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AMENDMENT NO. 10 TO CREDIT AGREEMENT
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THIS AMENDMENT NO. 10 TO CREDIT AGREEMENT ("Amendment No. 10")
is dated as of December 29, 1997, by and among Uni-Marts, Inc. (the
"Borrower"), PNC Bank, National Association, CoreStates Bank, N.A.
and The Sumitomo Bank, Limited (the "Banks") and PNC Bank, National
Association in its capacity as Agent for the Banks (the "Agent").
W I T N E S S:
WHEREAS, the Borrower, the Banks and the Agent are parties to a
Credit Agreement dated as of March 1, 1993 and previously amended
nine times as follows:
Amendment Date
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Xx. 0 Xxxxx 00, 0000
Xx. 2 July 1, 1994
No. 3 October 26, 1994
No. 4 March 27, 1995
No. 5 December 26, 1995
No. 6 March 28, 1996
No. 7 December 31, 1996
No. 8 February 20, 1997
No. 9 April 15, 1997
The Credit Agreement, as heretofore amended, is referred to herein as
the "Credit Agreement"; and
WHEREAS, the Borrower, the Banks and the Agent wish to further
amend the Credit Agreement as herein set forth.
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NOW, THEREFORE, in consideration of the premises and the mutual
covenants and promises set forth herein, the parties hereto,
intending to be legally bound, agree as follows:
1. Effect of Amendment. Except as expressly modified by
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this Amendment, the Credit Agreement shall remain in full force and
effect. All capitalized terms not specifically defined herein
(directly or by reference) shall have the meanings ascribed to them
in the Credit Agreement.
2. Ratification. The parties hereto reaffirm and ratify
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all of their respective rights, privileges, duties and obligations as
heretofore set forth in the Credit Agreement. Borrower acknowledges
that the Banks and the Agent have fully performed all of their
obligations to Borrower under the Credit Agreement and that Borrower
does not have, nor has Borrower asserted, any claims or causes of
action against the Banks or the Agent.
3. Amendment Fee. In consideration of the undertakings of
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the Bank and the Agent as set forth herein, Borrower agrees to pay a
$150,000 amendment fee to the Agent on January 2, 1998 which shall be
distributed by the Agent pro-rata to the Banks in accordance with
their respective shares of Loans to the Borrower. Assuming
availability exists, the amendment fee shall be paid pursuant to a
Revolving Credit Loan in the amount of $150,000 which Borrower hereby
authorizes the Agent to execute on its behalf on January 2, 1998.
The amendment fee payable hereunder shall not reduce, offset or be
credited against any other obligations of the Borrower to the Banks
or the Agent under the Credit Agreement or otherwise.
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4. Term Loan Maturity. Notwithstanding any inconsistent
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provisions in the Credit Agreement or the Term Loan Notes, the Term
Loan Maturity Date and the Term Loan (Combined) Maturity Date shall
both occur on December 31, 1999. All principal, interest and other
fees not theretofore paid pursuant to the Credit Agreement with
respect to the Term Loans and the Term Loans (Combined) prior thereto
shall be due and payable in full and without reduction, credit or
offset on December 31, 1999. The Maturity Dates set forth herein
shall not diminish nor preclude earlier repayment pursuant to
voluntary prepayments or mandatory prepayments allowed or required
under the Credit Agreement.
5. Waiver. In consideration of Borrower's undertakings
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pursuant to this Amendment and without any waiver with respect to the
rights of the Banks or the Agent relating to Events of Default which
occur or are first discovered by the Banks after the date hereof, the
Banks and the Agent waive the Event of Default under Section 8.02(m)
of the Credit Agreement. In addition (premised upon the Borrower's
undertakings concerning repayment of the Existing Senior Notes set
forth herein), the Banks and the Agent agree to waive as of the date
hereof any Event of Default under Section 9.01(e) of the Credit
Agreement which has or may have occurred by reason of a default or
event of default with respect to the Existing Senior Notes.
