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EXHIBIT 10.12
FIRST AMENDED AND RESTATED
REVOLVING CREDIT AGREEMENT
DATED AS OF MAY 31, 1999
BETWEEN AND AMONG
HERITAGE SERVICE CORP.,
A DELAWARE CORPORATION
"BORROWER"
AND
BANK OF OKLAHOMA, NATIONAL ASSOCIATION,
MERCANTILE BANK NATIONAL ASSOCIATION,
AND
LOCAL OKLAHOMA BANK, N.A.
"BANKS"
AND
BANK OF OKLAHOMA, NATIONAL ASSOCIATION
AS "ADMINISTRATIVE AGENT" FOR THE BANKS
AND
MERCANTILE BANK NATIONAL ASSOCIATION
AS "CO-AGENT" FOR THE BANKS
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FIRST AMENDED AND RESTATED
REVOLVING CREDIT AGREEMENT
THIS FIRST AMENDED AND RESTATED REVOLVING CREDIT AGREEMENT, dated as of
May 31, 1999 (this "Agreement"), is entered into among HERITAGE SERVICE CORP., a
Delaware corporation (the "Borrower") and BANK OF OKLAHOMA, NATIONAL ASSOCIATION
("BOk"), MERCANTILE BANK NATIONAL ASSOCIATION ("Mercantile"), and LOCAL OKLAHOMA
BANK, N.A. ("Local") (collectively referred to herein as the "Banks"), BOk , as
administrative and structuring agent for the Banks (in such capacity the
"Administrative Agent") and Mercantile, as co-agent for the Banks (in such
capacity, the "Co-Agent").
ARTICLE I
DEFINITIONS; ACCOUNTING PRINCIPLES,
TERMS AND DEFINITIONS; CONSTRUCTION
1.1 Definitions. Capitalized terms are used in this Agreement with the
specific meanings defined below in this Section 1.1 or in Schedule I annexed
hereto.
"Agents" means collectively the Administrative Agent and the Co-Agent.
"Agreement" means this Agreement as from time to time amended, modified
and in effect.
"Applicable Rate" means, at any date, with respect to each Eurodollar
Loan and with respect to each Base Rate Loan, the rate of interest per annum as
determined on Schedule I annexed hereto.
"Bank" means each of the Persons listed as Banks on the signature page
hereto, including each of BOk, Mercantile and Local in its capacity as a Bank
and such other Persons who may from time to time own a Percentage Interest in
the Indebtedness.
"Banking Day" means any day other than Saturday, Sunday or a day on
which banks in Tulsa, Oklahoma are authorized or required by law or other
governmental action to close.
"Base Rate" means, on any date, the greater of (i) the rate of interest
announced by BOk at the Tulsa Office as its Base Rate or (ii) the sum of
one-half percentage point (1/2%) plus the Federal Funds Rate.
"Base Rate Loan" means each portion of the Loan bearing interest
determined by reference to the Base Rate.
"BOk" means Bank of Oklahoma, National Association.
"Business" means providing repair, installation and maintenance
services for propane heating systems and the sale and distribution of propane -
related supplies and equipment, including appliances.
"CERCLA" shall mean the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, 42 U.S.C. Section 9601 et seq., as the
same may be amended from time to time.
"Closing Date" means May 31, 1999.
"Commitment" means, with respect to any Bank, such Bank's obligation to
extend the Revolver Facility contemplated by Article II.
"Environmental Laws" means all applicable federal, state, local and
foreign laws, rules or regulations as amended from time to time, relating to
emissions, discharges, releases, threatened releases, removal, remediation or
abatement of pollutants, contaminants, chemicals or industrial, toxic or
hazardous substances or wastes into or in the environment (including without
limitation air, surface water, ground water or land), or otherwise used in
connection
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with the manufacture, processing, distribution, use, treatment, storage,
disposal, transport or handling of pollutants, contaminants, toxic or hazardous
substances or wastes, as defined under such applicable laws.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"ERISA Affiliate" means any trade or business (whether or not
incorporated) that, together with the Borrower, is treated as a single employer
under Section 414(b) or (c) of the Code, or, solely for purposes of Section 302
of ERISA and Section 412 of the Code, is treated as a single employer under
Section 414 of the Code.
"ERISA Event" means (i) any "reportable event", as defined in Section
4043 of ERISA or the regulations issued thereunder, with respect to a Plan; (ii)
the adoption of any amendment to a Plan that would require the provision of
security pursuant to Section 401(a)(29) of the Code or Section 307 of ERISA;
(iii) the existence with respect to any Plan of an "accumulated funding
deficiency" (as defined in Section 412 of the Code or Section 302 of ERISA),
whether or not waived; (iv) the filing pursuant to Section 412(d) of the Code or
Section 303(d) of ERISA of an application for a waiver of the minimum funding
standard with respect to any Plan; (v) the incurrence of any liability under
Title IV of ERISA with respect to the termination of any Plan or the withdrawal
or partial withdrawal of the Borrower or any of its ERISA Affiliates from any
Plan or Multiemployer Plan; (vi) the receipt by the Borrower or any ERISA
Affiliate from the PBGC or a plan administrator of any notice relating to the
intention to terminate any Plan or Plans or to appoint a trustee to administer
any Plan; (vii) the receipt by the Borrower or any ERISA Affiliate of any notice
concerning the imposition of Withdrawal Liability or a determination that a
Multiemployer Plan is, or is expected to be, insolvent or in reorganization,
within the meaning of Title IV of ERISA; and (viii) the occurrence of a
"prohibited transaction" with respect to which the Borrower is a "disqualified
person" (within the meaning of Section 4975 of the Code) and with respect to
which the Borrower would be liable for the payment of an excise tax.
"Event of Default" means any of the events specified in Section 9.1,
provided that there has been satisfied any requirement in connection with such
event for the giving of notice, or the lapse of time, or the happening of any
further condition, event or act, and "Default" shall mean any of such events,
whether or not any such requirement has been satisfied.
"Existing Credit Agreement" means the Revolving Credit Agreement dated
as of December 23, 1996, between and among the Borrower, BOk and BankBoston, as
lenders, and BankBoston, as Administrative Agent, and BOk, as Documentation
Agent.
"Final Maturity Date" means June 30, 2002.
"Hazardous Substance" means any substance so designated pursuant to
CERCLA, asbestos, petroleum, urea formaldehyde insulation and petroleum
by-products (other than propane).
"Indebtedness" shall mean and include any and all: (i) indebtedness,
obligations and liabilities of Borrower to the Banks pursuant to the terms of
this Agreement, including the obligations of the Borrower as evidenced by the
Notes and all lawful interest and other charges and all court costs, reasonable
attorneys' fees and other collection costs or charges incurred with respect
thereto; (ii) costs and expenses paid or incurred by the Agents and/or Banks in
enforcing or attempting to enforce collection of any Indebtedness and in
preserving, enforcing or realizing upon or attempting to preserve, enforce or
realize upon any collateral or security for any Indebtedness, including interest
on all sums so expended by the Bank from the date of such expenditure at an
annual rate equal to the Default Rate; and (iii) sums expended by the Agents
and/or Banks in curing any Event of Default or Default of Borrower under the
terms of this Agreement or any other security agreement or other writing
evidencing or securing the payment of the Notes together with interest on the
amount of each such expenditure from the respective dates thereof at an annual
rate equal to the Default Rate.
"Lien" means any mortgage, pledge, security interest, encumbrance,
contractual deposit arrangement, lien (statutory or otherwise) or charge of any
kind (including any agreement to give any of the foregoing, any conditional sale
or other title retention agreement, any lease in the nature thereof, and the
filing of or agreement to give any financing statement under the Uniform
Commercial Code of any jurisdiction) or any other type of preferential
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arrangement for the purpose, or having the effect, of protecting a creditor
against loss or securing the payment or performance of an obligation.
"Loans" means the Revolver Loans.
"Loan Documents" means this Agreement (as amended, modified or extended
from time to time), the Notes, the Security Agreement and applicable Financing
Statements.
"Local" means Local Oklahoma Bank, N.A.
"Material Adverse Effect" means (i) a material adverse effect on the
business, assets or financial condition of the Borrower, (ii) a material
impairment of the ability of the Borrower to perform any of its obligations
under the Loan Documents to which it is a party or (iii) a material adverse
effect on the enforceability of any of the Loan Documents.
"Mercantile" means Mercantile Bank National Association.
"Notes" means the Revolver Notes described in Section 2.1.4.
"Operating Partnership Credit Agreement" shall mean that certain First
Amended and Restated Credit Agreement dated as of May 31, 1999 between and among
Heritage Operating, L.P., as borrower, the Administrative Agent, the Co-Agent
and the Banks.
"Person" means and includes an individual, a partnership, a joint
venture, a corporation, a trust, an unincorporated organization and a government
or any department or agency thereof.
"Plan" means any "employee pension benefit plan" as such term is
defined in Section 3 of ERISA (other than a Multiemployer Plan) subject to the
provisions of Title IV of ERISA or Section 412 of the Code or Section 302 of
ERISA, and in respect of which the Borrower or any ERISA Affiliate is (or, if
such plan were terminated, would under Section 4069 of ERISA be deemed to be) an
"employer" as defined in Section 3(5) of ERISA.
"Tulsa Office" shall mean the main banking offices of BOk in Tulsa,
Oklahoma.
"Security Agreement" shall mean the Restated Security Agreement
executed and delivered pursuant to Section 6.1(vi) of this Agreement from the
Borrower, as debtor and pledgor, to the Administrative Agent, for the benefit of
the Banks, as secured parties, encumbering the Collateral described therein and
covered thereby.
"UCC" means the Uniform Commercial Code.
1.2 Accounting Principles, Terms and Determinations. All references in
this Agreement to "generally accepted accounting principles" or to "GAAP" shall
be deemed to refer to generally accepted accounting principles in effect in the
United States at the time of application thereof.
1.3 Construction. Except as otherwise explicitly specified to the
contrary or unless the context clearly requires otherwise, (i) the capitalized
term "Section" refers to sections of this agreement, (ii) the capitalized term
"Exhibit" refers to exhibits to this Agreement, (iii) references to a particular
Article or Section include all subsections thereof, (iv) the word "including"
shall be construed as "including without limitation", (v) terms defined in the
UCC and not otherwise defined herein have the meaning provided under the UCC,
(vi) references to a particular statute or regulation include all rules and
regulations thereunder and any successor statute, regulation or rules, in each
case as from time to time in effect and (vii) references to a particular Person
include such Person's successors and assigns to the extent not prohibited by
this Agreement and the other Loan Documents. References to "the date hereof"
mean the date first set forth above.
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ARTICLE II
REVOLVING CREDIT LOANS
2.1 Revolver Facility.
2.1.1 Revolver Loan. Subject to all the terms and conditions
of this Agreement and so long as no Default exists, from time to time
on and after the Closing Date and prior to the Final Maturity Date with
respect to the Revolver Loan the Banks will, severally in accordance
with their respective Percentage Interests, make loans to the Borrower
in such amounts as may be requested by the Borrower in accordance with
Section 2.1.3. The sum of the aggregate principal amount of loans made
under this Section 2.1.1 at any one time outstanding shall in no event
exceed the Maximum Amount of Revolver Credit.
2.1.2 Maximum Amount of Revolver Credit. The term "Maximum
Amount of Revolver Credit" means, on any date, the lesser of (i)
$1,000,000 or (ii) $20,000,000 minus the outstanding principal balance
on the Working Capital Facility under the Operating Partnership Credit
Agreement; provided that the aggregate outstanding principal amount of
the Revolver Loan shall be $0 for a period of not less than one (1)
Banking Day per month for three (3) consecutive calendar months during
each fiscal year of the Borrower (the "Required Clean-Up"). Failure by
the Borrower to comply with the provisions of the Required Clean-Up
shall constitute a failure to pay the Loans when due and an Event of
Default under Section 9.1.
