EXHIBIT 10.1
THIRD AMENDED AND RESTATED CREDIT AGREEMENT
THIS THIRD AMENDED AND RESTATED CREDIT AGREEMENT is executed as of
the 30th day of April, 2004 ("Closing Date"), by VALLEY NATIONAL GASES, INC., a
West Virginia corporation (the "Company"), VALLEY NATIONAL GASES INCORPORATED, a
Pennsylvania corporation ("VNGI"), VALLEY NATIONAL GASES DELAWARE, INC., a
Delaware corporation ("VNGDI"), the Lenders from time to time party hereto, BANK
ONE, NA, a national banking association having its main office in Chicago,
Illinois, as Administrative Agent ("Agent") and Sole Lead Arranger, National
City Bank, as Syndication Agent, and Fifth Third Bank, as Documentation Agent.
RECITALS
1. The Company, VNGDI, VNGI, the Agent and certain lenders are
parties to a Second Amended and Restated Credit Agreement, dated as of May 1,
2000 (as the same has been amended, modified and supplemented prior to the
Closing Date and as in effect immediately prior to the execution of this
Agreement, the "Prior Agreement").
2. By Loan Assignment and Modification Agreement, dated as of the
Closing Date (the "Transfer Agreement"), certain of the lenders parties to the
Prior Agreement have sold, transferred and assigned to the Lenders specified
interests in and obligations under the Prior Agreement and the documents
executed in connection therewith, and the indebtedness, obligations and
liabilities evidenced thereby, arising therefrom, pursuant to or by virtue
thereof, and their lending commitments thereunder.
3. The Company, VNGDI and VNGI (referred to herein collectively,
as the "Credit Parties", and individually as a "Credit Party") have requested
the Lenders and the Agent to amend, and as so amended, to restate the Prior
Agreement, subject to and in accordance with the terms of this Agreement.
AGREEMENT
NOW THEREFORE, in consideration of the premises, the mutual
covenants and agreements herein, and each act performed and to be performed
hereunder, the Lenders, the Agent and the Credit Parties agree to amend, and as
so amended, to restate, the Prior Agreement as follows:
ARTICLE I.
DEFINITION OF TERMS
Section 1.01. ACCOUNTING TERMS -- DEFINITIONS. All 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:
1
"Acquisition Seller Debt" means, collectively (i) the 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 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 such amount as may be approved by the
Agent in its sole discretion of EBITDA of a Related Business Entity
acquired in a New Acquisition for the period of four (4) calendar quarters
immediately preceding the New Acquisition Closing Date for such New
Acquisition or for such other period of four (4) calendar quarters
preceding such New Acquisition Closing Date as may be agreed and approved
by the Agent, provided that, such amount is subject to redetermination by
the Agent at its sole discretion to reflect elimination of expenses
(including salaries, benefits and associated payroll costs for employees
who have been identified for termination as a result of the New
Acquisition and are to be terminated; rent expenses for leases that are to
be terminated within sixty (60) days of closing of the New Acquisition;
reduction of cost of goods sold due to lower gas margins from increased
volume discounts; and any other identifiable, immediate net cost savings
deemed applicable by the Agent) of such Related Business Entity by virtue
of the acquisition.
"Advance" means a borrowing hereunder, (i) funded by some or all of the
Lenders on the same Borrowing Date, or (ii) converted or continued by the
Lenders on the same date of conversion or continuation, consisting, in
either case, of the aggregate amount of the several Loans of the same Type
and, in the case of Eurodollar Loans, for the same Interest Period. The
term "Advance" shall include Swing Line Loans unless otherwise expressly
provided.
"Affiliate" means, with respect to any Person, any 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.
"Agent" means Bank One in its capacity as contractual representative of
the Lenders pursuant to Article VIII, and not in its individual capacity
as a Lender, Swing Line Lender, or issuer of Letters of Credit, and any
successor Agent appointed pursuant to Article VIII.
"Aggregate Commitment" means the aggregate of the Commitments of all of
the Lenders, as increased or reduced from time to time pursuant to the
terms of this Agreement.
2
"Aggregate Outstanding Credit Exposure" means, at any time, the aggregate
of the Outstanding Credit Exposures of all the Lenders.
"Agreement" means this Third Amended and Restated Credit Agreement, as
amended, modified, supplemented and/or restated from time to time and at
any time.
"Alternate Base Rate" means, for any day, a rate of interest per annum
equal to the higher of (i) the Prime Rate for such day and (ii) the sum of
the Federal Funds Effective Rate for such day plus 1/2% per annum.
"Applicable Fee Rate" means, at any time, the percentage rate per annum at
which commitment fees are accruing on the Unused Revolving Loans
Commitment at such time as set forth in the Pricing Schedule.
"Applicable L/C Fee Rate" means, at any time, the percentage rate per
annum at which letter of credit fees are accruing pursuant to Section
2.03(h) at such time as set forth in the Pricing Schedule.
"Applicable Margin" means, with respect to Advances of any Type at any
time, the percentage rate per annum which is applicable at such time with
respect to Advances of such Type as set forth in the Pricing Schedule.
"Approved Fund" means any Fund that is administered or managed by (a) a
Lender, (b) an Affiliate of a Lender or (c) an entity or an Affiliate of
an entity that administers or manages a Lender.
"Arranger" means Banc One Capital Markets, Inc., its successors and
assigns.
"Asset Sale Payment" has the meaning ascribed to such term in Section 2.06
of this Agreement.
"Authorized Officer" means the President or the Chief 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 Agent by a certified copy of an appropriate resolution
of the Board of Directors of the Company.
"Bank One" means Bank One, NA, a national banking association having its
principal office in Chicago, Illinois, in its individual capacity, and its
successors.
"Borrowing Date" means a date on which an Advance is made hereunder.
"Business Day" means (i) with respect to any borrowing, payment or rate
selection of Eurodollar Advances, a day (other than a Saturday or Sunday)
on which banks generally are open in Chicago and New York City for the
conduct of substantially all of their commercial lending activities,
interbank wire transfers can be made on the Fedwire system and dealings in
United States dollars are carried on in the London interbank market and
(ii) for all other purposes, a day (other than a Saturday or Sunday) on
which banks generally are open in Chicago for the conduct of substantially
all of their
3
commercial lending activities and interbank wire transfers can be made on
the Fedwire system.
"Capital Lease" shall mean any lease of property (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 consolidated balance sheet
of the Credit Parties and their respective Subsidiaries.
"Cash Collateral" means any and all cash (or qualified investment property
as may be acceptable to the Required Lenders in their sole discretion)
required or permitted to be pledged by any Person to the Agent for the pro
rata benefit of the Lenders and the Agent under this Agreement as security
for all or any part of the Obligations, which shall be held by the Agent
for the benefit of the Lenders and the Agent, as secured parties, in a
cash or securities collateral account maintained with the Agent
("Collateral Account") under which the Agent for the benefit of the
Lenders and the Agent are 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"), pursuant to a pledge agreement, account
control agreement and such other security and collateral assignment
documents as may be required by the Required Lenders to attach and perfect
and maintain perfection of such security interests and liens in the
Collateral Account Property, all in form and substance satisfactory in all
respects to the Required Lenders.
"Change of Control" means: VNGDI shall cease to own Voting Stock of the
Company in an aggregate representing 100% of the total aggregate voting
power of all classes of the Voting Stock of the Company, calculated on a
fully diluted basis, including Convertible Securities convertible into or
exchangeable for Voting Stock of the Company; or VNGI shall cease to own
Voting Stock of VNGDI in an aggregate representing 100% of the total
aggregate voting power of all classes of the Voting Stock of VNGDI,
calculated on a fully diluted basis, including Convertible Securities
convertible into or exchangeable for Voting Stock of VNGDI.
"Closing Date" has the meaning ascribed to such term in the preamble to
this Agreement.
"Code" means the Internal Revenue Code of 1986, as amended.
"Collateral" means all present and future assets of each of the Credit
Parties and their respective Subsidiaries upon which a Lien is purported
to be created by this Credit Agreement, or any other Loan Document
executed in connection with, pursuant to or by virtue of this Credit
Agreement, and all proceeds and products of any of the foregoing.
"Commitment" means, with respect to each Lender, its commitment to make
Revolving Loans and to participate in Swing Line Loans and Letters of
Credit as set forth in Article II of this Agreement. The amount of the
initial Commitment of each Lender is set forth on Schedule 1.01-a attached
to this Agreement and made a part hereof for all
4
purposes, as amended from time to time and at any time in accordance with
the terms of this Agreement.
"Commitment Percentage" means, when used with reference to any Lender and
any described aggregate or total amount, an amount equal to the result
obtained by multiplying such described aggregate or total amount by the
percentage set opposite its designation on Schedule 1.01-a under the
heading and caption "Commitment Percentage", as amended from time to time
and at any time in accordance with the terms of this Agreement, or as the
context requires, shall mean, when used with reference to any Lender, the
percentage set opposite its designation on Schedule 1.01-a under the
heading "Commitment Percentage", as amended from time to time and at any
time in accordance with the terms of this Agreement.
"Common Stock" means, with respect to any corporation, the common stock of
such corporation, and any class of capital stock of such corporation now
or hereafter authorized having the right to share in distributions either
of earnings or assets of such corporation without limit as to amount or
percentage.
"Company" has the meaning ascribed to such term in the preamble to this
Agreement.
"Company's Auditors" means one of the six (6) largest independent
certified public accounting firms in the U.S.
"Company Pledge Agreement" has the meaning ascribed to such term in
Section 4.01(f) of this Agreement.
"Company Security Agreement" means the Amended and Restated Security
Agreement, dated as of May 1, 2000, executed by the Company in favor of
the Agent for the benefit of the Lenders and the Agent, as the same has
been and hereafter may be amended, modified, supplemented, replaced and/or
restated from time to time and at any time.
"Consolidated Net Income" means, for any period, the net income of the
Credit Parties and their respective Subsidiaries, computed on a
consolidated basis and in accordance with GAAP for such period.
"Conversion/Continuation Notice" is defined in Section 2.05(e).
"Convertible Securities" means evidences of 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 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 or any Subsidiary or Affiliate of
the Company or any other Credit Party, including any Debt of the Company
for borrowed money, Capital Lease obligations, and any guarantees,
endorsements and other contingent obligations of the Company or any other
Credit Party
5
with respect to indebtedness, liabilities or obligations of any other
Person; provided, that, the term "Credit Enhancement" shall not include
Acquisition Seller Debt.
"Credit Party" and "Credit Parties" have the respective meanings ascribed
to such terms in the Recitals to this Agreement.
"Debt" means, with reference to any Person, all 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 (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" means a drawing or other demand for payment under a Letter of
Credit.
"EBITDA" means, with respect to the Credit Parties and their respective
Subsidiaries for any period, Consolidated Net Income for such period,
plus, without duplication and to the extent deducted in determining
Consolidated Net Income, the sum, for such period, of (i) interest
expense, (ii) income tax expense, (iii) depreciation, (iv) amortization
expense (all determined in accordance with GAAP), and (v) for the calendar
quarter ending June 30, 2003, and any period which includes such calendar
quarter, extraordinary charges not in excess of $3,417,000.00 identified
on Schedule 1.01-b as taken during the calendar quarter ending June, 2003.
For purposes of determining EBITDA for the Credit Parties and their
respective Subsidiaries on a pro forma basis to determine the effect of a
New Acquisition on compliance with the covenants in Section 5.01(g) of
this Agreement, to determine whether the Qualification Condition to any
New Acquisition has been satisfied, and to determine the Applicable Fee
Rate, Applicable L/C Fee Rate, and the Applicable Margin, (i) "EBITDA" for
any period of four fiscal quarters of the Company that ends on any New
Acquisition Closing Date will be deemed to include the Additional EBITDA
Amount calculated with respect to the Related Business Entity acquired (or
assumed to be acquired) on such New Acquisition Closing Date; and (ii)
EBITDA for any period of four fiscal quarters of the Company that ends
within one year after any New Acquisition Closing Date will be deemed to
include an amount equal to (A) the Additional EBITDA Amount calculated
with respect to the Related Business Entity acquired (or assumed to be
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 end of such period,
minus (C) 1/360 of such Additional EBITDA Amount for each day of any
partial calendar month that has elapsed between such New Acquisition
Closing Date and the end of such period.
"EBITDAR" means, with respect to the Credit Parties and their respective
Subsidiaries for any period, the EBITDA for such period, plus the Rent
Expense for such period.
6
"Environmental Laws" means all federal, state and 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. Section 9601 et seq.; (b) the Resource Conservation and Recovery
Act, as amended, 42 U.S.C. Section 6901 et seq., including the 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.; and (d) the Federal Water
Pollution Control Act, as amended, 33 U.S.C. Section 1251 et seq.,
including the statute regulating the National Pollutant Discharge
Elimination System, 33 U.S.C. Section 1342.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"Existing Acquisition Sellers" means, collectively, the Persons identified
as sellers on Schedule 3.01(m) attached hereto.
"Existing Acquisition Seller Debt" means, collectively, the Debt owed by
the Company to the Existing Acquisition Sellers, respectively, identified
on Schedule 3.01(m) attached hereto.
"Eurodollar Advance" means an Advance which, except as otherwise provided
in Section 2.05(f), bears interest at the applicable Eurodollar Rate.
"Eurodollar Base Rate" means, with respect to a Eurodollar Advance for the
relevant Interest Period, the applicable British Bankers' Association
LIBOR rate for deposits in U.S. dollars as reported by any generally
recognized financial information service as of 11:00 a.m. (London time)
two Business Days prior to the first day of such Interest Period, and
having a maturity equal to such Interest Period, provided that, if no such
British Bankers' Association LIBOR rate is available to the Agent, the
applicable Eurodollar Base Rate for the relevant Interest Period shall
instead be the rate determined by the Agent to be the rate at which Bank
One or one of its Affiliate banks offers to place deposits in U.S. dollars
with first class banks in the interbank market at approximately 11:00 a.m.
(London time) two Business Days prior to the first day of such Interest
Period, in the approximate amount of Bank One's relevant Eurodollar Loan
and having a maturity equal to such Interest Period.
"Eurodollar Loan" means a Loan which, except as otherwise provided in
Section 2.05(f), bears interest at the applicable Eurodollar Rate.
"Eurodollar Rate" means, with respect to a Eurodollar Advance for the
relevant Interest Period, the sum of (i) the quotient of (a) the
Eurodollar Base Rate applicable to such
7
Interest Period, divided by (b) one minus the Reserve Requirement
(expressed as a decimal) applicable to such Interest Period, plus (ii) the
Applicable Margin.
"Event of Default" means any of the events described in Section 7.01 of
this Agreement.
"Federal Funds Effective Rate" means, for any day, an interest rate per
annum equal to the weighted average of the rates on overnight Federal
funds transactions with members of the Federal Reserve System arranged by
Federal funds brokers on such day, as published for such day (or, if such
day is not a Business Day, for the immediately preceding Business Day) by
the Federal Reserve Bank of New York, or, if such rate is not so published
for any day which is a Business Day, the average of the quotations at
approximately 10:00 a.m. (Chicago time) on such day on such transactions
received by the Agent from three Federal funds brokers of recognized
standing selected by the Agent in its sole discretion.
"Financial Statements" includes, but is not limited to, balance sheets,
profit and loss statements, and cash flow statements, prepared in
accordance with GAAP.
"Fixed Charge Coverage Ratio" means, with respect to the Credit Parties
and their respective Subsidiaries for any period, a ratio of (a) EBITDAR
minus the sum of (i) the amount of income taxes which were due or paid
during such period, (ii) the amount of dividends that were paid by VNGI in
cash during such period; (iii) the amount of depreciation expense deducted
in determining the amount of Consolidated Net Income for such period,
provided that, for the calendar quarter ending June 30, 2003, and any
period which includes such calendar quarter, depreciation expenses of
$383,000.00 shall be excluded from the calculation, and (iv) Stock
Redemption Expense paid or payable during such period; to (b) the sum of
the following for the Credit Parties and their respective Subsidiaries,
computed on a consolidated basis and determined in accordance with GAAP:
(i) the amount of interest which was due and payable in cash or was paid
in cash during such period, (ii) the amount of scheduled principal
payments of Debt which were due and payable in cash during such period
(excluding payments of the Term Loan), and (iii) Rent Expense for such
period.
"Floating Rate" means, for any day, a rate per annum equal to (i) the
Alternate Base Rate for such day plus (ii) the Applicable Margin, in each
case changing when and as the Alternate Base Rate changes.
"Floating Rate Advance" means an Advance which, except as otherwise
provided in Section 2.05(f), bears interest at the Floating Rate.
"Floating Rate Loan" means a Loan which, except as otherwise provided in
Section 2.05(f), bears interest at the Floating Rate.
"Fund" means any Person (other than a natural person) that is (or will be)
engaged in making, purchasing, holding or otherwise investing in
commercial loans and similar extensions of credit in the ordinary course
of its business.
8
"GAAP" means generally accepted accounting principles 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, provided that
for purposes of calculations to determine compliance with the covenants in
Section 5.01(g), "GAAP" shall mean generally accepted accounting
principles in the United States of America on the Closing Date, including
official interpretations thereof by the Financial Accounting Standards
Board, excluding SFAS 141, 142 and 133, consistently applied for the
period from and after June 28, 2002 and for the period 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.
"Government Acts" has the meaning ascribed to such term in Section 2.03(g)
of this Agreement.
"Guaranties" means, collectively, the Parent Guaranties and the Subsidiary
Guaranties, and the term "Guaranty" means any of the Guaranties,
individually.
"Guarantors" means, collectively, VNGDI, VNGI and any Subsidiary of the
Company which hereafter unconditionally guaranties the Obligations
pursuant to Section 4.01(f), and "Guarantor" means any of the Guarantors,
individually.
"Hazardous Substance" means any hazardous or toxic 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.
"Highest Lawful Rate" means the maximum rate of interest which may be
charged the Company by the Lenders under applicable state or federal usury
law or regulation or any other law or regulation, however characterized,
limiting the rate of interest which may be charged to corporations.
"Initial Letters of Credit" means the letters of credit issued by Bank One
on behalf of the Company pursuant to the Prior Agreement or any previous
version thereof which remain outstanding on the Closing Date.
"Intercreditor Agreements" means, collectively, intercreditor and
subordination agreements entered into pursuant to Section 5.02(b)(7), as
the same may be amended, modified, extended, renewed, supplemented,
replaced and/or restated from time to time and at any time.
9
"Interest Period" means, with respect to a Eurodollar Advance, a period of
one, two, three or six months commencing on a Business Day selected by the
Company pursuant to this Agreement. Such Interest Period shall end on the
day which corresponds numerically to such date one, two, three or six
months thereafter, provided, however, that if there is no such numerically
corresponding day in such next, second, third or sixth succeeding month,
such Interest Period shall end on the last Business Day of such next,
second, third or sixth succeeding month. If an Interest Period would
otherwise end on a day which is not a Business Day, such Interest Period
shall end on the next succeeding Business Day, provided, however, that if
said next succeeding Business Day falls in a new calendar month, such
Interest Period shall end on the immediately preceding Business Day.
"Interest Rate Agreement" means any interest rate hedging agreement,
interest rate swap agreement, interest rate cap agreement, foreign
currency hedging agreement or other interest rate or foreign currency
protection agreement or arrangement designed to protect the Company
against fluctuations in interest rates or foreign currency values. (The
amount of the obligation under any Interest Rate Agreement shall be the
amount determined in respect thereof as of the end of the most recently
ended fiscal quarter of such Person, based on the assumption that such
Interest Rate Agreement had terminated at the end of such fiscal quarter,
and in making such determination, if any agreement relating to such
Interest Rate Agreement provides for the netting of amounts payable by and
to such Person thereunder or if any such agreement provides for the
simultaneous payment of amounts by and to such Person, then in each such
case, the amount of such obligation shall be the net amount so
determined.)
