EXHIBIT 10.9
CREDIT AGREEMENT
DATED JUNE 3, 2004
BY AND BETWEEN
BRADFORD RESOURCES, LTD.
AND
CITIZENS BANK OF PENNSYLVANIA
TABLE OF CONTENTS
ARTICLE I. DEFINITIONS AND INTERPRETATIONS...................................1
Section 1.01 Defined Terms and Interpretations.......................1
Section 1.02 Accounting Matters; Changes in GAAP.....................1
Section 1.03 Conflict in Loan Documents..............................1
Section 1.04 Legal Representation of Parties.........................1
ARTICLE II. THE CREDIT FACILITY..............................................2
Section 2.01 The Standby Term Loan...................................2
Section 2.02 Borrowing Procedures....................................2
Section 2.03 Standby Term Loan Note..................................3
Section 2.04 Repayment of the Term Loan..............................3
Section 2.05 Continuation and Conversion Elections...................3
Section 2.06 Repayments, Prepayments, and Interest...................4
Section 2.07 Payments to the Lender..................................5
Section 2.08 Lender's Records........................................6
ARTICLE III. INTEREST AND GENERAL LOAN PROVISIONS............................6
Section 3.01 Interest................................................6
Section 3.02 Illegality; Suspension of LIBOR Rate Loans..............7
Section 3.03 Indemnities.............................................8
Section 3.04 Increased Costs.........................................9
Section 3.05 Increased Capital Costs.................................9
Section 3.06 Taxes...................................................9
Section 3.07 Survival...............................................10
Section 3.08 Security...............................................10
ARTICLE IV. CONDITIONS OF LENDING...........................................10
Section 4.01 Initial Conditions.....................................10
Section 4.02 Subsequent Conditions..................................11
ARTICLE V. REPRESENTATIONS AND WARRANTIES...................................11
Section 5.01 Organization, Subsidiaries and Authority...............11
Section 5.02 Consent................................................12
Section 5.03 Litigation.............................................12
Section 5.04 Financial Statements; Solvency.........................13
Section 5.05 Ownership and Management...............................13
Section 5.06 Adverse Occurrences....................................13
Section 5.07 Indebtedness...........................................13
Section 5.08 Information............................................13
Section 5.09 Assets, Liens and Insurance............................13
Section 5.10 Contractual Obligations and Equipment Leases...........14
Section 5.11 Taxes..................................................14
Section 5.12 Margin Stock; Investment Company.......................14
Section 5.13 Intellectual Property Rights...........................15
Section 5.14 Environmental Laws.....................................15
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Section 5.15 Collateral Documents...................................15
Section 5.16 Bankruptcy; Insolvency.................................15
Section 5.17 Compliance with Laws...................................15
Section 5.18 Locations..............................................15
Section 5.19 ERISA Plans............................................15
Section 5.20 Contemporaneous Exchange...............................16
Section 5.21 Disclosure.............................................16
ARTICLE VI. AFFIRMATIVE COVENANTS...........................................16
Section 6.01 Use of Proceeds........................................16
Section 6.02 Financial Information and Compliance Certificates......17
Section 6.03 Books and Records; Visitation..........................19
Section 6.04 Compliance with Laws...................................19
Section 6.05 Notices................................................19
Section 6.06 Insurance..............................................21
Section 6.07 Taxes..................................................21
Section 6.08 Maintenance of Properties..............................21
Section 6.09 Maintenance of Existence...............................21
Section 6.10 Environmental Matters..................................21
Section 6.11 Reimbursable Costs and Expenses........................21
Section 6.12 Payment of Liabilities.................................22
Section 6.13 True Disclosures.......................................22
Section 6.14 Security Interests.....................................22
Section 6.15 Further Assurances.....................................23
ARTICLE VII. NEGATIVE COVENANTS.............................................23
Section 7.01 Financial Covenants....................................23
Section 7.02 Fundamental Changes....................................24
Section 7.03 Indebtedness...........................................24
Section 7.04 Investments, Acquisitions, Loans and Advances..........24
Section 7.05 Affiliated Transactions................................25
Section 7.06 Business and Accounting Changes........................25
Section 7.07 Insurance..............................................26
Section 7.08 Documents..............................................26
Section 7.09 Environmental Concern Materials........................26
Section 7.10 Disposition of Assets..................................26
Section 7.11 Guarantees.............................................26
Section 7.12 Rentals................................................26
Section 7.13 Changes in Organization Documents......................26
Section 7.14 The Equipment Lease....................................27
ARTICLE VIII. EVENTS OF DEFAULT.............................................27
Section 8.01 Failure to Make Payments...............................27
Section 8.02 Representations and Warranties.........................27
Section 8.03 Covenants and Agreements...............................27
Section 8.04 Defaults With Respect To Other Obligations.............27
Section 8.05 Insolvency and Other Related Events....................28
Section 8.06 Final Judgments........................................28
Section 8.07 Execution on Properties................................28
Section 8.08 ERISA Events...........................................28
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Section 8.09 Suspension of Operations...............................29
Section 8.10 The Collateral.........................................29
Section 8.11 Termination of Loan Documents..........................29
Section 8.12 Criminal Activities....................................29
Section 8.13 Change of Control......................................29
Section 8.14 The Equipment Lease....................................29
ARTICLE IX. REMEDIES........................................................29
Section 9.01 Rights of the Lender Upon Default......................29
Section 9.02 Cumulative Remedies....................................31
Section 9.03 Waiver of Right to Marshal.............................31
ARTICLE X. MISCELLANEOUS....................................................32
Section 10.01 Automatic Debits of Fees..............................32
Section 10.02 Rights in Property held by the Lender..................32
Section 10.03 Collateral.............................................32
Section 10.04 No Third Party Rights..................................32
Section 10.05 Construction...........................................32
Section 10.06 Waiver.................................................32
Section 10.07 Indemnification by the Borrower........................32
Section 10.08 Marshaling; Payments Set Aside.........................33
Section 10.09 Waiver of Jury Trial...................................33
Section 10.10 Consent to Jurisdiction................................34
Section 10.11 Survival...............................................34
Section 10.12 Disclosure of Information..............................34
Section 10.13 Notices................................................34
Section 10.14 Limitation of Liability................................35
Section 10.15 Sale and Participation.................................35
Section 10.16 Applicable Law.........................................35
Section 10.17 Binding Effect and Assignment..........................36
Section 10.18 Counterparts...........................................36
Section 10.19 Headings...............................................36
Section 10.20 Severability...........................................36
Section 10.21 Entire Agreement.......................................36
Section 10.22 Sealed Document........................................36
Section 10.23 USA Patriot Act Notification...........................36
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EXHIBITS
Exhibit "A" Notice of Borrowing
Exhibit "B" Notice of Continuation/Conversion
SCHEDULES
Schedule One Definitions
Schedule Two Conditions Precedent
Schedule 5.01 Organization, Subsidiaries and Authority
Schedule 5.05 Ownership and Management
Schedule 5.07 Existing Indebtedness
Schedule 5.09 Assets and Insurance
Schedule 5.10 Leased Equipment
Schedule 5.18 Locations
Schedule 5.19 ERISA Plans
Schedule 7.04 Investments
Schedule 7.05 Affiliate Transactions
Schedule 7.11 Guarantees
Schedule 7.12 Rentals
Schedule 10.13 Notices
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CREDIT AGREEMENT
THIS
CREDIT AGREEMENT (this "Agreement"), made effective as of the 3rd
day of June, 2004, is by and between BRADFORD RESOURCES, LTD., a
Pennsylvania
limited partnership (the "Borrower"), SUPERIOR WELL SERVICES, LTD., a
Pennsylvania limited partnership ("Superior")and CITIZENS BANK OF
PENNSYLVANIA,
a
Pennsylvania state chartered bank (the "Lender").
WITNESSETH:
WHEREAS, the Borrower has requested the Lender to make a standby term
loan available to it in the principal amount of $10,000,000, and the Lender is
willing to make such a standby term loan available to the Borrower upon the
terms and conditions set forth in this Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants contained herein, and intending to be legally bound hereby, the
Borrower and the Lender covenant and agree as follows:
ARTICLE I. DEFINITIONS AND INTERPRETATIONS
SECTION 1.01 DEFINED TERMS AND INTERPRETATIONS. In addition to other
words and terms defined elsewhere in this Agreement (including the preamble and
recitals), when used in this Agreement and in the exhibits and schedules to this
Agreement, the capitalized words and terms set forth in Schedule One attached
hereto and incorporated herein by reference thereto shall have the meanings set
forth in Part I of Schedule One unless otherwise defined herein or the context
otherwise clearly requires. In addition, the provisions of Part II of Schedule
One shall, unless otherwise specified in this Agreement, apply to the
interpretation of the words and terms used herein.
SECTION 1.02 ACCOUNTING MATTERS; CHANGES IN GAAP. (a) For purposes of
this Agreement and each of the other Loan Documents, all accounting and
financial terms used herein or therein shall be interpreted, all accounting
determinations and computations hereunder or thereunder shall be made, and all
financial statements required to be delivered hereunder or thereunder shall be
prepared, in accordance with GAAP.
(b) In the event that any accounting changes relating to GAAP
or other accounting principles and policies occur after the Closing Date and
such changes result in a change in the method of calculation of financial
covenants, standards or terms in this Agreement, then the Borrower and the
Lender agree to enter into negotiations in order to amend such provisions of
this Agreement to compensate for the effect of such changes so that the
restrictions, limitations and performance standards effectively imposed by such
covenants, as so amended, are substantially identical to the restrictions,
limitations and performance standards imposed by such covenants as in effect on
the Closing Date, provided, if the parties are unable to agree on an amendment
within a reasonable period of time, then calculation of compliance by the
Borrower with the covenants contained in this Agreement shall be determined in
accordance with GAAP as in effect immediately prior to such change.
SECTION 1.03 CONFLICT IN LOAN DOCUMENTS. If there is any conflict
between this Agreement and any other Loan Document, this Agreement and such
other Loan Document shall be interpreted and construed, if possible, so as to
avoid or minimize such conflict but, to the extent (and only to the extent) of
such conflict, this Agreement shall prevail and control.
SECTION 1.04 LEGAL REPRESENTATION OF PARTIES. This Agreement and the
other Loan Documents were negotiated by the parties with the benefit of legal
representation and any rule of construction or interpretation otherwise
requiring this Agreement or any other Loan Document to be
construed or interpreted against any party shall not apply to any construction
or interpretation hereof or thereof.
ARTICLE II. THE CREDIT FACILITY
SECTION 2.01 THE STANDBY TERM LOAN. (a) Subject to the terms and
conditions of this Agreement and in reliance upon the representations and
warranties of the Borrower contained in Article V, the Lender agrees to make a
standby term loan available to the Borrower on the Closing Date (the "Standby
Term Loan") in the aggregate principal amount not to exceed the Standby Term
Loan Commitment. Advances of the Standby Term Loan (each an "Advance") may be
made during the period (the "Standby Term Loan Period") commencing on the
Closing Date and ending on the earlier to occur of (i) the Borrower's draw of
the entire amount of the Standby Term Loan; or (ii) December 31, 2004. The
Standby Term Loan is a term loan that is non-revolving and the Borrower shall
not have the right to borrow, repay and reborrow under the Standby Term Loan.
SECTION 2.02 BORROWING PROCEDURES. (a) Requests for Advances. Each
request for an Advance (a "Request for Advance") shall be made by either (i)
delivery by the Borrower to the Lender of an irrevocable written notice in the
form of Exhibit "A" attached hereto signed by a Responsible Officer of the
Borrower (a "Notice of Borrowing"), or (ii) by telephonic notice to the Lender
(confirmed on the same day by a Notice of Borrowing delivered to the Lender),
together with copies of invoices relating to the equipment to be purchased by
the Borrower for which the Advance is requested and such other information as
may reasonably be requested by the Lender. Each Notice of Borrowing shall
constitute the representation and warranty of the Borrower to the Lender that on
the date of such request, and before and after giving effect to the application
of the Advance requested thereby, (i) all representations and warranties set
forth in Article V are true and correct in all material respects as though made
on the date of such request, and (ii) no Potential Default or Event of Default
shall have occurred and be continuing.
(b) Prime Rate Tranche Requests. By delivering a Notice of
Borrowing to the Lender or by telephonic notice to the Lender (confirmed on the
same day by a Notice of Borrowing delivered to the Lender), in each case on or
before 10:00 a.m. (prevailing time in Pittsburgh,
Pennsylvania) on the requested
Borrowing Date (which must be a Business Day), the Borrower may from time to
time irrevocably request that an Advance be made as a Prime Rate Tranche on the
requested Borrowing Date. On the terms and subject to the conditions of this
Agreement, each such Prime Rate Tranche shall be made available to the Borrower
on the requested Borrowing Date by deposit to the account of the Borrower with
the Lender or by wire transfer in accordance with written instructions as shall
have been delivered to the Lender by the Borrower prior to the making of the
requested Prime Rate Tranche.
(c) LIBOR Rate Tranche Requests. By delivering a Notice of
Borrowing to the Lender or by telephonic notice to the Lender (confirmed on the
same day by a Notice of Borrowing delivered to the Lender), in each case on or
before 10:00 a.m. (prevailing time in Pittsburgh,
Pennsylvania) on a Business
Day, the Borrower may from time to time irrevocably request, on not less than
two nor more than five (5) Business Days' notice, that an Advance be made as a
LIBOR Rate Tranche in a minimum amount of $500,000 and integral multiples of
$100,000 in excess of such amount and specifying the applicable Interest Period
which shall be one month if the Borrower fails to make such a specification. On
the terms and subject to the conditions of this Agreement, each such LIBOR Rate
Tranche shall be made available to the Borrower on the first day of the
applicable Interest Period by deposit to the account of the Borrower with the
Lender or by wire transfer in accordance with written instructions as shall have
been delivered to the Lender by the Borrower prior to the making of the
requested LIBOR Rate Tranche. After giving effect to all Advances outstanding,
there shall not be more than five (5) LIBOR Rate Tranches outstanding at any
time.
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SECTION 2.03 STANDBY TERM LOAN NOTE. The Standby Term Loan shall be
evidenced by the Standby Term Loan Note, appropriately completed, signed by the
Borrower and dated the Closing Date.
SECTION 2.04 REPAYMENT OF THE STANDBY TERM LOAN. Interest only shall be
payable from the Closing Date up to but not including January 1, 2005. Subject
to adjustment annually by the Lender in writing to the Borrower to take into
account Hedging Contracts in effect from time to time, commencing on January 1,
2005 and continuing on the first day of each consecutive month thereafter
through and including December 1, 2009, the Borrower shall pay to the Lender
equal and consecutive monthly installments of principal in an amount equal to
1/84th of the outstanding principal balance of the Standby Term Loan on January
1, 2005, and a final principal payment due and payable on the Standby Term Loan
Maturity Date in an amount equal to the then outstanding principal balance of
the Standby Term Loan; provided, during the period(s) that the Standby Term Loan
is classified as a LIBOR Rate Tranche, (i) the Standby Term Loan shall mature
and become payable in full on the last day of each Interest Period, and (ii)
subject to the provisions of Section 2.05(b) regarding continuation and
conversion of outstanding Tranches, upon such maturity, the Standby Term Loan
shall automatically be continued as a LIBOR Rate Tranche with an equal Interest
Period in an amount equal to the expiring LIBOR Rate Tranche LESS the principal
repayments made to the Lender during such the Interest Period applicable to the
expiring LIBOR Rate Tranche, provided, however, that no portion of the
outstanding principal amount of a LIBOR Rate Tranche may be continued as a LIBOR
Rate Tranche when any Event of Default has occurred and is continuing. If any
Event of Default has occurred and is continuing (if the Lender does not
otherwise elect to exercise any right to accelerate the Standby Term Loan it is
granted under this Agreement), the maturing LIBOR Rate Tranche shall
automatically be continued as a Prime Rate Tranche. Notwithstanding the
foregoing, the outstanding principal balance of the Standby Term Loan shall be
due and payable in full on the Standby Term Loan Maturity Date.