2.1.3 Revolver Borrowing Requests. The Borrower may from time
to time request a loan under Section 2.1.1 by providing to the
Administrative Agent either a notice in writing or telephonic notice
promptly confirmed in writing. Such notice must be not later than noon
(Tulsa, Oklahoma time) on the day of such Revolver Loan request. The
notice must specify (a) the amount of the requested loan (which shall
be not less than $100,000 and in integral multiples of $50,000 in
excess thereof) and (b) the requested advance date therefor (which
shall be a Banking Day). Upon receipt of such notice, the
Administrative Agent will promptly inform each other Bank (by telephone
or otherwise). Each such loan will be made at the Tulsa Office by
depositing the amount thereof to the Borrower's operating account with
the Administrative Agent.
2.1.4 Revolver Loan Account: Revolver Notes. The
Administrative Agent will establish on its books a revolver loan
account for the Borrower (the "Revolver Loan Account"), which the
Administrative Agent shall administer as follows: (a) the
Administrative Agent shall add to the Revolver Loan Account, and the
Revolver Loan Account shall evidence, the principal amount of all loans
made from time to time by the Banks to the Borrower pursuant to Section
2.1.1 and (b) the Administrative Agent shall reduce the Revolver Loan
Account by the amount of all payments made on account of the
Indebtedness evidenced by the Revolver Loan Account. The aggregate
principal amount of the Indebtedness evidenced by the Revolver Loan
Account is referred to as the "Revolver Loan." The Revolver Loan shall
be deemed owed to each Bank severally in accordance with such Bank's
Percentage Interest, and all payments credited to the Revolver Loan
Account shall be for the account of each Bank in accordance with its
Percentage Interest. The Borrower's obligations to pay each Bank's
Percentage Interest in the Revolver Loan shall be evidenced by a
separate note of the Borrower in substantially the form of Exhibit
2.1.4 (the "Revolver Notes"), payable to the order of each Bank in
maximum principal amount equal to such Bank's Percentage Interest in
the total Commitments constituting the Revolver Loan.
ARTICLE III
INTEREST
Each Revolver Loan shall accrue interest at the Applicable Rate,
payable monthly on the last day of each calendar month, commencing (on the
portion of the Revolver Loans not subject to a Eurodollar Pricing Option) June
30, 1999, and at the Final Maturity Date. All payments of interest hereunder
shall be made to the Administrative Agent for the account of each Bank in
accordance with each Bank's Percentage Interest. On the last day of each
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Eurodollar Interest Period or on any earlier termination of any Eurodollar
Pricing Option, the Borrower will pay the accrued and unpaid interest on the
portion of such Loan which was subject to the Eurodollar Pricing Option which
expired or terminated on such date. On the Final Maturity Date or the earlier
accelerated maturity of any Loan, the Borrower will pay all accrued and unpaid
interest on such Loan, including any accrued and unpaid interest on any portion
of such Loan which is subject to a Eurodollar Pricing Option. For purposes of
this Agreement, interest (and any other amount expressed as interest) shall be
computed on the basis of a 360-day year for actual days elapsed. If any payment
required by this Agreement becomes due on any day that is not a Banking Day,
such payment shall be made on the next succeeding Banking Day. If the due date
for any payment of principal is extended as a result of the immediately
preceding sentence, interest shall be payable for the time during which payment
is extended at the Applicable Rate. See Schedule I annexed hereto for additional
terms and provisions regarding the Eurodollar Pricing Option and each Eurodollar
Loan made hereunder.
ARTICLE IV
PAYMENT
4.1 Payment at Maturity. On the Final Maturity Date with respect to
each Revolver Note or any accelerated maturity of such Loan, the Borrower will
pay to the Administrative Agent for the account of the Banks an amount equal to
the remaining aggregate principal amount of all Revolver Notes then outstanding,
together with all accrued and unpaid interest thereon and all other Indebtedness
then outstanding.
4.2 Voluntary Prepayments. Borrower may from time to time prepay all or
any portion of the Loans (in a minimum amount of $50,000 and an integral
multiple of $50,000), without premium or penalty of any type. The Borrower shall
give the Administrative Agent notice of the total amount of the Revolver Loan to
be paid, the date of such payment and the amount of interest, if any, to be paid
with such prepayment.
4.3 Reborrowing/Application of Payments, etc.
4.3.1 Reborrowing. The amounts of the Revolver Loan prepaid
pursuant to Section 4.2 may be reborrowed from time to time, prior to
the Final Maturity Date in accordance with Section 2.1 and subject to
the limits set forth therein.
4.3.2 Payments for Banks. All payments of principal hereunder
shall be made to the Administrative Agent for the account of the Banks
in accordance with the Banks' respective Percentage Interests.
ARTICLE V
COLLATERAL
The repayment of the Indebtedness shall be secured by the Collateral
(consisting of accounts, inventory and general intangibles, proceeds therefrom
and thereof) of the Borrower as more particularly described and defined in the
Security Agreement.
The Borrower hereby acknowledges that all of the Collateral is granted
as security for the repayment of all Indebtedness evidenced by the Notes. If one
or more of such Notes are paid in full or satisfied, but any portion of the
Indebtedness evidenced by a Note remains unsatisfied, the Banks may retain their
security interests in all of the Collateral on behalf of the Secured Parties
described therein until the remaining Indebtedness secured thereby is paid in
full, even if the value of the Collateral far exceeds the amount of such
outstanding Indebtedness secured thereby.
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ARTICLE VI
CONDITIONS PRECEDENT AND SUBSEQUENT TO LOANS
6.1 Conditions Precedent to Revolver Loan. The obligation of the Banks
to make the Revolver Loans is subject to the satisfaction of all of the
following conditions on or prior to the Closing Date (in addition to the other
terms and conditions set forth herein):
(i) No Default. There shall exist no Event of Default or
Default on the Closing Date.
(ii) Representations and Warranties. The representations,
warranties and covenants set forth in Article VIII shall be true and
correct on and as of the Closing Date, with the same effect as though
made on and as of the Closing Date unless such representation or
warranty relates only to an earlier date.
(iii) Certificate. The Borrower shall have delivered to the
Administrative Agent a certificate, dated as of the Closing Date, and
signed by the President or Chief Executive Officer and the Secretary of
the Borrower, certifying (a) to the matters covered by the conditions
specified in subsections (i) and (ii) of this Section 6.1, (b) that the
Borrower has performed and complied with all agreements and conditions
required to be performed or complied with by it prior to or on the
Closing Date, (c) to the name and signature of each officer of the
Borrower authorized to execute and deliver the Loan Documents and any
other documents, certificates or writings and to borrow under this
Agreement, and (d) to such other matters in connection with this
Agreement which the Banks shall determine to be advisable. The Banks
may conclusively rely on such certificate until the Agents receive
notice in writing to the contrary.
(iv) Proceedings. On or before the Closing Date, all corporate
proceedings of the Borrower shall be taken in connection with the
transactions contemplated by the Loan Documents and shall be
satisfactory in form and substance to the Banks and the Administrative
Agent's counsel; and the Agents shall have received certified copies,
in form and substance satisfactory to the Banks and Agents' counsel, of
the Articles or Certificates of Incorporation and By-Laws of the
Borrower and the resolutions of the Board of Directors of the Borrower,
as adopted, authorizing the execution and delivery of the Loan
Documents, the borrowings under this Agreement, and the granting of the
security interests in the Collateral pursuant to the Security
Agreement, to secure the payment of the Indebtedness.
(v) Notes. The Borrower shall have delivered to the
Administrative Agent the replacement Notes payable to the order of the
respective Banks in the amount of each Bank's Percentage Interest in
the Maximum Amount of Revolver Credit, in each case appropriately
executed.
(vi) Security Agreement. The Borrower shall have delivered to
the Administrative Agent the Security Agreement, appropriately executed
by the Borrower, and dated as of the Closing Date, together with such
financing statements (UCC or otherwise) as may be applicable
(collectively, the "Financing Statements"), and other documents as
shall be necessary and appropriate to perfect the Banks' security
interests in the Collateral covered by said Security Agreement.
(vii) UCC Releases/Other Information. The Administrative Agent
shall have received a written payoff statement from any other secured
party of record concerning any of the Collateral together with
applicable UCC terminations of record of all such existing security
interest liens pertaining to the Collateral or any part thereof.
(viii) Other Information and Closing Documents. The
Administrative Agent shall have received such other consents,
information, documents, agreements and assurances as shall be
reasonably requested by the Banks.
(ix) Assignments/Replacement of BankBoston. BankBoston shall
have surrendered its Revolver Note to BOk, as successor Administrative
Agent, and each of Mercantile and Local shall have paid to such
Administrative Agent in immediately available funds an amount equal to
their respective
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Percentage Interests on outstanding principal balance of such
BankBoston Revolver Note (for Mercantile, the maximum of $100,000 and
for Local, the maximum of $300,000) of the Revolver Loan assigned
hereunder thereto by BankBoston, for concurrent remittance by such
Administrative Agent to BankBoston in exchange for BankBoston's
resignation as Administrative Agent and its return of the Revolver Note
payable to the order of BankBoston to BOk, as the successor
Administrative Agent.
6.2 Conditions Precedent to All Loans. The Banks shall not be obligated
to make any additional Revolver Loan advance(s) after the Closing Date (i) if at
such time any Event of Default shall have occurred or any Default or any
Noncompliance Event shall have occurred and be continuing hereunder or pursuant
to the Operating Partnership Credit Agreement; or (ii) if any of the
representations, warranties and covenants contained in Article VIII of this
Agreement shall be false or untrue in any material respect on the date of such
advance or issue, as if made on such date (unless such representation or
warranty relates only to an earlier date). Each request by the Borrower for an
additional Revolver Loan shall constitute a representation by the Borrower that
there is not at the time of such request an Event of Default or a Default, and
that all representations, warranties and covenants in Article VIII of this
Agreement are true and correct on and as of the date of each such applicable
Revolver Loan request.
ARTICLE VII
COVENANTS
The Borrower hereby covenants and agrees with the Banks as follows:
7A. Affirmative Covenants.
7A.1 Financial Statements. The Borrower will maintain a system of
accounting established and administered in accordance with GAAP. The Borrower
covenants that it will deliver to each Bank as soon as practicable and in any
event within 95 days after the end of each fiscal year, statements of income and
cash flows and a statement of stockholders' equity of the Borrower for such
year, and balance sheets of the Borrower, as at the end of such year, setting
forth in each case with respect to financial statements delivered as of any date
and for any period after August 31, 1998, in comparative form figures from the
preceding fiscal year, all in reasonable detail and, as to the statements,
certified by an authorized financial officer of the Borrower as presenting
fairly, in all material respects, the information contained therein, in
accordance with GAAP.
7A.2 Corporate Existence; Compliance with Laws.
(i) The Borrower will at all times preserve and keep in full force and
effect its corporate existence and its status as a corporation for U.S. federal
income tax purposes, and (b) the Borrower will at all times preserve and keep in
full force and effect all of its material rights and franchises.
(ii) The Borrower will at all times comply with all laws, regulations
and statutes (including without limitation any zoning or building ordinances or
code or Environmental Laws) applicable to it except for any failure to so comply
which, individually or in the aggregate, could not reasonably be expected to
have a Material Adverse Effect.
(iii) The Borrower will notify the Banks a reasonable time prior to the
adoption of any amendment to its Articles of Incorporation or Bylaws and will
include in that notice a reasonably detailed description of such amendment and
the intended effects thereof.
