1
CONFORMED COPY
$400,000,000
FIVE-YEAR CREDIT AGREEMENT
dated as of
January 30, 1998
among
K N Energy, Inc.,
The Banks Listed Herein,
and
▇▇▇▇▇▇ Guaranty Trust Company of New York,
as Administrative Agent
----------------
▇. ▇. ▇▇▇▇▇▇ Securities Inc.,
BancAmerica ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇,
▇▇▇▇▇ Securities Inc.
and
NationsBanc ▇▇▇▇▇▇▇▇▇▇ Securities LLC,
Syndication Agents
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TABLE OF CONTENTS
Page
----
ARTICLE 1
Definitions
Section 1.1. Definitions.............................................1
Section 1.2. Accounting Terms and Determinations....................15
Section 1.3. Types of Borrowings....................................16
ARTICLE 2
The Credits
Section 2.1. Commitments to Lend....................................16
Section 2.2. Notice of Committed Borrowing..........................16
Section 2.3. Money Market Borrowings................................17
Section 2.4. Notice to Banks; Funding of Loans......................21
Section 2.5. Notes..................................................22
Section 2.6. Maturity of Loans......................................23
Section 2.7. Interest Rates.........................................23
Section 2.8. Fees...................................................26
Section 2.9. Optional Termination or Reduction of Commitments.......27
Section 2.10. Scheduled Termination of Commitments...................27
Section 2.11. Optional Prepayments...................................27
Section 2.12. General Provisions as to Payments......................28
Section 2.13. Funding Losses.........................................29
Section 2.14. Computation of Interest and Fees.......................29
Section 2.15. Regulation D Compensation..............................29
Section 2.16. Letters of Credit......................................30
ARTICLE 3
Conditions
Section 3.1. Effectiveness..........................................33
Section 3.2. Borrowings and Issuances of Letters of Credit..........34
ARTICLE 4
Representations and Warranties
Section 4.1. Corporate Existence and Power..........................35
Section 4.2. Corporate and Governmental Authorization; No
Contravention..........................................35
Section 4.3. Binding Effect.........................................36
Section 4.4. Financial Information..................................36
Section 4.5. Litigation.............................................37
Section 4.6. Compliance with ERISA..................................37
Section 4.7. Environmental Matters..................................37
Section 4.8. Taxes..................................................38
Section 4.9. Subsidiaries...........................................38
Section 4.10. Not an Investment Company..............................38
Section 4.11. Full Disclosure........................................38
Section 4.12. MidCon Acquisition.....................................38
ARTICLE 5
Covenants
Section 5.1. Information............................................39
Section 5.2. Payment of Obligations.................................41
Section 5.3. Maintenance of Property; Insurance.....................41
Section 5.4. Conduct of Business and Maintenance of Existence.......42
Section 5.5. Compliance with Laws...................................42
Section 5.6. Inspection of Property, Books and Records..............42
Section 5.7. Debt...................................................43
Section 5.8. Minimum Net Worth......................................43
Section 5.9. Minimum Interest Coverage Ratio........................43
Section 5.10. Negative Pledge........................................44
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Section 5.11. Consolidations, Mergers and Sales of Assets............44
Section 5.12. Use of Proceeds........................................45
Section 5.13. Transactions with Affiliates...........................45
ARTICLE 6
Defaults
Section 6.1. Events of Default......................................45
Section 6.2. Notice of Default......................................48
Section 6.3. Cash Cover.............................................48
ARTICLE 7
The Agents
Section 7.1. Appointment and Authorization..........................49
Section 7.2. Administrative Agent and Affiliates....................49
Section 7.3. Action by Administrative Agent.........................49
Section 7.4. Consultation with Experts..............................49
Section 7.5. Liability of Administrative Agent......................49
Section 7.6. Indemnification........................................50
Section 7.7. Credit Decision........................................50
Section 7.8. Successor Administrative Agent.........................50
Section 7.9. Agents' Fees...........................................51
Section 7.10. Other Agents...........................................51
ARTICLE 8
Change in Circumstances
Section 8.1. Basis for Determining Interest Rate Inadequate
or Unfair..............................................51
Section 8.2. Illegality.............................................52
Section 8.3. Increased Cost and Reduced Return......................52
Section 8.4. Taxes..................................................54
Section 8.5. Base Rate Loans Substituted for Affected Fixed
Rate Loans.............................................56
Section 8.6. Substitution of Bank...................................56
ARTICLE 9
Miscellaneous
Section 9.1. Notices................................................57
Section 9.2. No Waivers.............................................57
Section 9.3. Expenses; Indemnification..............................57
Section 9.4. Sharing of Set-offs....................................58
Section 9.5. Amendments and Waivers.................................58
Section 9.6. Successors and Assigns.................................59
Section 9.7. Collateral.............................................60
Section 9.8. Governing Law; Submission to Jurisdiction..............60
Section 9.9. Counterparts; Integration..............................61
Section 9.10. WAIVER OF JURY TRIAL...................................61
Section 9.11. Existing Credit Agreement..............................61
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PRICING SCHEDULE
EXHIBIT A - NOTE
EXHIBIT B - MONEY MARKET QUOTE REQUEST
EXHIBIT C - INVITATION FOR MONEY MARKET QUOTES
EXHIBIT D - MONEY MARKET QUOTE
EXHIBIT E-1 - OPINION OF SPECIAL COUNSEL FOR THE BORROWER
EXHIBIT E-2 - OPINION OF KANSAS COUNSEL FOR THE BORROWER
EXHIBIT E-3 - OPINION OF GENERAL COUNSEL OF THE BORROWER
EXHIBIT F - OPINION OF ▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇, SPECIAL COUNSEL FOR THE
AGENTS
EXHIBIT G - ASSIGNMENT AND ASSUMPTION AGREEMENT
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FIVE-YEAR CREDIT AGREEMENT
AGREEMENT dated as of January 30, 1998 among K N ENERGY, INC.,
the BANKS listed on the signature pages hereof and ▇▇▇▇▇▇ GUARANTY TRUST COMPANY
OF NEW YORK, as Administrative Agent.
W I T N E S S E T H:
WHEREAS, the Borrower, desires to replace the Amended and
Restated Credit Agreement dated as of March 7, 1997 (the "Existing Credit
Agreement"), among the Borrower, certain banks and ▇▇▇▇▇▇ Guaranty Trust Company
of New York, as agent, by entering into this Agreement; and
WHEREAS, the Banks agree to do so.
NOW, THEREFORE, the parties hereto agree as follows:
ARTICLE 1
Definitions
Section 1.1. Definitions. The following terms, as used herein, have the
following meanings:
"Absolute Rate Auction" means a solicitation of Money Market
Quotes setting forth Money Market Absolute Rates pursuant to Section 2.3.
"Acquisition" means the purchase of MidCon Corp. by the Borrower
from Occidental Petroleum Corporation pursuant to the Stock Purchase Agreement.
"Adjusted CD Rate" has the meaning set forth in Section 2.7(b).
"Administrative Agent" means ▇▇▇▇▇▇ Guaranty Trust Company of New
York in its capacity as administrative agent for the Banks under this Agreement,
and its successors in such capacity.
"Administrative Questionnaire" means, with respect to each Bank,
an administrative questionnaire in the form prepared by the Administrative Agent
and submitted to the Administrative Agent (with a copy to the Borrower) duly
completed by such Bank.
"Affiliate" means (i) any Person that directly, or indirectly
through one or more intermediaries, controls the Borrower (a "Controlling
Person") or (ii) any Person (other than the Borrower or a Subsidiary) which is
controlled by or is under common control with a Controlling Person. As used
herein, the term "control" means possession, directly or indirectly, of the
power to direct or cause the direction of the management or policies of a
Person, whether through the ownership of voting securities, by contract or
otherwise.
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"Agent" means each of the Administrative Agent and the
Syndication Agents, and "Agents" means any combination of them, as the context
may require.
"Applicable Lending Office" means, with respect to any Bank, (i)
in the case of its Domestic Loans, its Domestic Lending Office, (ii) in the case
of its Euro-Dollar Loans, its Euro-Dollar Lending Office and (iii) in the case
of its Money Market Loans, its Money Market Lending Office.
"Assessment Rate" has the meaning set forth in Section 2.7(b).
"Assignee" has the meaning set forth in Section 9.6(c).
"Bank" means each bank listed on the signature pages hereof, each
Assignee which becomes a Bank pursuant to Section 9.6(c), and their respective
successors.
"Base Rate" means, for any day, a rate per annum equal to the
higher of (i) the Prime Rate for such day or (ii) the sum of 1/2 of 1% plus the
Federal Funds Rate for such day.
"Base Rate Loan" means a Committed Loan to be made by a Bank as a
Base Rate Loan in accordance with the applicable Notice of Committed Borrowing
or pursuant to Article 8.
"Benefit Arrangement" means at any time an employee benefit plan
within the meaning of Section 3(3) of ERISA which is not a Plan or a
Multiemployer Plan and which is maintained or otherwise contributed to by any
member of the ERISA Group.
"Borrower" means K N Energy, Inc., a Kansas corporation, and its
successors.
"Borrower's 1996 Form 10-K" means the Borrower's annual report on
Form 10-K for 1996, as filed with the Securities and Exchange Commission
pursuant to the Securities Exchange Act of 1934.
"Borrower's Latest Form 10-Q" means the Borrower's quarterly
report on Form 10-Q for the quarter ended September 30, 1997, as filed with the
Securities and Exchange Commission pursuant to the Securities Exchange Act of
1934.
"Borrowing" has the meaning set forth in Section 1.3.
"CD Base Rate" has the meaning set forth in Section 2.7(b).
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"CD Loan" means a Committed Loan to be made by a Bank as a CD
Loan in accordance with the applicable Notice of Committed Borrowing.
"CD Margin" has the meaning set forth in Section 2.7(b).
"CD Reference Banks" means NationsBank, N.A., The Chase
Manhattan Bank and ▇▇▇▇▇▇ Guaranty Trust Company of New York.
"Commitment" means, with respect to each Bank, the amount set
forth opposite the name of such Bank on the signature pages of this Agreement,
as such amount may be reduced from time to time pursuant to Sections 2.9 and
2.10.
"Committed Loan" means a loan made by a Bank pursuant to Section
2.1.
"Consolidated Assets" means the total amount of assets appearing
on the consolidated balance sheet of the Borrower and its Consolidated
Subsidiaries, prepared in accordance with generally accepted accounting
principles as of the date of the most recent regularly prepared consolidated
financial statements prior to the taking of any action for the purposes of which
the determination is being made.
"Consolidated Debt" of any Person means at any date the sum
(without duplication) of (i) the Debt of such Person and its Consolidated
Subsidiaries, determined on a consolidated basis as of such date plus (ii) the
excess (if any) of the Trust Preferred Securities of such Person over 10% of the
Consolidated Total Capitalization of such Person at such date minus (iii) the
portion of the Substitute Note collateralized as contemplated by Section 5.10(b)
hereof.
"Consolidated EBITDA" means, for any period, Consolidated Net
Income for such period plus, to the extent deducted in determining Consolidated
Net Income for such period, the aggregate amount of (i) Consolidated Interest
Expense, (ii) income tax expense and (iii) depreciation and amortization
expense.
"Consolidated Interest Expense" means, for any period, the
interest expense of the Borrower and its Consolidated Subsidiaries, determined
on a consolidated basis for such period.
"Consolidated Subsidiary" of any Person means at any date any
Subsidiary or other entity the accounts of which would be consolidated with
those of such Person in its consolidated financial statements if such statements
were prepared as of such date.
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"Consolidated Net Income" means, for any period, the net income
of the Borrower and its Consolidated Subsidiaries before extraordinary items,
determined on a consolidated basis for such period.
"Consolidated Net Worth" of any Person means at any date the sum
(without duplication) of (i) the consolidated stockholders' equity of such
Person and its Consolidated Subsidiaries, determined as of such date plus (ii)
the Mandatorily Convertible Preferred Stock of such Person plus (iii) the Trust
Preferred Securities of such Person; provided that the amount of Trust Preferred
Securities added pursuant to this clause (iii) shall not exceed 10% of
Consolidated Total Capitalization of such Person at such date.
"Consolidated Total Capitalization" of any Person means at any
date the sum of Consolidated Debt of such Person and Consolidated Net Worth of
such Person, each determined as of such date.
"Credit Event" means a Borrowing or an issuance of a Letter of
Credit.
"Debt" of any Person means at any date, 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 to pay the deferred purchase price of property or
services, except trade accounts payable or deferred employee and director
compensation arising in the ordinary course of business, (iv) all obligations of
such Person as lessee which are capitalized in accordance with generally
accepted accounting principles, (v) all non-contingent obligations (and, for
purposes of Section 5.11 and the definitions of Material Debt and Material
Financial Obligations, all contingent obligations) of such Person to reimburse
any bank or other Person in respect of amounts paid under a letter of credit or
similar instrument, (vi) all Debt secured by a Lien on any asset of such Person,
whether or not such Debt is otherwise an obligation of such Person, and (vii)
all Debt of others Guaranteed by such Person.
"Default" means any condition or event which constitutes an Event
of Default or which with the giving of notice or lapse of time or both would,
unless cured or waived, become an Event of Default.
"Derivatives Obligations" of any Person means all obligations of
such Person in respect of any rate swap transaction, basis swap, forward rate
transaction, commodity swap, commodity option, equity or equity index swap,
equity or equity index option, bond option, interest rate option, foreign
exchange transaction, cap transaction, floor transaction, collar transaction,
currency swap transaction, cross-currency rate swap transaction, currency option
or any other similar transaction (including any option with respect to any of
the foregoing transactions) or any combination of the foregoing transactions.
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"Domestic Business Day" means any day except a Saturday, Sunday
or other day on which commercial banks in New York City are authorized by law to
close.
"Domestic Lending Office" means, as to each Bank, its office
located at its address set forth in its Administrative Questionnaire (or
identified in its Administrative Questionnaire as its Domestic Lending Office)
or such other office as such Bank may hereafter designate as its Domestic
Lending Office by notice to the Borrower and the Administrative Agent; provided
that any Bank may so designate separate Domestic Lending Offices for its Base
Rate Loans, on the one hand, and its CD Loans, on the other hand, in which case
all references herein to the Domestic Lending Office of such Bank shall be
deemed to refer to either or both of such offices, as the context may require.
"Domestic Loans" means CD Loans or Base Rate Loans or both.
"Domestic Reserve Percentage" has the meaning set forth in
Section 2.7(b).
"Effective Date" means the date this Agreement becomes effective
in accordance with Section 3.1.
"Environmental Laws" means any and all federal, state, local and
foreign statutes, laws, judicial decisions, regulations, ordinances, rules,
judgments, orders, decrees, plans, injunctions, permits, concessions, grants,
franchises, licenses, agreements and other governmental restrictions relating to
the environment, the effect of the environment on human health or to emissions,
discharges or releases of pollutants, contaminants, Hazardous Substances or
wastes into the environment including, without limitation, ambient air, surface
water, ground water, or land, or otherwise relating to the manufacture,
processing, distribution, use, treatment, storage, disposal, transport or
handling of pollutants, contaminants, Hazardous Substances or wastes or the
clean-up or other remediation thereof.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended, or any successor statute.
"ERISA Group" means the Borrower, any Subsidiary and all members
of a controlled group of corporations and all trades or businesses (whether or
not incorporated) under common control which, together with the Borrower or any
Subsidiary, are treated as a single employer under Section 414 of the Internal
Revenue Code.
"Euro-Dollar Business Day" means any Domestic Business Day on
which commercial banks are open for international business (including dealings
in dollar deposits) in London.
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"Euro-Dollar Lending Office" means, as to each Bank, its office,
branch or affiliate located at its address set forth in its Administrative
Questionnaire (or identified in its Administrative Questionnaire as its
Euro-Dollar Lending Office) or such other office, branch or affiliate of such
Bank as it may hereafter designate as its Euro-Dollar Lending Office by notice
to the Borrower and the Administrative Agent.
"Euro-Dollar Loan" means a Committed Loan to be made by a Bank as
a Euro-Dollar Loan in accordance with the applicable Notice of Committed
Borrowing.
"Euro-Dollar Margin" has the meaning set forth in Section
2.7(c).
"Euro-Dollar Reference Banks" means the principal London offices
(for determinations of a London Interbank Offered Rate) or domestic offices (for
determinations of an Interbank Offered Rate) of NationsBank, N.A., The Chase
Manhattan Bank and ▇▇▇▇▇▇ Guaranty Trust Company of New York.
"Euro-Dollar Reserve Percentage" means for any day that
percentage (expressed as a decimal) which is in effect on such day, as
prescribed by the Board of Governors of the Federal Reserve System (or any
successor) for determining the maximum reserve requirement for a member bank of
the Federal Reserve System in New York City with deposits exceeding five billion
dollars in respect of "Eurocurrency liabilities" (or in respect of any other
category of liabilities which includes deposits by reference to which the
interest rate on Euro-Dollar Loans is determined or any category of extensions
of credit or other assets which includes loans by a non-United States office of
any Bank to United States residents).
"Event of Default" has the meaning set forth in Section 6.1.
"Federal Funds Rate" means, for any day, the rate per annum
(rounded upward, if necessary, to the nearest 1/100th of 1%) equal to the
weighted average of the rates on overnight Federal funds transactions with
members of the Federal Reserve System arranged by Federal funds brokers on such
day, as published by the Federal Reserve Bank of New York on the Domestic
Business Day next succeeding such day, provided that (i) if such day is not a
Domestic Business Day, the Federal Funds Rate for such day shall be such rate on
such transactions on the next preceding Domestic Business Day as so published on
the next succeeding Domestic Business Day, and (ii) if no such rate is so
published on such next succeeding Domestic Business Day, the Federal Funds Rate
for such day shall be the average rate quoted to ▇▇▇▇▇▇ Guaranty Trust Company
of New York on such day on such transactions as determined by the Administrative
Agent.
"Fixed Rate Loans" means CD Loans or Euro-Dollar Loans or Money
Market Loans (excluding Money Market LIBOR Loans bearing interest at the Base
Rate pursuant to Section 8.1(a)) or any combination of the foregoing.
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"Guarantee" by any Person means any obligation, contingent or
otherwise, of such Person directly or indirectly guaranteeing any Debt or other
obligation of any other Person and, without limiting the generality of the
foregoing, any obligation, direct or indirect, contingent or otherwise, of such
Person (i) to purchase or pay (or advance or supply funds for the purchase or
payment of) such Debt or other obligation (whether arising by virtue of
partnership arrangements, by agreement to keep-well, to purchase assets, goods,
securities or services, to take-or-pay, or to maintain financial statement
conditions or otherwise) or (ii) entered into for the purpose of assuring in any
other manner the obligee of such Debt or other obligation of the payment thereof
or to protect such obligee against loss in respect thereof (in whole or in
part), provided that the term Guarantee shall not include endorsements for
collection or deposit in the ordinary course of business. The term "Guarantee"
used as a verb has a corresponding meaning.
"Hazardous Substances" means any toxic, radioactive, caustic or
otherwise hazardous substance, including petroleum, its derivatives, by-products
and other hydrocarbons, or any substance having any constituent elements
displaying any of the foregoing characteristics.
"Indemnitee" has the meaning set forth in Section 9.3(b).
"Interest Coverage Ratio" means, at any date, the ratio of
Consolidated EBITDA to Consolidated Interest Expense for the period of four
consecutive fiscal quarters most recently ended on or before such date.
