UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1999
Commission File Number 1-11234
KINDER MORGAN ENERGY PARTNERS, L.P.
(Exact name of registrant as specified in its charter)
Delaware 76-0380342
------------------------------- -------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification
incorporation or organization) Number)
1301 McKinney St.
Suite 3450
Houston, Texas 77010
-------------------------------- -------------------------------
(Address of principal executive (Zip Code)
Offices)
(713) 844-9500
---------------------------------------------------
(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 [ ]
The Registrant had 49,327,237 units outstanding at November 8, 1999.
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KINDER MORGAN ENERGY PARTNERS, L.P. AND SUBSIDIARIES
TABLE OF CONTENTS
Page No.
PART I. FINANCIAL INFORMATION
ITEM 1. - Financial Statements (Unaudited)
Consolidated Statements of Income - Three Months
and Nine Months Ended September 30, 1999 and 19983 3
Consolidated Balance Sheets - September 30, 1999 and
December 31, 1998 4
Consolidated Statements of Cash Flows - Nine Months
Ended September 30, 1999 and 1998 5
Notes to Consolidated Financial Statements 6
ITEM 2. - Management's Discussion and Analysis of
Financial Condition and Results of Operations 15
ITEM 3. - Quantitative and Qualitative Disclosures about
Market Risk 23
PART II. OTHER INFORMATION
ITEM 1. - Legal Proceedings 24
ITEM 5. - Other Information 24
ITEM 6. - Exhibits and Reports on Form 8-K 24
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<TABLE>
<CAPTION>
PART I. FINANCIAL INFORMATION
ITEM 1. Financial Statements (Unaudited)
KINDER MORGAN ENERGY PARTNERS, L.P. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(In Thousands Except Per Unit Amounts)
(Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
1999 1998 1999 1998
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Revenues $ 104,388 $ 101,900 $ 307,370 $ 220,685
Costs and Expenses
Operating expenses 31,907 34,252 91,813 65,041
Depreciation and amortization 13,013 11,050 37,358 25,440
General and administrative 7,940 11,788 24,700 25,946
Taxes, other than income taxes 4,093 3,187 12,518 8,173
----------- ----------- ----------- -----------
56,953 60,277 166,389 124,600
----------- ----------- ----------- -----------
Operating Income 47,435 41,623 140,981 96,085
Other Income (Expense)
Earnings from equity investments 13,400 5,810 31,101 16,417
Interest, net (14,197) (9,613) (38,180) (27,386)
Other, net 2,524 (2,089) 4,411 (4,631)
Gain on sale of equity interest and special charges 10,063 - 10,063 -
Minority Interest (868) (447) (2,294) (924)
----------- ----------- ----------- -----------
Income Before Income Taxes and Extraordinary charge 58,357 35,284 146,082 79,561
Income Tax (Expense) (3,209) (168) (6,752) (168)
----------- ----------- ----------- -----------
Income Before Extraordinary charge 55,148 35,116 139,330 79,393
Extraordinary charge on early extinguishment of debt (2,595) - (2,595) (13,611)
----------- ----------- ----------- -----------
Net Income $ 52,553 35,116 $ 136,735 $ 65,782
=========== =========== =========== ===========
Calculation of Limited Partners' Interest in Net Income:
Income Before Extraordinary charge $ 55,148 35,116 $ 139,330 $ 79,393
Less: General Partner's interest in Net Income (14,797) (10,031) (41,545) (22,458)
----------- ----------- ----------- -----------
Limited Partners' Net Income before extraord. charge 40,351 25,085 97,785 56,935
Less: Extraord. charge on early exting. of debt (2,595) - (2,595) (13,611)
=========== =========== =========== ===========
Limited Partners' Net Income $ 37,756 25,085 $ 95,190 $ 43,324
=========== =========== =========== ===========
Net Income per Unit before extraordinary charge $ 0.82 0.52 $ 2.00 $ 1.53
=========== =========== =========== ===========
Extraordinary charge per Unit $ (0.05) - $ (0.05)$ (0.36)
=========== =========== =========== ===========
Net Income per Unit $ 0.77 0.52 $ 1.95 $ 1.17
=========== =========== =========== ===========
Number of Units used in Computation 48,927 47,837 48,854 37,180
=========== =========== =========== ===========
The accompanying notes are an integral part of these consolidated financial statements.
</TABLE>
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KINDER MORGAN ENERGY PARTNERS, L.P. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In Thousands)
September 30, December 31,
1999 1998
------------- -----------------
(Unaudited)
ASSETS
Current Assets
Cash and cash equivalents $ 29,744 $ 31,735
Accounts and notes receivable 60,253 44,125
Inventories
Products 8,310 2,901
Materials and supplies 2,855 2,640
Other Current Assets 205 -
------------- -----------------
101,367 81,401
------------- -----------------
Property, Plant and Equipment, at cost 1,925,653 1,836,719
Less accumulated depreciation 105,916 73,333
------------- -----------------
1,819,737 1,763,386
------------- -----------------
Equity Investments 331,592 238,608
------------- -----------------
Intangibles 56,506 58,536
Deferred charges and other assets 17,003 10,341
============= =================
TOTAL ASSETS $ 2,326,205 $ 2,152,272
============= =================
LIABILITIES AND PARTNERS' CAPITAL
Current Liabilities
Accounts and notes payable $ 30,519 $ 25,642
Accrued liabilities 31,622 18,230
Accrued employee benefits 5,793 9,415
Accrued taxes 7,669 4,195
------------- -----------------
75,603 57,482
------------- -----------------
Long-Term Liabilities and Deferred Credits
Long-term debt 765,398 611,571
Other 92,452 104,789
------------- -----------------
857,850 716,360
------------- -----------------
Commitments and Contingencies
Minority Interest 18,557 17,767
------------- -----------------
Partners' Capital
Common Units 1,358,489 1,348,591
General Partner 15,706 12,072
------------- -----------------
1,374,195 1,360,663
------------- -----------------
============= =================
TOTAL LIABILITIES AND PARTNERS' CAPITAL $ 2,326,205 $ 2,152,272
============= =================
The accompanying notes are an integral part of these consolidated financial
statements.
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<TABLE>
<CAPTION>
KINDER MORGAN ENERGY PARTNERS, L.P. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Thousands)
(Unaudited)
Nine Months Ended
September 30,
1999 1998
<S> <C> <C>
------------ -------------
Cash Flows From Operating Activities
Reconciliation of net income to net cash provided by operating activities
Net income $ 136,735 $ 65,782
Extraordinary charge on early extinguishment of debt 2,595 13,611
Depreciation and amortization 37,358 25,440
Earnings from equity investments (31,101) (16,417)
Gain on sale of equity interest and special charges (10,063) -
Distributions from equity investments 25,082 12,248
Changes in components of working capital (6,370) 7,116
Other, net (9,428) (2,577)
------------ -------------
Net Cash Provided by Operating Activities 144,808 105,203
------------ -------------
Cash Flows From Investing Activities
Acquisitions of assets (13,984) (74,706)
Additions to property, plant and equipment for
expansion and maintenance projects (61,696) (23,529)
Sale of investments, property, plant and equipment 42,870 46
Acquisitions of equity investments (124,163) (135,000)
Contributions to equity investments (800) (1,192)
------------ -------------
Net Cash Used in Investing Activities (157,773) (234,381)
------------ -------------
Cash Flows From Financing Activities
Issuance of debt 424,734 415,089
Payment of debt (270,444) (375,235)
Long-term debt - refinancing / issue costs (3,611) (16,471)
Proceeds from issuance of common units - 212,303
Contributions from General Partner's Minority Interest 156 12,488
Distributions to partners
Common Units (100,073) (61,624)
General Partner (37,896) (17,362)
Minority Interest (1,660) (1,077)
Other, net (232) (289)
------------ -------------
Net Cash Provided by Financing Activities 10,974 167,822
------------ -------------
Increase (Decrease) in Cash and Cash Equivalents (1,991) 38,644
Cash and Cash Equivalents, Beginning of Period 31,735 9,612
============ =============
Cash and Cash Equivalents, End of Period $ 29,744 $ 48,256
============ =============
Noncash Investing and Financing Activities
Contribution of net assets to partnership investments $ 20 $ 59,341
Assets acquired by the issuance of Common Units $ 15,304 $ 1,003,202
Assets acquired by the assumption of liabilities $ - $ 554,182
</TABLE>
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KINDER MORGAN ENERGY PARTNERS, L.P. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. General
The unaudited consolidated financial statements included herein have been
prepared by Kinder Morgan Energy Partners, L.P. (the "Partnership") pursuant to
the rules and regulations of the Securities and Exchange Commission.
Accordingly, they reflect all adjustments, which are, in the opinion of
management, necessary for a fair presentation of the financial results for the
interim periods. Certain information and notes normally included in financial
statements prepared in accordance with generally accepted accounting principles
have been condensed or omitted pursuant to such rules and regulations. The
Partnership believes, however, that the disclosures are adequate to make the
information presented not misleading. These consolidated financial statements
should be read in conjunction with the consolidated financial statements and the
notes thereto included in the Partnership's Annual Report on Form 10-K for the
year ended December 31, 1998 ("Form 10-K"). The Limited Partners' Net Income per
Unit was computed by dividing the Limited Partners' interest in Net Income
(before and after the extraordinary charges on early extinguishment of debt) by
the weighted average number of units outstanding during the periods.
2. Acquisitions and Joint Ventures
During 1998, the Partnership completed certain significant acquisitions
consisting of SFPP, L.P. ("SFPP"), an operating partnership acquired on March 6,
1998, valued at more than $1.4 billion inclusive of liabilities assumed,
Hall-Buck Marine, Inc. ("Hall-Buck"), acquired on July 1, 1998, valued at $100
million including common units and debt assumed, and an equity interest in Shell
CO2 Company, Ltd. ("Shell CO2 Company"), acquired on March 5, 1998, valued at
$85 million, including contributions of a pipeline and cash.
Pro Forma Information
The following summarized unaudited Pro Forma Consolidated Income Statement
information for the nine months ended September 30, 1998, assumes the above
acquisitions had occurred as of January 1, 1998. The unaudited Pro Forma
financial results have been prepared for comparative purposes only and may not
be indicative of the results that would have occurred if the Partnership had
completed the above acquisitions on the dates indicated or which will be
attained in the future.
The Pro Forma information does not include the effects of the Partnership's
acquisitions of an equity interest in Plantation Pipe Line Company on September
15, 1998, or the acquisitions of the Pier IX and Shipyard River Terminals on
December 18, 1998. Amounts presented below are in thousands, except for per unit
amounts:
Page 6 of 26
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Pro Forma
Nine Months Ended
Income Statement Sept. 30, 1998
--------------
(Unaudited)
Revenues $294,031
Operating Income $111,181
Net Income before extraordinary charge $88,303
Net Income $74,692
Net Income per unit before extraordinary charge $1.38
Net Income per unit $1.08
Other Acquisitions
On September 15, 1998, the Partnership acquired approximately 24% of
Plantation Pipe Line Company for $110 million. On June 16, 1999, the Partnership
acquired Chevron's approximate 27% interest in Plantation Pipe Line Company for
$124.2 million. The Partnership now owns approximately 51% of Plantation Pipe
Line Company, and Exxon Pipeline Company, an affiliate of Exxon Corp., owns
approximately 49%.
On September 10, 1999, the Partnership completed its previously announced
acquisition of transmix processing plants in Richmond, Virginia and Dorsey
Junction, Maryland from Primary Corporation. The Partnership paid Primary $18.25
million in cash and issued 510,147 common units as consideration for the sale.
3. Gain on Sale of Equity Interest and Special Charges
During the third quarter of 1999, the Partnership completed its previously
announced sale of its partnership interest in the Mont Belvieu fractionation
facility for approximately $41.8 million. The Partnership recognized a gain of
$14.1 million on the sale. Offsetting the gain amount were charges of
approximately $3.6 million relating to the write-off of abandoned project costs,
primarily within the Pacific Operations, and a charge of $0.4 million relating
to prior years' over-billed storage tank lease fees within the Partnership's
Mid-Continent Operations.
4. Litigation
FERC Proceedings
On January 13, 1999, the Federal Energy Regulatory Commission issued its
Opinion No. 435 in Docket Nos. OR92-8-000, et. al. This docket deals with a
complaint filed by certain shippers: (1) challenging SFPP's West Line rates from
the Los Angeles area to Phoenix and Tucson, Arizona and East Line rates from El
Paso, Texas to Tucson and Phoenix and (2) challenging SFPP's proration policy.
Opinion 435 affirmed in part and modified in part the initial decision by the
FERC Administrative Law Judge that was issued on September 25, 1997. In Opinion
No. 435, the FERC ruled that all but one of the West Line rates are
"grandfathered" as just and reasonable and that "changed circumstances" had not
been shown to satisfy the complainants' threshold burden necessary to challenge
those rates. The FERC further held that the one "non-grandfathered" West Line
tariff did not require rate reduction. Accordingly, all complaints against the
West Line rates were dismissed without any requirement that SFPP reduce, or pay
any reparations for, any West Line rate.
Page 7 of 26
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With respect to the East Line rates, Opinion No. 435 reversed in part and
affirmed in part the administrative law judge's initial decision regarding the
methodology of calculating the rate base for the East Line. Among other things,
Opinion No. 435 modified the initial decision concerning the date in reference
to which the starting rate base would be calculated and the income tax allowance
and allowable cost of equity used to calculate the rate base. In addition,
Opinion No. 435 ruled that no reparations would be owed to any complainant for
any period prior to the date on which that complainant's complaint was filed,
thus reducing the potential reparations period for most complainants by two
years. Complainants have filed applications for rehearing with the FERC and
petitions with the United States Court of Appeals for the District of Columbia
circuit for review of Opinion No. 435. SFPP has filed for both rehearing and
appellate review of Opinion No. 435. The Partnership believes Opinion No. 435
substantially reduces the negative impact of the initial decision.
In a companion order to Opinion No. 435, the FERC directed the complainants
in Docket Nos. OR98-1-000 and OR98-2-000 to amend their complaints, as may be
appropriate, so as to make them consistent with the terms and conditions of its
orders, including Opinion No. 435. These complaints challenge the justness and
reasonableness of all of SFPP's interstate rates and include an assertion that
the acquisition of SFPP and the cost savings anticipated to result from the
acquisition constitute "changed circumstances" that provide a basis for
terminating the "grandfathered" status of SFPP's otherwise protected rates.
California Public Utilities Commission Proceeding
ARCO Products Company, Mobil Oil Corporation and Texaco Refining and
Marketing Inc. have filed a complaint with the California Public Utilities
Commission ("CPUC") against SFPP challenging the rates charged by SFPP for
intrastate transportation of refined petroleum products in California and
requesting prospective rate adjustments. On June 18, 1998, the CPUC affirmed a
ruling dismissing the complaint. The complainants filed for rehearing of the
CPUC's decision and on June 24, 1999, the CPUC issued an order on rehearing and
remanded the proceedings to an Administrative Law Judge for further handling.
The Partnership has filed with the CPUC a response to the CPUC remand for the
purpose of having the June 18, 1998 dismissal affirmed and the decision to
remand overruled. The Partnership believes it has adequate reserves recorded for
any adverse decision related to this matter.
SPTC Easements
SFPP and Southern Pacific Transportation Company ("SPTC") are engaged in a
judicial reference proceeding to determine the extent, if any, to which the rent
payable by SFPP for the use of pipeline easements on rights-of-way held by SPTC
should be adjusted pursuant to existing contractual arrangements. Although SFPP
received a favorable ruling from the trial court in May 1997, in September 1999,
the California Court of Appeals remanded the case back to the trial court for
further proceeding. SFPP is accruing amounts for payment of the rental for the
subject rights-of-way consistent with the company's expectations of the ultimate
outcome of the proceeding.
Environmental Matters
The Partnership is currently involved in the following governmental
proceedings related to compliance with environmental regulations:
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<PAGE>
o SFPP, along with several other respondents, is involved in one cleanup
ordered by the United States Environmental Protection Agency related to
ground water contamination in the vicinity of SFPP's storage facilities and
truck loading terminal at Sparks, Nevada.
o SFPP is currently involved in 18 ground water hydrocarbon remediation
efforts under administrative orders issued by the California Regional Water
Quality Control Board and two other state agencies.
o SFPP is involved in an investigation by the San Bernardino County District
Attorney regarding a May 1999 discharge of pipeline hydrotest water from
SFPP's Colton facility. In the investigation, it is alleged that SFPP
discharged, in violation of applicable environmental laws, a quantity of
hydrotest water contaminated with jet fuel into the San Bernardino County
Flood Control District Channel. The Partnership is cooperating with the
District Attorney in its investigation.
In addition, the Partnership from time to time is involved in civil
proceedings relating to damages alleged to have occurred as a result of
accidental leaks or spills of refined petroleum products or natural gas liquids.
Among these matters is a lawsuit originally filed in February 1998 against SFPP
in the Superior Court of the State of California in and for the County of Solano
by 283 individual plaintiffs alleging personal injury and property damage
arising from a release in 1996 of petroleum products from SFPP's pipeline
running through Elmira, California. An amended complaint was filed on May 22,
1998. No trial date has been set. The Partnership continues to aggressively
defend the action, and is currently in the process of settling the personal
injury claims of 77 plaintiffs.
Although no assurance can be given, the Partnership believes that the
ultimate resolution of these matters will not have a material adverse effect on
its financial position or results of operations. The Partnership has recorded a
reserve for environmental claims in the amount of $17.5 million at September 30,
1999.
Other
The Partnership, in the ordinary course of business, is a defendant in
various lawsuits relating to the Partnership's assets. Although no assurance can
be given, the Partnership believes, based on its experience to date, that the
ultimate resolution of such items will not have a material adverse impact on the
Partnership's financial position or results of operations.
For more detailed information regarding these proceedings and other
litigation, please refer to the Partnership's Form 10-K, Note 15 of the Notes to
the Consolidated Financial Statements.
5. Distributions
On August 13, 1999, the Partnership paid a cash distribution for the
quarterly period ended June 30, 1999, of $0.70 per unit. The distribution was
declared on July 15, 1999, payable to unitholders of record as of July 31, 1999.
On October 13, 1999, the Partnership declared a cash distribution for the
quarterly period ended September 30, 1999, of $0.725 per unit. The distribution
will be paid on or before November 12, 1999, to unitholders of record as of
October 29, 1999.
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6. Long-Term Debt
The Partnership's debt facilities consist of:
o a $300 million unsecured five-year credit facility;
o a $300 million unsecured 364-day credit facility;
o $250 million of 6.30% Senior Notes due February 1, 2009;
o $244 million of Series F First Mortgage Notes (a subsidiary, SFPP, L.P., is
the obligor on the notes);
o a $175 million secured credit facility of SFPP, L.P.; and
o $23.7 million of tax-exempt bonds due 2024 (a subsidiary, Kinder Morgan
Operating L.P. "B" ("OLP-B"), is the obligor on these bonds).
In February 1998, the Partnership refinanced the first mortgage notes and
existing bank credit facilities of Kinder Morgan Operating L.P. "A" with a $325
million secured revolving credit facility expiring in February 2005. On December
1, 1998, the credit facility was amended to release the collateral and the
credit facility became unsecured. The credit facility had an outstanding balance
of $230 million at December 31, 1998. Borrowings under the credit facility were
primarily used to fund the Partnership's investment in Plantation Pipe Line
Company in June 1999. During the first nine months of 1999, the weighted average
interest rate on the credit facility was approximately 6.04% per annum. On
September 29, 1999, the $325 million credit facility was replaced with a $300
million unsecured five-year credit facility expiring in September 2004 and a
$300 million unsecured 364-day credit facility. The outstanding balance under
the five-year credit facility was $135 million at September 30, 1999. In
September 1999, the Partnership recorded an extraordinary charge of $2.6 million
related to the retirement of the $325 million credit facility.
On January 29, 1999, the Partnership closed a public offering of $250
million in principal amount of 6.30% Senior Notes due February 1, 2009 ("Notes")
at a price to the public of 99.67% per Note. In the offering, the Partnership
received proceeds, net of underwriting discounts and commissions, of
approximately $248 million. The proceeds were used to pay the outstanding
balance on the Credit Facility and for working capital and other Partnership
purposes. In connection with the refinancing of the Partnership's credit
facility on September 29, 1999, the Partnership's subsidiaries were released
from their guarantees of the credit facility. As a result, the subsidiary
guarantees under the Notes were also automatically released in accordance with
the terms of the Notes. At September 30, 1999, the unamortized Note liability
balance was approximately $249.2 million.
At September 30, 1999, the outstanding balance under SFPP's Series F notes
was $244.0 million. The annual interest rate on the Series F notes is 10.70%,
the maturity is December 2004, and interest is payable semiannually in June and
December. The Series F notes are payable in annual installments of $31.5 million
in 1999, $32.5 million in 2000, $39.5 million in 2001, $42.5 million in 2002,
and $37.0 million in 2003. The Series F notes may also be prepaid beginning in
December 1999 in full or in part at a price equal to par plus, in certain
circumstances, a premium. The Series F notes are secured by mortgages on
substantially all of the properties of SFPP (the "Mortgaged Property"). The
Series F notes contain certain covenants limiting the amount of additional debt
or equity that may be issued and limiting the amount of cash distributions,
investments, and property dispositions.
Page 10 of 26
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At September 30, 1999, the outstanding balance under SFPP's bank facility
was $111.0 million. The bank credit facility provides for borrowings of up to
$175 million due in August 2000 and interest, at a short-term Eurodollar rate,
payable quarterly. This bank credit facility is used primarily to fund the
Series F payments when due. Borrowings under this facility are also secured by
the Mortgaged Property and are generally subject to the same terms and
conditions as the Series F notes. At September 30, 1999, the interest rate on
the credit facility debt was 5.7325%.
OLP-B's $23.7 million principal amount of tax-exempt bonds due 2024 were
issued by the Jackson-Union Counties Regional Port District. Such bonds bear
interest at a weekly floating market rate. During the first nine months of 1999,
the weighted average interest rate on these bonds was approximately 3.23% per
annum.
7. Partners' Capital
At December 31, 1997, the Partnership had 14,111,200 units outstanding.
From March 6 until June 4, 1998, the Partnership issued 26,548,879 units in
connection with the acquisition of SFPP, and on June 12, 1998, the Partnership
issued 6,070,578 units in a public offering. On August 13, 1998, the Partnership
issued 2,121,033 units to acquire Hall-Buck Marine, Inc. At September 30, 1998,
the Partnership had 48,851,690 units outstanding.
At December 31, 1998, the Partnership had 48,821,690 units outstanding. On
January 21, 1999, and January 29, 1999, the Partnership repurchased and
immediately cancelled 4,000 and 2,000 units, respectively. On August 30, 1999,
the Partnership issued 600 units associated with unit option exercises, and on
September 10, 1999, the Partnership issued 510,147 units in connection with the
acquisition of net assets from Primary Corporation. At September 30, 1999, the
Partnership had 49,326,437 units outstanding.
These units represent the limited partners' interest and an effective 98%
economic interest in the Partnership, exclusive of the general partner's
incentive distribution. The general partner interest represents an effective 2%
interest in the Partnership, excluding the general partner's incentive
distribution.
For the purposes of maintaining partner capital accounts, the partnership
agreement specifies that items of income and loss shall be allocated among the
partners in accordance with their respective percentage interests. Normal
allocations according to percentage interests are done only, however, after
giving effect to any priority income allocations in an amount equal to incentive
distributions allocated 100% to the general partner.
Incentive distributions allocated to the general partner are determined by
the amount quarterly distributions to unitholders exceed certain specified
target levels. The Partnership's cash distribution of $0.70 per unit paid on
August 13, 1999 for the second quarter of 1999 required an incentive
distribution to the General Partner of $13,083,847. The Partnership's cash
distribution of $0.63 per unit paid on August 14, 1998 for the second quarter of
1998 required an incentive distribution to the general partner of $9,352,984.
The increased incentive distribution paid for the second quarter of 1999 over
the distribution paid for the second quarter of 1998 reflects the increase in
amount distributed per unit as well as the issuance of additional units.
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The Partnership's declared distribution for the third quarter of 1999 of
$0.725 per unit will result in an incentive distribution to the general partner
of $14,416,532. This compares to the Partnership's cash distribution of $0.63
per unit and incentive distribution to the general partner of $9,777,501 for the
third quarter of 1998. The increased incentive distribution paid for the third
quarter of 1999 over the distribution paid for the third quarter of 1998
reflects the increase in amount distributed per unit as well as the issuance of
additional units.
8. Reportable Segments
The Partnership has adopted SFAS No. 131 -- "Disclosures About Segments of
an Enterprise and Related Information". The Partnership competes in three
reportable business segments: Pacific Operations, Mid-Continent Operations and
Bulk Terminals. The Partnership evaluates performance based on segment earnings,
which excludes general and administrative expenses, third-party debt costs,
unallocable non-affiliated interest income and expense, and minority interest.
The Partnership's reportable segments are strategic business units that offer
different products and services. They are managed separately because each
segment involves different products and marketing strategies.
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Financial information by segment follows (in thousands):
Three Months Nine Months
Ended Sept. 30, Ended Sept. 30,
1999 1998 1999 1998
---------- ---------- ---------- ----------
Revenues
Pacific Operations $ 65,200 $ 68,605 $ 191,063 $ 154,864
Mid-Continent Operations 11,075 8,490 29,898 26,846
Bulk Terminals 28,113 24,805 86,409 38,975
========== ========== ========== ==========
Total Segments $ 104,388 $ 101,900 $ 307,370 $ 220,685
========== ========== ========== ==========
Operating expenses
Pacific Operations $ 9,340 $ 14,178 $ 29,141 $ 31,738
Mid-Continent Operations 6,485 3,842 13,674 10,370
Bulk Terminals 16,082 16,232 48,998 22,933
========== ========== ========== ==========
Total Segments $ 31,907 $ 34,252 $ 91,813 $ 65,041
========== ========== ========== ==========
Operating income
Pacific Operations $ 45,503 $ 44,569 $ 130,768 $ 99,755
Mid-Continent Operations 784 2,164 6,045 9,213
Bulk Terminals 9,088 6,679 28,870 13,064
========== ========== ========== ==========
Total Segments $ 55,375 $ 53,412 $ 165,683 $ 122,032
========== ========== ========== ==========
Earnings from equity investments
Pacific Operations $ 393 $ 323 $ 1,246 $ 498
Mid-Continent Operations 13,005 5,487 29,836 15,919
Bulk Terminals 2 - 19 -
========== ========== ========== ==========
Total Segments $ 13,400 $ 5,810 $ 31,101 $ 16,417
========== ========== ========== ==========
Segment earnings
Pacific Operations $ 45,580 $ 42,959 $ 133,609 $ 95,847
Mid-Continent Operations 24,481 7,681 43,620 24,971
Bulk Terminals 8,092 6,242 27,279 12,601
========== ========== ========== ==========
Total Segments (1) $ 78,153 $ 56,882 $ 204,508 $ 133,419
========== ========== ========== ==========
Sept. 30, Dec. 31,
Assets at 1999 1998
---------- -----------
Pacific Operations $ 1,586,568 $ 1,549,523
Mid-Continent Operations 515,233 381,881
Bulk Terminals 191,257 186,298
=========== ===========
Total Segments (2) $ 2,293,058 $ 2,117,702
=========== ===========
Page 13 of 26
<PAGE>
(1) The following reconciles segment earnings to net income.
Three Months Nine Months
Ended Sept. 30, Ended Sept. 30,
1999 1998 1999 1998
---------- ---------- ---------- ----------
Segment earnings $ 78,153 $ 56,882 $ 204,508 $ 133,419
Interest and corporate
administrative expenses(a) (23,005) (21,766) (65,178) (54,026)
Extraordinary charge (2,595) - (2,595) (13,611)
========== ========== ========== ==========
Net Income $ 52,553 $ 35,116 $ 136,735 $ 65,782
========== ========== ========== ==========
(a) Includes interest and debt expense, general and administrative expenses,
minority interest expense and other insignificant items.
(2) The following reconciles segment assets to consolidated assets.
Sept. 30, Dec. 31,
Assets at 1999 1998
---------- ----------
Segment assets $ 2,293,058 $ 2,117,702
Corporate assets (a) 33,147 34,570
========== ==========
Total assets $ 2,326,205 $ 2,152,272
========== ==========
(a) Includes cash, cash equivalents and certain unallocable deferred charges.
9. Subsequent Events
On October 7, 1999, Kinder Morgan Inc. ("KMI") completed its previously
announced merger with K N Energy, Inc. The combined company has been renamed
Kinder Morgan, Inc. and trades under the New York Stock Exchange symbol
"KMI". Kinder Morgan Inc. is the sole stockholder of Kinder Morgan G.P., Inc.,
the Partnership's general partner.
In the combination, K N Energy, Inc. issued an aggregate of approximately
41.5 million shares of K N Energy, Inc. stock to the stockholders of KMI in
exchange for all of the outstanding shares of KMI. The combined entity
(including the Partnership) has an enterprise value of approximately $10.0
billion.
Page 14 of 26
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Results of Operations
Third Quarter 1999 Compared With Third Quarter 1998
For the third consecutive quarter, the Partnership reported record
quarterly revenues and net earnings. Total net income for the Partnership was
$52.6 million ($0.77 per unit) in the third quarter of 1999 compared with $35.1
million ($0.52 per unit) in the third quarter of 1998. The 1999 third quarter
results included an extraordinary charge of $2.6 million related to the
write-off of unamortized debt issue costs primarily related to the refinancing
of the Partnership's bank credit facility in September 1999. Third quarter 1999
results also included a benefit of $14.1 million related to the sale of the
Partnership's interest in the Mont Belvieu fractionation facility, partially
offset by special non-recurring charges (see Notes 3 and 6 to the Consolidated
Financial Statements).
There was income growth across all business segments reflecting ongoing
strength in the Partnership's pipeline operations, terminal operations, and
equity investments. Total Partnership revenues increased 2% to $104.4 million in
the third quarter of 1999 compared with $101.9 million in the third quarter of
1998. Operating expenses, excluding depreciation, amortization, and taxes, other
than income taxes, decreased $2.4 million (7%) to $31.9 million in the third
quarter of 1999 versus $34.3 million in the same prior year period. Total
Partnership operating income for the three months ended September 30, 1999 was
$47.4 million compared with $41.6 million for the same quarter last year. Third
quarter earnings from equity investments were $13.4 million in 1999 versus $5.8
million in 1998. The $7.6 million (131%) increase in equity earnings was mainly
due to income realized on the Partnership's investments in Plantation Pipe Line
Company, acquired in September 1998 and June 1999.
The Pacific Operations reported a 6% increase in segment earnings to $45.6
million in the third quarter of 1999 compared with earnings of $43.0 million in
the third quarter of 1998. Segment revenues totaled $65.2 million in the third
quarter of 1999 versus $68.6 million in the third quarter of 1998. The change in
revenue reflects a 2.8% increase in mainline delivery volumes offset by a
reduction in pipeline tariff rates. The decline in revenues was more than offset
by lower quarterly operating and maintenance expenses. Total operating expenses
fell to $9.3 million in the third quarter of 1999 versus $14.2 million in the
same year-ago period. The decrease reflects the improvements made to reduce
day-to-day operating and maintenance charges and an increase in product gains.
As a result of the decrease in operating expenses, operating income totaled
$45.5 million in the third quarter of 1999, an increase of 2% over the $44.6
million reported in the same period last year. In the third quarter of 1999, the
segment also benefited from reductions in expense accruals made for the FERC
rate case reserve as a result of the FERC's opinion relating to an outstanding
rate case dispute.
The Mid-Continent Operations reported segment earnings of $24.5 million in
the third quarter of 1999 versus $7.7 million in the comparable period of 1998.
Segment revenues and operating expenses were $11.1 million and $6.5 million,
respectively, in the third quarter of 1999. These amounts compare to revenues
and operating expenses of $8.5 million and $3.8 million, respectively, in the
third quarter of 1998. The increases in revenues and expenses in the third
quarter of 1999 over the previous year resulted primarily from the inclusion of
transmix operations acquired in September 1999 from Primary Corporation. Segment
operating income totaled $0.8 million in third quarter
Page 15 of 26
<PAGE>
1999 versus $2.2 million in third quarter 1998. The decrease in operating income
was due to higher amortization expense associated with the investment in
Plantation Pipe Line Company. The segment's earnings from equity investments
increased to $13.0 million in the third quarter of 1999 versus $5.5 million in
the same period last year. The $7.5 million increase was driven by higher
returns from the segment's investments in Plantation Pipe Line Company and the
Mont Belvieu fractionation facility. In addition, third quarter 1999 results
benefited from the $14.1 million gain on the sale of the Partnership's interest
in the Mont Belvieu fractionation facility to Enterprise Products Partners L.P.
The Bulk Terminals segment reported a 31% increase in net earnings in the
third quarter of 1999 compared to the same period in 1998. The segment reported
net earnings of $8.1 million on revenues of $28.1 million in the third quarter
of 1999. In the same 1998 period, the segment earned $6.2 million on revenues of
$24.8 million. The $3.3 million increase in operating revenues in third quarter
1999 over third quarter 1998 was primarily driven by higher volumes from bulk
terminal operations, somewhat offset by lower coal marketing revenues. The 1999
increases in segment earnings and revenues also reflect the Partnership's
acquisitions of the Pier IX and Shipyard River Terminals in December 1998.
Combined operating expenses remained relatively flat at $16.1 million in the
third quarter of 1999 and $16.2 million in the third quarter of 1998. An
increase in transferred volumes resulted in higher operating, maintenance and
power expenses, but the increase was more than offset by lower purchase/sale
contracts from coal marketing activities. Operating income for the segment was
$9.1 million in third quarter 1999 versus $6.7 million in the same year-earlier
period.
Operating statistics for the third quarter are as follows:
Third Quarter
1999 1998
----------------
Pacific Operations
Mainline Delivery Volumes (MMBbls) 97.3 94.8
Other Delivery Volumes (MMBbls) 2.3 4.6
Average Tariff ($/Bbl) $0.52 $0.55
Mid-Continent Operations *
Delivery Volumes (MMBbls) 11.8 10.4
Average Tariff ($/Bbl) $0.82 $0.94
Bulk Terminals
Transport Volumes (MM Tons) 9.7 8.8
------------------------------------------------------------------------
* North System and Cypress only.
Earnings contribution by business segment for the third quarter is as follows:
Page 16 of 26
<PAGE>
Earnings Contribution by Business Segment**
(Unaudited)
(In Thousands)
Third Quarter
1999 1998
----------------------
Pacific Operations $45,580 $42,959
Mid-Continent Operations $24,481 $7,681
Bulk Terminals $ 8,092 $6,242
------------------------------------------------------------------------
** Excludes general and administrative expenses, debt costs, and minority
interest. Includes the results of acquired operations from the date of
acquisition.
Income items not attributable to any segment include general and
administrative expenses, unallocable interest income and expense and minority
interest expenses. General and administrative expenses were $7.9 million in the
third quarter of 1999 compared with $11.8 million in the same period of 1998.
Unallocated interest expense, net of interest income, was $14.2 million in the
third quarter of 1999 compared with $9.5 million in the same year-earlier
period. The increase was due to higher average debt balances during the third
quarter of 1999. The Partnership reported an increase in income tax expense of
$3.0 million in the third quarter of 1999 compared to last year's third quarter.
The increase represents the Partnership's higher share of income tax expense
from its investment in Plantation Pipe Line Company.
Nine months Ended Sept. 30, 1999 Compared With Nine Months Ended Sept. 30,
1998
For the nine months ended September 30, 1999, the Partnership reported net
earnings of $136.7 million ($1.95 per unit). This amount compares with $65.8
million ($1.17 per unit) reported as net earnings for the first nine months of
1998. Included in the net earnings for both periods were extraordinary charges
associated with debt refinancing transactions in the amount of $2.6 million in
1999 and $13.6 million in 1998.
Overall Partnership revenues increased 39% in the nine-month period ended
September 30, 1999 when compared to the same period last year. Revenues totaled
$307.4 million for the first nine months of 1999 versus $220.7 million for the
same 1998 period. There was revenue growth across all business segments, but the
increase was primarily driven by acquisitions within the Bulk Terminals segment
in the last half of 1998 and by continued strong demand for gasoline, jet fuel
and diesel fuel transported by the Partnership's Pacific Operations segment. As
volumes increased across all three operating segments, combined operating
expenses, excluding depreciation, amortization, and taxes, other than income
taxes, increased to $91.8 million for the first nine months of 1999 versus $65.0
million for the same nine months of 1998. The Partnership's operating income
totaled $141.0 million for the nine months ended September 30, 1999 versus $96.1
million in the same period of 1998. Earnings from equity investments in the
first nine months of 1999 increased 90% over the same period last year. The
Partnership's investments in Plantation Pipe Line Company increased equity
earnings to $31.1 million in the nine-month 1999 period versus $16.4 million in
the nine-month 1998 period.
Page 17 of 26
<PAGE>
The Pacific Operations reported segment earnings of $133.6 million on
operating revenues of $191.1 million for the first nine months of 1999. Segment
earnings and operating revenues for the first nine months of 1998 were $95.8
million and $154.9 million, respectively. The 1999 results reflect the inclusion
of a full nine months of operations and the continued strong demand for refined
products in the Partnership's West Coast markets. Segment operating expenses
decreased $2.6 million (8%) to $29.1 million in the first nine months of 1999
versus $31.7 million for the first nine months of 1998. Nine-month earnings from
the segment's equity investment in the Colton transmix processing facility
increased $0.7 million (150%) to $1.2 million in 1999 from the comparable period
in 1998. The increase was the result of higher processing volumes and the
inclusion of a full nine months of earnings in 1999. Additionally, the segment
benefited from a $6.0 million decrease in other expenses in the first nine
months of 1999, when compared to the same period of last year. This decrease was
mainly due to lower 1999 expense accruals made for the FERC rate case reserve as
a result of the FERC's opinion relating to an outstanding rate case dispute.
Segment net earnings for the Partnership's Mid-Continent Operations segment
were $43.6 million for the nine months ended September 30, 1999. This amount
compares with net earnings of $25.0 million for the nine months ended September
30, 1998. Segment revenues increased to $29.9 million in the first nine-month
period of 1999 from $26.8 million in the same 1998 period. The 12% increase in
segment revenues in 1999 over 1998 was primarily due to the inclusion of
revenues produced from the transmix processing facilities acquired in September
1999, and to a 9% increase in volume throughput on the Partnership's North
System pipeline. The addition of transmix volumes and the higher volumes on the
segment's pipelines resulted in an increase in combined purchase costs,
operating and maintenance expenses, and fuel and power expenses. Total operating
expenses for the nine months ended September 30, 1999 were $13.7 million versus
expenses of $10.4 million for the same prior year period. Segment operating
income was $6.0 million and $9.2 million for the nine-month periods ended
September 30, 1999 and 1998, respectively. Earnings from equity investments
totaled $29.8 million in the first nine months of 1999 compared with earnings of
$15.9 million in the same period of 1998. The $13.9 million increase in equity
earnings in 1999 over 1998 was the result of returns on the Partnership's
investment in Plantation Pipe Line Company, partially offset by lower nine-month
earnings from its investment in the Mont Belvieu fractionation facility. The
segment also benefited from the $14.1 million gain on the sale of the
Partnership's interest in the Mont Belvieu fractionation facility in September
1999.
The Bulk Terminals segment reported earnings of $27.3 million on operating
revenues of $86.4 million for the first nine months of 1999. Segment earnings
and operating revenues for the first nine months of 1998 were $12.6 million and
$39.0 million, respectively. The segment reported operating expenses of $49.0
million and operating income of $28.9 million for the first nine months of 1999
versus operating expenses of $22.9 million and operating income of $13.1 million
for the first nine months of 1998. The 1999 financial results included a full
nine months of operations for Kinder Morgan Bulk Terminals, Inc., Pier IX
Terminal and Shipyard River Terminal, all acquired in the last half of 1998.
Excluding these acquisitions, operating income increased $1.0 million in the
first nine months of 1999 compared to the 1998 period. The increase was
primarily due to a 20% increase in coal volumes transferred, partially offset by
a 5% decrease in average coal tariff rates and lower earnings from the
Partnership's coal marketing activities.
Page 18 of 26
<PAGE>
Operating statistics for the first nine months of 1999 and 1998 are as follows:
Nine Months Ended Sept. 30,
1999 1998
-----------------
Pacific Operations
Mainline Delivery Volumes (MMBbls) 278.4 215.9
Other Delivery Volumes (MMBbls) 7.3 12.8
Average Tariff ($/Bbl) $0.54 $0.56
Mid-Continent Operations *
Delivery Volumes (MMBbls) 35.5 32.7
Average Tariff ($/Bbl) $0.88 $0.91
Bulk Terminals
Transport Volumes (MM Tons) 29.5 14.9
------------------------------------------------------------------------
* North System and Cypress only.
Earnings contribution by business segment for the first nine
months of 1999 and 1998 is as follows:
Earnings Contribution by Business Segment**
(Unaudited)
(In Thousands)
Nine Months Ended Sept. 30,
1999 1998
-------------------
Pacific Operations $133,609 $95,847
Mid-Continent Operations $43,620 $24,971
Bulk Terminals $27,279 $12,601
------------------------------------------------------------------------
** Excludes general and administrative expenses, debt costs, and minority
interest. Includes the results of acquired operations from the date of
acquisition.
Income items not attributable to any segment include general and
administrative expenses, unallocable interest income and expense and minority
interest expenses. Total Partnership general and administrative expenses
decreased 5% in the first nine months of 1999, when compared to the same period
last year. Administrative expenses totaled $24.7 million and $25.9 million for
the nine-month periods ended September 30, 1999 and 1998, respectively. Higher
average debt balances during the first nine months of 1999 compared to the same
1998 period resulted in greater interest expense charges, net of interest
income. Total unallocated Partnership interest expense, net of interest income,
was $38.2 million for the first nine months of 1999 versus $27.2 million for the
comparable 1998 period. Minority interest expense increased to $2.3 million in
the nine-month period ended September 30, 1999 compared to $0.9 million in the
same period of 1998. The increase was the result of earnings attributable to the
Pacific Operations as
Page 19 of 26
<PAGE>
well as higher overall Partnership income. Due to the acquisition of Kinder
Morgan Bulk Terminals, Inc. and the Partnership's equity investments in
Plantation Pipe Line Company, the Partnership reported total income tax expense
of $6.8 million for the nine-month period ended September 30, 1999. The
Partnership reported $0.2 million of income tax expense for the same nine-month
period of 1998.
Financial Condition
The Partnership's primary cash requirements, in addition to normal
operating expenses, are debt service, sustaining capital expenditures,
discretionary capital expenditures and quarterly distributions to partners. In
addition to utilizing cash generated from operations, the Partnership could meet
its cash requirements through borrowings under its credit facilities, issuing
additional long-term notes or issuing additional units. The Partnership expects
to fund future cash distributions and sustaining capital expenditures with
existing cash and cash flows from operating activities. Expansion capital
expenditures are expected to be funded through additional Partnership borrowings
or issuance of additional units. Interest payments are expected to be paid from
cash flows from operating activities and debt principal payments will be met by
additional borrowings as they become due or by issuance of additional units.
Cash Provided by Operating Activities
Net cash provided by operating activities was $144.8 million for the nine
months ended September 30, 1999, versus $105.2 million in the comparable period
of 1998. The period-to-period increase of $39.6 million in cash flow from
operations was primarily the result of higher net earnings, including
extraordinary charges, distributions from equity investments and non-cash
depreciation and amortization charges. Higher earnings and depreciation charges,
chiefly due to business acquisitions made during 1998, increased $59.9 million
and $11.9 million, respectively, in the first nine months of 1999 when compared
with the same period in 1998. Increased distributions from the Partnership's
investments in Plantation Pipe Line Company and Shell CO2 Company were the
primary factors for the $12.8 million increase in equity investment
distributions. The overall increase in cash provided by operating activities was
partially offset by higher earnings from equity investments, the gain on the
sale of the Mont Belvieu fractionation facility and lower cash inflows from
working capital items and non-current assets and liabilities. The increase in
earnings from equity investments resulted primarily from income generated from
the Partnership's investment in Plantation Pipe Line Company. The lower cash
inflows from working capital items reflect an increase in trade receivable
balances, partially offset by increases in accrued interest liabilities.
Cash Used in Investing Activities
Net cash used in investing activities was $157.8 million for the nine month
period ended September 30, 1999, compared to $234.4 million in the comparable
1998 period. The $76.6 million net decrease is primarily attributable to changes
in cash flows resulting from net acquisitions and disposals of assets and equity
investments. The nine month period ended September 30, 1999 included the $14.0
million used for the September 1999 acquisition of the Mid-Continent Operations'
transmix processing facilities and $124.2 million used for the Partnership's
June 1999 investment in Plantation Pipe Line Company. The nine month period
ended September 30, 1998 included $74.7 million used for the March 1998
acquisition of the Pacific Operations and $135.0 million used for the 1998
acquisitions of equity
Page 20 of 26
<PAGE>
investments in Shell CO2 Company and Plantation Pipe Line Company. Proceeds from
the sale of investments, property, plant and equipment for the first nine months
of 1999 include the $41.8 million received for the Partnership's interest in the
Mont Belvieu fractionation facility. The net decrease in funds utilized in
investing activities was somewhat offset by increased capital expenditures
driven primarily by continued investment in the Partnership's Pacific
Operations. All funds classified as additions to property, plant and equipment
include both expansion and maintenance projects.
Cash Provided by Financing Activities
Net Cash provided by financing activities amounted to $11.0 million for the
nine months ended September 30, 1999. This decrease of $156.8 million from the
comparable 1998 period was mainly the result of $212.3 million in proceeds
received from the June 1998 public offering of Partnership units and a
period-to-period increase of $59.6 million in distributions to partners. The
overall decrease in cash provided by financing activities was partially offset
by an increase of $114.4 million from overall debt financing activities.
Distributions to all partners increased to $139.6 million in the nine month
period ended September 30, 1999, compared to $80.0 million in the comparable
1998 period. The increase in distributions was due to an increase in the per
unit distribution paid, the number of units outstanding and the general partner
incentive distributions which resulted from increased distributions to
unitholders. The Partnership paid distributions of $2.05 per unit in the first
nine months of 1999 compared with $1.755 per unit in the first nine months of
1998.
The 17% increase in paid distributions per unit resulted from favorable
operating results in 1999. On October 13, 1999, the Partnership declared a
distribution of $0.725 per unit for the third quarter of 1999. The Partnership
believes that future operating results will continue to support similar levels
of quarterly cash distributions, however, no assurance can be given that future
distributions will continue at such levels.
The partnership agreement requires the Partnership to distribute 100% of
"Available Cash" (as defined in the partnership agreement) to the Partners
within 45 days following the end of each calendar quarter in accordance with
their respective percentage interests. Available Cash consists generally of all
cash receipts of the Partnership and its operating partnerships, less cash
disbursements and net additions to reserves and amounts payable to the minority
interest owner, the former Santa Fe general partner, in respect of its 0.5%
interest in SFPP.
The Partnership's debt instruments generally require the Partnership to
maintain a reserve for future debt service obligations. The purpose of the
reserve is to lessen differences in the amount of Available Cash from quarter to
quarter due to the timing of required principal and interest payments (which may
only be required on a semi-annual or annual basis) and to provide a source of
funds to make such payments. The Partnership's debt instruments generally
require the Partnership to set aside each quarter a portion of the principal and
interest payments due in the next six to twelve months.
Available Cash of the Partnership generally is distributed 98% to the
limited partners (including the approximate 2% limited partner interest of the
general partner) and 2% to the general partner. This general requirement is
modified to provide for incentive distributions to be paid to the general
Page 21 of 26
<PAGE>
partner in the event that quarterly distributions to unitholders exceed certain
specified targets.
In general, Available Cash for each quarter is distributed, first, 98% to
the limited partners and 2% to the general partner until the limited partners
have received a total of $0.3025 per unit for such quarter, second, 85% to the
limited partners and 15% to the general partner until the limited partners have
received a total of $0.3575 per unit for such quarter, third, 75% to the limited
partners and 25% to the general partner until the limited partners have received
a total of $0.4675 per unit for such quarter, and fourth, thereafter 50% to the
limited partners and 50% to the general partner. Incentive distributions are
generally defined as all cash distributions to the general partner that are in
excess of 2% of the aggregate amount of cash being distributed. The general
partner's incentive distribution declared by the Partnership for the third
quarter of 1999 was $14.4 million, while the incentive distribution paid during
the first nine months of 1999 and 1998 were $36.9 million and $14.1 million,
respectively.
Year 2000
The Partnership is currently implementing a five phase program to achieve
Year 2000 compliance. The five steps are inventory, assessment, testing,
remediation, and contingency planning. The Partnership is evaluating both
information technology systems ("IT") and non-IT systems such as those that
include embedded technology.
The Partnership has completed the system inventory phase. In the system
inventory phase, all hardware and critical software was inventoried and a
database of systems that needed further assessment was created.
The Partnership has completed the assessment phase. In the assessment
phase, specific Year 2000 issues and solutions were identified.
The Partnership has substantially completed the system testing phase. In
the system testing phase, real world tests on critical systems are run to ensure
that they will operate properly during and after the Year 2000. The Partnership
anticipates completing the system testing phase by the end of November 1999.
The Partnership has begun the remediation phase. In the remediation phase,
problems that arise in the Partnership's assessment and system testing phases
are corrected. The Partnership anticipates completing the remediation of
critical systems by mid-November 1999, and all other remediation by the end of
November 1999.
The Partnership has begun the contingency planning phase. The Partnership
currently has plans in place for non-Year 2000 related contingencies and will
modify these plans to address any specific contingencies related to the Year
2000 problem. Initial drills of contingency operations were held in the first
quarter of 1999. Refinement of contingency plans and employee training will
continue throughout the year and be completed in the fourth quarter of 1999.
Other than power and communication systems, the Partnership does not
believe it has material exposure to third parties' failures to remediate the
Year 2000 problem. The Partnership has not sought and does not intend to seek
information from material suppliers, customers, or service providers to
determine the exact extent to which the Partnership would be effected by
Page 22 of 26
<PAGE>
third parties' failures to remediate the Year 2000 problem.
While the Partnership has budgeted sufficient funds to address the Year
2000 problem, the Partnership does not believe that any material expenditures
will be required to address the Year 2000 problem as it relates to existing
systems. However, uncertainty exists concerning the potential costs and effects
associated with any Year 2000 compliance. Therefore, the Partnership cannot give
any assurance that unexpected Year 2000 compliance problems of either the
Partnership or its vendors, customers, and service providers would not
materially and adversely affect the Partnership's business, financial condition
or operating results.
Information Regarding Forward Looking Statements
This filing includes forward looking statements within the meaning of
Section 27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934. These forward looking statements are identified as any
statement that does not relate strictly to historical or current facts. They use
words such as "anticipate," "continue," "estimate," "expect," "may," "will," or
other similar words. These statements discuss future expectations or contain
projections. Specific factors which could cause actual results to differ from
those in the forward looking statements, include:
o price trends and overall demand for natural gas liquids, refined
petroleum products, carbon dioxide, coal and other bulk materials in
the United States. Economic activity, weather, alternative energy
sources, conservation and technological advances may affect price
trends and demand;
o if the Federal Energy Regulatory Commission or the California Public
Utilities Commission changes the Partnership's tariff rates;
o the Partnership's ability to integrate any acquired operations into
its existing operations;
o if railroads experience difficulties or delays in delivering products
to the bulk terminals;
o the Partnership's ability to successfully identify and close strategic
acquisitions and make cost saving changes in operations;
o shut-downs or cutbacks at major refineries, petrochemical plants,
utilities, military bases or other businesses that use the
Partnership's services;
o the condition of the capital markets and equity markets in the United
States; and
o the political and economic stability of the oil producing nations of
the world.
See Items 1 and 2 "Business and Properties - Risk Factors" of the Annual
Report filed on Form 10-K with the Securities and Exchange Commission on March
15, 1999 for a more detailed description of these and other factors that may
affect the forward looking statements.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
None.
Page 23 of 26
<PAGE>
PART II. OTHER INFORMATION
KINDER MORGAN ENERGY PARTNERS, L.P. AND SUBSIDIARIES
ITEM 1. Legal Proceedings
See Part I, Item 1, Note 4 to Consolidated Financial Statements entitled
"Litigation" which is incorporated herein by reference.
ITEM 5. Other Information
None.
ITEM 6. Exhibits and Reports on Form 8-K
(a) Exhibits
*3.1 - Second Amendment to Amended and Restated Agreement of Limited
Partnership dated as of February 14, 1997 (filed as Exhibit 3.1 to
Amendment No. 1 to Kinder Morgan Energy Partners, L.P. Registration
Statement on Form S-4, file No. 333-46709, filed on April 13, 1999)
*4.1 - Specimen Certificate representing Common Units (filed as Exhibit 4.1
to Amendment No. 1 to Kinder Morgan Energy Partners, L.P. Registration
Statement on Form S-4, file No. 333-44519, filed on February 4, 1998)
*4.2 - Indenture dated as of January 29, 1999 among the Partnership, the
guarantors listed on the signature page thereto and U.S. Trust Company
of Texas, N.A., as trustee, relating to Senior Debt Securities (filed as
Exhibit 4.1 to the Partnership's Form 8-K dated January 29, 1999 (the
"January 29, 1999 Form 8-K"))
*4.3 - First Supplemental Indenture dated as of January 29, 1999 among the
Partnership, the subsidiary guarantors listed on the signature page
thereto and U.S. Trust Company of Texas, N.A., as trustee, relating to
$250,000,000 of 6.30% Senior Notes due February 1, 2009 (filed as
Exhibit 4.2 to the January 29, 1999 Form 8-K)
4.4 - Second Supplemental Indenture dated as of September 30, 1999 among the
Partnership and U.S. Trust Company of Texas, N.A., as trustee,
relating to release of subsidiary guarantors under the $250,000,000 of
6.30% Senior Notes due February 1, 2009
4.5 - Credit Agreement dated as of September 29, 1999 among the Partnership,
Kinder Morgan Operating L.P. "B", the lenders party thereto, First
Union National Bank, as administrative agent, issuing bank and
swingline lender, Bank of America, N.A., as syndication agent, and
Societe Generale, as documentation agent
4.6 - Credit Agreement dated as of September 29, 1999 among the Partnership,
the lenders party thereto, First Union National Bank, as
administrative agent, Bank of America, N.A., as syndication agent, and
Societe Generale, as documentation agent
*4.7 - First Mortgage Note Agreement dated December 8, 1988 among Southern
Pacific Pipe Lines Partnership, L.P. (now known as SFPP, L.P.) and the
Purchasers listed on Schedule A (a conformed composite of 54 separate
agreements, identical except for signatures) (filed as Exhibit 4.2 to
Form 10-K for Santa Fe Pacific Pipeline Partners, L.P. for 1988, file
no. 001-10066 ("Santa Fe 1988 Form 10-K"))
Page 24 of 26
<PAGE>
*4.8 - Consent and Amendment dated as of December 19, 1997 between the
noteholders and SFPP, L.P. (a conformed composite of the separate
agreements with each noteholder, identical except for signatures)
(Exhibit 4.14.1 to the Partnership's Form 10-K for 1997)
*4.9 - Deed of Trust, Security Agreement and Fixture Filing, dated December
8, 1988, between SFPP, L.P., its general partner, Chicago Title
Insurance Company and Security Pacific National Bank (Exhibit 4.3 to
Santa Fe 1988 Form 10-K)
*4.10 - Trust Agreement dated December 19, 1988, between SFPP, L.P., its
general partner and Security Pacific National Bank (Exhibit 4.4 to Santa
Fe 1988 Form 10-K)
*4.11 - Amended and Restated Credit Agreement dated as of August 11, 1997
among SFPP, L.P., Bank of America National Trust and Savings
Association, as agent, Texas Commerce Bank National Association, as
syndication agent, Bank of Montreal, as documentation agent, BancAmerica
Securities, Inc., as arranger, and the lenders that are signatories
thereto. As the maximum allowable borrowings under this facility do not
exceed 10% of the Registrant's total assets, this instrument is not
filed as an exhibit to this Report, however, the Registrant hereby
agrees to furnish a copy of such instrument to the Securities and
Exchange Commission upon request.
10.1 - Fourth Amendment to Credit Agreement, dated as of August 13, 1999,
among Kinder Morgan, Inc. and First Union National Bank
27 - Financial Data Schedule for Kinder Morgan Energy Partners, L.P.
*Incorporated by reference.
(b) Reports on Form 8-K.
None.
Page 25 of 26
<PAGE>
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.
KINDER MORGAN ENERGY PARTNERS, L.P.
(A Delaware Limited Partnership)
By: KINDER MORGAN G.P., Inc.
as General Partner
By: /s/ David G. Dehaemers, Jr.
------------------------------
David G. Dehaemers, Jr.
Vice President, CFO, Treasurer
and Assistant Secretary
Date: November 8, 1999
Page 26 of 26
KINDER MORGAN ENERGY PARTNERS, L.P.
Issuer
and
U.S. TRUST COMPANY OF TEXAS, N.A.
Trustee
------
SECOND SUPPLEMENTAL INDENTURE
Dated as of September 30, 1999
-----------
6.30% Senior Notes Due February 1, 2009
-----------
<PAGE>
SECOND SUPPLEMENTAL INDENTURE, dated as of September 30, 1999 (this
"Second Supplemental Indenture"), is between KINDER MORGAN ENERGY PARTNERS,
L.P., a Delaware limited partnership (the "Partnership"), having its principal
office at 1301 McKinney Street, Suite 3450, Houston, Texas 77010, and U.S. TRUST
COMPANY OF TEXAS, N.A., as trustee under the Indenture referred to below (the
"Trustee").
RECITALS OF THE PARTNERSHIP
WHEREAS, the Partnership and the Guarantors have heretofore executed
and delivered to the Trustee the Indenture, dated as of January 29, 1999,
providing for the issuance from time to time of one or more series of the
Partnership's unsecured senior debentures, notes or other evidence of
indebtedness (the "Securities"), as amended by that certain First Supplemental
Indenture dated January 29, 1999 relating to $250,000,000 of the Partnership's
6.30% Senior Notes Due February 1, 2009 (collectively, the "Indenture"); and
WHEREAS, Section 1406 of the Indenture provides that the Guarantee of
the Securities by a Guarantor will be automatically released if the Guarantor no
longer is a guarantor of any Funded Debt of the Partnership other than the
Securities; provided that no Default or Event of Default shall have occurred and
be continuing; and
WHEREAS, the Guarantors have been released from their guarantees of all
Funded Debt of the Partnership other than the Securities and no Default or Event
of Default has occurred and is continuing:
NOW, THEREFORE, THIS SECOND SUPPLEMENTAL INDENTURE WITNESSETH:
That in consideration of the premises, the Partnership covenants and
agrees with the Trustee, for the equal and proportionate benefit of all holders
of the Notes, as follows:
ARTICLE I
Release of Guarantors
SECTION 1.01 Pursuant to Section 1406 and Section 901(3) of the Indenture, the
Guarantors are released from their guarantees contained in Article XIV of the
Indenture and such Guarantees are no longer of any force or effect.
ARTICLE II
Miscellaneous
SECTION 2.01 The recitals contained herein shall be taken as the statements of
the Partnership, and the Trustee assumes no responsibility for their
correctness.
2
<PAGE>
The Trustee makes no representations as to the validity or sufficiency
of this Second Supplemental Indenture or the proper authorization or the due
execution hereof by the Partnership.
SECTION 2.02 Except as expressly supplemented and amended hereby, the Indenture
shall continue in full force and effect in accordance with the provisions
thereof, and the Indenture, as supplemented and amended hereby, is in all
respects hereby ratified and confirmed. This Second Supplemental Indenture and
all its provisions constitute an integral part of the Indenture in the manner
and to the extent herein and therein provided.
SECTION 2.03 This Second Supplemental Indenture shall be governed by and
construed in accordance with the laws of the State of New York.
SECTION 2.04 This instrument may be executed in any number of counterparts, each
of which shall be deemed to be an original, but all such counterparts shall
together constitute but one and the same instrument.
SECTION 2.05 Capitalized terms that are not defined in this Second Supplemental
Indenture shall have the meanings assigned to such terms in the Indenture.
3
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Second
Supplemental Indenture to be duly executed and their respective corporate seals
to be hereunto affixed and attested, all as of the day and year first above
written.
KINDER MORGAN ENERGY
PARTNERS, L.P.
By: Kinder Morgan G.P., Inc.
Its General Partner
By: /s/ David G. Dehaemers, Jr.
____________________________________
Name: David G. Dehaemers, Jr.
Title: Vice President
U.S. TRUST COMPANY OF TEXAS, N.A.,
As Trustee
By: /s/ Bill Barber
____________________________________
Name: Bill Barber
Title: Vice President
4
- -------------------------------------------------------------------------------
CREDIT AGREEMENT
dated as of
SEPTEMBER 29, 1999
AMONG
KINDER MORGAN ENERGY PARTNERS, L.P.,
as the Company,
KINDER MORGAN OPERATING L.P. "B",
as the Subsidiary Borrower,
THE LENDERS PARTY HERETO,
FIRST UNION NATIONAL BANK,
as the Administrative Agent,
the Issuing Bank and the Swingline Lender,
BANK OF AMERICA, N.A.,
as Syndication Agent,
and
SOCIETE GENERALE,
as Documentation Agent
-----------------------------------
FIRST UNION CAPITAL MARKETS CORP.
and
BANC OF AMERICA SECURITIES LLC,
as Co-Arrangers and Co-Bookrunners
<PAGE>
- --------------------------------------------------------------------------------
TABLE OF CONTENTS
Page
ARTICLE I. DEFINITIONS.........................................................2
SECTION 1.01 Defined Terms................................................2
SECTION 1.02 Classification of Loans and Borrowings......................22
SECTION 1.03 Accounting Terms; Changes in GAAP...........................22
SECTION 1.04 Interpretation..............................................23
ARTICLE II. THE CREDITS......................................................24
SECTION 2.01 Commitments.................................................24
SECTION 2.02 Loans and Borrowings........................................24
SECTION 2.03 Requests for Revolving Borrowings...........................25
SECTION 2.04 Competitive Bid Procedure...................................26
SECTION 2.05 Swingline Loans.............................................28
SECTION 2.06 Letters of Credit...........................................29
SECTION 2.07 Funding of Borrowings.......................................34
SECTION 2.08 Interest Elections..........................................35
SECTION 2.09 Termination and Reduction of Commitments....................36
SECTION 2.10 Repayment of Loans; Evidence of Debt........................37
SECTION 2.11 Prepayment of Loans.........................................38
SECTION 2.12 Fees........................................................39
SECTION 2.13 Interest....................................................40
SECTION 2.14 Alternate Rate of Interest..................................41
SECTION 2.15 Increased Costs.............................................42
SECTION 2.16 Break Funding Payments......................................43
SECTION 2.17 Taxes.......................................................44
SECTION 2.18 Payments Generally; Pro Rata Treatment;
Sharing of Set-offs.........................................45
SECTION 2.19 Mitigation Obligations; Replacement of Lenders..............46
SECTION 2.20 Extensions of Maturity Date; Removal of Lenders.............47
SECTION 2.21 Telephonic Notices..........................................49
ARTICLE III. CONDITIONS PRECEDENT.............................................49
SECTION 3.01 Conditions Precedent to the Initial Credit Event............49
SECTION 3.02 Conditions Precedent to All Credit Events...................51
SECTION 3.03 Conditions Precedent to Conversions.........................51
SECTION 3.04 Delivery of Documents.......................................51
ARTICLE IV. REPRESENTATIONS AND WARRANTIES...................................52
SECTION 4.01 Organization and Qualification..............................52
SECTION 4.02 Authorization, Validity, Etc................................52
SECTION 4.03 Governmental Consents, Etc..................................53
SECTION 4.04 Conflicting or Adverse Agreements or Restrictions...........53
SECTION 4.05 Properties..................................................53
SECTION 4.06 Litigation and Environmental Matters........................53
SECTION 4.07 Financial Statements........................................54
SECTION 4.08 Disclosure..................................................54
SECTION 4.09 Investment Company Act......................................55
Five-Year Facility
i
<PAGE>
SECTION 4.10 Public Utility Holding Company Act..........................55
SECTION 4.11 ERISA.......................................................55
SECTION 4.12 Tax Returns and Payments....................................55
SECTION 4.13 Compliance with Laws and Agreements.........................56
SECTION 4.14 Purpose of Loans............................................56
SECTION 4.15 Year 2000...................................................56
ARTICLE V. AFFIRMATIVE COVENANTS..............................................56
SECTION 5.01 Financial Statements and Other Information..................57
SECTION 5.02 Litigation..................................................59
SECTION 5.03 Existence, Conduct of Business..............................59
SECTION 5.04 Payment of Obligations......................................59
SECTION 5.05 Maintenance of Properties; Insurance........................60
SECTION 5.06 Books and Records; Inspection Rights........................60
SECTION 5.07 Compliance with Laws........................................60
SECTION 5.08 Use of Proceeds and Letters of Credit.......................60
SECTION 5.09 Further Assurances..........................................60
SECTION 5.10 Performance of Obligations..................................60
SECTION 5.11 Lines of Business...........................................61
SECTION 5.12 Intercompany Notes..........................................61
ARTICLE VI. NEGATIVE COVENANTS...............................................61
SECTION 6.01 Indebtedness................................................61
SECTION 6.02 Liens.......................................................63
SECTION 6.03 Fundamental Changes.........................................63
SECTION 6.04 Restricted Payments.........................................64
SECTION 6.05 Transactions with Affiliates................................64
SECTION 6.06 Restrictive Agreements......................................64
SECTION 6.07 Financial Covenants.........................................64
SECTION 6.08 Amendments to Certain Agreements............................65
ARTICLE VII. EVENTS OF DEFAULT................................................65
SECTION 7.01 Events of Default and Remedies..............................65
SECTION 7.02 Other Remedies..............................................68
SECTION 7.03 Application of Moneys During Continuation of Event of
Default.....................................................68
ARTICLE VIII. THE ADMINISTRATIVE AGENT........................................69
SECTION 8.01 Appointment, Powers and Immunities..........................69
SECTION 8.02 Reliance by Administrative Agent............................70
SECTION 8.03 Defaults; Events of Default.................................70
SECTION 8.04 Rights as a Lender..........................................70
SECTION 8.05 Indemnification.............................................70
SECTION 8.06 Non-Reliance on Agents and other Lenders....................71
SECTION 8.07 Action by Administrative Agent..............................71
SECTION 8.08 Resignation or Removal of Administrative Agent..............72
SECTION 8.09 Duties of Syndication Agent and Documentation Agent.........72
ARTICLE IX. GUARANTY.........................................................73
SECTION 9.01 Guaranty....................................................73
SECTION 9.02 Continuing Guaranty.........................................73
SECTION 9.03 Effect of Debtor Relief Laws................................76
Five-Year Facility
ii
<PAGE>
SECTION 9.04 Waiver......................................................76
SECTION 9.05 Full Force and Effect.......................................77
ARTICLE X. MISCELLANEOUS......................................................77
SECTION 10.01 Notices, Etc................................................77
SECTION 10.02 Waivers; Amendments.........................................78
SECTION 10.03 Payment of Expenses, Indemnities, etc.......................79
SECTION 10.04 Successors and Assigns......................................82
SECTION 10.05 Assignments and Participations..............................82
SECTION 10.06 Survival; Reinstatement.....................................85
SECTION 10.07 Counterparts; Integration; Effectiveness....................85
SECTION 10.08 Severability................................................85
SECTION 10.09 Right of Setoff.............................................86
SECTION 10.10 Governing Law; Jurisdiction; Consent to Service of
Process.....................................................86
SECTION 10.11 Waiver of Jury Trial........................................87
SECTION 10.12 Confidentiality.............................................87
SECTION 10.13 Interest Rate Limitation....................................88
SECTION 10.14 Exculpation Provisions......................................88
Five-Year Facility
iii
<PAGE>
SCHEDULES:
Schedule 4.01 Existing Subsidiaries
Schedule 4.06 Disclosed Matters
Schedule 6.02 Existing Liens
Schedule 6.06 Existing Restrictions
EXHIBITS:
Exhibit 1.01A Form of Administrative Questionnaire
Exhibit 1.01B Form of Assignment and Acceptance
Exhibit 1.01C-1 Subsidiary Borrower Letter of Credit
Exhibit 1.01C-2 Other Existing Letters of Credit
Exhibit 1.01-D Form of Competitive Note
Exhibit 1.01-E Form of Revolving Note
Exhibit 1.01-F Form of Swingline Note
Exhibit 2.03 Form of Borrowing Request
Exhibit 2.04-A Form of Competitive Bid Request
Exhibit 2.04-B Form of Notice to Lenders of Competitive Bid Request
Exhibit 2.04-C Form of Competitive Bid
Exhibit 2.06 Form of Letter of Credit Request
Exhibit 2.07 Form of Notice of Account Designation
Exhibit 2.08 Form of Interest Election Request
Exhibit 2.11 Form of Notice of Prepayment
Exhibit 5.01 Form of Compliance Certificate
Five-Year Facility
iv
<PAGE>
CREDIT AGREEMENT
THIS CREDIT AGREEMENT, dated as of September 29, 1999 (this
"Agreement") is among:
(a) Kinder Morgan Energy Partners, L.P., a Delaware limited
partnership (the "Company");
(b) Kinder Morgan Operating L.P. "B", a Delaware limited
partnership (the "Subsidiary Borrower");
(c) the banks and other financial institutions listed on the
signature pages hereof under the caption "Lenders" (the "Lenders" and together
with each other Person that becomes a Lender pursuant to Section 10.05,
collectively, the "Lenders");
(d) First Union National Bank, a national banking association,
individually as a Lender and as administrative agent for the Lenders (in such
latter capacity together with any other Person that becomes Administrative Agent
pursuant to Section 8.08, the "Administrative Agent");
(e) Bank of America, N.A., as the Syndication Agent (the "Syndication
Agent"); and
(f) Societe Generale, as the Documentation Agent (the "Documentation
Agent").
PRELIMINARY STATEMENTS
The Company and the Subsidiary Borrower have requested that a credit
facility be extended to them pursuant to which: (a) the Company may borrow from
the Lenders (i) to repay in full the principal and accrued interest on all loans
and other amounts outstanding under that certain Second Amended and Restated
Credit Agreement dated as of December 1, 1998 among the Company, the Subsidiary
Borrower, the subsidiary guarantors parties thereto, the lenders party thereto
and First Union National Bank, as the arranger, the syndication agent, the
administrative agent, the issuing bank and the swingline bank (as amended to
date, the "Existing Credit Agreement"), (ii) to refinance indebtedness of SFPP,
and (iii) for general working capital and other partnership purposes; and (b)
the Company may obtain the issuance of letters of credit and the letters of
credit (including the Subsidiary Borrower Letter of Credit) issued or otherwise
outstanding under the Existing Credit Agreement will be deemed to be letters of
credit issued hereunder.
Five-Year Facility
<PAGE>
NOW, THEREFORE, the parties hereto agree as follows:
ARTICLE I.
DEFINITIONS
SECTION 1.01 Defined Terms. As used in this Agreement, the following
terms have the meanings specified below:
"ABR", when used in reference to any Loan or Borrowing, refers to whether
such Loan, or the Loans comprising such Borrowing, are bearing interest at a
rate determined by reference to the Alternate Base Rate.
"Administrative Agent" has the meaning specified in the introduction to
this Agreement.
"Administrative Questionnaire" means an Administrative Questionnaire in
the form of Exhibit 1.01A.
"Affiliate" of any Person shall mean (i) any Person directly or indirectly
controlled by, controlling or under common control with such first Person, (ii)
any director or officer of such first Person or of any Person referred to in
clause (i) above and (iii) if any Person in clause (i) above is an individual,
any member of the immediate family (including parents, siblings, spouse and
children) of such individual and any trust whose principal beneficiary is such
individual or one or more members of such immediate family and any Person who is
controlled by any such member or trust. For purposes of this definition, any
Person that owns directly or indirectly 25% or more of the securities having
ordinary voting power for the election of directors or other governing body of a
corporation or 25% or more of the partnership or other ownership interests of
any other Person (other than as a limited partner of such other Person) will be
deemed to "control" (including, with its correlative meanings, "controlled by"
and "under common control with") such corporation or other Person.
"Agreement" has the meaning specified in the introduction to this
Agreement.
"Alternate Base Rate" means, for any day, a rate per annum equal to the
greater of (a) the Federal Funds Effective Rate in effect on such day plus 2 of
1% and (b) the Prime Rate in effect for such day. Any change in the Alternate
Base Rate due to a change in the Prime Rate or the Federal Funds Effective Rate
shall be effective from and including the effective date of such change in the
Prime Rate or the Federal Funds Effective Rate, respectively.
"Anniversary Date" means each of September 29, 2000 and September 29,
2001.
Five-Year Facility
2
<PAGE>
"Applicable Margin" means at any time and from time to time, a percentage
per annum equal to the applicable percentage set forth below for the
corresponding Performance Level set forth below:
-------------------------------
Performance LIBOR Borrowings
Level Margin Percentage
-------------------------------
I .375%
-------------------------------
II .475%
-------------------------------
III .575%
-------------------------------
IV .750%
-------------------------------
V .950%
-------------------------------
The Applicable Margin shall be determined by reference to the Performance Level
in effect from time to time.
"Applicable Percentage" means, with respect to any Lender, the percentage
of the Total Commitment represented by such Lender=s Commitment. If the Total
Commitment has terminated or expired, the Applicable Percentages shall be
determined based upon the Total Commitment most recently in effect, giving
effect to any assignments.
"Application" has the meaning specified in Section 2.06(c).
"Assignment and Acceptance" means an assignment and acceptance entered
into by a Lender and an assignee (with the consent of any party whose consent is
required by Section 10.05), and accepted by the Administrative Agent, in the
form of Exhibit 1.01B or any other form approved by the Administrative Agent.
"Available Cash" means, with respect to any fiscal quarter of the Company
(a "Test Quarter"), an amount equal to the algebraic sum of (a) the aggregate of
all cash distributions actually made to and received by the Company from the
Subsidiaries in respect of their Capital Stock during such fiscal quarter minus
(b) the aggregate amount of all cash disbursements, including disbursements for
operating expenses, payments of principal of and interest on Indebtedness and
taxes (net of amounts received or to be received by the Company from the
Subsidiaries as reimbursement for such amounts), and capital expenditures (net
of any borrowings to fund such capital expenditures permitted pursuant to this
Agreement), actually paid by the Company during such Test Quarter, plus, in the
case of a decrease, or minus, in the case of an increase (c) the amount by
which, as at the end of such Test Quarter, cash reserves necessary in the
reasonable discretion of the Company=s management for the proper conduct of the
business of the Company and the Subsidiaries subsequent to such Test Quarter,
decreased or increased from the amount of such reserves as at the end of the
immediately preceding fiscal quarter.
"Availability Period" means the period from and including the Effective
Date, to but excluding the earlier of the Maturity Date and the date of
termination of the Commitments.
Five-Year Facility
3
<PAGE>
"Bankruptcy Code" has the meaning specified in Section 9.01(a).
"Board" means the Board of Governors of the Federal Reserve System of the
United States of America.
