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EXHIBIT 99.2
CREDIT AGREEMENT
dated as of August 22, 2000
among
TC PIPELINES, LP,
THE LENDERS PARTY HERETO,
and
BANK ONE, NA
As Agent
BANC ONE CAPITAL MARKETS, INC.
ACTED AS LEAD ARRANGER AND SOLE BOOK RUNNER
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TABLE OF CONTENTS
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PAGE
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ARTICLE I. DEFINITIONS 1
ARTICLE II. THE CREDIT 9
2.1. Commitment 9
2.2. RequiredPayments; Termination 10
2.3. Ratable Loans 10
2.4. Types of Advances 10
2.5. Commitment Fee; Reductions in Aggregate Commitment 10
2.6. Minimum Amount of Each Advance 10
2.7. Optional Principal Payments 10
2.8. Method of Selecting Types and Interest Periods for New Advances 10
2.9. Conversion and Continuation of Outstanding Advances 11
2.10. Changes in Interest Rate, etc. 11
2.11. Rates Applicable After Default 12
2.12. Method of Payment 12
2.13. Noteless Agreement; Evidence of Indebtedness 12
2.14. Telephonic Notices 13
2.15. Interest Payment Dates; Interest and Fee Basis 13
2.16. Notification of Advances, Interest Rates, Prepayments and
Commitment Reductions 14
2.17. Lending Installations 14
2.18. Non-Receipt of Funds by the Agent 14
ARTICLE III. YIELD PROTECTION; TAXES 14
3.1. Yield Protection 14
3.2. Changes in Capital Adequacy Regulations 15
3.3. Availability of Types of Advances 16
3.4. Funding Indemnification 16
3.5. Taxes 16
3.6. Lender Statements; Survival of Indemnity 18
3.7. Substitution of Lender 18
ARTICLE IV. CONDITIONS PRECEDENT 19
4.1. Initial Advance 19
4.2. Each Advance 20
ARTICLE V. REPRESENTATIONS AND WARRANTIES 20
5.1. Existence and Standing 21
5.2. Authorization and Validity 21
5.3. No Conflict; Government Consent 21
5.4. Financial Statements 21
5.5. Material Adverse Change 21
5.6. Taxes 22
5.7. Litigation and Contingent Obligations 22
5.8. ERISA 22
5.9. Accuracy of Information 22
5.10. Regulation U 22
5.11. Material Agreements 22
5.12. Compliance With Laws 22
5.13. Plan Assets; Prohibited Transactions 23
5.14. Environmental Matters 23
(i)
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5.15. Investment Company Act 23
5.16. Public Utility Holding Company Act 23
ARTICLE VI. COVENANTS 23
6.1. Financial Reporting 23
6.2. Use of Proceeds 24
6.3. Notice of Default 25
6.4. Conduct of Business 25
6.5. Taxes 25
6.6. Insurance 25
6.7. Compliance with Laws 25
6.8. Maintenance of Properties 25
6.9. Inspection 25
6.10. Distributions 26
6.11. Amendments to Cash Distribution Policies and Partnership Agreement of NBPC 26
6.12. Indebtedness and Contingent Obligations 26
6.13. Merger; Sale of Assets 26
6.14. Investments and Acquisitions 27
6.15. Total Debt/Capitalization 27
6.16. Liens 27
6.17. Affiliates 28
6.18. Amendments to Partnership Agreement 28
6.19. Restrictive Agreements 28
6.20. Plans 29
ARTICLE VII. DEFAULTS 29
ARTICLE VIII. ACCELERATION, WAIVERS, AMENDMENTS AND REMEDIES 31
8.1. Acceleration 31
8.2. Amendments 31
8.3. Preservation of Rights 32
ARTICLE IX. GENERAL PROVISIONS 32
9.1. Survival of Representations 32
9.2. Governmental Regulation 32
9.3. Headings 32
9.4. Entire Agreement 32
9.5. Several Obligations; Benefits of this Agreement 32
9.6. Expenses; INDEMNIFICATION 33
9.7. Numbers of Documents 33
9.8. Accounting 33
9.9. Severability of Provisions 33
9.10. Nonliability of Lenders 34
9.11. Confidentiality 34
9.12. Nonreliance 34
9.13. Disclosure 34
ARTICLE X. THE AGENT 34
10.1. Appointment; Nature of Relationship 34
10.2. Powers 35
10.3. General Immunity 35
(ii)
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10.4. No Responsibility for Loans, Recitals, etc. 35
10.5. Action on Instructions of Lenders 35
10.6. Employment of Agents and Counsel 36
10.7. Reliance on Documents; Counsel 36
10.8. Agent's Reimbursement and Indemnification 36
10.9. Notice of Default 37
10.10. Rights as a Lender 37
10.11. Lender Credit Decision 37
10.12. Successor Agent 37
10.13. Agent and Arranger Fees 38
10.14. Delegation to Affiliates 38
ARTICLE XI. SETOFF; RATABLE PAYMENTS 38
11.1. Setoff 38
11.2. Ratable Payments 38
ARTICLE XII. BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS 39
12.1. Successors and Assigns 39
12.2. Participations 39
12.2.1. Permitted Participants; Effect 39
12.2.2. Voting Rights 39
12.2.3. Benefit of Setoff 40
12.3. Assignments 40
12.3.1. Permitted Assignments 40
12.3.2. Effect; Effective Date 40
12.4. Dissemination of Information 41
12.5. Tax Treatment 41
ARTICLE XIII. NOTICES 41
13.1. Notices 41
13.2. Change of Address 41
ARTICLE XIV. LIMITATIONS ON RECOURSE 42
14.1. Nonrecourse Obligations 42
14.2. Exceptions 42
14.3. Survival; Third Party Beneficiaries 42
ARTICLE XV. COUNTERPARTS 43
ARTICLE XVI. CHOICE OF LAW; JURISDICTION; WAIVER OF JURY TRIAL 43
16.1. CHOICE OF LAW 43
16.2. CONSENT TO JURISDICTION 44
16.3. WAIVER OF JURY TRIAL 44
EXHIBIT A. FORM OF OPINION 47
EXHIBIT B. COMPLIANCE CERTIFICATE 50
EXHIBIT C. ASSIGNMENT AGREEMENT 52
EXHIBIT D. LOAN/CREDIT RELATED MONEY TRANSFER INSTRUCTION 59
EXHIBIT E. NOTE 60
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(iii)
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CREDIT AGREEMENT
This Credit Agreement, dated as of August 22, 2000, is among TC
PipeLines, LP, a Delaware limited partnership, the Lenders and Bank One, NA, a
national banking association having its principal office in Chicago, Illinois,
as Agent. The parties hereto agree as follows:
ARTICLE I
DEFINITIONS
As used in this Agreement:
"Acceptable Credit Rating" means, with respect to any Person at any
particular time, that (i) the rating issued by Moody's Investors Service, Inc.
and then in effect with respect to such Person's senior unsecured long-term debt
securities without third-party credit enhancement is Baa2 or better, and (ii)
the rating issued by Standard and Poor's Ratings Services, a division of The
McGraw Hill Companies, Inc., and then in effect with respect to such Person's
senior unsecured long-term debt securities without third-party credit
enhancement is BBB or better.
"Acquisition" means any transaction, or any series of related
transactions, consummated on or after the date of this Agreement, 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
or voting power) of the outstanding ownership interests of a partnership or
limited liability company.
"Advance" means a borrowing hereunder, (i) made by 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.
"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 owns 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 stock, 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, and any successor Agent appointed pursuant to Article X.
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"Aggregate Commitment" means the aggregate of the Commitments of all
the Lenders, as reduced from time to time pursuant to the terms hereof.
"Agreement" means this credit agreement, as it may be amended,
supplemented or otherwise modified and in effect from time to time.
"Alternate Base Rate" means, for any day, a rate of interest per annum
equal to the higher of (i) the Prime Rate for such day and (ii) the sum of the
Federal Funds Effective Rate for such day plus 1/2% per annum.
"Applicable Fee Rate" means, at any time, the percentage rate per annum
at which commitment fees are accruing on the unused portion of the Aggregate
Commitment at such time as set forth in the Pricing Schedule.
"Applicable Margin" means, with respect to Eurodollar Advances at any
time, the percentage rate per annum which is applicable at such time with
respect to Eurodollar Advances as set forth in the Pricing Schedule.
"Arranger" means Banc One Capital Markets, Inc., a Delaware
corporation, and its successors, in its capacity as Lead Arranger and Sole Book
Runner.
"Article" means an article of this Agreement unless another document is
specifically referenced.
"Authorized Officer" means any of the President and Chief Executive
Officer, the Senior Vice-President and Chief Financial Officer, any other
Vice-President and the Controller of the General Partner, acting singly.
"Bank One" means Bank One, NA, a national banking association having
its principal office in Chicago, Illinois, in its individual capacity, and its
successors.
"Borrower" means TC PipeLines, LP, a Delaware limited partnership, and
its successors and assigns.
"Borrowing Date" means a date on which an Advance is made hereunder.
"Borrowing Notice" is defined in Section 2.8.
"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 and 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 United States
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 for the conduct of substantially all of their commercial lending
activities and interbank wire transfers can be made on the Fedwire system.
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"Capitalization" means, at any date of determination thereof, the sum
of (i) Total Debt as of such date, plus (ii) the partners' capital of the
Borrower determined in accordance with GAAP as of such date.
"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 GAAP.
"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 GAAP.
"Cash Equivalent Investments" means (i) short-term obligations of, or
fully guaranteed by, the United States of America, (ii) commercial paper rated
A-l or better by Standard and Poor's Ratings Services, a division of The McGraw
Hill Companies, Inc., or P-l or better by Moody's Investors Service, Inc., (iii)
demand deposit accounts maintained in the ordinary course of business, (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, and (v) money market funds managed, operated or maintained by fund
managers of recognized national standing.
"Closing Date" means the date on which the Borrower satisfies all of
the conditions precedent set forth in Section 4.1.
"Code" means the Internal Revenue Code of 1986, as amended, reformed or
otherwise modified from time to time.
"Commitment" means, for each Lender, the obligation of such Lender to
make Loans not exceeding the amount set forth opposite its signature below, as
it may be modified as a result of any assignment that has become effective
pursuant to Section 12.3.2, or as otherwise modified from time to time pursuant
to the terms hereof.
"Condemnation" is defined in Section 7.8.
"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, including, without limitation, any comfort letter, operating
agreement, take-or-pay contract, application for a Letter of Credit or the
obligations of any such Person as general partner of a partnership with respect
to the liabilities of the partnership.
"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
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control which, together with the Borrower or any of its Subsidiaries, are
treated as a single employer under Section 414 of the Code.
"Conversion/Continuation Notice" is defined in Section 2.9.
"Default" means an event described in Article VII.
"Environmental Laws" means any and all federal, state, local and
foreign 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 rule or regulation issued thereunder.
"Eurodollar Advance" means an Advance which, except as otherwise
provided in Section 2.11, 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
Interest Settlement Rate for deposits in U.S. dollars appearing on Reuters
Screen FRBD as of 11:00 a.m. (London time) two Business Days prior to the first
day of such Interest Period, and having a maturity equal to such Interest
Period, PROVIDED that, (i) if Reuters Screen FRBD is not available to the Agent
for any reason, the applicable Eurodollar Base Rate for the relevant Interest
Period shall instead be the applicable British Bankers' Association Interest
Settlement Rate for deposits in U.S. dollars as reported by any other generally
recognized financial information service as of 11:00 a.m. (London time) two
Business Days prior to the first day of such Interest Period, and having a
maturity equal to such Interest Period, and (ii) if no such British Bankers'
Association Interest Settlement 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 U.S. dollars with first-class banks in the
London interbank market at approximately 11:00 a.m. (London time) two 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 that, except as otherwise provided in
Section 2.11, 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 Applicable Margin
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"Excluded Taxes" means, in the case of each Lender or applicable
Lending Installation and the Agent, (i) taxes imposed on its overall net income,
and (ii) franchise taxes imposed on it, by (A) the jurisdiction under the laws
of which such Lender or the Agent is incorporated or organized or (B) 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.
"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.
"Floating Rate" means, for any day, a rate per annum equal to the
Alternate Base Rate for such day, changing when and as the Alternate Base Rate
changes.
"Floating Rate Advance" means an Advance which, except as otherwise
provided in Section 2.11, bears interest at the Floating Rate.
