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CREDIT AGREEMENT
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THIS CREDIT AGREEMENT is executed this 4th day of
October, 1996, between VALLEY NATIONAL GASES, INC., a West Virginia
corporation (the "Company"), and BANK ONE, INDIANAPOLIS, NATIONAL
ASSOCIATION, a national banking association with its principal
office in Indianapolis, Indiana (the "Bank").
AGREEMENT
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NOW THEREFORE, in consideration of the premises, the
mutual covenants and agreements herein, and each act performed and
to be performed hereunder, the Bank and the Company agree as
follows:
ARTICLE I.
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DEFINITION OF TERMS
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SECTION 1.01. ACCOUNTING TERMS -- DEFINITIONS. All
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accounting and financial terms used in this Agreement are used with
the meanings such terms would be given in accordance with GAAP
except as may be otherwise specifically provided in this Agreement.
The following terms have the meanings indicated when used in this
Agreement with the initial letter capitalized:
"Acquisition Seller Debt" means, collectively (i) the
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Existing Acquisition Seller Debt, and (ii) any deferred purchase
price of a New Acquisition payable by the Company to the
Acquisition Sellers or any of them with respect to that New
Acquisition evidenced by or payable under the terms of a promissory
note or non-compete agreement or other Debt instrument.
"Acquisition Sellers" means, collectively (i) the
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Existing Acquisition Sellers, and (ii) any and all Persons from
whom the Company acquires a New Acquisition, and when used in the
singular form, means any of the Acquisition Sellers, as the context
so requires.
"Additional EBITDA Amount" means an amount equal to
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the sum of: (i) such amount as may be approved by the Bank in its
sole discretion of EBITDA of a Related Business Entity acquired in
a New Acquisition for the twelve (12) calendar month period
immediately preceding the New Acquisition Closing Date for such New
Acquisition or for such other twelve (12) calendar month period
preceding such New Acquisition Closing Date as may be agreed and
approved by the Bank, provided that, such amount is subject to
redetermination by the Bank at its sole discretion to reflect
elimination of expenses of such Related Business Entity by virtue
of the acquisition; plus (ii) an amount calculated as set forth
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on EXHIBIT A attached hereto.
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"Advance" means a disbursement of proceeds of the
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Revolving Loan.
"Affiliate" means, with, respect to any Person, any
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officer, shareholder or director, of such Person and any Person or
group acting in concert in respect of the Person in question that,
directly or indirectly, controls or is controlled by or is under
common control with such Person.
"Agreement" means this Credit Agreement, as amended,
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modified, supplemented and/or restated from time to time and at any
time.
"Applicable Spread" means that number of percentage
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points to be taken into account in determining any LIBOR-based Rate
and any Prime-based Rate as provided in this Agreement, which
number shall be determined by reference to the Ratio of Total
Funded Debt to EBITDA in accordance with the following table:
Ratio of Total If Determining If Determining
Funded Debt to a Prime-based a LIBOR-based
EBITDA Rate Rate
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4.00 or above 0.25% 2.5%
3.50 to 3.99 0.25% 2.5%
3.00 to 3.49 0% 2.25%
2.50 to 2.99 0% 2.0%
2.00 to 2.49 0% 1.75%
less than 2.00 0% 1.5%
The Applicable Spread shall be determined on the Closing Date on
the basis of the Ratio of Total Funded Debt to EBITDA in effect on
the Closing Date as provided in the definition of Ratio of Total
Funded Debt to EBITDA in this Agreement, and shall be redetermined
and adjusted concurrently with any adjustment to the Ratio of Total
Funded Debt to EBITDA as provided in the definition of Ratio of
Total Funded Debt to EBITDA in this Agreement, with prospective
effect until so redetermined and adjusted.
"Applicable Unused Commitment Fee Percentage" means
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the percentage per annum determined by reference to the Ratio of
Total Funded Debt to EBITDA in accordance with the following table:
Ratio of Total Funded Debt Applicable Unused
to EBITDA Commitment Fee Percentage
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4.00 or above 0.375%
3.50 to 3.99 0.375%
3.00 to 3.49 0.375%
2.50 to 2.99 0.25%
2.00 to 2.49 0.25%
less than 2.00 0.25%
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The Applicable Unused Commitment Fee Percentage shall be determined
on the Closing Date on the basis of the Ratio of Total Funded Debt
to EBITDA in effect on the Closing Date as provided in the
definition of Ratio of Total Funded Debt to EBITDA in this
Agreement, and shall be redetermined and adjusted concurrently with
any adjustment to the Ratio of Total Funded Debt to EBITDA as
provided in the definition of Ratio of Total Funded Debt to EBITDA
in this Agreement, with prospective effect until so redetermined
and adjusted.
"Application for Revolving Loan Advance" means a
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written application of the Company for a disbursement of proceeds
of the Revolving Loan substantially in the form of EXHIBIT B
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attached hereto.
"Authorized Officer" means the President or the Chief
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Financial Officer of the Company or such other officer whose
authority to perform acts to be performed only by an Authorized
Officer under the terms of this Agreement is evidenced to the Bank
by a certified copy of an appropriate resolution of the Board of
Directors of the Company.
"Bank" has the meaning ascribed to such term in the
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preamble to this Agreement.
"Banking Day" means a day on which the principal
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office of the Bank in the City of Indianapolis, Indiana, is open
for the purpose of conducting substantially all of the Bank's
business activities.
"Capital Expenditures" for any period shall mean the
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aggregate amount of all expenditures (whether paid in cash or
accrued as a liability) of the Company during such period that to
the extent required by GAAP are required to be included in or
reflected as property, plant or equipment or similar fixed asset
account in any Financial Statements, including any acquisition,
construction or installation of properties or for any additions and
improvements thereto or any replacement thereof and the amount
capitalized under any Capital Lease, less the net cash proceeds
from any dispositions to the extent specifically permitted under
this Agreement.
"Capital Lease" shall mean any lease of property
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(whether real, personal or mixed) which, to the extent required by
GAAP, is accounted for as a capital lease or a Capital Expenditure
on the balance sheet of the Company.
"Cash Capital Expenditures" means those Capital
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Expenditures that are not financed with new Debt (including Debt
incurred under this Agreement) or through Capital Leases.
"Cash Collateral" means any and all cash (or
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qualified investment property as may be acceptable to the Bank in
its sole
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discretion) required or permitted to be pledged by any
Person to the Bank under this Agreement as security for all or any
part of the Obligations, which shall be held by the Bank, as
secured party, in a cash or securities collateral account
maintained with the Bank or its designee ("Collateral Account")
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under which the Bank is granted a pledge, security interest and
lien in and to the Collateral Account, the cash and any and all
other investment property or other property at any time held in the
Collateral Account, and all proceeds and substitutions of any of
the foregoing (collectively, the "Collateral Account Property"),
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pursuant to a pledge agreement, account control agreement, and such other
security instruments as may required by the Bank to perfect and maintain
perfection of its interest in the Collateral Account Property, all in form and
substance satisfactory to the Bank in all respects.
"Code" means the Internal Revenue Code of 1986, as
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amended.
"Common Stock" means the common stock of the Company
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as constituted on the Closing Date, and any class of capital stock
of the Company now or hereafter authorized having the right to
share in distributions either of earnings or assets of the Company
without limit as to amount or percentage.
"Company" has the meaning ascribed to such term in
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the preamble to this Agreement.
"Company's Auditors" means one of the six (6) largest
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independent certified public accounting firms in the U.S.
"Convertible Securities" means evidences of
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indebtedness, shares of stock or other securities which are
convertible into or exchangeable for, with or without payment of
additional consideration, shares of Common Stock, either
immediately or upon the arrival of a specified date or the
happening of a specified event.
"Credit Enhancement" means, in reference to the
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prohibited purposes of Letters of Credit described in Section
2.03(a) of this Agreement, the enhancement or support of or
security for any credit extended or to be extended by any Person to
the Company, including any Debt of the Company for borrowed money,
Capital Lease obligations, and any guarantees, endorsements and
other contingent obligations of the Company with respect to
indebtedness, liabilities or obligations of other Persons;
provided, that, the term "Credit Enhancement" shall not include
Acquisition Seller Debt.
"Debt" means, with reference to any Person, all
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indebtedness, liabilities and obligations, contingent or otherwise,
which in accordance with GAAP should be classified upon such
Person's balance sheet as liabilities, but in any event including
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(without duplication) liabilities secured by any lien on property
owned or acquired by such Person (whether or not the liability
secured thereby shall have been assumed and whether or not such
Person is personally liable for the payment thereof), obligations
under leases which have been (or which in accordance with GAAP
should be) capitalized for financial reporting purposes, and all
guarantees, endorsements and other contingent obligations of such
Person with respect to indebtedness, liabilities or obligations of
others.
"Draft" shall mean a drawing or other demand for
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payment under a Letter of Credit.
"EBITDA" means for any period, with respect of any
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Person, Net Income of such Person, plus, without duplication and to
the extent deducted in determining Net Income, the sum of interest
expense, income tax expense, depreciation and amortization expense,
determined in accordance with GAAP. For purposes of determining
EBITDA of the Company on a pro forma basis to determine the effect
of a New Acquisition on compliance with the covenants in
subsections 5.01(g) of this Agreement and to determine the
Applicable Spread and the Applicable Unused Commitment Fee
Percentage for any period of twelve (12) months or four fiscal
quarters of the Company that ends ("Period Ending Date"):
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(i) on any New Acquisition Closing Date, EBITDA of the Company for
such period will be deemed to include the Additional EBITDA Amount
calculated with respect to the Related Business Entity acquired on
such New Acquisition Closing Date; and (ii) within one year after
any New Acquisition Closing Date, EBITDA of the Company for such
period will be deemed to include an amount equal to (A) the
Additional EBITDA Amount calculated with respect to the Related
Business Entity acquired on such New Acquisition Closing Date,
minus (B) 1/12 of such Additional EBITDA Amount for each full
calendar month that has elapsed between such New Acquisition
Closing Date and the Period Ending Date, minus (c) 1/30 of such
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Additional EBITDA Amount for each day of any partial calendar month
that has elapsed between such New Acquisition Closing Date and the
Period Ending Date.
"Environmental Laws" means all federal, state and
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local laws and implementing regulations, now or hereafter effective
during the term of this Agreement, relating to pollution or
protection of the environment, including laws or regulations
relating to or permitting emissions, discharges, releases or
threatened releases of pollutants, contaminants, chemicals, or
industrial, toxic or hazardous substances or wastes into the
environment (including without limitation ambient air, surface
water, ground water, or land), or to the manufacture, processing,
distribution, use, treatment, storage disposal, transport, or
handling of pollutants, contaminants chemicals, industrial wastes,
or hazardous substances. Such laws shall include, but not be
limited to: (a) the Comprehensive Environmental Response,
Compensation and Liability Act, as amended, 42 U.S.C. Sec. 9601 et
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seq.; (b) the Resource Conservation and Recovery Act, as
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amended, 42 U.S.C. Sec. 6901 et seq., including the
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statutes regulating underground storage tanks, 42 U.S.C. 6991-
6991h; (c) the Clean Air Act, as amended, 42 U.S.C. 7401 et seq.;
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(d) the Federal Water Pollution Control Act, as amended, 33 U.S.C. Sec. 1251
et seq., including the statute regulating the National Pollutant Discharge
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Elimination System, 33 U.S.C. Sec. 1342; and (e) Indiana Code, Title 13
Environment, as amended.
"ERISA" mean the Employee Retirement Income Security
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Act of 1974, as amended.
"Existing Acquisition Sellers" means, collectively,
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the Persons identified on EXHIBIT C attached hereto.
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"Existing Acquisition Seller Debt" means,
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collectively, the Debt owed by the Company to the Existing
Acquisition Sellers, respectively, identified on EXHIBIT C
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attached hereto.
"Event of Default" means any of the events described
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in Section 7.01 of this Agreement.
"Financial Statements" includes, but is not limited
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to, balance sheets, profit and loss statements, and cash flow
statements, prepared in accordance with GAAP.
"Fixed Charge Coverage Ratio" means, with respect to
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the Company for any period, a ratio of EBITDA of the Company to
Fixed Charges.
"Fixed Charges" means, with respect to the Company
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for any period, the sum of interest which was due and payable in
cash or was paid in cash during such period, plus Cash Capital
Expenditures made during such period, plus scheduled payments of
Debt of the Company which were due and payable in cash or were paid
during such period, plus income taxes which were due or paid during
such period, plus dividends that were paid in cash during such
period.
"GAAP" means generally accepted accounting principles
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in the United States of America as in effect from time to time,
which shall include the official interpretations thereof by the
Financial Accounting Standards Board, consistently applied (from
and after the date hereof) and for the period as to which such
accounting principles are to apply. Except as otherwise provided
in this Agreement, to the extent applicable, 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, to the extent
applicable, all accounting or financial terms shall have the
meanings ascribed to such terms by GAAP.
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"Government Acts" has the meaning ascribed to such
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term in subsection 2.03(e) of this Agreement.