"Lenders" means the lending institutions listed on the signature pages of
this Agreement and their respective successors and assigns. Unless
otherwise specified, the term "Lenders" includes Bank One in its capacity
as Swing Line Lender.
"Lending Installation" means, with respect to a Lender or the Agent, the
office, branch, subsidiary or Affiliate of such Lender listed in the
signature pages or on a schedule or otherwise selected by such Lender or
Agent pursuant to Section 2.05(l).
"Letters of Credit" means all commercial and standby letters of credit
issued by Bank One pursuant to Section 2.03 of this Agreement, but also
including the Initial Letters of Credit. "Letter of Credit Exposure"
means, as of the date 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 been exhausted by the payment or acceptance
of Drafts thereunder or otherwise; plus
10
(b) the total dollar amount of (1) the amount of all Drafts under
Letters of Credit which have been honored by Bank One or which
Bank One has otherwise been required to pay but with respect
to which Bank One 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 Bank One but not honored by Bank One, which Bank
One (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 such term in Section
2.03(e) of this Agreement.
"Lien" means any mortgage, security interest, pledge, hypothecation,
assignment, deposit arrangement, encumbrance, lien (statutory or
otherwise) or other security interest or preferential arrangement of any
kind or nature whatsoever (including, without limitation, any conditional
sale or other title retention agreement, any financing or similar
statement or notice filed under the Uniform Commercial Code as in effect
in any jurisdiction, or any other similar recording or notice statute, and
any lease having substantially the same effect as the foregoing, but
excluding any equipment operating leases and any precautionary filings
related thereto).
"Loans" means, collectively, the Revolving Loans, the Swing Line Loans and
Letter of Credit Loans and, when used in the singular form, means any of
the Loans, as the context requires.
"Loan Documents" means, collectively, this Agreement, the Transfer
Agreement, the Revolving Notes, the Swing Line Note, the Company Security
Agreement, the Company Pledge Agreement, the Parent Guaranties, the Parent
Pledge Agreements, the Parent Security Agreements, the Subsidiary
Guaranties, the Subsidiary Security Agreements, any Intercreditor
Agreements, the Subordination Agreement any and all Reimbursement
Agreements, and any and all Interest Rate Agreements which have been made
and at any time from and after the Closing Date may be made between the
Company and any of the Lenders, and all other instruments, agreements and
documents executed and delivered or to be delivered by any Person pursuant
to or by virtue of this Agreement, as each of the foregoing 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.
"Maximum Availability" means $75,000,000.00 or such greater amount as may
be established pursuant to Section 2.02(g) of this Agreement. If an Event
of Default or an Unmatured Event of Default has occurred and is continuing
and the Agent shall have notified the Company of the election of the
Required Lenders to take any action specified in Section 7.02 of this
Agreement, the Maximum Availability shall be automatically reduced to zero
(0) dollars without any action on the part of or the giving of any
additional notice to the Company by the Lenders or the Agent.
11
"Maximum Revolver Availability" means, as of any date such amount is to be
determined, the Maximum Availability minus (i) the Letter of Credit
Exposure as of such date, and (ii) the aggregate principal balance of the
Swing Line Loans outstanding as of such date.
"New Acquisition" means the acquisition by the 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)
Financial Statements have been maintained for such Related Business Entity
for such periods preceding the acquisition as may be reasonably required
by the Agent; and (ii) the consummation of such acquisition on a pro forma
basis will not cause the occurrence of an Event of Default or an Unmatured
Event of Default, provided that, for purposes of determining satisfaction
of the condition stated in this clause (ii), the Ratio of Total Funded
Debt to EBITDA shall be calculated on pro forma basis by making New
Acquisition Adjustments giving effect to the proposed acquisition of such
Related Business Entity, (the "Qualification Condition"). An acquisition
which would otherwise qualify as a "New Acquisition" shall not so qualify
unless the Company shall have obtained from the Agent its confirmation
that the written submissions made to the Agent by the Company demonstrate
that the Qualifying Condition is fully met with respect to the proposed
acquisition. To obtain such confirmation from the Agent the Company shall
submit to the Agent such historical financial statements and pro forma
calculations of the Additional EBITDA Amount which will be applicable to
the proposed acquisition as the Agent may require.
"New Acquisition Adjustments" has the meaning ascribed to such term in the
definition of "Ratio of Total Funded Debt to EBITDA" herein.
"New Acquisition Closing Date" means the date on which a New Acquisition
is consummated.
"Notes" means, collectively, the Revolving Notes and the Swing Line Notes,
and when used in the singular, means any of the Notes, as the context
requires.
"Obligations" means all present and future indebtedness, obligations and
liabilities, and all renewals and extensions thereof, now or hereafter
owed to the Lenders or any of them or the Agent by the Company, whether
arising under, by virtue of or pursuant to this Agreement, any of the
Notes, any Reimbursement Agreement, any other Loan Document, or any of the
agreements contemplated by Section 9.14 of this Agreement, together with
all costs, expenses and reasonable attorneys' fees (including the
reasonable allocated costs of staff counsel) incurred by each of the
Lenders and by the Agent 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 any Lender owed to some other Person.
12
"Officer's Certificate" means a certificate in the form included as a part
of EXHIBIT C attached hereto signed by 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
Section 3.01(d) of this Agreement shall be construed so as to refer to the
latest Financial Statements which have been furnished to the Lenders as of
the date of any such certificate, (ii) the representations contained in
Section 3.01(k) (with respect to Hazardous Substances) will be construed
so as to apply not only to the Credit Parties, but also to their
respective Subsidiaries, whether now owned or hereafter acquired, (iii)
the representation contained in Section 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 Credit Parties with the consent of the Required
Lenders, and (iv) all other representations will be construed to have been
amended to conform with any changes of which the Credit Parties shall have
previously given the Lenders' 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 Credit
Parties to correct it.
"Outstanding Credit Exposure" means as to any Lender at any time, the sum
of (i) the aggregate principal amount of its Revolving Loans outstanding
at such time, plus (ii) an amount equal to its Commitment Percentage of
the Letter of Credit Exposure at such time, plus (iii) an amount equal to
its Commitment Percentage of the aggregate principal amount of Swing Line
Loans outstanding at such time.
"Parent Guaranties" means the Amended and Restated Guaranties dated as of
May 1, 2000, executed and delivered by each of VNGI and VNGDI in favor of
the Lenders, as the same has been or may be amended, modified, extended,
renewed, supplemented, replaced or restated from time to time, and "Parent
Guaranty" means either of them, as the context requires.
"Parent Pledge Agreements" means the Amended and Restated Pledge
Agreements dated as of May 1, 2000, executed by each of VNGI and VNGDI in
favor of the Agent for the benefit of the Lenders and the Agent, as the
same have been and hereafter may be amended, modified, supplemented,
replaced and/or restated from time to time and at any time, and "Parent
Pledge Agreement" means either of them, as the context requires.
"Parent Security Agreements" means the Amended and Restated Security
Agreements dated as of May 1, 2000, executed by each of VNGI and VNGDI in
favor of the Agent for the benefit of the Lenders and the Agent, as the
same have been and hereafter may be amended, modified, supplemented,
replaced and/or restated from time to time and at any time, and "Parent
Security Agreement" means either of them, as the context requires.
"Participant" has the meaning ascribed to such term in Section 10.02.
"Payment Date" means the last day of each calendar month.
13
"Permitted Asset Sales" means all sales and other dispositions by the
Company and its Subsidiaries of tangible assets (other than the sale of
inventory, cylinders and other equipment in the ordinary course of
business and other than Short-Term Real Estate Sales) permitted by the
terms of the Loan Documents.
"Person" shall mean an individual, a corporation, a limited or general
partnership, a limited liability company, a joint venture, a trust or
unincorporated organization, a joint 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 defined in ERISA.
"Pricing Schedule" means the Schedule attached hereto identified as such.
"Prime Rate" means a rate per annum equal to the prime rate of interest
announced from time to time by Bank One or its parent (which is not
necessarily the lowest rate charged to any customer), changing when and as
said prime rate changes.
"Purchaser" has the meaning ascribed to such term in Section 10.03.
"Ratio of Total Funded Debt to EBITDA" shall mean, for any period of four
consecutive fiscal quarters, the ratio of Total Funded Debt of the Credit
Parties and their respective Subsidiaries at the close of that period to
EBITDA of the Credit Parties and their respective Subsidiaries for that
period, computed on a consolidated basis and determined in accordance with
GAAP. For purposes of determining the Applicable Margin, the Applicable
Fee Rate and the Applicable L/C Fee Rate, and for purposes of Section
5.01(g)(2) of this Agreement, the Ratio of Total Funded Debt to EBITDA
shall be determined on the Closing Date on the basis of the consolidated
Financial Statements of the Credit Parties and their respective
Subsidiaries provided to the Lenders prior to the Closing Date for the
preceding period of four (4) quarters ending December 31, 2003, and
thereafter shall be redetermined and adjusted from and after the Closing
Date as provided in the Pricing Schedule, except as provided below.
Notwithstanding anything to the contrary in the Pricing Schedule, or in
Section 5.01(g)(2), for purposes of determining the Applicable Margin, the
Applicable Fee Rate, the Applicable L/C Fee Rate and compliance with
Section 5.01(g)(2) of this Agreement and for purposes of determining
satisfaction of the Qualifying Condition, the Ratio of Total Funded Debt
to EBITDA shall be redetermined and adjusted as necessary on each New
Acquisition Closing Date (or proposed New Acquisition Closing Date) on the
basis of the consolidated Financial Statements of the Credit Parties and
their respective Subsidiaries for the most recent period of four (4)
calendar quarters that precedes the New Acquisition Closing Date provided
to the Lenders pursuant to the requirements of Section 5.01(b) of this
Agreement, but giving effect on a pro forma basis to any Additional EBITDA
Amount, as provided in the definition of "EBITDA," and to changes in Total
Funded Debt occurring as a result of the New Acquisition consummated on
such New Acquisition Closing Date (a "New Acquisition Adjustment"), with
prospective
14
effect until the next adjustment is made pursuant to the Pricing Schedule,
but no New Acquisition Adjustment shall be effective as to any Eurodollar
Rate elected prior to the New Acquisition Date until the expiration of the
Interest Period for which such Eurodollar Rate shall have been elected by
the Company.
"Real Estate Leases" shall mean all non-cancellable leases of real
property or improvements or fixtures thereon, which leases, in conformity
with GAAP, are not required to be capitalized.
"Regulatory Change" means at any time after the Closing Date (a) any
change in existing, or any introduction or adoption of new, United States
federal, state or foreign laws, regulations, treaties or directives
(including Regulation D of the Board of Governors of the Federal Reserve
System), (b) any change in the interpretation of the foregoing by any
Governmental Authority charged with the administration or interpretation
thereof, or (c) any change in the manner in which existing guidelines of
any federal or state governmental authority are enforced.
"Reimbursement Agreement" has the meaning ascribed to such term in Section
2.03(a) of this Agreement.
"Related Business Entity" means an operating business 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 determination thereof is to
be made, that amount which results by subtracting from the Maximum
Availability at such time the Aggregate Outstanding Credit Exposure at
such time.
"Rent Expense" means for any fiscal period, the total amount of rents and
other charges payable during such period by the Credit Parties and their
respective Subsidiaries under all Real Estate Leases to which they are a
lessee, all as determined on a consolidated basis in accordance with GAAP.
"Required Lenders" means Lenders in the aggregate having at least 66.67%
of the Aggregate Commitment or, if the Aggregate Commitment has been
terminated, Lenders in the aggregate holding at least 66.67% of the
Aggregate Outstanding Credit Exposure; provided that, so long as there are
four (4) Lenders, the "Required Lenders" shall consist of not fewer than
three Lenders.
"Reserve Requirement" means, with respect to an Interest Period, the
maximum aggregate reserve requirement (including all basic, supplemental,
marginal, emergency and other reserves), imposed on Eurocurrency
liabilities under Regulation D of the Board of Governors of the Federal
Reserve System as from time to time in effect and any successor thereto or
other regulation or official interpretation of said Board of Governors
relating to reserve requirements applicable to member banks of the Federal
Reserve System.
15
"Revolving Loans" has the meaning ascribed to such term in Section 2.02(a)
of this Agreement.
"Revolving Loans Maturity Date" means the earlier of (i) the Scheduled
Revolving Loans Maturity Date, and (ii) that date upon which payment of
any of the Revolving Loans is accelerated in accordance with Section 7.02
of this Agreement.
"Revolving Notes" has the meaning ascribed to such term in Section 2.02(b)
of this Agreement, and "Revolving Note" means any one of the Revolving
Notes.
"Sale Value" means, with respect to any asset sold or otherwise disposed
of as a Permitted Asset Sale, the higher of: (i) the book value of the
asset on the books of the Company or its Subsidiary immediately prior to
such sale or other disposition, and (ii) the Asset Sale Payment received
with respect to such sale or other disposition.
"Scheduled Revolving Loans Maturity Date" means April 30, 2009, or such
later date as may be established pursuant to the terms of Section 2.02(f)
of this Agreement.
"Securities Commission" means the Securities and Exchange Commission or
any other Federal agency from time to time administering the Securities
Act of 1933, as amended.
"Short-Term Real Estate Sale" means any arms-length sale made by the
Company while there is no Event of Default or Unmatured Event of Default
(including any sale which is part of a sale-leaseback transaction) to a
Person who is not an Affiliate of the Company or any of the Guarantors, of
real estate (including improvements thereon) which has been owned by the
Company for less than one year, and the term "Short-Term Real Estate
Sales" means all of such sales, collectively.
"Stock Redemption Expense" means, with respect to any period, the total
cost incurred by VNGI in the purchase and redemption of any of its capital
stock at any time during such period, as such cost is determined in
accordance with GAAP.
"Subordination Agreement" means the Amended and Restated Subordination
Agreement dated as of May 1, 2000, executed by the Credit Parties in favor
of the Agent and the Lenders, as the same has been and hereafter may be
amended, modified, supplemented, replaced and/or restated from time to
time and at any time.
"Subsidiary" means, with respect to any Person, any corporation,
partnership, joint venture or other business entity over which such Person
exercises control, provided that it shall be conclusively presumed that
such Person exercises control over any such entity 51% or more of the
equity interest in which is owned by such Person, directly or indirectly.
"Subsidiary Guaranties" means, collectively, the guaranties executed and
delivered to the Agent by any Subsidiary of the Company pursuant to the
requirements of Section 4.01(f) of this Agreement, as the same may be
amended, modified, extended, renewed, supplemented, replaced and/or
restated from time to time and at any time, and the term "Subsidiary
Guaranty" means any of the Subsidiary Guaranties.
16
"Subsidiary Security Agreements" means, collectively the security
agreements executed and delivered to the Agent by any Subsidiary of the
Company pursuant to the requirements of Section 4.01(f) of this Agreement,
as the same may be amended, modified, supplemented, replaced and/or
restated from time to time and at any time, and the term "Subsidiary
Security Agreement" means any of the Subsidiary Security Agreements.
"Swing Line Borrowing Notice" is defined in Section 2.04(d).
"Swing Line Commitment" means the obligation of the Swing Line Lender to
make Swing Line Loans up to a maximum principal amount of $3,000,000.00 at
any one time outstanding.
"Swing Line Lender" means Bank One or such other Lender which may succeed
to its rights and obligations as Swing Line Lender pursuant to the terms
of this Agreement.
"Swing Line Loan" means a Loan made available to the Company by the Swing
Line Lender pursuant to Section 2.04.
"Swing Line Note" has the meaning ascribed to such term in Section
2.04(a).
"Term Loan" means the Term Loan extended to the Company pursuant to the
Prior Agreement.
"Total Funded Debt" means, with respect to the Credit Parties and their
respective Subsidiaries, as of the date any determination thereof is to be
made, all interest-bearing Debt of the Credit Parties and their respective
Subsidiaries (including all Acquisition Seller Debt or other subordinated
interest-bearing Debt), computed on a consolidated basis and determined in
accordance with GAAP.
"Transfer Agreement" has the meaning ascribed to such term in the Recitals
to this Agreement.
"Transferee" has the meaning ascribed to such term in Section 10.04.
"Type" means, with respect to any Advance, its nature as a Eurodollar
Advance or a Floating Rate Advance.
"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.
"Unused Revolving Loans Commitment" has the meaning ascribed to such term
in Section 2.02(e).
"VNGI" has the meaning ascribed to such term in the Recitals to this
Agreement.
"VNGDI" has the meaning ascribed to such term in the Recitals to this
Agreement.
17
"Voting Stock" means, in reference to the Company, all classes of capital
stock of the Company then outstanding and normally entitled (without
regard to the occurrence of any contingency) to vote in the election of
directors of the Company, and means, in reference to VNGDI, all classes of
capital stock of VNGDI then outstanding and normally entitled (without
regard to the occurrence of any contingency) to vote in the election of
directors of VNGDI.
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 and the other Credit Parties
made in this Agreement and the other Loan Documents, each Lender severally
agrees to make the Loans and issue or risk participate with respect to the
Letters of Credit as described in this Article II.
Section 2.02. The Revolving Loans.
(a) The Commitment -- Use of Proceeds. Each of the Lenders
severally agrees, subject to the terms and conditions of this Agreement, to make
Advances to the Company on a revolving basis (collectively, the "Revolving
Loans") from time to time from and after the Closing Date until the Revolving
Loans Maturity Date, provided that (i) the aggregate amount of all Revolving
Loans of any Lender outstanding at any time shall not exceed its Commitment,
(ii) the aggregate principal balance of all of the Revolving Loans outstanding
at any time shall not exceed the Maximum Revolver Availability, and the
aggregate principal balance of all Revolving Loans of each Lender outstanding at
any time shall not exceed such Lender's Commitment Percentage of the Maximum
Revolver Availability.
The Revolving Loans under this Agreement are a continuation, on
amended terms, of the "Revolving Loan" extended to the Company under the Prior
Agreement (the "Prior Revolving Loans") and the Company affirms, acknowledges
and agrees that the aggregate outstanding principal balance of the Prior
Revolving Loans as of the Closing Date is $__________________, being the unpaid
principal amount of the Prior Revolving Loans immediately prior to the execution
of this Agreement. On the Closing Date, subject to satisfaction of the
conditions in Section 6.01, the Lenders shall make an Advance in the sum of
$9,750,000.00, the proceeds of which shall be used to pay in full the Term Loan.
Thereafter, Revolving Loans may be used by the Company to fund working capital
requirements and for general corporate purposes.
(b) Borrowing. The obligation of the Company to repay the
Revolving Loans shall be evidenced by promissory notes executed by the Company
to each of the Lenders in the form of EXHIBIT A 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 Notes"). So long as no Event
of Default or Unmatured Event of Default shall have occurred and be continuing
and until the Revolving Loans Maturity Date, the Company may borrow, repay
(subject to the requirements of Section 2.05(c) of this Agreement) and reborrow
18
under the Revolving Notes on any Business Day, provided that Company shall not
be entitled to receive and the Lenders 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 amount of the Remaining Availability as of the date of such Advance; or
(iii) if after making such Advance the aggregate principal balance of the
Revolving Loans would exceed the Maximum Revolver Availability.
(c) Disbursement of Funds. The Company agrees that upon demand by
any Lender (which demand shall be accompanied by a statement setting forth the
basis for the calculations of the amount being claimed) the Company will
indemnify such Lender against any net loss or expense which such Lender sustains
or incurs, as reasonably determined by such Lender, as a result of any failure
of the Company to borrow any Advance on the Borrowing Date specified therefor in
a Borrowing Notice or telephonic request.
(d) Upfront Fee. On the Closing Date, the Company shall pay to the
Agent for the account of each Lender a commitment fee of .1% of the Aggregate
Commitment.
