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FORM 10 - Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One)
[x] QUARTERLY REPORT PURSUANT TO SECTION 13 OR (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended October 2, 1994
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from ________ to ________.
Commission file number 1-9444
CEDAR FAIR, L.P.
(Exact name of registrant as specified in its charter)
DELAWARE 34-1560655
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
P.O. BOX 5006, Sandusky, Ohio 44871-8006
(Address of principal executive offices)
(zip code)
(419) 626-0830
(Registrant's telephone number, including area code)
Indicate by check mark whether the Registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such
shorter period that the Registrant was required to file such
reports), and (2) has been subject to such filing requirements for
the past 90 days. Yes X NO
Title of Class Units Outstanding As Of
Depositary Units November 1, 1994
(Representing Limited Partner 22,240,208
Interests)
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CEDAR FAIR, L.P.
INDEX
Part I - Financial Information
Item 1. Financial Statements 3-8
Item 2. Management's Discussion and 9
Analysis of Financial Condition
and Results of Operations
Part II - Other Information
Item 6. Exhibits and Reports on Form 8-K 10
Signatures 11
Exhibit 12
Index
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PART I - FINANCIAL INFORMATION
Item 1. - Financial Statements
CEDAR FAIR, L.P.
CONSOLIDATED BALANCE SHEETS
[CAPTION]
(In thousands) 10/2/94 12/31/93
-----------------------------------------------------------------
[S] [C] [C]
ASSETS
Current Assets:
Cash and cash equivalents $ 5,930 $ 228
Receivables 7,868 1,154
Inventories 3,126 3,502
Prepaids 1,107 2,003
-----------------------------------------------------------------
18,031 6,887
Land, Buildings and Equipment:
Land 22,675 22,665
Land improvements 31,364 26,937
Buildings 70,254 69,923
Rides and equipment 174,428 158,525
Construction in progress 572 8,950
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299,293 287,000
Less accumulated depreciation (98,937) (87,389)
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200,356 199,611
Intangibles, net of amortization 11,561 11,861
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$229,948 $218,359
LIABILITIES AND PARTNERS' EQUITY
Current Liabilities:
Accounts payable $ 6,518 $ 5,033
Distribution payable to partners 12,636 11,232
Accrued interest 541 1,341
Accrued taxes 2,063 2,632
Accrued salaries, wages and benefits 8,871 5,471
Self insurance reserves 6,374 4,184
Other accrued liabilities 3,992 1,699
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40,995 31,592
Borrowed Funds:
Revolving credit loans - 36,800
Term debt 50,000 50,000
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50,000 86,800
Partners' Equity:
Special L.P. interests 5,290 5,290
General partners 628 238
Limited partners, 22,240,208 units outstanding 133,035 94,439
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138,953 99,967
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$229,948 $218,359
The accompanying Notes to Consolidated Financial Statements are an
integral part of these balance sheets.
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CEDAR FAIR, L.P.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands except per unit data)
[CAPTION]
Three months ended Twelve months ended
10/2/94 10/3/93 10/2/94 10/3/93
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[S] [C] [C] [C] [C]
Net revenues $ 142,053 $ 127,015 $ 198,229 $ 178,786
Costs and expenses:
Cost of products sold 14,571 13,383 21,083 19,457
Operating expenses 34,214 30,531 72,166 66,558
Selling, general and 10,854 9,927 21,814 21,014
administrative
Depreciation and amortization 9,197 8,767 14,976 14,448
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68,836 62,608 130,039 121,477
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Operating income 73,217 64,407 68,190 57,309
Interest expense, net 2,354 1,636 7,399 6,645
Insurance claim settlements 524 - 2,124 -
Deferred tax credit - 11,000 - 11,000
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Net income 71,387 73,771 62,915 61,664
Net income allocated to general 714 738 629 617
partners
Net income allocated to limited $ 70,673 $ 73,033 $ 62,286 $ 61,047
partners
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Weighted average limited partner 22,262 22,251 22,261 22,250
units outstanding
Net income per limited partner $ 3.17 $ 3.28 $ 2.80 $ 2.74
unit
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The accompanying Notes to Consolidated Financial Statements are an integral
part of these statements.
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CEDAR FAIR, L.P.
CONSOLIDATED STATEMENTS OF PARTNERS' EQUITY
(In thousands)
[CAPTION]
Special General Limited Total
L.P. Partners' Partners' Partners'
Interests Equity Equity Equity
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[S] [C] [C] [C] [C]
Balance at December 31, 1993 $ 5,290 $ 238 $ 94,439 $ 99,967
Allocation of net loss - (100) (9,939) (10,039)
Distribution declared - (112) (11,120) (11,232)
($.50 per limited partner unit)
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Balance at March 27, 1994 5,290 26 73,380 78,696
Allocation of net income - 127 12,611 12,738
Distribution declared - (113) (11,119) (11,232)
($.50 per limited partner unit)
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Balance at June 26, 1994 5,290 40 74,872 80,202
Allocation of net income - 714 70,673 71,387
Distribution declared - (126) (12,510) (12,636)
($.5625 per limited partner unit)
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Balance at October 2, 1994 $ 5,290 $ 628 $ 133,035 $ 138,953
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The accompanying Notes to Consolidated Financial Statements are an integral
part of these statements.
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CEDAR FAIR, L.P.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
[CAPTION]
Three months Twelve months
ended ended
(In thousands) 10/2/94 10/3/93 10/2/94 10/3/93
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[S] [C] [C] [C] [C]
CASH FLOWS FROM (FOR) OPERATING ACTIVITIES
Net income $ 71,387 $ 73,771 $ 62,915 $ 61,664
Adjustments to reconcile net income to net
cash from operating activities
Depreciation and amortization 9,197 8,767 14,976 14,448
Deferred tax credit - (11,000) - (11,000)
Decrease (increase) in inventories 5,734 5,354 143 (18)
Decrease (increase) in current and other 1,482 1,252 (2,074) 12
assets
Increase (decrease) in accounts payable (11,041) (6,399) 387 294
Increase in other current liabilities 2,206 874 5,229 2,233
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Net cash from operating activities 78,965 72,619 81,576 67,633
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CASH FLOWS FROM (FOR) INVESTING ACTIVITIES
Capital expenditures (2,162) (5,429) (20,619) (20,984)
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Net cash (for) investing activities (2,162) (5,429) (20,619) (20,984)
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CASH FLOWS FROM (FOR) FINANCING ACTIVITIES
Net payments on revolving credit loans (64,000) (58,100) (11,000) (4,900)
Distributions paid to partners (11,232) (10,390) (44,930) (41,560)
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Net cash (for) financing activities (75,232) (68,490) (55,930) (46,460)
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Cash and cash equivalents:
Net increase (decrease) for the period 1,571 (1,300) 5,027 189
Balance, beginning of period 4,359 2,203 903 714
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Balance, end of period $ 5,930 $ 903 $ 5,930 $ 903
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SUPPLEMENTAL INFORMATION
Cash payments for interest expense $ 3,048 $ 2,821 $ 6,922 $ 6,722
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The accompanying Notes to Consolidated Financial Statements are an integral
part of these statements.
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CEDAR FAIR, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE QUARTERS ENDED
OCTOBER 2, 1994 AND OCTOBER 3, 1993
The accompanying consolidated financial statements have been prepared from the
the financial records of Cedar Fair, L.P. (the Partnership) without audit
and reflect all adjustments which are, in the opinion of management,
neccessary to fairly present the results of the interim periods covered in
this report.
Due to the highly seasonal nature of the Partnership's amusement park
operations, the results for any interim period are not indicative of the
results to be expected for the full fiscal year. Accordingly, the partnership
has elected to present financial information regarding operations for the
preceding twelve month periods ended October 2, 1994 and October 3, 1993 to
accompany the quarterly results. Because amounts for the 12 months ended
October 2, 1994 include actual 1993 fourth quarter operations, they are not
necessarily indicative of 1994 full calendar year operations.
The current operating results for the three and twelve month periods include
nonrecurring gains of $0.5 million and $1.6 million relating to insurance
claims for winter storm damage at the Pennsylvania park in 1994 and flood
damage and business interruption losses at the Minnesota park in 1993. The
Partnership's operating results for the three and twelve months ended October
3, 1993, include a one-time, non-cash credit for deferred taxes of $11 million
resulting from 1993 changes in federal tax laws
(1) Significant Accounting and Reporting Policies
The Partnership's consolidated financial statements for the quarters ended
October 2, 1994 and October 3, 1993 included in this Form 10-Q report have been
prepared in accordance with the accounting policies described in the Notes to
Consolidated Financial Statements for the year ended December 31, 1993 which
were included in the Form 10-K filed on March 23, 1994. Certain information
and footnote disclosures normally included in financial statements prepared in
accordance with generally accepted accounting principles have been condensed or
omitted pursuant to the rules and regulations of the Securities and Exchange
Commission. These financial statements should be read in conjunction with the
financial statements and the notes thereto included in the Form 10-K referred
to above.
(2) Interim Reporting
The Partnership operates three amusement parks (Cedar Point in Sandusky, Ohio,
Valleyfair in Shakopee, Minnesota and Dorney Park and Wildwater Kingdom near
Allentown, Pennsylvania), all of which are open to the public from early May to
early October. These parks generate virtually all of the Partnership's annual
revenue with the major portion concentrated in the third quarter during the
peak vacation months of July and August.
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To assure that these highly seasonal operations will not result in misleading
comparisons of current and subsequent interim periods, the Partnership has
adopted the following reporting procedures: (a) depreciation, advertising and
certain seasonal operating costs are expensed ratably during the operating
season, including certain costs incurred prior to the season and amortized over
the season and (b) all other costs are expensed as incurred or ratably over the
entire year.
(3) Borrowed Funds:
Revolving Credit Loans - In October 1994, the Partnership entered into a
revised revolving credit agreement with the same banks under which it will have
available credit of $95 million through April 30, 1997. Borrowings under this
new agreement bear interest at the banks' prime lending rate with LIBOR and
other beneficial options. The agreement requires the Partnership to pay a
commitment fee of 1/5% per annum on the daily unused portion of the credit.
The Partnership, at its option, may make prepayments without penalty and reduce
this loan commitment.
Term Debt - In August 1994, the Partnership refinanced its $50 million in 9.15%
senior notes and entered into a new note agreement for the issuance of $50
million in 8.43% senior notes. In connection with this refinancing, the
Partnership incurred a $0.7 million prepayment penalty which is included in
interest expense in the accompanying consolidated statements of operations for
the three and twelve months ended October 2, 1994. The Partnership is required
to make annual repayments of $10 million in August 2002 through August 2006 and
may make prepayments with defined premiums.
Covenants - Under the terms of the new credit agreements, the Partnership,
among other restrictions, is required to maintain a specified minimum level of
net tangible assets, as defined, and comply with certain cash flow, interest
coverage, and debt to net worth limits.
8
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Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Results of Operations
Net revenues at the Partnership's three amusement parks increased 12% to $142.1
million for the quarter ended October 2, 1994 from $127.0 million for the
quarter ended October 3, 1993. On a combined basis this increase resulted from
a 9% increase in attendance and a 3% increase in guest per capita spending.
Operating income for the period increased to $73.2 million, up 14% from $64.4
million in 1993.
Net income for the quarter was $71.4 million, or $3.17 per limited partner
unit, compared with $73.8 million, or $3.28 per unit, in 1993. The 1993
results include a one-time, non-cash credit for deferred taxes of $11.0
million, or $0.49 per unit, resulting from changes in the federal tax laws.
The operating results for the current period include a nonrecurring gain of
$0.5 million relating to an insurance settlement for winter storm damage at
Dorney Park, offset by a $0.7 million charge to interest expense for
refinancing of long-term debt. Excluding nonrecurring items, net income for
the quarter increased 14% to $71.6 million, or $3.18 per unit, from $62.8
million, or $2.79 per unit.
For the current quarter, attendance at all three parks was up compared to last
year and Cedar Point achieved a record year, breaking its 1993 record by 8%.
Favorable weather throughout the peak vacation months of July and August,
together with the very successful debut of our Raptor inverted roller coaster,
contributed to Cedar Point's record performance.
Included in costs and expenses are approximately $970,000 of incentive fees
payable to the managing general partner relating to the 1994 third quarter
distribution, which exceeded the minimum distribution as defined in the
partnership agreement by 24.00 cents per unit, or $5.3 million in the
aggregate. This compares to $758,000 of incentive fees in the 1993 third
quarter.
For the entire 1994 operating season, combined attendance at the Partnership's
three parks was a record 5.9 million, up 7% from the previous year. Combined
per capita spending also continued to rise, increasing 4% to a record $30.69
for 1994 from $29.55 in 1993. Cedar Point accounted for the majority of the
attendance increase and the rest was attributed to Valleyfair, as it rebounded
strongly from the effects of last year's prolonged rains and flooding.
Attendance at Dorney Park was down slightly compared to last year, but we
continue to believe that it has substantial long-term growth potential in both
attendance and profitability.
Financial Condition
The Partnership's $95 million revolving credit facility is adequate to meet
seasonal working capital needs, planned capital expenditures and scheduled
distributions. In our highly seasonal business with investment heavily
concentrated in property and equipment, the negative working capital ratio of
2.3 at October 2, 1994 is financially advantageous. Current assets are at
normal seasonal levels and credit facilities are in place to fund current
liabilities as required.
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PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
Exhibits:
(A) Exhibit (10) Credit Agreement dated as of October 6, 1994
between Cedar Fair, L.P. and Society National
Bank, NBD Bank, N.A. and National City Bank.
Exhibit (10.1) Private Shelf Agreement with Prudential
Insurance Company of America dated August 24,
1994 and $50,000,000, 8.43% Senior Note Due
August 24, 2006.
Exhibit (27) Financial Data Schedules
(b) Reports on None.
Form 8-K.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
CEDAR FAIR, L.P.
(Registrant)
By Cedar Fair Management Company
-----------------------------
Managing General Partner
Date: November 9, 1994 By Bruce A. Jackson
-----------------------------
Bruce A. Jackson
Vice President
(Chief Financial Officer)
By Charles M. Paul
-----------------------------
Charles M. Paul
Controller
(Chief Accounting Officer)
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EXHIBIT INDEX
Exhibit Page
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10 Credit Agreement dated as of October 6, 1994 between 13
Cedar Fair, L.P. and Society National Bank, NBD
Bank, N.A. and National City Bank.
10.1 Private Shelf Agreement with Prudential Insurance 64
Company of America dated August 24, 1994 and
$50,000,000, 8.43% Senior Note Due August 24, 2006.
27 Financial Data Schedules 107
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CREDIT AGREEMENT
by and among
CEDAR FAIR, L.P.
and
SOCIETY NATIONAL BANK,
Individually and as Agent
NBD BANK, N.A.
and
NATIONAL CITY BANK
Dated as of October 6, 1994
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CEDAR FAIR, L.P.
TABLE OF CONTENTS
1. CROSS REFERENCE.......................................1
2. SUMMARY...............................................1
3. REVOLVING CREDIT LOANS................................1
3.1. REVOLVING CREDIT LOANS.........................1
3.2. COMMERCIAL LETTERS OF CREDIT...................4
3.3. VOLUNTARY REDUCTION OF COMMITMENTS.............5
3.4. EXTENSION......................................5
4. CONDITIONS TO LOANS...................................6
5. PAYMENT OF NOTES, ETC.................................6
6. VOLUNTARY PREPAYMENTS.................................7
7. COMMITMENT FEES; AGENT'S FEE..........................8
8. ADDITIONAL PROVISIONS RELATING TO LIBOR LOANS.........9
8.1. RESERVES OR DEPOSIT REQUIREMENTS, ETC..........9
8.2. TAX LAW, ETC...................................10
8.3. EURODOLLAR DEPOSITS UNAVAILABLE, ETC...........11
8.4. INDEMNITY......................................11
8.5. CHANGES IN LAW RENDERING LIBOR LOANS UNLAWFUL..11
8.6. FUNDING........................................12
9. ADDITIONAL PROVISIONS RELATING TO DOMESTIC FIXED RATE
LOANS.................................................12
9.1. INCREASED COST.................................12
9.2. QUOTED RATES...................................13
9.3. CHANGE OF LAW..................................13
10. OPENING COVENANTS.....................................13
10.1. AUTHORIZATION..................................13
10.2. LEGAL OPINIONS.................................14
10.3. PROCEEDINGS AND DOCUMENTS......................14
10.4. NO DEFAULT CERTIFICATE.........................14
10.5. REVOLVING CREDIT NOTES.........................14
11. COVENANTS.............................................14
11.1. INSURANCE......................................14
11.2. MONEY OBLIGATIONS..............................14
11.3. RECORDS........................................15
11.4. FRANCHISES, NOTICE OF POSSIBLE DEFAULT.........15
11.5. ERISA COMPLIANCE...............................15
11.6. FINANCIAL STATEMENTS...........................16
11.7. INVESTMENTS, GUARANTIES........................17
11.8. ACQUISITIONS, BULK TRANSFERS...................18
11.9. LIENS..........................................18
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11.10. BORROWINGS......................................19
11.11. EXISTENCE.......................................20
11.12. CASH FLOW COVERAGE..............................20
11.13. SENIOR DEBT.....................................20
11.14. NET WORTH.......................................20
11.15. INTEREST COVERAGE RATIO.........................20
11.16. ENVIRONMENTAL COMPLIANCE........................20
11.17. FUNDED INDEBTEDNESS TO TANGIBLE NET WORTH RATIO.21
11.18. MORE RESTRICTIVE COVENANTS......................21
12. REPRESENTATIONS AND WARRANTIES.........................21
12.1. ORGANIZATION; RECAPITALIZATION..................21
12.1. RIGHT TO ACT....................................22
12.3. LITIGATION......................................22
12.4. ERISA COMPLIANCE................................22
12.5. FINANCIAL CONDITION.............................22
12.6. REGULATIONS.....................................23
12.7. DEFAULT.........................................23
12.8. TITLE TO PROPERTY AND ENCUMBRANCES..............23
12.9. DISCLOSURE......................................23
12.10. ENVIRONMENTAL COMPLIANCE........................24
13. EVENTS OF DEFAULT......................................24
13.1. PAYMENTS/ESCROW.................................24
13.2. COVENANTS.......................................24
13.3. REPRESENTATIONS AND WARRANTIES..................24
13.4. CROSS DEFAULT...................................25
13.5. TERMINATION OF PLAN.............................25
13.6. OWNERSHIP.......................................25
13.7. SOLVENCY OF SUBSIDIARIES........................25
13.8. BORROWER'S SOLVENCY.............................26
14. REMEDIES UPON DEFAULT..................................26
14.1. OPTIONAL DEFAULTS...............................26
14.2. AUTOMATIC DEFAULTS..............................27
14.3. OFFSETS.........................................27
14.4. EQUALIZATION PROVISION..........................27
15. THE AGENT..............................................28
15.1. APPOINTMENT AND AUTHORIZATION...................28
15.2. NOTE HOLDERS....................................28
15.3. CONSULTATION WITH COUNSEL.......................28
15.4. DOCUMENTS.......................................28
15.5. AGENT AND AFFILIATES............................28
15.6. KNOWLEDGE OF DEFAULT............................28
15.7. ACTION BY AGENT.................................29
15.8. NOTICES, DEFAULT, ETC...........................29
15.9. INDEMNIFICATION.................................29
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16. MISCELLANEOUS........................................29
16.1. BANKS' INDEPENDENT INVESTIGATION..............29
16.2. NO WAIVER, CUMULATIVE REMEDIES................30
16.3. AMENDMENTS, CONSENTS..........................30
16.4. NOTICES.......................................30
16.5. COSTS, EXPENSES AND TAXES.....................30
16.6. SALE OF PARTICIPATION.........................31
16.7. OBLIGATIONS SEVERAL, NO FIDUCIARY OBLIGATIONS.31
16.8. EXECUTION IN COUNTERPARTS.....................31
16.9. BINDING EFFECT, ASSIGNMENT....................31
16.10. GOVERNING LAW.................................32
16.11. SEVERABILITY OF PROVISIONS, CAPTIONS.........32
16.12. INVESTMENT PURPOSE...........................32
16.13. CAPITAL ADEQUACY.............................32
16.14. ENTIRE AGREEMENT.............................33
17. DEFINITIONS..........................................33
18. NO RECOURSE..........................................38
19. TERMINATION OF PRIOR CREDIT AGREEMENT................39
20. JURY TRIAL WAIVER....................................39
REVOLVING CREDIT NOTE.....................................41
Schedule 11.9.............................................44
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CREDIT AGREEMENT
Credit agreement made as of October 6, 1994, by and among CEDAR FAIR,
L.P., a Delaware limited partnership ("Borrower") and the Banks referred to
in Section 3 hereof and SOCIETY NATIONAL BANK as agent for the Banks for
the purpose of this credit agreement.
1. CROSS REFERENCE. Certain terms used herein are defined in Section
17 hereof.
2. SUMMARY. This credit agreement (a) provides for Revolving Credit
Loans during the Commitment Period in the aggregate amount of Ninety-Five
Million Dollars ($95,000,000) pursuant to the Commitments of the Banks, (b)
contains the representations and warranties inducing the Banks to enter
into this credit agreement, and (c) contains other provisions binding upon
the parties.
3. REVOLVING CREDIT LOANS.
3.1. REVOLVING CREDIT LOANS. Subject to the terms and provisions
of this credit agreement, each Bank severally agrees to make Revolving
Credit Loans to Borrower during the Commitment Period in such
aggregate amount as Borrower shall request, provided, however, that in
no event shall the aggregate principal amount of all Revolving Credit
Loans and commercial letters of credit outstanding under this credit
agreement exceed Ninety-Five Million Dollars ($95,000,000); and
further provided that (a) all Revolving Credit Loans shall mature on
the last day of the Commitment Period, and (b) in no event shall the
aggregate unpaid principal balance of each Bank's Revolving Credit
Loans and its pro rata share of commercial letters of credit
outstanding hereunder at any time exceed the amount set forth opposite
that Bank's name immediately below:
Amount Percent of
of Total
Bank Commitment Commitments
--------------------- ----------- -----------
SOCIETY NATIONAL BANK $38,000,000 40%
NBD BANK, N.A. $28,500,000 30%
NATIONAL CITY BANK $28,500,000 30%
Each borrowing by Borrower pursuant to this subsection 3.1 shall be
divided ratably among the Banks in accordance with their respective
Percent of Total Commitments indicated above. Borrower shall have the
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option, subject to the terms and conditions set forth herein, to
borrow hereunder by means of any combination of (i) Prime Rate Loans
bearing interest at a rate per annum which shall be the Prime Rate and
drawn down in aggregate amounts of not less than Three Hundred
Thousand Dollars ($300,000) or an integral multiple of One Hundred
Thousand Dollars ($100,000) in excess of Three Hundred Thousand
Dollars ($300,000), (ii) LIBOR Loans drawn down in aggregate amounts
of not less than One Million Dollars ($1,000,000) or an integral
multiple of One Hundred Thousand Dollars ($100,000) in excess of One
Million Dollars ($1,000,000), bearing interest at a rate per annum
which shall be the Adjusted LIBOR plus the applicable LIBOR Margin,
(iii) Domestic Fixed Rate Loans drawn down in aggregate amounts of not
less than One Million Dollars ($1,000,000) or an integral multiple of
One Hundred Thousand Dollars ($100,000) in excess of One Million
Dollars ($1,000,000), bearing interest at a rate per annum equal to
the applicable Domestic Fixed Rate, (iv) Transaction Loans drawn down
in aggregate amounts of not less than Three Million Dollars
($3,000,000) or an integral multiple of One Hundred Thousand Dollars
($100,000) in excess thereof if the Transaction Interest Period
selected by Borrower with respect to that loan is seven (7) days or
less, bearing interest at a rate per annum which shall be equal to the
applicable Transaction Rate, or (v) Transaction Loans drawn down in
aggregate amounts of not less than Two Million Dollars ($2,000,000) or
an integral multiple of One Hundred Thousand Dollars ($100,000) in
excess thereof if the Transaction Interest Period selected by Borrower
with respect to that loan is more than seven (7) days, bearing
interest at a rate per annum which shall be equal to the applicable
Transaction Rate. In the case of LIBOR Loans, Domestic Fixed Rate
Loans and Transaction Loans, Borrower shall specify at the time of the
request for such loans the applicable Interest Period, Domestic
Interest Period or Transaction Interest Period, as the case may be,
which period shall not in any event extend beyond the last day of the
Commitment Period.
Borrower shall pay interest (based on a year having 365 or 366
days, as the case may be, and calculated for the actual number of days
elapsed) on the unpaid principal amount of Prime Rate Loans
outstanding from time to time from the date thereof until paid,
payable on the last day of each month of each year and at the maturity
thereof, commencing July 31, 1994, at a rate per annum which shall be
the Prime Rate from time to time in effect. Borrower shall pay
interest (based on a year having 360 days and calculated for the
actual number of days elapsed) at a fixed rate for each Interest
Period on the unpaid principal amount of LIBOR Loans outstanding from
time to time from the date thereof until paid, payable on each
Interest Adjustment Date with respect to an Interest Period [provided
that if an Interest Period exceeds three (3) months, the interest must
be paid every three (3) months from the beginning of such Interest
Period], at the rate per annum which shall be five-eighths of one
percent (.625%) in excess of Adjusted LIBOR fixed in advance of each
Interest Period as herein provided for each such Interest Period.
Borrower shall pay interest (based on a year having 360 days and
calculated for the actual number of days elapsed) at a fixed rate for
each Domestic Interest Period on the unpaid principal amount of
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Domestic Fixed Rate Loans outstanding from time to time from the date
thereof until paid, payable on each Interest Adjustment Date with
respect to a Domestic Interest Period, at a rate per annum equal to
the applicable Domestic Fixed Rate, fixed in advance of each Domestic
Interest Period as herein provided for each such Domestic Interest
Period; provided, that if a Domestic Interest Period exceeds ninety
(90) days, the interest must be paid every ninety (90) days from the
beginning of such Domestic Interest Period. Borrower shall pay
interest (based on a year having 360 days and calculated for the
actual number of days elapsed) at a fixed rate for each Transaction
Interest Period, on the unpaid principal amount of Transaction Loans
outstanding from time to time from the date thereof until paid,
payable on each Interest Adjustment Date with respect to a Transaction
Interest Period, at a rate per annum equal to the applicable
Transaction Rate, fixed in advance of each Transaction Interest Period
as herein provided for each such Transaction Interest Period.
At the request of Borrower, provided, no event of default exists
hereunder, the Banks shall convert Prime Rate Loans to LIBOR Loans,
Domestic Fixed Rate Loans or Transaction Loans at any time, and shall
convert LIBOR Loans, Domestic Fixed Rate Loans or Transaction Loans to
any other type of loans permitted by this Subsection 3.1, (a) on any
Interest Adjustment Date applicable to the LIBOR Loan, Domestic Fixed
Rate Loan or Transaction Loan, as the case may be, without penalty, or
(b) at any other time with respect to a conversion of a Domestic Fixed
Rate Loan or a LIBOR Loan to any other type of loans permitted by this
Subsection 3.1, upon payment by Borrower to the Banks of an amount
equal to the amount of prepayment penalty which would be required to
be paid pursuant to Section 6 (it being understood, however, that in
no event shall a Transaction Loan be converted to any other type of
loans permitted hereunder other than on an Interest Adjustment Date
applicable to such Transaction Loan). In the case of LIBOR Loans,
Domestic Fixed Rate Loans and Transaction Loans at the expiration of
the applicable Interest Period, Domestic Interest Period or
Transaction Interest Period, as the case may be, such LIBOR Loans,
Domestic Fixed Rate Loans or Transaction Loan shall automatically
convert to Prime Rate Loans unless Borrower shall have requested
otherwise no less than three (3) London banking days prior to such
date with respect to LIBOR Loans, and one (1) Cleveland banking day
prior to such date with respect to Domestic Fixed Rate Loans and
Transaction Loans. Each request for loans under this Subsection 3.1
must either be for Prime Rate Loans or Domestic Fixed Rate Loans or
LIBOR Loans or Transaction Loans.