6. Modified Amortization. In lieu of the present required
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amortization of the Term Loans provided for in the Credit Agreement
and exclusive of any voluntary or required prepayments, Borrower
shall make the following principal reduction payments for application
to the Term Loans on the dates specified:
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Date Principal Reduction Payment
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February 2, 1998 $1,905,000.00
May 1, 1998 $1,905,000.00
August 3, 1998 $1,905,000.00
October 31, 1998 $1,905,000.00
February 1, 1999 $2,000,000.00
May 3, 1999 $2,000,000.00
August 2, 1999 $2,000,000.00
October 31, 1999 $2,000,000.00
December 31, 1999 All remaining amounts due
Other than voluntary or mandatory prepayments applied in
accordance with the Credit Agreement upon repayment in full of the
Term Loans, there shall be no scheduled amortization of principal due
with respect to the Term Loans (Combined) prior to the Term Loans
(Combined) Maturity Date; on which Maturity Date all amounts payable
with respect to the Term Loans (Combined) shall be repaid in full.
7. Interest Rate Change. Effective January 1, 1998,
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the Borrower shall pay interest in respect of the outstanding
unpaid principal amount of all Revolving Credit Loans in accordance
with the Revolving Credit Interest Rate Options set forth in Section
4.01 of the Credit Agreement plus an additional .25% per annum; such
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change increasing the rate payable with respect to the Base Rate
Option to the Base Rate plus .25% per annum and the rate payable
----
under the Euro-Rate Option to the Euro-Rate plus 2% per annum.
----
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8. Mandatory Prepayments. Section 5.06 of the Credit
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Agreement is hereby deleted and replaced with the following:
5.06 Mandatory Prepayment
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(a) Upon the closing of any Offering, the Borrower
shall, on the date of such closing, use the lesser of (i)
all of the proceeds of such Offering, net only of
customary and reasonable expenses incurred by the Borrower
in connection with the Offering, or (ii) $10,000,000 to
prepay the principal of the Term Loans and Term Loans (Combined)
then outstanding.
(b) Promptly following the receipt of the proceeds
of sale of any of the Borrower's assets (as said term is
defined in accordance with generally accepted accounting
principles, consistently applied), excluding the proceeds
of sale of Borrower's inventory held for sale in the
normal course of business, individual assets sold for less
than $2,500 and the proceeds of Borrower's presently
contemplated asset sale to Getty Petroleum, the Borrower
shall pay all of such proceeds, net only of Permitted Lien
repayment and customary and reasonable expenses incurred
by the Borrower in connection with such sale(s), to prepay
the principal of the Term Loans and Term Loans (Combined)
then outstanding.
(c) Within 45 days after the end of each fiscal
quarter of the Borrower, the Borrower shall pay 90% of its
Excess Cash Flow (as defined in this subparagraph) to
prepay the principal of the Term Loans and the Term Loans
(Combined) then outstanding. "Excess Cash Flow" shall
mean the difference (if positive) between Borrower's
Consolidated Cash Flow From Operations (which, for
purposes of this subparagraph and calculation of
Borrower's Minimum Fixed Charge Coverage Ratio, shall
include payments from asset sales to Getty Petroleum) for
such fiscal quarter and Borrower's Fixed Charges for such
fiscal quarter.
(d) All mandatory prepayments required pursuant to
this Section shall be applied first to unpaid installments
of principal of the Term Loans (Combined) until repaid in
full and, thereafter, to reduce scheduled amortization
payments on the Term Loans in the inverse order of
scheduled maturity.
9. Affirmative Covenants. A new Section 8.01(k) shall be
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added to the Credit Agreement which shall provide as follows:
(k) At any time after the end of the
Borrower's fiscal quarter ending July 2, 1998 (and
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periodically at six month intervals thereafter), the
Borrower shall retain an entity designated by the
Banks and satisfactory to the Borrower for the
purpose of counting and auditing inventory in not
less than 25% of the retail outlet stores then
operated by Borrower; said 25% of retail outlets to
be selected by the independent entity or the Banks
without prior notice to the Borrower. Said entity
shall prepare a written report of its findings and a
copy thereof shall be simultaneously delivered to the
Borrower and the Banks. Within 30 days of the
receipt of any such report, the Borrower shall
compare its findings with the Borrower's internal
inventory calculations and shall provide the Banks
with a written report identifying any discrepancies
discovered and any adjustments applied as a result
thereof.