(e) Commitment Fee/Commitment Reduction. In addition to interest
accruing on the Revolving Loans, the Company shall pay to the Agent, for the pro
rata accounts of the Lenders, a commitment fee for each partial or full calendar
quarter from and after the Closing Date until the Revolving Loans Maturity Date
at a rate equal to the Applicable Fee Rate per annum on the daily Unused
Revolving Loans Commitment (as hereinafter defined) during each such quarter. As
used herein, the term "Unused Revolving Loans Commitment" means, for each day a
determination thereof is to be made, the positive excess, if any, which results
by subtracting from the Maximum Availability at the close of such day the
Aggregate Outstanding Credit Exposure at the close of such day. Commitment fees
for each calendar quarter and for the period ending on the Revolving Loan
Maturity Date shall be due and payable within ten (10) days following the
Agent's submission of a statement of the amount due. Such fees may be debited by
the Agent when due to any demand deposit account of the Company carried with the
Agent without further authority.
The Company may permanently reduce the Aggregate Commitment in whole
or in part, ratably among the Lenders, in integral multiples of $1,000,000, upon
at least one Business Days' written notice to the Agent, which notice shall
specify the amount of any such reduction, provided, however, that the amount of
the Aggregate Commitment may not be reduced below the Aggregate Outstanding
Credit Exposure. All accrued commitment fees shall be payable on the effective
date of any termination of the obligations of the Lenders to make Loans
hereunder.
(f) Extension of Scheduled Revolving Loans Maturity Date. Upon the
written request of the Company made not earlier than ninety (90) days nor later
than sixty (60) days prior to each anniversary of the Closing Date, and the
unanimous agreement of the Lenders (which approval and agreement by each Lender
is at the sole discretion of each such Lender) extend the Scheduled Revolving
Loans Maturity Date for a period of one additional year, and upon the unanimous
agreement in writing of the Lenders to any such one-year extension, the date to
which the Scheduled Revolving Loans Maturity Date is then extended will become
the "Scheduled Revolving Loans Maturity Date" for purposes of this Agreement.
19
(g) Increase of Commitment and Maximum Availability. The Company
may, at any time, request the Lenders in writing to increase the total
Commitments of the Lenders, provided that (i) such increase shall not cause the
aggregate Commitments to exceed One Hundred Million Dollars ($100,000,000.00),
and (ii) no Event of Default shall have occurred or be continuing. Any or all of
the Lenders may, but shall not be obligated to, increase its Commitment by all
or any portion of the additional amount requested. Immediately upon the
effectiveness of any such increase in the Commitments, each Lender's Revolving
Loans Commitment Percentage of the total Commitments for Revolving Loans shall
be automatically adjusted to reflect the same. In the event the Lenders agree to
increase the Commitments by less than all of the amount requested, the Company
may seek additional commitments in the amount of the difference between the
requested increase and the amount of increase in Commitments agreed to by the
Lenders, from one or more third party financial institutions provided that such
third party financial institutions are selected upon prior written notice to
Agent and would meet all qualifications of a Purchaser, were it at that time to
be a Purchaser, and such third party financial institutions shall become a party
to this Credit Agreement by an amendment in form and substance as required by
the Agent.
Section 2.03. Letters of Credit.
(a) Letters of Credit -- General. Bank One 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 commercial and standby letters 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 of the Company
other than Credit Enhancement (each a "Letter of Credit"), provided that:
(1) The aggregate Letter of Credit Exposure shall not at any
time exceed the lesser of (A) Twenty-Five Million Dollars
($25,000,000) or (B) the Maximum Availability at such time minus the
aggregate principal balance of all Revolving Loans and Swing Line
Loans outstanding at such time;
(2) No Letter of Credit shall have an expiry date later than
the earlier of (i) the fifth Business Day prior to the Scheduled
Revolving Loans Maturity Date, and (ii) one year after its issuance;
provided that any Letter of Credit with an expiry date one year
after the date of issuance may provide for renewals thereof for
additional one year periods if such renewals do not extend the
expiry date beyond the date that is five Business Days prior to the
Scheduled Revolving Loans Maturity Date.
(3) The Company shall not request and Bank One 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 Loans Maturity
Date; (iii) if, after giving effect to such issuance, the aggregate
Letter of Credit Exposure would exceed the lesser of (A) Twenty-Five
Million Dollars ($25,000,000) or (B) the Maximum Availability at
such time minus the then aggregate principal balance of all
Revolving Loans and Swing Line Loans outstanding at such time; (iv)
if the face amount of such
20
Letter of Credit would exceed the then outstanding Remaining
Availability; or (v) for any purpose other than those permitted
hereunder;
(4) Bank One in no event shall be obligated to issue any
Letter of Credit if the issuance of such Letter of Credit on the
terms requested would be contrary to, or in violation of the
policies of Bank One or any requirement of applicable law;
(5) The form of the requested Letter of Credit shall be
satisfactory to Bank One in the reasonable exercise of Bank One's
discretion; and
(6) If requested by Bank One, Bank One shall have received
from the Company an application and reimbursement agreement for the
Letter of Credit in form and substance satisfactory to Bank One 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 on behalf of the Company.
(b) Risk Participation. Each Lender (other than Bank One) hereby
agrees that, immediately upon the issuance of each Letter of Credit and as of
the Closing Date as to the Initial Letters of Credit, such Lender shall
purchase, and shall be deemed to have irrevocably purchased (without the
necessity of the execution or delivery by Bank One or such Lender of any further
or additional document evidencing such purchase) a risk participation in such
Letter of Credit and the obligations of Bank One with respect to Drafts
thereunder (including any Letter of Credit Loan), in an amount equal to such
Lender's Commitment Percentage.
(c) Letter of Credit Procedures. Whenever the Company desires the
issuance of a Letter of Credit, if requested by Bank One, the Company shall
deliver to Bank One not later than 11:30 a.m. (Chicago, Illinois time) at least
three Business Days (or such shorter period as may be agreed to by Bank One 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 Bank One, 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 Bank One,
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
Business Day following presentment of such Draft.
(d) Draws under Letters of Credit. Upon presentation of a Draft
under any Letter of Credit by the beneficiary thereof, Bank One shall notify the
Company and the Lenders of the receipt thereof ("Draft Notice") not later than
one Business Day prior to the date on which Bank One 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 or the obligations of
the Lenders hereunder. Upon receipt of the Draft Notice, the Company shall make
or cause to be made an irrevocable deposit with Bank One not later than 1:00
p.m., Chicago, Illinois time, one (1)
21
Business 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, Bank One 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.
(e) Reimbursement Obligations of the Company. The Company hereby
agrees to reimburse Bank One, on demand, the amount paid by Bank One to settle
its obligations in respect of each Draft under each Letter of Credit (whether
such amount is paid by virtue of Bank One's honor of any Draft or otherwise) to
the extent that a Reimbursement Amount is not available to Bank One 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 Bank One 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 Floating Rate plus Three Percent (3%) per annum. A demand for payment of
each Reimbursement Amount and Letter of Credit Loan shall be deemed to have been
made by Bank One on the date of the corresponding payment by Bank One 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
Loans to pay any Reimbursement Amount or Letter of Credit Loan.
The obligation of the Company to reimburse Bank One 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);
22
(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 Bank One 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
(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 Bank One
for any wrongful payment or disbursement made or to be made by Bank One under
any Letter of Credit as a result of acts or omissions constituting gross
negligence or willful misconduct on the part of Bank One. 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 Bank One if
such payment is made at the specific written request of the Company in which the
Company waives the non-compliance of the Draft.
Upon a written request by the Company, Bank One 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 non-compliance with the Company's
instructions or with the terms of the Letter of Credit, or of discrepancies or
other irregularities related solely to the Draft on the Letter of Credit, the
Company shall immediately notify Bank One thereof in writing, and the Company
shall be deemed to have waived any such claim or defense against Bank One
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 Bank One 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.
(f) Default by Company. In the event the Company fails to deposit
the Reimbursement Amount with Bank One, or if for any other reason the
Reimbursement Amount is not available to settle Bank One's obligations under a
Draft, the Agent shall make a demand on the Lenders for funding pursuant to this
section. Each Lender (other than Bank One) shall forthwith (and in any event,
not later than 1:00 p.m., Chicago, Illinois time, on the day the Agent
23
has indicated to the Lenders as the day such Draft is to be honored, or if such
demand is made after 10:00 a.m., Chicago, Illinois time on the day indicated for
honor of the Draft, then not later than 1:00 p.m., Chicago, Illinois time, on
the first Business Day immediately following the day such demand is made), make
available to the Agent at its principal banking offices immediately available
funds in an amount equal to its Commitment Percentage of the amount of the
Draft, which funds shall be immediately remitted by the Agent to Bank One to be
used by it to settle its obligations under such Draft. In addition, if for any
reason the Reimbursement Amount is recovered in whole or in part from the Agent
or Bank One or a recovery is obtained from the Agent or Bank One based on such
deposit, then the Agent shall make demand on each Lender for, and each Lender
shall pay to the Agent (for the account of Bank One if the recovery is obtained
from it) an amount equal to such Lender's Commitment Percentage of the amount of
the recovery (provided that Bank One shall not be required to make any such
payment in regard to an amount recovered from it). Each payment by a Lender to
the Agent pursuant to the preceding sentence of the amount of any Reimbursement
Amount recovered shall be deemed to be a Letter of Credit Loan payable with
interest as provided above. If for any reason the foregoing payments to the
Agent may not be deemed to be a Letter of Credit Loan, each payment by a Lender
to the Agent shall be considered to be the purchase of a participation in Bank
One's or the Agent's rights and claims arising as a result of such recovery, if
any, in an amount equal to such Lender's Commitment Percentage thereof.
(g) Indemnity. The Company agrees to protect, indemnify and save
Bank One and the Lenders 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 Bank One or any
of the other Lenders 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 gross negligence or willful misconduct of Bank One, as determined by a
court of competent jurisdiction, or (b) the failure of Bank One 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 de facto government or
governmental authority (all such acts or omissions herein called "Government
Acts").
As between the Company, on the one hand, and Bank One, on the other,
the Company assumes all risks of the acts and omissions of, or misuse of the
Letters of Credit by the respective beneficiaries of such Letters of Credit. In
furtherance and not in limitation of the foregoing, Bank One 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 agreement 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
24
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 Bank One, including,
without limitation, any Government Acts; and (i) for any action taken or omitted
by Bank One 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 Bank Ones' 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 Bank One, 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 Bank One to any resulting liability to the
Company. In furtherance thereof, Bank One 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 non-compliance 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.
(h) Letter of Credit Fees. The Company shall pay to the Agent, for
the accounts of the Lenders ratably according to their respective Commitment
Percentages, (i) with respect to each standby Letter of Credit, a letter of
credit fee at the Applicable L/C Fee Rate per annum on the average daily undrawn
stated amount under each such Letter of Credit, payable in arrears on the last
day of each calendar quarter, and (ii) with respect to each commercial Letter of
Credit or modification thereof, such fees as are customarily imposed by Bank One
in connection with the issuance (or modification, as applicable) of similar
letters of credit at the time such fee is to be imposed. Each such fee shall be
deemed fully earned and nonrefundable when due. Upon receipt of each such fee,
the Agent, Bank One shall disburse the fee to each Revolver Lender, including
Bank One, pro rata in accordance with each Revolver Lender's Revolving Loans
Commitment Percentage. The Company also shall pay to Bank One a fronting fee
equal to 0.125% of the amount of each Letter of Credit issued on or after the
Closing Date and all standard Bank One transaction fees with respect to any
transactions occurring on account of any Letter of Credit, including all
standard fees for issuance, amendment, cancellation, negotiation or transfer of
each Letter of Credit and with respect to each Draft thereon. Fronting fees and
transaction fees shall be payable upon completion of the transaction as to which
they are charged. All fees may be debited by Bank One to any deposit account of
the Company carried with Bank One without further authority, and in any event,
shall be paid by the Company within ten (10) days following billing. All
transaction fees and the fronting fees shall be retained by Bank One.
(i) Initial Letters of Credit. The Initial Letters of Credit shall
be deemed to be Letters of Credit for all purposes hereunder.
(j) Cash Collateral. The Company shall on the Revolving Loans
Maturity Date provide the Agent with Cash Collateral in a deposit or an
investment in United States government securities with the Agent which is
acceptable to the Agent and which is in the name of the Company but under the
sole and exclusive dominion and control of the Agent with respect
25
to which the Company has no authority to withdraw from, to draw upon, or
otherwise exercise any authority of any kind, in an amount equal to the
then-outstanding Letter of Credit Exposure. The Company hereby grants a security
interest in all of such Cash Collateral to the Agent, for the benefit of the
Agent and the Lenders, to secure the Obligations. If there is any Draft or other
liability of the Agent or Bank One under any Letter of Credit, the Agent shall
apply the Cash Collateral in reimbursement of any such Draft or other liability,
and otherwise may apply it to any of the Obligations. The Cash Collateral
provided to the Agent pursuant to this Section 2.03(j) shall be released to the
Company only upon full payment or satisfaction of all Obligations, including the
reduction of all Letter of Credit Exposure to zero. The Company agrees to
execute all agreements, documents and instruments requested by the Agent to
further evidence the security interest granted in the Cash Collateral pursuant
to this Section 2.03(j).
Section 2.04. Swing Line Loans.
(a) Amount of Swing Line Loans. Upon the satisfaction of the
conditions precedent set forth in Section 6.01, from and including the Closing
Date and prior to the Revolving Loans Maturity Date, the Swing Line Lender
agrees, on the terms and conditions set forth in this Agreement, to make Swing
Line Loans to the Company from time to time in an aggregate principal amount not
to exceed the Swing Line Commitment, provided that the Aggregate Outstanding
Credit Exposure shall not at any time exceed the Aggregate Commitment, and
provided further that at no time shall the Swing Line Lender's Outstanding
Credit Exposure exceed its Commitment at such time. Subject to the terms of this
Agreement, the Company may borrow, repay and reborrow Swing Line Loans at any
time prior to the Revolving Loans Maturity Date. Proceeds of Swing Line Loans
may be used by the Company to fund working capital requirements and for general
corporate purposes.
(b) Borrowing. The obligations of the Company to repay the Swing
Line Loans shall be evidenced by a promissory note executed by the Company to
the Swing Line Lender in the form of EXHIBIT B attached hereto (as the same may
be amended, modified, extended, renewed,, supplemented, replaced or restated
from time to time and at any time, the "Swing Line Note"). The Company shall
deliver to the Agent and the Swing Line Lender irrevocable notice (a "Swing Line
Borrowing Notice") not later than noon (Indianapolis time) on the Borrowing Date
of each Swing Line Loan, specifying (i) the applicable Borrowing Date (which
date shall be a Business Day), and (ii) the aggregate amount of the requested
Swing Line Loan which shall be an amount not less than $100,000.
(c) Making of Swing Line Loans. Promptly after receipt of a Swing
Line Borrowing Notice, the Agent shall notify each Lender by fax, or other
similar form of transmission, of the requested Swing Line Loan. Not later than
2:00 p.m. (Indianapolis time) on the applicable Borrowing Date, the Swing Line
Lender shall make available the Swing Line Loan, in funds immediately available
in Indianapolis, to the Agent at its address specified pursuant to Section 9.02.
The Agent will promptly make the funds so received from the Swing Line Lender
available to the Company on the Borrowing Date at the Agent's aforesaid address.
(d) Repayment of Swing Line Loans. Each Swing Line Loan shall be
paid in full by the Company on or before the fifth (5th) Business Day after the
Borrowing Date for such Swing Line Loan. In addition, the Swing Line Lender (i)
may at any time in its sole
26
discretion with respect to any outstanding Swing Line Loan, or (ii) shall on the
fifth (5th) Business Day after the Borrowing Date of any Swing Line Loan,
require each Lender (including the Swing Line Lender) to make a Revolving Loan
in the amount of such Lender's Commitment Percentage of such Swing Line Loan
(including, without limitation, any interest accrued and unpaid thereon), for
the purpose of repaying such Swing Line Loan. Not later than noon (Chicago time)
on the date of any notice received pursuant to this Section 2.04(d), each Lender
shall make available its required Revolving Loan, in funds immediately available
in Indianapolis to the Agent at its address specified pursuant to Section 9.02
Revolving Loans made pursuant to this Section 2.04(d) shall initially be
Floating Rate Loans and thereafter may be continued as Floating Rate Loans or
converted into Eurodollar Loans in the manner provided in Section 2.05(e) and
subject to the other conditions and limitations set forth in this Article II.
Unless a Lender shall have notified the Swing Line Lender, prior to its making
any Swing Line Loan, that any applicable condition precedent set forth in
Sections 6.01 had not then been satisfied, such Lender's obligation to make
Revolving Loans pursuant to this Section 2.04(d) to repay Swing Line Loans shall
be unconditional, continuing, irrevocable and absolute and shall not be affected
by any circumstances, including, without limitation, (a) any set-off,
counterclaim, recoupment, defense or other right which such Lender may have
against the Agent, the Swing Line Lender or any other Person, (b) the occurrence
or continuance of an Event of Default or Unmatured Event of Default, (c) any
adverse change in the condition (financial or otherwise) of the Company, or (d)
any other circumstances, happening or event whatsoever. In the event that any
Lender fails to make payment to the Agent of any amount due under this Section
2.04(d), the Agent shall be entitled to receive, retain and apply against such
obligation the principal and interest otherwise payable to such Lender hereunder
until the Agent receives such payment from such Lender or such obligation is
otherwise fully satisfied. In addition to the foregoing, if for any reason any
Lender fails to make payment to the Agent of any amount due under this Section
2.04(d), such Lender shall be deemed, at the option of the Agent, to have
unconditionally and irrevocably purchased from the Swing Line Lender, without
recourse or warranty, an undivided interest and participation in the applicable
Swing Line Loan in the amount of such Revolving Loan, and such interest and
participation may be recovered from such Lender together with interest thereon
at the Federal Funds Effective Rate for each day during the period commencing on
the date of demand and ending on the date such amount is received. On the
Revolving Loans Maturity Date, the Company shall repay in full the outstanding
principal balance of the Swing Line Loans.
Section 2.05. Provisions Applicable to All the Loans. The following
provisions are applicable to all the Loans:
(a) Types of Advances. The Advances may be Floating Rate Advances
or Eurodollar Advances, or a combination thereof, selected by the Company in
accordance with Sections 2.05(d) and (e), or Swing Line Loans selected by the
Company in accordance with Section 2.04.
(b) Minimum Amount of Each Advance. Each Eurodollar Advance shall
be in the minimum amount of $2,000,000.00 (and in multiples of $100,000.00 if in
excess thereof), and each Floating Rate Advance (other than a Swing Line Loan or
an Advance to repay Swing Line Loans) shall be in the minimum amount of
$1,000,000.00 (and in multiples of $100,000.00 if in excess thereof), provided,
however, that any Floating Rate Advance may be in the amount of the Remaining
Availability.
27
(c) Optional Principal Payments. The Company may from time to time
pay, without penalty or premium, all outstanding Floating Rate Advances (other
than Swing Line Loans), or, in a minimum aggregate amount of $1,000,000, any
portion of the outstanding Floating Rate Advances (other than Swing Line Loans)
upon notice to the Agent given not later than 12:00 p.m. (Indianapolis time), on
the date of payment. The Company may at any time pay, without penalty or
premium, all outstanding Swing Line Loans, or, in a minimum amount of $100,000
and increments of $50,000 in excess thereof, any portion of the outstanding
Swing Line Loans, upon notice to the Agent and the Swing Line Lender given not
later than 12:00 p.m. (Indianapolis time) on the date of payment. The Company
may from time to time pay, subject to the payment of any funding indemnification
amounts required by Section 2.11 but without penalty or premium, all outstanding
Eurodollar Advances, or, in a minimum aggregate amount of $1,000,000 or any
integral multiple of $100,000 in excess thereof, any portion of the outstanding
Eurodollar Advances upon three Business Days' prior notice to the Agent.
