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EXHIBIT 10.9
$35,000,000 REVOLVING CREDIT FACILITY
CREDIT AGREEMENT
by and among
UNITED REFINING COMPANY,
UNITED REFINING COMPANY OF PENNSYLVANIA,
KIANTONE PIPELINE CORPORATION,
and
THE BANKS PARTY HERETO
and
PNC BANK, NATIONAL ASSOCIATION, As Agent
Dated as of June 9, 1997
PREPARED BY BUCHANAN INGERSOLL PROFESSIONAL CORPORATION
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TABLE OF CONTENTS
Section Page
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1. CERTAIN DEFINITIONS ........................................................ 1
1.1 Certain Definitions ................................................. 1
1.2 Construction ........................................................ 20
1.2.1 Number; Inclusion ........................................... 20
1.2.2 Determination ............................................... 20
1.2.3 Agent's Discretion and Consent .............................. 20
1.2.4 Documents Taken as a Whole .................................. 20
1.2.5 Headings .................................................... 20
1.2.6 Implied References to This Agreement ........................ 21
1.2.7 Persons ..................................................... 21
1.2.8 Modifications to Documents .................................. 21
1.2.9 From, To and Through ........................................ 21
1.2.10 Shall; Will ................................................ 21
1.3 Accounting Principles ............................................... 21
2. REVOLVING CREDIT AND SWING LOAN FACILITIES ................................. 22
2.1 Revolving Credit Commitments and Swing Loan Commitments ............. 22
2.1.1 Revolving Credit Commitments ................................ 22
2.1.2 Swing Loan Commitment ....................................... 22
2.2 Nature of Banks' Obligations With Respect to Revolving Credit Loans.. 22
2.3 Commitment Fees ..................................................... 23
2.4 Loan Requests ....................................................... 23
2.4.1 Revolving Credit Loan Requests .............................. 23
2.4.2 Swing Loan Requests ......................................... 23
2.5 Making Loans ........................................................ 24
2.5.1 Making Revolving Credit Loans ............................... 24
2.5.2 Making Swing Loans .......................................... 24
2.6 Borrowings to Repay Swing Loans ..................................... 24
2.7 Notes ............................................................... 25
2.7.1 Revolving Credit Notes ...................................... 25
2.7.2 Swing Loan Note ............................................. 25
2.8 Use of Proceeds ..................................................... 25
2.9 Letter of Credit Subfacility ........................................ 25
2.9.1 Issuance of Letters of Credit ............................... 25
2.9.2 Letter of Credit Fees ....................................... 26
2.9.3 Disbursements, Reimbursement ................................ 26
2.9.4 Repayment of Participation Advances ......................... 27
2.9.5 Documentation ............................................... 28
2.9.6 Determinations to Honor Drawing Requests .................... 28
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2.9.7 Nature of Participation and Reimbursement Obligations .................. 28
2.9.8 Indemnity .............................................................. 29
2.9.9 Liability for Acts and Omissions ....................................... 30
3. INTEREST RATES ........................................................................ 30
3.1 Interest Rate Options .......................................................... 30
3.1.1 Revolving Credit Interest Rate Options ................................. 31
3.1.2 Swing Loan Interest Rate Options ....................................... 31
3.1.3 Rate Quotations ........................................................ 32
3.2 Interest Periods ............................................................... 32
3.2.1 Ending Date and Business Day ........................................... 32
3.2.2 Amount of Borrowing Tranche ............................................ 32
3.2.3 Termination Before Expiration Date ..................................... 32
3.2.4 Renewals ............................................................... 32
3.3 Interest After Default ......................................................... 32
3.3.1 Letter of Credit Fees, Interest Rate, .................................. 33
3.3.2 Other Obligations ...................................................... 33
3.3.3 Acknowledgment ......................................................... 33
3.4 Euro-Rate Unascertainable; Illegality; Increased Costs; Deposits Not Available.. 33
3.4.1 Unascertainable ........................................................ 33
3.4.2 Illegality; Increased Costs; Deposits Not Available .................... 33
3.4.3 Agent's and Bank's Rights .............................................. 34
3.5 Selection of Interest Rate Options ............................................. 34
4. PAYMENTS .............................................................................. 35
4.1 Payments ....................................................................... 35
4.2 Pro Rata Treatment of Banks .................................................... 35
4.3 Interest Payment Dates ......................................................... 35
4.4 Voluntary Prepayments .......................................................... 36
4.4.1 Right to Prepay ........................................................ 36
4.4.2 Replacement of a Bank .................................................. 37
4.4.3 Change of Lending Office ............................................... 37
4.5 Mandatory Prepayments .......................................................... 38
4.5.1 Borrowing Base Exceeded ................................................ 38
4.5.2 Application Among Interest Rate Options ................................ 38
4.6 Additional Compensation in Certain Circumstances ............................... 38
4.6.1 Increased Costs or Reduced Return Resulting
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From Taxes, Reserves, Capital Adequacy Requirements, Expenses, Etc .. 38
4.6.2 Indemnity ............................................................. 39
4.7 Settlement Date Procedures .................................................... 40
4.8 Deposit into Lockbox .......................................................... 40
4.9 Receipt and Application of Payment; Cash Collateral Account; Collections;
Agent's Right to Notify Account Debtors ..................................... 40
4.9.1 Receipt and Application of Payment .................................... 40
4.9.2 Cash Collateral Account ............................................... 41
4.9.3 Collections; Agent's Right to Notify Account Debtors .................. 41
5. REPRESENTATIONS AND WARRANTIES ....................................................... 42
5.1 Representations and Warranties ................................................ 42
5.1.1 Organization and Qualification ........................................ 42
5.1.2 Capitalization and Ownership .......................................... 42
5.1.3 Subsidiaries .......................................................... 42
5.1.4 Power and Authority ................................................... 43
5.1.5 Validity and Binding Effect ........................................... 43
5.1.6 No Conflict ........................................................... 43
5.1.7 Litigation ............................................................ 43
5.1.8 Title to Properties ................................................... 44
5.1.9 Financial Statements .................................................. 44
5.1.10 Use of Proceeds; Margin Stock; Section 20 Subsidiaries ............... 45
5.1.11 Full Disclosure ...................................................... 45
5.1.12 Taxes ................................................................ 46
5.1.13 Consents and Approvals ............................................... 46
5.1.14 No Event of Default; Compliance With Instruments ..................... 46
5.1.15 Patents, Trademarks, Copyrights, Licenses, Etc ....................... 46
5.1.16 Security Interests ................................................... 47
5.1.17 Insurance ............................................................ 47
5.1.18 Compliance With Laws ................................................. 47
5.1.19 Material Contracts; Burdensome Restrictions .......................... 47
5.1.20 Investment Companies; Regulated Entities ............................. 48
5.1.21 Plans and Benefit Arrangements ....................................... 48
5.1.22 Employment Matters ................................................... 49
5.1.23 Environmental Matters ................................................ 49
5.1.24 Senior Debt Status ................................................... 51
5.2 Updates to Schedules .......................................................... 51
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6. CONDITIONS OF LENDING AND ISSUANCE OF LETTERS OF CREDIT ..................... 51
6.1 First Loans and Letters of Credit .................................... 51
6.1.1 Officer's Certificate ........................................ 51
6.1.2 Secretary's Certificate ...................................... 52
6.1.3 Delivery of Loan Documents ................................... 52
6.1.4 Opinion of Counsel ........................................... 52
6.1.5 Legal Details ................................................ 53
6.1.6 Payment of Fees .............................................. 53
6.1.7 Borrowing Base Certificate ................................... 53
6.1.8 Consents ..................................................... 53
6.1.9 Officer's Certificate Regarding MACs ......................... 53
6.1.10 No Violation of Laws ........................................ 53
6.1.11 No Actions or Proceedings ................................... 54
6.1.12 Insurance Policies; Certificates of Insurance; Endorsements.. 54
6.1.13 Filing Receipts ............................................. 54
6.1.14 Proceeds from Issuance of Senior Unsecured Notes ............ 54
6.1.15 Lockbox Agreements .......................................... 54
6.2 Each Additional Loan or Letter of Credit ............................. 55
7. COVENANTS ................................................................... 55
7.1 Affirmative Covenants ................................................ 55
7.1.1 Preservation of Existence, Etc ............................... 55
7.1.2 Payment of Liabilities, Including Taxes, Etc ................. 55
7.1.3 Maintenance of Insurance ..................................... 56
7.1.4 Maintenance of Properties and Leases ......................... 57
7.1.5 Maintenance of Patents, Trademarks, Etc ...................... 57
7.1.6 Visitation Rights ............................................ 57
7.1.7 Keeping of Records and Books of Account ...................... 57
7.1.8 Plans and Benefit Arrangements ............................... 57
7.1.9 Compliance With Laws ......................................... 58
7.1.10 Use of Proceeds ............................................. 58
7.1.11 Further Assurances .......................................... 58
7.1.12 Subordination of Intercompany Loans ......................... 58
7.1.13 Tax Sharing ................................................. 58
7.1.14 Wire Transfer Agreement ..................................... 58
7.2 Negative Covenants ................................................... 59
7.2.1 Indebtedness ................................................. 59
7.2.2 Liens ........................................................ 60
7.2.3 Guaranties ................................................... 60
7.2.4 Loans and Investments ........................................ 60
7.2.5 Dividends and Related Distributions .......................... 60
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7.2.6 Liquidations, Mergers, Consolidations, Acquisitions ............. 61
7.2.7 Dispositions of Assets or Subsidiaries .......................... 63
7.2.8 Affiliate Transactions .......................................... 64
7.2.9 Subsidiaries, Partnerships and Joint Ventures ................... 64
7.2.10 Continuation of or Change in Business .......................... 65
7.2.11 Plans and Benefit Arrangements ................................. 65
7.2.12 Fiscal Year .................................................... 66
7.2.13 Change in Control .............................................. 66
7.2.14 Issuance of Stock .............................................. 66
7.2.15 Changes in Organizational Documents and Senior Unsecured Notes.. 66
7.2.16 Minimum Fixed Charge Coverage Ratio ............................ 66
7.2.17 Minimum Net Worth .............................................. 67
7.3 Reporting Requirements .................................................. 67
7.3.1 Quarterly Financial Statements .................................. 67
7.3.2 Annual Financial Statements ..................................... 67
7.3.3 Certificate of the Borrowers .................................... 68
7.3.4 Weekly Borrowing Base Certificates, Schedules of Accounts and
Inventory, Audits of Accounts and Inventory ................... 68
7.3.5 Notice of Default ............................................... 69
7.3.6 Notice of Litigation ............................................ 69
7.3.7 Certain Events .................................................. 69
7.3.8 Budgets, Forecasts, Other Reports and Information ............... 69
7.3.9 Notices Regarding Plans and Benefit Arrangements ................ 70
8. DEFAULT ........................................................................ 71
8.1 Events of Default ....................................................... 71
8.1.1 Payments Under Loan Documents ................................... 72
8.1.2 Breach of Warranty .............................................. 72
8.1.3 Breach of Negative Covenants or Visitation Rights ............... 72
8.1.4 Breach of Other Covenants ....................................... 72
8.1.5 Defaults in Other Agreements or Indebtedness .................... 72
8.1.6 Final Judgments or Orders ....................................... 73
8.1.7 Loan Document Unenforceable ..................................... 73
8.1.8 Notice of Lien or Assessment .................................... 73
8.1.9 Insolvency ...................................................... 73
8.1.10 Events Relating to Plans and Benefit Arrangements .............. 73
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8.1.11 Cessation of Business .............................................. 74
8.1.12 Involuntary Proceedings ............................................ 74
8.1.13 Voluntary Proceedings .............................................. 74
8.2 Consequences of Event of Default ............................................ 75
8.2.1 Events of Default Other Than Bankruptcy, Insolvency or Reorganization
Proceedings ....................................................... 75
8.2.2 Bankruptcy, Insolvency or Reorganization Proceedings ................ 75
8.2.3 Set-off ............................................................. 75
8.2.4 Suits, Actions, Proceedings ......................................... 76
8.2.5 Application of Proceeds ............................................. 76
8.2.6 Other Rights and Remedies ........................................... 77
8.3 Notice of Sale .............................................................. 77
9. THE AGENT .......................................................................... 77
9.1 Appointment ................................................................. 77
9.2 Delegation of Duties ........................................................ 77
9.3 Nature of Duties; Independent Credit Investigation .......................... 77
9.4 Actions in Discretion of Agent; Instructions From the Banks ................. 78
9.5 Reimbursement and Indemnification of Agent by the Borrowers ................. 78
9.6 Exculpatory Provisions; Limitation of Liability ............................. 79
9.7 Reimbursement and Indemnification of Agent by Banks ......................... 79
9.8 Reliance by Agent ........................................................... 80
9.9 Notice of Default ........................................................... 80
9.10 Notices .................................................................... 80
9.11 Banks in Their Individual Capacities ....................................... 80
9.12 Holders of Notes ........................................................... 81
9.13 Equalization of Banks ...................................................... 81
9.14 Successor Agent ............................................................ 82
9.15 Agent's Fee ................................................................ 82
9.16 Availability of Funds ...................................................... 82
9.17 Calculations ............................................................... 83
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Section Page
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9.18 Beneficiaries ........................................................ 83
10. MISCELLANEOUS ............................................................... 83
10.1 Modifications, Amendments or Waivers ................................. 83
10.1.1 Increase of Commitment; Extension or Expiration Date ......... 83
10.1.2 Extension of Payment; Reduction of Principal Interest or Fees;
Modification of Terms of Payment ............................ 84
10.1.3 Release of Collateral or Guarantor ........................... 84
10.1.4 Miscellaneous ................................................ 84
10.2 No Implied Waivers; Cumulative Remedies; Writing Required ............ 84
10.3 Reimbursement and Indemnification of Banks by the Borrowers; Taxes ... 85
10.4 Holidays ............................................................. 85
10.5 Funding by Branch, Subsidiary or Affiliate ........................... 86
10.5.1 Notional Funding ............................................. 86
10.5.2 Actual Funding ............................................... 86
10.6 Notices .............................................................. 86
10.7 Severability ......................................................... 87
10.8 Governing Law ........................................................ 87
10.9 Prior Understanding .................................................. 87
10.10 Duration; Survival .................................................. 87
10.11 Successors and Assigns .............................................. 88
10.12 Confidentiality ..................................................... 89
10.12.1 General ..................................................... 89
10.12.2 Sharing Information With Affiliates of the Banks ............ 89
10.13 Counterparts ........................................................ 90
10.14 Agent's or Bank's Consent ........................................... 90
10.15 Exceptions .......................................................... 90
10.16 CONSENT TO FORUM; WAIVER OF JURY TRIAL .............................. 90
10.17 Tax Withholding Clause .............................................. 91
10.18 Joinder of Guarantors ............................................... 91
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LIST OF SCHEDULES AND EXHIBITS
SCHEDULES
SCHEDULE 1.1(A) - PRICING GRID
SCHEDULE 1.1(B) - COMMITMENTS OF BANKS AND ADDRESSES FOR
NOTICES
SCHEDULE 1.1(P) - PERMITTED LIENS
SCHEDULE 1.1(Q)(i) - QUALIFIED ACCOUNTS
SCHEDULE 1.1(Q)(ii) - QUALIFIED INVENTORY
SCHEDULE 5.1.1 - QUALIFICATIONS TO DO BUSINESS
SCHEDULE 5.1.2 - CAPITALIZATION
SCHEDULE 5.1.3 - SUBSIDIARIES
SCHEDULE 5.1.7 - LITIGATION
SCHEDULE 5.1.8 - OWNED AND LEASED REAL PROPERTY
SCHEDULE 5.1.12 - TAXES
SCHEDULE 5.1.13 - CONSENTS AND APPROVALS
SCHEDULE 5.1.15 - PATENTS, TRADEMARKS, COPYRIGHTS, LICENSES,
ETC.
SCHEDULE 5.1.17 - INSURANCE POLICIES
SCHEDULE 5.1.19 - MATERIAL CONTRACTS
SCHEDULE 5.1.21 - EMPLOYEE BENEFIT PLAN DISCLOSURES
SCHEDULE 5.1.23 - ENVIRONMENTAL DISCLOSURES
SCHEDULE 7.2.1 - PERMITTED INDEBTEDNESS
EXHIBITS
EXHIBIT 1.1(A)(1) - ASSIGNMENT AND ASSUMPTION AGREEMENT
EXHIBIT 1.1(A)(2) - CLOSING DATE CERTIFICATE
EXHIBIT 1.1(G)(1) - GUARANTY AGREEMENT
EXHIBIT 1.1(G)(2) - GUARANTY AGREEMENT
EXHIBIT 1.1(I) - INTERCOMPANY SUBORDINATION AGREEMENT
EXHIBIT 1.1(Q)(ii) - WAREHOUSEMAN'S WAIVER
EXHIBIT 1.1(R) - REVOLVING CREDIT NOTE
EXHIBIT 1.1(S)(1) - SECURITY AGREEMENT
EXHIBIT 1.1(S)(2) - SWING LOAN NOTE
EXHIBIT 1.1(W) - WIRE TRANSFER AGREEMENT
EXHIBIT 2.4.1 - REVOLVING CREDIT LOAN REQUEST
EXHIBIT 2.4.2 - SWING LOAN REQUEST
EXHIBIT 6.1.4 - OPINION OF COUNSEL
EXHIBIT 7.2.6 - ACQUISITION NOTICE CERTIFICATE
EXHIBIT 7.3.3 - QUARTERLY COMPLIANCE CERTIFICATE
EXHIBIT 7.3.4 - BORROWING BASE CERTIFICATE
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CREDIT AGREEMENT
THIS CREDIT AGREEMENT is dated as of June 9, 1997 and is made by and among
UNITED REFINING COMPANY, a Pennsylvania corporation ("United Refining"), UNITED
REFINING COMPANY OF PENNSYLVANIA, a Pennsylvania corporation ("United Refining
PA"), KIANTONE PIPELINE CORPORATION, a New York corporation ("Kiantone" and
hereinafter together with United Refining and United Refining PA sometimes
collectively referred to as the "Borrowers" and individually as a "Borrower"),
the BANKS (as hereinafter defined), and PNC BANK, NATIONAL ASSOCIATION, in its
capacity as agent for the Banks under this Agreement (hereinafter referred to in
such capacity as the "Agent").
WITNESSETH:
WHEREAS, the Borrowers have requested the Banks to provide a revolving
credit facility to the Borrowers in an aggregate principal amount not to exceed
$35,000,000; and
WHEREAS, the revolving credit facility shall be used for general corporate
purposes and working capital; and
WHEREAS, the Banks are willing to provide such credit upon the terms and
conditions hereinafter set forth;
NOW, THEREFORE, the parties hereto, in consideration of their mutual
covenants and agreements hereinafter set forth and intending to be legally bound
hereby, covenant and agree as follows:
1. CERTAIN DEFINITIONS
1.1 Certain Definitions.
In addition to words and terms defined elsewhere in this Agreement,
the following words and terms shall have the following meanings, respectively,
unless the context hereof clearly requires otherwise:
Account shall mean any account, contract right, general
intangible, chattel paper, instrument or document representing any right to
payment for goods sold or services rendered, whether or not earned by
performance and whether or not evidenced by a contract, instrument or document,
which is now owned or hereafter acquired by a Loan Party. All Accounts, whether
Qualified Accounts or not, shall be subject to the Banks' Prior Security
Interest.
Account Debtor shall mean any Person who is or
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who may become obligated to a Borrower under, with respect to, or on account of,
an Account.
Acquisition Consideration shall mean with respect to any
Permitted Acquisition, the aggregate of (i) the cash paid by any of the Loan
Parties, directly or indirectly, to the seller in connection therewith, (ii) the
Indebtedness incurred or assumed by any of the Loan Parties, whether in favor of
the seller or otherwise and whether fixed or contingent, (iii) any Guaranty
given or incurred by any Loan Party in connection therewith, and (iv) any other
consideration given or obligation incurred by any of the Loan Parties in
connection therewith.
Adjusted Fixed Charge Coverage Ratio shall mean the
Consolidated Fixed Charge Coverage Ratio as such term is defined in the
Indenture as the Indenture exists on the Closing Date and without giving effect
to any amendments to such Indenture after the Closing Date (the "Closing Date
Indenture"). All defined terms included in the definition of the Consolidated
Fixed Charge Coverage Ratio in the Closing Date Indenture (or included in other
defined terms contained in the definitions of such defined terms or otherwise
contained in the Closing Date Indenture) also shall have the meanings given to
them in the Closing Date Indenture.
Affiliate as to any Person shall mean any other Person (i)
which directly or indirectly controls, is controlled by, or is under common
control with such Person, (ii) which beneficially owns or holds ten percent
(10%) or more of any class of the voting or other equity interests of such
Person, or (iii) ten percent (10%) or more of any class of voting interests or
other equity interests of which is beneficially owned or held, directly or
indirectly, by such Person. Control, as used in this definition, shall mean the
possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of a Person, whether through the
ownership of voting securities, by contract or otherwise, including the power to
elect a majority of the directors or trustees of a corporation or trust, as the
case may be.
Agent shall mean PNC Bank, National Association, and its
successors and assigns.
Agent's Fee shall have the meaning assigned to that term in
Section 9.15.
Agent's Letter shall have the meaning assigned to that term in
Section 9.15.
Agreement shall mean this Credit Agreement, as the same may be
supplemented or amended from time to time,
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including all schedules and exhibits.
Annual Statements shall have the meaning assigned to that term
in subsection 5.1.9(i).
Applicable Margin shall mean, as applicable:
(A) the percentage spread to be added to Base Rate under the
Base Rate Option based on the Leverage Ratio then in effect according to the
pricing grid on Schedule 1.1(A) below the heading "Revolving Credit Base Rate
Spread," or
(B) the percentage spread to be added to Euro-Rate under the
Euro-Rate Option based on the Leverage Ratio then in effect according to the
pricing grid on Schedule 1.1(A) below the heading "Revolving Credit Euro-Rate
Spread."
The Applicable Margin shall be computed in accordance with the parameters set
forth on Schedule 1.1(A).
Assignment and Assumption Agreement shall mean an Assignment
and Assumption Agreement by and among a Purchasing Bank, a Transferor Bank and
the Agent, as Agent and on behalf of the remaining Banks, substantially in the
form of Exhibit 1.1(A).
Authorized Officer shall mean those individuals, designated by
written notice to the Agent from each Borrower, authorized to execute notices,
reports and other documents on behalf of the Loan Parties required hereunder. A
Borrower may amend such list of individuals from time to time by giving written
notice of such amendment to the Agent.
Banks shall mean the financial institutions named on Schedule
1.1(B) and their respective successors and assigns as permitted hereunder, each
of which is referred to herein as a Bank.
Base Net Worth shall mean the sum of $37,900,000 plus (i)
fifty percent (50%) of consolidated net income of the Borrowers and their
Subsidiaries for each fiscal quarter in which net income was earned (as opposed
to a net loss) during the period from February 28, 1997 through the date of
determination, plus (ii) one hundred percent (100%) of proceeds received by the
Borrowers directly or indirectly in connection with any sale of capital stock of
any of the Borrowers net of any reasonable and customary fees and expenses
incurred by the Borrowers in connection with such sale (excluding proceeds
received by any Person who holds stock of United Refining from the sale of such
stock to another Person).
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Base Rate shall mean the greater of (i) the interest rate per
annum announced from time to time by the Agent at its Principal Office as its
then-prime rate, which rate may not be the lowest rate then being charged
commercial borrowers by the Agent, or (ii) the Federal Funds Effective Rate plus
one-half of one percent (0.5%) per annum.
Base Rate Option shall mean the option of the Borrowers to
have Revolving Credit Loans or Swing Loans bear interest at the rate and under
the terms and conditions set forth in subsection 3.1.1(i) or subsection
3.1.2(ii), respectively.
Benefit Arrangement shall mean at any time an "employee
benefit plan," within the meaning of Section 3(3) of ERISA, which is neither a
Plan nor a Multiemployer Plan and which is maintained, sponsored or otherwise
contributed to by any member of the ERISA Group.
Borrowers or Borrower shall have the meanings as set forth in
the first paragraph of this Agreement.
Borrowing Base shall mean at any time the sum of (i) one
hundred percent (100%) of cash held in the Cash Collateral Account, plus (ii)
eighty percent (80%) of Qualified Accounts ("Accounts Portion"), plus (iii) the
lesser of (A) seventy percent (70%) of Qualified Inventory ("Inventory
Portion"), or (B) one hundred fifty percent (150%) of the Accounts Portion.
Borrowing Date shall mean, with respect to any Loan, the date
for the making thereof or the renewal or conversion thereof at or to the same or
a different Interest Rate Option, which shall be a Business Day.
Borrowing Tranche shall mean specified portions of Loans
outstanding as follows: (i) any Loans to which a Euro-Rate Option applies which
become subject to the same Interest Rate Option under the same Loan Request by
the Borrowers and which have the same Interest Period shall constitute one
Borrowing Tranche, and (ii) all Loans to which the Base Rate Option applies
shall constitute one Borrowing Tranche.
Business Day shall mean any day other than a Saturday or
Sunday or a legal holiday on which commercial banks are authorized or required
to be closed for business in Pittsburgh, Pennsylvania, and if the applicable
Business Day relates to any Loan to which the Euro-Rate Option applies, such day
must also be a day on which dealings are carried on in the London interbank
market.
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Cash Collateral Account shall mean the cash collateral account
maintained by each of the Borrowers with the Agent from which monies may be
withdrawn only by the Agent.
Chase shall mean Chase Lincoln Bank.
Chase Lockbox shall mean that certain lockbox maintained by
United Refining with Chase pursuant to that certain lockbox agreement dated as
of August 25, 1992.
Closing Date shall mean the Business Day on which the first
Loan shall be made, which shall be June 9, 1997.
Collateral shall mean the property of the Loan Parties in
which security interests are to be granted under the Security Agreement.
Commercial Letter of Credit shall mean any Letter of Credit
which is a commercial letter of credit issued in respect of the purchase of
goods or services by one or more of the Loan Parties in the ordinary course of
their business.
Consolidated Cash Flow from Operations for any period of
determination shall mean (i) the sum of net income, depreciation, amortization,
other non-cash charges to net income, interest expense and income tax expense
minus (ii) non-cash credits to net income, in each case of the Borrowers and
their Subsidiaries for such period determined and consolidated in accordance
with GAAP.
Consolidated Net Worth shall mean, as of any date of
determination, total stockholders' equity of the Borrowers and their
Subsidiaries as of such date determined and consolidated in accordance with
GAAP.
Debt Instrument shall mean any instrument or agreement
relating to or amending any terms or conditions applicable to any Indebtedness
of any Borrower in an amount exceeding $1,000,000, whether existing on the
Closing Date or entered into after the Closing Date.
Depository shall have the meaning assigned to such term in
Section 4.8.
Dollar, Dollars, U.S. Dollars and the symbol $ shall mean
lawful money of the United States of America.
Drawing Date shall have the meaning assigned to that term in
Section 2.9.3.2.
Environmental Complaint shall mean any written
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complaint setting forth a cause of action for personal or property damage or
natural resource damage or equitable relief, order, notice of violation,
citation, request for information issued pursuant to any Environmental Laws by
an Official Body, subpoena or other written notice of any type relating to,
arising out of, or issued pursuant to, any of the Environmental Laws or any
Environmental Conditions, as the case may be.
Environmental Conditions shall mean any conditions of the
environment, including the workplace, the ocean, natural resources (including
flora or fauna), soil, surface water, groundwater, any actual or potential
drinking water supply sources, substrata or the ambient air, relating to or
arising out of, or caused by, the use, handling, storage, treatment, recycling,
generation, transportation, release, spilling, leaking, pumping, emptying,
discharging, injecting, escaping, leaching, disposal, dumping, threatened
release or other management or mismanagement of Regulated Substances resulting
from the use of, or operations on, any Property.
Environmental Laws shall mean all federal, state, local and
foreign Laws and regulations, including permits, licenses, authorizations,
bonds, orders, judgments and consent decrees issued, or entered into, pursuant
thereto, relating to pollution or protection of human health or the environment
or employee safety in the workplace.
ERISA shall mean the Employee Retirement Income Security Act
of 1974, as the same may be amended or supplemented from time to time, and any
successor statute of similar import, and the rules and regulations thereunder,
as from time to time in effect.
ERISA Group shall mean, at any time, the Borrowers and all
members of a controlled group of corporations and all trades or businesses
(whether or not incorporated) under common control and all other entities which,
together with the Borrowers, are treated as a single employer under Section 414
of the Internal Revenue Code.
Euro-Rate shall mean, with respect to the Loans comprising any
Borrowing Tranche to which the Euro-Rate Option applies for any Interest Period,
the interest rate per annum determined by the Agent by dividing (the resulting
quotient rounded upward to the nearest 1/100th of 1% per annum) (i) the rate of
interest determined by the Agent in accordance with its usual procedures (which
determination shall be conclusive absent manifest error) to be the average of
the London interbank offered rates of interest per annum for U.S. Dollars set
forth on Telerate display page 3750 or such other display page on the Telerate
System as may replace such page to evidence the average
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16
of rates quoted by banks designated by the British Bankers' Association (or
appropriate successor or, if the British Bankers' Association or its successor
ceases to provide such quotes, a comparable replacement determined by the Agent)
two (2) Business Days prior to the first day of such Interest Period for an
amount comparable to such Borrowing Tranche and having a borrowing date and a
maturity comparable to such Interest Period by (ii) a number equal to 1.00 minus
the Euro-Rate Reserve Percentage. The Euro-Rate may also be expressed by the
following formula:
Telerate page 3750 quoted by British Bankers'
Euro-Rate = Association or appropriate successor
--------------------------------------------------
1.00 - Euro-Rate Reserve Percentage
The Euro-Rate shall be adjusted with respect to any Euro-Rate Option outstanding
on the effective date of any change in the Euro-Rate Reserve Percentage as of
such effective date. The Agent shall give prompt notice to the Borrowers of the
Euro-Rate as determined or adjusted in accordance herewith, which determination
shall be conclusive absent manifest error.
Euro-Rate Option shall mean the option of the Borrowers to
have Revolving Credit Loans bear interest at the rate and under the terms and
conditions set forth in subsection 3.1.1(ii).
Euro-Rate Reserve Percentage shall mean the maximum percentage
(expressed as a decimal rounded upward to the nearest 1/100 of 1%) as determined
by the Agent which is in effect during any relevant period, as prescribed by the
Board of Governors of the Federal Reserve System (or any successor) for
determining the reserve requirements (including supplemental, marginal and
emergency reserve requirements) with respect to eurocurrency funding (currently
referred to as "Eurocurrency Liabilities") of a member bank in such System.
Event of Default shall mean any of the events described in
Section 8.1 and referred to therein as an "Event of Default."
Expiration Date shall mean, with respect to the Revolving
Credit Commitments, the date which is the fifth anniversary of the Closing Date.