"Board of Directors" means, with respect to any Person, the Board of
Directors of such Person or any committee of the Board of Directors of such
Person duly authorized to act on behalf of the Board of Directors of such
Person.
"Board Resolution" means, with respect to any Person, a copy of a
resolution certified by the Secretary or an Assistant Secretary of such Person
to have been duly adopted by the Board of Directors of such Person and to be in
full force and effect on the date of such certification, and delivered to the
Administrative Agent.
"Bonds" means the Port Facility Refunding Revenue Bonds (Enron
Transportation Services, L.P. Project) Series 1994 in the aggregate principal
amount of $23,700,000, as issued by the Jackson-Union Counties Regional Port
District.
"Borrowers" means, collectively, the Company and the Subsidiary Borrower
and "Borrower" means either one of them.
"Borrowing" means (a) a Revolving Borrowing or (b) a Competitive
Borrowing.
"Borrowing Date" means the Business Day upon which any Letter of Credit is
to be issued or any Loan is to be made available to the Company.
"Borrowing Request" has the meaning specified in Section 2.03.
"Business Day" means any day that is not a Saturday, Sunday or other day
on which commercial banks in Houston, Texas, New York, New York, or Charlotte,
North Carolina, are authorized or required by law to remain closed; provided
that, when used in connection with a Eurodollar Loan, the term "Business Day"
shall also exclude any day on which banks are not open for dealings in dollar
deposits in the London interbank market.
"Capital Lease Obligations" of any Person means the obligations of such
Person to pay rent or other amounts under any lease of (or other arrangement
conveying the right to use) real or personal property, or a combination thereof,
which obligations are required to be classified and accounted for as capital
leases on a balance sheet of such Person under GAAP, and the amount of such
obligations shall be the capitalized amount thereof determined in accordance
with GAAP.
"Capital Stock" means, with respect to any Person, any and all shares,
interests, rights to purchase, warrants, options, participations or other
equivalents (however designated) of such Person=s equity, including all common
stock and preferred stock, any limited or general partnership interest and any
limited liability company membership.
Five-Year Facility
4
<PAGE>
"Change in Control" means either (a) the acquisition through beneficial
ownership or otherwise after the date hereof by any person (as such term is used
in section 13(d) and section 14(d)(2) of the Exchange Act as in effect on the
date hereof) or related persons constituting a group (as such term is used in
Rule 13d-5 under the Exchange Act as in effect on the date hereof) of 30% of the
Voting Stock of the General Partner; or (b) individuals who, at the beginning of
any period of 12 consecutive months, constitute the General Partner=s board of
directors cease for any reason (other than death or disability) to constitute a
majority of the General Partner=s board of directors then in office; provided,
however, that the acquisition of Kinder Morgan, Inc., the sole shareholder of
the General Partner, by KN Energy, Inc. in a transaction in which the executive
management of the General Partner becomes the executive management of KN Energy,
Inc., shall not constitute a Change in Control.
"Change in Control Event" means the execution of any definitive agreement
which, when fully performed by the parties thereto, would result in a Change in
Control.
"Change in Law" means (a) the adoption of any law, rule or regulation
after the date of this Agreement, (b) any change in any law, rule or regulation
or in the interpretation or application thereof by any Governmental Authority
after the date of this Agreement or (c) compliance by any Lender or the Issuing
Bank (or, for purposes of Section 2.15(b), by any lending office of such Lender
or by such Lender=s or the Issuing Bank=s holding company, if any) with any
request, guideline or directive (whether or not having the force of law) of any
Governmental Authority made or issued after the date of this Agreement.
"Charges" has the meaning specified in Section 10.13.
"Class", when used in reference to any Loan or Borrowing, refers to
whether such Loan, or the Loans comprising such Borrowing, are Revolving Loans
or Swingline Loans.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time.
"Commitment" means, with respect to each Lender, the commitment of such
Lender to make Revolving Loans and to acquire participations in Letters of
Credit and Swingline Loans hereunder, expressed as an amount representing the
maximum aggregate amount of such Lender=s Revolving Credit Exposure hereunder,
as such commitment may be (a) reduced from time to time pursuant to Section 2.09
and (b) reduced or increased from time to time pursuant to assignments by or to
such Lender pursuant to Section 10.05. The initial amount of each Lender=s
Commitment is set forth on its signature page hereto, or in the Assignment and
Acceptance pursuant to which such Lender shall have assumed its Commitment, as
applicable.
"Communications" has the meaning specified in Section 10.01.
"Companion Credit Agreement" means the Credit Agreement dated as of
September 29, 1999 among the Company, the lenders party thereto, First Union
National Bank, as Administrative Agent, Bank of America, N.A., as Syndication
Agent and Societe Generale, as Documentation Agent.
Five-Year Facility
5
<PAGE>
"Company" has the meaning specified in the introduction to this
Agreement.
"Company Debt Rating" means, with respect to the Company as of any date of
determination, the rating that has been most recently announced by either S&P or
Moody=s, as the case may be, for any non-credit enhanced, unsecured long-term
senior debt issued or to be issued by the Company. For purposes of the
foregoing:
(a) if only one of S&P and Moody=s shall have in effect a Company
Debt Rating, the Applicable Margin or the Facility Fee Rate, as the case may be,
shall be determined by reference to the available rating;
(b) if, at any time, neither S&P nor Moody=s shall have in effect a
Company Debt Rating, the Applicable Margin or the Facility Fee Rate, as the case
may be, shall be set in accordance with Performance Level V under the definition
of "Applicable Margin"or "Facility Fee Rate," as the case may be;
(c) if the ratings established by S&P and Moody=s shall fall within
different Performance Levels, the Applicable Margin or the Facility Fee Rate, as
the case may be, shall be based upon the higher rating; provided, however, that,
if the lower of such ratings is two or more Performance Levels below the higher
of such ratings, the Applicable Margin or the Facility Fee Rate, as the case may
be, shall be based upon the rating that is one Performance Level above the lower
rating;
(d) if any rating established by S&P or Moody=s shall be changed,
such change shall be effective as of the date on which such change is announced
publicly by the rating agency making such change; and
(e) if S&P or Moody=s shall change the basis on which ratings are
established by it, each reference to the Company Debt Rating announced by S&P or
Moody=s shall refer to the then equivalent rating by S&P or Moody=s, as the case
may be.
"Competitive Bid" means an offer by a Lender to make a Competitive Loan
substantially in the form of Exhibit 2.04-C.
"Competitive Bid Rate" means, with respect to any Competitive Bid, the
Margin or the Fixed Rate, as applicable, offered by the Lender making such
Competitive Bid.
"Competitive Bid Request" means a request by the Company for Competitive
Bids in accordance with Section 2.04 substantially in the form of Exhibit
2.04-A.
"Competitive Borrowing" means a borrowing consisting of a Competitive Loan
or concurrent Competitive Loans of the same Type, as to which a single Interest
Period is in effect and made on the same date by the Lender or Lenders whose
Competitive Bid(s) as all or as a part of such borrowing, as the case may be,
has (or have) been accepted by the Company under the bidding procedure described
in Section 2.04.
Five-Year Facility
6
<PAGE>
"Competitive Loan" means a Loan made pursuant to Section 2.04.
"Competitive Note" means a promissory note of the Company payable to the
order of a Lender, in substantially the form of Exhibit 1.01-D, together with
all modifications, extensions, renewals and rearrangements thereof.
"Consenting Lenders" has the meaning specified in Section 2.20.
"Consolidated EBITDA" means, for any period, the EBITDA of the Company and
the Subsidiaries for such period determined on a consolidated basis in
accordance with GAAP.
"Consolidated Indebtedness" means, at the date of any determination
thereof, Indebtedness of the Company and the Subsidiaries determined on a
consolidated basis in accordance with GAAP; excluding, however, Guarantees by
the Company of Indebtedness of employees of the Company and the Subsidiaries in
an aggregate amount at any time outstanding for all such Indebtedness not
exceeding $7,500,000.
"Consolidated Interest Expense" means, for any period, the Interest
Expense of the Company and the Subsidiaries for such period determined on a
consolidated basis in accordance with GAAP.
"Consolidated Interest Income" means, for any period, the Interest Income
of the Company and the Subsidiaries for such period determined on a consolidated
basis in accordance with GAAP.
"Consolidated Net Income" means, for any period, the Net Income of the
Company and the Subsidiaries for such period determined on a consolidated basis
in accordance with GAAP.
"Credit Event" means the making of any Loan or the issuance or the
extension of any Letter of Credit.
"Default" means any event or condition which upon notice, lapse of time or
both would, unless cured or waived, become an Event of Default.
"Disclosed Matters" means the actions, suits and proceedings and the
environmental matters disclosed in Schedule 4.06.
"Distribution Date" has the meaning specified in Section 7.03.
"Documentation Agent" has the meaning specified in the introduction to
this Agreement.
"dollars" or "$" refers to lawful money of the United States of America.
"EBITDA" means (without duplication), with respect to any period for any
Person, the Net Income of such Person for such period determined in accordance
with GAAP, increased (to the extent deducted in determining Net Income for such
period) by the sum of (a) all income
Five-Year Facility
7
<PAGE>
taxes (including state franchise taxes based upon income) of such Person paid or
accrued according to GAAP for such period; (b) Consolidated Interest Expense of
such Person for such period; and (c) depreciation and amortization of such
Person for such period determined in accordance with GAAP.
"Effective Date" means the date occurring on or before October 31, 1999 on
which the conditions specified in Section 3.01 are satisfied (or waived in
accordance with Section 10.02).
"Eligible Assignee" means (a) any Lender; (b) any Affiliate of any Lender;
(c) a commercial bank organized or licensed under the laws of the United States,
or a state thereof, and having total assets in excess of $1,000,000,000; (d) a
commercial bank organized under the laws of any other country which is a member
of the OECD, or a political subdivision of any such country, and having total
assets in excess of $1,000,000,000, provided that such bank is acting through a
branch or agency located in the country in which it is organized or another
country which is also a member of the OECD; and (e) a finance company, insurance
company or other financial institution or fund (whether a corporation,
partnership, trust or other entity) that is engaged in making, purchasing or
otherwise investing in commercial loans in the ordinary course of its business
and having a combined capital and surplus or total assets of at least
$100,000,000.
"Environmental Laws" means all laws, rules, regulations, codes,
ordinances, orders, decrees, judgments, injunctions, notices or binding
agreements issued, promulgated or entered into by any Governmental Authority,
relating in any way to the environment, preservation or reclamation of natural
resources, the management, release or threatened release of any Hazardous
Material or to health and safety matters.
"Environmental Liability" means any liability, contingent or otherwise
(including any liability for damages, costs of environmental remediation, fines,
penalties or indemnities), of the Company or any Subsidiary directly or
indirectly resulting from or based upon (a) violation of any Environmental Law,
(b) the generation, use, handling, transportation, storage, treatment or
disposal of any Hazardous Materials, (c) exposure to any Hazardous Materials,
(d) the release of any Hazardous Materials into the environment, or (e) any
contract, agreement or other consensual arrangement pursuant to which liability
is assumed or imposed with respect to any of the foregoing.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time.
"ERISA Affiliate" means any trade or business (whether or not
incorporated) that, together with the Company, is treated as a single employer
under Section 414(b) or (c) of the Code or, solely for purposes of Section 302
of ERISA and Section 412 of the Code, is treated as a single employer under
Section 414 of the Code.
"ERISA Event" means (a) any "reportable event", as defined in Section 4043
of ERISA or the regulations issued thereunder with respect to a Plan (other than
an event for which the 30-day notice period is waived); (b) the existence with
respect to any Plan of an "accumulated funding deficiency" (as defined in
Section 412 of the Code or Section 302 of ERISA), whether
Five-Year Facility
8
<PAGE>
or not waived; (c) the filing pursuant to Section 412(d) of the Code or Section
303(d) of ERISA of an application for a waiver of the minimum funding standard
with respect to any Plan; (d) the incurrence by the Company or any of its ERISA
Affiliates of any liability under Title IV of ERISA with respect to the
termination of any Plan; (e) the receipt by the Company or any ERISA Affiliate
from the PBGC or a plan administrator of any notice relating to an intention to
terminate any Plan or Plans or to appoint a trustee to administer any Plan; (f)
the incurrence by the Company or any ERISA Affiliate of any liability with
respect to the withdrawal or partial withdrawal from any Plan or Multiemployer
Plan; or (g) the receipt by the Company or any ERISA Affiliate of any notice, or
the receipt by any Multiemployer Plan from the Company or any ERISA Affiliate of
any notice, concerning the imposition of Withdrawal Liability or a determination
that a Multiemployer Plan is, or is expected to be, insolvent or in
reorganization, within the meaning of Title IV of ERISA.
"Eurodollar", when used in reference to any Loan or Borrowing, refers to
whether such Loan, or the Loans comprising such Borrowing, bear interest at a
rate determined by reference to the LIBOR Rate.
"Event of Default" has the meaning specified in Section 7.01.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Excluded Taxes" means, with respect to the Administrative Agent, any
Lender, the Issuing Bank or any other recipient of any payment to be made by or
on account of any Obligation, (a) income or franchise taxes imposed on (or
measured by) its net income by the United States of America, or by the
jurisdiction under the laws of which such recipient is organized or in which its
principal office is located or, in the case of any Lender, in which its
applicable lending office is located, (b) any branch profits taxes imposed by
the United States of America or any similar tax imposed by any other
jurisdiction in which either Borrower is located and (c) in the case of a
Foreign Lender (other than an assignee pursuant to a request by the Company
under Section 2.19(b)), any withholding tax that is imposed on amounts payable
to such Foreign Lender at the time such Foreign Lender becomes a party to this
Agreement or is attributable to such Foreign Lender=s failure or inability to
comply with Section 2.17(e), except to the extent that such Foreign Lender=s
assignor (if any) was entitled, at the time of assignment, to receive additional
amounts from a Borrower with respect to such withholding tax pursuant to Section
2.17(a).
"Execution Date" means the earliest date upon which all of the following
shall have occurred: counterparts of this Agreement shall have been executed by
the Borrowers and each Lender listed on the signature pages hereof and the
Administrative Agent shall have received counterparts hereof which taken
together, bear the signature of the Borrowers and each Lender and the
Administrative Agent.
"Existing Credit Agreement" has the meaning specified in the Preliminary
Statements.
Five-Year Facility
9
<PAGE>
"Existing Letters of Credit" means, collectively, the Subsidiary Borrower
Letter of Credit and the letters of credit issued under the Existing Credit
Agreement listed on Exhibit 1.01C-2 .
"Existing Maturity Date" has the meaning specified in Section 2.20.
"Facility Fee Rate" means at any time and from time to time, a percentage
per annum equal to the applicable percentage set forth below for the
corresponding Performance Level set forth below:
-------------------------------
Performance
Level Facility Fee Rate
-------------------------------
I .125%
-------------------------------
II .150%
-------------------------------
III .175%
-------------------------------
IV .250%
-------------------------------
V .300%
-------------------------------
The Facility Fee Rate shall be determined by reference to the Performance Level
in effect from time to time.
"Federal Funds Effective Rate" means, for any day, the weighted average
(rounded upwards, if necessary, to the next 1/100 of 1%) of the rates on
overnight Federal funds transactions with members of the Federal Reserve System
arranged by Federal funds brokers, as published on the next succeeding Business
Day by the Federal Reserve Bank of New York, or, if such rate is not so
published for any day that is a Business Day, the average (rounded upwards, if
necessary, to the next 1/100 of 1%) of the quotations for such day for such
transactions received by the Administrative Agent from three Federal funds
brokers of recognized standing selected by it.
"Fee Letter" has the meaning specified in Section 2.12(c).
"Fixed Rate" means, with respect to any Competitive Loan (or Competitive
Borrowing) (other than a Eurodollar Competitive Loan or Competitive Borrowing),
the fixed rate of interest per annum specified by the Lender(s) making such
Competitive Loan (or the Competitive Loans comprising such Competitive
Borrowing) in its (or their) related Competitive Bid(s).
"Fixed Rate Loan" means a Competitive Loan bearing interest at a Fixed
Rate.
"Foreign Lender" means any Lender that is organized under the laws of a
jurisdiction other than that in which either Borrower is located. For purposes
of this definition, the United States of America, each state thereof and the
District of Columbia shall be deemed to constitute a single jurisdiction.
Five-Year Facility
10
<PAGE>
"GAAP" means generally accepted accounting principles in the United States
of America from time to time, including as set forth in the opinions, statements
and pronouncements of the Accounting Principles Board of the American Institute
of Certified Public Accountants and the Financing
Accounting Standards Board.
"General Partner" means Kinder Morgan G.P., Inc., a Delaware corporation.
"Governmental Authority" means the government of the United States of
America, any other nation or any political subdivision thereof, whether state or
local, and any agency, authority, instrumentality, regulatory body, court,
central bank or other entity exercising executive, legislative, judicial,
taxing, regulatory or administrative powers or functions of or pertaining to
government.
"Guarantee" of or by any Person (the "guarantor") means any obligation,
contingent or otherwise, of the guarantor guaranteeing or having the economic
effect of guaranteeing any Indebtedness or other obligation of any other Person
(the "primary obligor") in any manner, whether directly or indirectly, and
including any obligation of the guarantor, direct or indirect, (a) to purchase
or pay (or advance or supply funds for the purchase or payment of) such
Indebtedness or other obligation or to purchase (or to advance or supply funds
for the purchase of) any security for the payment thereof, (b) to purchase or
lease property, securities or services for the purpose of assuring the owner of
such Indebtedness or other obligation of the payment thereof, (c) to maintain
working capital, equity capital or any other financial statement condition or
liquidity of the primary obligor so as to enable the primary obligor to pay such
Indebtedness or other obligation or (d) as an account party in respect of any
letter of credit or letter of guaranty issued to support such Indebtedness or
obligation; provided, that the term Guarantee shall not include endorsements for
collection or deposit in the ordinary course of business.
"Guaranteed Obligations" has the meaning specified in Section 9.01.
"Guaranty" means the guaranty of the Company contained in Article IX.
"Hazardous Materials" means all explosive or radioactive substances or
wastes and all hazardous or toxic substances, wastes or other pollutants,
including petroleum or petroleum distillates, asbestos or asbestos containing
materials, polychlorinated biphenyls, radon gas, infectious or medical wastes
and all other substances or wastes of any nature regulated pursuant to any
Environmental Law.
"Hedging Agreement" means any interest rate protection agreement, foreign
currency exchange agreement, commodity price protection agreement or other
interest or currency exchange rate or commodity price hedging arrangement.
"Indebtedness" of any Person means, without duplication, (a) all
obligations of such Person for borrowed money or with respect to deposits or
advances of any kind, (b) all obligations of such Person evidenced by bonds,
debentures, notes or similar instruments, (c) all obligations of such Person
under conditional sale or other title retention agreements relating to property
acquired by such Person, (d) all obligations of such Person in respect of the
deferred
Five-Year Facility
11
<PAGE>
purchase price of property or services or any other similar obligation upon
which interest charges are customarily paid (excluding trade accounts payable
incurred in the ordinary course of business), (e) all Indebtedness of others
secured by (or for which the holder of such Indebtedness has an existing right,
contingent or otherwise, to be secured by) any Lien on property owned or
acquired by such Person, whether or not the Indebtedness secured thereby has
been assumed, (f) all Guarantees by such Person of Indebtedness of others
(provided that in the event that any Indebtedness of the Company or any
Subsidiary shall be the subject of a Guarantee by one or more Subsidiaries or by
the Company, as the case may be, the aggregate amount of the outstanding
Indebtedness of the Company and the Subsidiaries in respect thereof shall be
determined by reference to the primary Indebtedness so guaranteed, and without
duplication by reason of the existence of any such Guarantee), (g) all Capital
Lease Obligations of such Person, (h) all obligations, contingent or otherwise,
of such Person as an account party in respect of letters of credit and letters
of guaranty and (i) all obligations, contingent or otherwise, of such Person in
respect of bankers= acceptances. The Indebtedness of any Person shall include
the Indebtedness of any other Person (including any partnership in which such
Person is a general partner) to the extent such Person is liable therefor as a
result of such Person=s ownership interest in or other relationship with such
entity, except to the extent the terms of such Indebtedness provide that such
Person is not liable therefor.
"Indemnified Taxes" means Taxes other than Excluded Taxes.
"Information Memorandum" means the Confidential Information Memorandum
dated September 26, 1999 (Kinder Morgan Energy Partners, L.P. $600,000,000
Senior Credit Facilities).
"Intercompany Notes" has the meaning specified in Section 5.12.
"Interest Election Request" has the meaning specified in Section 2.08.
"Interest Expense" means (without duplication), with respect to any period
for any Person (a) the aggregate amount of interest, whether expensed or
capitalized, paid, accrued or scheduled to be paid during such period in respect
of the Indebtedness of such Person including (i) the interest portion of any
deferred payment obligation; (ii) the portion of any rental obligation in
respect of Capital Lease Obligations allocable to interest expenses; and (iii)
any non-cash interest payments or accruals, all determined in accordance with
GAAP, less (b) Interest Income of such Person for such period.
"Interest Income" means, with respect to any period for any Person,
interest actually received by such Person during such period.
"Interest Payment Date" means (a) with respect to any ABR Loan (including
a Swingline Loan), the last Business Day of each January, April, July and
October, (b) with respect to any Eurodollar Loan, the last Business Day of the
Interest Period applicable to the Borrowing of which such Loan is a part and, in
the case of a Eurodollar Borrowing with an Interest Period of more than three
months= duration, each day prior to the last day of such Interest Period that
occurs at intervals of three months= duration after the first day of such
Interest Period and (c) with respect to any Fixed Rate Loan, the last day of the
Interest Period applicable to the
Five-Year Facility
12
<PAGE>
Borrowing of which such Loan is a part and, in the case of a Fixed Rate
Borrowing with an Interest Period of more than 90 days= duration (unless
otherwise specified in the applicable Competitive Bid Request), each day prior
to the last day of such Interest Period that occurs at intervals of 90 days=
duration after the first day of such Interest Period, and any other dates that
are specified in the applicable Competitive Bid Request as Interest Payment
Dates with respect to such Borrowing.
"Interest Period" means (a) with respect to any Eurodollar Borrowing, the
period commencing on the date of such Borrowing and ending on the numerically
corresponding day in the calendar month that is one, two, three or six months
thereafter, as the Company may elect and (b) with respect to any Fixed Rate
Borrowing, the period (which shall not be less than 7 days or more than 180
days) commencing on the date of such Borrowing and ending on the date specified
in the applicable Competitive Bid Request; provided, that (i) if any Interest
Period would end on a day other than a Business Day, such Interest Period shall
be extended to the next succeeding Business Day unless such next succeeding
Business Day would fall in the next calendar month, in which case such Interest
Period shall end on the next preceding Business Day, (ii) any Interest Period
that commences on the last Business Day of a calendar month (or on a day for
which there is no numerically corresponding day in the last calendar month of
such Interest Period) shall end on the last Business Day of the last calendar
month of such Interest Period and (iii) no Interest Period shall end after the
Maturity Date. For purposes hereof, the date of a Borrowing initially shall be
the date on which such Borrowing is made and, in the case of a Revolving
Borrowing, thereafter shall be the effective date of the most recent conversion
or continuation of such Borrowing.
"Issuing Bank" means First Union National Bank, in its capacity as the
issuer of Letters of Credit hereunder, and its successors in such capacity as
provided in Section 2.06(j).
"LC Disbursement" means a payment made by the Issuing Bank pursuant to a
Letter of Credit.
"LC Exposure" means, at any time, the sum of (a) the aggregate undrawn
amount of all outstanding Letters of Credit at such time plus (b) the aggregate
amount of all LC Disbursements that have not yet been reimbursed by or on behalf
of the applicable Borrower at such time. The LC Exposure of any Lender at any
time shall be its Applicable Percentage of the total LC Exposure at such time.
"Lender" has the meaning specified in the introduction to this Agreement.
"Lenders" has the meaning specified in the introduction to this Agreement.
Unless the context otherwise requires, the term "Lenders" includes the Swingline
Lender.
"Letter of Credit" means any Existing Letter of Credit or any letter of
credit issued pursuant to this Agreement.
"Letter of Credit Request" has the meaning specified in Section 2.06.
Five-Year Facility
13
<PAGE>
"LIBOR" shall mean the rate of interest determined on the basis of the
rate for deposits in dollars in an amount substantially equal to the amount of
the applicable Loan for a period equal to the applicable Interest Period
commencing on the first day of such Interest Period appearing on Telerate Page
3750 as of 11:00 a.m. (London time) two Business Days prior to the first day of
the applicable Interest Period. In the event that such rate does not appear on
Telerate Page 3750, "LIBOR" shall be determined by the Administrative Agent to
be the rate per annum at which deposits in dollars are offered by leading
reference banks in the London interbank market to First Union at approximately
11:00 a.m. (London time) two Business Days prior to the first day of the
applicable Interest Period for a period equal to such Interest Period and in an
amount substantially equal to the amount of the applicable Loan.
"LIBOR Rate" shall mean, with respect to any LIBOR Loan for any Interest
Period for such Loan, a rate per annum (rounded upwards, if necessary, to the
nearest 1/100 of 1%) determined by the Administrative Agent to be equal to the
quotient of (i) LIBOR for such Loan for such Interest Period divided by (ii) 1
minus the Reserve Requirement for such Loan for such Interest Period.
"Lien" means, with respect to any asset, (a) any mortgage, deed of trust,
lien, pledge, hypothecation, encumbrance, charge or security interest in, on or
of such asset and (b) the interest of a vendor or a lessor under any conditional
sale agreement, capital lease or title retention agreement (or any financing
lease having substantially the same economic effect as any of the foregoing)
relating to such asset.
"Loan Documents" mean, collectively, this Agreement (including the
Guaranty), the Notes, if any, the Intercompany Notes, the Applications, the Fee
Letter and all other instruments and documents from time to time executed and
delivered by either Borrower in connection herewith and therewith; provided,
however, for purposes of Article IX, Loan Documents shall not include the
Intercompany Notes.
"Loans" means advances made by the Lenders to the Company pursuant to
this Agreement.
"Margin" means, with respect to any Competitive Loan bearing interest at a
rate based on the LIBOR Rate, the marginal rate of interest, if any, to be added
to or subtracted from the LIBOR Rate to determine the rate of interest
applicable to such Loan, as specified by the Lender making such Loan in its
related Competitive Bid.
"Material Adverse Effect" means, relative to any occurrence of whatever
nature (including any adverse determination in any litigation, arbitration or
governmental investigation or proceeding) and after taking into account actual
insurance coverage and effective indemnification with respect to such
occurrence, (a) a material adverse effect on the financial condition, business
or operations of the Company and the Subsidiaries taken as a whole, (b) the
impairment of (i) the ability of the Borrowers to collectively perform the
payment or other material obligations hereunder or under the other Loan
Documents or (ii) the ability of the Administrative Agent or the Lenders to
realize the material benefits intended to be provided by
Five-Year Facility
14
<PAGE>
the Borrowers under the Loan Documents or (c) the subjection of any of the
Administrative Agent, the Issuing Bank or any Lender to any civil or criminal
liability.
"Maturity Date" means the earlier of (a) September 29, 2004, as such date
may be extended pursuant to Section 2.20, and (b) the acceleration of the
Obligations pursuant to Section 7.01.
"Maximum Rate" has the meaning specified in Section 10.13.
"Moody=s" means Moody=s Investors Service, Inc.
"Multiemployer Plan" means a multiemployer plan as defined in Section
4001(a)(3) of ERISA.
"Net Income" means for any Person for any period, the net income or (net
loss) of such Person for such period (taken as a cumulative whole), as
determined in accordance with GAAP, provided that there shall be excluded,
without duplication, from such net income (to the extent otherwise included
therein):
(a) net extraordinary gains and losses (other than, in the case of
losses, losses resulting from charges against net income to establish or
increase reserves for potential environmental liabilities and reserves for
exposure of such Person under rate cases);
(b) net gains or losses in respect of dispositions of assets other
than in the ordinary course of business;
(c) any gains or losses attributable to write-ups or write-downs of
assets; and
(d) proceeds of any key man insurance, or any insurance on property,
plant or equipment.
"Nominee" has the meaning specified in Section 2.20.
"Non-Consenting Lenders" has the meaning specified in Section 2.20.
"Note"means a Revolving Note or a Competitive Note.
"Notice of Account Designation" has the meaning specified in Section
2.07.
"Notice of Default" has the meaning specified in Section 7.01.
"Notice of Extension" has the meaning specified in Section 2.20.
"Notice of Prepayment" has the meaning specified in Section 2.11.
"Obligations" means collectively:
Five-Year Facility
15
<PAGE>
(a) the payment of all indebtedness and liabilities by, and
performance of all other obligations of, the Company in respect of the Loans;
(b) all obligations of the Company and the Subsidiary Borrower under,
with respect to, and relating to the Letters of Credit whether contingent or
matured;
(c) the payment of all other indebtedness and liabilities by and
performance of all other obligations of, the Company and the Subsidiary Borrower
to the Administrative Agent, the Issuing Bank and the Lenders under, with
respect to, and arising in connection with, the Loan Documents, and the payment
of all indebtedness and liabilities of the Company and the Subsidiary Borrower
to the Administrative Agent, the Issuing Bank and the Lenders for fees, costs,
indemnification and expenses (including reasonable attorneys= fees and expenses)
under the Loan Documents;
(d) the reimbursement of all sums advanced and costs and expenses
incurred by the Administrative Agent under any Loan Document (whether directly
or indirectly) in connection with the Obligations or any part thereof or any
renewal, extension or change of or substitution for the Obligations or, any part
thereof, whether such advances, costs and expenses were made or incurred at the
request of either Borrower or the Administrative Agent; and
(e) all renewals, extensions, amendments and changes of, or
substitutions or replacements for, all or any part of the items described under
clauses (a) through (d) above.
"OECD" means the Organization for Economic Cooperation and Development
(or any successor).
"OLP 'A'" means Kinder Morgan Operating L.P. "A", a Delaware limited
partnership.
"OLP 'C'" means Kinder Morgan Operating L.P. "C", a Delaware limited
partnership.
"OLP 'D'" means Kinder Morgan Operating L.P. "D", a Delaware limited
partnership.
"Other Taxes" means any and all present or future stamp or documentary
taxes or any other excise or property taxes, charges or similar levies arising
from any payment made hereunder or from the execution, delivery or enforcement
of, or otherwise with respect to, this Agreement.
"Participant" has the meaning specified in Section 10.05(e).
"PBGC" means the Pension Benefit Guaranty Corporation referred to and
defined in ERISA and any successor entity performing similar functions.
"Performance Level" means a reference to one of Performance Level I,
Performance Level II, Performance Level III, Performance Level IV or Performance
Level V.
Five-Year Facility
16
<PAGE>
"Performance Level I" means, at any date of determination, the Company
shall have a Company Debt Rating in effect on such date of at least A- by S&P
and at least A3 by Moody=s.
"Performance Level II" means, at any date of determination, (a) the
Performance Level does not meet the requirements of Performance Level I and (b)
the Company shall have a Company Debt Rating in effect on such date of at least
BBB+ by S&P and at least Baa1 by Moody=s.
"Performance Level III" means, at any date of determination, (a) the
Performance Level does not meet the requirements of Performance Level I or
Performance Level II and (b) the Company shall have a Company Debt Rating in
effect on such date of at least BBB by S&P and at least Baa2 by Moody=s.
"Performance Level IV" means, at any date of determination, (a) the
Performance Level does not meet the requirements of Performance Level I,
Performance Level II or Performance Level III and (b) the Company shall have a
Company Debt Rating in effect on such date of at least BBB- by S&P and at least
Baa3 by Moody=s.
"Performance Level V" means, at any date of determination, the Performance
Level does not meet the requirements of Performance Level I, Performance Level
II, Performance Level III or Performance Level IV.
"Permitted Encumbrances" means:
(a) Liens imposed by law for taxes that are not yet due or are being
contested in compliance with Section 5.04;
(b) carriers=, warehousemen=s, mechanics=, materialmen=s, repairmen=s
and other like Liens imposed by law, arising in the ordinary course of business
and securing obligations that are not overdue by more than 30 days or are being
contested in compliance with Section 5.04;
(c) pledges and deposits made in the ordinary course of business in
compliance with workers= compensation, unemployment insurance and other social
security laws or regulations;
(d) deposits to secure the performance of bids, trade contracts,
leases, statutory obligations, surety and appeal bonds, performance bonds and
other obligations of a like nature, in each case in the ordinary course of
business;
(e) easements, zoning restrictions, rights-of-way and similar
encumbrances on real property imposed by law or arising in the ordinary course
of business that do not secure any monetary obligations and do not materially
detract from the value of the affected property or interfere with the ordinary
conduct of business of the Company or any Subsidiary;
(f) judgment and attachment Liens not giving rise to an Event of
Default or Liens created by or existing from any litigation or legal proceeding
that are currently being
Five-Year Facility
17
<PAGE>
contested in good faith by appropriate proceedings, promptly instituted and
diligently conducted, and for which adequate reserves have been made to the
extent required by GAAP;
(g) any interest or title of a lessor in property subject to any
Capital Lease Obligation or operating lease which, in each case, is permitted
under this Agreement; and
(h) Liens in favor of collecting or payor banks having a right of
setoff, revocation, refund or chargeback with respect to money or instruments of
the Company or any Subsidiary on deposit with or in possession of such bank;
provided that the term "Permitted Encumbrances" shall not include any Lien
securing Indebtedness.
"Person" means any natural person, corporation, limited liability company,
trust, joint venture, association, company, partnership, Governmental Authority
or other entity.
"Plan" means any employee pension benefit plan (other than a Multiemployer
Plan) subject to the provisions of Title IV of ERISA or Section 412 of the Code
or Section 302 of ERISA, and in respect of which the Company or any ERISA
Affiliate is (or, if such plan were terminated, would under Section 4069 of
ERISA be deemed to be) an "employer" as defined in Section 3(5) of ERISA.
"Plantation Pipe Line" means Plantation Pipe Line Company, a Delaware
and Virginia corporation.
"Pledged Bonds" has the meaning specified in Section 2.06.
"Prime Rate" shall mean the rate of interest from time to time announced
publicly by the Administrative Agent at the Principal Office as its prime
commercial lending rate. Such rate is set by the Administrative Agent as a
general reference rate of interest, taking into account such factors as the
Administrative Agent may deem appropriate, it being understood that many of the
Administrative Agent=s commercial or other loans are priced in relation to such
rate, that it is not necessarily the lowest or best rate actually charged to any
customer and that the Administrative Agent may make various commercial or other
loans at rates of interest having no relationship to such rate.
"Principal Office" shall mean the principal office of the Administrative
Agent, presently located at 301 South College Street, TW-10, Charlotte, North
Carolina 28288-0608 or such other location as designated by the Administrative
Agent from time to time.
"Register" has the meaning specified in Section 10.05.
"Regulation A" means Regulation A of the Board, as the same is from time
to time in effect, and all official rulings and interpretations thereunder or
thereof.
"Regulation D" means Regulation D of the Board, as the same is from time
to time in effect, and all official rulings and interpretations thereunder or
thereof.
Five-Year Facility
18
<PAGE>
"Regulation T" means Regulation T of the Board, as the same is from time
to time in effect, and all official rulings and interpretations thereunder or
thereof.
"Regulation U" means Regulation U of the Board, as the same is from time
to time in effect, and all official rulings and interpretations thereunder or
thereof.
"Regulation X" means Regulation X of the Board, as the same is from time
to time in effect, and all official rulings and interpretations thereunder or
thereof.
"Related Parties" means, with respect to any specified Person, such
Person=s Affiliates and the respective directors, officers, employees, agents
and advisors of such Person and such Person=s Affiliates.
"Relevant Anniversary Date" has the meaning specified in Section 2.20.
"Required Lenders" means, at any time, Lenders having Revolving Credit
Exposures and unused Commitments representing 66b% of the sum of the total
Revolving Credit Exposures and unused Commitments at such time.
"Requirement of Law" shall mean any law, statute, code, ordinance, order,
determination, rule, regulation, judgment, decree, injunction, franchise,
permit, certificate, license, authorization or other directive or requirement
(whether or not having the force of law), including Environmental Laws, energy
regulations and occupational, safety and health standards or controls, of any
Governmental Authority.
"Reserve Requirement" means, for any day as applied to a Eurodollar Loan,
the aggregate (without duplication) of the rates (expressed as a decimal
fraction) of reserve requirements in effect on such day (including basic,
supplemental, marginal and emergency reserves under any regulations of the Board
or other Governmental Authority having jurisdiction with respect thereto)
dealing with reserve requirements prescribed for eurocurrency funding (currently
referred to as "Eurocurrency Liabilities" in Regulation D) maintained by a
member bank of the Federal Reserve System. Eurodollar Loans shall be deemed to
constitute Eurocurrency Liabilities and to be subject to such reserve
requirements without benefit of or credit for proration, exceptions or offsets
which may be available from time to time to any Lender under Regulation D.
"Responsible Officer" of either Borrower means the Chairman, Vice
Chairman, President, any Vice President, Chief Financial Officer, Controller or
Chief Accounting Officer of the General Partner.
"Restricted Payment" means any distribution (whether in cash, securities
or other property) with respect to any partnership interest in the Company, or
any payment (whether in cash, securities or other property), including any
deposit, on account of the purchase, redemption, retirement, acquisition,
cancellation or termination of any such partnership interest or any option or
other right to acquire any such partnership interest; provided, however, (A)
that
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distributions with respect to the partnership interests in the Company that do
not exceed, with respect to any fiscal quarter of the Company, the amount of
Available Cash for such quarter shall not constitute Restricted Payments so long
as in each case, both before and after the making of such distribution, no Event
of Default or Default shall have occurred and be continuing, (B) that any
partnership interest split, partnership interest reverse split, dividend of
Company partnership interests or similar transaction will not constitute a
Restricted Payment, (C) that the application by the Company of an aggregate
amount not in excess of $50,000,000.00 after the Effective Date to the purchase,
redemption, retirement, cancellation, or termination of partnership interests in
the Company will not constitute a Restricted Payment, so long as, both before
and after any such purchase, redemption, retirement, cancellation, or
termination, no Event of Default or Default shall have occurred and be
continuing, and (D) acquisitions by officers, directors and employees of the
Company of partnership interests in the Company through cash less exercise of
options pursuant to the Company=s Common Unit Option Plan shall not constitute
Restricted Payments.
"Revolving Borrowing" means (a) a borrowing comprised of Revolving Loans
of the same Type, made, converted or continued on the same date and, in the case
of Eurodollar Loans, as to which a single Interest Period is in effect or (b) a
Swingline Loan.
"Revolving Credit Exposure" means, with respect to any Lender at any time,
the sum of the outstanding principal amount of such Lender=s Revolving Loans and
its LC Exposure and Swingline Exposure at such time.
"Revolving Loan" means a Loan made pursuant to Section 2.03.
"Revolving Note" means a promissory note of the Company payable to the
order of each Lender, in substantially the form of Exhibit 1.01-E, together with
all modifications, extensions, renewals and rearrangements thereof.
"S&P" means Standard & Poor=s Ratings Services, a division of The
McGraw-Hill Companies, Inc.
"SFPP" means SFPP, L.P., a Delaware limited partnership.
"SFPP First Mortgage Notes" means those certain First Mortgage Notes
issued by SFPP (under its prior name Southern Pacific Pipe Lines Partnership,
L.P.) pursuant to a Note Agreement dated December 8, 1988 between SFPP and the
purchasers named therein, which on the Execution Date are outstanding in the
aggregate principal amount of $244,000,000.
"SFPP Revolving Credit Facility" means that certain Amended and Restated
Credit Agreement dated as of August 11, 1997 among SFPP, the lenders party
thereto, Bank of America National Trust and Savings Association, as agent, Chase
Bank of Texas, National Association (formerly Texas Commerce Bank National
Association), as syndication agent, Bank of Montreal, as documentation agent and
BancAmerica Securities, Inc., as arranger, providing for revolving loans to be
made to SFPP in an aggregate principal amount not exceeding $175,000,000 at any
time outstanding.
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20
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"Subsidiary" means, with respect to any Person (the "parent") at any date,
any corporation, limited liability company, partnership, association or other
entity the accounts of which would be consolidated with those of the parent in
the parent=s consolidated financial statements if such financial statements were
prepared in accordance with GAAP as of such date, as well as any other
corporation, limited liability company, partnership, association or other entity
(a) of which securities or other ownership interests representing more than 50%
of the equity or more than 50% of the ordinary voting power or, in the case of a
partnership, more than 50% of the general partnership interests are, as of such
date, owned, controlled or held, or (b) that is, as of such date, otherwise
controlled, by the parent or one or more subsidiaries of the parent or by the
parent and one or more subsidiaries of the parent. Unless the context otherwise
clearly requires, references in this Agreement to a "Subsidiary" or the
"Subsidiaries" refer to a Subsidiary or the Subsidiaries of the Company.
Notwithstanding the foregoing Plantation Pipe Line shall not be a Subsidiary of
the Company until such time as its assets and liabilities, profit or loss and
cash flow are required under GAAP to be consolidated with those of the Company.
"Subsidiary Borrower" has the meaning specified in the introduction to
this Agreement.
"Subsidiary Borrower Letter of Credit" means irrevocable letter of credit
No. 5113181 issued by First Union National Bank in the original face amount of
$24,128,548 for the account of the Subsidiary Borrower and for the benefit of
Bank One, Texas, NA, as trustee in the form of Exhibit 1.01C-1 hereto.
"Swingline Exposure" means, at any time, the aggregate principal amount of
all Swingline Loans outstanding at such time. The Swingline Exposure of any
Lender at any time shall be its Applicable Percentage of the total Swingline
Exposure at such time.
"Swingline Lender" means First Union National Bank, in its capacity as
lender of Swingline Loans hereunder.
"Swingline Loan" means a Loan made pursuant to Section 2.05.
"Swingline Note" means a promissory note of the Company payable to the
order of the Swingline Lender in substantially the form of Exhibit 1.01-F,
together with all modifications, extensions, renewals and rearrangements
thereof.
"Syndication Agent" has the meaning specified in the introduction to
this Agreement.
"Taxes" means any and all present or future taxes, levies, imposts,
duties, deductions, charges or withholdings imposed by any Governmental
Authority.
"Total Commitment" means the sum of the Commitments of the Lenders,
which on the Execution Date is $300,000,000.
"Transactions" means the execution, delivery and performance by the
Borrowers of this Agreement and the other Loan Documents, the borrowing of
Loans, the use of the proceeds
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21
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thereof and the Existing Letters of Credit and the issuance of the other
Letters of Credit hereunder.
"Trustee" means Bank One, Texas, NA, as the beneficiary of the Subsidiary
Borrower Letter of Credit and any successor beneficiary.
"Type", when used in reference to any Loan or Borrowing, refers to whether
the rate of interest on such Loan, or on the Loans comprising such Borrowing, is
determined by reference to the LIBOR Rate or the Alternate Base Rate.
"United States" and "U.S."each means United States of America.
"Utilization Fee" has the meaning specified in Section 2.12.
"Voting Stock" means, with respect to any Person, securities of any class
or classes of Capital Stock in such Person entitling holders thereof (whether at
all times or only so long as no senior class of stock has voting power by reason
of any contingency) to vote in the election of members of the Board of Directors
or other governing body of such Person or its managing member or its general
partner (or its managing general partner if there is more than one general
partner).
"Wholly-owned Subsidiary" means a Subsidiary of which all issued and
outstanding Capital Stock (excluding (a) in the case of a corporation,
directors= qualifying shares, (b) in the case of a limited partnership, a 2%
general partner interest and (c) in the case of a limited liability company, a
2% member interest) is directly or indirectly owned by the Company.
"Withdrawal Liability" means liability to a Multiemployer Plan as a result
of a complete or partial withdrawal from such Multiemployer Plan, as such terms
are defined in Part I of Subtitle E of Title IV of ERISA.
SECTION 1.02 Classification of Loans and Borrowings. For purposes of
this Agreement, Loans may be classified and referred to by Class (e.g., a
"Revolving Loan" or a "Competitive Loan") or by Type (e.g., a "Eurodollar Loan")
or by Class and Type (e.g., a "Eurodollar Revolving Loan" or a "Fixed Rate
Loan"). Borrowings also may be classified and referred to by Class (e.g., a
"Revolving Borrowing" or a "Competitive Borrowing") or by Type (e.g., a
"Eurodollar Borrowing" or a "Fixed Rate Borrowing") or by Class and Type (e.g.,
a "Eurodollar Revolving Borrowing" or a "Fixed Rate Competitive Borrowing").
SECTION 1.03 Accounting Terms; Changes in GAAP. All accounting and
financial terms used herein and not otherwise defined herein and the compliance
with each covenant contained herein which relates to financial matters shall be
determined in accordance with GAAP applied by the Company on a consistent basis,
except to the extent that a deviation therefrom is expressly stated. Should
there be a change in GAAP from that in effect on the Execution Date, such that
the defined terms set forth in Section 1.01 or the covenants set forth in
Article VI would then be calculated in a different manner or with different
components or would render the same not meaningful criteria for evaluating the
matters contemplated to be evidenced
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22
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by such covenants, (a) the Company and the Required Lenders agree, within the
60-day period following any such change, to negotiate in good faith and enter
into an amendment to this Agreement in order to conform the defined terms set
forth in Section 1.01 or the covenants set forth in Article VI, or both, in such
respects as shall reasonably be deemed necessary by the Required Lenders so that
the criteria for evaluating the matters contemplated to be evidenced by such
covenants are substantially the same criteria as were effective prior to any
such change in GAAP, and (b) the Company shall be deemed to be in compliance
with such covenants during the 60-day period following any such change, or until
the earlier date of execution of such amendment, if and to the extent that the
Company would have been in compliance therewith under GAAP as in effect
immediately prior to such change.
SECTION 1.04 Interpretation. (a) In this Agreement, unless a
clear contrary intention appears:
(i) the singular number includes the plural number and vice versa;
(ii) reference to any gender includes each other gender;
(iii)the words "herein," "hereof" and "hereunder" and other words of
similar import refer to this Agreement as a whole and not to any
particular Article, Section or other subdivision;
(iv) reference to any Person includes such Person=s successors and
assigns but, if applicable, only if such successors and assigns are
permitted by this Agreement, and reference to a Person in a particular
capacity excludes such Person in any other capacity or individually;
provided that nothing in this clause (iv) is intended to authorize any
assignment not otherwise permitted by this Agreement;
(v) except as expressly provided to the contrary herein, reference to
any agreement, document or instrument (including this Agreement) means
such agreement, document or instrument as amended, supplemented or
modified and in effect from time to time in accordance with the terms
thereof and, if applicable, the terms hereof, and reference to any Note or
other note includes any note issued pursuant hereto in extension or
renewal thereof and in substitution or replacement therefor;
(vi) unless the context indicates otherwise, reference to any
Article, Section, Schedule or Exhibit means such Article or Section hereof
or such Schedule or Exhibit hereto;
(vii)the word "including" (and with correlative meaning "include")
means including, without limiting the generality of any description
preceding such term;
(viii) with respect to the determination of any period of time,
except as expressly provided to the contrary, the word "from" means "from
and including" and the word "to" means "to but excluding";
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(ix) reference to any law, rule or regulation means such as amended,
modified, codified or reenacted, in whole or in part, and in effect from
time to time; and
(x) the words "asset" and "property" shall be construed to have the
same meaning and effect and refer to any and all tangible and intangible
assets and properties.
ARTICLE II.
THE CREDITS
SECTION 2.01 Commitments. Subject to the terms and conditions set
forth herein, each Lender agrees to make Revolving Loans to the Company from
time to time during the Availability Period in an aggregate principal amount
that will not result in (a) such Lender=s Revolving Credit Exposure exceeding
such Lender=s Commitment or (b) the sum of the total Revolving Credit Exposures,
plus the aggregate principal amount of outstanding Competitive Loans, exceeding
the Total Commitment. In furtherance of the foregoing, the aggregate amount of
the Total Commitment shall be deemed used from time to time to the extent of the
aggregate amount of the Competitive Loans then outstanding, and such deemed use
of the Total Commitment shall be applied to the Lenders ratably according to
their respective Commitments. Within the foregoing limits and subject to the
terms and conditions set forth herein, the Company may borrow, prepay and
reborrow Revolving Loans.
SECTION 2.02 Loans and Borrowings. (a) Each Revolving Loan shall be
made as part of a Borrowing consisting of Revolving Loans made by the Lenders
ratably in accordance with their respective Commitments. The failure of any
Lender to make any Loan required to be made by it shall not relieve any other
Lender of its obligations hereunder; provided that the Commitments and
Competitive Bids of the Lenders are several and no Lender shall be responsible
for any other Lender=s failure to make Loans as required.
(b) Subject to Section 2.14, (i) each Revolving Borrowing shall be
comprised entirely of ABR Loans or Eurodollar Loans as the Company may request
in accordance herewith, and (ii) each Competitive Borrowing shall be comprised
entirely of Eurodollar Loans or Fixed Rate Loans as the Company may request in
accordance herewith. Each Swingline Loan shall be an ABR Loan. Each Lender at
its option may make any Eurodollar Loan by causing any domestic or foreign
branch or Affiliate of such Lender to make such Loan; provided that any exercise
of such option shall not affect the obligation of the Company to repay such Loan
in accordance with the terms of this Agreement.
(c) At the commencement of each Interest Period for any Eurodollar
Revolving Borrowing, such Borrowing shall be in an aggregate amount that is an
integral multiple of $1,000,000 and not less than $3,000,000. At the time that
each ABR Revolving Borrowing is made, such Borrowing shall be in an aggregate
amount that is an integral multiple of $1,000,000 and not less than $1,000,000;
provided that an ABR Revolving Borrowing may be in an aggregate amount that is
equal to the entire unused balance of the Total Commitment or that is required
to finance the reimbursement of an LC Disbursement as contemplated by Section
2.06(f). Each Swingline Loan shall be in an amount that is an integral multiple
of $100,000 and
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not less than $5,000,000. Each Competitive Bid Request shall be in an aggregate
amount that is an integral multiple of $1,000,000 and not less than $25,000,000.
Borrowings of more than one Type and Class may be outstanding at the same time;
provided that there shall not at any time be more than a total of six Eurodollar
Revolving Borrowings outstanding.
(d) Notwithstanding any other provision of this Agreement, the
Company shall not be entitled to request, or to elect to convert or continue,
any Borrowing if the Interest Period requested with respect thereto would end
after the Maturity Date.
SECTION 2.03 Requests for Revolving Borrowings. To request a
Revolving Borrowing, the Company shall notify the Administrative Agent of such
request by telephone (a) in the case of a Eurodollar Borrowing, not later than
10:00 a.m., Charlotte, North Carolina, time, three Business Days before the date
of the proposed Borrowing (provided, however, no such request may be given prior
to the third Business Day after the Effective Date) and (b) in the case of an
ABR Borrowing, not later than 10:00 a.m., Charlotte, North Carolina, time, on
the date of the proposed Borrowing. Each such telephonic Borrowing Request shall
be irrevocable and shall be confirmed promptly by hand delivery or telecopy to
the Administrative Agent of a written Borrowing Request in a form of Exhibit
2.03 (a "Borrowing Request") and signed by the Company. Each such telephonic and
written Borrowing Request shall specify the following information in compliance
with Section 2.02:
(i) the aggregate amount of the requested Borrowing;
(ii) the date of such Borrowing, which shall be a Business Day;
(iii)whether such Borrowing is to be an ABR Borrowing or a
Eurodollar Borrowing;
(iv) in the case of a Eurodollar Borrowing, the initial Interest
Period to be applicable thereto, which shall be a period contemplated by
the definition of the term "Interest Period"; and
(v) the location and number of the Company=s account to which funds
are to be disbursed, which shall comply with the requirements of Section
2.07.
If no election as to the Type of Revolving Borrowing is specified, then the
requested Revolving Borrowing shall be an ABR Borrowing. If no Interest Period
is specified with respect to any requested Eurodollar Revolving Borrowing, then
the Company shall be deemed to have selected an Interest Period of one month=s
duration. Promptly following receipt of a Borrowing Request in accordance with
this Section 2.03, the Administrative Agent shall advise each Lender of the
details thereof and of the amount of such Lender=s Loan to be made as part of
the requested Borrowing.
SECTION 2.04 Competitive Bid Procedure. (a) Subject to the terms and
conditions set forth herein, from time to time during the Availability Period
the Company may request Competitive Bids and may (but shall not have any
obligation to) accept Competitive Bids
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and borrow Competitive Loans; provided that the sum of the total Revolving
Credit Exposures plus the aggregate principal amount of outstanding Competitive
Loans, at any time shall not exceed the Total Commitment. To request Competitive
Bids, the Company shall notify the Administrative Agent of such request by
telephone, in the case of a Eurodollar Borrowing, not later than 10:00 a.m.,
Charlotte, North Carolina, time, four Business Days before the date of the
proposed Borrowing and, in the case of a Fixed Rate Borrowing, not later than
10:00 a.m., Charlotte, North Carolina, time, one Business Day before the date of
the proposed Borrowing; provided that the Company may submit up to (but not more
than) three Competitive Bid Requests on the same day, but a Competitive Bid
Request shall not be made on any of the five Business Days next succeeding the
date of any previous Competitive Bid Request, unless any and all such previous
Competitive Bid Requests shall have been withdrawn or all Competitive Bids
received in response thereto rejected. Each such telephonic Competitive Bid
Request shall be confirmed promptly by hand delivery or telecopy to the
Administrative Agent of a written Competitive Bid Request signed by the Company.
Each such telephonic and written Competitive Bid Request shall specify the
following information in compliance with Section 2.02:
(i) the aggregate amount of the requested Borrowing;
(ii) the date of such Borrowing, which shall be a Business Day;
(iii)whether such Borrowing is to be a Eurodollar Borrowing or a
Fixed Rate Borrowing;
(iv) the Interest Period to be applicable to such Borrowing, which
shall be a period contemplated by the definition of the term "Interest
Period"; and
(v) the location and number of the Company=s account to which funds
are to be disbursed, which shall comply with the requirements of Section
2.07.
Promptly following receipt of a Competitive Bid Request in accordance with this
Section, the Administrative Agent shall notify the Lenders of the details
thereof by telecopy (in substantially the form set forth in Exhibit 2.04-B),
inviting the Lenders to submit Competitive Bids.
(b) Each Lender may (but shall not have any obligation to) make one
or more Competitive Bids to the Company in response to a Competitive Bid
Request. Each Competitive Bid by a Lender must be substantially the form of
Exhibit 2.04-C and must be received by the Administrative Agent by telecopy, in
the case of a Eurodollar Competitive Borrowing, not later than 10:00 a.m.,
Charlotte, North Carolina, time, three Business Days before the proposed date of
such Competitive Borrowing, and in the case of a Fixed Rate Borrowing, not later
than 10:00 a.m., Charlotte, North Carolina, time, on the proposed date of such
Competitive Borrowing. Competitive Bids that do not conform substantially to the
form of Exhibit 2.04-C may be rejected by the Administrative Agent, and the
Administrative Agent shall notify the applicable Lender as promptly as
practicable. Each Competitive Bid shall specify (i) the principal amount (which
shall be a minimum of $5,000,000 and an integral multiple of $1,000,000 and
which may equal the entire principal amount of the Competitive Borrowing
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requested by the Company) of the Competitive Loan or Loans that the Lender is
willing to make, (ii) the Competitive Bid Rate or Rates at which the Lender is
prepared to make such Loan or Loans (expressed as a percentage rate per annum in
the form of a decimal to no more than four decimal places) and (iii) the
Interest Period applicable to each such Loan and the last day thereof (which
shall conform to that specified in the Company=s related Competitive Bid
Request).
(c) The Administrative Agent shall promptly notify the Company by
telecopy of the Competitive Bid Rate and the principal amount specified in each
Competitive Bid and the identity of the Lender that shall have made such
Competitive Bid.
(d) Subject only to the provisions of this paragraph, the Company may
accept or reject any Competitive Bid in whole or (to the extent herein below
provided) in part. The Company shall notify the Administrative Agent by
telephone, confirmed by telecopy in a form approved by the Administrative Agent,
whether and to what extent it has decided to accept or reject each Competitive
Bid, in the case of a Eurodollar Competitive Borrowing, not later than 11:30
a.m., Charlotte, North Carolina, time, three Business Days before the date of
the proposed Competitive Borrowing, and in the case of a Fixed Rate Borrowing,
not later than 11:30 a.m., Charlotte, North Carolina, time, on the proposed date
of the Competitive Borrowing; provided that (i) the failure of the Company to
give such notice shall be deemed to be a rejection of each Competitive Bid, (ii)
the Company shall not accept a Competitive Bid made at a particular Competitive
Bid Rate if the Company rejects a Competitive Bid made at a lower Competitive
Bid Rate, (iii) the aggregate amount of the Competitive Bids accepted by the
Company shall not exceed the aggregate amount of the requested Competitive
Borrowing specified in the related Competitive Bid Request, (iv) to the extent
necessary to comply with clause (iii) above, the Company may accept Competitive
Bids at the same Competitive Bid Rate in part, which acceptance, in the case of
multiple Competitive Bids at such Competitive Bid Rate, shall be made pro rata
in accordance with the amount of each such Competitive Bid, and (v) except
pursuant to clause (iv) above, no Competitive Bid shall be accepted for a
Competitive Loan unless such Competitive Loan is in a minimum principal amount
of $5,000,000 and an integral multiple of $1,000,000; provided further that if a
Competitive Loan must be in an amount less than $5,000,000 because of the
provisions of clause (iv) above, such Competitive Loan may be for a minimum of
$1,000,000 or any integral multiple thereof, and in calculating the pro rata
allocation of acceptances of portions of multiple Competitive Bids at a
particular Competitive Bid Rate pursuant to clause (iv) the amounts shall be
rounded to integral multiples of $1,000,000 in a manner determined by the
Company. A notice given by the Company pursuant to this paragraph shall be
irrevocable.
(e) The Administrative Agent shall promptly notify each bidding
Lender by telecopy whether or not its Competitive Bid has been accepted (and, if
so, the amount and Competitive Bid Rate so accepted), and each successful bidder
will thereupon become bound, subject to the terms and conditions hereof, to make
the Competitive Loan in respect of which its Competitive Bid has been accepted.
After completing the notifications referred to in the immediately preceding
sentence, the Administrative Agent shall notify each Lender of the aggregate
principal amount of all Competitive Bids accepted.
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(f) Upon determination by the Administrative Agent of the LIBOR Rate
applicable to any Eurodollar Competitive Loan to be made by any Lender pursuant
to a Competitive Bid that has been accepted by a Company pursuant to Section
2.04(d), the Administrative Agent shall notify such Lender of (i) the applicable
LIBOR Rate and (ii) the sum of the applicable LIBOR Rate plus the Margin bid by
such Lender.
(g) If the Administrative Agent or any of its Affiliates shall at any
time have a Commitment hereunder and shall elect to submit a Competitive Bid in
its capacity as a Lender, it shall submit such Competitive Bid directly to the
Company at least one quarter of an hour earlier than the time by which the other
Lenders are required to submit their Competitive Bids to the Administrative
Agent pursuant to paragraph (b) of this Section.
SECTION 2.05 Swingline Loans. (a) Subject to the terms and conditions
set forth herein, the Swingline Lender agrees to make Swingline Loans to the
Company from time to time during the Availability Period, in an aggregate
principal amount at any time outstanding that will not result in (i) the
aggregate principal amount of outstanding Swingline Loans exceeding $25,000,000
or (ii) the sum of the total Revolving Credit Exposures, plus the aggregate
principal amount of outstanding Competitive Loans, exceeding the Total
Commitment; provided that the Swingline Lender shall not be required to make a
Swingline Loan to refinance an outstanding Swingline Loan. Within the foregoing
limits and subject to the terms and conditions set forth herein, the Company may
borrow, prepay and reborrow Swingline Loans.
(b) To request a Swingline Loan, the Company shall notify the
Administrative Agent of such request by telephone (confirmed by telecopy), not
later than 12:00 noon, Charlotte, North Carolina, time, on the day of a proposed
Swingline Loan. Each such notice shall be irrevocable and shall specify the
requested date (which shall be a Business Day) and amount of the requested
Swingline Loan. The Administrative Agent (if not the Swingline Lender) will
promptly advise the Swingline Lender of any such notice received from the
Company. So long as the Swingline Lender and the Administrative Agent are First
Union National Bank, or (if not First Union National Bank), the same institution
is acting both as the Administrative Agent and as the Swingline Lender, the
Swingline Lender shall make each Swingline Loan available to the Company by
means of a credit to the deposit account of the Company with the Swingline
Lender identified in the most recent Notice of Account Designation by 3:00 p.m.,
Charlotte, North Carolina, time, on the requested date of such Swingline Loan.
(c) The Swingline Lender may by written notice given to the
Administrative Agent not later than 12:00 noon, Charlotte, North Carolina, time,
on any Business Day require the Lenders to acquire participations on such
Business Day in all or a portion of the Swingline Loans outstanding. Such notice
shall specify the aggregate amount of Swingline Loans in which Lenders will
participate. Promptly upon receipt of such notice, the Administrative Agent will
give notice thereof to each Lender, specifying in such notice such Lender=s
Applicable Percentage of such Swingline Loan or Loans. Each Lender hereby
absolutely and unconditionally agrees, upon receipt of notice as provided above,
to pay to the Administrative Agent, for the account of the Swingline Lender,
such Lender=s Applicable Percentage of such
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Swingline Loan or Loans. Each Lender acknowledges and agrees that its obligation
to acquire participations in Swingline Loans pursuant to this paragraph is
absolute and unconditional and shall not be affected by any circumstance
whatsoever, including the occurrence and continuance of a Default or Event of
Default or reduction or termination of the Total Commitment, and that each such
payment shall be made without any offset, abatement, withholding or reduction
whatsoever. Each Lender shall comply with its obligation under this paragraph by
wire transfer of immediately available funds, in the same manner as provided in
Section 2.07 with respect to Loans made by such Lender (and Section 2.07 shall
apply, mutatis mutandis, to the payment obligations of the Lenders), and the
Administrative Agent shall promptly pay to the Swingline Lender the amounts so
received by it from the Lenders. The Administrative Agent shall notify the
Company of any participations in any Swingline Loan acquired pursuant to this
paragraph, and thereafter payments in respect of such Swingline Loan shall be
made to the Administrative Agent and not to the Swingline Lender. Any amounts
received by the Swingline Lender from the Company (or other party on behalf of
the Company) in respect of a Swingline Loan after receipt by the Swingline
Lender of the proceeds of a sale of participations therein shall be promptly
remitted to the Administrative Agent; any such amounts received by the
Administrative Agent shall be promptly remitted by the Administrative Agent to
the Lenders that shall have made their payments pursuant to this paragraph and
to the Swingline Lender, as their interests may appear. The purchase of
participations in a Swingline Loan pursuant to this paragraph shall not relieve
the Company or the Subsidiary Borrower of any default in the payment thereof.
SECTION 2.06 Letters of Credit. (a) Existing Letters of Credit. The
parties hereto acknowledge that on and after the Effective Date the Existing
Letters of Credit shall be Letters of Credit issued by the Issuing Bank for the
account of the Subsidiary Borrower in the case of the Subsidiary Borrower Letter
of Credit, and the Company with respect to all other Existing Letters of Credit
pursuant to this Agreement. The Subsidiary Borrower hereby pledges, assigns,
transfers and delivers to the Issuing Bank all its right, title and interest to
all Bonds purchased with funds drawn under the Subsidiary Borrower Letter of
Credit (the "Pledged Bonds"), and hereby grants to the Issuing Bank a first lien
on, and security interest in, its rights, title and interest in and to the
Pledged Bonds, the interest thereon and all proceeds thereof or substitutions
therefor, as collateral security for the prompt and complete payment when due of
the amounts payable in respect of the Subsidiary Borrower Letter of Credit.
During such time as any Bonds are Pledged Bonds, the Issuing Bank shall be
entitled to exercise all of the rights of a holder of Bonds with respect to
voting, consenting and directing the Trustee as if the Issuing Bank were the
owner of such Bonds, and the Subsidiary Borrower hereby grants and assigns to
the Issuing Bank all such rights.
(b) General. Subject to the terms and conditions set forth herein,
the Company may request the issuance of Letters of Credit for its own account or
for its own account and that of any Subsidiary, in a form reasonably acceptable
to the Administrative Agent and the Issuing Bank, at any time and from time to
time during the Availability Period. In the event of any inconsistency between
the terms and conditions of this Agreement and the terms and conditions of any
Application (as defined in Section 2.06(c)) or other agreement submitted by the
Company to, or entered into by the Company with, the Issuing Bank relating to
any Letter of Credit, the terms and conditions of this Agreement shall control.
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(c) Notice of Issuance, Amendment, Renewal, Extension; Certain
Conditions. To request the issuance of a Letter of Credit (or the amendment,
renewal or extension of an outstanding Letter of Credit), the Company shall hand
deliver or telecopy (or transmit by electronic communication, if arrangements
for doing so have been approved by the Issuing Bank) to the Issuing Bank and the
Administrative Agent (not less than five Business Days in advance of the
requested date of issuance, amendment, renewal or extension) a notice (a "Letter
of Credit Request") requesting the issuance of a Letter of Credit, or
identifying the Letter of Credit to be amended, renewed or extended, the date of
issuance, amendment, renewal or extension, the date on which such Letter of
Credit is to expire (which shall comply with Section 2.06(d)), the amount of
such Letter of Credit, the name and address of the beneficiary thereof and such
other information as shall be necessary to prepare, amend, renew or extend such
Letter of Credit. If requested by the Issuing Bank, the Company also shall
submit a letter of credit application on the Issuing Bank=s standard form (an
"Application") in connection with any request for a Letter of Credit. A Letter
of Credit shall be issued, amended, renewed or extended only if (and upon
issuance, amendment, renewal or extension of each Letter of Credit the Company
shall be deemed to represent and warrant that), after giving effect to such
issuance, amendment, renewal or extension (i) the LC Exposure shall not exceed
$100,000,000 and (ii) the sum of the total Revolving Credit Exposures, plus the
aggregate principal amounts of outstanding Competitive Loans, at any time shall
not exceed the Total Commitment.
(d) Expiration Date. Each Letter of Credit (other than the Subsidiary
Borrower Letter of Credit) shall expire at or prior to the close of business on
the earlier of (i) the date one year after the date of the issuance of such
Letter of Credit (or, in the case of any renewal or extension thereof, one year
after such renewal or extension) and (ii) the date that is five Business Days
prior to the Maturity Date.
(e) Participations. On the Effective Date with respect to the
Existing Letters of Credit and by the issuance of each other Letter of Credit
(or an amendment to a Letter of Credit increasing the amount thereof) and
without any further action on the part of the Issuing Bank or the Lenders, the
Issuing Bank hereby grants to each Lender, and each Lender hereby acquires from
the Issuing Bank, a participation in such Letter of Credit equal to such
Lender=s Applicable Percentage of the aggregate amount available to be drawn
under such Letter of Credit. In consideration and in furtherance of the
foregoing, each Lender hereby absolutely and unconditionally agrees to pay to
the Administrative Agent, for the account of the Issuing Bank, such Lender=s
Applicable Percentage of each LC Disbursement made by the Issuing Bank and not
reimbursed by the Company on the date due as provided in Section 2.06(f), or of
any reimbursement payment required to be refunded to the Company for any reason.
Each Lender acknowledges and agrees that its obligation to acquire
participations pursuant to this paragraph in respect of Letters of Credit is
absolute and unconditional and shall not be affected by any circumstance
whatsoever, including any amendment, renewal or extension of any Letter of
Credit or the occurrence and continuance of a Default or an Event of Default or
reduction or termination of the Commitments, and that each such payment shall be
made without any offset, abatement, withholding or reduction whatsoever.
(f) Reimbursement. If the Issuing Bank shall make any LC Disbursement
in respect of a Letter of Credit, the Borrower for whose account such Letter of
Credit was issued
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shall reimburse such LC Disbursement by paying to the Administrative Agent an
amount equal to such LC Disbursement not later than 12:00 noon, Charlotte, North
Carolina, time, on the date that such LC Disbursement is made, if such Borrower
shall have received notice of such LC Disbursement prior to 10:00 a.m.,
Charlotte, North Carolina, time, on such date, or, if such notice has not been
received by such Borrower prior to such time on such date, then not later than
12:00 noon, Charlotte, North Carolina, time, on (i) the Business Day that such
Borrower receives such notice, if such notice is received prior to 10:00 a.m.,
Charlotte, North Carolina, time, on the day of receipt, or (ii) the Business Day
immediately following the day that such Borrower receives such notice, if such
notice is not received prior to such time on the day of receipt; provided that
if such Borrower fails to make such payment when due, then, upon demand by the
Issuing Bank sent to the Administrative Agent and each Lender before 10:00 a.m.,
Charlotte, North Carolina, time, each Lender shall pursuant to Section 2.07 on
the same day make available to the Administrative Agent for delivery to the
Issuing Bank, immediately available funds in an amount equal to such Lender=s
Applicable Percentage of the amount of such payment by the Issuing Bank, and the
funding of such amount shall be treated as the funding of an ABR Loan by such
Lender to such Borrower. Notwithstanding anything herein or in any other Loan
Document to the contrary, the funding obligations of the Lenders set forth in
this Section 2.06(f) shall be binding regardless of whether or not a Default or
an Event of Default shall exist or the other conditions precedent in Article III
are satisfied at such time. If and to the extent any Lender fails to effect any
payment due from it under this Section 2.06(f) to the Administrative Agent, then
interest shall accrue on the obligation of such Lender to make such payment from
the date such payment became due to the date such obligation is paid in full at
a rate per annum equal to the Federal Funds Effective Rate. The failure of any
Lender to pay its Applicable Percentage of any payment under any Letter of
Credit shall not relieve any other Lender of its obligation hereunder to pay to
the Administrative Agent its Applicable Percentage of any payment under any
Letter of Credit on the date required, as specified above, but no Lender shall
be responsible for the failure of any other Lender to pay to the Administrative
Agent such other Lender=s Applicable Percentage of any such payment.
(g) Obligations Absolute. The Company=s obligation to reimburse (or
in the case of the Subsidiary Borrower Letter of Credit, the Subsidiary
Borrower=s obligation to reimburse) LC Disbursements as provided in Section
2.06(f) shall, to the extent permitted by law, be absolute, unconditional and
irrevocable, and shall be performed strictly in accordance with the terms of
this Agreement under any and all circumstances whatsoever and irrespective of:
(i) any lack of validity or enforceability of any Letter of Credit,
this Agreement or any other Loan Document, or any term or provision herein
or therein;
(ii) any amendment or waiver of or any consent to departure from all
or any of the provisions of any Letter of Credit, this Agreement or any
other Loan Document;
(iii)the existence of any claim, setoff, defense or other right that
either Borrower, or any Affiliate thereof or any other Person may at any
time have against the beneficiary under any Letter of Credit, the Issuing
Bank, the Administrative Agent or any
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31
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Lender or any other Person, whether in connection with this Agreement or
any other related or unrelated agreement or transaction;
(iv) any draft or other document presented under a Letter of Credit
proving to be forged, fraudulent or invalid in any respect or any
statement therein being untrue or inaccurate in any respect;
(v) payment by the Issuing Bank under a Letter of Credit against
presentation of a draft or other document that does not comply with the
terms of such Letter of Credit; and
(vi) any other act or omission to act or delay of any kind of the
Issuing Bank, the Lenders, the Administrative Agent or any other Person or
any other event or circumstance whatsoever, whether or not similar to any
of the foregoing, that might, but for the provisions of this Section 2.06,
constitute a legal or equitable discharge of either Borrower=s obligations
hereunder.
Neither the Administrative Agent, the Lenders nor the Issuing Bank, nor any of
their Related Parties, shall have any liability or responsibility by reason of
or in connection with the issuance or transfer of any Letter of Credit or any
payment or failure to make any payment thereunder, including any of the
circumstances specified in clauses (i) through (vi) above, as well as any error,
omission, interruption, loss or delay in transmission or delivery of any draft,
notice or other communication under or relating to any Letter of Credit
(including any document required to make a drawing thereunder), any error in
interpretation of technical terms or any consequence arising from causes beyond
the control of the Issuing Bank; provided that the foregoing shall not be
construed to excuse the Issuing Bank from liability to the Borrower for whose
account such Letter of Credit was issued to the extent of any direct damages (as
opposed to consequential damages, claims in respect of which are hereby waived
by each Borrower to the extent permitted by applicable law) suffered by such
Borrower that are caused by the Issuing Bank=s failure to exercise the agreed
standard of care (as set forth below) in determining whether drafts and other
documents presented under a Letter of Credit comply with the terms thereof. The
parties hereto expressly agree that the Issuing Bank shall have exercised the
agreed standard of care in the absence of gross negligence, willful misconduct
or unlawful conduct on the part of the Issuing Bank. Without limiting the
generality of the foregoing, it is understood that the Issuing Bank may accept
documents that appear on their face to be in substantial compliance with the
terms of a Letter of Credit, without responsibility for further investigation,
regardless of any notice or information to the contrary, and may make payment
upon presentation of documents that appear on their face to be in substantial
compliance with the terms of such Letter of Credit; provided that the Issuing
Bank shall have the right, in its sole discretion, to decline to accept such
documents and to make such payment if such documents are not in strict
compliance with the terms of such Letter of Credit.
(h) Disbursement Procedures. The Issuing Bank shall, promptly
following its receipt thereof, examine all documents purporting to represent a
demand for payment under a Letter of Credit. The Issuing Bank shall promptly
notify the Administrative Agent and the Borrower for whose account such Letter
of Credit was issued by telephone (confirmed by
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telecopy) of such demand for payment and whether the Issuing Bank has made or
will make an LC Disbursement thereunder; provided that any failure to give or
delay in giving such notice shall not relieve either Borrower of its obligation
to reimburse the Issuing Bank and the Lenders with respect to any such LC
Disbursement.
(i) Interim Interest. If the Issuing Bank shall make any LC
Disbursement, then, unless the Company (or, in the case of the Subsidiary
Borrower Letter of Credit, the Subsidiary Borrower) shall reimburse such LC
Disbursement in full on the date specified in Section 2.06(f), the unpaid amount
thereof shall bear interest, for each day from the date such LC Disbursement is
made to the date that the Company (or, in the case of the Subsidiary Borrower
Letter of Credit, the Subsidiary Borrower) reimburses such LC Disbursement (or
all Lenders make the payments to the Administrative Agent contemplated by
Section 2.06(f) and treated pursuant to said Section as constituting the funding
of ABR Loans), at the rate per annum then applicable to ABR Revolving Loans.
(j) Replacement of the Issuing Bank. The Issuing Bank may be replaced
at any time by written agreement among the Borrowers, the Administrative Agent,
the replaced Issuing Bank and the successor Issuing Bank. The Administrative
Agent shall notify the Lenders of any such replacement of the Issuing Bank. At
the time any such replacement shall become effective, the Borrowers shall pay
all unpaid fees accrued for the account of the replaced Issuing Bank pursuant to
Section 2.12(b). From and after the effective date of any such replacement, (i)
the successor Issuing Bank shall have all the rights and obligations of the
Issuing Bank under this Agreement with respect to Letters of Credit to be issued
thereafter and (ii) references herein to the term "Issuing Bank" shall be deemed
to refer to such successor or to any previous Issuing Bank, or to such successor
and all previous Issuing Banks, as the context shall require. After the
replacement of an Issuing Bank hereunder, the replaced Issuing Bank shall remain
a party hereto and shall continue to have all the rights and obligations of an
Issuing Bank under this Agreement with respect to Letters of Credit issued by it
prior to such replacement, but shall not be required to issue additional Letters
of Credit.