(d) Method of Selecting Types and Interest Periods for New
Advances. The Company shall select the Type of Advance and, in the case of each
Eurodollar Advance, the Interest Period applicable thereto from time to time.
The Company shall give the Agent irrevocable notice (a "Borrowing Notice") not
later than 12:00 p.m. (Indianapolis time) on the Borrowing Date of each Floating
Rate Advance and three Business Days before the Borrowing Date for each
Eurodollar Advance, specifying:
(i) the Borrowing Date, which shall be a Business Day, of
such Advance,
(ii) the aggregate amount of such Advance,
(iii) the Type of Advance selected, and
(iv) in the case of each Eurodollar Advance, the Interest
Period applicable thereto.
Not later than noon (Indianapolis time) on each Borrowing Date, each Lender
shall make available its Revolving Loan or Revolving Loans in funds immediately
available in Indianapolis to the Agent at its address specified pursuant to
Section 9.02. The Agent will make the funds so received from the Lenders
available to the Company at the Agent's aforesaid address.
(e) Conversion and Continuation of Outstanding Advances. Floating
Rate Advances (other than Swing Line Loans) shall continue as Floating Rate
Advances unless and until such Floating Rate Advances are converted into
Eurodollar Advances pursuant to this Section 2.05 or are repaid in accordance
with Sections 2.05(c) or 2.06. Each Eurodollar Advance shall continue as a
Eurodollar Advance until the end of the then applicable Interest Period
therefor, at which time such Eurodollar Advance shall be automatically converted
into a Floating Rate Advance unless (x) such Eurodollar Advance is or was repaid
in accordance with Sections 2.05(c) or 2.06 or (y) the Company shall have given
the Agent a Conversion/Continuation Notice (as defined below) requesting that,
at the end of such Interest Period, such Eurodollar Advance continue as a
Eurodollar Advance for the same or another Interest Period. Subject to the terms
of Section 2.05(b), the Company may elect from time to
28
time to convert all or any part of a Floating Rate Advance (other than a Swing
Line Loan) into a Eurodollar Advance. The Company shall give the Agent
irrevocable notice (a "Conversion/Continuation Notice") of each conversion of a
Floating Rate Advance into a Eurodollar Advance or continuation of a Eurodollar
Advance not later than 12:00 p.m. (Indianapolis time) at least three Business
Days prior to the date of the requested conversion or continuation, specifying:
(i) the requested date, which shall be a Business Day, of
such conversion or continuation,
(ii) the aggregate amount and Type of the Advance which is to
be converted or continued, and
(iii) the amount of such Advance which is to be converted into
or continued as a Eurodollar Advance and the duration of the
Interest Period applicable thereto.
(f) Changes in Interest Rate, etc. Each Floating Rate Advance
(other than a Swing Line Loan) shall bear interest on the outstanding principal
amount thereof, for each day from and including the date such Advance is made or
is automatically converted from a Eurodollar Advance into a Floating Rate
Advance pursuant to Section 2.05(e), to but excluding the date it is paid or is
converted into a Eurodollar Advance pursuant to Section 2.05(e) hereof, at a
rate per annum equal to the Floating Rate for such day. Each Swing Line Loan
shall bear interest on the outstanding principal amount thereof, for each day
from and including the day such Swing Line Loan is made to but excluding the
date it is paid, at a rate per annum equal to the Floating Rate for such day.
Changes in the rate of interest on that portion of any Advance maintained as a
Floating Rate Advance will take effect simultaneously with each change in the
Alternate Base Rate. Each Eurodollar Advance shall bear interest on the
outstanding principal amount thereof from and including the first day of the
Interest Period applicable thereto to (but not including) the last day of such
Interest Period at the interest rate determined by the Agent as applicable to
such Eurodollar Advance based upon the Company's selections under Sections
2.05(d) and 2.05(e) and otherwise in accordance with the terms hereof. No
Interest Period may end after the Scheduled Revolving Loans Maturity Date.
(g) Rates Applicable After Default. Notwithstanding anything to
the contrary contained in Sections 2.05(a), (e) or (f), during the continuance
of an Event of Default or Unmatured Event of Default the Required Lenders may,
at their option, by notice to the Company which notice may be revoked at the
option of the Required Lenders notwithstanding any provision of Section 9.10
requiring unanimous consent of the Lenders to changes in interest rates) declare
that no Advance may be made as, converted into or continued as a Eurodollar
Advance. During the continuance of an Event of Default the Required Lenders may,
at their option, by notice to the Company which notice may be revoked at the
option of the Required Lenders notwithstanding any provision of Section 9.10
requiring unanimous consent of the Lenders to changes in interest rates) declare
that (i) each Eurodollar Advance shall bear interest for the remainder of the
applicable Interest Period at the rate otherwise applicable to such Interest
Period plus 2% per annum and (ii) each Floating Rate Advance shall bear interest
at a rate per annum equal to the Floating Rate in effect from time to time plus
2% per annum,
29
provided that, during the continuance of an Event of Default under Section
7.01(d), the interest rates set forth in clauses (i) and (ii) above shall be
applicable to all Advances without any election or action on the part of the
Agent or any Lender.
(h) Method of Payment. All payments of the Obligations hereunder
shall be made, without setoff, deduction, or counterclaim, in immediately
available funds to the Agent at Bank One, NA, ABA #0074000010, Attn.: Commercial
Loan Note Servicing, Re: Valley National Gases, Inc., Obligor No. 0000000000,
Account number 05315101000263, or at any other Lending Installation of the Agent
specified in writing by the Agent to the Company, by noon (Indianapolis time) on
the date when due and shall (except with respect to repayments of Swing Line
Loans) be applied ratably by the Agent among the Lenders. Each payment delivered
to the Agent for the account of any Lender by noon (Indianapolis time) shall be
delivered by the Agent to such Lender on the date of receipt, or if received
after noon (Indianapolis time), by noon (Indianapolis time) on the next
succeeding Business Day (it being understood that any payment received after
noon (Indianapolis time) on any day shall be deemed to have been received on the
next succeeding Business Day for purposes of computing interest), in each case
in the same type of funds that the Agent received, at its address specified
pursuant to Section 9.02 or at any Lending Installation specified in a notice
received by the Agent from such Lender. The Agent is hereby authorized to charge
the account of the Company maintained with Bank One for each payment of
principal, interest and fees as it becomes due hereunder. All payments of the
Obligations shall be made without relief from valuation and appraisement laws.
(i) Telephonic Notices. The Company hereby authorizes the Lenders
and the Agent to extend, convert or continue Advances, effect selections of
Types of Advances and to transfer funds based on telephonic notices made by any
person or persons the Agent or any Lender in good faith believes to be acting on
behalf of the Company, it being understood that the foregoing authorization is
specifically intended to allow Borrowing Notices and Conversion/Continuation
Notices to be given telephonically. The Company agrees to deliver promptly to
the Agent a written confirmation, if such confirmation is requested by the Agent
or any Lender, of each telephonic notice signed by an Authorized Officer. If the
written confirmation differs in any material respect from the action taken by
the Agent and the Lenders, the records of the Agent and the Lenders shall govern
absent manifest error.
(j) Interest Payment Dates; Interest and Fee Basis. Interest
accrued on each Floating Rate Advance shall be payable on each Payment Date,
commencing with the first such date to occur after the date hereof and at
maturity. Interest accrued on each Eurodollar Advance shall be payable on the
last day of its applicable Interest Period, on any date on which the Eurodollar
Advance is prepaid, whether by acceleration or otherwise, and at maturity.
Interest accrued on each Eurodollar Advance having an Interest Period longer
than three months shall also be payable on the last day of each three-month
interval during such Interest Period. Interest on Eurodollar Advances and
commitment and letter of credit fees shall be calculated for actual days elapsed
on the basis of a 360-day year. Interest on Floating Rate Advances shall be
calculated for actual days elapsed on the basis of a 365, or when appropriate,
366 day year. Interest shall be payable for the day an Advance is made but not
for the day of any payment on the amount paid if payment is received prior to
noon (local time) at the place of payment. If any payment of principal of or
interest on an Advance or of any fees shall become due on a day which is not a
Business Day, such payment shall be made on the next succeeding Business Day
30
and, in the case of a principal payment, such extension of time shall be
included in computing interest in connection with such payment.
(k) Notification of Advances, Interest Rates, Prepayments and
Commitment Reductions. Promptly after receipt thereof, the Agent will notify
each Lender of the contents of each Aggregate Commitment reduction notice,
Borrowing Notice, Swing Line Borrowing Notice, Conversion/Continuation Notice,
and repayment notice received by it hereunder. The Agent will notify each Lender
of the interest rate applicable to each Eurodollar Advance promptly upon
determination of such interest rate and will give each Lender prompt notice of
each change in the Alternate Base Rate.
(l) Lending Installations. Each Lender may book its Loans at any
Lending Installation selected by such Lender and may change its Lending
Installation from time to time. All terms of this Agreement shall apply to any
such Lending Installation and the Loans and any Notes issued hereunder shall be
deemed held by each Lender for the benefit of any such Lending Installation.
Each Lender may, by written notice to the Agent and the Company in accordance
with Section 9.02, designate replacement or additional Lending Installations
through which Loans will be made by it and for whose account Loan payments are
to be made.
(m) Non-Receipt of Funds by the Agent. Unless the Company or a
Lender, as the case may be, notifies the Agent prior to the date on which it is
scheduled to make payment to the Agent of (i) in the case of a Lender, the
proceeds of a Loan or (ii) in the case of the Company, a payment of principal,
interest or fees to the Agent for the account of the Lenders, that it does not
intend to make such payment, the Agent may assume that such payment has been
made. The Agent may, but shall not be obligated to, make the amount of such
payment available to the intended recipient in reliance upon such assumption. If
such Lender or the Company, as the case may be, has not in fact made such
payment to the Agent, the recipient of such payment shall, on demand by the
Agent, repay to the Agent the amount so made available together with interest
thereon in respect of each day during the period commencing on the date such
amount was so made available by the Agent until the date the Agent recovers such
amount at a rate per annum equal to (x) in the case of payment by a Lender, the
Federal Funds Effective Rate for such day for the first three days and,
thereafter, the interest rate applicable to the relevant Loan or (y) in the case
of payment by the Company, the interest rate applicable to the relevant Loan.
(n) Replacement of Lender. If the Company is required pursuant to
Section 2.08, 2.09 or 2.12 to make any additional payment to any Lender or if
any Lender's obligation to make or continue, or to convert Floating Rate
Advances into, Eurodollar Advances shall be suspended pursuant to Section 2.10
(any Lender so affected an "Affected Lender"), the Company may elect, if such
amounts continue to be charged or such suspension is still effective, to replace
such Affected Lender as a Lender party to this Agreement, provided that no
Default or Unmatured Default shall have occurred and be continuing at the time
of such replacement, and provided further that, concurrently with such
replacement, (i) another bank or other entity which is reasonably satisfactory
to the Company and the Agent shall agree, as of such date, to purchase for cash
the Advances and other Obligations due to the Affected Lender pursuant to an
assignment substantially in the form of Exhibit D and to become a Lender for all
purposes under this Agreement and to assume all obligations of the Affected
Lender to be terminated as of such date and to comply with the requirements of
Section 10.03 applicable to assignments, and (ii) the
31
Company shall pay to such Affected Lender in same day funds on the day of such
replacement (A) all interest, fees and other amounts then accrued but unpaid to
such Affected Lender by the Company hereunder to and including the date of
termination, including without limitation payments due to such Affected Lender
under Sections 2.08, 2.09 or 2.12, and (B) an amount, if any, equal to the
payment which would have been due to such Lender on the day of such replacement
under Section 2.11 had the Loans of such Affected Lender been prepaid on such
date rather than sold to the replacement Lender.
Section 2.06. Mandatory Prepayment/Reduction of Maximum
Availability.
(a) If at any time the Aggregate Outstanding Credit Exposure
exceeds the Maximum Availability at such time, the Company shall immediately
repay the Advances in an aggregate principal amount, equal to such excess,
together with any additional amounts that may be required in connection with
such repayment.
If an Event of Default or an Unmatured Event of Default has occurred
and is continuing and the Agent shall have notified the Company of the Required
Lenders' 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 Agent or
the Lenders.
(b) The Company or any Subsidiary of the Company making a
Permitted Asset Sale in any fiscal year of the Company shall pay to the Agent,
concurrently with the consummation of such Permitted Asset Sale, a payment
("Asset Sale Payment") in an amount equal to one hundred percent (100%) of the
gross amount realized upon such Permitted Asset Sale and all other Permitted
Asset Sales previously consummated by the Company or any Subsidiary of the
Company during such fiscal year (in each case net only of reasonable and
customary selling costs and expenses actually incurred by the seller) minus the
sum of (i) $2,000,000; and (ii) the amount of all Asset Sale Payments previously
made to the Agent with respect to Permitted Asset Sales consummated during such
fiscal year. Each Asset Sale Payment shall first be applied to the Swing Line
Loans, and to the extent any balance remains after payment of the Swing Line
Loans in full, shall be applied pro rata against the outstanding principal
balance of the Revolving Loans, with the Maximum Availability to be
automatically and concurrently reduced permanently by the amount so applied
against the Revolving Loans. To the extent that any balance of the Asset Sale
Payment remains unapplied after application against the Swing Line Loans and the
Revolving Loans, it shall be held by the Agent as Cash Collateral to secure
payment of any Letter of Credit Exposure then existing.
Section 2.07. Ratable Payments.
(a) In addition to, and without limitation of, any rights of the
Lenders under applicable law, if the Company becomes insolvent, however
evidenced, or any Default occurs, any and all deposits (including all account
balances, whether provisional or final and whether or not collected or
available) and any other Indebtedness at any time held or owing by any Lender or
any Affiliate of any Lender to or for the credit or account of the Company may
be offset and applied toward the payment of the Obligations owing to such
Lender, whether or not the Obligations, or any part thereof, shall then be due.
32
(b) If any Lender, whether by setoff or otherwise, has payment
made to it upon its Loans (other than payments received pursuant to Section
2.08, 2.09, 2.11 or 2.12 in a greater proportion than that received by any other
Lender, such Lender agrees, promptly upon demand, to purchase a portion of the
Loans held by the other Lenders so that after such purchase each Lender will
hold its ratable proportion of Loans. If any Lender, whether in connection with
setoff or amounts which might be subject to setoff or otherwise, receives
collateral or other protection for its Obligations or such amounts which may be
subject to setoff, such Lender agrees, promptly upon demand, to take such action
necessary such that all Lenders share in the benefits of such collateral ratably
in proportion to their Loans. In case any such payment is disturbed by legal
process, or otherwise, appropriate further adjustments shall be made.
Section 2.08. Yield Protection. If, on or after the date of this
Agreement, the adoption of any law or any governmental or quasi-governmental
rule, regulation, policy, guideline or directive (whether or not having the
force of law), or any change in the interpretation or administration thereof by
any governmental or quasi-governmental authority, central bank or comparable
agency charged with the interpretation or administration thereof, or compliance
by any Lender or applicable Lending Installation with any request or directive
(whether or not having the force of law) of any such authority, central bank or
comparable agency:
(i) subjects any Lender or any applicable Lending Installation to any
Taxes, or changes the basis of taxation of payments (other than with
respect to Excluded Taxes) to any Lender in respect of its
Eurodollar Loans, or
(ii) imposes or increases or deems applicable any reserve, assessment,
insurance charge, special deposit or similar requirement against
assets of, deposits with or for the account of, or credit extended
by, any Lender or any applicable Lending Installation (other than
reserves and assessments taken into account in determining the
interest rate applicable to Eurodollar Advances), or
(iii) imposes any other condition the result of which is to increase the
cost to any Lender or any applicable Lending Installation of making,
funding or maintaining its Eurodollar Loans or reduces any amount
receivable by any Lender or any applicable Lending Installation in
connection with its Eurodollar Loans, or requires any Lender or any
applicable Lending Installation to make any payment calculated by
reference to the amount of Eurodollar Loans held or interest
received by it, by an amount deemed material by such Lender,
and the result of any of the foregoing is to increase the cost to such Lender or
applicable Lending Installation of making or maintaining its Eurodollar Loans or
Commitment or to reduce the return received by such Lender or applicable Lending
Installation in connection with such Eurodollar Loans or Commitment, then,
within 15 days of demand by such Lender, the Company shall pay such Lender such
additional amount or amounts as will compensate such Lender for such increased
cost or reduction in amount received.
Section 2.09. Changes in Capital Adequacy Regulations. If a Lender
determines the amount of capital required or expected to be maintained by such
Lender, any Lending
33
Installation of such Lender or any corporation controlling such Lender is
increased as a result of a Change, then, within 15 days of demand by such
Lender, the Company shall pay such Lender the amount necessary to compensate for
any shortfall in the rate of return on the portion of such increased capital
which such Lender determines is attributable to this Agreement, its Loans or its
Commitment to make Loans hereunder (after taking into account such Lender's
policies as to capital adequacy). "Change" means (i) any change after the date
of this Agreement in the Risk-Based Capital Guidelines or (ii) any adoption of
or change in any other law, governmental or quasi-governmental rule, regulation,
policy, guideline, interpretation, or directive (whether or not having the force
of law) after the date of this Agreement which affects the amount of capital
required or expected to be maintained by any Lender or any Lending Installation
or any corporation controlling any Lender. "Risk-Based Capital Guidelines" means
(i) the risk-based capital guidelines in effect in the United States on the date
of this Agreement, including transition rules, and (ii) the corresponding
capital regulations promulgated by regulatory authorities outside the United
States implementing the July 1988 report of the Basle Committee on Banking
Regulation and Supervisory Practices Entitled "International Convergence of
Capital Measurements and Capital Standards," including transition rules, and any
amendments to such regulations adopted prior to the date of this Agreement.
Section 2.10. Availability of Types of Advances. If any Lender
determines that maintenance of its Eurodollar Loans at a suitable Lending
Installation would violate any applicable law, rule, regulation, or directive,
whether or not having the force of law, or if the Required Lenders determine
that (i) deposits of a type and maturity appropriate to match fund Eurodollar
Advances are not available or (ii) the interest rate applicable to Eurodollar
Advances does not accurately reflect the cost of making or maintaining
Eurodollar Advances, then the Agent shall suspend the availability of Eurodollar
Advances and require any affected Eurodollar Advances to be repaid or converted
to Floating Rate Advances, subject to the payment of any funding indemnification
amounts required by Section 2.11.
Section 2.11. Funding Indemnification. If any payment of a
Eurodollar Advance occurs on a date which is not the last day of the applicable
Interest Period, whether because of acceleration, prepayment or otherwise, or a
Eurodollar Advance is not made on the date specified by the Company for any
reason other than default by the Lenders, the Company will indemnify each Lender
for any loss or cost incurred by it resulting therefrom, including, without
limitation, any loss or cost in liquidating or employing deposits acquired to
fund or maintain such Eurodollar Advance.
Section 2.12. Taxes.
(a) All payments by the Company to or for the account of any
Lender or the Agent hereunder or under any Note shall be made free and clear of
and without deduction for any and all Taxes. If the Company shall be required by
law to deduct any Taxes from or in respect of any sum payable hereunder to any
Lender or the Agent, (i) the sum payable shall be increased as necessary so that
after making all required deductions (including deductions applicable to
additional sums payable under this Section 2.12) such Lender or the Agent (as
the case may be) receives an amount equal to the sum it would have received had
no such deductions been made, (ii) the Company shall make such deductions, (iii)
the Company shall pay the full amount deducted to the relevant authority in
accordance with applicable law and (iv) the
34
Company shall furnish to the Agent the original copy of a receipt evidencing
payment thereof within 30 days after such payment is made.
(b) In addition, the Company hereby agrees to pay any present or
future stamp or documentary taxes and any other excise or property taxes,
charges or similar levies which arise from any payment made hereunder or under
any Note or from the execution or delivery of, or otherwise with respect to,
this Agreement or any Note ("Other Taxes").
