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EXHIBIT 10.10
CONTINUING AGREEMENT OF GUARANTY AND SURETYSHIP
This Continuing Agreement of Guaranty and Suretyship (the "Guaranty")
is made and entered into this 9th day of June, 1997, by UNITED REFINING COMPANY,
(the "Guarantor"), for the benefit of the Banks which are a party to that
certain Credit Agreement by and among Guarantor,United Refining Company of
Pennsylvania, Kiantone Pipeline Corporation, PNC Bank, National Association, as
agent (the "Agent") and the Banks party thereto dated as of even date herewith
(as amended, supplemented or modified from time to time, the "Credit
Agreement").
BACKGROUND
In order to induce the Banks to make loans to the Guarantor and the
other Borrowers (as defined in the Credit Agreement) in accordance with that
certain Credit Agreement, the Guarantor hereby unconditionally and irrevocably
guarantees and becomes surety as though it was a primary obligor for the full
and timely payment when due, whether at maturity, by declaration, acceleration
or otherwise, of the principal of and interest and fees on all Loans (as defined
in the Credit Agreement), both those now in existence and those that shall
hereafter be made, of the Bank to the Borrowers under the Credit Agreement and
the Notes issued by the Borrowers in connection therewith and any extensions,
renewals, replacements or refundings thereof, and each and every other
obligation or liability (both those now in existence and those that shall
hereafter arise and including, without limitation, all costs and expenses of
enforcement and collection, including reasonable attorney's fees) of the
Borrowers to the Bank under the Credit Agreement and the other Loan Documents
(as defined in the Credit Agreement) except this Agreement, and any extensions,
renewals, replacements or refundings thereof (hereinafter referred to as the
"Guaranteed Indebtedness"), whether or not such Guaranteed Indebtedness or any
portion thereof shall hereafter be released or discharged or is for any reason
invalid or unenforceable.
1. Capitalized terms used herein and not otherwise defined herein shall
have such meanings given to them in the Credit Agreement.
2. The Guarantor agrees to make such full payment forthwith upon demand
of the Agent or any Bank when the Guaranteed Indebtedness or any portion thereof
is due to be paid by the other Borrowers, or any of them, whether at stated
maturity, by declaration, acceleration or otherwise. The Guarantor agrees to
make such full payment irrespective of whether or not any one or more of the
following events has occurred: (i) the Agent or any of the Banks have made any
demand on any other Borrower; (ii) the Agent or any of the Banks have taken any
action of any nature against any other Borrower; (iii) the Agent or any of the
Banks have pursued any rights which
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they have against any other Person who may be liable for the Guaranteed
Indebtedness; (iv) the Agent or any of the Banks hold or have resorted to any
security for the Guaranteed Indebtedness; or (v) the Agent or any of the Banks
have invoked any other remedies or right they have available with respect to the
Guaranteed Indebtedness. The Guarantor further agrees to make full payment to
the Banks even if circumstances exist which otherwise constitute a legal or
equitable discharge of the Guarantor as surety or guarantor.
3. The Guarantor warrants to the Agent and the Banks that: (i) no other
agreement, representation or special condition exists between such Guarantor and
the Agent and/or any of the Banks regarding the liability of the Guarantor
hereunder, nor does any understanding exist between the Guarantor and the Agent
and/or any of the Banks that the obligations of the Guarantor hereunder are or
will be other than as set forth herein; and (ii) as of the date hereof, the
Guarantor has no defense whatsoever to any action or proceeding that may be
brought to enforce this Guaranty.
4. The Guarantor waives and agrees not to enforce any of the rights of
the Guarantor against any other Borrower, including, but not limited to: (i) any
right of the Guarantor to be subrogated in whole or in part to any right or
claim with respect to any Guaranteed Indebtedness or any portion thereof to any
of the Banks which might otherwise arise from payment by the Guarantor to any of
the Banks on the account of the Guaranteed Indebtedness or any portion thereof;
and (ii) any right of the Guarantor to require the marshalling of assets of any
other Borrower which might otherwise arise from payment by the Guarantor to any
of the Banks on account of the Guaranteed Indebtedness or any portion thereof.
If any amount shall be paid to the Guarantor in violation of the preceding
sentence, such amount shall be deemed to have been paid to the Guarantor for the
benefit of, and held in trust for the benefit of, the Agent and shall
forthwith be paid to the Agent for the benefit of the Agent and the Banks to be
credited and applied upon the Guaranteed Indebtedness, whether matured or
unmatured, in accordance with the terms of the Credit Agreement provided that
the Guarantor shall have the rights against any other Borrower listed above
after all Obligations under the Credit Agreement are paid in full in cash. The
Guarantor acknowledges that it will receive direct and indirect benefits from
the financing arrangements contemplated by the Credit Agreement and that the
waivers set forth in this Section are knowingly made in contemplation of such
benefits.