Federal Funds Effective Rate for any day shall mean the rate
per annum (based on a year of 360 days and actual days elapsed and rounded
upward to the nearest 1/100 of 1%) announced by the Federal Reserve Bank of New
York (or any successor) on such day as being the weighted average of the rates
on overnight federal funds transactions arranged by
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federal funds brokers on the previous trading day, as computed and announced by
such Federal Reserve Bank (or any successor) in substantially the same manner as
such Federal Reserve Bank computes and announces the weighted average it refers
to as the "Federal Funds Effective Rate" as of the date of this Agreement;
provided, if such Federal Reserve Bank (or its successor) does not announce such
rate on any day, the "Federal Funds Effective Rate" for such day shall be the
Federal Funds Effective Rate for the last day on which such rate was announced.
Financial Projections shall have the meaning assigned to that
term in subsection 5.1.9(ii).
Fixed Charge Coverage Ratio shall mean the ratio of
Consolidated Cash Flow from Operations plus rental expense for operating leases
to interest expense plus rental expense for operating leases.
Fixed Rate shall mean an interest rate per annum quoted by PNC
Bank as a numerical percentage (and not as a spread over another rate such as
the Euro-Rate) which shall be available for one (1) Business Day.
Fixed Rate Option shall mean the option of the Borrowers to
have Swing Loans bear interest at the rate and under the terms and conditions
set forth in subsection 3.1.2(i).
GAAP shall mean generally accepted accounting principles as
are in effect from time to time, subject to the provisions of Section 1.3, and
applied on a consistent basis both as to classification of items and amounts.
Governmental Acts shall have the meaning assigned to that term
in Section 2.9.8.
Guarantor shall mean each of the parties to this Agreement
which is designated as a "Guarantor" on the signature page hereof and any other
party which joins this Agreement as a Guarantor after the date hereof.
Guarantor Joinder shall mean a joinder by a Person as a
Guarantor under this Agreement, the Guaranty Agreement and the other Loan
Documents in the form of Exhibit (G)(1).
Guaranty of any Person shall mean any obligation of such
Person guaranteeing or in effect guaranteeing any liability or obligation of any
other Person in any manner, whether directly or indirectly, including any
agreement to indemnify or hold harmless any other Person, any performance bond
or other suretyship arrangement and any other form of
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assurance against loss, except endorsement of negotiable or other instruments
for deposit or collection in the ordinary course of business.
Guaranty Agreement shall mean the Guaranty and Suretyship
Agreement in substantially the form of Exhibit 1.1(G)(2) executed and delivered
by each of the Guarantors to the Agent for the benefit of the Banks.
Hedging Obligations shall mean with respect to any Person, the
obligations of such Person pursuant to any interest rate swap agreement,
interest rate collar agreement or other similar agreement or arrangement
relating to interest rates.
Historical Statements shall have the meaning assigned to that
term in subsection 5.1.9(i).
Indebtedness shall mean, as to any Person at any time, any and
all indebtedness, obligations or liabilities (whether matured or unmatured,
liquidated or unliquidated, direct or indirect, absolute or contingent, or joint
or several) of such Person for or in respect of: (i) borrowed money, (ii)
amounts raised under or liabilities in respect of any note purchase or
acceptance credit facility, (iii) reimbursement obligations (contingent or
otherwise) under any letter of credit, currency swap agreement, interest rate
swap, cap, collar or floor agreement or other interest rate management device,
(iv) any other transaction (including capitalized leases and conditional sales
agreements) having the commercial effect of a borrowing of money entered into by
such Person to finance its operations or capital requirements (but not including
trade payables and accrued expenses incurred in the ordinary course of business
which are not represented by a promissory note or other evidence of indebtedness
and which are not more than sixty (60) days past due), or (v) any Guaranty of
Indebtedness for borrowed money; provided that any Indebtedness of any Loan
Party that is Guaranteed by another Loan Party shall only be counted once in the
covenants of the Loan Parties hereunder.
Indenture shall mean that certain Indenture, dated as of June
9, 1997, among each of the Borrowers, certain of their Subsidiaries and IBJ
Schroder Bank & Trust Company, as trustee pursuant to which the Senior Unsecured
Notes are to be issued.
Ineligible Security shall mean any security which may not be
underwritten or dealt in by member banks of the Federal Reserve System under
Section 16 of the Banking Act of 1933 (12 U.S.C. Section 24, Seventh), as
amended.
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19
Insolvency Proceeding shall mean, with respect to any Person,
(a) a case, action or proceeding with respect to such Person (i) before any
court or any other Official Body under any bankruptcy, insolvency,
reorganization or other similar Law now or hereafter in effect, or (ii) for the
appointment of a receiver, liquidator, assignee, custodian, trustee,
sequestrator, conservator (or similar official) of any Loan Party or otherwise
relating to the liquidation, dissolution, winding-up or relief of such Person,
or (b) any general assignment for the benefit of creditors, composition,
marshaling of assets for creditors, or other similar arrangement in respect of
such Person's creditors, generally, or any substantial portion of its creditors,
undertaken under any Law.
Intercompany Subordination Agreement shall mean a
Subordination Agreement among the Loan Parties in the form attached hereto as
Exhibit 1.1(I).
Interest Period shall have the meaning assigned to such term
in Section 3.2.
Interest Rate Option shall mean any Euro-Rate Option, Base
Rate Option or Fixed Rate Option.
Interim Statements shall have the meaning assigned to that
term in subsection 5.1.9(i).
Internal Revenue Code shall mean the Internal Revenue Code of
1986, as the same may be amended or supplemented from time to time, and any
successor statute of similar import, and the rules and regulations thereunder,
as from time to time in effect.
Inventory shall mean any and all crude oil, motor gasoline and
asphalt, including without limitation goods in transit, wheresoever located
(including without limitation pipelines whether leased or owned) and whether now
owned or hereafter acquired by a Loan Party, which are or may at any time be
held as raw materials, finished goods, work-in-process, and all supplies or
materials used or consumed in a Loan Party's business of producing crude oil,
asphalt and motor gasoline or held for sale or lease, including, without
limitation, (a) all such property the sale or other disposition of which has
given rise to Accounts and which has been returned to or repossessed or stopped
in transit by a Loan Party, and (b) all packing, shipping and advertising
materials relating to all or any such property, provided, however, motor
gasoline after it is processed and leaves the refinery facility located in
Warren, Pennsylvania shall be excluded from Inventory. All Inventory, whether
Qualified Inventory or not, shall be subject to the Banks' Prior Security
Interest.
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20
Investment Consideration shall mean the amount of cash paid by
the Loan Parties, liabilities or other obligations, whether contingent or
otherwise, assumed or incurred in connection with any investment, including
without limitation loans, advances or capital contributions in any other Person,
any Guaranty of obligations of another Person, all purchases (or other
acquisitions for consideration) by any Loan Party of Indebtedness, capital stock
or other securities of any other Person.
Labor Contracts shall mean all employment agreements,
employment contracts, collective bargaining agreements and other agreements
among any Loan Party or Subsidiary of a Loan Party and its employees.
Law shall mean any law (including common law), constitution,
statute, treaty, regulation, rule, ordinance, opinion, release, ruling, order,
injunction, writ, decree or award of any Official Body.
Letter of Credit shall have the meaning assigned to that term
in Section 2.9.1.
Letter of Credit Borrowing shall mean an extension of credit
resulting from a drawing under any Letter of Credit which shall not have been
reimbursed on the date when made and shall not have been converted into a
Revolving Credit Loan under Section 2.9.3.2.
Letter of Credit Fee shall mean the Letter of Credit fee based
on the Leverage Ratio then in effect according to the pricing grid on Schedule
1.1(A) below the heading "Letter of Credit Fee" computed in accordance with the
parameters set forth on Schedule 1.1(A).
Letters of Credit Outstanding shall mean at any time the sum
of (i) the aggregate undrawn face amount of outstanding Letters of Credit, and
(ii) the aggregate amount of all unpaid and outstanding Reimbursement
Obligations.
Leverage Ratio shall mean
(a) as of the Closing Date the ratio of (x) consolidated
Indebtedness of Borrowers and their Subsidiaries on the Closing Date less the
amount of cash of the Borrowers and their Subsidiaries as of the Closing Date to
(y) the Consolidated Cash Flow from Operations for the four fiscal quarters
ending on February 28, 1997; and
(b) as of the end of each fiscal quarter ending after the
Closing Date, the ratio of (x) consolidated
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21
Indebtedness of Borrowers and their Subsidiaries on such date less the amount of
cash of the Borrowers and their Subsidiaries as of such date to (y) the
Consolidated Cash Flow from Operations for the four fiscal quarters ending on
such date.
Lien shall mean any mortgage, deed of trust, pledge, lien,
security interest, charge or other encumbrance or security arrangement of any
nature whatsoever, whether voluntarily or involuntarily given, including any
conditional sale or title retention arrangement, and any assignment, deposit
arrangement or lease intended as, or having the effect of, security and any
filed financing statement or other notice of any of the foregoing (whether or
not a lien or other encumbrance is created or exists at the time of the filing).
LLC Interests shall have the meaning given to such term in
Section 5.1.3.
Loan Documents shall mean this Agreement, the Agent's Letter,
the Guaranty Agreement, the Intercompany Subordination Agreement, the Notes, the
Lockbox Agreements, the Security Agreement, the Wire Transfer Agreements, the
Letters of Credit and any other instruments, certificates or documents delivered
or contemplated to be delivered hereunder or thereunder or in connection
herewith or therewith, as the same may be supplemented or amended from time to
time in accordance herewith or therewith, and Loan Document shall mean any of
the Loan Documents.
Loan Parties shall mean the Borrowers and the Guarantors.
Loan Request shall have the meaning given to such term in
Section 2.4.
Loans shall mean collectively, and Loan shall mean separately,
all Revolving Credit Loans and Swing Loans or any Revolving Credit Loan or Swing
Loan.
Lockbox Agreements shall mean collectively any lockbox
agreements between the Borrowers and PNC, National City and Chase referred to in
the definitions of the PNC Lockbox, National City Lockbox and Chase Lockbox,
respectively.
Lockboxes shall mean collectively the PNC Lockbox, National
City Lockbox and Chase Lockbox.
Material Adverse Change shall mean any set of circumstances or
events which (a) has or could reasonably be expected to have any material
adverse effect whatsoever upon the validity or enforceability of this Agreement
or any other Loan
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22
Document, (b) is or could reasonably be expected to be material and adverse to
the business, properties, assets, financial condition, results of operations or
prospects of the Loan Parties taken as a whole, (c) impairs materially or could
reasonably be expected to impair materially the ability of the Loan Parties
taken as a whole to duly and punctually pay or perform its Indebtedness, or (d)
impairs materially or could reasonably be expected to impair materially the
ability of the Agent or any of the Banks, to the extent permitted, to enforce
their legal remedies pursuant to this Agreement or any other Loan Document.
Month, with respect to an Interest Period under the Euro-Rate
Option, shall mean the interval between the days in consecutive calendar months
numerically corresponding to the first day of such Interest Period. If any
Euro-Rate Interest Period begins on a day of a calendar month for which there is
no numerically corresponding day in the month in which such Interest Period is
to end, the final month of such Interest Period shall be deemed to end on the
last Business Day of such final month.
More Favorable Provision shall have the meaning given to such
term in Section 7.1.15.
Multiemployer Plan shall mean any employee benefit plan which
is a "multiemployer plan" within the meaning of Section 4001(a)(3) of ERISA and
to which a Borrower or any member of the ERISA Group is then making or accruing
an obligation to make contributions or, within the preceding five Plan years,
has made or had an obligation to make such contributions.
Multiple Employer Plan shall mean a Plan which has two or more
contributing sponsors (including a Borrower or any member of the ERISA Group) at
least two of whom are not under common control, as such a plan is described in
Sections 4063 and 4064 of ERISA.
National City shall mean National City Bank of Pennsylvania,
successor to Integra Bank.
National City Lockbox shall mean that certain lockbox
maintained by United Refining with National City pursuant to that certain
lockbox agreement dated as of July 1, 1991.
Note Agreements shall mean collectively (i) that certain Note
Agreement dated as of December 1, 1988, providing for the issuance by United
Refining of $110,000,000 of its 11.50% Senior Unsecured Revolving Credit Notes
due December 1,
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23
1998, and (ii) those certain Note Purchase Agreements, each dated as of January
18, 1994, providing for the issuance by United Refining of $41,750,000 of its
11.50% Senior Notes due 2003, as amended.
Notes shall mean the Revolving Credit Notes and the Swing
Note.
Notices shall have the meaning assigned to that term in
Section 10.6.
Obligation shall mean any obligation or liability of any of
the Loan Parties to the Agent or any of the Banks, howsoever created, arising or
evidenced, whether direct or indirect, absolute or contingent, now or hereafter
existing, or due or to become due, under or in connection with this Agreement,
the Notes, the Letters of Credit, the Agent's Letter or any other Loan Document.
Official Body shall mean any national, federal, state, local
or other government or political subdivision or any agency, authority, bureau,
central bank, commission, department or instrumentality of either, or any court,
tribunal, grand jury or arbitrator, in each case whether foreign or domestic.
Other Permitted Investment shall have the meaning given to
such term in Section 7.2.4(v).
Overhead Reimbursement shall have the meaning given to such
term in Section 7.2.8.
Participation Advance shall mean, with respect to any Bank,
such Bank's payment in respect of its participation in a Letter of Credit
Borrowing according to its Ratable Share pursuant to Section 2.9.4.
Partnership Interests shall have the meaning given to such
term in Section 5.1.3.
PBGC shall mean the Pension Benefit Guaranty Corporation
established pursuant to Subtitle A of Title IV of ERISA or any successor.
Permitted Acquisition shall have the meaning assigned to such
term in Section 7.2.6.
Permitted Investments shall mean:
(i) direct obligations of the United States of America
or any agency or instrumentality thereof or obligations backed by the full faith
and credit of the United States of America maturing in twelve (12) months or
less from the date of acquisition;
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(ii) commercial paper maturing in 180 days or less,
rated not lower than A-1 by Standard & Poor's or P-1 by Moody's Investors
Service, Inc. on the date of acquisition;
(iii) demand deposits, time deposits or certificates of
deposit maturing within one year in commercial banks whose obligations are rated
A-1, A or the equivalent or better by Standard & Poor's on the date of
acquisition; and
(iv) mutual funds which hold exclusively investments
described in clauses (i), (ii) or (iii) above.
Permitted Liens shall mean:
(i) Liens for taxes, assessments, or similar charges,
incurred in the ordinary course of business and which are not yet due and
payable;
(ii) Pledges or deposits made in the ordinary course of
business to secure payment of workmen's compensation, or to participate in any
fund in connection with workmen's compensation, unemployment insurance, old-age
pensions or other social security programs;
(iii) Liens of mechanics, materialmen, warehousemen,
carriers, or other like Liens, securing obligations incurred in the ordinary
course of business that are not yet due and payable and Liens of landlords
securing obligations to pay lease payments that are not yet due and payable or
in default;
(iv) Good-faith pledges or deposits made in the ordinary
course of business to secure performance of bids, tenders, contracts (other than
for the repayment of borrowed money) or leases, not in excess of the aggregate
amount due thereunder, or to secure statutory obligations, or surety, appeal,
indemnity, performance or other similar bonds required in the ordinary course of
business;
(v) Encumbrances consisting of zoning restrictions,
easements or other restrictions on the use of real property, none of which
materially impairs the use of such property or the value thereof, and none of
which is violated in any material respect by existing or proposed structures or
land use;
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(vi) Liens, security interests and mortgages in favor of
the Agent for the benefit of the Banks;
(vii) Liens on property leased by any Loan Party or
Subsidiary of a Loan Party under capital and operating leases securing
obligations of such Loan Party or Subsidiary to the lessor under such leases;
(viii) Any Lien existing on the date of this Agreement
and described on Schedule 1.1(P), securing Indebtedness then existing and any
Lien on the same asset securing Indebtedness which refinances the Indebtedness
securing such Lien provided that the principal amount secured thereby is not
increased, and no additional assets become subject to such Lien;
(ix) Purchase Money Security Interests; and
(x) The following, (A) if the validity or amount thereof
is being contested in good faith by appropriate and lawful proceedings
diligently conducted so long as levy and execution thereon have been stayed and
continue to be stayed, or (B) if a final judgment is entered and such judgment
is discharged, bonded or stayed (and continue to be stayed for all times
thereafter) within thirty (30) days of entry, and in either case they do not
affect the Collateral or, in the aggregate, materially impair the ability of any
Loan Party to perform its Obligations hereunder or under the other Loan
Documents:
(1) Claims, Liens or encumbrances upon, and defects of title
to, real or personal property other than the Collateral, including
any attachment of personal or real property or other legal process
prior to adjudication of a dispute on the merits; and
(2) Liens resulting from final judgments or orders
described in Section 8.1.6;
(xi) any Lien granted to a commodity broker in
connection with an account created and maintained by United Refining to engage
in the trading of futures contracts on a recognized exchange for the purpose or
reducing the price risk associated with holding or purchasing crude oil and
refined petroleum products inventory; provided that, (x) any such Lien shall be
confined solely to futures contracts permitted by clause (y) below and to cash
equivalents in an amount not exceeding $5,000,000 on deposit in such account and
(y) with respect to such account, neither United Refining nor any Subsidiary
shall enter into any obligations in any hedging
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26
transactions, the effect of which would be to cause more than 2,500,000 barrels
of crude oil or more than 2,500,000 barrels of refined petroleum products to be
at any time subject to fixed-price contracts to which United Refining or any
Subsidiary is a party. A contract for the purchase of crude oil or refined
petroleum products shall not be deemed to be a "fixed-price contract" for
purposes of the proviso to the immediately preceding sentence if the price
thereunder is based upon and varies with Canadian price postings for the same or
a similar commodity, prices for the same or a similar commodity on the New York
Mercantile Exchange or any other index which reflects market prices.
(xii) any Lien on an asset acquired in a Permitted
Acquisition provided that the asset is not of the category of any of the assets
described in the definition of "Collateral" contained in the Security Agreement
and securing Indebtedness incurred in connection with or assumed in such
Permitted Acquisition.
(xiii) Cash collateral securing surety bonds issued in
the ordinary course of the business of the Loan Parties;
(xiv) Liens in favor of the "Escrow Agent" against the
"Escrow Deposit" as such terms are defined in the Escrow Agreement dated as of
June 9, 1997 among IBJ Schroder Bank & Trust Company, both as escrow agent and
as trustee, and United Refining.
Permitted Voluntary Dissolution shall have the meaning
assigned to such term in Section 7.1.1.
Person shall mean any individual, corporation, partnership,
limited liability company, association, joint-stock company, trust,
unincorporated organization, joint venture, government or political subdivision
or agency thereof, or any other entity.
Plan shall mean at any time an employee pension benefit plan
(including a Multiple Employer Plan, but not a Multiemployer Plan) which is
covered by Title IV of ERISA or is subject to the minimum funding standards
under Section 412 of the Internal Revenue Code and either (i) is maintained by
any member of the ERISA Group for employees of any member of the ERISA Group, or
(ii) has at any time within the preceding five years been maintained by any
entity which was at such time a member of the ERISA Group for employees of any
entity which was at such time a member of the ERISA Group.
PNC Bank shall mean PNC Bank, National
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27
Association, its successors and assigns.
PNC Lockbox shall mean that certain lockbox maintained by
United Refining with the Agent pursuant to that certain lockbox agreement dated
as of February 7, 1993.
Potential Default shall mean any event or condition which with
notice, passage of time or a determination by the Agent or the Required Banks,
or any combination of the foregoing, would constitute an Event of Default.
Principal Office shall mean the main banking office of the
Agent in Pittsburgh, Pennsylvania.
Prior Security Interest shall mean a valid and enforceable
perfected first-priority security interest under the Uniform Commercial Code in
the UCC Collateral which is subject only to Liens for taxes not yet due and
payable to the extent such prospective tax payments are given priority by
statute or Purchase Money Security Interests as permitted hereunder or to
Permitted Liens.
Prohibited Transaction shall mean any prohibited transaction
as defined in Section 4975 of the Internal Revenue Code or Section 406 of ERISA
for which neither an individual nor a class exemption has been issued by the
United States Department of Labor.
Property shall mean all real property, both owned and leased,
of any Loan Party or Subsidiary of a Loan Party.
Purchase Money Security Interest shall mean Liens upon
tangible personal property securing loans to any Loan Party or Subsidiary of a
Loan Party or deferred payments by such Loan Party or Subsidiary for the
purchase of such tangible personal property.
Purchasing Bank shall mean a Bank which becomes a party to
this Agreement by executing an Assignment and Assumption Agreement.
Qualified Accounts shall mean any Accounts which the Agent in
its sole discretion reasonably exercised determines to have met all of the
minimum requirements set forth on Schedule 1.1(Q)(i).
Qualified Inventory shall mean any Inventory which the Agent
in its sole discretion reasonably exercised determines to have met all of the
minimum requirements set forth on Schedule 1.1(Q)(ii). Inventory which meets
such requirements shall be valued for purposes of computing the Borrowing Base
at
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the lower of (i) its book value on a FIFO basis or (ii) its market value
computed by multiplying the quantity of such Qualified Inventory by the unit
price per volume reported on the date of computation by (a) Oil Price
Information Services for products if such Inventory consists of refining
products or Poten and Partners, Inc. for asphalt if such Inventory consists of
asphalt, (b) the New York Merchantile Exchange if such Inventory consists of
crude oil; the market value of crude oil computed pursuant to this clause
(ii)(b) shall be reduced by the applicable crude stream discounts for oil
pricing.
Ratable Share shall mean the proportion that a Bank's
Revolving Credit Commitment bears to the Revolving Credit Commitments of all of
the Banks.
Regulated Substances shall mean any substance, including any
solid, liquid, semisolid, gaseous, thermal, thoriated or radioactive material,
refuse, garbage, wastes, chemicals, petroleum products, byproducts, coproducts,
impurities, dust, scrap, heavy metals, defined as a "hazardous substance,"
"pollutant," "pollution," "contaminant," "hazardous or toxic substance,"
"extremely hazardous substance," "toxic chemical," "toxic waste," "hazardous
waste," "industrial waste," "residual waste," "solid waste," "municipal waste,"
"mixed waste," "infectious waste," "chemotherapeutic waste," "medical waste," or
"regulated substance" or any related materials, substances or wastes as now or
hereafter defined pursuant to any Environmental Laws, ordinances, rules,
regulations or other directives of any Official Body, the generation,
manufacture, extraction, processing, distribution, treatment, storage, disposal,
transport, recycling, reclamation, use, reuse, spilling, leaking, dumping,
injection, pumping, leaching, emptying, discharge, escape, release or other
management or mismanagement of which is regulated by the Environmental Laws.
Regulation U shall mean Regulation U, T, G or X as promulgated
by the Board of Governors of the Federal Reserve System, as amended from time to
time.
Reimbursement Obligation shall have the meaning assigned to
such term in Section 2.9.3.2.
Reportable Event shall mean a reportable event described in
Section 4043 of ERISA and regulations thereunder with respect to a Plan or
Multiemployer Plan.
Required Banks shall mean:
(i) if there are no Loans, Reimbursement Obligations or
Letter of Credit Borrowings outstanding, Banks whose Revolving Credit
Commitments aggregate at least sixty-six
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and two-thirds percent (66 2/3 %) of the Revolving Credit Commitments of all of
the Banks, or
(ii) if there are Loans, Reimbursement Obligations or
Letter of Credit Borrowings outstanding, any Bank or group of Banks if the sum
of the Loans, Reimbursement Obligations and Letter of Credit Borrowings of such
Banks then outstanding aggregates at least sixty-six and two-thirds percent (66
2/3 %) of the total principal amount of all of the Loans, Reimbursement
Obligations and Letter of Credit Borrowings then outstanding. Reimbursement
Obligations and Letter of Credit Borrowings shall be deemed, for purposes of
this definition, to be in favor of the Agent and not a participating Bank if
such Bank has not made its Participation Advance in respect thereof and shall be
deemed to be in favor of such Bank to the extent of its Participation Advance if
it has made its Participation Advance in respect thereof.
Revolving Credit Commitment shall mean, as to any Bank at any
time, the amount initially set forth opposite its name on Schedule 1.1(B) in the
column labeled "Amount of Commitment for Revolving Credit Loans," and thereafter
on Schedule I to the most recent Assignment and Assumption Agreement, and
Revolving Credit Commitments shall mean the aggregate Revolving Credit
Commitments of all of the Banks.
Revolving Credit Loans shall mean collectively, and Revolving
Credit Loan shall mean separately, all Revolving Credit Loans or any Revolving
Credit Loan made by the Banks or one of the Banks to a Borrower or in the
aggregate to the Borrowers pursuant to Section 2.1 or 2.9.3.
Revolving Credit Notes shall mean collectively, and Revolving
Credit Note shall mean separately, all the Revolving Credit Notes of the
Borrowers in the form of Exhibit 1.1(R) evidencing the Revolving Credit Loans
together with all amendments, extensions, renewals, replacements, refinancings
or refundings thereof in whole or in part.
Revolving Facility Usage shall mean at any time the sum of the
Revolving Credit Loans outstanding and the Letters of Credit Outstanding.
Schedule of Accounts shall mean for each Borrower a detailed,
aged trial balance of all then-existing Accounts in form and substance
satisfactory to Agent, specifying in each case the names, addresses, face amount
and dates of invoice(s) for each Account Debtor obligated on an Account so
listed and, if requested by the Agent, copies of proof of delivery and customer
statements and the original copy of all documents, including, without
limitation, repayment histories and present
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status reports, and such other matters and information relating to the status of
the Accounts and/or the Account Debtors so scheduled as the Agent may from time
to time reasonably request.
Schedule of Inventory shall mean for each Borrower a current
schedule of Inventory in form and substance satisfactory to the Agent on a FIFO
basis, itemizing and describing the kind, type, quality and quantity of
Inventory, as determined by physical counts taken annually, such Borrower's
costs therefor and selling price thereof, and the weekly withdrawals therefrom
and additions thereto.
Section 20 Subsidiary shall mean the Subsidiary of the bank
holding company controlling any Bank, which Subsidiary has been granted
authority by the Federal Reserve Board to underwrite and deal in certain
Ineligible Securities.
Security Agreement shall mean the Security Agreement in
substantially the form of Exhibit 1.1(S)(1) executed and delivered by each of
the Loan Parties to the Agent for the benefit of the Banks.
Senior Unsecured Notes shall mean the $200,000,000 of 10.75%
Series A Senior Notes due 2007 issued by United Refining under the Indenture.
Servicing Agreement shall mean that certain agreement between
the Red Apple Group ("RAG") and United Refining. to be entered into on the
Closing Date, pursuant to which United Refining shall pay to RAG for the use of
RAG's New York headquarters, as such agreement may be amended from time to time,
and any agreement concerning the same subject matter between the United Refining
and John A Catsimatidis and/or any of his Affiliates, whether such agreement is
a replacement thereof or in addition thereto.
Settlement Date shall mean the Thursday of each week (if such
day is a Business Day and, if not, the next succeeding Business Day) and any
other Business Day on which the Agent elects to effect settlement pursuant to
Section 4.7.
Shares shall have the meaning assigned to that term in Section
5.1.2.
Standard & Poor's shall mean Standard & Poor's Ratings
Services, a division of The McGraw-Hill Companies, Inc.
Standby Letter of Credit shall mean a Letter of Credit issued
to support obligations of one or more of the Loan Parties, contingent or
otherwise, which finance the working capital and business needs of the Loan
Parties incurred in the
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ordinary course of business.
Subsidiary of any Person at any time shall mean (i) any
corporation or trust of which fifty percent (50%) or more (by number of shares
or number of votes) of the outstanding capital stock or shares of beneficial
interest normally entitled to vote for the election of one or more directors or
trustees (regardless of any contingency which does or may suspend or dilute the
voting rights) is at such time owned directly or indirectly by such Person or
one or more of such Person's Subsidiaries, (ii) any partnership of which such
Person is a general partner or of which fifty percent (50%) or more of the
partnership interests is at the time directly or indirectly owned by such Person
or one or more of such Person's Subsidiaries, (iii) any limited liability
company of which such Person is a member or of which fifty percent (50%) or more
of the limited liability company interests is at the time directly or indirectly
owned by such Person or one or more of such Person's Subsidiaries, or (iv) any
corporation, trust, partnership, limited liability company or other entity which
is controlled by such Person or one or more of such Person's Subsidiaries.
Subsidiary Shares shall have the meaning assigned to that term
in Section 5.1.3.
Swing Loan Commitment shall mean PNC Bank's commitment to make
Swing Loans to the Borrowers pursuant to Section 2.1.2 hereof in an aggregate
principal amount up to but not in excess of $5,000,000 and which shall
automatically terminate upon the termination of the Revolving Credit
Commitments.
Swing Note shall mean the Swing Note of the Borrowers in the
form of Exhibit 1.1(S)(2) evidencing the Swing Loans, together with all
amendments, extensions, renewals, replacements, refinancings or refundings
thereof in whole or in part.
Swing Loan Request shall mean a request for Swing Loans made
in accordance with Section 2.4.2 hereof.
Swing Loans shall mean collectively, and Swing Loan shall mean
separately, all Swing Loans or any Swing Loan made by PNC Bank to a Borrower
pursuant to Section 2.1.2 hereof.
Syndications Period shall mean the period between the Closing
Date and the earlier of the following dates: (a) the date on which the Revolving
Credit Commitment of PNC Bank has been reduced below $21,000,000, or (b) the
date which is one hundred twenty (120) days after the Closing Date.
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Tax Sharing Agreement shall mean that certain Tax Sharing
Agreement dated June 9, 1997, among the Borrowers and certain Subsidiaries and
Affiliates of the Borrowers.
Transferor Bank shall mean the selling Bank pursuant to an
Assignment and Assumption Agreement.
Uniform Commercial Code shall have the meaning assigned to
that term in Section 5.1.16.
Wire Transfer Agreements shall mean the Agreements in the form
of Exhibit 1.1(W) to be entered into among the Agent, the Borrowers and National
City or Chase upon request by the Agent; such agreements provide that Chase or
National City, as the case may be, shall, upon request by the Agent, wire
transfer into the Cash Collateral Account funds received in the Chase Lockbox or
National City Lockbox within 24 hours of their receipt thereof.
1.2 Construction.
Unless the context of this Agreement otherwise clearly requires, the
following rules of construction shall apply to this Agreement and each of the
other Loan Documents:
1.2.1 Number; Inclusion.
references to the plural include the singular, the plural, the
part and the whole; "or" has the inclusive meaning represented by the phrase
"and/or," and "including" has the meaning represented by the phrase "including
without limitation";
1.2.2 Determination.
references to "determination" of or by the Agent or the Banks
shall be deemed to include good-faith estimates by the Agent or the Banks (in
the case of quantitative determinations) and good-faith beliefs by the Agent or
the Banks (in the case of qualitative determinations), and such determination
shall be conclusive absent manifest error;
1.2.3 Agent's Discretion and Consent.
whenever the Agent or the Banks are granted the right herein
to act in its or their sole discretion or to grant or withhold consent such
right shall be exercised in good faith;
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1.2.4 Documents Taken as a Whole.
the words "hereof," "herein," "hereunder," "hereto" and
similar terms in this Agreement or any other Loan Document refer to this
Agreement or such other Loan Document as a whole and not to any particular
provision of this Agreement or such other Loan Document;
1.2.5 Headings.
the section and other headings contained in this Agreement or
such other Loan Document and the Table of Contents (if any) preceding this
Agreement or such other Loan Document are for reference purposes only and shall
not control or affect the construction of this Agreement or such other Loan
Document or the interpretation thereof in any respect;
Implied References to This Agreement.
article, section, subsection, clause, schedule and exhibit
references are to this Agreement or other Loan Document, as the case may be,
unless otherwise specified;
1.2.7 Persons.
reference to any Person includes such Person's successors and
assigns but, if applicable, only if such successors and assigns are permitted by
this Agreement or such other Loan Document, as the case may be, and reference to
a Person in a particular capacity excludes such Person in any other capacity;
1.2.8 Modifications to Documents.
reference to any agreement (including this Agreement and any
other Loan Document together with the schedules and exhibits hereto or thereto),
document or instrument means such agreement, document or instrument as amended,
modified, replaced, substituted for, superseded or restated;
1.2.9 From, To and Through.
relative to the determination of any period of time, "from"
means "from and including," "to" means "to but excluding," and "through" means
"through and including"; and
1.2.10 Shall; Will.
references to "shall" and "will" are intended to have the same
meaning.