"Interest Period" means: (1) with respect to each Euro-Dollar
Borrowing, the period commencing on the date of such Borrowing and ending one,
two, three or six months thereafter, as the Borrower may elect in the applicable
Notice of Borrowing; except that with respect to any Borrowing occurring prior
to the Syndication Date, (i) any such Borrowing occurring prior to February 23,
1998 shall have an Interest Period ending on February 23, 1998 and (ii) any such
Borrowing on or after February 23, 1998 shall have an Interest Period ending one
week thereafter; provided that:
(a) any Interest Period which would otherwise end on a day
which is not a Euro-Dollar Business Day shall be extended to the next succeeding
Euro-Dollar Business Day unless such Euro-Dollar Business Day falls in another
calendar month, in which case such Interest Period shall end on the next
preceding Euro-Dollar Business Day;
(b) any Interest Period which begins on the last Euro-Dollar
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, subject to clause (c) below, end on the last Euro-Dollar Business Day of
a calendar month; and
(c) any Interest Period which would otherwise end after the
Termination Date shall end on the Termination Date;
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(2) with respect to each CD Borrowing, the period commencing on
the date of such Borrowing and ending 30, 60, 90 or 180 days thereafter, as the
Borrower may elect in the applicable Notice of Borrowing; provided that:
(a) any Interest Period (other than an Interest Period
determined pursuant to clause (b) below) which would otherwise end on a day
which is not a Euro-Dollar Business Day shall be extended to the next succeeding
Euro-Dollar Business Day; and
(b) any Interest Period which would otherwise end after the
Termination Date shall end on the Termination Date;
(3) with respect to each Base Rate Borrowing, the period
commencing on the date of such Borrowing and ending 30 days thereafter; provided
that:
(a) any Interest Period (other than an Interest Period
determined pursuant to clause (b) below) which would otherwise end on a day
which is not a Euro-Dollar Business Day shall be extended to the next
succeeding Euro-Dollar Business Day; and
(b) any Interest Period which would otherwise end after the
Termination Date shall end on the Termination Date;
(4) with respect to each Money Market LIBOR Borrowing, the period
commencing on the date of such Borrowing and ending such whole number of months
thereafter (but not more than nine months) as the Borrower may elect in
accordance with Section 2.3; provided that:
(a) any Interest Period which would otherwise end on a day
which is not a Euro-Dollar Business Day shall be extended to the next succeeding
Euro-Dollar Business Day unless such Euro-Dollar Business Day falls in another
calendar month, in which case such Interest Period shall end on the next
preceding Euro-Dollar Business Day;
(b) any Interest Period which begins on the last Euro-Dollar
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, subject to clause (c) below, end on the last Euro-Dollar Business Day of
a calendar month; and
(c) any Interest Period which would otherwise end after the
Termination Date shall end on the Termination Date;
(5) with respect to each Money Market Absolute Rate Borrowing,
the period commencing on the date of such Borrowing and ending such number of
days thereafter (but not less than seven days nor more than 360 days) as the
Borrower may elect in accordance with Section 2.3; provided that:
13
(a) any Interest Period which would otherwise end on a day
which is not a Euro-Dollar Business Day shall be extended to the next succeeding
Euro-Dollar Business Day; and
(b) any Interest Period which would otherwise end after the
Termination Date shall end on the Termination Date.
"Internal Revenue Code" means the Internal Revenue Code of 1986,
as amended, or any successor statute.
"Investment" means any investment in any Person, whether by means
of share purchase, capital contribution, loan, time deposit or otherwise.
"Issuing Bank" means ▇▇▇▇▇▇ Guaranty Trust Company of New York
and any other Bank that may agree with the Borrower in writing to issue letters
of credit hereunder, in each case as issuer of a Letter of Credit hereunder. The
Borrower shall promptly notify the Administrative Agent of any additional
Issuing Banks.
"LC Fee Rate" means a rate per annum equal to the Euro-Dollar
Margin.
"Letter of Credit" means a letter of credit issued or to be
issued hereunder by an Issuing Bank in accordance with Section 2.16.
"Letter of Credit Commitment" means the lesser of (x)
$100,000,000 and (y) the aggregate amount of the Commitments.
"Letter of Credit Liabilities" means, for any Bank and at any
time, such Bank's ratable participation in the sum of (x) the amounts then owing
by the Borrower in respect of amounts drawn under Letters of Credit and (y) the
aggregate amount then available for drawing under all Letters of Credit.
"LIBOR Auction" means a solicitation of Money Market Quotes
setting forth Money Market Margins based on the London Interbank Offered Rate
pursuant to Section 2.3.
"Lien" means, with respect to any asset, any mortgage, lien,
pledge, charge, security interest or encumbrance of any kind, or any other type
of preferential arrangement that has the practical effect of creating a security
interest, in respect of such asset. For the purposes of this Agreement, the
Borrower or any Subsidiary shall be deemed to own subject to a Lien any asset
which it has acquired or holds subject to the interest of a vendor or lessor
under any conditional sale agreement, capital lease or other title retention
agreement relating to such asset.
"Loan" means a Domestic Loan or a Euro-Dollar Loan or a Money
Market Loan and "Loans" means Domestic Loans or Euro-Dollar Loans or Money
Market Loans or any combination of the foregoing.
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"London Interbank Offered Rate" has the meaning set forth in
Section 2.7(c).
"Mandatorily Convertible Preferred Stock", means, with respect to
the Borrower, preferred securities of a Subsidiary which are (i) mandatorily
convertible into common equity securities of the Borrower within approximately
three years of their date of issuance, (ii) issued in conjunction with, and
pledged to secure, an obligation to purchase common equity securities of the
Borrower within approximately three years for an equal amount or (iii) otherwise
structured in a manner satisfactory to the Administrative Agent so as to ensure
the issuance of incremental common equity securities of the Borrower in a
substantially equal amount within approximately three years.
"Material Debt" means Debt (other than (i) the Notes and (ii)
Debt owing to the Borrower or a Subsidiary) of the Borrower and/or one or more
of its Subsidiaries, arising in one or more related or unrelated transactions,
in an aggregate principal or face amount exceeding $75,000,000.
"Material Financial Obligations" means a principal or face amount
of Debt (other than (i) the Notes and (ii) Debt owing to the Borrower or a
Subsidiary) and/or payment obligations in respect of Derivatives Obligations of
the Borrower and/or one or more of its Subsidiaries, arising in one or more
related or unrelated transactions, exceeding in the aggregate $125,000,000.
"Material Subsidiary" means any Subsidiary the consolidated
assets of which constitute 10% or more of Consolidated Assets.
"Money Market Absolute Rate" has the meaning set forth in
Section 2.3(d).
"Money Market Absolute Rate Loan" means a loan to be made by a
Bank pursuant to an Absolute Rate Auction.
"Money Market Lending Office" means, as to each Bank, its
Domestic Lending Office or such other office, branch or affiliate of such Bank
as it may hereafter designate as its Money Market Lending Office by notice to
the Borrower and the Administrative Agent; provided that any Bank may from time
to time by notice to the Borrower and the Administrative Agent designate
separate Money Market Lending Offices for its Money Market LIBOR Loans, on the
one hand, and its Money Market Absolute Rate Loans, on the other hand, in which
case all references herein to the Money Market Lending Office of such Bank shall
be deemed to refer to either or both of such offices, as the context may
require.
"Money Market LIBOR Loan" means a loan to be made by a Bank
pursuant to a LIBOR Auction (including such a loan bearing interest at the Base
Rate pursuant to Section 8.1(a)).
"Money Market Loan" means a Money Market LIBOR Loan or a Money
Market Absolute Rate Loan.
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"Money Market Margin" has the meaning set forth in Section
2.3(d).
"Money Market Quote" means an offer by a Bank to make a Money
Market Loan in accordance with Section 2.3.
"Moody's" means ▇▇▇▇▇'▇ Investors Service, Inc.
"Multiemployer Plan" means at any time an employee pension
benefit plan within the meaning of Section 4001(a)(3) of ERISA to which any
member of the ERISA Group is then making or accruing an obligation to make
contributions or has within the preceding five plan years made contributions,
including for these purposes any Person which ceased to be a member of the ERISA
Group during such five year period.
"Notes" means promissory notes of the Borrower, substantially in
the form of Exhibit A hereto, evidencing the obligation of the Borrower to repay
the Loans, and "Note" means any one of such promissory notes issued hereunder.
"Notice of Borrowing" means a Notice of Committed Borrowing (as
defined in Section 2.2) or a Notice of Money Market Borrowing (as defined in
Section 2.3(f)).
"Notice of Issuance" has the meaning set forth in Section
2.16(b).
"Parent" means, with respect to any Bank, any Person
controlling such Bank.
"Participant" has the meaning set forth in Section 9.6(b).
"PBGC" means the Pension Benefit Guaranty Corporation or any
entity succeeding to any or all of its functions under ERISA.
"Person" means an individual, a corporation, a partnership, an
association, a trust or any other entity or organization, including a government
or political subdivision or an agency or instrumentality thereof.
"Plan" means at any time an employee pension benefit plan (other
than a Multiemployer Plan) which is covered by Title IV of ERISA or subject to
the minimum funding standards under Section 412 of the Internal Revenue Code and
either (i) is maintained, or contributed to, by any member of the ERISA Group
for employees of any member of the ERISA Group or (ii) has at any time within
the preceding five years been maintained, or contributed to, by any Person which
was at such time a member of the ERISA Group for employees of any Person which
was at such time a member of the ERISA Group.
16
"Purchase Agreement" means the Purchase and Sale Agreement dated
as of January 28, 1994, among K N Gas Supply Services, Inc., the Borrower, Bank
of America National Trust and Savings Association, as the initial Purchaser (as
defined therein), and Bank of America National Trust and Savings Association, as
agent for the Purchasers.
"Pricing Schedule" means the Schedule attached hereto
identified as such.
"Prime Rate" means the rate of interest publicly announced by
▇▇▇▇▇▇ Guaranty Trust Company of New York in New York City from time to time as
its Prime Rate.
"Reference Banks" means the CD Reference Banks or the Euro-Dollar
Reference Banks, as the context may require, and "Reference Bank" means any one
of such Reference Banks.
"Refunding Borrowing" means a Committed Borrowing which, after
application of the proceeds thereof, results in no net increase in the
outstanding principal amount of Committed Loans made by any Bank.
"Regulation U" means Regulation U of the Board of Governors of
the Federal Reserve System, as in effect from time to time.
"Reimbursement Agreement" means the Reimbursement Agreement dated
as of January 30, 1998, among the Borrower, the banks parties thereto and ▇▇▇▇▇▇
Guaranty Trust Company as the administrative agent, as amended and in effect
from time to time.
"Required Banks" means at any time Banks having at least 66 2/3 %
of the aggregate amount of the Commitments or, if the Commitments shall have
been terminated, holding Notes evidencing at least 66 2/3% of the aggregate
unpaid principal amount of the Loans and the aggregate amount of Letter of
Credit Liabilities.
"Revolving Credit Period" means the period from and including the
Effective Date to but not including the Termination Date.
"S&P" means Standard & Poor's Ratings Services, a division of The
▇▇▇▇▇▇-▇▇▇▇ Companies, Inc.
"Stock Purchase Agreement" means the Stock Purchase Agreement
dated as of December 18, 1997, between Occidental Petroleum Corporation, a
Delaware corporation, and the Borrower as amended and in effect from time to
time; provided that any such amendment from the form thereof heretofore
furnished to each of the Banks which could reasonably be expected to materially
adversely affect the business, consolidated financial position or consolidated
results of operations of the Borrower and its Consolidated Subsidiaries,
considered as a whole, shall be effective for purposes of references thereto in
this Agreement only if such amendment shall have received the written consent of
the Required Banks (which shall not be unreasonably withheld).
17
"Subsidiary" means, as to any Person, any corporation or other
entity of which securities or other ownership interests having ordinary voting
power to elect a majority of the board of directors or other persons performing
similar functions are at the time directly or indirectly owned by such Person;
unless otherwise specified, "Subsidiary" means a Subsidiary of the Borrower.
"Substitute Note" means the Substitute Note (as defined in the
Stock Purchase Agreement) issued by the Borrower to Occidental Petroleum
Corporation in connection with the Acquisition.
"Syndication Agent" means either ▇.▇. ▇▇▇▇▇▇ Securities Inc.,
BancAmerica ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ Securities Inc. or NationsBanc
▇▇▇▇▇▇▇▇▇▇ Securities LLC in its capacity as a syndication agent in respect of
this Agreement, and "Syndication Agents" means all of them.
"Syndication Date" means the earlier of (i) March 31, 1998 and
(ii) the first date subsequent to the date hereof on which the Commitments of
the Banks listed on the signature pages hereof shall have been reduced to an
amount less than 75% of the aggregate amount of the Commitments by reason of the
completion of primary syndication.
"Termination Date" means January 30, 2003, or, if such day is not
a Euro-Dollar Business Day, the next preceding Euro-Dollar Business Day.
"Trust Preferred Securities" means, with respect to the Borrower,
mandatorily redeemable capital trust securities of trusts which are Subsidiaries
and the subordinated debentures of the Borrower in which the proceeds of the
issuance of such capital trust securities are invested, including, without
limitation, (i) the 8.56% Series B Capital Trust Pass-through Securities of K N
Capital Trust I and (ii) the capital trust securities of K N Capital Trust II
anticipated to be issued after the Effective Date.
"Unfunded Liabilities" means, with respect to any Plan at any
time, the amount (if any) by which (i) the value of all benefit liabilities
under such Plan, determined on a plan termination basis using the assumptions
prescribed by the PBGC for purposes of Section 4044 of ERISA, exceeds (ii) the
fair market value of all Plan assets allocable to such liabilities under Title
IV of ERISA (excluding any accrued but unpaid contributions), all determined as
of the then most recent valuation date for such Plan, but only to the extent
that such excess represents a potential liability of a member of the ERISA Group
to the PBGC or any other Person under Title IV of ERISA.
"United States" means the United States of America, including the
States and the District of Columbia, but excluding its territories and
possessions.
"Wholly-Owned Consolidated Subsidiary" of any Person means any
Consolidated Subsidiary all of the shares of capital stock or other ownership
interests of which (except directors' qualifying shares) are at the time
directly or indirectly owned by such Person.
18
Section 1.2. Accounting Terms and Determinations. Unless
otherwise 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 generally accepted accounting principles as in effect from time
to time, applied on a basis consistent (except for changes concurred in by the
Borrower's independent public accountants) with the most recent audited
consolidated financial statements of the Borrower and its Consolidated
Subsidiaries delivered to the Banks; provided that, if the Borrower notifies the
Administrative Agent that the Borrower wishes to amend any covenant in Article 5
to eliminate the effect of any change in generally accepted accounting
principles on the operation of such covenant (or if the Administrative Agent
notifies the Borrower that the Required Banks wish to amend Article 5 for such
purpose), then the Borrower's compliance with such covenant shall be determined
on the basis of generally accepted accounting principles in effect immediately
before the relevant change in generally accepted accounting principles became
effective, until either such notice is withdrawn or such covenant is amended in
a manner satisfactory to the Borrower and the Required Banks.
Section 1.3. Types of Borrowings. The term "Borrowing" denotes
the aggregation of Loans of one or more Banks to be made to the Borrower
pursuant to Article 2 on a single date and for a single Interest Period.
Borrowings are classified for purposes of this Agreement either by reference to
the pricing of Loans comprising such Borrowing (e.g., a "Euro-Dollar Borrowing"
is a Borrowing comprised of Euro-Dollar Loans) or by reference to the provisions
of Article 2 under which participation therein is determined (i.e., a "Committed
Borrowing" is a Borrowing under Section 2.1 in which all Banks participate in
proportion to their Commitments, while a "Money Market Borrowing" is a Borrowing
under Section 2.3 in which the Bank participants are determined on the basis of
their bids in accordance therewith).
ARTICLE 2
The Credits
Section 2.1. Commitments to Lend. During the Revolving Credit
Period each Bank severally agrees, on the terms and conditions set forth in this
Agreement, to make loans to the Borrower pursuant to this Section from time to
time in amounts such that the sum of the aggregate principal amount of Committed
Loans by such Bank at any one time outstanding plus the Letter of Credit
Liabilities of such Bank at such time shall not exceed the amount of its
Commitment. Each Borrowing under this Section shall be in an aggregate principal
amount of $5,000,000 or any larger multiple of $1,000,000 (except that any such
Borrowing may be in the aggregate amount available in accordance with Section
3.2(e)) and shall be made from the several Banks ratably in proportion to their
respective Commitments. Within the foregoing limits, the Borrower may borrow
under this Section, repay, or to the extent permitted by Section 2.11, prepay
Loans and reborrow at any time during the Revolving Credit Period under this
Section.
19
Section 2.2. Notice of Committed Borrowing. The Borrower shall
give the Administrative Agent notice (a "Notice of Committed Borrowing") not
later than 10:30 A.M. (New York City time) on (x) the date of each Base Rate
Borrowing, (y) the second Domestic Business Day before each CD Borrowing and (z)
the third Euro-Dollar Business Day before each Euro-Dollar Borrowing, except if
the Euro-Dollar Borrowing is at the Interbank Offered Rate, then upon the date
of each such borrowing, specifying:
(a) the date of such Borrowing, which shall be a Domestic Business
Day in the case of a Domestic Borrowing or a Euro-Dollar Business Day in the
case of a Euro-Dollar Borrowing,
(b) the aggregate amount of such Borrowing,
(c) whether the Loans comprising such Borrowing are to be CD Loans,
Base Rate Loans or Euro-Dollar Loans, and
(d) in the case of a Fixed Rate Borrowing, the duration of the
Interest Period applicable thereto, subject to the provisions of the definition
of Interest Period.
Section 2.3. Money Market Borrowings. (a) The Money Market
Option. In addition to Committed Borrowings pursuant to Section 2.1, the
Borrower may, as set forth in this Section, request the Banks during the
Revolving Credit Period to make offers to make Money Market Loans to the
Borrower. The Banks may, but shall have no obligation to, make such offers and
the Borrower may, but shall have no obligation to, accept any such offers in the
manner set forth in this Section.
(b) Money Market Quote Request. When the Borrower wishes to request
offers to make Money Market Loans under this Section, it shall transmit to the
Administrative Agent by telex or facsimile transmission a Money Market Quote
Request substantially in the form of Exhibit B hereto so as to be received not
later than 10:30 A.M. (New York City time) on (x) the fifth Euro-Dollar Business
Day prior to the date of Borrowing proposed therein, in the case of a LIBOR
Auction or (y) the Domestic Business Day next preceding the date of Borrowing
proposed therein, in the case of an Absolute Rate Auction (or, in either case,
such other time or date as the Borrower and the Administrative Agent shall have
mutually agreed and shall have notified to the Banks not later than the date of
the Money Market Quote Request for the first LIBOR Auction or Absolute Rate
Auction for which such change is to be effective) specifying:
(i) the proposed date of Borrowing, which shall be a
Euro-Dollar Business Day in the case of a LIBOR Auction or a Domestic
Business Day in the case of an Absolute Rate Auction,
(ii) the aggregate amount of such Borrowing, which
shall be $5,000,000 or a larger multiple of $1,000,000,
20
(iii) the duration of the Interest Period applicable
thereto, subject to the provisions of the definition of Interest
Period, and
(iv) whether the Money Market Quotes requested are to
set forth a Money Market Margin or a Money Market Absolute Rate.
The Borrower may request offers to make Money Market Loans for
more than one Interest Period in a single Money Market Quote Request. No Money
Market Quote Request shall be given within five Euro-Dollar Business Days (or
such other number of days as the Borrower and the Administrative Agent may
agree) of any other Money Market Quote Request.
(c) Invitation for Money Market Quotes. Promptly upon receipt of a
Money Market Quote Request, the Administrative Agent shall send to the Banks by
telex or facsimile transmission an Invitation for Money Market Quotes
substantially in the form of Exhibit C hereto, which shall constitute an
invitation by the Borrower to each Bank to submit Money Market Quotes offering
to make the Money Market Loans to which such Money Market Quote Request relates
in accordance with this Section.
(d) Submission and Contents of Money Market Quotes. (i) Each Bank may
submit a Money Market Quote containing an offer or offers to make Money Market
Loans in response to any Invitation for Money Market Quotes. Each Money Market
Quote must comply with the requirements of this subsection (d) and must be
submitted to the Administrative Agent by telex or facsimile transmission at its
offices specified in or pursuant to Section 9.1 not later than (x) 2:00 P.M.
(New York City time) on the fourth Euro-Dollar Business Day prior to the
proposed date of Borrowing, in the case of a LIBOR Auction or (y) 9:30 A.M. (New
York City time) on the proposed date of Borrowing, in the case of an Absolute
Rate Auction (or, in either case, such other time or date as the Borrower and
the Administrative Agent shall have mutually agreed and shall have notified to
the Banks not later than the date of the Money Market Quote Request for the
first LIBOR Auction or Absolute Rate Auction for which such change is to be
effective); provided that Money Market Quotes submitted by the Administrative
Agent (or any affiliate of the Administrative Agent) in the capacity of a Bank
may be submitted, and may only be submitted, if the Administrative Agent or such
affiliate notifies the Borrower of the terms of the offer or offers contained
therein not later than (x) one hour prior to the deadline for the other Banks,
in the case of a LIBOR Auction or (y) 15 minutes prior to the deadline for the
other Banks, in the case of an Absolute Rate Auction. Subject to Articles 3 and
6, any Money Market Quote so made shall be irrevocable except with the written
consent of the Administrative Agent given on the instructions of the Borrower.