(c) The Company hereby agrees to indemnify the Agent and each
Lender for the full amount of Taxes or Other Taxes (including, without
limitation, any Taxes or Other Taxes imposed on amounts payable under this
Section 2.12) paid by the Agent or such Lender as a result of its Commitment,
any Loans made by it hereunder, or otherwise in connection with its
participation in this Agreement and any liability (including penalties, interest
and expenses) arising therefrom or with respect thereto. Payments due under this
indemnification shall be made within 30 days of the date the Agent or such
Lender makes demand therefor pursuant to Section 2.12.
(d) Each Lender that is not incorporated under the laws of the
United States of America or a state thereof (each a "Non-U.S. Lender") agrees
that it will, not more than ten Business Days after the date of this Agreement,
(i) deliver to the Agent two duly completed copies of United States Internal
Revenue Service Form W-8BEN or W-8ECI, certifying in either case that such
Lender is entitled to receive payments under this Agreement without deduction or
withholding of any United States federal income taxes, and (ii) deliver to the
Agent a United States Internal Revenue Form W-8 or W-9, as the case may be, and
certify that it is entitled to an exemption from United States backup
withholding tax. Each Non-U.S. Lender further undertakes to deliver to each of
the Company and the Agent (x) renewals or additional copies of such form (or any
successor form) on or before the date that such form expires or becomes
obsolete, and (y) after the occurrence of any event requiring a change in the
most recent forms so delivered by it, such additional forms or amendments
thereto as may be reasonably requested by the Company or the Agent. All forms or
amendments described in the preceding sentence shall certify that such Lender is
entitled to receive payments under this Agreement without deduction or
withholding of any United States federal income taxes, unless an event
(including without limitation any change in treaty, law or regulation) has
occurred prior to the date on which any such delivery would otherwise be
required which renders all such forms inapplicable or which would prevent such
Lender from duly completing and delivering any such form or amendment with
respect to it and such Lender advises the Company and the Agent that it is not
capable of receiving payments without any deduction or withholding of United
States federal income tax.
(e) For any period during which a Non-U.S. Lender has failed to
provide the Company with an appropriate form pursuant to clause (d), above
(unless such failure is due to a change in treaty, law or regulation, or any
change in the interpretation or administration thereof by any governmental
authority, occurring subsequent to the date on which a form originally was
required to be provided), such Non-U.S. Lender shall not be entitled to
indemnification under this Section 2.12 with respect to Taxes imposed by the
United States; provided that, should a Non-U.S. Lender which is otherwise exempt
from or subject to a reduced rate of withholding tax become subject to Taxes
because of its failure to deliver a form required under clause (d), above,
35
the Company shall take such steps as such Non-U.S. Lender shall reasonably
request to assist such Non-U.S. Lender to recover such Taxes.
(f) Any Lender that is entitled to an exemption from or reduction
of withholding tax with respect to payments under this Agreement or any Note
pursuant to the law of any relevant jurisdiction or any treaty shall deliver to
the Company (with a copy to the Agent), at the time or times prescribed by
applicable law, such properly completed and executed documentation prescribed by
applicable law as will permit such payments to be made without withholding or at
a reduced rate.
(g) If the U.S. Internal Revenue Service or any other governmental
authority of the United States or any other country or any political subdivision
thereof asserts a claim that the Agent did not properly withhold tax from
amounts paid to or for the account of any Lender (because the appropriate form
was not delivered or properly completed, because such Lender failed to notify
the Agent of a change in circumstances which rendered its exemption from
withholding ineffective, or for any other reason), such Lender shall indemnify
the Agent fully for all amounts paid, directly or indirectly, by the Agent as
tax, withholding therefor, or otherwise, including penalties and interest, and
including taxes imposed by any jurisdiction on amounts payable to the Agent
under this subsection, together with all costs and expenses related thereto
(including attorneys fees and time charges of attorneys for the Agent, which
attorneys may be employees of the Agent). The obligations of the Lenders under
this Section 2.12 (g) shall survive the payment of the Obligations and
termination of this Agreement.
Section 2.13. Lender Statements; Survival of Indemnity. To the
extent reasonably possible, each Lender shall designate an alternate Lending
Installation with respect to its Eurodollar Loans to reduce any liability of the
Company to such Lender under Sections 2.08, 2.09 and 2.12 or to avoid the
unavailability of Eurodollar Advances under Section 2.10, so long as such
designation is not, in the judgment of such Lender, disadvantageous to such
Lender. Each Lender shall deliver a written statement of such Lender to the
Company (with a copy to the Agent) as to the amount due, if any, under Section
2.08, 2.09, 2.11 or 2.12. Such written statement shall set forth in reasonable
detail the calculations upon which such Lender determined such amount and shall
be final, conclusive and binding on the Company in the absence of manifest
error. Determination of amounts payable under such Sections in connection with a
Eurodollar Loan shall be calculated as though each Lender funded its Eurodollar
Loan through the purchase of a deposit of the type and maturity corresponding to
the deposit used as a reference in determining the Eurodollar Rate applicable to
such Loan, whether in fact that is the case or not. Unless otherwise provided
herein, the amount specified in the written statement of any Lender shall be
payable on demand after receipt by the Company of such written statement. The
obligations of the Company under Sections 2.08, 2.10, 2.11 and 2.12 shall
survive payment of the Obligations and termination of this Agreement.
36
ARTICLE III.
REPRESENTATIONS AND WARRANTIES
Section 3.01. REPRESENTATIONS AND WARRANTIES. To induce the Lenders
to make the Loans, each of the Credit Parties represents and warrants to each of
the Lenders and the Agent that:
(a) Organization of the Company. The Company is a corporation
organized, existing and in good standing under the laws of the State of West
Virginia. VNGI is a corporation organized, existing and in good standing under
the laws of the State of Pennsylvania. VNGDI is a corporation organized,
existing and in good standing under the laws of the State of Delaware. Each of
the Credit Parties and their respective Subsidiaries is qualified to do 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 its title to material properties or its right to enforce
material contracts or result in its exposure to liability for material penalties
in such jurisdiction. No jurisdiction in which the Credit Parties or any of
their respective Subsidiaries is not qualified to do business has asserted that
the Credit Parties or any of their respective Subsidiaries 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
principal office and chief executive office of VNGI is located at 0000 Xxxxxxxxx
Xxxxxx, Xxxxxxxxxx, Xxxxxxxxxxxx 00000. The principal office and chief executive
office of VNGDI is located at 0000 X. Xxxxxx Xxxxxxx, Xxxxx, Xxxxxxxx 00000.
Neither the Credit Parties nor any of their respective Subsidiaries nor any
Guarantor conducts any material operations or keeps any material amounts of
property at any location other than the locations specified in the Security
Agreement or Guarantor Security Agreement to which it is a party. Neither the
Credit Parties nor any of their respective Subsidiaries nor any Guarantor has
done business under any name other than its present corporate name at any time
during the six years preceding the Closing Date except as disclosed in the
Security Agreement or Guarantor Security Agreement to which it is a party.
(b) Authorization; No Conflict. The execution, delivery and
performance of this Agreement and all of the other Loan Documents to which it is
a party are within the corporate powers of each of the Credit Parties and each
Guarantor, 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 its articles of
incorporation or its by-laws or of any agreement binding upon it or its
properties.
(c) Validity and Binding Nature. This Agreement and all of the
other Loan Documents to which it is a party are the legal, valid and binding
obligations of each of the Credit Parties and each Guarantor, enforceable
against it 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.
37
(d) Financial Statements. The Credit Parties have delivered to the
Agent and the Lenders their audited, consolidated Financial Statements as of
June 30, 2003, and for the fiscal year of the Company then ended and their
unaudited consolidated interim Financial Statements as of December 31, 2003, 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 Credit Parties and their respective
Subsidiaries as of the dates thereof and the results of its and their operations
for the periods covered. Since the date of the most current Financial Statement
provided by the Credit Parties to the Lender there has been no material adverse
change in the financial position of the Credit Parties or their respective
Subsidiaries or in the results of its and their operations.
(e) Litigation and Contingent Liabilities. Except as set forth on
Schedule 3.01(e) to this Agreement, no litigation, arbitration proceedings or
governmental proceedings are pending or to the best of the knowledge of the
Credit Parties threatened against the Credit Parties or their respective
Subsidiaries or any Guarantor or any material assets owned thereby which would,
if adversely determined, materially and adversely affect the financial position
or continued operations of the Credit Parties or their respective Subsidiaries
or any Guarantor or which any of the Credit Parties is required by applicable
law to disclose in any filing of a Form 10-K or Form 10-Q with the United States
Securities and Exchange Commission. None of the Credit Parties or their
respective Subsidiaries or any Guarantor has any material contingent liabilities
not provided for or disclosed in the Financial Statements referred to in Section
3.01(d) of this Agreement or on Schedule 3.01(e) attached hereto.
(f) Liens. Each of the Credit Parties and their respective
Subsidiaries has good title to all of its assets and properties reflected in the
most recent Financial Statements provided to the Agent. None of the assets of
the Credit Parties or their respective Subsidiaries or any Guarantor are subject
to any mortgage, pledge, title retention lien, judgment lien, execution lien, or
other lien, encumbrance or security interest except for liens and security
interests described in Sections 5.02(b)(1) through (7) of this Agreement.
(g) Employee Benefit Plans. Each Plan maintained by the Credit
Parties and their respective Subsidiaries and each Guarantor is in material
compliance with ERISA, the Code, and all applicable rules and regulations
adopted by regulatory authorities pursuant thereto, and the Credit Parties and
their respective Subsidiaries and each Guarantor each has filed all reports and
returns required to be filed by ERISA, the Code and such rules and regulations.
No Plan maintained by the Credit Parties or any of their respective Subsidiaries
and each Guarantor and no trust created under any such Plan has incurred any
"accumulated funding deficiency" within the meaning of Section 412(c)(1) 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. None of the Credit Parties
or any of their respective Subsidiaries or any Guarantor has any knowledge that
any "reportable event" as defined in ERISA has occurred with respect to any
Plan.
(h) Payment of Taxes. Each Credit Party, and each of their
respective Subsidiaries and each Guarantor has filed all federal, state and
local tax returns and tax related
38
reports which the Credit Parties and their respective Subsidiaries and each
Guarantor are 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. None of the Credit Parties or their
respective Subsidiaries or any Guarantor is 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. None of the Credit Parties or their respective
Subsidiaries or any Guarantor is 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 percent (25%)
of the assets of the Credit Parties or their respective Subsidiaries or any
Guarantor consists of margin stock, within the contemplation of Regulation U, as
amended.
(k) Hazardous Substances. Except as disclosed on Schedule 3.01(k)
attached hereto, to the best knowledge of each of the Credit Parties (i) no
premises owned or occupied by or under lease to any of the Credit Parties or
their respective Subsidiaries or any Guarantor have ever been used, and as of
the Closing Date, 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
Closing Date. VNGI has no Subsidiaries as of the Closing Date, other than VNGDI.
VNGDI has no Subsidiaries as of the Closing Date, other than the Company.
(m) Existing Seller Acquisition Debt. The nature and outstanding
balances of the Existing Seller Acquisition Debt identified on Schedule 3.01(m)
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. None of the Credit Parties or their
respective Subsidiaries or any Guarantor is in default under any of its leases
of real estate.
(o) Parent Assets. Neither of VNGI nor VNGDI own any assets other
than cash, intercompany receivables and Common Stock of their respective
Subsidiaries.
(p) Compliance With Laws. The Credit Parties have complied with
all applicable statutes, rules, regulations, orders and restrictions of any
domestic or foreign government or any instrumentality or agency thereof having
jurisdiction over the conduct of their respective businesses or the ownership of
their respective properties except for any failure to comply with any of the
foregoing which could not reasonably be expected to have a material adverse
effect.
39
(q) Default. No Event of Default or Unmatured Event of Default has
occurred and is continuing.
(r) Insurance. The Credit Parties maintain insurance policies and
programs reasonably consistent with prudent industry practice.
(s) Accuracy of Information. The information, exhibits and reports
(other than projections) furnished by or on behalf of the Credit Parties and any
of their Subsidiaries to the Agent and Lenders in connection with the
negotiation of, or compliance with, the Loan Documents, the representations and
warranties of the Credit Parties contained in the Loan Documents, and all
certificates and documents delivered to the Agent and Lenders pursuant to the
terms thereof (other than projections), taken as a whole, do not contain as of
the date furnished any untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements contained herein or
therein, in light of the circumstances under which they were made, not
misleading. All financial projections provided by the Credit Parties to the
Agent and Lenders have been prepared in good faith based upon assumptions
believed by the Credit Parties to be reasonable at the time made, it being
understood that such projections are subject to significant uncertainties and
contingencies, many of which are beyond the control of the Credit Parties, and
no assurances can be given that the projections will be realized.
ARTICLE IV.
SECURITY FOR OBLIGATIONS
Section 4.01. COLLATERAL FOR THE OBLIGATIONS. Until paid in full,
the Obligations will be secured by the following:
(a) Company Security Agreement. The Obligations are and shall
remain secured by a valid and enforceable first priority security interest and
lien in and to 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, investment property,
and general intangibles and all proceeds and products thereof, which security
interest (excepting as respects Collateral covered by the Company Pledge
Agreement) has been and shall continue to be granted by the Company Security
Agreement, subject only to liens and security interests described in the
exceptions enumerated in Sections 5.02(b)(1) through (7) of this Agreement. In
the event the Company owns or acquires tangible or intangible personal property
that the Required Lenders deem is or may not be covered as collateral by the
Company Security Agreement or the Company Pledge Agreement or in which the
Required Lenders deem their security interest is or may not be perfected, the
Company covenants and agrees promptly upon the request of the Agent to execute
such other security instruments and documents and take such other actions as the
Agent may require to grant to the Agent, for the ratable benefit of the Lenders
and the Agent, a perfected security interest therein, all of which security
instruments and documents shall be in form and substance satisfactory to the
Agent and the Required Lenders in all respects.
(b) Real Estate. Upon request by the Required Lenders or the
Agent, the Company covenants and agrees, within ten (10) days after receiving
such request, to grant to the
40
Agent, for the ratable benefit of the Lenders and the Agent, 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 Required Lenders in all respects duly
executed, acknowledged and delivered to the Agent in recordable form. Upon
request by the Required Lenders, the Company covenants and agrees, within ten
(10) days after receiving such request, to grant to the Agent, for the ratable
benefit of the Lenders and the Agent, security interests and liens 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 Required Lenders in all respects duly executed, acknowledged
and delivered to the Agent in recordable form. The Company further covenants and
agrees to provide to the Agent 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 Required
Lenders 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 Agent or the Required Lenders, and in
the case of leased Real Estate, showing the Company's leasehold interest
therein; and (ii) a Phase I environmental assessment (and where reasonably
deemed appropriate by the Required Lenders based upon information disclosed in
such assessment, a Phase II environmental assessment) prepared by a registered
engineer or environmental consultant acceptable to the Agent and the Required
Lenders confirming there are no material environmental problems associated with
such Real Estate.
(c) Parent Guaranties. The Obligations are and shall remain
further secured by the valid and enforceable unconditional guaranties of each of
VNGI and VNGDI made pursuant to the Parent Guaranties. Pursuant to its Parent
Guaranty, VNGI shall also unconditionally guaranty payment of all of the
obligations of VNGDI arising under, pursuant to or in connection with the Parent
Guaranty executed by VNGDI.
(d) Parent Security Agreements. The obligations of each of VNGI
and VNGDI arising under, pursuant to, or by virtue of its respective Parent
Guaranty are and shall remain secured by a valid and enforceable first priority
security interest and lien in and to all of its personal property, tangible and
intangible, whether now owned and existing or hereafter acquired or arising,
including, without limitation, all equipment, inventory, accounts receivable,
investment property, and general intangibles and all proceeds thereof, which
security interest (except as respects Collateral covered by the Parent Pledge
Agreement) has been and shall continue to be granted by its Parent Security
Agreement, subject only to liens and security interests described in the
exceptions enumerated in Sections 5.02(b)(1) through (7) of this Agreement.
(e) Parent Pledge Agreements. The obligations of each of VNGI and
VNGDI arising under, pursuant to, or by virtue of its respective Parent Guaranty
shall be further secured by a valid and enforceable first priority pledge of and
security interest and lien in and to all of the capital stock of VNGDI owned by
VNGI (which shall at all times be all of the issued and outstanding capital
stock of VNGDI) and all of the capital stock of the Company owned by VNGDI
(which shall be at all times all of the issued and outstanding capital stock of
the
41
Company), whether now existing or hereafter arising or acquired, and whether now
or hereafter issued and outstanding, and all proceeds thereof, which pledge,
security interest and lien has been and will continue to be created by its
Parent Pledge Agreement, subject only to liens and security interests described
in the exceptions enumerated in Sections 5.02(b)(1) through (7) of this
Agreement.
(f) Additional Subsidiaries. The Obligations will be further
secured by a valid and enforceable first priority pledge of and security
interest and lien in and to all of the capital stock of each Subsidiary owned by
the Company (which in each case shall be all of the issued and outstanding
capital stock of each such Subsidiary), whether now existing or hereafter
arising or acquired, and whether now or hereafter issued and outstanding, and
all proceeds thereof, which pledge, security interest and lien will be created
by a pledge agreement in form and substance acceptable to the Agent (as the same
may be amended, modified, extended, renewed, supplemented, replaced and/or
restated from time to time and at any time, "Company Pledge Agreement"), subject
only to liens and security interests described in the exceptions enumerated in
Sections 5.02(b)(1) through (7) of this Agreement. Within sixty (60) calendar
days of the acquisition by the Company of any Subsidiary of the Company, (i) the
Company shall execute and deliver to the Agent for the benefit of the Lenders
and the Agent a Company Pledge Agreement (or at the Agent's option, an amendment
to any existing Company Pledge Agreement) to a pledge to, and grant to the
Agent, for the benefit of the Lenders and the Agent, a security interest and
lien in and to all of the capital stock of such Subsidiary, and shall deliver to
the Agent all of such capital stock and appropriate stock powers, and (ii) any
such Subsidiary shall become a Guarantor and shall execute and deliver in favor
of the Agent, for the benefit of the Lenders and the Agent, a Subsidiary
Guaranty and Subsidiary Security Agreement in form and substance acceptable to
the Agent, together with such financing statements and other perfection
documents as the Agent may require or as are required by the terms of such
Security Agreement.
ARTICLE V.
AFFIRMATIVE AND
NEGATIVE COVENANTS OF THE CREDIT PARTIES
Section 5.01. AFFIRMATIVE COVENANTS OF THE CREDIT PARTIES. Until all
Obligations terminate or are paid and satisfied in full, and for so long as the
Company is entitled to receive any Advance or the issuance of a Letter of Credit
or any Letter of Credit Exposure exists, each of the Credit Parties shall
strictly observe, and shall cause each of their respective Subsidiaries and each
Guarantor to observe, the following covenants:
(a) Conduct of Business. Each Credit Party will, and will cause
each Subsidiary to, carry on and conduct its business in substantially the same
manner and in substantially the same fields of enterprise as it is presently
conducted and do all things necessary to remain duly incorporated or organized,
validly existing and (to the extent such concept applies to such entity) in good
standing as a domestic corporation, partnership or limited liability company in
its jurisdiction of incorporation or organization, as the case may be, and
maintain all requisite authority to conduct its business in each jurisdiction in
which its business is conducted.