"Floating Rate Loan" means a Loan that, except as otherwise provided in
Section 2.11, bears interest at the Floating Rate.
"GAAP" means United States generally accepted accounting principles
consistently applied. Accounting principles are applied on a "consistent basis"
when the accounting principles observed in a current period are comparable in
all material respects to the accounting principles applied in a preceding
period.
"General Partner" means TC PipeLines GP, Inc., a Delaware corporation,
and the general partner of the Borrower.
"Indebtedness" of a Person means such Person's (i) obligations for
borrowed money, (ii) obligations representing the deferred purchase price of
Property or services (other than 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, acceptances, or other
instruments, (v) obligations of such Person to purchase securities or other
Property arising out of or in connection with the sale of the same or
substantially similar securities or Property, and (vi) Capitalized Lease
Obligations.
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"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 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.
"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 certificate of deposit owned by such Person;
and structured notes, derivative financial instruments and other similar
instruments or contracts owned by such Person.
"Lenders" means the lending institutions listed on the signature pages
of this Agreement and their respective successors and assigns.
"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 otherwise selected by such Lender or the Agent
pursuant to Section 2.17.
"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).
"Loan" means, with respect to a Lender, such Lender's loan made
pursuant to Article II (or any conversion or continuation thereof).
"Loan Documents" means this Agreement and any Notes, if any, issued
pursuant to Section 2.13.
"Material Adverse Effect" means any single circumstance or event (or
any series of circumstances or events) that has a material adverse effect on (i)
the business, Property, condition (financial or otherwise), results of
operations, or prospects of the Borrower or any Owned Person, (ii) the ability
of the Borrower to perform its obligations under the Loan Documents, or
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(iii) the validity or enforceability of any of the Loan Documents or the
rights or remedies of the Agent or the Lenders thereunder.
"NBPC" means Northern Border Pipeline Company, a Texas general
partnership.
"Non-U.S. Lender" is defined in Section 3.5(d).
"Note" means any promissory note issued at the request of a Lender
pursuant to Section 2.13 in the form of Exhibit E.
"Obligations" means all unpaid principal of and accrued and unpaid
interest on the Loans, all accrued and unpaid fees and all expenses,
reimbursements, indemnities and other obligations of the Borrower to the Lenders
or to any Lender, the Agent or any indemnified party arising under the Loan
Documents.
"Other Taxes" is defined in Section 3.5(b).
"Owned Person" (i) any Subsidiary of the Borrower, (ii) NBPC, or (iii)
any other corporation, partnership, limited liability company, association,
joint venture or similar business organization in which the Borrower or any of
its Subsidiaries has an ownership interest.
"Partnership Agreement" means the Amended and Restated Agreement of
Limited Partnership of TC PipeLines, LP dated as of May 28, 1999 among TC
PipeLines GP, Inc., as the General Partner, and TransCan Northern Ltd., as the
Organizational Limited Partner, together with any other Persons who have or may
become partners in the partnership formed thereunder as provided therein.
"Participants" is defined in Section 12.2.1.
"Payment Date" means the last day of each March, June, September and
December.
"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.
"Plan" means an employee pension benefit 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 attached hereto 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.
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"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.
"Purchasers" is defined in Section 12.3.1.
"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 for the purpose of purchasing or carrying margin
stocks applicable to member banks of the Federal Reserve System.
"Remaining Dollar-Years" means, with respect to any Indebtedness as of
the date of any determination thereof, the amount obtained by (i) multiplying
(A) the amount of each required repayment of principal required to be made with
respect to such Indebtedness (including repayment at final maturity), by (B) the
number of years (calculated to the nearest one-twelfth) between the date of
determination and the date of that required repayment, and (ii) totaling the
products obtained in clause (i).
"Required Lenders" means Lenders in the aggregate having at least
66-2/3% of the Aggregate Commitment or, if the Aggregate Commitment has been
terminated, Lenders in the aggregate holding at least 66-2/3% of the aggregate
unpaid principal amount of the outstanding Advances.
"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.
"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.
"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.
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"Substantial Portion" means, with respect to the Property of the
Borrower or any Owned Person, Property which (i) represents more than 10% of the
assets of the Borrower or such Owned Person as would be shown in the financial
statements of the Borrower or such Owned Person as at the beginning of the
twelve-month period ending with the month in which such determination is made,
or (ii) is responsible for more than 10% of the net sales or of the net income
of the Borrower or such Owned Person as reflected in the financial statements
referred to in clause (i) of this definition.
"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 and Other Taxes.
"Termination Date" means August 31, 2003 or any earlier date on which
the Aggregate Commitment is reduced to zero or otherwise terminated pursuant to
the terms hereof.
"Total Debt" as of any date of determination means the sum of (i) the
aggregate principal amount of all Indebtedness of the Borrower outstanding on
such date, plus (ii) the aggregate amount of all Contingent Obligations of the
Borrower outstanding on such date.
"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.
"Unmatured Default" means an event which but for the lapse of time or
the giving of notice, or both, would constitute a Default.
"Weighted Average Life to Maturity" means, with respect to any
Indebtedness as of the date of any determination thereof, the number of years
(calculated to the nearest one-twelfth year) obtained by dividing the then
Remaining Dollar-Years of such Indebtedness by the aggregate amount of the then
outstanding principal amount of such Indebtedness.
The foregoing definitions shall be equally applicable to both the
singular and plural forms of the defined terms.
ARTICLE II
THE CREDIT
2.1. COMMITMENT. From and including the date of this Agreement and
prior to the Termination Date, each Lender severally agrees, on the terms and
conditions set forth in this Agreement, to make Loans to the Borrower from time
to time in amounts not to exceed in the aggregate at any one time outstanding
the amount of its Commitment. Subject to the terms of this Agreement, the
Borrower may borrow, repay and reborrow at any time prior to the Termination
Date. The Commitments to lend hereunder shall expire on the Termination Date.
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2.2. REQUIRED PAYMENTS; TERMINATION. Any outstanding Advances and all
other unpaid Obligations shall be paid in full by the Borrower on the
Termination Date.
2.3. RATABLE LOANS. Each Advance hereunder shall consist of Loans made
from the several Lenders ratably in proportion to the ratio that their
respective Commitments bear to the Aggregate Commitment.
2.4. TYPES OF ADVANCES. The Advances may be Floating Rate Advances or
Eurodollar Advances, or a combination thereof, selected by the Borrower in
accordance with Sections 2.8 and 2.9.
2.5. COMMITMENT FEE; REDUCTIONS IN AGGREGATE COMMITMENT. The Borrower
agrees to pay to the Agent for the account of each Lender a commitment fee at a
per annum rate equal to the Applicable Fee Rate on the daily unused portion of
such Lender's Commitment from the date hereof to and including the Termination
Date, payable on each Payment Date hereafter and on the Termination Date. The
Borrower may permanently reduce the Aggregate Commitment in whole, or in part
ratably among the Lenders in integral multiples of $1,000,000, upon at least
three 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 Commitment may not be reduced below the aggregate principal amount of
the outstanding Advances. All accrued commitment fees shall be payable on the
effective date of any termination of the obligations of the Lenders to make
Loans hereunder.
2.6. MINIMUM AMOUNT OF EACH ADVANCE. Each Eurodollar Advance shall be
in the minimum amount of $1,000,000 (and in multiples of $250,000 if in excess
thereof), and each Floating Rate Advance shall be in the minimum amount of
$1,000,000 (and in multiples of $250,000 if in excess thereof), PROVIDED,
HOWEVER, that any Floating Rate Advance may be in the amount of the unused
Aggregate Commitment.
2.7. OPTIONAL PRINCIPAL PAYMENTS. The Borrower may from time to time
prepay, without penalty or premium, all outstanding Floating Rate Advances, or,
in a minimum aggregate amount of $500,000 or any integral multiple of $500,000
in excess thereof, any portion of the outstanding Floating Rate Advances upon
one Business Day's prior notice to the Agent. The Borrower may from time to time
prepay, 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 $1,000,000 in excess thereof, any portion of the outstanding
Eurodollar Advances upon three Business Days' prior notice to the Agent.
2.8. 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.
The Borrower shall give the Agent irrevocable notice (a "Borrowing Notice") not
later than 10:00 a.m. (Chicago time) at least one Business Day before the
Borrowing Date of each Floating Rate Advance and three Business Days before the
Borrowing Date for each Eurodollar Advance, specifying:
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(a) the Borrowing Date, which shall be a Business Day, of such
Advance,
(b) the aggregate amount of such Advance,
(c) the Type of Advance selected, and
(d) in the case of each Eurodollar Advance, the Interest Period
applicable thereto.
Not later than noon (Chicago time) on each Borrowing Date, each Lender shall
make available its Loan or Loans in funds immediately available in Chicago to
the Agent at its address specified pursuant to Article XIII. The Agent will make
the funds so received from the Lenders available to the Borrower on the
applicable Borrowing Date at the Agent's aforesaid address.
2.9. CONVERSION AND CONTINUATION OF OUTSTANDING ADVANCES. Floating Rate
Advances shall continue as Floating Rate Advances unless and until such Floating
Rate Advances are converted into Eurodollar Advances pursuant to this Section
2.9 or are repaid in accordance with Section 2.2 or Section 2.7. 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 (i) such
Eurodollar Advance is or was repaid in accordance with Section 2.2 or Section
2.7, or (ii) 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 2.6, the Borrower may elect
from time to time to convert all or any part of a Floating Rate Advance into a
Eurodollar Advance. The Borrower shall give the Agent irrevocable notice (a
"Conversion/Continuation Notice") of each conversion of a Floating Rate Advance
into a Eurodollar Advance or continuation of a Eurodollar Advance not later than
10:00 a.m. (Chicago time) at least three Business Days prior to the date of the
requested conversion or continuation, specifying:
(a) the requested date, which shall be a Business Day, of such
conversion or continuation,
(b) the aggregate amount and Type of the Advance which is to be
converted or continued, and
(c) 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.
2.10. CHANGES IN INTEREST RATE, ETC. Each Floating Rate Advance 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 2.9, to but
excluding the date it is paid or is converted into a Eurodollar Advance pursuant
to Section 2.9, 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
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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
interest rate determined by the Agent as applicable to such Eurodollar
Advance based upon the Borrower's selections under Sections 2.8 and 2.9 and
otherwise in accordance with the terms hereof. No Interest Period may end
after the Termination Date.
2.11. RATES APPLICABLE AFTER DEFAULT. Notwithstanding anything to the
contrary contained in Section 2.8 or 2.9, during the continuance of a Default or
Unmatured Default 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 no Advance may be made as,
converted into or continued as a Eurodollar Advance. During the continuance of a
Default 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 for the remainder of the applicable Interest Period at the
rate otherwise applicable to such Interest Period plus 2% per annum and (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, 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 shall be applicable to all Advances
without any election or action on the part of the Agent or any Lender.
2.12. 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 1:00 p.m. (Chicago time) on the date
when due and shall 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 principal, interest and fees as it becomes due
hereunder.
2.13. NOTELESS AGREEMENT; EVIDENCE OF INDEBTEDNESS. (a) 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.
(b) The Agent shall also maintain accounts in which it will record (a)
the amount of each Loan made hereunder, the Type thereof and the Interest Period
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
and (c) the amount of any sum received by the Agent hereunder from the Borrower
and each Lender's share thereof. The Agent will provide copies of such records
to the Borrower upon request.
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(c) The entries maintained in the accounts maintained pursuant to
Sections 2.13(a) and (b) shall be PRIMA FACIE evidence of the existence and
amounts of the 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.
(d) Any Lender may request that its Loans be evidenced by a promissory
note in substantially the form of Exhibit E (a "Note"). In such event, the
Borrower shall prepare, execute and deliver to such Lender such a Note payable
to the order of such Lender. Thereafter, the Loans evidenced by such Note and
interest thereon shall at all times (including after any assignment pursuant to
Section 12.3) be represented by one or more Notes payable to the order of the
payee named therein or any assignee pursuant to Section 12.3, except to the
extent that any such Lender or assignee subsequently returns any such Note for
cancellation and requests that such Loans once again be evidenced as described
in Sections 2.13(a) and (b).
2.14. 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, if such confirmation is requested by the Agent
or any Lender, of each telephonic notice signed by an Authorized Officer. 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.