SECTION 2.05 CONTINUATION AND CONVERSION OF TRANCHES. (a) Subject to
the terms and conditions of this Section 2.05, all or a portion of the Standby
Term Loan may be continued or converted into one or more Tranches bearing
interest at the same or different Interest Rate Options as the Borrower may
elect from time to time pursuant to this Section 2.05.
(b) By delivering an irrevocable written notice of
continuation/conversion to the Lender in the form of Exhibit "B" attached hereto
(a "Notice of Continuation/Conversion") or by telephonic notice (confirmed on
the same day by a Notice of Continuation/Conversion delivered to the Lender),
the Borrower may irrevocably elect to convert an outstanding Tranche to a
Tranche bearing interest at a different Interest Rate Option or having a
different Interest Period, or continue on the last day of an Interest Period a
Tranche as a Tranche bearing interest at the same Interest Rate Option with a
similar Interest Period, subject to the following conditions:
(i) Each Notice of Conversion/Continuation or
telephonic notice thereof must be received by the Lender (A) not later
than 10:00 a.m. (prevailing time in Pittsburgh,
Pennsylvania) at least
two (2) Business Days in advance of the date of the requested
continuation/conversion (the "Continuation/Conversion Date") if the
Tranche is to be converted into or continued as a LIBOR Rate Tranche,
and (B) not later than 10:00 a.m. (prevailing time in Pittsburgh,
Pennsylvania) on the Continuation/Conversion Date if the Tranche is to
be converted into a Prime Rate Tranche;
(ii) A Prime Rate Tranche may be converted into a
LIBOR Rate Tranche at any time;
(iii) A LIBOR Rate Tranche may only be converted to a
Tranche bearing interest at a different Interest Rate Option or having
a different Interest Period at the end of the then applicable Interest
Period therefor;
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(iv) Any Tranche to be continued as, or converted
into, a LIBOR Rate Tranche must be in a minimum amount of $500,000 and
integral multiples of $100,000 in excess of such amount;
(v) No portion of a LIBOR Rate Tranche may be
converted to, or continued as, a LIBOR Rate Tranche when any Potential
Default or Event of Default has occurred and is continuing;
(vi) No portion of a LIBOR Rate Tranche may be
converted to a LIBOR Rate Tranche of a different duration if such LIBOR
Rate Tranche relates to any Hedging Obligations; and
(vii) There shall be no more than five (5) LIBOR Rate
Tranches outstanding at any time.
(c) If no Interest Rate Option is timely selected at the end
of any Interest Period for a LIBOR Rate Tranche, the Borrower shall be deemed to
have selected a Prime Rate Option for such Tranche. In the absence of a timely
delivery of a Notice of Continuation/Conversion with respect to any LIBOR Rate
Tranche, such Tranche shall, on the last day of the Interest Period relating to
such Tranche, automatically convert to a Prime Rate Tranche.
(d) Upon the occurrence and during the continuance of an Event
of Default, any outstanding LIBOR Rate Tranche shall be automatically converted
to a Prime Rate Tranche on the last day of the Interest Period relating thereto
ending during the continuance of such Event of Default.
SECTION 2.06 REPAYMENTS, PREPAYMENTS, AND INTEREST. (a) Repayments,
Continuations and Conversions. Unless demand has been made prior thereto, LIBOR
Rate Tranches shall mature and become payable in full on the last day of the
Interest Period relating to such LIBOR Rate Tranche. Upon maturity, a LIBOR Rate
Tranche may be continued for an additional Interest Period or may be converted
as permitted under Section 2.05.
(b) Voluntary Prepayment of LIBOR Rate Tranches. LIBOR Rate
Tranches may be prepaid upon the terms and conditions set forth herein. For
LIBOR Rate Tranches in connection with which the Borrower has or may incur
Hedging Obligations, additional obligations may be associated with prepayment,
in accordance with the terms and conditions of the applicable Hedging Contracts.
The Borrower shall give the Lender, no later than 10:00 a.m. (prevailing time in
Pittsburgh,
Pennsylvania) at least four (4) Business Days notice of any proposed
prepayment of any LIBOR Rate Tranche, specifying the proposed date of payment of
such LIBOR Rate Tranche, and the principal amount to be paid. Each partial
prepayment of the principal amount of a LIBOR Rate Tranche shall be in an
integral multiple of $500,000 and accompanied by the payment of all charges
outstanding on such LIBOR Rate Tranche and of all accrued interest on the
principal repaid to the date of payment. The Borrower acknowledges that
prepayment or acceleration of a LIBOR Rate Tranche during an Interest Period
shall result in the Lender incurring additional costs, expenses and/or
liabilities and that it is extremely difficult and impractical to ascertain the
extent of such costs, expenses and/or liabilities. Therefore, all full or
partial prepayments of LIBOR Rate Tranches shall be accompanied by, and the
Borrower hereby promises to pay, on each date a LIBOR Rate Tranche is prepaid or
the date all sums payable hereunder become due and payable, by acceleration or
otherwise, in addition to all other sums then owing, an amount (the "LIBOR Rate
Prepayment Fee") determined by the Lender pursuant to the following formula:
(i) the then current rate for United States Treasury
securities (bills on a discounted basis shall be converted to a bond
equivalent) with a maturity date closest to the end of the Interest
Period as to which prepayment is made, SUBTRACTED FROM
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(ii) the LIBOR Lending Rate plus the Applicable
Margin applicable to the LIBOR Rate Tranche being prepaid.
If the result of this calculation is zero or a negative number, then there shall
be no LIBOR Rate Prepayment Fee. If the result of this calculation is a positive
number, then the resulting percentage shall be multiplied by the amount of the
LIBOR Rate Tranche being prepaid, and the resulting amount shall be divided by
360, and multiplied by the number of days remaining in the Interest Period as to
which the prepayment is being made. Said amount shall be reduced to present
value calculated by using the referenced United States Treasury securities rate
and the number of days remaining on the Interest Period for the LIBOR Rate
Tranche being prepaid. The resulting amount of these calculations shall be the
LIBOR Rate Prepayment Fee.
(c) Voluntary Prepayment of Prime Rate Tranches. Prime Rate
Tranches may be prepaid at any time without premium or penalty.
SECTION 2.07 PAYMENTS TO THE LENDER. (a) All payments (including
prepayments) made by the Borrower under this Agreement, the Standby Term Loan
Note or any other Loan Document shall be made in Dollars and in immediately
available funds, without set-off, counterclaim, recoupment or other deduction of
any nature and without presentment, demand, protest or notice of any kind, all
of which are hereby expressly waived by the Borrower, and any action therefor
shall immediately accrue. Except as otherwise expressly provided herein, all
payments by the Borrower shall be made to the Lender at the Lender's Office no
later than 3:00 p.m. (prevailing time in Pittsburgh, Pennsylvania) on the date
specified herein. Any payment received by the Lender later than 3:00 p.m.
(prevailing time in Pittsburgh, Pennsylvania) shall be deemed to have been
received on the following Business Day and any applicable interest or fee shall
continue to accrue. Any payment required to be made by the Borrower to the
Lender under this Agreement or any other Loan Document may, at the Lender's
option, be deducted when due from any deposit or other account (general or
special, time or demand, provisional or final) of the Borrower with the Lender.
(b) So long as no Potential Default or Event of Default shall
have occurred and be continuing, payments matching specific scheduled payments
then due will be applied to those scheduled payments. As to each other payment
and all payments made after a Potential Default or Event of Default shall have
occurred and be continuing, the Borrower irrevocably agrees that the Lender
shall have the continuing exclusive right to apply any and all such payments
against such of the Obligations as the Lender may deem advisable in its sole
discretion.
(c) The Lender is authorized to, and at its sole election may,
on behalf of the Borrower, charge to the Standby Term Loan balance and cause to
be paid all fees, Reimbursable Costs and Expenses, charges, costs, interest and
principal (other than principal of the Standby Term Loan) owing by the Borrower
under this Agreement or any of the other Loan Documents if and to the extent the
Borrower fails to promptly pay any such amounts as and when due, but it is
expressly acknowledged and agreed that the Lender shall be under no obligation
to do any of the foregoing. At the Lender's option and to the extent permitted
by Law, any charges so made shall constitute part of the Standby Term Loan.
(d) Whenever any payment is due on a day other than a Business
Day, such payment shall be made on the following Business Day, and such
extension of time shall in such case be included in the computation of interest
or fees, as the case may be.
(e) If the Borrower fails to pay any installment of principal,
interest or other amount under this Agreement within ten (10) days of when due,
in addition to making payment of the installment then due, the Borrower shall
pay to the Lender a late charge in an amount equal to five percent (5.0%) of
such overdue installment.
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SECTION 2.08 LENDER'S RECORDS. The Lender is authorized to record in
its books and records the amount of all loans, advances, repayments, interest
due and paid, and all other charges, fees and expenses paid, or due, and the
like, in connection with this Agreement and the other Loan Documents, and,
except in the case of manifest error in posting or computation, such books and
records shall be presumptively true, correct and binding as to the amounts at
any time due to the Lender from the Borrower under this Agreement and the other
Loan Documents. Any failure so to record or any error in doing so shall not,
however, limit or otherwise affect the obligation of the Borrower hereunder to
pay any amount owing with respect to the Standby Term Loan.
ARTICLE III. INTEREST AND GENERAL LOAN PROVISIONS
SECTION 3.01 INTEREST. (a) The Standby Term Loan shall bear interest on
the outstanding principal amount thereof for each day until paid (whether by
demand, at stated maturity, by acceleration, or otherwise), as follows:
(i) Interest on the outstanding principal amount of
each LIBOR Rate Tranche shall accrue during the Interest Period
applicable thereto at a rate per annum equal to the sum of the LIBOR
Lending Rate for such Interest Period PLUS the Applicable Margin
thereto (the "LIBOR Rate Option"); and
(ii) Interest on the outstanding principal amount of
each Prime Rate Tranche shall accrue during the Interest Period
applicable thereto at a rate per annum equal to the sum of the Prime
Rate for such Interest Period PLUS the Applicable Margin thereto (the
"Prime Rate Option").
(b) If the Lender shall have determined that:
(i) US dollar deposits in the relevant amount and for
the relevant Interest Period are not available to the Lender in the
London interbank market;
(i) by reason of circumstances affecting the Lender
in the London interbank, adequate means do not exist for ascertaining
the LIBOR Rate applicable to LIBOR Rate Tranches of any duration; or
(iii) the LIBOR Rate no longer adequately reflects
the Lender's cost of funding the Tranches,
then, upon prior written notice from the Lender to the Borrower, the obligations
of the Lender to make or continue any Tranches as, or to convert any Tranches
into, LIBOR Rate Tranches shall forthwith be suspended until the Lender shall
notify the Borrower that the circumstances causing such suspension no longer
exist; until such notice is delivered, if at all, all Tranches made thereafter
shall be Prime Rate Tranches.
(c) Each determination of an interest rate by the Lender shall
be conclusive and binding on the Borrower in the absence of manifest error. At
the request of the Borrower, the Lender will deliver to the Borrower a statement
showing the quotations used by the Lender in determining any interest rate and
the resulting interest rate.
(d) Interest on the Standby Term Loan shall be calculated on
the basis of a 360-day year, counting the actual number of days elapsed in the
period during which it accrues. The Borrower shall pay interest on the Standby
Term Loan, in arrears, on each Interest Payment Date, on any date that the
Standby Term Loan is prepaid, at maturity (whether by demand, at stated
maturity, by acceleration, or otherwise), and, during the existence of any Event
of Default, on demand of the Lender. In computing
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interest on the Standby Term Loan, the borrowing date or the first day of an
Interest Period applicable to such Tranche or, with respect to a Prime Rate
Tranche being converted from a LIBOR Rate Tranche, the date of conversion of
such LIBOR Rate Tranche to a Prime Rate Tranche, as the case may be, shall be
included, and the date of payment of such Tranche or the expiration date of an
Interest Period applicable to such Tranche or, with respect to a Prime Rate
Tranche being converted to a LIBOR Rate Tranche, the date of conversion of such
Prime Rate Tranche to a LIBOR Rate Tranche, as the case may be, shall be
excluded, provided, that if a Tranche is repaid on the same day on which it is
made, one day's interest shall be paid on that Tranche.
(e) Notwithstanding anything to the contrary in this
Agreement, after the occurrence and during the continuance of an Event of
Default or after maturity (whether by demand, stated maturity or otherwise), the
Borrower shall pay interest (after as well as before entry of judgment thereon
to the extent permitted by law) at the following rates:
(i) LIBOR Rate Tranches shall bear interest at the
LIBOR Lending Rate PLUS the highest Applicable Margin for LIBOR Rate
Tranches PLUS three percent (3.0%), provided, however, that, on and
after the expiration of any Interest Period applicable to any LIBOR
Rate Tranche outstanding on the date of occurrence of such Event of
Default or acceleration, the principal amount of such Tranche shall,
during the continuation of such Event of Default or after acceleration,
bear interest at a rate per annum equal to the Prime Rate PLUS the
highest Applicable Margin for Prime Rate Tranches PLUS three percent
(3.0%)
(ii) Prime Rate Tranches shall bear interest at the
Prime Rate PLUS the highest Applicable Margin for Prime Rate Tranches
PLUS three percent (3.0%), and
(iii) All other Obligations shall bear interest at
the Prime Rate PLUS the highest Applicable Margin for Prime Rate
Tranches PLUS three percent (3.0%).
(f) If, at any time, any rate of interest payable hereunder
shall be deemed by any Authority to exceed the maximum rate of interest
permitted by applicable Law, then for such time as such rate would be deemed
excessive, its application shall be suspended and there shall be charged in lieu
thereof the maximum rate of interest permitted under such Law. If any payment of
interest or in the nature of interest would cause the foregoing interest rate
limitation to be exceeded, then such excess payment shall be credited as a
payment of principal, unless the Borrower notifies the Lender to return the
excess payment to the Borrower.
SECTION 3.02 ILLEGALITY; SUSPENSION OF LIBOR RATE TRANCHES. (a) If the
Lender shall reasonably determine (which determination shall, upon notice
thereof to the Borrower be conclusive and binding on the Borrower) that the
introduction of or any change in or in the interpretation of any Law, rule,
regulation or guideline (whether or not having the force of law) makes it
unlawful, or any central bank or other Authority asserts that it is unlawful,
for the Lender to make, continue or maintain any LIBOR Rate Tranche as, or to
convert any loan into, a LIBOR Rate Tranche of a certain duration, the
obligations of the Lender to make, continue, maintain or convert into any such
LIBOR Rate Tranches shall, upon such determination, forthwith be suspended until
the Lender shall notify the Borrower that the circumstances causing such
suspension no longer exist, and all LIBOR Rate Tranches of such type shall
automatically convert into Prime Rate Tranches at the end of the then current
Interest Periods with respect thereto or sooner, if required by such law or
assertion.
(b) If the Lender determines that it is unlawful to maintain
any LIBOR Rate Tranche, the Borrower shall, upon its receipt of notice of such
fact and demand from the Lender, prepay in full such LIBOR Rate Tranches then
outstanding, together with interest accrued thereon and the LIBOR Rate
Prepayment Fee, either on the last day of the Interest Period thereof, if the
Lender may lawfully continue
7
to maintain such LIBOR Rate Tranches to such day, or immediately, if the Lender
may not lawfully continue to maintain such LIBOR Rate Tranche. If the Borrower
is required to so prepay any LIBOR Rate Tranche, then concurrently with such
prepayment, the Borrower shall borrow a Prime Rate Tranche from the Lender in
the amount of such repayment.
(c) If the Lender shall have determined that (i) US dollar
deposits in the relevant amount and for the relevant Interest Period are not
available to the Bank in the London interbank market, (ii) by reason of
circumstances affecting the Lender in the London interbank, adequate means do
not exist for ascertaining the LIBOR Rate applicable hereunder to LIBOR Rate
Tranches of any duration, or (iii) the LIBOR Rate no longer adequately reflects
the Lender's cost of funding loans, then, upon notice from the Lender to the
Borrower, the obligations of the Lender to make or continue any Tranches as, or
to convert any Tranches into, LIBOR Rate Tranches of such duration shall
forthwith be suspended until the Lender shall notify the Borrower that the
circumstances causing such suspension no longer exist.