42
(b) Reports, Certificates and Other Information. The Credit
Parties shall furnish or cause to be furnished to the Agent copies of the
following Financial Statements, certificates and other information:
(1) Annual Statements. As soon as available and in any event
within one hundred (100) days after the close of each fiscal year of
the Company, annual audited consolidated Financial Statements for
the Credit Parties and their respective Subsidiaries, audited by the
Company's Auditors, showing the financial condition and results of
operations of the Credit Parties and their respective Subsidiaries
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 Credit Parties and their respective
Subsidiaries on a consolidated basis as of the date of such
Financial Statements and the results of its and their operations and
changes in its and their 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 consolidated
income statements for the Credit Parties and their respective
Subsidiaries showing its and their results of operations as at, and
for such calendar month and year-to-date, all in reasonable detail,
and certified to the Lender by the respective President, Chief
Financial Officer, or Treasurer of each of the Credit Parties,
together with comparable prior year-to-date income 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 fifty (50) days after the close of each fiscal
quarter of the Company ending after the Closing Date, unaudited
consolidated Financial Statements of the Credit Parties and their
respective Subsidiaries showing its and their 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 Credit Parties,
and if the information so omitted is not necessary for a fair
presentation of the results for such fiscal quarter), and certified
to the Lender by the respective President, Chief Financial Officer,
or Treasurer of each of the Credit Parties, 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 Sections 5.01(b)(1)
and (3) of this Agreement, an Officer's Certificate.
43
(5) Orders. Prompt notice of any orders in any material
proceedings to which the Company or any of its Subsidiaries is a
party, issued by any court or regulatory agency, federal or state,
and if the Agent or any Lender 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 any of its Subsidiaries, or the
occurrence of any event which could have a material adverse effect
upon the Company or any of its Subsidiaries, written notice thereof
describing the same and the steps being taken with respect thereto.
(7) Compliance Certificates. Within fifty (50) 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
Section 5.01(g) 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 Agent.
(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) Consolidated Budget. Concurrently with delivery of the
annual financial statements pursuant to Section 5.06(b)(1), the
Credit Parties shall provide to the Agent and each of the Lenders a
consolidated budget for the next fiscal year forecasting revenues
and expenses on a consolidated basis, for the Credit Parties. Such
budget shall be in such detail as the Agent and the Required Lenders
shall reasonably require.
(10) Other Information. Within thirty (30) days after the
request, such other information concerning the Credit Parties and
their respective Subsidiaries as the Agent or the Lenders may from
time to time request, including, without limitation, consolidating
Financial Statements of the Credit Parties and their respective
Subsidiaries.
(11) Additional EBITDA Amount Confirmations. Within fourteen
(14) calendar days of the consummation by the Company of a New
Acquisition, the Company shall deliver to the Agent a final written
calculation of the Additional EBITDA Amount applicable to such New
Acquisition (as such calculation has been approved by the Agent in
its discretion), together with a written statement of the President
or Chief Financial Officer of the Company confirming pro forma
compliance with the financial covenants set forth in Section 5.01
(g) of this Agreement as at immediately following the consummation
of such
44
New Acquisition, determined with the inclusion of the Additional
EBITDA Amount.
(c) Books, Records and Inspections. Each of the Credit Parties and
their Subsidiaries and each Guarantor shall maintain complete and accurate books
and records, and permit access thereto by the Agent and each of the Lenders for
purposes of inspection, copying and audit, and the Credit Parties and each of
their respective Subsidiaries and each Guarantor shall permit the Lender to
inspect its properties and operations at all reasonable times.
(d) Insurance. In addition to any insurance required by any other
Loan Documents to which it is a party, the Credit Parties and their respective
Subsidiaries and each Guarantor 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
Credit Parties and their respective Subsidiaries and each Guarantor agree to
name the Agent and each of the Lenders as additional insureds 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 Agent.
(e) Taxes and Liabilities. The Credit Parties and their respective
Subsidiaries and each Guarantor 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 Credit
Parties and their respective Subsidiaries and each Guarantor 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 Credit Parties shall observe each of
the following financial covenants:
(1) Fixed Charge Coverage Ratio. As of the close of each
fiscal quarter of the Company ending after the Closing Date, the
Credit Parties and their respective Subsidiaries, 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: (i) 1.50:1
through June 29, 2005, and (ii) 1.75:1 on June 30, 2005, and
thereafter.
(2) Ratio of Total Funded Debt to EBITDA. As of the close of
each fiscal quarter of the Company ending after the Closing Date,
the Credit Parties and their respective Subsidiaries, 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 3.50:1.
(h) Primary Banking Relationship. The Company shall maintain its
primary deposit accounts with the Agent, and shall maintain its primary
concentration accounts with one or more of the Lenders.
45
(i) Employee Benefit Plans. The Credit Parties and their
respective Subsidiaries and each Guarantor shall maintain any Plan in material
compliance with ERISA, the Code, and all rules and regulations of regulatory
authorities pursuant thereto and shall file all reports required to be filed
pursuant to ERISA, the Code, and such rules and regulations.
(j) Hazardous Substances. If any of the Credit Parties or any of
their respective Subsidiaries or any Guarantor 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 Schedule 3.01(k) attached hereto, the Credit Parties shall immediately notify
the Agent and the Lenders of the commencement of such activity with respect to
each such Hazardous Substance. The Credit Parties shall cause any Hazardous
Substances which are now or may hereafter be used or generated in the operations
of the Credit Parties or any of their respective Subsidiaries or any Guarantor
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 Credit Parties shall notify the Agent and the Lenders
immediately upon obtaining knowledge that:
(1) any premises which have at any time been owned or
occupied by or have been under lease to any of the Credit Parties or
any of their respective Subsidiaries or any Guarantor 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) any of the Credit Parties or any of their respective
Subsidiaries or any Guarantor has been named or is threatened to be
named as a party responsible for the 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 any of the Credit Parties or any of their respective Subsidiaries
or any Guarantor is notified of any event described in Sections 5.01(j)(1) or
(2) above, the Credit Parties shall immediately engage or cause such Subsidiary
or such Guarantor 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 Credit
Parties or such Subsidiary or such Guaranty with respect thereto, and the Agent
and the Lenders 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 Credit Parties, and the Credit Parties shall
immediately establish reserves in the amount of the potential financial
liability of the Credit Parties or such Subsidiary or such Guarantor 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 Agent and the Lenders, which
approval shall not be unreasonably withheld.
Section 5.02. NEGATIVE COVENANTS OF THE CREDIT PARTIES. Until all
Obligations terminate or are paid and satisfied in full, and so long as the
Company is entitled to receive any Advance or the issuance of a Letter of Credit
or any Letter of Credit Exposure
46
exists, the Credit Parties shall strictly observe, and shall cause each of their
respective Subsidiaries and each Guarantor to strictly observe, the following
covenants:
(a) Restricted Payments. Except as provided in the next sentence,
none of the Credit Parties or any of their respective Subsidiaries shall (i)
purchase or redeem any shares of their respective capital stock or declare or
pay any dividends thereon except for dividends payable entirely in capital
stock, or (ii) make any other distributions to shareholders as shareholders, or
set aside any funds for any such purpose, or prepay, purchase or redeem any
subordinated Debt of the Company or any other Credit Party. Notwithstanding the
foregoing, if no Event of Default or Unmatured Event of Default has occurred and
is continuing at the time of such payment or purchase, as applicable, and if no
Event of Default or Unmatured Event of Default would result from such payment or
purchase, as applicable: (1) the Credit Parties and their respective
Subsidiaries may pay cash dividends to shareholders on their respective capital
stock; and (2) from and after the Closing Date VNGI may purchase and redeem
shares of its Common Stock, provided that the sum of (x) the aggregate amount of
cash dividends paid to shareholders who are not Credit Parties during any fiscal
year of the Company, and (y) the aggregate purchase price paid by VNGI for
shares of Common Stock redeemed in such fiscal year of the Company, shall not
exceed $2,000,000.00.
(b) Liens. Neither the Credit Parties nor any of their respective
Subsidiaries nor any Guarantor shall 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 and in this Agreement
as a "lien" or "liens") with respect to any property or assets now owned or
hereafter acquired, including, without limitation any of their respective
rights, title and interests in and to any Real Estate, whether leased or owned,
except:
(1) liens in favor of the Agent, for the benefit of the
Lenders and the Agent, created pursuant to the requirements of this
Agreement or otherwise;
(2) any Lien or deposit with any governmental agency
required or permitted to qualify it 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 Required Lenders, materially detract from the value
of such property or its marketability or its usefulness in its
business;
47
(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; provided that (i) the maximum aggregate
amount of Acquisition Seller Debt secured by such liens shall be
$2,000,000 and (ii) the Acquisition Seller holding any such lien is
a party to an intercreditor and subordination agreement with the
Agent and the Lenders and the Company in form and substance
satisfactory to the Agent and the Required Lenders in all respects;
and
(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(l)(iii) of this Agreement and to the
extent such Debt is not greater than the fair market value of such
property.
(c) Guaranties. Neither the Credit Parties nor any of their
respective Subsidiaries nor any Guarantor shall 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 Agent, for the benefit of the
Lenders and the Agent;
(2) guaranties by endorsement of instruments for deposit
made in the ordinary course of business; and
(3) those specific existing guaranties listed on Schedule
5.02(c-1) attached hereto.
(d) Loans or Advances. Neither the Credit Parties nor any of their
respective Subsidiaries nor any Guarantor shall make or permit to exist any
loans or advances to any other Person, except for:
(1) extensions of credit or credit accommodations to
customers or vendors made by it 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 its behalf of the course of discharging their
assigned duties;
48
(3) loans made to its employees in accordance with its
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) loans or advances made between the Credit Parties and
their respective Subsidiaries, provided that (i) no Event of Default
or Unmatured Event of Default exists and remains uncured or would be
caused by the making of such loan or advance, (ii) such loans and
advances shall not be evidenced by any promissory note or be secured
by any collateral, and (iii) loans and advances by VNGI and VNGDI to
the Company shall be junior and subordinate to the Obligations
pursuant to the Subordination Agreement.
(5) the specific items listed on Schedule 5.02(c-2) attached
hereto.
(e) Mergers, Consolidations, Sales, Acquisition or Formation of
Subsidiaries. Neither the Credit Parties nor any of their respective
Subsidiaries nor any Guarantor shall (i) be a party to any consolidation or to
any merger or purchase the capital stock of or otherwise acquire any equity
interest in any other business entity, provided that, the Company may make New
Acquisitions after the Closing Date, if (A) the purchase price in respect of any
such New Acquisition is not in excess of $15,000,000.00, and (B) no Event of
Default or Unmatured Event of Default has occurred and is continuing on the New
Acquisition Closing Date; (ii) acquire any material part of the assets of any
other business entity other than New Acquisitions (with respect to the Company
only) permitted by the preceding clause (i), except in the ordinary course of
business and excepting Short-Term Real Estate Sales, or (iii) sell, transfer,
convey or lease all or any material part of its assets, except in the ordinary
course of business, or sell or assign with or without recourse any receivables,
(iv) enter into or suffer to exist any sale or other transfer of any asset with
the intent to lease such asset as lessee. VNGI shall not cause to be created or
otherwise acquire any Subsidiary other than VNGDI without the prior written
consent of the Agent and the Required Lenders. VNGDI shall not cause to be
created or otherwise acquire any Subsidiary other than the Company without the
prior written consent of the Agent and the Required Lenders. The Company shall
not cause to be created or otherwise acquire any Subsidiary without the prior
written consent of the Agent and the Required Lenders, which consent shall not
be unreasonably withheld. Without limiting the generality of the foregoing
sentence, the Company shall not consummate any New Acquisition which would cause
a new Subsidiary of the Company to exist without the prior written consent of
the Agent and the Required Lenders, and if such consent is given, concurrently
with or within sixty (60) days following consummation of such New Acquisition:
(i) the Company shall amend the Company Pledge Agreement to include a pledge of
and security interest and Lien in and to all of the capital stock of such
Subsidiary as provided in Section 4.01(f) of this Agreement, and deliver to the
Agent, for the benefit of the Lenders and the Agent, all of the original stock
certificates of such Subsidiary, together with executed blank stock powers
therefor; and (ii) such Subsidiary shall become a Guarantor and shall execute
and deliver in favor of the Agent, for the benefit of the Lenders and the Agent,
a Subsidiary Guaranty and Subsidiary Security Agreement as provided in Section
4.01(f) of this Agreement. No Subsidiary of the Company shall cause to
49
be created or otherwise acquire any Subsidiary without the prior written consent
of the Agent and the Required Lenders.
(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. Neither the Credit Parties nor any of their
respective Subsidiaries nor any Guarantor shall 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 to which it is a party.
(h) Judgments. Neither the Credit Parties nor any of their
respective Subsidiaries nor any Guarantor shall 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. Neither the Credit Parties nor any of their
respective Subsidiaries nor any Guarantor shall change the location of its
principal office unless it gives not less than ten (10) days prior written
notice of such change to the Agent.
(j) Hazardous Substances. Neither the Credit Parties nor any of
their respective Subsidiaries nor any Guarantor shall 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 Credit Parties nor any of their
respective Subsidiaries nor any Guarantor, except as permitted by and in
accordance with that certain permit No. 25656 issued by the Allegheny Health
Department, State of Pennsylvania.
(k) Lease Obligations. Neither the Credit Parties nor any of their
respective Subsidiaries nor any Guarantor shall incur obligations under any
Capital Leases. The obligations of the Credit Parties and their respective
Subsidiaries on a consolidated basis payable under all operating leases
(excluding obligations under operating leases of vehicles and operating lease
buyout expenses) during any period of four consecutive fiscal quarters shall not
exceed 2.75% of aggregate sales revenues of the Credit Parties and their
Subsidiaries for the same period.
(l) Additional Debt. Neither Credit Parties nor any of their
respective Subsidiaries nor any Guarantor shall 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 Schedule 5.02(l) attached hereto.
50
(m) Restrictions on Parent Assets. Neither VNGI nor VNGDI shall
own any assets other than cash, intercompany receivables, and Common Stock of
their respective Subsidiaries, without the prior written consent of the Agent
and the Required Lenders.
(n) Negative Pledge Limitation. Neither the Company nor any
Guarantor shall enter into any agreement with any Person, other than the
Lenders, which prohibits or limits its ability to create, incur, assume, or
suffer to exist in favor of the Lenders or the Agent any Lien upon any of its
assets, rights, revenues, or property, real, personal, or mixed, tangible or
intangible, whether now owned or hereafter acquired.
(o) Accounting Policies/Change of Business. Neither the Company
nor any of the Guarantors shall: (1) change its fiscal year or any of its
significant accounting policies except to the extent necessary to comply with
GAAP; or (2) make any material change in the nature of its business as carried
on the Closing Date.
(p) Affiliates. The Credit Parties will not, and will not permit
any Subsidiary to, enter into any transaction (including, without limitation,
the purchase or sale of any property or service) with, or make any payment or
transfer to, any Affiliate except in the ordinary course of business and
pursuant to the reasonable requirements of such Credit Party's or such
Subsidiary's business and upon fair and reasonable terms no less favorable to
the Credit Party or such Subsidiary than the Credit Party or such Subsidiary
would obtain in a comparable arms length transaction.
ARTICLE VI.
LENDING CONDITIONS
Section 6.01. CONDITIONS OF LENDING. Unless the Agent and the
Required Lenders otherwise consent in writing, the obligation of the Lenders or
the Swing Line Lender to make any Advance and of Bank One 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 Credit Parties 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 Section 3.01(d)(ii) of this Agreement will be construed so as to refer to the
latest Financial Statements furnished to the Agent by the Credit Parties
pursuant to the requirements of this Agreement, (ii) the representations
contained in Section 3.01(k) (with respect to Hazardous Substances) will be
construed so as to apply not only to the Credit Parties, but also to their
respective Subsidiaries, (iii) the representation contained in Section 3.01(l)
of this Agreement will be construed so as to except any Subsidiary which may
hereafter be formed or acquired by any of the Credit Parties with the consent of
the Required Lenders and the Agent, and (iv) all other representations will be
construed to have been amended to conform with any changes of which the Agent
and the Required Lenders shall previously have been given notice in writing by
the Credit Parties.
51
(b) Syndication. The Agent shall have determined that (i) since
March 31, 2004, there has been no material adverse change or disruption in
primary or secondary loan syndication markets, financial markets or in capital
markets generally that would likely impair syndication of the Loans hereunder,
and (ii) the Credit Parties have fully cooperated with the Agent's syndication
efforts including, without limitation, by providing the Agent with information
regarding the Company's operations and prospects and such other information as
the Agent deems necessary to successfully syndicate the Loans hereunder.
(c) Documents and other Items to be Furnished at Closing. The
Agent shall have received contemporaneously with the execution of this Agreement
(or such later date as indicated below), the following, each duly executed,
currently dated (as applicable) and in form and substance satisfactory to the
Agent and the Lenders:
(1) The Transfer Agreement, duly executed by each of the
parties thereto.
(2) The Revolving Notes and the Swing Line Note, each duly
executed and delivered by the Company to each of the Lenders and the
Swing Line Lender.
(3) Certificates of the Secretaries of each of the Credit
Parties:
(i) certifying the adoption by its Board of Directors of the
resolutions authorizing the execution, delivery and
performance, respectively, of this Agreement and the
other Loan Documents to which it is a party;
(ii) certifying the names of the officer or officers
authorized to sign this Agreement and the other Loan
Documents to which it is a party, together with a sample
of the true signature of each such officer; and
(iii) certifying as complete and correct its Articles of
Incorporation and By-laws as then in effect.
(4) A copy of the file-marked Articles of Incorporation of
each of Credit Parties certified as complete and correct by the
Secretary of State of the state of its incorporation.
(5) A currently dated certificate of good standing or
certificate of existence for each of the Credit Parties issued by
the Secretary of State of the state of its incorporation and
certificates of good standing from the respective Secretaries of
State for each other state in which any of them engages in business.
(6) Certificates evidencing the existence of all insurance
required under the terms of this Agreement or any other of the Loan
Documents.
(7) Payment to the Agent of all legal fees and expenses of
Xxxxx & Xxxxxxx, special counsel to the Agent, in connection with
the negotiation,
52
preparation and closing of this Agreement, the other Loan Documents,
the Transfer Agreement, other closing documents. By its execution of
this Agreement, the Company authorizes the Agent to debit any of the
deposit accounts of the Company carried with the Agent for such
attorneys' fees and any other amounts owed under Section 9.03 of
this Agreement.
(8) Payment to Bank One and the Arranger of all amounts due
them under Section 8.13 and payment to the Agent, for the accounts
of the Lenders, of the fee described in Section 2.02(d).
(9) Such UCC financing statements, UCC financing statement
amendments and other documents as the Agent may reasonably require.
(10) Payment current to the Closing Date all accrued interest
on the Prior Revolving Loans and the Term Loan.
(11) The opinion of counsel for the Credit Parties addressed
to the Agent and the Lenders in such form and substance as may be
reasonably acceptable to the Agent and the Lenders.
(d) Documents to be Furnished at Time of Each Advance. The Agent
shall have received the following prior to making any Advance, each duly
executed and currently dated, unless waived at the Agent's discretion:
(1) A Borrowing Notice.
(2) An Officer's Certificate.
(3) Such other documents as the Agent or the Required
Lenders 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 any of the Notes, or otherwise payable to
the Agent or any of the Lenders or any other holder of the Notes under the terms
of this Agreement.
(b) Nonpayment of Other Debt. Default by any Credit Party or any
Guarantor 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,
53
unless the Credit Party or the Guarantor 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 any Credit Party or any Guarantor in the
payment when due, or in the performance or observance of any material obligation
of, or condition agreed to by any Credit Party or any Guarantor 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. Any Credit Party or any Guarantor
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 any Credit Party or any Guarantor; or any Credit Party or
any Guarantor applying for, consenting to, or acquiescing in the appointment of
a trustee or receiver for it or any of its property, or any Credit Party or any
Guarantor 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 any Credit Party or any Guarantor 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 any Credit Party or any Guarantor, and, if involuntary,
being consented to or acquiesced in by any Credit Party or any Guarantor or
remaining for sixty (60) days undismissed.
