Exhibit 10.4
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BRIDGE LOAN AGREEMENT
dated as of November 1, 2002
among
KANEB PIPE LINE OPERATING PARTNERSHIP, L.P.
as Borrower
KANEB PIPE LINE PARTNERS, L.P.
as KPP
THE LENDERS FROM TIME TO TIME PARTY HERETO
and
SUNTRUST BANK
as Administrative Agent
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SUNTRUST ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇,
a division of SUNTRUST CAPITAL MARKETS, INC.
as Lead Arranger and Book Manager
and
BANC ONE CAPITAL MARKETS, INC.
as Co-Lead Arranger and Co-Book Manager
TABLE OF CONTENTS
Page
Article I DEFINITIONS; CONSTRUCTION
Section 1.1. Definitions..........................................................................................1
Section 1.2. Classifications of Loans............................................................................18
Section 1.3. Accounting Terms and Determination..................................................................18
Section 1.4. Terms Generally.....................................................................................19
Article II AMOUNT AND TERMS OF THE COMMITMENTS
Section 2.1. [Intentionally Omitted].............................................................................19
Section 2.2. The Bridge Loan.....................................................................................19
Section 2.3. Fees................................................................................................20
Section 2.4. Funding of the Bridge Loan..........................................................................20
Section 2.5. Interest Elections..................................................................................20
Section 2.6. [Intentionally Omitted].............................................................................21
Section 2.7. Repayment of the Bridge Loan........................................................................21
Section 2.8. Evidence of Indebtedness............................................................................21
Section 2.9. Prepayments.........................................................................................22
Section 2.10. Interest on Loans..................................................................................22
Section 2.11. [Intentionally Omitted]............................................................................23
Section 2.12. Computation of Interest............................................................................23
Section 2.13. Inability to Determine Interest Rates..............................................................23
Section 2.14. Illegality.........................................................................................24
Section 2.15. Increased Costs....................................................................................24
Section 2.16. Funding Indemnity..................................................................................25
Section 2.17. Taxes..............................................................................................25
Section 2.18. Payments Generally; Pro Rata Treatment; Sharing of Set-offs........................................27
Section 2.19. Mitigation of Obligations; Replacement of Lenders..................................................28
Article III CONDITIONS PRECEDENT TO LOANS
Section 3.1. Conditions To Effectiveness.........................................................................29
Article IV REPRESENTATIONS AND WARRANTIES
Section 4.1. Existence; Power....................................................................................31
Section 4.2. Organizational Power; Authorization; Enforceability.................................................31
Section 4.3. Governmental Approvals; No Conflicts................................................................31
Section 4.4. Financial Statements................................................................................32
Section 4.5. Litigation and Environmental Matters................................................................32
Section 4.6. Compliance with Laws and Agreements.................................................................32
Section 4.7. Investment Company Act, Etc.........................................................................32
Section 4.8. Taxes...............................................................................................33
Section 4.9. Margin Regulations..................................................................................33
Section 4.10. ERISA..............................................................................................33
Section 4.11. Ownership of Property..............................................................................33
Section 4.12. Disclosure.........................................................................................34
Section 4.13. Labor Relations....................................................................................34
Section 4.14. Acquisition Agreement..............................................................................34
Section 4.15. Subsidiaries, Significant Affiliates and Guarantors................................................34
Section 4.16. Liens..............................................................................................34
Article V AFFIRMATIVE COVENANTS
Section 5.1. Financial Statements and Other Information..........................................................35
Section 5.2. Notices of Material Events..........................................................................36
Section 5.3. Existence; Conduct of Business......................................................................37
Section 5.4. Compliance with Laws, Etc...........................................................................37
Section 5.5. Payment of Obligations..............................................................................37
Section 5.6. Books and Records...................................................................................37
Section 5.7. Visitation, Inspection, Etc.........................................................................37
Section 5.8. Maintenance of Properties; Insurance................................................................37
Section 5.9. Use of Proceeds.....................................................................................38
Section 5.10. Additional Subsidiaries............................................................................38
Article VI FINANCIAL COVENANTS
Section 6.1. Funded Debt to EBITDA...............................................................................38
Section 6.2. Consolidated EBITDA to Consolidated Interest Expense................................................38
Section 6.3. Consolidated Net Worth..............................................................................39
Article VII NEGATIVE COVENANTS
Section 7.1. Indebtedness........................................................................................39
Section 7.2. Negative Pledge.....................................................................................39
Section 7.3. Fundamental Changes.................................................................................40
Section 7.4. Investments, Loans, Etc.............................................................................40
Section 7.5. Restricted Payments.................................................................................41
Section 7.6. Sale of Assets......................................................................................41
Section 7.7. Transactions with Affiliates........................................................................42
Section 7.8. Restrictive Agreements..............................................................................42
Section 7.9. Sale and Leaseback Transactions.....................................................................42
Section 7.10. Hedging Agreements.................................................................................42
Section 7.11. Amendment to Material Documents....................................................................43
Section 7.12. Accounting Changes.................................................................................43
Article VIII KPP GUARANTEE
Section 8.1. Guarantee...........................................................................................43
Section 8.2. Guaranteed Obligations Not Waived...................................................................44
Section 8.3. Guarantee of Payment................................................................................44
Section 8.4. No Discharge or Diminishment of Guarantee...........................................................44
Section 8.5. Defenses of Borrower Waived.........................................................................44
Section 8.6. Agreement to Pay; Subordination.....................................................................45
Section 8.7. Information.........................................................................................45
Section 8.8. Representations and Warranties......................................................................45
Section 8.9. Termination.........................................................................................46
Article IX EVENTS OF DEFAULT
Section 9.1. Events of Default...................................................................................46
Article X THE ADMINISTRATIVE AGENT
Section 10.1. Appointment of Administrative Agent................................................................48
Section 10.2. Nature of Duties of Administrative Agent...........................................................49
Section 10.3. Lack of Reliance on the Administrative Agent.......................................................49
Section 10.4. Certain Rights of the Administrative Agent.........................................................50
Section 10.5. Reliance by Administrative Agent...................................................................50
Section 10.6. The Administrative Agent in its Individual Capacity................................................50
Section 10.7. Successor Administrative Agent.....................................................................50
Section 10.8. Authorization to Execute other Loan Documents......................................................51
Article XI MISCELLANEOUS
Section 11.1. Notices............................................................................................52
Section 11.2. Waiver; Amendments.................................................................................53
Section 11.3. Expenses; Indemnification..........................................................................54
Section 11.4. Successors and Assigns.............................................................................55
Section 11.5. Governing Law; Jurisdiction; Consent to Service of Process.........................................57
Section 11.6. WAIVER OF JURY TRIAL...............................................................................58
Section 11.7. Right of Setoff....................................................................................58
Section 11.8. Counterparts; Integration..........................................................................59
Section 11.9. Survival...........................................................................................59
Section 11.10. Severability......................................................................................59
Section 11.11. Confidentiality...................................................................................59
Section 11.12. Interest Rate Limitation..........................................................................60
Schedules
Schedule I - Applicable Margin
Schedule II - Existing Indebtedness
Schedule 4.5 - Environmental Matters
Schedule 4.15 - Subsidiaries
Schedule 7.2 - Existing Liens
Exhibits
Exhibit A - Form of Note
Exhibit B - Form of Assignment and Acceptance
Exhibit C - Form of Subsidiary Guarantee Agreement
Exhibit E - Form of Continuation/Conversion
Exhibit F - Form of Opinion
BRIDGE LOAN AGREEMENT
THIS BRIDGE LOAN AGREEMENT (this Agreement") is made and entered into as of
November 1, 2002, by and among KANEB PIPE LINE OPERATING PARTNERSHIP, L.P., a
Delaware limited partnership (the "Borrower"), KANEB PIPE LINE PARTNERS, L.P., a
Delaware limited partnership ("KPP"), the banks and other financial institutions
from time to time party hereto (the "Lenders") and SUNTRUST BANK, in its
capacity as Administrative Agent for the Lenders (the "Administrative Agent").
W I T N E S S E T H:
WHEREAS, the Borrower has requested that the Lenders make to it an
unsecured bridge term loan in the initial principal amount of $150,000,000; and
WHEREAS, subject to the terms and conditions of this Agreement (including,
without limitation, the guaranty and other agreements of KPP set forth herein),
the Lenders to the extent of their respective Commitments as defined herein, are
willing severally to make such bridge term loan.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
herein contained, the Borrower, KPP, the Lenders and the Administrative Agent
agree as follows:
Article I DEFINITIONS; CONSTRUCTION
Section 1.1. Definitions.
In addition to the other terms defined herein, the following terms used
herein shall have the meanings herein specified (to be equally applicable to
both the singular and plural forms of the terms defined):
"Acquisition" shall mean the acquisition of the Sellers' ammonia
pipeline.
"Acquisition Agreement" shall mean the Asset Purchase and Sale
Agreement dated as of September 17, 2002, between the Borrower and the
Sellers.
"Acquisition Documents" shall mean, collectively, the Acquisition
Agreement and all other documents, instruments, agreements, notes,
guarantees, opinions, and certificates executed in connection therewith.
"Additional Debt" shall mean Indebtedness issued or incurred by KPP,
Borrower or any Significant Affiliate after the date hereof, other than
Indebtedness under this Agreement or under the Revolving Credit Agreement.
"Adjusted LIBO Rate" shall mean, with respect to each Interest Period
for a Eurodollar Loan, the rate per annum obtained by dividing (i) LIBOR
for such Interest Period by (ii) a percentage equal to 1.00 minus the
Eurodollar Reserve Percentage.
"Administrative Agent" shall have the meaning set forth in the opening
paragraph hereof.
"Administrative Questionnaire" shall mean, with respect to each
Lender, an administrative questionnaire in the form prepared by the
Administrative Agent and submitted to the Administrative Agent duly
completed by such Lender.
"Affiliate" shall mean, as to any Person, any other Person that
directly, or indirectly through one or more intermediaries, Controls, is
Controlled by, or is under common Control with, such Person.
"Aggregate Commitments" shall mean, collectively, all Commitments of
all Lenders hereunder which is $150,000,000.
"Applicable Lending Office" shall mean, for each Lender and for each
Type of Loan, the "Lending Office" of such Lender (or an Affiliate of such
Lender) designated for such Type of Loan in the Administrative
Questionnaire submitted by such Lender or such other office of such Lender
(or an Affiliate of such Lender) as such Lender may from time to time
specify to the Administrative Agent and the Borrower as the office by which
its Loans of such Type are to be made and maintained.
"Applicable Margin" shall mean a percentage per annum determined by
reference to the Reference Ratings then in effect as set forth on Schedule
I plus the Ticking Margin; provided, that any change in the Applicable
Margin resulting from a change in any Reference Rating shall be effective
on the day on which the applicable rating agency changes its rating and
shall continue until the day prior to the day that a further change becomes
effective. The Applicable Margin shall initially be set at Level I.
"Asset Disposition" shall mean, with respect to KPP or any Significant
Affiliate, any sale, transfer, conveyance, lease or other disposition
(including by way of merger, consolidation or sale-leaseback) by KPP or
such Significant Affiliate to any other Person (other than by any Person to
KPP or a Guarantor or by a Significant Affiliate to any other Significant
Affiliate) of any assets of KPP or such Significant Affiliate (including,
without limitation, any Equity Interests owned by KPP or such Significant
Affiliate). The term "Asset Disposition" shall not include (i) dispositions
of inventory in the ordinary course of business, (ii) dispositions of other
assets in the ordinary course of business having a Diluted Value of not
more than $15,000,000 in the aggregate during the Term of this Agreement,
(iii) the grant of a Lien by KPP or any Significant Affiliate in any assets
securing a borrowing by, or contractual performance obligation of, KPP or
such Significant Affiliate otherwise permitted under this Agreement, and
(iv) dispositions of Equity Interests in connection with directors'
qualifying shares or comparable Equity Interests.
"Assignment and Acceptance" shall mean an assignment and acceptance
entered into by a Lender and an assignee (with the consent of any party the
consent of which is required by Section 11.4(b)) and accepted by the
Administrative Agent, in the form of Exhibit B attached hereto or any other
form approved by the Administrative Agent.
"Base Rate" shall mean the higher of (i) the per annum rate which the
Administrative Agent publicly announces from time to time to be its prime
lending rate, as in effect from time to time, and (ii) the Federal Funds
Rate as in effect from time to time plus one-half of one percent (0.50%).
The Administrative Agent's prime lending rate is a reference rate and does
not necessarily represent the lowest or best rate charged to customers. The
Administrative Agent may make commercial loans or other loans at rates of
interest at, above or below the Administrative Agent's prime lending rate.
Each change in the Administrative Agent's prime lending rate shall be
effective from and including the date such change is publicly announced as
being effective.
"Borrower" shall have the meaning in the introductory paragraph
hereof.
"Bridge Loan," "Loan," or "Loans" shall have the meanings set forth in
Section 2.2 hereof.
"Business Day" shall mean (i) any day other than a Saturday, Sunday or
other day on which commercial banks in Atlanta, Georgia and New York, New
York are authorized or required by law to close and (ii) if such day
relates to a Loan of, a payment or prepayment of principal or interest on,
a conversion of or into, or an Interest Period for, a Eurodollar Loan or a
notice with respect to any of the foregoing, any day on which dealings in
Dollars are carried on in the London interbank market.
"Capital Lease Obligations" of any Person shall mean all obligations
of such Person to pay rent or other amounts under any lease (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.
"Change in Control" shall mean the occurrence of one or more of the
following events: (i) any sale, lease, exchange or other transfer (in a
single transaction or a series of related transactions) of all or
substantially all of the assets of KPP or the General Partner to any other
Person or "group" (within the meaning of the Securities Exchange Act of
1934 and the rules of the Securities and Exchange Commission thereunder in
effect on the date hereof), (ii) the acquisition of ownership, directly or
indirectly, beneficially or of record, by any Person or "group" (within the
meaning of the Securities Exchange Act of 1934 and the rules of the
Securities and Exchange Commission thereunder as in effect on the date
hereof) (other than, in the case of the General Partner, by the Investor
Group) of sufficient Equity Interests in KPP or the General Partner to
Control KPP or the General Partner, as the case may be; or (iii) occupation
of a majority of the seats (other than vacant seats) on the board of
directors of the General Partner by Persons who were neither (A) nominated
by the current board of directors or (B) appointed by directors so
nominated.
"Change in Law" shall mean (i) the adoption of any applicable law,
rule or regulation after the date of this Agreement, (ii) any change in any
applicable law, rule or regulation, or any change in the interpretation or
application thereof, by any Governmental Authority after the date of this
Agreement, or (iii) compliance by any Lender (or its Applicable Lending
Office) by such Lender's holding company, if applicable) 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" shall have the meaning set forth in Section 11.12.
"Closing Date" shall mean the date on which the conditions precedent
set forth in Section 3.1 have been satisfied or waived in accordance with
Section 11.2.
"Code" shall mean the Internal Revenue Code of 1986, as amended and in
effect from time to time.
"Commitment" shall mean, with respect to each Lender, the obligation
of such Lender to make a Loan to the Borrower on the Closing Date in a
principal amount not exceeding the amount set forth with respect to such
Lender on the signature pages to this Agreement.
"Consolidated EBITDA" shall mean, for KPP and its Subsidiaries for any
period, an amount equal to the sum of (i) Consolidated Net Income for such
period plus (ii) to the extent deducted in determining Consolidated Net
Income for such period, (A) Consolidated Interest Expense, (B) income tax
expense, (C) depreciation and amortization and (D) all other non-cash
charges, determined on a consolidated basis in accordance with GAAP in each
case for such period.
"Consolidated Funded Debt" shall mean Funded Debt of KPP and its
consolidated Subsidiaries, other than Permitted Non-Recourse Debt.
"Consolidated Interest Expense" shall mean, for KPP and its
Subsidiaries for any period determined on a consolidated basis in
accordance with GAAP, the sum of (i) total cash interest expense, (other
than in respect of Permitted Non-Recourse Debt) including without
limitation the interest component of any payments in respect of Capital
Lease Obligations capitalized or expensed during such period (whether or
not actually paid during such period) plus (ii) the net amount payable (or
minus the net amount receivable) under Hedging Agreements during such
period (whether or not actually paid or received during such period).
"Consolidated Net Income" shall mean, for any period, the sum of (i)
the net income (or loss) of KPP and its Subsidiaries for such period
determined on a consolidated basis in accordance with GAAP, but (A)
excluding therefrom (to the extent otherwise included therein) (1) any
extraordinary gains or losses, (2) any gains attributable to write-ups of
assets, (3) any equity interest of KPP or any Subsidiary of KPP in the
unremitted earnings of any Person that is not a Subsidiary other than ST
Linden, L.L.C., (4) any income of any Person other than KPP or the Borrower
for such period if (x) such Person has any Permitted Non-Recourse
Indebtedness outstanding owing to any Person other than KPP or a
wholly-owned subsidiary of KPP and (y) such income is not received in cash
by KPP or the Borrower, as the case may be, during such period, and (B)
including therein (to the extent not otherwise included therein) any income
(or loss) of any Person or attributable to any assets if such income
accrued prior to the date that (x) such Person became a Subsidiary or was
merged into or consolidated with KPP or any Subsidiary of KPP or (y) such
assets were acquired by KPP or any Subsidiary, as the case may be, plus
(ii) the net income (or loss) of the General Partner in such period
attributable to the General Partner's interest in the Borrower, determined
in accordance with GAAP, and (5) any gains or losses attributable to the
termination of Hedging Agreements or the retirement of Indebtedness.
"Consolidated Net Worth" means as at any date the sum of (x) total
partners' capital of KPP and its consolidated Subsidiaries as at such date,
excluding the effects of any write-ups after December 31, 1999 of assets
owned by KPP and its consolidated subsidiaries as of the date of this
Agreement plus (y) minority interests of the General Partner in the
Borrower, in each case determined in accordance with GAAP.
"Constituent Documents" shall mean, for any Person, the documents for
its formation and organization, which, for example, (i) for a corporation
are its corporate charter and bylaws, (ii) for a partnership is its
partnership agreement, (iii) for a limited liability company are its
certificate of organization and regulations, and (iv) for a trust is the
trust agreement or indenture under which it is created.
"Control" shall mean the power, directly or indirectly, either to (i)
vote 15% or more of securities having ordinary voting power for the
election of directors (or persons performing similar functions) of a Person
or (ii) direct or cause the direction of the management and policies of a
Person, whether through the ability to exercise voting power, by contract
or otherwise. The terms "Controlled by" and "under common Control with"
have meanings correlative thereto.
"Credit Exposure" shall mean with respect to any Lender at any time
the outstanding principal amount of its Loan to Borrower.
"Credit Rating" of any Person shall mean any rating published by S&P
or ▇▇▇▇▇'▇ for such Person's senior, unsecured long-term debt securities
without third-party credit enhancement, whether or not any such debt
securities are actually outstanding, and any rating assigned to any other
debt security of such Person shall be disregarded.
"Default" shall mean any condition or event that, with the giving of
notice or the lapse of time or both, would constitute an Event of Default.
"Default Interest" shall have the meaning set forth in Section
2.10(b).
"Diluted Value" shall mean, with respect to any assets of KPP, the
Fair Market Value of such assets, and, with respect to any assets of any
other Person, the Fair Market Value of such assets multiplied by the
percentage of the Equity Interests held directly or indirectly by KPP in
such Person.
"Disbursement" shall mean the disbursement by each Lender of the
amount of its Commitment for the Bridge Loan on the Closing Date.
"Distribution" shall mean, with respect to any Equity Interests issued
by a Person (i) the retirement, redemption, purchase or other acquisition
for value of those Equity Interests, (ii) the declaration or payment of any
dividend or distribution on or with respect to those Equity Interests,
(iii) any Investment by that Person in the holder of any of those Equity
Interests, and (iv) any other payment by that Person with respect to those
Equity Interests.
"Dollar(s)" and the sign "$" shall mean lawful money of the United
States of America.
"Environmental Liability" shall mean any liability, contingent or
otherwise (including any liability for damages, costs of environmental
investigation and remediation, costs of administrative oversight, fines,
natural resource damages, penalties or indemnities), of KPP or any
Subsidiary directly or indirectly resulting from or based upon (i) any
actual or alleged violation of any Environmental Law, (ii) the generation,
use, handling, transportation, storage, treatment or disposal of any
Hazardous Materials, (iii) any actual or alleged exposure to any Hazardous
Materials, (iv) the Release or threatened Release of any Hazardous
Materials or (v) any contract, agreement or other consensual arrangement
pursuant to which liability is assumed or imposed with respect to any of
the foregoing.
"Equity Event" shall mean (i) the contribution in cash of capital to
KPP or any Subsidiary of KPP by any Person other than KPP or a Wholly-Owned
Subsidiary of KPP or any Subsidiary of KPP, or (ii) any issuance of Equity
Interests by KPP or any Subsidiary of KPP to any Person other than KPP or
any Subsidiary of KPP or a Wholly-Owned Subsidiary of KPP.
"Equity Interests" shall mean, (i) with respect to a corporation,
shares of capital stock of such corporation or any other interest
convertible or exchangeable into any such interest, (ii) with respect to a
limited liability company, a membership interest in such company, (iii)
with respect to a partnership, a partnership interest in such partnership,
and (iv) with respect to any other Person, an interest in such Person
analogous to interests described in clauses (i) through (iii).
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended from time to time, and any successor statute.
"ERISA Affiliate" shall mean any trade or business (whether or not
incorporated), which, together with KPP, is treated as a single employer
under Section 414(b) or (c) of the Code or, solely for the 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" shall mean (i) 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);
(ii) 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; (iii) 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; (iv) the incurrence
by KPP or any of its ERISA Affiliates of any liability under Title IV of
ERISA with respect to the termination of any Plan; (v) the receipt by KPP
or any ERISA Affiliate from the PBGC or a plan administrator appointed by
the PBGC of any notice relating to an intention to terminate any Plan or
Plans or to appoint a trustee to administer any Plan; (vi) the incurrence
by KPP or any of its ERISA Affiliates of any liability with respect to the
withdrawal or partial withdrawal from any Plan or Multiemployer Plan; or
(vii) the receipt by KPP or any ERISA Affiliate of any notice, or the
receipt by any Multiemployer Plan from KPP 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 refers to the fact
that such Loan bears interest at a rate determined by reference to the
Adjusted LIBO Rate.
"Eurodollar Reserve Percentage" shall mean the aggregate of the
maximum reserve percentages (including, without limitation, any emergency,
supplemental, special or other marginal reserves) expressed as a decimal
(rounded upwards to the next 1/100th of 1%) in effect on any day to which
the Administrative Agent is subject with respect to the Adjusted LIBO Rate
pursuant to regulations issued by the Board of Governors of the Federal
Reserve System (or any Governmental Authority succeeding to any of its
principal functions) with respect to eurocurrency funding (currently
referred to as "eurocurrency liabilities" under Regulation D). Eurodollar
Loans shall be deemed to constitute eurocurrency funding and to be subject
to such reserve requirements without benefit of or credit for proration,
exemptions or offsets that may be available from time to time to any Lender
under Regulation D. The Eurodollar Reserve Percentage shall be adjusted
automatically on and as of the effective date of any change in any reserve
percentage.
"Event of Default" shall have the meaning set forth in Article IX.
"Excluded Affiliate" shall mean, for any Person (the "first Person"),
any other Person (the "second Person") in which the first Person owns
Equity Interests and where the second Person (i) has no Indebtedness other
than Permitted Non-Recourse Debt and (ii) the sole purpose of which is to
engage in the acquisition, construction, development and/or operation
activities financed or refinanced with such Permitted Non-Recourse Debt.
"Excluded Subsidiary" shall mean any Subsidiary of KPP that is an
Excluded Affiliate.
"Excluded Taxes" shall mean 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 of the Borrower hereunder, (i) 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,
(ii) any branch profits taxes imposed by the United States of America or
any similar tax imposed by any other jurisdiction in which any Lender is
located and (iii) in the case of a Foreign Lender, any withholding tax that
(A) is imposed on amounts payable to such Foreign Lender at the time such
Foreign Lender becomes a party to this Agreement, (B) is imposed on amounts
payable to such Foreign Lender at any time that such Foreign Lender
designates a new lending office, other than taxes that have accrued prior
to the designation of such lending office that are otherwise not Excluded
Taxes, and (C) is attributable to such Foreign Lender's failure to comply
with Section 2.17(e).
"Existing Indebtedness" shall mean the Indebtedness described on
Schedule II of this Agreement.