(k) Cash Collateralization. If (i) any Event of Default shall occur
and be continuing, on the Business Day that the Company receives notice from the
Administrative Agent or the Required Lenders (or, if the maturity of the Loans
has been accelerated, Lenders with LC Exposure representing greater than 66b% of
the total LC Exposure) demanding the deposit of cash collateral pursuant to this
paragraph or (ii) a Change in Control shall occur, the Company shall deposit in
an account with the Administrative Agent, in the name of the Administrative
Agent and for the benefit of the Lenders, an amount in cash equal to the LC
Exposure as of such date plus any accrued and unpaid interest thereon; provided
that the obligation to deposit such cash collateral shall become effective
immediately, and such deposit shall become immediately due and payable, without
demand or notice of any kind, upon the occurrence of any Event of Default with
respect to either Borrower described in clause (g) or (h) of Section 7.01. Such
deposit shall be held by the Administrative Agent as collateral for the payment
and performance of the obligations of the Borrowers under this Agreement and the
other Loan Documents. The Administrative Agent shall have exclusive dominion and
control, including the exclusive right of withdrawal, over such account. Other
than any interest earned on the investment of such deposits (which investments
shall be made at the option and sole
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discretion of the Administrative Agent, but only in investments rated at least
AA (or equivalent) by at least one nationally recognized rating agency, if such
deposit has been made by reason of a Change in Control having occurred, and in
any event at the Company=s risk and expense) such deposits shall not bear
interest. Interest or profits, if any, on such investments shall accumulate in
such account and may, subject to the immediately preceding sentence be
reinvested from time to time. Moneys in such account shall be applied by the
Administrative Agent to reimburse the Issuing Bank for LC Disbursements for
which it has not been reimbursed and, to the extent not so applied, shall be
held for the satisfaction of the reimbursement obligations of the Borrowers for
the LC Exposure at such time or, if the maturity of the Loans has been
accelerated (but subject to the consent of Lenders with LC Exposure representing
greater than 66b% of the total LC Exposure), be applied to satisfy other
obligations of the Borrowers under this Agreement and the other Loan Documents.
If the Company is required to provide an amount of cash collateral hereunder as
a result of the occurrence of an Event of Default, such amount (to the extent
not applied as aforesaid) shall be returned to the Company within three Business
Days after all Events of Default have been cured or waived.
SECTION 2.07 Funding of Borrowings. (a) Each Lender shall make each
Loan to be made by it hereunder on the proposed date thereof by wire transfer of
immediately available funds by 2:00 p.m., Charlotte, North Carolina, time, to
the account of the Administrative Agent most recently designated by it for such
purpose by notice to the Lenders; provided that Swingline Loans shall be made as
provided in Section 2.05. Not later than 2:00 p.m. (Charlotte, North Carolina,
time) on the proposed Borrowing Date, each Lender will make available to the
Administrative Agent, for the account of the Company, at the office of the
Administrative Agent in funds immediately available to the Administrative Agent,
such Lender=s Loans to be made on such Borrowing Date. The Company hereby
irrevocably authorizes the Administrative Agent to disburse the proceeds of each
Borrowing requested pursuant to this Section 2.07 in immediately available funds
by crediting or wiring such proceeds to the deposit account of the Company
identified in the most recent Notice of Account Designation substantially in the
form of Exhibit 2.07 hereto (a "Notice of Account Designation") delivered by the
Company to the Administrative Agent or may be otherwise agreed upon by the
Company and the Administrative Agent from time to time; provided that ABR
Revolving Loans made to finance the reimbursement of an LC Disbursement as
provided in Sections 2.06(e) and (f) shall be remitted by the Administrative
Agent to the Issuing Bank.
(b) Unless the Administrative Agent shall have received notice from a
Lender prior to the proposed date of any Borrowing (or prior to 12:00 noon,
Charlotte, North Carolina, time, on such date in the case of an ABR Borrowing)
that such Lender will not make available to the Administrative Agent such
Lender=s share of such Borrowing, the Administrative Agent may assume that such
Lender has made such share available on such date in accordance with Section
2.07(a) and may, in reliance upon such assumption, make available to the Company
a corresponding amount. In such event, if a Lender has not in fact made its
share of the applicable Borrowing available to the Administrative Agent, then
the applicable Lender and the Company severally agree to pay to the
Administrative Agent forthwith on demand such corresponding amount with interest
thereon, for each day from the date such amount is made available to the Company
to the date of payment to the Administrative Agent, at (i) in the case of such
Lender, the Federal Funds Effective Rate or (ii) in the case of the Company, the
interest rate applicable to
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ABR Loans. If such Lender pays such amount to the Administrative Agent, then
such amount shall constitute such Lender=s Loan included in such Borrowing.
SECTION 2.08 Interest Elections. (a) Subject to Section 2.14, each
Revolving Borrowing initially shall be of the Type specified in the applicable
Borrowing Request and, in the case of a Eurodollar Revolving Borrowing, shall
have an initial Interest Period as specified in such Borrowing Request.
Thereafter, subject to Section 2.14, the Company may elect to convert such
Borrowing to a different Type or to continue such Borrowing and, in the case of
a Eurodollar Revolving Borrowing, may elect Interest Periods therefor, all as
provided in this Section 2.08. The Company may elect different options with
respect to different portions of the affected Borrowing, in which case each such
portion shall be allocated ratably among the Lenders holding the Loans
comprising such Borrowing, and the Loans comprising each such portion shall be
considered a separate Borrowing. This Section 2.08 shall not apply to
Competitive Borrowings or Swingline Borrowings, which may not be converted or
continued.
(b) To make an election pursuant to this Section 2.08, the Company
shall notify the Administrative Agent of such election by telephone by the time
that a Borrowing Request would be required under Section 2.03 if the Company
were requesting a Revolving Borrowing of the Type resulting from such election
to be made on the effective date of such election. Each such telephonic Interest
Election Request shall be irrevocable and shall be confirmed promptly by hand
delivery or telecopy to the Administrative Agent of a written Interest Election
Request in the form of Exhibit 2.08 (an "Interest Election Request").
(c) Each telephonic and written Interest Election Request shall
specify the following information in compliance with Section 2.02:
(i) the Borrowing to which such Interest Election Request applies
and, if different options are being elected with respect to different
portions thereof, the portions thereof to be allocated to each resulting
Borrowing (in which case the information to be specified pursuant to
clauses (iii) and (iv) below shall be specified for each resulting
Borrowing);
(ii) the effective date of the election made pursuant to such
Interest Election Request, which shall be a Business Day;
(iii)whether the resulting Borrowing is to be an ABR Borrowing or a
Eurodollar Borrowing; and
(iv) if the resulting Borrowing is a Eurodollar Borrowing, the
Interest Period to be applicable thereto after giving effect to such
election, which shall be a period contemplated by the definition of the
term "Interest Period".
If any such Interest Election Request requests a Eurodollar Borrowing but does
not specify an Interest Period, then the Company shall be deemed to have
selected an Interest Period of one month=s duration.
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(d) Promptly following receipt of an Interest Election Request, the
Administrative Agent shall advise each Lender of the details thereof and of such
Lender=s portion of each resulting Borrowing.
(e) If the Company fails to deliver a timely Interest Election
Request with respect to a Eurodollar Revolving Borrowing prior to the end of the
Interest Period applicable thereto, then, unless such Borrowing is repaid as
provided herein, at the end of such Interest Period such Borrowing shall be
converted to an ABR Borrowing. Notwithstanding any contrary provision hereof, if
and so long as an Event of Default is continuing (i) no outstanding Revolving
Borrowing may be converted to or continued as a Eurodollar Borrowing and (ii)
unless repaid, each Eurodollar Revolving Borrowing shall be converted to an ABR
Borrowing at the end of the Interest Period applicable thereto.
SECTION 2.09 Termination and Reduction of Commitments.
(a) Unless previously terminated, the Commitments shall terminate on the
Maturity Date.
(b) The Company may at any time terminate, or from time to time
reduce, the Total Commitment, in whole or in part; provided that (i) each
partial reduction of the Total Commitment shall be in an amount that is an
integral multiple of $1,000,000 and not less than $5,000,000 and (ii) the
Company shall not terminate or reduce the Commitments if, after giving effect to
any concurrent prepayment of the Loans in accordance with Section 2.11, the sum
of the total Revolving Credit Exposures would, plus the aggregate principal
amount of outstanding Competitive Loans, exceed the Total Commitment.
(c) The Company shall notify the Administrative Agent of any election
to terminate or reduce the Total Commitment under Section 2.09(b) at least three
Business Days prior to the effective date of such termination or reduction,
specifying such election and the effective date thereof. Promptly following
receipt of any notice, the Administrative Agent shall advise the Lenders of the
contents thereof. Each notice delivered by the Company pursuant to this Section
2.09 shall be irrevocable; provided that a notice of termination of the Total
Commitment delivered by the Company may state that such notice is conditioned
upon the effectiveness of other credit facilities, in which case such notice may
be revoked by the Company (by notice to the Administrative Agent on or prior to
the specified effective date) if such condition is not satisfied. Any
termination or reduction of the Total Commitment shall be permanent. Each
reduction of the Total Commitment shall be made ratably among the Lenders in
accordance with their respective Commitments.
(d) The Total Commitment shall automatically terminate on the date a
Change in Control occurs.
SECTION 2.10 Repayment of Loans; Evidence of Debt. (a) The Company
hereby unconditionally promises to pay (i) to the Administrative Agent for the
account of each Lender the then unpaid principal amount of each Revolving Loan
on the Maturity Date, (ii) to the Administrative Agent for the account of each
Lender having a Competitive Loan outstanding the then unpaid principal amount of
each Competitive Loan on the last day of the Interest Period applicable to such
Loan, and (iii) to the Swingline Lender the then unpaid principal amount of
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each Swingline Loan on demand thereof or by the Swingline Lender. In addition,
if the sum of the total Revolving Credit Exposures, plus the aggregate principal
amount of the outstanding Competitive Loans, exceeds the Total Commitment, the
Company shall pay to the Administrative Agent for the account of each Lender an
aggregate principal amount of Revolving Loans sufficient to cause the sum of the
total Revolving Credit Exposures, plus the aggregate principal amount of the
outstanding Competitive Loans, not to exceed the Total Commitment; provided,
however, if the repayment of the outstanding Revolving Loans does not cause the
total Revolving Credit Exposures, plus the aggregate principal amount of the
outstanding Competitive Loans, to be equal to or less than the Total Commitment,
the Company shall deposit in an account with the Administrative Agent in the
name of the Administrative Agent and for the benefit of the Lenders, an amount
in cash equal to the amount by which the sum of the total Revolving Credit
Exposures, plus the aggregate principal amount of the outstanding Competitive
Loans, exceeds the Total Commitment, which cash deposit shall be held by the
Administrative Agent for the payment of the Obligations of the Borrowers under
this Agreement and the other Loan Documents. The Administrative Agent shall have
exclusive dominion and control, including the exclusive right of withdrawal,
over such account other than any interest earned on the investment of such
deposit (which investments shall be made at the option and sole discretion of
the Administrative Agent, but only in investments rated at least AA (or
equivalent) by at least one nationally recognized rating agency, unless an Event
of Default shall have occurred and be continuing, and in any event at the
Company=s risk and expense). Interest or profits, if any, on such investments
shall accumulate in such account. Moneys in such account shall be applied by the
Administrative Agent to reimburse the Issuing Bank for LC Disbursements for
which it has not been reimbursed and, to the extent not so applied, shall be
held for the satisfaction of the reimbursement obligations of the Borrowers for
the LC Exposure at such time, or if the maturity of the Loans has been
accelerated (but subject to the consent of the Lenders with LC Exposure
representing greater than 66b% of the total LC Exposure), be applied to satisfy
other obligations of the Borrowers under this Agreement and the other Loan
Documents. At any time when the sum of the total Revolving Credit Exposures,
plus the aggregate principal amount of outstanding Competitive Loans, does not
exceed the Total Commitment and so long as no Default or Event of Default shall
then exist, upon the request of the Company the amount of such deposit (to the
extent not applied as aforesaid) shall be returned to the Company within three
Business Days after receipt of such request.
(b) On the date that a Change in Control occurs, the Company shall
repay the outstanding principal amount of the Loans and all other amounts
outstanding hereunder and under the other Loan Documents and shall comply with
the provisions of Section 2.06(k).
(c) Each Lender shall maintain in accordance with its usual practice
an account or accounts evidencing the indebtedness of the Company to such Lender
resulting from each Loan made by such Lender, including the amounts of principal
and interest payable and paid to such Lender from time to time hereunder.
(d) The Administrative Agent shall maintain accounts in which it
shall record (i) the amount of each Loan made hereunder, the Class and Type
thereof and the Interest Period applicable thereto, (ii) the amount of any
principal or interest due and payable or to become due and payable from the
Company to each Lender hereunder and (iii) the amount of any sum
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received by the Administrative Agent hereunder for the account of the Lenders
and each Lender=s share thereof.
(e) The entries made in the accounts maintained pursuant to Section
2.10(c) or (d) shall be prima facie evidence of the existence and amounts of the
obligations recorded therein; provided that the failure of any Lender or the
Administrative Agent to maintain such accounts or any error or conflict therein
shall not in any manner affect the obligation of the Company to repay the Loans
in accordance with the terms of this Agreement.
(f) Any Lender may request that Loans made by it be evidenced by a
Revolving Note or a Competitive Note, as the case may be. In such event, the
Company shall prepare, execute and deliver to such Lender a Revolving Note or a
Competitive Note, as the case may be. Thereafter, the Loans evidenced by such
promissory note and interest thereon shall at all times (including after
assignment pursuant to Section 10.05) be represented by one or more promissory
notes in such forms payable to the order of the payee named therein.
SECTION 2.11 Prepayment of Loans. (a) The Company shall have the
right at any time and from time to time to prepay any Borrowing in whole or in
part, subject to prior notice in accordance with Section 2.11(b); provided that
the Company shall not have the right to prepay any Competitive Loan without the
prior consent of the Lender thereof.
(b) The Company shall notify the Administrative Agent (and, in the
case of prepayment of a Swingline Loan, the Swingline Lender) by telephone
(confirmed by telecopy in the form of Exhibit 2.11 (a "Notice of Prepayment"))
of any prepayment hereunder (i) in the case of prepayment of a Eurodollar
Revolving Borrowing, not later than 11:00 a.m., Charlotte, North Carolina, time,
three Business Days before the date of prepayment, (ii) in the case of
prepayment of an ABR Revolving Borrowing, not later than 11:00 a.m., Charlotte,
North Carolina, time, on the date of prepayment or (iii) in the case of
prepayment of a Swingline Loan, not later than 11:00 a.m., Charlotte, North
Carolina, time, on the date of prepayment. Each such notice shall be irrevocable
and shall specify the prepayment date, Type and the principal amount of each
Borrowing or portion thereof to be prepaid; provided that, if a notice of
prepayment is given in connection with a conditional notice of termination of
the Commitments as contemplated by Section 2.09, then such notice of prepayment
may be revoked if such notice of termination is revoked in accordance with
Section 2.09. Each partial prepayment shall be in an aggregate amount not less
than, and shall be an integral multiple of, the amounts shown below with respect
to the applicable Type of Loan or Borrowing:
---------------------------------------------------------
Type of Integral Minimum
Loan/Borrowing Multiple of Aggregate Amount
---------------------------------------------------------
Eurodollar Revolving $ 1,000,000 $ 3,000,000
Borrowing
---------------------------------------------------------
ABR Revolving Borrowing 1,000,000 1,000,000
---------------------------------------------------------
Swingline Loan 100,000 5,000,000
---------------------------------------------------------
Promptly following receipt of any such notice relating to a Revolving Borrowing,
the Administrative Agent shall advise the Lenders of the contents thereof. If
the Company fails to
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designate the Type of Borrowings to be prepaid, partial prepayments shall be
applied first to the outstanding ABR Borrowings until all such outstanding
principal of ABR Borrowings are repaid in full, and then to the outstanding
principal amount of Eurodollar Borrowings. Each partial prepayment of any
Revolving Borrowing shall be in an amount that would be permitted in the case of
an advance of a Revolving Borrowing of the same Type as provided in Section
2.02. Each prepayment of a Revolving Borrowing shall be applied ratably to the
Loans included in the prepaid Borrowing. Prepayments shall be accompanied by
accrued interest to the extent required by Section 2.13.
SECTION 2.12 Fees. (a) The Company agrees to pay to the
Administrative Agent for the account of each Lender a facility fee, which shall
accrue at the applicable Facility Fee Rate on the daily amount of the Commitment
of such Lender, whether used or unused, during the period from and including the
date of this Agreement to but excluding the date on which such Commitment
terminates. Accrued facility fees shall be payable in arrears on the last
Business Day of January, April, July and October of each year and on the date on
which the Commitments terminate, commencing on the first such date to occur
after the date hereof. All facility fees shall be computed on the basis of a
year of 360 days and shall be payable for the actual number of days elapsed
(including the first day but excluding the last day).
(b) The Company agrees to pay (i) to the Administrative Agent for the
account of each Lender a participation fee with respect to its participations in
Letters of Credit, which shall accrue at a rate per annum equal to the
Applicable Margin on the average daily amount of such Lender=s LC Exposure
(excluding any portion thereof attributable to unreimbursed LC Disbursements)
during the period from and including the Effective Date to but excluding the
later of the date on which such Lender=s Commitment terminates and the date on
which such Lender ceases to have any LC Exposure, and (ii) to the Issuing Bank a
fronting fee, which shall accrue at the rate of .125% per annum on the average
daily amount of the LC Exposure (excluding any portion thereof attributable to
unreimbursed LC Disbursements) during the period from and including the
Effective Date to but excluding the later of the date of termination of the
Commitments and the date on which there ceases to be any LC Exposure, as well as
the Issuing Bank=s standard fees with respect to the issuance, amendment,
renewal or extension of any Letter of Credit or processing of drawings
thereunder. Accrued participation fees shall be payable in arrears on the last
Business Day of January, April, July and October of each year, commencing on the
first such date to occur after the Effective Date; provided that all such fees
shall be payable on the date on which the Commitments terminate and any such
fees accruing after the date on which the Commitments terminate shall be payable
on demand. Any other fees payable to the Issuing Bank pursuant to this paragraph
shall be payable within 10 days after demand. All participation fees and
fronting fees shall be computed on the basis of a year of 360 days and shall be
payable for the actual number of days elapsed (including the first day but
excluding the last day).
(c) The Company agrees to pay to each of the Administrative Agent,
the Syndication Agent, First Union Capital Markets Corp. and Banc of America
Securities LLC, for its own account, fees payable in the amounts and at the
times specified in that letter agreement dated August 26, 1999 among the
Company, the Administrative Agent, the Syndication Agent,
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39
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First Union Capital Markets Corp. and Banc of America Securities LLC. (as
from time to time amended, the "Fee Letter").
(d) The Company agrees to pay to the Administrative Agent for the
account of each Lender a utilization fee (the "Utilization Fee"), which shall
accrue at a rate per annum equal to .125% on each Lender=s Commitment (whether
used or unused) for each day from and after the Effective Date to but excluding
the Maturity Date on which the sum of the total Revolving Credit Exposures, plus
the aggregate principal amount of outstanding Competitive Loans plus the
aggregate outstanding loans under the Companion Credit Agreement, exceeds 50% of
the sum of Total Commitment plus the Total Commitment (as defined in the
Companion Credit Agreement) and for each day on and after the Maturity Date
until the Revolving Credit Exposures of all Lenders, all Competitive Loans and
all loans outstanding under the Companion Credit Agreement are paid in full or
reduced to zero, if the sum of the Total Revolving Credit Exposures, plus the
aggregate principal amount of outstanding Competitive Loans plus the aggregate
outstanding loans under the Companion Credit Agreement, exceeded 50% of the sum
of Total Commitment plus the Total Commitment (as defined in the Companion
Credit Agreement) on the day immediately preceding the Maturity Date. All
Utilization Fees shall be payable in arrears on the last day of January, April,
July and October of each year and on the date the Revolving Credit Exposures of
all Lenders and all Competitive Loans and all loans outstanding under the
Companion Credit Agreement are paid in full or reduced to zero, as the case may
be, commencing on the first of such dates to occur after the Effective Date. All
Utilization Fees shall be computed on the basis of a year of 360 days and shall
be payable for the actual number of days elapsed (including the first day but
excluding the last day).
(e) All fees payable hereunder shall be paid on the dates due, in
immediately available funds, to the Administrative Agent (or to the Issuing
Bank, in the case of fees payable to it) for distribution, in the case of
facility fees and participation fees, to the Lenders. Except as required by law,
fees paid shall not be refundable under any circumstances.
SECTION 2.13 Interest. (a) The Loans comprising each ABR Borrowing
(including each Swingline Loan) shall bear interest at a rate per annum equal to
the Alternate Base Rate.
(b) The Loans comprising each Eurodollar Borrowing shall bear
interest (i) in the case of a Eurodollar Revolving Loan, at the LIBOR Rate for
the Interest Period in effect for such Borrowing plus the Applicable Margin or
(ii) in the case of a Eurodollar Competitive Loan, at the LIBOR Rate for the
Interest Period in effect for such Borrowing plus (or minus, as applicable) the
Margin applicable to such Loan.
(c) Each Fixed Rate Loan shall bear interest at the Fixed Rate
applicable to such Loan.
(d) Notwithstanding the foregoing, if any principal of or interest on
any Loan or any fee or other amount payable by the Company hereunder is not paid
when due, whether at stated maturity, upon acceleration or otherwise, such
overdue amount shall bear interest, after as well as before judgment, at a rate
per annum equal to (i) in the case of overdue principal of any
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40
<PAGE>
Loan, 2% plus the rate otherwise applicable to such Loan as provided above or
(ii) in the case of any other amount, 2% plus the Alternate Base Rate.
(e) Accrued interest on each Loan shall be payable in arrears on each
Interest Payment Date for such Loan; provided that (i) interest accrued pursuant
to Section 2.13(d) shall be payable on demand, (ii) in the event of any
repayment or prepayment of any Loan (other than a prepayment of an ABR Revolving
Loan prior to the end of the Availability Period), accrued interest on the
principal amount repaid or prepaid shall be payable on the date of such
repayment or prepayment, (iii) in the event of any conversion of any Eurodollar
Revolving Loan prior to the end of the current Interest Period therefor, accrued
interest on such Loan shall be payable on the effective date of such conversion
and (iv) all accrued interest shall be payable upon termination of the Total
Commitment.
(f) All interest hereunder shall be computed on the basis of a year
of 360 days, except that interest computed by reference to the Alternate Base
Rate at times when the Alternate Base Rate is based on the Prime Rate shall be
computed on the basis of a year of 365 days (or 366 days in a leap year), and in
each case shall be payable for the actual number of days elapsed (including the
first day but excluding the last day). The applicable Alternate Base Rate or
LIBOR Rate shall be determined by the Administrative Agent, and such
determination shall be conclusive absent manifest error.
SECTION 2.14 Alternate Rate of Interest. If prior to the commencement
of any Interest Period for a Eurodollar Borrowing:
(a) the Administrative Agent determines (which determination shall be
conclusive absent manifest error) that adequate and reasonable means do not
exist for ascertaining the LIBOR Rate for such Interest Period; or
(b) the Administrative Agent is advised by the Required Lenders (or,
in the case of a Eurodollar Competitive Loan, by the Lender that is required to
make such Loan) that the LIBOR Rate for such Interest Period will not adequately
and fairly reflect the cost to such Lenders (or Lender) of making or maintaining
their Loans (or its Loan) included in such Borrowing for such Interest Period;
then the Administrative Agent shall give notice thereof to the Company and the
Lenders by telephone or telecopy as promptly as practicable thereafter and,
until the Administrative Agent notifies the Company and the Lenders that the
circumstances giving rise to such notice no longer exist, (i) any Interest
Election Request that requests the conversion of any Revolving Borrowing to, or
continuation of any Revolving Borrowing as, a Eurodollar Borrowing shall be
ineffective, (ii) if any Borrowing Request requests a Eurodollar Revolving
Borrowing, such Borrowing shall be made as an ABR Borrowing and (iii) any
request by the Company for a Eurodollar Competitive Borrowing shall be
ineffective; provided that (A) if the circumstances giving rise to such notice
do not affect all the Lenders, then requests by the Company for Eurodollar
Competitive Borrowings may be made to Lenders that are not affected thereby and
(B) if the circumstances giving rise to such notice affect only one Type of
Borrowings, then the other Type of Borrowings shall be permitted.
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41
<PAGE>
SECTION 2.15 Increased Costs. (a) If any Change in Law shall:
(i) impose, modify or deem applicable any reserve, special deposit or
similar requirement against assets of, deposits with or for the account
of, or credit extended by, any Lender (except any such reserve requirement
reflected in the LIBOR Rate) or the Issuing Bank; or
(ii) impose on any Lender or the Issuing Bank or the London interbank
market any other condition affecting this Agreement or Eurodollar Loans
made by such Lender or any Letter of Credit or participation therein;
and the result of any of the foregoing shall be to increase the cost to such
Lender of making or maintaining any Eurodollar Loan or Fixed Rate Loan (or of
maintaining its obligation to make any such Loan) or to increase the cost to
such Lender or the Issuing Bank of participating in, issuing or maintaining any
Letter of Credit or to reduce the amount of any sum received or receivable by
such Lender or the Issuing Bank hereunder (whether of principal, interest or
otherwise), then the Company will pay to such Lender or the Issuing Bank, as the
case may be, such additional amount or amounts as will compensate such Lender or
the Issuing Bank, as the case may be, for such additional costs incurred or
reduction suffered.
(b) If any Lender or the Issuing Bank determines that any Change in
Law regarding capital requirements has or would have the effect of reducing the
rate of return on such Lender=s or the Issuing Bank=s capital or on the capital
of such Lender=s or the Issuing Bank=s holding company, if any, as a consequence
of this Agreement or the Loans made by, or participations in Letters of Credit
held by, such Lender, or the Letters of Credit issued by the Issuing Bank, to a
level below that which such Lender or the Issuing Bank or such Lender=s or the
Issuing Bank=s holding company could have achieved but for such Change in Law
(taking into consideration such Lender=s or the Issuing Bank=s policies and the
policies of such Lender=s or the Issuing Bank=s holding company with respect to
capital adequacy), then from time to time the Company will pay to such Lender or
the Issuing Bank, as the case may be, such additional amount or amounts as will
compensate such Lender or the Issuing Bank or such Lender=s or the Issuing
Bank=s holding company for any such reduction suffered.
(c) A certificate of a Lender or the Issuing Bank setting forth the
amount or amounts necessary to compensate such Lender or the Issuing Bank or its
holding company, as the case may be, as specified in paragraph (a) or (b) of
this Section 2.15 shall be delivered to the Company and shall be conclusive
absent manifest error. The Company shall pay such Lender or the Issuing Bank, as
the case may be, the amount shown as due on any such certificate within 10 days
after receipt thereof.
(d) Failure or delay on the part of any Lender or the Issuing Bank to
demand compensation pursuant to this Section 2.15 shall not constitute a waiver
of such Lender=s or the Issuing Bank=s right to demand such compensation;
provided that the Company shall not be required to compensate a Lender or the
Issuing Bank pursuant to this Section 2.15 for any increased costs or reductions
incurred more than six months prior to the date that such Lender or
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42
<PAGE>
the Issuing Bank, as the case may be, notifies the Company of the Change in Law
giving rise to such increased costs or reductions and of such Lender=s or the
Issuing Bank=s intention to claim compensation therefor; provided further that,
if the Change in Law giving rise to such increased costs or reductions is
retroactive, then the six-month period referred to above shall be extended to
include the period of retroactive effect thereof.
SECTION 2.16 Break Funding Payments. In the event of (a) the payment of
any principal of any Eurodollar Loan or Fixed Rate Loan other than on the last
day of an Interest Period applicable thereto (including as a result of an Event
of Default), (b) the conversion of any Eurodollar Loan other than on the last
day of the Interest Period applicable thereto, (c) the failure to borrow (unless
such failure was caused by the failure of a Lender to make such Loan), convert,
continue or prepay any Eurodollar Loan, or the failure to convert an ABR Loan to
a Eurodollar Loan, on the date specified in any notice delivered pursuant hereto
(regardless of whether such notice is permitted to be revocable under Section
2.09 and is revoked in accordance herewith), (d) the failure to borrow any
Competitive Loan after accepting the Competitive Bid to make such Loan (unless
such failure was caused by the failure of a Lender to make such Loan), or (e)
the assignment of any Eurodollar Loan or Fixed Rate Loan other than on the last
day of the Interest Period applicable thereto as a result of a request by the
Company pursuant to Section 2.19, then, in any such event, the Company shall
compensate each Lender for the loss, cost and expense attributable to such
event. In the case of a Eurodollar Loan, the loss to any Lender attributable to
any such event shall be deemed to include an amount determined by such Lender to
be equal to the excess, if any, of (i) the amount of interest that such Lender
would pay for a deposit equal to the principal amount of such Loan for the
period from the date of such payment, conversion, failure or assignment to the
last day of the then current Interest Period for such Loan (or, in the case of a
failure to borrow, convert or continue, the duration of the Interest Period that
would have resulted from such borrowing, conversion or continuation) if the
interest rate payable on such deposit were equal to the LIBOR Rate for such
Interest Period, over (ii) the amount of interest that such Lender would earn on
such principal amount for such period if such Lender were to invest such
principal amount for such period at the interest rate that would be bid by such
Lender (or an affiliate of such Lender) for dollar deposits from other banks in
the Eurodollar market at the commencement of such period. A certificate of any
Lender setting forth any amount or amounts that such Lender is entitled to
receive pursuant to this Section 2.16 shall be delivered to the Company and
shall be conclusive absent manifest error. The Company shall pay such Lender the
amount shown as due on any such certificate within 10 days after receipt
thereof.
SECTION 2.17 Taxes. (a) Any and all payments by or on account of any
obligation of either Borrower hereunder shall be made free and clear of and
without deduction for any Indemnified Taxes or Other Taxes; provided that if
either Borrower shall be required to deduct any Indemnified Taxes or Other Taxes
from such payments, then (i) the sum payable shall be increased as necessary so
that after making all required deductions (including deductions applicable to
additional sums payable under this Section 2.17) the Administrative Agent,
Lender or Issuing Bank (as the case may be) receives an amount equal to the sum
it would have received had no such deductions been made, (ii) such Borrower
shall make such deductions and (iii) such Borrower shall pay the full amount
deducted to the relevant Governmental Authority in accordance with applicable
law.
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(b) In addition, such Borrower shall pay any Other Taxes to the
relevant Governmental Authority in accordance with applicable law.
(c) The Company shall indemnify the Administrative Agent, each Lender
and the Issuing Bank, within 10 days after written demand therefor, for the full
amount of any Indemnified Taxes or Other Taxes (including Indemnified Taxes or
Other Taxes imposed or asserted on or attributable to amounts payable under this
Section 2.17(c)) paid by the Administrative Agent, such Lender or the Issuing
Bank, as the case may be, and any penalties, interest and reasonable expenses
arising therefrom or with respect thereto, whether or not such Indemnified Taxes
or Other Taxes were correctly or legally imposed or asserted by the relevant
Governmental Authority. A certificate as to the amount of such payment or
liability delivered to the Company by a Lender or the Issuing Bank, or by the
Administrative Agent on its own behalf or on behalf of a Lender or the Issuing
Bank, shall be conclusive absent manifest error.
(d) As soon as practicable after any payment of Indemnified Taxes or
Other Taxes by the Company to a Governmental Authority, the Company shall
deliver to the Administrative Agent the original or a certified copy of a
receipt issued by such Governmental Authority evidencing such payment, a copy of
the return reporting such payment or other evidence of such payment reasonably
satisfactory to the Administrative Agent.
(e) Any Foreign Lender that is entitled to an exemption from or
reduction of withholding tax under the law of the jurisdiction in which the
Borrowers are located, or any treaty to which such jurisdiction is a party, with
respect to payments under this Agreement shall deliver to the Company (with a
copy to the Administrative Agent), at the time or times prescribed by applicable
law or reasonably requested by the Company, such properly completed and executed
documentation prescribed by applicable law as will permit such payments to be
made without withholding or at a reduced rate.
SECTION 2.18 Payments Generally; Pro Rata Treatment; Sharing of Set-offs.
(a) The Company shall make or, in the case of the Subsidiary Borrower Letter of
Credit, the Subsidiary Borrower shall make, each payment required to be made by
such Borrower hereunder (whether of principal, interest, fees or reimbursement
of LC Disbursements, or under Section 2.15, 2.16 or 2.17, or otherwise) prior to
12:00 noon, Charlotte, North Carolina, time, on the date when due, in
immediately available funds, without set-off or counterclaim. Any amounts
received after such time on any date may, in the discretion of the
Administrative Agent, be deemed to have been received on the next succeeding
Business Day for purposes of calculating interest thereon. All such payments
shall be made to the Administrative Agent at its Principal Office, except
payments to be made directly to the Issuing Bank or Swingline Lender as
expressly provided herein and except that payments pursuant to Sections 2.15,
2.16, 2.17 and 10.03 shall be made directly to the Persons entitled thereto. The
Administrative Agent shall distribute any such payments received by it for the
account of any other Person to the appropriate recipient promptly following
receipt thereof. If any payment hereunder shall be due on a day that is not a
Business Day, the date for payment shall be extended to the next succeeding
Business Day, and, in the case of any payment accruing interest, interest
thereon shall be payable for the period of such extension. All payments
hereunder shall be made in dollars.
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44
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(b) If at any time insufficient funds are received by and available
to the Administrative Agent to pay fully all amounts of principal, unreimbursed
LC Disbursements, interest and fees then due hereunder, such funds shall be
applied (i) first, to pay interest and fees then due hereunder, ratably among
the parties entitled thereto in accordance with the amounts of interest and fees
then due to such parties, and (ii) second, to pay principal and unreimbursed LC
Disbursements then due hereunder, ratably among the parties entitled thereto in
accordance with the amounts of principal and unreimbursed LC Disbursements then
due to such parties.
(c) If any Lender shall, by exercising any right of set-off or
counterclaim or otherwise, obtain payment in respect of any principal of or
interest on any of its Revolving Loans or participations in LC Disbursements or
Swingline Loans resulting in such Lender receiving payment of a greater
proportion of the aggregate amount of its Revolving Loans and participations in
LC Disbursements and Swingline Loans and accrued interest thereon than the
proportion received by any other Lender, then the Lender receiving such greater
proportion shall purchase (for cash at face value) participations in the
Revolving Loans and participations in LC Disbursements and Swingline Loans of
other Lenders to the extent necessary so that the benefit of all such payments
shall be shared by the Lenders ratably in accordance with the aggregate amount
of principal of and accrued interest on their respective Revolving Loans and
participations in LC Disbursements and Swingline Loans; provided that (i) if any
such participations are purchased and all or any portion of the payment giving
rise thereto is recovered, such participations shall be rescinded and the
purchase price restored to the extent of such recovery, without interest, and
(ii) the provisions of this paragraph shall not be construed to apply to any
payment made by either Borrower pursuant to and in accordance with the express
terms of this Agreement or any payment obtained by a Lender as consideration for
the assignment of or sale of a participation in any of its Loans or
participations in LC Disbursements to any assignee or participant, other than to
a Borrower or any Subsidiary or Affiliate thereof (as to which the provisions of
this paragraph shall apply). Each Borrower consents to the foregoing and agrees,
to the extent it may effectively do so under applicable law, that any Lender
acquiring a participation pursuant to the foregoing arrangements may exercise
against such Borrower rights of set-off and counterclaim with respect to such
participation as fully as if such Lender were a direct creditor of the Company
or the Subsidiary Borrower, as the case may be, in the amount of such
participation.
(d) Unless the Administrative Agent shall have received notice from
the Company prior to the date on which any payment is due to the Administrative
Agent for the account of the Lenders or the Issuing Bank hereunder that the
Company will not make (or in the case of the Subsidiary Borrower Letter of
Credit, the Subsidiary Borrower will not make) such payment, the Administrative
Agent may assume that the applicable Borrower has made such payment on such date
in accordance herewith and may, in reliance upon such assumption, distribute to
the Lenders or the Issuing Bank, as the case may be, the amount due. In such
event, if the applicable Borrower has not in fact made such payment, then each
of the Lenders or the Issuing Bank, as the case may be, severally agrees to
repay to the Administrative Agent forthwith on demand the amount so distributed
to such Lender or Issuing Bank with interest thereon, for each day from and
including the date such amount is distributed to it to but excluding the date of
payment to the Administrative Agent, at the Federal Funds Effective Rate.
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(e) If any Lender shall fail to make any payment required to be made
by it pursuant to Section 2.05(c), 2.06(e), 2.07(b) or 2.18(d), then the
Administrative Agent may, in its discretion (notwithstanding any contrary
provision hereof), apply any amounts thereafter received by the Administrative
Agent for the account of such Lender to satisfy such Lender=s obligations under
such Sections until all such unsatisfied obligations are fully paid.
SECTION 2.19 Mitigation Obligations; Replacement of Lenders. (a) If any
Lender requests compensation under Section 2.15, or if either Borrower is
required to pay any additional amount to any Lender or any Governmental
Authority for the account of any Lender pursuant to Section 2.17, then such
Lender shall use reasonable efforts to designate a different lending office for
funding or booking its Loans hereunder or to assign its rights and obligations
hereunder to another of its offices, branches or affiliates, if, in the judgment
of such Lender, such designation or assignment (i) would eliminate or reduce
amounts payable pursuant to Section 2.15 or 2.17, as the case may be, in the
future and (ii) would not subject such Lender to any unreimbursed cost or
expense and would not otherwise be disadvantageous to such Lender. The Company
hereby agrees to pay all reasonable costs and expenses incurred by any Lender in
connection with any such designation or assignment.
(b) If any Lender requests compensation under Section 2.15, or if
either Borrower is required to pay any additional amount to any Lender or any
Governmental Authority for the account of any Lender pursuant to Section 2.17,
or if any Lender defaults in its obligation to fund Loans hereunder, then the
Company may, at its sole expense and effort, upon notice to such Lender and the
Administrative Agent, require such Lender to assign and delegate, without
recourse (in accordance with and subject to the restrictions contained in
Section 10.05), all its interests, rights and obligations under this Agreement
to an assignee that shall assume such obligations (which assignee may be another
Lender, if a Lender accepts such assignment); provided that (i) the Company
shall have received the prior written consent of the Administrative Agent (and,
if a Commitment is being assigned, the Issuing Bank and Swingline Lender), which
consent shall not be unreasonably withheld, (ii) such Lender shall have received
payment of an amount equal to the outstanding principal of its Loans and
participations in LC Disbursements and Swingline Loans, accrued interest
thereon, accrued fees and all other amounts payable to it hereunder, from the
assignee (to the extent of such outstanding principal and accrued interest and
fees) or the Company (in the case of all other amounts) and (iii) in the case of
any such assignment resulting from a claim for compensation under Section 2.15
or payments required to be made pursuant to Section 2.17, such assignment will
result in a reduction in such compensation or payments. A Lender shall not be
required to make any such assignment and delegation if, prior thereto, as a
result of a waiver by such Lender or otherwise, the circumstances entitling the
Company to require such assignment and delegation cease to apply.
SECTION 2.20 Extensions of Maturity Date; Removal of Lenders. (a) The
Company may, by written notice to the Administrative Agent (a "Notice of
Extension") given not less than 60 nor more than 90 days prior to each
Anniversary Date, advise the Lenders that it requests an extension of the then
effective Maturity Date (the "Existing Maturity Date") by 12 calendar months,
effective on the relevant Anniversary Date (the "Relevant Anniversary Date").
The Administrative Agent will promptly, and in any event within five Business
Days of the
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receipt of such Notice of Extension, notify the Lenders of the contents of each
such Notice of Extension.
(b) Each Notice of Extension shall (i) be irrevocable and (ii)
constitute a representation by the Borrowers that (A) neither any Event of
Default nor any Default has occurred and is continuing and (B) the
representations and warranties contained in Article IV are correct on and as of
the Relevant Anniversary Date, as though made on and as of such date (unless any
representation and maturity expressly relates to an earlier date).
(c) In the event a Notice of Extension is given to the Administrative
Agent as provided in Section 2.20(a) and the Administrative Agent notifies a
Lender of the contents thereof, such Lender shall on or before the 30th day next
preceding the then Relevant Anniversary Date advise the Administrative Agent in
writing whether or not such Lender consents to the extension requested thereby
and if any Lender fails so to advise the Administrative Agent, such Lender shall
be deemed to have not consented to such extension. If Lenders holding 80% or
more of the Total Commitment so consent (the "Consenting Lenders") to such
extension and any and all Lenders who have not consented (the "Non-Consenting
Lenders") are replaced, the Maturity Date, and the Commitments of the Consenting
Lenders and the Nominees (as defined below) shall be automatically extended 12
calendar months past the Existing Maturity Date, effective on the Relevant
Anniversary Date. The Administrative Agent shall promptly notify the Borrowers
and all of the Lenders of each written notice of consent given pursuant to this
Section 2.20(c).
(d) In the event the Consenting Lenders hold less than 100% of the
Total Commitment, the Consenting Lenders, or any of them, shall have the right
(but not the obligation) to assume all or any portion of the Non-Consenting
Lenders= Commitments by giving written notice to the Company and the
Administrative Agent of their election to do so on or before the 20th day next
preceding the Relevant Anniversary Date, which notice shall be irrevocable and
shall constitute an undertaking to (i) assume, as of the close of business on
the Relevant Anniversary Date, all or such portion of the Commitments of the
Non-Consenting Lenders, as the case may be, as may be specified in such written
notice, and (ii) purchase (without recourse) from the Non-Consenting Lenders, at
the close of business on the Relevant Anniversary Date, the Revolving Credit
Exposures outstanding on the Relevant Anniversary Date that correspond to the
portion of the Commitments to be so assumed at a price equal to the sum of (x)
the unpaid principal amount of all Loans so purchased, plus (y) the aggregate
amount, if any, previously funded by the transferor or any participations so
purchased, plus (z) all accrued and unpaid interest thereon. Such Commitments
and Revolving Credit Exposures, or portion thereof, to be assumed and purchased
by Consenting Lenders shall be allocated among those Consenting Lenders who have
so elected to assume the same pro rata in accordance with the respective
Commitments of such Consenting Lenders as of the Relevant Anniversary Date
(provided, however, in no event shall a Consenting Lender be required to assume
and purchase an amount or portion of the Commitments and Revolving Credit
Exposures of the Non-Consenting Lenders in excess of the amount which such
Consenting Lender agreed to assume and purchase pursuant to the immediately
preceding sentence) or on such other basis as such Consenting Lender shall
agree. The Administrative Agent shall promptly notify the Company
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and the other Consenting Lenders in the event it receives any notice from a
Consenting Lender pursuant to this Section 2.20(d).
(e) In the event that the Consenting Lenders shall not elect as
provided in Section 2.20(d) to assume and purchase all of the Non-Consenting
Lenders= Commitments and Revolving Credit Exposures, the Company may designate,
by written notice to the Administrative Agent and the Consenting Lenders given
on or before the tenth day next preceding the Relevant Anniversary Date, one or
more Eligible Assignees not a party to this Agreement (individually, a "Nominee"
and collectively, the "Nominees") to assume all or any portion of the
Non-Consenting Lenders= Commitments not to be assumed by the Consenting Lenders
and to purchase (without recourse) from the Non-Consenting Lenders all Revolving
Credit Exposures outstanding at the close of business on the Relevant
Anniversary Date that corresponds to the portion of the Commitments so to be
assumed at the price specified in Section 2.20(d). Each assumption and purchase
under this Section 2.20(e) shall be effective as of the close of business on the
Relevant Anniversary Date when each of the following conditions has been
satisfied in a manner satisfactory to the Administrative Agent:
(i) each Nominee and the Non-Consenting Lenders have executed an
Assignment and Acceptance pursuant to which such Nominee shall (A) assume
in writing its share of the obligations of the Non-Consenting Lenders
hereunder, including its share of the Commitments of the Non-Consenting
Lenders and (B) agree to be bound as a Lender by the terms of this
Agreement; and
(ii) each Nominee shall have completed and delivered to the
Administrative Agent an Administrative Questionnaire.
(f) In the event that the Consenting Lenders shall not elect as
provided in Section 2.20(d) to assume all of the Non-Consenting Lenders=
Commitments and the Company shall not have effectively designated one or more
Nominees to assume the Commitments of and purchase the Revolving Credit
Exposures of the Non-Consenting Lenders as contemplated by Section 2.20(e),
there shall be no extension of the Existing Maturity Date.
SECTION 2.21 Telephonic Notices. Without in any way limiting the
obligation of the Company or the Subsidiary Borrower to confirm in writing any
telephonic notice it is entitled to give under this Agreement or any other Loan
Document, the Administrative Agent may act without liability upon the basis of a
telephonic notice believed in good faith by the Administrative Agent to be from
the Company or the Subsidiary Borrower prior to receipt of written confirmation.
In each such case, the Subsidiary Borrower hereby waives the right to dispute
the Administrative Agent=s record of the terms of such telephonic notice.
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ARTICLE III.
CONDITIONS PRECEDENT
SECTION 3.01 Conditions Precedent to the Initial Credit Event. The
obligation of each Lender to make its initial Loan or the Issuing Bank to issue
the initial Letter of Credit hereunder is subject to the following conditions:
(a) The Administrative Agent shall have received the following, each
dated the initial Borrowing Date, except for the Loan Documents described in
clauses (i) through (v) below which shall be dated the Execution Date:
(i) this Agreement executed by each party hereto;
(ii) if requested by any Lender, a Revolving Note and a Competitive
Note executed by the Company and payable to the order of such Lender;
(iii)a certificate of an officer and of the secretary or an assistant
secretary of the General Partner, certifying, inter alia, (A) true and
complete copies of each of the certificate of incorporation, as amended
and in effect, of the General Partner, the partnership agreements, each as
amended and in effect, of the Borrowers, the bylaws, as amended and in
effect, of the General Partner and the resolutions adopted by the Board of
Directors of the General Partner (1) authorizing the execution, delivery
and performance by each Borrower of this Agreement and the other Loan
Documents to which it is or will be a party and, in the case of the
Company, the Borrowings to be made and the Letters of Credit to be issued
hereunder, (2) approving the forms of the Loan Documents to which it is a
party and which will be delivered at or prior to the initial Borrowing
Date and (3) authorizing officers of the General Partner to execute and
deliver the Loan Documents to which such Borrower is or will be a party
and any related documents, including any agreement contemplated by this
Agreement, (B) the incumbency and specimen signatures of the officers of
the General Partner executing any documents on its behalf and (C) (1) that
the representations and warranties made by such Borrower in each Loan
Document to which such Borrower is a party and which will be delivered at
or prior to the initial Borrowing Date are true and correct in all
material respects, (2) the absence of any proceedings for the dissolution
or liquidation of such Borrower and (3) the absence of the occurrence and
continuance of any Default or Event of Default;
(iv) letters from CT Corporation System, Inc. in form and substance
satisfactory to the Administrative Agent evidencing the obligation of CT
Corporation System, Inc. to accept service of process in the State of New
York on behalf of each Borrower that is not authorized to do business as a
foreign corporation in the State of New York;
(v) a favorable, signed opinion addressed to the Administrative Agent
and the Lenders from Morrison & Hecker L.L.P., counsel to the Borrowers,
given upon the express instruction of the Borrowers; and
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(vi) certificates of appropriate public officials as to the
existence, good standing and qualification to do business as a foreign
partnership of each Borrower in each jurisdiction in which the ownership
of its properties or the conduct of its business requires such
qualification and where the failure so to qualify would, individually or
collectively, have a Material Adverse Effect.
(b) The Administrative Agent shall be reasonably satisfied that all
required consents and approvals of any applicable Governmental Authority and any
other Person in connection with the transactions contemplated by this Section
3.01 shall have been obtained and remain in effect (except where the failure to
obtain such approvals would not have a Material Adverse Effect), and all
applicable waiting periods shall have expired (or been waived) without any
action being taken by any Governmental Authority.
(c) All agreements relating to, and the organizational structure of,
the Company and the Subsidiaries, and all organic documents of the Company and
the Subsidiaries, shall be reasonably satisfactory to the Administrative Agent
and the Syndication Agent.
(d) The Company shall have paid to First Union Capital Markets Corp.,
Banc of America Securities LLC, the Administrative Agent and the Syndication
Agent all fees and expenses pursuant to the Fee Letter agreed upon by such
parties to be paid on or prior to the Execution Date.
(e) The Existing Credit Agreement shall have been terminated and all
amounts outstanding thereunder paid in full.
(f) The Company shall have paid to Andrews & Kurth L.L.P. pursuant to
Section 10.03 all reasonable fees and disbursements invoiced to the Company on
or prior to the Execution Date.
SECTION 3.02 Conditions Precedent to All Credit Events. Except with
respect to Revolving Credit Loans made by the Lenders pursuant to Section
2.06(f), the obligation of the Lenders to make any Loan or to issue or extend
any Letter of Credit under this Agreement (including any Loan made or Letter of
Credit issued (including for the purpose of the Existing Letters of Credit) on
the initial Borrowing Date) is subject to the further conditions precedent that
on the date of such Credit Event:
(a) The conditions precedent set forth in Section 3.01 shall have
theretofore been satisfied;
(b) The representations and warranties set forth in Article IV and in
the other Loan Documents shall be true and correct in all material respects as
of, and as if such representations and warranties were made on, the date of the
proposed Loan or Letter of Credit, as the case may be (unless such
representation and warranty expressly relates to an earlier date), and the
Borrowers shall be deemed to have certified to the Administrative Agent and the
Lenders that such representations and warranties are true and correct in all
material respects by the Company=s delivery of a Borrowing Request;
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(c) The Company shall have complied with the provisions of Section
2.03, Section 2.04 or Section 2.05, as the case may be;
(d) No Default or Event of Default shall have occurred and be
continuing or would result from such Credit Event; and
(e) The Administrative Agent and the Lenders shall have received such
other approvals, opinions or documents as the Administrative Agent or the
Required Lenders may reasonably request.
The acceptance of the benefits of each Credit Event shall constitute a
representation and warranty by the Borrowers to each of the Lenders that all of
the conditions specified in this Section 3.02 above exist as of that time.
SECTION 3.03 Conditions Precedent to Conversions. The obligation of
the Lenders to convert or continue any existing Borrowing as or into a
Eurodollar Borrowing is subject to the condition precedent that on the date of
such conversion or continuation no Default or Event of Default shall have
occurred and be continuing or would result from the making of such conversion.
The acceptance of the benefits of each such conversion or continuation shall
constitute a representation and warranty by the Borrowers to each of the Lenders
that no Default or Event of Default shall have occurred and be continuing or
would result from the making of such conversion or continuation.
SECTION 3.04 Delivery of Documents. All of the Loan Documents,
certificates, legal opinions and other documents and papers referred to in this
Article III, unless otherwise specified, shall be delivered to the
Administrative Agent for the account of each of the Lenders and, except for any
Notes, in sufficient counterparts or copies for each of the Lenders and shall be
satisfactory in form and substance to the Lenders.
ARTICLE IV.
REPRESENTATIONS AND WARRANTIES
In order to induce the Lenders to enter into this Agreement and to
make the Loans provided for herein and to induce the Issuing Bank to issue
Letters of Credit and the other Lenders to participate therein and in the
Existing Letters of Credit, each Borrower makes for itself, and the Company
makes for itself and the Subsidiary Borrower, on or as of the Effective Date and
the occurrence of each Credit Event, the following representations and
warranties to the Administrative Agent and the Lenders:
SECTION 4.01 Organization and Qualification. The Company and each of
the Subsidiaries (a) is a corporation, partnership or limited liability company
duly organized or formed, validly existing and in good standing under the laws
of the state of its incorporation, organization or formation, (b) has all
requisite corporate, partnership, limited liability company or other power to
own its property and to carry on its business as now conducted and (c) is duly
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qualified to do business and is in good standing in every jurisdiction in which
the failure to be so qualified would, individually or together with all such
other failures of the Company and the Subsidiaries, have a Material Adverse
Effect. As of the Execution Date, the Persons and other entities named in
Schedule 4.01 are all of the Subsidiaries of the Company, and such Schedule 4.01
(x) accurately reflects (i) the direct owner of the Capital Stock of each such
Subsidiary and (ii) the percentage of the issued and outstanding Capital Stock
of each such Subsidiary owned by such direct owner, (y) accurately identifies
such Subsidiaries and (z) accurately sets forth the jurisdictions of their
respective incorporation, organization or formation, as the case may be, and
jurisdictions in which they are qualified as foreign corporations, foreign
partnerships, foreign limited liability companies or other foreign entities to
do business.
SECTION 4.02 Authorization, Validity, Etc. Each Borrower has all
requisite partnership or other power and authority to execute, deliver and
perform its obligations hereunder and under the other Loan Documents to which it
is a party and, in the case of the Company, to make the Borrowings and in the
case of each Borrower to obtain the issuance of Letters of Credit hereunder, and
all such action has been duly authorized by all necessary partnership
proceedings on its part. This Agreement and the other Loan Documents have been
duly and validly executed and delivered by or on behalf of each Borrower party
thereto and constitute valid and legally binding agreements of such Borrower
enforceable against such Borrower in accordance with the respective terms
thereof, except (a) as may be limited by bankruptcy, insolvency, reorganization,
moratorium, fraudulent transfer, fraudulent conveyance or other similar laws
relating to or affecting the enforcement of creditors= rights generally, and by
general principles of equity (including principles of good faith,
reasonableness, materiality and fair dealing) which may, among other things,
limit the right to obtain equitable remedies (regardless of whether considered
in a proceeding in equity or at law) and (b) as to the enforceability of
provisions for indemnification for violation of applicable securities laws,
limitations thereon arising as a matter of law or public policy.
SECTION 4.03 Governmental Consents, Etc. No authorization, consent,
approval, license or exemption of or registration, declaration or filing with
any Governmental Authority, is necessary for the valid execution, delivery or
performance by either Borrower of any Loan Document to which it is a party,
except those that have been obtained and such matters relating to performance as
would ordinarily be done in the ordinary course of business after the Execution
Date.
SECTION 4.04 Conflicting or Adverse Agreements or Restrictions.
Neither the Company nor any of the Subsidiaries is a party to any contract or
agreement or subject to any restriction that would reasonably be expected to
have a Material Adverse Effect. Neither the execution, delivery and performance
by either Borrower of the Loan Documents to which it is a party, nor compliance
with the terms and provisions thereof, nor the extensions of credit contemplated
by the Loan Documents, (a) will breach or violate any applicable Requirement of
Law, (b) will result in any breach or violation of, any of the terms, covenants,
conditions or provisions of, or constitute a default under, or result in the
creation or imposition of (or the obligation to create or impose) any Lien upon
any of its property or assets (other than Liens created or contemplated by this
Agreement) pursuant to the terms of any indenture, mortgage,
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deed of trust, agreement or other instrument to which it or any of the
Subsidiaries is party or by which any property or asset of it or any of the
Subsidiaries is bound or to which it is subject, except for breaches, violations
and defaults under clauses (a) and (b) that neither individually nor in the
aggregate for the Borrowers could reasonably be expected to result in a Material
Adverse Effect or (c) will violate any provision of the organic documents of
either Borrower.
SECTION 4.05 Properties. (a) Each of the Company and the Subsidiaries
has good title to, or valid leasehold or other interests in, all its real and
personal property material to its business, except for minor defects in title
that do not materially interfere with its ability to conduct its business as
currently conducted or to utilize such properties for their intended purposes.
(b) Each of the Company and the Subsidiaries owns, or is licensed to
use, all trademarks, trade names, copyrights, patents and other intellectual
property material to its business, and the use thereof by the Company and the
Subsidiaries does not infringe upon the rights of any other Person, except for
any such infringements that, neither individually nor in the aggregate for the
Company and such Subsidiaries, could reasonably be expected to result in a
Material Adverse Effect.
SECTION 4.06 Litigation and Environmental Matters. (a) There are no
actions, suits or proceedings by or before any arbitrator or Governmental
Authority pending against or, to the knowledge of the Company, threatened
against or affecting the Company or any of the Subsidiaries (i) as to which
there is a reasonable possibility of an adverse determination and that, if
adversely determined, could reasonably be expected, individually or in the
aggregate for the Company and such Subsidiaries, to result in a Material Adverse
Effect (other than the Disclosed Matters) or (ii) that involve this Agreement or
the Transactions.
(b) Except for the Disclosed Matters and except with respect to any
other matters that, individually or in the aggregate for the Company and the
Subsidiaries, could not reasonably be expected to result in a Material Adverse
Effect, neither the Company nor any of the Subsidiaries (i) has failed to comply
with any Environmental Law or to obtain, maintain or comply with any permit,
license or other approval required under any Environmental Law, (ii) has become
subject to any Environmental Liability, (iii) has received notice of any claim
with respect to any Environmental Liability or (iv) knows of any basis for any
Environmental Liability.
(c) Since the Execution Date, there has been no change in the status
of the Disclosed Matters that, individually or in the aggregate, has resulted
in, or materially increased the likelihood of, a Material Adverse Effect.
SECTION 4.07 Financial Statements. (a) The consolidated and
consolidating balance sheets of the Company and its consolidated Subsidiaries as
at December 31, 1998 and the related consolidated and consolidating statements
of income, partners=, shareholders= or members= equity and cash flow of the
Company and its consolidated Subsidiaries for the fiscal year ended on said
date, with (in the case of such consolidated financial statements) the opinion
thereon of PricewaterhouseCoopers LLP heretofore furnished to the Lenders and
the unaudited
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consolidated and consolidating balance sheets of the Company and its
consolidated Subsidiaries as at June 30, 1999 and their related consolidated and
consolidating statements of income, partners=, shareholders= or members= equity
and cash flow of the Company and its consolidated Subsidiaries for the six-month
period ended on such date heretofore furnished to the Lenders, are complete and
correct in all material respects and fairly present the consolidated financial
condition of the Company and its consolidated Subsidiaries as at said dates and
the results of their operations for the fiscal year and the six-month period
ended on said dates, all in accordance with GAAP, as applied on a consistent
basis (subject, in the case of the interim financial statements, to the absence
of footnotes and to normal year-end and audit adjustments).
(b) Since December 31, 1998, there has been no material adverse
change in the business, assets, operations or condition, financial or otherwise,
of the Company and the Subsidiaries, taken as a whole.
SECTION 4.08 Disclosure. The Company has disclosed to the Lenders all
agreements, instruments and corporate or other restrictions to which it or any
of the Subsidiaries is subject, and all other matters known to it, that,
individually or in the aggregate for the Company and such Subsidiaries, could
reasonably be expected to result in a Material Adverse Effect. None of the
reports, financial statements, certificates or other information furnished by or
on behalf of the Company to the Administrative Agent or any Lender in connection
with the syndication or negotiation of this Agreement or delivered hereunder (as
modified or supplemented by other information so furnished) contains any
material misstatement of fact or omits to state any material fact necessary to
make the statements therein, in the light of the circumstances under which they
were made, not misleading.
SECTION 4.09 Investment Company Act. Neither the Company nor any of
the Subsidiaries is, or is regulated as, an "investment company," as such term
is defined in the Investment Company Act of 1940, as amended.
SECTION 4.10 Public Utility Holding Company Act. Neither the Company
nor any of the Subsidiaries is a non-exempt "holding company,"or subject to
regulation as such, or an "affiliate" of a "holding company" or a "subsidiary
company" of a "holding company,"within the meaning of the Public Utility Holding
Company Act of 1935, as amended.
SECTION 4.11 ERISA. No ERISA Event has occurred or is reasonably
expected to occur that, when taken together with all other such ERISA Events for
which liability is reasonably expected to occur, could reasonably be expected to
result in a Material Adverse Effect. The present value of all accumulated
benefit obligations under each Plan (based on the assumptions used for purposes
of Statement of Financial Accounting Standards No. 87) did not, as of the date
of the most recent financial statements reflecting such amounts, exceed by more
than $5,000,000 the fair market value of the assets of such Plan, and the
present value of all accumulated benefit obligations of all underfunded Plans
(based on the assumptions used for purposes of Statement of Financial Accounting
Standards No. 87) did not, as of the date of the most recent financial
statements reflecting such amounts, exceed by more than $5,000,000 the fair
market value of the assets of all such underfunded Plans.
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SECTION 4.12 Tax Returns and Payments. (a) The Company and the
Subsidiaries have caused to be filed all federal income tax returns and other
material tax returns, statements and reports (or obtained extensions with
respect thereto) which are required to be filed and have paid or deposited or
made adequate provision in accordance with GAAP for the payment of all taxes
(including estimated taxes shown on such returns, statements and reports) which
are shown to be due pursuant to such returns, except where the failure to pay
such taxes (individually or in the aggregate for the Company and the
Subsidiaries) would not have a Material Adverse Effect. No material income tax
liability of the Company or the Subsidiaries has been asserted by the Internal
Revenue Service of the United States or any other Governmental Authority for any
taxes in excess of those already paid, except for taxes which are being
contested in good faith by appropriate proceedings and for which adequate
reserves in accordance with GAAP have been created on the books of the Company
and the Subsidiaries.
(b) The federal income tax liabilities, if any, of the Company and
the Subsidiaries (and of the General Partner) have been finally determined by
the Internal Revenue Service and satisfied for all taxable years through the
fiscal year ending in 1994.
SECTION 4.13 Compliance with Laws and Agreements. Each of the Company
and the Subsidiaries is in compliance with all laws, regulations and orders of
any Governmental Authority applicable to it or its property and all indentures,
agreements and other instruments binding upon it or its property, except where
the failure to do so, individually or in the aggregate for the Company and the
Subsidiaries, could not reasonably be expected to result in a Material Adverse
Effect. No Default or Event of Default has occurred and is continuing.
SECTION 4.14 Purpose of Loans. (a) All proceeds of the Loans will be
used for the purposes set forth in Section 5.08. All Letters of Credit (other
than the Subsidiary Borrower Letter of Credit) have been or will be issued in
connection with the general partnership, limited liability company or corporate
purposes of the Company or a Subsidiary.
(b) None of the proceeds of the loans under the Existing Credit
Agreement or this Agreement or any portion of the letters of credit issued or
outstanding thereunder or hereunder were or will be used directly or indirectly
for the purpose of buying or carrying any "margin stock" within the meaning of
Regulation U (herein called "margin stock") or for the purpose of reducing or
retiring any indebtedness which was originally incurred to buy or carry a margin
stock, or for any other purpose which might constitute this transaction a
"purpose" credit within the meaning of Regulation T, U or X. Neither Borrower
nor any agent acting on its behalf has taken or will take any action which might
cause this Agreement or any other Loan Document to violate Regulation T,
Regulation U, Regulation X, or any other regulation of the Board or to violate
the Securities Exchange Act of 1934. Margin stock does not constitute more than
25% of the assets of the Company or the Subsidiary Borrower and the Company does
not intend or foresee that it will ever do so.
SECTION 4.15 Year 2000. The Company will use reasonable best efforts
to ensure that any reprogramming required to permit the proper functioning, in
and following the year 2000, of (a) the computer systems of the Company and the
Subsidiaries and (b) equipment of the Company and the Subsidiaries containing
embedded microchips and the testing of all such
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systems and equipment, as reprogrammed, will be completed by December 31, 1999.
The cost to the Company and the Subsidiaries of such reprogramming and, to the
knowledge of the Company, of the reasonably foreseeable consequences of year
2000 to the Company and the Subsidiaries, taken as a whole (including
reprogramming errors) will not result in an Event of Default or a Material
Adverse Effect.
ARTICLE V.
AFFIRMATIVE COVENANTS
Until the Commitments have expired or been terminated and the
principal of and interest on each Loan and all fees payable hereunder shall have
been paid in full and all Letters of Credit shall have expired or terminated and
all LC Disbursements shall have been reimbursed, the Company covenants and
agrees with the Lenders that:
SECTION 5.01 Financial Statements and Other Information. The Company
will furnish to the Administrative Agent, in each case with sufficient copies
for each Lender:
(a) As soon as available and in any event within 120 days after the
end of each fiscal year of the Company: (i) the audited consolidated statements
of income, partners= equity and cash flows of the Company for such fiscal year,
and the related consolidated balance sheet of the Company as at the end of such
fiscal year, setting forth in each case in comparative form the figures for (or
in the case of the balance sheet, as of the end of) the previous fiscal year,
accompanied by the related opinion of independent public accountants of
recognized national standing reasonably acceptable to the Administrative Agent,
which opinion shall (x) state that said financial statements of the Company
fairly present the consolidated financial condition and results of operations of
the Company as at the end of, and for, such fiscal year and that such financial
statements have been prepared in accordance with GAAP except for such changes in
such principles with which the independent public accountants shall have
concurred, and (y) not contain a "going concern" or other adverse qualification
or exception unacceptable to the Required Lenders; and (ii) a certificate of
such accountants stating that, in making the examination necessary for their
opinion, they obtained no knowledge, except as specifically stated, of any Event
of Default or Default, and stating whether any change in GAAP or in the
application thereof has occurred since the date of the audited financial
statements referred to in Section 4.07(b) and, if any such change has occurred,
specifying the effect of such change on the financial statements accompanying
such certificate.
(b)(i) As soon as available and in any event within 60 days after the
end of each of the first three fiscal quarterly periods of each fiscal
year of the Company, unaudited consolidated statements of income,
partners= equity and cash flows of the Company for such period and for the
period from the beginning of the respective fiscal year to the end of such
period, and the related unaudited consolidated balance sheet as at the end
of such period, setting forth in each case in comparative form the figures
for (or in the case of balance sheets, as of the end of) the corresponding
periods in the previous fiscal year, accompanied by the certificate of a
Responsible Officer of the Company, which certificate shall state that
said financial statements fairly present the consolidated
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financial condition and results of operations of the Company in accordance
with GAAP, as at the end of, and for, such period (subject to the absence
of footnotes and changes resulting from normal year-end audit
adjustments).
(ii) As soon as available and in any event within 60 days after the
end of each of the first three fiscal quarterly periods of each fiscal
year, and within 120 days after the end of each fiscal year of OLP "A",
the Subsidiary Borrower, OLP "C", OLP "D" and each other Wholly-owned
Subsidiary the Capital Stock of which is owned directly by the Company,
unaudited consolidated statements of income, partners=, shareholders= or
members= equity, as the case may be, and cash flows of such Person and the
Subsidiaries for such period and for the period from the beginning of the
respective fiscal year to the end of such period, and the related
unaudited consolidated balance sheet as at the end of such period, setting
forth in each case in comparative form the figures for (or in the case of
balance sheets, as of the end of) the corresponding periods in the
previous fiscal year, accompanied by the certificate of a Responsible
Officer of such Person, which certificate shall state that said financial
statements fairly present the consolidated and consolidating financial
condition and results of operations of such Person in accordance with
GAAP, as at the end of, and for, such period (subject to the absence of
footnotes and changes resulting from normal year-end audit adjustments).
(c) Promptly upon receipt thereof, and in the form received, all
audited and unaudited financial statements (whether quarterly or annual)
received by either Borrower from any Person (other than an individual) whose
income is accounted for through any of the Persons referenced in Section
5.01(b)(ii) and whose EBITDA or distributions, as the case may be, exceed 25% of
Consolidated EBITDA.
(d) Prompt written notice of the following:
(i) the occurrence of any Default or Event of Default or Change in
Control Event;
(ii) the occurrence of any ERISA Event that, alone or together with
any other ERISA Events that have occurred, could reasonably be expected to
result in liability of the Company and the Subsidiaries in an aggregate
amount exceeding $5,000,000; and
(iii)any other development that results in, or could reasonably be
expected to result in, a Material Adverse Effect.
Each notice delivered under this Section 5.01 shall be accompanied by a
statement of a Responsible Officer setting forth the details of the event or
development requiring such notice and any action taken or proposed to be taken
with respect thereto.
(e) Promptly upon receipt thereof, a copy of each other report or
letter submitted to the Company by independent accountants in connection with
any annual, interim or special audit made by them of the books of the Company,
and a copy of any response by the
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Company, or the Board of Directors of the general partner of the Company, to
such letter or report.
(f) Promptly upon its becoming available, each financial statement,
report, notice or proxy statement sent by the Company to stockholders generally
and each regular or periodic report and any registration statement or prospectus
filed by the Company with any securities exchange or the Securities and Exchange
Commission or any successor agency.
(g) Promptly after the furnishing thereof, copies of any statement,
report or notice furnished to any Person pursuant to the terms of any indenture,
loan or credit or other similar agreement, other than this Agreement and not
otherwise required to be furnished to the Administrative Agent pursuant to any
other provision of this Section 5.01.
(h) From time to time such other information regarding the business,
affairs or financial condition of the Company or any Subsidiary (including any
Plan or Multiemployer Plan and any reports or other information required to be
filed under ERISA) as the Required Lenders or the Administrative Agent may
reasonably request.
The Company will furnish to the Administrative Agent, at the time it furnishes
each set of financial statements pursuant to paragraph (a) or (b) above, a
certificate substantially in the form of Exhibit 5.01 executed by a Responsible
Officer of the Company (i) certifying as to the matters set forth therein and
stating that no Event of Default or Default has occurred and is continuing (or,
if any Event of Default or Default has occurred and is continuing, describing
the same in reasonable detail), (ii) setting forth in reasonable detail the
computations necessary to determine whether the Company is in compliance with
Sections 6.07(a) and (b), and (iii) a statement, with respect to each
Intercompany Note, of (A) the actual outstanding principal amount thereof, and
the amount of any accrued and unpaid interest thereon, as at the end of the
respective quarter or fiscal year, as the case may be, and (B) the highest and
lowest principal amount thereof at any time outstanding during such quarter or
fiscal year and the periods during such quarter or fiscal year during which the
principal of such Intercompany Note was outstanding in each such amount.
SECTION 5.02 Litigation. The Company shall promptly give to the
Administrative Agent notice of all legal or arbitral proceedings, and of all
proceedings before any Governmental Authority affecting the Company or any
Subsidiary, except proceedings which, if adversely determined, would not have a
Material Adverse Effect. The Company will, and will cause each of the
Subsidiaries to, promptly notify the Administrative Agent of any claim,
judgment, Lien or other encumbrance affecting any property or assets of the
Company or any such Subsidiary if the value of the claim, judgment, Lien, or
other encumbrance affecting such property or assets shall exceed $10,000,000.
SECTION 5.03 Existence, Conduct of Business. The Company will, and
will cause each of the Subsidiaries to, do or cause to be done all things
necessary to preserve, renew and keep in full force and effect its legal
existence and the rights, licenses, permits, privileges and franchises material
to the conduct of its business; provided that the foregoing shall not prohibit
any merger, consolidation, liquidation or dissolution permitted under Section
6.03.
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SECTION 5.04 Payment of Obligations. The Company will, and will cause
each of the Subsidiaries to, pay its obligations, including tax liabilities,
that, if not paid, could result in a Material Adverse Effect before the same
shall become delinquent or in default, except where (a) the validity or amount
thereof is being contested in good faith by appropriate proceedings, (b) the
Company or such Subsidiary has set aside on its books adequate reserves with
respect thereto in accordance with GAAP and (c) the failure to make payment
pending such contest could not reasonably be expected to result in a Material
Adverse Effect.
SECTION 5.05 Maintenance of Properties; Insurance. The Company will,
and will cause each of the Subsidiaries to, (a) keep and maintain all property
material to the conduct of its business in good working order and condition,
ordinary wear and tear excepted, and (b) maintain, with financially sound and
reputable insurance companies, insurance in such amounts and against such risks
as are customarily maintained by companies engaged in the same or similar
businesses operating in the same or similar locations.
SECTION 5.06 Books and Records; Inspection Rights. The Company will,
and will cause each of the Subsidiaries to, keep proper books of record and
account in which full, true and correct entries are made of all dealings and
transactions in relation to its business and activities. The Company will, and
will cause each of the Subsidiaries to, permit any representatives designated by
the Administrative Agent or any Lender, upon reasonable prior notice, to visit
and inspect its properties, to examine and make extracts from its books and
records, and to discuss its affairs, finances and condition with its officers
and independent accountants, all at such reasonable times and as often as
reasonably requested.
SECTION 5.07 Compliance with Laws. The Company will, and will cause
each of the Subsidiaries to, comply with all Requirements of Law applicable to
it or its property, except where the failure to do so, individually or in the
aggregate, could not reasonably be expected to result in a Material Adverse
Effect.
SECTION 5.08 Use of Proceeds and Letters of Credit. The proceeds of
the Loans will be used only for (a) refinancing (i) amounts outstanding under
the Existing Credit Agreement, (ii) the SFPP First Mortgage Notes and/or the
SFPP Revolving Credit Facility, commercial paper back-up, and (b) working
capital and other partnership purposes. No part of the proceeds of any Loan has
been or will be used, whether directly or indirectly, for any purpose that
entails a violation of any of the Regulations of the Board, including
Regulations T, U and X. The Letters of Credit (including the Existing Letters of
Credit) that have been and that are to be issued under this Agreement shall as
provided in Section 2.06(c) be subject to an aggregate limit of $100,000,000.
SECTION 5.09 Further Assurances. The Company will cure promptly, or
cause the Subsidiary Borrower to cure promptly, any defects in the creation and
issuance of any Notes and the execution and delivery of this Agreement. The
Company at its expense will promptly execute and deliver, or cause the
Subsidiary Borrower to execute and deliver, to the Administrative Agent upon
request all such other documents, agreements and instruments to
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comply with or accomplish the covenants and agreements of the Borrowers in this
Agreement and the other Loan Documents to which each such Borrower is a party.
SECTION 5.10 Performance of Obligations. The Company will pay the
Loans according to the reading, tenor and effect thereof; and the Company will
do and perform or cause the Subsidiary Borrower to do and perform every act and
discharge all of the Obligations to be performed and discharged by it under this
Agreement, at the time or times and in the manner specified.
SECTION 5.11 Lines of Business. The Company will, and will cause each
Subsidiary to, be and remain engaged in only those lines of business in which
the Company and such Subsidiaries are engaged on the date of this Agreement, any
additional lines of business reasonably related thereto, and no others.
SECTION 5.12 Intercompany Notes. The Company will cause each
Subsidiary or each other Affiliate to execute a promissory note in favor of the
Company in an original principal amount equal to the actual amount from time to
time outstanding of Indebtedness of such Subsidiary or other Affiliate to the
Company (being the sum of the amounts specified pursuant to clause (i) of the
next sentence), and dated the Execution Date in the case of the Subsidiaries
(other than Subsidiaries which conduct no business, have minimal assets and have
no Indebtedness owing to the Company) on such date, in the case of any other
Subsidiary, the date such Person becomes a Subsidiary and in the case of any
other Affiliate, the first date on which any such Indebtedness is incurred by
such other Affiliate (collectively, the "Intercompany Notes"). The Company will
maintain accounts in which it shall record (i) the amount of the proceeds of
each Loan, and each other amount, from time to time advanced to such Subsidiary
or such Affiliate and the amount of each payment made by the Company to
reimburse the Issuing Bank for any drawing made under any Letter of Credit on
which such Subsidiary is an account party; (ii) the interest rate applicable to
such advance or payment; and (iii) each payment of principal or interest made by
such Subsidiary or other Affiliate.