(d) If the obligation of the Lender to make or maintain LIBOR
Rate Tranches has been so terminated or suspended, the Borrower may elect, by
giving notice to the Lender that all Tranches which would otherwise be made by
the Lender as LIBOR Rate Tranches shall instead be made as Prime Rate Tranches.
SECTION 3.03 INDEMNITIES. In addition to the LIBOR Rate Prepayment Fee,
the Borrower agrees to reimburse the Lender (without duplication) for any
increase in the cost to the Lender, or reduction in the amount of any sum
receivable by the Lender, in respect, or as a result of:
(i) any conversion or repayment or prepayment of the
principal amount of any LIBOR Rate Tranches on a date other than the
scheduled last day of the Interest Period applicable thereto, whether
pursuant to Section 3.02 or otherwise;
(ii) any Tranches not being made as LIBOR Rate
Tranches in accordance with the borrowing request thereof;
(iii) any LIBOR Rate Tranche not being continued as,
or converted into, a LIBOR Rate Tranche in accordance with the Notice
of Continuation/Conversion thereof, or
(iv) any costs associated with marking to market any
Hedging Obligations that (in the reasonable determination of the
Lender) are required to be terminated as a result of any conversion,
repayment or prepayment of the principal amount of any LIBOR Rate
Tranche on a date other than the scheduled last day of the Interest
Period applicable thereto, whether pursuant to Section 3.02 or
otherwise.
The Lender shall promptly notify the Borrower in writing of the occurrence of
any such event, such notice to state, in reasonable detail, the reasons therefor
and the additional amount required fully to compensate the Lender for such
increased cost or reduced amount. Such additional amounts shall be payable by
the Borrower to the Lender within five days of its receipt of such notice, and
such notice shall, in the absence of manifest error, be conclusive and binding
on the Borrower. The Borrower understands, agrees and acknowledges the
following: (i) the Lender does not have any obligation to purchase, sell and/or
match funds in connection with the use of LIBOR Rate as a basis for calculating
the rate of interest on a LIBOR Rate Tranche, (ii) the LIBOR Rate may be used
merely as a reference in determining such rate, and (iii) the Borrower has
accepted the LIBOR Rate as a reasonable and fair basis for calculating such
rate, the LIBOR Rate Prepayment Fee, and other funding losses incurred by the
Lender. Borrower further agrees to pay the LIBOR Rate Prepayment Fee and other
funding losses, if any, whether or not the Lender elects to purchase, sell
and/or match funds.
8
SECTION 3.04 INCREASED COSTS. If on or after the date hereof the
adoption of any applicable Law, rule or regulation or guideline (whether or not
having the force of law), or any change therein, or any change in the
interpretation or administration thereof by any Authority, central bank or
comparable agency charged with the interpretation or administration thereof, or
compliance by the Lender with any request or directive (whether or not having
the force of law) of any such authority, central bank or comparable agency:
(i) shall subject the Lender to any tax, duty or
other charge with respect to its LIBOR Rate Tranches or its obligation
to make LIBOR Rate Tranches, or shall change the basis of taxation of
payments to the Lender of the principal of or interest on its LIBOR
Rate Tranches or any other amounts due under this agreement in respect
of its LIBOR Rate Tranches or its obligation to make LIBOR Rate
Tranches (except for the introduction of, or change in the rate of, tax
on the overall net income of the Lender or franchise taxes, imposed by
the jurisdiction (or any political subdivision or taxing authority
thereof) under the laws of which the Lender is organized or in which
the Lender's principal executive office is located), or
(ii) shall impose, modify or deem applicable any
reserve, special deposit or similar requirement (including, without
limitation, any such requirement imposed by the Board of Governors of
the Federal Reserve System of the United States) against assets of,
deposits with or for the account of, or credit extended by, the Lender
or shall impose on the Lender or on the London interbank market any
other condition affecting its LIBOR Rate Tranches or its obligation to
make LIBOR Rate Tranches,
and the result of any of the foregoing is to increase the cost to the Lender of
making or maintaining any LIBOR Rate Tranche, or to reduce the amount of any sum
received or receivable by the Lender under this Agreement with respect thereto,
by an amount deemed by the Lender to be material, then, within 15 days after
demand by the Lender, the Borrower shall pay to the Lender such additional
amount or amounts as will compensate the Lender for such increased cost or
reduction.
SECTION 3.05 INCREASED CAPITAL COSTS. If any change in, or the
introduction, adoption, effectiveness, interpretation, reinterpretation or
phase-in of, any Law or regulation, directive, guideline, decision or request
(whether or not having the force of law) of any court, central bank, regulator
or other Authority affects or would affect the amount of capital required or
expected to be maintained by the Lender, or person controlling the Lender, and
the Lender determines (in its sole and absolute discretion) that the rate of
return on its or such controlling person's capital as a consequence of its
commitments or the loans made by the Lender is reduced to a level below that
which the Lender or such controlling person could have achieved but for the
occurrence of any such circumstance, then, in any such case upon notice from
time to time by the Lender to the Borrower, the Borrower shall immediately pay
directly to the Lender additional amounts sufficient to compensate the Lender or
such controlling person for such reduction in rate of return. A statement of the
Lender as to any such additional amount or amounts (including calculations
thereof in reasonable detail) shall, in the absence of manifest error, be
conclusive and binding on the Borrower. In determining such amount, the Lender
may use any reasonable method of averaging and attribution that it reasonably
shall deem applicable.
SECTION 3.06 TAXES. (a) All payments by the Borrower of principal of,
and interest on, the LIBOR Rate Tranches and all other amounts payable hereunder
shall be made free and clear of and without deduction for any present or future
income, excise, stamp or franchise taxes and other taxes, assessments, imposts,
duties, deductions, fees, withholdings or similar charges, and all liabilities
with respect thereto of any nature whatsoever imposed by any taxing authority,
but excluding franchise taxes and taxes imposed on or measured by the Lender's
net income or receipts (such non-excluded items being called "Taxes"). In the
event that any withholding or deduction from any payment to be made by the
9
Borrower hereunder is required in respect of any Taxes pursuant to any
applicable law, rule or regulation, then the Borrower will
(i) pay directly to the relevant authority the full
amount required to be so withheld or deducted;
(ii) promptly forward to the Lender an official
receipt or other documentation satisfactory to the Lender evidencing
such payment to such authority; and
(iii) pay to the Lender such additional amount or
amounts as is necessary to ensure that the net amount actually received
by the Lender will equal the full amount the Lender would have received
had no such withholding or deduction been required.
(b) If any Taxes are directly asserted against the Lender with
respect to any payment received by the Lender hereunder, the Lender may pay such
Taxes and the Borrower will promptly pay such additional amount (including any
penalties, interest or expenses) as is necessary in order that the net amount
received by the Lender after the payment of such Taxes (including any Taxes on
such additional amount) shall equal the amount the Lender would have received
had not such Taxes been asserted.
(c) If the Borrower fails to pay any Taxes when due to the
appropriate taxing authority or fails to remit to the Lender the required
receipts or other required documentary evidence, the Borrower shall indemnify
the Lender for any incremental Taxes, interest or penalties that may become
payable by the Lender as a result of any such failure.
SECTION 3.07 SURVIVAL. The agreements and obligations of the Borrower
in this Article III shall survive the payment of all other Obligations.
SECTION 3.08 SECURITY. The prompt and full satisfaction of the
Obligations shall be secured by the Collateral Documents.
ARTICLE IV. CONDITIONS OF LENDING
SECTION 4.01 CONDITIONS PRECEDENT. The Lender's obligation under this
Agreement to make the initial Advance is subject to the prior or concurrent
satisfaction of each of the following conditions precedent unless waived in
writing by the Lender:
(i) Contemporaneously with, or prior to, the
execution and delivery of this Agreement, the Borrower shall deliver or
cause to be delivered to the Lender each of the items listed in
Schedule Two attached hereto and incorporated herein by reference
thereto.
(ii) The Collateral Documents shall be in full force
and effect and the Borrower shall have taken or caused to be taken such
actions so that, on the Closing Date, the Lender shall have valid and
perfected liens on and security interests in the Collateral having
priority over all other Liens in such Collateral except Permitted
Liens.
(iii) The representations and warranties contained in
Article V shall be true and correct on the Closing Date.
(iv) No Event of Default shall have occurred and be
continuing on the Closing Date.
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(v) No litigation, arbitration, proceeding or
investigation by or before any Authority shall be pending, or to the
knowledge of the Borrower, threatened which seeks to enjoin or
otherwise prevent the consummation of, or to recover any damages or
obtain relief as a result of, the transactions contemplated by or in
connection with this Agreement or the other Loan Documents or which
might, in the opinion of the Lender, if adversely determined, be
reasonably expected to have a Material Adverse Effect or be detrimental
to the interests of the Lender with respect to the transactions
contemplated hereby.
(vi) All legal details and proceedings in connection
with the transactions contemplated by this Agreement shall be
satisfactory to counsel for the Lender, and the Lender shall have
received originals or certified copies of such documents and
proceedings in connection herewith and therewith as the Lender may
request, all in form and substance satisfactory to counsel for the
Lender.
(vii) No event or events shall have occurred and be
continuing on the Closing Date which, individually or in the aggregate,
has or reasonably could be expected to have a Material Adverse Effect.
(viii) The Lender shall have completed all business,
environmental and legal due diligence deemed necessary or appropriate
by the Lender (including without limitation, collateral audits of the
Collateral) and the results of such due diligence shall be satisfactory
to the Lender and its counsel.
(ix) The capital structure and ownership of the
Borrower shall be satisfactory to the Lender.
(x) The Equipment Lease shall be in form and
substance satisfactory to the Lender and, at a minimum, shall provide
for a lease termination date later than the Standby Term Loan Maturity
Date.
SECTION 4.02 SUBSEQUENT CONDITIONS. The Lender's obligation to make
subsequent Advances is subject to the satisfaction of each of the following
conditions unless waived in writing by the Lender:
(i) The representations and warranties contained in
Article V shall be true and correct in all material respects as though
made on and as of the borrowing date (except to the extent such
representations and warranties expressly refer to an earlier date, in
which case they shall be true and correct as of such earlier date).
(ii) No event or events shall have occurred which,
individually or in the aggregate, has had, or reasonably could be
expected to have, a Material Adverse Effect.
(iii) No Potential Default or Event of Default shall
have occurred and be continuing.
ARTICLE V. REPRESENTATIONS AND WARRANTIES
As an inducement to the Lender to enter into this Agreement and make
the Standby Term Loan, the Borrower and Superior each represents and warrants to
the Lender as follows:
SECTION 5.01 ORGANIZATION, SUBSIDIARIES AND AUTHORITY. (a) The Borrower
and Superior are each a limited partnership duly organized, validly existing and
in good standing under the laws of the
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Commonwealth of Pennsylvania. The Borrower has no Subsidiaries except as set
forth on Schedule 5.01 attached hereto.
(b) Neither the Borrower nor Superior uses, or has used within
the past five (5) years, any assumed or fictitious name in the conduct of its
business, nor has the Borrower or Superior had any registered name other than
its existing registered name. The federal employer identification number and
state organizational identification numbers for the Borrower and Superior are
set forth on Schedule 5.01.
(c) The Borrower and Superior each has the lawful power to own
or lease its assets and properties and to engage in the business it conducts.
Each of the Borrower and Superior is duly licensed and qualified and in good
standing in the jurisdictions wherein the character or location of the assets
and properties owned or leased by it, or the nature of the business transacted
by it, make such licensing or qualification necessary and the failure to be so
licensed or qualified could have, or could reasonably be expected to have, a
Material Adverse Effect.
(d) Each of the Borrower, the General Partner and Superior has
the power and authority to enter into and perform the provisions of the Loan
Documents to which it is a party, to incur the Indebtedness and obligations
provided for therein and to carry out the transactions contemplated therein, and
each has taken all proper and necessary partnership or corporate action, as the
case may be, to incur the Indebtedness and obligations provided for therein. The
execution, delivery and performance by the Borrower, the General Partner and
Superior of this Agreement, the Standby Term Loan Note, the Collateral Documents
and the other Loan Documents to which they are parties and the creation and
grant of the Liens contemplated by the Collateral Documents (i) have been duly
authorized by all requisite partnership or corporate action, and (ii) will not
(A) violate any Law or conflict with or result in a breach of any Law, the
Organization Documents of the Borrower or Superior or any notes, indentures,
contracts, instruments or agreements to which the Borrower, the General Partner
or Superior is a party, except to the extent such violation could not reasonably
be expected to have a Material Adverse Effect, or (B) result in the creation or
imposition of any Lien on any property (now owned or hereafter acquired) of the
Borrower or Superior other than those in favor of the Lender.
(e) This Agreement, the Standby Term Loan Note, the Collateral
Documents, the Guaranty Agreements and the other Loan Documents have been duly
and validly executed and delivered by each Loan Party that is a party thereto
and constitute the valid and binding obligations of each such Loan Party,
enforceable in accordance with their respective terms.
SECTION 5.02 CONSENT. No consent, approval, authorization, permit or
license of, or other action by, or filing, registration or qualification with,
any Authority or any Person (including shareholders or partners) which has not
been obtained (except for recordings or filings in connection with the Liens
granted to the Lender under the Collateral Documents) is necessary or required
in connection with the execution and delivery by the Borrower, the General
Partner or Superior of the Loan Documents to which they are a party, the
undertaking or performance of any of the obligations of the Borrower, the
General Partner or Superior thereunder or the enforcement of the Lender's rights
and remedies thereunder.
SECTION 5.03 LITIGATION. There is no order, notice, claim, litigation,
judgment, proceeding or investigation existing, pending or, to the best
knowledge of the Borrower, threatened or contemplated, at law, in equity, in
arbitration or by or before any Authority, against or affecting the Loan Parties
or their respective properties, individually or in the aggregate, which, if
determined adversely to the interests of the Loan Parties, could reasonably be
expected to have a Material Adverse Effect. No injunction, writ, temporary
restraining order or any order of any nature has been issued by any court or
other Authority purporting to enjoin or restrain the execution, delivery or
performance of this Agreement or any other Loan Document or directing that the
transactions provided for herein or therein not be consummated as herein or
therein provided
12
SECTION 5.04 FINANCIAL STATEMENTS; SOLVENCY. (a) The Borrower and
Superior have furnished to the Lender the following financial information
(collectively, the "Financial Statements"):
(i) A reviewed balance sheet of Superior for its
fiscal year ended December 31, 2003, and the related consolidated
statements of income, shareholders' equity and cash flows for the
periods then ended; and
(ii) An internally prepared balance sheet of the
Borrower for the period ended December 31, 2003 and the related
consolidated statements of income and cash flows for the period then
ended (the "Borrower 2003 Financial Statement").
The Financial Statements (A) were prepared in all material respects in
accordance with GAAP consistently applied throughout the periods covered thereby
(except for the absence of footnotes with respect to the Borrower 2003 Financial
Statement), (B) fairly present in all material respects the financial condition
of the Borrower and Superior, as applicable, as of the dates thereof and results
of operations for the periods covered thereby, and (C) except for liabilities
not required to be disclosed in a balance sheet prepared in accordance with
GAAP, show all material indebtedness and other liabilities, direct or
contingent, of the Borrower and Superior as of the dates thereof, including
liabilities for taxes, material commitments and contingent obligations subject
to ordinary, good faith year end adjustments.
(b) The Borrower and Superior are Solvent and will be Solvent
after (i) the making of each Advance, (ii) the execution and delivery of the
Loan Documents to which it is a party, and (iii) the perfection of any Liens in
connection with the Collateral Documents.
SECTION 5.05 OWNERSHIP AND MANAGEMENT. All limited and general
partners, shareholders, officers and directors of the Borrower, the General
Partner and Superior, as applicable, are disclosed in Schedule 5.05 attached
hereto. All outstanding partnership interests of the Borrower and Superior have
been duly authorized, validly issued and are fully paid and non-assessable.
There are no outstanding subscriptions, warrants, calls, options, rights,
commitments or agreements by which the Borrower or Superior is bound providing
for the issuance of partnership interests of the Borrower or Superior, or for
the issuance of any securities convertible or exchangeable, actually or
contingently, into partnership interests of the Borrower or Superior.