The obligation of Borrower to repay the Prime Rate Loans,
Domestic Fixed Rate Loans, LIBOR Loans and Transaction Loans made by
each Bank pursuant to this Subsection 3.1 and to pay interest thereon
shall be evidenced by a Revolving Credit Note of Borrower
substantially in the form of Exhibit A hereto, with appropriate
insertions, dated the date of this credit agreement and payable to
the order of such Bank on the last day of the Commitment Period in the
principal amount of its Commitment, or if less, the aggregate unpaid
principal amount of Revolving Credit Loans made hereunder by such
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Bank. The principal amount of the Prime Rate Loans, Domestic Fixed
Rate Loans, LIBOR Loans and Transaction Loans made by each Bank and
prepayments thereof and the applicable dates with respect thereto
shall be recorded by such Bank from time to time on the grid(s)
attached to such Revolving Credit Note or such Bank shall record such
information by such other method as such Bank may generally employ;
provided, however, that failure to make any such entry shall in no way
detract from Borrower's obligations under such Note. The aggregate
unpaid amount of Prime Rate Loans, Domestic Fixed Rate Loans, LIBOR
Loans and Transaction Loans set forth on the grid(s) attached to each
Revolving Credit Note shall be rebuttably presumptive evidence of the
principal amount owing and unpaid on such Revolving Credit Note. If
any Revolving Credit Note shall not be paid at maturity, whether such
maturity occurs by reason of lapse of time or by operation of any
provision of acceleration of maturity therein contained, the principal
thereof and the unpaid interest accrued thereon through the date of
maturity shall bear interest, from the date of maturity until paid,
for Prime Rate Loans, Domestic Fixed Rate Loans, LIBOR Loans and
Transaction Loans at a rate per annum which shall be two percent (2%)
in excess of the Prime Rate from time to time in effect. Subject to
the provisions of this credit agreement, Borrower shall be entitled
under this Subsection 3.1 to borrow funds as Revolving Credit Loans,
repay the same in whole or in part and reborrow under this Subsection
at any time and from time to time.
3.2. COMMERCIAL LETTERS OF CREDIT. So long as the Revolving
Credit remains in effect, but subject to the conditions of this credit
agreement, Agent shall issue commercial letters of credit upon the
application, and for the benefit, of Borrower, provided however that
each such commercial letter of credit (a) shall aggregate, along with
all other commercial letters of credit issued and outstanding
hereunder at any given time, in an amount not exceeding $5,000,000,
(b) shall be documented with and on the Agent's standard form
applications, notes, agreements and other writings for commercial
letters of credit and (c) shall have a maturity date which is no later
than the latest of (i) 180 days after issuance, or (ii) the date on
which the Revolving Credit Loans mature. Borrower will not request
Agent to issue any commercial letter of credit hereunder, nor shall
the Agent be obligated to honor any such request, if any Possible
Default or Event of Default shall then exist or thereupon would begin
to exist hereunder. Each application for commercial letters of credit
by Borrower hereunder shall, in and of itself, constitute a continuing
representation and warranty by Borrower to the Banks that this credit
agreement entitles Borrower to request the issuance of the commercial
letter of credit in question. Except as otherwise specifically
provided for herein, each commercial letter of credit issued under
this credit agreement shall be considered to be a Revolving Loan and
shall, among other things, reduce the amount of the available
Revolving Credits hereunder by an amount equal to the face amount of
that commercial letter of credit. Borrower shall pay to the Agent for
the pro rata benefit of the Banks a fee for each commercial letter of
credit issued hereunder (a "L/C Fee"), the L/C Fee with respect to any
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given commercial letter of credit (y) to be calculated by multiplying
one-half percent (.5%) of the face amount of the commercial Letter of
Credit by a fraction, the numerator of which shall be equal to the
actual number of days the commercial letter of credit remains
outstanding and the denominator of which shall be 360 , and (z) to be
payable on the earlier of the date on which there is a draw upon that
commercial letter of credit or the stated termination date of that
letter of credit. In addition to the L/C Fee, Borrower shall pay the
administrative fees customarily charged by the Agent with respect to
commercial letters of credit (an "Administrative Fee"), such
Administrative Fees to be retained by, and for the sole benefit of,
the Agent. The risk associated with each commercial letter of credit
shall be shared pro rata by each of the Banks.
If any event of default or any Possible Default shall occur under
this credit agreement, the Banks shall (in addition to any other
right, power or privilege which they may have by contract, law or at
equity) be entitled to require that Borrower, and Borrower shall
promptly, deposit with the Agent an amount of money equal to the
aggregate of all commercial letters of credit (if any) then
outstanding , which monies (a) shall be held by the Agent in an escrow
or similar account for the benefit of the Banks, (b) shall secure all
of the Debt, (c) shall be applied by the Banks at such time and to
payment of such of the Debt (whether resulting from a draw upon a
commercial letter of credit or otherwise) as the Banks may solely
determine, and (d) if there be any such monies remaining on deposit
with the Agent after satisfaction in full of all of the Debt, shall be
promptly returned to Borrower without interest.
3.3. VOLUNTARY REDUCTION OF COMMITMENTS. Borrower may at any
time or from time to time terminate in whole or ratably in part the
Commitments of the Banks hereunder to an amount not less than the
aggregate principal amount of the Revolving Credit Loans and
commercial letters of credit then outstanding, by giving the Agent not
less than three (3) Cleveland banking days' notice; provided that any
such partial termination shall be in the aggregate amount for all the
Banks of at least One Million Dollars ($1,000,000) or any integral
multiple of One Hundred Thousand Dollars ($100,000) in excess of One
Million Dollars ($1,000,000). The Agent shall promptly notify each
Bank of its proportionate amount and the date of each such
termination. After each such termination, the commitment fees payable
under Section 7 hereof shall be calculated upon the Commitments of the
Banks as so reduced. If Borrower terminates in whole the Commitments
of the Banks, on the effective date of such termination (there being
no outstanding commercial letters of credit and Borrower having
prepaid in full the unpaid principal balance, if any, of the Revolving
Credit Notes outstanding together with all interest (if any) and all
fees accrued and unpaid) all of the Revolving Credit Notes outstanding
shall be delivered to the Agent marked "cancelled" and redelivered to
Borrower. Any partial reduction in the Commitments of the Banks shall
be permanent during the remainder of the Commitment Period. Any
prepayments made under this Subsection 3.3 shall be subject to the
prepayment penalties set forth in Section 6 hereof.
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3.4. EXTENSION. The Banks, in their absolute and sole
discretion, may upon Borrower's request, extend the Commitment Period
for successive one-year periods. The first of such requests by
Borrower shall be in writing addressed to the Agent and shall be made
not less than thirty (30) days prior to April 30, 1995. Any
subsequent request for an extension of the Commitment Period shall
likewise be made to the Agent not less than thirty (30) days prior to
the next succeeding April 30 in the applicable year. If any such
request is granted by the Banks, the Commitment Period shall be
automatically extended to the date of such extension, without the
making or doing of any further act or thing whatsoever. No such
extension shall be effective unless consented to in writing by all of
the Banks.
4. CONDITIONS TO LOANS. The obligation of each Bank to make the loans
and of the Agent to issue letters of credit hereunder is conditioned, in
the case of each borrowing hereunder, upon (i) receipt by the Agent of one
(1) Cleveland banking day's notice from Borrower of the proposed date and
aggregate amount of the borrowing of any Prime Rate Loans, one (1)
Cleveland banking day's notice from Borrower of the proposed date,
aggregate amount and initial Domestic Interest Period for any Domestic
Fixed Rate Loans, one (1) Cleveland banking day's notice from Borrower of
the proposed date, aggregate amount and initial Transaction Interest Period
for any Transactions Loans, and three (3) London banking days' notice from
Borrower of the proposed date, aggregate amount and initial Interest Period
of any LIBOR Loans, of which date, amount and initial Interest Period or
initial Domestic Interest Period or initial Transaction Interest Period (if
applicable) the Agent shall notify each Bank promptly upon the receipt of
such notice, and on which date each Bank shall provide the Agent not later
than 2:00 p.m. Cleveland time, with the amount in Federal or other
immediately available funds, required of it; (ii) the fact that no Possible
Default shall then exist or immediately after the loan or any letter of
credit would exist; (iii) the fact that as to loans, no litigation or
proceeding is pending against Borrower or any Subsidiary which is likely to
cause an event of default hereunder, except that this condition shall not
apply to rollovers of existing loans; and (iv) the fact that the
representations and warranties contained in Section 12 hereof shall be true
and correct in all material respects with the same force and effect as if
made on and as of the date of such borrowing except to the extent that any
thereof expressly relate to an earlier date. Each borrowing by Borrower
hereunder shall be deemed to be a representation and warranty by Borrower
as of the date of such borrowing as to the facts specified in (ii), (iii)
and (iv) above. The Agent shall promptly notify Borrower in writing (with
a copy to each of the Banks) of the applicable interest rate pertaining to
each loan obtained hereunder (other than Prime Rate Loans). In addition to
the above, the obligation of each Bank to make the initial loans hereunder
shall be conditioned upon all loans by the Banks to Borrower pursuant to
the credit agreement referred to in Section 19 hereof (and all fees
accruing on or with respect to such credit agreement) having been repaid in
full.
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5. PAYMENT ON NOTES, ETC. All payments of principal, interest, L/C Fees
and commitment fees shall be made to the Agent in immediately available
funds for the account of the Banks, and the Agent forthwith shall
distribute to each Bank its ratable share of the amount of principal,
interest and such fees received by it for the account of such Bank. Each
Bank shall endorse each Note held by it with appropriate notations
evidencing each payment of principal made thereon or shall record such
principal payment by such other method as such Bank may generally employ;
provided, however, that failure to make any such entry shall in no way
detract from Borrower's obligations under each such Note. Whenever any
payment to be made hereunder, including without limitation any payment to
be made on any Note, shall be stated to be due on a day which is not a
Cleveland banking day, such payment shall be made on the next succeeding
Cleveland banking day and such extension of time shall in each case be
included in the computation of the interest payable on such Note; provided,
however, that with respect to any LIBOR Loan, if the next succeeding
Cleveland banking day falls in the succeeding calendar month, such payment
shall be made on the preceding Cleveland banking day and the relevant
Interest Period shall be adjusted accordingly.
6. VOLUNTARY PREPAYMENTS. Borrower shall have the right at any time or
from time to time, upon one (1) Cleveland banking days' prior written
notice to the Agent in the case of Prime Rate Loans, without the payment of
any premium or penalty, or four (4) London banking days' prior written
notice in the case of LIBOR Loans (subject to the payment of a prepayment
penalty as hereinafter described in this Section 6), or two (2) Cleveland
banking days' prior written notice in the case of Domestic Fixed Rate Loans
(subject to the payment of a prepayment penalty as hereinafter described in
this Section 6), to prepay on a pro rata basis, all or any part of the
principal amount of the Notes then outstanding as designated by Borrower,
plus interest accrued on the amount so prepaid to the date of such
prepayment. In any case of prepayment of any LIBOR Loans, Borrower agrees
that if Adjusted LIBOR as determined as of 11:00 a.m. London time, two (2)
London banking days prior to the date of prepayment of any LIBOR Loans
(hereinafter, "Prepayment LIBOR") shall be lower than the last Adjusted
LIBOR previously determined for those LIBOR Loans with respect to which
prepayment is intended to be made (hereinafter, "Last LIBOR"), then
Borrower shall, upon written notice by the Agent, promptly pay to the
Agent, for the account of each of the Banks, in immediately available
funds, a prepayment penalty measured by a rate (the "Prepayment Penalty
Rate") which shall be equal to the difference between the Last LIBOR and
the Prepayment LIBOR. In determining the Prepayment LIBOR, Agent shall
apply a rate for each Bank equal to Adjusted LIBOR for a deposit
approximately equal to each Bank's portion of such prepayment which would
be applicable to an Interest Period commencing on the date of such
prepayment and having a duration as nearly equal as practicable to the
remaining duration of the actual Interest Period during which such
prepayment is to be made. The Prepayment Penalty Rate shall be applied to
all or such part of the principal amounts of the Notes as related to the
LIBOR Loans to be prepaid, and the prepayment penalty shall be computed for
the period commencing with the date on which such prepayment is to be made
to that date which coincides with the last day of the Interest Period
previously established when the LIBOR Loans, which are to be prepaid, were
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made. Each prepayment of a LIBOR Loan shall be in the aggregate principal
sum of not less than One Million Dollars ($1,000,000) (except in the case
of a LIBOR Loan prepaid pursuant to Section 8 hereof).
In the event Borrower cancels a proposed LIBOR Loan subsequent to the
delivery to the Agent of the notice of the proposed date, aggregate amount
and initial Interest Period of such loan, but prior to the draw down of
funds thereunder, and such cancellation shall not be as a result of any
change in law making the funding of such LIBOR Loan unlawful, such
cancellation shall be treated as a prepayment subject to the aforementioned
prepayment penalty; provided that in no event shall such prepayment penalty
exceed the actual costs incurred by the Banks as a result of such
cancellation.
In the event any Domestic Fixed Rate Loan is prepaid, Borrower agrees
that if the Domestic Fixed Rate as determined as of 11:00 a.m. Cleveland
time, one (1) Cleveland banking day prior to the date of prepayment of any
Domestic Fixed Rate Loans (hereinafter, "Prepayment Domestic Fixed Rate")
shall be lower than the last Domestic Fixed Rate previously determined for
those Domestic Fixed Rate Loans with respect to which prepayment is
intended to be made (hereinafter, "Last Domestic Fixed Rate"), then
Borrower shall, upon written notice by the Agent, promptly pay to the
Agent, for the account of each of the Banks, in immediately available
funds, a prepayment penalty measured by a rate (the "Prepayment Domestic
Penalty Rate") which shall be equal to the difference between the Last
Domestic Fixed Rate and the Prepayment Domestic Fixed Rate. In determining
the Prepayment Domestic Fixed Rate, Agent shall apply the Domestic Fixed
Rate which would be applicable to each Bank's portion of a Domestic Fixed
Rate Loan approximately equal to the amount of such prepayment to each Bank
having a Domestic Interest Period commencing on the date of such prepayment
and having a duration as nearly equal as practicable to the remaining
duration of the actual Domestic Interest Period during which such
prepayment is to be made. The Prepayment Domestic Penalty Rate shall be
applied to all or such part of the principal amounts of the Notes as
related to the Domestic Fixed Rate Loans to be prepaid, and the prepayment
penalty shall be computed for the period commencing with the date on which
such prepayment is to be made to the date which coincides with the last day
of the Domestic Interest Period previously established when the Domestic
Fixed Rate Loans, which are to be prepaid, were made. In the event
Borrower cancels a proposed Domestic Fixed Rate Loan subsequent to the
delivery to the Agent of the notice of the proposed date, aggregate amount
and initial Domestic Interest Period of such loan, but prior to the draw
down of funds thereunder, such cancellation shall be treated as a
prepayment subject to the aforementioned prepayment penalty. A statement
as to any such loss, cost or expense shall be promptly submitted by each
Bank to Borrower and shall, in the absence of manifest error, be conclusive
and binding as to the amount thereof. Notwithstanding anything to the
contrary contained in this Section 6, in no event shall any prepayment of
any LIBOR Loan or Domestic Fixed Rate Loan which is made on the applicable
Interest Adjustment Date be subject to any prepayment penalty. In no event
shall any prepayment of any Transaction Loan occur on a date other than the
applicable Interest Adjustment Date.
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7. COMMITMENT FEES; AGENT'S FEE. So long as the Commitments remain in
effect, each Bank shall be entitled to receive from Borrower, on a
quarterly basis, a commitment fee (based on a year having 360 days and
calculated for the actual number of days elapsed) which shall be computed
at the rate of one-fifth percent (1/5 of 1%) per annum on the average daily
difference between the amount of that Bank's Commitment from time to time
in effect and the unpaid principal balance of that Bank's Revolving Credit
Note then outstanding; it being understood that for the purposes of this
Section 7, a Bank's pro rata share of outstanding letters of credit under
this credit agreement shall be considered an outstanding loan and, as such,
shall not be the subject of a commitment fee hereunder. Notwithstanding
the foregoing, during the period July 31 to December 31 of each year (the
"Inactive Period"), the commitment fees on Fifty Million Dollars
($50,000,000) of the unused Commitments (the "Inactive Commitments"), shall
be computed at the rate of one-eighth percent (1/8%) per annum (not one-
fifth percent (1/5%) per annum); provided, however, that if the unused
portion of the aggregate Commitments ("Unused Commitments") is ever less
than Fifty Million Dollars ($50,000,000) during the Inactive Period, the
commitment fees during the lesser of (i) the number of days from the
beginning of the Inactive Period through the first day in which the Unused
Commitments became less than Fifty Million Dollars ($50,000,000), or (ii)
ninety (90) days, shall be computed at the rate of one-fifth percent (1/5%)
per annum, and Borrower shall promptly pay the Banks any such differential
in commitment fees previously paid the Banks. After the first day in which
the Unused Commitments become less than Fifty Million Dollars
($50,000,000), the commitment fees shall be computed at the rate of one-
fifth percent (1/5%) per annum. Borrower shall pay the commitment fee to
the Banks on the 30th day of September, 1994, and quarter-annually
thereafter and at the expiration of the Commitments.
In addition to the aforesaid commitment fees, Borrower shall pay an
annual Agent's fee in the amount of Seven Thousand Five Hundred Dollars
($7,500) to the Agent for its sole benefit, which fee shall be paid on the
date of this credit agreement and annually thereafter.
8. ADDITIONAL PROVISIONS RELATING TO LIBOR LOANS.
8.1. RESERVES OR DEPOSIT REQUIREMENTS, ETC. If at any time any
law, treaty or regulation (including, without limitation, Regulation D
of the Board of Governors of the Federal Reserve System) or the
interpretation thereof by any governmental authority charged with the
administration thereof or any central bank or other fiscal, monetary
or other authority shall impose (whether or not having the force of
law), modify or deem applicable any reserve and/or special deposit
requirement (other than reserves included in the Reserve Percentage,
the effect of which is reflected in the interest rate(s) of the LIBOR
Loan(s) in question) against assets held by, or deposits in or for the
amount of any loans by, any Bank, and the result of the foregoing is
to increase the cost (whether by incurring a cost or adding to a cost)
to such Bank of making or maintaining hereunder LIBOR Loans or to
reduce the amount of principal or interest received by such Bank with
respect to such LIBOR Loans, then within thirty (30) days following
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demand by such Bank, Borrower shall pay to such Bank from time to time
on Interest Adjustment Dates with respect to such loans, as additional
consideration hereunder, additional amounts sufficient to fully
compensate and indemnify such Bank for such increased cost or reduced
amount, assuming (which assumption such Bank need not corroborate)
such additional cost or reduced amount were allocable to such LIBOR
Loans. A certificate as to the increased cost or reduced amount as a
result of any event mentioned in this Section 8.1, setting forth the
calculations therefor, shall be promptly submitted by such Bank to
Borrower and shall, in the absence of manifest error, be rebuttably
presumptive evidence as to the amount thereof. Notwithstanding any
other provision of this credit agreement, after any such demand for
compensation by any Bank, Borrower, upon at least two (2) Cleveland
banking days' prior written notice to such Bank through the Agent, may
prepay all LIBOR Loans in full or convert all LIBOR Loans to Prime
Rate Loans regardless of the Interest Period of any thereof. Any such
prepayment or conversion shall be subject to the prepayment penalties
set forth in Section 6 hereof. Each Bank will notify Borrower as
promptly as practicable (with a copy thereof delivered to the Agent)
of the existence of any event which will likely require the payment by
Borrower of any such additional amount under this Section.
8.2. TAX LAW, ETC. In the event that by reason of any law,
regulation or requirement or in the interpretation thereof by an
official authority, or the imposition of any requirement of any
central bank whether or not having the force of law, any Bank shall,
with respect to this credit agreement or any transaction under this
credit agreement, be subjected to any tax, levy, impost, charge, fee,
duty, deduction or withholding of any kind whatsoever (other than any
tax imposed upon the total net income of such Bank) and if any such
measures or any other similar measure shall result in an increase in
the cost to such Bank of making or maintaining any LIBOR Loan or in a
reduction in the amount of principal or interest or commitment fee
receivable by such Bank in respect thereof, then such Bank shall
promptly notify Borrower stating the reasons therefor. Borrower shall
thereafter pay to such Bank within thirty (30) days following demand
from time to time on Interest Adjustment Dates with respect to such
LIBOR Loans, as additional consideration hereunder, such additional
amounts as will fully compensate such Bank for such increased cost or
reduced amount. A certificate as to any such increased cost or
reduced amount, setting forth the calculations therefor, shall be
submitted by such Bank to Borrower and shall, in the absence of
manifest error, be rebuttably presumptive evidence as to the amount
thereof.
If any Bank receives such additional consideration from Borrower
pursuant to this Subsection 8.2, such Bank shall use its best efforts
to obtain the benefits of any refund, deduction or credit for any
taxes or other amounts on account of which such additional
consideration has been paid and shall reimburse Borrower to the
extent, but only to the extent, that such Bank shall receive a refund
of such taxes or other amounts together with any interest thereon or
an effective net reduction in taxes or other governmental charges
(including any taxes imposed on or measured by the total net income of
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such Bank) of the United States or any state or subdivision thereof by
virtue of any such deduction or credit, after first giving effect to
all other deductions and credits otherwise available to such Bank.
If, at the time any audit of such Bank's income tax return is
completed, such Bank determines, based on such audit, that it was not
entitled to the full amount of any refund reimbursed to Borrower as
aforesaid or that its net income taxes are not reduced by a credit or
deduction for the full amount of taxes reimbursed to Borrower as
aforesaid, Borrower, within thirty (30) days after demand of such
Bank, will promptly pay to such Bank the amount so refunded to which
such Bank was not so entitled, or the amount by which the net income
taxes of such Bank were not so reduced, as the case may be.
Notwithstanding any other provision of this credit agreement,
after any such demand for compensation by any Bank, Borrower, upon at
least two (2) Cleveland banking days' prior written notice to such
Bank through the Agent, may prepay all LIBOR Loans in full or convert
all LIBOR Loans to any other type of loans permitted under this credit
agreement regardless of the Interest Period of any thereof. Any such
prepayment or conversion shall be subject to the prepayment penalties
set forth in Section 6 hereof.
8.3. EURODOLLAR DEPOSITS UNAVAILABLE OR INTEREST RATE
UNASCERTAINABLE. In respect of any LIBOR Loans, in the event that the
Agent shall have determined that dollar deposits of the relevant
amount for the relevant Interest Period for such LIBOR Loans are not
available to the Reference Bank in the applicable Eurodollar market or
that, by reason of circumstances affecting such market, adequate and
reasonable means do not exist for ascertaining the LIBOR rate
applicable to such Interest Period, as the case may be, the Agent
shall promptly give notice of such determination to Borrower and (i)
any notice of new LIBOR Loans (or conversion of existing loans to
LIBOR Loans) previously given by Borrower and not yet borrowed (or
converted, as the case may be) shall be deemed a notice to make Prime
Rate Loans, and (ii) Borrower shall be obligated either to prepay or
to convert any outstanding LIBOR Loans on the last day of the then
current Interest Period or Periods with respect thereto.
8.4. INDEMNITY. Without prejudice to any other provisions of
this Section 8, Borrower hereby agrees to indemnify each Bank against
any loss or expense which such Bank may sustain or incur as a
consequence of any default by Borrower in payment when due of any
amount due hereunder in respect of any LIBOR Loan, including, but not
limited to, any loss of profit, premium or penalty incurred by such
Bank in respect of funds borrowed by it for the purpose of making or
maintaining such LIBOR Loan, as determined by such Bank in the
exercise of its sole but reasonable discretion. A certificate as to
any such loss or expense shall be promptly submitted by such Bank to
Borrower and shall, in the absence of manifest error, be rebuttably
presumptive evidence as to the amount thereof.
8.5. CHANGES IN LAW RENDERING LIBOR LOANS UNLAWFUL. If at any
time any new law, treaty or regulation, or any change in any existing
law, treaty or regulation, or any interpretation thereof by any
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governmental or other regulatory authority charged with the
administration thereof, shall make it unlawful for any Bank to fund
any LIBOR Loans which it is committed to make hereunder with moneys
obtained in the Eurodollar market, the Commitment of such Bank to fund
LIBOR Loans shall, upon the happening of such event forthwith be
suspended for the duration of such illegality, and such Bank shall by
written notice to Borrower and the Agent declare that its Commitment
with respect to such loans has been so suspended and, if and when such
illegality ceases to exist, such suspension shall cease and such Bank
shall similarly notify Borrower and the Agent. If any such change
shall make it unlawful for any Bank to continue in effect the funding
in the applicable Eurodollar market of any LIBOR Loan previously made
by it hereunder, such Bank shall, upon the happening of such event,
notify Borrower, the Agent and the other Banks thereof in writing
stating the reasons therefor, and Borrower shall, on the earlier of
(i) the last day of the then current Interest Period or (ii) if
required by such law, regulation or interpretation, on such date as
shall be specified in such notice, either convert all LIBOR Loans to
any other type of loans permitted under this credit agreement or
prepay all LIBOR Loans to the Banks in full. Any such prepayment or
conversion shall be subject to the prepayment penalties prescribed in
Section 6 hereof.
8.6. FUNDING. Each Bank may, but shall not be required to, make
LIBOR Loans hereunder with funds obtained outside the United States.
9. ADDITIONAL PROVISIONS RELATING TO DOMESTIC FIXED RATE LOANS.
9.1. INCREASED COST. If, as a result of any Regulatory Change:
(a) the basis of taxation of payments to any Bank of the
principal of or interest on any Domestic Fixed Rate Loan or any
other amounts payable under this credit agreement in respect
thereof (other than taxes imposed on the overall net income of
such Bank by the jurisdiction in which such Bank has its main
office) is changed; or
(b) any reserve, special deposit or similar requirements
relating to any extensions of credit or other assets of, or any
deposits with or liabilities of, any Bank are imposed, modified
or deemed applicable; or
(c) any other condition affecting this credit agreement or
any of the Domestic Fixed Rate Loans is imposed on any Bank;
and such Bank determines that, by reason thereof, the cost to such
Bank of making or maintaining any of the Domestic Fixed Rate Loans is
increased, or any amount received by such Bank hereunder in respect of
any such loans is reduced (such increase in cost and reductions in
amounts receivable being herein called "Increased Costs"), then
Borrower shall pay to such Bank upon demand such additional amount or
amounts as will compensate such Bank for such Increased Costs (such
demand to be accompanied by a statement setting forth the basis for
the calculation thereof). Determinations by such Bank for purposes of
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this Subsection 9.1 of the effect of any Regulatory Change on its
costs of making or maintaining Domestic Fixed Rate Loans or on amounts
receivable by it in respect of such Domestic Fixed Rate Loans, and of
the additional amounts required to compensate such Bank in respect of
any Increased Cost shall be rebuttably presumptive evidence in the
absence of manifest error. Notwithstanding any other provision of
this credit agreement, after any such demand for compensation by any
Bank, Borrower, upon at least one (1) Cleveland banking day's prior
written notice to such Bank through the Agent, may prepay all Domestic
Fixed Rate Loans in full or convert all Domestic Fixed Rate Loans to
any other type of loans permitted under this credit agreement
regardless of the Domestic Interest Period of any thereof. Any such
prepayment or conversion shall be subject to the prepayment penalty
set forth in Section 6 hereof. Each Bank will notify Borrower as
promptly as practicable (with a copy thereof delivered to the Agent)
of the existence of any event which will likely require the payment by
Borrower of any such additional amounts under this Subsection.
9.2. QUOTED RATES. Anything herein to the contrary
notwithstanding, if on or before the first day of the applicable
Domestic Interest Period for any Domestic Fixed Rate Loan (i) the
Agent determines that for any reason whatsoever, dealers of recognized
standing are not providing quotes for certificates of deposit (in the
applicable amounts) of the C/D Reference Bank for a period of time
comparable to the applicable Domestic Interest Period or (ii) the
Agent shall determine that the rates quoted by such dealers for
purposes of computing the rate of interest on Domestic Fixed Rate
Loans for the applicable Domestic Interest Period do not accurately
reflect the cost to the Banks of making or maintaining such Domestic
Fixed Rate Loans for such period, then the Agent shall give Borrower
prompt notice thereof, and so long as such failure to quote such rates
continues and/or rates fail to accurately reflect costs to the Banks
as aforesaid, the Banks shall be under no obligation to make Domestic
Fixed Rate Loans or to convert any other type of loans made pursuant
to this credit agreement into Domestic Fixed Rate Loans and Borrower
shall not be entitled to obtain any Domestic Fixed Rate Loans
hereunder until the Agent has notified Borrower that the conditions
giving rise to the operation of this Subsection no longer exist.