5. The Guarantor waives promptness and diligence by the Agent or any of
the Banks with respect to its rights under this Guaranty.
6. The Guarantor waives any and all notice with respect to: (i)
acceptance by the Agent and the Banks of this Guaranty; (ii) the provisions of
any note, instrument or agreement relating
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to the Guaranteed Indebtedness; (iii) any default in connection with the
Guaranteed Indebtedness; and (iv) any other notice in connection with the
Guaranteed Indebtedness.
7. The Guarantor waives any presentment, demand, notice of dishonor or
nonpayment, protest, and notice of protest in connection with the Guaranteed
Indebtedness.
8. The Guarantor agrees that the Agent or any of the Banks may from
time to time and as many times as the Agent or any of the Banks, in their sole
discretion, deem appropriate, do any of the following without notice to the
Guarantor and without adversely affecting the validity or enforceability of this
Guaranty: (i) release, surrender, exchange, compromise, or settle the Guaranteed
Indebtedness or any portion thereof; (ii) change, renew, or waive the terms of
the Guaranteed Indebtedness or any portion thereof; (iii) change, renew, or
waive the terms, including without limitation, the rate of interest charged to
any other Borrower, of any note, instrument, or agreement relating to the
Guaranteed Indebtedness or any portion thereof; (iv) grant any extension or
indulgence with respect to the payment to the Agent or any of the Banks of the
Guaranteed Indebtedness or any portion thereof; (v) enter into any agreement of
forbearance with respect to the Guaranteed Indebtedness or any portion thereof;
(vi) release, surrender, exchange or compromise any security held by the Agent
or any of the Banks for the Guaranteed Indebtedness; (vii) release any Person
who is a guarantor or surety or who has agreed to purchase the Guaranteed
Indebtedness or any portion thereof; and (viii) release, surrender, exchange or
compromise any security or Lien held by the Agent or any of the Banks for the
liabilities of any Person who is a guarantor or surety for the Guaranteed
Indebtedness or any portion thereof. The Guarantor agrees that the Agent or any
of the Banks may do any of the above as the Agent or such Bank deems necessary
or advisable, in the Agent's or such Bank's sole discretion, without giving any
notice to the Guarantor, and that the Guarantor will remain liable for full
payment to the Agent and each of the Banks of the Guaranteed Indebtedness.
9. The Guarantor agrees to be bound by the terms of this Guaranty and
liable under this Guaranty. As a result of such liability, the Guarantor
acknowledges that the Agent or any of the Banks may, in their sole discretion,
elect to enforce this Guaranty for the total Guaranteed Indebtedness against the
Guarantor without any duty or responsibility to pursue any other guarantor and
that such an election by the Agent or any of the Banks shall not be a defense to
any action the Agent or any of the Banks may elect to take against the
Guarantor.
10. If any amount owing hereunder shall have become due and payable (by
acceleration or otherwise), each of the Banks and any branch, subsidiary or
affiliate of each of the Banks anywhere in the world shall each have the right,
at any time and from time to time to the fullest extent permitted by Law, in
addition to all other rights and remedies available to it, without prior notice
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to the Guarantor, to set-off against and to appropriate and apply to such due
and payable amounts any debt owing to, and any other funds held in any manner
for the account of the Guarantor by such Bank or any such branch, subsidiary or
affiliate including, without limitation, 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 the Guarantor with such
Bank or such branch, subsidiary or affiliate. Such right shall exist whether or
not any Bank, or such branch, subsidiary or affiliate or the Agent shall have
given notice or made any demand hereunder or under any of the Notes or Loan
Documents, whether or not such debt owing to or funds held for the account of
the Guarantor is or are matured or unmatured, and regardless of the existence or
adequacy of any collateral, guarantee or any other security, right or remedy
available to such Bank or such branch, subsidiary or affiliate. The Guarantor
hereby consents to and confirms the foregoing arrangements, and confirms the
Bank's rights and each such branch's, subsidiary's and affiliate's rights of
banker's lien and set-off.
11. The Guarantor recognizes and agrees that any other Borrower, after
the date hereof, may incur additional Indebtedness or other obligations, fees
and expenses to the Agent and/or the Banks under the Credit Agreement, refinance
existing Guaranteed Indebtedness or pay existing Guaranteed Indebtedness and
subsequently incur additional Indebtedness to the Agent and/or the Banks under
the Credit Agreement, and that in any such transaction, even if such transaction
is not now contemplated, the Agent and the Banks will rely in any such case upon
this Guaranty and the enforceability thereof against the Guarantor and that this
Guaranty shall remain in full force and effect with respect to such future
Indebtedness of the other Borrower to the Agent and/or the Banks and such
Indebtedness shall for all purposes constitute Guaranteed Indebtedness.