21
(ii) Each Money Market Quote shall be in
substantially the form of Exhibit D hereto and shall in any case
specify:
(A) the proposed date of Borrowing,
(B) the principal amount of the Money Market
Loan for which each such offer is being made, which
principal amount (w) may be greater than or less than
the Commitment of the quoting Bank, (x) must be
$5,000,000 or a larger multiple of $1,000,000, (y)
may not exceed the principal amount of Money Market
Loans for which offers were requested and (z) may be
subject to an aggregate limitation as to the
principal amount of Money Market Loans for which
offers being made by such quoting Bank may be
accepted,
(C) in the case of a LIBOR Auction, the margin
above or below the applicable London Interbank
Offered Rate (the "Money Market Margin") offered for
each such Money Market Loan, expressed as a
percentage (specified to the nearest 1/10,000th of
1%) to be added to or subtracted from such base rate,
(D) in the case of an Absolute Rate Auction,
the rate of interest per annum (specified to the
nearest 1/10,000th of 1%) (the "Money Market Absolute
Rate") offered for each such Money Market Loan, and
(E) the identity of the quoting Bank.
A Money Market Quote may set forth up to five separate offers by
the quoting Bank with respect to each Interest Period specified in the related
Invitation for Money Market Quotes.
(iii) Any Money Market Quote shall be disregarded if
it:
(A) is not substantially in conformity with
Exhibit D hereto or does not specify all of the
information required by subsection (d)(ii);
(B) contains qualifying, conditional or
similar language;
22
(C) proposes terms other than or in addition
to those set forth in the applicable Invitation for
Money Market Quotes; or
(D) arrives after the time set forth in
subsection (d)(i).
(e) Notice to Borrower. The Administrative Agent shall promptly
notify the Borrower of the terms (x) of any Money Market Quote submitted by a
Bank that is in accordance with subsection (d) and (y) of any Money Market Quote
that amends, modifies or is otherwise inconsistent with a previous Money Market
Quote submitted by such Bank with respect to the same Money Market Quote
Request. Any such subsequent Money Market Quote shall be disregarded by the
Administrative Agent unless such subsequent Money Market Quote is submitted
solely to correct a manifest error in such former Money Market Quote. The
Administrative Agent's notice to the Borrower shall specify (A) the aggregate
principal amount of Money Market Loans for which offers have been received for
each Interest Period specified in the related Money Market Quote Request, (B)
the respective principal amounts and Money Market Margins or Money Market
Absolute Rates, as the case may be, so offered and (C) if applicable,
limitations on the aggregate principal amount of Money Market Loans for which
offers in any single Money Market Quote may be accepted.
(f) Acceptance and Notice by Borrower. Not later than 10:30 A.M.
(New York City time) on (x) the third Euro-Dollar Business Day prior to the
proposed date of Borrowing, in the case of a LIBOR Auction or (y) the proposed
date of Borrowing, in the case of an Absolute Rate Auction (or, in either case,
such other time or date as the Borrower and the Administrative Agent shall have
mutually agreed and shall have notified to the Banks not later than the date of
the Money Market Quote Request for the first LIBOR Auction or Absolute Rate
Auction for which such change is to be effective), the Borrower shall notify the
Administrative Agent of its acceptance or non-acceptance of the offers so
notified to it pursuant to subsection (e). In the case of acceptance, such
notice (a "Notice of Money Market Borrowing") shall specify the aggregate
principal amount of offers for each Interest Period that are accepted. The
Borrower may accept any Money Market Quote in whole or in part; provided that:
(i) the aggregate principal amount of each Money
Market Borrowing may not exceed the applicable amount set forth in
the related Money Market Quote Request,
(ii) the principal amount of each Money Market
Borrowing must be $5,000,000 or a larger multiple of $1,000,000,
(iii) acceptance of offers may only be made on the
basis of ascending Money Market Margins or Money Market Absolute
Rates, as the case may be, and
23
(iv) the Borrower may not accept any offer that is
described in subsection (d)(iii) or that otherwise fails to comply
with the requirements of this Agreement.
(g) Allocation by Administrative Agent. If offers are made by two or
more Banks with the same Money Market Margins or Money Market Absolute Rates, as
the case may be, for a greater aggregate principal amount than the amount in
respect of which such offers are accepted for the related Interest Period, the
principal amount of Money Market Loans in respect of which such offers are
accepted shall be allocated by the Administrative Agent among such Banks as
nearly as possible (in multiples of $1,000,000, as the Administrative Agent may
deem appropriate) in proportion to the aggregate principal amounts of such
offers. Determinations by the Administrative Agent of the amounts of Money
Market Loans shall be conclusive in the absence of manifest error.
Section 2.4. Notice to Banks; Funding of Loans. (a) Upon receipt
of a Notice of Borrowing, the Administrative Agent shall promptly notify each
Bank of the contents thereof and of such Bank's share (if any) of such Borrowing
and such Notice of Borrowing shall not thereafter be revocable by the Borrower.
(b) Not later than 12:00 Noon (New York City time) on the date of
each Borrowing, each Bank participating therein shall (except as provided in
subsection (c) of this Section) make available its share of such Borrowing, in
Federal or other funds immediately available in New York City, to the
Administrative Agent at its address referred to in Section 9.1. Unless the
Administrative Agent determines that any applicable condition specified in
Article 3 has not been satisfied, the Administrative Agent will make the funds
so received from the Banks available to the Borrower at the Administrative
Agent's aforesaid address.
(c) If any Bank makes a new Loan hereunder on a day on which the
Borrower is to repay all or any part of an outstanding Loan from such Bank, such
Bank shall apply the proceeds of its new Loan to make such repayment and only an
amount equal to the difference (if any) between the amount being borrowed and
the amount being repaid shall be made available by such Bank to the
Administrative Agent as provided in subsection (b) of this Section, or remitted
by the Borrower to the Administrative Agent as provided in Section 2.12, as the
case may be.
(d) Unless the Administrative Agent shall have received notice from a
Bank prior to the date of any Borrowing that such Bank will not make available
to the Administrative Agent such Bank's share of such Borrowing, the
Administrative Agent may assume that such Bank has made such share available to
the Administrative Agent on the date of such Borrowing in accordance with
subsections (b) and (c) of this Section 2.4 and the Administrative Agent may, in
reliance upon such assumption, make available to the Borrower on such date a
corresponding amount. If and to the extent that such Bank shall not have so made
such share available to the Administrative Agent, such Bank and the Borrower
severally agree to repay to the Administrative Agent forthwith on demand such
corresponding amount together with interest thereon, for each day from the date
such amount Administrative Agent, at (i) in the case of the
24
Borrower, a rate per annum equal to the higher of the Federal Funds Rate and the
interest rate applicable thereto pursuant to Section 2.7 and (ii) in the case of
such Bank, the Federal Funds Rate. If such Bank shall repay to the
Administrative Agent such corresponding amount, such amount so repaid shall
constitute such Bank's Loan included in such Borrowing for purposes of this
Agreement.
Section 2.5. Notes. (a) The Loans of each Bank shall be evidenced
by a single Note payable to the order of such Bank for the account of its
Applicable Lending Office in an amount equal to the aggregate unpaid principal
amount of such Bank's Loans.
(b) Each Bank may, by notice to the Borrower and the Administrative
Agent, request that its Loans of a particular type be evidenced by a separate
Note in an amount equal to the aggregate unpaid principal amount of such Loans.
Each such Note shall be in substantially the form of Exhibit A hereto with
appropriate modifications to reflect the fact that it evidences solely Loans of
the relevant type. Each reference in this Agreement to the "Note" of such Bank
shall be deemed to refer to and include any or all of such Notes, as the context
may require.
(c) Upon receipt of each Bank's Note pursuant to Section 3.1(b), the
Administrative Agent shall forward such Note to such Bank. Each Bank shall
record the date, amount, type and maturity of each Loan made by it and the date
and amount of each payment of principal made by the Borrower with respect
thereto, and may, if such Bank so elects in connection with any transfer or
enforcement of its Note, endorse on the schedule forming a part thereof
appropriate notations to evidence the foregoing information with respect to each
such Loan then outstanding; provided that the failure of any Bank to make any
such recordation or endorsement shall not affect the obligations of the Borrower
hereunder or under the Notes. Each Bank is hereby irrevocably authorized by the
Borrower so to endorse its Note and to attach to and make a part of its Note a
continuation of any such schedule as and when required.
Section 2.6. Maturity of Loans. Each Loan included in any
Borrowing shall mature, and the principal amount thereof shall be due and
payable, on the last day of the Interest Period applicable to such Borrowing.
Section 2.7. Interest Rates. (a) Each Base Rate Loan shall bear
interest on the outstanding principal amount thereof, for each day from the date
such Loan is made until it becomes due, at a rate per annum equal to the Base
Rate for such day. Such interest shall be payable for each Interest Period on
the last day thereof. Any overdue principal of or interest on any Base Rate Loan
shall bear interest, payable on demand, for each day until paid at a rate per
annum equal to the sum of 2% plus the rate otherwise applicable to Base Rate
Loans for such day.
(b) Each CD Loan shall bear interest on the outstanding principal
amount thereof, for each day during the Interest Period applicable thereto, at a
rate per annum equal to the sum of the CD Margin for such day plus the Adjusted
CD Rate applicable to such Interest Period; provided that if any CD Loan shall,
as a result of clause (2)(b) of the definition of Interest Period,
25
have an Interest Period of less than 30 days, such CD Loan shall bear interest
during such Interest Period at the rate applicable to Base Rate Loans during
such period. Such interest shall be payable for each Interest Period on the last
day thereof and, if such Interest Period is longer than 90 days, at intervals of
90 days after the first day thereof. Any overdue principal of or interest on any
CD Loan shall bear interest, payable on demand, for each day until paid at a
rate per annum equal to the sum of 2% plus the higher of (i) the sum of the CD
Margin for such day plus the Adjusted CD Rate applicable to the Interest Period
for such Loan and (ii) the rate applicable to Base Rate Loans for such day.
"CD Margin" means a rate per annum determined in accordance with
the Pricing Schedule.
The "Adjusted CD Rate" applicable to any Interest Period means a
rate per annum determined pursuant to the following formula:
[ CDBR ]*
ACDR = [ ---------- ] + AR
[ 1.00 - DRP ]
ACDR = Adjusted CD Rate
CDBR = CD Base Rate
DRP = Domestic Reserve Percentage
AR = Assessment Rate
----------
* The amount in brackets being rounded upward, if
necessary, to the next higher 1/100 of 1%
The "CD Base Rate" applicable to any Interest Period is the rate
of interest determined by the Administrative Agent to be the average (rounded
upward, if necessary, to the next higher 1/100 of 1%) of the prevailing rates
per annum bid at 10:00 A.M. (New York City time) (or as soon thereafter as
practicable) on the first day of such Interest Period by two or more New York
certificate of deposit dealers of recognized standing for the purchase at face
value from each CD Reference Bank of its certificates of deposit in an amount
comparable to the principal amount of the CD Loan of such CD Reference Bank to
which such Interest Period applies and having a maturity comparable to such
Interest Period.
"Domestic Reserve Percentage" means for any day that percentage
(expressed as a decimal) which is in effect on such day, as prescribed by the
Board of Governors of the Federal Reserve System (or any successor) for
determining the maximum reserve requirement (including without limitation any
basic, supplemental or emergency reserves) for a member bank of the Federal
Reserve System in New York City with deposits exceeding five billion dollars in
respect of new non-personal time deposits in dollars in New York City having a
maturity comparable to the related Interest Period and in an amount of $100,000
or more. The Adjusted CD Rate shall be adjusted automatically on and as of the
effective date of any change in the Domestic Reserve Percentage.
26
"Assessment Rate" means for any day the annual assessment rate in
effect on such day which is payable by a member of the Bank Insurance Fund
classified as adequately capitalized and within supervisory subgroup "A" (or a
comparable successor assessment risk classification) within the meaning of 12
C.F.R. Section 327.4(a) (or any successor provision) to the Federal Deposit
Insurance Corporation (or any successor) for such Corporation's (or such
successor's) insuring time deposits at offices of such institution in the United
States. The Adjusted CD Rate shall be adjusted automatically on and as of the
effective date of any change in the Assessment Rate.
(c) Each Euro-Dollar Loan shall bear interest on the outstanding
principal amount thereof, for each day during the Interest Period applicable
thereto, at a rate per annum equal to the sum of the Euro-Dollar Margin for such
day plus the London Interbank Offered Rate applicable to such Interest Period;
provided that each Euro-Dollar Loan made prior to the Syndication Date having an
Interest Period of one week shall bear interest on the outstanding principal
thereof, for each day during such Interest Period, at a rate per annum equal to
the sum of the Euro-Dollar Margin for such day plus the Interbank Offered Rate
applicable to such Interest Period. Such interest shall be payable for each
Interest Period on the last day thereof and, if such Interest Period is longer
than three months, at intervals of three months after the first day thereof.
"Euro-Dollar Margin" means a rate per annum determined in
accordance with the Pricing Schedule.
The "London Interbank Offered Rate" applicable to any Interest
Period means the average (rounded upward, if necessary, to the next higher 1/16
of 1%) of the respective rates per annum at which deposits in dollars are
offered to each of the Euro-Dollar Reference Banks in the London interbank
market at approximately 11:00 A.M. (London time) two Euro-Dollar Business Days
before the first day of such Interest Period in an amount approximately equal to
the principal amount of the Euro-Dollar Loan of such Euro-Dollar Reference Bank
to which such Interest Period is to apply and for a period of time comparable to
such Interest Period.
The "Interbank Offered Rate" applicable to any Interest Period
means the average (rounded upward, if necessary, to the next higher 1/16 of 1%)
of the respective rates per annum at which deposits in dollars are offered to
each of the Reference Banks in the New York interbank market at approximately
12:00 Noon (New York City time) on the first day of such Interest Period in an
amount approximately equal to the principal amount of the Euro-Dollar Loan of
such Reference Bank to which such Interest Period is to apply and for a period
of time comparable to such Interest Period.
(d) Any overdue principal of or interest on any Euro-Dollar Loan
shall bear interest, payable on demand, for each day until paid at a rate per
annum equal to the higher of (i) the sum of 2% plus the Euro-Dollar Margin for
such day plus the London Interbank Offered Rate applicable to the Interest
Period for such Loan and (ii) the sum of 2% plus the Euro-Dollar Margin for such
day plus the quotient obtained (rounded upward, if necessary, to the next higher
1/100 of 1%) by dividing (x) the average (rounded upward, if necessary, to the
next higher 1/16 of 1%) of the respective rates per annum at which one
27
day (or, if such amount due remains unpaid more than three Euro-Dollar Business
Days, then for such other period of time not longer than six months as the
Administrative Agent may select) deposits in dollars in an amount approximately
equal to such overdue payment due to each of the Euro-Dollar Reference Banks are
offered to such Euro-Dollar Reference Bank in the London interbank market for
the applicable period determined as provided above by (y) 1.00 minus the
Euro-Dollar Reserve Percentage (or, if the circumstances described in clause (a)
or (b) of Section 8.1 shall exist, at a rate per annum equal to the sum of 2%
plus the rate applicable to Base Rate Loans for such day).
(e) Subject to Section 8.1(a), each Money Market LIBOR Loan shall
bear interest on the outstanding principal amount thereof, for the Interest
Period applicable thereto, at a rate per annum equal to the sum of the London
Interbank Offered Rate for such Interest Period (determined in accordance with
Section 2.7(c) as if the related Money Market LIBOR Borrowing were a Committed
Euro-Dollar Borrowing) plus (or minus) the Money Market Margin quoted by the
Bank making such Loan in accordance with Section 2.3. Each Money Market Absolute
Rate Loan shall bear interest on the outstanding principal amount thereof, for
the Interest Period applicable thereto, at a rate per annum equal to the Money
Market Absolute Rate quoted by the Bank making such Loan in accordance with
Section 2.3. Such interest shall be payable for each Interest Period on the last
day thereof and, if such Interest Period is longer than three months, at
intervals of three months after the first day thereof. Any overdue principal of
or interest on any Money Market Loan shall bear interest, payable on demand, for
each day until paid at a rate per annum equal to the sum of 2% plus the Base
Rate for such day.
(f) The Administrative Agent shall determine each interest rate
applicable to the Loans hereunder. The Administrative Agent shall give prompt
notice to the Borrower and the participating Banks of each rate of interest so
determined, and its determination thereof shall be conclusive in the absence of
manifest error.
(g) Each Reference Bank agrees to use its best efforts to furnish
quotations to the Administrative Agent as contemplated by this Section. If any
Reference Bank does not furnish a timely quotation, the Administrative Agent
shall determine the relevant interest rate on the basis of the quotation or
quotations furnished by the remaining Reference Bank or Banks or, if none of
such quotations is available on a timely basis, the provisions of Section 8.1
shall apply.
Section 2.8. Fees. (a) The Borrower shall pay to the
Administrative Agent for the account of the Banks ratably a facility fee at the
Facility Fee Rate (determined daily in accordance with the Pricing Schedule).
Such facility fee shall accrue (i) from and including the Effective Date to but
excluding the Termination Date (or earlier date of termination of the
Commitments in their entirety), on the daily aggregate amount of the Commitments
(whether used or unused) and (ii) from and including the Termination Date or
such earlier date of termination to but excluding the date the Loans and the
Letter of Credit Liabilities shall be repaid in their entirety, on the sum of
the daily aggregate outstanding principal amount of the Loans and the daily
aggregate Letter of Credit Liabilities.
28
(b) The Borrower shall pay to the Administrative Agent (i) for the
account of the Banks ratably a Letter of Credit fee accruing daily on the
aggregate amount then available for drawing under all Letters of Credit at the
LC Fee Rate and (ii) for the account of each Issuing Bank a Letter of Credit
fronting fee accruing daily on the aggregate amount then available for drawing
under all Letters of Credit issued by such Issuing Bank at a rate per annum as
determined from time to time by the Borrower and such Issuing Bank.
(c) Accrued fees under this Section shall be payable quarterly in
arrears on each March 31, June 30, September 30 and December 31 and upon the
date of termination of the Commitments in their entirety (and, if later, the
date the Loans and Letter of Credit Liabilities shall be repaid in their
entirety).
Section 2.9. Optional Termination or Reduction of Commitments.
During the Revolving Credit Period, the Borrower may, upon at least three
Domestic Business Days' notice to the Administrative Agent, (i) terminate the
Commitments at any time, if no Loans or Letter of Credit Liabilities are
outstanding at such time or (ii) ratably reduce from time to time by an
aggregate amount of $10,000,000 or any larger multiple of $1,000,000, the
aggregate amount of the Commitments in excess of the sum of the aggregate
outstanding principal amount of the Loans and the aggregate Letter of Credit
Liabilities. Promptly after receiving a notice pursuant to this subsection, the
Administrative Agent shall notify each Bank of the contents thereof.
Section 2.10. Scheduled Termination of Commitments. The
Commitments shall terminate on the Termination Date, and any Loans then
outstanding (together with accrued interest thereon) shall be due and payable on
such date.
Section 2.11. Optional Prepayments. (a) The Borrower may, upon at
least one Domestic Business Day's notice by 11:00 A.M. (New York City time) to
the Administrative Agent, prepay any Base Rate Borrowing (or any Money Market
Borrowing bearing interest at the Base Rate pursuant to Section 8.1(a)) in whole
at any time, or from time to time in part in amounts aggregating $5,000,000 or
any larger multiple of $1,000,000, by paying the principal amount to be prepaid
together with accrued interest thereon to the date of prepayment. Each such
optional prepayment shall be applied to prepay ratably the Base Rate Loans of
the several Banks included in such Borrowing.
