Transferee") and any prospective Transferee any and
all information in such Lender's possession concerning the creditworthiness of
the Borrower and its Subsidiaries; provided that each Transferee and prospective
Transferee agrees to be bound by Section 9.11 of this Agreement.
12.5. Tax Certifications. If any interest in any Loan Document is
transferred to any Transferee which is not incorporated under the laws of the
United States or any State thereof, the transferor Lender shall cause such
Transferee, concurrently with the effectiveness of such transfer, to comply with
the provisions of Section 3.5(iv).
ARTICLE XIII
NOTICES
13.1. Notices. Except as otherwise permitted by Section 2.13 with
respect to borrowing notices, all notices, requests and other communications to
any party hereunder shall be in writing (including electronic transmission,
facsimile transmission or similar writing) and shall be given to such party: (x)
in the case of the Borrower, the Lenders, the LC Issuers, or the Agent, at its
address or facsimile number set forth on the signature pages hereof or, (y) in
the case of any party, at such other address or facsimile number as such party
may hereafter specify for the purpose by notice to the Agent and the Borrower in
accordance with the provisions of this Section 13.1. Each such notice, request
or other communication shall be effective (i) if given by facsimile
transmission, when transmitted to the facsimile number specified in this Section
and confirmation of receipt is received, (ii) if given by mail, 72 hours after
such communication is deposited in the mails with first class postage prepaid,
addressed as aforesaid, or (iii) if given by any other means, when delivered
(or, in the case of electronic transmission, received) at the address specified
in this Section; provided that notices to the Agent under Article II shall not
be effective until received.
13.2. Change of Address. The Borrower, the Agent, any LC Issuer, and
any Lender may each change the address for service of notice upon it by a notice
in writing to the other parties hereto.
ARTICLE XIV
COUNTERPARTS
This Agreement may be executed in any number of counterparts, all of
which taken together shall constitute one agreement, and any of the parties
hereto may execute this Agreement by signing any such counterpart. This
Agreement shall be effective when it has been executed by the Borrower, the
Agent, the initial LC Issuer and the Lenders and each party has notified the
Agent by facsimile transmission or telephone that it has taken such action.
96
ARTICLE XV
CHOICE OF LAW; CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL
15.1 CHOICE OF LAW. THE LOAN DOCUMENTS (OTHER THAN THOSE CONTAINING
A CONTRARY EXPRESS CHOICE OF LAW PROVISION) SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE INTERNAL LAWS (INCLUDING SECTION 5-1401 OF THE GENERAL
OBLIGATION LAW BUT OTHERWISE WITHOUT REGARD TO CONFLICT OF LAW PROVISIONS) OF
THE STATE OF NEW YORK, BUT GIVING EFFECT TO FEDERAL LAWS APPLICABLE TO NATIONAL
BANKS. IF ANY COURT, TRIBUNAL OR OTHER ENTITY WITH JURISDICTION OVER THE LOAN
DOCUMENTS AND THE TRANSACTIONS EVIDENCED THEREBY REJECTS THE FOREGOING CHOICE OF
NEW YORK LAW, THEN THE LOAN DOCUMENTS (OTHER THAN THOSE CONTAINING A CONTRARY
EXPRESS CHOICE OF LAW PROVISION) SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE INTERNAL LAWS (INCLUDING 735 ILCS SECTION 105/5-1 ET SEQ.
BUT OTHERWISE WITHOUT REGARD TO CONFLICT OF LAW PROVISIONS) OF THE STATE OF
ILLINOIS, BUT GIVING EFFECT TO FEDERAL LAWS APPLICABLE TO NATIONAL BANKS.