12. The Guarantor further agrees that, if at any time all or any part
of any payment, from whomever received, theretofore applied by the Agent or any
of the Banks to any of the Guaranteed Indebtedness is or must be rescinded or
returned by the Agent or any of the Banks for any reason whatsoever including,
without limitation, the insolvency, bankruptcy or reorganization of the
Guarantor, such liability shall, for the purposes of this Guaranty, to the
extent that such payment is or must be rescinded or returned, be deemed to have
continued in existence, notwithstanding such application by the Agent or any of
the Banks, and this Guaranty shall continue to be effective or be reinstated, as
the case may be, as to such liabilities, all as though such application by the
Agent or any of the Banks had not been made.
13. The Guarantor agrees that no failure or delay on the part of the
Agent or any of the Banks to exercise any of its rights, powers or privileges
under this Guaranty shall be a wavier of such rights, powers or privileges or a
waiver of any
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default, nor shall any single or partial exercise of any of the Agent's or the
Bank's rights, powers or privileges preclude other or further exercise thereof
or the exercise of any other right, power or privilege or be construed as a
waiver of any default. The Guarantor further agrees that no waiver or
modification of any rights of the Agent or any of the Banks under this Guaranty
shall be effective unless in writing and signed by the Agent and the Banks. The
Guarantor further agrees that each written waiver shall extend only to the
specific instance actually recited in such written waiver and shall not impair
the rights of the Agent and the Banks in any other respect.
14. The Guarantor unconditionally agrees to pay all costs and expenses,
including reasonable attorney's fees, incurred by the Agent and any of the Banks
in enforcing this Guaranty against the Guarantor.
15. The Guarantor agrees that this Guaranty and the rights and
obligations of the Guarantor, the Agent and the Banks shall for all purposes be
governed by and construed and enforced in accordance with the substantive law of
the Commonwealth of Pennsylvania without giving effect to its principles of
conflict of laws.
16. The Guarantor recognizes that this Guaranty when executed
constitutes a sealed instrument and as a result the instrument will be
enforceable as such without regard to any statute of limitations which might
otherwise be applicable and without any consideration.
17. The Guarantor acknowledges that in addition to binding itself to
this Guaranty, at the time of execution of this Guaranty the Agent and the Banks
offered to such Guarantor a copy of this Guaranty in the form in which it was
executed and that by acknowledging this fact the Guarantor may not later be able
to claim that a copy of the Guaranty was not received by it.
18. The Guarantor agrees that this Guaranty shall be binding upon the
Guarantor, its successors and assigns; provided, however, that the Guarantor may
not assign or transfer any of tis rights and obligations hereunder or any
interest herein. The Guarantor further agrees that (i) this Guaranty is freely
assignable and transferable by the Agent and each Bank in connection with any
assignment or transfer of the Guaranteed Indebtedness and (ii) this Guaranty
shall inure to the benefit of the Agent and each of the Banks, their successors
and assigns.
19. The Guarantor agrees that if the Guarantor fails to perform any
covenant or agreement hereunder or if there occurs an Event of Default under the
Credit Agreement, all or any part of the Guaranteed Indebtedness may be declared
to be forthwith due and payable and, in the case of an Event of Default
described in subsections 8.1.13 or 8.1.14 of the Credit Agreement, the
Guaranteed Indebtedness shall be immediately due and payable, in any case
without presentment, demand, protest or notice of any
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kind, all of which are hereby expressly waived.
20. The Guarantor agrees that the enumeration of the Bank's rights and
remedies set forth in this Guaranty is not intended to be exhaustive and the
exercise by the Agent or any of the Banks of any right or remedy shall not
preclude the exercise of any other rights or remedies, all of which shall be
cumulative and shall be in addition to any other right or remedy given hereunder
or under any other agreement among the parties to the Loan Documents or which
may now or hereafter exist at law or in equity or by suit or otherwise.
21. The Guarantor agrees that all notices, statements, requests,
demands and other communications under this Guaranty shall be given to the
Guarantor at the address set forth below its name on the signature page hereof
and to Lowenthal, Landau, Fischer & Bring, P.C., 250 Park Avenue, New Your, NY
10177, Attn: Martin R. Bring, Esq.,in the manner provided in Section 10.6 of the
Credit Agreement.
22. (a) The Guarantor agrees that the provisions of this Guaranty are
severable, and in an action or proceeding involving any state or federal
bankruptcy, insolvency or other law affecting the rights of creditors generally:
(i) if any clause or provision shall be held invalid
or unenforceable in whole or in part in any jurisdiction, then such invalidity
or unenforceability shall affect only such clause or provision, or part thereof,
in such jurisdiction and shall not in any manner affect such clause or provision
in any other jurisdiction, or any other clause or provision in this Guaranty in
any jurisdiction.