(b) Subject to Section 2.13, the Borrower may, upon at least three
Domestic Business Days' notice to the Administrative Agent, prepay any CD
Borrowing or upon at least three Euro-Dollar Business Days' notice to the
Administrative Agent prepay any Euro-Dollar Borrowing, in each case in whole at
any time, or from time to time in part in amounts aggregating $5,000,000 or any
larger multiple of $1,000,000, by paying the principal amount to be prepaid
together with accrued interest thereon to the date of prepayment. Each such
optional prepayment shall be applied to prepay ratably the Loans of the several
Banks included in such Borrowing.
29
(c) Except as provided in Section 2.11(a), the Borrower may not
prepay all or any portion of the principal amount of any Money Market Loan prior
to the maturity thereof.
(d) Upon receipt of a notice of prepayment pursuant to this Section,
the Administrative Agent shall promptly notify each Bank of the contents thereof
and of such Bank's ratable share (if any) of such prepayment and such notice
shall not thereafter be revocable by the Borrower.
Section 2.12. General Provisions as to Payments. (a) The Borrower
shall make each payment of principal of, and interest on, the Loans, of Letter
of Credit Liabilities and of fees hereunder, without any set-off or
counterclaim, not later than 12:00 Noon (New York City time) on the date when
due, in Federal or other funds immediately available in New York City, to the
Administrative Agent at its address referred to in Section 9.1. The
Administrative Agent will promptly distribute to each Bank its ratable share of
each such payment received by the Administrative Agent for the account of the
Banks. Whenever any payment of principal of, or interest on, the Domestic Loans,
of Letter of Credit Liabilities or of fees shall be due on a day which is not a
Domestic Business Day, the date for payment thereof shall be extended to the
next succeeding Domestic Business Day. Whenever any payment of principal of, or
interest on, the Euro-Dollar Loans shall be due on a day which is not a
Euro-Dollar Business Day, the date for payment thereof shall be extended to the
next succeeding Euro-Dollar Business Day unless such Euro-Dollar Business Day
falls in another calendar month, in which case the date for payment thereof
shall be the next preceding Euro-Dollar Business Day. Whenever any payment of
principal of, or interest on, the Money Market Loans shall be due on a day which
is not a Euro-Dollar Business Day, the date for payment thereof shall be
extended to the next succeeding Euro-Dollar Business Day. If the date for any
payment of principal is extended by operation of law or otherwise, interest
thereon shall be payable for such extended time.
(b) Unless the Administrative Agent shall have received notice from
the Borrower prior to the date on which any payment is due to the Banks
hereunder that the Borrower will not make such payment in full, the
Administrative Agent may assume that the Borrower has made such payment in full
to the Administrative Agent on such date and the Administrative Agent may, in
reliance upon such assumption, cause to be distributed to each Bank on such due
date an amount equal to the amount then due such Bank. If and to the extent that
the Borrower shall not have so made such payment, each Bank shall repay to the
Administrative Agent forthwith on demand such amount distributed to such Bank
together with interest thereon, for each day from the date such amount is
distributed to such Bank until the date such Bank repays such amount to the
Administrative Agent, at the Federal Funds Rate.
Section 2.13. Funding Losses. If the Borrower makes any payment
of principal with respect to any Fixed Rate Loan (pursuant to Article 2, 6 or 8
or otherwise) on any day other than the last day of the Interest Period
applicable thereto, or the last day of an applicable period fixed pursuant to
Section 2.7(d), or if the Borrower fails to borrow or prepay any Fixed Rate
Loans after notice has been given to any Bank in accordance with Section 2.4(a)
or 2.11(d), the Borrower shall reimburse each Bank within 15 days after demand
for any resulting loss or expense incurred by it (or by an
30
existing or prospective Participant in the related Loan), including (without
limitation) any loss incurred in obtaining, liquidating or employing deposits
from third parties, but excluding loss of margin for the period after any such
payment or failure to borrow or prepay, provided that such Bank shall have
delivered to the Borrower a certificate setting forth in reasonable detail the
amount of such loss or expense, which certificate shall be conclusive in the
absence of manifest error.
Section 2.14. Computation of Interest and Fees. Interest based on
the Prime Rate hereunder 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 and
fees 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 2.15. Regulation D Compensation. For so long as any Bank
maintains reserves against "Eurocurrency liabilities" (or any other category of
liabilities which includes deposits by reference to which the interest rate on
Euro-Dollar Loans is determined or any category of extensions of credit or other
assets which includes loans by a non-United States office of such Bank to United
States residents), and as a result the cost to such Bank (or its Euro-Dollar
Lending Office) of making or maintaining its Euro-Dollar Loans is increased,
then such Bank may require the Borrower to pay, contemporaneously with each
payment of interest on the Euro-Dollar Loans, additional interest on the related
Euro-Dollar Loan of such Bank at a rate per annum up to but not exceeding the
excess of (i) (A) the applicable London Interbank Offered Rate divided by (B)
one minus the Euro-Dollar Reserve Percentage over (ii) the applicable London
Interbank Offered Rate. Any Bank wishing to require payment of such additional
interest (x) shall so notify the Borrower and the Administrative Agent, in which
case such additional interest on the Euro-Dollar Loans of such Bank shall be
payable to such Bank at the place indicated in such notice with respect to each
Interest Period commencing at least three Euro-Dollar Business Days after the
giving of such notice and (y) shall furnish to the Borrower at least five
Euro-Dollar Business Days prior to each date on which interest is payable on the
Euro-Dollar Loans an officer's certificate setting forth the amount to which
such Bank is then entitled under this Section (which shall be consistent with
such Bank's good faith estimate of the level at which the related reserves are
maintained by it). Each such certificate shall be accompanied by such
information as the Borrower may reasonably request as to the computation set
forth therein.
Section 2.16. Letters of Credit. (a) Subject to the terms and
conditions hereof, each Issuing Bank agrees to issue Letters of Credit hereunder
from time to time before the tenth day before the Termination Date upon the
request of the Borrower; provided that, immediately after each Letter of Credit
is issued, (i) the aggregate amount of the Letter of Credit Liabilities shall
not exceed the Letter of Credit Commitment and (ii) the aggregate amount of the
Letter of Credit Liabilities plus the aggregate outstanding amount of all Loans
shall not exceed the aggregate amount of the Commitments. Upon the date of
issuance by an Issuing Bank of a Letter of Credit, the Issuing Bank shall be
deemed, without further action by any party hereto, to have sold to each Bank,
and each Bank shall be deemed, without
31
further action by any party hereto, to have purchased from the Issuing Bank, a
participation in such Letter of Credit and the related Letter of Credit
Liabilities in the proportion their respective Commitments bear to the aggregate
Commitments. Each Letter of Credit shall have a stated amount not less than
$5,000,000.
(b) The Borrower shall give the Issuing Bank notice at least five
Domestic Business Days prior to the requested issuance of a Letter of Credit
specifying the date such Letter of Credit is to be issued, and describing the
terms of such Letter of Credit and the nature of the transactions to be
supported thereby (such notice, including any such notice given in connection
with the extension of a Letter of Credit, a "Notice of Issuance"). Upon receipt
of a Notice of Issuance, the Issuing Bank shall promptly notify the
Administrative Agent, and the Administrative Agent shall promptly notify each
Bank of the contents thereof and of the amount of such Bank's participation in
such Letter of Credit. The issuance by the Issuing Bank of each Letter of Credit
shall, in addition to the conditions precedent set forth in Article 3, be
subject to the conditions precedent that such Letter of Credit shall be in such
form and contain such terms as shall be reasonably satisfactory to the Issuing
Bank and that the Borrower shall have executed and delivered such other
instruments and agreements relating to such Letter of Credit as the Issuing Bank
shall have reasonably requested. The Borrower shall also pay to the Issuing Bank
for its own account issuance, drawing, amendment and extension charges in the
amounts and at the times agreed between the Borrower and the Issuing Bank. The
extension or renewal of any Letter of Credit shall be deemed to be an issuance
of such Letter of Credit, and if any Letter of Credit contains a provision
pursuant to which it is deemed to be extended unless notice of termination is
given by the Issuing Bank, the Issuing Bank shall timely give such notice of
termination unless it has theretofore timely received a Notice of Issuance and
the other conditions to issuance of a Letter of Credit have also theretofore
been met with respect to such extension. No Letter of Credit shall have a term
extending or be so extendible beyond the fifth Domestic Business Day preceding
the Termination Date.
(c) Upon receipt from the beneficiary of any Letter of Credit of any
notice of a drawing under such Letter of Credit, the Issuing Bank shall notify
the Administrative Agent and the Administrative Agent shall promptly notify the
Borrower and each other Bank as to the amount to be paid as a result of such
demand or drawing and the payment date. The Borrower shall be irrevocably and
unconditionally obligated forthwith to reimburse the Issuing Bank for any
amounts paid by the Issuing Bank upon any drawing under any Letter of Credit,
without presentment, demand, protest or other formalities of any kind. All such
amounts paid by the Issuing Bank and remaining unpaid by the Borrower shall bear
interest, payable on demand, for each day until paid at a rate per annum equal
to the sum of 2% plus the rate applicable to Base Rate Loans for such day. In
addition, each Bank will pay to the Administrative Agent, for the account of the
Issuing Bank, immediately upon the Issuing Bank's demand at any time during the
period commencing after such drawing until reimbursement therefor in full by the
Borrower, an amount equal to such Bank's ratable share of such drawing (in
proportion to its participation therein), together with interest on such amount
for each day from the date of the Issuing Bank's demand for such payment (or, if
such demand is made after 12:00 Noon (New York City time) on such date, from the
next succeeding
32
Domestic Business Day) to the date of payment by such Bank of such amount at a
rate of interest per annum equal to the Federal Funds Rate. The Issuing Bank
will pay to each Bank ratably all amounts received from the Borrower for
application in payment of its reimbursement obligations in respect of any Letter
of Credit, but only to the extent such Bank has made payment to the Issuing Bank
in respect of such Letter of Credit pursuant hereto.
(d) The obligations of the Borrower and each Bank under subsection
(c) above shall be absolute, unconditional and irrevocable, and shall be
performed strictly in accordance with the terms of this Agreement, under all
circumstances whatsoever, including without limitation the following
circumstances:
(i) any lack of validity or enforceability of this
Agreement or any Letter of Credit or any document related hereto or
thereto;
(ii) any amendment, waiver of or any consent to
departure from all or any of the provisions of this Agreement, any
Letter of Credit or any document related hereto or thereto;
(iii) the use which may be made of the Letter of
Credit by, or any act or omission of, a beneficiary of a Letter of
Credit (or any Person for whom the beneficiary may be acting);
(iv) the existence of any claim, set-off, defense or
other rights that the Borrower may have at any time against a
beneficiary of a Letter of Credit (or any Person for whom the
beneficiary may be acting), the Banks (including the Issuing Bank) or
any other Person, whether in connection with this Agreement or the
Letter of Credit or any document related hereto or thereto or any
unrelated transaction;
(v) any statement or any other document presented
under a Letter of Credit proving to be forged, fraudulent or invalid
in any respect or any statement therein being untrue or inaccurate in
any respect whatsoever;
(vi) payment under a Letter of Credit to the
beneficiary of such Letter of Credit against presentation to the
Issuing Bank of a draft or certificate that does not comply with the
terms of the Letter of Credit; or
(vii) any other act or omission to act or delay of any
kind by any Bank (including the Issuing Bank), the Administrative
Agent or any other Person or any other event or circumstance
whatsoever that might, but for the provisions of this subsection
(vii), constitute a legal or equitable discharge of the Borrower's or
the Bank's obligations hereunder.
33
(e) The Borrower hereby indemnifies and holds harmless each Bank
(including each Issuing Bank) and the Administrative Agent from and against any
and all claims, damages, losses, liabilities, costs or expenses which such Bank
or the Administrative Agent may incur (including, without limitation, any
claims, damages, losses, liabilities, costs or expenses which the Issuing Bank
may incur by reason of or in connection with the failure of any other Bank to
fulfill or comply with its obligations to such Issuing Bank hereunder (but
nothing herein contained shall affect any rights the Borrower may have against
such defaulting Bank)), and none of the Banks (including an Issuing Bank) nor
the Administrative Agent nor any of their officers or directors or employees or
agents shall be liable or responsible, by reason of or in connection with the
execution and delivery or transfer of or payment or failure to pay under any
Letter of Credit, including without limitation any of the circumstances
enumerated in subsection (d) above, as well as (i) any error, omission,
interruption or delay in transmission or delivery of any messages, by mail,
cable, telegraph, telex or otherwise, (ii) any error in interpretation of
technical terms, (iii) any loss or delay in the transmission of any document
required in order to make a drawing under a Letter of Credit, (iv) any
consequences arising from causes beyond the control of an Issuing Bank,
including without limitation any government acts, or any other circumstances
whatsoever in making or failing to make payment under such Letter of Credit;
provided that the Borrower shall not be required to indemnify any Issuing Bank
for any claims, damages, losses, liabilities, costs or expenses, and the
Borrower shall have a claim for direct (but not consequential) damage suffered
by it, to the extent found by a court of competent jurisdiction to have been
caused by (x) the gross negligence or willful misconduct of such Issuing Bank in
determining whether a request presented under any Letter of Credit complied with
the terms of such Letter of Credit or (y) such Issuing Bank's failure to pay
under any Letter of Credit after the presentation to it of a request strictly
complying with the terms and conditions of such Letter of Credit. Nothing in
this subsection (e) is intended to limit the obligations of the Borrower under
Section 2.16(c) of this Agreement. To the extent the Borrower is obligated to
but does not indemnify an Issuing Bank as required by this subsection, the Banks
agree to do so ratably in accordance with their Commitments.
ARTICLE 3
Conditions
Section 3.1. Effectiveness. This Agreement shall become effective
upon (x) termination of the Commitments (as defined in the Existing Credit
Agreement referred to below in this clause (x)) under the Existing Credit
Agreement dated as of March 7, 1997 among the Borrower, the banks listed therein
and ▇▇▇▇▇▇ Guaranty Trust Company of New York, as agent, and payment in full of
all amounts owing thereunder to any of such banks or such agent and (y) receipt
by the Administrative Agent of the following documents, each dated the Effective
Date unless otherwise indicated:
(a) counterparts hereof signed by each of the parties hereto (or, in
the case of any party as to which an executed counterpart shall not have been
received, receipt by the Administrative Agent in form satisfactory to it of
telegraphic, telex, facsimile or other written confirmation from such party of
execution of a counterpart hereof by such party);
34
(b) a duly executed Note for the account of each Bank dated on or
before the Effective Date complying with the provisions of Section 2.5;
(c) opinions of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, special counsel for the
Borrower, Polsinelli, White, ▇▇▇▇▇▇▇▇ & Shalton, Kansas counsel for the
Borrower, and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, General Counsel of the Borrower, substantially
in the respective forms of Exhibits E-1, E-2 and E-3 hereto and covering such
additional matters relating to the transactions contemplated hereby as the
Required Banks may reasonably request;
(d) an opinion of ▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇, special counsel for the
Administrative Agent, substantially in the form of Exhibit F hereto and covering
such additional matters relating to the transactions contemplated hereby as the
Required Banks may reasonably request; and
(e) all documents the Administrative Agent may reasonably request
relating to the existence of the Borrower, the corporate authority for and the
validity of this Agreement and the Notes, and any other matters relevant hereto,
all in form and substance satisfactory to the Administrative Agent.
The Administrative Agent shall promptly notify the Borrower and each Bank of the
effectiveness of this Agreement, and such notice shall be conclusive and binding
on all parties hereto.
Section 3.2. Borrowings and Issuances of Letters of Credit. The
obligation of any Bank to make a Loan on the occasion of any Borrowing and the
obligation of an Issuing Bank to issue (or renew or extend the term of) any
Letter of Credit is subject to the satisfaction of the following conditions:
(a) the fact that the Closing Date shall have occurred on or prior to
March 31, 1998;
(b) in the case of the first Credit Event, the fact that prior to or
substantially simultaneously with such Credit Event, the Borrower shall have
consummated the Acquisition in accordance with the Stock Purchase Agreement
without waiver of any material condition specified therein;
(c) in the case of the first Borrowing, the fact that the Borrower
shall have paid or shall concurrently pay all fees then due and payable to the
Administrative Agent for the account of any Agent or Bank, as previously agreed;
(d) receipt by the Administrative Agent of a Notice of Borrowing as
required by Section 2.2 or 2.3, as the case may be;
(e) the fact that, immediately after such Credit Event, the sum of
the aggregate outstanding principal amount of the Loans and the aggregate amount
of Letter of Credit Liabilities will not exceed the aggregate amount of the
Commitments;
(f) the fact that, immediately before and after such Credit Event, no
Default shall have occurred and be continuing;
35
(g) the fact that the representations and warranties of the Borrower
contained in this Agreement (except, (i) in the case of Credit Events subsequent
to the first Credit Event, the representation and warranty set forth in Section
4.12 and (ii) in the case of a Refunding Borrowing, the representations and
warranties set forth in Sections 4.4(c), 4.5 and 4.7 as to any matter which has
theretofore been disclosed in writing by the Borrower to the Banks) shall be
true on and as of the date of such Credit Event; and
(h) in the case of an issuance of a Letter of Credit, the fact that,
immediately after such issuance of a Letter of Credit, the aggregate amount of
the Letter of Credit Liabilities shall not exceed the Letter of Credit
Commitment.
Each Credit Event hereunder shall be deemed to be a representation and warranty
by the Borrower on the date of such Credit Event as to the facts specified in
clauses (b) and (c) (in the case of the first Credit Event) and (e), (f), (g)
and (h) of this Section.
ARTICLE 4
Representations and Warranties
The Borrower represents and warrants that:
Section 4.1. Corporate Existence and Power. The Borrower is a
corporation duly incorporated, validly existing and in good standing under the
laws of Kansas, and has all corporate powers and all material governmental
licenses, authorizations, consents and approvals required to carry on its
business as now conducted.
Section 4.2. Corporate and Governmental Authorization; No
Contravention. The execution, delivery and performance by the Borrower of this
Agreement and the Notes are within the Borrower's corporate powers, have been
duly authorized by all necessary corporate action, require no action by or in
respect of, or filing with, any governmental body, agency or official (other
than filings of this Agreement and the Notes with the Securities and Exchange
Commission pursuant to the reporting requirements of the Securities Exchange Act
of 1934) and do not contravene, or constitute a default under, any provision of
applicable law or regulation or of the articles of incorporation or by-laws of
the Borrower or of any agreement, judgment, injunction, order, decree or other
instrument binding upon the Borrower or any of its Subsidiaries or result in the
creation or imposition of any Lien on any asset of the Borrower or any of its
Subsidiaries.
Section 4.3. Binding Effect. This Agreement constitutes a valid
and binding agreement of the Borrower and each Note, when executed and delivered
in accordance with this Agreement, will constitute a valid and binding
obligation of the Borrower, in each case enforceable in accordance with its
terms.
36
Section 4.4. Financial Information. (a) The consolidated balance
sheet of the Borrower and its Consolidated Subsidiaries as of December 31, 1996
and the related consolidated statements of income, cash flows and common
stockholders' equity for the fiscal year then ended, reported on by ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ LLP and set forth in the Borrower's 1996 Form 10-K, a copy of which has
been delivered to each of the Banks, fairly present, in conformity with
generally accepted accounting principles, the consolidated financial position of
the Borrower and its Consolidated Subsidiaries as of such date and their
consolidated results of operations and cash flows for such fiscal year.
(b) The unaudited consolidated balance sheet of the Borrower and its
Consolidated Subsidiaries as of September 30, 1997 and the related unaudited
consolidated statements of income and cash flows for the nine months then ended,
set forth in the Borrower's Latest Form 10-Q, a copy of which has been delivered
to each of the Banks, fairly present, in conformity with generally accepted
accounting principles applied on a basis consistent with the financial
statements referred to in subsection (a) of this Section, the consolidated
financial position of the Borrower and its Consolidated Subsidiaries as of such
date and their consolidated results of operations and cash flows for such
nine-month period (subject to normal year-end adjustments).
(c) Since September 30, 1997 there has been no material adverse
change in the business, financial position, results of operations or prospects
of the Borrower and its Consolidated Subsidiaries, considered as a whole.
