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AMENDED AND RESTATED CREDIT AGREEMENT
dated as of June 18, 1998,
by and among
▇▇▇▇▇▇ ▇▇▇▇▇▇, INC.,
as Borrower,
the Lenders referred to herein,
and
FIRST UNION NATIONAL BANK,
as Administrative Agent
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TABLE OF CONTENTS
PAGE
ARTICLE I DEFINITIONS.........................................................1
SECTION 1.1. Definitions...................................................1
SECTION 1.2. General......................................................15
SECTION 1.3. Other Definitions and Provisions.............................16
ARTICLE II REVOLVING CREDIT FACILITY.........................................16
SECTION 2.1. Revolving Credit Loans.......................................16
SECTION 2.2. Procedure for Advances of Revolving Credit Loans.............16
SECTION 2.3. Repayment of Revolving Credit Loans..........................17
SECTION 2.4. Revolving Credit Notes.......................................17
SECTION 2.5. Permanent Reduction of the Revolving Credit Commitment.......18
SECTION 2.6. Termination of the Revolving Credit Facility.................18
SECTION 2.7. Use of Proceeds..............................................18
SECTION 2.8. Security.....................................................18
ARTICLE III LETTER OF CREDIT FACILITY........................................18
SECTION 3.1. L/C Commitment...............................................18
SECTION 3.2. Procedure for Issuance of Letters of Credit..................19
SECTION 3.3. Letter of Credit Fees and Other Charges......................19
SECTION 3.4. L/C Participations...........................................20
SECTION 3.5. Reimbursement Obligation of the Borrower.....................21
SECTION 3.6. Obligations Absolute.........................................21
SECTION 3.7. Effect of Application........................................22
ARTICLE IV TERM LOAN FACILITY................................................22
SECTION 4.1. Term Loans...................................................22
SECTION 4.2. Procedure for Advance of Term Loans..........................22
SECTION 4.3. Repayment of Term Loans......................................22
SECTION 4.4. Optional Prepayments of Term Loans...........................22
SECTION 4.5. Term Notes...................................................23
SECTION 4.6. Use of Proceeds..............................................23
SECTION 4.7. Security.....................................................23
ARTICLE V GENERAL LOAN PROVISIONS............................................23
SECTION 5.1. Interest.....................................................23
SECTION 5.2. Fees.........................................................25
SECTION 5.3. Notice and Manner of Conversion or Continuation of Loans.....25
SECTION 5.4. Mandatory Prepayments of Loans...............................26
SECTION 5.5. Manner of Payment............................................27
SECTION 5.6. Crediting of Payments and Proceeds...........................28
SECTION 5.7. Adjustments..................................................28
SECTION 5.8. Nature of Obligations of Lenders Regarding Extensions of
Credit; Assumption by the Administrative Agent...............28
SECTION 5.9. Changed Circumstances........................................29
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SECTION 5.10. Indemnity....................................................31
SECTION 5.11. Capital Requirements.........................................31
SECTION 5.12. Taxes........................................................31
ARTICLE VI CLOSING; CONDITIONS OF CLOSING AND BORROWING......................33
SECTION 6.1. Closing......................................................33
SECTION 6.2. Conditions to Closing and Extensions of Credit...............33
SECTION 6.3. Conditions to All Extensions of Credit.......................36
ARTICLE VII REPRESENTATIONS AND WARRANTIES OF THE BORROWER...................37
SECTION 7.1. Representations and Warranties...............................37
SECTION 7.2. Survival of Representations and Warranties, Etc..............43
ARTICLE VIII FINANCIAL INFORMATION AND NOTICES...............................43
SECTION 8.1. Financial Statements.........................................44
SECTION 8.2. Compliance Certificates......................................44
SECTION 8.3. Other Reports................................................44
SECTION 8.4. Notice of Litigation and Other Matters.......................45
SECTION 8.5. Accuracy of Information......................................46
ARTICLE IX AFFIRMATIVE COVENANTS.............................................46
SECTION 9.1. Preservation of Corporate Existence and Related Matters......46
SECTION 9.2. Maintenance of Property......................................46
SECTION 9.3. Insurance....................................................46
SECTION 9.4. Accounting Methods and Financial Records.....................47
SECTION 9.5. Payment and Performance of Obligations.......................47
SECTION 9.6. Compliance With Laws and Approvals...........................47
SECTION 9.7. Environmental Laws...........................................47
SECTION 9.8. Compliance with ERISA........................................47
SECTION 9.9. Compliance With Agreements...................................48
SECTION 9.10. Conduct of Business..........................................48
SECTION 9.11. Visits and Inspections.......................................48
SECTION 9.12. Additional Collateral........................................48
SECTION 9.13. Kinder ▇▇▇▇▇▇ ▇.▇. Security Agreement........................48
SECTION 9.14. Further Assurances...........................................49
ARTICLE X FINANCIAL COVENANTS................................................49
SECTION 10.1. Leverage Ratio...............................................49
SECTION 10.2. Combined Leverage Ratio......................................49
SECTION 10.3 Interest Coverage Ratio......................................49
SECTION 10.4 Combined Interest Coverage Ratio.............................50
ARTICLE XI NEGATIVE COVENANTS................................................50
SECTION 11.1. Limitations on Debt..........................................50
SECTION 11.2. Limitations on Liens.........................................51
SECTION 11.3. Limitations on Loans, Advances, Investments and Acquisitions.52
SECTION 11.4. Limitations on Mergers and Liquidation.......................53
SECTION 11.5. Limitations on Sale of Assets................................53
SECTION 11.6. Limitations on Dividends and Distributions...................54
SECTION 11.7. Limitations on Exchange and Issuance of Capital Stock........54
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SECTION 11.8. Transactions with Affiliates.................................55
SECTION 11.9. Certain Accounting Changes...................................55
SECTION 11.10. Material Amendments.........................................55
SECTION 11.11. Operating Leases............................................55
SECTION 11.12. Restrictive Agreements......................................55
ARTICLE XII DEFAULT AND REMEDIES.............................................55
SECTION 12.1. Events of Default............................................55
SECTION 12.2. Remedies.....................................................58
SECTION 12.3. Rights and Remedies Cumulative; Non-Waiver; etc..............59
ARTICLE XIII THE ADMINISTRATIVE AGENT........................................59
SECTION 13.1. Appointment..................................................59
SECTION 13.2. Delegation of Duties.........................................59
SECTION 13.3. Exculpatory Provisions.......................................59
SECTION 13.4. Reliance by the Administrative Agent.........................60
SECTION 13.5. Notice of Default............................................60
SECTION 13.6. Non-Reliance on the Administrative Agent and Other Lenders...60
SECTION 13.7. Indemnification..............................................61
SECTION 13.8. The Administrative Agent in Its Individual Capacity..........61
SECTION 13.9. Resignation of the Administrative Agent; Successor
Administrative Agent.........................................62
ARTICLE XIV MISCELLANEOUS....................................................62
SECTION 14.1. Notices......................................................62
SECTION 14.2. Expenses; Indemnity..........................................63
SECTION 14.3. Set-off......................................................64
SECTION 14.4. Governing Law................................................64
SECTION 14.5. Consent to Jurisdiction......................................64
SECTION 14.6. Binding Arbitration; Waiver of Jury Trial....................64
SECTION 14.7. Reversal of Payments.........................................65
SECTION 14.8. Injunctive Relief............................................66
SECTION 14.9. Accounting Matters...........................................66
SECTION 14.10. Successors and Assigns; Participations......................66
SECTION 14.11. Amendments, Waivers and Consents............................69
SECTION 14.12. Performance of Duties.......................................70
SECTION 14.13. All Powers Coupled with Interest............................70
SECTION 14.14. Survival of Indemnities.....................................70
SECTION 14.15. Titles and Captions.........................................70
SECTION 14.16. Severability of Provisions..................................70
SECTION 14.17. Counterparts................................................70
SECTION 14.18. Term of Agreement...........................................71
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EXHIBITS
Exhibit A - Form of Amended and Restated Revolving Credit Note
Exhibit B - Form of Term Loan Note
Exhibit C-1 - Form of Notice of Revolving Credit Borrowing
Exhibit C-2 - Form of Notice of Term Loan Borrowing
Exhibit C-3 - Form of Notice of Conversion/Continuation
Exhibit D - Form of Notice of Prepayment
Exhibit E - Form of Notice of Account Designation
Exhibit F - Form of Officer's Compliance Certificate
Exhibit G - Form of Assignment and Acceptance
Exhibit H - Form of Amended and Restated Security Agreement
SCHEDULES
Schedule 1 - Lenders and Commitments
Schedule 7.1(a) - Jurisdictions of Organization and Qualification
Schedule 7.1(b) - Subsidiaries and Capitalization
Schedule 7.1(e) - Compliance with Laws and Governmental Approvals
Schedule 7.1(h) - Environmental Matters
Schedule 7.1(i) - ERISA Plans
Schedule 7.1(l) - Material Contracts
Schedule 7.1(m) - Labor and Collective Bargaining Agreements
Schedule 7.1(s) - Debt and Guaranty Obligations
Schedule 7.1(t) - Litigation
Schedule 11.2 - Existing Liens
Schedule 11.3 - Existing Loans, Advances and Investments
Schedule 11.8 - Affiliate Transactions
AMENDED AND RESTATED CREDIT AGREEMENT, dated as of the 18th day of June,
1998, by and among ▇▇▇▇▇▇ ▇▇▇▇▇▇, INC., a corporation organized under the laws
of Delaware (the "Borrower"), the Lenders who are or may become a party to this
Agreement (the "Lenders"), and FIRST UNION NATIONAL BANK, as Administrative
Agent for the Lenders.
STATEMENT OF PURPOSE
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Pursuant to the Credit Agreement dated as of February 14, 1997 by and among
the Borrower, the lenders party thereto (the "Original Lenders") and First Union
National Bank (f/k/a First Union National Bank of North Carolina), as agent (the
"Original Agent") as amended by the letter agreement dated August 4, 1997 from
the Borrower to the Original Agent, the First Amendment to Credit Agreement
dated as of September 26, 1997 among the Borrower, the Original Lenders and the
Original Agent and the Second Amendment to Credit Agreement dated as of December
31, 1997 among the Borrower, the Original Lenders and the Original Agent (as so
amended, the "Existing Facility"), the Original Lenders agreed to extend certain
credit facilities to the Borrower. The Borrower and the Lenders now desire to
amend and restate the Existing Facility in its entirety pursuant to the terms
and conditions of this Agreement.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged by the parties hereto, such parties
hereby agree as follows:
ARTICLE I
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DEFINITIONS
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SECTION 1.1. Definitions. The following terms when used in this Agreement
shall have the meanings assigned to them below:
"Administrative Agent" means First Union in its capacity as Administrative
Agent hereunder, and any successor thereto appointed pursuant to Section 13.9.
"Administrative Agent's Office" means the office of the Administrative
Agent specified in or determined in accordance with the provisions of Section
14.1.
"Affiliate" means, with respect to any Person, any other Person (other
than a Subsidiary) which directly or indirectly through one or more
intermediaries, controls, or is controlled by, or is under common control with,
such first Person or any of its Subsidiaries. The term "control" means (a) the
power to vote five percent (5%) or more of the securities or other equity
interests of a Person having ordinary voting power, or (b) the possession,
directly or indirectly, of any other power to direct or cause the direction of
the management and policies of a Person, whether through ownership of voting
securities, by contract or otherwise.
"Aggregate Commitment" means the aggregate amount of the Lenders'
Commitments hereunder, as such amount may be reduced or modified at any time or
from time to time pursuant to the terms hereof. On the Closing Date, the
Aggregate Commitment shall be One Hundred Million Dollars ($100,000,000).
"Agreement" means this Amended and Restated Credit Agreement, as amended,
restated or otherwise modified from time to time.
"Applicable Law" means all applicable provisions of constitutions,
statutes, laws, rules, treaties, regulations and orders of all Governmental
Authorities and all orders and decrees of all courts and arbitrators.
"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" shall have the meaning assigned thereto in
Section 14.10.
"Base Rate" means, at any time, the higher of (a) First Union's Prime Rate
or (b) the Federal Funds Rate plus 1/2 of 1%; each change in the Base Rate shall
take effect simultaneously with the corresponding change or changes in the Prime
Rate or the Federal Funds Rate.
"Base Rate Loan" means any Loan bearing interest at a rate based upon the
Base Rate as provided in Section 5.1(a).
"Borrower" means ▇▇▇▇▇▇ ▇▇▇▇▇▇, Inc. in its capacity as borrower hereunder.
"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 and New York, New York, 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 Asset" means, with respect to any Person, any asset that should,
in accordance with GAAP, be classified and accounted for as a capital asset on a
Consolidated balance sheet of such Person.
"Capital Expenditures" means, with respect to any Person for any period,
the aggregate cost of all Capital Assets acquired by such Person during such
period, as determined in accordance with GAAP.
"Capital Lease" means, with respect to any Person, any lease of any
property that should, in accordance with GAAP, be classified and accounted for
as a capital lease on a Consolidated balance sheet of such Person.
"Capital Stock" means, with respect to any Person, any and all shares,
interests, rights to purchase, warrants, options, participations or other
equivalents (however designated) of such Person's equity, including all common
stock and preferred stock, any limited or general partnership interest and any
limited liability company membership.
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"Cash Equivalents" shall have the meaning assigned thereto in Section
11.3(b).
"Change in Control" shall have the meaning assigned thereto in Section
12.1(h).
"Closing Date" means the date of this Agreement or such later Business Day
upon which each condition described in Article VI shall be satisfied or waived
in all respects in a manner acceptable to the Administrative Agent.
"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 any collateral pledged by the Borrower, its
shareholders, or any of their Subsidiaries to the Administrative Agent, for the
ratable benefit of itself and the Lenders, in order to secure the Obligations or
any portion thereof.
"Combined Debt" means Debt of the Borrower and its Consolidated
Subsidiaries (including Kinder ▇▇▇▇▇▇ ▇.▇.), ▇▇▇▇▇▇ ▇▇▇▇▇▇ Energy and its
Restricted Subsidiaries (excluding the Debt of SFPP), calculated on a combined
basis in accordance with GAAP.
"Combined Interest Expense" means Interest Expense of the Borrower and its
Consolidated Subsidiaries (including Kinder ▇▇▇▇▇▇ ▇.▇.), ▇▇▇▇▇▇ ▇▇▇▇▇▇ Energy
and its Restricted Subsidiaries (excluding Interest Expense in respect of the
Debt of SFPP), calculated on a combined basis in accordance with GAAP.
"Commitment" means, as to any Lender, the sum of such Lender's Revolving
Credit Commitment and Term Loan Commitment.
"Consolidated" means, when used with reference to financial statements or
financial statement items of any Person or Persons, such statements or items on
a consolidated basis in accordance with applicable principles of consolidation
under GAAP.
"Consolidated Subsidiaries" shall mean each Subsidiary of the Borrower
(whether now existing or hereafter acquired or created) the financial statements
of which shall be (or should have been) consolidated with the financial
statements of the Borrower in accordance with GAAP. As of the Closing Date,
Kinder ▇▇▇▇▇▇ ▇.▇. is the only Consolidated Subsidiary of the Borrower.
"Credit Facilities" means the collective reference to the Revolving Credit
Facility, the L/C Facility and the Term Loan Facility.
"Custodian and Negative Pledge Agreement" means that certain Custodian and
Negative Pledge Agreement executed by Kinder ▇▇▇▇▇▇ ▇.▇., the Administrative
Agent and First Union, in its capacity as custodian, on or prior to the Closing
Date.
"Debt" means, with respect to any Person at any date and without
duplication, the sum of the following calculated in accordance with GAAP: (a)
all liabilities, obligations and indebtedness for borrowed money including but
not limited to obligations evidenced by bonds, debentures, notes
3
or other similar instruments of any such Person, (b) all obligations of such
Person under conditional sale or other title retention agreements relating to
property acquired by such Person, (c) all obligations to pay the deferred
purchase price of property or services of any such Person, except trade payables
arising in the ordinary course of business not more than ninety (90) days past
due, (d) the portion of obligations of any such Person as lessee under Capital
Leases that is properly classified as a liability on a balance sheet in
accordance with GAAP, (e) the lesser of (i) Debt of any other Person secured by
a Lien on any asset of any such Person or (ii) the fair market value of such
assets subject to such Lien, (f) all Guaranty Obligations of any such Person
(except those permitted by Section 11.1(f)), (g) all obligations, contingent or
otherwise, of any such Person relative to the face amount of letters of credit,
whether or not drawn, including without limitation any Reimbursement Obligation,
and banker's acceptances issued for the account of any such Person and (h) all
net obligations incurred by any such Person pursuant to Hedging Agreements.
"Default" means any of the events specified in Section 12.1 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.
"EBITDA" means (without duplication), with respect to any Person for any
period, the Net Income of such Person for such period determined in accordance
with GAAP, increased (to the extent deducted in determining such earnings for
such period) by the sum of (a) all income taxes (including state franchise taxes
based upon income) of such Person paid or accrued according to GAAP for such
period; (b) Interest Expense of such Person for such period; and (c)
depreciation and amortization of such Person for such period determined in
accordance with GAAP; provided, that if during any period such Person (the
"Acquiring Person") acquires any other Person or all or substantially all of the
assets of such other Person, the EBITDA attributable to such assets or an amount
equal to the percentage of ownership of the Acquiring Person in such other
Person times the EBITDA of such other Person, for such period determined on a
pro forma basis (which determination, in each case, may take into account
adjustments for cost savings and shall be subject to the approval of the
Required Lenders, not to be unreasonably withheld) may be included as EBITDA of
the Acquiring Company for such period.
"Employee Benefit Plan" means any employee benefit plan within the meaning
of Section 3(3) of ERISA which (a) is maintained for employees of the Borrower
or any ERISA Affiliate or (b) has at any time within the preceding six years
been maintained for the employees of the Borrower or any current or former ERISA
Affiliate.
"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 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.
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"ERISA" means the Employee Retirement Income Security Act of 1974, and the
rules and regulations 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 12.1,
provided that any requirement for passage of time, giving of notice, or any
other condition, has been satisfied.
"Excess Cash Flow" means, with respect to the Borrower and its Consolidated
Subsidiaries for any period, the sum of the following for such period (a) KMI
Cash Flow plus any extraordinary cash gains minus (b) the sum of (i) Interest
Expense, (ii) Capital Expenditures and (iii) taxes paid or payable in cash.
"Existing Facility" shall have the meaning assigned thereto in the
Statement of Purpose.
"Extensions of Credit" means (a) with respect to all Lenders, the aggregate
principal amount of all outstanding Loans and L/C Obligations and (b) with
respect to each Lender, the sum of (i) such Lender's Revolving Credit Commitment
Percentage of the outstanding Revolving Credit Loans and L/C Obligations and
(ii) such Lender's Term Loan Percentage of the Term Loans.
"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" shall mean 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.
"Fee Letter" means the separate fee letter agreement executed by the
Borrower and First Union on the Closing Date.
"First Union" means First Union National Bank, a national banking
association, and its successors.
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"Fiscal Quarter" means, with respect to the Borrower and its Subsidiaries,
any three-month period ending on the last day of March, June, September or
December.
"Fiscal Year" means the fiscal year of the Borrower and its Subsidiaries
ending on December 31.
"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 Subsidiaries throughout the period indicated and, subject
to Section 14.9, consistent with the prior financial practice of the Borrower
and its 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.
"Guaranty Obligation" means, with respect to any Person , without
duplication, any obligation, contingent or otherwise, of any such Person
pursuant to which such Person has directly or indirectly guaranteed any Debt or
other obligation of any other Person and, without limiting the generality of the
foregoing, any obligation, direct or indirect, contingent or otherwise, of any
such Person (a) to purchase or pay (or advance or supply funds for the purchase
or payment of) such Debt or other obligation (whether arising by virtue of
partnership arrangements, by agreement to keep well, to purchase assets, goods,
securities or services, to take-or-pay, or to maintain financial statement
condition or otherwise) or (b) entered into for the purpose of assuring in any
other manner the obligee of such Debt or other obligation of the payment thereof
or to protect such obligee against loss in respect thereof (in whole or in
part); provided, that the term Guaranty Obligation shall not include
endorsements for collection or deposit in the ordinary course of business.
"Hazardous Materials" means any substances or materials (a) which are or
become defined as hazardous wastes, hazardous substances, pollutants,
contaminants, chemical substances or mixtures or toxic substances under any
Environmental Law, (b) which are toxic, explosive, corrosive, flammable,
infectious, radioactive, carcinogenic, mutagenic or otherwise harmful to human
health or the environment and are or become regulated by any Governmental
Authority, (c) the presence of which require investigation or remediation under
any Environmental Law or common law, (d) the discharge or emission or release of
which requires a permit or license under any Environmental Law or other
Governmental Approval, (e) which are deemed to constitute a nuisance, a trespass
or pose a health or safety hazard to persons or neighboring properties, (f)
which are materials consisting of underground or aboveground storage tanks,
whether empty, filled or partially filled with any substance, or (g) which
contain, without limitation, asbestos, polychlorinated biphenyls, urea
formaldehyde foam insulation, petroleum hydrocarbons, petroleum derived
substances or waste, crude oil, nuclear fuel, natural gas or synthetic gas.
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"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.
"Interest Expense" means, without duplication, with respect to any Person
for any period, the aggregate amount of interest, whether expensed or
capitalized, paid, accrued or scheduled to be paid during such period in respect
of the Debt of such Person including (a) the interest portion of any deferred
payment obligation, (b) the portion of any rental obligation in respect of
Capital Leases allocable to interest expenses and (c) any non-cash interest
payments or accruals of such Person, all determined in accordance with GAAP.
Interest Expense shall be adjusted in a manner reasonably satisfactory to the
Administrative Agent to include on a pro forma basis as of the first day of any
calculation period any Interest Expense on Debt attributable to any acquisition
consummated during such period and exclude on a pro forma basis as of the first
day of any calculation period any Interest Expense on Debt attributable to any
Subsidiary or assets sold during such period (to the extent any such Debt is
discharged in connection with any such sale).
"Interest Period" shall have the meaning assigned thereto in Section
5.1(b).
"Issuing Lender" means First Union, in its capacity as issuer of any Letter
of Credit, or any successor thereto.
"▇▇▇▇▇▇ ▇▇▇▇▇▇ Energy" means ▇▇▇▇▇▇ ▇▇▇▇▇▇ Energy Partners, L.P., a
Delaware limited partnership.
"Kinder ▇▇▇▇▇▇ ▇.▇." means Kinder ▇▇▇▇▇▇ ▇.▇., Inc., a Delaware
corporation.
"KMEP Cash Flow" means (without duplication), for any period, the sum of
(a) OLP "A" EBITDA for such period, (b) the EBITDA of OLP "B" for such period,
(c) the EBITDA of OLP "C" for such period, (d) cash distributions actually
received by ▇▇▇▇▇▇ ▇▇▇▇▇▇ Energy from OLP "D" for such period in respect of its
Capital Stock (but not in excess of an amount equal to the EBITDA of SFPP for
the same period less the sum for such period of (i) all scheduled payments of
principal in respect of Debt of SFPP not refinanced, including the principal
component of any such payments in respect of Capital Leases, (ii) Interest
Expense of SFPP, and (iii) without duplication the amount of all Maintenance
Capital Expenditures), (e) the EBITDA of any other Wholly-Owned Restricted
Subsidiary, and (f) cash distributions actually received by ▇▇▇▇▇▇ ▇▇▇▇▇▇ Energy
from any other Restricted Subsidiary (other than a Wholly-Owned Restricted
Subsidiary); provided, that, if during any period ▇▇▇▇▇▇ ▇▇▇▇▇▇ Energy acquires
any Person or all or substantially all of the assets of any Person, the EBITDA
attributable to such assets or an amount equal to the percentage of ownership of
▇▇▇▇▇▇ ▇▇▇▇▇▇ Energy in such Person times the EBITDA of such Person, for such
period determined on a pro forma basis (which determination, in each case, may
take into account adjustments for cost savings and shall be subject to approval
of the Required Lenders, not to be unreasonably withheld) may be included as
KMEP Cash Flow for such period, if on the date of such acquisition no Debt
(other than Debt otherwise permitted under any credit facility restricting the
Debt incurred or
7
maintained by ▇▇▇▇▇▇ ▇▇▇▇▇▇ Energy) is incurred by reason of and giving effect
to such acquisition and such Person or the entity acquiring such assets, as the
case may be, is a Restricted Subsidiary.
"KMEP Operating Subsidiaries" means OLP "A", OLP "B", OLP "C", OLP "D", and
any other operating partnerships (or partnerships created or acquired to own
interests in operating partnerships), hereafter established or acquired by
▇▇▇▇▇▇ ▇▇▇▇▇▇ Energy.
"KMI Cash Flow" means (without duplication), with respect to the Borrower
and its Consolidated Subsidiaries for any period, EBITDA for such period, plus
all cash distributions received by the Borrower and its Consolidated
Subsidiaries for such period in excess of Net Income.
"KMI Dividend" means dividends to the shareholders of the Borrower in an
amount not to exceed Seventy-Five Million Dollars ($75,000,000) a portion of
which shall be paid on the Closing Date and portion of which shall be paid
during 1998.
"L/C Commitment" means One Million Dollars ($1,000,000).
"L/C Facility" means the letter of credit facility established pursuant to
Article III hereof.
"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 3.5.
"L/C Participants" means the collective reference to all the Lenders other
than the Issuing Lender.
"Lender" means each Person executing this Agreement as a Lender set forth
on the signature pages hereto and each Person that hereafter becomes a party to
this Agreement as a Lender pursuant to Section 14.10.
"Lending Office" means, with respect to any Lender, the office of such
Lender maintaining such Lender's Extensions of Credit.
"Letters of Credit" shall have the meaning assigned thereto in Section
3.1(a).
"Leverage Ratio" means, as of any date of determination, the ratio
determined in accordance with Section 10.1 as of the Fiscal Quarter ending on or
most recently prior to such date of determination.
"LIBOR" means the rate for deposits in Dollars for a period equal to the
Interest Period selected which appears on the Telerate Page 3750 at
approximately 11:00 a.m. London time, two (2) Business Days prior to the
commencement of the applicable Interest Period. If, for any reason, such rate is
not available, then "LIBOR" shall mean the rate per annum at which, as
determined by the Administrative Agent, Dollars in the amount of $5,000,000 are
being offered to leading banks at
8
approximately 11:00 a.m. London time, two (2) Business Days prior to the
commencement 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.
"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 5.1(a).
"Lien" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such asset.
For the purposes of this Agreement, a Person shall be deemed to own subject to a
Lien any asset which it has acquired or holds subject to the interest of a
vendor or lessor under any conditional sale agreement, Capital Lease or other
title retention agreement relating to such asset.
"Loan" means any Revolving Credit Loan or any Term Loan made to the
Borrower pursuant to Articles II and IV, and all such Loans collectively as the
context requires.
"Loan Documents" means, collectively, this Agreement, the Notes, the
Applications, any Hedging Agreement executed by any Lender, the Custodian and
Negative Pledge Agreement, the Security Agreement and each other document,
instrument and agreement executed and delivered by the Borrower, its
Subsidiaries or their counsel in connection with this Agreement or otherwise
referred to herein or contemplated hereby, all as may be amended, restated or
otherwise modified.
"LP Units" means the limited partner units of ▇▇▇▇▇▇ ▇▇▇▇▇▇ Energy.
"Maintenance Capital Expenditures" means cash Capital Expenditures made to
maintain the throughput, deliverable capacity, terminaling capacity, or
fractionation capacity (assuming normal operating conditions, including
down-time and maintenance) of the assets of ▇▇▇▇▇▇ ▇▇▇▇▇▇ Energy and its
Restricted Subsidiaries, taken as a whole, and shall, therefore, not include
cash capital expenditures made in respect of capital additions and improvements.
Where cash capital expenditures are made in part to effectuate the capacity
maintenance level referred to in the immediately preceding sentence and in part
for other purposes, the good faith allocation thereof by Kinder ▇▇▇▇▇▇ ▇.▇.
between the part used to maintain such capacity level and the part used for
other purposes shall be conclusive.
"Material Adverse Effect" means, with respect to the Borrower or any of its
Subsidiaries, a material adverse effect on the properties, business, operations
or condition (financial or otherwise) of any such Persons taken as a whole or
the ability of any such Person to perform its obligations under any Loan
Document or Material Contract, in each case to which it is a party.
9
"Material Contract" means (a) any contract or other agreement, written or
oral, of the Borrower or any of its Consolidated Subsidiaries involving monetary
liability of or to any such Person in an amount in excess of $300,000 per annum
or (b) any other contract or agreement, written or oral, of the Borrower or any
of its Consolidated Subsidiaries the failure to comply with which could
reasonably be expected to have a Material Adverse Effect.
"Multiemployer Plan" means a "multiemployer plan" as defined in Section
4001(a)(3) of ERISA to which the Borrower or any ERISA Affiliate is making, or
is accruing an obligation to make, contributions within the preceding six years.
"Net Cash Proceeds" means, as applicable, (a) with respect to any sale or
other disposition of assets, the gross cash proceeds received by the Borrower or
any of its Consolidated Subsidiaries from such sale less the sum of (i) all
income taxes and other taxes assessed by a Governmental Authority as a result of
such sale and any other reasonable fees and expenses incurred in connection
therewith and (ii) the principal amount of, premium, if any, and interest on any
Debt secured by a Lien on the asset (or a portion thereof) sold, which Debt is
required to be repaid in connection with such sale, (b) with respect to any
offering of Capital Stock or other equity securities or issuance of Debt, the
gross cash proceeds received by the Borrower or any of its Consolidated
Subsidiaries therefrom less all legal, underwriting and other reasonable fees
and expenses incurred in connection therewith and (c) with respect to any
payment under an insurance policy or in connection with a condemnation
proceeding, the amount of cash proceeds received by the Borrower or its
Consolidated Subsidiaries from an insurance company or Governmental Authority
net of all reasonable expenses of collection less the amount of such proceeds
which the Borrower or its Consolidated Subsidiaries has or will, in a reasonably
prompt manner, apply to the repair or replacement of the assets affected by such
loss or proceeding .
"Net Income" means for any Person for any period, the net income or (net
loss) of such Person for such period (taken as a cumulative whole), as
determined in accordance with GAAP, provided that there shall be excluded,
without duplication, from such net income (to the extent otherwise included
therein):
(a) net extraordinary gains and losses (other than, in the case of
losses, losses resulting from charges against net income to establish or
increase reserves for potential environmental liabilities and reserves for
exposure of such Person under rate cases);
(b) net gains or losses in respect of dispositions of assets other
than in the ordinary course of business;
(c) any gains or losses attributable to write-ups or write-downs of
assets; and
(d) proceeds of any key man insurance, or any insurance on property,
plant or equipment.
"Notes" means the Revolving Credit Notes, the Term Notes, or any
combination thereof, made by the Borrower payable to the order of each of the
Lenders, any amendments and
10
modifications thereto, any substitutes therefor, and any replacements,
restatements, renewals or extensions thereof, in whole or in part; "Note" means
any of such Notes.
"Notice of Account Designation" means a notice given by the Borrower to the
Administrative Agent with respect to the distribution of Loan proceeds,
substantially in the form of Exhibit E.
"Notice of Conversion/Continuation" means a notice given by the Borrower to
the Administrative Agent substantially in the form of Exhibit C-3.
"Notice of Payment" means a Notice given by the Borrower to the
Administrative Agent with respect to any optional repayment of Loans,
substantially in the form of Exhibit D.
"Notice of Revolving Credit Borrowing" means the notice given by the
Borrower to the Administrative Agent substantially in the form of Exhibit C-1.
"Notice of Term Loan Borrowing" means the notice given by the Borrower to
the Administrative Agent substantially in the form of Exhibit C-2.
"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 with any Lender
(which such Hedging Agreement is permitted or required hereunder) and (d) all
other fees and commissions (including attorney's fees), charges, indebtedness,
loans, liabilities, financial accommodations, obligations, covenants and duties
owing by the Borrower to the Lenders or the Administrative Agent, under or in
respect of this Agreement, any Note, any Letter of Credit or any of the other
Loan Documents.
"Officer's Compliance Certificate" means the certificate appropriately
completed and substantially in the form of Exhibit F.
"OLP "A"" means ▇▇▇▇▇▇ ▇▇▇▇▇▇ Operating L.P. "A", a Delaware limited
partnership.
"OLP "B"" means ▇▇▇▇▇▇ ▇▇▇▇▇▇ Operating L.P. "B", a Delaware limited
partnership.
"OLP "C"" means ▇▇▇▇▇▇ ▇▇▇▇▇▇ Operating L.P. "C", a Delaware limited
partnership.
"OLP "D"" means ▇▇▇▇▇▇ ▇▇▇▇▇▇ Operating L.P. "D", a Delaware limited
partnership.
"OLP "A" EBITDA" " means (without duplication), for any period, the sum of
(a) the EBITDA of OLP "A" for such period (not including, however, the EBITDA of
any Person in which OLP "A" owned Capital Stock at any time during such period),
plus (b) the aggregate of all distributions actually received by OLP "A" in
respect of such period from any Person in which OLP "A" owned Capital Stock
during all or any portion of such period.
11
"Other Taxes" shall have the meaning assigned thereto in Section 5.12(b).
"PBGC" means the Pension Benefit Guaranty Corporation or any successor
agency.
"Pension Plan" means any Employee Benefit Plan, other than a Multiemployer
Plan, which is subject to the provisions of Title IV of ERISA or Section 412 of
the Code and which (a) is maintained for employees of the Borrower or any ERISA
Affiliates or (b) has at any time within the preceding six years been maintained
for the employees of the Borrower or any of their current or former ERISA
Affiliates.
"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.
"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" shall have the meaning assigned thereto in Section 14.10(d).
"Reimbursement Obligation" means the obligation of the Borrower to
reimburse the Issuing Lender pursuant to Section 3.5 for amounts drawn under
Letters of Credit.
"Required Lenders" means any combination of Lenders holding at least
seventy-five percent (75%) of the Extensions of Credit.
"Restricted Subsidiary" means any Subsidiary of ▇▇▇▇▇▇ ▇▇▇▇▇▇ Energy other
than an Unrestricted Subsidiary. The Board of Directors of the Borrower, by a
board resolution, may designate any Unrestricted Subsidiary to be a Restricted
Subsidiary; provided, that (a) before and after giving effect thereto no Default
or Event of Default shall have occurred and be continuing, (b) the Borrower
shall be in compliance, on a pro forma basis, after giving effect to such
designation, with the covenants contained in Article X, recomputed as at the
last day of the most recently ended Fiscal Quarter of the Borrower as if such
designation had occurred on the first day of each relevant period for testing
such compliance and (c) the Borrower shall have delivered to the Administrative
Agent and the Lenders a certificate of the chief financial officer to such
effect, together with all relevant financial information and calculations
demonstrating such compliance. For such purposes of this definition and of
Article X, a newly designated or acquired Restricted Subsidiary shall be deemed
to have incurred or made on the date of its designation or acquisition, as the
case may be, all such Debt, Liens and investments then outstanding as would be
reflected on its balance sheet, prepared in accordance with GAAP, as at such
date. A true and correct list of the Restricted Subsidiaries of ▇▇▇▇▇▇ ▇▇▇▇▇▇
Energy as of the Closing Date is set forth on Schedule 7.1(a).
12
"Revolving Credit Commitment" means (a) as to any Lender, the obligation of
such Lender to make Revolving Credit Loans to and issue or participate in
Letters of Credit issued for the account of the Borrower hereunder in an
aggregate principal amount at any time outstanding not to exceed the amount set
forth opposite such Lender's name on Schedule 1, as such amount may be reduced
or modified at any time or from time to time pursuant to Sections 2.5 and 14.10
and (b) as to all Lenders, the aggregate commitment of all Lenders to make
Revolving Credit Loans and issue or participate in Letters of Credit, as such
amount may be reduced or modified at any time or from time to time pursuant to
such Sections. The Revolving Credit Commitment of all Lenders on the Closing
Date shall be Fifteen Million Dollars ($15,000,000).
"Revolving Credit Commitment Percentage" means, as to the respective
Revolving Credit Commitment of any Lender at any time, the ratio of (a) the
amount of the Revolving Credit Commitment of such Lender to (b) all of the
Revolving Credit Commitments of all Lenders.
"Revolving Credit Facility" means the revolving credit facility established
pursuant to Article II hereof.
"Revolving Credit Loans" means the revolving credit loans to be made to the
Borrower pursuant to Section 2.1.
"Revolving Credit Notes" means the separate Amended and Restated Revolving
Credit Notes made by the Borrower payable to the order of each Lender,
substantially in the form of Exhibit A hereto, evidencing the Revolving Credit
Facility, and any amendments and modifications thereto, any substitutes
therefor, and any replacements, restatements, renewals or extension thereof, in
whole or in part.
"Revolving Credit Termination Date" means the earliest of the dates
referred to in Section 2.6.
"SEC" means the Securities and Exchange Commission or any successor
Governmental Authority.
"Security Agreement" means the Amended and Restated Security Agreement of
even date executed by the Borrower in favor of the Administrative Agent for the
ratable benefit of itself and the Lenders, substantially in the form of Exhibit
H, as amended, restated or otherwise modified and each other agreement or
writing pursuant to which the Borrower or any Subsidiary thereof pledges or
grants a security interest in any property or assets securing the Obligations.
"SFPP" means SFPP, L.P., a Delaware limited partnership.
"Solvent" means, as to the Borrower and its Consolidated Subsidiaries on a
particular date, that any 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
13
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 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 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 of any other class or classes of such corporation 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. For purposes of this Agreement, ▇▇▇▇▇▇ ▇▇▇▇▇▇
Energy, the KMEP Operating Subsidiaries and their respective Subsidiaries shall
be deemed to be Subsidiaries of the Borrower commencing on the Closing Date.
"Taxes" shall have the meaning assigned thereto in Section 5.12(a).
"Term Loans" means the term loans made to the Borrower pursuant to Section
4.1.
"Term Loan Commitment" means (a) as to any Lender, the obligation of such
Lender to make a Term Loan for the account of the Borrower hereunder in an
aggregate principal amount not to exceed the amount set forth opposite such
Lender's name on Schedule 1 and (b) as to all Lenders, the aggregate commitment
of all Lenders to make Term Loans. The Term Loan Commitment of all Lenders as of
the Closing Date shall be Eighty-Five Million Dollars ($85,000,000).
"Term Loan Percentage" means, as to any Lender, (a) prior to making the
Term Loans, the ratio of (i) the Term Loan Commitment of such Lender to (ii) the
Term Loan Commitments of all Lenders and (b) after the Term Loans are made, the
ratio of (i) the outstanding principal balance of the Term Loan of such Lender
to (ii) the aggregate outstanding principal balance of the Term Loans of all
Lenders.
"Term Loan Facility" means the term loan facility established pursuant to
Article IV hereof under which the Lenders make Term Loans to the Borrower.
"Term Loan Maturity Date" means May 31, 2000.
"Term Notes" means the Term Notes made by the Borrower payable to the order
of each of the Lenders, substantially in the form of Exhibit B hereto,
evidencing the Term Loan Facility, and any amendments, modifications and
supplements thereto, any substitutes therefor, and any replacements,
restatements, renewals or extensions thereof, in whole or in part.
"Termination Event" means: (a) a "Reportable Event" described in Section
4043 of ERISA, (b) the withdrawal of the Borrower or any ERISA Affiliate from a
Pension Plan during a plan year in which it was a "substantial employer" as
defined in Section 4001(a)(2) of ERISA, (c) the termination of a Pension Plan,
the filing of a notice of intent to terminate a Pension Plan or the treatment of
a Pension Plan amendment as a termination under Section 4041 of ERISA, (d) the
institution of proceedings to terminate, or the appointment of a trustee with
respect to, any Pension
14
Plan by the PBGC, (e) any other event or condition which would constitute
grounds under Section 4042(a) of ERISA for the termination of, or the
appointment of a trustee to administer, any Pension Plan, (f) the partial or
complete withdrawal of the Borrower or any ERISA Affiliate from a Multiemployer
Plan, (g) the imposition of a Lien pursuant to Section 412 of the Code or
Section 302 of ERISA, (h) any event or condition which results in the
reorganization or insolvency of a Multiemployer Plan under Sections 4241 or 4245
of ERISA, or (i) any event or condition which results in the termination of a
Multiemployer Plan under Section 4041A of ERISA or the institution by PBGC of
proceedings to terminate a Multiemployer Plan under Section 4042 of ERISA.
"Uniform Customs" the Uniform Customs and Practice for Documentary Credits
(1994 Revision), International Chamber of Commerce Publication No. 500.
"UCC" means the Uniform Commercial Code as in effect in the State of North
Carolina.
"United States" means the United States of America.
"Unrestricted Subsidiary" means (a) any Subsidiary of an Unrestricted
Subsidiary or (b) any Subsidiary of ▇▇▇▇▇▇ ▇▇▇▇▇▇ Energy or of a Restricted
Subsidiary that is designated as an Unrestricted Subsidiary by a board
resolution of the Borrower in accordance with the requirements of the following
sentence with the consent of the Required Lenders (which consent shall not be
unreasonably withheld). The Borrower may hereafter designate any Subsidiary of
▇▇▇▇▇▇ ▇▇▇▇▇▇ Energy or of a Restricted Subsidiary (other than OLP "A", OLP "B",
OLP "C", OLP "D" and SFPP) to be an Unrestricted Subsidiary by a board
resolution of the Borrower, as evidenced by written notice thereof delivered to
the Administrative Agent, if at the time of and after giving effect to such
designation, (i) no Default or Event of Default shall have occurred and be
continuing, (ii) such Subsidiary does not own or hold any Capital Sock of, or
any Lien on any property of, ▇▇▇▇▇▇ ▇▇▇▇▇▇ Energy or any Restricted Subsidiary
and (iii) such Subsidiary does not own or hold any Debt of ▇▇▇▇▇▇ ▇▇▇▇▇▇ Energy
or any Restricted Subsidiary that would not be permitted pursuant to any credit
facility governing the Debt of ▇▇▇▇▇▇ ▇▇▇▇▇▇ Energy or any of its Restricted
Subsidiaries as if incurred on the date of such designation. As of the date
hereof, ▇▇▇▇▇▇ ▇▇▇▇▇▇ Energy has no Unrestricted Subsidiaries.
"Wholly-Owned Restricted Subsidiary" means a Restricted Subsidiary of which
all issued and outstanding Capital Stock (excluding (a) in the case of a
corporation, directors' qualifying shares, (b) in the case of a limited
partnership, a 1.5% general partner interest and (c) in the case of a limited
liability company, a 1.5% member interest) is directly or indirectly owned by
▇▇▇▇▇▇ ▇▇▇▇▇▇ Energy or any of its Restricted Subsidiaries.
SECTION 1.2. General. Unless otherwise specified, a reference in this
Agreement to a particular section, subsection, Schedule or Exhibit is a
reference to that section, subsection, Schedule or Exhibit 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. Any reference herein to "Charlotte time" shall refer to
the applicable time of day in Charlotte, North Carolina.
15
SECTION 1.3. 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 Loan Documents or any
certificate, report or other document made or delivered pursuant to this
Agreement.
(b) Miscellaneous. 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.
ARTICLE II
----------
REVOLVING CREDIT FACILITY
-------------------------
SECTION 2.1. Revolving Credit Loans. Subject to the terms and conditions of
this Agreement, each Lender severally agrees to make Revolving Credit Loans to
the Borrower from time to time from the Closing Date through the Revolving
Credit Termination Date as requested by the Borrower in accordance with the
terms of Section 2.2; provided, that (a) the aggregate principal amount of all
outstanding Revolving Credit Loans (after giving effect to any amount requested)
shall not exceed the Revolving Credit Commitment of all the Lenders less the L/C
Obligations and (b) each Lender's Revolving Credit Commitment Percentage of the
sum of the aggregate principal amount of all outstanding Revolving Credit Loans
and L/C Obligations shall not at any time exceed such Lender's Revolving Credit
Commitment. Each Revolving Credit Loan by a Lender shall be in a principal
amount equal to such Lender's Revolving Credit Commitment Percentage of the
aggregate principal amount of Revolving Credit Loans requested on such occasion.
Subject to the terms and conditions hereof, the Borrower may borrow, repay and
reborrow Revolving Credit Loans hereunder until the Revolving Credit Termination
Date.
SECTION 2.2. Procedure for Advances of Revolving Credit Loans.
(a) Requests for Borrowing. The Borrower shall give the Administrative
Agent a Notice of Revolving Credit Borrowing not later than 11:00 a.m.
(Charlotte time) (i) at least one (1) Business Day before each Base Rate 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 Base Rate Loans in an aggregate principal amount of $500,000 or a whole
multiple of $100,000 in excess thereof and (y) with respect to LIBOR Rate Loans
in an aggregate principal amount of $500,000 or a whole multiple of $100,000 in
excess thereof, (C) whether the Revolving Credit Loans are to be LIBOR Rate
Loans or Base Rate Loans, and (D) in the case of a LIBOR Rate Loan, the duration
of the Interest Period applicable thereto. Notices 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
Revolving Credit Borrowing.
(b) Disbursement of Revolving Credit Loans. Not later than 2:00 p.m.
(Charlotte time) on the proposed borrowing date, each Lender will make available
to the Administrative Agent, for
16
the account of the Borrower, at the office of the Administrative Agent in funds
immediately available to the Administrative Agent, such Lender's Revolving
Credit Commitment Percentage of the Revolving Credit Loans to be made on such
borrowing date. The Borrower hereby irrevocably authorizes the Administrative
Agent to disburse the proceeds of each borrowing requested pursuant to this
Section 2.2 in immediately available funds by transferring such proceeds to the
deposit account designated by the Borrower in the Notice of Account Designation
delivered on the Closing Date or any date thereafter (any such subsequent notice
to supersede any prior notice). Subject to Section 5.8 hereof, to the extent
that any Lender has not made available to the Administrative Agent its Revolving
Credit Commitment Percentage of any Revolving Credit Loan requested pursuant to
this Section 2.2, the Administrative Agent shall not be obligated to disburse
such portion of the proceeds of such Revolving Credit Loan.
SECTION 2.3. Repayment of Revolving Credit Loans.
(a) Repayment on Revolving Credit Termination Date. The Borrower shall
repay the outstanding principal amount of all Revolving Credit Loans in full,
together with all accrued but unpaid interest thereon, on the Revolving Credit
Termination Date.
(b) Mandatory Repayments. If at any time the outstanding principal amount
of all Revolving Credit Loans exceeds the Revolving Credit Commitment of all the
Lenders less the L/C Obligations, the Borrower shall repay immediately upon
notice from the Administrative Agent, by payment to the Administrative Agent for
the account of the Lenders, the Revolving Credit Loans in an amount equal to
such excess. Each such repayment shall be accompanied by any amount required to
be paid pursuant to Section 5.10 hereof.
(c) Optional Repayments. The Borrower may at any time and from time to
time repay the Revolving Credit Loans, in whole or in part, upon at least three
(3) Business Days irrevocable notice to the Administrative Agent with respect to
LIBOR Rate Loans and one (1) Business Day irrevocable notice with respect to
Base Rate Loans, in the form of Notice of Payment attached hereto as Exhibit D,
specifying the date and amount of repayment and whether the repayment is of
LIBOR Rate Loans, Base Rate Loans, or a combination thereof, and, if a
combination thereof, the amount allocable to each. Upon receipt of such notice,
the Administrative Agent shall promptly notify each Lender. If any such notice
is given, the amount specified in such notice shall be due and payable on the
date set forth in such notice. Partial repayments shall be in an aggregate
amount of $500,000 or a whole multiple of $100,000 in excess thereof with
respect to Base Rate Loans, and $500,000 or a whole multiple of $100,000 in
excess thereof with respect to LIBOR Rate Loans. Each such repayment shall be
accompanied by any amount required to be paid pursuant to Section 5.10 hereof.
SECTION 2.4. Revolving Credit Notes. Each Lender's Revolving Credit Loans
and the obligation of the Borrower to repay such Revolving Credit Loans shall be
evidenced by a Revolving Credit Note executed by the Borrower payable to the
order of such Lender representing the Borrower's obligation to pay such Lender's
Revolving Credit Commitment in accordance with the terms hereof. Each Revolving
Credit 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 5.1.
17
SECTION 2.5. Permanent Reduction of the Revolving Credit Commitment.
(a) The Borrower shall have the right at any time and from time to time,
upon at least five (5) Business Days prior written notice to the Administrative
Agent, to permanently reduce, in whole at any time or in part from time to time,
without premium or penalty, the Revolving Credit Commitment in an aggregate
principal amount not less than $5,000,000 or any whole multiple of $1,000,000 in
excess thereof.
(b) Each permanent reduction permitted pursuant to this Section 2.5 shall
be accompanied by a payment of principal sufficient to reduce the aggregate
principal amount of Revolving Credit Loans and L/C Obligations after such
reduction to the Revolving Credit Commitment as so reduced. Any reduction of the
Revolving Credit Commitment to zero shall be accompanied by payment of all
outstanding Obligations with respect to the Revolving Credit Facility (and
furnishing of cash collateral satisfactory to the Administrative Agent for all
L/C Obligations) and termination of the Revolving Credit Commitment and the
Revolving Credit Facility. Such cash collateral shall be applied in accordance
with Section 12.2(b). If the reduction of the Revolving Credit Commitment
requires the repayment of any LIBOR Rate Loan, such reduction may be made only
on the last day of the then current Interest Period applicable thereto unless
such repayment is accompanied by any amount required to be paid pursuant to
Section 5.10 hereof.
SECTION 2.6. Termination of the Revolving Credit Facility. The Revolving
Credit Facility shall terminate on the earliest of (a) May 31, 2000, (b) the
date of termination by the Borrower pursuant to Section 2.5, and (c) the date of
termination by the Administrative Agent on behalf of the Lenders pursuant to
Section 12.2(a) (the "Revolving Credit Termination Date").
SECTION 2.7. Use of Proceeds. The Borrower shall use the proceeds of the
Revolving Credit Loans solely (a) prior to August 15, 1998, for general
corporate purposes in an amount not greater than $5,600,000 and (b) to finance
investments permitted by Section 11.3(d).
SECTION 2.8. Security. The Obligations of the Borrower under the Revolving
Credit Facility shall be secured as provided in the Security Agreement.
ARTICLE III
-----------
LETTER OF CREDIT FACILITY
-------------------------
SECTION 3.1. L/C Commitment.
(a) Subject to the terms and conditions hereof, the Issuing Lender, in
reliance on the agreements of the other Lenders set forth in Section 3.4(a),
agrees to issue standby letters of credit ("Letters of Credit") for the account
of the Borrower on any Business Day from the Closing Date through but not
including the Revolving Credit 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, (a) the L/C Obligations would exceed the L/C Commitment or (b) the
aggregate principal amount of the Revolving Credit Loans
18
and L/C Obligations then outstanding would exceed the Revolving Credit
Commitment of all Lenders.
(b) Each Letter of Credit shall (i) be denominated in Dollars in a minimum
amount of $50,000, (ii) be a standby letter of credit issued to support
obligations of the Borrower or any of its Subsidiaries incurred in the ordinary
course of business, (iii) expire on a date satisfactory to the Issuing Lender,
which date shall be no later than the Revolving Credit Termination Date and (iv)
be subject to the Uniform Customs and, to the extent not inconsistent therewith,
the laws of the State of North Carolina. 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.
SECTION 3.2. 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 3.1 and Article VI hereof,
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 three (3)
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 furnish to the Borrower a copy of such Letter of Credit and furnish
to each Lender a copy of such Letter of Credit and the amount of each Lender's
L/C Participation therein, all promptly following the issuance of such Letter of
Credit.
SECTION 3.3. Letter of Credit Fees and Other Charges.
(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 fee with respect
to each Letter of Credit in an amount equal to the product of (i) the daily
average amount available to be drawn under such Letter of Credit for the
applicable Fiscal Quarter times (ii) 2.25% per annum; provided, that each Letter
of Credit shall bear a minimum letter of credit fee of $500. The Borrower shall
pay such letter of credit fee quarterly in arrears on the last Business Day of
each Fiscal Quarter and on the Revolving Credit Termination Date. The
Administrative Agent shall, promptly following its receipt thereof, distribute
such fee to the Lenders pro rata in accordance with their respective Revolving
Commitment Percentages.
(b) In addition to the foregoing letter of credit fee, the Borrower shall
pay to the Administrative Agent, for the account of the Issuing Lender, a facing
fee of one-eighth of one percent (1/8%) per annum on the face amount of each
Letter of Credit, payable quarterly in arrears on the last Business Day of each
Fiscal Quarter and on the Revolving Credit Termination Date. The
19
Administrative Agent shall, promptly following its receipt thereof, distribute
such fee to the Issuing Lender.
(c) The Borrower shall pay or reimburse the Issuing Lender for such normal
and customary non-duplicative 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 3.4. 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 Revolving Credit
Commitment Percentage in the Issuing Lender's obligations and rights under each
Letter of Credit 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 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 Revolving Credit
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 3.4(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 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 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 3.4(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 Revolving
Credit Commitment Percentage of such payment in accordance with this Section
3.4, 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
20
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 3.5. Reimbursement Obligation of the Borrower. The Borrower agrees
to reimburse the Issuing Lender on each date on which the Issuing Lender
notifies the Borrower of the date and amount of a draft paid under any Letter of
Credit for the amount of (a) such draft so paid and (b) any taxes, fees, charges
or other costs or expenses incurred by the Issuing Lender in connection with
such payment. Each such payment shall be made to the Issuing Lender at its
address for notices specified herein in lawful money of the United States and in
immediately available funds. Interest shall be payable on any and all amounts
remaining unpaid by the Borrower under this Article III from the date such
amounts become payable (whether at stated maturity, by acceleration or
otherwise) until payment in full at the rate which would be payable on any
outstanding Base Rate Loans which were then overdue. If the Borrower fails to
timely reimburse the Issuing Lender on the date the Borrower receives the notice
referred to in this Section 3.5, the Borrower shall be deemed to have timely
given a Notice of Revolving Credit Borrowing to the Administrative Agent
pursuant to Section 2.2 requesting the Lenders to make a Revolving Credit Loan
on such date in an amount equal to the amount of such drawing and, subject to
the satisfaction or waiver of the conditions precedent specified in Article VI,
the Lenders shall make Revolving Credit Loans in such amount, the proceeds of
which shall be applied to reimburse the Issuing Lender for the amount of the
related drawing and costs and expenses.
SECTION 3.6. 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.
The Borrower also agrees with the Issuing Lender that the Issuing Lender shall
not be responsible for, and the Borrower's Reimbursement Obligation under
Section 3.5 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 a 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
the Uniform Customs 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 to the Borrower. The responsibility of the Issuing Lender to the Borrower
in connection with any draft presented for payment under any Letter of Credit
shall, in addition to any payment obligation expressly provided for in such
Letter of Credit, be limited to determining that the documents (including each
draft) delivered under such Letter of Credit in connection with such presentment
are in conformity with such Letter of Credit.
21
SECTION 3.7. Effect of Application. To the extent that any provision of any
Application related to any Letter of Credit is inconsistent with the provisions
of this Article III, the provisions of this Article III shall apply.
ARTICLE IV
----------
TERM LOAN FACILITY
------------------
SECTION 4.1. Term Loans. Subject to the terms and conditions of this
Agreement, each Lender severally agrees to make Term Loans to the Borrower on
the Closing Date in a principal amount equal to such Lender's Term Loan
Commitment.
SECTION 4.2. Procedure for Advance of Term Loans.
(a) The Borrower shall give the Administrative Agent a Notice of Term Loan
Borrowing prior to 11:00 a.m. (Charlotte time) on the Closing Date, requesting
that the Lenders make the Term Loans as a Base Rate Loan on such date in an
amount equal to the aggregate Term Loan Commitment.
(b) To the extent any conversion of the applicable interest rate is
effected pursuant to Section 5.3, each borrowing of a Base Rate Loan shall be in
an aggregate principal amount of at least $5,000,000 or any integral multiple of
$1,000,000 in excess thereof and each borrowing of a LIBOR Rate Loan shall be in
an aggregate principal amount of $5,000,000 or any integral multiple of
$1,000,000 in excess thereof.
(c) Not later than 1:00 p.m. (Charlotte time) on the Closing Date, 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, the amount of such Lender's Term Loan.
The Borrower hereby irrevocably authorizes the Administrative Agent to disburse
the proceeds of the Term Loans in immediately available funds by wire transfer
in accordance with the Notice of Account Designation delivered pursuant to
Section 6.2(f).
SECTION 4.3. Repayment of Term Loans. The Borrower shall repay the
outstanding principal amount of the Term Loans in full, together with accrued
interest thereon, on the Term Loan Maturity Date.
SECTION 4.4. Optional Prepayments of Term Loans. The Borrower shall have
the right at any time and from time to time upon delivery to the Administrative
Agent of a Notice of Payment at least three (3) Business Days prior to the
repayment of any LIBOR Rate Loan and one (1) Business Day prior to the repayment
of any Base Rate Loan to repay the Term Loans in whole or in part without
premium or penalty; provided, that any voluntary prepayment of the Term Loans
prior to December 15, 1998 shall be accompanied by a prepayment fee equal to one
percent (1%) of the principal amount of such Term Loans to be prepaid. Upon
receipt of such Notice of Payment, the Administrative Agent shall promptly
notify each Lender. If any such Notice of
22
Payment is given, the amount specified in such notice shall be due and payable
on the date set forth in such notice. Each optional prepayment of the Term Loans
hereunder shall be in an aggregate principal amount of at least $2,000,000 or
any whole multiple of $1,000,000 in excess thereof with respect to Base Rate
Loans and $2,000,000 or any whole multiple of $1,000,000 in excess thereof with
respect to LIBOR Rate Loans. Each such repayment shall be accompanied by any
amount required to be paid pursuant to Section 5.10 hereof
SECTION 4.5. Term Notes. Each Lender's Term Loans and the obligation of the
Borrower to repay such Term Loans shall be evidenced by a Term Note, payable to
the order of such Lender representing the Borrower's obligation to pay such
Lender's Term Loan Commitment in accordance with the terms hereof. Each Term
Note shall be dated the Closing Date and shall bear interest on the unpaid
principal amount thereof at the applicable interest rate per annum specified in
Section 5.1.
SECTION 4.6. Use of Proceeds. The Borrower shall use the proceeds of the
Term Loans solely to (a) finance the KMI Dividend; provided, that any proceeds
of the Term Loans not used to pay the KMI Dividend on the Closing Date shall be
invested in accordance with Section 11.3(b) pending payment of the KMI Dividend,
(b) repay the Existing Facility and (c) pay certain fees and expenses incurred
in connection with the transactions contemplated hereby.
SECTION 4.7. Security. The Obligations of the Borrower under the Term Loan
Facility shall be secured as provided in the Security Agreement.
ARTICLE V
---------
GENERAL LOAN PROVISIONS
-----------------------
SECTION 5.1 Interest.
(a) Interest Rate Options. Subject to the provisions of this Section 5.1,
at the election of the Borrower, the aggregate principal balance of the Notes or
any portion thereof shall bear interest at (i) the Base Rate plus 0.50% or (ii)
the LIBOR Rate plus 3.00%; provided, the LIBOR Rate shall not be available until
three (3) Business Days after the Closing Date. The Borrower shall select the
rate of interest and Interest Period, if any, applicable to any Loan at the time
a Notice of Borrowing is given pursuant to Section 2.2 and 4.2 or at the time a
Notice of Conversion/Continuation is given pursuant to Section 5.3. Each Loan 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 5.1(a), shall elect
an interest period (each, an "Interest Period") to be applicable to such LIBOR
Rate Loan, which Interest Period shall be a period of one (1), two (2) or three
(3) months; provided that:
23
(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 Revolving Credit
Termination Date or the Term Loan Maturity Date, as applicable, and no Interest
Periods shall be selected by the Borrower which would result in the repayment of
any LIBOR Rate Loan prior to the end of an Interest Period; and
(v) there shall be no more than five (5) Interest Periods
outstanding at any time.
(c) Default Rate. 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 two percent (2%) 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 two percent (2%) in excess of the rate then applicable to Base
Rate Loans, and (iii) all outstanding Base Rate Loans shall bear interest at a
rate per annum equal to two percent (2%) 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 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 Fiscal Quarter.
Interest on each LIBOR Rate Loan shall be payable on the last day of each
Interest Period applicable thereto. 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.
(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
24
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 5.2. Fees.
(a) Commitment Fee. Commencing on the Closing Date, the Borrower shall
pay to the Administrative Agent, for the account of the Lenders, a
non-refundable commitment fee at a rate per annum equal to 1/2 of 1% on the
average daily unused portion of the Revolving Credit Commitment. The commitment
fee shall be payable in arrears on the last Business Day of each Fiscal Quarter
during the term of this Agreement commencing June 30, 1998 (on a prorated basis
through such date), and on the Revolving Credit Termination Date. Such
commitment fee shall be distributed by the Administrative Agent to the Lenders
pro rata in accordance with the Lenders' respective Revolving Credit Commitment
Percentages.
(b) Administrative Agent's and Other Fees. In order to compensate the
Administrative Agent for structuring and syndicating the Loans and for its
obligations hereunder, the Borrower agrees to pay to the Administrative Agent,
for its account, the fees set forth in the Fee Letter.
SECTION 5.3. 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) (i) convert at any time all or any portion
of its outstanding Base Rate Loans that are Revolving Credit Loans in a
principal amount equal to $500,000 or any whole multiple of $100,000 in excess
thereof into LIBOR Rate Loans and (ii) convert at any time all or any portion of
its outstanding Base Rate Loans that are Term Loans in a principal amount of
$5,000,000 or any whole multiple of $1,000,000 in excess thereof into LIBOR Rate
Loans, or (b) upon the expiration of any Interest Period, (i) convert all or any
part of its outstanding LIBOR Rate Loans that are Revolving Credit Loans in a
principal amount equal to $500,000 or a whole multiple of $100,000 in excess
thereof into Base Rate Loans, (ii) convert all or any part of its outstanding
LIBOR Rate Loans that are Term Loans in a principal amount equal to $5,000,000
or a whole multiple of $1,000,000 in excess thereof into Base Rate Loans, or
(iii) 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 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 or to be converted or continued, the last day of the Interest Period
therefor, (B) the effective date of such conversion or continuation (which 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. The Administrative Agent shall promptly notify the
Lenders of such Notice of Conversion/Continuation.
25
SECTION 5.4. Mandatory Prepayments of Loans.
(a) Change in Control; Sale of All Assets. The Borrower shall prepay the
entire outstanding amount of all Extensions of Credit plus any accrued interest
thereon upon the earlier of (i) a Change in Control and (ii) a sale of all or
substantially all of the assets of the Borrower.
(b) Debt Proceeds. The Borrower shall make a mandatory principal
prepayment of the Extensions of Credit in an amount equal to one hundred percent
(100%) of the Net Cash Proceeds from any incurrence of Debt by the Borrower or
any of its Consolidated Subsidiaries (other than Debt permitted pursuant to
Section 11.1).
(c) Equity Proceeds. The Borrower shall make a mandatory principal
prepayment of the Extensions of Credit in an amount equal to one hundred percent
(100%) of the aggregate Net Cash Proceeds from any offering of Capital Stock or
other equity securities by the Borrower or any of its Consolidated Subsidiaries.
(d) Asset Sale Proceeds. The Borrower shall make a mandatory principal
prepayment of the Extensions of Credit in an amount equal to one hundred percent
(100%) of the Net Cash Proceeds from the sale or other disposition of assets by
the Borrower or any of its Consolidated Subsidiaries pursuant to Section
11.5(f).
(e) Insurance and Condemnation Proceeds. The Borrower shall make a
mandatory principal prepayment of the Extensions of Credit in an amount equal to
one hundred percent (100%) of the Net Cash Proceeds received by the Borrower or
any of its Consolidated Subsidiaries from any payment under any property or
casualty insurance policy or from any condemnation proceeding.
(f) Excess Cash Flow. Subject to Section 5.4(g)(ii), the Borrower shall
make a mandatory principal prepayment of the Loans in an amount equal to (i)
fifty percent (50%) of Excess Cash Flow, if any, of the Borrower and its
Consolidated Subsidiaries for the period commencing on the July 1, 1998 and
ending on December 31, 1998 and (ii) seventy-five percent (75%) of Excess Cash
Flow, if any, of the Borrower and its Consolidated Subsidiaries for the period
commencing on January 1, 1999 and ending on March 31, 1999, for the period
commencing on April 1, 1999 and ending on June 30, 1999, for the period
commencing on July 1, 1999 and ending on September 30, 1999, for the period
commencing on October 1, 1999 and ending on December 31, 1999 and for the period
commencing on January 1, 2000 and ending on March 31, 2000. With respect to each
period described above (each a "Calculation Period"), the Borrower shall provide
the Administrative Agent a written calculation of Excess Cash Flow in form and
substance satisfactory to the Administrative Agent no later than 11:00 a.m. ten
(10) days after the end of the applicable Calculation Period.
(g) Notice; Manner of Payment.
(i) Sections 5.4(a) through 5.4(e). Upon the occurrence of any event
triggering the prepayment requirement under Sections 5.4(a) through and
including
26
5.4(e), the Borrower shall give prompt written notice of such event and the
amount of the corresponding prepayment to the Administrative Agent and upon
receipt of such notice, the Administrative Agent shall promptly so notify
the Lenders. Such prepayment shall be made within three (3) Business Days
after the date of consummation of such transaction described in Sections
5.4(a) through and including 5.4(e). Each mandatory prepayment under such
Sections shall be applied as follows: (i) first, to reduce the outstanding
principal balance of the Term Loans on a pro rata basis, (ii) second, to
the extent of any excess, to reduce the outstanding principal balance of
the Revolving Credit Loans on a pro rata basis and (iii) third, to the
extent of any excess, to the cash collateral account described in Section
12.2(b) hereof to the extent of any L/C Obligations then outstanding. Each
prepayment under this Section 5.4(g)(i) shall be accompanied by any payment
required under Section 5.10.
(ii) Section 5.4(f). Each mandatory repayment under Section 5.4(f)
shall be made within ten (10) days after the end of the applicable
Calculation Period and shall be accompanied by the calculation described in
Section 5.4(f); provided, that all Excess Cash Flow accruing for the
Calculation Period referred to in Section 5.4(f)(i) prior to January 1,
1999 shall be deposited in an investment account with the Administrative
Agent pending payment of such amount to the Lenders on or prior to January
10, 1999. Each mandatory repayment under Section 5.4(f) shall be applied as
follows: (i) first, to reduce the outstanding principal balance of the Term
Loans on a pro rata basis, (ii) second, to the extent of any excess, to
reduce the outstanding principal balance of the Revolving Credit Loans on a
pro rata basis and (iii) third, to the extent of any excess, to the cash
collateral account described in Section 12.2(b) hereof to the extent of any
L/C Obligations then outstanding. Each prepayment under this Section
5.4(g)(ii) shall be accompanied by any payment required under Section 5.10.
SECTION 5.5. Manner of Payment. Each payment by the Borrower on account of
the principal of or interest on the Revolving Credit Loans or of any fee,
commission or other amounts (including the Reimbursement Obligation) payable to
the Lenders under this Agreement with respect to the Revolving Credit Loans, the
Letters of Credit or any Revolving Credit 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 Revolving Credit Commitment Percentages, in Dollars, in immediately
available funds and shall be made without any set-off, counterclaim or deduction
whatsoever. Each payment by the Borrower on account of the principal of or
interest on the Term Loans or of any fee, commission or other amounts payable to
the Lenders under this Agreement with respect to the Term Loans or any Term Note
shall be made in like manner, except for the account of the Lenders pro rata in
accordance with their respective Term Loan Percentages. 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 12.1, 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 this Section 5.5
and shall wire advice
27
of the amount of such credit to each Lender. Each payment to the Administrative
Agent of Administrative Agent's or Issuing Lender's fees or expenses shall be
made for the account of the Administrative Agent or Issuing Lender, as the case
may be, and any amount payable to any Lender under Sections 5.9, 5.10, 5.11,
5.12 or 14.2 shall be paid to the Administrative Agent for the account of the
applicable Lender.
SECTION 5.6. 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 12.2, 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 hereunder, then to all indemnity obligations then
due and payable by the Borrower hereunder, then to all Administrative Agent's
and Issuing Lender's fees then due and payable, then to all commitment and other
fees and commissions then due and payable, then to accrued and unpaid interest
on the Notes, the Reimbursement Obligation and any termination payments due in
respect of a Hedging Agreement with any Lender (which such Hedging Agreement is
permitted or required hereunder) (pro rata in accordance with all such amounts
due), then to the principal amount of the Notes and Reimbursement Obligation and
then to the cash collateral account described in Section 12.2(b) hereof to the
extent of any L/C Obligations then outstanding, in that order.
SECTION 5.7. Adjustments. If any Lender (a "Benefited Lender") shall at any
time receive any payment of all or part of the Obligations, or interest thereon,
or if any Lender shall at any time receive any collateral in respect to the
Obligations (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 such other Lender's Extensions of Credit, 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 5.8. 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 2.2(b) and 4.2, and the Administrative Agent may, in
reliance upon such assumption, make available to the Borrower on such date a
corresponding amount. If such amount
28
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 of such borrowing not made
available by such Lender in accordance with the terms hereof, times (b) the
daily average Federal Funds Rate during such period as determined by the
Administrative Agent, times (c) a fraction the numerator of which is the number
of days that elapse from and including such borrowing date to the date on which
such amount of such borrowing 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 shall
be conclusive, absent manifest error. If such amount 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 its Revolving Credit Commitment
Percentage or Term Loan Percentage, as applicable, of any Loan available shall
not relieve it or any other Lender of its obligation, if any, hereunder to make
its Revolving Credit Commitment Percentage or Term Loan Percentage, as
applicable, of such Loan available on such borrowing date, but no Lender shall
be responsible for the failure of any other Lender to make its Revolving Credit
Commitment Percentage or Term Loan Percentage, as applicable, of such Loan
available on the borrowing date.
SECTION 5.9. Changed Circumstances.
(a) Circumstances Affecting LIBOR Rate Availability. 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 Governmental 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
29
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 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 maintaining any LIBOR Rate 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 in
respect of a LIBOR Rate Loan or Letter 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 fifteen (15) 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 5.9(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
reasonable discretion, based upon the assumption that such Lender funded its
Revolving Credit Commitment Percentage or Term Loan Percentage, as applicable,
of the LIBOR Rate Loans in the
30
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 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 5.10. 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 Revolving Credit Borrowing, Notice of
Term Loan 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 reasonable discretion, based
upon the assumption that such Lender funded its Revolving Credit Commitment
Percentage or Term Loan Percentage, as applicable, 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 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 5.11. 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 (but in each case excluding taxes payable on
the net income of any Lender), then within five (5) 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, in the absence of manifest error, be presumed to be correct and binding
for all purposes.
SECTION 5.12. 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
31
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, 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 5.12) 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 5.12(d).
(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 Loan 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 5.12) 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 14.1, 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 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,
32
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.
(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 5.12 shall survive the payment in full of the Obligations and
the termination of the Credit Facilities.
ARTICLE VI
----------
CLOSING; CONDITIONS OF CLOSING AND BORROWING
--------------------------------------------
SECTION 6.1. Closing. The closing shall take place at the offices of
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, L.L.P. on June 18, 1998, or on such other
date as the parties hereto shall mutually agree.
SECTION 6.2. Conditions to Closing and Extensions of Credit. The obligation
of the Lenders to close this Agreement and to make the initial Loan or issue the
initial Letter of Credit is subject to the satisfaction of each of the following
conditions:
(a) Executed Loan Documents. The following Loan Documents shall have been
duly authorized and executed by the parties thereto, shall be in full force and
effect and no default shall exist thereunder, and original counterparts thereof
shall have been duly delivered to the Administrative Agent:
(i) this Agreement;
(ii) the Notes;
(iii) the Security Agreement; and
(iv) the Negative Pledge and Custodian Agreement.
33
(b) Closing Certificates; etc.
(i) Officers's Certificate of the Borrower. The Administrative Agent
shall have received a certificate from the chief executive officer or chief
financial officer of the Borrower, in form and substance satisfactory to the
Administrative Agent, to the effect that all representations and warranties of
the Borrower and Kinder ▇▇▇▇▇▇ ▇.▇. contained in this Agreement and the other
Loan Documents are true, correct and complete; that the Borrower and Kinder
▇▇▇▇▇▇ ▇.▇. are not in violation of any of the covenants contained in this
Agreement and the other Loan 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 Borrower has satisfied each of the
closing conditions in all material respects.
(ii) Certificate of Secretary of the Borrower and Kinder ▇▇▇▇▇▇ ▇.▇..
The Administrative Agent shall have received a certificate of the secretary or
assistant secretary of the Borrower and Kinder ▇▇▇▇▇▇ ▇.▇. certifying that
attached thereto is a true and complete copy of the charter documents of the
Borrower or Kinder ▇▇▇▇▇▇ ▇.▇., as applicable, and all amendments thereto,
certified as of a recent date by the appropriate Governmental Authority in its
jurisdiction of incorporation; that attached thereto is a true and complete copy
of the by-laws of the Borrower or Kinder ▇▇▇▇▇▇ ▇.▇., as applicable, as in
effect on the date of such certification; that attached thereto is a true and
complete copy of resolutions duly adopted by the board of directors of the
Borrower or Kinder ▇▇▇▇▇▇ ▇.▇., as applicable, authorizing the execution,
delivery and performance of the Loan Documents to which it is a party; and as to
the incumbency and genuineness of the signature of each officer of the Borrower
or Kinder ▇▇▇▇▇▇ ▇.▇. executing Loan Documents to which it is a party.
(iii) Certificates of Good Standing. The Administrative Agent shall
have received long-form certificates as of a recent date of the good standing of
the Borrower and Kinder ▇▇▇▇▇▇ ▇.▇. under the laws of its jurisdiction of
organization and each other jurisdiction where the Borrower or Kinder ▇▇▇▇▇▇
▇.▇., as applicable, is qualified to do business.
(iv) Opinions of Counsel. The Administrative Agent shall have received
favorable opinions of counsel to the Borrower and Kinder ▇▇▇▇▇▇ ▇.▇. addressed
to the Administrative Agent and the Lenders with respect to the Borrower, Kinder
▇▇▇▇▇▇ ▇.▇., the Loan Documents, the Collateral and such other matters as the
Lenders shall request.
(v) Solvency Opinion. The Administrative Agent shall have received a
favorable opinion of an independent valuation firm reasonably satisfactory to
the Administrative Agent, addressed to the Administrative Agent and the Lenders
in form and substance satisfactory to the Administrative Agent, that the
Borrower and each of its Consolidated Subsidiaries are Solvent both before and
after giving effect to the KMI Dividend.
(vi) Tax Forms. The Administrative Agent shall have received copies of
the United States Internal Revenue Service forms required by Section 5.12(e)
hereof.
34
(c) Collateral.
(i) Filings and Recordings. All filings and recordations that are
necessary to perfect the security interests of the Lenders in the Collateral
shall have been filed or recorded in all appropriate locations.
(ii) Pledged Collateral. The Administrative Agent shall have
received original stock certificates, or such other certificates evidencing the
ownership interests pledged pursuant to the Security Agreement, together with
an undated stock power for each such certificate duly executed in blank by the
registered owner thereof.
(iii) Lien Search. The Administrative Agent shall have received the
results of a Lien search of all filings made against the Borrower and Kinder
▇▇▇▇▇▇ ▇.▇. under the Uniform Commercial Code as in effect in any state in which
any of their chief executive offices or Collateral is located, indicating among
other things that their assets are free and clear of any Lien except for the
Liens permitted by Section 11.2.
(iv) Insurance. The Administrative Agent shall have received
certificates of insurance in the form required under Section 9.3 and the
Security Agreement and otherwise in form and substance reasonably satisfactory
to the Administrative Agent.
(d) Consents; Defaults.
(i) Governmental and Third Party Approvals. All necessary
approvals, authorizations and consents, if any be required, of any Person and
of all Governmental Authorities and courts having jurisdiction with respect
to the transactions contemplated hereby shall have been obtained.
(ii) No Injunction, Etc. No action, proceeding, investigation,
regulation or legislation shall have been instituted, threatened or proposed
before any Governmental Authority to enjoin, restrain, or prohibit, or to
obtain substantial damages in respect of, or which is related to or arises out
of this Agreement or the other Loan Documents, or which, in the Administrative
Agent's discretion, would make it inadvisable to consummate the transactions
contemplated by this Agreement and the other Loan Documents.
(iii) No Event of Default. No Default or Event of Default shall
have occurred and be continuing.
(e) Financial Matters.
(i) Financial Statements. The Administrative Agent shall have
received the unaudited quarterly and audited annual Consolidated financial
statements of the Borrower and its Consolidated Subsidiaries referred to in
Section 7.1(n), all in form and substance satisfactory to the Administrative
Agent.
35
(ii) Financial Condition Certificate. The Borrower shall have
delivered to the Administrative Agent a certificate, in form and substance
satisfactory to the Administrative Agent, and certified as accurate by the
chief executive officer, chief financial officer or treasurer of the Borrower,
that (A) the Borrower and each of its Consolidated Subsidiaries are Solvent, (B)
the Borrower's payables are current and not past due except for items being
contested in good faith not to exceed $300,000, (C) attached thereto is a pro
forma balance sheet of the Borrower and its Consolidated Subsidiaries setting
forth on a pro forma basis the financial condition of the Borrower and its
Consolidated Subsidiaries on a Consolidated basis as of the end of the most
recently completed Fiscal Quarter, reflecting on a pro forma basis the effect of
the transactions contemplated hereby, including all fees and expenses in
connection therewith and evidencing compliance on a pro forma basis with the
covenants contained in Article X and XI hereof and (D) attached thereto are the
financial projections previously delivered to the Administrative Agent
representing the good faith opinion of the senior management of the Borrower as
to the projected results contained therein.
(iii) Payment at Closing; Fee Letter. There shall have been paid by
the Borrower to the Administrative Agent and the Lenders the fees set forth
or referenced in the Fee Letter and any other accrued and unpaid fees or
commissions due hereunder (including, without limitation, legal fees and
expenses), 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 Loan Documents. The Administrative Agent shall
have received duly authorized and executed copies of the Fee Letter.
(f) Miscellaneous.
(i) Notice of Borrowing and Account Designation. The Administrative
Agent shall have received the Notice of Revolving Credit Borrowing and the
Notice of Term Loan Borrowing with respect to the Loans to be made on the
Closing Date; provided that only Base Rate Loans shall be available on the
Closing Date. The proceeds of the Loans made on the Closing Date shall be
utilized in accordance with the sources and uses table attached to such notices.
The Borrower shall also have delivered to the Administrative Agent a Notice of
Account Designation with respect to the Loans to be made on the Closing Date.
(ii) Proceedings and Documents. All documents, opinions,
certificates and other instruments and all proceedings in connection with the
transactions contemplated hereby shall be satisfactory in form and substance to
the Lenders.
(iii) Due Diligence. The Administrative Agent and the Lenders shall
have completed to their satisfaction their due diligence reviews of the Borrower
and its Subsidiaries in connection with the transactions contemplated hereby.
SECTION 6.3. Conditions to All Extensions of Credit. The obligations of the
Lenders to make any Loan or issue any Letter of Credit is subject to the
satisfaction of the following conditions precedent on the relevant borrowing or
issue date, as applicable:
(a) Continuation of Representations and Warranties. The representations
and warranties contained in Article VII shall be true and correct on and as of
such borrowing or issuance
36
date with the same effect as if made on and as of such date except for any such
representations or warranties made as of a specific date which shall be true 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) or
the issue date with respect to such Letter of Credit or after giving affect to
such Letters of Credit on such date.
(c) Certificates; Additional Documents. The Administrative Agent shall
have received the current Officer's Compliance Certificate, and each additional
document, instrument or other item of information reasonably requested by the
Administrative Agent in connection with the corresponding Extension of Credit.
ARTICLE VII
-----------
REPRESENTATIONS AND WARRANTIES OF THE BORROWER
----------------------------------------------
SECTION 7.1. Representations and Warranties. To induce the Administrative
Agent to enter into this Agreement and the Lenders to make the Loans or issue or
participate in the Letters of Credit, the Borrower hereby represents and
warrants to the Administrative Agent and Lenders that:
(a) Organization; Power; Qualification. Each of the Borrower and its
Subsidiaries 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 be so qualified could not be reasonably expected to have a
Material Adverse Effect. The jurisdictions in which the Borrower and its
Subsidiaries as of the Closing Date are organized and qualified to do business
are described on Schedule 7.1(a).
(b) Ownership. Each Subsidiary of the Borrower is listed on Schedule
7.1(b). The capitalization of the Borrower and its Consolidated Subsidiaries as
of the Closing Date consists of the number of shares, authorized, issued and
outstanding, of such classes and series, with or without par value, described on
Schedule 7.1(b). All outstanding shares have been duly authorized and validly
issued and are fully paid and nonassessable. The shareholders of the
Consolidated Subsidiaries of the Borrower and the number of shares owned by each
as of the Closing Date are described on Schedule 7.1(b). There are no
outstanding stock purchase 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 its Consolidated Subsidiaries as of
the Closing Date, except as described on Schedule 7.1(b).
(c) Authorization of Agreement, Loan Documents and Borrowing. The Borrower
and its Consolidated Subsidiaries have the right, power and authority and have
taken all necessary corporate and other action to authorize the execution,
delivery and performance of this Agreement
37
and each of the other Loan Documents to which it is a party in accordance with
their respective terms. This Agreement and each of the other Loan Documents have
been duly executed and delivered by the duly authorized officers of the Borrower
and Kinder ▇▇▇▇▇▇ ▇.▇., and each such document constitutes the legal, valid and
binding obligation of the Borrower and Kinder ▇▇▇▇▇▇ ▇.▇., 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, Loan Documents and Borrowing with Laws, Etc.
The execution, delivery and performance by the Borrower and its Consolidated
Subsidiaries of the Loan Documents to which each such Person is a party, in
accordance with their respective terms, the borrowings hereunder and the
transactions contemplated hereby 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 the Borrower or any of its Consolidated
Subsidiaries, (ii) conflict with, result in a breach of or constitute a default
under the articles of incorporation, bylaws or other organizational documents of
the Borrower or any of its Subsidiaries or any material 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 Loan Documents.
(e) Compliance with Law; Governmental Approvals. Except as set forth on
Schedule 7.1(e) and further except for such matters as could not reasonably be
expected to have a Material Adverse Effect on the Borrower and its Subsidiaries,
each of the Borrower and its Subsidiaries (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 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.
(f) Tax Returns and Payments. Each of the Borrower and its Subsidiaries
has duly filed or caused to be filed all federal, state, local and other 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 except for those being contested in
good faith. No Governmental Authority has asserted any Lien or other claim
against the Borrower or any Subsidiary thereof with respect to unpaid taxes
which has not been discharged or resolved except for those being contested in
good faith. The charges, accruals and reserves on the books of the Borrower and
any of its Subsidiaries in respect of federal, state, local and other taxes for
all Fiscal Years and portions thereof since the organization of the Borrower and
any of its Subsidiaries are in the judgment of the Borrower adequate, and the
Borrower does not anticipate any additional material taxes or assessments for
any of such years.
(g) Intellectual Property Matters. Each of the Borrower and its
Subsidiaries owns or possesses rights to use all franchises, licenses,
copyrights, copyright applications, patents, patent
38
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 except where the failure to have such
rights could not reasonably be expected to have a Material Adverse Effect on the
Borrower and its Subsidiaries. No event has occurred which permits, or after
notice or lapse of time or both would permit, the revocation or termination of
any such material rights, and neither the Borrower nor any Subsidiary thereof is
liable in any material amount to any Person for infringement under Applicable
Law with respect to any such rights as a result of its business operations.
(h) Environmental Matters. Except as set forth on Schedule 7.1(h) and
further except for such matters as could not reasonably be expected to have a
Material Adverse Effect on the Borrower and its Subsidiaries:
(i) The properties of the Borrower and its Subsidiaries do not
contain, and to their knowledge have not previously contained, any Hazardous
Materials in amounts or concentrations which constitute or constituted a
violation of, applicable Environmental Laws;
(ii) Such properties and all operations conducted in connection
therewith are in compliance, and have been in compliance, with all applicable
Environmental Laws, and there is no contamination at, under or about such
properties or such operations which could interfere with the continued operation
of such properties or impair the fair saleable value thereof;
(iii) Neither the Borrower nor any Subsidiary thereof has received
any notice of violation, alleged violation, non-compliance, liability or
potential liability regarding environmental matters or compliance with
Environmental Laws with regard to any of their properties or the operations
conducted in connection therewith, nor does the Borrower or any Subsidiary
thereof have knowledge or reason to believe that any such notice will be
received or is being threatened;
(iv) Hazardous Materials have not been transported or disposed of
from the properties of the Borrower and its Subsidiaries in violation of, or in
a manner or to a location which could give rise to liability under,
Environmental Laws, nor have any Hazardous Materials been generated, treated,
stored or disposed of at, on or under any of such properties in violation of, or
in a manner that could give rise to liability under, any applicable
Environmental Laws;
(v) No judicial proceedings or governmental or administrative
action is pending, or, to the knowledge of the Borrower, threatened, under any
Environmental Law to which the Borrower or any Subsidiary thereof is or will be
named as a party with respect to such properties or operations conducted in
connection therewith, nor are there any consent decrees or other decrees,
consent orders, administrative orders or other orders, or other administrative
or judicial requirements outstanding under any Environmental Law with respect to
such properties or such operations; and
(vi) There has been no release, or to the best of the Borrower's
knowledge, the threat of release, of Hazardous Materials at or from such
properties, in violation of or in amounts or in a manner that could give rise to
liability under Environmental Laws.
39
(i) ERISA.
(i) As of the Closing Date, neither the Borrower nor any ERISA
Affiliate maintains or contributes to, or has any obligation under, any Employee
Benefit Plans other than those identified, as of the Closing Date, on Schedule
7.1(i);
(ii) The Borrower and each ERISA Affiliate is in compliance with all
applicable provisions of ERISA and the regulations and published interpretations
thereunder with respect to all Employee Benefit Plans except for any required
amendments for which the remedial amendment period as defined in Section 401(b)
of the Code has not yet expired and except for matters that could not reasonably
be expected to have a Material Adverse Effect on the Borrower and its
Subsidiaries. Each Employee Benefit Plan that is intended to be qualified under
Section 401(a) of the Code has been determined by the Internal Revenue Service
to be so qualified, and each trust related to such plan has been determined to
be exempt under Section 501(a) of the Code. No material liability has been
incurred by the Borrower or any ERISA Affiliate which remains unsatisfied for
any taxes or penalties with respect to any Employee Benefit Plan or any
Multiemployer Plan;
(iii) No Pension Plan has been terminated, nor has any accumulated
funding deficiency (as defined in Section 412 of the Code) been incurred
(without regard to any waiver granted under Section 412 of the Code), nor has
any funding waiver from the Internal Revenue Service been received or requested
with respect to any Pension Plan, nor has the Borrower or any ERISA Affiliate
failed to make any contributions or to pay any amounts due and owing as required
by Section 412 of the Code, Section 302 of ERISA or the terms of any Pension
Plan prior to the due dates of such contributions under Section 412 of the Code
or Section 302 of ERISA, nor has there been any event requiring any disclosure
under Section 4041(c)(3)(C) or 4063(a) of ERISA with respect to any Pension Plan
except in each case as could not reasonably be expected to have a Material
Adverse Effect on the Borrower and its Subsidiaries;
(iv) Neither the Borrower nor any ERISA Affiliate has except in each
case as could not reasonably be expected to have a Material Adverse Effect on
the Borrower and its Subsidiaries: (A) engaged in a nonexempt prohibited
transaction described in Section 406 of the ERISA or Section 4975 of the Code,
(B) incurred any liability to the PBGC which remains outstanding other than the
payment of premiums and there are no premium payments which are due and unpaid,
(C) failed to make a required contribution or payment to a Multiemployer Plan,
or (D) failed to make a required installment or other required payment under
Section 412 of the Code;
(v) No Termination Event has occurred or is reasonably expected to
occur; and
(vi) No proceeding, claim, lawsuit and/or investigation is existing
or, to the best knowledge of the Borrower after due inquiry, threatened
concerning or involving any (A) employee welfare benefit plan (as defined in
Section 3(1) of ERISA) currently maintained or contributed to by the Borrower or
any ERISA Affiliate, (B) Pension Plan or (C) Multiemployer Plan except in each
case as could not reasonably be expected to have a Material Adverse Effect on
the Borrower and its Subsidiaries.
40
(j) Margin Stock. Neither the Borrower nor any Subsidiary thereof 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 Regulations G and U of the Board of Governors of
the Federal Reserve System). No part of the proceeds of any of the Loans or
Letters of Credit will be used for purchasing or carrying margin stock or for
any purpose which violates, or which would be inconsistent with, the provisions
of Regulation T, U or X of such Board of Governors.
(k) Government Regulation. Neither the Borrower nor any Subsidiary
thereof 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 Subsidiary thereof 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) Material Contracts. Schedule 7.1(l) sets forth a complete and
accurate list of all Material Contracts of the Borrower and its Consolidated
Subsidiaries in effect as of the Closing Date not listed on any other Schedule
hereto; other than as set forth in Schedule 7.1(l), each such Material Contract
is, and after giving effect to the consummation of the transactions contemplated
by the Loan Documents will be, in full force and effect in accordance with the
terms thereof. The Borrower has delivered to the Administrative Agent a true and
complete copy of each Material Contract required to be listed on Schedule
7.1(l).
(m) Employee Relations. Each of the Borrower and its Subsidiaries has a
stable work force in place as of the Closing Date and is not, except as set
forth on Schedule 7.1(m), party to any collective bargaining agreement nor has
any labor union been recognized as the representative of its employees. The
Borrower knows of no pending, threatened or contemplated strikes, work stoppage
or other collective labor disputes involving its employees or those of its
Subsidiaries.
(n) Financial Statements. The (i) audited Consolidated balance sheets of
the Borrower and its Consolidated Subsidiaries as of December 31, 1997 and the
related statements of income and retained earnings and cash flows for the Fiscal
Years then ended and (ii) unaudited Consolidated balance sheet of the Borrower
and its Consolidated Subsidiaries as of March 31, 1998 and related unaudited
interim statements of revenue and retained earnings, copies of which have been
furnished to the Administrative Agent and each Lender, fairly present the
assets, liabilities and financial position of the Borrower and its Consolidated
Subsidiaries as at such dates, and the results of the operations and changes of
financial position for the periods then ended subject however to the absence of
footnotes from the unaudited balance sheet and statements and the effect of
normal period-to-period adjustments. All such financial statements, including
the related schedules and notes thereto, have been prepared in accordance with
GAAP (except as noted). The Borrower and its Consolidated Subsidiaries have no
Debt (other than Debt permitted by Section 11.1(f)), obligation or other unusual
forward or long-term commitment which is not fairly reflected in the foregoing
financial statements or in the notes thereto.
41
(o) No Material Adverse Change. Since December 31, 1997, there has been
no material adverse change in the properties, business, operations, or financial
condition of the Borrower and its Subsidiaries and no event has occurred or
condition arisen that could reasonably be expected to have a Material Adverse
Effect.
(p) Solvency. As of the Closing Date and after giving effect to each
Extension of Credit made hereunder, the Borrower and each of its Consolidated
Subsidiaries will be Solvent.
(q) Titles to Properties. Each of the Borrower and its Subsidiaries has
such title to the real property owned or leased by it as is necessary or
desirable to the conduct of its business and valid and legal title to all of its
personal property and assets, including, but not limited to, those reflected on
the balance sheets of the Borrower and its Subsidiaries delivered pursuant to
Section 7.1(n), except those which have been disposed of by the Borrower or its
Subsidiaries subsequent to such date which dispositions have been in the
ordinary course of business or as otherwise expressly permitted hereunder.
(r) Liens. None of the properties and assets of the Borrower or any
Consolidated Subsidiary thereof is subject to any Lien, except Liens permitted
pursuant to Section 11.2. Except for filings pursuant to the Existing Facility,
no financing statement under the Uniform Commercial Code of any state which
names the Borrower or any Consolidated Subsidiary thereof or any of their
respective trade names or divisions as debtor and which has not been terminated,
has been filed in any state or other jurisdiction and neither the Borrower nor
any Subsidiary thereof has signed any such financing statement or any security
agreement authorizing any secured party thereunder to file any such financing
statement, except to perfect those Liens permitted by Section 11.2 hereof.
(s) Debt. Schedule 7.1(s) is a complete and correct listing of all Debt
of the Borrower and its Consolidated Subsidiaries as of the Closing Date in
excess of $300,000 (other than Debt permitted pursuant to Section 11.1(f)). The
Borrower and its Consolidated Subsidiaries have performed and are in compliance
in all material respects with all of the terms of such Debt and all instruments
and agreements relating thereto, and no default or event of default, or event or
condition which with notice or lapse of time or both would constitute such a
default or event of default on the part of the Borrower or its Consolidated
Subsidiaries exists with respect to any such Debt.
(t) Litigation. As of the Closing Date, except as set forth on Schedule
7.1(t), 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 the Borrower or any Subsidiary thereof or any of their respective
properties in any court or before any arbitrator of any kind or before or by any
Governmental Authority except for matters which could not reasonably be expected
to have a Material Adverse Effect on the Borrower and its Subsidiaries.
(u) 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 the Borrower or any Consolidated Subsidiary thereof under
any Material Contract or judgment, decree or order to which the Borrower or its
Consolidated Subsidiaries is a party or by which the Borrower or its
Consolidated Subsidiaries or any of their respective properties may be bound or
which would
42
require the Borrower or its Consolidated Subsidiaries to make any payment
thereunder prior to the scheduled maturity date therefor except for matters
which could not reasonably be expected to have a Material Adverse Effect on the
Borrower and its Subsidiaries.
(v) Public Filings. There have been no material misstatements or omissions
in any annual report on Form 10-K, quarterly report on Form 10-Q, current report
on Form 8-K, or any amendment to any of the foregoing filed by ▇▇▇▇▇▇ ▇▇▇▇▇▇
Energy with the SEC with respect to the Fiscal Year ended December 31, 1997 or
thereafter.
(x) Accuracy and Completeness of Other Information. To the Borrower's
knowledge, all written information, reports and other papers and data produced
by or on behalf of the Borrower or any Subsidiary thereof and furnished to the
Lenders in connection with this Agreement were, at the time the same were so
furnished, complete and correct in all respects to the extent necessary to give
the recipient a true and accurate knowledge of the subject matter thereof. No
document furnished or written statement made to the Administrative Agent or the
Lenders by the Borrower or any Subsidiary thereof in connection with the
negotiation, preparation or execution of this Agreement or any of the Loan
Documents contains or will contain, to the Borrower's knowledge, any untrue
statement of a fact material to the creditworthiness of the Borrower or its
Subsidiaries or omits or will omit to state a fact necessary in order to make
the statements contained therein not misleading. The Borrower is not aware of
any facts which it has not disclosed in writing to the Administrative Agent
having a Material Adverse Effect, or insofar as the Borrower can now foresee,
could reasonably be expected to have a Material Adverse Effect.
SECTION 7.2. Survival of Representations and Warranties, Etc. All
representations and warranties set forth in this Article VII and all
representations and warranties contained in any certificate, or any of the Loan
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 VIII
------------
FINANCIAL INFORMATION AND NOTICES
---------------------------------
Until all the Obligations have been paid and satisfied in full and the
Credit Facilities terminated, unless consent has been obtained in the manner set
forth in Section 14.11 hereof, the Borrower will furnish or cause to be
furnished to the Administrative Agent at the Administrative Agent's Office at
the address set forth in Section 14.1 hereof and to the Lenders at their
respective addresses as set forth on Schedule 1, or such other office as may be
designated by the Administrative Agent and Lenders from time to time:
43
SECTION 8.1. Financial Statements.
(a) Quarterly Financial Statements. As soon as practicable and in any
event within sixty (60) days after the end of each Fiscal Quarter, an unaudited
Consolidated and consolidating balance sheet of the Borrower 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, along with the corresponding figures for the preceding Fiscal Year and
prepared by the Borrower 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 the chief 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, subject to normal year end adjustments.
(b) Annual Financial Statements. As soon as practicable and in any event
within one-hundred twenty (120) days after the end of each Fiscal Year, an
audited Consolidated and consolidating balance sheet of the Borrower and its
Consolidated Subsidiaries as of the close of such Fiscal Year and audited
Consolidated and consolidating statements of income, retained earnings and cash
flows for the Fiscal Year then ended, including the notes thereto, along with
the corresponding figures for the preceding Fiscal Year and audited by an
independent certified public accounting firm acceptable to the Administrative
Agent (which acceptance shall not be unreasonably withheld) 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.
SECTION 8.2. Compliance Certificates. At each time financial statements are
delivered pursuant to Sections 8.1 (a) or (b), the Borrower shall deliver to the
Administrative Agent (a) an Officer's Compliance Certificate duly executed by
the chief executive officer or chief financial officer of the Borrower, and (b)
in the case of financial statements delivered pursuant to Section 8.1(b), a
certificate of the independent public accountants certifying such financial
statements stating that in making the examination necessary for the
certification of such financial statements, they obtained no knowledge of any
Default or Event of Default, or if such is not the case, specifying such Default
or Event of Default and its nature and period of existence.
SECTION 8.3. Other Reports.
(a) Promptly upon receipt thereof, copies of all reports, if any,
submitted to the Borrower or its Board of Directors or any Subsidiary by its
independent public accountants in connection with their auditing function,
including, without limitation, any management report and any management
responses thereto;
44
(b) Promptly upon its becoming available, each financial statement,
report, notice or proxy statement sent by the Borrower or any of its
Subsidiaries to shareholders or partners generally and each regular or periodic
report and any final, effective registration statement or prospectus or written
communication (other than transmittal letters) filed by the Borrower or any of
its Subsidiaries with or received by the Borrower or any of its Subsidiaries in
connection therewith from any securities exchange or the SEC or any successor
agency which could reasonably be expected to have a Material Adverse Effect; and
(c) Such other information regarding the operations, business affairs and
financial condition of the Borrower or any of its Subsidiaries as the
Administrative Agent or any Lender may reasonably request.
SECTION 8.4. Notice of Litigation and Other Matters. Prompt (but in no
event later than five (5) Business Days after an officer of the Borrower obtains
knowledge thereof) telephonic and written notice of:
(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 the Borrower or any Subsidiary
thereof or any of their respective properties, assets or businesses which in any
such case could reasonably be expected to have a Material Adverse Effect;
(b) any notice of any violation received by the Borrower or any Subsidiary
thereof from any Governmental Authority including, without limitation, any
notice of violation of Environmental Laws which in any such case could
reasonably be expected to have a Material Adverse Effect;
(c) any labor controversy that has resulted in, or threatens to result in,
a strike or other work action against the Borrower or any Subsidiary thereof
which in any such case could reasonably be expected to have a Material Adverse
Effect;
(d) any attachment, judgment, lien, levy or order that may be assessed
against or threatened against the Borrower or any Subsidiary thereof which could
reasonably be expected to have a Material Adverse Effect;
(e) any Default or Event of Default, or any event which constitutes or
which with the passage of time or giving of notice or both would constitute a
default or event of default under any Material Contract to which the Borrower or
any of its Consolidated Subsidiaries is a party or by which the Borrower or any
Consolidated Subsidiary thereof or any of their respective properties may be
bound;
(f) (i) any unfavorable determination letter from the Internal Revenue
Service regarding the qualification of an Employee Benefit Plan under Section
401(a) of the Code (along with a copy thereof), (ii) all notices received by the
Borrower or any ERISA Affiliate of the PBGC's intent to terminate any Pension
Plan or to have a trustee appointed to administer any Pension Plan, (iii) all
notices received by the Borrower or any ERISA Affiliate from a Multiemployer
Plan sponsor concerning the imposition or amount of withdrawal liability
pursuant to Section 4202 of ERISA and
45
(iv) the Borrower obtaining knowledge or reason to know that the Borrower or any
ERISA Affiliate has filed or intends to file a notice of intent to terminate any
Pension Plan under a distress termination within the meaning of Section 4041(c)
of ERISA; and
(g) any event which makes any of the representations set forth in Section
7.1 inaccurate in any respect.
SECTION 8.5. Accuracy of Information. All written information, reports,
statements and other papers and data furnished by or on behalf of the Borrower
to the Administrative Agent or any Lender (other than financial forecasts)
whether pursuant to this Article VIII or any other provision of this Agreement,
or any of the Security Agreement, 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.
ARTICLE IX
----------
AFFIRMATIVE COVENANTS
---------------------
Until all of the Obligations have been paid and satisfied in full and the
Credit Facilities terminated, unless consent has been obtained in the manner
provided for in Section 14.11, the Borrower hereby covenants to the
Administrative Agent and Lenders that:
SECTION 9.1. Preservation of Corporate Existence and Related Matters.
Except as permitted by Section 11.4, the Borrower will and will cause its
Consolidated Subsidiaries to preserve and maintain its separate corporate
existence and all rights, franchises, licenses and privileges necessary to the
conduct of its business, and qualify and remain qualified as a foreign
corporation and authorized to do business in each jurisdiction in which the
failure to so qualify would have a Material Adverse Effect.
SECTION 9.2. Maintenance of Property. The Borrower will and will cause its
Subsidiaries to protect and preserve all properties useful in and material to
its business, including copyrights, patents, trade names and trademarks;
maintain in good working order and condition (ordinary wear and tear excepted)
all buildings, equipment and other tangible real and personal property material
to its operations; and from time to time make or cause to be made all renewals,
replacements and additions to such property necessary for the conduct of its
business as then contemplated, so that the business carried on in connection
therewith may be properly and advantageously conducted at all times.
SECTION 9.3. Insurance. The Borrower will and will cause its Subsidiaries
to maintain insurance with financially sound and reputable insurance companies
against such risks and in such amounts as are customarily maintained by similar
businesses and as may be required by Applicable Law and the Security Agreement,
and on the Closing Date and from time to time thereafter deliver to the
Administrative Agent upon its request a detailed list of the insurance then in
effect, stating the names of the insurance companies, the amounts and rates of
the insurance, the dates of the expiration thereof and the properties and risks
covered thereby.
46
SECTION 9.4. Accounting Methods and Financial Records. The Borrower will
and will cause its Subsidiaries to maintain a system of accounting, and keep
such books, records and accounts (which shall be true and complete in all
material respects) as may be required or as may be necessary to permit the
preparation of financial statements in accordance with GAAP and in compliance
with the regulations of any Governmental Authority having jurisdiction over it
or any of its properties.
SECTION 9.5. Payment and Performance of Obligations. The Borrower will and
will cause its Subsidiaries to pay and perform all Obligations under this
Agreement and the other Loan Documents, and, except for matters that could not
reasonably be expected to have a Material Adverse Effect, pay or perform (a) all
taxes, assessments and other governmental charges that may be levied or assessed
upon it or any of its property, and (b) all other indebtedness, obligations and
liabilities in accordance with customary trade practices; provided, that the
Borrower or such Subsidiary may contest any item described in this Section 9.5
in good faith so long as adequate reserves are maintained with respect thereto
in accordance with GAAP.
SECTION 9.6. Compliance With Laws and Approvals. The Borrower will and will
cause its Subsidiaries to observe and remain in compliance with all Applicable
Laws and maintain in full force and effect all Governmental Approvals, in each
case applicable to the conduct of its business except where the failure to do so
could not reasonably be expected to have a Material Adverse Effect..
SECTION 9.7. Environmental Laws. In addition to and without limiting the
generality of Section 9.6 and except for matters that could not reasonably be
expected to have a Material Adverse Effect, the Borrower will and will cause its
Subsidiaries to (a) comply with, and ensure such compliance by all tenants and
subtenants, if any, with, all applicable Environmental Laws and obtain and
comply with and maintain, and ensure that all tenants and subtenants obtain and
comply with and maintain, any and all licenses, approvals, notifications,
registrations or permits required by applicable Environmental Laws and (b)
conduct and complete all investigations, studies, sampling and testing, and all
remedial, removal and other actions required under Environmental Laws, and
promptly comply with all lawful orders and directives of any Governmental
Authority regarding Environmental Laws.
SECTION 9.8. Compliance with ERISA. In addition to and without limiting the
generality of Section 9.6 and except for matters that could not reasonably be
expected to have a Material Adverse Effect, the Borrower will and will cause its
Subsidiaries to (a) comply with all applicable provisions of ERISA and the
regulations and published interpretations thereunder with respect to all
Employee Benefit Plans, (b) not take any action or fail to take action the
result of which could be a liability to the PBGC or to a Multiemployer Plan, (c)
not participate in any prohibited transaction that could result in any civil
penalty under ERISA or tax under the Code, (d) operate each Employee Benefit
Plan in such a manner that will not incur any tax liability under Section 4980B
of the Code or any liability to any qualified beneficiary as defined in Section
4980B of the Code and (e) furnish to the Administrative Agent upon the
Administrative Agent's request such additional information about any Employee
Benefit Plan as may be reasonably requested by the Administrative Agent.
47
SECTION 9.9. Compliance With Agreements. Except where the failure to comply
could not reasonably be expected to have a Material Adverse Effect, the Borrower
will and will cause its Subsidiaries to comply in all respects with each term,
condition and provision of all leases, agreements and other instruments entered
into in the conduct of its business including, without limitation, any Material
Contract; provided, that the Borrower or such Subsidiary may contest any such
lease, agreement or other instrument in good faith through applicable
proceedings so long as adequate reserves are maintained in accordance with GAAP.
SECTION 9.10. Conduct of Business. The Borrower will and will cause its
Consolidated Subsidiaries to engage only in businesses in substantially the same
fields as the businesses conducted on the Closing Date and in lines of business
reasonably related thereto and in lines of business in which ▇▇▇▇▇▇ ▇▇▇▇▇▇
Energy and the KMEP Operating Subsidiaries are engaged. The Borrower will cause
▇▇▇▇▇▇ ▇▇▇▇▇▇ Energy and the KMEP Operating Subsidiaries to engage only in
activities of the type and in such amounts as will allow ▇▇▇▇▇▇ ▇▇▇▇▇▇ Energy to
continue to qualify for an exception from treatment of a publicly traded
partnership as a corporation under Section 7704 of the Code.
SECTION 9.11. Visits and Inspections. Permit representatives of the
Administrative Agent or any Lender, from time to time upon notice and during
normal business hours to visit and inspect its properties (such visits and
inspections to occur not more frequently than once per Fiscal Quarter and in a
manner to avoid any disruption of its business activities so long as no Default
or Event of Default has occurred or is continuing); inspect, audit and make
extracts from its books, records and files, including, but not limited to,
management letters prepared by independent accountants; and discuss with its
principal officers, and its independent accountants, its business, assets,
liabilities, financial condition, results of operations and business prospects.
SECTION 9.12. Additional Collateral.
(a) Upon the acquisition by the Borrower of any property (real or
personal) or assets, or the formation or acquisition of any new Consolidated
Subsidiary, cause to be executed and delivered to the Administrative Agent, a
Security Agreement in form and substance satisfactory to the Administrative
Agent duly executed by the Borrower in favor of the Administrative Agent for the
ratable benefit of itself and the Lenders in order to secure the Obligations and
such other documents requested by the Administrative Agent to confirm all assets
of the Borrower constitute Collateral.
(b) Upon the delivery of any additional Security Agreements and Collateral
pursuant to this Section 9.12, deliver to the Administrative Agent favorable
legal opinions addressed to the Administrative Agent and Lenders in form and
substance satisfactory thereto with respect to such Security Agreement and
additional Collateral and such other documents and closing certificates as may
be reasonably requested by the Administrative Agent or Required Lenders
consistent with the terms of Article VI.
SECTION 9.13. Kinder ▇▇▇▇▇▇ ▇. ▇. Security Agreement. If the Leverage Ratio
pursuant to Section 10.1 of this Agreement as of March 31, 1999 is greater than
2.5 to 1.0 as evidenced by the financial statements delivered to the Lenders
pursuant to Section 8.1(a), then, at
48
the Administrative Agent's request, the Borrower shall cause Kinder ▇▇▇▇▇▇ ▇.▇.
to execute and deliver to the Administrative Agent no later than ten (10) days
following the date such financial statements are delivered (or in any event
within five (5) days following the date such statements are required to be
delivered), a Security Agreement in form and substance satisfactory to the
Administrative Agent granting to the Administrative Agent, for benefit of itself
and the Lenders, a security interest in the L.P. Units owned by Kinder ▇▇▇▇▇▇ ▇.
▇.
SECTION 9.14. Further Assurances. Make, execute and deliver all such
additional and further acts, things, deeds and instruments as the Administrative
Agent or any Lender may reasonably require to document and consummate the
transactions contemplated hereby and to vest completely in and insure the
Administrative Agent and the Lenders their respective rights under this
Agreement, the Notes, the Letters of Credit and the other Loan Documents.
ARTICLE X
---------
FINANCIAL COVENANTS
-------------------
Until all of the Obligations have been paid and satisfied in full and the
Credit Facilities terminated, unless consent has been obtained in the manner set
forth in Section 14.11 hereof, the Borrower will not:
SECTION 10.1. Leverage Ratio. As of the end of any Fiscal Quarter during
any period set forth below, permit the ratio of (a) Debt of the Borrower and its
Consolidated Subsidiaries as of such Fiscal Quarter end to (b) KMI Cash Flow for
the period of four (4) consecutive Fiscal Quarters ending on such Fiscal Quarter
end, to exceed the corresponding ratio set forth below:
Period Ratio
------ -----
July 1, 1998 - June 30, 1999 3.50 to 1.00
July 1, 1999 and thereafter 3.00 to 1.00
SECTION 10.2. Combined Leverage Ratio. As of the end of any Fiscal Quarter
during any period set forth below, permit the ratio of (a) Combined Debt as of
such Fiscal Quarter End to (b) KMEP Cash Flow for the period of four (4)
consecutive Fiscal Quarters ending on such Fiscal Quarter end, to exceed the
corresponding ratio set forth below:
Period Ratio
------ -----
July 1, 1998 - June 30, 1999 4.50 to 1.00
July 1, 1999 and thereafter 4.35 to 1.00
SECTION 10.3 Interest Coverage Ratio. As of the end of any Fiscal Quarter
during any period set forth below, permit the ratio of (a) KMI Cash Flow for the
period of four (4) consecutive Fiscal Quarters ending on such Fiscal Quarter end
to (b) Interest Expense of the
49
Borrower and its Consolidated Subsidiaries for such four (4) Fiscal Quarter
period, to be less than the corresponding ratio set forth below:
Period Ratio
------ -----
July 1, 1998 - June 30, 1999 2.50 to 1.00
July 1, 1999 and thereafter 3.00 to 1.00
SECTION 10.4 Combined Interest Coverage Ratio. As of the end of any Fiscal
Quarter during any period set forth below, permit the ratio of (a) KMEP Cash
Flow for the period of four (4) consecutive Fiscal Quarters ending on such
Fiscal Quarter end to (b) Combined Interest Expense for such four (4) Fiscal
Quarter period, to be less than the corresponding ratio set forth below:
Period Ratio
------ -----
July 1, 1998 - June 30, 1999 2.50 to 1.00
July 1, 1999 and thereafter 3.00 to 1.00
For the purposes of calculating KMI Cash Flow and KMEP Cash Flow in
Sections 10.1 through and including 10.4 with respect to (i) the Fiscal Quarter
ending September 30, 1998, such KMI Cash Flow and KMEP Cash Flow shall equal
such KMI Cash Flow and KMEP Cash Flow for such Fiscal Quarter times four (4),
(ii) the Fiscal Quarter ending December 31, 1998, such KMI Cash Flow and KMEP
Cash Flow shall equal such KMI Cash Flow and KMEP Cash Flow for the period of
two (2) consecutive Fiscal Quarters ending on such Fiscal Quarter end times two
(2) and (iii) for the Fiscal Quarter ending March 31, 1999, such KMI Cash Flow
and KMEP Cash Flow shall equal such KMI Cash Flow and KMEP Cash Flow for the
period of three (3) consecutive Fiscal Quarters ending on such Fiscal Quarter
end times four-thirds (4/3).
ARTICLE XI
----------
NEGATIVE COVENANTS
------------------
Until all of the Obligations have been paid and satisfied in full and the
Credit Facilities terminated, unless consent has been obtained in the manner set
forth in Section 14.11 hereof, the Borrower covenants and agrees that:
SECTION 11.1. Limitations on Debt. The Borrower will not and will not
permit any of its Consolidated Subsidiaries to create, incur, assume or suffer
to exist any Debt except:
(a) the Obligations;
(b) Debt of the Borrower incurred in connection with any Hedging Agreement
with a counterparty and upon terms and conditions reasonably satisfactory to the
Administrative Agent;
50
(c) Debt of the Borrower and any of its Consolidated Subsidiaries existing
on the Closing Date and not otherwise permitted under this Section 11.1, as set
forth on Schedule 7.1(s) and the renewal and refinancing (but not the increase)
thereof;
(d) Debt incurred in connection with Capitalized Leases in an aggregate
amount not to exceed in the case of the Borrower, $50,000, and in the case of
its Consolidated Subsidiaries $600,000, on any date of determination;
(e) purchase money Debt of the Borrower and its Consolidated Subsidiaries
in an aggregate amount not to exceed in the case of the Borrower, $50,000, and
in the case of its Consolidated Subsidiaries $600,000, on any date of
determination;
(f) Debt of Kinder ▇▇▇▇▇▇ ▇.▇. arising by operation of law solely as a
result of Kinder ▇▇▇▇▇▇ ▇.▇. being the general partner of ▇▇▇▇▇▇ ▇▇▇▇▇▇ Energy
and any of the KMEP Operating Subsidiaries or any other partnership of which it
is a partner;
(g) other Debt not to exceed in the case of the Borrower, $50,000, and in
the case of its Consolidated Subsidiaries $600,000, in the aggregate at any
time; and
(h) Debt permitted under Section 11.3.
provided, that none of the Debt permitted to be incurred by this Section shall
restrict, limit or otherwise encumber (by covenant or otherwise) the ability of
any Subsidiary of the Borrower to make any payment to the Borrower or any of its
Subsidiaries (in the form of dividends, intercompany advances or otherwise) for
the purpose of enabling the Borrower to pay the Obligations.
SECTION 11.2. Limitations on Liens. The Borrower will not and will not
permit its Consolidated Subsidiaries to create, incur, assume or suffer to
exist, any Lien on or with respect to any of its assets or properties (including
without limitation shares of Capital Stock, L.P. Units or other ownership
interests), real or personal, whether now owned or hereafter acquired, except:
(a) Liens for taxes, assessments and other governmental charges or levies
not yet due or as to which the period of grace, if any, related thereto has not
expired or which are being contested in good faith and by appropriate
proceedings if adequate reserves are maintained to the extent required by GAAP;
(b) the claims of materialmen, mechanics, carriers, warehousemen,
processors or landlords for labor, materials, supplies or rentals incurred in
the ordinary course of business, (i) which are not overdue for a period of more
than thirty (30) days or (ii) which are being contested in good faith and by
appropriate proceedings;
(c) Liens consisting of deposits or pledges made in the ordinary course of
business in connection with, or to secure payment of, obligations under workers'
compensation, unemployment insurance or similar legislation or obligations under
customer service contracts;
51
(d) Liens constituting encumbrances in the nature of zoning restrictions,
easements and rights or restrictions of record on the use of real property,
which in the aggregate are not substantial in amount and which do not, in any
case, detract from the value of such property or impair the use thereof in the
ordinary conduct of business;
(e) Liens in favor of the Administrative Agent for the ratable benefit of
the Administrative Agent and the Lenders;
(f) Liens not otherwise permitted by this Section 11.2 and in existence on
the Closing Date and described on Schedule 11.2; and the replacement or
extension thereof to the extent the related Debt is permitted pursuant to
Section 11.1(c);
(g) Judgment Liens which do not create an Event of Default under Sections
12.1(m) or (o); and
(h) Liens securing Debt permitted under Section 11.1(d), (e) and (g);
provided that (i) such Liens shall be created substantially simultaneously with
the acquisition of the related asset, (ii) such Liens do not at any time
encumber any property other than the property financed by such Debt, (iii) the
amount of Debt secured thereby is not increased and (iv) the principal amount of
Debt secured by any such Lien shall at no time exceed one hundred percent (100%)
of the original purchase price of such property at the time it was acquired.
SECTION 11.3. Limitations on Loans, Advances, Investments and Acquisitions.
The Borrower will not and will not permit any of its Consolidated Subsidiaries
to purchase, own, invest in or otherwise acquire, directly or indirectly, any
Capital Stock, interests in any partnership or joint venture (including without
limitation the creation or capitalization of any Subsidiary), evidence of Debt
or other obligation or security, substantially all or a portion of the business
or assets of any other Person or any other investment or interest whatsoever in
any other Person, or make or permit to exist, directly or indirectly, any loans,
advances or extensions of credit to, or any investment in cash or by delivery of
property in, any Person, or enter into, directly or indirectly, any commitment
or option in respect of the foregoing except:
(a) investments in Subsidiaries existing on the Closing Date, intercompany
loans and advances between the Borrower and its Consolidated Subsidiaries and
the other existing loans, advances and investments described on Schedule 11.3;
(b) investments in (i) marketable direct obligations issued or
unconditionally guaranteed by the United States of America or any agency thereof
maturing within one (1) year from the date of acquisition thereof, (ii)
commercial paper maturing no more than one (1) year from the date of creation
thereof and currently having one of the two highest ratings obtainable from
either Standard & Poor's Rating's Group, a Division of ▇▇▇▇▇▇-▇▇▇▇ Corporation
or ▇▇▇▇▇'▇ Investors Service, Inc., (iii) certificates of deposit maturing no
more than one (1) year from the date of creation thereof issued by commercial
banks incorporated under the laws of the United States of America, each having
combined capital, surplus and undivided profits of not less than $500,000,000
and having a rating of "A" or better by a nationally recognized rating agency
(collectively, "Cash
52
Equivalents"); provided, that the aggregate amount invested in such certificates
of deposit shall not at any time exceed $5,000,000 for any one such certificate
of deposit and $10,000,000 for any one such bank, or (iv) time deposits maturing
no more than 30 days from the date of creation thereof with commercial banks or
savings banks or savings and loan associations each having membership either in
the FDIC or the deposits of which are insured by the FDIC and in amounts not
exceeding the maximum amounts of insurance thereunder;
(c) investments by the Borrower or any Consolidated Subsidiary in the form
of acquisitions of all or substantially all of the business or a line of
business (whether by the acquisition of Capital Stock, assets or any combination
thereof) of any other Person if such acquisition has been previously approved in
writing by the Required Lenders;
(d) investments by the Borrower or any Consolidated Subsidiary in the form
of capital contributions as required by the partnership agreements of ▇▇▇▇▇▇
▇▇▇▇▇▇ Energy, the KMEP Operating Subsidiaries and any other partnership of
which the Borrower or any of its Consolidated Subsidiaries is or becomes a
partner; provided, that (i) the direct ownership interest of the Borrower or any
such Consolidated Subsidiary in each such partnership is not greater than 2.0%
and (ii) the Borrower shall demonstrate to the satisfaction of the
Administrative Agent pro forma compliance with the financial covenants contained
in Article X after giving pro forma effect to such investment; and
(e) investments by the Borrower or any Consolidated Subsidiary in respect
of the creation of any additional Subsidiaries except for Subsidiaries with the
following characteristics: (i) the Subsidiaries are Subsidiaries of ▇▇▇▇▇▇
▇▇▇▇▇▇ Energy, (ii) the Borrower is not a partner or member of such Subsidiary,
and (iii) if Kinder ▇▇▇▇▇▇ ▇.▇. is a partner or member of such Subsidiary its
direct ownership interest is not greater than 2.0%.
SECTION 11.4. Limitations on Mergers and Liquidation. The Borrower will not
and will not permit any of its Consolidated Subsidiaries to merge, consolidate
or enter into any similar combination with any other Person or liquidate,
wind-up or dissolve itself (or suffer any liquidation or dissolution) except:
(a) any Wholly-Owned Subsidiary of the Borrower may merge with or be wound
up into the Borrower or any other Wholly-Owned Subsidiary of the Borrower (as
long as the Borrower is the survivor of any such transaction involving the
Borrower); and
(b) any Wholly-Owned Subsidiary may merge into the Person such
Wholly-Owned Subsidiary was formed to acquire in connection with an acquisition
permitted by Section 11.3(c).
SECTION 11.5. Limitations on Sale of Assets. The Borrower will not and will
not permit its Consolidated Subsidiaries to convey, sell, lease, assign,
transfer or otherwise dispose of any of its property, business or assets
(including, without limitation, the sale of any receivables and leasehold
interests and any sale-leaseback or similar transaction), whether now owned or
hereafter acquired except:
(a) the sale of Inventory in the ordinary course of business;
53
(b) the sale of obsolete assets no longer used or usable in the business
of the Borrower or any of its Consolidated Subsidiaries;
(c) the transfer of assets to the Borrower or any Wholly-Owned Subsidiary
of the Borrower pursuant to Section 11.4(a);
(d) the sale or discount without recourse of accounts receivable arising
in the ordinary course of business in connection with the compromise or
collection thereof;
(e) the sale or disposition of assets by the Borrower or any of its
Consolidated Subsidiaries in the ordinary course of business in an aggregate
amount not to exceed $500,000 at any time during the term of this Agreement;
(f) any other sale or disposition of assets by the Borrower or it
Consolidated Subsidiaries in the ordinary course of business, as long as the Net
Cash Proceeds are applied as set forth in Section 5.4(d); and
(g) the sale or disposition of assets as permitted by Section 11.6.
SECTION 11.6. Limitations on Dividends and Distributions. The Borrower will
not and will not permit any of its Consolidated Subsidiaries to declare or pay
any dividends upon any of its Capital Stock; purchase, redeem, retire or
otherwise acquire, directly or indirectly, any shares of its Capital Stock, or
make any distribution of cash, property or assets among the holders of shares of
its Capital Stock, or make any change in its capital structure that could
reasonably be expected to have a Material Adverse Effect; provided that:
(a) the Borrower may pay the KMI Dividend;
(b) the Borrower or any Consolidated Subsidiary may pay dividends in
shares of its own Capital Stock;
(c) any Consolidated Subsidiary may pay cash dividends to the Borrower;
and
(d) the Borrower may from time to time pay cash dividends to its
shareholders or redeem shares of its Capital Stock in an amount equal to any
remaining Excess Cash Flow after all mandatory prepayments of Excess Cash Flow
then due have been made pursuant to Section 5.4(f) and Section 5.4(g)(ii).
SECTION 11.7. Limitations on Exchange and Issuance of Capital Stock. The
Borrower will not and will not permit any of its Consolidated Subsidiaries
hereafter to (a) issue, sell or otherwise dispose of any class or series of
Capital Stock that, by its terms or by the terms of any security into which it
is convertible or exchangeable, is, or upon the happening of an event or passage
of time would be, (i) convertible or exchangeable into Debt or (ii) required to
be redeemed or repurchased, including at the option of the holder, in whole or
in part, or has, or upon the happening of an event or passage of time would
have, a redemption or similar payment due or (b)
54
issue any Capital Stock of a Subsidiary (excluding ▇▇▇▇▇▇ ▇▇▇▇▇▇ Energy and its
Subsidiaries) except to the Borrower and Kinder ▇▇▇▇▇▇ ▇.▇.
SECTION 11.8. Transactions with Affiliates. Except as provided on Schedule
11.8, the Borrower will not and will not permit any Consolidated Subsidiary
thereof to directly or indirectly: (a) make any loan or advance to, or purchase
or assume any note or other obligation to or from, any of its officers,
directors, shareholders or other Affiliates, or to or from any member of the
immediate family of any of its officers, directors, shareholders or other
Affiliates, or subcontract any operations to any of its Affiliates, or (b) enter
into, or be a party to, any transaction with any of its Affiliates, except
pursuant to the reasonable requirements of its business and upon fair and
reasonable terms that are no less favorable to it than it would obtain in a
comparable arm's length transaction with a Person not its Affiliate.
SECTION 11.9. Certain Accounting Changes. The Borrower will not and will
not permit any of its Consolidated Subsidiaries to change its Fiscal Year end,
or make any change in its accounting treatment and reporting practices except as
required by GAAP.
SECTION 11.10. Material Amendments. The Borrower will not and will not
permit any of its Consolidated Subsidiaries to amend or modify its articles of
incorporation, by-laws, corporate structure, capitalization, partnership
agreements or any other agreement relating to its partnership interests in any
way that could reasonably be expected to have a Material Adverse Effect.
SECTION 11.11. Operating Leases. The Borrower will not and will not permit
any of its Consolidated Subsidiaries to enter into lease agreements (whether for
real or personal property), other than Capital Leases, under which the aggregate
amount of all lease payments pursuant to such lease agreements exceed $50,000 in
the case of the Borrower and $600,000 in the case of its Consolidated
Subsidiaries in any period of twelve (12) consecutive calendar months.
SECTION 11.12. Restrictive Agreements. The Borrower will not and will not
permit any of its Consolidated Subsidiaries to enter into any Debt which
contains any negative pledge on the assets of the Borrower or any of its
Consolidated Subsidiaries or any covenants materially more restrictive than the
provisions of Articles IX, X and XI hereof, or which restricts, limits or
otherwise encumbers its ability to incur Liens on or with respect to any of its
assets or properties other than the assets or properties securing such Debt.
ARTICLE XII
-----------
DEFAULT AND REMEDIES
--------------------
SECTION 12.1. 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:
55
(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 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 the Borrower or any of its Consolidated Subsidiaries under this
Agreement, any Loan Document or any amendment hereto or thereto, shall at any
time 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 8.4(e) or Articles X or XI of this Agreement.
(e) Default in Performance of Other Covenants and Conditions. The Borrower
or any of its Consolidated Subsidiaries 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
12.1) or any other Loan Document and such default shall continue for a period of
thirty (30) days after written notice thereof has been given to the Borrower by
the Administrative Agent.
(f) Hedging Agreement. Any termination payment shall be due by the
Borrower under any Hedging Agreement and such amount is not paid within Five (5)
Business Days of the due date thereof.
(g) Debt Cross-Default. The Borrower or any of its Consolidated
Subsidiaries shall (i) default in the payment of any Debt (other than the Notes
or any Reimbursement Obligation) the aggregate outstanding amount of which Debt
is in excess of $300,000 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 of any other agreement or condition relating to
any Debt (other than the Notes or any Reimbursement Obligation) the aggregate
outstanding amount of which Debt is in excess of $300,000 or contained in any
instrument or agreement 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
(any applicable grace period having expired).
(h) Change in Control. Any person or group of persons (within the meaning
of Section 13(d) of the Securities Exchange Act of 1934, as amended), other than
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ (directly or indirectly) shall obtain
ownership or control in one or more series of transactions of more than fifty
percent (50%) of the common stock or fifty
56
percent (50%) of the voting power of the Borrower entitled to vote in the
election of the board of directors of the Borrower (any such event, a "Change of
Control").
(i) Voluntary Bankruptcy Proceeding. 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.
(j) Involuntary Bankruptcy Proceeding. A case or other proceeding shall
be commenced against 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 the Borrower or for all
or any substantial part of its 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.
(k) Failure of Agreements. Any provision of this Agreement or of any
other Loan Document shall for any reason cease to be valid and binding in all
material respects on the Borrower or Subsidiary party thereto or any such Person
shall so state in writing, or this Agreement or any other Loan Document shall
for any reason cease to create a valid and perfected first priority Lien on, or
security interest in, any of the collateral purported to be covered thereby, in
each case other than in accordance with the express terms hereof or thereof.
(l) Termination Event. The occurrence of any of the following events: (i)
the Borrower or any ERISA Affiliate fails to make full payment when due of all
amounts which, under the provisions of any Pension Plan or Section 412 of the
Code, the Borrower or any ERISA Affiliate is required to pay as contributions
thereto, (ii) an accumulated funding deficiency in excess of $5,000,000 occurs
or exists, whether or not waived, with respect to any Pension Plan, (iii) a
Termination Event or (iv) the Borrower or any ERISA Affiliate as employers under
one or more Multiemployer Plan makes a complete or partial withdrawal from any
such Multiemployer Plan and the plan sponsor of such Multiemployer Plans
notifies such withdrawing employer that such employer has incurred a withdrawal
liability requiring payments in an amount exceeding $5,000,000.
(m) Judgment. A judgment or order for the payment of money which causes
the aggregate amount of all such judgments to exceed $5,000,000 in any Fiscal
Year shall be entered
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against the Borrower or any of its Consolidated Subsidiaries by any court and
such judgment or order shall continue undischarged, unstayed or unbonded for a
period of thirty (30) days.
(o) Kinder ▇▇▇▇▇▇ ▇.▇., etc. Kinder ▇▇▇▇▇▇ ▇.▇. or any other Consolidated
Subsidiary takes, suffers or permits to exist any of the events or conditions
referred to in paragraphs (i), (j) or (m).
(p) ▇▇▇▇▇▇ ▇▇▇▇▇▇ Energy, etc. ▇▇▇▇▇▇ ▇▇▇▇▇▇ Energy, the KMEP Operating
Subsidiaries or any of their respective Subsidiaries takes, suffers or permits
to exist any of the events or conditions referred to in paragraphs (i) or (j)
hereof which would result in a Material Adverse Effect for ▇▇▇▇▇▇ ▇▇▇▇▇▇ Energy
and its Subsidiaries taken as a whole.
(q) ▇▇▇▇▇▇ ▇▇▇▇▇▇ Energy, etc. Debt ▇▇▇▇▇-▇▇▇▇▇▇▇.▇▇▇▇▇▇ Morgan Energy or
any of its Subsidiaries shall default in the payment when due of any principal
of or interest on any of its Debt, the aggregate amount of which equals or
exceeds $5,000,000.
SECTION 12.2. Remedies. Upon the occurrence and continuance 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 Loan 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, 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 Loan Documents to the
contrary notwithstanding, and terminate the Credit Facilities; provided, that
upon the occurrence of an Event of Default specified in Section 12.1(i) or (j),
the Credit Facilities shall be automatically terminated and all Obligations
shall automatically become due and payable.
(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 the preceding paragraph, require the Borrower at such
time to deposit in a cash collateral account opened by the Administrative Agent
an amount in cash 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.
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(c) Rights of Collection. Exercise on behalf of the Lenders all of its
other rights and remedies under this Agreement, the other Loan Documents and
Applicable Law, in order to satisfy all of the Borrower's Obligations.
SECTION 12.3. 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 Loan 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 Loan Documents or to
constitute a waiver of any Event of Default.
ARTICLE XIII
------------
THE ADMINISTRATIVE AGENT
------------------------
SECTION 13.1. Appointment. Each of the Lenders hereby irrevocably
designates and appoints First Union as Administrative Agent of such Lender under
this Agreement and the other Loan Documents 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 Loan
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 Loan Documents, together with such other powers as are reasonably
incidental thereto. Notwithstanding any provision to the contrary elsewhere in
this Agreement or such other Loan 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 Loan Documents or otherwise exist
against the Administrative Agent.
SECTION 13.2. Delegation of Duties. The Administrative Agent may execute
any of its respective duties under this Agreement and the other Loan 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 13.3. 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 Loan Documents (except for actions occasioned solely by
its or such
59
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 the Borrower or any of its Subsidiaries or any officer
thereof contained in this Agreement or the other Loan 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 Loan Documents or for the value, validity, effectiveness,
genuineness, enforceability or sufficiency of this Agreement or the other Loan
Documents or for any failure of the Borrower or any of its Subsidiaries 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.
SECTION 13.4. Reliance by the Administrative Agent. The Administrative
Agent shall be entitled to rely, 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 14.10 hereof. The Administrative Agent
shall be fully justified in failing or refusing to take any action under this
Agreement and the other Loan Documents unless it shall first receive such advice
or concurrence of the Required Lenders (or, when expressly required hereby or by
the relevant other Loan 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 13.5. 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 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; 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.
SECTION 13.6. 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
60
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 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
Loan 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 Loan 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 13.7. Indemnification. The Lenders agree to indemnify the
Administrative Agent in its capacity as such and (to the extent not reimbursed
by the Borrower and without limiting the obligation of the Borrower to do so),
ratably according to their respective Extensions of Credit, 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 Loan 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 13.7 shall survive the
payment of the Notes, any Reimbursement Obligation and all other amounts payable
hereunder and the termination of this Agreement.
SECTION 13.8. 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 as though the Administrative Agent were not an Administrative Agent
hereunder. With respect to any Extensions of Credit made or renewed by it and
any Note issued to it, the Administrative Agent shall have the same rights and
powers under this Agreement and the other Loan 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.
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SECTION 13.9. 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 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 13.9 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.
ARTICLE XIV
-----------
MISCELLANEOUS
-------------
SECTION 14.1. 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: ▇▇▇▇▇▇ ▇▇▇▇▇▇, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Telephone No.(▇▇▇) ▇▇▇-▇▇▇▇
Telecopy No.:(▇▇▇) ▇▇▇-▇▇▇▇
62
If to First Union as First Union National Bank
Administrative Agent: ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇-▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Syndication Agency Services
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
If to any Lender: To the Address set forth on
Schedule 1 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 Lenders, as the Administrative Agent's Office referred to herein,
to which payments due are to be made and at which Extensions of Credit will be
disbursed.
SECTION 14.2. Expenses; Indemnity. The Borrower will (a) pay all reasonable
out-of-pocket expenses of the Administrative Agent in connection with: (i) the
preparation, execution and delivery of this Agreement and each other Loan
Document, whenever the same shall be executed and delivered, including without
limitation all reasonable out-of-pocket syndication and due diligence expenses
and reasonable fees and disbursements of counsel for the Administrative Agent,
(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 Loan Document, including without limitation reasonable fees and
disbursements of counsel for the Administrative Agent and (iii) 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 Loan Document or any factual matters in
connection therewith, which expenses shall include without limitation the
reasonable fees and disbursements of such Persons, and (b) 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, including without
limitation, claims by a third Person with respect to the provision of the
financing contemplated hereby (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 connected with the Agreement, any other Loan 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
or arises solely in connection with any claim or dispute among the Lenders
regarding their respective rights, duties or performance hereunder so long as
such claim or dispute does not involve any action or inaction on the part of the
Borrower or any of its Subsidiaries.
63
SECTION 14.3. 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 14.10 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 Loan Documents or (b) the Administrative Agent shall have declared any
or all of the Obligations to be due and payable as permitted by Section 12.2 and
although such Obligations shall be contingent or unmatured.
SECTION 14.4. Governing Law. This Agreement, the Notes and the other Loan
Documents, unless otherwise expressly set forth therein, shall be governed by,
construed and enforced in accordance with the laws of the State of North
Carolina, without reference to the conflicts or choice of law principles
thereof.
SECTION 14.5. Consent to Jurisdiction. The Borrower hereby irrevocably
consents to the personal jurisdiction of the state and federal courts located in
Mecklenburg County, North Carolina, in any action, claim or other proceeding
arising out of any dispute in connection with this Agreement, the Notes and the
other Loan Documents, any rights or obligations hereunder or thereunder, or the
performance of such rights and obligations. 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 Loan 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 14.1. Nothing in this Section 14.5 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.
SECTION 14.6. Binding Arbitration; Waiver of Jury Trial.
(a) Binding Arbitration. Upon demand of any party, whether made before or
after institution of any judicial proceeding, any dispute, claim or controversy
arising out of, connected with or relating to the Notes or any other Loan
Document ("Disputes"), between or among parties to the Notes or any other Loan
Document shall be resolved by binding arbitration conducted under and governed
by the Commercial Financial Disputes Arbitration Rules (the "Arbitration Rules")
of the American Arbitration Association (the "AAA") and the Federal Arbitration
Act. Disputes may include, without limitation, tort claims, counterclaims,
disputes as to whether a matter is subject to arbitration, claims brought as
class actions, or claims arising from documents executed in the future. A
judgment upon the award may be entered in any court having jurisdiction.
Notwithstanding the foregoing, this arbitration provision does not apply to
disputes under or related to swap agreements.
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All arbitration hearings shall be conducted in Charlotte, North Carolina. A
hearing shall begin within ninety (90) days of the demand for arbitration and
all hearings shall be concluded within one hundred twenty (120) days of demand
for arbitration. These time limitations may not be extended unless a party shows
cause for extension and then for no more than a total of sixty (60) days. The
expedited procedures set forth in Rule 51, et seq. of the Arbitration Rules
shall be applicable to claims of less than $1,000,000. Arbitrators shall be
licensed attorneys selected from the Commercial Financial Dispute Arbitration
Panel of the AAA. The parties do not waive Federal or state substantive law
except and provided herein.
Notwithstanding the preceding binding arbitration provisions, the parties
agree to preserve, without diminution, certain remedies that any party may
exercise before or after an arbitration proceeding is brought. The parties shall
have the right to proceed in any court of proper jurisdiction or by self-help to
exercise or prosecute the following remedies, as applicable: (i) all rights to
foreclose against any real or personal property or other security by exercising
a power of sale under applicable law by judicial foreclosure including a
proceeding to confirm the sale; (ii) all rights of self-help including peaceful
occupation of real property and collection of rents, set-off, and peaceful
possession of personal property; (iii) obtaining provisions/or ancillary
remedies including injunctive relief, sequestration, garnishment, attachment,
appointment of receiver and filing an involuntary bankruptcy proceeding; and
(iv) when applicable, a judgment by confession of judgment. Any claim or
controversy with regard to any party's entitlement to such remedies is a
dispute.
Each party agrees that it shall not have a remedy of punitive exemplary
damages against the other in any Dispute and hereby waives 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. The parties acknowledge that by agreeing to binding arbitration they
have irrevocably waived any right they may have to a jury trial with regard to a
Dispute.
(b) Jury Trial. TO THE EXTENT PERMITTED BY 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 LOAN
DOCUMENTS, ANY RIGHTS OR OBLIGATIONS HEREUNDER OR THEREUNDER, OR THE PERFORMANCE
OF SUCH RIGHTS AND OBLIGATIONS.
SECTION 14.7. 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.
65
SECTION 14.8. Injunctive Relief.
(a) 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.
(b) The Administrative Agent, Lender and Borrower (on behalf of itself and
its Subsidiaries) hereby agrees 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.
(c) 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 14.9. Accounting Matters. All financial and accounting
calculations, measurements and computations made for any purpose relating to
this Agreement, including, without limitation, all computations utilized by the
Borrower or any Subsidiary thereof to determine compliance with any covenant
contained herein, shall, except as otherwise expressly contemplated hereby or
unless there is an express written direction by the Administrative Agent and
Required Lenders 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 14.10. 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, so long as no Default or Event of Default shall have
occurred and be continuing, the Borrower, which consents shall not be
unreasonably withheld, assign to one or more Eligible Assignees
66
all or a portion of its interests, rights and obligations under this Agreement
(including, without limitation, all or a portion of the Obligations at the time
owing to it and the Notes held by it); provided that:
(i) if less than all of the assigning Lender's Commitment is to be
assigned, the Commitment so assigned shall not be less than (A) $10,000,000 if
such assignment is made by First Union in connection with the initial
syndication of the Commitments and (B) $5,000,000 in connection with any
assignment by a Lender thereafter;
(ii) 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 G attached hereto (an
"Assignment and Acceptance"), together with any Note or Notes subject to such
assignment;
(iii) 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; and
(iv) 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
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 Obligations 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
Lender 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
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shall, if such Assignment and Acceptance has been completed and is substantially
in the form of Exhibit G:
(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 it 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 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
Commitment and the Notes held by it); provided that:
(i) each such participation shall be in an amount not less than
$5,000,000;
(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
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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 and its Subsidiaries obtained pursuant to the Loan 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 and provided further, that the Administrative Agent and the 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 14.10, disclose to the assignee, participant, 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 14.11. Amendments, Waivers and Consents. Except as set forth below,
any term, covenant, agreement or condition of this Agreement or any of the other
Loan 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) (i) increase the Revolving Credit Commitment of any Lender, (ii)
reduce the rate of interest or fees payable on any Revolving Credit Loan or
Reimbursement Obligation, (iii) extend the originally scheduled time or times of
payment of the principal of any Revolving Credit Loan or Reimbursement
Obligation or the time or times of payment of interest on any Revolving Credit
Loan or Reimbursement Obligation or any fee or commission with respect thereto,
(iv) permit any subordination of the principal or interest on any Revolving
Credit Loan or Reimbursement Obligation or (v) extend the time of the obligation
of the Revolving Commitment Lenders to make or issue or participate in Letters
of Credit, in any case, without the written consent of each Lender holding
Revolving Credit Loans or a Revolving Credit Commitment,
(b) (i) increase the Term Loan Commitment of any Lender, (ii) reduce the
rate of interest or fees payable on any Term Loan, (iii) permit any
subordination of the principal or interest
69
on any Term Loan or (iv) extend the originally scheduled time or times of
payment of the principal of any Term Loan or the time or times of payment of
interest on any Term Loan or any fee or commission with respect thereto, in any
case, without the written consent of each Lender holding a Term Loan, or
(c) release any material portion of the Collateral or release the
Security Agreement (other than as specifically permitted in this Agreement or
the Security Agreement), amend the provisions of this Section 14.11 or, amend
the definition of Required Lenders without the written consent of each Lender.
In addition, no amendment, waiver or consent to the provisions of (a) Article
XIII shall be made without the written consent of the Administrative Agent and
(b) Article III without the written consent of the Issuing Lender.
SECTION 14.12. Performance of Duties. The Borrower's obligations under this
Agreement and each of the Loan Documents shall be performed by the Borrower at
its sole cost and expense.
SECTION 14.13. 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 Loan 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 14.14. 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 XIV and any other
provision of this Agreement and the Loan 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 14.15. Titles and Captions. Titles and captions of Articles,
Sections and subsections in this Agreement are for convenience only, and neither
limit nor amplify the provisions of this Agreement.
SECTION 14.16. Severability of Provisions. Any provision of this Agreement
or any other Loan 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 14.17. Counterparts. 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.
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SECTION 14.18. 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 paid and satisfied in full. No termination of this Agreement
shall affect the rights and obligations of the parties hereto arising prior to
such termination.
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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.
[CORPORATE SEAL] ▇▇▇▇▇▇ ▇▇▇▇▇▇, INC.
By: /s/▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: President
FIRST UNION NATIONAL BANK,
as Administrative Agent and Lender
By: /s/▇▇▇ ▇▇▇▇▇▇▇
----------------------------------
Name: ▇▇▇ ▇▇▇▇▇▇▇
Title: Senior Vice President
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SCHEDULE 1
LENDERS AND COMMITMENTS
-----------------------
COMMITMENT
AND COMMITMENT
LENDER PERCENTAGE ADDRESS
------ ---------- -------
First Union $100,000,000 ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇-▇
National Bank 100% ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Ms. ▇▇▇▇▇▇ ▇▇▇
Telephone No.: ▇▇▇-▇▇▇▇
Telecopy No.: 374-3300