"Hazardous Substance" means any hazardous or toxic
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substance regulated by any Environmental Laws, including but not
limited to the Comprehensive Environmental Response, Compensation
and Liability Act, the Resource Conservation and Recovery Act and
the Toxic Substance Control Act, or by any federal, state or local
governmental agencies having jurisdiction over the control of any
such substance including but not limited to the United States
Environmental Protection Agency.
"Intercreditor Agreements" means one or more
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intercreditor and subordination agreements between the Bank, the
Company and the Existing Acquisition Sellers, in form and substance
the same as attached hereto as EXHIBIT D, as the same may be
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amended, modified, extended, renewed, supplemented, replaced and/or
restated from time to time and at any time.
"Letters of Credit" means all standby letters of
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credit issued by the Bank pursuant to Section 2.03 of this
Agreement.
"Letter of Credit Exposure" means, as of the date
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such amount is to be determined, the sum of:
(a) the aggregate face amounts of all Letters of Credit
that have not expired by their terms or have not
been surrendered by the beneficiary prior to the
expiration thereof (including the face amounts of
any Letters of Credit that have expired by their
terms but have not been surrendered by the
beneficiary and as to which the beneficiary asserts
a right to present and/or have honored Drafts);
less any portion of such face amounts that has
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been exhausted by the payment or acceptance of
Drafts thereunder or otherwise; plus
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(b) the total dollar amount of (1) the amount of all
Drafts under Letters of Credit which have been
honored by the Bank or which the Bank has otherwise
been required to pay but with respect to which the
Bank has not yet received reimbursement from the
Company, including without limitation, the
principal amounts of all outstanding Letter of
Credit Loans, and (2) the amount of all Drafts
under Letters of Credit which have been presented
to the Bank but not honored by the Bank, which the
Bank (in its sole discretion) determines it may yet
honor or be required to honor or the amount of
which it may otherwise be required to pay.
"Letter of Credit Loan" has the meaning ascribed to
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such term in subsection 2.03(d) of this Agreement.
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"LIBOR-based Rate" means a variable rate at which
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interest may accrue on all or a portion of either of the Loans
under the terms of this Agreement, which rate is determined by
reference to the London Interbank Offered Rate.
"Loans" means, collectively, the Revolving Loan and
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the Term Loan and, when used in the singular form, means any of the
Loans, as the context requires.
"Loan Documents" means, collectively, this Agreement,
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the Revolving Note, the Term Note, the Security Agreement, the
intercreditor Agreements, any and all Reimbursement Agreements and
all other instruments, agreements and documents executed and
delivered or to be delivered by the Company pursuant to or by
virtue of this Agreement, as each may be amended, modified,
extended, renewed, supplemented and/or restated from time to time
and at any time, and when used in the singular form, means any of
the Loan Documents, as the context requires.
"London Interbank Offered Rate" means the per annum
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rate of interest, as determined by the Bank, at which dollar
deposits in immediately available funds are offered to the
principal banks in the London interbank market by other principal
banks in that market two Banking Days prior to the commencement of
a period of either one month, two months, three months, or six
months for which the Company shall have requested a quotation of
the rate in amounts equal to the amount for which the Company shall
have requested a quotation of the rate.
"Maximum Availability" means $25,000,000.
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"Net Income" means, for any period, with respect to
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any Person, the net income of such Person, determined in accordance
with GAAP.
"Net Worth" means, as of the date any determination
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thereof is to be made, the net worth of the Company of such date.
"New Acquisition" means the acquisition by the
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Company from any Person of the assets and goodwill of such Person
which comprise a Related Business Entity, or of all or
substantially all of the stock, partnership interest, or other
ownership interest of any type whatsoever of such Person in a
Related Business Entity if such Related Business Entity is merged
into the Company with the Company being the surviving entity, in a
transaction or series of transactions closed after the Closing
Date, provided that (i) the consummation of such acquisition
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on a pro forma basis will not cause the occurrence of an Event of Default or
an Unmatured Event of Default; and (ii) Financial Statements are maintained
for such Related Business Entity, for such periods preceding the acquisition
as may be reasonably required by the Bank.
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"New Acquisition Closing Date" means the date on
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which a New Acquisition is consummated.
"Notes" means, collectively, the Revolving Note and
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the Term Note, and when used in the singular, means any of the
Notes, as the context requires.
"Obligations" means all present and future
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indebtedness, obligations and liabilities, and all renewals and
extensions thereof, now or hereafter owed to the Bank by the
Company, whether arising under, by virtue of or pursuant to any of
this Agreement, the Notes, the Reimbursement Agreements, any other
Loan Documents or otherwise, together with all costs, expenses and
reasonable attorneys, fees (including the reasonable allocated
costs of staff counsel) incurred by the Bank in the enforcement or
collection thereof, whether such indebtedness, obligations and
liabilities are direct, indirect, fixed, contingent, liquidated,
unliquidated, joint, several, joint and several, now exist or
hereafter arise, or were prior to acquisition thereof by the Bank
owed to some other Person.
"Officer's Certificate" means a certificate in the
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form included as a part of EXHIBIT B attached hereto signed by
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the President or Chief Financial Officer of the Company, confirming
that all of the representations and warranties contained in Section
3.01 of this Agreement are true and correct as of the date of such
certificate except as specified therein and with the further
exceptions that: (i) the representation contained in subsection
3.01(d) of this Agreement shall be construed so as to refer to the
latest Financial Statements which have been furnished to the Bank
as of the date of any such certificate, (ii) the representations
contained in subsection 3.01(k) (with respect to Hazardous
Substances) will be construed so as to apply not only to the
Company, but also to any Subsidiaries, whether now owned or
hereafter acquired, (iii) the representation contained in
subsection 3.01(l) of this Agreement shall be deemed to be amended
to reflect the existence of any Subsidiary hereafter formed or
acquired by the Company with the consent of the Bank, and (iv) all
other representations will be construed to have been amended to
conform with any changes of which the Company shall have previously
given the Bank notice in writing. The Officer's Certificate shall
further confirm that no Event of Default or Unmatured Event of
Default shall have occurred and be continuing as of the date of the
Officer's Certificate or shall describe any such event which shall
have occurred and be then continuing and the steps being taken by
the Company to correct it.
"Period Ending Date" has the meaning ascribed to such
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term in the text of the definition of EBITDA in this Section 1.01.
"Person" shall mean an individual, a corporation, a
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limited or general partnership, a limited liability company, a
joint venture, a trust or unincorporated organization, a joint
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stock company or other similar organization, a government or any
political subdivision thereof, a court, or any other legal entity,
whether acting in an individual, fiduciary or other capacity.
"Plan" means an employee pension benefit plan as
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defined in ERISA.
"Prepayment Premium" means the excess, if any, as
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determined by the Bank of: (i) the present value at the time of
prepayment of the interest payments which would have been payable
on account of an amount prepaid from the date of prepayment until
the end of the period during which interest would have accrued at
a LIBOR-based Rate but for prepayment over (ii) the present value
at the time of prepayment of interest payments calculated at the
rate (the "Reinvestment Rate") which the Bank then estimates it
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would receive upon reinvesting the principal amount of the
prepayment in an obligation which presents a credit risk
substantially similar (as determined in accordance with the
commercial credit rating system then used by the Bank) to that
which is then presented by the Loan for a period approximately
equal to the balance of the period during which interest would
accrue on the portion of the Loan prepaid at a LIBOR-based Rate,
but for prepayment. The discount rate used by the Bank in
determining such present values shall be the Reinvestment Rate.
"Prime-based Rate" means any variable rate at which
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interest may accrue on all or a portion of either of the Loans
under the terms of this Agreement, which rate is determined by
reference to the Prime Rate.
"Prime Rate" means a variable per annum interest rate
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equal at all times to the rate of interest established and quoted
by the Bank as its prime rate, such rate to change
contemporaneously with each change in such established and quoted
rate, provided that it is understood that the Prime Rate shall not
necessarily be representative of the rate of interest actually
charged by the Bank on any loan or class of loans.
"Public Offering" means a public offering and sale,
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pursuant to a registration statement filed by the Company under the
Securities Act of 1933, as amended, or any successor Federal
statute, and the rules and regulations of the Securities Commission
promulgated thereunder, all as the same shall be in effect from
time to time, with the Securities Commission (other than a
registration statement filed on Form S-8, or any successor form
thereto, with respect to the issuance of capital stock granted or
to be granted to employees or directors of the Company), whether
primary or secondary, of Common Stock or Convertible Securities or
rights to acquire Common Stock or Convertible Securities.
"Ratio of Total Funded Debt to EBITDA" shall mean,
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with respect to any period, the ratio of Total Funded Debt to
EBITDA of the Company. For purposes of determining the Applicable
Spread and
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the Applicable Unused Commitment Fee, the Ratio of Total Funded Debt to EBITDA
shall be determined on the Closing Date on the basis of the Financial
Statements of the Company provided to the Bank prior to the Closing Date for
the preceding twelve (12) calendar month period ending June 30, 1996, and
thereafter shall be redetermined and adjusted as necessary as follows:
(i) Quarterly Adjustments. For purposes of
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determining the Applicable Spread and the Applicable Unused
Commitment Fee, the Ratio of Total Funded Debt to EBITDA
shall be redetermined and adjusted as necessary on the basis
of the Financial Statements of the Company for the most recent
preceding four fiscal quarters of the Company provided to the
Bank pursuant to the requirements of subsection 5.01(b) of
this Agreement (a "Quarterly Adjustment"), with prospective
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effect until the next adjustment date. Quarterly Adjustments shall be
made on the first interest payment date which follows receipt by the Bank
of the Financial Statements for the last month of the first fiscal
quarter of the Company ending after the closing Date, and thereafter on
the first interest payment date which follows receipt by the Bank of the
Financial Statements upon which such adjustment is based (a "Quarterly
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Adjustment Date"), but no Quarterly Adjustment shall be effective as to
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any LIBOR-based Rate elected prior to the Quarterly Adjustment Date until
the expiration of the period of time for which such LIBOR-based Rate
shall have been elected by the Company.
(ii) New Acquisition Adjustments. For purposes of
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determining the Applicable Spread and the Applicable Unused
Commitment Fee, the Ratio of Total Funded Debt to EBITDA shall
be redetermined and adjusted as necessary on each New
Acquisition Closing Date on the basis of the Financial
Statements of the Company for the most recent twelve (12)
calendar month period that precedes the New Acquisition
Closing Date provided to the Bank pursuant to the requirements
of subsection 5.01(b) of this Agreement (a "New Acquisition
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Adjustment") with prospective effect until the next
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adjustment date, but no New Acquisition Adjustment shall be
effective as to any LIBOR-based Rate elected prior to the New
Acquisition Date until the expiration of the period of time
for which such LIBOR-based Rate shall have been elected by the
Company.
Notwithstanding the foregoing, in the event that the Company fails
to deliver when due the Financial Statements and compliance
certificates required under subsection 5.01(b) of this Agreement
for any month which ends a fiscal quarter of the Company and fails
to cure such default within ten (10) days after notice of such
default by the Bank, then the Applicable Unused Commitment Fee
Percentage and the Applicable Spread shall be adjusted (without
prior notice by the Bank to the Company) to the largest number
shown in the table applicable to such definition from such due date
until the first interest payment date which follows delivery to the
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Bank of such Financial Statements. It is noted that the tables
defining Applicable Unused Commitment Fee Percentage and the
Applicable Spread provide for a Ratio of Total Funded Debt to
EBITDA greater than that which may be permissible under the terms
of subsection 5.01(g) of this Agreement. For the avoidance of
doubt, it is agreed that it is the intent of the parties that the
Bank shall be free to exercise all remedies otherwise provided for
in this Agreement in the event of the violation by the Company as
stated in subsection 5.01(g) this Agreement, notwithstanding the
determination of the Applicable Unused Commitment Fee Percentage
and the Applicable Spread in accordance with and by reference to
this definition.
"Reimbursement Agreement" has the meaning ascribed to
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such term in subsection 2.03(a) of this Agreement.
"Reinvestment Rate" has the meaning ascribed to such
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term in the text of the definition of "Prepayment Premium" in this
Section.
"Related Business Entity" means an operating business
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entity, division or unit engaged in one or more lines of business
in which the Company is engaged as of the Closing Date, being the
packaging and wholesale distribution of industrial gas and welding,
propane and fire extinguishment equipment and supplies.
"Remaining Availability" means, at any time a
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determination thereof is to be made, that amount which results by
subtracting from the Maximum Availability the sum of (i) the
principal balance of the Revolving Loan outstanding at such time,
and (ii) the aggregate Letter of Credit Exposure at such time.
"Revolving Loan" has the meaning ascribed to such
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term in subsection 2.02(a) of this Agreement.
"Revolving Loan Maturity Date" means the earlier of
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(i) the Scheduled Revolving Loan Maturity Date, and (ii) that date
upon which the Bank accelerates payment of the Revolving Loan in
accordance with Section 7.02 of this Agreement.
"Revolving Note" has the meaning ascribed to such
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term in subsection 2.02(b) of this Agreement.
"Securities Commission" means the Securities and
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Exchange Commission or any other Federal agency from time to time
administering the Securities Act of 1933, as amended.