Section 4.5. Litigation. Except as disclosed in the most recent
Annual Report on Form 10-K delivered by the Borrower to the Banks, there is no
action, suit or proceeding pending against, or to the knowledge of the Borrower
threatened against or affecting, the Borrower or any of its Subsidiaries before
any court or arbitrator or any governmental body, agency or official in which
there is a reasonable possibility of an adverse decision which would materially
adversely affect the business, consolidated financial position or consolidated
results of operations of the Borrower and its Consolidated Subsidiaries,
considered as a whole, or which in any manner draws into question the validity
of this Agreement or the Notes.
Section 4.6. Compliance with ERISA. Each member of the ERISA
Group has fulfilled its obligations under the minimum funding standards of ERISA
and the Internal Revenue Code with respect to each Plan and is in compliance in
all material respects with the presently applicable provisions of ERISA and the
Internal Revenue Code with respect to each Plan. No member of the ERISA Group
has (i) sought a waiver of the minimum funding standard under Section 412 of the
Internal Revenue Code in respect of any Plan, (ii) failed to make any
contribution or payment to any Plan or Multiemployer Plan or in respect of any
Benefit Arrangement, or made any amendment to any Plan or Benefit Arrangement,
which has resulted or could result in the imposition of a Lien or the posting of
a bond or other security under ERISA or the Internal Revenue Code or (iii)
incurred any liability under Title IV of ERISA other than a liability to the
PBGC for premiums under Section 4007 of ERISA, which waiver, failure or
liability could reasonably be expected to materially adversely affect the
business, consolidated financial position or consolidated results of operations
of the Borrower and its Consolidated Subsidiaries, considered as a whole.
37
Section 4.7. Environmental Matters. In the ordinary course of its
business, the Borrower conducts an ongoing review of the effect of Environmental
Laws on the business, operations and properties of the Borrower and its
Subsidiaries, in the course of which it identifies and evaluates associated
liabilities and costs (including, without limitation, any capital or operating
expenditures required for clean-up or closure of properties presently or
previously owned, any capital or operating expenditures required to achieve or
maintain compliance with environmental protection standards imposed by law or as
a condition of any license, permit or contract, any related constraints on
operating activities, including any periodic or permanent shutdown of any
facility or reduction in the level of or change in the nature of operations
conducted thereat, any costs or liabilities in connection with off-site disposal
of wastes or Hazardous Substances, and any actual or potential liabilities to
third parties, including employees, and any related costs and expenses). On the
basis of this review, the Borrower has reasonably concluded that such associated
liabilities and costs, including the costs of compliance with Environmental
Laws, are unlikely to have a material adverse effect on the business, financial
condition, results of operations or prospects of the Borrower and its
Consolidated Subsidiaries, considered as a whole.
Section 4.8. Taxes. The Borrower and its Subsidiaries have filed
all United States Federal income tax returns and all other material tax returns
which are required to be filed by them and have paid all taxes shown to be due
on such returns or pursuant to any assessment received by the Borrower or any
Subsidiary to the extent that such taxes have become due and before they have
become delinquent, except such taxes as are being contested in good faith by
appropriate proceedings for which adequate reserves have been established in
accordance with generally accepted accounting principles.
Section 4.9. Subsidiaries. Each of the Borrower's corporate
Material Subsidiaries is a corporation duly incorporated, validly existing and
in good standing under the laws of its jurisdiction of incorporation, and has
all corporate powers and all material governmental licenses, authorizations,
consents and approvals required to carry on its business as now conducted.
Section 4.10. Not an Investment Company. The Borrower is not
an "investment company" or controlled by an "investment company" within the
meaning of the Investment Company Act of 1940, as amended.
Section 4.11. Full Disclosure. All information heretofore
furnished by the Borrower to any Agent or any Bank for purposes of or in
connection with this Agreement or any transaction contemplated hereby is, and
all such information hereafter furnished by the Borrower to any Agent or any
Bank will be, true and accurate in all material respects on the date as of which
such information is stated or certified. The Borrower has disclosed to the Banks
in writing any and all facts peculiar to the business of the Company or any of
its Subsidiaries which materially and adversely affect or may affect (to the
extent the Borrower can now reasonably foresee), the business, operations or
financial condition of the Borrower and its Consolidated Subsidiaries, taken as
a whole, or the ability of the Borrower to perform its obligations under this
Agreement.
38
Section 4.12. MidCon Acquisition. The representations and
warranties of all parties contained in the Stock Purchase Agreement will be true
and correct on and as of the date of the first Borrowing under this Agreement
except to the extent that the failure of the same to be true and correct could
not reasonably be expected to materially adversely affect the business,
consolidated financial position or consolidated results of operations of the
Borrower and its Consolidated Subsidiaries, considered as a whole.
ARTICLE 5
Covenants
The Borrower agrees that, so long as any Bank has any Commitment
hereunder or any Letter of Credit Liability or any amount payable under any Note
remains unpaid:
Section 5.1. Information. The Borrower will deliver to each
of the Banks:
(a) as soon as available and in any event within 90 days after the
end of each fiscal year of the Borrower, a consolidated balance sheet of the
Borrower and its Consolidated Subsidiaries as of the end of such fiscal year and
the related consolidated statements of income, cash flows and common
stockholder's equity for such fiscal year, setting forth in each case in
comparative form the figures for the previous fiscal year, all audited by ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ LLP or other independent public accountants of nationally recognized
standing; provided, however, that delivery pursuant to clause (g) below of
copies of the Annual Report on Form 10-K (without exhibits) of the Borrower for
such fiscal year filed with the Securities and Exchange Commission shall be
deemed to satisfy the requirements of this clause (a);
(b) as soon as available and in any event within 45 days after the
end of each of the first three quarters of each fiscal year of the Borrower, a
consolidated balance sheet of the Borrower and its Consolidated Subsidiaries as
of the end of such quarter and the related consolidated statements of income and
cash flows for such quarter (in the case of such statements of income) and for
the portion of the Borrower's fiscal year ended at the end of such quarter,
setting forth in the case of such income and cash flows in comparative form the
figures for the corresponding quarter (in the case of such statements of income)
and the corresponding portion of the Borrower's previous fiscal year, all
certified (subject to normal year-end adjustments) as to fairness of
presentation, generally accepted accounting principles and consistency by an
authorized financial or accounting officer of the Borrower; provided, however,
that delivery pursuant to clause (g) below of copies of the Quarterly Report on
Form 10-Q (without exhibits) of the Borrower for such quarter filed with the
Securities and Exchange Commission shall be deemed to satisfy the requirements
of this clause (b);
(c) simultaneously with the delivery of each set of financial
statements referred to in clauses (a) and (b) above, a certificate of an
authorized financial or accounting officer of the Borrower (i) setting forth in
reasonable detail the calculations required to establish whether the Borrower
39
was in compliance with the requirements of Section 5.7 and, if applicable,
Sections 5.08 and 5.09 on the date of such financial statements and (ii) stating
whether any Default exists on the date of such certificate and, if any Default
then exists, setting forth the details thereof and the action which the Borrower
is taking or proposes to take with respect thereto;
(d) simultaneously with the delivery of each set of financial
statements referred to in clause (a) above, a statement of the firm of
independent public accountants which reported on such statements (i) whether
anything has come to their attention to cause them to believe that any Default
existed on the date of such statements and (ii) confirming the calculations set
forth in the officer's certificate delivered simultaneously therewith pursuant
to clause (c) above; provided, however, that such accountants shall not be
liable to anyone by reason of their failure to obtain knowledge of any Default
which would not be disclosed in the course of an audit conducted in accordance
with generally accepted auditing standards;
(e) within five Domestic Business Days after any officer of the
Borrower obtains knowledge of any Default, if such Default is then continuing, a
certificate of the chief financial officer or the chief accounting officer of
the Borrower setting forth the details thereof and the action which the Borrower
is taking or proposes to take with respect thereto;
(f) promptly upon the mailing thereof to the public shareholders of
the Borrower generally, copies of all financial statements, reports and proxy
statements so mailed;
(g) promptly upon the filing thereof, copies of all registration
statements (other than the exhibits thereto and any registration statements on
Form S-8 or its equivalent) and reports on Forms 10-K, 10-Q and 8-K (or their
equivalents, in each case without exhibits) which the Borrower shall have filed
with the Securities and Exchange Commission;
(h) if and when any member of the ERISA Group (i) gives or is
required to give notice to the PBGC of any "reportable event" (as defined in
Section 4043 of ERISA) (other than such event as to which the 30-day notice
requirement is waived or which is triggered by the Acquisition) with respect to
any Plan which might constitute grounds for a termination of such Plan under
Title IV of ERISA, or knows that the plan administrator of any Plan has given or
is required to give notice of any such reportable event, a copy of the notice of
such reportable event given or required to be given to the PBGC; (ii) receives
notice of complete or partial withdrawal liability under Title IV of ERISA or
notice that any Multiemployer Plan is in reorganization, is insolvent or has
been terminated, a copy of such notice; (iii) receives notice from the PBGC
under Title IV of ERISA of an intent to terminate, impose liability (other than
for premiums under Section 4007 of ERISA) in respect of, or appoint a trustee to
administer any Plan, a copy of such notice; (iv) applies for a waiver of the
minimum funding standard under Section 412 of the Internal Revenue Code, a copy
of such application; (v) gives notice of intent to terminate any Plan under
Section 4041(c) of ERISA, a copy of such notice and other information filed with
the PBGC; (vi) gives notice of withdrawal from any Plan pursuant to Section 4063
of ERISA, a copy of such notice; or (vii) fails to make any payment or
contribution to any Plan or Multiemployer Plan
40
or in respect of any Benefit Arrangement or makes any amendment to any Plan or
Benefit Arrangement which has resulted or could result in the imposition of a
Lien or the posting of a bond or other security, a certificate of the chief
financial officer or the chief accounting officer of the Borrower setting forth
details as to such occurrence and action, if any, which the Borrower or
applicable member of the ERISA Group is required or proposes to take; and
(i) from time to time such additional information regarding the
financial position or business of the Borrower and its Subsidiaries as the
Administrative Agent, at the request of any Bank, may reasonably request.
Section 5.2. Payment of Obligations. The Borrower will pay and
discharge, and will cause each Subsidiary to pay and discharge, at or before
maturity, all their respective material obligations and liabilities, including,
without limitation, tax liabilities, except where the same may be contested in
good faith by appropriate proceedings, and will maintain, and will cause each
Subsidiary to maintain, in accordance with generally accepted accounting
principles, appropriate reserves for the accrual of any of the same.
Section 5.3. Maintenance of Property; Insurance. (a) The Borrower
will keep, and will cause each Subsidiary to keep, all property useful and
necessary in its business in good working order and condition, ordinary wear and
tear excepted.
(b) The Borrower will maintain or cause to be maintained with, in the
good faith judgment of the Borrower, financially sound and reputable insurers,
or through self-insurance, insurance with respect to its properties and business
and the properties and businesses of its Subsidiaries against loss or damage of
the kinds customarily insured against by corporations of established reputation
engaged in the same or similar business and similarly situated, of such types
and in such amounts as are customarily carried under similar circumstances by
such other corporations. Such insurance may include self-insurance or be subject
to co-insurance, deductibility or similar clauses which, in effect, result in
self-insurance of certain losses, provided that such self-insurance is in accord
with the approved practices of corporations similarly situated and adequate
insurance reserves are maintained in connection with such self-insurance, and,
notwithstanding the foregoing provisions of this Section 5.3 the Borrower or any
Subsidiary may effect workers' compensation or similar insurance in respect of
operations in any state or other jurisdiction either through an insurance fund
operated by such state or other jurisdiction or by causing to be maintained a
system or systems of self-insurance in accord with applicable laws.
Section 5.4. Conduct of Business and Maintenance of Existence.
The Borrower will continue, and will cause each Material Subsidiary to continue,
to engage in business of the same general type as now conducted by the Borrower
and its Subsidiaries, and will preserve, renew and keep in full force and
effect, and will cause each Subsidiary to preserve, renew and keep in full force
and effect their respective corporate existence and their respective rights,
privileges and franchises necessary or desirable in the normal conduct of
business; provided that nothing in this Section 5.4 shall prohibit (i) the
merger of a Subsidiary into the Borrower or the merger or consolidation of a
Subsidiary with or into another Person if the corporation
41
surviving such consolidation or merger is a Subsidiary and if, in each case,
after giving effect thereto, no Default shall have occurred and be continuing,
(ii) the sale or other disposition (whether by merger or otherwise) of the
capital stock or assets of any Subsidiary, if such transaction complies with the
provisions of Section 5.11 or (iii) the termination of the corporate existence
of any Subsidiary if the Borrower in good faith determines that such termination
is in the best interest of the Borrower and is not materially disadvantageous to
the Banks.
Section 5.5. Compliance with Laws. The Borrower will comply, and
cause each Subsidiary to comply, in all respects with all applicable laws,
ordinances, rules, regulations, and requirements of governmental authorities
(including, without limitation, Environmental Laws and ERISA and the rules and
regulations thereunder) except (i) where the necessity of compliance therewith
is contested in good faith by appropriate proceedings or (ii) where failure to
comply could not reasonably be expected to materially adversely affect the
business, consolidated financial position or consolidated results of operations
of the Borrower and its Consolidated Subsidiaries, considered as a whole.
Section 5.6. Inspection of Property, Books and Records. The
Borrower will keep, and will cause each Subsidiary to keep, proper books of
record and account in which full, true and correct entries, as required by
generally accepted accounting principles, shall be made of all dealings and
transactions in relation to its business and activities; and will permit, and
will cause each Subsidiary to permit, representatives of any Bank at such Bank's
expense to visit and inspect any of their respective properties, to examine and
make abstracts from any of their respective books and records (subject to
compliance with confidentiality agreements, copyrights and the like) and to
discuss their respective affairs, finances and accounts with their respective
officers, employees and independent public accountants, all at such reasonable
times and as often as may reasonably be desired.
Section 5.7. Debt. (a) Consolidated Debt of the Borrower will at
no time exceed the MLP of Consolidated Total Capitalization. "MLP" means Maximum
Leverage Percentage, which is 87.00%, subject to adjustment from time to time
after the date hereof as follows: (a) upon the issuance of Trust Preferred
Securities in the amount of $300,000,000, the MLP will be reduced by 5.25%; (b)
upon issuance of common equity securities in the amount of $500,000,000, the MLP
will be reduced by 8.75%; and (c) upon issuance of Mandatorily Convertible
Preferred Stock in the amount of $400,000,000, the MLP will be reduced by 6.00%.
In the event of issuance of securities of the type described above in an amount
different from that specified, the consequent reduction of the MLP will be
adjusted on a pro rata basis; provided that in the event of issuance of Trust
Preferred Securities in an amount greater than the indicated amount, there will
not be an additional reduction in the MLP to the extent that the Trust Preferred
Securities exceed 10% of the Consolidated Total Capitalization of the Borrower.
Upon issuance of all securities of the types described above, the MLP will at
all times thereafter be 67.00%.
(b) Total Debt of all Consolidated Subsidiaries (excluding Debt of a
Consolidated Subsidiary of the Borrower to the Borrower or to another
Consolidated Subsidiary of the Borrower) will at no time exceed 10% of
Consolidated Debt of the Borrower.
42
(c) Consolidated Debt of each Material Subsidiary will at no time
exceed 65% of the Consolidated Total Capitalization of such Material Subsidiary.
Section 5.8. Minimum Net Worth. Consolidated Net Worth will at no
time be less than an amount equal to the sum of (a) $570,000,000 plus (b) 50% of
Consolidated Net Income for each fiscal quarter of the Borrower ending after the
date hereof and at or prior to such time (but only if such Consolidated Net
Income for such fiscal quarter is a positive amount) plus (c) for any issuance
of securities resulting in a reduction of the MLP pursuant to Section 5.07(a),
an amount equal to 80% of the increase in Consolidated Net Worth resulting from
such issuance of securities, if at such time the Borrower's senior unsecured
long-term debt is not rated at least Baa2 by ▇▇▇▇▇'▇ and BBB by S&P.
Section 5.9. Minimum Interest Coverage Ratio. At any time at
which the Borrower's senior unsecured long-term debt is not rated at least Baa3
by ▇▇▇▇▇'▇ and BBB- by S&P, the Interest Coverage Ratio will not be less than
(i) 2.25:1, if such time is prior to March 31, 1999, and (ii) 2.75:1, if such
time is on or after March 31, 1999.
Section 5.10. Negative Pledge. Neither the Borrower nor any
Subsidiary will create, assume or suffer to exist any Lien on any asset now
owned or hereafter acquired by it, except:
(a) any Liens deemed to exist on the date of this Agreement
under the Purchase Agreement;
(b) Liens on cash and cash equivalents securing the Substitute Note,
as contemplated by the Reimbursement Agreement;
(c) Liens on assets of any Person existing at the time such Person
becomes a Subsidiary and not created in contemplation of such event;
(d) Liens arising in the ordinary course of its business which (i) do
not secure Debt or Derivatives Obligations, (ii) do not secure any obligation in
an amount exceeding $150,000,000 and (iii) do not in the aggregate materially
detract from the value of its assets or materially impair the use thereof in the
operation of its business;
(e) Liens on cash and cash equivalents securing Derivatives
Obligations, provided that the aggregate amount of cash and cash equivalents
subject to such Liens may at no time exceed $75,000,000;
(f) statutory or common law Liens of or upon deposits of cash in
favor of banks or other depository institutions; and
(g) Liens not otherwise permitted by the foregoing clauses of this
Section securing Debt in an aggregate principal or face amount at any date not
to exceed 10% of Consolidated Net Worth of the Borrower.
43
Section 5.11. Consolidations, Mergers and Sales of Assets. The
Borrower will not (i) consolidate or merge with or into any other Person or (ii)
sell, lease or otherwise transfer, directly or indirectly, all or substantially
all of its assets to any other Person, unless:
(i) immediately after giving effect to the
transaction, no Default shall have occurred and be continuing; and
(ii) except in the case of a merger in which the
Borrower is the surviving corporation:
(x) the Person formed by or surviving such
transaction, in the case of a consolidation or merger, and the
transferee, in the case of a transfer, assumes all obligations of the
Borrower hereunder and under the Notes;
(y) the Person formed by or surviving such
transaction, in the case of a consolidation or merger, and the
transferee, in the case of a transfer, is organized under the laws of
the United States or any state thereof; and
(z) the Borrower has delivered to the Administrative
Agent an officer's certificate and opinion of counsel, each stating
that such consolidation, merger, or transfer and such assumption
comply with the provisions hereof.
No such sale, lease or other transfer of assets shall have the effect of
releasing the Borrower (or any successor that shall have become such in the
manner prescribed in this Section) from its liability under this Agreement and
the Notes.
Section 5.12. Use of Proceeds. The proceeds of the Loans made
under this Agreement will be used by the Borrower for general corporate
purposes. None of such proceeds will be used, directly or indirectly, for the
purpose, whether immediate, incidental or ultimate, of buying or carrying any
"margin stock" within the meaning of Regulation U.
Section 5.13. Transactions with Affiliates. The Borrower will not
participate in any material transaction with an affiliate (other than a
Subsidiary) unless such transaction is in the ordinary course of its business
and on terms no less advantageous to the Borrower than could be obtained in such
a transaction with an unaffiliated party.