10. Negative Covenants.
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(a) Section 8.02(a) of the Credit Agreement is hereby amended
by deleting the existing text after the title "Indebtedness" and
before the existing subparagraphs thereof and adding the following in
its place:
"The Borrower shall not, and shall not permit any
Subsidiary to, at any time create, incur, assume or
suffer to exist Indebtedness, whether or not
otherwise permitted pursuant to the Credit Agreement,
which purports to preclude the Borrower or any
Subsidiary from granting Liens on any of their
property or assets, tangible or intangible, now owned
or hereafter acquired, to or in favor of the Banks.
After January 1, 1998, the Borrower shall not, and
shall not permit any Subsidiary to, at any time
create, incur, assume or suffer to exist Indebtedness
of greater than $250,000 in the aggregate or become
liable in respect of any Guaranty for Indebtedness
unless such Indebtedness or liability on such
Guaranty is expressly subordinated (on terms and
conditions satisfactory to the Banks in their sole
discretion) to the repayment of all amounts due under
the Credit Agreement. Subject to and consistent with
the foregoing, the Borrower shall not, and shall not
permit any Subsidiary to, at any time, create, incur,
assume or suffer to exist any Indebtedness, except:"
(b) Section 8.02(k) of the Credit Agreement is hereby amended
by deleting the amount "$4,000,000" as the Aggregate Permitted Amount
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for fiscal years ending on and after September 30, 1998 and
substituting therefor the amount "$3,000,000".
(c) Section 8.02(l) of the Credit Agreement is hereby deleted
in its entirety and the following is inserted in lieu thereof:
(1) Minimum Fixed Charge Coverage Ratio.
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The Borrower shall not permit the Fixed Charge
Coverage Ratio to be less than the ratio set
forth below for the periods specified below:
Period Ratio
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Fiscal Quarter Ended
January 1, 1998 .75:1.0
The Two Consecutive
Fiscal Quarters Ending
April 2, 1998 .85:1.0
The Three Consecutive
Fiscal Quarters Ending
July 2, 1998 .875:1.0
Fiscal Year Ending
September 30, 1998 .90:1.0
Four Consecutive Fiscal
Quarters Ending at the End
of Each Subsequent Fiscal
Quarter 1.0:1.0
(d) Section 8.02(m) of the Credit Agreement is deleted in its
entirety and the following is inserted in lieu thereof:
(m) Maximum Leverage Ratio. The
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Borrower shall not permit the ratio of
Consolidated Total Liabilities to Consolidated
Net Worth to exceed the ratio set forth below
for the period specified:
Period Ratio
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Fiscal Quarter Ending
January 1, 1998 2.75:1.0
Fiscal Quarter Ending
April 2, 1998 2.65:1.0
Fiscal Quarter Ended July
2, 1998 and Thereafter 2.50:1.0
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(e) Section 8.02(o) of the Credit Agreement is deleted in its
entirety.
11. EBITDA Covenant. The Credit Agreement is hereby
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amended to add an additional Negative Covenant as Section 8.02(p)
providing as follows:
(p) The Borrower shall not permit its
earnings before interest, income taxes,
depreciation and amortization (determined in
accordance with generally accepted accounting
principles, consistently applied) to be less
than the amount set forth below for the period
specified:
Amount (not
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Period Cumulative)
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Fiscal Quarter Ending
January 1, 1998 $2,175,000
Fiscal Quarter Ending
April 2, 1998 $1,750,000
Fiscal Quarter Ending
July 2, 1998 $3,600,000
Fiscal Quarter
Ending September 30, 1998 $3,450,000
Fiscal Quarter
Ending January, 1999
and each Fiscal Quarter
Thereafter $2,500,000
12. Merchandise Performance Covenant. A new Merchandise
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Performance Covenant shall be added to the Credit Agreement as
Section 8.02(q) as follows:
(q) Minimum Merchandise Performance
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Requirement. The Borrowers shall not permit
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its "Merchandise Performance Income" (as defined
herein) to be less than the amount set forth
below for the period specified:
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Amount (Not
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Period Cumulative)
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Fiscal Quarter Ending
January 1, 1998 ($2,000,000)
Fiscal Quarter Ended
April 2, 1998 ($1,500,000)
Fiscal Quarter Ended
July 2, 1998 and each
Fiscal Quarter Thereafter $0
"Merchandise Performance Income" shall be
calculated for each applicable period by
subtracting gasoline cost of good sold from
Borrower's total cost of goods sold to determine
"merchandise cost of goods sold"; adding
thereto Borrower's selling expense for the
period and subtracting the sum of "merchandise
cost of goods" sold plus selling expense from
merchandise sales for the period. Gasoline
costs of goods sold shall be determined for each
applicable period by multiplying the gallons of
gasoline sold by the average sale price less the
average margin per gallon of gasoline sold.
