FINANCING AGREEMENT
Dated as of March 12, 1999
by and among
ALL STAR GAS CORPORATION,
as Borrower,
EACH OF ITS DIRECT AND INDIRECT SUBSIDIARIES,
as Guarantor,
and
ABLECO FINANCE LLC,
as Lender
FINANCING AGREEMENT
Financing Agreement, dated as of March 12, 1999, by and among ALL STAR
GAS CORPORATION, a Missouri corporation (the "Borrower"), the Guarantors
(as hereinafter defined), and ABLECO FINANCE LLC, a Delaware limited
liability company (as lender and as agent for itself and each Person that
purchases any portion of Ableco Finance LLC's rights and obligations under
this Agreement pursuant to Section 11.07, collectively, the "Lender").
RECITALS
The Borrower and the Guarantors (each, a "Loan Party" and
collectively, the "Loan Parties") have asked the Lender to extend credit to
the Borrower consisting of a revolving credit facility in an aggregate
principal amount not to exceed $15,000,000 at any time outstanding. The
proceeds of loans made under the revolving credit facility shall be used
(i) to repay certain existing indebtedness of the Loan Parties and (ii) for
working capital needs in the ordinary course of business of the Loan
Parties. The Lender is willing to extend such credit to the Borrower
subject to the terms and conditions hereinafter set forth.
In consideration of the premises and the covenants and agreements
contained herein, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS; CERTAIN TERMS
SECTION 1.01 Definitions. As used in this Agreement, the
following terms shall have the respective meanings indicated below, such
meanings to be applicable equally to both the singular and plural forms of
such terms:
"Account Debtor" means each debtor, customer or obligor in any way
obligated on or in connection with any Account Receivable.
"Account Receivable" means any and all rights of the Loan Parties to
payment for goods sold and services rendered, including accounts, general
intangibles and any and all such rights evidenced by chattel paper,
instruments or documents, whether due or to become due and whether or not
earned by performance, and whether now or hereafter acquired or arising in
the future and any proceeds arising therefrom or relating thereto.
"Action" has the meaning specified therefor in Section 11.12.
"Affiliate" means, as to any Person, any other Person that directly or
indirectly through one or more intermediaries, controls, is controlled by,
or is under common control with, such Person. For purposes of this
definition, "control" of a Person means the power, directly or indirectly,
either to (i) vote 10% or more of the Capital Stock having ordinary voting
power for the election of directors of such Person or (ii) direct or cause
the direction of the management and policies of such Person whether by
contract or otherwise. Notwithstanding anything herein to the contrary, in
no event shall the Lender be considered an "Affiliate" of any Loan Party.
"Agreement" means this Financing Agreement, together with all Exhibits
and Schedules hereto.
"Authorized Officer" means, with respect to a Loan Party, the chief
executive officer, chief financial officer, president or executive vice
president of such Loan Party, or any other person authorized by such Loan
Party in a manner reasonably satisfactory to the Lender.
"Bankruptcy Code" means the United States Bankruptcy Code (11 U.S.C.
section 101 et seq.), as amended, and any successor statute.
"Board" means the Board of Governors of the Federal Reserve System of
the United States.
"Book Value" means, as to any Inventory, the lower of (i) cost (as
reflected in the general ledger of the Loan Parties before customary (but
not extraordinary) reserves established by the Loan Parties in good faith
and in accordance with GAAP) and (ii) market value, in each case determined
in accordance with GAAP (calculated on a first in first out basis).
"Borrower" has the meaning specified therefor in the preamble hereto.
"Borrowing Base" means, at any time, (i) the sum of (A) the lesser of
(x) the product of 85% times the Net Amount of Eligible Accounts Receivable
at such time and (y) the product of 100% times the prior month's
collections from Accounts Receivable, excluding prepaid deposits, plus
(B) the product of 55% times the aggregate Book Value of Eligible Inventory
at such time, plus (C) during the period from January 15 through April 15
of each year, the Overadvance Amount, minus (ii) such reserves as the
Lender may deem appropriate in the exercise of its reasonable business
judgment based upon the lending practices of the Lender consistent with the
practices customary in the commercial finance industry.
"Borrowing Base Certificate" means a certificate signed by the chief
executive officer, chief financial officer or executive vice president of
the Borrower and setting forth the calculation of the Borrowing Base in
compliance with Section 6.01(a)(vii), substantially in the form of Exhibit
J.
"Business Day" means any day other than a Saturday, Sunday or other
day on which commercial banks in New York City are authorized or required
to close.
"Capital Expenditures" means, with respect to any Person for any
period, the sum of (i) the aggregate of all expenditures by such Person and
its Subsidiaries during such period that in accordance with GAAP are or
should be included in "property, plant equipment" or similar fixed asset
account on its balance sheet, whether such expenditures are paid in cash or
financed and including all Capitalized Lease Obligations paid or payable
during such period, and (ii) to the extent not covered by clause (i) above,
the aggregate of all expenditures by such Person and its Subsidiaries to
acquire by purchase or otherwise the business or fixed assets of, or the
Capital Stock of, any other Person, but excluding in each case any purchase
permitted under Section 6.02(e)(ii).
"Capitalized Lease" means, with respect to any Person, any lease of
real or personal property by such Person as lessee which is required under
GAAP to be capitalized on the balance sheet of such Person.
"Capitalized Lease Obligations" means, with respect to any Person,
obligations of such Person and its Subsidiaries under Capitalized Leases,
and, for purposes hereof, the amount of any such obligation shall be the
capitalized amount thereof determined in accordance with GAAP.
"Capital Stock" means (i) with respect to any Person that is a
corporation, any and all shares, interests, participations or other
equivalents (however designated and whether or not voting) of corporate
stock, and (ii) with respect to any Person that is not a corporation, any
and all partnership or other equity interests of such Person.
"Cash and Cash Equivalents" means all cash and any presently existing
or hereafter arising deposit account balances, certificates of deposit or
other financial instruments properly classified as cash equivalents under
GAAP.
"Cash Concentration Account" means the deposit account maintained by
the Borrower at the Cash Concentration Account Bank, which deposit account
shall be under the sole dominion and control of the Lender.
"Cash Concentration Account Agreement" means an agreement, in form and
substance satisfactory to the Lender, among the Cash Concentration Account
Bank, the Borrower and the Lender, delivered to the Lender pursuant to
Section 6.01(p), as the same may be amended or otherwise modified from time
to time.
"Cash Concentration Account Bank" means a bank mutually acceptable to
the Borrower and the Lender.
"Change of Control" means each occurrence of any of the following:
(a) (i) the Permitted Holders ceasing to have beneficial
ownership (as defined in Rule 13d-3 under the Exchange Act), in the
aggregate, of at least 65% of the aggregate outstanding voting power of the
Borrower, free and clear of any Liens, (ii) the Borrower shall cease to
have beneficial ownership (as defined in Rule 13d-3 under the Exchange Act)
of 100% of the aggregate outstanding voting power of the Capital Stock of
each Guarantor, and (iii) Xxxx X. Xxxxxxx shall cease to be involved in the
day to day operations and management of the business of the Borrower;
(b) (i) the Borrower consolidates with or merges into
another entity or conveys, transfers or leases all or substantially all of
its property and assets to any Person, or (ii) any Unrestricted Guarantor
consolidates with or merges into another entity (excluding another
Unrestricted Guarantor) or conveys, transfers or leases all or
substantially all of its property and assets to another Person (excluding
another Unrestricted Guarantor) or (iii) any Restricted Guarantor
consolidates with or merges into another entity (excluding another Loan
Party) or conveys, transfers, or leases all or substantially all of its
property and assets to another Person (excluding another Loan Party), or
(iv) any entity consolidates with or merges into any Loan Party in a
transaction pursuant to which the outstanding voting Capital Stock of such
Loan Party are reclassified or changed into or exchanged for cash,
securities or other property, other than any such transaction described in
this clause (iv) in which either (A) in the case of any such transaction
involving the Borrower, the Permitted Holders have beneficial ownership in
the aggregate of at least 65% of the aggregate voting power of all Capital
Stock of the resulting, surviving or transferee entity or (B) in the case
of any such transaction involving a Loan Party other than the Borrower, the
Borrower has beneficial ownership in the aggregate of 100% of the aggregate
voting power of all Capital Stock of the resulting, surviving or transferee
entity; and
(c) a "Change of Control", as such term is defined under
either of the Indentures.
"Code" means the Internal Revenue Code of 1986, as amended (or
any successor statute thereto) and the regulations thereunder.
"Collateral" means all of the property and assets and all
interests therein and proceeds thereof now owned or hereafter acquired by
any Person upon which a Lien is granted by such Person as security for all
or any part of the Obligations.
"Commitment" means the Revolving Credit Commitment.
"Consolidated EBITDA" means, with respect to any Person for any
period, the Consolidated Net Income of such Person for such period, plus,
(i) without duplication, the sum of the following amounts of such Person
and its Subsidiaries for such period and to the extent deducted in
determining Consolidated Net Income of such Person for such period: (A)
Consolidated Net Interest Expense, (B) income tax expense, (C) depreciation
expense, (D) amortization expense, and (E) (i) extraordinary or unusual
non-cash losses less (ii) extraordinary or unusual gains.
"Consolidated Net Income" means, with respect to any Person for
any period, the net income (loss) of such Person and its Subsidiaries for
such period, determined on a consolidated basis and in accordance with
GAAP.
"Consolidated Net Interest Expense" means, with respect to any
Person for any period, gross interest expense of such Person and its
Subsidiaries for such period determined in conformity with GAAP (including,
without limitation, interest expense paid to Affiliates of such Person) and
calculated as and when such interest is paid, less (i) the sum of
(A) interest income for such period and (B) gains for such period on
Hedging Agreements (to the extent not included in interest income above and
to the extent not deducted in the calculation of such gross interest
expense), plus (ii) the sum of (A) losses for such period on Hedging
Agreements (to the extent not included in such gross interest expense) and
(B) the upfront costs or fees for such period associated with Hedging
Agreements (to the extent not included in gross interest expense), each
determined on a consolidated basis and in accordance with GAAP for such
Person and its Subsidiaries.
"Consolidated Tangible Net Worth" means, with respect to any
Person at any time, (i) the sum of the following accounts (or their
equivalents) set forth on a consolidated balance sheet of such Person and
its Subsidiaries prepared in accordance with GAAP: the par or stated value
of all outstanding Capital Stock, capital surplus and retained earnings (or
less accumulated deficits), less (ii) the sum of (A) all intangibles
included on the asset side of such balance sheet, including, without
limitation, goodwill (including any amounts, however designated on such
balance sheet, representing the excess of the purchase price paid for
assets or stock acquired over the value assigned thereto on the books of
such Person and its Subsidiaries), patents, trademarks, trade names,
copyrights and similar intangibles and (B) the aggregate amount of all
treasury stock held by such Person.
"Contingent Obligation" means, with respect to any Person, any
obligation of such Person guaranteeing or intended to guarantee any
Indebtedness, leases, dividends or other obligations ("primary
obligations") of any other Person (the "primary obligor") in any manner,
whether directly or indirectly, including, without limitation, (i) the
direct or indirect guaranty, endorsement (other than for collection or
deposit in the ordinary course of business), co-making, discounting with
recourse or sale with recourse by such Person of the obligation of a
primary obligor, (ii) the obligation to make take-or-pay or similar
payments, if required, regardless of nonperformance by any other party or
parties to an agreement, (iii) any obligation of such Person, whether or
not contingent, (A) to purchase any such primary obligation or any property
constituting direct or indirect security therefor, (B) to advance or supply
funds (1) for the purchase or payment of any such primary obligation or (2)
to maintain working capital or equity capital of the primary obligor or
otherwise to maintain the net worth or solvency of the primary obligor, (C)
to purchase property, assets, securities or services primarily for the
purpose of assuring the owner of any such primary obligation of the ability
of the primary obligor to make payment of such primary obligation or (D)
otherwise to assure or hold harmless the holder of such primary obligation
against loss in respect thereof; provided, however, that the term
"Contingent Obligation" shall not include any products warranties extended
in the ordinary course of business. The amount of any Contingent
Obligation shall be deemed to be an amount equal to the stated or
determinable amount of the primary obligation with respect to which such
Contingent Obligation is made (or, if less, the maximum amount of such
primary obligation for which such Person may be liable pursuant to the
terms of the instrument evidencing such Contingent Obligation) or, if not
stated or determinable, the maximum reasonably anticipated liability with
respect thereto (assuming such Person is required to perform thereunder),
as determined by such Person in good faith.
"Contribution Agreement" means an Indemnity, Subrogation and
Contribution Agreement to be executed by each of the Loan Parties,
substantially in the form of Exhibit B, as the same may be amended or
otherwise modified from time to time.
"Default" means an event which, with the giving of notice or the
lapse of time or both, would constitute an Event of Default.
"Depository Accounts" means the lock-box or blocked depository
accounts maintained by the Loan Parties for the collection of the cash of
the Loan Parties and the proceeds from Accounts Receivable and the sale of
the Inventory of the Loan Parties.
"Depository Account Agreements" means each agreement,
substantially in the form of Exhibit L hereto, among a Depository Bank, a
Loan Party and the Lender delivered to the Lender pursuant to Section
6.01(p), as such Agreement may be amended or otherwise modified from time
to time.
"Depository Bank" means each financial institution at which a
Depository Account is maintained.
"Disposition" means any transaction, or series of related
transactions, pursuant to which any Loan Party sells, assigns, transfers or
otherwise disposes of any property or assets (whether now owned or
hereafter acquired) to any other Person, in each case whether or not the
consideration therefor consists of cash, securities or other assets owned
by the acquiring Person, excluding any sales of Inventory in the ordinary
course of business on ordinary business terms or sales or other
dispositions of Permitted Investments.
"Dollar," "Dollars" and the symbol "$" each means lawful money of
the United States of America.
"Effective Date" means the date on which all of the conditions
precedent set forth in Article IV are satisfied or waived and the initial
Loan is made.
"Eligible Accounts Receivable" means the Accounts Receivable
which are, and at all times continue to be, acceptable to the Lender in the
exercise of its reasonable business judgment. In general, an Account
Receivable may, in the sole and absolute discretion of the Lender, be
deemed to be eligible if: (i) delivery of the merchandise or the rendition
of the services has been completed; (ii) with respect to such Account
Receivable, no return, rejection, repossession or dispute has occurred, the
Account Debtor has not asserted any setoff, defense or counterclaim, and
there has not occurred any extension of the time for payment without the
consent of the Lender, provided that, in the case of any dispute, setoff,
defense or counterclaim with respect to an Account Receivable, the portion
of such Account Receivable not subject to such dispute, setoff, defense or
counterclaim will not be ineligible solely by reason of this clause (ii);
(iii) such Account Receivable is lawfully owned by a Loan Party free and
clear of any Lien other than in favor of the Lender and otherwise continues
to be in full conformity with all representations and warranties made by
the Loan Parties to the Lender with respect thereto in the Loan Documents;
(iv) such Account Receivable is unconditionally payable in Dollars within
120 days from the invoice date and is not evidenced by a promissory note,
chattel paper or any other instrument or other document; (v) no more than
90 days have elapsed from the invoice due date and no more than 120 days
have elapsed from the invoice date with respect to such Account Receivable;
(vi) such Account Receivable is not due from an Affiliate of the Borrower
or, if such Account Receivable is due from an Affiliate of the Borrower,
only to the extent that the invoice amount of such Account Receivable
together with the invoice amount of all other Accounts Receivable for which
such Affiliate is the Account Debtor do not exceed $5,000 in the aggregate
at any time outstanding; (vii) such Account Receivable does not constitute
an obligation of the United States or any other Governmental Authority
(unless all steps required by the Lender in connection therewith, including
notice to the United States Government under the Federal Assignment of
Claims Act or comparable state statute, have been duly taken in a manner
satisfactory to the Lender); (viii) the Account Debtor (or the applicable
office of the Account Debtor) with respect to such Account Receivable is
located in the continental United States, unless such Account Receivable is
supported by a letter of credit or other similar obligation satisfactory to
the Lender which has been pledged to the Lender; (ix) the Account Debtor
with respect to such Account Receivable is not also a supplier to or
creditor of any Loan Party, unless (A) the aggregate invoice amount of all
Accounts Receivable owing by such Account Debtor to the Loan Parties does
not exceed $5,000 in the aggregate at any time outstanding or (B) such
Account Debtor has executed a no-offset letter satisfactory to the Lender;
(x) not more than 50% of the aggregate amount of all Accounts Receivable of
the Account Debtor with respect to such Account Receivable have remained
unpaid 90 days past the invoice due date or 120 days past the invoice date;
(xi) the Account Debtor with respect to such Account Receivable (A) has not
filed a petition for bankruptcy or any other relief under the Bankruptcy
Code or any other law relating to bankruptcy, insolvency, reorganization or
relief of debtors, made an assignment for the benefit of creditors, had
filed against it any petition or other application for relief under the
Bankruptcy Code or any such other law, (B) has not failed, suspended
business operations, become insolvent or called a meeting of its creditors
for the purpose of obtaining any financial concession or accommodation,
(C) has not had or suffered to be appointed a receiver or a trustee for all
or a significant portion of its assets or affairs or (D) in the case of an
Account Debtor who is an individual, has not died or been declared
incompetent and is not an employee of the Borrower or any of its
Affiliates, or, if such Account Debtor is an employee of the Borrower or
any of its Affiliates, only to the extent that the invoice amount of such
Account Receivable together with the invoice amount of all other Accounts
Receivable of such Account Debtor do not exceed $5,000 in the aggregate at
any time outstanding; (xii) the Lender is, and continues to be, satisfied
with the credit standing of the Account Debtor in relation to the amount of
credit extended and the Lender believes, in its discretion, that the
prospect of collection of such Account Receivable is not impaired for any
reason; and (xiii) such Account Receivable is, and at all times shall
continue to be, reasonably acceptable to the Lender, provided that,
notwithstanding anything to the contrary, any Account Receivable arising
from a sale for which a Loan Party has received a deposit shall not be an
Eligible Account Receivable.
"Eligible Inventory" means all Inventory of propane gas, parts,
materials and appliances, in each case that is held by a Loan Party for
sale in the ordinary course of business and that meets all of the following
specifications: (i) such Inventory is lawfully owned by a Loan Party free
and clear of any existing Lien, other than that of the Lender under the
Loan Documents; (ii) such Inventory is not held on consignment and may be
lawfully sold and it continues to be in full conformity with all
representations and warranties made by the Loan Parties with respect
thereto in the Loan Documents; (iii) the Loan Party owning such Inventory
has the right to grant Liens on such Inventory; (iv) such Inventory arose
or was acquired in the ordinary course of the business of the Loan Parties
and does not represent damaged, obsolete or unsalable goods; (v) no Account
Receivable or document of title has been created or issued with respect to
such Inventory; (vi) such Inventory is located in one of the locations in
one of the continental United States listed on Schedule 5.01(ff) or such
other locations in the continental United States as the Lender may approve
in writing from time to time; and (vii) such Inventory is and at all times
shall continue to be reasonably acceptable to the Lender.
"Employee Plan" means an employee benefit plan (other than a
Multiemployer Plan) covered by Title IV of ERISA and maintained (or was
maintained at any time during the six (6) calendar years preceding the date
of any borrowing hereunder) for employees of the Borrower or any of its
ERISA Affiliates.
"Environmental Actions" means any complaint, summons, citation,
notice, directive, order, claim, litigation, investigation, judicial or
administrative proceeding, judgment, letter or other written communication
from any Governmental Authority involving violations of Environmental Laws
or Releases of Hazardous Materials (i) from any assets, properties or
businesses of the Borrower or any of its Subsidiaries or any predecessor in
interest; or (ii) onto any facilities which received Hazardous Materials
generated by the Borrower or any of its Subsidiaries or any predecessor in
interest.
"Environmental Laws" means the Comprehensive Environmental
Response, Compensation and Liability Act (42 U.S.C. section 9601, et seq.),
the Hazardous Materials Transportation Act (49 U.S.C. section 1801, et
seq.), the Resource Conservation and Recovery Act (42 U.S.C. section 6901,
et seq.), the Federal Clean Water Act (33 U.S.C. section 1251 et seq.), the
Clean Air Act (42 U.S.C. section 7401 et seq.), the Toxic Substances
Control Act (15 U.S.C. section 2601 et seq.) and the Occupational Safety
and Health Act (29 U.S.C. section 651 et seq.), as such laws may be amended
or otherwise modified from time to time, and any other present or future
federal, state, local or foreign statute, ordinance, rule, regulation,
order, judgment, decree, permit, license or other binding determination of
any Governmental Authority imposing liability or establishing standards of
conduct for protection of the environment.
"Environmental Liabilities and Costs" means all liabilities,
monetary obligations, Remedial Actions, losses, damages, punitive damages,
consequential damages, treble damages, costs and expenses (including all
reasonable fees, disbursements and expenses of counsel, experts and
consultants and costs of investigations and feasibility studies), fines,
penalties, sanctions and interest incurred as a result of any claim or
demand by any Governmental Authority or any third party, and which relate
to any environmental condition or a Release of Hazardous Materials from or
onto (i) any property presently or formerly owned by the Borrower or any of
its Subsidiaries or (ii) any facility which received Hazardous Materials
generated by the Borrower or any of its Subsidiaries.
"Environmental Lien" means any Lien in favor of any Governmental
Authority for Environmental Liabilities and Costs.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended, and any successor statute of similar import, and
regulations thereunder, in each case as in effect from time to time.
References to sections of ERISA shall be construed also to refer to any
successor sections.
"ERISA Affiliate" means, with respect to any Person, any trade or
business (whether or not incorporated) which is a member of a group of
which such Person is a member and which would be deemed to be a "controlled
group" within the meaning of Sections 414(b), (c), (m) and (o) of the Code.
"Event of Default" means any of the events set forth in Section
8.01.
"Existing Credit Agreement" means the Loan and Security Agreement
dated as of June 29, 1994, as amended, supplemented or otherwise modified
prior to the date hereof, among the Borrower and the Existing Lender.
"Existing Lender" means, collectively, Bank of America National
Trust and Savings Bank, as agent and a lender, and the other lenders
parties to the Existing Credit Agreement.
"Field Examination Fee" has the meaning specified therefor in
Section 2.06(d).
"Final Maturity Date" means the third anniversary of the
Effective Date, or such earlier date, on which any Loan shall become due
and payable, in whole or in part, in accordance with the terms of this
Agreement and the other Loan Documents.
"Financial Statements" means (i) the audited consolidated balance
sheet of the Borrower and its Subsidiaries for the Fiscal Year ended June
30, 1998 and the related consolidated statement of operations,
shareholders' equity and cash flows for the Fiscal Year then ended and
(ii) the unaudited consolidated balance sheet of the Borrower and its
Subsidiaries for the quarter ended December 31, 1998 and the related
consolidated statement of operations, shareholder's equity and cash flows
for the quarter then ended.
"Fiscal Year" means the fiscal year of the Borrower and its
Subsidiaries ending on June 30 of each year.
"Fixed Charge Coverage Ratio" means, for any period, the ratio of
(i) Consolidated EBITDA of the Borrower and its Subsidiaries for such
period, to (ii) the sum of (A) all principal of Indebtedness of the
Borrower and its Subsidiaries scheduled to be paid or prepaid during such
period (not including prepayments of the Revolving Loans unless such
prepayments are accompanied by a reduction of the Revolving Credit
Commitment), plus (B) Consolidated Net Interest Expense of the Borrower and
its Subsidiaries for such period, plus (C) income taxes paid or payable by
the Borrower and its Subsidiaries during such period, plus (D) cash
dividends or distributions paid by the Borrower or any of its Subsidiaries
(other than dividends or distributions paid to the Borrower ) during such
period, plus (E) Capital Expenditures made by the Borrower and its
Subsidiaries during such period.
"Funding Fee" has the meaning specified therefor in
Section 2.06(a).