7A.3 Payment of Taxes and Claims. The Borrower will pay all taxes,
assessments and other governmental charges imposed upon it, or any of its
properties or assets or in respect of any of its franchises, business, income or
profits when the same become due and payable, and all claims (including without
limitation claims for labor, services, materials and supplies) for sums which
have become due and payable and which by law have or might become a Lien upon
any of its properties or assets; provided that no such tax, assessment, charge
or claim need be paid if it is being contested in good faith by appropriate
proceedings promptly initiated and diligently
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conducted and if such reserves or other appropriate provision, if any, as shall
be required by GAAP shall have been made therefor and be adequate in the good
faith judgment of the Board of Directors of the Borrower.
7A.4 Compliance with ERISA. The Borrower will comply in all material
respects with the provisions of ERISA and the Code applicable to the Borrower
and its employee benefit programs.
7A.5 Maintenance and Sufficiency of Properties. The Borrower will
maintain or cause to be maintained in good repair, working order and condition,
ordinary wear and tear excepted, all properties used in the Business of the
Borrower and from time to time will make or cause to be made all appropriate
repairs, renewals and replacements thereof, all to the extent necessary to avoid
a Material Adverse Effect.
7A.6 Insurance.
(i) The Borrower will, at its expense, at all times maintain, or cause
to be maintained, with financially sound and reputable insurers, insurance with
respect to its properties and business with coverages comparable to those
generally carried by companies of similar size that conduct the same or similar
business and have similar properties in the same general areas in which the
Borrower conducts its business; provided, however, that the Borrower may
maintain a system of self-insurance in an amount not exceeding an amount as is
customary for companies with established reputations engaged in the same or
similar business and owning and operating similar properties.
(ii) The Borrower will pay as and when the same become due and payable
the premiums for all insurance policies that the Borrower is required to
maintain hereunder.
7A.7 Environmental Laws. The Borrower will:
(i) comply with all applicable Environmental Laws and any permit,
license, or approval required under any Environmental Law, except for failures
to so comply which could not reasonably be expected to have a Material Adverse
Effect;
(ii) store, use, release, or dispose of any Hazardous Substance at any
property owned or leased by the Borrower in a manner which could not reasonably
be expected to have a Material Adverse Effect;
(iii) avoid committing any act or omission which would cause any Lien
to be asserted against any property owned by the Borrower pursuant to any
Environmental Law, except where such Lien could not reasonably be expected to
have a Material Adverse Effect; and
(iv) use, handle or store any propane in compliance, in all material
respects, with all applicable laws.
7A.8 After-Acquired Property. From and after the date of the Closing,
the Borrower will execute and deliver such Supplemental Security Agreements,
execute and deliver such instruments and agreements and execute and cause to be
duly recorded, published, registered or filed in the appropriate jurisdictions
such Financing Statements, as shall be necessary to grant to the Banks a valid,
perfected, first priority security interest in any Collateral acquired by the
Borrower after the Closing Date, to the extent such asset would have been
included in the Collateral granted at the Closing Date had the Borrower owned
such asset as of the Closing Date. The Borrower will pay or cause to be paid all
taxes, fees and other governmental charges in connection with the execution,
delivery, recording, publishing, registration and filing of such documents and
instruments in such places.
7A.9 Further Assurances. At any time and from time to time promptly,
the Borrower shall, at its expense, execute and deliver to each Bank and the
Agents such instruments and documents, and take such further action, as the
holders of the Notes may from time to time reasonably request, in order to
further carry out the intent and purpose of this Agreement and the other Loan
Documents and to establish, perfect, preserve and protect the rights, interests
and remedies created, or intended to be created, in favor of the Banks, and
including, without limitation, the execution, delivery, recordation and filing
of Financing Statements and continuation statements under the Uniform Commercial
Code of any applicable jurisdiction.
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7A.10 Books and Accounts. The Borrower will maintain proper books of
record and account in which full, true and proper entries shall be made of its
transactions and set aside on its books from its earnings for each fiscal year
all such proper reserves as in each case shall be required in accordance with
GAAP.
7A.11 Minimum Working Capital. Borrower will maintain at all times
during each fiscal year a minimum Working Capital (as determined in accordance
with GAAP) of $500,000.
7B. Xxxxxxxx Xxxxxxxxx.
0X.0 Xxxxxxxxxxxx. The Borrower will not create, incur, assume, or
otherwise become directly or indirectly liable with respect to, any
Indebtedness, except:
(i) the Borrower may become and remain liable with respect to
Indebtedness incurred by the Borrower under the Revolver Facility and any
Indebtedness incurred for such purpose which replaces, extends, renews, refunds
or refinances all of such Indebtedness; provided that the sum of the aggregate
principal amount of Indebtedness permitted under this clause (i) plus clause
(ii) of Section 7B.2 of the Operating Partnership Credit Agreement shall not at
any time exceed the lesser of $20,000,000 or the aggregate commitments in
respect of Working Capital Loans described in Section 10.1 of the Operating
Partnership Credit Agreement, as amended from time to time; and
(ii) the Borrower may become and remain liable with respect to
Indebtedness arising from the honoring by a bank or other financial institution
of a check, draft or similar instrument drawn against insufficient funds in the
ordinary course of business, provided that such Indebtedness is extinguished
within 2 Business Days of its incurrence;
7B.2 Liens. The Borrower will not create, assume, incur or suffer to
exist any Lien upon or with respect to any of its properties or assets, whether
now owned or hereafter acquired, or any income or profits therefrom except:
(i) Liens existing on the Closing Date hereof on the property and
assets of the Borrower as described in Schedule 7B.2;
(ii) Liens for taxes, assessments or other governmental charges the
payment of which is not yet due and payable or the validity of which is being
contested in good faith;
(iii) attachment or judgment Liens not giving rise to an Event of
Default and with respect to which the underlying action has been appealed or is
being contested in good faith;
(iv) Liens of lessors, landlords, carriers, vendors, mechanics,
materialmen, warehousemen, repairmen and other like Liens incurred in the
ordinary course of business the payment of which is not yet due or which is
being contested in good faith, in each case not incurred or made in connection
with the borrowing of money, the obtaining of advances or credit or the payment
of the deferred purchase price of property, provided that such Liens do not
materially interfere with the conduct of the Business of the Borrower taken as a
whole;
(v) Liens (other than any Lien imposed by ERISA) incurred and pledges
and deposits made in the ordinary course of business (a) in connection with
workers' compensation, unemployment insurance, old age pensions, retiree health
benefits and other types of social security, or (b) to secure (or to obtain
letters of credit that do not constitute Indebtedness and that secure) the
performance of tenders, statutory obligations, surety and appeal bonds, bids,
leases, performance bonds, contracts and other similar obligations, in each case
not incurred or made in connection with the borrowing of money or the obtaining
of advances or credit provided that such Liens do not materially interfere with
the conduct of the business of the Borrower taken as a whole; and
(vi) Liens created by the Security Agreement securing Indebtedness
evidenced by the Notes.
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7B.3 Consolidation, Merger, Sale of Assets. The Borrower will not,
directly or indirectly, consolidate with or merge into any other Person or
permit any other Person to consolidate with or merge into it.
7B.4 Dividends. The Borrower will not pay or distribute dividends of
any type (cash, stock or otherwise) to its sole shareholder, Heritage Operating,
L.P., in the aggregate during any fiscal year of Borrower in excess of
Borrower's Net Income (determined in accordance with GAAP) for the immediately
preceding fiscal year.
7B.5 Subsidiaries. The Borrower will not create or establish any new or
additional Subsidiaries without the prior written consent of the Banks.
ARTICLE VIII
REPRESENTATIONS, COVENANTS AND WARRANTIES
The Borrower represents, covenants and warrants as follows:
8.1 Organization. The Borrower is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware and has
all requisite corporate power and authority to own and operate its properties
(including without limitation the assets owned and operated by it), to conduct
its business, to enter into this Agreement and the other Loan Documents to which
it is a party and to carry out the terms of this Agreement, the Notes and such
other Loan Documents.
8.2 Qualification. The Borrower is duly qualified or registered and is
in good standing as a foreign corporation for the transaction of business in the
states and to the extent listed in Schedule 8.2, and, except as reflected on
Schedule 8.2, on the Closing Date there are no other jurisdictions in which the
nature of their respective activities or the character of the properties they
own, lease or use makes such qualification or registration necessary and in
which the failure so to qualify or to be so registered would have a Material
Adverse Effect. The Borrower has taken all necessary corporate action to
authorize the execution, delivery and performance by it of this Agreement and
the other Loan Documents to which it is a party. The Borrower has duly executed
and delivered each of this Agreement and the other Loan Documents to which it is
a party, and each of such documents and agreements and the Notes and the
Security Agreement constitute the legal, valid and binding obligation of the
Borrower enforceable against it in accordance with its terms, except as such
enforceability may be limited by bankruptcy, insolvency, moratorium or similar
laws affecting creditors' rights generally and general principles of equity
(regardless of whether such enforceability is considered in a proceeding in
equity or at law).
8.3 Actions Pending. There is no action, suit, investigation or
proceeding pending or, to the knowledge of the Borrower, threatened against the
Borrower, or any properties or rights of the Borrower, by or before any court,
arbitrator or administrative or governmental body (i) which questions the
validity or enforceability of this Agreement, the Notes or any other Loan
Document or any action to be taken pursuant to this Agreement, the Notes or any
other Loan Document or (ii) which could reasonably be expected to result in a
Material Adverse Effect.
8.4 Changes. Except as contemplated by this Agreement, the Notes or the
other Loan Documents, (i) the Borrower has not incurred any material liabilities
or obligations, direct or contingent, nor entered into any material transaction,
in each case other than in the ordinary course of business, and (ii) there has
not been any material adverse change in or effect on the business, assets,
financial condition or prospects of the Borrower.
8.5 Outstanding Indebtedness. Other than the Indebtedness represented
by the Notes, the Borrower has no outstanding Indebtedness except as set forth
on Schedule 8.5 and any such Indebtedness which is indicated in Schedule 8.5 to
be paid in full on the Closing Date will be paid in full at the time of Closing.
There exists no default under the provisions of any instrument evidencing such
Indebtedness or of any agreement relating thereto. On the Closing Date, no
instrument or agreement to which the Borrower is a party or by which the
Borrower or its properties is bound (other than this Agreement and other than as
indicated in Schedule 8.5) will contain any restriction on the incurrence by the
Borrower of additional Indebtedness.
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8.6 Taxes. On the Closing Date each of the Borrower will have filed all
federal, state and other income tax returns which, to the knowledge of the
Borrower, are required to be filed or will have properly filed for extensions of
time for the filing thereof, and has paid all taxes, assessments and other
governmental charges levied upon it or any of its properties, assets, income or
franchises as shown to be due on such returns, except those which are not past
due or are being contested in good faith. The Borrower is a corporation subject
to taxation with respect to its income or gross receipts under applicable state
laws and for U.S. federal income tax purposes.
8.7 Governmental Consent. No consent, approval or authorization of, or
declaration or filing with, any Governmental Authority is required for the valid
execution, delivery and performance of this Agreement, the Notes or the other
Loan Documents.
8.8 Use of Proceeds. None of the proceeds of the Loans will be used,
directly or indirectly, for the purpose, whether immediate, incidental or
ultimate, of purchasing or carrying any margin stock or for the purpose of
maintaining, reducing or retiring any indebtedness which was originally incurred
to purchase or carry any stock that is currently a margin stock or for any other
purpose which might constitute this transaction a "purpose credit" within the
meaning of such Regulation U or X. Neither the Borrower nor anyone acting on its
behalf has taken or will take any action which might cause this Agreement or the
Notes to violate Regulation U, Regulation T or any other regulation of the Board
of Governors of the Federal Reserve System or to violate the Exchange Act, in
each case as in effect now or as the same may hereafter be in effect.