"Fair Market Value" shall mean, with respect to any Equity Interest or
other property or asset, the price obtainable for such Equity Interest or
other property or asset in an arm's-length sale between an informed and
willing purchaser under no compulsion to purchase and an informed and
willing seller under no compulsion to sell.
"Federal Funds Rate" shall mean, for any day, the rate per annum
(rounded upwards, if necessary, to the next 1/100th of 1%) equal to the
weighted average of the rates on overnight Federal funds transactions with
member banks of the Federal Reserve System arranged by Federal funds
brokers, as published by the Federal Reserve Bank of New York on the next
succeeding Business Day or if such rate is not so published for any
Business Day, the Federal Funds Rate for such day shall be the average
rounded upwards, if necessary, to the next 1/100th of 1% of the quotations
for such day on such transactions received by the Administrative Agent from
three Federal funds brokers of recognized standing selected by the
Administrative Agent.
"Foreign Lender" shall mean any Lender that is not a United States
person under Section 7701(a)(3) of the Code.
"Foreign Subsidiary" shall mean any Subsidiary of KPP that is not
organized under the law of the United States of America or any state or
territory thereof.
"Funded Debt" of any Person shall mean (i) all Indebtedness of such
Person of the types described in clauses (i) though (v) of the definition
of "Indebtedness", (ii) all Guarantees of such Person of the types of
Indebtedness described in clause (i) above and (iii) all obligations that
are secured (or for which the holder of any such obligation has an existing
right, contingent or otherwise, to be so secured) by any Lien on property
owned or acquired by such Person, in an amount limited to the lesser of (x)
the unpaid amount of all of such obligations from time to time outstanding
and (y) the Fair Market Value of the property securing all of such
obligations, liabilities secured (or for which the holder of such
obligations has an existing right, contingent or otherwise, to be so
secured) by any Lien existing on property owned or acquired by such Person.
"GAAP" shall mean generally accepted accounting principles in the
United States applied on a consistent basis and subject to the terms of
Section 1.3.
"General Partner" shall mean Kaneb Pipe Line Company LLC, a Delaware
limited liability company.
"Governmental Authority" shall mean 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.
"Granting Lender" shall have the meaning set forth in Section 11.4(e).
"Guarantee" of or by any Person (the "guarantor") shall mean any
obligation, contingent or otherwise, of the guarantor guaranteeing or
having the economic effect of guaranteeing any Indebtedness of any other
Person (the "primary obligor") in any manner, whether directly or
indirectly, and including any obligation, direct or indirect, of the
guarantor (i) 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, (ii) 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, (iii) 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 (iv) as an account party in respect of
any letter of credit or letter of guaranty issued in support of such
Indebtedness or obligation; provided, that the term "Guarantee" shall not
include endorsements for collection or deposits in the ordinary course of
business. The amount of any Guarantee shall be deemed to be an amount equal
to the stated or determinable amount of the primary obligation in respect
of which Guarantee is made or, if not so stated or determinable, the
maximum reasonably anticipated liability in respect thereof (assuming such
Person is required to perform thereunder) as determined by such Person in
good faith. The term "Guarantee" used as a verb has a corresponding
meaning.
"Guaranteed Obligations" shall have the meaning set forth in Section
8.01.
"Guarantor" shall mean KPP and each party to the Subsidiary Guarantee
Agreement.
"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 Agreements" shall mean interest rate swap, cap or collar
agreements, interest rate future or option contracts, currency swap
agreements, currency future or option contracts, commodity agreements and
other similar agreements or arrangements designed to protect against
fluctuations in interest rates, currency values or commodity values, in
each case to which KPP or any Subsidiary of KPP is a party.
"Indebtedness" of any Person shall mean, without duplication (i) all
obligations of such Person for borrowed money, (ii) all obligations of such
Person evidenced by bonds, debentures, notes or other similar instruments,
(iii) all obligations of such Person in respect of the deferred purchase
price of property or services (other than trade payables incurred in the
ordinary course of business; provided, that for purposes of Section 9.1(f),
trade payables overdue by more than 120 days shall be included in this
definition except to the extent that any of such trade payables are being
disputed in good faith and by appropriate measures), (iv) all obligations
of such Person under any conditional sale or other title retention
agreement(s) relating to property acquired by such Person, (v) all Capital
Lease Obligations of such Person and all obligations in respect of the
unpaid principal amount or component of all obligations under synthetic
leases, (vi) all obligations, contingent or otherwise, of such Person in
respect of letters of credit, acceptances or similar extensions of credit,
(vii) all Guarantees of such Person of the type of Indebtedness described
in clauses (i) through (vi) above, (viii) all Indebtedness of a third party
secured by any Lien on property owned by such Person, whether or not such
Indebtedness has been assumed by such Person, (ix) all obligations of such
Person, contingent or otherwise, to purchase, redeem, retire or otherwise
acquire for value any common stock of such Person, and (x) Off-Balance
Sheet Liabilities. The Indebtedness of any Person shall include the
Indebtedness of any partnership or joint venture in which such Person is a
general partner or a joint venturer, except to the extent that the terms of
such Indebtedness provide that such Person is not liable therefor.
"Indemnified Taxes" shall mean Taxes other than Excluded Taxes.
"Indemnitee" shall have the meaning set forth in Section 11.3(b).
"Interest Coverage Ratio" shall mean for any period of four
consecutive fiscal quarters of KPP, the ratio of (i) Consolidated EBITDA
for such period to (ii) Consolidated Interest Expense for such period.
"Interest Period" shall mean with respect to any Eurodollar Loan, a
period of one, two, or three months; provided, that:
(i) the initial Interest Period for such Loan shall commence on the
date of such Loan or the date of any conversion from a Loan of
another Type, and each Interest Period occurring thereafter in
respect of such Loan shall commence on the day on which the next
preceding Interest Period expires;
(ii) if any Interest Period would otherwise end on a day other than a
Business Day, such Interest Period shall be extended to the next
succeeding Business Day, unless such Business Day falls in
another calendar month, in which case such Interest Period would
end on the next preceding Business Day;
(iii)any Interest Period that begins on the last Business Day of a
calendar month or on a day for which there is no numerically
corresponding day in the calendar month at the end of such
Interest Period shall end on the last Business Day of such
calendar month;
(iv) no Interest Period may extend beyond the Maturity Date.
"Investment" shall mean, in respect of any Person, any loan, advance,
extension of credit or capital contribution to that Person, any other
investment in that Person, or any purchase or commitment to purchase any
Equity Interest or Indebtedness issued by that Person or substantially all
of the assets or a division or other business unit of that Person.
"Investor Group" shall mean Kaneb Services, LLC and its Subsidiaries.
"Lenders" shall have the meaning assigned to such term in the opening
paragraph of this Agreement.
"LIBOR" shall mean, for any applicable Interest Period with respect to
any Eurodollar Loan, the rate per annum for deposits in Dollars for a
period equal to such Interest Period appearing on the display designated as
Page 3750 on the Dow ▇▇▇▇▇ Markets Service (or such other page on that
service or such other service designated by the British Banker's
Association for the display of such Association's Interest Settlement Rates
for Dollar deposits) as of 11:00 a.m. (London, England time) on the day
that is two Business Days prior to the first day of the Interest Period or
if such Page 3750 is unavailable for any reason at such time, the rate
which appears on the Reuters Screen ISDA Page as of such date and such
time; provided, that if the Administrative Agent determines that the
relevant foregoing sources are unavailable for the relevant Interest
Period, LIBOR shall mean the rate of interest determined by the
Administrative Agent to be the average (rounded upward, if necessary, to
the nearest 1/100th of 1%) of the rates per annum at which deposits in
Dollars are offered to the Administrative Agent two Business Days preceding
the first day of such Interest Period by leading banks in the London
interbank market as of 10:00 a.m. for delivery on the first day of such
Interest Period, for the number of days comprised therein and in an amount
comparable to the amount of the Eurodollar Loan of the Administrative
Agent.
"Lien" shall mean any mortgage, pledge, security interest, financing
statement, lien (statutory or otherwise), charge, encumbrance,
hypothecation, assignment, deposit arrangement, or other arrangement having
the practical effect of the foregoing or any preference, priority or other
security agreement or preferential arrangement of any kind or nature
whatsoever (including any conditional sale or other title retention
agreement and any capital lease having the same economic effect as any of
the foregoing).
"Loan" or "Loans" shall mean, individually and collectively, the term
loans, or portions thereof, made by the Lenders to the Borrower under the
Commitments, which may either be Base Rate Loans or Eurodollar Loans, or a
combination thereof, and all of which, collectively, in the aggregate shall
constitute the Bridge Loan.
"Loan Documents" shall mean, collectively, this Agreement, the Notes
(if any), the Subsidiary Guarantee Agreement, the funds disbursement
instructions for the Bridge Loan and all Notices of
Conversion/Continuation.
"Loan Parties" shall mean the General Partner, the Borrower and the
Guarantors.
"Material Adverse Effect" shall mean, with respect to any event, act,
condition or occurrence of whatever nature (including any adverse
determination in any litigation, arbitration, or governmental investigation
or proceeding), whether singularly or in conjunction with any other event
or events, act or acts, condition or conditions, occurrence or occurrences
whether or not related, a material adverse change in, or a material adverse
effect on, (i) the business, results of operations, financial condition,
assets, liabilities or prospects of the Borrower or of KPP and its
Subsidiaries taken as a whole, (ii) the ability of any Loan Party to
perform any of its obligations under the Loan Documents, (iii) the rights
and remedies of the Administrative Agent and the Lenders under any of the
Loan Documents or (iv) the legality, validity or enforceability of any of
the Loan Documents.
"Material Indebtedness" shall mean Indebtedness (other than the Loans)
or obligations in respect of one or more Hedging Agreements of any one or
more of KPP and its Subsidiaries in an aggregate principal amount exceeding
$5,000,000, including without limitation Indebtedness incurred under the
Revolving Credit Agreement. For purposes of determining Material
Indebtedness, the "principal amount" of the obligations of KPP or any
Subsidiary of KPP in respect to any Hedging Agreement at any time shall be
the maximum aggregate amount (giving effect to any netting agreements) that
KPP or such Subsidiary would be required to pay if such Hedging Agreement
were terminated at such time.
"Maturity Date" shall mean the earliest of (i) the date six months
from the date of this Agreement, and (ii) the date on which all amounts
outstanding under this Agreement have been declared or have automatically
become due and payable (whether by acceleration or otherwise).
"Maximum Rate" shall have the meaning set forth in Section 11.12.
"Moody's" shall mean ▇▇▇▇▇'▇ Investors Service, Inc.
"Multiemployer Plan" shall have the meaning set forth in Section
4001(a)(3) of ERISA.
"Net Cash Proceeds" shall mean, with respect to any Asset Disposition,
Recovery Event, Additional Debt or Equity Event (each, for purposes of this
definition, a "transaction"), the aggregate amount of cash received, as the
case may be, by (x) KPP or the Borrower or (y) any Significant Affiliate
and legally available to be distributed to KPP or the Borrower in the form
of dividends or distributions in connection with such transaction after, in
each case, deducting therefrom (i) payments made in respect of any
Indebtedness to the extent that such payments are required to be made
(other than under the Loan Documents) as a result of or in connection with
such transaction by applicable law or the terms of any contractual
agreement relating to such Indebtedness, (ii) reasonable and customary
transaction costs (which in the case of any Recovery Event may include
litigation costs and expenses and other costs and expenses of collecting
payments and settlements therefrom) that are paid or reserved for payment
(A) to a Person that is not an Affiliate of KPP or (B) to KPP or an
Affiliate of KPP to reimburse such Person for payments made by such Person
to another Person that is not KPP or an Affiliate of KPP in respect of such
transaction costs, (iii) the amount of taxes paid or reserved for payment
by KPP or such Significant Affiliate in connection with or as a result of
such transaction and (iv) any Reinvestment Amount.
"Non-Recourse" shall mean, with respect to any Person as applied to
any Indebtedness (i) that such Person is not directly or indirectly liable
to make any payments with respect to such Indebtedness, (ii) that such
Indebtedness (or portion thereof) does not constitute Indebtedness of such
Person other than to the extent of recourse to such Person's Equity
Interests in the Person primarily incurring such Debt (or any shareholder,
partner, member or participant of such Person) and that (iii) such
Indebtedness (or portion thereof) is not secured by a Lien on any asset of
such Person other than such Person's Equity Interests in the Person
primarily incurring such Indebtedness or any shareholder, partner, member,
participant or other owner, directly or indirectly, of such Person or the
Person the obligations of which were guaranteed.
"Note" shall mean a promissory note of the Borrower payable to the
order of a requesting Lender in the principal amount of such Lender's
Commitment, in substantially the form of Exhibit A.
"Notice of Conversion/Continuation" shall mean the notice given by the
Borrower to the Administrative Agent in respect of the conversion or
continuation of an outstanding Loan as provided in Section 2.5(b) hereof.
"Obligations" shall mean all amounts owing by the Borrower to the
Administrative Agent or any Lender pursuant to or in connection with this
Agreement or any other Loan Document, including without limitation, all
principal, interest (including any interest accruing after the filing of
any petition in bankruptcy or the commencement of any insolvency,
reorganization or like proceeding relating to the Borrower, whether or not
a claim for post-filing or post-petition interest is allowed in such
proceeding), all reimbursement obligations, fees, expenses, indemnification
and reimbursement payments, costs and expenses (including all fees and
expenses of counsel to the Administrative Agent and any Lender incurred
pursuant to this Agreement or any other Loan Document), whether direct or
indirect, absolute or contingent, liquidated or unliquidated, now existing
or hereafter arising hereunder or thereunder, and all obligations arising
under Hedging Agreements relating to the foregoing to the extent permitted
hereunder, and all obligations and liabilities incurred in connection with
collecting and enforcing the foregoing, together with all renewals,
extensions, modifications or refinancings thereof.
"Off-Balance Sheet Liabilities" of any Person shall mean (i) any
repurchase obligation or liability of such Person with respect to accounts
or notes receivable sold by such Person, (ii) any liability of such Person
under any sale and leaseback transactions that do not create a liability on
the balance sheet of such Person, or (iii) any obligation arising with
respect to any other transaction which is the functional equivalent of or
takes the place of borrowing but that does not constitute a liability on
the balance sheet of such Person.
"Other Taxes" shall mean 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 or
any other Loan Document.
"Participant" shall have the meaning set forth in Section 11.4(c).
"Payment Office" shall mean the office of the Administrative Agent
located at ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, or such other
location as to which the Administrative Agent shall have given written
notice to the Borrower and the other Lenders.
"PBGC" shall mean the Pension Benefit Guaranty Corporation referred to
and defined in ERISA, and any successor entity performing similar
functions.
"Permitted Encumbrances" shall mean
(i) Liens imposed by law for taxes not yet due or which are being
contested in good faith by appropriate proceedings and with
respect to which adequate reserves are being maintained in
accordance with GAAP;
(ii) statutory Liens of landlords and Liens of carriers, warehousemen,
mechanics, materialmen and other Liens imposed by law created in
the ordinary course of business for amounts not yet due or which
are being contested in good faith by appropriate proceedings and
with respect to which adequate reserves are being maintained in
accordance with GAAP;
(iii)pledges and deposits made in the ordinary course of business in
compliance with workers' compensation, unemployment insurance and
other social security laws or regulations;
(iv) 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;
(v) 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 materially interfere with the ordinary
conduct of business of the Borrower and its Subsidiaries taken as
a whole; and
(vi) Liens granted in favor of the Administrative Agent for the
benefit of the Lenders.
"Permitted Investments" shall mean:
(i) direct obligations of, or obligations the principal of and
interest on which are unconditionally guaranteed by, the United
States (or by any agency thereof to the extent such obligations
are backed by the full faith and credit of the United States), in
each case maturing within one year from the date of acquisition
thereof;
(ii) commercial paper having the highest rating, at the time of
acquisition thereof, of S&P or Moody's and in either case
maturing within six months from the date of acquisition thereof;
(iii)certificates of deposit, bankers' acceptances and time deposits
maturing within 180 days of the date of acquisition thereof
issued or guaranteed by or placed with, and money market deposit
accounts issued or offered by, any domestic office of any
commercial bank organized under the laws of the United States or
any state thereof which has a combined capital and surplus and
undivided profits of not less than $500,000,000;
(iv) fully collateralized repurchase agreements with a term of not
more than 30 days for securities described in clause (i) above
and entered into with a financial institution satisfying the
criteria described in clause (iii) above; and
(v) mutual funds investing solely in any one or more of the Permitted
Investments described in clauses (i) through (iv) above.
"Permitted Non-Recourse Debt" shall mean Indebtedness of any Person
(other than any Loan Party) that is Non-Recourse to any Loan Party and is
used by such Person to acquire, construct, develop and/or operate assets
not owned by KPP or any Significant Affiliate as of the date hereof or to
refinance Permitted Non-Recourse Debt.
"Person" shall mean any individual, partnership, firm, corporation,
association, joint venture, limited liability company, trust or other
entity, or any Governmental Authority.
"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
KPP 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.
"Prior Acquisition" shall mean the acquisition of ▇▇▇▇▇ ▇▇▇▇▇ and
Co.'s Australian and New Zealand terminals.
"Prior Acquisition Documents" shall mean the asset purchase agreement
executed by the Borrower and ▇▇▇▇▇ ▇▇▇▇▇ and Co. in connection with the
Prior Acquisition.
"Pro Rata Share" shall mean with respect to any Lender at any time, a
percentage, the numerator of which shall be such Lender's Credit Exposure
and the denominator of which shall be the sum of the Credit Exposures of
all Lenders.
"Recovery Event" shall mean any settlement of or payment in respect of
any property or casualty insurance claim or any condemnation proceeding
relating to any property or asset of KPP or any Significant Affiliate, the
Diluted Value of which settlement or payment, when added to the Diluted
Value of all such settlements and payments during the Term of this
Agreement, exceeds $10,000,000.
"Reference Ratings" shall mean the Credit Ratings of the Borrower.
"Regulation D" shall mean Regulation D of the Board of Governors of
the Federal Reserve System, as the same may be in effect from time to time,
and any successor regulations.
"Reinvestment Amount" means, with respect to any Recovery Event, the
amount of cash received by KPP or any Significant Affiliate that the
Borrower, by written notice delivered to the Administrative Agent on or
prior to the date 10 Business Days following receipt of such cash by KPP or
such Significant Affiliate, certifies will be reinvested, and within 180
days of receipt of such cash is in fact reinvested, in assets to replace,
restore or refurbish the assets that were the subject of such Recovery
Event.
"Related Parties" shall mean, 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.
"Release" means any release, spill, emission, leaking, dumping,
injection, pouring, deposit, disposal, discharge, dispersal, leaching or
migration into the environment (including ambient air, surface water,
groundwater, land surface or subsurface strata) or within any building,
structure, facility or fixture.
"Required Lenders" shall mean, at any time, Lenders holding more than
51% of the aggregate outstanding Loans.
"Responsible Officer" shall mean, with respect to any Person, any of
the president, the chief executive officer, the chief operating officer,
the chief financial officer, the treasurer or a vice president of such
Person or such other representative of such Person as may be designated in
writing by any one of the foregoing with the consent of the Administrative
Agent.
"Restricted Payment" shall have the meaning set forth in Section 7.5.
"Revolving Borrowings" shall have the meaning assigned to the term
"Borrowings" under the Revolving Credit Agreement.
"Revolving Credit Agreement" shall mean that certain Revolving Credit
Agreement, dated as of December 28, 2000, as amended by that certain
Amendment No. 1 to Revolving Credit Agreement, dated as of July 31, 2002
and Amendment No. 2 to Revolving Credit Agreement, dated as of the date
hereof, by and among the Borrower, KPP, the lenders party thereto, and the
Administrative Agent.
"Revolving Credit Facility" shall mean the revolving credit facility
provided under the Revolving Credit Agreement.
"S&P" shall mean Standard & Poor's Ratings Group, a division of The
▇▇▇▇▇▇-▇▇▇▇ Companies, Inc.
"Sellers" shall mean ▇▇▇▇ Pipeline Company, L.P., a Delaware limited
partnership, and ▇▇▇▇ Fertilizer Storage and Terminal Company, a Nebraska
corporation.
"Senior Notes Indenture" shall mean that certain Indenture, dated on
or about February 21, 2002, between the Borrower and JPMorgan Chase Bank,
as trustee, with respect to the issuance of the Borrower's 7.750% Senior
Unsecured Notes due 2012.
"Significant Affiliate" shall mean each Person (i) in which KPP's
direct and indirect Investments in such Person constitute more than 10% of
the total assets of KPP and its consolidated Subsidiaries, (ii) in which
KPP's and its Subsidiaries' share of the total assets (after intercompany
eliminations) of such Person exceed 10% of the total assets of KPP and its
consolidated Subsidiaries, or (iii) in which the equity of KPP and its
Subsidiaries in the income from continuing operations of such Person before
income taxes, extraordinary items and cumulative effects of changes in
accounting principles exceeds 10% of such income of KPP and its
consolidated Subsidiaries.
"Significant Subsidiary" means any Subsidiary of KPP that is a
Significant Affiliate.
"SPV" shall have the meaning set forth in Section 11.4(e).
"Subsidiary" shall mean, with respect to any Person (the "parent"),
any corporation, partnership, joint venture, limited liability company,
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, partnership, joint venture,
limited liability company, association or other entity (i) 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 (ii) 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.
"Subsidiary Guarantee Agreement" shall mean the Subsidiary Guarantee
Agreement, substantially in the form of Exhibit C, made by the Guarantors
(other than KPP) in favor of the Administrative Agent for the benefit of
the Lenders.
"Taxes" shall mean any and all present or future taxes, levies,
imposts, duties, deductions, charges or withholdings imposed by any
Governmental Authority.
"Term" shall mean the period from the Closing Date to the Maturity
Date.
"Ticking Margin" shall mean (i) 0% per annum for the period commencing
on the Closing Date through and including the 90th day after the Closing
Date, and (ii) 0.25% per annum for the period commencing on the 91st day
after the Closing Date and continuing thereafter.
"Type", when used in reference to a Loan, shall refer to whether the
rate of interest on such Loan is determined by reference to the Adjusted
LIBO Rate or the Base Rate.
"UK Facility" shall mean the Credit Agreement, dated as of January 29,
1999, among the Borrower and ST Services, Ltd., as borrowers, and SunTrust
Bank, as lender, as amended, modified and supplemented from time to time.
"Wholly-Owned Subsidiary" shall mean any Subsidiary of a Person, all
of the issued and outstanding Equity Interests of which are directly or
indirectly owned by such Person, excluding (i) any general partner
interests owned by the General Partner in any such Subsidiary that is a
partnership and (ii) any directors' qualifying shares or similar type of
Equity Interests, as applicable.
"Withdrawal Liability" shall mean 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 1.2. Classifications of Loans.
For purposes of this Agreement, Loans may be classified and referred to by
Type (e.g., a "Eurodollar Loan" or "Base Rate Loan").
Section 1.3. Accounting Terms and Determination.
Unless otherwise defined or specified herein, all accounting terms used
herein shall be interpreted, all accounting determinations hereunder shall be
made, and all financial statements required to be delivered hereunder shall be
prepared, in accordance with GAAP as in effect from time to time, applied on a
basis consistent (except for such changes approved by KPP's independent public
accountants) with the most recent audited consolidated financial statement of
KPP delivered pursuant to Section 5.1(a); provided, that if KPP notifies the
Administrative Agent that KPP wishes to amend any covenant in Article VI to
eliminate the effect of any change in GAAP on the operation of such covenant (or
if the Administrative Agent notifies KPP that the Required Lenders wish to amend
Article VI for such purpose), then KPP's compliance with such covenant shall be
determined on the basis of GAAP in effect immediately before the relevant change
in GAAP became effective, until either such notice is withdrawn or such covenant
is amended in a manner satisfactory to KPP and the Required Lenders.
Section 1.4. Terms Generally.