"GAAP" means generally accepted accounting principles in effect
from time to time in the United States, applied on a consistent basis,
provided that for the purpose of Section 6.03 hereof and the definitions
used therein, "GAAP" shall mean generally accepted accounting principles in
effect on the date hereof and consistent with those used in the preparation
of the Financial Statements, provided further that if there occurs after
the date of this Agreement any change in GAAP that affects in any respect
the calculation of any covenant contained in Section 6.03 hereof, the
Lender and the Borrower shall negotiate in good faith amendments to the
provisions of this Agreement that relate to the calculation of such
covenant with the intent of having the respective positions of the Lender
and the Borrower after such change in GAAP conform as nearly as possible to
their respective positions as of the date of this Agreement and, until any
such amendments have been agreed upon, the covenants in Section 6.03 hereof
shall be calculated as if no such change in GAAP has occurred.
"Governmental Authority" means any nation or government, any
Federal, state, city, town, municipality, county, local or other political
subdivision thereof or thereto and any department, commission, board,
bureau, instrumentality, agency, court or other entity exercising
executive, legislative, judicial, taxing, regulatory or administrative
powers or functions of or pertaining to government.
"Guarantors" means, collectively, the Restricted Guarantors and
the Unrestricted Guarantors.
"Hazardous Materials" means (a) any element, compound or chemical
that is defined, listed or otherwise classified as a contaminant,
pollutant, toxic pollutant, toxic or hazardous substances, extremely
hazardous substance or chemical, hazardous waste, special waste, or solid
waste under Environmental Laws; (b) petroleum and its refined products;
(c) polychlorinated biphenyls; (d) any substance exhibiting a hazardous
waste characteristic, including but not limited to, corrosivity,
ignitability, toxicity or reactivity as well as any radioactive or
explosive materials; and (e) asbestos-containing materials.
"Hedging Agreement" means any interest rate, foreign currency,
commodity or equity swap, collar, cap, floor or forward rate agreement, or
other agreement or arrangement designed to protect against fluctuations in
interest rates or currency, commodity or equity values (including, without
limitation, any option with respect to any of the foregoing and any
combination of the foregoing agreements or arrangements), and any
confirmation executed in connection with any such agreement or arrangement.
"Indebtedness" means, without duplication, with respect to any
Person, (i) all indebtedness of such Person for borrowed money; (ii) all
obligations of such Person for the deferred purchase price of property or
services (other than trade payables or other account payables incurred in
the ordinary course of such Person's business and not past due for more
than 90 days after the date such payable was created); (iii) all
obligations of such Person evidenced by bonds, debentures, notes or other
similar instruments or upon which interest payments are customarily made;
(iv) all obligations and liabilities of such Person created or arising
under any conditional sales or other title retention agreement with respect
to property used and/or acquired by such Person, even though the rights and
remedies of the lessor, seller and/or lender thereunder are limited to
repossession or sale of such property; (v) all Capitalized Lease
Obligations of such Person; (vi) all obligations and liabilities,
contingent or otherwise, of such Person, in respect of letters of credit,
acceptances and similar facilities; (vii) all obligations and liabilities,
calculated on a basis satisfactory to the Lender and in accordance with
accepted practice, of such Person under Hedging Agreements; (viii) all
Contingent Obligations; (ix) liabilities incurred under Title IV of ERISA
with respect to any plan (other than a Multiemployer Plan) covered by Title
IV of ERISA and maintained for employees of such Person or any of its ERISA
Affiliates; (x) withdrawal liability incurred under ERISA by such Person or
any of its ERISA Affiliates to any Multiemployer Plan; (xi) all other items
which, in accordance with GAAP, would be included as liabilities on the
liability side of the balance sheet of such Person; and (xii) all
obligations referred to in clauses (i) through (xi) of this definition of
another Person secured by (or for which the holder of such Indebtedness has
an existing right, contingent or otherwise, to be secured by) a Lien upon
property owned by such Person, even though such Person has not assumed or
become liable for the payment of such Indebtedness. The Indebtedness of
any Person shall include the Indebtedness of any partnership of or joint
venture in which such Person is a general partner or a joint venturer to
the extent such Person is liable for such Indebtedness, whether by contract
or applicable law.
"Indemnified Matters" has the meaning specified therefor in
Section 11.15.
"Indemnitees" has the meaning specified therefor in Section
11.15.
"Indentures" means, collectively, the Senior Note Indenture and
the Subordinated Note Indenture.
"Indenture Notes" means, collectively, the Senior Notes and the
Subordinated Notes.
"Inventory" means all goods and merchandise of the Loan Parties,
including, without limitation, all raw materials, work-in-process, piece
goods, trim and finished goods, whether now owned or hereafter acquired,
and all such other property the sale or other disposition of which would
give rise to an Account Receivable or cash.
"Lease" means any lease of real property to which the Borrower or
any of its Subsidiaries is a party as lessor or lessee.
"Lender" has the meaning specified therefor in the preamble
hereto.
"Lender Account" means the bank account specified on Schedule
1.01(A) or such other account at a bank designated by the Lender from time
to time as the account into which the Borrower shall make all payments to
the Lender under this Agreement and the other Loan Documents.
"Lender's Office" means the Lender's office located at 000 Xxxx
Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, or at such other office or
offices of the Lender as may be designated in writing from time to time by
the Lender to the Borrower.
"Liabilities" has the meaning specified therefor in Section 2.07.
"Lien" means any mortgage, deed of trust, pledge, lien (statutory
or otherwise), security interest, charge or other encumbrance or security
or preferential arrangement of any nature, including, without limitation,
any conditional sale or title retention arrangement, any Capitalized Lease
and any assignment, deposit arrangement or financing lease intended as, or
having the effect of, security.
"Loan" means any of the Revolving Loans.
"Loan Account" means an account maintained hereunder by the
Lender on its books of account, at the Lender's office and with respect to
the Borrower, in which the Borrower will be charged with all Loans made to,
and all other Obligations incurred by, the Borrower.
"Loan Documents" means this Agreement, the Note, the Security
Agreements, the Pledge Agreements, the Subordination Agreements, the Cash
Concentration Agreement, the Depository Account Agreements, each notice
letter delivered to a Depository Bank or other financial institution
pursuant to Section 6.01(p), the Contribution Agreement and all other
agreements, instruments, and other documents executed and delivered
pursuant hereto or thereto or otherwise evidencing or securing any Loan or
other Obligation.
"Loan Parties" has the meaning specified therefor in the
recitals hereto.
"Loan Servicing Fee" has the meaning specified therefor in
Section 2.06(b).
"Material Adverse Effect" means a material adverse effect on any
of (i) the operations, business, assets, properties or condition (financial
or otherwise) of any Loan Party, (ii) the ability of any Loan Party to
perform any of its material obligations under any Loan Document to which it
is a party, (iii) the legality, validity or enforceability of this
Agreement or any other Loan Document, (iv) the rights and remedies of the
Lender under any Loan Document, or (v) the validity, perfection or priority
of a Lien in favor of the Lender on any of the Collateral.
"Material Contract" means, with respect to any Person, each
contract or agreement to which such Person or its Subsidiary is a party
involving aggregate consideration payable to or by such Person or such
Subsidiary of $100,000 or more (other than purchase orders in the ordinary
course of the business of such Person and other than contracts that by
their terms may be terminated by such Person or Subsidiary in the ordinary
course of its business upon less than 60 days' notice without penalty or
premium) or otherwise material to the business, operations, condition
(financial or otherwise), performance, prospects or properties of such
Person or such Subsidiary.
"Maximum Revolving Amount" means $15,000,000.
"Moody's" means Xxxxx'x Investors Service, Inc. and any successor
thereto.
"Multiemployer Plan" means a "multiemployer plan" as defined in
Section 4001(a)(3) of ERISA for which the Borrower or any ERISA Affiliate
has contributed to, or has been obligated to contribute to, at any time
during the preceding six (6) years.
"Net Amount of Eligible Accounts Receivable" means the aggregate
unpaid invoice amount of Eligible Accounts Receivable less, without
duplication, sales, excise or similar taxes, returns, discounts,
chargebacks, claims, advance payments, credits and allowances of any nature
at any time issued, owing, granted, outstanding, available or claimed.
"Net Cash Proceeds" means, (i) with respect to any Disposition by
any Loan Party, the amount of cash received (directly or indirectly) from
time to time (whether as initial consideration or through the payment of
deferred consideration) by or on behalf of such Person, in connection
therewith after deducting therefrom only (A) the principal amount of any
Indebtedness secured by any Lien permitted by Section 6.02(a) on any asset
(other than Indebtedness assumed by the purchaser of such asset) which is
required to be, and is, repaid in connection with such Disposition (other
than Indebtedness under this Agreement), (B) reasonable expenses related
thereto reasonably incurred by the Borrower or such Affiliate in connection
therewith, (C) transfer taxes paid by the Borrower or such Affiliate in
connection therewith and (D) net income taxes to be paid in connection with
such Disposition (after taking into account any tax credits or deductions
and any tax sharing arrangements and (ii) with respect to the issuance or
incurrence of any Indebtedness by any Loan Party, or the sale or issuance
by any Loan Party of any shares of its Capital Stock, the aggregate amount
of cash received (directly or indirectly) from time to time (whether as
initial consideration or through the payment of deferred consideration) by
or on behalf of such Person in connection therewith after deducting
therefrom only reasonable brokerage commissions, underwriting fees and
discounts, legal fees and similar fees and commissions.
"Note" means the Revolving Credit Note.
"Notice of Borrowing" has the meaning specified therefor in
Section 2.02.
"Obligations" means (i) the obligations of the Borrower to pay,
as and when due and payable (by scheduled maturity, required prepayment,
acceleration, demand or otherwise), all amounts from time to time owing by
it in respect of the Loan Documents, whether for principal, interest
(including, without limitation, all interest that accrues after the
commencement of any case, proceeding or other action relating to
bankruptcy, insolvency or reorganization of the Borrower), fees,
indemnification payments, expense reimbursements or otherwise, and (ii) the
obligations of the Borrower and any other Loan Party to perform or observe
all of its obligations from time to time existing under the Loan Documents.
"Operating Lease Obligations" means all obligations for the
payment of rent for any real or personal property under leases or
agreements to lease, other than Capitalized Lease Obligations.
"Overadvance Amount" means an amount equal to $3,000,000.
"Participant Register" has the meaning specified therefor in
Section 11.07(b)(ii).
"PBGC" means the Pension Benefit Guaranty Corporation or any
successor thereto.
"Permitted Holders" means Xxxx X. Xxxxxxx, Xx., members of his
immediate family and trusts established for his or their benefit.
"Permitted Indebtedness" means:
(a) any Indebtedness owing to the Lender;
(b) any other Indebtedness listed on Schedule 6.02(b), and any
refinancings, renewals or extensions of such Indebtedness so long as the
amount of such Indebtedness is not increased, the obligations for the
payment of money of the Borrower or any Subsidiary with respect thereto are
not increased, such refinancings, renewals or extensions are made on terms
no less favorable to the Borrower and its Subsidiaries than the existing
terms applicable to such Indebtedness and there is no change in the
identity of the obligors with respect to such Indebtedness;
(c) Indebtedness not existing on the Effective Date evidenced by
Capitalized Lease Obligations entered into in order to finance Capital
Expenditures made by the Borrower or any of its Subsidiaries in accordance
with the provisions of Section 6.02(g), which Indebtedness, when aggregated
with the principal amount of all Indebtedness incurred under this clause
(c) and clause (d) of this definition, does not exceed $250,000 at any time
outstanding;
(d) Indebtedness permitted by clause (e) of the definition of
"Permitted Lien";
(e) Subordinated Indebtedness not existing on the Effective Date
in an aggregate principal amount outstanding at any time not exceeding
$1,000,000;
(f) Indebtedness in respect of loans from the Borrower to a Loan
Party, the right to receive payment of which has been subordinated to the
Obligations;
(g) Indebtedness constituting reimbursement obligations in
connection with stand-by letters of credit obtained by the Borrower in the
ordinary course of business;
(h) additional Indebtedness of the Borrower not expressly
permitted by clauses (a) through (g) above, provided that the aggregate
principal amount of the Indebtedness outstanding under this clause (h)
shall not at any time exceed $500,000;
(i) Hedging Agreements, to the extent constituting Permitted
Investments pursuant to clause (xii)(B) of the definition of "Permitted
Investment";
(j) Indebtedness incurred in connection with the financing of
insurance premiums in the ordinary course of business and consistent with
past practice; and
(k) such other Indebtedness as the Lender may consent to in
writing from time to time (in its sole and absolute discretion).
"Permitted Investments" means (i) marketable direct obligations
issued or unconditionally guaranteed by the United States Government or
issued by any agency thereof and backed by the full faith and credit of the
United States, in each case maturing within six months from the date of
acquisition thereof; (ii) commercial paper, maturing not more than 270 days
after the date of issue rated P-1 by Moody's or A-1 by Standard & Poor's;
(iii) certificates of deposit maturing not more than 270 days after the
date of issue, issued by commercial banking institutions and money market
or demand deposit accounts maintained at commercial banking institutions,
each of which is a member of the Federal Reserve System and has a combined
capital and surplus and undivided profits of not less than $95,000,000;
(iv) repurchase agreements having maturities of not more than 90 days from
the date of acquisition which are entered into with major money center
banks included in the commercial banking institutions described in clause
(iii) above and which are secured by readily marketable direct obligations
of the Government of the United States of America or any agency thereof;
(v) money market accounts maintained with mutual funds having assets in
excess of $2,500,000,000; (vi) tax exempt securities rated A or better by
Moody's or A+ or better by Standard & Poor's; (vii) extensions of credit in
the nature of Accounts Receivable or notes receivable arising from the sale
of goods and services in the ordinary course of business; (viii) shares of
stock, obligations or other securities received in settlement of claims
arising in the ordinary course of business; (ix) other investments
outstanding on the date hereof and listed on Schedule 6.02(e); (x) other
investments not in excess of $50,000 in the aggregate for the Borrower and
its Subsidiaries; (xi) investments made in the form of loans by the
Borrower to the other Loan Parties, the right to payment of which has been
subordinated to the Obligations; (xii) the purchase of "strips" or futures
contracts for the purchase of propane gas, to the extent (A) the dollar
amount of each such "strip" contract is matched against prepaid orders for
propane gas received by the Borrower or its Subsidiaries or (B) such strips
are used to hedge against fluctuations in the price of propane gas and not
for speculative purposes, provided that the aggregate monetary obligations
of the Borrower and its Subsidiaries with respect to the strips described
in this subclause (xii)(B) do not exceed $1,500,000 at any time
outstanding, and (xiii) such other Investments as the Lender may consent to
in writing from time to time (in its sole and absolute discretion).
"Permitted Liens" means:
(a) Liens securing the Obligations;
(b) Liens for taxes, assessments and governmental charges the
payment of which is not required under Section 6.01(c);
(c) Liens imposed by law, such as carriers', warehousemen's,
mechanics', materialmen's and other similar Liens arising in the ordinary
course of business and securing obligations (other than Indebtedness for
borrowed money) that are not overdue by more than 30 days or are being
contested in good faith and by appropriate proceedings promptly initiated
and diligently conducted, and a reserve or other appropriate provision, if
any, as shall be required by GAAP shall have been made therefor;
(d) Liens described on Schedule 6.02(a), and any refinancings,
renewals or extensions of such Liens so long as the amount of Indebtedness
secured thereby is not increased, the obligations for the payment of money
of the Borrower or any Subsidiary with respect thereto are not increased
and such refinancings, renewals or extensions are made on terms no less
favorable to the Borrower and its Subsidiaries than the existing terms
applicable to such Liens;
(e) (i) purchase money Liens on equipment acquired or held by
the Borrower or any of its Subsidiaries in the ordinary course of its
business to secure the purchase price of such equipment or Indebtedness
incurred solely for the purpose of financing the acquisition of such
equipment or (ii) Liens existing on such equipment at the time of its
acquisition; provided, however, that (A) no such Lien shall extend to or
cover any other property of the Borrower or any of its Subsidiaries, (B)
the principal amount of the Indebtedness secured by any such Lien shall not
exceed the lesser of 80% of the fair market value or the cost of the
property so held or acquired and (C) the aggregate principal amount of
Indebtedness secured by any or all such Liens shall not exceed at any one
time outstanding $50,000;
(f) deposits and pledges securing obligations (i) incurred in
respect of workers' compensation, unemployment insurance or other forms of
governmental insurance or benefits, (ii) the performance of bids, tenders,
leases, contracts (other than for the payment of money) and statutory
obligations or (iii) obligations on surety or appeal bonds, but only to the
extent such deposits or pledges are incurred or otherwise arise in the
ordinary course of business and secure obligations not past due;
(g) easements, zoning restrictions and similar encumbrances on
real property and minor irregularities in the title thereto that do not (i)
secure obligations for the payment of money or (ii) materially impair the
value of such property or its use by the Borrower or any of its
Subsidiaries in the normal conduct of such Person's business;
(h) pledges of cash collateral securing the Indebtedness
described in clause (g) of the definition of Permitted Indebtedness;
(i) Liens securing Indebtedness permitted under clause (j) of
the definition of "Permitted Indebtedness"; and
(j) such other Liens as the Lender may consent to in writing
from time to time (in its sole and absolute discretion).
"Person" means an individual, corporation, limited liability
company, partnership, association, joint-stock company, trust,
unincorporated organization, joint venture or Governmental Authority.
"PIK Rate" means the rate of interest equal to 2% per annum,
provided that, if at any time during a month any portion of the Overadvance
Amount is necessary to maintain the outstanding Obligations in compliance
with the Borrowing Base, the PIK Rate for such entire month shall be a rate
of interest equal to 2.5% per annum.
"Pledge Agreement" means each Pledge and Security Agreement,
dated as of the date hereof, made by a Loan Party, in favor of the Lender
in respect of the outstanding Capital Stock of a direct Subsidiary of such
Loan Party, substantially in the form of Exhibit F.
"Post-Default Rate" means a rate of interest per annum equal to
the rate of interest otherwise in effect from time to time pursuant to the
terms of this Agreement plus 2%, or, if a rate of interest is not otherwise
in effect, the Reference Rate plus 6.5%.
"Rating Agencies" has the meaning specified therefor in
Section 2.07.
"Reference Bank" means The Chase Manhattan Bank, its successors
or any other commercial bank designated by the Lender to the Borrower from
time to time.
"Reference Rate" means the higher of (i) 7.75% and (ii) the rate
of interest publicly announced by the Reference Bank in New York, New York
from time to time as its prime rate or base rate. The prime rate or base
rate is determined from time to time by the Reference Bank as a means of
pricing some loans to its borrowers and neither is tied to any external
rate of interest or index nor necessarily reflects the lowest rate of
interest actually charged by the Reference Bank to any particular class or
category of customers. Each change in the Reference Rate shall be
effective from and including the date such change is publicly announced as
being effective.
"Register" has the meaning specified therefor in Section
11.07(b)(i).
"Registered Loan" has the meaning specified therefor in Section
2.03(c).
"Registered Note" has the meaning specified therefor in Section
2.03(c).
"Regulation U" and "Regulation X" mean, respectively, Regulations
U and X of the Board or any successor, as the same may be amended or
supplemented from time to time.
"Release" means any spilling, leaking, pumping, pouring,
emitting, emptying, discharging, injecting, escaping, leaching, seeping,
migrating, dumping or disposing of any Hazardous Material (including the
abandonment or discarding of barrels, containers and other closed
receptacles containing any Hazardous Material) into the outdoor environment
and, to the extent reportable under Environmental Law, into the indoor
environment, including ambient air, soil, surface or ground water.
"Remedial Action" means all actions taken to (i) clean up,
remove, remediate, contain, treat, monitor, assess, evaluate or in any
other way address Hazardous Materials in the indoor or outdoor environment
to the extent required by Environmental Law or a Governmental Authority;
(ii) prevent or minimize a Release or threatened Release of Hazardous
Materials so they do not migrate or endanger or threaten to endanger public
health or welfare or the indoor or outdoor environment; (iii) perform pre-
remedial studies and investigations and post-remedial operation and
maintenance activities; or (iv) any other actions consistent with the term
"Remedial Action" as defined in 42 U.S.C. 9601.
"Reportable Event" means an event described in Section 4043 of
ERISA (other than an event not subject to the provision for 30-day notice
to the PBGC under the regulations promulgated under such Section).
"Restricted Guarantor" means each Subsidiary of the Borrower that
is a Restricted Subsidiary, as such term is defined under the Senior Note
Indenture, and that is a party to this Agreement or required to execute a
Joinder Agreement pursuant to Section 6.01(b).
"Revolving Credit Commitment" means the commitment of the Lender
to make Revolving Loans to the Borrower in an aggregate principal amount at
any time outstanding not to exceed $15,000,000, as such amount may be
terminated or reduced from time to time in accordance with the terms of
this Agreement.
"Revolving Credit Note" means a promissory note of the Borrower,
substantially in the form of Exhibit A, made payable to the order of the
Lender, evidencing the Indebtedness resulting from the making by the Lender
to the Borrower of Revolving Loans and delivered to the Lender pursuant to
Article IV, as such promissory note may be amended, supplemented, restated,
modified or extended from time to time, and any promissory note or notes
issued in exchange or replacement therefor. The term "Revolving Credit
Note" shall include any Registered Note evidencing the Revolving Loans and
delivered pursuant to Section 2.03(c).
"Revolving Loan" means a loan made by the Lender to the Borrower
pursuant to Section 2.01.
"Revolving Loan Commitment Termination Date" means the Final
Maturity Date, or such earlier date on which the Revolving Credit
Commitment is terminated in full pursuant to Section 2.05 or 8.01.
"SEC" means the Securities and Exchange Commission or any other
similar or successor agency of the Federal government administering the
Securities Act.
"Securities Act" means the Securities Act of 1933, as amended, or
any similar Federal statute, and the rules and regulations of the SEC
thereunder, all as the same shall be in effect at the time.
"Securitization" has the meaning specified therefor in Section
2.07.
"Securitization Party" has the meaning specified therefor in
Section 2.07.
"Security Agreements" means, collectively, the Security Agreement
made by the Borrower in favor of the Lender, substantially in the form of
Exhibit C, the Security Agreement made by each Unrestricted Guarantor in
favor of the Lender, substantially in the form of Exhibit D, and the
Security Agreement made by each Restricted Guarantor in favor of the
Lender, substantially in the form of Exhibit E.
"Senior Notes" means the promissory notes issued by the Borrower
pursuant to the Senior Note Indenture.
"Senior Note Indenture" means the Indenture, dated as of June 29,
1994, as amended prior to the date of this Agreement and as further
supplemented or amended from time to time after the date of this Agreement
in accordance with Section 6.02(1), with respect to Borrower's $127,200,000
12-7/8% Senior Secured Notes due 2004.
"Solvent" means, with respect to any Person on a particular date,
that on such date (i) the fair value of the property and assets of such
Person is not less than the total amount of its liabilities of such Person,
(ii) the present fair salable value of the property and assets of such
Person is not less than the amount that will be required to pay the
probable liability of such Person on its existing debts as they become
absolute and matured, (iii) such Person is able to realize upon its assets
and pay its debts and other liabilities, contingent obligations and other
commitments as they mature in the normal course of business, (iv) such
Person does not intend to, and does not believe that it will, incur debts
or liabilities beyond such Person's ability to pay as such debts and
liabilities mature, and (v) such Person is not engaged in business or a
transaction, and is not about to engage in business or a transaction, for
which such Person's property would constitute unreasonably small capital.
"Standard & Poor's" means Standard & Poor's Ratings Services, a
division of The XxXxxx-Xxxx Companies, Inc. and any successor thereto.
"Subject Disposition" has the meaning specified therefore in
Section 2.05(c)(ii).