8.9 ERISA. The Borrower and its respective ERISA Affiliates is in
compliance in all material respects with the applicable provisions of ERISA and
the Code and the regulations and published interpretations thereunder. No ERISA
Event has occurred or is reasonably expected to occur that, when taken together
with all other such ERISA Events, could reasonably be expected to result in a
Material Adverse Effect. The present value of all benefit liabilities under each
Plan (based on those assumptions used for purposes of Statement of Financial
Accounting Standards No. 87) did not, as of the last annual valuation date
applicable thereto, exceed by more than $250,000 the fair market value of the
assets of such Plan, and the present value of all benefit liabilities of all
underfunded Plans (based on those assumptions used for purposes of Statement of
Financial Accounting Standards No. 87) did not, as of the last annual valuation
dates applicable thereto, exceed by more than $250,000 the fair market value of
the assets of all such underfunded Plans.
8.10 Environmental Compliance.
(i) Except where the failure to be in compliance could not present a
reasonable likelihood of having a Material Adverse Effect, as of the date hereof
the Borrower is in compliance with all Environmental Laws applicable to it and
to the Business or Assets. The Borrower is in compliance with all franchises,
grants, authorizations, permits, licenses, and approvals required under
Environmental Laws, except for any non-compliance or failure to obtain such
Permits which could not reasonably be expected to have a Material Adverse
Effect. The Borrower has caused Heritage to submit timely and complete
applications to renew any expired or expiring Permits required pursuant to any
Environmental Law, except for any non-compliance or failure to obtain such
permits which could not reasonably be expected to have a Material Adverse
Effect. All reports, documents, or other submissions required by Environmental
Laws to be submitted by the Borrower to any Governmental Authority or Person
have been filed by or on behalf of the Borrower, except where the failure to do
so would not present a reasonable likelihood of having a Material Adverse
Effect.
(ii) There is no Hazardous Substance present at any of the real
property currently owned or leased by the Borrower except to the extent that
such presence could not reasonably be expected to have a Material Adverse
Effect, and (b) to the knowledge of the Borrower, there was no Hazardous
Substance present at any of the real property formerly owned or leased by
Borrower during the period of ownership or leasing by such Person; and with
respect to such real property and subject to the same knowledge and temporal
qualifiers concerning Hazardous Substances with respect to formerly owned or
leased real properties, there has not occurred (x) any release, or to the
knowledge of the Borrower, any threatened release of a Hazardous Substance, or
(y) any discharge or, to the knowledge of the Borrower, any threatened discharge
of any Hazardous Substance into the ground, surface or navigable waters which
discharge or threatened discharge violates any federal, state, local or foreign
laws, rules or regulations concerning water pollution.
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(iii) The Borrower has not disposed of, transported, or arranged for
the transportation or disposal of any Hazardous Substance where such disposal,
transportation, or arrangement would give rise to liability pursuant to CERCLA
or any analogous state statute other than any such liabilities that could not
reasonably be expected to have a Material Adverse Effect.
(iv) Except as disclosed to the Banks in writing, (a) no Lien has been
asserted by any Governmental Authority or person resulting from the use, spill,
discharge, removal, or remediation of any Hazardous Substance with respect to
any real property currently owned or leased by Heritage or the Borrower, and (b)
to the knowledge of the Borrower, no such Lien was asserted with respect to any
of the real property formerly owned or leased by Borrower during the period of
ownership or leasing of the real property by such Person.
(v) (a) There are no underground storage tanks, asbestos-containing
materials, polychlorinated biphenyls, or urea formaldehyde insulation at any of
the real property currently owned or leased by the Borrower in violation of any
Environmental Law, and (b) to the knowledge of the Borrower, there were no
underground storage tanks, asbestos-containing materials, polychlorinated
biphenyls, or urea formaldehyde insulation at any of the real property formerly
owned or leased by Heritage in violation of any Environmental Law during the
period of ownership or leasing of such real property by such Person.
(vi) As of the date hereof, any propane is stored, used and handled by
the Borrower in compliance with all applicable Environmental Laws except for any
storage, use or handling of propane that could not reasonably be expected to
have a Material Adverse Effect.
8.11 Disclosure. This Agreement, the Notes, the other Loan Documents,
and any other document, certificate or statement furnished to any Bank by or on
behalf of the Borrower in connection herewith, taken together, do not contain
any untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements contained herein and therein, in light
of the circumstances under which they were made, not misleading. There is no
fact known to the Borrower which has or in the future could reasonably be
expected to have (so far as the Borrower can now foresee) a Material Adverse
Effect and which has not been set forth in this Agreement or in the other
documents, certificates and statements furnished to each the Banks hereunder by
or on behalf of the Borrower.
8.12 Subsidiaries. Borrower's only Subsidiary (as such term is defined
in the Operating Partnership Credit Agreement) is Heritage Bi-State LLC, a
Delaware limited liability company.
ARTICLE IX
EVENTS OF DEFAULT
9.1 Acceleration. If any of the following conditions or events ("Events
of Default") shall occur and be continuing for any reason whatsoever (and
whether such occurrence shall be voluntary or involuntary or come about or be
effected by operation of law or otherwise):
(i) the Borrower defaults in the payment of any principal of any Note
when the same becomes due and payable, either by the terms thereof or otherwise
as herein provided; or
(ii) the Borrower defaults in the payment of any interest on any Note
for more than 5 days after the same becomes due and payable; or
(iii) the Borrower (whether as primary obligor or as guarantor or other
surety) defaults in any payment of principal of or interest on any other
Indebtedness other than the Notes, beyond any period of grace provided with
respect thereto, or the Borrower fails to perform or observe any other agreement
or term or condition contained in any agreement under which any such obligation
is created (or if any other event thereunder or under any such agreement shall
occur and be continuing) and the effect of such failure or other event is to
cause, or to permit the holder or holders of such Indebtedness (or a trustee on
behalf of such holder or holders) to cause, such obligation to become due or to
be repurchased prior to any stated maturity, provided that the aggregate amount
of all Indebtedness
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as to which such a default (payment or other) shall occur and be continuing or
such a failure or other event causing or permitting acceleration (or resale to
the Borrower) shall occur and be continuing exceeds $250,000; or
(iv) any representation or warranty made in any writing by or on behalf
of the Borrower, the Operating Partnership or the Master Partnership in this
Agreement, the Operating Partnership Credit Agreement, any other Loan Document
or any instrument furnished pursuant to this Agreement, the Operating
Partnership Credit Agreement or any Loan Document described or defined herein
shall prove to have been false or incorrect in any material respect on the date
as of which made; or
(v) the Borrower fails to perform, observe or comply with any agreement
contained in Article VII of this Agreement; or
(vi) the Borrower fails to perform or observe any other agreement, term
or condition contained in this Agreement or the other Loan Documents described
or defined herein and such failure shall not be remedied within 30 days after
one or more of the Banks obtain actual knowledge or notice thereof; or
(vii) the Borrower makes an assignment for the benefit of creditors or
is generally not paying its debts as such debts become due; or
(viii) any decree or order for relief in respect of the Borrower is
entered under any bankruptcy, reorganization, compromise, arrangement,
insolvency, readjustment of debt, dissolution or liquidation or similar law,
whether now or hereafter in effect (herein called the "Bankruptcy Law"), of any
jurisdiction; or
(ix) the Borrower petitions or applies to any tribunal for, or consents
to, the appointment of, or taking possession by, a trustee, receiver, custodian,
liquidator or similar official of the Borrower or of any substantial part of the
assets of the Borrower, or commences a voluntary case under the Bankruptcy Law
of the United States or any proceedings (other than proceedings for the
voluntary liquidation and dissolution of the Borrower) relating to the Borrower
under the Bankruptcy Law of any other jurisdiction; or
(x) any such petition or application is filed, or any such proceedings
are commenced, against the Borrower and the Borrower by any act indicates its
approval thereof, consents thereto or acquiesces therein, or an order, judgment
or decree is entered appointing any such trustee, receiver, custodian,
liquidator or similar official, or approving the petition in any such
proceedings, and such order, judgment or decree remains unstayed and in effect
for more than 30 days; or
(xi) a judgment or judgments for the payment of money in excess of
$250,000 in the aggregate (except to the extent covered by insurance as to which
the insurer has acknowledged in writing its obligation to cover in full) shall
be rendered against the Borrower and either (i) enforcement proceedings have
been commenced by any creditor upon such judgment or order or (ii) within 45
days after entry thereof, such judgment is not discharged or execution thereof
stayed pending appeal, or within 45 days after the expiration of any such stay,
such judgment is not discharged; or
(xii) any order, judgment or decree is entered in any proceedings
against the Borrower decreeing the dissolution of the Borrower and such order,
judgment or decree remains unstayed and in effect for more than 30 days or any
other event occurs that results in the termination, dissolution or winding up of
the Borrower; or
(xiii) any order, judgment or decree is entered in any proceedings
against the Borrower decreeing a split-up of the Borrower which requires the
divestiture of assets representing a substantial part, or the divestiture of the
stock of the Borrower (determined in accordance with GAAP) or which requires the
divestiture of assets, or stock of the Borrower for any of the three fiscal
years then most recently ended, and such order, judgment or decree shall not be
dismissed or execution thereon stayed pending appeal or review within 45 days
after entry thereof, or in the event of such a stay, such order, judgment or
decree shall not be dismissed within 45 days after such stay expires; or
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(xiv) the Security Agreement shall at any time, for any reason cease to
be in full force and effect or shall fail to constitute a valid, perfected first
priority Lien with respect to the Collateral subject to Liens permitted by the
Security Agreement or shall be declared to be null and void in whole or in any
material respect (i.e., relating to the validity or priority of the Liens
created by the Security Agreement or the remedies available thereunder) by the
judgment of any court or other Governmental Authority having jurisdiction in
respect thereof, or if the validity or the enforceability of the Security
Agreement shall be contested by or on behalf of the Borrower, or the Borrower
shall renounce the Security Agreement, or deny that it is bound by the terms of
the Security Agreement; or
(xv) an ERISA Event shall have occurred that, when taken together with
all other such ERISA Events that have occurred, could reasonably be expected to
result in liability of the Borrower and its ERISA Affiliates in an aggregate
amount exceeding $250,000; or
(xvi) an event of default under the Security Agreement has occurred and
is continuing; or
(xvii) an Event of Default or Noncompliance Event under the Operating
Partnership Credit Agreement (as defined herein) or any of the other Loan
Documents described or defined therein has occurred and is continuing or the
Commitments under the Operating Partnership Credit Agreement have been
terminated, cancelled or expired;
then, and in every such event, the Banks may declare the principal of and
interest accrued on all Loans as evidenced by the Notes from Borrower to be
immediately due and payable, without further or other notice of any kind, all of
which are expressly waived by the Borrower.
9.2 Remedies. Upon the occurrence of any Event of Default referred to
in (viii), (ix) or (x) of this Section 9.1 the Commitments shall immediately
terminate and the Notes and all other Indebtedness shall be immediately due and
payable, without further notice of any kind. Upon the occurrence of any other
Event of Default, and without prejudice to any right or remedy of the Banks
under this Agreement or the Loan Documents or under applicable Law of under any
other instrument or document delivered in connection herewith, the Banks may (i)
declare the Commitments terminated or (ii) declare the Commitments terminated
and declare the Notes and the other Indebtedness, or any part thereof, to be
forthwith due and payable, whereupon the Notes and the other Indebtedness, or
such portion as is designated by the Banks shall forthwith become due and
payable, without presentment, demand, notice or protest of any kind, all of
which are hereby expressly waived by the Borrower. No delay or omission on the
part of the Banks in exercising any power or right hereunder or under the Notes,
the Loan Documents or under applicable law shall impair such right or power or
be construed to be a waiver of any default or any acquiescence therein, nor
shall any single or partial exercise by the Banks of any such power or right
preclude other or further exercise thereof or the exercise of any other such
power or right by the Banks. In the event that all or part of the Indebtedness
becomes or is declared to be forthwith due and payable as herein provided, the
Banks shall have the right to set off the amount of all the Indebtedness of the
Borrower owing to the Banks against, and shall have, and is hereby granted by
the Borrower, a lien upon and security interest in, all property of the Borrower
in the Banks' possession at or subsequent to such default, regardless of the
capacity in which the Banks possess such property, including but not limited to
any balance or share of any deposit, collection or agency account. After Default
all proceeds received by the Banks may be applied to the Indebtedness in such
order of application and such proportions as the Banks, in their discretion,
shall choose. At any time after the occurrence of any Event of Default, the
Banks may, at their option, cause an audit of any and/or all of the books,
records and documents of the Borrower to be made by auditors satisfactory to the
Banks at the expense of the Borrower. The Banks also shall have, and may
exercise, each and every right and remedy granted to them for default under the
terms of the Security Agreement and the other Loan Documents.