9.3. CHANGE OF LAW. Notwithstanding any other provision in this
credit agreement, in the event that any Regulatory Change shall make
it unlawful for any Bank to fund any Domestic Fixed Rate Loans, the
Commitment of such Bank to fund Domestic Fixed Rate Loans shall, upon
the happening of such event forthwith be suspended for the duration of
such illegality, and such Bank shall by written notice to Borrower and
the Agent declare that its Commitment with respect to such loans has
been so suspended and, if and when such illegality ceases to exist,
such suspensions shall cease and such Bank shall similarly notify
Borrower and the Agent. If any such change shall make it unlawful for
any Bank to continue in effect the funding of Domestic Fixed Rate
Loans, such Bank shall, upon the happening of such event, notify
Borrower, the Agent and the other Banks thereof in writing stating the
reasons therefor, and Borrower shall, on the earlier of (i) the last
day of the then current Domestic Interest Period or (ii) if required
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by such Regulatory Change, on such date as shall be specified on such
notice, either convert all Domestic Fixed Rate Loans to any other type
of loans permitted under this credit agreement or prepay all Domestic
Fixed Rate Loans to the Banks in full. Any such prepayment or
conversion shall be subject to the prepayment penalties prescribed in
Section 6 hereof.
10. OPENING COVENANTS. Prior to or concurrently with the execution and
delivery of this credit agreement, the following conditions shall be
satisfied and Borrower shall furnish to each Bank the following:
10.1. AUTHORIZATION. A copy of Borrower's Partnership
Agreement and any amendments thereto (certified as to its accuracy and
completeness by the Secretary of Borrower's Managing General Partner)
for each Bank which evidences the authority of Cedar Fair Management
Company in its capacity as the Managing General Partner of Borrower to
execute this credit agreement and to execute and deliver the Notes
provided for herein and a certified copy of the resolutions of the
board of directors of the Managing General Partner of Borrower
evidencing the authority of the officer designated by such Managing
General Partner to act on its behalf in connection with the
partnership.
10.2. LEGAL OPINIONS. A favorable opinion of Squire, Sanders
& Dempsey as to the matters referred to in Subsections 12.1, 12.2,
12.3 and 12.6 of this credit agreement and such other matters as Agent
and the Banks may reasonably request.
10.3. PROCEEDINGS AND DOCUMENTS. All partnership, corporate and
other proceedings and all documents incidental to the transactions
involved in the initial borrowing hereunder shall be reasonably
satisfactory in substance and form to each Bank and the Agent and each
Bank, the Agent and counsel for the Banks shall have received all such
counterpart originals or certified or other copies of such documents
as the Agent may reasonably request.
10.4. NO DEFAULT CERTIFICATE. A certificate from the
Managing General Partner of Borrower certifying that as of the date of
this credit agreement, no event of default or Possible Default exists
hereunder.
10.5. REVOLVING CREDIT NOTES. A duly executed Revolving
Credit Note of Borrower, payable to the order of such Bank with the
blanks appropriately filled, which Note shall be substantially in the
form of Exhibit A hereto.
11. COVENANTS. Borrower agrees that so long as the Commitments remain in
effect and thereafter until the principal of and interest on Revolving
Credit Loans obtained hereunder shall have been paid in full, Borrower will
perform and observe, and will cause each Subsidiary to perform and observe,
all of the following provisions that are on their respective parts to be
complied with, namely:
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11.1. INSURANCE. Borrower and each Subsidiary will (a) keep
itself and all of its insurable properties insured at all times to
such extent, by such insurers, and against such hazards and
liabilities as is generally and prudently done by like businesses, it
being understood that Borrower's and each Subsidiary's insurance
coverage at the date of this credit agreement meets the standards
contemplated by this Subsection 11.1, (b) give each Bank prompt
written notice of each materially adverse proposed changed in
Borrower's and each Subsidiary's insurance coverage and the details of
the change and (c) forthwith upon any Bank's written request, furnish
to such Bank such information about Borrower's and each Subsidiary's
insurance as such Bank may from time to time reasonably request, which
information shall be prepared in form and detail satisfactory to such
Bank.
11.2. MONEY OBLIGATIONS. Borrower and each Subsidiary will
pay in full (a) prior in each case to the date when penalties would
attach, all taxes, assessments and governmental charges and levies
(except only those so long as and to the extent that the same shall be
contested in good faith by appropriate and timely proceedings) for
which it may be or become liable or to which any or all of its
properties may be or become subject, and (b) all of its other
obligations calling for the payment of money before such payment
becomes overdue (except (i) only those so long as and to the extent
that the same shall be contested in good faith by appropriate and
timely proceedings, and (ii) obligations for borrowed money up to One
Million Dollars ($1,000,000), or (iii) trade payables incurred in the
ordinary course of business the aggregate principal amount of which is
Three Million Dollars ($3,000,000) or less).
11.3. RECORDS. Borrower and each Subsidiary will (a) at all
times maintain true and complete records and books of account and,
without limiting the generality of the foregoing, maintain appropriate
reserves for possible losses and liabilities, all in accordance with
generally accepted accounting principles consistently applied, and (b)
during business hours and on five (5) days' prior written notice
permit each Bank to examine Borrower's and each Subsidiary's books and
records and to make excerpts therefrom and transcripts thereof.
11.4. FRANCHISES; NOTICE OF POSSIBLE DEFAULT. (a) Subject to
Subsection 11.8 hereof, each Subsidiary will preserve and maintain its
corporate existence, rights and franchises, and (b) in any event
Borrower and each Subsidiary will preserve and maintain all rights and
franchises, in each case where the absence of which would materially
and adversely affect their ability to operate the amusement parks
known as Valleyfair, Cedar Point, Dorney Park and Wildwater Kingdom in
the normal course of their current operations. Borrower will promptly
notify the Agent whenever any event of default as stated in Section 14
hereof or Possible Default has occurred hereunder.
11.5. ERISA COMPLIANCE. Neither Borrower nor any Subsidiary
will incur any material accumulated funding deficiency within the
meaning of the Employee Retirement Income Security Act of 1974, as
amended from time to time, and the regulations thereunder, or any
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material liability to the Pension Benefit Guaranty Corporation,
established thereunder in connection with any Plan. Borrower and each
Subsidiary will furnish to the Banks (a) simultaneously with a filing
by Borrower or any Subsidiary with the Pension Benefit Guaranty
Corporation of a notice regarding any Thirty-Day Reportable Event and
in any event within thirty (30) days after Borrower or any Subsidiary
knows or has reason to know that any Thirty-Day Reportable Event with
respect to any Plan has occurred, a statement of the chief financial
officer of Borrower or such Subsidiary describing such Reportable
Event and the action which Borrower or such Subsidiary proposes to
take with respect thereto, together with a copy of the notice of such
Reportable Event given to the Pension Benefit Guaranty Corporation if
a copy of such notice is available to Borrower or such Subsidiary, and
(b) promptly after receipt thereof a copy of any notice Borrower or
any Subsidiary may receive from the Pension Benefit Guaranty
Corporation or the Internal Revenue Service with respect to any
accumulated funding deficiency under Section 412 of the Internal
Revenue Code of 1986 or liability under Title IV of the Employee
Retirement Income Security Act of 1974, as amended from time to time,
with respect to any Plan administered by Borrower or such Subsidiary;
provided, that this latter clause shall not apply to notices of
general application promulgated by the Pension Benefit Guaranty
Corporation or the Internal Revenue Service. Borrower and each
Subsidiary will promptly notify the Banks of any material taxes
assessed, proposed to be assessed or which Borrower or such Subsidiary
has reason to believe may be assessed against Borrower or such
Subsidiary by the Internal Revenue Service with respect to any Plan.
As used in this Subsection 11.5, "material" means the measure of a
matter of significance which shall be determined as being not less
than Two Million Five Hundred Thousand Dollars ($2,500,000).
11.6. FINANCIAL STATEMENTS. Borrower will furnish to the Banks
(a) within sixty (60) days after the end of each of the first three
quarter-annual periods of each fiscal year, commencing with Borrower's
fiscal quarter ending June 30, 1994, on a book basis in accordance
with generally accepted accounting principles (and, in any event, in
each case as soon as reasonably practicable), balance sheets of
Borrower and its Subsidiaries as at the end of that period and their
statements of income, partners' or shareholders' equity (as the case
may be) and changes in financial position for that period, all
prepared on a consolidated basis and in form and detail satisfactory
to each Bank and certified by the chief financial officer or treasurer
of Borrower, (b) within one hundred and twenty (120) days after the
end of each fiscal year of Borrower (and, in any event, in each case
as soon as reasonably practicable), an annual audit report of Borrower
and its Subsidiaries prepared in form and detail satisfactory to each
Bank and certified by an independent public accounting firm
satisfactory to each Bank, together with a certificate by the
accounting firm setting forth the Possible Defaults coming to its
attention during the course of its audit or, if none, a statement to
that effect (provided that such accounting firm shall not be liable to
anyone by reason of their failure to obtain knowledge of any such
Possible Default which would not be disclosed in the course of an
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audit conducted in accordance with generally accepted auditing
standards), (c) concurrently with the furnishing of the financial
information set forth in clauses (a) and (b) above, a covenant
compliance certificate of the chief financial officer or treasurer, in
form and detail satisfactory to the Banks, setting forth the
calculations used to determine compliance with the financial
covenants, (d) as soon as available, copies of all notices, reports,
proxy statements and other similar documents sent by Borrower to its
limited partners generally and filed with any governmental agency, and
(e) forthwith upon each Bank's written request, such other information
about the financial condition, compliance with the terms and
conditions of this credit agreement, the operations and properties of
Borrower and its Subsidiaries as each Bank may from time to time
reasonably request, which information shall be submitted in form and
detail satisfactory to each Bank and certified by the chief financial
officer or treasurer of Borrower, or the chief financial officer of
such Subsidiary, as the case may be. Borrower shall promptly deliver
to the Banks copies of any amendments, modifications, consents or
waivers entered into or received by it after the date hereof which
affect the Senior Debt.
11.7. INVESTMENTS; GUARANTIES. Neither Borrower nor any
Subsidiary will (a) own, purchase or acquire any obligations of, or
any other interest in, or make any capital contribution to any person
or entity, except as permitted by or contemplated under Subsection
11.8 and clause (iii) of Subsection 11.10 hereof, (b) make or hold any
investment in any stocks, bonds or securities of any kind exceeding in
the aggregate Five Hundred Thousand Dollars ($500,000), (c) be or
become a party to any joint venture or other partnership, (d) make or
keep outstanding any advance or loan or (e) be or become a Guarantor
of any kind; provided, that this Subsection 11.7 shall not apply to
(i) any endorsement of a check or other medium of payment for deposit
or collection through normal banking channels or any similar
transaction in the normal course of business, or (ii) any purchase of
repurchase agreements, eurodollar certificates of deposit, direct
obligations of the United States of America or certificates of deposit
or eligible bankers acceptances issued by a member bank of the Federal
Reserve System, in each case due no later than one (1) year from the
date of purchase, or (iii) any purchase of commercial paper maturing
no later than one (1) year from the date of purchase, which at the
time of such purchase is assigned the highest quality rating in
accordance with the rating systems employed by either Moody's
Investors Service, Inc. or Standard & Poor's Corporation, or (iv)
except as otherwise restricted in this Subsection, guaranties issued
in the ordinary course of business and not involving borrowed money,
or (v) extensions of credit in the nature of Receivables owing to
Borrower or any Subsidiary arising in the ordinary course of business
and payable in accordance with their trade terms, or (vi) loans and
advances to employees for relocation expenses, travel advances and
similar expenses relating to their employment so long as the aggregate
amount of such loans and advances shall not exceed Five Hundred
Thousand Dollars ($500,000), or (vii) guaranties by Borrower of
indebtedness of any Subsidiary so long as the aggregate amount of all
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such guaranties shall not exceed Five Million Dollars ($5,000,000), at
any one time outstanding, or (viii) guaranties by any Subsidiary of
any indebtedness of Borrower or any other Subsidiary which
indebtedness in each case is permitted under Subsection 11.10 hereof,
or (ix) any unsecured loans and advances made by Borrower to any
Subsidiary or any unsecured loans and advances made by any Subsidiary
to Borrower, or (x) any unsecured advances of a Subsidiary to another
Subsidiary so long as such latter Subsidiary has no other indebtedness
of any kind other than indebtedness, if any, owing to Borrower, or
(xi) any existing investment in the securities of a Subsidiary, or any
investment in the securities of any corporation which becomes a
Subsidiary, or (xii) any guaranty by one or more Subsidiaries of all
indebtedness incurred by Borrower to the Banks hereunder (it being
understood that at the request of holders of at least sixty percent
(60%) (by amount) of the Notes, whenever made, Borrower will cause its
Subsidiaries to guaranty all indebtedness incurred by Borrower to the
Banks hereunder, which guaranty agreement(s) shall be in form and
substance satisfactory to the Banks), or (xiii) any other guaranty,
investment, advance or loan not otherwise permitted hereunder, so long
as all such guaranties, investments, advances and loans at any one
time outstanding do not exceed the aggregate amount of Ten Million
Dollars ($10,000,000) minus the aggregate amount then outstanding
under the aforesaid subparts (vi) through (xii), inclusive.
11.8. ACQUISITIONS, BULK TRANSFERS. Neither Borrower nor any
Subsidiary will (a) be a party to any consolidation or merger with any
person or entity, or (b) lease, sell or otherwise transfer all or a
substantial part of its assets (other than such chattels [including
rides whether or not deemed chattels], if any, as may have become
obsolete or no longer useful in the continuance of its present
business) except in the normal course of its present business;
provided, that this Subsection shall not apply to any lease, sale or
other transfer of any assets during any fiscal year of Borrower, so
long as such assets do not in the aggregate equal or exceed ten
percent (10%) of Borrower's total assets (determined on a consolidated
basis). Notwithstanding this Subsection 11.8, (i) Borrower may be
merged with or into any person or entity and any Subsidiary may be
merged with or into Borrower or any other Subsidiary; provided that
Borrower survives such transaction and no Possible Default shall then
exist or immediately thereafter will begin to exist, and (ii) any
Subsidiary may be liquidated, wound up or dissolved, or all or
substantially all of its business, property or assets may be conveyed,
sold, leased, transferred or otherwise disposed of, in one transaction
or a series of transaction, to Borrower or any other Subsidiary;
provided that no Possible Default shall then exist or immediately
thereafter will begin to exist.
11.9. LIENS. Neither Borrower nor any Subsidiary will (a)
acquire any property subject to any security interest, inventory
consignment, lease, land contract or other title retention contract,
(b) sell or otherwise transfer any Receivables, whether with or
without recourse, or (c) suffer or permit any property now owned or
hereafter acquired by it to be or become encumbered by any mortgage,
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security interest, financing statement or lien of any kind or nature;
provided, that this Subsection 11.9 shall not apply to (i) any lien
for a tax, assessment or governmental charge or levy not yet due and
payable, (ii) any lien securing only its workers' compensation,
unemployment insurance and similar obligations, (iii) any mechanic's,
carrier's or similar common law or statutory lien incurred in the
normal course of business, (iv) any transfer of a check or other
medium of payment for deposit or collection through normal banking
channels or any similar transaction in the normal course of business,
(v) liens or encumbrances on property or assets of Borrower existing
as of the date hereof, a listing of which will be delivered to the
Banks within ninety (90) days, (vi) any lien or security interest
(including any refinancing thereof in whole or in part) created by
Borrower or any Subsidiary in the course of purchasing property, or
existing on such property at the time of such purchase (whether or not
assumed), provided that such lien or security interest shall be
restricted to the property being purchased and provided, further, that
the indebtedness secured thereby shall not exceed eighty percent (80%)
of the purchase price thereof, (vii) any mortgage, security interest
or lien securing only indebtedness incurred to the Banks, (viii) any
lien on any of its property which lien is incidental to the conduct of
the normal course of its business so long as all such liens shall not
materially adversely affect the ownership, use or operation of such
assets or the financial condition of Borrower or any Subsidiary, and
the aggregate amount of indebtedness secured by all such liens shall
not exceed Ten Million Dollars ($10,000,000), (ix) any financing
statement perfecting only a security interest permitted by this
Subsection 11.9, (x) easements, restrictions, minor title
irregularities and similar matters having no material adverse effect
on the ownership or use of any real property, or (xi) liens consisting
of capitalized leases. Notwithstanding anything in this credit
agreement to the contrary, neither Borrower nor any Subsidiary shall
grant any lien on any of its property to the holder(s) of the Senior
Debt without the prior written consent of the Banks.
11.10. BORROWINGS. Neither Borrower nor any Subsidiary will
create, incur or suffer to exist any indebtedness for borrowed money
or any Funded Indebtedness of any kind; provided, that this Subsection
11.10 shall not apply to (i) the loans evidenced by any Notes issued
pursuant to this credit agreement, (ii) Senior Debt and, subject to
Subsection 11.13 hereof, any renewal or refinancing of Senior Debt,
(iii) any indebtedness of a corporation in existence at the time such
corporation becomes a Subsidiary, and any renewal or refinancing with
the same or different parties, provided that such renewal or
refinancing does not increase the amount of such indebtedness above
the amount in existence at the time of such renewal or refinancing,
(iv) any loan obtained by Borrower, and any renewal or refinancing
thereof, which does not permit any principal repayments prior to the
date of repayment in full of all indebtedness to the Banks under this
credit agreement and the termination of all obligations of the Banks
to lend under this credit agreement, and which is Subordinated in
favor of the Debt to the Banks pursuant to a subordination agreement
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being in such form and substance as the Banks may require, (v) any
other indebtedness existing as of the date hereof, (vi) any leases not
in excess of Ten Million Dollars ($10,000,000) entered into by
Borrower which are required to be capitalized, (vii) any unsecured
advances by Borrower to a Subsidiary or by a Subsidiary to Borrower,
(viii) any unsecured advances of a Subsidiary to another Subsidiary so
long as such latter Subsidiary has no other indebtedness of any kind
other than indebtedness, if any, owing to Borrower, (ix) any secured
indebtedness so long as the aggregate amount of all such indebtedness
does not exceed Eight Million Five Hundred Thousand Dollars
($8,500,000) at any one time outstanding, (x) any other indebtedness
provided that, after giving effect thereto, Borrower would have been
in compliance with Subsection 11.15 hereof during the immediately
preceding fiscal year, after taking into consideration the current
annualized pro forma interest expense for all existing and
contemplated indebtedness, or (xi) any other indebtedness incurred by
Borrower or any Subsidiary not otherwise permitted hereunder, so long
as the aggregate amount of all such indebtedness does not exceed Five
Million Dollars ($5,000,000) at any one time outstanding.
Notwithstanding the foregoing, neither Borrower nor any Subsidiary
will create, incur or suffer to exist any indebtedness for borrowed
money or any Funded Indebtedness of any kind if the aggregate amount
of the Commitments, plus the aggregate unpaid principal balance of
Senior Debt, plus the aggregate unpaid principal balance of all
indebtedness incurred under clauses (ix), (x) and (xi) of this
Subsection would at any time exceed Two Hundred Million Dollars
($200,000,000).
11.11. EXISTENCE. Borrower will remain a limited partnership
created in accordance with Delaware law.
11.12. CASH FLOW COVERAGE. Borrower will not suffer or
permit, at the end of each fiscal year of Borrower, the sum of (a) all
of Borrower's capital expenditures during such year, plus (b) all
principal payments paid or accrued on Borrower's Funded Indebtedness
during such year (other than principal payments paid or accrued on
loans obtained hereunder), plus (c) all cash distributions paid to
unitholders of Borrower during such year, to exceed one hundred twenty
percent (120%) of the aggregate of Borrower's Net Earnings plus its
depreciation and amortization charges during such year.
11.13. SENIOR DEBT. Borrower shall not at any time prepay or
repurchase any of the Senior Debt without the prior written consent of
the Banks, unless the entire amount of the Senior Debt is refinanced
under terms which require no principal repayments of the same prior to
the date of repayment in full of all indebtedness to the Banks under
this credit agreement, the termination of all obligations of the Banks
to lend under this credit agreement, and the termination of all
obligations of the Agent to issue commercial letters of credit under
this credit agreement.
11.14. NET WORTH. Borrower will not suffer or permit the
Consolidated Net Worth of Borrower and its Subsidiaries to fall below
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(a) $47,160,000 at any time during calendar year 1994 and (b)
$50,160,000 at any time thereafter.
11.15. INTEREST COVERAGE RATIO. Borrower shall maintain a
minimum Interest Coverage Ratio as of December 31 of each year of at
least 4.00 to 1.00. The Interest Coverage Ratio shall be calculated
including cash extraordinary gains and losses and non-recurring items.
As used herein, "Interest Coverage Ratio" shall mean the ratio of (a)
an amount equal to Borrower's Net Earnings for the period in question
plus interest and taxes, to (b) all of Borrower's interest expense
during such period, as determined on a consolidated and accrual basis
and in accordance with generally accepted accounting principles not
inconsistent with its present accounting procedures.
11.16. ENVIRONMENTAL COMPLIANCE. Borrower and its
Subsidiaries will comply in all material respects with any and all
Environmental Laws including, without limitation, all Environmental
Laws in jurisdictions in which it owns or operates a facility or site,
arranges for disposal or treatment of hazardous substances, solid
waste or other wastes, accepts for transport any hazardous substances,
solid waste or other wastes or holds any interest in real property or
otherwise. Borrower and its Subsidiaries will furnish to the Banks
promptly after receipt thereof a copy of any notice it may receive
from any governmental authority, private person or entity that any
litigation or proceeding pertaining to any environmental matter has
been filed or is threatened against it, any real property in which it
holds any interest or any past or present operation of the company in
question which could reasonably be expected to result in a material
adverse affect on Borrower or its Subsidiaries. Neither Borrower nor
any Subsidiary will allow the release or disposal of hazardous waste,
solid waste or other wastes on, under or to any real property in which
it holds any interest or performs any of its operations, in violation
of any Environmental Law. As used in this Subsection "litigation or
proceeding" means any demand, claim, notice, suit, suit in equity,
action, administrative action, investigation or inquiry whether
brought by any governmental authority, private person or entity or
otherwise, and "material" means the measure of a matter of
significance which shall be determined as being not less than Two
Million Five Hundred Thousand Dollars ($2,500,000). Borrower and its
Subsidiaries shall defend, indemnify and hold the Banks harmless
against all costs, expenses, claims, damages, penalties and
liabilities of every kind or nature whatsoever (including attorneys
fees) arising out of or resulting from the noncompliance of Borrower
or any Subsidiary with any Environmental Law.
11.17. FUNDED INDEBTEDNESS TO TANGIBLE NET WORTH RATIO. At June
30 and December 31 of each of the indicated years, Borrower will not
suffer or permit the ratio of its average (for that date and the last
day of each of the 11 previous fiscal months) consolidated Funded
Indebtedness to average (for that date and the last day of each of the
11 previous fiscal months) Consolidated Net Worth (a) during 1994 to
exceed 1.35 to 1.00 and (b) during each year thereafter to exceed 1.25
to 1.00.
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11.18. MORE RESTRICTIVE COVENANTS. Prior to entering into any
agreement providing for the incurrence or amendment of any
indebtedness for borrowed money, which agreement contains financial
covenants applicable to Borrower and/or any of its Subsidiaries which
are more restrictive than any of the covenants set forth herein,
Borrower shall cause this credit agreement to be amended in writing
(which amendment shall be in form and substance satisfactory to the
Banks) to include any such covenant or covenants.
12. REPRESENTATIONS AND WARRANTIES. Borrower represents and warrants as
follows:
12.1. ORGANIZATION; RECAPITALIZATION. Borrower is a limited
partnership created in accordance with Delaware law, and is duly
authorized to do business in the States of Ohio, Minnesota and
Pennsylvania. Each Subsidiary is an organization duly organized and
validly existing and in good standing under the laws of the state of
its origination and is duly qualified and authorized to do business
wherever it owns any real estate or personal property or transacts any
substantial business. Borrower is a duly constituted and existing
limited partnership under the Partnership Agreement. All filings and
recordings required in connection with the Partnership Agreement,
including the filing of all required fictitious name certificates,
have been duly made, and the execution of the Partnership Agreement
has not materially impaired or materially adversely affected any
right, title or interest of Borrower in and to any real or personal
property of Borrower, whether tangible or intangible, and such
execution has not resulted in Borrower's incurring any material
liability or obligation.
12.2. RIGHT TO ACT. No registration with or approval of any
governmental agency of any kind is required for the due execution and
delivery or for the enforceability of this credit agreement or any
Note issued pursuant to this credit agreement. Borrower has legal
power and right to execute and deliver this credit agreement and each
Note issued pursuant to this credit agreement and to perform and
observe the provisions of this credit agreement and such Notes issued
pursuant hereto. By executing and delivering this credit agreement
and each Note issued pursuant to this credit agreement and by
performing and observing the provisions of this credit agreement and
each Note issued pursuant hereto, Borrower will not violate any
existing provision of the Partnership Agreement or any applicable law
or violate or otherwise become in default under any existing loan
agreement, credit agreement, mortgage, indenture or similar instrument
binding upon Borrower, or any other material contract, agreement or
other obligation binding upon Borrower. The general partner executing
and delivering this credit agreement on behalf of Borrower has the
authority to do so, and this credit agreement and any Note, when
executed, are legally valid and binding upon Borrower in every respect
and enforceable in accordance with their terms except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement
of creditors' rights generally, and general principles of equity which
may limit the availability of equitable remedies.
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12.3. LITIGATION. No litigation or proceeding is pending or
threatened which involves any substantial possibility of adversely
affecting Borrower or any Subsidiary to a material extent. The
Internal Revenue Service has not alleged any material default by
Borrower or any Subsidiary in the payment of any tax or threatened to
make any material assessment in respect thereof.
12.4. ERISA COMPLIANCE. To the best of Borrower's knowledge,
neither Borrower nor any Subsidiary has incurred any material
accumulated funding deficiency within the meaning of the Employee
Retirement Income Security Act of 1974, as amended from time to time,
and the regulations thereunder. To the best of Borrower's knowledge,
no Reportable Event has occurred with respect to any Plan. To the
best of Borrower's knowledge, the Pension Benefit Guaranty
Corporation, established thereunder, has not asserted that Borrower or
any Subsidiary has incurred any material liability in connection with
any Plan. To the best of Borrower's knowledge, no lien has been
attached and no person has threatened to attach a lien on any property
of Borrower or any Subsidiary as a result of Borrower's or any
Subsidiary's failing to comply with such act or regulation. As used
in this Subsection "material" means the measure of a matter of
significance which shall be determined as being not less than Two
Million Five Hundred Thousand Dollars ($2,500,000).
12.5. FINANCIAL CONDITION. The quarterly financial
statements of Borrower prepared as of March 31, 1994 have been
prepared in accordance with generally accepted accounting principles
and fairly present Borrower's then financial condition. There has
been no material adverse change in the financial condition, properties
or business of Borrower since that date.
12.6. REGULATIONS. Borrower is not engaged principally or as
one of its important activities, in the business of extending credit
for the purpose of purchasing or carrying any "margin stock" (within
the meaning of Regulation U of the Board of Governors of the Federal
Reserve System of the United States of America). Neither the granting
of any Revolving Credit Loan hereunder nor the use of the proceeds of
such loan will violate, or be inconsistent with, the provisions of
Regulation U or X of said Board of Governors.
12.7. DEFAULT. No Possible Default exists hereunder, nor
will any begin to exist immediately after the execution and delivery
hereof.
12.8. TITLE TO PROPERTY AND ENCUMBRANCES. Borrower has good
and marketable fee simple title, in the case of real property, and
good title, in the case of all other property, to all of its
properties and assets (including, without limitation, all the real and
other property used in and necessary to the operation of the amusement
parks known as Valleyfair, Cedar Point, Dorney Park and Wildwater
Kingdom) and all of the real and personal property reflected in the
quarterly financial statements of Borrower prepared as of March 27,
1994 (which has not, since that date, been disposed of by Borrower in
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the ordinary course of its business) free and clear of all mortgages,
pledges or other security interest or encumbrances, except those
permitted under Subsection 11.9 hereof. Borrower is not a party to or
bound by any agreement or instrument involving the purchase or sale of
goods or services, the terms and provisions of which would adversely
affect or interfere with the successful operation of the business
conducted by Borrower. Borrower and its Subsidiaries enjoy peaceful
and undisturbed possession under all leases and easements necessary in
any material respect for the operation of its properties and assets,
none of which contains, or was granted pursuant to any legislation
which contains, any unusual or burdensome provisions which would
materially adversely affect or impair the operation of such properties
and assets, and all such leases and easements are valid and subsisting
and in full force and effect.