SECTION 5.06 ADVERSE OCCURRENCES. No event or events have occurred
which, individually or in the aggregate, have had, or could reasonably be
expected to have, a Material Adverse Effect. No Event of Default exists or would
result from the incurring of any obligations by the Loan Parties under the Loan
Documents or from the grant or perfection of the Liens on the Collateral in
favor of the Lender.
SECTION 5.07 INDEBTEDNESS. Neither the Borrower nor Superior has any
Indebtedness except (i) to the Lender, (ii) Indebtedness set forth on Schedule
5.07, and (iii) trade accounts payable arising in the ordinary course of
business.
SECTION 5.08 INFORMATION. All information furnished or to be furnished
by the Loan Parties to the Lender is and will be in all material respects true
and accurate and the Borrower has disclosed and will disclose to the Lender in
writing any fact known to the Borrower which could reasonably be expected to
have a Material Adverse Effect.
SECTION 5.09 ASSETS, LIENS AND INSURANCE. (a) With respect to all of
the properties and assets of the Borrower and Superior necessary for the
ordinary conduct of its business, the Borrower and Superior have (i) good,
sufficient and legal title thereto (in the case of all fee interests in real
property), (ii) valid leasehold interests therein (in the case of all leasehold
interests in real or personal property), (iii) valid licenses therein (in the
case of licensed intangible properties), or (iv) good title thereto (in the case
13
of all other personal property). All such properties and assets are free and
clear of all Liens except Permitted Liens.
(b) Schedule 5.09 attached hereto lists all insurance policies
and other bonds to which the Borrower or Superior is a party, all of which are
valid and in full force and effect. No notice has been given or claim made and
no grounds exist to cancel or avoid any of such policies or bonds or to reduce
the coverage provided thereby. Such policies and bonds provide adequate coverage
from reputable and financially sound insurers in amounts sufficient to insure
the assets and risks of the Borrower and Superior in accordance with prudent
business practice in the industry of the Borrower.
SECTION 5.10 CONTRACTUAL OBLIGATIONS AND EQUIPMENT LEASES. (a) The
Borrower and Superior are in compliance with the provisions of all contracts,
licenses, instruments and other commitments of any kind material to the
financial condition, properties, assets or prospects of the Borrower and
Superior, and no event has occurred which, but for the passage of time or the
giving of notice, or both, would constitute a default thereunder except to the
extent that such failure to comply or such default could not reasonably be
expected to have in a Material Adverse Effect. Neither the Borrower nor Superior
is a party to or otherwise subject to any agreements or instruments or any
charter or other internal restrictions which, individually or in the aggregate,
compliance with which could reasonably be expected to have a Material Adverse
Effect.
(b) Schedule 5.10 attached hereto contains a complete list of
the amounts owing, due dates and other information with respect to all equipment
leased by the Borrower to Superior together with a description (including
identification and serial numbers, if applicable) of all of such equipment, and
the same are and will be correctly stated in all records of the Borrower. The
Borrower has delivered to the lender true and correct copies of the Equipment
Lease and all of its other equipment leases (including all amendments, exhibits
and schedules thereto), which are in full force and effect on the Closing Date.
All action by the Borrower necessary or desirable to protect and perfect the
Lender's Liens on the Equipment Lease has been duly taken. No event has occurred
which, but for the passage of time or the giving of notice, or both, would
constitute a default under the Equipment Lease.
SECTION 5.11 TAXES. All tax returns required to be filed by the
Borrower and the other Loan Parties have been properly prepared, executed and
filed. All taxes, assessments, fees and other governmental charges upon the
Borrower and the other Loan Parties or upon any of their properties, income,
sales or franchises that are due and payable have been paid. The Borrower does
not know of any proposed additional assessment or basis for any material
assessment for additional taxes against the Borrower and the other Loan Parties
(whether or not reserved against by the Borrower and the other Loan Parties)
that would be material to the condition (financial or otherwise) of the Borrower
and the other Loan Parties. All tax liabilities of the Borrower and the other
Loan Parties are adequately provided for on the books of the Borrower and the
other Loan Parties.
SECTION 5.12 MARGIN STOCK; INVESTMENT COMPANY. None of the proceeds of
the Standby Term Loan will be used by the Borrower for the purpose of buying or
carrying any margin stock ("Margin Stock") as such term is defined in Regulation
U, Regulation X or Regulation G promulgated by the Board of Governors of the
Federal Reserve System, as amended from time to time, or to reduce or retire any
loan or advance incurred to purchase or carry Margin Stock. The Borrower is not
and will not become engaged in the business of extending credit for the purpose
of buying or carrying Margin Stock, and no part of the proceeds of any borrowing
hereunder will be used to extend credit to others for the purpose of purchasing
or carrying any Margin Stock. The Borrower is not, nor will it become, an
"investment company" or a company "controlled" by an "investment company", as
each of such terms are defined in the Investment Company Act of 1940, as
amended. The Borrower is not subject to regulation under the Public Utility
Holding Company Act of 1935, the Federal Power Act, the Interstate Commerce Act,
any state public utilities code, or any other Federal or state statute or
regulation limiting its ability to incur Indebtedness.
14
SECTION 5.13 INTELLECTUAL PROPERTY RIGHTS. The Borrower and Superior
own or possess all patents, trademarks, trade names, service marks, copyrights,
licenses, permits and franchises, and all rights in respect of the foregoing
required to conduct its business as now conducted, or as presently contemplated
to be conducted, without any conflict with, or infringement upon rights of,
other Persons, and the Borrower is not in violation of any valid rights of
others with respect to any of the foregoing.
SECTION 5.14 ENVIRONMENTAL LAWS. (a) The Borrower, Superior and their
Environmental Affiliates are and have been in compliance with all applicable
Environmental Laws, except for such non-compliance which, individually or in the
aggregate, has not, and reasonably could not be expected to have, a Material
Adverse Effect. To the knowledge of the Borrower and Superior, there are no
circumstances that may prevent or interfere with such compliance in the future.
(b) Neither the Borrower nor Superior has received any notice
to the effect that its operations are not in material compliance with any of the
requirements of applicable Environmental Laws or are the subject of any federal
or state investigation evaluating whether any remedial action is needed to
respond to a release of any Hazardous Materials or substance into the
environment, which non-compliance or remedial action could reasonably be
expected to have a Material Adverse Effect.
SECTION 5.15 COLLATERAL DOCUMENTS. The provisions of the Collateral
Documents executed or to be executed by the Loan Parties in favor of the Lender
will be, on and after the due execution and delivery thereof, effective to
create, for the benefit of the Lender, legal, valid and enforceable Liens in all
of the Collateral described therein, securing the Standby Term Loan Note and all
other Obligations from time to time outstanding.
SECTION 5.16 BANKRUPTCY; INSOLVENCY. None of the Loan Parties has
applied for or consented to the appointment of a receiver, trustee, custodian or
liquidator for itself or any of its properties, admitted in writing its
inability to pay its debts as they mature, made a general assignment for the
benefit of creditors, been adjudicated a bankrupt or insolvent or filed a
voluntary petition in bankruptcy, or a petition or an answer seeking
reorganization or an arrangement with creditors or to take advantage of any
bankruptcy, reorganization, insolvency, readjustment of debt, dissolution or
liquidation law or statute, or an answer admitting the material allegations of a
petition filed against it in any proceeding under any such law, and no action
has been taken by the Borrower or any of the other Loan Parties for the purposes
of effecting any of the foregoing.
SECTION 5.17 COMPLIANCE WITH LAWS. Neither the operation of the
business of the Borrower or any of the other Loan Parties nor the development,
manufacture, assembly or sale of the products or services of the Borrower or any
of the other Loan Parties violate any Law applicable to the Loan Parties, except
to the extent that any such violation has not, and reasonably could not be
expected to have, a Material Adverse Effect.
SECTION 5.18 LOCATIONS. Schedule 5.18 attached hereto sets forth the
location of (i) the chief executive office of the Borrower and Superior, (ii)
the office where the Borrower and Superior keep their records concerning the
Collateral, and (iii) each place of business of the Borrower and Superior,
together with the name and address of each Person other than the Borrower or
Superior having possessory rights (as owner, landlord, warehouseman or
otherwise) to such locations.
SECTION 5.19 ERISA PLANS. Except as disclosed in Schedule 5.19:
(i) Each Plan is in compliance in all material
respects with the applicable provisions of ERISA, the Code and other
federal or state law. Each Plan which is intended to qualify under
Section 401(a) of the Code has received a favorable determination
letter from the IRS and to the best knowledge of the Borrower, nothing
has
15
occurred which would cause the loss of such qualification. The
Borrower and each ERISA Affiliate has made all required contributions
to any Plan subject to Section 412 of the Code, and no application for
a funding waiver or an extension of any amortization period pursuant to
Section 412 of the Code has been made with respect to any Plan;
(ii) There are no pending or, to the knowledge of the
Borrower, threatened claims, actions or lawsuits, or action by any
Authority, with respect to any Plan that has or could reasonably be
expected to have a Material Adverse Effect. There has been no
prohibited transaction or violation of the fiduciary responsibility
rules with respect to any Plan which has or could reasonably be
expected to have a Material Adverse Effect; and
(iii) (A) No ERISA Event has occurred or is
reasonably expected to occur; (B) no Pension Plan has any Unfunded
Pension Liability; (C) neither the Borrower nor any ERISA Affiliate has
incurred, or reasonably expects to incur, any liability under Title IV
of ERISA with respect to any Pension Plan (other than premiums due and
not delinquent under Section 4007 of ERISA); (D) neither the Borrower
nor any ERISA Affiliate has incurred, or reasonably expects to incur,
any liability (and no event has occurred which, with the giving of
notice under Section 4219 of ERISA, would result in such liability)
under Section 4201 or 4243 of ERISA with respect to a Multiemployer
Plan; and (E) neither the Borrower nor any ERISA Affiliate has engaged
in a transaction that could be subject to Section 4069 or 4212(c) of
ERISA.
SECTION 5.20 CONTEMPORANEOUS EXCHANGE. The attachment and perfection of
the security interests in the Collateral effected on the Closing Date by virtue
of the Collateral Documents executed and delivered pursuant to this Agreement
are intended to be a contemporaneous exchange for new value given by virtue of
the consummation of the transactions contemplated by this Agreement and are, in
fact, a substantially contemporaneous exchange for such new value.
SECTION 5.21 DISCLOSURE. No representation or warranty made by the Loan
Parties in the Loan Documents, no statement made or to be made by the Loan
Parties in any financial information, certificate, report, exhibit or document
furnished or to be furnished by the Loan Parties to the Lender pursuant to or in
connection herewith or therewith contains or will contain any untrue material
statement or omits or will omit to state any material fact necessary to make the
statements contained therein not misleading in light of the circumstances under
which they were made. The Borrower has made full and true disclosure of all
information known to the Borrower, financial or otherwise, relating to the Loan
Parties or in connection with the transactions contemplated hereby which has
resulted, or which could reasonably be expected to result, in a Material Adverse
Effect.
ARTICLE VI. AFFIRMATIVE COVENANTS
Until payment in full of the Standby Term Loan and all of the other
Obligations, the Borrower and Superior, as applicable, covenant and agree to
perform each of the covenants set forth below in this Article VI unless the
Lender waives compliance in writing.
SECTION 6.01 USE OF PROCEEDS. The Borrower will use the proceeds of the
Standby Term Loan to acquire equipment to be leased by the Borrower to Superior.
No portion of the proceeds of the Standby Term Loan will be used directly or
indirectly for the purpose of purchasing or carrying any Margin Stock. The
Borrower will furnish the Lender such evidence as the Lender may reasonably
require with respect to the use of the proceeds of the Standby Term Loan.
16
SECTION 6.02 FINANCIAL INFORMATION AND COMPLIANCE CERTIFICATES. The
Borrower or Superior, as indicated, shall deliver to the Lender, in form and
detail satisfactory to the Lender, all of the following:
(i) As soon as practicable, but in no event later
than one hundred twenty (120) days after the end of each Fiscal Year of
the Borrower, the Borrower shall deliver to the Lender (A) a balance
sheet and related statements of income and partners' capital of the
Borrower for such fiscal year and the results of the Borrower's
operations during such fiscal year, all in reasonable detail and
stating in comparative form the respective figures for the
corresponding date and period in the prior Fiscal Year, all of which
shall be prepared in accordance with GAAP by the General Partner and
certified by the General Partner to be accurate and complete and to
fairly present in all material respects the financial position and the
results of operations of the Borrower, and (B) copies of the Borrower's
filed federal income tax return and all schedules thereto;
(ii) As soon as practicable, but in any event not
later than ninety (90) days after the end of each Fiscal Year of
Superior, Superior shall deliver to the Lender a balance sheet of
Superior, and the related statements of income, partners' capital and
cash flow for such Fiscal Year, with accompanying footnotes, all in
reasonable detail and stating in comparative form the respective
figures for the corresponding date and period in the prior Fiscal Year,
with such statements and balance sheet to be reviewed by an independent
certified public accounting firm acceptable to the Lender (the
"Independent Accountants"). The report of the Independent Accountants
shall be a review report but otherwise free of exceptions or
qualifications not acceptable to the Lender (including any exception,
qualification or explanation relating to the ability to continue as a
going concern or independence), and a copy of such certificate or
report signed by the Independent Accountants shall be delivered to the
Lender, and shall in any event contain a written statement of the
Independent Accountants substantially to the effect that (A) the
Independent Accountants has reviewed such consolidated and
consolidating financial statements and balance sheet in accordance with
Statements on Standards for Accounting and Review Services issued by
the American Institute of Certified Public Accountants, (B) the
Independent Accountants are not aware of any material modifications
that should be made to such consolidated and consolidating financial
statements in order for them to be in conformity with generally
accepted accounting principles, and (C) in performing their review, the
Independent Accountants did not become aware of any event of default
under the Guaranty Agreement executed by Superior, or if they did
become so aware, such certificate or report shall state the nature and
period of existence thereof;
(iii) With respect to each Guarantor other than
Superior, as soon as practicable, but in any event not later than
September 1 following the last day of each fiscal year, the Borrower
shall deliver to the Lender a balance sheet of such Guarantor, and the
related statements of income, shareholders' equity or partners'
capital, as the case may be, and cash flow for such fiscal year, with
accompanying footnotes, all in reasonable detail and stating in
comparative form the respective figures for the corresponding date and
period in the prior fiscal year, with such statements and balance sheet
to be reviewed by the Independent Accountants. The report of the
Independent Accountants shall be a review report but otherwise free of
exceptions or qualifications not acceptable to the Lender (including
any exception, qualification or explanation relating to the ability to
continue as a going concern or independence), and a copy of such
certificate or report signed by the Independent Accountants shall be
delivered to the Lender, and shall in any event contain a written
statement of the Independent Accountants substantially to the effect
that (A) the Independent Accountants has reviewed such consolidated and
consolidating financial statements and balance sheet in
17
accordance with Statements on Standards for Accounting and Review
Services issued by the American Institute of Certified Public
Accountants, (B) the Independent Accountants are not aware of any
material modifications that should be made to such consolidated and
consolidating financial statements in order for them to be in
conformity with generally accepted accounting principles, and (C) in
performing their review, the Independent Accountants did not become
aware of any event of default under the Guaranty Agreement executed by
such Guarantor, or if they did become so aware, such certificate or
report shall state the nature and period of existence thereof;
(iv) As soon as practicable, but in no event later
than forty-five (45) days after the end of each Fiscal Quarter of the
Borrower, the Borrower shall deliver to the Lender a balance sheet of
the Borrower as of the end of such Fiscal Quarter and the related
statements of income and partners' capital for such Fiscal Quarter and
for the period from the beginning of the then current Fiscal Year and
ending on the last day of such Fiscal Quarter, all of which shall be
prepared in accordance with GAAP (subject to ordinary, good faith
year-end audit adjustments and an absence of footnotes), by the General
Partner and certified by the General Partner to be accurate and
complete and to fairly present in all material respects, the financial
position and the results of operations of the Borrower;
(v) As soon as practicable, but in no event later
than forty-five (45) days after the end of each fiscal quarter of each
Guarantor, the Borrower shall deliver to the Lender a balance sheet of
such Guarantor as of the end of such fiscal quarter and the related
statements of income, shareholders' equity or partners' capital, as the
case may be, for such fiscal quarter and for the period from the
beginning of the then current fiscal year and ending on the last day of
such fiscal quarter, all certified by a Responsible Officer of such
Guarantor as fairly presenting in all material respects, in accordance
with GAAP (subject to ordinary, good faith year-end audit adjustments
and an absence of footnotes), the financial position and the results of
operations of such Guarantor;
(vi) Concurrently with the delivery of the financial
information required under Section 6.02(iv), the Borrower shall deliver
to the Lender a compliance certificate dated the date thereof in form
satisfactory to the Lender, signed by the General Partner,
demonstrating in reasonable detail compliance with the financial
maintenance covenants set forth in Section 7.01 required to be tested
at the end of the applicable accounting period and stating that to the
knowledge of the General Partner (after due and diligent inquiry), (A)
the representations and warranties set forth in Article V of this
Agreement are true and correct in all material respects as of the date
of the delivery of such financial information, and (B) no Event of
Default has occurred as of such date, or if any such condition existed
or exists, specifying the nature and period of its existence and the
action the Borrower has taken, is taking and proposes to take with
respect thereto; and
(vii) With respect to each Guarantor, concurrently
with the delivery of the financial information required under Section
6.02(v), the Borrower shall deliver to the Lender a compliance
certificate dated the date thereof in form satisfactory to the Lender,
signed by a Responsible Officer of such Guarantor, (A) stating that to
the knowledge of such Responsible Officer (after due and diligent
inquiry), the representations and warranties set forth in the Guaranty
Agreement executed by such Guarantor are true and correct in all
material respects as of the date of the delivery of such financial
information, no default has occurred as of such date under the Guaranty
Agreement executed by such Guarantor, or if any such condition existed
or exists, specifying the nature and period of its existence and the
action the Borrower has taken, is taking and proposes to take with
respect thereto, and (B) with respect to Superior only, demonstrating
in reasonable detail
18
compliance with the financial maintenance covenants set forth in in
Section 7.01 required to be tested at the end of the applicable
accounting period; and
(viii) promptly after the request of the Lender, the
Borrower and Superior shall deliver to the Lender such additional
information regarding the business, financial or corporate affairs of
the Loan Parties as the Lender may from time to time reasonably
request.