ARTICLE 6
Defaults
Section 6.1. Events of Default. If one or more of the
following events ("Events of Default") shall have occurred and be continuing:
44
(a) the Borrower shall fail to reimburse any drawing under any Letter
of Credit when required hereunder or to pay when due any principal of any Loan
or shall fail to pay within three Domestic Business Days of the due date thereof
any interest on any Loan, any fees or any other amount payable hereunder;
(b) the Borrower shall fail to observe or perform any covenant
contained in Sections 5.7 to 5.13, inclusive;
(c) the Borrower shall fail to observe or perform any covenant or
agreement contained in this Agreement (other than those covered by clause (a) or
(b) above) for 10 days after notice thereof has been given to the Borrower by
the Administrative Agent at the request of any Bank;
(d) any representation, warranty, certification or statement made by
the Borrower in this Agreement or in any certificate, financial statement or
other document delivered pursuant to this Agreement shall prove to have been
incorrect in any material respect when made (or deemed made);
(e) the Borrower or any Subsidiary shall fail to make any payment in
respect of any Material Financial Obligations when due or within any applicable
grace period; provided, however, that if any such failure is cured by the
Borrower or such Subsidiary or is waived by the requisite percentage of holders
of such Material Financial Obligations entitled to so waive, then the Event of
Default under this Agreement by reason of such failure shall be deemed to have
been cured;
(f) any event or condition shall occur which results in the
acceleration of the maturity of any Material Debt or enables (or, with the
giving of notice or lapse of time or both, would enable) the holder of such Debt
or any Person acting on such holder's behalf to accelerate the maturity thereof;
provided, however, that if any such acceleration is rescinded, or any such event
or condition is cured by the Borrower or any Subsidiary or is waived by the
requisite percentage of holders of such Material Debt entitled to so waive, then
the Event of Default under this Agreement by reason of such acceleration, event
or condition shall be deemed to have been cured;
(g) the Borrower or any Material Subsidiary shall commence a
voluntary case or other proceeding seeking liquidation, reorganization or other
relief with respect to itself or its debts under any bankruptcy, insolvency or
other similar law now or hereafter in effect or seeking the appointment of a
trustee, receiver, liquidator, custodian or other similar official of it or any
substantial part of its property, or shall consent to any such relief or to the
appointment of or taking possession by any such official in an involuntary case
or other proceeding commenced against it, or shall make a general assignment for
the benefit of creditors, or shall fail generally to pay its debts as they
become due, or shall take any corporate action to authorize any of the
foregoing;
(h) an involuntary case or other proceeding shall be commenced
against the Borrower or any Material Subsidiary seeking liquidation,
reorganization or other relief with respect to it or its debts under any
bankruptcy, insolvency or other similar law now or hereafter in effect or
seeking the appointment of a trustee, receiver, liquidator, custodian or other
45
similar official of it or any substantial part of its property, and such
involuntary case or other proceeding shall remain undismissed and unstayed for a
period of 60 days; or an order for relief shall be entered against the Borrower
or any Material Subsidiary under the federal bankruptcy laws as now or hereafter
in effect;
(i) any member of the ERISA Group shall fail to pay when due an
amount which it shall have become liable to pay under Title IV of ERISA; or
notice of intent to terminate a Plan shall be filed under Title IV of ERISA by
any member of the ERISA Group, any plan administrator or any combination of the
foregoing; or the PBGC shall institute proceedings under Title IV of ERISA to
terminate, to impose liability (other than for premiums under Section 4007 of
ERISA) in respect of, or to cause a trustee to be appointed to administer any
Plan; or a condition shall exist by reason of which the PBGC would be entitled
to obtain a decree adjudicating that any Plan must be terminated; or there shall
occur a complete or partial withdrawal from, or a default, within the meaning of
Section 4219(c)(5) of ERISA, with respect to, one or more Multiemployer Plans
which could cause one or more members of the ERISA Group to incur a current
payment obligation; and in each of the foregoing instances such condition (i)
could reasonably be expected to materially adversely affect the business,
consolidated financial position or consolidated results of operations of the
Borrower and its Consolidated Subsidiaries, considered as a whole, and (ii)
shall continue for 10 days after notice thereof has been given to the Borrower
by the Administrative Agent at the request of any Bank;
(j) a judgment or judgments for the payment of money (not paid or
fully covered by insurance or indemnification) in excess of $60,000,000 in the
aggregate shall be rendered against the Borrower or any Material Subsidiary and
such judgment or judgments are not, within 30 days after entry thereof, bonded,
discharged or stayed pending appeal, or are not discharged within 30 days after
the expiration of such stay; or
(k) any person or group of persons (within the meaning of Section 13
or 14 of the Securities Exchange Act of 1934, as amended) shall have acquired
beneficial ownership (within the meaning of Rule 13d-3 promulgated by the
Securities and Exchange Commission under said Act) of 30% or more of the
outstanding shares of common stock of the Borrower; or, during any period of
twelve consecutive calendar months, individuals who were directors of the
Borrower on the first day of such period shall cease to constitute a majority of
the board of directors of the Borrower; then, and in every such event, the
Administrative Agent shall (i) if requested by Banks having more than 50% in
aggregate amount of the Commitments, by notice to the Borrower terminate the
Commitments and they shall thereupon terminate, and (ii) if requested by Banks
holding Notes evidencing more than 50% in aggregate principal amount of the
Loans, by notice to the Borrower declare the Notes (together with accrued
interest thereon) to be, and the Notes shall thereupon become, immediately due
and payable without presentment, demand, protest or other notice of any kind,
all of which are hereby waived by the Borrower; provided that in the case of any
of the Events of Default specified in clause (g) or (h) above with respect to
the Borrower, without any notice to the Borrower or any other act by the
Administrative Agent or the Banks, the Commitments shall thereupon terminate and
the Notes (together with accrued interest thereon) shall become immediately due
and payable without presentment, demand, protest or other notice of any kind,
all of which are hereby waived by the Borrower.
46
Section 6.2. Notice of Default. The Administrative Agent shall
give notice to the Borrower under Section 6.1(c) or 6.1(i) promptly upon being
requested to do so by any Bank and shall thereupon notify all the Banks thereof.
Section 6.3. Cash Cover. The Borrower agrees, in addition to the
provisions of Section 6.01 hereof, that upon the occurrence and during the
continuance of any Event of Default, it shall, if requested by the
Administrative Agent upon the instruction of the Banks having more than 50% in
the aggregate amount of the Commitments (or, if the Commitments shall have been
terminated, holding more than 50% of the Letter of Credit Liabilities),
forthwith pay to the Administrative Agent an amount in immediately available
funds (which funds shall be held as collateral pursuant to arrangements
satisfactory to the Administrative Agent) equal to the aggregate amount
available for drawing under all Letters of Credit then outstanding at such time,
provided that, upon the occurrence of any Event of Default specified in Section
6.01(g) or (h) with respect to the Borrower, the Borrower shall pay such amount
forthwith without any notice or demand or any other act by the Administrative
Agent or the Banks.
ARTICLE 7
The Agents
Section 7.1. Appointment and Authorization. Each Bank irrevocably
appoints and authorizes the Administrative Agent to take such action as agent on
its behalf and to exercise such powers under this Agreement and the Notes as are
delegated to the Administrative Agent by the terms hereof or thereof, together
with all such powers as are reasonably incidental thereto.
Section 7.2. Administrative Agent and Affiliates. ▇▇▇▇▇▇ Guaranty
Trust Company of New York shall have the same rights and powers under this
Agreement as any other Bank and may exercise or refrain from exercising the same
as though it were not the Administrative Agent, and ▇▇▇▇▇▇ Guaranty Trust
Company of New York 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.
47
Section 7.3. Action by Administrative Agent. The obligations of
the Administrative Agent hereunder are only those expressly set forth herein.
Without limiting the generality of the foregoing, the Administrative Agent shall
not be required to take any action with respect to any Default, except as
expressly provided in Article 6.
Section 7.4. Consultation with Experts. The Administrative Agent
may consult with legal counsel (who may be counsel for the Borrower),
independent public accountants and other experts selected by it and shall not be
liable for any action taken or omitted to be taken by it in good faith in
accordance with the advice of such counsel, accountants or experts.
Section 7.5. Liability of Administrative Agent. Neither the
Administrative Agent nor any of its affiliates nor any of their respective
directors, officers, agents or employees shall be liable for any action taken or
not taken by it in connection herewith (i) with the consent or at the request of
the Required Banks or (ii) in the absence of its own gross negligence or willful
misconduct. Neither the Administrative Agent nor any of its affiliates nor any
of their respective directors, officers, agents or employees shall be
responsible for or have any duty to ascertain, inquire into or verify (i) any
statement, warranty or representation made in connection with this Agreement or
any borrowing hereunder; (ii) the performance or observance of any of the
covenants or agreements of the Borrower; (iii) the satisfaction of any condition
specified in Article 3, except receipt of items required to be delivered to the
Administrative Agent; or (iv) the validity, effectiveness or genuineness of this
Agreement, the Notes or any other instrument or writing furnished in connection
herewith. The Administrative Agent shall not incur any liability by acting in
reliance upon any notice, consent, certificate, statement, or other writing
(which may be a bank wire, telex, facsimile transmission or similar writing)
believed by it to be genuine or to be signed by the proper party or parties.
Without limiting the generality of the foregoing, the use of the term "agent" in
this Agreement with reference to the Administrative Agent is not intended to
connote any fiduciary or other implied (or express) obligations arising under
agency doctrine of any applicable law. Instead, such term is used merely as a
matter of market custom and is intended to create or reflect only an
administrative relationship between independent contracting parties.
Section 7.6. Indemnification. Each Bank shall, ratably in
accordance with its Commitment, indemnify any Agent, its affiliates and their
respective directors, officers, agents and employees (to the extent not
reimbursed by the Borrower) against any cost, expense (including counsel fees
and disbursements), claim, demand, action, loss or liability (except such as
result from such indemnitees' gross negligence or willful misconduct) that such
indemnitees may suffer or incur in connection with this Agreement or any action
taken or omitted by such indemnitees hereunder.
Section 7.7. Credit Decision. Each Bank acknowledges that it has,
independently and without reliance upon any Agent or any other Bank, 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 Bank also
acknowledges that it will, independently and without reliance upon any Agent or
any other Bank, and based on such documents and information as it shall
48
deem appropriate at the time, continue to make its own credit decisions in
taking or not taking any action under this Agreement.
Section 7.8. Successor Administrative Agent. The Administrative
Agent may resign at any time by giving notice thereof to the Banks and the
Borrower. Upon any such resignation, the Required Banks shall have the right to
appoint a successor Administrative Agent, with the consent of the Borrower,
which shall not be unreasonably withheld. If no successor Administrative Agent
shall have been so appointed by the Required Banks, and shall have accepted such
appointment, within 30 days after the retiring Administrative Agent gives notice
of resignation, then the retiring Administrative Agent may, on behalf of the
Banks, appoint a successor Administrative Agent, which shall be a commercial
bank organized or licensed under the laws of the United States of America or of
any State thereof and having a combined capital and surplus of at least
$500,000,000. Upon the acceptance of its appointment as Administrative Agent
hereunder by a successor Administrative Agent, such successor Administrative
Agent shall thereupon succeed to and become vested with all the rights and
duties of the retiring Administrative Agent, and the retiring Administrative
Agent shall be discharged from its duties and obligations hereunder. After any
retiring Administrative Agent's resignation hereunder as Administrative Agent,
the provisions of this Article shall inure to its benefit as to any actions
taken or omitted to be taken by it while it was Administrative Agent.
Section 7.9. Agents' Fees. The Borrower shall pay to the
Administrative Agent for the account of the Agents fees in the amounts and at
the times previously agreed upon between the Borrower and the Agents.
Section 7.10. Other Agents. Nothing contained in this
Agreement shall be construed to impose any obligation or duty whatsoever on any
Syndication Agent, in its capacity as such an Agent.
ARTICLE 8
Change in Circumstances
Section 8.1. Basis for Determining Interest Rate Inadequate or
Unfair. If on or prior to the first day of any Interest Period for any Fixed
Rate Borrowing:
(a) the Administrative Agent is advised by the
Reference Banks that deposits in dollars (in the applicable amounts) are not
being offered to the Reference Banks in the relevant market for such Interest
Period, or
(b) in the case of a Committed Borrowing, Banks having
50% or more of the aggregate amount of the Commitments advise the Administrative
Agent that the Adjusted CD Rate or the London Interbank Offered Rate, as the
case may be, as determined by the Administrative Agent will not adequately and
fairly reflect the cost to such Banks of funding their CD Loans or Euro-Dollar
Loans, as the case may be, for such Interest Period,
49
the Administrative Agent shall forthwith give notice thereof to the Borrower and
the Banks, whereupon until the Administrative Agent notifies the Borrower that
the circumstances giving rise to such suspension no longer exist, the
obligations of the Banks to make CD Loans or Euro-Dollar Loans, as the case may
be, shall be suspended. Unless the Borrower notifies the Administrative Agent at
least two Domestic Business Days before the date of any Fixed Rate Borrowing for
which a Notice of Borrowing has previously been given that it elects not to
borrow on such date, (i) if such Fixed Rate Borrowing is a Committed Borrowing,
such Borrowing shall instead be made as a Base Rate Borrowing and (ii) if such
Fixed Rate Borrowing is a Money Market LIBOR Borrowing, the Money Market LIBOR
Loans comprising such Borrowing shall bear interest for each day from and
including the first day to but excluding the last day of the Interest Period
applicable thereto at the Base Rate for such day.
Section 8.2. Illegality. If, on or after the date of this
Agreement, the adoption of any applicable law, rule or regulation, or any change
in any applicable law, rule or regulation, or any change in the interpretation
or administration thereof by any governmental authority, central bank or
comparable agency charged with the interpretation or administration thereof, or
compliance by any Bank (or its Euro-Dollar Lending Office) with any request or
directive (whether or not having the force of law) of any such authority,
central bank or comparable agency shall make it unlawful or impossible for any
Bank (or its Euro-Dollar Lending Office) to make, maintain or fund its
Euro-Dollar Loans and such Bank shall so notify the Administrative Agent, the
Administrative Agent shall forthwith give notice thereof to the other Banks and
the Borrower, whereupon until such Bank notifies the Borrower and the
Administrative Agent that the circumstances giving rise to such suspension no
longer exist, the obligation of such Bank to make Euro-Dollar Loans shall be
suspended. Before giving any notice to the Administrative Agent pursuant to this
Section, such Bank shall designate a different Euro-Dollar Lending Office if
such designation will avoid the need for giving such notice and will not, in the
judgment of such Bank, be otherwise disadvantageous to such Bank. If such Bank
shall determine that it may not lawfully continue to maintain and fund any of
its outstanding Euro-Dollar Loans to maturity and shall so specify in such
notice, the Borrower shall immediately prepay in full the then outstanding
principal amount of each such Euro-Dollar Loan, together with accrued interest
thereon. Concurrently with prepaying each such Euro-Dollar Loan, the Borrower
shall borrow a Base Rate Loan in an equal principal amount from such Bank (on
which interest and principal shall be payable contemporaneously with the related
Euro-Dollar Loans of the other Banks), and such Bank shall make such a Base Rate
Loan.
Section 8.3. Increased Cost and Reduced Return. (a) If on or
after (x) the date hereof, in the case of any Committed Loan or Letter of Credit
or any obligation to make Committed Loans or issue or participate in any Letter
of Credit or (y) the date of the related Money Market Quote, in the case of any
Money Market Loan, the adoption of any applicable law, rule or regulation, or
any change in any applicable law, rule or regulation, or any change in the
interpretation or administration thereof by any governmental
50
authority, central bank or comparable agency charged with the interpretation or
administration thereof, or compliance by any Bank (or its Applicable Lending
Office) with any request or directive (whether or not having the force of law)
of any such authority, central bank or comparable agency shall impose, modify or
deem applicable any reserve (including, without limitation, any such requirement
imposed by the Board of Governors of the Federal Reserve System, but excluding
(i) with respect to any CD Loan any such requirement included in an applicable
Domestic Reserve Percentage and (ii) with respect to any Euro-Dollar Loan any
such requirement with respect to which such Bank is entitled to compensation
during the relevant Interest Period under Section 2.15), special deposit,
insurance assessment (excluding, with respect to any CD Loan, any such
requirement reflected in an applicable Assessment Rate) or similar requirement
against assets of, deposits with or for the account of, or credit extended by,
any Bank (or its Applicable Lending Office) or shall impose on any Bank (or its
Applicable Lending Office) or on the United States market for certificates of
deposit or the London interbank market any other condition affecting its Fixed
Rate Loans, its Note or its participation in any Letter of Credit or its
obligation to make Fixed Rate Loans or issue or participate in Letters of Credit
and the result of any of the foregoing is to increase the cost to such Bank (or
its Applicable Lending Office) of making or maintaining any Fixed Rate Loan or
of issuing or participating in any Letter of Credit, or to reduce the amount of
any sum received or receivable by such Bank (or its Applicable Lending Office)
under this Agreement or under its Note with respect thereto, by an amount deemed
by such Bank to be material, then, within 15 days after demand by such Bank
(with a copy to the Administrative Agent), the Borrower shall pay to such Bank
such additional amount or amounts as will compensate such Bank for such
increased cost or reduction.
(b) If any Bank shall have determined that, after the date hereof,
the adoption of any applicable law, rule or regulation regarding capital
adequacy, or any change in any such law, rule or regulation, or any change in
the interpretation or administration thereof by any governmental authority,
central bank or comparable agency charged with the interpretation or
administration thereof, or any request or directive regarding capital adequacy
(whether or not having the force of law) of any such authority, central bank or
comparable agency, has or would have the effect of reducing the rate of return
on capital of such Bank (or its Parent) as a consequence of such Bank's
obligations hereunder to a level below that which such Bank (or its Parent)
could have achieved but for such adoption, change, request or directive (taking
into consideration its policies with respect to capital adequacy) by an amount
deemed by such Bank to be material, then from time to time, within 15 days after
demand by such Bank (with a copy to the Administrative Agent), the Borrower
shall pay to such Bank such additional amount or amounts as will compensate such
Bank (or its Parent) for such reduction.
(c) Each Bank will promptly notify the Borrower and the
Administrative Agent of any event of which it has knowledge, occurring after the
date hereof, which will entitle such Bank to compensation pursuant to this
Section and will designate a different Applicable Lending Office if such
designation will avoid the need for, or reduce the amount of, such compensation
and will not, in the judgment of such Bank, be otherwise disadvantageous to such
Bank. A certificate of any Bank claiming compensation under this Section and
setting forth in reasonable detail the additional
51
amount or amounts to be paid to it hereunder shall be conclusive in the absence
of manifest error. In determining such amount, such Bank may use any reasonable
averaging and attribution methods. Notwithstanding the foregoing subsections (a)
and (b) of this Section 8.3, the Borrower shall only be obligated to compensate
any Bank for any amount arising or accruing during (i) any time or period
commencing not more than 90 days prior to the date on which such Bank notifies
the Administrative Agent and the Borrower that it proposes to demand such
compensation and identifies to the Administrative Agent and the Borrower the
statute, regulation or other basis upon which the claimed compensation is or
will be based and (ii) any time or period during which, because of the
retroactive application of such statute, regulation or other such basis, such
Bank did not know that such amount would arise or accrue.
Section 8.4. Taxes. (a) For purposes of this Section 8.4, the
following terms have the following meanings:
"Taxes" means any and all present or future taxes, duties,
levies, imposts, deductions, charges or withholdings with respect to any payment
by the Borrower pursuant to this Agreement or under any Note or Letter of
Credit, and all liabilities with respect thereto, excluding (i) in the case of
each Bank and the Administrative Agent, taxes imposed on its income, and
franchise or similar taxes imposed on it, by a jurisdiction under the laws of
which such Bank or the Administrative Agent (as the case may be) is organized or
in which its principal executive office is located or, in the case of each Bank,
in which its Applicable Lending Office is located and (ii) in the case of each
Bank, any United States withholding tax imposed on such payments but only to the
extent that such Bank is subject to United States withholding tax at the time
such Bank first becomes a party to this Agreement.
"Other Taxes" means any present or future stamp or documentary
taxes and any other excise or property taxes, or similar charges or levies,
which arise from any payment made pursuant to this Agreement or under any Note
or Letter of Credit or from the execution or delivery of, or otherwise with
respect to, this Agreement or any Note or Letter of Credit.
(b) Any and all payments by the Borrower to or for the account of any
Bank or the Administrative Agent hereunder or under any Note shall be made
without deduction for any Taxes or Other Taxes; provided that, if the Borrower
shall be required by law to deduct any Taxes or Other Taxes from any such
payments, (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 8.4) such Bank or the Administrative Agent (as
the case may be) receives an amount equal to the sum it would have received had
no such deductions been made, (ii) the Borrower shall make such deductions,
(iii) the Borrower shall pay the full amount deducted to the relevant taxation
authority or other authority in accordance with applicable law and (iv) the
Borrower shall furnish to the Administrative Agent, at its address referred to
in Section 9.1, the original or a certified copy of a receipt evidencing payment
thereof.
(c) The Borrower agrees to indemnify each Bank and the Administrative
Agent for the full amount of Taxes or Other Taxes (including, without
limitation, any Taxes or Other Taxes imposed or asserted by any
52
jurisdiction on amounts payable under this Section 8.4) paid by such Bank or the
Administrative Agent (as the case may be) and any liability (including
penalties, interest and expenses) arising therefrom or with respect thereto.