"Security Agreement" has the meaning ascribed to such
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term in Section 4.01 of this Agreement.
"Scheduled Revolving Loan Maturity Date" means the
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third (3rd) anniversary of the Closing Date.
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"Scheduled Term Loan Maturity Date" means the seventh
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(7th) anniversary of the Closing Date.
"Scheduled Term Loam Maturity Date" means any
---------------------------------
corporation, partnership, joint venture or other business entity
over which the Company exercises control, provided that it shall be
conclusively presumed that the Company exercises control over any
such entity 51% or more of the equity interest in which is owned by
the Company, directly or indirectly.
"Term Loan" has the meaning ascribed to such term in
---------
subsection 2.04 of this Agreement.
"Term Loan Maturity Date" means the earlier of (i)
-----------------------
the Scheduled Term Loan Maturity Date, and (ii) that date upon
which the Bank accelerates payment of the Term Loan in accordance
with Section 7.02 of this Agreement.
"Term Note" has the meaning ascribed to such term in
---------
subsection 2.04(b) of this Agreement.
"Total Funded Debt" means, as of the date any
-----------------
determination thereof is to be made, all interest-bearing Debt of
the Company and all Acquisition Seller Debt.
"Unmatured Event of Default" means any event
--------------------------
specified in Section 7.01 of this Agreement, which is not initially
an Event of Default, but which would, if uncured, become an Event
of Default with the giving of notice or the passage of time or
both.
"West Dividend" has the meaning ascribed to such term
-------------
in subsection 5.02(a)(3) of this Agreement.
ARTICLE II.
-----------
BORROWING TERMS
---------------
SECTION 2.01. GENERAL STATEMENT. Subject to and
------------ -----------------
in accordance with the terms of this Agreement, and in reliance
upon the representations, warranties, covenants and agreements of
the Company made in this Agreement and the other Loan Documents,
the Bank will make the Loans and issue the Letters of Credit
described in this Article II.
SECTION 2.02. THE REVOLVING LOAN.
------------ ------------------
(a) The Commitment -- Use of Proceeds. The Bank
---------------------------------
agrees, subject to the terms and conditions of this Agreement, to
make Advances to the Company on a revolving basis (the "Revolving
---------
Loan") from time to time from and after the Closing Date until
----
the Revolving Loan Maturity Date, in an amount not exceeding in the
aggregate at any time outstanding the Maximum Availability.
Proceeds of the Revolving Loan may be used by the Company only to
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fund working capital requirements, Capital Expenditures and New
Acquisitions and to refinance existing Debt of the Company.
(b) Method of Borrowing. The obligation of the
-------------------
Company to repay the Revolving Loan shall be evidenced by a
promissory note executed by the Company to the Bank in the form of
EXHIBIT E attached hereto (as the same may be amended, modified,
---------
extended, renewed, supplemented, replaced and/or restated from time
to time and at any time, the "Revolving Note"). So long as no Event of
--------------
Default or Unmatured Event of Default shall have occurred and be continuing
and until the Revolving Loan Maturity Date, the Company may borrow, repay
(subject to the requirements of Section 2.06 of this Agreement) under the
Revolving Note on any Banking Day, provided that Borrower shall not be
entitled to receive and the Bank shall not be obligated to make any
Advance: (i) at any time an Event of Default or an Unmatured Event
of Default has occurred or is continuing; (ii) if the amount of
such Advance would exceed the Remaining Availability; or (iii) if
after making such Advance the principal balance of the Revolving
Loan would exceed the Maximum Availability. Each Advance under the
Revolving Loan shall be conditioned upon receipt by the Bank from
the Company of an Application for Revolving Loan Advance and an
Officer's Certificate, provided that the Bank may, at its
discretion, make a disbursement upon the oral request of the
Company made by an Authorized Officer, or upon a request
transmitted to the Bank by telecopy or by any other form of written
electronic communication (all such requests for Advances being
hereafter referred to as "informal requests"). In so doing,
-----------------
the Bank may rely on any informal request which shall have been
received by it in good faith from a Person reasonably believed to
be an Authorized Officer. Each informal request shall be promptly
confirmed by a duly executed Application for a Revolving Loan
Advance and Officer's Certificate if the Bank so requires and shall
in and of itself constitute the representation of the Company that
no Event of Default or Unmatured Event of Default has occurred and
is continuing or would result from the making of the requested
Advance, that the requested Advance would not exceed the Remaining
Availability, and that the making of the requested Advance would
not cause the principal balance of the Revolving Loan to exceed the
Maximum Availability. All borrowings and reborrowings and all
repayments shall be in amounts of not less than Fifty Thousand
Dollars ($50,000), except for repayment of the entire principal
balance of the Revolving Loan and except for special prepayments of
principal required under the terms of Section 2.06 of this
Agreement. Upon receipt of an Application for a Revolving Loan
Advance, or at the Bank's discretion upon receipt of an informal
request for an Advance and upon compliance with any other
conditions of lending stated in Section 6.01 of this Agreement
applicable to the Revolving Loan, the Bank shall disburse the
amount of the requested Advance to the Company. All Advances by
the Bank and payments by the Company shall be recorded by the Bank
on its books and records, and the principal amount outstanding from
time to time, plus interest payable thereon, shall be determined by
14
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reference to the books and records of the Bank. The Bank's books
and records shall be presumed prima facie to be correct as
----- -----
to such matters.
(c) Interest on the Revolving Loan. The principal
------------------------------
amount of the Revolving Loan outstanding from time to time shall
bear interest until the Revolving Note Maturity Date at a rate per
annum equal to the Prime Rate plus the Applicable Spread;
provided that, at the option of the Company, exercised from
-------- ----
time to time as provided in subsection 2.05(a) of this Agreement,
interest may accrue prior to the Revolving Loan Maturity Date on
any Advance or on the entire outstanding balance of the Revolving
Loan as to which no LIBOR-based Rate previously elected remains in
effect, at a rate per annum equal to a LIBOR-based Rate for a
period of 30, 60, 90 or 180 days, plus the Applicable Spread.
Notwithstanding the foregoing, the Company will not be permitted to
elect an, LIBOR-based Rate for a period extending beyond the
Scheduled Revolving Loan Maturity Date. After the Revolving Loan
Maturity Date, and until paid in full, the principal amount of the
Revolving Loan shall bear interest at a per annum rate equal to the
Prime Rate plus Two Percent (2%). Accrued interest shall be due
and payable monthly on the last Banking Day of each calendar month
until the Revolving Loan Maturity Date, at which time the entire
unpaid principal balance of the Revolving Loan and all unpaid,
accrued interest thereon, shall be due and payable in full without
demand. After the Revolving Loan Maturity Date, interest shall be
payable as accrued and without demand.
(d) Extensions of Scheduled Revolving Loan Maturity
-----------------------------------------------
Date. The Bank may, upon the request of the Company, but at the
----
Bank's sole discretion, extend the Scheduled Revolving Loan
Maturity Date from time to time to such date or dates as the Bank
may elect by notice in writing to the Company, and upon any such
extension, the date to which the Scheduled Revolving Loan Maturity
Date is then extended will become the "Scheduled Revolving Loan
Maturity Date" for purposes of this Agreement. The Bank agrees to
respond within forty-five (45) days to a written request for an
extension of the Scheduled Revolving Loan Maturity Date made by the
Company in accordance with Section 8.02 of this Agreement and made
within one hundred eighty (180) days prior to the Scheduled
Revolving Loan Maturity Date, provided that any failure by the Bank
to respond within such period shall be deemed to be a denial of
such request unless otherwise agreed to in writing by the Bank.
(e) Facility Fee. In addition to interest accruing on
------------
the Revolving Loan, the Company shall pay to the Bank a facility
fee for each partial or full calendar quarter from and after the
Closing Date until the Revolving Loan Maturity Date equal to the
Applicable Unused Commitment Fee Percentage per annum on the daily
average "Unused Revolving Loan Commitment" (as hereinafter
defined). As used herein, the term "Unused Revolving Loan
---------------------
Commitment" means, as of the time of any determination thereof is
----------
to be made, the positive excess, if any, which results by
15
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subtracting from the Maximum Availability the sum of the then
outstanding principal amount of the Revolving Loan plus the then
existing aggregate Letter of Credit Exposure. Facility fees for
each calendar quarter shall be due and payable within ten (10) days
following the Bank's submission of a statement of the amount due.
Such fees may be debited by the Bank when due to any demand deposit
account of the Company carried with the Bank without further
authority.
SECTION 2.03. STANDBY LETTERS OF CREDIT.
------------
(a) Standby Letters of Credit -- General. At any
------------------------------------
time that the Company is entitled to an Advance under the Revolving
Loan, the Bank agrees, subject to the terms and conditions of this
Agreement, to issue upon the application of the Company and for the
account of the Company a standby letter of credit for the purpose
of supporting payment of all or any part of the Acquisition Seller
Debt or for any other general business purpose other than Credit
Enhancement (each a "Letter of Credit"), provided that:
---------------- -------- ----
(1) The aggregate Letter of Credit Exposure shall
not at any time exceed Fifteen Million Dollars ($15,000,000);
(2) The Company shall not request and the Bank
shall have no obligation to issue any Letter of Credit: (i) at
any time any Event of Default or Unmatured Event Default shall
have occurred and be continuing; (ii) at any time after the
Revolving Loan Maturity Date; (iii) if, after giving effect to
such issuance, the aggregate Letter of Credit Exposure would
exceed Fifteen Million Dollars ($15,000,000); (iv), if the
face amount of such Letter of Credit would exceed the
Remaining Availability; or (v) for any purpose than to secure
payment of all or any part of the Acquisition Seller Debt;
(3) The Bank in no event shall be obligated to
issue any Letter of Credit: (i) having an expiration date
later than seven (7) years and thirty (30) days from the date
of issuance; or (ii) if the issuance of such Letter of Credit
on the terms requested would be contrary to, or in violation
of the policies of the Bank or any requirement of applicable
law;
(4) The form of the requested Letter of Credit
shall be satisfactory to the Bank in the reasonable exercise
of the Bank's discretion; and
(5) The Bank shall have received from the Company
an application and reimbursement agreement for the Letter of
Credit in form and substance satisfactory to the Bank in all
respects (as the same may be amended, modified, extended,
renewed, supplemented, replaced and/or restated from time to
time and at any time, "Reimbursement Agreement"), duly
-----------------------
executed by an Authorized officer.
16
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(b) Letter of Credit Procedures. Whenever the
---------------------------
Company desires the issuance of a Letter of Credit, it shall
deliver to the Bank not later than 11:30 a.m. (Indianapolis time)
at least three Banking Days (or such shorter period as may be
agreed to by the Bank in any particular instance) in advance of the
proposed date of issuance a Reimbursement Agreement duly executed
by an Authorized Officer. Each Reimbursement Agreement shall
include a precise description of the documents and the verbatim
text of any certificate to be presented by the proposed beneficiary
with, or as a part of any Draft; provided that the Bank, in its
sole judgment, may require changes in the description of any such
documents and the text of such certificates; and provided further
that, at the discretion of the Bank, each Letter of Credit shall
provide that payment against a conforming Draft is not required to
be made thereunder prior to the close of business on the third
Banking Day following presentment of such Draft.
(c) Draws under Letters of Credit. Upon
-----------------------------
presentation of a Draft under any Letter of Credit by the
beneficiary thereof, the Bank shall notify the Company of the
receipt thereof ("Draft Notice") not later than one Banking Day
prior to the date on which the Bank intends to honor such Draft.
The Draft Notice may be given by telephone or telecopy. Failure to
give the Draft Notice or to give the Draft Notice in a timely
manner shall not in any way affect or limit the payment obligation
of the Company hereunder. Upon receipt of the Draft Notice, the
Company shall make or cause to be made an irrevocable deposit with
the Bank not later than 1:00 p.m., Indianapolis time, one (1)
Banking Day prior to the day on which the Draft is to be honored,
in an amount equal to the full amount which is to be paid under
such Draft, in good and collected funds (the "Reimbursement
-------------
Amount"), specifying that it is depositing such money for the
------
sole purpose of funding the payment of such Draft.
In determining whether to honor any Draft, the Bank shall
be responsible only to determine that the documents and
certificates required to be delivered with such Draft under the
appropriate Letter of Credit have been delivered and that on their
faces they are in substantial compliance with the requirements of
that Letter of Credit. In the event of any conflict between the
terms of any Reimbursement Agreement and the terms of this
Agreement, the terms of this Agreement shall control; and the terms
of a Reimbursement Agreement shall not be deemed to be in conflict
with the terms of this Agreement solely by reason of the fact that
it addresses one or more subject matters that are addressed by this
Agreement and contains provisions that are different from those set
forth in this Agreement.
(d) Reimbursement Obligations of the Company. The
----------------------------------------
Company hereby agrees to reimburse the Bank, on demand, the amount
paid by the Bank to settle its obligations in respect of each Draft
under each Letter of Credit (whether such amount is paid by virtue
of the Bank's honor of any Draft or otherwise) to the extent that
17
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a Reimbursement Amount is not available to the Bank for that
purpose, which reimbursement obligation shall be immediate and
automatic, without the necessity of any further act or the
execution of any additional document, instrument, or agreement.