SECTION 6.03 BOOKS AND RECORDS; VISITATION. The Borrower and Superior
shall maintain proper books of record and account, in which full, true and
correct entries shall be made of all financial transactions and matters
involving the assets and business of the Borrower and Superior in order to
permit financial statements to be prepared in accordance with GAAP. The Borrower
and Superior shall permit representatives and independent contractors of the
Lender to visit and inspect any of its properties, to examine and audit its
financial and operating records, and make copies thereof or abstracts therefrom,
and to discuss its affairs, finances and accounts with its directors, officers,
employees, agents and servants and with the Independent Accountants, and in
furtherance thereof, the Borrower and Superior hereby authorize all of such
Persons to discuss the same with representatives and independent contractors of
the Lender at such times and as often as the Lender may reasonably request, all
at the expense of the Borrower. If the Borrower or Superior now or at any time
hereafter maintains any records (including without limitation computer generated
records and computer software programs for the generation of such records) in
the possession of a third party, the Borrower and Superior, upon request of the
Lender shall notify such party to permit the Lender free access to such records
at all reasonable times and to provide the Lender with copies of any records it
may request, all at the Borrower's expense. Notwithstanding any of the
foregoing, after the occurrence and during the continuance of an Event of
Default, the Lender may do any of the foregoing as often as the Lender may
desire at any time and without advance notice.
SECTION 6.04 COMPLIANCE WITH LAWS. The Borrower and Superior will
conduct their business in compliance with all applicable Laws except to the
extent that the failure to be in compliance could not reasonably be expected to
have a Material Adverse Effect.
SECTION 6.05 NOTICES. (a) The Borrower and Superior shall promptly
notify the Lender of the following (but in no event later than 10 days after the
Borrower or Superior becomes aware, or reasonably should have been aware of the
same):
(i) The occurrence of an Event of Default or any
event or events which, individually or in the aggregate, have had, or
could reasonably be expected to have, a Material Adverse Effect;
(ii) The entry of any Lien (other than a Permitted
Lien) against the Collateral or the other assets and properties of the
Borrower, the General Partner or Superior;
(iii) Any litigation, arbitration or investigation or
proceeding of any Authority not previously disclosed to the Lender
which has been instituted or, to the knowledge of the Borrower or
Superior, is threatened against the Borrower, the General Partner or
Superior or to which any of their properties, assets or revenues are
subject which (A) if adversely determined, could have a Material
Adverse Effect, or (B) relates to this Agreement, any Collateral
Document or any other Loan Document;
(iv) Any material adverse development which shall
occur in any litigation, arbitration or investigation or proceeding of
any Authority against the Borrower or Superior or any of their assets
or properties which has previously been disclosed to the Lender;
19
(v) The occurrence of any default under any Equipment
Lease or the receipt by the Borrower or Superior of notice of the
alleged occurrence of a default under any Equipment Lease;
(vi) The occurrence of any default under any lease,
bailment agreement or other Contractual Obligation relating to the
locations where any Collateral may be stored or any other business
locations of the Borrower or Superior or the receipt by the Borrower or
Superior of notice of the alleged occurrence of a default under any
such Contractual Obligation, in each case which would reasonably be
expected to have, individually or together with other similar
occurrences, a Material Adverse Effect;
(vii) The occurrence of any of the following events:
(A) any enforcement, cleanup, removal or other governmental or
regulatory actions instituted, completed or threatened against the
Borrower, any other Loan Party or any of their respective Environmental
Affiliates or properties pursuant to any applicable Environmental Laws,
(B) any other Environmental Claims against the Borrower, any Subsidiary
or any of their respective Environmental Affiliates, or any past or
present acts, omissions, events or circumstances (including but not
limited to any Release at, on or under any facility or property now or
previously owned, operated or leased by the Borrower, any Subsidiary or
any of their respective Environmental Affiliates) that is known to the
Borrower and could form the basis of such Environmental Claim, which
Environmental Claim individually or in the aggregate, could reasonably
be expected to have a Material Adverse Effect, and (C) any
environmental or similar condition on any real property adjoining or in
the vicinity of the property of the Borrower or any other Loan Party
that is known to the Borrower and could reasonably be anticipated to
cause such property or any part thereof to be subject to any
restrictions on the ownership, occupancy, transferability or use of
such property under any Environmental Laws which could reasonably be
expected to have a Material Adverse Effect;
(viii) The occurrence of any of the following events
affecting the Borrower or any ERISA Affiliate, and the Borrower shall
also deliver to the Lender a copy of any notice with respect to such
event that is filed with a Governmental Authority and any notice
delivered by a Governmental Authority to the Borrower or any ERISA
Affiliate with respect to such event: (A) an ERISA Event involving
$500,000 or more; (B) a material increase in the Unfunded Pension
Liability of any Pension Plan; (C) the adoption of, or the commencement
of contributions to, any Plan subject to Section 412 of the Code by the
Borrower or any ERISA Affiliate; or (D) the adoption of any amendment
to a Plan subject to Section 412 of the Code, if such amendment results
in a material increase in contributions or Unfunded Pension Liability;
(ix) Any breach or non-performance of, or any default
under, any Contractual Obligation of the Borrower which could
reasonably be expected to have a Material Adverse Effect;
(x) Any material change in accounting policies or
financial reporting practices by the Borrower; and
(xi) Any change in the location of any of its places
of business, or the establishment of any new, or the discontinuance of
any existing, place of business or location of Collateral, and such
notice shall contain details of the new location and the name and
address of the landlord or bailee (as applicable), if any, of such new
location.
20
(b) Each notice under Section 6.05(a) shall be accompanied by
a written statement by a Responsible Officer setting forth details of the
occurrence referred to in such notice, and stating what action the affected Loan
Party proposes to take with respect thereto and at what time.
SECTION 6.06 INSURANCE. The Borrower and Superior will maintain
insurance with respect to their business and properties (including the
Collateral) of such types, in such amounts and against such risks, hazards,
loss, damage, liabilities, casualties and contingencies as are customarily
maintained by Persons engaged in the same or similar business, such insurance to
be with financially sound and reputable independent insurers and to include, but
not be limited to, comprehensive public liability, property and casualty
insurance, fire insurance with extended coverage, flood insurance (where
appropriate) and worker's compensation insurance and such other insurance
coverage as may be required under the Collateral Documents. In no event shall
any of such insurance be maintained in an amount less than that which may
reasonably be required by the Lender. Such insurance shall include a
noncontributory, standard loss payee or mortgagee endorsement, as appropriate,
naming the Lender as loss payee and an additional insured, as its interests may
appear, and provide for written notice to the Lender at least thirty (30) days
prior to any cancellation, non-renewal or amendment thereof. Upon request of the
Lender, the Borrower shall deliver to the Lender original or duplicate policies
of such insurance.
SECTION 6.07 TAXES. Except to the extent that the validity or amount
thereof is being contested in good faith and by appropriate proceedings with
adequate reserves maintained in amounts satisfactory to the Lender, the Borrower
and Superior will pay and discharge or cause to be paid and discharged, all
taxes, assessments and governmental charges and social security and wage tax
withholdings imposed upon them and their properties prior to the date when any
penalty would accrue for the nonpayment thereof, provided, however, the amount
of any contested social security or wage tax withholding liabilities shall be
paid immediately.
SECTION 6.08 MAINTENANCE OF PROPERTIES. The Borrower and Superior will
maintain and preserve their properties (including, without limitation, the
Collateral and leased properties) in good repair, working order and condition
(ordinary wear and tear excepted), and make all necessary or appropriate
repairs, renewals, replacements, substitutions, additions, betterments and
improvements thereto so that the efficiency for all such properties shall at all
times be properly preserved and maintained, and promptly notify the Lender of
any material casualty or force majeure affecting the value of the Collateral.
SECTION 6.09 MAINTENANCE OF EXISTENCE. The Borrower and Superior will
maintain their existence as a limited partnership and corporation, respectively,
in good standing, and maintain in effect all licenses, permits, franchises and
privileges necessary for the normal conduct of its business.
SECTION 6.10 ENVIRONMENTAL MATTERS. (a) The Borrower and Superior will
conduct their operations and keep and maintain their properties in compliance in
all material respects with all Environmental Laws.
(b) The Borrower and Superior will promptly take any and all
reasonable actions necessary to (i) cure any violation of applicable
Environmental Laws by the Borrower and Superior where such violation could
reasonably be expected to have a Material Adverse Effect, and (ii) make an
appropriate response to any Environmental Claim against the Borrower or Superior
(of which the Borrower or Superior has notice) where such Environmental Claim
could reasonably be expected to have a Material Adverse Effect.
SECTION 6.11 REIMBURSABLE COSTS AND EXPENSES. The Borrower will pay all
Reimbursable Costs and Expenses of the Lender incurred in connection with, or
incident to:
21
(i) the preparation, administration, amendment,
modification or waiver of, or consent with respect to, this Agreement
and the other Loan Documents, including any workout or other
restructuring of the Obligations, provided the Borrower shall not be
required to pay Reimbursable Costs and Expenses of the Lender incurred
in connection with, or incident to, the preparation of the
Credit
Agreement and the Loan Documents for the closing on the Closing Date;
(ii) any litigation, suit, proceeding, contest,
dispute or action (whether instituted by the Lender or any other
Person) in any way relating to the Collateral, this Agreement, the
Collateral Documents and the other Loan Documents, including any
litigation, suit, proceeding, contest, dispute or action taken by or on
behalf of the Lender under the Bankruptcy Code or any other similar Law
now or hereafter in effect;
(iii) the inspection and audit of the books and
records of the Loan Parties;
(iv) the inspection, management, protection, custody,
appraisement, sale or collection of, or realization upon, the
Collateral and any other assets or properties securing the payment of
the Obligations;
(v) the collection or attempted collection of the
Obligations; and
(vi) the perfection, protection, continuation,
enforcement or termination of any Liens granted to the Lender to secure
payment of the Obligations.
SECTION 6.12 PAYMENT OF LIABILITIES. Except to the extent the validity
or amount thereof is being contested in good faith and by appropriate
proceedings with reserves maintained in amounts satisfactory to the Lender, the
Borrower and Superior will pay or discharge or cause to be paid or discharged:
(i) on or prior to the date when due, all lawful
claims of materialmen, mechanics, carriers, warehousemen, landlords and
other like Persons that, if unpaid, might result in the creation of a
Lien upon any property of the Borrower or Superior;
(ii) on or prior to the date when due, all other
lawful claims which, if unpaid, might result in the creation of a Lien
upon any property of the Borrower or Superior; and
(iii) all other current liabilities of the Borrower
and Superior which are overdue more than sixty (60) days.
SECTION 6.13 TRUE DISCLOSURES. The Borrower and Superior will ensure
that all written information, exhibits and reports furnished to the Lender under
the Loan Documents do not and will not contain any untrue statement of a
material fact and do not and will not omit to state any material fact or any
fact necessary to make the statements contained therein not misleading in light
of the circumstances that existed at the time such statement was made.
SECTION 6.14 SECURITY INTERESTS. (a) The Borrower and Superior will
defend the Collateral owned by it against all claims and demands of all Persons
at any time claiming the same or any interest therein. The Borrower and Superior
will comply with the requirements of all state and federal laws in order to
grant to the Lender valid and perfected first priority security interests in the
Collateral owned by it, subject to Permitted Liens. The Borrower and Superior
hereby irrevocably authorize the Lender at any
22
time and from time to time to file in any jurisdiction any initial financing
statements, amendments thereto and continuations thereof describing or relating
to the Collateral. The Borrower and Superior agree to furnish any such
information to the Lender promptly upon request. The Borrower and Superior also
ratify their authorization for the Lender to have filed in any jurisdiction any
like initial financing statements or amendments thereto if filed prior to the
Closing Date.
(b) The Borrower and Superior shall use their best efforts to
obtain a landlord's agreement, mortgagee agreement or bailee letter, as
applicable, from the lessor of each leased property or mortgagee of owned
property or with respect to any warehouse, processor or other location where
Collateral is located, which agreement or letter shall contain a waiver or
subordination of all Liens or claims that the landlord, mortgagee or bailee may
assert against the Collateral at that location, and shall otherwise be
satisfactory in form and substance to the Lender (each such agreement or letter
being a "Collateral Access Agreement"). After the Closing Date, no real property
or warehouse space shall be leased or acquired by the Borrower unless the
Borrower shall have first used its best efforts to obtain a Collateral Access
Agreement with respect to such location and all other terms and conditions of
this Agreement with respect to the Collateral shall have been complied with.
SECTION 6.15 FURTHER ASSURANCES. (a) Promptly upon request by the
Lender, the Borrower and Superior will take such further actions and execute,
acknowledge, deliver, record, re-record, file, re-file, register and
re-register, any and all such further, security agreements, mortgages,
assignments, estoppel certificates, financing statements and continuations
thereof, termination statements, notices of assignment, transfers, certificates,
assurances and other instruments the Lender may reasonably require from time to
time in order to (i) subject to the Liens created by any of the Collateral
Documents any of the properties, rights or interests covered by any of the
Collateral Documents, (ii) perfect and maintain the validity, effectiveness and
priority of any of the Collateral Documents and the Liens intended to be created
thereby, and (iii) better assure, convey, grant, assign, transfer, preserve,
protect and confirm to the Lender the rights granted or now or hereafter
intended to be granted to the Lender under any Loan Document or under any other
document executed in connection therewith. The Borrower and Superior further
agree that a carbon, photographic, facsimile or other reproduction of any
financing statement or the Collateral Documents shall be sufficient as a
financing statement and amendments, renewals and continuations thereof, and may
be filed as such. THE BORROWER AND SUPERIOR AUTHORIZE THE LENDER TO FILE AND
RECORD, AND FURTHER IRREVOCABLY APPOINT THE LENDER, ITS AGENTS AND EMPLOYEES, AS
ITS ATTORNEY-IN-FACT TO EXECUTE, DELIVER, FILE AND RECORD IN THE NAME OF THE
BORROWER AND SUPERIOR, ANY FINANCING STATEMENTS OR ANY OF THE OTHER
AFOREMENTIONED ITEMS AT ANY TIME AFTER THE BORROWER OR SUPERIOR HAS FAILED TO
DELIVER THE SAME TO THE LENDER AFTER REQUEST THEREFOR BY THE LENDER. The
Borrower and Superior acknowledge that the provisions of 20 Pa.C.S. Section 5601
shall not apply to the foregoing power of attorney granted to the Lender.