2.15. INTEREST PAYMENT DATES; INTEREST AND FEE BASIS. Interest accrued
on each Floating Rate Advance shall be payable on each Payment Date, commencing
with the first such date to occur after the date hereof, on any date on which
the Floating Rate Advance is prepaid, whether due to acceleration or otherwise,
and at maturity. Interest accrued on that portion of the outstanding principal
amount of any Floating Rate Advance converted into a Eurodollar Advance on a day
other than a Payment Date shall be payable on the date of conversion. 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 and commitment fees shall be calculated for actual
days elapsed on the basis of a 360-day year. Interest shall be payable for the
day an Advance is made but not for the day of any payment on the amount paid if
payment is received prior to 1:00 p.m. (local time) at the place of payment. If
any payment of principal of or interest on an Advance 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 in connection with such payment.
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2.16. NOTIFICATION OF ADVANCES, INTEREST RATES, PREPAYMENTS AND
COMMITMENT REDUCTIONS. Promptly after receipt thereof, the Agent will notify
each Lender of the contents of each Aggregate Commitment reduction notice,
Borrowing Notice, Conversion/Continuation Notice, and repayment notice received
by it hereunder. The Agent will notify each Lender of the interest rate
applicable to each Eurodollar Advance promptly upon determination of such
interest rate and will give each Lender prompt notice of each change in the
Alternate Base Rate.
2.17. LENDING INSTALLATIONS. Each Lender may book its Loans at any
Lending Installation selected by such Lender 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 and any Notes issued hereunder shall be
deemed held by each Lender for the benefit of any such Lending Installation.
Each Lender 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 and for whose account Loan payments are
to be made.
2.18. 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 (i) in the case of payment by a Lender, the
Federal Funds Effective Rate for such day for the first three days and,
thereafter, the interest rate applicable to the relevant Loan or (ii) in the
case of payment by the Borrower, the interest rate applicable to the relevant
Loan.
ARTICLE III
YIELD PROTECTION; TAXES
3.1. YIELD PROTECTION. If, on or after the date of this Agreement, 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 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 with any request or directive (whether or not
having the force of law) of any such authority, central bank or comparable
agency:
(a) subjects any Lender or any applicable Lending Installation
to any Taxes, or changes the basis of taxation of payments (other than
with respect to Excluded Taxes) to any Lender in respect of its
Eurodollar Loans, or
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(b) 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 (other
than reserves and assessments taken into account in determining the
interest rate applicable to Eurodollar Advances), or
(c) 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 Eurodollar Loans or reduces any
amount receivable by any Lender or any applicable Lending Installation
in connection with its Eurodollar Loans, or requires any Lender or any
applicable Lending Installation to make any payment calculated by
reference to the amount of Eurodollar Loans held or interest received
by it, by an amount deemed material by such Lender,
and the result of any of the foregoing is to increase the cost to such Lender or
applicable Lending Installation of making or maintaining its Eurodollar Loans or
Commitment or to reduce the return received by such Lender or applicable Lending
Installation in connection with such Eurodollar Loans or Commitment, then,
within 30 days of demand by such Lender, the Borrower shall pay such Lender such
additional amount or amounts as will compensate such Lender for such increased
cost or reduction in amount received. Notwithstanding the foregoing, (i) no
Lender shall be entitled to demand compensation or be compensated under this
Section 3.1 to the extent that such compensation relates to any period of time
more than 30 days prior to the date upon which such Lender first notified the
Borrower of the occurrence of the event entitling such Lender to such
compensation (unless, and to the extent, that any such compensation so demanded
shall relate to the retroactive application of any event so notified to the
Borrower), and (ii) no Lender shall be entitled to demand compensation or be
compensated under this Section 3.1 unless the circumstance giving rise to the
Lender's claim for compensation hereunder resulted in increased cost or reduced
return to such Lender generally in respect to similar borrowers in the United
States.
3.2. CHANGES IN CAPITAL ADEQUACY REGULATIONS. If a Lender determines
the amount of capital required or expected to be maintained by such Lender, any
Lending Installation of such Lender or any corporation controlling such Lender
is increased as a result of a Change, then, within 30 days of demand by such
Lender, the Borrower shall pay such Lender the amount necessary to compensate
for any shortfall in the rate of return on the portion of such increased capital
which such Lender determines is attributable to this Agreement, its Loans or its
Commitment to make Loans hereunder (after taking into account such Lender's
policies as to capital adequacy); PROVIDED, HOWEVER, that (i) no Lender shall be
entitled to demand compensation or be compensated under this Section 3.2 to the
extent that such compensation relates to any period of time more than 30 days
prior to the date upon which such Lender first notified the Borrower of the
occurrence of the event entitling such Lender to such compensation (unless, and
to the extent, that any such compensation so demanded shall relate to the
retroactive application of any event so notified to the Borrower), and (ii) no
Lender shall be entitled to demand compensation or be compensated under this
Section 3.2 unless the circumstance giving rise to the Lender's claim for
compensation hereunder resulted in a shortfall in such Lender's rate of return
generally in respect to similar borrowers in the United States. "Change" means
(i) any
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change after the date of this Agreement in the Risk-Based Capital Guidelines
or (ii) any adoption of or change in any other law, governmental or
quasi-governmental rule, regulation, policy, guideline, interpretation, or
directive (whether or not having the force of law) after the date of this
Agreement which affects the amount of capital required or expected to be
maintained by any Lender or any Lending Installation or any corporation
controlling any Lender. "Risk-Based Capital Guidelines" means (i) the
risk-based capital guidelines in effect in the United States on the date of
this Agreement, 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 date of this
Agreement.
3.3. AVAILABILITY OF TYPES OF ADVANCES. If 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 if 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, 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, 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 on the date specified by the Borrower for any reason
other than default by the Lenders, 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.
3.5. TAXES. (a) All payments by the Borrower to or for the account
of any Lender 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 from or in respect of any sum payable
hereunder to any Lender or the Agent, (i) 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 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, (ii) the Borrower
shall make such deductions, (iii) the Borrower shall pay the full amount
deducted to the relevant authority in accordance with applicable law and (iv)
the Borrower shall furnish to the Agent the original copy of a receipt
evidencing payment thereof within 30 days after such payment is made.
(b) In addition, the Borrower hereby agrees to pay any present or
future stamp or documentary taxes and any other excise or property taxes,
charges or similar levies which arise
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from any payment made hereunder or under any Note or from the execution or
delivery of, or otherwise with respect to, this Agreement or any Note ("Other
Taxes").
(c) The Borrower hereby agrees to indemnify the Agent 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 or such Lender 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 or such
Lender makes demand therefor pursuant to Section 3.6.
(d) 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 of this Agreement, (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, and (ii) deliver to each of the Borrower and the Agent a United States
Internal Revenue Form W-8 or W-9, as the case may be, and certify that it is
entitled to an exemption from United States backup withholding tax. Each
Non-U.S. Lender further undertakes to deliver to each of 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 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.
(e) For any period during which a Non-U.S. Lender has failed to provide
the Borrower with an appropriate form pursuant to Section 3.5(d) (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 Section 3.5(d), 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.
(f) 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
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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.
(g) 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 Section 3.5(g), 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(g) shall survive the
payment of the Obligations and termination of this Agreement.
3.6. LENDER STATEMENTS; SURVIVAL OF INDEMNITY. 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, disadvantageous to such
Lender. 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 the calculations upon which such Lender determined such
amount, shall include a photocopy of the relevant law, regulation, treaty,
official directive or regulatory requirement (or, if it is impracticable to
provide a photocopy, a written summary of the same) 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 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. SUBSTITUTION OF LENDER. In the event that any Lender shall
deliver to the Borrower a certificate as to an amount due under Sections 3.1
or 3.2 the Borrower may, at its sole expense and effort, require such Lender
to transfer and assign, without recourse (in accordance with Section 12.3)
all (but not less than all) of its interests, rights and obligations under
this Agreement to an assignee which shall assume such assigned obligations
(which assignee may be another Lender, if a Lender accepts such assignment);
PROVIDED, that (i) such assignment shall not conflict with any law, rule or
regulation or order of any court or other governmental authority, (ii) the
Borrower shall have received a written consent of the Agent in the case of an
entity that is not a Lender, which consent shall not be unreasonably withheld
or delayed, (iii) the Borrower or such
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assignee shall have paid to the assigning Lender in immediately available
funds (A) the principal of and interest accrued to the date of such payment
on the Loans made by the assigning Lender hereunder, (B) the amount that
would have been payable to the assigning Lender under Section 3.4 had such
Lender's outstanding Loans been prepaid on the date of such assignment, (C)
all other amounts owed to the assigning Lender hereunder, and (D) the fee
payable to the Agent pursuant to Section 12.3.2, and (iv) nothing in the
foregoing is intended or shall be construed as obligating any Lender to
locate such an assignee.
ARTICLE IV
CONDITIONS PRECEDENT
4.1. INITIAL ADVANCE. The Lenders shall not be required to make the
initial Advance hereunder unless the Borrower has furnished to the Agent with
sufficient copies for the Lenders:
(a) With respect to the Borrower,
(i) a copy, certified as of a date no more than ten days prior to
the Closing Date by the Secretary of State of Delaware, of the
Borrower's Certificate of Limited Partnership, together with all
amendments;
(ii) A copy, certified as of the Closing Date by the Secretary or
an Assistant Secretary of the General Partner, of the Partnership
Agreement, together with all amendments, as in effect on the Closing
Date;
(iii) a good standing certificate for the Borrower from the
Secretary of State of Delaware dated no more than ten days prior to
the Closing Date;
(iv) a good standing certificate for the Borrower from the
Secretary of the Commonwealth of Massachusetts dated no more than ten
days prior to the Closing Date.
(b) With respect to the General Partner,
(i) a copy, certified as of a date no more than ten days prior to
the Closing Date by the Secretary of State of Delaware, of the General
Partner's certificate of incorporation, together with all amendments;
(ii) a good standing certificate for the General Partner from the
Secretary of State of Delaware dated no more than ten days prior to
the Closing Date;
(iii) a good standing certificate for the General Partner from
the Secretary of the Commonwealth of Massachusetts dated no more than
ten days prior to the Closing Date;
(iv) a copy, certified as of the Closing Date by the Secretary or
an Assistant Secretary of the General Partner, of the General
Partner's by-laws, together with all amendments, as in effect on the
Closing Date;
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(v) a copy, certified as of the Closing Date by the Secretary or
an Assistant Secretary of the General Partner, of resolutions of the
General Partner's Board of Directors authorizing the General Partner's
execution and delivery on behalf of the Borrower of the Loan
Documents; and
(vi) an incumbency certificate, executed by the Secretary of an
Assistant Secretary of the General Partner as of the Closing Date,
which shall identify by name and title and bear the signatures of the
officers of the General Partner authorized to act on behalf of the
General Partner in its capacity as a general partner of the Borrower,
upon which certificate the Agent and the Lenders shall be entitled to
rely until informed of any change in writing by the Borrower.
(c) Evidence satisfactory to the Agent that the Borrower has paid the
upfront fee agreed to by the Borrower and Bank One.
(d) A written opinion of counsel to the Borrower and the General
Partner, addressed to the Lenders in substantially the form of Exhibit A.
(e) Any Notes requested by a Lender pursuant to Section 2.13 payable to
the order of each such requesting Lender.
(f) 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.
(g) Such other documents as any Lender or its counsel may have
reasonably requested.
4.2. EACH ADVANCE. The Lenders shall not be required to make any
Advance unless on the applicable Borrowing Date:
(a) There exists no Default or Unmatured Default.
(b) The representations and warranties contained in Article V are true
and correct as of such Borrowing Date except to the extent any such
representation or warranty is stated to relate solely to an earlier date, in
which case such representation or warranty shall have been true and correct on
and as of such earlier date.
Each Borrowing Notice with respect to each such Advance shall constitute a
representation and warranty by the Borrower that the conditions contained in
Sections 4.2(a) and (b) have been satisfied. Any Lender may require a duly
completed compliance certificate in substantially the form of Exhibit B as a
condition to making an Advance.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants to the Lenders that:
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5.1. EXISTENCE AND STANDING. The Borrower is a limited partnership duly
and properly organized, validly existing and in good standing under the laws of
the State of Delaware and has all requisite authority to conduct its business in
each jurisdiction in which its business is conducted.
