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BRIDGE LOAN AGREEMENT
dated as of December __, 2002
among
KANEB PIPE LINE OPERATING PARTNERSHIP, L.P.
as Borrower
KANEB PIPE LINE PARTNERS, L.P.
as KPP
THE LENDERS FROM TIME TO TIME PARTY HERETO
and
SUNTRUST BANK
as Administrative Agent
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SUNTRUST ROBINSON HUMPHREY,
a division of SUNTRUST CAPITAL MARKETS, INC.
as Lead Arranger and Book Manager
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TABLE OF CONTENTS
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Page
Article I DEFINITIONS; CONSTRUCTION
<S> <C> <C>
Section 1.1.
Definitions..........................................................................................1
Section 1.2. Classifications of
Loans............................................................................18
Section 1.3. Accounting Terms and
Determination..................................................................18
Section 1.4. Terms
Generally.....................................................................................19
Article II AMOUNT AND TERMS OF THE COMMITMENTS
Section 2.1. [Intentionally
Omitted].............................................................................19
Section 2.2. The Bridge
Loan.....................................................................................19
Section 2.3.
Fees................................................................................................20
Section 2.4. Funding of the Bridge
Loan..........................................................................20
Section 2.5. Interest
Elections..................................................................................20
Section 2.6. [Intentionally
Omitted].............................................................................21
Section 2.7. Repayment of the Bridge
Loan........................................................................21
Section 2.8. Evidence of
Indebtedness............................................................................21
Section 2.9.
Prepayments.........................................................................................22
Section 2.10. Interest on
Loans..................................................................................22
Section 2.11. [Intentionally
Omitted]............................................................................23
Section 2.12. Computation of
Interest............................................................................23
Section 2.13. Inability to Determine Interest
Rates..............................................................23
Section 2.14.
Illegality.........................................................................................24
Section 2.15. Increased
Costs....................................................................................24
Section 2.16. Funding
Indemnity..................................................................................25
Section 2.17.
Taxes..............................................................................................25
Section 2.18. Payments Generally; Pro Rata Treatment; Sharing of
Set-offs........................................27
Section 2.19. Mitigation of Obligations; Replacement of
Lenders..................................................28
Article III CONDITIONS PRECEDENT TO LOANS
Section 3.1. Conditions To
Effectiveness.........................................................................29
Article IV REPRESENTATIONS AND WARRANTIES
Section 4.1. Existence;
Power....................................................................................31
Section 4.2. Organizational Power; Authorization;
Enforceability.................................................31
Section 4.3. Governmental Approvals; No
Conflicts................................................................31
Section 4.4. Financial
Statements................................................................................31
Section 4.5. Litigation and Environmental
Matters................................................................32
Section 4.6. Compliance with Laws and
Agreements.................................................................32
Section 4.7. Investment Company Act,
Etc.........................................................................32
Section 4.8.
Taxes...............................................................................................32
Section 4.9. Margin
Regulations................................................................................33
Section 4.10.
ERISA..............................................................................................33
Section 4.11. Ownership of
Property..............................................................................33
Section 4.12.
Disclosure.........................................................................................33
Section 4.13. Labor
Relations....................................................................................34
Section 4.14. Acquisition
Agreement..............................................................................34
Section 4.15. Subsidiaries, Significant Affiliates and
Guarantors................................................34
Section 4.16.
Liens..............................................................................................34
Article V AFFIRMATIVE COVENANTS
Section 5.1. Financial Statements and Other
Information..........................................................34
Section 5.2. Notices of Material
Events..........................................................................36
Section 5.3. Existence; Conduct of
Business......................................................................36
Section 5.4. Compliance with Laws,
Etc...........................................................................36
Section 5.5. Payment of
Obligations..............................................................................37
Section 5.6. Books and
Records...................................................................................37
Section 5.7. Visitation, Inspection,
Etc.........................................................................37
Section 5.8. Maintenance of Properties;
Insurance................................................................37
Section 5.9. Use of
Proceeds.....................................................................................37
Section 5.10. Additional
Subsidiaries............................................................................38
Article VI FINANCIAL COVENANTS
Section 6.1. Funded Debt to
EBITDA...............................................................................38
Section 6.2. Consolidated EBITDA to Consolidated Interest
Expense................................................38
Section 6.3. Consolidated Net
Worth..............................................................................38
Article VII NEGATIVE COVENANTS
Section 7.1.
Indebtedness........................................................................................39
Section 7.2. Negative
Pledge.....................................................................................39
Section 7.3. Fundamental
Changes.................................................................................40
Section 7.4. Investments, Loans,
Etc.............................................................................40
Section 7.5. Restricted
Payments.................................................................................41
Section 7.6. Sale of
Assets......................................................................................41
Section 7.7. Transactions with
Affiliates........................................................................41
Section 7.8. Restrictive
Agreements..............................................................................42
Section 7.9. Sale and Leaseback
Transactions.....................................................................42
Section 7.10. Hedging
Agreements.................................................................................42
Section 7.11. Amendment to Material
Documents....................................................................42
Section 7.12. Accounting
Changes.................................................................................42
Article VIII KPP GUARANTEe
Section 8.1.
Guarantee...........................................................................................43
Section 8.2. Guaranteed Obligations Not
Waived...................................................................43
Section 8.3. Guarantee of
Payment................................................................................44
Section 8.4. No Discharge or Diminishment of
Guarantee...........................................................44
Section 8.5. Defenses of Borrower
Waived.........................................................................44
Section 8.6. Agreement to Pay;
Subordination.....................................................................45
Section 8.7.
Information.........................................................................................45
Section 8.8. Representations and
Warranties......................................................................45
Section 8.9.
Termination.........................................................................................45
Article IX EVENTS OF DEFAULT
Section 9.1. Events of
Default...................................................................................46
Article X THE ADMINISTRATIVE AGENT
Section 10.1. Appointment of Administrative
Agent................................................................48
Section 10.2. Nature of Duties of Administrative
Agent...........................................................48
Section 10.3. Lack of Reliance on the Administrative
Agent.......................................................49
Section 10.4. Certain Rights of the Administrative
Agent.........................................................49
Section 10.5. Reliance by Administrative
Agent...................................................................50
Section 10.6. The Administrative Agent in its Individual
Capacity................................................50
Section 10.7. Successor Administrative
Agent.....................................................................50
Section 10.8. Authorization to Execute other Loan
Documents......................................................51
Article XI MISCELLANEOUS
Section 11.1.
Notices............................................................................................51
Section 11.2. Waiver;
Amendments.................................................................................52
Section 11.3. Expenses;
Indemnification..........................................................................53
Section 11.4. Successors and
Assigns.............................................................................54
Section 11.5. Governing Law; Jurisdiction; Consent to Service of
Process.........................................57
Section 11.6. WAIVER OF JURY
TRIAL...............................................................................57
Section 11.7. Right of
Setoff....................................................................................58
Section 11.8. Counterparts;
Integration..........................................................................58
Section 11.9.
Survival...........................................................................................58
Section 11.10.
Severability......................................................................................59
Section 11.11.
Confidentiality...................................................................................59
Section 11.12. Interest Rate
Limitation..........................................................................59
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<PAGE>
Schedules
Schedule I - Applicable Margin
Schedule II - Existing Indebtedness
Schedule 4.5 - Environmental Matters
Schedule 4.15 - Subsidiaries
Schedule 7.2 - Existing Liens
Exhibits
Exhibit A - Form of Note
Exhibit B - Form of Assignment and Acceptance
Exhibit C - Form of Subsidiary Guarantee Agreement
Exhibit E - Form of Continuation/Conversion
Exhibit F - Form of Opinion
<PAGE>
BRIDGE LOAN AGREEMENT
THIS BRIDGE LOAN AGREEMENT (this Agreement") is made and entered
into as of
December __, 2002, by and among KANEB PIPE LINE OPERATING
PARTNERSHIP, L.P., a
Delaware limited partnership (the "Borrower"), KANEB PIPE LINE
PARTNERS, L.P., a
Delaware limited partnership ("KPP"), the banks and other
financial institutions
from time to time party hereto (the "Lenders") and SUNTRUST
BANK, ("SunTrust")
as Administrative Agent for the Lenders (in such capacity,
together with its
successors in such capacity, the "Administrative Agent").
W I T N E S S E T H:
WHEREAS, the Borrower has requested that the Lenders make to it
an
unsecured bridge term loan in the initial principal amount of
$175,000,000; and
WHEREAS, subject to the terms and conditions of this Agreement
(including,
without limitation, the guaranty and other agreements of KPP set
forth herein),
the Lenders to the extent of their respective Commitments as
defined herein, are
willing severally to make such bridge term loan.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants
herein contained, the Borrower, KPP, the Lenders and the
Administrative Agent
agree as follows:
Article I - DEFINITIONS; CONSTRUCTION
Section 1.1. Definitions.
In addition to the other terms defined herein, the following
terms used
herein shall have the meanings herein specified (to be equally
applicable to
both the singular and plural forms of the terms defined):
"Acquisition" shall mean the acquisition of the Seller's
Northern
Great Plains Pipeline System and associated product
terminals.
"Acquisition Agreement" shall mean the Asset Purchase Agreement
dated
as of November 12, 2002, between the Borrower and the
Seller.
"Acquisition Documents" shall mean, collectively, the
Acquisition
Agreement and all other documents, instruments, agreements,
notes,
guarantees, opinions, and certificates executed in connection
therewith.
"Additional Debt" shall mean Indebtedness issued or incurred by
KPP,
Borrower or any Significant Affiliate after the date hereof,
other than
Indebtedness under this Agreement or under the Revolving Credit
Agreement.
"Adjusted LIBO Rate" shall mean, with respect to each Interest
Period
for a Eurodollar Loan, the rate per annum obtained by dividing
(i) LIBOR
for such Interest Period by (ii) a percentage equal to 1.00
minus the
Eurodollar Reserve Percentage.
"Administrative Agent" shall have the meaning set forth in the
opening
paragraph hereof.
"Administrative Questionnaire" shall mean, with respect to
each
Lender, an administrative questionnaire in the form prepared by
the
Administrative Agent and submitted to the Administrative Agent
duly
completed by such Lender.
"Affiliate" shall mean, as to any Person, any other Person
that
directly, or indirectly through one or more intermediaries,
Controls, is
Controlled by, or is under common Control with, such Person.
"Aggregate Commitments" shall mean, collectively, all
Commitments of
all Lenders hereunder which is $175,000,000.
"Applicable Lending Office" shall mean, for each Lender and for
each
Type of Loan, the "Lending Office" of such Lender (or an
Affiliate of such
Lender) designated for such Type of Loan in the
Administrative
Questionnaire submitted by such Lender or such other office of
such Lender
(or an Affiliate of such Lender) as such Lender may from time to
time
specify to the Administrative Agent and the Borrower as the
office by which
its Loans of such Type are to be made and maintained.
"Applicable Margin" shall mean a percentage per annum determined
by
reference to the Reference Ratings then in effect as set forth
on Schedule
I plus the Ticking Margin; provided, that any change in the
Applicable
Margin resulting from a change in any Reference Rating shall be
effective
on the day on which the applicable rating agency changes its
rating and
shall continue until the day prior to the day that a further
change becomes
effective. The Applicable Margin shall initially be set at Level
I.
"Asset Disposition" shall mean, with respect to KPP or any
Significant
Affiliate, any sale, transfer, conveyance, lease or other
disposition
(including by way of merger, consolidation or sale-leaseback) by
KPP or
such Significant Affiliate to any other Person (other than by
any Person to
KPP or a Guarantor or by a Significant Affiliate to any other
Significant
Affiliate) of any assets of KPP or such Significant Affiliate
(including,
without limitation, any Equity Interests owned by KPP or such
Significant
Affiliate). The term "Asset Disposition" shall not include (i)
dispositions
of inventory in the ordinary course of business, (ii)
dispositions of other
assets in the ordinary course of business having a Diluted Value
of not
more than $15,000,000 in the aggregate during the Term of this
Agreement,
(iii) the grant of a Lien by KPP or any Significant Affiliate in
any assets
securing a borrowing by, or contractual performance obligation
of, KPP or
such Significant Affiliate otherwise permitted under this
Agreement, and
(iv) dispositions of Equity Interests in connection with
directors'
qualifying shares or comparable Equity Interests.
"Assignment and Acceptance" shall mean an assignment and
acceptance
entered into by a Lender and an assignee (with the consent of
any party the
consent of which is required by Section 11.4(b)) and accepted by
the
Administrative Agent, in the form of Exhibit B attached hereto
or any other
form approved by the Administrative Agent.
"Base Rate" shall mean the higher of (i) the per annum rate
which the
Administrative Agent publicly announces from time to time to be
its prime
lending rate, as in effect from time to time, and (ii) the
Federal Funds
Rate as in effect from time to time plus one-half of one percent
(0.50%).
The Administrative Agent's prime lending rate is a reference
rate and does
not necessarily represent the lowest or best rate charged to
customers. The
Administrative Agent may make commercial loans or other loans at
rates of
interest at, above or below the Administrative Agent's prime
lending rate.
Each change in the Administrative Agent's prime lending rate
shall be
effective from and including the date such change is publicly
announced as
being effective.
"Borrower" shall have the meaning in the introductory
paragraph
hereof.
"Bridge Loan," "Loan," or "Loans" shall have the meanings set
forth in
Section 2.2 hereof.
"Business Day" shall mean (i) any day other than a Saturday,
Sunday or
other day on which commercial banks in Atlanta, Georgia and New
York, New
York are authorized or required by law to close and (ii) if such
day
relates to a Loan of, a payment or prepayment of principal or
interest on,
a conversion of or into, or an Interest Period for, a Eurodollar
Loan or a
notice with respect to any of the foregoing, any day on which
dealings in
Dollars are carried on in the London interbank market.
"Capital Lease Obligations" of any Person shall mean all
obligations
of such Person to pay rent or other amounts under any lease (or
other
arrangement conveying the right to use) real or personal
property, or a
combination thereof, which obligations are required to be
classified and
accounted for as capital leases on a balance sheet of such
Person under
GAAP, and the amount of such obligations shall be the
capitalized amount
thereof determined in accordance with GAAP.
"Change in Control" shall mean the occurrence of one or more of
the
following events: (i) any sale, lease, exchange or other
transfer (in a
single transaction or a series of related transactions) of all
or
substantially all of the assets of KPP or the General Partner to
any other
Person or "group" (within the meaning of the Securities Exchange
Act of
1934 and the rules of the Securities and Exchange Commission
thereunder in
effect on the date hereof), (ii) the acquisition of ownership,
directly or
indirectly, beneficially or of record, by any Person or "group"
(within the
meaning of the Securities Exchange Act of 1934 and the rules of
the
Securities and Exchange Commission thereunder as in effect on
the date
hereof) (other than, in the case of the General Partner, by the
Investor
Group) of sufficient Equity Interests in KPP or the General
Partner to
Control KPP or the General Partner, as the case may be; or (iii)
occupation
of a majority of the seats (other than vacant seats) on the
board of
directors of the General Partner by Persons who were neither (A)
nominated
by the current board of directors or (B) appointed by directors
so
nominated.
"Change in Law" shall mean (i) the adoption of any applicable
law,
rule or regulation after the date of this Agreement, (ii) any
change in any
applicable law, rule or regulation, or any change in the
interpretation or
application thereof, by any Governmental Authority after the
date of this
Agreement, or (iii) compliance by any Lender (or its Applicable
Lending
Office) by such Lender's holding company, if applicable) with
any request,
guideline or directive (whether or not having the force of law)
of any
Governmental Authority made or issued after the date of this
Agreement.
"Charges" shall have the meaning set forth in Section 11.12.
"Closing Date" shall mean the date on which the conditions
precedent
set forth in Section 3.1 have been satisfied or waived in
accordance with
Section 11.2.
"Code" shall mean the Internal Revenue Code of 1986, as amended
and in
effect from time to time.
"Commitment" shall mean, with respect to each Lender, the
obligation
of such Lender to make a Loan to the Borrower on the Closing
Date in a
principal amount not exceeding the amount set forth with respect
to such
Lender on the signature pages to this Agreement.
"Consolidated EBITDA" shall mean, for KPP and its Subsidiaries
for any
period, an amount equal to the sum of (i) Consolidated Net
Income for such
period plus (ii) to the extent deducted in determining
Consolidated Net
Income for such period, (A) Consolidated Interest Expense, (B)
income tax
expense, (C) depreciation and amortization and (D) all other
non-cash
charges, determined on a consolidated basis in accordance with
GAAP in each
case for such period.
"Consolidated Funded Debt" shall mean Funded Debt of KPP and
its
consolidated Subsidiaries, other than Permitted Non-Recourse
Debt.
"Consolidated Interest Expense" shall mean, for KPP and its
Subsidiaries for any period determined on a consolidated basis
in
accordance with GAAP, the sum of (i) total cash interest
expense, (other
than in respect of Permitted Non-Recourse Debt) including
without
limitation the interest component of any payments in respect of
Capital
Lease Obligations capitalized or expensed during such period
(whether or
not actually paid during such period) plus (ii) the net amount
payable (or
minus the net amount receivable) under Hedging Agreements during
such
period (whether or not actually paid or received during such
period).
"Consolidated Net Income" shall mean, for any period, the sum of
(i)
the net income (or loss) of KPP and its Subsidiaries for such
period
determined on a consolidated basis in accordance with GAAP, but
(A)
excluding therefrom (to the extent otherwise included therein)
(1) any
extraordinary gains or losses, (2) any gains attributable to
write-ups of
assets, (3) any equity interest of KPP or any Subsidiary of KPP
in the
unremitted earnings of any Person that is not a Subsidiary other
than ST
Linden, L.L.C., (4) any income of any Person other than KPP or
the Borrower
for such period if (x) such Person has any Permitted
Non-Recourse
Indebtedness outstanding owing to any Person other than KPP or
a
wholly-owned subsidiary of KPP and (y) such income is not
received in cash
by KPP or the Borrower, as the case may be, during such period,
and (B)
including therein (to the extent not otherwise included therein)
any income
(or loss) of any Person or attributable to any assets if such
income
accrued prior to the date that (x) such Person became a
Subsidiary or was
merged into or consolidated with KPP or any Subsidiary of KPP or
(y) such
assets were acquired by KPP or any Subsidiary, as the case may
be, plus
(ii) the net income (or loss) of the General Partner in such
period
attributable to the General Partner's interest in the Borrower,
determined
in accordance with GAAP, and (5) any gains or losses
attributable to the
termination of Hedging Agreements or the retirement of
Indebtedness.
"Consolidated Net Worth" means as at any date the sum of (x)
total
partners' capital of KPP and its consolidated Subsidiaries as at
such date,
excluding the effects of any write-ups after December 31, 1999
of assets
owned by KPP and its consolidated subsidiaries as of the date of
this
Agreement plus (y) minority interests of the General Partner in
the
Borrower, in each case determined in accordance with GAAP.
"Constituent Documents" shall mean, for any Person, the
documents for
its formation and organization, which, for example, (i) for a
corporation
are its corporate charter and bylaws, (ii) for a partnership is
its
partnership agreement, (iii) for a limited liability company are
its
certificate of organization and regulations, and (iv) for a
trust is the
trust agreement or indenture under which it is created.
"Control" shall mean the power, directly or indirectly, either
to (i)
vote 15% or more of securities having ordinary voting power for
the
election of directors (or persons performing similar functions)
of a Person
or (ii) direct or cause the direction of the management and
policies of a
Person, whether through the ability to exercise voting power, by
contract
or otherwise. The terms "Controlled by" and "under common
Control with"
have meanings correlative thereto.
"Credit Exposure" shall mean with respect to any Lender at any
time
the outstanding principal amount of its Loan to Borrower.
"Credit Rating" of any Person shall mean any rating published by
S&P
or Moody's for such Person's senior, unsecured long-term debt
securities
without third-party credit enhancement, whether or not any such
debt
securities are actually outstanding, and any rating assigned to
any other
debt security of such Person shall be disregarded.
"Default" shall mean any condition or event that, with the
giving of
notice or the lapse of time or both, would constitute an Event
of Default.
"Default Interest" shall have the meaning set forth in
Section
2.10(b).
"Diluted Value" shall mean, with respect to any assets of KPP,
the
Fair Market Value of such assets, and, with respect to any
assets of any
other Person, the Fair Market Value of such assets multiplied by
the
percentage of the Equity Interests held directly or indirectly
by KPP in
such Person.
"Disbursement" shall mean the disbursement by each Lender of
the
amount of its Commitment for the Bridge Loan on the Closing
Date.
"Distribution" shall mean, with respect to any Equity Interests
issued
by a Person (i) the retirement, redemption, purchase or other
acquisition
for value of those Equity Interests, (ii) the declaration or
payment of any
dividend or distribution on or with respect to those Equity
Interests,
(iii) any Investment by that Person in the holder of any of
those Equity
Interests, and (iv) any other payment by that Person with
respect to those
Equity Interests.
"Dollar(s)" and the sign "$" shall mean lawful money of the
United
States of America.
"Environmental Liability" shall mean any liability, contingent
or
otherwise (including any liability for damages, costs of
environmental
investigation and remediation, costs of administrative
oversight, fines,
natural resource damages, penalties or indemnities), of KPP or
any
Subsidiary directly or indirectly resulting from or based upon
(i) any
actual or alleged violation of any Environmental Law, (ii) the
generation,
use, handling, transportation, storage, treatment or disposal of
any
Hazardous Materials, (iii) any actual or alleged exposure to any
Hazardous
Materials, (iv) the Release or threatened Release of any
Hazardous
Materials or (v) any contract, agreement or other consensual
arrangement
pursuant to which liability is assumed or imposed with respect
to any of
the foregoing.
"Equity Event" shall mean (i) the contribution in cash of
capital to
KPP or any Subsidiary of KPP by any Person other than KPP or a
Wholly-Owned
Subsidiary of KPP or any Subsidiary of KPP, or (ii) any issuance
of Equity
Interests by KPP or any Subsidiary of KPP to any Person other
than KPP or
any Subsidiary of KPP or a Wholly-Owned Subsidiary of KPP.
"Equity Interests" shall mean, (i) with respect to a
corporation,
shares of capital stock of such corporation or any other
interest
convertible or exchangeable into any such interest, (ii) with
respect to a
limited liability company, a membership interest in such
company, (iii)
with respect to a partnership, a partnership interest in such
partnership,
and (iv) with respect to any other Person, an interest in such
Person
analogous to interests described in clauses (i) through
(iii).
"ERISA" shall mean the Employee Retirement Income Security Act
of
1974, as amended from time to time, and any successor
statute.
"ERISA Affiliate" shall mean any trade or business (whether or
not
incorporated), which, together with KPP, is treated as a single
employer
under Section 414(b) or (c) of the Code or, solely for the
purposes of
Section 302 of ERISA and Section 412 of the Code, is treated as
a single
employer under Section 414 of the Code.
"ERISA Event" shall mean (i) any "reportable event", as defined
in
Section 4043 of ERISA or the regulations issued thereunder with
respect to
a Plan (other than an event for which the 30-day notice period
is waived);
(ii) the existence with respect to any Plan of an "accumulated
funding
deficiency" (as defined in Section 412 of the Code or Section
302 of
ERISA), whether or not waived; (iii) the filing pursuant to
Section 412(d)
of the Code or Section 303(d) of ERISA of an application for a
waiver of
the minimum funding standard with respect to any Plan; (iv) the
incurrence
by KPP or any of its ERISA Affiliates of any liability under
Title IV of
ERISA with respect to the termination of any Plan; (v) the
receipt by KPP
or any ERISA Affiliate from the PBGC or a plan administrator
appointed by
the PBGC of any notice relating to an intention to terminate any
Plan or
Plans or to appoint a trustee to administer any Plan; (vi) the
incurrence
by KPP or any of its ERISA Affiliates of any liability with
respect to the
withdrawal or partial withdrawal from any Plan or Multiemployer
Plan; or
(vii) the receipt by KPP or any ERISA Affiliate of any notice,
or the
receipt by any Multiemployer Plan from KPP or any ERISA
Affiliate of any
notice, concerning the imposition of Withdrawal Liability or
a
determination that a Multiemployer Plan is, or is expected to
be, insolvent
or in reorganization, within the meaning of Title IV of
ERISA.
"Eurodollar" when used in reference to any Loan refers to the
fact
that such Loan bears interest at a rate determined by reference
to the
Adjusted LIBO Rate.
"Eurodollar Reserve Percentage" shall mean the aggregate of
the
maximum reserve percentages (including, without limitation, any
emergency,
supplemental, special or other marginal reserves) expressed as a
decimal
(rounded upwards to the next 1/100th of 1%) in effect on any day
to which
the Administrative Agent is subject with respect to the Adjusted
LIBO Rate
pursuant to regulations issued by the Board of Governors of the
Federal
Reserve System (or any Governmental Authority succeeding to any
of its
principal functions) with respect to eurocurrency funding
(currently
referred to as "eurocurrency liabilities" under Regulation D).
Eurodollar
Loans shall be deemed to constitute eurocurrency funding and to
be subject
to such reserve requirements without benefit of or credit for
proration,
exemptions or offsets that may be available from time to time to
any Lender
under Regulation D. The Eurodollar Reserve Percentage shall be
adjusted
automatically on and as of the effective date of any change in
any reserve
percentage.
"Event of Default" shall have the meaning set forth in Article
IX.
"Excluded Affiliate" shall mean, for any Person (the "first
Person"),
any other Person (the "second Person") in which the first Person
owns
Equity Interests and where the second Person (i) has no
Indebtedness other
than Permitted Non-Recourse Debt and (ii) the sole purpose of
which is to
engage in the acquisition, construction, development and/or
operation
activities financed or refinanced with such Permitted
Non-Recourse Debt.
"Excluded Subsidiary" shall mean any Subsidiary of KPP that is
an
Excluded Affiliate.
"Excluded Taxes" shall mean with respect to the Administrative
Agent,
any Lender or any other recipient of any payment to be made by
or on
account of any obligation of the Borrower hereunder, (i) income
or
franchise taxes imposed on (or measured by) its net income by
the United
States of America, or by the jurisdiction under the laws of
which such
recipient is organized or in which its principal office is
located or, in
the case of any Lender, in which its applicable lending office
is located,
(ii) any branch profits taxes imposed by the United States of
America or
any similar tax imposed by any other jurisdiction in which any
Lender is
located and (iii) in the case of a Foreign Lender, any
withholding tax that
(A) is imposed on amounts payable to such Foreign Lender at the
time such
Foreign Lender becomes a party to this Agreement, (B) is imposed
on amounts
payable to such Foreign Lender at any time that such Foreign
Lender
designates a new lending office, other than taxes that have
accrued prior
to the designation of such lending office that are otherwise not
Excluded
Taxes, and (C) is attributable to such Foreign Lender's failure
to comply
with Section 2.17(e).
"Existing Indebtedness" shall mean the Indebtedness described
on
Schedule II of this Agreement.
"Fair Market Value" shall mean, with respect to any Equity
Interest or
other property or asset, the price obtainable for such Equity
Interest or
other property or asset in an arm's-length sale between an
informed and
willing purchaser under no compulsion to purchase and an
informed and
willing seller under no compulsion to sell.
"Federal Funds Rate" shall mean, for any day, the rate per
annum
(rounded upwards, if necessary, to the next 1/100th of 1%) equal
to the
weighted average of the rates on overnight Federal funds
transactions with
member banks of the Federal Reserve System arranged by Federal
funds
brokers, as published by the Federal Reserve Bank of New York on
the next
succeeding Business Day or if such rate is not so published for
any
Business Day, the Federal Funds Rate for such day shall be the
average
rounded upwards, if necessary, to the next 1/100th of 1% of the
quotations
for such day on such transactions received by the Administrative
Agent from
three Federal funds brokers of recognized standing selected by
the
Administrative Agent.
"Fee Letter" shall mean that certain letter agreement from
SunTrust
Robinson Humphrey and SunTrust to the Borrower, dated November
15, 2002, as
the same may be amended or replaced from time to time,
concerning certain
fees in connection with this Agreement and any agreements or
instruments
executed in connection herewith.
"Foreign Lender" shall mean any Lender that is not a United
States
person under Section 7701(a)(3) of the Code.
"Foreign Subsidiary" shall mean any Subsidiary of KPP that is
not
organized under the law of the United States of America or any
state or
territory thereof.
"Funded Debt" of any Person shall mean (i) all Indebtedness of
such
Person of the types described in clauses (i) though (v) of the
definition
of "Indebtedness", (ii) all Guarantees of such Person of the
types of
Indebtedness described in clause (i) above and (iii) all
obligations that
are secured (or for which the holder of any such obligation has
an existing
right, contingent or otherwise, to be so secured) by any Lien on
property
owned or acquired by such Person, in an amount limited to the
lesser of (x)
the unpaid amount of all of such obligations from time to time
outstanding
and (y) the Fair Market Value of the property securing all of
such
obligations, liabilities secured (or for which the holder of
such
obligations has an existing right, contingent or otherwise, to
be so
secured) by any Lien existing on property owned or acquired by
such Person.
"GAAP" shall mean generally accepted accounting principles in
the
United States applied on a consistent basis and subject to the
terms of
Section 1.3.
"General Partner" shall mean Kaneb Pipe Line Company LLC, a
Delaware
limited liability company.
"Governmental Authority" shall mean the government of the
United
States of America, any other nation or any political subdivision
thereof,
whether state or local, and any agency, authority,
instrumentality,
regulatory body, court, central bank or other entity exercising
executive,
legislative, judicial, taxing, regulatory or administrative
powers or
functions of or pertaining to government.
"Granting Lender" shall have the meaning set forth in Section
11.4(e).
"Guarantee" of or by any Person (the "guarantor") shall mean
any
obligation, contingent or otherwise, of the guarantor
guaranteeing or
having the economic effect of guaranteeing any Indebtedness of
any other
Person (the "primary obligor") in any manner, whether directly
or
indirectly, and including any obligation, direct or indirect, of
the
guarantor (i) to purchase or pay (or advance or supply funds for
the
purchase or payment of) such Indebtedness or other obligation or
to
purchase (or to advance or supply funds for the purchase of) any
security
for the payment thereof, (ii) to purchase or lease property,
securities or
services for the purpose of assuring the owner of such
Indebtedness or
other obligation of the payment thereof, (iii) to maintain
working capital,
equity capital or any other financial statement condition or
liquidity of
the primary obligor so as to enable the primary obligor to pay
such
Indebtedness or other obligation or (iv) as an account party in
respect of
any letter of credit or letter of guaranty issued in support of
such
Indebtedness or obligation; provided, that the term "Guarantee"
shall not
include endorsements for collection or deposits in the ordinary
course of
business. The amount of any Guarantee shall be deemed to be an
amount equal
to the stated or determinable amount of the primary obligation
in respect
of which Guarantee is made or, if not so stated or determinable,
the
maximum reasonably anticipated liability in respect thereof
(assuming such
Person is required to perform thereunder) as determined by such
Person in
good faith. The term "Guarantee" used as a verb has a
corresponding
meaning.
"Guaranteed Obligations" shall have the meaning set forth in
Section
8.01.
"Guarantor" shall mean KPP and each party to the Subsidiary
Guarantee
Agreement.
"Hazardous Materials" means all explosive or radioactive
substances or
wastes and all hazardous or toxic substances, wastes or other
pollutants,
including petroleum or petroleum distillates, asbestos or
asbestos
containing materials, polychlorinated biphenyls, radon gas,
infectious or
medical wastes and all other substances or wastes of any nature
regulated
pursuant to any Environmental Law.
"Hedging Agreements" shall mean interest rate swap, cap or
collar
agreements, interest rate future or option contracts, currency
swap
agreements, currency future or option contracts, commodity
agreements and
other similar agreements or arrangements designed to protect
against
fluctuations in interest rates, currency values or commodity
values, in
each case to which KPP or any Subsidiary of KPP is a party.
"Indebtedness" of any Person shall mean, without duplication (i)
all
obligations of such Person for borrowed money, (ii) all
obligations of such
Person evidenced by bonds, debentures, notes or other similar
instruments,
(iii) all obligations of such Person in respect of the deferred
purchase
price of property or services (other than trade payables
incurred in the
ordinary course of business; provided, that for purposes of
Section 9.1(f),
trade payables overdue by more than 120 days shall be included
in this
definition except to the extent that any of such trade payables
are being
disputed in good faith and by appropriate measures), (iv) all
obligations
of such Person under any conditional sale or other title
retention
agreement(s) relating to property acquired by such Person, (v)
all Capital
Lease Obligations of such Person and all obligations in respect
of the
unpaid principal amount or component of all obligations under
synthetic
leases, (vi) all obligations, contingent or otherwise, of such
Person in
respect of letters of credit, acceptances or similar extensions
of credit,
(vii) all Guarantees of such Person of the type of Indebtedness
described
in clauses (i) through (vi) above, (viii) all Indebtedness of a
third party
secured by any Lien on property owned by such Person, whether or
not such
Indebtedness has been assumed by such Person, (ix) all
obligations of such
Person, contingent or otherwise, to purchase, redeem, retire or
otherwise
acquire for value any common stock of such Person, and (x)
Off-Balance
Sheet Liabilities. The Indebtedness of any Person shall include
the
Indebtedness of any partnership or joint venture in which such
Person is a
general partner or a joint venturer, except to the extent that
the terms of
such Indebtedness provide that such Person is not liable
therefor.
"Indemnified Taxes" shall mean Taxes other than Excluded
Taxes.
"Indemnitee" shall have the meaning set forth in Section
11.3(b).
"Interest Coverage Ratio" shall mean for any period of four
consecutive fiscal quarters of KPP, the ratio of (i)
Consolidated EBITDA
for such period to (ii) Consolidated Interest Expense for such
period.
"Interest Period" shall mean with respect to any Eurodollar
Loan, a
period of one, two, or three months; provided, that:
(i) the initial Interest Period for such Loan shall commence on
the
date of such Loan or the date of any conversion from a Loan
of
another Type, and each Interest Period occurring thereafter
in
respect of such Loan shall commence on the day on which the
next
preceding Interest Period expires;
(ii) if any Interest Period would otherwise end on a day other
than a
Business Day, such Interest Period shall be extended to the
next
succeeding Business Day, unless such Business Day falls in
another calendar month, in which case such Interest Period
would
end on the next preceding Business Day;
(iii)any Interest Period that begins on the last Business Day of
a
calendar month or on a day for which there is no numerically
corresponding day in the calendar month at the end of such
Interest Period shall end on the last Business Day of such
calendar month;
(iv) no Interest Period may extend beyond the Maturity Date.
"Investment" shall mean, in respect of any Person, any loan,
advance,
extension of credit or capital contribution to that Person, any
other
investment in that Person, or any purchase or commitment to
purchase any
Equity Interest or Indebtedness issued by that Person or
substantially all
of the assets or a division or other business unit of that
Person.
"Investor Group" shall mean Kaneb Services, LLC and its
Subsidiaries.
"Lenders" shall have the meaning assigned to such term in the
opening
paragraph of this Agreement.
"LIBOR" shall mean, for any applicable Interest Period with
respect to
any Eurodollar Loan, the rate per annum for deposits in Dollars
for a
period equal to such Interest Period appearing on the display
designated as
Page 3750 on the Dow Jones Markets Service (or such other page
on that
service or such other service designated by the British
Banker's
Association for the display of such Association's Interest
Settlement Rates
for Dollar deposits) as of 11:00 a.m. (London, England time) on
the day
that is two Business Days prior to the first day of the Interest
Period or
if such Page 3750 is unavailable for any reason at such time,
the rate
which appears on the Reuters Screen ISDA Page as of such date
and such
time; provided, that if the Administrative Agent determines that
the
relevant foregoing sources are unavailable for the relevant
Interest
Period, LIBOR shall mean the rate of interest determined by
the
Administrative Agent to be the average (rounded upward, if
necessary, to
the nearest 1/100th of 1%) of the rates per annum at which
deposits in
Dollars are offered to the Administrative Agent two Business
Days preceding
the first day of such Interest Period by leading banks in the
London
interbank market as of 10:00 a.m. for delivery on the first day
of such
Interest Period, for the number of days comprised therein and in
an amount
comparable to the amount of the Eurodollar Loan of the
Administrative
Agent.
"Lien" shall mean any mortgage, pledge, security interest,
financing
statement, lien (statutory or otherwise), charge,
encumbrance,
hypothecation, assignment, deposit arrangement, or other
arrangement having
the practical effect of the foregoing or any preference,
priority or other
security agreement or preferential arrangement of any kind or
nature
whatsoever (including any conditional sale or other title
retention
agreement and any capital lease having the same economic effect
as any of
the foregoing).
"Loan" or "Loans" shall mean, individually and collectively, the
term
loans, or portions thereof, made by the Lenders to the Borrower
under the
Commitments, which may either be Base Rate Loans or Eurodollar
Loans, or a
combination thereof, and all of which, collectively, in the
aggregate shall
constitute the Bridge Loan.
"Loan Documents" shall mean, collectively, this Agreement, the
Notes
(if any), the Subsidiary Guarantee Agreement, the Fee Letter,
the funds
disbursement instructions for the Bridge Loan, all Notices
of
Conversion/Continuation and all other agreements, documents
and
certificates executed in connection with this Agreement or the
Obligations.
"Loan Parties" shall mean the General Partner, the Borrower and
the
Guarantors.
"Material Adverse Effect" shall mean, with respect to any event,
act,
condition or occurrence of whatever nature (including any
adverse
determination in any litigation, arbitration, or governmental
investigation
or proceeding), whether singularly or in conjunction with any
other event
or events, act or acts, condition or conditions, occurrence or
occurrences
whether or not related, a material adverse change in, or a
material adverse
effect on, (i) the business, results of operations, financial
condition,
assets, liabilities or prospects of the Borrower or of KPP and
its
Subsidiaries taken as a whole, (ii) the ability of any Loan
Party to
perform any of its obligations under the Loan Documents, (iii)
the rights
and remedies of the Administrative Agent and the Lenders under
any of the
Loan Documents or (iv) the legality, validity or enforceability
of any of
the Loan Documents.
"Material Indebtedness" shall mean Indebtedness (other than the
Loans)
or obligations in respect of one or more Hedging Agreements of
any one or
more of KPP and its Subsidiaries in an aggregate principal
amount exceeding
$5,000,000, including without limitation Indebtedness incurred
under the
Revolving Credit Agreement. For purposes of determining
Material
Indebtedness, the "principal amount" of the obligations of KPP
or any
Subsidiary of KPP in respect to any Hedging Agreement at any
time shall be
the maximum aggregate amount (giving effect to any netting
agreements) that
KPP or such Subsidiary would be required to pay if such Hedging
Agreement
were terminated at such time.
"Maturity Date" shall mean the earliest of (i) December 28,
2003, and
(ii) the date on which all amounts outstanding under this
Agreement have
been declared or have automatically become due and payable
(whether by
acceleration or otherwise).
"Maximum Rate" shall have the meaning set forth in Section
11.12.
"Moody's" shall mean Moody's Investors Service, Inc.
"Multiemployer Plan" shall have the meaning set forth in
Section
4001(a)(3) of ERISA.
"Net Cash Proceeds" shall mean, with respect to any Asset
Disposition,
Recovery Event, Additional Debt or Equity Event (each, for
purposes of this
definition, a "transaction"), the aggregate amount of cash
received, as the
case may be, by (x) KPP or the Borrower or (y) any Significant
Affiliate
and legally available to be distributed to KPP or the Borrower
in the form
of dividends or distributions in connection with such
transaction after, in
each case, deducting therefrom (i) payments made in respect of
any
Indebtedness to the extent that such payments are required to be
made
(other than under the Loan Documents) as a result of or in
connection with
such transaction by applicable law or the terms of any
contractual
agreement relating to such Indebtedness, (ii) reasonable and
customary
transaction costs (which in the case of any Recovery Event may
include
litigation costs and expenses and other costs and expenses of
collecting
payments and settlements therefrom) that are paid or reserved
for payment
(A) to a Person that is not an Affiliate of KPP or (B) to KPP or
an
Affiliate of KPP to reimburse such Person for payments made by
such Person
to another Person that is not KPP or an Affiliate of KPP in
respect of such
transaction costs, (iii) the amount of taxes paid or reserved
for payment
by KPP or such Significant Affiliate in connection with or as a
result of
such transaction and (iv) any Reinvestment Amount.
"Non-Recourse" shall mean, with respect to any Person as applied
to
any Indebtedness (i) that such Person is not directly or
indirectly liable
to make any payments with respect to such Indebtedness, (ii)
that such
Indebtedness (or portion thereof) does not constitute
Indebtedness of such
Person other than to the extent of recourse to such Person's
Equity
Interests in the Person primarily incurring such Debt (or any
shareholder,
partner, member or participant of such Person) and that (iii)
such
Indebtedness (or portion thereof) is not secured by a Lien on
any asset of
such Person other than such Person's Equity Interests in the
Person
primarily incurring such Indebtedness or any shareholder,
partner, member,
participant or other owner, directly or indirectly, of such
Person or the
Person the obligations of which were guaranteed.
"Note" shall mean a promissory note of the Borrower payable to
the
order of a requesting Lender in the principal amount of such
Lender's
Commitment, in substantially the form of Exhibit A.
"Notice of Conversion/Continuation" shall mean the notice given
by the
Borrower to the Administrative Agent in respect of the
conversion or
continuation of an outstanding Loan as provided in Section
2.5(b) hereof.
"Obligations" shall mean all amounts owing by the Borrower to
the
Administrative Agent or any Lender pursuant to or in connection
with this
Agreement or any other Loan Document, including, without
limitation, all
principal, interest (including any interest accruing after the
filing of
any petition in bankruptcy or the commencement of any
insolvency,
reorganization or like proceeding relating to the Borrower,
whether or not
a claim for post-filing or post-petition interest is allowed in
such
proceeding), all reimbursement obligations, fees, expenses,
indemnification
and reimbursement payments, costs and expenses (including all
fees and
expenses of counsel to the Administrative Agent and any Lender
incurred
pursuant to this Agreement or any other Loan Document), whether
direct or
indirect, absolute or contingent, liquidated or unliquidated,
now existing
or hereafter arising hereunder or thereunder, and all
obligations arising
under Hedging Agreements relating to the foregoing to the extent
permitted
hereunder, and all obligations and liabilities incurred in
connection with
collecting and enforcing the foregoing, together with all
renewals,
extensions, modifications or refinancings thereof.
"Off-Balance Sheet Liabilities" of any Person shall mean (i)
any
repurchase obligation or liability of such Person with respect
to accounts
or notes receivable sold by such Person, (ii) any liability of
such Person
under any sale and leaseback transactions that do not create a
liability on
the balance sheet of such Person, or (iii) any obligation
arising with
respect to any other transaction which is the functional
equivalent of or
takes the place of borrowing but that does not constitute a
liability on
the balance sheet of such Person.
"Other Taxes" shall mean any and all present or future stamp
or
documentary taxes or any other excise or property taxes, charges
or similar
levies arising from any payment made hereunder or from the
execution,
delivery or enforcement of, or otherwise with respect to, this
Agreement or
any other Loan Document.
"Participant" shall have the meaning set forth in Section
11.4(c).
"Payment Office" shall mean the office of the Administrative
Agent
located at 303 Peachtree Street, Atlanta, Georgia 30308, or such
other
location as to which the Administrative Agent shall have given
written
notice to the Borrower and the other Lenders.
"PBGC" shall mean the Pension Benefit Guaranty Corporation
referred to
and defined in ERISA, and any successor entity performing
similar
functions.
"Permitted Encumbrances" shall mean
(i) Liens imposed by law for taxes not yet due or which are
being
contested in good faith by appropriate proceedings and with
respect to
which adequate reserves are being maintained in accordance with
GAAP;
(ii) statutory Liens of landlords and Liens of carriers,
warehousemen, mechanics, materialmen and other Liens imposed by
law
created in the ordinary course of business for amounts not yet
due or
which are being contested in good faith by appropriate
proceedings and
with respect to which adequate reserves are being maintained
in
accordance with GAAP;
(iii)pledges and deposits made in the ordinary course of
business
in compliance with workers' compensation, unemployment insurance
and
other social security laws or regulations;
(iv) deposits to secure the performance of bids, trade
contracts,
leases, statutory obligations, surety and appeal bonds,
performance
bonds and other obligations of a like nature, in each case in
the
ordinary course of business;
(v) easements, zoning restrictions, rights-of-way and
similar
encumbrances on real property imposed by law or arising in
the
ordinary course of business that do not secure any monetary
obligations and do not materially detract from the value of
the
affected property or materially interfere with the ordinary
conduct of
business of the Borrower and its Subsidiaries taken as a whole;
and
(vi) Liens granted in favor of the Administrative Agent for
the
benefit of the Lenders.
"Permitted Investments" shall mean:
(i) direct obligations of, or obligations the principal of
and
interest on which are unconditionally guaranteed by, the United
States
(or by any agency thereof to the extent such obligations are
backed by
the full faith and credit of the United States), in each case
maturing
within one year from the date of acquisition thereof;
(ii) commercial paper having the highest rating, at the time
of
acquisition thereof, of S&P or Moody's and in either case
maturing
within six months from the date of acquisition thereof;
(iii)certificates of deposit, bankers' acceptances and time
deposits maturing within 180 days of the date of acquisition
thereof
issued or guaranteed by or placed with, and money market
deposit
accounts issued or offered by, any domestic office of any
commercial
bank organized under the laws of the United States or any
state
thereof which has a combined capital and surplus and undivided
profits
of not less than $500,000,000;
(iv) fully collateralized repurchase agreements with a term
of
not more than 30 days for securities described in clause (i)
above and
entered into with a financial institution satisfying the
criteria
described in clause (iii) above; and
(v) mutual funds investing solely in any one or more of the
Permitted Investments described in clauses (i) through (iv)
above.
"Permitted Non-Recourse Debt" shall mean Indebtedness of any
Person
(other than any Loan Party) that is Non-Recourse to any Loan
Party and is
used by such Person to acquire, construct, develop and/or
operate assets
not owned by KPP or any Significant Affiliate as of the date
hereof or to
refinance Permitted Non-Recourse Debt.
"Person" shall mean any individual, partnership, firm,
corporation,
association, joint venture, limited liability company, trust or
other
entity, or any Governmental Authority.
"Plan" means any employee pension benefit plan (other than a
Multiemployer Plan) subject to the provisions of Title IV of
ERISA or
Section 412 of the Code or Section 302 of ERISA, and in respect
of which
KPP or any ERISA Affiliate is (or, if such plan were terminated,
would
under Section 4069 of ERISA be deemed to be) an "employer" as
defined in
Section 3(5) of ERISA.
"Prior Bridge Loan" shall mean that certain bridge loan to
the
Borrower pursuant to the Prior Bridge Loan Agreement.
"Prior Bridge Loan Agreement " shall mean that certain Bridge
Loan
Agreement dated as of November 1, 2002 among the Borrower, KPP,
the lenders
signatory thereto, and SunTrust Bank, as administrative agent
for the
lenders, and all other documents and agreements executed in
connection
therewith.
"Pro Rata Share" shall mean with respect to any Lender at any
time, a
percentage, the numerator of which shall be such Lender's Credit
Exposure
and the denominator of which shall be the sum of the Credit
Exposures of
all Lenders.
"Recovery Event" shall mean any settlement of or payment in
respect of
any property or casualty insurance claim or any condemnation
proceeding
relating to any property or asset of KPP or any Significant
Affiliate, the
Diluted Value of which settlement or payment, when added to the
Diluted
Value of all such settlements and payments during the Term of
this
Agreement, exceeds $10,000,000.
"Reference Ratings" shall mean the Credit Ratings of the
Borrower.
"Regulation D" shall mean Regulation D of the Board of Governors
of
the Federal Reserve System, as the same may be in effect from
time to time,
and any successor regulations.
"Reinvestment Amount" means, with respect to any Recovery Event,
the
amount of cash received by KPP or any Significant Affiliate that
the
Borrower, by written notice delivered to the Administrative
Agent on or
prior to the date 10 Business Days following receipt of such
cash by KPP or
such Significant Affiliate, certifies will be reinvested, and
within 180
days of receipt of such cash is in fact reinvested, in assets to
replace,
restore or refurbish the assets that were the subject of such
Recovery
Event.
"Related Parties" shall mean, with respect to any specified
Person,
such Person's Affiliates and the respective directors, officers,
employees,
agents and advisors of such Person and such Person's
Affiliates.
"Release" means any release, spill, emission, leaking,
dumping,
injection, pouring, deposit, disposal, discharge, dispersal,
leaching or
migration into the environment (including ambient air, surface
water,
groundwater, land surface or subsurface strata) or within any
building,
structure, facility or fixture.
"Required Lenders" shall mean, at any time, Lenders holding more
than
51% of the aggregate outstanding Loans.
"Responsible Officer" shall mean, with respect to any Person,
any of
the president, the chief executive officer, the chief operating
officer,
the chief financial officer, the treasurer or a vice president
of such
Person or such other representative of such Person as may be
designated in
writing by any one of the foregoing with the consent of the
Administrative
Agent.
"Restricted Payment" shall have the meaning set forth in Section
7.5.
"Revolving Borrowings" shall have the meaning assigned to the
term
"Borrowings" under the Revolving Credit Agreement.
"Revolving Credit Agreement" shall mean that certain Revolving
Credit
Agreement, dated as of December 28, 2000, as amended by that
certain
Amendment No. 1 to Revolving Credit Agreement, dated as of July
31, 2002
and Amendment No. 2 to Revolving Credit Agreement, dated as of
October 31,
2002, by and among the Borrower, KPP, the lenders party thereto,
and the
Administrative Agent.
"Revolving Credit Facility" shall mean the revolving credit
facility
provided under the Revolving Credit Agreement.
"S&P" shall mean Standard & Poor's Ratings Group, a
division of The
McGraw-Hill Companies, Inc.
"Seller" shall mean Tesoro Refining and Marketing Company, a
Delaware
corporation.
"Senior Notes Indenture" shall mean that certain Indenture,
dated on
or about February 21, 2002, between the Borrower and JPMorgan
Chase Bank,
as trustee, with respect to the issuance of the Borrower's
7.750% Senior
Unsecured Notes due 2012.
"Significant Affiliate" shall mean each Person (i) in which
KPP's
direct and indirect Investments in such Person constitute more
than 10% of
the total assets of KPP and its consolidated Subsidiaries, (ii)
in which
KPP's and its Subsidiaries' share of the total assets (after
intercompany
eliminations) of such Person exceed 10% of the total assets of
KPP and its
consolidated Subsidiaries, or (iii) in which the equity of KPP
and its
Subsidiaries in the income from continuing operations of such
Person before
income taxes, extraordinary items and cumulative effects of
changes in
accounting principles exceeds 10% of such income of KPP and
its
consolidated Subsidiaries.
"Significant Subsidiary" means any Subsidiary of KPP that is
a
Significant Affiliate.
"SPV" shall have the meaning set forth in Section 11.4(e).
"Subsidiary" shall mean, with respect to any Person (the
"parent"),
any corporation, partnership, joint venture, limited liability
company,
association or other entity the accounts of which would be
consolidated
with those of the parent in the parent's consolidated financial
statements
if such financial statements were prepared in accordance with
GAAP as of
such date, as well as any other corporation, partnership, joint
venture,
limited liability company, association or other entity (i) of
which
securities or other ownership interests representing more than
50% of the
equity or more than 50% of the ordinary voting power, or in the
case of a
partnership, more than 50% of the general partnership interests
are, as of
such date, owned, Controlled or held, or (ii) that is, as of
such date,
otherwise Controlled, by the parent or one or more subsidiaries
of the
parent or by the parent and one or more subsidiaries of the
parent.
"Subsidiary Guarantee Agreement" shall mean the Subsidiary
Guarantee
Agreement, substantially in the form of Exhibit C, made by the
Guarantors
(other than KPP) in favor of the Administrative Agent for the
benefit of
the Lenders.
"SunTrust Robinson Humphrey" shall mean SunTrust Robinson
Humphrey
Capital Markets, a division of SunTrust Capital Markets,
Inc.
"Taxes" shall mean any and all present or future taxes,
levies,
imposts, duties, deductions, charges or withholdings imposed by
any
Governmental Authority.
"Term" shall mean the period from the Closing Date to the
Maturity
Date.
"Ticking Margin" shall mean (i) 0% per annum for the period
commencing
on the Closing Date through and including the 90th day after the
Closing
Date, and (ii) 0.25% per annum for the period commencing on the
91st day
after the Closing Date and continuing through and including the
180th day
after the Closing Date and (iii) an additional 0.25% per annum
for every 90
days thereafter.
"Type", when used in reference to a Loan, shall refer to whether
the
rate of interest on such Loan is determined by reference to the
Adjusted
LIBO Rate or the Base Rate.
"UK Facility" shall mean the Credit Agreement, dated as of
January 29,
1999, among the Borrower and ST Services, Ltd., as borrowers,
and SunTrust
Bank, as lender, as amended, modified and supplemented from time
to time.
"Wholly-Owned Subsidiary" shall mean any Subsidiary of a Person,
all
of the issued and outstanding Equity Interests of which are
directly or
indirectly owned by such Person, excluding (i) any general
partner
interests owned by the General Partner in any such Subsidiary
that is a
partnership and (ii) any directors' qualifying shares or similar
type of
Equity Interests, as applicable.
"Withdrawal Liability" shall mean liability to a Multiemployer
Plan as
a result of a complete or partial withdrawal from such
Multiemployer Plan,
as such terms are defined in Part I of Subtitle E of Title IV of
ERISA.
Section 1.2. Classifications of Loans.
For purposes of this Agreement, Loans may be classified and
referred to by
Type (e.g., a "Eurodollar Loan" or "Base Rate Loan").
Section 1.3. Accounting Terms and Determination.
Unless otherwise defined or specified herein, all accounting
terms used
herein shall be interpreted, all accounting determinations
hereunder shall be
made, and all financial statements required to be delivered
hereunder shall be
prepared, in accordance with GAAP as in effect from time to
time, applied on a
basis consistent (except for such changes approved by KPP's
independent public
accountants) with the most recent audited consolidated financial
statement of
KPP delivered pursuant to Section 5.1(a); provided, that if KPP
notifies the
Administrative Agent that KPP wishes to amend any covenant in
Article VI to
eliminate the effect of any change in GAAP on the operation of
such covenant (or
if the Administrative Agent notifies KPP that the Required
Lenders wish to amend
Article VI for such purpose), then KPP's compliance with such
covenant shall be
determined on the basis of GAAP in effect immediately before the
relevant change
in GAAP became effective, until either such notice is withdrawn
or such covenant
is amended in a manner satisfactory to KPP and the Required
Lenders.
Section 1.4. Terms Generally.
The definitions of terms herein shall apply equally to the
singular and
plural forms of the terms defined. Whenever the context may
require, any pronoun
shall include the corresponding masculine, feminine and neuter
forms. The words
"include", "includes" and "including" shall be deemed to be
followed by the
phrase "without limitation". The word "will" shall be construed
to have the same
meaning and effect as the word "shall". In the computation of
periods of time
from a specified date to a later specified date, the word "from"
means "from and
including" and the word "to" means "to but excluding". Unless
the context
requires otherwise (i) any definition of or reference to any
agreement,
instrument or other document herein shall be construed as
referring to such
agreement, instrument or other document as it was originally
executed or as it
may from time to time be amended, supplemented or otherwise
modified (subject to
any restrictions on such amendments, supplements or
modifications set forth
herein), (ii) any reference herein to any Person shall be
construed to include
such Person's successors and permitted assigns, (iii) the words
"hereof",
"herein" and "hereunder" and words of similar import shall be
construed to refer
to this Agreement as a whole and not to any particular provision
hereof, (iv)
all references to Articles, Sections, Exhibits and Schedules
shall be construed
to refer to Articles, Sections, Exhibits and Schedules to this
Agreement and (v)
all references to a specific time shall be construed to refer to
the time in the
city and state of the Administrative Agent's principal office,
unless otherwise
indicated.
Article II - AMOUNT AND TERMS OF THE COMMITMENTS
Section 2.1. [Intentionally Omitted]
Section 2.2. The Bridge Loan.
Subject to the terms and conditions set forth herein, each
Lender severally
agrees to make a single Loan to the Borrower (each a "Loan" and
collectively,
the "Loans" or the "Bridge Loan") on the Closing Date in a
principal amount not
to exceed each such Lender's Commitment; provided, however, that
if for any
reason (other than the failure of a Lender to make such Loan)
the amount of such
Lender's Commitment is not drawn on the Closing Date, the
undrawn portion
thereof shall be cancelled. The execution and delivery of this
Agreement by the
Borrower and the satisfaction of all conditions precedent set
forth in Section
3.1 hereof shall be deemed to constitute the Borrower's request
to borrow
hereunder on the Closing Date.
Section 2.3. Fees.
The Borrower shall pay SunTrust and SunTrust Robinson Humphrey
for their
respective accounts such fees as are set forth in the Fee Letter
on the dates
specified therein.
Section 2.4. Funding of the Bridge Loan.
(a) Each Lender will make available each Loan to be made by
it
hereunder on the Closing Date by wire transfer in immediately
available
funds by 11:00 a.m. to the Administrative Agent at the Payment
Office. The
Administrative Agent will make such Loans available to the
Borrower by
promptly crediting the amounts that it receives, in like funds
by the close
of business on the Closing Date, to an account maintained by the
Borrower
with the Administrative Agent or at the Borrower's option, by
effecting a
wire transfer of such amounts to an account designated by the
Borrower to
the Administrative Agent.
(b) All Loans shall be made by the Lenders on the basis of
their
respective Commitment. No Lender shall be responsible for any
default by
any other Lender in its obligations hereunder, and each Lender
shall be
obligated to make its Loans provided to be made by it hereunder,
regardless
of the failure of any other Lender to make its Loans
hereunder.
Section 2.5. Interest Elections.
(a) The Bridge Loan initially shall be a Base Rate Loan.
Thereafter,
the Borrower may elect to convert the Bridge Loan, or any
portion thereof,
into a different Type or to continue such Loan, and in the case
of a
Eurodollar Loan, may elect Interest Periods therefor, all as
provided in
this Section. The Borrower may elect different options with
respect to
different portions of the Bridge Loan, in which case each such
portion
shall be allocated ratably among the Lenders according to each
Lender's Pro
Rata Share; provided, however, that there shall be no more than
three
Eurodollar Loans outstanding at any given time.
(b) To make an election pursuant to this Section, the Borrower
shall
give the Administrative Agent prior written notice (or
telephonic notice
promptly confirmed in writing) of each Loan (a "Notice of
Conversion/Continuation") that is to be converted or continued,
as the case
may be, (x) prior to 10:00 a.m. one Business Day prior to the
requested
date of a conversion into a Base Rate Loan and (y) prior to
11:00 a.m.
three Business Days prior to a continuation of or conversion
into a
Eurodollar Loan. Each such Notice of Conversion/Continuation
shall be
irrevocable and shall specify (i) the amount of the portion of
the Bridge
Loan to which such Notice of Continuation/Conversion applies
and, if
different options are being elected with respect to different
portions
thereof, the amount of the portions thereof that are to be
allocated to
each Loan (in which case the information to be specified
pursuant to
clauses (iii) and (iv) shall be specified for each Loan); (ii)
the
effective date of the election made pursuant to such Notice
of
Continuation/Conversion, which shall be a Business Day, (iii)
whether the
Loan is to be a Base Rate Loan or a Eurodollar Loan; and (iv) if
the Loan
is to be a Eurodollar Loan, the Interest Period applicable
thereto after
giving effect to such election, which shall be a period
contemplated by the
definition of "Interest Period". If any such Notice of
Continuation/Conversion requests a Eurodollar Loan but does not
specify an
Interest Period, the Borrower shall be deemed to have selected
an Interest
Period of one month.
(c) If, on the expiration of any Interest Period in respect of
any
Eurodollar Loan, the Borrower shall have failed to deliver a
Notice of
Conversion/ Continuation, then, unless such Loan is repaid as
provided
herein, the Borrower shall be deemed to have elected to convert
such Loan
to a Base Rate Loan. No Loan may be converted into, or continued
as, a
Eurodollar Loan if a Default or an Event of Default has occurred
and is
continuing, unless the Administrative Agent and each of the
Lenders shall
have otherwise consented in writing. No conversion of any
Eurodollar Loans
shall be permitted except on the last day of the Interest Period
in respect
thereof.
(d) Upon receipt of any Notice of Conversion/Continuation,
the
Administrative Agent shall promptly notify each Lender of the
details
thereof and of such Lender's portion of each such Loan.
Section 2.6. [Intentionally Omitted]
Section 2.7. Repayment of the Bridge Loan.
The outstanding principal amount of the Bridge Loan shall be due
and
payable in full (together with accrued and unpaid interest
thereon) on the
Maturity Date.
Section 2.8. Evidence of Indebtedness.
(a) Each Lender shall maintain in accordance with its usual
practice
appropriate records evidencing the indebtedness of the Borrower
to such
Lender resulting from each Loan made by such Lender from time to
time,
including the amounts of principal and interest payable thereon
and paid to
such Lender from time to time under this Agreement. The
Administrative
Agent shall maintain appropriate records in which shall be
recorded (i) the
Commitment of each Lender, (ii) the amount of each Loan made
hereunder by
each Lender, the Type thereof and the Interest Period applicable
thereto,
(iii) the date of each continuation thereof pursuant to Section
2.5, (iv)
the date of each conversion of all or a portion thereof to
another Type
pursuant to Section 2.5, (v) the date and amount of any
principal or
interest due and payable or to become due and payable from the
Borrower to
each Lender hereunder in respect of such Loans and (vi) both the
date and
amount of any sum received by the Administrative Agent hereunder
from the
Borrower in respect of the Loans and each Lender's Pro Rata
Share thereof.
The entries made in such records shall be prima facie evidence
of the
existence and amounts of the obligations of the Borrower therein
recorded;
provided, that the failure or delay of any Lender or the
Administrative
Agent in maintaining or making entries into any such record or
any error
therein shall not in any manner affect the obligation of the
Borrower to
repay the Loans (both principal and unpaid accrued interest) of
such Lender
in accordance with the terms of this Agreement.
(b) At the request of any Lender at any time, the Borrower
agrees that
it will execute and deliver to such Lender a Note, payable to
the order of
such Lender.
Section 2.9. Prepayments.
(a) The Borrower shall have the right at any time and from time
to
time to prepay the Bridge Loan, in whole or in part, without
premium or
penalty, by giving irrevocable written notice (or telephonic
notice
promptly confirmed in writing) to the Administrative Agent no
later than
(i) in the case of prepayment of any Eurodollar Loan, 11:00 a.m.
not less
than three Business Days prior to any such prepayment, and (ii)
in the case
of any prepayment of any Base Rate Loan, not less than one
Business Day
prior to the date of such prepayment. Each such notice shall be
irrevocable
and shall specify the proposed date of such prepayment and the
principal
amount of each Loan or portion thereof to be prepaid. Upon
receipt of any
such notice, the Administrative Agent shall promptly notify each
affected
Lender of the contents thereof and of such Lender's Pro Rata
Share of any
such prepayment. If such notice is given, the aggregate amount
specified in
such notice shall be due and payable on the date designated in
such notice,
together with accrued interest to such date on the amount so
prepaid in
accordance with Section 2.10(c); provided, that if a Eurodollar
Loan is
prepaid on a date other than the last day of an Interest Period
applicable
thereto, the Borrower shall also pay all amounts required
pursuant to
Section 2.16. Prepayments shall be in minimum amounts of
$10,000,000 and
integral multiples of $1,000,000.
(b) The Borrower shall promptly notify the Administrative Agent
upon
the receipt of any Net Cash Proceeds from the issuance of any
Additional
Debt by KPP, the Borrower or any Significant Affiliate or the
occurrence of
any Equity Event, and no later than the Business Day following
the date of
receipt thereof, the Borrower shall prepay the Bridge Loan,
together with
payment of all accrued and unpaid interest, fees, expenses and
amounts
required pursuant to Section 2.16 of this Agreement, in an
aggregate amount
equal to 100% (without duplication) of such Net Cash Proceeds,
such
payments to be applied (i) first, to the payment of interest,
fees,
expenses and such other amounts, pro rata to the Lenders based
on the
amount of such interest, fees, expenses and other amounts
outstanding at
such time and (ii) second to the payment of principal on the
Bridge Loan,
pro rata to the Lenders based on their respective Pro Rata
Shares.
Section 2.10. Interest on Loans.
(a) The Borrower shall pay interest on each Base Rate Loan at
the Base
Rate in effect from time to time and on each Eurodollar Loan at
the
Adjusted LIBO Rate for the applicable Interest Period in effect
for such
Loan, plus, in each case, the Applicable Margin in effect from
time to
time.
(b) If an Event of Default has occurred and is continuing, at
the
option of the Required Lenders, the Borrower shall pay interest
("Default
Interest") with respect to all Eurodollar Loans at the rate
otherwise
applicable for the then-current Interest Period plus an
additional 2% per
annum until the last day of such Interest Period, and
thereafter, and with
respect to all Base Rate Loans and all other Obligations
hereunder (other
than Loans), at the rate in effect for Base Rate Loans, plus an
additional
2% per annum. If the Bridge Loan is not paid in full on the
Maturity Date,
interest shall accrue on the outstanding balance of the Bridge
Loan from
and after such date at a per annum interest rate equal to the
Base Rate
plus the Applicable Margin plus 4% per annum.
(c) Interest on the principal amount of all Loans shall accrue
from
and including the date such Loans are made to but excluding the
date of any
repayment thereof. Interest on all outstanding Base Rate Loans
shall be
payable quarterly in arrears on December 31, 2002, March 31,
2003, June 30,
2003, September 30, 2003, and on the Maturity Date. Interest on
all
outstanding Eurodollar Loans shall be payable on the last day of
each
Interest Period applicable thereto, and, in the case of any
Eurodollar
Loans having an Interest Period in excess of three months, on
each day that
occurs every three months, after the initial date of such
Interest Period,
and on the Maturity Date. Interest on any Loan that is converted
into a
Loan of another Type or that is repaid or prepaid shall be
payable on the
date of such conversion or on the date of any such repayment or
prepayment
(on the amount repaid or prepaid) thereof. All Default Interest
shall be
payable on demand.
(d) The Administrative Agent shall determine each interest
rate
applicable to the Loans hereunder and shall promptly notify the
Borrower
and the Lenders of such rate in writing (or by telephone,
promptly
confirmed in writing). Any such determination shall be
conclusive and
binding for all purposes, absent manifest error.
Section 2.11. [Intentionally Omitted]
Section 2.12. Computation of Interest.
Interest based on the Administrative Agent's prime rate pursuant
to clause
(i) of the definition of "Base Rate" shall be computed on the
basis of a year of
365 days (or 366 days in a leap year) and paid for the actual
number of days
elapsed (including the first day but excluding the last day).
All other interest
shall be computed on the basis of a year of 360 days and paid
for the actual
number of days elapsed (including the first day but excluding
the last day).
Section 2.13. Inability to Determine Interest Rates.
If prior to the commencement of any Interest Period for any
Eurodollar
Loan, (i) the Administrative Agent shall have determined (which
determination
shall be conclusive and binding upon the Borrower) that, by
reason of
circumstances affecting the relevant
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