(b) The Borrower and Superior will provide such additional
documents, and perform such additional acts, as the Lender may reasonably deem
necessary to effectively carry out the purposes of, or to confirm, this
Agreement, the Collateral Documents and the other Loan Documents, or to enable
the Lender to enforce any of rights hereunder or thereunder.
ARTICLE VII. NEGATIVE COVENANTS
Until payment in full of the Standby Term Loan and all other
Obligations, the Borrower and Superior, as applicable, covenant and agree to
comply with each of the covenants set forth below in this Article VI unless the
Lender waives compliance in writing.
SECTION 7.01 FINANCIAL COVENANTS. (a) FIXED CHARGE COVERAGE RATIO. The
Borrower and Superior shall not permit Superior's Fixed Charge Coverage Ratio to
be less than 1.1 to 1.0 as of the last
23
day of each Fiscal Quarter for the four (4) consecutive Fiscal Quarters then
ending, treating each such period as one accounting period.
(b) TANGIBLE NET WORTH. The Borrower and Superior shall not
permit Superior's Tangible Net Worth as of the last day of any Fiscal Quarter
set forth in the table below to be less than the amount set forth in such table:
APPLICABLE FISCAL QUARTERS REQUIRED TANGIBLE BASE
-------------------------- ----------------------
Each Fiscal Quarter ending during the $4,800,000
period from the Closing Date through
and including the Fiscal Quarter
ending December 31, 2004
Fiscal Quarter ending December 31, 2004 $4,800,000 plus, on a cumulative
and each Fiscal Quarter thereafter basis, 40.0% of Superior's Net
Income for the Fiscal Year ending
December 31, 2004 and each Fiscal
Year thereafter (the Borrower's
Net Income for each Fiscal Year
to be determined by a review of
the reviewed financial statements
of Superior required to be
delivered to the Lender under
Section 6.02(a)(ii) hereof)
SECTION 7.02 FUNDAMENTAL CHANGES. Neither the Borrower nor Superior
shall merge, consolidate or amalgamate with or into, or convey, transfer, lease
or otherwise dispose of (whether in one transaction or in a series of
transactions) all or substantially all of its assets (whether now owned or
hereafter acquired) to or in favor of any Person, or dissolve, liquidate,
reorganize or adopt a plan of exchange as to its equity interests or permit
itself to be the subject of an Acquisition.
SECTION 7.03 INDEBTEDNESS. Neither the Borrower nor Superior shall
create, incur, assume, suffer to exist, or otherwise become or remain directly
or indirectly liable with respect to, any Indebtedness, except (i) Indebtedness
incurred pursuant to this Agreement; (ii) Indebtedness existing on the Closing
Date and set forth on Schedule 5.07; (iii) additional Indebtedness incurred
after the Closing Date by the Borrower and Superior, jointly or severally, in an
aggregate amount outstanding at any time not to exceed $1,500,000, and (iv)
accounts payable to trade creditors on ordinary and customary terms arising out
of transactions (other than borrowings) in the ordinary course of business,
provided that such accounts payable shall be promptly paid and discharged within
sixty (60) days from the date when due, except those accounts which are validly
being contested.
SECTION 7.04 INVESTMENTS, ACQUISITIONS, LOANS AND ADVANCES. Neither the
Borrower nor Superior shall purchase or acquire (or make any commitment
therefor) any capital stock, equity interest, partnership interest or any
obligations or other securities of, or any interest in, any Person, or make or
commit to make any Acquisitions, or make or commit to make any advance, loan,
extension of credit or capital contribution to or any other investment in, any
Person (collectively, "Investments"), except the following:
(i) Investments existing on the Closing Date and
described on Schedule 7.04;
24
(ii) extensions of credit in the nature of accounts
receivable or notes receivable arising from the sale or lease of goods
or services in the ordinary course of business;
(iii) loans and advances to an employee in an amount
not to exceed $10,000 outstanding at any time;
(iv) Hedging Contracts or other agreements between
the Lender and the Borrower which give rise to Hedging Obligations; and
(v) the Borrower and Superior may acquire all or
substantially all of the assets or stock of any Person (the "Target")
in any Fiscal Year (in each case, a "Permitted Acquisition") subject to
the satisfaction of each of the following conditions:
(A) the Lender shall receive at least
fifteen (15) Business Days' prior written notice of such
proposed Permitted Acquisition, which notice shall include a
reasonably detailed description of such proposed Permitted
Acquisition;
(B) such Permitted Acquisition shall be
consensual and shall have been approved by the target's board
of directors;
(C) the sum of all amounts payable (whether
contingent or otherwise) and other consideration in connection
with any Permitted Acquisitions (including all transaction
costs and all Indebtedness, liabilities and contingent
obligations incurred or assumed in connection therewith or
otherwise reflected on a consolidated balance sheet of
Borrower and Target) shall not exceed $1,500,000 during any
Fiscal Year;
(D) the business and assets acquired in such
Permitted Acquisition shall be free and clear of all Liens,
and
(E) at or prior to the closing of any
Permitted Acquisition, the Lender will be granted a first
priority perfected Lien (subject to Permitted Liens) in all
assets acquired pursuant thereto or in the assets of the
Target.
SECTION 7.05 AFFILIATED TRANSACTIONS. Neither the Borrower nor Superior
shall enter into or carry out any transaction with Affiliates (including,
without limitation, purchasing property or services from or selling property or
services to any Affiliate), except (i) those transactions set forth on Schedule
7.05 attached hereto; and (ii) the entry into and carrying out of sales and
purchases of goods and services or leases of real property by the Borrower or
Superior with Affiliates if done in the ordinary course of business, pursuant to
the reasonable requirements of its business upon terms no less favorable than
would be obtainable in a comparable arm's-length transaction and at least as
favorable as comparable sales to or purchases from non-affiliated Persons or
entities, if any.
SECTION 7.06 BUSINESS AND ACCOUNTING CHANGES. Neither the Borrower nor
Superior shall (i) change its limited liability company name or the name under
or by which it conducts its business, unless prior thereto the Lender has
received not less than thirty (30) days prior written notice thereof, (ii)
directly or indirectly engage in any business which would represent a material
change from the business presently being conducted by it, (iii) discontinue any
material part of the business presently being conducted by it,
25
or (iv) make any significant change in accounting treatment or reporting
practices, except as required by GAAP, or change the fiscal year of the Borrower
or Superior.
SECTION 7.07 INSURANCE. Neither the Borrower nor Superior shall insure
itself or any of its properties through captive insurance companies or through
self-insurance, except for worker's compensation self-insurance.
SECTION 7.08 DOCUMENTS. Neither the Borrower nor Superior shall furnish
any certificate nor other document to the Lender in connection with the
transactions contemplated in this Agreement which contains any material untrue
statement, or which omits to state any material fact necessary to make it not
misleading.
SECTION 7.09 ENVIRONMENTAL CONCERN MATERIALS. Neither the Borrower nor
Superior shall permit any Environmental Concern Materials to be stored,
contained, incorporated or used in or on any of its business locations other
than in compliance with all applicable Environmental Laws and other applicable
Laws, or allow to occur any Release on or from any such properties at any time
where such Release could reasonably be expected to have a Material Adverse
Effect.
SECTION 7.10 DISPOSITION OF ASSETS. Neither the Borrower nor Superior
shall directly or indirectly, make a Disposition of (whether in one or a series
of transactions) any property (including accounts and notes receivable, with or
without recourse) or enter into any agreement to do any of the foregoing, except
(i) Dispositions of Inventory, or used, worn-out or surplus equipment, all in
the ordinary course of business; and (ii) the sale of equipment to the extent
that such equipment is exchanged for credit against the purchase price of
similar replacement equipment which is made subject to the Lender's first
priority Lien, or the proceeds of such sale are reasonably promptly applied to
the purchase price of such replacement equipment.
SECTION 7.11 GUARANTEES. Neither the Borrower nor Superior shall
create, incur, assume or suffer to exist any Guarantee except (i) Guarantees in
favor of the Lender under the Loan Documents; (ii) Guarantees existing or
contemplated as of the Closing Date and listed in Schedule 7.11 attached hereto;
(iii) contingent liabilities arising from the endorsement of negotiable or other
instruments for deposit or collection or similar transactions in the ordinary
course of business.
SECTION 7.12 RENTALS. Neither the Borrower nor Superior shall create or
suffer to exist any obligations for the payment of rent for any property under a
lease or agreement to lease, except for:
(i) leases for property having a fair market value
greater than $25,000 in existence on the Closing Date and listed in
Schedule 7.12 attached hereto, and any renewal, extension or
refinancing thereof;
(ii) operating leases entered into after the Closing
Date in the ordinary course of business not exceeding payment
obligations of the Borrower or Superior in the aggregate amount of
$200,000 during any Fiscal Year; and
(iii) the Equipment Lease and other equipment leases
in effect between the Borrower and Superior relating to equipment
leased by the Borrower to Superior.
SECTION 7.13 CHANGES IN ORGANIZATION DOCUMENTS. Neither the Borrower
nor Superior shall amend in any material respect its certificate of limited
partnership, articles of incorporation, or other Organization Documents without
providing at least thirty (30) days' prior written notice to the Lender and, in
the event such change would be adverse to the Lender as determined by the Lender
in its sole discretion, obtaining the prior written consent of the Lender.
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SECTION 7.14 THE EQUIPMENT LEASE. The Borrower and Superior shall not
amend or modify the Equipment Lease in any material respect, including without
limitation the termination date of the Equipment Lease, nor shall the Borrower
or Superior terminate or agree to terminate the Equipment Lease prior to the
Standby Term Loan Maturity Date.
ARTICLE VIII. EVENTS OF DEFAULT
The occurrence or existence of any one or more of the following events
or conditions (whatever the reason for such occurrence or existence and whether
voluntary, involuntary or effected by operation of Law) shall constitute an
"Event of Default" under this Agreement:
SECTION 8.01 FAILURE TO MAKE PAYMENTS. (a) The failure of the Borrower
to pay within five (5) days of when due any principal of, or interest on, the
Standby Term Loan, provided, such five (5) day grace period shall not apply to
the payment of the outstanding principal balance of, and all interest accrued
on, the Standby Term Tranche at maturity (whether by demand, stated maturity or
otherwise).
(b) The failure of the Borrower to pay when due any indemnity,
expense or other like amount due under this Agreement or any of the other Loan
Documents and such failure continues for five (5) days after written notice
thereof from the Lender to the Borrower.
SECTION 8.02 REPRESENTATIONS AND WARRANTIES. Any representation or
warranty made or deemed to have been made by the Borrower under this Agreement
or any of the other Loan Documents or any statement made by the Borrower in any
financial statement, certificate, report, exhibit or document furnished by the
Borrower to the Lender pursuant to this Agreement or any of the other Loan
Documents shall prove to have been false or misleading in any material respect
as of the time when made or when reaffirmed (including by omission of material
information necessary to make such representation, warranty or statement, in
light of the circumstances under which it was made, not misleading).
SECTION 8.03 COVENANTS AND AGREEMENTS. The failure of the Borrower to
observe, perform or abide by any covenant, agreement or provision of this
Agreement or any of the other Loan Documents to which it is a party if such
failure shall continue for a period of fifteen (15) days after the earlier to
occur of (i) the date upon which a Responsible Officer knew or reasonably should
have known of such failure, or (ii) written notice from the Lender to the
Borrower of such failure. Notwithstanding the foregoing, as to payment
obligations of the Borrower and the covenants contained in Sections 6.06,
Article VII or any Hedging Contracts or other agreements between the Lender or
its Affiliates and the Borrower which give rise to Hedging Obligations, there
shall be no fifteen (15) day grace period.
SECTION 8.04 DEFAULTS WITH RESPECT TO OTHER OBLIGATIONS. (a) Any Loan
Party (i) fails to make any payment when due (whether by scheduled maturity,
required prepayment, acceleration, demand, or otherwise), in respect of any
Indebtedness or Guarantee owing to the Lender, including any of the Guaranty
Agreements, or (ii) fails to perform or observe any other condition or covenant,
or any other event shall occur or condition exist, under any agreement or
instrument relating to any such Indebtedness or Guarantee and such failure
continues after the applicable grace or notice period, if any, specified in the
relevant document on the date of such failure, if the effect of such failure,
event or condition is to cause, or to permit the holder or holders of such
Indebtedness or beneficiary or beneficiaries of such Indebtedness (or a trustee
or agent on behalf of such holder or holders or beneficiary or beneficiaries) to
cause such Indebtedness to be declared to be due and payable prior to its stated
maturity, or such Guarantee to become payable or cash collateral in respect
thereof to be demanded, or (iii) any other event of default shall occur under
any Guarantor's credit arrangements with the Lender under which the Guarantor is
the borrower.
(b) Any Loan Party (i) fails to make any payment when due (whether by
scheduled maturity, required prepayment, acceleration, demand, or otherwise), in
respect of any Indebtedness or Guarantee
27
owing to the Lender or having an aggregate principal amount (including undrawn
committed or available amounts and including amounts owing to all creditors
under any combined or syndicated credit arrangement) greater than $500,000,
including any agreement between the Guarantor and the Lender, and such failure
continues after the applicable grace or notice period, if any, specified in the
relevant document on the date of such failure except to the extent the validity
or amount thereof is being contested in good faith by the Borrower with reserves
maintained in amounts satisfactory to the Lender; or (ii) fails to perform or
observe any other condition or covenant, or any other event shall occur or
condition exist, under any agreement or instrument relating to any such
Indebtedness or Guarantee and such failure continues after the applicable grace
or notice period, if any, specified in the relevant document on the date of such
failure, if the effect of such failure, event or condition is to cause, or to
permit the holder or holders of such Indebtedness or beneficiary or
beneficiaries of such Indebtedness (or a trustee or agent on behalf of such
holder or holders or beneficiary or beneficiaries) to cause such Indebtedness to
be declared to be due and payable prior to its stated maturity, or such
Guarantee to become payable or cash collateral in respect thereof to be
demanded.
SECTION 8.05 INSOLVENCY AND OTHER RELATED EVENTS. (a) An Insolvency
Proceeding shall be instituted by a Loan Party with respect to itself and its
properties, or a Loan Party shall take any action in furtherance of an
Insolvency Proceeding.
(b) A Loan Party (i) has an involuntary Insolvency Proceeding
commenced or filed against it and any such proceeding or petition shall not be
dismissed within ninety (90) days after commencement; (ii) admits the material
allegations of a petition against it in any Insolvency Proceeding, or an order
for relief (or similar order under non-U.S. law) is ordered in any Insolvency
Proceeding; or (iii) acquiesces in the appointment of a receiver, trustee,
custodian, conservator, liquidator, mortgagee in possession (or agent therefor),
or other similar Person for itself or a substantial portion of its property or
business.
(c) A Loan Party shall (i) become insolvent, or generally fail
to pay, become unable to pay, or state that it is or will be unable to pay, its
debts as they become due, (ii) voluntarily cease to conduct its business in the
ordinary course, or (iii) make a general assignment for the benefit of
creditors.
(d) The Lender shall have determined in good faith and in the
exercise of reasonable (from the perspective of a commercial lender) credit
judgment (which determination shall be conclusive) that an event or occurrence
has occurred which could reasonably be expected to result in a Material Adverse
Effect.
SECTION 8.06 FINAL JUDGMENTS. A Loan Party shall suffer a Final
Judgment individually or in the aggregate in excess of $500,000 and the same
shall not be released, discharged, vacated or fully bonded within thirty (30)
days of its entry.