5.2. AUTHORIZATION AND VALIDITY. The General Partner has the power and
authority and legal right to execute and deliver the Loan Documents on behalf of
the Borrower. The Borrower has the power and authority and legal right to
perform its obligations under the Loan Documents. The execution and delivery of
the Loan Documents by the General Partner on behalf of the Borrower have been
duly authorized by proper corporate proceedings on behalf of the General
Partner. The execution and delivery of the Loan Documents by the General Partner
on behalf of the Borrower and the performance by the Borrower of its Obligations
thereunder have been duly authorized in accordance with the Partnership
Agreement. The Loan Documents constitute legal, valid and binding obligations of
the Borrower enforceable against the Borrower in accordance with their terms,
except as enforceability may be limited by bankruptcy, insolvency or similar
laws affecting the enforcement of creditors' rights generally.
5.3. NO CONFLICT; GOVERNMENT CONSENT. Neither the execution and
delivery by the General Partner on behalf of the Borrower 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, the General
Partner or any Owned Person, or (ii) the Partnership Agreement, or (iii) the
provisions of any indenture, instrument or agreement to which the Borrower, the
General Partner or any Owned Person is a party or is subject, or by which it, or
its Property, is bound, or conflict with or constitute a default thereunder, or
result in, or require, the creation or imposition of any Lien in, of or on the
Property of the Borrower or any Owned Person pursuant to the terms of any such
indenture, instrument or agreement. No order, consent, adjudication, approval,
license, authorization, or validation of, or filing, recording or registration
with, or exemption by, or other action in respect of any governmental or public
body or authority, or any subdivision thereof, is required to be obtained by the
Borrower, the General Partner or any Owned Person 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, 1999 audited financial
statements of the Borrower heretofore delivered to the Lenders were prepared in
accordance with GAAP in effect on the date such statements were prepared and
fairly present the financial condition and operations of the Borrower at such
date and the results of its operations for the period then ended.
5.5. MATERIAL ADVERSE CHANGE. Since December 31, 1999 there has been no
change in the business, Property, prospects, condition (financial or otherwise)
or results of operations of the Borrower or any Owned Person which could
reasonably be expected to have a Material Adverse Effect.
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5.6. TAXES. The Borrower has filed all United States federal tax
returns and all other tax returns which are required to be filed and has paid
all taxes due pursuant to said returns or pursuant to any assessment received by
the Borrower, except such taxes, if any, as are being contested in good faith
and as to which adequate reserves have been provided. No tax liens have been
filed and no claims are being asserted with respect to any such taxes. The
charges, accruals and reserves on the books of the Borrower 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 Owned Person 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 such litigation, arbitration
or proceeding, the Borrower has no material contingent obligations not provided
for or disclosed in the financial statements referred to in Section 5.4.
5.8. ERISA. There are no Plans.
5.9. ACCURACY OF INFORMATION. No information, exhibit or report
furnished by the Borrower or any of its Subsidiaries to the Agent or to any
Lender in connection with the negotiation of, or compliance with, the Loan
Documents contained any material misstatement of fact or omitted to state a
material fact or any fact necessary to make the statements contained therein not
misleading.
5.10. REGULATION U. Margin stock (as defined in Regulation U)
constitutes less than 25% of the value of those assets of the Borrower which are
subject to any limitation on sale, pledge, or other restriction hereunder.
5.11. MATERIAL AGREEMENTS. Neither the Borrower nor any Owned Person is
a party to any agreement or instrument or subject to any restriction contained
in its partnership agreement, charter, articles or certificate of incorporation
or other organizational documents that could reasonably be expected to have a
Material Adverse Effect. Neither the Borrower nor any Owned Person is in default
in the performance, observance or fulfillment of any of the obligations,
covenants or conditions contained in (i) any agreement 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.
5.12. COMPLIANCE WITH LAWS. The Borrower, and to the knowledge of the
Borrower each Owned Person, has 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 its Property except for any
failure to comply with any of the foregoing which could not reasonably be
expected to have a Material Adverse Effect. Neither the Borrower, nor to the
knowledge of the Borrower any Owned Person, has received any notice of
investigation or to the effect that its operations fail to be in material
compliance with any of the requirements of applicable federal,
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state and local environmental, health and safety statutes and regulations,
which investigation or non-compliance could reasonably be expected to have a
Material Adverse Effect.
5.13. 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), the Borrower is an "operating company" as defined in 29 C.F.R
2510-101(c), and neither the execution of this Agreement nor the making of Loans
hereunder gives rise to a prohibited transaction within the meaning of Section
406 of ERISA or Section 4975 of the Code.
5.14. 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 the Owned Persons, in the course of which they
identify and evaluate potential risks and liabilities accruing to the Borrower
and the Owned Persons 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 to the knowledge of the Borrower any Owned Person, 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.
5.15. INVESTMENT COMPANY ACT. Neither the Borrower nor any Owned Person
is an "investment company" or a company "controlled" by an "investment company",
within the meaning of the Investment Company Act of 1940, as amended.
5.16. PUBLIC UTILITY HOLDING COMPANY ACT. Neither the Borrower nor any
Owned Person is a "holding company" or a "subsidiary company" of a "holding
company", or an "affiliate" of a "holding company" or of a "subsidiary company"
of a "holding company", within the meaning of the Public Utility Holding Company
Act of 1935, as amended.
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 of its Subsidiaries, a system of accounting established and administered in
accordance with GAAP, and furnish to the Lenders:
(a) Within 105 days after the close of each of its fiscal years,
an unqualified (except for qualifications relating to changes in
accounting principles or practices reflecting changes in GAAP and
required or approved by the Borrower's independent
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certified public accountants) audit report certified by independent
chartered accountants acceptable to the Lenders, prepared in
accordance with GAAP for itself and its consolidated Subsidiaries, if
any, including a balance sheet as of the end of such period, a related
profit and loss statement, and related statements of changes in
partner's capital and cash flows, accompanied by (i) any management
letter prepared by said accountants, and (ii) a report of said
accountants that, in the course of their examination necessary for
their report on the foregoing, nothing came to their attention that
caused them to believe that there exists any Default or Unmatured
Default, or if such accountants believe that any Default or Unmatured
Default shall exist, stating the nature and status thereof.
(b) Within 60 days after the close of each of the first three
quarterly periods of each of its fiscal years, for itself and its
consolidated Subsidiaries, if any, an unaudited balance sheet as at the
close of each such quarter, a profit and loss statement and a statement
of changes in partner's capital for such quarter and for the period
from the beginning of such fiscal year to the end of such quarter, and
a statement of cash flows for the period from the beginning of such
fiscal year to the end of such quarter, all certified by the chief
executive officer, chief financial officer or controller of the General
Partner pursuant to the Compliance Certificate delivered pursuant to
Section 6.1(c).
(c) Together with the financial statements required under
Sections 6.1(a) and 6.1(b), a compliance certificate in substantially
the form of Exhibit B signed by the chief executive officer, chief
financial officer or controller of the General Partner stating that (A)
no Default or Unmatured Default exists, or if any Default or Unmatured
Default exists, stating the nature and status thereof, and (B) showing
the calculations necessary to determine compliance with Section 6.15.
(d) As soon as possible 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 Owned Person is or may be liable to any
Person as a result of the release by the Borrower, any Owned Person 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 Owned Person, which, in either case, could reasonably
be expected to have a Material Adverse Effect.
(e) Promptly upon the filing thereof, copies of all
registration statements and annual, quarterly, monthly or other regular
reports which the Borrower files with the Securities and Exchange
Commission, if any.
(f) Such other information (including non-financial
information) as the Agent or any Lender may from time to time
reasonably request.
6.2. USE OF PROCEEDS. The Borrower will use the proceeds of the
Advances to finance capital expenditures and for other general purposes. The
Borrower will not use any of the proceeds of the Advances to purchase or carry
any "margin stock" (as defined in Regulation U) or to make any Acquisition
prohibited by Section 6.14.
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6.3. NOTICE OF DEFAULT. The Borrower will give prompt 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, will cause each of its
Subsidiaries to, and will use its best efforts to cause each Owned Person which
is not a Subsidiary of the Borrower 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 or
organized, validly existing and in good standing as a Delaware limited
partnership and maintain all requisite authority to conduct its business in each
jurisdiction in which its business is conducted.
6.5. TAXES. The Borrower will 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 (excluding taxes paid by a Partner), 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.
6.6. INSURANCE. The Borrower will, will cause each of its Subsidiaries
to, and will use its best efforts to cause each Owned Person which is not a
Subsidiary of the Borrower to, maintain with financially sound and reputable
insurance companies insurance on all of its Property in such amounts and
covering such risks as is consistent with sound business practice, and the
Borrower will furnish to any Lender upon request full information as to the
insurance carried.
6.7. COMPLIANCE WITH LAWS. The Borrower will, will cause each of its
Subsidiaries to, and will use its best efforts to cause each Owned Person which
is not a Subsidiary of the Borrower to, comply in all material respects with all
laws, rules, regulations, orders, writs, judgments, injunctions, decrees or
awards (including, without limitation, all Environmental Laws) to which it may
be subject the failure to comply with which could reasonably be expected to have
a Material Adverse Effect.
6.8. MAINTENANCE OF PROPERTIES. The Borrower will, will cause each of
its Subsidiaries to, and will use its best efforts to cause each Owned Person
which is not a Subsidiary of the Borrower to, do all things necessary to
maintain, preserve, protect and keep its Property in good repair, working order
and condition, 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.
6.9. INSPECTION. The Borrower will permit the Agent and the Lenders, by
their respective representatives and agents, to inspect any of the Property,
books and financial records of the Borrower, to examine and make copies of the
books of accounts and other financial records of the Borrower, and to discuss
the affairs, finances and accounts of the Borrower with, and to be advised as to
the same by, its officers at such reasonable times and intervals as the Agent or
any Lender may designate during regular business hours and without interfering
with the Borrower's business operations upon one (1) Business Day's prior
notice.
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6.10. DISTRIBUTIONS. The Borrower will not declare or pay any
distributions to its partners or redeem, repurchase or otherwise acquire or
retire any of its partnership interests at any time outstanding if a Default or
Unmatured Default has occurred and is continuing or would occur upon such action
by the Borrower. It is expressly acknowledged and understood that, if a Default
or Unmatured Default has not occurred or is no longer continuing, nothing in
this Section 6.10 shall be deemed to restrict the payment of distributions to
the Borrower's partners.
6.11. AMENDMENTS TO CASH DISTRIBUTION POLICIES AND PARTNERSHIP
AGREEMENT OF NBPC. The Borrower will not consent to, vote in favor of or permit
any amendment of NBPC's partnership agreement or the cash distribution policies
of NBPC in any manner which would result in a Material Adverse Effect or
materially adversely affect the rights and remedies of the Lenders under and in
connection with this Agreement or any other Loan Document.
6.12. INDEBTEDNESS AND CONTINGENT OBLIGATIONS. The Borrower will not,
and it will not permit any Subsidiary to, create, incur or suffer to exist any
Indebtedness or Contingent Obligations, except:
(a) The Loans.
(b) Up to $40,000,000 of Indebtedness payable to TransCanada
PipeLine USA Ltd.
(c) Indebtedness and Contingent Obligations of the Borrower
provided that (i) the sum of (A) the aggregate principal amount of
such Indebtedness, plus (B) the aggregate amount of all outstanding
Contingent Obligations of the Borrower, does not at any time exceed
$5,000,000, and (ii) upon incurring any such Indebtedness or
Contingent Obligations the Borrower is in compliance with Section
6.15.
(d) Indebtedness of the Borrower in addition to that permitted
under subsections (a), (b) and (c) of this Section 6.12 provided that
upon incurring any such Indebtedness, (i) the Borrower is in
compliance with Section 6.15, (ii) no documentation governing any such
Indebtedness has terms more restrictive than the terms of this
Agreement, and (iii) the Weighted Average Life to Maturity of such
Indebtedness is no less than the number of years (calculated to the
nearest one-twelfth) between the date on which such Indebtedness is
incurred and the Termination Date.