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1.3 Accounting Principles.
Except as otherwise provided in this Agreement, all
computations and determinations as to accounting or financial matters and all
financial statements to be delivered pursuant to this Agreement shall be made
and prepared in accordance with GAAP (including principles of consolidation
where appropriate), and all accounting or financial terms shall have the
meanings ascribed to such terms by GAAP; provided, however, that all accounting
terms used in Section 7.2 [Negative Covenants] (and all defined terms used in
the definition of any accounting term used in Section 7.2 shall have the meaning
given to such terms (and defined terms) under GAAP as in effect on the date
hereof applied on a basis consistent with those used in preparing the Annual
Statements referred to in subsection 5.1.9(i) [Historical Statements]. In the
event of any change after the date hereof in GAAP, and if such change would
result in the inability to determine compliance with the financial covenants set
forth in Section 7.2 based upon a Borrower's regularly prepared financial
statements by reason of the preceding sentence, then the parties hereto agree to
endeavor, in good faith, to agree upon an amendment to this Agreement that would
adjust such financial covenants in a manner that would not affect the substance
thereof, but would allow compliance therewith to be determined in accordance
with such Borrower's financial statements at that time provided further that any
demonstration of compliance or other matter may give effect to any "push down"
basis of accounting which any Loan Party may hereafter adopt pursuant to Staff
Accounting Bulletin No. 54 (November 3, 1983) of the Securities and Exchange
Commission, or any successor regulation or bulletin or any change in GAAP.
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2. REVOLVING CREDIT AND SWING LOAN FACILITIES
2.1 Revolving Credit Commitments and Swing Loan Commitments.
2.1.1 Revolving Credit Commitments.
Subject to the terms and conditions hereof and relying upon
the representations and warranties herein set forth, each Bank severally agrees
to make revolving credit loans ("Revolving Credit Loans") to the Borrowers at
any time or from time to time on or after the date hereof to the Expiration
Date, provided that after giving effect to such Loan, the aggregate amount of
Loans from such Bank shall not exceed such Bank's Revolving Credit Commitment
minus such Bank's Ratable Share of the Letters of Credit Outstanding. Within
such limits of time and amount and subject to the other provisions of this
Agreement, each Borrower may borrow, repay and reborrow pursuant to this Section
2.1.
2.1.2 Swing Loan Commitment.
Subject to the terms and conditions hereof and relying upon
the representations and warranties herein set forth, and in order to facilitate
loans and repayments between Settlement Dates, PNC Bank may, at its option,
cancelable at any time for any reason whatsoever, make swing loans (the "Swing
Loans") to a Borrower at any time or from time to time after the date hereof to,
but not including, the Expiration Date, in an aggregate principal amount up to
the Swing Loan Commitment, provided that the aggregate principal amount of PNC
Bank's Swing Loans, the Revolving Credit Loans of all the Banks at any one time
outstanding and the aggregate Letters of Credit Outstanding shall not exceed the
Revolving Credit Commitments of all the Banks. Within such limits of time and
amount and subject to the other provisions of this Agreement, each Borrower may
borrow, repay and reborrow pursuant to this Section 2.1.2
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2.2 Nature of Banks' Obligations With Respect to Revolving Credit
Loans.
Each Bank shall be obligated to participate in each request for
Revolving Credit Loans pursuant to Section 2.4 [Revolving Credit Loan Requests]
in accordance with its Ratable Share. The aggregate of each Bank's Revolving
Credit Loans outstanding hereunder to the Borrowers at any time shall never
exceed its Revolving Credit Commitment minus its Ratable Share of the Letter of
Credit Outstandings. The obligations of each Bank hereunder are several. The
failure of any Bank to perform its obligations hereunder shall not affect the
Obligations of the Borrowers to any other party nor shall any other party be
liable for the failure of such Bank to perform its obligations hereunder. The
Banks shall have no obligation to make Revolving Credit Loans hereunder on or
after the Expiration Date.
Commitment Fees.
Accruing from the date hereof until the Expiration Date, the
Borrowers, jointly and severally, agree to pay to the Agent for the account of
each Bank, as consideration for such Bank's Revolving Credit Commitment
hereunder, a nonrefundable commitment fee (the "Commitment Fee") equal to three
eighths of one percent (3/8%) per annum (computed on the basis of a year of 365
or 366 days, as the case may be, and actual days elapsed) on the average daily
difference between the amount of (i) such Bank's Revolving Credit Commitment, as
the same may be constituted from time to time (for purposes of this computation,
PNC Bank's Swing Loans shall be deemed to be borrowed amounts under its
Revolving Credit Commitment), and (ii) the principal amount of such Bank's
Ratable Share of the Revolving Facility Usage. All Commitment Fees shall be
payable in arrears on the first Business Day of each June, September, December
and March after the date hereof and on the Expiration Date or upon acceleration
of the Notes.
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2.4 Loan Requests.
2.4.1 Revolving Credit Loan Requests
Except as otherwise provided herein, a Borrower may from time
to time prior to the Expiration Date request the Banks to make Revolving Credit
Loans, or renew or convert the Interest Rate Option applicable to existing
Revolving Credit Loans pursuant to Section 3.2 [Interest Periods], by delivering
to the Agent, not later than 10:00 a.m., Pittsburgh time, (i) two (2) Business
Days prior to the proposed Borrowing Date with respect to the making of
Revolving Credit Loans to which the Euro-Rate Option applies or the conversion
to or the renewal of the Euro-Rate Option for any Loans; and (ii) one (1)
Business Day prior to either the proposed Borrowing Date with respect to the
making of a Revolving Credit Loan to which the Base Rate Option applies or the
last day of the preceding Interest Period with respect to the conversion to the
Base Rate Option for any Loan, of a duly completed request therefor
substantially in the form of Exhibit 2.4.1 or a request by telephone immediately
confirmed in writing by letter, facsimile or telex in such form (each, a "Loan
Request"), it being understood that the Agent may rely on the authority of any
individual making such a telephonic request without the necessity of receipt of
such written confirmation. Each Loan Request shall be irrevocable and shall
specify (i) the proposed Borrowing Date; (ii) the aggregate amount of the
proposed Loans comprising each Borrowing Tranche, which shall be in integral
multiples of $500,000 and not less than $2,000,000 for each Borrowing Tranche to
which the Euro-Rate Option applies and not less than the lesser of $1,000,000 or
the maximum amount available for Borrowing Tranches to which the Base Rate
Option applies; (iii) whether the Euro-Rate Option or Base Rate Option shall
apply to the proposed Loans comprising the applicable Borrowing Tranche; and
(iv) in the case of a Borrowing Tranche to which the Euro-Rate Option applies,
an appropriate Interest Period for the Loans comprising such Borrowing Tranche.
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2.4.2 Swing Loan Requests
Except as otherwise provided herein, a Borrower may from time
to time prior to the Expiration Date request PNC Bank to make Swing Loans by
delivery to PNC Bank not later than 12:00 p.m., Pittsburgh time, on the proposed
Borrowing Date of a duly completed request therefor substantially in the form of
Exhibit 2.4.2 hereto or a request by telephone immediately confirmed in writing
by letter, facsimile or telex (each, a "Swing Loan Request"), it being
understood that the Agent may rely on the authority of any individual making
such a telephonic request without the necessity of receipt of such written
confirmation. Each Swing Loan Request shall be irrevocable and shall specify the
proposed Borrowing Date and the principal amount of such Swing Loan, which shall
be not less than $50,000.
2.5 Making Loans.
2.5.1 Making Revolving Credit Loans.
The Agent shall, promptly after receipt by it of a Loan
Request pursuant to Section 2.4.1 [Revolving Credit Loan Requests], notify the
Banks of its receipt of such Loan Request specifying: (i) the proposed Borrowing
Date and the time and method of disbursement of the Revolving Credit Loans
requested thereby; (ii) the amount and type of each such Revolving Credit Loan
and the applicable Interest Period (if any); and (iii) the apportionment among
the Banks of such Revolving Credit Loans as determined by the Agent in
accordance with Section 2.2 [Nature of Banks' Obligations with Respect to
Revolving Credit Loans]. Each Bank shall remit the principal amount of each
Revolving Credit Loan to the Agent such that the Agent is able to, and the Agent
shall, to the extent the Banks have made funds available to it for such purpose
and subject to Section 6.2 [Each Additional Loan or Letter of Credit], fund such
Revolving Credit Loans to the Borrower requesting such Revolving Credit Loan in
U.S. Dollars and immediately available funds at the Principal Office prior to
2:00 p.m., Pittsburgh time, on the applicable Borrowing Date, provided that if
any Bank fails to remit such funds to the Agent in a timely manner, the Agent
may elect in its sole discretion to fund with its own funds the Revolving Credit
Loans of such Bank on such Borrowing Date, and such Bank shall be subject to the
repayment obligation in Section 9.16 [Availability of Funds].
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2.5.2 Making Swing Loans.
So long as PNC Bank elects to make Swing Loans, PNC Bank
shall, after receipt by it of a Swing Loan Request pursuant to Section 2.4.2,
fund such Swing Loan to the Borrower requesting such Swing Loan in U.S. Dollars
and immediately available funds at the Principal Office prior to 2:00 p.m.,
Pittsburgh time, on the Borrowing Date.
2.6 Borrowings to Repay Swing Loans.
PNC Bank may at its option, exercisable at any time for any reason
whatsoever, demand repayment of the Swing Loans, and in order to repay such
Swing Loans each Bank shall make a Revolving Credit Loan in an amount equal to
such Bank's Ratable Share of the aggregate principal amount of the outstanding
Swing Loans, plus, if PNC Bank so requests, accrued interest thereon, provided
that no Bank shall be obligated in any event to make Revolving Credit Loans,
which when added to its Ratable Share of the Letters of Credit Outstanding, is
in excess of its Revolving Credit Commitment. In that event, such Revolving
Credit Loans shall bear interest at the Base Rate Option and shall be deemed to
have been properly requested in accordance with Section 2.5.1 without regard to
any of the requirements of that provision. PNC Bank shall provide notice to the
Banks (which may be a telephonic or written notice by letter, facsimile or
telex) that such Revolving Credit Loans are to be made under this Section 2.6
and of the apportionment among the Banks, and the Banks shall be unconditionally
obligated to fund such Revolving Credit Loans (whether or not the conditions
specified in Section 6.2 are then satisfied) by the time PNC Bank so requests,
which shall not be earlier than 1:00 p.m., Pittsburgh time, on the Business Day
next succeeding the date the Banks receive such notice from PNC Bank.
2.7 Notes.
2.7.1 Revolving Credit Notes.
The Obligation of each Borrower to repay the aggregate unpaid
principal amount of the Revolving Credit Loans made to it by each Bank, together
with interest thereon, shall be evidenced by a Revolving Credit Note dated the
Closing Date payable to the order of such Bank in a face amount equal to the
Revolving Credit Commitment of such Bank.
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2.7.2 Swing Loan Note.
The Obligation of each Borrower to repay the unpaid principal
amount of the Swing Loans made to it by PNC Bank together with interest thereon
shall be evidenced by a demand promissory note of each Borrower dated the
Closing Date in substantially the form attached hereto as Exhibit 1.1(S)(2)
payable to the order of PNC Bank in a face amount equal to the Swing Loan
Commitment.
2.8 Use of Proceeds.
The proceeds of the Revolving Credit Loans shall be used for general
corporate purposes and working capital and in accordance with Section 7.1.10
[Use of Proceeds].
2.9 Letter of Credit Subfacility.
2.9.1 Issuance of Letters of Credit.
A Borrower may request the issuance of a letter of credit
(each a "Letter of Credit") on behalf of itself or another Loan Party by
delivering to the Agent a completed application and agreement for letters of
credit in such form as the Agent may specify from time to time by no later than
10:00 a.m., Pittsburgh time, at least three (3) Business Days, or such shorter
period as may be agreed to by the Agent, in advance of the proposed date of
issuance. Each Letter of Credit shall be either a Standby Letter of Credit or a
Commercial Letter of Credit. Subject to the terms and conditions hereof and in
reliance on the agreements of the other Banks set forth in this Section 2.9, the
Agent will issue a Letter of Credit, provided that each Letter of Credit shall
(A) have a maximum maturity of twelve (12) months from the date of issuance, and
(B) in no event expire later than ten (10) Business Days prior to the Expiration
Date and providing that in no event shall (i) the Letters of Credit Outstanding
exceed, at any one time, $20,000,000, or (ii) the Revolving Facility Usage
exceed, at any one time, the Revolving Credit Commitments.
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Letter of Credit Fees.
The Borrowers jointly and severally shall pay (i) to the Agent
for the ratable account of the Banks the Letter of Credit Fee, and (ii) to the
Agent for its own account, a fronting fee as set forth in the Agent's Letter),
which fees shall be computed on the daily average Letters of Credit Outstanding
and shall be payable quarterly in arrears commencing with the first Business Day
of each June, September, December and March following issuance of each Letter of
Credit and on the Expiration Date. The Borrowers shall also pay to the Agent for
the Agent's sole account the Agent's then-in-effect customary fees (excluding
fees in the nature of fronting fees which are addressed in the preceding
sentence) and administrative expenses payable with respect to the Letters of
Credit as the Agent may generally charge or incur from time to time in
connection with the issuance, maintenance, modification (if any), assignment or
transfer (if any), negotiation and administration of Letters of Credit.
2.9.3 Disbursements, Reimbursement.
.9.3.1 Immediately upon the Issuance of each
Letter of Credit, each Bank shall be deemed to, and hereby irrevocably and
unconditionally agrees to, purchase from the Agent a participation in such
Letter of Credit and each drawing thereunder in an amount equal to such Bank's
Ratable Share of the maximum amount available to be drawn under such Letter of
Credit and the amount of such drawing, respectively.
.9.3.2 In the event of any request for a drawing
under a Letter of Credit by the beneficiary or transferee thereof, the Agent
will promptly notify the Borrowers. Provided that they shall have received such
notice, the Borrowers shall reimburse (such obligation to reimburse the Agent
shall sometimes be referred to as a "Reimbursement Obligation") the Agent prior
to 12:00 noon, Pittsburgh time, on each date that an amount is paid by the Agent
under any Letter of Credit (each such date, a "Drawing Date") in an amount equal
to the amount so paid by the Agent. In the event the Borrowers fail to reimburse
the Agent for the full amount of any drawing under any Letter of Credit by 12:00
noon, Pittsburgh time, on the Drawing Date, the Agent will promptly notify each
Bank thereof, and the Borrowers shall be deemed to have requested that Revolving
Credit Loans be made by the Banks under the Base Rate Option to be disbursed on
the Drawing Date under such Letter of Credit, subject to the amount of the
unutilized portion of the Revolving Credit Commitment and subject to the
conditions set forth in Section 6.2 [Each Additional Loan or Letter of Credit]
other than any notice requirements. Any notice given by the Agent pursuant to
this Section 2.9.3.2 may
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be oral if immediately confirmed in writing; provided that the lack of such an
immediate confirmation shall not affect the conclusiveness or binding effect of
such notice.
.9.3.3 Each Bank shall upon any notice pursuant to
Section 2.9.3.2 make available to the Agent an amount in immediately available
funds equal to its Ratable Share of the amount of the drawing, whereupon the
participating Banks shall (subject to Section 2.9.3.4) each be deemed to have
made a Revolving Credit Loan under the Base Rate Option to the Borrowers in that
amount. If any Bank so notified fails to make available to the Agent for the
account of the Agent the amount of such Bank's Ratable Share of such amount by
no later than 2:00 p.m., Pittsburgh time, on the Drawing Date, then interest
shall accrue on such Bank's obligation to make such payment, from the Drawing
Date to the date on which such Bank makes such payment (i) at a rate per annum
equal to the Federal Funds Effective Rate during the first three days following
the Drawing Date, and (ii) at a rate per annum equal to the rate applicable to
Loans under the Base Rate Option on and after the fourth day following the
Drawing Date. The Agent will promptly give notice of the occurrence of the
Drawing Date, but failure of the Agent to give any such notice on the Drawing
Date or in sufficient time to enable any Bank to effect such payment on such
date shall not relieve such Bank from its obligation under this Section 2.9.3.3.
.9.3.4 With respect to any unreimbursed drawing
that is not converted into Revolving Credit Loans under the Base Rate Option to
the Borrowers in whole or in part as contemplated by Section 2.9.3.2, because of
a Borrower's failure to satisfy the conditions set forth in Section 6.2 [Each
Additional Loan or Letter of Credit] other than any notice requirements or for
any other reason, a Borrower shall be deemed to have incurred from the Agent a
Letter of Credit Borrowing in the amount of such drawing. Such Letter of Credit
Borrowing shall be due and payable on demand (together with interest) and shall
bear interest at the rate per annum applicable to the Revolving Credit Loans
under the Base Rate Option. Each Bank's payment to the Agent pursuant to Section
2.9.3.3 shall be deemed to be a payment in respect of its participation in such
Letter of Credit Borrowing and shall constitute a Participation Advance from
such Bank in satisfaction of its participation obligation under this Section
2.9.3.
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2.9.4 Repayment of Participation Advances.
.9.4.1 Upon (and only upon) receipt by the Agent
for its account of immediately available funds from a Borrower (i) in
reimbursement of any payment made by the Agent under the Letter of Credit with
respect to which any Bank has made a Participation Advance to the Agent, or (ii)
in payment of interest on such a payment made by the Agent under such a Letter
of Credit, the Agent will pay to each Bank, in the same funds as those received
by the Agent, the amount of such Bank's Ratable Share of such funds, except the
Agent shall retain the amount of the Ratable Share of such funds of any Bank
that did not make a Participation Advance in respect of such payment by Agent.
.9.4.2 If the Agent is required at any time to
return to any Loan Party, or to a trustee, receiver, liquidator, custodian or
any official in any Insolvency Proceeding, any portion of the payments made by
any Loan Party to the Agent pursuant to Section 2.9.4.1 in reimbursement of a
payment made under the Letter of Credit or interest or fee thereon, each Bank
shall, on demand of the Agent, forthwith return to the Agent the amount of its
Ratable Share of any amounts so returned by the Agent plus interest thereon from
the date such demand is made to the date such amounts are returned by such Bank
to the Agent, at a rate per annum equal to the Federal Funds Effective Rate in
effect from time to time.
2.9.5 Documentation.
Each Loan Party agrees to be bound by the terms of the Agent's
application and agreement for letters of credit and the Agent's written
regulations and customary practices relating to letters of credit, though such
interpretation may be different from the such Loan Party's own. In the event of
a conflict between such application or agreement and this Agreement, this
Agreement shall govern. It is understood and agreed that, except in the case of
gross negligence or willful misconduct, the Agent shall not be liable for any
error, negligence and/or mistakes, whether of omission or commission, in
following any Loan Party's instructions or those contained in the Letters of
Credit or any modifications, amendments or supplements thereto.
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2.9.6 Determinations to Honor Drawing Requests.
Subject to Section 10.8, in determining whether to honor any
request for drawing under any Letter of Credit by the beneficiary thereof, the
Agent shall be responsible only to determine that the documents and certificates
required to be delivered under such Letter of Credit have been delivered and
that they comply on their face with the requirements of such Letter of Credit.
2.9.7 Nature of Participation and Reimbursement
Obligations.
Each Bank's obligation in accordance with this Agreement to
make the Revolving Credit Loans or Participation Advances, as contemplated by
Section 2.9.3, as a result of a drawing under a Letter of Credit, and the
Obligations of each Borrower to reimburse the Agent upon a draw under a Letter
of Credit, shall be absolute, unconditional and irrevocable, and shall be
performed strictly in accordance with the terms of this Section 2.9 under all
circumstances, including the following circumstances:
(i) any set-off, counterclaim, recoupment, defense or other
right which such Bank may have against the Agent, a Borrower or any other Person
for any reason whatsoever;
(ii) the failure of any Loan Party or any other Person to
comply, in connection with a Letter of Credit Borrowing, with the conditions set
forth in Section 2.1 [Revolving Credit Commitments and Swing Loan Commitments],
2.4 [Loan Requests], 2.5 [Making Loans] or 6.2 [Each Additional Loan or Letter
of Credit] or as otherwise set forth in this Agreement for the making of a
Revolving Credit Loan, it being acknowledged that such conditions are not
required for the making of a Letter of Credit Borrowing and the obligation of
the Banks to make Participation Advances under Section 2.9.3;
(iii) any lack of validity or enforceability of any Letter of
Credit;
(iv) the existence of any claim, set-off, defense or other
right which any Loan Party or any Bank may have at any time against a
beneficiary or any transferee of any Letter of Credit (or any Persons for whom
any such transferee may be acting), the Agent or any Bank or any other Person
or, whether in connection with this Agreement, the transactions contemplated
herein or any unrelated transaction (including any underlying transaction
between any Loan Party or Subsidiaries of a Loan
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Party and the beneficiary for which any Letter of Credit was procured);
(v) any draft, demand, certificate or other document presented
under any Letter of Credit proving to be forged, fraudulent, invalid or
insufficient in any respect or any statement therein being untrue or inaccurate
in any respect even if the Agent has been notified thereof;
(vi) payment by the Agent under any Letter of Credit against
presentation of a demand, draft or certificate or other document which does not
comply with the terms of such Letter of Credit;
(vii) any adverse change in the business, operations,
properties, assets, condition (financial or otherwise) or prospects of any Loan
Party or Subsidiaries of a Loan Party;
(viii) any breach of this Agreement or any other Loan Document
by any party thereto;
(ix) the occurrence or continuance of an Insolvency Proceeding
with respect to any Loan Party;
(x) the fact that an Event of Default or a Potential Default
shall have occurred and be continuing;
(xi) the fact that the Expiration Date shall have passed or
this Agreement or the Revolving Credit Commitments hereunder shall have been
terminated; and
(xii) any other circumstance or happening whatsoever, whether
or not similar to any of the foregoing.
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2.9.8 Indemnity.
In addition to amounts payable as provided in Section 9.5
[Reimbursement and Indemnification of Agent by the Borrowers], the Borrowers
hereby jointly and severally agree to protect, indemnify, pay and save harmless
the Agent from and against any and all claims, demands, liabilities, damages,
losses, costs, charges and expenses (including reasonable fees, expenses and
disbursements of counsel ) which the Agent may incur or be subject to as a
consequence, direct or indirect, of (i) the issuance of any Letter of Credit,
other than as a result of (A) the gross negligence or willful misconduct of the
Agent as determined by a final judgment of a court of competent jurisdiction, or
(B) subject to the following clause (ii), the wrongful dishonor by the Agent of
a proper demand for payment made under any Letter of Credit, or (ii) the failure
of the Agent to honor a drawing under any such Letter of Credit as a result of
any act or omission, whether rightful or wrongful, of any present or future de
jure or de facto government or governmental authority (all such acts or
omissions herein called "Governmental Acts").
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2.9.9 Liability for Acts and Omissions.
As between any Loan Party and the Agent, such Loan Party
assumes all risks of the acts and omissions of, or misuse of the Letters of
Credit by, the respective beneficiaries of such Letters of Credit. In
furtherance and not in limitation of the foregoing, the Agent shall not be
responsible for: (i) the form, validity, sufficiency, accuracy, genuineness or
legal effect of any document submitted by any party in connection with the
application for an issuance of any such Letter of Credit, even if it should in
fact prove to be in any or all respects invalid, insufficient, inaccurate,
fraudulent or forged (even if the Agent shall have been notified thereof); (ii)
the validity or sufficiency of any instrument transferring or assigning or
purporting to transfer or assign any such Letter of Credit or the rights or
benefits thereunder or proceeds thereof, in whole or in part, which may prove to
be invalid or ineffective for any reason; (iii) the failure of the beneficiary
of any such Letter of Credit, or any other party to which such Letter of Credit
may be transferred, to comply fully with any conditions required in order to
draw upon such Letter of Credit or any other claim of any Loan Party against any
beneficiary of such Letter of Credit, or any such transferee, or any dispute
between or among any Loan Party and any beneficiary of any Letter of Credit or
any such transferee; (iv) errors, omissions, interruptions or delays in
transmission or delivery of any messages, by mail, cable, telegraph, telex or
otherwise, whether or not they be in cipher; (v) errors in interpretation of
technical terms; (vi) any loss or delay in the transmission or otherwise of any
document required in order to make a drawing under any such Letter of Credit or
of the proceeds thereof; (vii) the misapplication by the beneficiary of any such
Letter of Credit of the proceeds of any drawing under such Letter of Credit; or
(viii) any consequences arising from causes beyond the control of the Agent,
including any Governmental Acts, and none of the above shall affect or impair,
or prevent the vesting of, any of the Agent's rights or powers hereunder.
Nothing in the preceding sentence shall relieve the Agent from liability for the
Agent's gross negligence or willful misconduct in connection with actions or
omissions described in such clauses (i) through (viii) of such sentence.
In furtherance and extension and not in limitation of the
specific provisions set forth above, any action taken or omitted by the Agent
under or in connection with the Letters of Credit issued by it or any documents
and certificates delivered thereunder, if taken or omitted in good faith, shall
not put the Agent under any resulting liability to the Borrowers or any Bank.
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3. INTEREST RATES
3.1 Interest Rate Options.
Each Borrower shall pay interest in respect of the outstanding
unpaid principal amount of the Loans as selected by it from the Base Rate
Option, Euro-Rate Option or Fixed Rate Option set forth below applicable to the
Loans, it being understood that, subject to the provisions of this Agreement, a
Borrower may select different Interest Rate Options and different Interest
Periods to apply simultaneously to the Loans comprising different Borrowing
Tranches and may convert to or renew one or more Interest Rate Options with
respect to all or any portion of the Loans comprising any Borrowing Tranche,
provided that there shall not be at any one time outstanding more than three (3)
Borrowing Tranches in the aggregate among all of the Loans accruing interest at
a Euro-Rate Option and provided, further, that only the Fixed Rate Option or the
Base Rate Option, as set forth below, shall apply to Swing Loans and only the
Base Rate Option or the Euro-Rate Option shall apply to Revolving Credit Loans.
If at any time the designated rate applicable to any Loan made by any Bank
exceeds such Bank's highest lawful rate, the rate of interest on such Bank's
Loan shall be limited to such Bank's highest lawful rate.
3.1.1 Revolving Credit Interest Rate Options.
Each Borrower shall have the right to select from the
following Interest Rate Options applicable to the Revolving Credit Loans:
(i) Base Rate Option: A fluctuating rate per annum (computed
on the basis of a year of 365 or 366 days, as the case may be, and actual days
elapsed) equal to the Base Rate plus the Applicable Margin, such interest rate
to change automatically from time to time effective as of the effective date of
each change in the Base Rate; or
(ii) Euro-Rate Option: A rate per annum (computed on the basis
of a year of 360 days and actual days elapsed) equal to the Euro-Rate plus the
Applicable Margin.
3.1.2 Swing Loan Interest Rate Options.
Each Borrower shall have the right to select from the
following Interest Rate Options applicable to the Swing Loans:
(i) Fixed Rate Option: A rate per annum (computed on the basis
of a year of 365 or 366 days, as the case may be, and actual days elapsed) equal
to the Fixed Rate; or
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(ii) Base Rate Option: A rate per annum (computed on the basis
of a year of 365 or 366 days, as the case may be, and actual days elapsed) equal
to the Base Rate plus the Applicable Margin, such Interest Rate to change
automatically from time to time effective as the effective date of each change
in the Base Rate.
Notwithstanding the foregoing, (i) the Fixed Rate Option with respect to any
Swing Loan shall only be available for one (1) Business Day; thereafter, unless
such Swing Loan is converted to a Revolving Credit Loan or repaid, such Swing
Loan shall automatically accrue interest at the Base Rate Option without any
further action by any party hereto and (ii) if Swing Loans in excess of
$3,000,000 have been outstanding for more than five (5) successive Business
Days, the Borrowers' ability to request the Fixed Rate Option shall be suspended
for one (1) Business Day.
3.1.3 Rate Quotations.
A Borrower may call the Agent on or before the date on which a
Loan Request is to be delivered to receive an indication of the rates then in
effect, but it is acknowledged that such projection shall not be binding on the
Agent or the Banks nor affect the rate of interest which thereafter is actually
in effect when the election is made.
3.2 Interest Periods.
At any time when a Borrower shall select, convert to or renew a
Euro-Rate Option, such Borrower shall notify the Agent thereof at least three
(3) Business Days prior to the effective date of such Euro-Rate Option by
delivering a Loan Request. The notice shall specify an interest period (the
"Interest Period") during which such Interest Rate Option shall apply, such
Interest Period to be (i) one Month if a Borrower selects the Euro-Rate Option
during the Syndications Period, and (ii) one, two, three or six Months if a
Borrower selects the Euro-Rate Option after the Syndications Period has ended.
Notwithstanding the preceding sentence, the following provisions shall apply to
any selection of, renewal of, or conversion to a Euro-Rate Option:
3.2.1 Ending Date and Business Day.
any Interest Period which would otherwise end on a date which
is not a Business Day shall be extended to the next succeeding Business Day
unless such Business Day falls in the next calendar month, in which case such
Interest Period shall end on the next preceding Business Day;
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3.2.2 Amount of Borrowing Tranche.
each Borrowing Tranche of Euro-Rate Loans shall be in integral
multiples of $500,000 and not less than $2,000,000;
3.2.3 Termination Before Expiration Date.
a Borrower shall not select, convert to or renew an Interest
Period for any portion of the Loans that would end after the Expiration Date;
and
3.2.4 Renewals.
in the case of the renewal of a Euro-Rate Option at the end of
an Interest Period, the first day of the new Interest Period shall be the last
day of the preceding Interest Period, without duplication in payment of interest
for such day.
3.3 Interest After Default.
To the extent permitted by Law, upon the occurrence of an Event of
Default and until such time such Event of Default shall have been cured or
waived:
3.3.1 Letter of Credit Fees, Interest Rate,
the Letter of Credit Fees shall be increased by two percent
(2%) per annum and the rate of interest for each Loan otherwise applicable
pursuant to Section 2.9.2 [Letter of Credit Fees] or Section 3.1 [Interest Rate
Options], respectively, shall bear interest at a rate per annum equal to the sum
of the rate of interest applicable under the Base Rate Option plus an additional
two percent (2.0%) per annum;
3.3.2 Other Obligations.
each other Obligation hereunder if not paid when due shall
bear interest at a rate per annum equal to the sum of the rate of interest
applicable under the Base Rate Option plus an additional two percent (2%) per
annum from the time such Obligation becomes due and payable and until it is paid
in full.