Gallons of gasoline sold, the average sale price
per gallon, the average margin per gallon, total
cost of goods sold, selling expense and
merchandise sales shall be calculated by
Borrower utilizing the same definitions and
methods, consistently applied, as have
heretofore been utilized by Borrower in
connection with reporting these amounts to the
Securities and Exchange Commission in periodic
filings.
13. Senior Note Repayment. The Agent and the Banks hereby
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consent to repayment by the Borrower of the remaining principal
balance due by Borrower on the Existing Senior Notes from the
proceeds of Borrower's presently contemplated asset sale to Getty
Petroleum, said repayment to be completed by the Borrower on or
before February 2, 1998. Borrower's failure to repay the Senior
Notes on or before February 2, 1998 shall constitute a breach of
Borrower's warranties and representations to the Bank.
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14. Conditions Precedent. The effect and applicability of
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this Amendment No. 10 is expressly conditioned upon:
(a) The Agent's receipt of counterparts of this Amendment No.
10 duly executed by the Borrower and each of the Banks;
(b) The Agent's receipt of a certificate signed by the
Secretary or Assistant Secretary of the Borrower dated as of the
Amendment No. 10 Closing Date certifying as to all action taken by
the Borrower to authorize the execution, delivery and performance of
this Amendment No. 10; and
(c) A written opinion of Borrower's legal counsel dated as of
the Amendment No. 10 Closing Date and in a form and substance
satisfactory to the Agent and its counsel which states that Amendment
No. 10 constitutes a binding obligation of the Borrower enforceable
in accordance with its terms (subject to applicable bankruptcy and
equity exceptions).
15. Warranties and Representations. The Borrower hereby
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represents to the Agent and the Banks that, after giving effect to
the waiver provided in Paragraph 5 hereof, the representations and
warranties of the Borrower contained in Article VI of the Credit
Agreement remain true and accurate on and as of the date hereof.
16. Fee Reimbursement. The Borrower agrees to reimburse
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the Agent and the Banks immediately upon invoice for all reasonable
costs, expenses and disbursements incurred by the Banks with respect
to the negotiation and documentation of this Amendment No. 10.
Payment of such costs and expenses by Borrower shall be an
independent obligation undertaken pursuant to this Amendment No. 10
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but shall also fulfill Borrower's existing obligations as provided in
Sections 10.05 and 11.03 of the Credit Agreement.
17. Governing Law. This Amendment No. 10 shall be governed
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by and construed in accordance with the internal laws of the
Commonwealth of Pennsylvania without reference to its principles of
conflicts of law.
18. Execution. This Amendment may be executed in one or
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more counterparts, each of which shall be deemed an original and all
of which shall constitute one in the same instrument. Execution
shall be deemed complete when the Agent has received any number of
counterparts which, taken together, contain the signatures of all
parties to this Amendment No. 10.
IN WITNESS WHEREOF, the parties hereto have executed this
Amendment No. 10 as of the date first above written.
UNI-MARTS, INC.
By: /S/ J. XXXX XXXXXXXX
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Title: Executive Vice President
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PNC BANK, NATIONAL ASSOCIATION,
individually and as Agent
By: /S/ XXXXX X. XXXXXXXX
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Title: Vice President
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CORESTATES BANK, N.A.
By: /S/ XXXX X. XXXXXXXX
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Title: Senior Vice President
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THE SUMITOMO BANK, LIMITED
By: /S/ XXXXXX X. XXXXXXXXX
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Title: Vice President
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By: /S/ XXXX X. XXXX
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Title: Vice President
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