Any Reimbursement Amount that is not paid in full when due shall be
deemed to be and shall constitute a demand loan made to the Company
by the Bank on such due date in the principal amount of the unpaid
Reimbursement Amount (each such loan being referred to herein as a
"Letter of Credit Loan", and collectively as "Letter of
--------------------- --------
Credit Loans", which Letter of Credit Loans shall bear interest,
------------
until paid in full, at a per annum rate equal to the Prime Rate
plus Two Percent (2%). A demand for payment of each Reimbursement
Amount and Letter of Credit Loan shall be deemed to have been made
by the Bank on the date of the corresponding payment by the Bank to
settle its obligations under a Draft. Nothing herein is intended
to preclude the Company from requesting an Advance to the extent
available under the Revolving Loan to pay any Reimbursement Amount.
The obligation of the Company to reimburse the Bank in
respect of drawings made under the Letters of Credit shall be
unconditional and irrevocable and Shall be paid strictly in
accordance with the terms of this Agreement and the applicable
Reimbursement Agreement (if and to extent the terms of such
Reimbursement Agreement do not conflict with this Agreement) under
all circumstances, and notwithstanding any of the following
circumstances:
(1) any lack of validity or enforceability of any
Letter of Credit;
(2) the existence of any claim, set-off, defense or
other right which the Company may have at any time against a
beneficiary or any transferee of any Letter of Credit or (or
any Persons for whom any such transferee may be acting), or
any other Person, whether in connection with this Agreement,
the transactions contemplated herein or any unrelated
transaction (including any underlying transaction between the
Company and the beneficiary of any Letter of Credit;
(3) any draft, demand, certificate or any 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;
(4) payment by the Bank 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;
(5) any other circumstance or happening whatsoever
which is similar to any of the foregoing; or
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(6) the fact that an event of Default or Unmatured
Event of Default shall have occurred and be continuing;
provided however, that the Company shall not be obligated
-------- -------
to reimburse the Bank for any wrongful payment or disbursement made
or to be made by the Bank under any Letter of Credit as a result of
acts or omissions constituting gross negligence or willful
misconduct on the part of the Bank. Payment of a Draft that does
not comply with the terms of the Letter of Credit against which it
is presented shall not in any event be deemed to be wrongful or an
act or omission constituting gross negligence or willful misconduct
on the part of the Bank if such payment is made at the specific
written request of the Company in which the Company waives the
noncompliance of the Draft.
Upon a written request by the Company made in accordance
with the terms of Section 8.02 of this Agreement, the Bank will
undertake to provide to the Company copies of all instruments and
documents constituting a Draft with the Draft Notice, and in the
event the Company has any knowledge (however obtained) of any claim
of noncompliance with the Company's instructions or with the terms
of the Letter of Credit, or of discrepancies or other
irregularities, the Company shall immediately notify the Bank
thereof in writing, and the Company shall be deemed to have waived
any such claim or defense against the Bank related thereto or
arising therefrom unless such notice is given. The Company shall
be deemed to have knowledge of any such claim that is apparent on
the face of copies of instruments and documents constituting a
Draft that are provided to the Company pursuant to the preceding
sentence.
Unless specified to the contrary in the Reimbursement
Agreement for a Letter of Credit, or any amendment to a Letter of
Credit, the Company agrees that the Bank and its correspondents may
receive and accept any Draft drawn or presented under such Letter
of Credit or other document otherwise in order, issued or
purportedly issued by an agent, (executor, trustee in bankruptcy,
receiver or other representative of the party who is authorized
under such Letter of Credit to issue such Draft or other document,
as complying with the terms of such Letter of Credit.
Indemnity. The Company agrees to protect, indemnify
---------
and save the Bank harmless from and against any and all claims,
demands, liabilities, damages, losses, costs, charges and expenses
(including reasonable attorneys, fees and allocated costs of
internal counsel) which the Bank may incur or be subject to as a
consequence, direct or indirect, of (a) the issuance of the Letters
of Credit, other than as a result of the negligence or willful
misconduct of the Bank, as determined by a court of competent
jurisdiction, or (b) the failure of the Bank to honor a drawing
under any Letter of Credit as a result of any act or omission,
whether rightful or wrongful, of any present or future de jure or
19
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de facto government or governmental authority (all such acts
--------
or omissions herein called "Government Acts") .
---------------
As between the Company, on the one hand, and the Bank, on
the other, the Company assume 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 Bank shall not be responsible and
shall have no liability (a) for the form, validity, sufficiency,
accuracy, genuineness or legal effect of any document submitted by
any party in connection with the application for and issuance of
such Letters of Credit, even if it should in fact prove to be in
any or all respects invalid, insufficient, inaccurate, fraudulent
or forged; (b) for 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; (c) for failure of the
beneficiary of any such Letter of Credit to comply fully with the
terms and conditions of the agreements pursuant to which the Letter
of Credit was procured and pursuant to which the beneficiary is
entitled to draw upon such Letter of Credit; (d) for 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; (e) for errors in interpretation
of technical terms; (f) for any loss or delay in the transmission
or otherwise of any document required in order to make a Draft
under any such Letter of Credit or of the proceeds thereof; (g) for
the misapplication by the beneficiary of any such Letter of Credit
of the proceeds of any Draft under such Letter of Credit; (h) for
any consequences arising from causes beyond the control of the
Bank, including, without limitation, any Government Acts; and (i)
for any action taken or omitted by the Bank under or in connection
with the Letters of Credit, if taken or omitted in good faith.
None of the above shall affect, impair, or prevent the vesting of
any of the Bank's rights or powers hereunder.
Following the occurrence of an Event of Default or an
Unmatured Event of Default which is continuing, the Company agrees
that any action taken by the Bank, if taken in good faith, under or
in connection with any of the Letters of Credit, Reimbursement
Agreements and Drafts, shall be binding on the Company, and shall
not subject the Bank to any resulting liability to the Company. In
furtherance thereof, the Bank shall have the full right and
authority, following an Event of Default or Unmatured Event of
Default which is continuing, to (i) clear and resolve any questions
of noncompliance of documents, (ii) to give any instructions as to
acceptance or rejection of any documents or goods, and (iii) to
grant any extensions of the maturity of time of payment for, or
time of presentation of, any drafts, acceptances, or documents.
(e) Letter of Credit Fees. The Company covenants
---------------------
and agrees to pay to the Bank, on the date each Letter of Credit is
20
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issued, and on each anniversary of the issue date for as long as
the Letter of Credit is outstanding, a commission equal to the
"Applicable LOC Fee Percentage", (as hereinafter defined) times the
maximum amount available to be drawn under the Letter of Credit as
of the date such commission is due. As used herein, the term
Applicable LOC Fee Percentage means, with respect to any Letter
-----------------------------
of Credit (i) One-Half Percent (0.5%), if the reimbursement
obligation of the Company to the Bank under the Reimbursement
Agreement and this Agreement for such Letter of Credit is fully
secured by Cash Collateral, and (ii) Three-Quarters Percent
(0.75%), if the reimbursement obligation of the Company to the Bank
under the Reimbursement Agreement and this Agreement for such
Letter of Credit is not fully secured by Cash Collateral. The
commission shall be deemed fully earned and nonrefundable when due.
The Company shall pay the Bank's standard transaction fees with
respect to any transactions occurring on account of any Letter of
Credit. Transaction fees shall be payable upon completion of the
transaction as to which they are charged. All such commissions and
fees may be debited by the Bank to any deposit account of the
Company carried with the Bank without further authority, and in any
event, shall be paid by the Company within ten (10) days following
billing.
SECTION 2.04. THE TERM LOAN.
------------ -------------
(a) The Term Loan -- General. The Bank agrees,
------------------------
subject to the terms and conditions of this Agreement, to loan to
the Company the principal amount of Thirteen Million Dollars
($13,000,000.00) for the term period beginning on the Closing Date
and ending on the Term Loan Maturity Date (the "Term Loan").
(b) The Term Note. The obligation of the Company to
-------------
repay the Term Loan shall be evidenced by a promissory, note
executed by the Company to the Bank in the form of EXHIBIT F
---------
attached hereto (as the same may be amended, modified, extended,
renewed, supplemented, replaced and/or restated from time to time
and at any time, the "Term Note"). The principal of the Term
---------
Loan shall be repayable in equal monthly installments of
$154,761.90 each, which monthly installments shall be due and
payable on the last Banking Day of October, 1996, and on the last
Banking Day of each successive calendar month thereafter until the
Term Loan Maturity Date, at which time the entire principal balance
of the Term Loan and all unpaid, accrued interest thereon, shall be
due and payable in full without demand. Subject to the
contemporaneous payment of any Prepayment Premium which would
become due on account of any proposed prepayment, the principal of
the Term Loan may be prepaid at any time in whole or in part,
provided that any partial prepayment shall be in an amount which is
an integral multiple of Fifty Thousand Dollars ($50,000) and
provided further that all partial prepayments shall be applied to
the latest maturing installments of principal payable under the
Term Loan in inverse order of maturity.
21
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(c) Interest on the Term Loan. The principal
-------------------------
balance of the Term Loan outstanding from time to time shall bear
interest from the Closing Date until the Term Loan Maturity Date at
a rate per annum equal to the Prime Rate plus the Applicable
Spread, provided that, at the option of the Company exercised
-------- ----
from time to time as provided in subsection 2.05(a) of this Agreement,
interest may accrue prior to the Term Loan Maturity Date on the entire
outstanding balance of the Term Loan or on any portion thereof as to which no
LIBOR-based Rate previously selected remains in effect at a rate per annum
equal to a LIBOR-based Rate for a period of 30, 60, 90 or 180 days, plus the
Applicable Spread. The Company will not be permitted to elect any LIBOR-based
Rate for a period extending beyond the Scheduled Term Loan Maturity Date.
After the Term Loan Maturity Date, interest will accrue on the Term Loan at a
rate per annum equal to the Prime Rate plus Two Percent (2%). Prior to the
Term Loan Maturity Date, interest shall be due and payable on the last Banking
Day of each month in addition to the installments of principal due on such
dates. After the Term Loan Maturity Date, interest shall be payable as
accrued and without demand.
(d) Use of Proceeds of the Term Loan. The proceeds
--------------------------------
of the Term Loan shall be used in their entirety to refinance
existing Debt of the Company.
SECTION 2.05. Provisions Applicable to Both of the Loans.
------------ ------------------------------------------
The following provisions are applicable to both of the Loans:
(a) Procedures for Electing LIBOR-based Rates -- Certain
----------------------------------------------------
Effects of Election. LIBOR-based Rates may be elected only in
-------------------
accordance with the following procedures, shall be subject to the following
conditions, and the election of a LIBOR-based Rate shall have the following
consequences in addition to other consequences stated in this Agreement:
(1) The LIBOR-base Rate may be elected only for
Loans or portions of Loans in a minimum amount of
$1,000,000.00. No more than five (5) LIBOR-based Rate
elections may be in effect under a Loan at any one time.
(2) No LIBOR-based Rate may be elected at any time
that an Event of Default or Unmatured Event of Default has
occurred and is continuing.
(3) Voluntary prepayment prior to scheduled
maturity of all or any portion of a Loan on which interest is
accruing at a LIBOR-based Rate shall be subject to
contemporaneous payment of the Prepayment Premium if, at the
time of prepayment, the Reinvestment Rate is less than the
LIBOR-based Rate at which interest accrues on the Loan. A
Prepayment Premium shall also be due and payable on prepayment
of all or any portion of either Loan prior to scheduled
22
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maturity because of acceleration of maturity on account of an
Event of Default if, at the time of acceleration of maturity,
the Reinvestment Rate is less than the LIBOR-based Rate at
which interest is accruing on the Loan. If any portion of the
principal balance of the Revolving Loan is required to be
prepaid in order to reduce the balance of the Revolving Loan
on account of the requirement of Section 2.06 of this
Agreement, and while interest is accruing on such portion at
a LIBOR-based Rate, then a Prepayment Premium shall be due and
payable in addition to the principal amount required to be
prepaid, if, at the time such principal payment is required,
Reinvestment Rate is less than the LIBOR-based Rate at which
interest is accruing on such portion of the Loan. If at the
time of any voluntary or mandatory prepayment of any portion
of the principal of any Loan, interest accrues at both a
LIBOR-based Rate or Rates and at a Prime-based Rate on
portions of the Loan, then any prepayment of principal will be
applied first to the portion of the Loan on which interest
accrues at the Prime-based Rate and next to the portion or
portions at which interest accrues at a LIBOR-based Rate or
Rates, and if interest accrues on the Loan at more than one
LIBOR-based Rate, first to that portion or those portions on
which interest accrues at a Rate or Rates which results in no
Prepayment Premium or the lowest Prepayment Premium or
Premiums.