12.9. DISCLOSURE. To the best of Borrower's actual
knowledge, neither this credit agreement, nor any other document
furnished to the Banks by or on behalf of Borrower pursuant hereto or
in connection herewith contains, as of its date, any untrue or
misleading statement of material fact, it being understood that as to
any forecasts or projections (and related assumptions) expressed
therein are herein represented only as being reasonably based upon the
best information available to Borrower at the time such forecasts,
projections and assumptions were made. There are no facts known to
Borrower which have not been disclosed in this credit agreement, the
Partnership Agreement, or in any of the financial statements furnished
pursuant to Subsection 11.6 hereof which, individually or in the
aggregate, materially adversely affect the condition, business or
affairs of Borrower, or impair in any way the ability of Borrower to
perform its obligations under this credit agreement or the Notes.
12.10. ENVIRONMENTAL COMPLIANCE. Borrower and its
Subsidiaries are in substantial compliance with any and all
Environmental Laws including, without limitation, all Environmental
Laws in all jurisdictions in which any of them owns or operates, or
has owned or operated, a facility or site, arranges or has arranged
for disposal or treatment of hazardous substances, solid waste or
other wastes, accepts or has accepted for transport any hazardous
substances, solid waste or other wastes or holds or has held any
interest in real property or otherwise. No material litigation or
proceeding arising under, relating to or in connection with any
Environmental Law is pending or, to the best of our knowledge,
threatened against Borrower or any Subsidiary, any real property in
which any thereof holds or has held an interest or any past or present
operation of any thereof. No release, threatened release or disposal
of hazardous waste, solid waste or other wastes is occurring, or has
occurred, on, under or to any real property in which Borrower or any
Subsidiary holds any interest or performs any of its operations, in
violation of any Environmental Law the violation of which could
reasonably be expected to have a material adverse affect on Borrower
or its Subsidiaries. As used in this Subsection, "litigation and
proceeding" means any demand, claim, notice, suit, suit in equity,
action, administrative action, investigation or inquiry whether
brought by any governmental authority, private person or entity or
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otherwise, and "material" means the measure of a matter of
significance which shall be determined as being not less than Two
Million Five Hundred Thousand Dollars ($2,500,000).
13. EVENTS OF DEFAULT. Each of the following shall constitute an event of
default hereunder:
13.1. PAYMENTS/ESCROW. If the principal of or interest on
any Note or any commitment fee, Agent's fee, L/C Fee or Administrative
Fee shall not be paid in full punctually when due and payable and
shall remain unpaid for a period of five (5) consecutive days or if
Borrower shall fail to deposit with the Agent an amount of money equal
to the aggregate of all outstanding commercial letters of credit as
required by, and under the terms of, Subsection 3.2 of this credit
agreement within five (5) days of the date on which the Agent or any
of the Banks shall so instruct.
13.2. COVENANTS. If Borrower or any Subsidiary shall fail or
omit to perform and observe any agreement or other provision (other
than those referred to in Subsection 13.1 hereof) contained or
referred to in this credit agreement or any Related Writing that is on
its part to be complied with, and that Possible Default shall not have
been fully corrected within thirty (30) days after giving of written
notice thereof to Borrower by the Agent or any Bank that the specified
Possible Default is to be remedied.
13.3. REPRESENTATIONS AND WARRANTIES. If any representation,
warranty or statement made in or pursuant to this credit agreement or
any Related Writing or any other material information furnished by
Borrower or any Subsidiary to the Banks or any thereof or any other
holder of any Note, shall be false or erroneous in any material
respect when made.
13.4. CROSS DEFAULT. If Borrower or any Subsidiary defaults
in the payment of principal or interest due and owing upon any other
obligation for borrowed money in excess of One Million Dollars
($1,000,000) beyond any period of grace provided with respect thereto
or in the performance of any other agreement, term or condition
contained in any agreement under which such obligation is created, if
the effect of such default is to accelerate the maturity of such
indebtedness or to permit the holder thereof to cause such
indebtedness to become due prior to its stated maturity.
13.5. TERMINATION OF PLAN. If any Plan shall fail to
maintain the minimum funding standards required by Section 302 of the
Employee Retirement Income Security Act of 1974, as amended, and
Sections 412 and 418(B) of the Internal Revenue Code of 1986 (as
amended from time to time, and any regulations promulgated
thereunder), or a Plan shall have terminated or shall be the subject
of termination or partition proceedings or in reorganization under the
Employee Retirement Income Security Act of 1974, as amended, or
Borrower or any ERISA Affiliate shall have incurred a withdrawal
liability (including, without limitation, a secondary withdrawal
liability pursuant to Section 4204 of the Employee Retirement Income
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Security Act of 1974, as amended), to a Plan or to the Pension Benefit
Guaranty Corporation, and there shall result from such event a
liability which will have a material adverse effect upon the business,
operations or financial condition of Borrower and its Subsidiaries
taken as a whole.
13.6. OWNERSHIP. If after the date hereof, any person or
group (as defined in Section 13.D and 14.D of the Securities Exchange
Act of 1934) shall have or obtain, in the aggregate, sixty percent
(60%) of the outstanding voting power or control of Borrower and/or
have the unilateral right to elect a majority of the Managing General
Partner of Borrower.
13.7. SOLVENCY OF SUBSIDIARIES. If any Subsidiary having
tangible assets with a book value in excess of One Million Dollars
($1,000,000) shall (a) discontinue business (except as specifically
permitted by Subsection 11.8), or (b) generally not pay its debts as
such debts become due, or (c) make a general assignment for the
benefit of creditors, or (d) apply for or consent to the appointment
of a receiver, a custodian, a trustee, or interim trustee or
liquidator of itself or all or a substantial part of its assets, or
(e) be adjudicated a debtor or have entered against it an order for
relief under Title 11 of the United States Code, as the same may be
amended from time to time, or (f) file a voluntary petition in
bankruptcy or file a petition or an answer seeking reorganization or
an arrangement with creditors or seeking to take advantage of any
other law (whether federal or state) relating to relief of debtors, or
admit (by answer, by default or otherwise) the material allegations of
a petition filed against it in any bankruptcy, reorganization,
insolvency or other proceeding (whether federal or state) relating to
relief of debtors, or (g) suffer or permit to continue unstayed and in
effect for sixty (60) consecutive days any judgment, decree or order,
entered by a court of competent jurisdiction or appoints a receiver, a
custodian, a trustee, an interim trustee or liquidator of itself or of
all or a substantial part of its assets.
13.8. BORROWER'S SOLVENCY. If Borrower shall (a) discontinue
the operation of any of the amusement parks known as Valleyfair, Cedar
Point, Dorney Park and Wildwater Kingdom, other than normal off-season
shutdowns, or become dissolved (and in the event of dissolution
pursuant to Article XIV of the Partnership Agreement, shall not have
been reconstituted within the time specified in Section 13.2 of the
Partnership Agreement), or (b) generally not pay its debts as such
debts become due, or (c) make a general assignment for the benefit of
creditors, or (d) apply for or consent to the appointment of a
receiver, a custodian, a trustee, an interim trustee or liquidator of
itself of all or a substantial part of its assets, or (e) be
adjudicated a debtor or have entered against it an order for relief
under Title 11 of the United States Code, as the same may be amended
from time to time, or (f) file a voluntary petition in bankruptcy or
file a petition or an answer seeking reorganization or an arrangement
with creditors or seeking to take advantage of any other law (whether
federal or state) relating to relief of debtors, or admit (by answer,
by default or otherwise) the material allegations of a petition filed
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against it in any bankruptcy, reorganization, insolvency or other
proceeding (whether federal or state) relating to relief of debtors,
or (g) suffer or permit to continue unstayed and in effect for sixty
(60) consecutive days any judgment, decree or order entered by a court
or governmental commission of competent jurisdiction, which assumes
custody or control of Borrower, approves a petition seeking
reorganization of Borrower or any other judicial modification of the
rights of its creditors, or appoints a receiver, a custodian, a
trustee, an interim trustee or liquidator for itself or of all or a
substantial part of its assets.
14. REMEDIES UPON DEFAULT. Notwithstanding any contrary provision or
inference herein or elsewhere,
14.1. OPTIONAL DEFAULTS. If any event of default referred to
in Subsection 13.1, 13.2, 13.3, 13.4, 13.5, 13.6 or 13.7 hereof shall
occur, the holders of not less than sixty percent (60%) (by amount) of
the Notes shall have the right in their discretion, by directing the
Agent, on behalf of the Banks, to give written notice to Borrower, to
(a) terminate the Commitments (if not already terminated)
and no Bank thereafter shall be under any obligation to grant
Borrower any further Revolving Credit Loans or to issue
commercial letters of credit hereunder, and/or
(b) accelerate the maturity of all of Debt to the Banks (if
it be not already due and payable), whereupon all of the Debt to
the Banks shall become and thereafter be immediately due and
payable in full without any presentment or demand and without any
further or other notice of any kind, all of which are hereby
waived by Borrower.
14.2. AUTOMATIC DEFAULTS. If any event of default referred
to in Subsection 13.8 hereof shall occur,
(a) all of the Commitments shall automatically and
forthwith terminate (if not already terminated) and no Bank
thereafter shall be under any obligation to grant any further
loan or loans or to issue commercial letters of credit; and
(b) the principal of and interest on all Notes then
outstanding and all of the Debt to the Banks shall thereupon
become and thereafter be immediately due and payable in full (if
it be not already due and payable), all without any presentment,
demand or notice of any kind, which are hereby waived by
Borrower.
14.3. OFFSETS. If there shall occur or exist any Possible
Default referred to in Subsection 13.8 hereof, each Bank shall have
the right at any time to set off against, and to appropriate and apply
toward the payment of, any and all Debt then owing by Borrower to that
Bank (including, without limitation, any participation purchased or to
be purchased pursuant to Subsection 14.4 or Subsection 16.6 hereof),
whether or not the same shall then have matured, any and all deposit
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balances and all other indebtedness then held or owing by that Bank to
or for the credit or account of Borrower (except for funds deposited
for taxes, payroll, employee contribution, profit sharing, employee
saving and similar funds in which Borrower has no beneficial
interest), all without notice to or demand upon Borrower or any other
person, all such notices and demands being hereby expressly waived by
Borrower.
14.4. EQUALIZATION PROVISION. Each Bank agrees with the
other Banks that if it at any time shall obtain any Advantage over the
other Banks or any thereof in respect of Borrower's Debt to the Banks,
it will purchase from the other Banks, for cash and at par, such
additional participation in Borrower's Debt to the Banks as shall be
necessary to nullify the Advantage. If any said Advantage resulting
in the purchase of an additional participation as aforesaid shall be
recovered in whole or in part from the Bank receiving the Advantage,
each such purchase shall be rescinded, and the purchase price restored
(but without interest, unless the Bank receiving the Advantage is
required to pay interest on the Advantage to the person recovering the
Advantage from such Bank) ratably to the extent of the recovery. Each
Bank further agrees with the other Banks that if it at any time shall
receive any payment for or on behalf of Borrower on any indebtedness
owing by Borrower to that Bank by reason of offset of any deposit or
other indebtedness or otherwise, it will apply such payment first to
any and all indebtedness owing by Borrower to that Bank pursuant to
this credit agreement (including, without limitation, any
participation purchased or to be purchased pursuant to this Subsection
14.4 and Subsection 16.6) until Borrower's Debt has been paid in full.
Borrower agrees that any Bank so purchasing a participation from the
other Banks or any thereof pursuant to this Subsection may exercise
all its rights of payment (including the right of set-off) with
respect to such participation as fully as if such Bank was a direct
creditor of Borrower in the amount of such participation.
15. THE AGENT. The Banks authorize Society National Bank and Society
National Bank hereby agrees to act as Agent for the Banks in respect of
this credit agreement upon the terms and conditions set forth elsewhere in
this credit agreement, and upon the following terms and conditions:
15.1. APPOINTMENT AND AUTHORIZATION. Each Bank hereby
irrevocably appoints and authorizes the Agent to take such action as
Agent on its behalf and to exercise such powers hereunder as are
delegated to the Agent by the terms hereof, together with such powers
as are reasonably incidental thereto. Neither the Agent nor any of
its directors, officers, attorneys or employees shall be liable for
any action taken or omitted to be taken by it or them hereunder or in
connection herewith, except for its or their own gross negligence or
willful misconduct.
15.2. NOTE HOLDERS. The Agent may treat the payee of any
Note as the holder thereof until written notice of transfer shall have
been filed with it signed by such payee and in form satisfactory to
the Agent.
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15.3. CONSULTATION WITH COUNSEL. The Agent may consult with
legal counsel selected by it and shall not be liable for any action
taken or suffered in good faith by it in accordance with the opinion
of such counsel.
15.4. DOCUMENTS. The Agent shall not be under a duty to
examine into or pass upon the validity, effectiveness, genuineness or
value of this credit agreement, the Notes, any other Related Writing
furnished pursuant hereto or in connection herewith or the value of
any collateral obtained hereunder, and the Agent shall be entitled to
assume that the same are valid, effective and genuine and what they
purport to be.
15.5. AGENT AND AFFILIATES. With respect to the loans made
hereunder, the Agent shall have the same rights and powers hereunder
as any other Bank and may exercise the same as though it were not the
Agent, and the Agent and its affiliates may accept deposits from, lend
money to and generally engage in any kind of business with Borrower or
any Subsidiary or affiliate of Borrower.
15.6. KNOWLEDGE OF DEFAULT. It is expressly understood and
agreed that the Agent shall be entitled to assume that no Possible
Default or event of default has occurred and is continuing, unless the
Agent has been notified by a Bank in writing that such Bank considers
that a Possible Default or event of default has occurred and is
continuing and specifying the nature thereof.
15.7. ACTION BY AGENT. So long as the Agent shall be
entitled, pursuant to Subsection 15.6 hereof, to assume that no
Possible Default or event of default shall have occurred and be
continuing, the Agent shall be entitled to use its discretion with
respect to exercising or refraining from exercising any rights which
may be vested in it by, or with respect to taking or refraining from
taking any action or actions which it may be able to take under or in
respect of, this credit agreement. The Agent shall incur no liability
under or in respect of this credit agreement by acting upon any
notice, certificate, warranty or other paper or instrument believed by
it to be genuine or authentic or to be signed by the proper party or
parties, or with respect to anything which it may do or refrain from
doing in the reasonable exercise of its judgment, or which may seem to
it to be necessary or desirable in the premises.
15.8. NOTICES, DEFAULT, ETC. In the event that the Agent
shall have acquired actual knowledge of any Possible Default, the
Agent shall promptly notify the Banks and will take such action and
assert such rights under this credit agreement as the holders of at
least sixty percent (60%) (by amount) of the Notes shall direct and
the Agent shall inform the other Banks in writing of the action taken.
The Agent may take such action and assert such rights as it deems to
be advisable, in its discretion, for the protection of the interests
of the holders of the Notes.
15.9. INDEMNIFICATION. The Banks agree to indemnify the
Agent (to the extent not reimbursed by Borrower), ratably according to
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the respective principal amounts of their Notes from and against any
and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind or
nature whatsoever which may be imposed on, incurred by or asserted
against the Agent in its capacity as agent in any way relating to or
arising out of this credit agreement or any action taken or omitted by
the Agent with respect to this credit agreement, provided that no Bank
shall be liable for any portion of such liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses
or disbursements resulting from the Agent's gross negligence, willful
misconduct or from any action taken or omitted by the Agent in any
capacity other than as agent under this credit agreement.
16. MISCELLANEOUS.
16.1. BANKS' INDEPENDENT INVESTIGATION. Each Bank by its
signature to this credit agreement acknowledges and agrees that the
Agent has made no representation or warranty, express or implied, with
respect to the creditworthiness, financial condition, or any other
condition of Borrower or any Subsidiary or with respect to the
statements contained in any information memorandum furnished in
connection herewith or in any other oral or written communication
between the Agent and such Bank. Each Bank represents that it has
made and shall continue to make its own independent investigation of
the creditworthiness, financial condition and affairs of Borrower and
any Subsidiary in connection with the extension of credit hereunder,
and agrees that the Agent has no duty or responsibility, either
initially or on a continuing basis, to provide any Bank with any
credit or other information with respect thereto (other than such
notices as may be expressly required to be given by Agent to the Banks
hereunder), whether coming into its possession before the granting of
the first loans or at any time or times thereafter.
16.2. NO WAIVER; CUMULATIVE REMEDIES. No omission or course
of dealing on the part of Agent, any Bank or the holder of any Note in
exercising any right, power or remedy hereunder shall operate as a
waiver thereof; nor shall any single or partial exercise of any such
right, power or remedy preclude any other or further exercise thereof
or the exercise of any other right, power or remedy hereunder. The
remedies herein provided are cumulative and in addition to any other
rights, powers or privileges held by operation of law, by contract or
otherwise.
16.3. AMENDMENTS, CONSENTS. No amendment, modification,
termination, or waiver of any provision of this credit agreement or of
the Notes nor consent to any variance therefrom, shall be effective
unless the same shall be in writing and signed by the holders of sixty
percent (60%) (by amount) of the Debt and then such waiver or consent
shall be effective only in the specific instance and for the specific
purpose for which given. Unanimous consent of the holders of one
hundred percent (100%) (by amount) of the Notes shall be required with
respect to (i) the extension of maturity of the Notes, or the payment
date of interest thereunder, (ii) any reduction in the rate of
interest on the Notes or in the commitment fees, or in any amount of
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principal or interest due on any Note, or in the manner of pro rata
application of any payments made by Borrower to the Banks hereunder,
or any change in amortization schedules, or (iii) any change in any
percentage voting requirement in this credit agreement. Notice of
amendments or consents ratified by the Banks hereunder shall
immediately be forwarded by Borrower to all Banks. Each Bank or other
holder of a Note shall be bound by any amendment, waiver or consent
obtained as authorized by this Section, regardless of its failure to
agree thereto.
16.4. NOTICES. All notices, requests, demands and other
communications provided for hereunder shall be in writing and, if to
Borrower, mailed or delivered to it, addressed to it at the address
specified on the signature pages of this credit agreement, if to a
Bank, mailed or delivered to it, addressed to the address of such Bank
specified on the signature pages of this credit agreement. All
notices, statements, requests, demands and other communications
provided for hereunder shall be deemed to be given or made when
delivered or forty-eight (48) hours after being deposited in the mails
with postage prepaid by registered or certified mail or delivered to a
telegraph company, addressed as aforesaid, except that notices from
Borrower to Agent or the Banks pursuant to any of the provisions of
Sections 3, 4, 6, 8 and 9 hereof shall not be effective until received
by Agent or the Banks.
16.5. COSTS, EXPENSES AND TAXES. Borrower agrees to pay on
demand all costs and expenses of the Banks and Agent, including (i)
reasonable out-of-pocket expenses of Agent (including the expenses of
in-house counsel) in connection with the negotiation and documentation
of this credit agreement, the Notes, the collection and disbursement
of all funds hereunder and the other instruments and documents to be
delivered hereunder, (ii) the reasonable fees and out-of-pocket
expenses of any special counsel for the Agent, with respect thereto
and of local counsel, if any, who may be retained by said special
counsel with respect thereto, and (iii) all costs and expenses, if
any, in connection with any Event of Default or the enforcement of
this credit agreement or the Notes. In addition, Borrower shall pay
any and all stamp and other taxes and fees payable or determined to be
payable in connection with the execution and delivery of this credit
agreement or the Notes, and the other instruments and documents to be
delivered hereunder, and agrees to save Agent and each Bank harmless
from and against any and all liabilities with respect to or resulting
from any delay in payment or omission to pay such taxes or fees.
16.6. SALE OF PARTICIPATION. Each Bank has the right at any
time to sell a participation in the Debt to any other bank upon the
written consent of Borrower and Agent, which will not be unreasonably
withheld; provided, that each such participation shall equal at least
Ten Million Dollars ($10,000,000). No Bank shall be released from any
of its obligations hereunder by virtue of any such sale of a
participation.
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16.7. OBLIGATIONS SEVERAL; NO FIDUCIARY OBLIGATIONS. The
obligations of the Banks hereunder are several and not joint. Nothing
contained in this credit agreement and no action taken by Agent or the
Banks pursuant hereto shall be deemed to constitute the Banks a
partnership, association, joint venture or other entity. No default
by any Bank hereunder shall excuse the other Banks from any obligation
under this credit agreement; but no Bank shall have or acquire any
additional obligation of any kind by reason of such default. The
relationship among Borrower and the Banks with respect to this credit
agreement, any Note and any Related Writing is and shall be solely
that of debtor and creditor, respectively, and no Bank has any
fiduciary obligation toward Borrower with respect to any such
documents or the transactions contemplated thereby.
16.8. EXECUTION IN COUNTERPARTS. This credit agreement may
be executed in any number of counterparts and by different parties
hereto in separate counterparts, each of which when so executed and
delivered shall be deemed to be an original and all of which taken
together shall constitute but one and the same agreement.
16.9. BINDING EFFECT; ASSIGNMENT. This credit agreement
shall become effective when it shall have been executed by Borrower,
Agent and by each Bank and thereafter shall be binding upon and inure
to the benefit of Borrower and each of the Banks and their respective
successors and assigns, except that Borrower shall not have the right
to assign its rights hereunder or any interest herein without the
prior written consent of all of the Banks. No person, other than the
Banks, shall have or acquire any obligation to grant Borrower any
loans hereunder.
16.10. GOVERNING LAW. This credit agreement, each of the
Notes and any Related Writing shall be governed by and construed in
accordance with the laws of the State of Ohio and the respective
rights and obligations of Borrower and the Banks shall be governed by
Ohio law, without regard to principles of conflict of laws.
16.11. SEVERABILITY OF PROVISIONS; CAPTIONS. Any provision of
this credit agreement which is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the
extent of such prohibition or unenforceability without invalidating
the remaining provisions hereof or affecting the validity or
enforceability of such provision in any other jurisdiction. The
several captions to Sections and Subsections herein are inserted for
convenience only and shall be ignored in interpreting the provisions
of this credit agreement.
16.12. INVESTMENT PURPOSE. Each of the Banks represents and
warrants to Borrower that it is entering into this credit agreement
with the present intention of acquiring any Note issued pursuant
hereto solely in connection with such Bank's commercial lending
activities and not for the purpose of distribution or resale; that it
shall take no action which would require the registration of the Notes
under Section 5 of the Securities Act of 1933, it being understood,
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however, that each Bank shall at all times retain full control over
the disposition of its assets.
16.13. CAPITAL ADEQUACY. If any Bank shall have determined,
after the date hereof, that the adoption of any applicable law, rule,
regulation or guideline regarding capital adequacy, or any change
therein, or any change in the interpretation or administration thereof
by any governmental authority, central bank or comparable agency
charged with the interpretation or administration thereof, or
compliance by any Bank (or its lending office) with any request or
directive regarding capital adequacy (whether or not having the force
of law) of any such authority, central bank or comparable agency, has
or would have the effect of reducing the rate of return on such Bank's
capital (or the capital of its holding company) as a consequence of
its obligations hereunder to a level below that which such Bank (or
its holding company) could have achieved but for such adoption, change
or compliance (taking into consideration such Bank's policies or the
policies of its holding company with respect to capital adequacy) by
an amount deemed by such Bank to be material, then from time to time,
within 15 days after demand by such Bank (with a copy to the Agent),
Borrower shall pay to such Bank such additional amount or amounts as
will compensate such Bank (or its holding company) for such reduction
Each Bank will designate a different lending office if such
designation will avoid the need for, or reduce the amount of, such
compensation and will not, in the judgment of such Bank, be otherwise
disadvantageous to such Bank. A certificate of any Bank claiming
compensation under this Section and setting forth the additional
amount or amounts to be paid to it hereunder shall be conclusive in
the absence of manifest error. In determining such amount, such Bank
may use any reasonable averaging and attribution methods. Failure on
the part of any Bank to demand compensation for any reduction in
return on capital with respect to any period shall not constitute a
waiver of such Bank's rights to demand compensation for any reduction
in return on capital in such period or in any other period. The
protection of this Section shall be available to each Bank regardless
of any possible contention of the invalidity or inapplicability of the
law, regulation or other condition which shall have been imposed.
16.14. ENTIRE AGREEMENT. This credit agreement, any Note and
any other agreement, document or instrument attached hereto or
referred to herein or executed on or as of the date hereof integrate
all the terms and conditions mentioned herein or incidental hereto and
supersede all oral representations and negotiations and prior writings
with respect to the subject matter hereof.
17. DEFINITIONS. As used herein,
"Adjusted LIBOR" shall mean a rate per annum equal to the quotient
obtained (rounded upwards, if necessary, to the nearest 1/100th of 1%) by
dividing (i) the applicable LIBOR rate by (ii) 1.00 minus the Reserve
Percentage;
"Advantage" shall mean any payment (whether made voluntarily or
involuntarily, by offset of any deposit or other indebtedness or otherwise)
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received by any Bank in respect of Borrower's Debt to the Banks if such
payment results in that Bank having a lesser share of Borrower's Debt to
the Banks, than was the case immediately before such payment;
"C/D Reference Bank" shall mean Society National Bank;
"Cleveland banking day" shall mean a day on which the main office of
the Agent is open for the transaction of business;
"Commitment" shall mean the obligation hereunder of each Bank to make
loans up to the amount set opposite such Bank's name appearing in
Subsection 3.1 hereof during the Commitment Period (or such lesser amount
as shall be determined pursuant to Subsection 3.2 hereof);
"Commitment Period" shall mean the period from the date hereof through
April 30, 1997, as such date may be extended pursuant to Subsection 3.4
hereof;
"Consolidated Net Worth" shall mean the excess of the net book value
(after deduction of all applicable reserves and excluding any re-appraisal
or write-up of assets) of the assets (other than patents, good will and
similar intangibles) of Borrower and its Subsidiaries over all of their
liabilities (other than any liabilities Subordinated, by writing in form
and substance satisfactory to the Banks, in favor of all of Borrower's Debt
to the Banks and other than deferred taxes on income payable after December
31, 1996) as determined on a consolidated basis in accordance with
generally accepted accounting principles applied on a basis not
inconsistent with their present accounting procedures;
"Debt" shall mean, collectively, all indebtedness incurred by Borrower
to the Banks pursuant to this credit agreement and includes all
indebtedness incurred under the letters of credit issued hereunder, the
principal of and interest on all Notes and each extension, renewal or
refinancing thereof in whole or in part, the commitment fees, L/C Fees,
Administrative Fees, facility fees, the Agent's fees, the participation
fees and any prepayment premium payable hereunder;
"Domestic Base Rate" shall mean a rate per annum determined pursuant
to the following formula:
( Dom. CD )*
DBR = ( -------- ) + AR
( 1.00 - RP)
DBR = Domestic Base Rate
Dom. CD = Domestic C/D Rate
RP = Domestic Reserve Percentage
AR = Assessment Rate
*The amount in brackets being rounded upwards,
if necessary, to the nearest 1/100 of 1%.
"Domestic C/D Rate" shall mean with respect to each Domestic
Interest Period the rate of interest determined by the Agent to be the
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<PAGE>
arithmetic average (rounded upwards, if necessary, to the nearest
1/100 of 1%) of the prevailing rates per annum bid at 10:00 a.m.