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3.3.3 Acknowledgment.
Each Borrower acknowledges that the increase in rates referred
to in this Section 3.3 reflects, among other things, the fact that such Loans or
other amounts have become a substantially greater risk given their default
status and that the Banks are entitled to additional compensation for such risk;
and all such interest shall be payable by Borrowers upon demand by Agent.
3.4 Euro-Rate Unascertainable; Illegality; Increased Costs;
Deposits Not Available.
3.4.1 Unascertainable.
If on any date on which a Euro-Rate would otherwise be
determined, the Agent shall have determined that:
(i) adequate and reasonable means do not exist for
ascertaining such Euro-Rate, or
(ii) a contingency has occurred which materially and adversely
affects the London interbank eurodollar market relating to the Euro-Rate, the
Agent shall have the rights specified in Section 3.4.3.
3.4.2 Illegality; Increased Costs; Deposits Not
Available.
If at any time any Bank shall have determined that:
(i) the making, maintenance or funding of any Loan to which a
Euro-Rate Option applies has been made impracticable or unlawful by compliance
by such Bank in good faith with any Law or any interpretation or application
thereof by any Official Body or with any request or directive of any such
Official Body (whether or not having the force of Law), or
(ii) such Euro-Rate Option will not adequately and fairly
reflect the cost to such Bank of the establishment or maintenance of any such
Loan, or
(iii) after making all reasonable efforts, deposits of the
relevant amount in Dollars for the relevant Interest Period for a Loan to which
a Euro-Rate Option applies, respectively, are not available to such Bank with
respect to such Loan, in the London interbank market,
then the Agent shall have the rights specified in Section 3.4.3.
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Agent's and Bank's Rights.
In the case of any event specified in Section 3.4.1 above, the
Agent shall promptly so notify the Banks and the Borrowers thereof, and in the
case of an event specified in Section 3.4.2 above, such Bank shall promptly so
notify the Agent and endorse a certificate to such notice as to the specific
circumstances of such notice, and the Agent shall promptly send copies of such
notice and certificate to the other Banks and the Borrowers. Upon such date as
shall be specified in such notice (which shall not be earlier than the date such
notice is given), the obligation of (A) the Banks, in the case of such notice
given by the Agent, or (B) such Bank, in the case of such notice given by such
Bank, to allow a Borrower to select, convert to or renew a Euro-Rate Option
shall be suspended until the Agent shall have later notified the Borrowers, or
such Bank shall have later notified the Agent, of the Agent's or such Bank's, as
the case may be, determination that the circumstances giving rise to such
previous determination no longer exist. If at any time the Agent makes a
determination under Section 3.4.1 and a Borrower has previously notified the
Agent of its selection of, conversion to or renewal of a Euro-Rate Option and
such Interest Rate Option has not yet gone into effect, such notification shall
be deemed to provide for selection of, conversion to or renewal of the Base Rate
Option otherwise available with respect to such Loans. If any Bank notifies the
Agent of a determination under Section 3.4.2, the Borrowers shall, subject to
the Borrowers' indemnification Obligations under Section 4.6.2 [Indemnity], as
to any Loan of the Bank to which a Euro-Rate Option applies, on the date
specified in such notice either convert such Loan to the Base Rate Option
otherwise available with respect to such Loan or prepay such Loan in accordance
with Section 4.4 [Voluntary Prepayments]. Absent due notice from the Borrowers
of conversion or prepayment, such Loan shall automatically be converted to the
Base Rate Option otherwise available with respect to such Loan upon such
specified date.
3.5 Selection of Interest Rate Options.
If a Borrower fails to select a new Interest Period to apply to any
Borrowing Tranche of Loans under the Euro-Rate Option at the expiration of an
existing Interest Period applicable to such Borrowing Tranche in accordance with
the provisions of Section 3.2 [Interest Periods], such Borrower shall be deemed
to have converted such Borrowing Tranche to the Base Rate Option commencing upon
the last day of the existing Interest Period.
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4. PAYMENTS
4.1 Payments.
All payments and prepayments to be made in respect of principal,
interest, Commitment Fees, Letter of Credit Fees, Agent's Fee or other fees or
amounts due from a Borrower hereunder shall be payable prior to 11:00 a.m.,
Pittsburgh time, on the date when due without presentment, demand, protest or
notice of any kind, all of which are hereby expressly waived by each Borrower,
and without set-off, counterclaim or other deduction of any nature, and an
action therefor shall immediately accrue. Such payments shall be made to the
Agent at the Principal Office for the account of PNC Bank with respect to the
Swing Loans and for the ratable accounts of the Banks with respect to the
Revolving Credit Loans in U.S. Dollars and in immediately available funds, and
the Agent shall promptly distribute such amounts to the Banks in immediately
available funds, provided that in the event payments are received by 11:00 a.m.,
Pittsburgh time, by the Agent with respect to the Loans and such payments are
not distributed to the Banks on the same day received by the Agent, the Agent
shall pay the Banks the Federal Funds Effective Rate with respect to the amount
of such payments for each day held by the Agent and not distributed to the
Banks. The Agent's and each Bank's statement of account, ledger or other
relevant record shall, in the absence of manifest error, be conclusive as the
statement of the amount of principal of and interest on the Loans and other
amounts owing under this Agreement and shall be deemed an "account stated."
4.2 Pro Rata Treatment of Banks.
Each borrowing shall be allocated to each Bank according to its
Ratable Share, and each selection of, conversion to or renewal of any Interest
Rate Option and each payment or prepayment by a Borrower with respect to
principal, interest, Revolving Credit Commitment Fees, Letter of Credit Fees, or
other fees (except for the Agent's Fee) or amounts due from such Borrower
hereunder to the Banks with respect to the Loans, shall (except as provided in
Section 3.4.3 [Agent's and Bank's Rights] in the case of an event specified in
Section 3.4 [Euro-Rate Unascertainable; Etc.], 4.4.2 [Voluntary Prepayments] or
4.4 [Additional Compensation in Certain Circumstances]) be made in proportion to
the applicable Loans outstanding from each Bank and, if no such Loans are then
outstanding, in proportion to the Ratable Share of each Bank. Notwithstanding
any of the foregoing, each borrowing or payment or prepayment by the Borrower of
principal, interest, fees or other amounts from the Borrower with respect to
Swing Loans shall be made by or to PNC Bank in accordance with Section 2.
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4.3 Interest Payment Dates.
Interest on Loans to which the Base Rate Option applies shall be due
and payable in arrears on the first Business Day of each June, September,
December and March after the date hereof and on the Expiration Date or upon
acceleration of the Notes. Interest on Loans to which the Euro-Rate Option
applies shall be due and payable on the last day of each Interest Period for
those Loans and, if such Interest Period is longer than three (3) Months, also
on the 90th day of such Interest Period. Interest on mandatory prepayments of
principal under Section 4.5 [Mandatory Prepayments] shall be due on the date
such mandatory prepayment is due. Interest on the principal amount of each Loan
or other monetary Obligation shall be due and payable on demand after such
principal amount or other monetary Obligation becomes due and payable (whether
on the stated maturity date, upon acceleration or otherwise).
4.4 Voluntary Prepayments.
4.4.1 Right to Prepay.
Each Borrower shall have the right at its option from time to
time to prepay the Loans in whole or part without premium or penalty (except as
provided in Section 4.4.2 below or in Section 4.6 [Additional Compensation in
Certain Circumstances]):
at any time with respect to any Loan to which the Base Rate
Option applies,
(ii) on the last day of the applicable Interest Period with
respect to Loans to which a Euro-Rate Option applies,
(iii) on the date specified in a notice by any Bank pursuant
to Section 3.4 [Euro-Rate Unascertainable, Etc.] with respect to any Loan to
which a Euro-Rate Option applies.
Whenever a Borrower desires to prepay any part of the Loans,
it shall provide a prepayment notice to the Agent by 1:00 p.m. at least one (1)
Business Day prior to the date of prepayment of Revolving Credit Loans or no
later than 1:00 p.m. Pittsburgh time, on the date of prepayment of Swing Loans,
setting forth the following information:
(x) the date, which shall be a Business Day, on which the
proposed prepayment is to be made;
(y) a statement indicating the application of
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the prepayment between Swing Loans and Revolving Credit Loans; and
(z) the total principal amount which shall not be less than
$50,000 for any Swing Loan or, for Revolving Credit Loans, the
lesser of: (a) $1,000,000, or (b) the Revolving Credit Loans
comprising any Borrowing Tranche if all Revolving Credit Loans
comprising such Borrowing Tranche are to be prepaid.
All prepayment notices shall be irrevocable. The principal
amount of the Loans for which a prepayment notice is given, together with
interest on such principal amount, except with respect to Loans to which the
Base Rate Option applies, shall be due and payable on the date specified in such
prepayment notice as the date on which the proposed prepayment is to be made.
Unless otherwise specified by such Borrower with respect to prepayments of the
Revolving Credit Euro-Rate Portion of the Revolving Credit Loans permitted under
clause (ii) above, any prepayments shall be applied first to Loans to which the
Base Rate Option applies, then to Loans to which the Euro-Rate Option applies.
Any prepayment hereunder shall be subject to the Borrowers' Obligation to
indemnify the Banks under Section 4.6.2 [Indemnity].
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4.4.2 Replacement of a Bank.
In the event any Bank (i) gives notice under Section 3.4
[Euro-Rate Unascertainable, Etc.] or Section 4.6.1 [Increased Costs, Etc.], (ii)
does not fund Revolving Credit Loans because the making of such Loans would
contravene any Law applicable to such Bank, (iii) does not approve any action as
to which consent of the Required Banks is requested by a Borrower and obtained
hereunder, or (iv) becomes subject to the control of an Official Body (other
than normal and customary supervision), then applicable Borrowers shall have the
right at their option, with the consent of the Agent, which shall not be
unreasonably withheld, to prepay the Loans of such Bank in whole, together with
all interest accrued thereon, and terminate such Bank's Revolving Credit
Commitment within ninety (90) days after (w) receipt of such Bank's notice under
Section 3.4 [Euro-Rate Unascertainable, Etc.] or 4.6.1 [Increased Costs, Etc.],
(x) the date such Bank has failed to fund Revolving Credit Loans because the
making of such Loans would contravene Law applicable to such Bank, (y) the date
of obtaining the consent which such Bank has not approved, or (z) the date such
Bank became subject to the control of an Official Body, as applicable; provided
that each such Borrower shall also pay to such Bank at the time of such
prepayment any amounts required under Section 4.6 [Additional Compensation in
Certain Circumstances] and any accrued interest due on such amount and any
related fees; provided, however, that the Revolving Credit Commitment of such
Bank shall be provided by one or more of the remaining Banks or a replacement
bank acceptable to the Agent and the Borrowers; provided, further, the remaining
Banks shall have no obligation hereunder to increase their Revolving Credit
Commitments. Notwithstanding the foregoing, the Agent may only be replaced
subject to the requirements of Section 9.14 [Successor Agent] and provided that
all Letters of Credit have expired or been terminated or replaced.
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4.4.3 Change of Lending Office.
Each Bank agrees that upon the occurrence of any event giving
rise to increased costs or other special payments under Section 3.4.2
[Illegality, Etc.] or 4.6.1 [Increased Costs, Etc.] with respect to such Bank,
it will, if requested by a Borrower, use reasonable efforts (subject to overall
policy considerations of such Bank) to designate another lending office for any
Loans or Letters of Credit affected by such event, provided that such
designation is made on such terms that such Bank and its lending office suffer
no economic, legal or regulatory disadvantage, with the object of avoiding the
consequence of the event giving rise to the operation of such Section. Nothing
in this Section 4.4.3 shall affect or postpone any of the Obligations of the
Borrowers or any other Loan Party or the rights of the Agent or any Bank
provided in this Agreement.
4.5 Mandatory Prepayments.
4.5.1 Borrowing Base Exceeded.
Whenever the outstanding principal balance of Revolving Credit
Loans and Swing Loans by the Banks plus the aggregate undrawn face amount of
outstanding Letters of Credit issued pursuant to Section 2.9 exceeds the
Borrowing Base, the Borrowers shall make, within one (1) Business Day after the
Borrowers learn of such excess and whether or not the Agent has given notice to
such effect, a mandatory prepayment of principal equal to the excess of the
outstanding principal balance of the Revolving Credit Loans over the Borrowing
Base, together with accrued interest on such principal amount.
4.5.2 Application Among Interest Rate Options.
All prepayments required pursuant to this Section 4.5 shall
first be applied to the principal amount of the Loans subject to the Base Rate
Option, then to Loans subject to a Euro-Rate Option. In accordance with Section
4.6.2 [Indemnity], each Borrower shall indemnify the Banks for any loss or
expense, including loss of margin, incurred with respect to any such prepayments
applied against Loans subject to a Euro-Rate Option on any day other than the
last day of the applicable Interest Period.
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Additional Compensation in Certain Circumstances.
4.6.1 Increased Costs or Reduced Return Resulting From
Taxes, Reserves, Capital Adequacy Requirements, Expenses, Etc.
If any Law, guideline or interpretation or any change in any
Law, guideline or interpretation or application thereof by any Official Body
charged with the interpretation or administration thereof or compliance with any
request or directive (whether or not having the force of Law) of any central
bank or other Official Body:
(i) subjects any Bank to any tax or changes the basis of
taxation with respect to this Agreement, the Notes, the Loans or payments by any
Borrower of principal, interest, Revolving Credit Commitment Fees, or other
amounts due from any Borrower hereunder or under the Notes (except for taxes on
the overall net income of such Bank),
(ii) imposes, modifies or deems applicable any reserve,
special deposit or similar requirement against credits or commitments to extend
credit extended by, or assets (funded or contingent) of, deposits with or for
the account of, or other acquisitions of funds by, any Bank, or
(iii) imposes, modifies or deems applicable any capital
adequacy or similar requirement (A) against assets (funded or contingent) of, or
letters of credit, other credits or commitments to extend credit extended by,
any Bank, or (B) otherwise applicable to the obligations of any Bank under this
Agreement,
and the result of any of the foregoing is to increase the cost to, reduce the
income receivable by, or impose any expense (including loss of margin) upon any
Bank with respect to this Agreement, the Notes or the making, maintenance or
funding of any part of the Loans (or, in the case of any capital adequacy or
similar requirement, to have the effect of reducing the rate of return on any
Bank's capital, taking into consideration such Bank's customary policies with
respect to capital adequacy) by an amount which such Bank in its sole discretion
deems to be material, such Bank shall from time to time notify the Borrowers and
the Agent of the amount determined in good faith (using any averaging and
attribution methods employed in good faith) by such Bank to be necessary to
compensate such Bank for such increase in cost, reduction of income, additional
expense or reduced rate of return. Such notice shall set forth in reasonable
detail the basis for such determination. Such amount shall be due and payable by
the Borrowers to such Bank thirty (30) Business Days after such notice is given.
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4.6.2 Indemnity.
In addition to the compensation required by Section 4.6.1
[Increased Costs, Etc.], the Borrowers shall indemnify, jointly and severally,
each Bank against all liabilities, losses or expenses (including loss of margin,
any loss or expense incurred in liquidating or employing deposits from third
parties and any loss or expense incurred in connection with funds acquired by a
Bank to fund or maintain Loans subject to a Euro-Rate Option) which such Bank
sustains or incurs as a consequence of any:
payment, prepayment, conversion or renewal of any Loan to
which a Euro-Rate Option applies on a day other than the last day of the
corresponding Interest Period (whether or not such payment or prepayment is
mandatory, voluntary or automatic and whether or not such payment or prepayment
is then due),
(ii) attempt by any Borrower to revoke (expressly, by later
inconsistent notices or otherwise) in whole or part any Loan Requests under
Section 2.4 [Revolving Credit Loan Requests] or Section 3.2 [Interest Periods]
or notice relating to prepayments under Section 4.4 [Voluntary Prepayments], or
(iii) default by any Borrower in the performance or observance
of any covenant or condition contained in this Agreement or any other Loan
Document, including any failure of any Borrower to pay when due (by acceleration
or otherwise) any principal, interest, Revolving Credit Commitment Fee or any
other amount due hereunder.
If any Bank sustains or incurs any such loss or expense, it shall
from time to time notify the applicable Borrowers of the amount determined in
good faith by such Bank (which determination may include such assumptions,
allocations of costs and expenses and averaging or attribution methods as such
Bank shall deem reasonable) to be necessary to indemnify such Bank for such loss
or expense. Such notice shall set forth in reasonable detail the basis for such
determination. Such amount shall be due and payable, jointly and severally, by
the Borrowers to such Bank thirty (30) Business Days after such notice is given.
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4.7 Settlement Date Procedures.
In order to minimize the transfer of funds between the Banks and the
Agent, a Borrower may borrow, repay and reborrow Swing Loans and PNC Bank may
make Swing Loans as provided in Section 2.1.2 hereof during the period between
Settlement Dates. Not later than 11:00 a.m. on each Settlement Date, the Agent
shall notify each Bank of its Ratable Share of the Swing Loans. Prior to 2:00
p.m., Pittsburgh time, on such Settlement Date, each Bank shall pay to the Agent
the amount equal to the difference between its Ratable Share of the Loans and
its Revolving Credit Loans, and the Agent shall pay to each Bank its Ratable
Share of all payments made by the Borrowers to the Agent with respect to the
Revolving Credit Loans. The Agent shall also effect settlement in accordance
with the foregoing sentence on the proposed Borrowing Dates for Revolving Credit
Loans and may at its option effect settlement on any other Business Day. These
settlement procedures are established solely as a matter of administrative
convenience, and nothing contained in this Section 4.7 shall relieve the Banks
of their obligations to fund Revolving Credit Loans on dates other than a
Settlement Date pursuant to Section 2.1.1. The Agent may at any time at its
option for any reason whatsoever require each Bank to pay immediately to the
Agent such Bank's Ratable Share of the outstanding Loans, and each Bank may at
any time require the Agent to pay immediately to such Bank its Ratable Share of
all payments made by the borrower to the Agent with respect to the Revolving
Credit Loans.
Deposit into Lockbox.
Each Borrower shall continue to require Account Debtors
whose represent at least eighty-five percent (85%) of all Accounts of such
Borrower to make all payments due from them to such Borrower directly to the
applicable Lockboxes for collection pursuant to the Lockbox Agreements.
4.9 Receipt and Application of Payment; Cash Collateral Account;
Collections; Agent's Right to Notify Account Debtors..
The Provisions of this Section 4.9 shall apply immediately
and only the occurrence of an Event of Default and for so long as such Event of
Default shall be continuing:
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4.9.1 Receipt and Application of Payment.
So long as such Event of Default shall be continuing (i) the
Borrowers shall instruct Chase and National City to deposit via wire transfer
into the Cash Collateral Account all cash, checks and other items of payment
received in the Chase Lockbox or National City Lockbox, as the case may be,
within 24 hours of Chase's or National City's receipt thereof, (ii) all cash,
checks or other items of payment received in the PNC Lockbox shall be
immediately deposited into the Cash Collateral Account promptly upon PNC's
receipt thereof, and (iii) the Borrowers shall deposit into the Cash Collateral
Account within 24 hours of Borrowers' receipt thereof all cash, checks or other
items of payment received from those Account Debtors not currently making
payment into a Lockbox or, promptly upon request of the Agent, shall cause such
Account Debtors to deposit such cash, checks or other items of payment directly
into one of the Lockboxes. In the event a Borrower (or any of its Affiliates,
shareholders, directors, officers, employees, agents or those persons acting for
or in concert with a Borrower) shall receive any cash, checks, notes, drafts or
other similar items of payment relating to or constituting the Collateral (or
proceeds thereof), no later than the first Business Day following receipt
thereof, such Borrower shall
(i) deposit or cause the same to be deposited, in kind, in the
Cash Collateral Account established by such Borrower with the Agent or such
other depository as may be designated in writing by the Agent (the
"Depository"), from which account the Agent alone shall have the power of
withdrawal, and with respect to which the Depository shall waive any rights of
set off, and
(ii) forward to the Agent, on a daily basis, a collection
report in form and substance satisfactory to the Agent and, at the Agent's
request, copies of all such items and deposit slips related thereto.
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4.9.2 Cash Collateral Account.
The Agent alone shall have the sole power of withdrawal
from the Cash Collateral Account, and at each such time, all cash, notes,
checks, drafts or similar items of payment by or for the account of a Borrower
shall be the sole and exclusive property of the Banks immediately upon the
earlier of the receipt of such items by the Agent or the Depository or the
receipt of such items by such Borrower; provided, however, that for the purpose
of computing interest hereunder such items shall be deemed to have been
collected and shall be applied by the Agent on account of the Revolving Credit
Loans outstanding to such Borrower one (1) Business Day after receipt by the
Agent (subject to correction for any items subsequently dishonored for any
reason whatsoever). Notwithstanding anything to the contrary herein, during each
period when this Section 4.9.2 is applicable, all such items of payment shall,
solely for purposes of determining the occurrence of such Event of Default, be
deemed received upon actual receipt by the Agent, unless the same are
subsequently dishonored for any reason whatsoever, and all funds in the Cash
Collateral Account, including all payments made by or on behalf of and all
credits due a Borrower, may be applied and reapplied in whole or in part to any
of the Revolving Credit Loans to the extent and in the manner the Agent deems
advisable.
4.9.3 Collections; Agent's Right to Notify Account
Debtors.
The Agent may notify any or all Account Debtors that the Accounts
have been assigned to the Banks and that the Banks have a security interest
therein, and to direct such Account Debtors to make all payments due from them
to each Borrower upon the Accounts directly to the Agent to the Lockboxes or to
any other lockbox designated by the Agent. The Agent shall promptly furnish the
Borrowers with a copy of any such notice sent. Any such notice, in the Agent's
sole discretion, may be sent on the Borrowers' stationery, in which event the
appropriate Borrower shall co-sign such notice with the Agent. To the extent
that any Law or custom or any contract or agreement with any Account Debtor
requires notice to or the approval of the Account Debtor in order to perfect
such assignment of a security interest in Accounts, each Borrower agrees to give
such notice or obtain such approval.
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5. REPRESENTATIONS AND WARRANTIES
5.1 Representations and Warranties.
The Loan Parties, jointly and severally, represent and warrant to
the Agent and each of the Banks as follows:
5.1.1 Organization and Qualification.
Each Loan Party and each Subsidiary of each Loan Party is a
corporation, partnership or limited liability company duly organized, validly
existing and in good standing under the laws of its jurisdiction of
organization. Each Loan Party and each Subsidiary of each Loan Party has the
lawful power to own or lease its properties and to engage in the business it
presently conducts or proposes to conduct. Each Loan Party and each Subsidiary
of each Loan Party is duly licensed or qualified and in good standing in each
jurisdiction listed on Schedule 5.1.1 and in all other jurisdictions where the
property owned or leased by it or the nature of the business transacted by it or
both makes such licensing or qualification necessary.
Capitalization and Ownership.
The authorized capital stock of the Borrowers consists of the
number of shares as set forth on Schedule 5.1.2 hereto. Schedule 5.1.2 hereto
also sets forth the number of shares of issued and outstanding capital stock of
such Borrower and the ownership of such shares, and all such shares have been
validly issued and are fully paid and nonassessable. There are no options,
warrants or other rights outstanding to purchase any shares of the capital stock
of such Borrower except as indicated on Schedule 5.1.2.
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5.1.3 Subsidiaries.
Schedule 5.1.3 states the name of each of the Borrowers'
Subsidiaries, its jurisdiction of incorporation, its authorized capital stock,
the issued and outstanding shares (referred to herein as the "Subsidiary
Shares") and the owners thereof if it is a corporation, its outstanding
partnership interests (the "Partnership Interests") if it is a partnership and
its outstanding limited liability company interests, interests assigned to
managers thereof and the voting rights associated therewith (the "LLC
Interests") if it is a limited liability company. The Borrowers and each
Subsidiary of the Borrowers has good and marketable title to all of the
Subsidiary Shares, Partnership Interests and LLC Interests it purports to own,
free and clear in each case of any Lien. All Subsidiary Shares, Partnership
Interests and LLC Interests have been validly issued, and all Subsidiary Shares
are fully paid and nonassessable. All capital contributions and other
consideration required to be made or paid in connection with the issuance of the
Partnership Interests and LLC Interests have been made or paid, as the case may
be. There are no options, warrants or other rights outstanding to purchase any
such Subsidiary Shares, Partnership Interests or LLC Interests except as
indicated on Schedule 5.1.3.
5.1.4 Power and Authority.
Each Loan Party has full power to enter into, execute, deliver
and carry out this Agreement and the other Loan Documents to which it is a
party, to incur the Indebtedness contemplated by the Loan Documents and to
perform its Obligations under the Loan Documents to which it is a party, and all
such actions have been duly authorized by all necessary proceedings on its part.
5.1.5 Validity and Binding Effect.
This Agreement has been duly and validly executed and
delivered by each Loan Party, and each other Loan Document which any Loan Party
is required to execute and deliver on or after the date hereof will have been
duly executed and delivered by such Loan Party on the required date of delivery
of such Loan Document. This Agreement and each other Loan Document constitutes,
or will constitute, legal, valid and binding obligations of each Loan Party
which is or will be a party thereto on and after its date of delivery thereof,
enforceable against such Loan Party in accordance with its terms, except to the
extent that enforceability of any of such Loan Document may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting the enforceability of creditors' rights generally or limiting the
right of specific performance.
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No Conflict.
Neither the execution and delivery of this Agreement or the
other Loan Documents by any Loan Party nor the consummation of the transactions
herein or therein contemplated or compliance with the terms and provisions
hereof or thereof by any of them will conflict with, constitute a default under
or result in any breach of (i) the terms and conditions of the certificate of
incorporation, bylaws, certificate of limited partnership, partnership
agreement, certificate of formation, limited liability company agreement or
other organizational documents of any Loan Party, or (ii) any Law or any
material agreement or instrument or order, writ, judgment, injunction or decree
to which any Loan Party or any of its Subsidiaries is a party or by which it or
any of its Subsidiaries is bound or to which it is subject, or result in the
creation or enforcement of any Lien, charge or encumbrance whatsoever upon any
property (now or hereafter acquired) of any Loan Party or any of its
Subsidiaries (other than Liens granted under the Loan Documents).
5.1.7 Litigation.
There are no actions, suits, proceedings or investigations
pending or, to the knowledge of any Loan Party, threatened against such Loan
Party or any Subsidiary of such Loan Party at law or equity before any Official
Body which individually or in the aggregate may result in any Material Adverse
Change, except as described on Schedule 5.1.7. None of the Loan Parties or any
Subsidiaries of any Loan Party is in violation of any order, writ, injunction or
any decree of any Official Body which may result in any Material Adverse Change.
5.1.8 Title to Properties.
The real property owned or leased by each Loan Party and each
Subsidiary of each Loan Party is described on Schedule 5.1.8. Each Loan Party
and each Subsidiary of each Loan Party has good and marketable title to or valid
leasehold interest in all properties, assets and other rights which it purports
to own or lease or which are reflected as owned or leased on its books and
records, free and clear of all Liens and encumbrances except Permitted Liens,
and subject to the terms and conditions of the applicable leases. All leases of
property are in full force and effect without the necessity for any consent
which has not previously been obtained upon consummation of the transactions
contemplated hereby.
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5.1.9 Financial Statements.
(i) Historical Statements. Each Borrower has delivered to the
Agent copies of its audited consolidated year-end financial statements for and
as of the end of the fiscal year ended August 31, 1996 (the "Annual
Statements"). In addition, each Borrower has delivered to the Agent copies of
its unaudited consolidated interim quarterly financial statements and for the
fiscal year to date and as of the end of the fiscal quarter ended February 28,
1997 (the "Interim Statements") (the Annual Statements and Interim Statements
being collectively referred to as the "Historical Statements"). The Historical
Statements were compiled from the books and records maintained by each
Borrower's management, are correct and complete in all material respects and
fairly represent the consolidated financial condition of such Borrower and its
Subsidiaries as of their dates and the results of operations for the fiscal
periods then ended and have been prepared in accordance with GAAP consistently
applied, subject (in the case of the Interim Statements) to normal year-end
audit adjustments.
(ii) Financial Projections. Each Borrower has delivered to the
Agent financial projections of such Borrower and its Subsidiaries for the period
1997-2002 derived from various assumptions of such Borrower's management (the
"Financial Projections"). The Financial Projections represent what management of
the Borrowers believes to be a reasonable range of possible results in light of
the history of the business, present and foreseeable conditions and the
intentions of such Borrower's management. The Financial Projections accurately
reflect the liabilities of such Borrower and its Subsidiaries upon consummation
of the transactions contemplated hereby as of the Closing Date.
(iii) Accuracy of Financial Statements. None of the Borrowers
nor any Subsidiary of any Borrowers has any material liabilities, contingent or
otherwise, or forward or long-term commitments that are not disclosed in the
Historical Statements or in the notes thereto, and except as disclosed therein,
there are no unrealized or anticipated losses since February 28, 1997 from any
commitments of the Borrowers or any Subsidiary of the Borrowers which may cause
a Material Adverse Change. Since August 31, 1996, no Material Adverse Change has
occurred.
5.1.10 Use of Proceeds; Margin Stock; Section 20
Subsidiaries.
.1.10.1 General.
The Loan Parties intend to use the proceeds
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of the Loans in accordance with Sections 2.8, and 7.1.10.
.1.10.2 Margin Stock.
None of the Loan Parties or any Subsidiaries of any Loan
Party engages or intends to engage principally, or as one of its important
activities, in the business of extending credit for the purpose, immediately,
incidentally or ultimately, of purchasing or carrying margin stock (within the
meaning of Regulation U). No part of the proceeds of any Loan has been or will
be used, immediately, incidentally or ultimately, to purchase or carry any
margin stock or to extend credit to others for the purpose of purchasing or
carrying any margin stock or to refund Indebtedness originally incurred for such
purpose, or for any purpose which entails a violation of or which is
inconsistent with the provisions of the regulations of the Board of Governors of
the Federal Reserve System. None of the Loan Parties or any Subsidiary of any
Loan Party holds or intends to hold margin stock in such amounts that more than
twenty-five (25%) of the reasonable value of the assets of any Loan Party or
Subsidiary of any Loan Party are or will be represented by margin stock.
.1.10.3 Section 20 Subsidiaries.
The Loan Parties do not intend to use and shall not use
any portion of the proceeds of the Loans, directly or indirectly (i) knowingly
to purchase any Ineligible Securities from a Section 20 Subsidiary during any
period in which such Section 20 Subsidiary makes a market in such Ineligible
Securities, (ii) knowingly to purchase during the underwriting or placement
period Ineligible Securities being underwritten or privately placed by a Section
20 Subsidiary, or (iii) to make payments of principal or interest on Ineligible
Securities underwritten or privately placed by as Section 20 Subsidiary and
issued by or for the benefit of any Loan Party or any Subsidiary of any Loan
Party.
