EXHIBIT 10.1
THIRD AMENDED AND RESTATED
CREDIT AGREEMENT
Dated as of July 26, 2001
by and among
INERGY PROPANE, LLC
as Borrower,
the Lenders referred to herein,
FIRST UNION NATIONAL BANK,
as Administrative Agent
BANK OF OKLAHOMA, N.A.,
as Syndication Agent,
and
FIRSTAR BANK, N.A. OVERLAND PARK,
as Syndication Agent
TABLE OF CONTENTS
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ARTICLE I DEFINITIONS............................................................. 2
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SECTION 1.01. Definitions.......................................... 2
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SECTION 1.02. Other Definitions and Provisions..................... 23
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ARTICLE II THE CREDIT FACILITIES.................................................. 24
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SECTION 2.01. Working Capital Loans................................ 24
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SECTION 2.02. Swingline Loans...................................... 24
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SECTION 2.03. Acquisition Loans.................................... 26
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ARTICLE III LETTER OF CREDIT FACILITY............................................. 26
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SECTION 3.01. L/C Commitment....................................... 26
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SECTION 3.02. Procedure for Issuance of Letters of Credit.......... 27
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SECTION 3.03. Commissions and Other Charges........................ 27
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SECTION 3.04. L/C Participations................................... 28
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SECTION 3.05. Reimbursement Obligation of the Borrower............. 29
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SECTION 3.06. Obligations Absolute................................. 30
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ARTICLE IV GENERAL LOAN PROVISIONS................................................ 30
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SECTION 4.01. Procedure for Advances of Loans...................... 30
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SECTION 4.02. Repayment of Loans................................... 31
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SECTION 4.03. Notes................................................ 33
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SECTION 4.04. Permanent Reduction of the Commitments............... 33
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SECTION 4.05. Termination of Credit Facilities..................... 34
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SECTION 4.06. Interest............................................. 34
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SECTION 4.07. Notice and Manner of Conversion or Continuation of
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Loans................................................ 36
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SECTION 4.08. Fees................................................. 37
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SECTION 4.09. Manner of Payment.................................... 37
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SECTION 4.10. Crediting of Payments and Proceeds................... 37
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SECTION 4.11. Adjustments.......................................... 38
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SECTION 4.12. Nature of Obligations of Lenders Regarding
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Extensions of Credit; Assumption by the
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Administrative Agent................................. 38
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SECTION 4.13. Changed Circumstances; Laws Affecting LIBOR Rate
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Availability, Etc.................................... 39
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SECTION 4.14. Indemnity............................................ 41
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SECTION 4.15. Capital Requirements................................. 41
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SECTION 4.16. Taxes................................................ 41
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SECTION 4.17. Duty to Mitigate; Assignment of Commitments Under
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Certain Circumstances................................ 43
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ARTICLE V CLOSING; CONDITIONS OF CLOSING AND BORROWING.......................... 44
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SECTION 5.01. Closing............................................. 44
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SECTION 5.02. Credit Documents and Conditions Precedent........... 44
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SECTION 5.03. Conditions Precedent to All Extensions of Credit.... 49
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ARTICLE VI REPRESENTATIONS AND WARRANTIES OF THE BORROWER........................ 49
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SECTION 6.01. Representations and Warranties...................... 49
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SECTION 6.02. Survival of Representations and Warranties, Etc..... 54
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ARTICLE VII FINANCIAL INFORMATION AND NOTICES.................................... 54
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SECTION 7.01. Monthly Financial Statements........................ 54
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SECTION 7.02. Notice of Litigation and Other Matters.............. 57
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SECTION 7.03. Accuracy of Information............................. 58
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ARTICLE VIII AFFIRMATIVE COVENANTS............................................... 59
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SECTION 8.01. Existence; Businesses and Properties................ 59
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SECTION 8.02. Insurance........................................... 59
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SECTION 8.03. Payment of Taxes; Etc............................... 59
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SECTION 8.04. Maintenance of Properties and Leases................ 60
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SECTION 8.05. Employee Benefits................................... 60
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SECTION 8.06. Books and Records; Inspection; Audits............... 60
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SECTION 8.07. Compliance with Laws................................ 61
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SECTION 8.08. Use of Proceeds..................................... 61
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SECTION 8.09. Preparation of Environmental Reports................ 61
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SECTION 8.10. Location of Collateral.............................. 61
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SECTION 8.11. Federal Reserve Regulations......................... 62
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SECTION 8.12. Administrative Agent May Perform Obligations;
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Further Assurances.................................. 62
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SECTION 8.13. Landlord Waivers.................................... 62
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SECTION 8.14. Acquisition of Assets and Properties................ 62
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ARTICLE IX FINANCIAL COVENANTS................................................... 63
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SECTION 9.01. Consolidated EBITDA/Consolidated Interest Expense... 63
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SECTION 9.02. Consolidated Leverage Ratio......................... 63
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ARTICLE X NEGATIVE COVENANTS..................................................... 63
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SECTION 10.01. Liens............................................... 63
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SECTION 10.02. Debt................................................ 63
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SECTION 10.03. Restricted Investments.............................. 64
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SECTION 10.04. Structure; Disposition of Assets.................... 64
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SECTION 10.05. Sale-Leasebacks; Subsidiaries; New Business......... 64
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SECTION 10.06. Issuance of Securities.............................. 64
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SECTION 10.07. Conflicting Agreements.............................. 64
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SECTION 10.08. Changes in Accounting Principles; Fiscal Year....... 65
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SECTION 10.09. Transactions With Affiliates........................ 65
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SECTION 10.10. Distributions....................................... 65
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SECTION 10.11. Lease Obligations................................... 65
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SECTION 10.12. Restrictive Agreements.............................. 65
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SECTION 10.13. Put Agreements...................................... 65
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SECTION 10.14. Amendments to Organic Documents..................... 65
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ARTICLE XI DEFAULT AND REMEDIES.................................................. 66
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SECTION 11.01. Events of Default................................... 66
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SECTION 11.02. Remedies............................................ 68
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SECTION 11.03. Rights and Remedies Cumulative; Non-Waiver; Etc..... 70
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ARTICLE XII THE ADMINISTRATIVE AGENT............................................. 71
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SECTION 12.01. Appointment......................................... 71
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SECTION 12.02. Delegation of Duties................................ 71
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SECTION 12.03. Exculpatory Provisions.............................. 71
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SECTION 12.04. Reliance by the Administrative Agent................ 72
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SECTION 12.05. Notice of Default................................... 72
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SECTION 12.06. Non-Reliance on the Administrative Agent and Other
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Lenders............................................. 72
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SECTION 12.07. Indemnification..................................... 73
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SECTION 12.08. The Administrative Agent in Its Individual
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Capacity............................................ 73
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SECTION 12.09. Resignation of the Administrative Agent; Successor
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Administrative Agent................................ 74
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SECTION 12.10. Collateral Matters.................................. 74
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ARTICLE XIII MISCELLANEOUS....................................................... 75
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SECTION 13.01. Notices............................................. 75
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SECTION 13.02. Expenses; Indemnity................................. 76
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SECTION 13.03. Set-off............................................. 77
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SECTION 13.04. Governing Law....................................... 77
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SECTION 13.05. Consent to Jurisdiction............................. 77
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SECTION 13.06. WAIVER OF JURY TRIAL................................ 78
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SECTION 13.07. Reversal of Payments................................ 78
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SECTION 13.08. Injunctive Relief; Punitive Damages................. 78
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SECTION 13.09. Accounting Matters.................................. 78
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SECTION 13.10. Successors and Assigns; Participations.............. 79
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SECTION 13.11. Amendments, Waivers and Consents.................... 82
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SECTION 13.12. Absolute and Unconditional Liability................ 83
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SECTION 13.13. Effective Date; Amended and Restated Credit
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Facility............................................ 83
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SECTION 13.14. Performance of Duties............................... 84
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SECTION 13.15. All Powers Coupled with Interest.................... 84
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SECTION 13.16. Survival of Indemnities............................. 84
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SECTION 13.17. Titles and Captions................................. 84
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SECTION 13.18. Severability of Provisions.......................... 84
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SECTION 13.19. Counterparts........................................ 84
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SECTION 13.20. Term of Agreement................................... 85
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SECTION 13.21. Inconsistencies with Other Documents; Independent
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Effect of Covenants................................. 85
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SECTION 13.22. Mo.Rev.Stat. (S)432.045 Required Notice............. 85
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EXHIBITS
Exhibit A-1 - Form of Acquisition Note
Exhibit A-2 - Form of Working Capital Note
Exhibit A-3 - Form of Swingline Note
Exhibit B - Form of Notice of Borrowing
Exhibit C - Form of Notice of Account Designation
Exhibit D - Form of Notice of Conversion/Continuation
Exhibit E - Form of Officer's Compliance Certificate
Exhibit F - Form of Borrowing Base Certificate
Exhibit G - Form of Applicable Margin Calculation Certificate
Exhibit H - Form of Assignment and Acceptance
Exhibit I-1 - Form of Subsidiary Guaranty Agreement
Exhibit I-2 - Form of Inergy, L.P. Guaranty Agreement
Exhibit J - Form of Security Agreement
Exhibit K - Form of Pledge Agreement
Exhibit L - Form of Opinion of Credit Parties' Counsel
Exhibit M - Form of Intercreditor Agreement
SCHEDULES
Schedule 1.01A - Commitments of Lenders
Schedule 1.01B - Notice and Lending Offices of Lenders
Schedule 3.01 - Existing Letters of Credit
Schedule 6.01(a) - Organization
Schedule 6.01(b) - Ownership
Schedule 6.01(s) - Title to Properties
Schedule 8.10 - Location of Collateral
Schedule 10.02 - Outstanding Debt
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This THIRD AMENDED AND RESTATED CREDIT AGREEMENT (as the same may be
amended, supplemented or otherwise modified from time to time in accordance with
its terms, this "Agreement"), dated as of the 26th day of July, 2001, by and
among the following:
(i) INERGY PROPANE, LLC, a Delaware limited liability company (formerly
known as ▇▇▇▇▇▇▇▇▇ Oil & Propane Company, LLC) (the "Borrower");
(ii) The Lenders who are or may become a party hereto, in their capacity
as Lenders and in such other capacities as reflected on the
signature pages hereto (collectively, the "Lenders"; and each a
"Lender"); and
(iii) FIRST UNION NATIONAL BANK, as Administrative Agent
is an amendment and restatement of the Existing Credit Agreement (as
defined below).
STATEMENT OF PURPOSE
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The Borrower, certain Affiliates (as defined below) of the Borrower and
certain Lenders previously entered into an Amended and Restated Credit Agreement
dated as of October 23, 1998 (the "1998 Credit Agreement"), as amended by (i) a
First Amendment to Amended and Restated Credit Agreement dated as of December
10, 1998, (ii) a Second Amendment to Amended and Restated Credit Agreement dated
as of February 10, 1999, (iii) a Third Amendment to Amended and Restated Credit
Agreement dated as of July 22, 1999, (iv) a Fourth Amendment to Amended and
Restated Credit Agreement dated as of November 15, 1999, and (v) a Fifth
Amendment to Amended and Restated Credit Agreement dated as of May 30, 2000 (the
1998 Credit Agreement, as so amended is hereby referred to as the "Original
Credit Agreement").
The Borrower, certain Affiliates of the Borrower party to the Original
Credit Agreement, and the Lenders party to the Existing Credit Agreement
subsequently amended and restated the Original Credit Agreement in its entirety
pursuant to a Second Amended and Restated Credit Agreement dated as of January
12, 2001 (as amended to date, the "Existing Credit Agreement").
Pursuant to the terms and conditions of a certain Consent Agreement dated
as of the date hereof (the "Consent Agreement"), the Administrative Agent, on
behalf of itself and the Lenders, agreed that (i) Inergy Partners, LLC, a
Delaware limited liability company ("Inergy Partners"), (ii) ▇▇▇▇▇▇ Oil Company
of ▇▇▇▇▇▇▇▇ County, Inc., a North Carolina corporation ("▇▇▇▇▇▇ Oil"), and (iii)
Rolesville Gas and Oil Company, Inc., a North Carolina corporation
("Rolesville"), are no longer required to be parties to the Existing Credit
Agreement.
The Borrower and certain Lenders party to the Existing Credit Agreement
desire to amend and restate the Existing Credit Agreement in its entirety on the
terms and conditions set forth in this Agreement, as of the Effective Date.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged by the parties hereto, such parties
hereby agree that the Existing Credit Agreement is hereby amended and restated,
as of the Effective Date, as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. Definitions.
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The following terms when used in this Agreement shall have the meanings
assigned to them below:
"Account Debtor" means any Person who is or may become obligated in respect
of an Account.
"Accounts" means all accounts (as defined in the UCC), contract rights,
chattel paper, instruments and documents, in which the Borrower or any
Controlled Subsidiary has or acquires an interest on or after the Closing Date.
"Acquisition Commitment" means, (a) as to any Lender, the obligation of
such Lender to make Acquisition Loans to the Borrower hereunder in an aggregate
principal amount at any time outstanding not to exceed the amount so designated
opposite such Lender's name on Schedule 1.01A hereto, as the same may be reduced
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or modified at any time or from time to time pursuant to the terms hereof, and
(b) as to all Lenders, the aggregate commitment of all Lenders to make
Acquisition Loans, as such amount may be reduced at any time from time to time
pursuant to the terms hereof. The Acquisition Commitment of all Lenders on the
Closing Date shall be Seventy Million Dollars ($70,000,000).
"Acquisition Facility" means the loan facility established pursuant to
Section 2.03.
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"Acquisition Loan" means any of the loans made by the Lenders to the
Borrower pursuant to Section 2.03 and all such loans collectively as the context
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requires.
"Acquisition Notes" means the separate Acquisition Notes made by the
Borrower, payable to the order of each Lender, substantially in the form of
Exhibit A-1 hereto, evidencing the Acquisition Facility, and any amendments and
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modifications thereto, any substitutes therefor, and any replacements,
restatements, renewals or extension thereof, in whole or in part; "Acquisition
Note" means any of such Acquisition Notes.
"Administrative Agent" means First Union National Bank, in its capacity as
Administrative Agent hereunder, and any successor thereto appointed pursuant to
Section 12.09.
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"Administrative Agent's Office" means the office of the Administrative
Agent specified in or determined in accordance with the provisions of Section
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13.01(c).
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"Affiliate" means with respect to any Person, any other Person (i) which
owns or otherwise has an interest in five percent or more of any equity interest
of such Person, (ii) five
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percent or more of the equity interests of which such Person (or any member,
shareholder, director, officer, employee or Subsidiary of such Person or any
combination thereof) owns or otherwise has an interest in, or (iii) which,
directly or through one or more intermediaries, is controlled by, controls, or
is under common control with such Person. For purposes of subpart (iii) above,
"control" means the ability, directly or indirectly, to affect the management or
policies of a Person by virtue of an ownership interest, by right of contract or
any other means.
"Aggregate Commitment" means the sum of the Working Capital Commitment and
the Acquisition Commitment, as such amount may be reduced or modified at any
time or from time to time pursuant to the terms hereof. On the Closing Date, the
Aggregate Commitment shall be One Hundred Million Dollars ($100,000,000).
"Agreement" has the meaning set forth in the recitals above.
"Applicable Law" means all applicable provisions of constitutions,
statutes, laws, ordinances, rules, treaties, regulations, permits, licenses,
approvals, interpretations and orders of all Governmental Authorities and all
orders and decrees of all courts and arbitrators.
"Applicable Margin" means, at any date, (i) with respect to Base Rate
Loans, 0.00% per annum, (ii) with respect to Libor Loans, 2.125% per annum, and
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(iii) with respect to the Unused Line Fee, 0.375% per annum; provided, however,
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that if the Consolidated Leverage Ratio as of the last day of the immediately
preceding fiscal quarter falls within any of the ranges set forth in the
Schedule below, then, subject to the delivery to the Administrative Agent by the
Borrower of an Applicable Margin Calculation Certificate demonstrating such
fact, the Applicable Margin for each type of Loan and the Unused Line Fee, as
the case may be, shall be reduced or increased, if such is the case, to the rate
for the same set forth in the Schedule below. Any such adjustment in the
Applicable Margin shall take effect on the third (3rd) Business Day after the
Administrative Agent receives the Applicable Margin Calculation Certificate and
shall remain in effect until the earlier to occur of (a) the next adjustment of
the Applicable Margin made in accordance with the terms of this Agreement, or
(b) the expiration of three months after the date such adjustment in the
Applicable Margin takes effect. Notwithstanding anything herein to the contrary,
no downward adjustment in the Applicable Margin shall take effect or remain in
effect if (1) the Administrative Agent, acting in a commercially reasonable
manner, disputes the accuracy of the calculations set forth in the Applicable
Margin Calculation Certificate (or the accuracy or completeness of the
information contained in the financial statements supporting such calculations),
or (2) any Event of Default exists. The Schedule referred to above is as
follows:
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Consolidated Base Rate
Level Leverage Ratio Loans Libor Rate Loans Unused Line Fee
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I. Less than or equal to
3.0:1.0 0.00% 2.00% 0.375%
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II. Greater than 3.0:1.0 and
less than or equal to
3.5:1.0 0.00% 2.125% 0.375%
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III. Greater than 3.5:1.0 and
less than or equal to
4.0:1.0 0.25% 2.25% 0.500%
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IV. Greater than 4.0:1.0 and
less than or equal to
4.5:1.0 0.50% 2.50% 0.500%
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V. Greater than 4.5:1.0 0.50% 2.75% 0.500%
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"Applicable Margin Calculation Certificate" means, at any time, the
certificate, substantially in the form of Exhibit G hereto, signed by a
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Financial Officer of the Borrower and pursuant to which the Borrower sets forth
its calculations for purposes of determining the Applicable Margin for a
particular time period.
"Application" means an application, in the form specified by the Issuing
Lender from time to time, requesting the Issuing Lender to issue a Letter of
Credit.
"Assignment and Acceptance" has the meaning assigned thereto in Section
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13.10(b)(iii).
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"Available Cash" has the meaning __________________________________________
__________________________________________________________________________.
"Average Quarterly Loan Balance" means the sum of (i) the aggregate
principal amount of all Working Capital Loans outstanding, (ii) the aggregate
principal amount of all Acquisition Loans outstanding, (iii) the aggregate
principal amount of all Swingline Loans outstanding and (iv) the aggregate L/C
Obligations outstanding, in each case outstanding at the end of each day for
each day of the quarter in question and by dividing such sum by the number of
days in such quarter.
"Base Rate" means, at any time, the higher of (a) the Prime Rate or (b) the
Federal Funds Rate plus 0.5%; each change in the Base Rate shall take effect
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simultaneously with the corresponding change or changes in the Prime Rate or the
Federal Funds Rate.
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"Base Rate Loan" means any Loan bearing interest at a rate based upon the
Base Rate as provided in Section 4.06(a).
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"Benefited Lender" has the meaning assigned thereto in Section 4.11.
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"Borrower" has the meanings set forth in the recitals to this Agreement.
"Borrower Pledge Agreement" means the Amended and Restated Pledge Agreement
from the Borrower, as pledgor, to the Administrative Agent, as pledgee, dated
the Closing Date, pursuant to which the Borrower grants to the Administrative
Agent a Lien as security for the Obligations in all of the Borrower's existing
and future equity and other interests in L & L Transportation, Inergy
Transportation and Inergy Sales, together with any amendments, renewals,
restatements, replacements, consolidations or other modifications thereof from
time to time.
"Borrower Security Agreement" means the Amended and Restated Security
Agreement from the Borrower, as debtor, to the Administrative Agent, as secured
party, dated the Closing Date, pursuant to which the Administrative Agent, is
granted a Lien as security for the Obligations on all of the Borrower's existing
and future assets, together with any amendments, renewals, restatements,
replacements, consolidations or other modifications thereof from time to time.
"Borrowing Base" means, at any date, an amount equal to the lesser of:
(i) the sum of (a) $10,000,000, plus (b) an amount equal to the
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Eligible Account Advance Amount at such date, plus (c) Eligible
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Inventory Advance Amount at such date, minus [subtract from the
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sum of (a), (b) and (c)] the sum, at such date, of all amounts
for which the Issuing Lender may be liable pursuant to any
letter of credit issued by the Issuing Lender for the Borrower's
or any Controlled Subsidiary's account; or
(ii) $30,000,000.
"Business Day" means (a) for all purposes other than as set forth in clause
(b) below, any day other than a Saturday, Sunday or legal holiday on which banks
in Charlotte, North Carolina are open for the conduct of their commercial
banking business, and (b) with respect to all notices and determinations in
connection with, and payments of principal and interest on, any LIBOR Rate Loan,
any day that is a Business Day described in clause (a) and that is also a day
for trading by and between banks in Dollar deposits in the London interbank
market.
"Capital Expenditures" means expenditures made and liabilities incurred
that should, in accordance with GAAP, be classified and accounted for as capital
expenditures.
"Capital Lease" means any lease of any property that should, in accordance
with GAAP, be classified and accounted for as a capital lease.
"Capital Stock" means, with respect to any Person, any and all shares,
interests, rights to purchase, warrants, options, participations or other
equivalents of or interests in (however
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designated) equity of such Person, including any preferred interest, any limited
or general partnership interest and any limited liability company membership
interest.
"Cleandown Period" means the period commencing March 1 and ending September
30 during each Fiscal Year.
"Closing Date" means the date of this Agreement or such later Business Day
as the parties hereto shall mutually agree.
"Code" means the Internal Revenue Code of 1986, and the rules and
regulations thereunder, each as amended or supplemented from time to time.
"Collateral" means all personal and real property with respect to which a
Lien is granted to or for the benefit of the Administrative Agent for the
benefit of the Lenders pursuant to the Security Agreements, the Mortgages, the
Pledge Agreements or any other Credit Documents or which otherwise secures the
payment or performance of any Obligation.
"Collateral Agent" has the meaning set forth in the Intercreditor
Agreement.
"Commitment" means, as to any Lender, on a collective basis, such Lender's
Acquisition Commitment and Working Capital Commitment, as set forth opposite
such Lender's name on Schedule 1.01A hereto, as the same may be reduced or
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modified at any time or from time to time pursuant to the terms hereof.
"Commitment Percentage" means, as to any Lender at any time, the ratio of
(a) for Working Capital Loans, L/C Obligations and Swingline Loans, (i) the
amount of the Working Capital Commitment of such Lender to (ii) the Working
Capital Commitment of all of the Lenders; and (b) for Acquisition Loans, (i) the
amount of the Acquisition Commitment of such Lender to (ii) the Acquisition
Commitment of all of the Lenders.
"Consent Agreement" has the meaning set forth in the recitals to this
Agreement.
"Consolidated" means the consolidation of accounts in accordance with GAAP.
"Consolidated EBITDA" means, with respect to the Borrower and its
Consolidated Subsidiaries, for any period, an amount equal to: (i) net income
for such period, plus (ii) amounts deducted in the computation thereof for (a)
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interest expense, (b) federal, state and local income taxes, and (c)
depreciation and amortization, plus or minus, as the case may be, (iii) gains or
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losses from the sale of assets in the ordinary course of business, and plus or
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minus, as the case may be, (iv) extraordinary non-cash gains or losses for such
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period; provided, that for the purposes of determining Consolidated Adjusted
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EBITDA for any period during which a Permitted Acquisition is consummated,
Consolidated Adjusted EBITDA shall be adjusted in a manner reasonably
satisfactory to the Administrative Agent to give effect to the consummation of
such Permitted Acquisition on a pro forma basis, as if such Permitted
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Acquisition occurred on the first day of such period. For the period of October
1, 2000 up to, but not including, the Closing Date, Consolidated EBITDA shall be
calculated with respect to Inergy Partners and its Consolidated Subsidiaries,
rather than with respect to the Borrower and its Consolidated Subsidiaries.
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"Consolidated Interest Expense" means, with respect to the Borrower and its
Consolidated Subsidiaries, for any period, an amount equal to (i) all interest
in respect of Debt (other than the Hoosier Subordinated Debt) accrued during
such period (whether or not actually paid during such period), plus (ii) the net
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amount payable (or minus the net amount receivable) under Hedging Agreements
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accrued during such period (whether or not actually paid or received during such
period) plus on a pro-forma basis, the sum of all interest accrued relating to
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Debt incurred in connection with a Permitted Acquisition, excluding in each case
up front financing fees payable in connection with the consummation of the
transactions contemplated hereby. For the period of October 1, 2000 up to, but
not including, the Closing Date, Consolidated Interest Expense shall be
calculated with respect to Inergy Partners and its Consolidated Subsidiaries,
rather than with respect to the Borrower and its Consolidated Subsidiaries.
"Consolidated Leverage Ratio" means the ratio of (i) Total Funded Debt
(other than Debt under clause (i) of the definition of "Debt"), at such time, to
(ii) Consolidated EBITDA for the four fiscal quarters most recently ended. For
purposes of calculating the Consolidated Leverage Ratio, Total Funded Debt shall
not include any outstanding Working Capital Loans or Swingline Loans if the
Borrower is in compliance with Section 4.02(b).
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"Consolidated Subsidiary" shall mean for any Person, each Subsidiary of
such Person (whether existing on the Closing Date or thereafter created or
acquired) the financial statements of which shall be (or should have been)
consolidated with the financial statements of such Person in accordance with
GAAP.
"Controlled Subsidiary" means a direct or indirect Subsidiary of the
Borrower and with respect to which the Borrower owns not less than fifty-one
percent (51%) of the voting equity interests of such Subsidiary.
"Credit Documents" means, collectively, this Agreement, the Notes, the
Applications, the Security Agreements, the Pledge Agreements, the Mortgages, the
Guaranty Agreements, and any other agreements or documents existing on or after
the Closing Date evidencing, securing or otherwise relating to any of the
transactions described in or contemplated by this Agreement, and any amendments,
renewals, restatements, replacements or other modifications of the foregoing
from time to time.
"Credit Facilities" means the collective reference to the Working Capital
Facility, the Acquisition Facility and the L/C Facility.
"Credit Parties" means, collectively, Inergy, L.P., the Borrower, Inergy
Transportation, L & L Transportation, Inergy Sales and any other direct and
indirect Subsidiary of the Borrower.
"Debt" means, with respect to any Person, without duplication (a) all
obligations of such Person for borrowed money or with respect to deposits or
advances of any kind (including repurchase obligations, but not including
customer deposits), (b) all obligations of such Person evidenced by bonds,
debentures, notes or similar instruments or letters of credit in support of
bonds, notes, debentures or similar instruments, (c) all obligations of such
Person upon which interest charges are customarily paid, (d) all obligations of
such Person under any conditional sale or other title retention agreement
relating to property purchased by such Person, (e) all
7
obligations of such Person issued or assumed as the deferred purchase price of
property or services (including, without duplication, obligations under a non-
compete or similar agreement) to the extent such obligations are reportable
under GAAP, (f) all obligations of such Person as lessee under Capital Leases of
such Person or leases of such Person for which such Person retains tax ownership
of the property subject to a lease, (g) all obligations of others secured by (or
for which the holder of such Debt has an existing right, contingent or
otherwise, to be secured by) any Lien on property or assets owned or acquired by
such Person, whether or not the obligations secured thereby have been assumed,
(h) all Guaranties of such Person, (i) all obligations of such Person with
respect to interest rate protection agreements (including, without limitation,
Hedging Agreements) or foreign currency exchange agreements (valued at the
termination value thereof computed in accordance with a method approved by the
International Swap Dealers Association and agreed to by such Person in the
applicable Hedging Agreement, if any), (j) all obligations of such Person as an
account party in respect of letters of credit (1) securing Debt (other than
letters of credit obtained in the ordinary course of business and consistent
with past practices) or (2) obtained for any purpose not in the ordinary course
of business or not consistent with past practices, (k) all obligations of such
Person in respect of bankers' acceptances and (l) all current liabilities in
respect of unfunded vested benefits under a Pension Plan covered by ERISA;
provided that accrued expenses and accounts payable incurred in the ordinary
--------
course of business shall not constitute Debt.
"Default" means any of the events specified in Section 11.01, which with
-------------
the passage of time, the giving of notice or any other condition, would
constitute an Event of Default.
"Dollars" or "$" means, unless otherwise qualified, dollars in lawful
currency of the United States.
"Effective Date" means the date of satisfaction of all conditions precedent
to the initial Extension of Credit specified in Section 5.02.
------------
"Eligible Account" means an Account arising in the ordinary course of the
Borrower's or a Controlled Subsidiary's business from the sale of goods or the
rendering of services which the Administrative Agent, in its reasonable credit
judgment, deems to be an Eligible Account. To be an Eligible Account, such
Account must be subject to the Administrative Agent's perfected first priority
Lien and no Lien other than a Permitted Lien, and must be evidenced by an
invoice or other documentary evidence reasonably satisfactory to the
Administrative Agent. Without limiting the generality of the foregoing, no
Account shall be an Eligible Account if:
(1) the Account remains unpaid more than ninety (90) days after the
original invoice date (except if the Account Debtor is engaged primarily in
the business of agriculture, in which case the Account remains unpaid after
November 15 of the calendar year in which the Account arose or ninety (90)
days after the invoice date, whichever is later); or
(2) ten percent (10%) or more of the other Accounts from the Account
Debtor are not Eligible Accounts; or
8
(3) the Account Debtor has disputed liability with respect to such
Account, or has made any claim with respect to any other Account due from
such Account Debtor to the Borrower or the applicable Controlled
Subsidiary, or the Account otherwise is or may become subject to any right
of setoff by the Account Debtor, to the extent of any offset, dispute or
claim; or
(4) If the Account Debtor is also a creditor or supplier of the
Borrower, Eligible Accounts shall consist of the lesser of (a) if the
aggregate liabilities of the Borrower and its Controlled Subsidiaries to
such Account Debtor do not exceed $2,000,000, the face amount of the
Accounts of such Account Debtor; and (b) if such liabilities of the
Borrower and its Controlled Subsidiaries to such Account Debtor exceed
$2,000,000, the face amount of the Accounts of such Account Debtor minus
-----
the aggregate liabilities of the Borrower and its Controlled Subsidiaries
to such Account Debtor in excess of $2,000,000; provided, however, the
-------- -------
aggregate amount of Eligible Accounts under this clause (4) shall not
exceed the aggregate Accounts of all Account Debtors who are also a
creditor or a supplier of the Borrower and its Controlled Subsidiaries
minus the aggregate liabilities of the Borrower and its Controlled
-----
Subsidiaries to such Account Debtors in excess of $8,000,000; or
(5) any bankruptcy or other insolvency proceeding has been filed by
or against the Account Debtor; or
(6) the Account arises from a sale to an Account Debtor outside the
United States, unless the sale is on letter of credit, guaranty or
acceptance terms, in each case reasonably acceptable to the Administrative
Agent; or
(7) the Account arises from a sale to an Account Debtor which is not
final, including, without limitation, on a ▇▇▇▇-and-hold, guaranteed sale,
sale-or-return, sale-on-approval, consignment or any other repurchase or
return sis; or
(8) the Administrative Agent believes, in its reasonable credit
judgment, that collection of such Account is insecure or that payment
thereof is doubtful or will be delayed by reason of the Account Debtor's
financial condition; or
(9) the Account Debtor is the United States of America or any state,
or any department, agency, instrumentality or subdivision of the foregoing,
unless the applicable Borrower assigns its right to payment of such Account
to the Administrative Agent, in form and substance reasonably satisfactory
to the Administrative Agent, so as to comply with the Assignment of Claims
Act, as amended (31 U.S.C. (S) 3727 et seq.), or the comparable state
statute, as the case may be; or
(10) the goods giving rise to such Account have not been shipped to
the Account Debtor in accordance with the Account Debtor's instructions in
respect of such goods, or such goods are otherwise nonconforming goods, or
the services giving rise to such Account have not been properly performed
by the Borrower or the applicable Controlled Subsidiary; or
9
(11) the total unpaid Accounts of the Account Debtor exceed a credit
limit determined by the Administrative Agent in its reasonable discretion
(which credit limit may be based upon the extent to which the total unpaid
Accounts of such Account Debtor are excess relative to all other unpaid
Accounts and upon such other customary credit criteria as the
Administrative Agent reasonably deems appropriate), to the extent such
Account exceeds such limit; or
(12) the total unpaid Accounts of the Account Debtor exceed $3,000,000
(or such other amount in excess of $3,000,000 approved by the
Administrative Agent in writing) to the extent such unpaid Accounts exceed
$3,000,000 or such other amount, or
(13) the Account is evidenced by chattel paper or an instrument of any
kind, or has been reduced to judgment; or
(14) the Borrower or the applicable Controlled Subsidiary has made any
agreement with the Account Debtor for any deduction therefrom, except for
discounts or allowances which are made in the ordinary course of the
Borrower's or the applicable Controlled Subsidiary's business for prompt
payment and which discounts or allowances are reflected in the calculation
of the face value of each invoice related to such Account; or
(15) the Account arises out of a sale by the Borrower or a Controlled
Subsidiary to any Affiliate of the Borrower or a Controlled Subsidiary or
to a Person controlled by an Affiliate of the Borrower or a Controlled
Subsidiary.
"Eligible Account Advance Amount" means, at any date, an amount equal to
eighty-five percent (85%) of the net face amount of all Eligible Accounts
outstanding at such date.
"Eligible Assignee" means, with respect to any assignment of the rights,
interest and obligations of a Lender hereunder, a Person that is at the time of
such assignment (a) a commercial bank organized or licensed under the laws of
the United States or any state thereof, having combined capital and surplus in
excess of $500,000,000, (b) a commercial bank organized under the laws of any
other country that is a member of the Organization of Economic Cooperation and
Development, or a political subdivision of any such country, having combined
capital and surplus in excess of $500,000,000, (c) a finance company, insurance
company or other financial institution which in the ordinary course of business
extends credit of the type extended hereunder and that has total assets in
excess of $1,000,000,000, (d) a Lender hereunder (whether as an original party
to this Agreement or as the assignee of another Lender), (e) an Affiliate or
Subsidiary of a Lender (whether as an original party to this Agreement or as the
assignee of another Lender), hereunder that does not otherwise qualify as an
Eligible Assignee provided such Lender continues to be obligated under this
Agreement, (f) the successor (whether by transfer of assets, merger or
otherwise) to all or substantially all of the commercial lending business of the
assigning Lender, or (g) any other Person that has been approved in writing as
an Eligible Assignee by the Administrative Agent and, if no Default or Event of
Default exists and is continuing, by the Borrower.
10
"Eligible Inventory" means such inventory of the Borrower and its
Controlled Subsidiaries which the Administrative Agent, in the exercise of its
reasonable credit judgment, deems to be Eligible Inventory. Without limiting the
generality of the foregoing, no inventory shall be Eligible Inventory unless, in
the Administrative Agent's reasonable determination, it (i) is in good, new and
saleable condition, (ii) is not obsolete or unmerchantable, (iii) meets all
standards imposed by any governmental agency or authority, (iv) conforms in all
respects to the warranties and representations set forth in this Agreement and
the Security Agreements, (v) is at all times subject to the Administrative
Agent's duly perfected, first priority Lien and no other Lien other than
Permitted Liens, and (vi) is situated at a location in compliance with Section
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8.10 hereof.
----
"Eligible Inventory Advance Amount" means, at any date, the lesser of (i)
an amount equal to the product of (a) the Eligible Inventory Advance Rate, times
-----
(b) the aggregate amount of the Eligible Inventory (calculated on the lower of
cost or market, on a first-in, first-out basis) at such time, or (ii)
$15,000,000.
"Eligible Inventory Advance Rate" means, with respect to Eligible Inventory
consisting of propane, fuel oil, diesel oil, kerosene or gasoline, eighty
percent (80%).
"Environmental Laws" means any and all federal, state and local laws,
statutes, ordinances, rules, regulations, permits, licenses, approvals,
interpretations and orders of courts or Governmental Authorities, relating to
the protection of human health (including, but not limited to employee health
and safety) or the environment, including, but not limited to, requirements
pertaining to the manufacture, processing, distribution, use, treatment,
storage, disposal, transportation, handling, reporting, licensing, permitting,
investigation or remediation of Hazardous Materials.
"ERISA" means the Employee Retirement Income Security Act of 1974, and the
rules and regulations promulgated from time to time thereunder, each as amended
or modified from time to time.
"ERISA Affiliate" means any Person who together with the Borrower is
treated as a single employer within the meaning of Section 414(b), (c), (m) or
(o) of the Code or Section 4001(b) of ERISA.
"Eurodollar Reserve Percentage" means, for any day, the percentage
(expressed as a decimal and rounded upwards, if necessary, to the next higher
1/100th of 1%) which is in effect for such day as prescribed by the Federal
Reserve Board (or any successor) for determining the maximum reserve requirement
(including without limitation any basic, supplemental or emergency reserves) in
respect of Eurocurrency liabilities or any similar category of liabilities for a
member bank of the Federal Reserve System in New York City.
"Event of Default" means any of the events specified in Section 11.01;
-------------
provided that any requirement for passage of time, giving of notice, or any
--------
other condition, has been satisfied.
"Existing Credit Agreement" has the meaning set forth in the recitals to
this Agreement.
11
"Existing Letters of Credit" means the letters of credit set forth on
Schedule 3.01 hereto and deemed issued under Article III.
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"Expansion Capital Expenditures" means Capital Expenditures made for the
purpose of generating incremental net cash flow, including, without limitation,
the purchase of customer storage tanks.
"Extensions of Credit" means, as to any Lender at any time, an amount equal
to the sum of (a) the aggregate principal amount of all Working Capital Loans
made by such Lender then outstanding, (b) the aggregate principal amount of all
Acquisition Loans made by such Lender then outstanding, (c) such Lender's
Commitment Percentage of the L/C Obligations then outstanding and (d) such
Lender's Commitment Percentage of the Swingline Loans then outstanding.
"FDIC" means the Federal Deposit Insurance Corporation, or any successor
thereto.
"Federal Funds Rate" means, the rate per annum (rounded upwards, if
necessary, to the next higher 1/100th of 1%) representing the daily effective
federal funds rate as quoted by the Administrative Agent and confirmed in
Federal Reserve Board Statistical Release H.15 (519) or any successor or
substitute publication selected by the Administrative Agent. If, for any reason,
such rate is not available, then "Federal Funds Rate" means a daily rate which
is determined, in the opinion of the Administrative Agent, to be the rate at
which federal funds are being offered for sale in the national federal funds
market at 9:00 a.m. (Charlotte time). Rates for weekends or holidays shall be
the same as the rate for the most immediate preceding Business Day.
"Financial Officer" means, as to any Person, the president, the chief
financial officer or the controller of such Person.
"First Union" means First Union National Bank, a national banking
association, and its successors.
"Fiscal Year" means the 52-week fiscal year of any Person ending September
30 of each calendar year.
"GAAP" means generally accepted accounting principles, as recognized by the
American Institute of Certified Public Accountants and the Financial Accounting
Standards Board, consistently applied and maintained on a consistent basis for
the Borrower and its Consolidated Subsidiaries throughout the period indicated
and consistent with the prior financial practice of the Borrower and its
Consolidated Subsidiaries.
"Governmental Approvals" means all authorizations, consents, approvals,
licenses and exemptions of, registrations and filings with, and reports to, all
Governmental Authorities.
"Governmental Authority" means any nation, province, state or political
subdivision thereof, and any government or any Person exercising executive,
legislative, regulatory or administrative functions of or pertaining to
government, and any corporation or other entity owned or controlled, through
stock or capital ownership or otherwise, by any of the foregoing.
12
"Guaranty" of or by any Person means any obligation, contingent or
otherwise, of such Person guaranteeing or having the economic effect of
guaranteeing any Debt of any other Person (the "primary obligor") (excluding
endorsements of checks for collection or deposit in the ordinary course of
business) in any manner, whether directly or indirectly, and including any
obligation of such Person, direct or indirect, (i) to purchase or pay (or
advance or supply funds for the purchase or payment of) such Debt or to purchase
(or to advance or supply funds for the purchase of) any security for the payment
of such Debt, (ii) to purchase property, securities or services for the purpose
of assuring the owner of such Debt of the payment of such Debt or (iii) to
maintain working capital, equity capital or other financial statement condition
or liquidity of the primary obligor so as to enable the primary obligor to pay
such Debt.
"Guaranty Agreements" means, collectively, (i) the Subsidiary Guaranty
Agreements in substantially the form of Exhibit I-1 hereto, (ii) the Inergy,
-----------
L.P. Guaranty Agreement in substantially the form of Exhibit I-2 hereto, and
-----------
(iii) all other guaranty agreements in favor of the Administrative Agent
executed in connection with Permitted Acquisitions.
"Hedging Agreement" means any agreement with respect to an interest rate
swap, collar, cap, floor or a forward rate agreement or other agreement
regarding the hedging of interest rate risk exposure executed in connection with
hedging the interest rate exposure of the Borrower under this Agreement, and any
confirming letter executed pursuant to such hedging agreement, all as amended,
restated or otherwise modified.
"Hoosier Subordinated Debt" means the Debt evidenced by, collectively, (i)
that certain Subordinated Debenture dated as of January 12, 2001, payable by
Inergy Propane to L&L Leasing, Inc., an Indiana corporation, in the amount of
$1,400,000; (ii) that certain Subordinated Debenture dated as of January 12,
2001, payable by Inergy Propane to Domex, Inc., an Indiana corporation, in the
amount of $650,000; and (iii) that certain Subordinated Debenture dated as of
January 12, 2001, payable by Inergy Propane to Investors 300, Inc., an Indiana
corporation, in the amount of $2,950,000.
"Inergy GP" means Inergy GP, LLC, a Delaware limited liability company.
"Inergy Holdings" means Inergy Holdings, LLC, a Delaware limited liability
company.
"Inergy, L.P." means Inergy, L.P., a Delaware limited partnership.
"Inergy, L.P. Guaranty Agreement" means the Guaranty executed by Inergy,
L.P. in favor of the Administrative Agent, dated the Closing Date, together with
any amendments, renewals, restatements, replacements, consolidations or other
modifications thereof from time to time.
"Inergy, L.P. Pledge Agreement" means a Pledge Agreement from Inergy, L.P.,
as pledgor, to the Administrative Agent, as pledgee, dated the Closing Date,
pursuant to which Inergy, L.P. grants to the Administrative Agent a Lien as
security for the payment and performance of all obligations under the Inergy,
L.P. Guaranty Agreement on all of Inergy L.P.'s existing and future equity and
other interests in the Borrower, together with any amendments, renewals,
restatements, replacements, consolidations or other modifications thereof from
time to time.
13
"Inergy Partners" has the meaning set forth in the recitals to this
Agreement.
"Inergy Sales" means Inergy Sales & Service, Inc., a Delaware corporation.
"Inergy Transportation" means Inergy Transportation, LLC, a Delaware
limited liability company.
"Intercreditor Agreement" means an intercreditor agreement among the
Collateral Agent, the Administrative Agent, on behalf of itself and the Lenders,
and the holders of the Private Placement Debt, in substantially the form of
Exhibit M hereto (with such changes and modifications as are approved by the
---------
Administrative Agent), pursuant to which the Obligations and the Private
Placement Debt shall rank pari passu with respect to payments and with respect
to liens and security interests in the Collateral.
"Interest Period" has the meaning assigned thereto in Section 4.06(b).
--------------
"Investment" means, as applied to any Person, any direct or indirect
purchase or other acquisition by such Person of stock or other securities of any
other Person, or any direct or indirect loan, advance or capital contribution by
such Person to any other Person and any other item which would be classified as
an "investment" on a balance sheet of such Person prepared in accordance with
GAAP, including without limitation any direct or indirect contribution by such
Person of property or assets to a joint venture, partnership or other business
entity in which such Person retains an interest (it being understood that a
direct or indirect purchase or other acquisition by such Person of assets of any
other Person (other than stock or other securities) shall not constitute an
"Investment" for purposes of this Agreement).
"ISP 98" means the International Standby Practices (1998 Revision,
effective January 1, 1999), International Chamber of Commerce Publication No.
590.
"Issuing Lender" means First Union, in its capacity as issuer of any Letter
of Credit, or any successor thereto.
"L & L Transportation" means L & L Transportation, LLC, a Delaware limited
liability company.
"L/C Commitment" means the lesser of (a) Seven Million Dollars
($7,000,000), (b) the Borrowing Base and (c) the Working Capital Commitment.
"L/C Facility" means the letter of credit facility established pursuant to
Article III.
"L/C Obligations" means at any time, an amount equal to the sum of (a) the
aggregate undrawn and unexpired amount of the then outstanding Letters of Credit
and (b) the aggregate amount of drawings under Letters of Credit which have not
then been reimbursed pursuant to Section 3.05.
------------
"L/C Participants" means the collective reference to all the Lenders other
than the Issuing Lender.
14
"Lender" means each Person executing this Agreement as a Lender (including,
without limitation, the Issuing Lender and the Swingline Lender unless the
context otherwise requires) set forth on the signature pages hereto and each
Person that hereafter becomes a party to this Agreement as a Lender pursuant to
Section 13.10.
-------------
"Lending Office" means, with respect to any Lender, the office of such
Lender maintaining such Lender's Commitment Percentage of the Loans as set forth
on Schedule 1.01B hereto.
---------------
"Letters of Credit" has the meaning assigned thereto in Section 3.01.
------------
"LIBOR" means the rate of interest per annum determined on the basis of the
rate for deposits in Dollars in minimum amounts of at least $2,000,000 for a
period equal to the Interest Period selected which appears on the Dow ▇▇▇▇▇
Market Screen 3750 at approximately 11:00 a.m. London time, two (2) Business
Days prior to the first day of the applicable Interest Period (rounded upward,
if necessary, to the nearest one-sixteenth of one percent (1/16%)). If, for any
reason, such rate does not appear on Dow ▇▇▇▇▇ Market Screen 3750, then "LIBOR"
shall be determined by the Administrative Agent to be the arithmetic average of
the rate per annum at which deposits in Dollars in minimum amounts of at least
$2,000,000 would be offered by first class banks in the London interbank market
to the Administrative Agent at approximately 11:00 a.m. London time, two (2)
Business Days prior to the first day of the applicable Interest Period for
settlement in immediately available funds by leading banks in the London
interbank market for a period equal to the Interest Period selected. Each
calculation by the Administrative Agent of LIBOR shall be conclusive and binding
for all purposes, absent manifest error.
"LIBOR Rate" means a rate per annum (rounded upwards, if necessary, to the
next higher 1/100th of 1%) determined by the Administrative Agent pursuant to
the following formula:
LIBOR Rate = LIBOR
--------------------
1.00-Eurodollar Reserve Percentage
"LIBOR Rate Loan" means any Loan bearing interest at a rate based upon the
LIBOR Rate as provided in Section 4.06(a).
---------------
"Lien" means any mortgage, deed of trust, pledge security interest,
hypothecation, assignment, deposit arrangement, encumbrance, lien (statutory or
other), or preference, priority, or other security agreement or preferential
arrangement, charge or encumbrance of any kind or nature whatsoever (including,
without limitation, any conditional sale or other title retention agreement, any
financing lease having substantially the same economic effect as any of the
foregoing, and the filing of any financing statement under the UCC or comparable
law of any jurisdiction to evidence any of the foregoing).
"Loan" means any Working Capital Loan, Acquisition Loan or Swingline Loan
made to the Borrower pursuant to Article II; "Loans" means the collective
reference thereto.
"Material Adverse Effect" means (a) a materially adverse effect on the
business, assets, operations, prospects or financial condition of Inergy, L.P.
and its Subsidiaries, taken as a whole,
15
or the Borrower and its Subsidiaries, taken as a whole, (b) any material
impairment of the ability of Inergy, L.P., the Borrower or any Subsidiary of the
Borrower to perform any of its respective Obligations under any Credit Document
or (c) any material impairment of the rights of, or benefits available to, the
Lenders or the Administrative Agent under any of the Credit Documents.
"Mortgages" means, collectively, (i) all of the deeds to secure debt,
mortgages and deeds of trust dated January 12, 2001, executed by the Borrower in
favor of the Administrative Agent in connection with the Existing Credit
Agreement, relating to each of the real properties owned by the Borrower on the
date thereof, as such deeds to secure debt, mortgages and deeds of trust have
been amended pursuant to first amendments to deeds to secure debt, first
amendments to mortgages and first amendments to deeds of trust, as the case may
be, dated as of the Closing Date, between the Borrower, the Administrative Agent
and the respective trustee thereunder, if applicable, (ii) all of the deeds to
secure debt, mortgages and deeds of trust executed by the Borrower or any of its
Subsidiaries in favor of the Administrative Agent in connection with Permitted
Acquisitions or pursuant to Section 10.03(b), and (iii) any other assignments,
----------------
amendments, renewals, restatements, replacements, consolidations or other
modifications from time to time of any of the foregoing.
"New Inergy Propane, LLC" means New Inergy Propane, LLC, a Delaware limited
liability company.
"1998 Credit Agreement" has the meaning set forth in the recitals to this
Agreement.
"Notes" means the collective reference to the Working Capital Notes, the
Acquisition Notes and the Swingline Note; "Note" means any of such Notes.
"Notice of Account Designation" has the meaning assigned thereto in Section
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4.01(b).
-------
"Notice of Borrowing" has the meaning assigned thereto in Section 4.01(a).
---------------
"Notice of Conversion/Continuation" has the meaning assigned thereto in
Section 4.07.
------------
"Obligations" means, in each case, whether now in existence or hereafter
arising: (a) the principal of and interest on (including interest accruing after
the filing of any bankruptcy or similar petition) the Loans, (b) the L/C
Obligations, (c) all payment and other obligations owing by the Borrower to any
Lender or the Administrative Agent under any Hedging Agreement to which a Lender
is a party (or any Affiliate of a Lender) which is permitted under this
Agreement and (d) all other fees and commissions (including attorney's fees),
charges, indebtedness, loans, liabilities, financial accommodations,
obligations, covenants and duties owing by any Credit Party to the Lenders or
the Administrative Agent, in each case under or in respect of this Agreement,
any Note, any Letter of Credit or any of the other Credit Documents of every
kind, nature and description, direct or indirect, absolute or contingent, due or
to become due, contractual or tortious, liquidated or unliquidated, and whether
or not evidenced by any note, and whether or not for the payment of money under
or in respect of this Agreement, any Note, any Letter of Credit or any of the
other Credit Documents.
"Officer's Compliance Certificate" has the meaning assigned thereto in
Section 7.02.
------------
16
"Organic Documents" means, relative to any Credit Party, its partnership
agreement, limited liability company agreement, certificate of incorporation,
certificate of formation, its by-laws or operating agreement and all shareholder
agreements, voting trusts and similar arrangements applicable to any of its
authorized shares of Capital Stock or other equity interests.
"Original Credit Agreement" has the meaning set forth in the recitals to
this Agreement.
"Other Taxes" has the meaning assigned thereto in Section 4.16(b).
---------------
"Permitted Acquisition" means an acquisition (or series of related
acquisitions) by the Borrower or any Subsidiary Guarantor of all or any part of
the assets of another Person (such assets being referred to herein as the
"Target Assets") or of at least 51% of the voting equity interests of another
Person (such Person being referred to herein as the "Target") in each case made
in compliance with all of the following terms and conditions:
(1) the Target is in, or the Target Assets are employed in, the same
line of business as the Borrower;
(2) in the case of an equity acquisition the Controlled Subsidiary is
a Target of the Borrower (or, in the case of an equity acquisition in the
form of a merger, (a) the Target is merged with and into the Borrower or a
Controlled Subsidiary, with the Borrower or such Controlled Subsidiary, as
the case may be, being the surviving entity, or (b) the Target is merged
with and into a Controlled Subsidiary with the Target being the surviving
entity, provided that such surviving entity qualifies as a Controlled
Subsidiary);
(3) no Default or Event of Default exists at the time of the
acquisition or would result therefrom;
(4) the purchase price (including assumed Debt) of any Target or
Target Assets shall not exceed $15,000,000, and (ii) the aggregate purchase
price (including assumed Debt) of all Targets and Target Assets shall not
exceed $30,000,000 in any Fiscal Year.
(5) upon the consummation of the acquisition, the Administrative
Agent shall have (or shall have received, as the case may be):
(i) in the case of an asset acquisition, a Lien on all Target Assets
subject to no other Lien other than Permitted Liens (and, in
connection therewith, the Borrower shall have submitted to the
Administrative Agent for its approval a revised Schedule 8.10 to
-------------
this Agreement reflecting the location of the Collateral,
inclusive of Target Assets),
(ii) in the case of an equity acquisition, (i) a Guaranty from the
Target in form and substance satisfactory to the Administrative
Agent, pursuant to which such Target guarantees, in favor of the
Administrative Agent, the payment and performance of all
Obligations, (ii) a Lien on all existing and future assets of the
Target, subject to no other Lien other than Permitted Liens,
17
(iii) a Lien on all of the existing and future equity interests
in the Target, subject to no other Lien other than Permitted
Liens, and (iv) the Borrower shall have submitted to the
Administrative Agent for its approval a revised Schedule 6.01(b)
---------------
to this Agreement reflecting the ownership structure of the
Borrower and its Subsidiaries,
(iii) if any Target Assets (or any assets of the Target) consist of
real property, in each case at no expense to the Administrative
Agent, (i) title insurance and endorsements with respect to such
real property in form, terms and scope, satisfactory to the
Administrative Agent, (ii) a survey of such real property,
satisfactory to the Administrative Agent, (iii) if such property
is owned in fee, a mortgage, deed of trust or deed to secure
debt, as applicable, satisfactory to the Administrative Agent and
granting the Administrative Agent a Lien on such fee interest,
and (iv) if such property is leased, a landlord's waiver from
each owner thereof, satisfactory to the Administrative Agent, and
(iv) such UCC financing statements, loan and security agreements and
other documents (including, without limitation, opinions of
counsel to the Borrower and the Target regarding, among other
things, the authority of the Target to guarantee the Obligations
and to grant Liens) as the Administrative Agent may reasonably
request in connection with the conditions set forth in this
subpart (5);
(6) the Borrower shall have paid all reasonable costs and expenses
incurred by the Administrative Agent and its counsel in connection with
such acquisition, including, without limitation, all such costs and
expenses incurred to satisfy the conditions set forth in subpart (5) above;
and
(7) the Administrative Agent shall have received such other
assurances and documentation as the Administrative Agent may reasonably
request from time to time in connection with the acquisition and the
conditions set forth above.
"Permitted Debt" means any of the following:
(1) Debt under this Agreement (including, Guaranties of Debt under
this Agreement) and Debt under the Existing Credit Agreement on or prior to
the Effective Date;
(2) Debt in an aggregate principal amount not to exceed $2,000,000 at
any time outstanding which is subordinated to the Obligations pursuant to
the terms of a subordination agreement satisfactory to the Administrative
Agent and the Required Lenders in their sole discretion;
(3) Debt of the Borrower or any Subsidiary Guarantor to any other
Subsidiary Guarantor;
18
(4) Debt other than Debt described in subparts (1) through (3) above,
provided that the aggregate outstanding principal amount of such Debt (with
respect to all Credit Parties) does not exceed $2,000,000 at any time;
(5) Debt of the type described in clause (i) of the definition "Debt"
provided such Debt is incurred in connection with interest rate protection
agreements (including, Hedging Agreements) covering the floating rate
portion of the Obligations under this Agreement;
(6) Other Debt in existence on the Closing Date and set forth on
Schedule 10.02 hereto;
--------------
(7) Permitted Private Placement Debt and Guaranties of Permitted
Placement Debt; and
(8) Other Debt approved in advance by the Administrative Agent and
the Required Lenders in writing.
"Permitted Liens" means any of the following:
(1) Liens for taxes, assessments or governmental charges not
delinquent or being contested in good faith and by appropriate proceedings
and for which adequate reserves in accordance with GAAP are maintained on
the Borrower's books;
(2) Liens arising out of deposits in connection with workers'
compensation, unemployment insurance, old age pensions or other social
security or retirement benefits legislation;
(3) deposits or pledges to secure bids, tenders, contracts (other
than contracts for the payment of money), leases, statutory obligations,
surety and appeal bonds, and other obligations of like nature arising in
the ordinary course of the Borrower's business;
(4) Liens imposed by law, such as mechanics', workers',
materialmen's, carriers' or other like liens (excluding, however, any
statutory or other Lien in favor of a landlord under a written or oral
lease) arising in the ordinary course of the Borrower's business which
secure the payment of obligations which are not past due or which are being
diligently contested in good faith by appropriate proceedings and for which
adequate reserves in accordance with GAAP are maintained on the Borrower's
books;
(5) rights of way, zoning restrictions, easements and similar
encumbrances affecting the Borrower's real property which do not materially
interfere with the use of such property;
(6) Liens in favor of the Administrative Agent;
(7) Liens in favor of the Collateral Agent securing Permitted Private
Placement Debt, (i) which are pari passu with the Liens in favor of the
Administrative
19
Agent securing the Obligations, and (ii) which are subject to the
Intercreditor Agreement; and
(8) purchase money security interests for the purchase of equipment to
be used in the Borrower's business, encumbering only the equipment so
purchased, and which secures only the purchase-money Debt incurred to
acquire the equipment so purchased and which Debt qualifies as Permitted
Debt.
"Permitted Private Placement Debt" means obligations of the Borrower to
lenders or other Persons pursuant to a private placement; provided, (i) the
--------
principal amount of such obligations does not exceed $70,000,000; (ii) such
obligations are incurred in a single transaction within a period of twelve (12)
months from the Closing Date; (iii) such obligations are not secured by any
other assets (real or personal) of any Person not securing the Obligations; (iv)
such obligations are not guaranteed by any Person other than Persons
guaranteeing the Obligations; (v) such Obligations shall not require or permit
any principal payments to be made on or prior to December 31, 2005 and (vi) such
obligations are subject to the Intercreditor Agreement.
"Person" means an individual, corporation, limited liability company,
partnership, association, trust, business trust, joint venture, joint stock
company, pool, syndicate, sole proprietorship, unincorporated organization,
Governmental Authority or any other form of entity or group thereof.
"Plan" means an employee benefit plan (as defined in Section 3(3) of ERISA)
maintained for employees of the Borrower.
"Pledge Agreements" means, collectively, (i) the Subsidiary Pledge
Agreement; (ii) the Borrower Pledge Agreement and (iii) the Inergy, L.P. Pledge
Agreement; and (iv) any other pledge agreement entered into thereafter from any
other Person holding an equity or other interest in any of the Credit Parties
(other than Inergy, L.P.), any Target or any other direct or indirect Subsidiary
of the Borrower, as pledgor, to the Administrative Agent, as pledgee, securing
all or any part of the Obligations or the payment and performance of all or any
portion of the obligations under the applicable Guaranty Agreements each in
substantially the form of Exhibit K hereto.
---------
"Prime Rate" means, at any time, the rate of interest per annum publicly
announced from time to time by First Union as its prime rate. Each change in
the Prime Rate shall be effective as of the opening of business on the day such
change in the Prime Rate occurs. The parties hereto acknowledge that the rate
announced publicly by First Union as its Prime Rate is an index or base rate and
shall not necessarily be its lowest or best rate charged to its customers or
other banks.
"Register" has the meaning assigned thereto in Section 13.10(d).
---------------
"Reimbursement Obligation" means the obligation of the Borrower to
reimburse the Issuing Lender pursuant to Section 3.05 for amounts drawn under
------------
Letters of Credit.
20
"Required Lenders" means, at any date, the Administrative Agent and any
combination of Lenders whose Commitments aggregate at least 66-2/3% of the
Aggregate Commitment or, if the Credit Facilities have been terminated pursuant
to the terms hereof, the Administrative Agent and any combination of Lenders
holding at least 66-2/3% of the aggregate Extensions of Credit.
"Restructuring" means the restructuring of the capital and ownership
structure of the Credit Parties, in connection with the issuance by Inergy, L.P.
of common units of Capital Stock to the public, (i) as more fully described in
the Form S-1 Registration Statement (Registration No. 333-56976) of Inergy, L.P.
filed with, and declared effective by, the Securities and Exchange Commission,
and (ii) as approved by the Administrative Agent.
"Rolesville" has the meaning set forth in the recitals to this Agreement.
"Security Agreements" means, collectively, (i) each of the Subsidiary
Security Agreements, (ii) the Borrower Security Agreement, and (iii) all other
security agreements executed by the Borrower or any of its Subsidiaries in favor
of the Administrative Agent in connection with Permitted Acquisitions or
pursuant to Section 10.03(b), each in substantially the form of Exhibit J
---------------- ---------
hereto.
"Solvent" means, with respect to any Person, that such Person (a) has
capital sufficient to carry on its business and transactions and all business
and transactions in which it is about to engage and is able to pay its debts as
they mature, (b) owns property having a value, both at fair valuation and at
present fair saleable value, greater than the amount required to pay its
probable liabilities (including contingencies), and (c) does not believe that it
will incur debts or liabilities beyond its ability to pay such debts or
liabilities as they mature.
"Subsidiary" means as to any Person, any corporation, partnership, limited
liability company or other entity of which more than fifty percent (50%) of the
outstanding Capital Stock or other ownership interests having ordinary voting
power to elect a majority of the board of directors or other managers of such
corporation, partnership, limited liability company or other entity is at the
time, directly or indirectly, owned by or the management is otherwise controlled
by such Person (irrespective of whether, at the time, Capital Stock or other
ownership interests of any other class or classes of such corporation,
partnership, limited liability company or other entity shall have or might have
voting power by reason of the happening of any contingency). Unless otherwise
qualified references to "Subsidiary" or "Subsidiaries" herein shall refer to
---------- ------------
those of the Borrower.
"Subsidiary Guaranty Agreements" means, collectively, (i) each Amended and
Restated Guaranty executed by L & L Transportation, and Inergy Transportation,
respectively, in favor of the Administrative Agent, dated on or about the
Closing Date, (ii) the Guaranty Agreement executed by Inergy Sales in favor of
Administrative Agent, dated on or about the Closing Date and (iii) any
amendments, renewals, restatements, replacements, consolidations or other
modifications thereof from time to time.
"Subsidiary Guarantor" means, collectively, (i) L & L Transportation,
Inergy Transportation and Inergy Sales and (ii) any Target that executes and
delivers a guaranty pursuant to clause (5)(ii) of the definition of "Permitted
Acquisition".
21
"Subsidiary Pledge Agreement" means, collectively, the Pledge Agreement
from L & L Transportation, as pledgor, to the Administrative Agent, as pledgee,
dated the Closing Date, pursuant to which L & L Transportation grants to the
Administrative Agent a Lien as security for the payment and performance of all
obligations under the applicable Subsidiary Guaranty Agreement executed by L & L
Transportation in all of its existing and future equity and other interests in
Inergy Sales, together with and any amendments, renewals, restatements,
replacements, consolidations or other modifications thereof from time to time.
"Subsidiary Security Agreements" means, collectively, (i) an Amended and
Restated Security Agreement from L & L Transportation, as debtor, to the
Administrative Agent, as secured party, dated the Closing Date, pursuant to
which the Administrative Agent is granted a Lien, as security for the payment
and performance of all obligations under the applicable Subsidiary Guaranty
Agreement, on all of L & L Transportation's existing and future assets; (ii) an
Amended and Restated Security Agreement from Inergy Transportation, as debtor,
to the Administrative Agent, as secured party, dated the Closing Date, pursuant
to which the Administrative Agent is granted a Lien as security for the payment
and performance of all obligations under the applicable Subsidiary Guaranty
Agreement, on all of Inergy Transportation's existing and future assets; (iii) a
Security Agreement from Inergy Sales, as debtor, to the Administrative Agent, as
secured party, dated the Closing Date, pursuant to which the Administrative
Agent is granted a Lien, as security for the payment and performance of all
obligations under the applicable Subsidiary Guaranty Agreement, on all of Inergy
Sale's existing and future assets; and (iv) any amendments, renewals,
restatements, replacements, consolidations or other modifications thereof from
time to time.
"Swap Counterparty" as used in the Credit Documents means the
Administrative Agent, any Lender or any Affiliate thereof party to a Hedging
Agreement with the Borrower.
"Swingline Commitment" means Two Million Dollars ($2,000,000).
"Swingline Facility" means the swingline facility established pursuant to
Section 2.02.
------------
"Swingline Lender" means First Union in its capacity as swingline lender
hereunder.
"Swingline Loan" means the swingline loans made by the Swingline Lender to
the Borrower pursuant to Section 2.02, and all such loans collectively as the
------------
context requires.
"Swingline Note" means the Swingline Note made by the Borrower payable to
the order of the Swingline Lender, substantially in the form of Exhibit A-3
-----------
hereto, evidencing the Swingline Loans, and any amendments, supplements and
modifications thereto, any substitutes therefor, and any replacements,
restatements, renewals or extension thereof, in whole or in part.
"Swingline Termination Date" means the earlier to occur of (a) the
resignation of First Union as Administrative Agent in accordance with Section
-------
12.09 and (b) the Termination Date.
-----
"Taxes" has the meaning assigned thereto in Section 4.16(a).
---------------
"Termination Date" means the earliest of (a) ________________, 2004 [3
years from the Closing Date], (b) the date of termination by the Borrower of the
Commitments in full
22
pursuant to Section 4.04(a), and (c) the date of termination of the Credit
---------------
Facilities pursuant to Section 11.02(a).
---------------
"Total Funded Debt" means, with respect to the Borrower and its
Consolidated Subsidiaries, at any time, the total amount of Debt at such time,
whether such Debt is matured, unmatured, absolute, contingent or otherwise.
"UCC" means the Uniform Commercial Code as in effect in the State where the
applicable Collateral is located, as amended or modified from time to time.
"Uniform Customs" means the Uniform Customs and Practice for Documentary
Credits (1994 Revision), effective January, 1994, International Chamber of
Commerce Publication No. 500.
"United States" means the United States of America.
"Unused Line Fee" has the meaning set forth in Section 4.08(a).
---------------
"▇▇▇▇▇▇ Oil" has the meaning set fort in the recitals to this Agreement.
"Working Capital Commitment" means (a) as to any Lender, the obligation of
such Lender to make Working Capital Loans to the Borrower hereunder in an
aggregate principal amount at any time outstanding not to exceed the amount so
designated opposite such Lender's name on Schedule 1.01A hereto, as the same may
--------------
be reduced or modified at any time or from time to time pursuant to the terms
hereof and (b) as to all Lenders, the aggregate commitment of all Lenders to
make Working Capital Loans, as such amount may be increased or reduced at any
time or from time to time pursuant to the terms hereof. The Working Capital
Commitment of all Lenders on the Closing Date shall be Thirty Million Dollars
($30,000,000).
"Working Capital Facility" means the loan facility established pursuant to
Section 2.01.
------------
"Working Capital Loan" means any of the Working Capital loans made by the
Lenders to the Borrower pursuant to Section 2.01 and all such loans collectively
------------
as the context requires.
"Working Capital Notes" means the collective reference to the Working
Capital Notes made by the Borrower payable to the order of each Lender,
substantially in the form of Exhibit A-2 hereto, evidencing the Working Capital
-----------
Facility, and any amendments and modifications thereto, any substitutes
therefor, and any replacements, restatements, renewals or extension thereof, in
whole or in part; "Working Capital Note" means any of such Working Capital
Notes.
SECTION 1.02. Other Definitions and Provisions.
--------------------------------
(a) Use of Capitalized Terms. Unless otherwise defined therein, all
------------------------
capitalized terms defined in this Agreement shall have the defined meanings when
used in this Agreement, the Notes and the other Credit Documents or any
certificate, report or other document made or delivered pursuant to this
Agreement.
23
(b) Miscellaneous. Unless otherwise specified, a reference in this
-------------
to a particular section, subsection, Schedule or Exhibit is a reference to that
section, subsection, Schedule or Exhibit of this Agreement. The words "hereof",
"herein" and "hereunder" and words of similar import when used in this Agreement
shall refer to this Agreement as a whole and not to any particular provision of
this Agreement. Wherever from the context it appears appropriate, each term
stated in either the singular or plural shall include the singular and plural,
and pronouns stated in the masculine, feminine or neuter gender shall include
the masculine, the feminine and the neuter. All accounting terms not
specifically defined herein shall be construed in accordance with GAAP. Any
reference herein to "Charlotte time" shall refer to the applicable time of day
in Charlotte, North Carolina. This Agreement shall be construed without regard
to any presumption or rule requiring construction against the party causing such
instrument or any portion thereof to be drafted.
ARTICLE II
THE CREDIT FACILITIES
SECTION 2.01. Working Capital Loans.
----------------------
Subject to the terms and conditions of this Agreement, and in reliance upon
the representations and warranties set forth herein, each Lender severally
agrees to make Working Capital Loans to the Borrower from time to time from the
Closing Date to, but not including, the Termination Date as requested by the
Borrower in accordance with the terms of Section 4.01; provided, that (i) the
------------ --------
aggregate principal amount of all outstanding Working Capital Loans (after
giving effect to any amount requested and the application of the proceeds
thereof) shall not exceed the Working Capital Commitment less the sum of all
----
outstanding Swingline Loans and L/C Obligations; (ii) the aggregate principal
amount of all outstanding Working Capital Loans (after giving effect to any
amount requested) shall not exceed the Borrowing Base less the sum of all
----
outstanding Swingline Loans and L/C Obligations; (iii) the principal amount of
outstanding Working Capital Loans from any Lender to the Borrower shall not at
any time exceed such Lender's Working Capital Commitment less such Lender's
----
Commitment Percentage of L/C Obligations and outstanding Swingline Loans; and
(iv) the principal amount of all Lenders' Extensions of Credit (after giving
effect to any amount requested and the application of the proceeds thereof)
shall not at any time exceed the Aggregate Commitments. Each Working Capital
Loan by a Lender shall be in a principal amount equal to such Lender's
Commitment Percentage of the aggregate principal amount of Working Capital Loans
requested on such occasion. Subject to the terms and conditions hereof, the
Borrower may borrow, repay and reborrow Working Capital Loans.
SECTION 2.02. Swingline Loans.
---------------
(a) Availability. Subject to the terms and conditions of this Agreement,
------------
the Swingline Lender agrees to make Swingline Loans to the Borrower from time to
time from the Closing Date through, but not including, the Swingline Termination
Date; provided, that the aggregate principal amount of all outstanding Swingline
--------
Loans (after giving effect to any amount requested and the application of the
proceeds thereof), shall not exceed the lesser of (i) the Working Capital
Commitment less the sum of all outstanding Working Capital Loans and
----
24
L/C Obligations, (ii) the Borrowing Base less the sum of all outstanding Working
----
Capital Loans and L/C Obligations and (iii) the Swingline Commitment. Each
Lender acknowledges that the aggregate principal amount of all outstanding
Swingline Loans made by the Swingline Lender, when taken together with the
aggregate principal amount of all outstanding Working Capital Loans made by the
Swingline Lender, may exceed the Swingline Lender's Working Capital Commitment.
Upon and during the continuance of a Default or an Event of Default, the
Borrower shall no longer have the option of requesting Swingline Loans.
(b) Refunding.
---------
(i) Swingline Loans shall be reimbursed fully by the Lenders
on demand by the Swingline Lender. Such reimbursements
shall be made by the Lenders in accordance with their
respective Commitment Percentages and shall thereafter be
reflected as Working Capital Loans of the Lenders on the
books and records of the Administrative Agent; provided
that no Lender shall be required to reimburse any
Swingline Loan if, after giving effect to such
reimbursement, the aggregate principal amount of such
Lender's Working Capital Loans outstanding would exceed
such Lender's Working Capital Commitment. Each Lender
shall fund its respective Commitment Percentage of
Working Capital Loans as required to repay Swingline
Loans outstanding to the Swingline Lender upon demand by
the Swingline Lender but in no event later than 2:00 p.m.
(Charlotte time) on the next succeeding Business Day
after such demand is made. No Lender's obligation to fund
its respective Commitment Percentage of a Swingline Loan
shall be affected by any other Lender's failure to fund
its Commitment Percentage of a Swingline Loan, nor shall
any Lender's Commitment Percentage be increased as a
result of any such failure of any other Lender to fund
its Commitment Percentage of a Swingline Loan.
(ii) The Borrower shall pay to the Swingline Lender on demand
the amount of such Swingline Loans to the extent amounts
received from the Lenders are not sufficient to repay in
full the outstanding Swingline Loans requested or
required to be refunded. In addition, the Borrower hereby
authorizes the Administrative Agent to charge any account
maintained by the Borrower or any Subsidiary of the
Borrower with the Swingline Lender (up to the amount
available therein) in order to immediately pay the
Swingline Lender the amount of such Swingline Loans to
the extent amounts received from the Lenders are not
sufficient to repay in full the outstanding Swingline
Loans requested or required to be refunded. If any
portion of any such amount paid to the Swingline Lender
shall be recovered by or on behalf of the Borrower from
the Swingline Lender in bankruptcy or otherwise, the loss
of the amount so recovered shall be ratably shared among
all the Lenders in accordance with their respective
Commitment Percentages.
(iii) Each Lender acknowledges and agrees that its obligation
to refund Swingline Loans in accordance with the terms of
this Section 2.02 is
------------
25
absolute and unconditional and shall not be affected by
any circumstance whatsoever, including, without
limitation, the existence of a Default or an Event of
Default other than a Default or Event of Default that the
Swingline Lender had actual knowledge of at the time such
Swingline Loan was made. Further, each Lender agrees and
acknowledges that if prior to the refunding of any
outstanding Swingline Loans pursuant to this Section
-------
2.02, one of the events described in Section 11.01(h) or
---- ----------------
(i) shall have occurred, each Lender will, on the next
---
Business Day, purchase an undivided participating
interest in the Swingline Loan in an amount equal to its
Commitment Percentage of the aggregate amount of such
Swingline Loan. Each Lender will immediately transfer to
the Swingline Lender, in immediately available funds, the
amount of its participation and upon receipt thereof the
Swingline Lender will deliver to such Lender a
certificate evidencing such participation dated the date
of receipt of such funds and for such amount. Whenever,
at any time after the Swingline Lender has received from
any Lender such Lender's participating interest in a
Swingline Loan, the Swingline Lender receives any payment
on account thereof, the Swingline Lender will distribute
to such Lender its participating interest in such amount
(appropriately adjusted, in the case of interest
payments, to reflect the period of time during which such
Lender's participating interest was outstanding and
funded).
SECTION 2.03. Acquisition Loans.
------------------
Subject to the terms and conditions of this Agreement, and in reliance
upon the representations and warranties set forth herein, each Lender severally
agrees to make Acquisition Loans to the Borrower from time to time from the
Closing Date to, but not including, the Termination Date, as requested by the
Borrower in accordance with the terms of Section 4.01(a); provided, that (i) the
--------------- --------
aggregate principal amount of all outstanding Acquisition Loans (after giving
effect to any amount requested) shall not exceed the Acquisition Commitment,
(ii) the principal amount of outstanding Acquisition Loans from any Lender to
the Borrower shall not at any time exceed such Lender's Acquisition Commitment,
and (iii) the aggregate principal amount of all Lenders' Extensions of Credit
shall not at any time exceed the Aggregate Commitments. Each Acquisition Loan
by a Lender shall be in a principal amount equal to such Lender's Commitment
Percentage of the aggregate principal amount of Acquisition Loans requested or
required on such occasion. Subject to the terms and conditions hereof, the
Borrower may borrow, repay and reborrow Acquisition Loans hereunder.
ARTICLE III
LETTER OF CREDIT FACILITY
SECTION 3.01. L/C Commitment.
--------------
(a) Subject to the terms and conditions of this Agreement, the
Issuing Lender, in reliance on the agreements of the other Lenders set forth in
Section 3.04(a), agrees to issue standby letters of credit ("Letters of Credit")
for the account of the Borrower on any Business
26
Day from the Closing Date to, but not including, the date that is ninety (90)
days prior to the Termination Date in such form as may be approved from time to
time by the Issuing Lender; provided, that the Issuing Lender shall have no
obligation to issue any Letter of Credit if, after giving effect to such
issuance, (i) the L/C Obligations would exceed the L/C Commitment or (ii) the
aggregate principal amount of outstanding Working Capital Loans, plus the
aggregate principal amount of outstanding Swingline Loans, plus the aggregate
amount of L/C Obligations would exceed the lesser of (1) the Working Capital
Commitment and (2) the Borrowing Base.
(b) Each Letter of Credit shall (i) be denominated in Dollars in a
minimum amount of $100,000, (ii) be a standby letter of credit issued to support
obligations of the Borrower or any of its Subsidiaries, contingent or otherwise,
incurred in the ordinary course of business, (iii) expire on a date not later
than the Termination Date and that is otherwise satisfactory to the Issuing
Lender and (iv) be subject to the Uniform Customs and/or ISP 98, as set forth in
the Application or as determined by the Issuing Lender and, to the extent not
inconsistent therewith, the laws of the State of Missouri. The Issuing Lender
shall not at any time be obligated to issue any Letter of Credit hereunder if
such issuance would conflict with, or cause the Issuing Lender or any L/C
Participant to exceed any limits imposed by, any Applicable Law. References
herein to "issue" and derivations thereof with respect to Letters of Credit
shall also include extensions or modifications of any existing Letters of
Credit, unless the context otherwise requires.
(c) For purposes of this Agreement, the Existing Letters of Credit
set forth on Schedule 3.01 hereto shall be deemed issued under this Agreement
-------------
and shall constitute Letters of Credit for all purposes under this Agreement.
Upon the initial expiration of each Existing Letter of Credit, the Borrower
shall terminate and cancel each such Existing Letter of Credit and request a new
Letter of Credit to be issued in replacement thereof.
SECTION 3.02. Procedure for Issuance of Letters of Credit.
-------------------------------------------
The Borrower may from time to time request that the Issuing Lender
issue a Letter of Credit by delivering to the Issuing Lender at the
Administrative Agent's Office an Application therefor, completed to the
satisfaction of the Issuing Lender, and such other certificates, documents and
other papers and information as the Issuing Lender may request. Upon receipt of
any Application, the Issuing Lender shall process such Application and the
certificates, documents and other papers and information delivered to it in
connection therewith in accordance with its customary procedures and shall,
subject to Section 3.01 and Article V, promptly issue the Letter of Credit
------------
requested thereby (but in no event shall the Issuing Lender be required to issue
any Letter of Credit earlier than two (2) Business Days after its receipt of the
Application therefor and all such other certificates, documents and other papers
and information relating thereto) by issuing the original of such Letter of
Credit to the beneficiary thereof or as otherwise may be agreed by the Issuing
Lender and the Borrower. The Issuing Lender shall promptly furnish to the
Borrower a copy of such Letter of Credit and promptly notify each Lender of the
issuance and upon request by any Lender, furnish to such Lender a copy of such
Letter of Credit and the amount of such Lender's L/C Participation therein.
SECTION 3.03. Commissions and Other Charges.
-----------------------------
27
(a) The Borrower shall pay to the Administrative Agent, for the
account of the Issuing Lender and the L/C Participants, a letter of credit
commission with respect to each Letter of Credit in an amount equal to the
product of (i) the average daily maximum amount available to be drawn during the
relevant quarter under such Letter of Credit and (ii) 1.50% (determined on a per
annum basis). Such commission shall be payable quarterly in arrears on the last
Business Day of each calendar quarter and on the Termination Date. The
Administrative Agent shall, promptly following its receipt thereof, distribute
to the Issuing Lender and the L/C Participants all commissions received pursuant
to this Section 3.03(a) in accordance with their respective Commitment
---------------
Percentages.
(b) In addition to the foregoing commission, the Borrower shall pay
to the Administrative Agent, for the account of the Issuing Lender, a fronting
fee with respect to each Letter of Credit issued on or after the Closing Date in
an amount equal to the product of (i) the face amount of such Letter of Credit
and (ii) one quarter of one percent (0.25%). Such fronting fee shall be payable
in arrears on the last day of each fiscal quarter for each day such Letter of
Credit is issued and outstanding.
(c) In addition to the foregoing fees and commissions, the Borrower
shall pay or reimburse the Issuing Lender for such normal and customary costs
and expenses as are incurred or charged by the Issuing Lender in issuing,
effecting payment under, amending or otherwise administering any Letter of
Credit.
SECTION 3.04. L/C Participations.
------------------
(a) The Issuing Lender irrevocably agrees to grant and hereby grants
to each L/C Participant, and, to induce the Issuing Lender to issue Letters of
Credit hereunder, each L/C Participant irrevocably agrees to accept and purchase
and hereby accepts and purchases from the Issuing Lender, on the terms and
conditions hereinafter stated, for such L/C Participant's own account and risk
an undivided interest equal to such L/C Participant's Commitment Percentage in
the Issuing Lender's obligations and rights under and in respect of each Letter
of Credit issued (or deemed issued) hereunder and the amount of each draft paid
by the Issuing Lender thereunder. Each L/C Participant unconditionally and
irrevocably agrees with the Issuing Lender that, if a draft is paid under any
Letter of Credit for which the Issuing Lender is not reimbursed in full by the
Borrower through a Working Capital Loan or otherwise in accordance with the
terms of this Agreement, such L/C Participant shall pay to the Issuing Lender
upon demand at the Issuing Lender's address for notices specified herein an
amount equal to such L/C Participant's Commitment Percentage of the amount of
such draft, or any part thereof, which is not so reimbursed.
(b) Upon becoming aware of any amount required to be paid by any L/C
Participant to the Issuing Lender pursuant to Section 3.04(a) in respect of any
---------------
unreimbursed portion of any payment made by the Issuing Lender under any Letter
of Credit, the Issuing Lender shall notify each L/C Participant of the amount
and due date of such required payment and such L/C Participant shall pay to the
Issuing Lender the amount specified on the applicable due date. If any such
amount is paid to the Issuing Lender after the date such payment is due, such
L/C Participant shall pay to the Issuing Lender on demand, in addition to such
amount, the product of (i) such amount, times (ii) the daily average Federal
-----
Funds Rate (or Base Rate, if such
28
amount is not paid within three Business Days of demand) as determined by the
Administrative Agent during the period from and including the date such payment
is due to the date on which such payment is immediately available to the Issuing
Lender, times (iii) a fraction the numerator of which is the number of days that
elapse during such period and the denominator of which is 360. A certificate of
the Issuing Lender with respect to any amounts owing under this Section 3.04(b)
---------------
shall be conclusive in the absence of manifest error. With respect to payment to
the Issuing Lender of the unreimbursed amounts described in this Section
-------
3.04(b), if the L/C Participants receive notice that any such payment is due (A)
-------
prior to 1:00 p.m. (Charlotte time) on any Business Day, such payment shall be
due that Business Day, and (B) after 1:00 p.m. (Charlotte time) on any Business
Day, such payment shall be due on the following Business Day.
(c) Whenever, at any time after the Issuing Lender has made payment
under any Letter of Credit and has received from any L/C Participant its
Commitment Percentage of such payment in accordance with this Section 3.04, the
------------
Issuing Lender receives any payment related to such Letter of Credit (whether
directly from the Borrower or otherwise) or any payment of interest on account
thereof, the Issuing Lender will distribute to such L/C Participant its pro rata
--- ----
share thereof; provided, that in the event that any such payment received by the
--------
Issuing Lender shall be required to be returned by the Issuing Lender, such L/C
Participant shall return to the Issuing Lender the portion thereof previously
distributed by the Issuing Lender to it.
SECTION 3.05. Reimbursement Obligation of the Borrower.
----------------------------------------
In the event of any drawing under any Letter of Credit, the Borrower
agrees to reimburse (either with the proceeds of a Working Capital Loan as
provided for in this Section 3.05 or with funds from other sources), in same day
------------
funds, the Issuing Lender on each date on which the Issuing Lender notifies the
SECTION 3.06. Obligations Absolute.
--------------------
The Borrower's obligations under this Article III (including without
limitation the Reimbursement Obligation) shall be absolute and unconditional
under any and all circumstances and irrespective of any set-off, counterclaim or
defense to payment which the Borrower may have or have had against the Issuing
Lender or any beneficiary of a Letter of Credit or any other Person. The
Borrower also agrees that the Issuing Lender and the L/C Participants shall not
be responsible for, and the Borrower's reimbursement obligation under Section
-------
3.05 shall not be affected by, among other things, the validity or genuineness
----
of documents or of any endorsements thereon, even though such documents shall in
fact prove to be invalid, fraudulent or forged, or any dispute between or among
the Borrower and any beneficiary of any Letter of Credit or any other party to
which such Letter of Credit may be transferred or any claims whatsoever of the
Borrower against any beneficiary of such Letter of Credit or any such
transferee. The Issuing Lender shall not be liable for any error, omission,
interruption or delay in transmission, dispatch or delivery of any message or
advice, however transmitted, in connection with any Letter of Credit, except for
errors or omissions caused by the Issuing Lender's gross negligence or willful
misconduct. The Borrower agrees that any action taken or omitted by the Issuing
Lender under or in connection with any Letter of Credit or the related drafts or
documents, if done in the absence of gross negligence or willful misconduct and
in accordance with the standards of care specified in ISP 98 or the Uniform
Customs, as the case may be, and, to the extent not inconsistent therewith, the
UCC, shall be binding on the Borrower and shall not result in any liability of
the Issuing Lender or any L/C Participant to the Borrower.
ARTICLE IV
GENERAL LOAN PROVISIONS
SECTION 4.01. Procedure for Advances of Loans.
(a) Requests for Borrowing. The Borrower shall give the
----------------------
Administrative Agent irrevocable prior written notice in the form attached
hereto as Exhibit B (a "Notice of Borrowing") not later than 11:00 a.m.
---------
(Charlotte time) (i) on the same Business Day for each Base Rate Loan and each
Swingline Loan and (ii) at least three (3) Business Days before each LIBOR Rate
Loan, of its intention to borrow, specifying (A) the date of such borrowing,
which shall be a Business Day, (B) the amount of such borrowing, which shall be
(x) with respect to each LIBOR Rate Loan, in a principal amount of $2,000,000 or
a whole multiple of $500,000 in excess thereof, (y) with respect to each Base
Rate Loan, in a principal amount of $1,000,000 or a whole multiple of $100,000
in excess thereof, and (z) with respect to each Swingline Loan, in a principal
amount of $250,000 or a whole multiple of $50,000 in excess thereof, (C) whether
such Loan is to be a Working Capital Loan, Swingline Loan or Acquisition Loan,
(D) in the case of a Working Capital Loan or Acquisition Loan, whether the Loans
are to be LIBOR Rate Loans or Base Rate Loans, and (E) in the case of a LIBOR
Rate Loan, the duration of the Interest Period applicable thereto. A Notice of
Borrowing received after 11:00 a.m. (Charlotte time) shall be deemed received on
the next Business Day. The Administrative Agent shall promptly notify the
Lenders of each Notice of Borrowing.
30
(b) Disbursement of Loans. Not later than 2:00 p.m. (Charlotte
---------------------
time) on the proposed borrowing date, (i) each Lender will make available to the
Administrative Agent, for the account of the Borrower, at the office of the
Administrative Agent in funds immediately available to the Administrative Agent,
as applicable, (A) such Lender's Commitment Percentage of the Working Capital
Loans to be made on such borrowing date, and (B) such Lender's Commitment
Percentage of the Acquisition Loans to be made on such borrowing date and (ii)
the Swingline Lender will make available to the Administrative Agent, for the
account of the Borrower, at the office of the Administrative Agent in funds
immediately available to the Administrative Agent, the Swingline Loans to be
made to the Borrower on such borrowing date. The Borrower hereby irrevocably
authorizes the Administrative Agent to disburse the proceeds of each borrowing
requested pursuant to this Section 4.01 in immediately available funds by
------------
crediting or wiring such proceeds to the deposit account of the Borrower
identified in the most recent notice substantially in the form of Exhibit C
---------
hereto (a "Notice of Account Designation") delivered by the Borrower to the
Administrative Agent or such other account as may be otherwise agreed upon by
the Borrower and the Administrative Agent from time to time. Subject to Section
-------
4.12, the Administrative Agent shall not be obligated to disburse the portion of
----
the proceeds of any Working Capital Loan, the Acquisition Loan or Swingline Loan
requested pursuant to this Section 4.01 to the extent that any Lender (or the
------------
Swingline Lender, in the case of Swingline Loans) has not made available to the
Administrative Agent its applicable Commitment Percentage of such Loan. Working
Capital Loans to be made for the purpose of refunding Swingline Loans shall be
made by the Lenders as provided in Section 2.02(b).
---------------
SECTION 4.02. Repayment of Loans.
(a) Repayment on Termination Date. On the Termination Date, the
-----------------------------
Borrower shall repay the outstanding principal amount of (i) all Working Capital
Loans, Acquisition Loans and Reimbursement Obligations in full, and (ii) to the
extent the Swingline Termination Date has not occurred, all Swingline Loans
together, in each case, with all accrued but unpaid interest thereon.
(b) Clean-Down Period. Notwithstanding anything to the contrary in
------------------
this Agreement and commencing with the Fiscal Year beginning October 1, 2001,
the Borrower must reduce to and/or maintain at $4,000,000 or less, as the case
may be, the aggregate outstanding principal balance of all Working Capital Loans
and Swingline Loans for a period of not less than thirty (30) consecutive days
during each Clean Down Period.
(c) Mandatory Repayment of Working Capital Loans. If at any time
--------------------------------------------
the outstanding principal amount of all Working Capital Loans plus the sum of
all outstanding Swingline Loans and L/C Obligations, as of such date exceeds the
lesser of (i) Working Capital Commitment and (ii) the Borrowing Base, the
Borrower shall repay immediately upon notice from the Administrative Agent, by
payment to the Administrative Agent for the account of the Lenders, the
aggregate outstanding Working Capital Loans, Swingline Loans and L/C Obligations
in an amount equal to such excess with each such repayment applied first to the
-----
principal amount of outstanding Swingline Loans, second to the principal amount
------
of outstanding Working Capital Loans and third, with respect to any Letters of
-----
Credit then outstanding, a payment of cash collateral into a cash collateral
account opened by the Borrower
31
with the Administrative Agent, for the benefit of the Lenders (such cash
collateral to be applied in accordance with Section 11.02(b)). Each such
----------------
repayment shall be accompanied by any amount required to be paid pursuant to
Section 4.14.
------------
(d) Mandatory Repayment of Acquisition Loans. If at any time the
----------------------------------------
outstanding principal amount of all Acquisition Loans exceeds the Acquisition
Commitment, the Borrower shall repay immediately upon notice from the
Administrative Agent, by payment to the Administrative Agent for the account of
the Lenders, the Acquisition Loans in an amount equal to such excess. Each such
repayment shall be accompanied by any amount required to be paid pursuant to
Section 4.14.
------------
(e) Asset Dispositions. If the Borrower or any of its Subsidiaries
------------------
sells or otherwise disposes of any assets (other than the sale of inventory and
motor vehicles in the ordinary course of the Borrower's business), or if any
Collateral or other assets of the Borrower or its Subsidiaries is taken by
condemnation or other governmental taking, then in each case the Borrower shall
pay to the Administrative Agent for the account of the Lenders unless otherwise
agreed by the Required Lenders, as a mandatory prepayment of the Loans (in the
manner set forth below), a sum equal to the net proceeds received by the
Borrower or Subsidiary from such sale or condemnation; provided, however, that
-------- -------
(i) the Borrower shall not be obligated to remit the first $250,000 of any such
proceeds received in any Fiscal Year, and (ii) the Borrower shall not be
obligated to remit any such proceeds to the Administrative Agent if, prior to
such sale or condemnation, the Borrower gives the Administrative Agent written
notice that the Borrower intends to use such proceeds to purchase replacement
assets of a similar type within sixty (60) days thereafter (such notice to
specify in reasonable detail the nature and specifics of such replacement
purchase) and such proceeds are in fact used within such time period to purchase
such replacement assets.
(f) Issuance of Private Placement Debt. If the Borrower incurs any
----------------------------------
Private Placement Debt then, the Borrower shall pay to the Administrative Agent
----
for the account of the Lenders, unless otherwise agreed by the Required Lenders,
as a mandatory prepayment of Loans (in the manner set forth below), a sum equal
to the net proceeds received by the Borrower of such Private Placement Debt.
(g) Order of Application of Mandatory Prepayments. Any prepayment
---------------------------------------------
pursuant to Sections 4.02(d) or (e) shall be applied first to the outstanding
principal balance of the Acquisition Loans, and, upon payment in full thereof,
then to the outstanding principal balance of the Swingline Loans, and upon
payment in full thereof, then to the outstanding principal balance of the
Working Capital Loans. Each such prepayment shall be accompanied by any amount
required to be paid pursuant to Section 4.14.
------------
(h) Voluntary Prepayments. The Borrower shall have the right,
---------------------
without penalty or premium, to prepay the Working Capital Loans, the Acquisition
Loans and the Swingline Loans, in whole or in part, at any time and from time to
time after the Closing Date, subject, however, to the following terms and
conditions: (1) the Borrower shall give the Administrative Agent (x) at least
three (3) Business Days prior written notice of its intent to prepay any Libor
Loan and (y) written notice prior to 11:00 a.m. on the date of the proposed
prepayment of its intent to prepay any Base Rate Loan or Swing Line Loan; (2)
such notice shall specify the
32
amount of the Loan to be prepaid, the type of Loan to be prepaid, and in the
case of Libor Loans, the specific Libor Loans to which such prepayment is to
apply; (3) each prepayment of a Libor Loan shall be in an amount of not less
than $2,000,000 and be a whole multiple of $500,000 (unless the outstanding
principal balance of such Loan is less than $2,000,000, in which event such
prepayment shall be an amount equal to such outstanding principal balance); (4)
each prepayment of a Base Rate Loan shall be in an amount of not less than
$1,000,000 and be a whole multiple of $500,000 (unless the outstanding principal
balance of such Base Rate Loan is less then $1,000,000, in which event such
prepayment shall be an amount equal to such outstanding principal balance; and
(5) each prepayment of a Swing Line Loan shall be an amount of not less than
$250,000 and a whole multiple of $50,000 (unless the outstanding principal
balance of such Swing Line Loan is less than $250,000, in which event such
prepayment shall be an amount equal to such outstanding principal balance). Each
such prepayment shall be accompanied by any amount required to be paid pursuant
to Section 4.14.
------------
SECTION 4.03. Notes.
-----
(a) Working Capital Notes. Each Lender's Working Capital Loans and the
---------------------
obligation of the Borrower to repay such Working Capital Loans shall be
evidenced by a separate Working Capital Note executed by the Borrower payable to
the order of such Lender representing the Borrower's obligation to pay such
Lender's Working Capital Commitment or, if less, the aggregate unpaid principal
amount of all Working Capital Loans made and to be made by such Lender to the
Borrower hereunder, plus interest and all other fees, charges and other amounts
due thereon. Each Working Capital Note shall be dated the date hereof and shall
bear interest on the unpaid principal amount thereof at the applicable interest
rate per annum specified in Section 4.06.
------------
(b) Acquisition Notes. Each Lender's Acquisition Loans and the
-----------------
obligation of the Borrower to repay such Acquisition Loans shall be evidenced by
an Acquisition Note executed by the Borrower payable to the order of such Lender
representing the Borrower's obligation to pay such Lender's Acquisition
Commitment or, if less, the aggregate unpaid principal amount of all Acquisition
Loans made and to be made by such Lender to the Borrower hereunder, plus
interest and all other fees, charges and other amounts due thereon. Each
Acquisition Note shall be dated the date hereof and shall bear interest on the
unpaid principal amount thereof at the applicable interest rate per annum
specified in Section 4.06.
------------
(c) Swingline Note. The Swingline Loans and the obligation of the
--------------
Borrower to repay such Swingline Loans shall be evidenced by the Swingline Note
executed by the Borrower payable to the order of the Swingline Lender
representing the Borrower's obligation to pay the Swingline Lender the aggregate
unpaid principal amount of all Swingline Loans made and to be made by the
Swingline Lender to the Borrower hereunder, plus interest and all other fees,
charges and other amounts due thereon. The Swingline Note shall be dated the
date hereof and shall bear interest on the unpaid principal amount thereof at
the applicable interest rate specified in Section 4.06.
------------
SECTION 4.04. Permanent Reduction of the Commitments.
--------------------------------------
33
(a) Voluntary Reduction. The Borrower shall have the right, without
-------------------
penalty or premium, to permanently reduce all or a portion of the Working
Capital Commitment or the Acquisition Commitment, at any time and from time to
time after the Closing Date, subject, however, to the following terms and
conditions: (1) the Borrower shall give the Administrative Agent at least three
(3) Business Day prior written notice of its intent to reduce the Working
Capital Commitment or the Acquisition Commitment, as applicable, and (2) each
reduction shall be in an aggregate principal amount not less than $1,000,000 or
any whole multiple of $500,000 in excess thereof.
(b) No Mandatory Reduction. Any mandatory prepayment of a Working
----------------------
Capital Loan required to be made pursuant to Section 4.02 shall not cause the
------------
Working Capital Commitment to be reduced. Any mandatory prepayment of an
Acquisition Loan required to be made pursuant to Section 4.02 shall not cause
------------
the Acquisition Commitment to be reduced.
(c) Repayment of Excess Loans. Each permanent reduction permitted
-------------------------
pursuant to Section 4.04(a), with respect to outstanding Working Capital Loans
---------------
and Swingline Loans and L/C Obligations, shall be accompanied by a payment of
principal sufficient to reduce the aggregate outstanding Working Capital Loans
and Swingline Loans, of the Lenders to the Working Capital Commitment as so
reduced. If the Working Capital Commitment as so reduced (and after the
application of the payment in the preceding sentence) is less than the aggregate
amount of all outstanding L/C Obligations, the Borrower shall be required to
deposit in a cash collateral account opened by the Administrative Agent an
amount equal to the aggregate then undrawn and unexpired amount of such L/C
Obligations. Each permanent reduction permitted pursuant to Section 4.04(a),
---------------
with respect to Acquisition Loans, shall be accompanied by a payment of
principal sufficient to reduce the aggregate outstanding Acquisition Loans, to
the Acquisition Commitment, as so reduced. If the reduction of the Working
Capital Commitment or the Acquisition Commitment, as applicable, requires the
repayment of any LIBOR Rate Loan, such repayment shall be accompanied by any
amount required to be paid pursuant to Section 4.14.
------------
SECTION 4.05. Termination of Credit Facilities.
--------------------------------
The Credit Facilities shall terminate and each of the Working Capital
Commitment, the Acquisition Commitment and the Swingline Commitment shall be
automatically reduced to zero on the Termination Date.
SECTION 4.06. Interest.
--------
(a) Interest Rate Options. Subject to the provisions of this Section
--------------------- -------
4.06, at the election of the Borrower, the aggregate unpaid principal balance of
----
(i) each Loan (other than Swingline Loans) shall bear interest at the Base Rate
plus the Applicable Margin or the LIBOR Rate plus the Applicable Margin as set
----
forth below; provided that the LIBOR Rate shall not be available until three (3)
--------
Business Days after the Closing Date, and (ii) each Swingline Loan shall bear
interest at the Base Rate plus the Applicable Margin. The Borrower shall select
----
the rate of interest and Interest Period, if any, applicable to any LIBOR Rate
Loan at the time a Notice of Borrowing is given pursuant to Section 4.01(a) or
---------------
at the time a Notice of Conversion/Continuation is given pursuant to Section
-------
4.07. Each Loan (including Swingline
----
34
Loans) or portion thereof bearing interest based on the Base Rate shall be a
"Base Rate Loan", and each Loan or portion thereof bearing interest based on the
LIBOR Rate shall be a "LIBOR Rate Loan." Any Loan or any portion thereof as to
which the Borrower has not duly specified an interest rate as provided herein
shall be deemed a Base Rate Loan.
(b) Interest Periods. In connection with each LIBOR Rate Loan, the
----------------
Borrower, by giving notice at the times described in Section 4.06(a), shall
---------------
elect an interest period (each, an "Interest Period") to be applicable to such
Loan, which Interest Period shall be a period of one (1), two (2), three (3), or
six (6) months (or twelve (12) months, if available, and consented to by the
Administrative Agent and the Lenders ); provided that:
--------
(i) the Interest Period shall commence on the date of advance of
or conversion to any LIBOR Rate Loan and, in the case of
immediately successive Interest Periods, each successive
Interest Period shall commence on the date on which the next
preceding Interest Period expires;
(ii) if any Interest Period would otherwise expire on a day that is
not a Business Day, such Interest Period shall expire on the
next succeeding Business Day; provided, that if any Interest
--------
Period with respect to a LIBOR Rate Loan would otherwise
expire on a day that is not a Business Day but is a day of the
month after which no further Business Day occurs in such
month, such Interest Period shall expire on the next preceding
Business Day;
(iii) any Interest Period with respect to a LIBOR Rate Loan that
begins on the last Business Day of a calendar month (or on a
day for which there is no numerically corresponding day in the
calendar month at the end of such Interest Period) shall end
on the last Business Day of the relevant calendar month at the
end of such Interest Period;
(iv) no Interest Period shall extend beyond the Termination Date;
and
(v) there shall be no more than eight (8) Interest Periods
outstanding at any time.
(c) Default Rate. Subject to Section 11.03, upon the occurrence and
------------ -------------
during the continuance of an Event of Default, (i) the Borrower shall no longer
have the option to request LIBOR Rate Loans, (ii) all outstanding LIBOR Rate
Loans shall bear interest at a rate per annum three percent (3%) in excess of
the rate then applicable to LIBOR Rate Loans until the end of the applicable
Interest Period and thereafter at a rate equal to three percent (3%) in excess
of the rate then applicable to Base Rate Loans, (iii) all outstanding Swingline
Loans shall bear interest at a rate per annum equal to three percent (3%) in
excess of the rate then applicable to Swingline Loans and (iv) all outstanding
Base Rate Loans shall bear interest at a rate per annum equal to three percent
(3%) in excess of the rate then applicable to Base Rate Loans. Interest shall
continue to accrue on the Notes after the filing by or against the Borrower
35
of any petition seeking any relief in bankruptcy or under any act or law
pertaining to insolvency or debtor relief, whether state, federal or foreign.
(d) Interest Payment and Computation. Interest on each Base Rate Loan
--------------------------------
shall be payable in arrears on the last Business Day of each calendar quarter
commencing September 30, 2001; and interest on each LIBOR Rate Loan shall be
payable on the last day of each Interest Period applicable thereto, and if such
Interest Period extends over three (3) months, at the end of each three (3)
month interval during such Interest Period. All interest rates, fees and
commissions provided hereunder shall be computed on the basis of a 360-day year
and assessed for the actual number of days elapsed; provided, however, that
--------
interest on each Base Rate Loan that is based on the Prime Rate shall be
computed on the basis of a 365-day or 366-day year, as applicable, and assessed
for the actual number of days elapsed.
(e) Maximum Rate. In no contingency or event whatsoever shall the
------------
aggregate of all amounts deemed interest hereunder or under any of the Notes
charged or collected pursuant to the terms of this Agreement or pursuant to any
of the Notes exceed the highest rate permissible under any Applicable Law which
a court of competent jurisdiction shall, in a final determination, deem
applicable hereto. In the event that such a court determines that the Lenders
have charged or received interest hereunder in excess of the highest applicable
rate, the rate in effect hereunder shall automatically be reduced to the maximum
rate permitted by Applicable Law and the Lenders shall at the Administrative
Agent's option promptly refund to the Borrower any interest received by Lenders
in excess of the maximum lawful rate or shall apply such excess to the principal
balance of the Obligations. It is the intent hereof that the Borrower not pay or
contract to pay, and that neither the Administrative Agent nor any Lender
receive or contract to receive, directly or indirectly in any manner whatsoever,
interest in excess of that which may be paid by the Borrower under Applicable
Law.
SECTION 4.07. Notice and Manner of Conversion or Continuation of Loans.
--------------------------------------------------------
Provided that no Event of Default has occurred and is then continuing, the
Borrower shall have the option to (a) convert at any time all or any portion of
its outstanding Base Rate Loans in a principal amount equal to $2,000,000 or any
whole multiple of $500,000 in excess thereof into a LIBOR Rate Loan or (b) upon
the expiration of any Interest Period, (i) convert all or any part of its
outstanding LIBOR Rate Loans in a principal amount equal to $1,000,000 or a
whole multiple of $500,000 in excess thereof into Base Rate Loans or (ii)
continue such LIBOR Rate Loans as LIBOR Rate Loans. Whenever the Borrower
desires to convert or continue Loans as provided above, the Borrower shall give
the Administrative Agent irrevocable prior written notice in the form attached
as Exhibit D (a "Notice of Conversion/Continuation") not later than 11:00 a.m.
---------
(Charlotte time) three (3) Business Days before the day on which a proposed
conversion or continuation of such Loan is to be effective specifying (A) the
Loans to be converted or continued, and, in the case of any LIBOR Rate Loan to
be converted or continued, the last day of the Interest Period therefor, (B) the
effective date of such conversion or continuation (which date shall be a
Business Day), (C) the principal amount of such Loans to be converted or
continued, and (D) the Interest Period to be applicable to such converted or
continued LIBOR Rate Loan. If a LIBOR Rate Loan is not converted or continued as
a new Libor Rate Loan as provided in this Section, such LIBOR Rate Loan shall in
the last day of the
36
applicable Interested Period be converted into a Base Rate Loan. The
Administrative Agent shall promptly notify the Lenders of such Notice of
Conversion/Continuation.
SECTION 4.08. Fees.
----
(a) Unused Line Fee. The Borrower agrees to pay to the Administrative
---------------
Agent for the account of the Lenders, on the last Business Day of each quarter
for the immediately preceding quarter and on the Termination Date, a fee (the
"Unused Line Fee") equal to (a) the Applicable Margin, as in effect on such day,
times (b) the difference between (1) the Commitments, and (2) the Average
Quarterly Loan Balance for such preceding quarter. If, during any quarter, this
Agreement is terminated on a date other than the last Business Day of such
quarter, then the Unused Line Fee shall be pro-rated for such quarter on a daily
basis.
(b) Administrative Agent's and Other Fees. To compensate the
-------------------------------------
Administrative Agent, the Borrower agrees to pay to the Administrative Agent,
for its account, the fees set forth in the separate fee letter dated May 16,
2001, executed by the Borrower and the Administrative Agent.
SECTION 4.09. Manner of Payment.
-----------------
Each payment by the Borrower on account of the principal of or interest on
the Loans or of any fee, commission or other amounts payable to the Lenders
under this Agreement or any Note shall be made not later than 1:00 p.m.
(Charlotte time) on the date specified for payment under this Agreement to the
Administrative Agent at the Administrative Agent's office for the account of the
Lenders (other than as set forth below) pro rata in accordance with their
--- ----
respective applicable Commitment Percentages, in Dollars, in immediately
available funds and shall be made without any set-off, counterclaim or deduction
whatsoever. Any payment received after such time but before 2:00 p.m. (Charlotte
time) on such day shall be deemed a payment on such date for the purposes of
Section 11.01, but for all other purposes shall be deemed to have been made on
-------------
the next succeeding Business Day. Any payment received after 2:00 p.m.
(Charlotte time) shall be deemed to have been made on the next succeeding
Business Day for all purposes. Upon receipt by the Administrative Agent of each
such payment, the Administrative Agent shall distribute to each Lender at its
address for notices set forth herein its pro rata share of such payment in
--- ----
accordance with such Lender's applicable Commitment Percentage and shall wire
advice of the amount of such credit to each Lender. Each payment to the
Administrative Agent of Administrative Agent's fees or expenses shall be made
for the account of the Administrative Agent and any amount payable to any Lender
under Sections 4.13, 4.14, 4.15, 4.16 or 13.02 shall be paid to the
------------- ---- ---- ---- -----
Administrative Agent for the account of the applicable Lender. Any payment
required to be made under Section 4.02 that is due on a date that is not a
------------
Business Day shall be due on the next Business Day.
SECTION 4.10. Crediting of Payments and Proceeds.
----------------------------------
In the event that the Borrower shall fail to pay any of the Obligations
when due and the Obligations have been accelerated pursuant to Section 11.02,
-------------
all payments received by the Lenders upon the Notes and the other Obligations
and all net proceeds from the enforcement of the Obligations shall be applied
first to all expenses then due and payable by the Borrower
37
hereunder, then to all indemnity obligations then due and payable by the
Borrower hereunder, then to all Administrative Agent's fees then due and
payable, then to all fees and commissions then due and payable, then to accrued
and unpaid interest on the Swingline Note to the Swingline Lender, then to the
unpaid principal amount outstanding under the Swingline Note to the Swingline
Lender, then to accrued and unpaid interest on the Working Capital Notes, the
Acquisition Notes and the Reimbursement Obligation (pro rata in accordance with
all such amounts due), then to the principal amount of the Working Capital
Notes, the Acquisition Notes, the Reimbursement Obligations and obligations
under Hedging Agreements (pro rata in accordance with all such amounts due) and
then to the cash collateral account described in Section 11.02(b) to the extent
----------------
of any L/C Obligations then outstanding, in that order.
SECTION 4.11. Adjustments.
-----------
If any Lender (a "Benefited Lender") shall at any time receive any payment
of all or part of the Obligations owing to it, or interest thereon, or if any
Lender shall at any time receive any collateral in respect to the Obligations
owing to it (whether voluntarily or involuntarily, by set-off or otherwise) in a
greater proportion than any such payment to and collateral received by any other
Lender, if any, in respect of the Obligations owing to such other Lender, or
interest thereon, such Benefited Lender shall purchase for cash from the other
Lenders such portion of each such other Lender's Extensions of Credit, or shall
provide such other Lenders with the benefits of any such collateral, or the
proceeds thereof, as shall be necessary to cause such Benefited Lender to share
the excess payment or benefits of such collateral or proceeds ratably with each
of the Lenders; provided, that if all or any portion of such excess payment or
--------
benefits is thereafter recovered from such Benefited Lender, such purchase shall
be rescinded, and the purchase price and benefits returned to the extent of such
recovery, but without interest. The Borrower agrees that each Lender so
purchasing a portion of another Lender's Extensions of Credit may exercise all
rights of payment (including, without limitation, rights of set-off) with
respect to such portion as fully as if such Lender were the direct holder of
such portion.
SECTION 4.12. Nature of Obligations of Lenders Regarding Extensions of
--------------------------------------------------------
Credit; Assumption by the Administrative Agent.
----------------------------------------------
The obligations of the Lenders under this Agreement to make the Loans and
issue or participate in Letters of Credit are several and are not joint or joint
and several. Unless the Administrative Agent shall have received notice from a
Lender prior to a proposed borrowing date that such Lender will not make
available to the Administrative Agent such Lender's ratable portion of the
amount to be borrowed on such date (which notice shall not release such Lender
of its obligations hereunder), the Administrative Agent may assume that such
Lender has made such portion available to the Administrative Agent on the
proposed borrowing date in accordance with Section 4.01(b) and the
---------------
Administrative Agent may, in reliance upon such assumption, make available to
the Borrower on such date a corresponding amount. If such amount is made
available to the Administrative Agent on a date after such borrowing date, such
Lender shall pay to the Administrative Agent on demand an amount, until paid,
equal to the product of (a) the amount not made available by such Lender in
accordance with the terms hereof, times (b) the daily average Federal Funds Rate
-----
(or, if such amount is not made available for a period of three (3) Business
Days after the borrowing date, the Base Rate) during such period as determined
by the Administrative Agent, times (c) a fraction the numerator of which is
-----
38
the number of days that elapse from and including such borrowing date to the
date on which such amount not made available by such Lender in accordance with
the terms hereof shall have become immediately available to the Administrative
Agent and the denominator of which is 360. A certificate of the Administrative
Agent with respect to any amounts owing under this Section 4.12 shall be
------------
conclusive, absent manifest error. If such Lender's Commitment Percentage of
such borrowing is not made available to the Administrative Agent by such Lender
within three (3) Business Days of such borrowing date, the Administrative Agent
shall be entitled to recover such amount made available by the Administrative
Agent with interest thereon at the rate per annum applicable to Base Rate Loans
hereunder, on demand, from the Borrower. The failure of any Lender to make
available its Commitment Percentage of any Loan requested by the Borrower shall
not relieve it or any other Lender of its obligation, if any, hereunder to make
its Commitment Percentage of such Loan available on such borrowing date, but no
Lender shall be responsible for the failure of any other Lender to make its
Commitment Percentage of such Loan available on the borrowing date.
SECTION 4.13. Changed Circumstances; Laws Affecting LIBOR Rate
------------------------------------------------
Availability, Etc.
-----------------
(a) Changed Circumstances. If, with respect to any Interest Period, the
---------------------
Administrative Agent or any Lender (after consultation with Administrative
Agent) shall determine that, by reason of circumstances affecting the foreign
exchange and interbank markets generally, deposits in eurodollars, in the
applicable amounts are not being quoted via Telerate Page 3750 or offered to the
---
Administrative Agent or such Lender for such Interest Period, then the
Administrative Agent shall forthwith give notice thereof to the Borrower.
Thereafter, until the Administrative Agent notifies the Borrower that such
circumstances no longer exist, the obligation of the Lenders to make LIBOR Rate
Loans and the right of the Borrower to convert any Loan to or continue any Loan
as a LIBOR Rate Loan shall be suspended, and the Borrower shall repay in full
(or cause to be repaid in full) the then outstanding principal amount of each
such LIBOR Rate Loans together with accrued interest thereon, on the last day of
the then current Interest Period applicable to such LIBOR Rate Loan or convert
the then outstanding principal amount of each such LIBOR Rate Loan to a Base
Rate Loan as of the last day of such Interest Period.
(b) Laws Affecting LIBOR Rate Availability. If, after the date hereof,
--------------------------------------
the introduction of, or any change in, any Applicable Law 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 Lender (or any of their respective Lending
Offices) 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 of the Lenders (or any of their respective Lending
Offices) to honor its obligations hereunder to make or maintain any LIBOR Rate
Loan, such Lender shall promptly give notice thereof to the Administrative Agent
and the Administrative Agent shall promptly give notice to the Borrower and the
other Lenders. Thereafter, until the Administrative Agent notifies the Borrower
that such circumstances no longer exist, (i) the obligations of the Lenders to
make LIBOR Rate Loans and the right of the Borrower to convert any Loan or
continue any Loan as a LIBOR Rate Loan shall be suspended and thereafter the
Borrower may select only Base Rate Loans hereunder, and (ii) if any of the
Lenders may not lawfully continue to
39
maintain a LIBOR Rate Loan to the end of the then current Interest Period
applicable thereto as a LIBOR Rate Loan, the applicable LIBOR Rate Loan shall
immediately be converted to a Base Rate Loan for the remainder of such Interest
Period.
(c) Increased Costs. If, after the date hereof, the introduction of, or
---------------
any change in, any Applicable Law, or 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 of the
Lenders (or any of their respective Lending Offices) with any request or
directive (whether or not having the force of law) of such Governmental
Authority, central bank or comparable agency:
(i) shall subject any of the Lenders (or any of their respective
Lending Offices) to any tax, duty or other charge with respect
to any Note, Letter of Credit or Application or shall change
the basis of taxation of payments to any of the Lenders (or
any of their respective Lending Offices) of the principal of
or interest on any Note, Letter of Credit or Application or
any other amounts due under this Agreement in respect thereof
(except for changes in the rate of tax on the overall net
income of any of the Lenders or any of their respective
Lending Offices imposed by the jurisdiction in which such
Lender is organized or is or should be qualified to do
business or such Lending Office is located); or
(ii) shall impose, modify or deem applicable any reserve
(including, without limitation, any imposed by the Board of
Governors of the Federal Reserve System), special deposit,
insurance or capital or similar requirement against assets of,
deposits with or for the account of, or credit extended by any
of the Lenders (or any of their respective Lending Offices) or
shall impose on any of the Lenders (or any of their respective
Lending Offices) or the foreign exchange and interbank markets
any other condition affecting any Note;
and the result of any of the foregoing is to increase the costs to any of the
Lenders of making or maintaining any Loan or issuing or participating in Letters
of Credit or to reduce the yield or amount of any sum received or receivable by
any of the Lenders under this Agreement or under the Notes or Letters of Credit
or Application, then such Lender shall promptly notify the Administrative Agent,
and the Administrative Agent shall promptly notify the Borrower of such fact and
demand compensation therefor and, within ten (10) Business Days after such
notice by the Administrative Agent, the Borrower shall pay to such Lender such
additional amount or amounts as will compensate such Lender or Lenders for such
increased cost or reduction. The Administrative Agent will promptly notify the
Borrower of any event of which it has knowledge which will entitle such Lender
to compensation pursuant to this Section 4.13(c); provided, that the
--------------- --------
Administrative Agent shall incur no liability whatsoever to the Lenders or the
Borrower in the event it fails to do so. The amount of such compensation shall
be determined, in the applicable Lender's sole discretion, based upon the
assumption that such Lender funded its Commitment Percentage of the LIBOR Rate
Loans in the London interbank market and using any reasonable attribution or
averaging methods which such Lender deems appropriate and practical. A
certificate of such Lender setting forth the basis for determining such amount
or
40
amounts necessary to compensate such Lender shall be forwarded to the Borrower
through the Administrative Agent and shall be conclusively presumed to be
correct save for manifest error.