(4) On any Banking Day, the Company may request a
quotation of the LIBOR-based Rates then in effect from the
Bank. As soon as possible, and in any event before the close
of business on the next following Banking Day, the Bank shall
quote such LIBOR-based Rates. The Company shall then have
until the end of the Banking Day on which such quotation is
given or within such shorter time as the Bank may specify, to
exercise its option to elect any LIBOR-based Rate quoted,
subject to all other conditions and limitations stated in this
Agreement. The period for which any LIBOR-based Rate is
effective shall begin on the second Banking Day following the
day on which the quotation is given.
(5) An election of a LIBOR-based Rate may be
communicated to the Bank on behalf of the Company only by an
Authorized Officer. Such election may be communicated by
telephone or by telecopy or any other form of written
electronic communication, or by a writing delivered to the
Bank. At the request of the Bank, the Company shall confirm
any election in writing and such written confirmation shall be
signed by an Authorized Officer. The Bank shall be entitled
to rely on any oral or written electronic communication of an
election of a LIBOR-based Rate which is received by an
appropriate Bank employee from anyone reasonably believed in
good faith by such employee to be an Authorized Officer.
23
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(6) The Bank may elect not to quote a LIBOR-based
Rate (the "Unavailable LIBOR-based Rate") to any of its
customers otherwise eligible for the Unavailable LIBOR-based
Rate on any day (the "Unavailability Date") on which the Bank
has determined that it is not practical to quote the
Unavailable LIBOR-based Rate because of the unavailability of
sufficient funds to the Bank for appropriate terms at rates
approximating the then relevant London Interbank Offered Rate,
or because of legal or regulatory changes which make it
impractical or burdensome for the Bank to lend money at the
Unavailable LIBOR-based Rate. In such event, and provided
that no Event of Default or Unmatured Event of Default has
occurred and is continuing, the Company shall be entitled by
written notice given to the Bank within ten (10) days of the
Unavailability Date to continue the LIBOR-based Rate or Rates
then accruing on any portion or portions of the Loans
(regardless of when the such LIBOR-based Rate or Rates
otherwise are scheduled to expire), until the earlier of (i)
that date which is ninety (90) days after the Unavailability
Date, (ii) that date upon which the Bank resumes quoting the
Unavailable LIBOR-based Rate; and (iii) the occurrence of an
Event of Default or Unmatured Event of Default.
(7) If, as a result of any regulatory change, the
basis of taxation of payments to the Bank of the principal of
or any interest on any Loan bearing interest at a LIBOR-based
Rate or any other amounts payable hereunder in respect
thereof, other than taxes imposed on the overall net income of
the Bank, is changed, or any reserve, special deposit, or
similar requirement relating to any extensions of credit or
other assets of or any deposits with or other liabilities of
the Bank are imposed, modified, or deemed applicable, and the
Bank reasonably determines that, by reason thereof, the cost
to it of making, issuing, or maintaining any Loan at a LIBOR-
based Rate is increased by an amount deemed by it to be
material, then the Company shall pay promptly upon demand to
the Bank such additional amounts as the Bank reasonably
determines will compensate for such increased costs
("Increased Costs"); provided, however, that (i) the Bank
shall give the Company ninety (90) days' prior written notice
of the Bank's intention to collect Increased Costs from the
Company ("Increased Cost Notice"), and the Bank shall not be
entitled to pass-through to or collect from the Company
Increased Costs incurred by the Bank prior to that date which
is the ninetieth (90th) day after the delivery of the
Increased Cost Notice to the Company by the Bank, and (ii) the
Company shall not be the only borrower of the Bank that is
singled out from a group of similarly situated borrowers of
the Bank subject to this type of provision that is requested
to remit Increased Costs. Any determination by the Bank of
Increased Costs made pursuant to the provisions of this
section shall be final, absent manifest error.
24
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(b) Calculation of Interest. Interest on each of
-----------------------
the Loans shall be calculated on the basis that an entire year's
interest is earned in 360 days.
(c) Manner of Payment - Application. All payments
-------------------------------
of principal and interest on the Loans shall be payable at the
principal office of the Bank in Indianapolis, Indiana, in funds
available for the Bank's immediate use in that city and no payment
will be considered to have been made until received in such funds.
All payments received on account of either of the Loans will be
applied (i) first, to any expenses of collection, (ii) next, to any
late payment fees which are due and payable and other outstanding
Obligations other than principal and interest, (iv) next, to
interest which is due and payable, and (v) next, to principal.
(d) Commitment Fee. The Bank acknowledges receipt
--------------
from the Company of the sum of $10,000 prior to the Closing Date in
partial payment of the $32,500 commitment fee charged by the Bank
for its commitment to make the Term Loan. The unpaid $22,500
balance of such commitment fee shall be paid by the Company to the
Bank at or prior to the execution of this Agreement.
(e) Automatic Debit. The Bank may debit when due
---------------
all payments of principal and interest due under the terms of this
Agreement to any deposit account of the Company carried with the
Bank without further authority.
SECTION 2.06. Mandatory Prepayment. If at any
------------ --------------------
time a determination thereof is to be made, the sum of (a) the
principal balance of the Revolving Loan outstanding at such time,
plus (b) the aggregate Letter of Credit Exposure existing at
----
such time, exceeds the Maximum Availability, the Company shall
immediately repay the Revolving Note in an aggregate principal
amount, together with such additional amount as may be necessary,
equal to such excess. If an Event of Default or an Unmatured Event
of Default has occurred and is continuing and the Bank shall have
notified the Company of its election to take any action specified
in Section 7.02 of this Agreement, the Maximum Availability shall
be automatically reduced to $0 without any action on the part of or
the giving of notice to the Company by the Bank.
ARTICLE III.
------------
REPRESENTATIONS AND WARRANTIES
------------------------------
SECTION 3.01. REPRESENTATIONS AND WARRANTIES. To
------------
induce the Bank to make the Loans, the Company represents and
warrants to the Bank that:
(a) Organization of Company. The Company is a
-----------------------
corporation organized, existing and in good standing under the laws
of the State of West Virginia. The Company is qualified to do
25
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business in every jurisdiction in which: (i) the nature of the
business conducted or the character or location of properties owned
or leased, or the residences or activities of employees make such
qualification necessary, and (ii) failure so to qualify might
impair the title of the Company to material properties or the
Company's right to enforce material contracts or result in exposure
of the Company to liability for material penalties in such
jurisdiction. No jurisdiction in which the Company is not
qualified to do business has asserted that the Company is required
to be qualified therein. The principal office and chief executive
office of the Company is located at 00 00xx Xxxxxx, Xxxxxxxx, Xxxx
Xxxxxxxx 00000-0000. The Company does not conduct any material
operations or keep any material amounts of property at any location
other than the locations specified in the Security Agreement. The
Company has not done business under any name other than its present
corporate name at any time during the six years preceding the date
of this Agreement except as disclosed in the Security Agreement.
(b) Authorization; No Conflict. The execution and
--------------------------
delivery of this Agreement, the borrowings hereunder, the execution
and delivery of all of the other Loan Documents and the performance
by the Company of its obligations under this Agreement and all of
the other Loan Documents are within the Company's corporate powers,
have been duly authorized by all necessary corporate action, have
received any required governmental or regulatory agency approvals
and do not and will not contravene or conflict with any provision
of law or of the articles of incorporation or bylaws of the Company
or of any agreement binding upon the Company or its properties.
(c) Validity and Binding Nature. This Agreement and
---------------------------
all of the other Loan Documents are the legal, valid and binding
obligations of the Company, enforceable against the Company in
accordance with their respective terms, except to the extent that
enforcement thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium and other laws enacted for the relief of
debtors generally and other similar laws affecting the enforcement
of creditors, rights generally or by equitable principles which may
affect the availability of specific performance and other equitable
remedies.
(d) Financial Statements. (i) The Company has
--------------------
delivered to the Bank its audited Financial Statements as of June
30, 1996, and for the fiscal year of the Company then ended and its
unaudited interim Financial Statements as of August 31, 1996, and
for the month and partial fiscal year then ended, which Financial
Statements have been prepared in accordance with GAAP except, as to
the interim statements, for the absence of a statement of cash
flows, footnotes and adjustments normally made at year end which
are not material in amount. Such Financial Statements present
fairly the financial position of the Company as of the dates
thereof and the results of its operations for the periods covered.
(ii) Since the date of the most current Financial Statement
provided by the Company to the Bank there has been no material
26
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adverse change in the financial position of the Company or in the
results of its operations.
(e) Litigation and Contingent Liability. No
-----------------------------------
litigation, arbitration proceedings or governmental proceedings are
pending or to the best of the Company's knowledge threatened
against the Company which would, if adversely determined,
materially and adversely affect its financial position or
continued operations. The Company has no material contingent
liabilities not provided for or disclosed in the Financial
Statements referred to in subsection 3.01(d) of this Agreement or
on EXHIBIT G attached hereto.
---------
(f) Liens. None of the assets of the Company are
-----
subject to any mortgage, pledge, title retention lien, or other
lien, encumbrance or security interest except for liens and
security interests described in subsections 5.02(b)(1) through (7)
of this Agreement.
(g) Employee Benefit Plans. Each Plan maintained by
----------------------
the Company is in material compliance with ERISA, the Code, and all
applicable rules and regulations adopted by regulatory authorities
pursuant thereto, and the Company has filed all reports and returns
required to be filed by ERISA, the Code and such rules and
regulations. No Plan maintained by the Company and no trust
created under any such Plan has incurred any "accumulated funding
deficiency" within the meaning of Section 412(c)(l) of the Code,
and the present value of all benefits vested under each Plan did
not exceed, as of the last annual valuation date, the value of the
assets of the respective Plans allocable to such vested benefits.
The Company has no knowledge that any "reportable event" as defined
in ERISA has occurred with respect to any Plan.
(h) Payment of Taxes. The Company has filed all
----------------
federal, state and local tax returns and tax related reports which
the Company is required to file by any statute or regulation and
all taxes and any tax related interest payments and penalties that
are due and payable have been paid, except for such as are being
contested in good faith and by appropriate proceedings and as to
which appropriate reserves have been established. Adequate
provision has been made for the payment when due of all tax
liabilities which have been incurred, but are not as yet due and
payable.
(i) Investment Company Act. Company is not an
----------------------
"investment company" or a company "controlled" by an "investment
company" within the meaning of the Investment Company Act of 1940,
as amended.
(j) Regulation U. The Company is not engaged
------------
principally, or as one of its important activities, in the business
of extending credit for the purpose of purchasing or carrying
margin stock within the meaning of Regulation U of the Board of
Governors of the Federal Reserve System. Not more than twenty-five
27
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percent (25%) of the assets of the Company consists of margin
stock, within the contemplation of Regulation U, as amended.
(k) Hazardous Substances. Except as disclosed on
--------------------
EXHIBIT H attached hereto, to the best knowledge of the Company
---------
(i) no premises owned or occupied by or under lease to any Company
have ever been used, and as of the date of this Agreement, no such
premises are being used for any activities involving the use,
treatment, transportation, generation, storage or disposal of any
Hazardous Substances except in compliance with Environmental Laws,
and (ii) no Hazardous Substances have been released on any such
premises in violation of any Environmental Law, nor is there any
threat of release of any Hazardous Substances on any such premises.
(l) Subsidiaries. The Company has no Subsidiaries
------------
as of the date of this Agreement.
(m) Existing Seller Acquisition Debt. The nature
--------------------------------
and outstanding balances of the Existing Seller Acquisition Debt
identified on EXHIBIT C attached hereto is true and accurate in
---------
all respects and the Company is not in default with respect to any
of the Existing Acquisition Seller Debt.
(n) Real Estate Leases. The Company is not in
------------------
default under any of its leases of real estate.
ARTICLE IV.
-----------
SECURITY FOR OBLIGATIONS
------------------------
SECTION 4.01. COLLATERAL FOR THE OBLIGATIONS. The
------------
Obligations will be secured by a security interest in all personal
property of the Company, tangible and intangible, now owned and
existing or hereafter acquired or arising, including, without
limitation, all equipment, inventory, accounts receivable and
general intangibles and all proceeds thereof, which security
interest will be created by a Security Agreement (as the same may
be amended, modified, extended, renewed, supplemented, replaced
and/or restated from time to time and at any time, the "Security
--------
Agreement") in the form attached as EXHIBIT I. The Security
--------- ---------
Agreement will provide security interests in the collateral
described therein subject only to liens and security interests
described in the exceptions enumerated in subsections 5.02(b)(1)
through (7) of this Agreement. In the event the Company owns or
acquires tangible or intangible personal property that the Bank
deems is or may not be covered as collateral by the Security
Agreement or in which the Bank deems its security interest therein
is or may not be perfected, the Company covenants and agrees
promptly upon the request of the Bank to execute such other
security instruments and documents and take such other actions as
the Bank may require to grant to the Bank a perfected security
interest therein, all of which security instruments and documents
28
29
shall be in form and substance satisfactory to the Bank in all
respects.