The definitions of terms herein shall apply equally to the singular and
plural forms of the terms defined. Whenever the context may require, any pronoun
shall include the corresponding masculine, feminine and neuter forms. The words
"include", "includes" and "including" shall be deemed to be followed by the
phrase "without limitation". The word "will" shall be construed to have the same
meaning and effect as the word "shall". In the computation of periods of time
from a specified date to a later specified date, the word "from" means "from and
including" and the word "to" means "to but excluding". Unless the context
requires otherwise (i) any definition of or reference to any agreement,
instrument or other document herein shall be construed as referring to such
agreement, instrument or other document as it was originally executed or as it
may from time to time be amended, supplemented or otherwise modified (subject to
any restrictions on such amendments, supplements or modifications set forth
herein), (ii) any reference herein to any Person shall be construed to include
such Person's successors and permitted assigns, (iii) the words "hereof",
"herein" and "hereunder" and words of similar import shall be construed to refer
to this Agreement as a whole and not to any particular provision hereof, (iv)
all references to Articles, Sections, Exhibits and Schedules shall be construed
to refer to Articles, Sections, Exhibits and Schedules to this Agreement and (v)
all references to a specific time shall be construed to refer to the time in the
city and state of the Administrative Agent's principal office, unless otherwise
indicated.
Article II AMOUNT AND TERMS OF THE COMMITMENTS
Section 2.1. [Intentionally Omitted]
Section 2.2. The Bridge Loan.
Subject to the terms and conditions set forth herein, each Lender severally
agrees to make a single Loan to the Borrower (each a "Loan" and collectively,
the "Loans" or the "Bridge Loan") on the Closing Date in a principal amount not
to exceed each such Lender's Commitment; provided, however, that if for any
reason (other than the failure of a Lender to make such Loan) the amount of such
Lender's Commitment is not drawn on the Closing Date, the undrawn portion
thereof shall be cancelled. The execution and delivery of this Agreement by the
Borrower and the satisfaction of all conditions precedent set forth in Section
3.1 hereof shall be deemed to constitute the Borrower's request to borrow
hereunder on the Closing Date.
Section 2.3. Fees.
(a) The Borrower shall pay to the Administrative Agent, for the
ratable benefit of each Lender, a takeout fee in the amount of $1,170,000,
which such takeout fee shall be fully earned on the Closing Date and due
and payable in full on the earlier of (i) the Maturity Date and (ii) the
date on which the Bridge Loan is repaid in full.
(b) The Borrower shall pay to the Administrative Agent, for the
ratable benefit of each Lender, a "no-equity fee" in an amount equal to
$375,000, which such no-equity fee shall be fully earned, and due and
payable on November 14, 2002 if KPP does not raise at least $50,000,000 of
equity through the issuance of Equity Interests during the period
commencing on November 4, 2002 and ending November 14, 2002.
Section 2.4. Funding of the Bridge Loan.
(a) Each Lender will make available each Loan to be made by it
hereunder on the Closing Date by wire transfer in immediately available
funds by 11:00 a.m. to the Administrative Agent at the Payment Office. The
Administrative Agent will make such Loans available to the Borrower by
promptly crediting the amounts that it receives, in like funds by the close
of business on the Closing Date, to an account maintained by the Borrower
with the Administrative Agent or at the Borrower's option, by effecting a
wire transfer of such amounts to an account designated by the Borrower to
the Administrative Agent.
(b) All Loans shall be made by the Lenders on the basis of their
respective Commitment. No Lender shall be responsible for any default by
any other Lender in its obligations hereunder, and each Lender shall be
obligated to make its Loans provided to be made by it hereunder, regardless
of the failure of any other Lender to make its Loans hereunder.
Section 2.5. Interest Elections.
(a) The Bridge Loan initially shall be a Base Rate Loan. Thereafter,
the Borrower may elect to convert the Bridge Loan, or any portion thereof,
into a different Type or to continue such Loan, and in the case of a
Eurodollar Loan, may elect Interest Periods therefor, all as provided in
this Section. The Borrower may elect different options with respect to
different portions of the Bridge Loan, in which case each such portion
shall be allocated ratably among the Lenders according to each Lender's Pro
Rata Share; provided, however, that there shall be no more than three
Eurodollar Loans outstanding at any given time.
(b) To make an election pursuant to this Section, the Borrower shall
give the Administrative Agent prior written notice (or telephonic notice
promptly confirmed in writing) of each Loan (a "Notice of
Conversion/Continuation") that is to be converted or continued, as the case
may be, (x) prior to 10:00 a.m. one Business Day prior to the requested
date of a conversion into a Base Rate Loan and (y) prior to 11:00 a.m.
three Business Days prior to a continuation of or conversion into a
Eurodollar Loan. Each such Notice of Conversion/Continuation shall be
irrevocable and shall specify (i) the amount of the portion of the Bridge
Loan to which such Notice of Continuation/Conversion applies and, if
different options are being elected with respect to different portions
thereof, the amount of the portions thereof that are to be allocated to
each Loan (in which case the information to be specified pursuant to
clauses (iii) and (iv) shall be specified for each Loan); (ii) the
effective date of the election made pursuant to such Notice of
Continuation/Conversion, which shall be a Business Day, (iii) whether the
Loan is to be a Base Rate Loan or a Eurodollar Loan; and (iv) if the Loan
is to be a Eurodollar Loan, the Interest Period applicable thereto after
giving effect to such election, which shall be a period contemplated by the
definition of "Interest Period". If any such Notice of
Continuation/Conversion requests a Eurodollar Loan but does not specify an
Interest Period, the Borrower shall be deemed to have selected an Interest
Period of one month.
(c) If, on the expiration of any Interest Period in respect of any
Eurodollar Loan, the Borrower shall have failed to deliver a Notice of
Conversion/ Continuation, then, unless such Loan is repaid as provided
herein, the Borrower shall be deemed to have elected to convert such Loan
to a Base Rate Loan. No Loan may be converted into, or continued as, a
Eurodollar Loan if a Default or an Event of Default has occurred and is
continuing, unless the Administrative Agent and each of the Lenders shall
have otherwise consented in writing. No conversion of any Eurodollar Loans
shall be permitted except on the last day of the Interest Period in respect
thereof.
(d) Upon receipt of any Notice of Conversion/Continuation, the
Administrative Agent shall promptly notify each Lender of the details
thereof and of such Lender's portion of each such Loan.
Section 2.6. [Intentionally Omitted]
Section 2.7. Repayment of the Bridge Loan.
The outstanding principal amount of the Bridge Loan shall be due and
payable in full (together with accrued and unpaid interest thereon) on the
Maturity Date.
Section 2.8. Evidence of Indebtedness.
(a) Each Lender shall maintain in accordance with its usual practice
appropriate records evidencing the indebtedness of the Borrower to such
Lender resulting from each Loan made by such Lender from time to time,
including the amounts of principal and interest payable thereon and paid to
such Lender from time to time under this Agreement. The Administrative
Agent shall maintain appropriate records in which shall be recorded (i) the
Commitment of each Lender, (ii) the amount of each Loan made hereunder by
each Lender, the Type thereof and the Interest Period applicable thereto,
(iii) the date of each continuation thereof pursuant to Section 2.5, (iv)
the date of each conversion of all or a portion thereof to another Type
pursuant to Section 2.5, (v) the date and amount of any principal or
interest due and payable or to become due and payable from the Borrower to
each Lender hereunder in respect of such Loans and (vi) both the date and
amount of any sum received by the Administrative Agent hereunder from the
Borrower in respect of the Loans and each Lender's Pro Rata Share thereof.
The entries made in such records shall be prima facie evidence of the
existence and amounts of the obligations of the Borrower therein recorded;
provided, that the failure or delay of any Lender or the Administrative
Agent in maintaining or making entries into any such record or any error
therein shall not in any manner affect the obligation of the Borrower to
repay the Loans (both principal and unpaid accrued interest) of such Lender
in accordance with the terms of this Agreement.
(b) At the request of any Lender at any time, the Borrower agrees that
it will execute and deliver to such Lender a Note, payable to the order of
such Lender.
Section 2.9. Prepayments.
(a) The Borrower shall have the right at any time and from time to
time to prepay the Bridge Loan, in whole or in part, without premium or
penalty, by giving irrevocable written notice (or telephonic notice
promptly confirmed in writing) to the Administrative Agent no later than
(i) in the case of prepayment of any Eurodollar Loan, 11:00 a.m. not less
than three Business Days prior to any such prepayment, and (ii) in the case
of any prepayment of any Base Rate Loan, not less than one Business Day
prior to the date of such prepayment. Each such notice shall be irrevocable
and shall specify the proposed date of such prepayment and the principal
amount of each Loan or portion thereof to be prepaid. Upon receipt of any
such notice, the Administrative Agent shall promptly notify each affected
Lender of the contents thereof and of such Lender's Pro Rata Share of any
such prepayment. If such notice is given, the aggregate amount specified in
such notice shall be due and payable on the date designated in such notice,
together with accrued interest to such date on the amount so prepaid in
accordance with Section 2.10(c); provided, that if a Eurodollar Loan is
prepaid on a date other than the last day of an Interest Period applicable
thereto, the Borrower shall also pay all amounts required pursuant to
Section 2.16. Prepayments shall be in minimum amounts of $10,000,000 and
integral multiples of $1,000,000.
(b) The Borrower shall promptly notify the Administrative Agent upon
the receipt of any Net Cash Proceeds from the issuance of any Additional
Debt by KPP, the Borrower or any Significant Affiliate or the occurrence of
any Equity Event, and no later than the Business Day following the date of
receipt thereof, the Borrower shall prepay the Bridge Loan, together with
payment of all accrued and unpaid interest, fees, expenses and amounts
required pursuant to Section 2.16 of this Agreement, in an aggregate amount
equal to 100% (without duplication) of such Net Cash Proceeds, such
payments to be applied (i) first, to the payment of interest, fees,
expenses and such other amounts, pro rata to the Lenders based on the
amount of such interest, fees, expenses and other amounts outstanding at
such time and (ii) second to the payment of principal on the Bridge Loan,
pro rata to the Lenders based on their respective Pro Rata Shares.
Section 2.10. Interest on Loans.
(a) The Borrower shall pay interest on each Base Rate Loan at the Base
Rate in effect from time to time and on each Eurodollar Loan at the
Adjusted LIBO Rate for the applicable Interest Period in effect for such
Loan, plus, in each case, the Applicable Margin in effect from time to
time.
(b) If an Event of Default has occurred and is continuing, at the
option of the Required Lenders, the Borrower shall pay interest ("Default
Interest") with respect to all Eurodollar Loans at the rate otherwise
applicable for the then-current Interest Period plus an additional 2% per
annum until the last day of such Interest Period, and thereafter, and with
respect to all Base Rate Loans and all other Obligations hereunder (other
than Loans), at the rate in effect for Base Rate Loans, plus an additional
2% per annum. If the Bridge Loan is not paid in full on the Maturity Date,
interest shall accrue on the outstanding balance of the Bridge Loan from
and after such date at a per annum interest rate equal to the Base Rate
plus the Applicable Margin plus 4% per annum.
(c) Interest on the principal amount of all Loans shall accrue from
and including the date such Loans are made to but excluding the date of any
repayment thereof. Interest on all outstanding Base Rate Loans shall be
payable quarterly in arrears on December 31, 2002, March 31, 2003, and on
the Maturity Date. Interest on all outstanding Eurodollar Loans shall be
payable on the last day of each Interest Period applicable thereto, and, in
the case of any Eurodollar Loans having an Interest Period in excess of
three months, on each day that occurs every three months, after the initial
date of such Interest Period, and on the Maturity Date. Interest on any
Loan that is converted into a Loan of another Type or that is repaid or
prepaid shall be payable on the date of such conversion or on the date of
any such repayment or prepayment (on the amount repaid or prepaid) thereof.
All Default Interest shall be payable on demand.
(d) The Administrative Agent shall determine each interest rate
applicable to the Loans hereunder and shall promptly notify the Borrower
and the Lenders of such rate in writing (or by telephone, promptly
confirmed in writing). Any such determination shall be conclusive and
binding for all purposes, absent manifest error.
Section 2.11. [Intentionally Omitted]
Section 2.12. Computation of Interest.
Interest based on the Administrative Agent's prime rate pursuant to clause
(i) of the definition of "Base Rate" shall be computed on the basis of a year of
365 days (or 366 days in a leap year) and paid for the actual number of days
elapsed (including the first day but excluding the last day). All other interest
shall be computed on the basis of a year of 360 days and paid for the actual
number of days elapsed (including the first day but excluding the last day).
Section 2.13. Inability to Determine Interest Rates.
If prior to the commencement of any Interest Period for any Eurodollar
Loan, (i) the Administrative Agent shall have determined (which determination
shall be conclusive and binding upon the Borrower) that, by reason of
circumstances affecting the relevant interbank market, adequate means do not
exist for ascertaining LIBOR for such Interest Period, or (ii) the
Administrative Agent shall have received notice from the Required Lenders that
the Adjusted LIBO Rate does not adequately and fairly reflect the cost to such
Lenders (or Lender, as the case may be) of making, funding or maintaining their
Eurodollar Loans for such Interest Period, the Administrative Agent shall give
written notice (or telephonic notice, promptly confirmed in writing) to the
Borrower and to the Lenders as soon as practicable thereafter. Until the
Administrative Agent shall notify the Borrower and the Lenders that the
circumstances giving rise to such notice no longer exist, (i) the obligations of
the Lenders to make Eurodollar Loans or to continue or convert outstanding Loans
as or into Eurodollar Loans shall be suspended and (ii) all such affected Loans
shall be converted into Base Rate Loans on the last day of the then current
Interest Period applicable thereto unless the Borrower prepays such Loans in
accordance with this Agreement.
Section 2.14. Illegality.
If any Change in Law shall make it unlawful or impossible for any Lender to
make, maintain or fund any Eurodollar Loan and such Lender shall so notify the
Administrative Agent, the Administrative Agent shall promptly give notice
thereof to the Borrower and the other Lenders, whereupon until such Lender
notifies the Administrative Agent and the Borrower that the circumstances giving
rise to such suspension no longer exist, the obligation of such Lender to
continue or convert outstanding Loans as or into Eurodollar Loans, shall be
suspended, and any outstanding Eurodollar Loan shall be converted to a Base Rate
Loan either (i) on the last day of the then current Interest Period applicable
to such Eurodollar Loan if such Lender may lawfully continue to maintain such
Loan to such date or (ii) immediately if such Lender shall determine that it may
not lawfully continue to maintain such Eurodollar Loan to such date.
Notwithstanding the foregoing, the affected Lender shall, prior to giving such
notice to the Administrative Agent, designate a different Applicable Lending
Office if such designation would avoid the need for giving such notice and if
such designation would not otherwise be disadvantageous to such Lender in the
good faith exercise of its discretion.
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 that is not otherwise
included in the determination of the Adjusted LIBO Rate hereunder against
assets of, deposits with or for the account of, or credit extended by, any
Lender (except any such reserve requirement reflected in the Adjusted LIBO
Rate); or (ii) impose on any Lender or the Eurodollar interbank market any
other condition affecting this Agreement or any Eurodollar Loans made by
such Lender, and the result of the foregoing is to increase the cost to
such Lender of converting into, continuing or maintaining a Eurodollar Loan
or to reduce the amount received or receivable by such Lender hereunder
(whether of principal, interest or any other amount), then the Borrower
shall promptly pay, upon written notice from and demand by such Lender on
the Borrower (with a copy of such notice and demand to the Administrative
Agent), to the Administrative Agent for the account of such Lender, within
five Business Days after the date of such notice and demand, additional
amount or amounts sufficient to compensate such Lender for such additional
costs incurred or reduction suffered.
(b) If any Lender or the Issuing Bank shall have determined that on or
after the date of this Agreement 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 parent
corporation) as a consequence of its obligations hereunder to a level below
that which such Lender or such Lender's parent corporation could have
achieved but for such Change in Law (taking into consideration such
Lender's policies or the policies of such Lender's parent corporation with
respect to capital adequacy) then, from time to time, within five Business
Days after receipt by the Borrower of written demand by such Lender (with a
copy thereof to the Administrative Agent), the Borrower shall pay to such
Lender such additional amounts as will compensate such Lender or such
Lender's parent corporation for any such reduction suffered.
(c) A certificate of a Lender setting forth the amount or amounts
necessary to compensate such Lender or such Lender's parent corporation as
specified in subsection (a) or (b) of this Section shall be delivered to
the Borrower (with a copy to the Administrative Agent) and shall be
conclusive, absent manifest error. The Borrower shall pay any such Lender
such amount or amounts within 10 days after receipt thereof.
(d) Failure or delay on the part of any Lender to demand compensation
pursuant to this Section shall not constitute a waiver of such Lender's
right to demand such compensation.
Section 2.16. Funding Indemnity.
In the event of (i) the payment of any principal of a Eurodollar Loan other
than on the last day of the Interest Period applicable thereto (including as a
result of an Event of Default), (ii) the conversion or continuation of a
Eurodollar Loan other than on the last day of the Interest Period applicable
thereto, or (iii) the failure by the Borrower to borrow, prepay, convert or
continue any Eurodollar Loan on the date specified in any applicable notice
(regardless of whether such notice is withdrawn or revoked), then, in any such
event, the Borrower shall compensate each Lender, within five Business Days
after written demand from such Lender, for any loss, cost or expense
attributable to such event. In the case of a Eurodollar Loan, such loss, cost or
expense shall be deemed to include an amount determined by such Lender to be the
excess, if any, of (A) the amount of interest that would have accrued on the
principal amount of such Eurodollar Loan if such event had not occurred at the
Adjusted LIBO Rate applicable to such Eurodollar Loan for the period from the
date of such event to the last day of the then current Interest Period therefor
(or in the case of a failure to borrow, convert or continue, for the period that
would have been the Interest Period for such Eurodollar Loan) over (B) the
amount of interest that would accrue on the principal amount of such Eurodollar
Loan for the same period if the Adjusted LIBO Rate were set on the date such
Eurodollar Loan were prepaid or converted or the date on which the Borrower
failed to borrow, convert or continue such Eurodollar Loan. A certificate as to
any additional amount payable under this Section 2.16 submitted to the Borrower
by any Lender (with a copy to the Administrative Agent) shall be conclusive,
absent manifest error.
Section 2.17. Taxes.
(a) Any and all payments by or on account of any obligation of the
Borrower hereunder shall be made free and clear of and without deduction
for any Indemnified Taxes or Other Taxes; provided, that if the 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) the Administrative Agent, any
Lender shall receive an amount equal to the sum it would have received had
no such deductions been made, (ii) the Borrower shall make such deductions
and (iii) the Borrower shall pay the full amount deducted to the relevant
Governmental Authority in accordance with applicable law.
(b) In addition, the Borrower shall pay any Other Taxes to the
relevant Governmental Authority in accordance with applicable law.
(c) The Borrower shall indemnify the Administrative Agent and each
Lender, within five Business Days after written demand therefor, for the
full amount of any Indemnified Taxes or Other Taxes paid by the
Administrative Agent or such Lender, as the case may be, on or with respect
to any payment by or on account of any obligation of the Borrower hereunder
(including Indemnified Taxes or Other Taxes imposed or asserted on or
attributable to amounts payable under this Section) 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
Borrower 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 Borrower to a Governmental Authority, the Borrower 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) Each Foreign Lender represents and warrants to the Administrative
Agent and the Borrower that, as of the date such Lender becomes a party to
this Agreement, such Lender is entitled to an exemption from withholding
tax under the Code or any treaty to which the United States is a party with
respect to payments under this Agreement, and each Foreign Lender shall
deliver to the Borrower (with a copy to the Administrative Agent), at the
time or times prescribed by applicable law, such properly completed and
executed documentation prescribed by applicable law or reasonably requested
by the Borrower as will permit such payments to be made without
withholding. Without limiting the generality of the foregoing, each Foreign
Lender agrees that it will deliver to the Administrative Agent and the
Borrower (or in the case of a Participant, to the Lender from which the
related participation shall have been purchased), as appropriate, two duly
completed copies of (i) Internal Revenue Service Form W-8 ECI, or any
successor form thereto, certifying that the payments received from the
Borrower hereunder are effectively connected with such Foreign Lender's
conduct of a trade or business in the United States; or (ii) Internal
Revenue Service Form W-8 BEN, or any successor form thereto, certifying
that such Foreign Lender is entitled to benefits under an income tax treaty
to which the United States is a party that exempts from U.S. withholding
tax payments of interest hereunder; or (iii) Internal Revenue Service Form
W-8 BEN, or any successor form prescribed by the Internal Revenue Service,
together with a certificate (A) establishing that the payment to the
foreign lender qualifies as "portfolio interest" exempt from U.S.
withholding tax under Code section 871(h) or 881(c), and (B) stating that
(1) the Foreign Lender is not a bank for purposes of Code section
881(c)(3)(A), or the obligation of the Borrower hereunder is not, with
respect to such Foreign Lender, a loan agreement entered into in the
ordinary course of its trade or business, within the meaning of that
section; (2) the Foreign Lender is not a 10% shareholder of the Borrower
within the meaning of Code section 871(h)(3) or 881(c)(3)(B); and (3) the
Foreign Lender is not a controlled foreign corporation that is related to
the Borrower within the meaning of Code section 881(c)(3)(C); or (iv) such
other Internal Revenue Service forms as may be applicable to the Foreign
Lender, including Forms W-8 IMY or W-8 EXP. Each such Foreign Lender shall
deliver to the Borrower and the Administrative Agent such forms on or
before the date that it becomes a party to this Agreement (or in the case
of a Participant, on or before the date such Participant purchases the
related participation). In addition, each such Foreign Lender shall deliver
such forms promptly upon the obsolescence or invalidity of any form
previously delivered by such Foreign Lender. Each such Foreign Lender shall
promptly notify the Borrower and the Administrative Agent at any time that
it determines that it is no longer in a position to provide any previously
delivered certificate to the Borrower (or any other form of certification
adopted by the Internal Revenue Service for such purpose).
Section 2.18. Payments Generally; Pro Rata Treatment; Sharing of Set-offs.
(a) The Borrower shall make each payment required to be made by it
hereunder (whether of principal or interest, or of amounts payable under
Section 2.15, 2.16 or 2.17, or otherwise) prior to 12:00 noon (New York,
New York time) on the date when due in immediately available funds, without
set-off, counterclaims, or withholdings or deductions for taxes. 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 the Payment
Office, except that payments pursuant to Sections 2.15, 2.16 and 2.17 and
11.3 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 made 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 and interest
then due hereunder, such funds shall be applied (i) first, towards payment
of interest then due hereunder, ratably among the parties entitled thereto
in accordance with the amounts of interest then due to such parties, and
(ii) second, towards payment of 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 Loans that would result in such Lender receiving
payment of a greater proportion of the aggregate amount of its 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 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 Loans; provided, that (i) if any such
participation is purchased and all or any portion of the payment giving
rise thereto is recovered, such participation shall be rescinded and the
purchase price restored to the extent of such recovery, without interest,
and (ii) the provisions of this subsection shall not be construed to apply
to any payment made by the 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 to any assignee or participant, other than to the Borrower or any
Subsidiary or Affiliate thereof (as to which the provisions of this
subsection shall apply). The 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 the Borrower rights of set-off and counterclaim with
respect to such participation as fully as if such Lender were a direct
creditor of the Borrower in the amount of such participation.
(d) Unless the Administrative Agent shall have received notice from
the Borrower prior to the date on which any payment is due to the
Administrative Agent for the account of the Lenders hereunder that the
Borrower will not make such payment, the Administrative Agent may assume
that the Borrower has made such payment on such date in accordance herewith
and may, in reliance upon such assumption, distribute to the Lenders the
amount or amounts due. In such event, if the Borrower has not in fact made
such payment, then each Lender 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 greater of the Federal Funds Rate and a rate
determined by the Administrative Agent in accordance with banking industry
rules on interbank compensation.
(e) If any Lender shall fail to make any payment required to be made
by it pursuant to Section 2.4(a) or 11.3(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 of Obligations; Replacement of Lenders.
(a) If any Lender requests compensation under Section 2.15, or if the
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 sole judgment of such Lender, such
designation or assignment (i) would eliminate or reduce amounts payable
under Section 2.15 or Section 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 Borrower hereby
agrees to pay all costs and expenses incurred by any Lender in connection
with such designation or assignment.
(b) If any Lender requests compensation under Section 2.15, or if the
Borrower is required to pay any additional amount to any Lender or any
Governmental Authority of the account of any Lender pursuant to Section
2.17, or if any Lender defaults in its obligation to fund Loans hereunder,
then the Borrower 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 set forth in Section 11.4(b) all its interests, rights and
obligations under this Agreement to an assignee that shall assume such
obligations (which assignee may be another Lender); provided, that (i) the
Borrower 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 amount of all Loans owed to it, accrued interest
thereon and all other amounts payable to it hereunder, from the assignee
(in the case of such outstanding principal and accrued interest) and from
the Borrower (in the case of all other amounts) and (iii) in the case of 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 Borrower to
require such assignment and delegation cease to apply.