15.2 CONSENT TO JURISDICTION. THE BORROWER HEREBY IRREVOCABLY
SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF ANY UNITED STATES FEDERAL COURT
SITTING IN OR WITH DIRECT JURISDICTION OVER THE SOUTHERN DISTRICT OF NEW YORK OR
ANY NEW YORK STATE COURT SITTING IN OR WITH DIRECT JURISDICTION OVER THE BOROUGH
OF MANHATTAN IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO ANY LOAN
DOCUMENTS AND THE BORROWER HEREBY IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT
OF SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN ANY SUCH COURT AND
IRREVOCABLY WAIVES ANY OBJECTION IT MAY NOW OR HEREAFTER HAVE AS TO THE VENUE OF
ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN SUCH A COURT OR THAT SUCH COURT
IS AN INCONVENIENT FORUM. NOTHING HEREIN SHALL LIMIT THE RIGHT OF THE AGENT, ANY
LC ISSUER, ANY LENDER OR ANY HOLDER OF SECURED OBLIGATIONS TO BRING PROCEEDINGS
AGAINST THE BORROWER IN THE COURTS OF ANY OTHER JURISDICTION. ANY JUDICIAL
PROCEEDING BY THE BORROWER AGAINST THE AGENT, ANY LC ISSUER, ANY LENDER OR ANY
HOLDER OF SECURED OBLIGATIONS OR ANY AFFILIATE OF THE AGENT, ANY LC ISSUER, ANY
LENDER OR ANY HOLDER OF SECURED OBLIGATIONS INVOLVING, DIRECTLY OR INDIRECTLY,
ANY MATTER IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH ANY LOAN
DOCUMENT SHALL BE BROUGHT ONLY IN A UNITED STATES FEDERAL COURT SITTING IN OR
WITH DIRECT JURISDICTION OVER THE SOUTHERN DISTRICT OF NEW YORK OR ANY NEW YORK
STATE COURT SITTING IN OR WITH DIRECT JURISDICTION OVER THE BOROUGH OF
MANHATTAN.
97
15.3 WAIVER OF JURY TRIAL. THE BORROWER, THE AGENT, EACH LC ISSUER,
EACH LENDER, AND EACH OTHER HOLDER OF SECURED OBLIGATIONS HEREBY WAIVE TRIAL BY
JURY IN ANY JUDICIAL PROCEEDING INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER
(WHETHER SOUNDING IN TORT, CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT OF,
RELATED TO, OR CONNECTED WITH ANY LOAN DOCUMENT OR THE RELATIONSHIP ESTABLISHED
THEREUNDER.
ARTICLE XVI
PRIOR CREDIT AGREEMENT
The Borrower, certain of the Lenders, and the Agent are parties to an
Amended and Restated Credit Agreement dated as of May 6, 2003 (the "Prior Credit
Agreement"). The Borrower, the Lenders, and the Agent agree that upon (i) the
execution and delivery of this Agreement by each of the parties hereto and (ii)
satisfaction (or waiver by the aforementioned parties) of the conditions
precedent set forth in Section 4.1, the terms and conditions of the Prior Credit
Agreement shall be and hereby are amended, superseded, and restated in their
entirety by the terms and provisions of this Agreement. All amounts outstanding
or otherwise due and payable under the Prior Credit Agreement prior to the
Closing Date shall, on and after the Closing Date, be outstanding and due and
payable under this Agreement. Notwithstanding the foregoing, the Borrower
affirms its rights, duties and obligations under the Security Agreement,
including, without limitation, the security interest granted thereunder, and
agrees and acknowledges that this Agreement constitutes the "Credit Agreement"
referenced therein.
The remainder of this page is intentionally blank
98
IN WITNESS WHEREOF, the Borrower, the Lenders, the initial LC Issuer
and the Agent have executed this Agreement as of the date first above written.