"Subordination Agreements" means the Subordination Agreements,
each substantially in the form of Exhibit K, made by the Persons described
in Schedule 1.01(B) in favor of the Lender.
"Subordinated Indebtedness" means Indebtedness of the Borrower
the terms of which are satisfactory to the Lender and which has been
expressly subordinated in right of payment to all Indebtedness of the
Borrower under the Loan Documents pursuant to the Subordination Agreements,
on terms and conditions (including, without limitation, payment terms,
interest rates, covenants, remedies, defaults and other material terms)
satisfactory to the Lender.
"Subordinated Notes" means the promissory notes issued by the
Borrower pursuant to the Subordinated Note Indenture.
"Subordinated Note Indenture" means the Indenture, dated as of
June 7, 1983, as amended prior to the date of this Agreement and as further
supplemented or amended from time to time after the date of this Agreement
in accordance with Section 6.02(1), with respect to the Borrower's 9%
Subordinated Notes due 2007.
"Subsidiary" means, with respect to any Person at any date, any
corporation, limited or general partnership, limited liability company,
trust, association or other entity (i) the accounts of which would be
consolidated with those of such Person in such Person's consolidated
financial statements if such financial statements were prepared in
accordance with GAAP or (ii) of which more than 50% of (A) the outstanding
Capital Stock having (in the absence of contingencies) ordinary voting
power to elect a majority of the board of directors of such corporation,
(B) the interest in the capital or profits of such partnership or limited
liability company or (C) the beneficial interest in such trust or estate
is, at the time of determination, owned or controlled directly or
indirectly through one or more intermediaries, by such Person.
"Termination Event" means (i) a Reportable Event with respect to
any Employee Plan, (ii) any event that causes the Borrower or any of its
ERISA Affiliates to incur liability under Section 409, 502(i), 502(l), 515,
4062, 4063, 4064, 4069, 4201, 4204 or 4212 of ERISA or Section 4971 or 4975
of the Code, (iii) the filing of a notice of intent to terminate an
Employee Plan or the treatment of an Employee Plan amendment as a
termination under Section 4041 of ERISA, (iv) the institution of
proceedings by the PBGC to terminate an Employee Plan, or (v) any other
event or condition which might constitute grounds under Section 4042 of
ERISA for the termination of, or the appointment of a trustee to
administer, any Employee Plan.
"Unrestricted Guarantor" means each Subsidiary of the Borrower
that is an Unrestricted Subsidiary, as such term is defined under the
Senior Note Indenture, and that is a party to this Agreement or required to
execute a Joinder Agreement pursuant to Section 6.01(b).
"WARN" has the meaning specified therefor in Section 5.01(j).
SECTION 1.02. Terms Generally. The definitions of terms herein
shall apply equally to the singular and plural forms of the terms defined.
Whenever the context may require, any pronoun shall include the
corresponding masculine, feminine and neuter forms. The words "include,"
"includes" and "including" shall be deemed to be followed by the phrase
"without limitation." The word "will" shall be construed to have the same
meaning and effect as the word "shall." Unless the context requires
otherwise, (a) any definition of or reference to any agreement, instrument
or other document herein shall be construed as referring to such agreement,
instrument or other document as from time to time amended, supplemented or
otherwise modified (subject to any restrictions on such amendments,
supplements or modifications set forth herein), (b) any reference herein to
any Person shall be construed to include such Person's successors and
assigns, (c) the words "herein," "hereof" and "hereunder," and words of
similar import, shall be construed to refer to this Agreement in its
entirety and not to any particular provision hereof, (d) all references
herein to Articles, Sections, Exhibits and Schedules shall be construed to
refer to Articles and Sections of, and Exhibits and Schedules to, this
Agreement and (e) the words "asset" and "property" shall be construed to
have the same meaning and effect and shall mean any right or interest in or
to property or assets of any kind whatsoever, whether real, personal or
mixed and whether tangible or intangible, including cash, securities,
accounts and contract rights. References in this Agreement to
"determination" by the Lender include good faith estimates by the Lender
(in the case of quantitative determinations) and good faith beliefs by the
Lender (in the case of qualitative determinations).
SECTION 1.03. Accounting and Other Terms. Unless otherwise
expressly provided herein, each accounting term used herein shall have the
meaning given it under GAAP applied on a basis consistent with those used
in preparing the Financial Statements. All terms used in this Agreement
which are defined in Article 8 or Article 9 of the Uniform Commercial Code
in effect in the State of New York on the date hereof and which are not
otherwise defined herein shall have the same meanings herein as set forth
therein.
SECTION 1.04. Time References. Unless otherwise indicated herein,
all references to time of day refer to Eastern standard time or Eastern
daylight saving time, as in effect in New York City on such day. For
purposes of the computation of a period of time from a specified date to a
later specified date, the word "from" means "from and including" and the
words "to" and "until" each means "to but excluding"; provided, however,
that with respect to a computation of fees or interest payable to the
Lender, such period shall in any event consist of at least one full day.
ARTICLE II
THE LOANS
SECTION 2.01 Commitment. The Lender agrees, on the terms and
conditions hereinafter set forth, to make loans (the "Revolving Loans") to
the Borrower from time to time not more frequently than twice each week on
any Business Day during the period commencing on the date hereof and ending
on, but excluding, the Revolving Loan Commitment Termination Date, in an
aggregate principal amount at any time outstanding not to exceed the lowest
of (i) the amount of the Revolving Credit Commitment, (ii) the amount of
the Borrowing Base then in effect, (iii) the most recent trailing twelve
(12) month Consolidated EBITDA of the Borrower and its Subsidiaries, which
shall be updated on a monthly basis, and (iv) the maximum principal amount
of Indebtedness permitted to be incurred by the Borrower and its
Subsidiaries and remain outstanding at any one time under the Senior Note
Indenture. Within the limit of the amount of the Revolving Credit
Commitment the Borrower may borrow, prepay and reborrow Revolving Loans
pursuant to this Article II.
SECTION 2.02 Making the Loans. The Borrower shall give the
Lender prior telephone notice (immediately confirmed in writing, in
substantially the form of Exhibit G hereto (a "Notice of Borrowing")), not
later than 11:00 a.m. (New York City time) five Business Days prior to the
date of the proposed Loan. Such Notice of Borrowing shall be irrevocable
and shall specify (i) the principal amount of the proposed Loan, (ii) the
use of the proceeds of such proposed Loan and (iii) the proposed borrowing
date, which must be a Business Day. The Lender may act without liability
upon the basis of written, telecopied or telephonic notice believed by the
Lender in good faith to be from the Borrower (or from any Authorized
Officer thereof designated in writing purportedly from the Borrower to the
Lender). The Borrower hereby waives the right to dispute the Lender's
record of the terms of any such telephonic Notice of Borrowing. Each
Notice of Borrowing shall be irrevocable and binding on the Borrower. Each
Revolving Loan shall be made in a minimum amount of $250,000 and shall be
in an integral multiple of $50,000. The Lender will make the proceeds of
such Loan available to the Borrower on the day of the proposed Loan by
causing an amount, in immediately available funds, to be deposited in an
account designated by the Borrower to the Lender at a commercial bank
previously approved by the Lender.
SECTION 2.03 Note; Repayment of Loans. (a) All Revolving Loans
made by the Lender to the Borrower shall be evidenced by a single Revolving
Credit Note, duly executed on behalf of the Borrower, dated the Effective
Date, and delivered to and made payable to the order of the Lender in a
principal amount equal to the amount of the Revolving Credit Commitment.
(b) The outstanding principal of each Loan shall be due and
payable on the Final Maturity Date.
(c) The Borrower agrees to record each Loan on the Register
referred to in Section 11.07(b)(i). Each Loan recorded on the Register
(the "Registered Loan") may not be evidenced by promissory notes other than
the Revolving Credit Note, which is a Registered Note (as defined below).
Upon the registration of any Loan, any promissory note (other than a
Registered Note) evidencing the same shall be null and void and shall be
returned to the Borrower. The Borrower agrees, at the request of the
Lender, to execute and deliver to Lender a promissory note in registered
form to evidence such Registered Loan (i.e. containing the registered note
language set forth in Exhibit A) and registered as provided in Section
11.07(b)(i) (a "Registered Note"), dated the date hereof, payable to the
Lender and otherwise duly completed. Once recorded on the Register, the
Loan or Loans evidenced by such Note may not be removed from the Register
so long as it remains outstanding, and a Registered Note may not be
exchanged for a promissory note that is not a Registered Note.
SECTION 2.04 Interest.
(a) Loans. Each Revolving Loan shall bear interest on the
principal amount thereof from time to time outstanding, from the date of
such Loan until such principal amount becomes due or is paid, at a rate per
annum equal to the Reference Rate plus four percent (4%), provided that, if
at any time during a month any portion of the Overadvance Amount is
necessary to maintain the outstanding Obligations in compliance with the
Borrowing Base, the interest rate per annum for such entire month shall be
the Reference Rate plus four and one-half percent (4.5%).
(b) Default Interest. To the extent permitted by law, upon
the occurrence and during the continuance of an Event of Default, the
principal of, and all accrued and unpaid interest on, all Loans, and all
fees, indemnities or any other Obligations of the Borrower under this
Agreement, the Note and other Loan Documents shall bear interest, from the
date such Event of Default occurred until such Event of Default is cured or
waived in writing in accordance herewith, at a rate per annum equal at all
times to the Post-Default Rate.
(c) Interest Payment. Interest on each Loan shall be
payable in cash monthly, in arrears, on the first day of each month,
commencing on the first day of the month following the month in which such
Loan is made and at maturity (whether upon demand, by acceleration or
otherwise); provided, however, that interest on a Loan that has accrued
during such month at the PIK Rate may be capitalized on such interest
payment date and added to the outstanding principal amount of such Loan
(and the interest otherwise payable in cash shall be reduced by the amount
of interest so capitalized), which capitalized interest shall be evidenced
by the Note. It is understood and agreed that the principal of the Note
representing capitalized interest on a Loan shall bear interest in
accordance with this Section 2.04(c), as though such Indebtedness evidenced
by the Note constituted a Loan made by the Lender to the Borrower. The
Lender is hereby authorized to endorse on the grid attached to the Note the
amount of interest capitalized and evidenced by such Note, and any such
endorsement shall be conclusive in the absence of manifest error. Unless
the Lender receives prior written notice that the Borrower has elected to
pay in cash the entire amount of accrued and unpaid interest on any Loan,
the Lender may assume that interest on such Loan that has accrued during
such month at the PIK Rate shall be capitalized on the applicable interest
payment date. Interest at the Post-Default Rate shall be payable on
demand. The Borrower hereby authorizes the Lender to, and the Lender may,
from time to time, charge the Loan Account pursuant to Section 3.01 with
the amount of any interest payment due hereunder.
(d) General. All interest and fees payable under this
Agreement, under the Note or under any other Loan Document shall be
computed on the basis of a year of 360 days for the actual number of days,
including the first day but excluding the last day, elapsed.
SECTION 2.05 Reduction of Commitment; Prepayment of Loans.
(a) Reduction of Revolving Credit Commitment. (i)
Optional Revolving Credit Commitment Reduction. The Borrower may, without
premium or penalty, reduce the Revolving Credit Commitment to an amount
(which may be zero) not less than the sum of (i) the aggregate unpaid
principal amount of all Revolving Loans then outstanding, plus (ii) the
aggregate principal amount of all Revolving Loans not yet made as to which
a Notice of Borrowing has been given by the Borrower under Section 2.02.
Each such reduction shall be in a minimum amount of $250,000 and shall be
in an integral multiple of $50,000, shall be made by providing not less
than three Business Days' prior written notice to the Lender and shall be
irrevocable. Once reduced the Revolving Credit Commitment may not be
increased.
(b) Optional Prepayment. The Borrower may, prepay without
penalty or premium the principal of any Loan, in whole or in part.
(c) Mandatory Prepayment. (i) The Borrower will
immediately prepay the Revolving Loans at any time when the aggregate
principal amount of all Revolving Loans exceeds the lowest of (A) the
amount of the Revolving Credit Commitment, (B) the Borrowing Base, (C) the
most recent trailing twelve (12) month Consolidated EBITDA of the Borrower
and its Subsidiaries, and (D) the maximum principal amount of Indebtedness
permitted to be incurred by the Borrower and remain outstanding at any one
time under the Senior Note Indenture, to the full extent of any such
excess. On each day that the Borrower delivers to the Lender a Borrowing
Base Certificate or a Notice of Borrowing, and immediately before and after
giving effect to any Revolving Loan made hereunder, the Borrower shall
hereby be deemed to represent and warrant to the Lender that the lowest of
the above amounts calculated as of such day equals or exceeds the aggregate
principal amount of all Revolving Loans outstanding on such day.
(ii) Dispositions; Casualty Events. Immediately upon any Disposition
by the Borrower or any of its Subsidiaries pursuant to Section 6.02(c)(ii)
(other than subclause (A) of such Section) (each, a "Subject Disposition"),
which, when aggregated with all other Subject Dispositions since the
Effective Date, results in Net Cash Proceeds exceeding $50,000, the
Borrower shall prepay the outstanding principal of the Revolving Loans in
an amount equal to 100% of the Net Cash Proceeds in excess of $50,000
received by the Borrower or any of its Subsidiaries in connection with all
such Subject Dispositions. Upon the loss, destruction or taking by
condemnation of any Collateral, the Borrower shall prepay the outstanding
principal of the Revolving Loans in an amount equal to 100% of the proceeds
received by the Borrower and its Subsidiaries in connection therewith, net
of any reasonable expenses incurred in collecting such net proceeds.
(iii) Upon the issuance or incurrence by the Borrower or any of
its Subsidiaries of any Indebtedness except Permitted Indebtedness, or the
sale or issuance by the Borrower or any of its Subsidiaries of any shares
of its Capital Stock, the Borrower shall prepay the outstanding amount of
the Revolving Loans in an amount equal to 100% of the Net Cash Proceeds
received by the Borrower or any of its Subsidiaries in connection
therewith. The provisions of this subsection (iii) shall not be deemed to
be implied consent to any such issuance, incurrence or sale otherwise
prohibited by the terms and conditions hereof.
(d) Cumulative Prepayments. Except as otherwise expressly
provided in this Section 2.05, payments with respect to any subsection of
this Section 2.05 are in addition to payments made or required to be made
under any other subsection of this Section 2.05.
SECTION 2.06 Fees.
(a) Funding Fee. On or prior to the Effective Date and on
each anniversary thereof, the Borrower shall pay to the Lender a non-
refundable funding fee (the "Funding Fee") equal to $150,000.
(b) Loan Servicing Fee. From and after the Effective Date
and until the Final Maturity Date, the Borrower shall pay to the Lender a
non-refundable loan servicing fee (the "Loan Servicing Fee") equal to
$5,000 each month, payable monthly in advance on the first day of each such
month, and on the date the Loans shall be paid in full.
(c) Unused Line Fee. From and after the Effective Date and
until the Final Maturity Date, the Borrower shall pay to the Lender a non-
refundable unused line fee (the "Unused Line Fee") in an amount equal to
.50% per annum times the average daily unused amount of the Maximum
Revolving Amount for each month, payable monthly in arrears on the first
day of each month.
(d) Financial Examination, Documentation, and Appraisal
Fees. The Borrower shall pay to the Lender the following non-refundable
fees: (A) a field examination fee (the "Field Examination Fee") of $750
per day per examiner, plus reasonable out-of-pocket expenses, for each
financial analysis and examination (i.e., audits) of any Loan Party
performed by personnel employed by the Lender and (B) the actual charges
paid or incurred by the Lender if it elects to employ the services of one
or more third Persons to perform such financial analyses and examinations
(i.e., audits) of any Loan Party; provided, however, that, in the absence
of a continuing Event of Default, the Borrower shall not be obligated to
pay for such audits more frequently than on a quarterly basis.
SECTION 2.07 Securitization. The Borrower hereby acknowledges
that the Lender and any of its Affiliates may sell or securitize the Loans
(a "Securitization") through the pledge of such Loans as collateral
security for loans to the Lender or its Affiliates or through the sale of
the Loans or the issuance of direct or indirect interests in the Loans,
which loans to the Lender or its Affiliate or direct or indirect interests
will be rated by Xxxxx'x, Standard & Poor's or one or more other rating
agencies (the "Rating Agencies"). The Borrower shall cooperate with the
Lender and its Affiliates to effect the Securitization including, without
limitation, by (a) amending this Agreement and the other Loan Documents,
and executing such additional documents, as reasonably requested by the
Lender, any of the Rating Agencies, or any party providing credit support
or otherwise participating in the Securitization (collectively,
"Securitization Parties"), provided that (i) any such amendment or
additional documentation does not impose material additional costs on the
Borrower and (ii) any such amendment or additional documentation does not
materially adversely affect the rights, or materially increase the
obligations, of the Borrower under the Loan Documents or change or affect
in a manner adverse to the Borrower the financial terms of the Loans,
(b) providing such information as may be reasonably requested by the
Lender, any Rating Agency or other Securitization Party in connection with
the rating of the Loans or the Securitization, (c) providing in connection
with any rating of the Loans a certificate (i) agreeing to indemnify the
Lender and any of its Affiliates and other Securitization Parties for any
losses, claims, damages or liabilities (the "Liabilities") to which the
Lender, its Affiliates or such Securitization Parties may become subject
insofar as the Liabilities arise out of or are based upon (solely as
relates to the Borrower, the other Loan Parties, their Affiliates, their
assets, property or business or their obligations to the Lender), any
untrue statement or alleged untrue statement of any material fact contained
in any Loan Document or in any writing delivered by or on behalf of the
Borrower and its Affiliates to the Lender in connection with any Loan
Document, or arise out of or are based upon (solely as relates to the
Borrower, the other Loan Parties, their Affiliates, their assets, property
or business or their obligations to the Lender), the omission or alleged
omission to state therein a material fact required to be stated in such
sections or necessary in order to make the statements in such sections, in
light of the circumstances under which they were made, not misleading and
such indemnity shall survive any transfer by the Lender or its successors
or assigns of the Loans and (ii) agreeing to reimburse the Lender and any
of its Affiliates and other Securitization Parties for any legal or other
expenses reasonably incurred by such Persons in connection with defending
the Liabilities, (d) making such representations, warranties and covenants
with respect to the Borrower, the other Loan Parties and their Affiliates,
and their property, as may be reasonably requested by the Rating Agencies
or other Securitization Parties, but which do not materially adversely
affect the rights, increase the monetary obligations or materially increase
the other obligations, of the Borrower under the Loan Documents, and
(e) providing such information regarding the Borrower and its Subsidiaries
and Affiliates, the Collateral and other property, assets and business of
the Loan Parties (including appraisals and valuations) as may be reasonably
requested by the Rating Agencies and other Securitization Parties.
ARTICLE III
PAYMENTS AND OTHER COMPENSATION
SECTION 3.01 Payments; Computations and Statements. The
Borrower will make each payment under this Agreement, the Note and the
other Loan Documents (whether of principal, interest, fees, expense
reimbursements or otherwise) not later than 2:00 p.m. (New York City time)
on the day when due, in lawful money of the United States of America and in
immediately available funds, to the Lender at the Lender Account. All such
payments received by the Lender after 2:00 p.m. (New York City time) on any
Business Day will be credited to the Loan Account on the next succeeding
Business Day. All such payments shall be made by the Borrower without
defense, set-off or counterclaim to the Lender. The Borrower hereby
authorizes the Lender to, and the Lender may, from time to time charge the
Loan Account with all Obligations and any other amount due and payable
under any Loan Document to which the Borrower is a party, whether or not
any Event of Default or Default shall have occurred or be continuing or
whether any of the conditions precedent in Section 4.02 have been
satisfied. Any amount charged to the Loan Account shall be deemed a
Revolving Loan hereunder made by the Lender to the Borrower. The Borrower
confirms that any charges which the Lender may so make to the Loan Account
as herein provided will be made as an accommodation to the Borrower and
solely at the Lender's discretion. It is expressly understood and agreed
by the Borrower that the Lender shall have no responsibility to inquire
into the correctness of the apportionment, allocation or disposition among
the Loan Parties of the Loans made to the Borrower or any fees, costs or
expenses for which the Borrower is obligated under this Agreement.
Whenever any payment to be made under any such Loan Document shall be
stated to be due on a day other than a Business Day, such payment shall be
made on the next succeeding Business Day and such extension of time shall
in such case be included in the computation of interest or fees, as the
case may be, provided that, if any such payment is made by a charge to the
Loan Account, such charge may be made by the Lender on any day, whether or
not a Business Day. Each determination by the Lender of an interest rate,
fees or expense reimbursement hereunder shall be conclusive and binding for
all purposes in the absence of manifest error.
ARTICLE IV
CONDITIONS TO LOANS
SECTION 4.01 Conditions Precedent to Effectiveness and the
Initial Loan. The obligation of the Lender to make the initial Loan is
subject to the fulfillment, in a manner satisfactory to the Lender, of each
of the following conditions precedent:
(a) Payment of Fees, Etc. The Borrower shall have
paid on or before the date of this Agreement all fees, costs, expenses and
taxes then payable pursuant to Sections 2.06 and 11.04.
(b) Representations and Warranties; No Event of
Default. The following statements shall be true and correct: (i) the
representations and warranties contained in Article V and in each other
Loan Document, certificate or other writing delivered to the Lender
pursuant hereto or thereto on or prior to the Effective Date are true and
correct on and as of the Effective Date as though made on and as of such
date and (ii) no Default or Event of Default shall have occurred and be
continuing on the Effective Date or would result from this Agreement or the
other Loan Documents becoming effective in accordance with its or their
respective terms, both immediately before and immediately after giving
effect to the initial Loan.
(c) Legality. The making of the initial Loan shall
not contravene any law, rule or regulation applicable to the Lender or the
Borrower or any other Loan Party.
