-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, M+ovq2RawxHERvGdyr5SJ+36sU/IR1gse2d1GYHjxKqN4tzbvCy8EJ5XQML0uT21 6aPUqIUyzsRTGS8pGftHGg== 0000853890-02-000013.txt : 20021107 0000853890-02-000013.hdr.sgml : 20021107 20021106195253 ACCESSION NUMBER: 0000853890-02-000013 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 8 CONFORMED PERIOD OF REPORT: 20021101 ITEM INFORMATION: Acquisition or disposition of assets ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 20021107 FILER: COMPANY DATA: COMPANY CONFORMED NAME: KANEB PIPE LINE PARTNERS L P CENTRAL INDEX KEY: 0000853890 STANDARD INDUSTRIAL CLASSIFICATION: WHOLESALE-PETROLEUM BULK STATIONS & TERMINALS [5171] IRS NUMBER: 752287571 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 033-30330 FILM NUMBER: 02811750 BUSINESS ADDRESS: STREET 1: 2435 NORTH CENTRAL EXPRESSWAY CITY: RICHARDSON STATE: TX ZIP: 75080 BUSINESS PHONE: 9726994031 8-K 1 kpp8-kkoch.txt KPP FORM 8-K KOCH ACQUISITION - -------------------------------------------------------------------------------- UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934 Date of Report (Date of earliest event reported): November 1, 2002 KANEB PIPE LINE PARTNERS, L.P. (Exact name of registrant as specified in charter) Delaware 001-5083 75-2287571 (State of Incorporation) (Commission File No.) (I.R.S. Employer Identification No.) 2435 North Central Expressway Richardson, Texas 75080 (Address of Principal Executive Offices) (Zip Code) Registrant's telephone number, including area code: (972) 699-4062 - -------------------------------------------------------------------------------- Item 2. Acquisition or Disposition of Assets. On November 1, 2002, Kaneb Pipe Line Operating Partnership, L.P., a subsidiary of the Registrant, acquired the anhydrous ammonia pipeline system of Koch Pipeline Company, L.P. ("Koch") for approximately $140 million in cash. The acquired Koch ammonia pipeline operation encompasses approximately 2,000 miles of anhydrous ammonia pipeline which runs from the Louisiana Gulf Coast to the upper Midwest states and is the largest fertilizer pipeline in the country. Item 7. Financial Statements and Exhibits. Exhibits. 10.1 Press Release, dated November 5, 2002. 10.2 Asset Purchase and Sale Agreement, dated as of September 17, 2002, by and between Koch Pipeline Company, L.P., Koch Fertilizer Storage and Terminal Company and Kaneb Pipe Line Operating Partnership, L.P., filed herewith. 10.3 First Amendment to Asset Purchase and Sale Agreement, dated as of October 31, 2002, by and between Koch Pipeline Company, L.P., Koch Fertilizer Storage and Terminal Company and Kaneb Pipe Line Operating Partnership, L.P., filed herewith. 10.4 Bridge Loan Agreement, dated as of November 1, 2002, by and between Kaneb Operating Partnership, L.P., Kaneb Pipe Line Partners, L.P., the Lenders and SunTrust Bank as Administrative Agent, filed herewith. 10.5 Amendment No. 1 to Revolving Credit Agreement, dated as of July 31, 2002, by and between Kaneb Operating Partnership, L.P., Kaneb Pipe Line Partners, L.P., the Lenders and SunTrust Bank as Administrative Agent, filed herewith. 10.6 Amendment No. 2 to Revolving Credit Agreement, dated as of October 31, 2002, by and between Kaneb Operating Partnership, L.P., Kaneb Pipe Line Partners, L.P., the Lenders and SunTrust Bank as Administrative Agent, filed herewith. 10.7 Subsidiary Guaranty Agreement, dated as of November 1, 2002, among each of the Subsidiaries, Kaneb Pipe Line Operating Partnership, L.P. and SunTrust Bank, filed herewith. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. KANEB PIPE LINE PARTNERS, L.P. By: Kaneb Pipe Line Company LLC, as General Partner Dated November _____, 2002 ------//s//-------------------------------- Howard C. Wadsworth Vice President, Treasurer and Secretary EX-10 2 exh101.txt EXHIBIT 10.1 NEWS RELEASE For immediate release For more information, contact: Investor Relations (972) 699-4041 Email: investor@kaneb.com KANEB CLOSES PIPELINE ACQUISITION DALLAS, TEXAS (November 1, 2002) - Kaneb announced today that its operating subsidiary, Kaneb Pipe Line Operating Partnership, L.P. acquired the anhydrous ammonia pipeline system from Koch Pipeline Company, L.P. for $140 million. The acquisition was financed with bank debt. The Kaneb Companies are Kaneb Services LLC (NYSE: KSL) and Kaneb Pipe Line Partners, L.P. (NYSE: KPP, "the Partnership"). Kaneb Services LLC's wholly owned subsidiary, Kaneb Pipe Line Company LLC, is the Partnership's General Partner. The approximately 2,000 mile anhydrous ammonia pipeline system runs from the Louisiana Gulf Coast to the upper Midwest states. It is the largest fertilizer pipeline in the country. The system has connections with three third party owned deep-water import terminals, eleven third party production and fertilizer upgrade facilities and twenty-three third party delivery terminals and has an interconnect in the Midwest with another fertilizer pipeline. The pipeline system has a current delivery capacity of approximately 2.2 million tons of product annually and includes a 1,500 ton underground storage and terminal facility in Missouri. ABOUT KANEB KANEB is a single business represented by two separate publicly traded entities on the New York Stock Exchange. KANEB's business is focused on mid-stream energy assets -- refined petroleum product pipelines, and petroleum and specialty liquids storage and terminaling facilities. KANEB is a major transporter of refined petroleum products in the Midwest and is the third largest independent liquids terminaling company in the world. Worldwide operations include 78 facilities in 26 states, the District of Columbia, Canada, the Netherlands Antilles, Australia, New Zealand and the United Kingdom. Its publicly traded entities are Kaneb Services LLC (NYSE: KSL) and Kaneb Pipe Line Partners, L.P., (NYSE: KPP, "the Partnership"). Kaneb Services LLC is a unique limited liability company, the only publicly traded, cash distributing entity taxed as a partnership that owns the general partner interest of another publicly traded master limited partnership. KSL's assets are the KPP general partner interest and 5.1 million KPP partnership units. Through a wholly owned subsidiary, Kaneb Pipe Line Company LLC, KSL manages and operates the KPP pipeline and terminaling assets. Another KSL subsidiary provides wholesale fuel marketing services. Kaneb Pipe Line Partners, L.P., a master limited partnership, was formed in 1989 to own a 2,075 mile common carrier pipeline system from Kansas to North Dakota that has been managed by Kaneb Pipe Line Company LLC since 1953. Pipeline acquisitions in 1995 and 1998 added 725 miles of pipeline in Colorado, Iowa, South Dakota and Wyoming. The Partnership entered the liquids terminaling business with a large acquisition in 1993, and has more than tripled the size of this operation through subsequent acquisitions. In 2001, the Partnership completed a $165 million acquisition of seven West Coast, U.S. terminals. In 2002, the Partnership completed a $300 million acquisition of two world-class terminaling facilities located in Point Tupper, Nova Scotia, Canada and on the island of St. Eustatius in the Netherlands Antilles and the acquisition of eight bulk liquid storage terminals in Australia and New Zealand. ### EX-10 3 exh102.txt EXHIBIT 10.2 KOCH PURCHASE AGREEMENT Exhibit 10.2 ASSET PURCHASE AND SALE AGREEMENT Between KOCH PIPELINE COMPANY, L.P. ("KPL") KOCH FERTILIZER STORAGE AND TERMINAL COMPANY ("KFS&T") (together, "Seller") and KANEB PIPE LINE OPERATING PARTNERSHIP, L.P., ("Buyer") Date: September 17, 2002 TABLE OF CONTENTS
Page ARTICLE I - DEFINITIONS...........................................................................................1 1.01 Definitions........................................................................................1 ---- 1.02 Construction; Interpretation.......................................................................6 ---- ARTICLE II - SALE OF ASSETS.......................................................................................7 2.01 Purchase and Sale..................................................................................7 ---- 2.02 Assets.............................................................................................7 ---- 2.03 Excluded Assets....................................................................................8 ---- 2.04 Assumption.........................................................................................9 ---- 2.05 Seller's Accounts Receivable, Accounts Payable and Settlement Thereof.............................10 ---- ARTICLE III - PURCHASE PRICE.....................................................................................10 3.01 Purchase Price; Taxes.............................................................................10 ---- 3.02 Adjustments to the Purchase Price.................................................................11 ---- - 3.03 Property Tax Proration............................................................................12 ---- 3.04 Allocation........................................................................................12 ---- ARTICLE IV - REPRESENTATION AND WARRANTIES BY SELLER.............................................................12 4.01 Seller............................................................................................12 ---- ARTICLE V - REPRESENTATIONS AND WARRANTIES BY BUYER..............................................................21 5.01 Buyer.............................................................................................21 ---- ARTICLE VI - TITLE...............................................................................................22 6.01 Title to Real Property............................................................................22 ---- 6.02 Title (Assets other than the Real Property).......................................................22 ---- ARTICLE VII - COVENANTS..........................................................................................22 7.01 Casualty Loss.....................................................................................22 ---- 7.02 Conduct of Business Prior to Closing..............................................................23 ---- 7.03 HSR Act...........................................................................................25 ---- 7.04 Compliance with Conditions Precedent..............................................................25 ---- - 7.05 Preparation of Preliminary Settlement Statement...................................................25 ---- - 7.06 Press Release.....................................................................................25 ---- 7.07 Government Filings................................................................................25 ---- 7.08 Consents to Assignment............................................................................25 ---- 7.09 Tariffs...........................................................................................26 ---- 7.10 Notices under Articles IV, V and VII..............................................................26 ---- 7.11 Pipeline Repairs..................................................................................26 ---- 7.12 Cooperation.......................................................................................26 ---- ARTICLE VIII - POST-CLOSING AGREEMENTS...........................................................................27 8.01 Final Recapitulation Settlement; Subsequent Audits and Settlements...............................27 ---- 8.02 Recording.........................................................................................27 ---- 8.03 Records...........................................................................................27 ---- 8.04 Use of Seller's Name..............................................................................28 ---- 8.05 Non-Solicitation of Employees.....................................................................28 ---- 8.06 Post-Closing Covenants............................................................................28 ---- 8.07 Covenant Not to Sue...............................................................................28 ---- 8.08 Further Assurances................................................................................28 ---- ARTICLE IX - CLOSING.............................................................................................29 9.01 Time and Place....................................................................................29 ---- 9.02 Conditions to Buyer's Obligations.................................................................30 ---- 9.03 Conditions to Seller's Obligations................................................................32 ---- ARTICLE X - DISCLAIMERS; INDEMNITIES.............................................................................33 10.01 Disclaimers.......................................................................................33 ----- 10.02 Buyer's Indemnity.................................................................................35 ----- 10.03 Seller's Indemnity................................................................................36 ----- 10.04 Threshold and Monetary Cap........................................................................37 ----- 10.05 Survival..........................................................................................38 ----- 10.06 Sole and Exclusive Remedy.........................................................................38 ----- 10.07 Limitations.......................................................................................39 ----- 10.08 Indemnification Procedures........................................................................39 ----- ARTICLE XI - INSPECTION AND RECORDS; TITLE.......................................................................40 11.01 Inspection........................................................................................40 ----- 11.02 Title Inspection..................................................................................40 ----- ARTICLE XII - TAXES..............................................................................................41 12.01 Tax Proceedings...................................................................................41 ----- 12.02 Sales Taxes.......................................................................................41 ----- 12.03 Other Taxes.......................................................................................41 ----- ARTICLE XIII - EMPLOYEE MATTERS..................................................................................42 13.01 Employees.........................................................................................42 ----- 13.02 Employee Benefit Plans............................................................................43 ----- 13.03 No Third Party Employee Beneficiary...............................................................44 ----- 13.04 Federal Worker Adjustment and Retraining Notification Act.........................................45 ----- ARTICLE XIV - MISCELLANEOUS PROVISIONS...........................................................................45 14.01 Commission........................................................................................45 ----- 14.02 Assignment........................................................................................45 ----- 14.03 Entire Agreement; Amendments......................................................................45 ----- 14.04 Severability......................................................................................45 ----- 14.05 Actions...........................................................................................45 ----- 14.06 Termination.......................................................................................46 ----- 14.07 Counterparts......................................................................................46 ----- 14.08 Governing Law.....................................................................................46 ----- 14.09 Time of Essence...................................................................................46 ----- 14.10 Nondisclosure of Confidential Information.........................................................47 ----- - 14.11 Assignment of ContractS and Property Rights.......................................................47 ----- 14.12 Notices and Addresses.............................................................................47 -----
EXHIBITS AND SCHEDULES Exhibit Description Section Reference - --------- ----------- ----------------- A Facilities 2.02(a) B Real Property 2.02(b) C Leasehold Interests 2.02(c) D Property Rights 2.02(d) E Permits 2.02(e) F Contracts 2.02(f) G Intellectual Property 2.02(g) H Purchase Price Allocation 3.04 I Form of Assignment and Assumption Agreement 9.01(a) J Form of Bill of Sale 9.01(a) K-1 Transition Services Agreement 9.01(a) K-2 Services Agreement (Long Term) 9.01(a) L Form of Special Warranty Deed 9.01(a) M Additional Excluded Assets 2.03(e) N Technical Repair Criteria 7.11 O Form of Easement 9.01(a) P Post Closing Covenants 8.06 Q Form of Agreement for Anhydrous Ammonia Storage and Throughput Service 9.01(a)
Schedule Description Section Reference -------- ----------- ----------------- 4.01(d) Conduct of Business 4.01(d) 4.01(e) Proceedings and Orders 4.01(e) 4.01(g) Known Environmental Matters, Environmental Law Violations and Claims 4.01(g) 4.01(h) Compliance with Laws 4.01(h) 4.01(j) Violations 4.01(j) 4.01(m) Legislative and Regulatory Changes 4.01(m)(v) 4.01(o)(i)(A) Exceptions to Employees 4.01(o)(i) 4.01(o)(i)(B) Notifications of Plans to Terminate Employment 4.01(o)(i) 4.01(o)(ii) Employee Benefit Plans 4.01(o)(ii) 4.01(p) Contracts 4.01(p) 4.01(r) Business Interruptions 4.01(r) 4.01(s) Permits 4.01(s) 4.01(t) Deposits 4.01(t) 4.01(u) Work Orders 4.01(u) 4.01(v) Customer List 4.01(v) 4.01(w) Royalties 4.01(w) 13.01 Employees 13.01(a)
ASSET PURCHASE AND SALE AGREEMENT THIS ASSET PURCHASE AND SALE AGREEMENT ("Agreement") is entered into this 17th day of September, 2002, by and among: A. Koch Pipeline Company, L.P., a Delaware limited partnership, with its principal place of business at 4111 East 37th Street North, Wichita, Kansas 67220 ("KPL"); B. Koch Fertilizer Storage and Terminal Company, a Nebraska corporation, with its principal place of business at 4111 East 37th Street North, Wichita, Kansas 67220 ("KFS&T"); and C. Kaneb Pipe Line Operating Partnership, L.P., a Delaware limited partnership, with its principal place of business at 2435 North Central Expressway, Suite 700, Richardson, Texas 75080 ("Buyer"). KPL and KFS&T are hereinafter collectively referred to as "Seller." Seller and Buyer are hereinafter collectively referred to as the "Parties", and individually as a "Party." WHEREAS, Seller owns the anhydrous ammonia pipeline system described herein and certain other related assets, facilities and contracts (collectively referred to as the "Assets," as defined in Section 2.02); and WHEREAS, pursuant to the terms of this Agreement, Seller desires to sell and Buyer desires to purchase the Assets. NOW, THEREFORE, for and in consideration of the premises and the mutual covenants contained herein, the Parties agree as follows: ARTICLE I: DEFINITIONS 1.01 Definitions. As used herein, the following terms have the meanings set forth below: "Accounting Firm" has the meaning given it in Section 8.01(b). "Affiliate" means with respect to any Person, any other Person directly or indirectly controlling, controlled by, or under common control with such Person. For purposes of the definition of "Affiliate," the term "control" (including the correlative terms "controlled by" and "under the common control of"), as used with respect to any Person, means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, through the ownership of voting securities, by contract, or otherwise. "Agreement" means this Asset Purchase and Sale Agreement. "Asset" and "Assets" have the meanings given them in Section 2.02. "Business" means the business currently being conducted by Seller using the Assets. "Business Day" means any day, Monday through Friday, on which nationally chartered banks are open for the transaction of business in New York, New York. "Buyer" has the meaning given it in the Preamble. "Buyer Indemnitees" means Buyer, its parent companies, Affiliates and subsidiaries, and their respective partners, members, directors, shareholders, officers, employees, agents, representatives, contractors and subcontractors. "Casualty Loss" has the meaning given it in Section 7.01. "Closing" has the meaning given it in Section 9.01. "Closing Amount" has the meaning given it in Section 7.05. "Closing Date" means the date on which Closing occurs. "Code" means the Internal Revenue Code of 1986, as amended. "Confidentiality Agreement" means that certain confidentiality agreement dated March 12, 2002 by and among Kaneb Pipe Line Company and KPL, KFS&T and Koch Nitrogen Company, which to the extent Confidential Information relating to the Assets purchased and sold hereunder or the Business was disclosed pursuant to the Confidentiality Agreement, the obligations of Buyer thereunder shall automatically terminate as of the Closing; provided, however, to the extent Confidential Information relating to assets not purchased and sold hereunder was or is disclosed pursuant to the Confidentiality Agreement, then the Confidentiality Agreement shall remain in full force and effect according to its terms. "Contracts" has the meaning given it in Section 2.02(f). "Drop Dead Date" has the meaning given it in Section 14.06(a)(ii). "Effective Time" has the meaning given it in Section 9.01. "Employees" has the meaning given it in Section 13.01(a). "Employment Sites" has the meaning given it in Section 4.01(o)(vii). "Environmental Condition" means soil and water contamination, or other types of Releases of Hazardous Materials or environmental damage or contamination in, on, around or under the Assets or arising from the Assets, including offsite disposal thereof and any of which requires Remediation under applicable Environmental Laws. "Environmental Laws" means any and all Legal Requirements or Orders, rules, codes, policies, directives, standards, licenses or permits of any Governmental Body relating to the environment, specifically including those relating to the exposure to, or the use, Release, emission, presence, storage, treatment, generation, transportation, processing or handling of, Hazardous Materials, in effect as of the Effective Time, including the Safe Drinking Water Act, 42 U.S.C.ss.300f et seq.; the Federal Insecticide, Fungicide & Rodenticide Act, 7 U.S.C.ss.136 et seq.; the Toxic Substances Control Act, 15 U.S.C.ss. 2601 et seq.; the Oil Pollution Act of 1990, 33 U.S.C.ss. 2701 et seq.; the Clean Water Act, 33 U.S.C.ss.1251 et seq.; the Clean Air Act, 42 U.S.C.ss.7401 et seq.; the Resource Conservation and Recovery Act, 42 U.S.C.ss.6901 et seq.; the Comprehensive Environmental Response, Compensation and Liability Act, 42 U.S.C.ss. 9601 et seq., and the Emergency Planning and Community Right to Know Act, 42 U.S.C.ss. 11001 et seq., and all similar statutes adopted by the States in which the Assets are located and in effect as of the Effective Time. "Environmental Liabilities" means Liabilities/Claims (including Remediation costs and legal costs associated therewith) incurred or imposed (a) as the result of an Environmental Condition, (b) pursuant to an agreement, Order, notice of responsibility or directive arising out of, or in connection with, or under Environmental Laws, or (c) pursuant to a claim by a Governmental Body or other Person for personal injury, property damage, damage to natural resources, Remediation or payment or reimbursement or response costs incurred or expended by such Governmental Body or Person pursuant to common law or statute and related to the use or Release of Hazardous Materials. "ERISA" means the Employee Retirement Income Security Act of 1974, as amended. "Excluded Assets" has the meaning given it in Section 2.03. "Facilities" has the meaning given it in Section 2.02(a). "Final Recap" has the meaning given it in Section 8.01(a). "Final Recap Statement" has the meaning given it in Section 8.01(a). "Governmental Body" means any (a) nation, state, county, city, town, village, district, territory, or other jurisdiction of any nature; (b) federal, state, local, municipal, foreign, or other government; (c) governmental authority of any nature (including any governmental agency, branch, department, official, or entity and any court or other tribunal); or (d) body exercising, or entitled to exercise, any administrative, executive, judicial, legislative, police, regulatory, or taxing authority or power of any nature, including any arbitrator or arbitration panel. "Hazardous Material" means any "hazardous waste", "hazardous substance", "extremely hazardous substance", "toxic chemical", "hazardous chemical", "toxic pollutants", "contaminants", "chemical", "chemical substance", or "asbestos", as such terms are defined in any of the Environmental Laws, or related substances, and petroleum and petroleum products, all in such quantities or concentrations as are regulated by Environmental Laws. "Hired Employees" means those Employees accepting employment with Buyer effective as of the Effective Date. "HSR Act" means the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended. "Indemnify" means to indemnify, defend and hold harmless. "Indemnitee" has the meaning given it in Section 10.08. "Indemnitor" has the meaning given it in Section 10.08. "Intellectual Property" has the meaning given it in Section 2.02(g). "Intermittent Services Agreements" has the meaning given it in Section 4.01(p)(iv). "Known by Seller" or "Seller's Knowledge" means the current actual knowledge of the following employees of Seller applicable to the Assets: Patrick McCann, Michael Purkey, Ron Simmons, Royce Hoemann, Scott Christensen and Gary Koegeboehn, of such fact or circumstance, without any specific or additional duty to review documents or records or interview other persons to gain any new actual knowledge or to refresh a memory of past knowledge. "Known Environmental Condition" means an Environmental Condition which occurred prior to the Effective Time, and which is Known by Seller at or prior to Closing, each of which are listed on Schedule 4.01(g). "KPL" has the meaning given it in the Preamble. "KFS&T" has the meaning given it in the Preamble. "Leasehold Interests" has the meaning given it in Section 2.02(c). "Legal Requirement" means any Order, constitution, law, ordinance, regulation, statute, or treaty issued by any Governmental Body, or any principle of common law or governmental interpretation thereof. "Liabilities/Claims" means all liabilities, claims, losses, strict liability claims, including those arising under Environmental Laws, demands, lawsuits, judgments, Orders, fines, penalties, damages, punitive damages, expenses, including reasonable attorneys' and consultants' fees, costs, environmental assessment costs, Remediation costs, and causes of action asserted by any Person. "Monetary Cap" has the meaning given it in Section 10.04. "Negligence/Fault" means negligence, gross negligence, strict liability and any other type or form of negligence recognized under applicable law, and willful misconduct. "Net Inventory" means the anhydrous ammonia owned by Seller as linefill or stored by Seller in terminals that are connected to, related to or used in connection with the Facilities, including any pipeline retention allowances and long and short positions with respect thereto for calendar year 2002. "New Contracts" has the meaning given it in Section 9.02(j). "Notice" means written notice provided pursuant to Section 14.12. "Order" means any award, decision, injunction, judgment, decree, order, ruling, subpoena, or verdict entered, issued, made, or rendered by any court, administrative agency, or other Governmental Body. "Party" and "Parties" have the meanings given them in the Preamble. "Permits" has the meaning given it in Section 2.02(e). "Person" means any individual, corporation (including any non-profit corporation), general or limited partnership, limited liability company, joint venture, estate, trust, unincorporated organization, business, syndicate, sole proprietorship, association, organization, labor union, or other entity or Governmental Body. "Plans" has the meaning given it in Section 4.01(o)(ii). "Preliminary Settlement Statement" has the meaning given it in Section 7.05. "Proceeding" means any action, arbitration, audit, claim, inspection, notice, review, hearing, investigation, litigation, or suit (whether civil, criminal, administrative, investigative, or informal), at law or in equity, commenced, brought, conducted, or heard by or before, or otherwise involving, any Governmental Body. "Property Rights" has the meaning given it in Section 2.02(d). "Purchase Price" has the meaning given it in Section 3.01(a). "Real Property" has the meaning given it in Section 2.02(b). "Records" has the meaning given it in Section 2.02(i). "Reference Balance Sheet Date" has the meaning given it in Section 4.01(f)(iii). "Release" or "Released" means any spilling, leaking, pumping, pouring, emitting, emptying, discharging, injecting, escaping, leaching, dumping, migrating or disposing (including the abandoning or discarding of barrels, containers and other closed receptacles containing any Hazardous Material) of a Hazardous Material into the environment. "Remediation" means containment, remediation, clean-up, restoration, removal or monitoring. "Seller" has the meaning given it in the Preamble. "Seller Indemnitees" means Seller, its parent companies, Affiliates and subsidiaries, and their respective partners, members, directors, shareholders, officers, employees, agents, representatives, contractors and subcontractors. "Seller's Accounts Payable" means any debt or trade payable owed by Seller arising in the ordinary course of business from sales or services rendered to Seller prior to the Effective Time in connection with the Business. "Seller's Accounts Receivable" means any debt or trade payable owing to Seller arising in the ordinary course of business from sales or services rendered by Seller prior to the Effective Time in connection with the Business. "Seller's Existing Field Authority Limitations" means $100,000 with respect to capital expenditures; and $150,000 with respect to expensed expenditures. "Smart Pig Inspection" means the internal (in-line) pipeline inspection by use of instrumented inspection tool. "Tax" or "Taxes" means any income, excise, franchise, profits, capital gains, capital stock, transfer, sales, use, occupation, property, payroll, withholding or other taxes or charges, assessments, duties, levies or fees of any kind imposed or collected by any Governmental Body or pursuant to any Legal Requirement, including any penalties, interest, deficiency assessments, additions to taxes or other charges with respect thereto. "Threshold Amount" has the meaning given it in Section 10.04. "Title Defect" means any encumbrance, encroachment, irregularity or defect in or objection to title to the Real Property, Leasehold Interests, Permits or Property Rights. "Unknown Environmental Condition" means an Environmental Condition which occurred prior to the Effective Time, but which is not Known by Seller at or prior to Closing. "WARN Act" means the Worker Adjustment Retraining Notification Act of 1988, as amended. 1.02 Construction; Interpretation. Unless the context shall require otherwise: (i) words importing the singular number or plural number shall include the plural number and singular number respectively; (ii) words importing the masculine gender shall include the feminine and neuter genders and vice versa; (iii) reference to "include", "includes", and "including" shall be deemed to be followed by the phrase "without limitation;" (iv) reference to "to the extent" shall be deemed to be followed by the phrase ", but only to the extent;" (v) reference in this Agreement to "herein", "hereby", or "hereunder", or any similar formulation, shall be deemed to refer to this Agreement as a whole, including the Exhibits and Schedules referenced herein and attached hereto; (vi) the headings of this Agreement are for reference only and shall not be deemed to form part of the text or be used in the construction or interpretation of this Agreement; and (vii) all references to "Section" or "Sections" refer to the corresponding Section or Sections of this Agreement. This Agreement has been mutually drafted, negotiated and prepared at the mutual request and direction of the Parties, at arm's length, with the advice and participation of counsel. If there is any ambiguity, this Agreement shall not be construed against either Party. ARTICLE II: SALE OF ASSETS 2.01 Purchase and Sale. Subject to the terms and conditions of this Agreement, Buyer agrees to purchase from Seller and Seller agrees to sell, transfer, assign and convey the Assets to Buyer at the Closing, effective as of the Effective Time. 2.02 Assets. Unless otherwise excluded in this Agreement, the "Assets" shall consist of the following and shall hereafter collectively, in whole or in part, be referred to as the "Assets" or individually as the "Asset": (a) Pipelines, Pipeline Assets and Other Fixtures. All right, title and interest in and to Seller's Hermann, Missouri terminal and in and to those certain pipelines, and related valves, pumps, compressors and other equipment, vehicles, buildings, building contents, personal property and fixtures relating primarily to Seller's anhydrous ammonia pipeline systems (except for the Excluded Assets), including the items described in Exhibit A (the "Facilities"). To the extent any such property is leased, the leases related thereto are described in Exhibit C, and Seller shall assign its leasehold interest to the extent assignable and will not convey title. To the extent title to any of the Assets is held by an Affiliate of Seller, Seller shall cause that Affiliate to transfer title directly to Buyer at no additional cost to Buyer; (b) Real Property. All right, title and interest in and to any parcels of real property owned by Seller or an Affiliate thereof upon which the Facilities are located, together with the improvements thereon (the "Real Property"), including the parcels described in Exhibit B; (c) Leasehold Interests. All right, title and interest of the lessee in and to leases of real property upon which the Assets are situated and the rights associated therewith relating to ongoing use, operation and maintenance of the Assets (the "Leasehold Interests"), all of which are more particularly described in Exhibit C; (d) Property Rights. To the extent not listed as a Permit under Exhibit E, all right, title and interest of the beneficiary or right holder in and to those certain easements, rights-of-way, servitudes, permits and/or licenses, railroad crossing rights, and other rights to use of the surface and subsurface and related instruments which are held for use in connection with the ownership, use, operation or maintenance of the Assets, including those items listed in Exhibit D, and which excludes the Real Property, the Permits and the Leasehold Interests (the "Property Rights"); (e) Permits. All right, title and interest of the beneficiary or permit holder in and to any environmental, operational and other governmental permits, licenses, Orders, franchises and related instruments or rights relating to the ownership or operation of the Assets, all of which are listed in Exhibit E ("Permits"), but only to the extent legally assignable or transferable and excluding the Property Rights listed in Exhibit D; (f) Contracts. Subject to the provisions of Section 14.11, all of Seller's right, title and interest in and to any and all contracts, warranties and other agreements relating exclusively to or which are reasonably necessary for the use of the Assets ("Contracts"), including the Contracts listed in Exhibit F; (g) Intellectual Property. All intellectual property interests identified on Exhibit G, including all Liabilities/Claims against other Persons for infringement and other proprietary rights associated therewith (the "Intellectual Property"); (h) Inventory. The Net Inventory. Buyer will be responsible for satisfying any pipeline retention allowances and long and short positions and obligations with any third Persons. (i) Records. All books, records and files of Seller relating to the Assets (paper and electronic format, if available), excluding accounting records, but including operating records, technical manuals and warranty documents, customer lists and information, charts, maps, surveys, drawings, prints and any physical embodiment of the Intellectual Property relating to the Assets (the "Records"); provided, however, that the Records shall not include Seller's and Seller's Affiliates' (A) corporate and partnership records (including any documents relating to the formation or governance of Seller or its Affiliates), (B) information related to previous offers for the Assets, including economic analyses of the Assets, (C) any records to the extent related to the Excluded Assets, and (D) records or other information protected by the attorney-client privilege or that is work product of Seller's counsel or counsel for Seller's partners or their Affiliates, it being agreed that communications seeking or providing legal advice by, between, or among the following persons shall be and are hereby deemed confidential communications subject to the attorney-client privilege: counsel for Seller, or their Affiliates, and any employee or agent of Seller or their Affiliates. 2.03 Excluded Assets. Except as specifically included within the definition of the Assets or otherwise provided for in this Agreement, it is the intent of the Parties that no other assets or interests held or owned by Seller or any related liabilities or obligations shall be sold, conveyed, transferred, or assigned to Buyer, and specifically, the sale, conveyance, transfer, and assignment hereunder shall not include the following (the "Excluded Assets"): (a) any cash and cash equivalents of Seller; (b) any logos, emblems, signs, trademarks, trade names, or service marks that are the property of Seller or its Affiliates; provided, however, that signs for location, warning, notice, or as required by law shall remain in place and will be modified or replaced by Buyer to remove Seller's name, logo, or other identifying marks as provided in Section 8.04; (c) all items of personal property owned or leased generally by Seller currently located at Seller's Wichita, Kansas facility or office, including vehicles, office equipment, furniture, computers, copiers, and fax machines; (d) all ammonia terminals, truck loading and storage facilities located at, on or adjacent to the Facilities unless specifically listed on Exhibit A; (e) all items of personal property (including vehicles, office equipment, furniture, computers, copiers, and fax machines) located at or adjacent to the Facilities to the extent listed on Exhibit M; (f) any software programs and licenses for software which are confidential or proprietary to Seller or its Affiliates, or cannot be transferred without payment of a fee to another Person, owner or vendor; provided, however, that Seller shall use good faith efforts to assist Buyer in arranging for a copy of software that is not transferable without payment of a fee or other right to use such software, provided Buyer pays any fee charged or assessed by the vendor or owner thereof (or other Persons holding the right to license the use of such software); and provided further, that Buyer shall have access to all data which is not confidential or proprietary on Seller's or its operator's systems relating to the Assets for conversion to or storage on Buyer's systems; and (g) any personal property, software, computers, servers, peripheral computer hardware and communication devices used in, or in connection with, Seller's pipeline control center used to remotely monitor and control the anhydrous ammonia pipeline systems and to ensure the integrity thereof. 2.04 Assumption. As of the Effective Time, Buyer shall assume all rights and obligations arising after the Effective Time under the Leasehold Interests, Property Rights, Permits and Contracts and agrees to Indemnify the Seller Indemnitees from and against all Liabilities/Claims under the Leasehold Interests, Property Rights, Permits and Contracts accruing after the Effective Time; but only in each case if such obligations and Liabilities/Claims do not arise out of or relate to acts or omissions that occurred prior to the Effective Time. 2.05 Seller's Accounts Receivable, Accounts Payable and Settlement Thereof. (a) Buyer hereby acknowledges that no sale or transfer of the proceeds of Seller's Accounts Receivable is made or contemplated by this Agreement and that Seller is entitled to receive payment of all of Seller's Accounts Receivable out of the payments received by Buyer on account thereof, if any. The Parties shall reasonably cooperate with each other in connection with the collection of Seller's Accounts Receivable. (b) Buyer is not assuming any of Seller's Accounts Payable. Seller shall be responsible for the payment of Seller's Accounts Payable. Seller and Buyer hereby acknowledge that no transfer or assignment of Seller's Accounts Payable is made or contemplated by this Agreement and that Seller shall remain responsible for all of Seller's Accounts Payable. (c) Notwithstanding the foregoing provisions of Section 2.05, Seller and Buyer will provide each other with a monthly schedule of reimbursements due to or from one Party as a result of the other Party collecting the former's accounts receivable or payment of accounts payable. Reimbursements will be settled monthly following Closing until both Parties agree that all significant reimbursements have been settled. ARTICLE III: PURCHASE PRICE 3.01 Purchase Price; Taxes. (a) Purchase Price. Subject to the terms and conditions of this Agreement, and in full payment for the Assets, Buyer shall pay to Seller at Closing, by wire transfer as described in Section 9.01(b), the sum of One Hundred Forty Million U.S. Dollars ($140,000,000.00) as such sum may be adjusted as described in Section 3.02 pursuant to the provisions of Section 7.05 (the "Purchase Price"). (b) Taxes. Buyer shall pay all Taxes payable in connection with the consummation of the transactions contemplated by this Agreement and the sale, conveyance and assignment of the Assets hereunder (other than income Taxes resulting directly from such sale, which shall be borne by Seller), including sales and use Taxes; gross receipts Taxes and other similarly imposed transaction Taxes; conveyances, transfer, and recording fees; motor vehicle transfer and excise Taxes and registration fees; and real estate transfer Taxes and documentary stamp Taxes, except for sales, transfer or similar Tax which may be payable with respect to the anhydrous ammonia owned by Seller as Net Inventory, for which Seller shall pay any applicable sales, transfer or similar Tax. Buyer further agrees to prepare and file any necessary Tax returns in connection with the foregoing Taxes (except for sales, transfer or similar Tax which may be payable on the Net Inventory referenced in the preceding sentence) and fees to be borne by Buyer and to pay all filing and recording fees relating to the filing and recording of any instruments delivered by Seller to convey the Assets to Buyer. 3.02 Adjustments to the Purchase Price. The Purchase Price shall be adjusted at Closing as follows. (a) Upward Adjustments. The Purchase Price shall be adjusted upward by the following: (i) the amount of expenses, costs, Taxes, and charges incurred or paid by Seller that are attributable to the ownership or operation of the Assets after the Effective Time including, any prepaid lease or other pre-payments, production, excise, severance, gross receipts, federal and state income Tax, franchise Tax and any other Taxes based upon or measured by the ownership of the Assets or the receipt of proceeds therefrom, not deducted or netted from proceeds under Section 3.02(b)(i) below; (ii) except for payments received by Buyer with respect to Seller's Accounts Receivable, which are covered by Section 2.05(a), the amount of all income, revenues and proceeds received by Buyer attributable to the ownership and operation of the Assets prior to the Effective Time; and (iii) any other amount agreed upon by the Parties. (b) Downward Adjustments. The Purchase Price shall be adjusted downward by the following: (i) the amount of all income, revenues and proceeds received by Seller attributable to the ownership and operation of the Assets after the Effective Time; (ii) ad valorem, property, and other Taxes allocated to the Seller under Section 3.03; (iii) the amount attributable to any Casualty Loss prior to Closing under Section 7.01; (iv) the amount mutually agreed to and attributable to any gaps, defects or encumbrances in Property Rights, Leasehold Interests and Permits under Section 11.02(b); (v) any other amount agreed upon by the Parties; and (vi) An amount equal to $342,500, which is the mutually agreed upon approximation of one-half of the costs that Buyer and Seller expect Buyer will incur for the construction and installation of equipment by Buyer necessary to monitor and control pipeline movements, including remote terminal unit, Omni flow computer, control building, electrical panel and wiring, satellite dish, indoor and outdoor unit, and other required equipment at the locations listed below in accordance with the easements granted in Exhibit O. Aurora, Nebraska Crawfordsville, Indiana Fort Madison, Iowa Holstein, Iowa Huntington, Indiana Iowa Falls, Iowa Marshalltown, Iowa Trilla, Illinois Taft, Louisiana Walton, Indiana Washington, Iowa Wood River, Illinois The Parties agree that this downward adjustment to the Purchase price shall be the sole and exclusive consideration due to Buyer for the matters addressed in this Section 3.02(b)(vi). 3.03 Property Tax Proration. Real estate, ad valorem and personal property Taxes, if any, for the calendar year in which Closing occurs shall be prorated to the Effective Time based upon the most recent property Tax assessments and most recent certified Tax rates. Such Tax proration shall be settled at Closing by a downward adjustment to the Purchase Price. Buyer will assume responsibility for the actual payment to the applicable Governmental Body of any unpaid property Taxes not yet due. Buyer shall Indemnify the Seller Indemnitees from and against any and all real estate, ad valorem and personal property Taxes to be paid by Buyer in accordance with this Section 3.03. 3.04 Allocation. The Parties agree that the valuations established in Exhibit H attached hereto reflect the fair market value of the Assets at the time of Closing. The Parties further agree that the Purchase Price for the Assets shall be allocated among those Assets conveyed to Buyer hereunder in accordance with Section 1060 of the Internal Revenue Code of 1986, as amended. Seller and Buyer agree to cooperate in good faith in the allocation of the Purchase Price and the completion and filing of the United States Federal Income Tax Form 8594 in accordance with the price allocation. The Parties further agree that they will report the Tax consequences of the purchase and sale hereunder in a manner consistent with the valuations established in Exhibit H and that they will not take any positions inconsistent therewith in connection with the filing of any Tax return. ARTICLE IV: REPRESENTATIONS AND WARRANTIES BY SELLER 4.01 Seller. Seller represents and warrants to Buyer as of the date of this Agreement that: (a) Organization and Standing. KPL is a limited partnership and KFS&T is a corporation, each duly organized, validly existing and in good standing under the laws of the States of Delaware and Nebraska respectively, and both are duly authorized, qualified and licensed under all applicable Legal Requirements to carry on the Business in the places and in the manner now conducted. (b) Authority. Seller has the full legal right, power and authority to enter into, execute, deliver and perform this Agreement and to carry out the transactions contemplated herein to be performed or carried out by Seller. The execution and delivery of this Agreement by Seller and the consummation of the transactions contemplated hereby have been duly and validly authorized and approved by all requisite partnership or corporate action on the part of Seller. (c) Enforceability. This Agreement constitutes the legal, valid and binding obligation of Seller, enforceable in accordance with its terms, except as that enforceability may be (i) limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the enforcement of creditors' rights generally and (ii) subject to general principles of equity (regardless of whether such enforceability is considered in a Proceeding in equity or at law). (d) Conduct of Business. Except as set forth in Schedule 4.01(d), to Seller's Knowledge, since January 1, 2000, the Assets have been operated in the ordinary course of business. (e) Proceedings and Orders. Except as set forth in Schedule 4.01(e), (i) there are no Proceedings pending before any Governmental Body, and to Seller's Knowledge, there are no Proceedings threatened in writing, against Seller relating to the Business or any of the Assets, or which question the validity or legality of the transactions contemplated hereby; and (ii) Seller is not subject to any outstanding Order (other than general regulation and general regulatory Orders that are not specifically addressed to Seller but are applicable generally to businesses of the type operated by Seller) that would reasonably be anticipated to materially and adversely affect the Assets or the Business. (f) Financial Information. Seller has delivered to Buyer copies of the following financial data and information of the Business: (i) unaudited balance sheet as of December 31, 1999, December 31, 2000 and December 31, 2001; (ii) unaudited income statement and statement of cash flows for calendar years 1999, 2000 and 2001; and (iii) unaudited balance sheet as of June 30, 2002 (the "Reference Balance Sheet Date") and year to date unaudited income statement and statement of cash flows for the period ending June 30, 2002. Such financial statements delivered to Buyer are true and correct in all material respects and present fairly the financial position and results of operations of the Business as of the respective dates thereof and for the fiscal periods then ended, in accordance with generally accepted accounting principles consistently applied, except that the interim statements do not include normal, recurring year-end adjustments or footnotes and the year end statements do not include footnotes. It is acknowledged by the Parties that Buyer may determine on or after the date hereof that certain laws and regulations applicable to Buyer may require an audit to be performed with respect to the Assets and the Business for periods on or before the Closing Date. To the extent Buyer makes such a determination, Seller agrees to reasonably cooperate with Buyer in providing access to Seller's books, records, personnel and present auditors (and their work papers) required to complete such an audit. The cost of any such audit will be at Buyer's sole expense, and Buyer shall reimburse Seller for Seller's reasonable third-Person out-of-pocket expenses relating to its cooperation as described in the immediately preceding sentence. (g) Environmental Law Violations and Environmental Claims. Except as set forth in Schedule 4.01(g), to Seller's Knowledge: (i) there is no Environmental Condition relating to the Assets; (ii) Seller is in compliance with all applicable Environmental Laws with respect to the Assets or the operation thereof, including the Records and accounting records required to comply with the Environmental Laws; (iii) there are no underground storage tanks, as defined in Title 40 of the Code of Federal Regulations, located on or under any of the Assets; (iv) there are no obligations, undertakings or liabilities arising out of or relating to Environmental Laws or any Environmental Condition that Seller, with respect to the Assets, has agreed to, assumed or retained, by contract or otherwise; and (v) Seller has provided Buyer access to all environmental audits, assessments or investigations of the Assets that are in the possession of Seller or are subject to its control. (h) Compliance. Except as set forth in Schedule 4.01(h), the Assets and Seller's ownership and operation of the Facilities, and its Records and accounting records maintained in connection with the Asset or the Business, are in compliance in all material respects with all Legal Requirements, excluding the compliance with Environmental Laws and the Records and accounting records relating thereto, which are covered exclusively by Section 4.01(g). (i) [Reserved] (j) No Violations. Except as set forth in Schedule 4.01(j), the execution and delivery of this Agreement and the performance by Seller of its obligations hereunder will not: (i) violate or conflict with any provision of Seller's limited partnership agreements or corporate governance documents, as applicable; (ii) result in the breach of any term or condition of, or terminate or constitute a default or cause the acceleration of any obligation under, any agreement or instrument to which Seller is a party or by which Seller or any of the Asset may be bound; (iii) to Seller's Knowledge, except as otherwise stated in either Schedule 4.01(g) or 4.01(h), violate or conflict with any applicable Legal Requirement applicable to Seller or the Assets; (iv) cause Buyer to lose the benefit of any right or privilege included in the Assets; (v) relieve any Person of any obligation (whether contractual or otherwise) or enable any Person to terminate any such obligation or any right or benefit enjoyed by Seller or to exercise any right under any agreement with respect to the Assets; (vi) require notice to or the consent, authorization, approval or order of any Person; or (vii) to Seller's Knowledge, materially and adversely affect the business relationship of clients, customers and suppliers of the Business. (k) Non-foreign Entity. Seller is not a non-resident alien, foreign corporation, foreign partnership, foreign trust, or foreign estate for purposes of U.S. income taxation. (l) Brokers. Seller is not a party to or in any way obligated under any contract or other agreement for the payment of any broker's or finder's fee in connection with the origination, negotiation, execution or performance of this Agreement or the transactions contemplated hereby. (m) Events Since the Reference Balance Sheet Date. Since the Reference Balance Sheet Date, there has not been: (i) any change in the condition (financial or otherwise) or in the properties, assets, liabilities, business or prospects of the Business of the Seller, except normal and usual changes in the ordinary course of business, none of which has been material and adverse and all of which in the aggregate have not been material and adverse; (ii) any labor trouble, strike or any other occurrence, event or condition affecting the employees of Seller that materially and adversely affects the condition (financial or otherwise) of the Assets or the Business; (iii) any breach or default by Seller or, to Seller's Knowledge, by any other party, under any agreement or obligation included in the Assets or by which any of the Assets are bound; (iv) any damage, destruction or loss (whether or not covered by insurance) materially and adversely affecting the Assets or the Business; (v) except as set forth in Schedule 4.01(m), to Seller's Knowledge, any legislative or regulatory change that is reasonably expected to materially and adversely affect the Assets or the Business; (vi) any transaction related to or affecting the Assets or the Business other than transactions in the ordinary course of the Business; or (vii) any other occurrence, event or condition that has materially and adversely affected (or is reasonably expected to materially and adversely affect) the Assets or the Business. (n) Taxes and Tax Returns. All Tax returns, information returns and statements, forms and reports required by any Governmental Body or Legal Requirement to be filed by Seller, or which include or should include Seller, including those relating to Taxes to which Seller or the Business is subject, have been or will be properly filed when due, and all Taxes shown thereon to be due and payable have been or will be paid timely. There are no liens for Taxes upon any of the Assets, except for liens for Taxes not yet due and payable. (o) Employee Matters. (i) Seller's Employees. Except as otherwise stated on Schedule 4.01(o)(i)(A), Schedule 13.01 lists all of Seller's employees who work at the Assets on the date Seller executes this Agreement, along with such individual's title and/or job description and date of hire. Seller has separately provided Buyer with such Employees current annual salary, bonus(es) for the previous year and other compensation. Except as otherwise stated in Schedule 4.01(o)(i)(B), none of the Employees has provided Seller with notification that he/she plans to terminate his/her employment during calendar year 2002, whether by reason of the transactions contemplated by this Agreement or otherwise. (ii) Employee Benefits Plans. Schedule 4.01(o)(ii) lists all of the employee welfare benefit and employee pension benefit plans as defined in sections 3(1) and 3(2) of ERISA, including plans that provide retirement income or result in a deferral of income by Employees for periods extending to termination of employment or beyond, and plans that provide medical, surgical or hospital care benefits or benefits for sickness, accident, disability, death or unemployment and all other employee benefit agreements or arrangements, including deferred compensation plans, incentive plans, bonus plans or arrangements, stock option plans stock purchase plans, stock award plans, golden parachute agreements, severance pay plans, dependent care plans, cafeteria plans, employee assistance programs, scholarship programs, contracts with any of the Employees, retention incentive agreements, non-competition agreements with any of the Employees, consulting agreements with any of the Employees, confidentiality agreements with any of the Employees, vacation policies and similar plans, agreements and arrangements that are currently in effect for the benefit of the Employees or their beneficiaries (collectively, the "Plans"). Buyer will have no liability with respect to any Plans or other similar plans or arrangements of Seller or its Affiliates as a result of the transactions contemplated by this Agreement. (iii) Neither Seller nor any entity (whether or not incorporated) that was at any time during the six-year period ending on the Closing Date treated as a single employer together with the Seller under section 414 of the Code has ever maintained, had an obligation to contribute to, contributed to, or incurred any liability with respect to, a pension plan that is or was subject to Title IV of ERISA of section 412 of the Code. (iv) Seller has complied with the group health plan continuation of coverage requirements of the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended. (v) In connection with the Business, there is no labor strike, work stoppage, lockout, or other material labor dispute or slowdown pending, or to Seller's Knowledge, threatened in writing against Seller and there has not been any such action during the last three (3) year period, and Seller is not a party to or bound by any collective bargaining