SECTION 8.07 EXECUTION ON PROPERTIES. A writ or warrant of attachment,
garnishment, execution, distraint or similar process shall have been issued
against the Borrower or any of its properties which shall not be released,
discharged, vacated or fully bonded within thirty (30) days after the same shall
have been levied.
SECTION 8.08 ERISA EVENTS. Any of the following events shall occur: (i)
An ERISA Event shall occur with respect to a Pension Plan or Multiemployer Plan
of the Borrower which has resulted or could reasonably be expected to result in
liability of the Borrower under Title IV of ERISA to the Pension Plan,
Multiemployer Plan or the PBGC in an aggregate amount in excess of $500,000; or
(ii) the aggregate amount of Unfunded Pension Liability among all Pension Plans
of the Borrower at any time exceeds $500,000; or (iii) the Borrower or any ERISA
Affiliate shall fail to pay when due, after the expiration of any applicable
grace period, any installment payment with respect to its withdrawal liability
under Section 4201 of ERISA under a Multiemployer Plan in an aggregate amount in
excess of $500,000.
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SECTION 8.09 SUSPENSION OF OPERATIONS. The operations of the Borrower
are suspended and such suspension could reasonably be expected to have a
Material Adverse Effect or there shall occur any strike, lockout, labor dispute,
embargo, condemnation, act of God or public enemy, or other event or
circumstance, which in any such case causes, for more than ten (10) consecutive
days, the cessation or substantial curtailment of revenue producing activities
at any facility of the Borrower if such event or circumstance is not covered by
business interruption insurance and could have a Materially Adverse Effect.
SECTION 8.10 THE COLLATERAL. There shall occur any uninsured material
damage to, or loss, theft or destruction of, any Collateral having a fair market
value in excess of $500,000, or a Person (other than the Lender) shall obtain
possession of the Collateral by levy, distraint, replevin, self-help or other
means of exercising rights as a creditor, or the Lender's Liens in the
Collateral are or become unperfected or no longer constitute first priority
liens or security interests therein (subject only to Permitted Liens).
SECTION 8.11 TERMINATION OF LOAN DOCUMENTS. This Agreement or any other
Loan Document or any material term or provision hereof or thereof shall cease to
be in full force and effect (except in accordance with the express terms of this
Agreement or such other Loan Document), or the Borrower or any other Person
shall, or shall purport to, terminate (except in accordance with the terms of
this Agreement or such other Loan Document), repudiate, declare voidable or void
or otherwise contest, this Agreement or such other Loan Document or term or
provision hereof or thereof or any obligation or liability of the Borrower or
such other Person hereunder or thereunder, as the case may be.
SECTION 8.12 CRIMINAL ACTIVITIES. The indictment of a Loan Party under
any criminal statute, or commencement of criminal or civil proceedings pursuant
to which statute or proceedings the penalties or remedies sought or available
include forfeiture of any of the property of such loan Party.
SECTION 8.13 CHANGE OF CONTROL. A Change of Control occurs unless as
part of an Acquisition consented to in writing by the Lender.
SECTION 8.14 THE EQUIPMENT LEASE. The Equipment Lease terminates prior
to the Standby Term Loan Maturity Date or a default shall occur under the
Equipment Lease, including, but not limited to, a default by Superior in the
payment of any lease payments required to be made under the Equipment Lease when
due.
ARTICLE IX. REMEDIES
SECTION 9.01 RIGHTS OF THE LENDER UPON DEFAULT. Upon the occurrence of
an Event of Default:
(i) If the Event of Default that has occurred is an
Event of Default other than those specified in Section 8.05, then the
Lender may (A) declare the Standby Term Loan Commitment to be
terminated, and the Lender shall have no further obligation to make
Advances, and (B) declare the unpaid principal amount of the Standby
Term Loan, interest accrued thereon and all other Obligations to be
immediately due and payable without presentment, demand, protest or
further notice or act of any kind, all of which are hereby expressly
waived by the Borrower, and an action therefor shall immediately
accrue;
(ii) If the Event of Default that has occurred is an
Event of Default specified in Section 8.05, then (A) the Standby Term
Loan Commitment shall automatically terminate and the Lender shall have
no further obligation to make any Advances, and (B) the unpaid
principal amount of the Standby Term Loan, interest
29
accrued thereon and all other Obligations shall automatically become
due and payable without presentment, demand, protest or further act or
notice of the Lender of any kind, all of which are hereby expressly
waived by the Borrower, and an action therefor shall immediately
accrue;
(iii) With respect to the Collateral, the Lender
shall have all of the rights and remedies of a secured party or
otherwise afforded to it by Law and such additional rights and remedies
as are contained in the Loan Documents;
(iv) At any time after ten (10) days' prior written
notice from the Lender to the Borrower of its intention to apply for a
receiver, the Lender shall be entitled to apply for and have a receiver
appointed under state or federal law by a court of competent
jurisdiction in any action taken by the Lender to enforce the Lender's
rights and remedies under this Agreement, the Collateral Documents and
the other Loan Documents in order to protect, preserve, manage, sell
and otherwise dispose of all or any portion of the Collateral and
continue the operation of the business of the Borrower and to collect
all revenues and profits thereof and apply the same to the payment of
all expenses and other charges of such receivership, including the
compensation of the receiver, and to the payment of the Standby Term
Loan and other Reimbursable Costs and Expenses due hereunder and under
the Loan Documents until a sale or other disposition of such
Collateral. TO THE EXTENT PERMITTED BY APPLICABLE LAW, THE BORROWER
KNOWINGLY, INTENTIONALLY, VOLUNTARILY AND, ON THE ADVICE OF SEPARATE
COUNSEL OF THE BORROWER, IRREVOCABLY CONSENTS TO AND WAIVES ANY RIGHT
TO OBJECT TO OR OTHERWISE CONTEST THE APPOINTMENT OF A RECEIVER AS
PROVIDED FOR HEREIN. THE BORROWER ACKNOWLEDGES THAT (i) RIGHT TO HAVE A
RECEIVER APPOINTED WITHOUT CONTEST IS VERY IMPORTANT TO THE LENDER IN
CONNECTION WITH THE ENFORCEMENT OF THE LENDER'S RIGHTS AND REMEDIES
UNDER THIS AGREEMENT, THE COLLATERAL DOCUMENTS AND THE OTHER LOAN
DOCUMENTS, AND (ii) THE AVAILABILITY OF SUCH APPOINTMENT AS A REMEDY
WAS A MATERIAL INDUCEMENT TO THE LENDER TO ENTER INTO THIS AGREEMENT
AND MAKE THE STANDBY TERM LOAN AVAILABLE TO THE BORROWER. THE BORROWER
AGREES TO ENTER INTO ANY AND ALL STIPULATIONS IN ANY LEGAL ACTIONS, OR
AGREEMENTS OR OTHER INSTRUMENTS IN CONNECTION WITH THE FOREGOING AND TO
COOPERATE FULLY WITH THE LENDER IN CONNECTION WITH THE ASSUMPTION AND
EXERCISE OF CONTROL BY THE RECEIVER OVER ALL OR ANY PORTION OF THE
COLLATERAL;
(v) In addition to any rights and remedies of the
Lender provided by Law, the Lender is authorized at any time and from
time to time, without prior notice to the Borrower, any such notice
being waived by the Borrower to the fullest extent permitted by law, to
set off and apply any and all deposits (general or special, time or
demand, provisional or final) at any time held by, and other
Indebtedness at any time owing by, the Lender to or for the credit or
the account of the Borrower against any and all Obligations owing to
the Lender, now or hereafter existing, irrespective of whether or not
the Lender shall have made demand under this Agreement or any Loan
Document and although such Obligations may be contingent or unmatured.
The Lender agrees promptly to notify the Borrower after any such
set-off and application made by the Lender; provided, however, that the
failure to give such notice shall not affect the validity of such
set-off and application; and
(vi) The following paragraph sets forth a warrant of
authority for an attorney to confess judgment against the Borrower. In
granting this warrant to confess judgment, the Borrower hereby
knowingly, intentionally, voluntarily and, on the advice of separate
counsel of the Borrower, unconditionally waives any and all rights the
Borrower has or may have to prior notice and an opportunity for hearing
before a judgment can be entered hereunder:
30
THE BORROWER UNCONDITIONALLY AND IRREVOCABLY AUTHORIZES AND
EMPOWERS ANY ATTORNEY OR ANY PROTHONOTARY, CLERK OF COURT OR COURT OF
RECORD, AS ATTORNEY FOR THE BORROWER, TO APPEAR FOR THE BORROWER IN
SUCH COURT AT ANY TIME AFTER THE OCCURRENCE OF AN EVENT OF DEFAULT AND
CONFESS JUDGMENT AGAINST THE BORROWER IN FAVOR OF THE LENDER FOR (i)
POSSESSION OF ANY OF THE COLLATERAL IN ANY ACTION FOR REPLEVIN
INSTITUTED BY THE LENDER, AND (ii) FOR ALL OR ANY PORTION OF THE
OUTSTANDING BALANCE OF THE OBLIGATIONS (INCLUDING WITHOUT LIMITATION,
THE OUTSTANDING PRINCIPAL BALANCE OF THE TERM LOAN), TOGETHER WITH
UNPAID INTEREST, COSTS OF SUIT AND ATTORNEYS' FEES ADDED FOR COLLECTION
IN AN AMOUNT EQUAL TO THE GREATER OF FIVE PERCENT (5.0%) OF THE SUM DUE
OR $15,000. THE BORROWER ALSO RELEASES ALL ERRORS, AND TO THE EXTENT
PERMITTED BY LAW, WAIVES AND RELEASES ALL RELIEF FROM ANY AND ALL
APPRAISEMENT, STAY OR EXEMPTION LAW OF ANY STATE NOW IN FORCE OR
HEREAFTER ENACTED. IF A COPY OF THIS AGREEMENT, VERIFIED BY AFFIDAVIT
OF THE LENDER OR SOMEONE ON BEHALF OF THE LENDER, SHALL HAVE BEEN FILED
IN SUCH ACTION, IT SHALL NOT BE NECESSARY TO FILE AN ORIGINAL OF THIS
AGREEMENT AS A WARRANT OF ATTORNEY. THE AUTHORITY AND POWER TO APPEAR
FOR AND ENTER JUDGMENT AGAINST THE BORROWER SHALL NOT BE EXHAUSTED BY
THE INITIAL EXERCISE THEREOF OR BY ANY IMPERFECT EXERCISE THEREOF AND
SHALL NOT BE EXTINGUISHED BY ANY JUDGMENT ENTERED PURSUANT THERETO; THE
AUTHORITY AND POWER MAY BE EXERCISED ON ONE OR MORE OCCASIONS, FROM
TIME TO TIME, IN THE SAME OR DIFFERENT JURISDICTIONS, AS OFTEN AS THE
LENDER SHALL DEEM NECESSARY OR DESIRABLE, FOR ALL OF WHICH THIS
AGREEMENT OR A VERIFIED COPY HEREOF SHALL BE A SUFFICIENT WARRANT. TO
THE EXTENT PERMITTED BY LAW, INTEREST SHALL ACCRUE ON ANY JUDGMENT AT
THE DEFAULT RATE APPLICABLE TO THE PRIME RATE TRANCHES.
SECTION 9.02 CUMULATIVE REMEDIES. The rights, remedies and powers of
the Lender under this Agreement and the other Loan Documents are cumulative,
irrevocable and non-exclusive of any rights, remedies or powers which the Lender
would otherwise have, including, without limitation, the right of specific
performance.
SECTION 9.03 WAIVER OF RIGHT TO MARSHAL. Each of the Borrower, the
General Partner and Superior for itself and all who may claim through or under
it, hereby expressly waives and releases all rights to have the Collateral, or
any part thereof, or any other of its properties, marshaled on any foreclosure,
sale or other enforcement thereof, and the Lender, or any court in which the
foreclosure of the liens or security interests in the Collateral are sought,
shall have the right as aforesaid to sell the Collateral as an entirety in a
single parcel. The Borrower, the General Partner and Superior upon the request
of the Lender, shall provide the Lender with a specific written waiver to
evidence the intent of this Section 9.03.
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ARTICLE X. MISCELLANEOUS
SECTION 10.01 AUTOMATIC DEBITS OF FEES. With respect to any commitment
or other fee, or any other cost or expense (including attorneys' fees) due and
payable to the Lender under the Loan Documents, the Borrower hereby irrevocably
authorizes the Lender to debit any deposit account of the Borrower with the
Lender in an amount such that the aggregate amount debited from all such deposit
accounts does not exceed such fee or other cost or expense. If there are
insufficient funds in such deposit accounts to cover the amount of the fee or
other cost or expense then due, such debits will be reversed (in whole or in
part, in the Lender's sole discretion) and such amount not debited shall be
deemed to be unpaid. No such debit under this Section shall be deemed a set-off.
SECTION 10.02 RIGHTS IN PROPERTY HELD BY THE LENDER. As security for
the prompt and full satisfaction of the Obligations, the Borrower hereby
assigns, transfers and sets over to each Lender all of its right, title and
interest in and to, and grants the Lender a lien on and security interest in,
all amounts that may be owing from time to time by the Lender to the Borrower in
any capacity, including, without limitation, any balance or share belonging to
the Borrower of any deposit or other account with the Lender (general or
special, time or demand, provisional or final), which lien and security interest
shall be independent of any right of set-off which the Lender may have
otherwise.
SECTION 10.03 COLLATERAL. All Collateral of any kind held by the Lender
shall stand as one general, continuing collateral security for the Obligations
and all other liabilities and Indebtedness now existing or hereafter incurred by
the Borrower to the Lender, and may be retained by the Lender until all of such
Obligations have been paid in full.
SECTION 10.04 NO THIRD PARTY RIGHTS. Nothing in this Agreement, whether
expressed or implied, shall be construed to give to any Person other than the
parties hereto any legal or equitable right, remedy or claim under or in respect
of this Agreement, it being expressly understood that this Agreement is intended
for the sole protection and legal benefit of the Borrower, the Lender and their
permitted successors and assigns, and no other Person shall be a direct or
indirect legal beneficiary of, or have any direct or indirect cause of action or
claim in connection with, this Agreement or any of the other Loan Documents.
SECTION 10.05 CONSTRUCTION. The provisions of this Agreement shall be
in addition to those of the other Loan Documents, all of which shall be
construed as complementing each other and as augmenting and not restricting the
rights of the Lender. Nothing herein contained shall prevent the Lender from
enforcing, in accordance with their respective terms, any of the Loan Documents
on a several basis. In no event shall the rights of the Lender hereunder and
under the other Loan Documents be construed to grant the Lender the right to, or
be deemed to indicate that, the Lender is in control of the business, management
or properties of the Borrower or have power over the daily management functions
and operating decisions made by the Borrower. To the extent any provision of
this Agreement or the other Loan Documents shall be held to be in violation of
any applicable Law, then the Lender shall not be required, to the extent of such
violation, to perform its obligations in connection with such provision.
SECTION 10.06 WAIVER. No course of dealing and no failure or delay on
the part of the Lender to exercise any right, power or privilege under this
Agreement shall operate as a waiver thereof, nor shall any single or partial
exercise of any right, power or privilege preclude any other or further exercise
of any other right, power or privilege.
SECTION 10.07 INDEMNIFICATION BY THE BORROWER. (a) Whether or not the
transactions contemplated hereby are consummated, the Borrower shall indemnify,
defend and hold the Lender and its officers, directors, employees, counsel,
agents and attorneys-in-fact (each, an "Indemnified Person") harmless from and
against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, charges, expenses and disbursements (including
reasonable attorneys' fees) of any
32
kind or nature whatsoever which may at any time (including at any time following
repayment of the Standby Term Loan) be imposed on, incurred by or asserted
against any such Person in any way relating to or arising out of this Agreement
or any document contemplated by or referred to herein, or the transactions
contemplated hereby, or any action taken or omitted by any such Person under or
in connection with any of the foregoing, including with respect to any
investigation, litigation or proceeding (including any Insolvency Proceeding or
appellate proceeding) related to or arising out of this Agreement or the Standby
Term Loan or the use of the proceeds thereof, whether or not any Indemnified
Person is a party thereto (all the foregoing, collectively, the "Indemnified
Liabilities"); provided, that the Borrower shall have no obligation hereunder to
any Indemnified Person with respect to Indemnified Liabilities resulting solely
from the gross negligence or willful misconduct of such Indemnified Person. The
agreements in this Section shall survive payment of all other obligations.