9.3 Other Remedies. If any Event of Default or Default shall occur and
be continuing, the holder of any Note may proceed to protect and enforce its
rights under this Agreement and such Note by exercising such remedies as are
available to such holder in respect thereof under applicable law, either by suit
in equity or by action at law, or both, whether for specific performance of any
covenant or other agreement contained in this Agreement or in aid of the
exercise of any power granted in this Agreement. No remedy conferred in this
Agreement upon the holder of any Note is intended to be exclusive of any other
remedy, and each and every such remedy shall be cumulative and shall be in
addition to every other remedy conferred herein or now or hereafter existing at
law or in equity or by statute or otherwise.
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ARTICLE X
LOAN OPERATIONS
10.1 Interests in Loans/Commitments. The percentage interest of each
Bank in the Loans, and the Commitments, shall be computed based on the maximum
principal amount for each Bank as follows:
Maximum Revolver Percentage
Bank Loan Commitments Interest
----------- ---------------- ---------
BOk $ 400,000 40.00%
Mercantile $ 300,000 30.00%
Local $ 300,000 30.00%
---------- ------
Total $1,000,000 100.00%
========== ======
The foregoing percentage interests are referred to as the "Percentage Interests"
with respect to all or any portion of the Loans and the Commitments.
10.2 Administrative Agent's Authority to Act. Each of the Banks
appoints and authorizes BOk to act for the Banks as Administrative Agent in
connection with the transactions contemplated by this Agreement and the other
Loan Documents on the terms set forth herein. In acting hereunder, the
Administrative Agent is acting for the account of BOk to the extent of its
Percentage Interest and for the account of each other Bank to the extent of such
Bank's Percentage Interest, and all action in connection with the enforcement
of, or the exercise of any remedies (other than the Banks' rights of set-off as
provided herein or in any other Loan Document) in respect of the Loans and the
Indebtedness shall be taken by the Administrative Agent.
10.3 Borrower to Pay Administrative Agent. The Borrower shall be fully
protected in making all payments in respect of the Notes evidencing the
Indebtedness to the Administrative Agent, in relying upon consents,
modifications and amendments executed by the Administrative Agent purportedly on
the Banks' behalf, and in dealing with the Administrative Agent as herein
provided. Upon three (3) Business Days notice, the Administrative Agent may
charge the accounts of the Borrower, on the dates when the amounts thereof
become due and payable, with the amounts of the principal of and interest on the
Loans, commitment fees and all other fees and amounts owing under any Loan
Document.
10.4 Bank Operations for Advances.
10.4.1 Advances. On the funding date for each Loan, each Bank
shall advance to the Administrative Agent in immediately available
funds such Bank's Percentage Interest in the portion of a Loan advanced
on such funding date prior to 1:00 p.m. (Tulsa, Oklahoma time). If such
funds are not received at such time, but all applicable conditions set
forth in Article VI have been satisfied, each Bank authorizes and
requests the Administrative Agent to advance for the Bank's account,
pursuant to the terms hereof, the Bank's respective Percentage Interest
in such portion of such Loan and agrees to reimburse the Administrative
Agent in immediately available funds for the amount thereof prior to
3:00 p.m. (Tulsa, Oklahoma time) on the day any portion of such Loan is
advanced hereunder; provided, however, that the Administrative Agent is
not authorized to make any such advance for the account of any Bank who
has previously notified the Administrative Agent in writing that such
Bank will not be performing its obligations to make further advances
hereunder; and provided, further, that the Administrative Agent shall
be under no obligation to make any such advance.
10.4.2 Administrative Agent to Allocate Payments. All payments
of principal and interest in respect of the extensions of credit made
pursuant to this Agreement, as a matter of convenience, shall be made
by the Borrower to the Administrative Agent. The share of each Bank
shall be credited to such Bank by the Administrative Agent in
immediately available funds in such manner that the principal amount of
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the Loans constituting Indebtedness to be paid shall be paid
proportionately in accordance with the Banks' respective Percentage
Interests in such Loans, except as otherwise provided in this
Agreement. Under no circumstances shall any Bank be required to produce
or present its Notes as evidence of its interests in the Loans
constituting Indebtedness in any action or proceeding relating to the
Loans constituting Indebtedness.
10.4.3 Delinquent Banks; Nonperforming Banks. In the event
that any Bank fails to reimburse the Administrative Agent pursuant to
Section 10.4.1 for the Percentage Interest of such Bank (a "Delinquent
Bank") in any credit advanced by the Administrative Agent pursuant
hereto, overdue amounts (the "Delinquent Payment") due from the
Delinquent Bank to the Administrative Agent shall bear interest,
payable by the Delinquent Bank on demand, at a per annum rate equal to
(a) the Federal Funds Rate for the first three days overdue and (b) the
sum of two percentage points (2%) plus the Federal Funds Rate for any
longer period. Such interest shall be payable to the Administrative
Agent for its own account for the period commencing on the date of the
Delinquent Payment and ending on the date the Delinquent Bank
reimburses the Administrative Agent on account of the Delinquent
Payment (to the extent not paid by the Borrower as provided below) and
the accrued interest thereon (the "Delinquency Period"), whether
pursuant to the assignments referred to below or otherwise. Upon notice
by the Administrative Agent, the Borrower will pay to the
Administrative Agent the principal (but not the interest) portion of
the Delinquent Payment. During the Delinquency Period, in order to make
reimbursements for the Delinquent Payment and accrued interest thereon,
the Delinquent Bank shall be deemed to have assigned to the
Administrative Agent all interest and other payments made by the
Borrower under Articles II, III and IV hereof that would have
thereafter otherwise been payable under the Loan Documents to the
Delinquent Bank. During any other period in which any Bank is not
performing its obligations to extend credit under Article II hereof (a
"Nonperforming Bank"), the Nonperforming Bank shall be deemed to have
assigned to each Bank that is not a Nonperforming Bank (a "Performing
Bank") all principal and other payments made by the Borrower that would
have thereafter otherwise been payable thereunder to the Nonperforming
Bank. The Administrative Agent shall credit a portion of such payments
to each Performing Bank in an amount equal to the Percentage Interest
of such Performing Bank in an amount equal to the Percentage Interest
of such Performing Bank divided by one minus the Percentage Interest of
the Nonperforming Bank until the respective portions of the Loans owed
to all the Banks are the same as the Percentage Interests of the Banks
immediately prior to the failure of the Nonperforming Bank to perform
its obligations under Article II hereof. The foregoing provisions shall
be in addition to any other remedies the Agent, the Performing Banks or
the Borrower may have under law or equity against the Delinquent Bank
as a result of the Delinquent Payment or against the Nonperforming Bank
as a result of its failure to perform its obligations under Article II
hereof.
10.4 Sharing of Payments. Each Bank agrees that (i) if by exercising
any right of set-off or counterclaim or otherwise, it shall receive payment of
(a) a proportion of the aggregate amount due with respect to its Percentage
Interest in the Loans which is greater than (b) the proportion received by any
other Bank in respect of the aggregate amount due with respect to such other
Bank's Percentage Interest in the Loans and (ii) if such inequality shall
continue for more than 10 days, the Bank receiving such proportionately greater
payment shall purchase participations in the Percentage Interests in the Loans
held by the other Banks, and such other adjustments shall be made from time to
time (including rescission of such purchases of participations in the event the
unequal payment originally received is recovered from such Bank through
bankruptcy proceedings or otherwise), as may be required so that all such
payments of principal and interest with respect to the Loans held by the Banks
shall be shared by the Banks pro rata in accordance with their respective
Percentage Interests; provided, however, that this Section 10.4 shall not impair
the right of any Bank to exercise any right of set-off or counterclaim it may
have and to apply the amount subject to such exercise to the payment of
Indebtedness of Borrower other than Borrower's Indebtedness with respect to the
Loans. Each Bank that grants a participation in the Loans and Commitments to a
Participant shall require as a condition to the granting of such participation
that such Participant agree to share payments received in respect of the
Indebtedness as provided in this Section 10.4. The provisions of this Section
10.4 are for the sole and exclusive benefit of the Banks and no failure of any
Bank to comply with the terms hereof shall be available to either Borrower as a
defense to the payment of the Loans.
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10.5 Amendments, Consents, Waivers. Except as otherwise set forth
herein, the Administrative Agent may take or refrain from taking any action
under this Agreement or any other Loan Document, including giving its written
consent to any modification of or amendment to and waiving in writing compliance
with any covenant or condition in this Agreement or any other Loan Document or
any Default or Event of Default, all of which actions shall be binding upon all
of the Banks; provided, however, that:
(i) Without the written consent of the Banks owning at least two thirds
(2/3) of the Percentage Interests (other than Delinquent Banks during the
existence of a Delinquency Period so long as such Delinquent Bank is treated the
same as the other Banks with respect to any actions enumerated below), no
written modification of, amendment to, consent with respect to, waiver of
compliance with or waiver of a Default under, any of the Loan Documents shall be
made.
(ii) Without the written consent of such Banks as own 100% of the
Percentage Interests (other than Delinquent Banks during the existence of a
Delinquency Period so long as such Delinquent Bank is treated the same as the
other Banks with respect to any actions enumerated below):
(a) No reduction shall be made in (A) the amount of principal
of any of the Loans or (B) the interest rate on the Loans.
(b) No change shall be made in the stated time of payment of
all or any portion of any of the Loans or interest thereon and no
waiver shall be made of any Default under Section 9.1(i).
(c) No increase shall be made in the amount, or extension of
the term, of the Commitments beyond that provided for under Article II.
(d) No alteration shall be made of the Banks' rights of
set-off contained herein or in the other Loan Documents.
(e) No release of any Collateral shall be made (except upon
payment in full of the Loans evidenced by the Notes and termination of
the Commitments) without the written consent of the Banks).
(f) No amendment to or modification of this Section 10.5(ii)
shall be made.
10.6 Administrative Agent's Resignation. The Administrative Agent may
resign at any time by giving at least 30 days' prior written notice of its
intention to do so to each of the other Banks and the Borrower and upon the
appointment by the Required Banks of a successor Administrative Agent
satisfactory to the Borrower. If no successor Administrative Agent shall have
been so appointed and shall have accepted such appointment within 45 days after
the retiring Administrative Agent's giving of such notice of resignation, then
the retiring Administrative Agent may with the consent of the Borrower, which
shall not be unreasonably withheld, appoint a successor Administrative Agent
which shall be a bank or a trust company organized under the laws of the United
States of America or any state thereof and having a combined capital, surplus
and undivided profit of at least $50,000,000; provided, however, that any
successor Administrative Agent appointed under this sentence may be removed upon
the written request of the Required Banks, which request shall also appoint a
successor Administrative Agent satisfactory to the Borrower. Upon the
appointment of a new Administrative Agent hereunder, the term "Administrative
Agent" shall for all purposes of this Agreement thereafter mean such successor.
After any retiring Administrative Agent's resignation hereunder as
Administrative Agent, or the removal hereunder of any successor Administrative
Agent, the provisions of this Agreement shall continue to inure to the benefit
of such Administrative Agent as to any actions taken or omitted to be taken by
it while it was Administrative Agent under this Agreement.