agreement or similar agreement or written work rules or practices with any labor organization or employee association covering the terms and conditions of employment of any employee who works at any of the Assets. To Seller's Knowledge, no Employee is represented by any labor organization and, to Seller's Knowledge, there are no current union organizing activities among the Employees. (vi) Other than wage increases in the ordinary course of business, since December 31, 2001, Seller has not made any commitment or agreement to increase the wages of any employment of any of the Employees. (vii) During the four (4) year period immediately prior to the date hereof, Seller has not effectuated (i) a "plant closing" (as defined in the WARN Act) affecting any site of employment of any of the facilities included in the Assets covered by this transaction (the "Employment Sites"); or (ii) a "mass layoff" (as defined in the WARN Act) affecting any of the Employment Sites; nor has Seller been affected by any transaction or engaged in layoffs or employment terminations sufficient in number to trigger application of any similar state or local law at any of the Employment Sites. (viii) With respect to each Employee hired by Seller after November 6, 1986 that is not a citizen of the United States, Seller shall have required a copy of Form I-9 to be completed pursuant to the Immigration Reform and Control Act of 1986, and the rules and regulations promulgated thereunder, and shall have retained a copy of such Form I-9 in its employee files. (p) Contracts and Agreements. Exhibit F sets forth a true and complete list of, briefly describes (including termination dates) and states whether or not consent to assign is required with respect to, all of the following contracts, agreements, leases, licenses, plans, arrangements or commitments that relate to the Assets or the Business, including all amendments, supplements and modifications thereto (the "Contracts"), excluding any Property Rights or Leasehold Interests which are set forth in other Exhibits: (i) all contracts, agreements, leases, licenses, plans, arrangements or commitments, including those in respect of the sale of products or services or the purchase of raw materials, supplies or other products or utilities; (ii) all offers, tenders or the like outstanding and capable of being converted into an obligation of Seller by the passage of time or by an acceptance or other act of some other person or entity or both; (iii) all sales, agency or distributorship agreements or franchises or legally enforceable commitments or obligations with respect thereto; (iv) all collective bargaining agreements, union agreements, employment agreements, consulting agreements or agreements providing for the services of an independent contractor; provided, that Seller has advised Buyer, and Buyer accordingly agrees, that Seller may terminate service agreements with contractors who may work at or in connection with Assets pursuant to Seller's "General Contracts," "Intermittent Services Agreements," or similar agreements (the "Intermittent Services Agreements") and that such Intermittent Services Agreements are not included on Exhibit F and will not be assigned to Buyer, provided, that, Seller shall have provided Buyer with a list of those vendors and a short description of the services provided to the Business under the Intermittent Services Agreements that will not be assigned to Buyer; (v) compensation, group life and health insurance or other employee benefit plans, agreements, arrangements or commitments of any nature whatsoever, whether or not legally binding, and all agreements with any present or former officer, director, manager or shareholder of Seller; (vi) all loan or credit agreements, indentures, guarantees (other than endorsements made for collection), mortgages, pledges, conditional sales or other title retention agreements, and all equipment financing obligations, lease and lease-purchase agreements; (vii) all leases and all other contracts, agreements or legally enforceable commitments relating to or affecting real property or any interest therein; (viii) all performance bonds, bid bonds, surety bonds and the like, all contracts and bids covered by such bonds, and all letters of credit and guaranties; (ix) all consent decrees and other judgments, decrees or orders, settlement agreements and agreements relating to competitive activities, requiring or prohibiting any future action; (x) all contracts or agreements of any nature with any Affiliate of Seller; (xi) all contracts, agreements, leases, licenses, plans, arrangements or commitments entered into outside the ordinary course of the operation of the Business; and (xii) all other contracts, agreements, leases, licenses, plans, arrangements or commitments that are material to the Assets or the operation of the Business Except as set forth in Schedule 4.01(p), all such Contracts are valid, binding and in full force and effect in accordance with their terms and conditions. Except as set forth in Schedule 4.01(p), Seller is not in default under any of the Contracts and, to the Seller's Knowledge, no other party to any Contract is in default under such Contracts and there are no conditions which, with the passage of time or giving of notice or both, would constitute such a default by Seller, or, to Seller's Knowledge, by any other party to the Contracts, and the Contracts will not be breached by or give the other party a right of termination as a result of the transactions contemplated by this Agreement. True and correct copies of all of the Contracts, and all amendments, supplements and modifications thereto have been delivered to Buyer. Except as noted on Exhibit F, all of the Contracts may be assigned to Buyer without the approval or consent of any Person. (q) Title to Assets. Seller owns or has the right to use (pursuant to a valid lease or license disclosed herein) all of the Assets. Except for the Real Property which is covered exclusively in Section 6.01, Seller has good and marketable title to the Assets, excluding any assets shown on Exhibits C or D as being leased by Seller or under a Property Right, free and clear of any liens or encumbrances. The Assets include all existing warranties and service agreements with respect to any of the Assets to the extent the same are capable of being assigned to Buyer. The Assets include all easements, rights of ingress and egress and utilities and services necessary to conduct the Business as Seller currently conducts it. None of the Real Property has been condemned or otherwise taken by any Governmental Body, nor to Seller's Knowledge, is any such condemnation or taking threatened in writing nor has Seller received any written notice that any is planned. Except for the Excluded Assets, the Assets are all of the assets and properties Seller used in its operation of the Business during the twelve (12) month period immediately preceding the date hereof; provided, that, in the case of leased or licensed assets or properties, the leases or licenses covering such assets or properties are included in the Assets. (r) Except as set forth in Schedule 4.01(r), in the two (2) year period immediately preceding the date of this Agreement, there have not been any significant interruptions of the Business. (s) Permits. (i) Except as set forth in Schedule 4.01(s), the Permits set forth in Exhibit E are a true and complete list of all licenses, permits and similar documents necessary for the conduct of the Business as it has been conducted by Seller during the immediately preceding twelve (12) months (excluding any highway, railroad or road permits, which are included on Exhibit D) and a true and correct copy of all Permits have been delivered to Buyer. Except as set forth in Schedule 4.01(s), all of the Permits are validly issued to Seller and in its name and in full force and effect. The Assets and the Business are operated substantially in compliance with the Permits. (ii) Except as set forth in Schedule 4.01(s), no violations are or have been recorded with respect to any of the Permits and no proceeding is pending or, to Seller's Knowledge, threatened in writing seeking the revocation or limitation of any of the Permits. Seller has no reason to believe that any of the Permits would not be assignable, transferable or able to be re-issued to Buyer. Except as set forth in Schedule 4.01(s), Seller has made all filings necessary to request the timely renewal or issuance of all the Permits it uses in the Business prior to Closing for Seller to own and operate the Assets and the Business as Seller currently operates them. Except as set forth in Schedule 4.01(s), there are no pending requests by Seller for abatement of any Permit requirements relating to the Assets or the Business. (t) Deposits. Except as set forth in Schedule 4.01(t), Seller does not now hold any deposits or prepayments by third Persons with respect to any of the Assets or the Business. (u) Work Orders. Except as set forth in Schedules 4.01(u) or Exhibit F, there are no outstanding work orders or contracts relating to any portion of the Assets from or required by any policy of insurance, fire department, sanitation department, health authority or other Governmental Body, nor is there any matter under discussion with such Persons or authorities relating to such work orders or contracts. (v) Customer List. Schedule 4.01(v) sets forth a true, correct and complete list of all customers of the Business to which Seller has sold or provided products or services during the two (2) years immediately prior to the date hereof, including an accurate statement of the gross revenues received from each such customer during the twelve month period ended June 30, 2002. This list also indicates by special designation all customers on the list that the Business has not sold or provided products or services during the first six (6) months of calendar year 2002. (w) No Royalties. Except as set forth in Schedule 4.01(w), no royalty or similar payment or amount is being paid or is owed by Seller, not is any such item accruing, with respect to the operation, ownership or use of the Business or the Assets. (x) Inventory. The Net Inventory, as well as any product inventory of product located in the pipeline or any terminals being conveyed to Buyer hereunder, is of the quality and quantity usable in the ordinary course of the Business as it has been conducted by Seller during the immediately preceding twelve (12) month period. As of Closing, the Net Inventory will be not less than seventy-four thousand (74,000) tons, including the Net Inventory in the Hermann, MO terminal. None of the Net Inventory or other products located in the Facilities is owned by any Persons other than Seller. All product received or held by Seller as pipeline retention allowances after December 31, 2001 is located in the Facilities, or stored by Seller in terminals connected to, related to, or used in connection with, the Facilities and is included in the Net Inventory. ARTICLE V: REPRESENTATIONS AND WARRANTIES BY BUYER 5.01 Buyer. Buyer represents and warrants to Seller as of the date of this Agreement that: (a) Organization and Standing. Buyer is a limited partnership duly organized, validly existing and in good standing under the laws of the State of Delaware, and is, or will be as of the Closing, duly authorized, qualified and licensed under all applicable Legal Requirements to carry on the Business in the places and in the manner now conducted. (b) Authority. Buyer has the full legal right, power and authority to enter into, execute, deliver and perform this Agreement and to carry out the transactions contemplated herein to be performed or carried out by Buyer. The execution and delivery of this Agreement by Buyer and the consummation of the transactions contemplated hereby have been duly and validly authorized and approved by all requisite partnership action on the part of Buyer. (c) Enforceability. This Agreement constitutes the legal, valid and binding obligation of Buyer, enforceable in accordance with its terms, except as that enforceability may be (i) limited by an applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the enforcement of creditors' rights generally and (ii) subject to general principles of equity (regardless of whether such enforceability is considered in a Proceeding in equity or at law). (d) Legal Proceedings. (i) there are no Proceedings pending before any Governmental Body, and to Buyer's Knowledge, there are no Proceedings threatened in writing, against Buyer, or which Buyer reasonably anticipates becoming a party, or which the question the validity or legality of the transactions contemplated hereby; and (ii) Buyer is not subject to any outstanding Order (other than general regulation and general regulatory Orders that are not specifically addressed to Buyer but are applicable generally to businesses of the type operated by Buyer or the Business) that would reasonably be anticipated to materially and adversely affect Buyer's ability to purchase, own and operate the Assets or the Business. (e) No Violations. This transaction will not (i) violate or conflict with any provision of Buyer's organizational documents; (ii) result in the breach of any term or condition of, or terminate or constitute a default or cause the acceleration of any obligation under, any agreement or instrument to which Buyer is a party or is otherwise bound; or (iii) violate or conflict with any Legal Requirement applicable to Buyer. (f) Non-foreign Entity. Buyer is not a non-resident alien, foreign corporation, foreign partnership, foreign trust, or foreign estate for purposes of U.S. income taxation. (g) Brokers. Buyer is not a party to or in any way obligated under any contract or other agreement for the payment of any broker's or finder's fee in connection with the origination, negotiation, execution or performance of this Agreement or the transactions contemplated hereby. ARTICLE VI: TITLE 6.01 Title to Real Property. Title to the Real Property will be conveyed with a special warranty of title, pursuant to which Seller will warrant title to the Real Property against any and all Liabilities/Claims arising by, through, and under Seller or any Affiliate of Seller, but not otherwise. 6.02 Title (Assets other than the Real Property). Except as set forth in Sections 4.01(q) and 6.01, Seller makes no warranty with respect to title of the Assets. ARTICLE VII: COVENANTS 7.01 Casualty Loss. Prior to Closing, if all or any portion of the Assets have been or are damaged or destroyed by fire, flood, storm, or other casualty of a similar nature, or shall be taken by condemnation or under the right of eminent domain (all of which are herein called "Casualty Loss"), Seller shall bear the risk of such Casualty Loss, and the Purchase Price shall be adjusted downward as provided in Section 3.02(b)(iii) by the cost to repair or replace, as applicable, those damaged, lost or destroyed Assets unless Seller replaces or repairs such at its cost prior to Closing in a manner reasonably acceptable to Buyer. Any insurance proceeds, payments made under threat of condemnation, or condemnation awards, shall be the sole property of Seller. The risk of Casualty Loss relating to the Assets shall pass to Buyer at Closing. All repair or replacement costs shall be determined jointly by the Parties or, if the Parties disagree with respect thereto, at Seller's option, Seller may repair or replace such Assets at Seller's cost, except that should the Casualty Loss or Casualty Losses have a Material Adverse Effect On The Assets When Taken As A Whole, then either Party may terminate this Agreement. The phrase "a Material Adverse Effect On The Assets When Taken As A Whole" shall mean a Casualty Loss and/or Casualty Losses for which either: (i) the repair and/or replacement costs exceeds ten percent (10%) of the Purchase Price; or (ii) the repair and replacement thereof requires more than ninety (90) days to complete. 7.02 Conduct of Business Prior to Closing. (a) Prior to Closing, Seller shall: (i) afford to the officers and authorized representatives of Buyer access to the books and records of Seller related to the Assets and the Business and shall furnish Buyer with such financial and operating data and other information regarding the Assets and the Business and as Buyer may from time to time reasonably request; (ii) conduct the Business in the ordinary course; (iii) maintain the Assets in good working order and condition, ordinary wear and tear excepted; (iv) perform all its obligations under agreements relating to or affecting the Assets or the Business; (v) keep in full force and effect its existing insurance coverage on the Assets; (vi) use its reasonable commercial efforts to maintain and preserve the Business, and retain its present employees, customers, suppliers and others having business relations with it; (vii) duly and timely file all reports or returns required by any Legal Requirement to be filed with any Governmental Body, and timely pay all Taxes levied or assessed upon it or its properties or upon any part thereof; (viii) duly observe and conform to all Legal Requirements relating to the Assets or its properties or to the operation and conduct of its business and all covenants, terms and conditions upon or under which any of its properties are held; (ix) duly and timely take all actions necessary to carry out the transactions contemplated hereby; and (x) deliver to Buyer on or before the 20th day of each month true and correct unaudited monthly balance sheets and statements of income for the Business for the immediately preceding month, with such financial statements for the months between June 30, 2002 and execution of this Agreement, to be delivered at the time of execution of this Agreement. (b) Without the consent of Buyer (which consent shall not be unreasonably withheld, delayed or conditioned), and prior to Closing, Seller shall not: (i) incur obligations with respect to, or undertake any transactions relating to, the Assets other than transactions (A) in the normal, usual, and customary manner, (B) of a nature and in an amount consistent with prior practice, and (C) in the ordinary course of business of owning and operating the Assets; (ii) encumber, sell, or otherwise dispose of any of the Assets, other than property which is replaced by equivalent property, or which is used, consumed, or abandoned in the normal operations of the Business; (iii) enter into or assume any contract, agreement, obligation, lease, license or commitment related to the Business or the Assets (or of a type included in the Assets) other than in the ordinary course of business; (iv) except in the case of an emergency situation or if Seller believes (after consultation with Buyer) is required to comply with a Legal Requirement, enter into or assume (whether or not in the ordinary course of business) any contract, agreement, obligation, lease, license or commitment related to the Business or the Assets which would reasonably be anticipated to commit the Buyer after Closing to in excess of Seller's Existing Field Authority Limitations; provided, that, if Seller enters into such a contract, agreement, obligation, lease, license or commitment in order to comply with a Legal Requirement, if such arrangement would materially and adversely affect Buyer's ownership or operation of the Assets or the Business after Closing, Buyer shall have the right to terminate this Agreement pursuant to the provisions of Section 14.06; (v) enter into or assume any mortgage, pledge, conditional sale or other title retention agreement, lien, encumbrance or charge of any kind upon any of the Assets, or sell, lease, abandon or otherwise dispose of any of the Assets, including real property, machinery, equipment or other operating properties; (vi) engage in any activities or transactions that would reasonably be expected to materially and adversely affect the Assets or the Business; or (vii) increase the salary of any Employee except in the ordinary course of business and then not in excess of five percent (5%) of such Employee's base salary; (c) Seller shall cooperate with Buyer and its representatives in the preparation of any documents or other material that may be required by any Governmental Body in connection with the Assets or the Business or the transactions contemplated hereby. (d) Upon Buyer providing Seller with reasonable notice, Seller shall afford to the officers and authorized representatives of Buyer reasonable access to the premises, facilities and tangible assets included in the Assets for the purpose of inspecting such premises, facilities and equipment in such manner as Buyer shall deem appropriate. 7.03 HSR Act. As required by law, and to the extent not earlier filed, Seller and Buyer, promptly, but in no event later than three (3) Business Days after the execution of this Agreement, shall each file notification reports under the HSR Act and the rules thereunder in connection with the transactions contemplated by this Agreement, shall cooperate with each other in attempting to secure early termination of the applicable waiting periods under such Act, and upon the request of either the Federal Trade Commission or the Department of Justice, shall exercise their respective commercially reasonable efforts to supply such agencies with any additional requested information as expeditiously as possible. Each Party shall pay its own costs in preparing such filing, and the filing fees will be shared equally by Buyer and Seller. 7.04 Compliance with Conditions Precedent. Each Party shall use its commercially reasonable efforts to cause the conditions precedent to Closing set forth in Sections 9.02 and 9.03, applicable to such Party, to be fulfilled and satisfied as soon as practicable but in any event prior to Closing. 7.05 Preparation of Preliminary Settlement Statement. No later than three (3) days prior to the anticipated Closing, Seller shall prepare and deliver to Buyer a statement of the estimated Purchase Price adjustments to be made at Closing as provided for in this Agreement ("Preliminary Settlement Statement") showing the calculation of the Purchase Price, as adjusted ("Closing Amount"). The Parties agree that where actual numbers are not available, the Preliminary Settlement Statement will be based upon the previous year's Tax renditions and payments and from Seller's prior-month's Asset-related financial records and will be reconciled when actual numbers are available. If the Parties are unable to resolve any disagreements with respect thereto, such disagreement shall be resolved in the same manner as set forth in Sections 8.01(a) and (b). 7.06 Press Release. The Parties shall consult with each other with regard to all publicity and other releases issued at or prior to Closing concerning this Agreement and the transactions contemplated hereby and except as required by Legal Requirements, neither Party shall issue any publicity or other release without the prior written consent of the other Party. 7.07 Government Filings. After Closing, Buyer shall promptly file with the applicable Governmental Body all filings necessary to change Seller or its operator from the owner and/or operator of the Assets to Buyer or its designee and shall promptly provide Seller with the copies of all such filings when made and confirmation thereof when received. 7.08 Consents to Assignment. If the terms of any Property Right, Leasehold Interest, Permit or Contract require that consent or approval be obtained prior to any assignment or partial assignment, upon execution of this Agreement and up to Closing, Seller shall exercise reasonable commercial efforts, at its cost, and with the cooperation of Buyer, to obtain such consent or approval prior to Closing. Seller shall send all initial letters requesting such consents or approvals to all such third Persons. If such consents or approvals are not obtained by Seller prior to Closing, at Closing, Seller shall provide a status report of Seller's efforts to obtain such consents and approvals and Buyer shall be responsible, at its cost, for seeking such consents and approvals, and Seller shall use reasonable commercial efforts to assist Buyer in obtaining such consents or approvals, and Buyer shall promptly reimburse Seller for all costs incurred by Seller in assisting Buyer to obtain such consents or approvals following Closing; provided that, Seller shall be responsible for obtaining, at its cost, any consents required to assign or otherwise transfer any railroad crossing rights. Seller shall provide Buyer with a list of any Leasehold Interest, Permit or Contract that requires consent to assign and Buyer shall provide a list of any Property Right that requires consent to assign. 7.09 Tariffs. By no later than three (3) Business Days after the Closing Date, Buyer shall file with each applicable Governmental Body all filings necessary to adopt the tariffs in effect for the Facilities and to reflect in the tariffs the change in ownership and operatorship of the Assets, all to be effective at the Effective Time. 7.10 Notices under Articles IV, V and VII. If any of the representations or warranties of either Seller or Buyer hereunder are determined by the Party providing them to have been incorrect when made, or are determined by that Party to be incorrect as of any date subsequent to the date hereof, or if any of the covenants of Seller or Buyer contained in this Agreement have not been complied with timely, then that Party shall immediately notify the other Party to such effect, provided that such notice shall in no way limit the rights of either Party (i) under Section 14.06 to terminate this Agreement or refuse to consummate the transactions contemplated hereby or (ii) to enforce any rights or remedies it may have hereunder. 7.11 Pipeline Repairs. In lieu of any indemnification obligation set forth in Article X, Seller, at its sole cost, expense and risk, will make reasonable commercial efforts to make all pipeline repairs to the anhydrous ammonia pipelines purchased and sold hereunder pursuant to the Technical Repair Criteria set forth in Exhibit N as a result of a Smart Pig Inspection for the first four (4) pipe segments of said line (Note: A total of four (4) metal loss Smart Pig Inspections have been completed as of August 1, 2002). Seller shall conduct any additional Smart Pig Inspection runs of such pipelines between date of this Agreement and the Closing, if any, in its ordinary course of business at its sole cost, expense and risk. If the fifth pipe segment Smart Pig Inspection run (whether conducted by Seller or Buyer and whether conducted prior to or after Closing) demonstrates that repairs are required pursuant to the Criteria set forth in Exhibit N, and if and to the extent such repairs are conducted prior to Closing, such repairs shall be conducted at Seller's sole cost, expense and risk. If any such repairs for the first four or the fifth Smart Pig Inspection run are conducted after Closing, they shall be conducted by Buyer at Buyer's sole risk and Seller shall reimburse Buyer for its reasonable costs and expenses therefor, but only to the extent such repairs are conducted pursuant to the Technical Repair Criteria, and subject to the cost and expense reimbursement limitations, set forth in Exhibit N. The cost of any Smart Pig Inspection runs after the fifth overall run and any repairs associated with any Smart Pig Inspections after the fifth run overall, regardless of when such repairs are conducted, shall be at Buyer's sole risk, cost and expense. 7.12 Cooperation. Each of the Parties shall cooperate with the other and its representatives in the preparation of any documents or other material that may be required by any Governmental Body in connection with the Assets or the Business or the transactions contemplated hereby. ARTICLE VIII: POST-CLOSING AGREEMENTS 8.01 Final Recapitulation Settlement; Subsequent Audits and Settlements. With respect to final recapitulation and audits: (a) Within ninety (90) days after the Closing, Seller shall provide to Buyer, for Buyer's review and comment, a proposed final statement in the form of the Preliminary Settlement Statement (the "Final Recap Statement") to account for all adjustments to the Purchase Price known as of such date pursuant to Section 3.02 (the "Final Recap"). Buyer shall have the right, within thirty (30) days after receipt of the Final Recap Statement, to audit the Final Recap Statement. If Buyer disagrees with the Final Recap Statement, the Parties shall use their respective commercially reasonable efforts to reach agreement within thirty (30) days following Buyer's completion of its audit of the Final Recap Statement. (b) If the Parties are unable to resolve any disagreements, such disagreement shall, at the earliest practicable date, be referred, by either or both of the Parties, to a nationally recognized accounting firm mutually acceptable to the Parties (the "Accounting Firm"), along with all audit reports, work papers, schedules, and calculations related to the matter in dispute. Within twenty-five (25) days after such submission, the Accounting Firm shall issue a letter report determining the Final Recap, which shall be final and binding. Any fees and expenses incurred in resolving disputes shall be borne by the Party incurring such, except for the Accounting Firm, which shall be borne equally by Buyer and Seller. (c) Payment of any amounts owed under the Final Recap is due within ten (10) days after the date Seller and Buyer agree on the Final Recap Statement, or within ten (10) days after the determination of the Final Recap by the Accounting Firm, whichever is later. 8.02 Recording. Buyer shall be solely responsible for promptly recording the assignments and any other instruments related to the conveyance of the Assets, and shall promptly furnish Seller with copies of all recordings and the recording information. All recording and filing fees shall be paid by Buyer. 8.03 Records. Within thirty (30) days following Closing, Seller shall permit Buyer to take possession of the designated original set of the Records in Seller's possession except accounting records for transactions prior to Closing, wherever located. With regards to such retained accounting records, Seller shall make available to Buyer such records for inspection and copying during normal business hours. For a period of five (5) years following the Closing Date (or such longer period if requested by Seller due to a pending Proceeding or a Proceeding threatened in writing), Buyer shall use commercially reasonable efforts to retain and make such Records which it takes possession of available to Seller for inspection and copying during normal business hours, together with such additional Records of Buyer as may be reasonably requested by Seller in order to pursue any claims, obligations, and disputes relating to the Assets; provided, that, at any time, Buyer may provide notice to Seller pursuant to Section 14.12 of Buyer's willingness to transfer to Seller possession of any Record, and if Seller does not accept such transfer within sixty (60) days of the receipt of such notice, then Buyer shall be relieved of its obligations under this sentence with respect to such Record. Prior to Seller disposing of Seller's accounting records for the Business, Seller shall provide notice to Buyer pursuant to Section 14.12 of Seller's willingness to transfer to Buyer possession of such accounting records, and if Buyer does not accept such transfer within sixty (60) days of the receipt of such notice, then Seller shall be relieved of its obligations to retain such accounting record. 8.04 Use of Seller's Name. By no later than ninety (90) days after Closing, Buyer shall have removed or caused to have been removed the names and marks used by Seller or its operator and all variations and derivations thereof and logos relating thereto from the Assets (including all pipeline markers) and Buyer shall not thereafter make any use whatsoever of those names, marks and logos. If Buyer has not completed such removal within ninety (90) days after Closing, Seller shall have the right, but not the obligation, to complete such removal or cause such removal to be completed and Buyer shall reimburse Seller for any costs or expenses incurred by Seller in connection therewith and shall Indemnify the Seller Indemnitees from and against any and all Liabilities/Claims caused by or arising from Buyer's failure to do so. 8.05 Non-Solicitation of Employees. Buyer covenants and agrees on its own behalf and on behalf of its successors, permitted assigns and on behalf of any other Person to whom Buyer may sell or otherwise convey all or any portion of the Assets, that it will not solicit to hire any of the Employees listed in Schedule 4.01(o)(i)(A) for a period of two (2) years after the Closing Date. Seller covenants and agrees on its behalf and on behalf of its Affiliates, successors and permitted assigns that it will not solicit to hire any of the Hired Employees for a period of two (2) years after the Closing Date. 8.06 Post-Closing Covenants. The other Post Closing Covenants are set forth in Exhibit P. 8.07 Covenant Not to Sue. Except in connection with exercising its rights to indemnity under this Agreement, Buyer, on behalf of itself and its Affiliates, covenants and agrees that it will not sue or join, or request or demand in writing that any Governmental Body or any Person sue or join, Seller or the Seller Indemnitees in any Proceedings that arise under or due to an Unknown Environmental Condition. 8.08 Further Assurances. Each Party shall, from time to time at the reasonable request of the other, and without further consideration, execute and deliver such other instruments of sale, transfer, conveyance, assignment, clarification, and termination, and take such other action as the Party making the request may reasonably require to effectuate the intentions of the Parties, including those required to sell, transfer, convey and assign to, and vest in Buyer, and to place Buyer in possession of the Assets, and to transfer, assign, or convey the Excluded Assets to Seller or any other property that was mistakenly conveyed to Buyer. Seller intends to convey the Assets at Closing; provided, however, if it is determined after Closing that: (i) any part of the Assets was not in fact conveyed to Buyer, and that the title to any part of the Assets is incorrectly in the name of Seller; (ii) any Excluded Asset is conveyed to Buyer and that the title to such Excluded Asset is incorrectly in the name of Buyer; or (iii) any other property that was mistakenly conveyed to Buyer as a part of the Assets and that title to such property is incorrectly in the name of Buyer, then each Party shall take all such action necessary to promptly and correctly convey any part of the Assets to Buyer, or any part of the Excluded Assets to Seller or any other property mistakenly conveyed to Buyer re-conveyed to Seller. ARTICLE IX: CLOSING 9.01 Time and Place. The closing of the transaction contemplated by this Agreement (the "Closing") shall take place at the offices of Seller in Wichita, Kansas, beginning at 8:00 a.m., central time, on a mutually agreeable date within three (3) Business Days after all conditions to Closing specified under Sections 9.02 and 9.03 have been either met or waived. The Closing shall be effective as of 8:00 a.m. central time on the Closing Date, or such other date as the Parties may agree (the "Effective Time"). At Closing, the following events shall occur, each being a condition precedent to the others and each being deemed to have occurred simultaneously with the others: (a) Closing Deliveries. (i) Buyer shall deliver to Seller a certificate of an officer of Buyer as to the adoption of resolutions of its General Partner or other governing body authorizing the execution, delivery and performance of this Agreement by Buyer and the consummation of the transaction contemplated hereby; (ii) Seller shall deliver to Buyer certificates executed by an officer of each Seller as to the adoption of resolutions of its General Partner and Board of Directors or other governing bodies authorizing the execution, delivery and performance of this Agreement by Seller and the consummation of the actions contemplated hereby; (iii) Seller and Buyer shall execute, acknowledge and deliver to each other Assignment and Assumption Agreement(s) respectively assigning and assuming the Leasehold Interests, Property Rights, Permits, Contracts and Intellectual Property substantially in the form of Exhibit I; (iv) Seller shall execute, acknowledge and deliver to Buyer Bill(s) of Sale conveying the Facilities, Inventory and Records to Buyer substantially in the form of Exhibit J; (v) Seller shall deliver to Buyer an original title to each of the titled vehicle(s) listed in Exhibit A and other transfer documents required to re-register such titled vehicle(s) in Buyer's name; (vi) Seller and Buyer shall execute and deliver to each other a Transition Services Agreement in substantially the form of Exhibit K-1; the Services Agreement (Long Term) in substantially the form of Exhibit K-2; and the Agreement for Anhydrous Ammonia Storage and Throughput Service in substantially the form of Exhibit Q. (vii) Seller shall execute, acknowledge and deliver to Buyer Special Warranty Deeds for the Real Property substantially in the form of Exhibit L; (viii) Seller or its Affiliates shall execute, acknowledge and deliver to Buyer easements for access to the certain portions of the Real Property substantially in the form of Exhibit O covering the Real Property owned by Seller or its Affiliate upon which any of the Facilities are located; (ix) Buyer shall execute and deliver to Seller a Sales Tax Exemption Certificate(s) (for Resale) for the anhydrous ammonia linefill in a form or forms acceptable to the states in which the linefill is located; (x) Seller and Buyer shall execute and deliver to each other and such other conveyance documents and instruments of transfer and assignment necessary to convey the Assets to Buyer in the manner contemplated by this Agreement; and (xi) Seller shall deliver to Buyer a valid and enforceable release and termination agreement from Velocita Corp. and Sea Breeze Communications Company which fully releases and terminates (A) any and all rights of way previously granted to such entities that are related to or located on the same real property as the Property Rights, and (B) any and all rights previously granted to such entities related to the Property Rights, including any rights to develop the fiber optic rights of way located in the Property Rights or otherwise deal in any way with any fiber optic or similar cable or lines in, on, or in connection with, the Property Rights, and shall deliver such other related instruments and approvals as Buyer may require in connection therewith, such release and termination agreement, other instruments and other approvals to be in form and substance reasonably satisfactory to Buyer. (b) Payment. Buyer shall deliver to Seller, and Seller shall have received, the payment of the purchase price set forth in Article III, as adjusted, in immediately available same day funds by wire transfer for credit to Seller's account as designated by Seller in writing not less than three (3) Business Days prior to the anticipated Closing Date. 9.02 Conditions to Buyer's Obligations. Each obligation of Buyer to be performed by or at the Closing, is, at the option of Buyer, subject to each of the conditions set forth below. (a) The representations and warranties made by Seller in this Agreement shall be true and accurate in all material respects on and as of the Closing with the same effect as though such representations and warranties have been given on and as of the Closing and Buyer shall have received a certificate, dated as of the Closing Date, signed by Seller to such effect. Seller shall also have performed or complied with, in all material respects, all of its obligations under this Agreement which are to be performed or complied with by it prior to or at Closing and Buyer shall have received a certificate, dated as of the Closing Date, signed by Seller to such effect. (b) There shall not be on the Closing (i) any Order by any Governmental Body, (ii) any written threat thereof by any Governmental Body, which is evidenced by a writing from the threatening agency or (iii) any Proceeding, which in all reasonable likelihood, might prohibit or render illegal, the consummation of the transaction contemplated herein or which seeks damages on account thereof. (c) All agreements, documents, and instruments contemplated under this Agreement to be executed and delivered by Seller or its Affiliates shall have been duly executed by Seller or its Affiliates and shall be ready for delivery concurrently with the consummation of the transactions contemplated by this Agreement. (d) All required consents, approvals and waivers from any Governmental Body, including those under the HSR Act, shall have been received, or if applicable, the waiting period under the HSR Act applicable to the transactions contemplated hereby shall have expired or been terminated. (e) The Assignment and Assumption Agreement substantially in the form of Exhibit I shall have been executed and delivered by Seller and Buyer. (f) The Bill(s) of Sale substantially in the form of Exhibit J shall have been executed and delivered by Seller to Buyer. (g) Seller and Buyer shall execute and deliver to each other a Transition Services Agreement in substantially the form of Exhibit K-1; the Services Agreement (Long Term) in substantially the form of Exhibit K-2; and the Agreement for Anhydrous Ammonia Storage and Throughput Service in substantially the form of Exhibit Q. (h) The Special Warranty Deeds substantially in the form of Exhibit L shall have been executed and delivered by Seller to Buyer. (i) The Easements substantially in the form of Exhibit O shall have been executed and delivered by Seller to Buyer. (j) No material and adverse change shall have occurred in the Business, and no Casualty Loss to the Assets which would have a Material Adverse Effect (as defined in Section 7.01), whether or not covered by insurance, shall have occurred since the Reference Balance Sheet Date, and Seller shall have delivered to Buyer a certificate dated as of the Closing Date, executed by Seller representing to Buyer such facts. (k) Seller shall have delivered to Buyer an accurate list, dated as of the Closing Date, showing: (i) all agreements, contracts and commitments of the typed listed on Exhibit F entered into since the date of this Agreement (including amendments, if any, to the items listed on Exhibit F), and (ii) all other agreements, contracts and commitments relating to the Business or the Assets entered into since the date of this Agreement, together with true, complete and accurate copies of all such documents (the "New Contracts"). Buyer shall have the right and opportunity to review and approve the New Contracts. All of the New Contracts that are approved by Buyer shall be included in the Assets (with no addition or subtraction to or from the Purchase Price) and the future obligations of Seller thereunder shall be assigned to and assumed by Buyer pursuant to Section 2.04. Any New Contracts not approved by Buyer in writing shall remain the sole obligation of Seller and shall not be assumed by Buyer, and Buyer shall have no obligation or liability with respect thereto. (k) No notice to or consent, authorization, approval or order of any Person shall be required for the consummation of the transactions contemplated by this Agreement (except for notices that have been duly and timely given and consents, authorizations and approvals that have been obtained). True and correct copies of all required notices, consents, authorizations and approvals shall have been delivered to Buyer and shall be reasonably satisfactory in form and substance to Buyer and its counsel. (l) Buyer shall have waived, or Seller shall have cured, any title defects with respect to any of the Real Property included in any title reports secured by Buyer, which in Buyer's reasonable judgment would adversely impair Buyer's ownership or the use of said Real Property as currently used by Seller. (m) The release and termination agreement and other instruments and other approvals referenced in Section 9.01(a)(xi) shall have been executed and delivered to Buyer. 9.03 Conditions to Seller's Obligations. Each obligation of Seller to be performed on the Closing is, at the option of Seller, subject to each of the conditions set forth below: (a) The representations and warranties made by Buyer in this Agreement shall be true and accurate in all material respects on and as of the Closing with the same effect as though such representations and warranties had been given on and as of the Closing and Seller shall have received a certificate, dated as of the Closing Date, signed by Buyer to such effect. Buyer shall also have performed and complied with, in all material respects, all of its obligations under this Agreement which are to be performed or complied with by it prior to or at Closing. Seller shall have received a certificate, dated as of the Closing Date, signed by Buyer to such effect. (b) There shall not be on the Closing Date (i) any Order by any Governmental Body, (ii) any written threat thereof by any Governmental Body, which is evidenced by a writing received from the threatening agency or (iii) any Proceeding, which in all reasonable likelihood, might prohibit or render illegal, the consummation of the transaction contemplated herein or which seeks damages on account thereof. (c) All agreements, documents, and instruments contemplated under this Agreement to be executed and delivered by Buyer shall have been duly executed by Buyer and shall be ready for delivery concurrently with the consummation of the transactions contemplated by this Agreement. (d) All required consents, approvals and waivers from any Governmental Body, including those under the HSR Act, shall have been received, or if applicable, the waiting period under the HSR Act applicable to the transactions contemplated hereby shall have expired or been terminated. (e) The Assignment and Assumption Agreement substantially in the form of Exhibit I shall have been executed and delivered by Buyer to Seller. (f) Seller and Buyer shall execute and deliver to each other a Transition Services Agreement in substantially the form of Exhibit K-1; the Services Agreement (Long Term) in substantially the form of Exhibit K-2; and the Agreement for Anhydrous Ammonia Storage and Throughput Service in substantially the form of Exhibit Q. (g) No Casualty Loss to the Assets which would have a Material Adverse Effect (as defined in Section 7.01), whether or not covered by insurance, shall have occurred since the Reference Balance Sheet Date. (h) The Sales Tax Exemption Certificate(s) (for Resale) for the anhydrous ammonia linefill in a form or forms acceptable to the states in which the linefill is locate shall have been executed and delivered by Buyer to Seller. ARTICLE X: DISCLAIMERS; INDEMNITIES 10.01 Disclaimers. (a) Except as specifically set forth in Sections 4.01, 6.01 or 6.02, Buyer acknowledges and agrees that the Seller Indemnitees have not made, do not make, and expressly disclaim any warranties, representations, covenants, or guarantees, either express or implied, whether arising by operation of law or otherwise, as to the merchantability, habitability, quantity, quality, environmental condition, or physical condition of the Assets, their suitability or fitness for any particular purpose or use or that Buyer may increase or maintain the current or existing pipeline tariffs. Buyer affirms that it: (i) has had the opportunity prior to execution of this Agreement to investigate and inspect the Assets, including an environmental review, and (ii) has made its own determination as to the: (A) merchantability, habitability, quantity, quality and physical condition of the Assets, and (B) the Assets' suitability or fitness for any particular purpose or use. (b) Except as otherwise set forth herein, including the indemnity obligations hereunder, Buyer hereby agrees to accept the Assets upon Closing in their present environmental condition and physical condition on an "as is", "where is", and "with all faults and defects" basis, including environmental, regardless of how caused or created (including by Seller's Negligence/Fault, actions, omissions, or fault, pursuant to any statutory scheme, due to strict liability, or otherwise), and acknowledges that Seller shall not be under any obligation whatsoever pursuant to this Agreement to undertake any improvement, repair, modification, alteration, Remediation, or other work of any kind with respect to any of the Assets except as set forth in Section 7.01. (c) (i) Except with respect to those matters for which Seller is Indemnifying Buyer as provided under Section 10.03, the Seller Indemnitees are hereby expressly released by Buyer from any and all responsibilities, obligations, and Liabilities/Claims, known and unknown, whether based upon Negligence/Fault or otherwise, arising under Environmental Laws or any other Legal Requirement, including any obligations to take the Assets back or reduce the Purchase Price and any actions for contribution, indemnity, or to improve, repair, or otherwise modify the physical condition of the Assets, that Buyer or its successors or assigns may presently or in the future have against any of the Seller Indemnitees, based, in whole or in part, upon the presence of Hazardous Materials or other Environmental Condition on, at, under, or emanating from the Assets or arising from the environmental condition or physical condition of the Assets, regardless of how caused or created (by Seller's Negligence/Fault, actions or omissions pursuant to any statutory scheme or strict liability, or otherwise). Buyer further acknowledges that the provisions of this Section have been fully explained to Buyer and that it fully understands and accepts the same as a condition to proceeding with this transaction. Buyer acknowledges that none of the Seller Indemnitees have made any statements or representations contrary to the provisions of this section. Buyer specifically acknowledges that Seller is not assuming any Liabilities/Claims or Environmental liabilities of the Buyer Indemnitees. (ii) Except with respect to those matters for which Buyer is Indemnifying the Seller Indemnitees as provided under Section 10.02, the Buyer Indemnitees are hereby expressly released by Seller from any and all responsibilities, obligations, and Liabilities/Claims, known and unknown, whether based on Negligence/Fault or otherwise, arising under Environmental Laws or any other Legal Requirement, including any obligations to increase the Purchase Price and any actions for contribution, indemnity, or to improve, repair, or otherwise modify the physical condition of the Assets, that Seller or its successors or assigns may presently or in the future have against any of the Buyer Indemnities, based, in whole or in part, upon the presence of Hazardous Materials or other Environmental Condition on, at or under, or emanating from the Assets or arising from the environmental condition or physical condition of the Assets, regardless of how caused or created (by Buyer's Negligence/Fault, actions or omissions pursuant to any statutory scheme or strict liability, or otherwise). Seller further acknowledges that the provisions of this Section have been fully explained to Seller and that it fully understands and accepts the same as a condition to proceeding with this transaction. Seller acknowledges that none of the Buyer Indemnitees have made any statements or representations contrary to the provisions of this section. Seller specifically acknowledges that Buyer is not assuming any Liabilities/Claims or Environmental liabilities of the Seller Indemnitees. (iii) This Section 10.01(c) is not intended, and should not be construed, to: (A) cause Buyer or its successors or assigns to become responsible for any Liabilities/Claims or Environmental Liabilities of Seller except as provided in Section 10.02; (B) cause Seller or its successors or assigns to become responsible for any Liabilities/Claims or Environmental Liabilities of Buyer except as provided in Section 10.03; or (C) alter or modify in any manner the indemnity obligations of the parties under this Agreement. (d) Except as specifically set forth in Sections 4.01 or 6.01, none of the Seller Indemnitees make any warranty or representation, express, implied, statutory or otherwise, as to the accuracy or completeness of any title opinion, data, reports, records, projections, information, or materials now, heretofore, or hereafter furnished or made available to Buyer in connection with the Assets, including any description of the Assets, the pricing assumptions, the environmental condition or physical condition of the Assets, any other matters contained in the data, or any other materials furnished or made available to Buyer by Seller or by any Seller Indemnitee. (e) By virtue of the purchase of the Assets from Seller, Buyer acknowledges that Seller hereby expressly excludes, and does not assign, transfer, or convey to Buyer any rights or benefits of or to any insurance policies of Seller or Seller's Affiliates which might relate to, cover, or insure Seller for loss of or liability arising from the use, ownership, or operation of the Assets, regardless of whether such assignment, right, or benefit arises by statute, agreement, or operation of law, including but not limited to defense and indemnity benefits attributable to or arising from or under such policies. 10.02 Buyer's Indemnity. After the Effective Time, and to the fullest extent permitted by law, but subject to the other provisions of this Article X, Buyer shall Indemnify the Seller Indemnitees from and against any and all Liabilities/Claims arising from or relating to: (a) any breach of the representations and warranties or covenants made by Buyer in this Agreement; (b) Buyer's, its contractors' and/or agents' inspection of the Assets, regardless of whether such Liabilities/Claims are caused by or arise from the Seller Indemnitees' or third Persons' negligence, actions, omissions or fault, or otherwise; (c) the possession, ownership, condition, use, or operation of the Assets by Buyer, or its successors or assigns after the Effective Time, or the assumption of responsibilities hereunder by Buyer concerning the Assets (except that Buyer shall have no duty to Indemnify the Seller Indemnitees under this Section 10.02(c) with respect to any Environmental Condition or environmental related Liabilities/Claims, which is covered exclusively under Sections 10.02(d) and 10.02(e)), provided such Liabilities/Claims are not caused by and do not arise from Seller Indemnitees' negligence, actions, omissions or fault, except that this Indemnity shall apply to the extent Liabilities/Claims arise from or relate to the design, physical condition, or maintenance-status of the Assets as of the Effective Time, regardless of whether the design, physical condition, or maintenance-status of the Assets is caused by, or arises from, Seller Indemnitees' or third Persons' pre-Closing negligence, actions, omissions or fault; provided, further that the indemnity set forth in this Section 10.02(c) shall not apply to the extent Seller has an indemnity obligation to Buyer pursuant to Section 10.03; (d) any Environmental Condition or environmental related Liability/Claim arising from the operation by Buyer, design, physical condition, or maintenance-status of the Assets after the Effective Time while owned or operated by Buyer, its successors or assigns; provided, that, such Environmental Condition does not result from and is not attributable to the Seller Indemnitees negligence, actions, omissions or fault or a third Person's negligent actions or omissions or fault prior to the Effective Time, except that this Indemnity shall apply to the extent Liabilities/Claims arise from or relate to the design, physical condition, or maintenance-status of the Assets as of the Effective time, regardless of whether the design, physical condition, or maintenance-status of the Assets is caused by, or arises from, Seller Indemnitees' or third Persons' pre-Closing negligence, actions, omissions or fault; provided, further that the indemnity set forth in this Section 10.02(d) shall not apply to the extent Seller has an indemnity obligation to Buyer pursuant to Section 10.03; and (e) any Liabilities/Claims and Environmental Liabilities arising as a result of an Unknown Environmental Condition, which Unknown Environmental Condition is discovered or reported to Seller more than two (2) years after the Closing Date, except for Liabilities/Claims and Environmental Liabilities arising out or relating to personal injury or death to persons or fines and penalties, for which Buyer shall not owe any indemnity under this Section 10.02(e). 10.03 Seller's Indemnity. After the Effective Time, and to the fullest extent permitted by law, but subject to the other provisions of this Article X, Seller shall Indemnify the Buyer Indemnitees from and against any and all Liabilities/Claims arising from or relating to: (a) any breach of the representations and warranties or covenants made by Seller in this Agreement; provided, that, for purposes of the indemnity set forth in this Section 10.03(a), the representations and warranties of Seller set forth in this Agreement shall be deemed to have been made by Seller without any qualifications regarding materiality and reference therein to "material" or "materiality" or similar words shall be deemed deleted, it being the agreement of the Parties that with respect to the indemnity set forth in this Section 10.03(a), Seller's only relief with respect to materiality shall be the Threshold Amount set forth in Section 10.04; (b) the possession, ownership, use, or operation of the Assets by Seller prior to the Effective Time (except that Seller shall have no duty to Indemnify under this Section 10.03(b) with respect to any Environmental Condition or environmental related Liabilities/Claims, which is covered exclusively by the provisions of Sections 10.03(c), 10.03(d) and 10.03(e)), except for Liabilities/Claims arising post-Closing to the extent they arise from or relate to the design, physical condition, or maintenance-status of the Assets as of the Effective Time, which are specifically and exclusively covered by Buyer's indemnity set forth in Sections 10.02(c) and 10.02(d); (c) any Known Environmental Condition; (d) any Unknown Environmental Condition and Environmental Liability arising from an event, condition, incident, action or omissions existing or occurring prior to the Effective Time relating to the Assets or the Business, except for Environmental Liabilities arising post-Closing to the extent they arise from or relate to the design, physical condition, or maintenance-status of the Assets as of the Effective Time, which are specifically and exclusively covered by Buyer's indemnity set forth in Sections 10.02(c) and 10.02(d); (e) Seller's disposal, treatment, transportation for disposal or treatment or the storage in anticipation of the disposal or treatment, of Hazardous Material prior to the Effective Time; (f) any Proceedings pending before any Governmental Body as to which it has been served process or which Seller has received written notice; and (g) any substantial non-compliance with Legal Requirements associated with Seller's ownership or operation of the Assets or the Business prior to the Effective Time (but excluding those matters relating to Environmental Condition or environmental related Liabilities/Claims to the extent they are covered by the indemnity set forth in Sections 10.02(d), 10.02(e), 10.03(c), 10.03(d) and 10.03(e)). 