TESORO PETROLEUM CORPORATION,
as the Borrower
By: /s/ XXXXXXX X. XXXXXX
-------------------------
Print Name: Xxxxxxx X. Xxxxxx
Title: Senior Vice President
and Chief Financial Officer
000 Xxxxxxx Xxxxx Xxxxx
Xxx Xxxxxxx, XX 00000
Attention: Finance Department
Telephone: (000) 000-0000
FAX: (000) 000-0000
BANK ONE, NA (MAIN OFFICE CHICAGO),
individually, as initial LC Issuer, and as
Administrative Agent
By: /s/ XXXXX XXXXXXX
---------------------
Print Name: Xxxxx Xxxxxxx
Title: Director
000 X. XxXxxxx
Xxxxxxx, XX 00000
Attention: Xxxxx Xxxxxxx
Telephone: (000) 000-0000
FAX: (000) 000-0000
XXXXXXX XXXXX CREDIT PARTNERS L.P.,
individually and as Syndication Agent
By: /s/ XXXXXX XXXXXX
---------------------
Print Name: Xxxxxx Xxxxxx
Title: Authorized Signatory
00 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: _______________________________
Telephone: (000) 000-0000
FAX: (000) 000-0000
BANK OF AMERICA, N.A.,
By: /s/ XXXXX X. XXXXX
----------------------
Print Name: Xxxxx X. Xxxxx
Title: Sr. Vice President
00 X. Xxxx Xxxxxx, Xxxxx 000
Xxxxxxxx, XX 00000
Attention: Xxxx Essertsen-Urgent
Telephone: (000) 000-0000
FAX: (000) 000-0000
FLEET CAPITAL CORPORATION,
By: /s/ XXXXXX X. XXXXXX
------------------------------------
Print Name: Xxxxxx X. Xxxxxx
Title: Senior Vice President
0000 Xxxxxx Xxxx, Xxxxx 000
Xxxxxx, XX 00000
Attention: Loan Administration Manager
Telephone: (000) 000-0000
FAX: (000) 000-0000
STATE OF CALIFORNIA PUBLIC
EMPLOYEES' RETIREMENT SYSTEM
By: /s/ XXXXXX XXXXXXXX
------------------------------------
Print Name: Xxxxxx XxXxxxxx
Title: Portfolio Manager
000 X Xxxxxx, Xxxxx 0000
Xxxxxxxxxx, XX 00000
Attention: Xxxxxx XxXxxxxx
Telephone: (000) 000-0000
FAX: (000) 000-0000
FORTIS CAPITAL CORP.
By: /s/ XXXXXXX XXXXXXX
------------------------------------
Print Name: Xxxxxxx Xxxxxxx
Title: Vice President
By: /s/ XXXXXXX X. XXXXXX
------------------------------------
Print Name: Xxxxxxx X. Xxxxxx
Title: Managing Director
000 Xxxxxxxx Xxxxx, Xxxxx 0000
Xxxxxx, XX 00000
Attention: Xxxxxxx Xxxxxxx
Telephone: (000) 000-0000
FAX: (000) 000-0000
PNC BANK, NATIONAL ASSOCIATION
By: /s/ XXXXX XXXXXXXX
------------------------------------
Print Name: Xxxxx Xxxxxxxx
Title: Senior Vice President
Xxx Xxxxx Xxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx, XX 00000
Attention: Xxxxx Xxxxxxxx
Telephone: (000) 000-0000
FAX: (000) 000-0000
XXXXX FARGO FOOTHILL, LLC
By: /s/ XXXXX XXXXXX
------------------------------------
Print Name: Xxxxx Xxxxxx
Title: Vice President
0000 Xxxxxxxx Xxxxxx, Xxxxx 0000 Xxxx
Xxxxx Xxxxxx, XX 00000
Attention: Xxxxxx Xxx
Telephone: (000) 000-0000
FAX: (000) 000-0000
SIEMENS FINANCIAL SERVICES, INC.