6.13. MERGER; SALE OF ASSETS.
(a) The Borrower will not, and it will not permit any of its
Subsidiaries to, merge or consolidate with or into any other Person, or permit
any other Person to merge into or consolidate with it, or sell, transfer, lease
or otherwise dispose of (in one transaction or in a series of transactions) all
or any Substantial Portion of its assets, or all or any Substantial Portion of
the stock or other ownership interest in any of the Owned Persons owned by it
(in each case, whether now owned or hereafter acquired), except:
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(i) The Borrower may merge or consolidate with any other Person
provided that (A) the Borrower is the surviving entity, and (B) both
before and after giving effect to any such merger or consolidation no
Default or Unmatured Default shall have occurred and be continuing.
(ii) A Subsidiary of the Borrower may merge into the Borrower or
another Subsidiary of the Borrower.
(b) The Borrower will use its best efforts to prevent each Owned Person
which is not a Subsidiary of the Borrower from selling, transferring, leasing or
otherwise disposing of (in one transaction or in a series of transactions) any
of the assets (in each case, whether now owned or hereafter acquired) of such
Owned person or any of its Subsidiaries, except:
(i) The Borrower will not have any obligation to prevent any such
Owned Person or any of its Subsidiaries from selling inventory in the
ordinary course of business.
(ii) The Borrower will not have any obligation to prevent any
such Owned Person or any of its Subsidiaries from selling,
transferring, leasing or otherwise disposing of any of its Property
that, together with all other Property of such Owned Person or any of
its Subsidiaries previously sold, transferred, leased or otherwise
disposed of (other than sales of inventory in the ordinary course of
business) during the twelve-month period ending with the month in
which any such sale, transfer, lease or disposition occurs, do not
constitute a Substantial Portion of the Property of such Owned Person
and its Subsidiaries.
6.14. INVESTMENTS AND ACQUISITIONS. The Borrower will not, and it will
not permit any Subsidiary to, make or suffer to exist any Investment (including
without limitation, loans and advances to, and other Investments in, any Owned
Person), or commitments therefor, or create any Subsidiary, or acquire any
interest in an Owned Person, or become or remain a partner in any partnership or
joint venture, or make any Acquisition of any Person, except (i) Cash Equivalent
Investments, and (ii) Investments in Owned Persons conducting (either directly
or through Investments in other Persons) business activities consisting of (A)
the ownership, management and operation of natural gas, oil and coal pipelines
and natural gas storage facilities, the extension and expansion of such
pipelines, storage facilities and related facilities, the provision of services
related to the transportation, storage and marketing of natural gas, oil and
coal and such activities as may be incidental or related to the aforementioned,
and (B) new business activities in the area of exploration, development,
production, processing, refining, transportation, storage or marketing of gas,
oil, coal or products thereof, PROVIDED the gross income of such activities
allows the Borrower to meet the exception in Section 7704 of the Code.
6.15. TOTAL DEBT/CAPITALIZATION. The Borrower will not permit Total
Debt as at the last day of each fiscal quarter to be more than 35% of
Capitalization as at the last day of such fiscal quarter.
6.16. LIENS. The Borrower will not, and it will not permit any
Subsidiary to, create, incur, or suffer to exist any Lien in, of or on any of
its Property, except:
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(a) 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 GAAP shall have been set aside on its
books.
(b) Liens imposed by law, such as 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
90 days past due or which are being contested in good faith by
appropriate proceedings and for which adequate reserves shall have
been set aside on its books.
(c) 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.
(d) Utility easements, building restrictions and such other
encumbrances or charges against real property as are of a nature
generally existing with respect to properties of a similar character
and which do not in any material way affect the marketability of the
same or interfere with the use thereof in the business of the
Borrower.
(e) Liens securing Capitalized Lease Obligations permitted under
Section 6.12(c).
(f) Judgment Liens in existence less than 30 days after the entry
thereof or with respect to which execution has been stayed or the
payment of which is covered in full (subject to customary deductible)
by insurance maintained with responsible insurance companies.
6.17. AFFILIATES. The Borrower will not, and it 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 except in the ordinary course of business and
pursuant to the reasonable requirements of the Borrower's business and upon fair
and reasonable terms no less favorable to the Borrower than the Borrower would
obtain in a comparable arms-length transaction.
6.18. AMENDMENTS TO PARTNERSHIP AGREEMENT. The Borrower will not
materially amend or terminate, or permit or suffer any other Person to amend
materially or to terminate, the Partnership Agreement without the prior consent
of the Agent and the Required Lenders, which consent shall not be unreasonably
withheld. The Borrower shall notify the Agent and the Lender of all amendments
and modifications to the Partnership Agreement and promptly after the
effectiveness of any such amendment shall deliver to the Agent and the Lenders a
copy thereof certified as true and correct by a senior officer of the Borrower.
6.19. RESTRICTIVE AGREEMENTS. The Borrower will not permit any
Subsidiary to enter into or become subject to any agreement restricting its
ability to make any payments, directly or indirectly, by way of dividends,
distributions, advances,
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repayments of loans or advances, reimbursement of management or other
intercompany charges, expenses or accruals, other returns on investments or
any other agreement or arrangement which restricts the ability of any
Subsidiary to make any payment, directly or indirectly to the Borrower.
6.20. PLANS. The Borrow will not, and it will not permit any member
of the Controlled Group to, create or suffer to exist any Plan.
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 to the Lenders or the Agent under or in connection with
this Agreement, any Loan, or any certificate or information delivered in
connection with this Agreement or any other Loan Document shall be false on the
date as of which made in any material respect and such representation or
warranty (if capable of being corrected) continues to be incorrect for a period
of thirty (30) days after the Agent or any Lender gives written notice of such
incorrect representation and warranty to the Borrower or, if such representation
and warranty is not capable of being remedied, the true facts as they exist
would be expected to result in a Material Adverse Effect (as determined by the
Required Lenders acting reasonably).
7.2. Nonpayment of principal of any Loan when due, or nonpayment of
interest upon any Loan or of any commitment fee or other obligations under any
of the Loan Documents within five days after the same becomes due.
7.3. The breach by the Borrower of any of the terms or provisions of
Section 6.3.
7.4. The breach by the Borrower (other than a breach which constitutes
a Default under another Section of this Article VII) of any of the terms or
provisions of this Agreement which is not remedied within thirty (30) days after
written notice from the Agent or any Lender.
7.5. Failure of the Borrower or any of its Subsidiaries to pay when
due, including any applicable grace period, any of its Indebtedness aggregating
in excess of $5,000,000 ("Material Indebtedness"); or the default by the
Borrower or any of its Subsidiaries in the performance of any term, provision or
condition contained in any agreement under which any of its Material
Indebtedness was created or is governed, or any other event shall occur or
condition exist, the effect of which default or event is to cause, or to permit
the holder or holders of any of its Material Indebtedness to cause, such
Material Indebtedness to become due prior to its stated maturity; or any
Material Indebtedness of the Borrower or any of its Subsidiaries 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, any of its Subsidiaries or the General Partner shall
(i) have an order for relief entered with respect to it under the Federal
bankruptcy laws as now or hereafter in
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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, any
of its Subsidiaries or the General Partner a receiver, trustee, examiner,
liquidator or similar official shall be appointed for the Borrower, any of its
Subsidiaries or the General Partner or any Substantial Portion of the Property
of the Borrower, any of its Subsidiaries or the General Partner, or a proceeding
described in Section 7.6(iv) shall be instituted against the Borrower, any of
its Subsidiaries or the General Partner and such appointment continues
undischarged or such proceeding continues undismissed or unstayed for a period
of 30 consecutive days.
7.8. Any court, government or governmental agency shall condemn, seize
or otherwise appropriate, or take custody or control of (each a "Condemnation"),
all or any portion of the Property of the Borrower or any of 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
Condemnation occurs, constitutes a Substantial Portion of the Property of the
Borrower and its Subsidiaries.
7.9. The Borrower or any of its Subsidiaries shall fail within 30 days
to pay, bond or otherwise discharge any one or more (i) judgments or orders for
the payment of money in excess of $1,000,000 (or the equivalent thereof in
currencies other than U.S. 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) or order(s), in
any such case, is/are not stayed on appeal or otherwise being appropriately
contested in good faith.
7.10. The Borrower or any Owned Person shall (i) be the subject of any
proceeding or investigation pertaining to the release by the Borrower or any
other Person of any toxic or hazardous waste or substance into the environment,
or (ii) violate any Environmental Law, which, in the case of an event described
in clause (i) or clause (ii), could reasonably be expected to have a Material
Adverse Effect.
7.11. The General Partner shall cease to be the sole general partner of
the Borrower.
7.12. TransCanada PipeLines Limited shall cease to own, directly or
indirectly, at least 50% of the capital stock of the General Partner.
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7.13. Any of the capital stock of the General Partner shall be owned by
anyone other than (i) TransCanada PipeLines Limited or a Subsidiary thereof, or
(ii) a reputable energy company with an Acceptable Credit Rating or a Subsidiary
thereof.
ARTICLE VIII
ACCELERATION, WAIVERS, AMENDMENTS AND REMEDIES
8.1. ACCELERATION. 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 shall automatically terminate and the Obligations shall
immediately become due and payable without any election or action on the part of
the Agent or any Lender. If any other Default occurs, the Required Lenders (or
the Agent with the consent of the Required Lenders) may by written notice to the
Borrower terminate or suspend the obligations of the Lenders to make Loans
hereunder, or declare the Obligations to be due and payable, or both, whereupon
the Obligations shall become immediately due and payable, without presentment,
demand or protest, all of which the Borrower hereby expressly waives.
If, within 30 days after acceleration of the maturity of the
Obligations or termination of the obligations of the Lenders to make Loans
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 their 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 Article VIII, 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 or changing
in any manner the rights of the Lenders or the Borrower hereunder or waiving any
Default hereunder; PROVIDED, HOWEVER, that no such supplemental agreement shall,
without the consent of each Lender affected thereby:
(a) Extend the final maturity of any Loan or postpone any
regularly scheduled payment of principal of any Loan or forgive all or
any portion of the principal amount thereof, or reduce the rate or
extend the time of payment of interest or fees thereon.
(b) Reduce the percentage specified in the definition of Required
Lenders.
(c) Extend the Termination Date, or reduce the amount or extend
the payment date for, the mandatory repayments required under Section
2.2, or increase the amount of the Commitment of any Lender hereunder,
or permit the Borrower to assign its rights under this Agreement.
(d) Amend this Section 8.2.
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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 12.3.2 without obtaining the consent of any
other party to this Agreement.
8.3. PRESERVATION OF RIGHTS. No delay or omission of the Lenders 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 Loan notwithstanding the existence of a Default or the inability of
the Borrower to satisfy the conditions precedent to such Loan shall not
constitute any waiver or acquiescence. Any single or partial exercise of any
such right shall not preclude other 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 the 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 and the Lenders until the 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 Loans
herein contemplated and continue in full force and effect until the payment and
satisfaction of all of the Obligations and the termination of the Commitments.
9.2. GOVERNMENTAL REGULATION. Anything contained in this Agreement to
the contrary notwithstanding, no 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 and the Lenders and supersede
all prior agreements and understandings among the Borrower, the Agent and the
Lenders relating to the subject matter thereof other than the letter pursuant to
which the Borrower agreed to pay Bank One the upfront fee referred to in Section
4.1(c).
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 enjoy the benefits of the
provisions of Sections 9.6, 9.10 and 10.11 to the extent specifically set
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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. (a) The Borrower shall reimburse the
Agent and the Arranger for any reasonable costs, internal charges and
out-of-pocket expenses (including reasonable attorneys' fees and time charges of
attorneys for the Agent, which attorneys may be employees of the Agent) paid or
incurred by the Agent or the Arranger in connection with the preparation,
negotiation, execution, delivery, syndication, review, amendment, modification,
and administration of the Loan Documents. The Borrower also agrees to reimburse
the Agent, the Arranger and the Lenders for any reasonable costs, internal
charges and out-of-pocket expenses (including reasonable attorneys' fees and
time charges of attorneys for the Agent, the Arranger and the Lenders, which
attorneys may be employees of the Agent, the Arranger or the Lenders) paid or
incurred by the Agent, the Arranger or any Lender in connection with the
collection and enforcement of the Loan Documents.
(b) THE BORROWER HEREBY FURTHER AGREES TO INDEMNIFY THE AGENT, THE
ARRANGER, EACH LENDER, 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 LENDER OR ANY AFFILIATE IS A PARTY THERETO) 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 LOAN HEREUNDER EXCEPT TO THE EXTENT
THAT THEY ARE DETERMINED IN A FINAL NON-APPEALABLE JUDGMENT BY A COURT OF
COMPETENT JURISDICTION TO 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.