10.04 Threshold and Monetary Cap. Notwithstanding the provisions of Sections 10.02 and 10.03, with respect to Liabilities/Claims arising under Sections 10.03(a), 10.03(b), 10.03(d), 10.03(e), and 10.03(f), Seller shall have no liability, and Buyer shall assume all liability, and shall Indemnify the Seller Indemnitees from and against all Liabilities/Claims with respect to the first One Hundred Thousand Dollars ($100,000.00) (the "Threshold Amount");, it being understood that all such Liabilities/Claims shall accumulate until such time or times as the aggregate of such Liabilities/Claims, exceed the Threshold Amount, whereupon Seller shall Indemnify the Buyer Indemnitees from and against all such Liabilities/Claims in excess of the Threshold Amount, up to a maximum of Fourteen Million Dollars ($14,000,000.00)(the amount above $100,000.00 up to a total liability of $14,000,000.00, for a total liability by Seller of $13,900,000.00) (the "Monetary Cap"). Notwithstanding anything contained herein (except for the next sentence), with respect to any such Liabilities/Claims in excess of the Monetary Cap, Seller shall, without limitation, have no liability to any Buyer Indemnitee, direct or indirect for any Liabilities/Claims. Notwithstanding the other provisions of this Section 10.04, with respect to: (i) Seller's warranties of title set forth in Sections 4.01(q), 6.01 and 6.02, the monetary cap shall equal the Purchase Price; and (ii) Seller's Indemnity under Section 10.03(c) and action arising from actual fraud or willful misconduct, the Threshold and Monetary Cap shall not be applicable. 10.05 Survival. Except as limited by this Section 10.05, all of the respective indemnifications, representations, warranties, covenants, agreements and other obligations of the Parties, including the indemnification obligations hereunder, shall survive Closing and shall not be deemed merged into any conveyance documents. For the avoidance of doubt, all such obligations shall survive the Closing regardless of any investigation at any time made by or on behalf of Buyer. (a) Representations and Warranties. Except as otherwise stated herein, the respective representations and warranties of the Parties set forth in this Agreement shall terminate two (2) years after the Closing Date except for claims made in writing with respect to a particular matter or matters prior thereto, and provided that any acknowledgments, waivers or representations given herein may be asserted as a defense by any Party hereunder at any time in connection with defending a claim or claims asserted by the other Party, or its successors or permitted assigns, with regard to any of the transactions contemplated by this Agreement. Seller's representations and warranties of title set forth in Sections 4.01(q), 6.01 and 6.02 shall survive the Closing indefinitely, notwithstanding any otherwise applicable statute of limitation. (b) Indemnities. Except as otherwise stated herein, the respective indemnity obligations of the Parties set forth in this Agreement shall terminate two (2) years after the Closing Date except for claims made in writing with respect to a particular matter or matters prior thereto; provided, however, the following indemnity obligations shall survive the Closing indefinitely, notwithstanding any otherwise applicable statute of limitation: (i) Buyer's indemnity obligations set forth in Section 10.02(e); (ii) Buyer's indemnity obligations set forth in Section 10.02(c) and Section 10.02(d) solely with respect to the design, physical condition or maintenance-status of the Assets as of the Effective Time; (iii) Seller's indemnity obligations set forth in Section 10.03(c); (iv) Seller's indemnity obligations set forth in Section 10.03(a) solely with respect to Seller's representations and warranties of title set forth in Section 4.01(q) and Section 6.01; and (v) the Parties' post-Closing covenants. (c) Covenants. The covenants and obligations of the Parties contained in this Agreement, to the extent required in order for a Party or Parties to receive the intended benefits of any such provision, shall extend beyond any applicable statutory limitation period, and shall not terminate by reason of such statutory limitation period otherwise imposed by law. 10.06 Sole and Exclusive Remedy. Other than claims for actual fraud, and except for any right of specific performance of this Agreement that a Party may have under law or equity, the right of each Party to seek indemnification (subject to the limitations provided for in this Article X) from the other Party shall be the sole and exclusive remedy of each Party against the other under this Agreement, and subject to the foregoing, it is expressly understood and agreed that, except by virtue of the indemnification provisions set forth herein, neither Party is entitled to any non-contractual indemnity, contribution, adjustment, reduction, set-off, damages or the like in connection with the transaction contemplated hereby, but may be entitled to any appropriate equitable relief. 10.07 Limitations. Notwithstanding anything to the contrary contained in this Agreement, neither Party: (a) shall be liable to the other Party for any damages related to or arising in connection with this Agreement or the transactions contemplated hereby other than actual or compensatory damages; it being agreed that no Party shall be liable to the other for indirect, incidental, consequential, exemplary, punitive damages or diminution in value of the Assets or the Business hereunder, including any lost earnings or profits or losses due to business interruption; or (b) shall be entitled to recover more than once for any one Liability/Claim for which full indemnification is provided hereunder, such as in the case of Liabilities/Claims flowing from the breach of more than one representation, warranty, covenant, or agreement hereunder. 10.08 Indemnification Procedures. If any Proceedings are instituted or any claim or demand is asserted by any Person in respect of which indemnification may be sought by any Party or Parties from any other Party or Parties under the provisions of this Agreement, the Party or Parties seeking indemnification (collectively, the "Indemnitee") shall cause Notice of the assertion of any claim of which it has knowledge that is covered by the indemnity to be forwarded promptly to the Party or Parties from which indemnification is sought (collectively, the "Indemnitor"); provided, that failure or delay in providing Notice shall not relieve the Indemnitor of liability except to the extent prejudiced by such failure or delay. The Indemnitor shall have the right, at its option and at its own expense, to be represented by counsel of its choice and to participate in, or, if the Indemnitor acknowledges in writing to the Indemnitee the Indemnitor's obligations to Indemnify the Indemnitee with respect to a Liability/Claim, to take exclusive control of, the defense, negotiation, and/or settlement of any Proceeding or demand which relates to any amounts indemnifiable or potentially indemnifiable under this Agreement; provided, however, that the Indemnitee may participate in any such Proceeding with counsel of its choice and at its own expense, shall have a right to Notice of any settlement, and the Indemnitor shall not execute or otherwise agree to any settlement or consent decree which provides for other than monetary payment without the Indemnitee's prior written consent, which consent will not unreasonably be withheld, conditioned or delayed. If the Indemnitor elects not to defend or settle such Proceeding or demand and the Indemnitee defends, settles, or otherwise deals with any such Proceeding or demand, which settlement may be without the consent of the Indemnitor, the Indemnitee will act reasonably and in accordance with its good faith business judgment. The Parties hereto agree to reasonably cooperate fully with each other in connection with the defense, negotiation, or settlement of any such Proceeding or demand. After final judgment or award shall have been rendered by a Government Body and the expiration of the time in which to appeal therefrom, or a settlement shall have been consummated, or the Indemnitee and the Indemnitor shall have arrived at a mutually binding agreement with respect to each separate matter indemnified by the Indemnitor, the Indemnitee shall forward to the Indemnitor Notice of any sums due and owing by the Indemnitor with respect to such matter and the Indemnitor shall pay all of the sums so owing to the Indemnitee by check within thirty (30) days after the date of such Notice. If a claim is made by a third Person against an Indemnitee, the Indemnitee will, at its own expense, use its commercially reasonable efforts to make available to the Indemnitor those employees whose assistance, testimony, or presence is necessary to assist the Indemnitor in evaluating and in defending such claims; provided, however, that any such access shall be conducted in such a manner as not to interfere unreasonably with the operations of the business of the Indemnitee. ARTICLE XI: INSPECTION AND RECORDS; TITLE 11.01 Inspection. Prior to Closing, at any reasonable time and from time to time, Seller shall permit the representatives of Buyer to inspect the Assets and observe the operating and maintenance personnel therein employed, to further observe any and all activities related to the maintenance, operation, contracting, and administration thereof. All information furnished to Buyer pursuant to this provision will be deemed to be "Confidential Information" for purposes of the Confidentiality Agreement. All inspections shall be conducted in compliance with all of Seller's safety procedures, rules and regulations in effect at the Assets from time to time, which shall include, without limitation, site safety training and access restriction procedures as are normally required by Seller of third Person invitees. 11.02 Title Inspection. Prior to Closing, Buyer may complete a review of title to the Real Property and the Property Rights. (a) Title Inspection of Real Property. Seller shall have no obligation to cure any Title Defects to any of the Real Property, but, as set forth in Section 9.02(l), if any title report prepared by or for Buyer shows any title defects with respect to any of the Real Property which in Buyer's reasonable judgment would adversely impair Buyer's ownership or the use of said Real Property as currently used by Seller, Seller's curing of such Title Defects shall be a condition to Buyer's obligation to Close hereunder and if not waived by Buyer or cured by Seller, Buyer shall have the right to terminate this Agreement pursuant to the provisions of Section 14.06. (b) Title Inspection of Property Rights, Leasehold Interests and Permits. Seller shall notify Buyer prior to Closing of any gaps or Title Defects within Seller's Knowledge with respect to the Property Rights, Leasehold Interests and Permits. Upon Buyer's completion of its review of the Property Rights, Leasehold Interests and Permits, the Parties will agree upon the known gaps and Title Defects in the Property Rights, Leasehold Interests and Permits. The Parties agree that there will be a downward adjustment to the Purchase Price of Eighty dollars ($80.00) per rod for gaps or for which there are Title Defects in the Property Rights, Leasehold Interests and Permits, which the Parties agree is a reasonable approximation of the cost to cure such gaps and Title Defects and which shall be reflected in the adjustment to the Purchase Price pursuant to Section 3.02(b)(iv). If Buyer and Seller do not agree on the number of rods for which there are gaps or Title Defects in the Property Rights, Leasehold Interests and Permits (which results in a Purchase Price reduction), either Buyer or Seller may terminate this Agreement pursuant to Section 14.06. Buyer may raise for consideration any such gaps or Title Defects it discovers prior to Closing. Subject to Seller's disclosure to Buyer of all gaps and Title Defects within Seller's Knowledge and to agreement upon the number of rods for which there are gaps and Title Defects in the Property Rights, Leasehold Interests and Permits, the mutually agreed upon reduction in the Purchase Price (which shall be equal to $80.00/rod times the number of rods for which there is a gap or Title Defect) shall be Buyer's sole and exclusive remedy with respect to any such gaps and Title Defects, whether Known by Seller or unknown as of Closing. ARTICLE XII: TAXES 12.01 Tax Proceedings. If Buyer or any of its Affiliates receives notice of any examination, adjustment, or other Proceeding relating to the liability for Taxes of or with respect to Seller for any period prior to the Effective Time, Buyer shall provide Notice to Seller within seven (7) Business Days of receiving notice thereof (or such lesser time if such notice given to Buyer requires action in less than seven (7) Business Days). As to any such Taxes for which Seller is or may be liable, Seller shall, at Seller's expense, control or settle the contest of such examination, adjustment, or other Proceeding, and shall defend (upon Buyer's request), indemnify and hold the Buyer Indemnitees harmless from and against all losses in connection therewith. The Parties shall cooperate with each other and with their respective Affiliates in the negotiations and settlement of any Proceeding described in this Section 12.01 and in Section 12.02. 12.02 Sales Taxes. The Purchase Price provided for hereunder excludes any sales Tax or other Taxes required to be paid in connection with the sale of the Assets and the Parties agree that this transaction is an isolated or occasional sale and that sales Tax is not due; however if any sales tax is eventually levied upon this transaction, as set forth in Section 3.01(b), Buyer shall be responsible for all applicable sales and use Taxes, gross receipts, conveyance, transfer, and recording fees, motor vehicle transfer and excise Taxes and registration fees, and real estate transfer Taxes and documentary stamp Taxes, if any, that may be imposed on any transfer pursuant to this Agreement, except that Buyer shall not be responsible for (i) any Taxes based upon income, or (ii) any sales, transfer or similar Tax which may be payable with respect to the anhydrous ammonia owned by Seller as Net Inventory, for which Seller shall pay any applicable sales, transfer or similar Tax. Except for any applicable sales, transfer or similar Tax on the Net Inventory, Buyer shall Indemnify the Seller Indemnitees from and against any and all sales, use, gross receipts and similar Taxes and related penalties and interest imposed on Seller based on the sale of the Assets (but not Taxes based on income). To the extent the sale of the Assets is a sale of tangible personal property, Buyer and Seller shall cooperate to obtain any applicable exemption certificates or other documentation necessary to obtain available Tax exempt status for the sale of the Assets. 12.03 Other Taxes. Buyer shall defend (upon Seller's request), indemnify and hold the Seller Indemnitees harmless from, and shall be responsible for, paying or withholding or causing to be paid or withheld all Taxes of Buyer which accrue after the Effective Time and for filing all statements, returns, and documents incident thereto. ARTICLE XIII: EMPLOYEE MATTERS 13.01 Employees. (a) Seller shall take all action necessary to assure that Buyer may interview and offer employment to any or all of the employees listed on Schedule 13.01 ("Employees"), which offers of employment will be conditioned upon Closing and upon the termination of such employees' employment with Seller or its Affiliates at the Effective Time and shall be effective as of the Effective Time. Buyer shall provide Seller with a list of all of those Employees it wishes to interview or make offers of employment to without interviews and shall coordinate interviews with a Seller designated representative. Buyer shall provide Seller a list of those Employees to whom offers of employment have been made, which list shall include the nature and title of the position, salary, and location of employment. Buyer shall also provide Seller with a list of those Employees accepting Buyer's employment offer on or before seven (7) days prior to the anticipated Closing Date. Such offers of employment shall be on the same basis, and Buyer shall treat the Hired Employees on substantially the same basis, as other similarly situated employees of Buyer. (b) The Hired Employees will become Buyer's Employees at the Effective Time. At that time, Buyer will become responsible for wages, salaries, benefits, other compensation, severance pay, and severance benefits to the extent required under federal, state, or local law, or notices required under such laws with respect to the Hired Employees arising with respect to employment with Buyer and which relate to any period after the Effective Time. Buyer shall Indemnify the Seller Indemnitees from and against any Liabilities/Claims by any Hired Employees for their wages, salaries, bonuses, severance pay, and severance benefits provided under federal, state, or local law, notices required under such laws, and compensation or benefits of any kind which accrue under Buyer's employee benefit plans as a result of and related to any of the Hired Employees' employment with Buyer after the Effective Time. (c) Seller shall retain responsibility for, and shall Indemnify the Buyer Indemnitees from and against all liabilities or obligations for the following matters which accrue for the periods prior and up to the Effective Time as a result of the Employees' employment with Seller: (i) wages, salaries, commissions and bonuses; (ii) all accrued and outstanding employee benefits and severance pay and severance benefits to the extent required under federal, state, or local law, or notices required under such laws with respect to Employees of Seller who are terminated prior to the Effective Time; (iii) vacation pay with respect to the Hired Employees; and (iv) any other employee-related matters or liabilities with respect to its employees during the periods in which they are employed by Seller. 13.02 Employee Benefit Plans. (a) At the Effective Time, Seller or its Affiliates shall cause the termination of the participation of the Hired Employees in all of the Plans, except that the Hired Employees' participation in Seller's or its Affiliates' medical and dental plans shall continue through the last day of the month in which the Effective Time occurs. On the last day of the month in which the Effective Time occurs, the Hired Employees' participation in Seller's or its Affiliates' medical and dental plans shall terminate. Seller shall determine whether the "same desk" rule applies to the Seller's or its Affiliates' Tax qualified savings plan. If such rule does not apply, Seller shall make distribution to the Hired Employees in accordance with the terms of Seller's or its Affiliates' plan. (b) All of the Hired Employees will be permitted to enroll in all of Buyer's "employee welfare benefit plans," as that term is defined in Section 3(1) of ERISA, upon the termination of such benefits under Seller's or its Affiliates' Plans and any other employee programs of Buyer in accordance with the terms and conditions of Buyer's plans and programs in effect from time to time for its similarly situated employees generally. (c) Subject to the satisfaction of the conditions described below in this Section 13.02(c), at the Effective Time Buyer shall waive or cause the waiver of waiting periods, pre-existing condition exclusions, deductibles (for the remainder of 2002), and other limitations on participation otherwise applicable to any Hired Employee and qualified dependents (who were covered by an employee welfare benefit plan of Seller or its Affiliates and immediately elects to be covered by an employee welfare benefit plan of Buyer) under or with respect to all employee welfare benefit plans maintained by Buyer. The conditions for the waivers described above are: (i) Buyer will waive waiting periods to the extent service with Seller would otherwise satisfy the waiting period and the Hired Employee is actively at work. For Long Term Disability Insurance, the waiver is contingent upon receiving a waiver from Buyer's insurance carrier; (ii) Buyer will waive pre-existing condition exclusions to the extent a Certificate of Creditable Coverage is presented by and for the Hired Employee and all dependents showing coverage for the eighteen (18) months immediately prior to coverage under Buyer's plan; and (iii) Buyer will offset (waive or partially waive) deductibles to the extent the Hired Employee or dependent shows reasonable evidence of satisfaction of the applicable deductible with Seller during the same calendar year. (d) Seller shall retain responsibility for any medical, dental, life, vision, AD&D, cafeteria, short-term disability, and long-term disability claims by any Hired Employee which were incurred on or prior to the Effective Time and for workers' compensation claims related to injuries arising from the employment of the Hired Employees for periods prior to and through the Effective Time, in each case to the extent covered by the respective employee benefit plan and/or insurance plan or policy of Seller or its Affiliates, and any claims regarding the Seller's 401(k) Plan which arise out of the administration or operation of such Plan prior to the Effective Time. Seller shall be responsible, and bear all costs, for the administration and termination of such benefits and Seller represents and warrants that Buyer shall have no liability with respect thereto. Buyer states that it does not assume, and shall have no liability with respect to, any medical, dental, life, vision, AD&D, cafeteria, short-term disability or long-term disability claims by any Hired Employee which were incurred on or prior to the Effective Time or for workers' compensation claims related to injuries arising from the employment of the Hired Employees for periods prior to and through the Effective Time, in each case whether or not covered by the respective employee benefit plan and/or insurance plan or policy of Seller or its Affiliates, or any claims regarding the Seller's 401(k) Plan which arise out of the administration or operation of such plan prior to the Effective Time. (e) For purposes of this Section, a claim for reimbursement under a medical, hospital or dental, prescription drug, or similar plan shall be deemed to be incurred on the date that the claim occurs. A claim occurs on the date service is provided and there shall be no continuation of a claim from one day to the next. In the event of a hospitalization commencing prior to the last day of the month in which the Effective Time occurs, any existing coverage shall cease on the last day of the month in which the Effective Time occurs unless the participant elects COBRA continuation coverage. (f) With respect to the Hired Employees, prior employment with Seller or an Affiliate thereof shall be recognized by Buyer, for the purpose of determining service awards, severance, vacation eligibility, and for eligibility, vesting, and participation under Buyer's employee benefit plans, but not with respect to calculating pension benefit payments. All Hired Employees shall be subject to Buyer's vacation policies, provided all such Hired Employees shall be given full credit for pre-Closing years of service recognized by Seller and its Affiliates for vacation purposes under Buyer's policy. Seller shall be responsible for payment to Hired Employees for any accrued and earned but not used vacation. The Hired Employees will be permitted by Buyer to take the vacation time paid by Seller as time off without pay after the Closing Date until they reach their anniversary year at which time they will be given vacation recognizing prior years of service with Seller on Buyer's vacation schedule. (g) Seller shall not include a reserve for accrued bonuses through the Effective Time. Seller shall pay such amounts, if any, directly to the Hired Employees. 13.03 No Third Party Employee Beneficiary. The Parties expressly acknowledge that this Agreement is not intended to create a contract between either Buyer or Seller, on the one hand, and any Hired Employee, on the other hand, and no Hired Employee may rely on this Agreement as the basis for any breach of contract claim against Buyer or Seller. Seller shall not, in any manner, be responsible or liable for administration or the payment of any benefit due under any plans maintained by Buyer after the Closing. 13.04 Federal Worker Adjustment and Retraining Notification Act. Seller shall have caused the termination of the employment of the Hired Employees as of the Effective Time and shall have provided such notice of termination if and as required by the Worker Adjustment Retraining and Notification Act, as amended, and shall have complied with any comparable state or local statutes or regulations. ARTICLE XIV: MISCELLANEOUS PROVISIONS 14.01 Commission. Each of the Parties represents and warrants that there are no claims for brokerage commission or finders' fees in connection with the transaction contemplated by this Agreement arising as a result of any actions taken or agreements by such Party, and Seller and Buyer will respectively pay or discharge, and will Indemnify the other Party against, brokerage commissions or finders' fees incurred by reason of any action taken by such Indemnitor. 14.02 Assignment. The terms, provisions and conditions of this Agreement shall extend to, be binding upon and inure to the benefit of the Parties, their respective successors and permitted assigns. No Party will make an assignment of its rights and/or obligations under this Agreement without the prior written consent of the other, which such consent may be withheld for any reason. Any assignment or attempted assignment in violation of this Section shall be void. Notwithstanding the foregoing, either Party may assign this Agreement, and its rights and obligations hereunder, to any of its respective Affiliates upon providing Notice to the other Party without first obtaining the written consent of the other Party; provided that the assigning Party shall remain liable for its obligations hereunder notwithstanding such assignment. 14.03 Entire Agreement; Amendments. This Agreement and the exhibits and schedules attached hereto and incorporated by reference herein contain the entire understanding of the Parties with respect to its subject matter. There are no restrictions, agreements, promises, warranties, covenants or undertakings relating to the transactions contemplated herein other than those expressly set forth herein. This Agreement supersedes all prior agreements and understandings between the Parties with respect to its subject matter. This Agreement may be amended only by a written instrument duly executed by the Parties. Any condition to a Party's obligations hereunder may be waived in writing by such Party. No waiver by any Party of any one or more defaults by the other in performance of any of the provisions of this Agreement shall operate or be construed as a waiver of any future default or defaults, whether of a like or different character. 14.04 Severability. Each portion of this Agreement is intended to be severable. If any term or provision hereof is illegal or invalid for any reason whatsoever, such illegality or invalidity shall not affect the validity of the remainder of this Agreement. 14.05 Actions. Seller and Buyer, singularly and plurally, warrant and agree that each shall use its commercially reasonable efforts to take or cause to be taken all such action as may be necessary to consummate and make effective the transaction as set forth in this Agreement and to assure that it will not be under any material corporate, legal or contractual restriction that would prohibit or delay the timely consummation of such transaction. 14.06 Termination. (a) This Agreement may be terminated at any time on or prior to Closing: (i) by mutual written consent of Seller and Buyer; (ii) by Seller if the conditions set forth in Section 9.03 have not been satisfied in all material respects by Buyer or not waived by Seller in writing by December 31, 2002 (the "Drop Dead Date"); (iii) by Buyer if the conditions set forth in Section 9.02 have not been satisfied in all material respects by Seller or not waived by Buyer in writing by the Drop Dead Date; (iv) by Buyer or Seller pursuant to and in accordance with Section 7.01 or Section 11.02(b); or (v) by Buyer pursuant to and in accordance with Section 7.02(b)(iv) or Section 11.02(a). (b) If the Closing does not occur as a result of either Seller or Buyer exercising its right to terminate pursuant to this Section 14.06, this Agreement shall be null and void, and no Party shall have any rights or obligations under this Agreement, except that: (i) A termination shall not relieve any Party from any liability for breach hereof occurring prior to termination, and the non-breaching Party shall be entitled to any and all relief under applicable law or in equity on account of such breach; and (ii) Buyer's obligations under the Confidentiality Agreement shall survive any such termination. 14.07 Counterparts. This Agreement may be executed simultaneously in any number of counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. 14.08 Governing Law. This Agreement shall be governed by, enforced in accordance with, and interpreted under, the laws of the State of Kansas, without regard to its conflicts of law principles. 14.09 Time of Essence. With regards to dates and time periods set forth or referred to in this Agreement, time is of the essence. 14.10 Nondisclosure of Confidential Information. (a) Seller recognizes and acknowledges that it has knowledge of certain confidential information regarding the Assets and the Business which will be included in the Assets conveyed to Buyer at Closing hereunder. Seller agrees that it will not disclose, and will use reasonable commercial efforts to prevent disclosure to any other Person of such confidential information except to authorized representatives of Buyer. Seller recognizes and agrees that violation of this provision may cause irreparable damage or injury to Buyer, the exact amount of which may be impossible to ascertain, and that Buyer may be entitled to an injunction, without the necessity of posting a bond therefor, restraining any further violation of this provision. Such rights to any injunction shall be in addition to, and not in limitation of, any other rights and remedies Buyer may have vis-a-vis Seller. (b) The Parties acknowledge and agree that the terms and conditions of this Agreement, including any Exhibits and Schedules referenced herein, are confidential and proprietary to each of the Parties and that they will use reasonable commercial efforts to prevent disclosure of the contents hereof to any Person, except as by an authorized representative of the other Party (including that Party's attorneys, accountants, auditors and lenders who are bound to a duty of confidentiality to that Party), and except as required, and then only to the extent required, to be disclosed pursuant to a Legal Requirement, and then the Party disclosing it shall make reasonable commercial efforts to obtain reliable assurance from the Person to whom it is disclosed that confidential treatment will be accorded thereto. In such instance the other Party shall be provided sufficient prior Notice of the requirement to disclose such that the other Party may seek, at its expense, a protective order or other appropriate remedy with respect thereto. 14.11 Assignment of Contracts and Property Rights. Notwithstanding any other provision of this Agreement, nothing in this Agreement or any related document shall be construed as an attempt to assign or transfer: (i) any Contract, Leasehold Interest, Permit or Property Right which as a matter of law or by its terms, is non-assignable without the consent of the other parties thereto unless such consent has been given, or (ii) any Contract or claim as to which all of the remedies for the enforcement thereof enjoyed by Seller would not, as a matter of law or by its terms, pass to Buyer incident to the assignment or transfer to Buyer to be made under this Agreement. However, in order to assist Buyer in preserving and realizing the full value of such Contracts, Leasehold Interests, Permits, Property Rights and claims, Seller, at the request of Buyer, shall exercise reasonable efforts to assist Buyer in capturing the commercial benefit of such non-assignable Contracts, Leasehold Interests, Permits and Property Rights, and to facilitate the collection of moneys due and payable and to become due and payable thereunder to Buyer under such Contracts and claims. Seller shall promptly pay over to Buyer all moneys collected by or paid to it with respect to each such Contract or claim. 14.12 Notices and Addresses. (a) All notices required or permitted hereunder shall be in writing and shall be served on the Parties at the addresses set forth in Section 14.12(b). Any such notices may be sent by: (i) a nationally recognized overnight courier, in which case notice shall be deemed delivered three (3) Business Days after deposit with such courier; (ii) facsimile transmission, in which case notice shall be deemed delivered upon actual receipt by recipient; (iii) certified mail, return receipt requested, in which case notice will be deemed delivered three (3) Business Days after mailing; or (iv) hand-delivery, in which case notice shall be deemed delivered upon actual receipt by recipient. Copies of notices are for informational purposes only, and a failure to give or receive copies of any notice shall not be deemed a failure to give notice. Any notice or other communication required to be given under this Agreement or in connection with the matters contemplated by it shall be in writing in the English language. The refusal to accept delivery shall constitute acceptance, and in such event, the date of delivery shall be the date on which delivery was refused. Notwithstanding anything to the contrary contained herein, if the delivery of any notice, item, or information, pursuant to the terms hereof, begins the running of a time period during which a Party is obligated to respond or else have its approval deemed to have been granted or denied, then such notice, item, or information shall either bear or be accompanied by a cover letter w+hich bears the following legend (in bold and capital letters): "TIME SENSITIVE REQUEST - RESPONSE REQUIRED WITHIN A FINITE NUMBER OF DAYS." (b) The addresses and other details of the Parties are (or at such other address as either Party may designate by written notice): Seller: Koch Pipeline Company, L.P. 4111 East 37th Street North Wichita, Kansas 67220 Attention: President Phone Number: (316) 828-5385 Fax Number: (316) 828-7666 Koch Fertilizer Storage and Terminal Company 4111 East 37th Street North Wichita, Kansas 67220 Attention: President Phone Number: (316) 828-8996 Fax Number: (316) 828-7946 With copies to: Koch Fertilizer Storage and Terminal Company 4111 East 37th Street North Wichita, Kansas 67220 Attention: Steven H. Carter Phone Number: (316) 828-5138 Fax Number: (316) 828-9811 Koch Pipeline Company, L.P. 4111 E. 37th Street North Wichita, KS 67220 Attention: General Counsel Phone Number: (316) 828-4550 Fax Number: (316) 828-7997 Buyer: Kaneb Pipe Line Operating Partnership, L.P. 2425 North Central Expressway, Suite 700 Richardson, TX 75080-2731 Attn.: Edward D. Doherty Chairman of the Board and Chief Executive Officer Phone Number: (972) 699-4013 Fax Number: (972) 699-1894 With Copies to: Kaneb Pipe Line Operating Partnership, L.P. 7340 West 21st Street N, Suite 200 Wichita, KS 67205 Attn.: Jimmy L. Harrison, President Phone Number: (316) 773-9000 Fax Number: (316) 773-9001 Fulbright & Jaworski L.L.P. 2200 Ross Avenue, Suite 2800 Dallas, TX 75201 Attn.: Kenneth L. Stewart Phone: (214) 855-8060 Fax Number: (214) 855-8200 THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK. IN WITNESS WHEREOF, the Parties have hereto set their hands by their duly authorized officials as of the date set forth above.
"Seller" "Seller" Koch Pipeline Company, L.P. Koch Fertilizer Storage and Terminal Company By: Koch Pipeline Company, LLC, Its General Partner By: By: ----------------------------------------- ------------------------------------------------- Anthony L. Botterweck Daniel J. Stecklein President President
"Buyer" Kaneb Pipe Line Operating Partnership, L.P. By: Kaneb Pipe Line Company, LLC, Its General Partner By: ----------------------------------------- Name: Jimmy L. Harrison Title: President Signature page to that certain Asset Purchase and Sale Agreement by and among Koch Pipeline Company, L.P. and Koch Fertilizer Storage and Terminal Company (together, "Seller") and Kaneb Pipe Line Operating Partnership, L.P. ("Buyer"). EX-10 4 exh103.txt EXHIBIT 10.3 1ST AMD TO KOCH AGMT Exhibit 10.3 FIRST AMENDMENT TO ASSET PURCHASE AND SALE AGREEMENT THIS FIRST AMENDMENT TO ASSET PURCHASE AND SALE AGREEMENT (this "First Amendment") is entered into this 31st day of October, 2002, by and among: A. Koch Pipeline Company, L.P., a Delaware limited partnership, with its principal place of business at 4111 East 37th Street North, Wichita, Kansas 67220 ("KPL"); B. Koch Fertilizer Storage and Terminal Company, a Nebraska corporation, with its principal place of business at 4111 East 37th Street North, Wichita, Kansas 67220 ("KFS&T") (KLP and KFS&T are hereinafter collectively referred to as "Seller"); and C. Kaneb Pipe Line Operating Partnership, L.P., a Delaware limited partnership, with its principal place of business at 2435 North Central Expressway, Suite 700, Richardson, Texas 75080 ("Buyer"). WHEREAS, Seller and Buyer entered into that certain Asset Purchase and Sale Agreement dated September 17, 2002 (the "Agreement"); and WHEREAS, Seller and Buyer desire to amend the Agreement as provided herein. NOW, THEREFORE, for and in consideration of the foregoing and the mutual covenants and obligations set forth herein, Seller and Buyer do hereby covenant and agree as follows: 1. Defined Terms. Capitalized terms used but not defined herein shall have the meaning given to such terms in the Agreement. 2. Revision to Section 9.01 of the Agreement. The first sentence of Section 9.01 shall be amended to read as follows: "9.01 Time and Place. The closing of the transaction contemplated by this Agreement (the "Closing") shall take place at the offices of Seller in Wichita, Kansas, beginning at 8:00 a.m., central time, on October 31, 2002 The Closing shall be effective as of 12:01 a.m. central time on November 1, 2002, except for the conveyance and transfer of the Net Inventory, which shall be effective as of 8:00 a.m. central time on November 1, 2002 (the "Effective Time")." 3. Amended Exhibits and Schedules to the Agreement. (a) Existing pages 19, 20 and 22 (of 42) of Exhibit B (Real Property) shall be amended to replace them with the revised pages 19 and 20, attached hereto as Attachment A. (b) The existing site diagrams for Crawfordsville, Indiana and Marshalltown, Iowa, attached to Exhibit A (Facilities) and Exhibit J (Bill of Sale), and as also cross referenced in Exhibit M (Additional Excluded Assets), shall be amended to replace them with the revised Site Diagrams attached hereto as Attachment B (Crawfordsville) and Attachment C (Marshalltown). (c) Exhibit A (List of Assets) of Exhibit J (Form of Bill of Sale) is amended to add a new section XI as follows: "XI. Camp Houses. Two camp houses and all fixtures and appurtenances thereto situated near Bodie's Boat Landing on the right descending bank of Little River on the Pollock Lateral located on a parcel of land in Sections 38 and 13, T 7-1 East of Grant Parish, Louisiana referred in: | a certain deed (Bill of Sale) dated April 8, 1976, passed before B.E. Montgomery, Notary Public; and, | a certain Act of Partition in Reg. No. 116647, Bk 334, page 528. Notwithstanding the provisions of Section 4.01(q) of the Agreement, Seller specifically disclaims any warranty of title with respect to the camp house described in the previous sentence and Seller only conveys whatever interest it has in such House." (d) Exhibits A, J and M shall be amended to add the following asset to Exhibit M (Additional Excluded Assets) and to delete it from Exhibit A (List of Assets) and Exhibit J (Form of Bill of Sale): | In Section C (Tractors) of Vehicles and Other Rolling Stock: Unit #11326 1982 Case Model 1190 VIN#11034092 (e) Exhibits A and J shall be amended to add one additional Level A Suit and SCBA unit at the Trilla, Illinois Facility as follows: | In Section Q, (Trilla, Illinois Facility (delivery facility)), it shall be modified to state: "Two (2) Level A Suits and SCBAs". (f) Exhibit B (Real Property) attached to the Agreement shall be amended to add the items stated in Exhibit B-1. (g) Exhibit D (Property Rights) attached to the Agreement shall be amended to add the items stated in Exhibit D-1. (h) Exhibit E (Permits) attached to the Agreement shall be amended to add the items stated in Exhibit E-1. (i) Exhibit O is amended and replaced in its entirety as set forth in the "Revised Exhibit O", attached hereto. (j) Shedule 4.01(m) is amended and replaced in its entirety as set forth in the "Revised Schedule 4.01(m)", attached hereto. (k) Schedules 4.01(o)(i)(A) and 13.01 shall be amended to add the following employee to Schedule 13.01 (Employees) and to delete him from Schedule 4.01(o)(i)(A) (Exceptions to Employees):
------------------------------ ------------------------------- ----------------------- ----------- Name Location Role Hire Date ------------------------------ ------------------------------- ----------------------- ----------- ------------------------------ ------------------------------- ----------------------- ----------- Gary Koegeboehm Hermann Eng. Mgr. 1/14/91 ------------------------------ ------------------------------- ----------------------- -----------
4. Revision to Article X of the Agreement. New Section 10.09 shall be added to the Agreement as follows: "10.09 Seller's Indemnity for Development of Telecon Easement Rights. After the Effective Time, and to the fullest extent permitted by law, but subject to the other provisions of this Article X, and except to the extent of the negligence, gross negligence or wilful misconduct of any of the Buyer Indemnitees, KPL and KFS&T will jointly and severally Indemnify the Buyer Indemnitees from and against any and all Liabilities/Claims arising from or in connection with or relating to (i) the fiber optic rights existing on some or all of the Assets pursuant to the agreements by and between KPL, Sea Breeze Communications Company and PF.Net Corp, now known as Velocita Corp., (ii) any exercise of those rights or (iii) the installation, operation, or maintenance of any fiber optics cables or similar or related assets in connection with such rights (collectively, the "Fiber Optics Issues")." 5.Clarification of Thresholds, Monetary Cap and Survival. It is hereby acknowledged and agreed by the Parties that the new Section 10.09 of the Agreement, as added above, is subject to the Monetary Cap set forth in Section 10.04 of the Agreement and is subject to the two (2) year survival of indemnifications set forth in Section 10.05(b) of the Agreement, but is not subject to the Threshold set forth in Section 10.04. 6. Survey and Granting of Metes and Bounds Easements on Seller and Koch Nitrogen Company Owned Real Property. As soon as practicable after the Closing Date, but in any event within one hundred eighty (180) days after the Closing Date, Buyer may construct, for use in connection with the Facilities and on real property owned by Seller or Koch Nitrogen Company ("KNC"), such control buildings and related facilities as are reasonably necessary in connection with Buyer's operation of the Facilities (the "New Construction"). Seller hereby grants to Buyer, and agrees to cause KNC to grant to Buyer, the right for Buyer and its affiliates and subcontractors and vendors to enter onto Seller's and KNC's real property and to construct such buildings and facilities at such locations as are approved by Seller and Buyer, such approval not to be unreasonably withheld, conditioned or delayed. Within one hundred eighty (180) days following the Closing Date or ninety (90) days after completion of the New Construction, whichever is later, Seller shall, at its cost, cause a survey of the New Construction and the Facilities conveyed to Buyer under the Agreement which are located on real property owned by Seller or KNC and shall grant, or cause KNC to grant, a metes and bounds easement suitable for recording for such Facilities and New Construction substantially in the form of Exhibit O. Buyer will exercise its rights hereunder in such a manner so as to not unreasonably interfere with Seller's or KNC's operations. If and to the extent an easement is granted pursuant to the terms of this Section 6 and another easement currently exists for all or a portion of the said property, the Parties will cause a termination and release of the then existing easement therefor. Buyer agrees that its ingress and egress pursuant to this Section 6 shall be only upon prior notice to Seller (verbal or written), and shall not unreasonably interfere with Seller's or KNC's ongoing operations. Upon obtaining Seller's prior consent (which shall not be unreasonably withheld, conditioned or delayed), Buyer may also use as temporary working space such parts of Seller's and KNC's real property as are reasonably necessary to conduct Buyer's activities in connection with the New Construction, provided such land is not occupied by substantial improvements. Additionally, all of Buyer's ingress and egress to, and any operations on, Seller's and KNC's real property shall be conducted in compliance with all of Seller's and KNC's safety procedures, rules and regulations in effect at the property location from time to time, which shall include site safety training and access restriction procedures as are normally required by Seller or KNC of third party invitees. Provided, however, that Seller will provide, and will cause KNC to provide, Buyer immediate access upon verbal notice when conditions with respect to the New Construction are threatening or causing harm to persons or property or a release of any deleterious or harmful substances into the environment. Buyer further agrees that the New Construction shall be designed, constructed, tested and operated in accordance with applicable safety rules and regulations published by federal and/or state regulatory agencies having jurisdiction. If no such government safety rules apply, then applicable industry standards and practices shall be complied with. Buyer agrees to Indemnify Seller and KNC, their related companies and affiliates, and their officers, directors, employees and agents (collectively referred to hereinafter as "Indemnitees") from and against any and all Liabilities/Claims for damage to property or the environment or injury to or death of Persons to the extent such Liabilities/Claims result from, grow out of, or arise in connection with, the exercise by Buyer of any of the rights granted under this Section 6, except to the extent that such Liabilities/Claims result from Indemnitees' negligence, gross negligence or willful misconduct. Notwithstanding the foregoing, Buyer further agrees to Indemnify Indemnitees from and against any and all Liabilities/Claims relating to personal injuries or death suffered by Buyer or its contractors, or the employees or agents of any of them, during the course of performing activities hereunder, regardless of whether such Liabilities/Claims are caused by or arise out of Indemnitees' negligence as relating to either the physical conditions of the work site or any failure to warn about any such physical conditions, but excluding Claims to the extent caused by any other type of Indemnitees' negligence, gross negligence or willful misconduct. Buyer agrees that, after commencing construction relating to the New Construction or any portion thereof, Buyer will pursue the work diligently to effect prompt completion of the New Construction, and following the construction will restore the surface of the land affected by the New Construction, as nearly as is practicable, to the condition in which it existed prior to construction. 7. Trailer Replacement. A certain non-titled 1993 16' tandem axle trailer (VIN 11YUC1926PT001285), listed on both Exhibit A (Facilities) and Exhibit J (Form of Bill of Sale) was replaced in the ordinary course of business with a 2002 HH, Model HD252, Trailer (VIN # 4J6HD25262B038966), which is a titled vehicle. Therefore, this 1993 trailer is deleted from Exhibits A and J and the replacement 2002 trailer is hereby added to Exhibit A, and title thereto shall be conveyed to Buyer by delivery of the original title thereto pursuant to Section 9.01(a)(v) of the Agreement. 8. Marshalltown, Iowa Building. New Section 3.02(b)(vii) shall be added to the Agreement as follows: "(vii) An amount equal to $60,000.00, which is the mutually agreed upon approximation of one-half (1/2) of the costs that Buyer and Seller expect Buyer will incur for the construction of a new 30' x 64' post frame office/shop building on the Real Property which is conveyed to Buyer under the Agreement at Marshalltown, Iowa. The Parties agree that this downward adjustment to the Purchase price shall be the sole and exclusive consideration due to Buyer for the matters addressed in this Section 3.02(b)(vii)." 9. (a) The term "Closing" is changed to "Effective Time" in the following Sections of the Agreement: 2.01, 3.02(b)(iii), 4.01(x), 7.01, 7.02(a), 7.02(b), 8.08, 9.02(a), 9.02(b), 9.03(a), 10.03(b), 10.03(d), 14.06 and 14.10(a). (b) The term "Closing Date" is changed to "Effective Time" in the following Sections of the Agreement : 9.02(a), 9.02(j), 9.03(a) and 9.03(b). (c) The term "at Closing" in Section 3.01(a) of the Agreement is changed to "on November 1, 2002". 10. Lis Pendens. Seller covenants and agrees that it will use its best efforts to remove, promptly after Closing and to Buyer's reasonable satisfaction, the existing lis pendens with respect to the Trilla Pump Station and the Pana Pump Station as described in item 3 of the Buyer's title defect letter to Seller dated September 24, 2002 (which was sent by Fulbright & Jaworski L.L.P., Buyer's counsel)(collectively, the "Lis Pendens"). Seller shall Indemnify the Buyer Indemnitees from and against any and all Liabilities/Claims arising from or relating to the Lis Pendens or any enforcement thereof or collections with respect thereto. This Indemnity obligation is not subject to the Threshold or the Monetary Cap, and shall survive Closing without limitation as to time or amount. 11. Non-Recorded Property Right at IMC-Agrico, Taft, LA. The Parties acknowledge that there is a non-recorded Property Right in the amount of 812 rods across the property of IMC-Agrico at Taft LA, and have made a downward adjustment to the Purchase Price in the amount of $64,960.00 ($80.00 x 812 rods) pursuant to Section 3.02(b)(v) of the Agreement. Buyer agrees that this downward adjustment to the Purchase Price shall be the sole and exclusive consideration due to Buyer for this matter. However, if, following Closing, Seller provides Buyer with a Property Right suitable for recording with respect thereto, Buyer shall promptly reimburse said amount. 12. Ratification of Agreement. Except as expressly provided herein to the contrary, the terms, covenants, and conditions of the Agreement shall remain in full force and effect without modification or amendment, and the Parties hereto ratify and reaffirm the same in its entirety. 13. Miscellaneous. The foregoing Recitals are incorporated herein by reference and are made a part hereof. The provisions of this First Amendment were negotiated and shall be deemed to have been drafted by the Parties hereto. This First Amendment shall be governed by and construed in accordance with the laws of the State of Kansas, without regard to the conflicts of laws principles. If the terms of the Agreement conflict or are inconsistent with those of this First Amendment, the terms of this First Amendment shall govern. THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK. IN WITNESS WHEREOF, the duly authorized representatives of the parties hereto have executed this First Amendment as of the date first set forth above. "Seller" "Seller"
Koch Pipeline Company, L.P. Koch Fertilizer Storage and Terminal Company By: Koch Pipeline Company, LLC, Its General Partner By: By: ---------------------------- --------------------------------- Pat McCann Jeffrey F. Wilson President Vice President
"Buyer" Kaneb Pipe Line Operating Partnership, L.P. By: Kaneb Pipe Line Company, LLC, Its General Partner By: ---------------------------- Jimmy L. Harrison President Signature page to that certain First Amendment to the Asset Purchase and Sale Agreement by and among Koch Pipeline Company, L.P. and Koch Fertilizer Storage and Terminal Company (together, "Seller") and Kaneb Pipe Line Operating Partnership, L.P. ("Buyer"). EX-10 5 exh104.txt EXHIBIT 10.4 BRIDGE LOAN AGMT Exhibit 10.4 ================================================================================ BRIDGE LOAN AGREEMENT dated as of November 1, 2002 among KANEB PIPE LINE OPERATING PARTNERSHIP, L.P. as Borrower KANEB PIPE LINE PARTNERS, L.P. as KPP THE LENDERS FROM TIME TO TIME PARTY HERETO and SUNTRUST BANK as Administrative Agent ================================================================================ SUNTRUST ROBINSON HUMPHREY, a division of SUNTRUST CAPITAL MARKETS, INC. as Lead Arranger and Book Manager and BANC ONE CAPITAL MARKETS, INC. as Co-Lead Arranger and Co-Book Manager
TABLE OF CONTENTS Page Article I DEFINITIONS; CONSTRUCTION Section 1.1. Definitions..........................................................................................1 Section 1.2. Classifications of Loans............................................................................18 Section 1.3. Accounting Terms and Determination..................................................................18 Section 1.4. Terms Generally.....................................................................................19 Article II AMOUNT AND TERMS OF THE COMMITMENTS Section 2.1. [Intentionally Omitted].............................................................................19 Section 2.2. The Bridge Loan.....................................................................................19 Section 2.3. Fees................................................................................................20 Section 2.4. Funding of the Bridge Loan..........................................................................20 Section 2.5. Interest Elections..................................................................................20 Section 2.6. [Intentionally Omitted].............................................................................21 Section 2.7. Repayment of the Bridge Loan........................................................................21 Section 2.8. Evidence of Indebtedness............................................................................21 Section 2.9. Prepayments.........................................................................................22 Section 2.10. Interest on Loans..................................................................................22 Section 2.11. [Intentionally Omitted]............................................................................23 Section 2.12. Computation of Interest............................................................................23 Section 2.13. Inability to Determine Interest Rates..............................................................23 Section 2.14. Illegality.........................................................................................24 Section 2.15. Increased Costs....................................................................................24 Section 2.16. Funding Indemnity..................................................................................25 Section 2.17. Taxes..............................................................................................25 Section 2.18. Payments Generally; Pro Rata Treatment; Sharing of Set-offs........................................27 Section 2.19. Mitigation of Obligations; Replacement of Lenders..................................................28 Article III CONDITIONS PRECEDENT TO LOANS Section 3.1. Conditions To Effectiveness.........................................................................29 Article IV REPRESENTATIONS AND WARRANTIES Section 4.1. Existence; Power....................................................................................31 Section 4.2. Organizational Power; Authorization; Enforceability.................................................31 Section 4.3. Governmental Approvals; No Conflicts................................................................31 Section 4.4. Financial Statements................................................................................32 Section 4.5. Litigation and Environmental Matters................................................................32 Section 4.6. Compliance with Laws and Agreements.................................................................32 Section 4.7. Investment Company Act, Etc.........................................................................32 Section 4.8. Taxes...............................................................................................33 Section 4.9. Margin Regulations..................................................................................33 Section 4.10. ERISA..............................................................................................33 Section 4.11. Ownership of Property..............................................................................33 Section 4.12. Disclosure.........................................................................................34 Section 4.13. Labor Relations....................................................................................34 Section 4.14. Acquisition Agreement..............................................................................34 Section 4.15. Subsidiaries, Significant Affiliates and Guarantors................................................34 Section 4.16. Liens..............................................................................................34 Article V AFFIRMATIVE COVENANTS Section 5.1. Financial Statements and Other Information..........................................................35 Section 5.2. Notices of Material Events..........................................................................36 Section 5.3. Existence; Conduct of Business......................................................................37 Section 5.4. Compliance with Laws, Etc...........................................................................37 Section 5.5. Payment of Obligations..............................................................................37 Section 5.6. Books and Records...................................................................................37 Section 5.7. Visitation, Inspection, Etc.........................................................................37 Section 5.8. Maintenance of Properties; Insurance................................................................37 Section 5.9. Use of Proceeds.....................................................................................38 Section 5.10. Additional Subsidiaries............................................................................38 Article VI FINANCIAL COVENANTS Section 6.1. Funded Debt to EBITDA...............................................................................38 Section 6.2. Consolidated EBITDA to Consolidated Interest Expense................................................38 Section 6.3. Consolidated Net Worth..............................................................................39 Article VII NEGATIVE COVENANTS Section 7.1. Indebtedness........................................................................................39 Section 7.2. Negative Pledge.....................................................................................39 Section 7.3. Fundamental Changes.................................................................................40 Section 7.4. Investments, Loans, Etc.............................................................................40 Section 7.5. Restricted Payments.................................................................................41 Section 7.6. Sale of Assets......................................................................................41 Section 7.7. Transactions with Affiliates........................................................................42 Section 7.8. Restrictive Agreements..............................................................................42 Section 7.9. Sale and Leaseback Transactions.....................................................................42 Section 7.10. Hedging Agreements.................................................................................42 Section 7.11. Amendment to Material Documents....................................................................43 Section 7.12. Accounting Changes.................................................................................43 Article VIII KPP GUARANTEE Section 8.1. Guarantee...........................................................................................43 Section 8.2. Guaranteed Obligations Not Waived...................................................................44 Section 8.3. Guarantee of Payment................................................................................44 Section 8.4. No Discharge or Diminishment of Guarantee...........................................................44 Section 8.5. Defenses of Borrower Waived.........................................................................44 Section 8.6. Agreement to Pay; Subordination.....................................................................45 Section 8.7. Information.........................................................................................45 Section 8.8. Representations and Warranties......................................................................45 Section 8.9. Termination.........................................................................................46 Article IX EVENTS OF DEFAULT Section 9.1. Events of Default...................................................................................46 Article X THE ADMINISTRATIVE AGENT Section 10.1. Appointment of Administrative Agent................................................................48 Section 10.2. Nature of Duties of Administrative Agent...........................................................49 Section 10.3. Lack of Reliance on the Administrative Agent.......................................................49 Section 10.4. Certain Rights of the Administrative Agent.........................................................50 Section 10.5. Reliance by Administrative Agent...................................................................50 Section 10.6. The Administrative Agent in its Individual Capacity................................................50 Section 10.7. Successor Administrative Agent.....................................................................50 Section 10.8. Authorization to Execute other Loan Documents......................................................51 Article XI MISCELLANEOUS Section 11.1. Notices............................................................................................52 Section 11.2. Waiver; Amendments.................................................................................53 Section 11.3. Expenses; Indemnification..........................................................................54 Section 11.4. Successors and Assigns.............................................................................55 Section 11.5. Governing Law; Jurisdiction; Consent to Service of Process.........................................57 Section 11.6. WAIVER OF JURY TRIAL...............................................................................58 Section 11.7. Right of Setoff....................................................................................58 Section 11.8. Counterparts; Integration..........................................................................59 Section 11.9. Survival...........................................................................................59 Section 11.10. Severability......................................................................................59 Section 11.11. Confidentiality...................................................................................59 Section 11.12. Interest Rate Limitation..........................................................................60