Article III CONDITIONS PRECEDENT TO LOANS
Section 3.1. Conditions To Effectiveness.
The obligations of the Lenders to make Loans hereunder shall not become
effective until the date on which each of the following conditions is satisfied
(or waived in accordance with Section 11.2).
(a) The Administrative Agent shall have received all amounts due and
payable under the Loan Documents on or prior to the Closing Date, including
reimbursement or payment of all out-of-pocket expenses (including
reasonable fees, charges and disbursements of counsel to the Administrative
Agent) required to be reimbursed or paid by the Borrower, under any Loan
Document.
(b) The Administrative Agent (or its counsel) shall have received the
following, each in the form specified or, if no form is specified, in form
and substance satisfactory to the Administrative Agent:
(i) a counterpart of this Agreement signed by or on behalf of
each party thereto or written evidence satisfactory to the
Administrative Agent (which may include telecopy transmission of a
signed signature page of this Agreement) that such party has signed a
counterpart of this Agreement;
(ii) if requested by any Lender, a Note payable to such Lender,
duly executed by the Borrower;
(iii) a counterpart of the Subsidiary Guarantee Agreement, duly
executed by each Guarantor;
(iv) a certificate of the Secretary or Assistant Secretary of
each Loan Party, attaching and certifying copies of its Constituent
Documents and of the resolutions of its board of directors (or other
comparable authorizations), authorizing the execution, delivery and
performance of the Loan Documents to which it is a party and
certifying the name, title and true signature of each officer of such
Loan Party executing the Loan Documents to which it is a party;
(v) certificates of good standing or existence, as the case may
be, from the Secretary of State of the jurisdiction of organization of
each Loan Party and each other jurisdiction where each such Loan Party
is (x) required to be qualified to do business as a foreign
corporation and (y) owns, leases or operates common carrier pipeline
assets;
(vi) a favorable written opinion of Fulbright & ▇▇▇▇▇▇▇▇, L.L.P.,
counsel to the Loan Parties, addressed to the Administrative Agent and
each of the Lenders, substantially in the form of Exhibit F;
(vii) a certificate, dated the Closing Date and signed by a
Responsible Officer of the Borrower, confirming that before and after
giving effect to the issuance of the Bridge Loan, (A) the
representations and warranties set forth in Article IV are true and
correct and (B) no Default or Event of Default has occurred and is
continuing, together with disbursement instructions for the Bridge
Loan;
(viii) copies of the Acquisition Agreement and the other
Acquisition Documents, each of which shall be in form and substance
reasonably satisfactory to Agent and its counsel and certified as
true, correct and complete by an authorized officer of Borrower,
together with evidence that (i) the aggregate purchase price for the
Acquisition, together with the aggregate purchase price for the Prior
Acquisition, is not less than $150,000,000, (ii) all conditions
precedent to the Acquisition have been satisfied or waived with the
consent of the Agent (other than the payment of the cash purchase
price payable on the Closing Date pursuant to the Acquisition
Agreement), and (iii) upon the funding of the Bridge Loan, the
Acquisition shall immediately be consummated in accordance with the
terms of the Acquisition Agreement and the other Acquisition
Documents;
(ix) copies of each of the Prior Acquisition Documents, each of
which shall be in form and substance reasonably satisfactory to Agent
and its counsel and certified as true, correct and complete by an
authorized officer of Borrower, together with evidence satisfactory to
the Agent that the Prior Acquisition has been consummated in
accordance with the terms thereof; and
(x) a certificate of the Secretary or Assistant Secretary of the
Borrower, attaching and certifying copies of all consents, approvals,
authorizations, registrations and filings and orders required or
advisable to be made or obtained under any Requirement of Law, or by
any contractual or legal obligation of each Loan Party, in connection
with the execution, delivery, performance, validity and enforceability
of the Loan Documents or any of the transactions contemplated thereby,
and of the Acquisition Documents and the transactions contemplated
thereby, and such consents, approvals, authorizations, registrations,
filings and orders shall be in full force and effect and all
applicable waiting periods shall have expired.
All Loan Documents, certificates, legal opinions and other documents
referred to in this Article III shall, unless otherwise specified, be delivered
to the Administrative Agent for the account of each Lender and, except for the
Notes, in sufficient counterparts or copies for each Lender.
Article IV REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants to the Administrative Agent and each
Lender as follows:
Section 4.1. Existence; Power.
Each Loan Party and each of its Subsidiaries (i) is duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
organization, (ii) has all requisite power and authority to carry on its
business as now conducted, and (iii) is duly qualified to do business and is in
good standing in each jurisdiction where such qualification is required, except
where a failure to be so qualified could not reasonably be expected to result in
a Material Adverse Effect.
Section 4.2. Organizational Power; Authorization; Enforceability.
The execution, delivery and performance by each Loan Party of the Loan
Documents, the Acquisition Documents, and the Prior Acquisition Documents to
which it is a party are within such Loan Party's organizational powers and have
been duly authorized by all necessary organizational, and if required,
stockholder, member or partner (as applicable), action. This Agreement has been
duly executed by KPP and the Borrower, and constitutes, and each other Loan
Document, each of the Acquisition Documents, and each of the Prior Acquisition
Documents, to which any Loan Party is a party, when executed and delivered by
each Loan Party, will constitute, the legal, valid and binding obligation of
each Loan Party which is a party thereto (as the case may be), enforceable
against KPP, the Borrower or such Loan Party (as the case may be) in accordance
with its respective terms.
Section 4.3. Governmental Approvals; No Conflicts.
The execution, delivery and performance by each Loan Party of each Loan
Document, each Acquisition Document, and each Prior Acquisition Document to
which it is a party (i) do not and will not require any consent or approval of,
registration or filing with, or any action by, any Governmental Authority,
except those as have been obtained or made and are in full force and effect,
(ii) do not and will not violate any applicable law or regulation or the
Constituent Documents of such Loan Party or any of its Subsidiaries or any
judgment or order of any Governmental Authority, (iii) do not and will not
violate or result in a default under any indenture, material agreement or other
material instrument binding on such Loan Party or any of its Subsidiaries or any
of its assets or give rise to a right thereunder to require any payment to be
made by such Loan Party or any of its Subsidiaries and (iv) do not and will not
result in the creation or imposition of any Lien on any asset of such Loan Party
or any of its Subsidiaries, except Liens (if any) created under the Loan
Documents.
Section 4.4. Financial Statements.
The Borrower has furnished to each Lender (i) the audited consolidated
balance sheet of KPP and its Subsidiaries as of December 31, 2001 and the
related consolidated statements of income, shareholders' equity and cash flows
for the fiscal year then ended prepared by KPMG LLP and (ii) the unaudited
consolidated balance sheet of KPP and its Subsidiaries as at the end of June 30,
2002, and the related unaudited consolidated statements of income and cash flows
for the fiscal quarter and year-to-date period then ending, certified by a
Responsible Officer of KPP. Such financial statements fairly present the
consolidated financial condition of KPP and its Subsidiaries as of such dates
and the consolidated results of operations for such periods in conformity with
GAAP consistently applied, subject to year end audit adjustments and the absence
of footnotes in the case of the statements referred to in clause (ii). Since
December 31, 2001, there have been no changes with respect to KPP and its
Subsidiaries or the Borrower which have had or could reasonably be expected to
have, singly or in the aggregate, a Material Adverse Effect.
Section 4.5. Litigation and Environmental Matters.
(a) No litigation, investigation or proceeding of or before any
arbitrators or Governmental Authorities is pending against or, to the
knowledge of the Borrower, threatened against or affecting any Loan Party
or any of its Subsidiaries (i) that could reasonably be expected to have,
either individually or in the aggregate, a Material Adverse Effect or (ii)
that in any manner draws into question the validity or enforceability of
this Agreement or any other Loan Document, any Acquisition Document, or any
Prior Acquisition Document.
(b) Except for the matters set forth on Schedule 4.5, no Loan Party
nor any of its 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, where any such event or circumstance described in
clauses (i) through (iv) above(A) could reasonably be expected to have,
either individually or in the aggregate, a Material Adverse Effect or (B)
in any manner draws into question the validity or enforceability of this
Agreement or any other Loan Document.
Section 4.6. Compliance with Laws and Agreements.
Each Loan Party and each of its Subsidiaries is in compliance with (i) all
applicable laws, rules, regulations and orders of any Governmental Authority,
and (ii) all indentures, agreements or other instruments binding upon it or its
properties, except where non-compliance, either singly or in the aggregate,
could not reasonably be expected to result in a Material Adverse Effect.
Section 4.7. Investment Company Act, Etc.
Neither KPP nor any of its Subsidiaries is (i) an "investment company", as
defined in, or subject to regulation under, the Investment Company Act of 1940,
as amended, (ii) a "holding company" as defined in, or subject to regulation
under, the Public Utility Holding Company Act of 1935, as amended or (iii)
otherwise subject to any other regulatory scheme limiting its ability to incur
debt.
Section 4.8. Taxes.
KPP and its Subsidiaries and each other Person the taxes of which KPP or
any Subsidiary of KPP could become liable have timely filed or caused to be
filed all Federal income tax returns and all other material tax returns that are
required to be filed by them, and have paid all taxes shown to be due and
payable on such returns or on any assessments made against it or its property
and all other taxes, fees or other charges imposed on it or any of its property
by any Governmental Authority, except (i) to the extent the failure to do so
would not have a Material Adverse Effect or (ii) where the same are currently
being contested in good faith by appropriate proceedings and for which KPP or
such Subsidiary, as the case may be, has set aside on its books adequate
reserves. The charges, accruals and reserves on the books of KPP and its
Subsidiaries in respect of such taxes are adequate, and no tax liabilities that
could be materially in excess of the amount so provided are anticipated.
Section 4.9. Margin Regulations.
None of the proceeds of any of the Loans will be used for "purchasing" or
"carrying" any "margin stock" with the respective meanings of each of such term
under Regulation U or for any purpose that violates the Margin Regulations.
Section 4.10. ERISA.
No ERISA Event has occurred or is reasonably expected to occur that, when
taken together with all other such ERISA Events, 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 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 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 4.11. Ownership of Property.
(a) Each of the Loan Party and its Subsidiaries has good title to, or
valid leasehold interests in, all of its real and personal property
material to the operation of its business.
(b) Each of the Loan Party and its Subsidiaries owns, or is licensed,
or otherwise has the right, to use, all patents, trademarks, service marks,
tradenames, copyrights and other intellectual property material to its
business, and the use thereof by such Loan Party and its Subsidiaries does
not infringe on the rights of any other Person, except for any such
infringements that, individually or in the aggregate, would not have a
Material Adverse Effect.
Section 4.12. Disclosure.
The Borrower has disclosed to the Lenders all agreements, instruments and
corporate or other restrictions to which each Loan Party or any of its
Subsidiaries is subject, and all other matters known to any of them, that,
individually or in the aggregate, could reasonably be expected to result in a
Material Adverse Effect. None of the reports (including without limitation all
reports that the Borrower is required to file with the Securities and Exchange
Commission), financial statements, certificates or other information furnished
by or on behalf of any Loan Party to the Administrative Agent or any Lender in
connection with the negotiation or syndication of this Agreement or any other
Loan Document or delivered hereunder or thereunder (as modified or supplemented
by any other information so furnished) contains any material misstatement of
fact or omits to state any material fact necessary to make the statements
therein, taken as a whole, in light of the circumstances under which they were
made, not misleading; provided, that with respect to projected financial
information, the Borrower represents only that such information was prepared in
good faith based upon assumptions believed to be reasonable at the time.
Section 4.13. Labor Relations.
There are no strikes, lockouts or other material labor disputes or
grievances against any Loan Party or any of its Subsidiaries, or, to the
Borrower's knowledge, threatened against or affecting any Loan Party or any of
its Subsidiaries, and no significant unfair labor practice, charges or
grievances are pending against the Borrower or any of its Subsidiaries, or to
the Borrower's knowledge, threatened against any of them before any Governmental
Authority. All payments due from any Loan Party or any of its Subsidiaries
pursuant to the provisions of any collective bargaining agreement have been paid
or accrued as a liability on the books of such Loan Party or such Subsidiary (as
applicable), except where the failure to do so could not reasonably be expected
to have a Material Adverse Effect.
Section 4.14. Acquisition Documents.
The Acquisition Agreement, each of the other Acquisition Documents, and
each of the Prior Acquisition Documents is the legal, valid and binding
obligation of each party thereto, enforceable against each such party in
accordance with its terms.
Section 4.15. Subsidiaries, Significant Affiliates and Guarantors.
Schedule 4.15 sets forth the name of, the ownership interest of KPP in, the
jurisdiction of incorporation of, and the type of, each Subsidiary of KPP and
each Significant Affiliate and identifies each Subsidiary of KPP and each
Significant Affiliate that is a Guarantor, in each case, as of the date hereof.
Section 4.16. Liens.
Schedule 7.2 sets forth all Liens existing on the date hereof on any
property or asset of KPP or any Subsidiary of KPP.
Article V AFFIRMATIVE COVENANTS
KPP and the Borrower (as applicable) covenant and agree that so long as any
Lender has a Commitment hereunder or the principal of and interest on any Loan
or any other amount payable hereunder remains unpaid:
Section 5.1. Financial Statements and Other Information.
The Borrower will deliver to the Administrative Agent and each Lender:
(a) as soon as available and in any event within 95 days after the end
of each fiscal year of KPP, a copy of the annual audited report for such
fiscal year for KPP and its Subsidiaries, containing a consolidated balance
sheet of KPP and its Subsidiaries as of the end of such fiscal year and the
related consolidated statements of income, stockholders' equity and cash
flows (together with all footnotes thereto) of KPP and its Subsidiaries for
such fiscal year, setting forth in each case in comparative form the
figures for the previous fiscal year, all in reasonable detail and reported
on by KPMG LLP or other independent public accountants of nationally
recognized standing (without a "going concern" or like qualification,
exception or explanation and without any qualification or exception as to
scope of such audit) to the effect that such financial statements present
fairly in all material respects the financial condition and the results of
operations of KPP and its Subsidiaries for such fiscal year on a
consolidated basis in accordance with GAAP and that the examination by such
accountants in connection with such consolidated financial statements has
been made in accordance with generally accepted auditing standards;
(b) as soon as available and in any event within 50 days after the end
of each of the first three fiscal quarters of each fiscal year of KPP, an
unaudited consolidated balance sheet of KPP and its Subsidiaries as of the
end of such fiscal quarter and the related unaudited consolidated
statements of income and cash flows of KPP and its Subsidiaries for such
fiscal quarter and the then elapsed portion of such fiscal year, setting
forth in each case in comparative form the figures for the corresponding
quarter and the corresponding portion of KPP's previous fiscal year, all
certified by a Responsible Officer of KPP as presenting fairly in all
material respects the financial condition and results of operations of KPP
and its Subsidiaries on a consolidated basis in accordance with GAAP,
subject to normal year-end audit adjustments and the absence of footnotes;
(c) concurrently with the delivery of the financial statements
referred to in subsections (a) and (b) above, a certificate of a
Responsible Officer of the Borrower, (i) certifying as to whether a Default
or Event of Default has occurred and is continuing on the date of such
certificate, and if a Default or an Event of Default then has occurred and
is continuing, specifying the details thereof and the action that the
Borrower has taken or proposes to take with respect thereto, (ii) setting
forth in reasonable detail calculations demonstrating compliance with
Article VI and (iii) stating whether any change in GAAP or the application
thereof affecting the calculations described in clause (ii) above has
occurred since the date of the audited financial statements of KPP referred
to in Section 4.4 and, if any change has occurred, specifying the effect of
such change on the financial statements accompanying such certificate;
(d) concurrently with the delivery of the financial statements
referred to in subsection (a) above, a certificate of the accounting firm
that reported on such financial statements stating whether it obtained any
knowledge during the course of its examination of such financial statements
of any Default or Event of Default (which certificate may be limited to the
extent required by accounting rules or guidelines);
(e) promptly after the same become publicly available, copies of all
periodic and other reports, proxy statements and other materials filed with
the Securities and Exchange Commission, or any Governmental Authority
succeeding to any or all functions of said Commission, or with any national
securities exchange, or distributed by KPP or the Borrower to its security
holders generally; and
(f) promptly following any request therefor, such other information
regarding the results of operations, business affairs and financial
condition of KPP, the Borrower or of their respective Subsidiaries as the
Administrative Agent or any Lender may reasonably request.
Section 5.2. Notices of Material Events.
The Borrower will furnish to the Administrative Agent and each Lender
prompt written notice of the following, in each case, accompanied by a written
statement of a Responsible Officer of the Borrower setting forth the details of
the event or development requiring such notice and any action taken or proposed
to be taken with respect thereto:
(a) the occurrence of any Default or Event of Default;
(b) the filing or commencement of any action, suit or proceeding by or
before any arbitrator or Governmental Authority against or, to the
knowledge of the Borrower, affecting any Loan Party or any Subsidiary of
any Loan Party that, if adversely determined, could reasonably be expected
to result in a Material Adverse Effect;
(c) the occurrence of any event or any other development by which any
Loan Party or any Subsidiary of any Loan Party (i) fails 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) becomes
subject to any Environmental Liability, (iii) receives notice of any claim
with respect to any Environmental Liability, or (iv) becomes aware of any
basis for any Environmental Liability and in each of the preceding clauses,
which individually or in the aggregate, could reasonably be expected to
result in a Material Adverse Effect;
(d) 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 KPP and its Subsidiaries in an aggregate amount
exceeding $5,000,000; and
(e) any other development that results in, or could reasonably be
expected to result in, a Material Adverse Effect.
Section 5.3. Existence; Conduct of Business.
KPP will, and will cause each of its Subsidiaries to, do or cause to be
done all things necessary to preserve, renew and maintain in full force and
effect its legal existence and its respective rights, licenses, permits,
privileges, franchises, patents, copyrights, trademarks and trade names material
to the conduct of its business and will continue to engage in the same business
as presently conducted or such other businesses that are reasonably related
thereto; provided, that nothing in this Section shall prohibit any merger,
consolidation, liquidation or dissolution permitted under Section 7.3.
Section 5.4. Compliance with Laws, Etc.
KPP will, and will cause each of its Subsidiaries to, comply with all laws,
rules, regulations and requirements of any Governmental Authority applicable to
its properties, except where the failure to do so, either individually or in the
aggregate, could not reasonably be expected to result in a Material Adverse
Effect.
Section 5.5. Payment of Obligations.
KPP will, and will cause each of its Subsidiaries to, pay and discharge at
or before maturity, all of its obligations and liabilities (including without
limitation all tax liabilities and claims that could result in a statutory Lien)
before the same shall become delinquent or in default, except where (i) the
validity or amount thereof is being contested in good faith by appropriate
proceedings, (ii) KPP or such Subsidiary has set aside on its books adequate
reserves with respect thereto in accordance with GAAP and (iii) the failure to
make payment pending such contest could not reasonably be expected to result in
a Material Adverse Effect.
Section 5.6. Books and Records.
KPP will, and will cause each of its Subsidiaries to, keep proper books of
record and account in which full, true and correct entries shall be made of all
dealings and transactions in relation to its business and activities to the
extent necessary to prepare the consolidated financial statements of Borrower in
conformity with GAAP.
Section 5.7. Visitation, Inspection, Etc.
KPP will, and will cause each of its Subsidiaries to, permit any
representative of the Administrative Agent or any Lender, to visit and inspect
its properties, to examine its books and records and to make copies and take
extracts therefrom, and to discuss its affairs, finances and accounts with any
of its officers and with its independent certified public accountants, all at
such reasonable times and as often as the Administrative Agent or any Lender may
reasonably request after reasonable prior notice to KPP; provided, however, if
an Event of Default has occurred and is continuing, no prior notice shall be
required.
Section 5.8. Maintenance of Properties; Insurance.
KPP will, and will cause each of its Subsidiaries to, (i) keep and maintain
all property material to the conduct of its business in good working order and
condition, except for ordinary wear and tear and except where the failure to do
so, either individually or in the aggregate, could not reasonably be expected to
result in a Material Adverse Effect and (ii) maintain with financially sound and
reputable insurance companies, insurance with respect to its properties and
business, and the properties and business of its Subsidiaries, against loss or
damage of the kinds customarily insured against by companies in the same or
similar businesses operating in the same or similar locations.
Section 5.9. Use of Proceeds.
The Borrower will use the proceeds of all Loans to finance the Acquisition
and up to $10,000,000 of the proceeds for other general corporate purposes of
the Borrower and its Subsidiaries, including without limitation replenishment of
cash used to finance the Prior Acquisition. No part of the proceeds of any Loan
will be used, whether directly or indirectly, for any purpose that would violate
any rule or regulation of the Board of Governors of the Federal Reserve System,
including Regulation T, U or X.
Section 5.10. Additional Subsidiaries.
If any additional Significant Subsidiary (other than any Excluded
Subsidiary and any Foreign Subsidiary) is acquired or formed after the date
hereof, KPP will, within ten business days after such Significant Subsidiary is
acquired or formed, notify the Administrative Agent and the Lenders thereof and
will cause such Significant Subsidiary to become a Guarantor by executing
agreements in the form of Annex I to Exhibit C and will cause such Significant
Subsidiary to deliver simultaneously therewith such certificates, documents,
opinions of counsel and other information regarding such Guarantor and the
enforceability against such Guarantor of the Subsidiary Guarantee Agreement as
the Administrative Agent may reasonably request.
Article VI FINANCIAL COVENANTS
KPP and the Borrower (as applicable) covenant and agree that so long as any
principal of or interest on the Bridge Loan remains unpaid or any other amount
payable hereunder remains unpaid:
Section 6.1. Funded Debt to EBITDA.
KPP and its Subsidiaries will maintain, as of the end of each fiscal
quarter of KPP, a ratio of Consolidated Funded Debt to Consolidated EBITDA of
not more than 4.25 to 1.00, measured, in each case, for the four-fiscal quarter
period ending on each date of such determination. Section 6.2. Consolidated
EBITDA to Consolidated Interest Expense.
KPP and its Subsidiaries will maintain, as of the end of each fiscal
quarter of KPP, a ratio of Consolidated EBITDA to Consolidated Interest Expense
of not less than 3.00 to 1.00, measured, in each case, for the four-fiscal
quarter period ending on each date of such determination.
Section 6.3. Consolidated Net Worth.
KPP will not permit its Consolidated Net Worth at any time to be less than
an amount equal to 80% of the Consolidated Net Worth as at December 31, 1999,
plus 80% of the Net Cash Proceeds of any Equity Event by KPP or any of its
Subsidiaries.
Article VII NEGATIVE COVENANTS
KPP and the Borrower (as applicable) covenant and agree that so long as any
principal of or interest on the Bridge Loan remains unpaid or any other amount
payable hereunder remains unpaid:
Section 7.1. Indebtedness.
KPP will not, and will not permit any of its Subsidiaries to, create,
incur, assume or suffer to exist any Indebtedness, except:
(a) Indebtedness created pursuant to the Loan Documents;
(b) Indebtedness created pursuant to the Revolving Credit Agreement
and any Guarantees of such Indebtedness by any Guarantors; and
(c) other Indebtedness of KPP and the Borrower, the incurrence of
which does not otherwise result in the occurrence of a Default or an Event
of Default.
Section 7.2. Negative Pledge.
KPP will not, and will not permit any of its Subsidiaries to, create,
incur, assume or suffer to exist any Lien on any of its assets or property now
owned or hereafter acquired, except:
(a) Permitted Encumbrances;
(b) any Liens on any property or asset of KPP or any Subsidiary of KPP
existing on the date hereof set forth on Schedule 7.2; provided, that such
Lien shall not apply to any other property or asset of KPP or any such
Subsidiary;
(c) purchase money Liens upon or in any fixed or capital assets to
secure the purchase price or the cost of construction or improvement of
such fixed or capital assets or to secure Indebtedness incurred solely for
the purpose of financing the acquisition, construction or improvement of
such fixed or capital assets (including Liens securing Capital Lease
Obligations); provided, that (i) such Lien attaches to such asset
concurrently or within 90 days after the acquisition, improvement or
completion of the construction thereof; (ii) such Lien does not extend to
any other asset; and (iii) the Indebtedness secured thereby does not exceed
the cost of acquiring, constructing or improving such fixed or capital
assets;
(d) any Lien (i) existing on any asset of any Person at the time such
Person becomes a Subsidiary of KPP, (ii) existing on any asset of any
Person at the time such Person is merged with or into KPP or any Subsidiary
of KPP or (iii) existing on any asset prior to the acquisition thereof by
KPP or any Subsidiary of KPP; provided, that any such Lien was not created
in the contemplation of any of the foregoing and any such Lien secures only
those obligations which it secures on the date that such Person becomes a
Subsidiary or the date of such merger or the date of such acquisition; and
(e) extensions, renewals, or replacements of any Lien referred to in
subsections (a) through (d) of this Section; provided, that the principal
amount of the Indebtedness secured thereby is not increased and that any
such extension, renewal or replacement is limited to the assets originally
encumbered thereby.