ARTICLE VI.
NEGATIVE COVENANTS
Until the Commitments have expired or terminated and the principal of
and interest on each Loan and all fees payable hereunder have been paid in full
and all Letters of Credit have expired or terminated and all LC Disbursements
shall have been reimbursed, the Company covenants and agrees with the Lenders
that:
SECTION 6.01 Indebtedness. The Company will not permit any Subsidiary
to create, incur, assume or permit to exist any Indebtedness, except:
(a) in the case of the Subsidiary Borrower, Indebtedness in
respect of the Subsidiary Borrower Letter of Credit;
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(b) in the case of the Subsidiary Borrower, Indebtedness in respect
of the Bonds;
(c) in the case of SFPP, Indebtedness in respect of the SFPP First
Mortgage Notes and Indebtedness under the SFPP Revolving Credit Facility not in
excess of $380,000,000 aggregate principal amount for all such Indebtedness at
any one time outstanding, but not any extension, refinancing, renewal or
refunding thereof, except (i) (x) with Indebtedness of SFPP owing solely to the
Company or (y) a refinancing of SFPP First Mortgage Notes solely with
Indebtedness incurred under the SFPP Revolving Credit Facility, or (ii) if the
Company shall furnish to the Administrative Agent an opinion of the Company=s
independent public accountants to the effect that any such extension,
refinancing, renewal or refunding thereof solely with Indebtedness of SFPP owing
to the Company as contemplated by clause (i) (x) above would cause an
acceleration of any tax liabilities of Burlington Northern Santa Fe Corporation
or any of its Affiliates under applicable federal tax law, then SFPP may
refinance, renew or refund not more than $190,000,000 of such Indebtedness with
unsecured Indebtedness owing to one or more Persons other than the Company;
(d) not in excess of $120,000,000 aggregate principal amount of
Indebtedness of Plantation Pipe Line at any time outstanding, if it becomes a
Subsidiary;
(e) in the case of any Person (other than Plantation Pipe Line) that
becomes a Subsidiary, Indebtedness existing at the time such Person becomes a
Subsidiary and not incurred in contemplation thereof (which for purposes of this
Agreement shall be deemed to be incurred at the time such Person becomes a
Subsidiary), Indebtedness assumed by any Subsidiary in connection with its
acquisition (whether by merger, consolidation or acquisition of all or
substantially all of the assets) of another Person and Indebtedness refinancing
(but not increasing) such Indebtedness, provided that at the time of and after
giving effect to the incurrence or assumption of such Indebtedness or
refinancing Indebtedness and the application of the proceeds thereof, as the
case may be, the aggregate principal amount of all such Indebtedness, and of all
Indebtedness previously incurred or assumed pursuant to this Section 6.01(e),
and then outstanding, shall not exceed 50% of Consolidated EBITDA for the period
of four full fiscal quarters of the Company and the Subsidiaries (and such
Person on a pro forma basis) then most recently ended in respect of which
financial statements shall have been delivered pursuant to Section 5.01(a) or
(b), as the case may be;
(f) Indebtedness of any Subsidiary to the Company; and
(g) in the case of any Subsidiary, Indebtedness not otherwise
permitted by Section 6.01(a), (b), (c), (d), (e) or (f) provided that at the
time of and after giving effect to the incurrence of such Indebtedness and the
application of the proceeds thereof the aggregate principal amount of all such
Indebtedness, and of all Indebtedness previously incurred pursuant to this
Section 6.01(g), and then outstanding, shall not exceed 25% of Consolidated
EBITDA for the period of four full fiscal quarters of the Company and the
Subsidiaries then most recently ended in respect of which financial statements
shall have been delivered pursuant to Section 5.01(a) or (b), as the case may
be;
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provided, however, that no Subsidiary shall create, incur or assume any
indebtedness pursuant to any provision of this Section 6.01 if an Event of
Default shall have occurred and be continuing or would result from such
creation, incurrence or assumption.
SECTION 6.02 Liens. The Company will not, and will not permit any
Subsidiary to, create, incur, assume or permit to exist any Lien on any property
or asset now owned or hereafter acquired by it, or assign or sell any income or
revenues (including accounts receivable) or rights in respect of any thereof,
except:
(a) Permitted Encumbrances;
(b) any Lien on any property or asset of the Company or any
Subsidiary existing on the date hereof and set forth in Schedule 6.02; provided
that (i) such Lien shall not extend to any other property or asset of the
Company or such Subsidiary and (ii) such Lien shall secure only those
obligations which it secures on the date hereof;
(c) Liens on properties or assets of SFPP securing the SFPP First
Mortgage Notes and the SFPP Revolving Credit Facility; and
(d) Liens existing on any property or asset prior to the acquisition
thereof by the Company or any Subsidiary or existing on any property or asset of
any Person that becomes a Subsidiary after the date hereof prior to the time
such Person becomes a Subsidiary and securing Indebtedness permitted by Sections
6.01(d) and/or (e) in an aggregate principal amount at any one time outstanding
not in excess of $100,000,000; provided that (i) such Lien is not created in
contemplation of or in connection with such acquisition or such Person becoming
a Subsidiary , as the case may be, (ii) such Lien shall not apply to any other
property or assets of the Company or any Subsidiary, (iii) such Lien shall
secure only those obligations which it secures on the date of such acquisition
or the date such Person becomes a Subsidiary, as the case may be, and
extensions, renewals and replacements thereof that do not increase the
outstanding principal amount thereof, and (iv) after giving effect to such
acquisition or such Person becoming a Subsidiary, the Indebtedness secured by
such Lien would be permitted by Section 6.01(e).
SECTION 6.03 Fundamental Changes. The Company will not, and will not
permit any Subsidiary to, merge into or consolidate with any other Person, or
permit any other Person to merge into or consolidate with it, or sell, transfer,
lease or otherwise dispose of (in one transaction or in a series of
transactions) all (or substantially all) of its assets, or all or substantially
all of the stock of or other equity interest in any of the Subsidiaries (in each
case, whether now owned or hereafter acquired), or liquidate or dissolve,
unless: (a) at the time thereof and immediately after giving effect thereto no
Event of Default or Default shall have occurred and be continuing and (b) if the
Company is involved in any such transaction the Company is the surviving entity
or the recipient of any such sale, transfer, lease or other disposition of
assets; provided, however, that in no event shall any such merger,
consolidation, sale, transfer, lease or other disposition whether or not
otherwise permitted by this Section 6.03, have the effect of releasing either
Borrower from any of its obligations and liabilities under this Agreement.
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SECTION 6.04 Restricted Payments. The Company will not, and will not
permit any of the Subsidiaries to, declare or make, or agree to pay or make,
directly or indirectly, any Restricted Payment.
SECTION 6.05 Transactions with Affiliates. The Company will not, and
will not permit any of the Subsidiaries to, sell, lease or otherwise transfer
any property or assets to, or purchase, lease or otherwise acquire any property
or assets from, or otherwise engage in any other transactions with, any of its
Affiliates, except (a) in the ordinary course of business at prices and on terms
and conditions not less favorable to the Company or such Subsidiary than could
be obtained on an arm=s-length basis from unrelated third parties, (b)
transactions between or among the Company and the Subsidiaries not involving any
other Affiliate, (c) any payment which would constitute a Restricted Payment but
for the proviso to the definition of said term in Section 1.01 and (d) loans and
advances by the Company to the General Partner to enable the General Partner to
pay general and administrative costs and expenses pursuant to the partnership
agreement of the Company and in accordance with past practices.
SECTION 6.06 Restrictive Agreements. The Company will not, and will
not permit any of the Subsidiaries to, directly or indirectly, enter into, incur
or permit to exist any agreement or other arrangement that prohibits, restricts
or imposes any condition upon the ability of (a) any Subsidiary to pay dividends
or other distributions with respect to any shares of its Capital Stock or to
make or repay loans or advances to the Company or any other such Subsidiary or
to Guarantee Indebtedness of the Company or any other such Subsidiary or (b) the
Company or any Subsidiary to grant Liens to secure the Obligations (except for
any agreement or arrangement with respect to the assets subject to the Liens
permitted by Section 6.02(d) and except for Indebtedness issued by the Company
pursuant to an Indenture dated as of January 29, 1999 among the Company, as
Issuer, the Guarantors named therein and U.S. Trust Company of Texas, N.A., as
Trustee thereunder); provided that the foregoing shall not apply to (i)
restrictions and conditions imposed by law or by this Agreement or the Companion
Credit Agreement, (ii) customary restrictions and conditions contained in
agreements relating to the sale of a Subsidiary pending such sale, provided such
restrictions and conditions apply only to the Subsidiary that is to be sold and
such sale is permitted hereunder, or (iii) restrictions and conditions existing
on the date hereof identified on Schedule 6.06 (but shall apply to any extension
or renewal of, or any amendment or modification expanding the scope of, any such
restriction or condition) and (iv) restrictions and conditions contained in the
agreement pursuant to which the SFPP First Mortgage Notes were issued and in the
SFPP Revolving Credit Facility.
SECTION 6.07 Financial Covenants. The Company will observe each of
the following requirements:
(a) Ratio of Consolidated Indebtedness to Consolidated EBITDA. The
Company will not at any time permit the ratio of Consolidated Indebtedness to
Consolidated EBITDA for the four full fiscal quarters ended in respect of which
financial statements shall have been delivered pursuant to Section 5.01(a) or
(b), as the case may be, to exceed 4.00 to 1.0. For purposes of this Section
6.07(a), if during any period the Company acquires any Person (or any interest
in any Person) or all or substantially all of the assets of any Person, the
EBITDA attributable to such assets or an amount equal to the percentage of
ownership of the Company in
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such Person times the EBITDA of such Person, for such period determined on a pro
forma basis (which determination, in each case, shall be subject to approval of
the Required Lenders, not to be unreasonably withheld) may be included as
Consolidated EBITDA for such period, if on the date of such acquisition no
Indebtedness (other than Indebtedness permitted pursuant to Section 6.01) is
incurred by reason of and giving effect to such acquisition and such Person, or
the entity acquiring such assets, as the case may be, is a Subsidiary.
(b) Ratio of Consolidated EBITDA to Consolidated Interest Expense.
The Company will not at any time permit the ratio of Consolidated EBITDA for the
four full fiscal quarters then most recently ended in respect of which financial
statements shall have been delivered pursuant to Section 5.01(a) or (b), as the
case may be, to Consolidated Interest Expense for such four full fiscal quarters
to be less than 3.50 to 1.0.
SECTION 6.08 Amendments to Certain Agreements. The Company will not
and will not permit any Subsidiary to amend its partnership agreement or
operating agreement or in the case of SFPP, the SFPP Revolving Credit Facility,
the SFPP First Mortgage Notes or the Note Agreement pursuant to which such First
Mortgage Notes were issued, in each case, in any manner that could reasonably be
expected to be adverse to the Lenders.
ARTICLE VII.
EVENTS OF DEFAULT
SECTION 7.01 Events of Default and Remedies. If any of the following
events ("Events of Default") shall occur and be continuing:
(a) the principal of any Loan or any reimbursement obligation in
respect of any LC Disbursement shall not be paid when and as the same shall
become due and payable, whether at the due date thereof or at a date fixed for
prepayment thereof or otherwise;
(b) any interest on any Loan or any fee or any other amount (other
than an amount referred to in clause (a) of this Article) payable under this
Agreement or any other Loan Document shall not be paid, when and as the same
shall become due and payable, and such failure shall continue unremedied for a
period of three days;
(c) any representation or warranty made or, for purposes of Article
III, deemed made by or on behalf of either Borrower herein, at the direction of
either Borrower or by either Borrower in any other Loan Document or in any
document, certificate or financial statement delivered in connection with this
Agreement or any other Loan Document shall prove to have been incorrect in any
material respect when made or deemed made or reaffirmed, as the case may be;
(d) either Borrower shall fail to observe or perform any covenant,
condition or agreement contained in Section 5.01(d)(iii), 5.03 (with respect to
such Borrower=s existence) or 5.08 or in Article VI;
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(e) either Borrower shall fail to perform or observe any other term,
covenant or agreement contained in this Agreement (other than those specified in
Section 7.01(a), Section 7.01(b) or Section 7.01(d)) or any other Loan Document
to which it is a party and, in any event, such failure shall remain unremedied
for 30 calendar days after the earlier of (i) written notice of such failure
shall have been given to the Company by the Administrative Agent or any Lender
or, (ii) an officer of either Borrower becomes aware of such failure;
(f) other than as specified in Section 7.01(a) or (b), (i) the
Company or any Subsidiary fails to make (whether as primary obligor or as
guarantor or other surety) any payment of principal of, or interest or premium,
if any, on any item or items of Indebtedness (other than as specified in Section
7.01(a), Section 7.01(b) or Article IX) or any payment in respect of any Hedging
Agreement beyond any period of grace provided with respect thereto (not to
exceed 30 days); provided that the aggregate outstanding principal amount of all
Indebtedness or payment obligations in respect of all Hedging Agreements as to
which such a payment default shall occur and be continuing is equal to or
exceeds $5,000,000, or (ii) the Company or any Subsidiary fails to duly observe,
perform or comply with any agreement with any Person or any term or condition of
any instrument, if such failure, either individually or in the aggregate, shall
have caused or shall have the ability to cause the acceleration of the payment
of Indebtedness with an aggregate face amount which is equal to or exceeds
$5,000,000; provided that this Section 7.01(f) shall not apply to secured
Indebtedness that becomes due as a result of the voluntary sale or transfer of
the property or assets securing such Indebtedness, so long as such Indebtedness
is paid in full when due;
(g) an involuntary case shall be commenced or an involuntary petition
shall be filed seeking (i) liquidation, reorganization or other relief in
respect of the Company or any Subsidiary or its debts, or of a substantial part
of its assets, under any Federal, state or foreign bankruptcy, insolvency,
receivership or similar law now or hereafter in effect or (ii) the appointment
of a receiver, trustee, custodian, sequestrator, conservator or similar official
for the Company or any Subsidiary or for a substantial part of its assets, and,
in any such case, such proceeding or petition shall continue undismissed for 60
days or an order or decree approving or ordering any of the foregoing shall be
entered;
(h) the Company, or any Subsidiary shall (i) voluntarily commence any
proceeding or file any petition seeking liquidation, winding-up, reorganization
or other relief under any Federal, state or foreign bankruptcy, insolvency,
receivership or similar law now or hereafter in effect, (ii) consent to the
institution of, or fail to contest in a timely and appropriate manner, any
proceeding or petition described in Section 7.01(g), (iii) apply for or consent
to the appointment of a receiver, trustee, custodian, sequestrator, conservator
or similar official for the Company or any Subsidiary or for a substantial part
of its assets, (iv) file an answer admitting the material allegations of a
petition filed against it in any such proceeding, (v) make a general assignment
for the benefit of creditors or (vi) take any action for the purpose of
effecting any of the foregoing;
(i) the Company or any Subsidiary shall become unable, admit in
writing or fail generally to pay its debts as they become due;
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(j) the General Partner fails to make (whether as primary obligator
or as guarantor or other surety) any payment of principal of, or interest or
premium, if any, on any item or items of Indebtedness beyond any period of grace
provided with respect thereto (not to exceed 30 days); provided that the
aggregate outstanding principal amount of all such Indebtedness as to which such
a payment default shall occur and be continuing is equal to or exceeds
$10,000,000;
(k) one or more judgments for the payment of money in an aggregate
amount in excess of $10,000,000 shall be rendered against the Company, any
Subsidiary or any combination thereof and the same shall remain undischarged for
a period of 30 consecutive days during which execution shall not be effectively
stayed, or any action shall be legally taken by a judgment creditor to attach or
levy upon any assets of the Company or any Subsidiary to enforce any such
judgment;
(l) an ERISA Event shall have occurred that, in the opinion of the
Required Lenders, when taken together with all other ERISA Events that have
occurred, could reasonably be expected to result in liability of the Company and
the Subsidiaries in an aggregate amount exceeding (i) $5,000,000 in any year or
(ii) $10,000,000 for all periods;
(m) either Borrower or any other Person shall petition or apply for
or obtain any order restricting payment by the Issuing Bank under any Letter of
Credit or extending the Issuing Bank=s liability under such Letter of Credit
beyond the expiration date stated therein or otherwise agreed to by the Issuing
Bank;
then, and in any such event, and at any time thereafter, if any Event of Default
shall then be continuing, the Administrative Agent, may, and upon the written
request of the Required Lenders shall, by written notice (including notice sent
by telecopy) to the Company (a "Notice of Default") take any or all of the
following actions, without prejudice to the rights of the Administrative Agent,
any Lender or other holder of any of the Obligations to enforce its claims
against either Borrower (provided that, if an Event of Default specified in
Section 7.01(g) or Section 7.01(h) shall occur with respect to the Company or
any Subsidiary, the result of which would occur upon the giving of a Notice of
Default as specified in clauses (i), (ii) and (v) below, shall occur
automatically without the giving of any Notice of Default): (i) declare the
Total Commitment terminated, whereupon the Commitments of the Lenders shall
forthwith terminate immediately and any accrued facility fees shall forthwith
become due and payable without any other notice of any kind; (ii) declare the
principal of and any accrued interest in respect of all Loans, and all the other
Obligations owing hereunder and under the other Loan Documents, to be, whereupon
the same shall become, forthwith due and payable without presentment, demand,
notice of demand or of dishonor and nonpayment, protest, notice of protest,
notice of intent to accelerate, declaration or notice of acceleration or any
other notice of any kind, all of which are hereby waived by each Borrower; (iii)
exercise any rights or remedies under the Loan Documents; (iv) terminate any
Letter of Credit which may be terminated in accordance with its terms (whether
by the giving of written notice to the beneficiary or otherwise); and (v) direct
the Company to comply, and the Company agrees that upon receipt of such notice
(or upon the occurrence of an Event of Default specified in Section 7.01(g) or
Section 7.01(h)) it will comply, with the provisions of Section 2.06(k).
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SECTION 7.02 Other Remedies. Upon the occurrence and during the
continuance of any Event of Default, the Administrative Agent, acting at the
request of the Required Lenders, may proceed to protect and enforce its rights,
either by suit in equity or by action at law or both, whether for the specific
performance of any covenant or agreement contained in this Agreement or in any
other Loan Document or in aid of the exercise of any power granted in this
Agreement or in any other Loan Document; or may proceed to enforce the payment
of all amounts owing to the Administrative Agent and the Lenders under the Loan
Documents and interest thereon in the manner set forth herein or therein; it
being intended that no remedy conferred herein or in any of the other Loan
Documents is to be exclusive of any other remedy, and each and every remedy
contained herein or in any other Loan Document shall be cumulative and shall be
in addition to every other remedy given hereunder and under the other Loan
Documents now or hereafter existing at law or in equity or by statute or
otherwise.
SECTION 7.03 Application of Moneys During Continuation of Event of
Default. (a) So long as an Event of Default of which the Administrative Agent
shall have given notice to the Lenders shall continue, all moneys received by
the Administrative Agent from either Borrower under the Loan Documents shall,
except as otherwise required by law, be distributed by the Administrative Agent
on the dates selected by the Administrative Agent (individually, a "Distribution
Date" and collectively, the "Distribution Dates") as follows:
first, to payment of the unreimbursed expenses for which the
Administrative Agent or any Lender is to be reimbursed pursuant to
Section 10.03 and unpaid fees owing to the Administrative Agent
pursuant to the Fee Letter;
second, to the ratable payment of accrued but unpaid interest on
the Obligations;
third, to the ratable payment of unpaid principal of the
Obligations;
fourth, to the ratable payment of all other amounts payable by the
Borrowers hereunder;
fifth, to the ratable payment of all other Obligations, until all
Obligations shall have been paid in full; and
finally, to payment to the Borrowers, or their respective successors
or assigns, or as a court of competent jurisdiction may direct, of
any surplus then remaining from such proceeds.
(b) The term "unpaid" as used in this Section 7.03 shall mean all
Obligations outstanding as of a Distribution Date (including any amounts unpaid
under clause (v) of the last sentence of Section 7.01) as to which prior
distributions have not been made, after giving effect to any adjustments which
are made pursuant to Section 10.09 of which the Administrative Agent shall have
been notified.
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ARTICLE VIII.
THE ADMINISTRATIVE AGENT
SECTION 8.01 Appointment, Powers and Immunities. Each Lender hereby
irrevocably appoints and authorizes the Administrative Agent to act as its agent
hereunder and under the other Loan Documents with such powers as are
specifically delegated to the Administrative Agent by the terms of this
Agreement and such other Loan Documents, together with such other powers as are
reasonably incidental thereto. The Administrative Agent (which term as used in
this sentence and in Section 8.05 and the first sentence of Section 8.06 shall
include reference to its Affiliates and its Affiliates= officers, directors,
employees, attorneys, accountants, experts and agents): (a) shall have no duties
or responsibilities except those expressly set forth in the Loan Documents, and
shall not by reason of the Loan Documents be a trustee or fiduciary for any
Lender; (b) makes no representation or warranty to any Lender and shall not be
responsible to the Lenders for any recitals, statements, representations or
warranties contained in this Agreement, or in any certificate or other document
referred to or provided for in, or received by any of them under, this
Agreement, or for the value, validity, effectiveness, genuineness, execution,
legality, enforceability or sufficiency of this Agreement, any other Loan
Document or any other document referred to or provided for herein or therein or
for any failure by either Borrower or any other Person (other than the
Administrative Agent) to perform any of its obligations hereunder or thereunder
or for the existence or value of, or the perfection or priority of any Lien
upon, any collateral security or the financial or other condition of the
Company, the Subsidiaries or any other obligor or guarantor; (c) except pursuant
to Section 8.07 shall not be required to initiate or conduct any litigation or
collection proceedings hereunder; and (d) shall not be responsible for any
action taken or omitted to be taken by it hereunder or under any other document
or instrument referred to or provided for herein or in connection herewith
including its own ordinary negligence, except for its own gross negligence,
willful misconduct or unlawful conduct. The Administrative Agent may employ
agents, accountants, attorneys and experts and shall not be responsible for the
negligence or misconduct of any such agents, accountants, attorneys or experts
selected by it in good faith or any action taken or omitted to be taken in good
faith by it in accordance with the advice of such agents, accountants, attorneys
or experts. The Administrative Agent may deem and treat the payee named in any
Note as the holder thereof for all purposes hereof unless and until a written
notice of the assignment or transfer thereof permitted hereunder shall have been
filed with the Administrative Agent. The Administrative Agent is authorized to
release any cash collateral that is permitted to be released pursuant to the
terms of this Agreement.
SECTION 8.02 Reliance by Administrative Agent. The Administrative
Agent shall be entitled to rely upon any certification, notice or other
communication (including any thereof by telephone, telex, telecopier, telegram
or cable) believed by it to be genuine and correct and to have been signed or
sent by or on behalf of the proper Person or Persons, and upon advice and
statements of legal counsel, independent accountants and other experts selected
by the Administrative Agent in good faith.
SECTION 8.03 Defaults; Events of Default. The Administrative Agent
shall not be deemed to have knowledge of the occurrence of a Default or an Event
of Default (other than the non-payment of principal of or interest on Loans or
of fees or failure to reimburse LC
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Disbursements) unless the Administrative Agent has received notice from a Lender
or a Borrower specifying such Default or Event of Default and stating that such
notice is a "Notice of Default."In the event that the Administrative Agent
receives such a notice of the occurrence of a Default or Event of Default, the
Administrative Agent shall give prompt notice thereof to the Lenders. In the
event of a payment Default or Event of Default, the Administrative Agent shall
give each Lender prompt notice of each such payment Default or Event of Default.
SECTION 8.04 Rights as a Lender. With respect to its Commitments and
the Loans made by it and its issuance, or its participation in the issuance, of
each Letter of Credit, First Union National Bank (and any successor acting as
Administrative Agent) in its capacity as a Lender hereunder shall have the same
rights and powers hereunder as any other Lender and may exercise the same as
though it were not acting as the Administrative Agent, and the term "Lender" or
"Lenders" shall, unless the context otherwise indicates, include the
Administrative Agent in its individual capacity. First Union National Bank (and
any successor acting as Administrative Agent) and its Affiliates may (without
having to account therefor to any Lender) accept deposits from, lend money to
and generally engage in any kind of banking, trust or other business with either
Borrower (and any of its Affiliates) as if it were not acting as the
Administrative Agent. First Union National Bank and its Affiliates may accept
fees and other consideration from the Company or the Subsidiary Borrower for
services in connection with this Agreement or otherwise without having to
account for the same to the Lenders.
SECTION 8.05 INDEMNIFICATION. THE LENDERS AGREE TO INDEMNIFY THE
ADMINISTRATIVE AGENT, THE SYNDICATION AGENT AND THE DOCUMENTATION AGENT RATABLY
IN ACCORDANCE WITH THEIR APPLICABLE PERCENTAGES FOR THE INDEMNITY MATTERS AS
DESCRIBED IN SECTION 10.03 TO THE EXTENT NOT INDEMNIFIED OR REIMBURSED BY THE
COMPANY UNDER SECTION 10.03, BUT WITHOUT LIMITING THE OBLIGATIONS OF THE COMPANY
UNDER SAID SECTION 10.03 AND FOR ANY AND ALL OTHER LIABILITIES, OBLIGATIONS,
LOSSES, DAMAGES, PENALTIES, ACTIONS, JUDGMENTS, SUITS, COSTS, EXPENSES OR
DISBURSEMENTS OF ANY KIND AND NATURE WHATSOEVER WHICH MAY BE IMPOSED ON,
INCURRED BY OR ASSERTED AGAINST THE ADMINISTRATIVE AGENT, THE SYNDICATION AGENT
OR THE DOCUMENTATION AGENT IN ANY WAY RELATING TO OR ARISING OUT OF: (A) THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENT CONTEMPLATED BY OR REFERRED TO HEREIN OR
THE TRANSACTIONS CONTEMPLATED HEREBY, BUT EXCLUDING, UNLESS A DEFAULT OR AN
EVENT OF DEFAULT HAS OCCURRED AND IS CONTINUING, NORMAL ADMINISTRATIVE COSTS AND
EXPENSES INCIDENT TO THE PERFORMANCE OF ITS AGENCY DUTIES, IF ANY, HEREUNDER OR
(B) THE ENFORCEMENT OF ANY OF THE TERMS OF THIS AGREEMENT OR OF ANY OTHER LOAN
DOCUMENT; WHETHER OR NOT ANY OF THE FOREGOING SPECIFIED IN THIS SECTION 8.05
ARISES FROM THE SOLE OR CONCURRENT NEGLIGENCE OF THE ADMINISTRATIVE AGENT, THE
SYNDICATION AGENT OR THE DOCUMENTATION AGENT, AS THE CASE MAY BE; PROVIDED THAT
NO LENDER SHALL BE LIABLE FOR ANY OF THE FOREGOING TO THE EXTENT THEY ARISE FROM
THE GROSS NEGLIGENCE, WILLFUL MISCONDUCT OR
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UNLAWFUL CONDUCT OF THE ADMINISTRATIVE AGENT, THE SYNDICATION AGENT OR THE
DOCUMENTATION AGENT.
SECTION 8.06 Non-Reliance on Agents and other Lenders. Each Lender
acknowledges and agrees that it has, independently and without reliance on the
Administrative Agent, the Syndication Agent, the Documentation Agent or any
other Lender, and based on such documents and information as it has deemed
appropriate, made its own credit analysis of the Company and the Subsidiaries
and its decision to enter into this Agreement, and that it will, independently
and without reliance upon the Administrative Agent, the Syndication Agent, the
Documentation Agent or any other Lender, and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
analysis and decisions in taking or not taking action under this Agreement.
Neither the Administrative Agent, the Syndication Agent nor the Documentation
Agent shall be required to keep itself informed as to the performance or
observance by either Borrower of this Agreement, the other Loan Documents or any
other document referred to or provided for herein or to inspect the properties
or books of either Borrower. Except for notices, reports and other documents and
information expressly required to be furnished to the Lenders by the
Administrative Agent hereunder, neither the Administrative Agent, the
Syndication Agent nor the Documentation Agent shall have any duty or
responsibility to provide any Lender with any credit or other information
concerning the affairs, financial condition or business of either Borrower (or
any of its Affiliates) which may come into the possession of the Administrative
Agent, the Syndication Agent, the Documentation Agent or any of its respective
Affiliates. In this regard, each Lender acknowledges that Andrews & Kurth L.L.P.
is acting in this transaction as special counsel to the Administrative Agent
only. Each Lender will consult with its own legal counsel to the extent that it
deems necessary in connection with this Agreement and other Loan Documents and
the matters contemplated herein and therein.
SECTION 8.07 Action by Administrative Agent. Except for action or
other matters expressly required of the Administrative Agent hereunder, the
Administrative Agent shall in all cases be fully justified in failing or
refusing to act hereunder unless it shall (a) receive written instructions from
the Required Lenders (or all of the Lenders as expressly required by Section
10.02) specifying the action to be taken, and (b) be indemnified to its
satisfaction by the Lenders against any and all liability and expenses which may
be incurred by it by reason of taking or continuing to take any such action. The
instructions of the Required Lenders (or all of the Lenders as expressly
required by Section 10.02) and any action taken or failure to act pursuant
thereto by the Administrative Agent shall be binding on all of the Lenders. If a
Default or Event of Default has occurred and is continuing, the Administrative
Agent shall take such action with respect to such Default or Event of Default as
shall be directed by the Required Lenders (or all of the Lenders as required by
Section 10.02) in the written instructions (with indemnities) described in this
Section 8.07; provided that, unless and until the Administrative Agent shall
have received such directions, the Administrative Agent may (but shall not be
obligated to) take such action, or refrain from taking such action, with respect
to such Default or Event of Default as it shall deem advisable in the best
interests of the Lenders. In no event, however, shall the Administrative Agent
be required to take any action which exposes the Administrative Agent to
personal liability or which is contrary to this Agreement or applicable law.
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SECTION 8.08 Resignation or Removal of Administrative Agent. Subject
to the appointment and acceptance of a successor Administrative Agent as
provided below, the Administrative Agent may resign at any time by giving notice
thereof to the Lenders and the Company, and the Administrative Agent may be
removed at any time with or without cause by the Required Lenders. Upon any such
resignation or removal, the Required Lenders shall have the right to appoint a
successor Administrative Agent. If no successor Administrative Agent shall have
been so appointed by the Required Lenders and shall have accepted such
appointment within thirty (30) days after the retiring Administrative Agent=s
giving of notice of resignation or the Required Lenders= removal of the retiring
Administrative Agent, then the retiring Administrative Agent may, on behalf of
the Lenders, appoint a successor Administrative Agent. Upon the acceptance of
such appointment hereunder by a successor Administrative Agent, such successor
Administrative Agent shall thereupon succeed to and become vested with all the
rights, powers, privileges and duties of the retiring Administrative Agent, and
the retiring Administrative Agent shall be discharged from its duties and
obligations hereunder. After any retiring Administrative Agent=s resignation or
removal hereunder as Administrative Agent, the provisions of this Article VIII
and Section 10.03 shall continue in effect for its benefit in respect of any
actions taken or omitted to be taken by it while it was acting as the
Administrative Agent.
SECTION 8.09 Duties of Syndication Agent and Documentation Agent.
Notwithstanding the indemnity of the Syndication Agent and the Documentation
Agent contained in Section 8.05 and in Section 10.03, neither the Syndication
Agent nor the Documentation Agent shall have any duty, responsibility or
liability in such capacity with respect to the administration or enforcement of
this Agreement or any other Loan Document.
ARTICLE IX.
GUARANTY
SECTION 9.01 Guaranty. (a) In consideration of, and in order to
induce the Administrative Agent and the Lenders to enter into this Agreement and
to induce the Lenders to make the Loans and the Issuing Bank to maintain the
Subsidiary Borrower Letter of Credit and to issue new Letters of Credit
hereunder, the Company hereby absolutely, unconditionally and irrevocably
guarantees the punctual payment and performance when due, whether at stated
maturity, by acceleration or otherwise, of the Obligations of the Subsidiary
Borrower, and all covenants of the Subsidiary Borrower, now or hereafter
existing under this Agreement and the other Loan Documents to which the
Subsidiary Borrower is a party, whether for principal, interest (including
interest accruing or becoming owing both prior to and subsequent to the
commencement of any proceeding against or with respect to the Subsidiary
Borrower under any chapter of Title 11 of the United States Code, as now or
hereafter in effect, or any successor thereto (the "Bankruptcy Code")), fees,
commissions, expenses (including reasonable attorneys= fees and expenses) or
otherwise (all such obligations being the "Guaranteed Obligations"). The Company
agrees to pay any and all expenses incurred by each Lender and the
Administrative Agent in enforcing this Guaranty against the Company.
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(b) This Guaranty is an absolute, unconditional, present and
continuing guaranty of payment and not of collectibility and is in no way
conditioned upon any attempt to collect from the Subsidiary Borrower or any
other action, occurrence or circumstance whatsoever.
SECTION 9.02 Continuing Guaranty. (a) The Company guarantees that the
Guaranteed Obligations will be paid strictly in accordance with the terms of
this Agreement and the other Loan Documents. The Company agrees that, to the
maximum extent permitted by applicable law, the Guaranteed Obligations and Loan
Documents to which the Subsidiary Borrower is a party may be extended or
renewed, and indebtedness thereunder repaid and reborrowed in whole or in part,
without notice to or assent by the Company, and that it will remain bound upon
this Guaranty notwithstanding any extension, renewal or other alteration of any
Guaranteed Obligations or such Loan Documents, or any repayment and reborrowing
of Loans. To the maximum extent permitted by applicable law, except as otherwise
expressly provided in this Agreement or any other Loan Document to which the
Company is a party, the obligations of the Company under this Guaranty shall be
absolute, unconditional and irrevocable, and shall be performed strictly in
accordance with the terms hereof under any circumstances whatsoever, including:
(i) any modification, amendment, supplement, renewal, extension for
any period, increase, decrease, alteration or rearrangement of all or any
part of the Guaranteed Obligations, or of this Agreement or any other Loan
Document executed in connection herewith, or any contract or understanding
among the Company, the Subsidiary Borrower, the Administrative Agent
and/or the Lenders, or any other Person, pertaining to the Guaranteed
Obligations;
(ii) any adjustment, indulgence, forbearance or compromise that might
be granted or given by the Lenders to the Company or any other Person
liable on the Guaranteed Obligations;
(iii)the insolvency, bankruptcy, arrangement, adjustment,
composition, liquidation, disability, dissolution or lack of power of the
Company, the Subsidiary Borrower or any other Person at any time liable
for the payment of all or part of the Guaranteed Obligations; or any
dissolution of the Company, the Subsidiary Borrower or any sale, lease or
transfer of any or all of the assets of the Company or the Subsidiary
Borrower, or any changes in the shareholders of the Company, the
Subsidiary Borrower, or any reorganization of the Company or the
Subsidiary Borrower;
(iv) the invalidity, illegality or unenforceability of all or any
part of the Guaranteed Obligations, or any document or agreement executed
in connection with the Guaranteed Obligations, for any reason whatsoever,
including the fact that (A) the Guaranteed Obligations, or any part
thereof, exceeds the amount permitted by law, (B) the act of creating the
Guaranteed Obligations or any part thereof is ultra vires, (C) the
officers or representatives executing the documents or otherwise creating
the Guaranteed Obligations acted in excess of their authority, (D) the
Guaranteed Obligations or any part thereof violate applicable usury laws,
(E) the Company or the Subsidiary Borrower has
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valid defenses, claims and offsets (whether at law or in equity, by
agreement or by statute) which render the Guaranteed Obligations wholly or
partially uncollectible from the Company or the Subsidiary Borrower, (F)
the creation, performance or repayment of the Guaranteed Obligations (or
execution, delivery and performance of any document or instrument
representing part of the Guaranteed Obligations or executed in connection
with the Guaranteed Obligations, or given to secure the repayment of the
Guaranteed Obligations) is illegal, uncollectible, legally impossible or
unenforceable, or (G) this Agreement, any other Loan Document, or any
other document or instrument pertaining to the Guaranteed Obligations has
been forged or otherwise is irregular or not genuine or authentic;
(v) any full or partial release of the liability of the Company or
the Subsidiary Borrower on the Guaranteed Obligations or any part thereof,
or any other Person now or hereafter liable, whether directly or
indirectly, jointly, severally, or jointly and severally, to pay, perform,
guarantee or assure the payment of the Guaranteed Obligations or any part
thereof; it being recognized, acknowledged and agreed by the Company that
the Company may be required to pay the Guaranteed Obligations in full
without assistance or support of any other Person, and the Company has not
been induced to enter into this Guaranty on the basis of a contemplation,
belief, understanding or agreement that any other Person will be liable to
perform the Guaranteed Obligations, or that the Administrative Agent or
any Lender will look to any other Person to perform the Guaranteed
Obligations;
(vi) the taking or accepting of any other security, collateral or
guaranty, or other assurance of payment, for all or any part of the
Guaranteed Obligations;
(vii)any release, surrender, exchange, subordination,
deterioration, waste, loss or impairment of any collateral, property or
security, at any time existing in connection with, or assuring or
securing payment of, all or any part of the Guaranteed Obligations;
(viii) the failure of the Administrative Agent, the Lenders or any
other Person to exercise diligence or reasonable care in the preservation,
protection, enforcement, sale or other handling or treatment of all or any
part of such collateral, property or security;
(ix) the fact that any collateral, security or Lien contemplated or
intended to be given, created or granted as security for the repayment of
the Guaranteed Obligations shall not be properly perfected or created, or
shall prove to be unenforceable or subordinate to any other Lien; it being
recognized and agreed by the Company that the Company is not entering into
this Guaranty in reliance on, or in contemplation of the benefits of, the
validity, enforceability, collectibility or value of any of the collateral
for the Guaranteed Obligations;
(x) any payment by the Subsidiary Borrower or the Company to the
Administrative Agent or any Lender is held to constitute a preference
under bankruptcy laws, or for any other reason either the Administrative
Agent or any Lender is required to
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refund such payment or pay such amount to the Subsidiary Borrower or any
other Person; or
(xi) any other action taken or omitted to be taken with respect to
this Agreement, any other Loan Document, the Guaranteed Obligations, or
any security and collateral therefor, whether or not such action or
omission prejudices the Company or increases the likelihood that the
Company will be required to pay the Guaranteed Obligations pursuant to the
terms hereof;
it being the unambiguous and unequivocal intention of the Company that the
Company shall be obligated to pay the Guaranteed Obligations when due,
notwithstanding any occurrence, circumstance, event, action, or omission
whatsoever, whether contemplated or uncontemplated, and whether or not otherwise
or particularly described herein, except for the full and final payment and
satisfaction of the Guaranteed Obligations after the termination of the
Commitments of all Lenders and the expiration or termination of the Subsidiary
Borrower Letter of Credit.
(b) The Company further agrees that, to the fullest extent permitted
by law, as between the Company, on the one hand, and the Lenders and the
Administrative Agent, on the other hand, (i) the maturity of the Guaranteed
Obligations may be accelerated as provided in Article VII for the purposes of
this Guaranty, notwithstanding any stay, injunction or other prohibition
preventing such acceleration of the Guaranteed Obligations, and (ii) in the
event of any acceleration of the Guaranteed Obligations as provided in Article
VII, the Guaranteed Obligations (whether or not due and payable) shall forthwith
become due and payable by the Company for the purpose of this Guaranty.
SECTION 9.03 Effect of Debtor Relief Laws. If after receipt of any
payment of all or any part of the Guaranteed Obligations, the Administrative
Agent, the Issuing Bank or any Lender is for any reason compelled to surrender
or voluntarily surrenders, such payment to any Person (a) because such payment
is or may be avoided, invalidated, declared fraudulent, set aside, determined to
be void or voidable as a preference, fraudulent conveyance, fraudulent transfer,
impermissible set-off or a diversion of trust funds or (b) for any other reason,
including (i) any judgment, decree or order of any court or administrative body
having jurisdiction over the Administrative Agent, the Issuing Bank, any Lender
or any of their respective properties or (ii) any settlement or compromise of
any such claim effected by the Administrative Agent, the Issuing Bank or any
Lender with any such claimant (including the Subsidiary Borrower), then the
Guaranteed Obligations or part thereof intended to be satisfied shall be
reinstated and continue, and this Guaranty shall continue in full force as if
such payment had not been received, notwithstanding any revocation thereof or
the cancellation of any instrument evidencing any of the Guaranteed Obligations
or otherwise; and the Company shall be liable to pay the Administrative Agent,
the Issuing Bank and the Lenders, and hereby does indemnify the Administrative
Agent, the Issuing Bank and the Lenders and holds them harmless for the amount
of such payment so surrendered and all reasonable expenses (including reasonable
attorneys= fees, court costs and expenses attributable thereto) incurred by the
Administrative Agent, the Issuing Bank or any Lender in the defense of any claim
made against it that any payment received by the Administrative Agent, the
Issuing Bank or any Lender in respect of all or part of
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the Guaranteed Obligations must be surrendered. The provisions of this paragraph
shall survive the termination of this Guaranty, and any satisfaction and
discharge of the Subsidiary Borrower by virtue of any payment, court order or
any Federal or state law.
SECTION 9.04 Waiver. The Company hereby waives promptness, diligence,
notice of acceptance and any other notice with respect to any of the Guaranteed
Obligations and this Guaranty and waives presentment, demand for payment, notice
of intent to accelerate, notice of dishonor or nonpayment and any requirement
that the Administrative Agent or any Lender institute suit, collection
proceedings or take any other action to collect the Guaranteed Obligations,
including any requirement that the Administrative Agent or any Lender exhaust
any right or take any action against the Subsidiary Borrower or any other Person
or any collateral (it being the intention of the Administrative Agent, the
Lenders and the Company that this Guaranty is to be a guaranty of payment and
not of collection). It shall not be necessary for the Administrative Agent or
any Lender, in order to enforce any payment by the Company hereunder, to
institute suit or exhaust its rights and remedies against the Subsidiary
Borrower or any other Person, including others liable to pay any Guaranteed
Obligations, or to enforce its rights against any security ever given to secure
payment thereof. The Company hereby expressly waives to the maximum extent
permitted by applicable law each and every right to which it may be entitled by
virtue of the suretyship laws of the State of New York or any other state in
which it may be located, including any and all rights it may have pursuant to
Rule 31, Texas Rules of Civil Procedure, Section 17.001 of the Texas Civil
Practice and Remedies Code and Chapter 34 of the Texas Business and Commerce
Code.
SECTION 9.05 Full Force and Effect. This Guaranty is a continuing
guaranty and shall remain in full force and effect until all of the Guaranteed
Obligations under this Agreement and the other Loan Documents to which the
Subsidiary Borrower is a party and all other amounts payable under this Guaranty
have been paid in full (after the termination of the Commitments of the Lenders
and the termination or expiration of the Subsidiary Borrower Letter of Credit).
All rights, remedies and powers provided in this Guaranty may be exercised, and
all waivers contained in this Guaranty may be enforced, only to the extent that
the exercise or enforcement thereof does not violate any provisions of
applicable law which may not be waived.
ARTICLE X.
MISCELLANEOUS
SECTION 10.01 Notices, Etc. The Administrative Agent, the Issuing
Bank, any Lender or the holder of any of the Obligations, giving consent or
notice or making any request of either Borrower provided for hereunder, shall
notify each Lender (in the case of the Administrative Agent and/or the Issuing
Bank) and the Administrative Agent (in the case of a Lender) thereof. In the
event that the holder of any Note or any of the Obligations (including any
Lender) shall transfer such Note or Obligations, it shall promptly so advise the
Administrative Agent which shall be entitled to assume conclusively that no
transfer of any Note or any of the Obligations has been made by any holder
(including any Lender) unless and until the Administrative Agent receives
written notice to the contrary. Except with respect to notices and other
communications expressly permitted to be given by telephone, all notices,
consents,
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requests, approvals, demands and other communications (collectively
"Communications") provided for herein shall be in writing (including facsimile
Communications) and mailed, telecopied or delivered:
(a) if to the Company, to it at:
1301 McKinney Street, Suite 3400
Houston, Texas 77010
Attention:David G. Dehaemers, Jr.
Telecopy No: (713) 276-3704;
(b) if to the Subsidiary Borrower, to it in care of the Company;
(c) if to the Administrative Agent, to it at:
c/o First Union Securities, Inc.
1001 Fannin Street, Suite 2255
Houston, Texas 77002
Attention:Russell Clingman
Telecopy No.: (713)-650-6354;
(d) if to the Issuing Bank, to it at :
c/o First Union Securities, Inc.
1001 Fannin Street, Suite 2255
Houston, Texas 77002
Attention:Russell Clingman
Telecopy No.: (713) 650-6354;
(e) if to the Swingline Lender, to it at:
c/o First Union Securities, Inc.
1001 Fannin Street, Suite 2255
Houston, Texas 77002
Attention:Russell Clingman
Telecopy No.: (713) 650-6354; and
(f) If to any other Lender, as specified on the signature page for
such Lender hereto or, in the case of any Person who becomes a Lender after the
date hereof, as specified on the Assignment and Acceptance executed by such
Person or in the Administrative Questionnaire delivered by such Person or, in
the case of any party hereto, such other address or telecopy number as such
party may hereafter specify for such purpose by notice to the other parties.
All Communications shall, when mailed, telecopied or delivered, be
effective when mailed by certified mail, return receipt requested to any party
at its address specified above, on the signature page hereof or on the signature
page of such Assignment and Acceptance
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(or other address designated by such party in a Communication to the other
parties hereto), or telecopied to any party to the telecopy number set forth
above, on the signature page hereof or on the signature page of such Assignment
and Acceptance (or other telecopy number designated by such party in a
Communication to the other parties hereto), or delivered personally to any party
at its address specified above, on the signature page hereof or on the signature
page of such Assignment and Acceptance (or other address designated by such
party in a Communication to the other parties hereto); provided, however,
Communications to the Administrative Agent pursuant to Article II or Article
VIII shall not be effective until received by the Administrative Agent and
Communications to the Administrative Agent, the Issuing Bank or the Swingline
Lender pursuant to Article II shall be at the Principal Office.
SECTION 10.02 Waivers; Amendments. (a) No failure or delay by the
Administrative Agent, the Issuing Bank or any Lender in exercising, and no
course of dealing with respect to, any right or power hereunder shall operate as
a waiver thereof, nor shall any single or partial exercise of any such right or
power, or any abandonment or discontinuance of steps to enforce such a right or
power, preclude any other or further exercise thereof or the exercise of any
other right or power. No notice to or demand on either Borrower in any case
shall entitle such Borrower to any other or further notice or demand in similar
or other circumstances. No waiver of any provision of this Agreement or consent
to any departure therefrom shall in any event be effective unless the same shall
be permitted by Section 10.02(b), and then such waiver or consent shall be
effective only in the specific instance and for the purpose for which given.
Without limiting the generality of the foregoing, the making of a Loan or
issuance of a Letter of Credit shall not be construed as a waiver of any Default
or Event of Default, regardless of whether the Administrative Agent, any Lender
or the Issuing Bank may have had notice or knowledge of such Default at the
time.
(b) No provision of this Agreement or any other Loan Document
provision may be waived, amended or modified except pursuant to an agreement or
agreements in writing entered into by the Borrowers and the Required Lenders or
by the Borrowers and the Administrative Agent with the consent of the Required
Lenders; provided that no such agreement shall (i) increase the Commitment of
any Lender without the written consent of such Lender, (ii) reduce the principal
amount of any Loan or LC Disbursement or reduce the rate of interest thereon, or
reduce any fees payable hereunder, without the written consent of each Lender
affected thereby, (iii) postpone the scheduled date of payment of the principal
amount of any Loan or LC Disbursement, or any interest thereon, or any fees
payable hereunder, or reduce the amount of, waive or excuse any such payment, or
postpone the scheduled date of expiration of any Commitment, without the written
consent of each Lender affected thereby, (iv) change Section 2.18(b) or (c) in a
manner that would alter the pro rata sharing of payments required thereby,
without the written consent of each Lender, or (v) release the Company from its
guaranty contained in Article IX, change any of the provisions of this Section
10.02(b), Section 10.05 or the definition of "Required Lenders" or any other
provision hereof specifying the number or percentage of Lenders required to
waive, amend or modify any rights hereunder or make any determination or grant
any consent hereunder, without the written consent of each Lender (it being
understood that, with the consent of Required Lenders, additional extensions of
credit pursuant to this Agreement may be included in the determination of
"Required Lenders" and provisions relating to the pro rata sharing of payments
on substantially the same basis as the
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Revolving Loans and Commitments are included on the Execution Date); provided
further that no such agreement shall amend, modify or otherwise affect the
rights or duties of the Administrative Agent or the Issuing Bank hereunder
without the prior written consent of the Administrative Agent or the Issuing
Bank, as the case may be.
SECTION 10.03 Payment of Expenses, Indemnities, etc. The
Company agrees:
(a) whether or not the transactions hereby contemplated are
consummated, pay all reasonable expenses of the Administrative Agent in the
administration (both before and after the execution hereof and including advice
of counsel as to the rights and duties of the Administrative Agent and the
Lenders with respect thereto) of, and in connection with the negotiation,
syndication, investigation, preparation, execution and delivery of, recording or
filing of, preservation of rights under, enforcement of, and refinancing,
renegotiation or restructuring of, the Loan Documents and any amendment, waiver
or consent relating thereto (including, without limitation, travel, photocopy,
mailing, courier, telephone and other similar expenses of the Administrative
Agent, the cost of environmental audits, surveys and appraisals at reasonable
intervals, the reasonable fees and disbursements of counsel and other outside
consultants for the Administrative Agent and, in the case of enforcement of this
Agreement and the other Loan Documents, the reasonable fees and disbursements of
counsel, including the allocated costs of inside counsel, for each of the
Administrative Agent and the Issuing Bank, and each Lender); and promptly
reimburse the Administrative Agent for all amounts expended, advanced or
incurred by the Administrative Agent or the Lenders to satisfy any obligation of
either Borrower under this Agreement.
(b) TO INDEMNIFY THE ADMINISTRATIVE AGENT, THE SYNDICATION AGENT, THE
DOCUMENTATION AGENT, THE ISSUING BANK AND EACH LENDER AND EACH OF THEIR
AFFILIATES AND EACH OF THEIR OFFICERS, DIRECTORS, EMPLOYEES, REPRESENTATIVES,
AGENTS, ATTORNEYS, ACCOUNTANTS AND EXPERTS ("INDEMNIFIED PARTIES") FROM, HOLD
EACH OF THEM HARMLESS AGAINST AND PROMPTLY UPON DEMAND PAY OR REIMBURSE EACH OF
THEM FOR, THE INDEMNITY MATTERS WHICH MAY BE REASONABLY INCURRED BY OR ASSERTED
AGAINST OR INVOLVE ANY OF THEM (WHETHER OR NOT ANY OF THEM IS DESIGNATED A PARTY
THERETO) AS A RESULT OF, ARISING OUT OF OR IN ANY WAY RELATED TO (I) ANY ACTUAL
OR PROPOSED USE BY EITHER BORROWER OF THE PROCEEDS OF ANY OF THE LOANS OR ANY
LETTER OF CREDIT, (II) THE EXECUTION, DELIVERY AND PERFORMANCE OF THE LOAN
DOCUMENTS, (III) THE OPERATIONS OF THE BUSINESS OF THE COMPANY AND THE
SUBSIDIARIES, (IV) THE FAILURE OF THE COMPANY OR ANY SUBSIDIARY TO COMPLY WITH
THE TERMS OF THIS AGREEMENT, OR WITH ANY REQUIREMENT OF LAW, (V) ANY INACCURACY
OF ANY REPRESENTATION OR ANY BREACH OF ANY WARRANTY OF EITHER BORROWER SET FORTH
IN ANY OF THE LOAN DOCUMENTS, (VI) THE ISSUANCE, EXECUTION AND DELIVERY OR
TRANSFER OF OR PAYMENT OR FAILURE TO PAY UNDER ANY LETTER OF CREDIT, (VII) THE
PAYMENT OF A DRAWING UNDER ANY LETTER OF CREDIT NOTWITHSTANDING THE
NON-COMPLIANCE, NON-DELIVERY OR OTHER
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IMPROPER PRESENTATION OF THE MANUALLY EXECUTED DRAFT(S) AND CERTIFICATION(S) OR
(VIII) ANY OTHER ASPECT OF THE LOAN DOCUMENTS, INCLUDING THE REASONABLE FEES AND
DISBURSEMENTS OF COUNSEL AND ALL OTHER EXPENSES INCURRED IN CONNECTION WITH
INVESTIGATING, DEFENDING OR PREPARING TO DEFEND ANY SUCH ACTION, SUIT,
PROCEEDING (INCLUDING ANY INVESTIGATIONS, LITIGATION OR INQUIRIES) OR CLAIM AND
INCLUDING ALL INDEMNITY MATTERS ARISING BY REASON OF THE ORDINARY NEGLIGENCE OF
ANY INDEMNIFIED PARTY, BUT EXCLUDING ALL INDEMNITY MATTERS ARISING SOLELY BY
REASON OF CLAIMS BETWEEN THE LENDERS OR ANY LENDER AND THE ADMINISTRATIVE AGENT,
THE SYNDICATION AGENT, OR THE DOCUMENTATION AGENT OR A LENDER=S SHAREHOLDERS
AGAINST THE ADMINISTRATIVE AGENT OR LENDER OR BY REASON OF THE GROSS NEGLIGENCE,
WILLFUL MISCONDUCT OR UNLAWFUL CONDUCT ON THE PART OF THE INDEMNIFIED PARTY
SEEKING INDEMNIFICATION.
(c) TO INDEMNIFY AND HOLD HARMLESS FROM TIME TO TIME THE INDEMNIFIED
PARTIES FROM AND AGAINST ANY AND ALL LOSSES, CLAIMS, COST RECOVERY ACTIONS,
ADMINISTRATIVE ORDERS OR PROCEEDINGS, DAMAGES AND LIABILITIES TO WHICH ANY SUCH
PERSON MAY BECOME SUBJECT (I) UNDER ANY ENVIRONMENTAL LAW APPLICABLE TO THE
COMPANY OR ANY SUBSIDIARY OR ANY OF THEIR PROPERTIES OR ASSETS, INCLUDING THE
TREATMENT OR DISPOSAL OF HAZARDOUS SUBSTANCES ON ANY OF THEIR PROPERTIES OR
ASSETS, (II) AS A RESULT OF THE BREACH OR NON-COMPLIANCE BY THE COMPANY OR ANY
SUBSIDIARY WITH ANY ENVIRONMENTAL LAW APPLICABLE TO THE COMPANY OR ANY
SUBSIDIARY, (III) DUE TO PAST OWNERSHIP BY THE COMPANY OR ANY SUBSIDIARY OF ANY
OF THEIR PROPERTIES OR ASSETS OR PAST ACTIVITY ON ANY OF THEIR PROPERTIES OR
ASSETS WHICH, THOUGH LAWFUL AND FULLY PERMISSIBLE AT THE TIME, COULD RESULT IN
PRESENT LIABILITY, (IV) THE PRESENCE, USE, RELEASE, STORAGE, TREATMENT OR
DISPOSAL OF HAZARDOUS SUBSTANCES ON OR AT ANY OF THE PROPERTIES OWNED OR
OPERATED BY THE BORROWERS OR ANY SUBSIDIARY, OR (V) ANY OTHER ENVIRONMENTAL,
HEALTH OR SAFETY CONDITION IN CONNECTION WITH THE LOAN DOCUMENTS, PROVIDED,
HOWEVER, THAT NO INDEMNITY SHALL BE AFFORDED UNDER THIS SECTION 10.03(c) IN
RESPECT OF ANY PROPERTY OR ASSET FOR ANY OCCURRENCE ARISING FROM THE ACTS OR
OMISSIONS OF THE ADMINISTRATIVE AGENT OR ANY LENDER DURING THE PERIOD AFTER
WHICH SUCH PERSON, ITS SUCCESSORS OR ASSIGNS SHALL HAVE OBTAINED POSSESSION OF
SUCH PROPERTY OR ASSET (WHETHER BY FORECLOSURE OR DEED IN LIEU OF FORECLOSURE,
AS MORTGAGEE IN POSSESSION OR OTHERWISE).
(d) No Indemnified Party may settle any claim to be indemnified
without the consent of the indemnitor, such consent not to be unreasonably
withheld; provided, that the indemnitor may not reasonably withhold consent to
any settlement that an Indemnified Party proposes, if the indemnitor does not
have the financial ability to pay all its obligations
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outstanding and asserted against the indemnitor at that time, including the
maximum potential claims against the Indemnified Party to be indemnified
pursuant to this Section 10.03.
(e) In the case of any indemnification hereunder, the Administrative
Agent or Lender, as appropriate shall give notice to the Company of any such
claim or demand being made against the Indemnified Party and the Company shall
have the non-exclusive right to join in the defense against any such claim or
demand; provided that if the Company provides a defense, the Indemnified Party
shall bear its own cost of defense unless there is a conflict between the
Company and such Indemnified Party.
(f) THE FOREGOING INDEMNITIES SHALL EXTEND TO THE INDEMNIFIED PARTIES
NOTWITHSTANDING THE SOLE OR CONCURRENT NEGLIGENCE OF EVERY KIND OR CHARACTER
WHATSOEVER, WHETHER ACTIVE OR PASSIVE, WHETHER AN AFFIRMATIVE ACT OR AN
OMISSION, INCLUDING, ALL TYPES OF NEGLIGENT CONDUCT IDENTIFIED IN THE
RESTATEMENT (SECOND) OF TORTS OF ONE OR MORE OF THE INDEMNIFIED PARTIES OR BY
REASON OF STRICT LIABILITY IMPOSED WITHOUT FAULT ON ANY ONE OR MORE OF THE
INDEMNIFIED PARTIES. TO THE EXTENT THAT AN INDEMNIFIED PARTY IS FOUND TO HAVE
COMMITTED AN ACT OF GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OR ENGAGED IN
UNLAWFUL CONDUCT, THIS CONTRACTUAL OBLIGATION OF INDEMNIFICATION SHALL CONTINUE
BUT SHALL ONLY EXTEND TO THE PORTION OF THE CLAIM THAT IS DEEMED TO HAVE
OCCURRED BY REASON OF EVENTS OTHER THAN THE GROSS NEGLIGENCE, WILLFUL MISCONDUCT
OR UNLAWFUL CONDUCT OF THE INDEMNIFIED PARTY.
(g) The Company=s obligations under this Section 10.03 shall survive
any termination of this Agreement, the payment of the Loans and the expiration
of the Letters of Credit and shall continue thereafter in full force and effect,
for a period of six years.
(h) To the extent that the Company fails to pay any amount required
to be paid by it to the Administrative Agent or the Issuing Bank under this
Section 10.03, each Lender severally agrees to pay to the Administrative Agent
or the Issuing Bank, as the case may be, such Lender=s Applicable Percentage
(determined as of the time that the applicable unreimbursed expense or indemnity
payment is sought) of such unpaid amount; provided that the unreimbursed expense
or indemnified loss, claim, damage, liability or related expense, as the case
may be, was incurred by or asserted against the Administrative Agent or the
Issuing Bank in its capacity as such.
(i) The Company shall pay any amounts due under this Section 10.03
within thirty (30) days of the receipt by the Company of notice of the amount
due.
SECTION 10.04 Successors and Assigns. The provisions of this
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors
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and assigns permitted hereby. Nothing in this Agreement, expressed or implied,
shall be construed to confer upon any Person (other than the parties hereto,
their respective successors and assigns permitted hereby and, to the extent
expressly contemplated hereby, the Related Parties of each of the Administrative
Agent, the Issuing Bank and the Lenders) any legal or equitable right, remedy or
claim under or by reason of this Agreement.
SECTION 10.05 Assignments and Participations.
(a) Neither Borrower may assign its rights or obligations hereunder
or under the Notes or any Letter of Credit without the prior consent of all of
the Lenders and the Administrative Agent.
(b) Any Lender may assign to one or more assignees all or a portion
of its rights and obligations under this Agreement (including all or a portion
of its Commitment and the Loans at the time owing to it); provided that (i)
except in the case of an assignment to a Lender or an Affiliate of a Lender,
each of the Company and the Administrative Agent (and, in the case of an
assignment of all or a portion of a Commitment or any Lender=s obligations in
respect of its LC Exposure or Swingline Exposure, the Issuing Bank and the
Swingline Lender) must give their prior written consent to such assignment
(which consent shall not be unreasonably withheld), (ii) except in the case of
an assignment to a Lender or an Affiliate of a Lender or an assignment of the
entire remaining amount of the assigning Lender=s Commitment, the amount of the
Commitment of the assigning Lender subject to each such assignment (determined
as of the date the Assignment and Acceptance with respect to such assignment is
delivered to the Administrative Agent) shall not be less than $10,000,000 unless
each of the Company and the Administrative Agent otherwise consent, (iii) each
partial assignment shall be made as an assignment of a proportionate part of all
the assigning Lender=s rights and obligations under this Agreement, (iv) the
parties to each assignment shall execute and deliver to the Administrative Agent
an Assignment and Acceptance, together with a processing and recordation fee of
$3,500 for each such assignment (provided that the processing and recordation
fee for each assignment made by any Lender party to this Agreement on the
Execution Date shall be $2,000), and (v) the assignee, if it shall not be a
Lender, shall deliver to the Administrative Agent an Administrative
Questionnaire; provided further that any consent of the Company otherwise
required under this Section 10.05(b) shall not be required if an Event of
Default under Section 7.01(g) or Section 7.01(h) has occurred and is continuing.
Upon acceptance and recording pursuant to Section 10.05(d), from and after the
effective date specified in each Assignment and Acceptance, the assignee
thereunder shall be a party hereto and, to the extent of the interest assigned
by such Assignment and Acceptance, have the rights and obligations of a Lender
under this Agreement, and the assigning Lender thereunder shall, to the extent
of the interest assigned by such Assignment and Acceptance, be released from its
obligations under this Agreement (and, in the case of an Assignment and
Acceptance covering all of the assigning Lender=s rights and obligations under
this Agreement, such Lender shall cease to be a party hereto but shall continue
to be entitled to the benefits of Sections 2.15, 2.16, 2.17 and 10.03). Any
assignment or transfer by a Lender of rights or obligations under this Agreement
that does not comply with this paragraph shall be treated for purposes of this
Agreement as a sale by such Lender of a participation in such rights and
obligations in accordance with Section 10.05(e).
(c) The Administrative Agent, acting for this purpose as an agent of
the Borrowers, shall maintain at one of its offices in Charlotte, North Carolina
a copy of each
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Assignment and Acceptance delivered to it and a register for the recordation of
the names and addresses of the Lenders, and the Commitment of, and principal
amount of the Loans and LC Disbursements owing to, each Lender pursuant to the
terms hereof from time to time (the "Register"). The entries in the Register
shall be conclusive, and each Borrower, the Administrative Agent, the Issuing
Bank and the Lenders may treat each Person whose name is recorded in the
Register pursuant to the terms hereof as a Lender hereunder for all purposes of
this Agreement, notwithstanding notice to the contrary. The Register shall be
available for inspection by either Borrower, the Issuing Bank and any Lender, at
any reasonable time and from time to time upon reasonable prior notice.
(d) Upon its receipt of a duly completed Assignment and Acceptance
executed by an assigning Lender and an assignee, the assignee=s completed
Administrative Questionnaire (unless the assignee shall already be a Lender
hereunder), the processing and recordation fee referred to in Section 10.05(b)
and any written consent to such assignment required by Section 10.05(b), the
Administrative Agent shall accept such Assignment and Acceptance and record the
information contained therein in the Register. No assignment shall be effective
for purposes of this Agreement unless it has been recorded in the Register as
provided in this paragraph.
(e) Any Lender may, without the consent of either Borrower, the
Administrative Agent or the Issuing Bank, sell participations to one or more
banks or other entities (a "Participant") in all or a portion of such Lender=s
rights and obligations under this Agreement (including all or a portion of its
Commitment and the Loans owing to it); provided that (i) such Lender=s
obligations under this Agreement shall remain unchanged, (ii) such Lender shall
remain solely responsible to the other parties hereto for the performance of
such obligations and (iii) the Company, the Administrative Agent, the Issuing
Bank and the other Lenders shall continue to deal solely and directly with such
Lender in connection with such Lender=s rights and obligations under this
Agreement. Any agreement or instrument pursuant to which a Lender sells such a
participation shall provide that such Lender shall retain the sole right to
enforce this Agreement and to approve any amendment, modification or waiver of
any provision of this Agreement; provided that such agreement or instrument may
provide that such Lender will not, without the consent of the Participant, agree
to any amendment, modification or waiver described in the first proviso to
Section 10.02(b) that affects such Participant. Subject to Section 10.05(f),
each Borrower agrees that each Participant shall be entitled to the benefits of
Sections 2.15, 2.16 and 2.17 to the same extent as if it were a Lender and had
acquired its interest by assignment pursuant to Section 10.05(b), and be
indemnified under Section 10.03 as if it were a Lender. In addition, each
agreement creating any participation must include an agreement by the
Participant to be bound by the provisions of Section 10.12.
(f) A Participant shall not be entitled to receive any greater
payment under Section 2.15 or 2.17 than the applicable Lender would have been
entitled to receive with respect to the participation sold to such Participant,
unless the sale of the participation to such Participant is made with the
Company=s prior written consent. A Participant that would be a Foreign Lender if
it were a Lender shall not be entitled to the benefits of Section 2.17 unless
the Company is notified of the participation sold to such Participant and such
Participant agrees, for the benefit of the Company, to comply with Section
2.17(e) as though it were a Lender.
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(g) The Lenders may furnish any information concerning the Borrowers
in the possession of the Lenders from time to time to assignees and Participants
(including prospective assignees and participants); provided that, such Persons
agree to be bound by the provisions of Section 10.12 hereof.
(h) Notwithstanding anything in this Section 10.05 to the contrary,
any Lender may assign and pledge its Notes to any Federal Reserve Bank or the
United States Treasury as collateral security pursuant to Regulation A and any
operating circular issued by such Federal Reserve System and/or such Federal
Reserve Bank. No such assignment and/or pledge shall release the assigning
and/or pledging Lender from its obligations hereunder.
(i) Notwithstanding any other provisions of this Section 10.05, no
transfer or assignment of the interests or obligations of any Lender or any
grant of participations therein shall be permitted if such transfer, assignment
or grant would require either Borrower to file a registration statement with the
SEC or to qualify the Loans under the "Blue Sky" laws of any state.
SECTION 10.06 Survival; Reinstatement. (a) All covenants, agreements,
representations and warranties made by the Borrowers herein and in the
certificates or other instruments delivered in connection with or pursuant to
this Agreement shall be considered to have been relied upon by the other parties
hereto and shall survive the execution and delivery of this Agreement and the
making of any Loans and issuance of any Letters of Credit, regardless of any
investigation made by any such other party or on its behalf and notwithstanding
that the Administrative Agent, the Issuing Bank or any Lender may have had
notice or knowledge of any Default or Event of Default or incorrect
representation or warranty at the time any credit is extended hereunder, and
shall continue in full force and effect as long as the principal of or any
accrued interest on any Loan or any fee or any other amount payable under this
Agreement is outstanding and unpaid or any Letter of Credit is outstanding and
so long as the Commitments have not expired or terminated. The provisions of
Sections 2.15, 2.16, 2.17 and 10.03 and Article VIII shall survive and remain in
full force and effect regardless of the consummation of the transactions
contemplated hereby, the repayment of the Loans, the expiration or termination
of the Letters of Credit and the Commitments or the termination of this
Agreement or any provision hereof.
(b) To the extent that any payments on the Obligations are
subsequently invalidated, declared to be fraudulent or preferential, set aside
or required to be repaid to a trustee, debtor in possession, receiver or other
Person under any bankruptcy law, common law or equitable cause, then to such
extent, the Obligations so satisfied shall be revived and continue as if such
payment or proceeds had not been received.
SECTION 10.07 Counterparts; Integration; Effectiveness. This
Agreement may be executed in counterparts (and by different parties hereto on
different counterparts), each of which shall constitute an original, but all of
which when taken together shall constitute a single contract. This Agreement,
the other Loan Documents and the Fee Letter constitute the entire contract among
the parties hereto relating to the subject matter hereof and supersede any
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and all previous agreements and understandings, oral or written, relating to the
subject matter hereof (including the Information Memorandum). Except as provided
in Section 3.01, this Agreement shall become effective when it shall have been
executed by the Administrative Agent and when the Administrative Agent shall
have received counterparts hereof which, when taken together, bear the
signatures of each of the other parties hereto, and thereafter shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and assigns. Delivery of an executed counterpart of a signature page
of this Agreement by telecopy shall be effective as delivery of a manually
executed counterpart of this Agreement.
SECTION 10.08 Severability. Any provision of this Agreement held to
be invalid, illegal or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such invalidity, illegality or
unenforceability without affecting the validity, legality and enforceability of
the remaining provisions hereof; and the invalidity of a particular provision in
a particular jurisdiction shall not invalidate such provision in any other
jurisdiction.
SECTION 10.09 Right of Setoff. If an Event of Default shall have
occurred and be continuing, each Lender is hereby authorized at any time and
from time to time, to the fullest extent permitted by law, to set off and apply
any and all deposits (general or special, time or demand, provisional or final)
at any time held and other indebtedness at any time owing by such Lender to or
for the credit or the account of either Borrower against any of and all the
Obligations now or hereafter existing under this Agreement and the other Loan
Documents held by such Lender, irrespective of whether or not such Lender shall
have made any demand under this Agreement and although such Obligations may be
unmatured. The rights of each Lender under this Section 10.09 are in addition to
other rights and remedies (including other rights of setoff) which such Lender
may have.
SECTION 10.10 Governing Law; Jurisdiction; Consent to Service
of Process.
(a) This Agreement and the other Loan Documents shall be construed in
accordance with and governed by the laws of the State of New York.
(b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT AND
THE OTHER LOAN DOCUMENTS MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK
OR OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF NEW YORK AND, BY EXECUTION
AND DELIVERY OF THIS AGREEMENT, EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY
ACCEPTS FOR ITSELF AND IN RESPECT OF ITS PROPERTY AND ASSETS, UNCONDITIONALLY,
THE NON-EXCLUSIVE JURISDICTION OF THE AFORESAID COURTS WITH RESPECT TO ANY SUCH
ACTION OR PROCEEDING. EACH BORROWER HEREBY IRREVOCABLY DESIGNATES, APPOINTS AND
EMPOWERS CT CORPORATION SYSTEM, INC., WITH OFFICES ON THE DATE HEREOF AT 111 8TH
AVENUE, NEW YORK, NEW YORK 10011, AS ITS DESIGNEE, APPOINTEE AND AGENT TO
RECEIVE AND ACCEPT FOR AND ON ITS BEHALF, AND IN RESPECT OF ITS PROPERTY,
SERVICE OF ANY AND ALL LEGAL PROCESS, SUMMONS, NOTICES AND DOCUMENTS WHICH MAY
BE SERVED IN ANY SUCH ACTION OR PROCEEDING. IF FOR ANY REASON SUCH DESIGNEE,
APPOINTEE AND AGENT SHALL CEASE TO BE AVAILABLE TO ACT AS SUCH, EACH SUCH
BORROWER AGREES TO DESIGNATE A NEW DESIGNEE,
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APPOINTEE AND AGENT IN NEW YORK, NEW YORK ON THE TERMS AND FOR THE PURPOSES OF
THIS PROVISION SATISFACTORY TO THE ADMINISTRATIVE AGENT. EACH BORROWER FURTHER
IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OUT OF ANY OF THE AFOREMENTIONED
COURTS IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF COPIES THEREOF BY
REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO IT AT ITS ADDRESS PROVIDED IN
SECTION 10.01, SUCH SERVICE TO BECOME EFFECTIVE THIRTY DAYS AFTER SUCH MAILING.
NOTHING HEREIN SHALL AFFECT THE RIGHT OF THE ADMINISTRATIVE AGENT OR ANY LENDER
TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO COMMENCE LEGAL
PROCEEDINGS OR OTHERWISE PROCEED AGAINST EITHER BORROWER IN ANY OTHER
JURISDICTION.
(c) EACH OF THE BORROWERS HEREBY IRREVOCABLY WAIVES ANY OBJECTION
WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY OF THE
AFORESAID ACTIONS OR PROCEEDINGS ARISING OUT OF OR IN CONNECTION WITH THIS
AGREEMENT BROUGHT IN THE COURTS REFERRED TO IN CLAUSE (b) ABOVE AND HEREBY
FURTHER IRREVOCABLY WAIVES, TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW,
AND AGREES NOT TO PLEAD OR CLAIM IN ANY SUCH COURT THAT ANY SUCH ACTION OR
PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
(d) EACH PARTY HERETO HEREBY (I) IRREVOCABLY WAIVES, TO THE MAXIMUM
EXTENT PERMITTED BY LAW, ANY RIGHT IT MAY HAVE TO CLAIM OR RECOVER IN ANY SUCH
LITIGATION ANY SPECIAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES, OR DAMAGES
OTHER THAN, OR IN ADDITION TO, ACTUAL DAMAGES; (II) CERTIFIES THAT NO PARTY
HERETO NOR ANY REPRESENTATIVE OR AGENT OR COUNSEL FOR ANY PARTY HERETO HAS
REPRESENTED, EXPRESSLY OR OTHERWISE, OR IMPLIED THAT SUCH PARTY WOULD NOT, IN
THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVERS, AND (III)
ACKNOWLEDGES THAT IT HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE
TRANSACTIONS CONTEMPLATED HEREBY AND THEREBY BY, AMONG OTHER THINGS, THE MUTUAL
WAIVERS AND CERTIFICATIONS CONTAINED IN THIS SECTION 10.10.
SECTION 10.11 WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY
HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY
ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH
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PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY
OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD
NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B)
ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER
INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
CERTIFICATIONS IN THIS SECTION 10.11.
SECTION 10.12 Confidentiality. Each of the Administrative Agent, the
Issuing Bank and the Lenders agrees to maintain the confidentiality of the
Information (as defined below), except that Information may be disclosed (a) to
its Affiliates, directors, officers and employees and to its agents, including
accountants, legal counsel and other advisors who have been informed of the
confidential nature of the information provided, (b) to the extent requested by
any regulatory authority, including the National Association of Insurance
Commissioners or any similar organization, or any nationally recognized rating
agency that requires access to information about a Lender=s investment
portfolio, (c) to the extent a Lender reasonably believes it is required by
applicable laws or regulations or by any subpoena or similar legal process (and
such Lender will provide prompt notice thereof to the Company), (d) to any other
party to this Agreement, (e) in connection with the exercise of any remedies
hereunder or any suit, action or proceeding relating to this Agreement or any
other Loan Document or the enforcement of rights hereunder or thereunder, (f)
subject to an understanding with such Person that such Person will comply with
this Section 10.12, to any assignee of or Participant in, or any prospective
assignee of or Participant in, any of its rights or obligations under this
Agreement, (g) with the consent of the Company or (h) to the extent such
Information (i) becomes publicly available other than as a result of a breach of
this Section 10.12 or (ii) becomes available to the Administrative Agent, the
Issuing Bank or any Lender from a source other than a Borrower (unless such
source is actually known by the individual providing the information to be bound
by a confidentiality agreement or other legal or contractual obligation of
confidentiality with respect to such information). For the purposes of this
Section 10.12, "Information" means all information received from either Borrower
relating to either Borrower or its business, other than any such information
that is known to a Lender, publicly known or otherwise available to the
Administrative Agent, the Issuing Bank or any Lender other than through
disclosure (a) by a Borrower, or (b) from a source actually known to a Lender to
be bound by a confidentiality agreement or other legal or contractual obligation
of confidentiality with respect to such information. Any Person required to
maintain the confidentiality of Information as provided in this Section 10.12
shall be considered to have complied with its obligation to do so if such Person
maintains the confidentiality of such Information in accordance with procedures
adopted in good faith to protect confidential Information of third parties
delivered to a lender.