Schedules Schedule I - Applicable Margin Schedule II - Existing Indebtedness Schedule 4.5 - Environmental Matters Schedule 4.15 - Subsidiaries Schedule 7.2 - Existing Liens Exhibits Exhibit A - Form of Note Exhibit B - Form of Assignment and Acceptance Exhibit C - Form of Subsidiary Guarantee Agreement Exhibit E - Form of Continuation/Conversion Exhibit F - Form of Opinion BRIDGE LOAN AGREEMENT THIS BRIDGE LOAN AGREEMENT (this Agreement") is made and entered into as of November 1, 2002, by and among KANEB PIPE LINE OPERATING PARTNERSHIP, L.P., a Delaware limited partnership (the "Borrower"), KANEB PIPE LINE PARTNERS, L.P., a Delaware limited partnership ("KPP"), the banks and other financial institutions from time to time party hereto (the "Lenders") and SUNTRUST BANK, in its capacity as Administrative Agent for the Lenders (the "Administrative Agent"). W I T N E S S E T H: WHEREAS, the Borrower has requested that the Lenders make to it an unsecured bridge term loan in the initial principal amount of $150,000,000; and WHEREAS, subject to the terms and conditions of this Agreement (including, without limitation, the guaranty and other agreements of KPP set forth herein), the Lenders to the extent of their respective Commitments as defined herein, are willing severally to make such bridge term loan. NOW, THEREFORE, in consideration of the premises and the mutual covenants herein contained, the Borrower, KPP, the Lenders and the Administrative Agent agree as follows: Article I DEFINITIONS; CONSTRUCTION Section 1.1. Definitions. In addition to the other terms defined herein, the following terms used herein shall have the meanings herein specified (to be equally applicable to both the singular and plural forms of the terms defined): "Acquisition" shall mean the acquisition of the Sellers' ammonia pipeline. "Acquisition Agreement" shall mean the Asset Purchase and Sale Agreement dated as of September 17, 2002, between the Borrower and the Sellers. "Acquisition Documents" shall mean, collectively, the Acquisition Agreement and all other documents, instruments, agreements, notes, guarantees, opinions, and certificates executed in connection therewith. "Additional Debt" shall mean Indebtedness issued or incurred by KPP, Borrower or any Significant Affiliate after the date hereof, other than Indebtedness under this Agreement or under the Revolving Credit Agreement. "Adjusted LIBO Rate" shall mean, with respect to each Interest Period for a Eurodollar Loan, the rate per annum obtained by dividing (i) LIBOR for such Interest Period by (ii) a percentage equal to 1.00 minus the Eurodollar Reserve Percentage. "Administrative Agent" shall have the meaning set forth in the opening paragraph hereof. "Administrative Questionnaire" shall mean, with respect to each Lender, an administrative questionnaire in the form prepared by the Administrative Agent and submitted to the Administrative Agent duly completed by such Lender. "Affiliate" shall mean, as to any Person, any other Person that directly, or indirectly through one or more intermediaries, Controls, is Controlled by, or is under common Control with, such Person. "Aggregate Commitments" shall mean, collectively, all Commitments of all Lenders hereunder which is $150,000,000. "Applicable Lending Office" shall mean, for each Lender and for each Type of Loan, the "Lending Office" of such Lender (or an Affiliate of such Lender) designated for such Type of Loan in the Administrative Questionnaire submitted by such Lender or such other office of such Lender (or an Affiliate of such Lender) as such Lender may from time to time specify to the Administrative Agent and the Borrower as the office by which its Loans of such Type are to be made and maintained. "Applicable Margin" shall mean a percentage per annum determined by reference to the Reference Ratings then in effect as set forth on Schedule I plus the Ticking Margin; provided, that any change in the Applicable Margin resulting from a change in any Reference Rating shall be effective on the day on which the applicable rating agency changes its rating and shall continue until the day prior to the day that a further change becomes effective. The Applicable Margin shall initially be set at Level I. "Asset Disposition" shall mean, with respect to KPP or any Significant Affiliate, any sale, transfer, conveyance, lease or other disposition (including by way of merger, consolidation or sale-leaseback) by KPP or such Significant Affiliate to any other Person (other than by any Person to KPP or a Guarantor or by a Significant Affiliate to any other Significant Affiliate) of any assets of KPP or such Significant Affiliate (including, without limitation, any Equity Interests owned by KPP or such Significant Affiliate). The term "Asset Disposition" shall not include (i) dispositions of inventory in the ordinary course of business, (ii) dispositions of other assets in the ordinary course of business having a Diluted Value of not more than $15,000,000 in the aggregate during the Term of this Agreement, (iii) the grant of a Lien by KPP or any Significant Affiliate in any assets securing a borrowing by, or contractual performance obligation of, KPP or such Significant Affiliate otherwise permitted under this Agreement, and (iv) dispositions of Equity Interests in connection with directors' qualifying shares or comparable Equity Interests. "Assignment and Acceptance" shall mean an assignment and acceptance entered into by a Lender and an assignee (with the consent of any party the consent of which is required by Section 11.4(b)) and accepted by the Administrative Agent, in the form of Exhibit B attached hereto or any other form approved by the Administrative Agent. "Base Rate" shall mean the higher of (i) the per annum rate which the Administrative Agent publicly announces from time to time to be its prime lending rate, as in effect from time to time, and (ii) the Federal Funds Rate as in effect from time to time plus one-half of one percent (0.50%). The Administrative Agent's prime lending rate is a reference rate and does not necessarily represent the lowest or best rate charged to customers. The Administrative Agent may make commercial loans or other loans at rates of interest at, above or below the Administrative Agent's prime lending rate. Each change in the Administrative Agent's prime lending rate shall be effective from and including the date such change is publicly announced as being effective. "Borrower" shall have the meaning in the introductory paragraph hereof. "Bridge Loan," "Loan," or "Loans" shall have the meanings set forth in Section 2.2 hereof. "Business Day" shall mean (i) any day other than a Saturday, Sunday or other day on which commercial banks in Atlanta, Georgia and New York, New York are authorized or required by law to close and (ii) if such day relates to a Loan of, a payment or prepayment of principal or interest on, a conversion of or into, or an Interest Period for, a Eurodollar Loan or a notice with respect to any of the foregoing, any day on which dealings in Dollars are carried on in the London interbank market. "Capital Lease Obligations" of any Person shall mean all obligations of such Person to pay rent or other amounts under any lease (or other arrangement conveying the right to use) real or personal property, or a combination thereof, which obligations are required to be classified and accounted for as capital leases on a balance sheet of such Person under GAAP, and the amount of such obligations shall be the capitalized amount thereof determined in accordance with GAAP. "Change in Control" shall mean the occurrence of one or more of the following events: (i) any sale, lease, exchange or other transfer (in a single transaction or a series of related transactions) of all or substantially all of the assets of KPP or the General Partner to any other Person or "group" (within the meaning of the Securities Exchange Act of 1934 and the rules of the Securities and Exchange Commission thereunder in effect on the date hereof), (ii) the acquisition of ownership, directly or indirectly, beneficially or of record, by any Person or "group" (within the meaning of the Securities Exchange Act of 1934 and the rules of the Securities and Exchange Commission thereunder as in effect on the date hereof) (other than, in the case of the General Partner, by the Investor Group) of sufficient Equity Interests in KPP or the General Partner to Control KPP or the General Partner, as the case may be; or (iii) occupation of a majority of the seats (other than vacant seats) on the board of directors of the General Partner by Persons who were neither (A) nominated by the current board of directors or (B) appointed by directors so nominated. "Change in Law" shall mean (i) the adoption of any applicable law, rule or regulation after the date of this Agreement, (ii) any change in any applicable law, rule or regulation, or any change in the interpretation or application thereof, by any Governmental Authority after the date of this Agreement, or (iii) compliance by any Lender (or its Applicable Lending Office) by such Lender's holding company, if applicable) with any request, guideline or directive (whether or not having the force of law) of any Governmental Authority made or issued after the date of this Agreement. "Charges" shall have the meaning set forth in Section 11.12. "Closing Date" shall mean the date on which the conditions precedent set forth in Section 3.1 have been satisfied or waived in accordance with Section 11.2. "Code" shall mean the Internal Revenue Code of 1986, as amended and in effect from time to time. "Commitment" shall mean, with respect to each Lender, the obligation of such Lender to make a Loan to the Borrower on the Closing Date in a principal amount not exceeding the amount set forth with respect to such Lender on the signature pages to this Agreement. "Consolidated EBITDA" shall mean, for KPP and its Subsidiaries for any period, an amount equal to the sum of (i) Consolidated Net Income for such period plus (ii) to the extent deducted in determining Consolidated Net Income for such period, (A) Consolidated Interest Expense, (B) income tax expense, (C) depreciation and amortization and (D) all other non-cash charges, determined on a consolidated basis in accordance with GAAP in each case for such period. "Consolidated Funded Debt" shall mean Funded Debt of KPP and its consolidated Subsidiaries, other than Permitted Non-Recourse Debt. "Consolidated Interest Expense" shall mean, for KPP and its Subsidiaries for any period determined on a consolidated basis in accordance with GAAP, the sum of (i) total cash interest expense, (other than in respect of Permitted Non-Recourse Debt) including without limitation the interest component of any payments in respect of Capital Lease Obligations capitalized or expensed during such period (whether or not actually paid during such period) plus (ii) the net amount payable (or minus the net amount receivable) under Hedging Agreements during such period (whether or not actually paid or received during such period). "Consolidated Net Income" shall mean, for any period, the sum of (i) the net income (or loss) of KPP and its Subsidiaries for such period determined on a consolidated basis in accordance with GAAP, but (A) excluding therefrom (to the extent otherwise included therein) (1) any extraordinary gains or losses, (2) any gains attributable to write-ups of assets, (3) any equity interest of KPP or any Subsidiary of KPP in the unremitted earnings of any Person that is not a Subsidiary other than ST Linden, L.L.C., (4) any income of any Person other than KPP or the Borrower for such period if (x) such Person has any Permitted Non-Recourse Indebtedness outstanding owing to any Person other than KPP or a wholly-owned subsidiary of KPP and (y) such income is not received in cash by KPP or the Borrower, as the case may be, during such period, and (B) including therein (to the extent not otherwise included therein) any income (or loss) of any Person or attributable to any assets if such income accrued prior to the date that (x) such Person became a Subsidiary or was merged into or consolidated with KPP or any Subsidiary of KPP or (y) such assets were acquired by KPP or any Subsidiary, as the case may be, plus (ii) the net income (or loss) of the General Partner in such period attributable to the General Partner's interest in the Borrower, determined in accordance with GAAP, and (5) any gains or losses attributable to the termination of Hedging Agreements or the retirement of Indebtedness. "Consolidated Net Worth" means as at any date the sum of (x) total partners' capital of KPP and its consolidated Subsidiaries as at such date, excluding the effects of any write-ups after December 31, 1999 of assets owned by KPP and its consolidated subsidiaries as of the date of this Agreement plus (y) minority interests of the General Partner in the Borrower, in each case determined in accordance with GAAP. "Constituent Documents" shall mean, for any Person, the documents for its formation and organization, which, for example, (i) for a corporation are its corporate charter and bylaws, (ii) for a partnership is its partnership agreement, (iii) for a limited liability company are its certificate of organization and regulations, and (iv) for a trust is the trust agreement or indenture under which it is created. "Control" shall mean the power, directly or indirectly, either to (i) vote 15% or more of securities having ordinary voting power for the election of directors (or persons performing similar functions) of a Person or (ii) direct or cause the direction of the management and policies of a Person, whether through the ability to exercise voting power, by contract or otherwise. The terms "Controlled by" and "under common Control with" have meanings correlative thereto. "Credit Exposure" shall mean with respect to any Lender at any time the outstanding principal amount of its Loan to Borrower. "Credit Rating" of any Person shall mean any rating published by S&P or Moody's for such Person's senior, unsecured long-term debt securities without third-party credit enhancement, whether or not any such debt securities are actually outstanding, and any rating assigned to any other debt security of such Person shall be disregarded. "Default" shall mean any condition or event that, with the giving of notice or the lapse of time or both, would constitute an Event of Default. "Default Interest" shall have the meaning set forth in Section 2.10(b). "Diluted Value" shall mean, with respect to any assets of KPP, the Fair Market Value of such assets, and, with respect to any assets of any other Person, the Fair Market Value of such assets multiplied by the percentage of the Equity Interests held directly or indirectly by KPP in such Person. "Disbursement" shall mean the disbursement by each Lender of the amount of its Commitment for the Bridge Loan on the Closing Date. "Distribution" shall mean, with respect to any Equity Interests issued by a Person (i) the retirement, redemption, purchase or other acquisition for value of those Equity Interests, (ii) the declaration or payment of any dividend or distribution on or with respect to those Equity Interests, (iii) any Investment by that Person in the holder of any of those Equity Interests, and (iv) any other payment by that Person with respect to those Equity Interests. "Dollar(s)" and the sign "$" shall mean lawful money of the United States of America. "Environmental Liability" shall mean any liability, contingent or otherwise (including any liability for damages, costs of environmental investigation and remediation, costs of administrative oversight, fines, natural resource damages, penalties or indemnities), of KPP or any Subsidiary directly or indirectly resulting from or based upon (i) any actual or alleged violation of any Environmental Law, (ii) the generation, use, handling, transportation, storage, treatment or disposal of any Hazardous Materials, (iii) any actual or alleged exposure to any Hazardous Materials, (iv) the Release or threatened Release of any Hazardous Materials or (v) any contract, agreement or other consensual arrangement pursuant to which liability is assumed or imposed with respect to any of the foregoing. "Equity Event" shall mean (i) the contribution in cash of capital to KPP or any Subsidiary of KPP by any Person other than KPP or a Wholly-Owned Subsidiary of KPP or any Subsidiary of KPP, or (ii) any issuance of Equity Interests by KPP or any Subsidiary of KPP to any Person other than KPP or any Subsidiary of KPP or a Wholly-Owned Subsidiary of KPP. "Equity Interests" shall mean, (i) with respect to a corporation, shares of capital stock of such corporation or any other interest convertible or exchangeable into any such interest, (ii) with respect to a limited liability company, a membership interest in such company, (iii) with respect to a partnership, a partnership interest in such partnership, and (iv) with respect to any other Person, an interest in such Person analogous to interests described in clauses (i) through (iii). "ERISA" shall mean the Employee Retirement Income Security Act of 1974, as amended from time to time, and any successor statute. "ERISA Affiliate" shall mean any trade or business (whether or not incorporated), which, together with KPP, is treated as a single employer under Section 414(b) or (c) of the Code or, solely for the purposes of Section 302 of ERISA and Section 412 of the Code, is treated as a single employer under Section 414 of the Code. "ERISA Event" shall mean (i) any "reportable event", as defined in Section 4043 of ERISA or the regulations issued thereunder with respect to a Plan (other than an event for which the 30-day notice period is waived); (ii) the existence with respect to any Plan of an "accumulated funding deficiency" (as defined in Section 412 of the Code or Section 302 of ERISA), whether or not waived; (iii) the filing pursuant to Section 412(d) of the Code or Section 303(d) of ERISA of an application for a waiver of the minimum funding standard with respect to any Plan; (iv) the incurrence by KPP or any of its ERISA Affiliates of any liability under Title IV of ERISA with respect to the termination of any Plan; (v) the receipt by KPP or any ERISA Affiliate from the PBGC or a plan administrator appointed by the PBGC of any notice relating to an intention to terminate any Plan or Plans or to appoint a trustee to administer any Plan; (vi) the incurrence by KPP or any of its ERISA Affiliates of any liability with respect to the withdrawal or partial withdrawal from any Plan or Multiemployer Plan; or (vii) the receipt by KPP or any ERISA Affiliate of any notice, or the receipt by any Multiemployer Plan from KPP or any ERISA Affiliate of any notice, concerning the imposition of Withdrawal Liability or a determination that a Multiemployer Plan is, or is expected to be, insolvent or in reorganization, within the meaning of Title IV of ERISA. "Eurodollar" when used in reference to any Loan refers to the fact that such Loan bears interest at a rate determined by reference to the Adjusted LIBO Rate. "Eurodollar Reserve Percentage" shall mean the aggregate of the maximum reserve percentages (including, without limitation, any emergency, supplemental, special or other marginal reserves) expressed as a decimal (rounded upwards to the next 1/100th of 1%) in effect on any day to which the Administrative Agent is subject with respect to the Adjusted LIBO Rate pursuant to regulations issued by the Board of Governors of the Federal Reserve System (or any Governmental Authority succeeding to any of its principal functions) with respect to eurocurrency funding (currently referred to as "eurocurrency liabilities" under Regulation D). Eurodollar Loans shall be deemed to constitute eurocurrency funding and to be subject to such reserve requirements without benefit of or credit for proration, exemptions or offsets that may be available from time to time to any Lender under Regulation D. The Eurodollar Reserve Percentage shall be adjusted automatically on and as of the effective date of any change in any reserve percentage. "Event of Default" shall have the meaning set forth in Article IX. "Excluded Affiliate" shall mean, for any Person (the "first Person"), any other Person (the "second Person") in which the first Person owns Equity Interests and where the second Person (i) has no Indebtedness other than Permitted Non-Recourse Debt and (ii) the sole purpose of which is to engage in the acquisition, construction, development and/or operation activities financed or refinanced with such Permitted Non-Recourse Debt. "Excluded Subsidiary" shall mean any Subsidiary of KPP that is an Excluded Affiliate. "Excluded Taxes" shall mean with respect to the Administrative Agent, any Lender or any other recipient of any payment to be made by or on account of any obligation of the Borrower hereunder, (i) income or franchise taxes imposed on (or measured by) its net income by the United States of America, or by the jurisdiction under the laws of which such recipient is organized or in which its principal office is located or, in the case of any Lender, in which its applicable lending office is located, (ii) any branch profits taxes imposed by the United States of America or any similar tax imposed by any other jurisdiction in which any Lender is located and (iii) in the case of a Foreign Lender, any withholding tax that (A) is imposed on amounts payable to such Foreign Lender at the time such Foreign Lender becomes a party to this Agreement, (B) is imposed on amounts payable to such Foreign Lender at any time that such Foreign Lender designates a new lending office, other than taxes that have accrued prior to the designation of such lending office that are otherwise not Excluded Taxes, and (C) is attributable to such Foreign Lender's failure to comply with Section 2.17(e). "Existing Indebtedness" shall mean the Indebtedness described on Schedule II of this Agreement. "Fair Market Value" shall mean, with respect to any Equity Interest or other property or asset, the price obtainable for such Equity Interest or other property or asset in an arm's-length sale between an informed and willing purchaser under no compulsion to purchase and an informed and willing seller under no compulsion to sell. "Federal Funds Rate" shall mean, for any day, the rate per annum (rounded upwards, if necessary, to the next 1/100th of 1%) equal to the weighted average of the rates on overnight Federal funds transactions with member banks of the Federal Reserve System arranged by Federal funds brokers, as published by the Federal Reserve Bank of New York on the next succeeding Business Day or if such rate is not so published for any Business Day, the Federal Funds Rate for such day shall be the average rounded upwards, if necessary, to the next 1/100th of 1% of the quotations for such day on such transactions received by the Administrative Agent from three Federal funds brokers of recognized standing selected by the Administrative Agent. "Foreign Lender" shall mean any Lender that is not a United States person under Section 7701(a)(3) of the Code. "Foreign Subsidiary" shall mean any Subsidiary of KPP that is not organized under the law of the United States of America or any state or territory thereof. "Funded Debt" of any Person shall mean (i) all Indebtedness of such Person of the types described in clauses (i) though (v) of the definition of "Indebtedness", (ii) all Guarantees of such Person of the types of Indebtedness described in clause (i) above and (iii) all obligations that are secured (or for which the holder of any such obligation has an existing right, contingent or otherwise, to be so secured) by any Lien on property owned or acquired by such Person, in an amount limited to the lesser of (x) the unpaid amount of all of such obligations from time to time outstanding and (y) the Fair Market Value of the property securing all of such obligations, liabilities secured (or for which the holder of such obligations has an existing right, contingent or otherwise, to be so secured) by any Lien existing on property owned or acquired by such Person. "GAAP" shall mean generally accepted accounting principles in the United States applied on a consistent basis and subject to the terms of Section 1.3. "General Partner" shall mean Kaneb Pipe Line Company LLC, a Delaware limited liability company. "Governmental Authority" shall mean the government of the United States of America, any other nation or any political subdivision thereof, whether state or local, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government. "Granting Lender" shall have the meaning set forth in Section 11.4(e). "Guarantee" of or by any Person (the "guarantor") shall mean any obligation, contingent or otherwise, of the guarantor guaranteeing or having the economic effect of guaranteeing any Indebtedness of any other Person (the "primary obligor") in any manner, whether directly or indirectly, and including any obligation, direct or indirect, of the guarantor (i) to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness or other obligation or to purchase (or to advance or supply funds for the purchase of) any security for the payment thereof, (ii) to purchase or lease property, securities or services for the purpose of assuring the owner of such Indebtedness or other obligation of the payment thereof, (iii) to maintain working capital, equity capital or any other financial statement condition or liquidity of the primary obligor so as to enable the primary obligor to pay such Indebtedness or other obligation or (iv) as an account party in respect of any letter of credit or letter of guaranty issued in support of such Indebtedness or obligation; provided, that the term "Guarantee" shall not include endorsements for collection or deposits in the ordinary course of business. The amount of any Guarantee shall be deemed to be an amount equal to the stated or determinable amount of the primary obligation in respect of which Guarantee is made or, if not so stated or determinable, the maximum reasonably anticipated liability in respect thereof (assuming such Person is required to perform thereunder) as determined by such Person in good faith. The term "Guarantee" used as a verb has a corresponding meaning. "Guaranteed Obligations" shall have the meaning set forth in Section 8.01. "Guarantor" shall mean KPP and each party to the Subsidiary Guarantee Agreement. "Hazardous Materials" means all explosive or radioactive substances or wastes and all hazardous or toxic substances, wastes or other pollutants, including petroleum or petroleum distillates, asbestos or asbestos containing materials, polychlorinated biphenyls, radon gas, infectious or medical wastes and all other substances or wastes of any nature regulated pursuant to any Environmental Law. "Hedging Agreements" shall mean interest rate swap, cap or collar agreements, interest rate future or option contracts, currency swap agreements, currency future or option contracts, commodity agreements and other similar agreements or arrangements designed to protect against fluctuations in interest rates, currency values or commodity values, in each case to which KPP or any Subsidiary of KPP is a party. "Indebtedness" of any Person shall mean, without duplication (i) all obligations of such Person for borrowed money, (ii) all obligations of such Person evidenced by bonds, debentures, notes or other similar instruments, (iii) all obligations of such Person in respect of the deferred purchase price of property or services (other than trade payables incurred in the ordinary course of business; provided, that for purposes of Section 9.1(f), trade payables overdue by more than 120 days shall be included in this definition except to the extent that any of such trade payables are being disputed in good faith and by appropriate measures), (iv) all obligations of such Person under any conditional sale or other title retention agreement(s) relating to property acquired by such Person, (v) all Capital Lease Obligations of such Person and all obligations in respect of the unpaid principal amount or component of all obligations under synthetic leases, (vi) all obligations, contingent or otherwise, of such Person in respect of letters of credit, acceptances or similar extensions of credit, (vii) all Guarantees of such Person of the type of Indebtedness described in clauses (i) through (vi) above, (viii) all Indebtedness of a third party secured by any Lien on property owned by such Person, whether or not such Indebtedness has been assumed by such Person, (ix) all obligations of such Person, contingent or otherwise, to purchase, redeem, retire or otherwise acquire for value any common stock of such Person, and (x) Off-Balance Sheet Liabilities. The Indebtedness of any Person shall include the Indebtedness of any partnership or joint venture in which such Person is a general partner or a joint venturer, except to the extent that the terms of such Indebtedness provide that such Person is not liable therefor. "Indemnified Taxes" shall mean Taxes other than Excluded Taxes. "Indemnitee" shall have the meaning set forth in Section 11.3(b). "Interest Coverage Ratio" shall mean for any period of four consecutive fiscal quarters of KPP, the ratio of (i) Consolidated EBITDA for such period to (ii) Consolidated Interest Expense for such period. "Interest Period" shall mean with respect to any Eurodollar Loan, a period of one, two, or three months; provided, that: (i) the initial Interest Period for such Loan shall commence on the date of such Loan or the date of any conversion from a Loan of another Type, and each Interest Period occurring thereafter in respect of such Loan shall commence on the day on which the next preceding Interest Period expires; (ii) if any Interest Period would otherwise end on a day other than a Business Day, such Interest Period shall be extended to the next succeeding Business Day, unless such Business Day falls in another calendar month, in which case such Interest Period would end on the next preceding Business Day; (iii)any Interest Period that begins on the last Business Day of a calendar month or on a day for which there is no numerically corresponding day in the calendar month at the end of such Interest Period shall end on the last Business Day of such calendar month; (iv) no Interest Period may extend beyond the Maturity Date. "Investment" shall mean, in respect of any Person, any loan, advance, extension of credit or capital contribution to that Person, any other investment in that Person, or any purchase or commitment to purchase any Equity Interest or Indebtedness issued by that Person or substantially all of the assets or a division or other business unit of that Person. "Investor Group" shall mean Kaneb Services, LLC and its Subsidiaries. "Lenders" shall have the meaning assigned to such term in the opening paragraph of this Agreement. "LIBOR" shall mean, for any applicable Interest Period with respect to any Eurodollar Loan, the rate per annum for deposits in Dollars for a period equal to such Interest Period appearing on the display designated as Page 3750 on the Dow Jones Markets Service (or such other page on that service or such other service designated by the British Banker's Association for the display of such Association's Interest Settlement Rates for Dollar deposits) as of 11:00 a.m. (London, England time) on the day that is two Business Days prior to the first day of the Interest Period or if such Page 3750 is unavailable for any reason at such time, the rate which appears on the Reuters Screen ISDA Page as of such date and such time; provided, that if the Administrative Agent determines that the relevant foregoing sources are unavailable for the relevant Interest Period, LIBOR shall mean the rate of interest determined by the Administrative Agent to be the average (rounded upward, if necessary, to the nearest 1/100th of 1%) of the rates per annum at which deposits in Dollars are offered to the Administrative Agent two Business Days preceding the first day of such Interest Period by leading banks in the London interbank market as of 10:00 a.m. for delivery on the first day of such Interest Period, for the number of days comprised therein and in an amount comparable to the amount of the Eurodollar Loan of the Administrative Agent. "Lien" shall mean any mortgage, pledge, security interest, financing statement, lien (statutory or otherwise), charge, encumbrance, hypothecation, assignment, deposit arrangement, or other arrangement having the practical effect of the foregoing or any preference, priority or other security agreement or preferential arrangement of any kind or nature whatsoever (including any conditional sale or other title retention agreement and any capital lease having the same economic effect as any of the foregoing). "Loan" or "Loans" shall mean, individually and collectively, the term loans, or portions thereof, made by the Lenders to the Borrower under the Commitments, which may either be Base Rate Loans or Eurodollar Loans, or a combination thereof, and all of which, collectively, in the aggregate shall constitute the Bridge Loan. "Loan Documents" shall mean, collectively, this Agreement, the Notes (if any), the Subsidiary Guarantee Agreement, the funds disbursement instructions for the Bridge Loan and all Notices of Conversion/Continuation. "Loan Parties" shall mean the General Partner, the Borrower and the Guarantors. "Material Adverse Effect" shall mean, with respect to any event, act, condition or occurrence of whatever nature (including any adverse determination in any litigation, arbitration, or governmental investigation or proceeding), whether singularly or in conjunction with any other event or events, act or acts, condition or conditions, occurrence or occurrences whether or not related, a material adverse change in, or a material adverse effect on, (i) the business, results of operations, financial condition, assets, liabilities or prospects of the Borrower or of KPP and its Subsidiaries taken as a whole, (ii) the ability of any Loan Party to perform any of its obligations under the Loan Documents, (iii) the rights and remedies of the Administrative Agent and the Lenders under any of the Loan Documents or (iv) the legality, validity or enforceability of any of the Loan Documents. "Material Indebtedness" shall mean Indebtedness (other than the Loans) or obligations in respect of one or more Hedging Agreements of any one or more of KPP and its Subsidiaries in an aggregate principal amount exceeding $5,000,000, including without limitation Indebtedness incurred under the Revolving Credit Agreement. For purposes of determining Material Indebtedness, the "principal amount" of the obligations of KPP or any Subsidiary of KPP in respect to any Hedging Agreement at any time shall be the maximum aggregate amount (giving effect to any netting agreements) that KPP or such Subsidiary would be required to pay if such Hedging Agreement were terminated at such time. "Maturity Date" shall mean the earliest of (i) the date six months from the date of this Agreement, and (ii) the date on which all amounts outstanding under this Agreement have been declared or have automatically become due and payable (whether by acceleration or otherwise). "Maximum Rate" shall have the meaning set forth in Section 11.12. "Moody's" shall mean Moody's Investors Service, Inc. "Multiemployer Plan" shall have the meaning set forth in Section 4001(a)(3) of ERISA. "Net Cash Proceeds" shall mean, with respect to any Asset Disposition, Recovery Event, Additional Debt or Equity Event (each, for purposes of this definition, a "transaction"), the aggregate amount of cash received, as the case may be, by (x) KPP or the Borrower or (y) any Significant Affiliate and legally available to be distributed to KPP or the Borrower in the form of dividends or distributions in connection with such transaction after, in each case, deducting therefrom (i) payments made in respect of any Indebtedness to the extent that such payments are required to be made (other than under the Loan Documents) as a result of or in connection with such transaction by applicable law or the terms of any contractual agreement relating to such Indebtedness, (ii) reasonable and customary transaction costs (which in the case of any Recovery Event may include litigation costs and expenses and other costs and expenses of collecting payments and settlements therefrom) that are paid or reserved for payment (A) to a Person that is not an Affiliate of KPP or (B) to KPP or an Affiliate of KPP to reimburse such Person for payments made by such Person to another Person that is not KPP or an Affiliate of KPP in respect of such transaction costs, (iii) the amount of taxes paid or reserved for payment by KPP or such Significant Affiliate in connection with or as a result of such transaction and (iv) any Reinvestment Amount. "Non-Recourse" shall mean, with respect to any Person as applied to any Indebtedness (i) that such Person is not directly or indirectly liable to make any payments with respect to such Indebtedness, (ii) that such Indebtedness (or portion thereof) does not constitute Indebtedness of such Person other than to the extent of recourse to such Person's Equity Interests in the Person primarily incurring such Debt (or any shareholder, partner, member or participant of such Person) and that (iii) such Indebtedness (or portion thereof) is not secured by a Lien on any asset of such Person other than such Person's Equity Interests in the Person primarily incurring such Indebtedness or any shareholder, partner, member, participant or other owner, directly or indirectly, of such Person or the Person the obligations of which were guaranteed. "Note" shall mean a promissory note of the Borrower payable to the order of a requesting Lender in the principal amount of such Lender's Commitment, in substantially the form of Exhibit A. "Notice of Conversion/Continuation" shall mean the notice given by the Borrower to the Administrative Agent in respect of the conversion or continuation of an outstanding Loan as provided in Section 2.5(b) hereof. "Obligations" shall mean all amounts owing by the Borrower to the Administrative Agent or any Lender pursuant to or in connection with this Agreement or any other Loan Document, including without limitation, all principal, interest (including any interest accruing after the filing of any petition in bankruptcy or the commencement of any insolvency, reorganization or like proceeding relating to the Borrower, whether or not a claim for post-filing or post-petition interest is allowed in such proceeding), all reimbursement obligations, fees, expenses, indemnification and reimbursement payments, costs and expenses (including all fees and expenses of counsel to the Administrative Agent and any Lender incurred pursuant to this Agreement or any other Loan Document), whether direct or indirect, absolute or contingent, liquidated or unliquidated, now existing or hereafter arising hereunder or thereunder, and all obligations arising under Hedging Agreements relating to the foregoing to the extent permitted hereunder, and all obligations and liabilities incurred in connection with collecting and enforcing the foregoing, together with all renewals, extensions, modifications or refinancings thereof. "Off-Balance Sheet Liabilities" of any Person shall mean (i) any repurchase obligation or liability of such Person with respect to accounts or notes receivable sold by such Person, (ii) any liability of such Person under any sale and leaseback transactions that do not create a liability on the balance sheet of such Person, or (iii) any obligation arising with respect to any other transaction which is the functional equivalent of or takes the place of borrowing but that does not constitute a liability on the balance sheet of such Person. "Other Taxes" shall mean any and all present or future stamp or documentary taxes or any other excise or property taxes, charges or similar levies arising from any payment made hereunder or from the execution, delivery or enforcement of, or otherwise with respect to, this Agreement or any other Loan Document. "Participant" shall have the meaning set forth in Section 11.4(c). "Payment Office" shall mean the office of the Administrative Agent located at 303 Peachtree Street, Atlanta, Georgia 30308, or such other location as to which the Administrative Agent shall have given written notice to the Borrower and the other Lenders. "PBGC" shall mean the Pension Benefit Guaranty Corporation referred to and defined in ERISA, and any successor entity performing similar functions. "Permitted Encumbrances" shall mean (i) Liens imposed by law for taxes not yet due or which are being contested in good faith by appropriate proceedings and with respect to which adequate reserves are being maintained in accordance with GAAP; (ii) statutory Liens of landlords and Liens of carriers, warehousemen, mechanics, materialmen and other Liens imposed by law created in the ordinary course of business for amounts not yet due or which are being contested in good faith by appropriate proceedings and with respect to which adequate reserves are being maintained in accordance with GAAP; (iii)pledges and deposits made in the ordinary course of business in compliance with workers' compensation, unemployment insurance and other social security laws or regulations; (iv) deposits to secure the performance of bids, trade contracts, leases, statutory obligations, surety and appeal bonds, performance bonds and other obligations of a like nature, in each case in the ordinary course of business; (v) easements, zoning restrictions, rights-of-way and similar encumbrances on real property imposed by law or arising in the ordinary course of business that do not secure any monetary obligations and do not materially detract from the value of the affected property or materially interfere with the ordinary conduct of business of the Borrower and its Subsidiaries taken as a whole; and (vi) Liens granted in favor of the Administrative Agent for the benefit of the Lenders. "Permitted Investments" shall mean: (i) direct obligations of, or obligations the principal of and interest on which are unconditionally guaranteed by, the United States (or by any agency thereof to the extent such obligations are backed by the full faith and credit of the United States), in each case maturing within one year from the date of acquisition thereof; (ii) commercial paper having the highest rating, at the time of acquisition thereof, of S&P or Moody's and in either case maturing within six months from the date of acquisition thereof; (iii)certificates of deposit, bankers' acceptances and time deposits maturing within 180 days of the date of acquisition thereof issued or guaranteed by or placed with, and money market deposit accounts issued or offered by, any domestic office of any commercial bank organized under the laws of the United States or any state thereof which has a combined capital and surplus and undivided profits of not less than $500,000,000; (iv) fully collateralized repurchase agreements with a term of not more than 30 days for securities described in clause (i) above and entered into with a financial institution satisfying the criteria described in clause (iii) above; and (v) mutual funds investing solely in any one or more of the Permitted Investments described in clauses (i) through (iv) above. "Permitted Non-Recourse Debt" shall mean Indebtedness of any Person (other than any Loan Party) that is Non-Recourse to any Loan Party and is used by such Person to acquire, construct, develop and/or operate assets not owned by KPP or any Significant Affiliate as of the date hereof or to refinance Permitted Non-Recourse Debt. "Person" shall mean any individual, partnership, firm, corporation, association, joint venture, limited liability company, trust or other entity, or any Governmental Authority. "Plan" means any employee pension benefit plan (other than a Multiemployer Plan) subject to the provisions of Title IV of ERISA or Section 412 of the Code or Section 302 of ERISA, and in respect of which KPP or any ERISA Affiliate is (or, if such plan were terminated, would under Section 4069 of ERISA be deemed to be) an "employer" as defined in Section 3(5) of ERISA. "Prior Acquisition" shall mean the acquisition of Burns Philp and Co.'s Australian and New Zealand terminals. "Prior Acquisition Documents" shall mean the asset purchase agreement executed by the Borrower and Burns Philp and Co. in connection with the Prior Acquisition. "Pro Rata Share" shall mean with respect to any Lender at any time, a percentage, the numerator of which shall be such Lender's Credit Exposure and the denominator of which shall be the sum of the Credit Exposures of all Lenders. "Recovery Event" shall mean any settlement of or payment in respect of any property or casualty insurance claim or any condemnation proceeding relating to any property or asset of KPP or any Significant Affiliate, the Diluted Value of which settlement or payment, when added to the Diluted Value of all such settlements and payments during the Term of this Agreement, exceeds $10,000,000. "Reference Ratings" shall mean the Credit Ratings of the Borrower. "Regulation D" shall mean Regulation D of the Board of Governors of the Federal Reserve System, as the same may be in effect from time to time, and any successor regulations. "Reinvestment Amount" means, with respect to any Recovery Event, the amount of cash received by KPP or any Significant Affiliate that the Borrower, by written notice delivered to the Administrative Agent on or prior to the date 10 Business Days following receipt of such cash by KPP or such Significant Affiliate, certifies will be reinvested, and within 180 days of receipt of such cash is in fact reinvested, in assets to replace, restore or refurbish the assets that were the subject of such Recovery Event. "Related Parties" shall mean, with respect to any specified Person, such Person's Affiliates and the respective directors, officers, employees, agents and advisors of such Person and such Person's Affiliates. "Release" means any release, spill, emission, leaking, dumping, injection, pouring, deposit, disposal, discharge, dispersal, leaching or migration into the environment (including ambient air, surface water, groundwater, land surface or subsurface strata) or within any building, structure, facility or fixture. "Required Lenders" shall mean, at any time, Lenders holding more than 51% of the aggregate outstanding Loans. "Responsible Officer" shall mean, with respect to any Person, any of the president, the chief executive officer, the chief operating officer, the chief financial officer, the treasurer or a vice president of such Person or such other representative of such Person as may be designated in writing by any one of the foregoing with the consent of the Administrative Agent. "Restricted Payment" shall have the meaning set forth in Section 7.5. "Revolving Borrowings" shall have the meaning assigned to the term "Borrowings" under the Revolving Credit Agreement. "Revolving Credit Agreement" shall mean that certain Revolving Credit Agreement, dated as of December 28, 2000, as amended by that certain Amendment No. 1 to Revolving Credit Agreement, dated as of July 31, 2002 and Amendment No. 2 to Revolving Credit Agreement, dated as of the date hereof, by and among the Borrower, KPP, the lenders party thereto, and the Administrative Agent. "Revolving Credit Facility" shall mean the revolving credit facility provided under the Revolving Credit Agreement. "S&P" shall mean Standard & Poor's Ratings Group, a division of The McGraw-Hill Companies, Inc. "Sellers" shall mean Koch Pipeline Company, L.P., a Delaware limited partnership, and Koch Fertilizer Storage and Terminal Company, a Nebraska corporation. "Senior Notes Indenture" shall mean that certain Indenture, dated on or about February 21, 2002, between the Borrower and JPMorgan Chase Bank, as trustee, with respect to the issuance of the Borrower's 7.750% Senior Unsecured Notes due 2012. "Significant Affiliate" shall mean each Person (i) in which KPP's direct and indirect Investments in such Person constitute more than 10% of the total assets of KPP and its consolidated Subsidiaries, (ii) in which KPP's and its Subsidiaries' share of the total assets (after intercompany eliminations) of such Person exceed 10% of the total assets of KPP and its consolidated Subsidiaries, or (iii) in which the equity of KPP and its Subsidiaries in the income from continuing operations of such Person before income taxes, extraordinary items and cumulative effects of changes in accounting principles exceeds 10% of such income of KPP and its consolidated Subsidiaries. "Significant Subsidiary" means any Subsidiary of KPP that is a Significant Affiliate. "SPV" shall have the meaning set forth in Section 11.4(e). "Subsidiary" shall mean, with respect to any Person (the "parent"), any corporation, partnership, joint venture, limited liability company, association or other entity the accounts of which would be consolidated with those of the parent in the parent's consolidated financial statements if such financial statements were prepared in accordance with GAAP as of such date, as well as any other corporation, partnership, joint venture, limited liability company, association or other entity (i) of which securities or other ownership interests representing more than 50% of the equity or more than 50% of the ordinary voting power, or in the case of a partnership, more than 50% of the general partnership interests are, as of such date, owned, Controlled or held, or (ii) that is, as of such date, otherwise Controlled, by the parent or one or more subsidiaries of the parent or by the parent and one or more subsidiaries of the parent. "Subsidiary Guarantee Agreement" shall mean the Subsidiary Guarantee Agreement, substantially in the form of Exhibit C, made by the Guarantors (other than KPP) in favor of the Administrative Agent for the benefit of the Lenders. "Taxes" shall mean any and all present or future taxes, levies, imposts, duties, deductions, charges or withholdings imposed by any Governmental Authority. "Term" shall mean the period from the Closing Date to the Maturity Date. "Ticking Margin" shall mean (i) 0% per annum for the period commencing on the Closing Date through and including the 90th day after the Closing Date, and (ii) 0.25% per annum for the period commencing on the 91st day after the Closing Date and continuing thereafter. "Type", when used in reference to a Loan, shall refer to whether the rate of interest on such Loan is determined by reference to the Adjusted LIBO Rate or the Base Rate. "UK Facility" shall mean the Credit Agreement, dated as of January 29, 1999, among the Borrower and ST Services, Ltd., as borrowers, and SunTrust Bank, as lender, as amended, modified and supplemented from time to time. "Wholly-Owned Subsidiary" shall mean any Subsidiary of a Person, all of the issued and outstanding Equity Interests of which are directly or indirectly owned by such Person, excluding (i) any general partner interests owned by the General Partner in any such Subsidiary that is a partnership and (ii) any directors' qualifying shares or similar type of Equity Interests, as applicable. "Withdrawal Liability" shall mean liability to a Multiemployer Plan as a result of a complete or partial withdrawal from such Multiemployer Plan, as such terms are defined in Part I of Subtitle E of Title IV of ERISA. Section 1.2. Classifications of Loans. For purposes of this Agreement, Loans may be classified and referred to by Type (e.g., a "Eurodollar Loan" or "Base Rate Loan"). Section 1.3. Accounting Terms and Determination. Unless otherwise defined or specified herein, all accounting terms used herein shall be interpreted, all accounting determinations hereunder shall be made, and all financial statements required to be delivered hereunder shall be prepared, in accordance with GAAP as in effect from time to time, applied on a basis consistent (except for such changes approved by KPP's independent public accountants) with the most recent audited consolidated financial statement of KPP delivered pursuant to Section 5.1(a); provided, that if KPP notifies the Administrative Agent that KPP wishes to amend any covenant in Article VI to eliminate the effect of any change in GAAP on the operation of such covenant (or if the Administrative Agent notifies KPP that the Required Lenders wish to amend Article VI for such purpose), then KPP's compliance with such covenant shall be determined on the basis of GAAP in effect immediately before the relevant change in GAAP became effective, until either such notice is withdrawn or such covenant is amended in a manner satisfactory to KPP and the Required Lenders. Section 1.4. Terms Generally. The definitions of terms herein shall apply equally to the singular and plural forms of the terms defined. Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. The words "include", "includes" and "including" shall be deemed to be followed by the phrase "without limitation". The word "will" shall be construed to have the same meaning and effect as the word "shall". In the computation of periods of time from a specified date to a later specified date, the word "from" means "from and including" and the word "to" means "to but excluding". Unless the context requires otherwise (i) any definition of or reference to any agreement, instrument or other document herein shall be construed as referring to such agreement, instrument or other document as it was originally executed or as it may from time to time be amended, supplemented or otherwise modified (subject to any restrictions on such amendments, supplements or modifications set forth herein), (ii) any reference herein to any Person shall be construed to include such Person's successors and permitted assigns, (iii) the words "hereof", "herein" and "hereunder" and words of similar import shall be construed to refer to this Agreement as a whole and not to any particular provision hereof, (iv) all references to Articles, Sections, Exhibits and Schedules shall be construed to refer to Articles, Sections, Exhibits and Schedules to this Agreement and (v) all references to a specific time shall be construed to refer to the time in the city and state of the Administrative Agent's principal office, unless otherwise indicated. Article II AMOUNT AND TERMS OF THE COMMITMENTS Section 2.1. [Intentionally Omitted] Section 2.2. The Bridge Loan. Subject to the terms and conditions set forth herein, each Lender severally agrees to make a single Loan to the Borrower (each a "Loan" and collectively, the "Loans" or the "Bridge Loan") on the Closing Date in a principal amount not to exceed each such Lender's Commitment; provided, however, that if for any reason (other than the failure of a Lender to make such Loan) the amount of such Lender's Commitment is not drawn on the Closing Date, the undrawn portion thereof shall be cancelled. The execution and delivery of this Agreement by the Borrower and the satisfaction of all conditions precedent set forth in Section 3.1 hereof shall be deemed to constitute the Borrower's request to borrow hereunder on the Closing Date. Section 2.3. Fees. (a) The Borrower shall pay to the Administrative Agent, for the ratable benefit of each Lender, a takeout fee in the amount of $1,170,000, which such takeout fee shall be fully earned on the Closing Date and due and payable in full on the earlier of (i) the Maturity Date and (ii) the date on which the Bridge Loan is repaid in full. (b) The Borrower shall pay to the Administrative Agent, for the ratable benefit of each Lender, a "no-equity fee" in an amount equal to $375,000, which such no-equity fee shall be fully earned, and due and payable on November 14, 2002 if KPP does not raise at least $50,000,000 of equity through the issuance of Equity Interests during the period commencing on November 4, 2002 and ending November 14, 2002. Section 2.4. Funding of the Bridge Loan. (a) Each Lender will make available each Loan to be made by it hereunder on the Closing Date by wire transfer in immediately available funds by 11:00 a.m. to the Administrative Agent at the Payment Office. The Administrative Agent will make such Loans available to the Borrower by promptly crediting the amounts that it receives, in like funds by the close of business on the Closing Date, to an account maintained by the Borrower with the Administrative Agent or at the Borrower's option, by effecting a wire transfer of such amounts to an account designated by the Borrower to the Administrative Agent. (b) All Loans shall be made by the Lenders on the basis of their respective Commitment. No Lender shall be responsible for any default by any other Lender in its obligations hereunder, and each Lender shall be obligated to make its Loans provided to be made by it hereunder, regardless of the failure of any other Lender to make its Loans hereunder. Section 2.5. Interest Elections. (a) The Bridge Loan initially shall be a Base Rate Loan. Thereafter, the Borrower may elect to convert the Bridge Loan, or any portion thereof, into a different Type or to continue such Loan, and in the case of a Eurodollar Loan, may elect Interest Periods therefor, all as provided in this Section. The Borrower may elect different options with respect to different portions of the Bridge Loan, in which case each such portion shall be allocated ratably among the Lenders according to each Lender's Pro Rata Share; provided, however, that there shall be no more than three Eurodollar Loans outstanding at any given time. (b) To make an election pursuant to this Section, the Borrower shall give the Administrative Agent prior written notice (or telephonic notice promptly confirmed in writing) of each Loan (a "Notice of Conversion/Continuation") that is to be converted or continued, as the case may be, (x) prior to 10:00 a.m. one Business Day prior to the requested date of a conversion into a Base Rate Loan and (y) prior to 11:00 a.m. three Business Days prior to a continuation of or conversion into a Eurodollar Loan. Each such Notice of Conversion/Continuation shall be irrevocable and shall specify (i) the amount of the portion of the Bridge Loan to which such Notice of Continuation/Conversion applies and, if different options are being elected with respect to different portions thereof, the amount of the portions thereof that are to be allocated to each Loan (in which case the information to be specified pursuant to clauses (iii) and (iv) shall be specified for each Loan); (ii) the effective date of the election made pursuant to such Notice of Continuation/Conversion, which shall be a Business Day, (iii) whether the Loan is to be a Base Rate Loan or a Eurodollar Loan; and (iv) if the Loan is to be a Eurodollar Loan, the Interest Period applicable thereto after giving effect to such election, which shall be a period contemplated by the definition of "Interest Period". If any such Notice of Continuation/Conversion requests a Eurodollar Loan but does not specify an Interest Period, the Borrower shall be deemed to have selected an Interest Period of one month. (c) If, on the expiration of any Interest Period in respect of any Eurodollar Loan, the Borrower shall have failed to deliver a Notice of Conversion/ Continuation, then, unless such Loan is repaid as provided herein, the Borrower shall be deemed to have elected to convert such Loan to a Base Rate Loan. No Loan may be converted into, or continued as, a Eurodollar Loan if a Default or an Event of Default has occurred and is continuing, unless the Administrative Agent and each of the Lenders shall have otherwise consented in writing. No conversion of any Eurodollar Loans shall be permitted except on the last day of the Interest Period in respect thereof. (d) Upon receipt of any Notice of Conversion/Continuation, the Administrative Agent shall promptly notify each Lender of the details thereof and of such Lender's portion of each such Loan. Section 2.6. [Intentionally Omitted] Section 2.7. Repayment of the Bridge Loan. The outstanding principal amount of the Bridge Loan shall be due and payable in full (together with accrued and unpaid interest thereon) on the Maturity Date. Section 2.8. Evidence of Indebtedness. (a) Each Lender shall maintain in accordance with its usual practice appropriate records evidencing the indebtedness of the Borrower to such Lender resulting from each Loan made by such Lender from time to time, including the amounts of principal and interest payable thereon and paid to such Lender from time to time under this Agreement. The Administrative Agent shall maintain appropriate records in which shall be recorded (i) the Commitment of each Lender, (ii) the amount of each Loan made hereunder by each Lender, the Type thereof and the Interest Period applicable thereto, (iii) the date of each continuation thereof pursuant to Section 2.5, (iv) the date of each conversion of all or a portion thereof to another Type pursuant to Section 2.5, (v) the date and amount of any principal or interest due and payable or to become due and payable from the Borrower to each Lender hereunder in respect of such Loans and (vi) both the date and amount of any sum received by the Administrative Agent hereunder from the Borrower in respect of the Loans and each Lender's Pro Rata Share thereof. The entries made in such records shall be prima facie evidence of the existence and amounts of the obligations of the Borrower therein recorded; provided, that the failure or delay of any Lender or the Administrative Agent in maintaining or making entries into any such record or any error therein shall not in any manner affect the obligation of the Borrower to repay the Loans (both principal and unpaid accrued interest) of such Lender in accordance with the terms of this Agreement. (b) At the request of any Lender at any time, the Borrower agrees that it will execute and deliver to such Lender a Note, payable to the order of such Lender. Section 2.9. Prepayments. (a) The Borrower shall have the right at any time and from time to time to prepay the Bridge Loan, in whole or in part, without premium or penalty, by giving irrevocable written notice (or telephonic notice promptly confirmed in writing) to the Administrative Agent no later than (i) in the case of prepayment of any Eurodollar Loan, 11:00 a.m. not less than three Business Days prior to any such prepayment, and (ii) in the case of any prepayment of any Base Rate Loan, not less than one Business Day prior to the date of such prepayment. Each such notice shall be irrevocable and shall specify the proposed date of such prepayment and the principal amount of each Loan or portion thereof to be prepaid. Upon receipt of any such notice, the Administrative Agent shall promptly notify each affected Lender of the contents thereof and of such Lender's Pro Rata Share of any such prepayment. If such notice is given, the aggregate amount specified in such notice shall be due and payable on the date designated in such notice, together with accrued interest to such date on the amount so prepaid in accordance with Section 2.10(c); provided, that if a Eurodollar Loan is prepaid on a date other than the last day of an Interest Period applicable thereto, the Borrower shall also pay all amounts required pursuant to Section 2.16. Prepayments shall be in minimum amounts of $10,000,000 and integral multiples of $1,000,000. (b) The Borrower shall promptly notify the Administrative Agent upon the receipt of any Net Cash Proceeds from the issuance of any Additional Debt by KPP, the Borrower or any Significant Affiliate or the occurrence of any Equity Event, and no later than the Business Day following the date of receipt thereof, the Borrower shall prepay the Bridge Loan, together with payment of all accrued and unpaid interest, fees, expenses and amounts required pursuant to Section 2.16 of this Agreement, in an aggregate amount equal to 100% (without duplication) of such Net Cash Proceeds, such payments to be applied (i) first, to the payment of interest, fees, expenses and such other amounts, pro rata to the Lenders based on the amount of such interest, fees, expenses and other amounts outstanding at such time and (ii) second to the payment of principal on the Bridge Loan, pro rata to the Lenders based on their respective Pro Rata Shares. Section 2.10. Interest on Loans. (a) The Borrower shall pay interest on each Base Rate Loan at the Base Rate in effect from time to time and on each Eurodollar Loan at the Adjusted LIBO Rate for the applicable Interest Period in effect for such Loan, plus, in each case, the Applicable Margin in effect from time to time. (b) If an Event of Default has occurred and is continuing, at the option of the Required Lenders, the Borrower shall pay interest ("Default Interest") with respect to all Eurodollar Loans at the rate otherwise applicable for the then-current Interest Period plus an additional 2% per annum until the last day of such Interest Period, and thereafter, and with respect to all Base Rate Loans and all other Obligations hereunder (other than Loans), at the rate in effect for Base Rate Loans, plus an additional 2% per annum. If the Bridge Loan is not paid in full on the Maturity Date, interest shall accrue on the outstanding balance of the Bridge Loan from and after such date at a per annum interest rate equal to the Base Rate plus the Applicable Margin plus 4% per annum. (c) Interest on the principal amount of all Loans shall accrue from and including the date such Loans are made to but excluding the date of any repayment thereof. Interest on all outstanding Base Rate Loans shall be payable quarterly in arrears on December 31, 2002, March 31, 2003, and on the Maturity Date. Interest on all outstanding Eurodollar Loans shall be payable on the last day of each Interest Period applicable thereto, and, in the case of any Eurodollar Loans having an Interest Period in excess of three months, on each day that occurs every three months, after the initial date of such Interest Period, and on the Maturity Date. Interest on any Loan that is converted into a Loan of another Type or that is repaid or prepaid shall be payable on the date of such conversion or on the date of any such repayment or prepayment (on the amount repaid or prepaid) thereof. All Default Interest shall be payable on demand. (d) The Administrative Agent shall determine each interest rate applicable to the Loans hereunder and shall promptly notify the Borrower and the Lenders of such rate in writing (or by telephone, promptly confirmed in writing). Any such determination shall be conclusive and binding for all purposes, absent manifest error. Section 2.11. [Intentionally Omitted] Section 2.12. Computation of Interest. Interest based on the Administrative Agent's prime rate pursuant to clause (i) of the definition of "Base Rate" shall be computed on the basis of a year of 365 days (or 366 days in a leap year) and paid for the actual number of days elapsed (including the first day but excluding the last day). All other interest shall be computed on the basis of a year of 360 days and paid for the actual number of days elapsed (including the first day but excluding the last day). Section 2.13. Inability to Determine Interest Rates. If prior to the commencement of any Interest Period for any Eurodollar Loan, (i) the Administrative Agent shall have determined (which determination shall be conclusive and binding upon the Borrower) that, by reason of circumstances affecting the relevant interbank market, adequate means do not exist for ascertaining LIBOR for such Interest Period, or (ii) the Administrative Agent shall have received notice from the Required Lenders that the Adjusted LIBO Rate does not adequately and fairly reflect the cost to such Lenders (or Lender, as the case may be) of making, funding or maintaining their Eurodollar Loans for such Interest Period, the Administrative Agent shall give written notice (or telephonic notice, promptly confirmed in writing) to the Borrower and to the Lenders as soon as practicable thereafter. Until the Administrative Agent shall notify the Borrower and the Lenders that the circumstances giving rise to such notice no longer exist, (i) the obligations of the Lenders to make Eurodollar Loans or to continue or convert outstanding Loans as or into Eurodollar Loans shall be suspended and (ii) all such affected Loans shall be converted into Base Rate Loans on the last day of the then current Interest Period applicable thereto unless the Borrower prepays such Loans in accordance with this Agreement. Section 2.14. Illegality. If any Change in Law shall make it unlawful or impossible for any Lender to make, maintain or fund any Eurodollar Loan and such Lender shall so notify the Administrative Agent, the Administrative Agent shall promptly give notice thereof to the Borrower and the other Lenders, whereupon until such Lender notifies the Administrative Agent and the Borrower that the circumstances giving rise to such suspension no longer exist, the obligation of such Lender to continue or convert outstanding Loans as or into Eurodollar Loans, shall be suspended, and any outstanding Eurodollar Loan shall be converted to a Base Rate Loan either (i) on the last day of the then current Interest Period applicable to such Eurodollar Loan if such Lender may lawfully continue to maintain such Loan to such date or (ii) immediately if such Lender shall determine that it may not lawfully continue to maintain such Eurodollar Loan to such date. Notwithstanding the foregoing, the affected Lender shall, prior to giving such notice to the Administrative Agent, designate a different Applicable Lending Office if such designation would avoid the need for giving such notice and if such designation would not otherwise be disadvantageous to such Lender in the good faith exercise of its discretion. Section 2.15. Increased Costs. (a) If any Change in Law shall (i) impose, modify or deem applicable any reserve, special deposit or similar requirement that is not otherwise included in the determination of the Adjusted LIBO Rate hereunder against assets of, deposits with or for the account of, or credit extended by, any Lender (except any such reserve requirement reflected in the Adjusted LIBO Rate); or (ii) impose on any Lender or the Eurodollar interbank market any other condition affecting this Agreement or any Eurodollar Loans made by such Lender, and the result of the foregoing is to increase the cost to such Lender of converting into, continuing or maintaining a Eurodollar Loan or to reduce the amount received or receivable by such Lender hereunder (whether of principal, interest or any other amount), then the Borrower shall promptly pay, upon written notice from and demand by such Lender on the Borrower (with a copy of such notice and demand to the Administrative Agent), to the Administrative Agent for the account of such Lender, within five Business Days after the date of such notice and demand, additional amount or amounts sufficient to compensate such Lender for such additional costs incurred or reduction suffered. (b) If any Lender or the Issuing Bank shall have determined that on or after the date of this Agreement any Change in Law regarding capital requirements has or would have the effect of reducing the rate of return on such Lender's capital (or on the capital of such Lender's parent corporation) as a consequence of its obligations hereunder to a level below that which such Lender or such Lender's parent corporation could have achieved but for such Change in Law (taking into consideration such Lender's policies or the policies of such Lender's parent corporation with respect to capital adequacy) then, from time to time, within five Business Days after receipt by the Borrower of written demand by such Lender (with a copy thereof to the Administrative Agent), the Borrower shall pay to such Lender such additional amounts as will compensate such Lender or such Lender's parent corporation for any such reduction suffered. (c) A certificate of a Lender setting forth the amount or amounts necessary to compensate such Lender or such Lender's parent corporation as specified in subsection (a) or (b) of this Section shall be delivered to the Borrower (with a copy to the Administrative Agent) and shall be conclusive, absent manifest error. The Borrower shall pay any such Lender such amount or amounts within 10 days after receipt thereof. (d) Failure or delay on the part of any Lender to demand compensation pursuant to this Section shall not constitute a waiver of such Lender's right to demand such compensation. Section 2.16. Funding Indemnity. In the event of (i) the payment of any principal of a Eurodollar Loan other than on the last day of the Interest Period applicable thereto (including as a result of an Event of Default), (ii) the conversion or continuation of a Eurodollar Loan other than on the last day of the Interest Period applicable thereto, or (iii) the failure by the Borrower to borrow, prepay, convert or continue any Eurodollar Loan on the date specified in any applicable notice (regardless of whether such notice is withdrawn or revoked), then, in any such event, the Borrower shall compensate each Lender, within five Business Days after written demand from such Lender, for any loss, cost or expense attributable to such event. In the case of a Eurodollar Loan, such loss, cost or expense shall be deemed to include an amount determined by such Lender to be the excess, if any, of (A) the amount of interest that would have accrued on the principal amount of such Eurodollar Loan if such event had not occurred at the Adjusted LIBO Rate applicable to such Eurodollar Loan for the period from the date of such event to the last day of the then current Interest Period therefor (or in the case of a failure to borrow, convert or continue, for the period that would have been the Interest Period for such Eurodollar Loan) over (B) the amount of interest that would accrue on the principal amount of such Eurodollar Loan for the same period if the Adjusted LIBO Rate were set on the date such Eurodollar Loan were prepaid or converted or the date on which the Borrower failed to borrow, convert or continue such Eurodollar Loan. A certificate as to any additional amount payable under this Section 2.16 submitted to the Borrower by any Lender (with a copy to the Administrative Agent) shall be conclusive, absent manifest error. Section 2.17. Taxes. (a) Any and all payments by or on account of any obligation of the Borrower hereunder shall be made free and clear of and without deduction for any Indemnified Taxes or Other Taxes; provided, that if the Borrower shall be required to deduct any Indemnified Taxes or Other Taxes from such payments, then (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) the Administrative Agent, any Lender shall receive an amount equal to the sum it would have received had no such deductions been made, (ii) the Borrower shall make such deductions and (iii) the Borrower shall pay the full amount deducted to the relevant Governmental Authority in accordance with applicable law. (b) In addition, the Borrower shall pay any Other Taxes to the relevant Governmental Authority in accordance with applicable law. (c) The Borrower shall indemnify the Administrative Agent and each Lender, within five Business Days after written demand therefor, for the full amount of any Indemnified Taxes or Other Taxes paid by the Administrative Agent or such Lender, as the case may be, on or with respect to any payment by or on account of any obligation of the Borrower hereunder (including Indemnified Taxes or Other Taxes imposed or asserted on or attributable to amounts payable under this Section) and any penalties, interest and reasonable expenses arising therefrom or with respect thereto, whether or not such Indemnified Taxes or Other Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority. A certificate as to the amount of such payment or liability delivered to the Borrower by a Lender, or by the Administrative Agent on its own behalf or on behalf of a Lender, shall be conclusive absent manifest error. (d) As soon as practicable after any payment of Indemnified Taxes or Other Taxes by the Borrower to a Governmental Authority, the Borrower shall deliver to the Administrative Agent the original or a certified copy of a receipt issued by such Governmental Authority evidencing such payment, a copy of the return reporting such payment or other evidence of such payment reasonably satisfactory to the Administrative Agent. (e) Each Foreign Lender represents and warrants to the Administrative Agent and the Borrower that, as of the date such Lender becomes a party to this Agreement, such Lender is entitled to an exemption from withholding tax under the Code or any treaty to which the United States is a party with respect to payments under this Agreement, and each Foreign Lender shall deliver to the Borrower (with a copy to the Administrative Agent), at the time or times prescribed by applicable law, such properly completed and executed documentation prescribed by applicable law or reasonably requested by the Borrower as will permit such payments to be made without withholding. Without limiting the generality of the foregoing, each Foreign Lender agrees that it will deliver to the Administrative Agent and the Borrower (or in the case of a Participant, to the Lender from which the related participation shall have been purchased), as appropriate, two duly completed copies of (i) Internal Revenue Service Form W-8 ECI, or any successor form thereto, certifying that the payments received from the Borrower hereunder are effectively connected with such Foreign Lender's conduct of a trade or business in the United States; or (ii) Internal Revenue Service Form W-8 BEN, or any successor form thereto, certifying that such Foreign Lender is entitled to benefits under an income tax treaty to which the United States is a party that exempts from U.S. withholding tax payments of interest hereunder; or (iii) Internal Revenue Service Form W-8 BEN, or any successor form prescribed by the Internal Revenue Service, together with a certificate (A) establishing that the payment to the foreign lender qualifies as "portfolio interest" exempt from U.S. withholding tax under Code section 871(h) or 881(c), and (B) stating that (1) the Foreign Lender is not a bank for purposes of Code section 881(c)(3)(A), or the obligation of the Borrower hereunder is not, with respect to such Foreign Lender, a loan agreement entered into in the ordinary course of its trade or business, within the meaning of that section; (2) the Foreign Lender is not a 10% shareholder of the Borrower within the meaning of Code section 871(h)(3) or 881(c)(3)(B); and (3) the Foreign Lender is not a controlled foreign corporation that is related to the Borrower within the meaning of Code section 881(c)(3)(C); or (iv) such other Internal Revenue Service forms as may be applicable to the Foreign Lender, including Forms W-8 IMY or W-8 EXP. Each such Foreign Lender shall deliver to the Borrower and the Administrative Agent such forms on or before the date that it becomes a party to this Agreement (or in the case of a Participant, on or before the date such Participant purchases the related participation). In addition, each such Foreign Lender shall deliver such forms promptly upon the obsolescence or invalidity of any form previously delivered by such Foreign Lender. Each such Foreign Lender shall promptly notify the Borrower and the Administrative Agent at any time that it determines that it is no longer in a position to provide any previously delivered certificate to the Borrower (or any other form of certification adopted by the Internal Revenue Service for such purpose). Section 2.18. Payments Generally; Pro Rata Treatment; Sharing of Set-offs. (a) The Borrower shall make each payment required to be made by it hereunder (whether of principal or interest, or of amounts payable under Section 2.15, 2.16 or 2.17, or otherwise) prior to 12:00 noon (New York, New York time) on the date when due in immediately available funds, without set-off, counterclaims, or withholdings or deductions for taxes. Any amounts received after such time on any date may, in the discretion of the Administrative Agent, be deemed to have been received on the next succeeding Business Day for purposes of calculating interest thereon. All such payments shall be made to the Administrative Agent at the Payment Office, except that payments pursuant to Sections 2.15, 2.16 and 2.17 and 11.3 shall be made directly to the Persons entitled thereto. The Administrative Agent shall distribute any such payments received by it for the account of any other Person to the appropriate recipient promptly following receipt thereof. If any payment hereunder shall be due on a day that is not a Business Day, the date for payment shall be extended to the next succeeding Business Day, and, in the case of any payment accruing interest, interest thereon shall be made payable for the period of such extension. All payments hereunder shall be made in Dollars. (b) If at any time insufficient funds are received by and available to the Administrative Agent to pay fully all amounts of principal and interest then due hereunder, such funds shall be applied (i) first, towards payment of interest then due hereunder, ratably among the parties entitled thereto in accordance with the amounts of interest then due to such parties, and (ii) second, towards payment of principal then due hereunder, ratably among the parties entitled thereto in accordance with the amounts of principal then due to such parties. (c) If any Lender shall, by exercising any right of set-off or counterclaim or otherwise, obtain payment in respect of any principal of or interest on any of its Loans that would result in such Lender receiving payment of a greater proportion of the aggregate amount of its Loans and accrued interest thereon than the proportion received by any other Lender, then the Lender receiving such greater proportion shall purchase (for cash at face value) participations in the Loans of other Lenders to the extent necessary so that the benefit of all such payments shall be shared by the Lenders ratably in accordance with the aggregate amount of principal of and accrued interest on their respective Loans; provided, that (i) if any such participation is purchased and all or any portion of the payment giving rise thereto is recovered, such participation shall be rescinded and the purchase price restored to the extent of such recovery, without interest, and (ii) the provisions of this subsection shall not be construed to apply to any payment made by the Borrower pursuant to and in accordance with the express terms of this Agreement or any payment obtained by a Lender as consideration for the assignment of or sale of a participation in any of its Loans to any assignee or participant, other than to the Borrower or any Subsidiary or Affiliate thereof (as to which the provisions of this subsection shall apply). The Borrower consents to the foregoing and agrees, to the extent it may effectively do so under applicable law, that any Lender acquiring a participation pursuant to the foregoing arrangements may exercise against the Borrower rights of set-off and counterclaim with respect to such participation as fully as if such Lender were a direct creditor of the Borrower in the amount of such participation. (d) Unless the Administrative Agent shall have received notice from the Borrower prior to the date on which any payment is due to the Administrative Agent for the account of the Lenders hereunder that the Borrower will not make such payment, the Administrative Agent may assume that the Borrower has made such payment on such date in accordance herewith and may, in reliance upon such assumption, distribute to the Lenders the amount or amounts due. In such event, if the Borrower has not in fact made such payment, then each Lender severally agrees to repay to the Administrative Agent forthwith on demand the amount so distributed to such Lender with interest thereon, for each day from and including the date such amount is distributed to it to but excluding the date of payment to the Administrative Agent, at the greater of the Federal Funds Rate and a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation. (e) If any Lender shall fail to make any payment required to be made by it pursuant to Section 2.4(a) or 11.3(d), then the Administrative Agent may, in its discretion (notwithstanding any contrary provision hereof), apply any amounts thereafter received by the Administrative Agent for the account of such Lender to satisfy such Lender's obligations under such Sections until all such unsatisfied obligations are fully paid. Section 2.19. Mitigation of Obligations; Replacement of Lenders. (a) If any Lender requests compensation under Section 2.15, or if the Borrower is required to pay any additional amount to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 2.17, then such Lender shall use reasonable efforts to designate a different lending office for funding or booking its Loans hereunder or to assign its rights and obligations hereunder to another of its offices, branches or affiliates, if, in the sole judgment of such Lender, such designation or assignment (i) would eliminate or reduce amounts payable under Section 2.15 or Section 2.17, as the case may be, in the future and (ii) would not subject such Lender to any unreimbursed cost or expense and would not otherwise be disadvantageous to such Lender. The Borrower hereby agrees to pay all costs and expenses incurred by any Lender in connection with such designation or assignment. (b) If any Lender requests compensation under Section 2.15, or if the Borrower is required to pay any additional amount to any Lender or any Governmental Authority of the account of any Lender pursuant to Section 2.17, or if any Lender defaults in its obligation to fund Loans hereunder, then the Borrower may, at its sole expense and effort, upon notice to such Lender and the Administrative Agent, require such Lender to assign and delegate, without recourse (in accordance with and subject to the restrictions set forth in Section 11.4(b) all its interests, rights and obligations under this Agreement to an assignee that shall assume such obligations (which assignee may be another Lender); provided, that (i) the Borrower shall have received the prior written consent of the Administrative Agent, which consent shall not be unreasonably withheld, (ii) such Lender shall have received payment of an amount equal to the outstanding principal amount of all Loans owed to it, accrued interest thereon and all other amounts payable to it hereunder, from the assignee (in the case of such outstanding principal and accrued interest) and from the Borrower (in the case of all other amounts) and (iii) in the case of a claim for compensation under Section 2.15 or payments required to be made pursuant to Section 2.17, such assignment will result in a reduction in such compensation or payments. A Lender shall not be required to make any such assignment and delegation if, prior thereto, as a result of a waiver by such Lender or otherwise, the circumstances entitling the Borrower to require such assignment and delegation cease to apply. Article III CONDITIONS PRECEDENT TO LOANS Section 3.1. Conditions To Effectiveness. The obligations of the Lenders to make Loans hereunder shall not become effective until the date on which each of the following conditions is satisfied (or waived in accordance with Section 11.2). (a) The Administrative Agent shall have received all amounts due and payable under the Loan Documents on or prior to the Closing Date, including reimbursement or payment of all out-of-pocket expenses (including reasonable fees, charges and disbursements of counsel to the Administrative Agent) required to be reimbursed or paid by the Borrower, under any Loan Document. (b) The Administrative Agent (or its counsel) shall have received the following, each in the form specified or, if no form is specified, in form and substance satisfactory to the Administrative Agent: (i) a counterpart of this Agreement signed by or on behalf of each party thereto or written evidence satisfactory to the Administrative Agent (which may include telecopy transmission of a signed signature page of this Agreement) that such party has signed a counterpart of this Agreement; (ii) if requested by any Lender, a Note payable to such Lender, duly executed by the Borrower; (iii) a counterpart of the Subsidiary Guarantee Agreement, duly executed by each Guarantor; (iv) a certificate of the Secretary or Assistant Secretary of each Loan Party, attaching and certifying copies of its Constituent Documents and of the resolutions of its board of directors (or other comparable authorizations), authorizing the execution, delivery and performance of the Loan Documents to which it is a party and certifying the name, title and true signature of each officer of such Loan Party executing the Loan Documents to which it is a party; (v) certificates of good standing or existence, as the case may be, from the Secretary of State of the jurisdiction of organization of each Loan Party and each other jurisdiction where each such Loan Party is (x) required to be qualified to do business as a foreign corporation and (y) owns, leases or operates common carrier pipeline assets; (vi) a favorable written opinion of Fulbright & Jaworski, L.L.P., counsel to the Loan Parties, addressed to the Administrative Agent and each of the Lenders, substantially in the form of Exhibit F; (vii) a certificate, dated the Closing Date and signed by a Responsible Officer of the Borrower, confirming that before and after giving effect to the issuance of the Bridge Loan, (A) the representations and warranties set forth in Article IV are true and correct and (B) no Default or Event of Default has occurred and is continuing, together with disbursement instructions for the Bridge Loan; (viii) copies of the Acquisition Agreement and the other Acquisition Documents, each of which shall be in form and substance reasonably satisfactory to Agent and its counsel and certified as true, correct and complete by an authorized officer of Borrower, together with evidence that (i) the aggregate purchase price for the Acquisition, together with the aggregate purchase price for the Prior Acquisition, is not less than $150,000,000, (ii) all conditions precedent to the Acquisition have been satisfied or waived with the consent of the Agent (other than the payment of the cash purchase price payable on the Closing Date pursuant to the Acquisition Agreement), and (iii) upon the funding of the Bridge Loan, the Acquisition shall immediately be consummated in accordance with the terms of the Acquisition Agreement and the other Acquisition Documents; (ix) copies of each of the Prior Acquisition Documents, each of which shall be in form and substance reasonably satisfactory to Agent and its counsel and certified as true, correct and complete by an authorized officer of Borrower, together with evidence satisfactory to the Agent that the Prior Acquisition has been consummated in accordance with the terms thereof; and (x) a certificate of the Secretary or Assistant Secretary of the Borrower, attaching and certifying copies of all consents, approvals, authorizations, registrations and filings and orders required or advisable to be made or obtained under any Requirement of Law, or by any contractual or legal obligation of each Loan Party, in connection with the execution, delivery, performance, validity and enforceability of the Loan Documents or any of the transactions contemplated thereby, and of the Acquisition Documents and the transactions contemplated thereby, and such consents, approvals, authorizations, registrations, filings and orders shall be in full force and effect and all applicable waiting periods shall have expired. All Loan Documents, certificates, legal opinions and other documents referred to in this Article III shall, unless otherwise specified, be delivered to the Administrative Agent for the account of each Lender and, except for the Notes, in sufficient counterparts or copies for each Lender. Article IV REPRESENTATIONS AND WARRANTIES The Borrower represents and warrants to the Administrative Agent and each Lender as follows: Section 4.1. Existence; Power. Each Loan Party and each of its Subsidiaries (i) is duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization, (ii) has all requisite power and authority to carry on its business as now conducted, and (iii) is duly qualified to do business and is in good standing in each jurisdiction where such qualification is required, except where a failure to be so qualified could not reasonably be expected to result in a Material Adverse Effect. Section 4.2. Organizational Power; Authorization; Enforceability. The execution, delivery and performance by each Loan Party of the Loan Documents, the Acquisition Documents, and the Prior Acquisition Documents to which it is a party are within such Loan Party's organizational powers and have been duly authorized by all necessary organizational, and if required, stockholder, member or partner (as applicable), action. This Agreement has been duly executed by KPP and the Borrower, and constitutes, and each other Loan Document, each of the Acquisition Documents, and each of the Prior Acquisition Documents, to which any Loan Party is a party, when executed and delivered by each Loan Party, will constitute, the legal, valid and binding obligation of each Loan Party which is a party thereto (as the case may be), enforceable against KPP, the Borrower or such Loan Party (as the case may be) in accordance with its respective terms. Section 4.3. Governmental Approvals; No Conflicts. The execution, delivery and performance by each Loan Party of each Loan Document, each Acquisition Document, and each Prior Acquisition Document to which it is a party (i) do not and will not require any consent or approval of, registration or filing with, or any action by, any Governmental Authority, except those as have been obtained or made and are in full force and effect, (ii) do not and will not violate any applicable law or regulation or the Constituent Documents of such Loan Party or any of its Subsidiaries or any judgment or order of any Governmental Authority, (iii) do not and will not violate or result in a default under any indenture, material agreement or other material instrument binding on such Loan Party or any of its Subsidiaries or any of its assets or give rise to a right thereunder to require any payment to be made by such Loan Party or any of its Subsidiaries and (iv) do not and will not result in the creation or imposition of any Lien on any asset of such Loan Party or any of its Subsidiaries, except Liens (if any) created under the Loan Documents. Section 4.4. Financial Statements. The Borrower has furnished to each Lender (i) the audited consolidated balance sheet of KPP and its Subsidiaries as of December 31, 2001 and the related consolidated statements of income, shareholders' equity and cash flows for the fiscal year then ended prepared by KPMG LLP and (ii) the unaudited consolidated balance sheet of KPP and its Subsidiaries as at the end of June 30, 2002, and the related unaudited consolidated statements of income and cash flows for the fiscal quarter and year-to-date period then ending, certified by a Responsible Officer of KPP. Such financial statements fairly present the consolidated financial condition of KPP and its Subsidiaries as of such dates and the consolidated results of operations for such periods in conformity with GAAP consistently applied, subject to year end audit adjustments and the absence of footnotes in the case of the statements referred to in clause (ii). Since December 31, 2001, there have been no changes with respect to KPP and its Subsidiaries or the Borrower which have had or could reasonably be expected to have, singly or in the aggregate, a Material Adverse Effect. Section 4.5. Litigation and Environmental Matters. (a) No litigation, investigation or proceeding of or before any arbitrators or Governmental Authorities is pending against or, to the knowledge of the Borrower, threatened against or affecting any Loan Party or any of its Subsidiaries (i) that could reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect or (ii) that in any manner draws into question the validity or enforceability of this Agreement or any other Loan Document, any Acquisition Document, or any Prior Acquisition Document. (b) Except for the matters set forth on Schedule 4.5, no Loan Party nor any of its Subsidiaries (i) has failed to comply with any Environmental Law or to obtain, maintain or comply with any permit, license or other approval required under any Environmental Law, (ii) has become subject to any Environmental Liability, (iii) has received notice of any claim with respect to any Environmental Liability or (iv) knows of any basis for any Environmental Liability, where any such event or circumstance described in clauses (i) through (iv) above(A) could reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect or (B) in any manner draws into question the validity or enforceability of this Agreement or any other Loan Document. Section 4.6. Compliance with Laws and Agreements. Each Loan Party and each of its Subsidiaries is in compliance with (i) all applicable laws, rules, regulations and orders of any Governmental Authority, and (ii) all indentures, agreements or other instruments binding upon it or its properties, except where non-compliance, either singly or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect. Section 4.7. Investment Company Act, Etc. Neither KPP nor any of its Subsidiaries is (i) an "investment company", as defined in, or subject to regulation under, the Investment Company Act of 1940, as amended, (ii) a "holding company" as defined in, or subject to regulation under, the Public Utility Holding Company Act of 1935, as amended or (iii) otherwise subject to any other regulatory scheme limiting its ability to incur debt. Section 4.8. Taxes. KPP and its Subsidiaries and each other Person the taxes of which KPP or any Subsidiary of KPP could become liable have timely filed or caused to be filed all Federal income tax returns and all other material tax returns that are required to be filed by them, and have paid all taxes shown to be due and payable on such returns or on any assessments made against it or its property and all other taxes, fees or other charges imposed on it or any of its property by any Governmental Authority, except (i) to the extent the failure to do so would not have a Material Adverse Effect or (ii) where the same are currently being contested in good faith by appropriate proceedings and for which KPP or such Subsidiary, as the case may be, has set aside on its books adequate reserves. The charges, accruals and reserves on the books of KPP and its Subsidiaries in respect of such taxes are adequate, and no tax liabilities that could be materially in excess of the amount so provided are anticipated. Section 4.9. Margin Regulations. None of the proceeds of any of the Loans will be used for "purchasing" or "carrying" any "margin stock" with the respective meanings of each of such term under Regulation U or for any purpose that violates the Margin Regulations. Section 4.10. ERISA. No ERISA Event has occurred or is reasonably expected to occur that, when taken together with all other such ERISA Events, could reasonably be expected to result in a Material Adverse Effect. The present value of all accumulated benefit obligations under each Plan (based on the assumptions used for purposes of Statement of Financial Standards No. 87) did not, as of the date of the most recent financial statements reflecting such amounts, exceed by more than $5,000,000 the fair market value of the assets of such Plan, and the present value of all accumulated benefit obligations of all underfunded Plans (based on the assumptions used for purposes of Statement of Financial Standards No. 87) did not, as of the date of the most recent financial statements reflecting such amounts, exceed by more than $5,000,000 the fair market value of the assets of all such underfunded Plans. Section 4.11. Ownership of Property. (a) Each of the Loan Party and its Subsidiaries has good title to, or valid leasehold interests in, all of its real and personal property material to the operation of its business. (b) Each of the Loan Party and its Subsidiaries owns, or is licensed, or otherwise has the right, to use, all patents, trademarks, service marks, tradenames, copyrights and other intellectual property material to its business, and the use thereof by such Loan Party and its Subsidiaries does not infringe on the rights of any other Person, except for any such infringements that, individually or in the aggregate, would not have a Material Adverse Effect. Section 4.12. Disclosure. The Borrower has disclosed to the Lenders all agreements, instruments and corporate or other restrictions to which each Loan Party or any of its Subsidiaries is subject, and all other matters known to any of them, that, individually or in the aggregate, could reasonably be expected to result in a Material Adverse Effect. None of the reports (including without limitation all reports that the Borrower is required to file with the Securities and Exchange Commission), financial statements, certificates or other information furnished by or on behalf of any Loan Party to the Administrative Agent or any Lender in connection with the negotiation or syndication of this Agreement or any other Loan Document or delivered hereunder or thereunder (as modified or supplemented by any other information so furnished) contains any material misstatement of fact or omits to state any material fact necessary to make the statements therein, taken as a whole, in light of the circumstances under which they were made, not misleading; provided, that with respect to projected financial information, the Borrower represents only that such information was prepared in good faith based upon assumptions believed to be reasonable at the time. Section 4.13. Labor Relations. There are no strikes, lockouts or other material labor disputes or grievances against any Loan Party or any of its Subsidiaries, or, to the Borrower's knowledge, threatened against or affecting any Loan Party or any of its Subsidiaries, and no significant unfair labor practice, charges or grievances are pending against the Borrower or any of its Subsidiaries, or to the Borrower's knowledge, threatened against any of them before any Governmental Authority. All payments due from any Loan Party or any of its Subsidiaries pursuant to the provisions of any collective bargaining agreement have been paid or accrued as a liability on the books of such Loan Party or such Subsidiary (as applicable), except where the failure to do so could not reasonably be expected to have a Material Adverse Effect. Section 4.14. Acquisition Documents. The Acquisition Agreement, each of the other Acquisition Documents, and each of the Prior Acquisition Documents is the legal, valid and binding obligation of each party thereto, enforceable against each such party in accordance with its terms. Section 4.15. Subsidiaries, Significant Affiliates and Guarantors. Schedule 4.15 sets forth the name of, the ownership interest of KPP in, the jurisdiction of incorporation of, and the type of, each Subsidiary of KPP and each Significant Affiliate and identifies each Subsidiary of KPP and each Significant Affiliate that is a Guarantor, in each case, as of the date hereof. Section 4.16. Liens. Schedule 7.2 sets forth all Liens existing on the date hereof on any property or asset of KPP or any Subsidiary of KPP. Article V AFFIRMATIVE COVENANTS KPP and the Borrower (as applicable) covenant and agree that so long as any Lender has a Commitment hereunder or the principal of and interest on any Loan or any other amount payable hereunder remains unpaid: Section 5.1. Financial Statements and Other Information. The Borrower will deliver to the Administrative Agent and each Lender: (a) as soon as available and in any event within 95 days after the end of each fiscal year of KPP, a copy of the annual audited report for such fiscal year for KPP and its Subsidiaries, containing a consolidated balance sheet of KPP and its Subsidiaries as of the end of such fiscal year and the related consolidated statements of income, stockholders' equity and cash flows (together with all footnotes thereto) of KPP and its Subsidiaries for such fiscal year, setting forth in each case in comparative form the figures for the previous fiscal year, all in reasonable detail and reported on by KPMG LLP or other independent public accountants of nationally recognized standing (without a "going concern" or like qualification, exception or explanation and without any qualification or exception as to scope of such audit) to the effect that such financial statements present fairly in all material respects the financial condition and the results of operations of KPP and its Subsidiaries for such fiscal year on a consolidated basis in accordance with GAAP and that the examination by such accountants in connection with such consolidated financial statements has been made in accordance with generally accepted auditing standards; (b) as soon as available and in any event within 50 days after the end of each of the first three fiscal quarters of each fiscal year of KPP, an unaudited consolidated balance sheet of KPP and its Subsidiaries as of the end of such fiscal quarter and the related unaudited consolidated statements of income and cash flows of KPP and its Subsidiaries for such fiscal quarter and the then elapsed portion of such fiscal year, setting forth in each case in comparative form the figures for the corresponding quarter and the corresponding portion of KPP's previous fiscal year, all certified by a Responsible Officer of KPP as presenting fairly in all material respects the financial condition and results of operations of KPP and its Subsidiaries on a consolidated basis in accordance with GAAP, subject to normal year-end audit adjustments and the absence of footnotes; (c) concurrently with the delivery of the financial statements referred to in subsections (a) and (b) above, a certificate of a Responsible Officer of the Borrower, (i) certifying as to whether a Default or Event of Default has occurred and is continuing on the date of such certificate, and if a Default or an Event of Default then has occurred and is continuing, specifying the details thereof and the action that the Borrower has taken or proposes to take with respect thereto, (ii) setting forth in reasonable detail calculations demonstrating compliance with Article VI and (iii) stating whether any change in GAAP or the application thereof affecting the calculations described in clause (ii) above has occurred since the date of the audited financial statements of KPP referred to in Section 4.4 and, if any change has occurred, specifying the effect of such change on the financial statements accompanying such certificate; (d) concurrently with the delivery of the financial statements referred to in subsection (a) above, a certificate of the accounting firm that reported on such financial statements stating whether it obtained any knowledge during the course of its examination of such financial statements of any Default or Event of Default (which certificate may be limited to the extent required by accounting rules or guidelines); (e) promptly after the same become publicly available, copies of all periodic and other reports, proxy statements and other materials filed with the Securities and Exchange Commission, or any Governmental Authority succeeding to any or all functions of said Commission, or with any national securities exchange, or distributed by KPP or the Borrower to its security holders generally; and (f) promptly following any request therefor, such other information regarding the results of operations, business affairs and financial condition of KPP, the Borrower or of their respective Subsidiaries as the Administrative Agent or any Lender may reasonably request. Section 5.2. Notices of Material Events. The Borrower will furnish to the Administrative Agent and each Lender prompt written notice of the following, in each case, accompanied by a written statement of a Responsible Officer of the Borrower setting forth the details of the event or development requiring such notice and any action taken or proposed to be taken with respect thereto: (a) the occurrence of any Default or Event of Default; (b) the filing or commencement of any action, suit or proceeding by or before any arbitrator or Governmental Authority against or, to the knowledge of the Borrower, affecting any Loan Party or any Subsidiary of any Loan Party that, if adversely determined, could reasonably be expected to result in a Material Adverse Effect; (c) the occurrence of any event or any other development by which any Loan Party or any Subsidiary of any Loan Party (i) fails to comply with any Environmental Law or to obtain, maintain or comply with any permit, license or other approval required under any Environmental Law, (ii) becomes subject to any Environmental Liability, (iii) receives notice of any claim with respect to any Environmental Liability, or (iv) becomes aware of any basis for any Environmental Liability and in each of the preceding clauses, which individually or in the aggregate, could reasonably be expected to result in a Material Adverse Effect; (d) the occurrence of any ERISA Event that alone, or together with any other ERISA Events that have occurred, could reasonably be expected to result in liability of KPP and its Subsidiaries in an aggregate amount exceeding $5,000,000; and (e) any other development that results in, or could reasonably be expected to result in, a Material Adverse Effect. Section 5.3. Existence; Conduct of Business. KPP will, and will cause each of its Subsidiaries to, do or cause to be done all things necessary to preserve, renew and maintain in full force and effect its legal existence and its respective rights, licenses, permits, privileges, franchises, patents, copyrights, trademarks and trade names material to the conduct of its business and will continue to engage in the same business as presently conducted or such other businesses that are reasonably related thereto; provided, that nothing in this Section shall prohibit any merger, consolidation, liquidation or dissolution permitted under Section 7.3. Section 5.4. Compliance with Laws, Etc. KPP will, and will cause each of its Subsidiaries to, comply with all laws, rules, regulations and requirements of any Governmental Authority applicable to its properties, except where the failure to do so, either individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect. Section 5.5. Payment of Obligations. KPP will, and will cause each of its Subsidiaries to, pay and discharge at or before maturity, all of its obligations and liabilities (including without limitation all tax liabilities and claims that could result in a statutory Lien) before the same shall become delinquent or in default, except where (i) the validity or amount thereof is being contested in good faith by appropriate proceedings, (ii) KPP or such Subsidiary has set aside on its books adequate reserves with respect thereto in accordance with GAAP and (iii) the failure to make payment pending such contest could not reasonably be expected to result in a Material Adverse Effect. Section 5.6. Books and Records. KPP will, and will cause each of its Subsidiaries to, keep proper books of record and account in which full, true and correct entries shall be made of all dealings and transactions in relation to its business and activities to the extent necessary to prepare the consolidated financial statements of Borrower in conformity with GAAP. Section 5.7. Visitation, Inspection, Etc. KPP will, and will cause each of its Subsidiaries to, permit any representative of the Administrative Agent or any Lender, to visit and inspect its properties, to examine its books and records and to make copies and take extracts therefrom, and to discuss its affairs, finances and accounts with any of its officers and with its independent certified public accountants, all at such reasonable times and as often as the Administrative Agent or any Lender may reasonably request after reasonable prior notice to KPP; provided, however, if an Event of Default has occurred and is continuing, no prior notice shall be required. Section 5.8. Maintenance of Properties; Insurance. KPP will, and will cause each of its Subsidiaries to, (i) keep and maintain all property material to the conduct of its business in good working order and condition, except for ordinary wear and tear and except where the failure to do so, either individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect and (ii) maintain with financially sound and reputable insurance companies, insurance with respect to its properties and business, and the properties and business of its Subsidiaries, against loss or damage of the kinds customarily insured against by companies in the same or similar businesses operating in the same or similar locations. Section 5.9. Use of Proceeds. The Borrower will use the proceeds of all Loans to finance the Acquisition and up to $10,000,000 of the proceeds for other general corporate purposes of the Borrower and its Subsidiaries, including without limitation replenishment of cash used to finance the Prior Acquisition. No part of the proceeds of any Loan will be used, whether directly or indirectly, for any purpose that would violate any rule or regulation of the Board of Governors of the Federal Reserve System, including Regulation T, U or X. Section 5.10. Additional Subsidiaries. If any additional Significant Subsidiary (other than any Excluded Subsidiary and any Foreign Subsidiary) is acquired or formed after the date hereof, KPP will, within ten business days after such Significant Subsidiary is acquired or formed, notify the Administrative Agent and the Lenders thereof and will cause such Significant Subsidiary to become a Guarantor by executing agreements in the form of Annex I to Exhibit C and will cause such Significant Subsidiary to deliver simultaneously therewith such certificates, documents, opinions of counsel and other information regarding such Guarantor and the enforceability against such Guarantor of the Subsidiary Guarantee Agreement as the Administrative Agent may reasonably request. Article VI FINANCIAL COVENANTS KPP and the Borrower (as applicable) covenant and agree that so long as any principal of or interest on the Bridge Loan remains unpaid or any other amount payable hereunder remains unpaid: Section 6.1. Funded Debt to EBITDA. KPP and its Subsidiaries will maintain, as of the end of each