Section 7.3. Fundamental Changes.
(a) KPP will not, and will not permit any Subsidiary to, merge into or
consolidate into any other Person, or permit any other Person to merge into
or consolidate with it, or sell, lease, transfer or otherwise dispose of
(in a single transaction or a series of transactions) all or substantially
all of its assets (in each case, whether now owned or hereafter acquired)
or all or substantially all of the stock of any of its Subsidiaries (in
each case, whether now owned or hereafter acquired) or liquidate or
dissolve; provided, that if at the time thereof and immediately after
giving effect thereto, no Default or Event of Default shall have occurred
and be continuing (i) any Subsidiary of the Borrower may merge with a
Person if such Subsidiary is the surviving Person, (ii) any Subsidiary may
merge into another Subsidiary; provided, that if any party to such merger
is a Guarantor, the Guarantor shall be the surviving Person, (iii) any
Subsidiary of the Borrower may sell, transfer, lease or otherwise dispose
of all or substantially all of its assets to the Borrower or to a Guarantor
and (iv) any Subsidiary (other than a Guarantor) may liquidate or dissolve
if the Borrower determines in good faith that such liquidation or
dissolution is in the best interests of the Borrower and is not materially
disadvantageous to the Lenders.
(b) KPP will not, and will not permit any of its Subsidiaries to,
engage in any business other than businesses of the type conducted by KPP
and its Subsidiaries on the date hereof and businesses reasonably related
thereto.
Section 7.4. Investments, Loans, Etc.
KPP will not, and will not permit any of its Subsidiaries to, purchase,
hold or acquire (including pursuant to any merger with any Person that was not a
wholly-owned Subsidiary prior to such merger), any common stock, evidence of
indebtedness or other securities (including any option, warrant, or other right
to acquire any of the foregoing) of, make or permit to exist any loans or
advances to, Guarantee any obligations of, or make or permit to exist any
investment or any other interest in, any other Person or purchase or otherwise
acquire (in one transaction or a series of transactions) any assets of any other
Person (all of the foregoing being collectively called "Investments"), except:
(a) Investments (other than Permitted Investments) existing on the
date hereof (including Investments in Subsidiaries);
(b) Permitted Investments and the Investment contemplated by the
Acquisition Agreement;
(c) Guarantees constituting Indebtedness permitted by Section 7.1;
provided, that the aggregate principal amount of Indebtedness of
Subsidiaries that are not Guarantors that are Guaranteed by any Loan Party
shall be subject to the limitation set forth in subsection (d) hereof;
(d) the Acquisition, to the extent that the aggregate purchase price
paid does not exceed $150,000,000;
(e) Investments made by KPP or any Subsidiary of KPP (in each case,
whether directly or indirectly, through one or more subsidiaries of KPP or
one or more Excluded Affiliates), provided, that for any such Investment of
at least $50,000,000 individually, and for each such Investment of at least
$10,000,000 individually if the aggregate of all such Investments during
any fiscal year of KPP shall have exceeded $75,000,000, KPP shall first
have provided to the Administrative Agent financial statements of KPP and
its consolidated Subsidiaries demonstrating, to the reasonable satisfaction
of the Administrative Agent, that after giving pro forma effect to such
Investment, KPP shall continue to be in compliance with Article VI hereof;
(f) loans or advances to employees, officers or directors of KPP or
any Subsidiary of KPP in the ordinary course of business for travel,
relocation and related expenses; provided, however, that the aggregate
amount of all such loans and advances does not exceed $1,000,000 at any
time; and
(g) pursuant to Hedging Agreements permitted by Section 7.10.
Section 7.5. Restricted Payments.
KPP will not, and will not permit its Subsidiaries to, make or agree to
make, directly or indirectly, any Distribution, or make any payment on account
of, or set apart assets for a sinking or other analogous fund for, the purchase,
redemption, retirement, defeasance or other acquisition of, any Equity Interests
or Indebtedness subordinated to the Obligations of the Borrower or any options,
warrants, or other rights to purchase Equity Interests or such Indebtedness,
whether now or hereafter outstanding (each, a "Restricted Payment"), except for
(i) Distributions payable by KPP solely in its Equity Interests, (ii) Restricted
Payments made by any Subsidiary of KPP to KPP or to another Subsidiary of KPP
and (iii) cash Distributions paid on, and cash redemptions of, the Equity
Interests of KPP or the Borrower; provided, that no Default or Event of Default
has occurred and is continuing at the time such Distribution is paid or
redemption is made.
Section 7.6. Sale of Assets.
KPP will not, and will not permit any of its Subsidiaries (other than any
Excluded Subsidiary) to, convey, sell, lease, assign, transfer or otherwise
dispose of, any of its assets, business or property, whether now owned or
hereafter acquired, other than in compliance with Section 2.9(b), and in any
event, KPP will not, and will not permit any of its Subsidiaries (other than any
Excluded Subsidiary), to consummate any Asset Disposition without the prior
written consent of the Required Lenders.
Section 7.7. Transactions with Affiliates.
KPP will not, and will not permit any of its 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 (i) in the ordinary course of
business at prices and on terms and conditions not less favorable to KPP or such
Subsidiary than could be obtained on an arm's-length basis from unrelated third
parties, (ii) transactions between or among KPP and its wholly-owned
Subsidiaries not involving any other Affiliates, and (iii) any Restricted
Payment permitted by Section 7.5.
Section 7.8. Restrictive Agreements.
KPP will not, and will not permit any Subsidiary of KPP (other than any
Excluded Subsidiary) to, directly or indirectly, enter into, incur or permit to
exist any agreement (i) that prohibits, restricts or imposes any condition upon
the ability of any Subsidiary of KPP to make Distributions with respect to its
Equity Interests, to make or repay loans or advances to Borrower or any
Guarantor, to guarantee Indebtedness of Borrower or any Guarantor or to transfer
any of its property or assets to Borrower or any Guarantor, or (ii) that
contains any prohibitions or restrictions on KPP or such Subsidiary that are
more restrictive than the covenants contained in this Agreement; provided, that
(A) the foregoing shall not apply to restrictions or conditions imposed by law
or by this Agreement, any other Loan Document, the Revolving Credit Agreement or
the Senior Notes Indenture, and (B) the foregoing shall not apply to customary
restrictions and conditions contained in agreements relating to the sale of any
Subsidiary of KPP pending such sale, provided such restrictions and conditions
apply only to the Subsidiary that is sold and such sale is permitted hereunder.
Section 7.9. Sale and Leaseback Transactions.
KPP will not, and will not permit any of its Subsidiaries (other than any
Excluded Subsidiary) to, enter into any arrangement, directly or indirectly,
whereby it shall sell or transfer any property, real or personal, used or useful
in its business, whether now owned or hereinafter acquired, and thereafter rent
or lease such property or other property that it intends to use for
substantially the same purpose or purposes as the property sold or transferred.
Section 7.10. Hedging Agreements.
KPP will not, and will not permit any of the Subsidiaries to, enter into
any Hedging Agreement, other than Hedging Agreements entered into in the
ordinary course of business to hedge or mitigate risks to which KPP or any such
Subsidiary is exposed in the conduct of its business or the management of its
liabilities. Solely for the avoidance of doubt, KPP acknowledges that a Hedging
Agreement entered into for speculative purposes or of a speculative nature
(which shall be deemed to include any Hedging Agreement under which KPP or any
Subsidiary of KPP is or may become obliged to make any payment (A) in connection
with the purchase by any third party of any common stock or any Indebtedness or
(B) as a result of changes in the market value of any common stock or any
Indebtedness) is not a Hedging Agreement entered into in the ordinary course of
business to hedge or mitigate risks.
Section 7.11. Amendment to Material Documents.
KPP will not, and will not permit any Subsidiary of KPP to, amend, modify
or waive any of its rights in a manner materially adverse to the Lenders under
(i) its Constituent Documents or (ii) the Acquisition Agreement or the other
Acquisition Documents.
Section 7.12. Accounting Changes.
KPP will not, and will not permit any Subsidiary of KPP to, make any
significant change in accounting treatment or reporting practices, except as
required by GAAP, or change the fiscal year of KPP or of any such Subsidiary,
except to change the fiscal year of any such Subsidiary to conform its fiscal
year to that of KPP.
Article VIII KPP GUARANTEE
The Borrower is a direct and wholly-owned subsidiary of KPP, and KPP will
derive substantial benefit from the making of the Loans by the Lenders. As
consideration therefor and in order to induce the Lenders to make Loans, KPP
agrees as follows:
Section 8.1. Guarantee.
KPP unconditionally guarantees, jointly with the other Guarantors and
severally, as a primary obligor and not merely as a surety, (i) the due and
punctual payment of (A) the principal of and premium, if any, and interest
(including interest accruing during the pendency of any bankruptcy, insolvency,
receivership or other similar proceeding, regardless of whether allowed or
allowable in such proceeding) on the Loans, when and as due, whether at
maturity, by acceleration, upon one or more dates set for prepayment or
otherwise, and (B) all other monetary obligations, including fees, costs,
expenses and indemnities, whether primary, secondary, direct, contingent, fixed
or otherwise (including monetary obligations incurred during the pendency of any
bankruptcy, insolvency, receivership or other similar proceeding, regardless of
whether allowed or allowable in such proceeding), of the Loan Parties to the
Administrative Agent and the Lenders under this Agreement and the other Loan
Documents, (ii) the due and punctual performance of all covenants, agreements,
obligations and liabilities of the other Loan Parties under or pursuant to this
Agreement and the other Loan Documents; and (iii) the due and punctual payment
and performance of all obligations of the Borrower, monetary or otherwise, under
each Hedging Agreement entered into with a counterparty that was a Lender or an
Affiliate of a Lender at the time such Hedging Agreement was entered into (all
the monetary and other obligations referred to in the preceding clauses (i)
through (iii) being collectively called the "Guaranteed Obligations"). KPP
further agrees that the Guaranteed Obligations may be extended or renewed, in
whole or in part, without notice to or further assent from it, and that it will
remain bound upon its guarantee notwithstanding any extension or renewal of any
Guaranteed Obligation.
Section 8.2. Guaranteed Obligations Not Waived.
To the fullest extent permitted by applicable law, KPP waives presentment
to, demand of payment from and protest to the other Loan Parties of any of the
Guaranteed Obligations, and also waives notice of acceptance of its guarantee
and notice of protest for nonpayment. To the fullest extent permitted by
applicable law, the obligations of KPP hereunder shall not be affected by (i)
the failure of the Administrative Agent or any Lender to assert any claim or
demand or to enforce or exercise any right or remedy against the Borrower or any
other Guarantor under the provisions of this Agreement, any other Loan Document
or otherwise, (ii) any rescission, waiver, amendment or modification of, or any
release from any of the terms or provisions of, this Agreement, any other Loan
Document or any other agreement, including with respect to any other Guarantor
under the Subsidiary Guarantee Agreement, or (iii) the failure to perfect any
security interest in, or the release of, any of the security held by or on
behalf of the Administrative Agent or any Lender.
Section 8.3. Guarantee of Payment.
KPP further agrees that its guarantee constitutes a guarantee of payment
when due and not of collection, and waives any right to require that any resort
be had by the Administrative Agent or any Lender to any of the security held for
payment of the Guaranteed Obligations or to any balance of any deposit account
or credit on the books of the Administrative Agent or any Lender in favor of the
Borrower or any other Person.
Section 8.4. No Discharge or Diminishment of Guarantee.
The obligations of KPP hereunder shall not be subject to any reduction,
limitation, impairment or termination for any reason (other than the
indefeasible payment in full in cash of the Guaranteed Obligations), including
any claim of waiver, release, surrender, alteration or compromise of any of the
Guaranteed Obligations, and shall not be subject to any defense or setoff,
counterclaim, recoupment or termination whatsoever by reason of the invalidity,
illegality or unenforceability of the Guaranteed Obligations or otherwise.
Without limiting the generality of the foregoing, the obligations of KPP
hereunder shall not be discharged or impaired or otherwise affected by the
failure of the Administrative Agent or any Lender to assert any claim or demand
or to enforce any remedy under this Agreement, any other Loan Document or any
other agreement, by any waiver or modification of any provision of any thereof,
by any default, failure or delay, willful or otherwise, in the performance of
the Guaranteed Obligations, or by any other act or omission that may or might in
any manner or to any extent vary the risk of KPP or that would otherwise operate
as a discharge of a guarantor as a matter of law or equity (other than the
indefeasible payment in full in cash of all the Guaranteed Obligations).
Section 8.5. Defenses of Borrower Waived.
To the fullest extent permitted by applicable law, KPP waives any defense
based on or arising out of any defense of any Loan Party or the unenforceability
of the Guaranteed Obligations or any part thereof from any cause, or the
cessation from any cause of the liability of any Loan Party, other than the
final and indefeasible payment in full in cash of the Guaranteed Obligations.
The Administrative Agent and the Lenders may, at their election, foreclose on
any security held by one or more of them by one or more judicial or nonjudicial
sales, accept an assignment of any such security in lieu of foreclosure,
compromise or adjust any part of the Guaranteed Obligations, make any other
accommodation with the other Loan Parties or any other guarantor, without
affecting or impairing in any way the liability of KPP hereunder except to the
extent the Guaranteed Obligations have been fully, finally and indefeasibly paid
in cash. Pursuant to applicable law, KPP waives any defense arising out of any
such election even though such election operates, pursuant to applicable law, to
impair or to extinguish any right of reimbursement or subrogation or other right
or remedy of KPP against the Borrower or any other Guarantor or guarantor, as
the case may be, or any security.
Section 8.6. Agreement to Pay; Subordination.
In furtherance of the foregoing and not in limitation of any other right
that the Administrative Agent or any Lender has at law or in equity against KPP
by virtue hereof, upon the failure of the Borrower or any other Loan Party to
pay any Guaranteed Obligation when and as the same shall become due, whether at
maturity, by acceleration, after notice of prepayment or otherwise, KPP hereby
promises to and will forthwith pay, or cause to be paid, to the Administrative
Agent for the benefit of the Lenders in cash the amount of such unpaid
Guaranteed Obligations. Upon payment by KPP of any sums to the Administrative
Agent, all rights of KPP against any Loan Party arising as a result thereof by
way of right of subrogation, contribution, reimbursement, indemnity or otherwise
shall in all respects be subordinate and junior in right of payment to the prior
indefeasible payment in full in cash of all the Guaranteed Obligations. In
addition, any indebtedness of any other Loan Party now or hereafter held by KPP
is hereby subordinated in right of payment to the prior payment in full in cash
of the Guaranteed Obligations. If any amount shall erroneously be paid to KPP on
account of (i) such subrogation, contribution, reimbursement, indemnity or
similar right or (ii) any such indebtedness of such Loan Party, such amount
shall be held in trust for the benefit of the Administrative Agent and the
Lenders and shall forthwith be paid to the Administrative Agent to be credited
against the payment of the Guaranteed Obligations, whether matured or unmatured,
in accordance with the terms of the Loan Documents.
Section 8.7. Information.
KPP assumes all responsibility for being and keeping itself informed of the
other Loan Parties' financial condition and assets, and of all other
circumstances bearing upon the risk of nonpayment of the Guaranteed Obligations
and the nature, scope and extent of the risks that KPP assumes and incurs
hereunder, and agrees that none of the Administrative Agent or the Lenders will
have any duty to advise KPP of information known to it or any of them regarding
such circumstances or risks.
Section 8.8. Representations and Warranties.
KPP represents and warrants as to itself that all representations and
warranties relating to it contained in this Agreement are true and correct.
Section 8.9. Termination.
The guarantees made hereunder (i) shall terminate when all the Guaranteed
Obligations have been paid in full in cash, and (ii) shall continue to be
effective or be reinstated, as the case may be, if at any time payment, or any
part thereof, of any Guaranteed Obligation is rescinded or must otherwise be
restored by any Lender or any Guarantor upon the bankruptcy or reorganization of
the Borrower, any Guarantor or otherwise. In connection with the foregoing, the
Administrative Agent shall execute and deliver to KPP or KPP's designee, at
KPP's expense, any documents or instruments that KPP shall reasonably request
from time to time to evidence such termination and release.
Article IX EVENTS OF DEFAULT
Section 9.1. Events of Default.
If any of the following events (each an "Event of Default") shall occur:
(a) the Borrower shall fail to pay any principal of the Bridge Loan
when and as the same shall become due and payable, whether at the due date
thereof or at a date fixed for prepayment or otherwise; or
(b) the Borrower shall fail to pay any interest on the Bridge Loan or
any other amount (other than an amount payable under subsection (a) of this
Article) payable under this Agreement or any other Loan Document, when and
as the same shall become due and payable, and such failure shall continue
unremedied for a period of 3 Business Days; or
(c) any representation or warranty made or deemed made by or on behalf
of any Loan Party in or in connection with this Agreement or any other Loan
Document (including the Schedules attached thereto) and any amendments or
modifications hereof or waivers hereunder, or in any certificate, report,
financial statement or other document submitted to the Administrative Agent
or the Lenders by any Loan Party or any representative of any Loan Party
pursuant to or in connection with this Agreement or any other Loan Document
shall prove to be incorrect in any material respect when made or deemed
made or submitted; or
(d) the Borrower or KPP, as applicable, shall fail to observe or
perform any covenant or agreement contained in Section 5.2(a) or 5.3 (with
respect to KPP's or the Borrower's existence) or Article VI or VII; or
(e) any Loan Party shall fail to observe or perform any covenant or
agreement contained in any Loan Document (other than those referred to in
subsections (a), (b) and (d) above), and such failure shall remain
unremedied for 30 days after the earlier of (i) any officer of the Borrower
becomes aware of such failure, or (ii) notice thereof shall have been given
to the Borrower by the Administrative Agent or any Lender; or
(f) the Borrower, KPP or any Significant Affiliate (whether as primary
obligor or as guarantor or other surety) shall fail to pay any principal of
or premium or interest on any Material Indebtedness that is outstanding,
when and as the same shall become due and payable (whether at scheduled
maturity, required prepayment, acceleration, demand or otherwise), and such
failure shall continue after the applicable grace period, if any, specified
in the agreement or instrument evidencing such Indebtedness; or any other
event shall occur or condition shall exist under any agreement or
instrument relating to such Indebtedness and shall continue after the
applicable grace period, if any, specified in such agreement or instrument,
if the effect of such event or condition is to accelerate, or permit the
acceleration of, the maturity of such Indebtedness; or any such
Indebtedness shall be declared to be due and payable; or required to be
prepaid or redeemed (other than by a regularly scheduled required
prepayment or redemption), purchased or defeased, or any offer to prepay,
redeem, purchase or defease such Indebtedness shall be required to be made,
in each case prior to the stated maturity thereof; or
(g) the Borrower, KPP or any Significant Affiliate shall (i) commence
a voluntary case or other proceeding or file any petition seeking
liquidation, reorganization or other relief under any federal, state or
foreign bankruptcy, insolvency or other similar law now or hereafter in
effect or seeking the appointment of a custodian, trustee, receiver,
liquidator or other similar official of it or any substantial part of its
property, (ii) consent to the institution of, or fail to contest in a
timely and appropriate manner, any proceeding or petition described in
subsection (i) of this Section, (iii) apply for or consent to the
appointment of a custodian, trustee, receiver, liquidator or other similar
official for the Borrower, KPP or any such Significant Affiliate 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; or
(h) an involuntary proceeding shall be commenced or an involuntary
petition shall be filed seeking (i) liquidation, reorganization or other
relief in respect of the Borrower, KPP or any Significant Affiliate or its
debts, or any substantial part of its assets, under any federal, state or
foreign bankruptcy, insolvency or other similar law now or hereafter in
effect or (ii) the appointment of a custodian, trustee, receiver,
liquidator or other similar official for the Borrower, KPP or any
Significant Affiliate or for a substantial part of its assets, and in any
such case, such proceeding or petition shall remain undismissed for a
period of 60 days or an order or decree approving or ordering any of the
foregoing shall be entered; or
(i) the Borrower, KPP or any Significant Subsidiary shall become
unable to pay, shall admit in writing its inability to pay, or shall fail
to pay, its debts as they become due; or
(j) an ERISA Event shall have occurred that, in the opinion of the
Required Lenders, when taken together with other ERISA Events that have
occurred, could reasonably be expected to result in liability to the
Borrower and the Subsidiaries in an aggregate amount exceeding $5,000,000;
or
(k) any judgment or order for the payment of money in excess of
$5,000,000 in the aggregate shall be rendered against the Borrower, KPP or
any Significant Affiliate, and either (i) enforcement proceedings shall
have been commenced by any creditor upon such judgment or order or (ii)
there shall be a period of 30 consecutive days during which a stay of
enforcement of such judgment or order, by reason of a pending appeal or
otherwise, shall not be in effect; or
(l) any non-monetary judgment or order shall be rendered against the
Borrower, KPP or any Significant Affiliate that could reasonably be
expected to have a Material Adverse Effect, and there shall be a period of
30 consecutive days during which a stay of enforcement of such judgment or
order, by reason of a pending appeal or otherwise, shall not be in effect;
or
(m) a Change in Control shall occur or exist; or
(n) any provision of the Subsidiary Guarantee Agreement shall for any
reason cease to be valid and binding on, or enforceable against, any
Guarantor, or any Guarantor shall so state in writing, or (a) any provision
of Article VIII shall for any reason cease to be valid and binding on, or
enforceable against KPP, or KPP shall so state in writing; Guarantor shall
seek to terminate its obligations under the Loan Documents; or
(o) an event, act, or condition shall occur which has, or could
reasonably be expected to have, singly or in the aggregate with other such
occurrences, a Material Adverse Effect;
then, and in every such event (other than an event with respect to KPP or the
Borrower described in subsection (g) or (h) of this Section) and at any time
thereafter during the continuance of such event, the Administrative Agent may,
and upon the written request of the Required Lenders shall, by notice to the
Borrower, take any or all of the following actions, at the same or different
times: (i) terminate the Commitments, whereupon the Commitment of each Lender
shall terminate immediately; (ii) declare the principal of and any accrued
interest on the Loans, and all other Obligations owing hereunder, to be,
whereupon the same shall become due and payable immediately, without
presentment, demand, protest or other notice of any kind, all of which are
hereby waived by the Borrower and (iii) exercise all remedies contained in any
other Loan Document; and that, if an Event of Default specified in either
subsection (g) or (h) shall occur, the Commitments shall automatically terminate
and the principal of the Loans then outstanding, together with accrued interest
thereon, and all other Obligations shall automatically become due and payable,
without presentment, demand, protest or other notice of any kind, all of which
are hereby waived by the Borrower.
Article X THE ADMINISTRATIVE AGENT
Section 10.1. Appointment of Administrative Agent.
Each Lender irrevocably appoints SunTrust Bank as the Administrative Agent
and authorizes it to take such actions on its behalf and to exercise such powers
as are delegated to the Administrative Agent under this Agreement and the other
Loan Documents, together with all such actions and powers that are reasonably
incidental thereto. The Administrative Agent may perform any of its duties
hereunder by or through any one or more sub-agents appointed by the
Administrative Agent. The Administrative Agent and any such sub-agent may
perform any and all of its duties and exercise its rights and powers through
their respective Related Parties. The exculpatory provisions set forth in this
Article shall apply to any such sub-agent and the Related Parties of the
Administrative Agent and any such sub-agent and shall apply to their respective
activities in connection with the syndication of the credit facility provided
for herein as well as activities as Administrative Agent.
Section 10.2. Nature of Duties of Administrative Agent.
The Administrative Agent shall not have any duties or obligations except
those expressly set forth in this Agreement and the other Loan Documents.
Without limiting the generality of the foregoing, (i) the Administrative Agent
shall not be subject to any fiduciary or other implied duties, regardless of
whether a Default or an Event of Default has occurred and is continuing, (ii)
the Administrative Agent shall not have any duty to take any discretionary
action or exercise any discretionary powers, except those discretionary rights
and powers expressly contemplated by the Loan Documents that the Administrative
Agent is required to exercise in writing by the Required Lenders (or such other
number or percentage of the Lenders as shall be necessary under the
circumstances as provided in Section 11.2), and (iii) except as expressly set
forth in the Loan Documents, the Administrative Agent shall not have any duty to
disclose, and shall not be liable for the failure to disclose, any information
relating to the Borrower or any of its Subsidiaries that is communicated to or
obtained by the Administrative Agent or any of its Affiliates in any capacity.