(e) Warranties and Representations. Any warranty or representation
made by any Credit Party or any Guarantor in this Agreement or any other Loan
Document to which it is a party 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 any Credit Party or any Guarantor
to the Lender 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 Agent gives such Credit Party or such Guarantor ten
(10) days' prior written notice of same.
(f) Violations of Negative and Financial Covenants. Failure by the
Credit Parties and their respective Subsidiaries or any of them to comply with
or perform any covenant stated in Section 5.01(g) or Section 5.02 of this
Agreement.
(g) Noncompliance With Other Provisions of this Agreement. Failure
of any Credit Party or any Guarantor to comply with or perform any covenant or
other provision of this Agreement or any other Loan Document to which it is a
party 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 such
Credit Party or such Guarantor from the Agent.
(h) Guaranty Defaults. Any Guarantor shall default in the due
observance or performance of any covenant, condition or agreement on its part to
be observed or performed
54
under the terms of its Guaranty and continuance of such
default for ten (10) days after written notice thereof to the Guarantor by the
Agent.
(i) Termination of Guaranties. The revocation or termination or
purported revocation or termination of any of the Guaranties.
(j) Default under Other Loan Documents. The occurrence of any
"Default" or "Event of Default" as such terms are defined in any of the Loan
Documents other than this Agreement.
(k) Change of Control. The occurrence of any Change of Control
without the consent of the Required Lenders.
(l) Judgments. Any Credit Party or any of its Subsidiaries shall
fail within 30 days to bond or otherwise discharge one or more nonmonetary
judgments or orders which, individually or in the aggregate, could reasonably be
expected to have a material adverse effect on its business or financial
condition, or its ability to perform its obligations under the Loan Documents,
which judgment(s), in any such case, is/are not stayed on appeal or otherwise
being appropriately contested in good faith.
(m) Collateral. Any Loan Document shall for any reason fail to
create a valid and perfected first priority security interest in any collateral
purported to be covered thereby, except as permitted by the terms of any Loan
Document, or any Loan Document shall fail to remain in full force or effect or
any action shall be taken to discontinue or to assert the invalidity or
unenforceability of any Loan Document.
Section 7.02. Effect of Event of Default. If any Event of Default
described in Section 7.01(d) 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 Lenders shall become immediately due and payable, and the
obligation of the Lenders to make any Advance and the obligation of Bank One to
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
Required Lenders 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 Lenders to make any Advance and the obligation of Bank One to
issue any Letter of Credit shall immediately terminate, all without notice of
any kind. The Agent 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 Agent and the Lenders specified in this Agreement or in any
other Loan Document shall not be exclusive, and the Agent and the Lenders each
may avail itself of any other remedies provided by law as well as any equitable
remedies available to the Lenders.
55
ARTICLE VIII.
AGENT
Section 8.01. Appointment; Nature of Relationship. Bank One is
hereby appointed by each of the Lenders as its contractual representative
(herein referred to as the "Agent") hereunder and under each other Loan
Document, and each of the Lenders irrevocably authorizes the Agent to act as the
contractual representative of such Lender with the rights and duties expressly
set forth herein and in the other Loan Documents. The Agent agrees to act as
such contractual representative upon the express conditions contained in this
Article VIII. Notwithstanding the use of the defined term "Agent," it is
expressly understood and agreed that the Agent shall not have any fiduciary
responsibilities to any Lender by reason of this Agreement or any other Loan
Document and that the Agent is merely acting as the contractual representative
of the Lenders with only those duties as are expressly set forth in this
Agreement and the other Loan Documents. In its capacity as the Lenders'
contractual representative, the Agent (i) does not hereby assume any fiduciary
duties to any of the Lenders, (ii) is a "representative" of the Lenders within
the meaning of the term "secured party" as defined in the Indiana Uniform
Commercial Code and (iii) is acting as an independent contractor, the rights and
duties of which are limited to those expressly set forth in this Agreement and
the other Loan Documents. Each of the Lenders hereby agrees to assert no claim
against the Agent on any agency theory or any other theory of liability for
breach of fiduciary duty, all of which claims each Lender hereby waives.
Section 8.02. Powers. The Agent shall have and may exercise such
powers under the Loan Documents as are specifically delegated to the Agent by
the terms of each thereof, together with such powers as are reasonably
incidental thereto. The Agent shall have no implied duties to the Lenders, or
any obligation to the Lenders to take any action thereunder except any action
specifically provided by the Loan Documents to be taken by the Agent.
Section 8.03. General Immunity. Neither the Agent nor any of its
directors, officers, agents or employees shall be liable to the Company, the
Lenders or any Lender for any action taken or omitted to be taken by it or them
hereunder or under any other Loan Document or in connection herewith or
therewith except to the extent such action or inaction is determined in a final
non-appealable judgment by a court of competent jurisdiction to have arisen from
the gross negligence or willful misconduct of such Person.
Section 8.04. No Responsibility for Loans, Recitals, etc. Neither
the Agent nor any of its directors, officers, agents or employees shall be
responsible for or have any duty to ascertain, inquire into, or verify (a) any
statement, warranty or representation made in connection with any Loan Document
or any borrowing hereunder; (b) the performance or observance of any of the
covenants or agreements of any obligor under any Loan Document, including,
without limitation, any agreement by an obligor to furnish information directly
to each Lender; (c) the satisfaction of any condition specified in Article VI,
except receipt of items required to be delivered solely to the Agent; (d) the
existence or possible existence of any Event of Default or Unmatured Event of
Default; (e) the validity, enforceability, effectiveness, sufficiency or
genuineness of any Loan Document or any other instrument or writing furnished in
connection therewith; (f) the value, sufficiency, creation, perfection or
priority of any Lien in any collateral
56
security; or (g) the financial condition of the Company or any guarantor of any
of the Obligations or of any of the Company's or any such guarantor's respective
Subsidiaries.
Section 8.05. Action on Instructions of Lenders. The Agent shall in
all cases be fully protected in acting, or in refraining from acting, hereunder
and under any other Loan Document in accordance with written instructions signed
by the Required Lenders, and such instructions and any action taken or failure
to act pursuant thereto shall be binding on all of the Lenders. The Lenders
hereby acknowledge that the Agent shall be under no duty to take any
discretionary action permitted to be taken by it pursuant to the provisions of
this Agreement or any other Loan Document unless it shall be requested in
writing to do so by the Required Lenders. The Agent shall be fully justified in
failing or refusing to take any action hereunder and under any other Loan
Document unless it shall first be indemnified to its satisfaction by the Lenders
pro rata against any and all liability, cost and expense that it may incur by
reason of taking or continuing to take any such action.
Section 8.06. Employment of Agents and Counsel. The Agent may
execute any of its duties as Agent hereunder and under any other Loan Document
by or through employees, agents, and attorneys in fact and shall not be
answerable to the Lenders, except as to money or securities received by it or
its authorized agents, for the default or misconduct of any such agents or
attorneys in fact selected by it with reasonable care. The Agent shall be
entitled to advice of counsel concerning the contractual arrangement between the
Agent and the Lenders and all matters pertaining to the Agent's duties hereunder
and under any other Loan Document.
Section 8.07. Reliance on Documents; Counsel. The Agent shall be
entitled to rely upon any Note, notice, consent, certificate, affidavit, letter,
telegram, facsimile, telex, electronic mail message, statement, paper or
document believed by it to be genuine and correct and to have been signed or
sent by the proper person or persons, and, in respect to legal matters, upon the
opinion of counsel selected by the Agent, which counsel may be employees of the
Agent. For purposes of determining compliance with the conditions specified in
Section 6.01, each Lender that has signed this Agreement shall be deemed to have
consented to, approved or accepted or to be satisfied with, each document or
other matter required thereunder to be consented to or approved by or acceptable
or satisfactory to a Lender unless the Agent shall have received notice from
such Lender prior to the applicable date specifying its objection thereto.
Section 8.08. Agent's Reimbursement and Indemnification. The Lenders
agree to reimburse and indemnify the Agent ratably in proportion to their
respective Commitments (or, if the Commitments have been terminated, in
proportion to their Commitments immediately prior to such termination) (i) for
any amounts not reimbursed by the Company for which the Agent is entitled to
reimbursement by the Company under the Loan Documents, (ii) for any other
expenses incurred by the Agent on behalf of the Lenders, in connection with the
preparation, execution, delivery, administration and enforcement of the Loan
Documents (including, without limitation, for any expenses incurred by the Agent
in connection with any dispute between the Agent and any Lender or between two
or more of the Lenders) and (iii) for any liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind and nature whatsoever which may be imposed on, incurred by or
asserted against the Agent in any way relating to or arising out of the Loan
Documents or any other document delivered in connection therewith or the
transactions contemplated thereby
57
(including, without limitation, for any such amounts incurred by or asserted
against the Agent in connection with any dispute between the Agent and any
Lender or between two or more of the Lenders), or the enforcement of any of the
terms of the Loan Documents or of any such other documents, provided that (i) no
Lender shall be liable for any of the foregoing to the extent any of the
foregoing is found in a final non-appealable judgment by a court of competent
jurisdiction to have resulted from the gross negligence or willful misconduct of
the Agent and (ii) any indemnification required pursuant to Section 2.12 shall,
notwithstanding the provisions of this Section 8.08, be paid by the relevant
Lender in accordance with the provisions thereof. The obligations of the Lenders
under this Section 8.08 shall survive payment of the Obligations and termination
of this Agreement.
Section 8.09. Notice of Default. The Agent shall not be deemed to
have knowledge or notice of the occurrence of any Event of Default or Unmatured
Event of Default hereunder unless the Agent has received written notice from a
Lender or the Company referring to this Agreement describing such Event of
Default or Unmatured Event of Default and stating that such notice is a "notice
of default". In the event that the Agent receives such a notice, the Agent shall
give prompt notice thereof to the Lenders.
Section 8.10. Rights as a Lender. In the event the Agent is a
Lender, the Agent shall have the same rights and powers hereunder and under any
other Loan Document with respect to its Commitment and its Loans as any Lender
and may exercise the same as though it were not the Agent, and the term "Lender"
or "Lenders" shall, at any time when the Agent is a Lender, unless the context
otherwise indicates, include the Agent in its individual capacity. The Agent and
its Affiliates may accept deposits from, lend money to, and generally engage in
any kind of trust, debt, equity or other transaction, in addition to those
contemplated by this Agreement or any other Loan Document, with the Company or
any of its Subsidiaries in which the Company or such Subsidiary is not
restricted hereby from engaging with any other Person.
Section 8.11. Lender Credit Decision. Each Lender acknowledges that
it has, independently and without reliance upon the Agent, the Arranger or any
other Lender and based on the financial statements prepared by the Company and
such other documents and information as it has deemed appropriate, made its own
credit analysis and decision to enter into this Agreement and the other Loan
Documents. Each Lender also acknowledges that it will, independently and without
reliance upon the Agent, the Arranger or any other Lender and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own credit decisions in taking or not taking action under this
Agreement and the other Loan Documents. Except for any notice, report, document
or other information expressly required to be furnished to the Lenders by the
Agent or Arranger hereunder, neither the Agent nor the Arranger shall have any
duty or responsibility (either initially or on a continuing basis) to provide
any Lender with any notice, report, document, credit information or other
information concerning the affairs, financial condition or business of the
Company or any of its Affiliates that may come into the possession of the Agent
or Arranger (whether or not in their respective capacity as Agent or Arranger)
or any of their Affiliates.
Section 8.12. Successor Agent. The Agent may resign at any time by
giving written notice thereof to the Lenders and the Company, such resignation
to be effective upon the appointment of a successor Agent or, if no successor
Agent has been appointed, forty-five days
58
after the retiring Agent gives notice of its intention to resign. The Agent may
be removed at any time with or without cause by written notice received by the
Agent from the Required Lenders, such removal to be effective on the date
specified by the Required Lenders. Upon any such resignation or removal, the
Required Lenders shall have the right to appoint, on behalf of the Company and
the Lenders, a successor Agent. If no successor Agent shall have been so
appointed by the Required Lenders within thirty days after the resigning Agent's
giving notice of its intention to resign, then the resigning Agent may appoint,
on behalf of the Company and the Lenders, a successor Agent. Notwithstanding the
previous sentence, the Agent may at any time without the consent of the Company
or any Lender, appoint any of its Affiliates which is a commercial bank as a
successor Agent hereunder. If the Agent has resigned or been removed and no
successor Agent has been appointed, the Lenders may perform all the duties of
the Agent hereunder and the Company shall make all payments in respect of the
Obligations to the applicable Lender and for all other purposes shall deal
directly with the Lenders. No successor Agent shall be deemed to be appointed
hereunder until such successor Agent has accepted the appointment. Any such
successor Agent shall be a commercial bank having capital and retained earnings
of at least $100,000,000. Upon the acceptance of any appointment as Agent
hereunder by a successor Agent, such successor Agent shall thereupon succeed to
and become vested with all the rights, powers, privileges and duties of the
resigning or removed Agent. Upon the effectiveness of the resignation or removal
of the Agent, the resigning or removed Agent shall be discharged from its duties
and obligations hereunder and under the Loan Documents. After the effectiveness
of the resignation or removal of an Agent, the provisions of this Article VIII
shall continue in effect for the benefit of such Agent in respect of any actions
taken or omitted to be taken by it while it was acting as the Agent hereunder
and under the other Loan Documents. In the event that there is a successor to
the Agent by merger, or the Agent assigns its duties and obligations to an
Affiliate pursuant to this Section 8.12, then the term "Prime Rate" as used in
this Agreement shall mean the prime rate, base rate or other analogous rate of
the new Agent.
Section 8.13. Agent and Arranger Fees. The Company agrees to pay to
the Agent and the Arranger, for their respective accounts, the fees agreed to by
the Company, the Agent and the Arranger pursuant to that certain letter
agreement dated March 31, 2004, or as otherwise agreed from time to time.
Section 8.14. Delegation to Affiliates. The Company and the Lenders
agree that the Agent may delegate any of its duties under this Agreement to any
of its Affiliates. Any such Affiliate (and such Affiliate's directors, officers,
agents and employees) which performs duties in connection with this Agreement
shall be entitled to the same benefits of the indemnification, waiver and other
protective provisions to which the Agent is entitled under Articles VIII and IX.
Section 8.15. Collateral Releases. The Lenders hereby empower and
authorize the Agent to execute and deliver to the Company on their behalf any
agreements, documents or instruments as shall be necessary or appropriate to
effect any releases of Collateral which shall be permitted by the terms hereof
or of any other Loan Document or which shall otherwise have been approved by the
Required Lenders (or, if required by the terms of Section 9.10, all of the
Lenders) in writing.
Section 8.16. Agent, Documentation Agent, Syndication Agent, etc.
Neither of the Lenders identified in this Agreement as the Documentation Agent
or the Syndication Agent
59
shall have any right, power, obligation, liability, responsibility or duty under
this Agreement other than those applicable to all Lenders as such. Without
limiting the foregoing, none of such Lenders shall have or be deemed to have a
fiduciary relationship with any Lender. Each Lender hereby makes the same
acknowledgments with respect to such Lenders as it makes with respect to the
Agent in Section 8.11.
ARTICLE IX.
MISCELLANEOUS
Section 9.01. Waiver -- Amendments. No delay on the part of the
Agent or the Lenders, 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 Required Lenders (except as otherwise
provided in Section 9.10).
Section 9.02. Notices. Any notice given under or with respect to
this Agreement to any Credit Party, the Agent or the Lenders shall be in 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 such Credit Party, the Agent or the Lenders
(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
VNGI: Valley National Gases Incorporated
000 Xxxx Xxxx Xxxxxx, Xxxxx 000
Xxxxxxxxxx, Xxxxxxxxxxxx 00000
Attention: President
VNGDI: Valley National Gases Delaware, Inc.
000 Xxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxxx, Xxxxxxxx 00000
Attention: President
Agent and Bank One: Bank One, NA
000 Xxxxxxxx Xxxxxx
Mail Code IN1-0046
X.X. Xxx 0000
00
Xxxxxxxxxxxx, Xxxxxxx 00000
Attention: Division Manager, Commercial Lending
Dept.
61
National City: National City Bank
00 Xxxxx 0xx Xxxxxx
Xxxxxxx Xxxxx, XX 00000
Attention: Xxxxx Xxxxxx, Vice President
Fifth Third Bank: Fifth Third Bank
Xxxxxx Xxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxxx, Xxxxxxxxxxxx 00000
LaSalle Bank LaSalle Bank National Association
National Association One Metropolitan Square
000 Xxxxx Xxxxxxxx, Xxxxx 0000
Xx. Xxxxx, Xxxxxxxx 00000
Attention: Xxxxxxxx X. Xxxxxxx, Asst. Vice
President
Section 9.03. Expenses and Indemnification.
(a) The Company shall reimburse the Agent and the Arranger for any
costs, internal charges and out of pocket expenses (including attorneys' fees
and time charges of attorneys for the Agent, which attorneys may be employees of
the Agent) paid or incurred by the Agent or the Arranger in connection with the
preparation, negotiation, execution, delivery, syndication, distribution
(including, without limitation, via the internet), review, amendment,
modification, and administration of the Loan Documents. The Company also agrees
to reimburse the Agent, the Arranger and the Lenders for any costs, internal
charges and out of pocket expenses (including attorneys' fees and time charges
of attorneys for the Agent, the Arranger and the Lenders, which attorneys may be
employees of the Agent, the Arranger or the Lenders) paid or incurred by the
Agent, the Arranger or any Lender in connection with the collection and
enforcement of the Loan Documents. Expenses being reimbursed by the Company
under this Section include, without limitation, the cost and expense of
obtaining appraisals of real property or interest in real property, appraisal
shall be in conformity with the applicable requirements of any law or any
governmental rule, regulation, policy, guideline or directive (whether or not
having the force of law), or any interpretation thereof, including, without
limitation, the provisions of Title XI of the Financial Institutions Reform,
Recovery and Enforcement Act of 1989, as amended, reformed or otherwise modified
from time to time, and any rules promulgated to implement such provisions, and
costs and expenses incurred in connection with the Reports described in the
following sentence. The Company acknowledges that from time to time Bank One may
prepare and may distribute to the Lenders (but shall have no obligation or duty
to prepare or to distribute to the Lenders) certain audit reports (the
"Reports") pertaining to the Company's assets for internal use by Bank One from
information furnished to it by or on behalf of the Company, after Bank One has
exercised its rights of inspection pursuant to this Agreement.
(b) The Company hereby further agrees to indemnify the Agent, the
Arranger, each Lender, their respective affiliates, and each of their directors,
officers and employees against all losses, claims, damages, penalties,
judgments, liabilities and expenses
62
(including, without limitation, all expenses of litigation or preparation
therefor whether or not the Agent, the Arranger, any Lender or any affiliate is
a party thereto) which any of them may pay or incur arising out of or relating
to this Agreement, the other Loan Documents, the transactions contemplated
hereby or the direct or indirect application or proposed application of the
proceeds of any Loan hereunder except to the extent that they are determined in
a final non-appealable judgment by a court of competent jurisdiction to have
resulted from the gross negligence or willful misconduct of the party seeking
indemnification. The obligations of the Company under this Section 9.6 shall
survive the termination of this Agreement.
Section 9.04. 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 9.05. Captions. Section captions used in this Agreement are
for convenience only and shall not affect the construction of this Agreement.
Section 9.06. Governing Law/Process. 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. EACH CREDIT PARTY 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 SUCH CREDIT PARTY AT THE ADDRESS STATED IN SECTION 9.02 OF THIS
AGREEMENT. NOTHING CONTAINED IN THIS SECTION SHALL AFFECT THE RIGHT OF THE
LENDER TO SERVE LEGAL PROCESS IN ANY OTHER MANNER PERMITTED BY LAW.