fiscal quarter of KPP, a ratio of Consolidated Funded Debt to Consolidated EBITDA of not more than 4.25 to 1.00, measured, in each case, for the four-fiscal quarter period ending on each date of such determination. Section 6.2. Consolidated EBITDA to Consolidated Interest Expense. KPP and its Subsidiaries will maintain, as of the end of each fiscal quarter of KPP, a ratio of Consolidated EBITDA to Consolidated Interest Expense of not less than 3.00 to 1.00, measured, in each case, for the four-fiscal quarter period ending on each date of such determination. Section 6.3. Consolidated Net Worth. KPP will not permit its Consolidated Net Worth at any time to be less than an amount equal to 80% of the Consolidated Net Worth as at December 31, 1999, plus 80% of the Net Cash Proceeds of any Equity Event by KPP or any of its Subsidiaries. Article VII NEGATIVE COVENANTS KPP and the Borrower (as applicable) covenant and agree that so long as any principal of or interest on the Bridge Loan remains unpaid or any other amount payable hereunder remains unpaid: Section 7.1. Indebtedness. KPP will not, and will not permit any of its Subsidiaries to, create, incur, assume or suffer to exist any Indebtedness, except: (a) Indebtedness created pursuant to the Loan Documents; (b) Indebtedness created pursuant to the Revolving Credit Agreement and any Guarantees of such Indebtedness by any Guarantors; and (c) other Indebtedness of KPP and the Borrower, the incurrence of which does not otherwise result in the occurrence of a Default or an Event of Default. Section 7.2. Negative Pledge. KPP will not, and will not permit any of its Subsidiaries to, create, incur, assume or suffer to exist any Lien on any of its assets or property now owned or hereafter acquired, except: (a) Permitted Encumbrances; (b) any Liens on any property or asset of KPP or any Subsidiary of KPP existing on the date hereof set forth on Schedule 7.2; provided, that such Lien shall not apply to any other property or asset of KPP or any such Subsidiary; (c) purchase money Liens upon or in any fixed or capital assets to secure the purchase price or the cost of construction or improvement of such fixed or capital assets or to secure Indebtedness incurred solely for the purpose of financing the acquisition, construction or improvement of such fixed or capital assets (including Liens securing Capital Lease Obligations); provided, that (i) such Lien attaches to such asset concurrently or within 90 days after the acquisition, improvement or completion of the construction thereof; (ii) such Lien does not extend to any other asset; and (iii) the Indebtedness secured thereby does not exceed the cost of acquiring, constructing or improving such fixed or capital assets; (d) any Lien (i) existing on any asset of any Person at the time such Person becomes a Subsidiary of KPP, (ii) existing on any asset of any Person at the time such Person is merged with or into KPP or any Subsidiary of KPP or (iii) existing on any asset prior to the acquisition thereof by KPP or any Subsidiary of KPP; provided, that any such Lien was not created in the contemplation of any of the foregoing and any such Lien secures only those obligations which it secures on the date that such Person becomes a Subsidiary or the date of such merger or the date of such acquisition; and (e) extensions, renewals, or replacements of any Lien referred to in subsections (a) through (d) of this Section; provided, that the principal amount of the Indebtedness secured thereby is not increased and that any such extension, renewal or replacement is limited to the assets originally encumbered thereby. Section 7.3. Fundamental Changes. (a) KPP will not, and will not permit any Subsidiary to, merge into or consolidate into any other Person, or permit any other Person to merge into or consolidate with it, or sell, lease, transfer or otherwise dispose of (in a single transaction or a series of transactions) all or substantially all of its assets (in each case, whether now owned or hereafter acquired) or all or substantially all of the stock of any of its Subsidiaries (in each case, whether now owned or hereafter acquired) or liquidate or dissolve; provided, that if at the time thereof and immediately after giving effect thereto, no Default or Event of Default shall have occurred and be continuing (i) any Subsidiary of the Borrower may merge with a Person if such Subsidiary is the surviving Person, (ii) any Subsidiary may merge into another Subsidiary; provided, that if any party to such merger is a Guarantor, the Guarantor shall be the surviving Person, (iii) any Subsidiary of the Borrower may sell, transfer, lease or otherwise dispose of all or substantially all of its assets to the Borrower or to a Guarantor and (iv) any Subsidiary (other than a Guarantor) may liquidate or dissolve if the Borrower determines in good faith that such liquidation or dissolution is in the best interests of the Borrower and is not materially disadvantageous to the Lenders. (b) KPP will not, and will not permit any of its Subsidiaries to, engage in any business other than businesses of the type conducted by KPP and its Subsidiaries on the date hereof and businesses reasonably related thereto. Section 7.4. Investments, Loans, Etc. KPP will not, and will not permit any of its Subsidiaries to, purchase, hold or acquire (including pursuant to any merger with any Person that was not a wholly-owned Subsidiary prior to such merger), any common stock, evidence of indebtedness or other securities (including any option, warrant, or other right to acquire any of the foregoing) of, make or permit to exist any loans or advances to, Guarantee any obligations of, or make or permit to exist any investment or any other interest in, any other Person or purchase or otherwise acquire (in one transaction or a series of transactions) any assets of any other Person (all of the foregoing being collectively called "Investments"), except: (a) Investments (other than Permitted Investments) existing on the date hereof (including Investments in Subsidiaries); (b) Permitted Investments and the Investment contemplated by the Acquisition Agreement; (c) Guarantees constituting Indebtedness permitted by Section 7.1; provided, that the aggregate principal amount of Indebtedness of Subsidiaries that are not Guarantors that are Guaranteed by any Loan Party shall be subject to the limitation set forth in subsection (d) hereof; (d) the Acquisition, to the extent that the aggregate purchase price paid does not exceed $150,000,000; (e) Investments made by KPP or any Subsidiary of KPP (in each case, whether directly or indirectly, through one or more subsidiaries of KPP or one or more Excluded Affiliates), provided, that for any such Investment of at least $50,000,000 individually, and for each such Investment of at least $10,000,000 individually if the aggregate of all such Investments during any fiscal year of KPP shall have exceeded $75,000,000, KPP shall first have provided to the Administrative Agent financial statements of KPP and its consolidated Subsidiaries demonstrating, to the reasonable satisfaction of the Administrative Agent, that after giving pro forma effect to such Investment, KPP shall continue to be in compliance with Article VI hereof; (f) loans or advances to employees, officers or directors of KPP or any Subsidiary of KPP in the ordinary course of business for travel, relocation and related expenses; provided, however, that the aggregate amount of all such loans and advances does not exceed $1,000,000 at any time; and (g) pursuant to Hedging Agreements permitted by Section 7.10. Section 7.5. Restricted Payments. KPP will not, and will not permit its Subsidiaries to, make or agree to make, directly or indirectly, any Distribution, or make any payment on account of, or set apart assets for a sinking or other analogous fund for, the purchase, redemption, retirement, defeasance or other acquisition of, any Equity Interests or Indebtedness subordinated to the Obligations of the Borrower or any options, warrants, or other rights to purchase Equity Interests or such Indebtedness, whether now or hereafter outstanding (each, a "Restricted Payment"), except for (i) Distributions payable by KPP solely in its Equity Interests, (ii) Restricted Payments made by any Subsidiary of KPP to KPP or to another Subsidiary of KPP and (iii) cash Distributions paid on, and cash redemptions of, the Equity Interests of KPP or the Borrower; provided, that no Default or Event of Default has occurred and is continuing at the time such Distribution is paid or redemption is made. Section 7.6. Sale of Assets. KPP will not, and will not permit any of its Subsidiaries (other than any Excluded Subsidiary) to, convey, sell, lease, assign, transfer or otherwise dispose of, any of its assets, business or property, whether now owned or hereafter acquired, other than in compliance with Section 2.9(b), and in any event, KPP will not, and will not permit any of its Subsidiaries (other than any Excluded Subsidiary), to consummate any Asset Disposition without the prior written consent of the Required Lenders. Section 7.7. Transactions with Affiliates. KPP will not, and will not permit any of its Subsidiaries to, sell, lease or otherwise transfer any property or assets to, or purchase, lease or otherwise acquire any property or assets from, or otherwise engage in any other transactions with, any of its Affiliates, except (i) in the ordinary course of business at prices and on terms and conditions not less favorable to KPP or such Subsidiary than could be obtained on an arm's-length basis from unrelated third parties, (ii) transactions between or among KPP and its wholly-owned Subsidiaries not involving any other Affiliates, and (iii) any Restricted Payment permitted by Section 7.5. Section 7.8. Restrictive Agreements. KPP will not, and will not permit any Subsidiary of KPP (other than any Excluded Subsidiary) to, directly or indirectly, enter into, incur or permit to exist any agreement (i) that prohibits, restricts or imposes any condition upon the ability of any Subsidiary of KPP to make Distributions with respect to its Equity Interests, to make or repay loans or advances to Borrower or any Guarantor, to guarantee Indebtedness of Borrower or any Guarantor or to transfer any of its property or assets to Borrower or any Guarantor, or (ii) that contains any prohibitions or restrictions on KPP or such Subsidiary that are more restrictive than the covenants contained in this Agreement; provided, that (A) the foregoing shall not apply to restrictions or conditions imposed by law or by this Agreement, any other Loan Document, the Revolving Credit Agreement or the Senior Notes Indenture, and (B) the foregoing shall not apply to customary restrictions and conditions contained in agreements relating to the sale of any Subsidiary of KPP pending such sale, provided such restrictions and conditions apply only to the Subsidiary that is sold and such sale is permitted hereunder. Section 7.9. Sale and Leaseback Transactions. KPP will not, and will not permit any of its Subsidiaries (other than any Excluded Subsidiary) to, enter into any arrangement, directly or indirectly, whereby it shall sell or transfer any property, real or personal, used or useful in its business, whether now owned or hereinafter acquired, and thereafter rent or lease such property or other property that it intends to use for substantially the same purpose or purposes as the property sold or transferred. Section 7.10. Hedging Agreements. KPP will not, and will not permit any of the Subsidiaries to, enter into any Hedging Agreement, other than Hedging Agreements entered into in the ordinary course of business to hedge or mitigate risks to which KPP or any such Subsidiary is exposed in the conduct of its business or the management of its liabilities. Solely for the avoidance of doubt, KPP acknowledges that a Hedging Agreement entered into for speculative purposes or of a speculative nature (which shall be deemed to include any Hedging Agreement under which KPP or any Subsidiary of KPP is or may become obliged to make any payment (A) in connection with the purchase by any third party of any common stock or any Indebtedness or (B) as a result of changes in the market value of any common stock or any Indebtedness) is not a Hedging Agreement entered into in the ordinary course of business to hedge or mitigate risks. Section 7.11. Amendment to Material Documents. KPP will not, and will not permit any Subsidiary of KPP to, amend, modify or waive any of its rights in a manner materially adverse to the Lenders under (i) its Constituent Documents or (ii) the Acquisition Agreement or the other Acquisition Documents. Section 7.12. Accounting Changes. KPP will not, and will not permit any Subsidiary of KPP to, make any significant change in accounting treatment or reporting practices, except as required by GAAP, or change the fiscal year of KPP or of any such Subsidiary, except to change the fiscal year of any such Subsidiary to conform its fiscal year to that of KPP. Article VIII KPP GUARANTEE The Borrower is a direct and wholly-owned subsidiary of KPP, and KPP will derive substantial benefit from the making of the Loans by the Lenders. As consideration therefor and in order to induce the Lenders to make Loans, KPP agrees as follows: Section 8.1. Guarantee. KPP unconditionally guarantees, jointly with the other Guarantors and severally, as a primary obligor and not merely as a surety, (i) the due and punctual payment of (A) the principal of and premium, if any, and interest (including interest accruing during the pendency of any bankruptcy, insolvency, receivership or other similar proceeding, regardless of whether allowed or allowable in such proceeding) on the Loans, when and as due, whether at maturity, by acceleration, upon one or more dates set for prepayment or otherwise, and (B) all other monetary obligations, including fees, costs, expenses and indemnities, whether primary, secondary, direct, contingent, fixed or otherwise (including monetary obligations incurred during the pendency of any bankruptcy, insolvency, receivership or other similar proceeding, regardless of whether allowed or allowable in such proceeding), of the Loan Parties to the Administrative Agent and the Lenders under this Agreement and the other Loan Documents, (ii) the due and punctual performance of all covenants, agreements, obligations and liabilities of the other Loan Parties under or pursuant to this Agreement and the other Loan Documents; and (iii) the due and punctual payment and performance of all obligations of the Borrower, monetary or otherwise, under each Hedging Agreement entered into with a counterparty that was a Lender or an Affiliate of a Lender at the time such Hedging Agreement was entered into (all the monetary and other obligations referred to in the preceding clauses (i) through (iii) being collectively called the "Guaranteed Obligations"). KPP further agrees that the Guaranteed Obligations may be extended or renewed, in whole or in part, without notice to or further assent from it, and that it will remain bound upon its guarantee notwithstanding any extension or renewal of any Guaranteed Obligation. Section 8.2. Guaranteed Obligations Not Waived. To the fullest extent permitted by applicable law, KPP waives presentment to, demand of payment from and protest to the other Loan Parties of any of the Guaranteed Obligations, and also waives notice of acceptance of its guarantee and notice of protest for nonpayment. To the fullest extent permitted by applicable law, the obligations of KPP hereunder shall not be affected by (i) the failure of the Administrative Agent or any Lender to assert any claim or demand or to enforce or exercise any right or remedy against the Borrower or any other Guarantor under the provisions of this Agreement, any other Loan Document or otherwise, (ii) any rescission, waiver, amendment or modification of, or any release from any of the terms or provisions of, this Agreement, any other Loan Document or any other agreement, including with respect to any other Guarantor under the Subsidiary Guarantee Agreement, or (iii) the failure to perfect any security interest in, or the release of, any of the security held by or on behalf of the Administrative Agent or any Lender. Section 8.3. Guarantee of Payment. KPP further agrees that its guarantee constitutes a guarantee of payment when due and not of collection, and waives any right to require that any resort be had by the Administrative Agent or any Lender to any of the security held for payment of the Guaranteed Obligations or to any balance of any deposit account or credit on the books of the Administrative Agent or any Lender in favor of the Borrower or any other Person. Section 8.4. No Discharge or Diminishment of Guarantee. The obligations of KPP hereunder shall not be subject to any reduction, limitation, impairment or termination for any reason (other than the indefeasible payment in full in cash of the Guaranteed Obligations), including any claim of waiver, release, surrender, alteration or compromise of any of the Guaranteed Obligations, and shall not be subject to any defense or setoff, counterclaim, recoupment or termination whatsoever by reason of the invalidity, illegality or unenforceability of the Guaranteed Obligations or otherwise. Without limiting the generality of the foregoing, the obligations of KPP hereunder shall not be discharged or impaired or otherwise affected by the failure of the Administrative Agent or any Lender to assert any claim or demand or to enforce any remedy under this Agreement, any other Loan Document or any other agreement, by any waiver or modification of any provision of any thereof, by any default, failure or delay, willful or otherwise, in the performance of the Guaranteed Obligations, or by any other act or omission that may or might in any manner or to any extent vary the risk of KPP or that would otherwise operate as a discharge of a guarantor as a matter of law or equity (other than the indefeasible payment in full in cash of all the Guaranteed Obligations). Section 8.5. Defenses of Borrower Waived. To the fullest extent permitted by applicable law, KPP waives any defense based on or arising out of any defense of any Loan Party or the unenforceability of the Guaranteed Obligations or any part thereof from any cause, or the cessation from any cause of the liability of any Loan Party, other than the final and indefeasible payment in full in cash of the Guaranteed Obligations. The Administrative Agent and the Lenders may, at their election, foreclose on any security held by one or more of them by one or more judicial or nonjudicial sales, accept an assignment of any such security in lieu of foreclosure, compromise or adjust any part of the Guaranteed Obligations, make any other accommodation with the other Loan Parties or any other guarantor, without affecting or impairing in any way the liability of KPP hereunder except to the extent the Guaranteed Obligations have been fully, finally and indefeasibly paid in cash. Pursuant to applicable law, KPP waives any defense arising out of any such election even though such election operates, pursuant to applicable law, to impair or to extinguish any right of reimbursement or subrogation or other right or remedy of KPP against the Borrower or any other Guarantor or guarantor, as the case may be, or any security. Section 8.6. Agreement to Pay; Subordination. In furtherance of the foregoing and not in limitation of any other right that the Administrative Agent or any Lender has at law or in equity against KPP by virtue hereof, upon the failure of the Borrower or any other Loan Party to pay any Guaranteed Obligation when and as the same shall become due, whether at maturity, by acceleration, after notice of prepayment or otherwise, KPP hereby promises to and will forthwith pay, or cause to be paid, to the Administrative Agent for the benefit of the Lenders in cash the amount of such unpaid Guaranteed Obligations. Upon payment by KPP of any sums to the Administrative Agent, all rights of KPP against any Loan Party arising as a result thereof by way of right of subrogation, contribution, reimbursement, indemnity or otherwise shall in all respects be subordinate and junior in right of payment to the prior indefeasible payment in full in cash of all the Guaranteed Obligations. In addition, any indebtedness of any other Loan Party now or hereafter held by KPP is hereby subordinated in right of payment to the prior payment in full in cash of the Guaranteed Obligations. If any amount shall erroneously be paid to KPP on account of (i) such subrogation, contribution, reimbursement, indemnity or similar right or (ii) any such indebtedness of such Loan Party, such amount shall be held in trust for the benefit of the Administrative Agent and the Lenders and shall forthwith be paid to the Administrative Agent to be credited against the payment of the Guaranteed Obligations, whether matured or unmatured, in accordance with the terms of the Loan Documents. Section 8.7. Information. KPP assumes all responsibility for being and keeping itself informed of the other Loan Parties' financial condition and assets, and of all other circumstances bearing upon the risk of nonpayment of the Guaranteed Obligations and the nature, scope and extent of the risks that KPP assumes and incurs hereunder, and agrees that none of the Administrative Agent or the Lenders will have any duty to advise KPP of information known to it or any of them regarding such circumstances or risks. Section 8.8. Representations and Warranties. KPP represents and warrants as to itself that all representations and warranties relating to it contained in this Agreement are true and correct. Section 8.9. Termination. The guarantees made hereunder (i) shall terminate when all the Guaranteed Obligations have been paid in full in cash, and (ii) shall continue to be effective or be reinstated, as the case may be, if at any time payment, or any part thereof, of any Guaranteed Obligation is rescinded or must otherwise be restored by any Lender or any Guarantor upon the bankruptcy or reorganization of the Borrower, any Guarantor or otherwise. In connection with the foregoing, the Administrative Agent shall execute and deliver to KPP or KPP's designee, at KPP's expense, any documents or instruments that KPP shall reasonably request from time to time to evidence such termination and release. Article IX EVENTS OF DEFAULT Section 9.1. Events of Default. If any of the following events (each an "Event of Default") shall occur: (a) the Borrower shall fail to pay any principal of the Bridge Loan when and as the same shall become due and payable, whether at the due date thereof or at a date fixed for prepayment or otherwise; or (b) the Borrower shall fail to pay any interest on the Bridge Loan or any other amount (other than an amount payable under subsection (a) of this Article) payable under this Agreement or any other Loan Document, when and as the same shall become due and payable, and such failure shall continue unremedied for a period of 3 Business Days; or (c) any representation or warranty made or deemed made by or on behalf of any Loan Party in or in connection with this Agreement or any other Loan Document (including the Schedules attached thereto) and any amendments or modifications hereof or waivers hereunder, or in any certificate, report, financial statement or other document submitted to the Administrative Agent or the Lenders by any Loan Party or any representative of any Loan Party pursuant to or in connection with this Agreement or any other Loan Document shall prove to be incorrect in any material respect when made or deemed made or submitted; or (d) the Borrower or KPP, as applicable, shall fail to observe or perform any covenant or agreement contained in Section 5.2(a) or 5.3 (with respect to KPP's or the Borrower's existence) or Article VI or VII; or (e) any Loan Party shall fail to observe or perform any covenant or agreement contained in any Loan Document (other than those referred to in subsections (a), (b) and (d) above), and such failure shall remain unremedied for 30 days after the earlier of (i) any officer of the Borrower becomes aware of such failure, or (ii) notice thereof shall have been given to the Borrower by the Administrative Agent or any Lender; or (f) the Borrower, KPP or any Significant Affiliate (whether as primary obligor or as guarantor or other surety) shall fail to pay any principal of or premium or interest on any Material Indebtedness that is outstanding, when and as the same shall become due and payable (whether at 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 evidencing such Indebtedness; or any other event shall occur or condition shall exist under any agreement or instrument relating to such Indebtedness 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 permit the acceleration of, the maturity of such Indebtedness; or any such Indebtedness shall be declared to be due and payable; or required to be prepaid or redeemed (other than by a regularly scheduled required prepayment or redemption), purchased or defeased, or any offer to prepay, redeem, purchase or defease such Indebtedness shall be required to be made, in each case prior to the stated maturity thereof; or (g) the Borrower, KPP or any Significant Affiliate shall (i) commence a voluntary case or other proceeding or file any petition seeking liquidation, reorganization or other relief under any federal, state or foreign bankruptcy, insolvency or other similar law now or hereafter in effect or seeking the appointment of a custodian, trustee, receiver, liquidator or other similar official of it or any substantial part of its property, (ii) consent to the institution of, or fail to contest in a timely and appropriate manner, any proceeding or petition described in subsection (i) of this Section, (iii) apply for or consent to the appointment of a custodian, trustee, receiver, liquidator or other similar official for the Borrower, KPP or any such Significant Affiliate or for a substantial part of its assets, (iv) file an answer admitting the material allegations of a petition filed against it in any such proceeding, (v) make a general assignment for the benefit of creditors, or (vi) take any action for the purpose of effecting any of the foregoing; or (h) an involuntary proceeding shall be commenced or an involuntary petition shall be filed seeking (i) liquidation, reorganization or other relief in respect of the Borrower, KPP or any Significant Affiliate or its debts, or any substantial part of its assets, under any federal, state or foreign bankruptcy, insolvency or other similar law now or hereafter in effect or (ii) the appointment of a custodian, trustee, receiver, liquidator or other similar official for the Borrower, KPP or any Significant Affiliate or for a substantial part of its assets, and in any such case, such proceeding or petition shall remain undismissed for a period of 60 days or an order or decree approving or ordering any of the foregoing shall be entered; or (i) the Borrower, KPP or any Significant Subsidiary shall become unable to pay, shall admit in writing its inability to pay, or shall fail to pay, its debts as they become due; or (j) an ERISA Event shall have occurred that, in the opinion of the Required Lenders, when taken together with other ERISA Events that have occurred, could reasonably be expected to result in liability to the Borrower and the Subsidiaries in an aggregate amount exceeding $5,000,000; or (k) any judgment or order for the payment of money in excess of $5,000,000 in the aggregate shall be rendered against the Borrower, KPP or any Significant Affiliate, and either (i) enforcement proceedings shall have been commenced by any creditor upon such judgment or order or (ii) there shall be a 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; or (l) any non-monetary judgment or order shall be rendered against the Borrower, KPP or any Significant Affiliate that could reasonably be expected to have a Material Adverse Effect, and there shall be a 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; or (m) a Change in Control shall occur or exist; or (n) any provision of the Subsidiary Guarantee Agreement shall for any reason cease to be valid and binding on, or enforceable against, any Guarantor, or any Guarantor shall so state in writing, or (a) any provision of Article VIII shall for any reason cease to be valid and binding on, or enforceable against KPP, or KPP shall so state in writing; Guarantor shall seek to terminate its obligations under the Loan Documents; or (o) an event, act, or condition shall occur which has, or could reasonably be expected to have, singly or in the aggregate with other such occurrences, a Material Adverse Effect; then, and in every such event (other than an event with respect to KPP or the Borrower described in subsection (g) or (h) of this Section) and at any time thereafter during the continuance of such event, the Administrative Agent may, and upon the written request of the Required Lenders shall, by notice to the Borrower, take any or all of the following actions, at the same or different times: (i) terminate the Commitments, whereupon the Commitment of each Lender shall terminate immediately; (ii) declare the principal of and any accrued interest on the Loans, and all other Obligations owing hereunder, to be, whereupon the same shall become due and payable immediately, without presentment, demand, protest or other notice of any kind, all of which are hereby waived by the Borrower and (iii) exercise all remedies contained in any other Loan Document; and that, if an Event of Default specified in either subsection (g) or (h) shall occur, the Commitments shall automatically terminate and the principal of the Loans then outstanding, together with accrued interest thereon, and all other Obligations shall automatically become due and payable, without presentment, demand, protest or other notice of any kind, all of which are hereby waived by the Borrower. Article X THE ADMINISTRATIVE AGENT Section 10.1. Appointment of Administrative Agent. Each Lender irrevocably appoints SunTrust Bank as the Administrative Agent and authorizes it to take such actions on its behalf and to exercise such powers as are delegated to the Administrative Agent under this Agreement and the other Loan Documents, together with all such actions and powers that are reasonably incidental thereto. The Administrative Agent may perform any of its duties hereunder by or through any one or more sub-agents appointed by the Administrative Agent. The Administrative Agent and any such sub-agent may perform any and all of its duties and exercise its rights and powers through their respective Related Parties. The exculpatory provisions set forth in this Article shall apply to any such sub-agent and the Related Parties of the Administrative Agent and any such sub-agent and shall apply to their respective activities in connection with the syndication of the credit facility provided for herein as well as activities as Administrative Agent. Section 10.2. Nature of Duties of Administrative Agent. The Administrative Agent shall not have any duties or obligations except those expressly set forth in this Agreement and the other Loan Documents. Without limiting the generality of the foregoing, (i) the Administrative Agent shall not be subject to any fiduciary or other implied duties, regardless of whether a Default or an Event of Default has occurred and is continuing, (ii) the Administrative Agent shall not have any duty to take any discretionary action or exercise any discretionary powers, except those discretionary rights and powers expressly contemplated by the Loan Documents that the Administrative Agent is required to exercise in writing by the Required Lenders (or such other number or percentage of the Lenders as shall be necessary under the circumstances as provided in Section 11.2), and (iii) except as expressly set forth in the Loan Documents, the Administrative Agent shall not have any duty to disclose, and shall not be liable for the failure to disclose, any information relating to the Borrower or any of its Subsidiaries that is communicated to or obtained by the Administrative Agent or any of its Affiliates in any capacity. The Administrative Agent shall not be liable for any action taken or not taken by it with the consent or at the request of the Required Lenders (or such other number or percentage of the Lenders as shall be necessary under the circumstances as provided in Section 11.2) or in the absence of its own gross negligence or willful misconduct. The Administrative Agent shall not be deemed to have knowledge of any Default or Event of Default unless and until written notice thereof is given to the Administrative Agent by the Borrower or any Lender, and the Administrative Agent shall not be responsible for or have any duty to ascertain or inquire into (A) any statement, warranty or representation made in or in connection with any Loan Document, (B) the contents of any certificate, report or other document delivered hereunder or thereunder or in connection herewith or therewith, (C) the performance or observance of any of the covenants, agreements, or other terms and conditions set forth in any Loan Document, (D) the validity, enforceability, effectiveness or genuineness of any Loan Document or any other agreement, instrument or document, or (E) the satisfaction of any condition set forth in Article III or elsewhere in any Loan Document, other than to confirm receipt of items expressly required to be delivered to the Administrative Agent. Section 10.3. Lack of Reliance on the Administrative Agent. Each of the Lenders acknowledges that it has, independently and without reliance upon the Administrative Agent or any other Lender and based on such documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Agreement. Each of the Lenders also acknowledges that it will, independently and without reliance upon the Administrative Agent or any other Lender and based on such documents and information as it has deemed appropriate, continue to make its own decisions in taking or not taking of any action under or based on this Agreement, any related agreement or any document furnished hereunder or thereunder. Section 10.4. Certain Rights of the Administrative Agent. If the Administrative Agent shall request instructions from the Required Lenders with respect to any action or actions (including the failure to act) in connection with this Agreement, the Administrative Agent shall be entitled to refrain from such act or taking such act, unless and until it shall have received instructions from such Lenders; and the Administrative Agent shall not incur liability to any Person by reason of so refraining. Without limiting the foregoing, no Lender shall have any right of action whatsoever against the Administrative Agent as a result of the Administrative Agent acting or refraining from acting hereunder in accordance with the instructions of the Required Lenders where required by the terms of this Agreement. Section 10.5. Reliance by Administrative Agent. The Administrative Agent shall be entitled to rely upon, and shall not incur any liability for relying upon, any notice, request, certificate, consent, statement, instrument, document or other writing believed by it to be genuine and to have been signed, sent or made by the proper Person. The Administrative Agent may also rely upon any statement made to it orally or by telephone and believed by it to be made by the proper Person and shall not incur any liability for relying thereon. The Administrative Agent may consult with legal counsel (including counsel for the Borrower), independent public accountants and other experts selected by it and shall not be liable for any action taken or not taken by it in accordance with the advice of such counsel, accountants or experts. Section 10.6. The Administrative Agent in its Individual Capacity. The bank serving as the Administrative Agent shall have the same rights and powers under this Agreement and any other Loan Document in its capacity as a Lender as any other Lender and may exercise or refrain from exercising the same as though it were not the Administrative Agent; and the terms "Lenders", "Required Lenders", "holders of Notes", or any similar terms shall, unless the context clearly otherwise indicates, include the Administrative Agent in its individual capacity. The bank acting as the Administrative Agent and its Affiliates may accept deposits from, lend money to, and generally engage in any kind of business with the Borrower or any Subsidiary or Affiliate of the Borrower as if it were not the Administrative Agent hereunder. Section 10.7. Successor Administrative Agent. (a) The Administrative Agent may resign at any time by giving notice thereof to the Lenders and the Borrower and may be removed at any time with or without cause by the Required Lenders. Upon any such resignation or removal, the Required Lenders shall have the right to appoint a successor Administrative Agent, subject to the approval by the Borrower provided that no Default or Event of Default shall have occurred and be continuing at such time. If no successor Administrative Agent shall have been so appointed, and shall have accepted such appointment within 30 days after the retiring Administrative Agent gives notice of resignation or the Required Lenders' removal of the Agent, then the retiring Administrative Agent may, on behalf of the Lenders, appoint a successor Administrative Agent, which shall be a commercial bank organized under the laws of the United States of America or any state thereof or a bank which maintains an office in the United States, having a combined capital and surplus of at least $500,000,000. (b) Upon the acceptance of its appointment as the Administrative Agent hereunder by a successor, such successor Administrative Agent shall thereupon succeed to and become vested with all the rights, powers, privileges and duties of the retiring Administrative Agent, and the retiring Administrative Agent shall be discharged from its duties and obligations under this Agreement and the other Loan Documents. If within 45 days after written notice is given of the retiring Administrative Agent's resignation or removal under this Section 10.7 no successor Administrative Agent shall have been appointed and shall have accepted such appointment, then on such 45th day (i) the retiring Administrative Agent's resignation or removal shall become effective, (ii) the retiring Administrative Agent shall thereupon be discharged from its duties and obligations under the Loan Documents and (iii) the Required Lenders shall thereafter perform all duties of the retiring Administrative Agent under the Loan Documents until such time as the Required Lenders appoint a successor Administrative Agent as provided above. After any retiring Administrative Agent's resignation hereunder, the provisions of this Article IX shall continue in effect for the benefit of such retiring Administrative Agent and its representatives and agents in respect of any actions taken or not taken by any of them while it was serving as the Administrative Agent. Section 10.8. Authorization to Execute other Loan Documents. Each Lender hereby authorizes the Administrative Agent to execute on behalf of all Lenders all Loan Documents other than this Agreement. Article XI MISCELLANEOUS Section 11.1. Notices. (a) Except in the case of notices and other communications expressly permitted to be given by telephone, all notices and other communications to any party herein to be effective shall be in writing and shall be delivered by hand or overnight courier service, mailed by certified or registered mail or sent by telecopy, as follows: To the Borrower: 2435 North Central Expressway Suite 700 Richardson, Texas 75080-2731 Attention: Ed Doherty Mark Jones Telecopy Number: (972) 699-1894 To KPP: 2435 North Central Expressway Suite 700 Richardson, Texas 75080-2731 Attention: Ed Doherty Mark Jones Telecopy Number: (972) 699-1894 To the Administrative Agent: SunTrust Bank 303 Peachtree Street, N. E. Atlanta, Georgia 30308 Attention: Mr. Justin Wilde Telecopy Number: ____________ To any other Lender: the address set forth in the Administrative Questionnaire Any party hereto may change its address or telecopy number for notices and other communications hereunder by notice to the other parties hereto. All such notices and other communications shall, when transmitted by overnight delivery, or faxed, be effective when delivered for overnight (next-day) delivery, or transmitted in legible form by facsimile machine, respectively, or if mailed, upon the third Business Day after the date deposited into the mails or if delivered, upon delivery; provided, that notices delivered to the Administrative Agent shall not be effective until actually received by such Person at its address specified in this Section 11.1. (b) Any agreement of the Administrative Agent and the Lenders herein to receive certain notices by telephone or facsimile is solely for the convenience and at the request of the Borrower. The Administrative Agent and the Lenders shall be entitled to rely on the authority of any Person purporting to be a Person authorized by the Borrower to give such notice and the Administrative Agent and Lenders shall not have any liability to the Borrower or other Person on account of any action taken or not taken by the Administrative Agent or the Lenders in reliance upon such telephonic or facsimile notice. The obligation of the Borrower to repay the Loans and all other Obligations hereunder shall not be affected in any way or to any extent by any failure of the Administrative Agent and the Lenders to receive written confirmation of any telephonic or facsimile notice or the receipt by the Administrative Agent and the Lenders of a confirmation which is at variance with the terms understood by the Administrative Agent and the Lenders to be contained in any such telephonic or facsimile notice. Section 11.2. Waiver; Amendments. (a) No failure or delay by the Administrative Agent or any Lender in exercising any right or power hereunder or any other Loan Document, and no course of dealing between the Borrower and the Administrative Agent or any Lender, shall operate as a waiver thereof, nor shall any single or partial exercise of any such right or power or any abandonment or discontinuance of steps to enforce such right or power, preclude any other or further exercise thereof or the exercise of any other right or power hereunder or thereunder. The rights and remedies of the Administrative Agent and the Lenders hereunder and under the other Loan Documents are cumulative and are not exclusive of any rights or remedies provided by law. No waiver of any provision of this Agreement or any other Loan Document or consent to any departure by the Borrower therefrom shall in any event be effective unless the same shall be permitted by subsection (b) of this Section, and then such waiver or consent shall be effective only in the specific instance and for the purpose for which given. Without limiting the generality of the foregoing, Disbursement of the Bridge Loan shall not be construed as a waiver of any Default or Event of Default, regardless of whether the Administrative Agent or any Lender may have had notice or knowledge of such Default or Event of Default at the time. (b) No amendment or waiver of any provision of this Agreement or the other Loan Documents, nor consent to any departure by any Loan Party therefrom, shall in any event be effective unless the same shall be in writing and signed by the Borrower and the Required Lenders or the Borrower and the Administrative Agent with the consent of the Required Lenders and then such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given; provided, that no amendment or waiver shall: (i) increase the Commitment of any Lender without the written consent of such Lender, (ii) reduce the principal amount of any Loan or reduce the rate of interest thereon, without the written consent of each Lender affected thereby, (iii) postpone the date fixed for any payment of any principal of, or interest on, any Loan hereunder or reduce the amount of, waive or excuse any such payment, or postpone the scheduled date for the termination or reduction of any Commitment, without the written consent of each Lender affected thereby, (iv) change Section 2.18(b) or (c) in a manner that would alter the pro rata sharing of payments required thereby, without the written consent of each Lender, (v) change any of the provisions of this Section or the definition of "Required Lenders" or any other provision hereof specifying the number or percentage of Lenders which are required to waive, amend or modify any rights hereunder or make any determination or grant any consent hereunder, without the consent of each Lender; (vi) release any guarantor or limit the liability of any such guarantor under any guaranty agreement, without the written consent of each Lender; (vii) release all or substantially all collateral (if any) securing any of the Obligations, without the written consent of each Lender; provided further, that no such agreement shall amend, modify or otherwise affect the rights, duties or obligations of the Administrative Agent without the prior written consent of the Administrative Agent. Notwithstanding the foregoing, any provision of this Agreement may be amended by an agreement in writing entered into by the Borrower, the Required Lenders and the Administrative Agent if (i) by the terms of such agreement the Commitment of each Lender not consenting to the amendment provided for therein shall terminate (but such Lender shall continue to be entitled to the benefits of Sections 2.15, 2.16, and 2.17 and 11.3) upon the effectiveness of such amendment and (ii) at the time such amendment becomes effective, each Lender not consenting thereto receives payment in full principal of and interest accrued on the Loan made by it and all other amounts owing to it or accrued for its account under this Agreement and is released from its obligations hereunder. Section 11.3. Expenses; Indemnification. (a) The Borrower shall pay (i) all reasonable, out-of-pocket costs and expenses of the Administrative Agent and its Affiliates, including the reasonable fees, charges and disbursements of counsel for the Administrative Agent and its Affiliates, in connection with the syndication of the credit facilities provided for herein, the preparation and administration of the Loan Documents and any amendments, modifications or waivers thereof (whether or not the transactions contemplated in this Agreement or any other Loan Document shall be consummated), and (ii) all out-of-pocket costs and expenses (including, without limitation, the reasonable fees, charges and disbursements of outside counsel and the allocated cost of inside counsel) incurred by the Administrative Agent or any Lender in connection with the enforcement or protection of its rights in connection with the Loan Documents, including its rights under this Section, or in connection with the Loans made hereunder, including all such out-of-pocket expenses incurred during any workout, restructuring or negotiations in respect of such Loans. (b) The Borrower shall indemnify the Administrative Agent, each Lender and each Related Party of any of the foregoing (each, an "Indemnitee") against, and hold each of them harmless from, any and all costs, losses, liabilities, claims, damages and related expenses, including the fees, charges and disbursements of any counsel for any Indemnitee, which may be incurred by or asserted against any Indemnitee arising out of, in connection with or as a result of (i) the execution or delivery of this Agreement or any other agreement or instrument contemplated hereby, including, without limitation, the Loan Documents, the Acquisition Documents and the Prior Acquisition Documents, the performance by the parties hereto of their respective obligations hereunder or thereunder or the consummation of any of the transactions contemplated hereby or thereby, including, without limitation, the Acquisition and the Prior Acquisition, (ii) any Loan, (iii) any actual or alleged presence or release of Hazardous Materials on or from any property owned by the Borrower or any Subsidiary or any Environmental Liability related in any way to the Borrower or any Subsidiary or (iv) any actual or prospective claim, litigation, investigation or proceeding relating to any of the foregoing, whether based on contract, tort or any other theory and regardless of whether any Indemnitee is a party thereto; provided, that the Borrower shall not be obligated to indemnify any Indemnitee for any of the foregoing arising out of such Indemnitee's gross negligence or willful misconduct as determined by a court of competent jurisdiction in a final and nonappealable judgment. (c) The Borrower shall pay, and hold the Administrative Agent and each of the Lenders harmless from and against, any and all present and future stamp, documentary, and other similar taxes with respect to this Agreement and any other Loan Documents, any collateral described therein, or any payments due thereunder, and save the Administrative Agent and each Lender harmless from and against any and all liabilities with respect to or resulting from any delay or omission to pay such taxes. (d) To the extent that the Borrower fails to pay any amount required to be paid to the Administrative Agent under subsection (a), (b) or (c) above, each Lender severally agrees to pay to the Administrative Agent such Lender's Pro Rata Share (determined as of the time that the unreimbursed expense or indemnity payment is sought) of such unpaid amount; provided, that the unreimbursed expense or indemnified payment, claim, damage, liability or related expense, as the case may be, was incurred by or asserted against the Administrative Agent, in its capacity as such. (e) To the extent permitted by applicable law, the Borrower, KPP and all Significant Affiliates shall not assert, and hereby waive, any claim against any Indemnitee, on any theory of liability, for special, indirect, consequential or punitive damages (as opposed to actual or direct damages) arising out of, in connection with or as a result of, this Agreement or any agreement or instrument contemplated hereby, the transactions contemplated therein, any Loan or the use of proceeds thereof. (f) All amounts due under this Section shall be payable promptly after written demand therefor. Section 11.4. Successors and Assigns. (a) The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns, except that the Borrower may not assign or transfer any of its rights hereunder without the prior written consent of each Lender (and any attempted assignment or transfer by the Borrower without such consent shall be null and void). (b) Any Lender may at any time assign to one or more assignees all or a portion of its rights and obligations under this Agreement and the other Loan Documents (including all or a portion of the Loans at the time owing to it); provided, that (i) except in the case of an assignment to a Lender or an Affiliate of a Lender, each of the Borrower and the Administrative Agent must give their prior written consent (which consent shall not be unreasonably withheld or delayed), (ii) except in the case of an assignment to a Lender or an Affiliate of a Lender or an assignment while an Event of Default has occurred and is continuing, the amount of the Loan of the assigning Lender subject to each such assignment (determined as of the date the Assignment and Acceptance with respect to such assignment is delivered to the Administrative Agent) shall not be less than $1,000,000 (unless the Borrower and the Administrative Agent shall otherwise consent), (iii) each partial assignment shall be made as an assignment of a proportionate part of all the assigning Lender's rights and obligations with respect to the Loans related thereto under this Agreement and the other Loan Documents, (iv) the assigning Lender and the assignee shall execute and deliver to the Administrative Agent an Assignment and Acceptance, together with a processing and recordation fee payable by the assigning Lender or the assignee (as determined between such Persons) in an amount equal to $1,000 and (v) such assignee, if it is not a Lender, shall deliver a duly completed Administrative Questionnaire to the Administrative Agent; provided, that any consent of the Borrower otherwise required hereunder shall not be required if an Event of Default has occurred and is continuing. Upon the execution and delivery of the Assignment and Acceptance and payment by such assignee to the assigning Lender of an amount equal to the purchase price agreed between such Persons, such assignee shall become a party to this Agreement and any other Loan Documents to which such assigning Lender is a party and, to the extent of such interest assigned by such Assignment and Acceptance, shall have the rights and obligations of a Lender under this Agreement, and the assigning Lender shall be released from its obligations hereunder to a corresponding extent (and, in the case of an Assignment and Acceptance covering all of the assigning Lender's rights and obligations under this Agreement, such Lender shall cease to be a party hereto but shall continue to be entitled to the benefits of Sections 2.15, 2.16 and 2.17 and 11.3. Upon the consummation of any such assignment hereunder, the assigning Lender, the Administrative Agent and the Borrower shall make appropriate arrangements to have new Notes issued if so requested by either or both the assigning Lender or the assignee. Any assignment or other transfer by a Lender that does not fully comply with the terms of this subsection (b) shall be treated for purposes of this Agreement as a sale of a participation pursuant to subsection (c) below. (c) Any Lender may at any time, without the consent of the Borrower or the Administrative Agent, sell participations to one or more banks or other entities (a "Participant") in all or a portion of such Lender's rights and obligations under this Agreement (including all or a portion of its Commitment and the Loans owing to it); provided, that (i) such Lender's obligations under this Agreement shall remain unchanged, (ii) such Lender shall remain solely responsible to the other parties hereto for the performance of its obligations hereunder, and (iii) the Borrower, the Administrative Agent and the other Lenders shall continue to deal solely and directly with such Lender in connection with such Lender's rights and obligations under this Agreement and the other Loan Documents. Any agreement between such Lender and the Participant with respect to such participation shall provide that such Lender shall retain the sole right and responsibility to enforce this Agreement and the other Loan Documents and the right to approve any amendment, modification or waiver of this Agreement and the other Loan Documents; provided, that such participation agreement may provide that such Lender will not, without the consent of the Participant, agree to any amendment, modification or waiver of this Agreement described in the first proviso of Section 11.2(b) that affects the Participant. The Borrower agrees that each Participant shall be entitled to the benefits of Sections 2.15, 2.16 and 2.17 to the same extent as if it were a Lender hereunder and had acquired its interest by assignment pursuant to subsection (b); provided, that no Participant shall be entitled to receive any greater payment under Section 2.15 or 2.17 than the applicable Lender would have been entitled to receive with respect to the participation sold to such Participant unless the sale of such participation is made with the Borrower's prior written consent. To the extent permitted by law, the Borrower agrees that each Participant shall be entitled to the benefits of Section 2.18 as though it were a Lender, provided, that such Participant agrees to share with the Lenders the proceeds thereof in accordance with Section 2.18 as fully as if it were a Lender hereunder. A Participant that would be a Foreign Lender if it were a Lender shall not be entitled to the benefits of Section 2.17 unless the Borrower is notified of such participation sold to such Participant and such Participant agrees, for the benefit of the Borrower, to comply with Section 2.17(e) as though it were a Lender hereunder. (d) Any Lender may at any time pledge or assign a security interest in all or any portion of its rights under this Agreement and its Notes (if any) to secure its obligations to a Federal Reserve Bank without complying with this Section; provided, that no such pledge or assignment shall release a Lender from any of its obligations hereunder or substitute any such pledgee or assignee for such Lender as a party hereto. (e) Notwithstanding anything to the contrary contained herein, any Lender (a "Granting Lender") may grant to a special purpose funding vehicle (an "SPV"), identified as such in writing from time to time by the Granting Lender to the Administrative Agent and the Borrower, the option to provide to the Borrower all or any part of the Bridge Loan that such Granting Lender would otherwise be obligated to make to the Borrower pursuant to this Agreement; provided, that (i) nothing herein shall constitute a commitment by any SPV to make the Bridge Loan or any portion thereof, and (ii) if an SPV elects not to exercise such option or otherwise fails to provide all or any part of any Loan, the Granting Lender shall be obligated to make its portion of the Bridge Loan on the Closing Date. The making of a Loan by an SPV hereunder shall utilize the Commitment of the Granting Lender to the same extent, and as if such Loan were made by such Granting Lender. Each party hereto hereby agrees that no SPV shall be liable for any indemnity or similar payment obligation under this Agreement (all liability for which shall remain with the Granting Lender). In furtherance of the foregoing, each party hereto hereby agrees (which agreement shall survive the termination of this Agreement) that, prior to the date that is one year and one day after the payment in full of all outstanding commercial paper or other senior indebtedness of any SPV, it will not institute against, or join any other person in instituting against, such SPV any bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings under the laws of the United States or any State. Notwithstanding anything to the contrary in this Section 11.4, any SPV may (i) with notice to, but without the prior written consent of, the Borrower and the Administrative Agent and without paying any processing fee therefor, assign all or a portion of its interests in any Loans to the Granting Lender or to any financial institutions (consented to by the Borrower and the Administrative Agent) providing liquidity and/or credit support to or for the account of such SPV to support the funding or maintenance of Loans and (ii) disclose on a confidential basis any non-public information relating to its Loans to any rating agency, commercial paper dealer or provider of any surety, guarantee or credit or liquidity enhancement to such SPV. As this Section 11.4(e) applies to any particular SPV, this Section may not be amended without the written consent of such SPV. Section 11.5. Governing Law; Jurisdiction; Consent to Service of Process. (a) This Agreement and the other Loan Documents shall be construed in accordance with and be governed by the law (without giving effect to the conflict of law principles thereof) of the State of New York. (b) Each of the Borrower and KPP hereby irrevocably and unconditionally submits, for itself and its property, to the non-exclusive jurisdiction of the United States District Court of the Southern District of New York, and of the Supreme Court of the State of New York sitting in New York County and any appellate court from any thereof, in any action or proceeding arising out of or relating to this Agreement or any other Loan Document or the transactions contemplated hereby or thereby, or for recognition or enforcement of any judgment, and each of the parties hereto hereby irrevocably and unconditionally agrees that all claims in respect of any such action or proceeding may be heard and determined in such New York state court or, to the extent permitted by applicable law, such Federal court. Each of the parties hereto agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law. Nothing in this Agreement or any other Loan Document shall affect any right that the Administrative Agent or any Lender may otherwise have to bring any action or proceeding relating to this Agreement or any other Loan Document against the Borrower or its properties in the courts of any jurisdiction. (c) Each of the Borrower and KPP irrevocably and unconditionally waives any objection which it may now or hereafter have to the laying of venue of any such suit, action or proceeding described in subsection (b) of this Section and brought in any court referred to in subsection (b) of this Section. Each of the parties hereto irrevocably waives, to the fullest extent permitted by applicable law, the defense of an inconvenient forum to the maintenance of such action or proceeding in any such court. (d) Each party to this Agreement irrevocably consents to the service of process in the manner provided for notices in Section 11.1. Nothing in this Agreement or in any other Loan Document will affect the right of any party hereto to serve process in any other manner permitted by law. Section 11.6. WAIVER OF JURY TRIAL. EACH PARTY HERETO IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (i) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, AND (ii) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION. Section 11.7. Right of Setoff. In addition to any rights now or hereafter granted under applicable law and not by way of limitation of any such rights, each Lender shall have the right, at any time or from time to time upon the occurrence and during the continuance of an Event of Default, without prior notice to the Borrower or KPP, any such notice being expressly waived by the Borrower and KPP to the extent permitted by applicable law, to set off and apply against all deposits (general or special, time or demand, provisional or final) of the Borrower or KPP at any time held or other obligations at any time owing by such Lender to or for the credit or the account of the Borrower or KPP against any and all Obligations held by such Lender, irrespective of whether such Lender shall have made demand hereunder and although such Obligations may be unmatured. Each Lender agrees promptly to notify the Administrative Agent and the Borrower after any such set-off and any application made by such Lender; provided, that the failure to give such notice shall not affect the validity of such set-off and application. Section 11.8. Counterparts; Integration. This Agreement may be executed by one or more of the parties to this Agreement on any number of separate counterparts (including by telecopy), and all of said counterparts taken together shall be deemed to constitute one and the same instrument. This Agreement and the other Loan Documents constitute the entire agreement among the parties hereto and thereto regarding the subject matters hereof and thereof and supersede all prior agreements and understandings, oral or written, regarding such subject matters. Section 11.9. Survival. All covenants, agreements, representations and warranties made by the Borrower and KPP herein and in the certificates or other instruments delivered in connection with or pursuant to this Agreement shall be considered to have been relied upon by the other parties hereto and shall survive the execution and delivery of this Agreement and the making of any Loans, regardless of any investigation made by any such other party or on its behalf and notwithstanding that the Administrative Agent or any Lender may have had notice or knowledge of any Default or incorrect representation or warranty at the time any credit is extended hereunder, and shall continue in full force and effect as long as the principal of or any accrued interest on any Loan or any other amount payable under this Agreement is outstanding and unpaid and so long as the Commitments have not expired or terminated. The provisions of Sections 2.3, 2.15, 2.16, 2.17 and 11.3 and Article X shall survive and remain in full force and effect regardless of the consummation of the transactions contemplated hereby, the repayment of the Loans, the expiration or termination of the Commitments or the termination of this Agreement or any provision hereof. All representations and warranties made herein, in the certificates, reports, notices, and other documents delivered pursuant to this Agreement shall survive the execution and delivery of this Agreement and the other Loan Documents, and the making of the Loans. Section 11.10. Severability. Any provision of this Agreement or any other Loan Document held to be illegal, invalid or unenforceable in any jurisdiction, shall, as to such jurisdiction, be ineffective to the extent of such illegality, invalidity or unenforceability without affecting the legality, validity or enforceability of the remaining provisions hereof or thereof; and the illegality, invalidity or unenforceability of a particular provision in a particular jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. Section 11.11. Confidentiality. Each of the Administrative Agent and each Lender agrees to take normal and reasonable precautions to maintain the confidentiality of any information designated in writing as confidential and provided to it by KPP or any Subsidiary of KPP, except that such information may be disclosed (i) to any Related Party of the Administrative Agent or any such Lender, including without limitation accountants, legal counsel and other advisors, (ii) to the extent required by applicable laws or regulations or by any subpoena or similar legal process, (iii) to the extent requested by any regulatory agency or authority, (iv) to the extent that such information becomes publicly available other than as a result of a breach of this Section 11.11, or which becomes available to the Administrative Agent or any Related Party of any of the foregoing on a nonconfidential basis from a source other than KPP or any Subsidiary of KPP, (v) in connection with the exercise of any remedy hereunder or any suit, action or proceeding relating to this Agreement or the enforcement of rights hereunder, and (vi) subject to provisions substantially similar to this Section 11.11, to any actual or prospective assignee or Participant, or (vii) with the consent of the Borrower. Any Person required to maintain the confidentiality of any information as provided for in this Section 11.11 shall be considered to have complied with its obligation to do so if such Person has exercised the same degree of care to maintain the confidentiality of such information as such Person would accord its own confidential information. Section 11.12. Syndication; Market Flex. Until completion of the syndication of the Commitments, as determined by SunTrust in its sole discretion, SunTrust shall be entitled, after the Closing Date and in consultation with the Borrower, to change the structure, terms or pricing of this Agreement and the other Loan Documents if SunTrust determines in its reasonable discretion that such changes are necessary or advisable in order to complete syndication, so long as any such change to the terms of this Agreement or any other Loan Document does not adversely affect any Lender (unless such Lender otherwise consents to such change). Section 11.13. Interest Rate Limitation. Notwithstanding anything herein to the contrary, if at any time the interest rate applicable to any Loan, together with all fees, charges and other amounts which may be treated as interest on such Loan under applicable law (collectively, the "Charges"), shall exceed the maximum lawful rate of interest (the "Maximum Rate") that may be contracted for, charged, taken, received or reserved by a Lender holding such Loan in accordance with applicable law, the rate of interest payable in respect of such Loan hereunder, together with all Charges payable in respect thereof, shall be limited to the Maximum Rate and, to the extent lawful, the interest and Charges that would have been payable in respect of such Loan but were not payable as a result of the operation of this Section 11.12 shall be cumulated and the interest and Charges payable to such Lender in respect of other Loans or periods shall be increased (but not above the Maximum Rate therefor) until such cumulated amount, together with interest thereon at the Federal Funds Rate to the date of repayment, shall have been received by such Lender. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their respective authorized officers as of the day and year first above written. KANEB PIPE LINE OPERATING PARTNERSHIP, L.P. By: KANEB PIPE LINE COMPANY, General Partner By: ---------------------------------- Name: Title: KANEB PIPE LINE PARTNERS, L.P. By: KANEB PIPE LINE COMPANY, General Partner By: -------------------------------------- Name: Title: SUNTRUST BANK, as Administrative Agent and as a Lender By: ------------------------------------------ Name: Title: Commitment: $75,000,000 BANK OF AMERICA, N.A., as a Lender By: ------------------------------------------ Name: Title: Commitment: $25,000,000 BANK ONE, N.A., as a Lender By: ------------------------------------------ Name: Title: Commitment: $50,000,000 Schedule I
APPLICABLE MARGIN - ------------------------------- ------------------------- ------------------------------ ----------------------------- - ------------------------------ Reference Applicable Margin for Applicable Margin for Base Pricing Ratings Eurodollar Loans Rate Loans Level - ------------------------------- ------------------------- ------------------------------ ----------------------------- - ------------------------------- ------------------------- ------------------------------ ----------------------------- I BBB- or higher and Baa3 1.25% 0% or higher per annum per annum - ------------------------------- ------------------------- ------------------------------ ----------------------------- - ------------------------------- ------------------------- ------------------------------ ----------------------------- II Lower than BBB- or 1.75% 0% lower than Baa3 or per annum per annum unrated - ------------------------------- ------------------------- ------------------------------ -----------------------------
If (i) the Applicable Margin is to be determined by the Reference Ratings, (ii) more than one Reference Rating is in effect, (iii) such Reference Ratings are "split ratings" and (iv) the ratings differential is one category, the lower of the two Reference Ratings will apply (e.g., BBB+/Ba1 results in Level II status.) If the Borrower does not have a Credit Rating, then the rate shall be established by reference to Level II. If the rating system of S&P or Moody's shall change, or if either rating agency shall cease to be in the business of rating corporate debt obligations, the Borrower, the Lenders and the Administrative Agent shall negotiate in good faith to amend this Schedule to reflect such changed rating system or the unavailability of ratings from such rating agency and, pending the effectiveness of any such amendment, the Applicable Margin shall be determined by reference to the Reference Ratings most recently in effect prior to any such change or cessation. If after a reasonable time the parties cannot agree to a mutually acceptable amendment, the Applicable Margin shall be determined by reference to Level II. Schedule II EXISTING INDEBTEDNESS $250,000,000 7.75% Senior Notes due 2012 The UK Facility SCHEDULE 4.5 ENVIRONMENTAL MATTERS None. SCHEDULE 4.15 SUBSIDIARIES, SIGNIFICANT SUBSIDIARIES, SIGNIFICANT AFFILIATES AND GUARANTORS [To be Provided by Borrower] Subsidiary or Affiliate State of Incorp. Entity Type KPP's ownership SCHEDULE 7.2 EXISTING LIENS None. FORM OF BRIDGE NOTE [$___________] [Date] FOR VALUE RECEIVED, the undersigned, KANEB PIPE LINE OPERATING PARTNERSHIP, L.P., a Delaware limited partnership (the "Borrower"), hereby promises to pay to [name of Lender] (the "Lender") or its registered assigns, at the office of SunTrust Bank ("SunTrust") at 303 Peachtree Street, N.E., Atlanta, Georgia 30308, on the Maturity Date (as defined in the Bridge Loan Agreement, dated as of November 1, 2002 (as the same may be amended, supplemented or otherwise modified from time to time, the "Loan Agreement"), among the Borrower, Kaneb Pipe Line Partners, L.P., the lenders from time to time party thereto and SunTrust, as administrative agent for the lenders, the lesser of the principal sum of [AMOUNT OF SUCH LENDER'S COMMITMENT] and the aggregate unpaid principal amount of the Loan made by the Lender to the Borrower pursuant to the Loan Agreement. in lawful money of the United States of America in immediately available funds, and to pay interest from the date hereof on the principal amount thereof from time to time outstanding, in like funds, at said office, at the rate or rates per annum and payable on such dates as provided in the Loan Agreement. In addition, should legal action or an attorney-at-law be utilized to collect any amount due hereunder, the Borrower further promises to pay all costs of collection, including the reasonable attorneys' fees of the Lender. The Borrower promises to pay interest, on demand, on any overdue principal and, to the extent permitted by law, overdue interest from their due dates at a rate or rates provided in the Loan Agreement. The Loan evidenced by this Note and all payments and prepayments of the principal hereof and the date thereof shall be endorsed by the holder hereof on the schedule attached hereto and made a part hereof or on a continuation thereof which shall be attached hereto and made a part hereof, or otherwise recorded by such holder in its internal records; provided, that the failure of the holder hereof to make such a notation or any error in such notation shall not affect the obligations of the Borrower to make the payments of principal and interest in accordance with the terms of this Note and the Loan Agreement. This Note is issued in connection with, and is entitled to the benefits of, the Loan Agreement which, among other things, contains provisions for the acceleration of the maturity hereof upon the happening of certain events, for prepayment of the principal hereof prior to the maturity hereof and for the amendment or waiver of certain provisions of the Loan Agreement, all upon the terms and conditions therein specified. THIS NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK AND ANY APPLICABLE LAWS OF THE UNITED STATES OF AMERICA. KANEB PIPE LINE OPERATING PARTNERSHIP, L.P. By: KANEB PIPE LINE COMPANY, General Partner By: ---------------------------------- Name: Title: LOANS AND PAYMENTS
- ---------------- ------------------------- --------------------- -------------------------- -------------------------- Date Amount and Payments of Unpaid Principal Name of Person Balance of Making Type of Loan Principal Note Notation - ---------------- ------------------------- --------------------- -------------------------- -------------------------- - ---------------- ------------------------- --------------------- -------------------------- -------------------------- - ---------------- ------------------------- --------------------- -------------------------- -------------------------- - ---------------- ------------------------- --------------------- -------------------------- -------------------------- - ---------------- ------------------------- --------------------- -------------------------- -------------------------- - ---------------- ------------------------- --------------------- -------------------------- -------------------------- - ---------------- ------------------------- --------------------- -------------------------- -------------------------- - ---------------- ------------------------- --------------------- -------------------------- -------------------------- - ---------------- ------------------------- --------------------- -------------------------- -------------------------- - ---------------- ------------------------- --------------------- -------------------------- -------------------------- - ---------------- ------------------------- --------------------- -------------------------- -------------------------- - ---------------- ------------------------- --------------------- -------------------------- -------------------------- - ---------------- ------------------------- --------------------- -------------------------- -------------------------- - ---------------- ------------------------- --------------------- -------------------------- -------------------------- - ---------------- ------------------------- --------------------- -------------------------- -------------------------- - ---------------- ------------------------- --------------------- -------------------------- -------------------------- - ---------------- ------------------------- --------------------- -------------------------- -------------------------- - ---------------- ------------------------- --------------------- -------------------------- -------------------------- - ---------------- ------------------------- --------------------- -------------------------- -------------------------- - ---------------- ------------------------- --------------------- -------------------------- -------------------------- - ---------------- ------------------------- --------------------- -------------------------- -------------------------- - ---------------- ------------------------- --------------------- -------------------------- -------------------------- - ---------------- ------------------------- --------------------- -------------------------- -------------------------- - ---------------- ------------------------- --------------------- -------------------------- -------------------------- - ---------------- ------------------------- --------------------- -------------------------- -------------------------- - ---------------- ------------------------- --------------------- -------------------------- -------------------------- - ---------------- ------------------------- --------------------- -------------------------- -------------------------- - ---------------- ------------------------- --------------------- -------------------------- -------------------------- - ---------------- ------------------------- --------------------- -------------------------- -------------------------- - ---------------- ------------------------- --------------------- -------------------------- -------------------------- - ---------------- ------------------------- --------------------- -------------------------- -------------------------- - ---------------- ------------------------- --------------------- -------------------------- --------------------------
FORM OF ASSIGNMENT AND ACCEPTANCE Reference is made to the Bridge Loan Agreement, dated as of November 1, 2002 (as amended and in effect on the date hereof, the "Loan Agreement"), among Kaneb Pipe Line Operating Partnership, L.P., a Delaware limited partnership, Kaneb Pipe Line Partners, L.P., a Delaware limited partnership, the Lenders from time to time party hereto and SunTrust Bank, as Administrative Agent for the Lenders. Terms defined in the Loan Agreement are used herein with the same meanings. The Assignor hereby sells and assigns, without recourse, to the Assignee designated below, and the Assignee hereby purchases and assumes, without recourse, from the Assignor, effective as of the Assignment Date set forth below, the interests set forth below (the "Assigned Interest") in the Assignor's rights and obligations under the Loan Agreement, including, without limitation, the interests set forth below in the Commitment of the Assignor on the Assignment Date and Loans owing to the Assignor that are outstanding on the Assignment Date, but excluding accrued interest to and excluding the Assignment Date. The Assignee hereby acknowledges receipt of a copy of the Loan Agreement. From and after the Assignment Date (i) the Assignee shall be a party to and be bound by the provisions of the Loan Agreement and, to the extent of the Assigned Interest, have the rights and obligations of a Lender thereunder and (ii) the Assignor shall, to the extent of the Assigned Interest, relinquish its rights and be released from its obligations under the Loan Agreement. This Assignment and Acceptance is being delivered to the Administrative Agent together with (i) if the Assignee is a Foreign Lender, any documentation required to be delivered by the Assignee pursuant to Section 2.17(e) of the Loan Agreement, duly completed and executed by the Assignee, and (ii) if the Assignee is not already a Lender under the Loan Agreement, an Administrative Questionnaire in the form supplied by the Administrative Agent, duly completed by the Assignee. The Assignee shall pay the fee payable to the Administrative Agent pursuant to Section 11.4(b) of the Loan Agreement. This Assignment and Acceptance shall be governed by and construed in accordance with the laws of the State of New York. Date of Assignment: Legal Name of Assignor: Legal Name of Assignee: Assignee's Address for Notices: Effective Date of Assignment: ("Assignment Date"):
Facility Principal Amount Percentage Assigned of Commitment (set forth, to at least 8 decimals, as a percentage of the aggregate Assigned Commitments of all Lenders thereunder) Loans: $ %
The terms set forth above are hereby agreed to: [Name of Assignor], as Assignor By ------------------------------------------------------- Name: Title: [Name of Assignee], as Assignee By ------------------------------------------------------- Name: Title: The undersigned hereby consents to the within assignment:1/ - Kaneb Pipe Line Operating Partnership, L.P. SunTrust Bank, as Administrative Agent: By Kaneb Pipe Line Company, LLC General Partner By By Name: Name: Title: Title: - --------------------------- 1/ Consents to be included to the extent required by Section 11.4(b) of the Loan Agreement. -- FORM OF SUBSIDIARY GUARANTEE AGREEMENT This SUBSIDIARY GUARANTEE AGREEMENT (the "Agreement"), dated as of [ ], among each of the Subsidiaries listed on Schedule I hereto (each such subsidiary individually, a "Guarantor" and collectively, the "Guarantors") of KANEB PIPE LINE OPERATING PARTNERSHIP, L.P., a Delaware limited partnership (the "Borrower"), and SUNTRUST BANK, a Georgia banking corporation as administrative agent (the "Administrative Agent") for the Lenders (as defined in the Loan Agreement referred to below). Reference is made to the Bridge Loan Agreement, dated as of November 1, 2002 (as amended, supplemented or otherwise modified from time to time, the "Loan Agreement"), among the Borrower, Kaneb Pipe Line Partners, L.P., the lenders from time to time party thereto (the "Lenders") and SunTrust Bank, as administrative agent for the Lenders (in such capacity, the "Administrative Agent"). Capitalized terms used herein and not defined herein shall have the meanings assigned to such terms in the Loan Agreement. The Lenders have agreed to make Loans to the Borrower pursuant to, and upon the terms and subject to the conditions specified in, the Loan Agreement. Each of the Guarantors is a direct or indirect Subsidiary of the Borrower and acknowledges that it will derive substantial benefit from the making of the Loans by the Lenders. The obligations of the Lenders to make Loans are conditioned on, among other things, the execution and delivery by the Guarantors of a Subsidiary Guarantee Agreement in the form hereof. As consideration therefor and in order to induce the Lenders to make Loans, the Guarantors are willing to execute this Subsidiary Guarantee Agreement. Accordingly, the parties hereto agree as follows: SECTION 1. Guarantee. Each Guarantor unconditionally guarantees, jointly with KPP and the other Guarantors and severally, as a primary obligor and not merely as a surety, (i) the due and punctual payment of (A) the principal of and premium, if any, and interest (including interest accruing during the pendency of any bankruptcy, insolvency, receivership or other similar proceeding, regardless of whether allowed or allowable in such proceeding) on the Loans, when and as due, whether at maturity, by acceleration, upon one or more dates set for prepayment or otherwise, and (B) all other monetary obligations, including fees, costs, expenses and indemnities, whether primary, secondary, direct, contingent, fixed or otherwise (including monetary obligations incurred during the pendency of any bankruptcy, insolvency, receivership or other similar proceeding, regardless of whether allowed or allowable in such proceeding), of the Loan Parties to the Administrative Agent and the Lenders under the Loan Agreement and the other Loan Documents, (ii) the due and punctual performance of all covenants, agreements, obligations and liabilities of the Loan Parties under or pursuant to the Loan Agreement and the other Loan Documents; and (iii) the due and punctual payment and performance of all obligations of the Borrower, monetary or otherwise, under each Hedging Agreement entered into with a counterparty that was a Lender or an Affiliate of a Lender at the time such Hedging Agreement was entered into (all the monetary and other obligations referred to in the preceding clauses (i) through (iii) being collectively called the "Obligations"). Each Guarantor further agrees that the Obligations may be extended or renewed, in whole or in part, without notice to or further assent from it, and that it will remain bound upon its guarantee notwithstanding any extension or renewal of any Obligation. SECTION 2. Obligations Not Waived. To the fullest extent permitted by applicable law, each Guarantor waives presentment to, demand of payment from and protest to the other Loan Parties of any of the Obligations, and also waives notice of acceptance of its guarantee and notice of protest for nonpayment. To the fullest extent permitted by applicable law, the obligations of each Guarantor hereunder shall not be affected by (i) the failure of the Administrative Agent or any Lender to assert any claim or demand or to enforce or exercise any right or remedy against the Borrower or any other Guarantor under the provisions of the Loan Agreement, any other Loan Document or otherwise, (ii) any rescission, waiver, amendment or modification of, or any release from any of the terms or provisions of, this Agreement, any other Loan Document or any other agreement, including with respect to any other Guarantor under this Agreement, or (iii) the failure to perfect any security interest in, or the release of, any of the security held by or on behalf of the Administrative Agent or any Lender. SECTION 3. Guarantee of Payment. Each Guarantor further agrees that its guarantee constitutes a guarantee of payment when due and not of collection, and waives any right to require that any resort be had by the Administrative Agent or any Lender to any of the security held for payment of the Obligations or to any balance of any deposit account or credit on the books of the Administrative Agent or any Lender in favor of the Borrower or any other Person. SECTION 4. No Discharge or Diminishment of Guarantee. The obligations of each Guarantor hereunder shall not be subject to any reduction, limitation, impairment or termination for any reason (other than the indefeasible payment in full in cash of the Obligations), including any claim of waiver, release, surrender, alteration or compromise of any of the Obligations, and shall not be subject to any defense or setoff, counterclaim, recoupment or termination whatsoever by reason of the invalidity, illegality or unenforceability of the Obligations or otherwise. Without limiting the generality of the foregoing, the obligations of each Guarantor hereunder shall not be discharged or impaired or otherwise affected by the failure of the Administrative Agent or any Lender to assert any claim or demand or to enforce any remedy under the Loan Agreement, any other Loan Document or any other agreement, by any waiver or modification of any provision of any thereof, by any default, failure or delay, willful or otherwise, in the performance of the Obligations, or by any other act or omission that may or might in any manner or to the extent vary the risk of any Guarantor or that would otherwise operate as a discharge of each Guarantor as a matter of law or equity (other than the indefeasible payment in full in cash of all the Obligations). SECTION 5. Defenses of Borrower Waived. To the fullest extent permitted by applicable law, each Guarantor waives any defense based on or arising out of any defense of any Loan Party or the unenforceability of the Obligations or any part thereof from any cause, or the cessation from any cause of the liability of any Loan Party, other than the final and indefeasible payment in full in cash of the Obligations. The Administrative Agent and the Lenders may, at their election, foreclose on any security held by one or more of them by one or more judicial or nonjudicial sales, accept an assignment of any such security in lieu of foreclosure, compromise or adjust any part of the Obligations, make any other accommodation with any other Loan Party or any other guarantor, without affecting or impairing in any way the liability of any Guarantor hereunder except to the extent the Obligations have been fully, finally and indefeasibly paid in cash. Pursuant to applicable law, each Guarantor waives any defense arising out of any such election even though such election operates, pursuant to applicable law, to impair or to extinguish any right of reimbursement or subrogation or other right or remedy of such Guarantor against the Borrower or any other Guarantor or guarantor, as the case may be, or any security. SECTION 6. Agreement to Pay; Subordination. In furtherance of the foregoing and not in limitation of any other right that the Administrative Agent or any Lender has at law or in equity against any Guarantor by virtue hereof, upon the failure of the Borrower or any other Loan Party to pay any Obligation when and as the same shall become due, whether at maturity, by acceleration, after notice of prepayment or otherwise, each Guarantor hereby promises to and will forthwith pay, or cause to be paid, to the Administrative Agent for the benefit of the Lenders in cash the amount of such unpaid Obligations. Upon payment by any Guarantor of any sums to the Administrative Agent, all rights of such Guarantor against any Loan Party arising as a result thereof by way of right of subrogation, contribution, reimbursement, indemnity or otherwise shall in all respects be subordinate and junior in right of payment to the prior indefeasible payment in full in cash of all the Obligations. In addition, any indebtedness of any Loan Party now or hereafter held by any Guarantor is hereby subordinated in right of payment to the prior payment in full in cash of the Obligations. If any amount shall erroneously be paid to any Guarantor on account of (i) such subrogation, contribution, reimbursement, indemnity or similar right or (ii) any such indebtedness of any Loan Party, such amount shall be held in trust for the benefit of the Administrative Agent and the Lenders and shall forthwith be paid to the Administrative Agent to be credited against the payment of the Obligations, whether matured or unmatured, in accordance with the terms of the Loan Documents. SECTION 7. Information. Each Guarantor assumes all responsibility for being and keeping itself informed of other Loan Parties' financial condition and assets, and of all other circumstances bearing upon the risk of nonpayment of the Obligations and the nature, scope and extent of the risks that such Guarantor assumes and incurs hereunder, and agrees that none of the Administrative Agent or the Lenders will have any duty to advise any of the Guarantors of information known to it or any of them regarding such circumstances or risks. SECTION 8. Representations and Warranties. Each Guarantor represents and warrants as to itself that all representations and warranties relating to it (as a Subsidiary of KPP) contained in the Loan Agreement are true and correct. SECTION 9. Termination. The guarantees made hereunder (i) shall terminate when all the Obligations have been paid in full in cash and the Lenders have no further commitment to lend under the Loan Agreement and (ii) shall continue to be effective or be reinstated, as the case may be, if at any time payment, or any part thereof, of any Obligation is rescinded or must otherwise be restored by any Lender or any Guarantor upon the bankruptcy or reorganization of the Borrower, any Guarantor or otherwise. In connection with the foregoing, the Administrative Agent shall execute and deliver to such Guarantor or Guarantor's designee, at such Guarantor's expense, any documents or instruments which such Guarantor shall reasonably request from time to time to evidence such termination and release. SECTION 10. Binding Effect; Several Agreement; Assignments. Whenever in this Agreement any of the parties hereto is referred to, such reference shall be deemed to include the successors and assigns of such party; and all covenants, promises and agreements by or on behalf of the Guarantors that are contained in this Agreement shall bind and inure to the benefit of each party hereto and their respective successors and assigns. This Agreement shall become effective as to any Guarantor when a counterpart hereof executed on behalf of such Guarantor shall have been delivered to the Administrative Agent, and a counterpart hereof shall have been executed on behalf of the Administrative Agent, and thereafter shall be binding upon such Guarantor and the Administrative Agent and their respective successors and assigns, and shall inure to the benefit of such Guarantor, the Administrative Agent and the Lenders, and their respective successors and assigns, except that no Guarantor shall have the right to assign its rights or obligations hereunder or any interest herein (and any such attempted assignment shall be void). If all of the capital stock of a Guarantor is sold, transferred or otherwise disposed of pursuant to a transaction permitted by the Loan Agreement, such Guarantor shall be released from its obligations under this Agreement without further action. This Agreement shall be construed as a separate agreement with respect to each Guarantor and may be amended, modified, supplemented, waived or released with respect to any Guarantor without the approval of any other Guarantor and without affecting the obligations of any other Guarantor hereunder. SECTION 11. Waivers; Amendment. (a) No failure or delay of the Administrative Agent of any in exercising any power or right hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such right or power, or any abandonment or discontinuance of steps to enforce such a right or power, preclude any other or further exercise thereof or the exercise of any other right or power. The rights and of the Administrative Agent hereunder and of the Lenders under the other Loan Documents are cumulative and are not exclusive of any rights or remedies that they would otherwise have. No waiver of any provision of this Agreement or consent to any departure by any Guarantor therefrom shall in any event be effective unless the same shall be permitted by subsection (b) below, and then such waiver and consent shall be effective only in the specific instance and for the purpose for which given. No notice or demand on any Guarantor in any case shall entitle such Guarantor to any other or further notice in similar or other circumstances. (b) Neither this Agreement nor any provision hereof may be waived, amended or modified except pursuant to a written agreement entered into between the Guarantors with respect to which such waiver, amendment or modification relates and the Administrative Agent, with the prior written consent of the Required Lenders (except as otherwise provided in the Loan Agreement). SECTION 12. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK. SECTION 13. Notices. All communications and notices hereunder shall be in writing and given as provided in Section 11.01 of the Loan Agreement. All communications and notices hereunder to each Guarantor shall be given to it at its address set forth on Schedule I attached hereto. SECTION 14. Survival of Agreement; Severability. (a) All covenants, agreements representations and warranties made by the Guarantors herein and in the certificates or other instruments prepared or delivered in connection with or pursuant to this Agreement or the other Loan Document shall be considered to have been relied upon by the Administrative Agent and the Lenders and shall survive the making by the Lenders of the Loans regardless of any investigation made by any of them or on their behalf, and shall continue in full force and effect as long as the principal of or any accrued interest on any Loan or any other amount payable under this Agreement or any other Loan Document is outstanding and unpaid and as long as the Commitments have not been terminated. (b) In the event one or more of the provisions contained in this Agreement or in any other Loan Document should be held invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein and therein shall not in any way be affected or impaired thereby (it being understood that the invalidity of a particular provision in a particular jurisdiction shall not in and of itself affect the validity of such provision in any other jurisdiction). The parties shall endeavor in good-faith negotiations to replace the invalid, illegal or unenforceable provisions with valid provisions the economic effect of which comes as close as possible to that of the invalid, illegal or unenforceable provisions. SECTION 15. Counterparts. This Agreement may be executed in counterparts, each of which shall constitute an original, but all of which when taken together shall constitute a single contract (subject to Section 10), and shall become effective as provided in Section 10. Delivery of an executed signature page to this Agreement by facsimile transmission shall be as effective as delivery of a manually executed counterpart of this Agreement. SECTION 16. Rules of Interpretation. The rules of interpretation specified in Section 1.03 of the Loan Agreement shall be applicable to this Agreement. SECTION 17. Jurisdiction; Consent to Service of Process. (a) Each Guarantor hereby irrevocably and unconditionally submits, for itself and its property, to the non-exclusive jurisdiction of the United States District Court of the Southern District of New York, and of the Supreme Court of the State of New York sitting in New York County and any appellate court from any thereof, in any action or proceeding arising out of or relating to this Agreement or the other Loan Documents or the transactions contemplated hereby or thereby, or for recognition or enforcement of any judgment, and each of the parties hereto hereby irrevocably and unconditionally agrees that all claims in respect of any such action or proceeding may be heard and determined in such New York State court or, to the extent permitted by applicable law, in such Federal court. Each of the parties hereto agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law. Nothing in this Agreement shall affect any right that the Administrative Agent or any Lender may otherwise have to bring any action or proceeding relating to this Agreement or the other Loan Documents against any Guarantor or its properties in the courts of any jurisdiction. (b) Each Guarantor irrevocably and unconditionally waives any objection which it may now or hereafter have to the laying of venue of any such suit, action or proceeding described in subsection (a) of this Section and brought in any court referred to in subsection (a) of this Section. Each of the parties hereto irrevocably waives, to the fullest extent permitted by applicable law, the defense of an inconvenient forum to the maintenance of such action or proceeding in any such court. (c) Each party to this Agreement irrevocably consents to the service of process in the manner provided for notices in Section 13. Nothing in this Agreement will affect the right of any party hereto to serve process in any other manner permitted by law. SECTION 18. Waiver of Jury Trial. EACH PARTY HERETO IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (i) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, AND (ii) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION. SECTION 19. Additional Guarantors. Pursuant to Section 5.10 of the Loan Agreement, each Significant Subsidiary (other than any Foreign Subsidiary and any Excluded Subsidiary) that was not in existence on the date of the Loan Agreement is required to enter into this Agreement as a Guarantor. Upon execution and delivery after the date hereof by the Administrative Agent and such Subsidiary of an instrument in the form of Annex 1, such Subsidiary shall become a Guarantor hereunder with the same force and effect as if originally named as a Guarantor herein. The execution and delivery of any instrument adding an additional Guarantor as a party to this Agreement shall not require the consent of any other Guarantor hereunder. The rights and obligations of each Guarantor hereunder shall remain in full force and effect notwithstanding the addition of any new Guarantor as a party to this Agreement. SECTION 20. Right of Setoff. If an Event of Default shall have occurred and be continuing, each Lender are 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 Lender to or for the credit or the account of any Guarantor against any or all the obligations of such Guarantor now or hereafter existing under this Agreement and the other Loan Documents held by such Lender, irrespective of whether or not such Person shall have made any demand under this Agreement or any other Loan Document and although such obligations may be unmatured. The rights of each Lender under this Section 20 are in addition to other rights and remedies (including other rights of setoff) that such Lender may have. IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of the day and year first above written. EACH OF THE SUBSIDIARIES LISTED ON SCHEDULE I HERETO By ------------------------------------ Name: Title: SUNTRUST BANK, as Administrative Agent By ------------------------------------ Name: Title: SCHEDULE I TO THE SUBSIDIARY GUARANTEE AGREEMENT Guarantor(s) Address ANNEX 1 TO THE SUBSIDIARY GUARANTEE AGREEMENT SUPPLEMENT NO. [ ] dated as of [ ], to the Subsidiary Guarantee Agreement, dated as of [ ] (the "Guarantee Agreement"), among each of the subsidiaries listed on Schedule I thereto (each such Subsidiary individually, a "Guarantor" and collectively, the "Guarantors") of KANEB PIPE LINE OPERATING PARTNERSHIP, L.P., a Delaware limited partnership (the "Borrower"), and SUNTRUST BANK, a Georgia banking corporation, as Administrative Agent (the "Administrative Agent") for the Lenders (as defined in the Loan Agreement referred to below). A. Reference is made to the Loan Agreement, dated as of [ ] (as amended, supplemented or otherwise modified from time to time, the "Loan Agreement"), among the Borrower, the lenders from time to time party thereto (the "Lenders") and SunTrust Bank, as Administrative Agent. B. Capitalized terms used herein and not otherwise defined herein shall have the meanings assigned to such terms in the Guarantee Agreement and the Loan Agreement. C. The Guarantors have entered into the Guarantee Agreement in order to induce the Lenders to make Loans. Pursuant to Section 5.10 of the Loan Agreement, each Significant Subsidiary (other than any Foreign Subsidiary and any Excluded Subsidiary) that was not in existence or not a Guarantor on the date of the Loan Agreement is required to enter into the Guarantee Agreement as a Guarantor. Section 19 of the Guarantee Agreement provides that additional Subsidiaries of the Borrower may become Guarantors under the Guarantee Agreement by execution and delivery of an instrument in the form of this Supplement. The undersigned Subsidiary of the Borrower (the "New Guarantor") is executing this Supplement in accordance with the requirements of the Loan Agreement to become a Guarantor under the Guarantee Agreement as consideration for Loans. Accordingly, the Administrative Agent and the New Guarantor agree as follows: SECTION 1. In accordance with Section 19 of the Guarantee Agreement, the New Guarantor by its signature below becomes a Guarantor under the Guarantee Agreement with the same force and effect as if originally named therein as a Guarantor and the New Guarantor hereby (i) agrees to all the terms and provisions of the Guarantee Agreement applicable to it as Guarantor thereunder and (ii) represents and warrants that the representations and warranties made by it as a Guarantor thereunder are true and correct on and as of the date hereof. Each reference to a Guarantor in the Guarantee Agreement shall be deemed to include the New Guarantor. The Guarantee Agreement is hereby incorporated herein by reference. SECTION 2. The New Guarantor represents and warrants to the Administrative Agent and the Lenders that this Supplement has been duly authorized, executed and delivered by it and that each of this Supplement and the Guarantee Agreement constitutes its legal, valid and binding obligation, enforceable against it in accordance with its terms. SECTION 3. This Supplement may be executed in counterparts each of which shall constitute an original, but all of which when taken together shall constitute a single contract. This Supplement shall become effective when the Administrative Agent shall have received counterparts of this Supplement that, when taken together, bear the signatures of the New Guarantor and the Administrative Agent. Delivery of an executed signature page to this Supplement by facsimile transmission shall be as effective as delivery of a manually signed counterpart of this Supplement. SECTION 4. Except as expressly supplemented hereby, the Guarantee Agreement shall remain in full force and effect. SECTION 5. THIS SUPPLEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK. SECTION 6. In case any one or more of the provisions contained in this Supplement should be held invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein and in the Guarantee Agreement shall not in any way be affected or impaired thereby (it being understood that the invalidity of a particular provision hereof in a particular jurisdiction shall not in and of itself affect the validity of such provision in any other jurisdiction). The parties hereto shall endeavor in good-faith negotiations to replace the invalid, illegal or unenforceable provisions with valid provisions the economic effect of which comes as close as possible to that of the invalid, illegal or unenforceable provisions. SECTION 7. All communications and notices hereunder shall be in writing and given as provided in Section 13 of the Guarantee Agreement. All communications and notices hereunder to the New Guarantor shall be given to it at the address set forth under its signature below, with a copy to the Borrower. SECTION 8. The New Guarantor agrees to reimburse the Administrative Agent for its out-of-pocket expenses in connection with this Supplement, including the fees, disbursements and other charges of counsel for the Administrative Agent. IN WITNESS WHEREOF, the New Guarantor and the Administrative Agent have duly executed this Supplement to the Guarantee Agreement as of the day and year first above written. [Name of New Guarantor] By ------------------------------- Name: Title: Address: SUNTRUST BANK, as Administrative Agent By ------------------------------- Name: Title: Address: FORM OF CONTINUATION/CONVERSION [Date] SunTrust Bank, as Administrative Agent for the Lenders referred to below 303 Peachtree Street, N.E. Atlanta, GA 30308 Attention: Ladies and Gentlemen: Reference is made to the Bridge Loan Agreement, dated as of November 1, 2002 (as amended and in effect on the date hereof, the "Loan Agreement"), among the undersigned, as Borrower, the Lenders named therein, and SunTrust Bank, as Administrative Agent. Terms defined in the Loan Agreement are used herein with the same meanings. This notice constitutes a Continuation/Conversion and the Borrower hereby requests the conversion or continuation of a Loan under the Loan Agreement, and in that connection the Borrower specifies the following information with respect to the Loan to be converted or continued as requested hereby:
(A) Loan to which this request applies: __________________ (B) Principal amount of Loan to be converted/continued: __________________ (C) Effective date of election (which is a Business Day): __________________ (D) Interest rate basis: __________________ (E) Interest Period: __________________
Very truly yours, KANEB PIPE LINE OPERATING PARTNERSHIP, L.P. By: KANEB PIPE LINE COMPANY, General Partner By: ---------------------------------- Name: Title: FORM OF OPINION OF COUNSEL FOR THE LOAN PARTIES [Closing Date] To each of the Lenders party to the Loan Agreement referred to below and to SunTrust Bank, as Administrative Agent thereunder Ladies and Gentlemen: This opinion is furnished to you pursuant to Section 3.1(b)(vi) of the Bridge Loan Agreement, dated as of November 1, 2002 (such agreement, excluding the schedules and exhibits thereto, the "Loan Agreement"), among Kaneb Pipe Line Operating Partnership, L.P., (the "Borrower"), Kaneb Pipe Line Partners, L.P. ("KPP"), the Lenders parties thereto and SunTrust Bank, as Administrative Agent for said Lenders. Unless otherwise defined herein, terms defined in the Loan Agreement are used herein as therein defined. We have acted as counsel to the Loan Parties (as defined below) in connection with the preparation, execution and delivery of the Loan Agreement. In connection with this opinion, we have examined: (1) A counterpart of the Loan Agreement, executed by the Borrower and KPP; (2) the Notes, executed by the Borrower; (3) a counterpart of the Subsidiary Guarantee Agreement, executed by Support Terminal Services, Inc., Support Terminals Operating Partnership, L.P. and StanTrans, Inc. (collectively, the "Guarantors", and, together with the Borrower and KPP, the "Loan Parties"); (4) The other documents furnished by the Loan Parties pursuant to Section 3.1 of the Loan Agreement; (5) The Constituent Documents of each Loan Party and all amendments thereto; and (6) A certificate of the Secretary of State of each State in which each Loan Party is formed, organized or incorporated, as the case may be, attesting to the continued existence and good standing of the Loan Parties in the applicable States. The Loan Agreement and the other agreements and instruments referred to in clauses (1), (2) and (3) above are hereinafter referred to as the "Loan Documents". In addition to the Loan Documents, we have examined such other documents and corporate and partnership records (collectively, the "Other Documents") and questions of law as we deem necessary for the purposes of this opinion. We have also examined such certificates of public officials, corporate officers of the Loan Parties and other Persons as we have deemed relevant and appropriate as a basis for the opinions expressed herein, and we have made no effort to independently verify the facts set forth in such certificates. Further, in making the foregoing examinations, we have assumed the genuineness of all signatures (other than signatures of the Loan Parties with respect to the Loan Documents), the legal capacity of each person signatory to any of the documents reviewed by us, the authenticity of all documents submitted to us as originals and the conformity to authentic original documents of all documents submitted to us as copies. In making the foregoing examinations, we have assumed that, as to factual matters, all representations and warranties made in the aforesaid documents (other than those which are expressed herein as our opinions) were and are true, correct and complete in all material respects. In rendering the opinions expressed herein, we have assumed that: (a) each of the documents examined by us (other than the Loan Documents) has been duly authorized, executed and delivered by each of the parties thereto and constitutes the legal, valid and binding obligation of each such party thereto enforceable in accordance with its terms; (b) the Loan Documents have been duly authorized, executed and delivered by or on behalf of each of the parties thereto other than the Loan Parties, that each such party other than the Loan Parties has the requisite power and authority to execute, deliver and perform such documents to which it is a party, and that the Loan Documents constitute the legal, valid and binding obligations of each such other party thereto enforceable in accordance with its terms; (c) no order, consent, approval, license, authorization, or validation of, or filing, recording or registration with, or exemption by, any court, governmental body or authority, or any subdivision thereof, is required to authorize or is required in connection with, the execution and delivery by any Person identified in any Loan Document as a party thereto, or in connection with the performance of its obligations thereunder or the consummation of the transactions contemplated thereby, other than those that have been obtained or made and are in full force and effect (provided, that we make no such assumption with respect to consents, approvals and the like applicable to Loan Parties to the extent that we express our opinion rendered in paragraph 4 below); (d) the Administrative Agent has been and is the duly appointed agent of each of the other Lenders pursuant to the Loan Agreement; and (e) there are no extrinsic agreements or understandings among the parties to the Loan Documents that would modify or affect the interpretation of the terms of the Loan Documents or the respective rights or obligations of the parties thereunder. In rendering this opinion, we have made no independent investigation of the facts referred to herein and have relied for the purpose of rendering this opinion exclusively on the facts set forth in the Loan Documents and the Other Documents and the certificates referred to above, which facts we assume have been and will continue to be true, accurate and correct in all material respects. Based upon the foregoing, and upon an examination of such questions of law as we have considered necessary or appropriate, and subject to the assumptions, exceptions, qualifications and limitations set forth herein, we advise you that, in our opinion: 1. Each Loan Party (a) has been duly formed and is validly existing in good standing under the laws of its state of formation, (b) has the corporate or partnership power and authority to own and operate its property, to lease the property which it operates as lessee and to conduct the business in which it is currently engaged and in which it proposes to be engaged after the date hereof, in each case as described in the periodic reports filed by KPP under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and (c) is duly qualified as a foreign entity and is in good standing under the laws of each jurisdiction listed on Schedule I hereto. 2. Each Loan Party has the corporate or partnership power and authority to execute and deliver, and to perform its obligations under, each Loan Document to which such Loan Party is a party. The Loan Agreement has been duly executed and delivered by KPP and the Borrower, the Notes have been duly executed and delivered by the Borrower, and the Subsidiary Guarantee Agreement has been duly executed and delivered by each Guarantor. 3. Assuming the proceeds of the Loans are used solely for the purposes set forth in the Loan Agreement, neither the execution and delivery of a Loan Document by a Loan Party, nor performance by a Loan Party of its obligations under a Loan Document, will (a) result in a breach of, or constitute a default under, any agreement to which any of the Loan Parties is a party or by which any of them or any of their respective properties is bound that has been filed under the Exchange Act by KPP as an exhibit to its annual report on Form 10-K for the year ended December 31, 1999, or as an exhibit to a quarterly report on Form 10-Q filed during the year 2000 or (b) violate (i) the Constituent Documents of any Loan Party, (ii) any statutory law or regulation or (iii) any decree or order of any court, governmental agency or arbitrator that is known by us to be applicable to any of the Loan Parties or any of their respective properties. 4. No consent, approval, authorization or waiver of, or notice to or filing with, or other action by, any governmental authority is required by any statutory law, regulation or ruling as a condition to the execution and delivery by the Loan Parties of the Loan Documents, or the performance by the Loan Parties of their obligations under the Loan Documents. 5. To our knowledge, other than as disclosed in KPP's filings under the Exchange Act, there are no legal or governmental proceedings pending to which any of the Loan Parties is a party or threatened against any of the Loan Parties which is required to be disclosed in such filings. 6. None of the Loan Parties is an "investment company" or a company "controlled" by an "investment company" as such terms are defined in the Investment Company Act of 1940, as amended, or a "public utility company" or a "holding company," or a "subsidiary company" of a "holding company," or an "affiliate" of a "holding company" or of a "subsidiary company" of a "holding company," as such terms are defined in the Public Utility Holding Company Act of 1935, as amended. None of the Loan Parties is subject to regulation under the Public Utility Holding Company Act of 1935, as amended. 7. Under the laws of the State of New York, each Loan Document constitutes the legal, valid and binding obligation of each Loan Party that is a party thereto, enforceable against each such Loan Party in accordance with its terms. 