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5.1.11 Full Disclosure.
Neither this Agreement nor any other Loan Document, nor any
certificate, statement, agreement or other documents furnished to the Agent or
any Bank in connection herewith or therewith, contains any untrue statement of a
material fact or omits to state a material fact necessary in order to make the
statements contained herein and therein, in light of the circumstances under
which they were made, not misleading. There is no fact known to any Loan Party
which materially adversely affects the business, property, assets, financial
condition, results of operations or prospects of any Loan Party or Subsidiary of
any Loan Party which has not been set forth in this Agreement or in the
certificates, statements, agreements or other documents furnished in writing to
the Agent and the Banks prior to or at the date hereof in connection with the
transactions contemplated hereby.
5.1.12 Taxes.
All federal, state, local and other tax returns required to
have been filed with respect to each Loan Party and each Subsidiary of each Loan
Party have been filed, and payment or adequate provision has been made for the
payment of all taxes, fees, assessments and other governmental charges which
have or may become due pursuant to said returns or to assessments received,
except to the extent that such taxes, fees, assessments and other charges are
being contested in good faith by appropriate proceedings diligently conducted
and for which such reserves or other appropriate provisions, if any, as shall be
required by GAAP shall have been made. There are no agreements or waivers
extending the statutory period of limitations applicable to any federal income
tax return of any Loan Party or Subsidiary of any Loan Party for any period,
except as described on Schedule 5.1.12.
5.1.13 Consents and Approvals.
Except for the filing of financing statements in the state and
county filing offices, no consent, approval, exemption, order or authorization
of, or a registration or filing with, any Official Body or any other Person is
required by any Law or any agreement in connection with the execution, delivery
and carrying out of this Agreement and the other Loan Documents by any Loan
Party, except as listed on Schedule 5.1.13, all of which shall have been
obtained or made on or prior to the Closing Date except as otherwise indicated
on Schedule 5.1.13.
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5.1.14 No Event of Default; Compliance With Instruments.
No event has occurred and is continuing and no condition
exists or will exist after giving effect to the borrowings or other extensions
of credit to be made on the Closing Date under or pursuant to the Loan Documents
which constitutes an Event of Default or Potential Default. None of the Loan
Parties or any Subsidiaries of any Loan Party is in violation of (i) any term of
its certificate of incorporation, bylaws, certificate of limited partnership,
partnership agreement, certificate of formation, limited liability company
agreement or other organizational documents, or (ii) any material agreement or
instrument to which it is a party or by which it or any of its properties may be
subject or bound where such violation would constitute a Material Adverse
Change.
5.1.15 Patents, Trademarks, Copyrights, Licenses, Etc.
Each Loan Party and each Subsidiary of each Loan Party owns or
possesses all the material patents, trademarks, service marks, trade names,
copyrights, licenses, registrations, franchises, permits and rights necessary to
own and operate its properties and to carry on its business as presently
conducted and planned to be conducted by such Loan Party or Subsidiary, without
known, possible, alleged or actual conflict with the rights of others. All
material patents, trademarks, service marks, trade names, copyrights, licenses,
registrations, franchises and permits of each Loan Party and each Subsidiary of
each Loan Party are listed and described on Schedule 5.1.15.
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5.1.16 Security Interests.
The Liens and security interests granted to the Agent for the
benefit of the Banks pursuant to the Security Agreement in the Collateral
constitute and will continue to constitute Prior Security Interests under the
Uniform Commercial Code as in effect in each applicable jurisdiction (the
"Uniform Commercial Code") or other applicable Law entitled to all the rights,
benefits and priorities provided by the Uniform Commercial Code or such Law,
subject only to Permitted Liens. Upon the filing of financing statements
relating to said security interests in each office and in each jurisdiction
where required in order to perfect the security interests described above, all
such action as is necessary or advisable to establish such rights of the Agent
will have been taken, and there will be upon execution and delivery of the
Security Agreement, such filings and such taking of possession, no necessity for
any further action in order to preserve, protect and continue such rights,
except the filing of continuation statements with respect to such financing
statements within six months prior to each five-year anniversary of the filing
of such financing statements. All filing fees and other expenses in connection
with each such action have been or will be paid by the Borrowers.
5.1.17 Insurance.
Schedule 5.1.17 lists all insurance policies and other bonds
to which any Loan Party or Subsidiary of any Loan Party is a party, all of which
are valid and in full force and effect. No notice has been given or claim made
and no grounds exist to cancel or avoid any of such policies or bonds or to
reduce the coverage provided thereby. Such policies and bonds provide adequate
coverage from reputable and financially sound insurers in amounts sufficient to
insure the assets and risks of each Loan Party and each Subsidiary of each Loan
Party in accordance with prudent business practice in the industry of the Loan
Parties and their Subsidiaries.
Compliance With Laws.
The Loan Parties and their Subsidiaries are in compliance in
all material respects with all applicable Laws (other than Environmental Laws
which are specifically addressed in Section 5.1.23 [Environmental Matters]) in
all jurisdictions in which any Loan Party or Subsidiary of any Loan Party is
presently or will be doing business except where the failure to do so would not
constitute a Material Adverse Change.
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5.1.19 Material Contracts; Burdensome Restrictions.
Schedule 5.1.19 lists all material contracts relating to the
business operations of each Loan Party and each Subsidiary of any Loan Party,
including all employee benefit plans and Labor Contracts. All such material
contracts are valid, binding and enforceable upon such Loan Party or Subsidiary
and, to the best of the Loan Parties' knowledge, each of the other parties
thereto in accordance with their respective terms, and there is no default
thereunder, to the Loan Parties' knowledge, with respect to parties other than
such Loan Party or Subsidiary. None of the Loan Parties or their Subsidiaries is
bound by any contractual obligation, or subject to any restriction in any
organization document, or any requirement of Law which could result in a
Material Adverse Change.
5.1.20 Investment Companies; Regulated Entities.
None of the Loan Parties or any Subsidiaries of any Loan Party
is an "investment company" registered or required to be registered under the
Investment Company Act of 1940 or under the "control" of an "investment company"
as such terms are defined in the Investment Company Act of 1940 and shall not
become such an "investment company" or under such "control." None of the Loan
Parties or any Subsidiaries of any Loan Party is subject to any other federal or
state statute or regulation limiting its ability to incur Indebtedness for
borrowed money.
5.1.21 Plans and Benefit Arrangements.
Except as set forth on Schedule 5.1.21:
(i) Each Borrower and each other member of the ERISA Group are
in compliance in all material respects with any applicable provisions of ERISA
with respect to all Benefit Arrangements, Plans and Multiemployer Plans. There
has been no Prohibited Transaction with respect to any Benefit Arrangement or
any Plan or, to the best knowledge of each Borrower, with respect to any
Multiemployer Plan or Multiple Employer Plan, which could result in any material
liability of any Borrower or any other member of the ERISA Group. Each Borrower
and all other members of the ERISA Group have made when due any and all payments
required to be made under any agreement relating to a Multiemployer Plan or a
Multiple Employer Plan or any Law pertaining thereto. With respect to each Plan
and Multiemployer Plan, each Borrower and each other member of the ERISA Group
(i) have fulfilled in all material respects their obligations under the minimum
funding standards of ERISA, (ii) have not incurred any liability to the PBGC,
and (iii) have not had
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asserted against them any penalty for failure to fulfill the minimum funding
requirements of ERISA.
To the best of each Borrower's knowledge, each Multiemployer
Plan and Multiple Employer Plan is able to pay benefits thereunder when due.
(iii) Neither any Borrower nor any other member of the ERISA
Group has instituted or intends to institute proceedings to terminate any Plan.
(iv) No event requiring notice to the PBGC under
Section 302(f)(4)(A) of ERISA has occurred or is reasonably expected to occur
with respect to any Plan, and no amendment with respect to which security is
required under Section 307 of ERISA has been made or is reasonably expected to
be made to any Plan.
(v) The aggregate actuarial present value of all benefit
liabilities (whether or not vested) under each Plan, determined on Financial
Accounting Statement 35 basis, as disclosed in, and as of the date of, the most
recent actuarial report for such Plan, does not exceed the aggregate fair market
value of the assets of such Plan.
(vi) Neither any Borrower nor any other member of the ERISA
Group has incurred or reasonably expects to incur any material withdrawal
liability under ERISA to any Multiemployer Plan or Multiple Employer Plan.
Neither any Borrower nor any other member of the ERISA Group has been notified
by any Multiemployer Plan or Multiple Employer Plan that such Multiemployer Plan
or Multiple Employer Plan has been terminated within the meaning of Title IV of
ERISA and, to the best knowledge of each Borrower, no Multiemployer Plan or
Multiple Employer Plan is reasonably expected to be reorganized or terminated
within the meaning of Title IV of ERISA.
(vii) To the extent that any Benefit Arrangement is insured,
each Borrower and all other members of the ERISA Group have paid when due all
premiums required to be paid for all periods through the Closing Date. To the
extent that any Benefit Arrangement is funded other than with insurance, each
Borrower and all other members of the ERISA Group have made when due all
contributions required to be paid for all periods through the Closing Date.
(viii) All Plans, Benefit Arrangements and Multiemployer Plans
have been administered in accordance with their terms and applicable Law.
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5.1.22 Employment Matters.
Each of the Loan Parties and each of their Subsidiaries is in
compliance with the Labor Contracts and all applicable federal, state and local
labor and employment Laws, including those related to equal employment
opportunity and affirmative action, labor relations, minimum wage, overtime,
child labor, medical insurance continuation, worker adjustment and relocation
notices, immigration controls and worker and unemployment compensation, where
the failure to comply would constitute a Material Adverse Change. There are no
outstanding grievances, arbitration awards or appeals therefrom arising out of
the Labor Contracts or current or threatened strikes, picketing, handbilling or
other work stoppages or slowdowns at facilities of any of the Loan Parties or
any of their Subsidiaries which in any case would constitute a Material Adverse
Change. Each Borrower has delivered to the Agent true and correct copies of each
of the Labor Contracts.
5.1.23 Environmental Matters.
Except as disclosed on Schedule 5.1.23:
(i) None of the Loan Parties or any Subsidiaries of any Loan
Party has received any Environmental Complaint from any Official Body or private
Person alleging that such Loan Party or Subsidiary or any prior or subsequent
owner of any of the Property is a potentially responsible party under the
Comprehensive Environmental Response, Cleanup and Liability Act, 42 U.S.C.
Section 9601, et seq., and none of the Loan Parties has any reason to believe
that such an Environmental Complaint might be received. There are no pending or,
to any Loan Party's actual knowledge, threatened Environmental Complaints
relating to any Loan Party or Subsidiary of any Loan Party or, to any Loan
Party's actual knowledge, any prior or subsequent owner of any of the Property
pertaining to, or arising out of, any Environmental Conditions.
(ii) Except for conditions, violations or failures which
individually or in the aggregate are not reasonably likely to result in a
Material Adverse Change, there are no circumstances at, on or under any of the
Property that constitute a breach of or noncompliance with any of the
Environmental Laws, and (x) there are no present Environmental Conditions which
individually or in the aggregate are reasonably likely to result in a Material
Adverse Change nor to any Loan Party's actual knowledge, past Environmental
Conditions at, on or under any of the Property or, to any Loan Party's actual
knowledge, at, on or under adjacent property, which resulted from any Loan
Party's ownership or operations, and (y) nothing has come to the attention of
any Loan Party to indicate that
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there are any past or present Environmental Conditions, at, on, or under
adjacent property which resulted from the actions of other persons, in each case
(of (x) or (y) above), that prevent compliance with the Environmental Laws at
any of the Property.
(iii) Neither any of the Property nor any structures,
improvements, equipment, fixtures, activities or facilities thereon or
thereunder contain or use Regulated Substances except in compliance with
Environmental Laws. There are no processes, facilities, operations, equipment or
other activities at, on or under any of the Property, or, to any Loan Party's
knowledge, at, on or under adjacent property, that currently result in the
release or threatened release of Regulated Substances onto any of the Property,
except to the extent that such releases or threatened releases are not a breach
of or otherwise not a violation of the Environmental Laws, or are not likely to
result in a Material Adverse Change.
(iv) There are no aboveground storage tanks, underground
storage tanks or underground piping associated with such tanks, used for the
management of Regulated Substances at, on or under any of the Property that (a)
do not have, to the extent required by Environmental Laws, a full operational
secondary containment system in place, and (b) are not otherwise in compliance
with all applicable Environmental Laws. There are no abandoned underground
storage tanks or underground piping associated with such tanks, previously used
for the management of Regulated Substances by any Loan Party or any Subsidiaries
of any Loan Party or to the best of any Loan Party's knowledge, any such tanks
or piping which had been used by any prior owner or operator of the Property at,
on or under any of the Property that have not either been closed in place in
accordance with Environmental Laws or removed in compliance with all applicable
Environmental Laws, and to the best of each Loan Party's knowledge no
contamination associated with the use of such tanks exists on any of the
Property that is not in compliance with Environmental Laws.
(v) Each Loan Party and to the best of any Loan Party's
knowledge, each Subsidiary of any Loan Party has all material permits, licenses,
authorizations, plans and approvals necessary under the Environmental Laws for
the conduct of the business of such Loan Party or Subsidiary as presently
conducted. Each Loan Party and to the best of each Loan Party's knowledge each
Subsidiary of any Loan Party has submitted all material notices, reports and
other filings required by the Environmental Laws to be submitted to an Official
Body which pertain to past and current operations on any of the Property.
(vi) Except for violations which individually or in the
aggregate are not reasonably likely to result in a
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Material Adverse Change, all past and present on-site generation, storage,
processing, treatment, recycling, reclamation, disposal or other use or
management of Regulated Substances at, on, or under any of the Property and all
off-site transportation, storage, processing, treatment, recycling, reclamation,
disposal or other use or management of Regulated Substances by any Loan Party or
to the best of each Loan Party's knowledge by any other person have been done in
accordance with the Environmental Laws.
5.1.24 Senior Debt Status.
The Obligations of each Loan Party under this Agreement, the
Notes, the Guaranty Agreement and each of the other Loan Documents to which it
is a party do rank and will rank at least pari passu in priority of payment with
all other Indebtedness of such Loan Party except Indebtedness of such Loan Party
to the extent secured by Permitted Liens. There is no Lien upon or with respect
to any of the properties or income of any Loan Party or Subsidiary of any Loan
Party which secures indebtedness or other obligations of any Person except for
Permitted Liens.
5.2 Updates to Schedules.
Should any of the information or disclosures provided on any of the
Schedules attached hereto become outdated or incorrect in any material respect,
the Borrowers shall promptly provide the Agent in writing with such revisions or
updates to such Schedule as may be necessary or appropriate to update or correct
same; provided, however, that no Schedule shall be deemed to have been amended,
modified or superseded by any such correction or update, nor shall any breach of
warranty or representation resulting from the inaccuracy or incompleteness of
any such Schedule be deemed to have been cured thereby, unless and until the
Required Banks, in their sole and absolute discretion, shall have accepted in
writing such revisions or updates to such Schedule.
CONDITIONS OF LENDING AND ISSUANCE OF LETTERS OF CREDIT
The obligation of each Bank to make Loans and of the Agent to issue
Letters of Credit hereunder is subject to the performance by each of the Loan
Parties of its Obligations to be performed hereunder at or prior to the making
of any such Loans or issuance of such Letters of Credit and to the satisfaction
of the following further conditions:
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6.1 First Loans and Letters of Credit.
On the Closing Date:
6.1.1 Officer's Certificate.
The representations and warranties of each of the Loan Parties
contained in Article 5 and in each of the other Loan Documents shall be true and
accurate on and as of the Closing Date with the same effect as though such
representations and warranties had been made on and as of such date (except
representations and warranties which relate solely to an earlier date or time,
which representations and warranties shall be true and correct on and as of the
specific dates or times referred to therein), and each of the Loan Parties shall
have performed and complied with all covenants and conditions hereof and
thereof, no Event of Default or Potential Default shall have occurred and be
continuing or shall exist; and there shall be delivered to the Agent for the
benefit of each Bank a certificate of each of the Loan Parties, dated the
Closing Date and signed by the Chief Executive Officer, President or Chief
Financial Officer of each of the Loan Parties, to each such effect.
6.1.2 Secretary's Certificate.
There shall be delivered to the Agent for the benefit of each
Bank a certificate dated the Closing Date and signed by the Secretary or an
Assistant Secretary of each of the Loan Parties, certifying as appropriate as
to:
(i) all action taken by each Loan Party in connection with
this Agreement and the other Loan Documents;
(ii) the names of the officer or officers authorized to sign
this Agreement and the other Loan Documents and the true signatures of such
officer or officers and specifying the Authorized Officers permitted to act on
behalf of each Loan Party for purposes of this Agreement and the true signatures
of such officers, on which the Agent and each Bank may conclusively rely; and
(iii) copies of its organizational documents, including its
certificate of incorporation, bylaws, certificate of limited partnership,
partnership agreement, certificate of formation, and limited liability company
agreement as in effect on the Closing Date certified by the appropriate state
official where such documents are filed in a state office together with
certificates from the appropriate state officials as to the continued existence
and good standing of each Loan Party in each state where organized or qualified
to do business and a bring-down certificate by facsimile dated the Closing Date.
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Delivery of Loan Documents.
The Guaranty Agreement, Notes, Intercompany Subordination
Agreement and Security Agreement shall have been duly executed and delivered to
the Agent for the benefit of the Banks, together with all appropriate financing
statements.
6.1.4 Opinion of Counsel.
There shall be delivered to the Agent for the benefit of each
Bank a written opinion of Lowenthal, Landau, Fischer & Bring, P.C., counsel for
the Loan Parties (who may rely on the opinions of such other counsel as may be
acceptable to the Agent), dated the Closing Date and in form and substance
satisfactory to the Agent and its counsel:
(i) as to the matters set forth in Exhibit 6.1.4; and
(ii) as to such other matters incident to the transactions
contemplated herein as the Agent may reasonably request.
6.1.5 Legal Details.
All legal details and proceedings in connection with the
transactions contemplated by this Agreement and the other Loan Documents shall
be in form and substance satisfactory to the Agent and counsel for the Agent,
and the Agent shall have received all such other counterpart originals or
certified or other copies of such documents and proceedings in connection with
such transactions, in form and substance satisfactory to the Agent and said
counsel, as the Agent or said counsel may reasonably request.
6.1.6 Payment of Fees.
The Borrowers shall have paid or caused to be paid to the
Agent for itself and for the account of the Banks to the extent not previously
paid the commitment and other fees accrued through the Closing Date and the
costs and expenses for which the Agent and the Banks are entitled to be
reimbursed.
6.1.7 Borrowing Base Certificate.
Each Borrower shall deliver a Borrowing Base Certificate
prepared as of the Closing Date in substantially the form of Exhibit 7.3.4,
showing total unused Revolving Credit availability, after giving effect to the
Loans to be made to such Borrower on the Closing Date and consummation of the
transactions contemplated hereby.
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6.1.8 Consents.
All material consents required to effectuate the transactions
contemplated hereby as set forth on Schedule 5.1.13 shall have been obtained.
Officer's Certificate Regarding MACs.
Since August 31, 1996, no Material Adverse Change shall have
occurred and there shall have been no material change in the management of any
Loan Party or Subsidiary of any Loan Party; and there shall have been delivered
to the Agent for the benefit of each Bank a certificate dated the Closing Date
and signed by the Chief Executive Officer, President or Chief Financial Officer
of each Loan Party to each such effect.
6.1.10 No Violation of Laws.
The making of the Loans and the issuance of the Letters of
Credit shall not contravene any Law applicable to any Loan Party or any of the
Banks.
6.1.11 No Actions or Proceedings.
No action, proceeding, investigation, regulation or
legislation shall have been instituted, threatened or proposed before any court,
governmental agency or legislative body to enjoin, restrain or prohibit, or to
obtain damages in respect of, this Agreement, the other Loan Documents or the
consummation of the transactions contemplated hereby or thereby or which, in the
Agent's sole discretion, would make it inadvisable to consummate the
transactions contemplated by this Agreement or any of the other Loan Documents.
6.1.12 Insurance Policies; Certificates of Insurance;
Endorsements.
The Loan Parties shall have delivered evidence acceptable to
the Agent that adequate insurance in compliance with Section 7.1.3 [Maintenance
of Insurance] is in full force and effect and that all premiums then due thereon
have been paid, together with a certified copy of each Loan Party's casualty
insurance policy or policies evidencing coverage satisfactory to the Agent, with
additional insured and lender loss payable special endorsements attached thereto
in form and substance satisfactory to the Agent and its counsel naming the Agent
as additional insured and lender loss payee and provided that such coverage may
not be terminated without 10 days' prior written notice to the Agent.
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6.1.13 Filing Receipts.
The Agent shall have received (1) copy of all filing
receipts and acknowledgments issued by any governmental authority to evidence
any recordation or filing necessary to perfect the Lien of the Banks on the
Collateral or other satisfactory evidence of such recordation and filing, and
(2) evidence in a form acceptable to the Agent that such Lien constitutes a
Prior Security Interest in favor of the Agent for the benefit of the Banks.
6.1.14 Proceeds from Issuance of Senior Unsecured Notes.
The Borrowers shall have received not less than $129,000,000
in cash proceeds from the issuance of Senior Unsecured Notes replacing all
existing private placement debt issued and outstanding pursuant to the Note
Agreements and shall have provided evidence of the receipt and application of
such proceeds, together with a certificate of the President or Chief Financial
Officer to the Agent for the benefit of the Banks to such effect, all to the
satisfaction of the Agent in its sole discretion. The terms and conditions of
such notes shall be reasonably satisfactory to the Agent.
6.1.15 Lockbox Agreements.
The Borrowers shall deliver to the Agent a true and correct
copy of each of the National City Lockbox Agreement and the Chase Lockbox
Agreement.
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6.2 Each Additional Loan or Letter of Credit.
At the time of making any Loans or issuing any Letters of Credit
other than Loans made or Letters of Credit issued on the Closing Date and after
giving effect to the proposed extensions of credit: the representations and
warranties of the Loan Parties contained in Article 5 and in the other Loan
Documents shall be true on and as of the date of such additional Loan or Letter
of Credit with the same effect as though such representations and warranties had
been made on and as of such date (except representations and warranties which
expressly relate solely to an earlier date or time, which representations and
warranties shall be true and correct on and as of the specific dates or times
referred to therein) and the Loan Parties shall have performed and complied with
all covenants and conditions hereof; no Event of Default or Potential Default
shall have occurred and be continuing or shall exist; the making of the Loans or
issuance of such Letter of Credit shall not contravene any Law applicable to any
Loan Party or Subsidiary of any Loan Party or any of the Banks; and each
Borrower shall have delivered to the Agent a duly executed and completed Loan
Request or application for a Letter of Credit as the case may be.
7. COVENANTS
7.1 Affirmative Covenants.
The Loan Parties, jointly and severally, covenant and agree that
until payment in full of the Loans, Reimbursement Obligations and Letter of
Credit Borrowings, and interest thereon, expiration or termination of all
Letters of Credit, satisfaction of all of the Loan Parties' other Obligations
under the Loan Documents and termination of the Revolving Credit Commitments,
the Loan Parties shall comply at all times with the following affirmative
covenants:
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7.1.1 Preservation of Existence, Etc.
Each Loan Party shall, and shall cause each of its
Subsidiaries to, maintain its legal existence as a corporation, limited
partnership or limited liability company and its license or qualification and
good standing in each jurisdiction in which its ownership or lease of property
or the nature of its business makes such license or qualification necessary,
except as otherwise expressly permitted in Section 7.2.6 [Liquidations, Mergers,
Etc.], except that the Borrowers may cause a Subsidiary to dissolve (each a
"Permitted Voluntary Dissolution") and go out of existence if the Subsidiary
does not have any material assets and does not conduct any business and the Loan
Parties otherwise comply with the covenants herein with respect to such
Subsidiary.
7.1.2 Payment of Liabilities, Including Taxes, Etc.
Each Loan Party shall, and shall cause each of its
Subsidiaries to, duly pay and discharge all liabilities to which it is subject
or which are asserted against it, promptly as and when the same shall become due
and payable, or, in the case of trade payables, within 60 days thereafter,
including all taxes, assessments and governmental charges upon it or any of its
properties, assets, income or profits, prior to the date on which penalties
attach thereto, except to the extent that such liabilities, including taxes,
assessments or charges, are being contested in good faith and by appropriate and
lawful proceedings diligently conducted and for which such reserve or other
appropriate provisions, if any, as shall be required by GAAP shall have been
made, but only to the extent that failure to discharge any such liabilities
would not result in any additional liability which would adversely affect to a
material extent the financial condition of any Loan Party or Subsidiary of any
Loan Party or which would affect the Collateral, provided that the Loan Parties
and their Subsidiaries will pay all such liabilities forthwith upon the
commencement of proceedings to foreclose any Lien which may have attached as
security therefor, unless the applicable Loan Parties are prohibited by Law for
making such payment, in which case such Loan Party shall immediately notify the
Agent thereof and make such payment as soon as it is permitted to do so.
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7.1.3 Maintenance of Insurance.
Each Loan Party shall, and shall cause each of its
Subsidiaries to, insure its properties and assets against loss or damage by fire
and such other insurable hazards as such assets are commonly insured (including
fire, extended coverage, property damage, workers' compensation, public
liability and business interruption insurance) and against other risks
(including errors and omissions) in such amounts as similar properties and
assets are insured by prudent companies in similar circumstances carrying on
similar businesses, and with reputable and financially sound insurers, including
self-insurance to the extent customary, all as reasonably determined by the
Agent. At the request of the Agent, the Loan Parties shall deliver to the Agent
and each of the Banks (x) on the Closing Date and annually thereafter an
original certificate of insurance signed by the Loan Parties' independent
insurance broker describing and certifying as to the existence of the insurance
on the Collateral required to be maintained by this Agreement and the other Loan
Documents, together with a copy of the endorsement described in the next
sentence attached to such certificate, and (y) from time to time a summary
schedule indicating all insurance then in force with respect to each of the Loan
Parties. Such policies of insurance shall contain endorsements, in form and
substance acceptable to the Agent, which shall specify the Agent as an
additional insured and lender loss payee as its interests may appear and that
such insurance may be cancelled only upon ten (10) days notice to the Agent,
with the understanding that any obligation imposed upon the insured (including,
without limitation, the liability to pay premiums) shall be the sole obligation
of the Loan Parties and not that of the insured. Each Loan Party shall notify
the Agent promptly of any occurrence causing a material loss or decline in value
of the Collateral owned or leased by such Borrower and the estimated (or actual,
if available) amount of such loss or decline. Any monies received by the Agent
constituting proceeds of insurance on or relating to the Collateral, may, at the
option of the Agent, (i) be applied by the Agent to the payment of the Loans in
such manner as the Agent may reasonably determine, or (ii) be disbursed to the
applicable Loan Parties on such terms as are deemed appropriate by the Agent for
the repair, restoration and/or replacement of property in respect of which such
proceeds were received.
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7.1.4 Maintenance of Properties and Leases.
Each Loan Party shall, and shall cause each of its
Subsidiaries to, maintain in good repair, working order and condition (ordinary
wear and tear excepted) in accordance with the general practice of other
businesses of similar character and size, all of those properties useful or
necessary to its business, and from time to time, such Loan Party will make or
cause to be made all appropriate repairs, renewals or replacements thereof.
7.1.5 Maintenance of Patents, Trademarks, Etc.
Each Loan Party shall, and shall cause each of its
Subsidiaries to, maintain in full force and effect all patents, trademarks,
service marks, trade names, copyrights, licenses, franchises, permits and other
authorizations necessary for the ownership and operation of its properties and
business if the failure so to maintain the same would constitute a Material
Adverse Change.
7.1.6 Visitation Rights.
Each Loan Party shall, and shall cause each of its
Subsidiaries to, permit any of the officers or authorized employees or
representatives of the Agent or any of the Banks to visit and inspect any of its
properties and to examine and make excerpts from its books and records and
discuss its business affairs, finances and accounts with its officers, all in
such detail and at such times and as often as any of the Banks may reasonably
request, provided that each Bank shall provide any such Borrower and the Agent
with reasonable notice prior to any visit or inspection and all information
acquired in such visits shall be subject to Section 10.12. In the event any Bank
desires to conduct an audit of any Loan Party, such Bank shall make a reasonable
effort to conduct such audit contemporaneously with any audit to be performed by
the Agent.
7.1.7 Keeping of Records and Books of Account.
Each Borrower shall, and shall cause each Subsidiary of such
Borrower to, maintain and keep proper books of record and account which enable
such Borrower and its Subsidiaries to issue financial statements in accordance
with GAAP and as otherwise required by applicable Laws of any Official Body
having jurisdiction over the Borrower or any Subsidiary of such Borrower, and in
which full, true and correct entries shall be made in all material respects of
all its dealings and business and financial affairs.
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Plans and Benefit Arrangements.
Each Borrower shall, and shall cause each other member of the
ERISA Group to, comply with ERISA, the Internal Revenue Code and other
applicable Laws applicable to Plans and Benefit Arrangements except where such
failure, alone or in conjunction with any other failure, would not result in a
Material Adverse Change. Without limiting the generality of the foregoing, such
Borrower shall cause all of its Plans and all Plans maintained by any member of
the ERISA Group to be funded in accordance with the minimum funding requirements
of ERISA and shall make, and cause each member of the ERISA Group to make, in a
timely manner, all contributions due to Plans, Benefit Arrangements and
Multiemployer Plans.
7.1.9 Compliance With Laws.
Each Loan Party shall, and shall cause each of its
Subsidiaries to, comply with all applicable Laws, including all Environmental
Laws, in all respects, provided that it shall not be deemed to be a violation of
this Section 7.1.9 if any failure to comply with any Law would not result in
fines, penalties, remediation costs, other similar liabilities or injunctive
relief which in the aggregate would constitute a Material Adverse Change.
7.1.10 Use of Proceeds.
The Loan Parties will use the Letters of Credit and the
proceeds of the Loans only for general corporate purposes and for working
capital. The Loan Parties will not use the Letters of Credit or the proceeds of
the Loans for any purposes which contravene any applicable Law or any provision
hereof.
7.1.11 Further Assurances.
Each Loan Party shall, from time to time, at its expense,
faithfully preserve and protect the Agent's Lien on and Prior Security Interest
in the Collateral as a continuing first-priority perfected Lien, subject only to
Permitted Liens, and shall do such other acts and things as the Agent in its
sole discretion may deem necessary or advisable from time to time in order to
preserve, perfect and protect the Liens granted under the Loan Documents and to
exercise and enforce its rights and remedies thereunder with respect to the
Collateral.
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7.1.12 Subordination of Intercompany Loans.
Each Loan Party shall cause any intercompany Indebtedness,
loans or advances owed by any Loan Party to any other Loan Party to be
subordinated pursuant to the terms of the Intercompany Subordination Agreement.
7.1.13 Tax Sharing.
Borrowers shall not amend or modify the Tax Sharing Agreement
without the consent of the Required Banks, not to be unreasonably withheld.
Wire Transfer Agreement.
Upon the written request of the Agent, the Borrowers shall
promptly advise National City, and Chase to enter into a Wire Transfer Agreement
in the form attached as Exhibit 1.1(W) hereof.