Section 9.07. Prior Agreements, Etc. This Agreement supersedes all
previous agreements and commitments made by the Agent or the Lenders and the
Credit Parties 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 Agent or the Lenders.
Section 9.08. [Intentionally Omitted].
Section 9.09. Waiver of Jury Trial. EACH OF THE CREDIT PARTIES, THE
AGENT AND EACH OF THE LENDERS HEREBY VOLUNTARILY, KNOWINGLY, IRREVOCABLY AND
UNCONDITIONALLY WAIVE ANY RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY
DISPUTE (WHETHER BASED UPON CONTRACT, TORT OR OTHERWISE) BETWEEN OR AMONG THE
CREDIT PARTIES, THE AGENT AND THE LENDERS ARISING OUT OF OR IN ANY WAY RELATED
TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT. THIS PROVISION IS A MATERIAL
INDUCEMENT TO THE AGENT AND THE LENDERS TO PROVIDE THE FINANCING DESCRIBED
HEREIN OR IN THE OTHER LOAN DOCUMENTS. NEITHER THE COMPANY OR ANY GUARANTORS NOR
THE LENDERS WILL SEEK TO
63
CONSOLIDATE ANY SUCH ACTION IN WHICH A JURY TRIAL HAS BEEN WAIVED WITH ANY OTHER
ACTION IN WHICH A JURY TRIAL HAS NOT BEEN OR CANNOT BE WAIVED.
Section 9.10. Amendments. Subject to the provisions of this Section,
the Required Lenders (or the Agent with the consent in writing of the Required
Lenders) and the Credit Parties may enter into agreements supplemental hereto
for the purpose or adding or modifying any provisions of the Loan Documents or
changing in any manner the rights of the Lenders, the Agent or the Credit
Parties hereunder or waiving any Event of Default; provided, however, that no
such supplemental agreement shall, without the consent of each Lender:
(a) Reduce the principal amount of any Revolving Note, or reduce
the rate, extend or change the time of payment of principal, interest or fees
hereunder or thereunder, or amend the terms of Section 2.03(a)(2) so as to
lengthen the maximum permitted expiration date of a Letter of Credit.
(b) Reduce the percentages specified in the definition of Required
Lenders.
(c) Extend the Scheduled Revolving Loans Maturity Date or increase
the amount of the Commitment of any Lender, or permit the Company to assign its
rights under this Agreement.
(d) Amend this section.
(e) Waive any Event of Default arising from a failure to pay
principal of or interest on a Loan.
(f) Affect the rights, duties or obligations of the Agent.
(g) Release any Guaranty or asset having a value in excess of
$1,000,000.00 at the time of release from any lien or security interest held by
the Agent as security for all or any part of the Obligations; provided that the
Agent may release Collateral (i) sold in a transaction permitted under the terms
of the Loan Documents or (ii) sold in a transaction that has been approved by
the Required Lenders if the proceeds of such sale (net of reasonable expenses of
sale) are paid to the Agent, for the ratable benefit of the Lenders, in exchange
for such release.
(h) Amend or otherwise override the Asset Sale Payment application
provisions of Section 2.06(b) of this Agreement.
Section 9.11. Intentionally Omitted.]
Section 9.12. [Intentionally Omitted.]
Section 9.13. Indemnification. The Credit Parties, jointly and
severally, agree to indemnify and hold harmless each of the Lenders and the
Agents from and against all liabilities, obligations, losses, damages,
penalties, action, judgments, suits, costs (including attorneys' fees), expenses
or disbursements of any kind whatever which may be imposed upon or asserted
against any of the Agents or any of the Lenders in any way relating to the
business operations of the
64
Credit Parties. It is expressly agreed that none of the Agents or the Lenders
shall control the business activities of the Credit Parties as a result of this
Credit Agreement or the other Loan Documents or the performance thereof.
Section 9.14. Interest Rate Hedging Agreement. Each of the Lenders
may enter into Interest Rate Hedging Agreements with the Company. Each Lender
entering into such an agreement shall provide notice of such agreement and the
amount thereof to the Agent within ten (10) days of the execution thereof,
provided, however, that the failure to give such notice timely shall not affect
any of the obligations and liabilities of the Company, then existing or
thereafter arising, under or with respect to the agreement by which the notice
was to have been given, nor preclude such obligations and liabilities from being
part of the Obligations.
Section 9.15. Execution. This Agreement may be executed, by original
or facsimile signatures, in two or more counterparts, each of which shall
constitute an original, but all of which when taken together shall constitute
but one agreement.
Section 9.16. Limitation of Interest. The Company, the Agent and the
Lenders intend to strictly comply with all applicable laws, including applicable
usury laws. Accordingly, the provisions of this Section 9.16 shall govern and
control over every other provision of this Agreement or any other Loan Document
which conflicts or is inconsistent with this Section 9.16, even if such
provision declares that it controls. As used in this Section 9.16, the term
"interest" includes the aggregate of all charges, fees, benefits or other
compensation which constitute interest under applicable law, provided that, to
the maximum extent permitted by applicable law, (a) any non-principal payment
shall be characterized as an expense or as compensation for something other than
the use, forbearance or detention of money and not as interest, and (b) all
interest at any time contracted for, reserved, charged or received shall be
amortized, prorated, allocated and spread, in equal parts during the full term
of the Obligations. In no event shall the Company or any other Person be
obligated to pay, or any Lender have any right or privilege to reserve, receive
or retain, (a) any interest in excess of the maximum amount of nonusurious
interest permitted under the applicable laws (if any) of the United States or of
any other applicable state, or (b) total interest in excess of the amount which
such Lender could lawfully have contracted for, reserved, received, retained or
charged had the interest been calculated for the full term of the Obligations at
the Highest Lawful Rate. On each day, if any, that the interest rate (the
"Stated Rate") called for under this Agreement or any other Loan Document
exceeds the Highest Lawful Rate, the rate at which interest shall accrue shall
automatically be fixed by operation of this sentence at the Highest Lawful Rate
for that day, and shall remain fixed at the Highest Lawful Rate for each day
thereafter until the total amount of interest accrued equals the total amount of
interest which would have accrued if there were no such ceiling rate as is
imposed by this sentence. Thereafter, interest shall accrue at the Stated Rate
unless and until the Stated Rate again exceeds the Highest Lawful Rate when the
provisions of the immediately preceding sentence shall again automatically
operate to limit the interest accrual rate. The daily interest rates to be used
in calculating interest at the Highest Lawful Rate shall be determined by
dividing the applicable Highest Lawful Rate per annum by the number of days in
the calendar year for which such calculation is being made. None of the terms
and provisions contained in this Agreement or in any other Loan Document which
directly or indirectly relate to interest shall ever be construed without
reference to this Section 9.16, or be construed to create a contract to pay for
the use, forbearance or detention of money at an interest rate in excess of the
Highest
65
Lawful Rate. If the term of any Obligation is shortened by reason of
acceleration of maturity as a result of any Event of Default or by any other
cause, or by reason of any required or permitted prepayment, and if for that (or
any other) reason any Lender at any time, including but not limited to, the
stated maturity, is owed or receives (and/or has received) interest in excess of
interest calculated at the Highest Lawful Rate, then and in any such event all
of any such excess interest shall be canceled automatically as of the date of
such acceleration, prepayment or other event which produces the excess, and, if
such excess interest has been paid to such Lender, it shall be credited pro
tanto against the then-outstanding principal balance of the Company's
obligations to such Lender, effective as of the date or dates when the event
occurs which causes it to be excess interest, until such excess is exhausted or
all of such principal has been fully paid and satisfied, whichever occurs first,
and any remaining balance of such excess shall be promptly refunded to its
payor.
Section 9.17. Confidentiality. The Agent and each Lender agrees to
hold any confidential information which it may receive from the Company in
connection with this Agreement in confidence, except for disclosure (i) to its
Affiliates and to the Agent and any other Lender and their respective
Affiliates, (ii) to legal counsel, accountants, and other professional advisors
to such Lender or to a Transferee, (iii) to regulatory officials, (iv) to any
Person as requested pursuant to or as required by law, regulation, or legal
process, (v) to any Person in connection with any legal proceeding to which it
is a party, (vi) to its direct or indirect contractual counterparties in swap
agreements or to legal counsel, accountants and other professional advisors to
such counterparties, (vii) permitted by Section 10.04, and (viii) to rating
agencies if requested or required by such agencies in connection with a rating
relating to the Advances hereunder. Without limiting Section 9.07, the Company
agrees that the terms of this Section 9.17 shall set forth the entire agreement
between the Company and each Lender (including the Agent) with respect to any
confidential information previously or hereafter received by such Lender in
connection with this Agreement, and this Section 9.17 shall supersede any and
all prior confidentiality agreements entered into by such Lender with respect to
such confidential information.
ARTICLE X.
BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS
Section 10.01. Successors and Assigns. The terms and provisions of
the Loan Documents shall be binding upon and inure to the benefit of the Company
and the Lenders and their respective successors and assigns permitted hereby,
except that (i) the Company shall not have the right to assign its rights or
obligations under the Loan Documents without the prior written consent of each
Lender, (ii) any assignment by any Lender must be made in compliance with
Section 10.3, and (iii) any transfer by Participation must be made in compliance
with Section 10.02. Any attempted assignment or transfer by any party not made
in compliance with this Section 10.01 shall be null and void, unless such
attempted assignment or transfer is treated as a participation in accordance
with Section 10.03(b). The parties to this Agreement acknowledge that clause
(ii) of this Section 10.01 relates only to absolute assignments and this Section
10.01 does not prohibit assignments creating security interests, including,
without limitation, (x) any pledge or assignment by any Lender of all or any
portion of its rights under this Agreement and any Note to a Federal Reserve
Bank or (y) in the case of a Lender which is a
66
Fund, any pledge or assignment of all or any portion of its rights under this
Agreement and any Note to its trustee in support of its obligations to its
trustee; provided, however, that no such pledge or assignment creating a
security interest shall release the transferor Lender from its obligations
hereunder unless and until the parties thereto have complied with the provisions
of Section 10.03. The Agent may treat the Person which made any Loan or which
holds any Note as the owner thereof for all purposes hereof unless and until
such Person complies with Section 10.03; provided, however, that the Agent may
in its discretion (but shall not be required to) follow instructions from the
Person which made any Loan or which holds any Note to direct payments relating
to such Loan or Note to another Person. Any assignee of the rights to any Loan
or any Note agrees by acceptance of such assignment to be bound by all the terms
and provisions of the Loan Documents. Any request, authority or consent of any
Person, who at the time of making such request or giving such authority or
consent is the owner of the rights to any Loan (whether or not a Note has been
issued in evidence thereof), shall be conclusive and binding on any subsequent
holder or assignee of the rights to such Loan.
Section 10.02. Participations.
(a) Permitted Participants; Effect. Any Lender may at any time
sell to one or more banks or other entities ("Participants") participating
interests in any Loan owing to such Lender, any Note held by such Lender, any
Commitment of such Lender or any other interest of such Lender under the Loan
Documents. In the event of any such sale by a Lender of participating interests
to a Participant, such Lender's obligations under the Loan Documents shall
remain unchanged, such Lender shall remain solely responsible to the other
parties hereto for the performance of such obligations, such Lender shall remain
the owner of its Loans and the holder of any Note issued to it in evidence
thereof for all purposes under the Loan Documents, all amounts payable by the
Company under this Agreement shall be determined as if such Lender had not sold
such participating interests, and the Company and the Agent shall continue to
deal solely and directly with such Lender in connection with such Lender's
rights and obligations under the Loan Documents.
(b) Voting Rights. Each Lender shall retain the sole right to
approve, without the consent of any Participant, any amendment, modification or
waiver of any provision of the Loan Documents other than any amendment,
modification or waiver with respect to any Loan or Commitment in which such
Participant has an interest which would require consent of all of the Lenders
pursuant to the terms of Section 9.10 or of any other Loan Document.
(c) Benefit of Certain Provisions. The Company agrees that each
Participant shall be deemed to have the right of setoff provided in Section 2.07
in respect of its participating interest in amounts owing under the Loan
Documents to the same extent as if the amount of its participating interest were
owing directly to it as a Lender under the Loan Documents, provided that each
Lender shall retain the right of setoff provided in Section 2.07 with respect to
the amount of participating interests sold to each Participant. The Lenders
agree to share with each Participant, and each Participant, by exercising the
right of setoff provided in Section 2.07, agrees to share with each Lender, any
amount received pursuant to the exercise of its right of setoff, such amounts to
be shared in accordance with Section 10.02 as if each Participant were a Lender.
The Company further agrees that each Participant shall be entitled to the
benefits of Sections 2.08, 2.09, 2.11, 2.12, and 9.03 to the same extent as if
it were a Lender
67
and had acquired its interest by assignment pursuant to Section 10.03, provided
that (i) a Participant shall not be entitled to receive any greater payment
under Sections 2.08, 2.09, or 2.12 than the Lender who sold the participating
interest to such Participant would have received had it retained such interest
for its own account, unless the sale of such interest to such Participant is
made with the prior written consent of the Company, and (ii) any Participant not
incorporated under the laws of the United States of America or any State thereof
agrees to comply with the provisions of Section 2.12 to the same extent as if it
were a Lender.
Section 10.03. Assignments.
(a) Permitted Assignments. Any Lender may at any time assign to
one or more banks or other entities ("Purchasers") all or any part of its rights
and obligations under the Loan Documents. Such assignment shall be substantially
in the form of EXHIBIT D or in such other form as may be agreed to by the
parties thereto. Each such assignment with respect to a Purchaser which is not a
Lender or an Affiliate of a Lender or an Approved Fund shall either be in an
amount equal to the entire applicable Commitment and Loans of the assigning
Lender or (unless each of the Company and the Agent otherwise consents) be in an
aggregate amount not less than $5,000,000. The amount of the assignment shall be
based on the Commitment or outstanding Loans (if the Commitment has been
terminated) subject to the assignment, determined as of the date of such
assignment or as of the "Trade Date," if the "Trade Date" is specified in the
assignment.
(b) Consents. The consent of the Company shall be required prior
to an assignment becoming effective unless the Purchaser is a Lender, an
Affiliate of a Lender or an Approved Fund, provided that the consent of the
Company shall not be required if a Default has occurred and is continuing. The
consent of the Agent shall be required prior to an assignment becoming effective
unless the Purchaser is a Lender. Any consent required under this Section
10.03(b) shall not be unreasonably withheld or delayed.
(c) Effect; Effective Date. Upon (i) delivery to the Agent of an
assignment, together with any consents required by Sections 10.03(a) and (b),
and (ii) payment of a $3,500 fee to the Agent for processing such assignment
(unless such fee is waived by the Agent), such assignment shall become effective
on the effective date specified in such assignment. The assignment shall contain
a representation by the Purchaser to the effect that none of the consideration
used to make the purchase of the Commitment and Loans under the applicable
assignment agreement constitutes "plan assets" as defined under ERISA and that
the rights and interests of the Purchaser in and under the Loan Documents will
not be "plan assets" under ERISA. On and after the effective date of such
assignment, such Purchaser shall for all purposes be a Lender party to this
Agreement and any other Loan Document executed by or on behalf of the Lenders
and shall have all the rights and obligations of a Lender under the Loan
Documents, to the same extent as if it were an original party thereto, and the
transferor Lender shall be released with respect to the Commitment and Loans
assigned to such Purchaser without any further consent or action by the Company,
the Lenders or the Agent. In the case of an assignment covering all of the
assigning Lender's rights and obligations under this Agreement, such Lender
shall cease to be a Lender hereunder but shall continue to be entitled to the
benefits of, and subject to, those provisions of this Agreement and the other
Loan Documents which survive payment of the Obligations and termination of the
applicable agreement. Any
68
assignment or transfer by a Lender of rights or obligations under this Agreement
that does not comply with this Section 10.03 shall be treated for purposes of
this Agreement as a sale by such Lender of a participation in such rights and
obligations in accordance with Section 10.02. Upon the consummation of any
assignment to a Purchaser pursuant to this Section 10.03(c), the transferor
Lender, the Agent and the Company shall, if the transferor Lender or the
Purchaser desires that its Loans be evidenced by Notes, make appropriate
arrangements so that new Notes or, as appropriate, replacement Notes are issued
to such transferor Lender and new Notes or, as appropriate, replacement Notes,
are issued to such Purchaser, in each case in principal amounts reflecting their
respective Commitments, as adjusted pursuant to such assignment.
(d) Register. The Agent, acting solely for this purpose as an
agent of the Company, shall maintain at one of its offices in Chicago, Illinois,
a copy of each Assignment and Assumption delivered to it and a register for the
recordation of the names and addresses of the Lenders, and the Commitments of,
and principal amounts of the Loans owing to, each Lender pursuant to the terms
hereof from time to time (the "Register"). The entries in the Register shall be
conclusive, and the Company, the Agent and the Lenders may treat each Person
whose name is recorded in the Register pursuant to the terms hereof as a Lender
hereunder for all purposes of this Agreement, notwithstanding notice to the
contrary. The Register shall be available for inspection by the Company at any
reasonable time and from time to time upon reasonable prior notice.
Section 10.04. Dissemination of Information. The Company authorizes
each Lender to disclose to any Participant or Purchaser or any other Person
acquiring an interest in the Loan Documents by operation of law (each a
"Transferee") and any prospective Transferee any and all information in such
Lender's possession concerning the creditworthiness of the Company and its
Subsidiaries, including without limitation any information contained in any
Reports; provided that each Transferee and prospective Transferee agrees to be
bound by Section 9.17 of this Agreement.
Section 10.05. Tax Treatment. If any interest in any Loan Document
is transferred to any Transferee which is not incorporated under the laws of the
United States or any State thereof, the transferor Lender shall cause such
Transferee, concurrently with the effectiveness of such transfer, to comply with
the provisions of Section 2.12.
69
IN WITNESS WHEREOF, the Agent, the Lenders and the Credit Parties
have by their duly authorized officers executed this Agreement as of the date
first set forth above.
VALLEY NATIONAL GASES, INC.,
a West Virginia corporation
By: /s/ Xxxxx X. Xxxx
--------------------------------------
Xxxxx X. Xxxx, President
And
By: /s/ Xxxxxx X. Xxxxxxxx
--------------------------------------
Xxxxxx X. Xxxxxxxx, Chief Financial
Officer and Secretary
(the "Company")
VALLEY NATIONAL GASES INCORPORATED
a Pennsylvania corporation
By: /s/ Xxxxx X. Xxxx
---------------------------------
Xxxxx X. Xxxx, President
And
By: /s/ Xxxxxx X. Xxxxxxxx
---------------------------------
Xxxxxx X. Xxxxxxxx, Chief Financial
Officer and Secretary
("VNGI")
VALLEY NATIONAL GASES DELAWARE,
INC., a Delaware corporation
By: /s/ Xxxxx X. Xxxx
----------------------------------
Xxxxx X. Xxxx, President
And
By: /s/ Xxxxxx X. Xxxxxxxx
----------------------------------
Xxxxxx X. Xxxxxxxx, Chief Financial
Officer
("VNGDI")
BANK ONE, NA, as Agent, Sole Lead Arranger,
and Lender
By: /s/ Xxxxx X. Xxxxx
-----------------------------------------
Printed: Xxxxx X. Xxxxx
Title: First Vice President
NATIONAL CITY BANK, as Syndication Agent
and Lender
By: /s/ R E Xxxxxx
-----------------------------------------
Printed: Xxxxx X Xxxxxx
Title: Vice President
FIFTH THIRD BANK, as Documentation Agent
and Lender
By: /s/ Xxxx X. Xxxxx XX
-----------------------------------------
Printed: Xxxx X. Xxxxx XX
Title: VP
LaSALLE BANK NATIONAL ASSOCIATION,
as Lender
By: /s/ Xxxxxxxx X Xxxxxxx
-----------------------------------------
Printed: Xxxxxxxx X. Xxxxxxx
Title: Assistant Vice President