10.7 Concerning the Agents.
10.7.1 Action in Good Faith. The Agents and their respective
officers, directors, employees and agents shall be under no liability
to any of the Banks or to any future holder of any interest in the
Indebtedness for any action or failure to act taken or suffered in good
faith, and any action or failure to act in accordance with an opinion
of its counsel shall conclusively be deemed to be in good faith. The
Agents
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shall in all cases be entitled to rely, and shall be fully protected in
relying, on instructions given to the Agents by the Required Holders of
the Notes evidencing the Indebtedness as provided in this Agreement.
10.7.2 No Implied Duties. The Agents shall have and may
exercise such powers as are specifically delegated to the Agents under
this Agreement or any other Loan Document together with all other
powers incidental thereto. The Agents shall have no implied duties to
any Person or any obligation to take any action under this Agreement or
any other Loan Document except for action specifically provided for in
this Agreement or any other Loan Document to be taken by the Agents.
Before taking any action under this Agreement or any other Loan
Document, the Agents may request an appropriate specific indemnity
satisfactory to it from each Bank in addition to the general indemnity
provided for in Section 10.10. Until the Agents have received such
specific indemnity, the Agents shall not be obligated to take (although
such Agent may in its sole discretion take) any such action under this
Agreement or any other Loan Document. Each Bank confirms that the
Agents do not have a fiduciary relationship to them under the Loan
Documents. The Borrower confirms that neither the Agents nor any other
Bank has a fiduciary relationship to it under the Loan Documents.
10.7.3 Validity. The Agents shall not be responsible to any
Bank or any future holder of any interest in the Loans and Indebtedness
(a) for the legality, validity, enforceability or effectiveness of this
Agreement or any other Loan Document, (b) for any recitals, reports,
representations, warranties or statements contained in or made in
connection with this Agreement or any other Loan Document, (c) for the
existence or value of any assets included in any security for the Loans
and Indebtedness, (d) for the effectiveness of any Lien purported to be
included in the Collateral, (e) for the specification or failure to
specify any particular assets to be included in the Collateral, or (f)
unless the Agents shall have failed to comply with Section 10.7.1, for
the perfection of the security interests in the Collateral.
10.7.4 Compliance. The Agents shall not be obligated to
ascertain or inquire as to the performance or observance of any of the
terms of this Agreement or any other Loan Document; and in connection
with any extension of credit under this Agreement or any other Loan
Document, the Agents shall be fully protected in relying on a
certificates of the Borrower as to the fulfillment by the Borrower of
any conditions to such extension of credit.
10.7.5 Employment Agents and Counsel. The Agents may execute
any of their respective duties as Agents under this Agreement or any
other Loan Document by or through employees, agents and
attorneys-in-fact and shall not be responsible to any of the Banks or
the Borrower for the default or misconduct of any such Agents or
attorneys-in-fact selected by the Agent acting in good faith. The
Agents shall be entitled to advice of counsel concerning all matters
pertaining to the agency hereby created and its duties hereunder or
under any other Loan Document.
10.7.6 Reliance on Documents and Counsel. The Agents shall be
entitled to rely, and shall be fully protected in relying, upon any
affidavit, certificate, cablegram, consent, instrument, letter, notice,
order, document, statement, telecopy, telegram, telex or teletype
message or writing reasonably believed in good faith by the Agents to
be genuine and correct and to have been signed, sent or made by the
Person in question, including any telephonic or oral statement made by
such Person, and, with respect to legal matters, upon an opinion or the
advice of counsel selected by such Agent.
10.7.7 Agents' Reimbursement. Each of the Banks severally
agrees to reimburse the Agents, in the amount of such Bank's Percentage
Interest, for any reasonable expenses not reimbursed by the Borrower
(without limiting the obligation of the Borrower to make such
reimbursement): (a) for which the Agents are entitled to reimbursement
by the Borrower under this Agreement or any other Loan Document, and
(b) after the occurrence of a Default, for any other reasonable
expenses incurred by the Agents on the Banks' behalf in connection with
the enforcement of the Banks' rights under this Agreement or any other
Loan Document.
10.8 Rights as a Bank. With respect to any Loan(s) or advance(s)
extended by it hereunder, each of the Agents shall have the same rights,
obligations and powers hereunder as any other Bank and may exercise such rights
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and powers as though it were not an Agent, and unless the context otherwise
specifies, the Agents shall be treated in their respective individual capacities
as though they were not the Agents hereunder. Without limiting the generality of
the foregoing, the Percentage Interest of each Agent shall be included in any
computations of Percentage Interests. Each Agent and its Affiliates may accept
deposits from, lend money to, act as trustee for and generally engage in any
kind of banking or trust business with the Borrower or any Affiliate of any of
them and any Person who may do business with or own an equity interest in the
Borrower or any Affiliate of any of them, all as if the Administrative Agent and
the Documentation Agent were not the Agents and without any duty to account
therefor to the other Banks.
10.9 Independent Credit Decision. Each of the Banks acknowledges that
it has independently and without reliance upon either of the Agents made such
Bank's own credit analysis and decision to enter into this Agreement and to make
the extensions of credit provided for hereunder. Each Bank represents to the
Agents that such Bank will continue to make its own independent credit and other
decisions in taking or not taking action under this Agreement or any other Loan
Document. Each Bank expressly acknowledges that neither the Agents nor any of
their respective officers, directors, employees, agents, attorneys-in-fact or
Affiliates has made any representations or warranties to such Bank, and no act
by either of the Agents taken under this Agreement or any other Loan Document,
including any review of the affairs of the Borrower, shall be deemed to
constitute any representation or warranty by either of the Agents. Except for
notices, reports and other documents expressly required to be furnished to each
Bank by the Administrative Agent under this Agreement or any other Loan
Document, the Agents shall not have any duty or responsibility to provide any
Bank with any credit or other information concerning the business, operations,
property, condition, financial or otherwise, or creditworthiness of the Borrower
which may come into the possession of either of the Agents or any of their
respective officers, directors, employees, agents, attorneys-in-fact or
Affiliates.
10.10 Indemnification. The holders of the Indebtedness shall indemnify
the Agents and their respective officers, directors, employees and Agents (to
the extent not reimbursed by the Borrower and without limiting the obligation of
the Borrower to do so), pro rata in accordance with their respective Percentage
Interests, from and against any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind whatsoever which may at any time be imposed on, incurred by or
asserted against either of the Agents or such Persons relating to or arising out
of this Agreement, any other Loan Document, the transactions contemplated hereby
or thereby, or any action taken or omitted by either of the Agents in connection
with any of the foregoing; provided, however, that the foregoing shall not
extend to actions or omissions which are taken by either or both of the Agents
with gross negligence or willful misconduct.
ARTICLE XI
MISCELLANEOUS
11.1 Notices. Unless otherwise provided herein, all notices, requests,
consents and demands shall be in writing and shall be either hand-delivered (by
courier or otherwise) or mailed by certified mail, postage prepaid, or sent by
facsimile transmission (confirmed as aforesaid) to the respective addresses
specified below, or, as to any party, to such other address as may be designated
by it in notice to the other parties in accordance with this Section 11.1:
If to the Borrower, to:
Heritage Service Corp.
0000 Xxxxx Xxxx Xxxxxx, Xxxxx 000
Xxxxx, Xxxxxxxx 00000
Attention: Chief Financial Officer
FAX: (000) 000-0000
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If to the Banks, to:
Bank of Oklahoma, National Association
P. O. Box 2300
Bank of Oklahoma Tower
Xxx Xxxxxxxx Xxxxxx
Xxxxx, Xxxxxxxx 00000
Attention: Corporate Department - 8th Floor
FAX: (000) 000-0000
The Administrative Agent is hereby designated and appointed and shall serve as
notice agent for all of the Banks insofar as notices hereunder are concerned and
notice to the Administrative Agent shall be deemed notice to each of the Banks
with the same force and effect as if each such Bank were individually notified
in accordance herewith. All notices, requests, consents and demands hereunder
will be effective when hand-delivered to the applicable notice address set forth
above or when mailed by certified mail, postage prepaid, addressed as aforesaid.
11.2 Place of Payment. All sums payable hereunder shall be paid in
immediately available funds to the Administrative Agent, at the Tulsa Office, or
at such other place as the Administrative Agent shall notify the Borrower in
writing. If any interest, principal or other payment falls due on a date other
than a Business Day, then (unless otherwise provided herein) such due date shall
be extended to the next succeeding Business Day, and such extension of time will
in such case be included in computing interest, if any, in connection with such
payment.
11.3 Survival of Agreements. All covenants, agreements, representations
and warranties made herein shall survive the execution and the delivery of Loan
Documents. All statements contained in any certificate or other instrument
delivered by the Borrower hereunder shall be deemed to constitute
representations and warranties by the Borrower.
11.4 Parties in Interest. All covenants, agreements and obligations
contained in this Agreement shall bind and inure to the benefit of the
respective successors and assigns of the parties hereto, except that the
Borrower may not assign their rights or obligations hereunder without the prior
written consent of the Banks.
11.5 Governing Law and Jurisdiction. This Agreement and the Notes shall
be deemed to have been made or incurred and delivered under the laws of the
State of Oklahoma and shall be construed and enforced in accordance with and
governed by the Laws of Oklahoma.
11.6 SUBMISSION TO JURISDICTION. THE BORROWER HEREBY CONSENTS TO THE
JURISDICTION OF ANY OF THE LOCAL, STATE, AND FEDERAL COURTS LOCATED WITHIN TULSA
COUNTY, OKLAHOMA, AND WAIVES ANY OBJECTION WHICH BORROWER MAY HAVE BASED ON
IMPROPER VENUE OR FORUM NON CONVENIENS TO THE CONDUCT OF ANY PROCEEDING IN ANY
SUCH COURT AND WAIVES PERSONAL SERVICE OF ANY AND ALL PROCESS UPON ANY OF THEM,
AND CONSENTS THAT ALL SUCH SERVICE OF PROCESS BE MADE BY MAIL OR MESSENGER
DIRECTED TO ANY OF THEM AT THE ADDRESS SET FORTH IN SUBSECTION 11.1 HEREOF AND
THAT SERVICE SO MADE SHALL BE DEEMED TO BE COMPLETED UPON THE EARLIER OF ACTUAL
RECEIPT OR THREE (3) BUSINESS DAYS AFTER MAILED OR DELIVERED BY MESSENGER.
11.7 Maximum Interest Rate. Regardless of any provision herein, the
Banks shall never be entitled to receive, collect or apply, as interest on the
Indebtedness any amount in excess of the maximum rate of interest permitted to
be charged by the Banks by applicable Law, and, in the event the Banks shall
ever receive, collect or apply, as interest, any such excess, such amount which
would be excessive interest shall be applied to other Indebtedness and then to
the reduction of principal; and, if all other Indebtedness and principal are
paid in full, then any remaining excess shall forthwith be paid to the Borrower.
11.8 No Waiver; Cumulative Remedies. No failure to exercise, and no
delay in exercising, on the part of the Banks, any right, power or privilege
hereunder or under any other Loan Document or applicable Law shall preclude any
other or further exercise thereof or the exercise of any other right, power or
privilege of the Banks. The rights and remedies herein provided are cumulative
and not exclusive of any other rights or remedies provided by any other
instrument or by law. No amendment, modification or waiver of any provision of
this Agreement or
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any other Loan Document shall be effective unless the same shall be in writing
and signed by the Banks. No notice to or demand on the Borrower in any case
shall entitle the Borrower to any other or further notice or demand in similar
or other circumstances.