SECTION 4.14. Indemnity.
---------
The Borrower hereby indemnifies each of the Lenders against any loss
or expense which may arise or be attributable to each Lender's obtaining,
liquidating or employing deposits or other funds acquired to effect, fund or
maintain any Loan (a) as a consequence of any failure by the Borrower to make
any payment when due of any amount due hereunder in connection with a LIBOR Rate
Loan, (b) due to any failure of the Borrower to borrow on a date specified
therefor in a Notice of Borrowing or Notice of Continuation/Conversion or (c)
due to any payment, prepayment or conversion of any LIBOR Rate Loan on a date
other than the last day of the Interest Period therefor. The amount of such
loss or expense shall be determined, in the applicable Lender's sole discretion,
based upon the assumption that such Lender funded its Commitment Percentage of
the LIBOR Rate Loans in the London interbank market and using any reasonable
attribution or averaging methods that such Lender deems appropriate and
practical. A certificate of such Lender setting forth the basis for determining
such amount or amounts necessary to compensate such Lender shall be forwarded to
the Borrower through the Administrative Agent and shall be conclusively presumed
to be correct save for manifest error.
SECTION 4.15. Capital Requirements.
--------------------
If either (a) the introduction of, or any change in, or in the
interpretation of, any Applicable Law or (b) compliance with any guideline or
request from any central bank or comparable agency or other Governmental
Authority (whether or not having the force of law), has or would have the effect
of reducing the rate of return on the capital of, or has affected or would
affect the amount of capital required to be maintained by, any Lender or any
corporation controlling such Lender as a consequence of, or with reference to
the Commitments and other commitments of this type, below the rate which the
Lender or such other corporation could have achieved but for such introduction,
change or compliance, then within ten (10) Business Days after written demand by
any such Lender, the Borrower shall pay to such Lender from time to time as
specified by such Lender additional amounts sufficient to compensate such Lender
or other corporation for such reduction. A certificate as to such amounts
submitted to the Borrower and the Administrative Agent by such Lender, shall be
conclusively presumed to be correct save for manifest error.
SECTION 4.16. Taxes.
-----
(a) Payments Free and Clear. Any and all payments by the Borrower
-----------------------
hereunder or under the Notes or the Letters of Credit shall be made free and
clear of and without deduction for any and all present or future taxes, levies,
imposts, deductions, charges or withholding, and all liabilities with respect
thereto excluding, (i) in the case of each Lender and the Administrative Agent,
income and franchise taxes imposed by the jurisdiction under the laws of which
such Lender or the Administrative Agent (as the case may be) is organized or is
or should be qualified to do business or any political subdivision thereof and
(ii) in the case of each Lender, income and franchise taxes imposed by the
jurisdiction of such Lender's Lending Office or any political subdivision
thereof (all such non-excluded taxes, levies, imposts,
41
deductions, charges, withholdings and liabilities being hereinafter referred to
as "Taxes"). If the Borrower shall be required by law to deduct any Taxes from
or in respect of any sum payable hereunder or under any Note or Letter of Credit
to any Lender or the Administrative Agent, (A) the sum payable shall be
increased as may be necessary so that after making all required deductions
(including deductions applicable to additional sums payable under this Section
-------
4.16) such Lender or the Administrative Agent (as the case may be) receives an
----
amount equal to the amount such party would have received had no such deductions
been made, (B) the Borrower shall make such deductions, (C) the Borrower shall
pay the full amount deducted to the relevant taxing authority or other authority
in accordance with applicable law, and (D) the Borrower shall deliver to the
Administrative Agent evidence of such payment to the relevant taxing authority
or other authority in the manner provided in Section 4.16(d). Any Lender for
---------------
which any such payment shall have been made shall promptly remit to the Borrower
the amount of any excess benefit such Lender receives by reason of such payment.
(b) Stamp and Other Taxes. In addition, the Borrower shall pay any
---------------------
present or future stamp, registration, recordation or documentary taxes or any
other similar fees or charges or excise or property taxes, levies of the United
States or any state or political subdivision thereof or any applicable foreign
jurisdiction which arise from any payment made hereunder or from the execution,
delivery or registration of, or otherwise with respect to, this Agreement, the
Loans, the Letters of Credit, the other Credit Documents, or the perfection of
any rights or security interest in respect thereto (hereinafter referred to as
"Other Taxes").
(c) Indemnity. The Borrower shall indemnify each Lender and the
---------
Administrative Agent for the full amount of Taxes and Other Taxes (including,
without limitation, any Taxes and Other Taxes imposed by any jurisdiction on
amounts payable under this Section 4.16) paid by such Lender or the
------------
Administrative Agent (as the case may be) and any liability (including
penalties, interest and expenses) arising therefrom or with respect thereto,
whether or not such Taxes or Other Taxes were correctly or legally asserted.
Such indemnification shall be made within thirty (30) days from the date such
Lender or the Administrative Agent (as the case may be) makes written demand
therefor.
(d) Evidence of Payment. Within thirty (30) days after the date of any
-------------------
payment of Taxes or Other Taxes, the Borrower shall furnish to the
Administrative Agent, at its address referred to in Section 13.01, the original
-------------
or a certified copy of a receipt evidencing payment thereof or other evidence of
payment satisfactory to the Administrative Agent.
(e) Delivery of Tax Forms. Each Lender organized under the laws of a
---------------------
jurisdiction other than the United States or any state thereof shall deliver to
the Borrower, with a copy to the Administrative Agent, on the Closing Date or
concurrently with the delivery of the relevant Assignment and Acceptance, as
applicable, (i) two United States Internal Revenue Service Forms 4224 or Forms
1001, as applicable (or successor forms) properly completed and certifying in
each case that such Lender is entitled to a complete exemption from withholding
or deduction for or on account of any United States federal income taxes, and
(ii) an Internal Revenue Service Form W-8 or W-9 or successor applicable form,
as the
42
case may be, to establish an exemption from United States backup withholding
taxes. Each such Lender further agrees to deliver to the Borrower, with a copy
to the Administrative Agent, a Form 1001 or 4224 and Form W-8 or W-9, or
successor applicable forms or manner of certification, as the case may be, on or
before the date that any such form expires or becomes obsolete or after the
occurrence of any event requiring a change in the most recent form previously
delivered by it to the Borrower, certifying in the case of a Form 1001 or 4224
that such Lender is entitled to receive payments under this Agreement without
deduction or withholding of any United States federal income taxes (unless in
any such case an event (including without limitation any change in treaty, law
or regulation) has occurred prior to the date on which any such delivery would
otherwise be required which renders such forms inapplicable or the exemption to
which such forms relate unavailable and such Lender notifies the Borrower and
the Administrative Agent that it is not entitled to receive payments without
deduction or withholding of United States federal income taxes) and, in the case
of a Form W-8 or W-9, establishing an exemption from United States backup
withholding tax. The Borrower shall not be required to pay any additional amount
to any non-U.S. Lender in respect of United States withholding tax pursuant to
Section 4.16(a) to the extent that the obligation to withhold such tax existed
--------------
at the time such non-U.S. Lender became a Lender hereunder, unless such
obligation would not have arisen but for a failure by such non-U.S. Lender to
deliver the documents referred to in this Section 4.16(e).
--------------
(f) Survival. Without prejudice to the survival of any other agreement
--------
of the Borrower hereunder, the agreements and obligations of the Borrower
contained in this Section 4.16 shall survive the payment in full of the
Obligations and the termination of the Commitments.
SECTION 4.17. Duty to Mitigate; Assignment of Commitments Under Certain
---------------------------------------------------------
Circumstances.
-------------
(a) Any Lender (or Eligible Assignee) claiming any additional amounts
payable pursuant to Sections 4.13, 4.14 or 4.16, shall use reasonable efforts
------------- ---- ----
(consistent with legal and regulatory restrictions) to file any certificate or
document requested by the Borrower or to change the jurisdiction of its
applicable lending office if the making of such a filing or change would avoid
the need for or reduce the amount of any such additional amounts which may
thereafter accrue or avoid the circumstances giving rise to such exercise and
would not, in the sole determination of such Lender (or Eligible Assignee), be
otherwise disadvantageous to such Lender (or Eligible Assignee).
(b) In the event that any Lender shall have delivered a notice pursuant
to Section 4.13 or 4.15 or the Borrower shall be required to make additional
------------ ----
payments to any Lender under Section 4.16, the Borrower shall have the right, at
------------
its expense (which shall include the assignment fee referred to in Section
-------
13.10), upon notice to such Lender and the Administrative Agent, to require such
-----
Lender to transfer and assign without recourse (in accordance with and subject
to the restrictions contained in Section 13.10) all interests, rights and
-------------
obligations contained hereunder to another financial institution (including any
other Lender) approved by the Administrative Agent (which approval shall not be
unreasonably withheld) which shall assume such obligations; provided that (i) no
--------
such assignment shall conflict with any law, rule or regulation or order of any
Governmental Authority and (ii) the assignee or the Borrower, as the case may
be, shall pay to the affected Lender in immediately available funds on the date
of such assignment the principal of and interest accrued to the date of payment
on, or transfer of, the Loans made by it hereunder and all other amounts accrued
for its account or owed to it
43
hereunder (including the additional amounts asserted and payable pursuant to
Sections 4.13, 4.15 or 4.16, if any).
------------- ---- ----
ARTICLE V
CLOSING; CONDITIONS OF CLOSING AND BORROWING
SECTION 5.01. Closing.
-------
The closing shall take place at the offices of Parker, Poe, ▇▇▇▇▇ &
▇▇▇▇▇▇▇▇▇ L.L.P., Charlotte, North Carolina at 9:00 a.m. (or at such other time
and place as the parties hereto shall mutually agree) on the Closing Date.
SECTION 5.02. Credit Documents and Conditions Precedent.
-----------------------------------------
Notwithstanding anything herein or in the other Credit Documents to the
contrary, this Agreement shall not become effective and the Lenders and the
Issuing Bank shall not be obligated to make the initial Extension of Credit
under this Agreement until:
(a) Credit Documents. The Administrative Agent shall have received the
----------------
following documents, duly executed and delivered by all parties thereto
(including any party who signs to evidence its consent or acknowledgment
thereto), if applicable, and otherwise satisfactory in form and content to the
Administrative Agent on or prior to August 3, 2001:
(i) Credit Agreement. This Agreement;
----------------
(ii) Notes. The Notes;
-----
(iii) Security Agreements. The Security Agreements;
-------------------
(iv) Guaranty Agreements. The Guaranty Agreements;
-------------------
(v) Pledge Agreements. The Pledge Agreements;
-----------------
(vi) UCC Financing Statements. UCC-1 or similar financing
------------------------
statements from each Credit Party, as debtor, to the
Administrative Agent, as secured party, covering the
Collateral, filed, or to be filed, in the respective
jurisdictions listed on Schedule 8.10 hereto, and such other
-------------
jurisdictions as the Administrative Agent deems necessary or
desirable to perfect its security interest in the Collateral;
(vii) Mortgage Documents. The Mortgages and such UCC fixture
------------------
financing statements and like real property security documents
as the Administrative Agent deems necessary or desirable to
create, perfect and preserve a Lien in favor of the
Administrative Agent, as security for the Obligations, on all
real property listed on Schedule 6.01(s) hereto owned in fee
----------------
by the Borrower;
44
(viii) Title Insurance. Fully paid mortgagee title insurance
---------------
policies, endorsed to be effective no later than the Effective
Date, in standard ALTA form, issued by a title insurance
company satisfactory to the Administrative Agent, each in an
amount equal to not less than the fair market value of the
properties encumbered by the respective Mortgages and insuring
the validity and priority of the mortgage Liens thereon in
favor of the Administrative Agent for the benefit of the
Lenders, with no exceptions (including survey exceptions)
which the Administrative Agent shall not have approved in
writing and with such endorsements thereto as the
Administrative Agent shall deem necessary or desirable, in its
reasonable determination, to protect its interest in such
property or its rights and remedies under the Credit
Documents;
(ix) Surveys. If required by the Administrative Agent, a survey
-------
with respect to each parcel of real property comprising a part
of the Collateral, which survey shall include an accurate
metes and bounds or lot, block and parcel description of such
property otherwise satisfactory to the Administrative Agent in
all respects;
(x) Certificates of Title. Vehicle certificates of title, issued
---------------------
by the appropriate state governmental authorities
acknowledging the Administrative Agent's perfected, first
priority Lien on all vehicles listed on Part 2 of Schedule
--------
6.01(s) hereto, subject to no other Liens noted on such
------
certificates;
(xi) Insurance. Copies of each Credit Party's property damage
---------
insurance policies, together with loss payable endorsements
which are acceptable to the Administrative Agent and which
name the Administrative Agent as sole loss payee thereunder,
and copies of each Credit Party's liability insurance
policies, together with endorsements naming the Administrative
Agent as an additional named insured thereunder;
(xii) Loan Disbursement Instructions. Written instructions from the
------------------------------
Credit Parties to the Administrative Agent directing the
application of proceeds of the initial Loan made pursuant to
this Agreement; and
(xiii) Opinion of Credit Parties' Counsel. The favorable written
----------------------------------
opinion of ▇▇▇▇▇▇▇, Mag & Fizzell, P.C., counsel to the Credit
Parties, to the Administrative Agent regarding the Credit
Parties, the Credit Documents and the transactions
contemplated by the Credit Documents, substantially in the
form of Exhibit L hereto.
---------
(b) Conditions Precedent. The satisfaction, in the Administrative
--------------------
Agent's sole judgment, of each of the following conditions precedent:
(i) President's Certificate. Receipt by the Administrative Agent
-----------------------
of (A) a certificate of the president of each of the Credit
Parties, as applicable, dated the Effective Date and
certifying with respect to each applicable
45
Credit Party, (1) that attached thereto is a true and complete
copy of the articles of incorporation, articles of
organization or certificate of partnership, as applicable, and
all amendments thereto of each of them, certified as of a
recent date by the appropriate Governmental Authority in its
jurisdiction of organization, (2) that attached thereto is a
true and complete copy of the operating agreement, by-laws,
partnership or equivalent document, as applicable, of each
applicable Credit Party in effect on the Effective Date and at
all times since a date prior to the date of the resolutions
described in clause (3) below, (3) that attached thereto is a
true and complete copy of resolutions or consents, as
applicable, duly adopted by the respective governing boards of
each applicable Credit Party authorizing, as applicable, the
execution, delivery and performance of the Credit Documents to
which it is party and, in the case of the Borrower, the
borrowings hereunder, and that such resolutions have not been
modified, rescinded or amended and are in full force and
effect, (4) that the organizational documents of each
applicable Credit Party have not been amended since the date
of the last amendment thereto shown on the certificate of good
standing attached thereto and (5) as to the incumbency and
specimen signature of each officer executing any Credit
Document or any other document delivered in connection
herewith on its behalf; and (B) a certificate of another
officer as to the incumbency and specimen signature of such
president executing the certificate pursuant to (A) above;
(ii) Officer's Certificate. Receipt by the Administrative Agent of
---------------------
a certificate from the chief executive officer or chief
financial officer of each Credit Party, as applicable, in form
and substance satisfactory to the Administrative Agent, to the
effect that all representations and warranties of each Credit
Party contained in this Agreement and the other Credit
Documents are true, correct and complete; that the applicable
Credit Party is not in violation of any of the covenants
contained in this Agreement and the other Credit Documents;
that, after giving effect to the transactions contemplated by
this Agreement, no Default or Event of Default has occurred
and is continuing; and that the applicable Credit Party has
satisfied each of the conditions precedent set forth in this
Section 5.02;
------------
(iii) Material Adverse Change. Since each of the dates of the
-----------------------
financial statements referred to in Sections 5.02(b)(vi),
--------------------
there shall not have occurred any material adverse change in
the business, financial condition or results of operations of
Inergy, L.P., the Borrower or the Borrower and its
Subsidiaries taken as a whole, or the existence or value of
any Collateral or any other event, condition or state of facts
which would reasonably be expected to materially and adversely
affect the actual or prospective business, financial condition
or operations of Inergy, L.P., the Borrower or the Borrower
and its Subsidiaries taken as a whole;
(iv) Proceedings. No action, proceeding, investigation, regulation
-----------
or legislation shall have been instituted, threatened or
proposed before any court,
46
government agency or legislative body to enjoin, restrain or
prohibit, or to obtain damages in respect of, or which is
related to or arises out of this Agreement or the other Credit
Documents or the consummation of the transactions contemplated
hereby or thereby or which, in the Administrative Agent's
reasonable determination, would prohibit the making of the
Loans or the issuances of Letters of Credit or could
reasonably be expected to result in any such prohibition or
have a material adverse effect on Inergy, L.P., the Borrower
or the Borrower and its Subsidiaries taken as a whole;
(v) Fees. The Credit Parties, as applicable, shall have paid to
----
the Administrative Agent and the Lenders the fees set forth or
referenced in this Agreement and any other accrued and unpaid
fees, expenses or commissions due hereunder (including,
without limitation, legal fees and expenses of counsel to the
Administrative Agent), and to any other Person such amount as
may be due thereto in connection with the transactions
contemplated hereby, including all taxes, fees and other
charges in connection with the execution, delivery, recording,
filing and registration of any of the Credit Documents;
(vi) Good Standing Certificates. Receipt by the Administrative
--------------------------
Agent of a certificate of good standing for each Credit Party,
as applicable, dated on or immediately prior to the Closing
Date, from the Secretary of State of the state of organization
of the applicable Credit Party and from all states in which
the applicable Credit Party is required to obtain a
certificate of good standing or like certificate due to the
nature of its operations in such state;
(vii) Financial Statements. Receipt by the Administrative Agent of
--------------------
(A) proforma financial statements as of March 31, 2001 giving
effect to the Restructuring, which demonstrate, in the
Administrative Agent's reasonable judgment, together with all
other information then available to the Administrative Agent,
that the Borrower can repay its debts and satisfy its other
obligations as and when they become due, and can comply with
the financial covenants contained in this Agreement, (B) such
information as the Administrative Agent may reasonably request
to confirm the tax, legal, and business assumptions made in
such proforma financial statements, (C) unaudited consolidated
financial statements of Inergy Partners and its Consolidated
Subsidiaries for the fiscal quarter ended March 31, 2001 and
(D) such other information as the Administrative Agent, or the
Lenders, through the Administrative Agent, may reasonably
request;
(viii) Solvency Certificate. Receipt by the Administrative Agent of a
--------------------
certificate, in form and substance satisfactory to the
Administrative Agent, certified as accurate by the chief
executive officer or chief financial officer of each Credit
Party, as applicable, that the applicable Credit Party is
Solvent;
47
(ix) Consents. Receipt by the Administrative Agent of a written
--------
representation from the Borrower that (i) all governmental,
shareholder, member, partner and third party consents and
approvals necessary or, in the reasonable opinion of the
Administrative Agent, desirable in connection with the
transactions contemplated hereby have been received and are in
full force and effect and (ii) no condition or requirement of
law exists which could reasonably be likely to restrain,
prevent or impose any material adverse condition on the
transactions contemplated hereby;
(x) Consummation of Restructuring. The Restructuring shall have
-----------------------------
been consummated;
(xi) Proceeds Received in Connection with Restructuring.
--------------------------------------------------
Simultaneously with the initial Extension of Credit, the
Borrower shall receive net proceeds of not less than
$25,000,000 (after deduction of reasonable and customary costs
and expenses incurred in connection with the Restructuring and
the consummation of the transactions contemplated hereby) from
the issuance by Inergy, L.P. of common units of Capital Stock
to the public. The net proceeds shall be applied as follows:
(i) first, to repayment in full of the Hoosier Subordinated
Debt and (ii) the balance to prepayment of the outstanding
Acquisition Loans;
(xii) Notice of Borrowing. Receipt by the Administrative Agent of a
-------------------
Notice of Borrowing from the Borrower in accordance with
Section 4.01(a), and a Notice of Account Designation
---------------
specifying the account or accounts to which the proceeds of
any Loans made after the Effective Date are to be disbursed;
(xiii) No Default; Representations and Warranties. As of the
------------------------------------------
Effective Date (i) there shall exist no Default or Event of
Default and (ii) all representations and warranties contained
herein and in the other Credit Documents shall be true and
correct in all material respects; and
(xiv) Other. Receipt by the Administrative Agent of all opinions,
-----
certificates and other instruments in connection with the
transactions contemplated by this Agreement satisfactory in
form and substance to the Lenders. The Lenders shall have
received copies of all other instruments and such other
evidence as the Lenders may reasonably request, in form and
substance satisfactory to the Lenders, with respect to the
transactions contemplated by this Agreement and the taking of
all actions in connection therewith.
48
SECTION 5.03. Conditions Precedent to All Extensions of Credit.
------------------------------------------------
The obligation of the Lenders and the Issuing Bank to make each Extension
of Credit under this Agreement (including, without limitation, the initial
Extension of Credit) shall be subject to the further conditions precedent that,
on the date of each such Extension of Credit:
(a) Continuation of Representations and Warranties. The representations
----------------------------------------------
and warranties contained in Article VI or otherwise made by the Credit Parties
in any Credit Document shall be true and correct, in all material respects, on
and as of such borrowing or issuance date with the same effect as if made on and
as of such date.
(b) No Existing Default. No Default or Event of Default shall have
-------------------
occurred and be continuing hereunder (i) on the borrowing date with respect to
such Loan or after giving effect to the Loans to be made on such date or (ii) on
the issue date with respect to such Letter of Credit or after giving affect to
such Letters of Credit on such date.
(c) Officer's Compliance Certificate; Additional Documents. The
------------------------------------------------------
Administrative Agent shall have received the current Officer's Compliance
Certificate and each additional document, instrument, legal opinion or other
item of information reasonably requested by it.
(d) Other. The Administrative Agent shall have received such other
-----
approvals, opinions or documents as it may reasonably request.
ARTICLE VI
----------
REPRESENTATIONS AND WARRANTIES OF THE BORROWER
----------------------------------------------
SECTION 6.01. Representations and Warranties.
------------------------------
To induce the Administrative Agent and the Lenders to enter into this
Agreement and the other Credit Documents and to induce the Lenders to make the
Extensions of Credit, the Borrower hereby represents and warrants to the
Administrative Agent and the Lenders both before and after giving effect to the
transactions contemplated hereunder that:
(a) Organization; Power; Qualification.
----------------------------------
(i) Each Credit Party is duly organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation
or formation, has the power and authority to own its properties
and to carry on its business as now being and hereafter proposed
to be conducted and is duly qualified and authorized to do
business in each jurisdiction in which the character of its
properties or the nature of its business requires such
qualification and authorization, except where the failure to so
qualify would not have a Material Adverse Effect. The
jurisdictions of formation and the jurisdictions in which Inergy,
L.P., the Borrower and each Subsidiary of the Borrower is
organized and qualified to do business are described on Part 1 of
Schedule 6.01(a) hereto.
----------------
49
(ii) Each Subsidiary of the Borrower is listed on Part 2 of
Schedule 6.01(a) hereto.
----------------
(b) Ownership.
----------
(i) The capitalization of [Inergy, L.P.,] the Borrower and each
Subsidiary of the Borrower consists of the Capital Stock, authorized,
issued and outstanding, of such classes and series, with or without par
value, described on Schedule 6.01(b) hereto. All such outstanding Capital
----------------
Stock has been duly authorized and validly issued and are fully paid and
nonassessable.
(ii) The owners of the Capital Stock of Inergy, L.P., the Borrower
and each Subsidiary of the Borrower and the percentage of Capital Stock
owned by each are described on Schedule 6.01(b) hereto.
----------------
(iii) There are no outstanding warrants, subscriptions, options,
securities, instruments or other rights of any type or nature whatsoever, which
are convertible into, exchangeable for or otherwise provide for or permit the
issuance of, Capital Stock of the Borrower or any Subsidiary of the Borrower or
are otherwise exercisable by any Person.
(c) Authorization of Agreement, Credit Documents and Borrowing. Each of
----------------------------------------------------------
the Credit Parties has the right, power and authority and has taken all
necessary corporate and other action to authorize the execution, delivery and
performance of this Agreement and each of the other Credit Documents to which it
is a party in accordance with their respective terms. This Agreement and each of
the other Credit Documents have been duly executed and delivered by the duly
authorized officers of each Credit Party thereto, and each such Credit Document
constitutes the legal, valid and binding obligation of the Credit Party thereto,
enforceable in accordance with its terms, except as such enforcement may be
limited by bankruptcy, insolvency, reorganization, moratorium or similar state
or federal debtor relief laws from time to time in effect which affect the
enforcement of creditors' rights in general and the availability of equitable
remedies.
(d) Compliance of Agreement, Credit Documents and Borrowing with Laws,
------------------------------------------------------------------
Etc. The execution, delivery and performance by the Credit Parties of the Credit
---
Documents to which each such Person is a party, in accordance with their
respective terms, the borrowings hereunder and the transactions contemplated
hereby and under the other Credit Documents do not and will not, by the passage
of time, the giving of notice or otherwise, (i) require any Governmental
Approval or violate any Applicable Law relating to any Credit Party, (ii)
conflict with, result in a breach of or constitute a default under the articles
of incorporation, bylaws or other organizational documents of any Credit Party
or any indenture, agreement or other instrument to which such Person is a party
or by which any of its properties may be bound or any Governmental Approval
relating to such Person, or (iii) result in or require the creation or
imposition of any Lien upon or with respect to any property now owned or
hereafter acquired by such Person other than Liens arising under the Credit
Documents.
50
(e) Compliance with Law; Governmental Approvals. Each Credit Party (i)
-------------------------------------------
has all Governmental Approvals required by any Applicable Law for it to conduct
its business, each of which is in full force and effect, is final and not
subject to review on appeal and is not the subject of any pending or, to the
best of its knowledge, threatened attack by direct or collateral proceeding, and
(ii) is in compliance with each Governmental Approval applicable to it and in
compliance with all other Applicable Laws relating to it or any of its
respective properties, except, in each case, to the extent that such non-
compliance would not have a Material Adverse Effect.
(f) Tax Returns and Payments. Each Credit Party has duly filed or caused
------------------------
to be filed all material federal, state and local tax returns required by
Applicable Law to be filed, and has paid, or made adequate provision for the
payment of, all federal, state, local and other taxes, assessments and
governmental charges or levies upon it and its property, income, profits and
assets which are due and payable, other than those the validity of which the
applicable Credit Party is contesting in good faith by appropriate proceedings
and with respect to which the applicable Credit Party shall, to the extent
required by GAAP, have set aside on its books adequate reserves. No Governmental
Authority has asserted any Lien or other claim against any Credit Party with
respect to unpaid taxes which has not been discharged or resolved. The charges,
accruals and reserves on the books of Credit Parties in respect of federal,
state, local and other taxes for all Fiscal Years and portions thereof since the
organization of each such Credit Party are in the judgment of the Borrower
adequate, and the Borrower does not anticipate any additional taxes or
assessments for any of such years.
(g) Intellectual Property Matters. Each Credit Party owns or possesses
-----------------------------
rights to use all franchises, licenses, copyrights, copyright applications,
patents, patent rights or licenses, patent applications, trademarks, trademark
rights, trade names, trade name rights, copyrights and rights with respect to
the foregoing which are required to conduct its business. No event has occurred
which permits, or after notice or lapse of time or both would permit, the
revocation or termination of any such rights, and no Credit Party is liable to
any Person for infringement under Applicable Law with respect to any such rights
as a result of its business operations.
(h) Environmental and Safety Matters. Each Credit Party has complied in
--------------------------------
all respects with all Environmental Laws except for violations that either alone
or in the aggregate could not reasonably be expected to result in a Material
Adverse Effect. No Credit Party manages or handles any hazardous wastes,
hazardous substances, hazardous materials, toxic substances or toxic pollutants
referred to in or regulated by Environmental Laws in violation of such laws or
of any other applicable law where such violation could reasonably be expected to
result, individually or together with other violations, in a Material Adverse
Effect. There are no outstanding or threatened citations, notices or orders of
non-compliance issued to any Credit Party or relating to its facilities,
leaseholds, assets or other property. Each Credit Party has been issued all
licenses, certificates, permits or other authorizations required under any
Environmental Law or by any federal, state or local governmental or quasi-
governmental entity. There are no liabilities or contingent liabilities relating
to environmental or employee health and safety matters (including on-site or
off-site contamination) relating to any Credit Party or any property owned,
leased or used by any Credit Party, which, individually or in the aggregate,
could reasonably be expected to result in a Material Adverse Effect.
51
(i) ERISA. The Borrower and each ERISA Affiliate is in material
-----
compliance with all applicable provisions of ERISA and the regulations and
published interpretations thereunder.
(j) Margin Stock. No Credit Party is engaged principally or as one of its
------------
activities in the business of extending credit for the purpose of "purchasing"
or "carrying" any "margin stock" (as each such term is defined or used in the
regulations of the Board of Governors of the Federal Reserve System). No part of
the proceeds of any of the Loans will be used for purchasing or carrying margin
stock in violation of, or for any purpose which violates, the provisions of
Regulation T, U or X of such Board of Governors.
(k) Government Regulation. No Credit Party is an "investment company" or
---------------------
a company "controlled" by an "investment company" (as each such term is defined
or used in the Investment Company Act of 1940, as amended) and neither the
Borrower nor any of its Subsidiaries is, or after giving effect to any Extension
of Credit will be, subject to regulation under the Public Utility Holding
Company Act of 1935 or the Interstate Commerce Act, each as amended, or any
other Applicable Law which limits its ability to incur or consummate the
transactions contemplated hereby.
(l) Agreements. (i) No Credit Party is a party to any agreement or
----------
instrument or subject to any restriction in its organizational documents that
(i) will have the effect of prohibiting or restraining, or will impose adverse
conditions upon, any of the transactions contemplated hereby or in the other
Credit Documents or the payment of dividends or the making of any loans,
investments or transfers by any Subsidiary to or in the Borrower or (ii) has
resulted or could reasonably be expected to result in a Material Adverse Effect.
(m) Absence of Defaults. No event has occurred or is continuing which
-------------------
constitutes a Default or an Event of Default, or which constitutes, or which
with the passage of time or giving of notice or both would constitute, a default
or event of default by any Credit Party under any material agreement or
contract, judgment, decree or order by which any Credit Party or any of their
respective properties may be bound or which would require a Credit Party to make
any payment thereunder prior to the scheduled maturity date therefore, where
such default could reasonably be expected to result in a Material Adverse
Effect.
(n) Employee Relations. No Credit Party is party to any collective
------------------
bargaining agreement nor has any labor union been recognized as the
representative of its employees. There are no strikes against any Credit Party
pending or, to the best knowledge of the Borrower, threatened. The hours worked
and payments made to employees of each Credit Party have not been in violation
of the Fair Labor Standards Act or any other Applicable Law dealing with such
matters except for violations that either alone or in the aggregate could not
reasonably be expected to result in a Material Adverse Effect. All material
payments due from a Credit Party, or for which any claim may be made against a
Credit Party, on account of wages and employee health and welfare insurance and
other benefits have been paid or accrued as a liability on the books of the
applicable Credit Party, in compliance with GAAP.
(o) Burdensome Provisions. No Credit Party is subject to any Governmental
---------------------
Approval or Applicable Law which is so unusual or burdensome as in the
foreseeable future
52
could be reasonably expected to have a Material Adverse Effect. The Borrower
does not presently anticipate that future expenditures of the Credit Parties
needed to meet the provisions of any statutes, orders, rules or regulations of a
Governmental Authority will be so burdensome as to have a Material Adverse
Effect.
(p) Financial Statements. (i) The unaudited consolidated balance sheets
--------------------
of Inergy Partners and its Consolidated Subsidiaries as of March 31, 2001, and
the related statements of income and retained earnings and cash flows for the
fiscal quarter then ended and (ii) the audited consolidated balance sheets of
Inergy Partners and its Consolidated Subsidiaries as of September 30, 2000, and
the related statements of income and retained earnings and cash flows for the
Fiscal Year then ended, copies of which have been furnished to the
Administrative Agent and each Lender, are each complete and correct and fairly
present the assets, liabilities and financial position of the Borrower and its
Consolidated Subsidiaries as of such dates, and the results of the operations
and changes of financial position for the periods then ended in accordance with
GAAP. All such financial statements, including the related schedules and notes
thereto, have been prepared in accordance with GAAP. The Borrower and its
Subsidiaries have no Debt, obligation or other unusual forward or long-term
commitment which is not fairly reflected in the foregoing financial statements
or in the notes thereto.
(q) No Material Adverse Change. Since March 31, 2001, no event has
--------------------------
occurred or condition arisen that could reasonably be expected to have a
Material Adverse Effect.
(r) Solvency. As of the Closing Date and after giving effect to each
--------
Extension of Credit made hereunder, Inergy, L.P., the Borrower and each of the
Subsidiaries of the Borrower will be Solvent.
(s) Titles to Properties.
--------------------
(i) Each Credit Party has good and marketable title to all assets
and other property purported to be owned by it.
(ii) Set forth on Part 1 of Schedule 6.01(s) hereto is a complete
list by Credit Party of each parcel of real property by street
address owned or leased by a Credit Party.
(iii) Set forth on Part 2 of Schedule 6.01(s) hereto is a complete
list by Credit Party of all motor vehicles owned by a Credit
Party.
(t) Liens. None of the properties and assets of the Credit Parties is
-----
subject to any Lien, except Permitted Liens. The Administrative Agent, for the
benefit of the Lenders, has a perfected first priority Lien on all of the
Collateral subject to no other Liens except for Permitted Liens.
(u) Debt and Permitted Investments. No Credit Party has any Debt other
------------------------------
than Permitted Debt. No Credit Party has made any Investments other than
Investments permitted under Section 10.03 of this Agreement.
-------------
53
(v) Litigation. There are no actions, suits or proceedings pending nor,
----------
to the knowledge of the Borrower, threatened against or in any other way
relating adversely to or affecting any Credit Party or any Credit Party's
respective properties in any court or before any arbitrator of any kind or
before or by any Governmental Authority, except for actions, suits or
proceedings that, if adversely determined, could, individually or in the
aggregate, not reasonably be expected to result in a Material Adverse Effect.
(w) Fiscal Year. The Fiscal Year of each Credit Party begins on October
-----------
1 and ends on September 30 of the following calendar year.
(x) Accuracy and Completeness of Information. All written information,
----------------------------------------
reports and other papers and data produced by or on behalf of each Credit Party
and furnished to the Administrative Agent and the Lenders were, at the time the
same were so furnished, complete and correct in all material respects. No
document furnished or written statement made to the Administrative Agent or the
Lenders by any Credit Party in connection with the negotiation, preparation or
execution of this Agreement or any of the Credit Documents contains or will
contain any untrue statement of a fact material to the creditworthiness of any
Credit Party or omits or will omit to state a fact necessary in order to make
the statements contained therein not misleading.
SECTION 6.02. Survival of Representations and Warranties, Etc.
-----------------------------------------------
All representations and warranties set forth in this Article VI and all
representations and warranties contained in any certificate, or any of the
Credit Documents (including, but not limited to, any such representation or
warranty made in or in connection with any amendment thereto) shall constitute
representations and warranties made under this Agreement. All representations
and warranties made under this Agreement shall be made or deemed to be made at
and as of the Closing Date, shall survive the Closing Date and shall not be
waived by the execution and delivery of this Agreement, any investigation made
by or on behalf of the Lenders or any borrowing hereunder.
ARTICLE VII
FINANCIAL INFORMATION AND NOTICES
Until all the Obligations have been finally and indefeasibly paid and
satisfied in full and the Commitments terminated, unless consent has been
obtained in the manner set forth in Section 13.11, the Borrower will furnish or
-------------
cause to be furnished to the Administrative Agent and to the Lenders at their
respective addresses as set forth on Schedule 1.01B hereto, or such other office
--------------
as may be designated by the Administrative Agent and Lenders from time to time:
SECTION 7.01. Monthly Financial Statements.
----------------------------
(a) As soon as practicable and in any event within thirty (30) days after
the end of each month, unaudited consolidated and consolidating balance sheet of
Inergy, L.P. and its Consolidated Subsidiaries as of the close of such month and
unaudited consolidated and consolidating statements of income, retained earnings
and cash flows for the month then ended and that portion of the Fiscal Year then
ended, all in reasonable detail setting forth in
54
comparative form the corresponding figures for the preceding Fiscal Year and
prepared by Inergy, L.P. in accordance with GAAP and, if applicable, containing
disclosure of the effect on the financial position or results of operations of
any change in the application of accounting principles and practices during the
period, and certified by a Financial Officer of Inergy, L.P. to (i) present
fairly in all material respects the financial condition of Inergy, L.P. and its
consolidated Subsidiaries as of their respective dates and the results of
operations of Inergy, L.P. and its Consolidated Subsidiaries for the respective
periods then ended, and (ii) having been prepared in accordance with GAAP other
than the absence of footnotes and subject to year-end audit and adjustments.
(b) Borrowing Base Certificates; ▇▇▇▇-to-Market Reports.
--------------------------------------------------------
(i) Prior to any borrowing hereunder, but at least monthly, a
borrowing base certificate in substantially the form of Exhibit F
showing, as of the close of business on the day prior to any
borrowing or on the last day of such month the Borrowing Base. No
later than thirty (30) days after the end of each month, reports,
in form and substance satisfactory to the Administrative Agent,
of the Borrower's and its Consolidated Subsidiaries' agings of
accounts receivable and inventory.
(ii) Upon request and no later than fifteen (15) days after the end of
each month, a ▇▇▇▇-to-market report of the Borrower and its
Consolidated Subsidiaries for the prior month, in form and
substance satisfactory to the Administrative Agent.
(c) Quarterly Financial Statements.
-----------------------------------
(i) As soon as practicable and in any event within forty-five (45)
days after the end of each of the first three fiscal quarters,
unaudited consolidated and consolidating balance sheet of Inergy,
L.P. and its Consolidated Subsidiaries as of the close of such
fiscal quarter and unaudited consolidated and consolidating
statements of income, retained earnings and cash flows for the
fiscal quarter then ended and that portion of the Fiscal Year
then ended, all in reasonable detail setting forth in comparative
form the corresponding figures for the preceding Fiscal Year and
prepared by Inergy, L.P. in accordance with GAAP other than the
absence of footnotes and subject to year-end audit and
adjustments and, if applicable, containing disclosure of the
effect on the financial position or results of operations of any
change in the application of accounting principles and practices
during the period, and certified by a Financial Officer of
Inergy, L.P. to present fairly in all material respects the
financial condition of Inergy, L.P. and its Consolidated
Subsidiaries as of their respective dates and the results of
operations of Inergy, L.P. and its Consolidated Subsidiaries for
the respective periods then ended other than the absence of
footnotes and subject to year-end audit and adjustments. For
purposes hereof, the delivery of Inergy, L.P.'s appropriately
completed Quarterly Report on Form 10-Q will be sufficient in
lieu of
55
delivery of the consolidated financial statements of Inergy, L.P.
and its Consolidated Subsidiaries.
(ii) As soon as practicable and in any event within forty-five (45)
days after the end of each of the first three fiscal quarters,
unaudited consolidated balance sheet of the Borrower and its
Consolidated Subsidiaries as of the close of such fiscal quarter
and unaudited consolidated statements of income, retained
earnings and cash flows for the fiscal quarter then ended and
that portion of the Fiscal Year then ended, all in reasonable
detail setting forth in comparative form the corresponding
figures for the preceding Fiscal Year and prepared by the
Borrower in accordance with GAAP other than the absence of
footnotes and subject to year-end audit and adjustments and, if
applicable, containing disclosure of the effect on the financial
position or results of operations of any change in the
application of accounting principles and practices during the
period, and certified by a Financial Officer of the Borrower to
present fairly in all material respects the financial condition
of the Borrower and its Consolidated Subsidiaries as of their
respective dates and the results of operations of the Borrower
and its Consolidated Subsidiaries for the respective periods then
ended other than the absence of footnotes and subject to year-end
audit and adjustments.
(d) Applicable Margin Calculation Certificate. As soon as available and in
-----------------------------------------
any event within thirty (30) days after the end of each fiscal
quarter, the Applicable Margin Calculation Certificate for the
Borrower and its Consolidated Subsidiaries for such fiscal quarter.
(e) Annual Financial Statements.
---------------------------
(i) As soon as practicable and in any event within ninety (90) days
after the end of each Fiscal Year, audited consolidated balance
sheet of Inergy, L.P. and its Consolidated Subsidiaries as of the
close of such Fiscal Year and audited consolidated statements of
income, retained earnings and cash flows for the Fiscal Year then
ended, including the notes thereto, all in reasonable detail
setting forth in comparative form the corresponding figures for
the preceding Fiscal Year and audited by Ernst & Young, LLP or
other independent certified public accountants of national
standing reasonably acceptable to the Administrative Agent in
accordance with GAAP and, if applicable, containing disclosure of
the effect on the financial position or results of operation of
any change in the application of accounting principles and
practices during the year, and accompanied by a report thereon by
such certified public accountants that is not qualified with
respect to scope limitations imposed by Inergy, L.P. or any of
its Consolidated Subsidiaries or with respect to accounting
principles followed by Inergy, L.P. or any of its Consolidated
Subsidiaries not in accordance with GAAP and there exists no
Event of Default under Article IX of this Agreement. For purposes
hereof, the delivery of Inergy, L.P.'s
56
appropriately completed Annual Report on Form 10-K will be
sufficient in lieu of delivery of the consolidated financial
statements of Inergy, L.P. and its Consolidated Subsidiaries.
(ii) As soon as practicable and in any event within ninety (90) days
after the end of each Fiscal Year, unaudited consolidating
balance sheet of Inergy, L.P. and its Consolidated Subsidiaries
as of the close of such Fiscal Year and unaudited consolidating
statements of income, retained earnings and cash flows for the
Fiscal Year then ended, including the notes thereto, all in
reasonable detail setting forth in comparative form the
corresponding figures for the preceding Fiscal Year, certified
by a Financial Officer of Inergy Partners as having been
prepared in accordance with GAAP.
(iii) As soon as practicable and in any event within ninety (90) days
after the end of each Fiscal Year, audited consolidated balance
sheet of the Borrower and its Consolidated Subsidiaries as of
the close of such Fiscal Year and audited consolidated
statements of income, retained earnings and cash flows for the
Fiscal Year then ended, including the notes thereto, all in
reasonable detail setting forth in comparative form the
corresponding figures for the preceding Fiscal Year, and audited
by Ernst & Young, LLP or other independent certified public
accountants of national standing reasonably acceptable to the
Administrative Agent in accordance with GAAP and, if applicable,
containing disclosure of the effect on the financial position or
results of operation of any change in the application of
accounting principles and practices during the year, and
accompanied by a report thereon by such certified public
accountants that is not qualified with respect to scope
limitations imposed by the Borrower or any of its Consolidated
Subsidiaries or with respect to accounting principles followed
by the Borrower or any of its Consolidated Subsidiaries not in
accordance with GAAP and there exists no Event of Default under
Article IX of this Agreement.
(f) Annual Budget. As soon as practicable and in any event within thirty
-------------
(30) days prior to the end of each Fiscal Year, a budget approved by
the board of directors (or analogous governing board of the Borrower)
for the next Fiscal Year, setting forth detailed quarterly projections
of the earnings and expenditures of the Borrower and its Consolidated
Subsidiaries for such next Fiscal Year.
(g) Officer's Compliance Certificate. At each time financial statements
--------------------------------
are delivered pursuant to Sections 7.01(c) or (e), a certificate of a Financial
---------------- ---
Officer of Inergy, L.P. or the Borrower, as applicable in the form of Exhibit E
---------
attached hereto (an "Officer's Compliance Certificate").
SECTION 7.02. Notice of Litigation and Other Matters.
--------------------------------------
Promptly (but in no event later than ten (10) days after an officer of a
Credit Party obtains knowledge thereof) telephonic and written notice of:
57
(a) the commencement of all proceedings and investigations by or before
any Governmental Authority and all actions and proceedings in any court or
before any arbitrator against or involving any Credit Party or any of their
respective properties, assets or businesses, which, if adversely determined,
could reasonably be expected to have a Material Adverse Effect;
(b) any notice of any violation received by any Credit Party from any
Governmental Authority including, without limitation, any notice of violation of
Environmental Laws or ERISA which in any such case could reasonably be expected
to have a Material Adverse Effect;
(c) any labor controversy that has resulted in a strike or other work
action against any Credit Party that could reasonably be expected to have a
Material Adverse Effect;
(d) any dispositions of any Collateral or other assets or property of any
Credit Party (other than in the ordinary course of its business) within ten (10)
days of the disposition thereof;
(e) any Default or Event of Default;
(f) any event which makes any of the representations set forth in Section
-------
6.01 inaccurate in any respect;
----
(g) any other development that has resulted in, or could reasonably be
expected to result in a Material Adverse Effect;
(h) promptly upon receipt thereof, copies of all reports, if any,
submitted to any Credit Party or its respective board of directors (or analogous
governing body) by its respective independent public accountants in connection
with their auditing function, including, without limitation, accountant letters,
management reports and management responses thereto; and
(i) such other information regarding the operations, business affairs and
financial condition of the Credit Parties as the Administrative Agent or any
Lender may reasonably request.
SECTION 7.03. Accuracy of Information.
-----------------------
All written information, reports, statements and other papers and data
furnished by or on behalf of the Borrower or any of the other Credit Parties to
the Administrative Agent or any Lender (other than financial forecasts) whether
pursuant to this Article VII or any other provision of this Agreement, or any
other of the Credit Documents, shall be, at the time the same is so furnished,
complete and correct in all material respects to the extent necessary to give
the Administrative Agent or any Lender complete, true and accurate knowledge of
the subject matter based on the Borrower's knowledge thereof.
58
ARTICLE VIII
AFFIRMATIVE COVENANTS
Until the Obligations have been finally and indefeasibly paid and satisfied
in full and the Commitments terminated, unless consent has been obtained in the
manner provided for in Section 13.11, the Borrower will, and will cause each of
-------------
its Subsidiaries to:
SECTION 8.01. Existence; Businesses and Properties.
------------------------------------
(i) Carry on and conduct its principal business substantially as it is
now being conducted, (ii) maintain in good standing its existence and its right
to transact business in those states in which it is now or may after the Closing
Date be doing business; and (iii) maintain all licenses, permits and
registrations necessary to the conduct of its business, except where the failure
to so maintain its right to transact business or to maintain such licenses,
permits or registrations would not have a Material Adverse Effect.
SECTION 8.02. Insurance.
---------
Keep insured at all times with financially sound and reputable insurers
which are satisfactory to the Administrative Agent (i) all of its property of an
insurable nature (other than residential tanks and racks and cylinders on a
cylinder exchange program), including, without limitation, all real estate,
equipment, fixtures and inventories, against fire and other casualties in such a
manner and to the extent that like properties are usually insured by others
owning properties of a similar character in a similar locality or as otherwise
required by the Administrative Agent, with the proceeds of such casualty
insurance payable to the Administrative Agent for the benefit of the Lenders,
and (ii) against liability on account of damage to persons or property
(including product liability insurance and all insurance required under all
applicable worker's compensation laws) caused by it or its officers, members,
employees, agents or contractors in such a manner and to the extent that like
risks are usually insured by others conducting similar businesses in the places
where it conducts its business or as otherwise required by the Administrative
Agent. The Borrower shall cause the insurers under all of its and its
Subsidiaries' insurance policies to (a) provide the Administrative Agent at
least thirty (30) days prior written notice of the termination of any such
policy before such termination shall be effective and (b) agree to such other
matters in respect of any such casualty insurance as provided in the
Administrative Agent's loss payee endorsement. In addition, the Borrower will,
upon request of the Administrative Agent at any time, furnish a written summary
of the amount and type of insurance carried by the Borrower and its
Subsidiaries, the names of the insurers and the policy numbers, and deliver to
the Administrative Agent certificates with respect thereto.
SECTION 8.03. Payment of Taxes; Etc.
---------------------
Pay and discharge, before they become delinquent, all taxes, assessments
and other governmental charges imposed upon it, its properties, or any part
thereof, or upon the income or profits therefrom and all claims for labor,
materials or supplies which if unpaid might be or become a Lien or charge upon
any of its property and other material obligations, except such
59
items as it is in good faith appropriately contesting and as to which adequate
reserves have been provided to the Administrative Agent's satisfaction.
SECTION 8.04. Maintenance of Properties and Leases.
------------------------------------
(i) Maintain, preserve and keep its properties and every part thereof in
good repair, working order and condition (except for such properties as the
Borrower in good faith determines are not useful in the conduct of its or its
Subsidiaries' business); (ii) from time to time make all necessary and property
repairs, renewals, replacements, additions and improvements thereto so that at
all times the efficiency thereof shall be fully preserved and maintained, and
(iii) maintain all leases of real or personal property in good standing, free of
any defaults by the Credit Party that is party thereto.
SECTION 8.05. Employee Benefits.
-----------------
(i) Notify the Administrative Agent promptly of the establishment or
joinder of any Plan, except that prior to the establishment of any "welfare
plan" (as defined in Section 3(l) of ERISA) covering any employee of any Credit
Party for any period after such employee's termination of employment other than
such period required by the Consolidated Omnibus Budget Reconciliation Act of
l986 or "defined benefit plan" (as defined in Section 3(35) of ERISA) or joinder
of, or contribution to, any multiemployer plan as defined under Section 3(37) of
ERISA, it will obtain the Administrative Agent's prior written approval of such
establishment; (ii) at all times make prompt payments or contributions to meet
the minimum funding standards of Section 412 of the Internal Revenue Code of
1986, as amended, with respect to each Plan; (iii) promptly after the filing
thereof, furnish to the Administrative Agent a copy of any report required to be
filed pursuant to Section 103 of ERISA in connection with each Plan for each
Plan year, including but not limited to the Schedule B attached thereto, if
applicable; (iv) notify the Administrative Agent promptly of any "reportable
event" (as defined in Section 4043 of ERISA) or any circumstances arising in
correction with any Plan which might constitute grounds for the termination
thereof by the Pension Benefit Guaranty Corporation or for the appointment by
the appropriate United States District Court of a, trustee to administer the
Plan, the initiation of any audit or inquiry by the Internal Revenue Service or
the Department of Labor of any Plan or transaction(s) involving or related to
any Plan, or any "prohibited transactions" as defined in Section 406 of ERISA or
Section 4975(c) of the Internal Revenue Code of 1986, as amended; (v) notify the
Administrative Agent prior to any action that could result in the assertion of
liability under Subtitle E of Title IV of ERISA caused by the complete or
partial withdrawal from any multiemployer plan or to terminate any defined
benefit plan sponsored by a Credit Party; and (vi) promptly furnish such
additional information concerning any Plan as the Administrative Agent may from
time to time request.
SECTION 8.06. Books and Records; Inspection; Audits.
-------------------------------------
(i) Maintain complete and accurate books and financial records in
accordance with GAAP; (ii) during normal working hours permit the Administrative
Agent and Persons designated by the Administrative Agent to visit and inspect
its properties and to conduct any environmental tests or audits thereon, to
inspect its books and financial records (including its journals, orders,
receipts and correspondence which relates to its accounts receivable), and to
60
discuss its affairs, finances and accounts receivable and operations with its
members, officers, employees and agents and its independent public accountants
at the expense of the Borrower; and (iii) permit the Administrative Agent and
Persons designated by the Administrative Agent to perform audits of such books
and financial records at the expense of the Borrower when and as requested by
the Administrative Agent.
SECTION 8.07. Compliance with Laws.
--------------------
Comply with all applicable laws, rules and regulations, and all orders
of any Governmental Authority, applicable to it or any of its property,
business, operations or transactions (including ERISA and all Environmental
Laws), except where the failure to so comply could not reasonably be expected to
result in a Material Adverse Effect, and provide prompt written notice to the
Lenders following the receipt of any notice of any violation of any such laws,
rules, regulations or orders from any Governmental Authority charged with
enforcing the same where such violation could reasonably be expected to result
in a Material Adverse Effect.
SECTION 8.08. Use of Proceeds.
---------------
Use the proceeds of (i) the Working Capital Loans and Swingline Loans for
general corporate purposes of the Borrower and its Subsidiaries, other than
Permitted Acquisitions; and (ii) the Acquisition Loans for refinancing
indebtedness of the Borrower under the Existing Credit Agreement, Permitted
Acquisitions, Expansion Capital Expenditures and the payment of fees and
expenses incurred in connection with this Agreement and the other Credit
Documents and the transactions contemplated hereby and thereby.
SECTION 8.09. Preparation of Environmental Reports.
------------------------------------
If a Default caused by reason of a breach of Section 8.07 (as such Section
------------
relates to Environmental Laws) shall have occurred and be continuing, at the
request of the Required Lenders through the Administrative Agent, provide to
Lenders within forty-five (45) days after such request, at the expense of the
Borrower, an environmental site assessment report for the properties which are
the subject of such Default prepared by an environmental consulting firm
acceptable to the Administrative Agent and consented to by the Borrower (which
consent shall not be unreasonably withheld or delayed), indicating the presence
or absence of hazardous materials and the estimated cost of any compliance or
remedial action in connection with such properties.
SECTION 8.10. Location of Collateral.
----------------------
Keep all Collateral, other than inventory in transit, motor vehicles,
residential tanks and bulk storage tanks, at one or more of the locations set
forth on Schedule 8.10 hereto and not remove any such Collateral therefrom
-------------
except for, for so long as there exists no Event of Default, (i) inventory sold
in the ordinary course of business; (ii) dispositions of obsolete equipment to
the extent permitted under this Agreement and the other Credit Documents; and
(iii) the storage of inventory or equipment at locations within the continental
United States other than those described on Schedule 8.10 hereto provided that
-------------
(a) the Borrower shall take all necessary actions necessary for the
Administrative Agent's Lien on such inventory and equipment to continue to
61
be a perfected first priority Lien subject to no other Lien other than Permitted
Liens and (b) the Administrative Agent shall have received, prior to the
relocation of any such equipment or inventory, a landlord's waiver, acceptable
in form and content to the Administrative Agent, if the premises are leased, and
mortgagee's waivers, in each case acceptable in form and content to the
Administrative Agent, from all those who hold a mortgage or like Lien on such
premises.
SECTION 8.11. Federal Reserve Regulations.
---------------------------
No proceeds of any Loans shall be used to acquire or carry any Margin
Stock.
SECTION 8.12. Administrative Agent May Perform Obligations; Further
-----------------------------------------------------
Assurances.
----------
Permit the Administrative Agent on behalf of the Lenders, if the
Administrative Agent or the Required Lenders so elects in their sole discretion,
to pay or perform any of the Borrower's Obligations hereunder or under than
other Credit Documents and to reimburse the Administrative Agent, on demand, or,
if the Administrative Agent so elects, by the Administrative Agent making one or
more Loans (as the Administrative Agent may elect) on the Borrower's behalf and
charging the accounts of any Credit Party held by the Administrative Agent
accordingly, for all amounts expended by or on behalf of the Administrative
Agent in connection therewith, and all costs and expenses incurred by or on
behalf of the Administrative Agent in connection therewith. Each Borrower
further agrees to execute, deliver or perform, or cause to be executed,
delivered or performed, all such documents, agreements or acts, as the case may
be, as the Administrative Agent may reasonably request from time to time to
create, perfect, continue or otherwise assure the Administrative Agent with
respect to any Lien on all assets of each Credit Party or created or purported
to be created by any of the Credit Documents or to otherwise create, evidence,
assure or enhance the Administrative Agent's and the Lender's rights and
remedies under, or as contemplated by, the Credit Documents or at law or in
equity.
SECTION 8.13. Landlord Waivers.
----------------
To the extent not previously provided to the Administrative Agent, use
best efforts to provide to the Administrative Agent a duly executed landlord's
waiver, in form and substance satisfactory to the Administrative Agent, (i) from
each landlord who leases any real property to a Credit Party, including, without
limitation, each parcel of leased real property set forth on Part 1 of Schedule
--------
6.01(s) prior to the Closing Date and (ii) from each Landlord with whom a Credit
-------
Party enters into a lease after the Closing Date within fifteen (15) days of the
execution of such lease.
SECTION 8.14. Acquisition of Assets and Properties.
------------------------------------
All assets and properties acquired by the Borrower or any of its
Subsidiaries after the Closing Date shall be part of the Collateral securing the
payment and performance of the Obligations, and the Borrower or such Subsidiary,
as applicable, shall execute and deliver, or cause to be executed and delivered,
to the Administrative Agent, at the Borrower's reasonable expense, such
documents (including, without limitation, mortgages, deeds of trust, deeds to
secure debt, loan agreements, security agreements, UCC financing statements,
fixture filings, opinions of counsel, title insurance and endorsements) and
other assurances as the
62
Administrative Agent may request in order to create and perfect Liens in such
assets and properties in favor of the Administrative Agent, subject to no other
Liens other than Permitted Liens.
ARTICLE IX
FINANCIAL COVENANTS
Until all of the Obligations have been finally and indefeasibly paid and
satisfied in full and the Commitments terminated, unless consent has been
obtained in the manner set forth in Section 13.11, the Borrower will not:
-------------
SECTION 9.01. Consolidated EBITDA/Consolidated Interest Expense.
-------------------------------------------------
Permit, as of the last day of each fiscal quarter, the ratio of (i)
Consolidated EBITDA of the Borrower and its Consolidated Subsidiaries to (ii)
Consolidated Interest Expense of the Borrower and its Consolidated Subsidiaries,
in each case for the four fiscal quarters then most recently ended, to be less
than: (i) 2.25 to 1.00, for any fiscal quarter ending on or before December 31,
2001; and (ii) 2.50 to 1.00, for any fiscal quarter ending thereafter.
SECTION 9.02. Consolidated Leverage Ratio.
---------------------------
Permit, as of the last day of each fiscal quarter, the Consolidated
Leverage Ratio of the Borrower and its Consolidated Subsidiaries to be more
than: (a) 5.00 to 1.00, for any fiscal quarter ending on or before June 30,
2002; and (b) 4.50 to 1.00, for any fiscal quarter ending thereafter.
ARTICLE X
NEGATIVE COVENANTS
Until all of the Obligations have been finally and indefeasibly paid and
satisfied in full and the Commitments terminated, unless consent has been
obtained in the manner set forth in Section 13.11, the Borrower will not, and
-------------
will not cause or permit any of its Subsidiaries to:
SECTION 10.01. Liens.
-----
Create or suffer to exist any Lien, except for Permitted Liens, upon or
with respect to any of its assets or properties, whether such Person owns or has
an interest in such assets or properties on the Closing Date or at any time
thereafter.
SECTION 10.02. Debt.
----
Create or suffer to exist any Debt except for Permitted Debt.
63
SECTION 10.03. Restricted Investments.
----------------------
(a) Make or permit to exist any loans or advances to or any other
investment in any Person (including any equity holders of the Borrower or of any
of its Affiliates), except investments in (1) interest-bearing United States
Government obligations, (2) certificates of deposit issued by or time deposits
with any commercial bank organized and existing under the laws of the United
States or any state thereof having capital and surplus of not less than
$25,000,000, (3) prime commercial paper rated AAA by Standard and Poor's or
Prime P-1 by ▇▇▇▇▇'▇ Investor Service, Inc., or (4) agreements involving the
sale and guaranteed repurchase of United States Government securities. All
instruments and documents evidencing such investments shall be pledged to the
Administrative Agent promptly after the relevant Person's receipt thereof, shall
be security for the Obligations, and shall be Collateral hereunder.
(b) Acquire any assets or property of any other Person (other than a
Credit Party) other than (i) pursuant to a Permitted Acquisition, (ii) subject
to Section 8.16, in the ordinary course of business consistent with past
------------
practices and (iii) as part of a Capital Expenditure.
SECTION 10.04. Structure; Disposition of Assets.
--------------------------------
(i) Except for Permitted Acquisitions, merge or consolidate with or
otherwise acquire, or be acquired by, any other Person; and (ii) sell, lease or
otherwise transfer all or any part of its assets other than, for so long as
there exists no Event of Default, (a) the sale of inventory in the ordinary
course of such Person's business, (b) the disposition of obsolete equipment
subject to Section 4.02(d) hereof and (c) the sale of motor vehicles in the
---------------
ordinary course of such Person's business with the consent of the Administrative
Agent.
SECTION 10.05. Sale-Leasebacks; Subsidiaries; New Business.
-------------------------------------------
Enter into any sale and leaseback transaction with respect to any of its
properties or create any Subsidiary, or manufacture any goods, render any
services or otherwise enter into any business which is not substantially similar
to that existing on the Closing Date.
SECTION 10.06. Issuance of Securities.
----------------------
Issue any membership or other equity interests, or create any new class of
equity interests, or modify in any material respect the voting, liquidation or
other rights of any class of equity interests, or issue any other securities;
provided, however, the Borrower may issue Capital Stock.
SECTION 10.07. Conflicting Agreements.
----------------------
Enter into any agreement any term or condition of which conflicts with
any provision of this Agreement or the other Credit Documents.
64
SECTION 10.08. Changes in Accounting Principles; Fiscal Year.
---------------------------------------------
Make any change in its principles or methods of accounting as currently in
effect, except such changes as are required by GAAP, nor, without first
obtaining the Administrative Agent's written consent, change its Fiscal Year.
SECTION 10.09. Transactions With Affiliates.
----------------------------
Enter into or be a party to any transaction or arrangement, including
without limitation, the purchase, sale or exchange of property of any kind or
the rendering of any service, with any Affiliate, except in the ordinary course
of and pursuant to the reasonable requirements of such Person's business and
upon fair and reasonable terms substantially as favorable to such Person as
those which would be obtained in a comparable arms-length transaction with a
non-Affiliate.
SECTION 10.10. Distributions.
-------------
Pay any dividends on or make any other distributions in respect of any
membership interests or other equity interests or redeem or otherwise acquire
any such membership or other equity interests without in each instance obtaining
the prior written consent of the Required Lenders; provided, however, that (i)
-------- -------
any Credit Party which is a Subsidiary of the Borrower may pay regularly
scheduled dividends or make other distributions to the Borrower, and (ii) if no
Default or Event of Default exists or would result therefrom, the Borrower may
pay cash distributions, free of any Lien, to Inergy, L.P. in an amount not to
exceed Available Cash.
SECTION 10.11. Lease Obligations.
-----------------
Permit the aggregate obligations that are due and payable during any
Fiscal Year under leases or agreements to lease (other than obligations under
Capital Leases) to exceed $3,000,000 during such Fiscal Year.
SECTION 10.12. Restrictive Agreements.
----------------------
Enter into any Debt which contains any covenants (including, without
limitation, a negative pledge on assets) more restrictive than the provisions of
Articles VIII, IX and X.
SECTION 10.13. Put Agreements.
--------------
Enter into any put agreement or similar agreement with any other Person
granting such Person put rights or similar arrangements with respect to the
Capital Stock of the Borrower or its Subsidiaries.
SECTION 10.14. Amendments to Organic Documents.
-------------------------------
Amend or otherwise modify their respective Organic Documents in any manner
that would affect the Administrative Agent or the Lenders without the prior
written consent of the Administrative Agent and the Required Lenders, except for
amendments or other modifications that modify administrative provisions or
amendments that reflect the issuance, redemption or
65
transfer of Capital Stock to the extent permitted by and in accordance with this
Agreement and the other Credit Documents.
ARTICLE XI
DEFAULT AND REMEDIES
SECTION 11.01. Events of Default.
-----------------
Each of the following shall constitute an Event of Default, whatever the
reason for such event and whether it shall be voluntary or involuntary or be
effected by operation of law or pursuant to any judgment or order of any court
or any order, rule or regulation of any Governmental Authority or otherwise:
(a) Default in Payment of Principal of Loans and Reimbursement Obligations.
----------------------------------------------------------------------
The Borrower shall default in any payment of principal of any Loan, Note or
Reimbursement Obligation when and as due (whether at maturity, by reason of
acceleration or otherwise).
(b) Other Payment Default. The Borrower shall default in the payment when
---------------------
and as due (whether at maturity, by reason of acceleration or otherwise) of
interest due on any Loan, Note or Reimbursement Obligation or the payment of any
other Obligation, and such default shall continue unremedied for three (3)
Business Days.
(c) Misrepresentation. Any representation or warranty made or deemed to be
-----------------
made by Inergy, L.P., the Borrower or any Subsidiary of the Borrower under this
Agreement, any other Credit Document or any amendment hereto or thereto, shall
prove to have been incorrect or misleading in any material respect when made or
deemed made.
(d) Default in Performance of Certain Covenants. The Borrower shall default
in the performance or observance of any covenant or agreement contained in
Sections 4.02, 7.01(b), (c), (e) or (g), 7.02(e), 8.01, 8.02, 8.06(ii),
8.06(iii), 8.08, 8.10, Article IX or Sections 10.01, 10.02, 10.03, 10.04, 10.05,
10.06, 10.10, 10.12, 10.13 or 10.14 of this Agreement.
(e) Default in Performance of Other Covenants and Conditions. The Borrower
--------------------------------------------------------
or any Subsidiary of the Borrower shall default in the performance or observance
of any term, covenant, condition or agreement contained in this Agreement (other
than as specifically provided for otherwise in this Section 11.01) or any other
-------------
Credit Document and such default shall continue for a period of thirty (30) days
and the Borrower or such Subsidiary of the Borrower, as applicable, continuously
and diligently endeavors to cure such default.
(f) Debt Cross-Default. The Borrower, Inergy, L.P. or any Subsidiary of the
------------------
Borrower shall (i) default in the payment of any Debt (other than that evidenced
by the Notes or any Reimbursement Obligation), the aggregate outstanding amount
of which Debt is in excess of $500,000, beyond the period of grace if any,
provided in the instrument or agreement under which such Debt was created, or
(ii) default in the observance or performance, beyond the period of grace if
any, of any other agreement or condition relating to any Debt (other than that
evidenced by the Notes or any Reimbursement Obligation) the aggregate
outstanding amount of which Debt is in excess of $500,000, or contained in any
instrument or agreement
66
evidencing, securing or relating thereto or any other event shall occur or
condition exist, the effect of which default or other event or condition is to
cause, or to permit the holder or holders of such Debt (or a trustee or agent on
behalf of such holder or holders) to cause, with the giving of notice if
required, any such Debt to become due prior to its stated maturity.
(g) Other Cross-Defaults.
-------------------------
(i) The Borrower, Inergy, L.P. or any Subsidiary of the Borrower
shall default in the payment when due, or in the performance or
observance, of any obligation or condition of any material
contract or agreement unless, but only as long as, the
existence of any such default is being contested by the
Borrower, Inergy, L.P. or such Subsidiary of the Borrower, as
applicable, in good faith by appropriate proceedings and
adequate reserves in respect thereof have been established on
the books of the Borrower, Inergy, L.P. or such Subsidiary of
the Borrower, as applicable, to the extent required by GAAP.
(ii) Any "Event of Default" shall have occurred and be continuing
under any other Credit Document or any Hedging Agreement.
(h) Voluntary Bankruptcy Proceeding. Inergy, L.P., the Borrower or any
-------------------------------
Subsidiary of the Borrower shall (i) commence a voluntary case under the federal
bankruptcy laws (as now or hereafter in effect), (ii) file a petition seeking to
take advantage of any other laws, domestic or foreign, relating to bankruptcy,
insolvency, reorganization, winding up or composition for adjustment of debts,
(iii) consent to or fail to contest in a timely and appropriate manner any
petition filed against it in an involuntary case under such bankruptcy laws or
other laws, (iv) apply for or consent to, or fail to contest in a timely and
appropriate manner, the appointment of, or the taking of possession by, a
receiver, custodian, trustee, or liquidator of itself or of a substantial part
of its property, domestic or foreign, (v) admit in writing its inability to pay
its debts as they become due, (vi) make a general assignment for the benefit of
creditors, or (vii) take any corporate action for the purpose of authorizing any
of the foregoing.
(i) Involuntary Bankruptcy Proceeding. A case or other proceeding shall be
---------------------------------
commenced against Inergy, L.P., the Borrower or any Subsidiary of the Borrower
in any court of competent jurisdiction seeking (i) relief under the federal
bankruptcy laws (as now or hereafter in effect) or under any other laws,
domestic or foreign, relating to bankruptcy, insolvency, reorganization, winding
up or adjustment of debts, or (ii) the appointment of a trustee, receiver,
custodian, liquidator or the like for Inergy, L.P., the Borrower or any
Subsidiary of the Borrower or for all or any substantial part of their
respective assets, domestic or foreign, and such case or proceeding shall
continue undismissed or unstayed for a period of sixty (60) consecutive days, or
an order granting the relief requested in such case or proceeding (including,
but not limited to, an order for relief under such federal bankruptcy laws)
shall be entered.
(j) Impairment of Security, Etc. Any of the Credit Documents shall cease
---------------------------
in any material respect to be in full force and effect or shall be declared to
be null and void in whole or in a material part by the final judgment of a court
or other governmental or regulatory authority
67
having jurisdiction or the validity or enforceability thereof shall be contested
by, or on behalf of, any Credit Party; or any Credit Party shall renounce any of
the same or deny that it has any or further liability under any Credit Document
to which it is a party; or any security interest purported to be created by any
Credit Document shall cease to be, or shall be asserted by any Credit Party not
to be, a valid, perfected, first priority (except as expressly otherwise
provided in this Agreement or such Credit Document) security interest in the
Collateral covered thereby.
(k) Judgment. A judgment or order for the payment of money which causes
--------
the aggregate amount of all such judgments to exceed $500,000 in any Fiscal Year
shall be entered against the Borrower or any Subsidiary of the Borrower by any
court and such judgment or order shall continue undischarged or unstayed for a
period of thirty (30) days.
(l) Change of Control; Ownership. (i) Inergy, L.P. ceases to own and
----------------------------
control 100% of the outstanding Capital Stock of the Borrower; (ii) Inergy
Holdings ceases to own and control 100% of the outstanding Capital Stock of
Inergy GP; (iii) any Person or group of Persons, other than New Inergy Propane,
shall acquire, directly or indirectly, more than 30% of the outstanding Capital
Stock of Inergy, L.P.; (iv) Inergy GP ceases to be the managing general partner
of Inergy, L.P.; (v) a majority of the seats on the board of directors (or other
applicable governing body) of Inergy GP shall at any time after the Effective
Date be occupied by Persons who were not nominated by Inergy GP or Inergy
Holdings, by a majority of the board of directors (or other applicable governing
body) of Inergy GP or Inergy Holdings or by Persons so nominated; (vi) a
majority of the seats on the board of directors (or other applicable governing
body) of the Borrower shall at any time after the Effective Date be occupied by
Persons who were not nominated by the Borrower or Inergy Holdings, by a majority
of the board of directors (or other applicable governing body) of the Borrower
or Inergy Holdings or by Persons so nominated; (vii) ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, for any
reason, ceases to actively participate in the management of the Borrower and its
Subsidiaries, and a replacement for ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ acceptable to the
Administrative Agent, in its discretion, is not made within sixty (60) days from
the date ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ceases such active participation; or (viii) any pledgor
under any Pledge Agreement shall grant or suffer to exist any Lien on such
pledgor's interest in any Collateral described therein, except in each case for
any Permitted Lien.
(m) Material Adverse Effect. In the Required Lender's reasonable judgment,
-----------------------
there occurs any condition or event that could have a Material Adverse Effect.
SECTION 11.02. Remedies.
--------
Upon the occurrence of an Event of Default, with the consent of the Required
Lenders, the Administrative Agent may, or upon the request of the Required
Lenders, the Administrative Agent shall, by notice to the Borrower:
(a) Acceleration; Termination of Credit Facilities. Declare the principal
----------------------------------------------
of and interest on the Loans, the Notes and the Reimbursement Obligations at the
time outstanding, and all other amounts owed to the Lenders and to the
Administrative Agent under this Agreement or any of the other Credit Documents
(including, without limitation, all L/C Obligations, whether or not the
beneficiaries of the then outstanding Letters of Credit shall have presented the
documents required thereunder) and all other Obligations (other than any
68
obligations under any Hedging Agreement), to be forthwith due and payable,
whereupon the same shall immediately become due and payable without presentment,
demand, protest or other notice of any kind, all of which are expressly waived,
anything in this Agreement or the other Credit Documents to the contrary
notwithstanding, and terminate the Credit Facilities and any right of the
Borrower to request borrowings or Letters of Credit thereunder; provided, that
--------
upon the occurrence of an Event of Default specified in Section 11.01(i) or (j),
-----------------------
the Credit Facilities shall be automatically terminated and all Obligations
(other than any obligations under any Hedging Agreement) shall automatically
become due and payable without presentment, demand, protest or other notice of
any kind, all of which are expressly waived, anything in this Agreement or in
any other Loan Document to the contrary notwithstanding.
(b) Letters of Credit. With respect to all Letters of Credit with respect
-----------------
to which presentment for honor shall not have occurred at the time of an
acceleration pursuant to Section 11.02(a), require the Borrower at such time to
----------------
deposit in a cash collateral account with the Administrative Agent an amount
equal to the aggregate then undrawn and unexpired amount of such Letters of
Credit. Amounts held in such cash collateral account shall be applied by the
Administrative Agent to the payment of drafts drawn under such Letters of
Credit, and the unused portion thereof after all such Letters of Credit shall
have expired or been fully drawn upon, if any, shall be applied to repay the
other Obligations. After all such Letters of Credit shall have expired or been
fully drawn upon, the Reimbursement Obligation shall have been satisfied and all
other Obligations shall have been paid in full, the balance, if any, in such
cash collateral account shall be returned to the Borrower.
(c) Rights of Collection, Etc.
------------------------------
(i) All of the rights and remedies of a secured party under the UCC
or under other Applicable Law, and all other legal and
equitable rights to which the Administrative Agent may be
entitled, all of which rights and remedies shall be cumulative,
and none of which shall be exclusive, and all of which shall be
in addition to any other rights or remedies contained in this
Agreement or any of the other Credit Documents.
(ii) The right to take immediate possession of the Collateral, and
(1) to require the Borrower to assemble the Collateral, at the
Borrower's expense, and make it available to the Administrative
Agent at a place designated by the Administrative Agent, and
(2) to enter upon and use any premises in which the Borrower
has an ownership, leasehold or other interest, or wherever any
of the Collateral shall be located, and to store, remove,
abandon, manufacture, sell, dispose of or otherwise use all or
any part of the Collateral on such premises without the payment
of rent or any other fees by the Administrative Agent to the
Borrower or any other Person for the use of such premises or
such Collateral.
(iii) The right to sell or otherwise dispose of all or any inventory
or equipment in its then condition, or after any further
manufacturing or processing thereof, at public or private sale
or sales, with such notice as may be required by law, in lots
or in bulk, for cash or on credit all as the
69
Administrative Agent, in its sole discretion, may deem
advisable. The Borrower agrees that ten (10) days prior written
notice to the Borrower of any public or private sale or other
disposition of such Collateral shall be reasonable notice
thereof and such sale shall be at such locations as the
Administrative Agent may designate in such notice. The
Administrative Agent shall have the right to conduct such sales
on the Borrower's premises, without charge therefor, and such
sales may be adjourned from time to time in accordance with
applicable law. The Administrative Agent shall have the right
to sell lease or otherwise dispose of such Collateral, or any
part thereof for cash, credit or any combination thereof and
the Administrative Agent may purchase all or any part of such
Collateral at public or, if permitted by law, private sale and,
in lieu of actual payment of such purchase price, may set-off
or credit the amount of such price against the Obligations.
(iv) The Administrative Agent is hereby granted a license or other
right to use, without charge, all of the Borrower's labels,
patents, copyrights, rights of use of any name, trade secrets,
trade names, trademarks, and advertising matter, or any
property of a similar nature as it pertains to the Collateral
or any other property of the Borrower, in storing, removing,
transporting, manufacturing, advertising, selling or otherwise
using the Collateral, and the Borrower's rights in and under
such property shall inure to the Administrative Agent's
benefit.
(v) The proceeds realized from the sale of any Collateral may be
applied, after the Administrative Agent is in receipt of good
funds, in accordance with Section 4.10. If any deficiency shall
------------
arise, the Borrower shall remain liable to the Administrative
Agent therefor. Any surplus remaining after payment in full of
the Obligations will be returned to the Borrower or to whomever
may be legally entitled thereto.
SECTION 11.03. Rights and Remedies Cumulative; Non-Waiver; Etc.
-----------------------------------------------
The enumeration of the rights and remedies of the Administrative Agent and
the Lenders set forth in this Agreement is not intended to be exhaustive, and
the exercise by the Administrative Agent and the Lenders of any right or remedy
shall not preclude the exercise of any other rights or remedies, all of which
shall be cumulative, and shall be in addition to any other right or remedy given
hereunder or under the Credit Documents or that may now or hereafter exist in
law or in equity or by suit or otherwise. No delay or failure to take action on
the part of the Administrative Agent or any Lender in exercising any right,
power or privilege shall operate as a waiver thereof, nor shall any single or
partial exercise of any such right, power or privilege preclude other or further
exercise thereof or the exercise of any other right, power or privilege or shall
be construed to be a waiver of any Event of Default. No course of dealing
between the Borrower, the Administrative Agent and the Lenders or their
respective agents or employees shall be effective to change, modify or discharge
any provision of this Agreement or any of the other Credit Documents or to
constitute a waiver of any Event of Default.
70
ARTICLE XII
THE ADMINISTRATIVE AGENT
SECTION 12.01. Appointment.
-----------
Each of the Lenders hereby irrevocably designates and appoints First
Union as Administrative Agent of such Lender under this Agreement and the other
Credit Documents for the term hereof and each such Lender irrevocably authorizes
First Union as Administrative Agent for such Lender, to take such action on its
behalf under the provisions of this Agreement and the other Credit Documents and
to exercise such powers and perform such duties as are expressly delegated to
the Administrative Agent by the terms of this Agreement and such other Credit
Documents, together with such other powers as are reasonably incidental thereto.
Notwithstanding any provision to the contrary elsewhere in this Agreement or
such other Credit Documents, the Administrative Agent shall not have any duties
or responsibilities, except those expressly set forth herein and therein, or any
fiduciary relationship with any Lender, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Agreement or the other Credit Documents or otherwise exist against the
Administrative Agent. Any reference to the Administrative Agent in this Article
XII shall be deemed to refer to the Administrative Agent solely in its capacity
as Administrative Agent and not in its capacity as a Lender.
SECTION 12.02. Delegation of Duties.
--------------------
The Administrative Agent may execute any of its respective duties under
this Agreement and the other Credit Documents by or through agents or attorneys-
in-fact and shall be entitled to advice of counsel concerning all matters
pertaining to such duties. The Administrative Agent shall not be responsible for
the negligence or misconduct of any agents or attorneys-in-fact selected by the
Administrative Agent with reasonable care.
SECTION 12.03. Exculpatory Provisions.
----------------------
Neither the Administrative Agent nor any of its officers, directors,
employees, agents, attorneys-in-fact, Subsidiaries or Affiliates shall be (a)
liable for any action lawfully taken or omitted to be taken by it or such Person
under or in connection with this Agreement or the other Credit Documents (except
for actions occasioned solely by its or such Person's own gross negligence or
willful misconduct), or (b) responsible in any manner to any of the Lenders for
any recitals, statements, representations or warranties made by any Credit
Party, or by any officer thereof, contained in this Agreement or the other
Credit Documents or in any certificate, report, statement or other document
referred to or provided for in, or received by the Administrative Agent under or
in connection with, this Agreement or the other Credit Documents or for the
value, validity, effectiveness, genuineness, enforceability or sufficiency of
this Agreement or the other Credit Documents or for any failure of any Credit
Party to perform its obligations hereunder or thereunder. The Administrative
Agent shall not be under any obligation to any Lender to ascertain or to inquire
as to the observance or performance of any of the agreements contained in, or
conditions of, this Agreement, or to inspect the properties, books or records of
the Borrower or any of its Subsidiaries.
71
SECTION 12.04. Reliance by the Administrative Agent.
------------------------------------
The Administrative Agent shall be entitled to rely upon, and shall be fully
protected in relying upon, any note, writing, resolution, notice, consent,
certificate, affidavit, letter, cablegram, telegram, telecopy, telex or teletype
message, statement, order or other document or conversation believed by it to be
genuine and correct and to have been signed, sent or made by the proper Person
or Persons and upon advice and statements of legal counsel (including, without
limitation, counsel to the Borrower), independent accountants and other experts
selected by the Administrative Agent. The Administrative Agent may deem and
treat the payee of any Note as the owner thereof for all purposes unless such
Note shall have been transferred in accordance with Section 13.10. The
-------------
Administrative Agent shall be fully justified in failing or refusing to take any
action under this Agreement and the other Credit Documents unless it shall first
receive such advice or concurrence of the Required Lenders (or, when expressly
required hereby or by the relevant other Credit Document, all the Lenders) as it
deems appropriate or it shall first be indemnified to its satisfaction by the
Lenders against any and all liability and expense which may be incurred by it by
reason of taking or continuing to take any such action except for its own gross
negligence or willful misconduct. The Administrative Agent shall in all cases be
fully protected in acting, or in refraining from acting, under this Agreement
and the Notes in accordance with a request of the Required Lenders (or, when
expressly required hereby, all the Lenders), and such request and any action
taken or failure to act pursuant thereto shall be binding upon all the Lenders
and all future holders of the Notes.
SECTION 12.05. Notice of Default.
-----------------
The Administrative Agent shall not be deemed to have knowledge or
notice of the occurrence of any Default or Event of Default hereunder unless it
has received written notice from a Lender or the Borrower referring to this
Agreement, describing such Default or Event of Default and stating that such
notice is a "notice of default." In the event that the Administrative Agent
receives such a notice, it shall promptly give notice thereof to the Lenders.
The Administrative Agent shall take such action with respect to such Default or
Event of Default as shall be reasonably directed by the Required Lenders (or,
when expressly required hereby, all the Lenders); provided that unless and until
--------
the Administrative Agent shall have received such directions, the Administrative
Agent may (but shall not be obligated to) take such action, or refrain from
taking such action, with respect to such Default or Event of Default as it shall
deem advisable in the best interests of the Lenders, except to the extent that
other provisions of this Agreement expressly require that any such action be
taken or not be taken only with the consent and authorization or the request of
the Lenders or Required Lenders, as applicable.
SECTION 12.06. Non-Reliance on the Administrative Agent and Other Lenders.
----------------------------------------------------------
Each Lender expressly acknowledges that neither the Administrative
Agent nor any of its respective officers, directors, employees, agents,
attorneys-in-fact, Subsidiaries or Affiliates has made any representations or
warranties to it and that no act by the Administrative Agent hereinafter taken,
including any review of the affairs of the Borrower or any of its Subsidiaries,
shall be deemed to constitute any representation or warranty by the
Administrative Agent to any Lender. Each Lender represents to the
Administrative Agent that it has, independently and without reliance upon the
Administrative Agent or any other Lender, and based on such
72
documents and information as it has deemed appropriate, made its own appraisal
of and investigation into the business, operations, property, financial and
other condition and creditworthiness of the Borrower and its Subsidiaries and
made its own decision to make its Loans and issue or participate in Letter of
Credit hereunder and enter into this Agreement. Each Lender also represents that
it will, independently and without reliance upon the Administrative Agent or any
other Lender, and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit analysis, appraisals
and decisions in taking or not taking action under this Agreement and the other
Credit Documents, and to make such investigation as it deems necessary to inform
itself as to the business, operations, property, financial and other condition
and creditworthiness of the Borrower and its Subsidiaries. Except for notices,
reports and other documents expressly required to be furnished to the Lenders by
the Administrative Agent hereunder or by the other Credit Documents, the
Administrative Agent shall not have any duty or responsibility to provide any
Lender with any credit or other information concerning the business, operations,
property, financial and other condition or creditworthiness of the Borrower or
any of its Subsidiaries which may come into the possession of the Administrative
Agent or any of its respective officers, directors, employees, agents,
attorneys-in-fact, Subsidiaries or affiliates.
SECTION 12.07. Indemnification.
---------------
The Lenders agree to indemnify the Administrative Agent, in its capacity as
such (to the extent not reimbursed by the Borrower and without limiting the
obligation of the Borrower to do so), ratably according to the respective
amounts of their Commitment Percentages, from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind whatsoever which may at any time
(including, without limitation, at any time following the payment of the Notes
or any Reimbursement Obligation) be imposed on, incurred by or asserted against
the Administrative Agent in any way relating to or arising out of this Agreement
or the other Credit Documents, or any documents contemplated by or referred to
herein or therein or the transactions contemplated hereby or thereby or any
action taken or omitted by the Administrative Agent under or in connection with
any of the foregoing; provided that no Lender shall be liable for the payment of
--------
any portion of such liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements resulting solely
from the Administrative Agent's bad faith, gross negligence or willful
misconduct. The agreements in this Section 12.07 shall survive the payment of
-------------
the Notes, any Reimbursement Obligation and all other amounts payable hereunder
and the termination of this Agreement.
SECTION 12.08. The Administrative Agent in Its Individual Capacity.
---------------------------------------------------
The Administrative Agent and its respective Subsidiaries and Affiliates may
make loans to, accept deposits from and generally engage in any kind of business
with the Borrower and its Subsidiaries and Affiliates as though the
Administrative Agent were not an Administrative Agent hereunder. With respect to
any Loans made or renewed by it and any Note issued to it and with respect to
any Letter of Credit issued by it or participated in by it, the Administrative
Agent shall have the same rights and powers under this Agreement and the other
Credit Documents as any Lender and may exercise the same as though it were not
an Administrative Agent, and the terms "Lender" and "Lenders" shall include the
Administrative Agent in its individual capacity.
73
SECTION 12.09. Resignation of the Administrative Agent; Successor
--------------------------------------------------
Administrative Agent.