9.8. ACCOUNTING. Except as provided to the contrary herein, all
accounting terms used herein shall be interpreted and all accounting
determinations hereunder shall be made in accordance with GAAP.
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.
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9.10. NONLIABILITY OF LENDERS. The relationship between the Borrower
on the one hand and the Lenders and the Agent on the other hand shall be
solely that of borrower and lender. Neither the Agent, the Arranger nor any
Lender shall have any fiduciary responsibilities to the Borrower. Neither the
Agent, the Arranger 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 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 nor any Lender shall have any liability with
respect to, and the Borrower hereby waives, releases and agrees not to sue
for, any special, indirect or consequential 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, (ii) to legal counsel, accountants,
and other professional advisors to such Lender or to a Transferee, (iii) to
regulatory officials, (iv) to any Person as requested pursuant to or 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, and (vii) permitted by Section 12.4.
9.12. NONRELIANCE. Each Lender hereby represents that it is not
relying on or looking to any margin stock (as defined in Regulation U of the
Board of Governors of the Federal Reserve System) for the repayment of the
Loans provided for herein.
9.13. DISCLOSURE. The Borrower and each Lender hereby (i) acknowledge
and agree that Bank One 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, and (ii) waive any liability of Bank One or such
Affiliate of Bank One to the Borrower or any Lender, respectively, arising out
of or resulting from such investments, loans or relationships other than
liabilities arising out of the gross negligence or willful misconduct of Bank
One or its Affiliates.
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. The Agent agrees to act as such
contractual
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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 Lender 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 Lenders, (ii) is a "representative" of the
Lenders within the meaning of Section 9-105 of the 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 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 Lender 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 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, the Lenders or
any Lender 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 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 security; 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, and such instructions and any action
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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. 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 their respective
Commitments (or, if the Commitments have been terminated, in proportion to their
Commitments immediately prior to such termination) (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, 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(g) 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 Obligations and termination of this Agreement.
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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 Commitment and its Loans 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 partners in which the Borrower or any such partner is not restricted
hereby from engaging with any other Person.
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 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,
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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 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.
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 Obligations owing to such
Lender, whether or not the 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 Loans (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 portion of
the Loans held by the other Lenders so that after such purchase each Lender will
hold its ratable proportion of Loans. 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 Loans. In case any such payment is disturbed by legal
process, or otherwise, appropriate further adjustments shall be made.
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ARTICLE XII
BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS
12.1. SUCCESSORS AND ASSIGNS. The terms and provisions of the Loan
Documents shall be binding upon and inure to the benefit of the Borrower and
the Lenders and their respective successors and assigns, except that (i) the
Borrower shall not have the right to assign its rights or obligations under
the Loan Documents and (ii) any assignment by any Lender must be made in
compliance with Section 12.3. The parties to this Agreement acknowledge that
clause (ii) of this Section 12.1 relates only to absolute assignments and
does not prohibit assignments creating security interests, including, without
limitation, 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;
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 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.
12.2. PARTICIPATIONS.
12.2.1. PERMITTED PARTICIPANTS; EFFECT. Any Lender may, in the
ordinary course of its business and in accordance with applicable law,
at any time sell to one or more banks or other entities
("Participants") participating interests in any Loan owing to such
Lender, any Note held by such Lender, any 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 Loans 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 Loan or
Commitment in which such Participant has an interest which would
require the consent of all of the Lenders pursuant to the terms of
Section 8.2.
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12.2.3. BENEFIT OF SETOFF. 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
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.
12.3. ASSIGNMENTS.
12.3.1. PERMITTED ASSIGNMENTS. Any Lender may, in the ordinary
course of its business and in accordance with applicable law, 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 substantially in the form of Exhibit C or in
such other form as may be agreed to by the parties thereto. The consent
of the Borrower and the Agent shall be required prior to an assignment
becoming effective with respect to a Purchaser which is not a Lender or
an Affiliate thereof; PROVIDED, HOWEVER, that if a Default has occurred
and is continuing, the consent of the Borrower shall not be required.
Such consent shall not be unreasonably withheld or delayed. Each such
assignment with respect to a Purchaser which is not a Lender or an
Affiliate thereof shall (unless each of the Borrower and the Agent
otherwise consents) be in an amount not less than the lesser of (i)
$5,000,000 or (ii) the remaining amount of the assigning Lender's
Commitment (calculated as at the date of such assignment) or
outstanding Loans (if the applicable Commitment has been terminated).
12.3.2. EFFECT; EFFECTIVE DATE. Upon (i) delivery to the Agent
of an assignment, together with any consents required by Section
12.3.1, and (ii) payment of a $4,000 fee to the Agent for processing
such assignment (unless such fee is waived by the Agent), such
assignment shall become effective on the effective date specified in
such assignment. The assignment shall contain a representation by the
Purchaser to the effect that none of the consideration used to make the
purchase of the Commitment and Loans under the applicable assignment
agreement constitutes "plan assets" as defined under ERISA and that the
rights and interests of the Purchaser in and under the Loan Documents
will not be "plan assets" under 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 and obligations of
a Lender under the Loan Documents, to the same extent as if it were an
original party hereto, and no further consent or action by the
Borrower, the Lenders or the Agent shall be required to release the
transferor Lender with respect to the percentage of the Aggregate
Commitment and Loans assigned to such Purchaser. Upon the consummation
of any assignment to a Purchaser pursuant to this Section 12.3.2, the
transferor Lender, the Agent and the Borrower shall, if the transferor
Lender or the
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<PAGE>
Purchaser desires that its Loans be evidenced by Notes,
make appropriate arrangements so that new Notes or, as appropriate,
replacement Notes are issued to such transferor Lender and new Notes
or, as appropriate, replacement Notes, are issued to such Purchaser, in
each case in principal amounts reflecting their respective Commitments,
as adjusted pursuant to such assignment.
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 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 the Owned Persons, including
without limitation any information contained in any Reports; PROVIDED that each
Transferee and prospective Transferee agrees to be bound by Section 9.11 of this
Agreement.
12.5. TAX TREATMENT. If any interest in any Loan Document is
transferred to any Transferee which is organized under the laws of any
jurisdiction other than 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(d).
ARTICLE XIII
NOTICES
13.1. NOTICES. Except as otherwise permitted by Section 2.14 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: (w)
in the case of the Borrower or the Agent, at its address or facsimile number set
forth on the signature pages hereof, (x) in the case of any Lender which is an
original party hereto, at its address or facsimile number set forth below its
signature hereto, (y) in the case of any other Lender, at its address or
facsimile number set forth in its administrative questionnaire, or (z) 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
13.1 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 13.1; PROVIDED that notices to the Agent under Article
II shall not be effective until received.
13.2. CHANGE OF ADDRESS. The Borrower, the Agent and any Lender may
each change the address for service of notice upon it by a notice in writing to
the other parties hereto.
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<PAGE>
ARTICLE XIV
LIMITATIONS ON RECOURSE
Section 14.1. NONRECOURSE OBLIGATIONS. Notwithstanding anything to
the contrary contained in this Agreement, in any other Loan Document or in
any other document, certificate or instrument executed by the Borrower, each
Lender and the Agent (as used in this Article XIV, collectively, the
"Creditors") agree that, except as set forth in Section 14.2, their rights in
respect of the Obligations and any claim or liability under any Loan Document
asserted against the Borrower by the Creditors shall be limited to
satisfaction out of, and enforcement against, the property and assets of the
Borrower. The Creditors also hereby acknowledge and agree that, except as set
forth in Section 14.2, neither Partner, and no Affiliate of the Borrower or a
Partner, and no present or future officer, employee, servant, controlling
person, manager, agent or Authorized Officer of the Borrower, any Partner or
any Affiliate of the Borrower or a Partner (collectively, the "NONRECOURSE
PERSONS"), shall have, any liability to all or any of the Creditors (such
liability, including such as may arise by operation of law, being hereby
waived) for the payment of any sums now or hereafter owing by the Borrower
under this Agreement or any other Loan Document or for the performance of any
of the obligations of the Borrower contained herein or therein or shall
otherwise be liable or responsible with respect thereto. Accordingly,
dividends or other distributions made by the Borrower to its partners without
violating Section 6.10 shall not be deemed to be property or assets of the
Borrower in which the Creditors have any interest. If any Default or
Unmatured Default shall exist or if any claim of the Creditors against the
Borrower or alleged liability to the Creditors of the Borrower shall be
asserted under this Agreement or any other Loan Document, then the Creditors
agree that, except as set forth in Section 14.2, they shall not have the
right to proceed directly or indirectly against the Nonrecourse Persons or
against their respective properties and assets for the satisfaction of any
Obligations or of any such claim or liability or for any deficiency judgment
in respect of the Obligations or any such claim or liability.
Section 14.2. EXCEPTIONS. Notwithstanding the provisions of Section
14.1, it is understood and agreed that nothing contained in Section 14.1 shall
in any manner or any way (a) with respect to any Person other than a Nonrecourse
Person, constitute or be deemed to be a release of the Obligations or impair the
enforceability of this Agreement or any other Loan Document, (b) impair the
rights and remedies of the Creditors against the Borrower and its properties and
assets created by or arising from this Agreement or any other Loan Document, (c)
affect or diminish any obligation, covenant or agreement of any Nonrecourse
Person under any instrument or agreement other than this Agreement or any right
or benefit of the Borrower or the Creditors under any instrument or agreement
other than this Agreement, or (d) affect or diminish any rights of any Creditor
against any Nonrecourse Person arising from misappropriation or misapplication
of any funds or for such Nonrecourse Person's willful misconduct.
Notwithstanding the provisions of Section 14.1, it is understood and agreed that
the Agent or any Lender shall be entitled to bring suit against (a) any Partner
for the purpose of obtaining jurisdiction over the Borrower, or (b) any Person
(including any Nonrecourse Person) if such suit is based on a good faith
allegation that fraud was committed by such Person.
Section 14.3. SURVIVAL; THIRD PARTY BENEFICIARIES. The
acknowledgments, agreements and waivers contained in this Article XIV shall
(i) survive the termination of this Agreement and
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<PAGE>
continue in full force and effect until the second anniversary of such
termination, and (ii) shall be enforceable by the Borrower and any
Nonrecourse Person.
ARTICLE XV
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 and the Lenders and each party has notified the Agent by facsimile
transmission or telephone that it has taken such action.
ARTICLE XVI
CHOICE OF LAW; JURISDICTION; WAIVER OF JURY TRIAL
16.1. CHOICE OF LAW. THE LOAN DOCUMENTS (OTHER THAN THOSE CONTAINING A
CONTRARY EXPRESS CHOICE OF LAW PROVISION) SHALL BE CONSTRUED IN ACCORDANCE WITH
THE INTERNAL LAWS (INCLUDING, WITHOUT LIMITATION, 735 ILCS SECTION 105/5-1 ET
SEQ, BUT OTHERWISE WITHOUT REGARD TO THE CONFLICT OF LAWS PROVISIONS) OF THE
STATE OF ILLINOIS, BUT GIVING EFFECT TO FEDERAL LAWS APPLICABLE TO NATIONAL
BANKS.
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<PAGE>
16.2. CONSENT TO JURISDICTION. THE BORROWER HEREBY IRREVOCABLY
SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF ANY UNITED STATES FEDERAL OR
ILLINOIS STATE COURT SITTING IN CHICAGO, ILLINOIS 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 OR ANY
LENDER TO BRING PROCEEDINGS AGAINST THE BORROWER IN THE COURTS OF ANY OTHER
JURISDICTION. ANY JUDICIAL PROCEEDING BY THE BORROWER AGAINST THE AGENT OR
ANY LENDER OR ANY AFFILIATE OF THE AGENT OR ANY LENDER 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 COURT IN CHICAGO, ILLINOIS.
16.3. WAIVER OF JURY TRIAL. THE BORROWER, THE AGENT AND EACH LENDER
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.
IN WITNESS WHEREOF, the Borrower, the Lenders and the Agent have
executed this Agreement as of the date first above written.
TC PIPELINES, LP
By: TC PipeLines GP, Inc.,
its General Partner
By: /s/ RUSSELL K. GIRLING
----------------------------------------
Title: CHIEF FINANCIAL OFFICER
-------------------------------------
By: /s/ PAUL F. MACGREGOR
----------------------------------------
Title: VICE-PRESIDENT, BUSINESS DEVELOPMENT
-------------------------------------
Address: c/o TC PipeLines GP, Inc.