11.9 Costs. The Borrower agrees to pay to the Banks on demand all
reasonable costs, fees and expenses (including without limitation reasonable
attorneys fees and legal expenses) incurred or accrued by the Banks in
connection with the negotiation, preparation, execution, delivery, filing,
recording, facilitation and administration of this Agreement, the Notes, the
Security Agreement and the other Loan Documents, or any amendment, waiver,
consent or modification thereto or thereof, or any enforcement thereof. The
Borrower further agrees that the fees and expenses of the Banks, including the
Agents, incurred in connection with the negotiation and preparation of this
Agreement and the other Loan Documents shall be paid regardless of whether or
not the transactions provided for in this Agreement are eventually closed and
regardless of whether or not any or all sums evidenced by the Notes are advanced
to the Borrower by the Banks.
11.10 WAIVER OF JURY. BORROWER FULLY, VOLUNTARILY AND EXPRESSLY WAIVES
ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND
ANY RIGHTS UNDER THIS AGREEMENT OR UNDER ANY AMENDMENT, INSTRUMENT, DOCUMENT OR
AGREEMENT DELIVERED (OR WHICH MAY IN THE FUTURE BE DELIVERED) IN CONNECTION
HEREWITH OR ARISING FROM ANY BANKING RELATIONSHIP EXISTING IN CONNECTION WITH
THIS AGREEMENT, THE NOTES OR THE SECURITY AGREEMENT. BORROWER AGREES THAT ANY
SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY.
Borrower acknowledges that it has been informed by the Agents that the
provisions of this Section 11.10 constitute a material inducement upon which
each of the Banks has relied and will rely in entering into this Agreement and
the other Loan Documents, and that Borrower has reviewed the provisions of this
Section 11.10 with its legal counsel. Any of the Banks, the Agents or the
Borrower may file an original counterpart or copy of this Section 11.10 with any
court or Tribunal as written evidence of the express consent of the Borrower,
the Agents and the Banks to the waiver of their rights to trial by jury.
11.11 Full Agreement. This Agreement and the other Loan Documents
contain the full agreement of the parties and supersede all negotiations and
agreements prior to the date hereof.
11.12 Headings. The article and section headings of this Agreement are
for convenience of reference only and shall not constitute a part of the text
hereof nor alter or otherwise affect the meaning hereof.
11.13 Severability. The unenforceability or invalidity as determined by
a court of competent jurisdiction, of any provision or provisions of this
Agreement shall not render unenforceable or invalid any other provision or
provisions hereof.
11.14 Exceptions to Covenants. The Borrower shall not be deemed to be
permitted to take any action or fail to take any action which is permitted as an
exception to any of the covenants contained herein or which is within the
permissible limits of any of the covenants contained herein if such action or
omission would result in the breach of any other covenant contained herein.
11.15 Conflict with Security Agreement. To the extent the terms and
provisions of any of the Security Agreement are in conflict with the terms and
provisions hereof, this Agreement shall be deemed controlling.
11.16 Existing Credit Agreement. This Agreement amends, modifies and
replaces the Existing Credit Agreement in all respects; provided, however, the
liens and priorities thereof granted in the Existing Credit Agreement and the
Security Agreement therein described and defined are hereby ratified, confirmed
and continued in full force and effect for all purposes.
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11.17 Counterparts. This Agreement may be executed in any number of
counterparts, all of which taken together shall constitute one and the same
instrument. Delivery of an executed counterpart of a signature page to this
Agreement by telecopier or facsimile shall be as effective as delivery of a
manually executed counterpart hereof.
[REMAINDER OF PAGE LEFT BLANK INTENTIONALLY]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered in Tulsa, Oklahoma, effective as of the day and year
first above written.
"Borrower"
HERITAGE SERVICE CORP., a Delaware
corporation
By
------------------------------------------
H. Xxxxxxx Xxxxxxxx, President
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"Banks"
BANK OF OKLAHOMA, NATIONAL ASSOCIATION
By
----------------------------------------
Xxxxxx X. Xxxxxx, Senior Vice President
BOk, individually as a Bank and as the
"Administrative Agent" for the Banks
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MERCANTILE BANK NATIONAL ASSOCIATION
By
----------------------------------------
Xxxxxxx X. Xxxxxx, Vice President
Mercantile, individually as a Bank and as
"Co-Agent" for the Banks
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LOCAL OKLAHOMA BANK, N.A.
By
----------------------------------------
Xxxxxxxxx X. Blue, Senior Vice President
"Local"
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SCHEDULE I
APPLICABLE RATE
"Applicable Margin". With respect to any Eurodollar Loan or with
respect to any Base Rate Loan, the rate of interest per annum determined as set
forth below:
(i) if the Leverage Ratio on the Financial Statement Delivery Date (as
defined in the Operating Partnership Credit Agreement) commencing such Margin
Period was less than 3.25 to 1, the Applicable Margin will be .75% for
Eurodollar Loans and zero for Base Rate Loans;
(ii) if the Leverage Ratio on the Financial Statement Delivery Date
commencing such Margin Period was equal to or greater than 3.25 to 1 but less
than 3.75 to 1, the Applicable Margin will be 1.00% for Eurodollar Loans and
zero for Base Rate Loans;
(iii) if the Leverage Ratio on the Financial Statement Delivery Date
commencing such Margin Period was equal to or greater than 3.75 to 1 but less
than 4.25 to 1, the Applicable Margin will be 1.25% for Eurodollar Loans and
zero for Base Rate Loans;
(iv) if the Leverage Ratio on the Financial Statement Delivery Date
commencing such Margin Period was equal to or greater than 4.25 to 1 but less
than 4.50 to 1, the Applicable Margin will be 1.375% for Eurodollar Loans and
zero for Base Rate Loans;
(v) if the Leverage Ratio on the Financial Statement Delivery Date
commencing such Margin Period was equal to or greater than 4.50 to 1 but less
than 4.75 to 1, the Applicable Margin will be 1.50% for Eurodollar Loans and
zero for Base Rate Loans; and
(vi) if the Leverage Ratio on the Financial Statement Delivery Date
commencing such Margin Period was equal to or greater than 4.75 to 1, the
Applicable Margin will be 1.75% for Eurodollar Loans and .125% for Base Rate
Loans.
Notwithstanding the foregoing, if any of the financial statements
required pursuant to Section 7A.1(i) of the Operating Partnership Credit
Agreement are not delivered within the time periods specified in Section 7A.1(i)
thereof, the Applicable Margin shall be the Applicable Margin set forth in
clause (vi) above until the date such statements are delivered.
"Applicable Rate" means, at any date, the sum of:
(i) (a) with respect to each Eurodollar Loan, the sum of the Applicable
Margin in effect on such date plus the Eurodollar Rate relating to such
Eurodollar Loan;
(b) with respect to each Base Rate Loan, the sum of the
Applicable Margin in effect on such date plus the Base Rate relating to
such Base Rate Loan; and
(ii) an additional two percentage points (2%) effective on the day the
Administrative Agent notifies the Borrower that the interest rates hereunder are
increasing as a result of the occurrence and continuance of an Event of Default
until such time as (A) such Event of Default is no longer continuing or (B) such
Event of Default is deemed no longer to exist, in each case pursuant to Article
IX hereof.
"Bank Legal Requirement" means any present or future requirement
imposed upon any of the Banks or the Borrower by any law, statute, rule,
regulation, directive, order, decree, guideline (or any interpretation thereof
by courts or of administrative bodies) of the United States of America, or any
jurisdiction in which any Eurodollar Office is located or any state or political
subdivision of any of the foregoing, or by any board, governmental or
administrative agency, central bank or monetary authority of the United States
of America, any jurisdiction in which any Eurodollar Office is located, or any
political subdivision of any of the foregoing. any such requirement imposed
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on any of the Banks not having the force of law shall be deemed to be a Bank
Legal Requirement if such Bank reasonably believes that compliance therewith is
in the best interest of such Bank.
"Eurodollars" means, with respect to any Bank, deposits of United
States Funds in a non-United States office or an international banking facility
of such Bank.
"Eurodollar Basic Rate" means, for any Eurodollar Interest Period, the
rate of interest at which Eurodollar deposits in an amount comparable to the
Percentage Interest of BOk in the portion of a Loan as to which a Eurodollar
Pricing Option has been elected and which have a term corresponding to such
Eurodollar Interest Period are offered to BOk by first class banks in the
inter-bank Eurodollar market for delivery in immediately available funds at a
Eurodollar Office on the first day of such Eurodollar Interest Period as
determined by BOk at approximately 10:00 a.m. (Tulsa, Oklahoma time) two Banking
Days prior to the date upon which such Eurodollar Interest Period is to commence
(which determination by BOk shall, in the absence of manifest error, be
conclusive).
"Eurodollar Interest Period" means any period, selected as provided in
this Schedule I, of one or three months, commencing on any Banking Day and
ending on the corresponding date in the subsequent calendar month so indicated
(or, if such subsequent calendar month has no corresponding date, on the last
day of such subsequent calendar month); provided, however, that subject to
Schedule I, if any Eurodollar Interest Period so selected would otherwise begin
or end on a date which is not a Banking Day, such Eurodollar Interest Period
shall instead begin or end, as the case may be, on the immediately preceding or
succeeding Banking Day as determined by the Administrative Agent in accordance
with the then current banking practice in the inter-bank Eurodollar market with
respect to Eurodollar deposits at the applicable Eurodollar Office, which
determination by the Administrative Agent shall, in the absence of manifest
error, be conclusive.
"Eurodollar Loan" means each portion of the Loan bearing interest
determined by reference to the Eurodollar Rate.
"Eurodollar Office" means such non-United States office or
international banking facility of any Bank as the Bank may from time to time
select.
"Eurodollar Pricing Options" means the options granted pursuant to
Article III to have the interest on any portion of a Loan computed on the basis
of a Eurodollar Rate.
"Eurodollar Rate" for any Eurodollar Interest Period means the rate,
rounded upward to the nearest 1/100%, obtained by dividing (a) the Eurodollar
Basic Rate for such Eurodollar Interest Period by (b) an amount equal to 1 minus
the Eurodollar Reserve Rate; provided, however, that if at any time during such
Eurodollar Interest Period the Eurodollar Reserve Rate applicable to any
outstanding Eurodollar Pricing Option changes, the Eurodollar Rate for such
Eurodollar Interest Period shall automatically be adjusted to reflect such
change, effective as of the date of such change.
"Eurodollar Reserve Rate" means the stated maximum rate (expressed as a
decimal) of all reserves (including any basic, supplemental, marginal or
emergency reserve or any reserve asset), if any, as from time to time in effect,
required by any Bank Legal Requirement to be maintained by any Bank against (a)
"Eurocurrency liabilities" as specified in Regulation D of the Board of
Governors of the Federal Reserve System applicable to Eurodollar Pricing
Options, (b) any other category of liabilities that includes Eurodollar deposits
by reference to which the interest rate on portions of a Loan subject to
Eurodollar Pricing Options is determined, (c) the principal amount of or
interest on any portion of the Loan subject to a Eurodollar Pricing Option or
(d) any other category of extensions of credit, or other assets, that includes
loan subject to a Eurodollar Pricing Option by a non-United States office of any
of the Banks to United States residents, in each case without the benefits of
credits for prorations, exceptions or offsets that may be available to a Lender.
"Federal Funds Rate" means, for any day, the rate equal to the weighted
average (rounded upward to the nearest 1/8%) of the rates on overnight federal
funds transactions with members of the Federal Reserve System arranged by
federal funds brokers, (i) as such weighted average is published for such day
(or, if such day is not a
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Banking Day, for the immediately preceding Banking Day) by the Federal Reserve
Bank of New York or (ii) if such rate is not so published for such Banking Day,
as determined by the Administrative Agent using any reasonable means of
determination. Each determination by the Administrative Agent of the Federal
Funds Rate shall, in the absence of manifest error, be conclusive.
"Funding Liability" means (a) any Eurodollar deposit which was used (or
deemed by Schedule I to have been used) to fund any portion of a Loan subject to
a Eurodollar Pricing Option, and (b) any portion of a Loan subject to a
Eurodollar Pricing Option funded (or deemed by Schedule I to have been funded)
with the proceeds of any such Eurodollar deposit.