SECTION 10.13 Interest Rate Limitation. Notwithstanding anything
herein to the contrary, if at any time the interest rate applicable to any Loan,
together with all fees, charges and other amounts which are treated as interest
on such Loan under applicable law (collectively the "Charges"), shall exceed the
maximum lawful rate (the "Maximum Rate") which may be contracted for, charged,
taken, received or reserved by the Lender holding such Loan in accordance with
applicable law, the rate of interest payable in respect of such Loan hereunder,
together with all Charges payable in respect thereof, shall be limited to the
Maximum Rate and,
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to the extent lawful, the interest and Charges that would have been payable in
respect of such Loan but were not payable as a result of the operation of this
Section 10.13 shall be cumulated and the interest and Charges payable to such
Lender in respect of other Loans or periods shall be increased (but not above
the Maximum Rate therefor) until such cumulated amount, together with interest
thereon at the Federal Funds Effective Rate to the date of repayment, shall have
been received by such Lender.
SECTION 10.14 EXCULPATION PROVISIONS. EACH OF THE PARTIES HERETO
SPECIFICALLY AGREES THAT IT HAS A DUTY TO READ THIS AGREEMENT, THE NOTES AND (IN
THE CASE OF THE COMPANY, THE ADMINISTRATIVE AGENT AND THE SYNDICATION AGENT) THE
FEE LETTER AND AGREES THAT IT IS CHARGED WITH NOTICE AND KNOWLEDGE OF THE TERMS
OF THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS; THAT IT HAS IN FACT READ THIS
AGREEMENT AND IS FULLY INFORMED AND HAS FULL NOTICE AND KNOWLEDGE OF THE TERMS,
CONDITIONS AND EFFECTS OF THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS; THAT IT
HAS BEEN REPRESENTED BY INDEPENDENT LEGAL COUNSEL OF ITS CHOICE THROUGHOUT THE
NEGOTIATIONS PRECEDING ITS EXECUTION OF THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS; AND HAS RECEIVED THE ADVICE OF ITS ATTORNEY IN ENTERING INTO THIS
AGREEMENT AND THE OTHER LOAN DOCUMENTS; AND THAT IT RECOGNIZES THAT CERTAIN OF
THE TERMS OF THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS RESULT IN ONE PARTY
ASSUMING THE LIABILITY INHERENT IN SOME ASPECTS OF THE TRANSACTION AND RELIEVING
THE OTHER PARTY OF ITS RESPONSIBILITY FOR SUCH LIABILITY. EACH PARTY HERETO
AGREES AND COVENANTS THAT IT WILL NOT CONTEST THE VALIDITY OR ENFORCEABILITY OF
ANY EXCULPATORY PROVISION OF THIS AGREEMENT ON THE BASIS THAT THE PARTY HAD NO
NOTICE OR KNOWLEDGE OF SUCH PROVISION OR THAT THE PROVISION IS NOT
"CONSPICUOUS."
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87
<PAGE>
The parties hereto have caused this Agreement to be duly executed as
of the date and year first above written.
KINDER MORGAN ENERGY PARTNERS, L.P.,
as the Company
By: Kinder Morgan G.P., Inc.,
its General Partner
By: /s/ David G. Dehaemers, Jr.
______________________________________
Name: David G. Dehaemers, Jr.
Title: Vice President
Address for Notices:
1301 McKinney Street
Suite 3450
Houston, Texas 77010
Telecopier No.: (713) 844-9570
Telephone No.: (713) 844-9500
Attention: David G. Dehaemers, Jr.
Chief Executive Office and Principal Place
of Business:
1301 McKinney Street
Suite 3450
Houston, Texas 77010
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<PAGE>
KINDER MORGAN OPERATING L.P. "B",
as the Subsidiary Borrower and as a Subsidiary
Guarantor
By: Kinder Morgan G.P., Inc.,
its General Partner
By: /s/ David G. Dehaemers, Jr.
___________________________________
Name: David G. Dehaemers, Jr.
Title: Vice President
Address for Notices:
1301 McKinney Street
Suite 3450
Houston, Texas 77010
Telecopier No.: (713) 844-9570
Telephone No.: (713) 844-9500
Attention: David G. Dehaemers, Jr.
Chief Executive Office and Principal Place
of Business:
1301 McKinney Street
Suite 3450
Houston, Texas 77010
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<PAGE>
LENDER:
Commitment: $31,250,000 FIRST UNION NATIONAL BANK, as the
Administrative Agent, the Issuing Bank,
the Swingline Lender and as a Lender
By: /s/ Russell T. Clingman
____________________________________________
Russell T. Clingman
Vice President
Address for Notices:
First Union National Bank
301 South College Street, TW-10
Charlotte, North Carolina 28288-0608
Telecopier No.: (704) 383-0288
Telephone No.: (704) 383-0281
Attention: Syndication Agency Services
With copy to:
First Union Capital Markets Corp.
1001 Fannin, Suite 2255
Houston, Texas 77002
Telecopier No.: (713) 650-6354
Telephone No.: (713) 346-2703
Attention: Paul N. Riddle
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<PAGE>
LENDER:
Commitment: $31,250,000 BANK OF AMERICA, N.A.
By: /s/ Michael J. Dillon
_____________________________________________
Name: Michael J. Dillon
Title: Managing Director
Address for Notices:
Bank of America , N.A.
901 Main Street
Dallas, Texas 75202-3714
Telecopier No.: (214) 290-9462
Telephone No.: (214) 209-2119
Attention: Ramon Garcia
With copy to:
Bank of America, N.A.
333 Clay Street, Suite 4550
Houston, Texas 77002
Telecopier No.: (713) 651-4808
Telephone No.: (713) 651-4880
Attention: Pamela K. Rodgers
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<PAGE>
LENDER:
Commitment: $20,000,000 BANK OF MONTREAL
By: /s/ Cahal B. Carmody
________________________________________
Name: Cahal B. Carmody
Title: Director
Address for Notices:
Bank of Montreal
700 Louisiana Street
Suite 4400
Houston, Texas 77002
Telecopier No.: (713) 223-4007
Telephone No.: (713) 546-9750
Attention: Cahal B. Carmody
Five-Year Facility
<PAGE>
LENDER:
Commitment: $25,000,000 BANK ONE, NA
(Main Office - Chicago)
By: /s/ Joseph C. Giampetroni
_____________________________________________
Name: Joseph C. Giampetroni
Title: Vice President
Address for Notices:
Bank One, NA
1 Bank One Plaza
Suite IL1-0634
Chicago, Illinois 60670
Telecopier No.: (312) 732-4840
Telephone No.: (312) 732-3659
Attention: John Beirne
With copy to:
BancOne Capital Markets
910 Travis Street, 6th Floor
Houston, Texas 77002
Telecopier No.: (713) 751-3982
Telephone No.: (713) 751-6174
Attention: Jeanie Harman
Five-Year Facility
<PAGE>
LENDER:
Commitment: $20,000,000 BANKBOSTON, N.A.
By: /s/ Kristine Kasselman
_____________________________________________
Name: Kristine Kasselman
Title: Managing Director
Address for Notices:
BankBoston, N.A.
100 Federal Street
MA BOS 01-0804
Boston, Massachusetts 02110
Telecopier No.: (617) 434-3652
Telephone No.: (617) 434-5472
Attention: Terrence Ronan
With copy to:
BankBoston, N.A.
100 Federal Street
01-08-02
Boston, Massachusetts 02110
Telecopier No.: (617) 434-9820
Telephone No.: (617) 434-9723
Attention: Ruth Sawyer
Five-Year Facility
<PAGE>
LENDER:
Commitment: $25,000,000 BARCLAYS BANK PLC
By: /s/ Nicholas A. Bell
_____________________________________________
Name: Nicholas A. Bell
Title: Director - Loan Transaction Management
Address for Notices:
Barclays Bank PLC
222 Broadway, 8th Floor
New York, New York 10038
Telecopier No.: (212) 412-7585
Telephone No.: (212) 412-7584
Attention: J. Onischuk
With a copy to:
Barclays Bank PLC
222 Broadway, 11th Floor
New York, New York 10038
Telecopier No.: (212) 412-5308
Telephone No.: (212) 412-3710
Attention: Hema Divatia
Five-Year Facility
<PAGE>
LENDER:
Commitment: $17,500,000 THE CHASE MANHATTAN BANK
By: /s/ Peter M. Ling
_______________________________________
Name: Peter M. Ling
Title: Vice President
Address for Notices:
The Chase Manhattan Bank
270 Park Avenue, 21st Floor
New York, New York 10017-2070
Telecopier No.: (212) 270-3897
Telephone No.: (212) 270-4676
Attention: Peter Ling
With copy to:
The Chase Manhattan Bank
1 Chase Manhattan Plaza, 8th Floor
New York, New York 10081
Telecopier No.: (212) 552-5777
Telephone No.: (212) 552-7206
Attention: Tanya Mitchell-George
Five-Year Facility
<PAGE>
LENDER:
Commitment: $17,500,000 CITIBANK, N.A.
By: /s/ J. Christopher Lyons
_______________________________________
Name: J. Christopher Lyons
Title: Attorney-In-Fact
Address for Notices:
Citibank, N.A.
1200 Smith Street, Suite 2000
Houston, Texas 77002
Telecopier No.: (713) 654-2849
Telephone No.: (713) 654-2887
Attention: Steve Baillie
With copy to:
Citibank, N.A.
2 Penn=s Way, Suite 250
New Castle, Delaware 19720
Telecopier No.: (302) 894-6120
Telephone No.: (302) 894-6084
Attention: David Chiu
Five-Year Facility
<PAGE>
LENDER:
Commitment: $20,000,000 COMMERZBANK AKTIENGESELLSCHAFT,
NEW YORK BRANCH
By: /s/ Harry P. Yergey
_______________________________________
Name: Harry P. Yergey
Title: SVP and Manager
By: /s/ W. David Suettles
_______________________________________
Name: W. David Suettles
Title: Vice President
Address for Notices:
Commerzbank AG, Atlanta Agency
Prominade 2, Suite 3500
1230 Peachtree Street, NE
Atlanta, Georgia 30309
Telecopier No.: (404) 888-6539
Telephone No.: (404) 888-6524
Attention: David Suttles
With a copy to:
Commerzbank AG, New York Branch
2 World Financial Center, 33rd Floor
New York, New York 10281-1050
Telecopier No.: (212) 266-7204
Telephone No.: (212) 266-7562
Attention: Dianne Morgenegg
Five-Year Facility
<PAGE>
LENDER:
Commitment: $17,500,000 CREDIT LYONNAIS NEW YORK BRANCH
By: /s/ Phillipe Soustra
_________________________________________
Name: Phillipe Soustra
Title: Senior Vice President
Address for Notices:
Credit Lyonnais Houston Representative Office
1000 Louisiana, Suite 5360
Houston, Texas 77002
Telecopier No.: (713) 751-0307
Telephone No.: (713) 753-8734
Attention: Darrell Stanley
With a copy to:
Credit Lyonnais Houston Representative Office
1000 Louisiana, Suite 5360
Houston, Texas 77002
Telecopier No.: (713) 759-9766
Telephone No.: (713) 753-8723
Attention: Bernadette Archie
Five-Year Facility
<PAGE>
LENDER:
Commitment: $17,500,000 PARIBAS
By: /s/ Marian Livingston
_______________________________________
Name: Marian Livingston
Title: Vice President
By: /s/ Betsy Jocher
_______________________________________
Name: Betsy Jocher
Title: Vice President
Address for Notices:
Paribas
1200 Smith Street, Suite 3100
Houston, Texas 77002
Telecopier No.: (713) 659-6915
Telephone No.: (713) 659-4811
Attention: Marian Livingston
Five-Year Facility
<PAGE>
LENDER:
Commitment: $27,500,000 SOCIE'TE' GE'NE'RALE
By: /s/ Richard Gould
_______________________________________
Name: Richard Gould
Title: Director
Address for Notices:
Socie'te' Ge'ne'rale
2001 Ross Avenue, Suite 4800
Dallas, Texas 75201
Telecopier No.: (214) 979-0171
Telephone No.: (214) 979-2769
Attention: Lia Guerra
With copy to:
Societe Generale
1111 Bagby, Suite 2020
Houston, Texas 77002
Telecopier No.: (713) 650-0824
Telephone No.: (713) 759-6324
Attention: Richard Gould
Five-Year Facility
<PAGE>
LENDER:
Commitment: $12,500,000 SUNTRUST BANK, ATLANTA
By: /s/ Deborah S. Armstrong
_______________________________________
Name: Deborah S. Armstrong
Title: Vice President
Address for Notices:
SunTrust Bank, Atlanta
303 Peachtree Street, N.E.
Atlanta, Georgia 30308
Telecopier No.: (404) 827-6270
Telephone No.: (404) 658-4916
Attention: Steve Newby
With copy to:
SunTrust Bank, Atlanta
25 Park Place, 21st Floor M/C 1941
Atlanta, Georgia 30303
Telecopier No.: (404) 575-2730
Telephone No.: (404) 230-1939
Attention: Roshawn Orise
Five-Year Facility
<PAGE>
LENDER:
Commitment: $17,500,000 WELLS FARGO BANK (TEXAS),
NATIONAL ASSOCIATION
By: /s/ J. Alan Alexander
_________________________________________
Name: J. Alan Alexander
Title: Vice President
Address for Notices:
Wells Fargo Bank (Texas), National Association
Energy Department
1000 Louisiana, Third Floor
Houston, Texas 77002
Telecopier No.: (713) 739-1087
Telephone No.: (713) 319-1368
Attention: J. Alan Alexander
With copy to:
Wells Fargo Bank
201 Third Street, 8th Floor
San Francisco, California 94103
Telecopier No.: (415) 979-0675
Telephone No.: (415) 477-5425
Attention: Stephen Eiring
Five-Year Facility
<PAGE>
EXHIBIT 1.01A
FORM OF ADMINISTRATIVE QUESTIONNAIRE
Transaction: Kinder Morgan Energy Partners, L.P.
To: Nicole Ray, Syndications Agency Services
Fax No.: (704) 383-0288
--------------------------------------
1) Name of entity to
appear on Signature
Page:
--------------------------------------
--------------------------------------
2) Name of person to
receive Draft Credit
Agreement:
--------------------------------------
--------------------------------------------------
CREDIT OPERATIONS LEGAL
CONTACT CONTACT COUNSEL
--------------------------------------------------
Name:
--------------------------------------------------
Title:
--------------------------------------------------
Street Address:
(for courier):
--------------------------------------------------
Telephone No.:
--------------------------------------------------
Fax No.:
--------------------------------------------------
PAYMENT INSTRUCTIONS
Via Fed Wire:_____________________________________________________________
(Name of Bank) (ABA #)
_____
(Further Credit) (Attention) (Reference)
Ref.:___________________________________________________________
- --------------------------------------------------------------------------------
FIRST UNION PAYMENT INSTRUCTIONS
Pay to: First Union National Bank of North Carolina
ABA # 053 000 219
Charlotte, NC
Attention: Syndication Agency Services
R/C 5007 G/L #465906
Ref.: Kinder Morgan Energy Partners, L.P.
- --------------------------------------------------------------------------------
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<PAGE>
EXHIBIT 1.01B
FORM OF ASSIGNMENT AND ACCEPTANCE
Dated: ________________
Reference is made to the Credit Agreement dated as of September 29, 1999
(as restated, amended, modified, supplemented and in effect from time to time,
the "Credit Agreement"), among Kinder Morgan Energy Partners, L.P., a Delaware
limited partnership (the "Company"), Kinder Morgan Operating L.P. "B", a
Delaware limited partnership (the "Subsidiary Borrower"), the Lenders named
therein, First Union National Bank, as the Administrative Agent (the
"Administrative Agent"), Bank of America, N.A., as the Syndication Agent (the
"Syndication Agent") and Societe Generale, as Documentation Agent (the
"Documentation Agent"). Capitalized terms used herein and not otherwise defined
shall have the meanings assigned to such terms in the Credit Agreement.
This Assignment and Acceptance, between the Assignor (as defined and set
forth in Schedule I hereto and made a part hereof) and the Assignee (as defined
and set forth on Schedule I hereto and made a part hereof) is dated as of the
Effective Date of Assignment (as set forth on Schedule I hereto and made a part
hereof).
1. The Assignor hereby irrevocably sells and assigns to the Assignee
without recourse to the Assignor, and the Assignee hereby irrevocably purchases
and assumes from the Assignor without recourse to the Assignor, as of the
Effective Date of Assignment, an undivided interest (the "Assigned Interest") in
and to all the Assignor=s rights and obligations under the Credit Agreement
respecting those, and only those, credit facilities contained in the Credit
Agreement as set forth on Schedule I (collectively, the "Assigned Facilities",
individually, an "Assigned Facility"), in a principal amount for each Assigned
Facility as set forth on Schedule I.
2. The Assignor (i) makes no representation or warranty and assumes no
responsibility with respect to any statements, warranties or representations
made in or in connection with the Credit Agreement or any other Loan Document or
the execution, legality, validity, enforceability, genuineness, sufficiency or
value of the Credit Agreement, any other Loan Document or any other instrument
or document furnished pursuant thereto, other than that it is the legal and
beneficial owner of the Assigned Interest and that the Assigned Interest is free
and clear of any adverse claim; (ii) makes no representation or warranty and
assumes no responsibility with respect to the financial condition of the
Borrowers or their respective Subsidiaries or the performance or observance by
the Borrowers or their respective Subsidiaries of any of its respective
obligations under the Credit Agreement, any other Loan Document or any other
instrument or document furnished pursuant thereto; and (iii) attaches the Note
if any, held by it evidencing the Assigned Facility or Facilities, as the case
may be, and requests that the Administrative Agent exchange such Note(s) for a
new Note payable to the Assignor (if the Assignor has retained any interest in
the Assigned Facility or Facilities) and a new Note payable to the Assignee in
the amount which reflects the assignment being made hereby (and after giving
Five-Year Facility
<PAGE>
effect to any other assignments which have become effective on the Effective
Date of Assignment).
3. The Assignee (i) represents and warrants that it is legally authorized
to enter into this Assignment and Acceptance; (ii) confirms that it has received
a copy of the Credit Agreement, together with copies of the financial statements
referred to in Section 4.07 thereof, or if later, the most recent financial
statements delivered pursuant to Section 5.01 thereof, and such other documents
and information as it has deemed appropriate to make its own credit analysis;
(iii) agrees that it will independently and without reliance upon the
Administrative Agent, the Assignor or any other Lender and based on such other
documents and information as it shall deem appropriate at the time, continue to
make its own credit decisions in taking or not taking action under the Credit
Agreement; (iv) appoints and authorizes the Administrative Agent to take such
action as such agent on its behalf and to exercise such powers as are reasonably
incidental thereto; (v) agrees that it will be bound by the provisions of the
Credit Agreement and will perform in accordance with its terms all the
obligations which by the terms of the Credit Agreement are required to be
performed by it as a Lender; (vi) confirms that it is an Eligible Assignee;
(vii) if the Assignee is organized under the laws of a jurisdiction outside the
United States, attaches the forms prescribed by the Internal Revenue Services of
the United States certifying as to the Assignee=s exemption from United States
withholding taxes with respect to all payments to be made to the Assignee under
the Credit Agreement or such other documents as are necessary to indicate that
all such payments are subject to such tax at a rate by an applicable tax treaty,
and (viii) has supplied the information requested on the administrative
questionnaire provided by the Administrative Agent.
4. Following the execution of this Assignment and Acceptance, it will be
delivered to the Administrative Agent for acceptance by it and the Borrowers and
recording by the Administrative Agent pursuant to Section 10.05 of the Credit
Agreement, effective as of the Effective Date of Assignment (which Effective
Date of Assignment shall, unless otherwise agreed to by the Administrative
Agent, be at least five Business Days after the execution of this Assignment and
Acceptance).
5. Upon such acceptance and recording, from and after the Effective Date
of Assignment, the Administrative Agent shall make all payments in respect of
the Assigned Interest (including payments of principal, interest, fees and other
amounts) to the Assignee, whether such amounts have accrued prior to the
Effective Date of Assignment or accrue subsequent to the Effective Date of
Assignment. The Assignor and Assignee shall make all appropriate adjustments in
payments for periods prior to the Effective Date of Assignment by the
Administrative Agent or with respect to the making of this assignment directly
between themselves.
6. From and after the Effective Date of Assignment, (i) the Assignee shall
be party to the Credit Agreement and, to the extent provided in this Assignment
and Acceptance, have the rights and obligations of a Lender thereunder, and (ii)
the Assignor shall, to the extent provided in this Assignment and Acceptance,
relinquish its rights and be released from its obligations under the Credit
Agreement.
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<PAGE>
7. THIS ASSIGNMENT AND ACCEPTANCE SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
IN WITNESS WHEREOF, the parties hereto have caused this Assignment and
Acceptance to be executed by their respective duly authorized officers on
Schedule I hereto.
Five-Year Facility
<PAGE>
Schedule I to Assignment and Acceptance
Legal Name of Assignor: _______________________________________
Legal Name of Assignee: _______________________________________
Effective Date of Assignment: _______________________________________
Percentage Assigned of Each
Principal Facility (to at least 8
Assigned Facilities Amount of decimals) (Shown as a
------------------- Assigned percentage of aggregate
Interest held by all applicable
-------- Lenders)
---------------------------
Commitment $________ ________%
Revolving Loans $________ ________%
LC Exposure $________ ________%
Swingline Exposure $________ ________%
Competitive Loans $________ ________%
Total $________
Five-Year Facility
<PAGE>
EXHIBIT 1.01C-2
OTHER EXISTING LETTERS OF CREDIT
NONE
Five-Year Facility
<PAGE>
EXHIBIT 1.01-D
FORM OF COMPETITIVE NOTE
$300,000,000.00 _____________, _____
FOR VALUE RECEIVED, the undersigned, KINDER MORGAN ENERGY PARTNERS,
L.P., a Delaware limited partnership, (the "Company"), HEREBY PROMISES TO PAY to
the order of ________________________________ (the "Lender"), the lesser of (i)
$300,000,000 and (ii) the aggregate amount of Competitive Loans made by the
Lender and outstanding on the Maturity Date. The principal amount of the
Competitive Loans made by the Lender to the Company shall be due and payable on
the dates and in the amounts as are specified in that certain Credit Agreement
dated as of September 29, 1999 (as restated, amended, modified, supplemented and
in effect from time to time, the "Credit Agreement") among the Company, the
Subsidiary Borrower, the Lender, certain other lenders that are party thereto,
the Syndication Agent, the Documentation Agent and First Union National Bank, as
the Administrative Agent for the Lender and such other lenders. All capitalized
terms used herein and not otherwise defined shall have the meanings as defined
in the Credit Agreement.
The Company promises to pay interest on the unpaid principal amount of
each Competitive Loan outstanding from time to time from the date thereof until
such principal amount is paid in full, at such interest rates and payable on
such dates as are specified in the Credit Agreement. Both principal and interest
are payable in same day funds in lawful money of the United States of America to
the Administrative Agent at the Principal Office, or at such other place as the
Administrative Agent shall designate in writing to the Company.
This Note is one of the Competitive Notes referred to in, and this Note
and all provisions herein are entitled to the benefits of, the Credit Agreement.
The Credit Agreement, among other things (a) provides for the making of
Competitive Loans by the Lender and the other lenders to the Company from time
to time, and (b) contains provisions for acceleration of the maturity hereof
upon the happening of certain stated events, for prepayments on account of
principal hereof prior to the maturity hereof upon the terms and conditions
therein specified, and for limitations on the amount of interest paid such that
no provision of the Credit Agreement or this Note shall require the payment or
permit the collection of interest in excess of the Maximum Rate.
This Note may be held by the Lender for the account of its applicable
lending office and may be transferred from one lending office to another lending
office from time to time as the Lender may determine.
The Company and any and all endorsers, guarantors and sureties
severally waive grace, demand, presentment for payment, notice of dishonor,
default or intent to accelerate, protest and notice of protest and diligence in
collecting and bringing of suit against any party hereto, and agree to all
renewals, extensions or partial payments hereon and to any release or
Five-Year Facility
<PAGE>
substitution of security herefor, in whole or in part, with or without notice,
before or after maturity.
This Note shall be governed by and construed under the laws of the
State of New York and the applicable laws of the United States of America.
KINDER MORGAN ENERGY PARTNERS, L.P.,
as the Company
By: Kinder Morgan G.P., Inc.,
its General Partner
By: _________________________________________
Name:
Title
Five-Year Facility
<PAGE>
EXHIBIT 1.01-E
FORM OF REVOLVING NOTE
[$________________] _____________, _____
FOR VALUE RECEIVED, the undersigned, KINDER MORGAN ENERGY PARTNERS,
L.P., a Delaware limited partnership, (the "Company"), HEREBY PROMISES TO PAY to
the order of _______________________________________________________ (the
"Lender"), the lesser of (i) such Lender=s Commitment and (ii) the aggregate
amount of Revolving Loans made by the Lender and outstanding on the Maturity
Date. The principal amount of the Revolving Loans made by the Lender to the
Company shall be due and payable on the dates and in the amounts as are
specified in that certain Credit Agreement dated as of September 29, 1999 (as
restated, amended, modified, supplemented and in effect from time to time, the
"Credit Agreement") among the Company, the Subsidiary Borrower, the Lender,
certain other lenders that are party thereto, the Syndication Agent, the
Documentation Agent and First Union National Bank, as Administrative Agent for
the Lender and such other lenders. All capitalized terms used herein and not
otherwise defined shall have the meanings as defined in the Credit Agreement.
The Company promises to pay interest on the unpaid principal amount of
each Revolving Loan outstanding from time to time from the date thereof until
such principal amount is paid in full, at such interest rates and payable on
such dates as are specified in the Credit Agreement. Both principal and interest
are payable in same day funds in lawful money of the United States of America to
the Administrative Agent at its Principal Office, or at such other place as the
Administrative Agent shall designate in writing to the Company.
This Note is one of the Revolving Notes referred to in, and this Note
and all provisions herein are entitled to the benefits of, the Credit Agreement.
The Credit Agreement, among other things (a) provides for the making of
Revolving Loans by the Lender and the other lenders to the Company from time to
time, and (b) contains provisions for acceleration of the maturity hereof upon
the happening of certain stated events, for prepayments on account of principal
hereof prior to the maturity hereof upon the terms and conditions therein
specified, and for limitations on the amount of interest paid such that no
provision of the Credit Agreement or this Note shall require the payment or
permit the collection of interest in excess of the Maximum Rate.
This Note may be held by the Lender for the account of its applicable
lending office and may be transferred from one lending office to another lending
office from time to time as the Lender may determine.
The Company and any and all endorsers, guarantors and sureties
severally waive grace, demand, presentment for payment, notice of dishonor,
default or intent to accelerate, protest and notice of protest and diligence in
collecting and bringing of suit against any party hereto, and agree to all
renewals, extensions or partial payments hereon and to any release or
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<PAGE>
substitution of security herefor, in whole or in part, with or without notice,
before or after maturity.
This Note shall be governed by and construed under the laws of the
State of New York and the applicable laws of the United States of America.
KINDER MORGAN ENERGY PARTNERS, L.P.,
as the Company
By: Kinder Morgan G.P., Inc.,
its General Partner
By: _________________________________________
Name:
Title:
Five-Year Facility
<PAGE>
EXHIBIT 1.01-F
FORM OF SWINGLINE NOTE
$25,000,000 ______________, _____
FOR VALUE RECEIVED, the undersigned, KINDER MORGAN ENERGY PARTNERS,
L.P., a Delaware limited partnership (the "Company"), HEREBY PROMISES TO PAY to
the order of __________________________________________________ (the "Swingline
Lender"), the lesser of (i) $25,000,000 and (ii) the aggregate amount of
Swingline Loans made by the Swingline Lender and outstanding on the Maturity
Date. The principal amount of the Swingline Loans made by the Swingline Lender
to the Company shall be due and payable on the dates and in the amounts as are
specified in that certain Credit Agreement dated as of [September 28], 1999 (as
restated, amended, modified, supplemented and in effect from time to time, the
"Credit Agreement") among the Company, the Subsidiary Borrower, the Swingline
Lender, certain other lenders that are party thereto, the Syndication Agent, the
Documentation Agent and First Union National Bank, as Administrative Agent for
the Swingline Lender and such other lenders. All capitalized terms used herein
and not otherwise defined shall have the meanings as defined in the Credit
Agreement.
The Company promises to pay interest on the unpaid principal amount of
each Swingline Loan outstanding from time to time from the date thereof until
such principal amount is paid in full, at such interest rates and payable on
such dates as are specified in the Credit Agreement. Both principal and interest
are payable in same day funds in lawful money of the United States of America to
the Swingline Lender at 301 South College Street, TW-10, Charlotte, North
Carolina 28288-0608 or such other place as the Swingline Lender shall designate
in writing to the Company.
This Note is the Swingline Note referred to in, and this Note and all
provisions herein are entitled to the benefits of, the Credit Agreement. The
Credit Agreement, among other things (a) provides for the making of Swingline
Loans by the Swingline Lender to the Company from time to time, and (b) contains
provisions for acceleration of the maturity hereof upon the happening of certain
stated events, for prepayments on account of principal hereof prior to the
maturity hereof upon the terms and conditions therein specified, and for
limitations on the amount of interest paid such that no provision of the Credit
Agreement or this Note shall require the payment or permit the collection of
interest in excess of the Maximum Rate.
The Company and any and all endorsers, guarantors and sureties
severally waive grace, demand, presentment for payment, notice of dishonor,
default or intent to accelerate, protest and notice of protest and diligence in
collecting and bringing of suit against any party hereto, and agree to all
renewals, extensions or partial payments hereon and to any release or
substitution of security herefor, in whole or in part, with or without notice,
before or after maturity.
Five-Year Facility
<PAGE>
This Note shall be governed by and construed under the laws of the
State of New York and the applicable laws of the United States of America.
KINDER MORGAN ENERGY PARTNERS, L.P.,
as the Company
By: Kinder Morgan G.P., Inc.,
its General Partner
By: _________________________________________
Name:
Title:
Five-Year Facility
<PAGE>
EXHIBIT 2.03
FORM OF BORROWING REQUEST
Dated __________
First Union National Bank,
as Administrative Agent
One First Union Center, TW-10
301 South College Street
Charlotte, North Carolina 28288-0608
Attn: Syndication Agency Services
Ladies and Gentlemen:
This Borrowing Request is delivered to you by Kinder Morgan Energy
Partners, L.P. (the "Company"), a Delaware limited partnership, under Section
2.03 of the Credit Agreement dated as of September 29, 1999, (as restated,
amended, modified, supplemented and in effect, the "Credit Agreement") by and
among the Company, the Subsidiary Borrower, the Lenders party thereto, First
Union National Bank, as Administrative Agent, Bank of America, N.A., as
Syndication Agent, and Societe Generale, as Documentation Agent.
1. The Company hereby requests that the Lenders make a Loan or Loans in
the aggregate principal amount of $______________ (the "Revolving Loan" or the
"Revolving Loans").1/
2. The Company hereby requests that the Revolving Loan or Revolving Loans
be made on the following Business Day:__________________.2/
3. The Company hereby requests that the Revolving Loan or Revolving Loans
bear interest at the following interest rate, plus the Applicable Margin, as set
forth below:
Principal Maturity Date for
Type of Component of Interest Interest Period Interest Period(if
Revolving Loan Revolving Loan Rate (if applicable) applicable)
- -------------- -------------- ---- --------------- ----------
_________________________________
1 Complete with an amount in accordance with Section 2.03 of the Credit
Agreement.
2 Complete with a Business Day in accordance with Section 2.03 of the
Credit Agreement.
Five-Year Facility
<PAGE>
4. The Company hereby requests that the funds from the Revolving Loan or
Revolving Loans be disbursed to the following bank account:
____________________________________.
5. After giving effect to the requested Revolving Loan, the sum of the
Revolving Credit Exposures, plus the aggregate principal amount of Competitive
Loans outstanding as of the date hereof (including the requested Loans) does not
exceed the maximum amount permitted to be outstanding pursuant to the terms of
the Credit Agreement.
6. All of the conditions applicable to the Revolving Loans requested
herein as set forth in the Credit Agreement have been satisfied as of the date
hereof and will remain satisfied to the date of such Loans.
7. All capitalized undefined terms used herein have the meanings assigned
thereto in the Credit Agreement.
IN WITNESS WHEREOF, the undersigned have executed this Borrowing
Request this _____ day of _______________, ______.
KINDER MORGAN ENERGY PARTNERS, L.P.,
as the Company
By: Kinder Morgan G.P., Inc.,
its General Partner
By: _________________________________________
Name:
Title:
Five-Year Facility
<PAGE>
EXHIBIT 2.04-A
FORM OF COMPETITIVE BID REQUEST
First Union National Bank,
as Administrative Agent
One First Union Center, TW-10
301 South College Street
Charlotte, North Carolina 28288-0608
Attention: Syndication Agency Services
Ladies and Gentlemen:
Reference is made to the Credit Agreement dated as of September 29,
1999 (as restated, amended, modified, supplemented and in effect from time to
time, the "Credit Agreement"), among the undersigned, the Subsidiary Borrower,
the Lenders party thereto, the Syndication Agent, the Documentation Agent and
First Union National Bank, as Administrative Agent. Capitalized terms used
herein and not otherwise defined herein shall have the meanings assigned to such
terms in the Credit Agreement. The undersigned hereby gives you notice pursuant
to Section 2.04 of the Credit Agreement that it requests a Competitive Borrowing
under the Credit Agreement, and in that connection sets forth below the terms on
which such Competitive Borrowing is requested to be made:
(A) Borrowing Date of Competitive
Borrowing (which is a Business Day) ______________________
(B) Aggregate Principal Amount of
Competitive Borrowing 1/ ______________________
(C) Interest rate basis 2/ ______________________
_______________________________
1 Not less than $25,000,000 or greater than the unused Total
Commitment and in integral multiples of $1,000,000.
2 Eurodollar Competitive Borrowing or Fixed Rate Borrowing.
Five-Year Facility
<PAGE>
(D) Interest Period and the last
day thereof 3/ ______________________
(E) Location and number of Company's account
to which funds are to be deposited ______________________
By the delivery of this Competitive Bid Request and the acceptance of
any or all of the Competitive Loans offered by the Lenders in response to this
Competitive Bid Request, the undersigned shall be deemed to have represented and
warranted that the applicable conditions to lending specified in Article III of
the Credit Agreement have been satisfied with respect to the Competitive
Borrowing requested hereby.
Very truly yours,
KINDER MORGAN ENERGY PARTNERS, L.P.,
as the Company
By: Kinder Morgan G.P., Inc.,
its General Partner
By: _________________________________________
Name:
Title:
_____________________________
3 Which shall have a duration (i) in the case of a Eurodollar Loan, of one,
two, three or six months and (ii) in the case of Fixed Rate Loan, of not less
than seven days nor more than 180 days, and which, in either case, shall end not
later than the Maturity Date.
Five-Year Facility
<PAGE>
EXHIBIT 2.04-B
FORM OF NOTICE TO LENDERS OF COMPETITIVE BID REQUEST
[Name of Lender]
[Address of Lender]
[Date]
Attention:
Ladies and Gentlemen:
Reference is made to the Credit Agreement dated as of September 29,
1999 (as restated, amended, modified, supplemented and in effect from time to
time, the "Credit Agreement"), among Kinder Morgan Energy Partners, L.P. (the
"Company"), the Subsidiary Borrower, the Lenders party thereto, the Syndication
Agent, the Documentation Agent, and First Union National Bank, as Administrative
Agent. Capitalized terms used herein and not otherwise defined herein shall have
the meanings assigned to such terms in the Credit Agreement. The Company
delivered a Competitive Bid Request requesting a Competitive Bid on __________,
, pursuant to Section 2.04(a) of the Credit Agreement, and in that connection
you are invited to submit a Competitive Bid by [Date] / [Time] .1/ Your
Competitive Bid must comply with Section 2.04(b) of the Credit Agreement and the
terms set forth below on which the Competitive Bid Request was made:
(A) Date of Competitive Borrowing _____________________________
(B) Principal amount of
Competitive Borrowing _____________________________
(C) Interest rate basis _____________________________
(i.e., Eurodollar or Fixed Rate)
(D) Interest Period and the last
day thereof 2/ _____________________________
__________________________
1 The Competitive Bid must be received by teh Administrative Agent (i) in
the case of Eurodollar Loans, not later than 10:00 a.m. Charlotte, North
Carolina, time, three Business days before the Borrowing Date of a proposed
Competitive Borrowing, and (ii) in the case of Fixed Rate Loans, not later than
10:00 a.m., Charlotte, North Carolina, time on the Borrowing Date of a proposed
Competitive Borrowing.
2 Which may not be a date later than the Maturity Date.
Five-Year Facility
<PAGE>
Very truly yours,
FIRST UNION NATIONAL BANK,
as Administrative Agent
By: _________________________________________
Name: _________________________________________
Title: _________________________________________
Five-Year Facility
<PAGE>
EXHIBIT 2.04-C
FORM OF COMPETITIVE BID
First Union National Bank,
as Administrative Agent
One First Union Center, TW-10
301 South College Street
Charlotte, North Carolina 28228-0608 [Date]
Attention: Syndication Agency Services
Ladies and Gentlemen:
The undersigned, [Name of Lender], refers to the Credit Agreement dated as
of [September 28], 1999 (as restated, amended, modified, supplemented and in
effect from time to time, the "Credit Agreement"), among Kinder Morgan Energy
Partners, L.P. (the "Company"), the Subsidiary Borrower, the Lenders party
thereto, the Syndication Agent, the Documentation Agent and First Union National
Bank, as Administrative Agent. Capitalized terms used herein and not otherwise
defined herein shall have the meanings assigned to such terms in the Credit
Agreement. The undersigned hereby makes a Competitive Bid pursuant to Section
2.04(b) of the Credit Agreement, in response to the Competitive Bid Request made
by the Borrower on _________________, ______, and in that connection sets forth
below the terms on which such Competitive Bid is made:
(A) Principal Amount 1/ _________________________________
(B) Competitive Bid Rate 2/ _________________________________
(C) Interest Period and
the last day thereof 3/ _________________________________
The undersigned hereby confirms that it is prepared to extend credit
to the Company upon acceptance by the Company of this bid in accordance with
Section 2.04(d) of the Credit Agreement.
Very truly yours,
[NAME OF BANK]
By: _________________________________________
Name:
Title:
_______________________________
1 Not less than $5,000,000 or greater than the requested Competitive
Borrowing and in integral multiples of $1,000,00 above said $5,000,000. Multiple
bids will be accepted by the Administrative Agent.
2 i.e. LIBOR Rate + or - ____%, in the case of Eurodollar Loans, or ____%,
in the case of Fixed Rate Loan (in each case, expressed in the form of a decimal
to no more than four decimal places).
3 The Interest Period must be the Interest perio specified in the
Competitive Bid Request.
Five-Year Facility
<PAGE>
EXHIBIT 2.06
FORM OF LETTER OF CREDIT REQUEST
Dated __________
First Union National Bank,
as Administrative Agent and as Issuing Bank
One First Union Center, TW-10
301 South College Street
Charlotte, North Carolina 28288-0608
Attn: Syndication Agency Services
Ladies and Gentlemen:
This Letter of Credit Request is delivered to you by Kinder Morgan Energy
Partners L.P. (the "Company"), a Delaware limited partnership, under Section
2.06 of the Credit Agreement dated as of September 29, 1999, (as restated,
amended, modified, supplemented, and in effect from time to time, the "Credit
Agreement") by and among the Company, the Subsidiary Borrower, the Lenders party
thereto, First Union National Bank, as Administrative Agent, Bank of America,
N.A., as Syndication Agent, Societe Generale, as Documentation Agent.
The Company hereby requests the issuance of a Letter of Credit under the
Credit Agreement, and in that connection sets forth below the information
relating to such Letter of Credit (the "Proposed Letter of Credit") as required
by Section 2.06(c) of the Credit Agreement. The Proposed Letter of Credit must
be issued:
(a) on or before ____________________, _____ 1/
(b) for the benefit of ____________ whose address is ______________
(c) in the amount of $____________
(d) having an expiry date of ________________, _____ 2/
(e) attached hereto is any special language to be incorporated into
the Proposed Letter of Credit.
or
______________________________
1 Must be a date not earlier than five Business Days after notice is given
to the Issuing Bank.
2 Must comply with Section 2.06(d) of the Credit Agreement.
Five-Year Facility
<PAGE>
The Company hereby refers to Letter of Credit Number ____ (the "Expiring
Letter of Credit") which has an existing expiry date of _____________. The
Company hereby requests that [the expiry date of the Expiring Letter of Credit
be extended to ______________2/] [the Issuing Bank permit the expiry date of the
Expiring Letter of Credit be extended to _______________.2/]
1. After giving effect to the Proposed Letter of Credit, neither the LC
Exposure nor the sum of the Revolving Credit Exposures, plus the aggregate
principal amount of Competitive Loans exceeds the maximum amount permitted to be
outstanding pursuant to the terms of the Credit Agreement.
2. All of the conditions applicable to the Loans requested herein as set
forth in the Credit Agreement have been satisfied as of the date hereof and will
remain satisfied to the date of the Proposed Letter of Credit.
3. All capitalized undefined terms used herein have the meanings assigned
thereto in the Credit Agreement.
IN WITNESS WHEREOF, the undersigned have executed this Letter of
Credit Request this _____ day of _______________, _____.
KINDER MORGAN ENERGY PARTNERS, L.P.,
as the Company
By: Kinder Morgan G.P., Inc.,
its General Partner
By: ______________________________________
Name:
Title:
Five-Year Facility
<PAGE>
EXHIBIT 2.07
FORM OF NOTICE OF ACCOUNT DESIGNATION
Dated ___________
First Union National Bank,
as Administrative Agent
One First Union Center, TW-10
301 South College Street
Charlotte, North Carolina 28288-0608
Attn: Syndication Agency Services
Ladies and Gentlemen:
This Notice of Account Designation is delivered to you by Kinder Morgan
Energy Partners, L.P. (the "Company"), a Delaware limited partnership, under
Section 2.07 of the Credit Agreement dated as of September 29, 1999 (as
restated, amended, modified, supplemented and in effect from time to time, the
"Credit Agreement") by and among the Company, the Subsidiary Borrower, the
Lenders party thereto, First Union National Bank, as Administrative Agent, Bank
of America, N.A., as Syndication Agent, and Societe Generale, as Documentation
Agent.
The Administrative Agent is hereby authorized to disburse all Loan
proceeds into the following account(s):
[Insert name of bank/
ABA Routing Number/
and Account Number]
IN WITNESS WHEREOF, the undersigned has executed this Notice of Account
Designation this _____ day of ___________________, ____.
KINDER MORGAN ENERGY PARTNERS, L.P.,
as the Company
By: Kinder Morgan G.P., Inc.,
its General Partner
By: ______________________________________
Name:
Title:
Five-Year Facility
<PAGE>
EXHIBIT 2.08
FORM OF INTEREST ELECTION REQUEST
Dated _____________
First Union National Bank,
as Administrative Agent
One First Union Center, TW-10
301 South College Street
Charlotte, North Carolina 28288-0608
Attn: Syndication Agency Services
Ladies and Gentlemen:
This irrevocable Interest Election Request (the "Request") is delivered to
you under Section 2.08 of the Credit Agreement dated as of September 29, 1999
(as restated, amended, modified, supplemented and in effect from time to time,
the "Credit Agreement"), by and among Kinder Morgan Energy Partners, L.P., a
Delaware limited partnership (the "Company"), the Subsidiary Borrower, the
Lenders party thereto (the "Lenders"), First Union National Bank, as
Administrative Agent, Bank of America, N.A., as Syndication Agent, and Societe
Generale, as Documentation Agent.
1. This Interest Election Request is submitted for the purpose of:
(a) [Converting] [Continuing] a ____________ Revolving Loan [into]
[as] a ____________ Loan. 1/
(b) The aggregate outstanding principal balance of such Revolving
Loan is $______________.
(c) The last day of the current Interest Period for such Revolving
Loan is _____________ 2/
(d) The principal amount of such Revolving Loan to be [converted]
[continued] is $_____________. 3/
____________________________
1 Delete the bracketed language and insert "Alternate Base Rate" or "LIBOR
Rate", as applicable, in each blank.
2 Insert applicable date for any Eurodollar Loan being converted or
continued.
3 Complete with an amount in compliance with Section 2.08 of the Credit
Agreement.
Five-Year Facility
<PAGE>
(e) The requested effective date of the [conversion] [continuation]
of such Revolving Loan is _______________. 4/
(f) The requested Interest Period applicable to the [converted]
[continued] Revolving Loan is ____________________. 5/
2. No Default or Event of Default exists, and none will exist upon the
conversion or continuation of the Revolving Loan requested herein.
3. All capitalized undefined terms used herein have the meanings assigned
thereto in the Credit Agreement.
IN WITNESS WHEREOF, the undersigned has executed this Interest Election
Request this _____ day of ___________________, ____.
KINDER MORGAN ENERGY PARTNERS, L.P.,
as the Company
By: Kinder Morgan G.P., Inc.,
its General Partner
By: _____________________________________
Name:
Title:
________________________________
4 Complete with a Business Day in compliance with Section 2.08 of the
Credit Agreement.
5 Complete for each Eurodollar Loan in compliance with the definition of
the term "Interest Period" specified in Section 1.01.
Five-Year Facility
<PAGE>
EXHIBIT 2.11
FORM OF NOTICE OF PREPAYMENT
First Union National Bank,
as Administrative Agent
One First Union Center, TW-10
301 South College Street
Charlotte, North Carolina 28228-0608
Attention: Syndication Agency Services
Ladies and Gentlemen:
This irrevocable Notice of Prepayment is delivered to you by Kinder Morgan
Energy Partners, L.P. (the "Company"), a Delaware limited partnership, under
Section 2.11 of the Credit Agreement dated as of September 29, 1999 (as
restated, amended, modified, supplemented and in effect from time to time, the
"Credit Agreement"), by and among the Company, the Subsidiary Borrower, the
Lenders party thereto, the Syndication Agent, the Documentation Agent, and First
Union National Bank, as the Administrative Agent.
1. The Company hereby provides notice to the Administrative Agent that the
Company shall repay the following ABR Loans and/or Eurodollar Loans and or
Swingline Loans in the amount of $_____________. 1/
2. The Company shall repay the above-referenced Loans on the following
Business Day: ___________________. 2/
3. All capitalized undefined terms used herein have the meanings assigned
thereto in the Credit Agreement.
IN WITNESS WHEREOF, the undersigned have executed this Borrowing Request
this _____ day of _______________, _____.
KINDER MORGAN ENERGY PARTNERS, L.P.,
as the Company
By: Kinder Morgan G.P., Inc.,
its General Partner
By: ______________________________________
Name:
Title:
____________________________
1 Complete with an amount in accordance with Section 2.11(b) of the Credit
Agreement.
2 Complete with a Business Day in accordance with Section 2.11(b) of the
Credit Agreement.
Five-Year Facility
<PAGE>
EXHIBIT 5.01
FORM OF COMPLIANCE CERTIFICATE
The undersigned hereby certifies that he is the
____________________________ of the KINDER MORGAN G.P., INC., a Delaware
corporation, general partner of KINDER MORGAN ENERGY PARTNERS, L.P., a Delaware
limited partnership (the "Company"), and that as such he is authorized to
execute this certificate on behalf of the Company. With reference to the Credit
Agreement dated as of September 29, 1999 (as restated, amended, modified,
supplemented and in effect from time to time, the "Agreement") among the
Company, the Subsidiary Borrower, the Syndication Agent, the Documentation Agent
and First Union National Bank, as Administrative Agent, for the lenders (the
"Lenders"), which are or become a party thereto, and such Lenders, the
undersigned represents and warrants as follows (each capitalized term used
herein having the same meaning given to it in the Agreement unless otherwise
specified);
(a) The representations and warranties of the Borrowers contained in
Article IV of the Agreement and otherwise made in writing by or on behalf
of the Borrowers pursuant to the Agreement were true and correct when
made, and are repeated at and as of the time of delivery hereof and are
true and correct at and as of the time of delivery hereof, except to the
extent such representations and warranties are expressly limited to an
earlier date or the Required Lenders have expressly consented in writing
to the contrary.
(b) Each Borrower has performed and complied with all agreements and
conditions contained in the Agreement to which it is a party required to
be performed or complied with by it prior to or at the time of delivery
hereof.
(c) Since ________________, no change as occurred, either in any case
or in the aggregate, in the condition, financial or otherwise, of the
Company or any Subsidiary which would have a Material Adverse Effect.
(d) There currently does not exist, and, after giving effect to the
loan or loans with respect to which this certificate is being delivered,
there will not exist, any Default or Event of Default under the Agreement
or any event or circumstance which constitutes, or with notice or lapse of
time (or both) would constitute, an event of default under any loan or
credit agreement, indenture, deed of trust, security agreement or other
agreement or instrument evidencing or pertaining to any Indebtedness of
the Company or any Subsidiary, or under any material agreement or
instrument to which the Company or any Subsidiary is a party or by which
the Company or any Subsidiary is bound.
(e) Attached hereto are the detailed computations necessary to
determine whether the Company is in compliance with Sections 6.07(a) and
(b) of the Agreement as of the end of the [fiscal quarter][fiscal year]
ending ________________.
Five-Year Facility
<PAGE>
(f) Attached hereto with respect to each Intercompany Note are the
matters required by clause (iii) of the last sentence of Section 5.01 of
the Agreement.
EXECUTED AND DELIVERED this _____ day of ________________, ______.
KINDER MORGAN ENERGY PARTNERS, L.P.
By: KINDER MORGAN G.P., INC.,
its General Partner
By: _______________________________________
Name:
Title:
Five-Year Facility
Execution Copy
- --------------------------------------------------------------------------------
CREDIT AGREEMENT
dated as of
SEPTEMBER 29, 1999
AMONG
KINDER MORGAN ENERGY PARTNERS, L.P.,
as the Company,
THE LENDERS PARTY HERETO,
FIRST UNION NATIONAL BANK,
as the Administrative Agent,
BANK OF AMERICA, N.A.,
as Syndication Agent,
and
SOCIETE GENERALE,
as Documentation Agent
----------------------------
FIRST UNION CAPITAL MARKETS CORP.
and
BANC OF AMERICA SECURITIES LLC,
as Co-Arrangers and Co-Bookrunners
<PAGE>
TABLE OF CONTENTS
Page
ARTICLE I. DEFINITIONS..........................................1
SECTION 1.01 Defined Terms..................................1
SECTION 1.02 Classification of Loans and Borrowings........20
SECTION 1.03 Accounting Terms; Changes in GAAP.............20
SECTION 1.04 Interpretation................................20
ARTICLE II. THE CREDITS.........................................21
SECTION 2.01 Commitments...................................21
SECTION 2.02 Loans and Borrowings..........................21
SECTION 2.03 Requests for Revolving Borrowings.............22
SECTION 2.04 Competitive Bid Procedure.....................23
SECTION 2.06 Telephonic Notices............................25
SECTION 2.07 Funding of Borrowings.........................25
SECTION 2.08 Interest Elections............................26
SECTION 2.09 Termination and Reduction of Commitments......27
SECTION 2.10 Repayment of Loans; Evidence of Debt..........27
SECTION 2.11 Prepayment of Loans...........................28
SECTION 2.12 Fees..........................................29
SECTION 2.13 Interest......................................30
SECTION 2.14 Alternate Rate of Interest....................31
SECTION 2.15 Increased Costs...............................31
SECTION 2.16 Break Funding Payments........................32
SECTION 2.17 Taxes.........................................33
SECTION 2.18 Payments Generally; Pro Rata Treatment;
Sharing of Set-offs...........................34
SECTION 2.19 Mitigation Obligations; Replacement of
Lenders.......................................35
SECTION 2.20 Extensions of Termination Date; Removal of
Lenders.......................................35
ARTICLE III. CONDITIONS PRECEDENT................................37
SECTION 3.01 Conditions Precedent to the Initial Borrowing.37
SECTION 3.02 Conditions Precedent to All Borrowings........39
SECTION 3.03 Conditions Precedent to Conversions...........39
SECTION 3.04 Delivery of Documents.........................40
ARTICLE IV. REPRESENTATIONS AND WARRANTIES......................40
SECTION 4.01 Organization and Qualification................40
SECTION 4.02 Authorization, Validity, Etc..................40
SECTION 4.03 Governmental Consents, Etc....................41
SECTION 4.04 Conflicting or Adverse Agreements or
Restrictions..................................41
364-Day Facility
i
<PAGE>
SECTION 4.05 Properties....................................41
SECTION 4.06 Litigation and Environmental Matters..........41
SECTION 4.07 Financial Statements..........................42
SECTION 4.08 Disclosure....................................42
SECTION 4.09 Investment Company Act........................42
SECTION 4.10 Public Utility Holding Company Act............42
SECTION 4.11 ERISA.........................................43
SECTION 4.12 Tax Returns and Payments......................43
SECTION 4.13 Compliance with Laws and Agreements...........43
SECTION 4.14 Purpose of Loans..............................43
SECTION 4.15 Year 2000.....................................44
ARTICLE V. AFFIRMATIVE COVENANTS...............................44
SECTION 5.01 Financial Statements and Other Information....44
SECTION 5.02 Litigation....................................46
SECTION 5.03 Existence, Conduct of Business................46
SECTION 5.04 Payment of Obligations........................47
SECTION 5.05 Maintenance of Properties; Insurance..........47
SECTION 5.06 Books and Records; Inspection Rights..........47
SECTION 5.07 Compliance with Laws..........................47
SECTION 5.08 Use of Proceeds...............................47
SECTION 5.09 Further Assurances............................47
SECTION 5.10 Performance of Obligations....................48
SECTION 5.11 Lines of Business.............................48
SECTION 5.12 Intercompany Notes............................48
ARTICLE VI. NEGATIVE COVENANTS..................................48
SECTION 6.01 Indebtedness..................................48
SECTION 6.02 Liens.........................................49
SECTION 6.03 Fundamental Changes...........................50
SECTION 6.04 Restricted Payments...........................50
SECTION 6.05 Transactions with Affiliates..................50
SECTION 6.06 Restrictive Agreements........................51
SECTION 6.07 Financial Covenants...........................51
SECTION 6.08 Amendments to Certain Agreements..............51
ARTICLE VII. EVENTS OF DEFAULT...................................52
SECTION 7.01 Events of Default and Remedies................52
SECTION 7.02 Other Remedies................................54
SECTION 7.03 Application of Moneys During Continuation
of Event of Default...........................54
ARTICLE VIII. THE ADMINISTRATIVE AGENT...........................55
SECTION 8.01 Appointment, Powers and Immunities............55
SECTION 8.02 Reliance by Administrative Agent..............55
SECTION 8.03 Defaults; Events of Default...................56
SECTION 8.04 Rights as a Lender............................56
SECTION 8.05 Indemnification...............................56
364-Day Facility
ii
<PAGE>
SECTION 8.06 Non-Reliance on Agents and other Lenders......57
SECTION 8.07 Action by Administrative Agent................57
SECTION 8.08 Resignation or Removal of Administrative
Agent.........................................58
SECTION 8.09 Duties of Syndication Agent and
Documentation Agent...........................58
ARTICLE IX. MISCELLANEOUS.......................................58
SECTION 9.01 Notices, Etc..................................58
SECTION 9.02 Waivers; Amendments...........................59
SECTION 9.03 Payment of Expenses, Indemnities, etc.........60
SECTION 9.04 Successors and Assigns........................62
SECTION 9.05 Assignments and Participations................63
SECTION 9.06 Survival; Reinstatement.......................65
SECTION 9.07 Counterparts; Integration; Effectiveness......65
SECTION 9.08 Severability..................................65
SECTION 9.09 Right of Setoff...............................66
SECTION 9.10 Governing Law; Jurisdiction; Consent to
Service of Process............................66
SECTION 9.11 Waiver of Jury Trial..........................67
SECTION 9.12 Confidentiality...............................67
SECTION 9.13 Interest Rate Limitation......................68
SECTION 9.14 Exculpation Provisions........................68
364-Day Facility
iii
<PAGE>
SCHEDULES:
Schedule 4.01 Existing Subsidiaries
Schedule 4.06 Disclosed Matters
Schedule 6.02 Existing Liens
Schedule 6.06 Existing Restrictions
EXHIBITS:
Exhibit 1.01A Form of Administrative Questionnaire
Exhibit 1.01B Form of Assignment and Acceptance
Exhibit 1.01-C Form of Competitive Note
Exhibit 1.01-D Form of Revolving Note
Exhibit 2.03 Form of Borrowing Request
Exhibit 2.04-A Form of Competitive Bid Request
Exhibit 2.04-B Form of Notice to Lenders of Competitive Bid Request
Exhibit 2.04-C Form of Competitive Bid
Exhibit 2.07 Form of Notice of Account Designation
Exhibit 2.08 Form of Interest Election Request
Exhibit 2.11 Form of Notice of Prepayment
Exhibit 5.01 Form of Compliance Certificate
364-Day Facility
iv
<PAGE>
CREDIT AGREEMENT
THIS CREDIT AGREEMENT, dated as of September 29, 1999 (this
"Agreement") is among:
(a) Kinder Morgan Energy Partners, L.P., a Delaware limited
partnership (the "Company");
(b) the banks and other financial institutions listed on the
signature pages hereof under the caption "Lenders" (the "Lenders" and together
with each other Person that becomes a Lender pursuant to Section 9.05,
collectively, the "Lenders");
(c) First Union National Bank, a national banking association,
individually as a Lender and as administrative agent for the Lenders (in such
latter capacity together with any other Person that becomes Administrative Agent
pursuant to Section 8.08, the "Administrative Agent");
(d) Bank of America, N.A., as the Syndication Agent (the "Syndication
Agent"); and
(e) Societe Generale, as the Documentation Agent (the "Documentation
Agent").
PRELIMINARY STATEMENTS
The Company has requested that a credit facility be extended to it
pursuant to which: the Company may borrow from the Lenders (a) to repay in full
the principal and accrued interest on all loans and other amounts outstanding
under that certain Second Amended and Restated Credit Agreement dated as of
December 1, 1998 among the Company, OLP "B", the subsidiary guarantors parties
thereto, the lenders party thereto and First Union National Bank, as the
arranger, the syndication agent, the administrative agent, the issuing bank and
the swingline lender (as amended to date, the "Existing Credit Agreement"), (b)
to refinance indebtedness of SFPP, and (c) for general working capital and other
partnership purposes.
NOW, THEREFORE, the parties hereto agree as follows:
ARTICLE I.
DEFINITIONS
SECTION 1.01 Defined Terms. As used in this Agreement, the following
terms have the meanings specified below:
"ABR", when used in reference to any Loan or Borrowing, refers to whether
such Loan, or the Loans comprising such Borrowing, are bearing interest at a
rate determined by reference to the Alternate Base Rate.
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"Administrative Agent" has the meaning specified in the introduction to
this Agreement.
"Administrative Questionnaire" means an Administrative Questionnaire in the
form of Exhibit 1.01A.
"Affiliate" of any Person shall mean (i) any Person directly or indirectly
controlled by, controlling or under common control with such first Person, (ii)
any director or officer of such first Person or of any Person referred to in
clause (i) above and (iii) if any Person in clause (i) above is an individual,
any member of the immediate family (including parents, siblings, spouse and
children) of such individual and any trust whose principal beneficiary is such
individual or one or more members of such immediate family and any Person who is
controlled by any such member or trust. For purposes of this definition, any
Person that owns directly or indirectly 25% or more of the securities having
ordinary voting power for the election of directors or other governing body of a
corporation or 25% or more of the partnership or other ownership interests of
any other Person (other than as a limited partner of such other Person) will be
deemed to "control" (including, with its correlative meanings, "controlled by"
and "under common control with") such corporation or other Person.
"Agreement" has the meaning specified in the introduction to this
Agreement.
"Alternate Base Rate" means, for any day, a rate per annum equal to the
greater of (a) the Federal Funds Effective Rate in effect on such day plus 2 of
1% and (b) the Prime Rate in effect for such day. Any change in the Alternate
Base Rate due to a change in the Prime Rate or the Federal Funds Effective Rate
shall be effective from and including the effective date of such change in the
Prime Rate or the Federal Funds Effective Rate, respectively.
"Applicable Margin" means at any time and from time to time, a percentage
per annum equal to the applicable percentage set forth below for the
corresponding Performance Level set forth below:
Performance LIBOR Borrowings
Level Margin Percentage
I .415%
II .525%
III .625%
IV .825%
V 1.050%
The Applicable Margin shall be determined by reference to the Performance Level
in effect from time to time.
"Applicable Percentage" means, with respect to any Lender, the percentage
of the Total Commitment represented by such Lender's Commitment. If the Total
Commitment has terminated or expired, the Applicable Percentages shall be
determined based upon the Total Commitment most recently in effect, giving
effect to any assignments.
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"Assignment and Acceptance" means an assignment and acceptance entered into
by a Lender and an assignee (with the consent of any party whose consent is
required by Section 9.05), and accepted by the Administrative Agent, in the form
of Exhibit 1.01B or any other form approved by the Administrative Agent.
"Available Cash" means, with respect to any fiscal quarter of the Company
(a "Test Quarter"), an amount equal to the algebraic sum of (a) the aggregate of
all cash distributions actually made to and received by the Company from the
Subsidiaries in respect of their Capital Stock during such fiscal quarter minus
(b) the aggregate amount of all cash disbursements, including disbursements for
operating expenses, payments of principal of and interest on Indebtedness and
taxes (net of amounts received or to be received by the Company from the
Subsidiaries as reimbursement for such amounts), and capital expenditures (net
of any borrowings to fund such capital expenditures permitted pursuant to this
Agreement), actually paid by the Company during such Test Quarter, plus, in the
case of a decrease, or minus, in the case of an increase (c) the amount by
which, as at the end of such Test Quarter, cash reserves necessary in the
reasonable discretion of the Company's management for the proper conduct of the
business of the Company and the Subsidiaries subsequent to such Test Quarter,
decreased or increased from the amount of such reserves as at the end of the
immediately preceding fiscal quarter.
"Availability Period" means the period from and including the Effective
Date, to but excluding the earlier of the Termination Date and the date of
termination of the Commitments.
"Board" means the Board of Governors of the Federal Reserve System of the
United States of America.
"Board of Directors" means, with respect to any Person, the Board of
Directors of such Person or any committee of the Board of Directors of such
Person duly authorized to act on behalf of the Board of Directors of such
Person.
"Board Resolution" means, with respect to any Person, a copy of a
resolution certified by the Secretary or an Assistant Secretary of such Person
to have been duly adopted by the Board of Directors of such Person and to be in
full force and effect on the date of such certification, and delivered to the
Administrative Agent.
"Bonds" means the Port Facility Refunding Revenue Bonds (Enron
Transportation Services, L.P. Project) Series 1994 in the aggregate principal
amount of $23,700,000, as issued by the Jackson-Union Counties Regional Port
District.
"Borrowing" means (a) a Revolving Borrowing or (b) a Competitive Borrowing.
"Borrowing Date" means the Business Day upon which any Loan is to be made
available to the Company.
"Borrowing Request" has the meaning specified in Section 2.03.
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"Business Day" means any day that is not a Saturday, Sunday or other day on
which commercial banks in Houston, Texas, New York, New York, or Charlotte,
North Carolina, are authorized or required by law to remain closed; provided
that, when used in connection with a Eurodollar Loan, the term "Business Day"
shall also exclude any day on which banks are not open for dealings in dollar
deposits in the London interbank market.
"Capital Lease Obligations" of any Person means the obligations of such
Person to pay rent or other amounts under any lease of (or other arrangement
conveying the right to use) real or personal property, or a combination thereof,
which obligations are required to be classified and accounted for as capital
leases on a balance sheet of such Person under GAAP, and the amount of such
obligations shall be the capitalized amount thereof determined in accordance
with GAAP.
"Capital Stock" means, with respect to any Person, any and all shares,
interests, rights to purchase, warrants, options, participations or other
equivalents (however designated) of such Person's equity, including all common
stock and preferred stock, any limited or general partnership interest and any
limited liability company membership.
"Change in Control" means either (a) the acquisition through beneficial
ownership or otherwise after the date hereof by any person (as such term is used
in section 13(d) and section 14(d)(2) of the Exchange Act as in effect on the
date hereof) or related persons constituting a group (as such term is used in
Rule 13d-5 under the Exchange Act as in effect on the date hereof) of 30% of the
Voting Stock of the General Partner; or (b) individuals who, at the beginning of
any period of 12 consecutive months, constitute the General Partner's board of
directors cease for any reason (other than death or disability) to constitute a
majority of the General Partner's board of directors then in office; provided,
however, that the acquisition of Kinder Morgan, Inc., the sole shareholder of
the General Partner, by KN Energy, Inc. in a transaction in which the executive
management of the General Partner becomes the executive management of KN Energy,
Inc., shall not constitute a Change in Control.
"Change in Control Event" means the execution of any definitive agreement
which, when fully performed by the parties thereto, would result in a Change in
Control.
"Change in Law" means (a) the adoption of any law, rule or regulation
after the date of this Agreement, (b) any change in any law, rule or regulation
or in the interpretation or application thereof by any Governmental Authority
after the date of this Agreement or (c) compliance by any Lender (or, for
purposes of Section 2.15(b), by any lending office of such Lender or by such
Lender's holding company, if any) with any request, guideline or directive
(whether or not having the force of law) of any Governmental Authority made or
issued after the date of this Agreement.
"Charges" has the meaning specified in Section 9.13.
"Class", when used in reference to any Loan or Borrowing, refers to
whether such Loan, or the Loans comprising such Borrowing, are Revolving Loans
or Competitive Loans.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time.
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"Commitment" means, with respect to each Lender, the commitment of such
Lender to make Revolving Loans hereunder, expressed as an amount representing
the maximum aggregate amount of such Lender's Revolving Credit Exposure
hereunder, as such commitment may be (a) reduced from time to time pursuant to
Section 2.09 and (b) reduced or increased from time to time pursuant to
assignments by or to such Lender pursuant to Section 9.05. The initial amount of
each Lender's Commitment is set forth on its signature page hereto, or in the
Assignment and Acceptance pursuant to which such Lender shall have assumed its
Commitment, as applicable.
"Communications" has the meaning specified in Section 9.01.
"Companion Credit Agreement" means the Credit Agreement dated as of
September 29, 1999 among the Company, OLP "B", the lenders party thereto, First
Union National Bank, as Administrative Agent, Bank of America, N.A., as
Syndication Agent and Societe Generale, as Documentation Agent.
"Company" has the meaning specified in the introduction to this
Agreement.
"Company Debt Rating" means, with respect to the Company as of any date of
determination, the rating that has been most recently announced by either S&P or
Moody's, as the case may be, for any non-credit enhanced, unsecured long-term
senior debt issued or to be issued by the Company. For purposes of the
foregoing:
(a) if only one of S&P and Moody's shall have in effect a Company
Debt Rating, the Applicable Margin or the Facility Fee Rate, as the case may be,
shall be determined by reference to the available rating;
(b) if, at any time, neither S&P nor Moody's shall have in effect a
Company Debt Rating, the Applicable Margin or the Facility Fee Rate, as the case
may be, shall be set in accordance with Performance Level V under the definition
of "Applicable Margin"or "Facility Fee Rate," as the case may be;
(c) if the ratings established by S&P and Moody's shall fall within
different Performance Levels, the Applicable Margin or the Facility Fee Rate, as
the case may be, shall be based upon the higher rating; provided, however, that,
if the lower of such ratings is two or more Performance Levels below the higher
of such ratings, the Applicable Margin or the Facility Fee Rate, as the case may
be, shall be based upon the rating that is one Performance Level above the lower
rating;
(d) if any rating established by S&P or Moody's shall be changed,
such change shall be effective as of the date on which such change is announced
publicly by the rating agency making such change; and
(e) if S&P or Moody's shall change the basis on which ratings are
established by it, each reference to the Company Debt Rating announced by S&P or
Moody's shall refer to the then equivalent rating by S&P or Moody's, as the case
may be.
"Competitive Bid" means an offer by a Lender to make a Competitive Loan
substantially in the form of Exhibit 2.04-C.
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"Competitive Bid Rate" means, with respect to any Competitive Bid, the
Margin or the Fixed Rate, as applicable, offered by the Lender making such
Competitive Bid.
"Competitive Bid Request" means a request by the Company for Competitive
Bids in accordance with Section 2.04 substantially in the form of Exhibit
2.04-A.
"Competitive Borrowing" means a borrowing consisting of a Competitive Loan
or concurrent Competitive Loans of the same Type, as to which a single Interest
Period is in effect and made on the same date by the Lender or Lenders whose
Competitive Bid(s) as all or as a part of such borrowing, as the case may be,
has (or have) been accepted by the Company under the bidding procedure described
in Section 2.04.
"Competitive Loan" means a Loan made pursuant to Section 2.04.
"Competitive Note" means a promissory note of the Company payable to the
order of a Lender, in substantially the form of Exhibit 1.01-C, together with
all modifications, extensions, renewals and rearrangements thereof.
"Consenting Lenders" has the meaning specified in Section 2.20.
"Consolidated EBITDA" means, for any period, the EBITDA of the Company and
the Subsidiaries for such period determined on a consolidated basis in
accordance with GAAP.
"Consolidated Indebtedness" means, at the date of any determination
thereof, Indebtedness of the Company and the Subsidiaries determined on a
consolidated basis in accordance with GAAP; excluding, however, Guarantees by
the Company of Indebtedness of employees of the Company and the Subsidiaries in
an aggregate amount at any time outstanding for all such Indebtedness not
exceeding $7,500,000.
"Consolidated Interest Expense" means, for any period, the Interest
Expense of the Company and the Subsidiaries for such period determined on a
consolidated basis in accordance with GAAP.
"Consolidated Interest Income" means, for any period, the Interest Income
of the Company and the Subsidiaries for such period determined on a consolidated
basis in accordance with GAAP.
"Consolidated Net Income" means, for any period, the Net Income of the
Company and the Subsidiaries for such period determined on a consolidated basis
in accordance with GAAP.
"Default" means any event or condition which upon notice, lapse of time or
both would, unless cured or waived, become an Event of Default.
"Disclosed Matters" means the actions, suits and proceedings and the
environmental matters disclosed in Schedule 4.06.
"Distribution Date" has the meaning specified in Section 7.03.
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"Documentation Agent" has the meaning specified in the introduction to
this Agreement.
"dollars" or "$" refers to lawful money of the United States of America.
"EBITDA" means (without duplication), with respect to any period for any
Person, the Net Income of such Person for such period determined in accordance
with GAAP, increased (to the extent deducted in determining Net Income for such
period) by the sum of (a) all income taxes (including state franchise taxes
based upon income) of such Person paid or accrued according to GAAP for such
period; (b) Consolidated Interest Expense of such Person for such period; and
(c) depreciation and amortization of such Person for such period determined in
accordance with GAAP.
"Effective Date" means the date occurring on or before October 31, 1999 on
which the conditions specified in Section 3.01 are satisfied (or waived in
accordance with Section 9.02).
"Eligible Assignee" means (a) any Lender; (b) any Affiliate of any Lender;
(c) a commercial bank organized or licensed under the laws of the United States,
or a state thereof, and having total assets in excess of $1,000,000,000; (d) a
commercial bank organized under the laws of any other country which is a member
of the OECD, or a political subdivision of any such country, and having total
assets in excess of $1,000,000,000, provided that such bank is acting through a
branch or agency located in the country in which it is organized or another
country which is also a member of the OECD; and (e) a finance company, insurance
company or other financial institution or fund (whether a corporation,
partnership, trust or other entity) that is engaged in making, purchasing or
otherwise investing in commercial loans in the ordinary course of its business
and having a combined capital and surplus or total assets of at least
$100,000,000.
"Environmental Laws" means all laws, rules, regulations, codes,
ordinances, orders, decrees, judgments, injunctions, notices or binding
agreements issued, promulgated or entered into by any Governmental Authority,
relating in any way to the environment, preservation or reclamation of natural
resources, the management, release or threatened release of any Hazardous
Material or to health and safety matters.
"Environmental Liability" means any liability, contingent or otherwise
(including any liability for damages, costs of environmental remediation, fines,
penalties or indemnities), of the Company or any Subsidiary directly or
indirectly resulting from or based upon (a) violation of any Environmental Law,
(b) the generation, use, handling, transportation, storage, treatment or
disposal of any Hazardous Materials, (c) exposure to any Hazardous Materials,
(d) the release of any Hazardous Materials into the environment, or (e) any
contract, agreement or other consensual arrangement pursuant to which liability
is assumed or imposed with respect to any of the foregoing.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time.
"ERISA Affiliate" means any trade or business (whether or not
incorporated) that, together with the Company, is treated as a single employer
under Section 414(b) or (c) of the Code or, solely for purposes of Section 302
of ERISA and Section 412 of the Code, is treated as a single employer under
Section 414 of the Code.
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"ERISA Event" means (a) any "reportable event", as defined in Section 4043
of ERISA or the regulations issued thereunder with respect to a Plan (other than
an event for which the 30-day notice period is waived); (b) the existence with
respect to any Plan of an "accumulated funding deficiency" (as defined in
Section 412 of the Code or Section 302 of ERISA), whether or not waived; (c) the
filing pursuant to Section 412(d) of the Code or Section 303(d) of ERISA of an
application for a waiver of the minimum funding standard with respect to any
Plan; (d) the incurrence by the Company or any of its ERISA Affiliates of any
liability under Title IV of ERISA with respect to the termination of any Plan;
(e) the receipt by the Company or any ERISA Affiliate from the PBGC or a plan
administrator of any notice relating to an intention to terminate any Plan or
Plans or to appoint a trustee to administer any Plan; (f) the incurrence by the
Company or any ERISA Affiliate of any liability with respect to the withdrawal
or partial withdrawal from any Plan or Multiemployer Plan; or (g) the receipt by
the Company or any ERISA Affiliate of any notice, or the receipt by any
Multiemployer Plan from the Company or any ERISA Affiliate of any notice,
concerning the imposition of Withdrawal Liability or a determination that a
Multiemployer Plan is, or is expected to be, insolvent or in reorganization,
within the meaning of Title IV of ERISA.
"Eurodollar", when used in reference to any Loan or Borrowing, refers to
whether such Loan, or the Loans comprising such Borrowing, bear interest at a
rate determined by reference to the LIBOR Rate.