7.2 Negative Covenants.
The Loan Parties, jointly and severally, covenant and agree that
until payment in full of the Loans, Reimbursement Obligations and Letter of
Credit Borrowings and interest thereon, expiration or termination of all Letters
of Credit, satisfaction of all of the Loan Parties' other Obligations hereunder
and termination of the Revolving Credit Commitments, the Loan Parties shall
comply with the following negative covenants:
7.2.1 Indebtedness.
Each of the Loan Parties shall not, and shall not permit any
of its Subsidiaries to, at any time create, incur, assume or suffer to exist any
Indebtedness, except:
(i) Indebtedness under the Loan Documents;
(ii) Existing Indebtedness as set forth on Schedule 7.2.1
(including any extensions, renewals or refinancings (except refinancings of the
Senior Unsecured Notes) thereof, provided there is no increase in the amount
thereof or other significant change in the terms thereof unless otherwise
specified on Schedule 7.2.1);
(iii) Capitalized and operating leases;
(iv) Indebtedness secured by Purchase Money Security
Interests;
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(v) Indebtedness of a Loan Party to another Loan Party which
is subordinated in accordance with the provisions of Section 7.1.12
[Subordination of Intercompany Loans] provided that the aggregate Indebtedness
of the Borrowers from their Subsidiaries other than the Borrowers may not exceed
$10,000,000 and provided that intercompany Indebtedness in the amount of up to
$21,000,000 is being written off on the Closing Date and the amount thereof
shall not be deemed to be outstanding under this clause (v) on or before the
Closing Date.
(vi) Indebtedness under Hedging Obligations, provided that (1)
such Hedging Obligations are related to payment obligations on Indebtedness
permitted under this Agreement and (2) the notional principal amount of such
Hedging Obligations does not exceed the principal amount of such Indebtedness to
which such Hedging Obligations relate.
(vii) Indebtedness in respect of bid, performance or surety
bonds issued for the account of any of the Loan Parties in the ordinary course
of business.
(viii) Other Indebtedness provided that after giving effect to
such Indebtedness the Borrower's Adjusted Fixed Charge Ratio computed as of the
end of the fiscal quarter preceding the fiscal quarter during which such
Indebtedness is incurred (the "Referenced Quarter") would be at least 2.0 to
1.0, determined on a pro forma basis as if the incurrence of such additional
Indebtedness and the application of the net proceeds therefrom had occurred at
the beginning of the four-quarter period ending with the Referenced Quarter.
7.2.2 Liens.
Each of the Loan Parties shall not, and shall not permit any
of its Subsidiaries to, at any time create, incur, assume or suffer to exist any
Lien on any of its property or assets, tangible or intangible, now owned or
hereafter acquired, or agree or become liable to do so, except Permitted Liens.
7.2.3 Guaranties.
Each of the Loan Parties shall not, and shall not permit any
of its Subsidiaries to, at any time, directly or indirectly, become or be liable
in respect of any Guaranty, or assume, guarantee, become surety for, endorse or
otherwise agree, become or remain directly or contingently liable upon or with
respect to any obligation or liability of any other Person, except for
Guaranties of Indebtedness of the Loan Parties permitted hereunder.
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7.2.4 Loans and Investments.
Each of the Loan Parties shall not, and shall not permit any
of its Subsidiaries to, at any time make or suffer to remain outstanding any
loan or advance to, or
purchase, acquire or own any stock, bonds, notes or securities of, or any
partnership interest (whether general or limited) or limited liability company
interest in, or any other investment or interest in, or make any capital
contribution to, any other Person, or agree, become or remain liable to do any
of the foregoing, except:
(i) trade credit extended on usual and customary terms in the
ordinary course of business;
(ii) advances to employees to meet expenses incurred by such
employees in the ordinary course of business;
(iii) Permitted Investments;
(iv) loans to Subsidiaries not exceeding $10,000,000, and
investments in Subsidiaries not exceeding amounts existing on the date hereof;
and
(v) investments (each an "Other Permitted Investment") by the
Loan Parties directly in any business that is closely related to or complements
the business of the Loan Parties, including an entity engaged in the business of
petroleum refining and/or retail marketing of refined petroleum products,
provided that (1) such business and investment complies with Section 7.2.9 and
(2) the sum of the Investment Consideration incurred in connection with such
investment plus the Acquisition Consideration incurred in connection with
Permitted Acquisitions may not exceed $35,000,000.
Dividends and Related Distributions.
Each of the Loan Parties shall not, and shall not permit any
of its Subsidiaries to, make or pay, or agree to become or remain liable to make
or pay, any dividend or other distribution of any nature (whether in cash,
property, securities or otherwise) on account of or in respect of its shares of
capital stock, partnership interests or limited liability company interests on
account of the purchase, redemption, retirement or acquisition of its shares of
capital stock (or warrants, options or rights therefor), partnership interests
or limited liability company interests, except that
(i) the Loan Parties may pay dividends or other distributions
payable to another Loan Party.
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(ii) the Loan Parties may pay dividends in aggregate amount on
or after the Closing Date not to exceed $5,000,000 provided that no Potential
Default or Event of Default exists and is continuing on the date of payment, and
(iii) the Loan Parties may pay within the three-month period
after the Borrowers deliver their annual financial statements and compliance
certificate pursuant to Sections 7.3.2 and 7.3.3 for any fiscal year, beginning
with the financial statements and compliance certificate for the fiscal year
ending August 31, 1997, make dividend payments in the aggregate amount not to
exceed 50% of the consolidated net income (computed in accordance with GAAP) of
the Borrowers for such year provided that:
(a) no Potential Default or Event of Default shall exist
on the date on which the Borrower's make such dividend payment after giving
effect to such dividend payment; and
(b) the Borrowers shall demonstrate the fact described
in clause (a) immediately above in the compliance certificate which they deliver
for such fiscal year.
(iv) the Loan Parties may pay dividends in an aggregate amount
less than or equal to the amount of the proceeds received by United Refining in
connection with the sale of capital stock of United Refining (other than to a
Borrower or a Subsidiary of a Borrower) after the Closing Date net of any
reasonable and customary fees and expenses, provided that no Potential Default
or Event of Default exists and is continuing on the date of payment.
(v) If any Other Permitted Investment described in and
permitted under Section 7.2.4 (v) is sold for cash or otherwise liquidated or
repaid for cash, the Loan Parties may pay dividends in an aggregate less than
or equal to the excess of (A) the net cash proceeds from such sale (less the
cost of disposition if any) over (B) the Investment Consideration paid,
incurred or given in connection with such Permitted Investment, provided that
no Potential Default or Event of Default exists and is continuing on the date
of payment--
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(v)Liquidations, Mergers, Consolidations, Acquisitions.
Each of the Loan Parties shall not, and shall not permit any
of its Subsidiaries to, dissolve, liquidate or wind-up its affairs, or become a
party to any merger or consolidation, or acquire by purchase, lease or otherwise
all or substantially all of the assets or capital stock of any other Person,
provided that:
(1) any Subsidiary of any of the Borrowers (except for the
Borrowers) may consolidate with or merge into or sell, transfer, lease or
otherwise dispose of all or substantially all of its assets to a Borrower or a
wholly-owned Subsidiary of a Borrower if such Borrower or wholly-owned
Subsidiary shall be the surviving corporation and if, immediately after giving
effect to such transaction, no condition or event shall exist which constitutes
an Event of Default or Potential Default; and
(2) any corporation (other than a Borrower or a Subsidiary of
a Borrower) may consolidate with or merge into a Borrower if such Borrower shall
be the surviving corporation and if, immediately after giving effect to such
transaction, (a) no condition or event shall exist which constitutes an Event of
Default or Potential Default and (b) the transaction does not require or involve
any payment or other consideration from any Borrower or a Subsidiary of any
Borrower; and
(3) any Subsidiary of a Borrower may dissolve or merge out of
existence if such Subsidiary has no assets and conducts no business.
(4) any Loan Party may acquire, whether by purchase or by
merger, (A) some or all of the ownership interests of another Person or (B)
substantially all of the assets of another Person or of a business or division
of another Person (each a "Permitted Acquisition"), provided that each of the
following requirements is met:
(i) if the Loan Parties are acquiring the ownership
interests in such Person, such Person shall execute a Guarantor Joinder
and join this Agreement as a Guarantor pursuant to Section 10.18 [Joinder
of Guarantors] on or before the date of such Permitted Acquisition;
(ii) the Loan Parties, such Person and its owners, as
applicable, shall grant Liens to the Agent in the assets acquired to the
extent they constitute Collateral of such Person and otherwise comply with
Section [Joinder of Guarantors] on or before the date
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of such Permitted Acquisition,
(iii) the business acquired, or the business conducted
by the Person whose ownership interests are being acquired, as applicable,
shall be substantially the same as one or more line or lines of business
conducted by the Loan Parties and shall comply with Section 7.2.10
[Continuation of or Change in Business],
(iv) no Potential Default or Event of Default shall
exist immediately prior to and after giving effect to such Permitted
Acquisition,
the Borrower shall demonstrate that it shall be in
compliance with the covenants contained in Section 7.2.1 and this Section
7.2.6 after giving effect to such Permitted Acquisition (including in such
computation Indebtedness or other liabilities assumed or incurred in
connection with such Permitted Acquisition but excluding income earned or
expenses incurred by the Person, business or assets to be acquired prior
to the date of such Permitted Acquisition) by delivering at least five (5)
Business Days prior to such Permitted Acquisition a certificate in the
form of Exhibit 7.2.6 evidencing such compliance.
(vi) the sum of the following paid by the Loan Parties
between the Closing Date and the date of such Permitted Acquisition shall
not exceed $35,000,000 (1) the Acquisition Consideration paid by the Loan
Parties for such Permitted Acquisition and all other Permitted
Acquisitions, and (2) the Investment Consideration paid by the Loan
Parties for all Other Permitted Investments described in Section 7.2.4
(v); provided that the Banks will reasonably consider any request by the
Borrowers to make an acquisition which will cause the sum of Permitted
Acquisitions and Other Permitted Investments to exceed the $35,000,000
limitation in this clause (vi) and such acquisition may be approved by the
Required Banks, and
(vii) any Indebtedness assumed or incurred in connection
with such Permitted Acquisition must meet the requirements of Clause
(viii) of Section 7.2.1 or otherwise be permitted under Section 7.2.1; and
(viii) the Loan Parties shall deliver to the Agent at
least five (5) Business Days before such Permitted Acquisition copies of
any agreements entered into or proposed to be entered into by such Loan
Parties in connection with such Permitted Acquisition and shall deliver to
the Agent such other information about such
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Person or its assets as any Loan Party may reasonably require.
7.2.7 Dispositions of Assets or Subsidiaries.
Each of the Loan Parties shall not, and shall not permit any
of its Subsidiaries to, sell, sell and lease back, convey, assign, lease,
abandon or otherwise transfer or dispose of, voluntarily or involuntarily, any
of its properties or assets, tangible or intangible (including sale, assignment,
discount or other disposition of accounts, contract rights, chattel paper,
equipment or general intangibles with or without recourse or of capital stock,
shares of beneficial interest, partnership interests or limited liability
company interests of a Subsidiary of such Loan Party), except:
(i) transactions involving the sale of inventory in the
ordinary course of business;
(ii) any sale, transfer or lease of assets in the ordinary
course of business which is no longer necessary or required in the conduct of
such Loan Party's or such Subsidiary's business; any sale, transfer or lease of
assets by any wholly owned Subsidiary of such Loan Party to another Loan Party;
(iv) any sale, transfer or lease of assets in the ordinary
course of business which is replaced by substitute assets acquired or leased,
provided such substitute assets are subject to the Banks' Prior Security
Interest; or
(v) any sale, transfer or lease of properties which (a) have
become obsolete or (b) have no net value (after giving effect to the cost of
maintaining such properties) and have no use in the business of the Loan
Parties.
(vi) any sale, transfer or lease of assets, other than those
specifically excepted pursuant to clauses (i) through (v) above, which is
approved by the Required Banks.
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7.2.8 Affiliate Transactions.
Each of the Loan Parties shall not, and shall not permit any
of its Subsidiaries to, enter into or carry out any transaction among one
another or any of their Affiliates including, without limitation, purchasing
property or services from any Affiliate, selling property or services to any
Affiliate, reimbursing an Affiliate for expenses (including overhead which an
Affiliate incurs), on any Borrower's behalf, except as permitted in clauses (i)
and (ii) below:
(i) The Borrowers may pay up to $1,000,000 during any fiscal
year pursuant to the Servicing Agreement.
(ii) The Borrowers may enter into transactions in the ordinary
course of business upon fair and reasonable arms' length terms and conditions,
provided that (a) the
Borrower shall fully disclose the proposed terms and conditions of each
transaction to the Agent at least ten (10) Business Days prior to the date on
which any Borrower enters into such transaction; such disclosure shall be in
sufficient detail to demonstrate the Borrowers' compliance with this Section
7.2.8 to the satisfaction of the Banks and (b) such terms and conditions are in
accordance with all applicable Law and are not otherwise prohibited by this
Agreement.
7.2.9 Subsidiaries, Partnerships and Joint Ventures.
Each of the Loan Parties shall not, and shall not permit any
of its Subsidiaries to, own or create directly or indirectly any Subsidiaries
other than (i) those listed in Schedule 5.1.3, and (ii) any Subsidiary formed
after the Closing Date which joins this Agreement as a Guarantor pursuant to
Section 10.18 [Joinder of Guarantors], provided that such Subsidiary and the
Loan Parties, as applicable, shall grant and cause to be perfected first
priority Liens to the Agent for the benefit of the Banks in the Collateral held
by such Subsidiary. Each of the Loan Parties shall not become or agree to become
(i) a general or limited partner in any general or limited partnership, (ii) a
member or manager of, or hold a limited liability company interest in, a limited
liability company, or (iii) a joint venturer or hold a joint venture interest in
any joint venture.
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7.2.10 Continuation of or Change in Business.
Each of the Loan Parties shall not, and shall not permit any
of its Subsidiaries to, engage in any business other than the refining,
distribution and sale of petroleum and petroleum products and the ownership and
operation of retail convenience stores and supermarkets, substantially as
conducted and operated by such Loan Party or Subsidiary during the present
fiscal year, and such Loan Party or Subsidiary shall not permit any material
change in such business.
7.2.11 Plans and Benefit Arrangements.
Each of the Loan Parties shall not, and shall not permit any
of its Subsidiaries to:
(i) fail to satisfy the minimum funding requirements of ERISA
and the Internal Revenue Code with respect to any Plan;
(ii) request a minimum funding waiver from the Internal
Revenue Service with respect to any Plan;
(iii) engage in a Prohibited Transaction with any Plan,
Benefit Arrangement or Multiemployer Plan which, alone or in conjunction with
any other circumstances or set of circumstances resulting in liability under
ERISA, would constitute a Material Adverse Change;
(iv) permit the aggregate actuarial present value of all
benefit liabilities (whether or not vested) under each Plan, determined on a
Financial Accounting Statement 35 basis, as disclosed in the most recent
actuarial report completed with respect to such Plan, to exceed, as of any
actuarial valuation date, the fair market value of the assets of such Plan;
(v) fail to make when due any contribution to any
Multiemployer Plan that a Borrower or any member of the ERISA Group may be
required to make under any agreement relating to such Multiemployer Plan, or any
Law pertaining thereto;
(vi) withdraw (completely or partially) from any Multiemployer
Plan or withdraw (or be deemed under Section 4062(e) of ERISA to withdraw) from
any Multiple Employer Plan, where any such withdrawal is likely to result in a
material liability of a Borrower or any member of the ERISA Group;
(vii) terminate, or institute proceedings to terminate, any
Plan, where such termination is likely to result in a material liability to a
Borrower or any member of the ERISA
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Group;
(viii) make any amendment to any Plan with respect to which
security is required under Section 307 of ERISA; or
fail to give any and all notices and make all disclosures and
governmental filings required under ERISA or the Internal Revenue Code, where
such failure is likely to result in a Material Adverse Change.
7.2.12 Fiscal Year.
Each Borrower shall not, and shall not permit any Subsidiary
of such Borrower to, change its fiscal year from the twelve-month period
beginning September 1 and ending August 31.
7.2.13 Change in Control.
The Borrowers shall not permit any sale, transfer or other
disposition of capital stock of United Refining by any Person except (i) sales,
transfers or dispositions by a Person resulting in not more than a forty-nine
percent (49%) change of ownership of the capital stock of United Refining in the
aggregate over the term of this Agreement by such Person; or (ii) involuntary
transfers as a result of death, incapacity, liquidation or dissolution.
7.2.14 Issuance of Stock.
Each of the Loan Parties shall not, and shall not permit any
of its Subsidiaries to, issue any additional shares of its capital stock or any
options, warrants or other rights in respect thereof, except that United
Refining may permit a sale, transfer or other disposition of its shares which is
permitted under Section 7.2.13
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7.2.15 Changes in Organizational Documents and Senior
Unsecured Notes.
Each of the Loan Parties shall not, and shall not permit any
of its Subsidiaries to, amend in any respect its certificate of incorporation
(including any provisions or resolutions relating to capital stock), by-laws or
other organizational documents without providing at least thirty (30) calendar
days' prior written notice to the Agent and the Banks and, in the event such
change would be adverse to the Banks as determined by the Agent in its sole
discretion, obtaining the prior written consent of the Required Banks. Each of
the Loan Parties shall not amend in any respect any provision of the Senior
Unsecured Notes or related agreements if such amendment provides for, or could
result in, any addition, acceleration or increase, directly or indirectly, in
the amount of any principal payment thereunder, except that the Senior Unsecured
Notes and related agreements may be amended to provide for the addition or
increase of payments which are due after the scheduled due date for the last
payment due under such Senior Unsecured Notes (as such Senior Unsecured Notes
exist on the Closing Date) without obtaining the prior written consent of the
Required Banks.
7.2.16 Minimum Fixed Charge Coverage Ratio.
The Loan Parties shall not permit the Fixed Charge Coverage
Ratio, calculated as of the end of each fiscal quarter set forth below (each a
"Measurement Date") for the period set forth below (each a "Measurement
Period")to be less than the ratio set forth below.
Measurement Date Measurement Period Minimum Ratio
August 31, 1997 Quarter then ended 1.1 to 1.0
November 30, 1997 Two quarters then ended 1.1 to 1.0
February 28, 1998 Three quarters then ended 1.1 to 1.0
May 31, 1998 and each Four quarters then ended 1.25 to 1.0
fiscal quarter thereafter
7.2.17 Minimum Net Worth.
The Loan Parties shall not at any time permit Consolidated Net
Worth to be less than the Base Net Worth.
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7.3 Reporting Requirements.
The Loan Parties, jointly and severally, covenant and agree that
until payment in full of the Loans, Reimbursement Obligations and Letter of
Credit Borrowings and interest thereon, expiration or termination of all Letters
of Credit, satisfaction of all of the Loan Parties' other Obligations hereunder
and under the other Loan Documents and termination of the Revolving Credit
Commitments, the Loan Parties will furnish or cause to be furnished to the Agent
and each of the Banks:
7.3.1 Quarterly Financial Statements.
As soon as available and in any event within forty-five (45)
calendar days after the end of each of the first three fiscal quarters in each
fiscal year, financial statements of the Borrowers consisting of a consolidated
and consolidating balance sheet as of the end of such fiscal quarter and related
consolidated and consolidating statements of income, stockholders' equity and
cash flows for the fiscal quarter then ended and the fiscal year through that
date, all in reasonable detail and certified (subject to normal year-end audit
adjustments) by the Chief Executive Officer, President or Chief Financial
Officer of each Borrower as having been prepared in accordance with GAAP,
consistently applied, and setting forth in comparative form the respective
financial statements for the corresponding date and period in the previous
fiscal year.
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7.3.2 Annual Financial Statements.
As soon as available and in any event within ninety (90) days
after the end of each fiscal year of the Borrowers, financial statements of the
Borrowers consisting of a consolidated and consolidating balance sheet as of the
end of such fiscal year and related consolidated and consolidating statements of
income, stockholders' equity and cash flows for the fiscal year then ended, all
in reasonable detail and setting forth in comparative form the financial
statements as of the end of and for the preceding fiscal year, and certified by
independent certified public accountants of nationally recognized standing
satisfactory to the Agent. The Banks acknowledge that the Borrowers' current
accountants, BDO Seidman, LLP, are satisfactory. The certificate or report of
accountants shall be free of qualifications (other than any consistency
qualification that may result from a change in the method used to prepare the
financial statements as to which such accountants concur) and shall not indicate
the occurrence or existence of any event, condition or contingency which would
materially impair the prospect of payment or performance of any covenant,
agreement or duty of any Loan Party under any of the Loan Documents. The Loan
Parties shall deliver with such financial statements and certification by their
accountants a letter of such accountants to the Agent and the Banks
substantially (i) to the effect that, based upon their ordinary and customary
examination of the affairs of the Borrowers performed in connection with the
preparation of such consolidated financial statements, and in accordance with
generally accepted auditing standards, they are not aware of the existence of
any condition or event which constitutes an Event of Default or Potential
Default or, if they are aware of such condition or event, stating the nature
thereof and confirming the Borrowers' calculations with respect to the
certificate to be delivered pursuant to Section 7.3.3 [Certificate of the
Borrowers] with respect to such financial statements, and (ii) to the effect
that the Banks are intended to rely upon such accountant's certification of the
annual financial statements and that such accountants authorize the Loan Parties
to deliver such reports and certificate to the Banks on such accountants'
behalf.
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7.3.3 Certificate of the Borrowers.
Concurrently with the financial statements of the Borrowers
furnished to the Agent and to the Banks pursuant to Sections 7.3.1 [Quarterly
Financial Statements] and 7.3.2 [Annual Financial Statements], a certificate of
each Borrower signed by the Chief Executive Officer, President or Chief
Financial Officer of such Borrower, in the form of Exhibit 7.3.3, to the effect
that, except as described pursuant to Section 7.3.5 [Notice of Default], (i) the
representations and warranties of such Borrower contained in Article 5 and in
the other Loan Documents are true on and as of the date of such certificate with
the same effect as though such representations and warranties had been made on
and as of such date (except representations and warranties which expressly
relate solely to an earlier date or time), and the Loan Parties have performed
and complied with all covenants and conditions hereof and thereof, (ii) no Event
of Default or Potential Default exists and is continuing on the date of such
certificate, and (iii) containing calculations in sufficient detail to
demonstrate compliance as of the date of such financial statements with all
financial covenants contained in Section 7.2 [Negative Covenants].
7.3.4 Weekly Borrowing Base Certificates, Schedules of
Accounts and Inventory, Audits of Accounts and Inventory.
As soon as available: (i) by the Second Business Day of each
week, a Borrowing Base Certificate, as of the last Business Day of the
immediately preceding week, in the form of Exhibit 7.3.4 hereto, appropriately
completed, executed and delivered by an Authorized Officer, and (ii) a Schedule
of Accounts and Schedule of Inventory as of the end of the immediately preceding
week. The Borrower shall cause to be performed and delivered to the Banks an
audit by the Agent or another person acceptable to the Banks of Borrowers'
accounts and inventory one time during each fiscal year of the Borrowers.
7.3.5 Notice of Default.
Promptly after any officer of any Loan Party has learned of
the occurrence of an Event of Default or Potential Default, a certificate signed
by the Chief Executive Officer, President or Chief Financial Officer of such
Loan Party setting forth the details of such Event of Default or Potential
Default and the action which the such Loan Party proposes to take with respect
thereto.
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7.3.6 Notice of Litigation.
Promptly after the commencement thereof, notice of all
actions, suits, proceedings or investigations before or by any Official Body or
any other Person against any Loan Party or Subsidiary of any Loan Party which
relate to the Collateral, involve a claim or series of claims in excess of
$1,000,000 or which if adversely determined would constitute a Material Adverse
Change.
7.3.7 Certain Events.
Written notice to the Agent:
(i) at least thirty (30) calendar days prior thereto, with
respect to any proposed sale or transfer of assets pursuant to Section 7.2.7(iv)
or (v);
(ii) within the time limits set forth in Section 7.2.15
[Changes in Organizational Documents], any amendment to the organizational
documents of any Loan Party;
(iii) at least thirty (30) calendar days prior thereto, with
respect to any change in any Loan Party's location(s) from the location(s) set
forth in Schedule A to the Security Agreement; and
(iv) at least thirty (30) calendar days prior thereto, with
respect to any change in the fiscal year of any Loan Party or its Subsidiaries.
7.3.8 Budgets, Forecasts, Other Reports and Information.
(A) Upon the request of the Agent or the Banks, the annual
budget and any forecasts or projections of each Borrower, to be supplied not
later than the commencement of the fiscal year to which any of the foregoing may
be applicable,
(B) Promptly upon their becoming available to any Borrower:
(i) any reports, including management letters, submitted
to any Borrower by independent accountants in connection with any annual,
interim or special audit,
any reports, notices or proxy statements generally
distributed by any Borrower to its stockholders on a date no later than
the date supplied to such stockholders,
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(iii) regular or periodic reports, including Forms 10-K,
10-Q and 8-K, registration statements and prospectuses, filed by any
Borrower with the Securities and Exchange Commission,
(iv) a copy of any order issued by any Official Body in
any proceeding to which any Borrower or any of its Subsidiaries is a
party, and
(v) such other reports and information as any of the
Banks may from time to time reasonably request. Each Borrower shall also
notify the Banks promptly of the enactment or adoption of any Law which
may result in a Material Adverse Change.
7.3.9 Notices Regarding Plans and Benefit Arrangements.
.3.9.1 Certain Events
Promptly upon becoming aware of the occurrence thereof,
notice (including the nature of the event and, when known, any action taken or
threatened by the Internal Revenue Service or the PBGC with respect thereto) of:
(i) any Reportable Event with respect to any Borrower or any
other member of the ERISA Group (regardless of whether the obligation to report
said Reportable Event to the PBGC has been waived),
(ii) any Prohibited Transaction which could subject any
Borrower or any other member of the ERISA Group to a civil penalty assessed
pursuant to Section 502(i) of ERISA or a tax imposed by Section 4975 of the
Internal Revenue Code in connection with any Plan, any Benefit Arrangement or
any trust created thereunder,
(iii) any assertion of material withdrawal liability with
respect to any Multiemployer Plan,
(iv) any partial or complete withdrawal from a Multiemployer
Plan by any Borrower or any other member of the ERISA Group under Title IV of
ERISA (or assertion thereof), where such withdrawal is likely to result in
material withdrawal liability,
(v) any cessation of operations (by any Borrower or any other
member of the ERISA Group) at a facility in the circumstances described in
Section 4062(e) of ERISA,
(vi) withdrawal by any Borrower or any other
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member of the ERISA Group from a Multiple Employer Plan,
a failure by any Borrower or any other member of the ERISA
Group to make a payment to a Plan required to avoid imposition of a Lien under
Section 302(f) of ERISA,
(viii) the adoption of an amendment to a Plan requiring the
provision of security to such Plan pursuant to Section 307 of ERISA, or
(ix) any change in the actuarial assumptions or funding
methods used for any Plan, where the effect of such change is to materially
increase or materially reduce the unfunded benefit liability or obligation to
make periodic contributions.
.3.9.2 Notices of Involuntary Termination and
Annual Reports.
Promptly after receipt thereof, copies of (a) all
notices received by any Borrower or any other member of the ERISA Group of the
PBGC's intent to terminate any Plan administered or maintained by any Borrower
or any member of the ERISA Group, or to have a trustee appointed to administer
any such Plan; and (b) at the request of the Agent or any Bank, each annual
report (IRS Form 5500 series) and all accompanying schedules, the most recent
actuarial reports, the most recent financial information concerning the
financial status of each Plan administered or maintained by the Borrower or any
other member of the ERISA Group, and schedules showing the amounts contributed
to each such Plan by or on behalf of the Borrower or any other member of the
ERISA Group in which any of their personnel participate or from which such
personnel may derive a benefit, and each Schedule B (Actuarial Information) to
the annual report filed by any Borrower or any other member of the ERISA Group
with the Internal Revenue Service with respect to each such Plan.
.3.9.3 Notice of Voluntary Termination
Promptly upon the filing thereof, copies of any Form
5310, or any successor or equivalent form to Form 5310, filed with the PBGC in
connection with the termination of any Plan.
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8. DEFAULT
8.1 Events of Default.
An Event of Default shall mean the occurrence or existence of any
one or more of the following events or conditions (whatever the reason therefor
and whether voluntary, involuntary or effected by operation of Law):
8.1.1 Payments Under Loan Documents.
Any Borrower shall fail to pay (i) any principal of any Loan
(including scheduled installments, mandatory prepayments or the payment due at
maturity), Reimbursement Obligation or Letter of Credit Borrowing after such
principal becomes due in accordance with the terms hereof or under any other
Loan Document, or (ii) shall fail to pay any interest on any Loan, Reimbursement
Obligation or Letter of Credit Borrowing or any other amount owing hereunder or
under the other Loan Documents, within three (3) days after such interest or
other amount becomes due in accordance with the terms hereof or thereof;
8.1.2 Breach of Warranty.
Any representation or warranty made at any time by any of the
Loan Parties herein or by any of the Loan Parties in any other Loan Document, or
in any certificate, other instrument or statement furnished pursuant to the
provisions hereof or thereof, shall prove to have been false or misleading in
any material respect as of the time it was made or furnished;
8.1.3 Breach of Negative Covenants or Visitation Rights.
Any of the Loan Parties shall default in the observance or
performance of any covenant contained in Section 7.1.6 [Visitation Rights] or
Section 7.2 [Negative Covenants];
8.1.4 Breach of Other Covenants.
Any of the Loan Parties shall default in the observance or
performance of any other covenant, condition or provision hereof or of any other
Loan Document, and such default shall continue unremedied for a period of twenty
five (25) Business Days after any officer of any Loan Party becomes aware of the
occurrence thereof (such grace period to be applicable only in the event such
default can be remedied by corrective action of the Loan Parties as determined
by the Agent in its sole discretion);
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8.1.5 Defaults in Other Agreements or Indebtedness.
A default or event of default shall occur at any time under
the terms of any other agreement involving borrowed money or the extension of
credit or any other Indebtedness under which any Loan Party or Subsidiary of any
Loan Party may be obligated as a borrower or guarantor in excess of $2,500,000
in the aggregate, and such breach, default or event of default consists of the
failure to pay (beyond any period of grace permitted with respect thereto,
whether waived or not) any indebtedness when due (whether at stated maturity, by
acceleration or otherwise) if such breach or default causes the acceleration of
any indebtedness (whether or not such right shall have been waived) or the
termination of any commitment to lend;
8.1.6 Final Judgments or Orders.
Any final judgments or orders for the payment of money in
excess of $2,500,000 in the aggregate shall be entered against any Loan Party by
a court having jurisdiction in the premises, which judgment is not discharged,
vacated, bonded or stayed pending appeal within a period of thirty (30) days
from the date of entry;
Loan Document Unenforceable.