Upon request by the Bank, the Company, covenants and
agrees, within ten (10) days after receiving such request, to grant
to the Bank as security for the Obligations security interests and
liens on all real estate and improvements, including all fixtures,
equipment, furnishings, systems, and related Property located
thereon (collectively, the "Real Estate") now owned or hereafter
acquired and owned by the Company for a period of 90 consecutive
days, including all proceeds thereof, pursuant to real estate
mortgages or deeds of trust in form and substance satisfactory to
the Bank in all respects duly executed, acknowledged and delivered
to the Bank in recordable form. Upon request by the Bank, the
Company covenants and agrees, within ten (10) days after receiving
such request, to grant to the Bank security interest and lien in
and to all of the Company's right, title and interest in any Real
Estate as a lessee thereof pursuant to leasehold mortgages or deeds
of trust in form and substance satisfactory to the Bank in all
respects duly executed, acknowledged and delivered to the Bank in
recordable form. The Company further covenants and agrees to
provide to the Bank at or prior to the execution and delivery of
any real estate mortgages or deeds of trust or leasehold mortgages
or deeds of trust, at the Company's expense: (i) evidence
satisfactory to the Bank showing, in the case of owned Real Estate,
that such Real Estate is owned in fee simple by the Company free
and clear of all liens, encumbrances and exceptions which are not
acceptable to the Bank, and in the case of leased Real Estate,
showing the Company leasehold interest therein; and (ii) a Phase I
environmental assessment (and where reasonably deemed appropriate
by the Bank based upon information disclosed in such assessment, a
Phase II environmental assessment) prepared by a registered
engineer or environmental consultant acceptable to the Bank
confirming there are no material environmental problems associated
with such Real Estate.
ARTICLE V.
----------
AFFIRMATIVE AND
NEGATIVE COVENANTS OF BORROWER
------------------------------
SECTION 5.01. AFFIRMATIVE COVENANTS OF THE COMPANY.
------------
Until all Obligations of the Company terminate or are paid and
satisfied in full, and for so long as Borrower is entitled to
receive any Advance or any Letter of Credit Exposure exists, the
Company shall strictly observe the following covenants:
(a) Corporate Existence. The Company shall preserve
-------------------
its corporate existence.
29
30
(b) Reports, Certificates and Other Information.
-------------------------------------------
The Company shall furnish to the Bank copies of the following
Financial Statements, certificates and other information:
(1) Annual Statements. As soon as available
-----------------
and in any event within one hundred and twenty (120) days
after the close of each fiscal year of the Company, annual
audited Financial Statements for the Company, audited by the
Company's Auditors, showing its financial condition and
results of operations as at the close of such fiscal year and
for such fiscal year, all prepared in accordance with GAAP,
accompanied by an opinion of the Company's Auditors, which
opinion shall be without Qualification and shall state that
such audited Financial Statements present fairly the financial
position of the Company as of the date of such Financial
Statements and the results of its operations and changes in
its financial position for the period covered thereby, and
that their examination in connection with such Financial
Statements has been made in accordance with GAAP.
(2) Interim Monthly Statements. As soon as
--------------------------
available and in any event within thirty (30) days after the
end of each calendar month ending after the Closing Date
(other than a calendar month which ends a fiscal quarter of
the Company), unaudited Financial Statements showing its
financial condition and results of operations as at, and for
such calendar month and year-to-date, all in reasonable
detail, and certified to the Bank by the Company's President,
Chief Financial Officer, or Treasurer, together with
comparable prior year-to-date Financial Statements as at the
end of same calendar month of the prior year;
(3) Interim Quarterly Statements. As soon as
----------------------------
available and in any event within forty-five (45) days after
the close of each fiscal quarter of the Company ending after
the Closing Date, unaudited Financial Statements showing its
financial condition and results of operations as at, and for
such fiscal quarter and year-to-date, all in reasonable
detail, prepared in accordance with GAAP (except that footnote
disclosures normally included in Financial Statements prepared
in accordance with GAAP may be condensed or omitted if and to
the extent such condensation or omission is consistent with
past practices of the Company, and if the information so
omitted is not necessary for a fair presentation of the
results for such fiscal quarter), and certified to the Bank by
the Company's President, Chief Financial Officer, or
Treasurer, together with comparable prior year-to-date
Financial Statements as at the end of same fiscal quarter of
the prior year;
(4) Certificates. Contemporaneously with the
------------
furnishing of each set of Financial Statements provided for in
30
31
subsections 5.01(b)(1) and (2) of this Agreement, an Officer's
Certificate.
(5) Orders. Prompt notice of any orders in any
------
material proceedings to which the Company is a party, issued
by any court or regulatory agency, federal or state, and if
the Bank should so request, a copy of any such order.
(6) Notice of Default or Litigation.
-------------------------------
Immediately upon learning of the occurrence of an Event of
Default or Unmatured Event of Default, or the institution of
or any adverse determination in any litigation, arbitration
proceeding or governmental proceeding which is material to the
Company, or the occurrence of any event which could have a
material adverse effect upon the Company, written notice
thereof describing the same and the steps being taken with
respect thereto.
(7) Compliance Certificates. Within forty-five
-----------------------
(45) days after the end of each calendar month ending after
the Closing Date that is also the end of a calendar quarter,
a certificate of the Chief Financial officer or other
appropriate officer of the Company demonstrating compliance
with the financial covenants stated in subsection 5.01(g) of
this Agreement and compliance with the covenant limiting
capital expenditures of the Company stated in subsection
5.02(k) of this Agreement. Such certificate shall relate the
covenants to the month-end figures and shall otherwise be in
such form and provide such detail as may be reasonably
satisfactory to the Bank.
(8) Registration Statements and Reports.
-----------------------------------
Promptly upon filing with the Securities Commission or any
state securities regulatory authority, copies of all
registration statements and all periodic and special reports
required or permitted to be filed under federal or state
securities laws and regulations.
(9) Other Information. From time to time such
-----------------
other information concerning the Company as the Bank may
reasonably request.
(c) Books, Records and Inspections. The Company
------------------------------
shall maintain complete and accurate books and records, and permit
access thereto by the Bank for purposes of inspection, copying and
audit, and the Company shall permit the Bank to inspect its
properties and operations at all reasonable times.
(d) Insurance. In addition to any insurance
---------
required by any other Loan Documents, the Company shall maintain
such insurance as may be required by law and such other insurance,
to such extent and against such hazards and liabilities, as is
customarily maintained by companies similarly situated. The
Company agrees to
31
32
name the Bank as additional insured and lender's loss payee on any such
insurance policy under a standard lender's loss payable clause and to provide
a copy of any such policy to the Bank.
(e) Taxes and Liabilities. The Company shall pay
---------------------
when due all taxes, license fees, assessments and other liabilities
except such as are being contested in good faith and by appropriate
proceedings and for which appropriate reserves have been
established.
(f) Compliance with Legal and Regulatory Requirements.
-------------------------------------------------
The Company shall maintain material compliance with the applicable provisions
of all federal, state and local statutes, ordinances and regulations and any
court orders or orders of regulatory authorities issued thereunder.
(g) Financial Covenants. The Company shall observe
-------------------
each of the following financial covenants:
(1) Net Worth. The Company shall at all times
---------
from and after the Closing Date maintain its Net Worth at a
level not less than (i) Ninety-Five Percent (95%) of its Net
Worth as at the end of the calendar month in which the Closing
Date occurs, (ii) Forty Percent (40%) of the cumulative Net
Income of the Company for each fiscal quarter of the Company
ending after the end of the calendar month in which the
Closing Date occurs, provided, that, such amount shall in no
event be less than zero, (iii) the amount by which Net Worth
is increased by virtue of any sale after the Closing Date by
the Company of any Common Stock and Convertible Securities of
the Company, whether by virtue of a Public offering or any
private placement or other sale (the amount of any such
increase being referred to herein as an "Adjustment Amount"),
-----------------
subject to the terms of subsection 5.01(g)(4) of this Agreement.
(2) Fixed Charge Coverage Ratio. As of the
---------------------------
close of each fiscal quarter of the Company ending after the
Closing Date, the Company, for the period of the four
consecutive fiscal quarters which end on such close, shall
have a Fixed Charge Coverage Ratio of not less than 1.2:1,
subject to the terms of subsection 5.01,(g)(4) of this
Agreement.
(3) Ratio of Total Funded Debt to EBITDA. As
------------------------------------
of the close of each fiscal quarter of the Company ending
after the Closing Date, the Company, for the period of the
four consecutive fiscal quarters which end on such close,
shall have a Ratio of Total Funded Debt to EBITDA of not
greater than (i) 4.00:1 until September 30, 1998, (ii) 3.75
from October 1, 1998, until September 30, 2000, and (iii) 3.50
from October 1, 2000, and thereafter.
32
33
(4) Special Provision. Solely for the purposes
-----------------
of determining the Company's compliance with the financial
covenants set forth in subsections 5.01(g)(1) and (2) of this
Agreement, in the event the West Dividend is paid by the
Company to West: (i) the West Dividend will be treated as
having been paid by the Company to West on the date the Bank
releases its security interest in the Cash Collateral
described in subsection 5.02(a)(3), notwithstanding the
earlier date of actual payment of the West Dividend by the
Company to West; and (ii) for the purposes of determining the
Company's compliance with subsection 5.01(g)(1)(iii), the
cumulative total of all Adjustment Amounts shall be reduced on
the date the Bank releases its security interest in the Cash
Collateral described in subsection 5.02(a)(3) by the amount of
the West Dividend.
(h) Primary Banking Relationship. Within one
----------------------------
hundred twenty (120) days after the Closing Date, the Company shall
maintain its primary concentration and deposit accounts with the
Bank, provided, that, the Company shall use its best effort to
effect same prior to such date.
(i) Employee Benefit Plans. The Company shall
----------------------
maintain and shall cause any Subsidiary to maintain any Plan in
material compliance with ERISA, the Code, and all rules and
regulations of regulatory authorities pursuant thereto and shall
file and shall cause any Subsidiary to file all reports required to
be filed pursuant to ERISA, the Code, and such rules and
regulations.
(j) Hazardous Substances. If the Company or any
--------------------
Subsidiary should commence the use, treatment, transportation,
generation, storage or disposal of any Hazardous Substance in
reportable quantities in its operations in addition to those noted
in EXHIBIT H attached hereto, the Company shall immediately
---------
notify the Bank of the commencement of such activity with respect
to each such Hazardous Substance. The Company shall cause any
Hazardous Substances which are now or may hereafter be used or
generated in the operations of the Company or any Subsidiary in
reportable quantities to be accounted for and disposed of in
compliance with all Environmental Laws and other applicable
federal, state and local Laws and regulations. The Company shall
notify the Bank immediately upon obtaining knowledge that:
(1) any premises which have at any time been owned
or occupied by or have been under lease to the Company or any
Subsidiary are the subject of an environmental investigation
by any federal, state or local governmental agency having
jurisdiction over the regulation of any Hazardous Substances,
the purpose of which investigation is to quantify the levels
of Hazardous Substances located on such premises, or
(2) the Company or any Subsidiary has been named or
is threatened to be named as a party responsible for the
33
34
possible contamination of any real property or ground water
with Hazardous Substances, including, but not limited to the
contamination of past and present waste disposal sites.
If the Company or any Subsidiary is notified of any event
described in subsections 5.01(j)(1) or (2) above, the Company shall
immediately engage or cause the Subsidiary to engage a firm or
firms of engineers or environmental consultants appropriately
qualified to determine as quickly as practical the extent of
contamination and the potential financial liability of the Company
or the Subsidiary with respect thereto, and the Bank shall be
provided with a copy of any report prepared by such firm or by any
governmental agency as to such matters as soon as any such report
becomes available to the Company, and Company shall immediately
establish reserves in the amount of the potential financial
liability of the Company or the Subsidiary identified by such
environmental consultants or engineers. The selection of any
engineers or environmental consultants engaged pursuant to the
requirements of this Section shall be subject to the approval of
the Bank, which approval shall not be unreasonably withheld.
SECTION 5.02. NEGATIVE COVENANTS OF THE COMPANY.
------------
Until all obligations of the Company terminate or are paid and
satisfied in full, and so long as Borrower is entitled to receive
any Advance or any Letter of Credit exists, the Company shall
strictly observe the following covenants:
(a) Restricted Payments. The Company shall not
-------------------
purchase or redeem any shares of the Common Stock or declare or pay
any dividends thereon except for dividends payable entirely in
Common Stock, or make any other distributions to shareholders as
shareholders, or set aside any funds for any such purpose, or
prepay, purchase or redeem any subordinated indebtedness of the
Company; provided that:
-------- ----
(1) The Company may pay cash dividends not to
exceed an aggregate of $250,000 in any calendar year to
shareholders on their Common Stock if no Event of Default or
Unmatured Event of Default has occurred and is continuing at
the time of such payment and if no Event of Default or
Unmatured Event of Default would result from such payment;
(2) In addition to the cash dividends described in
subsection 5.02(a)(1) above, the Company may pay dividends to
shareholders on their Common Stock, from Net Income for any
fiscal year of the Company during which the Company is an "S
corporation" as defined in the Code (an "S Year") at the
------
maximum Permissible Dividend Rate (as hereafter defined), but
only during the first three fiscal quarters of the following
fiscal year and only if no Event of Default or Unmatured Event
of Default has occurred and is continuing at the time of such
payment and if no Event of Default or Unmatured Event of
Default would result from such payment. For purposes of this
34
35
subsection, the term "Maximum Permissible Dividend Rate"
---------------------------------
means a dividend rate determined as follows: The Company
shall determine the net increase in federal income tax and
state adjusted gross income tax liabilities of each of its
shareholders for the S Year on account of items of income,
loss, or credit of the Company attributable to the respective
shareholders for federal income tax and state adjusted gross
income tax purposes. The Company shall then divide the amount
so determined with respect to each shareholder by the number
of shares of the Common Stock held by that shareholder. The
highest quotient obtained by such calculation shall be the
Maximum Permissible Dividend Rate.
(3) In addition to the cash dividends described in
subsections 5.02(a)(1) and (2) above, the Company may pay a
lump sum cash dividend to Xxxx X. Xxxx as a shareholder on his
Common Stock ("West Dividend") in an amount not to exceed
-------------
the lesser of (i) "the accumulated adjustment account" (as
such term is defined in Section 1368 of the Internal Revenue
Code) of the Company, or (ii) $7,000,000, provided that:
-------- ----
(a) immediately prior to the payment of the West Dividend Xxxx X. Xxxx is
the sole shareholder of the Company; and (b) immediately upon and
concurrently with the payment of the West Dividend Payment to West, West
shall pledge and deliver the full amount of the West Dividend to the Bank
as Cash Collateral to secure payment of all of the obligations.
Provided that no Event of Default or Unmatured Event of
Default has occurred and is continuing, the Bank shall release
its security interest in such Cash Collateral upon the earlier
of (i) the date upon which the obligations are fully paid and
the Bank has no further obligation to issue Advances or
Letters of Credit; and (ii) the date upon which (A) the
cumulative total of all Adjustment Amounts shall exceed the
amount of the West Dividend, and (B) the level of the Net
Worth of the Company shall be restored to the level of Net
Worth of the Company that existed immediately prior to the
payment of the West Dividend to West, and (C) the Bank shall
have received an opinion of counsel from Xxxx X. Xxxx
satisfactory to the Bank covering such matters as the Bank may
reasonably require.
Notwithstanding the foregoing, the cash dividends paid by
the Company in any calendar year under subsections 5.02(a)(1) and
(2) of this Agreement shall not exceed in the aggregate the Net,
Income of the Company during such calendar year.
(b) Liens. The Company shall not create or permit
-----
to exist any mortgage, pledge, title retention lien or other lien,
encumbrance or security interest (all of which are hereafter
referred to in this subsection as a "lien" or "liens") with respect
to any property or assets now owned or hereafter acquired,
including, without limitation any of the Company's rights, title
35
36
and interests in and to any Real Estate, whether leased or owned,
except:
(1) liens in favor of the Bank created pursuant to
the requirements of this Agreement or otherwise;
(2) any lien or deposit with any governmental
agency required or permitted to qualify the Company to conduct
business or exercise any privilege, franchise or license, or
to maintain self-insurance or to obtain the benefits of or
secure obligations under any law pertaining to worker's
compensation, unemployment insurance, old age pensions, social
security or similar matters, or to obtain any stay or
discharge in any legal or administrative proceedings, or any
similar lien or deposit arising in the ordinary course of
business;
(3) any mechanic's, worker's, repairmen's,
carrier's, warehousemen's or other like liens arising in the
ordinary course of business for amounts not yet due and for
the payment of which adequate reserves have been established,
or deposits made to obtain the release of such liens;
(4) easements, licenses, minor irregularities in
title or minor encumbrances on or over any real property which
do not, in the judgment of the Bank, materially detract from
the value of such property or its marketability or its
usefulness in the business of the Company;
(5) liens for taxes and governmental charges which
are not yet due or which are being contested in good faith and
by appropriate proceedings and for which appropriate reserves
have been established;
(6) liens created by or resulting from any
litigation or legal proceeding which is being contested in
good faith and by appropriate proceedings and for which
appropriate reserves have been established;
(7) those liens in favor of Acquisition Sellers
which secure Acquisition Seller Debt, including those liens in
favor of Existing Acquisition Sellers which secure Acquisition
Seller Debt as described on EXHIBIT J attached, hereto;
---------
provided that (i) the maximum aggregate amount of Acquisition
-------- ----
Seller Debt secured by such liens shall be $6,000,000 and (ii) the
Acquisition Seller holding any such lien is a party to (a) the
Intercreditor Agreements, or (b) other intercreditor and subordination
agreement with the Bank and the Company in substance and form the same as
the Intercreditor Agreements and in all events satisfactory to the Bank
in all respects; and
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(8) liens on property that secure only Debt
incurred for the purchase price of such property, but only to
the extent such Debt is permitted under Section 5.02(m)(iii)
of this Agreement and to the extent such Debt is not greater
than the fair market value of such property.
(c) Guaranties. The Company shall not be a
----------
guarantor or surety of, or otherwise be responsible in any manner
with respect to any undertaking of any other person or entity,
whether by guaranty agreement or by agreement to purchase any
obligations, stock, assets, goods or services, or to supply or
advance any funds, assets, goods or services, or otherwise, except
for:
(1) guaranties in favor of the Bank;
(2) guaranties by endorsement of instruments for
deposit made in the ordinary course of business; and
(3) those specific existing guaranties listed on
EXHIBIT K attached hereto.
---------
(d) Loans or Advances. The Company shall not make
-----------------
or permit to exist any loans or advances; to any other person or
entity, except for:
(1) extensions of credit or credit accommodations
to customers or vendors made by the Company in the ordinary
course of its business as now conducted;
(2) reasonable salary advances to non-executive
employees, and other advances to agents and employees for
anticipated expenses to be incurred on behalf of the Company
in the course of discharging their assigned duties;
(3) loans made to employees of the Company in
accordance with the Company's customary employee loan program,
provided that, the amount of each loan made to any such
employee shall not exceed a principal amount in excess of such
employee's salary for two (2) pay periods for a term not to
exceed twelve (12) pay periods for such employee;
(4) the specific items listed on EXHIBIT L
---------
attached hereto.
(e) Mergers, Consolidations, Sales, Acquisition or
----------------------------------------------
Formation of Subsidiaries. The Company shall not be a party to
-------------------------
any consolidation or to any merger and shall not purchase the
capital stock of or otherwise acquire any equity interest in any
other business entity other than New Acquisitions. The Company
shall not acquire any material part of the assets of any other
business entity other than New Acquisitions, except in the ordinary
course of business. The Company shall not sell, transfer, convey
or lease all or any material part of its assets, except in the ordinary
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course of business, or sell or assign with or without
recourse any receivables. The Company shall not cause to be
created or otherwise acquire any Subsidiaries without the prior
written consent of the Bank.
(f) Margin Stock. The Company shall not use or
------------
cause or permit the proceeds of the Loans to be used, either
directly or indirectly, for the purpose, whether immediate,
incidental or ultimate, of purchasing or carrying any margin stock
within the meaning of Regulation U of the Board of Governors of the
Federal Reserve System, as amended from time to time.
(g) Other Agreements. The Company shall not enter
----------------
into any agreement containing any provision which would be violated
or breached in material respect by the performance of its
obligations under this Agreement or under any other Loan Document.
(h) Judgments. The Company shall not permit any
---------
uninsured judgment or monetary penalty rendered against it in any
judicial or administrative proceeding to remain unsatisfied for a
period in excess of forty-five (45) days unless such judgment or
penalty is being contested in good faith by appropriate proceedings
and execution upon such judgment has been stayed, and unless an
appropriate reserve has been established with respect thereto.
(i) Principal Office. The Company shall not change
----------------
the location of its principal office unless it gives not less than
ten (10) days prior written notice of such change to the Bank.
(j) Hazardous Substances. The Company shall not
--------------------
allow or permit to continue the release or threatened release of
any Hazardous Substance on any premises owned or occupied by or
under lease to the Company or any Subsidiary, except as permitted
by and in accordance with that certain permit No. 25656 issued by
the Allegheny Health Department, State of Pennsylvania, a copy of
which is attached hereto as EXHIBIT M.
---------
(k) Lease Obligations. The Company shall not incur
-----------------
obligations under any Capital Leases.
(l) Additional Debt. The Company shall not create,
---------------
incur, assume or suffer to exist any Debt or liability on account
of deposits or advances or for borrowed money or for the deferred
purchase price of any property or services or for Capital Lease
obligations, except (i) Acquisition Seller Debt, (ii) the
Obligations, (iii) Debt incurred to finance the acquisition of
property and secured only by a security interest in the property so
acquired, provided that, the amount of all such Debt outstanding
shall not exceed $1,000,000 in the aggregate at any time, and
(iv) the existing Debt for borrowed money disclosed on
EXHIBIT N attached hereto.
---------
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ARTICLE VI.
-----------
LENDING CONDITIONS
------------------
SECTION 6.01. CONDITIONS OF LENDING. The obligation
------------
of the Bank to make any Advance, to make the Term Loan and to issue
any Letters of Credit shall be subject to fulfillment of each of
the following conditions precedent:
(a) No Default. No Event of Default or Unmatured
----------
Event of Default shall have occurred and be continuing, and the
representations and warranties of the Company contained in Section
3.01 of this Agreement shall be true and correct as of the date of
this Agreement and as of the date of each Advance, except that
after the date of this Agreement: (i) the representations
contained in subsection 3.01(d)(ii) of this Agreement will be
construed so as to refer to the latest Financial Statements
furnished to the Bank by the Company pursuant to the requirements
of this Agreement, (ii) the representations contained in subsection
3.01(k) (with respect to Hazardous Substances) will be construed so
as to apply not only to the Company, but also to any Subsidiaries,
(iii) the representation contained in subsection 3.01(l) of this
Agreement will be construed so as to except any Subsidiary which
may hereafter be formed or acquired by the Company with the consent
of the Bank, and (iv) all other representations will be construed
to have been amended to conform with any changes of which the Bank
shall previously have been given notice in writing by the Company.
(b) Documents and other Items to be Furnished at Closing.
----------------------------------------------------
The Bank shall have received contemporaneously with the execution of this
Agreement, the following, each duly executed, currently dated (as applicable)
and in form and substance satisfactory to the Bank:
(1) The Revolving Note and the Term Note.
(2) The Security Agreement.
(3) The Intercreditor Agreements.
(4) A certified copy of a Resolution of the Board
of Directors of the Company authorizing the execution,
delivery and performance, respectively, of this Agreement and
the other Loan Documents provided for in this Agreement to
which the Company is a party.
(5) A certificate of the Secretary of the Company
certifying the names of the officer or officers authorized to
sign this Agreement and the other Loan Documents provided for
in this Agreement to which the Company is a party, together
with a sample of the true signature of each such officer.
39
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(6) A copy of the file-marked Articles of
Incorporation of the Company certified as complete and correct
by the Secretary of State of West Virginia, and a copy of the
By-Laws of the Company, certified as complete and correct by
the Secretary of the Company.
(7) A currently dated certificate of existence of
the Company issued by the Secretary of State of West Virginia
and certificates of good standing for each other state in
which the Company engages in business.
(8) The opinion of counsel for the Company
addressed to the Bank to the effect that the representations
stated in subsections 3.01(a), (b), (c), (i) and (1) of this
Agreement are correct. Such opinion shall be in such form as
may be reasonably acceptable to the Bank.
(9) Certificates evidencing the existence of all
insurance required under the terms of this Agreement or any
other Loan Documents.
(10) Payment to the Bank of the $22,500 unpaid
balance of the commitment fee described in subsection 2.05(d)
of this Agreement, together with payment to the Bank of an
amount not to exceed $5,000 in reimbursement for expenses
incurred by the Bank in conducting its preclosing collateral
audit.
(11) Such other documents as the Bank may reasonably
require.
(c) Documents to be Furnished at Time of Each Advance.
-------------------------------------------------
The Bank shall have received the following prior to making any Advance, each
duly executed and currently dated, unless waived at the Bank's discretion as
provided in subsection 2.02(b) of this Agreement:
(1) An Application for a Revolving Loan Advance.
(2) An Officer's Certificate.
(3) Such other documents as the Bank may reasonably
require.
ARTICLE VII.
------------
EVENTS OF DEFAULT--ACCELERATION
-------------------------------
SECTION 7.01. EVENTS OF DEFAULT. Each of the
------------
following shall constitute an Event of Default under this
Agreement:
(a) Nonpayment of the Loans. Default in the payment
-----------------------
when due of any amount payable under the terms of either of the
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Notes, or otherwise payable to the Bank or any other holder of the
Notes under the terms of this Agreement.
(b) Nonpayment of Other Debt. Default by the
------------------------
Company in the payment when due, whether by acceleration or
otherwise, of any other material Debt for borrowed money, or
default in the performance or observance of any obligation or
condition with respect to any such other Debt if the effect of such
default is to accelerate the maturity of such other Debt or to
permit the holder or holders thereof, or any trustee or agent for
such holders, to cause such Debt to become due and payable prior to
its scheduled maturity, unless the Company is contesting the
existence of such default in good faith and by appropriate
proceedings.