(ii) if this Guaranty would be held or determined to
be void, invalid or unenforceable on account of the amount of the Guarantor's
aggregate liability under this Guaranty, then, notwithstanding any other
provision of this Guaranty to the contrary, the aggregate amount of such
liability shall, without any further action by the Agent or any Bank, the
Guarantor or any other Person, be automatically limited and reduced to the
highest amount which is valid and enforceable as determined in such action or
proceeding, which (without limiting the generality of the foregoing) may be an
amount which is not greater than the greater of:
(A) the fair consideration actually received by the
Guarantor under the terms of and as a result of the Loan Documents, including,
without limiting the generality of the foregoing, and to the extent not
inconsistent with applicable federal and state laws affecting the enforceability
of guarantees, distributions or advances made to the Guarantor with the proceeds
of any credit extended under the Loan Documents in exchange for its guaranty of
the Guaranteed Indebtedness, or
(B) the excess of (1) the amount of the fair
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saleable value of the assets of the Guarantor as of the date of this Guaranty as
determined in accordance with applicable federal and state laws governing
determinations of the insolvency of debtors as in effect on the date thereof
over (2) the amount of all liabilities of the Guarantor as of the date of this
Guaranty, also as determined on the basis of applicable federal and state laws
governing the insolvency of debtors as in effect on the date thereof.
(b) If the guaranty by the Guarantor of the Guaranteed
Indebtedness is held or determined to be void, invalid or unenforceable, in
whole or in part, such holding or determination shall not impair or affect:
(i) the validity and enforceability of the guaranty
hereunder by any other guarantor, which shall continue in full force and effect
in accordance with its terms; or
(ii) the validity and enforceability of any clause or
provision not so held to be void, invalid or unenforceable.
23. THE GUARANTOR HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY WITH RESPECT TO ANY
LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH
THIS GUARANTY. THE GUARANTOR (i) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR
ATTORNEY OF THE AGENT OR THE BANKS HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT
SUCH PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING
WAIVER, AND EXECUTION AND DELIVERY HEREOF BY THE GUARANTOR, AND (ii)
ACKNOWLEDGES THAT THE ENTERING INTO OF THE CREDIT AGREEMENT BY THE BANK HAS BEEN
INDUCED BY, AMONG OTHER THINGS, THE WAIVERS AND CERTIFICATIONS SET FORTH IN THIS
SECTION.
24. The Guarantor (i) hereby irrevocably submits to the nonexclusive
jurisdiction of the Court of Common Pleas of Allegheny County, Commonwealth of
Pennsylvania, or any successor to said court, and to the nonexclusive
jurisdiction of the United States District Court for the Western District of
Pennsylvania, or any successor to said court (hereinafter referred to as the
"Pennsylvania Courts") for purposes of any suit, action or other proceeding
which relates to this Guaranty or any other Loan Document, (ii) to the extent
permitted by applicable Law, hereby waives and agrees not to assert by way of
motion, as a defense or otherwise in any such suit, action or proceeding, any
claim that it is not personally subject to the jurisdiction of the Pennsylvania
Courts; that such suit, action or proceeding is brought in an inconvenient
forum; that the venue of such suit, action or proceeding is improper; or that
this Guaranty or any Loan Document may not be enforced in or by the Pennsylvania
Courts, (iii) hereby agrees not to seek, and hereby waives, any collateral
review by any other court, which may be called upon to enforce the judgment of
any of the Pennsylvania Courts, of the merits of any such suit, action or
proceeding or the jurisdiction of the Pennsylvania Courts, and (iv) waives
personal service of
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any and all process upon it and consents that all such service of process by
made by certified or registered mail addressed as provided in Section 21 hereof
and service so made shall be deemed to be completed upon actual receipt thereof.
Nothing herein shall limit the Agent's or any Bank's right to bring any suit,
action or other proceeding against the Guarantor or any of Guarantor's assets or
to serve process on the Guarantor by any means authorized by Law.
[SIGNATURES BEGIN ON NEXT PAGE]
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[SIGNATURE PAGE 1 OF 1 TO THE GUARANTY AGREEMENT]
IN WITNESS WHEREOF, the Guarantor intending to be legally bound, has
executed this Guaranty as of the date first above written with the intention
that this Guaranty shall constitute a sealed instrument.
WITNESS:
Attest: UNITED REFINING COMPANY
______________________________ By:_____________________________________
Title:__________________________________
Address for Notices:
15 Bradley Street, Box 780
Warren, PA 16365