Any of the Loan Documents shall cease to be legal, valid and
binding agreements enforceable against the party executing the same or such
party's successors and assigns (as permitted under the Loan Documents) in
accordance with the respective terms thereof, or shall in any way be terminated
(except in accordance with its terms) or become or be declared ineffective or
inoperative, or shall in any way be challenged or contested or cease to give or
provide the respective Liens, security interests, rights, titles, interests,
remedies, powers or privileges intended to be created thereby;
8.1.8 Notice of Lien or Assessment.
A notice of Lien or assessment in excess of $2,500,000 which
is not a Permitted Lien is filed of record with respect to all or any part of
any of the Loan Parties' or any of their Subsidiaries' assets by the United
States or any department, agency or instrumentality thereof, or by any state,
county, municipal or other governmental agency, including the PBGC, or any taxes
or debts owing at any time or times hereafter to any one of these becomes
payable and the same is not paid or bonded within thirty (30) days after the
same becomes payable;
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8.1.9 Insolvency.
Any Loan Party or any Subsidiary of a Loan Party ceases to be
solvent or admits in writing its inability to pay its debts as they mature;
8.1.10 Events Relating to Plans and Benefit Arrangements.
Any of the following occurs: (i) any Reportable Event, which
the Agent determines in good faith constitutes grounds for the termination of
any Plan by the PBGC or the appointment of a trustee to administer or liquidate
any Plan, shall have occurred and be continuing; (ii) proceedings shall have
been instituted or other action taken to terminate any Plan, or a termination
notice shall have been filed with respect to any Plan; (iii) a trustee shall be
appointed to administer or liquidate any Plan; (iv) the PBGC shall give notice
of its intent to institute proceedings to terminate any Plan or Plans or to
appoint a trustee to administer or liquidate any Plan; and, in the case of the
occurrence of (i), (ii), (iii) or (iv) above, the Agent determines in good faith
that the amount of any Borrower's liability is likely to exceed 10% of its
Consolidated Net Worth; (v) any Borrower or any member of the ERISA Group shall
fail to make any contributions when due to a Plan or a Multiemployer Plan; (vi)
any Borrower or any other member of the ERISA Group shall make any amendment to
a Plan with respect to which security is required under Section 307 of ERISA;
(vii) any Borrower or any other member of the ERISA Group shall withdraw
completely or partially from a Multiemployer Plan; (viii) any Borrower or any
other member of the ERISA Group shall withdraw (or shall be deemed under Section
4062(e) of ERISA to withdraw) from a Multiple Employer Plan; or (ix) any
applicable Law is adopted, changed or interpreted by any Official Body with
respect to or otherwise affecting one or more Plans, Multiemployer Plans or
Benefit Arrangements, and with respect to any of the events specified in (v),
(vi), (vii), (viii) or (ix), the Agent determines in good faith that any such
occurrence would be reasonably likely to materially and adversely affect the
total enterprise represented by any Borrower and the other members of the ERISA
Group;
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Cessation of Business.
Any Loan Party or Subsidiary of a Loan Party ceases to conduct
its business as contemplated, except for a Permitted Voluntary Dissolution or as
expressly permitted under Section 7.2.6 [Liquidations, Mergers, Etc.] or 7.2.7
[Disposition of Assets or Subsidiaries], or any Loan Party or Subsidiary of a
Loan Party is enjoined, restrained or in any way prevented by court order from
conducting all or any material part of its business, and such injunction,
restraint or other preventive order is not dismissed within thirty (30) days
after the entry thereof;
8.1.12 Involuntary Proceedings.
A proceeding shall have been instituted in a court having
jurisdiction in the premises seeking a decree or order for relief in respect of
any Loan Party or Subsidiary of a Loan Party in an involuntary case under any
applicable bankruptcy, insolvency, reorganization or other similar Law now or
hereafter in effect, or for the appointment of a receiver, liquidator, assignee,
custodian, trustee, sequestrator, conservator (or similar official) of any Loan
Party or Subsidiary of a Loan Party for any substantial part of its property, or
for the winding-up or liquidation of its affairs, and such proceeding shall
remain undismissed or unstayed and in effect for a period of thirty (30)
consecutive days or such court shall enter a decree or order granting any of the
relief sought in such proceeding; or
8.1.13 Voluntary Proceedings.
Any Loan Party or Subsidiary of a Loan Party shall commence a
voluntary case under any applicable bankruptcy, insolvency, reorganization or
other similar Law now or hereafter in effect, shall consent to the entry of an
order for relief in an involuntary case under any such Law, shall consent to the
appointment or taking possession by a receiver, liquidator, assignee, custodian,
trustee, sequestrator, conservator (or other similar official) of itself or for
any substantial part of its property, shall make a general assignment for the
benefit of creditors, shall fail generally to pay its debts as they become due
or shall take any action in furtherance of any of the foregoing.
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8.2 Consequences of Event of Default.
8.2.1 Events of Default Other Than Bankruptcy,
Insolvency or Reorganization Proceedings.
If an Event of Default specified under Sections 8.1.1 through
8.1.12 shall occur and be continuing, the Banks and the Agent shall be under no
further obligation to make Loans or issue Letters of Credit, as the case may be,
and the Agent may, and upon the request of the Required Banks shall, (i) by
written notice to the Borrowers, declare the unpaid principal amount of the
Notes then outstanding and all interest accrued thereon, any unpaid fees and all
other Indebtedness of the Borrowers to the Banks hereunder and thereunder to be
forthwith due and payable, and the same shall thereupon become and be
immediately due and payable to the Agent for the benefit of each Bank without
presentment, demand, protest or any other notice of any kind, all of which are
hereby expressly waived, and (ii) require the Borrowers to, and each Borrower
shall thereupon, deposit in a non-interest-bearing account with the Agent, as
cash collateral for its Obligations under the Loan Documents, an amount equal to
the maximum amount currently or at any time thereafter available to be drawn on
all outstanding Letters of Credit, and each Borrower hereby pledges to the Agent
and the Banks, and grants to the Agent and the Banks a security interest in, all
such cash as security for such Obligations. Upon the curing of all existing
Events of Default to the satisfaction of the Required Banks, the Agent shall
return such cash collateral to the appropriate Borrower.
8.2.2 Bankruptcy, Insolvency or Reorganization
Proceedings.
If an Event of Default specified under Section 8.1.13
[Involuntary Proceedings] or 8.1.14 [Voluntary Proceedings] shall occur, the
Banks shall be under no further obligations to make Loans hereunder, and the
unpaid principal amount of the Loans then outstanding and all interest accrued
thereon, any unpaid fees and all other Indebtedness of the Borrowers to the
Banks hereunder and thereunder shall be immediately due and payable, without
presentment, demand, protest or notice of any kind, all of which are hereby
expressly waived.
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8.2.3 Set-off.
If an Event of Default shall occur and be continuing, any Bank
to whom any Obligation is owed by any Loan Party hereunder or under any other
Loan Document or any participant of such Bank which has agreed in writing to be
bound by the provisions of Section 9.13 [Equalization of Banks] and any branch,
Subsidiary or Affiliate of such Bank or participant anywhere in the world shall
have the right, in addition to all other rights and remedies available to it,
without notice to such Loan Party, to set off against and apply to the then
unpaid balance of all the Loans and all other Obligations of the Borrowers and
the other Loan Parties hereunder or under any other Loan Document any debt owing
to, and any other funds held in any manner for the account of, the Borrowers or
any Borrower or such other Loan Party by such Bank or participant or by such
branch, Subsidiary or Affiliate, including all funds in all deposit accounts
(whether time or demand, general or special, provisionally credited or finally
credited, or otherwise) now or hereafter maintained by a Borrower or such other
Loan Party for its own account (but not including funds held in custodian or
trust accounts) with such Bank or participant or such branch, Subsidiary or
Affiliate. Such right shall exist whether or not any Bank or the Agent shall
have made any demand under this Agreement or any other Loan Document, whether or
not such debt owing to or funds held for the account of a Borrower or such other
Loan Party is or are matured or unmatured and regardless of the existence or
adequacy of any Collateral, Guaranty or any other security, right or remedy
available to any Bank or the Agent.
8.2.4 Suits, Actions, Proceedings.
If an Event of Default shall occur and be continuing, and
whether or not the Agent shall have accelerated the maturity of Loans pursuant
to any of the foregoing provisions of this Section 8.2, the Agent or any Bank,
if owed any amount with respect to the Loans, may proceed to protect and enforce
its rights by suit in equity, action at law and/or other appropriate proceeding,
whether for the specific performance of any covenant or agreement contained in
this Agreement or the other Loan Documents, including as permitted by applicable
Law the obtaining of the ex parte appointment of a receiver, and, if such amount
shall have become due, by declaration or otherwise, proceed to enforce the
payment thereof or any other legal or equitable right of the Agent or such Bank.
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8.2.5 Application of Proceeds.
From and after the date on which the Agent has taken any
action pursuant to this Section 8.2 and until all Obligations of the Loan
Parties have been paid in full, any and all proceeds received by the Agent from
any sale or other disposition of the Collateral, or any part thereof, or the
exercise of any other remedy by the Agent, shall be applied as follows:
(i) first, to reimburse the Agent and the Banks for
out-of-pocket costs, expenses and disbursements, including reasonable attorneys'
and paralegals' fees and legal expenses, incurred by the Agent or the Banks in
connection with realizing on the Collateral or collection of any Obligations of
any of the Loan Parties under any of the Loan Documents, including advances made
by the Banks or any one of them or the Agent for the reasonable maintenance,
preservation, protection or enforcement of, or realization upon, the Collateral,
including advances for taxes, insurance, repairs and the like and reasonable
expenses incurred to sell or otherwise realize on, or prepare for sale or other
realization on, any of the Collateral;
(ii) second, to the repayment of all Indebtedness then due and
unpaid of the Loan Parties to the Banks incurred under this Agreement or any of
the other Loan Documents, whether of principal, interest, fees, expenses or
otherwise, in such manner as the Agent may determine in its discretion; and
(iii) the balance, if any, as required by Law.
8.2.6 Other Rights and Remedies.
In addition to all of the rights and remedies contained in
this Agreement or in any of the other Loan Documents, the Agent shall have all
of the rights and remedies of a secured party under the Uniform Commercial Code
or other applicable Law, all of which rights and remedies shall be cumulative
and nonexclusive, to the extent permitted by Law. The Agent may, and upon the
request of the Required Banks shall, exercise all post-default rights granted to
the Agent and the Banks under the Loan Documents or applicable Law.
8.3 Notice of Sale.
Any notice required to be given by the Agent of a sale, lease or
other disposition of the Collateral, or any other intended action by the Agent,
if given ten (10) days prior to such proposed action, shall constitute
commercially reasonable and fair notice thereof to the Borrowers.
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THE AGENT
9.1 Appointment.
Each Bank hereby irrevocably designates, appoints and authorizes PNC
Bank to act as Agent for such Bank under this Agreement and to execute and
deliver or accept on behalf of each of the Banks the other Loan Documents. Each
Bank hereby irrevocably authorizes, and each holder of any Note by the
acceptance of a Note shall be deemed irrevocably to authorize, the Agent to take
such action on its behalf under the provisions of this Agreement and the other
Loan Documents and any other instruments and agreements referred to herein, and
to exercise such powers and to perform such duties hereunder as are specifically
delegated to or required of the Agent by the terms hereof, together with such
powers as are reasonably incidental thereto. PNC Bank agrees to act as the Agent
on behalf of the Banks to the extent provided in this Agreement.
9.2 Delegation of Duties.
The Agent may perform any of its duties hereunder by or through
agents or employees (provided such delegation does not constitute a
relinquishment of its duties as Agent) and, subject to Sections 9.5
[Reimbursement and Indemnification of Agent by the Borrowers] and 9.6
[Exculpatory Provisions; Limitation of Liability], shall be entitled to engage
and pay for the advice or services of any attorneys, accountants or other
experts concerning all matters pertaining to its duties hereunder and to rely
upon any advice so obtained.
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9.3 Nature of Duties; Independent Credit Investigation.
The Agent shall have no duties or responsibilities except those
expressly set forth in this Agreement, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Agreement or otherwise exist. The duties of the Agent shall be mechanical and
administrative in nature; the Agent shall not have by reason of this Agreement a
fiduciary or trust relationship in respect of any Bank; and nothing in this
Agreement, expressed or implied, is intended to or shall be so construed as to
impose upon the Agent any obligations in respect of this Agreement except as
expressly set forth herein. Without limiting the generality of the foregoing,
the use of the term "agent" in this Agreement with reference to the Agent is not
intended to connote any fiduciary or other implied (or express) obligations
arising under agency doctrine of any applicable Law. Instead, such term is used
merely as a matter of market custom, and is intended to create or reflect only
an administrative relationship between independent contracting parties. Each
Bank expressly acknowledges (i) that the Agent has not made any representations
or warranties to it and that no act by the Agent hereafter taken, including any
review of the affairs of any of the Loan Parties, shall be deemed to constitute
any representation or warranty by the Agent to any Bank; (ii) that it has made
and will continue to make, without reliance upon the Agent, its own independent
investigation of the financial condition and affairs and its own appraisal of
the creditworthiness of each of the Loan Parties in connection with this
Agreement and the making and continuance of the Loans hereunder; and (iii)
except as expressly provided herein, that the Agent shall have no duty or
responsibility, either initially or on a continuing basis, to provide any Bank
with any credit or other information with respect thereto, whether coming into
its possession before the making of any Loan or at any time or times thereafter.
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9.4 Actions in Discretion of Agent; Instructions From the Banks.
The Agent agrees, upon the written request of the Required Banks, to
take or refrain from taking any action of the type specified as being within the
Agent's rights, powers or discretion herein, provided that the Agent shall not
be required to take any action which exposes the Agent to personal liability or
which is contrary to this Agreement or any other Loan Document or applicable
Law. In the absence of a request by the Required Banks, the Agent shall have
authority, in its sole discretion, to take or not to take any such action,
unless this Agreement specifically requires the consent of the Required Banks or
all of the Banks. Any action taken or failure to act pursuant to such
instructions or discretion shall be binding on the Banks, subject to Section 9.6
[Exculpatory Provisions, Etc.]. Subject to the provisions of Section 9.6, no
Bank shall have any right of action whatsoever against the Agent as a result of
the Agent acting or refraining from acting hereunder in accordance with the
instructions of the Required Banks or, in the absence of such instructions, in
the absolute discretion of the Agent.
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9.5 Reimbursement and Indemnification of Agent by the Borrowers.
The Borrowers, jointly and severally, unconditionally agree to pay
or reimburse the Agent and hold the Agent harmless against (a) liability for the
payment of all reasonable out-of-pocket costs, expenses and disbursements,
including fees and expenses of counsel (including the allocated costs of staff
counsel), appraisers and environmental consultants, incurred by the Agent (i) in
connection with the development, negotiation, preparation, printing, execution,
administration, syndication, interpretation and performance of this Agreement
and the other Loan Documents, (ii) relating to any requested amendments, waivers
or consents pursuant to the provisions hereof, (iii) in connection with the
enforcement of this Agreement or any other Loan Document or collection of
amounts due hereunder or thereunder or the proof and allowability of any claim
arising under this Agreement or any other Loan Document, whether in bankruptcy
or receivership proceedings or otherwise, and (iv) in any workout or
restructuring or in connection with the protection, preservation, exercise or
enforcement of any of the terms hereof or of any rights hereunder or under any
other Loan Document or in connection with any foreclosure, collection or
bankruptcy proceedings; and (b) all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind or nature whatsoever which may be imposed on, incurred by or asserted
against the Agent, in its capacity as such, in any way relating to or arising
out of this Agreement or any other Loan Documents or any action taken or omitted
by the Agent hereunder or thereunder, provided that the Borrowers shall not be
liable for any portion of such liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements if the
same results from the Agent's gross negligence or willful misconduct, or if the
Borrowers were not given notice of the subject claim and the opportunity to
participate in the defense thereof, at their expense (except that the Borrowers
shall remain liable to the extent such failure to give notice does not result in
a loss to the Borrowers), or if the same results from a compromise or settlement
agreement entered into without the consent of the Borrowers, which shall not be
unreasonably withheld. In addition, the Borrowers, jointly and severally, agree
to reimburse and pay all reasonable out-of-pocket expenses of the Agent's
regular employees and agents (the "Agent's Auditors") engaged periodically to
perform audits of the Loan Parties' books, records and business properties;
provided that so long as there does not exist an Event of Default, the Borrowers
shall not reimburse the Agent's Auditors under this sentence in excess of
$10,000 during any fiscal year of the Borrowers, but if an Event of Default
exists and is continuing there shall be no limit on the obligation of the
Borrowers to reimburse the
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Agent's Auditors pursuant to this sentence.
9.6 Exculpatory Provisions; Limitation of Liability.
Neither the Agent nor any of its directors, officers, employees,
agents, attorneys or Affiliates shall (a) be liable to any Bank for any action
taken or omitted to be taken by it or them hereunder, or in connection herewith,
including pursuant to any Loan Document, unless caused by its or their own gross
negligence or willful misconduct, (b) be responsible in any manner to any of the
Banks for the effectiveness, enforceability, genuineness, validity or the due
execution of this Agreement or any other Loan Documents or for any recital,
representation, warranty, document, certificate, report or statement herein or
made or furnished under or in connection with this Agreement or any other Loan
Documents, or (c) be under any obligation to any of the Banks to ascertain or to
inquire as to the performance or observance of any of the terms, covenants or
conditions hereof or thereof on the part of the Loan Parties, or the financial
condition of the Loan Parties, or the existence or possible existence of any
Event of Default or Potential Default.
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9.7 Reimbursement and Indemnification of Agent by Banks.
Each Bank agrees to reimburse and indemnify the Agent (to the extent
not reimbursed by the Borrowers and without limiting the Obligation of the
Borrowers to do so) in proportion to its Ratable Share from and against all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements, including attorneys' fees and disbursements
(including the allocated costs of staff counsel) and costs of appraisers and
environmental consultants, of any kind or nature whatsoever which may be imposed
on, incurred by or asserted against the Agent, in its capacity as such, in any
way relating to or arising out of this Agreement or any other Loan Documents or
any action taken or omitted by the Agent hereunder or thereunder, provided that
no Bank shall be liable for any portion of such liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements (a) if the same result from the Agent's gross negligence or
willful misconduct, or (b) if such Bank was not given notice of the subject
claim and the opportunity to participate in the defense thereof, at its expense
(except that such Bank shall remain liable to the extent such failure to give
notice does not result in a loss to the Bank), or (c) if the same result from a
compromise and settlement agreement entered into without the consent of such
Bank, which shall not be unreasonably withheld. In addition, each Bank agrees
promptly upon demand to reimburse the Agent (to the extent not reimbursed by the
Borrowers and without limiting the Obligation of the Borrowers to do so) in
proportion to its Ratable Share for all amounts due and payable by the Borrowers
to the Agent in connection with the Agent's periodic audit of the Loan Parties'
books, records and business properties.
Reliance by Agent.
The Agent shall be entitled to rely upon any writing, telegram,
telex or teletype message, resolution, notice, consent, certificate, letter,
cablegram, statement, order or other document or conversation by telephone or
otherwise believed by it to be genuine and correct and to have been signed, sent
or made by the proper Person or Persons, and upon the advice and opinions of
counsel and other professional advisers selected by the Agent. The Agent shall
be fully justified in failing or refusing to take any action hereunder unless it
shall first be indemnified to its satisfaction by the Banks against any and all
liability and expense which may be incurred by it by reason of taking or
continuing to take any such action.
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9.9 Notice of Default.
The Agent shall not be deemed to have knowledge or notice of the
occurrence of any Potential Default or Event of Default unless the Agent has
received written notice from a Bank or a Borrower referring to this Agreement,
describing such Potential Default or Event of Default and stating that such
notice is a "notice of default."
9.10 Notices.
The Agent shall promptly send to each Bank a copy of all notices
received from any Borrower pursuant to the provisions of this Agreement or the
other Loan Documents promptly upon receipt thereof. The Agent shall promptly
notify the Borrowers and the other Banks of each change in the Base Rate and the
effective date thereof.
9.11 Banks in Their Individual Capacities.
With respect to its Revolving Credit Commitment and the Revolving
Credit Loans made by it and any other rights and powers given to it as a Bank
hereunder or under any of the other Loan Documents, the Agent shall have the
same rights and powers hereunder as any other Bank and may exercise the same as
though it were not the Agent, and the term "Banks" shall, unless the context
otherwise indicates, include the Agent in its individual capacity. PNC Bank and
its Affiliates and each of the Banks and their respective Affiliates may,
without liability to account, except as prohibited herein, make loans to, accept
deposits from, discount drafts for, act as trustee under indentures of and
generally engage in any kind of banking or trust business with the Loan Parties
and their Affiliates, in the case of the Agent, as though it were not acting as
Agent hereunder and, in the case of each Bank, as though such Bank were not a
Bank hereunder. The Banks acknowledge that, pursuant to such activities, the
Agent or its Affiliates may (i) receive information regarding the Loan Parties
(including information that may be subject to confidentiality obligations in
favor of the Loan Parties) and acknowledge that the Agent shall be under no
obligation to provide such information to them, and (ii) accept fees and other
consideration from the Loan Parties for services in connection with this
Agreement and otherwise without having to account for the same to the Banks.
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Holders of Notes.
The Agent may deem and treat any payee of any Note as the owner
thereof for all purposes hereof unless and until written notice of the
assignment or transfer thereof shall have been filed with the Agent. Any
request, authority or consent of any Person who at the time of making such
request or giving such authority or consent is the holder of any Note shall be
conclusive and binding on any subsequent holder, transferee or assignee of such
Note or of any Note or Notes issued in exchange therefor.
9.13 Equalization of Banks.
The Banks and the holders of any participations in any Notes agree
among themselves that, with respect to all amounts received by any Bank or any
such holder for application on any Obligation hereunder or under any Note or
under any such participation, whether received by voluntary payment, by
realization upon security, by the exercise of the right of set-off or banker's
lien, by counterclaim or by any other non-pro rata source, equitable adjustment
will be made in the manner stated in the following sentence so that, in effect,
all such excess amounts will be shared ratably among the Banks and such holders
in proportion to their interests in payments under the Notes, except as
otherwise provided in Section 3.4.3 [Agent's and Bank's Rights], 4.4.2
[Replacement of a Bank] or 4.6 [Additional Compensation in Certain
Circumstances]. The Banks or any such holder receiving any such amount shall
purchase for cash from each of the other Banks an interest in such Bank's Loans
in such amount as shall result in a ratable participation by the Banks and each
such holder in the aggregate unpaid amount under the Notes, provided that if all
or any portion of such excess amount is thereafter recovered from the Bank or
the holder making such purchase, such purchase shall be rescinded and the
purchase price restored to the extent of such recovery, together with interest
or other amounts, if any, required by law (including court order) to be paid by
the Bank or the holder making such purchase.
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9.14 Successor Agent.
The Agent (i) may resign as Agent or (ii) shall resign if such
resignation is requested by the Required Banks (if the Agent is a Bank, the
Agent's Loans and its Revolving Credit Commitment shall be considered in
determining whether the Required Banks have requested such resignation) or
required by Section 4.4.2 [Replacement of a Bank], in either case of (i) or (ii)
by giving not less than thirty (30) days' prior written notice to the Borrowers.
If the Agent shall resign under this Agreement, then either (a) the Required
Banks shall appoint from among the Banks a successor agent for the Banks,
subject to the consent of the Borrowers, such consent not to be unreasonably
withheld, or (b) if a successor agent shall not be so appointed and approved
within the thirty (30) day period following the Agent's notice to the Banks of
its resignation, then the Agent shall appoint, with the consent of the
Borrowers, such consent not to be unreasonably withheld, a successor agent who
shall serve as Agent until such time as the Required Banks appoint and the
Borrowers consent to the appointment of a successor agent. Upon its appointment
pursuant to either clause (a) or (b) above, such successor agent shall succeed
to the rights, powers and duties of the Agent, and the term "Agent" shall mean
such successor agent, effective upon its appointment, and the former Agent's
rights, powers and duties as Agent shall be terminated without any other or
further act or deed on the part of such former Agent or any of the parties to
this Agreement. After the resignation of any Agent hereunder, the provisions of
this Article 9 shall inure to the benefit of such former Agent, and such former
Agent shall not by reason of such resignation be deemed to be released from
liability for any actions taken or not taken by it while it was an Agent under
this Agreement.
9.15 Agent's Fee.
The Borrowers, jointly and severally, shall pay to the Agent a
nonrefundable fee (the "Agent's Fee") under the terms of a letter (the "Agent's
Letter") between the Borrowers and Agent, as amended from time to time.
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9.16 Availability of Funds.
The Agent may assume that each Bank has made or will make the
proceeds of a Loan available to the Agent unless the Agent shall have been
notified by such Bank on or before the later of (1) the close of Business on the
Business Day preceding the Borrowing Date with respect to such Loan or (2) two
hours before the time the Agent actually funds the proceeds of such Loan to a
Borrower (whether using its own funds pursuant to this Section 9.16 or using
proceeds deposited with the Agent by the Banks and whether such funding occurs
before or after the time the Banks are required to deposit the proceeds of such
Loan with the Agent). The Agent may, in reliance upon such assumption (but shall
not be required to), make available to such Borrower a corresponding amount. If
such corresponding amount is not in fact made available to the Agent by such
Bank, the Agent shall be entitled to recover such amount on demand from such
Bank (or, if such Bank fails to pay such amount forthwith, upon such demand from
a Borrower), together with interest thereon, in respect of each day during the
period commencing on the date such amount was made available to such Borrower
and ending on the date the Agent recovers such amount, at a rate per annum equal
to (i) the Federal Funds Effective Rate during the first three (3) days after
such interest shall begin to accrue and (ii) the applicable interest rate in
respect of such Loan after the end of such three-day period.
9.17 Calculations.
In the absence of gross negligence or willful misconduct, the Agent
shall not be liable for any error in computing the amount payable to any Bank,
whether in respect of the Loans, fees or any other amounts due to the Banks
under this Agreement. In the event an error in computing any amount payable to
any Bank is made, the Agent, the Borrowers and each affected Bank shall,
forthwith upon discovery of such error, make such adjustments as shall be
required to correct such error, and any compensation therefor will be calculated
at the Federal Funds Effective Rate.
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9.18 Beneficiaries.
Except as expressly provided herein, the provisions of this Article
9 are solely for the benefit of the Agent and the Banks, and the Loan Parties
shall not have any rights to rely on or enforce any of the provisions hereof. In
performing its functions and duties under this Agreement, the Agent shall act
solely as agent of the Banks and does not assume and shall not be deemed to have
assumed any obligation toward, or relationship of agency or trust with or for,
any of the Loan Parties. This Section 9.18 is not intended to modify any limit
contained in Section 9.8 on the right of the Agent to be indemnified by the
Borrowers.
10. MISCELLANEOUS
10.1 Modifications, Amendments or Waivers.
With the written consent of the Required Banks, the Agent, acting on
behalf of all the Banks, and the Borrowers, on behalf of the Loan Parties, may
from time to time enter into written agreements amending or changing any
provision of this Agreement or any other Loan Document or the rights of the
Banks or the Loan Parties hereunder or thereunder, or may grant written waivers
or consents to a departure from the due performance of the Obligations of the
Loan Parties hereunder or thereunder. Any such agreement, waiver or consent made
with such written consent shall be effective to bind all the Banks and the Loan
Parties, provided, that, without the written consent of all the Banks, no such
agreement, waiver or consent may be made which will:
10.1.1 Increase of Commitment; Extension or Expiration
Date.
Increase the amount of the Revolving Credit Commitment of any
Bank hereunder or extend the Expiration Date;
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10.1.2 Extension of Payment; Reduction of Principal
Interest or Fees; Modification of Terms of Payment.
Whether or not any Loans are outstanding, extend the time for
payment of principal or interest of any Loan (excluding the due date of any
mandatory prepayment of a Loan or any mandatory Revolving Credit Commitment
reduction in connection with such a mandatory prepayment hereunder, except for
mandatory reductions of the Revolving Credit Commitments on the Expiration
Date), the Revolving Credit Commitment Fee or any other fee payable to any Bank,
or reduce the principal amount of or the rate of interest borne by any Loan or
reduce the Revolving Credit Commitment Fee or any other fee payable to any Bank,
or otherwise affect the terms of payment of the principal of or interest on any
Loan, the Revolving Credit Commitment Fee or any other fee payable to any Bank;
10.1.3 Release of Collateral or Guarantor.
Except for sales of assets permitted by Section 7.2.7
[Dispositions of Assets or Subsidiaries], release any Collateral consisting of
capital stock or other ownership interests of any Loan Party or its Subsidiaries
or substantially all of the assets of any Loan Party, any Guarantor from its
Obligations under the Guaranty Agreement or any other security for any of the
Loan Parties' Obligations; or
10.1.4 Miscellaneous
Amend Section 4.2 [Pro Rata Treatment of Banks], 9.6
[Exculpatory Provisions, Etc.] or 9.13 [Equalization of Banks] or this Section
10.1, alter any provision regarding the pro rata treatment of the Banks, change
the definition of Required Banks or change any requirement providing for the
Banks or the Required Banks to authorize the taking of any action hereunder;
provided, further, that no agreement, waiver or consent which would modify the
interests, rights or obligations of the Agent in its capacity as Agent or as the
issuer of Letters of Credit shall be effective without the written consent of
the Agent.
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10.2 No Implied Waivers; Cumulative Remedies; Writing Required.
No course of dealing and no delay or failure of the Agent or any
Bank in exercising any right, power, remedy or privilege under this Agreement or
any other Loan Document shall affect any other or future exercise thereof or
operate as a waiver thereof, nor shall any single or partial exercise thereof or
any abandonment or discontinuance of steps to enforce such a right, power,
remedy or privilege preclude any further exercise thereof or of any other right,
power, remedy or privilege. The rights and remedies of the Agent and the Banks
under this Agreement and any other Loan Documents are cumulative and not
exclusive of any rights or remedies which they would otherwise have. Any waiver,
permit, consent or approval of any kind or character on the part of any Bank of
any breach or default under this Agreement or any such waiver of any provision
or condition of this Agreement must be in writing and shall be effective only to
the extent specifically set forth in such writing.
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10.3 Reimbursement and Indemnification of Banks by the Borrowers;
Taxes.