(c) Other Material Obligations. Subject to the
--------------------------
expiration of any applicable grace period, default by the Company
in the payment when due, or in the performance or observance of any
material obligation of, or condition agreed to by the Company with
respect to any material purchase or lease of goods, securities or
services except only to the extent that the existence of any such
default is being contested in good faith and by appropriate
proceedings and that appropriate reserves have been established
with respect thereto.
(d) Bankruptcy, Insolvency, etc. The Company
---------------------------
admitting in writing its inability to pay its debts as they mature
or an administrative or judicial order of dissolution or
determination of insolvency being entered against the Company; or
the Company applying for, consenting to, or acquiescing in the
appointment of a trustee or receiver for the Company or any
property thereof, or the Company making a general assignment for
the benefit of creditors; or, in the absence of such application,
consent or acquiescence, a trustee or receiver being appointed for
the Company or for a substantial part of its property and not being
discharged within sixty (60) days; or any bankruptcy,
reorganization, debt arrangement, or other proceeding under any
bankruptcy or insolvency law, or any dissolution or liquidation
proceeding being instituted by or against the Company, and, if
involuntary, being consented to or acquiesced in by the Company or
remaining for sixty (60) days undismissed.
(e) Warranties and Representations. Any warranty or
------------------------------
representation made by the Company in this Agreement proving to
have been false or misleading in any material respect when made, or
any schedule, certificate, financial statement, report, notice, or
other writing furnished by the Company to the Bank proving to have
been false or misleading in any material respect when made or
delivered, provided that the foregoing shall not be deemed to be an
Event of Default until the Bank gives the Company ten (10) days'
prior written notice of same.
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(f) Violations of Negative and Financial Covenants.
----------------------------------------------
Failure by the Company to comply with or perform any covenant
stated in subsection 5.01(g), or Section 5.02 of this Agreement.
(g) Noncompliance With Other Provisions of this Agreement.
-----------------------------------------------------
Failure of the Company to comply with or perform any covenant or other
provision of this Agreement or to perform any other Obligation (which failure
does not constitute an Event of Default under any of the preceding provisions
of this Section 7.01) and continuance of such failure for thirty (30) days
after notice thereof to the Company from the Bank.
SECTION 7.02. EFFECT OF EVENT OF DEFAULT. If any
------------
Event of Default described in Section 7.01 of this Agreement shall
occur, maturity of the Loans shall immediately be accelerated and
the Notes and the Loans evidenced thereby, and all other
indebtedness and any other payment Obligations of the Company to
the Bank shall become immediately due and payable, and the
obligation of the Bank to make any Advance or issue any Letter of
Credit shall immediately terminate, all without notice of any kind.
When any other Event of Default has occurred and is continuing, the
Bank or any other holder of the Notes may accelerate payment of the
Loans and declare the Notes and all other payment Obligations due
and payable, whereupon maturity of the Loans shall be accelerated
and the Notes and the Loans evidenced thereby, and all other
payment Obligations shall become immediately due and payable and
the obligation of the Bank to make any Advance or issue any Letter
of Credit shall immediately terminate, all without notice of any
kind. The Bank or such other holder shall promptly advise the
Company of any such declaration, but failure to do so shall not
impair the effect of such declaration. The remedies of the Bank
specified in this Agreement or in any other Loan Document shall not
be exclusive, and the Bank may avail itself of any other remedies
provided by law as well as any equitable remedies available to the
Bank.
ARTICLE VIII.
-------------
MISCELLANEOUS
-------------
SECTION 8.01. WAIVER -- AMENDMENTS. No delay on the
------------
part of the Bank, or any holder of the Notes in the exercise of any
right, power or remedy shall operate as a waiver thereof, nor shall
any single or partial exercise by any of them of any right, power
or remedy preclude any other or further exercise thereof, or the
exercise of any other right, power or remedy. No amendment,
modification or waiver of, or consent with respect to any of the
provisions of this Agreement or the other Loan Documents or
otherwise of the obligations shall be effective unless such
amendment, modification, waiver or consent is in writing and signed
by the Bank.
SECTION 8.02. NOTICES. Any notice given under or
------------
with respect to this Agreement to the Company or the Bank shall be in
42
43
writing and, if delivered by hand or sent by overnight courier
service, shall be deemed to have been given when delivered and, if
mailed, shall be deemed to have been given five (5) days after the
date when sent by registered or certified mail, postage prepaid,
and addressed to the Company or the Bank (or other holder of the
Notes) at its address shown below, or at such other address as any
such party may, by written notice to the other party to this
Agreement, have designated as its address for such purpose. The
addresses referred to are as follows:
The Company: Valley National Gases, Inc.
00 00xx Xxxxxx
Xxxxxxxx, Xxxx Xxxxxxxx 00000-0000
Attention: President
The Bank: Bank One, Indianapolis, NA
Bank One Center/Tower - Suite 1911
000 Xxxxxxxx Xxxxxx
X.X. Xxx 0000
Xxxxxxxxxxxx, Xxxxxxx 00000
Attention: Manager, Regional Department A
SECTION 8.03. COSTS, EXPENSES AND TAXES. The
------------
Company agrees to pay (without duplication), all of the following
fees, costs and expenses incurred by the Bank: (i) all reasonable
costs and expenses in connection with the negotiation, preparation,
printing, typing, reproduction, execution and delivery of the Loan
Documents and any and all other documents furnished pursuant hereto
or in connection herewith, and all investigation of and due
diligence regarding the Company and the security for the
obligations undertaken and performed with respect thereto,
including without limitation the reasonable fees and out-of-pocket
expenses of Messrs. Xxxxx & Xxxxxxx, special counsel to the Bank,
and local counsel for the State of Tennessee and Maryland (if any)
retained by the Bank relative thereto (or, but not as well as the
reasonable allocated costs of staff counsel) as well as the fees
and out-of-pocket expenses of counsel, independent public
accountants and other outside experts retained by the Bank, and in
connection with the foregoing and the administration of this
Agreement, (ii) all reasonable costs and expenses in connection
with the negotiation, preparation, printing, typing, reproduction,
execution and delivery of any amendments or modifications of (or
supplements to) any of the foregoing and any and all other
documents furnished pursuant thereto or in connection therewith,
and all investigation of and due diligence regarding the Company
and the security for the obligations undertaken and performed with
respect thereto, including without limitation the reasonable fees
and out-of-pocket expenses of counsel retained by the Bank relative
thereto (or, but not as well as the reasonable allocated costs of
staff counsel) as well as the fees and out-of-pocket expenses of
counsel, independent public accountants and other outside experts
retained by the Bank, and in connection with the foregoing and the
administration of this Agreement, (iii) all search fees, appraisal
43
44
fees and expenses, title insurance policy fees, costs and expenses
and filing and recording fees and taxes and, (iv) all costs and
expenses (including, without limitation, reasonable attorneys' fees
and expenses of the Bank), if any, in connection with the
enforcement of this Agreement, any Note and/or any other Loan
Documents or other agreement furnished pursuant hereto or thereto
or in connection herewith or therewith. In addition, the Company
shall pay any and all stamp, transfer and other similar taxes
payable or determined to be payable in connection with the
execution and delivery of this Agreement, or any of the other Loan
Documents or the issuance of any Note or the making of any of the
Loans, and agrees to save and hold the Bank harmless from and
against any and all liabilities with respect to or resulting from
any delay in paying, or omission to pay, such taxes. Any portion
of the foregoing fees, costs and expenses which remains unpaid
following the Bank's statement and request for payment thereof
shall bear interest from the date of such statement and request to
the date of payment at a per annum rate equal to the Prime Rate
plus Two Percent (2%).
SECTION 8.04. SEVERABILITY. If any provision of
------------
this Agreement or any other Loan Document is determined to be
illegal or unenforceable, such provision shall be deemed to be
severable from the balance of the provisions of this Agreement or
such Document and the remaining provisions shall be enforceable in
accordance with their terms.
SECTION 8.05. CAPTIONS. Section captions used in
------------
this Agreement are for convenience only and shall not affect the
construction of this Agreement.
SECTION 8.06. GOVERNING LAW. Except as may
------------
otherwise be expressly provided in any other Loan Document, this
Agreement and all other Loan Documents are made under and will be
governed in all cases by the substantive laws of the State of
Indiana, notwithstanding the fact that Indiana conflicts of law
rules might otherwise require the substantive rules of law of
another jurisdiction to apply. THE COMPANY WAIVES PERSONAL SERVICE
OF ANY AND ALL PROCESS UPON THE COMPANY AND AGREES THAT ALL SERVICE
OF PROCESS MAY BE MADE BY MESSENGER, BY CERTIFIED MAIL, RETURN
RECEIPT REQUESTED, OR BY REGISTERED MAIL DIRECTED TO THE COMPANY AT
THE ADDRESS STATED IN SECTION 8.02 OF THIS AGREEMENT. NOTHING
CONTAINED IN THIS SECTION SHALL AFFECT THE RIGHT OF THE BANK TO
SERVE LEGAL PROCESS IN ANY OTHER MANNER PERMITTED BY LAW.
SECTION 8.07. PRIOR AGREEMENTS, ETC. This Agreement
------------
supersedes all previous agreements and commitments made by the Bank
and the Company with respect to the Loans and all other subjects of
this Agreement, including, without limitation, any oral or written
proposals or commitments made or issued by the Bank.
SECTION 8.08. SUCCESSORS AND ASSIGNS. This
------------
Agreement and the other Loan Documents shall be binding upon and
shall inure
44
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to the benefit of the Company and the Bank and their
respective successors and assigns, provided that the Company's
rights under this Agreement shall not be assignable without the
prior written consent of the Bank.
SECTION 8.09. WAIVER OF JURY TRIAL. THE BANK AND
------------
THE COMPANY IRREVOCABLY AND UNCONDITIONALLY WAIVE ANY RIGHT TO
TRIAL BY JURY OF ANY DISPUTE OR CLAIM, WHETHER BASED UPON CONTRACT
OR ALLEGED WRONGFUL ACT OR OMISSION, WHICH DISPUTE OR CLAIM ARISES
OUT OF, OR IS INCIDENTAL TO THE RELATIONSHIP ESTABLISHED BETWEEN
THE COMPANY AND THE BANK BY THIS OR ANY OTHER LOAN DOCUMENT. THIS
PROVISION IS A MATERIAL INDUCEMENT TO THE BANK TO ENTER INTO THIS
AGREEMENT.
SECTION 8.10. POST-CLOSING ITEMS. The Company
------------
hereby covenants and agrees that within thirty (30) days after the
Closing Date, either (a) the Bank shall receive from each of Fort
Pitt Paint and Welders Supply Co. ("Fort Pitt") and Xxxxx Xxxxx
("Green"), respectively, intercreditor and subordination agreements
executed by the Bank and each of Fort Pitt and Green, each in form
and substance satisfactory to the Bank in all respects, or (b) all
of the Existing Acquisition Seller Debt owed by the Company to each
of Fort Pitt and Green shall be fully paid and all security
interests and liens of each of Fort Pitt and Green in or on any
assets of the Company shall be terminated and released. In the
event the Bank notifies the Company at any time after the Closing
Date that the Bank has discovered UCC filings of record against the
Company which do not perfect or otherwise relate to Permitted
Liens, the Company shall cause such UCC filings to be released and
terminated of record within forty-five (45) days after such notice,
provided that, nothing herein shall waive or be deemed to be a
waiver of the Bank's rights to declare an Event of Default by
reason of the existence of such UCC filings.
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IN WITNESS WHEREOF, the Bank and the Company have by
their duly authorized officers executed this Agreement on the date
first set forth above.
VALLEY NATIONAL GASES, INC.,
A West Virginia corporation
By: /s/ Xxxxxxxx X. Xxxxx
----------------------------------------------
Printed: Xxxxxxxx X. Xxxxx
-----------------------------------------
Title: President & CEO
-------------------------------------------
(the "Company")
BANK ONE, INDIANAPOLIS, NATIONAL
ASSOCIATION
By: /s/ Xxxxx X. Xxxxx
----------------------------------------------
Printed: Xxxxx X. Xxxxx
-----------------------------------------
Title: Vice President
-------------------------------------------
(the "Bank")
46
00
XXXX XXX, XXXXXXXXXXXX, XX
Xxxxxxxxxxxx XX 00000
BANK1ONE
January 3, 1997
Xxxxxx X. Xxxxxxxx
Chief Financial Officer
Valley National Gases, Inc.
00 00xx Xxxxxx
Xxxxxxxx, XX 00000
Dear Xxx:
Bank One, Indianapolis, NA has approved a modification to the
Credit Agreement concerning the "West Dividend". Section
5.02(a)(3)(ii) will be modified form $7,000,000 to $8,500,000.
This will permit Valley National Gases, Inc. "the Company" to pay
Xxxx X. Xxxx the lesser of the "accumulated adjustment account"
or "$8,500,000" from the proceeds of the pending IPO.
This is a one time modification to the Credit Agreement. If you
need any additional information or have questions, please feel
free to contact me.
Sincerely,
/s/ Xxxxxx X. Xxxxxxx
Xxxxxx X. Xxxxxxx
Assistant Vice President
/bjt