(d) Delivery of Documents. The Lender shall have
received on or before the Effective Date the following, each in form and
substance satisfactory to the Lender and, unless indicated otherwise, dated
the Effective Date:
(i) the Revolving Credit Note, in the form
of Exhibit A, payable to the order of the Lender, duly executed
by the Borrower;
(ii) a Security Agreement, in the form of
Exhibit C, duly executed by the Borrower;
(iii) a Security Agreement, in the form
of Exhibit D, duly executed by each Unrestricted Guarantor;
(iv) a Security Agreement, in the form of
Exhibit E, duly executed by each Restricted Guarantor;
(v) such collateral access agreements from
lessors, warehousemen, bailees and other third persons as the
Lender may require;
(vi) the Contribution Agreement, in the form
of Exhibit B, duly executed by each of the parties thereto;
(vii) the Subordination Agreements, in
the form of Exhibit K, duly executed by each of the parties
listed on Schedule 1.01(B);
(viii) a Pledge Agreement, in the form of
Exhibit F, duly executed by Red Top Gas, Inc., together with (A)
such original stock certificates or other certificated securities
or instruments representing all of the Capital Stock of each
Subsidiary of Red Top Gas, Inc., and (B) undated stock powers
executed in blank;
(ix) appropriate financing statements on Form
UCC-1, duly executed by the Borrower and each other Loan Party
and duly filed in such office or offices as may be necessary or,
in the opinion of the Lender, desirable to perfect the security
interests purported to be created by the Security Agreements and
the Pledge Agreement;
(x) certified copies of request for copies
of information on Form UCC-11, listing all effective financing
statements which name as debtor any Loan Party or any of its
Subsidiaries and which are filed in the offices referred to in
paragraph (ix) above, together with copies of such financing
statements, none of which, except as otherwise agreed in writing
by the Lender, shall cover any of the Collateral and the results
of searches for any tax Lien and judgment Lien filed against such
Person or its property, which results, except as otherwise agreed
to in writing by the Lender, shall not show any such Liens;
(xi) a copy of the resolutions of the board
of directors of the Borrower, certified as of the Effective Date
by an Authorized Officer thereof, authorizing (A) the borrowings
hereunder and the transactions contemplated by the Loan Documents
to which the Borrower is or will be a party, and (B) the
execution, delivery and performance by the Borrower of each Loan
Document and the execution and delivery of the other documents to
be delivered by the Borrower in connection herewith and
therewith;
(xii) a copy of the resolutions of the
board of directors of each Guarantor, certified as of the
Effective Date by an Authorized Officer thereof, authorizing (A)
the guarantee by such Guarantor of the borrowings hereunder and
the transactions contemplated by the Loan Documents to which such
Guarantor is or will be a party, and (B) the execution and
delivery by such Guarantor of each Loan Document and the
execution and delivery of the other documents to be delivered by
such Guarantor in connection herewith and therewith;
(xiii) a certificate of an Authorized
Officer of each Loan Party, certifying the names and true
signatures of the representatives of such Loan Party authorized
to sign each Loan Document to which such Loan Party is or will be
a party and the other documents to be executed and delivered by
such Loan Party in connection herewith and therewith, together
with evidence of the incumbency of such authorized officers;
(xiv) a certificate of the appropriate
official(s) of the state of organization of each Loan Party and
each other state of foreign qualification certifying as to the
subsistence in good standing of, and the payment of taxes by,
such Loan Party in such states, together with confirmation by
telephone or telegram (where available) on the Effective Date
from such official(s) as to such matters;
(xv) a true and complete copy of the charter,
certificate of formation, certificate of limited partnership or
other publicly filed organizational document of each Loan Party
certified as of a date not more than 30 days prior to the
Effective Date by an appropriate official of the state of
organization of such Loan Party;
(xvi) a copy of the charter and by-laws,
limited liability company agreement, operating agreement,
agreement of limited partnership or other organizational document
of each Loan Party, together with all amendments thereto,
certified as of the Effective Date by an Authorized Officer of
such Loan Party;
(xvii) (A) an opinion of Skadden, Arps,
Slate, Xxxxxxx & Xxxx LLP, special counsel to the Loan Parties,
as to such matters as the Lender may reasonably request, and
(B) an opinion of Xxxxxxxx Petzall & Xxxxxxxx, L.L.C., general
counsel to the Loan Parties, as to such matters as the Lender may
reasonably request;
(xviii) a certificate of an Authorized
Officer of the Borrower, certifying as to the matters set forth
in subsection (b) of this Section 4.01;
(xix) a copy of the Financial Statements,
together with a certificate of an Authorized Officer of the
Borrower setting forth all existing Indebtedness, pending or
threatened litigation or claims and other contingent liabilities
of the Borrower and its Subsidiaries;
(xx) evidence of the insurance coverage
required by Section 6.01(h) of the Security Agreements and such
other insurance coverage with respect to the business and
operations of the Borrower and its Subsidiaries as the Lender may
reasonably request, in each case, where requested by the Lender,
with such indorsements as to the named insureds or loss payees
thereunder as the Lender may request and providing that such
policy may be terminated or canceled (by the insurer or the
insured thereunder) only upon 30 days' prior written notice to
the Lender and each such named insured or loss payee, together
with evidence of the payment of all premiums due in respect
thereof for such period as the Lender may request;
(xxi) [intentionally omitted];
(xxii) a certificate of an Authorized
Officer of the Borrower, certifying the names and true signatures
of the persons that are authorized to provide Notices of
Borrowings and all other notices under this Agreement and the
other Loan Documents;
(xxiii) copies of the Material Contracts,
including, without limitation, the Indentures, as in effect on
the Effective Date, certified as true and correct copies thereof
by an Authorized Officer of the Borrower, together with a
certificate of an Authorized Officer of the Borrower stating that
such agreements remain in full force and effect and that the
Borrower and its Subsidiaries have not breached or defaulted in
any of their obligations under such agreements;
(xxiv) a termination and release agreement
with respect to the Existing Credit Agreement and all related
documents, duly executed by the Borrower and the Existing Lender,
together with UCC-3 termination statements for all UCC-1
financing statements filed by the Existing Lender and covering
any portion of the Collateral;
(xxv) such depository account, blocked
account, lockbox account and similar agreements and other
documents, each in form and substance reasonably satisfactory to
the Lender, as the Lender may request with respect to each Loan
Party's cash management systems; and
(xxvi) such other agreements, instruments,
approvals, opinions and other documents, each satisfactory to the
Lender in form and substance, as the Lender may reasonably
request.
(e) Material Adverse Change. The Lender shall have
determined, in its sole judgment, that no material adverse change shall
have occurred in the business, operations, condition (financial or
otherwise), properties or prospects of any Loan Party since June 30, 1998.
(f) Proceedings; Receipt of Documents. All proceedings in
connection with the making of the initial Loan and the other transactions
contemplated by this Agreement and the other Loan Documents, and all
documents incidental hereto and thereto, shall be satisfactory to the
Lender and its counsel in their reasonable judgment, and the Lender and
such counsel shall have received all such information and such counterpart
originals or certified or other copies of such documents as the Lender or
such counsel may reasonably request.
SECTION 4.02 Conditions Precedent to Subsequent Loans. The
obligation of the Lender to make any Loan is subject to the fulfillment, in
a manner satisfactory to the Lender, of each of the following conditions
precedent:
(a) Payment of Fees, Etc. The Borrower shall have paid
all fees, costs, expenses and taxes then payable by the Borrower pursuant
to this Agreement and the other Loan Documents, including, without
limitation, Sections 2.06 and 11.04 hereof.
(b) Representations and Warranties; No Event of Default.
The following statements shall be true and correct, and the submission by
the Borrower to the Lender of a Notice of Borrowing with respect to such
Loan, and the Borrower's acceptance of the proceeds of such Loan, shall
each be deemed to be a representation and warranty by the Borrower on the
date of such Loan that: (i) the representations and warranties contained
in Article V and in each other Loan Document, certificate or other writing
delivered to the Lender pursuant hereto or thereto on or prior to the date
of such Loan are true and correct on and as of such date as though made on
and as of such date, (ii) at the time of and after giving effect to the
making of such Loan and the application of proceeds thereof, no Default or
Event of Default has occurred and is continuing or would result from the
making of the Loan to be made on such date and (iii) the conditions set
forth in this Section 4.02 have been satisfied as of the date of such
request.
(c) Legality. The making of such Loan shall not contravene
any law, rule or regulation applicable to the Lender or any other Loan
Party.
(d) Borrowing Notice. The Lender shall have received a
Notice of Borrowing pursuant to Section 2.02.
(e) Delivery of Documents. The Lender shall have received
such other agreements, instruments, approvals, opinions and other
documents, each in form and substance satisfactory to the Lender, as the
Lender may reasonably request.
(f) Proceedings; Receipt of Documents. All proceedings in
connection with the making of such Loan and the other transactions
contemplated by this Agreement and the other Loan Documents, and all
documents incidental hereto and thereto, shall be satisfactory to the
Lender and its counsel in their reasonable judgment, and the Lender and
such counsel shall have received all such information and such counterpart
originals or certified or other copies of such documents, in form and
substance satisfactory to the Lender, as the Lender or such counsel shall
have reasonably requested a reasonable time prior thereto.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
SECTION 5.01 Representations and Warranties. Each Loan Party
hereby represents and warrants to the Lender as follows:
(a) Organization, Good Standing, Etc. Each of the Borrower
and its Subsidiaries (i) is a corporation, limited liability company or
limited partnership duly organized, validly existing and in good standing
under the laws of the state of its organization, (ii) has all requisite
power and authority to conduct its business as now conducted and as
presently contemplated, in the case of the Borrower, to make the borrowings
hereunder, in the case of each Guarantor, to guarantee such Borrowings, and
to execute and deliver each Loan Document to which it is a party, and to
consummate the transactions contemplated thereby, and (iii) is duly
qualified to do business and is in good standing in each jurisdiction in
which the failure to be so qualified would have a Material Adverse Effect
on such entity.
(b) Authorization, Etc. The execution, delivery and
performance by each of the Borrower and its Subsidiaries of each Loan
Document to which it is or will be a party, (i) have been duly authorized
by all necessary action, (ii) do not and will not contravene its charter or
by-laws, its limited liability company or operating agreement or its
certificate of partnership or partnership agreement, as applicable, or any
applicable law or any contractual restriction binding on or otherwise
affecting it or any of its properties, (iii) do not and will not result in
or require the creation of any Lien (other than pursuant to any Loan
Document) upon or with respect to any of its properties, and (iv) do not
and will not result in any suspension, revocation, impairment, forfeiture
or nonrenewal of any permit, license, authorization or approval applicable
to its operations or any of its properties.
(c) Governmental Approvals. No authorization or approval
or other action by, and no notice to or filing with, any Governmental
Authority is required in connection with the due execution, delivery and
performance by any Loan Party or any of its Subsidiaries of any Loan
Document to which it is or will be a party.
(d) Enforceability of Loan Documents. This Agreement is,
and each other Loan Document to which any Loan Party or any of its
Subsidiaries is or will be a party, when delivered hereunder, will be, a
legal, valid and binding obligation of such Person, enforceable against
such Person in accordance with its terms, except (i) as may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or other
similar laws and (ii) the availability of the remedy of specific
performance or injunction or other forms of equitable relief may be subject
to equitable defenses and would be subject to the discretion of the court
before which any proceeding may be brought.
(e) [Intentionally omitted]
(f) Subsidiaries. Schedule 5.01(f) is a complete and
correct description of the name, jurisdiction of incorporation and
ownership of the outstanding Capital Stock of such Subsidiaries of the
Borrower in existence on the date hereof. All of the issued and
outstanding shares of Capital Stock of such Subsidiaries have been validly
issued and are fully paid and nonassessable, and the holders thereof are
not entitled to any preemptive, first refusal or other similar rights.
Except as indicated on such Schedule, all such Capital Stock is owned by
the Borrower or one or more of its wholly-owned Subsidiaries, free and
clear of all Liens. Except as indicated on such Schedule, there are no
outstanding debt or equity securities of the Borrower or any of its
Subsidiaries and no outstanding obligations of the Borrower or any of its
Subsidiaries convertible into or exchangeable for, or warrants, options or
other rights for the purchase or acquisition from the Borrower or any of
its Subsidiaries, or other obligations of any Subsidiary to issue, directly
or indirectly, any shares of Capital Stock of any Subsidiary of the
Borrower.
(g) Litigation. Except as set forth in Schedule 5.01(g),
there is no pending or, to the knowledge of the Borrower, threatened
action, suit or proceeding affecting the Borrower or any of its
Subsidiaries before any court or other Governmental Authority or any
arbitrator that (i) if adversely determined, could have a Material Adverse
Effect or (ii) relates to this Agreement, the Note or any other Loan
Document or any transaction contemplated hereby or thereby.
(h) Financial Condition.
(i) The Financial Statements, copies of
which have been delivered to the Lender, fairly present the
consolidated financial condition of the Borrower and its
Subsidiaries as at the respective dates thereof and the
consolidated results of operations of the Borrower and its
Subsidiaries for the fiscal periods ended on such respective
dates, all in accordance with GAAP, and since June 30, 1998, no
event or development has occurred that has had or could have a
Material Adverse Effect.
(ii) The Borrower has heretofore furnished to
the Lender projected monthly balance sheets, income statements
and statements of cash flows of the Borrower and its Subsidiaries
for the period from February 1, 1999 through June 30, 1999, as
updated from time to time pursuant to Section 6.01(a)(viii).
Such projections, as so updated, are believed by the Borrower at
the time furnished to be reasonable, have been prepared on a
reasonable basis and in good faith by the Borrower, and have been
based on assumptions believed by the Borrower to be reasonable at
the time made and upon the best information then reasonably
available to the Borrower, and the Borrower is not aware of any
facts or information that would lead it to believe that such
projections, as so updated, are incorrect or misleading in any
material respect.
(i) Compliance with Law, Etc. Neither the Borrower nor any
of its Subsidiaries is in violation of (A) its organizational documents,
(B) any material law, rule, or regulation, (C) any material judgment or
order or, to the knowledge of the Borrower, any other judgment or order of
any Governmental Authority applicable to it or any of its property or
assets, or (D) any material term of any agreement or instrument (including,
without limitation, any Indenture and any other Material Contract) binding
on or otherwise affecting it or any of its properties, and no Default or
Event of Default has occurred and is continuing.
(j) ERISA. Except as set forth on Schedule 5.01(j), (i)
each Employee Plan is in substantial compliance with ERISA and the Code,
(ii) no Termination Event has occurred nor is reasonably expected to occur
with respect to any Employee Plan, (iii) the most recent annual report
(Form 5500 Series) with respect to each Employee Plan, including any
required Schedule B (Actuarial Information) thereto, copies of which have
been filed with the Internal Revenue Service and delivered to the Lender,
is complete and correct and fairly presents the funding status of such
Employee Plan, and since the date of such report there has been no material
adverse change in such funding status, (iv) no Employee Plan had an
accumulated or waived funding deficiency or permitted decreases which would
create a deficiency in its funding standard account or has applied for an
extension of any amortization period within the meaning of Section 412 of
the Code at any time since March 12, 1994, and (v) no Lien imposed under
the Code or ERISA exists or is likely to arise on account of any Employee
Plan within the meaning of Section 412 of the Code at any time since March
12, 1994. Except as set forth on Schedule 5.01(j), none of the Borrower or
any of its ERISA Affiliates have incurred any withdrawal liability under
ERISA with respect to any Multiemployer Plan, or are aware of any facts
indicating that the Borrower or any of its ERISA Affiliates may in the
future incur any such withdrawal liability. Except as required by Section
4980B of the Code, none of the Borrower or any of its ERISA Affiliates
maintains an employee welfare benefit plan (as defined in Section 3(1) of
ERISA) which provides health or welfare benefits (through the purchase of
insurance or otherwise) for any retired or former employee of the Borrower
or any of its ERISA Affiliates or coverage after a participant's
termination of employment. None of the Borrower or any of its ERISA
Affiliates has incurred any liability or obligation under the Worker
Adjustment and Retraining Notification Act ("WARN") or similar state law,
which remains unpaid or unsatisfied.
(k) Taxes, Etc. All Federal, state and local tax returns
and other reports required by applicable law to be filed by the Borrower
and each of its Subsidiaries have been filed, or extensions have been
obtained, and all taxes, assessments and other governmental charges imposed
upon the Borrower or any of its Subsidiaries or any property of the
Borrower or any of its Subsidiaries and which have become due and payable
on or prior to the date hereof have been paid, except to the extent
contested in good faith by proper proceedings which stay the imposition of
any penalty, fine or Lien resulting from the non-payment thereof and with
respect to which adequate reserves have been set aside for the payment
thereof.
(l) Regulation U. Neither the Borrower nor any of its
Subsidiaries is nor will be engaged in the business of extending credit for
the purpose of purchasing or carrying margin stock (within the meaning of
Regulations T, U or X), and no proceeds of any Loan will be used to
purchase or carry any margin stock or to extend credit to others for the
purpose of purchasing or carrying any margin stock.
(m) Nature of Business. Neither the Borrower nor any of
its Subsidiaries is engaged in any business other than the sale of propane
gas, the sale and rental of propane gas storage tanks and related lines of
business, other than such other lines of business that have been disclosed
in writing to the Lender prior to the Effective Date.
(n) Adverse Agreements, Etc. Neither the Borrower nor any
of its Subsidiaries is a party to any agreement or instrument, or subject
to any charter, limited liability company agreement, partnership agreement
or other corporate, partnership or limited liability company restriction or
any judgment, order, regulation, ruling or other requirement of a court or
other Governmental Authority, which has a Material Adverse Effect.
(o) Permits, Etc. Each of the Borrower and its
Subsidiaries has, and is in compliance with, all material permits,
licenses, authorizations, approvals, entitlements and accreditations
required for such Person lawfully to own, lease, manage or operate, or to
acquire, each business currently owned, leased, managed or operated, or to
be acquired, by such Person. No condition exists or event has occurred
which, in itself or with the giving of notice or lapse of time or both,
would result in (A) the suspension, revocation, impairment, forfeiture or
non-renewal of any such permit, license, authorization, approval,
entitlement or accreditation or (B) a Material Adverse Effect, and, except
as set forth on Schedule 5.01(o), there is no claim that any thereof is not
in full force and effect.
(p) Properties. (i) Each of the Borrower and its
Subsidiaries has good and marketable title to, or valid leasehold interests
in, all property and assets material to its business, free and clear of all
Liens except Permitted Liens. The properties are in good working order and
condition, ordinary wear and tear excepted.
(ii) Schedule 5.01(p) sets forth a complete and
accurate list as of the Effective Date of the location, by state and street
address, of all real property owned or leased by any of the Borrower and
its Subsidiaries. As of the Effective Date, each of the Borrower and its
Subsidiaries has valid leasehold interests in the Leases described on
Schedule 5.01(p) to which it is a party. Schedule 5.01(p) sets forth with
respect to each such Lease, the commencement date, termination date,
renewal options (if any) and annual base rents. To the knowledge of the
Borrower, each such Lease is valid and enforceable in accordance with its
terms in all material respects and is in full force and effect. No consent
or approval of any landlord or other third party in connection with any
such Lease is necessary for the Borrower or any of its Subsidiaries to
enter into and execute the Loan Documents to which it is a party, except as
set forth on Schedule 5.01(p). To the knowledge of the Borrower, no other
party to any such Lease is in default of its obligations thereunder, and
none of the Borrower and its Subsidiaries (or any other party to any such
Lease) has not at any time delivered or received any notice of default
which remains uncured under any such Lease and, as of the Effective Date,
no event has occurred which, with the giving of notice or the passage of
time or both, would constitute a default under any such Lease.
(q) Full Disclosure. The Borrower has disclosed to the
Lender all agreements, instruments and corporate or other restrictions to
which it or any of its Subsidiaries is subject, and all other matters known
to it, that, individually or in the aggregate, could result in a Material
Adverse Effect. None of the other reports, financial statements,
certificates or other information furnished by or on behalf of the Borrower
to the Lender in connection with the negotiation of this Agreement or
delivered hereunder (as modified or supplemented by other information so
furnished) contains any material misstatement of fact or omits to state any
material fact necessary to make the statements therein, in the light of the
circumstances under which it was made, not misleading; provided that, with
respect to projected financial information, the Borrower represents only
that such information was prepared in good faith based upon assumptions
believed to be reasonable at the time. There is no contingent liability or
fact that may have a Material Adverse Effect which has not been set forth
in a footnote included in the Financial Statements or a schedule hereto.
(r) Year 2000. Any reprogramming required to permit the
proper functioning, in and following the year 2000, of (i) the Loan
Parties' computer systems and (ii) equipment containing embedded microchips
(including systems and equipment supplied by others or with which the Loan
Parties' systems interface) and the testing of all such systems and
equipment, as so reprogrammed, will be completed by October 30, 1999. The
cost to the Loan Parties of such reprogramming and testing and of the
reasonably foreseeable consequences of year 2000 to the Loan Parties
(including, without limitation, reprogramming errors and the failure of
others' systems or equipment) will not result in a Default or a Material
Adverse Effect. Except for such of the reprogramming referred to in the
preceding sentence as may be necessary, the computer and management
information systems of the Borrower and its Subsidiaries are and, with
ordinary course upgrading and maintenance, and, if necessary, replacement,
will continue for the term of this Agreement to be, sufficient to permit
the Borrower and its Subsidiaries to conduct its business without Material
Adverse Effect.
(s) Operating Lease Obligations. On the Effective Date,
neither the Borrower nor any of its Subsidiaries has any obligations as
lessee for the payment of rent for any real or personal property other than
the Operating Lease Obligations set forth on Schedule 5.01(s).
(t) Environmental Matters. Except as set forth on
Schedule 5.01(t), (i) the operations of each of the Borrower and its
Subsidiaries are in material compliance with all Environmental Laws;
(ii) there has been no Release at any of the properties owned or operated
by the Borrower or its Subsidiaries or a predecessor in interest, or at any
disposal or treatment facility which received Hazardous Materials generated
by the Borrower or its Subsidiaries or any predecessor in interest which
could have a Material Adverse Effect; (iii) no Environmental Action has
been asserted against the Borrower or its Subsidiaries or any predecessor
in interest nor does the Borrower or any of its Subsidiaries have knowledge
or notice of any threatened or pending Environmental Action against the
Borrower or its Subsidiaries or any predecessor in interest which could
have a Material Adverse Effect; and (iv) no Environmental Actions have been
asserted against any facilities that may have received Hazardous Materials
generated by the Borrower or its Subsidiaries or any predecessor in
interest which could have a Material Adverse Effect.
(u) Insurance. Each of the Borrower and its Subsidiaries
keeps its property insured and maintains (i) insurance to such extent and
against such risks, including fire, as is reasonable and prudent in
relation to their businesses, (ii) workmen's compensation insurance in the
amount required by applicable law, (iii) public liability insurance, which
shall include product liability insurance, in the amount customary with
companies in the same or similar business against claims for personal
injury or death on properties owned, occupied or controlled by it, and
(iv) such other insurance as may be required by law or as may be reasonably
required by the Lender (including, without limitation, against larceny,
embezzlement or other criminal misappropriation). Schedule 5.01(u) sets
forth a list of all insurance maintained by the Borrower and its
Subsidiaries on the Effective Date.
(v) Use of Proceeds. The proceeds of the Loans shall be
used to repay or secure Indebtedness owing by the Borrower to the Existing
Lender and certain other Indebtedness and for the Loan Parties' working
capital needs.
(w) Solvency. After giving effect to the transactions
contemplated by this Agreement and before and after giving effect to each
Loan, each of the Borrower and its Subsidiaries is, and the Borrower and
its Subsidiaries on a consolidated basis are, Solvent.
(x) Location of Bank Accounts. Schedule 5.01(x) sets forth
a complete and accurate list as of the Effective Date of all deposit,
checking and other bank accounts, including the Cash Concentration Account
and all Depository Accounts, of each Loan Party, all securities and other
accounts maintained with any broker dealer and all other similar accounts
maintained by each Loan Party, together with a description thereof (i.e.,
the bank or broker dealer at which such deposit or other account is
maintained and the account number and the purpose thereof).
(y) Intellectual Property. Except as set forth on Schedule
5.01(y), each of the Borrower and its Subsidiaries owns or licenses or
otherwise has the right to use all licenses, permits, patents, patent
applications, trademarks, trademark applications, service marks,
tradenames, copyrights, copyright applications, franchises, authorizations
and other intellectual property rights, that are necessary for the
operations of its businesses, without infringement upon or conflict with
the rights of any other Person with respect thereto, except for such
infringements and conflicts which, individually or in the aggregate, are
not reasonably expected to have a Material Adverse Effect. Set forth on
Schedule 5.01(y) is a complete and accurate list as of the Effective Date
of all such material license agreements to which the Borrower or any of its
Subsidiaries is a party and all patents, patent applications, registered
trademarks, trademark applications, service marks, tradenames, registered
copyrights and copyright applications owned by the Borrower and its
Subsidiaries. No slogan or other advertising device, product, process,
method, substance, part or other material now employed, or now contemplated
to be employed, by the Borrower or its Subsidiaries infringes upon or
conflicts with any rights owned by any other Person, and no claim or
litigation regarding any of the foregoing is pending or threatened, except
for such infringements and conflicts which could not have, individually or
in the aggregate, a Material Adverse Effect.
(z) Material Contracts. Set forth on Schedule 5.01(z) is a
complete and accurate list as of the Effective Date of all Material
Contracts of the Borrower and its Subsidiaries, showing the parties and
subject matter thereof and amendments and modifications thereto. Each such
Material Contract, including, without limitation, the Indentures, (i) is in
full force and effect and is binding upon and enforceable against each of
the Borrower and its Subsidiaries that is a party thereto and, to the best
knowledge of the Loan Parties, all other parties thereto in accordance with
its terms, (ii) has not been otherwise amended or modified, and (iii) is
not in default due to the action of the Borrower or its Subsidiaries or, to
the best knowledge of the Loan Parties, any other party thereto.