The Administrative Agent shall not be liable for any action taken or not taken
by it with the consent or at the request of the Required Lenders (or such other
number or percentage of the Lenders as shall be necessary under the
circumstances as provided in Section 11.2) or in the absence of its own gross
negligence or willful misconduct. The Administrative Agent shall not be deemed
to have knowledge of any Default or Event of Default unless and until written
notice thereof is given to the Administrative Agent by the Borrower or any
Lender, and the Administrative Agent shall not be responsible for or have any
duty to ascertain or inquire into (A) any statement, warranty or representation
made in or in connection with any Loan Document, (B) the contents of any
certificate, report or other document delivered hereunder or thereunder or in
connection herewith or therewith, (C) the performance or observance of any of
the covenants, agreements, or other terms and conditions set forth in any Loan
Document, (D) the validity, enforceability, effectiveness or genuineness of any
Loan Document or any other agreement, instrument or document, or (E) the
satisfaction of any condition set forth in Article III or elsewhere in any Loan
Document, other than to confirm receipt of items expressly required to be
delivered to the Administrative Agent.
Section 10.3. Lack of Reliance on the Administrative Agent.
Each of the Lenders acknowledges that it has, independently and without
reliance upon the Administrative Agent or any other Lender and based on such
documents and information as it has deemed appropriate, made its own credit
analysis and decision to enter into this Agreement. Each of the Lenders also
acknowledges that it will, independently and without reliance upon the
Administrative Agent or any other Lender and based on such documents and
information as it has deemed appropriate, continue to make its own decisions in
taking or not taking of any action under or based on this Agreement, any related
agreement or any document furnished hereunder or thereunder.
Section 10.4. Certain Rights of the Administrative Agent.
If the Administrative Agent shall request instructions from the Required
Lenders with respect to any action or actions (including the failure to act) in
connection with this Agreement, the Administrative Agent shall be entitled to
refrain from such act or taking such act, unless and until it shall have
received instructions from such Lenders; and the Administrative Agent shall not
incur liability to any Person by reason of so refraining. Without limiting the
foregoing, no Lender shall have any right of action whatsoever against the
Administrative Agent as a result of the Administrative Agent acting or
refraining from acting hereunder in accordance with the instructions of the
Required Lenders where required by the terms of this Agreement.
Section 10.5. Reliance by Administrative Agent.
The Administrative Agent shall be entitled to rely upon, and shall not
incur any liability for relying upon, any notice, request, certificate, consent,
statement, instrument, document or other writing believed by it to be genuine
and to have been signed, sent or made by the proper Person. The Administrative
Agent may also rely upon any statement made to it orally or by telephone and
believed by it to be made by the proper Person and shall not incur any liability
for relying thereon. The Administrative Agent may consult with legal counsel
(including counsel for the Borrower), independent public accountants and other
experts selected by it and shall not be liable for any action taken or not taken
by it in accordance with the advice of such counsel, accountants or experts.
Section 10.6. The Administrative Agent in its Individual Capacity.
The bank serving as the Administrative Agent shall have the same rights and
powers under this Agreement and any other Loan Document in its capacity as a
Lender as any other Lender and may exercise or refrain from exercising the same
as though it were not the Administrative Agent; and the terms "Lenders",
"Required Lenders", "holders of Notes", or any similar terms shall, unless the
context clearly otherwise indicates, include the Administrative Agent in its
individual capacity. The bank acting as the Administrative Agent and its
Affiliates may accept deposits from, lend money to, and generally engage in any
kind of business with the Borrower or any Subsidiary or Affiliate of the
Borrower as if it were not the Administrative Agent hereunder.
Section 10.7. Successor Administrative Agent.
(a) The Administrative Agent may resign at any time by giving notice
thereof to the Lenders and the Borrower and 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, subject to the approval by the Borrower provided that
no Default or Event of Default shall have occurred and be continuing at
such time. If no successor Administrative Agent shall have been so
appointed, and shall have accepted such appointment within 30 days after
the retiring Administrative Agent gives notice of resignation or the
Required Lenders' removal of the Agent, then the retiring Administrative
Agent may, on behalf of the Lenders, appoint a successor Administrative
Agent, which shall be a commercial bank organized under the laws of the
United States of America or any state thereof or a bank which maintains an
office in the United States, having a combined capital and surplus of at
least $500,000,000.
(b) Upon the acceptance of its appointment as the Administrative Agent
hereunder by a successor, 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 under this Agreement and the other Loan Documents. If within 45
days after written notice is given of the retiring Administrative Agent's
resignation or removal under this Section 10.7 no successor Administrative
Agent shall have been appointed and shall have accepted such appointment,
then on such 45th day (i) the retiring Administrative Agent's resignation
or removal shall become effective, (ii) the retiring Administrative Agent
shall thereupon be discharged from its duties and obligations under the
Loan Documents and (iii) the Required Lenders shall thereafter perform all
duties of the retiring Administrative Agent under the Loan Documents until
such time as the Required Lenders appoint a successor Administrative Agent
as provided above. After any retiring Administrative Agent's resignation
hereunder, the provisions of this Article IX shall continue in effect for
the benefit of such retiring Administrative Agent and its representatives
and agents in respect of any actions taken or not taken by any of them
while it was serving as the Administrative Agent.
Section 10.8. Authorization to Execute other Loan Documents.
Each Lender hereby authorizes the Administrative Agent to execute on behalf
of all Lenders all Loan Documents other than this Agreement.
Article XI MISCELLANEOUS
Section 11.1. Notices.
(a) Except in the case of notices and other communications expressly
permitted to be given by telephone, all notices and other communications to
any party herein to be effective shall be in writing and shall be delivered
by hand or overnight courier service, mailed by certified or registered
mail or sent by telecopy, as follows:
To the Borrower: ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇ ▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
Telecopy Number: (▇▇▇) ▇▇▇-▇▇▇▇
To KPP: ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇ ▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
Telecopy Number: (▇▇▇) ▇▇▇-▇▇▇▇
To the Administrative Agent: SunTrust Bank
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇. ▇.
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇
Telecopy Number: ____________
To any other Lender: the address set forth in the
Administrative Questionnaire
Any party hereto may change its address or telecopy number for notices and
other communications hereunder by notice to the other parties hereto. All
such notices and other communications shall, when transmitted by overnight
delivery, or faxed, be effective when delivered for overnight (next-day)
delivery, or transmitted in legible form by facsimile machine,
respectively, or if mailed, upon the third Business Day after the date
deposited into the mails or if delivered, upon delivery; provided, that
notices delivered to the Administrative Agent shall not be effective until
actually received by such Person at its address specified in this Section
11.1.
(b) Any agreement of the Administrative Agent and the Lenders herein
to receive certain notices by telephone or facsimile is solely for the
convenience and at the request of the Borrower. The Administrative Agent
and the Lenders shall be entitled to rely on the authority of any Person
purporting to be a Person authorized by the Borrower to give such notice
and the Administrative Agent and Lenders shall not have any liability to
the Borrower or other Person on account of any action taken or not taken by
the Administrative Agent or the Lenders in reliance upon such telephonic or
facsimile notice. The obligation of the Borrower to repay the Loans and all
other Obligations hereunder shall not be affected in any way or to any
extent by any failure of the Administrative Agent and the Lenders to
receive written confirmation of any telephonic or facsimile notice or the
receipt by the Administrative Agent and the Lenders of a confirmation which
is at variance with the terms understood by the Administrative Agent and
the Lenders to be contained in any such telephonic or facsimile notice.
Section 11.2. Waiver; Amendments.
(a) No failure or delay by the Administrative Agent or any Lender in
exercising any right or power hereunder or any other Loan Document, and no
course of dealing between the Borrower and the Administrative Agent or any
Lender, 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 right or power, preclude any other or further
exercise thereof or the exercise of any other right or power hereunder or
thereunder. The rights and remedies of the Administrative Agent and the
Lenders hereunder and under the other Loan Documents are cumulative and are
not exclusive of any rights or remedies provided by law. No waiver of any
provision of this Agreement or any other Loan Document or consent to any
departure by the Borrower therefrom shall in any event be effective unless
the same shall be permitted by subsection (b) of this Section, 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, Disbursement of the Bridge 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 or Event of Default at the time.
(b) No amendment or waiver of any provision of this Agreement or the
other Loan Documents, nor consent to any departure by any Loan Party
therefrom, shall in any event be effective unless the same shall be in
writing and signed by the Borrower and the Required Lenders or the Borrower
and the Administrative Agent with the consent of the Required Lenders and
then such waiver or consent shall be effective only in the specific
instance and for the specific purpose for which given; provided, that no
amendment or waiver shall: (i) increase the Commitment of any Lender
without the written consent of such Lender, (ii) reduce the principal
amount of any Loan or reduce the rate of interest thereon, without the
written consent of each Lender affected thereby, (iii) postpone the date
fixed for any payment of any principal of, or interest on, any Loan
hereunder or reduce the amount of, waive or excuse any such payment, or
postpone the scheduled date for the termination or reduction 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, (v) change any of the provisions of this Section or the
definition of "Required Lenders" or any other provision hereof specifying
the number or percentage of Lenders which are required to waive, amend or
modify any rights hereunder or make any determination or grant any consent
hereunder, without the consent of each Lender; (vi) release any guarantor
or limit the liability of any such guarantor under any guaranty agreement,
without the written consent of each Lender; (vii) release all or
substantially all collateral (if any) securing any of the Obligations,
without the written consent of each Lender; provided further, that no such
agreement shall amend, modify or otherwise affect the rights, duties or
obligations of the Administrative Agent without the prior written consent
of the Administrative Agent. Notwithstanding the foregoing, any provision
of this Agreement may be amended by an agreement in writing entered into by
the Borrower, the Required Lenders and the Administrative Agent if (i) by
the terms of such agreement the Commitment of each Lender not consenting to
the amendment provided for therein shall terminate (but such Lender shall
continue to be entitled to the benefits of Sections 2.15, 2.16, and 2.17
and 11.3) upon the effectiveness of such amendment and (ii) at the time
such amendment becomes effective, each Lender not consenting thereto
receives payment in full principal of and interest accrued on the Loan made
by it and all other amounts owing to it or accrued for its account under
this Agreement and is released from its obligations hereunder.
Section 11.3. Expenses; Indemnification.
(a) The Borrower shall pay (i) all reasonable, out-of-pocket costs and
expenses of the Administrative Agent and its Affiliates, including the
reasonable fees, charges and disbursements of counsel for the
Administrative Agent and its Affiliates, in connection with the syndication
of the credit facilities provided for herein, the preparation and
administration of the Loan Documents and any amendments, modifications or
waivers thereof (whether or not the transactions contemplated in this
Agreement or any other Loan Document shall be consummated), and (ii) all
out-of-pocket costs and expenses (including, without limitation, the
reasonable fees, charges and disbursements of outside counsel and the
allocated cost of inside counsel) incurred by the Administrative Agent or
any Lender in connection with the enforcement or protection of its rights
in connection with the Loan Documents, including its rights under this
Section, or in connection with the Loans made hereunder, including all such
out-of-pocket expenses incurred during any workout, restructuring or
negotiations in respect of such Loans.
(b) The Borrower shall indemnify the Administrative Agent, each Lender
and each Related Party of any of the foregoing (each, an "Indemnitee")
against, and hold each of them harmless from, any and all costs, losses,
liabilities, claims, damages and related expenses, including the fees,
charges and disbursements of any counsel for any Indemnitee, which may be
incurred by or asserted against any Indemnitee arising out of, in
connection with or as a result of (i) the execution or delivery of this
Agreement or any other agreement or instrument contemplated hereby,
including, without limitation, the Loan Documents, the Acquisition
Documents and the Prior Acquisition Documents, the performance by the
parties hereto of their respective obligations hereunder or thereunder or
the consummation of any of the transactions contemplated hereby or thereby,
including, without limitation, the Acquisition and the Prior Acquisition,
(ii) any Loan, (iii) any actual or alleged presence or release of Hazardous
Materials on or from any property owned by the Borrower or any Subsidiary
or any Environmental Liability related in any way to the Borrower or any
Subsidiary or (iv) any actual or prospective claim, litigation,
investigation or proceeding relating to any of the foregoing, whether based
on contract, tort or any other theory and regardless of whether any
Indemnitee is a party thereto; provided, that the Borrower shall not be
obligated to indemnify any Indemnitee for any of the foregoing arising out
of such Indemnitee's gross negligence or willful misconduct as determined
by a court of competent jurisdiction in a final and nonappealable judgment.
(c) The Borrower shall pay, and hold the Administrative Agent and each
of the Lenders harmless from and against, any and all present and future
stamp, documentary, and other similar taxes with respect to this Agreement
and any other Loan Documents, any collateral described therein, or any
payments due thereunder, and save the Administrative Agent and each Lender
harmless from and against any and all liabilities with respect to or
resulting from any delay or omission to pay such taxes.
(d) To the extent that the Borrower fails to pay any amount required
to be paid to the Administrative Agent under subsection (a), (b) or (c)
above, each Lender severally agrees to pay to the Administrative Agent such
Lender's Pro Rata Share (determined as of the time that the unreimbursed
expense or indemnity payment is sought) of such unpaid amount; provided,
that the unreimbursed expense or indemnified payment, 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.
(e) To the extent permitted by applicable law, the Borrower, KPP and
all Significant Affiliates shall not assert, and hereby waive, any claim
against any Indemnitee, on any theory of liability, for special, indirect,
consequential or punitive damages (as opposed to actual or direct damages)
arising out of, in connection with or as a result of, this Agreement or any
agreement or instrument contemplated hereby, the transactions contemplated
therein, any Loan or the use of proceeds thereof.
(f) All amounts due under this Section shall be payable promptly after
written demand therefor.
Section 11.4. Successors and Assigns.
(a) The provisions of this Agreement shall be binding upon and inure
to the benefit of the parties hereto and their respective successors and
assigns, except that the Borrower may not assign or transfer any of its
rights hereunder without the prior written consent of each Lender (and any
attempted assignment or transfer by the Borrower without such consent shall
be null and void).
(b) Any Lender may at any time assign to one or more assignees all or
a portion of its rights and obligations under this Agreement and the other
Loan Documents (including all or a portion of 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 Borrower and the Administrative
Agent must give their prior written consent (which consent shall not be
unreasonably withheld or delayed), (ii) except in the case of an assignment
to a Lender or an Affiliate of a Lender or an assignment while an Event of
Default has occurred and is continuing, the amount of the Loan 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 $1,000,000 (unless the
Borrower and the Administrative Agent shall 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 with respect to the
Loans related thereto under this Agreement and the other Loan Documents,
(iv) the assigning Lender and the assignee shall execute and deliver to the
Administrative Agent an Assignment and Acceptance, together with a
processing and recordation fee payable by the assigning Lender or the
assignee (as determined between such Persons) in an amount equal to $1,000
and (v) such assignee, if it is not a Lender, shall deliver a duly
completed Administrative Questionnaire to the Administrative Agent;
provided, that any consent of the Borrower otherwise required hereunder
shall not be required if an Event of Default has occurred and is
continuing. Upon the execution and delivery of the Assignment and
Acceptance and payment by such assignee to the assigning Lender of an
amount equal to the purchase price agreed between such Persons, such
assignee shall become a party to this Agreement and any other Loan
Documents to which such assigning Lender is a party and, to the extent of
such interest assigned by such Assignment and Acceptance, shall have the
rights and obligations of a Lender under this Agreement, and the assigning
Lender shall be released from its obligations hereunder to a corresponding
extent (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 and 2.17 and 11.3. Upon the
consummation of any such assignment hereunder, the assigning Lender, the
Administrative Agent and the Borrower shall make appropriate arrangements
to have new Notes issued if so requested by either or both the assigning
Lender or the assignee. Any assignment or other transfer by a Lender that
does not fully comply with the terms of this subsection (b) shall be
treated for purposes of this Agreement as a sale of a participation
pursuant to subsection (c) below.
(c) Any Lender may at any time, without the consent of the Borrower 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 its obligations hereunder, and (iii) the Borrower, 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 and the other Loan Documents. Any
agreement between such Lender and the Participant with respect to such
participation shall provide that such Lender shall retain the sole right
and responsibility to enforce this Agreement and the other Loan Documents
and the right to approve any amendment, modification or waiver of this
Agreement and the other Loan Documents; provided, that such participation
agreement may provide that such Lender will not, without the consent of the
Participant, agree to any amendment, modification or waiver of this
Agreement described in the first proviso of Section 11.2(b) that affects
the Participant. The 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 hereunder and had acquired its interest by
assignment pursuant to subsection (b); provided, that no Participant shall
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 such
participation is made with the Borrower's prior written consent. To the
extent permitted by law, the Borrower agrees that each Participant shall be
entitled to the benefits of Section 2.18 as though it were a Lender,
provided, that such Participant agrees to share with the Lenders the
proceeds thereof in accordance with Section 2.18 as fully as if it were a
Lender hereunder. 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
Borrower is notified of such participation sold to such Participant and
such Participant agrees, for the benefit of the Borrower, to comply with
Section 2.17(e) as though it were a Lender hereunder.
(d) Any Lender may at any time pledge or assign a security interest in
all or any portion of its rights under this Agreement and its Notes (if
any) to secure its obligations to a Federal Reserve Bank without complying
with this Section; provided, that no such pledge or assignment shall
release a Lender from any of its obligations hereunder or substitute any
such pledgee or assignee for such Lender as a party hereto.
(e) Notwithstanding anything to the contrary contained herein, any
Lender (a "Granting Lender") may grant to a special purpose funding vehicle
(an "SPV"), identified as such in writing from time to time by the Granting
Lender to the Administrative Agent and the Borrower, the option to provide
to the Borrower all or any part of the Bridge Loan that such Granting
Lender would otherwise be obligated to make to the Borrower pursuant to
this Agreement; provided, that (i) nothing herein shall constitute a
commitment by any SPV to make the Bridge Loan or any portion thereof, and
(ii) if an SPV elects not to exercise such option or otherwise fails to
provide all or any part of any Loan, the Granting Lender shall be obligated
to make its portion of the Bridge Loan on the Closing Date. The making of a
Loan by an SPV hereunder shall utilize the Commitment of the Granting
Lender to the same extent, and as if such Loan were made by such Granting
Lender. Each party hereto hereby agrees that no SPV shall be liable for any
indemnity or similar payment obligation under this Agreement (all liability
for which shall remain with the Granting Lender). In furtherance of the
foregoing, each party hereto hereby agrees (which agreement shall survive
the termination of this Agreement) that, prior to the date that is one year
and one day after the payment in full of all outstanding commercial paper
or other senior indebtedness of any SPV, it will not institute against, or
join any other person in instituting against, such SPV any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceedings under
the laws of the United States or any State. Notwithstanding anything to the
contrary in this Section 11.4, any SPV may (i) with notice to, but without
the prior written consent of, the Borrower and the Administrative Agent and
without paying any processing fee therefor, assign all or a portion of its
interests in any Loans to the Granting Lender or to any financial
institutions (consented to by the Borrower and the Administrative Agent)
providing liquidity and/or credit support to or for the account of such SPV
to support the funding or maintenance of Loans and (ii) disclose on a
confidential basis any non-public information relating to its Loans to any
rating agency, commercial paper dealer or provider of any surety, guarantee
or credit or liquidity enhancement to such SPV. As this Section 11.4(e)
applies to any particular SPV, this Section may not be amended without the
written consent of such SPV.
Section 11.5. Governing Law; Jurisdiction; Consent to Service of Process.
(a) This Agreement and the other Loan Documents shall be construed in
accordance with and be governed by the law (without giving effect to the
conflict of law principles thereof) of the State of New York.
(b) Each of the Borrower and KPP hereby irrevocably and
unconditionally submits, for itself and its property, to the non-exclusive
jurisdiction of the United States District Court of the Southern District
of New York, and of the Supreme Court of the State of New York sitting in
New York County and any appellate court from any thereof, in any action or
proceeding arising out of or relating to this Agreement or any other Loan
Document or the transactions contemplated hereby or thereby, or for
recognition or enforcement of any judgment, and each of the parties hereto
hereby irrevocably and unconditionally agrees that all claims in respect of
any such action or proceeding may be heard and determined in such New York
state court or, to the extent permitted by applicable law, such Federal
court. Each of the parties hereto agrees that a final judgment in any such
action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by
law. Nothing in this Agreement or any other Loan Document shall affect any
right that the Administrative Agent or any Lender may otherwise have to
bring any action or proceeding relating to this Agreement or any other Loan
Document against the Borrower or its properties in the courts of any
jurisdiction.
(c) Each of the Borrower and KPP irrevocably and unconditionally
waives any objection which it may now or hereafter have to the laying of
venue of any such suit, action or proceeding described in subsection (b) of
this Section and brought in any court referred to in subsection (b) of this
Section. Each of the parties hereto irrevocably waives, to the fullest
extent permitted by applicable law, the defense of an inconvenient forum to
the maintenance of such action or proceeding in any such court.
(d) Each party to this Agreement irrevocably consents to the service
of process in the manner provided for notices in Section 11.1. Nothing in
this Agreement or in any other Loan Document will affect the right of any
party hereto to serve process in any other manner permitted by law.
Section 11.6. WAIVER OF JURY TRIAL.
EACH PARTY HERETO IRREVOCABLY 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 THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT
OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT,
TORT OR ANY OTHER THEORY). EACH PARTY HERETO (i) 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 (ii) ACKNOWLEDGES THAT IT AND THE OTHER
PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS
SECTION.
Section 11.7. Right of Setoff.
In addition to any rights now or hereafter granted under applicable law and
not by way of limitation of any such rights, each Lender shall have the right,
at any time or from time to time upon the occurrence and during the continuance
of an Event of Default, without prior notice to the Borrower or KPP, any such
notice being expressly waived by the Borrower and KPP to the extent permitted by
applicable law, to set off and apply against all deposits (general or special,
time or demand, provisional or final) of the Borrower or KPP at any time held or
other obligations at any time owing by such Lender to or for the credit or the
account of the Borrower or KPP against any and all Obligations held by such
Lender, irrespective of whether such Lender shall have made demand hereunder and
although such Obligations may be unmatured. Each Lender agrees promptly to
notify the Administrative Agent and the Borrower after any such set-off and any
application made by such Lender; provided, that the failure to give such notice
shall not affect the validity of such set-off and application.
Section 11.8. Counterparts; Integration.
This Agreement may be executed by one or more of the parties to this
Agreement on any number of separate counterparts (including by telecopy), and
all of said counterparts taken together shall be deemed to constitute one and
the same instrument. This Agreement and the other Loan Documents constitute the
entire agreement among the parties hereto and thereto regarding the subject
matters hereof and thereof and supersede all prior agreements and
understandings, oral or written, regarding such subject matters.
Section 11.9. Survival.
All covenants, agreements, representations and warranties made by the
Borrower and KPP 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 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 other amount payable
under this Agreement is outstanding and unpaid and so long as the Commitments
have not expired or terminated. The provisions of Sections 2.3, 2.15, 2.16, 2.17
and 11.3 and Article X 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. All representations and
warranties made herein, in the certificates, reports, notices, and other
documents delivered pursuant to this Agreement shall survive the execution and
delivery of this Agreement and the other Loan Documents, and the making of the
Loans.
Section 11.10. Severability.
Any provision of this Agreement or any other Loan Document held to be
illegal, invalid or unenforceable in any jurisdiction, shall, as to such
jurisdiction, be ineffective to the extent of such illegality, invalidity or
unenforceability without affecting the legality, validity or enforceability of
the remaining provisions hereof or thereof; and the illegality, invalidity or
unenforceability of a particular provision in a particular jurisdiction shall
not invalidate or render unenforceable such provision in any other jurisdiction.
Section 11.11. Confidentiality.
Each of the Administrative Agent and each Lender agrees to take normal and
reasonable precautions to maintain the confidentiality of any information
designated in writing as confidential and provided to it by KPP or any
Subsidiary of KPP, except that such information may be disclosed (i) to any
Related Party of the Administrative Agent or any such Lender, including without
limitation accountants, legal counsel and other advisors, (ii) to the extent
required by applicable laws or regulations or by any subpoena or similar legal
process, (iii) to the extent requested by any regulatory agency or authority,
(iv) to the extent that such information becomes publicly available other than
as a result of a breach of this Section 11.11, or which becomes available to the
Administrative Agent or any Related Party of any of the foregoing on a
nonconfidential basis from a source other than KPP or any Subsidiary of KPP, (v)
in connection with the exercise of any remedy hereunder or any suit, action or
proceeding relating to this Agreement or the enforcement of rights hereunder,
and (vi) subject to provisions substantially similar to this Section 11.11, to
any actual or prospective assignee or Participant, or (vii) with the consent of
the Borrower. Any Person required to maintain the confidentiality of any
information as provided for in this Section 11.11 shall be considered to have
complied with its obligation to do so if such Person has exercised the same
degree of care to maintain the confidentiality of such information as such
Person would accord its own confidential information.
Section 11.12. Syndication; Market Flex.
Until completion of the syndication of the Commitments, as determined by
SunTrust in its sole discretion, SunTrust shall be entitled, after the Closing
Date and in consultation with the Borrower, to change the structure, terms or
pricing of this Agreement and the other Loan Documents if SunTrust determines in
its reasonable discretion that such changes are necessary or advisable in order
to complete syndication, so long as any such change to the terms of this
Agreement or any other Loan Document does not adversely affect any Lender
(unless such Lender otherwise consents to such change).
Section 11.13. 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 may be treated as interest on such Loan under applicable law
(collectively, the "Charges"), shall exceed the maximum lawful rate of interest
(the "Maximum Rate") that may be contracted for, charged, taken, received or
reserved by a 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 11.12 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 Rate to the date of repayment, shall have been
received by such Lender.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers as of the day and year
first above written.
KANEB PIPE LINE OPERATING
PARTNERSHIP, L.P.
By: KANEB PIPE LINE COMPANY,
General Partner
By:
----------------------------------
Name:
Title:
KANEB PIPE LINE PARTNERS, L.P.
By: KANEB PIPE LINE COMPANY,
General Partner
By:
--------------------------------------
Name:
Title:
SUNTRUST BANK,
as Administrative Agent and as a Lender
By:
------------------------------------------
Name:
Title:
Commitment: $75,000,000
BANK OF AMERICA, N.A.,
as a Lender
By:
------------------------------------------
Name:
Title:
Commitment: $25,000,000
BANK ONE, N.A.,
as a Lender
By: ------------------------------------------
Name:
Title:
Commitment: $50,000,000
Schedule I
APPLICABLE MARGIN
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------------------------------ Reference Applicable Margin for Applicable Margin for Base
Pricing Ratings Eurodollar Loans Rate Loans
Level
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I BBB- or higher and Baa3 1.25% 0%
or higher per annum per annum
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II Lower than BBB- or 1.75% 0%
lower than Baa3 or per annum per annum
unrated
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If (i) the Applicable Margin is to be determined by the Reference Ratings,
(ii) more than one Reference Rating is in effect, (iii) such Reference Ratings
are "split ratings" and (iv) the ratings differential is one category, the lower
of the two Reference Ratings will apply (e.g., BBB+/Ba1 results in Level II
status.) If the Borrower does not have a Credit Rating, then the rate shall be
established by reference to Level II.
If the rating system of S&P or ▇▇▇▇▇'▇ shall change, or if either rating
agency shall cease to be in the business of rating corporate debt obligations,
the Borrower, the Lenders and the Administrative Agent shall negotiate in good
faith to amend this Schedule to reflect such changed rating system or the
unavailability of ratings from such rating agency and, pending the effectiveness
of any such amendment, the Applicable Margin shall be determined by reference to
the Reference Ratings most recently in effect prior to any such change or
cessation. If after a reasonable time the parties cannot agree to a mutually
acceptable amendment, the Applicable Margin shall be determined by reference to
Level II.
Schedule II
EXISTING INDEBTEDNESS
$250,000,000 7.75% Senior Notes due 2012
The UK Facility
SCHEDULE 4.5
ENVIRONMENTAL MATTERS
None.
SCHEDULE 4.15
SUBSIDIARIES, SIGNIFICANT SUBSIDIARIES,
SIGNIFICANT AFFILIATES AND GUARANTORS
[To be Provided by Borrower]
Subsidiary or Affiliate State of Incorp. Entity Type KPP's ownership
SCHEDULE 7.2
EXISTING LIENS
None.
FORM OF BRIDGE NOTE
[$___________] [Date]
FOR VALUE RECEIVED, the undersigned, KANEB PIPE LINE OPERATING PARTNERSHIP,
L.P., a Delaware limited partnership (the "Borrower"), hereby promises to pay to
[name of Lender] (the "Lender") or its registered assigns, at the office of
SunTrust Bank ("SunTrust") at ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇., ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇▇▇, on the Maturity Date (as defined in the Bridge Loan Agreement, dated as
of November 1, 2002 (as the same may be amended, supplemented or otherwise
modified from time to time, the "Loan Agreement"), among the Borrower, Kaneb
Pipe Line Partners, L.P., the lenders from time to time party thereto and
SunTrust, as administrative agent for the lenders, the lesser of the principal
sum of [AMOUNT OF SUCH LENDER'S COMMITMENT] and the aggregate unpaid principal
amount of the Loan made by the Lender to the Borrower pursuant to the Loan
Agreement. in lawful money of the United States of America in immediately
available funds, and to pay interest from the date hereof on the principal
amount thereof from time to time outstanding, in like funds, at said office, at
the rate or rates per annum and payable on such dates as provided in the Loan
Agreement. In addition, should legal action or an attorney-at-law be utilized to
collect any amount due hereunder, the Borrower further promises to pay all costs
of collection, including the reasonable attorneys' fees of the Lender.
The Borrower promises to pay interest, on demand, on any overdue principal
and, to the extent permitted by law, overdue interest from their due dates at a
rate or rates provided in the Loan Agreement.
The Loan evidenced by this Note and all payments and prepayments of the
principal hereof and the date thereof shall be endorsed by the holder hereof on
the schedule attached hereto and made a part hereof or on a continuation thereof
which shall be attached hereto and made a part hereof, or otherwise recorded by
such holder in its internal records; provided, that the failure of the holder
hereof to make such a notation or any error in such notation shall not affect
the obligations of the Borrower to make the payments of principal and interest
in accordance with the terms of this Note and the Loan Agreement.
This Note is issued in connection with, and is entitled to the benefits of,
the Loan Agreement which, among other things, contains provisions for the
acceleration of the maturity hereof upon the happening of certain events, for
prepayment of the principal hereof prior to the maturity hereof and for the
amendment or waiver of certain provisions of the Loan Agreement, all upon the
terms and conditions therein specified. THIS NOTE SHALL BE CONSTRUED IN
ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK AND ANY
APPLICABLE LAWS OF THE UNITED STATES OF AMERICA.
KANEB PIPE LINE OPERATING
PARTNERSHIP, L.P.
By: KANEB PIPE LINE COMPANY,
General Partner
By:
----------------------------------
Name:
Title:
LOANS AND PAYMENTS
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Date Amount and Payments of Unpaid Principal Name of Person
Balance of Making
Type of Loan Principal Note Notation
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FORM OF
ASSIGNMENT AND ACCEPTANCE
Reference is made to the Bridge Loan Agreement, dated as of November 1,
2002 (as amended and in effect on the date hereof, the "Loan Agreement"), among
Kaneb Pipe Line Operating Partnership, L.P., a Delaware limited partnership,
Kaneb Pipe Line Partners, L.P., a Delaware limited partnership, the Lenders from
time to time party hereto and SunTrust Bank, as Administrative Agent for the
Lenders. Terms defined in the Loan Agreement are used herein with the same
meanings.
The Assignor hereby sells and assigns, without recourse, to the Assignee
designated below, and the Assignee hereby purchases and assumes, without
recourse, from the Assignor, effective as of the Assignment Date set forth
below, the interests set forth below (the "Assigned Interest") in the Assignor's
rights and obligations under the Loan Agreement, including, without limitation,
the interests set forth below in the Commitment of the Assignor on the
Assignment Date and Loans owing to the Assignor that are outstanding on the
Assignment Date, but excluding accrued interest to and excluding the Assignment
Date. The Assignee hereby acknowledges receipt of a copy of the Loan Agreement.
From and after the Assignment Date (i) the Assignee shall be a party to and be
bound by the provisions of the Loan Agreement and, to the extent of the Assigned
Interest, have the rights and obligations of a Lender thereunder and (ii) the
Assignor shall, to the extent of the Assigned Interest, relinquish its rights
and be released from its obligations under the Loan Agreement.
This Assignment and Acceptance is being delivered to the Administrative
Agent together with (i) if the Assignee is a Foreign Lender, any documentation
required to be delivered by the Assignee pursuant to Section 2.17(e) of the Loan
Agreement, duly completed and executed by the Assignee, and (ii) if the Assignee
is not already a Lender under the Loan Agreement, an Administrative
Questionnaire in the form supplied by the Administrative Agent, duly completed
by the Assignee. The Assignee shall pay the fee payable to the Administrative
Agent pursuant to Section 11.4(b) of the Loan Agreement.
This Assignment and Acceptance shall be governed by and construed in
accordance with the laws of the State of New York.
Date of Assignment:
Legal Name of Assignor:
Legal Name of Assignee:
Assignee's Address for Notices:
Effective Date of Assignment:
("Assignment Date"):
Facility Principal Amount Percentage Assigned of
Commitment (set forth, to at least 8 decimals,
as a percentage of the aggregate
Assigned Commitments of all Lenders thereunder)
Loans: $ %
The terms set forth above are hereby agreed to:
[Name of Assignor], as Assignor
By
-------------------------------------------------------
Name:
Title:
[Name of Assignee], as Assignee
By
-------------------------------------------------------
Name:
Title:
The undersigned hereby consents to the within assignment:1/ -
Kaneb Pipe Line Operating Partnership, L.P. SunTrust Bank, as
Administrative Agent:
By Kaneb Pipe Line Company, LLC
General Partner
By
By Name:
Name: Title:
Title:
---------------------------
1/ Consents to be included to the extent required by Section 11.4(b) of the Loan
Agreement. --
FORM OF
SUBSIDIARY GUARANTEE AGREEMENT
This SUBSIDIARY GUARANTEE AGREEMENT (the "Agreement"), dated as of [ ], among
each of the Subsidiaries listed on Schedule I hereto (each such subsidiary
individually, a "Guarantor" and collectively, the "Guarantors") of KANEB PIPE
LINE OPERATING PARTNERSHIP, L.P., a Delaware limited partnership (the
"Borrower"), and SUNTRUST BANK, a Georgia banking corporation as administrative
agent (the "Administrative Agent") for the Lenders (as defined in the Loan
Agreement referred to below).
Reference is made to the Bridge Loan Agreement, dated as of November 1,
2002 (as amended, supplemented or otherwise modified from time to time, the
"Loan Agreement"), among the Borrower, Kaneb Pipe Line Partners, L.P., the
lenders from time to time party thereto (the "Lenders") and SunTrust Bank, as
administrative agent for the Lenders (in such capacity, the "Administrative
Agent"). Capitalized terms used herein and not defined herein shall have the
meanings assigned to such terms in the Loan Agreement.
The Lenders have agreed to make Loans to the Borrower pursuant to, and upon
the terms and subject to the conditions specified in, the Loan Agreement. Each
of the Guarantors is a direct or indirect Subsidiary of the Borrower and
acknowledges that it will derive substantial benefit from the making of the
Loans by the Lenders. The obligations of the Lenders to make Loans are
conditioned on, among other things, the execution and delivery by the Guarantors
of a Subsidiary Guarantee Agreement in the form hereof. As consideration
therefor and in order to induce the Lenders to make Loans, the Guarantors are
willing to execute this Subsidiary Guarantee Agreement.
Accordingly, the parties hereto agree as follows:
SECTION 1. Guarantee.
Each Guarantor unconditionally guarantees, jointly with KPP and the other
Guarantors and severally, as a primary obligor and not merely as a surety, (i)
the due and punctual payment of (A) the principal of and premium, if any, and
interest (including interest accruing during the pendency of any bankruptcy,
insolvency, receivership or other similar proceeding, regardless of whether
allowed or allowable in such proceeding) on the Loans, when and as due, whether
at maturity, by acceleration, upon one or more dates set for prepayment or
otherwise, and (B) all other monetary obligations, including fees, costs,
expenses and indemnities, whether primary, secondary, direct, contingent, fixed
or otherwise (including monetary obligations incurred during the pendency of any
bankruptcy, insolvency, receivership or other similar proceeding, regardless of
whether allowed or allowable in such proceeding), of the Loan Parties to the
Administrative Agent and the Lenders under the Loan Agreement and the other Loan
Documents, (ii) the due and punctual performance of all covenants, agreements,
obligations and liabilities of the Loan Parties under or pursuant to the Loan
Agreement and the other Loan Documents; and (iii) the due and punctual payment
and performance of all obligations of the Borrower, monetary or otherwise, under
each Hedging Agreement entered into with a counterparty that was a Lender or an
Affiliate of a Lender at the time such Hedging Agreement was entered into (all
the monetary and other obligations referred to in the preceding clauses (i)
through (iii) being collectively called the "Obligations"). Each Guarantor
further agrees that the Obligations may be extended or renewed, in whole or in
part, without notice to or further assent from it, and that it will remain bound
upon its guarantee notwithstanding any extension or renewal of any Obligation.
SECTION 2. Obligations Not Waived.
To the fullest extent permitted by applicable law, each Guarantor waives
presentment to, demand of payment from and protest to the other Loan Parties of
any of the Obligations, and also waives notice of acceptance of its guarantee
and notice of protest for nonpayment. To the fullest extent permitted by
applicable law, the obligations of each Guarantor hereunder shall not be
affected by (i) the failure of the Administrative Agent or any Lender to assert
any claim or demand or to enforce or exercise any right or remedy against the
Borrower or any other Guarantor under the provisions of the Loan Agreement, any
other Loan Document or otherwise, (ii) any rescission, waiver, amendment or
modification of, or any release from any of the terms or provisions of, this
Agreement, any other Loan Document or any other agreement, including with
respect to any other Guarantor under this Agreement, or (iii) the failure to
perfect any security interest in, or the release of, any of the security held by
or on behalf of the Administrative Agent or any Lender.
SECTION 3. Guarantee of Payment.
Each Guarantor further agrees that its guarantee constitutes a guarantee of
payment when due and not of collection, and waives any right to require that any
resort be had by the Administrative Agent or any Lender to any of the security
held for payment of the Obligations or to any balance of any deposit account or
credit on the books of the Administrative Agent or any Lender in favor of the
Borrower or any other Person.
SECTION 4. No Discharge or Diminishment of Guarantee.
The obligations of each Guarantor hereunder shall not be subject to any
reduction, limitation, impairment or termination for any reason (other than the
indefeasible payment in full in cash of the Obligations), including any claim of
waiver, release, surrender, alteration or compromise of any of the Obligations,
and shall not be subject to any defense or setoff, counterclaim, recoupment or
termination whatsoever by reason of the invalidity, illegality or
unenforceability of the Obligations or otherwise. Without limiting the
generality of the foregoing, the obligations of each Guarantor hereunder shall
not be discharged or impaired or otherwise affected by the failure of the
Administrative Agent or any Lender to assert any claim or demand or to enforce
any remedy under the Loan Agreement, any other Loan Document or any other
agreement, by any waiver or modification of any provision of any thereof, by any
default, failure or delay, willful or otherwise, in the performance of the
Obligations, or by any other act or omission that may or might in any manner or
to the extent vary the risk of any Guarantor or that would otherwise operate as
a discharge of each Guarantor as a matter of law or equity (other than the
indefeasible payment in full in cash of all the Obligations).
SECTION 5. Defenses of Borrower Waived.
To the fullest extent permitted by applicable law, each Guarantor waives
any defense based on or arising out of any defense of any Loan Party or the
unenforceability of the Obligations or any part thereof from any cause, or the
cessation from any cause of the liability of any Loan Party, other than the
final and indefeasible payment in full in cash of the Obligations. The
Administrative Agent and the Lenders may, at their election, foreclose on any
security held by one or more of them by one or more judicial or nonjudicial
sales, accept an assignment of any such security in lieu of foreclosure,
compromise or adjust any part of the Obligations, make any other accommodation
with any other Loan Party or any other guarantor, without affecting or impairing
in any way the liability of any Guarantor hereunder except to the extent the
Obligations have been fully, finally and indefeasibly paid in cash. Pursuant to
applicable law, each Guarantor waives any defense arising out of any such
election even though such election operates, pursuant to applicable law, to
impair or to extinguish any right of reimbursement or subrogation or other right
or remedy of such Guarantor against the Borrower or any other Guarantor or
guarantor, as the case may be, or any security.
SECTION 6. Agreement to Pay; Subordination.
In furtherance of the foregoing and not in limitation of any other right
that the Administrative Agent or any Lender has at law or in equity against any
Guarantor by virtue hereof, upon the failure of the Borrower or any other Loan
Party to pay any Obligation when and as the same shall become due, whether at
maturity, by acceleration, after notice of prepayment or otherwise, each
Guarantor hereby promises to and will forthwith pay, or cause to be paid, to the
Administrative Agent for the benefit of the Lenders in cash the amount of such
unpaid Obligations. Upon payment by any Guarantor of any sums to the
Administrative Agent, all rights of such Guarantor against any Loan Party
arising as a result thereof by way of right of subrogation, contribution,
reimbursement, indemnity or otherwise shall in all respects be subordinate and
junior in right of payment to the prior indefeasible payment in full in cash of
all the Obligations. In addition, any indebtedness of any Loan Party now or
hereafter held by any Guarantor is hereby subordinated in right of payment to
the prior payment in full in cash of the Obligations. If any amount shall
erroneously be paid to any Guarantor on account of (i) such subrogation,
contribution, reimbursement, indemnity or similar right or (ii) any such
indebtedness of any Loan Party, such amount shall be held in trust for the
benefit of the Administrative Agent and the Lenders and shall forthwith be paid
to the Administrative Agent to be credited against the payment of the
Obligations, whether matured or unmatured, in accordance with the terms of the
Loan Documents.
SECTION 7. Information.
Each Guarantor assumes all responsibility for being and keeping itself
informed of other Loan Parties' financial condition and assets, and of all other
circumstances bearing upon the risk of nonpayment of the Obligations and the
nature, scope and extent of the risks that such Guarantor assumes and incurs
hereunder, and agrees that none of the Administrative Agent or the Lenders will
have any duty to advise any of the Guarantors of information known to it or any
of them regarding such circumstances or risks.
SECTION 8. Representations and Warranties.
Each Guarantor represents and warrants as to itself that all
representations and warranties relating to it (as a Subsidiary of KPP) contained
in the Loan Agreement are true and correct.
SECTION 9. Termination.
The guarantees made hereunder (i) shall terminate when all the Obligations
have been paid in full in cash and the Lenders have no further commitment to
lend under the Loan Agreement and (ii) shall continue to be effective or be
reinstated, as the case may be, if at any time payment, or any part thereof, of
any Obligation is rescinded or must otherwise be restored by any Lender or any
Guarantor upon the bankruptcy or reorganization of the Borrower, any Guarantor
or otherwise. In connection with the foregoing, the Administrative Agent shall
execute and deliver to such Guarantor or Guarantor's designee, at such
Guarantor's expense, any documents or instruments which such Guarantor shall
reasonably request from time to time to evidence such termination and release.
SECTION 10. Binding Effect; Several Agreement; Assignments.
Whenever in this Agreement any of the parties hereto is referred to, such
reference shall be deemed to include the successors and assigns of such party;
and all covenants, promises and agreements by or on behalf of the Guarantors
that are contained in this Agreement shall bind and inure to the benefit of each
party hereto and their respective successors and assigns. This Agreement shall
become effective as to any Guarantor when a counterpart hereof executed on
behalf of such Guarantor shall have been delivered to the Administrative Agent,
and a counterpart hereof shall have been executed on behalf of the
Administrative Agent, and thereafter shall be binding upon such Guarantor and
the Administrative Agent and their respective successors and assigns, and shall
inure to the benefit of such Guarantor, the Administrative Agent and the
Lenders, and their respective successors and assigns, except that no Guarantor
shall have the right to assign its rights or obligations hereunder or any
interest herein (and any such attempted assignment shall be void). If all of the
capital stock of a Guarantor is sold, transferred or otherwise disposed of
pursuant to a transaction permitted by the Loan Agreement, such Guarantor shall
be released from its obligations under this Agreement without further action.
This Agreement shall be construed as a separate agreement with respect to each
Guarantor and may be amended, modified, supplemented, waived or released with
respect to any Guarantor without the approval of any other Guarantor and without
affecting the obligations of any other Guarantor hereunder.
SECTION 11. Waivers; Amendment.
(a) No failure or delay of the Administrative Agent of any in
exercising any power or right 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. The rights and of the Administrative Agent hereunder and of
the Lenders under the other Loan Documents are cumulative and are not
exclusive of any rights or remedies that they would otherwise have. No
waiver of any provision of this Agreement or consent to any departure by
any Guarantor therefrom shall in any event be effective unless the same
shall be permitted by subsection (b) below, and then such waiver and
consent shall be effective only in the specific instance and for the
purpose for which given. No notice or demand on any Guarantor in any case
shall entitle such Guarantor to any other or further notice in similar or
other circumstances.
(b) Neither this Agreement nor any provision hereof may be waived,
amended or modified except pursuant to a written agreement entered into
between the Guarantors with respect to which such waiver, amendment or
modification relates and the Administrative Agent, with the prior written
consent of the Required Lenders (except as otherwise provided in the Loan
Agreement).
SECTION 12. Governing Law.
THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
LAWS OF THE STATE OF NEW YORK.
SECTION 13. Notices.
All communications and notices hereunder shall be in writing and given as
provided in Section 11.01 of the Loan Agreement. All communications and notices
hereunder to each Guarantor shall be given to it at its address set forth on
Schedule I attached hereto.
SECTION 14. Survival of Agreement; Severability.
(a) All covenants, agreements representations and warranties made by
the Guarantors herein and in the certificates or other instruments prepared
or delivered in connection with or pursuant to this Agreement or the other
Loan Document shall be considered to have been relied upon by the
Administrative Agent and the Lenders and shall survive the making by the
Lenders of the Loans regardless of any investigation made by any of them or
on their behalf, and shall continue in full force and effect as long as the
principal of or any accrued interest on any Loan or any other amount
payable under this Agreement or any other Loan Document is outstanding and
unpaid and as long as the Commitments have not been terminated.
(b) In the event one or more of the provisions contained in this
Agreement or in any other Loan Document should be held invalid, illegal or
unenforceable in any respect, the validity, legality and enforceability of
the remaining provisions contained herein and therein shall not in any way
be affected or impaired thereby (it being understood that the invalidity of
a particular provision in a particular jurisdiction shall not in and of
itself affect the validity of such provision in any other jurisdiction).
The parties shall endeavor in good-faith negotiations to replace the
invalid, illegal or unenforceable provisions with valid provisions the
economic effect of which comes as close as possible to that of the invalid,
illegal or unenforceable provisions.
SECTION 15. Counterparts.
This Agreement may be executed in counterparts, each of which shall
constitute an original, but all of which when taken together shall constitute a
single contract (subject to Section 10), and shall become effective as provided
in Section 10. Delivery of an executed signature page to this Agreement by
facsimile transmission shall be as effective as delivery of a manually executed
counterpart of this Agreement.
SECTION 16. Rules of Interpretation.
The rules of interpretation specified in Section 1.03 of the Loan Agreement
shall be applicable to this Agreement.
SECTION 17. Jurisdiction; Consent to Service of Process.
(a) Each Guarantor hereby irrevocably and unconditionally submits, for
itself and its property, to the non-exclusive jurisdiction of the United
States District Court of the Southern District of New York, and of the
Supreme Court of the State of New York sitting in New York County and any
appellate court from any thereof, in any action or proceeding arising out
of or relating to this Agreement or the other Loan Documents or the
transactions contemplated hereby or thereby, or for recognition or
enforcement of any judgment, and each of the parties hereto hereby
irrevocably and unconditionally agrees that all claims in respect of any
such action or proceeding may be heard and determined in such New York
State court or, to the extent permitted by applicable law, in such Federal
court. Each of the parties hereto agrees that a final judgment in any such
action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by
law. Nothing in this Agreement shall affect any right that the
Administrative Agent or any Lender may otherwise have to bring any action
or proceeding relating to this Agreement or the other Loan Documents
against any Guarantor or its properties in the courts of any jurisdiction.