This indemnification shall be paid within 15 days after such Bank or the
Administrative Agent (as the case may be) makes demand therefor.
(d) Each Bank organized under the laws of a jurisdiction outside the
United States, on or prior to the date of its execution and delivery of this
Agreement in the case of each Bank listed on the signature pages hereof and on
or prior to the date on which it becomes a Bank in the case of each other Bank,
and from time to time thereafter if requested in writing by the Borrower (but
only so long as such Bank remains lawfully able to do so), shall provide the
Borrower with Internal Revenue Service form 1001 or 4224, as appropriate, or any
successor form prescribed by the Internal Revenue Service, certifying that such
Bank is entitled to benefits under an income tax treaty to which the United
States is a party which exempts the Bank from United States withholding tax or
reduces the rate of withholding tax on payments of interest for the account of
such Bank or certifying that the income receivable pursuant to this Agreement is
effectively connected with the conduct of a trade or business in the United
States.
(e) For any period with respect to which a Bank has failed to provide
the Borrower with the appropriate form pursuant to Section 8.4(d) (unless such
failure is due to a change in treaty, law or regulation occurring subsequent to
the date on which such form originally was required to be provided), such Bank
shall not be entitled to indemnification under Section 8.4(b) or (c) with
respect to Taxes imposed by the United States; provided that if a Bank, which is
otherwise exempt from or subject to a reduced rate of withholding tax, becomes
subject to Taxes because of its failure to deliver a form required hereunder,
the Borrower, at such Bank's expense, shall take such steps as such Bank shall
reasonably request to assist such Bank to recover such Taxes.
(f) If the Borrower is required to pay additional amounts to or for
the account of any Bank pursuant to this Section 8.4, then such Bank will change
the jurisdiction of its Applicable Lending Office if, in the judgment of such
Bank, such change (i) will eliminate or reduce any such additional payment which
may thereafter accrue and (ii) is not otherwise disadvantageous to such Bank.
Section 8.5. Base Rate Loans Substituted for Affected Fixed Rate
Loans. If (i) the obligation of any Bank to make Euro-Dollar Loans has been
suspended pursuant to Section 8.2 or (ii) any Bank has demanded compensation
under Section 8.3 or 8.4 with respect to its CD Loans or Euro-Dollar Loans and
the Borrower shall, by at least five Euro-Dollar Business Days' prior notice to
such Bank through the Administrative Agent, have elected that the provisions of
this Section shall apply to such Bank, then, unless and until such Bank notifies
the Borrower that the circumstances giving rise to such suspension or demand for
compensation no longer exist:
(a) all Loans which would otherwise be made by such Bank as CD Loans
or Euro-Dollar Loans, as the case may be, shall be made instead as Base Rate
Loans (on which interest and principal shall be payable contemporaneously with
the related Fixed Rate Loans of the other Banks), and
53
(b) after each of its CD Loans or Euro-Dollar Loans, as the case may
be, has been repaid, all payments of principal which would otherwise be applied
to repay such Fixed Rate Loans shall be applied to repay its Base Rate Loans
instead.
Section 8.6. Substitution of Bank. If (i) the obligation of any
Bank to make Euro-Dollar Loans has been suspended pursuant to Section 8.2 or
(ii) any Bank has demanded compensation under Section 8.3 or 8.4, the Borrower
shall have the right, with the assistance of the Administrative Agent, to seek a
mutually satisfactory substitute bank or banks (which may be one or more of the
Banks) to purchase the Note and assume the Commitment of such Bank.
ARTICLE 9
Miscellaneous
Section 9.1. Notices. All notices, requests and other
communications to any party hereunder shall be in writing (including bank wire,
telex, facsimile transmission or similar writing) and shall be given to such
party: (x) in the case of the Borrower or the Administrative Agent, at its
address, facsimile number or telex number set forth on the signature pages
hereof, (y) in the case of any Bank, at its address, facsimile number or telex
number set forth in its Administrative Questionnaire or (z) in the case of any
party, such other address, facsimile number or telex number as such party may
hereafter specify for the purpose by notice to the Administrative Agent and the
Borrower. Each such notice, request or other communication shall be effective
(i) if given by telex, when such telex is transmitted to the telex number
specified in this Section and the appropriate answerback is received, (ii) if
given by facsimile transmission, when transmitted to the facsimile number
specified in this Section and confirmation of receipt is received or (iii) if
given by any other means, when delivered at the address specified in this
Section; provided that notices to the Administrative Agent under Article 2 or
Article 8 shall not be effective until received.
Section 9.2. No Waivers. No failure or delay by the
Administrative Agent or any Bank in exercising any right, power or privilege
hereunder or under any Note shall operate as a waiver thereof nor shall any
single or partial exercise thereof preclude any other or further exercise
thereof or the exercise of any other right, power or privilege. The rights and
remedies herein provided shall be cumulative and not exclusive of any rights or
remedies provided by law.
Section 9.3. Expenses; Indemnification. (a) The Borrower shall
pay (i) all reasonable out-of-pocket expenses of the Administrative Agent,
including fees and disbursements of ▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇, special counsel for
the Agents, in connection with the preparation and administration of this
Agreement, any waiver or consent hereunder or any amendment hereof or any
Default or alleged Default hereunder and (ii) if an Event of Default occurs, all
out-of-pocket expenses incurred by each Agent and Bank, including (without
duplication) the fees and disbursements of outside counsel and the allocated
cost of inside counsel, in connection with such Event of Default and collection,
bankruptcy, insolvency and other enforcement proceedings resulting therefrom.
54
(b) The Borrower agrees to indemnify each Agent and Bank, their
respective affiliates and the respective directors, officers, agents and
employees of the foregoing (each an "Indemnitee") and hold each Indemnitee
harmless from and against any and all liabilities, losses, damages, costs and
expenses of any kind, including, without limitation, the reasonable fees and
disbursements of counsel, which may be incurred by such Indemnitee in connection
with any investigative, administrative or judicial proceeding (whether or not
such Indemnitee shall be designated a party thereto) brought or threatened
relating to or arising out of (i) any actual or proposed use of proceeds of
Loans hereunder or (ii) any actual or alleged Default under this Agreement or
any actual or alleged untruth or inaccuracy of any representation or warranty
made by the Borrower in or in connection with this Agreement; provided that no
Indemnitee shall have the right to be indemnified hereunder for such
Indemnitee's own gross negligence or willful misconduct as finally determined by
a court of competent jurisdiction.
Section 9.4. Sharing of Set-offs. Each Bank agrees that if it
shall, by exercising any right of set-off or counterclaim or otherwise, receive
payment of a proportion of the aggregate amount of principal and interest due
with respect to its Loans and Letter of Credit Liabilities which is greater than
the proportion received by any other Bank in respect of the aggregate amount of
principal and interest due with respect to the Loans and Letter of Credit
Liabilities of such other Bank, the Bank receiving such proportionately greater
payment shall purchase such participations in the Loans and Letter of Credit
Liabilities of the other Banks, and such other adjustments shall be made, as may
be required so that all such payments of principal and interest with respect to
the Loans and Letter of Credit Liabilities shall be shared by the Banks pro
rata; provided that nothing in this Section shall impair the right of any Bank
to exercise any right of set-off or counterclaim it may have and to apply the
amount subject to such exercise to the payment of indebtedness of the Borrower
other than its indebtedness hereunder. The Borrower agrees, to the fullest
extent it may effectively do so under applicable law, that any holder of a
participation in a Loan and Letter of Credit Liability, whether or not acquired
pursuant to the foregoing arrangements, may exercise rights of set-off or
counterclaim and other rights with respect to such participation as fully as if
such holder of a participation were a direct creditor of the Borrower in the
amount of such participation.
Section 9.5. Amendments and Waivers. Any provision of this
Agreement or the Notes may be amended or waived if, but only if, such amendment
or waiver is in writing and is signed by the Borrower and the Required Banks
(and, if the rights or duties of any Agent or any Issuing Bank are affected
thereby, by it); provided that no such amendment or waiver shall, unless signed
by all the Banks, (i) increase or decrease the Commitment of any Bank (except
for a ratable decrease in the Commitments of all Banks) or subject any Bank to
any additional obligation, (ii) reduce the principal of or rate of interest on
any Loan or Letter of Credit Liability or any fees hereunder, (iii) postpone the
date fixed for any payment of principal of or interest on any Loan or the amount
to be reimbursed in respect of any Letter of Credit or interest thereon or any
fees hereunder or for termination of any Commitments or (iv) change the
percentage of the Commitments or of the
55
aggregate unpaid principal amount of the Loans and/or Letter of Credit
Liabilities, or the number of Banks, which shall be required for the Banks or
any of them to take any action under this Section or any other provision of this
Agreement.
Section 9.6. 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 otherwise transfer any of its rights under this Agreement without the
prior written consent of all Banks.
(b) Any Bank may at any time grant to one or more banks or other
institutions (each a "Participant") participating interests in its Commitment or
any or all of its Loans. In the event of any such grant by a Bank of a
participating interest to a Participant, whether or not upon notice to the
Borrower and the Administrative Agent, such Bank shall remain responsible for
the performance of its obligations hereunder, and the Borrower, the Issuing
Banks and the Administrative Agent shall continue to deal solely and directly
with such Bank in connection with such Bank's rights and obligations under this
Agreement. Any agreement pursuant to which any Bank may grant such a
participating interest shall provide that such Bank shall retain the sole right
and responsibility to enforce the obligations of the Borrower hereunder
including, without limitation, the right to approve any amendment, modification
or waiver of any provision of this Agreement; provided that such participation
agreement may provide that such Bank will not agree to any modification,
amendment or waiver of this Agreement described in clause (i), (ii) or (iii) of
Section 9.5 without the consent of the Participant. The Borrower agrees that
each Participant shall, to the extent provided in its participation agreement,
be entitled to the benefits of Article 8 with respect to its participating
interest. An assignment or other transfer which is not permitted by subsection
(c) or (d) below shall be given effect for purposes of this Agreement only to
the extent of a participating interest granted in accordance with this
subsection (b).
(c) Any Bank may at any time assign to one or more banks or other
institutions (each an "Assignee") all, or a proportionate part (equivalent to an
initial Commitment of not less than $10,000,000) of all, of its rights and
obligations under this Agreement and the Notes, and such Assignee shall assume
such rights and obligations, pursuant to an Assignment and Assumption Agreement
in substantially the form of Exhibit G hereto executed by such Assignee and such
transferor Bank, with (and subject to) the subscribed consent of the Borrower,
which shall not be unreasonably withheld, the Issuing Banks and the
Administrative Agent; provided that if an Assignee is an affiliate of such
transferor Bank or was a Bank immediately prior to such assignment, no such
consent shall be required; and provided further that such assignment may, but
need not, include rights of the transferor Bank in respect of outstanding Money
Market Loans. Upon execution and delivery of such instrument and payment by such
Assignee to such transferor Bank of an amount equal to the purchase price agreed
between such transferor Bank and such Assignee, such Assignee shall be a Bank
party to this Agreement and shall have all the rights and obligations of a Bank
with a Commitment as set forth in such instrument of assumption, and the
transferor Bank shall be released from its obligations hereunder to a
corresponding extent, and no further consent or action by any party shall be
required. Upon the consummation of any
56
assignment pursuant to this subsection (c), the transferor Bank, the
Administrative Agent and the Borrower shall make appropriate arrangements so
that, if required, a new Note is issued to the Assignee. In connection with any
such assignment, the transferor Bank shall pay to the Administrative Agent an
administrative fee for processing such assignment in the amount of $2,500. If
the Assignee is not incorporated under the laws of the United States of America
or a state thereof, it shall deliver to the Borrower and the Administrative
Agent certification as to exemption from deduction or withholding of any United
States federal income taxes in accordance with Section 8.4.
(d) Any Bank may at any time assign all or any portion of its rights
under this Agreement and its Note to a Federal Reserve Bank. No such assignment
shall release the transferor Bank from its obligations hereunder.
(e) No Assignee, Participant or other transferee of any Bank's rights
shall be entitled to receive any greater payment under Section 8.3 or 8.4 than
such Bank would have been entitled to receive with respect to the rights
transferred, unless such transfer is made with the Borrower's prior written
consent or by reason of the provisions of Section 8.2, 8.3 or 8.4 requiring such
Bank to designate a different Applicable Lending Office under certain
circumstances or at a time when the circumstances giving rise to such greater
payment did not exist.
Section 9.7. Collateral. Each of the Banks represents to each
Agent and each of the other Banks that it in good faith is not relying upon any
"margin stock" (as defined in Regulation U) as collateral in the extension or
maintenance of the credit provided for in this Agreement.
Section 9.8. Governing Law; Submission to Jurisdiction. This
Agreement and each Note shall be governed by and construed in accordance with
the laws of the State of New York. The Borrower hereby submits to the
nonexclusive jurisdiction of the United States District Court for the Southern
District of New York and of any New York State court sitting in New York City
having subject matter jurisdiction for purposes of all legal proceedings arising
out of or relating to this Agreement or the transactions contemplated hereby.
The Borrower irrevocably waives, to the fullest extent permitted by law, any
objection which it may now or hereafter have to the laying of the venue of any
such proceeding brought in such a court and any claim that any such proceeding
brought in such a court has been brought in an inconvenient forum.
Section 9.9. Counterparts; Integration. This Agreement may be
signed in any number of counterparts, each of which shall be an original, with
the same effect as if the signatures thereto and hereto were upon the same
instrument. This Agreement constitutes the entire agreement and understanding
among the parties hereto and supersedes any and all prior agreements and
understandings, oral or written, relating to the subject matter hereof except
the obligations of the Borrower to pay fees and expenses and to assist in the
syndication process as specified in the respective commitment letters and fee
letters heretofore entered into between the Borrower and the Agents.
57
Section 9.10. WAIVER OF JURY TRIAL. EACH OF THE BORROWER, THE
ADMINISTRATIVE AGENT AND THE BANKS HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT
TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
Section 9.11. Existing Credit Agreement. On the Effective
Date and simultaneously with the receipt by the Administrative Agent of the
required documents pursuant to Section 3.1, the Borrower hereby gives notice to
▇▇▇▇▇▇ Guaranty Trust Company of New York, as agent, under Section 2.9 of the
Existing Credit Agreement referred to in clause (x) of Section 3.1 of the
termination of the Commitments (as defined herein) and the Banks hereby waive
the requirement that prior notice of such termination be given as therein
provided.
58
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.
K N ENERGY, INC.
By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
--------------------------------------
Title: Vice President & Chief
Financial Officer
▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Chief Financial Officer
Facsimile number: (▇▇▇) ▇▇▇-▇▇▇▇
Commitments
-----------
$133,333,333.33 ▇▇▇▇▇▇ GUARANTY TRUST COMPANY
OF NEW YORK
By /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
--------------------------------------
Title: Vice President
$88,888,888.89 BANK OF AMERICA NT & SA
By /s/ J. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
--------------------------------------
Title: Senior Vice President
$88,888,888.89 THE CHASE MANHATTAN BANK
By /s/ ▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇
--------------------------------------
Title: Vice President
59
$88,888,888.89 NATIONSBANK, N.A.
By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
--------------------------------------
Title: Senior Vice President
---------------------
Total Commitments
$400,000,000
============
▇▇▇▇▇▇ GUARANTY TRUST COMPANY
OF NEW YORK, as Administrative Agent
By /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
--------------------------------------
Title: Vice President
▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Telex number: 177615
Facsimile number: ▇▇▇-▇▇▇-▇▇▇▇
60
PRICING SCHEDULE
The "Euro-Dollar Margin", "CD Margin" and "Facility Fee Rate" for
any day are the respective percentages set forth below in the applicable row
under the column corresponding to the Status that exists on such day:
--------------------------------------------------------------------------
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ I II III IV V VI
--------------------------------------------------------------------------
Euro-Dollar Margin
Utilization < 50% 0.200% 0.275% 0.325% 0.500% 0.625% 1.000%
Utilization > 50% 0.325% 0.400% 0.450% 0.625% 0.750% 1.125%
-
--------------------------------------------------------------------------
CD Margin
Utilization < 50% 0.325% 0.400% 0.450% 0.625% 0.750% 1.125%
Utilization > 50% 0.450% 0.525% 0.575% 0.750% 0.875% 1.250%
-
--------------------------------------------------------------------------
Facility Fee Rate 0.100% 0.125% 0.175% 0.250% 0.375% 0.500%
--------------------------------------------------------------------------
For purposes of this Schedule, the following terms have the
following meanings:
"Level I Status" exists at any date if, at such date, the
Borrower's senior unsecured long-term debt is rated BBB+ or higher by S&P and
Baa1 or higher by ▇▇▇▇▇'▇.
"Level II Status" exists at any date if, at such date, (i) the
Borrower's senior unsecured long-term debt is rated BBB or higher by S&P and
Baa2 or higher by ▇▇▇▇▇'▇ and (ii) Level I Status does not exist.
"Level III Status" exists at any date if, at such date, (i) the
Borrower's senior unsecured long-term debt is rated BBB- or higher by S&P and
Baa3 or higher by ▇▇▇▇▇'▇ and (ii) neither Level I Status nor Level II Status
exists.
"Level IV Status" exists at any date if, at such date, (i) the
Borrower's senior unsecured long-term debt is rated BB+ or higher by S&P and Ba1
or higher by ▇▇▇▇▇'▇ and (ii) none of Level I Status, Level II Status and Level
III Status exists.
"Level V Status" exists at any date if, at such date, (i) the
Borrower's senior unsecured long-term debt is rated BB or higher by S&P and Ba2
or higher by ▇▇▇▇▇'▇ and (ii) none of Level I Status, Level II Status, Level III
Status and Level IV Status exists.
"Level VI Status" exists at any date if, at such date, no other
Status exists.
"Status" refers to the determination of which of Level I Status,
Level II Status, Level III Status, Level IV Status, Level V Status or Level VI
Status exists at any date.
61
"Utilization" means, at any date, the percentage equivalent of a
fraction (i) the numerator of which is the sum of the aggregate outstanding
principal amount of the Loans and the aggregate Letter of Credit Liabilities at
such date and (ii) the denominator of which is the aggregate amount of the
Commitments at such date. If for any reason any Loans remain outstanding
following termination of the Commitments, Utilization shall be deemed to be in
excess of 50%.
The credit ratings to be utilized for purposes of this Schedule
are those assigned to the senior unsecured long-term debt securities of the
Borrower without third-party credit enhancement, and any rating assigned to any
other debt security of the Borrower shall be disregarded. The rating in effect
at any date is that in effect at the close of business on such date.
62
EXHIBIT A
NOTE
New York, New York
, 199_
For value received, K N Energy, Inc., a Kansas corporation (the
"Borrower"), promises to pay to the order of (the "Bank"), for the account of
its Applicable Lending Office, the unpaid principal amount of each Loan made by
the Bank to the Borrower pursuant to the Credit Agreement referred to below on
the last day of the Interest Period relating to such Loan. The Borrower promises
to pay interest on the unpaid principal amount of each such Loan on the dates
and at the rate or rates provided for in the Credit Agreement. All such payments
of principal and interest shall be made in lawful money of the United States in
Federal or other immediately available funds at the office of ▇▇▇▇▇▇ Guaranty
Trust Company of New York, ▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇.
All Loans made by the Bank, the respective types and maturities thereof
and all repayments of the principal thereof shall be recorded by the Bank and,
if the Bank so elects in connection with any transfer or enforcement hereof,
appropriate notations to evidence the foregoing information with respect to each
such Loan then outstanding may be endorsed by the Bank on the schedule attached
hereto, or on a continuation of such schedule attached to and made a part
hereof; provided that the failure of the Bank to make any such recordation or
endorsement shall not affect the obligations of the Borrower hereunder or under
the Credit Agreement.
This note is one of the Notes referred to in the Five-Year Credit
Agreement dated as of January 30, 1998 among the Borrower, the banks listed on
the signature pages thereof and ▇▇▇▇▇▇ Guaranty Trust Company of New York, as
Administrative Agent (as the same may be amended from time to time, the "Credit
Agreement"). Terms defined in the Credit Agreement are used herein with the same
meanings. Reference is made to the Credit Agreement for provisions for the
prepayment hereof and the acceleration of the maturity hereof.