(Cleveland, Ohio time) (or as soon thereafter as practicable) on the
first day of the relevant Domestic Interest Period by New York
certificate of deposit dealers of recognized standing to the C/D
Reference Bank and reported to the Agent by two or more such dealers
for the purchase at face value from the C/D Reference Bank of its
certificates of deposit in an amount approximately equal or comparable
to the C/D Reference Bank's pro rata share of such Domestic Fixed Rate
Loans and having a maturity of 30, 60, 90 or 180 days, as selected by
Borrower;
"Domestic Reserve Percentage" shall mean for any day that
percentage (expressed as a decimal) which is in effect on such day, as
prescribed by the Board of Governors of the Federal Reserve System (or
any successor) for determining the maximum reserve requirement
(including, without limitation, all basic, supplemental, marginal and
other reserves and taking into account any transitional adjustments or
other scheduled changes in reserve requirements) for a member bank of
the Federal Reserve System in Cleveland, Ohio, in respect of new
nonpersonal time deposits in dollars in the United States, having a
maturity comparable to the related Domestic Interest Period and in an
amount of One Hundred Thousand Dollars ($100,000.00) or more. The
Domestic Base Rate shall be adjusted automatically on and as of the
effective date of any change in the Domestic Reserve Percentage;
"Assessment Rate" shall mean for any Domestic Interest Period the
net annual assessment rate (rounded upwards, if necessary, to the next
higher 1/100th of 1%) actually incurred by Agent to the Federal
Deposit Insurance Corporation (or any successor) for such
corporation's (or such successor's) insuring deposits in United States
dollars at the offices of Agent in the United States during the most
recent period for which such rate has been determined prior to the
commencement of such Domestic Interest Period. The Domestic Base Rate
shall be automatically adjusted on and as of the effective date of any
change in the Assessment Rate;
"Domestic Fixed Rate" shall mean a rate per annum equal to the sum of
the Domestic Margin plus the Domestic Base Rate;
"Domestic Fixed Rate Loans" shall mean those loans described in
Section 3 hereof on which Borrower shall pay interest at a rate based on
the applicable Domestic Fixed Rate;
"Domestic Interest Period" shall mean a period of 30, 60, 90 or 180
days (as selected by Borrower) commencing on the applicable borrowing date
of each Domestic Fixed Rate Loan and on each Interest Adjustment Date as
the case may be;
"Domestic Margin" shall mean three-fourths percent (3/4 of 1%) for all
Domestic Fixed Rate Loans;
"Environmental Laws" shall mean all provisions of law, statutes,
ordinances, rules, regulations, permits, licenses, judgments, writs,
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injunctions, decrees, orders, awards and standards promulgated by the
government of the United States of America or by any state or municipality
thereof or by any court, agency, instrumentality, regulatory authority or
commission of any of the foregoing concerning health, safety and protection
of, or regulation of the discharge of substances into, the environment;
"ERISA Affiliate" shall mean any Subsidiary and any other trade or
business (whether or not incorporated) which would be deemed to be under
common control with Borrower and its Subsidiaries under Section 414(b) or
414(c) of the Internal Revenue Code of 1986, as amended from time to time;
"Eurocurrency Liabilities" has the meaning assigned to that term in
Regulation D of the Board of Governors of the Federal Reserve System, as in
effect from time to time;
"Funded Indebtedness" shall mean indebtedness for borrowed money
(including current maturities of such indebtedness) which (including any
renewal or extension in whole or in part) matures or remains unpaid for
more than twelve (12) months after the date on which originally incurred;
"Guarantor" shall mean one who pledges his credit or property in any
manner for the payment or other performance of the indebtedness, contract
or other obligation of another and includes (without limitation) any
guarantor (whether of payment or of collection), surety, co-maker, endorser
or one who agrees conditionally or otherwise to make any purchase, loan or
investment in order thereby to enable another to prevent or correct a
default of any kind;
"Interest Adjustment Date" shall mean the last day of each Interest
Period or each Transaction Interest Period or each Domestic Interest
Period, as the case may be;
"Interest Period" shall mean a period of one, two, three or six months
(as selected by Borrower) commencing on the applicable borrowing or
conversion date of each LIBOR Loan Interest Adjustment Date, as the case
may be;
"LIBOR" shall mean the average (rounded upward to the nearest 1/16th
of 1%) of the per annum rates at which deposits in immediately available
funds in United States dollars for the relevant Interest Period and in the
amount of the LIBOR Loan to be disbursed or to remain outstanding during
such Interest Period, as the case may be, are offered to the Reference Bank
by prime banks in any Eurodollar market reasonably selected by the
Reference Bank, determined as of 11:00 a.m. London time (or as soon
thereafter as practicable), two (2) London banking days prior to the
beginning of the relevant Interest Period pertaining to a LIBOR Loan
hereunder;
"LIBOR Loans" shall mean those loans described in Section 3 hereof on
which Borrower shall pay interest at a rate based on LIBOR;
``LIBOR Margin'' shall mean five-eighths percent (5/8 of 1%) for all
LIBOR Loans;
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"London banking day" shall mean a day on which banks are open for
business in London, England, and quoting deposit rates for dollar deposits;
"Net Earnings" shall mean Borrower's net earnings (other than any gain
attributable to the write-up or re-valuation of any asset or any non-cash
gain or loss attributable to the sale of any asset other than inventory) as
determined after taxes (excluding deferred taxes) imposed on Borrower, in
accordance with generally accepted accounting principles;
"Note" or "Notes" shall mean a note or notes executed and delivered
pursuant to Section 3 hereof;
"Partnership Agreement" shall mean the Third Amended and Restated
Agreement of Limited Partnership of Borrower, dated as of April 27, 1987
and as amended December 31, 1988 and December 31, 1992;
"Plan" shall mean any employee pension benefit plan subject to Title
IV of the Employee Retirement Income Security Act of 1974, as amended,
established or maintained by Borrower or any Subsidiary of which covers
employees or trades or businesses which are under common control with
Borrower or any Subsidiary, or any such Plan to which Borrower or any
Subsidiary is required to contribute on behalf of any of its employees or
employees of trades or businesses which are under common control;
"Possible Default" shall mean an event, condition or thing which
constitutes, or which with the lapse of any applicable grace period or the
giving of notice or both would constitute any event of default referred to
in Section 13 hereof and which has not been appropriately waived by Banks
in writing in accordance with Subsection 16.3 hereof or fully corrected
prior to becoming an actual event of default;
"Prime Rate" shall mean that interest rate established from time to
time by the Agent as the Agent's Prime Rate, whether or not such rate is
publicly announced; the Prime Rate may not be the lowest interest rate
charged by Agent for commercial or other extensions of credit. Any change
in the Prime Rate shall be effective hereunder immediately from and after
the effective date of change in such rate by Agent;
"Prime Rate Loans" shall mean those loans described in Section 3
hereof on which the Borrower shall pay interest at a rate based on the
Prime Rate;
"Receivable" shall mean a claim for moneys due or to become due,
whether classified as a contract right, account, chattel paper, instrument,
general intangible or otherwise;
"Reference Bank" shall mean Society National Bank;
"Regulatory Change" shall mean, as to any Bank, any change in United
States federal, state or foreign laws or regulations or the adoption or
making of any interpretations, directives or requests of or under any
United States federal, state or foreign laws or regulations (whether or not
having the force of law) by any court or governmental authority charged
with the interpretation or administration thereof, excluding, however, any
53
<PAGE>
such change which results in an adjustment of the Assessment Rate or the
Domestic Reserve Percentage and the effect of which is reflected in a
change in the Domestic Base Rate;
"Related Writing" shall mean any assignment, mortgage, security
agreement, subordination agreement, or other writing certified as true and
correct by Borrower or any of its Subsidiaries pursuant to or otherwise in
connection with this credit agreement;
"Reportable Event" shall mean a reportable event as that term is
defined in Title IV of the Employee Retirement Income Security Act of 1974,
as amended, except actions of general applicability by the Secretary of
Labor under Section 110 of such Act; and a "Thirty-Day Reportable Event" is
a Reportable Event with respect to which the Thirty-Day notice requirement
has not been waived by the Pension Benefit Guaranty Corporation;
"Reserve Percentage" shall mean for any day that percentage (expressed
as a decimal) which is in effect on such day, as prescribed by the Board of
Governors of the Federal Reserve System (or any successor) for determining
the maximum reserve requirement (including, without limitation, all basic,
supplemental, marginal and other reserves and taking into account any
transitional adjustments or other scheduled changes in reserve
requirements) for a member bank of the Federal Reserve System in Cleveland,
Ohio, in respect of "Eurocurrency Liabilities". The Adjusted LIBOR shall
be adjusted automatically on and as of the effective date of any change in
the Reserve Percentage;
"Revolving Credit Loan" shall mean a loan obtained pursuant to
Subsection 3.1 hereof, and "Revolving Credit Note" shall mean a note
executed and delivered pursuant to Subsection 3.1 hereof;
"Senior Debt" shall mean the One Hundred Million Dollar ($100,000,000)
Private Shelf Facility created under the Private Shelf Agreement by and
between Borrower and The Prudential Insurance Company of America, dated
August 24, 1994;
"Subordinated" as applied to indebtedness, shall mean that the
indebtedness has been subordinated (by written terms or agreement being in
form and substance satisfactory to the Banks) in favor of the prior payment
in full of the Debt to the Banks;
"Subsidiary" shall mean any existing or future corporation or
partnership, the majority of the outstanding capital stock or voting power,
or both, of which is (or upon the exercise of all outstanding warrants,
options and other rights would be) owned at the time in question by
Borrower or by another such corporation or partnership or by any
combination of Borrower and such corporations or partnerships;
"Transaction Interest Period" shall mean a period of 1 to 60 days (as
selected by Borrower)commencing on the applicable borrowing date for each
Transaction Loan or on each Interest Adjustment Date with respect thereto;
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<PAGE>
"Transaction Loans" shall mean those loans described in Section 3
hereof on which Borrower shall pay interest at a rate based on the
applicable Transaction Rate;
"Transaction Rate" shall mean the per annum rate quoted by Agent to
Borrower at the time Borrower requests or renews a Transaction Loan, which
rate shall remain in effect during the applicable Transaction Interest
Period pertaining to such Transaction Loan, it being understood that such
quoted rate shall never be less than the highest transaction or other
comparable rate quoted by the other Banks to the Agent at the time of such
request or renewal, as the case may be;
Any accounting term not covered by a specific definition in this
Section 17 shall have the meaning ascribed thereto in accordance with
generally accepted accounting principles not inconsistent with Borrower's
present accounting procedures; and the foregoing definitions shall be
applicable to the singulars and plurals of the foregoing defined terms.
18. NO RECOURSE. Notwithstanding any other provision contained in
this credit agreement or in any Note delivered hereby, the Banks agree that
no recourse under or in respect of this credit agreement or the Notes shall
be had against any partner, shareholder of a partner or partner of a
partner of Borrower by the enforcement of any assessment or by any legal or
equitable proceeding by virtue of statute or otherwise, it being expressly
agreed that no personal liability whatsoever shall attach to or be incurred
by the partners, shareholders of partners or partners of partners of
Borrower or any of them under or by reason of this credit agreement or the
Notes; provided, that the foregoing limitation of liability shall in no way
constitute a limitation on the right of the holders of the Notes to enforce
their remedies against Borrower's assets for the collection of amounts due
and owing under the Notes or any other obligation of Borrower contemplated
by this credit agreement.
19. TERMINATION OF PRIOR CREDIT AGREEMENT. Upon the payment in full
of all principal of, and interest and fees accruing on or with respect to,
the notes delivered to the Banks pursuant to the credit agreement made as
of February 23, 1990, as amended, by and among Borrower, the Banks, and the
Agent as agent for the Banks, such credit agreement shall be terminated in
accordance with its terms and the notes cancelled and returned to Borrower.
20. JURY TRIAL WAIVER. BORROWER AND EACH OF THE BANKS WAIVE ANY
RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER SOUNDING
IN CONTRACT, TORT, OR OTHERWISE, AMONG BORROWER AND THE BANKS, OR ANY
THEREOF, ARISING OUT OF, IN CONNECTION WITH, RELATED TO, OR INCIDENTAL TO
THE RELATIONSHIP ESTABLISHED AMONG THEM IN CONNECTION WITH THIS CREDIT
AGREEMENT OR ANY NOTE OR OTHER INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED
OR DELIVERED IN CONNECTION HEREWITH OR THE TRANSACTIONS RELATED THEREOF.
55
<PAGE>
Address: P. O. Box 5006 CEDAR FAIR, L.P.
Sandusky, Ohio 44871-8006
By: Cedar Fair Management Company,
Managing General Partner
By: Thomas W. Salamone
Title: Treasurer
Address: 127 Public Square SOCIETY NATIONAL BANK, individually
Cleveland, Ohio 44114-1306 and as Agent
By: Richard A. Pohle
Title: Vice President
Address: Attn: Midwest Banking NBD BANK, N.A.
Division
611 Woodward Avenue By: Lisa A. Ferris
Detroit, Michigan 48226
Title: Vice President
Address: 1900 East 9th Street NATIONAL CITY BANK
Cleveland, Ohio 44114
By: Michael P. Burns
Title: Vice President
56
<PAGE>
REVOLVING CREDIT NOTE
$38,000,000.00 Cleveland, Ohio, October 6, 1994
FOR VALUE RECEIVED, the undersigned, CEDAR FAIR, L.P. (the "Borrower")
promises to pay on the last day of the Commitment Period to the order of
SOCIETY NATIONAL BANK (the "Bank") at the Main Office of Society National
Bank, 127 Public Square, Cleveland, Ohio 44114-1306, the principal sum of
THIRTY-EIGHT MILLION AND 00/100 - - - - - - - - - - - - - - - - DOLLARS
or the aggregate unpaid principal amount of all loans evidenced by this
note made by the Bank to Borrower pursuant to Subsection 3.1 of the credit
agreement hereinafter referred to, whichever is less, in lawful money of
the United States of America. Capitalized terms used herein shall have the
meanings ascribed to them in said credit agreement.
Borrower promises also to pay interest on the unpaid principal amount
of each loan from time to time outstanding from the date of such loan until
the payment in full thereof at the rates per annum which shall be
determined in accordance with the provisions of Subsection 3.1 of the
credit agreement. Said interest shall be payable on each date provided for
in Subsection 3.1; provided, however, that interest on any principal
portion which is not paid when due shall be payable on demand.
The portions of the principal sum hereof from time to time
representing Prime Rate Loans, Domestic Fixed Rate Loans, LIBOR Loans and
Transaction Loans, and payments of principal of any thereof, will be shown
on the grid(s) attached hereto and made a part hereof, or the Bank shall
record such information by such other method as the Bank may generally
employ; provided, however, that failure to make any such entry shall in no
way detract from Borrower's obligations under this note. All loans by the
Bank to Borrower pursuant to the credit agreement and all payments on
account of principal hereof shall be recorded by the Bank prior to transfer
hereof and endorsed on such grid(s).
If this note shall not be paid at maturity, whether such maturity
occurs by reason of lapse of time or by operation of any provision for
acceleration of maturity contained in the credit agreement hereinafter
referred to, the principal hereof and the unpaid interest thereon through
the date of maturity shall bear interest, from the date of such nonpayment
until paid, for Prime Rate Loans, Domestic Fixed Rate Loans, LIBOR Loans
and Transaction Loans at a rate per annum which shall be equal to two per
cent (2%) in excess of the Prime Rate from time to time in effect. All
payments of principal of and interest on this note shall be made in
immediately available funds.
This note is one of the Revolving Credit Notes referred to in the
credit agreement dated as of October 6, 1994, as the same may be amended
from time to time, between Borrower, the Banks named therein and Society
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<PAGE>
National Bank, as Agent. Reference is made to such credit agreement for a
description of the right of the undersigned to anticipate payments hereof,
the right of the holder hereof to declare this note due prior to its stated
maturity, and other terms and conditions upon which this note is issued.
The holder hereof agrees that no recourse under or in respect of this
note shall be had against any partner, shareholder of a partner or partner
of a partner of Borrower by the enforcement of any assessment or by any
legal or equitable proceedings, by virtue of statute or otherwise, it being
expressly agreed that no personal liability whatsoever shall attach to or
be incurred by the aforesaid partners, shareholders of partners or partners
of partners or any of them under or by reason of this note; provided that
the foregoing limitation of liability shall in no way constitute a
limitation on the right of the holder of this note to enforce its remedies
against Borrower's assets for the collection of amounts due and owing
hereunder or under the credit agreement.
Address: P. O. Box 5006 CEDAR FAIR, L.P.
Sandusky, Ohio
44871-8006 By: Cedar Fair Management Company,
Managing General Partner
By: Thomas W. Salamone
Title: Treasurer
58
<PAGE>
REVOLVING CREDIT NOTE
$28,500,000.00 Cleveland, Ohio, October 6, 1994
FOR VALUE RECEIVED, the undersigned, CEDAR FAIR, L.P. (the "Borrower")
promises to pay on the last day of the Commitment Period to the order of
NBD BANK, N.A. (the "Bank") at the Main Office of Society National Bank,
127 Public Square, Cleveland, Ohio 44114-1306, the principal sum of
TWENTY-EIGHT MILLION FIVE HUNDRED THOUSAND AND 00/100 - - - DOLLARS
or the aggregate unpaid principal amount of all loans evidenced by this
note made by the Bank to Borrower pursuant to Subsection 3.1 of the credit
agreement hereinafter referred to, whichever is less, in lawful money of
the United States of America. Capitalized terms used herein shall have the
meanings ascribed to them in said credit agreement.
Borrower promises also to pay interest on the unpaid principal amount
of each loan from time to time outstanding from the date of such loan until
the payment in full thereof at the rates per annum which shall be
determined in accordance with the provisions of Subsection 3.1 of the
credit agreement. Said interest shall be payable on each date provided for
in Subsection 3.1; provided, however, that interest on any principal
portion which is not paid when due shall be payable on demand.
The portions of the principal sum hereof from time to time
representing Prime Rate Loans, Domestic Fixed Rate Loans, LIBOR Loans and
Transaction Loans, and payments of principal of any thereof, will be shown
on the grid(s) attached hereto and made a part hereof, or the Bank shall
record such information by such other method as the Bank may generally
employ; provided, however, that failure to make any such entry shall in no
way detract from Borrower's obligations under this note. All loans by the
Bank to Borrower pursuant to the credit agreement and all payments on
account of principal hereof shall be recorded by the Bank prior to transfer
hereof and endorsed on such grid(s).
If this note shall not be paid at maturity, whether such maturity
occurs by reason of lapse of time or by operation of any provision for
acceleration of maturity contained in the credit agreement hereinafter
referred to, the principal hereof and the unpaid interest thereon through
the date of maturity shall bear interest, from the date of such nonpayment
until paid, for Prime Rate Loans, Domestic Fixed Rate Loans, LIBOR Loans
and Transaction Loans at a rate per annum which shall be equal to two per
cent (2%) in excess of the Prime Rate from time to time in effect. All
payments of principal of and interest on this note shall be made in
immediately available funds.
This note is one of the Revolving Credit Notes referred to in the
credit agreement dated as of October 6, 1994, as the same may be amended
from time to time, between Borrower, the Banks named therein and Society
National Bank, as Agent. Reference is made to such credit agreement for a
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<PAGE>
description of the right of the undersigned to anticipate payments hereof,
the right of the holder hereof to declare this note due prior to its stated
maturity, and other terms and conditions upon which this note is issued.
The holder hereof agrees that no recourse under or in respect of this
note shall be had against any partner, shareholder of a partner or partner
of a partner of Borrower by the enforcement of any assessment or by any
legal or equitable proceedings, by virtue of statute or otherwise, it being
expressly agreed that no personal liability whatsoever shall attach to or
be incurred by the aforesaid partners, shareholders of partners or partners
of partners or any of them under or by reason of this note; provided that
the foregoing limitation of liability shall in no way constitute a
limitation on the right of the holder of this note to enforce its remedies
against Borrower's assets for the collection of amounts due and owing
hereunder or under the credit agreement.
Address: P. O. Box 5006 CEDAR FAIR, L.P.
Sandusky, Ohio
44871-8006 By: Cedar Fair Management Company,
Managing General Partner
By: Thomas W. Salamone
Title: Treasurer
60
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REVOLVING CREDIT NOTE
$28,500,000.00 Cleveland, Ohio, October 6, 1994
FOR VALUE RECEIVED, the undersigned, CEDAR FAIR, L.P. (the
"Borrower") promises to pay on the last day of the Commitment Period
to the order of NATIONAL CITY BANK (the "Bank") at the Main Office of
Society National Bank, 127 Public Square, Cleveland, Ohio 44114-1306,
the principal sum of
TWENTY-EIGHT MILLION FIVE HUNDRED THOUSAND AND 00/100 - - - DOLLARS
or the aggregate unpaid principal amount of all loans evidenced by
this note made by the Bank to Borrower pursuant to Subsection 3.1 of
the credit agreement hereinafter referred to, whichever is less, in
lawful money of the United States of America. Capitalized terms used
herein shall have the meanings ascribed to them in said credit
agreement.
Borrower promises also to pay interest on the unpaid principal
amount of each loan from time to time outstanding from the date of
such loan until the payment in full thereof at the rates per annum
which shall be determined in accordance with the provisions of
Subsection 3.1 of the credit agreement. Said interest shall be
payable on each date provided for in Subsection 3.1; provided,
however, that interest on any principal portion which is not paid
when due shall be payable on demand.
The portions of the principal sum hereof from time to time
representing Prime Rate Loans, Domestic Fixed Rate Loans, LIBOR Loans
and Transaction Loans, and payments of principal of any thereof, will
be shown on the grid(s) attached hereto and made a part hereof, or
the Bank shall record such information by such other method as the
Bank may generally employ; provided, however, that failure to make
any such entry shall in no way detract from Borrower's obligations
under this note. All loans by the Bank to Borrower pursuant to the
credit agreement and all payments on account of principal hereof
shall be recorded by the Bank prior to transfer hereof and endorsed
on such grid(s).
If this note shall not be paid at maturity, whether such
maturity occurs by reason of lapse of time or by operation of any
provision for acceleration of maturity contained in the credit
agreement hereinafter referred to, the principal hereof and the
unpaid interest thereon through the date of maturity shall bear
interest, from the date of such nonpayment until paid, for Prime Rate
Loans, Domestic Fixed Rate Loans, LIBOR Loans and Transaction Loans
at a rate per annum which shall be equal to two per cent (2%) in
excess of the Prime Rate from time to time in effect. All payments
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of principal of and interest on this note shall be made in
immediately available funds.
This note is one of the Revolving Credit Notes referred to in
the credit agreement dated as of October 6, 1994, as the same may be
amended from time to time, between Borrower, the Banks named therein
and Society National Bank, as Agent. Reference is made to such
credit agreement for a description of the right of the undersigned to
anticipate payments hereof, the right of the holder hereof to
declare this note due prior to its stated maturity, and other terms
and conditions upon which this note is issued.
The holder hereof agrees that no recourse under or in respect of
this note shall be had against any partner, shareholder of a partner
or partner of a partner of Borrower by the enforcement of any
assessment or by any legal or equitable proceedings, by virtue of
statute or otherwise, it being expressly agreed that no personal
liability whatsoever shall attach to or be incurred by the aforesaid
partners, shareholders of partners or partners of partners or any of
them under or by reason of this note; provided that the foregoing
limitation of liability shall in no way constitute a limitation on
the right of the holder of this note to enforce its remedies against
Borrower's assets for the collection of amounts due and owing
hereunder or under the credit agreement.
Address: P. O. Box 5006 CEDAR FAIR, L.P.
Sandusky, Ohio
44871-8006 By: Cedar Fair Management
Managing General Partner
By: Thomas W. Salamone
Title: Treasurer
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LOANS AND PRINCIPAL PAYMENTS
Amount Name of
of Amount Amount
Amount Domestic Amount of of Unpaid Person
of Prime Fixed of Trans- Princi- Princi- Making
Rate Rate LIBOR action pal pal
Date Loan Loan Loan Loan Prepaid Balance Notation
63
<PAGE>
CEDAR FAIR, L.P.
PRIVATE SHELF AGREEMENT
$100,000,000
PRIVATE SHELF FACILITY
Dated as of August 24, 1994
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TABLE OF CONTENTS
(Not Part of Agreement)
Page
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1. AUTHORIZATION OF ISSUE OF NOTES.............................1
2. PURCHASE AND SALE OF NOTES..................................2
3. CONDITIONS OF CLOSING.......................................7
4. PREPAYMENTS.................................................8
5. AFFIRMATIVE COVENANTS......................................10
6. NEGATIVE COVENANTS.........................................13
7. EVENTS OF DEFAULT..........................................18
8. REPRESENTATIONS, COVENANTS AND WARRANTIES..................21
9. REPRESENTATIONS OF THE PURCHASERS..........................27
10. DEFINITIONS................................................27
11. MISCELLANEOUS..............................................38
INFORMATION SCHEDULE
EXHIBIT A -- FORM OF PRIVATE SHELF NOTE
EXHIBIT B -- FORM OF REQUEST FOR PURCHASE
EXHIBIT C -- FORM OF CONFIRMATION OF ACCEPTANCE
EXHIBIT D -- FORM OF OPINION OF COMPANY'S COUNSEL
EXHIBIT E -- LIST OF AGREEMENTS LIMITING DEBT
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CEDAR FAIR, L.P.
One Causeway Drive
P.O. Box 5006
Sandusky, Ohio 44871
As of August 24, 1994
The Prudential Insurance Company
of America ("Prudential")
Each Prudential Affiliate (as hereinafter
defined) which becomes bound by certain
provisions of this Agreement as hereinafter
provided (together with Prudential, the
"Purchasers")
c/o Prudential Capital Group
Two Prudential Plaza
Suite 5600
Chicago, Illinois 60601
Gentlemen:
The undersigned, Cedar Fair, L.P., a Delaware limited
partnership (herein called the "Company"), hereby agrees with you
as follows:
1. AUTHORIZATION OF ISSUE OF NOTES. The Company will
authorize the issue of (but, except as provided in paragraph
2B(5), shall not be obligated to issue) its senior promissory
notes (herein called the "Notes") in the aggregate principal
amount of $100,000,000, to be dated the date of issue thereof, to
mature, in the case of each Note so issued, no less than three
years and no more than fifteen years after the date of original
issuance thereof, to have a weighted average life of no more than
twelve years, to bear interest on the unpaid balance thereof from
the date thereof at the rate per annum with respect to such Note,
and to have such other particular terms, as shall be set forth in
the applicable Confirmation of Acceptance delivered pursuant to
paragraph 2B(5), and to be substantially in the form of Exhibit A
attached hereto. The terms "Note" and "Notes" as used herein
shall include each Note delivered pursuant to any provision of
this Agreement and each Note delivered in substitution or
exchange for any such Note pursuant to any such provision. Notes
which have (i) the same final maturity, (ii) the same principal
prepayment dates, (iii) the same principal prepayment amounts (as
a percentage of the original principal amount of each Note), (iv)
the same interest rate, and (v) the same interest payment
periods, are herein called a "Series" of Notes.
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2A. [Intentionally Omitted.]
2B. PURCHASE AND SALE OF NOTES.
2B(1). Facility. Prudential is willing to consider, in its
sole discretion and within limits which may be authorized for
purchase by Prudential and Prudential Affiliates from time to
time, the purchase of Notes pursuant to this Agreement. The
willingness of Prudential to consider such purchase of Notes is
herein called the "Facility". At any time, the aggregate
principal amount of Notes stated in paragraph 1, minus the
aggregate principal amount of Notes purchased and sold pursuant
to this Agreement prior to such time, minus the aggregate
principal amount of Accepted Notes (as hereinafter defined) which
have not yet been purchased and sold hereunder prior to such time
is herein called the "Available Facility Amount" at such time.
NOTWITHSTANDING THE WILLINGNESS OF PRUDENTIAL TO CONSIDER
PURCHASES OF NOTES, THIS AGREEMENT IS ENTERED INTO ON THE EXPRESS
UNDERSTANDING THAT NEITHER PRUDENTIAL NOR ANY PRUDENTIAL
AFFILIATE SHALL BE OBLIGATED TO MAKE OR ACCEPT OFFERS TO PURCHASE
NOTES, OR TO QUOTE RATES, SPREADS OR OTHER TERMS WITH RESPECT TO
SPECIFIC PURCHASES OF NOTES, AND THE FACILITY SHALL IN NO WAY BE
CONSTRUED AS A COMMITMENT BY PRUDENTIAL OR ANY PRUDENTIAL
AFFILIATE.
2B(2). Issuance Period. Notes may be issued and sold
pursuant to this Agreement until the earlier of (i) the second
anniversary of the date of this Agreement and (ii) the thirtieth
day after Prudential shall have given to the Company, or the
Company shall have given to Prudential, a notice stating that it
elects to terminate the Facility (or if such thirtieth day is not
a Business Day, the Business Day next preceding such thirtieth
day). The period during which Notes may be issued and sold
pursuant to this Agreement is herein called the "Issuance
Period".
2B(3). Request for Purchase. The Company may from time to
time during the Issuance Period make requests for purchases of
Notes (each such request being herein called a "Request for
Purchase"). Each Request for Purchase shall be made to
Prudential by telecopier and confirmed by nationwide overnight
delivery service, and shall (i) specify the aggregate principal
amount of Notes covered thereby, which shall not be less than
$10,000,000 and not be greater than the Available Facility Amount
at the time such Request for Purchase is made, (ii) specify the
principal amounts, final maturities and principal payment dates
and amounts, (iii) specify the use of proceeds of such Notes,
(iv) specify the proposed day for the closing of the purchase and
sale of such Notes, which shall be a Business Day during the
Issuance Period not less than 5 Business Days and not more than
25 Business Days after the Acceptance Day (if any) with respect
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to such Request for Purchase, (v) specify the number of the
account and the name and address of the depository institution to
which the purchase prices of such Notes are to be transferred on
the Closing Day for such purchase and sale, (vi) certify that the
representations and warranties contained in paragraph 8 are true
on and as of the date of such Request for Purchase except to the
extent of changes caused by the transactions herein contemplated
and that there exists on the date of such Request for Purchase no
Event of Default or Default and (vii) be substantially in the
form of Exhibit B attached hereto. Each Request for Purchase
shall be in writing and shall be deemed made when received by
Prudential.
2B(4). Rate Quotes. Not later than Three Business Days
after the Company shall have given Prudential a Request for
Purchase pursuant to paragraph 2B(3), Prudential may provide (by
telephone promptly thereafter confirmed by telecopier, in each
case no earlier than 9:30 A.M. and no later than 1:30 P.M. New
York City local time) interest rate quotes for the several
principal amounts, maturities, prepayment schedules and interest
payment periods of Notes specified in such Request for Purchase.
Each quote pursuant to this paragraph 2B(4) shall represent the
fixed interest rate per annum payable on the outstanding
principal balance of such Notes until such balance shall have
become due and payable, at which Prudential or a Prudential
Affiliate would be willing to purchase such Notes at 100% of the
principal amount thereof.
2B(5). Acceptance. Within 30 minutes after Prudential
shall have provided any interest rate quotes pursuant to
paragraph 2B(4) or such shorter period as Prudential may specify
to the Company (such period herein called the "Acceptance
Window"), the Company may, subject to paragraph 2B(6), elect to
accept such interest rate quotes. Such election shall be made by
an Authorized Officer of the Company notifying Prudential by
telephone or telecopier within the Acceptance Window (but not
earlier than 9:30 A.M. or later than 2:00 P.M., New York City
local time) that the Company elects to accept such interest rate
quotes, specifying the Note (each such Note being herein called
an "Accepted Note") as to which such acceptance (herein called an
"Acceptance") relates. The day the Company notifies Prudential
of an Acceptance with respect to any Accepted Notes is herein
called the "Acceptance Day" for such Accepted Notes. Any
interest rate quotes as to which Prudential does not receive an
Acceptance within the Acceptance Window shall expire, and no
purchase or sale of Notes hereunder shall be made based on such
expired interest rate quotes. Subject to paragraph 2B(6) and the
other terms and conditions hereof, the Company agrees to sell to
Prudential or a Prudential Affiliate, and Prudential agrees to
purchase, or to cause the purchase by a Prudential Affiliate of,
the Accepted Notes. As soon as practicable following the
Acceptance Day, the Company, Prudential and each Prudential
Affiliate which is to purchase any such Accepted Notes will
execute a confirmation of such Acceptance substantially in the
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form of Exhibit C attached hereto (herein called a "Confirmation
of Acceptance").
2B(6). Market Disruption. Notwithstanding the provisions
of paragraph 2B(5), if Prudential shall have provided interest
rate quotes pursuant to paragraph 2B(5) and thereafter, prior to
the time an Acceptance with respect to such quotes shall have
been notified to Prudential in accordance with paragraph 2B(5),
there shall occur a general suspension, material limitation, or
significant disruption of trading in securities generally on the
New York Stock Exchange or in the market for U.S. Treasury
securities or derivatives, then such interest rate quotes shall
expire, and no purchase or sale of Notes hereunder shall be made
based on such expired interest rate quotes. If the Company
thereafter notifies Prudential of the Acceptance of any such
interest rate quotes, such Acceptance shall be ineffective for
all purposes of this Agreement, and Prudential shall promptly
notify the Company that the provisions of this paragraph 2B(6)
are applicable with respect to such Acceptance.
2B(7). Closing. Not later than 11:30 A.M. (New York City
local time) on the Closing Day for any Accepted Notes, the
Company will deliver to Prudential or the Prudential Affiliate
listed in the Confirmation of Acceptance relating thereto at the
offices of Prudential Capital Group, Two Prudential Plaza, Suite
5600, Chicago, Illinois 60601, the Notes to be purchased by such
Purchaser in the form of a single Accepted Note for the Accepted
Notes which have exactly the same terms (or such greater number
of Notes in authorized denominations as such Purchaser may
request) dated the Closing Day and registered in such Purchaser's
name, against payment of the purchase price thereof by transfer
of immediately available funds for credit to the Company's
account specified in the Request for Purchase of such Notes. If
the Company fails to tender to any Purchaser the Accepted Notes
to be purchased by such Purchaser on the scheduled Closing Day
for such Accepted Notes as provided above in this paragraph
2B(7), or any of the conditions specified in paragraph 3 shall
not have been fulfilled by the time required on such scheduled
Closing Day, the Company shall, prior to 1:00 P.M., New York City
local time, on such scheduled Closing Day notify such Purchaser
in writing whether (x) such closing is to be rescheduled (such
rescheduled date to be a Business Day during the Issuance Period
not less than one Business Day and not more than 10 Business Days
after such scheduled Closing Day (the "Rescheduled Closing Day")
and certify to such Purchaser that the Company reasonably
believes that it will be able to comply with the conditions set
forth in paragraph 3 on such Rescheduled Closing Day and that the
Company will pay the Delayed Delivery Fee in accordance with
paragraph 2B(8)(ii) or (y) such closing is to be cancelled as
provided in paragraph 2B(8)(iii). In the event that the Company
shall fail to give such notice referred to in the preceding
sentence, Prudential (on behalf of each Purchaser) may at its
election, at any time after 1:00 P.M., New York City local time,
on such scheduled Closing Day, notify the Company in writing that
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such closing is to be cancelled as provided in paragraph
2B(8)(iii).
2B(8). Fees.
2B(8)(i) Facility Fee. The Company will pay to Prudential
in immediately available funds a fee (herein called the "Facility
Fee") on each Closing Day (other than the first such Closing Day,
on which no Facility Fee shall be due) in an amount equal to
0.15% of the aggregate principal amount of Notes sold on such
Closing Day.
2B(8)(ii) Delayed Delivery Fee. If the closing of the
purchase and sale of any Accepted Note is delayed for any reason
beyond the original Closing Day for such Accepted Note (other
than the failure of a Purchaser to fund the purchase of an
Accepted Note after all conditions to closing specified in
paragraph 3 have been timely satisfied), the Company will pay to
Prudential (for the benefit of the Purchasers) on the last
Business Day of each calendar month, commencing with the first
such day to occur more than 30 days after the Acceptance Day for
such Accepted Note and ending with the last such day to occur
prior to the Cancellation Date or the actual closing date of such
purchase and sale, and on the Cancellation Date or actual closing
date of such purchase and sale, a fee (herein called the "Delayed
Delivery Fee") calculated as follows:
(BEY - MMY) X DTS/360 X PA
where "BEY" means Bond Equivalent Yield, i.e., the bond
equivalent yield per annum of such Accepted Note; "MMY" means
Money Market Yield, i.e., the yield per annum on a commercial
paper investment of the highest quality selected by Prudential on
the date Prudential receives notice of the delay in the closing
for such Accepted Notes having a maturity date or dates the same
as, or closest to, the Rescheduled Closing Day or Rescheduled
Closing Days (a new alternative investment being selected by
Prudential each time such closing is delayed); "DTS" means Days
to Settlement, i.e., the number of actual days elapsed from and
including the originally scheduled Closing Day with respect to
such Accepted Note (in the case of the first such payment with
respect to such Accepted Note) or from and including the date of
the next preceding payment (in the case of any subsequent delayed
delivery fee payment with respect to such Accepted Note) to but
excluding the date of such payment; and "PA" means Principal
Amount, i.e., the principal amount of the Accepted Note for which
such calculation is being made. In no case shall the Delayed
Delivery Fee be less than zero. Nothing contained herein shall
obligate any Purchaser to purchase any Accepted Note on any day
other than the Closing Day for such Accepted Note, as the same
may be rescheduled from time to time in compliance with paragraph
2B(7).
2B(8)(iii) Cancellation Fee. If the Company at any time
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notifies Prudential in writing that the Company is cancelling the
closing of the purchase and sale of any Accepted Note, or if
Prudential notifies the Company in writing under the
circumstances set forth in the last sentence of paragraph 2B(7)
that the closing of the purchase and sale of any Accepted Note is
to be cancelled, or if the closing of the purchase and sale of
any Accepted Note is not consummated on or prior to the last day
of the Issuance Period (the date of any such notification, or the
last day of the Issuance Period, as the case may be, being herein
called the "Cancellation Date"), the Company will pay to
Prudential (for the benefit of the Purchasers) in immediately
available funds an amount (the "Cancellation Fee") calculated as
follows:
PI X PA
where "PI" means Price Increase, i.e., the quotient (expressed in
decimals) obtained by dividing (a) the excess of the ask price
(as determined by Prudential) of the Hedge Treasury Note(s) on
the Cancellation Date over the bid price (as determined by
Prudential) of the Hedge Treasury Note(s) on the Acceptance Day
for such Accepted Note by (b) such bid price; and "PA" has the
meaning ascribed to it in paragraph 2B(8)(ii). The foregoing bid
and ask prices shall be as reported by Telerate Systems, Inc.
(or, if such data for any reason ceases to be available through
Telerate Systems, Inc., any publicly available source of similar
market data). Each price shall be based on a U.S. Treasury
security having a par value of $100.00 and shall be rounded to
the second decimal place. In no case shall the Cancellation Fee
be less than zero.
3. CONDITIONS OF CLOSING. The obligation of any Purchaser
to purchase any Accepted Notes is subject to the satisfaction, on
or before the applicable Closing Day for such Accepted Notes, of
the following conditions:
3A. Opinion of Company's Counsel. On each Closing Day,
such Purchaser shall have received from Squire, Sanders &
Dempsey, special counsel to the Company, or other counsel
designated by the Company and acceptable to such Purchaser, a
favorable opinion satisfactory to the Purchaser and substantially
in the form of Exhibit D attached hereto and as to such other
matters as such Purchaser may reasonably request. The Company
hereby directs such counsel to deliver such opinion, and agrees
that the issuance and sale of any Notes will constitute a
reconfirmation of such direction.
3B. Opinion of Purchaser's Special Counsel. Such Purchaser
shall have received from James F. Evert, Assistant General
Counsel of Prudential, or such other counsel who is acting as
counsel for it in connection with this transaction, a favorable
opinion satisfactory to such Purchaser as to such matters
incident to the matters herein contemplated as it may reasonably
request.
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3C. Representations and Warranties; No Default. The
representations and warranties contained in paragraph 8 shall be
true on and as of the applicable Closing Day, except to the
extent of changes caused by the transactions herein contemplated;
there shall exist on the applicable Closing Day no Default or
Event of Default (assuming, if no Note is outstanding on such
Closing Day, that paragraph 6 hereof is then in effect); and the
Company shall have delivered to each Purchaser an Officer's
Certificate, dated the applicable Closing Day, to both such
effects.
3D. Fees. On or before each Closing Day, the Company shall
have paid to Prudential any fee required by paragraphs 2B(8)(i)
and 2B(8)(ii).
3E. Purchase Permitted By Applicable Laws. The purchase of
and payment for the Notes to be purchased on the applicable
Closing Day on the terms and conditions herein provided
(including the use of the proceeds of such Notes by the Company)
shall not violate any applicable law or governmental regulation
(including, without limitation, section 5 of the Securities Act
or Regulation G, T or X of the Board of Governors of the Federal
Reserve System) and shall not subject any Purchaser to any tax,
penalty, liability or other onerous condition under or pursuant
to any applicable law or governmental regulation, and such
Purchaser shall have received such certificates or other evidence
as such Purchaser may reasonably request to establish compliance
with this condition.
3F. Proceedings. All corporate and other proceedings taken
or to be taken in connection with the transactions contemplated
hereby and all documents incident thereto shall be satisfactory
in substance and form to each Purchaser, and each Purchaser shall
have received all such counterpart originals or certified or
other copies of such documents as it may reasonably request.
4. PREPAYMENTS. The Notes shall be subject to prepayment
with respect to the required prepayments specified in paragraph
4A and also under the circumstances set forth in paragraph 4B.
4A. Required Prepayment of Notes. Until a Series of Notes
shall be paid in full, such Series of Notes shall be subject to
such required prepayments, if any, as are set forth in such
Series of Notes. Any prepayment made by the Company pursuant to
any other provision of this paragraph 4 shall not reduce or
otherwise affect its obligation to make any scheduled prepayment
as specified in each Series of Notes.
4B. Optional Prepayment With Yield-Maintenance Amount. The
Notes of each Series shall be subject to optional prepayment, in
whole or in part, in increments of $100,000, and in a minimum
amount of $1,000,000, at the option of the Company, at 100% of
the principal amount so prepaid plus interest thereon to the
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prepayment date and the Yield-Maintenance Amount, if any, with
respect to each such Note. Any partial prepayment of a Series of
Notes pursuant to this paragraph 4B shall be applied in
satisfaction of required payments of principal in inverse order
of their scheduled due dates.
4C. Notice of Optional Prepayment. The Company shall give
notice to the holder of each Note of a Series irrevocable written
notice of any optional prepayment to be made pursuant to
paragraph 4B with respect to such Series not less than 10
Business Days prior to the prepayment date, specifying (i) such
prepayment date, (ii) the aggregate principal amount of the Notes
of such Series to be prepaid on such date, (iii) the principal
amount of the Notes of such holder to be prepaid on that date,
and (iv) stating that such optional prepayment is to be made
pursuant to paragraph 4B. Notice of optional prepayment having
been given as aforesaid, the principal amount of the Notes
specified in such notice, together with interest thereon to the
prepayment date and together with the Yield-Maintenance Amount,
if any, herein provided, shall become due and payable on such
prepayment date. The Company shall, on or before the day on
which it gives written notice of any prepayment pursuant to
paragraph 4B, give telephonic notice of the principal amount of
the Notes to be prepaid and the prepayment date to each
Significant Holder which shall have designated a recipient for
such notices in the purchaser schedule attached to the applicable
Confirmation of Acceptance or by notice in writing to the
Company.
4D. Application of Prepayments. In the case of each
prepayment pursuant to paragraphs 4A or 4B of less than the
entire unpaid principal amount of all outstanding Notes of any
Series, the amount to be prepaid shall be applied pro rata to all
outstanding Notes of such Series (including, for the purpose of
this paragraph 4D only, all Notes of such Series prepaid or
otherwise retired or purchased or otherwise acquired by the
Company or any of its Subsidiaries or Affiliates other than by
prepayment pursuant to paragraphs 4A or 4B) according to the
respective unpaid principal amounts thereof.
4E. Retirement of Notes. The Company shall not, and shall
not permit any of its Subsidiaries or Affiliates to, prepay or
otherwise retire in whole or in part prior to their stated final
maturity (other than by prepayment pursuant to paragraphs 4A or
4B or upon acceleration of such final maturity pursuant to
paragraph 7A), or purchase or otherwise acquire, directly or
indirectly, any Notes of any Series unless the Company or such
Subsidiary or Affiliate shall have offered to prepay or otherwise
retire or purchase or otherwise acquire, as the case may be, the
same proportion of the aggregate principal amount of the Notes of
such Series held by each holder of Notes of such Series at the
time outstanding upon the same terms and conditions. Any Notes
prepaid or otherwise retired or purchased or otherwise acquired
by the Company or any of its Subsidiaries or Affiliates shall not
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be deemed to be outstanding for any purpose under this Agreement,
except as provided in paragraph 4D.
5. AFFIRMATIVE COVENANTS.
5A. Financial Statements. The Company covenants that it
will deliver to each Significant Holder in triplicate:
(i) as soon as practicable and in any event within 60
days after the end of each quarterly period (other than the
last quarterly period) in each fiscal year, consolidated
statements of income, partners' equity or shareholders'
equity (as the case may be) and cash flows of the Company
and its Subsidiaries for (a) such quarterly period and (b)
the period of four consecutive fiscal quarters ended on the
last day of such quarterly period, and a consolidated
balance sheet of the Company and its Subsidiaries as at the
end of such quarterly period, setting forth in each case in
comparative form figures for the corresponding period in the
preceding fiscal year or years, all in reasonable detail and
certified by an authorized financial officer of the Company,
subject to changes resulting from year-end adjustments;
provided, however, that delivery pursuant to clause (iii)
below of copies of the Quarterly Report on Form 10-Q of the
Company for such quarterly period filed with the Securities
and Exchange Commission shall be deemed to satisfy the
requirements of this clause (i);
(ii) as soon as practicable and in any event within
120 days after the end of each fiscal year, consolidated
statements of income, partners' equity and cash flows of the
Company and its Subsidiaries for such year, and a
consolidated balance sheet of the Company and its
Subsidiaries as at the end of such year, setting forth in
each case in comparative form corresponding consolidated
figures from the preceding annual audit, all in reasonable
detail and satisfactory in form to the Required Holder(s),
and reported on by independent public accountants of
recognized national standing selected by the Company whose
report shall be without limitation as to scope of the audit
and satisfactory in substance to the Required Holder(s);
provided, however, that delivery pursuant to clause (iii)
below of copies of the Annual Report on Form 10-K of the
Company for such fiscal year filed with the Securities and
Exchange Commission shall be deemed to satisfy the
requirements of this clause (ii);
(iii) promptly upon transmission thereof, copies of
all such financial statements, proxy statements, notices and
reports as the Company shall send to its Limited Partners
generally and copies of all registration statements (without
exhibits), other than registration statements on Form S-8 or
any successor form, and all reports which it files with the
Securities and Exchange Commission (or any governmental body
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or agency succeeding to the functions of the Securities and
Exchange Commission); and
(iv) with reasonable promptness, such other financial
data (including, without limitation, consolidating financial
statements and a copy of each other report submitted to the
Company or any Subsidiary by independent accountants in
connection with any annual, interim or special audit made by
them of the books of the Company or any Subsidiary) as such
Significant Holder may reasonably request.
Together with each delivery of financial statements required by
clauses (i) and (ii) above, the Company will deliver to each
Significant Holder an Officer's Certificate (a) setting forth
(except to the extent specifically set forth in such financial
statements) the aggregate amounts of interest accrued on Funded
Debt and Current Debt of the Company and Subsidiaries during the
fiscal period covered by such financial statements, and the
aggregate amounts of depreciation on physical property charged on
the books of the Company and Subsidiaries (if any) during such
fiscal period, (b) demonstrating (with computations in reasonable
detail) compliance by the Company and its Subsidiaries with
paragraph 6A(2) (including, without limitation, identification of
the most recent forty-five consecutive day period at all times
during which Consolidated Debt did not exceed 60% of Gross Worth)
and, to the extent Debt secured by Liens described in clauses (v)
and (vi) of paragraph 6A(1) exceeds $5,000,000, demonstrating
compliance with clauses (v) and (vi) of paragraph 6A(1), in each
case during and at the end of such fiscal period and (c) stating
that there exists no Event of Default or Default or, if any Event
of Default or Default exists, specifying the nature thereof, the
period of existence thereof and what action the Company proposes
to take with respect thereto. Together with each delivery of
financial statements required by clause (ii) above, the Company
will deliver to each Significant Holder a certificate of such
accountants stating that, in making the audit necessary to the
certification of such financial statements, they have obtained no
knowledge of any Event of Default or Default, or, if they have
obtained knowledge of any Event of Default or Default, specifying
the nature and period of existence thereof (provided that such
accountants shall not be liable to anyone by reason of their
failure to obtain knowledge of any such Event of Default or
Default which would not be disclosed in the course of an audit
conducted in accordance with generally accepted auditing
standards).
The Company also covenants that forthwith upon any
Responsible Officer obtaining knowledge of an Event of Default or
Default, it will deliver to each Significant Holder an Officer's
Certificate specifying the nature and period of existence thereof
and what action the Company proposes to take with respect
thereto.
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5B. Inspection of Property. The Company covenants that it
will permit any Person designated by any Significant Holder in
writing, at such Significant Holder's expense, to visit and
inspect any of the properties of the Company and its
Subsidiaries, to examine the corporate books and financial
records of the Company and its Subsidiaries and make copies
thereof or extracts therefrom and to discuss the affairs,
finances and accounts of any of such entities with the officers
and directors of the Managing General Partner and the directors,
officers and independent accountants of the Company, all at such
reasonable times and as often as such Significant Holder may
reasonably request.
5C. Covenant to Secure Note Equally. The Company covenants
that, if it or any Subsidiary shall create or assume any Lien
upon any of its property or assets, whether now owned or
hereafter acquired, other than Liens permitted by the provisions
of paragraph 6A(1) (unless prior written consent to the creation
or assumption thereof shall have been obtained pursuant to
paragraph 11C), it will make or cause to be made effective
provision whereby the Notes will be secured by such Lien equally
and ratably with any and all other Debt thereby secured so long
as any such other Debt shall be so secured.
5D. Information Required by Rule 144A. The Company
covenants that it will, upon the request of the holder of any
Note, provide such holder, and any qualified institutional buyer
designated by such holder, such financial and other information
as such holder may reasonably determine to be necessary in order
to permit compliance with the information requirements of Rule
144A under the Securities Act in connection with the resale of
Notes, except at such times as the Company is subject to the
reporting requirements of section 13 or 15(d) of the Exchange
Act. For the purpose of this paragraph 5D, the term "qualified
institutional buyer" shall have the meaning specified in Rule
144A under the Securities Act.
5E. Compliance With Environmental Laws. The Company will,
and will cause each of its Subsidiaries to, comply in a timely
fashion with, or operate pursuant to valid waivers of the
provisions of, all Environmental Laws, except where noncompliance
would not materially adversely affect the business, condition
(financial or other) or operations of the Company and its
Subsidiaries taken as a whole.
5F. Maintenance of Insurance. The Company covenants that
it and each of its Subsidiaries will maintain insurance in such
amounts and against such casualties, liabilities, risks,
contingencies and hazards as is customarily maintained by other
similarly situated companies operating similar businesses and,
upon request of a Significant Holder, it will deliver an
Officers' Certificate specifying the details of such insurance
then in effect.
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6. NEGATIVE COVENANTS. The provisions of this paragraph 6
shall remain in effect so long as any Note shall remain
outstanding or any other amount shall be owing hereunder.
6A. Lien, Debt and Other Restrictions. The Company
covenants that it will not and will not permit any Subsidiary to:
6A(1). Liens. Create, assume or suffer to exist any Lien
upon any of its property or assets, whether now owned or
hereafter acquired (whether or not provision is made for the
equal and ratable securing of the Notes in accordance with the
provisions of paragraph 5C), except
(i) Liens for taxes not yet due or which are being
actively contested in good faith by appropriate proceedings,
(ii) other Liens incidental to the conduct of its
business or the ownership of its property and assets which
were not incurred in connection with the borrowing of money
or the obtaining of advances or credit, and which do not in
the aggregate materially detract from the value of its
property or assets or materially impair the use thereof in
the operation of its business,
(iii) subject to the limitation set forth in clause
(iii) of paragraph 6A(2), Liens on property or assets of a
Subsidiary to secure obligations of such Subsidiary to the
Company or another Subsidiary,
(iv) Liens consisting of Capitalized Leases if the
Funded Debt represented by the related Capitalized Lease
Obligations is permitted by paragraph 6A(2),
(v) any Lien existing on any property of any
corporation at the time it becomes a Subsidiary, or existing
prior to the time of acquisition upon any property acquired
by the Company or any Subsidiary through purchase, merger or
consolidation or otherwise, whether or not assumed by the
Company or such Subsidiary, or placed upon property at the
time of acquisition by the Company or any Subsidiary to
secure all or a portion of (or to secure Debt incurred to
pay all or a portion of) the purchase price thereof,
provided that (a) such property is not and shall not thereby
become encumbered in an amount in excess of 80% of the
lesser of the cost thereof or the fair value (as determined
in good faith by the board of directors of the Managing
General Partner or the Company, as the case may be) thereof
at the time such corporation becomes a Subsidiary or at the
time of acquisition of such property by the Company or a
Subsidiary, as the case may be, (b) any such Lien shall not
encumber any other property (except related replacement
parts) of the Company or such Subsidiary, and (c) the
aggregate amount of Debt secured by all such Liens and any
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Liens permitted by clause (iv) above and clause (vi) below
at any one time outstanding shall be permitted by paragraph
6A(2), and
(vi) any Lien renewing, extending or refunding any
Lien permitted by clause (v) above if the aggregate amount
of Debt secured by all such Liens and any Lien permitted by
clauses (iv) and (v) above at any one time outstanding shall
be permitted by paragraph 6A(2), provided that the principal
amount secured is not increased, and the Lien is not
extended to other property;
6A(2). Debt. Create, incur, assume, guarantee, suffer to
exist, or otherwise be or become directly or indirectly liable
for, any Funded or Current Debt, except
(i) Funded Debt of the Company represented by the
Notes,
(ii) Funded or Current Debt of any Subsidiary to the
Company,
(iii) Funded or Current Debt of any Subsidiary to any
other Subsidiary, provided that no Subsidiary shall become
liable for or suffer to exist any Debt permitted by this
clause (iii) unless the Subsidiary to which such Debt is
owed shall be free from any Debt to any Person other than
the Company, and
(iv) other Debt of the Company or any Subsidiary;
provided that (a) Consolidated Debt shall at no time exceed
70% of Gross Worth, (b) at all times during a period of at
least forty-five consecutive days in each rolling twelve
month period, Consolidated Debt shall not exceed 60% of
Gross Worth and (c) Priority Debt shall at no time exceed
20% of Owners' Equity;
6A(3). Loans, Advances, Investments and Contingent
Liabilities. Make or permit to remain outstanding any loan or
advance to, or guarantee, endorse or otherwise be or become
contingently liable, directly or indirectly, in connection with
the obligations, stock, or dividends of, or own, purchase or
acquire any stock, obligations or securities of, or any other
interest in, or make or maintain any capital contribution to, any
Person, except that the Company and its Subsidiaries may
(i) subject to paragraph 6A(2), make or permit to
remain outstanding loans or advances to the Company or any
Subsidiary,
(ii) subject to paragraph 6A(2), own, purchase or
acquire stock, obligations or securities of a Subsidiary or
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of a corporation which immediately after such purchase or
acquisition will be a Subsidiary,
(iii) acquire and own stock, obligations or securities
received in settlement of debts (created in the ordinary
course of business) owing to the Company or any Subsidiary,
(iv) own, purchase or acquire commercial paper rated
Prime-1 by Moody's Investors Service, Inc. or A-1 or better
by Standard & Poor's Corporation on the date of acquisition
and certificates of deposit of, bankers' acceptances issued
by, and eurodollar deposits with United States commercial
banks (having capital resources in excess of $100,000,000,
and, in the case of eurodollar deposits, issued by such bank
through its head office or a branch office in London or
Tokyo), in each case due within one year from the date of
acquisition and payable in the United States in United
States dollars, obligations of the United States Government
or any agency thereof backed by the full faith and credit of
the United States Government, obligations guaranteed by the
United States Government, and repurchase agreements of such
banks for terms of less than one year in respect of the
foregoing certificates and obligations,
(v) endorse negotiable instruments for collection in
the ordinary course of business,
(vi) guarantee or otherwise become directly or
indirectly liable for Debt to the extent the Debt is
permitted by paragraph 6A(2) (including, without limitation,
the limitation on Priority Debt set forth therein),
(vii) make or permit to remain outstanding travel,
relocation and other like advances to officers and employees
in the ordinary course of business, and
(viii) make or permit to remain outstanding any loans
or advances to, any guarantees for the benefit of, or any
investments in, any Person not otherwise permitted by this
paragraph 6A(3) up to an aggregate amount which shall not
exceed the principal amount of $10,000,000 at any one time
outstanding;
6A(4). Sale of Stock and Debt of Subsidiaries. Except to
the Company or a 75%-owned Subsidiary, sell or otherwise dispose
of, or part with control of, any shares of stock or Debt of any
(i) Significant Subsidiary, or (ii) other Subsidiary, if at the
time of such sale or other disposition, such other Subsidiary
owns, directly or indirectly, any shares of stock or Debt of any
Significant Subsidiary or any Debt of the Company;
6A(5). Merger and Sale of Assets. Merge or consolidate
with any corporation or sell, lease, transfer or otherwise
dispose, in any single transaction or series of related
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transactions, of assets which shall have contributed 10% or more
to Consolidated Pre-Tax Income for any of the three fiscal years
then most recently ended, or assets whose aggregate fair value
(as determined in good faith by the board of directors of the
Managing General Partner or the Company, as the case may be)
shall exceed 10% of Consolidated Net Assets, to any Person,
except that
(i) any 75%-owned Subsidiary which is free from any
Debt to any Person other than the Company may merge with any
one or more other 75%-owned Subsidiaries which are free from
any Debt to any Person other than the Company,
(ii) any Subsidiary may sell, lease, transfer or
otherwise dispose of any of its assets to the Company or a
75%-owned Subsidiary,
(iii) any Subsidiary may sell or otherwise dispose of
all or substantially all of its assets subject to the
conditions specified in paragraph 6A(4) with respect to a
sale of the stock of such Subsidiary,
(iv) the Company may enter into any merger in which it
is the surviving entity, provided that no Default or Event
of Default would exist immediately after giving effect
thereto,
(v) the Company may, in the ordinary course of
business, sell or otherwise dispose of (a) buildings and
parcels of land not used in connection with the business of
the Company or any Subsidiary and (b) vehicles, and
(vi) any Subsidiary may merge or consolidate with any
other corporation, provided that, immediately after giving
effect to such merger or consolidation, the continuing or
surviving corporation of such merger or consolidation shall
constitute a Subsidiary and no Default or Event of Default
would exist;
6A(6). Transactions with Related Persons. Directly or
indirectly, purchase, acquire or lease any property from, or
sell, transfer or lease any property to, or otherwise deal with,
in the ordinary course of business or otherwise, any Related
Person, except (i) pursuant to the terms of the Partnership
Agreement or (ii) on an arm's-length basis and on terms no less
favorable to the Company and its Subsidiaries (as determined in
good faith by the board of directors of the Managing General
Partner or the Company, as the case may be) than terms which
would have been obtainable from a Person other than a Related
Person.
6B. Issuance of Stock by Subsidiaries. The Company
covenants that it will not permit any Subsidiary (either
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directly, or indirectly by the issuance of rights or options for,
or securities convertible into, such shares or other equity
interest) to issue, sell or otherwise dispose of any shares of
any class of its stock or other equity interest (other than
directors' qualifying shares) except to the Company or a
75%-owned Subsidiary.
7. EVENTS OF DEFAULT.
7A. Acceleration. If any of the following events shall
occur and be continuing for any reason whatsoever (and whether
such occurrence shall be voluntary or involuntary or come about
or be effected by operation of law or otherwise):
(i) the Company defaults in the payment of any
principal of or Yield-Maintenance Amount on any Note when
the same shall become due, either by the terms thereof or
otherwise as herein provided; or
(ii) the Company defaults in the payment of any
interest on any Note for more than 10 days after the date
due; or
(iii) the Company or any Subsidiary defaults in any
payment of principal of or interest on any other obligation
for money borrowed (or any Capitalized Lease Obligation, any
obligation under a conditional sale or other title retention
agreement, any obligation issued or assumed as full or
partial payment for property whether or not secured by a
purchase money mortgage or any obligation under notes
payable or drafts accepted representing extensions of
credit) beyond any period of grace provided with respect
thereto, or the Company or any Subsidiary fails to perform
or observe any other agreement, term or condition contained
in any agreement under which any such obligation is created
(or if any other event thereunder or under any such
agreement shall occur and be continuing) and the effect of
such failure or other event is to cause, or to permit the
holder or holders of such obligation (or a trustee on behalf
of such holder or holders) to cause, such obligation to
become due (or to be repurchased by the Company or any
Subsidiary) prior to any stated maturity, provided that the
aggregate amount of all obligations as to which such a
payment default shall occur and be continuing or such a
failure or other event permitting acceleration (or sale to
the Company or any Subsidiary) shall occur and be continuing
exceeds $5,000,000; or
(iv) any representation or warranty made by the
Company herein or in any writing furnished in connection
with or pursuant to this Agreement shall be false in any
material respect on the date as of which made; or
(v) the Company fails to perform or observe any
agreement contained in paragraph 6 hereof; or
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(vi) the Company fails to perform or observe any other
agreement, term or condition contained herein and such
failure shall not be remedied within 30 days after any
Responsible Officer has actual knowledge thereof; or
(vii) the Company or any Significant Subsidiary makes
an assignment for the benefit of creditors or is generally
not paying its debts as such debts become due; or
(viii) any decree or order for relief in respect of
the Company or any Significant Subsidiary is entered under
any bankruptcy, reorganization, compromise, arrangement,
insolvency, readjustment of debt, dissolution or liquidation
or similar law, whether now or hereafter in effect (herein
called the "Bankruptcy Law"), of any jurisdiction; or
(ix) the Company or any Significant Subsidiary
petitions or applies to any tribunal for, or consents to,
the appointment of, or taking possession by, a trustee,
receiver, custodian, liquidator or similar official of the
Company or any Significant Subsidiary, or of any substantial
part of the assets of the Company or any Significant
Subsidiary, or commences a voluntary case under the
Bankruptcy Law of the United States or any proceedings
(other than proceedings for the voluntary liquidation and
dissolution of a Subsidiary) relating to the Company or any
Significant Subsidiary under the Bankruptcy Law of any other
jurisdiction; or
(x) any such petition or application is filed, or any
such proceedings are commenced, against the Company or any
Significant Subsidiary and the Company or such Significant
Subsidiary by any act indicates its approval thereof,
consent thereto or acquiescence therein, or an order,
judgment or decree is entered appointing any such trustee,
receiver, custodian, liquidator or similar official, or
approving the petition in any such proceedings, and such
order, judgment or decree remains unstayed and in effect for
more than 60 days; or
(xi) any order, judgment or decree is entered in any
proceedings against the Company decreeing the dissolution of
the Company and such order, judgment or decree remains
unstayed and in effect for more than 60 days; or
(xii) any order, judgment or decree is entered in any
proceedings against the Company or any Significant
Subsidiary decreeing a split-up of the Company or such
Significant Subsidiary which requires the divestiture of
assets representing a substantial part, or the divestiture
of the stock of a Significant Subsidiary whose assets
represent a substantial part, of the consolidated assets of
the Company and its Significant Subsidiaries (determined in
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accordance with generally accepted accounting principles) or
which requires the divestiture of assets, or stock of a
Significant Subsidiary, which shall have contributed a
substantial part of the consolidated net income of the
Company and its Significant Subsidiaries (determined in
accordance with generally accepted accounting principles)
for any of the three fiscal years then most recently ended,
and such order, judgment or decree remains unstayed and in
effect for more than 60 days; or
(xiii) one or more final judgments for the payment of
money, the uninsured portion of which in aggregate amount
exceeds $5,000,000, is rendered against the Company or any
Subsidiary and, within 60 days after entry thereof, any such
judgment is not discharged or execution thereof stayed
pending appeal, or within 60 days after the expiration of
any such stay, such judgment is not discharged; or
(xiv) the Company or any ERISA Affiliate, in its
capacity as an employer under a Multiemployer Plan, makes a
complete or partial withdrawal from such Multiemployer Plan
resulting in the incurrence by such withdrawing employer of
a withdrawal liability in an amount exceeding $5,000,000;
then (a) if such event is an Event of Default specified in
clause (i) or (ii) of this paragraph 7A, the holder of any
Note (other than the Company or any of its Subsidiaries or
Affiliates) may at its option, by notice in writing to the
Company, declare such Note to be, and such Note shall
thereupon be and become, immediately due and payable at par
together with interest accrued thereon, without presentment,
demand, protest or additional notice of any kind, all of
which are hereby waived by the Company, (b) if such event is
an Event of Default specified in clause (viii), (ix) or (x)
of this paragraph 7A with respect to the Company, all of the
Notes at the time outstanding shall automatically become
immediately due and payable together with interest accrued
thereon and together with the Yield-Maintenance Amount, if
any, with respect to each Note, without presentment, demand,
protest or notice of any kind, all of which are hereby
waived by the Company, and (c) with respect to any event
constituting an Event of Default hereunder, the Required
Holder(s) of the Notes of any Series may at its or their
option, by notice in writing to the Company, declare all of
the Notes of such Series to be, and all of such Notes shall
thereupon be and become, immediately due and payable
together with interest accrued thereon and together with the
Yield-Maintenance Amount, if any, with respect to each such
Note, without presentment, demand, protest or additional
notice of any kind, all of which are hereby waived by the
Company.
7B. Notice of Acceleration. Whenever any Note shall be
declared immediately due and payable pursuant to paragraph 7A the
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Company shall forthwith give written notice thereof to the holder
of each Note of each Series at the time outstanding.
7C. Other Remedies. If any Event of Default or Default
shall occur and be continuing, the holder of any Note may proceed
to protect and enforce its rights under this Agreement and such
Note by exercising such remedies as are available to such holder
in respect thereof under applicable law, either by suit in equity
or by action at law, or both, whether for specific performance of
any covenant or other agreement contained in this Agreement or in
aid of the exercise of any power granted in this Agreement. No
remedy conferred in this Agreement upon the holder of any Note is
intended to be exclusive of any other remedy, and each and every
such remedy shall be cumulative and shall be in addition to every
other remedy conferred herein or now or hereafter existing at law
or in equity or by statute or otherwise.
8. REPRESENTATIONS, COVENANTS AND WARRANTIES. The Company
represents, covenants and warrants as follows:
8A. Organization and Qualification. The Company is a
limited partnership duly organized and existing in good standing
under the laws of the State of Delaware, has the power to own its
properties and to carry on its business as now being conducted
and is duly qualified to do business as a foreign limited
partnership and is in good standing in each jurisdiction in which
the character of the properties owned or leased by it or the
nature of the business transacted by it requires it to be so
qualified under applicable law, except where the failure to be so
qualified would not have a material adverse effect upon the
Company. Each Subsidiary is a corporation duly organized and
existing in good standing under the laws of its state of
incorporation, has the corporate power to own its properties and
to carry on its business as now being conducted and is duly
qualified to do business as a foreign corporation and is in good
standing in each jurisdiction in which the character of the
properties owned or leased by it or the nature of the business
transacted by it requires it to be so qualified under applicable
law, except where the failure to be so qualified would not have a
material adverse effect upon such Subsidiary. The Company has
the power and authority to enter into, execute, deliver and
perform this Agreement and the Notes; this Agreement constitutes
the Company's valid and binding obligation; and each Note will
upon its issuance constitute the Company's valid and binding
obligation. The Partnership Agreement has been duly authorized,
executed and delivered by the Partners, is a valid, legal and
binding agreement of the Partners, and has been duly filed in all
places where such filing is required.
8B. Financial Statements. The Company has furnished each
Purchaser of any Accepted Notes with the following financial
statements, identified by a principal financial officer of the
Company: (i) consolidated balance sheets of the Company and its
Subsidiaries as at the last day in each of the five fiscal years
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of the Company most recently completed prior to the date as of
which this representation is made or repeated to such Purchaser
(other than fiscal years completed within 120 days prior to such
date for which audited financial statements have not been
released) and consolidated statements of income, partners' equity
and cash flows of the Company and its Subsidiaries for each such
year, reported on by Arthur Andersen & Co. (or, with respect to
years subsequent to 1993, by Arthur Andersen & Co. or other
independent public accountants of recognized national standing);
and (ii) consolidated balance sheets of the Company and its
Subsidiaries as at the end of the quarterly period (if any) most
recently completed prior to such date and after the end of such
fiscal year (other than quarterly periods completed within 60
days prior to such date for which financial statements have not
been released) and the comparable quarterly period in the
preceding fiscal year and consolidated statements of income,
partners' equity and cash flows for (a) such quarterly periods
and (b) the period of four consecutive fiscal quarters ended on
the last day of such quarterly periods, prepared by the Company.
Such financial statements (including any related schedules and/or
notes) are true and correct in all material respects (subject, as
to interim statements, to changes resulting from audits and
normal year-end adjustments), have been prepared in accordance
with generally accepted accounting principles consistently
followed throughout the periods involved and show all
liabilities, direct and contingent, of the Company and its
Subsidiaries required to be shown in accordance with such
principles. The balance sheets fairly present the condition of
the Company and its Subsidiaries as at the dates thereof, and the
statements of income, partners' equity and cash flows fairly
present the results of the operations of the Company and its
Subsidiaries for the periods indicated. There has been no
material adverse change in the business, condition or operations
(financial or otherwise) of the Company and its Subsidiaries
taken as a whole since the end of the most recent fiscal year for
which such audited financial statements have been furnished.
8C. Actions Pending. There are no actions, suits,
investigations or proceedings pending or, to the knowledge of the
elected officers of the Company or the Managing General Partner,
threatened against the Company or any of its Subsidiaries, or
any properties or rights of the Company or any of its
Subsidiaries, by or before any court, arbitrator or
administrative or governmental body which individually or in
aggregate might result in any material adverse change in the
business, condition or operations of the Company and its
Subsidiaries taken as a whole.
8D. Outstanding Debt. Neither the Company nor any of its
Subsidiaries has outstanding any Debt except as permitted by
paragraph 6A(2). There exists no default under the provisions of
any instrument evidencing such Debt or of any agreement relating
thereto.
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8E. Title to Properties. The Company has and each of its
Subsidiaries has good and marketable title to its respective real
properties (other than properties which it leases) and good title
to all of its other respective properties and assets, including
the properties and assets reflected in the most recent audited
balance sheet referred to in paragraph 8B (other than properties
and assets disposed of in the ordinary course of business),
subject to no Lien of any kind except Liens permitted by
paragraph 6A(1). All leases necessary in any material respect
for the conduct of the business of the Company and its
Subsidiaries taken as a whole are valid and subsisting and are in
full force and effect.
8F. Taxes. The Company has and each of its Subsidiaries
has filed all Federal, State and other income tax returns which,
to the best knowledge of the elected officers of the Company or
the Managing General Partner, are required to be filed, and each
has paid all taxes as shown on such returns and on all
assessments received by it to the extent that such taxes have
become due, except such taxes as are being contested in good
faith by appropriate proceedings for which adequate reserves have
been established in accordance with generally accepted accounting
principles.
8G. Conflicting Agreements and Other Matters. Neither the
Company nor any of its Subsidiaries is a party to any contract or
agreement or subject to any partnership agreement, charter or
other partnership or corporate restriction which materially and
adversely affects the business (as presently conducted),
property, assets or financial condition of the Company and its
Subsidiaries taken as a whole. Neither the execution nor
delivery of this Agreement or the Notes, nor the offering,
issuance and sale of the Notes, nor fulfillment of nor compliance
with the terms and provisions hereof and of the Notes will
conflict with, or result in a breach of the terms, conditions or
provisions of, or constitute a default under, or result in any
violation of, or result in the creation of any Lien upon any of
the properties or assets of the Company or any of its
Subsidiaries pursuant to, the Partnership Agreement or the
charter, by-laws or code of regulations of any Subsidiaries, any
award of any arbitrator or any agreement (including any agreement
with Partners or stockholders), instrument, order, judgment,
decree, statute, law, rule or regulation to which the Company or
any of its Subsidiaries is a party or otherwise subject. Neither
the Company nor any of its Subsidiaries is a party to, or
otherwise subject to any provision contained in, any instrument
evidencing Indebtedness of the Company or any Subsidiary, any
agreement relating thereto or any other contract or agreement
(including the Partnership Agreement and, in the case of any
Subsidiary, its charter) which limits the amount of, or otherwise
imposes restrictions on the incurring of, Debt of the Company of
the type to be evidenced by the Notes except (i) as of the date
of this Agreement, as set forth in the agreements listed in
Exhibit E attached hereto and (ii) as of any date subsequent to
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the date of this Agreement when this representation is repeated,
as set forth in the agreements listed in Exhibit E or as
theretofore disclosed to Prudential in a writing which by its
terms modifies Exhibit E.
8H. Offering of Notes. Neither the Company nor any agent
acting on its behalf has, directly or indirectly, offered the
Notes or any similar security of the Company for sale to, or
solicited any offers to buy the Notes or any similar security of
the Company from, or otherwise approached or negotiated with
respect thereto with, any Person other than institutional
investors, and neither the Company nor any agent acting on its
behalf has taken or will take any action which would subject the
issuance or sale of the Notes to the provisions of section 5 of
the Securities Act or to the provisions of any securities of Blue
Sky law of any applicable jurisdiction.
8I. Regulation G, etc. Neither the Company nor any
Subsidiary will, directly or indirectly, use any of the proceeds
of the sale of the Notes for the purpose, whether immediate,
incidental or ultimate, of buying a "margin stock" or of
maintaining, reducing or retiring any indebtedness originally
incurred to purchase a stock that is currently a "margin stock",
or for any other purpose which might constitute any purchase and
sale of Notes hereunder a "purpose credit", in each case within
the meaning of Regulation G of the Board of Governors of the
Federal Reserve System (12 C.F.R. 207, as amended). Neither the
Company nor any agent acting on its behalf has taken or will take
any action which might cause this Agreement or the Notes to
violate Regulation G, Regulation T or any other regulation of the
Board of Governors of the Federal Reserve System or to violate
the Securities Exchange Act of 1934, as amended, in each case as
in effect now or as the same may hereafter be in effect.
8J. ERISA. No accumulated funding deficiency (as defined
in section 302 of ERISA and section 412 of the Code), whether or
not waived, exists with respect to any Plan (other than a
Multiemployer Plan). No liability to the Pension Benefit
Guaranty Corporation has been or is expected by the Company or
any ERISA Affiliate to be incurred with respect to any Plan
(other than a Multiemployer Plan) by the Company or any
Subsidiary or any ERISA Affiliate which is or would be materially
adverse to the Company and its Subsidiaries taken as a whole.
Neither the Company, any Subsidiary nor any ERISA Affiliate has
incurred or presently expects to incur any withdrawal liability
under Title IV of ERISA with respect to any Multiemployer Plan
which is or would be materially adverse to the Company and its
Subsidiaries taken as a whole. The execution and delivery of
this Agreement and the issuance and sale of the Notes will not
involve any transaction which is subject to the prohibitions of
section 406 of ERISA or in connection with which a tax could be
imposed pursuant to section 4975 of the Code. The representation
by the Company in the next preceding sentence is made in reliance
upon and subject to the accuracy of the representation in
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paragraph 9B as to the source of the funds to be used to pay the
purchase price of the Notes to be purchased.
8K. Governmental Consent. Neither the nature of the
Company or of any Subsidiary, nor any of their respective
businesses or properties, nor any relationship between the
Company or any Subsidiary and any other Person, nor any
circumstance in connection with the offering, issuance, sale or
delivery of the Notes is such as to require any authorization,
consent, approval, exemption or other action by or notice to or
filing with any court or administrative or governmental body
(other than routine filings after the date of closing with the
Securities and Exchange Commission and/or state Blue Sky
authorities) in connection with the execution and delivery of
this Agreement, the offering, issuance, sale or delivery of the
Notes or fulfillment of or compliance with the terms and
provisions hereof or of the Notes.
8L. Environmental Compliance. The Company and its
Subsidiaries are in substantial compliance with any and all
Environmental Laws including, without limitation, all
Environmental Laws in all jurisdictions in which any of them owns
or operates, or has owned or operated, a facility or site,
arranges or has arranged for disposal or treatment of hazardous
substances, solid waste or other wastes, accepts or has accepted
for transport any hazardous substances, solid waste or other
wastes or holds or has held any interest in real property or
otherwise. No material litigation or proceeding arising under,
relating to or in connection with any Environmental Law is
pending or, to the best knowledge of the Company, threatened
against the Company or any Subsidiary, any real property in which
any thereof holds or has held an interest or any past or present
operation of any thereof. No release, threatened release or
disposal of hazardous waste, solid waste or other wastes is
occurring, or has occurred, on, under or to any real property in
which the Company or any Subsidiary holds any interest or
performs any of its operations, in violation of any Environmental
Law the violation of which could reasonably be expected to have a
material adverse effect on the Company or its Subsidiaries. As
used in this paragraph, "litigation or proceeding" means any
demand, claim, notice, suit, suit in equity, action,
administrative action, investigation or inquiry whether brought
by any governmental authority, private person or entity or
otherwise, and "material" means the measure of a matter or
matters the exposure with respect to which individually or
together with all other matters described exceeds or can
reasonably be expected to exceed $2,500,000.
8M. Investment Company Status. Neither the Company nor any
Subsidiary is an "investment company" or a company "controlled"
by an "investment company" within the meaning of the Investment
Company Act of 1940, as amended or an "investment adviser" within
the meaning of the Investment Advisers Act of 1940, as amended.
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8N. Disclosure. Neither this Agreement nor any other
document, certificate or statement furnished to any Purchaser by
or on behalf of the Company in connection herewith contains any
untrue statement of a material fact or omits to state a material
fact necessary in order to make the statements contained herein
and therein not misleading. There is no fact peculiar to the
Company or any of its Subsidiaries which materially adversely
affects or in the future may (so far as the Company can now
foresee) materially adversely affect the business, property,
assets or financial condition of the Company and its Subsidiaries
taken as a whole and which has not been set forth in this
Agreement or in the other documents, certificates and statements
furnished to any Purchaser by or on behalf of the Company prior
to the date hereof in connection with the transactions
contemplated hereby.
8O. Hostile Tender Offers. None of the proceeds of the
sale of any Notes will be used to finance a Hostile Tender Offer.
9. REPRESENTATIONS OF THE PURCHASERS.
Each Purchaser represents as follows:
9A. Nature of Purchase. Such Purchaser is not acquiring
the Notes purchased by it hereunder with a view to or for sale in
connection with any distribution thereof within the meaning of
the Securities Act, provided that the disposition of such
Purchaser's property shall at all times be and remain within its
control.
9B. Source of Funds. No part of the funds used by such
Purchaser to pay the purchase price of the Notes purchased by
such Purchaser hereunder constitutes assets allocated to any
separate account maintained by such Purchaser in which any
employee benefit plan, other than employee benefit plans
identified on a list which has been furnished by such Purchaser
to the Company, participates to the extent of 10% or more. For
the purpose of this paragraph 9B, the terms "separate account"
and "employee benefit plan" shall have the respective meanings
specified in section 3 of ERISA.
10. DEFINITIONS. For the purpose of this Agreement, the
terms defined in the text of any paragraph shall have the
respective meanings specified therein, and the following terms
shall have the meanings specified with respect thereto below:
10A. Yield-Maintenance Terms.
"Business Day" shall mean any day other than a Saturday, a
Sunday or a day on which commercial banks in New York City are
required or authorized to be closed.
"Called Principal" shall mean, with respect to any Note, the
principal of such Note that is to be prepaid pursuant to
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paragraph 4B (any partial prepayment being applied in
satisfaction of required payments of principal in inverse order
of their scheduled due dates) or is declared to be immediately
due and payable pursuant to paragraph 7A, as the context
requires.
"Discounted Value" shall mean, with respect to the
Called Principal of any Note, the amount obtained by discounting
all Remaining Scheduled Payments with respect to such Called
Principal from their respective scheduled due dates to the
Settlement Date with respect to such Called Principal, in
accordance with accepted financial practice and at a discount
factor (as converted to reflect the periodic basis on which
interest on such Note is payable, if interest is payable other
than on a semi-annual basis) equal to the Reinvestment Yield with
respect to such Called Principal.
"Reinvestment Yield" shall mean, with respect to the Called
Principal of any Note, .50% plus the yield to maturity implied by
(i) the yields reported, as of 10:00 A.M. (New York City local
time) on the Business Day next preceding the Settlement Date with
respect to such Called Principal, on the display designated as
"Page 678" on the Telerate Service (or such other display as may
replace Page 678 on the Telerate Service) for actively traded
U.S. Treasury securities having a maturity equal to the Remaining
Average Life of such Called Principal as of such Settlement Date,
or if such yields shall not be reported as of such time or the
yields reported as of such time shall not be ascertainable, (ii)
the Treasury Constant Maturity Series yields reported, for the
latest day for which such yields shall have been so reported as
of the Business Day next preceding the Settlement Date with
respect to such Called Principal, in Federal Reserve Statistical
Release H.15 (519) (or any comparable successor publication) for
actively traded U.S. Treasury securities having a constant
maturity equal to the Remaining Average Life of such Called
Principal as of such Settlement Date. Such implied yield shall
be determined, if necessary, by (a) converting U.S. Treasury bill
quotations to bond-equivalent yields in accordance with accepted
financial practice and (b) interpolating linearly between
reported yields.
"Remaining Average Life" shall mean, with respect to the
Called Principal of any Note, the number of years (calculated to
the nearest one-twelfth year) obtained by dividing (i) such
Called Principal into (ii) the sum of the products obtained by
multiplying (a) each Remaining Scheduled Payment of such Called
Principal (but not of interest thereon) by (b) the number of
years (calculated to the nearest one-twelfth year) which will
elapse between the Settlement Date with respect to such Called
Principal and the scheduled due date of such Remaining Scheduled
Payment.
"Remaining Scheduled Payments" shall mean, with respect to
the Called Principal of any Note, all payments of such Called
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Principal and interest thereon that would be due on or after the
Settlement Date with respect to such Called Principal if no
payment of such Called Principal were made prior to its scheduled
due date.
"Settlement Date" shall mean, with respect to the Called
Principal of any Note, the date on which such Called Principal is
to be prepaid pursuant to paragraph 4B or is declared to be
immediately due and payable pursuant to paragraph 7A, as the
context requires.
"Yield-Maintenance Amount" shall mean, with respect to any
Note, an amount equal to the excess, if any, of the Discounted
Value of the Called Principal of such Note over the sum of (i)
such Called Principal plus (ii) interest accrued thereon as of
(including interest due on) the Settlement Date with respect to
such Called Principal. The Yield-Maintenance Amount shall in no
event be less than zero.
10B. Other Terms.
"Acceptance" shall have the meaning specified in paragraph
2B(5).
"Acceptance Day" shall have the meaning specified in
paragraph 2B(5).
"Acceptance Window" shall have the meaning specified in
paragraph 2B(5).
"Accepted Note" shall have the meaning specified in
paragraph 2B(5).
"Affiliate" shall mean, with respect to any Person, any
other Person directly or indirectly controlling, controlled by,
or under direct or indirect common control with such first
Person. A Person shall be deemed to control another Person if
such first Person possesses, directly or indirectly, the power to
direct or cause the direction of the management and policies of
such other Person, whether through the ownership of voting
securities, by contract or otherwise.
"Authorized Officer" shall mean (i) in the case of the
Company, the chief executive officer, the chief financial officer
and the treasurer of the Company or the Managing General Partner,
as well as any vice president thereof designated as an
"Authorized Officer" in the Information Schedule attached hereto
or any vice president thereof designated as an "Authorized
Officer" for the purpose of this Agreement in an Officer's
Certificate executed by the Company's or Managing General
Partner's chief executive officer or chief financial officer and
delivered to Prudential, and (ii) in the case of Prudential, any
officer of Prudential designated as its "Authorized Officer" in
the Information Schedule or any officer of Prudential designated
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as its "Authorized Officer" for the purpose of this Agreement in
a certificate executed by one of its Authorized Officers. Any
action taken under this Agreement on behalf of the Company by any
individual who on or after the date of this Agreement shall have
been an Authorized Officer of the Company or the Managing General
Partner and whom Prudential in good faith believes to be an
Authorized Officer of the Company or the Managing General Partner
at the time of such action shall be binding on the Company even
though such individual shall have ceased to be an Authorized
Officer of the Company or the Managing General Partner, and any
action taken under this Agreement on behalf of Prudential by any
individual who on or after the date of this Agreement shall have
been an Authorized Officer of Prudential, and whom the Company in
good faith believes to be an Authorized Officer of Prudential at
the time of such action shall be binding on Prudential even
though such individual shall have ceased to be an Authorized
Officer of Prudential.
"Available Facility Amount" shall have the meaning specified
in paragraph 2B(1).
"Bankruptcy Law" shall have the meaning specified in clause
(viii) of paragraph 7A.
"Cancellation Date" shall have the meaning specified in
paragraph 2B(8)(iii).
"Cancellation Fee" shall have the meaning specified in
paragraph 2B(8)(iii).
"Capitalized Lease" shall mean any lease if the obligation
to make rental payments thereunder constitutes a Capitalized
Lease Obligation.
"Capitalized Lease Obligation" shall mean any rental
obligation which, under generally accepted accounting principles,
is or will be required to be capitalized on the books of the
Company or any Subsidiary, taken at the amount thereof accounted
for as indebtedness (net of interest expense) in accordance with
such principles.
"Closing Day" for any Accepted Note shall mean the Business
Day specified for the closing of the purchase and sale of such
Note in the Request for Purchase of such Note, provided that (i)
if the Company and the Purchaser which is obligated to purchase
such Note agree on an earlier Business Day for such closing, the
"Closing Day" for such Accepted Note shall be such earlier
Business Day, and (ii) if the closing of the purchase and sale of
such Accepted Note is rescheduled pursuant to paragraph 2B(7),
the Closing Day for such Accepted Note, for all purposes of this
Agreement except paragraph 2B(8)(ii), shall mean the Rescheduled
Closing Day with respect to such Closing.
"Code" shall mean the Internal Revenue Code of 1986, as
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amended.
"Confirmation of Acceptance" shall have the meaning
specified in paragraph 2B(5).
"Consolidated Debt" shall mean, as of any time of
determination thereof, the sum of (i) Debt of the Company and
Subsidiaries determined on a consolidated basis and (ii) to the
extent in excess of $5,000,000, Debt of the Company owed to
Subsidiaries.