"Leverage Ratio" shall have the meaning provided therefor in the
Operating Partnership Credit Agreement.
"Margin Period" means each period commencing on (and including) the
first day of any fiscal quarter of Heritage Operating, L.P., a Delaware limited
partnership ("HOP") and ending on (and including) the earlier of (i) the last
day of such fiscal quarter of HOP, or (ii) the Final Maturity Date.
Eurodollar Pricing Options.
Election of Eurodollar Pricing Options. Subject to all of the terms and
conditions of the Revolving Credit Agreement and so long as no Default exists,
the Borrower may from time to time, by irrevocable notice to the Administrative
Agent actually received not less than the Banking Day immediately prior to the
commencement of the Eurodollar Interest Period selected in such notice, elect to
have such portion of a Loan as the Borrower may specify in such notice accrue
and bear interest during the Eurodollar Interest Period so selected at the
Applicable Rate computed on the basis of the Eurodollar Rate. No such election
shall become effective:
(i) if, prior to the commencement of any such Eurodollar
Interest Period, the Administrative Agent determines that (i) the
electing or granting of the Eurodollar Pricing Option in question would
violate a Bank Legal Requirement, (ii) Eurodollar deposits in an amount
comparable to the principal amount of the Loan as to which such
Eurodollar Pricing Option has been elected and which have a term
corresponding to the proposed Eurodollar Interest Period are not
readily available in the inter-bank Eurodollar market, or (iii) by
reason of circumstances affecting the inter-bank Eurodollar market,
adequate and reasonable methods do not exist for ascertaining the
interest rate applicable to such deposits for the proposed Eurodollar
Interest Period; or
(ii) if any Bank shall have advised the Administrative Agent
by telephone or otherwise at or prior to noon (Tulsa, Oklahoma time) on
the immediately Banking Day prior to the commencement of such proposed
Eurodollar Interest Period (and shall have subsequently confirmed in
writing) that, after reasonable efforts to determine the availability
of such Eurodollar deposits, such Bank reasonably anticipates that
Eurodollar deposits in an amount equal to the Percentage Interest of
such Bank in the portion of such Loan as to which such Eurodollar
Pricing Option has been elected and which have a term corresponding to
the Eurodollar Interest Period in question will not be offered in the
Eurodollar market to such Bank at a rate of interest that does not
exceed the anticipated Eurodollar Basic Rate.
Notice to Banks and Borrower. The Administrative Agent will promptly
inform each Bank (by telephone or otherwise) of each notice received by it from
the Borrower pursuant hereto and of the Eurodollar Interest Period specified in
such notice. Upon determination by the Administrative Agent of the Eurodollar
Rate for such Eurodollar Interest Period or in the event such election shall not
become effective, the Administrative Agent will promptly notify the Borrower and
each Bank (by telephone or otherwise) of the Eurodollar Rate so determined or
why such election did not become effective, as the case may be.
Selection of Eurodollar Interest Periods. Eurodollar Interest Periods
shall be selected so that:
(i) the minimum portion of a Loan subject to any Eurodollar
Pricing Option shall be $100,000 and in integral multiple of $100,000
in excess thereof;
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(ii) no more than a total of two Eurodollar Pricing Options
shall be outstanding at any one time with respect to the Loans;
(iii) no Eurodollar Interest Period with respect to any part
of a Loan subject to a Eurodollar Pricing Option shall expire later
than its applicable Final Maturity Date.
Additional Interest. If any portion of a Loan subject to a Eurodollar
Pricing Option is repaid, or any Eurodollar Pricing Option is terminated for any
reason (including acceleration of maturity), on a date which is prior to the
last Banking Day of the Eurodollar Interest Period applicable to such Eurodollar
Pricing Option, the Borrower will pay to the Administrative Agent for the
account of each Bank in accordance with such Bank's Percentage Interest, in
addition to any amounts of interest otherwise payable hereunder, an amount equal
to the present value (calculated in accordance herewith) of interest for the
unexpired portion of such Eurodollar Interest Period on the portion of such Loan
so repaid, or as to which a Eurodollar Pricing Option was so terminated, at a
per annum rate equal to the excess, if any, of (a) the rate applicable to such
Eurodollar Pricing Option minus, (b) the lowest rate of interest obtainable by
the Administrative Agent upon the purchase of debt securities customarily issued
by the Treasury of the United States of America which have a maturity date
approximating the last Banking Day of such Eurodollar Interest Period. The
present value of such additional interest shall be calculated by discounting the
amount of such interest for each day in the unexpired portion of such Eurodollar
Interest Period from such day to the date of such repayment or termination at a
per annum interest rate equal to the interest rate determined pursuant to clause
(b) of the preceding sentence, and by adding all such amounts for all such days
during such period. The determination by the Administrative Agent of such amount
of interest shall, in the absence of manifest error, be conclusive. For purposes
hereof, if any portion of a Loan which was to have been subject to a Eurodollar
Pricing Option is not outstanding on the first day of the Eurodollar Interest
Period applicable to such Eurodollar Pricing Option other than for reasons
described above, the Borrower shall be deemed to have terminated such Eurodollar
Pricing Option.
Violation of Bank Legal Requirements. If any Bank Legal Requirement
shall prevent any Bank from funding or maintaining through the purchase of
deposits in the interbank Eurodollar market any portion of a Loan subject to a
Eurodollar Pricing Option or otherwise from giving effect to such Bank's
obligations as contemplated hereby, (a) the Administrative Agent may by notice
to the Borrower terminate all of the affected Eurodollar Pricing Options, (b)
the portion of such Loan subject to such terminated Eurodollar Pricing Options
shall immediately bear interest thereafter at the Applicable Rate computed on
the basis of the Base Rate and (c) the Borrower shall make any payment required
hereby.
Funding Procedure. The Banks may fund any portion of a Loan subject to
a Eurodollar Pricing Option out of any funds available to the Banks. Regardless
of the source of the funds actually used by any of the Banks to fund any portion
of such Loan subject to a Eurodollar Pricing Option, however, all amounts
payable hereunder, including the interest rate applicable to any such portion of
the Loan and the amounts payable hereunder, shall be computed as if each Bank
had actually funded such Bank's Percentage Interest in such portion of such Loan
through the purchase of deposits in such amount of the type by which the
Eurodollar Basic Rate was determined with a maturity the same as the applicable
Eurodollar Interest Period relating thereto and through the transfer of such
deposits from an office of the Bank having the same location as the applicable
Eurodollar Office to one of such Bank's offices in the United States of America.
Reserve Requirements. If any Bank Legal Requirement shall (a) impose,
modify, increase or deem applicable any insurance assessment, reserve, special
deposit or similar requirement against any Funding Liability, (b) impose,
modify, increase or deem applicable any other requirement or condition with
respect to any Funding Liability, or (c) change the basis of taxation of Funding
Liabilities or payments in respect (other than changes in the rate of taxes
measured by the overall net income of such Bank) and the effect of any of the
foregoing shall be to increase the cost to any Bank of issuing, making, funding
or maintaining its respective Percentage Interest in any portion of a Loan
subject to a Eurodollar Pricing Option, to reduce the amounts received or
receivable by such Bank under this Agreement or to require such Bank to make any
payment or forego any amounts otherwise payable to such Bank under this
Agreement, then, within 15 days after the receipt by the Borrower of a
certificate from such Bank setting forth why it is claiming compensation
hereunder and computations (in reasonable detail) of the amount
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thereof, the Borrower shall pay to the Administrative Agent for the account of
such Bank such additional amounts as are specified by such Bank in such
certificate as sufficient to compensate such Bank for such increased cost or
such reduction; provided, however, that the foregoing provisions shall not apply
to any Tax or to any reserves which are included in computing the Eurodollar
Reserve Rate. The determination by such Bank of the amount of such costs shall,
in the absence of manifest error, be conclusive.
Taxes. All payments of the Indebtedness shall be made without set-off
or counterclaim and free and clear of any deductions, including deductions for
Taxes, unless the Borrower is required by law to make such deductions. If (a)
any Bank shall be subject to any Tax with respect to any payment of the
Indebtedness or its obligations hereunder or (b) the Borrower shall be required
to withhold or deduct any Tax on any payment on the Indebtedness, within 15 days
after the receipt by the Borrower of a certificate from such Bank setting forth
why it is claiming compensation hereunder and computations (in reasonable
detail) of the amount thereof, the Borrower shall pay to the Administrative
Agent for such Bank's account such additional amount as is necessary to enable
such Bank to receive the amount of Tax so imposed on the Bank's obligations
hereunder or the full amount of all payments which it would have received on the
Indebtedness (including amounts required to be paid pursuant to this Schedule I)
in the absence of such Tax, as the case may be. Whenever Taxes must be withheld
by the Borrower with respect to any payments of the Indebtedness, the Borrower
shall promptly furnish to the Administrative Agent for the account of the
applicable Bank official receipts (to the extent that the relevant governmental
authority delivers such receipts) evidencing payment of any such Taxes so
withheld. If the Borrower fails to pay any such Taxes when due or fails to remit
to the Administrative Agent for the account of the applicable Bank the required
receipts evidencing payment of any such Taxes so withheld or deducted, the
Borrower shall indemnify the affected Bank for any incremental Taxes and
interest or penalties that may become payable by such Bank as a result of any
such failure. The determination by such Bank of the amount of such Tax and the
basis therefor shall, in the absence of manifest error, be conclusive.
Capital Adequacy. If any Bank shall determine that compliance by such
Bank with any Bank Legal Requirement regarding capital adequacy of banks or bank
holding companies has or would have the effect of reducing the rate of return on
the capital of such Bank and its Affiliates as a consequence of such Bank's
commitment to make the extensions of credit contemplated hereby, or such Bank's
maintenance of the extensions of credit contemplated hereby, to a level below
that which such Bank could have achieved but for such compliance (taking into
consideration the policies of such Bank and its Affiliates with respect to
capital adequacy immediately before such compliance and assuming that the
capital of such Bank and its Affiliates was fully utilized prior to such
compliance) by an amount deemed by such Bank to be material, then, within 15
days after the receipt by the Borrower of a certificate from such Bank setting
forth why it is claiming compensation hereunder and computations (in reasonable
detail) of the amount thereof, the Borrower shall pay to the Administrative
Agent for the account of such Bank such additional amounts as shall be
sufficient to compensate such Bank for such reduced return. The determination by
such Bank of the amount to be paid to it and the basis for computation thereof
shall, in the absence of manifest error, be conclusive. In determining such
amount, such Bank may use any reasonable averaging, allocation and attribution
methods.
Regulatory Changes. If any Bank shall determine that (a) any change in
any Bank Legal Requirement (including any new Bank Legal Requirement) after the
date hereof shall directly or indirectly (i) reduce the amount of any sum
received or receivable by such Bank with respect to a Loan or the return to be
earned by such Bank on such Loan, (ii) impose a cost on such Bank or any
Affiliate of such Bank that is attributable to the making or maintaining of, or
such Bank's commitment to make, its portion of such Loan, or (iii) require such
Bank or any Affiliate of such Bank to make any payment on, or calculated by
reference to, the gross amount of any amount received by such Bank under any
Credit Document, and (b) such reduction, increased cost or payment shall not be
fully compensated for by an adjustment in the Applicable Rate, then, within 15
days after the receipt by the Borrower of a certificate from such Bank setting
forth why it is claiming compensation hereunder and computations (in reasonable
detail) of the amount thereof, the Borrower shall pay to such Bank such
additional amounts as such Bank determines will, together with any adjustment in
the Applicable Rate, fully compensate for such reduction, increased cost or
payment. The determination by such Bank of the amount to be paid to it and the
basis for computation thereof hereunder shall, in the absence of manifest error,
be conclusive. In determining such amount, such Bank may use any reasonable
averaging and attribution methods.
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