"Event of Default" has the meaning specified in Section 7.01.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Excluded Taxes" means, with respect to the Administrative Agent, any
Lender or any other recipient of any payment to be made by or on account of any
Obligation, (a) income or franchise taxes imposed on (or measured by) its net
income by the United States of America, or by the jurisdiction under the laws of
which such recipient is organized or in which its principal office is located
or, in the case of any Lender, in which its applicable lending office is
located, (b) any branch profits taxes imposed by the United States of America or
any similar tax imposed by any other jurisdiction in which the Company is
located and (c) in the case of a Foreign Lender (other than an assignee pursuant
to a request by the Company under Section 2.19(b)), any withholding tax that is
imposed on amounts payable to such Foreign Lender at the time such Foreign
Lender becomes a party to this Agreement or is attributable to such Foreign
Lender's failure or inability to comply with Section 2.17(e), except to the
extent that such Foreign Lender's assignor (if any) was entitled, at the time of
assignment, to receive additional amounts from the Company with respect to such
withholding tax pursuant to Section 2.17(a).
"Execution Date" means the earliest date upon which all of the following
shall have occurred: counterparts of this Agreement shall have been executed by
the Company and each Lender listed on the signature pages hereof and the
Administrative Agent shall have received counterparts hereof which taken
together, bear the signature of the Company and each Lender and the
Administrative Agent.
"Existing Credit Agreement" has the meaning specified in the Preliminary
Statements.
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"Existing Termination Date" has the meaning specified in Section 2.20.
"Extended Termination Date" means, as at any date, the date to which the
Termination Date has then most recently been extended pursuant to Section 2.20.
"Facility Fee Rate" means at any time and from time to time, a
percentage per annum equal to the applicable percentage set forth below for the
corresponding Performance Level set forth below:
Performance
Level Facility Fee Rate
I .085%
II .100%
III .125%
IV .175%
V .200%
The Facility Fee Rate shall be determined by reference to the Performance Level
in effect from time to time.
"Federal Funds Effective Rate" means, for any day, the weighted average
(rounded upwards, if necessary, to the next 1/100 of 1%) of the rates on
overnight Federal funds transactions with members of the Federal Reserve System
arranged by Federal funds brokers, as published on the next succeeding Business
Day by the Federal Reserve Bank of New York, or, if such rate is not so
published for any day that is a Business Day, the average (rounded upwards, if
necessary, to the next 1/100 of 1%) of the quotations for such day for such
transactions received by the Administrative Agent from three Federal funds
brokers of recognized standing selected by it.
"Fee Letter" has the meaning specified in Section 2.12.
"Fixed Rate" means, with respect to any Competitive Loan (or Competitive
Borrowing) (other than a Eurodollar Competitive Loan or Competitive Borrowing),
the fixed rate of interest per annum specified by the Lender(s) making such
Competitive Loan (or the Competitive Loans comprising such Competitive
Borrowing) in its (or their) related Competitive Bid(s).
"Fixed Rate Loan" means a Competitive Loan bearing interest at a Fixed
Rate.
"Foreign Lender" means any Lender that is organized under the laws of a
jurisdiction other than that in which the Company is located. For purposes of
this definition, the United States of America, each state thereof and the
District of Columbia shall be deemed to constitute a single jurisdiction.
"GAAP" means generally accepted accounting principles in the United States
of America from time to time, including as set forth in the opinions, statements
and pronouncements of the Accounting Principles Board of the American Institute
of Certified Public Accountants and the Financing
Accounting Standards Board.
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"General Partner" means Kinder Morgan G.P., Inc., a Delaware corporation.
"Governmental Authority" means the government of the United States of
America, any other nation or any political subdivision thereof, whether state or
local, and any agency, authority, instrumentality, regulatory body, court,
central bank or other entity exercising executive, legislative, judicial,
taxing, regulatory or administrative powers or functions of or pertaining to
government.
"Guarantee" of or by any Person (the "guarantor") means any obligation,
contingent or otherwise, of the guarantor guaranteeing or having the economic
effect of guaranteeing any Indebtedness or other obligation of any other Person
(the "primary obligor") in any manner, whether directly or indirectly, and
including any obligation of the guarantor, direct or indirect, (a) to purchase
or pay (or advance or supply funds for the purchase or payment of) such
Indebtedness or other obligation or to purchase (or to advance or supply funds
for the purchase of) any security for the payment thereof, (b) to purchase or
lease property, securities or services for the purpose of assuring the owner of
such Indebtedness or other obligation of the payment thereof, (c) to maintain
working capital, equity capital or any other financial statement condition or
liquidity of the primary obligor so as to enable the primary obligor to pay such
Indebtedness or other obligation or (d) as an account party in respect of any
letter of credit or letter of guaranty issued to support such Indebtedness or
obligation; provided, that the term Guarantee shall not include endorsements for
collection or deposit in the ordinary course of business.
"Hazardous Materials" means all explosive or radioactive substances or
wastes and all hazardous or toxic substances, wastes or other pollutants,
including petroleum or petroleum distillates, asbestos or asbestos containing
materials, polychlorinated biphenyls, radon gas, infectious or medical wastes
and all other substances or wastes of any nature regulated pursuant to any
Environmental Law.
"Hedging Agreement" means any interest rate protection agreement, foreign
currency exchange agreement, commodity price protection agreement or other
interest or currency exchange rate or commodity price hedging arrangement.
"Indebtedness" of any Person means, without duplication, (a) all
obligations of such Person for borrowed money or with respect to deposits or
advances of any kind, (b) all obligations of such Person evidenced by bonds,
debentures, notes or similar instruments, (c) all obligations of such Person
under conditional sale or other title retention agreements relating to property
acquired by such Person, (d) all obligations of such Person in respect of the
deferred purchase price of property or services or any other similar obligation
upon which interest charges are customarily paid (excluding trade accounts
payable incurred in the ordinary course of business), (e) all Indebtedness of
others secured by (or for which the holder of such Indebtedness has an existing
right, contingent or otherwise, to be secured by) any Lien on property owned or
acquired by such Person, whether or not the Indebtedness secured thereby has
been assumed, (f) all Guarantees by such Person of Indebtedness of others
(provided that in the event that any Indebtedness of the Company or any
Subsidiary shall be the subject of a Guarantee by one or more Subsidiaries or by
the Company, as the case may be, the aggregate amount of the outstanding
Indebtedness of the Company and the Subsidiaries in respect thereof shall be
determined by reference to the primary Indebtedness so guaranteed, and without
duplication by reason of the existence of any such Guarantee), (g) all Capital
Lease Obligations of such Person, (h) all obligations, contingent or otherwise,
of such Person as an
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account party in respect of letters of credit and letters of guaranty and (i)
all obligations, contingent or otherwise, of such Person in respect of bankers'
acceptances. The Indebtedness of any Person shall include the Indebtedness of
any other Person (including any partnership in which such Person is a general
partner) to the extent such Person is liable therefor as a result of such
Person's ownership interest in or other relationship with such entity, except to
the extent the terms of such Indebtedness provide that such Person is not liable
therefor.
"Indemnified Taxes" means Taxes other than Excluded Taxes.
"Information Memorandum" means the Confidential Information Memorandum
dated September 1999 (Kinder Morgan Energy Partners, L.P. $600,000,000 Senior
Credit Facilities).
"Intercompany Notes" has the meaning specified in Section 5.12.
"Interest Election Request" has the meaning specified in Section 2.08.
"Interest Expense" means (without duplication), with respect to any period
for any Person (a) the aggregate amount of interest, whether expensed or
capitalized, paid, accrued or scheduled to be paid during such period in respect
of the Indebtedness of such Person including (i) the interest portion of any
deferred payment obligation; (ii) the portion of any rental obligation in
respect of Capital Lease Obligations allocable to interest expenses; and (iii)
any non-cash interest payments or accruals, all determined in accordance with
GAAP, less (b) Interest Income of such Person for such period.
"Interest Income" means, with respect to any period for any Person,
interest actually received by such Person during such period.
"Interest Payment Date" means (a) with respect to any ABR Loan, the last
Business Day of each January, April, July and October, (b) with respect to any
Eurodollar Loan, the last Business Day of the Interest Period applicable to the
Borrowing of which such Loan is a part and, in the case of a Eurodollar
Borrowing with an Interest Period of more than three months' duration, each day
prior to the last day of such Interest Period that occurs at intervals of three
months' duration after the first day of such Interest Period and (c) with
respect to any Fixed Rate Loan, the last day of the Interest Period applicable
to the Borrowing of which such Loan is a part and, in the case of a Fixed Rate
Borrowing with an Interest Period of more than 90 days' duration (unless
otherwise specified in the applicable Competitive Bid Request), each day prior
to the last day of such Interest Period that occurs at intervals of 90 days'
duration after the first day of such Interest Period, and any other dates that
are specified in the applicable Competitive Bid Request as Interest Payment
Dates with respect to such Borrowing.
"Interest Period" means (a) with respect to any Eurodollar Borrowing, the
period commencing on the date of such Borrowing and ending on the numerically
corresponding day in the calendar month that is one, two, three or six months
thereafter, as the Company may elect and (b) with respect to any Fixed Rate
Borrowing, the period (which shall not be less than 7 days or more than 180
days) commencing on the date of such Borrowing and ending on the date specified
in the applicable Competitive Bid Request; provided, that (i) if any Interest
Period would end on a day other than a Business Day, such Interest Period shall
be extended to the next succeeding Business
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Day unless such next succeeding Business Day would fall in the next calendar
month, in which case such Interest Period shall end on the next preceding
Business Day, (ii) any Interest Period that commences on the last Business Day
of a calendar month (or on a day for which there is no numerically corresponding
day in the last calendar month of such Interest Period) shall end on the last
Business Day of the last calendar month of such Interest Period and (iii) no
Interest Period for any Competitive Borrowing shall end after the Termination
Date and no Interest Period for any Revolving Borrowing shall end after the
Maturity Date. For purposes hereof, the date of a Borrowing initially shall be
the date on which such Borrowing is made and, in the case of a Revolving
Borrowing, thereafter shall be the effective date of the most recent conversion
or continuation of such Borrowing.
"Lender" has the meaning specified in the introduction to this Agreement.
"Lenders" has the meaning specified in the introduction to this
Agreement.
"LIBOR" shall mean the rate of interest determined on the basis of the
rate for deposits in dollars in an amount substantially equal to the amount of
the applicable Loan for a period equal to the applicable Interest Period
commencing on the first day of such Interest Period appearing on Telerate Page
3750 as of 11:00 a.m. (London time) two Business Days prior to the first day of
the applicable Interest Period. In the event that such rate does not appear on
Telerate Page 3750, "LIBOR" shall be determined by the Administrative Agent to
be the rate per annum at which deposits in dollars are offered by leading
reference banks in the London interbank market to First Union at approximately
11:00 a.m. (London time) two Business Days prior to the first day of the
applicable Interest Period for a period equal to such Interest Period and in an
amount substantially equal to the amount of the applicable Loan.
"LIBOR Rate" shall mean, with respect to any LIBOR Loan for any Interest
Period for such Loan, a rate per annum (rounded upwards, if necessary, to the
nearest 1/100 of 1%) determined by the Administrative Agent to be equal to the
quotient of (i) LIBOR for such Loan for such Interest Period divided by (ii) 1
minus the Reserve Requirement for such Loan for such Interest Period.
"Lien" means, with respect to any asset, (a) any mortgage, deed of trust,
lien, pledge, hypothecation, encumbrance, charge or security interest in, on or
of such asset and (b) the interest of a vendor or a lessor under any conditional
sale agreement, capital lease or title retention agreement (or any financing
lease having substantially the same economic effect as any of the foregoing)
relating to such asset.
"Loan Documents" mean, collectively, this Agreement, the Notes, if any,
the Intercompany Notes, the Fee Letter and all other instruments and documents
from time to time executed and delivered by the Company in connection herewith
and therewith.
"Loans" means advances made by the Lenders to the Company pursuant to
this Agreement.
"Margin" means, with respect to any Competitive Loan bearing interest at a
rate based on the LIBOR Rate, the marginal rate of interest, if any, to be added
to or subtracted from the LIBOR Rate to determine the rate of interest
applicable to such Loan, as specified by the Lender making such Loan in its
related Competitive Bid.
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"Material Adverse Effect" means, relative to any occurrence of whatever
nature (including any adverse determination in any litigation, arbitration or
governmental investigation or proceeding) and after taking into account actual
insurance coverage and effective indemnification with respect to such
occurrence, (a) a material adverse effect on the financial condition, business
or operations of the Company and the Subsidiaries taken as a whole, (b) the
impairment of (i) the ability of the Company to collectively perform the payment
or other material obligations hereunder or under the other Loan Documents or
(ii) the ability of the Administrative Agent or the Lenders to realize the
material benefits intended to be provided by the Company under the Loan
Documents or (c) the subjection of any of the Administrative Agent or any Lender
to any civil or criminal liability.
"Maturity Date" means the earlier of (a) the first anniversary of the
Existing Termination Date and (b) the acceleration of the Obligations pursuant
to Section 7.01.
"Maximum Rate" has the meaning specified in Section 9.13.
"Moody's" means Moody's Investors Service, Inc.
"Multiemployer Plan" means a multiemployer plan as defined in Section
4001(a)(3) of ERISA.
"Net Income" means for any Person for any period, the net income or (net
loss) of such Person for such period (taken as a cumulative whole), as
determined in accordance with GAAP, provided that there shall be excluded,
without duplication, from such net income (to the extent otherwise included
therein):
(a) net extraordinary gains and losses (other than, in the case of
losses, losses resulting from charges against net income to establish or
increase reserves for potential environmental liabilities and reserves for
exposure of such Person under rate cases);
(b) net gains or losses in respect of dispositions of assets other
than in the ordinary course of business;
(c) any gains or losses attributable to write-ups or write-downs of
assets; and
(d) proceeds of any key man insurance, or any insurance on property,
plant or equipment.
"Nominee" has the meaning specified in Section 2.20.
"Non-Consenting Lenders" has the meaning specified in Section 2.20.
"Note"means a Revolving Note or a Competitive Note.
"Notice of Account Designation" has the meaning specified in Section
2.07.
"Notice of Default" has the meaning specified in Section 7.01.
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"Notice of Extension" has the meaning specified in Section 2.20.
"Notice of Prepayment" has the meaning specified in Section 2.11.
"Notice of Revocation" has the meaning specified in Section 2.20.
"Obligations" means collectively:
(a) the payment of all indebtedness and liabilities by, and
performance of all other obligations of, the Company in respect of the Loans;
(b) the payment of all other indebtedness and liabilities by and
performance of all other obligations of, the Company to the Administrative Agent
and the Lenders under, with respect to, and arising in connection with, the Loan
Documents, and the payment of all indebtedness and liabilities of the Company to
the Administrative Agent and the Lenders for fees, costs, indemnification and
expenses (including reasonable attorneys' fees and expenses) under the Loan
Documents;
(c) the reimbursement of all sums advanced and costs and expenses
incurred by the Administrative Agent under any Loan Document (whether directly
or indirectly) in connection with the Obligations or any part thereof or any
renewal, extension or change of or substitution for the Obligations or, any part
thereof, whether such advances, costs and expenses were made or incurred at the
request of the Company or the Administrative Agent; and
(d) all renewals, extensions, amendments and changes of, or
substitutions or replacements for, all or any part of the items described under
clauses (a) through (c) above.
"OECD" means the Organization for Economic Cooperation and Development
(or any successor).
"OLP 'A'" means Kinder Morgan Operating L.P. "A", a Delaware limited
partnership.
"OLP 'B'" means Kinder Morgan Operating L.P. "B", a Delaware limited
partnership.
"OLP 'C'" means Kinder Morgan Operating L.P. "C", a Delaware limited
partnership.
"OLP 'D'" means Kinder Morgan Operating L.P. "D", a Delaware limited
partnership.
"Original Termination Date" means September 27, 2000.
"Other Taxes" means any and all present or future stamp or documentary
taxes or any other excise or property taxes, charges or similar levies arising
from any payment made hereunder or from the execution, delivery or enforcement
of, or otherwise with respect to, this Agreement.
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"Participant" has the meaning specified in Section 9.05(e).
"PBGC" means the Pension Benefit Guaranty Corporation referred to and
defined in ERISA and any successor entity performing similar functions.
"Performance Level" means a reference to one of Performance Level I,
Performance Level II, Performance Level III, Performance Level IV or Performance
Level V.
"Performance Level I" means, at any date of determination, the Company
shall have a Company Debt Rating in effect on such date of at least A- by S&P
and at least A3 by Moody's.
"Performance Level II" means, at any date of determination, (a) the
Performance Level does not meet the requirements of Performance Level I and (b)
the Company shall have a Company Debt Rating in effect on such date of at least
BBB+ by S&P and at least Baa1 by Moody's.
"Performance Level III" means, at any date of determination, (a) the
Performance Level does not meet the requirements of Performance Level I or
Performance Level II and (b) the Company shall have a Company Debt Rating in
effect on such date of at least BBB by S&P and at least Baa2 by Moody's.
"Performance Level IV" means, at any date of determination, (a) the
Performance Level does not meet the requirements of Performance Level I,
Performance Level II or Performance Level III and (b) the Company shall have a
Company Debt Rating in effect on such date of at least BBB- by S&P and at least
Baa3 by Moody's.
"Performance Level V" means, at any date of determination, the Performance
Level does not meet the requirements of Performance Level I, Performance Level
II, Performance Level III or Performance Level IV.
"Permitted Encumbrances" means:
(a) Liens imposed by law for taxes that are not yet due or are being
contested in compliance with Section 5.04;
(b) carriers', warehousemen's, mechanics', materialmen's, repairmen's
and other like Liens imposed by law, arising in the ordinary course of business
and securing obligations that are not overdue by more than 30 days or are being
contested in compliance with Section 5.04;
(c) pledges and deposits made in the ordinary course of business in
compliance with workers' compensation, unemployment insurance and other social
security laws or regulations;
(d) deposits to secure the performance of bids, trade contracts,
leases, statutory obligations, surety and appeal bonds, performance bonds and
other obligations of a like nature, in each case in the ordinary course of
business;
(e) easements, zoning restrictions, rights-of-way and similar
encumbrances on real property imposed by law or arising in the ordinary course
of business that do not secure any
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monetary obligations and do not materially detract from the value of the
affected property or interfere with the ordinary conduct of business of the
Company or any Subsidiary;
(f) judgment and attachment Liens not giving rise to an Event of
Default or Liens created by or existing from any litigation or legal proceeding
that are currently being contested in good faith by appropriate proceedings,
promptly instituted and diligently conducted, and for which adequate reserves
have been made to the extent required by GAAP;
(g) any interest or title of a lessor in property subject to any
Capital Lease Obligation or operating lease which, in each case, is permitted
under this Agreement; and
(h) Liens in favor of collecting or payor banks having a right of
setoff, revocation, refund or chargeback with respect to money or instruments of
the Company or any Subsidiary on deposit with or in possession of such bank;
provided that the term "Permitted Encumbrances" shall not include any Lien
securing Indebtedness.
"Person" means any natural person, corporation, limited liability company,
trust, joint venture, association, company, partnership, Governmental Authority
or other entity.
"Plan" means any employee pension benefit plan (other than a Multiemployer
Plan) subject to the provisions of Title IV of ERISA or Section 412 of the Code
or Section 302 of ERISA, and in respect of which the Company or any ERISA
Affiliate is (or, if such plan were terminated, would under Section 4069 of
ERISA be deemed to be) an "employer" as defined in Section 3(5) of ERISA.
"Plantation Pipe Line" means Plantation Pipe Line Company, a Delaware
and Virginia corporation.
"Prime Rate" shall mean the rate of interest from time to time announced
publicly by the Administrative Agent at the Principal Office as its prime
commercial lending rate. Such rate is set by the Administrative Agent as a
general reference rate of interest, taking into account such factors as the
Administrative Agent may deem appropriate, it being understood that many of the
Administrative Agent's commercial or other loans are priced in relation to such
rate, that it is not necessarily the lowest or best rate actually charged to any
customer and that the Administrative Agent may make various commercial or other
loans at rates of interest having no relationship to such rate.
"Principal Office" shall mean the principal office of the Administrative
Agent, presently located at 301 South College Street, TW-10, Charlotte, North
Carolina 28288-0608 or such other location as designated by the Administrative
Agent from time to time.
"Register" has the meaning specified in Section 9.05.
"Regulation A" means Regulation A of the Board, as the same is from time
to time in effect, and all official rulings and interpretations thereunder or
thereof.
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"Regulation D" means Regulation D of the Board, as the same is from time
to time in effect, and all official rulings and interpretations thereunder or
thereof.
"Regulation T" means Regulation T of the Board, as the same is from time
to time in effect, and all official rulings and interpretations thereunder or
thereof.
"Regulation U" means Regulation U of the Board, as the same is from time
to time in effect, and all official rulings and interpretations thereunder or
thereof.
"Regulation X" means Regulation X of the Board, as the same is from time
to time in effect, and all official rulings and interpretations thereunder or
thereof.
"Related Parties" means, with respect to any specified Person, such
Person's Affiliates and the respective directors, officers, employees, agents
and advisors of such Person and such Person's Affiliates.
"Required Lenders" means, at any time, Lenders having Revolving Credit
Exposures and unused Commitments representing 66b% of the sum of the total
Revolving Credit Exposures and unused Commitments at such time.
"Requirement of Law" shall mean any law, statute, code, ordinance, order,
determination, rule, regulation, judgment, decree, injunction, franchise,
permit, certificate, license, authorization or other directive or requirement
(whether or not having the force of law), including Environmental Laws, energy
regulations and occupational, safety and health standards or controls, of any
Governmental Authority.
"Reserve Requirement" means, for any day as applied to a Eurodollar Loan,
the aggregate (without duplication) of the rates (expressed as a decimal
fraction) of reserve requirements in effect on such day (including basic,
supplemental, marginal and emergency reserves under any regulations of the Board
or other Governmental Authority having jurisdiction with respect thereto)
dealing with reserve requirements prescribed for eurocurrency funding (currently
referred to as "Eurocurrency Liabilities" in Regulation D) maintained by a
member bank of the Federal Reserve System. Eurodollar Loans shall be deemed to
constitute Eurocurrency Liabilities and to be subject to such reserve
requirements without benefit of or credit for proration, exceptions or offsets
which may be available from time to time to any Lender under Regulation D.
"Responsible Officer" of the Company means the Chairman, Vice Chairman,
President, any Vice President, Chief Financial Officer, Controller or Chief
Accounting Officer of the General Partner.
"Restricted Payment" means any distribution (whether in cash, securities
or other property) with respect to any partnership interest in the Company, or
any payment (whether in cash, securities or other property), including any
deposit, on account of the purchase, redemption, retirement, acquisition,
cancellation or termination of any such partnership interest or any option or
other right to acquire any such partnership interest; provided, however, (A)
that distributions with respect to the partnership interests in the Company that
do not exceed, with respect to any fiscal quarter of the Company, the amount of
Available Cash for such quarter shall not constitute Restricted Payments
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so long as in each case, both before and after the making of such distribution,
no Event of Default or Default shall have occurred and be continuing, (B) that
any partnership interest split, partnership interest reverse split, dividend of
Company partnership interests or similar transaction will not constitute a
Restricted Payment, (C) that the application by the Company of an aggregate
amount not in excess of $50,000,000.00 after the Effective Date to the purchase,
redemption, retirement, cancellation, or termination of partnership interests in
the Company will not constitute a Restricted Payment, so long as, both before
and after any such purchase, redemption, retirement, cancellation, or
termination, no Event of Default or Default shall have occurred and be
continuing, and (D) acquisitions by officers, directors and employees of the
Company of partnership interests in the Company through cash less exercise of
options pursuant to the Company's Common Unit Option Plan shall not constitute
Restricted Payments.
"Revolving Borrowing" means a borrowing comprised of Revolving Loans of
the same Type, made, converted or continued on the same date and, in the case of
Eurodollar Loans, as to which a single Interest Period is in effect.
"Revolving Credit Exposure" means, with respect to any Lender at any time,
the sum of the outstanding principal amount of such Lender's Revolving Loans at
such time.
"Revolving Loan" means a Loan made pursuant to Section 2.03.
"Revolving Note" means a promissory note of the Company payable to the
order of each Lender, in substantially the form of Exhibit 1.01-D, together with
all modifications, extensions, renewals and rearrangements thereof.
"S&P" means Standard & Poor's Ratings Services, a division of The
McGraw-Hill Companies, Inc.
"SFPP" means SFPP, L.P., a Delaware limited partnership.
"SFPP First Mortgage Notes" means those certain First Mortgage Notes
issued by SFPP (under its prior name Southern Pacific Pipe Lines Partnership,
L.P.) pursuant to a Note Agreement dated December 8, 1988 between SFPP and the
purchasers named therein, which on the Execution Date are outstanding in the
aggregate principal amount of $244,000,000.
"SFPP Revolving Credit Facility" means that certain Amended and Restated
Credit Agreement dated as of August 11, 1997 among SFPP, the lenders party
thereto, Bank of America National Trust and Savings Association, as agent, Chase
Bank of Texas, National Association (formerly Texas Commerce Bank National
Association), as syndication agent, Bank of Montreal, as documentation agent and
BancAmerica Securities, Inc., as arranger, providing for revolving loans to be
made to SFPP in an aggregate principal amount not exceeding $175,000,000 at any
time outstanding.
"Subsidiary" means, with respect to any Person (the "parent") at any date,
any corporation, limited liability company, partnership, association or other
entity the accounts of which would be consolidated with those of the parent in
the parent's consolidated financial statements if such financial statements were
prepared in accordance with GAAP as of such date, as well as any other
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corporation, limited liability company, partnership, association or other entity
(a) of which securities or other ownership interests representing more than 50%
of the equity or more than 50% of the ordinary voting power or, in the case of a
partnership, more than 50% of the general partnership interests are, as of such
date, owned, controlled or held, or (b) that is, as of such date, otherwise
controlled, by the parent or one or more subsidiaries of the parent or by the
parent and one or more subsidiaries of the parent. Unless the context otherwise
clearly requires, references in this Agreement to a "Subsidiary" or the
"Subsidiaries" refer to a Subsidiary or the Subsidiaries of the Company.
Notwithstanding the foregoing Plantation Pipe Line shall not be a Subsidiary of
the Company until such time as its assets and liabilities, profit or loss and
cash flow are required under GAAP to be consolidated with those of the Company.
"Syndication Agent" has the meaning specified in the introduction to
this Agreement.
"Taxes" means any and all present or future taxes, levies, imposts,
duties, deductions, charges or withholdings imposed by any Governmental
Authority.
"Termination Date" means, except as expressly provided in Section 2.20(d)
and Section 2.20(e), at any time, the Original Termination Date or an Extended
Termination Date, as the case may be or, in either case, the earlier date of
termination in whole of the Total Commitment pursuant to Section 2.09 or Section
7.01.
"Total Commitment" means the sum of the Commitments of the Lenders,
which on the Execution Date is $300,000,000.
"Transactions" means the execution, delivery and performance by the
Company of this Agreement and the other Loan Documents, the borrowing of Loans
and the use of the proceeds thereof.
"Type", when used in reference to any Loan or Borrowing, refers to whether
the rate of interest on such Loan, or on the Loans comprising such Borrowing, is
determined by reference to the LIBOR Rate or the Alternate Base Rate.
"United States" and "U.S."each means United States of America.
"Utilization Fee" has the meaning specified in Section 2.12.
"Voting Stock" means, with respect to any Person, securities of any class
or classes of Capital Stock in such Person entitling holders thereof (whether at
all times or only so long as no senior class of stock has voting power by reason
of any contingency) to vote in the election of members of the Board of Directors
or other governing body of such Person or its managing member or its general
partner (or its managing general partner if there is more than one general
partner).
"Wholly-owned Subsidiary" means a Subsidiary of which all issued and
outstanding Capital Stock (excluding (a) in the case of a corporation,
directors' qualifying shares, (b) in the case of a limited partnership, a 2%
general partner interest and (c) in the case of a limited liability company, a
2% member interest) is directly or indirectly owned by the Company.
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"Withdrawal Liability" means liability to a Multiemployer Plan as a result
of a complete or partial withdrawal from such Multiemployer Plan, as such terms
are defined in Part I of Subtitle E of Title IV of ERISA.
SECTION 1.02 Classification of Loans and Borrowings. For purposes of
this Agreement, Loans may be classified and referred to by Class (e.g., a
"Revolving Loan" or a "Competitive Loan")or by Type (e.g., a "Eurodollar Loan")
or by Class and Type (e.g., a "Eurodollar Revolving Loan" or a "Fixed Rate
Loan"). Borrowings also may be classified and referred to by Class (e.g., a
"Revolving Borrowing" or a "Competitive Borrowing") or by Type (e.g., a
"Eurodollar Borrowing" or a "Fixed Rate Borrowing") or by Class and Type
(e.g., a "Eurodollar Revolving Borrowing" or a "Fixed Rate Competitive
Borrowing").
SECTION 1.03 Accounting Terms; Changes in GAAP. All accounting and
financial terms used herein and not otherwise defined herein and the compliance
with each covenant contained herein which relates to financial matters shall
be determined in accordance with GAAP applied by the Company on a consistent
basis, except to the extent that a deviation therefrom is expressly stated.
Should there be a change in GAAP from that in effect on the Execution Date,
such that the defined terms set forth in Section 1.01 or the covenants set forth
in Article VI would then be calculated in a different manner or with different
components or would render the same not meaningful criteria for evaluating the
matters contemplated to be evidenced by such covenants, (a) the Company and the
Required Lenders agree, within the 60-day period following any such change,
to negotiate in good faith and enter into an amendment to this Agreement in
order to conform the defined terms set forth in Section 1.01 or the covenants
set forth in Article VI, or both, in such respects as shall reasonably be deemed
necessary by the Required Lenders so that the criteria for evaluating the
matters contemplated to be evidenced by such covenants are substantially the
same criteria as were effective prior to any such change in GAAP, and (b) the
Company shall be deemed to be in compliance with such covenants during the 60-
day period following any such change, or until the earlier date of execution of
such amendment, if and to the extent that the Company would have been in
compliance therewith under GAAP as in effect immediately prior to such change.
SECTION 1.04 Interpretation. (a) In this Agreement, unless a clear
contrary intention appears:
(i) the singular number includes the plural number and vice versa;
(ii) reference to any gender includes each other gender;
(iii)the words "herein," "hereof" and "hereunder" and other words of
similar import refer to this Agreement as a whole and not to any
particular Article, Section or other subdivision;
(iv) reference to any Person includes such Person's successors and
assigns but, if applicable, only if such successors and assigns are
permitted by this Agreement, and reference to a Person in a particular
capacity excludes such Person in any other capacity or individually;
provided that nothing in this clause (iv) is intended to authorize any
assignment not otherwise permitted by this Agreement;
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(v) except as expressly provided to the contrary herein, reference to
any agreement, document or instrument (including this Agreement) means such
agreement, document or instrument as amended, supplemented or modified and
in effect from time to time in accordance with the terms thereof and, if
applicable, the terms hereof, and reference to any Note or other note
includes any note issued pursuant hereto in extension or renewal thereof
and in substitution or replacement therefor;
(vi) unless the context indicates otherwise, reference to any Article,
Section, Schedule or Exhibit means such Article or Section hereof or such
Schedule or Exhibit hereto;
(vii)the word "including" (and with correlative meaning "include")
means including, without limiting the generality of any description
preceding such term;
(viii) with respect to the determination of any period of time, except
as expressly provided to the contrary, the word "from" means "from and
including" and the word "to" means "to but excluding";
(ix) reference to any law, rule or regulation means such as amended,
modified, codified or reenacted, in whole or in part, and in effect from
time to time; and
(x) the words "asset" and "property" shall be construed to have the
same meaning and effect and refer to any and all tangible and intangible
assets and properties.
ARTICLE II.
THE CREDITS
SECTION 2.01 Commitments. Subject to the terms and conditions set
forth herein, each Lender agrees to make Revolving Loans to the Company from
time to time during the Availability Period in an aggregate principal amount
that will not result in (a) such Lender's Revolving Credit Exposure exceeding
such Lender's Commitment or (b) the sum of the total Revolving Credit Exposures,
plus the aggregate principal amount of outstanding Competitive Loans, exceeding
the Total Commitment. In furtherance of the foregoing, the aggregate amount of
the Total Commitment shall be deemed used from time to time to the extent of the
aggregate amount of the Competitive Loans then outstanding, and such deemed use
of the Total Commitment shall be applied to the Lenders ratably according to
their respective Commitments. Within the foregoing limits and subject to the
terms and conditions set forth herein, the Company may borrow, prepay and
reborrow Revolving Loans.
SECTION 2.02 Loans and Borrowings. (a) Each Revolving Loan shall be
made as part of a Borrowing consisting of Revolving Loans made by the Lenders
ratably in accordance with their respective Commitments. The failure of any
Lender to make any Loan required to be made by it shall not relieve any other
Lender of its obligations hereunder; provided that the Commitments and
Competitive Bids of the Lenders are several and no Lender shall be responsible
for any other Lender's failure to make Loans as required.
(b) Subject to Section 2.14, (i) each Revolving Borrowing shall be
comprised entirely of ABR Loans or Eurodollar Loans as the Company may request
in accordance herewith,
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and (ii) each Competitive Borrowing shall be comprised entirely of Eurodollar
Loans or Fixed Rate Loans as the Company may request in accordance herewith.
Each Lender at its option may make any Eurodollar Loan by causing any domestic
or foreign branch or Affiliate of such Lender to make such Loan; provided that
any exercise of such option shall not affect the obligation of the Company to
repay such Loan in accordance with the terms of this Agreement.
(c) At the commencement of each Interest Period for any Eurodollar
Revolving Borrowing, such Borrowing shall be in an aggregate amount that is an
integral multiple of $1,000,000 and not less than $3,000,000. At the time that
each ABR Revolving Borrowing is made, such Borrowing shall be in an aggregate
amount that is an integral multiple of $1,000,000 and not less than $1,000,000;
provided that an ABR Revolving Borrowing may be in an aggregate amount that is
equal to the entire unused balance of the Total Commitment. Each Competitive Bid
Request shall be in an aggregate amount that is an integral multiple of
$1,000,000 and not less than $25,000,000. Borrowings of more than one Type and
Class may be outstanding at the same time; provided that there shall not at any
time be more than a total of six Eurodollar Revolving Borrowings outstanding.
(d) Notwithstanding any other provision of this Agreement, the
Company shall not be entitled to request, or to elect to convert or continue,
any Borrowing if the Interest Period requested with respect thereto would end
after the Maturity Date.
SECTION 2.03 Requests for Revolving Borrowings. To request a
Revolving Borrowing, the Company shall notify the Administrative Agent of such
request by telephone (a) in the case of a Eurodollar Borrowing, not later than
10:00 a.m., Charlotte, North Carolina, time, three Business Days before the date
of the proposed Borrowing (provided, however, no such request may be given prior
to the third Business Day after the Effective Date) and (b) in the case of an
ABR Borrowing, not later than 10:00 a.m., Charlotte, North Carolina, time, on
the date of the proposed Borrowing. Each such telephonic Borrowing Request
shall be irrevocable and shall be confirmed promptly by hand delivery or
telecopy to the Administrative Agent of a written Borrowing Request in a form
of Exhibit 2.03 (a "Borrowing Request") and signed by the Company. Each such
telephonic and written Borrowing Request shall specify the following information
in compliance with Section 2.02:
(i) the aggregate amount of the requested Borrowing;
(ii) the date of such Borrowing, which shall be a Business Day;
(iii)whether such Borrowing is to be an ABR Borrowing or a Eurodollar
Borrowing;
(iv) in the case of a Eurodollar Borrowing, the initial Interest
Period to be applicable thereto, which shall be a period contemplated by
the definition of the term "Interest Period"; and
(v) the location and number of the Company's account to which funds
are to be disbursed, which shall comply with the requirements of Section
2.07.
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If no election as to the Type of Revolving Borrowing is specified, then the
requested Revolving Borrowing shall be an ABR Borrowing. If no Interest Period
is specified with respect to any requested Eurodollar Revolving Borrowing, then
the Company shall be deemed to have selected an Interest Period of one month's
duration. Promptly following receipt of a Borrowing Request in accordance with
this Section 2.03, the Administrative Agent shall advise each Lender of the
details thereof and of the amount of such Lender's Loan to be made as part of
the requested Borrowing.
SECTION 2.04 Competitive Bid Procedure. (a) Subject to the terms and
conditions set forth herein, from time to time during the Availability Period
the Company may request Competitive Bids and may (but shall not have any
obligation to) accept Competitive Bids and borrow Competitive Loans; provided
that the sum of the total Revolving Credit Exposures plus the aggregate
principal amount of outstanding Competitive Loans, at any time shall not exceed
the Total Commitment. To request Competitive Bids, the Company shall notify the
Administrative Agent of such request by telephone, in the case of a Eurodollar
Borrowing, not later than 10:00 a.m., Charlotte, North Carolina, time, four
Business Days before the date of the proposed Borrowing and, in the case of a
Fixed Rate Borrowing, not later than 10:00 a.m., Charlotte, North Carolina,
time, one Business Day before the date of the proposed Borrowing; provided
that the Company may submit up to (but not more than) three Competitive Bid
Requests on the same day, but a Competitive Bid Request shall not be made on
any of the five Business Days next succeeding the date of any previous
Competitive Bid Request, unless any and all such previous Competitive Bid
Requests shall have been withdrawn or all Competitive Bidsreceived in response
thereto rejected. Each such telephonic Competitive Bid Request shall be
confirmed promptly by hand delivery or telecopy to the Administrative Agent
of a written Competitive Bid Request signed by the Company. Each such telephonic
and written Competitive Bid Request shall specify the following information
in compliance with Section 2.02:
(i) the aggregate amount of the requested Borrowing;
(ii) the date of such Borrowing, which shall be a Business Day;
(iii)whether such Borrowing is to be a Eurodollar Borrowing or a Fixed
Rate Borrowing;
(iv) the Interest Period to be applicable to such Borrowing, which
shall be a period contemplated by the definition of the term "Interest
Period"; and
(v) the location and number of the Company's account to which funds
are to be disbursed, which shall comply with the requirements of Section
2.07.
Promptly following receipt of a Competitive Bid Request in accordance with this
Section, the Administrative Agent shall notify the Lenders of the details
thereof by telecopy (in substantially the form set forth in Exhibit 2.04-B),
inviting the Lenders to submit Competitive Bids.
(b) Each Lender may (but shall not have any obligation to) make one
or more Competitive Bids to the Company in response to a Competitive Bid
Request. Each Competitive Bid by a Lender must be substantially the form of
Exhibit 2.04-C and must be received by the Administrative Agent by telecopy, in
the case of a Eurodollar Competitive Borrowing, not later than
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10:00 a.m., Charlotte, North Carolina, time, three Business Days before the
proposed date of such Competitive Borrowing, and in the case of a Fixed Rate
Borrowing, not later than 10:00 a.m., Charlotte, North Carolina, time, on the
proposed date of such Competitive Borrowing. Competitive Bids that do not
conform substantially to the form of Exhibit 2.04-C may be rejected by the
Administrative Agent, and the Administrative Agent shall notify the applicable
Lender as promptly as practicable. Each Competitive Bid shall specify (i) the
principal amount (which shall be a minimum of $5,000,000 and an integral
multiple of $1,000,000 and which may equal the entire principal amount of the
Competitive Borrowing requested by the Company) of the Competitive Loan or Loans
that the Lender is willing to make, (ii) the Competitive Bid Rate or Rates at
which the Lender is prepared to make such Loan or Loans (expressed as a
percentage rate per annum in the form of a decimal to no more than four decimal
places) and (iii) the Interest Period applicable to each such Loan and the last
day thereof (which shall conform to that specified in the Company's related
Competitive Bid Request).
(c) The Administrative Agent shall promptly notify the Company by
telecopy of the Competitive Bid Rate and the principal amount specified in each
Competitive Bid and the identity of the Lender that shall have made such
Competitive Bid.
(d) Subject only to the provisions of this paragraph, the Company may
accept or reject any Competitive Bid in whole or (to the extent herein below
provided) in part. The Company shall notify the Administrative Agent by
telephone, confirmed by telecopy in a form approved by the Administrative Agent,
whether and to what extent it has decided to accept or reject each Competitive
Bid, in the case of a Eurodollar Competitive Borrowing, not later than 11:30
a.m., Charlotte, North Carolina, time, three Business Days before the date of
the proposed Competitive Borrowing, and in the case of a Fixed Rate Borrowing,
not later than 11:30 a.m., Charlotte, North Carolina, time, on the proposed date
of the Competitive Borrowing; provided that (i) the failure of the Company to
give such notice shall be deemed to be a rejection of each Competitive Bid, (ii)
the Company shall not accept a Competitive Bid made at a particular Competitive
Bid Rate if the Company rejects a Competitive Bid made at a lower Competitive
Bid Rate, (iii) the aggregate amount of the Competitive Bids accepted by the
Company shall not exceed the aggregate amount of the requested Competitive
Borrowing specified in the related Competitive Bid Request, (iv) to the extent
necessary to comply with clause (iii) above, the Company may accept Competitive
Bids at the same Competitive Bid Rate in part, which acceptance, in the case of
multiple Competitive Bids at such Competitive Bid Rate, shall be made pro rata
in accordance with the amount of each such Competitive Bid, and (v) except
pursuant to clause (iv) above, no Competitive Bid shall be accepted for a
Competitive Loan unless such Competitive Loan is in a minimum principal amount
of $5,000,000 and an integral multiple of $1,000,000; provided further that if a
Competitive Loan must be in an amount less than $5,000,000 because of the
provisions of clause (iv) above, such Competitive Loan may be for a minimum of
$1,000,000 or any integral multiple thereof, and in calculating the pro rata
allocation of acceptances of portions of multiple Competitive Bids at a
particular Competitive Bid Rate pursuant to clause (iv) the amounts shall be
rounded to integral multiples of $1,000,000 in a manner determined by the
Company. A notice given by the Company pursuant to this paragraph shall be
irrevocable.
(e) The Administrative Agent shall promptly notify each bidding
Lender by telecopy whether or not its Competitive Bid has been accepted (and, if
so, the amount and Competitive Bid Rate so accepted), and each successful bidder
will thereupon become bound,
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subject to the terms and conditions hereof, to make the Competitive Loan in
respect of which its Competitive Bid has been accepted. After completing the
notifications referred to in the immediately preceding sentence, the
Administrative Agent shall notify each Lender of the aggregate principal amount
of all Competitive Bids accepted.
(f) Upon determination by the Administrative Agent of the LIBOR Rate
applicable to any Eurodollar Competitive Loan to be made by any Lender pursuant
to a Competitive Bid that has been accepted by a Company pursuant to Section
2.04(d), the Administrative Agent shall notify such Lender of (i) the applicable
LIBOR Rate and (ii) the sum of the applicable LIBOR Rate plus the Margin bid by
such Lender.
(g) If the Administrative Agent or any of its Affiliates shall at any
time have a Commitment hereunder and shall elect to submit a Competitive Bid in
its capacity as a Lender, it shall submit such Competitive Bid directly to the
Company at least one quarter of an hour earlier than the time by which the other
Lenders are required to submit their Competitive Bids to the Administrative
Agent pursuant to paragraph (b) of this Section.
SECTION 2.05 THIS SECTION IS INTENTIONALLY OMITTED.
SECTION 2.06 Telephonic Notices. Without in any way limiting the
obligation of the Company to confirm in writing any telephonic notice it is
entitled to give under this Agreement or any other Loan Document, the
Administrative Agent may act without liability upon the basis of a telephonic
notice believed in good faith by the Administrative Agent to be from the Company
prior to receipt of written confirmation. In each such case, the Company hereby
waives the right to dispute the Administrative Agent's record of the terms of
such telephonic notice.
SECTION 2.07 Funding of Borrowings. (a) Each Lender shall make each
Loan to be made by it hereunder on the proposed date thereof by wire transfer
of immediately available funds by 2:00 p.m., Charlotte, North Carolina, time,
to the account of the Administrative Agent most recently designated by it for
such purpose by notice to the Lenders. Not later than 2:00 p.m. (Charlotte,
North Carolina, time) on the proposed Borrowing Date, each Lender will make
available to the Administrative Agent, for the account of the Company, at the
office of the Administrative Agent in funds immediately available to the
Administrative Agent, such Lender's Loans to be made on such Borrowing Date.
The Company hereby irrevocably authorizes the Administrative Agent to disburse
the proceeds of each Borrowing requested pursuant to this Section 2.07 in
immediately available funds by crediting or wiring such proceeds to the deposit
account of the Company identified in the most recent Notice of Account
Designation substantially in the form of Exhibit 2.07 hereto (a "Notice of
Account Designation") delivered by the Company to the Administrative Agent or
may be otherwise agreed upon by the Company and the Administrative Agent from
time to time.
(b) Unless the Administrative Agent shall have received notice from a
Lender prior to the proposed date of any Borrowing (or prior to 12:00 noon,
Charlotte, North Carolina, time, on such date in the case of an ABR Borrowing)
that such Lender will not make available to the Administrative Agent such
Lender's share of such Borrowing, the Administrative Agent may assume that such
Lender has made such share available on such date in accordance with Section
2.07(a) and may, in reliance upon such assumption, make available to the Company
a corresponding amount. In such event, if a Lender has not in fact made its
share of the applicable Borrowing available to the
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Administrative Agent, then the applicable Lender and the Company severally agree
to pay to the Administrative Agent forthwith on demand such corresponding amount
with interest thereon, for each day from the date such amount is made available
to the Company to the date of payment to the Administrative Agent, at (i) in the
case of such Lender, the Federal Funds Effective Rate or (ii) in the case of the
Company, the interest rate applicable to ABR Loans. If such Lender pays such
amount to the Administrative Agent, then such amount shall constitute such
Lender's Loan included in such Borrowing.
SECTION 2.08 Interest Elections. (a) Subject to Section 2.14, each
Revolving Borrowing initially shall be of the Type specified in the applicable
Borrowing Request and, in the case of a Eurodollar Revolving Borrowing, shall
have an initial Interest Period as specified in such Borrowing Request.
Thereafter, subject to Section 2.14, the Company may elect to convert such
Borrowing to a different Type or to continue such Borrowing and, in the case of
a Eurodollar Revolving Borrowing, may elect Interest Periods therefor, all
as provided in this Section 2.08. The Company may elect different options with
respect to different portions of the affected Borrowing, in which case each
such portion shall be allocated ratably among the Lenders holding the Loans
comprising such Borrowing, and the Loans comprising each such portion shall
be considered a separate Borrowing. This Section 2.08 shall not apply to
Competitive Borrowings, which may not be converted or continued.
(b) To make an election pursuant to this Section 2.08, the Company
shall notify the Administrative Agent of such election by telephone by the time
that a Borrowing Request would be required under Section 2.03 if the Company
were requesting a Revolving Borrowing of the Type resulting from such election
to be made on the effective date of such election. Each such telephonic Interest
Election Request shall be irrevocable and shall be confirmed promptly by hand
delivery or telecopy to the Administrative Agent of a written Interest Election
Request in the form of Exhibit 2.08 (an "Interest Election Request").
(c) Each telephonic and written Interest Election Request shall
specify the following information in compliance with Section 2.02:
(i) the Borrowing to which such Interest Election Request applies and,
if different options are being elected with respect to different portions
thereof, the portions thereof to be allocated to each resulting Borrowing
(in which case the information to be specified pursuant to clauses (iii)
and (iv) below shall be specified for each resulting Borrowing);
(ii) the effective date of the election made pursuant to such Interest
Election Request, which shall be a Business Day;
(iii)whether the resulting Borrowing is to be an ABR Borrowing or a
Eurodollar Borrowing; and
(iv) if the resulting Borrowing is a Eurodollar Borrowing, the
Interest Period to be applicable thereto after giving effect to such
election, which shall be a period contemplated by the definition of the
term "Interest Period".
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If any such Interest Election Request requests a Eurodollar Borrowing but does
not specify an Interest Period, then the Company shall be deemed to have
selected an Interest Period of one month's duration.
(d) Promptly following receipt of an Interest Election Request, the
Administrative Agent shall advise each Lender of the details thereof and of such
Lender's portion of each resulting Borrowing.
(e) If the Company fails to deliver a timely Interest Election
Request with respect to a Eurodollar Revolving Borrowing prior to the end of the
Interest Period applicable thereto, then, unless such Borrowing is repaid as
provided herein, at the end of such Interest Period such Borrowing shall be
converted to an ABR Borrowing. Notwithstanding any contrary provision hereof, if
and so long as an Event of Default is continuing (i) no outstanding Revolving
Borrowing may be converted to or continued as a Eurodollar Borrowing and (ii)
unless repaid, each Eurodollar Revolving Borrowing shall be converted to an ABR
Borrowing at the end of the Interest Period applicable thereto.
SECTION 2.09 Termination and Reduction of Commitments. (a) Unless
previously terminated, the Commitments shall terminate on the Termination Date.
(b) The Company may at any time terminate, or from time to time
reduce, the Total Commitment, in whole or in part; provided that (i) each
partial reduction of the Total Commitment shall be in an amount that is an
integral multiple of $1,000,000 and not less than $5,000,000 and (ii) the
Company shall not terminate or reduce the Commitments if, after giving effect to
any concurrent prepayment of the Loans in accordance with Section 2.11, the sum
of the total Revolving Credit Exposures would, plus the aggregate principal
amount of outstanding Competitive Loans, exceed the Total Commitment.
(c) The Company shall notify the Administrative Agent of any election
to terminate or reduce the Total Commitment under Section 2.09(b) at least three
Business Days prior to the effective date of such termination or reduction,
specifying such election and the effective date thereof. Promptly following
receipt of any notice, the Administrative Agent shall advise the Lenders of the
contents thereof. Each notice delivered by the Company pursuant to this Section
2.09 shall be irrevocable; provided that a notice of termination of the Total
Commitment delivered by the Company may state that such notice is conditioned
upon the effectiveness of other credit facilities, in which case such notice may
be revoked by the Company (by notice to the Administrative Agent on or prior to
the specified effective date) if such condition is not satisfied. Any
termination or reduction of the Total Commitment shall be permanent. Each
reduction of the Total Commitment shall be made ratably among the Lenders in
accordance with their respective Commitments.
(d) The Total Commitment shall automatically terminate on the date a
Change in Control occurs.
SECTION 2.10 Repayment of Loans; Evidence of Debt. (a) The
Company hereby unconditionally promises to pay (i) to the Administrative Agent
for the account of each Lender the then unpaid principal amount of each
Revolving Loan on the Maturity Date and (ii) to the Administrative Agent
for the account of each Lender having a Competitive Loan outstanding the
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then unpaid principal amount of each Competitive Loan on the last day of the
Interest Period applicable to such Loan. In addition, if prior to the
Termination Date the sum of the total Revolving Credit Exposures, plus the
aggregate principal amount of the outstanding Competitive Loans, exceeds the
Total Commitment, the Company shall pay to the Administrative Agent for the
account of each Lender an aggregate principal amount of Revolving Loans
sufficient to cause the sum of the total Revolving Credit Exposures, plus the
aggregate principal amount of the outstanding Competitive Loans, not to exceed
the Total Commitment.
(b) On the date that a Change in Control occurs, the Company shall
repay the outstanding principal amount of the Loans and all other amounts
outstanding hereunder and under the other Loan Documents.
(c) Each Lender shall maintain in accordance with its usual practice
an account or accounts evidencing the indebtedness of the Company to such Lender
resulting from each Loan made by such Lender, including the amounts of principal
and interest payable and paid to such Lender from time to time hereunder.
(d) The Administrative Agent shall maintain accounts in which it
shall record (i) the amount of each Loan made hereunder, the Class and Type
thereof and the Interest Period applicable thereto, (ii) the amount of any
principal or interest due and payable or to become due and payable from the
Company to each Lender hereunder and (iii) the amount of any sum received by the
Administrative Agent hereunder for the account of the Lenders and each Lender's
share thereof.
(e) The entries made in the accounts maintained pursuant to Section
2.10(c) or (d) shall be prima facie evidence of the existence and amounts of the
obligations recorded therein; provided that the failure of any Lender or the
Administrative Agent to maintain such accounts or any error or conflict therein
shall not in any manner affect the obligation of the Company to repay the Loans
in accordance with the terms of this Agreement.
(f) Any Lender may request that Loans made by it be evidenced by a
Revolving Note or a Competitive Note, as the case may be. In such event, the
Company shall prepare, execute and deliver to such Lender a Revolving Note or a
Competitive Note, as the case may be. Thereafter, the Loans evidenced by such
promissory note and interest thereon shall at all times (including after
assignment pursuant to Section 9.05) be represented by one or more promissory
notes in such forms payable to the order of the payee named therein.
SECTION 2.11 Prepayment of Loans. (a) The Company shall have the
right at any time and from time to time to prepay any Borrowing in whole or in
part, subject to prior notice in accordance with Section 2.11(b); provided
that the Company shall not have the right to prepay any Competitive Loan without
the prior consent of the Lender thereof.
(b) The Company shall notify the Administrative Agent by telephone
(confirmed by telecopy in the form of Exhibit 2.11 (a "Notice of Prepayment"))
of any prepayment hereunder (i) in the case of prepayment of a Eurodollar
Revolving Borrowing, not later than 11:00 a.m., Charlotte, North Carolina, time,
three Business Days before the date of prepayment or (ii) in the case of
prepayment of an ABR Revolving Borrowing, not later than 11:00 a.m., Charlotte,
North Carolina, time, on the date of prepayment. Each such notice shall be
irrevocable and shall specify
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the prepayment date, Type and the principal amount of each Borrowing or portion
thereof to be prepaid; provided that, if a notice of prepayment is given in
connection with a conditional notice of termination of the Commitments as
contemplated by Section 2.09, then such notice of prepayment may be revoked if
such notice of termination is revoked in accordance with Section 2.09. Each
partial prepayment shall be in an aggregate amount not less than, and shall be
an integral multiple of, the amounts shown below with respect to the applicable
Type of Loan or Borrowing:
Type of Integral Minimum
Loan/Borrowing Multiple of Aggregate Amount
Eurodollar Revolving Borrowing $ 1,000,000 $ 3,000,000
ABR Revolving Borrowing 1,000,000 1,000,000
Promptly following receipt of any such notice relating to a Revolving Borrowing,
the Administrative Agent shall advise the Lenders of the contents thereof. If
the Company fails to designate the Type of Borrowings to be prepaid, partial
prepayments shall be applied first to the outstanding ABR Borrowings until all
such outstanding principal of ABR Borrowings are repaid in full, and then to the
outstanding principal amount of Eurodollar Borrowings. Each partial prepayment
of any Revolving Borrowing shall be in an amount that would be permitted in the
case of an advance of a Revolving Borrowing of the same Type as provided in
Section 2.02. Each prepayment of a Revolving Borrowing shall be applied ratably
to the Loans included in the prepaid Borrowing. Prepayments shall be accompanied
by accrued interest to the extent required by Section 2.13.
SECTION 2.12 Fees. (a) The Company agrees to pay to the
Administrative Agent for the account of each Lender a facility fee, which shall
accrue at the applicable Facility Fee Rate on the daily amount of the Commitment
of such Lender, whether used or unused, during the period from and including the
date of this Agreement to but excluding the date on which such Commitment
terminates. Accrued facility fees shall be payable in arrears on the last
Business Day of January, April, July and October of each year and on the date
on which the Commitments terminate, commencing on the first such date to occur
after the date hereof. All facility fees shall be computed on the basis of a
year of 360 days and shall be payable for the actual number of days elapsed
(including the first day but excluding the last day).
(b) The Company agrees to pay to each of the Administrative Agent,
the Syndication Agent, First Union Capital Markets Corp. and Banc of America
Securities LLC, for its own account, fees payable in the amounts and at the
times specified in that letter agreement dated August 26, 1999 among the
Company, the Administrative Agent, the Syndication Agent, First Union Capital
Markets Corp. and Banc of America Securities LLC (as from time to time amended,
the "Fee Letter").
(c) The Company agrees to pay to the Administrative Agent for the
account of each Lender a utilization fee (the "Utilization Fee"), which shall
accrue at a rate per annum equal to .125% on each Lender's Commitment (whether
used or unused) for each day from and after the Effective Date to but excluding
the Maturity Date on which the sum of the total Revolving Credit Exposures, plus
the aggregate principal amount of outstanding Competitive Loans plus the
aggregate loans and letters of credit outstanding under the Companion Credit
Agreement, exceeds 50% of the
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sum of Total Commitment plus the Total Commitment (as defined in the Companion
Credit Agreement) and for each day on and after the Maturity Date until the
Revolving Credit Exposures of all Lenders, all Competitive Loans and all loans
outstanding under the Companion Credit Agreement are paid in full or reduced to
zero, if the sum of the Total Revolving Credit Exposures, plus the aggregate
principal amount of outstanding Competitive Loans plus the aggregate loans and
letters of credit outstanding under the Companion Credit Agreement, exceeded 50%
of the sum of Total Commitment plus the Total Commitment (as defined in the
Companion Credit Agreement) on the day immediately preceding the Maturity Date.
All Utilization Fees shall be payable in arrears on the last day of January,
April, July and October of each year and on the date the Revolving Credit
Exposures of all Lenders and all Competitive Loans and all loans outstanding
under the Companion Credit Agreement are paid in full or reduced to zero, as the
case may be, commencing on the first of such dates to occur after the Effective
Date. All Utilization Fees shall be computed on the basis of a year of 360 days
and shall be payable for the actual number of days elapsed (including the first
day but excluding the last day).
(d) All fees payable hereunder shall be paid on the dates due, in
immediately available funds, to the Administrative Agent for distribution, in
the case of facility fees and participation fees, to the Lenders. Except as
required by law, fees paid shall not be refundable under any circumstances.
SECTION 2.13 Interest. (a) The Loans comprising each ABR Borrowing
shall bear interest at a rate per annum equal to the Alternate Base Rate.
(b) The Loans comprising each Eurodollar Borrowing shall bear
interest (i) in the case of a Eurodollar Revolving Loan, at the LIBOR Rate for
the Interest Period in effect for such Borrowing plus the Applicable Margin or
(ii) in the case of a Eurodollar Competitive Loan, at the LIBOR Rate for the
Interest Period in effect for such Borrowing plus (or minus, as applicable) the
Margin applicable to such Loan.
(c) Each Fixed Rate Loan shall bear interest at the Fixed Rate
applicable to such Loan.
(d) Notwithstanding the foregoing, if any principal of or interest on
any Loan or any fee or other amount payable by the Company hereunder is not paid
when due, whether at stated maturity, upon acceleration or otherwise, such
overdue amount shall bear interest, after as well as before judgment, at a rate
per annum equal to (i) in the case of overdue principal of any Loan, 2% plus the
rate otherwise applicable to such Loan as provided above or (ii) in the case of
any other amount, 2% plus the Alternate Base Rate.
(e) Accrued interest on each Loan shall be payable in arrears on each
Interest Payment Date for such Loan; provided that (i) interest accrued pursuant
to Section 2.13(d) shall be payable on demand, (ii) in the event of any
repayment or prepayment of any Loan (other than a prepayment of an ABR Revolving
Loan prior to the end of the Availability Period), accrued interest on the
principal amount repaid or prepaid shall be payable on the date of such
repayment or prepayment, (iii) in the event of any conversion of any Eurodollar
Revolving Loan prior to the end of the current Interest Period therefor, accrued
interest on such Loan shall be payable on the effective
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date of such conversion and (iv) all accrued interest shall be payable upon
termination of the Total Commitment.
(f) All interest hereunder shall be computed on the basis of a year
of 360 days, except that interest computed by reference to the Alternate Base
Rate at times when the Alternate Base Rate is based on the Prime Rate shall be
computed on the basis of a year of 365 days (or 366 days in a leap year), and in
each case shall be payable for the actual number of days elapsed (including the
first day but excluding the last day). The applicable Alternate Base Rate or
LIBOR Rate shall be determined by the Administrative Agent, and such
determination shall be conclusive absent manifest error.
SECTION 2.14 Alternate Rate of Interest. If prior to the commencement
of any Interest Period for a Eurodollar Borrowing:
(a) the Administrative Agent determines (which determination shall be
conclusive absent manifest error) that adequate and reasonable means do not
exist for ascertaining the LIBOR Rate for such Interest Period; or
(b) the Administrative Agent is advised by the Required Lenders (or,
in the case of a Eurodollar Competitive Loan, by the Lender that is required to
make such Loan) that the LIBOR Rate for such Interest Period will not adequately
and fairly reflect the cost to such Lenders (or Lender) of making or maintaining
their Loans (or its Loan) included in such Borrowing for such Interest Period;
then the Administrative Agent shall give notice thereof to the Company and the
Lenders by telephone or telecopy as promptly as practicable thereafter and,
until the Administrative Agent notifies the Company and the Lenders that the
circumstances giving rise to such notice no longer exist, (i) any Interest
Election Request that requests the conversion of any Revolving Borrowing to, or
continuation of any Revolving Borrowing as, a Eurodollar Borrowing shall be
ineffective, (ii) if any Borrowing Request requests a Eurodollar Revolving
Borrowing, such Borrowing shall be made as an ABR Borrowing and (iii) any
request by the Company for a Eurodollar Competitive Borrowing shall be
ineffective; provided that (A) if the circumstances giving rise to such notice
do not affect all the Lenders, then requests by the Company for Eurodollar
Competitive Borrowings may be made to Lenders that are not affected thereby and
(B) if the circumstances giving rise to such notice affect only one Type of
Borrowings, then the other Type of Borrowings shall be permitted.
SECTION 2.15 Increased Costs. (a) If any Change in Law shall:
(i) impose, modify or deem applicable any reserve, special deposit or
similar requirement against assets of, deposits with or for the account of,
or credit extended by, any Lender (except any such reserve requirement
reflected in the LIBOR Rate); or
(ii) impose on any Lender or the London interbank market any other
condition affecting this Agreement or Eurodollar Loans made by such Lender;
and the result of any of the foregoing shall be to increase the cost to such
Lender of making or maintaining any Eurodollar Loan or Fixed Rate Loan (or of
maintaining its obligation to make any
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such Loan) or to reduce the amount of any sum received or receivable by such
Lender hereunder (whether of principal, interest or otherwise), then the Company
will pay to such Lender such additional amount or amounts as will compensate
such Lender for such additional costs incurred or reduction suffered.
(b) If any Lender determines that any Change in Law regarding capital
requirements has or would have the effect of reducing the rate of return on such
Lender's capital or on the capital of such Lender's holding company, if any, as
a consequence of this Agreement or the Loans made by such Lender to a level
below that which such Lender or such Lender's holding company could have
achieved but for such Change in Law (taking into consideration such Lender's
policies and the policies of such Lender's holding company with respect to
capital adequacy), then from time to time the Company will pay to such Lender
such additional amount or amounts as will compensate such Lender or such
Lender's holding company for any such reduction suffered.
(c) A certificate of a Lender setting forth the amount or amounts
necessary to compensate such Lender or its holding company, as the case may be,
as specified in paragraph (a) or (b) of this Section 2.15 shall be delivered to
the Company and shall be conclusive absent manifest error. The Company shall pay
such Lender the amount shown as due on any such certificate within 10 days after
receipt thereof.
(d) Failure or delay on the part of any Lender to demand compensation
pursuant to this Section 2.15 shall not constitute a waiver of such Lender's
right to demand such compensation; provided that the Company shall not be
required to compensate a Lender pursuant to this Section 2.15 for any increased
costs or reductions incurred more than six months prior to the date that such
Lender notifies the Company of the Change in Law giving rise to such increased
costs or reductions and of such Lender's intention to claim compensation
therefor; provided further that, if the Change in Law giving rise to such
increased costs or reductions is retroactive, then the six-month period referred
to above shall be extended to include the period of retroactive effect thereof.
SECTION 2.16 Break Funding Payments. In the event of (a) the payment
of any principal of any Eurodollar Loan or Fixed Rate Loan other than on the
last day of an Interest Period applicable thereto (including as a result
of an Event of Default), (b) the conversion of any Eurodollar Loan other
than on the last day of the Interest Period applicable thereto, (c) the failure
to borrow (unless such failure was caused by the failure of a Lender to make
such Loan), convert, continue or prepay any Eurodollar Loan, or the failure
to convert an ABR Loan to a Eurodollar Loan, on the date specified in any notice
delivered pursuant hereto (regardless of whether such notice is permitted
to be revocable under Section 2.09 and is revoked in accordance herewith), (d)
the failure to borrow any Competitive Loan after accepting the Competitive Bid
to make such Loan (unless such failure was caused by the failure of a Lender to
make such Loan), or (e) the assignment of any Eurodollar Loan or Fixed Rate
Loan other than on the last day of the Interest Period applicable thereto
as a result of a request by the Company pursuant to Section 2.19, then, in any
such event, the Company shall compensate each Lender for the loss, cost and
expense attributable to such event. In the case of a Eurodollar Loan, the loss
to any Lender attributable to any such event shall be deemed to include an
amount determined by such Lender to be equal to the excess, if any, of (i) the
amount of interest that such Lender would pay for a deposit equal to the
principal amount of such Loan for the period from the date of such payment,
conversion, failure or assignment to the last day of the then current Interest
Period for such Loan (or, in the case of a failure to borrow, convert or
continue, the duration of the
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Interest Period that would have resulted from such borrowing, conversion or
continuation) if the interest rate payable on such deposit were equal to the
LIBOR Rate for such Interest Period, over (ii) the amount of interest that such
Lender would earn on such principal amount for such period if such Lender were
to invest such principal amount for such period at the interest rate that would
be bid by such Lender (or an affiliate of such Lender) for dollar deposits from
other banks in the Eurodollar market at the commencement of such period. A
certificate of any Lender setting forth any amount or amounts that such Lender
is entitled to receive pursuant to this Section 2.16 shall be delivered to the
Company and shall be conclusive absent manifest error. The Company shall pay
such Lender the amount shown as due on any such certificate within 10 days after
receipt thereof.
SECTION 2.17 Taxes. (a) Any and all payments by or on account of any
obligation of the Company hereunder shall be made free and clear of and without
deduction for any Indemnified Taxes or Other Taxes; provided that if the
Company shall be required to deduct any Indemnified Taxes or Other Taxes from
such payments, then (i) the sum payable shall be increased as necessary so that
after making all required deductions (including deductions applicable to
additional sums payable under this Section 2.17) the Administrative Agent or
a Lender (as the case may be) receives an amount equal to the sum it would have
received had no such deductions been made, (ii) the Company shall make such
deductions and (iii) the Company shall pay the full amount deducted to the
relevant Governmental Authority in accordance with applicable law.
(b) In addition, the Company shall pay any Other Taxes to the
relevant Governmental Authority in accordance with applicable law.
(c) The Company shall indemnify the Administrative Agent and each
Lender, within 10 days after written demand therefor, for the full amount of any
Indemnified Taxes or Other Taxes (including Indemnified Taxes or Other Taxes
imposed or asserted on or attributable to amounts payable under this Section
2.17(c)) paid by the Administrative Agent or such Lender, as the case may be,
and any penalties, interest and reasonable expenses arising therefrom or with
respect thereto, whether or not such Indemnified Taxes or Other Taxes were
correctly or legally imposed or asserted by the relevant Governmental Authority.
A certificate as to the amount of such payment or liability delivered to the
Company by a Lender, or by the Administrative Agent on its own behalf or on
behalf of a Lender, shall be conclusive absent manifest error.
(d) As soon as practicable after any payment of Indemnified Taxes or
Other Taxes by the Company to a Governmental Authority, the Company shall
deliver to the Administrative Agent the original or a certified copy of a
receipt issued by such Governmental Authority evidencing such payment, a copy of
the return reporting such payment or other evidence of such payment reasonably
satisfactory to the Administrative Agent.
(e) Any Foreign Lender that is entitled to an exemption from or
reduction of withholding tax under the law of the jurisdiction in which the
Company is located, or any treaty to which such jurisdiction is a party, with
respect to payments under this Agreement shall deliver to the Company (with a
copy to the Administrative Agent), at the time or times prescribed by applicable
law or reasonably requested by the Company, such properly completed and executed
documentation prescribed by applicable law as will permit such payments to be
made without withholding or at a reduced rate.
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SECTION 2.18 Payments Generally; Pro Rata Treatment; Sharing of
Set-offs. (a) The Company shall make each payment required to be made by the
Company hereunder (whether of principal, interest or fees, or under Section
2.15, 2.16 or 2.17, or otherwise) prior to 12:00 noon, Charlotte, North
Carolina, time, on the date when due, in immediately available funds, without
set-off or counterclaim. Any amounts received after such time on any date may,
in the discretion of the Administrative Agent, be deemed to have been received
on the next succeeding Business Day for purposes of calculating interest
thereon. All such payments shall be made to the Administrative Agent at its
Principal Office, except that payments pursuant to Sections 2.15, 2.16, 2.17 and
9.03 shall be made directly to the Persons entitled thereto. The Administrative
Agent shall distribute any such payments received by it for the account of any
other Person to the appropriate recipient promptly following receipt thereof. If
any payment hereunder shall be due on a day that is not a Business Day, the date
for payment shall be extended to the next succeeding Business Day, and, in the
case of any payment accruing interest, interest thereon shall be payable for the
period of such extension. All payments hereunder shall be made in dollars.
(b) If at any time insufficient funds are received by and available
to the Administrative Agent to pay fully all amounts of principal, interest and
fees then due hereunder, such funds shall be applied (i) first, to pay interest
and fees then due hereunder, ratably among the parties entitled thereto in
accordance with the amounts of interest and fees then due to such parties, and
(ii) second, to pay principal then due hereunder, ratably among the parties
entitled thereto in accordance with the amounts of principal then due to such
parties.
(c) If any Lender shall, by exercising any right of set-off or
counterclaim or otherwise, obtain payment in respect of any principal of or
interest on any of its Revolving Loans resulting in such Lender receiving
payment of a greater proportion of the aggregate amount of its Revolving Loans
and accrued interest thereon than the proportion received by any other Lender,
then the Lender receiving such greater proportion shall purchase (for cash at
face value) participations in the Revolving Loans of other Lenders to the extent
necessary so that the benefit of all such payments shall be shared by the
Lenders ratably in accordance with the aggregate amount of principal of and
accrued interest on their respective Revolving Loans; provided that (i) if any
such participations are purchased and all or any portion of the payment giving
rise thereto is recovered, such participations shall be rescinded and the
purchase price restored to the extent of such recovery, without interest, and
(ii) the provisions of this paragraph shall not be construed to apply to any
payment made by the Company pursuant to and in accordance with the express terms
of this Agreement or any payment obtained by a Lender as consideration for the
assignment of or sale of a participation in any of its Loans to any assignee,
other than to the Company or any Subsidiary or Affiliate thereof (as to which
the provisions of this paragraph shall apply). The Company consents to the
foregoing and agrees, to the extent it may effectively do so under applicable
law, that any Lender acquiring a participation pursuant to the foregoing
arrangements may exercise against the Company rights of set-off and counterclaim
with respect to such participation as fully as if such Lender were a direct
creditor of the Company in the amount of such participation.
(d) Unless the Administrative Agent shall have received notice from
the Company prior to the date on which any payment is due to the Administrative
Agent for the account of the Lenders hereunder that the Company will not make
such payment, the Administrative Agent may assume that the Company has made such
payment on such date in accordance herewith and may, in reliance upon such
assumption, distribute to the Lenders the amount due. In such event, if
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the Company has not in fact made such payment, then each of the Lenders
severally agrees to repay to the Administrative Agent forthwith on demand the
amount so distributed to such Lender with interest thereon, for each day from
and including the date such amount is distributed to it to but excluding the
date of payment to the Administrative Agent, at the Federal Funds Effective
Rate.
(e) If any Lender shall fail to make any payment required to be made
by it pursuant to Section 2.07(b) or 2.18(d), then the Administrative Agent may,
in its discretion (notwithstanding any contrary provision hereof), apply any
amounts thereafter received by the Administrative Agent for the account of such
Lender to satisfy such Lender's obligations under such Sections until all such
unsatisfied obligations are fully paid.
SECTION 2.19 Mitigation Obligations; Replacement of Lenders. (a) If any
Lender requests compensation under Section 2.15, or if the Company is required
to pay any additional amount to any Lender or any Governmental Authority for the
account of any Lender pursuant to Section 2.17, then such Lender shall use
reasonable efforts to designate a different lending office for funding or
booking its Loans hereunder or to assign its rights and obligations hereunder
to another of its offices, branches or affiliates, if, in the judgment of such
Lender, such designation or assignment (i) would eliminate or reduce amounts
payable pursuant to Section 2.15 or 2.17, as the case may be, in the future and
(ii) would not subject such Lender to any unreimbursed cost or expense and would
not otherwise be disadvantageous to such Lender. The Company hereby agrees to
pay all reasonable costs and expenses incurred by any Lender in connection with
any such designation or assignment.
(b) If any Lender requests compensation under Section 2.15, or if the
Company is required to pay any additional amount to any Lender or any
Governmental Authority for the account of any Lender pursuant to Section 2.17,
or if any Lender defaults in its obligation to fund Loans hereunder, then the
Company may, at its sole expense and effort, upon notice to such Lender and the
Administrative Agent, require such Lender to assign and delegate, without
recourse (in accordance with and subject to the restrictions contained in
Section 9.05), all its interests, rights and obligations under this Agreement to
an assignee that shall assume such obligations (which assignee may be another
Lender, if a Lender accepts such assignment); provided that (i) the Company
shall have received the prior written consent of the Administrative Agent, which
consent shall not be unreasonably withheld, (ii) such Lender shall have received
payment of an amount equal to the outstanding principal of its Loans, accrued
interest thereon, accrued fees and all other amounts payable to it hereunder,
from the assignee (to the extent of such outstanding principal and accrued
interest and fees) or the Company (in the case of all other amounts) and (iii)
in the case of any such assignment resulting from a claim for compensation under
Section 2.15 or payments required to be made pursuant to Section 2.17, such
assignment will result in a reduction in such compensation or payments. A Lender
shall not be required to make any such assignment and delegation if, prior
thereto, as a result of a waiver by such Lender or otherwise, the circumstances
entitling the Company to require such assignment and delegation cease to apply.
SECTION 2.20 Extensions of Termination Date; Removal of
Lenders. (a) The Company may, by written notice to the Administrative Agent
(a "Notice of Extension") given not less than 60 nor more than 90 days prior to
the then effective Termination Date, advise the Lenders that it requests an
extension of the then effective Termination Date (such then effective
Termination Date being the "Existing Termination Date") by 364 calendar days,
effective on the Existing Termination
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Date. The Administrative Agent will promptly, and in any event within five
Business Days of the receipt of such Notice of Extension, notify the Lenders of
the contents of each such Notice of Extension.
(b) Each Notice of Extension shall (i) be irrevocable and (ii)
constitute a representation by the Company that (A) neither any Event of Default
nor any Default has occurred and is continuing, and (B) the representations and
warranties contained in Article IV are correct on and as of the then effective
Termination Date, as though made on and as of such date (unless any
representation and maturity expressly relates to an earlier date).