8. The foregoing opinions are subject to the following assumptions, exceptions, qualifications and limitations. (i) The foregoing opinions are expressly limited to matters under and governed by the internal substantive laws of the States of New York and Texas, the General Corporation Law of the State of Delaware, the Revised Uniform Limited Partnership Act of the State of Delaware, and applicable Federal laws of the United States of America, in each case in effect on the date hereof and which, in our experience, are normally applicable to the transactions provided for in the Loan Documents, in each case, however, exclusive of, and without regard to, any Excluded Laws. The term "Excluded Laws" means all (i) municipal, political subdivision (whether created or enabled through legislative action at the federal, state, regional or local level), local and county ordinances, statutes, administrative decisions, laws, rules and regulations, (ii) conflict of law principles and choice-of-law statutes and rules, and (iii) statutes, laws, rules and regulations relating to (a) pollution or protection of the environment, (b) zoning, land use, building or construction, (c) operation of any asset or property, (d) labor, employment, employee rights and benefits, or occupational safety and health, (e) utility regulation or regulation of matters pertaining to the acquisition, transportation, transmission, storage or use of energy sources used in connection therewith or generated thereby, (f) antitrust, (g) taxation and (h) securities laws, in each case with respect to each of the foregoing, (x) as interpreted, construed or enforced pursuant to any judicial, arbitral or other decision or pronouncement, (y) as enacted, promulgated or issued by, or otherwise existing in effect in, any jurisdiction, including, without limitation, any State of the United States of America and the United States of America, and (z) including, without limitation, any and all authorizations, permits, consents, applications, licenses, approvals, filings, registrations, publications, exemptions and the like required by any of them. (ii) The foregoing opinions regarding the enforceability of the Loan Documents are subject to the following: (A) The enforceability of the Loan Documents may be limited or affected by (a) bankruptcy, insolvency, reorganization, moratorium, liquidation, rearrangement, probate, conservatorship, fraudulent transfer, fraudulent conveyance and other similar laws (including court decisions) now or hereafter in effect and affecting the rights and remedies of creditors generally or providing for the relief of debtors generally, (b) the refusal of a particular court to grant (i) equitable remedies, including, without limiting the generality of the foregoing, specific performance and injunctive relief, or (ii) a particular remedy sought under any Loan Document as opposed to another remedy provided for therein or another remedy available at law or in equity, (c) general principles of equity, including without limitation requirements of good faith, fair dealing and reasonableness, and the possible unavailability of specific performance or injunctive relief (regardless of whether such remedies are sought in a proceeding in equity or at law), and (d) judicial discretion. (B) In rendering the foregoing opinions, we express no opinion as to (1)(a) provisions in the Loan Documents that purport to restrict access to legal or equitable remedies, that purport to affect service of process, that purport to permit any party to increase the obligations of any person or entity without the consent of such person or entity, that purport to require any party to waive any notice which, as a matter of law or equity, may not be waived, or that purport to reinstate any obligation after payment or otherwise, that purport to establish property classifications, presumptions or evidentiary standards or to waive either illegality as a defense to the performance of contract obligations or any other defense for such performance that cannot, as a matter of law or equity, be effectively waived, (b) provisions in the Loan Documents relating to future subordination, receivership, delay or omission of enforcement of rights and remedies, covenants not to sue or assert valid claims, marshalling of assets, waiver of rights of redemption, and severability clauses or rights of third parties, (c) provisions of the Loan Documents purporting to waive, eliminate, prejudice or restrict claims for damages or other remedies for trespass, conversion, negligence, failure to comply with requirements concerning notices, disposition of collateral or otherwise waiving, affecting or altering rights or defenses of any party which, in each case, as a matter of law or equity, may not be waived, affected or altered or the Lenders' obligations under applicable law or (d) other provisions having substantially similar effect, (2) the legality, validity, enforceability or binding effect of provisions of the Loan Documents relating to indemnities and rights of contribution to the extent prohibited by public policy or which might require indemnification for losses or expenses caused by negligence, gross negligence, willful misconduct, fraud or illegality of an indemnified party, (3) the effect of any provision of the Loan Documents which is intended to permit modification thereof only by means of an agreement signed in writing by the parties thereto, or (4) the effect of any provision of the Loan Documents insofar as it provides that any person purchasing a participation from a Lender or other Person may exercise set-off or similar rights with respect to such participation or that any Lender or other Person may exercise set-off or similar rights other than in accordance with applicable law. (C) We note that the enforceability of specific provisions of the Loan Documents may be subject to standards of reasonableness, care and diligence and "good faith" limitations and obligations such as those provided in Sections 1-102(3), 1-203, 1-208 and 5-109 of the Uniform Commercial Code as currently in effect in the State of New York, and the related provisions of the Uniform Commercial Code as currently in effect in the State of Texas, and applicable principles of common law and judicial decisions. (D) We have assumed that the Lenders will enforce each Loan Document in compliance with the provisions thereof and all requirements of applicable law. (E) In connection with the provisions of the Loan Documents whereby the Credit Parties submit to the jurisdiction of the United States District Court for the Southern District of New York, we note the limitations of 28 U.S.C. ss.ss. 1331 and 1332 on Federal court jurisdiction, and we also note that such submissions cannot supersede such court's discretion in determining whether to transfer an action from one Federal court to another under 28 U.S.C. ss. 1404(a). (iii) In rendering the opinion expressed in paragraph 1 above regarding existence and good standing, we have relied solely on certificates of public officials of a recent date, and have conducted no further investigation. Our opinion expressed in paragraph 6 with respect to each Loan Party is based solely upon our understanding of their respective businesses as described in the periodic reports filed by KPP under the Exchange Act. (iv) We do not express any opinion with respect to any exhibit to, or other agreement referred to in, any of the Loan Documents. (v) In rendering the foregoing opinions, we have not, pursuant to our engagement, endeavored to express any opinions, and we express no opinions, and none are intended to be implied hereby nor shall be inferred herefrom, as to (a) the various state and federal laws, statutes, regulations, interpretations, opinions, directives, orders, rulings, authorities or similar matters regulating or governing the Administrative Agent or any Lender (collectively, the "Rules") and/or their entry into, execution, delivery or performance of the Loan Documents, or the transactions provided for therein, or the conduct of its business related thereto, or (b) the Administrative Agent's or any Lender's compliance with any of the Rules in connection with any Loan Document, or the transactions provided for therein. (vi) As used herein, the phrase "to our knowledge" or words of similar import means conscious awareness of facts or other information by the lawyers in our firm who, based on our records as of 3:00 p.m. on December 27, 2000, have devoted substantive attention to legal matters on behalf of the Loan Parties since January 1, 2000. The opinions expressed herein are furnished to you for your sole benefit in connection with the transactions contemplated by the Loan Agreement. The opinions expressed herein may not be relied upon by you for any other purpose and may not be relied upon for any purpose by any other person without our prior written consent, except that any Person that may become a Lender after the date hereof may rely upon this opinion in connection with those transactions. The opinions expressed herein are as of the date hereof (and not as of any other date) or, to the extent a reference to a certificate or other document is made herein, to such date, and we make no undertaking to amend or supplement such opinions as facts and circumstances come to our attention or changes in the law occur which could affect such opinions. Very truly yours, SCHEDULE I [To Be Revised by Counsel to the Borrower] JURISDICTIONS OF LOAN PARTIES KANEB PIPE LINE COMPANY LLC Delaware* Colorado Iowa Kansas Nebraska North Dakota South Dakota Wyoming KANEB PIPE LINE PARTNERS, L.P. Delaware* KANEB PIPE LINE OPERATING PARTNERSHIP, L.P. Delaware* Colorado Iowa Kansas Nebraska North Dakota South Dakota Wyoming * State of incorporation or formation. SUPPORT TERMINAL SERVICES, INC. Delaware* Alabama Arizona California Washington D.C. Florida Georgia Illinois Indiana Kansas Louisiana Maryland Minnesota New Mexico Oklahoma Texas Virginia Washington Wisconsin SUPPORT TERMINALS OPERATING PARTNERSHIP, L.P. Delaware* Alabama California Washington D.C. Florida Georgia Illinois Indiana Kansas Louisiana Maryland Minnesota New Mexico Oklahoma Pennsylvania Texas Virginia Washington Wisconsin STANTRANS, INC. Delaware* Texas * State of incorporation or formation. EX-10 6 exh105.txt EXHIBIT 10.5 AMD NO 1 TO REVOLVER Exhibit 10.5 AMENDMENT NO. 1 TO REVOLVING CREDIT AGREEMENT THIS AMENDMENT NO. 1 TO REVOLVING CREDIT AGREEMENT (this "Amendment") dated as of July 31, 2002, is made by and among KANEB PIPE LINE OPERATING PARTNERSHIP, L.P., a Delaware limited partnership ("Borrower"), KANEB PIPE LINE PARTNERS, L.P., a Delaware limited partnership ("KPP"), each of the lenders named on the signature pages hereof (hereinafter, together with their successors and permitted assigns, collectively, the "Lenders" and, individually, a "Lender"), and SUNTRUST BANK, in its capacity as Administrative Agent for the Lenders (the "Administrative Agent"). W I T N E S S E T H: - - - - - - - - - - WHEREAS, Borrower, KPP, the Lenders, and the Administrative Agent are parties to a certain Revolving Credit Agreement dated as of December 28, 2000 (the "Credit Agreement"; defined terms used herein without definition shall have the meanings ascribed to such terms in the Credit Agreement); WHEREAS, Borrower, KPP, and the Lenders have agreed to amend the Credit Agreement as more specifically set forth below; NOW, THEREFORE, for and in consideration of the mutual covenants contained herein and other valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending to be legally bound, agree as follows: SECTION 1. Amendments to Credit Agreement. Effective as of the Effective Date (as hereinafter defined), the Credit Agreement is hereby amended as follows: 1.1 Section 1.1 of the Credit Agreement is hereby amended by deleting the defined term "Additional Debt" and its accompanying definition. 1.2 Section 1.1 of the Credit Agreement is hereby further amended by deleting the defined term "Net Cash Proceeds" and the accompanying definition, and substituting in lieu thereof the following defined term and accompanying definition: "Net Cash Proceeds" shall mean, with respect to any Asset Disposition or Recovery Event (each, for purposes of this definition, a "transaction"), the aggregate amount of cash received, as the case may be, by (x) KPP or the Borrower or (y) any Significant Affiliate and legally available to be distributed to KPP or the Borrower in the form of dividends or distributions in connection with such transaction after, in each case, deducting therefrom (i) payments made in respect of any Indebtedness to the extent that such payments are required to be made (other than under the Loan Documents) as a result of or in connection with such transaction by applicable law or the terms of any contractual agreement relating to such Indebtedness, (ii) reasonable and customary transaction costs (which in the case of any Recovery Event may include litigation costs and expenses and other costs and expenses of collecting payments and settlements therefrom) that are paid or reserved for payment (A) to a Person that is not an Affiliate of KPP or (B) to KPP or an Affiliate of KPP to reimburse such Person for payments made by such Person to another Person that is not KPP or an Affiliate of KPP in respect of such transaction costs, (iii) the amount of taxes paid or reserved for payment by KPP or such Significant Affiliate in connection with or as a result of such transaction, and (iv) any Reinvestment Amount. 1.3 Section 2.9(b) of the Credit Agreement is hereby amended by deleting said Section 2.9(b) in its entirety and substituting in lieu thereof the following Section 2.9(b): (b) The Borrower shall promptly notify the Administrative Agent upon the receipt of any Net Cash Proceeds and, at any time that Net Cash Proceeds received and not previously applied to any prepayment pursuant to this Section 2.9(b) shall equal or exceed $10,000,000, the Borrower shall prepay Borrowings, together with payment of all amounts required pursuant to Section 2.16, in an aggregate amount equal to one hundred percent (100%) (without duplication) of the Net Cash Proceeds of any Asset Disposition or Recovery Event. 1.4 Section 6.1 of the Credit Agreement is hereby amended by deleting said Section 6.1 in its entirety and substituting in lieu thereof the following Section 6.1: SECTION 6.1 Funded Debt to EBITDA. KPP and its Subsidiaries will maintain, as of the end of each fiscal quarter of KPP, a ratio of Consolidated Funded Debt to Consolidated EBITDA of not more than 4.25:1.00, measured, in each case, for the four-fiscal quarter period ending on each date of such determination. SECTION 2. Conditions to Effectiveness of Amendment. This Amendment shall become effective as of the date first above written (the "Effective Date") on the first day when the Administrative Agent shall have received (i) the duly executed counterparts of this Amendment from Borrower and the Lenders, and (ii) the duly executed counterparts of the Acknowledgment of Guarantors attached to this Amendment from KPP and the Subsidiary Guarantors. SECTION 3. Status of Obligations. Borrower hereby confirms and agrees that all Loans and all other Obligations outstanding under the Credit Agreement and the other Loan Documents as of the date hereof were duly and validly created and incurred by Borrower thereunder, that all such outstanding amounts are owed in accordance with the terms of the Credit Agreement and other Loan Documents, and that there are no rights of offset, defense, counterclaim, claim or objection in favor of Borrower arising out of or with respect to any of the Loans or other Obligations of Borrower to the Administrative Agent or the Lenders, and any such rights of offset, defense, counterclaim, claims or objections have been and are hereby waived and released by Borrower. SECTION 4. Representations and Warranties of Borrower. Each of Borrower and KPP, without limiting the representations and warranties provided in the Credit Agreement, represents and warrants to the Lenders and the Administrative Agent as follows: 4.1 The execution, delivery and performance by Borrower and KPP of this Amendment are within Borrower's and KPP's organizational powers, have been duly authorized by all necessary organizational action and do not and will not (a) violate any provision of any law, rule or regulation, any judgment, order or ruling of any court or governmental agency, the charter or by-laws of Borrower or KPP, or any indenture, agreement or other instrument to which Borrower or KPP is a party or by which Borrower or KPP or any of its properties is bound or (b) be in conflict with, result in a breach of, or constitute with notice or lapse of time or both a default under any such indenture, agreement or other instrument. 4.2 This Amendment constitutes the legal, valid and binding obligation of Borrower and KPP, enforceable against Borrower and KPP in accordance with its terms. 4.3 After giving effect to this Amendment, no Default or Event of Default has occurred and is continuing as of the Effective Date. SECTION 5. Survival. Each of the foregoing representations and warranties shall be made at and as of the Effective Date. Each of the foregoing representations and warranties shall constitute a representation and warranty of Borrower and KPP under the Credit Agreement, and it shall be an Event of Default if any such representation and warranty shall prove to have been incorrect or false in any material respect at the time when made. Each of the foregoing representations and warranties shall survive and not be waived by the execution and delivery of this Amendment or any investigation by the Lenders or the Administrative Agent. SECTION 6. Ratification of Credit Agreement and Loan Documents. Except as expressly amended herein, all terms, covenants and conditions of the Credit Agreement and the other Loan Documents shall remain in full force and effect, and the parties hereto do expressly ratify and confirm the Credit Agreement (as amended herein) and the other Loan Documents. All future references to the Credit Agreement shall be deemed to refer to the Credit Agreement as amended hereby. SECTION 7. Release. In consideration of the amendments agreed to by the Lenders pursuant to this Amendment, each of Borrower and KPP hereby (i) releases, acquits and forever discharges the Administrative Agent, each Lender, and each of their respective agents, employees, officers, partners, directors, servants, representatives, attorneys, affiliates, successors and assigns (collectively, the "Released Parties") from any and all liabilities, claims, suits, debts, liens, losses, causes of action, demands, rights, damages, costs and expenses of any kind, character or nature whatsoever, known or unknown, fixed or contingent, that Borrower or KPP may have or claim to have against such Lender which might arise out of or be connected with any act of commission or omission of such Lender existing or occurring on or prior to the date of this Amendment, including, without limitation, any claims, liabilities or obligations relating to or arising out of or in connection with the Credit Agreement, any other Loan Documents or this Amendment (including, without limitation, arising out of or in connection with the initiation, negotiation, closing or administration of the transactions contemplated thereby or related thereto), through the execution and delivery of this release and the effectiveness of this Amendment (the "Released Claims") and (ii) agrees to refrain from commencing, instituting or prosecuting any lawsuit, action or other proceeding against the Released Parties with respect to any and all Released Claims. SECTION 8. Indemnity. In consideration of the amendments agreed to by the Lenders pursuant to this Amendment, each of Borrower and KPP hereby indemnifies the Administrative Agent and each Lender, and their respective officers, partners, directors, employees, representatives and agents from, and hold each of them harmless against, any and all costs, losses, liabilities, claims, damages or expenses incurred by any of them (whether or not any of them is designated a party thereto) (an "Indemnitee") arising out of or by reason of any investigation, litigation or other proceeding related to this Amendment, the Credit Agreement or any other Loan Documents or any actual or proposed use of the proceeds of any of the Loans, including, without limitation, the reasonable fees and disbursements of counsel incurred in connection with any such investigation, litigation or other proceeding; provided, however, neither Borrower nor KPP shall be obligated to indemnify any Indemnitee for any of the foregoing arising out of such Indemnitee's gross negligence or willful misconduct. SECTION 9. No Other Waiver, Etc. Each of Borrower and KPP hereby agrees that nothing herein shall constitute a waiver by the Lenders of any Default or Event of Default, whether known or unknown, which may exist under the Credit Agreement. Each of Borrower and KPP hereby further agrees that no action, inaction or agreement by the Lenders, including without limitation, any indulgence, waiver, consent or agreement altering the provisions of the Credit Agreement which may have occurred with respect to the non-performance of any obligation under the terms of the Credit Agreement or any portion thereof, or any other matter relating to the Credit Agreement, shall require or imply any future indulgence, waiver, or agreement by the Lenders. SECTION 10. Binding Nature. This Amendment shall be binding upon and inure to the benefit of the parties hereto, their respective successors, successors-in-titles, and assigns. SECTION 11. Costs and Expenses. Borrower and KPP shall be responsible for the costs and expenses of the Administrative Agent in connection with the preparation, execution and delivery of this Amendment and the other instruments and documents to be delivered hereunder, including, without limitation, the fees and out-of-pocket expenses of counsel for the Administrative with respect thereto. SECTION 12. Governing Law. This Amendment shall be CONSTRUED IN ACCORDANCE WITH AND governed by the INTERNAL laws of the State of NEW YORK. SECTION 13. Entire Understanding. This Amendment sets forth the entire understanding of the parties with respect to the matters set forth herein, and shall supersede any prior negotiations or agreements, whether written or oral, with respect thereto. SECTION 14. Counterparts. This Amendment may be executed in any number of counterparts and by the different parties hereto in separate counterparts and may be delivered by telecopier. Each counterpart so executed and delivered shall be deemed an original and all of which taken together shall constitute but one and the same instrument. IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed and delivered by their duly authorized officers as of the day and year first above written. KANEB PIPE LINE OPERATING PARTNERSHIP, L.P. By: KANEB PIPE LINE COMPANY, General Partner By: ---------------------------------- Name: Title: KANEB PIPE LINE PARTNERS, L.P. By: KANEB PIPE LINE COMPANY, General Partner By: -------------------------------------- Name: Title: SUNTRUST BANK, as Administrative Agent and as a Lender By: ------------------------------------------ Name: Title: BANK OF AMERICA, N.A., as a Lender By: ------------------------------------------ Name: Title: BANK ONE, N.A., as a Lender By: ------------------------------------------ Name: Title: BNP PARIBAS, as a Lender By: ------------------------------------------ Name: Title: FLEET NATIONAL BANK, as a Lender By: ------------------------------------------ Name: Title: BANK OF SCOTLAND, as a Lender By: ------------------------------------------ Name: Title: ACKNOWLEDGMENT OF GUARANTORS Each of the undersigned Guarantors hereby (i) acknowledges and consents to the execution and delivery by Borrower and KPP of the foregoing Amendment No. 1 to Revolving Credit Agreement dated as of July 31, 2002, and (ii) acknowledges and agrees that (x) such execution and delivery of the foregoing Amendment No. 1 to Revolving Credit Agreement shall not release, discharge, limit or affect in any manner any of their obligations as such Guarantors pursuant to the terms of the Revolving Credit Agreement dated as of December 28, 2000, as referred to and amended by the foregoing Amendment No. 1 to Credit Agreement, or pursuant to the Subsidiary Guarantee Agreement delivered thereunder, and (y) their respective obligations as such Guarantors in respect of all Obligations as defined in such Revolving Credit Agreement shall remain in full force and effect on and after the date hereof. This Acknowledgment of Guarantors made and delivered as of July 31, 2002. GUARANTORS: KANEB PIPE LINE OPERATING PARTNERSHIP, L.P. By: KANEB PIPE LINE COMPANY, General Partner By: ---------------------------------- Name: Title: KANEB PIPE LINE PARTNERS, L.P. By: KANEB PIPE LINE COMPANY, General Partner By: -------------------------------------- Name: Title: SUPPORT TERMINALS OPERATING PARTNERSHIP, L.P. By: SUPPORT TERMINAL SERVICES, INC., General Partner By: -------------------------------------- Name: Title: SUPPORT TERMINAL SERVICES, INC. By: ------------------------------------------ Name: Title: STANTRANS, INC. By: ------------------------------------------ Name: Title: EX-10 7 exh106.txt EXHIBIT 10.6 AMD NO 2 TO REVOLVER Exhibit 10.6 AMENDMENT NO. 2 TO REVOLVING CREDIT AGREEMENT THIS AMENDMENT NO. 2 TO REVOLVING CREDIT AGREEMENT (this "Amendment") dated as of October __, 2002, is made by and among KANEB PIPE LINE OPERATING PARTNERSHIP, L.P., a Delaware limited partnership ("Borrower"), KANEB PIPE LINE PARTNERS, L.P., a Delaware limited partnership ("KPP"), each of the lenders named on the signature pages hereof (hereinafter, together with their successors and permitted assigns, collectively, the "Lenders" and, individually, a "Lender"), and SUNTRUST BANK, in its capacity as Administrative Agent for the Lenders (the "Administrative Agent"). W I T N E S S E T H: - - - - - - - - - - WHEREAS, Borrower, KPP, the Lenders, and the Administrative Agent are parties to a certain Revolving Credit Agreement dated as of December 28, 2000, as amended by Amendment No. 1 to the Revolving Credit Agreement dated as of July 31, 2002 (the "Credit Agreement"; defined terms used herein without definition shall have the meanings ascribed to such terms in the Credit Agreement); WHEREAS, Borrower, KPP, and the Lenders have agreed to amend the Credit Agreement as more specifically set forth below; NOW, THEREFORE, for and in consideration of the mutual covenants contained herein and other valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending to be legally bound, agree as follows: SECTION 1. Amendments to Credit Agreement. Effective as of the Effective Date (as hereinafter defined), the Credit Agreement is hereby amended as follows: 1.1 Section 1.1 of the Credit Agreement is hereby amended by adding the following definitions in proper alphabetical order: "Bridge Loan" shall mean the $150,000,000 bridge loan extended to the Borrower under the Bridge Loan Agreement. "Bridge Loan Agreement" shall mean that certain Bridge Loan Agreement, dated as of November 1, 2002, by and among the Borrower, KPP, the lenders from time to time parties thereto and SunTrust Bank, as Administrative Agent. "Senior Notes Indenture" shall mean that certain Indenture, dated on or about February 21, 2002, between the Borrower and JPMorgan Chase Bank, as trustee, with respect to the issuance of the Borrower's 7.750% Senior Unsecured Notes due 2012. 1.2 Section 7.8 of the Credit Agreement is hereby amended by replacing said Section 7.8 in its entirety with the following: SECTION 7.8 Restrictive Agreements. KPP will not, and will not permit any Subsidiary of KPP (other than any Excluded Subsidiary) to, directly or indirectly, enter into, incur or permit to exist any agreement (i) that prohibits, restricts or imposes any condition upon the ability of any Subsidiary of KPP to make Distributions with respect to its Equity Interests, to make or repay loans or advances to Borrower or any Guarantor, to guarantee Indebtedness of Borrower or any Guarantor or to transfer any of its property or assets to Borrower or any Guarantor, or (ii) contains any prohibitions or restrictions on KPP or such Subsidiary that are more restrictive than the covenants contained in this Agreement; provided, that (A) the foregoing shall not apply to restrictions or conditions imposed by law or by this Agreement, any other Loan Document, the Bridge Loan Agreement, and the Senior Notes Indenture, (B) the foregoing shall not apply to customary restrictions and conditions contained in agreements relating to the sale of any Subsidiary of KPP pending such sale, provided such restrictions and conditions apply only to the Subsidiary that is sold and such sale is permitted hereunder and (C) clause (i) shall not apply to restrictions on transfer of property or assets to Borrower or any Guarantor contained in any agreement or indenture pursuant to which Indebtedness is issued to refinance the Bridge Loan in full so long as any restriction on transfer of property or assets and any restriction on granting Liens is no more restrictive than the restrictions on transferring property and granting Liens contained in the Senior Notes Indenture as in effect on the date of Amendment No. 2 to this Revolving Credit Agreement. SECTION 2. Conditions to Effectiveness of Amendment. This Amendment shall become effective as of the date first above written (the "Effective Date") on the first day when the Administrative Agent shall have received (i) the duly executed counterparts of this Amendment from Borrower and the Lenders, and (ii) the duly executed counterparts of the Acknowledgment of Guarantors attached to this Amendment from KPP and the other Guarantors. SECTION 3. Status of Obligations. Borrower hereby confirms and agrees that all Loans and all other Obligations outstanding under the Credit Agreement and the other Loan Documents as of the date hereof were duly and validly created and incurred by Borrower thereunder, that all such outstanding amounts are owed in accordance with the terms of the Credit Agreement and other Loan Documents, and that there are no rights of offset, defense, counterclaim, claim or objection in favor of Borrower arising out of or with respect to any of the Loans or other Obligations of Borrower to the Administrative Agent or the Lenders, and any such rights of offset, defense, counterclaim, claims or objections have been and are hereby waived and released by Borrower. SECTION 4. Representations and Warranties of Borrower. Each of Borrower and KPP, without limiting the representations and warranties provided in the Credit Agreement, represents and warrants to the Lenders and the Administrative Agent as follows: 4.1 The execution, delivery and performance by Borrower and KPP of this Amendment are within Borrower's and KPP's organizational powers, have been duly authorized by all necessary organizational action and do not and will not (a) violate any provision of any law, rule or regulation, any judgment, order or ruling of any court or governmental agency, the charter or by-laws of Borrower or KPP, or any indenture, agreement or other instrument to which Borrower or KPP is a party or by which Borrower or KPP or any of its properties is bound or (b) be in conflict with, result in a breach of, or constitute with notice or lapse of time or both a default under any such indenture, agreement or other instrument. 4.2 This Amendment constitutes the legal, valid and binding obligation of Borrower and KPP, enforceable against Borrower and KPP in accordance with its terms. 4.3 After giving effect to this Amendment, no Default or Event of Default has occurred and is continuing as of the Effective Date. SECTION 5. Survival. Each of the foregoing representations and warranties shall be made at and as of the Effective Date. Each of the foregoing representations and warranties shall constitute a representation and warranty of Borrower and KPP under the Credit Agreement, and it shall be an Event of Default if any such representation and warranty shall prove to have been incorrect or false in any material respect at the time when made. Each of the foregoing representations and warranties shall survive and not be waived by the execution and delivery of this Amendment or any investigation by the Lenders or the Administrative Agent. SECTION 6. Ratification of Credit Agreement and Loan Documents. Except as expressly amended herein, all terms, covenants and conditions of the Credit Agreement and the other Loan Documents shall remain in full force and effect, and the parties hereto do expressly ratify and confirm the Credit Agreement (as amended herein) and the other Loan Documents. All future references to the Credit Agreement shall be deemed to refer to the Credit Agreement as amended hereby. SECTION 7. Release. In consideration of the amendments agreed to by the Lenders pursuant to this Amendment, each of Borrower and KPP hereby (i) releases, acquits and forever discharges the Administrative Agent, each Lender, and each of their respective agents, employees, officers, partners, directors, servants, representatives, attorneys, affiliates, successors and assigns (collectively, the "Released Parties") from any and all liabilities, claims, suits, debts, liens, losses, causes of action, demands, rights, damages, costs and expenses of any kind, character or nature whatsoever, known or unknown, fixed or contingent, that Borrower or KPP may have or claim to have against such Lender which might arise out of or be connected with any act of commission or omission of such Lender existing or occurring on or prior to the date of this Amendment, including, without limitation, any claims, liabilities or obligations relating to or arising out of or in connection with the Credit Agreement, any other Loan Documents or this Amendment (including, without limitation, arising out of or in connection with the initiation, negotiation, closing or administration of the transactions contemplated thereby or related thereto), through the execution and delivery of this release and the effectiveness of this Amendment (the "Released Claims") and (ii) agrees to refrain from commencing, instituting or prosecuting any lawsuit, action or other proceeding against the Released Parties with respect to any and all Released Claims. SECTION 8. Indemnity. In consideration of the amendments agreed to by the Lenders pursuant to this Amendment, each of Borrower and KPP hereby indemnifies the Administrative Agent and each Lender, and their respective officers, partners, directors, employees, representatives and agents from, and hold each of them harmless against, any and all costs, losses, liabilities, claims, damages or expenses incurred by any of them (whether or not any of them is designated a party thereto) (an "Indemnitee") arising out of or by reason of any investigation, litigation or other proceeding related to this Amendment, the Credit Agreement or any other Loan Documents or any actual or proposed use of the proceeds of any of the Loans, including, without limitation, the reasonable fees and disbursements of counsel incurred in connection with any such investigation, litigation or other proceeding; provided, however, neither Borrower nor KPP shall be obligated to indemnify any Indemnitee for any of the foregoing arising out of such Indemnitee's gross negligence or willful misconduct. SECTION 9. No Other Waiver, Etc. Each of Borrower and KPP hereby agrees that nothing herein shall constitute a waiver by the Lenders of any Default or Event of Default, whether known or unknown, which may exist under the Credit Agreement. Each of Borrower and KPP hereby further agrees that no action, inaction or agreement by the Lenders, including without limitation, any indulgence, waiver, consent or agreement altering the provisions of the Credit Agreement which may have occurred with respect to the non-performance of any obligation under the terms of the Credit Agreement or any portion thereof, or any other matter relating to the Credit Agreement, shall require or imply any future indulgence, waiver, or agreement by the Lenders. SECTION 10. Binding Nature. This Amendment shall be binding upon and inure to the benefit of the parties hereto, their respective successors, successors-in-titles, and assigns. SECTION 11. Costs and Expenses. Borrower and KPP shall be responsible for the costs and expenses of the Administrative Agent in connection with the preparation, execution and delivery of this Amendment and the other instruments and documents to be delivered hereunder, including, without limitation, the fees and out-of-pocket expenses of counsel for the Administrative with respect thereto. SECTION 12. Governing Law. This Amendment shall be CONSTRUED IN ACCORDANCE WITH AND governed by the INTERNAL laws of the State of NEW YORK. SECTION 13. Entire Understanding. This Amendment sets forth the entire understanding of the parties with respect to the matters set forth herein, and shall supersede any prior negotiations or agreements, whether written or oral, with respect thereto. SECTION 14. Counterparts. This Amendment may be executed in any number of counterparts and by the different parties hereto in separate counterparts and may be delivered by telecopier. Each counterpart so executed and delivered shall be deemed an original and all of which taken together shall constitute but one and the same instrument. [Remainder of page intentionally left blank] [SIGNATURE PAGE TO AMENDMENT NO. 2 TO REVOLVING CREDIT AGREEMENT] IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed and delivered by their duly authorized officers as of the day and year first above written. KANEB PIPE LINE OPERATING PARTNERSHIP, L.P. By: KANEB PIPE LINE COMPANY, General Partner By: ---------------------------------- Name: Title: KANEB PIPE LINE PARTNERS, L.P. By: KANEB PIPE LINE COMPANY, General Partner By: -------------------------------------- Name: Title: SUNTRUST BANK, as Administrative Agent and as a Lender By: ------------------------------------------ Name: Title: BANK OF AMERICA, N.A., as a Lender By: ------------------------------------------ Name: Title: BANK ONE, N.A., as a Lender By: ------------------------------------------ Name: Title: BNP PARIBAS, as a Lender By: ------------------------------------------ Name: Title: FLEET NATIONAL BANK, as a Lender By: ------------------------------------------ Name: Title: BANK OF SCOTLAND, as a Lender By: ------------------------------------------ Name: Title: ACKNOWLEDGMENT OF GUARANTORS Each of the undersigned Guarantors hereby (i) acknowledges and consents to the execution and delivery by Borrower and KPP of the foregoing Amendment No. 2 to Revolving Credit Agreement dated as of October __, 2002, and (ii) acknowledges and agrees that (x) such execution and delivery of the foregoing Amendment No. 2 to Revolving Credit Agreement shall not release, discharge, limit or affect in any manner any of their obligations as such Guarantors pursuant to the terms of the Revolving Credit Agreement dated as of December 28, 2000, as amended by Amendment No. 1 to the Credit Agreement, dated as of July 31, 2002, and as referred to and amended by the foregoing Amendment No. 2 to Credit Agreement, or pursuant to the Subsidiary Guarantee Agreement delivered thereunder, and (y) their respective obligations as such Guarantors in respect of all Obligations as defined in such Revolving Credit Agreement shall remain in full force and effect on and after the date hereof. This Acknowledgment of Guarantors made and delivered as of October __, 2002. GUARANTOR KANEB PIPE LINE OPERATING PARTNERSHIP, L.P. By: KANEB PIPE LINE COMPANY, General Partner By: ---------------------------------- Name: Title: KANEB PIPE LINE PARTNERS, L.P. By: KANEB PIPE LINE COMPANY, General Partner By: -------------------------------------- Name: Title: SUPPORT TERMINALS OPERATING PARTNERSHIP, L.P. By: SUPPORT TERMINAL SERVICES, INC., General Partner By: -------------------------------------- Name: Title: SUPPORT TERMINAL SERVICES, INC. By: ------------------------------------------ Name: Title: STANTRANS, INC. By: ------------------------------------------ Name: Title: EX-10 8 exh107.txt EXHIBIT 10.7 SUB GUARANTY TO BRIDGE Exhibit 10.2 SUBSIDIARY GUARANTEE AGREEMENT This SUBSIDIARY GUARANTEE AGREEMENT (the "Agreement"), dated as of November 1, 2002, among each of the Subsidiaries listed on Schedule I hereto (each such subsidiary individually, a "Guarantor" and collectively, the "Guarantors") of KANEB PIPE LINE OPERATING PARTNERSHIP, L.P., a Delaware limited partnership (the "Borrower"), and SUNTRUST BANK, a Georgia banking corporation as administrative agent (the "Administrative Agent") for the Lenders (as defined in the Loan Agreement referred to below). Reference is made to the Bridge Loan Agreement, dated as of November 1, 2002 (as amended, supplemented or otherwise modified from time to time, the "Loan Agreement"), among the Borrower, Kaneb Pipe Line Partners, L.P., the lenders from time to time party thereto (the "Lenders") and SunTrust Bank, as administrative agent for the Lenders (in such capacity, the "Administrative Agent"). Capitalized terms used herein and not defined herein shall have the meanings assigned to such terms in the Loan Agreement. The Lenders have agreed to make Loans to the Borrower pursuant to, and upon the terms and subject to the conditions specified in, the Loan Agreement. Each of the Guarantors is a direct or indirect Subsidiary of the Borrower and acknowledges that it will derive substantial benefit from the making of the Loans by the Lenders. The obligations of the Lenders to make Loans are conditioned on, among other things, the execution and delivery by the Guarantors of a Subsidiary Guarantee Agreement in the form hereof. As consideration therefor and in order to induce the Lenders to make Loans, the Guarantors are willing to execute this Subsidiary Guarantee Agreement. Accordingly, the parties hereto agree as follows: SECTION 1. Guarantee. Each Guarantor unconditionally guarantees, jointly with KPP and the other Guarantors and severally, as a primary obligor and not merely as a surety, (i) the due and punctual payment of (A) the principal of and premium, if any, and interest (including interest accruing during the pendency of any bankruptcy, insolvency, receivership or other similar proceeding, regardless of whether allowed or allowable in such proceeding) on the Loans, when and as due, whether at maturity, by acceleration, upon one or more dates set for prepayment or otherwise, and (B) all other monetary obligations, including fees, costs, expenses and indemnities, whether primary, secondary, direct, contingent, fixed or otherwise (including monetary obligations incurred during the pendency of any bankruptcy, insolvency, receivership or other similar proceeding, regardless of whether allowed or allowable in such proceeding), of the Loan Parties to the Administrative Agent and the Lenders under the Loan Agreement and the other Loan Documents, (ii) the due and punctual performance of all covenants, agreements, obligations and liabilities of the Loan Parties under or pursuant to the Loan Agreement and the other Loan Documents; and (iii) the due and punctual payment and performance of all obligations of the Borrower, monetary or otherwise, under each Hedging Agreement entered into with a counterparty that was a Lender or an Affiliate of a Lender at the time such Hedging Agreement was entered into (all the monetary and other obligations referred to in the preceding clauses (i) through (iii) being collectively called the "Obligations"). Each Guarantor further agrees that the Obligations may be extended or renewed, in whole or in part, without notice to or further assent from it, and that it will remain bound upon its guarantee notwithstanding any extension or renewal of any Obligation. SECTION 2. Obligations Not Waived. To the fullest extent permitted by applicable law, each Guarantor waives presentment to, demand of payment from and protest to the other Loan Parties of any of the Obligations, and also waives notice of acceptance of its guarantee and notice of protest for nonpayment. To the fullest extent permitted by applicable law, the obligations of each Guarantor hereunder shall not be affected by (i) the failure of the Administrative Agent or any Lender to assert any claim or demand or to enforce or exercise any right or remedy against the Borrower or any other Guarantor under the provisions of the Loan Agreement, any other Loan Document or otherwise, (ii) any rescission, waiver, amendment or modification of, or any release from any of the terms or provisions of, this Agreement, any other Loan Document or any other agreement, including with respect to any other Guarantor under this Agreement, or (iii) the failure to perfect any security interest in, or the release of, any of the security held by or on behalf of the Administrative Agent or any Lender. SECTION 3. Guarantee of Payment. Each Guarantor further agrees that its guarantee constitutes a guarantee of payment when due and not of collection, and waives any right to require that any resort be had by the Administrative Agent or any Lender to any of the security held for payment of the Obligations or to any balance of any deposit account or credit on the books of the Administrative Agent or any Lender in favor of the Borrower or any other Person. SECTION 4. No Discharge or Diminishment of Guarantee. The obligations of each Guarantor hereunder shall not be subject to any reduction, limitation, impairment or termination for any reason (other than the indefeasible payment in full in cash of the Obligations), including any claim of waiver, release, surrender, alteration or compromise of any of the Obligations, and shall not be subject to any defense or setoff, counterclaim, recoupment or termination whatsoever by reason of the invalidity, illegality or unenforceability of the Obligations or otherwise. Without limiting the generality of the foregoing, the obligations of each Guarantor hereunder shall not be discharged or impaired or otherwise affected by the failure of the Administrative Agent or any Lender to assert any claim or demand or to enforce any remedy under the Loan Agreement, any other Loan Document or any other agreement, by any waiver or modification of any provision of any thereof, by any default, failure or delay, willful or otherwise, in the performance of the Obligations, or by any other act or omission that may or might in any manner or to the extent vary the risk of any Guarantor or that would otherwise operate as a discharge of each Guarantor as a matter of law or equity (other than the indefeasible payment in full in cash of all the Obligations). SECTION 5. Defenses of Borrower Waived. To the fullest extent permitted by applicable law, each Guarantor waives any defense based on or arising out of any defense of any Loan Party or the unenforceability of the Obligations or any part thereof from any cause, or the cessation from any cause of the liability of any Loan Party, other than the final and indefeasible payment in full in cash of the Obligations. The Administrative Agent and the Lenders may, at their election, foreclose on any security held by one or more of them by one or more judicial or nonjudicial sales, accept an assignment of any such security in lieu of foreclosure, compromise or adjust any part of the Obligations, make any other accommodation with any other Loan Party or any other guarantor, without affecting or impairing in any way the liability of any Guarantor hereunder except to the extent the Obligations have been fully, finally and indefeasibly paid in cash. Pursuant to applicable law, each Guarantor waives any defense arising out of any such election even though such election operates, pursuant to applicable law, to impair or to extinguish any right of reimbursement or subrogation or other right or remedy of such Guarantor against the Borrower or any other Guarantor or guarantor, as the case may be, or any security. SECTION 6. Agreement to Pay; Subordination. In furtherance of the foregoing and not in limitation of any other right that the Administrative Agent or any Lender has at law or in equity against any Guarantor by virtue hereof, upon the failure of the Borrower or any other Loan Party to pay any Obligation when and as the same shall become due, whether at maturity, by acceleration, after notice of prepayment or otherwise, each Guarantor hereby promises to and will forthwith pay, or cause to be paid, to the Administrative Agent for the benefit of the Lenders in cash the amount of such unpaid Obligations. Upon payment by any Guarantor of any sums to the Administrative Agent, all rights of such Guarantor against any Loan Party arising as a result thereof by way of right of subrogation, contribution, reimbursement, indemnity or otherwise shall in all respects be subordinate and junior in right of payment to the prior indefeasible payment in full in cash of all the Obligations. In addition, any indebtedness of any Loan Party now or hereafter held by any Guarantor is hereby subordinated in right of payment to the prior payment in full in cash of the Obligations. If any amount shall erroneously be paid to any Guarantor on account of (i) such subrogation, contribution, reimbursement, indemnity or similar right or (ii) any such indebtedness of any Loan Party, such amount shall be held in trust for the benefit of the Administrative Agent and the Lenders and shall forthwith be paid to the Administrative Agent to be credited against the payment of the Obligations, whether matured or unmatured, in accordance with the terms of the Loan Documents. SECTION 7. Information. Each Guarantor assumes all responsibility for being and keeping itself informed of other Loan Parties' financial condition and assets, and of all other circumstances bearing upon the risk of nonpayment of the Obligations and the nature, scope and extent of the risks that such Guarantor assumes and incurs hereunder, and agrees that none of the Administrative Agent or the Lenders will have any duty to advise any of the Guarantors of information known to it or any of them regarding such circumstances or risks. SECTION 8. Representations and Warranties. Each Guarantor represents and warrants as to itself that all representations and warranties relating to it (as a Subsidiary of KPP) contained in the Loan Agreement are true and correct. SECTION 9. Termination. The guarantees made hereunder (i) shall terminate when all the Obligations have been paid in full in cash and the Lenders have no further commitment to lend under the Loan Agreement and (ii) shall continue to be effective or be reinstated, as the case may be, if at any time payment, or any part thereof, of any Obligation is rescinded or must otherwise be restored by any Lender or any Guarantor upon the bankruptcy or reorganization of the Borrower, any Guarantor or otherwise. In connection with the foregoing, the Administrative Agent shall execute and deliver to such Guarantor or Guarantor's designee, at such Guarantor's expense, any documents or instruments which such Guarantor shall reasonably request from time to time to evidence such termination and release. SECTION 10. Binding Effect; Several Agreement; Assignments. Whenever in this Agreement any of the parties hereto is referred to, such reference shall be deemed to include the successors and assigns of such party; and all covenants, promises and agreements by or on behalf of the Guarantors that are contained in this Agreement shall bind and inure to the benefit of each party hereto and their respective successors and assigns. This Agreement shall become effective as to any Guarantor when a counterpart hereof executed on behalf of such Guarantor shall have been delivered to the Administrative Agent, and a counterpart hereof shall have been executed on behalf of the Administrative Agent, and thereafter shall be binding upon such Guarantor and the Administrative Agent and their respective successors and assigns, and shall inure to the benefit of such Guarantor, the Administrative Agent and the Lenders, and their respective successors and assigns, except that no Guarantor shall have the right to assign its rights or obligations hereunder or any interest herein (and any such attempted assignment shall be void). If all of the capital stock of a Guarantor is sold, transferred or otherwise disposed of pursuant to a transaction permitted by the Loan Agreement, such Guarantor shall be released from its obligations under this Agreement without further action. This Agreement shall be construed as a separate agreement with respect to each Guarantor and may be amended, modified, supplemented, waived or released with respect to any Guarantor without the approval of any other Guarantor and without affecting the obligations of any other Guarantor hereunder. SECTION 11. Waivers; Amendment. (a) No failure or delay of the Administrative Agent of any in exercising any power or right hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such right or power, or any abandonment or discontinuance of steps to enforce such a right or power, preclude any other or further exercise thereof or the exercise of any other right or power. The rights and of the Administrative Agent hereunder and of the Lenders under the other Loan Documents are cumulative and are not exclusive of any rights or remedies that they would otherwise have. No waiver of any provision of this Agreement or consent to any departure by any Guarantor therefrom shall in any event be effective unless the same shall be permitted by subsection (b) below, and then such waiver and consent shall be effective only in the specific instance and for the purpose for which given. No notice or demand on any Guarantor in any case shall entitle such Guarantor to any other or further notice in similar or other circumstances. (b) Neither this Agreement nor any provision hereof may be waived, amended or modified except pursuant to a written agreement entered into between the Guarantors with respect to which such waiver, amendment or modification relates and the Administrative Agent, with the prior written consent of the Required Lenders (except as otherwise provided in the Loan Agreement). SECTION 12. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK. SECTION 13. Notices. All communications and notices hereunder shall be in writing and given as provided in Section 11.01 of the Loan Agreement. All communications and notices hereunder to each Guarantor shall be given to it at its address set forth on Schedule I attached hereto. SECTION 14. Survival of Agreement; Severability. (a) All covenants, agreements representations and warranties made by the Guarantors herein and in the certificates or other instruments prepared or delivered in connection with or pursuant to this Agreement or the other Loan Document shall be considered to have been relied upon by the Administrative Agent and the Lenders and shall survive the making by the Lenders of the Loans regardless of any investigation made by any of them or on their behalf, and shall continue in full force and effect as long as the principal of or any accrued interest on any Loan or any other amount payable under this Agreement or any other Loan Document is outstanding and unpaid and as long as the Commitments have not been terminated. (b) In the event one or more of the provisions contained in this Agreement or in any other Loan Document should be held invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein and therein shall not in any way be affected or impaired thereby (it being understood that the invalidity of a particular provision in a particular jurisdiction shall not in and of itself affect the validity of such provision in any other jurisdiction). The parties shall endeavor in good-faith negotiations to replace the invalid, illegal or unenforceable provisions with valid provisions the economic effect of which comes as close as possible to that of the invalid, illegal or unenforceable provisions. SECTION 15. Counterparts. This Agreement may be executed in counterparts, each of which shall constitute an original, but all of which when taken together shall constitute a single contract (subject to Section 10), and shall become effective as provided in Section 10. Delivery of an executed signature page to this Agreement by facsimile transmission shall be as effective as delivery of a manually executed counterpart of this Agreement. SECTION 16. Rules of Interpretation. The rules of interpretation specified in Section 1.03 of the Loan Agreement shall be applicable to this Agreement. SECTION 17. Jurisdiction; Consent to Service of Process. (a) Each Guarantor hereby irrevocably and unconditionally submits, for itself and its property, to the non-exclusive jurisdiction of the United States District Court of the Southern District of New York, and of the Supreme Court of the State of New York sitting in New York County and any appellate court from any thereof, in any action or proceeding arising out of or relating to this Agreement or the other Loan Documents or the transactions contemplated hereby or thereby, or for recognition or enforcement of any judgment, and each of the parties hereto hereby irrevocably and unconditionally agrees that all claims in respect of any such action or proceeding may be heard and determined in such New York State court or, to the extent permitted by applicable law, in such Federal court. Each of the parties hereto agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law. Nothing in this Agreement shall affect any right that the Administrative Agent or any Lender may otherwise have to bring any action or proceeding relating to this Agreement or the other Loan Documents against any Guarantor or its properties in the courts of any jurisdiction. (b) Each Guarantor irrevocably and unconditionally waives any objection which it may now or hereafter have to the laying of venue of any such suit, action or proceeding described in subsection (a) of this Section and brought in any court referred to in subsection (a) of this Section. Each of the parties hereto irrevocably waives, to the fullest extent permitted by applicable law, the defense of an inconvenient forum to the maintenance of such action or proceeding in any such court. (c) Each party to this Agreement irrevocably consents to the service of process in the manner provided for notices in Section 13. Nothing in this Agreement will affect the right of any party hereto to serve process in any other manner permitted by law. SECTION 18. Waiver of Jury Trial. EACH PARTY HERETO IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (i) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, AND (ii) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION. SECTION 19. Additional Guarantors. Pursuant to Section 5.10 of the Loan Agreement, each Significant Subsidiary (other than any Foreign Subsidiary and any Excluded Subsidiary) that was not in existence on the date of the Loan Agreement is required to enter into this Agreement as a Guarantor. Upon execution and delivery after the date hereof by the Administrative Agent and such Subsidiary of an instrument in the form of Annex 1, such Subsidiary shall become a Guarantor hereunder with the same force and effect as if originally named as a Guarantor herein. The execution and delivery of any instrument adding an additional Guarantor as a party to this Agreement shall not require the consent of any other Guarantor hereunder. The rights and obligations of each Guarantor hereunder shall remain in full force and effect notwithstanding the addition of any new Guarantor as a party to this Agreement. SECTION 20. Right of Setoff. If an Event of Default shall have occurred and be continuing, each Lender are 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 Lender to or for the credit or the account of any Guarantor against any or all the obligations of such Guarantor now or hereafter existing under this Agreement and the other Loan Documents held by such Lender, irrespective of whether or not such Person shall have made any demand under this Agreement or any other Loan Document and although such obligations may be unmatured. The rights of each Lender under this Section 20 are in addition to other rights and remedies (including other rights of setoff) that such Lender may have. [SIGNATURE PAGE TO FOLLOW] [SIGNATURE PAGE TO SUBSIDIARY GUARANTEE AGREEMENT] IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of the day and year first above written. KANEB PIPE LINE OPERATING PARTNERSHIP, L.P. By: KANEB PIPE LINE COMPANY, General Partner By: ---------------------------------- Name: Title: KANEB PIPE LINE PARTNERS, L.P. By: KANEB PIPE LINE COMPANY, General Partner By: -------------------------------------- Name: Title: SUPPORT TERMINALS OPERATING PARTNERSHIP, L.P. By: SUPPORT TERMINAL SERVICES, INC., General Partner By: -------------------------------------- Name: Title: SUPPORT TERMINAL SERVICES, INC. By: ------------------------------------------ Name: Title: STANTRANS, INC. By: ------------------------------------------ Name: Title: SHORE TERMINALS, LLC By: ------------------------------------------ Name: Title: SUNTRUST BANK, as Administrative Agent By -------------- Name: Title: SCHEDULE I TO THE SUBSIDIARY GUARANTEE AGREEMENT Guarantor(s) Address StanTrans, Inc. Support Terminals Operating Partnership, L.P. Support Terminal Services, Inc. Shore Terminals LLC -----END PRIVACY-ENHANCED MESSAGE-----