(aa) Holding Company and Investment Company Acts. Neither
the Borrower nor any of its Subsidiaries is (i) a "holding company" or a
"subsidiary company" of a "holding company" or an "affiliate" of a "holding
company," as such terms are defined in the Public Utility Holding Company
Act of 1935, as amended, or (ii) an "investment company" or an "affiliated
person" or "promoter" of, or "principal underwriter" of or for, an
"investment company," as such terms are defined in the Investment Company
Act of 1940, as amended.
(bb) Employee and Labor Matters. (i) There is (A) no
unfair labor practice complaint pending or, to the best knowledge of the
Loan Parties, threatened against the Borrower or any of its Subsidiaries
before any Governmental Authority and no grievance or arbitration
proceeding pending or threatened against the Borrower or any of its
Subsidiaries which arises out of or under any collective bargaining
agreement, (B) no strike, labor dispute, slowdown, stoppage or similar
action or grievance pending or, to the knowledge of the Borrower,
threatened against the Borrower or any of its Subsidiaries and (C) to the
best knowledge of the Loan Parties, no union representation question
existing with respect to the employees of the Borrower or any of its
Subsidiaries and no union organizing activity taking place with respect to
any of the employees of any of them.
(cc) Customers and Suppliers. There exists no actual or, to
the knowledge of the Borrower, threatened termination, cancellation or
limitation of, or modification to or change in, the business relationship
between (A) the Borrower or any of its Subsidiaries, on the one hand, and
any customer or any group thereof, on the other hand, whose agreements with
the Borrower or any such Subsidiary are individually or in the aggregate
material to the business or operations of the Borrower or any of its
Subsidiaries, or (B) the Borrower or any of its Subsidiaries, on the one
hand, and any material supplier thereof, on the other hand; and there
exists no present state of facts or circumstances that could give rise to
or result in any such termination, cancellation, limitation, modification
or change.
(dd) No Bankruptcy Filing. Neither the Borrower nor any of
its Subsidiaries is contemplating either the filing of a petition by it
under any state or federal bankruptcy or insolvency laws or the liquidation
of all or a major portion of the Borrower's or such Subsidiary's assets or
property, and neither the Borrower nor any of its Subsidiaries has any
knowledge of any Person contemplating the filing of any such petition
against it.
(ee) Subordinated Note Indenture. The subordination
provisions of the Subordinated Note Indenture are and will be enforceable
against the holders of the Subordinated Notes by the holders of any Senior
Indebtedness (as defined in the Subordinated Note Indenture) which have not
effectively waived the benefits thereof. All Obligations, including,
without limitation, those to pay principal of and interest (including post-
petition interest) on the Revolving Loans and fees and expenses in
connection therewith, constitute Senior Indebtedness (as defined in the
Subordinated Note Indenture), and all such Obligations are entitled to the
benefits of the subordination created by the Subordinated Note Indenture.
(ff) Location of Inventory; Place of Business; Chief
Executive Office. There is no location at which the Borrower or any of its
Subsidiaries has any Inventory (except for Inventory in transit) other than
(i) those locations listed on Schedule 5.01(ff) and (ii) any other
locations approved in writing by the Lender pursuant to the definition of
"Eligible Inventory." Schedule 5.01(ff) hereto contains a true, correct
and complete list, as of the Effective Date, of the legal names and
addresses of each pipeline or storage facility at which Inventory of the
Borrower and its Subsidiaries is stored. None of the receipts received by
the Borrower or any of its Subsidiaries from any pipeline or storage
facility states that the goods covered thereby are to be delivered to
bearer or to the order of a named Person or to a named Person and such
named Person's assigns. Schedule 5.01(ff) sets forth a complete and
accurate list as of the date hereof of (A) each place of business of the
Borrower and its Subsidiaries and (B) the chief executive office of each of
the Borrower and its Subsidiaries.
ARTICLE VI
COVENANTS OF THE BORROWER
SECTION 6.01 Affirmative Covenants. So long as any principal
of or interest on any Loan or any other Obligations (whether or not due)
shall remain unpaid or the Lender shall have any Commitment hereunder, each
Loan Party will, unless the Lender shall otherwise consent in writing:
(a) Reporting Requirements. Furnish to the Lender:
(i) as soon as available and in any event
within 45 days after the end of each fiscal quarter of the
Borrower and its Subsidiaries, consolidated balance sheets,
consolidated statements of operations and retained earnings and
consolidated statements of cash flows of the Borrower and its
Subsidiaries as at the end of such quarter, and for the period
commencing at the end of the immediately preceding Fiscal Year
and ending with the end of such quarter, setting forth in each
case in comparative form the figures for the corresponding date
or period of the immediately preceding Fiscal Year, all in
reasonable detail and certified by an Authorized Officer as
fairly presenting, in all material respects, the financial
position of the Borrower and its Subsidiaries as of the end of
such quarter and the results of operations and cash flows of the
Borrower and its Subsidiaries for such quarter, in accordance
with GAAP applied in a manner consistent with that of the most
recent audited financial statements of the Borrower and its
Subsidiaries furnished to the Lender, subject to normal year-end
adjustments and containing a management discussion of the
financial position of the Borrower and its Subsidiaries as of the
end of such quarter;
(ii) as soon as available, and in any event
within 90 days after the end of each Fiscal Year consolidated
balance sheets, consolidated statements of operations and
retained earnings and consolidated statements of cash flows of
the Borrower and its Subsidiaries as at the end of such Fiscal
Year, setting forth in comparative form the corresponding figures
for the immediately preceding Fiscal Year, all in reasonable
detail and prepared in accordance with GAAP, and accompanied by a
report and an unqualified opinion, prepared in accordance with
generally accepted auditing standards, of Xxxxx, Xxxxx & Xxxxxx
or other independent certified public accountants of recognized
standing selected by the Borrower and satisfactory to the Lender
(which opinion shall be without (A) a "going concern" or like
qualification or exception, (B) any qualification or exception as
to the scope of such audit or (C) any qualification which relates
to the treatment or classification of any item and which, as a
condition to the removal of such qualification, would require an
adjustment to such item, the effect of which would be to cause
any noncompliance with the provisions of Section 6.03), together
with a written statement of such accountants (1) to the effect
that, in making the examination necessary for their certification
of such financial statements, they have not obtained any
knowledge of the existence of an Event of Default or a Default
and (2) if such accountants shall have obtained any knowledge of
the existence of an Event of Default or such Default, describing
the nature thereof;
(iii) as soon as available, and in any
event within 30 days of the end of each fiscal month of the
Borrower and its Subsidiaries internally prepared consolidated
balance sheets, consolidated statements of operations and
consolidated statements of cash flows for such fiscal month of
the Borrower and its Subsidiaries and for the period from the
beginning of such Fiscal Year to the end of such fiscal month,
all in reasonable detail and certified by an Authorized Officer
as fairly presenting, in all material respects, the financial
position of the Borrower and its Subsidiaries as of the end of
such fiscal month and the results of operations and cash flows of
the Borrower and its Subsidiaries for such fiscal month, in
accordance with GAAP applied in a manner consistent with that of
the most recent audited financial statements furnished to the
Lender, subject to normal year-end adjustments;
(iv) simultaneously with the delivery of the
financial statements of the Borrower required by clauses (i),
(ii) and (iii) of this Section 6.01(a), a certificate of an
Authorized Officer (A) stating that such Authorized Officer has
reviewed the provisions of this Agreement and the other Loan
Documents and has made or caused to be made under his or her
supervision a review of the condition and operations of the
Borrower and its Subsidiaries during the period covered by such
financial statements with a view to determining whether the
Borrower and its Subsidiaries were in compliance with all of the
provisions of such Loan Documents at the times such compliance is
required by the Loan Documents, and that such review has not
disclosed, and such Authorized Officer has no knowledge of, the
existence during such period of an Event of Default or Default
or, if an Event of Default or Default existed, describing the
nature and period of existence thereof and the action which the
Borrower and its Subsidiaries propose to take or have taken with
respect thereto and (B) attaching a schedule showing the
calculations specified in Section 6.03;
(v) as soon as available and in any event
within 20 days of the end of each fiscal month of the Borrower,
reports in detail satisfactory to the Lender and certified by an
Authorized Officer as being accurate and complete (A) listing all
Accounts Receivable of the Borrower and its Subsidiaries as of
the last Business Day of such month, which shall include the
amount and age of each Account Receivable, showing separately
those which are more than 30, 60, 90 and 120 days old and a
description of all Liens, set-offs, defenses and counterclaims
with respect thereto, together with a reconciliation of such
schedule with the schedule delivered to the Lender pursuant to
this clause (v)(A) for the immediately preceding month, the name
and mailing address of each Account Debtor with respect to each
such Account Receivable and such other information as the Lender
request, (B) listing all accounts payable of the Borrower and its
Subsidiaries as of the last Business Day of such month which
shall include the amount and age of each account payable, the
name and mailing address of each account creditor and such other
information as the Lender may request, and (C) calculating and/or
listing the ineligible Accounts Receivable and ineligible
inventory that were excluded from the Borrowing Base as of the
last Business Day of such month.
(vi) as soon as available on a weekly basis,
and in any event by Wednesday of each week (or if not a Business
Day on the preceding Business Day), a listing of all Inventory of
the Borrower and its Subsidiaries as of the last Business Day of
the prior week, containing a breakdown of such Inventory by type
and amount, the cost (by location), the pipeline or storage
facility and such other information as the Lender may request,
all in detail and in form satisfactory to the Lender and
certified by an Authorized Officer as being accurate and
complete;
(vii) as soon as available on a weekly
basis, and in any event by Wednesday of each week (or if not a
Business Day, on the preceding Business Day), a Borrowing Base
Certificate as of the close of business on the last day of the
prior week, supported by schedules showing the derivation thereof
and containing such detail and other information as the Lender
may request from time to time, provided that (A) the Borrowing
Base set forth in the Borrowing Base Certificate shall be
effective from and including the date such Borrowing Base
Certificate is duly received by the Lender but not including the
date on which a subsequent Borrowing Base Certificate is received
by the Lender, unless the Lender disputes the eligibility of any
property for inclusion in the calculation of the Borrowing Base
or the valuation thereof by notice of such dispute to the
Borrower and (B) in the event of any dispute about the
eligibility of any property for inclusion in the calculation of
the Borrowing Base or the valuation thereof, the Lender's good
faith judgment shall control;
(viii) on or before April 30 of each
fiscal year, financial projections supplementing and superseding
the financial projections for such period referred to in Section
5.01(h)(ii), prepared on a monthly basis and otherwise in form
and substance satisfactory to the Lender, for the immediately
succeeding Fiscal Year for the Borrower and its Subsidiaries, all
such financial projections to be reasonable, to be prepared on a
reasonable basis and in good faith, and to be based on
assumptions believed by the Borrower to be reasonable at the time
made and from the best information then available to the
Borrower;
(ix) promptly after submission to any
Governmental Authority, all documents and information furnished
to such Governmental Authority in connection with any
investigation of the Borrower or any of its Subsidiaries other
than routine inquiries by such Governmental Authority;
(x) as soon as possible, and in any event
within three Business Days after the occurrence of an Event of
Default or Default or the occurrence of any event or development
that could have a Material Adverse Effect, the written statement
of an Authorized Officer setting forth the details of such Event
of Default, Default, other event or Material Adverse Effect and
the action which the Borrower and its Subsidiaries propose to
take with respect thereto;
(xi) (A) as soon as possible and in any event
(1) within 10 days after the Borrower or any ERISA Affiliate
thereof knows that any Termination Event described in clause (i)
of the definition of Termination Event with respect to any
Employee Plan has occurred, (2) within 10 days after the Borrower
or any ERISA Affiliate thereof knows or has reason to know that
any other Termination Event with respect to any Employee Plan has
occurred, or (3) within 10 days after the Borrower or any ERISA
Affiliate thereof knows that an accumulated funding deficiency
has been incurred or an application has been made to the
Secretary of the Treasury for a waiver or modification of the
minimum funding standard (including installment payments) or an
extension of any amortization period under Section 412 of the
Code with respect to an Employee Plan, a statement of an
Authorized Officer setting forth the details of such occurrence
and the action, if any, which the Borrower or such ERISA
Affiliate propose to take with respect thereto, (B) promptly and
in any event within three days after receipt thereof by the
Borrower or any ERISA Affiliate thereof from the PBGC, copies of
each notice received by the Borrower or any ERISA Affiliate
thereof of the PBGC's intention to terminate any Plan or to have
a trustee appointed to administer any Plan, (C) promptly and in
any event within 10 days after the filing thereof with the
Internal Revenue Service if requested by the Lender, copies of
each Schedule B (Actuarial Information) to the annual report
(Form 5500 Series) with respect to each Employee Plan and
Multiemployer Plan, (D) promptly and in any event within 10 days
after the Borrower or any ERISA Affiliate thereof knows or has
reason to know that a required installment within the meaning of
Section 412 of the Code has not been made when due with respect
to an Employee Plan, (E) promptly and in any event within three
days after receipt thereof by the Borrower or any ERISA Affiliate
thereof from a sponsor of a Multiemployer Plan or from the PBGC,
a copy of each notice received by the Borrower or any ERISA
Affiliate thereof concerning the imposition or amount of
withdrawal liability under Section 4202 of ERISA or indicating
that such Multiemployer Plan may enter reorganization status
under Section 4241 of ERISA, and (F) promptly and in any event
within 10 days after the Borrower or any ERISA Affiliate thereof
send notice of a plant closing or mass layoff (as defined in
WARN) to employees, copies of each such notice sent by the
Borrower or any ERISA Affiliate thereof;
(xii) promptly after the commencement
thereof but in any event not later than three Business Days after
service of process with respect thereto on, or the obtaining of
knowledge thereof by, the Borrower or any Subsidiary, notice of
each action, suit or proceeding before any court or other
Governmental Authority or other regulatory body or any arbitrator
which, if adversely determined, could have a Material Adverse
Effect;
(xiii) as soon as possible and in any
event within 10 days after execution, receipt or delivery
thereof, copies of any material notices that the Borrower
executes or receives from or sends to the trustee under and in
connection with any Indenture;
(xiv) promptly after the sending or
filing thereof, copies of all statements, reports and other
information the Borrower or any of its Subsidiaries sends to any
holders of its Indebtedness or its securities or files with the
SEC or any national (domestic or foreign) securities exchange;
(xv) promptly upon receipt thereof, copies of
all financial reports (including, without limitation, management
letters), if any, submitted to the Borrower or any of its
Subsidiaries by its auditors in connection with any annual or
interim audit of the books thereof; and
(xvi) promptly upon request, such other
information concerning the condition or operations, financial or
otherwise, of the Borrower or any of its Affiliates as the Lender
may from time to time may reasonably request.
(b) Additional Guaranties and Collateral Security. Cause:
(i) each Subsidiary of the Borrower not in
existence on the Effective Date and which hereafter conducts any
business or acquires rights in assets with a fair market value in
excess of $250,000 in the aggregate for all such Subsidiaries or
$100,000 for any individual Subsidiary, to execute and deliver to
the Lender promptly and in any event within 10 days after the
formation, acquisition or change in status thereof (A) a Joinder
Agreement, substantially in the form of Exhibit H, pursuant to
which such Subsidiary shall become a Loan Party and a Guarantor
hereunder, (B) a Security Agreement in the form of Exhibit D, if
such Subsidiary is or will be an Unrestricted Guarantor, (C) a
Security Agreement in the form of Exhibit E, if such Subsidiary
is or will be a Restricted Guarantor, (D) if such Subsidiary is
or will be an Unrestricted Guarantor and has any Subsidiaries, a
Pledge Agreement together with (x) certificates evidencing all of
the Capital Stock of any Person owned by such Subsidiary,
(y) undated stock powers executed in blank, and (z) such opinion
of counsel and such approving certificate of such Subsidiary as
the Lender may reasonably request in respect of complying with
any legend on any such certificate or any other matter relating
to such shares, and (E) such other agreements, instruments,
approvals, legal opinions or other documents reasonably requested
by the Lender in order to create, perfect, establish the first
priority of or otherwise protect any Lien purported to be covered
by any such Security Agreement, or Pledge Agreement or otherwise
to effect the intent that such Subsidiary shall become bound by
all of the terms, covenants and agreements contained in the Loan
Documents and that property and assets of such Subsidiary shall
become Collateral for the Obligations; and
(ii) each owner of the Capital Stock of any
such Subsidiary, if such owner is an Unrestricted Guarantor, to
execute and deliver promptly and in any event within three
Business Days after the formation or acquisition of such
Subsidiary a Pledge Agreement, together with (A) certificates
evidencing all of the Capital Stock of such Subsidiary, (B)
undated stock powers or other appropriate instruments of
assignment executed in blank with signature guaranteed, (C) such
opinion of counsel and such approving certificate of such
Subsidiary as the Lender may reasonably request in respect of
complying with any legend on any such certificate or any other
matter relating to such shares and (D) such other agreements,
instruments, approvals, legal opinions or other documents
requested by the Lender;
(c) Compliance with Laws, Etc. Comply, and cause each of
its Subsidiaries to comply, in all material respects with all applicable
laws, rules, regulations and orders (including, without limitation, all
Environmental Laws), such compliance to include, without limitation, (i)
paying before the same become delinquent all taxes, assessments and
governmental charges or levies imposed upon it or upon its income or
profits or upon any of its properties, and (ii) paying all lawful claims
which if unpaid might become a Lien or charge upon any of its properties,
except to the extent contested in good faith by proper proceedings which
stay the imposition of any penalty, fine or Lien resulting from the non-
payment thereof and with respect to which adequate reserves have been set
aside for the payment thereof.
(d) Preservation of Existence, Etc. Maintain and preserve,
and cause each of its Subsidiaries to maintain and preserve, its existence,
rights and privileges, and become or remain duly qualified and in good
standing in each jurisdiction in which the failure to be so qualified would
have a Material Adverse Effect.
(e) Keeping of Records and Books of Account. Keep,
and cause each of its Subsidiaries to keep, adequate records and books of
account, with complete entries made in accordance with GAAP.
(f) Inspection Rights. Permit, and cause each of its
Subsidiaries to permit, the Lender or any agents or representatives thereof
at any time and from time to time during normal business hours, at the
expense of the Borrower, to examine and make copies of and abstracts from
their records and books of account, to visit and inspect their properties,
to verify materials, leases, notes, accounts receivable, deposit accounts
and other assets of the Borrower and its Subsidiaries, to conduct audits,
physical counts, valuations, appraisals (not more than once each Fiscal
Year, unless an Event of Default has occurred and is continuing),
environmental compliance audits (not more than once each Fiscal Year,
unless an Event of Default has occurred and is continuing), environmental
assessments or examinations and to discuss their affairs, finances and
accounts with any of the directors, officers, managerial employees,
independent accountants or other representatives thereof. The Borrower
agrees to pay the reasonable cost of such audit, appraisal, assessment or
examination.
(g) Maintenance of Properties, Etc. Maintain and preserve,
and cause each of its Subsidiaries to maintain and preserve, all of their
properties which are necessary or useful in the proper conduct of their
business in good working order and condition, ordinary wear and tear
excepted, and comply, and cause each of its Subsidiaries to comply, at all
times with the provisions of all leases to which each of them is a party as
lessee or under which each of them occupies property, so as to prevent any
loss or forfeiture thereof or thereunder.
(h) Maintenance of Insurance. Maintain, and cause each of
its Subsidiaries to maintain, insurance with responsible and reputable
insurance companies or associations (including, without limitation,
comprehensive general liability insurance) with respect to their properties
(including all real properties owned by them) and business, in such amounts
and covering such risks as is required by any Governmental Authority having
jurisdiction with respect thereto or as is reasonable and prudent in
relation to their businesses and in any event in amount, adequacy and scope
reasonably satisfactory to the Lender, but only to the extent such Loan
Party or Subsidiary owns Inventory with a Book Value in excess of $50,000
at any time. All policies covering the Collateral are to be made payable
to the Lender, as its interests may appear, in case of loss, under a
standard non-contributory "lender" or "secured party" clause and are to
contain such other provisions as the Lender may require to fully protect
the Lender's interest in the Collateral and to any payments to be made
under such policies. All certificates of insurance are to be delivered to
the Lender and the policies are to be premium prepaid, with the loss
payable and additional insured endorsement in favor of Lender and such
other Persons as the Lender may designate for time to time, and shall
provide for not less than 30 days' prior written notice to the Lender of
the exercise of any right of cancellation. If the Borrower or any of its
Subsidiaries fails to maintain such insurance, the Lender may arrange for
such insurance, but at the Borrower's expense and without any
responsibility on the Lender's part for obtaining the insurance, the
solvency of the insurance companies, the adequacy of the coverage, or the
collection of claims. Upon the occurrence of an Event of Default, the
Lender shall have the sole right, in the name of the Lender and the
Borrower and its Subsidiaries, to file claims under any insurance policies,
to receive, receipt and give acquittance for any payments that may be
payable thereunder solely with respect to the Collateral, and to execute
any and all endorsements, receipts, releases, assignments, reassignments or
other documents that may be necessary to effect the collection, compromise
or settlement of any claims under any such insurance policies solely with
respect to the Collateral.
(i) Obtaining of Permits, Etc. Obtain, maintain and
preserve, and cause each of its Subsidiaries to obtain, maintain and
preserve, all permits, licenses, authorizations, approvals, entitlements
and accreditations which are necessary or useful in the proper conduct of
its business and become or remain, and cause each of its Subsidiaries to
become or remain, duly qualified and in good standing in each jurisdiction
in which the character of the properties owned or leased by it or in which
the transaction of its business makes such qualification necessary.
(j) Environmental. (i) Keep any property either owned or
operated by it or any of its Subsidiaries free of any Environmental Liens;
(ii) comply, and cause its Subsidiaries to comply, in all material respects
with Environmental Laws and provide to the Lender documentation of such
compliance which the Lender reasonably requests, provided that nothing
herein shall require the Borrower to create documentation, other than
documentation that has been generated in the normal course of business or
that is otherwise required by Environmental Law or a Governmental
Authority; (iii) promptly notify the Lender by telephone, promptly followed
by a written notice, within ten (10) days of the Release, of any Release of
a Hazardous Material in excess of any reportable quantity from or onto
property owned, occupied or operated by the Borrower or any of its
Subsidiaries, or, to the knowledge of the Borrower, any adjacent property,
and take any Remedial Actions required to xxxxx such Release on, under or
affecting any property owned, occupied or operated by the Borrower or any
of its Subsidiaries, provided, however, that such notice requirements do
not apply to any Release to the ambient air or surface where such Release
is in full and strict compliance with any permit issued to the Borrower or
its Subsidiaries by any Governmental Authority pursuant to Environmental
Law; (iv) promptly provide the Lender with written notice within ten (10)
days of the receipt of any of the following: (A) notice that an
Environmental Lien has been filed against any property of the Borrower or
any of its Subsidiaries; (B) commencement of any Environmental Action or
written notice that an Environmental Action will be filed against the
Borrower or any of its Subsidiaries; and (C) notice of a violation,
citation or other administrative order which could have a Material Adverse
Effect; and (v) defend, indemnify and hold harmless the Lender and its
transferees, and their respective employees, agents, officers and directors
(each a "Lender Indemnified Party"), from and against any claims, demands,
penalties, fines, liabilities, settlements, damages, costs or expenses
(including, without limitation, attorney and consultant fees, investigation
and laboratory fees, court costs and litigation expenses) (collectively
referred to hereinafter as "Damages") arising out of (A) the presence,
disposal, Release or threatened Release of any Hazardous Materials on,
under or affecting any property at any time owned, occupied or operated by
the Borrower or any of its Subsidiaries (or its respective predecessors in
interest or title) or at any disposal facility which received hazardous
materials generated by the Borrower or any predecessor in Interest, (B) any
personal injury (including wrongful death) or property damage (real or
personal) arising out of or related to such Hazardous Materials, (C) any
investigation, lawsuit brought or threatened, settlement reached or
government order relating to such Hazardous Materials, (D) any violation of
any Environmental Law by the Borrower or any of its Subsidiaries and/or
(E) any Environmental Action; provided that the Borrower shall have no
obligation to defend and hold harmless a Lender Indemnified Party for
Damages finally determined by a court of competent jurisdiction to have
been incurred directly as a result of the gross negligence of such Lender
Indemnified Party.