The Borrowers, jointly and severally, agree unconditionally upon
demand to pay or reimburse each Bank (other than the Agent, as to which the
Borrowers' Obligations are set forth in Section 9.5 [Reimbursement and
Indemnification of Agent by the Borrowers]) for and to save such Bank harmless
against (i) liability for the payment of all reasonable out-of-pocket costs,
expenses and disbursements (including fees and expenses of counsel (including
allocated costs of staff counsel) for each Bank except with respect to (a) and
(b) below) incurred by such Bank (a) in connection with the administration and
interpretation of this Agreement, and other instruments and documents to be
delivered hereunder, (b) relating to any amendments, waivers or consents
pursuant to the provisions hereof, (c) in connection with the enforcement of
this Agreement or any other Loan Document or collection of amounts due hereunder
or thereunder or the proof and allowability of any claim arising under this
Agreement or any other Loan Document, whether in bankruptcy or receivership
proceedings or otherwise, and (d) in any workout or restructuring or in
connection with the protection, preservation, exercise or enforcement of any of
the terms hereof or of any rights hereunder or under any other Loan Document or
in connection with any foreclosure, collection or bankruptcy proceedings, and
(ii) all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind or nature
whatsoever which may be imposed on, incurred by or asserted against such Bank,
in its capacity as such, in any way relating to or arising out of this Agreement
or any other Loan Documents or any action taken or omitted by such Bank
hereunder or thereunder, provided that the Borrowers shall not be liable for any
portion of such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements (A) if the same result from
such Bank's gross negligence or willful misconduct, or (B) if the Borrowers were
not given notice of the subject claim and the opportunity to participate in the
defense thereof, at their expense (except that the Borrowers shall remain liable
to the extent such failure to give notice does not result in a loss to the
Borrowers), or (C) if the same result from a compromise or settlement agreement
entered into without the consent of the Borrowers, which shall not be
unreasonably withheld. The Banks will attempt to minimize the fees and expenses
of legal counsel for the Banks which are subject to reimbursement by the
Borrowers hereunder by considering the usage of one law firm to represent the
Banks and the Agent if appropriate under the circumstances. Each Borrower agrees
unconditionally to pay all stamp, document, transfer, recording or filing taxes
or fees and similar impositions now or hereafter determined by the Agent or
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any Bank to be payable in connection with this Agreement or any other Loan
Document, and the Borrowers, jointly and severally, agree unconditionally to
save the Agent and the Banks harmless from and against any and all present or
future claims, liabilities or losses with respect to or resulting from any
omission to pay or delay in paying any such taxes, fees or impositions.
10.4 Holidays.
Whenever payment of a Loan to be made or taken hereunder shall be
due on a day which is not a Business Day, such payment shall be due on the next
Business Day, and such extension of time shall be included in computing interest
and fees, except that the Loans shall be due on the Business Day preceding the
Expiration Date if the Expiration Date is not a Business Day. Whenever any
payment or action to be made or taken hereunder (other than payment of the
Loans) shall be stated to be due on a day which is not a Business Day, such
payment or action shall be made or taken on the next following Business Day
(except as provided in Section 3.2 [Interest Periods] with respect to Interest
Periods under the Euro-Rate Option), and such extension of time shall not be
included in computing interest or fees, if any, in connection with such payment
or action.
10.5 Funding by Branch, Subsidiary or Affiliate.
10.5.1 Notional Funding.
Each Bank shall have the right from time to time, without
notice to the Borrowers, to deem any branch, Subsidiary or Affiliate (which for
the purposes of this Section 10.5 shall mean any corporation or association
which is directly or indirectly controlled by or is under direct or indirect
common control with any corporation or association which directly or indirectly
controls such Bank) of such Bank to have made, maintained or funded any Loan to
which the Euro-Rate Option applies at any time, provided that immediately
following (on the assumption that a payment were then due from a Borrower to
such other office) and as a result of such change, such Borrower would not be
under any greater financial obligation pursuant to Section 4.6 [Additional
Compensation in Certain Circumstances] than it would have been in the absence of
such change. Notional funding offices may be selected by each Bank without
regard to such Bank's actual methods of making, maintaining or funding the Loans
or any sources of funding actually used by or available to such Bank.
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Actual Funding.
Each Bank shall have the right from time to time to make or
maintain any Loan by arranging for a branch, Subsidiary or Affiliate of such
Bank to make or maintain such Loan subject to the last sentence of this Section
10.5.2. If any Bank causes a branch, Subsidiary or Affiliate to make or maintain
any part of the Loans hereunder, all terms and conditions of this Agreement
shall, except where the context clearly requires otherwise, be applicable to
such part of the Loans to the same extent as if such Loans were made or
maintained by such Bank, but in no event shall any Bank's use of such a branch,
Subsidiary or Affiliate to make or maintain any part of the Loans hereunder
cause such Bank or such branch, Subsidiary or Affiliate to incur any costs or
expenses payable by any Borrower hereunder or require any Borrower to pay any
other compensation to any Bank (including any expenses incurred or payable
pursuant to Section 4.6 [Additional Compensation in Certain Circumstances])
which would otherwise not be incurred.
10.6 Notices.
All notices, requests, demands, directions and other communications
(as used in this Section 10.6, collectively referred to as "notices") given to
or made upon any party hereto under the provisions of this Agreement shall be by
telephone or in writing (including telex or facsimile communication) unless
otherwise expressly permitted hereunder and shall be delivered or sent by telex
or facsimile to the respective parties at the addresses and numbers set forth
under their respective names on Schedule 1.1(B) hereof or in accordance with any
subsequent unrevoked written direction from any party to the others. All notices
shall, except as otherwise expressly herein provided, be effective (a) in the
case of telex or facsimile, when received, (b) in the case of a hand-delivered
notice, when hand-delivered, (c) in the case of telephone, when telephoned,
provided, however, that in order to be effective, telephonic notices must be
confirmed in writing no later than the next day by letter, facsimile or telex,
(d) if given by mail, four (4) days after such communication is deposited in the
mail with first-class postage prepaid, return receipt requested, and (e) if
given by any other means (including by air courier), when delivered; provided,
that notices to the Agent shall not be effective until received. Any Bank giving
any notice to any Loan Party shall simultaneously send a copy thereof to the
Agent, and the Agent shall promptly notify the other Banks of the receipt by it
of any such notice.
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10.7 Severability.
The provisions of this Agreement are intended to be severable. If
any provision of this Agreement shall be held invalid or unenforceable in whole
or in part in any jurisdiction, such provision shall, as to such jurisdiction,
be ineffective to the extent of such invalidity or unenforceability without in
any manner affecting the validity or enforceability thereof in any other
jurisdiction or the remaining provisions hereof in any jurisdiction.
10.8 Governing Law.
Each Letter of Credit and Section 2.9 [Letter of Credit Subfacility]
shall be subject to the Uniform Customs and Practice for Documentary Credits
(1993 Revision), International Chamber of Commerce Publication No. 500, as the
same may be revised or amended from time to time, and, to the extent not
inconsistent therewith, the internal Law of the Commonwealth of Pennsylvania
without regard to its conflict of laws principles, and the balance of this
Agreement shall be deemed to be a contract under the Law of the Commonwealth of
Pennsylvania and for all purposes shall be governed by and construed and
enforced in accordance with the internal Law of the Commonwealth of Pennsylvania
without regard to its conflict of laws principles.
10.9 Prior Understanding.
This Agreement and the other Loan Documents supersede all prior
understandings and agreements, whether written or oral, between the parties
hereto and thereto relating to the transactions provided for herein and therein,
including any prior confidentiality agreements and commitments.
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10.10 Duration; Survival.
All representations and warranties of the Loan Parties contained
herein or made in connection herewith shall survive the making of Loans and
issuance of Letters of Credit and shall not be waived by the execution and
delivery of this Agreement, any investigation by the Agent or the Banks, the
making of Loans, issuance of Letters of Credit or payment in full of the Loans.
All covenants and agreements of the Loan Parties contained in Sections 7.1
[Affirmative Covenants], 7.2 [Negative Covenants] and 7.3 [Reporting
Requirements] herein shall continue in full force and effect from and after the
date hereof so long as the Borrowers may borrow or request Letters of Credit
hereunder and until termination of the Revolving Credit Commitments and payment
in full of the Loans and expiration or termination of all Letters of Credit. All
covenants and agreements of the Borrowers contained herein relating to the
payment of principal, interest, premiums, additional compensation or expenses
and indemnification, including those set forth in the Notes, Article 4
[Payments] and Sections 9.5 [Reimbursement and Indemnification of Agent by the
Borrowers], 9.7 [Reimbursement and Indemnification of Agent by the Banks] and
10.3 [Reimbursement and Indemnification of Banks by the Borrowers; Taxes], shall
survive payment in full of the Loans, expiration or termination of the Letters
of Credit and termination of the Revolving Credit Commitments.
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10.11 Successors and Assigns.
(i) This Agreement shall be binding upon and shall inure to
the benefit of the Banks, the Agent, the Loan Parties and their respective
successors and assigns, except that none of the Loan Parties may assign or
transfer any of its rights and Obligations hereunder or any interest herein.
Each Bank may, at its own cost, make assignments of or sell participations in
all or any part of its Revolving Credit Commitments and the Loans made by it to
one or more banks or other entities, subject to the consent of the Borrowers and
the Agent with respect to any assignee, such consent not to be unreasonably
withheld, provided that (1) no consent of the Borrowers shall be required in the
case of an assignment by a Bank to an Affiliate of such Bank, and (2) any
assignment by a Bank to a Person other than an Affiliate of such Bank may not be
made in amounts less than the lesser of $5,000,000 or the amount of the
assigning Bank's Revolving Credit Commitment. In the case of an assignment, upon
receipt by the Agent of the Assignment and Assumption Agreement, the assignee
shall have, to the extent of such assignment (unless otherwise provided
therein), the same rights, benefits and obligations as it would have if it had
been a signatory Bank hereunder, the Revolving Credit Commitments shall be
adjusted accordingly, and upon surrender of any Note subject to such assignment,
each Borrower shall execute and deliver a new Note to the assignee in an amount
equal to the amount of the Revolving Credit Commitment assumed by it and a new
Revolving Credit Note to the assigning Bank in an amount equal to the Revolving
Credit Commitment retained by it hereunder. Any Bank which assigns any or all of
its Revolving Credit Commitment or Loans to a Person other than an Affiliate of
such Bank shall pay to the Agent a service fee in the amount of $3,500 for each
assignment. In the case of a participation, the participant shall have only the
rights specified in Section 8.2.3 [Set-off] (the participant's rights against
such Bank in respect of such participation to be those set forth in the
agreement executed by such Bank in favor of the participant relating thereto and
not to include any voting rights except with respect to changes of the type
referenced in Section 10.1.1 [Increase of Commitment, Etc.], 10.1.2 [Extension
of Payment, Etc.] or 10.1.3 [Release of Collateral or Guarantor], all of such
Bank's obligations under this Agreement or any other Loan Document shall remain
unchanged, and all amounts payable by any Loan Party hereunder or thereunder
shall be determined as if such Bank had not sold such participation.
(ii) Any assignee or participant which is not incorporated
under the Laws of the United States of America or a state thereof shall deliver
to the Borrowers and the Agent the form of certificate described in Section
10.17 [Tax Withholding Clause] relating to federal income tax withholding. Each
Bank
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may furnish any publicly available information concerning any Loan Party or
its Subsidiaries and any other information concerning any Loan Party or its
Subsidiaries in the possession of such Bank from time to time to assignees and
participants (including prospective assignees or participants), provided that
such assignees and participants agree to be bound by the provisions of Section
10.12 [Confidentiality].
(iii) Notwithstanding any other provision in this Agreement,
any Bank may at any time pledge or grant a security interest in all or any
portion of its rights under this Agreement, its Note and the other Loan
Documents to any Federal Reserve Bank in accordance with Regulation A of the FRB
or U.S. Treasury Regulation 31 CFR Section 203.14 without notice to or consent
of the Borrowers or the Agent. No such pledge or grant of a security interest
shall release the transferor Bank of its obligations hereunder or under any
other Loan Document.
10.12 Confidentiality.
10.12.1 General.
The Agent and the Banks each agree to keep confidential all
information obtained from any Loan Party or its Subsidiaries which is nonpublic
and confidential or proprietary in nature (including any information a Borrower
specifically designates as confidential), except as provided below, and to use
such information only in connection with their respective capacities under this
Agreement and for the purposes contemplated hereby. The Agent and the Banks
shall be permitted to disclose such information (i) to outside legal counsel,
accountants and other professional advisors who need to know such information in
connection with the administration and enforcement of this Agreement, subject to
agreement of such Persons to maintain the confidentiality, (ii) to assignees and
participants as contemplated by Section 10.11, (iii) to the extent requested by
any bank regulatory authority or, with three (3) days prior notice (provided
that such notice and the delay resulting thereby is permitted by the applicable
Law, subpoena, legal process, investigation or proceeding) to the Borrowers, as
otherwise required by applicable Law or by any subpoena or similar legal
process, or in connection with any investigation or proceeding arising out of
the transactions contemplated by this Agreement, (iv) if it becomes publicly
available other than as a result of a breach of this Agreement or becomes
available from a source not known to be subject to confidentiality restrictions,
or (v) if a Borrower shall have consented to such disclosure.
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10.12.2 Sharing Information With Affiliates of the Banks.
Each Loan Party acknowledges that from time to time financial
advisory, investment banking and other services may be offered or provided to a
Borrower or one or more of its Affiliates (in connection with this Agreement or
otherwise) by any Bank or by one or more Subsidiaries or Affiliates of such
Bank, and each of the Loan Parties hereby authorizes each Bank to share any
information delivered to such Bank by such Loan Party and its Subsidiaries
pursuant to this Agreement, or in connection with the decision of such Bank to
enter into this Agreement, any such Subsidiary or Affiliate of such Bank, it
being understood that any such Subsidiary or Affiliate of any Bank receiving
such information shall be bound by the provisions of Section 10.12.1 as if it
were a Bank hereunder. Such authorization shall survive the repayment of the
Loans and other Obligations and the termination of the Revolving Credit
Commitments.
10.13 Counterparts.
This Agreement may be executed by different parties hereto on any
number of separate counterparts, each of which, when so executed and delivered,
shall be an original, and all such counterparts shall together constitute one
and the same instrument.
10.14 Agent's or Bank's Consent.
Whenever the Agent's or any Bank's consent is required to be
obtained under this Agreement or any of the other Loan Documents as a condition
to any action, inaction, condition or event, the Agent and each Bank shall be
authorized to give or withhold such consent in its sole and absolute discretion
and to condition its consent upon the giving of additional collateral, the
payment of money or any other matter.
10.15 Exceptions.
The representations, warranties and covenants contained herein shall
be independent of each other, and no exception to any representation, warranty
or covenant shall be deemed to be an exception to any other representation,
warranty or covenant contained herein unless expressly provided, nor shall any
such exceptions be deemed to permit any action or omission that would be in
contravention of applicable Law.
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CONSENT TO FORUM; WAIVER OF JURY TRIAL.
EACH LOAN PARTY HEREBY IRREVOCABLY CONSENTS TO THE NONEXCLUSIVE
JURISDICTION OF THE COURT OF COMMON PLEAS OF ALLEGHENY COUNTY AND THE UNITED
STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF PENNSYLVANIA, AND WAIVES
PERSONAL SERVICE OF ANY AND ALL PROCESS UPON IT AND CONSENTS THAT ALL SUCH
SERVICE OF PROCESS BE MADE BY CERTIFIED OR REGISTERED MAIL DIRECTED TO SUCH LOAN
PARTY AT THE ADDRESSES PROVIDED FOR IN SECTION 10.6 AND SERVICE SO MADE SHALL BE
DEEMED TO BE COMPLETED UPON ACTUAL RECEIPT THEREOF. EACH LOAN PARTY WAIVES ANY
OBJECTION TO JURISDICTION AND VENUE OF ANY ACTION INSTITUTED AGAINST IT AS
PROVIDED HEREIN AND AGREES NOT TO ASSERT ANY DEFENSE BASED ON LACK OF
JURISDICTION OR VENUE. EACH LOAN PARTY, THE AGENT AND THE BANKS HEREBY WAIVE
TRIAL BY JURY IN ANY ACTION, SUIT, PROCEEDING OR COUNTERCLAIM OF ANY KIND
ARISING OUT OF OR RELATED TO THIS AGREEMENT, ANY OTHER LOAN DOCUMENT OR THE
COLLATERAL TO THE FULL EXTENT PERMITTED BY LAW.
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10.17 Tax Withholding Clause.
Each Bank or assignee or participant of a Bank that is not
incorporated under the Laws of the United States of America or a state thereof
agrees that it will deliver to each of the Borrower and the Agent two (2) duly
completed copies of the following: (i) Internal Revenue Service Form W-9, 4224
or 1001, or other applicable form prescribed by the Internal Revenue Service,
certifying that such Bank, assignee or participant is entitled to receive
payments under this Agreement and the other Loan Documents without deduction or
withholding of any United States federal income taxes, or is subject to such tax
at a reduced rate under an applicable tax treaty, or (ii) Internal Revenue
Service Form W-8 or other applicable form or a certificate of such Bank,
assignee or participant indicating that no such exemption or reduced rate is
allowable with respect to such payments. Each Bank, assignee or participant
required to deliver to the Borrowers and the Agent a form or certificate
pursuant to the preceding sentence shall deliver such form or certificate as
follows: (A) each Bank which is a party hereto on the Closing Date shall deliver
such form or certificate at least five (5) Business Days prior to the first date
on which any interest or fees are payable by the Borrower hereunder for the
account of such Bank; and (B) each assignee or participant shall deliver such
form or certificate at least five (5) Business Days before the effective date of
such assignment or participation (unless the Agent in its sole discretion shall
permit such assignee or participant to deliver such form or certificate less
than five (5) Business Days before such date, in which case it shall be due on
the date specified by the Agent). Each Bank, assignee or participant which so
delivers a Form W-8, W-9, 4224 or 1001 further undertakes to deliver to each of
the Borrowers and the Agent two (2) additional copies of such form (or a
successor form) on or before the date that such form expires or becomes obsolete
or after the occurrence of any event requiring a change in the most recent form
so delivered by it, and such amendments thereto or extensions or renewals
thereof as may be reasonably requested by a Borrower or the Agent, either
certifying that such Bank, assignee or participant is entitled to receive
payments under this Agreement and the other Loan Documents without deduction or
withholding of any United States federal income taxes or is subject to such tax
at a reduced rate under an applicable tax treaty or stating that no such
exemption or reduced rate is allowable. The Agent shall be entitled to withhold
United States federal income taxes at the full withholding rate unless the Bank,
assignee or participant establishes an exemption or that it is subject to a
reduced rate as established pursuant to the above provisions.
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10.18 Joinder of Guarantors.
Any Subsidiary of any of the Borrowers which is required to join
this Agreement as a Guarantor pursuant to Section 7.2.9 [Subsidiaries,
Partnerships and Joint Ventures] shall execute and deliver to the Agent (i) a
Guaranty Agreement (for entities which are not Borrowers) or a Guarantor Joinder
to such Guaranty Agreement in substantially the form attached hereto as Exhibit
(G)(1) or (2) pursuant to which it shall join as a Guarantor each of the
documents to which the Guarantors are parties; (ii) documents in the forms
described in Section [First Loans] modified as appropriate to relate to such
Subsidiary including an opinion of counsel for such Subsidiary satisfactory to
the Agent addressing the matters described in Exhibit 6.1.4 as such matters
relate to such Subsidiary, the documents which it is executing and delivering
and the Liens which it is granting; and (iii) documents necessary to grant and
perfect Prior Security Interests to the Agent for the benefit of the Banks in
all Collateral held by such Subsidiary including executed financing statements
and a Security Agreement (for entities which are not Borrowers) in the
substantially the form of Exhibit 1.1(S)(1). The Loan Parties shall deliver such
Guarantor Joinder and related documents to the Agent: (i) within five (5)
Business Days after the date of the filing of such Subsidiary's articles of
incorporation if the Subsidiary is a corporation, the date of the filing of its
certificate of limited partnership if it is a limited partnership or the date of
its organization if it is an entity other than a limited partnership or
corporation and (ii) on or before the date of the Permitted Acquisition if it is
organized or acquired in connection with a Permitted Acquisition.
[SIGNATURE PAGES FOLLOW]
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[SIGNATURE PAGE _ OF _ OF CREDIT AGREEMENT]
IN WITNESS WHEREOF, the parties hereto, by their officers thereunto duly
authorized, have executed this Agreement as of the day and year first above
written.
BORROWERS:
ATTEST: UNITED REFINING COMPANY
_____________________________ By:_____________________________________
Title:__________________________________
[Seal]
Address for Notices:
15 Bradley Street
Warren, Pennsylvania 16365
Telecopier No. (814) 723-4371
Attention: Myron L. Turfitt, President
Telephone No. (___) ____-_______
ATTEST: UNITED REFINING COMPANY OF
PENNSYLVANIA
_____________________________ By:_____________________________________
Title:__________________________________
[Seal]
Address for Notices:
15 Bradley Street
Warren, Pennsylvania 16365
Telecopier No. (814) 723-4371
Attention: Myron L. Turfitt, President
Telephone No. (___) ____-_______
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ATTEST: KIANTONE PIPELINE CORPORATION
_____________________________ By:_____________________________________
Title:__________________________________
[Seal]
Address for Notices:
15 Bradley Street
Warren, Pennsylvania 16365
Telecopier No. (814) 723-4371
Attention: Myron L. Turfitt
President
Telephone No. (___) ____-_______
GUARANTORS:
ATTEST: UNITED REFINING COMPANY
_____________________________ By:_____________________________________
Title:__________________________________
[Seal]
ATTEST: UNITED REFINING COMPANY OF
PENNSYLVANIA
_____________________________ By:_____________________________________
Title:__________________________________
[Seal]
ATTEST: KIANTONE PIPELINE CORPORATION
_____________________________ By:_____________________________________
Title:__________________________________
[Seal]
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PNC BANK, NATIONAL ASSOCIATION,
individually and as Agent
By:_____________________________________
Title:__________________________________
[OTHER BANKS]
By:_____________________________________
Title:__________________________________
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SCHEDULE 1.1(B)
COMMITMENTS OF BANKS AND ADDRESSES FOR NOTICES
Page 1 of 2
PART 1 - COMMITMENTS OF BANKS AND ADDRESSES FOR NOTICES TO BANKS
AMOUNT OF
COMMITMENT
FOR REVOLVING
BANK CREDIT LOANS RATABLE SHARE
---- ------------ -------------
Name: PNC Bank, National Association
Address:
One PNC Plaza, 3rd Floor
249 Fifth Avenue
Pittsburgh, PA 15222-2707 $35,000,000 100.00%
Attention: Robert D. Erwin
Telephone: 412-762-3837
Telecopy: 412-762-2571
137
SCHEDULE 1.1(B)
COMMITMENTS OF BANKS AND ADDRESSES FOR NOTICES
Page 2 of 2
PART 2 - ADDRESSES FOR NOTICES TO BORROWERS AND GUARANTORS:
AGENT
Address:
PNC Bank, National Association
One PNC Plaza, 3rd Floor
249 Fifth Avenue
Pittsburgh, PA 15222-2707
Attention: Robert D. Erwin
Telephone: 412-762-3837
Telecopy: 412-762-2571
BORROWERS AND GUARANTORS:
Address:
c/o United Refining Company
15 Bradley Street
Warren, PA 16365
Attention: Myron L. Turfitt
Telephone: 814-723-1500
Telecopy: 814-723-4371
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SCHEDULE 1.1(Q)(i)
QUALIFIED ACCOUNTS
Upon delivery to the Agent of each Schedule of Accounts, the Agent
shall make a determination, in its sole discretion, as to which Accounts listed
thereon shall be deemed Qualified Accounts. An Account shall not be considered a
Qualified Account unless the Agent determines, in its sole discretion, that such
Account has met the following minimum requirements:
(i) the Account represents a complete bona fide transaction
for goods sold and delivered or services rendered (but excluding any amounts in
the nature of a service charge added to the amount due on an invoice because the
invoice has not been paid when due) which requires no further act under any
circumstances on the part of any Borrower to make such Account payable by the
Account Debtor; the Account arises from an arm's length transaction in the
ordinary course of the Borrowers' business between a Borrower and an Account
Debtor which is not an Affiliate of a Borrower or an officer, stockholder or
employee of a Borrower or of any Affiliate of a Borrower, or a member of the
family of an officer, stockholder or employee of a Borrower or of any Affiliate
of a Borrower;
(ii) the Account shall not (a) if payable on a "net 10 basis"
be or have been unpaid more than thirty (30) days from the invoice date; (b) if
payable on a "net 30 basis" or basis other than described in the preceding
clause (a) be or have been unpaid more than ninety (90) days from the invoice
date, (c) be delinquent more than sixty (60) days, or (d) be payable by an
Account Debtor (1) more than 50% of whose Accounts have remained unpaid for more
than ninety (90) days from the invoice date or are delinquent more than sixty
(60) days, or (2) whose Accounts constitute, in the Agent's determination, an
unduly high percentage of the aggregate amount of all outstanding Accounts;
(iii) the goods the sale of which gave rise to the Account
were shipped or delivered or provided to the Account Debtor on an absolute sale
basis and not on a bill and hold sale basis, a consignment sale basis, a
guaranteed sale basis, a sale or return basis, or on the basis of any other
similar understanding, and no part of such goods has been returned or rejected;
(iv) the Account is not evidenced by chattel paper or an
instrument of any kind;
(v) the Account Debtor with respect to the Account (a) is
solvent, (b) is not the subject of any bankruptcy
139
or insolvency proceedings of any kind or of any other proceeding or action,
threatened or pending, which might have a materially adverse effect on its
business, and (c) is not, in the sole discretion of the Agent, deemed ineligible
for credit for other reasons (including, without limitation, unsatisfactory past
experiences of the Borrowers or any of the Banks with the Account Debtor or
unsatisfactory reputation of the Account Debtor);
(vi) (a) the Account Debtor is not located outside Canada or
the continental United States of America, or (b) if the Account Debtor is
located outside the continental United States, the Account is supported by a
letter of credit or FICA insurance deemed adequate and acceptable by the Agent;
(vii) (a) the Account Debtor is not the government of the
United States of America or any department, agency or instrumentality thereof,
or (b) if the Account Debtor is an entity mentioned in clause (vii)(a), the
Federal Assignment of Claims Act (or applicable similar legislation) has been
fully complied with so as to validly perfect the Banks' Prior Security Interest
to the Agent's satisfaction;
(viii) the Account is a valid, binding and legally enforceable
obligation of the Account Debtor with respect thereto and is not subject to any
dispute, condition, contingency, offset, recoupment, reduction, claim for
credit, allowance, adjustment, counterclaim or defense on the part of such
Account Debtor, and no facts exist which may provide a basis for any of the
foregoing in the present or future;
(ix) the Account is subject to the Agent's and the Banks'
Prior Security Interest and is not subject to any other Lien, claim, encumbrance
or security interest whatsoever;
(x) the Account is evidenced by an invoice or other
documentation and arises from a contract which is in form and substance
satisfactory to the Agent;
(xi) the appropriate Borrower has observed and complied with
all laws of the state in which the Account Debtor or the Account is located
which, if not observed and complied with, would deny to such Borrower access to
the courts of such state;
(xii) the Account is not subject to any provision prohibiting
its assignment or requiring notice of or consent to such assignment;
(xiii) the goods giving rise to the Account were not, at the
time of sale thereof, subject to any Lien or
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encumbrance except the Agent's and the Banks' Prior Security Interest;
(xiv) the Account is payable in freely transferable United
States Dollars; and
(xv) the Account is not, or should not be, disqualified for
any other reason generally accepted in the commercial finance business.
In addition to the foregoing requirements, Accounts of any Account Debtor which
are otherwise Qualified Accounts shall be reduced to the extent of any accounts
payable (including, without limitation, the Agent's estimate of any contingent
liabilities) by a Borrower to such Account Debtor ("Contras") provided that the
Agent, in its sole discretion, may determine that none of the Accounts in
respect to such Account Debtor shall be Qualified Accounts in the event that
there exists an unreasonably large amount of payables owing to such Account
Debtor.
Notwithstanding the qualification standards specified above, upon prior notice
to the Borrowers, the Agent may at any time or from time to time revise such
qualification standards.
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SCHEDULE 1.1(Q)(ii)
QUALIFIED INVENTORY
Upon delivery to the Agent of each Schedule of Inventory, the Agent
shall make a determination, in its sole discretion, as to which Inventory listed
thereon shall be deemed Qualified Inventory. Inventory shall not be considered
Qualified Inventory unless the Agent determines, in its sole discretion, that
such Inventory has met the following minimum requirements:
(i) the Inventory is either (a) finished goods (b) raw
materials other than supplies or (c) work-in-process; but excluding in all cases
any goods which have been shipped, delivered, sold by, purchased by or provided
to a Borrower on a bill and hold, consignment sale, guaranteed sale, or sale or
return basis, or any other similar basis or understanding other than an absolute
sale and also excluding all supplies;
(ii) the Inventory is new, of good and merchantable quality,
and represents no more than a twelve (12) month supply of such finished goods or
raw materials;
(iii) the Inventory is located in the pipeline owned by
Kiantone or in storage tanks located on a site owned by a Borrower or leased by
a Borrower if the landlord has executed a landlord's waiver in the form of
Exhibit 1.1(Q)(ii) hereto;
(iv) the Inventory is not stored with a bailee, warehouseman,
consignee or similar party unless the Agent has given its prior written consent
and a Borrower has caused such bailee, warehouseman, consignee or similar party
to issue and deliver to the Agent, in the form of Exhibit 1.1(Q)(ii) hereto,
warehouse receipts or similar type documentation therefor in the Agent's name;
(v) the Inventory is subject to the Agent's and the Banks'
Prior Security Interest and is not subject to any other Lien;
(vi) the Inventory has not been manufactured in violation of
any federal minimum wage or overtime laws, including, without limitation, the
Fair Labor Standards Act, 29 U.S.C. Section 215(a)(1);
(vii) the Inventory is not, and should not be, disqualified
for any other reason generally accepted in the commercial finance business; and
(viii) the Inventory is attached, seized, levied upon or
subjected to a writ or distress warrant, or such
142
come within the possession of any receiver, trustee, custodian or assignee for
the benefit of creditors and the same is not cured within thirty (30) days
thereafter.
Notwithstanding the qualification standards specified above, upon prior notice
to the Borrowers, the Agent may at any time or from time to time revise such
qualification standards.
143
SCHEDULE 1.1(A)
PRICING GRID--
VARIABLE PRICING AND FEES BASED ON LEVERAGE RATIO
=====================================================================================
Revolving Revolving Letter of
Credit Base Credit Euro- Credit
LEVEL Leverage Ratio Rate Spread Rate Spread Fee
=====================================================================================
Level I Less than 2.0 to 1.0 0 1.25% 1.25%
- -------------------------------------------------------------------------------------
Level II Greater than or equal to 0 1.50% 1.50%
2.0 to 1.0 but less than 3.0
to 1.0
- -------------------------------------------------------------------------------------
Level III Greater than or equal to .25% 1.75% 1.75%
3.0 to 1.0 but less than 3.5
to 1.0
- -------------------------------------------------------------------------------------
Level IV Greater than or equal to .50% 2.00% 2.00%
3.5 to 1.0 but less than 4.0
to 1.0
- -------------------------------------------------------------------------------------
Level V Greater than or equal to .75% 2.25% 2.25%
4.0 to 1.0
=====================================================================================
For purposes of determining the Applicable Margin and the Letter of Credit
Fee:
(a) The Applicable Margin and the Letter of Credit Fee shall be determined
on the Closing Date based on the Leverage Ratio computed on such date pursuant
to a certificate in the form of Exhibit 1.1(A)(2) to be delivered on the Closing
Date.
(b) The Applicable Margin and the Letter of Credit Fee shall be recomputed
as of the end of each fiscal quarter ending after the Closing Date based on the
Leverage Ratio as of such quarter-end. Any increase or decrease in the
Applicable Margin or the Letter of Credit Fee computed as of a quarter end shall
be effective on the date on which the Compliance Certificate evidencing such
computation is due to be delivered under Section 8.3.4.