By: /s/ XXXXX XXXXXX
------------------------------------
Print Name: Xxxxx Xxxxxx
Title: Vice President - Credit
000 Xxxxxxxx Xxxxxxxxx Xxxx
Xxxxxxxxxxx, XX 00000
Attention: Xxxxx Xxxxxx
Telephone: (000) 000-0000
FAX: (000) 000-0000
PB CAPITAL CORPORATION
By: /s/ XXXXXXX X. XXXXXX
------------------------------------
Print Name: Xxxxxxx X. Xxxxxx
Title: Vice President
By: /s/ XXXXX X. XXXXXXXX
------------------------------------
Print Name: Xxxxx X. XxXxxxxx
Title: Vice President
000 Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000-0000
Attention: Xxxxxxx X. Xxxxxx/Xxxxx XxXxxxxx
Telephone: (000) 000-0000
FAX: (000) 000-0000
GUARANTY BANK
By: /s/ XXX X. XXXXXXXX
------------------------------------
Print Name: Xxx X. Xxxxxxxx
Title: Senior Vice President
0000 XX Xxxx 000
Xxx Xxxxxxx, XX 00000
Attention: Xxx X. Xxxxxxxx
Telephone: (000) 000-0000
FAX: (000) 000-0000
U.S. BANK, NATIONAL ASSOCIATION
By: /s/ XXXXXX XXXXXXXX
------------------------------------
Print Name: Xxxxxx Xxxxxxxx
Title: Vice President
7th and Washington, 0xx Xxxxx
XX-XX-X0XX
Xx. Xxxxx, XX 00000
Attention: Xxxxxx Xxxxxxxx
Telephone: (000) 000-0000
FAX: (000) 000-0000
HIBERNIA NATIONAL BANK
By: /s/ XXXXX X. XXXXXXX
------------------------------------
Print Name: Xxxxx X. Xxxxxxx
Title: Vice President
X.X. Xxx 00000
Xxx Xxxxxxx, XX 00000
Attention: Xxxxx X. Xxxxxxx
Telephone: (000) 000-0000
FAX: (000) 000-0000
THE FROST NATIONAL BANK
By: /s/ XXXXXX KASUNOFF
------------------------------------
Print Name: Xxxxxx Kasunoff
Title: Vice President
X.X. Xxx 0000
Xxx Xxxxxxx, XX 00000
Attention: Xxxxxxxx Xxxxxx
Telephone: (000) 000-0000
FAX: (000) 000-0000
NATEXIS BANQUES POPULAIRES
By: /s/ XXXXXX XXXXX
------------------------------------
Print Name: Xxxxxx Xxxxx
Title: Vice President
By: /s/ XXXXX X. XXXXXXX, III
------------------------------------
Print Name: Xxxxx X. Xxxxxxx, III
Title: Vice President and Group Manager
000 Xxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, XX 00000
Attention: Xxxxx X. Xxxxxxx, III
Telephone: (000) 000-0000
FAX: (000) 000-0000
COMMITMENT SCHEDULE
PRINCIPAL
AMOUNT OF
REVOLVING LOAN TERM LOANS ON
LENDER COMMITMENT CLOSING DATE
------ -------------- --------------
Bank One, NA (Main Office Chicago) $71,500,000.00 $63,461,539.30
Xxxxxxx Xxxxx Credit Partners L.P. $71,500,000.00 $28,846,153.85
Bank of America, N.A. $71,500,000.00 $28,846,153.85
Fleet Capital Corporation $71,500,000.00 $28,846,153.00
State of California Public Employees' $45,000,000.00 -
Retirement System
Fortis Capital Corp. $35,000,000.00 -
PNC Bank, National Association $25,000,000.00 -
Xxxxx Fargo Foothill, LLC $25,000,000.00 -
Siemens Financial Services, Inc. $15,000,000.00 -
PB Capital Corporation $15,000,000.00 -
Guaranty Bank $15,000,000.00 -
U.S. Bank, National Association $14,000,000.00 -
Hibernia National Bank $10,000,000.00 -
The Frost National Bank $ 7,500,000.00 -
Natexis Banques Populaires $ 7,500,000.00 -
PRICING SCHEDULE
--------------------------------------------------------------------------------------------------------------
Applicable
Margin for
Revolving Loans Level I Status Level II Status Level III Status Level IV Status
--------------------------------------------------------------------------------------------------------------
Eurodollar Rate 2.25% 2.75% 3.00% 3.25%
--------------------------------------------------------------------------------------------------------------
Floating Rate 0.50% 1.00% 1.25% 1.50%
--------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------
Applicable
Margin for
Term Loans Level I Status Level II Status Level III Status Level IV Status
--------------------------------------------------------------------------------------------------------------
Eurodollar Rate 3.00% 3.25% 3.25% 3.50%
--------------------------------------------------------------------------------------------------------------
Floating Rate 1.25% 1.5% 1.5% 1.75%
--------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------
Applicable Fee Rate Tier I Utilization Tier II Utilization Tier III Utilization
------------------------------------------------------------------------------------------------------------
Commitment Fee 0.25% 0.50% 0.75%
------------------------------------------------------------------------------------------------------------
For the purposes of this Schedule, the following terms have the
following meanings, subject to the final paragraph of this Schedule:
"Level I Status" exists at any date if, as of the last day of the
applicable fiscal quarter of the Borrower, average daily Excess Availability for
such fiscal quarter was greater than 45% of the average weekly Borrowing Base
for such fiscal quarter.