(k) Further Assurances. Take such action and execute,
acknowledge and deliver, and cause each of its Subsidiaries to take such
action and execute, acknowledge and deliver, at its sole cost and expense,
such agreements, instruments or other documents as the Lender may
reasonably require from time to time in order (i) to carry out more
effectively the purposes of this Agreement and the other Loan Documents,
(ii) to subject to valid and perfected first priority Liens any of the
Collateral or any other property of the Borrower and its Subsidiaries,
(iii) to establish and maintain the validity and effectiveness of any of
the Loan Documents and the validity, perfection and priority of the Liens
intended to be created thereby, and (iv) to better assure, convey, grant,
assign, transfer and confirm unto the Lender the rights now or hereafter
intended to be granted to the Lender under this Agreement or any other Loan
Document.
(l) Change in Collateral; Collateral Records. (i) Give
the Lender not less than 30 days' prior written notice of any change in the
location of any Collateral, other than to locations set forth on Schedule
6.01(l) and with respect to which the Lender has filed financing statements
and otherwise fully perfected its Liens thereon, (ii) advise the Lender
promptly, in sufficient detail, of any material adverse change relating to
the type, quantity or quality of the Collateral or the Lien granted thereon
and (iii) execute and deliver, and cause each of its Subsidiaries to
execute and deliver, to the Lender for the benefit of the Lender from time
to time, solely for the Lender's convenience in maintaining a record of
Collateral, such written statements and schedules as the Lender may
reasonably require, designating, identifying or describing the Collateral.
(m) Collateral Access Agreements. At the election of the
Lender, obtain, as soon as possible and in any event within 30 days of the
time any Loan Party maintains Inventory at a third party pipeline or
storage facility that was not used by such Loan Party on the Effective
Date, a collateral access agreement from such third parties, in form and
substance reasonably satisfactory to the Lender.
(n) Subordination. Cause all Indebtedness and other
obligations now or hereafter owed by the Borrower or any Loan Party to any
of its Affiliates, to be subordinated in right of payment and security to
the Indebtedness and other Obligations owing to the Lender in accordance
with a subordination agreement in form and substance satisfactory to the
Lender.
(o) Fiscal Year. Cause the Fiscal Year of the Borrower and
its Subsidiaries to end on June 30 of each calendar year unless the Lender
consents to a change in such Fiscal Year (and appropriate related changes
to this Agreement).
(p) Cash Management System.
(i) Each of the Loan Parties, other than
Tres Hombres Incorporated, agrees and covenants to (A) cause all
cash and all proceeds from Accounts Receivable and the sale of
Inventory to be deposited into the Depository Accounts each
Business Day, (B) cause all remittances on credit card sales to
be transferred into the Cash Concentration Account or a
Depository Account each Business Day, (C) cause all funds in the
Depository Accounts to be transferred into the Cash Concentration
Account each Business Day, (D) cause all cash deposited in the
Cash Concentration Account to be sent by wire transfer to the
Lender Account each Business Day in accordance with the wire
instructions set forth on Schedule 1.01(A) or such other wire
instructions as the Lender may deliver from time to time,
(E) authorize, and does hereby authorize, the Lender to cause all
funds transferred to the Lender Account to be credited to the
Loan Account and applied to reduce the Obligations outstanding
from time to time, (F) take all such actions as the Lender deems
necessary or advisable to send all cash, all proceeds from
Accounts Receivable or the sale of Inventory, and all remittances
or other proceeds of Collateral to the Lender Account to be
applied to the Obligations, (G) on or before the Effective Date
(1) execute and deliver to the Lender an original notice letter
for each Depository Bank listed on Schedule 5.01(x),
substantially in the form of Exhibit M, which will be sent to
each such Depository Bank, (2) deliver to the Lender a Cash
Concentration Account Agreement executed by the Borrower and the
Cash Concentration Account Bank identified on Schedule 5.01(x),
and (3) take such other actions as the Lender deems necessary or
advisable to grant to the Lender dominion and control over the
funds in the Cash Concentration Account.
(ii) The Loan Parties, other than Tres
Hombres Incorporated, shall promptly, and in any event not later
than 5 days after the opening of any new Depository Account,
notify the Lender in writing of the creation of such new
Depository Account and shall at the time of such notice execute
and deliver to the Lender a notice letter, substantially in the
form of Exhibit M. Upon and during the continuance of an Event
of Default, the Loan Parties, other than Tres Hombres
Incorporated, shall, upon the request of the Lender, use their
best efforts to cause each Depository Bank maintaining a
Depository Account to promptly, and in any event within 30 days
after the date of such request, enter into a Depository Account
Agreement. If, after any such request by the Lender, the Loan
Parties are unable to obtain a Depository Account Agreement from
any financial institution that receives remittances or other
proceeds of sales of Inventory within such 30 day period, the
Loan Parties shall promptly thereafter terminate such accounts
and establish new accounts at a financial institution that will
enter into a Depository Account Agreement.
SECTION 6.02 Negative Covenants. So long as any principal of
or interest on any Loan or any other Obligation (whether or not due) shall
remain unpaid or the Lender shall have any Commitment hereunder, neither
the Borrower nor any other Loan Party shall, unless the Lender shall
otherwise consent in writing:
(a) Liens, Etc. Except for the Liens set forth on Schedule
6.02(a), create, incur, assume or suffer to exist, or permit any of its
Subsidiaries to create, incur, assume or suffer to exist any Lien upon or
with respect to any of its property, whether now owned or hereafter
acquired, to file or suffer to exist under the Uniform Commercial Code or
any similar law or statute of any jurisdiction, a financing statement (or
the equivalent thereof) that names the Borrower or any of its Subsidiaries
as debtor, to sign or suffer to exist any security agreement authorizing
any secured party thereunder to file such financing statement (or the
equivalent thereof), to sell any of its property or assets subject to an
understanding or agreement, contingent or otherwise, to repurchase such
property or assets (including sales of accounts receivable) with recourse
to the Borrower or any of its Subsidiaries or assign or otherwise transfer,
or permit any of its Subsidiaries to assign or otherwise transfer, any
account or other right to receive income, other than Permitted Liens.
(b) Indebtedness. Except for Indebtedness described on
Schedule 6.02(b), create, incur, assume, guarantee or suffer to exist, or
otherwise become or remain liable with respect to, or permit any of its
Subsidiaries to create, incur, assume, guarantee or suffer to exist or
otherwise become or remain liable with respect to, any Indebtedness, other
than Permitted Indebtedness.
(c) Fundamental Changes. Wind-up, liquidate or dissolve
itself (or permit or suffer any thereof) or merge, consolidate or
amalgamate with any Person, convey, sell, lease or sublease, transfer or
otherwise dispose of, whether in one transaction or a series of related
transactions, all or any part of its business, property or assets, whether
now owned or hereafter acquired, or (agree to do any of the foregoing) or
purchase or otherwise acquire, whether in one transaction or a series of
related transactions, all or substantially all of the assets of any Person
(or any division thereof) (or agree to do any of the foregoing), or permit
any of its Subsidiaries to do any of the foregoing; provided, however, that
(i) any Restricted Guarantor may be merged
into the Borrower or another Restricted Guarantor, or may
consolidate with another Restricted Guarantor and any
Unrestricted Guarantor may be merged into or may consolidate with
another Unrestricted Guarantor, so long as (A) no other provision
of this Agreement would be violated thereby, (B) the Borrower
gives the Lender at least 30 days' prior written notice of such
merger or consolidation, (C) no Default or Event of Default shall
have occurred and be continuing either before or after giving
effect to such transaction, and (D) the Lender's rights in any
Collateral, including, without limitation, the existence,
perfection and priority of any Lien thereon, are not adversely
affected by such merger or consolidation; and
(ii) any of the Borrower and its Subsidiaries
may (A) sell Inventory in the ordinary course of business,
(B) dispose of obsolete or worn-out equipment in the ordinary
course of business, provided that the Net Cash Proceeds for such
Dispositions are paid to the Lender pursuant to the terms of
Section 2.05(c)(ii), (C) sell all or substantially all of the
assets and property constituting a retail business location,
provided that (1) the net decrease in the total number of such
retail business locations, after giving effect to all sales of
assets and property constituting retail business locations and
all purchases of retail business locations permitted by
Section 6.02(e)(ii), shall not exceed ten (10) retail business
locations, (2) all Inventory and Accounts Receivable attributable
to any such location that is sold must be sold in connection with
any such Disposition, (3) the consideration received by the
Borrower or its Subsidiary for the assets and property that are
sold in connection with any such Disposition can be no less than
the fair market value of such assets and property, and (4) the
Net Cash Proceeds for each such Disposition are paid to the
Lender pursuant to the terms of Section 2.05(c)(ii), and (D) sell
or otherwise dispose of other property or assets for cash in an
aggregate amount not less than the fair market value of such
property or assets, provided that the Net Cash Proceeds of such
Dispositions do not exceed $250,000 in the aggregate in any
twelve-month period and are paid to the Lender pursuant to the
terms of Section 2.05(c)(ii).
(d) Change in Nature of Business. Make, or permit any of
its Subsidiaries to make, any change in the nature of its business as
carried on at the date hereof.
(e) Loans, Advances, Investments, Etc. (i) Make or commit
or agree to make any loan, advance guarantee of obligations, other
extension of credit or capital contributions to, or hold or invest in or
commit or agree to hold or invest in, or purchase or otherwise acquire or
commit or agree to purchase or otherwise acquire any shares of the Capital
Stock, bonds, notes, debentures or other securities of, or make or commit
or agree to make any other investment in, any other Person, or purchase or
own any futures contract or otherwise become liable for the purchase or
sale of currency or other commodities at a future date in the nature of a
futures contract, or permit any of its Subsidiaries to do any of the
foregoing, except for: (A) Investments existing on the date hereof, as set
forth on Schedule 6.02(e) hereto, but not any increase in the amount
thereof as set forth in such Schedule or any other modification of the
terms thereof, (B) loans and advances by the Borrower to the Guarantors and
by such Subsidiaries that are Guarantors to the Borrower or other
Guarantors, made in the ordinary course of business, and (C) Permitted
Investments; or
(ii) purchase assets and property that will constitute
a new retail location, unless such assets and property are purchased within
six months of a Disposition pursuant to Section 6.02(c)(ii)(C) for a
purchase price (whether cash, noncash or both), excluding any Subordinated
Indebtedness incurred by the Borrower or any of its Subsidiaries in
connection with any such purchase, not in excess of the Net Cash Proceeds
for such Disposition.
(f) Lease Obligations. Create, incur or suffer to exist,
or permit any of its Subsidiaries to create, incur or suffer to exist, any
obligations as lessee (i) for the payment of rent for any real or personal
property in connection with any sale and leaseback transaction, or (ii) for
the payment of rent for any real or personal property under leases or
agreements to lease other than (A) Capitalized Lease Obligations which
would not cause the aggregate amount of all obligations under Capitalized
Leases entered into after the Effective Date owing by the Borrower and its
Subsidiaries in any Fiscal Year to exceed the amounts set forth in
subsection (g) of this Section 6.02, and (B) Operating Lease Obligations
which would not cause the aggregate amount of all Operating Lease
Obligations owing by the Borrower and its Subsidiaries at any time to
exceed $3,500,000.
(g) Capital Expenditures. Except as set forth on Schedule
6.02(g), make or commit or agree to make, or permit any of its Subsidiaries
to make or commit or agree to make, any Capital Expenditure (by purchase or
Capitalized Lease) that would cause the aggregate amount of all such
Capital Expenditures made by the Borrower and its Subsidiaries to exceed
$3,500,000 for the Fiscal Year ending June 30, 1999, and $3,000,000 for any
Fiscal Year thereafter.
(h) Restricted Payments. (i) Declare or pay any dividend
or other distribution, direct or indirect, on account of any Capital Stock
of the Borrower, now or hereafter outstanding, (ii) make any repurchase,
redemption, retirement, defeasance, sinking fund or similar payment,
purchase or other acquisition for value, direct or indirect, of any Capital
Stock of the Borrower, now or hereafter outstanding, other than the
repurchase by the Borrower of its Capital Stock and related stock options
from employees of the Borrower and its Subsidiaries in connection with the
termination of the employment of such employees by the Borrower or its
Subsidiaries, provided that the aggregate amount of all such repurchases
shall not exceed $100,000 in any twelve month period, (iii) make any
payment to retire, or to obtain the surrender of, any outstanding warrants,
options or other rights for the purchase or acquisition of shares of any
class of Capital Stock of the Borrower, now or hereafter outstanding,
(iv) return any of capital to any shareholders or other equity holders of
the Borrower, or make any other distribution of property, assets, shares of
Capital Stock, warrants, rights, options, obligations or securities thereto
as such, or (v) pay any management fees or any other fees or expenses
(including the reimbursement thereof by the Borrower or any of its
Subsidiaries) pursuant to any management, consulting or other services
agreement to any of the shareholders or other equityholders of the Borrower
or any of its Subsidiaries or other Affiliates, or to any other
Subsidiaries or Affiliates or the Borrower, other than reimbursements for
reasonable expenses of shareholders or other equity holders who are
employees of the Borrower or its Subsidiaries for expenses incurred in
their capacity as employees in the ordinary course of business; provided,
however, that:
(A) Subsidiaries of the Borrower may declare and pay cash
and stock dividends, return capital and make distributions of assets to the
Borrower; and
(B) the Borrower may declare and pay dividends and
distributions payable solely in shares of the Borrower's common stock.
(i) Federal Reserve Regulations. Permit any Loan or the
proceeds of any Loan under this Agreement to be used for any purpose that
would cause such Loans to be margin loans under the provisions of
Regulation T, U or X of the Board.
(j) Transactions with Affiliates. Enter into, renew,
extend or be a party to, or permit any of its Subsidiaries to enter into,
renew, extend or be a party to any transaction or series of related
transactions (including, without limitation, the purchase, sale, lease,
transfer or exchange of property or assets of any kind or the rendering of
services of any kind) with any of its Affiliates, except in the ordinary
course of business in a manner and to an extent consistent with past
practice and necessary or desirable for the prudent operation of its
business, for fair consideration and on terms no less favorable to the
Borrower or such Subsidiary than would be obtainable in a comparable arm's
length transaction with a Person that is not an Affiliate thereof.
(k) Limitations on Dividends and Other Payment Restrictions
Affecting Subsidiaries. Create or otherwise cause, incur, assume, suffer
or permit to exist or become effective any consensual encumbrance or
restriction of any kind on the ability of any of its Subsidiaries (i) to
pay dividends or to make any other distribution on any shares of Capital
Stock of such Subsidiary owned by the Borrower or any of its Subsidiaries,
(ii) to pay or prepay or to subordinate any Indebtedness owed to the
Borrower or any of its Subsidiaries, (iii) to make loans or advances to the
Borrower or any of its Subsidiaries or (iv) to transfer any of its property
or assets to the Borrower or any of its Subsidiaries, or permit any of its
Subsidiaries to do any of the foregoing; provided, however, that nothing in
any of clauses (i) through (iv) of this Section 6.02(k) shall prohibit or
restrict:
(A) this Agreement and the other Loan Documents;
(B) any agreements in effect on the date of this Agreement
and described on Schedule 6.02(k);
(C) any applicable law, rule or regulation (including,
without limitation, applicable currency control laws and applicable state
corporate statutes restricting the payment of dividends in certain
circumstances);
(D) in the case of clause (iv) any agreement setting forth
customary restrictions on the subletting, assignment or transfer of any
property or asset that is a lease, license, conveyance or contract of
similar property or assets; or
(E) in the case of clause (iv) any holder of a Permitted
Lien from restricting on customary terms the transfer of any property or
assets subject thereto.
(l) Modifications of Indebtedness, Organizational Documents
and Certain Other Agreements, Etc. (i) Amend, modify or otherwise change
(or permit the amendment, modification or other change in any manner of)
any of the provisions of any Indebtedness of the Borrower or any of its
Subsidiaries or of any instrument or agreement (including, without
limitation, any purchase agreement, indenture, loan agreement or security
agreement but excluding any Indenture and the Indebtedness evidenced
thereby) relating to any such Indebtedness if such amendment, modification
or change would shorten the final maturity or average life to maturity of,
or require any payment to be made earlier than the date originally
scheduled on, such Indebtedness, would increase the interest rate
applicable to such Indebtedness, or would change the subordination
provision, if any, of such Indebtedness, or would otherwise be adverse to
the issuer of such Indebtedness in any respect, (ii) agree to any amendment
or make any other change to (or make any payment consistent with any
amendment or other change to), or waive any of its rights under, any
Indenture or refinance any Indebtedness evidenced by the Indentures without
obtaining the prior written consent of the Lender to such amendment,
modification, payment, waiver, change or refinancing, except for (i) an
amendment or supplement that adds a Guarantor as an additional guarantor
thereunder and (ii) an amendment or supplement that cures any ambiguity,
inconsistency or defect in any Indenture, provided that any such amendment
or supplement is not adverse to the interests of the Lender, (iii) except
for the Obligations, make any voluntary or optional payment, prepayment,
redemption or other acquisition for value of any Indebtedness of the
Borrower or any of its Subsidiaries (including, without limitation, by way
of depositing money or securities with the trustee therefor before the date
required for the purpose of paying any portion of such Indebtedness when
due), or refund, refinance, replace or exchange any other Indebtedness for
any such Indebtedness, or make any prepayment, redemption or repurchase of
any outstanding Indebtedness as a result of any asset sale, change of
control, issuance and sale of debt or equity securities or similar event,
or give any notice with respect to any of the foregoing, or (iv) amend,
modify or otherwise change its certificate of incorporation or bylaws (or
other similar organizational documents), including, without limitation, by
the filing or modification of any certificate of designation, or any
agreement or arrangement entered into by it, with respect to any of its
Capital Stock (including any shareholders' agreement), or enter into any
new agreement with respect to any of its Capital Stock except any such
amendments, modifications or changes or any such new agreements or
arrangements pursuant to this clause (iv) that either individually or in
the aggregate, could not have a Material Adverse Effect.
(m) [Intentionally Omitted]
(n) Investment Company Act of 1940. Engage in any
business, enter into any transaction, use any securities or take any other
action or permit any of its Subsidiaries to do any of the foregoing, that
would cause it or any of its Subsidiaries to become subject to the
registration requirements of the Investment Company Act of 1940, as
amended, by virtue of being an "investment company" or a company
"controlled" by an "investment company" not entitled to an exemption within
the meaning of such Act.
(o) Compromise of Accounts Receivable. Compromise or
adjust any Account Receivable (or extend the time of payment thereof) or
grant any discounts, allowances or credits other than, provided no Default
or Event of Default has occurred and is continuing, in the ordinary course
of business of the Loan Parties.
(p) Environmental. Permit the use, handling, generation,
storage, treatment, release or disposal of Hazardous Materials at any
property owned or leased by the Borrower or any of its Subsidiaries except
in compliance with Environmental Laws and so long as such use, handling,
generation, storage, treatment, release or disposal of Hazardous Materials
does not result in a Material Adverse Effect.
(q) Tres Hombres Incorporated. In the case of any Loan
Party other than Tres Hombres Incorporated, (i) assume, guarantee or
otherwise become obligated upon any Indebtedness of Tres Hombres
Incorporated or any Subsidiary of Tres Hombres Incorporated; or (ii) make
any loans or advances to or other investments in, or make any other
payments to, Tres Hombres Incorporated or any Subsidiary of Tres Hombres
Incorporated if, immediately after giving effect to any such loan, advance,
investment or payment, the aggregate amount of all such loans, advances,
investments or payments outstanding would exceed $50,000.
SECTION 6.03 Financial Covenants. So long as any principal of
or interest on any Loan or any other Obligation (whether or not due) shall
remain unpaid or the Lender shall have any Commitment hereunder, neither
the Borrower nor any other Loan Party shall, unless the Lender shall
otherwise consent in writing:
(a) Tangible Net Worth. Permit Consolidated Tangible Net
Worth of the Borrower and its Subsidiaries at the end of each fiscal
quarter of the Borrower to be less than the amount set forth below opposite
such fiscal quarter end:
Fiscal Quarter End Tangible Net Worth
------------------ ------------------
June 1999 ($76,026,000)
September 1999 ($78,925,000)
December 1999 ($77,715,000)
March 2000 ($74,810,000)
June 2000 ($79,205,000)
September 2000 ($83,345,000)
December 2000 ($81,810,000)
March 2001 ($78,355,000)
June 2001 ($82,565,000)
September 2001 ($86,760,000)
December 2001 ($85,085,000)
March 2002 ($86,445,000)
June 2002 ($85,585,000)
(b) Fixed Charge Coverage Ratio. Permit the Fixed Charge
Coverage Ratio for each period of four (4) consecutive fiscal quarters of
the Borrower for which the last quarter ends on a date set forth below to
be less than the amount set forth opposite such fiscal quarter end:
Fiscal Quarter End Fixed Charge Coverage Ratio
------------------ ---------------------------
June 1999 .77 to 1.0
September 1999 .77 to 1.0
December 1999 .90 to 1.0
March 2000 .93 to 1.0
June 2000 .93 to 1.0
September 2000 .80 to 1.0
December 2000 .80 to 1.0
March 2001 .85 to 1.0
June 2001 .90 to 1.0
September 2001 .90 to 1.0
December 2001 .90 to 1.0
March 2002 .95 to 1.0
June 2002 .95 to 1.0
(c) Consolidated EBITDA. Permit Consolidated EBITDA of the
Borrower and its Subsidiaries at the end of each fiscal quarter of the
Borrower to be less than the applicable amount set forth below opposite
such fiscal quarter end:
Fiscal Quarter Ending EBITDA
--------------------- ------
June 1999 $14,000,000
September 1999 $14,000,000
December 1999 $14,750,000
March 2000 $16,320,000
June 2000 $16,720,000
September 2000 $16,720,000
December 2000 $16,785,000
March 2001 $16,870,000
June 2001 $16,880,000
September 2001 $16,890,000
December 2001 $17,360,000
March 2002 $17,995,000
June 2002 $18,080,000
ARTICLE VII
MANAGEMENT, COLLECTION AND STATUS OF
ACCOUNTS RECEIVABLE AND OTHER COLLATERAL
SECTION 7.01 Collection of Accounts Receivable; Management of
Collateral.
(a) After the occurrence and during the continuance of an
Event of Default, the Lender may send a notice of assignment and/or notice
of the Lender's security interest to any and all Account Debtors or third
parties holding or otherwise concerned with any of the Collateral, and
thereafter the Lender shall have the sole right to collect the Accounts
Receivable and/or take possession of the Collateral and the books and
records relating thereto. The Borrower shall not, and shall not permit its
Subsidiaries to, without prior written consent of the Lender, grant any
extension of time of payment of any Account Receivable, compromise or
settle any Account Receivable for less than the full amount thereof,
release, in whole or in part, any Person or property liable for the payment
thereof, or allow any credit or discount whatsoever thereon, except, in the
absence of a continuing Event of Default, as permitted by Section 6.02(o).