"Consolidated Net Assets" shall mean, as of any time of
determination thereof, with respect to the Company and
Subsidiaries on a consolidated basis, their assets less, without
duplication, all of their (i) current liabilities, (ii) asset,
liability, contingency and other appropriate reserves, including
reserves for depreciation and amortization expense and for
deferred income taxes nd (iii) other liabilities.
"Consolidated Pre-Tax Income" shall mean, for any period,
the consolidated gross revenues of the Company and its
Subsidiaries less all operating and nonoperating expenses of the
Company and its Subsidiaries including current additions to
reserves and all other charges of a proper character except
current and deferred taxes on income, but not including in gross
revenues any gains (nor in expenses any expenses or taxes
applicable thereto) in excess of losses resulting from the sale,
conversion or other disposition of capital assets (i.e., assets
other than current assets), any gains resulting from the write-up
of assets, any equity of the Company or any Subsidiary in the
unremitted earnings of any corporation which is not a Subsidiary,
any earnings of any Person acquired by the Company or any
Subsidiary through purchase, merger or consolidation or otherwise
for any year prior to the year of acquisition, or any deferred
credit representing the excess of equity in any Subsidiary at the
date of acquisition over the cost of the investment in such
Subsidiary.
"Current Debt" shall mean, with respect to any Person, all
Indebtedness of such Person for borrowed money which by its terms
or by the terms of any instrument or agreement relating thereto
matures on demand or within one year from the date of the
creation thereof and is not directly or indirectly renewable or
extendible at the option of the debtor to a date more than one
year from the date of the creation thereof, provided that
Indebtedness for borrowed money outstanding under a revolving
credit or similar agreement which obligates the lender or lenders
to extend credit over a period of more than one year shall
constitute Funded Debt and not Current Debt, even though such
Indebtedness by its terms matures on demand or within one year
from the date of the creation thereof.
"Debt" shall mean Funded Debt and Current Debt.
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"Delayed Delivery Fee" shall have the meaning specified in
paragraph 2B(8)(ii).
"Environmental Laws" shall mean all federal, state, local
and foreign laws relating to pollution or protection of the
environment, including laws relating to emissions, discharges,
releases or threatened releases of pollutants, contaminants,
chemicals, or industrial, toxic or hazardous substances or wastes
into the environment (including without limitation ambient air,
surface water, ground water, or land), or otherwise relating to
the manufacture, processing, distribution, use, treatment,
storage, disposal, transport, or handling of pollutants,
contaminants, chemicals, or industrial, toxic or hazardous
substances or wastes, and any and all rules, regulations, codes,
plans, orders, decrees, judgments, injunctions, notices or demand
letters issued, entered, promulgated or approved thereunder.
"ERISA" shall mean the Employee Retirement Income Security
Act of 1974, as amended.
"ERISA Affiliate" shall mean any corporation which is a
member of the same controlled group of corporations as the
Company within the meaning of section 414(b) of the Code, or any
trade or business which is under common control with the Company
within the meaning of section 414(c) of the Code.
"Event of Default" shall mean any of the events specified in
paragraph 7A, provided that there has been satisfied any
requirement in connection with such event for the giving of
notice, or the lapse of time, or the happening of any further
condition, event or act, and "Default" shall mean any of such
events, whether or not any such requirement has been satisfied.
"Exchange Act" shall mean the Securities Exchange Act of
1934, as amended.
"Facility" shall have the meanings specified in paragraph
2B(1).
"Facility Fee" shall have the meaning specified in paragraph
2B(8)(i).
"Funded Debt" shall mean with respect to any Person, all
Indebtedness of such Person which by its terms or by the terms of
any instrument or agreement relating thereto matures, or which is
otherwise payable or unpaid, more than one year from, or is
directly or indirectly renewable or extendible at the option of
the debtor to a date more than one year (including an option of
the debtor under a revolving credit or similar agreement
obligating the lender or lenders to extend credit over a period
of more than one year) from, the date of the creation thereof.
"General Partners" shall mean collectively, the Managing
General Partner and the Special General Partner, which are the
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general partners of the Company, and any Person substituted for
or who succeeds either of them as a general partner pursuant to
the terms of the Partnership Agreement, in each case in such
capacity.
"Gross Worth" shall mean, as of any time of determination
thereof, the sum of Owners' Equity and Consolidated Debt.
"Guarantee" shall mean, with respect to any Person, any
direct or indirect liability, contingent or otherwise, of such
Person with respect to any indebtedness, lease, dividend or other
obligation of another, including, without limitation, any such
obligation directly or indirectly guaranteed, endorsed (otherwise
than for collection or deposit in the ordinary course of
business) or discounted or sold with recourse by such Person, or
in respect of which such Person is otherwise directly or
indirectly liable, including, without limitation, any such
obligation in effect guaranteed by such Person through any
agreement (contingent or otherwise) to purchase, repurchase or
otherwise acquire such obligation or any security therefor, or to
provide funds for the payment or discharge of such obligation
(whether in the form of loans, advances, stock purchases, capital
contributions or otherwise), or to maintain the solvency or any
balance sheet or other financial condition of the obligor of such
obligation, or to make payment for any products, materials or
supplies or for any transportation or service, regardless of the
non-delivery or non-furnishing thereof, in any such case if the
purpose or intent of such agreement is to provide assurance that
such obligation will be paid or discharged, or that any
agreements relating thereto will be complied with, or that the
holders of such obligation will be protected against loss in
respect thereof. The amount of any Guarantee shall be equal to
the outstanding principal amount of the obligation guaranteed or
such lesser amount to which the maximum exposure of the guarantor
shall have been specifically limited.
"Hedge Treasury Note(s)" shall mean, with respect to any
Accepted Note, the United States Treasury Note or Notes whose
duration (as determined by Prudential) most closely matches the
duration of such Accepted Note.
"Hostile Tender Offer" shall mean, with respect to the use
of proceeds of any Note, any offer to purchase, or any purchase
of, shares of capital stock of any corporation or equity
interests in any other entity, or securities convertible into or
representing the beneficial ownership of, or rights to acquire,
any such shares or equity interests, if such shares, equity
interests, securities or rights are of a class which is publicly
traded on any securities exchange or in any over-the-counter
market, other than purchases of such shares, equity interests,
securities or rights representing less than 5% of the equity
interests or beneficial ownership of such corporation or other
entity for portfolio investment purposes, and such offer or
purchase has not been duly approved by the board of directors of
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such corporation or the equivalent governing body of such other
entity prior to the date on which the Company makes the Request
for Purchase of such Note.
"Indebtedness" shall mean, with respect to any Person,
without duplication, (i) all items (excluding deferred
compensation, items of contingency reserves and reserves for
deferred income taxes) which in accordance with generally
accepted accounting principles would be included in determining
total liabilities as shown on the liability side of a balance
sheet of such Person as of the date on which Indebtedness is to
be determined, (ii) all indebtedness secured by any Lien on any
property or asset owned or held by such Person subject thereto,
whether or not the indebtedness secured thereby shall have been
assumed, and (iii) all indebtedness of others with respect to
which such Person has become liable by way of Guarantee.
"Issuance Period" shall have the meaning specified in
paragraph 2B(2).
"Lien" shall mean any mortgage, pledge, security interest,
encumbrance, lien or charge of any kind (including any agreement
to give any of the foregoing, any conditional sale or other title
retention agreement, any lease in the nature thereof, and the
filing of or agreement to give any financing statement under the
Uniform Commercial Code of any jurisdiction) or any other type of
preferential arrangement for the purpose, or having the effect,
of protecting a creditor against loss or securing the payment or
performance of an obligation.
"Limited Partner" shall mean any Person who is or shall
become a limited partner of the Company, in such capacity.
"Managing General Partner" shall mean Cedar Fair Management
Company, an Ohio corporation, and its successors and assigns.
"Multiemployer Plan" shall mean any Plan which is a
"multiemployer plan" (as such term is defined in section
4001(a)(3) of ERISA).
"Note" and "Notes" shall have the meaning specified in
paragraph 1.
"Officer's Certificate" shall mean a certificate signed in
the name of the Company by an Authorized Officer of the Company.
"Owners' Equity" shall mean, as of any time of determination
thereof, the partners' equity or shareholders' equity (as the
case may be) of the Company.
"Partner" shall mean any General Partner or any Limited
Partner.
"Partnership Agreement" shall mean the Third Amended and
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Restated Agreement of Limited Partnership of the Company, dated
as of April 21, 1987, among Cedar Fair Management Company, Robert
L. Munger, Jr., as General Partners, and the limited partners
named therein, as the same has been and may be amended or
supplemented from time to time.
"Person" shall mean and include an individual, a
partnership, a joint venture, a corporation, a trust, an
unincorporated organization and a government or any department or
agency thereof.
"Plan" shall mean any "employee pension benefit plan" (as
such term is defined in section 3 of ERISA) which is or has been
established or maintained, or to which contributions are or have
been made, by the Company or by any trade or business, whether or
not incorporated which, together with the Company, is under
common control, as described in section 414(b) or (c) of the
Code.
"Priority Debt" shall mean, as of any time of determination
thereof, (i) Debt of any Subsidiary, other than Debt owed to the
Company or another Subsidiary and (ii) Debt of the Company
secured by any Lien.
"Prudential" shall mean The Prudential Insurance Company of
America.
"Prudential Affiliate" shall mean any corporation or other
entity all of the Voting Stock (or equivalent voting securities
or interests) of which is owned by Prudential either directly or
through Prudential Affiliates.
"Purchaser(s)" shall mean Prudential and each Prudential
Affiliate as purchaser of any Note.
"Related Person" shall mean (i) any General Partner, (ii)
any Person owning 10% or more of the depositary units
representing limited partnership interests in the Company or
(iii) any Affiliate of any Person described in clause (i) or
(ii).
"Request for Purchase" shall have the meaning specified in
paragraph 2B(3).
"Required Holder(s)" shall mean the holder or holders of at
least 51% of the aggregate principal amount of the Notes or of a
Series of Notes, as the context may require, from time to time
outstanding.
"Rescheduled Closing Day" shall have the meaning specified
in paragraph 2B(7).
"Responsible Officer" shall mean the chief executive
officer, chief operating officer, treasurer, chief financial
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officer or chief accounting officer of the Company, general
counsel of the Company or any other officer of the Company
involved principally in its financial administration or its
controllership function.
"Securities Act" shall mean the Securities Act of 1933, as
amended.
"Series" shall have the meaning specified in paragraph 1.
"Significant Holder" shall mean (i) Prudential and any other
Purchaser, so long as Prudential or such Purchaser shall hold (or
be committed under this Agreement to purchase) any Note, or (ii)
any other holder of at least 5% of the aggregate principal amount
of any Series of Notes from time to time outstanding.
"Significant Subsidiary" shall mean any Subsidiary of the
Company or any of its Subsidiaries, (i) having assets which shall
have contributed 10% or more of Consolidated Pre-Tax Income for
any of the three fiscal years then most recently ended, (ii)
having assets whose aggregate fair value (as determined in good
faith by the board of directors of the Managing General Partner
or the Company, as the case may be) shall exceed 10% of the
Consolidated Net Assets or (iii) the sale of which shall have a
material adverse effect on the Company.
"Special General Partner" shall mean CF Partners, a Delaware
general partnership, and its successors and assigns.
"Subsidiary" shall mean any corporation or partnership the
majority of the stock of every class of which, except directors'
qualifying shares, or the majority of equity interest in which
shall, at the time as of which any determination is being made,
be owned by the Company either directly or through Subsidiaries
and "75%-owned Subsidiary" shall mean any corporation or
partnership 75% of the stock of every class of which, except
directors' qualifying shares, or 75% of the equity interest in
which shall, at the time as of which any determination is being
made, be owned by the Company either directly or through a 75%-
owned Subsidiary.
"Transferee" shall mean any direct or indirect transferee of
all or any part of any Note purchased under this Agreement.
"Voting Stock" shall mean, with respect to any corporation,
any shares of stock of such corporation whose holders are
entitled under ordinary circumstances to vote for the election of
directors of such corporation (irrespective of whether at the
time stock of any other class or classes shall have or might have
voting power by reason of the happening of any contingency).
10C. Accounting Principles, Terms and Determinations. All
references in this Agreement to "generally accepted accounting
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principles" shall be deemed to refer to generally accepted
accounting principles in effect in the United States at the time
of application thereof. Unless otherwise specified herein, all
accounting terms used herein shall be interpreted, all
determinations with respect to accounting matters hereunder shall
be made, and all financial statements and certificates and
reports as to financial matters required to be furnished
hereunder shall be prepared, in accordance with generally
accepted accounting principles applied, in the case of any such
unaudited financial statements, certificates and reports, on a
basis consistent with the most recent audited consolidated
financial statements of the Company and its Subsidiaries
delivered pursuant to clause (ii) of paragraph 5A or, if no such
statements have been so delivered, the most recent audited
financial statements referred to in clause (i) of paragraph 8B.
11. MISCELLANEOUS.
11A. Note Payments. The Company agrees that, so long as
any Purchaser shall hold any Note, it will make payments of
principal thereof and Yield-Maintenance Amount, if any, and
interest thereon, which comply with the terms of this Agreement,
by wire transfer of immediately available funds for credit to (i)
the account or accounts as specified in the purchaser schedule
attached to the applicable Confirmation of Acceptance or (ii)
such other account or accounts in the United States as any
Purchaser may designate in writing, notwithstanding any contrary
provision herein or in any Note with respect to the place of
payment. Each Purchaser agrees that, before disposing of any
Note, it will make a notation thereon (or on a schedule attached
thereto) of all principal payments previously made thereon and of
the date to which interest thereon has been paid. The Company
agrees to afford the benefits of this paragraph 11A to any
Transferee which shall have made the same agreement as you have
made in this paragraph 11A.
11B. Expenses. The Company agrees, whether or not the
transactions contemplated hereby shall be consummated, to pay,
and save each Purchaser and any Transferee harmless against
liability for the payment of, all out-of-pocket expenses arising
in connection with such transactions, including (i) all document
production and duplication charges and the fees and expenses of
any special counsel engaged by the Purchasers or any Transferee
in connection with this Agreement, the transactions contemplated
hereby and any subsequent proposed modification of, or proposed
consent under, this Agreement, whether or not such proposed
modification shall be effected or proposed consent granted, and
(ii) the costs and expenses, including attorneys' fees, incurred
by each Purchaser or any Transferee in enforcing (or in
determining whether or in what manner to enforce) any rights
under this Agreement or the Notes or in responding to any
subpoena or other legal process issued in connection with this
Agreement or the transactions contemplated hereby or by reason of
any Purchaser's or any Transferee's having acquired any Note,
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including without limitation costs and expenses incurred in any
bankruptcy case. The obligations of the Company under this
paragraph 11B shall survive the transfer of any Note or portion
thereof or interest therein by any Purchaser or any Transferee
and the payment of any Note.
11C. Consent to Amendments. This Agreement may be amended,
and the Company may take any action herein prohibited, or omit to
perform any act herein required to be performed by it, if the
Company shall obtain the written consent to such amendment,
action or omission to act, of the Required Holder(s) of the Notes
of each Series except that, (i) with the written consent of the
holders of all Notes of a particular Series, and if an Event of
Default shall have occurred and be continuing, of the holders of
all Notes of all Series, at the time outstanding (and not without
such written consents), the Notes of such Series may be amended
or the provisions thereof waived to change the maturity thereof,
to change or affect the principal thereof, or to change or affect
the rate or time of payment of interest or Yield-Maintenance
Amount payable with respect to the Notes of such Series, (ii)
without the written consent of the holder or holders of all Notes
at the time outstanding, no amendment to or waiver of the
provisions of this Agreement shall change or affect the
provisions of paragraph 7A or this paragraph 11C insofar as such
provisions relate to proportions of the principal amount of the
Notes of any Series, or the rights of any individual holder of
Notes, required with respect to any declaration of Notes to be
due and payable or with respect to any consent, (iii) with the
written consent of Prudential (and not without the written
consent of Prudential) the provisions of paragraph 2 may be
amended or waived (except insofar as any such amendment or waiver
would affect any rights or obligations with respect to the
purchase and sale of Notes which shall have become Accepted Notes
prior to such amendment or waiver) and (iv) with the written
consent of all of the Purchasers which shall have become
obligated to purchase Accepted Notes of any Series (and not
without the written consent of all such Purchasers), any of the
provisions of paragraphs 2 and 3 may be amended or waived insofar
as such amendment or waiver would affect only rights or
obligations with respect to the purchase and sale of the Accepted
Notes of such Series or the terms and provisions of such Accepted
Notes. Each holder of any Note at the time or thereafter
outstanding shall be bound by any consent authorized by this
paragraph 11C, whether or not such Note shall have been marked to
indicate such consent, but any Notes issued thereafter may bear a
notation referring to any such consent. No course of dealing
between the Company and the holder of any Note nor any delay in
exercising any rights hereunder or under any Note shall operate
as a waiver of any rights of any holder of such Note. As used
herein and in the Notes, the term "this Agreement" and references
thereto shall mean this Agreement as it may from time to time be
amended or supplemented.
11D. Form, Registration, Transfer and Exchange of Notes;
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Lost Notes. The Notes are issuable as registered notes without
coupons in denominations of at least $1,000,000, except as may be
necessary to reflect any principal amount not evenly divisible by
$1,000,000. The Company shall keep at its principal office a
register in which the Company shall provide for the registration
of Notes and of transfers of Notes. Upon surrender for
registration of transfer of any Note at the principal office of
the Company, the Company shall, at its expense, execute and
deliver one or more new Notes of like tenor and of a like
aggregate principal amount, registered in the name of such
transferee or transferees. At the option of the holder of any
Note, such Note may be exchanged for other Notes of like tenor
and of any authorized denominations, of a like aggregate
principal amount, upon surrender of the Note to be exchanged at
the principal office of the Company. Whenever any Notes are so
surrendered for exchange, the Company shall, at its expense,
execute and deliver the Notes which the holder making the
exchange is entitled to receive. Every Note surrendered for
registration of transfer or exchange shall be duly endorsed, or
be accompanied by a written instrument of transfer duly executed,
by the holder of such Note or such holder's attorney duly
authorized in writing. Any Note or Notes issued in exchange for
any Note or upon transfer thereof shall carry the rights to
unpaid interest and interest to accrue which were carried by the
Note so exchanged or transferred, so that neither gain nor loss
of interest shall result from any such transfer or exchange.
Upon receipt of written notice from the holder of any Note of the
loss, theft, destruction or mutilation of such Note and, in the
case of any such loss, theft or destruction, upon receipt of such
holder's unsecured indemnity agreement, or in the case of any
such mutilation upon surrender and cancellation of such Note, the
Company will make and deliver a new Note, of like tenor, in lieu
of the lost, stolen, destroyed or mutilated Note.
11E. Persons Deemed Owners; Participations. Prior to due
presentment for registration of transfer, the Company may treat
the Person in whose name any Note is registered as the owner and
holder of such Note for the purpose of receiving payment of
principal of and Yield-Maintenance Amount, if any, and interest
on such Note and for all other purposes whatsoever, whether or
not such Note shall be overdue, and the Company shall not be
affected by notice to the contrary. Subject to the preceding
sentence, the holder of any Note may from time to time grant
participations in all or any part of such Note to any Person on
such terms and conditions as may be determined by such holder in
its sole and absolute discretion.
11F. Survival of Representations and Warranties; Entire
Agreement. All representations and warranties contained herein
or made in writing by or on behalf of the Company in connection
herewith shall survive the execution and delivery of this
Agreement and the Notes, the transfer by any Purchaser of any
Note or portion thereof or interest therein and the payment of
any Note, and may be relied upon by any Transferee, regardless of
101
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any investigation made at any time by or on behalf of any
Purchaser or any Transferee. Subject to the preceding sentence,
this Agreement and the Notes embody the entire agreement and
understanding between the parties hereto with respect to the
subject matter hereof and supersede all prior agreements and
understandings relating to the subject matter hereof.
11G. Successors and Assigns. All covenants and other
agreements in this Agreement contained by or on behalf of any of
the parties hereto shall bind and inure to the benefit of the
respective successors and assigns of the parties hereto
(including, without limitation, any Transferee) whether so
expressed or not.
11H. Notices. All written communications provided for
hereunder (other than communications provided for under paragraph
2) shall be sent by first class mail or nationwide overnight
delivery service (with charges prepaid) and (i) if to any
Purchaser, addressed as specified for such communications in the
purchaser schedule attached to the applicable Confirmation of
Acceptance, or at such other address as any Purchaser shall have
specified to the Company in writing, (ii) if to any other holder
of any Note, addressed to such other holder at such address as
such other holder shall have specified to the Company in writing
or, if any such other holder shall not have so specified an
address to the Company, then addressed to such other holder in
care of the last holder of such Note which shall have so
specified an address to the Company, and (iii) if to the Company,
addressed to it at Cedar Fair, L.P., One Causeway Drive, P.O. Box
5006, Sandusky, Ohio 44871, Attention: Chief Financial Officer,
or at such other address as the Company shall have specified to
the holder of each Note in writing. Any communication pursuant
to paragraph 2 shall be made by the method specified for such
communication in paragraph 2, and shall be effective to create
any rights or obligations under this Agreement only if, in the
case of a telephone communication, an Authorized Officer of the
party conveying the information and of the party receiving the
information are parties to the telephone call, and in the case of
a telecopier communication, the communication is signed by an
Authorized Officer of the party conveying the information,
addressed to the attention of an Authorized Officer of the party
receiving the information, and in fact received at the telecopier
terminal the number of which is set forth on the Information
Schedule attached hereto or at such other telecopier terminal as
the party receiving the information shall have specified in
writing to the party sending such information.
11I. Descriptive Headings. The descriptive headings of the
several paragraphs of this Agreement are inserted for convenience
only and do not constitute a part of this Agreement.
11J. Satisfaction Requirement. If any agreement,
certificate or other writing, or any action taken or to be taken,
is by the terms of this Agreement required to be satisfactory to
102
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any Purchaser, to any holder of Notes or to the Required
Holder(s), the determination of such satisfaction shall be made
by such Purchaser, such holder or the Required Holder(s), as the
case may be, in the sole and exclusive judgment (exercised in
good faith) of the Person or Persons making such determination.
11K. Payments Due on Non-Business Days. Anything in this
Agreement or the Notes to the contrary notwithstanding, any
payment of principal of or interest on any Note that is due on a
date other than a Business Day shall be made on the next
succeeding Business Day. If the date for any payment is extended
to the next succeeding Business Day by reason of the preceding
sentence, the period of such extension shall be included in the
computation of the interest payable on such Business Day.
11L. Limited Liability of Partners. Anything in this
Agreement or the Notes to the contrary notwithstanding, no
recourse under or in respect of this Agreement or the Notes shall
be had against any Partner, shareholder of a Partner or partner
of a Partner by the enforcement of any assessment or by any legal
or equitable proceeding, by virtue of statute or otherwise,
whether based on agency, deputization or otherwise, it being
expressly agreed that no personal liability whatsoever shall
attach to or be incurred by the Partners, shareholders of
Partners or partners of Partners or any of them under or by
reason of this Agreement or the Notes; provided that the
foregoing limitation of liability shall in no way constitute a
limitation on the right of the holders of the Notes to enforce
their remedies against the Company's assets for the collection of
amounts due and owing under the Notes or any other obligation of
the Company contemplated by this Agreement. Each of the Notes
shall contain a statement to the effect that the obligations of
the Partners are limited as provided in this paragraph 11L.
11M. Independence of Covenants. All covenants hereunder
shall be given independent effect so that if a particular action
or condition is prohibited by any one of such covenants, the fact
that it would be permitted by an exception to, or otherwise be in
compliance within the limitations of, another covenant shall not
avoid the occurrence of a Default or Event of Default if such
action is taken or such condition exists.
11N. Severability. Any provision of this Agreement which
is prohibited or unenforceable in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such
prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.
11O. Governing Law. This Agreement shall be construed and
enforced in accordance with, and the rights of the parties shall
be governed by, the internal law of the State of Illinois.
103
<PAGE>
11P. Counterparts. This Agreement may be executed
simultaneously in two or more counterparts, each of which shall
be deemed an original, and it shall not be necessary in making
proof of this Agreement to produce or account for more than one
such counterpart.
11Q. Binding Agreement. When this Agreement is executed
and delivered by the Company and Prudential, it shall become a
binding agreement between the Company and Prudential. This
Agreement shall also inure to the benefit of each other Purchaser
which shall have executed and delivered a Confirmation
of Acceptance, and each such other Purchaser shall be bound by
this Agreement to the extent provided in such Confirmation of
Acceptance.
Very truly yours,
CEDAR FAIR, L.P.
By: CEDAR FAIR MANAGEMENT COMPANY,
Managing General Partner
By: Bruce A. Jackson
Its: Vice President - Finance
The foregoing Agreement is
hereby accepted as of the
date first above written.
THE PRUDENTIAL INSURANCE COMPANY
OF AMERICA
By: Jeffrey L. Dickson
Title: Vice President
104
<PAGE>
CEDAR FAIR, L.P.
SERIES A
SENIOR NOTE
No. A-1
ORIGINAL PRINCIPAL AMOUNT: $50,000,000
ORIGINAL ISSUE DATE: August 24, 1994
INTEREST RATE: 8.43%
INTEREST PAYMENT DATES: February 24 and August 24 of each year
FINAL MATURITY DATE: August 24, 2006
PRINCIPAL PREPAYMENT DATES AND AMOUNTS: $10,000,000 on August 24
of each year, commencing August 24, 2002 and through and
including August 24, 2005
FOR VALUE RECEIVED, the undersigned, Cedar Fair, L.P.
(herein called the "Company"), a limited partnership organized
and existing under the laws of the State of Delaware, hereby
promises to pay to The Prudential Insurance Company of America,
or registered assigns, the principal sum of FIFTY MILLION
DOLLARS, payable on the Principal Prepayment Dates and in the
amounts specified above, and on the Final Maturity Date specified
above in an amount equal to the unpaid balance of the principal
hereof, with interest (computed on the basis of a 360-day year--
30-day month) (a) on the unpaid balance thereof at the Interest
Rate per annum specified above, payable on each Interest Payment
Date specified above and on the Final Maturity Date specified
above, commencing with the Interest Payment Date next succeeding
the date hereof, until the principal hereof shall have become due
and payable, and (b) on any overdue payment (including any
overdue prepayment) of principal, any overdue payment of Yield-
Maintenance Amount (as defined in the Agreement referenced below)
and any overdue payment of interest, payable on each Interest
Payment Date as aforesaid (or, at the option of the registered
holder hereof, on demand), at a rate per annum from time to time
equal to the greater of (i) 2% plus the Interest Rate specified
above or (ii) 2% plus the rate of interest publicly announced by
Morgan Guaranty Trust Company of New York from time to time in
New York City as its Prime Rate.
Payments of principal, Yield-Maintenance Amounts, if any,
and interest are to be made at the main office of Morgan Guaranty
Trust Company of New York in New York City or at such other place
as the holder hereof shall designate to the Company in writing,
in lawful money of the United States of America.
105
<PAGE>
This Note is one of a series of Senior Notes (herein called
the "Notes") issued pursuant to a Private Shelf Agreement, dated
as of August 24, 1994 (herein called the "Agreement"), between
the Company, on the one hand, and The Prudential Insurance
Company of America and each Prudential Affiliate (as defined in
the Agreement) which becomes a party thereto, on the other hand,
and is entitled to the benefits thereof. As provided in the
Agreement, this Note is subject to prepayment, in whole or from
time to time in part, in some cases without the Yield-Maintenance
Amount and in other cases with the Yield-Maintenance Amount (if
any) specified in the Agreement.
This Note is a registered Note and, as provided in the
Agreement, upon surrender of this Note for registration of
transfer, duly endorsed, or accompanied by a written instrument
of transfer duly executed, by the registered holder hereof or
such holder's attorney duly authorized in writing, a new Note for
a like principal amount will be issued to, and registered in the
name of, the transferee. Prior to due presentment for registra-
tion of transfer, the Company may treat the person in whose name
this Note is registered as the owner hereof for the purpose of
receiving payment and for all other purposes, and the Company
shall not be affected by any notice to the contrary.
In case an Event of Default, as defined in the Agreement,
shall occur and be continuing, the principal of this Note may be
declared or otherwise become due and payable in the manner and
with the effect provided in the Agreement.
The obligations of the Partners (as defined in the
Agreement) with respect to this Note are limited as provided in
paragraph 11L of the Agreement.
This Note is intended to be performed in the State of
Illinois and shall be construed and enforced in accordance with
the internal law of such State.
CEDAR FAIR, L.P.
By: CEDAR FAIR MANAGEMENT COMPANY,
Managing General Partner
By: Bruce A. Jackson
Title: Vice President - Finance
106
<PAGE>
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