(c) In the event a Notice of Extension is given to the Administrative
Agent as provided in Section 2.20(a) and the Administrative Agent notifies a
Lender of the contents thereof, such Lender shall on or before the 30th day next
preceding the Existing Termination Date advise the Administrative Agent in
writing whether or not such Lender consents to the extension requested thereby
and if any Lender fails so to advise the Administrative Agent, such Lender shall
be deemed to have not consented to such extension. If Lenders holding 80% or
more of the Total Commitment so consent (the "Consenting Lenders") to such
extension and any and all Lenders who have not consented (the "Non-Consenting
Lenders") are replaced, the Termination Date, and the Commitments of the
Consenting Lenders and the Nominees (as defined below) shall be automatically
extended 364 calendar days past the Existing Termination Date, effective on the
Existing Termination Date. The Administrative Agent shall promptly notify the
Company and all of the Lenders of each written notice of consent given pursuant
to this Section 2.20(c).
(d) Notwithstanding any provision of this Section 2.20 to the
contrary, each Bank that has expressly consented to an extension of the
Termination Date, may in its sole and absolute discretion at any time prior to
the Existing Termination Date give the Administrative Agent written notice that
such Lender has revoked its consent to such extension of the Existing
Termination Date (a "Notice of Revocation"). Each Notice of Revocation shall be
irrevocable. Upon receipt of any Notice of Revocation, the Administrative Agent
will promptly notify the Company and the Lender of the content of each Notice of
Revocation and the Termination Date for such Lender shall be the Existing
Termination Date.
(e) In the event the Consenting Lenders hold less than 100% of the
Total Commitment, the Consenting Lenders, or any of them, shall have the right
(but not the obligation) to assume all or any portion of the Non-Consenting
Lenders' Commitments by giving written notice to the Company and the
Administrative Agent of their election to do so on or before the 20th day next
preceding the Existing Termination Date, which notice shall be irrevocable and
shall constitute an undertaking to (i) assume, as of the close of business on
the Existing Termination Date, all or such portion of the Commitments of the
Non-Consenting Lenders, as the case may be, as may be specified in such written
notice, and (ii) purchase (without recourse) from the Non-Consenting Lenders, at
the close of business on the Existing Termination Date, the Revolving Credit
Exposures outstanding on the Existing Termination Date that correspond to the
portion of the Commitments to be so assumed at a price equal to the sum of (x)
the unpaid principal amount of all Loans so purchased, plus (y) the aggregate
amount, if any, previously funded by the transferor or any participations so
purchased, plus (z) all accrued and unpaid interest thereon. Such Commitments
and Revolving Credit Exposures, or portion thereof, to be assumed and purchased
by Consenting Lenders shall be allocated among those Consenting Lenders who have
so elected to assume the same
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pro rata in accordance with the respective Commitments of such Consenting
Lenders as of the Existing Termination Date (provided, however, in no event
shall a Consenting Lender be required to assume and purchase an amount or
portion of the Commitments and Revolving Credit Exposures of the Non-Consenting
Lenders in excess of the amount which such Consenting Lender agreed to assume
and purchase pursuant to the immediately preceding sentence) or on such other
basis as such Consenting Lender shall agree. The Administrative Agent shall
promptly notify the Company and the other Consenting Lenders in the event it
receives any notice from a Consenting Lender pursuant to this Section 2.20(e).
(f) In the event that the Consenting Lenders shall not elect as
provided in Section 2.20(e) to assume and purchase all of the Non-Consenting
Lenders' Commitments and Revolving Credit Exposures, the Company may designate,
by written notice to the Administrative Agent and the Consenting Lenders given
on or before the tenth day next preceding the Existing Termination Date, one or
more Eligible Assignees not a party to this Agreement (individually, a "Nominee"
and collectively, the "Nominees") to assume all or any portion of the
Non-Consenting Lenders' Commitments not to be assumed by the Consenting Lenders
and to purchase (without recourse) from the Non-Consenting Lenders all Revolving
Credit Exposures outstanding at the close of business on the Existing
Termination Date that corresponds to the portion of the Commitments so to be
assumed at the price specified in Section 2.20(e). Each assumption and purchase
under this Section 2.20(f) shall be effective as of the close of business on the
Existing Termination Date when each of the following conditions has been
satisfied in a manner satisfactory to the Administrative Agent:
(i) each Nominee and the Non-Consenting Lenders have executed an
Assignment and Acceptance pursuant to which such Nominee shall (A) assume
in writing its share of the obligations of the Non-Consenting Lenders
hereunder, including its share of the Commitments of the Non-Consenting
Lenders and (B) agree to be bound as a Lender by the terms of this
Agreement; and
(ii) each Nominee shall have completed and delivered to the
Administrative Agent an Administrative Questionnaire.
(g) In the event that the Consenting Lenders shall not elect as
provided in Section 2.20(e) to assume all of the Non-Consenting Lenders'
Commitments and the Company shall not have effectively designated one or more
Nominees to assume the Commitments of and purchase the Revolving Credit
Exposures of the Non-Consenting Lenders as contemplated by Section 2.20(f),
there shall be no extension of the Existing Termination Date.
ARTICLE III.
CONDITIONS PRECEDENT
SECTION 3.01 Conditions Precedent to the Initial Borrowing. The
obligation of each Lender to make its initial Loan is subject to the following
conditions:
(a) The Administrative Agent shall have received the following, each
dated the initial Borrowing Date, except for the Loan Documents described in
clauses (i) through (v) below which shall be dated the Execution Date:
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(i) this Agreement executed by each party hereto;
(ii) if requested by any Lender, a Revolving Note and a Competitive
Note executed by the Company and payable to the order of such Lender;
(iii)a certificate of an officer and of the secretary or an assistant
secretary of the General Partner, certifying, inter alia, (A) true and
complete copies of each of the certificate of incorporation, as amended and
in effect, of the General Partner, the partnership agreement, as amended
and in effect, of the Company, the bylaws, as amended and in effect, of the
General Partner and the resolutions adopted by the Board of Directors of
the General Partner (1) authorizing the execution, delivery and performance
by the Company of this Agreement and the other Loan Documents to which it
is or will be a party and the Borrowings to be made hereunder, (2)
approving the forms of the Loan Documents to which it is a party and which
will be delivered at or prior to the initial Borrowing Date and (3)
authorizing officers of the General Partner to execute and deliver the Loan
Documents to which the Company is or will be a party and any related
documents, including any agreement contemplated by this Agreement, (B) the
incumbency and specimen signatures of the officers of the General Partner
executing any documents on its behalf and (C) (1) that the representations
and warranties made by the Company in each Loan Document to which the
Company is a party and which will be delivered at or prior to the initial
Borrowing Date are true and correct in all material respects, (2) the
absence of any proceedings for the dissolution or liquidation of the
Company and (3) the absence of the occurrence and continuance of any
Default or Event of Default;
(iv) a letter from CT Corporation System, Inc. in form and substance
satisfactory to the Administrative Agent evidencing the obligation of CT
Corporation System, Inc. to accept service of process in the State of New
York on behalf of the Company;
(v) a favorable, signed opinion addressed to the Administrative Agent
and the Lenders from Morrison & Hecker L.L.P., counsel to the Company,
given upon the express instruction of the Company; and
(vi) certificates of appropriate public officials as to the existence,
good standing and qualification to do business as a foreign partnership of
the Company in each jurisdiction in which the ownership of its properties
or the conduct of its business requires such qualification and where the
failure so to qualify would, individually or collectively, have a Material
Adverse Effect.
(b) The Administrative Agent shall be reasonably satisfied that all
required consents and approvals of any applicable Governmental Authority and any
other Person in connection with the transactions contemplated by this Section
3.01 shall have been obtained and remain in effect (except where the failure to
obtain such approvals would not have a Material Adverse Effect), and all
applicable waiting periods shall have expired (or been waived) without any
action being taken by any Governmental Authority.
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(c) All agreements relating to, and the organizational structure of,
the Company and the Subsidiaries, and all organic documents of the Company and
the Subsidiaries, shall be reasonably satisfactory to the Administrative Agent
and the Syndication Agent.
(d) The Company shall have paid to First Union Capital Markets Corp.,
Banc of America Securities LLC, the Administrative Agent and the Syndication
Agent all fees and expenses pursuant to the Fee Letter agreed upon by such
parties to be paid on or prior to the Execution Date.
(e) The Existing Credit Agreement shall have been terminated and all
amounts outstanding thereunder paid in full.
(f) The Company shall have paid to Andrews & Kurth L.L.P. pursuant to
Section 9.03 all reasonable fees and disbursements invoiced to the Company on or
prior to the Execution Date.
SECTION 3.02 Conditions Precedent to All Borrowings. The
obligation of the Lenders to make any Loan (including any Loan on the initial
Borrowing Date) is subject to the further conditions precedent that on the date
of such Borrowing:
(a) The conditions precedent set forth in Section 3.01 shall have
theretofore been satisfied;
(b) The representations and warranties set forth in Article IV and in
the other Loan Documents shall be true and correct in all material respects as
of, and as if such representations and warranties were made on, the date of the
proposed Loan (unless such representation and warranty expressly relates to an
earlier date), and the Company shall be deemed to have certified to the
Administrative Agent and the Lenders that such representations and warranties
are true and correct in all material respects by the Company's delivery of a
Borrowing Request;
(c) The Company shall have complied with the provisions of Section
2.03 or Section 2.04, as the case may be;
(d) No Default or Event of Default shall have occurred and be
continuing or would result from such Borrowing; and
(e) The Administrative Agent and the Lenders shall have received such
other approvals, opinions or documents as the Administrative Agent or the
Required Lenders may reasonably request.
The acceptance of the benefits of each Borrowing shall constitute a
representation and warranty by the Company to each of the Lenders that all of
the conditions specified in this Section 3.02 above exist as of that time.
SECTION 3.03 Conditions Precedent to Conversions. The obligation
of the Lenders to convert or continue any existing Borrowing as or into a
Eurodollar Borrowing is subject to the condition precedent that on the date of
such conversion or continuation no Default or Event of Default shall have
occurred and be continuing or would result from the making of such
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conversion. The acceptance of the benefits of each such conversion or
continuation shall constitute a representation and warranty by the Company to
each of the Lenders that no Default or Event of Default shall have occurred and
be continuing or would result from the making of such conversion or
continuation.
SECTION 3.04 Delivery of Documents. All of the Loan Documents,
certificates, legal opinions and other documents and papers referred to in this
Article III, unless otherwise specified, shall be delivered to the
Administrative Agent for the account of each of the Lenders and, except for any
Notes, in sufficient counterparts or copies for each of the Lenders and shall be
satisfactory in form and substance to the Lenders.
ARTICLE IV.
REPRESENTATIONS AND WARRANTIES
In order to induce the Lenders to enter into this Agreement and to
make the Loans provided for herein, the Company makes, on or as of the Effective
Date and the occurrence of each Borrowing, the following representations and
warranties to the Administrative Agent and the Lenders:
SECTION 4.01 Organization and Qualification. The Company and each
of the Subsidiaries (a) is a corporation, partnership or limited liability
company duly organized or formed, validly existing and in good standing under
the laws of the state of its incorporation, organization or formation, (b)
has all requisite corporate, partnership, limited liability company or other
power to own its property and to carry on its business as now conducted and (c)
is duly qualified to do business and is in good standing in every jurisdiction
in which the failure to be so qualified would, individually or together with
all such other failures of the Company and the Subsidiaries, have a Material
Adverse Effect. As of the Execution Date, the Persons and other entities named
in Schedule 4.01 are all of the Subsidiaries of the Company, and such Schedule
4.01 (x) accurately reflects (i) the direct owner of the Capital Stock of each
such Subsidiary and (ii) the percentage of the issued and outstanding Capital
Stock of each such Subsidiary owned by such direct owner, (y) accurately
identifies such Subsidiaries and (z) accurately sets forth the jurisdictions
of their respective incorporation, organization or formation, as the case may
be, and jurisdictions in which they are qualified as foreign corporations,
foreign partnerships, foreign limited liability companies or other foreign
entities to do business.
SECTION 4.02 Authorization, Validity, Etc. The Company has all
requisite partnership or other power and authority to execute, deliver and
perform its obligations hereunder and under the other Loan Documents to which
it is a party and to make the Borrowings hereunder, and all such action has
been duly authorized by all necessary partnership proceedings on its part. This
Agreement and the other Loan Documents have been duly and validly executed and
delivered by or on behalf of the Company and constitute valid and legally
binding agreements of the Company enforceable against the Company in accordance
with the respective terms thereof, except (a) as may be limited by
bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer,
fraudulent conveyance or other similar laws relating to or affecting the
enforcement of creditors' rights generally, and by general principles of
equity (including principles of good faith, reasonableness, materiality and
fair dealing) which may, among other things, limit the right to obtain equitable
remedies (regardless of whether considered in a proceeding in equity or at law)
and (b) as to the
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enforceability of provisions for indemnification for violation of applicable
securities laws, limitations thereon arising as a matter of law or public
policy.
SECTION 4.03 Governmental Consents, Etc. No authorization, consent,
approval, license or exemption of or registration, declaration or filing
with any Governmental Authority, is necessary for the valid execution, delivery
or performance by the Company of any Loan Document to which it is a party,
except those that have been obtained and such matters relating to performance as
would ordinarily be done in the ordinary course of business after the Execution
Date.
SECTION 4.04 Conflicting or Adverse Agreements or Restrictions.
Neither the Company nor any of the Subsidiaries is a party to any contract or
agreement or subject to any restriction that would reasonably be expected to
have a Material Adverse Effect. Neither the execution, delivery and performance
by the Company of the Loan Documents to which it is a party, nor compliance
with the terms and provisions thereof, nor the extensions of credit contemplated
by the Loan Documents, (a) will breach or violate any applicable Requirement
of Law, (b) will result in any breach or violation of, any of the terms,
covenants, conditions or provisions of, or constitute a default under, or result
in the creation or imposition of (or the obligation to create or impose) any
Lien upon any of its property or assets (other than Liens created or
contemplated by this Agreement) pursuant to the terms of any indenture,
mortgage, deed of trust, agreement or other instrument to which it or any of the
Subsidiaries is party or by which any property or asset of it or any of
the Subsidiaries is bound or to which it is subject, except for breaches,
violations and defaults under clauses (a) and (b) that neither individually nor
in the aggregate for the Company could reasonably be expected to result in a
Material Adverse Effect or (c) will violate any provision of the organic
documents of the Company.
SECTION 4.05 Properties. (a) Each of the Company and the
Subsidiaries has good title to, or valid leasehold or other interests in, all
its real and personal property material to its business, except for minor
defects in title that do not materially interfere with its ability to conduct
its business as currently conducted or to utilize such properties for their
intended purposes.
(b) Each of the Company and the Subsidiaries owns, or is licensed to
use, all trademarks, trade names, copyrights, patents and other intellectual
property material to its business, and the use thereof by the Company and the
Subsidiaries does not infringe upon the rights of any other Person, except for
any such infringements that, neither individually nor in the aggregate for the
Company and such Subsidiaries, could reasonably be expected to result in a
Material Adverse Effect.
SECTION 4.06 Litigation and Environmental Matters. (a) There
are no actions, suits or proceedings by or before any arbitrator or
Governmental Authority pending against or, to the knowledge of the Company,
threatened against or affecting the Company or any of the Subsidiaries (i) as
to which there is a reasonable possibility of an adverse determination and
that, if adversely determined, could reasonably be expected, individually or in
the aggregate for the Company and such Subsidiaries, to result in a Material
Adverse Effect (other than the Disclosed Matters) or (ii) that involve this
Agreement or the Transactions.
(b) Except for the Disclosed Matters and except with respect to any
other matters that, individually or in the aggregate for the Company and the
Subsidiaries, could not reasonably be expected to result in a Material Adverse
Effect, neither the Company nor any of the Subsidiaries
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(i) has failed to comply with any Environmental Law or to obtain, maintain or
comply with any permit, license or other approval required under any
Environmental Law, (ii) has become subject to any Environmental Liability, (iii)
has received notice of any claim with respect to any Environmental Liability or
(iv) knows of any basis for any Environmental Liability.
(c) Since the Execution Date, there has been no change in the status
of the Disclosed Matters that, individually or in the aggregate, has resulted
in, or materially increased the likelihood of, a Material Adverse Effect.
SECTION 4.07 Financial Statements. (a) The consolidated and
consolidating balance sheets of the Company and its consolidated Subsidiaries
as at December 31, 1998 and the related consolidated and consolidating
statements of income, partners', shareholders' or members' equity and cash flow
of the Company and its consolidated Subsidiaries for the fiscal year ended on
said date, with (in the case of such consolidated financial statements)
the opinion thereon of PricewaterhouseCoopers LLP heretofore furnished to
the Lenders and the unaudited consolidated and consolidating balance sheets
of the Company and its consolidated Subsidiaries as at June 30, 1999 and their
related consolidated and consolidating statements of income, partners',
shareholders' or members' equity and cash flow of the Company and its
consolidated Subsidiaries for the six-month period ended on such date heretofore
furnished to the Lenders, are complete and correct in all material respects and
fairly present the consolidated financial condition of the Company and its
consolidated Subsidiaries as at said dates and the results of their operations
for the fiscal year and the six-month period ended on said dates, all in
accordance with GAAP, as applied on a consistent basis (subject, in the case of
the interim financial statements, to the absence of footnotes and to normal
year-end and audit adjustments).
(b) Since December 31, 1998, there has been no material adverse
change in the business, assets, operations or condition, financial or otherwise,
of the Company and the Subsidiaries, taken as a whole.
SECTION 4.08 Disclosure. The Company has disclosed to the Lenders
all agreements, instruments and corporate or other restrictions to which it
or any of the Subsidiaries is subject, and all other matters known to it, that,
individually or in the aggregate for the Company and such Subsidiaries, could
reasonably be expected to result in a Material Adverse Effect. None of the
reports, financial statements, certificates or other information furnished
by or on behalf of the Company to the Administrative Agent or any Lender in
connection with the syndication or negotiation of this Agreement or delivered
hereunder (as modified or supplemented by other information so furnished)
contains any material misstatement of fact or omits to state any material fact
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading.
SECTION 4.09 Investment Company Act. Neither the Company nor any of
the Subsidiaries is, or is regulated as, an "investment company," as such term
is defined in the Investment Company Act of 1940, as amended.
SECTION 4.10 Public Utility Holding Company Act. Neither
the Company nor any of the Subsidiaries is a non-exempt "holding company," or
subject to regulation as such, or an
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"affiliate" of a "holding company" or a "subsidiary company" of a "holding
company,"within the meaning of the Public Utility Holding Company Act of 1935,
as amended.
SECTION 4.11 ERISA. No ERISA Event has occurred or is reasonably
expected to occur that, when taken together with all other such ERISA
Events for which liability is reasonably expected to occur, could reasonably
be expected to result in a Material Adverse Effect. The present value of all
accumulated benefit obligations under each Plan (based on the assumptions used
for purposes of Statement of Financial Accounting Standards No. 87) did not,
as of the date of the most recent financial statements reflecting such amounts,
exceed by more than $5,000,000 the fair market value of the assets of such Plan,
and the present value of all accumulated benefit obligations of all underfunded
Plans (based on the assumptions used for purposes of Statement of Financial
Accounting Standards No. 87) did not, as of the date of the most recent
financial statements reflecting such amounts, exceed by more than $5,000,000
the fair market value of the assets of all such underfunded Plans.
SECTION 4.12 Tax Returns and Payments. (a) The Company and the
Subsidiaries have caused to be filed all federal income tax returns and other
material tax returns, statements and reports (or obtained extensions with
respect thereto) which are required to be filed and have paid or deposited or
made adequate provision in accordance with GAAP for the payment of all taxes
(including estimated taxes shown on such returns, statements and reports)
which are shown to be due pursuant to such returns, except where the failure
to pay such taxes (individually or in the aggregate for the Company and the
Subsidiaries) would not have a Material Adverse Effect. No material income
tax liability of the Company or the Subsidiaries has been asserted by the
Internal Revenue Service of the United States or any other Governmental
Authority for any taxes in excess of those already paid, except for taxes
which are being contested in good faith by appropriate proceedings and for
which adequate reserves in accordance with GAAP have been created on the books
of the Company and the Subsidiaries.
(b) The federal income tax liabilities, if any, of the Company and
the Subsidiaries (and of the General Partner) have been finally determined by
the Internal Revenue Service and satisfied for all taxable years through the
fiscal year ending in 1994.
SECTION 4.13 Compliance with Laws and Agreements. Each of the
Company and the Subsidiaries is in compliance with all laws, regulations
and orders of any Governmental Authority applicable to it or its property and
all indentures, agreements and other instruments binding upon it or its
property, except where the failure to do so, individually or in the aggregate
for the Company and the Subsidiaries, could not reasonably be expected to
result in a Material Adverse Effect. No Default or Event of Default has
occurred and is continuing.
SECTION 4.14 Purpose of Loans. (a) All proceeds of the Loans will be
used for the purposes set forth in Section 5.08.
(b) None of the proceeds of the loans under the Existing Credit
Agreement or this Agreement or any portion of the letters of credit issued or
outstanding under the Existing Credit Agreement were or will be used directly or
indirectly for the purpose of buying or carrying any "margin stock" within the
meaning of Regulation U (herein called "margin stock") or for the purpose of
reducing or retiring any indebtedness which was originally incurred to buy or
carry a margin stock,
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or for any other purpose which might constitute this transaction a "purpose"
credit within the meaning of Regulation T, U or X. Neither the Company nor any
agent acting on its behalf has taken or will take any action which might cause
this Agreement or any other Loan Document to violate Regulation T, Regulation U,
Regulation X, or any other regulation of the Board or to violate the Securities
Exchange Act of 1934. Margin stock does not constitute more than 25% of the
assets of the Company and the Company does not intend or foresee that it will
ever do so.
SECTION 4.15 Year 2000. The Company will use reasonable best efforts
to ensure that any reprogramming required to permit the proper functioning, in
and following the year 2000, of (a) the computer systems of the Company and the
Subsidiaries and (b) equipment of the Company and the Subsidiaries containing
embedded microchips and the testing of all such systems and equipment, as
reprogrammed, will be completed by December 31, 1999. The cost to the Company
and the Subsidiaries of such reprogramming and, to the knowledge of the Company,
of the reasonably foreseeable consequences of year 2000 to the Company and the
Subsidiaries, taken as a whole (including reprogramming errors) will not result
in an Event of Default or a Material Adverse Effect.
ARTICLE V.
AFFIRMATIVE COVENANTS
Until the Commitments have expired or been terminated and the
principal of and interest on each Loan and all fees payable hereunder shall have
been paid in full, the Company covenants and agrees with the Lenders that:
SECTION 5.01 Financial Statements and Other Information. The Company
will furnish to the Administrative Agent, in each case with sufficient copies
for each Lender:
(a) As soon as available and in any event within 120 days after the
end of each fiscal year of the Company: (i) the audited consolidated statements
of income, partners' equity and cash flows of the Company for such fiscal year,
and the related consolidated balance sheet of the Company as at the end of such
fiscal year, setting forth in each case in comparative form the figures for (or
in the case of the balance sheet, as of the end of) the previous fiscal year,
accompanied by the related opinion of independent public accountants of
recognized national standing reasonably acceptable to the Administrative Agent,
which opinion shall (x) state that said financial statements of the Company
fairly present the consolidated financial condition and results of operations of
the Company as at the end of, and for, such fiscal year and that such financial
statements have been prepared in accordance with GAAP except for such changes in
such principles with which the independent public accountants shall have
concurred, and (y) not contain a "going concern" or other adverse qualification
or exception unacceptable to the Required Lenders; and (ii) a certificate of
such accountants stating that, in making the examination necessary for their
opinion, they obtained no knowledge, except as specifically stated, of any Event
of Default or Default, and stating whether any change in GAAP or in the
application thereof has occurred since the date of the audited financial
statements referred to in Section 4.07(b) and, if any such change has occurred,
specifying the effect of such change on the financial statements accompanying
such certificate.
(b)(i) As soon as available and in any event within 60 days after the
end of each of the first three fiscal quarterly periods of each fiscal
year of the Company, unaudited
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consolidated statements of income, partners' equity and cash flows of the
Company for such period and for the period from the beginning of the
respective fiscal year to the end of such period, and the related
unaudited consolidated balance sheet as at the end of such period, setting
forth in each case in comparative form the figures for (or in the case of
balance sheets, as of the end of) the corresponding periods in the
previous fiscal year, accompanied by the certificate of a Responsible
Officer of the Company, which certificate shall state that said financial
statements fairly present the consolidated financial condition and results
of operations of the Company in accordance with GAAP, as at the end of,
and for, such period (subject to the absence of footnotes and changes
resulting from normal year-end audit adjustments).
(ii) As soon as available and in any event within 60 days after the
end of each of the first three fiscal quarterly periods of each fiscal
year, and within 120 days after the end of each fiscal year of OLP "A",
OLP "B", OLP "C", OLP "D" and each other Wholly-owned Subsidiary the
Capital Stock of which is owned directly by the Company, unaudited
consolidated statements of income, partners', shareholders' or members'
equity, as the case may be, and cash flows of such Person and the
Subsidiaries for such period and for the period from the beginning of the
respective fiscal year to the end of such period, and the related
unaudited consolidated balance sheet as at the end of such period, setting
forth in each case in comparative form the figures for (or in the case of
balance sheets, as of the end of) the corresponding periods in the
previous fiscal year, accompanied by the certificate of a Responsible
Officer of such Person, which certificate shall state that said financial
statements fairly present the consolidated and consolidating financial
condition and results of operations of such Person in accordance with
GAAP, as at the end of, and for, such period (subject to the absence of
footnotes and changes resulting from normal year-end audit adjustments).
(c) Promptly upon receipt thereof, and in the form received, all
audited and unaudited financial statements (whether quarterly or annual)
received by the Company from any Person (other than an individual) whose income
is accounted for through any of the Persons referenced in Section 5.01(b)(ii)
and whose EBITDA or distributions, as the case may be, exceed 25% of
Consolidated EBITDA.
(d) Prompt written notice of the following:
(i) the occurrence of any Default or Event of Default or Change in
Control Event;
(ii) the occurrence of any ERISA Event that, alone or together with
any other ERISA Events that have occurred, could reasonably be expected to
result in liability of the Company and the Subsidiaries in an aggregate
amount exceeding $5,000,000; and
(iii)any other development that results in, or could reasonably be
expected to result in, a Material Adverse Effect.
Each notice delivered under this Section 5.01 shall be accompanied by a
statement of a Responsible Officer setting forth the details of the event or
development requiring such notice and any action taken or proposed to be taken
with respect thereto.
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(e) Promptly upon receipt thereof, a copy of each other report or
letter submitted to the Company by independent accountants in connection with
any annual, interim or special audit made by them of the books of the Company,
and a copy of any response by the Company, or the Board of Directors of the
general partner of the Company, to such letter or report.
(f) Promptly upon its becoming available, each financial statement,
report, notice or proxy statement sent by the Company to stockholders generally
and each regular or periodic report and any registration statement or prospectus
filed by the Company with any securities exchange or the Securities and Exchange
Commission or any successor agency.
(g) Promptly after the furnishing thereof, copies of any statement,
report or notice furnished to any Person pursuant to the terms of any indenture,
loan or credit or other similar agreement, other than this Agreement and not
otherwise required to be furnished to the Administrative Agent pursuant to any
other provision of this Section 5.01.
(h) From time to time such other information regarding the business,
affairs or financial condition of the Company or any Subsidiary (including any
Plan or Multiemployer Plan and any reports or other information required to be
filed under ERISA) as the Required Lenders or the Administrative Agent may
reasonably request.
The Company will furnish to the Administrative Agent, at the time it furnishes
each set of financial statements pursuant to paragraph (a) or (b) above, a
certificate substantially in the form of Exhibit 5.01 executed by a Responsible
Officer of the Company (i) certifying as to the matters set forth therein and
stating that no Event of Default or Default has occurred and is continuing (or,
if any Event of Default or Default has occurred and is continuing, describing
the same in reasonable detail), (ii) setting forth in reasonable detail the
computations necessary to determine whether the Company is in compliance with
Sections 6.07(a) and (b), and (iii) a statement, with respect to each
Intercompany Note, of (A) the actual outstanding principal amount thereof, and
the amount of any accrued and unpaid interest thereon, as at the end of the
respective quarter or fiscal year, as the case may be, and (B) the highest and
lowest principal amount thereof at any time outstanding during such quarter or
fiscal year and the periods during such quarter or fiscal year during which the
principal of such Intercompany Note was outstanding in each such amount.
SECTION 5.02 Litigation. The Company shall promptly give to the
Administrative Agent notice of all legal or arbitral proceedings, and of
all proceedings before any Governmental Authority affecting the Company or any
Subsidiary, except proceedings which, if adversely determined, would not
have a Material Adverse Effect. The Company will, and will cause each of the
Subsidiaries to, promptly notify the Administrative Agent of any claim,
judgment, Lien or other encumbrance affecting any property or assets of the
Company or any such Subsidiary if the value of the claim, judgment, Lien, or
other encumbrance affecting such property or assets shall exceed $10,000,000.
SECTION 5.03 Existence, Conduct of Business. The Company will, and
will cause each of the Subsidiaries to, do or cause to be done all things
necessary to preserve, renew and keep in full force and effect its legal
existence and the rights, licenses, permits, privileges and
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franchises material to the conduct of its business; provided that the foregoing
shall not prohibit any merger, consolidation, liquidation or dissolution
permitted under Section 6.03.
SECTION 5.04 Payment of Obligations. The Company will, and will
cause each of the Subsidiaries to, pay its obligations, including tax
liabilities, that, if not paid, could result in a Material Adverse Effect before
the same shall become delinquent or in default, except where (a) the validity or
amount thereof is being contested in good faith by appropriate proceedings, (b)
the Company or such Subsidiary has set aside on its books adequate reserves with
respect thereto in accordance with GAAP and (c) the failure to make payment
pending such contest could not reasonably be expected to result in a Material
Adverse Effect.
SECTION 5.05 Maintenance of Properties; Insurance. The Company
will, and will cause each of the Subsidiaries to, (a) keep and maintain all
property material to the conduct of its business in good working order and
condition, ordinary wear and tear excepted, and (b) maintain, with financially
sound and reputable insurance companies, insurance in such amounts and against
such risks as are customarily maintained by companies engaged in the same or
similar businesses operating in the same or similar locations.
SECTION 5.06 Books and Records; Inspection Rights. The Company will,
and will cause each of the Subsidiaries to, keep proper books of record and
account in which full, true and correct entries are made of all dealings
and transactions in relation to its business and activities. The Company
will, and will cause each of the Subsidiaries to, permit any representatives
designated by the Administrative Agent or any Lender, upon reasonable prior
notice, to visit and inspect its properties, to examine and make extracts from
its books and records, and to discuss its affairs, finances and condition with
its officers and independent accountants, all at such reasonable times and as
often as reasonably requested.
SECTION 5.07 Compliance with Laws. The Company will, and will cause
each of the Subsidiaries to, comply with all Requirements of Law applicable to
it or its property, except where the failure to do so, individually or in the
aggregate, could not reasonably be expected to result in a Material Adverse
Effect.
SECTION 5.08 Use of Proceeds. The proceeds of the Loans will
be used only for (a) refinancing (i) amounts outstanding under the Existing
Credit Agreement, (ii) the SFPP First Mortgage Notes and/or the SFPP Revolving
Credit Facility, commercial paper back-up, and (b) working capital and other
partnership purposes. No part of the proceeds of any Loan has been or will be
used, whether directly or indirectly, for any purpose that entails a
violation of any of the Regulations of the Board, including Regulations T, U
and X.
SECTION 5.09 Further Assurances. The Company will cure promptly any
defects in the creation and issuance of any Notes and the execution and delivery
of this Agreement. The Company at its expense will promptly execute and deliver
to the Administrative Agent upon request all such other documents, agreements
and instruments to comply with or accomplish the covenants and agreements of the
Company in this Agreement and the other Loan Documents to which the Company is a
party.
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SECTION 5.10 Performance of Obligations. The Company will pay the
Loans according to the reading, tenor and effect thereof; and the Company will
do and perform every act and discharge all of the Obligations to be performed
and discharged by it under this Agreement, at the time or times and in the
manner specified.
SECTION 5.11 Lines of Business. The Company will, and will cause
each Subsidiary to, be and remain engaged in only those lines of business in
which the Company and such Subsidiaries are engaged on the date of this
Agreement, any additional lines of business reasonably related thereto, and
no others.
SECTION 5.12 Intercompany Notes. The Company will cause each
Subsidiary or each other Affiliate to execute a promissory note in favor of
the Company in an original principal amount equal to the actual amount from
time to time outstanding of Indebtedness of such Subsidiary or other Affiliate
to the Company (being the sum of the amounts specified pursuant to clause (i)
of the next sentence), and dated the Execution Date in the case of the
Subsidiaries (other than Subsidiaries which conduct no business, have minimal
assets and have no Indebtedness owing to the Company) on such date, in the case
of any other Subsidiary, the date such Person becomes a Subsidiary and in the
case of any other Affiliate, the first date on which any such Indebtedness
is incurred by such other Affiliate (collectively, the "Intercompany Notes").
The Company will maintain accounts in which it shall record (i) the amount of
the proceeds of each Loan, and each other amount, from time to time advanced to
such Subsidiary or such Affiliate; (ii) the interest rate applicable to such
advance or payment; and (iii) each payment of principal or interest made by such
Subsidiary or other Affiliate.
ARTICLE VI.
NEGATIVE COVENANTS
Until the Commitments have expired or terminated and the principal of
and interest on each Loan and all fees payable hereunder have been paid in full,
the Company covenants and agrees with the Lenders that:
SECTION 6.01 Indebtedness. The Company will not permit any Subsidiary
to create, incur, assume or permit to exist any Indebtedness, except:
(a) in the case of OLP "B", Indebtedness under the Companion
Credit Agreement;
(b) in the case of OLP "B", Indebtedness in respect of the Bonds;
(c) in the case of SFPP, Indebtedness in respect of the SFPP First
Mortgage Notes and Indebtedness under the SFPP Revolving Credit Facility not in
excess of $380,000,000 aggregate principal amount for all such Indebtedness at
any one time outstanding, but not any extension, refinancing, renewal or
refunding thereof, except (i) (x) with Indebtedness of SFPP owing solely to the
Company or (y) a refinancing of SFPP First Mortgage Notes solely with
Indebtedness incurred under the SFPP Revolving Credit Facility, or (ii) if the
Company shall furnish to the Administrative Agent an opinion of the Company's
independent public accountants to the effect that any such extension,
refinancing, renewal or refunding thereof solely with Indebtedness of SFPP
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owing to the Company as contemplated by clause (i) (x) above would cause an
acceleration of any tax liabilities of Burlington Northern Santa Fe Corporation
or any of its Affiliates under applicable federal tax law, then SFPP may
refinance, renew or refund not more than $190,000,000 of such Indebtedness with
unsecured Indebtedness owing to one or more Persons other than the Company;
(d) not in excess of $120,000,000 aggregate principal amount of
Indebtedness of Plantation Pipe Line at any time outstanding, if it becomes a
Subsidiary;
(e) in the case of any Person (other than Plantation Pipe Line) that
becomes a Subsidiary, Indebtedness existing at the time such Person becomes a
Subsidiary and not incurred in contemplation thereof (which for purposes of this
Agreement shall be deemed to be incurred at the time such Person becomes a
Subsidiary), Indebtedness assumed by any Subsidiary in connection with its
acquisition (whether by merger, consolidation or acquisition of all or
substantially all of the assets) of another Person and Indebtedness refinancing
(but not increasing) such Indebtedness, provided that at the time of and after
giving effect to the incurrence or assumption of such Indebtedness or
refinancing Indebtedness and the application of the proceeds thereof, as the
case may be, the aggregate principal amount of all such Indebtedness, and of all
Indebtedness previously incurred or assumed pursuant to this Section 6.01(e),
and then outstanding, shall not exceed 50% of Consolidated EBITDA for the period
of four full fiscal quarters of the Company and the Subsidiaries (and such
Person on a pro forma basis) then most recently ended in respect of which
financial statements shall have been delivered pursuant to Section 5.01(a) or
(b), as the case may be;
(f) Indebtedness of any Subsidiary to the Company; and
(g) in the case of any Subsidiary, Indebtedness not otherwise
permitted by Section 6.01(a), (b), (c), (d), (e) or (f), provided that at the
time of and after giving effect to the incurrence of such Indebtedness and the
application of the proceeds thereof the aggregate principal amount of all such
Indebtedness, and of all Indebtedness previously incurred pursuant to this
Section 6.01(g), and then outstanding, shall not exceed 25% of Consolidated
EBITDA for the period of four full fiscal quarters of the Company and the
Subsidiaries then most recently ended in respect of which financial statements
shall have been delivered pursuant to Section 5.01(a) or (b), as the case may
be;
provided, however, that no Subsidiary shall create, incur or assume any
indebtedness pursuant to any provision of this Section 6.01 if an Event of
Default shall have occurred and be continuing or would result from such
creation, incurrence or assumption.
SECTION 6.02 Liens. The Company will not, and will not permit any
Subsidiary to, create, incur, assume or permit to exist any Lien on any property
or asset now owned or hereafter acquired by it, or assign or sell any income or
revenues (including accounts receivable) or rights in respect of any thereof,
except:
(a) Permitted Encumbrances;
(b) any Lien on any property or asset of the Company or any
Subsidiary (i) existing on the date hereof and set forth in Schedule 6.02;
provided that (A) such Lien shall not extend to any other property or asset of
the Company or such Subsidiary and (B) such Lien shall
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secure only those obligations which it secures on the date hereof and (ii) any
Lien required to be created pursuant to Section 2.06(a), 2.06(k), 2.10 or 7.01
of the Companion Credit Agreement;
(c) Liens on properties or assets of SFPP securing the SFPP First
Mortgage Notes and the SFPP Revolving Credit Facility; and
(d) Liens existing on any property or asset prior to the acquisition
thereof by the Company or any Subsidiary or existing on any property or asset of
any Person that becomes a Subsidiary after the date hereof prior to the time
such Person becomes a Subsidiary and securing Indebtedness permitted by Sections
6.01(d) and/or (e) in an aggregate principal amount at any one time outstanding
not in excess of $100,000,000; provided that (i) such Lien is not created in
contemplation of or in connection with such acquisition or such Person becoming
a Subsidiary , as the case may be, (ii) such Lien shall not apply to any other
property or assets of the Company or any Subsidiary, (iii) such Lien shall
secure only those obligations which it secures on the date of such acquisition
or the date such Person becomes a Subsidiary, as the case may be, and
extensions, renewals and replacements thereof that do not increase the
outstanding principal amount thereof, and (iv) after giving effect to such
acquisition or such Person becoming a Subsidiary, the Indebtedness secured by
such Lien would be permitted by Section 6.01(e).
SECTION 6.03 Fundamental Changes. The Company will not, and will
not permit any Subsidiary to, merge into or consolidate with any other Person,
or permit any other Person to merge into or consolidate with it, or sell,
transfer, lease or otherwise dispose of (in one transaction or in a series of
transactions) all (or substantially all) of its assets, or all or substantially
all of the stock of or other equity interest in any of the Subsidiaries (in each
case, whether now owned or hereafter acquired), or liquidate or dissolve,
unless: (a) at the time thereof and immediately after giving effect thereto no
Event of Default or Default shall have occurred and be continuing and (b) if the
Company is involved in any such transaction the Company is the surviving entity
or the recipient of any such sale, transfer, lease or other disposition of
assets; provided, however, that in no event shall any such merger,
consolidation, sale, transfer, lease or other disposition whether or not
otherwise permitted by this Section 6.03, have the effect of releasing the
Company from any of its obligations and liabilities under this Agreement.
SECTION 6.04 Restricted Payments. The Company will not, and will not
permit any of the Subsidiaries to, declare or make, or agree to pay or make,
directly or indirectly, any Restricted Payment.
SECTION 6.05 Transactions with Affiliates. The Company will not,
and will not permit any of the Subsidiaries to, sell, lease or otherwise
transfer any property or assets to, or purchase, lease or otherwise acquire any
property or assets from, or otherwise engage in any other transactions with, any
of its Affiliates, except (a) in the ordinary course of business at prices
and on terms and conditions not less favorable to the Company or such
Subsidiary than could be obtained on an arm's-length basis from unrelated third
parties, (b) transactions between or among the Company and the Subsidiaries
not involving any other Affiliate, (c) any payment which would constitute a
Restricted Payment but for the proviso to the definition of said term in Section
1.01 and (d) loans and advances by the Company to the General Partner to enable
the General Partner to pay general and administrative costs and expenses
pursuant to the partnership agreement of the Company and in accordance with past
practices.
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SECTION 6.06 Restrictive Agreements. The Company will not, and
will not permit any of the Subsidiaries to, directly or indirectly, enter into,
incur or permit to exist any agreement or other arrangement that prohibits,
restricts or imposes any condition upon the ability of (a) any Subsidiary to
pay dividends or other distributions with respect to any shares of its Capital
Stock or to make or repay loans or advances to the Company or any other such
Subsidiary or to Guarantee Indebtedness of the Company or any other such
Subsidiary or (b) the Company or any Subsidiary to grant Liens to secure the
Obligations (except for any agreement or arrangement with respect to the assets
subject to the Liens permitted by Section 6.02(d) and except for Indebtedness
issued by the Company pursuant to an Indenture dated as of January 29, 1999
among the Company, as Issuer, the Guarantors named therein and U.S.Trust
Company of Texas, N.A., as Trustee thereunder); provided that the foregoing
shall not apply to (i) restrictions and conditions imposed by law or by this
Agreement or the Companion Credit Agreement, (ii) customary restrictions and
conditions contained in agreements relating to the sale of a Subsidiary pending
such sale, provided such restrictions and conditions apply only to the
Subsidiary that is to be sold and such sale is permitted hereunder, or (iii)
restrictions and conditions existing on the date hereof identified on Schedule
6.06 (but shall apply to any extension or renewal of, or any amendment or
modification expanding the scope of, any such restriction or condition) and (iv)
restrictions and conditions contained in the agreement pursuant to which the
SFPP First Mortgage Notes were issued and in the SFPP Revolving Credit Facility.
SECTION 6.07 Financial Covenants. The Company will observe each of
the following requirements:
(a) Ratio of Consolidated Indebtedness to Consolidated EBITDA. The
Company will not at any time permit the ratio of Consolidated Indebtedness to
Consolidated EBITDA for the four full fiscal quarters ended in respect of which
financial statements shall have been delivered pursuant to Section 5.01(a) or
(b), as the case may be, to exceed 4.00 to 1.0. For purposes of this Section
6.07(a), if during any period the Company acquires any Person (or any interest
in any Person) or all or substantially all of the assets of any Person, the
EBITDA attributable to such assets or an amount equal to the percentage of
ownership of the Company in such Person times the EBITDA of such Person, for
such period determined on a pro forma basis (which determination, in each case,
shall be subject to approval of the Required Lenders, not to be unreasonably
withheld) may be included as Consolidated EBITDA for such period, if on the date
of such acquisition no Indebtedness (other than Indebtedness permitted pursuant
to Section 6.01) is incurred by reason of and giving effect to such acquisition
and such Person, or the entity acquiring such assets, as the case may be, is a
Subsidiary.
(b) Ratio of Consolidated EBITDA to Consolidated Interest Expense.
The Company will not at any time permit the ratio of Consolidated EBITDA for the
four full fiscal quarters then most recently ended in respect of which financial
statements shall have been delivered pursuant to Section 5.01(a) or (b), as the
case may be, to Consolidated Interest Expense for such four full fiscal quarters
to be less than 3.50 to 1.0.
SECTION 6.08 Amendments to Certain Agreements. The Company will not
and will not permit any Subsidiary to amend its partnership agreement or
operating agreement or in the case of SFPP, the SFPP Revolving Credit Facility,
the SFPP First Mortgage Notes or the Note
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Agreement pursuant to which such First Mortgage Notes were issued, in each case,
in any manner that could reasonably be expected to be adverse to the Lenders.
ARTICLE VII.
EVENTS OF DEFAULT
SECTION 7.01 Events of Default and Remedies. If any of the
following events ("Events of Default") shall occur and be continuing:
(a) the principal of any Loan shall not be paid when and as the same
shall become due and payable, whether at the due date thereof or at a date fixed
for prepayment thereof or otherwise;
(b) any interest on any Loan or any fee or any other amount (other
than an amount referred to in clause (a) of this Article) payable under this
Agreement or any other Loan Document shall not be paid, when and as the same
shall become due and payable, and such failure shall continue unremedied for a
period of three days;
(c) any representation or warranty made or, for purposes of Article
III, deemed made by or on behalf of the Company herein, at the direction of the
Company or by the Company in any other Loan Document or in any document,
certificate or financial statement delivered in connection with this Agreement
or any other Loan Document shall prove to have been incorrect in any material
respect when made or deemed made or reaffirmed, as the case may be;
(d) the Company shall fail to observe or perform any covenant,
condition or agreement contained in Section 5.01(d)(iii), 5.03 (with respect to
the Company's existence) or 5.08 or in Article VI;
(e) the Company shall fail to perform or observe any other term,
covenant or agreement contained in this Agreement (other than those specified in
Section 7.01(a), Section 7.01(b) or Section 7.01(d)) or any other Loan Document
to which it is a party and, in any event, such failure shall remain unremedied
for 30 calendar days after the earlier of (i) written notice of such failure
shall have been given to the Company by the Administrative Agent or any Lender
or, (ii) an officer of the Company becomes aware of such failure;
(f) other than as specified in Section 7.01(a) or (b), (i) the
Company or any Subsidiary fails to make (whether as primary obligor or as
guarantor or other surety) any payment of principal of, or interest or premium,
if any, on any item or items of Indebtedness (other than as specified in Section
7.01(a) or Section 7.01(b)) or any payment in respect of any Hedging Agreement
beyond any period of grace provided with respect thereto (not to exceed 30
days); provided that the aggregate outstanding principal amount of all
Indebtedness or payment obligations in respect of all Hedging Agreements as to
which such a payment default shall occur and be continuing is equal to or
exceeds $5,000,000, or (ii) the Company or any Subsidiary fails to duly observe,
perform or comply with any agreement with any Person or any term or condition of
any instrument, if such failure, either individually or in the aggregate, shall
have caused or shall have the ability to cause the acceleration of the payment
of Indebtedness with an aggregate face amount which is equal to or exceeds
$5,000,000; provided that this Section 7.01(f) shall not apply to secured
Indebtedness that
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becomes due as a result of the voluntary sale or transfer of the property or
assets securing such Indebtedness so long as such Indebtedness is paid in full
when due;
(g) an involuntary case shall be commenced or an involuntary petition
shall be filed seeking (i) liquidation, reorganization or other relief in
respect of the Company or any Subsidiary or its debts, or of a substantial part
of its assets, under any Federal, state or foreign bankruptcy, insolvency,
receivership or similar law now or hereafter in effect or (ii) the appointment
of a receiver, trustee, custodian, sequestrator, conservator or similar official
for the Company or any Subsidiary or for a substantial part of its assets, and,
in any such case, such proceeding or petition shall continue undismissed for 60
days or an order or decree approving or ordering any of the foregoing shall be
entered;
(h) the Company, or any Subsidiary shall (i) voluntarily commence any
proceeding or file any petition seeking liquidation, winding-up, reorganization
or other relief under any Federal, state or foreign bankruptcy, insolvency,
receivership or similar law now or hereafter in effect, (ii) consent to the
institution of, or fail to contest in a timely and appropriate manner, any
proceeding or petition described in Section 7.01(g), (iii) apply for or consent
to the appointment of a receiver, trustee, custodian, sequestrator, conservator
or similar official for the Company or any Subsidiary or for a substantial part
of its assets, (iv) file an answer admitting the material allegations of a
petition filed against it in any such proceeding, (v) make a general assignment
for the benefit of creditors or (vi) take any action for the purpose of
effecting any of the foregoing;
(i) the Company or any Subsidiary shall become unable, admit in
writing or fail generally to pay its debts as they become due;
(j) the General Partner fails to make (whether as primary obligator
or as guarantor or other surety) any payment of principal of, or interest or
premium, if any, on any item or items of Indebtedness beyond any period of grace
provided with respect thereto (not to exceed 30 days); provided that the
aggregate outstanding principal amount of all such Indebtedness as to which such
a payment default shall occur and be continuing is equal to or exceeds
$10,000,000;
(k) one or more judgments for the payment of money in an aggregate
amount in excess of $10,000,000 shall be rendered against the Company, any
Subsidiary or any combination thereof and the same shall remain undischarged for
a period of 30 consecutive days during which execution shall not be effectively
stayed, or any action shall be legally taken by a judgment creditor to attach or
levy upon any assets of the Company or any Subsidiary to enforce any such
judgment;
(l) an ERISA Event shall have occurred that, in the opinion of the
Required Lenders, when taken together with all other ERISA Events that have
occurred, could reasonably be expected to result in liability of the Company and
the Subsidiaries in an aggregate amount exceeding (i) $5,000,000 in any year or
(ii) $10,000,000 for all periods;
then, and in any such event, and at any time thereafter, if any Event of Default
shall then be continuing, the Administrative Agent, may, and upon the written
request of the Required Lenders shall, by written notice (including notice sent
by telecopy) to the Company (a "Notice of Default") take any or all of the
following actions, without prejudice to the rights of the Administrative Agent,
any Lender or other holder of any of the Obligations to enforce its claims
against the Company
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(provided that, if an Event of Default specified in Section 7.01(g) or Section
7.01(h) shall occur with respect to the Company or any Subsidiary, the result of
which would occur upon the giving of a Notice of Default as specified in clauses
(i) and (ii) below, shall occur automatically without the giving of any Notice
of Default): (i) declare the Total Commitment terminated, whereupon the
Commitments of the Lenders shall forthwith terminate immediately and any accrued
facility fees shall forthwith become due and payable without any other notice of
any kind; (ii) declare the principal of and any accrued interest in respect of
all Loans, and all the other Obligations owing hereunder and under the other
Loan Documents, to be, whereupon the same shall become, forthwith due and
payable without presentment, demand, notice of demand or of dishonor and
nonpayment, protest, notice of protest, notice of intent to accelerate,
declaration or notice of acceleration or any other notice of any kind, all of
which are hereby waived by the Company; and (iii) exercise any rights or
remedies under the Loan Documents.
SECTION 7.02 Other Remedies. Upon the occurrence and during the
continuance of any Event of Default, the Administrative Agent, acting at
the request of the Required Lenders, may proceed to protect and enforce its
rights, either by suit in equity or by action at law or both, whether for the
specific performance of any covenant or agreement contained in this Agreement
or in any other Loan Document or in aid of the exercise of any power granted in
this Agreement or in any other Loan Document; or may proceed to enforce the
payment of all amounts owing to the Administrative Agent and the Lenders under
the Loan Documents and interest thereon in the manner set forth herein or
therein; it being intended that no remedy conferred herein or in any of the
other Loan Documents is to be exclusive of any other remedy, and each and every
remedy contained herein or in any other Loan Document shall be cumulative and
shall be in addition to every other remedy given hereunder and under the other
Loan Documents now or hereafter existing at law or in equity or by statute or
otherwise.
SECTION 7.03 Application of Moneys During Continuation of Event of
Default. (a) So long as an Event of Default of which the Administrative Agent
shall have given notice to the Lenders shall continue, all moneys received by
the Administrative Agent from the Company under the Loan Documents shall, except
as otherwise required by law, be distributed by the Administrative Agent on the
dates selected by the Administrative Agent (individually, a "Distribution Date"
and collectively, the "Distribution Dates") as follows:
first, to payment of the unreimbursed expenses for which the
Administrative Agent or any Lender is to be reimbursed pursuant to
Section 9.03 and unpaid fees owing to the Administrative Agent
pursuant to the Fee Letter;
second, to the ratable payment of accrued but unpaid interest on
the Obligations;
third, to the ratable payment of unpaid principal of the
Obligations;
fourth, to the ratable payment of all other amounts payable by the
Company hereunder;
fifth, to the ratable payment of all other Obligations, until all
Obligations shall have been paid in full; and
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finally, to payment to the Company, or its successors or assigns, or
as a court of competent jurisdiction may direct, of any surplus then
remaining from such proceeds.
(b) The term "unpaid" as used in this Section 7.03 shall mean all
Obligations outstanding as of a Distribution Date as to which prior
distributions have not been made, after giving effect to any adjustments which
are made pursuant to Section 9.09 of which the Administrative Agent shall have
been notified.
ARTICLE VIII.
THE ADMINISTRATIVE AGENT
SECTION 8.01 Appointment, Powers and Immunities. Each Lender
hereby irrevocably appoints and authorizes the Administrative Agent to act as
its agent hereunder and under the other Loan Documents with such powers as are
specifically delegated to the Administrative Agent by the terms of this
Agreement and such other Loan Documents, together with such other powers as are
reasonably incidental thereto. The Administrative Agent (which term as used in
this sentence and in Section 8.05 and the first sentence of Section 8.06 shall
include reference to its Affiliates and its Affiliates' officers, directors,
employees, attorneys, accountants, experts and agents): (a) shall have no duties
or responsibilities except those expressly set forth in the Loan Documents, and
shall not by reason of the Loan Documents be a trustee or fiduciary for any
Lender; (b) makes no representation or warranty to any Lender and shall not be
responsible to the Lenders for any recitals, statements, representations or
warranties contained in this Agreement, or in any certificate or other document
referred to or provided for in, or received by any of them under, this
Agreement, or for the value, validity, effectiveness, genuineness, execution,
legality, enforceability or sufficiency of this Agreement, any other Loan
Document or any other document referred to or provided for herein or therein
or for any failure by the Company or any other Person (other than the
Administrative Agent) to perform any of its obligations hereunder or thereunder
or for the existence or value of, or the perfection or priority of any Lien
upon, any collateral security or the financial or other condition of the
Company, the Subsidiaries or any other obligor or guarantor; (c) except pursuant
to Section 8.07 shall not be required to initiate or conduct any litigation or
collection proceedings hereunder; and (d) shall not be responsible for any
action taken or omitted to be taken by it hereunder or under any other document
or instrument referred to or provided for herein or in connection herewith
including its own ordinary negligence, except for its own gross negligence,
willful misconduct or unlawful conduct. The Administrative Agent may employ
agents, accountants, attorneys and experts and shall not be responsible for
the negligence or misconduct of any such agents, accountants, attorneys or
experts selected by it in good faith or any action taken or omitted to be taken
in good faith by it in accordance with the advice of such agents, accountants,
attorneys or experts. The Administrative Agent may deem and treat the payee
named in any Note as the holder thereof for all purposes hereof unless and
until a written notice of the assignment or transfer thereof permitted hereunder
shall have been filed with the Administrative Agent. The Administrative Agent
is authorized to release any cash collateral that is permitted to be released
pursuant to the terms of this Agreement.
SECTION 8.02 Reliance by Administrative Agent. The Administrative
Agent shall be entitled to rely upon any certification, notice or other
communication (including any thereof by telephone, telex, telecopier, telegram
or cable) believed by it to be genuine and correct and to have been signed or
sent by or on behalf of the proper Person or Persons, and upon advice and
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statements of legal counsel, independent accountants and other experts selected
by the Administrative Agent in good faith.
SECTION 8.03 Defaults; Events of Default. The Administrative Agent
shall not be deemed to have knowledge of the occurrence of a Default or an Event
of Default (other than the non-payment of principal of or interest on Loans or
of fees) unless the Administrative Agent has received notice from a Lender or
the Company specifying such Default or Event of Default and stating that such
notice is a "Notice of Default." In the event that the Administrative Agent
receives such a notice of the occurrence of a Default or Event of Default, the
Administrative Agent shall give prompt notice thereof to the Lenders. In the
event of a payment Default or Event of Default, the Administrative Agent shall
give each Lender prompt notice of each such payment Default or Event of Default.
SECTION 8.04 Rights as a Lender. With respect to its Commitments
and the Loans made by it, First Union National Bank (and any successor acting as
Administrative Agent) in its capacity as a Lender hereunder shall have the same
rights and powers hereunder as any other Lender and may exercise the same as
though it were not acting as the Administrative Agent, and the term "Lender" or
"Lenders" shall, unless the context otherwise indicates, include the
Administrative Agent in its individual capacity. First Union National Bank (and
any successor acting as Administrative Agent) and its Affiliates may (without
having to account therefor to any Lender) accept deposits from, lend money
to and generally engage in any kind of banking, trust or other business with the
Company (and any of its Affiliates) as if it were not acting as the
Administrative Agent. First Union National Bank and its Affiliates may accept
fees and other consideration from the Company for services in connection
with this Agreement or otherwise without having to account for the same to the
Lenders.
SECTION 8.05 INDEMNIFICATION. THE LENDERS AGREE TO INDEMNIFY THE
ADMINISTRATIVE AGENT, THE SYNDICATION AGENT AND THE DOCUMENTATION AGENT
RATABLY IN ACCORDANCE WITH THEIR APPLICABLE PERCENTAGES FOR THE INDEMNITY
MATTERS AS DESCRIBED IN SECTION 9.03 TO THE EXTENT NOT INDEMNIFIED OR REIMBURSED
BY THE COMPANY UNDER SECTION 9.03, BUT WITHOUT LIMITING THE OBLIGATIONS OF THE
COMPANY UNDER SAID SECTION 9.03 AND FOR ANY AND ALL OTHER LIABILITIES,
OBLIGATIONS, LOSSES, DAMAGES, PENALTIES, ACTIONS, JUDGMENTS, SUITS, COSTS,
EXPENSES OR DISBURSEMENTS OF ANY KIND AND NATURE WHATSOEVER WHICH MAY BE IMPOSED
ON, INCURRED BY OR ASSERTED AGAINST THE ADMINISTRATIVE AGENT, THE SYNDICATION
AGENT OR THE DOCUMENTATION AGENT IN ANY WAY RELATING TO OR ARISING OUT OF: (A)
THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT CONTEMPLATED BY OR REFERRED TO
HEREIN OR THE TRANSACTIONS CONTEMPLATED HEREBY, BUT EXCLUDING, UNLESS A DEFAULT
OR AN EVENT OF DEFAULT HAS OCCURRED AND IS CONTINUING, NORMAL ADMINISTRATIVE
COSTS AND EXPENSES INCIDENT TO THE PERFORMANCE OF ITS AGENCY DUTIES, IF ANY,
HEREUNDER OR (B) THE ENFORCEMENT OF ANY OF THE TERMS OF THIS AGREEMENT OR OF
ANY OTHER LOAN DOCUMENT; WHETHER OR NOT ANY OF THE FOREGOING SPECIFIED IN THIS
SECTION 8.05 ARISES FROM THE SOLE OR CONCURRENT NEGLIGENCE OF THE ADMINISTRATIVE
AGENT, THE SYNDICATION AGENT OR
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THE DOCUMENTATION AGENT, AS THE CASE MAY BE; PROVIDED THAT NO LENDER SHALL BE
LIABLE FOR ANY OF THE FOREGOING TO THE EXTENT THEY ARISE FROM THE GROSS
NEGLIGENCE, WILLFUL MISCONDUCT OR UNLAWFUL CONDUCT OF THE ADMINISTRATIVE AGENT,
THE SYNDICATION AGENT OR THE DOCUMENTATION AGENT.
SECTION 8.06 Non-Reliance on Agents and other Lenders. Each Lender
acknowledges and agrees that it has, independently and without reliance on the
Administrative Agent, the Syndication Agent, the Documentation Agent or any
other Lender, and based on such documents and information as it has deemed
appropriate, made its own credit analysis of the Company and the Subsidiaries
and its decision to enter into this Agreement, and that it will, independently
and without reliance upon the Administrative Agent, the Syndication Agent,
the Documentation Agent or any other Lender, and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
analysis and decisions in taking or not taking action under this Agreement.
Neither the Administrative Agent, the Syndication Agent nor the Documentation
Agent shall be required to keep itself informed as to the performance or
observance by the Company of this Agreement, the other Loan Documents or any
other document referred to or provided for herein or to inspect the properties
or books of the Company. Except for notices, reports and other documents and
information expressly required to be furnished to the Lenders by the
Administrative Agent hereunder, neither the Administrative Agent, the
Syndication Agent nor the Documentation Agent shall have any duty or
responsibility to provide any Lender with any credit or other information
concerning the affairs, financial condition or business of the Company (or
any of its Affiliates) which may come into the possession of the Administrative
Agent, the Syndication Agent, the Documentation Agent or any of its respective
Affiliates. In this regard, each Lender acknowledges that Andrews & Kurth L.L.P.
is acting in this transaction as special counsel to the Administrative
Agent only. Each Lender will consult with its own legal counsel to the
extent that it deems necessary in connection with this Agreement and other
Loan Documents and the matters contemplated herein and therein.
SECTION 8.07 Action by Administrative Agent. Except for action or
other matters expressly required of the Administrative Agent hereunder,
the Administrative Agent shall in all cases be fully justified in failing or
refusing to act hereunder unless it shall (a) receive written instructions from
the Required Lenders (or all of the Lenders as expressly required by Section
9.02) specifying the action to be taken, and (b) be indemnified to its
satisfaction by the Lenders against any and all liability and expenses which may
be incurred by it by reason of taking or continuing to take any such action.
The instructions of the Required Lenders (or all of the Lenders as expressly
required by Section 9.02) and any action taken or failure to act pursuant
thereto by the Administrative Agent shall be binding on all of the Lenders. If
a Default or Event of Default has occurred and is continuing, the Administrative
Agent shall take such action with respect to such Default or Event of Default as
shall be directed by the Required Lenders (or all of the Lenders as
required by Section 9.02) in the written instructions (with indemnities)
described in this Section 8.07; provided that, unless and until the
Administrative Agent shall have received such directions, the Administrative
Agent may (but shall not be obligated to) take such action, or refrain from
taking such action, with respect to such Default or Event of Default as it shall
deem advisable in the best interests of the Lenders. In no event, however, shall
the Administrative Agent be required to take any action which exposes the
Administrative Agent to personal liability or which is contrary to this
Agreement or applicable law.
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SECTION 8.08 Resignation or Removal of Administrative Agent.
Subject to the appointment and acceptance of a successor Administrative Agent
as provided below, the Administrative Agent may resign at any time by giving
notice thereof to the Lenders and the Company, and the Administrative Agent may
be removed at any time with or without cause by the Required Lenders. Upon any
such resignation or removal, the Required Lenders shall have the right to
appoint a successor Administrative Agent. If no successor Administrative Agent
shall have been so appointed by the Required Lenders and shall have accepted
such appointment within thirty (30) days after the retiring Administrative
Agent's giving of notice of resignation or the Required Lenders' removal
of the retiring Administrative Agent, then the retiring Administrative Agent
may, on behalf of the Lenders, appoint a successor Administrative Agent. Upon
the acceptance of such appointment hereunder by a successor Administrative
Agent, such successor Administrative Agent shall thereupon succeed to and become
vested with all the rights, powers, privileges and duties of the retiring
Administrative Agent, and the retiring Administrative Agent shall be discharged
from its duties and obligations hereunder. After any retiring Administrative
Agent's resignation or removal hereunder as Administrative Agent, the provisions
of this Article VIII and Section 9.03 shall continue in effect for its benefit
in respect of any actions taken or omitted to be taken by it while it was
acting as the Administrative Agent.
SECTION 8.09 Duties of Syndication Agent and Documentation
Agent. Notwithstanding the indemnity of the Syndication Agent and the
Documentation Agent contained in Section 8.05 and in Section 9.03, neither the
Syndication Agent nor the Documentation Agent shall have any duty,
responsibility or liability in such capacity with respect to the administration
or enforcement of this Agreement or any other Loan Document.
ARTICLE IX.
MISCELLANEOUS
SECTION 9.01 Notices, Etc. The Administrative Agent, any Lender
or the holder of any of the Obligations, giving consent or notice or making any
request of the Company provided for hereunder, shall notify each Lender
(in the case of the Administrative Agent) and the Administrative Agent (in the
case of a Lender) thereof. In the event that the holder of any Note or any of
the Obligations (including any Lender) shall transfer such Note or Obligations,
it shall promptly so advise the Administrative Agent which shall be entitled
to assume conclusively that no transfer of any Note or any of the Obligations
has been made by any holder (including any Lender) unless and until the
Administrative Agent receives written notice to the contrary. Except with
respect to notices and other communications expressly permitted to be given
by telephone, all notices, consents, requests, approvals, demands and other
communications (collectively "Communications") provided for herein shall be in
writing (including facsimile Communications) and mailed, telecopied or
delivered:
(a) if to the Company, to it at:
1301 McKinney Street, Suite 3400
Houston, Texas 77010
Attention:David G. Dehaemers, Jr.
Telecopy No: (713) 276-3704;
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(b) if to the Administrative Agent, to it at:
c/o First Union Securities, Inc.
1001 Fannin Street, Suite 2255
Houston, Texas 77002
Attention:Russell Clingman
Telecopy No.: (713)-650-6354;
(c) If to any other Lender, as specified on the signature page for
such Lender hereto or, in the case of any Person who becomes a Lender after the
date hereof, as specified on the Assignment and Acceptance executed by such
Person or in the Administrative Questionnaire delivered by such Person or, in
the case of any party hereto, such other address or telecopy number as such
party may hereafter specify for such purpose by notice to the other parties.
All Communications shall, when mailed, telecopied or delivered, be
effective when mailed by certified mail, return receipt requested to any party
at its address specified above, on the signature page hereof or on the signature
page of such Assignment and Acceptance (or other address designated by such
party in a Communication to the other parties hereto), or telecopied to any
party to the telecopy number set forth above, on the signature page hereof or on
the signature page of such Assignment and Acceptance (or other telecopy number
designated by such party in a Communication to the other parties hereto), or
delivered personally to any party at its address specified above, on the
signature page hereof or on the signature page of such Assignment and Acceptance
(or other address designated by such party in a Communication to the other
parties hereto); provided, however, Communications to the Administrative Agent
pursuant to Article II or Article VIII shall not be effective until received by
the Administrative Agent and Communications to the Administrative Agent pursuant
to Article II shall be at the Principal Office.
SECTION 9.02 Waivers; Amendments. (a) No failure or delay by the
Administrative Agent, or any Lender in exercising, and no course of dealing
with respect to, any right or power hereunder shall operate as a waiver thereof,
nor shall any single or partial exercise of any such right or power, or any
abandonment or discontinuance of steps to enforce such a right or power,
preclude any other or further exercise thereof or the exercise of any other
right or power. No notice to or demand on the Company in any case shall entitle
the Company to any other or further notice or demand in similar or other
circumstances. No waiver of any provision of this Agreement or consent to
any departure therefrom shall in any event be effective unless the same shall
be permitted by Section 9.02(b), and then such waiver or consent shall be
effective only in the specific instance and for the purpose for which given.
Without limiting the generality of the foregoing, the making of a Loan shall not
be construed as a waiver of any Default or Event of Default, regardless
of whether the Administrative Agent or any Lender may have had notice or
knowledge of such Default at the time.
(b) No provision of this Agreement or any other Loan Document
provision may be waived, amended or modified except pursuant to an agreement or
agreements in writing entered into by the Company and the Required Lenders or by
the Company and the Administrative Agent with the consent of the Required
Lenders; provided that no such agreement shall (i) increase the Commitment of
any Lender without the written consent of such Lender, (ii) reduce the principal
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amount of any Loan or reduce the rate of interest thereon, or reduce any fees
payable hereunder, without the written consent of each Lender affected thereby,
(iii) postpone the scheduled date of payment of the principal amount of any
Loan, or any interest thereon, or any fees payable hereunder, or reduce the
amount of, waive or excuse any such payment, or postpone the scheduled date of
expiration of any Commitment, without the written consent of each Lender
affected thereby, (iv) change Section 2.18(b) or (c) in a manner that would
alter the pro rata sharing of payments required thereby, without the written
consent of each Lender, or (v) change any of the provisions of this Section
9.02(b), Section 9.05 or the definition of "Required Lenders" or any other
provision hereof specifying the number or percentage of Lenders required to
waive, amend or modify any rights hereunder or make any determination or grant
any consent hereunder, without the written consent of each Lender (it being
understood that, with the consent of Required Lenders, additional extensions of
credit pursuant to this Agreement may be included in the determination of
"Required Lenders" and provisions relating to the pro rata sharing of payments
on substantially the same basis as the Revolving Loans and Commitments are
included on the Execution Date); provided further that no such agreement shall
amend, modify or otherwise affect the rights or duties of the Administrative
Agent hereunder without the prior written consent of the Administrative Agent.
SECTION 9.03 Payment of Expenses, Indemnities, etc. The Company
agrees:
(a) whether or not the transactions hereby contemplated are
consummated, pay all reasonable expenses of the Administrative Agent in the
administration (both before and after the execution hereof and including advice
of counsel as to the rights and duties of the Administrative Agent and the
Lenders with respect thereto) of, and in connection with the negotiation,
syndication, investigation, preparation, execution and delivery of, recording or
filing of, preservation of rights under, enforcement of, and refinancing,
renegotiation or restructuring of, the Loan Documents and any amendment, waiver
or consent relating thereto (including, without limitation, travel, photocopy,
mailing, courier, telephone and other similar expenses of the Administrative
Agent, the cost of environmental audits, surveys and appraisals at reasonable
intervals, the reasonable fees and disbursements of counsel and other outside
consultants for the Administrative Agent and, in the case of enforcement of this
Agreement and the other Loan Documents, the reasonable fees and disbursements of
counsel, including the allocated costs of inside counsel for the Administrative
Agent and each Lender); and promptly reimburse the Administrative Agent for all
amounts expended, advanced or incurred by the Administrative Agent or the
Lenders to satisfy any obligation of the Company under this Agreement.
(b) TO INDEMNIFY THE ADMINISTRATIVE AGENT, THE SYNDICATION AGENT, THE
DOCUMENTATION AGENT AND EACH LENDER AND EACH OF THEIR AFFILIATES AND EACH OF
THEIR OFFICERS, DIRECTORS, EMPLOYEES, REPRESENTATIVES, AGENTS, ATTORNEYS,
ACCOUNTANTS AND EXPERTS ("INDEMNIFIED PARTIES") FROM, HOLD EACH OF THEM HARMLESS
AGAINST AND PROMPTLY UPON DEMAND PAY OR REIMBURSE EACH OF THEM FOR, THE
INDEMNITY MATTERS WHICH MAY BE REASONABLY INCURRED BY OR ASSERTED AGAINST OR
INVOLVE ANY OF THEM (WHETHER OR NOT ANY OF THEM IS DESIGNATED A PARTY THERETO)
AS A RESULT OF, ARISING OUT OF OR IN ANY WAY RELATED TO (I) ANY ACTUAL OR
PROPOSED USE BY THE COMPANY OF THE PROCEEDS OF ANY OF THE LOANS, (II) THE
EXECUTION, DELIVERY AND PERFORMANCE OF THE LOAN DOCUMENTS, (III) THE OPERATIONS
OF THE
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BUSINESS OF THE COMPANY AND THE SUBSIDIARIES, (IV) THE FAILURE OF THE COMPANY OR
ANY SUBSIDIARY TO COMPLY WITH THE TERMS OF THIS AGREEMENT, OR WITH ANY
REQUIREMENT OF LAW, (V) ANY INACCURACY OF ANY REPRESENTATION OR ANY BREACH OF
ANY WARRANTY OF THE COMPANY SET FORTH IN ANY OF THE LOAN DOCUMENTS OR (VI) ANY
OTHER ASPECT OF THE LOAN DOCUMENTS, INCLUDING THE REASONABLE FEES AND
DISBURSEMENTS OF COUNSEL AND ALL OTHER EXPENSES INCURRED IN CONNECTION WITH
INVESTIGATING, DEFENDING OR PREPARING TO DEFEND ANY SUCH ACTION, SUIT,
PROCEEDING (INCLUDING ANY INVESTIGATIONS, LITIGATION OR INQUIRIES) OR CLAIM AND
INCLUDING ALL INDEMNITY MATTERS ARISING BY REASON OF THE ORDINARY NEGLIGENCE OF
ANY INDEMNIFIED PARTY, BUT EXCLUDING ALL INDEMNITY MATTERS ARISING SOLELY BY
REASON OF CLAIMS BETWEEN THE LENDERS OR ANY LENDER AND THE ADMINISTRATIVE AGENT,
THE SYNDICATION AGENT, OR THE DOCUMENTATION AGENT OR A LENDER'S SHAREHOLDERS
AGAINST THE ADMINISTRATIVE AGENT OR LENDER OR BY REASON OF THE GROSS NEGLIGENCE,
WILLFUL MISCONDUCT OR UNLAWFUL CONDUCT ON THE PART OF THE INDEMNIFIED PARTY
SEEKING INDEMNIFICATION.
(c) TO INDEMNIFY AND HOLD HARMLESS FROM TIME TO TIME THE INDEMNIFIED
PARTIES FROM AND AGAINST ANY AND ALL LOSSES, CLAIMS, COST RECOVERY ACTIONS,
ADMINISTRATIVE ORDERS OR PROCEEDINGS, DAMAGES AND LIABILITIES TO WHICH ANY SUCH
PERSON MAY BECOME SUBJECT (I) UNDER ANY ENVIRONMENTAL LAW APPLICABLE TO THE
COMPANY OR ANY SUBSIDIARY OR ANY OF THEIR PROPERTIES OR ASSETS, INCLUDING THE
TREATMENT OR DISPOSAL OF HAZARDOUS SUBSTANCES ON ANY OF THEIR PROPERTIES OR
ASSETS, (II) AS A RESULT OF THE BREACH OR NON-COMPLIANCE BY THE COMPANY OR ANY
SUBSIDIARY WITH ANY ENVIRONMENTAL LAW APPLICABLE TO THE COMPANY OR ANY
SUBSIDIARY, (III) DUE TO PAST OWNERSHIP BY THE COMPANY OR ANY SUBSIDIARY OF ANY
OF THEIR PROPERTIES OR ASSETS OR PAST ACTIVITY ON ANY OF THEIR PROPERTIES OR
ASSETS WHICH, THOUGH LAWFUL AND FULLY PERMISSIBLE AT THE TIME, COULD RESULT IN
PRESENT LIABILITY, (IV) THE PRESENCE, USE, RELEASE, STORAGE, TREATMENT OR
DISPOSAL OF HAZARDOUS SUBSTANCES ON OR AT ANY OF THE PROPERTIES OWNED OR
OPERATED BY THE COMPANY OR ANY SUBSIDIARY, OR (V) ANY OTHER ENVIRONMENTAL,
HEALTH OR SAFETY CONDITION IN CONNECTION WITH THE LOAN DOCUMENTS, PROVIDED,
HOWEVER, THAT NO INDEMNITY SHALL BE AFFORDED UNDER THIS SECTION 9.03(c) IN
RESPECT OF ANY PROPERTY OR ASSET FOR ANY OCCURRENCE ARISING FROM THE ACTS OR
OMISSIONS OF THE ADMINISTRATIVE AGENT OR ANY LENDER DURING THE PERIOD AFTER
WHICH SUCH PERSON, ITS SUCCESSORS OR ASSIGNS SHALL HAVE OBTAINED POSSESSION OF
SUCH PROPERTY OR ASSET (WHETHER BY FORECLOSURE OR DEED IN LIEU OF FORECLOSURE,
AS MORTGAGEE IN POSSESSION OR OTHERWISE).
(d) No Indemnified Party may settle any claim to be indemnified
without the consent of the indemnitor, such consent not to be unreasonably
withheld; provided, that the indemnitor may not reasonably withhold consent to
any settlement that an Indemnified Party
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proposes, if the indemnitor does not have the financial ability to pay all its
obligations outstanding and asserted against the indemnitor at that time,
including the maximum potential claims against the Indemnified Party to be
indemnified pursuant to this Section 9.03.