(b) Each Guarantor irrevocably and unconditionally waives any
objection which it may now or hereafter have to the laying of venue of any
such suit, action or proceeding described in subsection (a) of this Section
and brought in any court referred to in subsection (a) of this Section.
Each of the parties hereto irrevocably waives, to the fullest extent
permitted by applicable law, the defense of an inconvenient forum to the
maintenance of such action or proceeding in any such court.
(c) Each party to this Agreement irrevocably consents to the service
of process in the manner provided for notices in Section 13. Nothing in
this Agreement will affect the right of any party hereto to serve process
in any other manner permitted by law.
SECTION 18. Waiver of Jury Trial.
EACH PARTY HERETO IRREVOCABLY 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 THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT
OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT,
TORT OR ANY OTHER THEORY). EACH PARTY HERETO (i) 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 (ii) ACKNOWLEDGES THAT IT AND THE OTHER
PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS
SECTION.
SECTION 19. Additional Guarantors.
Pursuant to Section 5.10 of the Loan Agreement, each Significant Subsidiary
(other than any Foreign Subsidiary and any Excluded Subsidiary) that was not in
existence on the date of the Loan Agreement is required to enter into this
Agreement as a Guarantor. Upon execution and delivery after the date hereof by
the Administrative Agent and such Subsidiary of an instrument in the form of
Annex 1, such Subsidiary shall become a Guarantor hereunder with the same force
and effect as if originally named as a Guarantor herein. The execution and
delivery of any instrument adding an additional Guarantor as a party to this
Agreement shall not require the consent of any other Guarantor hereunder. The
rights and obligations of each Guarantor hereunder shall remain in full force
and effect notwithstanding the addition of any new Guarantor as a party to this
Agreement.
SECTION 20. Right of Setoff.
If an Event of Default shall have occurred and be continuing, each Lender
are 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 any
Guarantor against any or all the obligations of such Guarantor now or hereafter
existing under this Agreement and the other Loan Documents held by such Lender,
irrespective of whether or not such Person shall have made any demand under this
Agreement or any other Loan Document and although such obligations may be
unmatured. The rights of each Lender under this Section 20 are in addition to
other rights and remedies (including other rights of setoff) that such Lender
may have.
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as
of the day and year first above written.
EACH OF THE SUBSIDIARIES LISTED
ON SCHEDULE I HERETO
By
------------------------------------
Name:
Title:
SUNTRUST BANK, as
Administrative Agent
By
------------------------------------
Name:
Title:
SCHEDULE I TO THE
SUBSIDIARY GUARANTEE AGREEMENT
Guarantor(s) Address
ANNEX 1 TO THE
SUBSIDIARY GUARANTEE AGREEMENT
SUPPLEMENT NO. [ ] dated as of [ ], to the Subsidiary Guarantee Agreement,
dated as of [ ] (the "Guarantee Agreement"), among each of the subsidiaries
listed on Schedule I thereto (each such Subsidiary individually, a "Guarantor"
and collectively, the "Guarantors") of KANEB PIPE LINE OPERATING PARTNERSHIP,
L.P., a Delaware limited partnership (the "Borrower"), and SUNTRUST BANK, a
Georgia banking corporation, as Administrative Agent (the "Administrative
Agent") for the Lenders (as defined in the Loan Agreement referred to below).
A. Reference is made to the Loan Agreement, dated as of [ ] (as amended,
supplemented or otherwise modified from time to time, the "Loan
Agreement"), among the Borrower, the lenders from time to time party
thereto (the "Lenders") and SunTrust Bank, as Administrative Agent.
B. Capitalized terms used herein and not otherwise defined herein shall have
the meanings assigned to such terms in the Guarantee Agreement and the Loan
Agreement.
C. The Guarantors have entered into the Guarantee Agreement in order to induce
the Lenders to make Loans. Pursuant to Section 5.10 of the Loan Agreement,
each Significant Subsidiary (other than any Foreign Subsidiary and any
Excluded Subsidiary) that was not in existence or not a Guarantor on the
date of the Loan Agreement is required to enter into the Guarantee
Agreement as a Guarantor. Section 19 of the Guarantee Agreement provides
that additional Subsidiaries of the Borrower may become Guarantors under
the Guarantee Agreement by execution and delivery of an instrument in the
form of this Supplement. The undersigned Subsidiary of the Borrower (the
"New Guarantor") is executing this Supplement in accordance with the
requirements of the Loan Agreement to become a Guarantor under the
Guarantee Agreement as consideration for Loans.
Accordingly, the Administrative Agent and the New Guarantor agree as
follows:
SECTION 1. In accordance with Section 19 of the Guarantee Agreement, the
New Guarantor by its signature below becomes a Guarantor under the Guarantee
Agreement with the same force and effect as if originally named therein as a
Guarantor and the New Guarantor hereby (i) agrees to all the terms and
provisions of the Guarantee Agreement applicable to it as Guarantor thereunder
and (ii) represents and warrants that the representations and warranties made by
it as a Guarantor thereunder are true and correct on and as of the date hereof.
Each reference to a Guarantor in the Guarantee Agreement shall be deemed to
include the New Guarantor. The Guarantee Agreement is hereby incorporated herein
by reference.
SECTION 2. The New Guarantor represents and warrants to the Administrative
Agent and the Lenders that this Supplement has been duly authorized, executed
and delivered by it and that each of this Supplement and the Guarantee Agreement
constitutes its legal, valid and binding obligation, enforceable against it in
accordance with its terms.
SECTION 3. This Supplement may be executed in counterparts each of which
shall constitute an original, but all of which when taken together shall
constitute a single contract. This Supplement shall become effective when the
Administrative Agent shall have received counterparts of this Supplement that,
when taken together, bear the signatures of the New Guarantor and the
Administrative Agent. Delivery of an executed signature page to this Supplement
by facsimile transmission shall be as effective as delivery of a manually signed
counterpart of this Supplement.
SECTION 4. Except as expressly supplemented hereby, the Guarantee Agreement
shall remain in full force and effect.
SECTION 5. THIS SUPPLEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
SECTION 6. In case any one or more of the provisions contained in this
Supplement should be held invalid, illegal or unenforceable in any respect, the
validity, legality and enforceability of the remaining provisions contained
herein and in the Guarantee Agreement shall not in any way be affected or
impaired thereby (it being understood that the invalidity of a particular
provision hereof in a particular jurisdiction shall not in and of itself affect
the validity of such provision in any other jurisdiction). The parties hereto
shall endeavor in good-faith negotiations to replace the invalid, illegal or
unenforceable provisions with valid provisions the economic effect of which
comes as close as possible to that of the invalid, illegal or unenforceable
provisions.
SECTION 7. All communications and notices hereunder shall be in writing and
given as provided in Section 13 of the Guarantee Agreement. All communications
and notices hereunder to the New Guarantor shall be given to it at the address
set forth under its signature below, with a copy to the Borrower.
SECTION 8. The New Guarantor agrees to reimburse the Administrative Agent
for its out-of-pocket expenses in connection with this Supplement, including the
fees, disbursements and other charges of counsel for the Administrative Agent.
IN WITNESS WHEREOF, the New Guarantor and the Administrative Agent have
duly executed this Supplement to the Guarantee Agreement as of the day and year
first above written.
[Name of New Guarantor]
By
-------------------------------
Name:
Title:
Address:
SUNTRUST BANK, as
Administrative Agent
By
-------------------------------
Name:
Title:
Address:
FORM OF CONTINUATION/CONVERSION
[Date]
SunTrust Bank,
as Administrative Agent
for the Lenders referred to below
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention:
Ladies and Gentlemen:
Reference is made to the Bridge Loan Agreement, dated as of November 1,
2002 (as amended and in effect on the date hereof, the "Loan Agreement"), among
the undersigned, as Borrower, the Lenders named therein, and SunTrust Bank, as
Administrative Agent. Terms defined in the Loan Agreement are used herein with
the same meanings. This notice constitutes a Continuation/Conversion and the
Borrower hereby requests the conversion or continuation of a Loan under the Loan
Agreement, and in that connection the Borrower specifies the following
information with respect to the Loan to be converted or continued as requested
hereby:
(A) Loan to which this request applies: __________________
(B) Principal amount of Loan to be converted/continued: __________________
(C) Effective date of election (which is a Business Day): __________________
(D) Interest rate basis: __________________
(E) Interest Period: __________________
Very truly yours,
KANEB PIPE LINE OPERATING
PARTNERSHIP, L.P.
By: KANEB PIPE LINE COMPANY,
General Partner
By:
----------------------------------
Name:
Title:
FORM OF OPINION OF COUNSEL FOR THE LOAN PARTIES
[Closing Date]
To each of the Lenders party to the Loan Agreement referred to below and to
SunTrust Bank, as Administrative Agent thereunder
Ladies and Gentlemen:
This opinion is furnished to you pursuant to Section 3.1(b)(vi) of the
Bridge Loan Agreement, dated as of November 1, 2002 (such agreement, excluding
the schedules and exhibits thereto, the "Loan Agreement"), among Kaneb Pipe Line
Operating Partnership, L.P., (the "Borrower"), Kaneb Pipe Line Partners, L.P.
("KPP"), the Lenders parties thereto and SunTrust Bank, as Administrative Agent
for said Lenders. Unless otherwise defined herein, terms defined in the Loan
Agreement are used herein as therein defined. We have acted as counsel to the
Loan Parties (as defined below) in connection with the preparation, execution
and delivery of the Loan Agreement. In connection with this opinion, we have
examined:
(1) A counterpart of the Loan Agreement, executed by the Borrower and KPP;
(2) the Notes, executed by the Borrower;
(3) a counterpart of the Subsidiary Guarantee Agreement, executed by
Support Terminal Services, Inc., Support Terminals Operating
Partnership, L.P. and StanTrans, Inc. (collectively, the "Guarantors",
and, together with the Borrower and KPP, the "Loan Parties");
(4) The other documents furnished by the Loan Parties pursuant to Section
3.1 of the Loan Agreement;
(5) The Constituent Documents of each Loan Party and all amendments
thereto; and
(6) A certificate of the Secretary of State of each State in which each
Loan Party is formed, organized or incorporated, as the case may be,
attesting to the continued existence and good standing of the Loan
Parties in the applicable States.
The Loan Agreement and the other agreements and instruments referred to in
clauses (1), (2) and (3) above are hereinafter referred to as the "Loan
Documents". In addition to the Loan Documents, we have examined such other
documents and corporate and partnership records (collectively, the "Other
Documents") and questions of law as we deem necessary for the purposes of this
opinion. We have also examined such certificates of public officials, corporate
officers of the Loan Parties and other Persons as we have deemed relevant and
appropriate as a basis for the opinions expressed herein, and we have made no
effort to independently verify the facts set forth in such certificates.
Further, in making the foregoing examinations, we have assumed the genuineness
of all signatures (other than signatures of the Loan Parties with respect to the
Loan Documents), the legal capacity of each person signatory to any of the
documents reviewed by us, the authenticity of all documents submitted to us as
originals and the conformity to authentic original documents of all documents
submitted to us as copies. In making the foregoing examinations, we have assumed
that, as to factual matters, all representations and warranties made in the
aforesaid documents (other than those which are expressed herein as our
opinions) were and are true, correct and complete in all material respects.
In rendering the opinions expressed herein, we have assumed that:
(a) each of the documents examined by us (other than the Loan
Documents) has been duly authorized, executed and delivered by each of the
parties thereto and constitutes the legal, valid and binding obligation of
each such party thereto enforceable in accordance with its terms;
(b) the Loan Documents have been duly authorized, executed and
delivered by or on behalf of each of the parties thereto other than the
Loan Parties, that each such party other than the Loan Parties has the
requisite power and authority to execute, deliver and perform such
documents to which it is a party, and that the Loan Documents constitute
the legal, valid and binding obligations of each such other party thereto
enforceable in accordance with its terms;
(c) no order, consent, approval, license, authorization, or validation
of, or filing, recording or registration with, or exemption by, any court,
governmental body or authority, or any subdivision thereof, is required to
authorize or is required in connection with, the execution and delivery by
any Person identified in any Loan Document as a party thereto, or in
connection with the performance of its obligations thereunder or the
consummation of the transactions contemplated thereby, other than those
that have been obtained or made and are in full force and effect (provided,
that we make no such assumption with respect to consents, approvals and the
like applicable to Loan Parties to the extent that we express our opinion
rendered in paragraph 4 below);
(d) the Administrative Agent has been and is the duly appointed agent
of each of the other Lenders pursuant to the Loan Agreement; and
(e) there are no extrinsic agreements or understandings among the
parties to the Loan Documents that would modify or affect the
interpretation of the terms of the Loan Documents or the respective rights
or obligations of the parties thereunder.
In rendering this opinion, we have made no independent investigation of the
facts referred to herein and have relied for the purpose of rendering this
opinion exclusively on the facts set forth in the Loan Documents and the Other
Documents and the certificates referred to above, which facts we assume have
been and will continue to be true, accurate and correct in all material
respects.
Based upon the foregoing, and upon an examination of such questions of law
as we have considered necessary or appropriate, and subject to the assumptions,
exceptions, qualifications and limitations set forth herein, we advise you that,
in our opinion:
1. Each Loan Party (a) has been duly formed and is validly existing in
good standing under the laws of its state of formation, (b) has the
corporate or partnership power and authority to own and operate its
property, to lease the property which it operates as lessee and to conduct
the business in which it is currently engaged and in which it proposes to
be engaged after the date hereof, in each case as described in the periodic
reports filed by KPP under the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), and (c) is duly qualified as a foreign entity and is
in good standing under the laws of each jurisdiction listed on Schedule I
hereto.
2. Each Loan Party has the corporate or partnership power and
authority to execute and deliver, and to perform its obligations under,
each Loan Document to which such Loan Party is a party. The Loan Agreement
has been duly executed and delivered by KPP and the Borrower, the Notes
have been duly executed and delivered by the Borrower, and the Subsidiary
Guarantee Agreement has been duly executed and delivered by each Guarantor.
3. Assuming the proceeds of the Loans are used solely for the purposes
set forth in the Loan Agreement, neither the execution and delivery of a
Loan Document by a Loan Party, nor performance by a Loan Party of its
obligations under a Loan Document, will (a) result in a breach of, or
constitute a default under, any agreement to which any of the Loan Parties
is a party or by which any of them or any of their respective properties is
bound that has been filed under the Exchange Act by KPP as an exhibit to
its annual report on Form 10-K for the year ended December 31, 1999, or as
an exhibit to a quarterly report on Form 10-Q filed during the year 2000 or
(b) violate (i) the Constituent Documents of any Loan Party, (ii) any
statutory law or regulation or (iii) any decree or order of any court,
governmental agency or arbitrator that is known by us to be applicable to
any of the Loan Parties or any of their respective properties.
4. No consent, approval, authorization or waiver of, or notice to or
filing with, or other action by, any governmental authority is required by
any statutory law, regulation or ruling as a condition to the execution and
delivery by the Loan Parties of the Loan Documents, or the performance by
the Loan Parties of their obligations under the Loan Documents.
5. To our knowledge, other than as disclosed in KPP's filings under
the Exchange Act, there are no legal or governmental proceedings pending to
which any of the Loan Parties is a party or threatened against any of the
Loan Parties which is required to be disclosed in such filings.
6. None of the Loan Parties is an "investment company" or a company
"controlled" by an "investment company" as such terms are defined in the
Investment Company Act of 1940, as amended, or a "public utility company"
or a "holding company," or a "subsidiary company" of a "holding company,"
or an "affiliate" of a "holding company" or of a "subsidiary company" of a
"holding company," as such terms are defined in the Public Utility Holding
Company Act of 1935, as amended. None of the Loan Parties is subject to
regulation under the Public Utility Holding Company Act of 1935, as
amended.
7. Under the laws of the State of New York, each Loan Document
constitutes the legal, valid and binding obligation of each Loan Party that
is a party thereto, enforceable against each such Loan Party in accordance
with its terms.
8. The foregoing opinions are subject to the following assumptions,
exceptions, qualifications and limitations.
(i) The foregoing opinions are expressly limited to matters under
and governed by the internal substantive laws of the States of New
York and Texas, the General Corporation Law of the State of Delaware,
the Revised Uniform Limited Partnership Act of the State of Delaware,
and applicable Federal laws of the United States of America, in each
case in effect on the date hereof and which, in our experience, are
normally applicable to the transactions provided for in the Loan
Documents, in each case, however, exclusive of, and without regard to,
any Excluded Laws. The term "Excluded Laws" means all (i) municipal,
political subdivision (whether created or enabled through legislative
action at the federal, state, regional or local level), local and
county ordinances, statutes, administrative decisions, laws, rules and
regulations, (ii) conflict of law principles and choice-of-law
statutes and rules, and (iii) statutes, laws, rules and regulations
relating to (a) pollution or protection of the environment, (b)
zoning, land use, building or construction, (c) operation of any asset
or property, (d) labor, employment, employee rights and benefits, or
occupational safety and health, (e) utility regulation or regulation
of matters pertaining to the acquisition, transportation,
transmission, storage or use of energy sources used in connection
therewith or generated thereby, (f) antitrust, (g) taxation and (h)
securities laws, in each case with respect to each of the foregoing,
(x) as interpreted, construed or enforced pursuant to any judicial,
arbitral or other decision or pronouncement, (y) as enacted,
promulgated or issued by, or otherwise existing in effect in, any
jurisdiction, including, without limitation, any State of the United
States of America and the United States of America, and (z) including,
without limitation, any and all authorizations, permits, consents,
applications, licenses, approvals, filings, registrations,
publications, exemptions and the like required by any of them.
(ii) The foregoing opinions regarding the enforceability of the Loan
Documents are subject to the following:
(A) The enforceability of the Loan Documents may be limited or
affected by (a) bankruptcy, insolvency, reorganization, moratorium,
liquidation, rearrangement, probate, conservatorship, fraudulent
transfer, fraudulent conveyance and other similar laws (including
court decisions) now or hereafter in effect and affecting the rights
and remedies of creditors generally or providing for the relief of
debtors generally, (b) the refusal of a particular court to grant (i)
equitable remedies, including, without limiting the generality of the
foregoing, specific performance and injunctive relief, or (ii) a
particular remedy sought under any Loan Document as opposed to another
remedy provided for therein or another remedy available at law or in
equity, (c) general principles of equity, including without limitation
requirements of good faith, fair dealing and reasonableness, and the
possible unavailability of specific performance or injunctive relief
(regardless of whether such remedies are sought in a proceeding in
equity or at law), and (d) judicial discretion.
(B) In rendering the foregoing opinions, we express no opinion as
to (1)(a) provisions in the Loan Documents that purport to restrict
access to legal or equitable remedies, that purport to affect service
of process, that purport to permit any party to increase the
obligations of any person or entity without the consent of such person
or entity, that purport to require any party to waive any notice
which, as a matter of law or equity, may not be waived, or that
purport to reinstate any obligation after payment or otherwise, that
purport to establish property classifications, presumptions or
evidentiary standards or to waive either illegality as a defense to
the performance of contract obligations or any other defense for such
performance that cannot, as a matter of law or equity, be effectively
waived, (b) provisions in the Loan Documents relating to future
subordination, receivership, delay or omission of enforcement of
rights and remedies, covenants not to ▇▇▇ or assert valid claims,
marshalling of assets, waiver of rights of redemption, and
severability clauses or rights of third parties, (c) provisions of the
Loan Documents purporting to waive, eliminate, prejudice or restrict
claims for damages or other remedies for trespass, conversion,
negligence, failure to comply with requirements concerning notices,
disposition of collateral or otherwise waiving, affecting or altering
rights or defenses of any party which, in each case, as a matter of
law or equity, may not be waived, affected or altered or the Lenders'
obligations under applicable law or (d) other provisions having
substantially similar effect, (2) the legality, validity,
enforceability or binding effect of provisions of the Loan Documents
relating to indemnities and rights of contribution to the extent
prohibited by public policy or which might require indemnification for
losses or expenses caused by negligence, gross negligence, willful
misconduct, fraud or illegality of an indemnified party, (3) the
effect of any provision of the Loan Documents which is intended to
permit modification thereof only by means of an agreement signed in
writing by the parties thereto, or (4) the effect of any provision of
the Loan Documents insofar as it provides that any person purchasing a
participation from a Lender or other Person may exercise set-off or
similar rights with respect to such participation or that any Lender
or other Person may exercise set-off or similar rights other than in
accordance with applicable law.
(C) We note that the enforceability of specific provisions of the
Loan Documents may be subject to standards of reasonableness, care and
diligence and "good faith" limitations and obligations such as those
provided in Sections 1-102(3), 1-203, 1-208 and 5-109 of the Uniform
Commercial Code as currently in effect in the State of New York, and
the related provisions of the Uniform Commercial Code as currently in
effect in the State of Texas, and applicable principles of common law
and judicial decisions.
(D) We have assumed that the Lenders will enforce each Loan
Document in compliance with the provisions thereof and all
requirements of applicable law.
(E) In connection with the provisions of the Loan Documents
whereby the Credit Parties submit to the jurisdiction of the United
States District Court for the Southern District of New York, we note
the limitations of 28 U.S.C. ▇▇.▇▇. 1331 and 1332 on Federal court
jurisdiction, and we also note that such submissions cannot supersede
such court's discretion in determining whether to transfer an action
from one Federal court to another under 28 U.S.C. ss. 1404(a).
(iii) In rendering the opinion expressed in paragraph 1 above
regarding existence and good standing, we have relied solely on
certificates of public officials of a recent date, and have conducted no
further investigation. Our opinion expressed in paragraph 6 with respect to
each Loan Party is based solely upon our understanding of their respective
businesses as described in the periodic reports filed by KPP under the
Exchange Act.
(iv) We do not express any opinion with respect to any exhibit to, or
other agreement referred to in, any of the Loan Documents.
(v) In rendering the foregoing opinions, we have not, pursuant to our
engagement, endeavored to express any opinions, and we express no opinions,
and none are intended to be implied hereby nor shall be inferred herefrom,
as to (a) the various state and federal laws, statutes, regulations,
interpretations, opinions, directives, orders, rulings, authorities or
similar matters regulating or governing the Administrative Agent or any
Lender (collectively, the "Rules") and/or their entry into, execution,
delivery or performance of the Loan Documents, or the transactions provided
for therein, or the conduct of its business related thereto, or (b) the
Administrative Agent's or any Lender's compliance with any of the Rules in
connection with any Loan Document, or the transactions provided for
therein.
(vi) As used herein, the phrase "to our knowledge" or words of similar
import means conscious awareness of facts or other information by the
lawyers in our firm who, based on our records as of 3:00 p.m. on December
27, 2000, have devoted substantive attention to legal matters on behalf of
the Loan Parties since January 1, 2000.
The opinions expressed herein are furnished to you for your sole benefit in
connection with the transactions contemplated by the Loan Agreement. The
opinions expressed herein may not be relied upon by you for any other purpose
and may not be relied upon for any purpose by any other person without our prior
written consent, except that any Person that may become a Lender after the date
hereof may rely upon this opinion in connection with those transactions. The
opinions expressed herein are as of the date hereof (and not as of any other
date) or, to the extent a reference to a certificate or other document is made
herein, to such date, and we make no undertaking to amend or supplement such
opinions as facts and circumstances come to our attention or changes in the law
occur which could affect such opinions.
Very truly yours,
SCHEDULE I
[To Be Revised by Counsel to the Borrower]
JURISDICTIONS OF LOAN PARTIES
KANEB PIPE LINE COMPANY LLC
Delaware*
Colorado
Iowa
Kansas
Nebraska
North Dakota
South Dakota
Wyoming
KANEB PIPE LINE PARTNERS, L.P.
Delaware*
KANEB PIPE LINE OPERATING PARTNERSHIP, L.P.
Delaware*
Colorado
Iowa
Kansas
Nebraska
North Dakota
South Dakota
Wyoming
* State of incorporation or formation.
SUPPORT TERMINAL SERVICES, INC.
Delaware*
Alabama
Arizona
California
Washington D.C.
Florida
Georgia
Illinois
Indiana
Kansas
Louisiana
Maryland
Minnesota
New Mexico
Oklahoma
Texas
▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇
Wisconsin
SUPPORT TERMINALS OPERATING PARTNERSHIP, L.P.
Delaware*
Alabama
California
Washington D.C.
Florida
Georgia
Illinois
Indiana
Kansas
Louisiana
Maryland
Minnesota
New Mexico
Oklahoma
Pennsylvania
Texas
▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇
Wisconsin
STANTRANS, INC.
Delaware*
Texas
* State of incorporation or formation.