K N ENERGY, INC.
By
--------------------------------------
Title:
63
Note (cont'd)
LOANS AND PAYMENTS OF PRINCIPAL
------------------------------------------------------------------
Amount of
Amount of Type of Principal Maturity Notation
Date Loan Loan Repaid Date Made By
------------------------------------------------------------------
------------------------------------------------------------------
------------------------------------------------------------------
------------------------------------------------------------------
------------------------------------------------------------------
------------------------------------------------------------------
------------------------------------------------------------------
------------------------------------------------------------------
------------------------------------------------------------------
------------------------------------------------------------------
------------------------------------------------------------------
------------------------------------------------------------------
------------------------------------------------------------------
64
EXHIBIT B
Form of Money Market Quote Request
[Date]
To: ▇▇▇▇▇▇ Guaranty Trust Company of New York
(the "Administrative Agent")
From: K N Energy, Inc.
Re: Five-Year Credit Agreement (the "Credit Agreement") dated as of
January 30, 1998 among the Borrower, the Banks listed on the
signature pages thereof and the Administrative Agent
We hereby give notice pursuant to Section 2.3 of the Credit Agreement
that we request Money Market Quotes for the following proposed Money Market
Borrowing(s):
Date of Borrowing: __________________
Principal Amount* Interest Period**
$
Such Money Market Quotes should offer a Money Market [Margin] [Absolute
Rate]. [The applicable base rate is the London Interbank Offered Rate.]
------------
* Amount must be $5,000,000 or a larger multiple of $1,000,000.
** Not less than one month and not more than nine months (LIBOR Auction)
or not less than seven days and not more than 360 days (Absolute Rate Auction),
subject to the provisions of the definition of Interest Period.
Terms used herein have the meanings assigned to them in the Credit Agreement.
K N ENERGY, INC.
By
-----------------------------------
Title:
65
EXHIBIT C
Form of Invitation for Money Market Quotes
To: [Name of Bank]
Re: Invitation for Money Market Quotes to K N Energy, Inc. (the "Borrower")
Pursuant to Section 2.03 of the Five-Year Credit Agreement dated as of
January 30, 1998 among the Borrower, the Banks parties thereto and the
undersigned, as Administrative Agent, we are pleased on behalf of the Borrower
to invite you to submit Money Market Quotes to the Borrower for the following
proposed Money Market Borrowing(s):
Date of Borrowing: __________________
Principal Amount Interest Period
$
Such Money Market Quotes should offer a Money Market [Margin] [Absolute
Rate]. [The applicable base rate is the London Interbank Offered Rate.]
Please respond to this invitation by no later than [2:00 P.M.] [9:30
A.M.] (New York City time) on [date].
▇▇▇▇▇▇ GUARANTY TRUST COMPANY
OF NEW YORK
By
------------------------------------
Authorized Officer
66
EXHIBIT D
Form of Money Market Quote
To: ▇▇▇▇▇▇ Guaranty Trust Company of New York, as Administrative Agent
Re: Money Market Quote to K N Energy, Inc. (the "Borrower")
In response to your invitation on behalf of the Borrower dated
_____________, 19__, we hereby make the following Money Market Quote on the
following terms:
1. Quoting Bank: ________________________________
2. Person to contact at Quoting Bank:
-----------------------------
3. Date of Borrowing: ____________________*
4. We hereby offer to make Money Market Loan(s) in the following
principal amounts, for the following Interest Periods and at the
following rates:
Principal Interest Money Market
----------------
* As specified in the related Invitation.
67
Amount** Period*** [Margin****] [Absolute Rate*****]
$
$
[Provided, that the aggregate principal amount of Money Market Loans
for which the above offers may be accepted shall not exceed
$____________.]**
We understand and agree that the offer(s) set forth above, subject to
the satisfaction of the applicable conditions set forth in the Five-Year Credit
Agreement dated as of January 30, 1998 among the Borrower, the Banks listed on
the signature pages thereof and yourselves, as Administrative Agent, irrevocably
obligates us to make the Money Market Loan(s) for which any offer(s) are
accepted, in whole or in part.
Very truly yours,
[NAME OF BANK]
Dated: By
----------------------------------------
Authorized Officer
------------
** Principal amount bid for each Interest Period may not exceed principal
amount requested. Specify aggregate limitation if the sum of the individual
offers exceeds the amount the Bank is willing to lend. Bids must be made for
$5,000,000 or a larger multiple of $1,000,000.
*** Not less than one month and not more than nine months or not less than seven
days and not more than 360 days, as specified in the related Invitation. No more
than five bids are permitted for each Interest Period.
**** Margin over or under the London Interbank Offered Rate determined for the
applicable Interest Period. Specify percentage (to the nearest 1/10,000th of 1%)
and specify whether "PLUS" or "MINUS".
***** Specify rate of interest per annum (to the nearest 1/10,000th of 1%).
68
EXHIBIT E-1
OPINION OF
SPECIAL COUNSEL FOR THE BORROWER
To the Banks and the Administrative Agent
Referred to Below
c/▇ ▇▇▇▇▇▇ Guaranty Trust Company
of New York, as Administrative Agent
▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Dear Sirs:
We have acted as special counsel for K N Energy, Inc. (the "Borrower")
in connection with the Five-Year Credit Agreement (the "Credit Agreement") dated
as of January 30, 1998 among the Borrower, the banks listed on the signature
pages thereof and ▇▇▇▇▇▇ Guaranty Trust Company of New York, as Administrative
Agent. Terms defined in the Credit Agreement are used herein as therein defined.
This opinion is being rendered to you at the request of our client pursuant to
Section 3.1(c) of the Credit Agreement.
We have examined originals or copies, certified or otherwise identified
to our satisfaction, of such documents, corporate records, certificates of
public officials and other instruments and have conducted such other
investigations of fact and law as we have deemed necessary or advisable for
purposes of this opinion.
Upon the basis of the foregoing, we are of the opinion that:
1. The execution, delivery and performance by the Borrower of the
Credit Agreement and the Notes require no action by or in respect of, or filing
with, any governmental body, agency or official of the State of Texas or the
United States of America (other than filings of the Credit Agreement and the
Notes with the Securities and Exchange Commission pursuant to the reporting
requirements of the Securities and Exchange Act of 1934) and do not contravene,
or constitute a default under, any provision of applicable law or
69
regulation of the State of Texas or the United States of America, or of the
articles of incorporation or by-laws of the Borrower.
2. The Credit Agreement constitutes a valid and binding agreement of
the Borrower and each Note constitutes a valid and binding obligation of the
Borrower, in each case enforceable against the Borrower in accordance with its
terms, except as the same may be limited by bankruptcy, insolvency or similar
laws affecting creditors' rights generally and by general principles of equity.
We are members of the Bar of the State of Texas and the foregoing
opinion is limited to the laws of the State of Texas, the State of New York and
the federal laws of the United States of America. In giving the foregoing
opinion, we express no opinion as to the effect (if any) of any law of any
jurisdiction in which any Bank is located which limits the rate of interest that
such Bank may charge or collect. Insofar as the foregoing opinion involves
matters governed by the laws of the State of Kansas (which matters do not in our
view include the non-contravention opinion in paragraph 1), we have relied,
without independent investigation, upon the opinion of Polsinelli, White,
▇▇▇▇▇▇▇▇ & Shalton, delivered to you pursuant to Section 3.1(c) of the Credit
Agreement.
This opinion is rendered solely to you and any Assignee or Participant
in connection with the above matter. This opinion may not be relied upon by you
or any Assignee or Participant for any other purpose or relied upon by any other
person without our prior written consent.
Very truly yours,
70
EXHIBIT E-2
OPINION OF
KANSAS COUNSEL FOR THE BORROWER
To the Banks and the Administrative Agent
Referred to Below
c/▇ ▇▇▇▇▇▇ Guaranty Trust Company
of New York, as Administrative Agent
▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Dear Sirs:
We have acted as counsel in the State of Kansas for K N Energy, Inc.
(the "Borrower") in connection with the Five-Year Credit Agreement (the "Credit
Agreement") dated as of January 30, 1998 among the Borrower, the banks listed on
the signature pages thereof and ▇▇▇▇▇▇ Guaranty Trust Company of New York, as
Administrative Agent. Terms defined in the Credit Agreement are used herein as
therein defined. This opinion is being rendered to you at the request of our
client pursuant to Section 3.1(c) of the Credit Agreement.
We have examined originals or copies, certified or otherwise identified
to our satisfaction, of such documents, corporate records, certificates of
public officials and other instruments and have conducted such other
investigations of fact and law as we have deemed necessary or advisable for
purposes of this opinion.
71
Upon the basis of the foregoing, we are of the opinion that:
1. The Borrower is a corporation duly incorporated, validly existing
and in good standing under the laws of Kansas, and has all corporate powers
required to carry on its business as now conducted.
2. The execution, delivery and performance by the Borrower of the
Credit Agreement and the Notes are within the Borrower's corporate powers, have
been duly authorized by all necessary corporate action, require no action by or
in respect of, or filing with, any governmental body, agency or official of the
State of Kansas and do not contravene, or constitute a default under, any
provision of applicable law or regulation of the State of Kansas.
We are members of the Bar of the State of Kansas and the foregoing
opinion is limited to the laws of the State of Kansas.
This opinion is rendered solely to you and any Assignee or Participant
in connection with the above matter. This opinion may not be relied upon by you
or any Assignee or Participant for any other purpose or relied upon by any other
person without our prior written consent.
Very truly yours,
72
EXHIBIT E-3
OPINION OF
GENERAL COUNSEL OF THE BORROWER
To the Banks and the Administrative Agent
Referred to Below
c/▇ ▇▇▇▇▇▇ Guaranty Trust Company
of New York, as Administrative Agent
▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Dear Sirs:
I am General Counsel of K N Energy, Inc. (the "Borrower"), and I have
represented the Borrower in connection with the Five-Year Credit Agreement (the
"Credit Agreement") dated as of January 30, 1998 among the Borrower, the banks
listed on the signature pages thereof and ▇▇▇▇▇▇ Guaranty Trust Company of New
York, as Administrative Agent. Terms defined in the Credit Agreement are used
herein as therein defined. This opinion is being rendered to you at the request
of my client pursuant to Section 3.1(c) of the Credit Agreement.
I have examined originals or copies, certified or otherwise identified
to my satisfaction, of such documents, corporate records, certificates of public
officials and other instruments and have conducted such other investigations of
fact and law as I have deemed necessary or advisable for purposes of this
opinion.
73
Upon the basis of the foregoing, I am of the opinion that:
1. The Borrower has all material governmental licenses, authorizations,
consents and approvals required to carry on its business as now conducted.
2. The execution, delivery and performance by the Borrower of the
Credit Agreement and the Notes require no action by or in respect of, or filing
with, any governmental body, agency or official of the State of Colorado or, to
the best of my knowledge, any other jurisdiction (other than filings of the
Credit Agreement and the Notes with the Securities and Exchange Commission
pursuant to the reporting requirements of the Securities Exchange Act of 1934)
and do not contravene, or constitute a default under, any provision of
applicable law or regulation of the State of Colorado or, to the best of my
knowledge, any other jurisdiction or of any agreement, judgment, injunction,
order, decree or other instrument binding upon the Borrower or any of its
Subsidiaries or result in the creation or imposition of any, Lien on any asset
of the Borrower or any of its Subsidiaries.
3. There is no action, suit or proceeding pending against, or to the
best of my knowledge threatened against or affecting, the Borrower or any of its
Subsidiaries before any court or arbitrator or any governmental body, agency or
official, in which there is a reasonable possibility of an adverse decision
which could materially adversely affect the business, consolidated financial
position or consolidated results of operations of the Borrower and its
Consolidated Subsidiaries, considered as a whole, or which in any manner draws
into question the validity of the Credit Agreement or the Notes.
4. Each of the Borrower's corporate Material Subsidiaries is a
corporation validly existing and in good standing under the laws of its
jurisdiction of incorporation, and has all corporate powers and all material
governmental licenses, authorizations, consents and approvals required to carry
on its business as now conducted.
I am a member of the Bar of the State of Colorado and the foregoing
opinion is limited to the laws of the State of Colorado and the General
Corporation Law of the State of Delaware. Insofar as paragraph 2 above addresses
the laws of other jurisdictions, I have relied upon my familiarity with advice
given by counsel admitted to practice in those jurisdictions, in connection with
this and other transactions.
This opinion is rendered solely to you and any Assignee or Participant
in connection with the above matter. This opinion may not be relied upon by you
or any Assignee or Participant for any other purpose or relied upon by any other
person without our prior written consent.
Very truly yours,
▇▇
▇▇▇▇▇▇▇ ▇
▇▇▇▇▇▇▇ ▇▇
▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇, SPECIAL COUNSEL
FOR THE AGENTS
To the Banks and the Administrative Agent
Referred to Below
c/▇ ▇▇▇▇▇▇ Guaranty Trust Company
of New York, as Administrative Agent
▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Dear Sirs:
We have participated in the preparation of the Five-Year Credit
Agreement (the "Credit Agreement") dated as of January 30, 1998 among K N
Energy, Inc., a Kansas corporation (the "Borrower"), the banks listed on the
signature pages thereof (the "Banks") and ▇▇▇▇▇▇ Guaranty Trust Company of New
York, as Administrative Agent (the "Administrative Agent"), and have acted as
special counsel for the Agents for the purpose of rendering this opinion
pursuant to Section 3.1(c) of the Credit Agreement. Terms defined in the Credit
Agreement are used herein as therein defined.
We have examined originals or copies, certified or otherwise identified
to our satisfaction, of such documents, corporate records, certificates of
public officials and other instruments and have conducted such other
investigations of fact and law as we have deemed necessary or advisable for
purposes of this opinion.
Upon the basis of the foregoing, we are of the opinion that the Credit
Agreement constitutes a valid and binding agreement of the Borrower and each
Note constitutes a valid and binding obligation of the Borrower, in each case
enforceable in accordance with its terms, except as the same may be limited by
bankruptcy, insolvency or similar laws affecting creditors' rights generally and
by general principles of equity.
We are members of the Bar of the State of New York and the foregoing
opinion is limited to the laws of the State of New York and the federal laws of
the United States of America. In giving the foregoing opinion, we express no
opinion as to the effect (if any) of any law of any jurisdiction (except the
State of New York) in which any Bank is located which limits the rate of
interest that such Bank may charge or collect. Insofar as the foregoing opinion
involves matters governed by the laws of Kansas, we have relied, without
independent investigation, upon the opinion of Polsinelli, White, ▇▇▇▇▇▇▇▇ &
Shalton, delivered to you pursuant to Section 3.1(c) of the Credit Agreement.
75
This opinion is rendered solely to you in connection with the above
matter. This opinion may not be relied upon by you for any other purpose or
relied upon by any other person without our prior written consent.
Very truly yours,
76
A EXHIBIT G
ASSIGNMENT AND ASSUMPTION AGREEMENT
AGREEMENT dated as of _________, 19__ among [ASSIGNOR] (the
"Assignor"), [ASSIGNEE] (the "Assignee"),
K N ENERGY, INC. (the "Borrower") and ▇▇▇▇▇▇ GUARANTY TRUST COMPANY OF
NEW YORK, as Issuing Bank and Administrative Agent (the "Administrative Agent").
W I T N E S S E T H
WHEREAS, this Assignment and Assumption Agreement (the "Agreement")
relates to the Five-Year Credit Agreement dated as of January 30, 1998 among the
Borrower, the Assignor and the other Banks party thereto, as Banks, and the
Administrative Agent (the "Credit Agreement");
WHEREAS, as provided under the Credit Agreement, the Assignor has a
Commitment to make Loans to the Borrower and participate in Letters of Credit in
an aggregate principal amount at any time outstanding not to exceed
$_________________;
WHEREAS, Committed Loans made to the Borrower by the Assignor under the
Credit Agreement in the aggregate principal amount of $__________ are
outstanding at the date hereof;
WHEREAS, Letters of Credit with a total amount available for drawing
thereunder of $_____________are outstanding at the date hereof; and
WHEREAS, the Assignor proposes to assign to the Assignee all of the
rights of the Assignor under the Credit Agreement in respect of a portion of its
Commitment thereunder in an amount equal to $__________ (the "Assigned Amount"),
together with a corresponding portion of its outstanding Committed Loans and
Letter of Credit Liabilities, and the Assignee proposes to accept assignment of
such rights and assume the corresponding obligations from the Assignor on such
terms;
77
NOW, THEREFORE, in consideration of the foregoing and the mutual
agreements contained herein, the parties hereto agree as follows:
SECTION 1. Definitions. All capitalized terms not otherwise defined
herein shall have the respective meanings set forth in the Credit Agreement.
SECTION 2. Assignment. The Assignor hereby assigns and sells to the
Assignee all of the rights of the Assignor under the Credit Agreement to the
extent of the Assigned Amount, and the Assignee hereby accepts such assignment
from the Assignor and assumes all of the obligations of the Assignor under the
Credit Agreement to the extent of the Assigned Amount, including the purchase
from the Assignor of the corresponding portion of the principal amount of the
Committed Loans made by, and Letter of Credit Liabilities of, the Assignor
outstanding at the date hereof. Upon the execution and delivery hereof by the
Assignor, the Assignee[, the Borrower, the Issuing Bank(s) and the
Administrative Agent] and the payment of the amounts specified in Section 3
required to be paid on the date hereof (i) the Assignee shall, as of the date
hereof, succeed to the rights and be obligated to perform the obligations of a
Bank under the Credit Agreement with a Commitment in an amount equal to the
Assigned Amount, and (ii) the Commitment of the Assignor shall, as of the date
hereof, be reduced by a like amount and the Assignor released from its
obligations under the Credit Agreement to the extent such obligations have been
assumed by the Assignee. The assignment provided for herein shall be without
recourse to the Assignor.
SECTION 3. Payments. As consideration for the assignment and sale
contemplated in Section 2 hereof, the Assignee shall pay to the Assignor on the
date hereof in Federal funds the amount heretofore agreed between them.(*) [It
is understood that commitment and/or facility fees accrued to the date hereof
are for the account of the Assignor and such fees accruing from and including
the date hereof are for the account of the Assignee.] Each of the Assignor and
the Assignee hereby agrees that if it receives any amount under the Credit
Agreement which is for the account of the other party hereto, it shall receive
the same for the account of such other party to the extent of such other party's
interest therein and shall promptly pay the same to such other party.
------------
(*) Amount should combine principal together with accrued interest and breakage
compensation, if any, to be paid by Assignee, net of any portion of any upfront
fee to be paid by the Assignor to the Assignee. It may be preferable in an
appropriate case to specify these amounts generically or by formula rather than
as a fixed sum.
78
SECTION 4. Consent of the Borrower and the Administrative Agent. This
Agreement is conditioned upon the consent of the Borrower, the Administrative
Agent and the Issuing Bank(s) pursuant to Section 9.6(c) of the Credit
Agreement. The execution of this Agreement by the Borrower, the Administrative
Agent and the Issuing Bank(s) is evidence of this consent. Pursuant to Section
9.6(c) the Borrower agrees to execute and deliver a Note payable to the order of
the Assignee to evidence the assignment and assumption provided for herein.
SECTION 5. Non-Reliance on Assignor. The Assignor makes no
representation or warranty in connection with, and shall have no responsibility
with respect to, the solvency, financial condition, or statements of the
Borrower, or the validity and enforceability of the obligations of the Borrower
in respect of the Credit Agreement or any Note or Letter of Credit. The Assignee
acknowledges that it has, independently and without reliance on the Assignor,
and based on such documents and information as it has deemed appropriate, made
its own credit analysis and decision to enter into this Agreement and will
continue to be responsible for making its own independent appraisal of the
business, affairs and financial condition of the Borrower.
SECTION 6. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York.
SECTION 7. Counterparts. This Agreement may be signed in any number of
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.
79
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed and delivered by their duly authorized officers as of the date first
above written.
[ASSIGNOR]
By
--------------------------------------
Title:
[ASSIGNEE]
By
--------------------------------------
Title:
K N ENERGY, INC.
By
--------------------------------------
Title:
▇▇▇▇▇▇ GUARANTY TRUST COMPANY
OF NEW YORK, as Issuing Bank
and as Administrative Agent
By
--------------------------------------
Title: