$290,000,000.00
CREDIT AGREEMENT
Dated as of October 7, 1999
Among
SEMCO ENERGY, INC.
as Borrower
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THE BANKS NAMED IN THIS CREDIT AGREEMENT
as Banks
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BANC OF AMERICA SECURITIES LLC
as Arranger
-----------
and
BANK OF AMERICA, N.A.
as Administrative Agent
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TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
Section 1.01. Certain Defined Terms 1
Section 1.02. Computation of Time Periods 16
Section 1.03. Accounting Terms; Changes in GAAP 17
Section 1.04. Types of Advances 17
Section 1.05. Miscellaneous 17
Section 1.06. Ratings 17
ARTICLE II
THE ADVANCES
Section 2.01. The Advances. 17
Section 2.02. Method of Borrowing 18
Section 2.03. Fees 20
Section 2.04. Reduction of the Commitments 20
Section 2.05. Repayment 21
Section 2.06. Interest 21
Section 2.07. Prepayments 21
Section 2.08. Breakage Costs 23
Section 2.09. Increased Costs and Reduced Return 23
Section 2.10. Payments and Computations 25
Section 2.11. Taxes 26
Section 2.12. Sharing of Payments, Etc. 27
Section 2.13. Replacement of Bank. 27
ARTICLE III
CONDITIONS OF BORROWING
Section 3.01. Initial Conditions Precedent to Borrowing 28
Section 3.02. Additional Conditions Precedent to the Borrowing 29
Section 3.03. Determinations Under Sections 3.01 and 3.02 32
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
Section 4.01. Corporate Existence; Subsidiaries 32
Section 4.02. Corporate Power 32
Section 4.03. Authorization and Approvals 33
Section 4.04. Enforceable Obligations 33
Section 4.05. Financial Statements 33
Section 4.06. Acquired Business 34
Section 4.07. True and Complete Disclosure 34
Section 4.08. Litigation 34
Section 4.09. Use of Proceeds 34
Section 4.10. Investment Company Act 35
Section 4.11. Public Utility Holding Company Act 35
Section 4.12. Taxes 35
Section 4.13. Pension Plans 35
Section 4.14. No Burdensome Restrictions; No Defaults 36
Section 4.15. Environmental Condition 36
Section 4.16. Compliance with Laws, Material Agreements. 37
Section 4.17. Year 2000. 37
ARTICLE V
AFFIRMATIVE COVENANTS
Section 5.01. Compliance with Laws, Material Agreements, Etc. 38
Section 5.02. Maintenance of Insurance 38
Section 5.03. Preservation of Corporate Existence, Etc. 38
Section 5.04. Payment of Taxes, Etc. 38
Section 5.05. Visitation Rights; Environmental Inspections 38
Section 5.06. Reporting Requirements 39
Section 5.07. Maintenance of Property 41
Section 5.08. Subsidiaries 41
Section 5.09. Books and Records 42
Section 5.10. Year 2000 42
Section 5.11. Temporary Subsidiaries 42
ARTICLE VI
NEGATIVE COVENANTS
Section 6.01. Use of Proceeds 42
Section 6.02. Liens, Etc. 42
Section 6.03. Restricted Payments 43
Section 6.04. Compliance with ERISA 43
Section 6.05. Merger or Consolidation; Asset Sales 43
Section 6.06. Permitted Investments 43
Section 6.07. Affiliate Transactions 44
Section 6.08. Fixed Coverage Ratio 44
Section 6.09. Limitations on Debt. 44
Section 6.10. Operative Documents 44
Section 6.11. Subsidiary Debt 44
Section 6.12. Utility Subsidiaries 45
ARTICLE VII
DEFAULT AND REMEDIES
Section 7.01. Events of Default 45
Section 7.02. Optional Acceleration of Maturity 47
Section 7.03. Automatic Acceleration of Maturity 47
Section 7.04. Non-exclusivity of Remedies 48
Section 7.05. Right of Set-off 48
Section 7.06. Application of Payments 48
ARTICLE VIII
THE ADMINISTRATIVE AGENT
Section 8.01. Appointment, Powers, and Immunities 48
Section 8.02. Reliance by Administrative Agent 49
Section 8.03. Defaults 49
Section 8.04. Rights as Bank 49
Section 8.05. INDEMNIFICATION 50
Section 8.06. Non-Reliance on Administrative Agent and
Other Banks 50
Section 8.07. Resignation of Administrative Agent 50
ARTICLE IX
MISCELLANEOUS
Section 9.01. Amendments, Etc. 51
Section 9.02. Notices, Etc. 51
Section 9.03. No Waiver; Remedies 52
Section 9.04. Costs and Expenses 52
Section 9.05. Binding Effect 52
Section 9.06. Bank Assignments and Participations 52
Section 9.07. INDEMNIFICATION 54
Section 9.08. Confidentiality 54
Section 9.09. Execution in Counterparts 55
Section 9.10. Survival of Representations, etc 55
Section 9.11. Severability 55
Section 9.12. Maximum Rate 55
Section 9.13. Usury Not Intended 55
Section 9.14. Governing Law 56
Section 9.15. Waiver of Jury 56
EXHIBITS:
Exhibit A - Form of Assignment and Acceptance
Exhibit B - Form of Subsidiary Guaranty Agreement
Exhibit C - Form of Note
Exhibit D - Form of Notice of Borrowing
Exhibit E - Form of Notice of Conversion or Continuation
Exhibit F - Form of Compliance Certificate
SCHEDULES:
Schedule 1.01(a) - Notice Information
Schedule 1.01(b) - Commitment Fees and Applicable Margins
Schedule 1.01(c) - Permitted Liens
Schedule 4.01 - Subsidiaries
Schedule 5.08 - Immaterial Subsidiaries
Schedule 6.11 - Existing Indebtedness
CREDIT AGREEMENT
This Credit Agreement dated as of October 7, 1999 is among SEMCO Energy,
Inc., a Michigan corporation ("Borrower"), the Banks (as defined below), and
Bank of America, N.A., as Administrative Agent.
The Borrower, the Banks and the Administrative Agent agree as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
Section 1.01. Certain Defined Terms. As used in this Agreement, the
term "Borrower" shall have the meaning set forth above and the following terms
shall have the following meanings (unless otherwise indicated, such meanings to
be equally applicable to both the singular and plural forms of the terms
defined):
"Acceptable Instruments" means promissory notes duly executed by any
Subsidiary of the Borrower and payable to the order of the Borrower, evidencing
Indebtedness owed by such Subsidiary to the Borrower and bearing interest at a
rate that is reasonably equivalent to the market rate for debt instruments of
similar risk and maturity.
"Acquired Business" means the business to be acquired by the Borrower
pursuant to the Purchase Agreement, including Alaska Pipeline Company, an Alaska
corporation, the Alaskan natural gas distribution division of Ocean Energy, Inc.
generally known as ENSTAR Natural Gas Company, the business carried on and
conducted by such division and each Subsidiary of any Person so acquired.
"Acquisition" means the acquisition of an entity or an asset by the
Borrower or any of its Subsidiaries.
"Acquisition Debt" means, for any Acquisition, Debt incurred by the
Borrower or any of its Subsidiaries, the proceeds of which are used to make such
Acquisition and Debt assumed by the Borrower or any of its Subsidiaries as part
of such Acquisition.
"Acquisition EBITDA" means, with respect to an Acquisition (i) the net
income of the entity acquired in such Acquisition or directly attributable to
the assets acquired in such Acquisition, as the case may be, for the 12 month
period prior to the date of determination (without giving effect to any
non-recurring items, extraordinary gains or losses from the sale of assets or
write down in the value of the entity or assets that comprise the Acquisition
for such period) minus (ii) any non-cash income to the extent included in
determining such net income plus, without duplication, (iii) depreciation,
amortization, interest expense, income taxes and other non-cash charges for such
period to the extent deducted in determining such net income, all determined in
accordance with GAAP.
"Acquisition Pro Forma Debt to Total Capitalization Ratio" means, as to any
Acquisition, the ratio of (a) Acquisition Debt for such Acquisition to (b)
Acquisition Pro Forma Total Capitalization for such Acquisition.
"Acquisition Pro Forma Leverage Ratio" means, as to any Acquisition, the
ratio of (a) Acquisition Debt for such Acquisition to (b) Acquisition EBITDA for
such Acquisition.
"Acquisition Pro Forma Total Capitalization" means, as to any Acquisition,
the sum of (i) Acquisition Debt for such Acquisition plus (ii) either the net
worth (determined in accordance with GAAP) of the entity acquired in such
Acquisition or the fair value (but not greater than the purchase price) of the
assets acquired in such Acquisition, as the case may be.
"Adjusted Eurodollar Rate" means, for any Eurodollar Rate Advance for any
Interest Period therefor, the rate per annum (rounded upwards, if necessary, to
the nearest 1/100 of 1%) determined by the Administrative Agent to be equal to
the quotient obtained by dividing (a) the Eurodollar Rate for such Eurodollar
Rate Advance for such Interest Period by (b) 1 minus the Eurodollar Rate Reserve
Percentage in effect from time to time.
"Administrative Agent" means Bank of America, in its capacity as an agent
pursuant to Article VIII and any successor Administrative Agent pursuant to
Section 8.07.
"Advance" means any advance by a Bank to the Borrower pursuant to Section
2.01 and refers to a Base Rate Advance or a Eurodollar Rate Advance.
"Affiliate" means, 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 or any Subsidiary of such Person. The
term "control" (including the terms "controlled by" or "under common control
with") means the possession, directly or indirectly, of the power to direct or
cause the direction of the management and policies of a Person, whether through
ownership of a capital stock, by contract or otherwise.
"Agreement" means this Credit Agreement dated as of October 7, 1999 among
the Borrower, the Banks and the Administrative Agent, as it may be amended,
modified, or supplemented from time to time.
"APC" means Alaska Pipeline Company, an Alaska corporation.
"Applicable Lending Office" means, for each Bank and for each Type of
Advance, the "Lending Office" of such Bank (or of an Affiliate of such Bank)
designated for such Type of Advance on Schedule 1.01(a) or such other office of
such Bank (or an Affiliate of such Bank) as such Bank may from time to time
specify to the Administrative Agent and the Borrower by written notice in
accordance with the terms of this Agreement as the office by which its Advances
of such Type are to be made and maintained.
"Applicable Margin" means, at any time for any Interest Period for any
Eurodollar Rate Advance, the percentage per annum applicable to such Eurodollar
Rate Advance as shown in Schedule 1.01(b) and being based on the Rating Level,
which for the purposes of determining the Applicable Margin for any Interest
Period for any Eurodollar Rate Advance shall be the Rating Level in effect on
the first day of such Interest Period.
"Arranger" means Banc of America Securities LLC.
"Assignment and Acceptance" means an assignment and acceptance entered into
by a Bank and an Eligible Assignee, and accepted by the Administrative Agent, in
substantially the form of Exhibit A.
"Bank of America" means Bank of America, N.A., a national banking
association.
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"Banks" means the lenders listed on the signature pages of this Agreement
and each Eligible Assignee that shall become a party to this Agreement pursuant
to Section 9.06.
"Base Rate" means, for any day, the rate per annum equal to the higher of
(a) the Federal Funds Rate for such day plus 0.5% and (b) the Prime Rate for
such day. Any change in the Base Rate due to a change in the Prime Rate or the
Federal Funds Rate shall be effective on the effective date of such change in
the Prime Rate or Federal Funds Rate.
"Base Rate Advance" means an Advance which bears interest as provided in
Section 2.06(a).
"Borrower" is defined in the first paragraph of this Agreement.
"Borrowing" means the borrowing consisting of simultaneous Advances of the
same Type made by each Bank pursuant to Section 2.01.
"Business Day" means a day of the year on which banks are not required or
authorized to close in New York City or Dallas, Texas and, if the applicable
Business Day relates to any Eurodollar Rate Advances, on which dealings are
carried on by banks in the London interbank market.
"Capitalized Lease" means any lease the obligation for Rentals with respect
to which is required to be capitalized on a consolidated balance sheet of the
lessee and its subsidiaries in accordance with GAAP.
"Capitalized Rentals" of any Person means the amount at which the aggregate
Rentals due and to become due under all Capitalized Leases under which such
Person is a lessee would be reflected as a liability on a consolidated balance
sheet of such Person in accordance with GAAP.
"CERCLA" means the Comprehensive Environmental Response, Compensation, and
Liability Act of 1980, 12 U.S.C. Section 9601 et seq., as amended, state and
local analogs, and all rules and regulations and requirements thereunder, in
each case as now or hereafter in effect.
"Change in Control" means (i) any Person or two or more Persons acting in
concert shall have acquired beneficial ownership (within the meaning of Rule
13d-3 of the Securities and Exchange Commission under the Securities Exchange
Act of 1934), directly or indirectly, of securities of the Borrower (or other
securities convertible into such securities) representing 40% or more of the
combined voting power of all securities of the Borrower entitled to vote in the
election of directors, other than securities having such power only by reason of
the happening of a contingency, or (ii) during any period of up to 24
consecutive months, commencing before, on or after the date of this Agreement,
individuals who at the beginning of such 24-month period were directors of the
Borrower or who were elected by individuals who at the beginning of such period
were such directors or by individuals elected in accordance with this clause
(ii) shall cease for any reason to constitute a majority of the board of
directors of the Borrower, or (iii) any Person or two or more Persons acting in
concert shall have acquired by contract or otherwise, or shall have entered into
a contract or arrangement which upon consummation will result in its or their
acquisition of, the power to exercise, directly or indirectly, a controlling
influence over the management or policies of the Borrower.
"Code" means the Internal Revenue Code of 1986, as amended, and any
successor statute.
"Commitment" has the meaning set forth in Section 2.01.
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"Conforming Acquisition Debt" means Acquisition Debt which is incurred in
connection with an Acquisition if (a) the Acquisition Pro Forma Leverage Ratio
for such Acquisition is positive and is less than 5:00 to 1:00 and (b) the
Acquisition Pro Forma Debt to Total Capitalization Ratio for such Acquisition is
positive and is equal to or less than 0.50 to 1.00.
"Consolidated Adjusted Funded Debt" means all Consolidated Funded Debt
minus (i) Guaranteed Amounts to the extent included in determining such
Consolidated Funded Debt, plus (ii) Additional Funded Debt; provided, however,
that (A) no Funded Debt shall for purposes of this definition be included as
Consolidated Funded Debt if money sufficient to pay such Funded Debt in full
(either on the date of maturity expressed therein or on such earlier date as
such Funded Debt may be called for redemption) shall be held in trust for such
purpose by the trustee or proper depository under the instrument pursuant to
which such Funded Debt was issued, and (B) in the event of the issuance of
Funded Debt ("New Funded Debt"), for purposes of this definition there shall be
excluded from Consolidated Funded Debt at the time of such issuance and
thereafter:
(1) existing Funded Debt which is paid in full substantially
concurrently with the issuance of the New Funded Debt and out of proceeds
therefrom; and
(2) existing Funded Debt which is paid out of the proceeds from the
issuance of the New Funded Debt in compliance with the following:
(x) on the date of the issuance of the New Funded Debt (the "Issuance
Date") an amount from the proceeds sufficient to pay such existing Funded Debt
in full if called for redemption as hereinafter described shall be deposited in
an escrow account (the "Escrow Account") with a third party selected by the
Borrower with written instructions from the Borrower that the proceeds shall be
used for such purpose;
(y) not later than the 30th day following the Issuance Date, such
existing Funded Debt shall be called for redemption on a date which is not later
than the 70th day following the Issuance Date; and
(z) on a date which is not later than the 70th day following the
Issuance Date, such existing Funded Debt shall be paid in full from the proceeds
deposited in the Escrow Account.
As used in this definition, the term "Additional Funded Debt" shall mean at any
time an amount equal to the excess, if any, of (i) the lowest daily average of
the outstanding aggregate principal amount of Consolidated Current Debt minus
Guaranteed Amounts to the extent included in determining such Consolidated
Current Debt for any period of 30 consecutive days during the 12 month period
immediately preceding the date of determination, over (ii) $10,000,000.
"Consolidated Adjusted Total Capitalization" means, as of the date of any
determination thereof, the sum of (i) the aggregate principal amount of
Consolidated Adjusted Funded Debt outstanding as of such date, plus (ii)
Consolidated Net Worth as of such date.
"Consolidated Current Debt" means all Current Debt of the Borrower and its
Subsidiaries determined on a consolidated basis.
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"Consolidated Debt" means all Debt of the Borrower and its Subsidiaries,
determined on a consolidated basis.
"Consolidated Funded Debt" means all Funded Debt of the Borrower and its
Subsidiaries determined on a consolidated basis.
"Consolidated Net Income" for any period means the gross revenues of the
Borrower and its Subsidiaries for such period less all expenses and other proper
charges (including taxes on income), determined on a consolidated basis after
eliminating earnings (except to the extent provided in clause (f) below) or
losses attributable to outstanding Minority Interests, but excluding in any
event:
(a) any gains or losses on the sale or other disposition of Investments
or fixed or capital assets, and any taxes on such excluded gains and any tax
deductions or credits on account of any such excluded losses;
(b) the proceeds of any life insurance policy;
(c) net earnings and losses of any Subsidiary of the Borrower accrued
prior to the date it became a Subsidiary of the Borrower;
(d) net earnings and losses of any Person (other than a Subsidiary of
the Borrower), substantially all the assets of which have been acquired in any
manner by the Borrower or any Subsidiary of the Borrower, realized by such
Person prior to the date of such acquisition;
(e) net earnings and losses of any Person (other than a Subsidiary of
the Borrower) with which the Borrower or a Subsidiary of the Borrower shall have
consolidated or which shall have merged into or with the Borrower or a
Subsidiary of the Borrower prior to the date of such consolidation or merger;
(f) net earnings of any business entity (other than a Subsidiary of the
Borrower) in which the Borrower or any Subsidiary of the Borrower has an
ownership interest unless such net earnings shall have actually been received by
the Borrower or such Subsidiary in the form of cash distributions;
(g) any portion of the net earnings of any Subsidiary of the Borrower
which for any reason is unavailable for payment of dividends to the Borrower or
any other Subsidiary of the Borrower;
(h) earnings resulting from any reappraisal, revaluation or write-up of
assets;
(i) any deferred or other credit representing any excess of the equity
in any Subsidiary of the Borrower at the date of acquisition thereof over the
amount invested in such Subsidiary;
(j) any gain arising from the acquisition of any Securities of the
Borrower or any Subsidiary of the Borrower;
(k) any reversal of any contingency reserve, except to the extent that
provision for such contingency reserve shall have been made from income arising
during such period; and
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(l) any items other than those described in clauses (a) through (k)
above of this definition which are properly classified under GAAP as
extraordinary items.
"Consolidated Net Worth" means, as of the date of any determination
thereof, the stockholders' capital and surplus of the Borrower as of such date
determined in accordance with GAAP.
"Controlled Group" means all members of a controlled group of corporations
and all trades or businesses (whether or not incorporated) under common control
which, together with the Borrower, are treated as a single employer under
Section 414 of the Code.
"Continue", "Continuation", and "Continued" shall refer to the continuation
pursuant to Section 2.02(b) of Advances of one Type as Advances of the same Type
from one Interest Period to the next Interest Period.
"Convert", "Conversion", and "Converted" shall refer to a conversion
pursuant to Section 2.02(b) of one Type of Advance into another Type of Advance.
"Credit Documents" means this Agreement, the Notes, the Subsidiary Guaranty
Agreement, the Notices of Borrowing, the Notices of Conversion or Continuation
and each other agreement, instrument or document executed by the Borrower or any
of its Subsidiaries at any time in connection with this Agreement.
"Credit Obligations" means all principal, interest, fees, reimbursements,
indemnifications and other amounts now or hereafter owed by the Borrower or any
of its Subsidiaries to any of the Banks or the Administrative Agent under this
Agreement and the other Credit Documents and any increases, extensions and
rearrangements of those obligations.
"Credit Parties" means the Borrower and each of its Subsidiaries.
"Current Debt" of any Person means, as of the date of any determination
thereof, (i) all Indebtedness of such Person for borrowed money outstanding as
of such date other than Funded Debt of such Person and (ii) Guaranties by such
Person of Current Debt of others outstanding as of such date.
"Debt" of any Person means all Current Debt and all Funded Debt of such
Person.
"Default" means (a) an Event of Default or (b) any event or condition which
with notice or lapse of time or both would, unless cured or waived, become an
Event of Default.
"Dollars" and "$" means lawful money of the United States of America.
"Eligible Assignee" means (a) a Bank, (b) an Affiliate of a Bank, and (c)
any other Person approved by the Administrative Agent and, in the case of (b)
and (c), unless an Event of Default has occurred and is continuing at the time
any assignment is effected in accordance with Section 9.06, the Borrower, such
approval not to be unreasonably withheld or delayed by the Administrative Agent
or the Borrower and such approval to be deemed given by the Borrower if no
objection is received by the assigning Bank and the Administrative Agent from
the Borrower within three Business Days after notice of such proposed assignment
has been provided by the assigning Bank to the Borrower; provided, however, that
neither the Borrower nor a Subsidiary of the Borrower shall qualify as an
Eligible Assignee.
"Environment" shall have the meaning set forth in 42 U.S.C. Section
9601(8).
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"Environmental" means associated with or relating to the Environment, any
Hazardous Substance or any Environmental Law.
"Environmental Claim" means any third party (including governmental
agencies and employees) action, lawsuit, claim, demand, regulatory action or
proceeding, order, decree, consent agreement or notice of potential or actual
responsibility or violation which seeks to impose liability under any
Environmental Law.
"Environmental Law" means all Legal Requirements arising from, relating to,
or in connection with the Environment, health or safety, including CERCLA and
Legal Requirements relating to (a) pollution, contamination, injury,
destruction, loss, protection, cleanup, remediation, reclamation or restoration
of the air, surface water, groundwater, land surface, subsurface strata or other
natural resources; (b) manufacture, handling, generation, treatment, processing,
recycling, reclamation, cleanup, storage, disposal or transportation of
hazardous or toxic materials, substances or wastes; (c) exposure to pollutants,
contaminants, or hazardous or toxic substances, materials or wastes; or (d) the
safety or health of employees.
"Environmental Permit" means any permit, license, order, approval or other
authorization under Environmental Law.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time.
"Eurodollar Rate" means, for any Eurodollar Rate Advance for any Interest
Period therefor, the rate per annum (rounded upwards, if necessary, to the
nearest 1/100 of 1%) appearing on Telerate Page 3750 (or any successor page) as
the London interbank offered rate for deposits in Dollars at approximately 11:00
a.m. (London time) two Business Days prior to the first day of such Interest
Period for a term comparable to such Interest Period. If for any reason such
rate is not available, the term "Eurodollar Rate" means, for any Eurodollar Rate
Advance for any Interest Period therefor, the rate per annum (rounded upwards,
if necessary, to the nearest 1/100 of 1%) appearing on Reuters Screen LIBO Page
as the London interbank offered rate for deposits in Dollars at approximately
11:00 a.m. (London time) two Business Days prior to the first day of such
Interest Period for a term comparable to such Interest Period; provided,
however, if more than one rate is specified on Reuters Screen LIBO Page, the
applicable rate shall be the arithmetic mean of all such rates (rounded upwards,
if necessary, to the nearest 1/100 of 1%).
"Eurodollar Rate Advance" means an Advance which bears interest at rates
based upon the Adjusted Eurodollar Rate as provided in Section 2.06(b).
"Eurodollar Rate Reserve Percentage" means, at any time, the maximum rate
at which reserves (including any marginal, special, supplemental, or emergency
reserves) are required to be maintained under regulations issued from time to
time by the Board of Governors of the Federal Reserve System (or any successor)
by member banks of the Federal Reserve System against "Eurocurrency liabilities"
(as such term is used in Regulation D). Without limiting the effect of the
foregoing, the Eurodollar Rate Reserve Percentage shall reflect any other
reserves required to be maintained by such member banks with respect to (a) any
category of liabilities which includes deposits by reference to which the
Adjusted Eurodollar Rate is to be determined or (b) any category of extensions
of credit or other assets which include Eurodollar Rate Advances. The Adjusted
Eurodollar Rate shall be adjusted automatically on and as of the effective date
of any change in the Eurodollar Rate Reserve Percentage.
"Events of Default" has the meaning set forth in Section 7.01.
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"Federal Funds Rate" means, for any day, the rate per annum (rounded upwards, if
necessary, to the nearest 1/100 of 1%) equal to the weighted average of the
rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers on such day, as published by
the Federal Reserve Bank of New York on the Business Day next succeeding such
day; provided that (a) if such day is not a Business Day, the Federal Funds Rate
for such day shall be such rate on such transactions on the next preceding
Business Day as so published on the next succeeding Business Day, and (b) if no
such rate is so published on such next succeeding Business Day, the Federal
Funds Rate for such day shall be the average rate charged to the Administrative
Agent (in its individual capacity) on such day on such transactions as
determined by the Administrative Agent.
"Federal Reserve Board" means the Board of Governors of the Federal Reserve
System or any of its successors.
"Financial Statements" means the balance sheet and related statements of
income and cash flow dated June 30, 1999 referred to in Section 4.05(a), copies
of which have been delivered to the Administrative Agent and the Banks.
"Fixed Charges" for any period means on a consolidated basis the sum of all
Interest Charges for such period on all Debt (including the interest component
of Rentals on Capitalized Leases) of the Borrower and its Subsidiaries.
"Fund," "Trust Fund" or "Superfund" means the Hazardous Substance Response
Trust Fund established pursuant to 42 U.S.C. Section 9631 (1988) and the
Post-closure Liability Trust Fund, established pursuant to 42 U.S.C. Section
9641 (1988), which statutory provisions have been amended or repealed by the
Superfund Amendments and Reauthorization Act of 1986, and the "Fund," "Trust
Fund" or "Superfund" that are now maintained pursuant to Section 9507 of the
Code.
"Funded Debt" of any Person means (A) for all purposes other than Section
6.11, (i) all Indebtedness of such Person for borrowed money or which has been
incurred in connection with the acquisition of assets in each case having a
final maturity of one or more than one year from the date of origin thereof (or
which is renewable or extendible at the option of the obligor for a period or
periods of one or more than one year from the date of origin), including all
principal payments in respect thereof that are required to be made within one
year from the date of any determination of Funded Debt, whether or not the
obligation to make such payments shall constitute a current liability of the
obligor under GAAP; provided, that any notes of such Person evidencing
Indebtedness of such Person which when issued constitute a current liability of
such Person under GAAP shall not be included as Funded Debt of such Person, (ii)
all Capitalized Rentals of such Person, and (iii) all Guaranties by such Person
of Funded Debt of others and (B) for the purpose of Section 6.11, "Funded Debt"
means (i) all Indebtedness of such Person for borrowed money or which has been
incurred in connection with the acquisition of assets, (ii) all Capitalized
Rentals of such Person, and (iii) all Guaranties by such Person of Funded Debt
of others
"GAAP" means United States generally accepted accounting principles as in
effect from time to time, applied on a basis consistent with the requirements of
Section 1.03.
"Governmental Authority" means any foreign Governmental Authority, the
United States of America, any state of the United States of America and any
subdivision of any of the foregoing, and any agency, department, commission,
board, authority, government, instrumentality, bureau or court having
jurisdiction over any Bank, the Borrower, the Borrower's Subsidiaries or any of
their respective Properties.
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"Governmental Proceedings" means any action or proceedings by or before any
Governmental Authority, including the promulgation, enactment or entry of any
Legal Requirement.
"Guaranteed Amounts" means the aggregate amounts of Guaranties of the
Borrower and its Subsidiaries of Debt of others determined on a consolidated
basis.
"Guaranties" by any Person means all obligations (other than endorsements
in the ordinary course of business of negotiable instruments for deposit or
collection) of such Person guaranteeing, or in effect guaranteeing, any
Indebtedness, dividend or other obligation of any other Person (the "primary
obligor") in any manner, whether directly or indirectly, including all
obligations incurred through an agreement, contingent or otherwise, by such
Person (i) to purchase such Indebtedness or obligation or any property or assets
constituting security therefor, (ii) to advance or supply funds (x) for the
purchase or payment of such Indebtedness or obligation, (y) to maintain working
capital or other balance sheet condition or otherwise to advance or make
available funds for the purchase or payment of such Indebtedness or obligation,
(iii) to lease property or to purchase Securities or other property or services
primarily for the purpose of assuring the owner of such Indebtedness or
obligation of the ability of the primary obligor to make payment of the
Indebtedness or obligation, or (iv) otherwise to assure the owner of the
Indebtedness or obligation of the primary obligor against loss in respect
thereof. For the purposes of all computations made under this Agreement, a
Guaranty in respect of any Indebtedness for borrowed money shall be deemed to be
Indebtedness equal to the principal amount of such Indebtedness for borrowed
money which has been guaranteed, and a Guaranty in respect of any other
obligation or liability or any dividend shall be deemed to be Indebtedness equal
to the maximum aggregate amount of such obligation, liability or dividend which
has been guaranteed.
"Guarantor" means each Subsidiary of the Borrower that has entered into the
Subsidiary Guaranty Agreement.
"Hazardous Substance" or "Hazardous Waste" means any substance, material,
contaminant or waste that is regulated by any Governmental Authority and any
material that is defined as a "hazardous waste," "hazardous substance,"
"hazardous material," "restricted hazardous waste," "toxic waste" or "toxic
pollutant" under any Environmental Law.
"Immaterial Subsidiaries" are Subsidiaries that (a) are listed on Schedule
5.08 and (b) have no assets or Indebtedness.
"Indebtedness" of any Person means all obligations of such Person which in
accordance with GAAP shall be classified upon a balance sheet of such Person as
liabilities of such Person, and in any event shall include all (i) obligations
of such Person for borrowed money or which has been incurred in connection with
the acquisition of Property, (ii) obligations secured by any Lien upon Property
owned by such Person, even though such Person has not assumed or become liable
for the payment of such obligations, (iii) obligations created or arising under
any conditional sale or other title retention agreement with respect to property
acquired by such Person, notwithstanding the fact that the rights and remedies
of the seller, lender or lessor under such agreement in the event of default are
limited to repossession or sale of property, (iv) Capitalized Rentals and (v)
Guaranties of obligations of others of the character referred to in this
definition.
"Interest Charges" for any period means all interest and all amortization
of debt discount and expense on any particular Indebtedness for which such
calculations are being made.
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"Interest Period" means, for each Eurodollar Rate Advance comprising part
of the same Borrowing, the period commencing on the date of such Advance or the
date of the Conversion of any Base Rate Advance into such an Advance and ending
on the last day of the period selected by the Borrower pursuant to the
provisions below and Section 2.02 and, thereafter, each subsequent period
commencing on the last day of the immediately preceding Interest Period and
ending on the last day of the period selected by the Borrower pursuant to the
provisions below and Section 2.02. The duration of each such Interest Period
shall be one, two, three or six months, in each case as the Borrower may, upon
notice received by the Administrative Agent not later than 11:00 a.m.
(Charlotte, North Carolina time) on the third Business Day prior to the first
day of such Interest Period, select; provided, however, that:
(a) the Borrower may not select any Interest Period for any Advance
which ends after the Maturity Date;
(b) Interest Periods commencing on the same date shall be of the same
duration for all Advances;
(c) whenever the last day of any Interest Period would otherwise occur
on a day other than a Business Day, the last day of such Interest Period shall
be extended to occur on the next succeeding Business Day, provided that if such
extension would cause the last day of such Interest Period to occur in the next
following calendar month, the last day of such Interest Period shall occur on
the next preceding Business Day; and
(d) any Interest Period which 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 calendar month in which it would have ended if there were a
numerically corresponding day in such calendar month.
"Investments" means all investments, in cash or by delivery of Property,
made, directly or indirectly, in any Person, whether by acquisition of shares of
capital stock, indebtedness or other obligations or Securities or by loan,
advance, capital contribution or otherwise; provided, however, that
"Investments" shall not mean or include routine investments in property to be
used or consumed in the ordinary course of business.
"Legal Requirement" means any law, statute, ordinance, decree, requirement,
order, judgment, rule, regulation (or official interpretation of any of the
foregoing) of, and the terms of any license or permit issued by, any
Governmental Authority, including Regulation U and Regulation X.
"Lien" means any mortgage, lien, pledge, charge, deed of trust, security
interest, trust receipt, lease, consignment, bailment or encumbrance to secure
or provide for the payment of any obligation of any Person, whether arising by
contract, operation of law or otherwise (including the interest of a vendor or
lessor under any conditional sale agreement, Capitalized Lease or other title
retention agreement). The term "Lien" shall include reservations, exceptions,
encroachments, easements, rights-of-way, covenants, conditions, restrictions,
leases and other title exceptions and encumbrances (including, with respect to
stock, stockholder agreements, voting trust agreements, buy-back agreements and
all similar arrangements) affecting property.
"Majority Banks" means, at any time, Banks holding 50.1% or more of the
then aggregate unpaid principal amount of the Advances owed to the Banks at such
time, or, if no such principal amount is then outstanding, Banks having 50.1% or
more of the aggregate amount of the Commitments at such time.
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"Mandatory Prepayment Debt" means all Debt of the Borrower or any of its
Subsidiaries incurred after the date hereof, except (i) Indebtedness incurred
under this Agreement, (ii) the outstanding principal amount of borrowings by the
Borrower incurred under its bank lines of credit existing on the date hereof
that do not exceed $110,000,000 in the aggregate at any time (but including as
Mandatory Prepayment Debt such borrowings to the extent the outstanding
principal amount of borrowings exceed $110,000,000), (iii) Conforming
Acquisition Debt incurred after the date hereof not exceeding $40,000,000 in the
aggregate (including both outstanding Conforming Acquisition Debt and Conforming
Acquisition Debt that has been paid), (iv) Other Acquisition Debt incurred after
the date hereof not exceeding $10,000,000 in the aggregate (including both
outstanding Other Acquisition Debt and Other Acquisition Debt that has been
paid) and (v) other Debt of Subsidiaries not prohibited by Section 6.11.
"Material Adverse Effect" means a material adverse effect on (i) the
business, assets, liabilities (actual or contingent), operations, condition
(financial or otherwise), prospects or results of operations of the Borrower
individually (including its stock ownership) or the Borrower and its
Subsidiaries, taken as a whole, (ii) the Borrower's ability to perform its
obligations under any of the Credit Documents or (iii) the ability of the
Borrower's Subsidiaries, taken as a whole, to perform their obligations under
the Credit Documents.
"Maturity Date" means the earlier of (a) the 364th day after the first day
that any Advance is made and (b) April 5, 2001.
"Material Subsidiary" means each Subsidiary that is not an Immaterial
Subsidiary.
"Maximum Rate" means the maximum nonusurious interest rate under applicable
law.
"Minority Interests" means any shares of stock of any class of a Subsidiary
of the Borrower (other than directors' qualifying shares as required by law)
that are not owned by the Borrower or any of its Subsidiaries. Minority
Interests shall be valued by valuing Minority Interests constituting preferred
stock at the voluntary or involuntary liquidating value of such preferred stock,
whichever is greater, and by valuing Minority Interests constituting common
stock at the book value of capital and surplus applicable thereto adjusted, if
necessary, to reflect any changes from the book value of such common stock
required by the foregoing method of valuing Minority Interests in preferred
stock.
"Xxxxx'x" means Xxxxx'x Investors Service, Inc., or any successor to its
business.
"Multiemployer Plan" means a "multiemployer plan" as defined in Section
4001(a)(3) of ERISA to which the Borrower or any member of the Controlled Group
is making or accruing an obligation to make contributions, or has within any of
the preceding five plan years made or accrued an obligation to make
contributions.
"Net Cash Proceeds" means, with respect to the issuance of any capital
stock or other equity security (including any security convertible into or
exchangeable for any capital stock or other equity security), all cash received
after the date hereof by the Borrower or any of its Subsidiaries from the
issuance of such capital stock or other equity security (including any security
convertible into or exchangeable for any capital stock or other equity security)
after payment of (i) all underwriter's or placement agent's discounts and fees
and (ii) reasonable legal and accounting fees of the Borrower or such Subsidiary
incurred in connection with such issuance; provided, that Net Cash Proceeds
shall not include any cash received by the Borrower pursuant to the issuance by
the Borrower of its common stock in accordance with its dividend reinvestment
plan as such plan exists on the date hereof.
-11-
"Net Income" means, for any period, the Borrower's net income for such
period, as determined in accordance with GAAP.
"Net Income Available for Fixed Charges" for any period means the sum of
(i) Consolidated Net Income during such period plus (ii) to the extent deducted
in determining such Consolidated Net Income, the sum of (a) all provisions for
any federal, state or other income taxes made by the Borrower and its
Subsidiaries during such period plus (b) Fixed Charges of the Borrower and its
Subsidiaries during such period, provided, that if the Borrower during any
period recognizes or realizes an increase of Consolidated Net Income from its
past sale or disposition of the NOARK Pipeline System (over the amount, whether
positive or negative, which would otherwise be calculated for Consolidated Net
Income without giving effect to such sale or disposition) for such period, for
purposes of calculating Net Income Available for Fixed Charges for such period,
Consolidated Net Income used in clause (i) of this definition shall be reduced
by the amount of such increase.
"NOARK Pipeline System" means NOARK Pipeline System, Limited Partnership, a
limited partnership organized under the laws of Arkansas.
"Note" means a promissory note of the Borrower payable to the order of any
Bank, in substantially the form of Exhibit C, evidencing indebtedness of the
Borrower to such Bank resulting from Advances owing to such Bank.
"Notice of Borrowing" means a notice of borrowing in the form of Exhibit D
signed by the chief executive officer, chief financial officer or controller of
the Borrower.
"Notice of Conversion or Continuation" means a notice of conversion or
continuation in the form of Exhibit E signed by the chief executive officer,
chief financial officer or controller of the Borrower.
"Operative Documents" means the Purchase Agreement and all the documents
related thereto or described therein, including (a) the Letter of Credit (as
such term is defined by the Purchase Agreement), (b) the severance agreements
described in Section 5.3(c)(iv) of the Purchase Agreement, (c) the General
Assignment (as defined in the Purchase Agreement), (d) the Tax Agreement (as
defined in the Purchase Agreement) and (e) all amendments, supplements, waivers
and modifications to any Operative Document.
"Other Acquisition Debt" means Acquisition Debt that is not Conforming
Acquisition Debt.
"PBGC" means the Pension Benefit Guaranty Corporation or any entity
succeeding to any or all of its functions under ERISA.
"Permitted Liens" means all of the following Liens:
(a) Liens for taxes and assessments or governmental charges or levies
and Liens securing claims or demands of mechanics and materialmen, provided
payment thereof is not at the time required by Section 5.04.
(b) Liens of or resulting from any judgment or award, the time for the
appeal or petition for rehearing of which shall not have expired, or in respect
of which the Borrower or a Subsidiary of the Borrower shall at any time in good
faith be prosecuting an appeal or proceeding for a review and in respect of
which a stay of execution pending such appeal or proceeding for review shall
have been secured;
-12-
(c) Liens incidental to the conduct of business or the ownership of
properties and assets (including Liens in connection with worker's compensation,
unemployment insurance and other like laws, warehousemen's and attorneys' liens
and statutory landlords' liens) and Liens to secure the performance of bids,
tenders or trade contracts, or to secure statutory obligations, surety or appeal
bonds or other Liens of like general nature incurred in the ordinary course of
business and not in connection with the borrowing of money; provided in each
case, the obligation secured is not overdue or, if overdue, is being contested
in good faith by appropriate actions or proceedings; and provided further, that
the aggregate fair market value of all assets that are subject to any Lien in
excess of $5,000,000, not including inchoate tax liens relating to unpaid taxes,
which are not overdue securing any appeal bond shall not exceed $10,000,000 at
any time;
(d) minor survey exceptions or minor encumbrances, easements or
reservations, or rights of others for rights-of-way, utilities and other similar
purposes, or zoning or other restrictions as to the use of real properties,
which are necessary for the conduct of the activities of the Borrower and its
Subsidiaries or which customarily exist on properties of corporations engaged in
similar activities and similarly situated and which do not in any event
materially impair the operation of the business of the Borrower and its
Subsidiaries, taken as a whole;
(e) Liens securing Indebtedness of a Subsidiary of the Borrower to the
Borrower or to another Subsidiary of the Borrower;
(f) Liens existing as of June 30, 1999 and reflected in Schedule
1.01(c);
(g) Liens incurred after the date hereof given to secure the payment of
the purchase price incurred in connection with the acquisition of fixed assets
useful and intended to be used in carrying on the business as of the date hereof
of the Borrower or a Subsidiary of the Borrower, including Liens existing on
such fixed assets (1) at the time of acquisition thereof or (2) at the time of
acquisition by the Borrower or a Subsidiary of the Borrower of any business
entity then owning such fixed assets (in the event of any such acquisition of a
business entity as used in this paragraph (g), the term "fixed assets" shall
mean and include any assets of such business entity), whether or not such
existing Liens were given to secure the payment of the purchase price of the
fixed assets to which they attach so long as they were not incurred, extended or
renewed in contemplation of such acquisition, provided that (x) the Lien shall
attach solely to the fixed assets acquired or purchased, (y) at the time of
acquisition of such fixed assets, the aggregate amount remaining unpaid on all
Debt secured by Liens on such fixed assets whether or not assumed by the
Borrower or a Subsidiary of the Borrower shall not exceed an amount equal to 90%
(or 100% in the case of Capitalized Leases) of the lesser of the total purchase
price or fair market value at the time of acquisition of such fixed assets (as
determined in good faith by the (A) president or executive vice president of the
Borrower, or (B) Board of Directors of the Borrower, or (C) if the fixed assets
are being acquired by a Subsidiary of the Borrower, by the Board of Directors of
such Subsidiary), and (z) all such Debt shall have been permitted under the
limitations provided in Sections 6.09 and 6.11;
(h) Liens on assets constituting part or all of the project in a
project financing of the Borrower or a Subsidiary of the Borrower; provided,
that (x) any Debt incurred to finance any such project shall be nonrecourse to
the Borrower and its Subsidiaries (other than a Subsidiary all the assets of
which constitute assets relating to such project) with recourse being limited to
the assets which constitute the project, and (y) immediately after giving effect
to any such project financing, no Default shall have occurred which shall then
be continuing;
-13-
(i) any extension, renewal or replacement of any Lien permitted by the
preceding paragraphs (f) and (g) of this definition in respect of the same
property theretofore subject to such Lien in connection with the extension,
renewal or replacement of the Debt secured thereby; provided that (1) such Lien
shall attach solely to the same such property, (2) such extension, renewal or
replacement of such Debt shall be without increase in the principal remaining
unpaid as of the date of such extension, renewal or replacement, and (3) the
Debt secured by such Lien shall have been permitted under the limitations
provided in Sections 6.09 and 6.11;and
(j) Liens in addition to those set forth in paragraphs (a) through (i)
of this definition securing Debt of the Borrower or any Subsidiary of the
Borrower, provided that any such Debt shall have been permitted under the
applicable limitations provided in Sections 6.09 and 6.11.
"Person" means an individual, partnership, corporation (including a
business trust), joint stock company, trust, unincorporated association, joint
venture, limited liability company, other entity, any government or any
political subdivision or agency thereof or any trustee, receiver, custodian or
similar official.
"Plan" means an employee benefit plan (other than a Multiemployer Plan)
which is (or, in the event that any such plan has been terminated within five
years after a transaction described in Section 4069 of ERISA, was) maintained
for employees of the Borrower or any member of the Controlled Group and covered
by Title IV of ERISA.
"Preferred Stock" means the following series and shares of preferred stock
issued by SEMCO Gas: Series A Cumulative Preferred Stock, 15,000 shares, Series
B Cumulative Preferred Stock, 10,000 shares, Series C Cumulative Preferred
Stock, 4,000 shares and Series D Cumulative Preferred Stock, 2,000 shares.
"Prime Rate" means the per annum rate of interest established from time to
time by Bank of America as its prime rate, which rate may not be the lowest rate
of interest charged by Bank of America to its customers.
"Property" or "asset" (in each case, whether or not the term "property" or
"asset" is capitalized) of any Person means any property or assets (whether
real, personal or mixed, tangible or intangible) of such Person.
"Pro Rata Share" means, at any time with respect to any Bank, either (a)
the ratio (expressed as a percentage) of such Bank's Commitments at such time to
the aggregate Commitments at such time, (b) if the Commitments have been
terminated, the ratio (expressed as a percentage) of such Bank's aggregate
outstanding Advances at such time to the aggregate outstanding Advances of all
the Banks at such time, or (c) if no Advances are then outstanding and no
Commitments then in effect, the ratio (expressed as a percentage) of the
aggregate principal amount of such Bank's Advances when most recently
outstanding to the aggregate principal amount of all Advances when most recently
outstanding.
"Purchase Agreement" means the Purchase and Sale Agreement dated July 15,
1999 among Ocean Energy Inc., a Texas corporation, and SEMCO Energy, Inc., and
any amendment, supplement or modification thereto or waiver thereof if such
amendment, supplement, modification or waiver is made in accordance with Section
6.10.
-14-
"Rating Level" means the applicable category of rating level contained in
Schedule 1.01(b) which is based on the rating of the Borrower's senior unsecured
long-term debt as classified by Moody's or S&P and which shall be the highest
(subject, however, to the first footnote on Schedule 1.01(b)) applicable Rating
Level I, Rating Level II, Rating Level III or Rating Level IV, as the case may
be, as set forth in Schedule 1.01(b) (with Rating Level I being the highest and
Rating Level IV being the lowest).
"Register" has the meaning set forth in Section 9.06(b).
"Regulation U" means Regulation U of the Federal Reserve Board, as from
time to time in effect, and all official rulings and interpretations thereunder
or thereof.
"Regulation X" means Regulation X of the Federal Reserve Board, as from
time to time in effect, and all official rulings and interpretations thereunder
or thereof.
"Release" shall have the meaning set forth in 42 U.S.C. Section 9601(22) or
under any other Environmental Law.
"Rentals" means as of the date of any determination thereof all fixed
payments (including as such all payments which the lessee is obligated to make
to the lessor on termination of the lease or surrender of the Property subject
to the lease) payable by the Borrower or a Subsidiary of the Borrower, as lessee
or sublessee under a lease of Property, but shall be exclusive of any amounts
required to be paid by the Borrower or a Subsidiary of the Borrower (whether or
not designated as rents or additional rents) on account of maintenance, repairs,
insurance, taxes and similar charges. Fixed rents under any so-called
"percentage leases" shall be computed solely on the basis of the minimum rents,
if any, required to be paid by the lessee regardless of sales volume or gross
revenues.
"Reportable Event" means (i) a "reportable event," as such term is defined
in Section 4043 of ERISA (other than a "reportable event" not subject to the
provision for 30-day notice to the PBGC), (ii) the satisfaction of the
conditions of subsection (l) of Section 4043(b) of ERISA (without regard to
subsection (2) of such Section) with respect to a contributing sponsor, as
defined in Section 4001(a)(13) of ERISA, of a Plan, and the reasonable
expectation of the occurrence of an event described in paragraph (9), (10),
(11), (12) or (13) of Section 4043(c) of ERISA with respect to such Plan within
the following 30 days; or (iii) an event described in Section 4062(e) of ERISA.
"Response" shall have the meaning set forth in 42 U.S.C. Section 9601(25)
or under any other Environmental Law.
"Responsible Officer" of any Person means the chief executive officer, the
president, the chief financial officer, any senior or executive vice president,
the controller, the treasurer or the secretary of such Person.
"Restricted Payment" means any direct or indirect dividend, distribution or
other payment of any kind or character (whether in cash, securities or other
property and whether pursuant to a merger or consolidation or otherwise) (i) in
respect of any partnership interest, any class of capital stock or any other
ownership interest or to the holders, as such, of any partnership interest, any
class of capital stock or any other ownership interest or (ii) in consideration
for or otherwise in connection with any retirement, purchase, redemption or
other acquisition of any partnership interest, any capital stock or any other
ownership interest or any options, warrants or rights to purchase or acquire any
partnership interest, any capital stock or any other ownership interest.
"Security" shall have the meaning as in Section 2(l) of the Securities Act
of 1933, as amended.
-15-
"SEMCO Gas" means SEMCO Energy Gas Company, a Michigan corporation.
"SEMCO Gas Capitalization Adjustment" means the capital contribution by the
Borrower to SEMCO Gas of less than $35,000,000 if after such capital
contribution the Consolidated Debt is unchanged.
"S&P" means Standard & Poor's Ratings Group, a division of XxXxxx-Xxxx,
Inc. on the date hereof, or any successor to its business.
"Subsidiary" of a Person means any corporation or other entity of which
more than 50% of the outstanding capital stock or other ownership interests
having ordinary voting power to elect a majority of the board of directors or
similar governing body of such corporation or other entity (irrespective of
whether at such time capital stock or other ownership interests of any other
class or classes of such corporation or other entity shall or might have voting
power upon the occurrence of any contingency) is at the time directly or
indirectly owned by such Person, by such Person and one or more Subsidiaries of
such Person or by one or more Subsidiaries of such Person.
"Subsidiary Guaranty Agreement" means the Subsidiary Guaranty Agreement
executed by the Subsidiaries of the Borrower for the benefit of the
Administrative Agent and the Banks in substantially the form of Exhibit B, as
each may be amended, modified, or supplemented from time to time.
"Temporary Subsidiaries" means SEMCO Gas and its Subsidiaries as of the
date hereof.
"Termination Date" means the earliest of (a) October 5, 2000, (b) the
earlier termination in whole of the Commitments pursuant to Section 2.04 or
Article VII and (c) the day after the initial Advance is made.
"Termination Event" means (a) a Reportable Event, or (b) the withdrawal of
the Borrower or any ERISA Affiliate from a Plan during a plan year in which it
was a "substantial employer", as such term is defined in Section 4001(a)(2) of
ERISA, or the incurrence of liability by the Borrower or any ERISA Affiliate
under Section 4064 of ERISA upon the termination of a Plan, or (c) the
distribution of a notice of intent to terminate a Plan pursuant to Section
4041(a)(2) of ERISA or the treatment of a Plan amendment as a termination under
Section 4041 of ERISA, or (d) the institution of proceedings to terminate a Plan
by the PBGC under Section 4042 of ERISA, or (e) any other event or condition
which might constitute grounds under Section 4042 of ERISA for the termination
of, or the appointment of a trustee to administer, any Plan.
"Type" has the meaning set forth in Section 1.04.
"Utility Subsidiary" means a Subsidiary which is a Public Utility Company
under Section 2(a)(5) of the Public Utility Holding Company Act.
"Year 2000 Problem" means the risk that computer applications used by the
Borrower or any of its Subsidiaries (or suppliers, vendors or customers of any
of the foregoing) may be unable to recognize and perform properly date-sensitive
functions involving certain dates before, on or after December 31, 1999.
Section 1.02. Computation of Time Periods. In this Agreement 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 words "to" and "until" each
means "to but excluding".
-16-
Section 1.03. Accounting Terms; Changes in GAAP.
(a) All accounting terms not specifically defined in this Agreement
shall be construed in accordance with GAAP applied on a consistent basis with
those applied in the preparation of the Financial Statements.
(b) Unless otherwise indicated, all financial statements of the
Borrower, all calculations for compliance with covenants in this Agreement and
all calculations of any amounts to be calculated under the definitions in
Section 1.01 shall be based upon the consolidated accounts of the Borrower and
its Subsidiaries in accordance with GAAP and consistent with the principles of
consolidation applied in preparing the Financial Statements.
Section 1.04. Types of Advances. Advances are distinguished by "Type".
The "Type" of an Advance refers to the determination whether such Advance is a
Eurodollar Rate Advance or Base Rate Advance, each of which constitutes a Type.
Section 1.05. Miscellaneous. Article, Section, Schedule and Exhibit
references are to Articles and Sections of and Schedules and Exhibits to this
Agreement, unless otherwise specified. The term "including" means "including,
without limitation,".
Section 1.06. Ratings. A rating, whether public or private, by S&P or
Xxxxx'x shall be deemed to be in effect on the date of announcement or
publication by S&P or Xxxxx'x, as the case may be, of such rating or, in the
absence of such announcement or publication, on the effective date of such
rating and will remain in effect until the announcement or publication of, or
(in the absence of such announcement or publication) the effective date of, any
change in such rating. In the event the standards for any rating by Xxxxx'x or
S&P are revised, or such rating is designated differently (such as by changing
letter designa-tions to numerical designations), then the references herein to
such rating shall be deemed to refer to the revised or redesig-nated rating for
which the standards are closest to, but not lower than, the standards at the
date hereof for the rating which has been revised or redesignated, all as
determined by the Majority Banks in good faith. Long-term debt supported by a
letter of credit, guaranty or other credit enhancement mechanism shall not be
considered as senior unsecured long-term debt. If either Xxxxx'x or S&P has at
any time more than one rating applicable to senior unsecured long-term debt of
any Person, the lowest such rating shall be applicable for purposes hereof. For
example, if Xxxxx'x rates some senior unsecured long-term debt of the Borrower
Baa1 and other such debt of the Borrower Baa2, the senior unsecured long-term
debt of the Borrower shall be deemed to be rated Baa2 by Xxxxx'x.
-17-
ARTICLE II
THE ADVANCES
Section 2.01. The Advances. Each Bank severally agrees, on the terms
and conditions set forth in this Agreement, to make a single Advance as a part
of the Borrowing to the Borrower on any Business Day during the period from the
date of this Agreement until the Termination Date in an amount not to exceed the
amount set opposite such Bank's name on the signature pages of this Agreement as
its Commitment, or if such Bank has entered into any Assignment and Acceptance,
set forth for such Bank as its Commitment in the Register maintained by the
Administrative Agent pursuant to Section 9.06(b), as such amount may be reduced
pursuant to Section 2.04 (such Bank's "Commitment"); provided, that no Advance
shall be required to be made except as a part of a Borrowing that is in an
aggregate amount of not less than $5,000,000, is in an integral multiple of
$1,000,000 and consists of Advances of the same Type made on the same day by the
Banks ratably according to their respective Commitments. Upon the Borrowing,
the Commitments of the Banks will terminate and no Bank will have any obligation
to make any additional Advance.
Section 2.02. Method of Borrowing.
(a) Notice. The Borrowing shall be made pursuant to a Notice of
Borrowing, given not later than (i) 11:00 a.m. (Charlotte, North Carolina time)
on the third Business Day before the date of the proposed Borrowing, in the case
of a Eurodollar Rate Advance or (ii) 10:00 a.m. (Charlotte, North Carolina time)
on the first Business Day before the date of the proposed Borrowing, in the case
of a Base Rate Advance, by the Borrower to the Administrative Agent, which shall
give to each Bank prompt notice of such proposed Borrowing by telecopier or
telex. The Notice of Borrowing shall be by telecopier or telex, confirmed
immediately in writing, specifying the requested (i) date of the Borrowing, (ii)
Type of Advances initially comprising the Borrowing, (iii) aggregate amount of
the Borrowing, and (iv) if the Borrowing is to be initially comprised of
Eurodollar Rate Advances, Interest Period for each such Advance. Each Bank
shall, before 11:00 a.m. (Charlotte, North Carolina time) on the date of the
Borrowing, make available for the account of its Applicable Lending Office to
the Administrative Agent at its address referred to in Section 9.02, or such
other location as the Administrative Agent may specify by notice to the Banks,
in same day funds, such Bank's Pro Rata Share of the Borrowing. After the
Administrative Agent's receipt of such funds and upon fulfillment of the
applicable conditions set forth in Article III, the Administrative Agent will
make such funds available to the Borrower at its account with the Administrative
Agent.
(b) Conversions and Continuations. In order to elect to Convert or
Continue the Advances under this Section, the Borrower shall deliver an
irrevocable Notice of Conversion or Continuation to the Administrative Agent at
the Administrative Agent's office no later than 11:00 a.m. (Charlotte, North
Carolina time) (i) on the Business Day of the proposed Conversion date in the
case of a Conversion to a Base Rate Advance and (ii) at least three Business
Days in advance of the proposed Conversion or Continuation date in the case of a
Conversion to, or a Continuation of, a Eurodollar Rate Advance; provided that
any Conversion or Continuation of Eurodollar Rate Advances shall occur on, and
only on, the last day of an Interest Period for Eurodollar Rate Advances (except
any Conversion pursuant to clause (B) of Section 2.07(e)). Each such Notice of
Conversion or Continuation shall be in writing or by telex or telecopier,
confirmed immediately in writing, specifying (i) the requested Conversion or
Continuation date (which shall be a Business Day), (ii) the amount and Type of
the Advance to be Converted or Continued, (iii) whether a Conversion or
Continuation is requested, and (iv) in the case of a Conversion to, or a
Continuation of, a Eurodollar Rate Advance, the requested Interest Period.
Promptly after receipt of a Notice of Conversion or Continuation under this
paragraph, the Administrative Agent shall provide each Bank with a copy thereof.
All Advances shall be Converted or Continued on the same terms.
(c) Certain Limitations. Notwithstanding anything in paragraphs (a)
and (b) above:
(i) the Borrower may not select Eurodollar Rate Advances at any time
when a Default has occurred and is continuing;
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(ii) (A) if any Bank shall, at least one Business Day before the date
of the making of the Borrowing or any date on which the Advances are to be
Converted into or Continued as Eurodollar Rate Advances, notify the
Administrative Agent that the introduction of or any change in or in the
interpretation of any law or regulation makes it unlawful, or that any central
bank or other Governmental Authority asserts that it is unlawful, for such Bank
or its Applicable Lending Office to perform its obligations under this Agreement
to make Eurodollar Rate Advances or to fund or maintain Eurodollar Rate
Advances, the right of the Borrower to select, or Convert the Advances into or
Continue the Advances as, Eurodollar Rate Advances shall be suspended until such
Bank shall notify the Administrative Agent that the circumstances causing such
suspension no longer exist or such Bank is replaced pursuant to Section 2.13,
and each Advance shall be a Base Rate Advance, and (B) such Bank agrees to use
commercially reasonable efforts (consistent with its internal policies and legal
and regulatory restrictions) to designate thereafter a different Applicable
Lending Office if the making of such designation would avoid the effect of this
paragraph and would not, in the reasonable judgment of such Bank, be otherwise
disadvantageous to such Bank;
(iii) if the Administrative Agent is unable to determine the Eurodollar
Rate for Eurodollar Rate Advances for any Interest Period, the right of the
Borrower to select, or Convert the Advances into or Continue the Advances as,
Eurodollar Rate Advances shall be suspended until the Administrative Agent shall
notify the Borrower and the Banks that the circumstances causing such suspension
no longer exist, and each Advance shall be a Base Rate Advance;
(iv) if the Majority Banks shall, at least one Business Day before the
date of the making of the Borrowing or any date on which the Advances are to be
Converted into or Continued as Eurodollar Rate Advances, notify the
Administrative Agent that the Eurodollar Rate for Eurodollar Rate Advances will
not adequately reflect the cost to such Banks of making or funding their
respective Eurodollar Rate Advances or that funds are not available for the
relevant Interest Period, the right of the Borrower to select, or Convert the
Advances into or Continue the Advances as, Eurodollar Rate Advances shall be
suspended until the Administrative Agent shall notify the Borrower and the Banks
that the circumstances causing such suspension no longer exist, and each Advance
shall be a Base Rate Advance; and
(v) if the Borrower shall fail to select the duration of any Interest
Period for any Eurodollar Rate Advances in accordance with the provisions
contained in the definition of Interest Period in Section 1.01 and paragraph (b)
above, the Administrative Agent will forthwith so notify the Borrower and the
Banks and such Advances will be made available to the Borrower on the date of
the Borrowing as Base Rate Advances or, if an existing Advance, Convert into
Base Rate Advances, as the case may be.
(d) Notices Irrevocable. Each Notice of Borrowing, Notice of
Conversion or Continuation, and Notice of Prepayment shall be irrevocable and
binding on the Borrower.
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(e) Administrative Agent Reliance. Unless the Administrative Agent
shall have received notice from a Bank before the date of the Borrowing that
such Bank will not make available to the Administrative Agent such Bank's Pro
Rata Share of the Borrowing, the Administrative Agent may assume that such Bank
has made its Pro Rata Share of the Borrowing available to the Administrative
Agent on the date of the Borrowing in accordance with paragraph (a) of this
Section 2.02 and the Administrative Agent may, in reliance upon such assumption,
make available to the Borrower on such date a corresponding amount. If and to
the extent that such Bank shall not have so made its Pro Rata Share of the
Borrowing available to the Administrative Agent, such Bank and the Borrower
severally agree to immediately repay to the Administrative Agent on demand such
corresponding amount, together with interest on such amount, for each day from
the date such amount is made available to the Borrower until the date such
amount is repaid to the Administrative Agent, at (i) in the case of the
Borrower, the interest rate applicable on such day to Advances comprising the
Borrowing and (ii) in the case of such Bank, the Federal Funds Rate for such
day. If such Bank shall repay to the Administrative Agent such corresponding
amount as provided above, such corresponding amount so repaid shall constitute
such Bank's Advance as part of the Borrowing for purposes of this Agreement even
though not made on the same day as the other Advances comprising the Borrowing.
(f) Bank Obligations Several. The failure of any Bank to make the
Advance to be made by it as part of the Borrowing shall not relieve any other
Bank of its obligation, if any, to make its Advance on the date of the
Borrowing. No Bank shall be responsible for the failure of any other Bank to
make the Advance to be made by such other Bank on the date of the Borrowing.
(g) Notes. The indebtedness of the Borrower to each Bank resulting
from Advances owing to such Bank shall be evidenced by a Note of the Borrower
payable to the order of such Bank in substantially the form of Exhibit C.
Section 2.03. Fees.
(a) Commitment Fees. The Borrower agrees to pay to the Administrative
Agent for the account of each Bank a commitment fee on the average daily amount
by which such Bank's Commitment exceeds such Bank's outstanding Advances from
the date of this Agreement in the case of each Bank listed on the signature
pages hereof and from the effective date specified in the Assignment and
Acceptance pursuant to which it became a Bank in the case of each other Bank
until the Termination Date. Such commitment fee is due quarterly in arrears on
the last day of each December, March, June, and September commencing December
31, 1999 and on the Termination Date. The rate per annum of such commitment fee
for each calendar quarter shall be determined as provided in Schedule 1.01(b)
based on the Rating Level in effect on the first day of such quarter, and for
the calendar quarter ending September 30, 1999 shall be determined using Rating
Level I set forth on Schedule 1.01(b).
(b) Other Fees. In addition to the commitment fees described in
Section 2.03(a), the Borrower agrees to pay to the Administrative Agent and the
Arranger the other fees described in the two letters, each dated July 1, 1999
from the Administrative Agent to the Borrower, on the dates required by such
letter.
Section 2.04. Reduction of the Commitments.
(a) The Borrower shall have the right, upon at least three Business
Days' irrevocable notice to the Administrative Agent, to terminate in whole or
reduce ratably in part the unused portion of the Commitments; provided that each
partial reduction shall be in the aggregate amount of $5,000,000 or an integral
multiple of $1,000,000 in excess thereof.
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(b) If the Commitments of the Banks have not already been terminated,
the Commitments will be ratably reduced (i) by an amount equal to 100% of the
Net Cash Proceeds from the issuance of any capital stock or other equity
security (including any security convertible into or exchangeable for any
capital stock or other equity security) and (ii) by an amount equal to the
principal amount of all Mandatory Prepayment Debt. Such reduction of the
Commitments will be effective (i) in the case of reductions pursuant to clause
(i) of this Section 2.04(b), on the date the Borrower or any of its Subsidiaries
receives any Net Cash Proceeds, and (ii) in the case of reductions pursuant to
clause (ii) of this Section 2.04(b), on the date that any Mandatory Prepayment
Debt is incurred.
(c) Any reduction or termination of the Commitments pursuant to this
Section 2.04 shall be permanent, with no obligation of the Banks to reinstate
such Commitments, and the commitment fees provided for in Section 2.03(a) shall
thereafter be computed on the basis of the Commitments, as so reduced.
Section 2.05. Repayment. Without limiting the Borrower's obligation to
make payments of interest in accordance with Section 2.06 and prepayments in
accordance with Section 2.07, the Borrower will, on the Maturity Date, repay the
then outstanding principal amount of, and all then accrued and unpaid interest
on, each Advance.
Section 2.06. Interest. The Borrower shall pay interest on the unpaid
principal amount of each Advance owed to each Bank, from the date of such
Advance until such principal amount shall be paid in full, at the following
rates per annum:
(a) Base Rate Advances. During such periods as such Advance is a Base
Rate Advance, a rate per annum equal at all times to the lesser of (i) the Base
Rate in effect from time to time and (ii) the Maximum Rate, payable quarterly on
the last day of each March, June, September and December during such periods and
on the date such Base Rate Advance shall be Converted or paid in full.
(b) Eurodollar Rate Advances. During such periods as such Advance is a
Eurodollar Rate Advance, a rate per annum equal at all times during each
Interest Period for such Advance to the lesser of (i) the sum of the Adjusted
Eurodollar Rate for such Interest Period for such Advance plus the Applicable
Margin per annum for such Interest Period and (ii) the Maximum Rate, payable on
the last day of such Interest Period and, if such Interest period has a duration
of more than three months, on the day which occurs during such Interest period
three months from the first day of such Interest Period.
(c) Default Rate. After the occurrence and during the continuance of
an Event of Default, all principal of the Advances and past due interest shall
bear interest at a rate per annum equal to the lesser of (i) the rate of
interest otherwise applicable plus 2% and (ii) the Maximum Rate.
Section 2.07. Prepayments.
(a) Right to Prepay. The Borrower shall have no right to prepay any
principal amount of any Advance except as provided in this Section 2.07. All
prepayments shall be without premium or penalty except as provided in Section
2.08.
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(b) Optional. The Borrower may elect to prepay any of the Advances,
after giving prior written notice to the Administrative Agent stating the
proposed date (which shall be a Business Day) and aggregate principal amount of
such prepayment, which notice shall be given by 11:00 a.m. (Charlotte, North
Carolina time) three Business Days (or, in the case of Base Rate Advances, one
Business Day) prior to such proposed date. If any such notice is given, the
Borrower shall prepay the Advances in whole or ratably in part in an aggregate
principal amount equal to the amount specified in such notice; provided,
however, that each partial payment shall be in an aggregate amount of at least
$5,000,000 and in an integral multiple of $1,000,000. Each payment under this
Section 2.07(b) will be applied to the remaining scheduled prepayments under
Section 2.07(c)(i) first to the earliest due payment until fully paid, then to
the remaining scheduled payment.
(c) Mandatory.
(i) Scheduled Repayments. The Borrower will repay the Advances ratably
(A) on the day that is 182 days following the date the Borrowing is made, in an
aggregate principal amount of $56,000,000 (or such lesser principal amount of
the Borrowing as may then be outstanding) and (B) on the day that is 273 days
following the date the Borrowing is made, in an aggregate amount of $56,000,000
(or such lesser principal amount of the Borrowing as may then be outstanding).
(ii) Other Repayments. The Borrower will repay the Advances ratably
(A) by an amount equal to 100% of the Net Cash Proceeds from the issuance of any
capital stock or other equity security (including any security convertible into
or exchangeable for any capital stock or other equity security) and (B) by an
amount equal to the principal amount of all Mandatory Prepayment Debt. Such
repayments will be due on the day after the date of receipt of such Net Cash
Proceeds or the day after the date such Mandatory Prepayment Debt is incurred,
as the case may be. Any repayment pursuant to this Section 2.07(c)(ii) shall
reduce the repayments required by Section 2.07(c)(i) first to the earliest due
payment until fully paid, then to the remaining scheduled payment.
(d) Each prepayment pursuant to this Section 2.07 shall be accompanied
by accrued interest on the amount prepaid to the date of such prepayment and
amounts, if any, required to be paid pursuant to Section 2.08 as a result of
such prepayment being made on such date.
(e) Illegality. If any Bank shall notify the Administrative Agent and
the Borrower that the introduction of or any change in or in the interpretation
of any law or regulation makes it unlawful, or that any central bank or other
Governmental Authority asserts that it is unlawful for such Bank or its
Applicable Lending Office to perform its obligations under this Agreement to
maintain any Eurodollar Rate Advances of such Bank then outstanding hereunder,
(i) the Borrower shall, no later than 11:00 a.m. (Charlotte, North Carolina
time), (A) if such Bank is not prohibited by law or regulation to maintain such
Eurodollar Rate Advances for the duration of the Interest Period, on the last
day of the Interest Period for each outstanding Eurodollar Rate Advance or (B)
if such Bank is prohibited by law or regulation to maintain such Eurodollar Rate
Advances for the duration of the Interest Period, on the third Business Day
following its receipt of such notice, Convert all of the Eurodollar Rate
Advances of all of the Banks then outstanding into Base Rate Advances in
accordance with Section 2.02(b) (except that such Conversion shall not be
required to be on the last day of an Interest Period) and pay all accrued
interest on the principal of the Advances to the date of such Conversion and
amounts, if any, required to be paid pursuant to Section 2.08 as a result of
such Conversion being made on such date, and (ii) the right of the Borrower to
Convert the Advances into Eurodollar Rate Advances shall be suspended until the
Bank which gave notice referred to above shall notify the Administrative Agent
that the circumstances causing such suspension no longer exist or such Bank is
replaced pursuant to Section 2.13.
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(f) Ratable Payments; Effect of Notice. Each payment of any Advance
pursuant to this Section 2.07 or any other provision of this Agreement shall be
made in a manner such that all Advances are paid in whole or ratably in part.
All notices given pursuant to this Section 2.07 shall be irrevocable and binding
upon the Borrower.
Section 2.08. Breakage Costs.
(a) Funding Losses. If the Notice of Borrowing specifies that the
Borrowing is to be initially comprised of Eurodollar Rate Advances, the Borrower
shall indemnify each Bank against any loss, cost or expense incurred by such
Bank as a result of any failure to fulfill on or before the date specified in
such Notice of Borrowing the applicable conditions set forth in Article III,
including any loss (excluding any loss of anticipated profits), cost or expense
incurred by reason of the liquidation or redeployment of deposits or other funds
acquired by such Bank to fund the Eurodollar Rate Advance to be made by such
Bank as part of the Borrowing when such Eurodollar Rate Advance, as a result of
such failure, is not made on such date.
(b) Prepayment Losses. If (i) any payment of principal of any
Eurodollar Rate Advance is made other than on the last day of the Interest
Period for such Advance as a result of any voluntary prepayment, payment
pursuant to Section 2.07(e), the acceleration of the maturity of the Notes or
for any other reason or (ii) the Borrower fails to make a principal or interest
payment with respect to any Eurodollar Rate Advance on the date such payment is
due and payable, then the Borrower shall, within 10 days of any written demand
sent by any Bank to the Borrower, pay to such Bank any amounts required to
compensate such Bank for any additional losses, costs or expenses which it may
reasonably incur as a result of such payment or nonpayment, including any loss
(excluding loss of anticipated profits), cost or expense incurred by reason of
the liquidation or reemployment of deposits or other funds acquired by any Bank
to fund or maintain such Advance. All such demands shall show in reasonable
detail the calculation of such losses.
(c) Calculation. A certificate of any Bank as to the amount owed to
such Bank pursuant to this Section 2.08 shall be conclusive and binding for all
purposes, absent manifest error. In determining such amount, a Bank may use
reasonable averaging and attribution methods. Such certificate shall be in
reasonable detail, but no Bank shall be required to disclose any confidential or
proprietary information therein.
Section 2.09. Increased Costs and Reduced Return.
(a) Eurodollar Rate Advances. If, after the date of this Agreement,
the adoption of any applicable law, rule, or regulation, or any change in any
applicable law, rule, or regulation, or any change in the interpretation or
administration thereof by any Governmental Authority, central bank or comparable
agency charged with the interpretation or administration thereof, or compliance
by any Bank (or its Applicable Lending Office) with any request or directive
(whether or not having the force of law) of any such Governmental Authority,
central bank or comparable agency:
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(i) shall subject such Bank (or its Applicable Lending Office) to any
tax, duty, or other charge with respect to any Eurodollar Rate Advances, its
Notes or its obligation to make Eurodollar Rate Advances or change the basis of
taxation of any amounts payable to such Bank (or its Applicable Lending Office)
under this Agreement or its Notes in respect of any Eurodollar Rate Advances
(other than franchise taxes or taxes imposed on the overall net income of such
Bank by the jurisdiction in which such Bank has its principal office or such
Applicable Lending Office);
(ii) shall impose, modify or deem applicable any reserve, special
deposit, assessment or similar requirement (other than by way of imposition or
increase of reserve requirements included in the Eurodollar Rate Reserve
Percentage) relating to any extensions of credit or other assets of, or any
deposits with or other liabilities or commitments of, such Bank (or its
Applicable Lending Office), including the Commitment of such Bank hereunder; or
(iii) shall impose on such Bank (or its Applicable Lending Office) or
on the London interbank market any other condition affecting this Agreement or
its Notes or any of such extensions of credit or liabilities or commitments;
and the result of any of the foregoing is to increase the cost to such Bank (or
its Applicable Lending Office) of making, Converting into, Continuing, or
maintaining any Eurodollar Rate Advances or to reduce any sum received or
receivable by such Bank (or its Applicable Lending Office) under this Agreement
or its Notes with respect to any Eurodollar Rate Advances, then the Borrower
shall pay to such Bank within three Business Days after written demand made by
such Bank such amount or amounts as will compensate such Bank for such increased
cost or reduction provided that such Bank shall only be entitled to recover
compensation for such increased cost or reduction incurred over a period of 120
days.
(b) Capital Adequacy. If, after the date of this Agreement, any Bank
shall have determined that the adoption of any applicable law, rule or
regulation regarding capital adequacy or any change therein or in the
interpretation or administration thereof by any Governmental Authority, central
bank or comparable agency charged with the interpretation or administration
thereof, or any request or directive regarding capital adequacy (whether or not
having the force of law) of any such Governmental Authority, central bank or
comparable agency, has the effect of reducing the rate of return on the capital
of such Bank or any corporation controlling such Bank as a consequence of such
Bank's obligations hereunder to a level below that which such Bank or such
corporation would have achieved but for such adoption, change, request or
directive (taking into consideration its policies with respect to capital
adequacy), then from time to time within three Business Days after written
demand by an affected Bank the Borrower shall pay to such Bank such additional
amount or amounts as will compensate such Bank for such reduction provided that
such Bank shall only be entitled to recover compensation for such increased cost
or reduction incurred over a period of 120 days.
(c) Mitigation. Each Bank will designate a different Applicable
Lending Office if such designation will avoid the need for, or reduce the amount
of, compensation pursuant to this Section 2.09 and will not, in the reasonable
judgment of such Bank, be otherwise disadvantageous to it. Any Bank claiming
compensation under this Section 2.09 shall furnish to the Borrower and the
Administrative Agent a statement setting forth the additional amount or amounts
to be paid to it hereunder which shall be conclusive in the absence of manifest
error. In determining such amount, such Bank may use any reasonable averaging
and attribution methods. Such statement shall be in reasonable detail, but no
Bank shall be required to disclose any confidential or proprietary information
therein.
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Section 2.10. Payments and Computations.
(a) Payments. All payments of principal, interest and other amounts to
be made by the Borrower under this Agreement and the other Credit Documents
shall be made to the Administrative Agent in Dollars, without setoff, deduction,
or counterclaim.
(b) Payment Procedures. The Borrower shall make each payment under
this Agreement and under the Notes not later than noon (Charlotte, North
Carolina time) on the day when due in Dollars to the Administrative Agent at the
location referred to in the Notes (or such other location as the Administrative
Agent shall designate in writing to the Borrower) in same day funds. The
Administrative Agent will promptly thereafter, and in any event prior to the
close of business on the day any timely payment is made, cause to be distributed
like funds relating to the payment of principal, interest or fees ratably (other
than amounts payable solely to the Administrative Agent or a specific Bank
pursuant to Section 2.03(b), 2.08, 2.09, 2.11, 9.04 or 9.07) in accordance with
each Bank's Pro Rata Share to the Banks for the account of their respective
Applicable Lending Offices, and like funds relating to the payment of any other
amount payable to any Bank to such Bank for the account of its Applicable
Lending Office, in each case to be applied in accordance with the terms of this
Agreement.
(c) Computations. All computations of interest based on the Base Rate
(except during such times as the Base Rate is determined pursuant to clause (a)
of the definition thereof) shall be made by the Administrative Agent on the
basis of a year of 365 or 366 days, as the case may be, and all computations of
interest based on the Eurodollar Rate, the Federal Funds Rate or, during such
times as the Base Rate is determined pursuant to clause (a) of the definition
thereof, the Base Rate and all computations of fees shall be made by the
Administrative Agent on the basis of a year of 360 days, in each case for the
actual number of days (including the first day, but excluding the last day)
occurring in the period for which such interest or fees are payable. Each
determination by the Administrative Agent of an interest rate shall be
conclusive and binding for all purposes, absent manifest error.
(d) Non-Business Day Payments. Whenever any payment shall be stated to
be due on a day other than a Business Day, such payment shall be made on the
next succeeding Business Day, and such extension of time shall in such case be
included in the computation of payment of interest or fees, as the case may be;
provided, however, that if such extension would cause payment of interest on or
principal of Eurodollar Rate Advances to be made in the next following calendar
month, such payment shall be made on the next preceding Business Day.
(e) Administrative Agent Reliance. Unless the Administrative Agent
shall have received written notice from the Borrower prior to the date on which
any payment is due to the Banks that the Borrower will not make such payment in
full, the Administrative Agent may assume that the Borrower has made such
payment in full to the Administrative Agent on such date and the Administrative
Agent may, in reliance upon such assumption, cause to be distributed to each
Bank on such date an amount equal to the amount then due such Bank. If and to
the extent the Borrower shall not have so made such payment in full to the
Administrative Agent, each Bank shall repay to the Administrative Agent
forthwith on demand such amount distributed to such Bank, together with
interest, for each day from the date such amount is distributed to such Bank
until the date such Bank repays such amount to the Administrative Agent, at the
Federal Funds Rate for such day, but not in excess of the Maximum Rate.
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Section 2.11. Taxes.
(a) No Deduction for Certain Taxes. Any and all payments by the
Borrower to or for the account of any Bank or the Administrative Agent hereunder
or under any other Credit Document shall be made free and clear of and without
deduction for any and all present or future taxes, duties, levies, imposts,
deductions, charges or withholdings, and all liabilities with respect to such
payments, excluding, in the case of each Bank and the Administrative Agent,
taxes imposed on its income, and franchise taxes imposed on it, by the
jurisdiction under the laws of which such Bank or the Administrative Agent, as
the case may be, is organized (all such non-excluded taxes, duties, levies,
imposts, deductions, charges, withholdings and liabilities with respect to such
payments 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 under
this Agreement or any other Credit Document to any Bank or the Administrative
Agent, (i) the sum payable shall be increased as necessary so that after making
all required deductions (including deductions applicable to additional sums
payable under this Section 2.11) such Bank or the Administrative Agent receives
an amount equal to the sum it would have received had no such deductions been
made, (ii) the Borrower shall make such deductions, (iii) the Borrower shall pay
the full amount deducted to the relevant taxation authority or other authority
in accordance with applicable law, and (iv) the Borrower shall furnish to the
Administrative Agent written evidence of payment thereof.
(b) Other Taxes. In addition, the Borrower agrees to pay any and all
present or future stamp or documentary taxes and any other excise or property
taxes or charges or similar levies which arise from any payment made under this
Agreement or any other Credit Document or from the execution or delivery of, or
otherwise with respect to, this Agreement or any other Credit Document
(hereinafter referred to as "Other Taxes").
(c) Indemnification. The Borrower agrees to indemnify each Bank and
the Administrative Agent for the full amount of Taxes and Other Taxes (including
any Taxes or Other Taxes imposed or asserted by any jurisdiction on amounts
payable under this Section 2.11) paid by such Bank or the Administrative Agent
(as the case may be) and any liability (including penalties, interest, and
expenses) arising therefrom or with respect thereto other than penalties,
interest and expenses caused solely by the gross negligence or willful
misconduct of such Bank provided that such Bank shall only be entitled to
recover compensation for such penalties, interest and expenses incurred over a
period of 120 days.
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(d) Foreign Bank Withholding Exemption. Each Bank organized under the
laws of a jurisdiction outside the United States, on or prior to the date of its
execution and delivery of this Agreement in the case of each Bank listed on the
signature pages of this Agreement and on or prior to the date on which it
becomes a Bank in the case of each other Bank, and from time to time thereafter
if requested in writing by the Borrower or the Administrative Agent (but only so
long as such Bank remains lawfully able to do so), shall provide the Borrower
and the Administrative Agent with (i) Internal Revenue Service Form 1001 or
4224, as appropriate, or any successor form prescribed by the Internal Revenue
Service, certifying that such Bank is entitled to benefits under an income tax
treaty to which the United States is a party which reduces the rate of
withholding tax on payments of interest or certifying that the income receivable
pursuant to this Agreement is effectively connected with the conduct of a trade
or business in the United States, (ii) Internal Revenue Service Form W-8 or W-9,
as appropriate, or any successor form prescribed by the Internal Revenue
Service, and (iii) any other form or certificate required by any taxing
authority (including any certificate required by Sections 871(h) and 881(c) of
the Internal Revenue Code), certifying that such Bank is entitled to an
exemption from or a reduced rate of tax on payments pursuant to this Agreement
or any of the other Credit Documents. For any period with respect to which a
Bank has failed to provide the Borrower and the Administrative Agent with the
appropriate form pursuant to Section 2.11(d) (unless such failure is due to a
change in treaty, law or regulation occurring subsequent to the date on which a
form originally was required to be provided), such Bank shall not be entitled to
indemnification under Section 2.11(a) or 2.11(b) with respect to Taxes imposed
by the United States; provided, however, that should a Bank, which is otherwise
exempt from or subject to a reduced rate of withholding tax, become subject to
Taxes because of its failure to deliver a form required hereunder, the Borrower
shall take such steps as such Bank shall reasonably request to assist such Bank
to recover such Taxes.
(e) Change in Applicable Lending Office. If the Borrower is required
to pay additional amounts to or for the account of any Bank pursuant to this
Section 2.11, then such Bank will agree to use reasonable efforts to change the
jurisdiction of its Applicable Lending Office so as to eliminate or reduce any
such additional payment which may thereafter accrue if such change, in the
judgment of such Bank, is not otherwise disadvantageous to such Bank.
(f) Evidence of Tax Payments. Within 30 days after the date of any
payment of Taxes, the Borrower shall furnish to the Administrative Agent written
evidence of such payment.
(g) 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 2.11 shall survive the termination of the Commitments
and the payment in full of the Notes.
Section 2.12. Sharing of Payments, Etc. If any Bank shall obtain any
payment or collateral (whether voluntary, involuntary, through the exercise of
any right of set-off or otherwise) on account of the Advances made by it in
excess of its Pro Rata Share of payments or collateral on account of the
Advances obtained by all the Banks, such Bank shall notify the Administrative
Agent and forthwith purchase from the other Banks such participations in the
Advances made by them as shall be necessary to cause such purchasing Bank to
share the excess payment or benefits of such collateral or proceeds ratably in
accordance with the requirements of this Agreement with each of them; provided,
however, that if all or any portion of such excess payment or benefits is
thereafter recovered from such purchasing Bank, such purchase from each Bank
shall be rescinded and such Bank shall repay to the purchasing Bank the purchase
price to the extent of such Bank's ratable share (according to the proportion of
(a) the amount of the participation sold by such Bank to the purchasing Bank as
a result of such excess payment to (b) the total amount of such excess payment)
of such recovery, together with an amount equal to such Bank's ratable share
(according to the proportion of (a) the amount of such Bank's required repayment
to the purchasing Bank to (b) the total amount of all such required repayments
to the purchasing Bank) of any interest or other amount paid or payable by the
purchasing Bank in respect of the total amount so recovered. The Borrower
agrees that any Bank so purchasing a participation from another Bank pursuant to
this Section 2.12 may, to the fullest extent permitted by law, unless and until
rescinded as provided above, exercise all its rights of payment (including the
right of set-off) with respect to such participation as fully as if such Bank
were the direct creditor of the Borrower in the amount of such participation.
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Section 2.13. Replacement of Bank. In the event that any Bank shall
claim payment of any increased costs pursuant to Section 2.09 or any additional
amounts pursuant to Section 2.11 or give the first notice described in Section
2.02(c)(ii) or give the first notice described in Section 2.07(e), the Borrower
shall have the right, if no Event of Default then exists or would exist but for
the requirement that notice be given or time elapse or both, to replace such
Bank with one or more Eligible Assignees in accordance with Section 9.06(a) and
(b) (including execution of an appropriate Assignment and Acceptance); provided
that such Eligible Assignee (i) shall unconditionally offer in writing (with a
copy to the Administrative Agent) to purchase on a date therein specified all of
such Bank's rights hereunder and interest in the Advances owing to such Bank and
the Note held by such Bank without recourse at the principal amount of such Note
plus interest accrued thereon, and any accrued commitment fees, to the date of
such purchase, and (ii) shall execute and deliver to the Administrative Agent an
Assignment and Acceptance, as assignee, pursuant to which such Eligible Assignee
becomes a party hereto with a Commitment equal to that of the Bank being
replaced (plus, if such Eligible Assignee is already a Bank, the amount of its
Commitment prior to such replacement), provided, further, that no Bank or other
Person shall have any obligation to increase its Commitment or otherwise to
replace, in whole or in part, any Bank. Upon satisfaction of the requirements
set forth in the first sentence of this Section 2.13, acceptance of such offer
to purchase by the Bank to be replaced, payment to such Bank of the purchase
price in immediately available funds by the Eligible Assignee replacing such
Bank, execution of such Assignment and Acceptance by such Bank, such Eligible
Assignee and the Administrative Agent, the payment by the Borrower of all
requested costs accruing to the date of purchase which the Borrower is obligated
to pay under Section 9.04 and all other amounts owed by the Borrower to such
Bank (other than facility and any utilization fees accrued for the account of
such Bank and the principal of and interest on the Advances of such Bank
purchased by such Eligible Assignee) and notice by the Borrower to the
Administrative Agent that such payment has been made, such Eligible Assignee
shall constitute a "Bank" hereunder with a Commitment as so specified and the
Bank being so replaced shall no longer constitute a "Bank" hereunder and its
Commitment shall be deemed terminated, except that the rights under Sections
2.08, 2.09, 2.11 and 9.04 of the Bank being so replaced shall continue with
respect to events and occurrences before or concurrently with its ceasing to be
a "Bank" hereunder. If, however, (x) a Bank accepts such an offer and such
Eligible Assignee fails to purchase such rights and interest on such specified
date in accordance with the terms of such offer or such Eligible Assignee or the
Administrative Agent fails to execute the relevant Assignment and Acceptance,
the Borrower shall continue to be obligated to pay the increased costs to such
Bank pursuant to Section 2.09 or the additional amounts pursuant to Section
2.11, as the case may be, or (y) the Bank proposed to be replaced fails to
accept such purchase offer or to execute the relevant Assignment and Acceptance,
the Borrower shall not be obligated to pay to such Bank such increased costs or
additional amounts incurred or accrued from and after the date of such purchase
offer.
ARTICLE III
CONDITIONS OF BORROWING
Section 3.01. Initial Conditions Precedent to Borrowing. The
obligation of each Bank to make its Advance as a part of the Borrowing is
subject to the conditions precedent that:
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(a) The Administrative Agent shall have received on or before October
13, 1999 (except, in the case of the documents to be executed by Flint
Construction Company, a Georgia corporation, Flint Paving Company, Inc. a
Georgia corporation, and F&G Holding, Inc., a Georgia corporation, which must be
executed and received on or before the earlier of (x) October 27, 1999 or (y)
the day of the Borrowing) the following duly executed by all the parties
thereto, dated as of October 7, 1999, in form and substance satisfactory to the
Administrative Agent and (except for the Notes) in sufficient copies for each
Bank:
(i) the Notes dated the date hereof payable to the order of each of the
Banks, respectively;
(ii) the Subsidiary Guaranty Agreement executed by each of the
Borrower's Material Subsidiaries;
(iii) a certificate of the chief executive officer, president or chief
financial officer of the Borrower dated as of the date hereof stating that as of
such date (A) all representations and warranties of the Borrower set forth in
this Agreement are true and correct and (B) no Default has occurred and is
continuing;
(iv) for each Person that is a party to any Credit Document, copies,
each certified as of the date hereof by a Responsible Officer of such Person,
(A) of the resolutions of its Board of Directors authorizing the execution and
delivery of each Credit Document to which it is a party and (B) of its charter
and bylaws;
(v) for each Person that is a party to any Credit Document, a
certificate of a Responsible Officer of such Person dated as of the date hereof
certifying as of such date the names and true signatures of its officers
authorized to sign the Credit Documents to which it is a party;
(vi) a favorable opinions of Xxxxxx X. Xxxxxxx and Xxxxxxxx X. Xxxxxx,
counsel to the Credit Parties, dated as of the date hereof, in form and
substance satisfactory to the Administrative Agent;
(vii) such other documents, approvals and opinions as any Bank through
the Administrative Agent may reasonably request.
(b) The Administrative Agent shall have received evidence satisfactory
to it that the senior unsecured long-term debt of the Borrower is rated BBB - or
higher by S&P and Baa3 or higher by Xxxxx'x on the date hereof.
(c) As of the date hereof, the Borrower and its Subsidiaries shall be
in compliance on the date hereof with all existing material financial
obligations.
Section 3.02. Additional Conditions Precedent to the Borrowing. The
obligation of each Bank to make an Advance shall be subject to the further
conditions precedent that on the date of the Borrowing:
(a) the following statements shall be true (and each of the giving of the
applicable Notice of Borrowing and the acceptance by the Borrower of the
proceeds of the Borrowing shall constitute a representation and warranty by the
Borrower that on the date of the Borrowing such statements are true):
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(i) the representations and warranties contained in Article IV and
those in each other Credit Document (other than representations and warranties
that are expressly made as of a specific date) are correct on and as of the date
of the Borrowing, before and after giving effect to the Borrowing and to the
application of the proceeds from the Borrowing, as though made on and as of such
date; and
(ii) no Default has occurred and is continuing or would result from the
Borrowing or from the application of the proceeds therefrom; and
(iii) no action, suit, investigation or proceeding shall be pending or
threatened in any court or before any arbitrator or Governmental Authority that
could reasonably be expected to affect the Borrower or its Subsidiaries or the
Acquired Business or any transaction contemplated by any of the Credit Documents
or any of the Operative Documents in any case in a material manner, or that
could reasonably be expected to have a Material Adverse Effect or a material
adverse effect on the Acquired Business or any such transaction; and
(iv) there shall not have occurred a material adverse change since June
30, 1999 in the business, assets, liabilities (actual or contingent),
operations, condition (financial or otherwise) or prospects of the Borrower and
its Subsidiaries taken as a whole, or in the business, assets, liabilities
(actual or contingent), operations, condition (financial or otherwise) or
prospects of the Acquired Business, or in the facts and information regarding
such entities as represented by the Borrower to the date of this Agreement.
(v) a favorable opinion of Xxxxxx X. Xxxxxxx, counsel to the Credit
Parties, dated as of the date of the Borrowing and delivered on or before the
day of the Borrowing that simultaneous to the funding the acquisition of the
Acquired Business will have been consummated.
(b) the Administrative Agent shall have received such approvals,
opinions, information or documents as any Bank through the Administrative Agent
may reasonably request.
(c) no event of default or event which, with the giving of notice or
passage of time or both, would be an event of default has occurred under (i) any
agreement of the Borrower or any of its Subsidiaries evidencing any bank line
of credit, (ii) the Note Agreement dated as of October 1, 1997 pertaining to the
$30 million, 6.83% private placement notes due October 1, 2002 and the $30
million, 7.2% private placement notes due October 1, 2007, or (iii) any other
material agreement of the Borrower or any Subsidiary of the Borrower.
(d) receipt of all necessary or desirable governmental and third party
consents (including Xxxx-Xxxxx Xxxxxx clearance) and approvals necessary or
desirable in connection with the purchase of the Acquired Business and the
related financings and other transactions contemplated hereby or by the
Operative Documents and expiration of all applicable waiting periods without any
action being taken by any authority that could restrain, prevent or impose any
material adverse conditions on the purchase by the Borrower of the Acquired
Business or such other transactions (or that could seek to so restrain, prevent
or impose) or that could threaten any of the foregoing, and no law or regulation
shall be applicable which in the judgment of the Administrative Agent would have
such effect.
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(e) receipt by the Administrative Agent of evidence satisfactory to it
that the senior unsecured long-term debt of the Borrower is rated BBB - or
higher by S&P and Baa3 or higher by Xxxxx'x immediately prior to, and upon
consummation of, the acquisition of the Acquired Business.
(f) the Administrative Agent shall have received evidence satisfactory
to it of the satisfaction (without waiver) of all conditions to the consummation
of the acquisition of the Acquired Business on the date of the Borrowing, and
that all transactions contemplated by the Operative Documents (including the
acquisition of the Acquired Business by the Borrower) will take place prior to
or simultaneously with the Borrowing in compliance with all applicable law and
regulatory approvals.
(g) the Purchase Agreement shall have been executed, and the
Administrative Agent shall have received (i) copies of all of the Operative
Documents, each of which shall be in form and substance satisfactory to the
Administrative Agent and (ii) each opinion, report and other document required
to be delivered pursuant to the Purchase Agreement, with a statement therein, or
a letter from the Person delivering such opinion report or other document,
authorizing reliance thereon by the Administrative Agent and the Banks, all in
form and substance satisfactory to the Administrative Agent.
(h) The Administrative Agent shall have received and approved (i) the
audited consolidating financial statements of the Acquired Business as of and
for the three fiscal years ended December 31, 1996, 1997 and 1998, including the
balance sheets and statements of income, stockholders' equity and cash flow
audited by independent public accountants of recognized national standing, in
all cases prepared in conformity with GAAP and (ii) a pro forma consolidated
balance sheet of the Borrower and its Subsidiaries as of the most recent
available quarter ending prior to the date of the purchase of the Acquired
Business giving effect to the purchase of the Acquired Business and the
transactions contemplated hereby or by the Operative Documents and reflecting
estimated purchase price accounting adjustments.
(i) The Administrative Agent shall have been satisfied that (i) the
terms and conditions for the Purchase Agreement (including all exhibits and
schedules thereto) are satisfactory in all respects, (ii) the aggregate purchase
price, including transaction expenses and assumed debt, will not exceed $305
million, and (iii) the corporate capital and ownership structure (including
articles of incorporation and by-laws), shareholders agreements and management
of the Borrower and its Subsidiaries (after giving effect to the acquisition of
the Acquired Business) are satisfactory to the Administrative Agent in all
respects.
(j) All of the Acquired Business shall have become wholly owned
directly (and not through one or more subsidiaries) by the Borrower except APC,
of which 100% of the ownership interest, including any options, warrants or
other rights to acquire any such ownership interest, if any, is owned by the
Borrower, subject only to the Borrowing.
(k) The Administrative Agent shall have been satisfied as to the
completion of all due diligence with respect to the Acquired Business and its
Subsidiaries satisfactory to the Administrative Agent (or the Majority Banks
through the Administrative Agent).
(l) The Administrative Agent shall have received, as to each Material
Subsidiary of the Borrower, the documents described in Sections 3.01(a)(ii),
3.01(a)(iv), 3.01(a)(v) and 3.01(a)(vi), to the extent such documents were not
delivered on the date hereof.
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(m) The Administrative Agent shall have received wiring instructions or
other evidence that arrangements have been made so that the fees described in
Section 2.03 that are owing on the day of the Borrowing will be paid
simultaneously with the Borrowing, including but not limited to any fees owed to
the Adminstrative Agent, out-of-pocket expenses incurred by the Administrative
Agent, and fees of counsel to the Adminsitrative Agent which have accrued
through such date.
Section 3.03. Determinations Under Sections 3.01 and 3.02. For
purposes of determining compliance with the conditions specified in Sections
3.01 and 3.02, each Bank shall be deemed to have consented to, approved and
accepted and to be satisfied with each document or other matter required under
Section 3.01 or 3.02 to be consented to or approved by or acceptable or
satisfactory to the Banks or the Administrative Agent, unless an officer of the
Administrative Agent responsible for the transactions contemplated by the Credit
Documents shall have received written notice from such Bank prior to the
Borrowing hereunder specifying its objection thereto and such Bank shall not
have made available to the Administrative Agent any portion of the Borrowing.
In determining whether any document or matter is satisfactory to the
Administrative Agent, the Administrative Agent may make such determinations in
its sole discretion exercised in good faith.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants as follows:
Section 4.01. Corporate Existence; Subsidiaries. The Borrower is a
corporation duly organized, validly existing and in good standing under the laws
of Michigan and is in good standing and qualified to do business in each
jurisdiction where its ownership or lease of property or conduct of its business
requires such qualification and where a failure to be qualified could reasonably
be expected to have a Material Adverse Effect. Each Subsidiary of the Borrower
is a corporation duly organized, validly existing and in good standing under the
laws of its jurisdiction of incorporation and in good standing and qualified to
do business in each jurisdiction where its ownership or lease of property or
conduct of its business requires such qualification and where a failure to be
qualified could reasonably be expected to have a Material Adverse Effect.
Schedule 4.01 lists the name and jurisdiction of incorporation of each Material
Subsidiary of the Borrower existing on the date hereof. Schedule 5.08 lists the
name and jurisdiction of incorporation of each Immaterial Subsidiary existing on
the date hereof.
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Section 4.02. Corporate Power. The execution, delivery, and
performance by each Credit Party of the Credit Documents to which it is a party
and the consummation of the transactions contemplated hereby and thereby (a) are
within such Credit Party's corporate powers, (b) have been duly authorized by
all necessary corporate action, (c) do not contravene (i) such Credit Party's
certificate or articles, as the case may be, of incorporation or by-laws or (ii)
any law or any contractual restriction binding on or affecting such Credit
Party, and (d) will not result in or require the creation or imposition of any
Lien prohibited by this Agreement. At the time of the Borrowing, the Borrowing
and the use of the proceeds of the Borrowing will be within the Borrower's
corporate xxxxxx, xxxx have been duly authorized by all necessary corporate
action, (a) will not contravene (i) the Borrower's certificate of incorporation
or by-laws or (ii) any law or any contractual restriction binding on or
affecting the Borrower or any of its Subsidiaries and (b) will not result in or
require the creation or imposition of any Lien prohibited by this Agreement.
The merger of the Temporary Subsidiaries with and into the Borrower (a) are
within the Borrower's and each Temporary Subsidiary's corporate powers, (b) have
been (or will be before December 31, 1999) duly authorized by all necessary
corporate action and (c) do not contravene (i) the Borrower and each Temporary
Subsidiary's certificate or articles, as the case may be, of incorporation or
by-laws or (ii) any law or any contractual restriction binding on or affecting
the Borrower or any Temporary Subsidiary other than those relating to the
Preferred Stock.
Section 4.03. Authorization and Approvals. No authorization or
approval or other action by, and no notice to or filing with, any Governmental
Authority or any other Person is required for the due execution, delivery and
performance by the Credit Parties of the Credit Documents or the consummation of
the transactions contemplated thereby, except those necessary in connection with
the conduct of the Borrower's business required to be made after any date this
representation is made or deemed made. At the time of the Borrowing, no
authorization or approval or other action by, and no notice to or filing with,
any Governmental Authority or any other Person will be required for the
Borrowing or the use of the proceeds of the Borrowing. No authorization or
approval or other action by, and no notice to or filing with any Governmental
Authority or any other Person (other than the Borrower) is required for merging
the Temporary Subsidiaries with and into the Borrower except for authorizations,
approvals or actions regarding the Preferred Stock.
Section 4.04. Enforceable Obligations. This Agreement and the Notes
have been, and each other Credit Document when executed by the Borrower will be,
duly executed and delivered by the Borrower. The Subsidiary Guaranty Agreement
has been duly executed and delivered by each Material Subsidiary of the
Borrower. This Agreement and the Notes are, and each other Credit Document when
executed by the Borrower will be, legal, valid and binding obligations of the
Borrower and enforceable against the Borrower in accordance with their
respective terms, except as such enforceability may be limited by any applicable
bankruptcy, insolvency, reorganization, moratorium or similar law affecting
creditors' rights generally and by general principles of equity. The Subsidiary
Guaranty Agreement is a legal, valid and binding obligation of each Material
Subsidiary of the Borrower and enforceable against each such Subsidiary in
accordance with its terms, except as such enforceability may be limited by any
applicable bankruptcy, insolvency, reorganization, moratorium or similar law
affecting creditors' rights generally and by general principles of equity.
Section 4.05. Financial Statements. (a) The audited balance sheets of
the Borrower and its Subsidiaries as at December 31, 1996, December 31, 1997 and
December 31, 1998, and the related statements of income, stockholders' equity
and cash flow of the Borrower and its Subsidiaries for the respective fiscal
years then ended, copies of which have been furnished to each Bank, and the
balance sheet of the Borrower and its Subsidiaries as at June 30, 1999, and the
related statements of income and cash flow of the Borrower and its Subsidiaries
for the six months then ended, duly certified by an authorized financial officer
of the Borrower, copies of all of which have been furnished to each Bank, fairly
present (subject, in the case of such balance sheets as at June 30, 1999 and the
statements of income and cash flow for the six months then ended, to year-end
audit adjustments and absence of footnotes), the financial condition of the
Borrower and its Subsidiaries as at such dates and the results of the operations
of the Borrower and its Subsidiaries for the respective fiscal years (or six
months in the case of June 30, 1999 statements) ended on such dates, and all
such balance sheets and statements of income, stockholders' equity and cash flow
were prepared in accordance with GAAP.
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(b) The audited balance sheets of the Acquired Business as at December
31, 1996, December 31, 1997 and December 31, 1998, and the related statements of
income, stockholders' equity and cash flow of the Acquired Business for the
respective fiscal years then ended, copies of which have been furnished to each
Bank, and the balance sheet of the Acquired Business as at June 30, 1999, and
the related statements of income and cash flow of the Acquired Business for the
six months then ended, duly certified by an authorized financial officer of the
Acquired Business, copies of all of which have been furnished to each Bank prior
to the Borrowing, fairly present (subject, in the case of such balance sheets as
at June 30, 1999 and the statements of income and cash flow for the six months
then ended, to year-end audit adjustments and absence of footnotes), the
financial condition of the Acquired Business as at such dates and the results of
the operations of the Acquired Business for the respective fiscal years (or six
months in the case of June 30, 1999 statements) ended on such dates, and all
such balance sheets and statements of income, stockholders' equity and cash flow
were prepared in accordance with GAAP.
(c) Since June 30, 1999, there has been no material adverse change in
the business, assets, liabilities (actual or contingent), operations, condition
(financial or otherwise) or prospects of the Borrower and its Subsidiaries taken
as a whole.
Section 4.06. Acquired Business. Contemporaneously with the making of
the Borrowing, the Borrower will acquire directly (except APC, which shall be a
wholly-owned Subsidiary of the Borrower) 100% of the Acquired Business and no
Person other than the Borrower will have any right or option to acquire any
portion of the Acquired Business other than pursuant to agreements for the sale
or disposition of assets permitted by Section 6.05(b).
Section 4.07. True and Complete Disclosure. No representation,
warranty or other statement made by any Credit Party (or on behalf of any Credit
Party) in this Agreement or any other Credit Document contains any untrue
statement of a material fact or omits to state any material fact necessary to
make the statements contained therein not misleading in light of the
circumstances in which they were made as of the date hereof. There is no fact
known to any Responsible Officer of the Borrower on the date hereof that has not
been disclosed to the Administrative Agent and the Banks which could reasonably
be expected to have a Material Adverse Effect. All projections, estimates and
pro forma financial information furnished by the Borrower or on behalf of the
Borrower were prepared on the basis of assumptions, data, information or
conditions believed by the Borrower to be reasonable at the time such
projections, estimates and pro forma financial information were furnished.
Section 4.08. Litigation. Except as otherwise disclosed to the Banks
in writing, there is no pending or, to the best knowledge of the Borrower,
threatened action or proceeding affecting the Borrower or any of its
Subsidiaries before any court, Governmental Agency or arbitrator, which could
reasonably be expected to have a Material Adverse Effect or which purports to
affect the legality, validity, binding effect or enforceability of this
Agreement, any Note, any other Credit Document or any of the Operative Documents
or the consummation of any of the transactions contemplated hereby or thereby.
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Section 4.09. Use of Proceeds. The proceeds of the Advances will be
used by the Borrower only for (i) the acquisition of the Acquired Business, (ii)
repayment or refinancing of Indebtedness of the Acquired Business, (iii) fees
and expenses associated with such acquisition, and (iv) other lawful corporate
purposes; provided, that no such proceeds will be used to purchase or carry any
margin stock (within the meaning of Regulation U). The Borrower is not engaged
in the business of extending credit for the purpose of purchasing or carrying
margin stock (within the meaning of Regulation U). Following application of the
proceeds of each Advance, (a) not more than 25 percent of the value of the
assets of the Borrower which are subject to any arrangement with the
Administrative Agent or any Bank (herein or otherwise) whereby the Borrower's
right or ability to sell, pledge or otherwise dispose of assets is in any way
restricted (or pursuant to which the exercise of any such right is or may be
cause for accelerating the maturity of all or any portion of the Advances or any
other amount payable hereunder or under any such other arrangement), will be
margin stock (within the meaning of Regulation U); and (b) not more than 25
percent of the value of the assets of the Borrower and its Subsidiaries on a
consolidated basis, which are subject to any arrangement with the Administrative
Agent or any Bank (herein or otherwise) whereby the Borrower's or any
Subsidiary's right or ability to sell, pledge or otherwise dispose of assets is
in any way restricted (or pursuant to which the exercise of any such right is or
may be cause for accelerating the maturity of all or any portion of the Advances
or any other amount payable hereunder or under any such other arrangement), will
be margin stock (within the meaning of Regulation U).
Section 4.10. Investment Company Act. Neither the Borrower nor any of
its Subsidiaries is an "investment company" or a company "controlled" by an
"investment company" within the meaning of the Investment Company Act of 1940,
as amended.
Section 4.11. Public Utility Holding Company Act. None of the
Subsidiaries of the Borrower is a "holding company" within the meaning of the
Public Utility Holding Company Act of 1935, as amended ("PUHCA"). The Borrower
is an "exempt holding company" under PUHCA, at the date hereof and is subject
only to Section 9(a)(2) thereof and the duty to annually file a claim of
exemption with the Securities and Exchange Commission. Borrower has timely
filed all required claims of exemption and has no notice from any Governmental
Authority that could reasonably be expected to adversely affect its exemption.
The Borrower will at all times be an "exempt holding company" under PUHCA until
all "public utilities" under PUHCA are merged into Borrower at which time
Borrower will not longer be a "holding company" under PUHCA.
Section 4.12. Taxes. Each of the Borrower and its Subsidiaries has
filed or caused to be filed all tax returns required by law to be filed and has
paid or caused to be paid all taxes, assessments and other governmental charges
levied upon or in respect of any of its Properties, other than taxes the
validity or amount of which are being contested in good faith by the Borrower or
such Subsidiary by appropriate proceedings and for which the Borrower or such
Subsidiary shall have set aside on its books adequate reserves in accordance
with GAAP. The charges, accruals and reserves on the books of the Borrower and
its Subsidiaries in respect of taxes for all fiscal periods are adequate.
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Section 4.13. Pension Plans. No Termination Event has occurred or is
reasonably expected to occur with respect to any Plan, and each Plan has
complied with and been administered in all material respects in accordance with
applicable provisions of ERISA and the Code. No "accumulated funding
deficiency" (as defined in Section 302 of ERISA) has occurred with respect to
the Plan and there has been no excise tax imposed under Section 4971 of the Code
with respect to the Plan. No Reportable Event has occurred with respect to any
Plan, and each Plan has complied with and been administered in all material
respects with applicable provisions of ERISA and the Code. The present value of
all benefits vested under each Plan (based on the assumptions used to fund such
Plan) did not, as of the last annual valuation date applicable thereto, exceed
the value of the assets of such Plan allocable to such vested benefits in any
amount that could reasonably be expected to have a Material Adverse Effect.
Neither the Borrower nor any member of the Controlled Group has had a complete
or partial withdrawal from any Multiemployer Plan for which there is any
material withdrawal liability. As of the most recent valuation date applicable
thereto, neither the Borrower nor any member of the Controlled Group has
received notice (or has knowledge of any reason to expect) that any
Multiemployer Plan is insolvent or in reorganization or has been terminated
within the meaning of Title IV of ERISA. The Borrower has no reason to believe
that the annual cost during the term of this Agreement to the Borrower or any of
its Subsidiaries for post-retirement benefits to be provided to the current and
former employees of the Borrower or any of its Subsidiaries under welfare
benefit plans (as defined in Section 3(1) of ERISA) could, in the aggregate,
reasonably be expected to have a Material Adverse Effect. Neither the Borrower
nor any member of the Controlled Group has incurred any liability to the PBGC
which remains outstanding other than the payment of premiums, and there are no
premium payments which have become due which are unpaid. Schedule B to the most
recent annual report filed with the Internal Revenue Service with respect to
each Plan and furnished to the Banks is complete and accurate. Since the date
of each such Schedule B, there has been no material adverse change in the
funding status or financial condition of the Plan relating to such Schedule B.
Neither the Borrower nor any member of the Controlled Group has failed to make a
required contribution or payment to a Multiemployer Plan. Neither the Borrower
nor any member of the Controlled Group has failed to make a required installment
or any other required payment to a Plan under Section 412 of the Code on or
before the due date for such installment or other payment. Neither the Borrower
nor any Subsidiary is subject to any liability under Sections 4063, 4064, 4069,
4204 or 4212(c) of ERISA and no other member of the Controlled Group is subject
to any liability under Sections 4063, 4064, 4069, 4204 or 4212(c) of ERISA which
could reasonably be expected to subject the Borrower or any Guarantor to any
liability which could, individually or in the aggregate, reasonably be expected
to have a Material Adverse Effect.
Section 4.14. No Burdensome Restrictions; No Defaults. No Credit Party
is a party to any indenture, loan or credit agreement or any lease or other
agreement or instrument or subject to any charter or corporate restriction or
provision of applicable Legal Requirement which could reasonably be expected to
have a Material Adverse Effect. No Credit Party is in default under or with
respect to any contract, agreement, lease or other instrument to which such
Credit Party is a party and which could reasonably be expected to have a
Material Adverse Effect. To the knowledge of each Responsible Officer of the
Borrower, no Credit Party has received any notice of default under any contract,
agreement, lease or other instrument to which such Credit Party is a party which
is continuing or which, if not cured, could reasonably be expected to have a
Material Adverse Effect. No Default has occurred and is continuing.
Section 4.15. Environmental Condition.
(a) The Borrower and its Subsidiaries, taken as a whole, (i) have
obtained all Environmental Permits necessary for the ownership and operation of
their respective material Properties and the conduct of their respective
businesses; (ii) have been and are in compliance with all terms and conditions
of such Environmental Permits and with all other material requirements of
applicable Environmental Laws as to which the failure to comply could reasonably
be expected to have a Material Adverse Effect; (iii) have not received notice of
any violation or alleged violation of any Environmental Law or Environmental
Permit the violation of which could reasonably be expected to have a Material
Adverse Effect; and (iv) are not subject to any Environmental Claim, which
Environmental Claim could reasonably be expected to have a Material Adverse
Effect.
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(b) To the knowledge of the Borrower, none of the present or previously
owned or operated Property of the Borrower or of any of its present or former
Subsidiaries, wherever located, (i) has been placed on or, to the Borrower's
knowledge, proposed to be placed on the National Priorities List, the
Comprehensive Environmental Response Compensation Liability Information System
list, or their state or local analogs, or have been otherwise designated or
listed as a potential site for removal, remediation, cleanup, closure,
restoration, reclamation or other response activity under any Environmental Laws
if the liability to the Borrower for such removal, remediation, cleanup,
closure, restoration, reclamation or other response activity could reasonably be
expected to be in excess of $10 million dollars; (ii) is subject to a Lien,
arising under or in connection with any Environmental Laws, that attaches to any
revenues or to any Property owned or operated by the Borrower or any of its
Subsidiaries, wherever located, which Lien could reasonably be expected to have
a Material Adverse Effect; or (iii) to any Credit Party's knowledge, has been
the site of any Release of Hazardous Substances or Hazardous Wastes from present
or past operations which has caused any condition that has resulted in or could
reasonably be expected to result in the need for Response that could reasonably
be expected to have a Material Adverse Effect.
(c) Without limiting the foregoing, the present and, to the best
knowledge of any Responsible Officer of the Borrower, future liability, if any,
of the Credit Parties, taken as a whole, which would reasonably be expected to
arise in connection with requirements under Environmental Laws will not result
in a Material Adverse Effect.
Section 4.16. Compliance with Laws, Material Agreements. No Credit
Party is in violation of any Legal Requirement the failure to comply with which
could reasonably be expected to have a Material Adverse Effect. No Credit Party
is in violation of any provision of any material agreement to which it is a
party, and the execution and delivery of this Agreement and the Credit Documents
and the consummation of the transactions contemplated thereunder shall not
result in any breach of any provisions of, or constitute a default under, any
agreement, except any violation, breach, or default which would not reasonably
be expected to have a Material Adverse Effect.
Section 4.17. Year 2000. The Borrower has (a) completed a review and
assessment of all areas within its and each of its Subsidiaries' and the
Acquired Business' business and operations (including those affected by
suppliers, vendors and customers) that could be adversely affected by the Year
2000 Problem, (b) developed a plan and timeline for addressing on a timely basis
the Year 2000 Problem, and (c) to date, implemented that plan substantially in
accordance with that timetable. Based on the foregoing, the Borrower believes
that all computer applications (including those of its suppliers, vendors and
customers) that are material to the business and operations of the Borrower, any
of its Subsidiaries or the Acquired Business are reasonably expected on a timely
basis to be able to perform properly date-sensitive functions for all dates
before, on or after January 1, 2000, except to the extent that a failure to do
so could not reasonably be expected to have a Material Adverse Effect or a
material adverse effect on the Acquired Business.
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ARTICLE V
AFFIRMATIVE COVENANTS
So long as any Note or any amount under any Credit Document shall remain
unpaid or any Bank shall have any Commitment hereunder, the Borrower agrees,
unless the Majority Banks shall otherwise consent in writing, to comply with the
following covenants.
Section 5.01. Compliance with Laws, Material Agreements, Etc. The
Borrower will comply, and cause each of its Subsidiaries to comply, with all
Legal Requirements (including ERISA and Environmental Laws), except where the
failure to comply with such legal requirements would not reasonably be expected
to have a Material Adverse Effect, and will comply, and cause each of its
Subsidiaries to comply, with all material contractual obligations.
Section 5.02. Maintenance of Insurance. The Borrower will maintain,
and cause each of its Subsidiaries to maintain, insurance with responsible and
reputable insurance companies or associations in such amounts and covering such
risks as are usually carried by companies engaged in similar businesses and
owning similar properties in the same general areas in which the Borrower or
such Subsidiary operates, provided that the Borrower or such Subsidiary may
self-insure to the extent and in the manner normal for similarly situated
companies of like size, type and financial condition that are part of a group of
companies under common control.
Section 5.03. Preservation of Corporate Existence, Etc. The Borrower
will preserve and maintain, and cause each of its Subsidiaries to preserve and
maintain, its corporate existence, rights, franchises and privileges in the
jurisdiction of its incorporation, and qualify and remain qualified, and cause
each such Subsidiary to qualify and remain qualified, as a foreign corporation
in each jurisdiction in which qualification is necessary or desirable in view of
its business and operations or the ownership of its properties, and, in each
case, where failure to qualify or preserve and maintain its rights and
franchises could reasonably be expected to have a Material Adverse Effect;
provided, however, that nothing contained in this Section 5.03 shall prevent any
transaction permitted by Section 6.05.
Section 5.04. Payment of Taxes, Etc. The Borrower will pay and
discharge, and cause each of its Subsidiaries to pay and discharge, before the
same shall become delinquent (i) all taxes, assessments and governmental charges
or levies imposed upon it or upon its income or profits or Property that are
material in amount, prior to the date on which penalties attach thereto and (ii)
all lawful claims that are material in amount which, if unpaid, might by law
become a Lien upon its or its Subsidiaries' Property; provided, however, that
neither the Borrower nor any such Subsidiary shall be required to pay or
discharge any such tax, assessment, charge, levy or claim which is being
contested in good faith and by appropriate proceedings, and with respect to
which reserves in conformity with GAAP have been provided.
Section 5.05. Visitation Rights; Environmental Inspections.
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(a) At any reasonable time and from time to time upon reasonable
notice, the Borrower will, and will cause its Subsidiaries to, permit the
Administrative Agent and any Bank or any agents or representatives thereof, to
examine and make copies of and abstracts from their respective records and books
of account, to visit and inspect their respective Properties and to discuss
affairs, finances and accounts with any of their respective officers or
directors.
(b) If any event or series of events causes the Borrower and its
Subsidiaries to spend more than $10,000,000 in the aggregate in connection with
corrective action, including any necessary cleanup, removal, or remediation of
Hazardous Substances or Hazardous Waste, for failure to comply with any
Environmental Law, then, after the Borrower has delivered to the Majority Banks
any existing studies, or in any event 15 days after the request therefor, at the
Majority Banks' reasonable written request, the Borrower shall at its expense
contract for the services of Persons to perform environmental site assessments
for the purpose of determining whether there exists any Environmental condition
that would result in a similar liability, cost or expense to the Borrower or any
of its Subsidiaries under any of the conditions necessitating the corrective
measures described above.
Section 5.06. Reporting Requirements. The Borrower will furnish to the
Administrative Agent and each Bank:
(a) Defaults. As soon as possible and in any event within five days
after the occurrence of each Default known to a Responsible Officer of the
Borrower or any of its Subsidiaries which is continuing on the date of such
statement, a statement of an authorized financial officer of the Borrower
setting forth the details of such Default and the actions which the Borrower has
taken and proposes to take with respect thereto;
(b) Quarterly Financials. As soon as available and in any event not
later than 60 days after the end of each of the first three quarters of each
fiscal year of the Borrower, the consolidated balance sheet of the Borrower and
its Subsidiaries as of the end of such quarter and the consolidated statements
of income and cash flow of the Borrower and its Subsidiaries for such quarterly
period and for the portion of the fiscal year ending with such period, in each
case setting forth in comparative form the figures for the preceding fiscal
year, all in reasonable detail and certified by an authorized financial officer
of the Borrower as presenting fairly the financial condition and the results of
operations of the Borrower, but subject to omission of complete footnotes and
changes resulting from year-end adjustments, and as having been prepared in
accordance with GAAP, together with a compliance certificate duly executed by
the president, chief executive officer, chief financial officer or the treasurer
of the Borrower in substantially the form of Exhibit F;
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(c) Annual Financials. As soon as available and in any event not later
than 105 days after the end of each fiscal year of the Borrower and its
Subsidiaries, the consolidated balance sheet of the Borrower and its
Subsidiaries as of the close of such year, and the statements of income,
stockholders' equity and cash flow of the Borrower and its Subsidiaries, for
such fiscal year, in each case setting forth in comparative form the figures for
the preceding fiscal year, all in reasonable detail and accompanied by a report
thereon by Xxxxxx Xxxxxxxx L.L.P. or another firm of independent certified
public accountants of recognized national standing selected by the Borrower and
acceptable to the Majority Banks, containing an opinion to the effect that such
consolidated financial statements have been prepared in accordance with GAAP
consistently applied and present fairly the financial condition of the Borrower
and its Subsidiaries and the result of their operations and that the examination
by such accountants in connection with their report upon such financial
statements has been made in accordance with generally accepted auditing
standards, and that such accounting firm has obtained no knowledge that a
Default has occurred and is continuing, or if, in the opinion of such accounting
firm, a Default has occurred and is continuing, a statement as to the nature
thereof, together with a compliance certificate duly executed by the president,
chief executive officer, chief financial officer or the treasurer of the
Borrower in substantially the form of Exhibit F;
(d) SEC Filings. Promptly after the filing thereof, (a) copies of all
proxy materials which the Borrower or any of its Subsidiaries files with the
Securities and Exchange Commission, or any authority succeeding to any or all of
the functions of said Commission ("SEC"), and (b) copies of all reports on Forms
10-K, 10-Q and 8-K (or successor forms) and other periodic reports, if any,
which the Borrower or any Subsidiary of the Borrower files with the SEC;
(e) Other Reports. Promptly and in any event within 15 days after the
sending or filing thereof, copies of all financial statements and reports sent
by the Borrower to its stockholders generally and copies of all press releases
and other statements made available generally by the Borrower or any Subsidiary
of the Borrower to the public concerning material developments in the business
of the Borrower or any such Subsidiary;
(f) Termination Events. As soon as possible and in any event (i)
within 30 days after any Responsible Officer of the Borrower or any member of
the Controlled Group knows or has reason to know that any Termination Event
described in clause (a) of the definition of Termination Event with respect to
any Plan has occurred, and (ii) within 10 days after any Responsible Officer of
the Borrower or any member of the Controlled Group knows or has reason to know
that any other Termination Event with respect to any Plan has occurred, a
statement of the chief financial officer of the Borrower describing such
Termination Event and the action, if any, which the Borrower or such member of
the Controlled Group proposes to take with respect thereto;
(g) Termination of Plans. Promptly and in any event within five
Business Days after the receipt thereof by the Borrower or any member of the
Controlled Group from the PBGC, copies of each notice received by the Borrower
or any such member of the Controlled Group of the PBGC's intention to terminate
any Plan or to have a trustee appointed to administer any Plan;
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(h) Other ERISA Notices. (1) Promptly and in any event within five
Business Days after the receipt thereof by the Borrower or any member of the
Controlled Group from a Multiemployer Plan sponsor, a copy of each notice
received by the Borrower or any member of the Controlled Group concerning (i)
the imposition of withdrawal liability pursuant to Section 4202 of ERISA in an
amount that could reasonably be expected to have a Material Adverse Effect, (ii)
the determination that a Multiemployer Plan is, or is expect to be, in
reorganization within the meaning of Title IV of ERISA, or (iii) the termination
of a Multiemployer Plan within the meaning of Title IV of ERISA; (2) promptly
and in any event within ten Business Days after the material increase in the
benefits of any existing Plan or the establishment of any new Plan or the
commencement of, or obligation to commence, contributions to any Plan or
Multiemployer Plan to which the Borrower or any member of the Controlled Group
was not previously contributing, notification of such increase, establishment,
commencement or obligation to commence and the amount of such contributions; (3)
promptly and in any event within ten Business Days after the filing thereof with
the Internal Revenue Service, a copy of each funding waiver request filed with
respect to any Plan and all communications received by the Borrower or a member
of the Controlled Group with respect to such request; and (4) promptly and in
any event within ten Business Days after the Borrower or any member of the
Controlled Group fails to make a required installment or any other required
payment under Section 412 of the Code on or before the due date for such
installment or payment, a notification of such failure;
(i) Environmental Notices. Promptly upon the knowledge of any
Responsible Officer of the Borrower of receipt thereof by the Borrower or any of
its Subsidiaries, a copy of any form of notice, summons or citation received
from the EPA, or any other Governmental Authority engaged in protection of the
Environment, concerning (i) material violations or alleged material violations
of Environmental Laws, which seeks to impose liability therefor and which, based
upon information reasonably available to the Borrower at the time or after such
violation, could reasonably be expected to have a Material Adverse Effect, (ii)
any action or omission on the part of the Borrower or any of its Subsidiaries in
connection with Hazardous Waste or Hazardous Substances which, based upon
information reasonably available to the Borrower at the time of such receipt,
could reasonably be expected to have a Material Adverse Effect, (iii) any notice
of potential responsibility under CERCLA, or (iv) concerning the filing of a
Lien other than a Permitted Lien upon, against or in connection with the
Borrower, its present or former Subsidiaries or any of their leased or owned
material Property, wherever located;
(j) Material Changes. Prompt written notice of (i) any condition or
event of which any Responsible Officer of the Borrower has knowledge, which
condition or event has or may reasonably be expected to have a Material Adverse
Effect or (ii) a breach of or noncompliance with any term, condition, or
covenant of any contract to which the Borrower or any of its Subsidiaries is a
party or by which they or their properties may be bound, which breach or
noncompliance could reasonably be expected to have a Material Adverse Effect;
(k) Disputes, etc. Prompt written notice of any claims, litigation,
proceedings or disputes instituted against, or, to the knowledge of any
Responsible Officer of the Borrower threatened or affecting, the Borrower or any
of its Subsidiaries which, if adversely determined, could reasonably be expected
to have a Material Adverse Effect;
(l) Operative Documents. Promptly after execution thereof, a copy of
each Operative Document; and
(m) Other Information. Such other information respecting the business
or Properties, or the condition or operations, financial or otherwise, of the
Borrower or any of its Subsidiaries, as any Bank through the Administrative
Agent may from time to time reasonably request.
Section 5.07. Maintenance of Property. Borrower shall, and shall cause
each of its Subsidiaries to, (a) maintain their material owned, leased, or
operated property, equipment, buildings and fixtures in good condition, repair
and working order, and supplied with all necessary equipment, and make all
necessary repairs, renewals, replacements, betterments and improvements thereto,
all as may be reasonably necessary so that the business carried on in connection
therewith may be properly and advantageously conducted at all times, and (b) not
knowingly or willfully permit the commission of waste or other injury, or the
occurrence of pollution, contamination or any other condition in, on or about
the owned or operated property involving the Environment that could reasonably
be expected to have a Material Adverse Effect.
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Section 5.08. Subsidiaries. If, after the date hereof, (a) any Person
(each a "New Subsidiary") becomes a Subsidiary of the Borrower (including each
entity comprising part of the Acquired Business), or (b) any Immaterial
Subsidiary becomes a Material Subsidiary (each a "Newly Material Subsidiary") ,
the Borrower will promptly cause each such New Subsidiary or Newly Material
Subsidiary to execute and deliver to the Administrative Agent a counterpart of
the Subsidiary Guaranty Agreement, such evidence of corporate power and
authority to enter into the Subsidiary Guaranty Agreement as the Administrative
Agent may reasonably request and a favorable legal opinion of counsel reasonably
acceptable to the Administrative Agent with respect to the Subsidiary Guaranty
Agreement and such New Subsidiary or Newly Material Subsidiary in form and
substance satisfactory to the Administrative Agent.
Section 5.09. Books and Records. The Borrower will keep, and will
cause each Subsidiary to keep, adequate and proper records and books of account
in which full and correct entries will be made of its dealings, business and
affairs, so that the financial statements of the Borrower may be prepared in
accordance with GAAP.
Section 5.10. Year 2000. The Borrower shall (a) continually review and
assess all areas of the business and operations of it and its Subsidiaries
(including those affected by suppliers, vendors and customers) that could be
adversely affected by the Year 2000 Problem, (b) develop plans and timelines for
addressing on a timely basis the Year 2000 Problem, and (c) implement that plan
substantially in accordance with the timetables. The Borrower will ensure that
all computer applications (including those of its suppliers, vendors and
customers) that affect the businesses and operations of it and its Subsidiaries
will function properly in all respects unless the failure to do so would not
have a Material Adverse Effect.
Section 5.11. Temporary Subsidiaries. On or before December 31, 1999,
the Temporary Subsidiaries will have been merged into the Borrower or terminated
and substantially all of their assets as of the date hereof will be wholly owned
by the Borrower.
ARTICLE VI
NEGATIVE COVENANTS
So long as any Note or any amount under any Credit Document shall remain
unpaid or any Bank shall have any Commitment, the Borrower agrees, unless the
Majority Banks otherwise consent in writing, to comply with the following
covenants.
Section 6.01. Use of Proceeds. The Borrower will not use the proceeds
of any Advance for any purposes other than the purposes specifically permitted
in the first sentence of Section 4.09 and in any event will not use any such
proceeds (i) in a manner which violates or results in a violation of any law or
regulation, (ii) to purchase or carry any margin stock (as defined in Regulation
U), or to extend credit to others for that purpose, or (iii) to make any
investment in any Person if such investment is opposed by the board of
directors, general partner or other governing body of such Person.
Section 6.02. Liens, Etc. The Borrower will not create, assume, incur
or suffer to exist, or permit any of its Subsidiaries to create, assume, incur
or suffer to exist, any Lien on the Property of the Borrower or any of its
Subsidiaries, whether now owned or hereafter acquired, or assign any right to
receive income, except Permitted Liens.
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Section 6.03. Restricted Payments. The Borrower will not, and will not
permit any of its Subsidiaries to, make any Restricted Payment, except (a)
Restricted Payments made by any of the Borrower's Subsidiaries to the Borrower
or to any of the Borrower's wholly-owned Subsidiaries, and (b) the Borrower may
make Restricted Payments if before and after such Restricted Payment the
Consolidated Net Worth is at least $120,000,000 and (c) amounts paid (including
brokerage costs) for common stock of Borrower to the extent that the number of
shares so purchased does not exceed the number of shares contemporaneously sold
and issued through the Borrower's Direct Stock Purchase and Dividend
Reinvestment Plan, if (i) no stock split or stock dividend payout has occurred
in between such purchase and such sale, and (ii) such purchases are consistent
with the Borrower's past business practices.
Section 6.04. Compliance with ERISA. The Borrower will not, and will
not permit any of its Subsidiaries to, (a) terminate any Plan so as to result in
any material liability of the Borrower or any of its Affiliates to the PBGC, (b)
permit to exist any occurrence of any Reportable Event (as defined in Title IV
of ERISA), or any other event or condition, which presents a material risk of
such a termination by the PBGC of any Plan under Section 4042 of ERISA, or (c)
amend, or permit any member of the Controlled Group to amend, a Plan resulting
in an increase in current liability for the plan year such that the Borrower or
any member of the Controlled Group is required to provide security to such Plan
under Section 401(a)(29) of the Code.
Section 6.05. Merger or Consolidation; Asset Sales. The Borrower will
not, and will not permit any of its Subsidiaries to:
(a) merge or consolidate with or into any other Person, except that (i)
the Borrower may merge with any of its wholly-owned Subsidiaries, and (ii) any
of the Borrower's wholly-owned Subsidiaries may merge with any Person, provided
that immediately after giving effect to any such proposed transaction no Default
would exist and, in the case of any such merger to which the Borrower is a
party, the Borrower is the surviving corporation and, in the case of any such
merger to which a Subsidiary of the Borrower is a party and the Borrower is not
a party, a Subsidiary is the surviving corporation.
(b) sell, lease, transfer, or otherwise dispose of any assets or any
capital stock in any subsidiary, or any option, warrant or any other right to
acquire any such capital stock, other than (i) sales of inventory in the
ordinary course of business, (ii) dispositions of assets or any capital stock
outside the ordinary course of business to any Person for an aggregate
consideration of $5,000,000 or less for each such sale or related series of
sales, (iii) dispositions of assets or any capital stock outside the ordinary
course of business not otherwise permitted by (ii) above in an aggregate amount
for any fiscal year not to exceed $15,000,000, and (iv) dispositions of
equipment no longer used or useful in the business of the Borrower and its
Subsidiaries.
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Section 6.06. Permitted Investments. The Borrower will not, and will
not permit any of its Subsidiaries to, make or permit to exist any capital
contributions to, or make any equity investment in, or purchase or commit to
purchase any stock or other equity securities of or equity interests in any
Person, except the purchase of the Acquired Business in accordance with the
Purchase Agreement and the purchase of other businesses in the same general
lines of business as the Borrower and its subsidiaries on the date of this
Agreement provided that this Section 6.06 shall not prohibit the SEMCO Gas
Capitalization Adjustment. The Borrower will not (i) forgive or reduce the
principal of, or interest on, any Acceptable Instrument, (ii) postpone any date
fixed for any payment of principal of, or interest on, any Acceptable
Instrument, or (iii) make or agree to any other amendment, waiver, termination
or other modification of any Acceptable Instrument if, in the case of (i), (ii),
or (iii) such action could reasonably be expected to be adverse to the Borrower
or the Banks.
Section 6.07. Affiliate Transactions. The Borrower will not, and will
not permit any of its Subsidiaries to, make, directly or indirectly: (a) any
investment in any Affiliate of the Borrower (a "Restricted Affiliate"); (b) any
transfer, sale, lease, assignment or other disposal of any assets to any
Restricted Affiliate or any purchase or acquisition of assets from any
Restricted Affiliate; or (c) any arrangement or other transaction directly or
indirectly with or for the benefit of any Restricted Affiliate (including
guaranties and assumptions of obligations of a Restricted Affiliate); provided
that the Borrower and its Subsidiaries may enter into any arrangement or other
transaction with any Restricted Affiliate if the monetary or business
consideration arising therefrom would be substantially as advantageous to the
Borrower and its Subsidiaries taken as a whole as the monetary or business
consideration which it would obtain in a comparable arm's length transaction
with a Person not a Restricted Affiliate.
Section 6.08. Fixed Coverage Ratio. The Borrower will keep and
maintain the ratio of Net Income Available for Fixed Charges to Fixed Charges
for each period of four consecutive fiscal quarters of the Borrower at not less
than 2:00 to 1:00; provided, that if the Borrower or any Subsidiary of the
Borrower (the "Acquiring Entity") shall, during any such period, incur, create
or assume any Indebtedness ("Subject Indebtedness") for the purpose of financing
the acquisition (the "Subject Transaction") of additional property ("Acquired
Property"), then (i) in computing Fixed Charges for such period, there shall be
included therein Fixed Charges on Subject Indebtedness for that portion of such
period preceding the date of the Subject Transaction (the "Preacquisition
Portion" of such period), as though the Subject Indebtedness had been incurred
at the beginning of such period at an interest rate for the Preacquisition
Portion of such period equal to the interest rate of the Subject Indebtedness in
effect on the date of the Subject Transaction, and (ii) in computing Net Income
Available for Fixed Charges, there shall be included therein the net earnings or
net loss, as the case may be (the "Net Income") for the Preacquisition Portion
of such period, as though the Acquired Property had been owned by the Acquiring
Entity for the entire such period (such Net Income to be determined (x) prior to
any deduction for Interest Charges or any federal, state or other income taxes
and (y) on a cumulative basis for the Preacquisition Portion of such period).
Without limiting the generality of the foregoing, it is agreed that the
acquisition by the Borrower of the Acquired Business shall be a Subject
Transaction.
Section 6.09. Limitations on Debt. (a) The Borrower will at all times
keep and maintain Consolidated Adjusted Funded Debt in an amount (i) which is
less than 65% of Consolidated Adjusted Total Capitalization, and (ii) which,
when added to Guaranteed Amounts, is less than 70% of the sum of Consolidated
Adjusted Total Capitalization plus Guaranteed Amounts.
Section 6.10. Operative Documents. The Borrower will not amend,
supplement, waive or otherwise modify the Purchase Agreement, without the prior
written consent of the Majority Banks.
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Section 6.11. Subsidiary Debt. The Borrower will not permit any of its
Subsidiaries to incur, create, guaranty or assume any Funded Debt or permit to
exist any Funded Debt of any Subsidiary, except (i) pursuant to a Subsidiary
Guaranty Agreement, (ii) Funded Debt of Material Subsidiaries that does not
exceed at any time $50,000,000 in the aggregate for all Subsidiaries of the
Borrower (not including Funded Debt described in (iii) or (iv) of this Section
6.11), (iii) Funded Debt of Material Subsidiaries existing as of the date hereof
described on Schedule 6.11 and (iv) Funded Debt of Material Subsidiaries from
loans made by the Borrower in aggregate less than $280,000,000 evidenced by
Acceptable Instruments.
Section 6.12. Utility Subsidiaries. The Borrower will not create or
permit to exist any Utility Subsidiaries except the Temporary Subsidiaries.
ARTICLE VII
DEFAULT AND REMEDIES
Section 7.01. Events of Default. The occurrence of any of the
following events shall constitute an "Event of Default":
(a) Payment. The Borrower shall fail to (i) pay any principal of any
Note when due or (ii) pay any interest on any Note or any fee or other amount
payable hereunder or under any other Credit Document within three Business Days
of when the same becomes due and payable;
(b) Representation and Warranties. Any representation or warranty made
or deemed to be made (i) by the Borrower in this Agreement or in any other
Credit Document, (ii) by the Borrower (or any of its officers) in connection
with this Agreement or any other Credit Document, or (iii) by any Subsidiary in
any Credit Document shall prove to have been incorrect in any material respect
when made or deemed to be made;
(c) Covenant Breaches. (i) The Borrower shall (A) fail to perform or
observe any covenant contained in Article VI of this Agreement or (B) fail to
perform or observe any other term or covenant set forth in this Agreement or in
any other Credit Document which is not covered by clause (i)(A) above or Section
7.01(a) if such failure shall remain unremedied for 10 days after the earlier of
(1) written notice of such default shall have been given to the Borrower by the
Administrative Agent or any Bank, or (2) a Responsible Officer of the Borrower's
actual knowledge of such default or (ii) any Credit Party shall fail to perform
or observe any covenant made by it in any Credit Document to which it is a party
and such failure shall remain unremedied for 10 days after the earlier of (A)
written notice of such default shall have been given to the Borrower by the
Administrative Agent or any Bank, or (B) a Responsible Officer of the Borrower's
actual knowledge of such default;
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(d) Cross-Defaults. (i) The Borrower or any Subsidiary of the Borrower
shall fail to pay any principal of or premium or interest on its respective
Indebtedness which is outstanding in a principal amount of at least $2,000,000
individually or when aggregated with all Indebtedness of the Borrower or its
Subsidiaries so in default (but excluding Indebtedness evidenced by the Notes)
when the same becomes due and payable (whether by scheduled maturity, required
prepayment, acceleration, demand or otherwise), and such failure shall continue
after the applicable grace period, if any, specified in the agreement or
instrument relating to such Indebtedness; (ii) any other event shall occur or
condition shall exist under any agreement or instrument relating to Indebtedness
which is outstanding in a principal amount of at least $2,000,000 individually
or when aggregated with all Indebtedness of the Borrower and its Subsidiaries so
in default, and shall continue after the applicable grace period, if any,
specified in such agreement or instrument, if the effect of such event or
condition is to accelerate, or to permit the acceleration of, the maturity of
such Indebtedness prior to the stated maturity thereof; (iii) any such
Indebtedness shall be declared to be due and payable, or required to be prepaid
(other than by a regularly scheduled required prepayment or prepayments
contractually required from proceeds received upon the sale of any Property); or
(iv) the Borrower or any of its Subsidiaries is in default under any agreement
which could reasonably be expected to result in a Material Adverse Effect;
(e) Insolvency. The Borrower or any of its Subsidiaries shall
generally not pay its debts as such debts become due, or shall admit in writing
its inability to pay its debts generally, or shall make a general assignment for
the benefit of creditors; or any proceeding shall be instituted by or against
the Borrower or any of its Subsidiaries seeking to adjudicate it bankrupt or
insolvent, or seeking liquidation, winding up, reorganization, arrangement,
adjustment, protection, relief or composition of it or its debts under any law
relating to bankruptcy, insolvency or reorganization or relief of debtors, or
seeking the entry of an order for relief or the appointment of a receiver,
trustee or other similar official for it or for any substantial part of its
property and, in the case of any such proceeding instituted against the Borrower
or any such Subsidiary, either such proceeding shall remain undismissed for a
period of 30 days or any of the actions sought in such proceeding shall occur;
or the Borrower or any of its Subsidiaries shall take any action to authorize
any of the actions set forth above in this paragraph (e);
(f) Judgments. Any judgment or order for the payment of money in
excess of $1,000,000 (or judgments or orders more than $10,000,000 in the
aggregate) shall be rendered against the Borrower or any of its Subsidiaries and
is unpaid and is either (i) enforcement proceedings shall have been commenced by
any creditor upon such judgment or order and is continuing or (ii) there shall
be any period of 30 consecutive days during which a stay of enforcement of such
judgment or order, by reason of a pending appeal or otherwise, shall not be in
effect;
(g) Termination Events. Any Termination Event with respect to a Plan
shall have occurred, and, 30 days after notice thereof shall have been given to
the Borrower by the Administrative Agent or any Bank, (i) such Termination Event
shall have caused a material risk of Plan termination or liability for
withdrawal from the Plan as a substantive employer and (ii) the then present
value of such Plan's vested benefits exceeds the then current value of assets
accumulated in such Plan by more than the amount of $1,000,000 (or in the case
of a Termination Event involving the withdrawal of a "substantial employer" (as
defined in Section 4001(a)(2) of ERISA), the withdrawing employer's
proportionate share of such excess shall exceed such amount);
(h) Plan Withdrawals. The Borrower or any member of the Controlled
Group as employer under a Multiemployer Plan shall have made a complete or
partial withdrawal from such Multiemployer Plan and the plan sponsor of such
Multiemployer Plan shall have notified such withdrawing employer that such
employer has incurred a withdrawal liability in an annual amount exceeding
$5,000,000;
(i) Guaranty. The Subsidiary Guaranty Agreement shall at any time and
for any reason cease to be in full force and effect or shall be contested by any
party thereto, or any Subsidiary shall deny it has any liability or obligation
under the Subsidiary Guaranty Agreement;
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(j) Multiemployer Plan in Reorganization. The Borrower or any member
of the Controlled Group shall have been notified by the sponsor of a
Multiemployer Plan that such Multiemployer Plan is in reorganization or is being
terminated, within the meaning of Title IV of ERISA, if as a result of such
reorganization or termination the aggregate annual contributions of the Borrower
and the members of the Controlled Group to all Multiemployer Plans which are
then in reorganization or being terminated have been or will be increased over
the amounts contributed to such Multiemployer Plans for the respective plan
years which include the date hereof by an amount exceeding $5,000,000 in the
aggregate;
(k) Waiver of Minimum Funding Standard. The plan administrator of any
Plan applies under Section 412(d) of the Code for a waiver of the minimum
funding standards of Section 412(a) of the Code and any Bank reasonably believes
the substantial business hardship on which the application for the waiver is
based could reasonably be expected to subject either the Borrower or any member
of the Controlled Group to liability individually or in the aggregate in excess
of $5,000,000.
(l) Credit Documents. Any Credit Document shall at any time and for
any reason other than according to its terms cease to be in full force and
effect or shall be contested by any Credit Party, or any Credit Party shall deny
it has any liability or obligation under any Credit Document to which it is a
party; or
(m) Change in Control. A Change in Control shall occur.
Section 7.02. Optional Acceleration of Maturity. If any Event of
Default (other than an Event of Default pursuant to paragraph (e) of Section
7.01) shall have occurred and be continuing, then, and in any such event,
(a) the Administrative Agent (i) shall at the request, or may with the
consent, of the Majority Banks, by notice to the Borrower, declare the
obligation of each Bank to make any Advance to be terminated, whereupon the same
shall forthwith terminate, and (ii) shall at the request, or may with the
consent, of the Majority Banks, by notice to the Borrower, declare the Notes,
all interest thereon and all other amounts payable under this Agreement to be
forthwith due and payable, whereupon the Notes, all such interest and all such
amounts shall become and be forthwith due and payable in full, without
presentment, demand, protest or further notice of any kind (including any notice
of intent to accelerate or notice of acceleration), all of which are hereby
expressly waived by the Borrower; and
(b) the Administrative Agent shall at the request of, or may with the
consent of, the Majority Banks proceed to enforce rights and remedies under the
Subsidiary Guaranty Agreement, or any other Credit Document for the ratable
benefit of the Banks by appropriate proceedings.
Section 7.03. Automatic Acceleration of Maturity. If any Event of
Default pursuant to paragraph (e) of Section 7.01 shall occur,
(a) the obligation of each Bank to make any Advance shall immediately
and automatically be terminated and the Notes, all interest on the Notes and all
other amounts payable under this Agreement shall immediately and automatically
become and be due and payable in full, without presentment, demand, protest or
any notice of any kind (including any notice of intent to accelerate or notice
of acceleration), all of which are hereby expressly waived by the Borrower; and
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(b) the Administrative Agent shall at the request of, or may with the
consent of, the Majority Banks proceed to enforce rights and remedies under the
Subsidiary Guaranty Agreement or any other Credit Document for the ratable
benefit of the Banks by appropriate proceedings.
Section 7.04. Non-exclusivity of Remedies. No remedy conferred upon
the Administrative Agent or any Bank is intended to be exclusive of any other
remedy, and each remedy shall be cumulative of all other remedies existing by
contract, at law, in equity, by statute or otherwise.
Section 7.05. Right of Set-off. Upon the occurrence and during the
continuance of any Event of Default, each Bank (and each of its affiliates) is
hereby authorized at any time and from time to time, to the fullest extent
permitted by law, to set off and apply any and all deposits (general or special,
time or demand, provisional or final) at any time held and other indebtedness at
any time owing by such Bank (or any of its affiliates) to or for the credit or
the account of the Borrower against any and all of the obligations of the
Borrower now or hereafter existing under this Agreement and the Note held by
such Bank, irrespective of whether such Bank shall have made any demand under
this Agreement or such Note and although such obligations may be unmatured.
Each Bank agrees promptly to notify the Borrower after any such set-off and
application made by such Bank; provided, however, that the failure to give such
notice shall not affect the validity of such set-off and application. The
rights of each Bank under this Section are in addition to other rights and
remedies (including other rights of set-off) that such Bank may have.
Section 7.06. Application of Payments. Prior to an Event of Default,
all payments made hereunder shall be applied as directed by the Borrower, but
such payments are subject to the terms of this Agreement, including the
application of prepayments according to Section 2.07. During the existence of
an Event of Default, all payments and collections shall be applied to the Credit
Obligations in accordance with Section 2.10 first to any reimbursements and
indemnifications due to the Banks, then ratably to any accrued and unpaid
interest and fees due to the Banks, then ratably to the outstanding principal
balance of the Advances, and then to any other amounts owed.
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ARTICLE VIII
THE ADMINISTRATIVE AGENT
Section 8.01. Appointment, Powers, and Immunities. Each Bank hereby
irrevocably appoints and authorizes the Administrative Agent to act as its agent
under this Agreement and the other Credit Documents with such powers and
discretion as are specifically delegated to the Administrative Agent by the
terms of this Agreement and the other Credit Documents, together with such other
powers as are reasonably incidental thereto. The Administrative Agent (which
term as used in this sentence and in Section 8.05 and the first sentence of
Section 8.06 shall include its affiliates and its own and its affiliates'
officers, directors, employees and agents): (a) shall not have any duties or
responsibilities except those expressly set forth in this Agreement and shall
not be a trustee or fiduciary for any Bank; (b) shall not be responsible to the
Banks for any recital, statement, representation, or warranty (whether written
or oral) made in or in connection with any Credit Document or any certificate or
other document referred to or provided for in, or received by any of them under,
any Credit Document, or for the value, validity, effectiveness, genuineness,
enforceability or sufficiency of any Credit Document, or any other document
referred to or provided for therein or for any failure by any Credit Party or
any other Person to perform any of its obligations thereunder; (c) shall not be
responsible for or have any duty to ascertain, inquire into, or verify the
performance or observance of any covenants or agreements by any Credit Party or
any other Person or the satisfaction of any condition (including any condition
referred to in Article III) or to inspect the Property (including the books and
records) of any Credit Party or any other Person; (d) shall not be required to
initiate or conduct any litigation or collection proceedings under any Credit
Document; (e) shall not be responsible for or have any duty to conduct any due
diligence with respect to the Borrower, any of its Subsidiaries, the Acquired
Business, the Year 2000 Problem or any other matter; and (f) shall not be
responsible for any action taken or omitted to be taken by it under or in
connection with any Credit Document, except for its own gross negligence or
willful misconduct. The Administrative Agent may employ agents and
attorneys-in-fact and shall not be responsible for the negligence or misconduct
of any such agents or attorneys-in-fact selected by it with reasonable care.
Section 8.02. Reliance by Administrative Agent. The Administrative
Agent shall be entitled to rely upon any certification, notice, instrument,
writing or other communication (including any thereof by telephone or telecopy)
believed by it to be genuine and correct and to have been signed, sent or made
by or on behalf of the proper Person or Persons, and upon advice and statements
of legal counsel (including counsel for the Borrower or any of its
Subsidiaries), independent accountants and other experts selected by the
Administrative Agent. The Administrative Agent may deem and treat the payee of
any Note as the holder thereof for all purposes of this Agreement unless and
until the Administrative Agent receives and accepts an Assignment and Acceptance
executed in accordance with Section 9.06. As to any matters not expressly
provided for by this Agreement, the Administrative Agent shall not be required
to exercise any discretion or take any action, but shall be required to act or
to refrain from acting (and shall be fully protected in so acting or refraining
from acting) upon the instructions of the Majority Banks, and such instructions
shall be binding on all of the Banks; provided, that the Administrative Agent
shall not be required to take any action that exposes the Administrative Agent
to personal liability or that is contrary to any Credit Document or applicable
law; and provided further, that the Administrative Agent shall not be required
to take any action unless it shall first be indemnified to its satisfaction by
the Banks against any and all liability and expense which may be incurred by it
by reason of taking any such action.
Section 8.03. Defaults. The Administrative Agent shall not be deemed
to have knowledge or notice of the occurrence of a Default unless the
Administrative Agent has received written notice from a Bank or the Borrower
specifying such Default and stating that such notice is a "Notice of Default".
In the event that the Administrative Agent receives such a notice of the
occurrence of a Default, the Administrative Agent shall give prompt notice
thereof to the Banks. The Administrative Agent shall (subject to Section 8.02)
take such action with respect to such Default as shall reasonably be directed by
the Majority Banks, 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 as it shall deem advisable in the best interest of the
Banks.
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Section 8.04. Rights as Bank. With respect to its Commitment and the
Advances made by it, Bank of America (and any successor acting as Administrative
Agent) in its capacity as a Bank hereunder shall have the same rights and powers
hereunder as any other Bank and may exercise the same as though it were not
acting as the Administrative Agent, and the term "Bank" or "Banks" shall, unless
the context otherwise indicates, include the Administrative Agent in its
individual capacity. Bank of America (and any successor acting as Administrative
Agent) and its affiliates may (without having to account therefor to any Bank)
accept deposits from, lend money to, make investments in, provide services to,
and generally engage in any kind of lending, trust, or other business with any
Credit Party or any of its Subsidiaries or affiliates as if it were not acting
as Administrative Agent, and Bank of America (and any successor acting as
Administrative Agent) and its affiliates may accept fees and other consideration
from the Borrower or any of its Subsidiaries or affiliates for services in
connection with this Agreement or otherwise without having to account for the
same to the Banks.
Section 8.05. INDEMNIFICATION. THE BANKS AGREE TO INDEMNIFY THE
ADMINISTRATIVE AGENT (TO THE EXTENT NOT REIMBURSED BY THE BORROWER HEREUNDER,
BUT WITHOUT LIMITING THE OBLIGATIONS OF THE BORROWER HEREUNDER) RATABLY IN
ACCORDANCE WITH THEIR RESPECTIVE COMMITMENTS, FOR ANY AND ALL LIABILITIES,
OBLIGATIONS, LOSSES, DAMAGES, PENALTIES, ACTIONS, JUDGMENTS, SUITS, COSTS,
EXPENSES (INCLUDING ATTORNEYS' FEES) OR DISBURSEMENTS OF ANY KIND AND NATURE
WHATSOEVER THAT MAY BE IMPOSED ON, INCURRED BY OR ASSERTED AGAINST THE
ADMINISTRATIVE AGENT (INCLUDING BY ANY BANK) IN ANY WAY RELATING TO OR ARISING
OUT OF ANY CREDIT DOCUMENT OR THE TRANSACTIONS CONTEMPLATED BY ANY CREDIT
DOCUMENT OR ANY ACTION TAKEN OR OMITTED BY THE ADMINISTRATIVE AGENT UNDER ANY
CREDIT DOCUMENT (INCLUDING ANY OF THE FOREGOING ARISING FROM THE NEGLIGENCE OF
THE ADMINISTRATIVE AGENT); PROVIDED THAT NO BANK SHALL BE LIABLE FOR ANY OF THE
FOREGOING TO THE EXTENT THEY ARISE FROM THE GROSS NEGLIGENCE OR WILLFUL
MISCONDUCT OF THE PERSON TO BE INDEMNIFIED. Without limitation of the
foregoing, each Bank agrees to reimburse the Administrative Agent promptly upon
demand for its ratable share of any costs or expenses payable by the Borrower
under Section 9.04, to the extent that the Administrative Agent is not promptly
reimbursed for such costs and expenses by the Borrower; provided, however, that
upon recovery of any or all of such costs and expenses by the Administrative
Agent from the Borrower, the Administrative Agent shall remit to each Bank its
ratable share of such amounts so recovered. The agreements contained in this
Section shall survive payment in full of the Advances and all other amounts
payable under this Agreement.
Section 8.06. Non-Reliance on Administrative Agent and Other Banks.
Each Bank agrees that it has, independently and without reliance on the
Administrative Agent or any other Bank, and based on such documents and
information as it has deemed appropriate, made its own credit analysis of the
Credit Parties and their Subsidiaries and decision to enter into this Agreement
and that it will, independently and without reliance upon the Administrative
Agent or any other Bank, and based on such documents and information as it shall
deem appropriate at the time, continue to make its own analysis and decisions in
taking or not taking action under the Credit Documents. Except for notices,
reports, and other documents and information expressly required to be furnished
to the Banks by the Administrative Agent hereunder, the Administrative Agent
shall not have any duty or responsibility to provide any Bank with any credit or
other information concerning the affairs, financial condition or business of the
Borrower or any of its Subsidiaries or affiliates that may come into the
possession of the Administrative Agent or any of its affiliates.