(b) The Borrower shall indemnify, defend and hold harmless
each Indemnified Person, from and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, charges, expenses
or disbursements (including reasonable attorneys' fees and the allocated cost of
internal environmental audit or review services), which may be incurred by or
asserted against such Indemnified Person in connection with or arising out of
any pending or threatened investigation, litigation or proceeding, or any action
taken by any Person, with respect to any Environmental Claim arising out of or
related to any property subject to a mortgage or deed of trust in favor of the
Lender except to the extent resulting solely from the gross negligence or
willful misconduct of such Indemnified Person. In no event shall any site visit,
observation, or testing by the Lender (or any contractee of the Lender) be
deemed a representation or warranty that Environmental Concern Materials are or
are not present in, on, or under, the site, or that there has been or shall be
compliance with any Environmental Law. Neither the Borrower nor any other Person
is entitled to rely on any site visit, observation, or testing by the Lender.
The Lender owes no duty of care to protect the Borrower or any other Person
against, or to inform the Borrower or any other party of, any Environmental
Concern Materials or any other adverse condition affecting any site or property.
(c) The obligations in this Section shall survive payment of
all other Obligations. At the election of any Indemnified Person, the Borrower
shall defend such Indemnified Person using legal counsel satisfactory to such
Indemnified Person in such Person's sole discretion, at the sole cost and
expense of the Borrower. All amounts owing under this Section shall be paid
within thirty (30) days after demand.
SECTION 10.08 PAYMENTS SET ASIDE. To the extent that the Borrower makes
a payment to the Lender, or the Lender exercises its right of set-off, and such
payment or the proceeds of such set-off or any part thereof are subsequently
invalidated, declared to be fraudulent or preferential, set aside or required
(including pursuant to any settlement entered into by the Lender in its
discretion) to be repaid to a trustee, receiver or any other party, in
connection with any Insolvency Proceeding or otherwise, then to the extent of
such recovery the obligation or part thereof originally intended to be satisfied
shall be revived and continued in full force and effect as if such payment had
not been made or such set-off had not occurred.
SECTION 10.09 WAIVER OF JURY TRIAL. THE BORROWER AND THE LENDER HEREBY
EXPRESSLY WAIVE ANY RIGHT TO TRIAL BY JURY OR ANY CLAIM, DEMAND, ACTION OR CAUSE
OF ACTION (I) ARISING UNDER THIS AGREEMENT, ANY OTHER LOAN DOCUMENT OR ANY OTHER
DOCUMENT OR INSTRUMENT ATTACHED HERETO, REFERRED TO HEREIN OR DELIVERED IN
CONNECTION HEREWITH, OR (II) IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL
TO THE DEALINGS OF THE BORROWER WITH RESPECT TO THIS AGREEMENT, ANY OTHER LOAN
DOCUMENT OR INSTRUMENT ATTACHED HERETO, REFERRED TO HEREIN OR DELIVERED IN
CONNECTION HEREWITH, OR THE TRANSACTIONS RELATED HERETO OR THERETO, IN EACH CASE
WHETHER SOUNDING IN CONTRACT OR TORT OR OTHERWISE; AND THE BORROWER AND THE
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LENDER HEREBY AGREE AND CONSENT THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF
ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY, AND THAT ANY PARTY TO
THIS AGREEMENT MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION WITH
ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF BORROWER AND THE LENDER HERETO
TO THE WAIVER OF ITS RIGHT TO TRIAL BY JURY.
SECTION 10.10 CONSENT TO JURISDICTION. The Borrower and the Lender
hereby irrevocably consent and agree that any action or proceeding against it
may be commenced and maintained in any state court sitting in Allegheny County,
Pennsylvania or in the United States District Court for the Western District of
Pennsylvania, and each waive personal service of any summons, complaint or other
process, which may be made by any other means permitted by Pennsylvania. The
Borrower irrevocably consents and agrees that the state courts sitting in
Allegheny County, Pennsylvania and the United States District Court for the
Western District of Pennsylvania shall have exclusive jurisdiction for any
action or proceeding commenced by or through it with respect to the subject
matter hereof. THE BORROWER AND THE LENDER EACH IRREVOCABLY WAIVES ANY
OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE
GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE
BRINGING OF ANY ACTION OR PROCEEDING IN SUCH JURISDICTION IN RESPECT OF THIS
AGREEMENT OR ANY DOCUMENT RELATED HERETO.
SECTION 10.11 SURVIVAL. All representations and warranties of the
Borrower contained herein or made in connection herewith are continuing and
shall survive the making of and shall not be waived by the execution and
delivery of the Loan Documents, the making of the Standby Term Loan.
Notwithstanding termination of this Agreement or the occurrence of an Event of
Default, all covenants and agreements of the Borrower shall continue in full
force and effect from and after the date of this Agreement until payment in full
of the Standby Term Loan, all interest accrued thereon and all other sums due
under the Loan Documents.
SECTION 10.12 DISCLOSURE OF INFORMATION. So long as no Event of Default
has occurred and is continuing, the Lender shall hold all information obtained
from the Borrower pursuant to or in connection with this Agreement in confidence
in accordance with its customary practices for handling information of the
nature received from the Borrower and in accordance with safe and sound lending
practices, but in any event, the Lender may disclose any information concerning
the Borrower in its possession (i) upon the order of any court or administrative
agency, (ii) pursuant to any subpoena or other legal process, or in connection
with any litigation, (iii) upon the request or demand of any regulatory agency
or other Authority having jurisdiction over the Lender, (iv) which has been
publicly disclosed, (v) which has been obtained from any Person that is not a
party hereto provided such Person did not obtain such information in violation
of any confidentiality agreement binding on such Person, (vi) to the extent
required in connection with the exercise of any remedy under the Loan Documents
or to protect the Lender's rights under the Loan Documents or in and to the
Collateral, (vii) to the Lender's legal counsel, its regulators, affiliates,
outside auditors and other professional advisors, provided such Persons agree to
be bound by the provisions of this Section, (viii) to any other Person to whom
the Lender grants or proposes to grant a participation in or assignment or other
transfer of all or any part of the Standby Term Loan or other Obligations,
provided such Persons agree to be bound by the provisions of this Section. The
Lender shall endeavor to provide prompt notice to the Borrower of its disclosure
of information under the circumstances described in (i), (ii) and (iii) above
provided the Lender is not prohibited from providing such notice under
applicable Law, and provided further the Lender's failure to provide such notice
shall not constitute a default by the Lender in performance of their obligations
under this Agreement or otherwise result in liability of the Lender to the
Borrower.
SECTION 10.13 NOTICES. (a) All notices, requests, consents, approvals,
waivers and other communications shall be in writing and mailed, faxed or
delivered, to the address or facsimile number
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specified for notices on Schedule 10.13; or, as directed to the Borrower or the
Lender, to such other address as shall be designated by such party in a written
notice to the other parties, and as directed to any other party, at such other
address as shall be designated by such party in a written notice to the Borrower
and the Lender.
(b) All such notices, requests and communications shall, when
transmitted by overnight delivery, or faxed, be effective when delivered for
overnight (next-day) delivery, or transmitted in legible form by facsimile
machine (subject to confirmation immediately by telephone call to the recipient
and followed promptly by delivery of a hard copy original thereof),
respectively, or if mailed, upon the second Business Day after the date
deposited into the U.S. mail, or if delivered, upon delivery; except that
notices to the Lender shall not be effective until actually received by the
Lender.
(c) Any agreement of the Lender herein to receive certain
notices by telephone or facsimile is solely for the convenience and at the
request of the Borrower. The Lender shall be entitled to rely on the authority
of any Person purporting to be a Person authorized by the Borrower to give such
notice and the Lender shall not have any liability to the Borrower or other
Person on account of any action taken or not taken by the Lender in reliance
upon such telephonic or facsimile notice. The obligation of the Borrower to
repay the Standby Term Loan shall not be affected in any way or to any extent by
any failure by the Lender to receive written confirmation of any telephonic or
facsimile notice or the receipt by the Lender of a confirmation which is at
variance with the terms understood by the Lender to be contained in the
telephonic or facsimile notice.
SECTION 10.14 LIMITATION OF LIABILITY. NEITHER THE LENDER NOR ITS
AFFILIATES, OFFICERS, DIRECTORS, AGENTS, CONTRACTORS, SERVANTS, EMPLOYEES,
LICENSEES, SUCCESSORS AND ASSIGNS SHALL HAVE ANY LIABILITY WITH RESPECT TO, AND
THE BORROWER, THE GENERAL PARTNER AND SUPERIOR HEREBY WAIVES, RELEASES AND
AGREES NOT TO XXX ANY OF THEM UPON, ANY CLAIM FOR ANY SPECIAL, INDIRECT,
INCIDENTAL OR CONSEQUENTIAL DAMAGES SUFFERED OR INCURRED BY THE BORROWER IN
CONNECTION WITH, ARISING OUT OF, OR IN ANY WAY RELATED TO, THIS AGREEMENT OR ANY
OF THE OTHER LOAN DOCUMENTS, OR ANY OF THE TRANSACTIONS CONTEMPLATED BY THIS
AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS EXCEPT TO THE EXTENT ARISING FROM
THE GROSS NEGLIGENCE, BAD FAITH, FRAUD, CRIMINAL OR WILLFUL MISCONDUCT OF THE
LENDER. THE BORROWER, THE GENERAL PARTNER AND SUPERIOR HEREBY WAIVE, RELEASE AND
AGREE NOT TO XXX THE LENDER, OR ANY OF ITS AFFILIATES, OFFICERS, DIRECTORS,
EMPLOYEES, ATTORNEYS OR AGENTS FOR PUNITIVE DAMAGES IN RESPECT OF ANY CLAIM IN
CONNECTION WITH, ARISING OUT OF, OR IN ANY WAY RELATED TO, THIS AGREEMENT OR ANY
OF THE OTHER LOAN DOCUMENTS, OR ANY TRANSACTION CONTEMPLATED BY THIS AGREEMENT
OR ANY OF THE LOAN DOCUMENTS, EXCEPT TO THE EXTENT ARISING FROM THE GROSS
NEGLIGENCE OR WILLFUL MISCONDUCT OF THE LENDER.
SECTION 10.15 SALE AND PARTICIPATION. The Lender may participate, or
sell, assign or otherwise transfer the Standby Term Loan, the Standby Term Loan
Note and the other Loan Documents, or any part thereof. To the extent of any
such participation, sale, assignment or transfer, the Lender shall be released
of its obligations and liabilities arising hereunder or relating hereto from and
after the effective date of, and to the extent of, such participation, sale,
assignment or transfer.
SECTION 10.16 APPLICABLE LAW. This Agreement and all other Loan
Documents shall be construed in accordance with the internal laws of the
Commonwealth of Pennsylvania without giving effect to its conflict of laws
principles including matters of construction, performance and enforcement. The
Borrower acknowledges that part of the consideration to the Lender for making
the Standby Term
35
Loan is the agreement of the Borrower that all issues relating to the maximum
interest rate and usury shall be governed by the laws of the Commonwealth of
Pennsylvania, and the Borrower further acknowledges that the agreement to be
governed by the laws of the Commonwealth of Pennsylvania is not for the purpose
of avoiding the law or public policy of any other jurisdiction, but rather is a
negotiated term in this commercial transaction and is based upon a reasonable
relation to the Commonwealth of Pennsylvania.
SECTION 10.17 BINDING EFFECT AND ASSIGNMENT. The provisions of this
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns, except that the Borrower may not
assign or transfer any of its rights or obligations under this Agreement without
the prior written consent of the Lender
SECTION 10.18 COUNTERPARTS. This Agreement and the other Loan Documents
may be executed in any number of counterparts and by different parties on
separate counterparts, each of which counterparts, when so executed and
delivered, shall be deemed to be an original and all of which counterparts,
taken together, shall constitute but one and the same Agreement. This Agreement
shall become effective upon the execution and delivery of a counterpart hereof
by each of the parties hereto. Delivery by telecopier of an executed counterpart
of a signature page to this Agreement, the other Loan Documents or any notice,
communication, agreement, certificate, document or other instrument in
connection herewith shall be effective as delivery of an executed original
counterpart thereof.
SECTION 10.19 HEADINGS. The title, headings and table of contents of
this Agreement and the other Loan Documents are included for the convenience of
reference only and shall not constitute a part of the applicable Loan Documents
for any other purpose.
SECTION 10.20 SEVERABILITY. The provisions of this Agreement are
intended to be severable. If any provision of this Agreement shall be held
invalid or unenforceable in whole or in part in any jurisdiction, such provision
shall, as to such jurisdiction, be ineffective to the extent of such invalidity
or unenforceability without in any manner affecting the validity or
enforceability hereof in any other jurisdiction or the remaining provisions
hereof in any jurisdiction.
SECTION 10.21 ENTIRE AGREEMENT. This Agreement, together with the other
Loan Documents, embodies the entire agreement and understanding between the
Borrower and the Lender, and supersedes all prior or contemporaneous agreements
and understandings of such Persons, verbal or written, relating to the subject
matter hereof and thereof.
SECTION 10.22 SEALED DOCUMENT. This Agreement is intended as a document
under seal.
SECTION 10.23 USA PATRIOT ACT NOTIFICATION. The following notification
is provided to the Borrower pursuant to Section 326 of the USA Patriot Act of
2001, 31 U.S.C. Section 5318:
(a) IMPORTANT INFORMATION ABOUT PROCEDURES FOR OPENING A NEW
ACCOUNT. To help the government fight the funding of terrorism and money
laundering activities, Federal law requires all financial institutions to
obtain, verify, and record information that identifies each person or entity
that opens an account, including any deposit account, treasury management
account, loan, other extension of credit, or other financial services product.
What this means for the Borrower: When the Borrower opens an account, if the
Borrower is an individual, the applicable bank will ask for the Borrower's name,
taxpayer identification number, residential address, date of birth and other
information that will allow such bank to identify the Borrower, and, if the
Borrower is not an individual, such bank will ask for the Borrower's name,
taxpayer identification number, business address, and other information that
will allow such bank to identify the Borrower. The bank may also ask, if
36
the Borrower is an individual, to see the Borrower's driver's license or other
identifying documents, and, if the Borrower is not an individual, to see the
Borrower's legal organizational documents or other identifying documents.
(b) GOVERNMENT REGULATION. The Borrower shall not (i) be or
become subject at any time to any law, regulation, or list of any government
agency (including, without limitation, the U.S. Office of Foreign Asset Control
list) that prohibits or limits the Lender from making any advance or extension
of credit to the Borrower or from otherwise conducting business with the
Borrower, or (ii) fail to provide documentary and other evidence of the
Borrower's identity as may be requested by the Lender at any time to enable the
Lender to verify the Borrower's identity or to comply with any applicable law or
regulation, including, without limitation, Section 326 of the USA Patriot Act of
2001, 31 U.S.C. Section 5318.
IN WITNESS WHEREOF, the parties hereto, intending to be legally bound
hereby, have caused their duly authorized officers to execute and deliver this
Credit Agreement effective as of the day and year first above written.
WITNESS: BRADFORD RESOURCES, LTD.
BY: EASTERN MATERIALS CORPORATION, Its
sole general partner
/s/ XXXX XXXXXXXXX By: /s/ XXXXX X. XXXXXX
---------------------------------- -------------------------------
Title:
----------------------------
WITNESS: SUPERIOR WELL SERVICES, LTD.
BY: BUFFALO VALLEY REAL ESTATE COMPANY,
its sole general partner
/s/ XXXX XXXXXXXXX By: /s/ XXXXX X. XXXXXX
---------------------------------- -------------------------------
Title:
----------------------------
CITIZENS BANK OF PENNSYLVANIA
BY: /s/ XXXXX XXXXXX
-------------------------------
TITLE:
----------------------------
37