801 Seventh Avenue SW, 5th Floor
Calgary, Alberta, Canada T2P 3Y7
Attn: Controller
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<PAGE>
COMMITMENTS
$30,000,000 BANK ONE, NA,
Individually and as Agent
By: /s/ KENNETH J. FATUR
----------------------------------------
Kenneth J. Fatur
Vice President
Address: Mail Code IL1-0362
1 Bank One Plaza
Chicago, Illinois 60670
Attn: Kenneth J. Fatur
Telephone: 312-732-3117
FAX: 312-732-3055
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<PAGE>
PRICING SCHEDULE
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------
LEVEL I STATUS LEVEL II STATUS
-----------------------------------------------------------------------------------------
<S> <C> <C>
APPLICABLE MARGIN 0.875% 1.125%
-----------------------------------------------------------------------------------------
APPLICABLE FEE RATE 0.150% 0.175%
-----------------------------------------------------------------------------------------
</TABLE>
The Applicable Margin and Applicable Fee Rate shall be determined in
accordance with the foregoing table based on the Borrower's Status as
reflected in the then most recent Financials. Adjustments, if any, to the
Applicable Margin or Applicable Fee Rate shall be effective five business
days after the Agent has received the applicable Financials. If the Borrower
fails to deliver the Financials to the Agent at the time required pursuant to
the Credit Agreement, then the Applicable Margin and Applicable Fee Rate
shall be the highest Applicable Margin and Applicable Fee Rate set forth in
the foregoing table until five days after such Financials are so delivered.
For the purposes of this Pricing Schedule, the following terms have the
following meanings, subject to the first paragraph of this Pricing Schedule:
"Financials" means the annual or quarterly financial
statements of the Borrower and its consolidated Subsidiaries, if any,
delivered pursuant to the Credit Agreement.
"Level I Status" exists at any date if, as of the last day of
the fiscal quarter of the Borrower referred to in the most recent
Financials, Total Debt is less than 17.5% of Capitalization.
"Level II Status" exists at any date if, as of the last day of
the fiscal quarter of the Borrower referred to in the most recent
Financials, the Borrower has not qualified for Level I Status.
"Status" means Level I Status or Level II Status.
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<PAGE>
EXHIBIT A
to Credit Agreement
FORM OF OPINION
August ___, 2000
The Agent and the Lenders who are parties to the
Credit Agreement described below.
Ladies and Gentlemen:
On behalf of TC PipeLines, LP, a Delaware limited partnership (the
"Borrower"), and TC PipeLines GP, Inc., a Delaware corporation which is the
general partner of the Borrower (the "General Partner"), I, Kristine L.
Delkus, Vice-President, Law, Trading and Business Development of TransCanada
Pipelines Limited, licensed to practice law in the State of New York, have
agreed to provide an in-house legal opinion on certain matters pursuant to
Section 4.1(d) of the Credit Agreement dated as of August 22, 2000 (the
"Agreement") among the Borrower, the Lenders named therein, and Bank One, NA,
as Agent, which provides for Advances in an aggregate principal amount not
exceeding $30,000,000 at any one time outstanding. All capitalized terms used
in this opinion and not otherwise defined herein shall have the meanings
attributed to them in the Agreement.
I am qualified to practice law only in the State of New York. For
purposes of this opinion I have assumed that the laws of the State of
Illinois are the same as the laws of the State of New York. I made no
investigation of the laws of any jurisdiction other than, and the opinions
hereinafter expressed are confined to, the laws of the Sate of New York and
the federal laws of the Untied States.
I have examined the Partnership Agreement, the certificate of
incorporation and by-laws of the General Partner, resolutions of the Board of
Directors of the General Partner, the Loan Documents and such other matters
of fact and law which I have deemed necessary or relevant in order to render
this opinion. In reviewing these documents, I have assumed, as to all parties
other than the General Partner and the Borrower, the genuineness of all
signatures, the legal capacity at all relevant times of any natural persons
signing any documents, the authenticity of all documents submitted to me as
originals, the conformity to authentic originals of all documents submitted
to me as certified or true copies or as reproductions (including documents
received by facsimile machine) and the accuracy of all certificates of public
officials and corporate officers. Based upon and subject to the foregoing,
and to the qualifications hereinafter expressed, it is my opinion that:
l. The Borrower is a limited partnership duly and properly
organized, validly existing and in good standing under the laws of the
State of Delaware.
2. The Partnership Agreement is in full force and effect, and the
Borrower has full power and authority under the Partnership Agreement
and the laws of the State of
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<PAGE>
Delaware to own its property, to conduct the business in which it is
currently engaged, and to perform its obligations under the Loan
Documents.
3. The General Partner is a corporation duly and properly
organized, validly existing and in good standing under the laws of the
State of Delaware.
4. The General Partner has full corporate power and authority to
be the general partner of the Borrower and to execute and deliver the
Loan Documents on behalf of the Borrower, and the execution and
delivery by the General Partner on behalf of the Borrower of the Loan
Documents have been duly authorized by proper corporate proceedings on
the part of the General Partner.
5. The execution and delivery by the General Partner on behalf of
the Borrower of the Loan Documents and the performance by the Borrower
of its obligations thereunder have been duly authorized in accordance
with the Partnership Agreement and will not:
(a) require any consent of the General Partner's
shareholders;
(b) require any consent of the Borrower's limited partners;
(c) violate (i) any law, rule, regulation, order, writ,
judgment, injunction, decree or award binding on the Borrower or
the General Partner, or (ii) the Partnership Agreement, or (iii)
the certificate of incorporation or by-laws of the General
Partner, or (iv) the provisions of any indenture, instrument or
agreement to which the Borrower or the General Partner is a party
or is subject, or by which the Borrower or the General Partner,
or any Property of the Borrower or the General Partner, is bound,
or conflict with or constitute a default thereunder; or
(d) result in, or require, the creation or imposition of any
Lien in, of or on the Property of the Borrower pursuant to the
terms of any indenture, instrument or agreement binding upon the
Borrower.
6. The Loan Documents have been duly executed and delivered by
the General Partner on behalf of the Borrower and constitute legal,
valid and binding obligations of the Borrower enforceable against the
Borrower in accordance with their terms except to the extent the
enforcement thereof may be limited by bankruptcy, insolvency or
similar laws affecting the enforcement of creditors' rights generally
and subject also to the availability of equitable remedies if
equitable remedies are sought.
7. There is no litigation, arbitration, governmental
investigation, proceeding or inquiry pending or, to the best of our
knowledge after due inquiry, threatened against the Borrower or the
General Partner which, if adversely determined, could reasonably be
expected to have a Material Adverse Effect.
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<PAGE>
8. No order, consent, adjudication, approval, license,
authorization, or validation of, or filing, recording or registration
with, or exemption by, or other action in respect of any governmental
or public body or authority, or any subdivision thereof, which has not
been obtained by the Borrower or the General Partner, is required to
be obtained by the Borrower or the General Partner in connection with
the execution and delivery of the Loan Documents, the borrowings under
the 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.
This opinion may be relied upon by the Agent, the Lenders and their
participants, assignees and other transferees, and only in connection with the
transaction described above, and should not otherwise be referred to in any
other document without prior written consent.
Very truly yours,
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<PAGE>
EXHIBIT B
to Credit Agreement
COMPLIANCE CERTIFICATE
To: The Lenders party to the
Credit Agreement Described Below
This Compliance Certificate is furnished pursuant to that certain
Credit Agreement dated as of August 22, 2000 (as amended, supplemented or
otherwise modified from time to time, the "Agreement") among TC PipeLines, LP, a
Delaware limited partnership, the Lenders party thereto and Bank One, NA, a
national banking association having its principal office in Chicago, Illinois,
as Agent. Unless otherwise defined herein, capitalized terms used in this
Compliance Certificate have the meanings ascribed thereto in the Agreement.
THE UNDERSIGNED HEREBY CERTIFIES THAT:
1. I am the duly elected ______________ of the General Partner of the
Borrower;
2. The financial statements of the Borrower and its consolidated
Subsidiaries, if any, attached hereto were prepared in accordance with GAAP and
present fairly in all material respects the consolidated financial condition and
results of operations of the Borrower and its consolidated Subsidiaries, if any,
as of, and for the [three] [six] [nine] [fiscal year] months ended on _________,
____, subject only to normal year-end audit adjustments;
3. I have reviewed the terms of the Agreement and I have made, or have
caused to be made under my supervision, a detailed review of the transactions
and conditions of the Borrower during the accounting period covered by the
attached financial statements;
4. Schedule I attached hereto sets forth financial data and
computations evidencing the Borrower's compliance with certain covenants of the
Agreement, all of which data and computations are true, complete and correct;
5. The examinations described in paragraph 3 did not disclose, and I
have no knowledge of, the existence of any condition or event which constitutes
a Default or Unmatured Default during or at the end of the accounting period
covered by the attached financial statements or as of the date of this
Certificate, except as set forth below; and
6. Described below are the exceptions, if any, to paragraph 5 by
listing, in detail, the nature of the condition or event, the period during
which it has existed and the action which the Borrower has taken, is taking, or
proposes to take with respect to each such condition or event:
_______________________________________________________________________________
_______________________________________________________________________________
The foregoing certifications, together with the computations set forth
in Schedule I hereto and the financial statements delivered with this
Certificate in support hereof, are made and delivered this ____ day of
______________, ____.
________________________
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<PAGE>
SCHEDULE I
to Compliance Certificate
Schedule of Compliance as of ___________, ____ with
Provisions of Section 6.15 of the Agreement
SECTION 6.15 - TOTAL DEBT/CAPITALIZATION RATIO.
A. Total Debt
Indebtedness $___________
Contingent Obligations $___________
$_____________
B. Capitalization $_____________
C. A divided by B: ____%
MAXIMUM PERMITTED: 35%
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<PAGE>
EXHIBIT C
to Credit Agreement
ASSIGNMENT AGREEMENT
This Assignment Agreement (this "Assignment Agreement") between
________________ (the "Assignor") and _____________________ (the "Assignee") is
dated as of ___________, ____. The parties hereto agree as follows:
1. PRELIMINARY STATEMENT. The Assignor is a party to a Credit Agreement
(which, as it may be amended, modified, renewed or extended from time to time is
herein called the "Credit Agreement") described in Item 1 of Schedule 1 attached
hereto ("Schedule 1"). Capitalized terms used herein and not otherwise defined
herein shall have the meanings attributed to them in the Credit Agreement.
2. ASSIGNMENT AND ASSUMPTION. The Assignor hereby sells and assigns to
the Assignee, and the Assignee hereby purchases and assumes from the Assignor,
an interest in and to the Assignor's rights and obligations under the Credit
Agreement and the other Loan Documents, such that after giving effect to such
assignment the Assignee shall have purchased pursuant to this Assignment
Agreement the percentage interest specified in Item 3 of Schedule 1 of all
outstanding rights and obligations under the Credit Agreement and the other Loan
Documents relating to the facilities listed in Item 3 of Schedule 1. The
aggregate Commitment (or Loans, if the applicable Commitment has been
terminated) purchased by the Assignee hereunder is set forth in Item 4 of
Schedule 1.
3. EFFECTIVE DATE. The effective date of this Assignment Agreement (the
"Effective Date") shall be the later of the date specified in Item 5 of Schedule
1 or two Business Days (or such shorter period agreed to by the Agent) after
this Assignment Agreement, together with any consents required under the Credit
Agreement, are delivered to the Agent. In no event will the Effective Date occur
if the payments required to be made by the Assignee to the Assignor on the
Effective Date are not made on the proposed Effective Date.
4. PAYMENT OBLIGATIONS. In consideration for the sale and assignment
of Loans hereunder, the Assignee shall pay the Assignor, on the Effective
Date, the amount agreed to by the Assignor and the Assignee. On and after the
Effective Date, the Assignee shall be entitled to receive from the Agent all
payments of principal, interest and fees with respect to the interest
assigned hereby. The Assignee will promptly remit to the Assignor any
interest on Loans and fees received from the Agent which relate to the
portion of the Commitment or Loans assigned to the Assignee hereunder for
periods prior to the Effective Date and not previously paid by the Assignee
to the Assignor. In the event that either party hereto receives any payment
to which the other party hereto is entitled under this Assignment Agreement,
then the party receiving such amount shall promptly remit it to the other
party hereto.
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<PAGE>
5. RECORDATION FEE. The Assignor and Assignee each agree to pay
one-half of the recordation fee required to be paid to the Agent in
connection with this Assignment Agreement unless otherwise specified in Item
5 of Schedule 1.
6. REPRESENTATIONS OF THE ASSIGNOR; LIMITATIONS ON THE ASSIGNOR'S
LIABILITY. The Assignor represents and warrants that (i) it is the legal and
beneficial owner of the interest being assigned by it hereunder, (ii) such
interest is free and clear of any adverse claim created by the Assignor and
(iii) the execution and delivery of this Assignment Agreement by the Assignor
is duly authorized. It is understood and agreed that the assignment and
assumption hereunder are made without recourse to the Assignor and that the
Assignor makes no other representation or warranty of any kind to the
Assignee. Neither the Assignor nor any of its officers, directors, employees,
agents or attorneys shall be responsible for (i) the due execution, legality,
validity, enforceability, genuineness, sufficiency or collectability of any
Loan Document, including without limitation, documents granting the Assignor
and the other Lenders a security interest in assets of the Borrower or any
guarantor, (ii) any representation, warranty or statement made in or in
connection with any of the Loan Documents, (iii) the financial condition or
creditworthiness of the Borrower or any guarantor, (iv) the performance of or
compliance with any of the terms or provisions of any of the Loan Documents,
(v) inspecting any of the property, books or records of the Borrower, (vi)
the validity, enforceability, perfection, priority, condition, value or
sufficiency of any collateral securing or purporting to secure the Loans or
(vii) any mistake, error of judgment, or action taken or omitted to be taken
in connection with the Loans or the Loan Documents.
7. REPRESENTATIONS AND UNDERTAKINGS OF THE ASSIGNEE. The Assignee
(i) confirms that it has received a copy of the Credit Agreement, together
with copies of the financial statements requested by the Assignee and such
other documents and information as it has deemed appropriate to make its own
credit analysis and decision to enter into this Assignment Agreement, (ii)
agrees that it will, independently and without reliance upon the Agent, the
Assignor or any other Lender and based on such documents and information at
it shall deem appropriate at the time, continue to make its own credit
decisions in taking or not taking action under the Loan Documents, (iii)
appoints and authorizes the Agent to take such action as agent on its behalf
and to exercise such powers under the Loan Documents as are delegated to the
Agent by the terms thereof, together with such powers as are reasonably
incidental thereto, (iv) confirms that the execution and delivery of this
Assignment Agreement by the Assignee is duly authorized, (v) agrees that it
will perform in accordance with their terms all of the obligations which by
the terms of the Loan Documents are required to be performed by it as a
Lender, (vi) agrees that its payment instructions and notice instructions are
as set forth in the attachment to Schedule 1, (vii) confirms that none of the
funds, monies, assets or other consideration being used to make the purchase
and assumption hereunder are "plan assets" as defined under ERISA and that
its rights, benefits and interests in and under the Loan Documents will not
be "plan assets" under ERISA, (viii) agrees to indemnify and hold the
Assignor harmless against all losses, costs and expenses (including, without
limitation, reasonable attorneys' fees) and liabilities incurred by the
Assignor in connection with or arising in any manner from the Assignee's
non-performance of the obligations assumed under this Assignment Agreement,
and (ix) if applicable, attaches the forms prescribed by the Internal Revenue
Service of the United
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<PAGE>
States certifying that the Assignee is entitled to receive payments under the
Loan Documents without deduction or withholding of any United States federal
income taxes.
8. GOVERNING LAW. This Assignment Agreement shall be governed by the
internal law, and not the law of conflicts, of the State of Illinois.
9. NOTICES. Notices shall be given under this Assignment Agreement
in the manner set forth in the Credit Agreement. For the purpose hereof, the
addresses of the parties hereto (until notice of a change is delivered) shall
be the address set forth in the attachment to Schedule 1.
10. COUNTERPARTS; DELIVERY BY FACSIMILE. This Assignment Agreement
may be executed in counterparts. Transmission by facsimile of an executed
counterpart of this Assignment Agreement shall be deemed to constitute due
and sufficient delivery of such counterpart and such facsimile shall be
deemed to be an original counterpart of this Assignment Agreement.
IN WITNESS WHEREOF, the duly authorized officers of the parties
hereto have executed this Assignment Agreement by executing Schedule 1 hereto
as of the date first above written.
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<PAGE>
SCHEDULE 1
to Assignment Agreement
1. Description and Date of Credit Agreement: Credit Agreement, dated as of
August 22, 2000, among TC
PipeLines, LP, a Delaware limited
partnership, the Lenders party
thereto and Bank One, NA, a
national banking association
having its principal office in
Chicago, Illinois, as Agent
2. Date of Assignment Agreement: __________, ____
3. Amounts (As of Date of Item 2 above):
a. Assignee's percentage of Assignor's Commitment
purchased under the Assignment Agreement _____%*
b. Assignee's Commitment (or Loans with respect to terminated
Commitments) purchased under the Assignment Agreement:
$__________
4. Proposed Effective Date: _____________, ____
5. Non-standard Recordation Fee Arrangement N/A**
[Assignor/Assignee
to pay 100% of fee]
[Fee waived by Agent]
ACCEPTED AND AGREED:
[NAME OF ASSIGNOR] [NAME OF ASSIGNEE]
By: _________________________________ By: _________________________________
Title: ______________________________ Title: ______________________________
[ACCEPTED AND CONSENTED TO BY [ACCEPTED AND CONSENTED TO BY
TC PIPELINES, LP]*** BANK ONE, NA]***
By: _________________________________ By: _________________________________
General Partner
Title: ______________________________
By: _________________________________
Title: ______________________________
* Percentage taken to 10 decimal places
** If fee is split 50-50, pick N/A as option
*** Delete if not required by Credit Agreement
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<PAGE>
Attachment to SCHEDULE 1 to ASSIGNMENT AGREEMENT
ADMINISTRATIVE INFORMATION SHEET
Attach Assignor's Administrative Information Sheet, which
must include notice addresses for the Assignor and the Assignee
(Sample form shown below)
ASSIGNOR INFORMATION
CONTACT:
Name: ______________________________ Telephone No.: ______________________
Fax No.: ____________________________ Telex No.: __________________________
Answerback: _________________________
PAYMENT INFORMATION:
Name & ABA # of Destination Bank: ______________________________________________
______________________________________________
Account Name & Number for Wire Transfer: _______________________________________
________________________________________
Other Instructions: ____________________________________________________________
________________________________________________________________________________
ADDRESS FOR NOTICES FOR ASSIGNOR: ______________________________________________
______________________________________________
______________________________________________
ASSIGNEE INFORMATION
CREDIT CONTACT:
Name: ______________________________ Telephone No.: ______________________
Fax No.: ____________________________ Telex No.: __________________________
Answerback: _________________________
KEY OPERATIONS CONTACTS:
Booking Installation: _______________ Booking Installation: _______________
Name: _______________________________ Name: _______________________________
Telephone No.: ______________________ Telephone No.: ______________________
Fax No.: ____________________________ Fax No.:_____________________________
Telex No.: __________________________ Telex No.: __________________________
Answerback: _________________________ Answerback: _________________________
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<PAGE>
PAYMENT INFORMATION:
Name & ABA # of Destination Bank: ______________________________________________
______________________________________________
Account Name & Number for Wire Transfer: _______________________________________
________________________________________
Other Instructions: ____________________________________________________________
________________________________________________________________________________
ADDRESS FOR NOTICES FOR ASSIGNOR: ______________________________________________
______________________________________________
______________________________________________
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<PAGE>
BANK ONE INFORMATION
Assignee will be called promptly upon receipt of the signed agreement.
INITIAL FUNDING CONTACT: SUBSEQUENT OPERATIONS CONTACT:
Name: JOHN K. BEIRNE Name: JOHN K. BEIRNE
------------------------------- -------------------------------
Telephone No.: 312-732-3659 Telephone No.: 312-732-3659
---------------------- -----------------------
Fax No.: 312-732-4840 Fax No.: 312-732-4840
---------------------------- ----------------------------
Bank One Telex No.: 190201 (ANSWERBACK: FNBC UT)
--------------------------------
INITIAL FUNDING STANDARDS:
Libor - Fund 2 days after rates are set.
BANK ONE WIRE INSTRUCTIONS: Bank One, NA, ABA # 071000013
LS2 Incoming Account # 481152860000
Ref: TC PipeLines, LP
ADDRESS FOR NOTICES FOR BANK ONE: IL1-0364
1 Bank One Plaza,
Chicago, IL 60670-0364
Attn: John K. Beirne
Fax No. 312-732-4840
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<PAGE>
EXHIBIT D
to Credit Agreement
LOAN/CREDIT RELATED MONEY TRANSFER INSTRUCTION
To Bank One, NA,
as Agent (the "Agent") under the
Credit Agreement Described Below.
Re: Credit Agreement, dated as of August 22, 2000 (as amended, supplemented
or otherwise modified, the "Credit Agreement"), among TC PipeLines, LP,
a Delaware limited partnership (the "Borrower"), the Lenders named
therein and the Agent. Capitalized terms used herein and not otherwise
defined herein shall have the meanings assigned thereto in the Credit
Agreement.
The Agent is specifically authorized and directed to act upon the
following standing money transfer instructions with respect to the proceeds of
Advances or other extensions of credit from time to time until receipt by the
Agent of a specific written revocation of such instructions by the Borrower,
PROVIDED, HOWEVER, that the Agent may otherwise transfer funds as hereafter
directed in writing by the Borrower in accordance with Section 13.1 of the
Credit Agreement or based on any telephonic notice made in accordance with
Section 2.14 of the Credit Agreement.
Facility Identification Number(s) _____________________________________________
Customer/Account Name _________________________________________________________
Transfer Funds To _____________________________________________________________
_____________________________________________________________
For Account No. _______________________________________________________________
Reference/Attention To ________________________________________________________
Authorized Officer
(Customer Representative) Date ________________________________
____________________________________ _______________________________________
(Please Print) Signature
Bank Officer Name Date ________________________________
____________________________________ _______________________________________
(Please Print) Signature
(Deliver Completed Form to Credit Support Staff For Immediate Processing)
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<PAGE>
EXHIBIT E
to Credit Agreement
NOTE
[Date]
TC PipeLines, LP, a Delaware limited partnership (the "Borrower"),
promises to pay to the order of ________________________ (the "Lender") the
aggregate unpaid principal amount of all Loans made by the Lender to the
Borrower pursuant to Article II of the Agreement (as hereinafter defined), in
immediately available funds at the main office of Bank One, NA in Chicago,
Illinois, as Agent, together with interest on the unpaid principal amount hereof
at the rates and on the dates set forth in the Agreement. The Borrower shall pay
the principal of and accrued and unpaid interest on the Loans in full on the
Maturity Date and shall make such mandatory payments as are required to be made
under the terms of Article II of the Agreement.
The Lender shall, and is hereby authorized to, record on the schedule
attached hereto, or to otherwise record in accordance with its usual practice,
the date and amount of each Loan and the date and amount of each principal
payment hereunder.
This Note is one of the Notes issued pursuant to, and is entitled to
the benefits of, the Credit Agreement dated as of August 22, 2000 (which, as it
may be amended, supplemented or otherwise modified and in effect from time to
time, is herein called the "Agreement"), among the Borrower, the lenders party
thereto, including the Lender, and Bank One, NA, as Agent, to which Agreement
reference is hereby made for a statement of the terms and conditions governing
this Note, including the terms and conditions under which this Note may be
prepaid or its maturity date accelerated. Capitalized terms used herein and not
otherwise defined herein are used with the meanings attributed to them in the
Agreement.
TC PIPELINES, LP
By: TC PipeLines GP, Inc.,
its General Partner
By: ________________________________
Title: _____________________________
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<PAGE>
SCHEDULE OF LOANS AND PAYMENTS OF PRINCIPAL
TO
NOTE OF TC PIPELINES, LP
DATED [Date]
<TABLE>
<CAPTION>
Principal Maturity Principal
Amount of of Interest Amount Unpaid
Date Loan Period Paid Balance
<S> <C> <C> <C> <C>
</TABLE>
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