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Section 8.07. Resignation of Administrative Agent. The Administrative
Agent may resign at any time by giving notice thereof to the Banks and the
Borrower. Upon any such resignation, the Majority Banks shall have the right to
appoint a successor Administrative Agent (so long as no Default has occurred and
is continuing, subject to the consent of the Borrower which shall not be
unreasonably withheld). If no successor Administrative Agent shall have been so
appointed by the Majority Banks and shall have accepted such appointment within
30 days after the retiring Administrative Agent's giving of notice of
resignation, then the retiring Administrative Agent may, on behalf of the Banks,
appoint a successor Administrative Agent (so long as no Default has occurred and
is continuing, subject to the consent of the Borrower which shall not be
unreasonably withheld) which shall be an Eligible Assignee. Upon the acceptance
of any appointment as Administrative Agent hereunder by a successor, such
successor shall thereupon succeed to and become vested with all the rights,
powers, discretion, privileges, and duties of the retiring Administrative Agent
and the retiring Administrative Agent shall be discharged from its duties and
obligations hereunder and under the other Credit Documents. After any retiring
Administrative Agent's resignation hereunder as Administrative Agent, the
provisions of this Article VIII 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 IX
MISCELLANEOUS
Section 9.01. Amendments, Etc. No amendment or waiver of any provision
of this Agreement, the Notes or any other Credit Document, nor consent to any
departure by the Borrower or any other Credit Party therefrom, shall in any
event be effective unless the same shall be in writing and signed by the
Majority Banks and the Borrower, and then such waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
given; provided, however, that no amendment, waiver or consent shall, unless in
writing and signed by all the Banks and the Borrower, do any of the following:
(a) waive any of the conditions specified in Section 3.01 or 3.02, (b) increase
the Commitment of any Bank, (c) reduce the principal of, or interest on, the
Notes or any fees or other amounts payable hereunder or under any other Credit
Document, (d) postpone any date fixed for any payment of principal of, or
interest on, the Notes or any fees or other amounts payable hereunder, (e)
change the number of Banks which shall be required for the Banks or any of them
to take any action hereunder or under any other Credit Document, (f) amend
Section 2.12 or this Section 9.01, (g) release any Credit Party from its
obligations under any Credit Document to which it is a party, except pursuant to
the terms of the applicable Credit Document; or (h) amend the definition of
"Majority Banks"; and provided, further, that no amendment, waiver or consent
shall, unless in writing and signed by the Administrative Agent in addition to
the Banks required above to take such action, affect the rights or duties of the
Administrative Agent under this Agreement or any other Credit Document.
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Section 9.02. Notices, Etc. All notices and other communications shall
be in writing (including telecopy or telex) and mailed, telecopied, telexed,
hand delivered or delivered by a nationally recognized overnight courier, if to
the Borrower or to a Guarantor, at the Borrower's address at 000 Xxxxx Xxxxxx,
Xxxx Xxxxx, Xxxxxxxx 00000, Attention: Xxxxx Xxxxx (telecopy: (000) 000-0000);
if to any Bank, at its Applicable Lending Office specified opposite its name on
Schedule 1.01(a); if to the Administrative Agent, at its address at 000
Xxxxxxxxx, 0xx xxxxx, Xxxxxxx, Xxxxx 00000, Attention: Xxxx Xxxxxxx (telecopy:
(000) 000-0000; telephone: (000) 000-0000) with a copy to Xxxxxx Xxxxxxxx, 000
Xxxx Xxxxxx, 00xx Xxxxx, Xxxxxx, Xxxxx, 00000, (telecopy: (000) 000-0000); or,
as to each party, at such other address or telecopy number as shall be
designated by such party in a written notice to the other parties. All such
notices and communications shall, when mailed, telecopied, telexed,
hand-delivered or delivered by overnight courier, be effective three days after
deposited in the mails, when telecopy transmission is completed, when confirmed
by telex answer-back or when delivered, respectively, except that notices and
communications to the Administrative Agent pursuant to Article II or VIII shall
not be effective until received by the Administrative Agent.
Section 9.03. No Waiver; Remedies. No failure on the part of any Bank
or the Administrative Agent to exercise, and no delay in exercising, any right
hereunder or under any Note shall operate as a waiver thereof; nor shall any
single or partial exercise of any such right preclude any other or further
exercise thereof or the exercise of any other right. The remedies provided in
this Agreement are cumulative and not exclusive of any remedies provided by law.
Section 9.04. Costs and Expenses. The Borrower agrees to pay on demand
all reasonable costs and expenses of the Administrative Agent in connection with
the syndication, preparation, execution, delivery, administration, modification
or amendment of, or in connection with due diligence regarding, this Agreement,
the other Credit Documents and the other documents to be delivered hereunder,
including the reasonable fees and expenses of counsel for the Administrative
Agent (including the cost of internal counsel) with respect thereto and with
respect to advising the Administrative Agent as to its rights and
responsibilities under the Credit Documents. The Borrower further agrees to pay
on demand all reasonable costs and expenses of the Administrative Agent and the
Banks, if any (including reasonable attorneys' fees and expenses and the cost of
internal counsel), in connection with the enforcement (whether through
negotiations, legal proceedings or otherwise) of the Credit Documents and the
other documents to be delivered hereunder. Without prejudice to the survival of
any other agreement of the Borrower hereunder, the agreements and obligations of
the Borrower contained in this Section 9.04 shall survive the payment in full of
the Advances and all other amounts payable under this Agreement.
Section 9.05. Binding Effect. This Agreement shall become effective
when it shall have been executed by the Borrower and the Administrative Agent,
and when the Administrative Agent shall have, as to each Bank, either received a
counterpart of this Agreement executed by such Bank or been notified by such
Bank that such Bank has executed it and thereafter shall be binding upon and
inure to the benefit of the Borrower, the Administrative and each Bank and their
respective successors and assigns, except that the Borrower shall not have the
right to assign its rights or delegate its duties under this Agreement or any
interest in this Agreement without the prior written consent of each Bank.
Section 9.06. Bank Assignments and Participations.
(a) Assignments. Each Bank may assign to one or more Eligible Assignees
all or a portion of its rights and obligations under this Agreement (including
all or a portion of its Advance, its Note and its Commitment); provided,
however, that
(i) each such assignment shall be to an Eligible Assignee;
(ii) except in the case of an assignment to another Bank or an
assignment of all of a Bank's rights and obligations under this Agreement, any
such partial assignment shall be in an amount equal to at least $5,000,000 or an
integral multiple of $1,000,000 in excess thereof;
(iii) each such assignment by a Bank shall be of a constant, and not
varying, percentage of all of its rights and obligations under this Agreement
and the Notes; and
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(iv) the parties to such assignment shall execute and deliver to the
Administrative Agent for its acceptance an Assignment and Acceptance in the form
of Exhibit A, together with any Note subject to such assignment and a processing
fee of $3,500.
Upon execution, delivery, and acceptance of such Assignment and Acceptance and
payment of the processing fee, the assignee thereunder shall be a party to this
Agreement and, to the extent of such assignment, have the obligations, rights,
and benefits of a Bank hereunder and the assigning Bank shall, to the extent of
such assignment, relinquish its rights and be released from its obligations
under this Agreement. Upon the consummation of any assignment pursuant to this
Section, the assignor, the Administrative Agent and the Borrower shall make
appropriate arrangements so that, if required, new Notes are issued to the
assignor and the assignee. If the assignee is not incorporated under the laws
of the United States of America or a state thereof, it shall deliver to the
Borrower and the Administrative Agent certification as to exemption from
deduction or withholding of Taxes in accordance with Section 2.11.
(b) The Register. The Administrative Agent shall maintain a copy of
each Assignment and Acceptance delivered to and accepted by it and a register
for the recordation of the names and addresses of the Banks and the Commitment
of, and principal amount of the Advances owing to, each Bank from time to time
(the "Register"). The entries in the Register shall be conclusive and binding
for all purposes, absent manifest error, and the Borrower, the Administrative
Agent and the Banks may treat each Person whose name is recorded in the Register
as a Bank hereunder for all purposes of this Agreement. The Register shall be
available for inspection by the Borrower or any Bank at any reasonable time and
from time to time upon reasonable prior notice.
(c) Procedures. Upon its receipt of an Assignment and Acceptance
executed by the parties thereto, together with any Note subject to such
assignment and payment of the processing fee, the Administrative Agent shall, if
such Assignment and Acceptance has been completed and is in substantially the
form of Exhibit A, (i) accept such Assignment and Acceptance, (ii) record the
information contained therein in the Register and (iii) give prompt notice
thereof to the parties thereto.
(d) Participations. Each Bank may sell participations to one or more
Persons in all or a portion of its rights and obligations under this Agreement
(including all or a portion of its Commitment and its Advance); provided,
however, that (i) such Bank's obligations under this Agreement shall remain
unchanged, (ii) such Bank shall remain solely responsible to the other parties
to this Agreement for the performance of such obligations, (iii) the participant
shall be entitled to the benefit of the yield protection provisions of such Bank
contained in Article II and the right of set-off of such Bank contained in
Section 7.05, and (iv) the Borrower shall continue to deal solely and directly
with such Bank in connection with such Bank's rights and obligations under this
Agreement, and such Bank shall retain the sole right to enforce the obligations
of the Borrower relating to its Advances and its Note and to approve any
amendment, modification or waiver of any provision of this Agreement (other than
amendments, modifications or waivers decreasing the amount of principal of or
the rate at which interest is payable on such Advances or Note, extending any
scheduled principal payment date or date fixed for the payment of interest on
such Advances or Note or extending its Commitment).
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(e) Federal Reserve Bank. Notwithstanding any other provision set
forth in this Agreement, any Bank may at any time assign and pledge all or any
portion of its Advance and its Note to any Federal Reserve Bank as collateral
security pursuant to Regulation A and any Operating Circular issued by such
Federal Reserve Bank. No such assignment shall release the assigning Bank from
its obligations hereunder.
(f) Confidentiality. Any Bank may furnish any information concerning
the Borrower or any of its Subsidiaries in the possession of such Bank from time
to time to assignees and participants (including prospective assignees and
participants), subject, however, to the provisions of Section 9.08.
Section 9.07. INDEMNIFICATION. THE BORROWER AGREES TO INDEMNIFY AND
HOLD HARMLESS THE ADMINISTRATIVE AGENT, THE ARRANGER AND EACH BANK AND EACH OF
THEIR RESPECTIVE AFFILIATES AND THEIR RESPECTIVE OFFICERS, DIRECTORS, EMPLOYEES,
AGENTS AND ADVISORS (EACH AN "INDEMNIFIED PARTY") FROM AND AGAINST ANY AND ALL
CLAIMS, DAMAGES, LOSSES, LIABILITIES, COSTS AND EXPENSES (INCLUDING (A)
REASONABLE ATTORNEYS' FEES, INCLUDING THE ALLOCATED COST OF INTERNAL COUNSEL,
AND (B) SETTLEMENT COSTS) THAT MAY BE INCURRED BY OR ASSERTED OR AWARDED AGAINST
ANY INDEMNIFIED PARTY, IN EACH CASE ARISING OUT OF OR IN CONNECTION WITH OR BY
REASON OF (INCLUDING IN CONNECTION WITH ANY INVESTIGATION, ACTUAL OR THREATENED
LITIGATION OR PROCEEDING OR PREPARATION OF DEFENSE IN CONNECTION THEREWITH) THE
CREDIT DOCUMENTS, ANY OF THE TRANSACTIONS CONTEMPLATED HEREIN OR THE ACTUAL OR
PROPOSED USE OF THE PROCEEDS OF THE ADVANCES (INCLUDING ANY OF THE FOREGOING
ARISING FROM THE NEGLIGENCE OF THE INDEMNIFIED PARTY), EXCEPT TO THE EXTENT SUCH
CLAIM, DAMAGE, LOSS, LIABILITY, COST OR EXPENSE IS FOUND IN A FINAL,
NON-APPEALABLE JUDGMENT BY A COURT OF COMPETENT JURISDICTION TO HAVE RESULTED
FROM SUCH INDEMNIFIED PARTY'S GROSS NEGLIGENCE OR WILLFUL MISCONDUCT. IN THE
CASE OF AN INVESTIGATION, LITIGATION OR OTHER PROCEEDING TO WHICH THE INDEMNITY
IN THIS SECTION 9.07 APPLIES, SUCH INDEMNITY SHALL BE EFFECTIVE WHETHER OR NOT
SUCH INVESTIGATION, LITIGATION OR PROCEEDING IS BROUGHT BY THE BORROWER, ITS
DIRECTORS, SHAREHOLDERS OR CREDITORS OR AN INDEMNIFIED PARTY OR ANY OTHER PERSON
OR ANY INDEMNIFIED PARTY IS OTHERWISE A PARTY THERETO AND WHETHER OR NOT THE
TRANSACTIONS CONTEMPLATED HEREBY ARE CONSUMMATED. THE BORROWER AGREES NOT TO
ASSERT ANY CLAIM AGAINST THE ADMINISTRATIVE AGENT, THE ARRANGER, ANY BANK, ANY
OF THEIR RESPECTIVE AFFILIATES OR ANY OF THEIR RESPECTIVE DIRECTORS, OFFICERS,
EMPLOYEES, ATTORNEYS, AGENTS AND ADVISERS, ON ANY THEORY OF LIABILITY, FOR
SPECIAL, INDIRECT, CONSEQUENTIAL OR PUNITIVE DAMAGES ARISING OUT OF OR OTHERWISE
RELATING TO THE CREDIT DOCUMENTS, ANY OF THE TRANSACTIONS CONTEMPLATED HEREIN OR
THE ACTUAL OR PROPOSED USE OF THE PROCEEDS OF THE ADVANCES.
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Section 9.08. Confidentiality. The Administrative Agent and each Bank
(each, a "Lending Party") agrees to make reasonable efforts to keep confidential
any information furnished or made available to it by or on behalf of the
Borrower or any of its Subsidiaries pursuant to this Agreement that is marked
confidential; provided that nothing herein shall prevent any Lending Party from
disclosing such information (a) to any other Lending Party or any affiliate of
any Lending Party, or any officer, director, employee, agent or advisor of any
Lending Party or affiliate of any Lending Party, (b) to any other Person if
reasonably incidental to the administration of the credit facility provided
herein, (c) as required by any law, rule, or regulation, (d) upon the order of
any court or agency, (e) upon the request or demand of any regulatory agency or
authority, (f) that is or becomes available to the public or that is or becomes
available to any Lending Party other than as a result of a disclosure by any
Lending Party prohibited by this Agreement, (g) in connection with any
litigation to which such Lending Party or any of its affiliates may be a party,
(h) to the extent necessary in connection with the exercise of any remedy under
this Agreement or any other Loan Document, and (i) subject to provisions
substantially similar to those contained in this Section, to any actual or
proposed participant or assignee.
Section 9.09. Execution in Counterparts. This Agreement may be executed in
any number of counterparts and by different parties to this Agreement in
separate counterparts, each of which when so executed shall be deemed to be an
original and all of which taken together shall constitute one and the same
agreement.
Section 9.10. Survival of Representations, etc. All representations
and warranties contained in this Agreement or made in writing by or on behalf of
the Borrower in connection herewith shall survive the execution and delivery of
this Agreement and the Credit Documents, the making of the Advances and any
investigation made by or on behalf of the Banks, none of which investigations
shall diminish any Bank's right to rely on such representations and warranties.
All obligations of the Borrower provided for in Sections 2.08, 2.09, 2.11(c),
9.04 and 9.07 shall survive any termination of this Agreement and repayment in
full of the Credit Obligations.
Section 9.11. Severability. In case one or more provisions of this
Agreement or the other Credit Documents shall be invalid, illegal or
unenforceable in any respect under any applicable law, the validity, legality
and enforceability of the remaining provisions contained herein or therein shall
not be affected or impaired thereby.
Section 9.12. Maximum Rate. At all such times, if any, as Chapter 303
("Chapter 303") of the Texas Finance Code shall establish a Maximum Rate, the
Maximum Rate shall be the weekly ceiling (as such term is defined in Chapter
303) from time to time in effect. In no event shall the provisions of Chapter
346 of the Texas Finance Code, as amended (formerly found in Article 5069,
Chapter 15 of the Revised Civil Statutes of Texas) (which regulates certain
revolving credit loan accounts and revolving tri-party accounts) apply to any
Loan made hereunder.
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Section 9.13. Usury Not Intended. It is the intent of the Borrower and
each Bank in the execution and performance of this Agreement and the other
Credit Documents to contract in strict compliance with applicable usury laws,
including conflicts of law concepts, governing the Advances of each Bank
including such applicable laws of the State of Texas, if any, and the United
States of America from time to time in effect. In furtherance thereof, the
Banks and the Borrower stipulate and agree that none of the terms and provisions
contained in this Agreement or the other Credit Documents shall ever be
construed to create a contract to pay, as consideration for the use, forbearance
or detention of money, interest at a rate in excess of the Maximum Rate and that
for purposes of this Agreement "interest" shall include the aggregate of all
charges which constitute interest under such laws that are contracted for,
charged or received under this Agreement; and in the event that, notwithstanding
the foregoing, under any circumstances the aggregate amounts taken, reserved,
charged, received or paid on the Advances, include amounts which by applicable
law are deemed interest which would exceed the Maximum Rate, then such excess
shall be deemed to be a mistake and each Bank receiving same shall credit the
same on the principal of its Notes (or if such Notes shall have been paid in
full, refund said excess to the Borrower). In the event that the maturity of
the Notes are accelerated by reason of any election of the holder thereof
resulting from any Event of Default under this Agreement or otherwise, or in the
event of any required or permitted prepayment, then such consideration that
constitutes interest may never include more than the Maximum Rate and excess
interest, if any, provided for in this Agreement or otherwise shall be canceled
automatically as of the date of such acceleration or prepayment and, if
theretofore paid, shall be credited on the applicable Notes (or, if the
applicable Notes shall have been paid in full, refunded to the Borrower). In
determining whether or not the interest paid or payable under any specific
contingencies exceeds the Maximum Rate, the Borrower and the Banks shall to the
maximum extent permitted under applicable law amortize, prorate, allocate and
spread in equal parts during the period of the full stated term of the Notes all
amounts considered to be interest under applicable law at any time contracted
for, charged, received or reserved in connection with the Credit Obligations.
The provisions of this Section shall control over all other provisions of this
Agreement or the other Credit Documents which may be in apparent conflict
herewith.
Section 9.14. Governing Law. This Agreement and the other Credit
Documents shall be governed by, and construed and enforced in accordance with,
the laws of the State of Texas.
Section 9.15. Waiver of Jury. EACH OF THE BORROWER, THE OTHER CREDIT
PARTIES, THE BANKS AND THE ADMINISTRATIVE AGENT HEREBY IRREVOCABLY WAIVES ANY
AND ALL RIGHT TO TRIAL BY JURY IN RESPECT OF ANY LEGAL PROCEEDING ARISING OUT OF
OR RELATING TO THIS AGREEMENT, ANY OTHER CREDIT DOCUMENT OR ANY OF THE
TRANSACTIONS CONTEMPLATED HEREBY.
PURSUANT TO SECTION 26.02 OF THE TEXAS BUSINESS AND COMMERCE CODE, A LOAN
AGREEMENT IN WHICH THE AMOUNT INVOLVED IN THE LOAN AGREEMENT EXCEEDS $50,000 IN
VALUE IS NOT ENFORCEABLE UNLESS THE LOAN AGREEMENT IS IN WRITING AND SIGNED BY
THE PARTY TO BE BOUND OR THAT PARTY'S AUTHORIZED REPRESENTATIVE.
THE RIGHTS AND OBLIGATIONS OF THE PARTIES TO AN AGREEMENT SUBJECT TO THE
PRECEDING PARAGRAPH SHALL BE DETERMINED SOLELY FROM THE WRITTEN LOAN AGREEMENT
AND ANY FEE LETTERS, AND ANY PRIOR ORAL AGREEMENTS BETWEEN THE PARTIES ARE
SUPERSEDED BY AND MERGED INTO THE LOAN AGREEMENT. THIS WRITTEN AGREEMENT AND
THE CREDIT DOCUMENTS, AS DEFINED IN THIS AGREEMENT, REPRESENT THE FINAL
AGREEMENT AMONG THE PARTIES (AND SUPERSEDE THE COMMITMENT LETTER DATED JULY 1,
1999) AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR
SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.
THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
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EXECUTED as of the day first above written.
BORROWER:
SEMCO ENERGY, INC.
By: /s/Xxxxxxxxx Xxxxxxx
Name: Xxxxxxxxx Xxxxxxx
Title: Senior Vice President and CFO
ADMINISTRATIVE AGENT:
BANK OF AMERICA, N.A., as Administrative Agent
By: /s/Xxxx X. Xxxxxxx
Name: Xxxx X. Xxxxxxx
Title: Managing Director
SYNDICATION AGENT:
BANK ONE, NA
(Main Office - Chicago)
By: /s/Xxxxxxx X. Xxxxx
Name: Xxxxxxx X. Xxxxx
Title: Vice President
BANKS:
Commitment: BANK OF AMERICA, N.A.
$40,000,000 By: /s/Xxxx X. Xxxxxxx
Name: Xxxx X. Xxxxxxx
Title: Managing Director
$40,000,000 BANK ONE, NA
(Main Office - Chicago)
By: /s/Xxxxxxx X. Xxxxx
Name: Xxxxxxx X. Xxxxx
Title: Vice President
BANK HAPOALIM B.M.
$15,000,000 By: /s/Xxxxxxx X. Xxxxx
Name: Xxxxxxx X. Xxxxx
Title: Vice President-Senior Lending Officer
By: /s/Xxxxxx X. Xxxxxxxx
Name: Xxxxxx X. Xxxxxxxx
Title: Vice President
BANK OF MONTREAL
$ 17,500,000 By: /s/Xxxxxxx X. Xxxxxxxxx
Name: Xxxxxxx X. Xxxxxxxxx
Title: Director
THE BANK OF NEW YORK
$ 25,000,000 By: /s/Xxxx X. Xxxx
Name: Xxxx X. Xxxx
Title: Vice President
COMERICA BANK
$25,000,000 By: /s/Xxxxx X. Xxxx
Name: Xxxxx X. Xxxx
Title: Vice President
CREDIT LYONNAIS NEW YORK BRANCH
$25,000,000 By: /s/Phillippe Soustra
Name: Phillippe Soustra
Title: Senior Vice President
FIFTH THIRD BANK, NORTHWESTERN OHIO, N.A.
$17,500,000 By: /s/Xxxx X. Xxxx
Name: Xxxx X. Xxxx
Title: Senior Vice President
FIRST UNION NATIONAL BANK
$25,000,000 By: /s/Xxx X. Xxxxx
Name: Xxx X. Xxxxx
Title: Vice President
THE FUJI BANK, LIMITED
$17,500,000 By: /s/Xxxxx X. Xxxxxxxx
Name: Xxxxx X. Xxxxxxxx
Title: Senior Vice President & Group Head
NATIONAL AUSTRALIA BANK LIMITED (A.C.N. 004044937)
$25,000,000 By: /s/Xxxxx X. Campiqua
Name: Xxxxx X. Campiqua
Title: Vice President
NATIONAL CITY BANK
$17,500,000 By: /s/Xxxxxxx X. Xxxxxxxx
Name: Xxxxxxx X. Xxxxxxxx
Title: Vice President