--------------------
Subject to the appointment and acceptance of a successor as provided below,
the Administrative Agent may resign at any time or, at the request of the
Required Lenders, shall resign, by giving notice thereof to the Lenders and the
Borrower. Upon any such resignation, the Required Lenders shall have the right
to appoint a successor Administrative Agent, which successor shall have minimum
capital and surplus of at least $500,000,000. If no successor Administrative
Agent shall have been so appointed by the Required Lenders and shall have
accepted such appointment within thirty (30) days after the Administrative
Agent's giving of notice of resignation, then the Administrative Agent may, on
behalf of the Lenders, appoint a successor Administrative Agent, which successor
shall have minimum capital and surplus of at least $500,000,000. Upon the
acceptance of any appointment as Administrative Agent hereunder by a successor
Administrative Agent, such successor Administrative Agent shall thereupon
succeed to and become vested with all rights, powers, privileges and duties of
the retiring Administrative Agent, and the retiring Administrative Agent shall
be discharged from its duties and obligations hereunder. After any retiring
Administrative Agent's resignation hereunder as Administrative Agent, the
provisions of this Section 12.09 shall continue in effect for its benefit in
-------------
respect of any actions taken or omitted to be taken by it while it was acting as
Administrative Agent.
SECTION 12.10. Collateral Matters.
------------------
(a) The Administrative Agent is authorized on behalf of all the Lenders
without the necessity of any notice to or further consent from the Lenders, from
time to time to take any action with respect to any Collateral or the Credit
Documents which may be necessary to perfect and maintain perfected the security
interest in and Liens upon the Collateral granted pursuant to the Credit
Documents.
(b) The Lenders irrevocably authorize the Administrative Agent, at its
option and in its discretion, to authorize the release of any Lien granted for
the benefit of the Administrative Agent and the Lenders upon any Collateral (i)
upon termination of the Commitments and payment in full of all Loans and all
other Obligations known to the Administrative Agent and payable under this
Agreement or any other Credit Document; (ii) constituting property sold or to be
sold or disposed of as part of or in connection with any disposition permitted
hereunder; (iii) consisting of an instrument evidencing Debt or other debt
instrument, if the indebtedness evidenced thereby has been paid in full; or (iv)
if approved, authorized or ratified in writing by the Required Lenders or all
the Lenders, as the case may be, as provided in Section 13.11. Upon request by
-------------
the Administrative Agent at any time, the Lenders will confirm in writing the
Administrative Agent's authority to authorize the release of particular types or
items of Collateral pursuant to this Section 12.10(b).
----------------
74
ARTICLE XIII
MISCELLANEOUS
SECTION 13.01. Notices.
-------
(a) Method of Communication. Except as otherwise provided in this
-----------------------
Agreement, all notices and communications hereunder shall be in writing, or by
telephone subsequently confirmed in writing. Any notice shall be effective if
delivered by hand delivery or sent via telecopy, recognized overnight courier
service or certified mail, return receipt requested, and shall be presumed to be
received by a party hereto (i) on the date of delivery if delivered by hand or
sent by telecopy, (ii) on the next Business Day if sent by recognized overnight
courier service and (iii) on the third Business Day following the date sent by
certified mail, return receipt requested. A telephonic notice to the
Administrative Agent as understood by the Administrative Agent will be deemed to
be the controlling and proper notice in the event of a discrepancy with or
failure to receive a confirming written notice.
(b) Addresses for Notices. Notices to any party shall be sent to it at
---------------------
the following addresses, or any other address as to which all the other parties
are notified in writing.
If to the Borrower: Inergy Propane, LLC
▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Telephone No.: ▇▇▇-▇▇▇-▇▇▇▇
Telecopy No.: ▇▇▇-▇▇▇-▇▇▇▇
With copies to: ▇▇▇▇▇▇▇, Mag & Fizzell
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
P. O. Box 419251
▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, Esq.
Telephone No.: ▇▇▇-▇▇▇-▇▇▇▇
Telecopy No.: ▇▇▇-▇▇▇-▇▇▇▇
If to First Union as First Union National Bank
Administrative Agent: ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇-▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: Syndication Agency Services
Telephone No.: ▇▇▇-▇▇▇-▇▇▇▇
Telecopy No.: ▇▇▇-▇▇▇-▇▇▇▇
75
With copies to: First Union National Bank
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇-▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇ ▇. ▇▇▇▇▇
Telephone No.: ▇▇▇-▇▇▇-▇▇▇▇
Telecopy No.: ▇▇▇-▇▇▇-▇▇▇▇
With copies to: Parker, Poe, ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇ L.L.P.
Three First Union Center
Suite 3000
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
Telephone No.: ▇▇▇-▇▇▇-▇▇▇▇
Telecopy No.: 704-334-4706
If to any Lender: To the Address set forth on Schedule 1.01B hereto.
--------------
(c) Administrative Agent's Office. The Administrative Agent hereby
-----------------------------
designates its office located at the address set forth above, or any subsequent
office which shall have been specified for such purpose by written notice to the
Borrower and the Lenders, as the Administrative Agent's Office referred to
herein, to which payments due are to be made and at which Loans will be
disbursed and Letters of Credit issued.
SECTION 13.02. Expenses; Indemnity.
-------------------
The Borrower will (a) pay all out-of-pocket expenses of the Administrative
Agent in connection with: (i) the preparation, execution and delivery of this
Agreement and each other Credit Document, whenever the same shall be executed
and delivered, including without limitation all out-of-pocket syndication and
due diligence expenses and reasonable fees and disbursements of counsel for the
Administrative Agent and (ii) the preparation, execution and delivery of any
waiver, amendment or consent by the Administrative Agent or the Lenders relating
to this Agreement or any other Credit Document, including without limitation
reasonable fees and disbursements of counsel for the Administrative Agent; (b)
pay all out-of-pocket expenses of the Administrative Agent and the Lenders in
connection with the administration and enforcement of any rights and remedies of
the Administrative Agent and Lenders under the Credit Facilities, including
consulting with appraisers, accountants, engineers, attorneys and other Persons
concerning the nature, scope or value of any right or remedy of the
Administrative Agent or any Lender hereunder or under any other Credit Document
or any factual matters in connection therewith, which expenses shall include
without limitation the reasonable fees and disbursements of such Persons; and
(c) defend, indemnify and hold harmless the Administrative Agent and the
Lenders, and their respective parents, Subsidiaries, Affiliates, employees,
agents, officers and directors, from and against any losses, penalties, fines,
liabilities, settlements, damages, costs and expenses, suffered by any such
Person in connection with any claim, investigation, litigation or other
proceeding (whether or not the Administrative Agent or any Lender is a party
thereto) and the prosecution and defense thereof, arising out of or in any way
76
connected with the Agreement, any other Credit Document or the Loans, including
without limitation reasonable attorney's and consultant's fees, except to the
extent that any of the foregoing directly result from the gross negligence or
willful misconduct of the party seeking indemnification therefor.
SECTION 13.03. Set-off.
-------
In addition to any rights now or hereafter granted under Applicable Law and
not by way of limitation of any such rights, upon and after the occurrence of
any Event of Default and during the continuance thereof, the Lenders and any
assignee or participant of a Lender in accordance with Section 13.10 are hereby
-------------
authorized by the Borrower at any time or from time to time, without notice to
the Borrower or to any other Person, any such notice being hereby expressly
waived, to set off and to appropriate and to apply any and all deposits (general
or special, time or demand, including, but not limited to, indebtedness
evidenced by certificates of deposit, whether matured or unmatured) and any
other indebtedness at any time held or owing by the Lenders, or any such
assignee or participant to or for the credit or the account of the Borrower
against and on account of the Obligations irrespective of whether or not (a) the
Lenders shall have made any demand under this Agreement or any of the other
Credit Documents or (b) the Administrative Agent shall have declared any or all
of the Obligations to be due and payable as permitted by Section 11.02 and
-------------
although such Obligations shall be contingent or unmatured. Notwithstanding the
preceding sentence, each Lender agrees to notify the Borrower and the
Administrative Agent after any such set-off and application; provided, that the
--------
failure to give such notice shall not affect the validity of such set-off and
application.
SECTION 13.04. Governing Law.
-------------
This Agreement, the Notes and the other Credit Documents, unless otherwise
expressly set forth therein, shall be governed by, construed and enforced in
accordance with the laws of the State of Missouri.
SECTION 13.05. Consent to Jurisdiction.
-----------------------
The Borrower (i) submits to personal jurisdiction in the State of North
Carolina, the courts thereof and the United States District Courts sitting
therein, for the enforcement of this Agreement and the other Credit Documents
and (ii) waives any and all personal rights under the law of any jurisdiction to
object on any basis (including, without limitation, inconvenience of forum) to
jurisdiction or venue within the State of North Carolina for the purpose of
litigation to enforce this Agreement and the other Credit Documents. The
Borrower hereby irrevocably consents to the service of a summons and complaint
and other process in any action, claim or proceeding brought by the
Administrative Agent or any Lender in connection with this Agreement, the Notes
or the other Credit Documents, any rights or obligations hereunder or
thereunder, or the performance of such rights and obligations, on behalf of
itself or its property, in the manner specified in Section 13.01. Nothing in
-------------
this Section 13.05 shall affect the right of the Administrative Agent or any
-------------
Lender to serve legal process in any other manner permitted by Applicable Law or
affect the right of the Administrative Agent or any Lender to bring any action
or proceeding against the Borrower or its properties in the courts of any other
jurisdictions.
77
SECTION 13.06. WAIVER OF JURY TRIAL.
--------------------
TO THE EXTENT PERMITTED BY APPLICABLE LAW, THE ADMINISTRATIVE AGENT, EACH
LENDER AND THE BORROWER HEREBY IRREVOCABLY WAIVE THEIR RESPECTIVE RIGHTS TO A
JURY TRIAL WITH RESPECT TO ANY ACTION, CLAIM OR OTHER PROCEEDING ARISING OUT OF
ANY DISPUTE IN CONNECTION WITH THIS AGREEMENT, THE NOTES OR THE OTHER CREDIT
DOCUMENTS, ANY RIGHTS OR OBLIGATIONS HEREUNDER OR THEREUNDER, OR THE PERFORMANCE
OF SUCH RIGHTS AND OBLIGATIONS.
SECTION 13.07. Reversal of Payments.
--------------------
To the extent the Borrower makes a payment or payments to the
Administrative Agent for the ratable benefit of the Lenders or the
Administrative Agent receives any payment or proceeds of the collateral which
payments or proceeds or any part thereof are subsequently invalidated, declared
to be fraudulent or preferential, set aside and/or required to be repaid to a
trustee, receiver or any other party under any bankruptcy law, state or federal
law, common law or equitable cause, then, to the extent of such payment or
proceeds repaid, the Obligations or part thereof intended to be satisfied shall
be revived and continued in full force and effect as if such payment or proceeds
had not been received by the Administrative Agent.
SECTION 13.08. Injunctive Relief; Punitive Damages.
-----------------------------------
The Borrower recognizes that, in the event the Borrower fails to perform,
observe or discharge any of its obligations or liabilities under this Agreement,
any remedy of law may prove to be inadequate relief to the Lenders. Therefore,
the Borrower agrees that the Lenders, at the Lenders' option, shall be entitled
to temporary and permanent injunctive relief in any such case without the
necessity of proving actual damages.
(a) The Administrative Agent, the Lenders and the Borrower (on behalf of
itself and its Subsidiaries) hereby agree that no such Person shall have a
remedy of punitive or exemplary damages against any other party to a Loan
Document and each such Person hereby waives any right or claim to punitive
or exemplary damages that they may now have or may arise in the future in
connection with any dispute, whether such dispute is resolved through
arbitration or judicially.
(b) The parties agree that they shall not have a remedy of punitive or
exemplary damages against any other party in any dispute and hereby waive
any right or claim to punitive or exemplary damages they have now or which
may arise in the future in connection with any dispute whether the dispute
is resolved by arbitration or judicially.
SECTION 13.09. Accounting Matters.
------------------
All financial and accounting calculations, measurements and computations
made for any purpose relating to this Agreement and the other Credit Documents,
including, without limitation, all computations utilized by Inergy, L.P., the
Borrower or any of its Subsidiaries to determine compliance with any covenant
contained herein or therein, shall, except as otherwise expressly contemplated
hereby or unless there is an express written direction by the
78
Administrative Agent to the contrary agreed to by the Borrower, be performed
in accordance with GAAP as in effect on the Closing Date. In the event that
changes in GAAP shall be mandated by the Financial Accounting Standards Board,
or any similar accounting body of comparable standing, or shall be recommended
by the Borrower's certified public accountants, to the extent that such changes
would modify such accounting terms or the interpretation or computation thereof,
such changes shall be followed in defining such accounting terms only from and
after the date the Borrower and the Required Lenders shall have amended this
Agreement to the extent necessary to reflect any such changes in the financial
covenants and other terms and conditions of this Agreement.
SECTION 13.10. Successors and Assigns; Participations.
--------------------------------------
(a) Benefit of Agreement. This Agreement shall be binding upon and inure
--------------------
to the benefit of the Borrower, the Administrative Agent and the Lenders, all
future holders of the Notes, and their respective successors and assigns,
except that the Borrower shall not assign or transfer any of its rights or
obligations under this Agreement without the prior written consent of each
Lender.
(b) Assignment by Lenders. Each Lender may, with the consent of the
---------------------
Administrative Agent and the Borrower, which consents shall not be unreasonably
withheld and not required of the Borrower upon the occurrence and continuation
of a Default or Event of Default, assign to one or more Eligible Assignees all
or a portion of its interests, rights and obligations under this Agreement and
the other Credit Documents (including, without limitation, all or a portion of
the Extensions of Credit at the time owing to it and the Notes held by it);
provided that:
--------
(i) each such assignment shall be of a constant, and not a varying,
percentage of all the assigning Lender's rights and obligations
under this Agreement;
(ii) if less than all of the assigning Lender's Commitment is to be
assigned, the Commitment so assigned shall not be less than
$5,000,000;
(iii) the parties to each such assignment shall execute and deliver to
the Administrative Agent, for its acceptance and recording in
the Register, an Assignment and Acceptance in the form of
Exhibit H hereto (an "Assignment and Acceptance"), together with
---------
any Note or Notes subject to such assignment;
(iv) such assignment shall not, without the consent of the Borrower,
require the Borrower to file a registration statement with the
Securities and Exchange Commission or apply to or qualify the
Loans or the Notes under the blue sky laws of any state;
(v) no consent of the Borrower or the Administrative Agent shall be
required for an assignment to an affiliate or Subsidiary of the
assigning Lender; and
(vi) the assigning Lender shall pay to the Administrative Agent an
assignment fee of $3,000 upon the execution by such Lender of
the Assignment and
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Acceptance; provided that no such fee shall be payable upon any
--------
assignment by a Lender to an Affiliate thereof.
Upon such execution, delivery, acceptance and recording, from and after the
effective date specified in each Assignment and Acceptance, which effective date
shall be at least five (5) Business Days after the execution thereof, (A) the
assignee thereunder shall be a party hereto and, to the extent provided in such
Assignment and Acceptance, have the rights and obligations of a Lender hereby
and (B) the Lender thereunder shall, to the extent provided in such assignment,
be released from its obligations under this Agreement.
(c) Rights and Duties Upon Assignment. By executing and delivering an
---------------------------------
Assignment and Acceptance, the assigning Lender thereunder and the assignee
thereunder confirm to, and agree with, each other and the other parties
hereto as set forth in such Assignment and Acceptance.
(d) Register. The Administrative Agent shall maintain a copy of each
--------
Assignment and Acceptance delivered to it and a register for the
recordation of the names and addresses of the Lenders and the amount of the
Extensions of Credit with respect to each Lender from time to time (the
"Register"). The entries in the Register shall be conclusive, in the
absence of manifest error, and the Borrower, the Administrative Agent and
the Lenders may treat each Person whose name is recorded in the Register as
a Lender hereunder for all purposes of this Agreement. The Register shall
be available for inspection by the Borrower or the Lenders at any
reasonable time and from time to time upon reasonable prior notice.
(e) Issuance of New Notes. Upon its receipt of an Assignment and
---------------------
Acceptance executed by an assigning Lender and an Eligible Assignee
together with any Note or Notes subject to such assignment and the written
consent to such assignment, the Administrative Agent shall, if such
Assignment and Acceptance has been completed and is substantially in the
form of Exhibit H hereto:
---------
(i) accept such Assignment and Acceptance;
(ii) record the information contained therein in the Register;
(iii) give prompt notice thereof to the Lenders and the Borrower; and
(iv) promptly deliver a copy of such Assignment and Acceptance to the
Borrower.
Within five (5) Business Days after receipt of notice, the Borrower shall
execute and deliver to the Administrative Agent, in exchange for the surrendered
Note or Notes, a new Note or Notes to the order of such Eligible Assignee in
amounts equal to the Commitment assumed by such Eligible Assignee pursuant to
such Assignment and Acceptance and a new Note or Notes to the order of the
assigning Lender in an amount equal to the Commitment retained by it hereunder.
Such new Note or Notes shall be in an aggregate principal amount equal to the
aggregate principal amount of such surrendered Note or Notes, shall be dated the
effective date of such Assignment and Acceptance and shall otherwise be in
substantially the form of the assigned
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Notes delivered to the assigning Lender. Each surrendered Note or Notes shall be
canceled and returned to the Borrower.
(f) Participations. Each Lender may sell participations to one or more
--------------
banks or other entities in all or a portion of its rights and obligations under
this Agreement (including, without limitation, all or a portion of its
Extensions of Credit and the Notes held by it); provided that:
--------
(i) each such participation shall be in an amount not less than
$2,000,000;
(ii) such Lender's obligations under this Agreement (including,
without limitation, its Commitment) shall remain unchanged;
(iii) such Lender shall remain solely responsible to the other parties
hereto for the performance of such obligations;
(iv) such Lender shall remain the holder of the Notes held by it for
all purposes of this Agreement;
(v) the Borrower, the Administrative Agent and the other Lenders
shall continue to deal solely and directly with such Lender in
connection with such Lender's rights and obligations under this
Agreement;
(vi) such Lender shall not permit such participant the right to
approve any waivers, amendments or other modifications to this
Agreement or any other Loan Document other than waivers,
amendments or modifications which would reduce the principal of
or the interest rate on any Loan or Reimbursement Obligation,
extend the term or increase the amount of the Commitment, reduce
the amount of any fees to which such participant is entitled,
extend any scheduled payment date for principal of any Loan or,
except as expressly contemplated hereby or thereby, release
substantially all of the Collateral; and
(vii) any such disposition shall not, without the consent of the
Borrower, require the Borrower to file a registration statement
with the Securities and Exchange Commission to apply to qualify
the Loans or the Notes under the blue sky law of any state.
(g) Disclosure of Information; Confidentiality. The Administrative Agent
------------------------------------------
and the Lenders shall hold all non-public information with respect to the
Borrower obtained pursuant to the Credit Documents in accordance with their
customary procedures for handling confidential information; provided, that the
Administrative Agent may disclose information relating to this Agreement to Gold
----
Sheets and other similar bank trade publications, such information to consist of
------
deal terms and other information customarily found in such publications, and
provided further, that the Administrative Agent and Lenders may disclose any
such information to the extent such disclosure is required by law or requested
by any regulatory authority. Any Lender may, in connection with any assignment,
proposed assignment, participation or proposed participation pursuant to this
Section 13.10, disclose to the assignee, participant,
-------------
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proposed assignee or proposed participant, any information relating to the
Borrower furnished to such Lender by or on behalf of the Borrower; provided,
--------
that prior to any such disclosure, each such assignee, proposed assignee,
participant or proposed participant shall agree with the Borrower or such Lender
to preserve the confidentiality of any confidential information relating to the
Borrower received from such Lender.
(h) Certain Pledges or Assignments. Nothing herein shall prohibit any
------------------------------
Lender from pledging or assigning any Note to any Federal Reserve Bank in
accordance with Applicable Law.
SECTION 13.11. Amendments, Waivers and Consents.
--------------------------------
Except as set forth below or as specifically provided in any Credit
Document, any term, covenant, agreement or condition of this Agreement or any of
the other Credit Documents may be amended or waived by the Lenders, and any
consent given by the Lenders, if, but only if, such amendment, waiver or consent
is in writing signed by the Required Lenders (or by the Administrative Agent
with the consent of the Required Lenders) and delivered to the Administrative
Agent and, in the case of an amendment, signed by the Borrower; provided, that
--------
no amendment, waiver or consent shall:
(a) increase the amount or extend the time of the obligation of the
Lenders to make Loans or issue or participate in Letters of Credit (including
without limitation pursuant to Section 3.05);
------------
(b) reduce or forgive the principal amount of any Loan or Reimbursement
Obligation;
(c) extend the originally scheduled time or times of payment of the
principal of any Loan or Reimbursement Obligation or the time or times of
payment of interest on any Loan;
(d) reduce the rate of interest or fees payable on any Loan or
Reimbursement Obligation or any fee or commission with respect thereto;
(e) permit any subordination of the principal or interest on any Loan or
Reimbursement Obligation;
(f) permit any assignment (other than as specifically permitted or
contemplated in this Agreement) of the Borrower's rights and obligations
hereunder;
(g) terminate or cancel any Guaranty Agreement, Pledge Agreement,
Security Agreement or Mortgage or release Inergy, L.P. or any Subsidiary
Guarantor from their respective obligations under a Guaranty Agreement;
(h) release all or substantially all of the Collateral; or
(i) amend the provisions of Section 13.10(a), this Section 13.11 or the
---------------- -------------
definition of Required Lenders, without the prior written consent of each
Lender. In addition, no amendment, waiver or consent to the provisions of (a)
Article XII shall be made without the
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written consent of the Administrative Agent and (b) Article III shall be made
without the written consent of the Issuing Lender.
Notwithstanding anything to the contrary set forth above, the Administrative
Agent may, without the consent of any of the Lenders, revise, amend, modify,
restate and/or replace any Guaranty Agreement, Pledge Agreement, Security
Agreement or Mortgage to provide that same shall equally and ratably guaranty or
secure, as the case may be, in favor of the Collateral Agent for the benefit of
(i) the Administrative Agent and the Lenders and (ii) the holders of the Private
Placement Debt, the Obligations under the Credit Documents and the Private
Placement Debt, provided that the Administrative Agent, on behalf of itself and
--------
the Lenders, shall have entered into the Intercreditor Agreement with the
Collateral Agent and the holders of the Private Placement Debt. Each of the
Lenders hereby authorizes the Administrative Agent to enter into the
Intercreditor Agreement on behalf of such Lender.
SECTION 13.12. Absolute and Unconditional Liability.
------------------------------------
To the fullest extent permitted by law, the Borrower hereby waives
promptness, diligence, note of acceptance, and any other notice of any nature
whatsoever with respect to any of the Obligations, and any requirement that the
Administrative Agent protect, secure, perfect or insure any security interest or
lien or any property s abject thereto or exhaust any right take any action
against any Guarantor, any other Person or any Collateral. The liability of the
Borrower under this Section shall be absolute and unconditional irrespective of:
(a) any change in the time, manner or place of payment of, or in any other term
of, any of the Obligations, or any other amendment or waiver of or any consent
to departure from this Agreement, any of the Notes or any of the other Credit
Documents; (b) any exchange, release or non-perfection of any Collateral or any
release or amendment or waiver of or consent to departure from any other
guaranty, or any release of any Person liable in whole or in part, for all or
any of the Obligations; or (c) any other circumstance which might otherwise
constitute a defense available to, or discharge of, the Borrower, a guarantor or
a surety.
SECTION 13.13. Effective Date; Amended and Restated Credit Facility.
----------------------------------------------------
(a) The Credit Parties, the Administrative Agent and the Lenders each
hereby agree that this Amendment shall not be effective and shall not amend and
restate the Existing Credit Agreement until the Effective Date. Prior to the
Effective Date, the Credit Parties shall be subject to the terms and conditions
of the Existing Credit Agreement. On the Effective Date, this Agreement shall be
effective without any further action required by the Credit Parties, the
Administrative Agent or the Lenders.
(b) This Agreement amends and restates the Existing Credit Agreement in
its entirety, as of the Effective Date. It is the intention and understanding of
the parties hereto that (i) this Agreement shall act as a refinancing of the
Debt and other obligations evidenced by the Existing Credit Agreement and that
this Agreement shall not act as a novation of such Debt and other obligations,
(ii) subject to subsection (b) below, all Liens securing the Debt and other
obligations evidenced by the Existing Credit Agreement remain in full force and
effect and secure all Debt and all other Obligations now or hereafter evidenced
by or incurred under this Agreement or any of the other Credit Documents, and
(iii) subject to subsection (b) below, the
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priority of all Liens securing the Debt and other obligations evidenced by the
Existing Credit Agreement shall not be impaired by the execution, delivery or
performance of this Agreement or the other Credit Documents. The principal
amount of loans outstanding under the Existing Credit Agreement owed to the
Lenders that are "Lenders" under this Agreement shall be allocated among the
Facilities as such Lenders and the Administrative Agent may agree.
(c) The Lenders consent to, and hereby ratify, the actions taken by the
Administrative Agent to release and terminate certain Liens previously securing
the obligations evidenced by the Existing Credit Agreement, on those properties
and interests that are no longer included in the Collateral that secures the
Obligations.
SECTION 13.14. Performance of Duties.
---------------------
The Borrower's obligations under this Agreement and each of the Credit
Documents shall be performed by the Borrower at its sole cost and expense.
SECTION 13.15. All Powers Coupled with Interest.
--------------------------------
All powers of attorney and other authorizations granted to the Lenders, the
Administrative Agent and any Persons designated by the Administrative Agent or
any Lender pursuant to any provisions of this Agreement or any of the other
Credit Documents shall be deemed coupled with an interest and shall be
irrevocable so long as any of the Obligations remain unpaid or unsatisfied or
the Credit Facilities have not been terminated.
SECTION 13.16. Survival of Indemnities.
-----------------------
Notwithstanding any termination of this Agreement, the indemnities to which
the Administrative Agent and the Lenders are entitled under the provisions of
this Article XIII and any other provision of this Agreement and the Credit
Documents shall continue in full force and effect and shall protect the
Administrative Agent and the Lenders against events arising after such
termination as well as before.
SECTION 13.17. Titles and Captions.
-------------------
Titles and captions of Articles, Sections and subsections in, and the table
of contents of, this Agreement are for convenience only, and neither limit nor
amplify the provisions of this Agreement.
SECTION 13.18. Severability of Provisions.
--------------------------
Any provision of this Agreement or any other Credit Document which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective only to the extent of such prohibition or unenforceability
without invalidating the remainder of such provision or the remaining provisions
hereof or thereof or affecting the validity or enforceability of such provision
in any other jurisdiction.
SECTION 13.19. Counterparts.
------------
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This Agreement may be executed in any number of counterparts and by
different parties hereto in separate counterparts, each of which when so
executed shall be deemed to be an original and shall be binding upon all
parties, their successors and assigns, and all of which taken together shall
constitute one and the same agreement.
SECTION 13.20. Term of Agreement.
-----------------
This Agreement shall remain in effect from the Closing Date through and
including the date upon which all Obligations shall have been indefeasibly and
irrevocably paid and satisfied in full and all Commitments shall have been
terminated. No termination of this Agreement shall affect the rights and
obligations of the parties hereto arising prior to such termination or in
respect of any provision of this Agreement which survives such termination.
SECTION 13.21. Inconsistencies with Other Documents; Independent Effect of
-----------------------------------------------------------
Covenants.
---------
(a) In the event there is a conflict or inconsistency between this
Agreement and any other Credit Document, the terms of this Agreement shall
control.
(b) The Borrower expressly acknowledges and agrees that each covenant
contained in Articles VIII, IX or X shall be given independent effect.
Accordingly, the Borrower shall not engage in any transaction or other act
otherwise permitted under any covenant contained in Articles VIII, IX or X if,
before or after giving effect to such transaction or act, the Borrower shall or
would be in breach of any other covenant contained in Articles VIII, IX or X.
SECTION 13.22. Mo.Rev.Stat. (S)432.045 Required Notice.
---------------------------------------
The following statement is given pursuant to Mo.Rev.Stat. (S)432.045: "ORAL
AGREEMENTS OR COMMITMENTS TO LOAN MONEY, EXTEND CREDIT OR TO FORBEAR FROM
ENFORCING REPAYMENT OF A DEBT INCLUDING PROMISES TO EXTEND OR RENEW SUCH DEBT
ARE NOT ENFORCEABLE. TO PROTECT YOU (BORROWER(S)) AND US (CREDITOR) FROM
MISUNDERSTANDING OR DISAPPOINTMENT, ANY AGREEMENTS WE REACH COVERING SUCH
MATTERS ARE CONTAINED IN THIS WRITING, WHICH IS THE COMPLETE AND EXCLUSIVE
STATEMENT OF THE AGREEMENT BETWEEN US, EXCEPT AS WE MAY LATER AGREE IN WRITING
TO MODIFY IT."
[Signature pages to follow]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized officers, all as of the day and year first
written above.
INERGY PROPANE, LLC
By: ____________________________________________
▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Authorized Representative
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FIRST UNION NATIONAL BANK,
as Administrative Agent, as Lender, as Swingline
Lender and as Issuing Lender
By: __________________________________
Name:_____________________________
Title:____________________________
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FIRSTAR BANK, N.A. OVERLAND PARK,
(formerly known as Firstar Bank Midwest, N.A.),
as Syndication Agent and as Lender
By: __________________________________
Name:_____________________________
Title:____________________________
88
BANK OF OKLAHOMA, N.A., as Syndication Agent
and as Lender
By: ___________________________________
Name:______________________________
Title:_____________________________
89