"Level II Status" exists at any date if, as of the last day of the
applicable fiscal quarter, (i) the Borrower has not qualified for Level I Status
and (ii) average daily Excess Availability for such fiscal quarter was less than
or equal to 45% of the average weekly Borrowing Base for such fiscal quarter but
greater than 30% of the average weekly Borrowing Base for such fiscal quarter.
"Level III Status" exists at any date if, as of the last day of the
applicable fiscal quarter, (i) the Borrower has not qualified for Level I Status
or Level II Status, and (ii) average daily Excess Availability for such fiscal
quarter was less than or equal to 30% of the average weekly Borrowing Base for
such fiscal quarter but greater than 15% of the average weekly Borrowing Base
for such fiscal quarter.
"Level IV Status" exists at any date if, as of the last day of the
applicable fiscal quarter, (i) the Borrower has not qualified for Level I
Status, Level II Status or Level III Status and (ii)
average daily Excess Availability for such fiscal quarter was less than or equal
to 15% of the average weekly Borrowing Base for such fiscal quarter.
"Status" means either Level I Status, Level II Status, Level III Status
or Level IV Status.
"Tier I Utilization" means, on any date of determination, the average
Aggregate Outstanding Revolving Loan Credit Exposure on such date was greater
than 66% of the Aggregate Revolving Loan Commitment on such date.
"Tier II Utilization" means, on any date of determination, the average
Aggregate Outstanding Revolving Loan Credit Exposure on such date was greater
than or equal to 33-1/3rd% of the Aggregate Revolving Loan Commitment on such
date but less than or equal to 66% of the Aggregate Revolving Loan Commitment on
such date.
"Tier III Utilization" means, on any date of determination, the average
Aggregate Outstanding Revolving Loan Credit Exposure on such date was less than
33-?rd% of the Aggregate Revolving Loan Commitment on such date.
The Applicable Margin for Revolving Loans and Term Loans and Applicable
Fee Rate shall be determined in accordance with the foregoing table based on the
Borrower's Status for the applicable fiscal quarter. Such Status shall be
determined based upon the Interim Collateral Reports and Monthly Collateral
Reports delivered for such fiscal quarter. Adjustments, if any, to the
Applicable Margin for Revolving Loans and Term Loans or Applicable Fee Rate
shall be effective five Business Days after the Agent has received all of the
applicable Interim Collateral Reports and Monthly Collateral Reports. If the
Borrower fails to deliver such Interim Collateral Reports and Monthly Collateral
Reports to the Agent at the time required pursuant to Section 6.1, then the
Applicable Margin for Revolving Loans and Term Loans and Applicable Fee Rate
shall be the highest Applicable Margin for Revolving Loans and Term Loans and
Applicable Fee Rate set forth in the foregoing table until the date on which
such Interim Collateral Reports and Monthly Collateral Reports are so delivered.
Notwithstanding the foregoing, solely with respect to the Applicable Margin for
Revolving Loans and the Applicable Fee Rate, for the period beginning on the
Closing Date and ending on the fifth Business Day following the date on which
the last Interim Collateral Report and the last Monthly Collateral Report are
required to be delivered pursuant to Section 6.1 for the fiscal quarter ending
June 30, 2003, Level IV Status and Tier III Utilization shall be in effect.