(b) Each Loan Party hereby appoints the Lender or its
designee on behalf of the Lender as such Loan Party's attorney-in-fact with
power exercisable during the continuance of any Default or Event of
Default to endorse such Loan Party's name upon any notes, acceptances,
checks, drafts, money orders or other evidences of payment relating to the
Accounts Receivable, to sign such Loan Party's name on any invoice or xxxx
of lading relating to any of the Accounts Receivable, drafts against
Account Debtors with respect to Accounts Receivable, assignments and
verifications of Accounts Receivable and notices to Account Debtors with
respect to Accounts Receivable, to send verification of Accounts
Receivable, and, to notify the Postal Service authorities to change the
address for delivery of mail addressed to the Borrower or any of its
Subsidiaries to such address as the Lender may designate and to do all
other acts and things necessary to carry out this Agreement. All acts of
said attorney or designee are hereby ratified and approved, and said
attorney or designate shall not be liable for any acts of omission or
commission (other than acts or omissions constituting gross negligence or
willful misconduct), or for any error of judgment or mistake of fact or
law; this power being coupled with an interest is irrevocable until all of
the Loans and other Obligations under the Loan Documents are paid in full
and all of the Loan Documents are terminated.
(c) Nothing herein contained shall be construed to
constitute the Lender as agent of the Borrower or any Subsidiary for any
purpose whatsoever, and the Lender shall not be responsible or liable for
any shortage, discrepancy, damage, loss or destruction of any part of the
Collateral wherever the same may be located and regardless of the cause
thereof (other than from acts or omissions of the Lender constituting gross
negligence or willful misconduct as determined by a final judgment of a
court of competent jurisdiction). The Lender shall not, under any
circumstance or in any event whatsoever, have any liability for any error
or omission or delay of any kind occurring in the settlement, collection or
payment of any of the Accounts Receivable or any instrument received in
payment thereof or for any damage resulting therefrom (other than acts or
omissions of the Lender constituting gross negligence or willful misconduct
as determined by a final judgment of a court of competent jurisdiction).
The Lender, by anything herein or in any assignment or otherwise, does not
assume any of the obligations under any contract or agreement assigned to
the Lender and shall not be responsible in any way for the performance by
the Borrower or any Subsidiary of any of the terms and conditions thereof.
(d) If any Account Receivable includes a charge for any tax
payable to any Governmental Authority, the Lender is hereby authorized (but
in no event obligated) in its discretion to pay the amount thereof to the
proper taxing authority for the applicable Loan Party's account and to
charge the Borrower therefor. The Borrower shall notify the Lender if any
Account Receivable includes any taxes due to any such Governmental
Authority and, in the absence of such notice, the Lender shall have the
right to retain the full proceeds of such Account Receivable and shall not
be liable for any taxes that may be due by reason of the sale and delivery
creating such Account Receivable.
SECTION 7.02 Accounts Receivable Documentation. Each Loan
Party will and will cause its Subsidiaries to, at such intervals as the
Lender may reasonably require, execute and deliver confirmatory written
assignments of the Accounts Receivable to the Lender and furnish such
further schedules and/or information as the Lender may reasonably require
relating to the Accounts Receivable, including, without limitation, sales
invoices or the equivalent, credit memos issued, remittance advises,
reports and copies of deposit slips and copies of original shipping or
delivery receipts for all merchandise sold. In addition, the Borrower
shall notify the Lender of any non-compliance in respect of the
representations, warranties and covenants contained in Section 7.03. The
items to be provided under this Section 7.02 are to be in form reasonably
satisfactory to the Lender and are to be executed and delivered to the
Lender from time to time solely for its convenience in maintaining records
of the Collateral. A Loan Party's failure to give any of such items to the
Lender shall not affect, terminate, modify or otherwise limit the Lender's
Lien on the Collateral. The Loan Parties shall not re-date any invoice or
sale or make sales on extended dating beyond that customary in their
industry, and shall not re-xxxx any Accounts Receivable without promptly
disclosing the same to the Lender and providing the Lender with copy of
such re-billing, identifying the same as such. If the Borrower becomes
aware of anything materially detrimental to any of the Loan Parties'
customers' credit, the Borrower will promptly advise the Lender thereof.
SECTION 7.03 Status of Accounts Receivable and Other
Collateral. With respect to Collateral of any Loan Party at the time the
Collateral becomes subject to the Lender's Lien, each Loan Party covenants,
represents and warrants: (a) the Loan Party that owns such Collateral
shall be the sole owner, free and clear of all Liens except in the favor of
the Lender or otherwise permitted hereunder, and fully authorized to sell,
transfer, pledge and/or grant a security interest in each and every item of
said Collateral; (b) each Account Receivable shall be a good and valid
account representing an undisputed bona fide indebtedness incurred or an
amount indisputably owed by the Account Debtor therein named, for a fixed
sum as set forth in the invoice relating thereto with respect to any
absolute sale and delivery upon the specified terms of goods sold or
services rendered by the Loan Parties; (c) no Account Receivable shall be
subject to any defense, offset, counterclaim, discount or allowance except
as may be stated in the invoice relating thereto, discounts and allowances
as may be customary in the Loan Parties' business and disclosed to the
Lender, and each Account Receivable (excluding an Account Receivable made
ineligible under clause (v) of the definition of "Eligible Accounts
Receivable" set forth in Section 1.01) to the knowledge of the Borrower
will be paid when due; (d) none of the transactions underlying or giving
rise to any Account Receivable shall violate any applicable state or
federal laws or regulations, and all documents relating thereto shall be
legally sufficient under such laws or regulations and shall be legally
enforceable in accordance with their terms; (e) no agreement under which
any deduction or offset of any kind, other than normal trade discounts, may
be granted or shall have been made by any Loan Party at or before the time
such Accounts Receivable is created; (f) all agreements, instruments and
other documents relating to any Account Receivable shall be true and
correct and in all material respects what they purport to be; (g) all
signatures and endorsements that appear on all material agreements,
instruments and other documents relating to Account Receivable shall be
genuine and all signatories and endorsers shall have full capacity to
contract; (h) the Borrower and its Subsidiaries shall maintain books and
records pertaining to said Collateral in such detail, form and scope as the
Lender shall reasonably require, it being agreed that based upon the
Lender's due diligence review of the Borrower, the Borrower's manner of
maintaining books and records on the Effective Date is acceptable to the
Lender; (i) the Borrower shall immediately notify the Lender if any
accounts with invoice amounts in excess of $25,000 in the aggregate for all
such accounts arise out of contracts with the United States or any state,
or any department, agency, or instrumentality thereof, and will execute or
cause the execution of any instruments and take or cause the taking of any
steps required by the Lender in order that all monies due or to become due
under any such contract shall be assigned to the Lender and notice thereof
given to the United States Government under the Federal Assignment of
Claims Act or to the applicable state government under such state's
assignment of claims statute, if any; (j) the Borrower will, immediately
upon learning thereof, report to the Lender any material loss or
destruction of, or substantial damage to, any of the Collateral, and any
other matters affecting the value, enforceability or collectibility of any
of the Collateral; (k) if any amount payable under or in connection
with any Account Receivable is evidenced by a promissory note or other
instrument, such promissory note or instrument shall be immediately
pledged, endorsed, assigned and delivered to the Lender as additional
Collateral; (l) the Loan Parties shall not re-date any invoice or sale or
make sales on extended dating beyond that which is customary in the
ordinary course of its business and in the industry; (m) the Loan Parties
shall conduct a physical count of the Inventory at least once each Fiscal
Year and shall promptly supply the Lender with a copy of such count
accompanied by a report of the value (based on the lower of cost (on a
first in first out basis) and market value) of such Inventory; and (n) no
Loan Party is or shall be entitled to pledge the Lender's credit on any
purchases or for any purpose whatsoever.
SECTION 7.04 Collateral Custodian. Upon the occurrence and
during the continuance of any Default or Event of Default, the Lender may
at any time and from time to time employ and maintain on the premises of
the Borrower a custodian selected by the Lender who shall have full
authority to do all acts necessary to protect the Lender's interests. The
Borrower hereby agrees to, and to cause its Subsidiaries to, cooperate with
any such custodian and to do whatever the Lender may reasonably request to
preserve the Collateral. All costs and expenses incurred by the Lender by
reason of the employment of the custodian shall be the responsibility of
the Borrower and charged to the Loan Account.
ARTICLE VIII
OF DEFAULT
SECTION 8.01 Events of Default. If any of the following Events
of Default shall occur and be continuing:
(a) the Borrower fails to pay when due (whether by
scheduled maturity, required prepayment, acceleration, demand or otherwise)
any Obligation within the meaning of clause (i) of such term, including,
without limitation any principal of or interest on any Loan or any fee or
other amount due hereunder;
(b) Any representation or warranty made or deemed made by
or on behalf of any Loan Party or by any officer of the foregoing under or
in connection with any Loan Document or under or in connection with any
report, certificate, or other document delivered to the Lender pursuant to
any Loan Document shall have been incorrect in any material respect when
made or deemed made;
(c) (i) any Loan Party fails to perform or comply with any
covenant or agreement contained in clauses (v), (vi), (vii) or (x) of
Section 6.01(a) and such failure continues for a period of 2 Business Days;
(ii) any Loan Party fails to perform or comply with any covenant or
agreement contained in clauses (i), (ii), (iii), (iv), (viii), (ix) or (xv)
of Section 6.01(a) or Section 6.01(g) and such failure continues for a
period of 5 Business Days; (iii) any Loan Party fails to perform or comply
with any covenant or agreement contained in Section 6.01(i) or Section
6.01(k) and such failure continues for a period of 15 days; (iv) except as
set forth in the foregoing clauses (i), (ii) and (iii) above, any Loan
Party fails to perform or comply with any other covenant or agreement
contained in Article VI; or (v) any Loan Party fails to perform or comply
with any covenant or agreement contained in any Security Agreement or
Pledge Agreement to which it is a party;
(d) any Loan Party fails to perform or comply with any
other term, covenant or agreement contained in any Loan Document to be
performed or observed by it and, except as set forth in subsections (a),
(b) and (c) of this Section 8.01, such failure, if capable of being
remedied, shall remain unremedied for 15 days after the earlier of the date
a senior officer of any Loan Party becomes aware of such failure and the
date written notice of such default shall have been given by the Lender to
the Borrower;
(e) any Loan Party fails to pay any principal of or
interest on any of its Indebtedness (excluding Indebtedness evidenced by
the Note) in an aggregate principal amount in excess of $100,000 or any
interest or premium thereon, when due (whether by scheduled maturity,
required prepayment, acceleration, demand or otherwise) and such failure
shall continue after the applicable grace period, if any, specified in the
agreement or instrument relating to such Indebtedness, or any other default
under any agreement or instrument relating to any such Indebtedness, or any
other event, shall occur and shall continue after the applicable grace
period, if any, specified in such agreement or instrument, if the effect of
such default or event is to accelerate, or to permit the acceleration of,
the maturity of such Indebtedness; or any such Indebtedness shall be
declared to be due and payable, or required to be prepaid (other than by a
regularly scheduled required prepayment), redeemed, purchased or defeased
or an offer to prepay, redeem, purchase or defease such Indebtedness shall
be required to be made, in each case prior to the stated maturity thereof;
(f) any Loan Party (i) shall institute any proceeding or
voluntary case seeking to adjudicate it a bankrupt or insolvent, or seeking
dissolution, liquidation, winding up, reorganization, arrangement,
adjustment, protection, relief or composition of it or its debts under any
law relating to bankruptcy, insolvency, reorganization or relief of
debtors, or seeking the entry of an order for relief or the appointment of
a receiver, trustee, custodian or other similar official for any such
Person or for any substantial part of its property, (ii) shall be generally
not paying its debts as such debts become due or shall admit in writing its
inability to pay its debts generally, (iii) shall make a general assignment
for the benefit of creditors, or (iv) shall take any action to authorize or
effect any of the actions set forth above in this subsection (f);
(g) any proceeding shall be instituted against any Loan
Party seeking to adjudicate it a bankrupt or insolvent, or seeking
dissolution, liquidation, winding up, reorganization, arrangement,
adjustment, protection, relief of debtors, or seeking the entry of an order
for relief or the appointment of a receiver, trustee, custodian or other
similar official for any such Person or for any substantial part of its
property, and either such proceeding shall remain undismissed or unstayed
for a period of 30 days or any of the actions sought in such proceeding
(including, without limitation, the entry of an order for relief against
any such Person or the appointment of a receiver, trustee, custodian or
other similar official for it or for any substantial part of its property)
shall occur;
(h) any provision of any Loan Document shall at any time
for any reason (other than pursuant to the express terms thereof) cease to
be valid and binding on or enforceable against any Loan Party intended to
be a party thereto, or the validity or enforceability thereof shall be
contested by any party thereto, or a proceeding shall be commenced by any
Loan Party or its Affiliate or any Governmental Authority having
jurisdiction over any of them, seeking to establish the invalidity or
unenforceability thereof, or any Loan Party shall deny in writing that it
has any liability or obligation purported to be created under any Loan
Document;
(i) any Security Agreement, any Pledge Agreement or any
other security document, after delivery thereof pursuant hereto, shall for
any reason fail or cease to create a valid and perfected and, except to the
extent permitted by the terms hereof or thereof, first priority (to the
extent a first priority Lien on such Collateral is required under the Loan
Documents) Lien in favor of the Lender on any Collateral purported to be
covered thereby;
(j) one or more judgments or orders for the payment of
money exceeding $50,000 in the aggregate shall be rendered against any Loan
Party or its Subsidiaries and remain unsatisfied and either (i) enforcement
proceedings shall have been commenced by any creditor upon any such
judgment or order, or (ii) there shall be a period of 10 consecutive days
after entry thereof during which a stay of enforcement of any such judgment
or order, by reason of a pending appeal or otherwise, shall not be in
effect; provided, however, that any such judgment or order shall not give
rise to an Event of Default under this subsection (j) if and for so long as
(A) the amount of such judgment or order is covered by a valid and binding
policy of insurance between the defendant and the insurer covering full
payment thereof and (B) such insurer has been notified, and has not
disputed the claim made for payment, of the amount of such judgment or
order;
(k) the Borrower or any of its ERISA Affiliates shall have
made a complete or partial withdrawal from a Multiemployer Plan, and, as a
result of such complete or partial withdrawal, the Borrower or such ERISA
Affiliate incurs a withdrawal liability in an annual amount exceeding
$10,000; or a Multiemployer Plan enters reorganization status under
Section 4241 of ERISA, and, as a result thereof, the Borrower's or such
ERISA Affiliate's annual contribution requirement with respect to such
Multiemployer Plan increases in an annual amount exceeding $10,000;
(l) any Termination Event with respect to any Employee Plan
shall have occurred, and, 30 days after notice thereof shall have been
given to the Borrower by the Lender, (i) such Termination Event (if
correctable) shall not have been corrected, and (ii) the then current value
of such Employee Plan's vested benefits exceeds the then current value of
assets allocable to such benefits in such Employee Plan by more than
$10,000 (or, in the case of a Termination Event involving liability under
Section 409, 502(i), 502(l), 515, 4062, 4063, 4064, 4069, 4201, 4204 or
4212 of ERISA or Section 4971 or 4975 of the Code, the liability is in
excess of such amount);
(m) a Change of Control shall have occurred;
(n) an event or development occurs which has a Material
Adverse Effect;
(o) any material portion of any Loan Party's properties or
assets is attached, seized, subjected to a writ or distress warrant, or is
levied upon, or comes into the possession of any third Person;
then, and in any such event, the Lender may, by notice to the
Borrower, (i) terminate the Commitment, whereupon the Commitment shall
terminate immediately, (ii) declare all Loans then outstanding to be due
and payable, whereupon the aggregate principal of such Loans, all accrued
and unpaid interest thereon, all fees and all other amounts payable under
this Agreement shall become due and payable immediately, without
presentment, demand, protest or further notice of any kind, all of which
are hereby expressly waived by the Borrower, and (iii) exercise any and all
of its other rights and remedies under applicable law, hereunder and under
the other Loan Documents; provided, however, that upon the occurrence of
any Event of Default with respect to the Borrower described in subsection
(f) or (g) of this Section 8.01, without any notice to the Borrower or any
other Person or any act by the Lender, the Commitment shall automatically
terminate and the Loans then outstanding, together with all accrued and
unpaid interest thereon, all fees and all other amounts due under this
Agreement shall become due and payable automatically and immediately,
without presentment, demand, protest or notice of any kind, all of which
are expressly waived by the Borrower.
ARTICLE IX
[INTENTIONALLY OMITTED]
ARTICLE X
GUARANTY
SECTION 10.01 Guaranty; Limitation of Liability. Each
Guarantor, jointly and severally, hereby unconditionally and irrevocably
guarantees the punctual payment when due, whether at stated maturity, by
acceleration or otherwise, of all obligations of the Borrower now or
hereafter existing under any Loan Document, whether for principal,
interest, fees, expenses or otherwise (such obligations, to the extent not
paid by the Borrower, being the "Guaranteed Obligations"), and agrees to
pay any and all expenses (including reasonable counsel fees and expenses)
incurred by the Lender in enforcing any rights under the guaranty set forth
in this Article. Without limiting the generality of the foregoing, each
Guarantor's joint and several liability shall extend to all amounts that
constitute part of the Guaranteed Obligations and would be owed by the
Borrower to the Lender under any Loan Document but for the fact that they
are unenforceable or not allowable due to the existence of a bankruptcy,
reorganization or similar proceeding involving the Borrower.
SECTION 10.02 Guaranty Absolute. Each Guarantor, jointly and
severally, guarantees that the Guaranteed Obligations will be paid strictly
in accordance with the terms of the Loan Documents, regardless of any law,
regulation or order now or hereafter in effect in any jurisdiction
affecting any of such terms or the rights of the Lender with respect
thereto. The obligations of each Guarantor under this Article are
independent of the Guaranteed Obligations, and a separate action or actions
may be brought and prosecuted against each Guarantor to enforce such
obligations, irrespective of whether any action is brought against the
Borrower or whether the Borrower is joined in any such action or actions.
The joint and several liability of each Guarantor under this Article shall
be irrevocable, absolute and unconditional irrespective of, and each
Guarantor hereby irrevocably waives any defenses it may now or hereafter
have in any way relating to, any or all of the following:
(a) any lack of validity or enforceability of any Loan
Document or any agreement or instrument relating thereto;
(b) any change in the time, manner or place of payment of,
or in any other term of, all or any of the Guaranteed Obligations, or any
other amendment or waiver of or any consent to departure from any Loan
Document, including, without limitation, any increase in the Guaranteed
Obligations resulting from the extension of additional credit to the
Borrower or otherwise;
(c) any taking, exchange, release or non-perfection of any
Collateral, or any taking, release or amendment or waiver of or consent to
departure from any other guaranty, for all or any of the Guaranteed
Obligations;
(d) any change, restructuring or termination of the
corporate, limited liability company or partnership structure or existence
of the Borrower; or
(e) any other circumstance (including, without limitation,
any statute of limitations) or any existence of or reliance on any
representation by the Lender that might otherwise constitute a defense
available to, or a discharge of, any Guarantor, the Borrower or any other
guarantor or surety.
This Article shall continue to be effective or be reinstated, as the
case may be, if at any time any payment of any of the Guaranteed
Obligations is rescinded or must otherwise be returned by the Lender or any
other Person upon the insolvency, bankruptcy or reorganization of the
Borrower or otherwise, all as though such payment had not been made.
SECTION 10.03 Waiver. Each Guarantor hereby waives promptness,
diligence, notice of acceptance and any other notice with respect to any of
the Guaranteed Obligations and this Article and any requirement that the
Lender exhaust any right or take any action against the Borrower or any
other Person or any collateral. Each Guarantor acknowledges that it will
receive direct and indirect benefits from the financing arrangements
contemplated herein and that the waiver set forth in this Section 10.03 is
knowingly made in contemplation of such benefits. Each Guarantor hereby
waives any right to revoke this Article, and acknowledges that this Article
is continuing in nature and applies to all Guaranteed Obligations, whether
existing now or in the future.
SECTION 10.04 Continuing Guaranty; Assignments. This Article is
a continuing guaranty and shall (a) remain in full force and effect until
the later of the cash payment in full of the Guaranteed Obligations (other
than indemnification obligations as to which no claim has been made) and
all other amounts payable under this Article and the Revolving Credit
Termination Date, (b) be binding upon the Guarantor, its successors and
assigns, (c) inure to the benefit of and be enforceable by the Lender and
its successors, pledgees, transferees and assigns and (d) shall continue to
be effective or shall be reinstated as the case may be, if at any time any
payment of any of the Obligations is rescinded or must otherwise be
returned by the Lenders upon the insolvency, bankruptcy or reorganization
of the Borrower or any Guarantor or otherwise, all as though such payment
had not been made. Without limiting the generality of the foregoing
clause (c), the Lender may pledge, assign or otherwise transfer all or any
portion of its rights and obligations under this Agreement (including,
without limitation, all or any portion of its Commitment, the Loans owing
to it and the Note held by it) to any other Person, and such other Person
shall thereupon become vested with all the benefits in respect thereof
granted the Lender herein or otherwise, in each case as provided in
Section 11.07.
SECTION 10.05 Subrogation. Each Guarantor agrees that it will
not exercise any rights that it may now or hereafter acquire against the
Borrower or any other Guarantor that arise from the existence, payment,
performance or enforcement of such Guarantor's obligations under this
Article, including, without limitation, any right of subrogation,
reimbursement, exoneration, contribution or indemnification and any right
to participate in any claim or remedy of the Lender against the Borrower or
any other Guarantor or any collateral, whether or not such claim, remedy or
right arises in equity or under contract, statute or common law, including,
without limitation, the right to take or receive from the Borrower or any
other Guarantor, directly or indirectly, in cash or other property or by
set-off or in any other manner, payment or security solely on account of
such claim, remedy or right, unless and until all of the Guaranteed
Obligations and all other amounts payable under this Article shall have
been paid in full in cash and the Revolving Commitment Termination Date
shall have occurred. If any amount shall be paid to a Guarantor in
violation of the immediately preceding sentence at any time prior to the
later of the payment in full in cash of the Guaranteed Obligations and all
other amounts payable under this Article and the Revolving Commitment
Termination Date, such amount shall be held in trust for the benefit of the
Lender and shall forthwith be paid to the Lender to be credited and applied
to the Guaranteed Obligations and all other amounts payable under this
Article, whether matured or unmatured, in accordance with the terms of this
Agreement, or to be held as collateral for any Guaranteed Obligations or
other amounts payable under this Article thereafter arising. If (i) a
Guarantor shall make payment to the Lender of all or any part of the
Guaranteed Obligations, (ii) all of the Guaranteed Obligations and all
other amounts payable under this Article shall be paid in full in cash and
(iii) the Revolving Commitment Termination Date shall have occurred, the
Lender will, at such Guarantor's request and expense, execute and deliver
to such Guarantor appropriate documents, without recourse and without
representation or warranty, necessary to evidence the transfer by
subrogation to such Guarantor of an interest in the Guaranteed Obligations
resulting from such payment by such Guarantor.
ARTICLE XI
MISCELLANEOUS
SECTION 11.01 Notices, Etc. All notices and other
communications provided for hereunder shall be in writing and shall be
mailed, telecopied or delivered, if to a Loan Party, at the following
address:
All Star Gas Corporation
000 Xxxx Xxxxxxxxxx Xxxxxx
Post Office Box 303
Lebanon, Missouri 65536
Attention: Xx. Xxxxxxx Xxxxxx
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
with a copy to:
Skadden, Arps, Slate
Xxxxxxx & Xxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Coco, Esq.
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
if to the Lender, to it at the following address:
Ableco Finance LLC
000 Xxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xx. Xxxxx X. Genda
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
with a copy to:
Xxxxxxx Xxxx & Xxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxxx X. Xxxxxxx, Esq.
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
or, as to each party, at such other address as shall be designated by such
party in a written notice to the other party complying as to delivery with
the terms of this Section 11.01. All such notices and other communications
shall be effective, (i) if mailed, when received or five days after
deposited in the mails, whichever occurs first, (ii) if telecopied, when
transmitted and confirmation received, or (iii) if delivered, upon
delivery, except that notices to the Lender pursuant to Article II shall
not be effective until received by the Lender.