(e) In the case of any indemnification hereunder, the Administrative
Agent or Lender, as appropriate shall give notice to the Company of any such
claim or demand being made against the Indemnified Party and the Company shall
have the non-exclusive right to join in the defense against any such claim or
demand; provided that if the Company provides a defense, the Indemnified Party
shall bear its own cost of defense unless there is a conflict between the
Company and such Indemnified Party.
(f) THE FOREGOING INDEMNITIES SHALL EXTEND TO THE INDEMNIFIED PARTIES
NOTWITHSTANDING THE SOLE OR CONCURRENT NEGLIGENCE OF EVERY KIND OR CHARACTER
WHATSOEVER, WHETHER ACTIVE OR PASSIVE, WHETHER AN AFFIRMATIVE ACT OR AN
OMISSION, INCLUDING, ALL TYPES OF NEGLIGENT CONDUCT IDENTIFIED IN THE
RESTATEMENT (SECOND) OF TORTS OF ONE OR MORE OF THE INDEMNIFIED PARTIES OR BY
REASON OF STRICT LIABILITY IMPOSED WITHOUT FAULT ON ANY ONE OR MORE OF THE
INDEMNIFIED PARTIES. TO THE EXTENT THAT AN INDEMNIFIED PARTY IS FOUND TO HAVE
COMMITTED AN ACT OF GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OR ENGAGED IN
UNLAWFUL CONDUCT, THIS CONTRACTUAL OBLIGATION OF INDEMNIFICATION SHALL CONTINUE
BUT SHALL ONLY EXTEND TO THE PORTION OF THE CLAIM THAT IS DEEMED TO HAVE
OCCURRED BY REASON OF EVENTS OTHER THAN THE GROSS NEGLIGENCE, WILLFUL MISCONDUCT
OR UNLAWFUL CONDUCT OF THE INDEMNIFIED PARTY.
(g) The Company's obligations under this Section 9.03 shall survive
any termination of this Agreement and the payment of the Loans and shall
continue thereafter in full force and effect, for a period of six years.
(h) To the extent that the Company fails to pay any amount required
to be paid by it to the Administrative Agent under this Section 9.03, each
Lender severally agrees to pay to the Administrative Agent such Lender's
Applicable Percentage (determined as of the time that the applicable
unreimbursed expense or indemnity payment is sought) of such unpaid amount;
provided that the unreimbursed expense or indemnified loss, claim, damage,
liability or related expense, as the case may be, was incurred by or asserted
against the Administrative Agent in its capacity as such.
(i) The Company shall pay any amounts due under this Section 9.03
within thirty (30) days of the receipt by the Company of notice of the amount
due.
SECTION 9.04 Successors and Assigns. The provisions of this
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns permitted hereby. Nothing in
this Agreement, expressed or implied, shall be construed to confer upon any
Person (other than the parties hereto, their respective successors and assigns
permitted hereby and, to the extent expressly contemplated hereby, the Related
Parties of each of the
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Administrative Agent and the Lenders) any legal or equitable right, remedy or
claim under or by reason of this Agreement.
SECTION 9.05 Assignments and Participations.
(a) The Company may not assign its rights or obligations hereunder or
under the Notes without the prior consent of all of the Lenders and the
Administrative Agent.
(b) Any Lender may assign to one or more assignees all or a portion
of its rights and obligations under this Agreement (including all or a portion
of its Commitment and the Loans at the time owing to it); provided that (i)
except in the case of an assignment to a Lender or an Affiliate of a Lender,
each of the Company and the Administrative Agent must give their prior written
consent to such assignment (which consent shall not be unreasonably withheld),
(ii) except in the case of an assignment to a Lender or an Affiliate of a Lender
or an assignment of the entire remaining amount of the assigning Lender's
Commitment, the amount of the Commitment of the assigning Lender subject to each
such assignment (determined as of the date the Assignment and Acceptance with
respect to such assignment is delivered to the Administrative Agent) shall not
be less than $10,000,000 unless each of the Company and the Administrative Agent
otherwise consent, (iii) each partial assignment shall be made as an assignment
of a proportionate part of all the assigning Lender's rights and obligations
under this Agreement, (iv) the parties to each assignment shall execute and
deliver to the Administrative Agent an Assignment and Acceptance, together with
a processing and recordation fee of $3,500 for each such assignment (provided
that the processing and recordation fee for each assignment made by any Lender
party to this Agreement on the Execution Date shall be $2,000), and (v) the
assignee, if it shall not be a Lender, shall deliver to the Administrative Agent
an Administrative Questionnaire; provided further that any consent of the
Company otherwise required under this Section 9.05(b) shall not be required if
an Event of Default under Section 7.01(g) or Section 7.01(h) has occurred and is
continuing. Upon acceptance and recording pursuant to Section 9.05(d), from and
after the effective date specified in each Assignment and Acceptance, the
assignee thereunder shall be a party hereto and, to the extent of the interest
assigned by such Assignment and Acceptance, have the rights and obligations of a
Lender under this Agreement, and the assigning Lender thereunder shall, to the
extent of the interest assigned by such Assignment and Acceptance, be released
from its obligations under this Agreement (and, in the case of an Assignment and
Acceptance covering all of the assigning Lender's rights and obligations under
this Agreement, such Lender shall cease to be a party hereto but shall continue
to be entitled to the benefits of Sections 2.15, 2.16, 2.17 and 9.03). Any
assignment or transfer by a Lender of rights or obligations under this Agreement
that does not comply with this paragraph shall be treated for purposes of this
Agreement as a sale by such Lender of a participation in such rights and
obligations in accordance with Section 9.05(e).
(c) The Administrative Agent, acting for this purpose as an agent of
the Company, shall maintain at one of its offices in Charlotte, North Carolina a
copy of each Assignment and Acceptance delivered to it and a register for the
recordation of the names and addresses of the Lenders, and the Commitment of,
and principal amount of the Loans owing to, each Lender pursuant to the terms
hereof from time to time (the "Register"). The entries in the Register shall be
conclusive, and the Company, the Administrative Agent and the Lenders may treat
each Person whose name is recorded in the Register pursuant to the terms hereof
as a Lender hereunder for all purposes of this Agreement, notwithstanding notice
to the contrary. The Register shall be available
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for inspection by the Company and any Lender, at any reasonable time and from
time to time upon reasonable prior notice.
(d) Upon its receipt of a duly completed Assignment and Acceptance
executed by an assigning Lender and an assignee, the assignee's completed
Administrative Questionnaire (unless the assignee shall already be a Lender
hereunder), the processing and recordation fee referred to in Section 9.05(b)
and any written consent to such assignment required by Section 9.05(b), the
Administrative Agent shall accept such Assignment and Acceptance and record the
information contained therein in the Register. No assignment shall be effective
for purposes of this Agreement unless it has been recorded in the Register as
provided in this paragraph.
(e) Any Lender may, without the consent of the Company or the
Administrative Agent, sell participations to one or more banks or other entities
(a "Participant") in all or a portion of such Lender's rights and obligations
under this Agreement (including all or a portion of its Commitment and the Loans
owing to it); provided that (i) such Lender's obligations under this Agreement
shall remain unchanged, (ii) such Lender shall remain solely responsible to the
other parties hereto for the performance of such obligations and (iii) the
Company, the Administrative Agent and the other Lenders shall continue to deal
solely and directly with such Lender in connection with such Lender's rights and
obligations under this Agreement. Any agreement or instrument pursuant to which
a Lender sells such a participation shall provide that such Lender shall retain
the sole right to enforce this Agreement and to approve any amendment,
modification or waiver of any provision of this Agreement; provided that such
agreement or instrument may provide that such Lender will not, without the
consent of the Participant, agree to any amendment, modification or waiver
described in the first proviso to Section 9.02(b) that affects such Participant.
Subject to Section 9.05(f), the Company agrees that each Participant shall be
entitled to the benefits of Sections 2.15, 2.16 and 2.17 to the same extent as
if it were a Lender and had acquired its interest by assignment pursuant to
Section 9.05(b), and be indemnified under Section 9.03 as if it were a Lender.
In addition, each agreement creating any participation must include an agreement
by the Participant to be bound by the provisions of Section 9.12.
(f) A Participant shall not be entitled to receive any greater
payment under Section 2.15 or 2.17 than the applicable Lender would have been
entitled to receive with respect to the participation sold to such Participant,
unless the sale of the participation to such Participant is made with the
Company's prior written consent. A Participant that would be a Foreign Lender if
it were a Lender shall not be entitled to the benefits of Section 2.17 unless
the Company is notified of the participation sold to such Participant and such
Participant agrees, for the benefit of the Company, to comply with Section
2.17(e) as though it were a Lender.
(g) The Lenders may furnish any information concerning the Company in
the possession of the Lenders from time to time to assignees and Participants
(including prospective assignees and participants); provided that, such Persons
agree to be bound by the provisions of Section 9.12 hereof.
(h) Notwithstanding anything in this Section 9.05 to the contrary,
any Lender may assign and pledge its Notes to any Federal Reserve Bank or the
United States Treasury as collateral security pursuant to Regulation A and any
operating circular issued by such Federal Reserve System
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and/or such Federal Reserve Bank. No such assignment and/or pledge shall
release the assigning and/or pledging Lender from its obligations hereunder.
(i) Notwithstanding any other provisions of this Section 9.05, no
transfer or assignment of the interests or obligations of any Lender or any
grant of participations therein shall be permitted if such transfer, assignment
or grant would require the Company to file a registration statement with the SEC
or to qualify the Loans under the "Blue Sky" laws of any state.
SECTION 9.06 Survival; Reinstatement. (a) All covenants,
agreements, representations and warranties made by the Company herein and
in the certificates or other instruments delivered in connection with or
pursuant to this Agreement shall be considered to have been relied upon by the
other parties hereto and shall survive the execution and delivery of this
Agreement and the making of any Loans, regardless of any investigation made by
any such other party or on its behalf and notwithstanding that the
Administrative Agent or any Lender may have had notice or knowledge of any
Default or Event of Default or incorrect representation or warranty at the time
any credit is extended hereunder, and shall continue in full force and effect
as long as the principal of or any accrued interest on any Loan or any fee
or any other amount payable under this Agreement is outstanding and unpaid so
long as the Commitments have not expired or terminated. The provisions of
Sections 2.15, 2.16, 2.17 and 9.03 and Article VIII shall survive and remain in
full force and effect regardless of the consummation of the transactions
contemplated hereby, the repayment of the Loans, the expiration or termination
of the Commitments or the termination of this Agreement or any provision hereof.
(b) To the extent that any payments on the Obligations are
subsequently invalidated, declared to be fraudulent or preferential, set aside
or required to be repaid to a trustee, debtor in possession, receiver or other
Person under any bankruptcy law, common law or equitable cause, then to such
extent, the Obligations so satisfied shall be revived and continue as if such
payment or proceeds had not been received.
SECTION 9.07 Counterparts; Integration; Effectiveness. This
Agreement may be executed in counterparts (and by different parties hereto
on different counterparts), each of which shall constitute an original,
but all of which when taken together shall constitute a single contract. This
Agreement, the other Loan Documents and the Fee Letter constitute the entire
contract among the parties hereto relating to the subject matter hereof and
supersede any and all previous agreements and understandings, oral or written,
relating to the subject matter hereof (including the Information Memorandum).
Except as provided in Section 3.01, this Agreement shall become effective
when it shall have been executed by the Administrative Agent and when the
Administrative Agent shall have received counterparts hereof which, when
taken together, bear the signatures of each of the other parties hereto, and
thereafter shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns. Delivery of an executed counterpart
of a signature page of this Agreement by telecopy shall be effective as delivery
of a manually executed counterpart of this Agreement.
SECTION 9.08 Severability. Any provision of this Agreement held to be
invalid, illegal or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such invalidity, illegality or
unenforceability without affecting the validity, legality and
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enforceability of the remaining provisions hereof; and the invalidity of a
particular provision in a particular jurisdiction shall not invalidate such
provision in any other jurisdiction.
SECTION 9.09 Right of Setoff. If an Event of Default shall have
occurred and be continuing, each Lender is hereby authorized at any time and
from time to time, to the fullest extent permitted by law, to set off and apply
any and all deposits (general or special, time or demand, provisional or
final) at any time held and other indebtedness at any time owing by such Lender
to or for the credit or the account of the Company against any of and all the
Obligations now or hereafter existing under this Agreement and the other Loan
Documents held by such Lender, irrespective of whether or not such Lender shall
have made any demand under this Agreement and although such Obligations may be
unmatured. The rights of each Lender under this Section 9.09 are in addition to
other rights and remedies (including other rights of setoff) which such Lender
may have.
SECTION 9.10 Governing Law; Jurisdiction; Consent to Service of
Process.
(a) This Agreement and the other Loan Documents shall be construed in
accordance with and governed by the laws of the State of New York.
(b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT AND
THE OTHER LOAN DOCUMENTS MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK
OR OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF NEW YORK AND, BY EXECUTION
AND DELIVERY OF THIS AGREEMENT, EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY
ACCEPTS FOR ITSELF AND IN RESPECT OF ITS PROPERTY AND ASSETS, UNCONDITIONALLY,
THE NON-EXCLUSIVE JURISDICTION OF THE AFORESAID COURTS WITH RESPECT TO ANY SUCH
ACTION OR PROCEEDING. THE COMPANY HEREBY IRREVOCABLY DESIGNATES, APPOINTS AND
EMPOWERS CT CORPORATION SYSTEM, INC., WITH OFFICES ON THE DATE HEREOF AT 111 8TH
AVENUE, NEW YORK, NEW YORK 10011, AS ITS DESIGNEE, APPOINTEE AND AGENT TO
RECEIVE AND ACCEPT FOR AND ON ITS BEHALF, AND IN RESPECT OF ITS PROPERTY,
SERVICE OF ANY AND ALL LEGAL PROCESS, SUMMONS, NOTICES AND DOCUMENTS WHICH MAY
BE SERVED IN ANY SUCH ACTION OR PROCEEDING. IF FOR ANY REASON SUCH DESIGNEE,
APPOINTEE AND AGENT SHALL CEASE TO BE AVAILABLE TO ACT AS SUCH, THE COMPANY
AGREES TO DESIGNATE A NEW DESIGNEE, APPOINTEE AND AGENT IN NEW YORK, NEW YORK ON
THE TERMS AND FOR THE PURPOSES OF THIS PROVISION SATISFACTORY TO THE
ADMINISTRATIVE AGENT. THE COMPANY FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF
PROCESS OUT OF ANY OF THE AFOREMENTIONED COURTS IN ANY SUCH ACTION OR PROCEEDING
BY THE MAILING OF COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE
PREPAID, TO IT AT ITS ADDRESS PROVIDED IN SECTION 9.01, SUCH SERVICE TO BECOME
EFFECTIVE THIRTY DAYS AFTER SUCH MAILING. NOTHING HEREIN SHALL AFFECT THE RIGHT
OF THE ADMINISTRATIVE AGENT OR ANY LENDER TO SERVE PROCESS IN ANY OTHER MANNER
PERMITTED BY LAW OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST
THE COMPANY IN ANY OTHER JURISDICTION.
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(c) THE COMPANY HEREBY IRREVOCABLY WAIVES ANY OBJECTION WHICH IT MAY
NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY OF THE AFORESAID ACTIONS OR
PROCEEDINGS ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT BROUGHT IN THE
COURTS REFERRED TO IN CLAUSE (b) ABOVE AND HEREBY FURTHER IRREVOCABLY WAIVES, TO
THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, AND AGREES NOT TO PLEAD OR CLAIM
IN ANY SUCH COURT THAT ANY SUCH ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT
HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
(d) EACH PARTY HERETO HEREBY (I) IRREVOCABLY WAIVES, TO THE MAXIMUM
EXTENT PERMITTED BY LAW, ANY RIGHT IT MAY HAVE TO CLAIM OR RECOVER IN ANY SUCH
LITIGATION ANY SPECIAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES, OR DAMAGES
OTHER THAN, OR IN ADDITION TO, ACTUAL DAMAGES; (II) CERTIFIES THAT NO PARTY
HERETO NOR ANY REPRESENTATIVE OR AGENT OR COUNSEL FOR ANY PARTY HERETO HAS
REPRESENTED, EXPRESSLY OR OTHERWISE, OR IMPLIED THAT SUCH PARTY WOULD NOT, IN
THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVERS, AND (III)
ACKNOWLEDGES THAT IT HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE
TRANSACTIONS CONTEMPLATED HEREBY AND THEREBY BY, AMONG OTHER THINGS, THE MUTUAL
WAIVERS AND CERTIFICATIONS CONTAINED IN THIS SECTION 9.10.
SECTION 9.11 WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES,
TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A
TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER
BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES
THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED,
EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF
LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT
AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT
BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS
SECTION 9.11.
SECTION 9.12 Confidentiality. Each of the Administrative Agent and
the Lenders agrees to maintain the confidentiality of the Information (as
defined below), except that Information may be disclosed (a) to its Affiliates,
directors, officers and employees and to its agents, including accountants,
legal counsel and other advisors who have been informed of the confidential
nature of the information provided, (b) to the extent requested by any
regulatory authority, including the National Association of Insurance
Commissioners or any similar organization, or any nationally recognized
rating agency that requires access to information about a Lender's investment
portfolio, (c) to the extent a Lender reasonably believes it is required by
applicable laws or regulations or by any subpoena or similar legal process (and
such Lender will provide prompt notice thereof to the
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Company), (d) to any other party to this Agreement, (e) in connection with the
exercise of any remedies hereunder or any suit, action or proceeding relating to
this Agreement or any other Loan Document or the enforcement of rights hereunder
or thereunder, (f) subject to an understanding with such Person that such Person
will comply with this Section 9.12, to any assignee of or Participant in, or any
prospective assignee of or Participant in, any of its rights or obligations
under this Agreement, (g) with the consent of the Company or (h) to the extent
such Information (i) becomes publicly available other than as a result of a
breach of this Section 9.12 or (ii) becomes available to the Administrative
Agent or any Lender from a source other than the Company (unless such source is
actually known by the individual providing the information to be bound by a
confidentiality agreement or other legal or contractual obligation of
confidentiality with respect to such information). For the purposes of this
Section 9.12, "Information" means all information received from the Company
relating to the Company or its business, other than any such information that is
known to a Lender, publicly known or otherwise available to the Administrative
Agent or any Lender other than through disclosure (a) by the Company, or (b)
from a source actually known to a Lender to be bound by a confidentiality
agreement or other legal or contractual obligation of confidentiality with
respect to such information. Any Person required to maintain the confidentiality
of Information as provided in this Section 9.12 shall be considered to have
complied with its obligation to do so if such Person maintains the
confidentiality of such Information in accordance with procedures adopted in
good faith to protect confidential Information of third parties delivered to a
lender.
SECTION 9.13 Interest Rate Limitation. Notwithstanding anything
herein to the contrary, if at any time the interest rate applicable to any Loan,
together with all fees, charges and other amounts which are treated as
interest on such Loan under applicable law (collectively the "Charges"), shall
exceed the maximum lawful rate (the "Maximum Rate") which may be contracted for,
charged, taken, received or reserved by the Lender holding such Loan in
accordance with applicable law, the rate of interest payable in respect of such
Loan hereunder, together with all Charges payable in respect thereof, shall be
limited to the Maximum Rate and, to the extent lawful, the interest and Charges
that would have been payable in respect of such Loan but were not payable as a
result of the operation of this Section 9.13 shall be cumulated and the interest
and Charges payable to such Lender in respect of other Loans or periods shall
be increased (but not above the Maximum Rate therefor) until such cumulated
amount, together with interest thereon at the Federal Funds Effective Rate to
the date of repayment, shall have been received by such Lender.
SECTION 9.14 EXCULPATION PROVISIONS. EACH OF THE PARTIES HERETO
SPECIFICALLY AGREES THAT IT HAS A DUTY TO READ THIS AGREEMENT, THE NOTES AND
(IN THE CASE OF THE COMPANY, THE ADMINISTRATIVE AGENT AND THE SYNDICATION
AGENT) THE FEE LETTER AND AGREES THAT IT IS CHARGED WITH NOTICE AND KNOWLEDGE OF
THE TERMS OF THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS; THAT IT HAS IN FACT
READ THIS AGREEMENT AND IS FULLY INFORMED AND HAS FULL NOTICE AND KNOWLEDGE OF
THE TERMS, CONDITIONS AND EFFECTS OF THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS; THAT IT HAS BEEN REPRESENTED BY INDEPENDENT LEGAL COUNSEL OF ITS
CHOICE THROUGHOUT THE NEGOTIATIONS PRECEDING ITS EXECUTION OF THIS AGREEMENT
AND THE OTHER LOAN DOCUMENTS; AND HAS RECEIVED THE ADVICE OF ITS ATTORNEY IN
ENTERING INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS; AND THAT IT
RECOGNIZES THAT CERTAIN OF THE
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TERMS OF THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS RESULT IN ONE PARTY
ASSUMING THE LIABILITY INHERENT IN SOME ASPECTS OF THE TRANSACTION AND RELIEVING
THE OTHER PARTY OF ITS RESPONSIBILITY FOR SUCH LIABILITY. EACH PARTY HERETO
AGREES AND COVENANTS THAT IT WILL NOT CONTEST THE VALIDITY OR ENFORCEABILITY OF
ANY EXCULPATORY PROVISION OF THIS AGREEMENT ON THE BASIS THAT THE PARTY HAD NO
NOTICE OR KNOWLEDGE OF SUCH PROVISION OR THAT THE PROVISION IS NOT
"CONSPICUOUS."
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The parties hereto have caused this Agreement to be duly executed as
of the date and year first above written.
KINDER MORGAN ENERGY PARTNERS, L.P.,
as the Company
By: Kinder Morgan G.P., Inc.,
its General Partner
By: /s/ David G. Dehaemers, Jr.
______________________________________
Name: David G. Dehaemers, Jr.
Title: Vice President
Address for Notices:
1301 McKinney Street
Suite 3450
Houston, Texas 77010
Telecopier No.: (713) 844-9570
Telephone No.: (713) 844-9500
Attention: David G. Dehaemers, Jr.
Chief Executive Office and Principal Place
of Business:
1301 McKinney Street
Suite 3450
Houston, Texas 77010
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LENDER:
Commitment: $31,250,000 FIRST UNION NATIONAL BANK, as the
Administrative Agent and as a Lender
By: /s/ Russell T. Clingman
________________________________________
Russell T. Clingman
Vice President
Address for Notices:
First Union National Bank
301 South College Street, TW-10
Charlotte, North Carolina 28288-0608
Telecopier No.: (704) 383-0288
Telephone No.: (704) 383-0281
Attention: Syndication Agency Services
With copy to:
First Union Capital Markets Corp.
1001 Fannin, Suite 2255
Houston, Texas 77002
Telecopier No.: (713) 650-6354
Telephone No.: (713) 346-2703
Attention: Paul N. Riddle
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LENDER:
Commitment: $31,250,000 BANK OF AMERICA, N.A.
By: /s/ Michael J. Dillon
_______________________________________
Name: Michael J. Dillon
Title: Managing Director
Address for Notices:
Bank of America , N.A.
901 Main Street
Dallas, Texas 75202-3714
Telecopier No.: (214) 290-9462
Telephone No.: (214) 209-2119
Attention: Ramon Garcia
With copy to:
Bank of America, N.A.
333 Clay Street, Suite 4550
Houston, Texas 77002
Telecopier No.: (713) 651-4808
Telephone No.: (713) 651-4880
Attention: Pamela K. Rodgers
364-Day Facility
<PAGE>
LENDER:
Commitment: $20,000,000 BANK OF MONTREAL
By: /s/ Cahal B. Carmody
________________________________________
Name: Cahal B. Carmody
Title: Director
Address for Notices:
Bank of Montreal
700 Louisiana Street
Suite 4400
Houston, Texas 77002
Telecopier No.: (713) 223-4007
Telephone No.: (713) 546-9750
Attention: Cahal B. Carmody
364-Day Facility
<PAGE>
LENDER:
Commitment: $25,000,000 BANK ONE, NA
(Main Office - Chicago)
By: /s/ Joseph C. Giampetroni
_______________________________________
Name: Joseph C. Giampetroni
Title: Vice President
Address for Notices:
Bank One, NA
1 Bank One Plaza
Suite IL1-0634
Chicago, Illinois 60670
Telecopier No.: (312) 732-4840
Telephone No.: (312) 732-3659
Attention: John Beirne
With copy to:
BancOne Capital Markets
910 Travis Street, 6th Floor
Houston, Texas 77002
Telecopier No.: (713) 751-3982
Telephone No.: (713) 751-6174
Attention: Jeanie Harman
364-Day Facility
<PAGE>
LENDER:
Commitment: $20,000,000 BANKBOSTON, N.A.
By: /s/ Kristine A. Kasselman
_______________________________________
Name: Kristine A. Kasselman
Title: Managing Director
Address for Notices:
BankBoston, N.A.
100 Federal Street
MA BOS 01-0804
Boston, Massachusetts 02110
Telecopier No.: (617) 434-3652
Telephone No.: (617) 434-5472
Attention: Terrence Ronan
With copy to:
BankBoston, N.A.
100 Federal Street
01-08-02
Boston, Massachusetts 02110
Telecopier No.: (617) 434-9820
Telephone No.: (617) 434-9723
Attention: Ruth Sawyer
364-Day Facility
<PAGE>
LENDER:
Commitment: $25,000,000 BARCLAYS BANK PLC
By: /s/ Nicholas A. Bell
________________________________________
Name: Nicholas A. Bell
Title: Director-Loan Transactions Management
Address for Notices:
Barclays Bank PLC
222 Broadway, 8th Floor
New York, New York 10038
Telecopier No.: (212) 412-7585
Telephone No.: (212) 412-7584
Attention: J. Onischuk
With a copy to:
Barclays Bank PLC
222 Broadway, 11th Floor
New York, New York 10038
Telecopier No.: (212) 412-5308
Telephone No.: (212) 412-3710
Attention: Hema Divatia
364-Day Facility
<PAGE>
LENDER:
Commitment: $17,500,000 THE CHASE MANHATTAN BANK
By: /s/ Peter M. Ling
________________________________________
Name: Peter M. Ling
Title: Vice President
Address for Notices:
The Chase Manhattan Bank
270 Park Avenue, 21st Floor
New York, New York 10017-2070
Telecopier No.: (212) 270-3897
Telephone No.: (212) 270-4676
Attention: Peter Ling
With copy to:
The Chase Manhattan Bank
1 Chase Manhattan Plaza, 8th Floor
New York, New York 10081
Telecopier No.: (212) 552-5777
Telephone No.: (212) 552-7206
Attention: Tanya Mitchell-George
364-Day Facility
<PAGE>
LENDER:
Commitment: $17,500,000 CITIBANK, N.A.
By: /s/ J. Christopher Lyons
________________________________________
Name: J. Christopher Lyons
Title: Attorney-In-Fact
Address for Notices:
Citibank, N.A.
1200 Smith Street, Suite 2000
Houston, Texas 77002
Telecopier No.: (713) 654-2849
Telephone No.: (713) 654-2887
Attention: Steve Baillie
With copy to:
Citibank, N.A.
2 Penn's Way, Suite 250
New Castle, Delaware 19720
Telecopier No.: (302) 894-6120
Telephone No.: (302) 894-6084
Attention: David Chiu
364-Day Facility
<PAGE>
LENDER:
Commitment: $20,000,000 COMMERZBANK AKTIENGESELLSCHAFT,
NEW YORK BRANCH
By: /s/ Harry P. Yergey
________________________________________
Name: Harry P. Yergey
Title: SVP and Manager
By: /s/ W. David Suttles
________________________________________
Name: W. David Suttles
Title: Vice President
Address for Notices:
Commerzbank AG, Atlanta Agency
Prominade 2, Suite 3500
1230 Peachtree Street, NE
Atlanta, Georgia 30309
Telecopier No.: (404) 888-6539
Telephone No. (404) 888-6524
Attention: David Suttles
With a copy to:
Commerzbank AG, New York Branch
2 World Financial Center, 33rd Floor
New York, New York 10281-1050
Telecopier No.: (212) 266-7204
Telephone No.: (212) 266-7562
Attention: Dianne Morgenegg
364-Day Facility
<PAGE>
LENDER:
Commitment: $17,500,000 CREDIT LYONNAIS NEW YORK BRANCH
By: /s/ Phillippe Soustra
_________________________________________
Name: Phillippe Soustra
Title: Senior Vice President
Address for Notices:
Credit Lyonnais Houston Representative Office
1000 Louisiana, Suite 5360
Houston, Texas 77002
Telecopier No.: (713) 751-0307
Telephone No.: (713) 753-8734
Attention: Darrell Stanley
With a copy to:
Credit Lyonnais Houston Representative Office
1000 Louisiana, Suite 5360
Houston, Texas 77002
Telecopier No.: (713) 759-9766
Telephone No.: (713) 753-8723
Attention: Bernadette Archie
364-Day Facility
<PAGE>
LENDER:
Commitment: $17,500,000 PARIBAS
By: /s/ Marian Livingnston
_______________________________________
Name: Marian Livingston
Title: Vice President
By: /s/ Betsy Jocher
_______________________________________
Name: Betsy Jocher
Title: Vice President
Address for Notices:
Paribas
1200 Smith Street, Suite 3100
Houston, Texas 77002
Telecopier No.: (713) 659-6915
Telephone No.: (713) 659-4811
Attention: Marian Livingston
364-Day Facility
<PAGE>
LENDER:
Commitment: $27,500,000 SOCIETE GENERALE
By: /s/ Richard A. Gould
_______________________________________
Name: Richard A. Gould
Title: Director
Address for Notices:
Societe Generale
2001 Ross Avenue, Suite 4800
Dallas, Texas 75201
Telecopier No.: (214) 979-0171
Telephone No.: (214) 979-2769
Attention: Lia Guerra
With copy to:
Societe Generale
1111 Bagby, Suite 2020
Houston, Texas 77002
Telecopier No.: (713) 650-0824
Telephone No.: (713) 759-6324
Attention: Richard Gould
364-Day Facility
<PAGE>
LENDER:
Commitment: $12,500,000 SUNTRUST BANK, ATLANTA
By: /s/ Deborah S. Armstrong
_______________________________________
Name: Deborah S. Armstrong
Title: Vice President
Address for Notices:
SunTrust Bank, Atlanta
303 Peachtree Street, N.E.
Atlanta, Georgia 30308
Telecopier No.: (404) 827-6270
Telephone No.: (404) 658-4916
Attention: Steve Newby
With copy to:
SunTrust Bank, Atlanta
25 Park Place, 21st Floor M/C 1941
Atlanta, Georgia 30303
Telecopier No.: (404) 575-2730
Telephone No.: (404) 230-1939
Attention: Roshawn Orise
364-Day Facility
<PAGE>
LENDER:
Commitment: $17,500,000 WELLS FARGO BANK (TEXAS),
NATIONAL ASSOCIATION
By: /s/ J. Alan Alexander
___________________________________________
Name: J. Alan Alexander
Title: Vice President
Address for Notices:
Wells Fargo Bank (Texas), National Association
Energy Department
1000 Louisiana, Third Floor
Houston, Texas 77002
Telecopier No.: (713) 739-1087
Telephone No.: (713) 319-1368
Attention: J. Alan Alexander
With copy to:
Wells Fargo Bank
201 Third Street, 8th Floor
San Francisco, California 94103
Telecopier No.: (415) 979-0675
Telephone No.: (415) 477-5425
Attention: Stephen Eiring
364-Day Facility
<PAGE>
EXHIBIT 1.01A
FORM OF ADMINISTRATIVE QUESTIONNAIRE
Transaction: Kinder Morgan Energy Partners, L.P.
To: Nicole Ray, Syndications Agency Services
Fax No.: (704) 383-0288
1) Name of entity to appear on
Signature Page: __________________________________________
2) Name of person to receive Draft
Credit Agreement: __________________________________________
CREDIT OPERATIONS LEGAL
CONTACT CONTACT COUNSEL
_________________________________________________
Name: _________________________________________________
Title: _________________________________________________
Street Address:
(for courier): _________________________________________________
Telephone No.: _________________________________________________
Fax No.: _________________________________________________
PAYMENT INSTRUCTIONS
Via Fed Wire: _________________________________________________
(Name of Bank) (ABA #)
______
(Further Credit) (Attention) (Reference)
Ref.:________________________________________________
FIRST UNION PAYMENT INSTRUCTIONS
- -------------------------------------------------------------------------------
Pay to: First Union National Bank of North Carolina
ABA # 053 000 219
Charlotte, NC
Attention: Syndication Agency Services
R/C 5007 G/L #465906
Ref.: Kinder Morgan Energy Partners, L.P.
- -------------------------------------------------------------------------------
364-Day Facility
<PAGE>
EXHIBIT 1.01B
FORM OF ASSIGNMENT AND ACCEPTANCE
Dated: ________________
Reference is made to the Credit Agreement dated as of September 29, 1999
(as restated, amended, modified, supplemented and in effect from time to time,
the "Credit Agreement"), among Kinder Morgan Energy Partners, L.P., a Delaware
limited partnership (the "Company"), the Lenders named therein, First Union
National Bank, as the Administrative Agent (the "Administrative Agent"), Bank of
America, N.A., as the Syndication Agent (the "Syndication Agent") and Societe
Generale, as Documentation Agent (the "Documentation Agent"). Capitalized terms
used herein and not otherwise defined shall have the meanings assigned to such
terms in the Credit Agreement.
This Assignment and Acceptance, between the Assignor (as defined and set
forth in Schedule I hereto and made a part hereof) and the Assignee (as defined
and set forth on Schedule I hereto and made a part hereof) is dated as of the
Effective Date of Assignment (as set forth on Schedule I hereto and made a part
hereof).
1. The Assignor hereby irrevocably sells and assigns to the Assignee
without recourse to the Assignor, and the Assignee hereby irrevocably purchases
and assumes from the Assignor without recourse to the Assignor, as of the
Effective Date of Assignment, an undivided interest (the "Assigned Interest") in
and to all the Assignor's rights and obligations under the Credit Agreement
respecting those, and only those, credit facilities contained in the Credit
Agreement as set forth on Schedule I (collectively, the "Assigned Facilities",
individually, an "Assigned Facility"), in a principal amount for each Assigned
Facility as set forth on Schedule I.
2. The Assignor (i) makes no representation or warranty and assumes no
responsibility with respect to any statements, warranties or representations
made in or in connection with the Credit Agreement or any other Loan Document or
the execution, legality, validity, enforceability, genuineness, sufficiency or
value of the Credit Agreement, any other Loan Document or any other instrument
or document furnished pursuant thereto, other than that it is the legal and
beneficial owner of the Assigned Interest and that the Assigned Interest is free
and clear of any adverse claim; (ii) makes no representation or warranty and
assumes no responsibility with respect to the financial condition of the Company
or the Subsidiaries or the performance or observance by the Company or the
Subsidiaries of any of its obligations under the Credit Agreement, any other
Loan Document or any other instrument or document furnished pursuant thereto;
and (iii) attaches the Note if any, held by it evidencing the Assigned Facility
or Facilities, as the case may be, and requests that the Administrative Agent
exchange such Note(s) for a new Note payable to the Assignor (if the Assignor
has retained any interest in the Assigned Facility or Facilities) and a new Note
payable to the Assignee in the amount which reflects the assignment being made
hereby (and after giving effect to any other assignments which have become
effective on the Effective Date of Assignment).
364-Day Facility
<PAGE>
3. The Assignee (i) represents and warrants that it is legally authorized
to enter into this Assignment and Acceptance; (ii) confirms that it has received
a copy of the Credit Agreement, together with copies of the financial statements
referred to in Section 4.07 thereof, or if later, the most recent financial
statements delivered pursuant to Section 5.01 thereof, and such other documents
and information as it has deemed appropriate to make its own credit analysis;
(iii) agrees that it will independently and without reliance upon the
Administrative Agent, the Assignor or any other Lender and based on such other
documents and information as it shall deem appropriate at the time, continue to
make its own credit decisions in taking or not taking action under the Credit
Agreement; (iv) appoints and authorizes the Administrative Agent to take such
action as such agent on its behalf and to exercise such powers as are reasonably
incidental thereto; (v) agrees that it will be bound by the provisions of the
Credit Agreement and will perform in accordance with its terms all the
obligations which by the terms of the Credit Agreement are required to be
performed by it as a Lender; (vi) confirms that it is an Eligible Assignee;
(vii) if the Assignee is organized under the laws of a jurisdiction outside the
United States, attaches the forms prescribed by the Internal Revenue Services of
the United States certifying as to the Assignee's exemption from United States
withholding taxes with respect to all payments to be made to the Assignee under
the Credit Agreement or such other documents as are necessary to indicate that
all such payments are subject to such tax at a rate by an applicable tax treaty,
and (viii) has supplied the information requested on the administrative
questionnaire provided by the Administrative Agent.
4. Following the execution of this Assignment and Acceptance, it will be
delivered to the Administrative Agent for acceptance by it and the Company and
recording by the Administrative Agent pursuant to Section 9.05 of the Credit
Agreement, effective as of the Effective Date of Assignment (which Effective
Date of Assignment shall, unless otherwise agreed to by the Administrative
Agent, be at least five Business Days after the execution of this Assignment and
Acceptance).
5. Upon such acceptance and recording, from and after the Effective Date
of Assignment, the Administrative Agent shall make all payments in respect of
the Assigned Interest (including payments of principal, interest, fees and other
amounts) to the Assignee, whether such amounts have accrued prior to the
Effective Date of Assignment or accrue subsequent to the Effective Date of
Assignment. The Assignor and Assignee shall make all appropriate adjustments in
payments for periods prior to the Effective Date of Assignment by the
Administrative Agent or with respect to the making of this assignment directly
between themselves.
6. From and after the Effective Date of Assignment, (i) the Assignee shall
be party to the Credit Agreement and, to the extent provided in this Assignment
and Acceptance, have the rights and obligations of a Lender thereunder, and (ii)
the Assignor shall, to the extent provided in this Assignment and Acceptance,
relinquish its rights and be released from its obligations under the Credit
Agreement.
7. THIS ASSIGNMENT AND ACCEPTANCE SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
IN WITNESS WHEREOF, the parties hereto have caused this Assignment and
Acceptance to be executed by their respective duly authorized officers on
Schedule I hereto.
364-Day Facility
<PAGE>
Schedule I to Assignment and Acceptance
Legal Name of Assignor:________________________________________________
Legal Name of Assignee:________________________________________________
Effective Date of Assignment:__________________________________________
Percentage Assigned of Each
Facility (to at least 8
Principal decimals) (Shown as a
Assigned Facilities Amount of percentage of aggregate
Assigned held by all applicable
Interest Lenders)
Commitment $_________ _________%
Revolving Loans $_________ _________%
Competitive Loans $_________ _________%
Total $_________
364-Day Facility
<PAGE>
EXHIBIT 1.01-C
FORM OF COMPETITIVE NOTE
$300,000,000.00 _____________, _____
FOR VALUE RECEIVED, the undersigned, KINDER MORGAN ENERGY PARTNERS,
L.P., a Delaware limited partnership, (the "Company"), HEREBY PROMISES TO PAY to
the order of ________________________________ (the "Lender"), the lesser of (i)
$300,000,000 and (ii) the aggregate amount of Competitive Loans made by the
Lender and outstanding on the Termination Date. The principal amount of the
Competitive Loans made by the Lender to the Company shall be due and payable on
the dates and in the amounts as are specified in that certain Credit Agreement
dated as of September 29, 1999 (as restated, amended, modified, supplemented and
in effect from time to time, the "Credit Agreement") among the Company, the
Lender, certain other lenders that are party thereto, the Syndication Agent, the
Documentation Agent and First Union National Bank, as the Administrative Agent
for the Lender and such other lenders. All capitalized terms used herein and not
otherwise defined shall have the meanings as defined in the Credit Agreement.
The Company promises to pay interest on the unpaid principal amount of
each Competitive Loan outstanding from time to time from the date thereof until
such principal amount is paid in full, at such interest rates and payable on
such dates as are specified in the Credit Agreement. Both principal and interest
are payable in same day funds in lawful money of the United States of America to
the Administrative Agent at the Principal Office, or at such other place as the
Administrative Agent shall designate in writing to the Company.
This Note is one of the Competitive Notes referred to in, and this Note
and all provisions herein are entitled to the benefits of, the Credit Agreement.
The Credit Agreement, among other things (a) provides for the making of
Competitive Loans by the Lender and the other lenders to the Company from time
to time, and (b) contains provisions for acceleration of the maturity hereof
upon the happening of certain stated events, for prepayments on account of
principal hereof prior to the maturity hereof upon the terms and conditions
therein specified, and for limitations on the amount of interest paid such that
no provision of the Credit Agreement or this Note shall require the payment or
permit the collection of interest in excess of the Maximum Rate.
This Note may be held by the Lender for the account of its applicable
lending office and may be transferred from one lending office to another lending
office from time to time as the Lender may determine.
The Company and any and all endorsers, guarantors and sureties
severally waive grace, demand, presentment for payment, notice of dishonor,
default or intent to accelerate, protest and notice of protest and diligence in
collecting and bringing of suit against any party hereto, and agree to all
renewals, extensions or partial payments hereon and to any release or
substitution of security herefor, in whole or in part, with or without notice,
before or after maturity.
364-Day Facility
<PAGE>
This Note shall be governed by and construed under the laws of the
State of New York and the applicable laws of the United States of America.
KINDER MORGAN ENERGY PARTNERS, L.P.,
as the Company
By: Kinder Morgan G.P., Inc.,
its General Partner
By:_________________________________________
Name:
Title
364-Day Facility
<PAGE>
EXHIBIT 1.01-D
FORM OF REVOLVING NOTE
[$________________] _______________, ______
FOR VALUE RECEIVED, the undersigned, KINDER MORGAN ENERGY PARTNERS,
L.P., a Delaware limited partnership, (the "Company"), HEREBY PROMISES TO PAY to
the order of _______________________________________________________ (the
"Lender"), the lesser of (i) such Lender's Commitment and (ii) the aggregate
amount of Revolving Loans made by the Lender and outstanding on the Maturity
Date. The principal amount of the Revolving Loans made by the Lender to the
Company shall be due and payable on the dates and in the amounts as are
specified in that certain Credit Agreement dated as of September 29, 1999 (as
restated, amended, modified, supplemented and in effect from time to time, the
"Credit Agreement") among the Company, the Lender, certain other lenders that
are party thereto, the Syndication Agent, the Documentation Agent and First
Union National Bank, as Administrative Agent for the Lender and such other
lenders. All capitalized terms used herein and not otherwise defined shall have
the meanings as defined in the Credit Agreement.
The Company promises to pay interest on the unpaid principal amount of
each Revolving Loan outstanding from time to time from the date thereof until
such principal amount is paid in full, at such interest rates and payable on
such dates as are specified in the Credit Agreement. Both principal and interest
are payable in same day funds in lawful money of the United States of America to
the Administrative Agent at its Principal Office, or at such other place as the
Administrative Agent shall designate in writing to the Company.
This Note is one of the Revolving Notes referred to in, and this Note
and all provisions herein are entitled to the benefits of, the Credit Agreement.
The Credit Agreement, among other things (a) provides for the making of
Revolving Loans by the Lender and the other lenders to the Company from time to
time, and (b) contains provisions for acceleration of the maturity hereof upon
the happening of certain stated events, for prepayments on account of principal
hereof prior to the maturity hereof upon the terms and conditions therein
specified, and for limitations on the amount of interest paid such that no
provision of the Credit Agreement or this Note shall require the payment or
permit the collection of interest in excess of the Maximum Rate.
This Note may be held by the Lender for the account of its applicable
lending office and may be transferred from one lending office to another lending
office from time to time as the Lender may determine.
The Company and any and all endorsers, guarantors and sureties
severally waive grace, demand, presentment for payment, notice of dishonor,
default or intent to accelerate, protest and notice of protest and diligence in
collecting and bringing of suit against any party hereto, and agree to all
renewals, extensions or partial payments hereon and to any release or
substitution of security herefor, in whole or in part, with or without notice,
before or after maturity.
364-Day Facility
<PAGE>
This Note shall be governed by and construed under the laws of the
State of New York and the applicable laws of the United States of America.
KINDER MORGAN ENERGY PARTNERS, L.P.,
as the Company
By: Kinder Morgan G.P., Inc.,
its General Partner
By:________________________________________
Name:
Title:
364-Day Facility
<PAGE>
EXHIBIT 2.03
FORM OF BORROWING REQUEST
Dated __________
First Union National Bank,
as Administrative Agent
One First Union Center, TW-10
301 South College Street
Charlotte, North Carolina 28288-0608
Attn: Syndication Agency Services
Ladies and Gentlemen:
This Borrowing Request is delivered to you by Kinder Morgan Energy
Partners, L.P. (the "Company"), a Delaware limited partnership, under Section
2.03 of the Credit Agreement dated as of September 29, 1999, (as restated,
amended, modified, supplemented and in effect, the "Credit Agreement") by and
among the Company, the Lenders party thereto, First Union National Bank, as
Administrative Agent, Bank of America, N.A., as Syndication Agent, and Societe
Generale, as Documentation Agent.
1. The Company hereby requests that the Lenders make a Loan or Loans in
the aggregate principal amount of $______________ (the "Revolving Loan" or the
"Revolving Loans").1/
2. The Company hereby requests that the Revolving Loan or Revolving
Loans be made on the following Business Day:_____________________.2/
3. The Company hereby requests that the Revolving Loan or Revolving Loans
bear interest at the following interest rate, plus the Applicable Margin, as set
forth below:
Principal Maturity
Component Interest Date for
Type of of Interest Period Interest
Revolving Loan Revolving Rate (if Period (if
- -------------- Loan ---- applicable) applicable)
---- ----------- -----------
__________________
1 Complete with an amount in accordance with Section 2.03 of the Credit
Agreement.
2 Complete with a Business Day in accordance with Section 2.03 of the Credit
Agreement.
364-Day Facility
<PAGE>
4. The Company hereby requests that the funds from the Revolving Loan or
Revolving Loans be disbursed to the following bank account:
___________________________.
5. After giving effect to the requested Revolving Loan, the sum of the
Revolving Credit Exposures, plus the aggregate principal amount of Competitive
Loans outstanding as of the date hereof (including the requested Loans) does not
exceed the maximum amount permitted to be outstanding pursuant to the terms of
the Credit Agreement.
6. All of the conditions applicable to the Revolving Loans requested
herein as set forth in the Credit Agreement have been satisfied as of the date
hereof and will remain satisfied to the date of such Loans.
7. All capitalized undefined terms used herein have the meanings assigned
thereto in the Credit Agreement.
IN WITNESS WHEREOF, the undersigned have executed this Borrowing
Request this _____ day of _______________, ______.
KINDER MORGAN ENERGY PARTNERS, L.P.,
as the Company
By: Kinder Morgan G.P., Inc.,
its General Partner
By: __________________________________________
Name:
Title:
364-Day Facility
<PAGE>
EXHIBIT 2.04-A
FORM OF COMPETITIVE BID REQUEST
First Union National Bank,
as Administrative Agent
One First Union Center, TW-10
301 South College Street
Charlotte, North Carolina 28288-0608
Attention: Syndication Agency Services
Ladies and Gentlemen:
Reference is made to the Credit Agreement dated as of September 29,
1999 (as restated, amended, modified, supplemented and in effect from time to
time, the "Credit Agreement"), among the undersigned, the Lenders party thereto,
the Syndication Agent, the Documentation Agent and First Union National Bank, as
Administrative Agent. Capitalized terms used herein and not otherwise defined
herein shall have the meanings assigned to such terms in the Credit Agreement.
The undersigned hereby gives you notice pursuant to Section 2.04 of the Credit
Agreement that it requests a Competitive Borrowing under the Credit Agreement,
and in that connection sets forth below the terms on which such Competitive
Borrowing is requested to be made:
(A) Borrowing Date of Competitive
Borrowing (which is a Business Day) ________
(B) Aggregate Principal Amount of
Competitive Borrowing1/ _______________________
(C) Interest rate basis2/ _______________________
___________________
1 Not less than $25,000,000 or greater than the unused Total Commitment and
in integral multiples of $1,000,000.
2 Eurodollar Competitive Borrowing or Fixed Rate Borrowing.
364-Day Facility
<PAGE>
(D) Interest Period and the last
day thereof 3/ _________________________________
(E) Location and number of Company's account
to which funds are to be deposited
_________________________________
By the delivery of this Competitive Bid Request and the acceptance of
any or all of the Competitive Loans offered by the Lenders in response to this
Competitive Bid Request, the undersigned shall be deemed to have represented and
warranted that the applicable conditions to lending specified in Article III of
the Credit Agreement have been satisfied with respect to the Competitive
Borrowing requested hereby.
Very truly yours,
KINDER MORGAN ENERGY PARTNERS, L.P.,
as the Company
By: Kinder Morgan G.P., Inc.,
its General Partner
By:______________________________________
Name:
Title:
_____________________
3 Which shall have a duration (i) in the case of a Eurodollar Loan, of one,
two, three or six months and (ii) in the case of Fixed Rate Loan, not less
than seven days nor more than 180 days, and which, in either case, shall
end not later than the Termination Date.
364-Day Facility
<PAGE>
EXHIBIT 2.04-B
FORM OF NOTICE TO LENDERS OF COMPETITIVE BID REQUEST
[Name of Lender]
[Address of Lender]
[Date]
Attention:
Ladies and Gentlemen:
Reference is made to the Credit Agreement dated as of September 29,
1999 (as restated, amended, modified, supplemented and in effect from time to
time, the "Credit Agreement"), among Kinder Morgan Energy Partners, L.P. (the
"Company"), the Lenders party thereto, the Syndication Agent, the Documentation
Agent, and First Union National Bank, as Administrative Agent. Capitalized terms
used herein and not otherwise defined herein shall have the meanings assigned to
such terms in the Credit Agreement. The Company delivered a Competitive Bid
Request requesting a Competitive Bid on __________, , pursuant to Section
2.04(a) of the Credit Agreement, and in that connection you are invited to
submit a Competitive Bid by _________[Date]/[Time]________.1/ Your Competitive
Bid must comply with Section 2.04(b) of the Credit Agreement and the terms
set forth below on which the Competitive Bid Request was made:
(A) Date of Competitive Borrowing _________________________________
(B) Principal amount of
Competitive Borrowing _________________________________
(C) Interest rate basis
(i.e., Eurodollar or Fixed Rate) _________________________________
_____________________
1 The Competitive Bid must be receved by the Administrative Agent (i) in
the case of Eurodollar Loans, not later than 10:00 a.m. Charlotte, North
Carolina, time, three Business Days before the Borrowing Date of a proosed
Competitive Borrowing, and (ii) in the case of Fixed Rate Loans, not later
than 10:00 a.m., Charlotte, North Carolina, time on the Borrowing Date of a
proposed Competitive Borrowing.
364-Day Facility
<PAGE>
(D) Interest Period and the last
day thereof2/ _____________________________________
Very truly yours,
FIRST UNION NATIONAL BANK,
as Administrative Agent
By: _________________________________
Name: _______________________________
Title:_______________________________
___________________________
2
Which may not be a date later than the Termination Date.
364-Day Facility
2
<PAGE>
EXHIBIT 2.04-C
FORM OF COMPETITIVE BID
First Union National Bank,
as Administrative Agent
One First Union Center, TW-10
301 South College Street
Charlotte, North Carolina 28228-0608 [Date]
Attention: Syndication Agency Services
Ladies and Gentlemen:
The undersigned, [Name of Lender], refers to the Credit Agreement
dated as of [September 28], 1999 (as restated, amended, modified, supplemented
and in effect from time to time, the "Credit Agreement"), among Kinder Morgan
Energy Partners, L.P. (the "Company"), the Lenders party thereto, the
Syndication Agent, the Documentation Agent and First Union National Bank, as
Administrative Agent. Capitalized terms used herein and not otherwise defined
herein shall have the meanings assigned to such terms in the Credit Agreement.
The undersigned hereby makes a Competitive Bid pursuant to Section 2.04(b) of
the Credit Agreement, in response to the Competitive Bid Request made by the
Company on ________________,____, and in that connection sets forth below the
terms on which such Competitive Bid is made:
(A) Principal Amount 1/ ________________________________
(B) Competitive Bid Rate 2/ ________________________________
(C) Interest Period and
the last day thereof 3/ ________________________________
The undersigned hereby confirms that it is prepared to extend credit
to the Company upon acceptance by the Company of this bid in accordance with
Section 2.04(d) of the Credit Agreement.
Very truly yours,
[NAME OF BANK]
By: ________________________________________
Name:
Title:
______________________
1
Not less than $5,000,000 or greater than the requested Competitive
Borrowing and in integral multiples of $1,000,000 above said
$5,000,000. Multiple bids will be accepted by the Administrative
Agent.
2 i.e. LIBOR Rate + or - ______%, in the case of Eurodollar Loans,
or ____%, in the case of Fixed Rate Loan (in each case, expressed
in the form of a decimal to no more than four decimal places).
3 The Interest Period must be the Interest Period specified in the
Competitive Bid Request.
364-Day Facility
<PAGE>
EXHIBIT 2.07
FORM OF NOTICE OF ACCOUNT DESIGNATION
Dated ___________
First Union National Bank,
as Administrative Agent
One First Union Center, TW-10
301 South College Street
Charlotte, North Carolina 28288-0608
Attn: Syndication Agency Services
Ladies and Gentlemen:
This Notice of Account Designation is delivered to you by Kinder Morgan
Energy Partners, L.P. (the "Company"), a Delaware limited partnership, under
Section 2.07 of the Credit Agreement dated as of September 29, 1999 (as
restated, amended, modified, supplemented and in effect from time to time, the
"Credit Agreement") by and among the Company, the Lenders party thereto, First
Union National Bank, as Administrative Agent, Bank of America, N.A., as
Syndication Agent, and Societe Generale, as Documentation Agent.
The Administrative Agent is hereby authorized to disburse all Loan
proceeds into the following account(s):
[Insert name of bank/
ABA Routing Number/
and Account Number]
IN WITNESS WHEREOF, the undersigned has executed this Notice of Account
Designation this _____ day of ___________________, ____.
KINDER MORGAN ENERGY PARTNERS, L.P.,
as the Company
By: Kinder Morgan G.P., Inc.,
its General Partner
By: ___________________________________
Name:
Title:
364-Day Facility
<PAGE>
EXHIBIT 2.08
FORM OF INTEREST ELECTION REQUEST
Dated _____________
First Union National Bank,
as Administrative Agent
One First Union Center, TW-10
301 South College Street
Charlotte, North Carolina 28288-0608
Attn: Syndication Agency Services
Ladies and Gentlemen:
This irrevocable Interest Election Request (the "Request") is delivered to
you under Section 2.08 of the Credit Agreement dated as of September 29, 1999
(as restated, amended, modified, supplemented and in effect from time to time,
the "Credit Agreement"), by and among Kinder Morgan Energy Partners, L.P., a
Delaware limited partnership (the "Company"), the Lenders party thereto (the
"Lenders"), First Union National Bank, as Administrative Agent, Bank of America,
N.A., as Syndication Agent, and Societe Generale, as Documentation Agent.
1. This Interest Election Request is submitted for the purpose of:
(a) [Converting] [Continuing] a ____________ Revolving Loan [into]
[as] a ____________ Loan.1/
(b) The aggregate outstanding principal balance of such Revolving
Loan is $______________.
(c) The last day of the current Interest Period for such Revolving
Loan is _____________.2/
(d) The principal amount of such Revolving Loan to be [converted]
[continued] is $_____________.3/
___________________________
1
Delete the bracketed language and insert "Alternate Base Rate" or
"LIBOR Rate", as applicable, in each blank.
2
Insert applicable date for any Eurodollar Loan being converted or
continued.
3 Complete with an amount in compliance with Section 2.08 of the
Credit Agreement.
364-Day Facility
<PAGE>
(e) The requested effective date of the [conversion] [continuation]
of such Revolving Loan is _______________.4/
(f) The requested Interest Period applicable to the [converted]
[continued] Revolving Loan is ____________________.5/
2. No Default or Event of Default exists, and none will exist upon the
conversion or continuation of the Revolving Loan requested herein.
3. All capitalized undefined terms used herein have the meanings assigned
thereto in the Credit Agreement.
IN WITNESS WHEREOF, the undersigned has executed this Interest Election
Request this _____ day of ___________________, ____.
KINDER MORGAN ENERGY PARTNERS, L.P.,
as the Company
By: Kinder Morgan G.P., Inc.,
its General Partner
By:________________________________
Name:
Title:
____________________
4
Complete with a Business Day in compliance with Section 2.08 of
the Credit Agreement.
5
Complete for each Eurodollar Loan in compliance with the definition
of the term "Interest Period" specified in Section 1.01.
364-Day Facility
2
<PAGE>
EXHIBIT 2.11
FORM OF NOTICE OF PREPAYMENT
First Union National Bank,
as Administrative Agent
One First Union Center, TW-10
301 South College Street
Charlotte, North Carolina 28228-0608
Attention: Syndication Agency Services
Ladies and Gentlemen:
This irrevocable Notice of Prepayment is delivered to you by Kinder Morgan
Energy Partners, L.P. (the "Company"), a Delaware limited partnership, under
Section 2.11 of the Credit Agreement dated as of September 29, 1999 (as
restated, amended, modified, supplemented and in effect from time to time, the
"Credit Agreement"), by and among the Company, the Lenders party thereto, the
Syndication Agent, the Documentation Agent, and First Union National Bank, as
the Administrative Agent.
1. The Company hereby provides notice to the Administrative Agent that the
Company shall repay the following ABR Loans and/or Eurodollar Loans in the
amount of $_____________.1/
2. The Company shall repay the above-referenced Loans on the following
Business Day: ___________________.2/
3. All capitalized undefined terms used herein have the meanings assigned
thereto in the Credit Agreement.
IN WITNESS WHEREOF, the undersigned have executed this Borrowing Request
this _____ day of _______________, _____.
KINDER MORGAN ENERGY PARTNERS, L.P.,
as the Company
By: Kinder Morgan G.P., Inc.,
its General Partner
By:__________________________________
Name:
Title:
_______________________
1
Complete with an amount in accordance with Section 2.11(b) of the
Credit Agreement.
2
Complete with a Business Day in accordance with Section 2.11(b) of
the Credit Agreement.
364-Day Facility
<PAGE>
EXHIBIT 5.01
FORM OF COMPLIANCE CERTIFICATE
The undersigned hereby certifies that he is the
____________________________ of the KINDER MORGAN G.P., INC., a Delaware
corporation, general partner of KINDER MORGAN ENERGY PARTNERS, L.P., a Delaware
limited partnership (the "Company"), and that as such he is authorized to
execute this certificate on behalf of the Company. With reference to the Credit
Agreement dated as of September 29, 1999 (as restated, amended, modified,
supplemented and in effect from time to time, the "Agreement") among the
Company, the Syndication Agent, the Documentation Agent and First Union National
Bank, as Administrative Agent, for the lenders (the "Lenders"), which are or
become a party thereto, and such Lenders, the undersigned represents and
warrants as follows (each capitalized term used herein having the same meaning
given to it in the Agreement unless otherwise specified);
(a) The representations and warranties of the Company contained in
Article IV of the Agreement and otherwise made in writing by or on behalf
of the Company pursuant to the Agreement were true and correct when made,
and are repeated at and as of the time of delivery hereof and are true and
correct at and as of the time of delivery hereof, except to the extent
such representations and warranties are expressly limited to an earlier
date or the Required Lenders have expressly consented in writing to the
contrary.
(b) The Company has performed and complied with all agreements and
conditions contained in the Agreement to which it is a party required to
be performed or complied with by it prior to or at the time of delivery
hereof.
(c) Since ________________, no change as occurred, either in any case
or in the aggregate, in the condition, financial or otherwise, of the
Company or any Subsidiary which would have a Material Adverse Effect.
(d) There currently does not exist, and, after giving effect to the
loan or loans with respect to which this certificate is being delivered,
there will not exist, any Default or Event of Default under the Agreement
or any event or circumstance which constitutes, or with notice or lapse of
time (or both) would constitute, an event of default under any loan or
credit agreement, indenture, deed of trust, security agreement or other
agreement or instrument evidencing or pertaining to any Indebtedness of
the Company or any Subsidiary, or under any material agreement or
instrument to which the Company or any Subsidiary is a party or by which
the Company or any Subsidiary is bound.
(e) Attached hereto are the detailed computations necessary to
determine whether the Company is in compliance with Sections 6.07(a) and
(b) of the Agreement as of the end of the [fiscal quarter][fiscal year]
ending ________________.
(f) Attached hereto with respect to each Intercompany Note are the
matters required by clause (iii) of the last sentence of Section 5.01 of
the Agreement.
364-Day Facility
<PAGE>
EXECUTED AND DELIVERED this _____ day of ________________, ______.
KINDER MORGAN ENERGY PARTNERS, L.P.
By: KINDER MORGAN G.P., INC.,
its General Partner
By:_________________________________
Name:
Title:
364-Day Facility
FOURTH AMENDMENT
----------------
THIS FOURTH AMENDMENT to the Credit Agreement referred to below (this
"Fourth Amendment"), is made and entered into as of this 13th day of August,
1999 by and among KINDER MORGAN, INC., a corporation organized under the laws of
Delaware (the "Borrower"), the Lenders party to the Credit Agreement (as defined
below) and identified on the signature pages hereto, and FIRST UNION NATIONAL
BANK, as Administrative Agent for the Lenders.
Statement of Purpose
--------------------
The Lenders have extended certain credit facilities to the Borrower
pursuant to the Amended and Restated Credit Agreement dated as of June 18, 1998
as amended by the First Amendment dated as of August 26, 1998, the Second
Amendment dated as of September 8, 1998 and the Third Amendment dated as of May
7, 1999 (as so amended and as further amended, restated, supplemented or
otherwise modified, the "Credit Agreement"), by and among the Borrower, the
Lenders and the Administrative Agent.
The Borrower has requested that the Lenders amend the Credit Agreement to
revise certain provisions of the Credit Agreement, and the Lenders have agreed
to do so, but only on the terms and conditions set forth below in this Fourth
Amendment.
NOW THEREFORE, for good and valuable consideration, the receipt and
adequacy of which is hereby acknowledged, the parties hereto agree as follows:
1. Definitions. All capitalized undefined terms used in this Fourth
Amendment shall have the meanings assigned thereto in the Credit Agreement.
2. Amendments.
(a) Section 1.1 of the Credit Agreement shall be amended by deleting the
definitions of "Aggregate Commitment" and "Revolving Credit Commitment" and
inserting the following new definitions in lieu thereof:
"Aggregate Commitment" means the aggregate amount of the Lenders'
Commitments hereunder, as such amount may be reduced or modified at any
time or from time to time pursuant to the terms hereof.
"Revolving Credit Commitment" means (a) as to any Lender, the
obligation of such Lender to make Revolving Credit Loans to and issue or
participate in Letters of Credit issued for the account of the Borrower
hereunder in an aggregate principal amount at any time outstanding not to
exceed the amount set forth opposite such Lender's name on Schedule 1, as
such amount may be reduced or modified at any time or from time to time
pursuant to Sections 2.5 and 14.10 and (b) as to all Lenders, the
aggregate commitment of all Lenders to make Revolving Credit Loans and
issue or participate in Letters of Credit, as such amount may be reduced
or modified at any time or from time to time pursuant to such
<PAGE>
Sections. The Revolving Credit Commitment on the Fourth Amendment
Effective Date shall be Twenty Million Dollars ($20,000,000).
(b) Section 1.1 of the Credit Agreement is hereby modified to add in
appropriate alphabetical order the following defined terms:
"Additional KMI Dividend" means a dividend not in excess of Ten
Million Dollars ($10,000,000) to be paid to the shareholders of the
Borrower on the Fourth Amendment Effective Date.
"Fourth Amendment" means that certain Fourth Amendment to this
Agreement dated as of August 13, 1999 by and among the Borrower, the
Lenders and the Administrative Agent.
"Fourth Amendment Effective Date" means the date of the Fourth
Amendment or such later Business Day upon which each condition described
in Section 5 to the Fourth Amendment shall be satisfied or waived in all
material respects in a manner satisfactory to the Administrative Agent."
(c) Section 2.7 of the Credit Agreement shall be amended in its entirety
by inserting the following Section 2.7 in lieu thereof:
"SECTION 2.7. Use of Proceeds. The Borrower shall use the proceeds of
the Revolving Credit Loans solely (a) prior to August 19, 1998, for future
general corporate purposes in an amount not greater than $5,600,000, (b)
prior to December 31, 1998, to finance investments permitted by Section
11.3(d), make dividends and distributions permitted by Section 11.6(e) and
pay income taxes and Interest Expense, (c) on or after December 31, 1998,
to finance investments permitted by Section 11.3(d), (d) to pay the
Additional KMI Dividend permitted pursuant to Section 11.6(a) and (e) to
pay certain fees and expenses incurred in connection with the transactions
contemplated hereby."
(d) Section 11.6(a) of the Credit Agreement shall be amended in its
entirety by inserting the following in lieu thereof:
"(a) the Borrower may pay the KMI Dividend and the Additional
KMI Dividend;"
3. Second Amended and Restated Notes. Each Revolving Credit Note executed
on the Closing Date shall be replaced with a Second Amended and Restated
Revolving Credit Note dated as of the Fourth Amendment Effective Date in the
aggregate principal amount of Twenty Million Dollars ($20,000,000) (the "Second
Amended and Restated Revolving Credit Notes").
4. Update to Schedules 1 and 11.8. Solely with respect to the Revolving
Credit Commitment, Schedule1 attached hereto hereby amends and restates Schedule
1 attached to the Credit Agreement and Schedule 11.8 attached hereto hereby
amends and replaces in its entirety Schedule 11.8 attached to the Credit
Agreement.
2
<PAGE>
5. Conditions of Effectiveness. This Fourth Amendment shall become
effective when, and only when, the Administrative Agent shall have received the
following, in form and substance satisfactory to the Administrative Agent:
(a) Counterparts of this Fourth Amendment executed by the Borrower,
the Administrative Agent and each of the Lenders.
(b) An executed original Second Amended and Restated Revolving Credit
Note made payable to each Lender in an amount equal to such Lender's
Revolving Credit Commitment.
(c) Certified copies of (i) the resolutions of the Board of Directors
of the Borrower approving this Fourth Amendment and (ii) all documents,
evidencing other necessary corporate action and governmental approvals, if
any, with respect to this Fourth Amendment and the matters contemplated
hereby.
(d) A certificate of the Secretary or an Assistant Secretary of the
Borrower certifying (i) that the charter documents and the bylaws of the
Borrower delivered on the Closing Date have not been amended or modified
in any respect, and (ii) as to the incumbency and the names and true
signatures of its officers authorized to sign this Fourth Amendment to
which it is a party and other documents to be delivered hereunder.
(e) A certificate as of a recent date of the good standing of the
Borrower under the laws of its jurisdiction of organization.
(f) A favorable opinion of Morrison & Hecker, L.L.P., counsel to the
Borrower, addressed to the Administrative Agent and the Lenders with
respect to the Borrower, the Fourth Amendment, the Loan Documents and as
to such other matters as the Administrative Agent or any Lender may
reasonably request.
6. Limited Amendment. Except as expressly amended herein, the Credit
Agreement and each other Loan Document shall continue to be, and shall remain,
in full force and effect. This Fourth Amendment shall not be deemed (a) to be a
waiver of, or consent to, or a modification or amendment of, any other term or
condition of the Credit Agreement or any other Loan Documents or (b) to
prejudice any other right or rights which the Administrative Agent or Lenders
may now have or may have in the future under or in connection with the Credit
Agreement or the Loan Documents or any of the instruments or agreements referred
to therein, as the same may be amended, restated or otherwise modified from time
to time.
7. Representations and Warranties. By its execution hereof, the Borrower
hereby certifies on behalf of itself and its Subsidiaries that each of the
representations and warranties set forth in the Credit Agreement and the other
Loan Documents is true and correct as of the date hereof as if fully set forth
herein (except for any such representations and warranties made as of a specific
date which shall be true and correct as of such date) and that as of the date
hereof no Default or Event of Default has occurred and is continuing.
3
<PAGE>
8. Governing Law. This Fourth Amendment shall be governed by and construed
in accordance with the laws of the State of North Carolina.
9. Counterparts. This Fourth Amendment may be executed in separate
counterparts, each of which when executed and delivered is an original but all
of which taken together constitute one and the same instrument.
[Signature Pages Follow]
4
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Fourth Amendment
to be duly executed as of the date and year first above written.
[CORPORATE SEAL] KINDER MORGAN, INC.,
as Borrower
By /s/ David G. Dehaemers, Jr.
----------------------------------------------
Name: David G. Dehaemers, Jr.
-----------------------------------------
Title: Vice President and Treasurer
--------------------------------------
FIRST UNION NATIONAL BANK, as Administrative
Agent and Lender
By /s/ Russell Curriman
----------------------------------------------
Name: Russell Curriman
-----------------------------------------
Title: Vice President
--------------------------------------
<PAGE>
LENDERS:
-------
SOCIE'TE' GE'NE'RALE, SOUTHWEST AGENCY
By /s/ Richard A. Gould
----------------------------------------------
Name: Richard A. Gould
-----------------------------------------
Title: Director
--------------------------------------
[SIGNATURE PAGES CONTINUE]
<PAGE>
SENIOR DEBT PORTFOLIO
By /s/ Barbara Campbell
----------------------------------------------
Name: Barbara Campbell
-----------------------------------------
Title: Vice President
--------------------------------------
[SIGNATURE PAGES CONTINUE]
<PAGE>
AMARA-2 FINANCE LTD.
By /s/ Andrew Ian Wignall
----------------------------------------------
Name: Andrew Ian Wignall
-----------------------------------------
Title: Director
--------------------------------------
[SIGNATURE PAGES CONTINUE]
<PAGE>
CERES FINANCE LTD.
By /s/ David Dyer
----------------------------------------------
Name: David Dyer
-----------------------------------------
Title: Director
--------------------------------------
[SIGNATURE PAGES CONTINUE]
<PAGE>
AERIES FINANCE LTD.
By /s/ Andrew Ian Wignall
----------------------------------------------
Name: Andrew Ian Wignall
-----------------------------------------
Title: Director
--------------------------------------
[SIGNATURE PAGES CONTINUE]
<PAGE>
CAPTIVA FINANCE LTD.
By /s/ David Dyer
----------------------------------------------
Name: David Dyer
-----------------------------------------
Title: Director
--------------------------------------
[SIGNATURE PAGES CONTINUE]
<PAGE>
ELC (CAYMAN) LTD.
By /s/ E. A. Kratzman, III
----------------------------------------------
Name: E. A. Kratzman, III
-----------------------------------------
Title: Managing Director IDM
--------------------------------------
[SIGNATURE PAGES CONTINUE]
<PAGE>
ELC (CAYMAN) LTD.
CDO Series 1991-1
By /s/ E. A. Kratzman, III
----------------------------------------------
Name: E. A. Kratzman, III
-----------------------------------------
Title: Managing Director IDM
--------------------------------------
[SIGNATURE PAGES CONTINUE]
<PAGE>
PILGRIM PRIME RATE TRUST
By: PILGRIM INVESTMENTS, INC.
as its Investment Manager
By /s/ Robert L. Wilson
----------------------------------------------
Name: Robert L. Wilson
-----------------------------------------
Title: Vice President
--------------------------------------
[SIGNATURE PAGES CONTINUE]
<PAGE>
PILGRIM AMERICA HIGH INCOME
INVESTMENTS LTD.
By /s/ Robert L. Wilson
----------------------------------------------
Name: Robert L. Wilson
-----------------------------------------
Title: Vice President
--------------------------------------
[SIGNATURE PAGES CONTINUE]
<PAGE>
EATON VANCE SENIOR INCOME TRUST
By /s/ Barbara Campbell
----------------------------------------------
Name: Barbara Campbell
-----------------------------------------
Title: Vice President
--------------------------------------
[SIGNATURE PAGES CONTINUE]
<PAGE>
EATON VANCE INSTITUTIONAL SENIOR
LOAN FUND
By /s/ Barbara Campbell
----------------------------------------------
Name: Barbara Campbell
-----------------------------------------
Title: Vice President
--------------------------------------
[SIGNATURE PAGES CONTINUE]
<PAGE>
STANFIELD CLO, LTD.
By: Stanfield Capital Partners LLC,
as Collateral Manager
By /s/ Stephen M. Alfiere
----------------------------------------------
Name: Stephen M. Alfiere
-----------------------------------------
Title: Managing Partner
--------------------------------------
[SIGNATURE PAGES CONTINUE]
<PAGE>
LONGLANE MASTER TRUST IV
By: BankBoston, N.A., as Trust Administrator
By /s/ Renee A. Ross
----------------------------------------------
Name: Renee A. Ross
-----------------------------------------
Title: Managing Director Credit Derivative
--------------------------------------
<PAGE>
SCHEDULE 1
----------
LENDERS AND REVOLVING CREDIT COMMITMENTS
----------------------------------------
- --------------------------------------------------------------------
Revolving Revolving
Lender Credit Credit
Commitment Commitment
Percentage
- --------------------------------------------------------------------
First Union National Bank $20,000,000 100.0000000000%
c/o First Union Capital Partners
One First Union Center
301 South College Street, 5th Floor
Charlotte, NC 28288-0732
Attention: Ted A. Gardner
Telephone No.: (704) 374-4769
Telecopy No.: (704) 374-6711
- --------------------------------------------------------------------
<PAGE>
SCHEDULE 11.8
-------------
AFFILIATE TRANSACTIONS
----------------------
Two loans evidenced by promissory notes in the aggregate principal amount
of $1 Million Dollars payable by William V. Morgan to Kinder Morgan, Inc., which
loans will be retired on the Closing Date.
The KMI Dividend shall be distributed to Richard D. Kinder, Morgan
Associates, Inc. and First Union Corporation, each in their capacity as
shareholders of the Borrower.
The Additional KMI Dividend shall be distributed to Richard D. Kinder,
Morgan Associates, Inc. and First Union Corporation, each in their capacity
as shareholders of the Borrower.
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> SEP-30-1999
<CASH> 29,744
<SECURITIES> 0
<RECEIVABLES> 60,253
<ALLOWANCES> 0
<INVENTORY> 11,165
<CURRENT-ASSETS> 101,367
<PP&E> 1,925,653
<DEPRECIATION> 105,916
<TOTAL-ASSETS> 2,326,205
<CURRENT-LIABILITIES> 75,603
<BONDS> 765,398
0
0
<COMMON> 0
<OTHER-SE> 1,374,195
<TOTAL-LIABILITY-AND-EQUITY> 2,326,205
<SALES> 307,370
<TOTAL-REVENUES> 307,370
<CGS> 3,404
<TOTAL-COSTS> 166,389
<OTHER-EXPENSES> (44,613)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 39,512
<INCOME-PRETAX> 146,082
<INCOME-TAX> 6,752
<INCOME-CONTINUING> 139,330
<DISCONTINUED> 0
<EXTRAORDINARY> (2,595)
<CHANGES> 0
<NET-INCOME> 136,735
<EPS-BASIC> 1.95
<EPS-DILUTED> 1.95
</TABLE>