SECTION 11.02 Amendments, Etc. No amendment or waiver of any
provision of this Agreement or the Note, and no consent to any departure by
the Borrower or any other Loan Party therefrom, shall in any event be
effective unless the same shall be in writing and signed by the Lender, and
then such waiver or consent shall be effective only in the specific
instance and for the specific purpose for which given.
SECTION 11.03 No Waiver; Remedies, Etc. No failure on the part
of the Lender to exercise, and no delay in exercising, any right hereunder
or under any other Loan Document shall operate as a waiver thereof; nor
shall any single or partial exercise of any right under any Loan Document
preclude any other or further exercise thereof or the exercise of any other
right. The rights and remedies of the Lender provided herein and in the
other Loan Documents are cumulative and are in addition to, and not
exclusive of, any rights or remedies provided by law. The rights of the
Lender under any Loan Document against any party thereto are not
conditional or contingent on any attempt by the Lender to exercise any of
their rights under any other Loan Document against such party or against
any other Person.
SECTION 11.04 Expenses; Taxes; Attorneys' Fees. The Borrower
will pay on demand, all costs and expenses incurred by or on behalf of the
Lender, regardless of whether the transactions contemplated hereby are
consummated, including, without limitation, reasonable fees, costs, client
charges and expenses of counsel for the Lender, accounting, due diligence,
periodic field audits, physical counts, valuations, fees of Rating Agencies
associated with the rating of the Loans, investigations, monitoring of
assets, appraisals of Collateral, environmental assessments, miscellaneous
disbursements, examination, travel, lodging and meals, arising from or
relating to: (a) the negotiation, preparation, execution, delivery,
performance and administration of this Agreement and the other Loan
Documents, (including, without limitation, the preparation of any
additional Loan Documents, pursuant to Section 6.01(b) or the review of any
of the agreements, instruments and documents referred to in Section
6.02(f)), (b) any requested amendments, waivers or consents to this
Agreement or the other Loan Documents whether or not such documents become
effective or are given, (c) the preservation and protection of any of the
Lender's rights under this Agreement or the other Loan Documents, (d) the
defense of any claim or action asserted or brought against the Lender by
any Person that arises from or relates to this Agreement, any other Loan
Document, the Lender's claims against Loan Party, or any and all matters in
connection therewith, (e) the commencement or defense of, or intervention
in, any court proceeding arising from or related to this Agreement or any
other Loan Document, (f) the filing of any petition, complaint, answer,
motion or other pleading by the Lender, or the taking of any action in
respect of the Collateral or other security, in connection with this
Agreement or any other Loan Document, (g) the protection, collection,
lease, sale, taking possession of or liquidation of, any Collateral or
other security in connection with this Agreement or any other Loan
Document, (h) any attempt to enforce any Lien or security interest in any
Collateral or other security in connection with this Agreement or any other
Loan Document, (i) any attempt to collect from any Loan Party, (j) the
receipt by the Lender of any advice from its professionals with respect to
any of the foregoing, (k) all liabilities and costs, including but not
limited to Environmental Liabilities and Costs, arising from or in
connection with the past, present or future operations of the Loan Parties
involving any damage to real or personal property or natural resources or
harm or injury alleged to have resulted from any Release of Hazardous
Materials on, upon or into such property, except where any such
Environmental Liabilities and Costs are finally determined by a court of
competent jurisdiction to have been directly caused by the gross negligence
of the Lender, (l) any Environmental Liabilities and Costs incurred in
connection with a Remedial Action of any Hazardous Materials present or
arising out of the operations of any facility of any Loan Party, except
where any such Environmental Liabilities and Costs are finally determined
by a court of competent jurisdiction to have been directly caused by the
gross negligence of the Lender, or (m) any Environmental Liabilities and
Costs incurred in connection with any Environmental Lien, except where any
such Environmental Liabilities and Costs are finally determined by a court
of competent jurisdiction to have been directly caused by the gross
negligence of the Lender. Without limitation of the foregoing or any other
provision of any Loan Document: (x) the Borrower agrees to pay all stamp,
document, transfer, recording or filing taxes or fees and similar
impositions now or hereafter determined by the Lender to be payable in
connection with this Agreement or any other Loan Document, and the Borrower
agrees to save the Lender harmless from and against any and all present or
future claims, liabilities or losses with respect to or resulting from any
omission to pay or delay in paying any such taxes, fees or impositions, (y)
the Borrower agrees to pay all broker fees of brokers retained by it
(including, without limitation, the broker fees of Durham Capital
Corporation) that may become due in connection with the transactions
contemplated by this Agreement, and (z) if the Borrower fails to perform
any covenant or agreement contained herein or in any other Loan Document,
the Lender may itself perform or cause performance of such covenant or
agreement, and the expenses of the Lender incurred in connection therewith
shall be reimbursed on demand by the Borrower.
SECTION 11.05 Right of Set-off. Upon the occurrence and during
the continuance of any Event of Default, the Lender may, and is hereby
authorized to, at any time and from time to time, without notice to the
Borrower (any such notice being expressly waived by the Borrower) and to
the fullest extent permitted by law, set off and apply any and all deposits
(general or special, time or demand, provisional or final) at any time held
and other indebtedness at any time owing by the Lender to or for the credit
or the account of the Borrower against any and all obligations of either
now or hereafter existing under any Loan Document, irrespective of whether
or not the Lender shall have made any demand hereunder or thereunder and
although such obligations may be contingent or unmatured. The Lender
agrees to notify the Borrower promptly after any such set-off and
application made by the Lender provided that the failure to give such
notice shall not affect the validity of such set-off and application.
SECTION 11.06 Severability. Any provision of this Agreement,
which is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining portions hereof or
affecting the validity or enforceability of such provision in any other
jurisdiction.
SECTION 11.07 Assignments and Participations.
(a) This Agreement and the Note shall be binding upon and
inure to the benefit of the Borrower and the other Loan Parties and the
Lender and their respective successors and assigns; provided, however, that
(i) each of the Borrower and the other Loan Parties may not assign or
transfer any of its rights hereunder, or under the Note, without the prior
written consent of the Lender and any such assignment without the Lender's
prior written consent shall be null and void, and (ii) the Lender may
pledge, assign or transfer any of its rights hereunder, or under the Note,
to any Person without notice to or the prior written consent of the
Borrower. Except as provided in this Section 11.07, this Agreement shall
not inure to the benefit of any party other than the Borrower, the other
Loan Parties, the Lender.
(b) The Lender may at any time, without notice to or the
consent of the Borrower or any other Loan Party, sell, assign or
participate to an Affiliate of the Lender, or, upon 5 days notice to the
Borrower, sell, assign or participate to any other Person, all or any
portion of the Lender's rights and obligations under this Agreement
(including, without limitation, all or a portion of its Commitment, the
Loans made by it and the Note held by it) . The Borrower and each other
Loan Party shall execute and deliver such Note and any amendment or other
modification restatement of this Agreement or any Loan Document as may be
requested by the Lender to reflect any such sale or assignment.
(i) the Borrower shall maintain, or cause to
be maintained, a register (the "Register") on which it enters the
name of the Lender as the registered owner of the Loan held by
the Lender. A Registered Loan (and the Registered Note, if any,
evidencing the same) may be assigned or sold in whole or in part
only by registration of such assignment or sale on the Register
(and each Registered Note shall expressly so provide). Any
assignment or sale of all or part of such Registered Loan (and
the Registered Note, if any, evidencing the same) may be effected
only by registration of such assignment or sale on the Register,
together with the surrender of the Registered Note, if any,
evidencing the same duly endorsed by (or accompanied by a written
instrument of assignment or sale duly executed by) the holder of
such Registered Note, whereupon, at the request of the designated
assignee(s) or transferee(s), one or more new Registered Notes in
the same aggregate principal amount shall be issued to the
designated assignee(s) or transferee(s). Prior to the
registration of assignment or sale of any Registered Loan (and
the Registered Note, if any evidencing the same), the Borrower
shall treat the Person in whose name such Loan (and the
Registered Note, if any, evidencing the same) is registered as
the owner thereof for the purpose of receiving all payments
thereon and for all other purposes, notwithstanding notice to the
contrary.
(ii) In the event that the Lender sells
participations in the Registered Loan, the Lender shall maintain
a register on which it enters the name of all participants in the
Registered Loans held by it (the "Participant Register"). A
Registered Loan (and the Registered Note, if any, evidencing the
same) may be participated in whole or in part only by
registration of such participation on the Participant Register
(and each Registered Note shall expressly so provide). Any
participation of such Registered Loan (and the Registered Note,
if any, evidencing the same) may be effected only by the
registration of such participation on the Participant Register.
(iii) Any foreign Person who purchases or
is assigned or participates in any portion of such Loan shall
provide the Borrower (in the case of a purchase or assignment) or
the Lender (in the case of a participation) with a completed
Internal Revenue Service Form W-8 (Certificate of Foreign Status)
or a substantially similar form for such purchaser, participant
or any other affiliate who is a holder of beneficial interests in
the Loan.
SECTION 11.08 Counterparts. This Agreement may be executed in
any number of counterparts and by different parties hereto in separate
counterparts, each of which shall be deemed to be an original, but all of
which taken together shall constitute one and the same agreement.
SECTION 11.09 Governing Law. THIS AGREEMENT, THE NOTE AND THE
OTHER LOAN DOCUMENTS SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND TO
BE PERFORMED IN THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICTS OF LAW
PRINCIPLES.
SECTION 11.10 Consent to Jurisdiction; Service of Process and
Venue. ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR
ANY OTHER LOAN DOCUMENT MAY BE BROUGHT IN XXX XXXXXX XX XXX XXXXX XX XXX
XXXX IN THE COUNTY OF NEW YORK OR OF THE UNITED STATES DISTRICT COURT FOR
THE SOUTHERN DISTRICT OF NEW YORK, AND, BY EXECUTION AND DELIVERY OF THIS
AGREEMENT, EACH LOAN PARTY HEREBY IRREVOCABLY ACCEPT IN RESPECT OF ITS
PROPERTY, GENERALLY AND UNCONDITIONALLY, THE JURISDICTION OF THE AFORESAID
COURTS. EACH LOAN PARTY FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF
PROCESS OUT OF ANY OF THE AFOREMENTIONED COURTS AND IN ANY SUCH ACTION OR
PROCEEDING BY THE MAILING OF COPIES THEREOF BY REGISTERED OR CERTIFIED
MAIL, POSTAGE PREPAID, TO BORROWER AT ITS ADDRESS FOR NOTICES AS SET FORTH
IN SECTION 11.01, SUCH SERVICE TO BECOME EFFECTIVE TEN (10) DAYS AFTER SUCH
MAILING. EACH LOAN PARTY HEREBY IRREVOCABLY APPOINTS THE SECRETARY OF
STATE OF THE STATE OF NEW YORK AS ITS AGENT FOR SERVICE OF PROCESS IN
RESPECT OF ANY SUCH ACTION OR PROCEEDING. NOTHING HEREIN SHALL AFFECT THE
RIGHT OF THE LENDER TO SERVICE OF PROCESS IN ANY OTHER MANNER PERMITTED BY
LAW OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST ANY LOAN
PARTY IN ANY OTHER JURISDICTION. EACH LOAN PARTY HEREBY EXPRESSLY AND
IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION
WHICH IT MAY NOW OR HEREAFTER HAVE TO THE JURISDICTION OR LAYING OF VENUE
OF ANY SUCH LITIGATION BROUGHT IN ANY SUCH COURT REFERRED TO ABOVE AND ANY
CLAIM THAT ANY SUCH LITIGATION HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
TO THE EXTENT THAT ANY LOAN PARTY HAS OR HEREAFTER MAY ACQUIRE ANY IMMUNITY
FROM JURISDICTION OF ANY COURT OR FROM ANY LEGAL PROCESS (WHETHER THROUGH
SERVICE OR NOTICE, ATTACHMENT PRIOR TO JUDGMENT, ATTACHMENT IN AID OF
EXECUTION OR OTHERWISE) WITH RESPECT TO ITSELF OR ITS PROPERTY, SUCH LOAN
PARTY HEREBY IRREVOCABLY WAIVES SUCH IMMUNITY IN RESPECT OF ITS OBLIGATIONS
UNDER THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS.
SECTION 11.11 Waiver of Jury Trial, Etc. EACH LOAN PARTY AND
THE LENDER HEREBY WAIVE ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION,
PROCEEDING OR COUNTERCLAIM CONCERNING ANY RIGHTS UNDER THIS AGREEMENT, THE
NOTE OR OTHER LOAN DOCUMENTS, OR UNDER ANY AMENDMENT, WAIVER, CONSENT,
INSTRUMENT, DOCUMENT OR OTHER AGREEMENT DELIVERED OR WHICH IN THE FUTURE
MAY BE DELIVERED IN CONNECTION THEREWITH, OR ARISING FROM ANY FINANCING
RELATIONSHIP EXISTING IN CONNECTION WITH THIS AGREEMENT, AND AGREE THAT ANY
SUCH ACTION, PROCEEDINGS OR COUNTERCLAIM SHALL BE TRIED BEFORE A COURT AND
NOT BEFORE A JURY. EACH LOAN PARTY CERTIFIES THAT NO OFFICER,
REPRESENTATIVE, AGENT OR ATTORNEY OF THE LENDER HAS REPRESENTED, EXPRESSLY
OR OTHERWISE, THAT THE LENDER WOULD NOT, IN THE EVENT OF ANY ACTION,
PROCEEDING OR COUNTERCLAIM, SEEK TO ENFORCE THE FOREGOING WAIVERS. EACH
LOAN PARTY HEREBY ACKNOWLEDGES THAT THIS PROVISION IS A MATERIAL INDUCEMENT
FOR THE LENDER ENTERING INTO THIS AGREEMENT.
SECTION 11.12 Consent by the Lender. Except as otherwise
expressly set forth herein to the contrary, if the consent, approval,
satisfaction, determination, judgment, acceptance or similar action (an
"Action") of the Lender shall be permitted or required pursuant to any
provision hereof or any provision of any other agreement to which any Loan
Party is a party and to which the Lender has succeeded thereto, such Action
shall be required to be in writing and may be withheld or denied by the
Lender with or without any reason, and without being subject to question or
challenge on the grounds that such Action was not taken in good faith.
SECTION 11.13 No Party Deemed Drafter. Each of the parties
hereto agrees that no party hereto shall be deemed to be the drafter of
this Agreement.
SECTION 11.14 Reinstatement; Certain Payments. If any claim is
ever made upon the Lender for repayment or recovery of any amount or
amounts received by the Lender in payment or on account of any of the
Obligations, the Lender shall give prompt notice of such claim to the
Borrower, and if the Lender repays all or part of such amount by reason of
(i) any judgment, decree or order of any court or administrative body
having jurisdiction over the Lender or any of its property, or (ii) any
good faith settlement or compromise of any such claim effected by the
Lender with any such claimant, then and in such event the Borrower agrees
that (A) any such judgment, decree, order, settlement or compromise shall
be binding upon it notwithstanding the cancellation of the Note or other
instrument evidencing the Obligations or the other Loan Documents or the
termination of this Agreement or the other Loan Documents, and (B) it shall
be and remain liable to the Lender hereunder for the amount so repaid or
recovered to the same extent as if such amount had never originally been
received by the Lender.
SECTION 11.15 Indemnification. In addition to the Borrower's
other Obligations under this Agreement, the Borrower agrees to defend,
protect, indemnify and hold harmless the Lender, any Securitization Party
and all of their respective officers, directors, employees, attorneys,
consultants and agents (collectively called the "Indemnitees") from and
against any and all losses, damages, liabilities, obligations, penalties,
fees, reasonable costs and expenses (including, without limitation,
reasonable attorneys' fees, costs and expenses) incurred by such
Indemnitees, whether prior to or from and after the Effective Date, whether
direct, indirect or consequential, as a result of or arising from or
relating to or in connection with any of the following: (i) the
negotiation, preparation, execution or performance or enforcement of this
Agreement, any other Loan Document or of any other document executed in
connection with the transactions contemplated by this Agreement, (ii) the
Lender's furnishing of funds to the Borrower under this Agreement,
including, without limitation, the management of any such Loans, (iii) any
matter relating to the financing transactions contemplated by this
Agreement or the other Loan Documents or by any document executed in
connection with the transactions contemplated by this Agreement or the
other Loan Documents, or (iv) any claim, litigation, investigation or
proceeding relating to any of the foregoing, whether or not any Indemnitee
is a party thereto (collectively, the "Indemnified Matters"); provided,
however, that the Borrower shall not have any obligation to any Indemnitee
under this Section 11.15 for any Indemnified Matter caused by the gross
negligence or willful misconduct of such Indemnitee, as determined by a
final judgment of a court of competent jurisdiction. Such indemnification
for all of the foregoing losses, damages, fees, costs and expenses of the
Indemnitees are chargeable against the Loan Account. To the extent that
the undertaking to indemnify, pay and hold harmless set forth in this
Section 11.15 may be unenforceable because it is violative of any law or
public policy, the Borrower shall contribute the maximum portion which it
is permitted to pay and satisfy under applicable law, to the payment and
satisfaction of all Indemnified Matters incurred by the Indemnitees. This
Indemnity shall survive the repayment of the Obligations and the discharge
of the Liens granted under the Loan Documents.
SECTION 11.16 Records. The unpaid principal of and interest on
the Note, the interest rate or rates applicable to such unpaid principal
and interest, the duration of such applicability, the Revolving Credit
Commitment, and the accrued and unpaid fees payable pursuant to Section
2.06 hereof, including, without limitation, the Funding Fee Loan Servicing
Fee, Field Examination Fee, and the Unused Line Fee shall at all times be
ascertained from the records of the Lender, which shall be conclusive and
binding absent manifest error.
SECTION 11.17 Binding Effect. This Agreement shall become
effective when it shall have been executed by the Borrower, each Subsidiary
of the Borrower in existence on the Effective Date, and the Lender, and
when the conditions precedent set forth in Section 4.01 hereof have been
satisfied or waived in writing by the Lender, and thereafter shall be
binding upon and inure to the benefit of the Borrower, the other Loan
Parties, the Lender, and their respective successors and assigns, except
that the Loan Parties shall not have the right to assign their rights or
obligations hereunder or any interest herein without the prior written
consent of the Lender, and any assignment by the Lender shall be governed
by Section 11.07 hereof.
SECTION 11.18 Joint and Several. The obligations of the Loan
Parties hereunder are joint and several. The Lender may, in its sole and
absolute discretion, enforce the provisions hereof against one or more of
the Loan Parties and shall not be required to proceed against all of the
Loan Parties jointly or seek payment from the Loan Parties ratably. In
addition, the Lender may, in its sole and absolute discretion, select the
Collateral of one or more of the Loan Parties for sale or application to
the Obligations, without regard to the ownership of such Collateral, and
shall not be required to make such selection ratably from the Collateral
owned by all of the Loan Parties. The release or discharge of any Loan
Party by the Lender shall not release or discharge the other Loan Parties
from the obligations of such Person hereunder.
SECTION 11.19 Confidentiality. The Lender agrees (on behalf of
itself and each of its affiliates, directors, officers, employees and
representatives) to use reasonable precautions to keep confidential, in
accordance with its customary procedures for handling confidential
information of this nature and in accordance with safe and sound practices
of comparable commercial finance companies, any non-public information
supplied to it by the Borrower pursuant to this Agreement or the other Loan
Documents which is identified by the Borrower as being confidential at the
time the same is delivered to such Person (and which at the time is not,
and does not thereafter become, publicly available or available to such
Person from another source not known to be subject to a confidentiality
obligation to such Person not to disclose such information), provided that
nothing herein shall limit the disclosure of any such information (i) to
the extent required by statute, rule, regulation or judicial process,
(ii) to counsel for the Lender, (iii) to examiners, auditors, accountants
or Securitization Parties, (iv) in connection with any litigation to which
the Lender is a party or (v) to any assignee or participant (or prospective
assignee or participant) so long as such assignee or participant (or
prospective assignee or participant) first agrees to be bound by
confidentiality provisions similar in substance to this Section 11.19. The
Lender agrees that, upon receipt of a request or identification of the
requirement for disclosure pursuant to clause (iv) hereof, it will make
reasonable efforts to keep the Borrower informed of such request or
identification, provided that the Borrower acknowledges that the Lender may
make disclosure as required or requested by any Governmental Authority or
representative thereof and that the Lender may be subject to review by
Securitization Parties or other regulatory agencies and may be required to
provide to, or otherwise make available for review by, the representatives
of such parties or agencies any such non-public information.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their respective officers thereunto duly authorized, as of
the date first above written.
BORROWER:
ALL STAR GAS CORPORATION
By: _________________________________
Name:
Title:
LENDER:
ABLECO FINANCE LLC
By: _________________________________
Name:
Title:
GUARANTORS:
ALL STAR GAS INC. OF ARIZONA
By:________________________________
Name:
Title:
ALL STAR GAS INC. OF ARKANSAS
By:_______________________________
Name:
Title:
ALL STAR GAS INC. OF CALIFORNIA
By: _____________________________
Name:
Title:
ALL STAR GAS INC. OF COLORADO
By:____________________________
Name:
Title:
ALL STAR GAS INC. OF IDAHO
By:____________________________
Name:
Title:
ALL STAR GAS INC. OF JACKSONVILLE
By:____________________________
Name:
Title:
ALL STAR GAS INC. OF ARMA
By:____________________________
Name:
Title:
EMPIRE UNDERGROUND STORAGE, INC.
By:____________________________
Name:
Title:
ALL STAR GAS INC. OF LOUISIANA
By:___________________________
Name:
Title:
ALL STAR GAS INC. OF MICHIGAN
By:___________________________
Name:
Title:
ALL STAR GAS INC. OF MISSOURI
By: __________________________
Name:
Title:
UTILITY COLLECTION CORPORATION
By:__________________________
Name:
Title:
ALL STAR GAS FIELD SERVICES CORPORATION
By:____________________________
Name:
Title:
ALL STAR AIRLINES, INC.
By:____________________________
Name:
Title:
ALL STAR GAS INC. OF NORTH CAROLINA
By:____________________________
Name:
Title:
ALL STAR GAS INC. OF OHIO
By:____________________________
Name:
Title:
ALL STAR GAS OF OKLAHOMA, INC.
By:___________________________
Name:
Title:
ALL STAR GAS INC. OF OREGON
By:____________________________
Name:
Title:
ALL STAR GAS INC. OF SOUTH CAROLINA
By:___________________________
Name:
Title:
ALL STAR GAS INC. OF TEXAS
By:___________________________
Name:
Title:
ALL STAR GAS INC. OF WASHINGTON
By:___________________________
Name:
Title:
ALL STAR GAS INC. OF WYOMING
By:_________________________
Name:
Title:
EMPIRE GAS CORPORATION
By:__________________________
Name:
Title:
ALL STAR GAS INC. OF INDIANA
By:_________________________
Name:
Title:
ALL STAR GAS INC. OF NEVADA
By:_________________________
Name:
Title:
ALL STAR ACQUISITION CO.
By:_________________________
Name:
Title:
ALL STAR DEVELOPMENT, LLC
By:________________________
Name:
Title:
ALL STAR TRANSPORTS, INC. - OREGON
By:_________________________
Name:
Title:
ALL STAR TRANSPORTS, INC. - MISSOURI
By:_________________________
Name:
Title:
RED TOP GAS INC.
By:_________________________
Name:
Title:
XXXXXXXXX PROPANE, INC.
By:________________________
Name:
Title:
RTG, INC.
By:_______________________
Name:
Title:
TRI-COUNTY GAS CO.
By:_______________________
Name:
Title:
GARSTANG GAS CO. INC.
By:______________________
Name:
Title:
TRES HOMBRES INCORPORATED
By:_______________________
Name:
Title:
